Innovex International Inc (INVX) 2025 Q2 法說會逐字稿

Good morning and welcome to Innovex's second quarter 2025 earnings call.

早安，歡迎參加 Innovex 2025 年第二季財報電話會議。

(Operator Instructions)

（操作員指示）

At this time, I would like to turn the call over to Avinash Cuddapah, Senior Director of Investor Relations.

現在，我想將電話轉給投資者關係高級總監 Avinash Cuddapah。

Please go ahead.

請繼續。

Good morning, everyone and thank you for joining us on today's call. An updated investor presentation has been posted under the Investors tab on the company's website, along with the earnings press release. This call is being recorded, and the replay will be made available on the company's website following the call.

大家早安，感謝你們參加今天的電話會議。更新後的投資者介紹以及收益新聞稿已發佈在公司網站的「投資者」標籤下。本次通話將會被錄音，通話結束後將在公司網站上發布重播。

Before we begin, I would like to remind you that Innovex's comments may include forward-looking statements and discuss non-GAAP financial measures. It should be noted that a variety of factors could cause Innovex's actual results to differ materially from the anticipated results or expectations expressed in these forward-looking statements.

在我們開始之前，我想提醒您，Innovex 的評論可能包括前瞻性陳述並討論非 GAAP 財務指標。需要注意的是，多種因素可能導致 Innovex 的實際結果與這些前瞻性聲明中表達的預期結果或期望有重大差異。

Please refer to the second quarter of 2025 financial and operational results announcement that we released yesterday for a discussion of forward-looking statements and reconciliations of non-GAAP measure. Speaking on the call today from Innovex, we have Adam Anderson, Chief Executive Officer, and Kendal Reed, Chief Financial Officer.

有關前瞻性陳述和非公認會計準則指標對帳的討論，請參閱我們昨天發布的 2025 年第二季財務和營運績效公告。今天在 Innovex 電話會議上發言的有首席執行官亞當·安德森 (Adam Anderson) 和首席財務官肯德爾·里德 (Kendal Reed)。

I would now like to turn the call over to Adam Anderson.

現在我想把電話轉給亞當安德森。

Thanks Avi. Good morning and thank you everyone for joining us today. First, I'd like to say thanks to our incredible team. We continue to progress on our strategic initiatives, and I'm very proud and grateful for their efforts.

謝謝 Avi。早安，感謝大家今天的參加。首先，我要感謝我們優秀的團隊。我們的策略舉措不斷取得進展，我對他們的努力感到非常自豪和感激。

On today's call, I'll discuss our second quarter results and walk through some of the key highlights, with organic growth, the Citadel acquisition, and our outlook. Kendal will then review our Q2 financial results, our strong financial position, and the multiple levers we can pull, as strong shareholder returns.

在今天的電話會議上，我將討論我們的第二季業績，並介紹一些關鍵亮點，包括有機成長、Citadel 收購和我們的展望。肯德爾隨後將回顧我們第二季度的財務業績、強勁的財務狀況以及我們可以採取的多種措施，以實現強勁的股東回報。

Innovex has created a unique energy industrial platform that drives exceptional service and value for our customers as well as absolute returns for our shareholders. We've done this by accurating a portfolio of what we refer to as Big Impact, Small Ticket Products. Our business model requires very little (inaudible), typically 2% to 3% of revenue, and we aim to convert 50% to 60% of our EBITDA into free cash flow under normal business conditions.

Innovex 創建了一個獨特的能源工業平台，為我們的客戶提供卓越的服務和價值，並為我們的股東帶來絕對的回報。我們透過精確組合所謂的「大影響力、小價位產品」來實現這一目標。我們的商業模式需要的投入很少（聽不清楚），通常佔收入的 2% 到 3%，我們的目標是在正常商業條件下將 50% 到 60% 的 EBITDA 轉化為自由現金流。

I am extremely with our strong margins and free cash flow in Q2, but disappointed by the lower than expected revenue. Margins and free cash flow grew sequentially despite a challenging operating environment. North America land business remained resilient, absorbing the seasonal effects of breakup in Canada, excluding the benefit of one month of Citadel revenue, our US land business remained flat, outperforming a 7% recap reduction.

我對我們第二季的強勁利潤率和自由現金流感到非常滿意，但對低於預期的收入感到失望。儘管經營環境充滿挑戰，利潤率和自由現金流仍持續成長。北美土地業務保持韌性，吸收了加拿大分拆的季節性影響，不包括 Citadel 一個月收入的收益，我們的美國土地業務保持平穩，表現優於 7% 的回購減少。

This revenue performance reflects market share gains. For example, in our drilling enhancement product line, which was brought over from the US acquisition last year, this product line continues to gain share in the US while also growing share outside of the US as we leverage our international distribution channels.

這一收入表現反映了市場份額的成長。例如，在我們去年從美國收購而來的鑽井增強產品線中，隨著我們利用國際分銷管道，該產品線在美國繼續獲得份額，同時在美國以外的份額也在增長。

Importantly, revenue synergies from the DWS acquisition have begun materializing, demonstrating the value of this transaction. As an example, the legacy DWS sales team recently a multi-rig bid for our cementing tools with a major operator in the Permian Basin, the first big cross-selling length of many we expect to realize.

重要的是，DWS 收購帶來的收入綜效已經開始實現，證明了這筆交易的價值。例如，原有的 DWS 銷售團隊最近與二疊紀盆地的一家主要營運商就我們的固井工具進行了多鑽機投標，這是我們預計將實現的眾多交叉銷售中的第一個。

Turning international and offshore business, revenue was down approximately 13% sequentially. This softness was primarily isolated to our Middle East and Asia Pacific market, which experienced activity declines, short term product specific headwinds, and delivery delays which deferred revenues that we had previously expected to book in Q2.

轉向國際和離岸業務，營收季減約 13%。這種疲軟主要集中在我們的中東和亞太市場，這些市場經歷了活動下滑、短期產品特定阻力以及交貨延遲，從而推遲了我們先前預計在第二季度實現的收入。

(inaudible) demand, however, remains healthy, and we expect a return to momentum in the coming quarters. Despite the weakness in our Middle East and Asia Pacific businesses. We did in our Latin America business thanks to stronger performance in Mexico and Argentina. Importantly, we're starting to gain traction with our drilling and completion tools in Argentina's unconventional markets to customer adoption of our gunro dreamers and dissolvable crack books.

（聽不清楚）然而，需求依然健康，我們預計未來幾季將恢復成長動能。儘管我們的中東和亞太業務表現疲軟。由於墨西哥和阿根廷的業績表現強勁，我們在拉丁美洲的業務取得了成功。重要的是，我們的鑽井和完井工具開始在阿根廷非常規市場獲得青睞，客戶也開始採用我們的 gunro dreamers 和可溶解裂紋書。

This is particularly exciting as we expect adoption of these products to open the market for our suite of wellboard technologies driving organic growth in future quarters. I would now like to discuss our recent acquisition of Citadel Casing Solutions which we (inaudible) on May 30.

這尤其令人興奮，因為我們預計這些產品的採用將為我們的井板技術套件打開市場，從而推動未來幾季的有機成長。我現在想討論我們最近收購的 Citadel Casing Solutions，我們（聽不清楚）在 5 月 30 日完成收購。

Citadel is already expanding our market position, enhancing our technology portfolio, and unlocking meaningful commercial synergies. This acquisition further solidifies and affects leadership position in the US land market for cementing tools with market leading scale and capabilities.

Citadel 已經在擴大我們的市場地位、增強我們的技術組合併釋放有意義的商業協同效應。此次收購進一步鞏固並影響了公司在美國陸地固井工具市場領先的規模和能力的領導地位。

Citadel's product lines are complementary to our legacy portfolio and fit squarely within our Big Impact, Small Ticket approach. By Big Impact, Small Ticket, we mean solutions that are critical to well construction and completion yet represent a small portion of our customers overall low cost.

Citadel 的產品線與我們的傳統產品組合相輔相成，完全符合我們的「大影響、小票價」策略。所謂大影響、小成本，是指那些對油井建設和完井至關重要但只佔客戶整體低成本一小部分的解決方案。

We've curated a portfolio of products that fit this description because these products tend to have consistent margins by a clear value proposition. Citadel's TrenchFoot wet shoe technology is a quintessential Big Impact, Small Ticket product. This proprietary technology enables increased reservoir access, which ultimately increases production from our customers wealth.

我們精心挑選了一系列符合此描述的產品，因為這些產品往往透過明確的價值主張獲得一致的利潤。Citadel 的 TrenchFoot 濕鞋技術是典型的「大影響、小價」產品。這項專有技術可以增加油藏的利用率，最終提高客戶財富的產量。

Additionally, these tools help operators reduce cycle times, driving measurable gain efficiencies, paramount in today's competitive landscape. As a good example of this, TrenchFoot has been utilized by one major international operators in over 150 successful installations in the US with a 100% reliability rate leading to an estimated $161 million in savings. We estimate that this has been adopted on only 25% of applicable wealth in the US, which means we have significant potential to grow share.

此外，這些工具可協助營運商縮短週期時間，提高可衡量的增益效率，這在當今的競爭環境中至關重要。一個很好的例子是，一家大型國際營運商已在美國成功安裝了超過 150 個 TrenchFoot，其可靠率達到 100%，節省了約 1.61 億美元。我們估計，美國僅有 25% 的適用財富採用了這項制度，這意味著我們有巨大的成長潛力。

We are already seeing significant synergies in the transaction which should drive incremental growth in the coming quarters. It's important to understand that Citadel's existing blue chip customer base had minimal overlap with Innovex's customer base, which means there are opportunities to grow market share for both legacy portfolios.

我們已經看到交易中顯著的協同效應，這將推動未來幾季的增量成長。重要的是要了解，Citadel 現有的藍籌客戶群與 Innovex 的客戶群重疊很小，這意味著兩個傳統投資組合都有機會擴大市場份額。

In fact, just a few months after closed, we have already seen early wins. Within the last week, we've made significant progress validating the transcript system for one of the largest operators in West Texas. We successfully passed the first stage of field testing with this customer and expect to pick up nine additional rigs utilizing TrenchFoot with a strategic customer.

事實上，在交易結束後僅僅幾個月，我們就已經看到了早期的勝利。在過去一周內，我們在驗證西德克薩斯州最大的運營商之一的成績單系統方面取得了重大進展。我們與該客戶成功通過了第一階段的現場測試，並預計將與戰略客戶一起利用 TrenchFoot 獲得另外九台鑽機。

We expect this to translate to roughly $1 million per quarter of additional revenue with potential by both deploying TrenchFoot to more rigs with this customer and expanding the set of products we supply to this customer.

我們預計，透過將 TrenchFoot 部署到該客戶的更多鑽孔機上並擴大我們向該客戶提供的產品系列，這將轉化為每季約 100 萬美元的額外收入。

We don't plan to stop with US land, however. While approximately 80% of Citadel's current business is concentrated in US land, the portfolio is well suited for applications in offshore and international markets, which can now be easily tapped as the Innovex platform.

然而，我們並不打算止步於美國本土。雖然 Citadel 目前約 80% 的業務集中在美國陸地，但其產品組合非常適合海上和國際市場的應用，現在可以輕鬆地將其作為 Innovex 平台來利用。

Finally, we have already realized synergies through salesforce integration and distribution consolidation. Profiling efforts are quickly gaining traction efforts to improve delivery efficiency by streamlining our footprint. These early wins give us confidence that this transaction will drive long term sustainable value across the Innovex platform for both our customers and shareholders.

最後，我們已經透過銷售團隊整合和分銷整合實現了協同效應。透過精簡我們的足跡，分析工作正在迅速獲得關注，以提高交付效率。這些早期的勝利讓我們相信，這筆交易將為我們的客戶和股東在 Innovex 平台上帶來長期可持續的價值。

The Citadel acquisition is a prime example of our M&A strategy, a great business needing for its current investors that fits extremely well with Innovex's platform and business model. Our strong balance sheet allowed us to execute this transaction at a time of particularly elevated macro uncertainty, as we see the long-term value of the combined portfolio and commercial synergies.

Citadel 收購是我們併購策略的典型例子，對於其現有投資者來說，這是一項偉大的業務，與 Innovex 的平台和商業模式非常契合。我們強勁的資產負債表使我們能夠在宏觀不確定性特別高的時期執行這項交易，因為我們看到了合併後的投資組合和商業協同效應的長期價值。

As we said all along, we make the cycle of our industry a feature, not of our business model in this quarter with no exceptions. Even after spending $70 million of cash on the Citadel acquisition, we maintain a net cash balance sheet. We expect to close in the $95 million sale of our Eldridge facility in the third quarter, which today represents roughly 8% of our market cap.

正如我們一直所說的那樣，本季我們將行業週期視為一個特徵，而不是我們的商業模式，毫無例外。即使在花費 7,000 萬美元現金收購 Citadel 之後，我們仍然保持淨現金資產負債表。我們預計將在第三季完成以 9,500 萬美元出售埃爾德里奇工廠的交易，目前該工廠約占我們市值的 8%。

Our thesis when we emerged with is that we can improve margins and service quality and this sale not only frees up an exceptional amount of capital, but the key enabler of our plans to consolidate facilities, (inaudible) efficiencies, and drive cultural change.

我們成立之初的論點是，我們可以提高利潤率和服務質量，這次出售不僅釋放了大量資金，而且是我們整合設施、（聽不清楚）提高效率和推動文化變革計劃的關鍵推動因素。

As discussed previously, we've made improving the customer experience a top priority, and a key driver of that has been raising our on delivery of the (inaudible) product line now to the low 70% range. This operational progress has meaningfully enhanced our credibility with customers and positioned us to compete for new opportunities we simply wouldn't have been considered for before. In fact, we've recently secured two contracts, each in the $5 million to $10 million range that we likely would have lost in the past to reliability concerns.

如同先前所討論的，我們把改善客戶體驗當作首要任務，而其中一個關鍵驅動因素就是將我們（聽不清楚）產品線的交付率提高到 70% 以下。這項營運進展顯著提高了我們在客戶心目中的信譽，並使我們能夠爭奪以前從未考慮過的新機會。事實上，我們最近獲得了兩份合同，每份合約的價值都在 500 萬到 1000 萬美元之間，而過去我們可能會因為可靠性問題而損失這些合約。

While we're pleased with this early progress, we're not stopping here. Our goal is to reach an on-time delivery rate of over 90% consistent with Innovex's historical standards, and we're confident in our team's ability to continue to close that GAAP.

雖然我們對這項早期進展感到滿意，但我們不會止步於此。我們的目標是達到與 Innovex 歷史標準一致的 90% 以上的準時交貨率，我們相信我們的團隊有能力繼續達到該 GAAP。

Overall, I'm pleased with the second quarter results. Despite the tough operating environment, we maintain margins, generated significant free cash flow, and closed on a highly creative acquisition. I would like to once again thank our employees for their efforts and look forward to continued progress against our aspirations to improve the customer experience, grow market share, and achieve margins in the mid 20% range.

總體而言，我對第二季的業績感到滿意。儘管經營環境嚴峻，我們仍維持了利潤率，產生了大量自由現金流，並完成了一項極具創意的收購。我想再次感謝我們員工的努力，並期待我們繼續努力實現改善客戶體驗、擴大市場份額和實現 20% 左右利潤率的願望。

I hand the call over to Kendal.

我把電話交給肯德爾。

Thanks Adam, and good morning, everyone. Just as a general reminder before we review the Q2 results, we closed on the merger with Dril-Quip on September 6, 2024, and Innovex was the accounting acquirer in the merger. So historical comparative periods prior to Q3 2024 reflect legacy Innovex standalone results.

謝謝亞當，大家早安。在我們回顧第二季業績之前，需要提醒的是，我們於 2024 年 9 月 6 日完成了與 Dril-Quip 的合併，而 Innovex 是合併中的會計收購者。因此，2024 年第三季之前的歷史比較期反映了傳統 Innovex 的獨立結果。

Turning to Q2 2025, while we are disappointed by the top line results, we are pleased that our overall Q2 financial performance demonstrated the durability of our earnings and cash flow, highlighting the strength of our business model in all phases of the cycle.

展望 2025 年第二季度，雖然我們對營收結果感到失望，但我們很高興看到第二季度的整體財務業績證明了我們的盈利和現金流的持久性，凸顯了我們的商業模式在周期各個階段的實力。

Our second quarter revenue was $224 million which is an increase of 72% year-over-year and a decrease of 7% sequentially. The year over year increase is primarily driven by the impact of the Dril-Quip merger and the DWS acquisition.

我們第二季的營收為 2.24 億美元，年增 72%，季減 7%。年成長主要得益於 Dril-Quip 合併和 DWS 收購的影響。

We evaluate our revenue geographically by separating our shorter cycle onshore US and Canadian operations, which we refer to as NAM land from our longer cycle international and offshore operations, which includes the Gulf of America.

我們根據地理位置來評估我們的收入，將週期較短的美國和加拿大陸上業務（我們稱之為 NAM 陸地）與週期較長的國際和海上業務（包括美國灣）分開。

Our Q2 NAM land revenue of $120 million was flat in comparison to Q1, with growth in US land primarily as a result of the DWS business continuing to outpace the market and the addition of one month of Citadel revenue, roughly offsetting seasonal decline to Canada due to spring breakup.

我們第二季北美土地收入為 1.2 億美元，與第一季持平，美國土地收入的成長主要歸因於 DWS 業務繼續跑贏市場，以及增加了一個月的 Citadel 收入，大致抵消了由於春季解散導致的加拿大季節性下滑。

Our international and offshore revenue during the second quarter of 2025 was $104 million, a decrease of 13% sequentially, primarily to greater than anticipated revenue weakness in our Middle East and Asian Pacific business, as Adam discussed.

正如亞當所討論的，我們在 2025 年第二季度的國際和離岸收入為 1.04 億美元，環比下降 13%，這主要是因為中東和亞太業務的收入疲軟程度超出預期。

Our Q2 cost of sales, exclusive of depreciation and amortization, decreased by $11 million sequentially to $153 million. Selling general and administrative expenses for the quarter decreased by $3 million sequently to $29 million. Our SG&A as a percentage of revenue continues to decrease from the close of the drillle merger, moving from approximately 25% in Q3 2024 to just below 13% in Q2 2025.

我們第二季的銷售成本（不包括折舊和攤提）季減 1,100 萬美元至 1.53 億美元。本季銷售一般及行政開支較上月減少 300 萬美元，至 2,900 萬美元。自 Drillle 合併結束以來，我們的銷售、一般及行政費用佔收入的百分比持續下降，從 2024 年第三季的約 25% 下降到 2025 年第二季的略低於 13%。

Strong operational execution and synergies have driven increases in EBITDA margins time of the merger, rising from 18% in Q3 2024 to 21% in Q2 2025, despite a decrease in revenue. We continue to believe that in the long term, the combined Innovex platform can generate EBITDA margins of 25% or greater in line with Innovex's historical results. We expect the sale of the Eldridge facility to unlock the next phase of margin expansion.

強大的營運執行力和協同效應推動了合併時的 EBITDA 利潤率上升，儘管收入有所下降，但從 2024 年第三季的 18% 上升到 2025 年第二季的 21%。我們仍然相信，從長遠來看，合併後的 Innovex 平台可以產生 25% 或更高的 EBITDA 利潤率，與 Innovex 的歷史業績一致。我們預計埃爾德里奇工廠的出售將開啟下一階段的利潤擴張。

We still expect the facility sales to close in the third quarter of 2025, with margin benefits being realized over the course of 2026. However, we would caution that we do not expect margin improvement to be linear, as we will incur various costs and inefficiencies as we work through the integration of physical operations over the next year.

我們仍然預計該設施的銷售將於 2025 年第三季完成，利潤收益將在 2026 年實現。然而，我們要提醒的是，我們預期利潤率的提高並不是線性的，因為在明年我們整合實體業務的過程中，我們將產生各種成本和效率低下的問題。

Adjusted EBITDA for the second quarter was approximately $47 million an increase of approximately $1 million sequentially and an increase of $17 million year-over-year. Free cash flow for the second quarter was $52 million, a sequential increase of $28 million.

第二季調整後 EBITDA 約 4,700 萬美元，比上一季增加約 100 萬美元，比去年同期增加 1,700 萬美元。第二季自由現金流為 5,200 萬美元，季增 2,800 萬美元。

During Q2, we successfully completed the divestiture of our Subsea Tree product line for total proceeds of $10 million. While this sale had no impact on Q2 revenue, approximately $7 million of that $10 million sale price was attributable to inventory and thus represents a one-time benefit to cash flow from operations and free cash flow during the second quarter.

在第二季度，我們成功完成了海底採油樹產品線的剝離，總收益為 1,000 萬美元。雖然此次出售對第二季度的收入沒有影響，但在 1000 萬美元的售價中，約有 700 萬美元歸因於庫存，因此對第二季度的經營現金流和自由現金流產生了一次性收益。

As a reminder, under normal business conditions, we aim to convert 50% to 60% of our adjusted EBITDA into free cash flow. During periods of slower activity, however, we can unwind working capital to convert an even higher percentage of our adjusted EBITDA into cash.

提醒一下，在正常商業條件下，我們的目標是將 50% 到 60% 的調整後 EBITDA 轉換為自由現金流。然而，在經濟活動放緩的時期，我們可以釋放營運資本，將更高比例的調整後 EBITDA 轉換為現金。

Capital expenditures in the second quarter of 2025 were $7 million representing approximately 3% of revenue in line with our historical target of 2% to 3% of revenue. We still anticipate being on the high end of our historical range in 2025 while we work through facility consolidation after the sale of the Eldridge facility. This marginal increase in 2025 CapEx will be far outweighed by the net proceeds of the sale of Eldridge, which demonstrates the value of our (inaudible) business loan.

2025 年第二季的資本支出為 700 萬美元，約佔營收的 3%，與我們 2% 至 3% 的歷史目標一致。在出售埃爾德里奇工廠後進行設施整合的同時，我們仍然預計 2025 年的產量將達到歷史最高水準。2025 年資本支出的這一小幅增長將遠遠超過出售 Eldridge 的淨收益，這反映了我們的（聽不清楚）商業貸款的價值。

Even after acquiring Citadel in an all-cash deal, our balance sheet remains strong with the net cash position to end the quarter. Our debt as of June 30, 2025 was $41 million representing a debt to trailing 12-months adjusted to the ratio of 0.25 times, more than offset $69 million of cash and equivalents.

即使在以全現金交易收購 Citadel 之後，我們的資產負債表仍然保持強勁，本季末保持淨現金狀況。截至 2025 年 6 月 30 日，我們的債務為 4,100 萬美元，即過去 12 個月的債務比率調整為 0.25 倍，超過了 6,900 萬美元的現金和等價物。

Our return on capital employed for the 12-months ended June 30, 2025 was 13%, which is an increase of 1% compared to the 12-months ended March 31, 2025. We continue to make progress towards our goal of returning the business to Innovex's seven-year historic average ROCE of approximately 18%.

截至 2025 年 6 月 30 日的 12 個月，我們的資本使用回報率為 13%，與截至 2025 年 3 月 31 日的 12 個月相比增長了 1%。我們繼續朝著我們的目標前進，使業務恢復到 Innovex 七年歷史平均 ROCE 約 18%。

Turning to our outlook for the third quarter, we expect adjusted EBITDA of $40 to $45 and revenues of $230 million to $240 million. Our anticipated sequential revenue growth is supported by several key factors. First, scheduled deliveries on certain key projects in the Middle East will increase from Q2 to Q3.

展望第三季度，我們預計調整後的 EBITDA 為 40 至 45 美元，營收為 2.3 億至 2.4 億美元。我們預期的連續收入成長受到幾個關鍵因素的支持。一是中東地區部分重點專案計畫交付量將從第二季增加到第三季。

Additionally, our US offshore and Asia Pacific revenue is expected to benefit shipments that were previously expected in Q2 but have now shifted into the back half of the year.

此外，我們美國海外和亞太地區的收入預計將有利於先前預計在第二季但現在已轉移到下半年的出貨量。

Finally, Q3 will mark the first full quarter of contributions from Citadel, which expect to be a meaningful offset to potential softness in the US land market, where continued uncertainty and decreased customer investments may weigh further on activity.

最後，第三季將是 Citadel 貢獻的第一個完整季度，預計將對美國土地市場的潛在疲軟產生重大抵消作用，美國土地市場持續的不確定性和客戶投資的減少可能會進一步影響其活動。

Latin America, North Sea, and Africa businesses are expected to remain relatively stable quarter-over-quarter, reflecting consistent underlying demand across those regions. Although operating environment continues to be volatile, we remain focused on strong execution and capital discipline, and we're confident in the resilience of our portfolio as we move into the back half of the year.

預計拉丁美洲、北海和非洲業務將保持相對穩定的環比成長，反映出這些地區一致的潛在需求。儘管經營環境持續動盪，我們仍然專注於強有力的執行和資本紀律，並且我們對進入下半年投資組合的彈性充滿信心。

As we have stressed previously, we believe that our business model can be opportunistic in all phases of the cycle. The acquisition of Citadel is a great example and showcases our M&A strategy in action. By leveraging our strong balance sheet and cash flow generative business model, we were able to acquire Citadel in an all cash deal while containing a conservative leverage profile and net cash position.

正如我們之前強調的那樣，我們相信我們的商業模式在周期的所有階段都可以抓住機會。收購 Citadel 就是一個很好的例子，展示了我們的併購策略的實際作用。透過利用我們強大的資產負債表和現金流產生業務模式，我們能夠以全現金交易收購 Citadel，同時保持保守的槓桿狀況和淨現金狀況。

Citadel was acquired at an attractive value of 3.8 times LTM adjusted EBITDA and with 8% of Innovex's earnings per share before factoring in expected synergies. Fitted outfits are strict qualitative and quantitative frameworks utilizing its big impact ticket product portfolio to create a capitalized business which achieved 26% adjusted EBITDA margins with strong free cash flow and returns on capital.

Citadel 的收購價格極具吸引力，為 LTM 調整後 EBITDA 的 3.8 倍，且在考慮預期協同效應之前，其每股收益為 Innovex 的 8%。Fitted outfits 採用嚴格的定性和定量框架，利用其影響力巨大的產品組合打造資本化業務，實現了 26% 的調整後 EBITDA 利潤率，並擁有強勁的自由現金流和資本回報率。

We continue to maintain an active M&A pipeline of attractive companies which fit our framework, and we are positioned to be opportunistic given the lack of capital available to the energy sector. In addition to evaluating inorganic growth opportunities, we maintain significant capacity on our previously authorized $100 million share repurchase program as a leading use of capital.

我們將繼續保持對符合我們框架的有吸引力的公司的積極併購管道，並且鑑於能源行業缺乏可用資本，我們已做好準備抓住機會。除了評估無機成長機會外，我們還保留了先前授權的 1 億美元股票回購計畫的大量產能，作為主要的資本用途。

During the second quarter, we repurchased approximately $8.5 million worth of shares. We will continue to weigh share repurchases against M&A, especially in the current environments where there's significant market volatility. As we look towards the second half of the year, we're excited about potential opportunities on the horizon.

第二季度，我們回購了價值約 850 萬美元的股票。我們將繼續權衡股票回購與併購，尤其是在當前市場波動較大的環境下。展望下半年，我們對即將出現的潛在機會感到興奮。

We believe our net cash balance sheet, expected close of the Eldridge facility sale in Q3, and the integration of the Citadel business will position us well to continue delivering superior returns to our shareholders.

我們相信，我們的淨現金資產負債表、預計在第三季完成的 Eldridge 設施銷售以及 Citadel 業務的整合將使我們能夠繼續為股東帶來豐厚的回報。

I will now turn the call back to Adam.

我現在將電話轉回給亞當。

Thanks, Kendall.

謝謝，肯德爾。

To close, I want to reiterate that while we face some headwind quarter, we continue to remain opportunistic and grow the business both organically and inorganically. As I've always said, we are adept at responding to events and developments that are difficult to predict. We've taken steps to strengthen our execution, unlock synergies, and ensure that we remain aligned with our customers evolving needs in a more demanding environment.

最後，我想重申，儘管我們面臨一些逆風，但我們仍將保持機遇，透過有機和無機的方式發展業務。正如我一直所說，我們善於應對難以預測的事件和發展。我們採取措施加強執行力，發揮協同效應，並確保在更嚴苛的環境中與客戶不斷變化的需求保持一致。

At the same time, the foundational pillars of our business remain strong. Our strategy is resonating. Our portfolio is well positioned for both near-term resilience and long-term growth, and we continue to execute with discipline.

同時，我們業務的基礎支柱依然強勁。我們的策略引起了共鳴。我們的投資組合在短期內具有良好的韌性，在長期內也具有良好的成長潛力，並且我們將繼續嚴格執行。

As we look ahead, we're confident in our ability to navigate the current landscape while investing in the resources that will position for success over time. Thank you again to our team for their continued focus and to our customers and shareholder for your trust and partnership.

展望未來，我們有信心有能力駕馭當前的局勢，同時投資能帶來長期成功的資源。再次感謝我們團隊的持續關注以及我們的客戶和股東的信任和合作。

We would like to open the line for questions now. Operator.

我們現在願意開放提問專線。操作員。

Thank you, ladies and gentlemen, we will now begin the question-and-answer session.

謝謝女士們、先生們，我們現在開始問答環節。

(Operator Instructions)

（操作員指示）

David Smith, Pickering Energy Partners.

大衛史密斯 (David Smith)，Pickering Energy Partners。

Hey, good morning. Congrats on the quarter and the seriously strong free cash flow generation.

嘿，早安。恭喜本季業績和強勁的自由現金流產生。

Thanks Dave.

謝謝戴夫。

I think last quarter you flagged a recovery in the deliveries that were expected in the second half. Want to ask if anything has changed in that view since last quarter, and could you please share caller for how second half of the deliveries, might split up, between Q3 and Q4.

我認為上個季度你們就預示下半年交付量將出現復甦。想問一下自上個季度以來這種觀點是否有所改變，您能否告知來電者，第三季和第四季之間下半年的交付量可能如何分配。

Yeah, that's right. We think the, sub deliveries will be a little stronger in the back half of the year than the first half of the year, we gave the guidance on Q3 it probably be a little early to give, we're not ready to give guidance on Q4 revenue, but I think we, I'd say those, increases are probably going to be modest. You definitely see it international offer should be up a little bit in Q3, but we're a little bit too early to say with let's let's say specificity.

是的，沒錯。我們認為，下半年的交付量將比上半年略有增加，我們給出了第三季度的指引，現在給出指引可能還為時過早，我們還沒有準備好給出第四季度收入的指引，但我認為，我想說，這些增長可能會比較溫和。您肯定會看到，第三季的國際報價應該會略有上漲，但我們現在就具體說這些還為時過早。

I think what we see subse business is we have a really wonderful franchise. The, nature of the business is a little bit lumpier than our US land business so I think that's what you're seeing a little bit of softness in the first half of the year. I'll set by a little bit stronger in the back half of the year, but it's a good franchise. We're really excited about where we're we're headed with it over the next couple of years.

我認為我們在後續業務中看到的是我們擁有一個真正出色的特許經營權。這項業務的性質比我們的美國陸地業務稍微不穩定一些，所以我認為這就是今年上半年你會看到的一些疲軟現象。我會在下半年表現得更好一些，但這是一個很好的特許經營權。我們對未來幾年的發展方向感到非常興奮。

Okay. Just that and just want to follow up on the international and offshore product revenue decline. Sequentially I know you get some regional color on it but I was just looking if there was any more color on whether you know it it really was just mostly delayed deliveries that you know was it concentrated in any particular product line or customer and then you know the there's a Q3 guide factor and you know and the conservatism on the current delivery schedule.

好的。僅此而已，只是想跟進國際和離岸產品收入的下降。依次來說，我知道你會得到一些地區性的影響，但我只是想知道是否還有更多的影響，你是否知道這實際上主要是延遲交貨，你知道它是否集中在任何特定的產品線或客戶身上，然後你知道有一個第三季度的指導因素，你知道，以及當前交貨時間表的保守性。

So the, as I said on the call it's a couple different things the activity was a little bit lighter, but most of it was really, some deliveries that we're expecting to get in Q2. A lot of those things we had manufactured ready to go we just didn't quite do everything we needed to do to cross the hurdles for revenue recognition which is we talked about before we've got a much more string criteria than what had been recognized previously in the sub world so we're still that's still a little bit of giving us a little bit of lumpiness in our results right now I would say.

因此，正如我在電話中所說的那樣，有幾件不同的事情，活動稍微輕鬆一些，但大多數都是我們預計在第二季度會得到的一些交付。我們已經準備好生產很多產品，但我們還沒有完成所有需要做的事情來跨越收入確認的障礙，正如我們之前討論過的，我們有比以前在子世界中確認的標準更嚴格的標準，所以我想說，現在我們的結果仍然有點不平衡。

And. The second one that we're talking about, we talked a little bit about a product specific headwind that really has to do with the singular product that we run in one specific market in the eastern hemisphere. We've run this tool a few 1,000 times over the last 7-years or 8-years, had really good success with it. We had a little bump in the road on Q2 with that operationally, where we had a problem down home and we're unfortunately put on.

和。我們正在談論的第二個問題是，我們稍微談論了特定產品的逆風，這實際上與我們在東半球某個特定市場運營的單一產品有關。在過去的 7 年或 8 年裡，我們已經運行了這個工具幾千次，並且取得了非常好的成功。我們在第二季的營運過程中遇到了一些小問題，我們在家裡遇到了問題，很不幸地我們被安排了。

Hold temporarily with this customer so we're we have all hands-on deck addressing that issue we've got really good line of sight on fixing that. I think we've done enough work. We know what the resolution is we're just working with our customer on, dotting all the Is, crossing all the Ts expect that we get that, product back in the ground. Q4 and start to see a little bit of improvement for there but that that was the other kind of less than expected, revenue or a driver for a less than expected revenue.

暫時等待這位客戶，以便我們全力解決這個問題，我們對解決這個問題有很好的把握。我認為我們已經做了足夠的工作。我們知道解決方案是什麼，我們只是在與客戶合作，把所有 I 都點好，把所有 T 都過好，希望我們能把產品重新投入生產。第四季開始看到一些改善，但這是另一個低於預期的收入或導致收入低於預期的驅動因素。

What I would say on that issue though is, hey, this is really, it is unfortunate for sure, but it's really an opportunity for us to demonstrate to our customers how. Our strength of how responsive we are, the way we really differentiate ourselves, not that we don't have some of these bumps in the road, but that when we have them, we're much more adept at working with our customers to resolve those issues. Quickly leave them feeling like, hey, we've got a really good resolution to it and that we're problem solvers that they can trust in the future.

不過，關於這個問題我想說的是，嘿，這確實令人遺憾，但這確實是我們向客戶展示如何做的機會。我們的優勢在於我們反應速度快，我們真正與眾不同，並不是說我們沒有遇到這樣的困難，而是當我們遇到困難時，我們更善於與客戶合作解決這些問題。讓他們迅速感覺到，嘿，我們已經找到了一個很好的解決方案，我們是他們將來可以信賴的問題解決者。

Derek Podhaizer, Piper Sandler.

德里克波德海澤、派珀桑德勒。

Good morning guys. Maybe just wanted to talk about the guide. It's implied margins step down to around the 18% range. It's down from what we just did our 21%. Maybe can you run through the puts and takes of what's driving some of the margins step down and then how we could think about, shape of recovery getting back to that level that you guys just hit this quarter.

大家早安。也許只是想談談指南。這意味著利潤率將下降至 18% 左右。這比我們剛剛實現的 21% 有所下降。也許您能否分析一下導致利潤率下降的原因，然後我們可以考慮如何以復甦的形式回到本季剛剛達到的水平。

Yeah, absolutely, so we have a few things going on that are going to weighs in Q3 is compared to Q2. So, for some of those large deliveries on projects in the Middle East that we've referenced are going to come at slightly lower gross margins. So that'll have an unable impact on product mix.

是的，絕對如此，所以我們正在做的一些事情將對第三季和第二季產生影響。因此，對於我們提到的中東地區一些大型專案來說，毛利率將會略低。所以這將對產品組合產生無法產生的影響。

That'll be just kind of a temporary thing that that we don't expect to necessarily recur going forward, but that'll impact Q3 and then maybe accordingly we're making a big push on some key integration projects that will result in some cost and inefficiencies during Q3. Namely we're going to start to incur more meaningful costs related to facility consolidation as we close on the sale of that Eldridge campus in Q3 and begin to consolidate both the manufacturing and service operations out of that location into other Innovex facilities and it's not just Eldridge.

這只是一種暫時現象，我們預計這種情況在未來不一定會再次發生，但這會影響第三季度，因此，我們可能會大力推動一些關鍵的整合項目，這將導致第三季度出現一些成本和效率低下的情況。也就是說，隨著我們在第三季度完成埃爾德里奇園區的出售，我們將開始產生與設施整合相關的更有意義的成本，並開始將該地點的製造和服務業務整合到其他 Innovex 設施中，而不僅僅是埃爾德里奇。

We're also pushing to integrate facilities between Citadel and Innovex during Q3, given the overlap in US footprints, between the companies. And then I guess finally our last large ERP conversion is coming up as well as part of our project to bring the entire company onto the same system as soon as possible that'll again drive a few of the inefficiencies in Q3.

鑑於兩家公司在美國業務的重疊，我們還將在第三季推動整合 Citadel 和 Innovex 之間的設施。然後我想，我們最後一次大型 ERP 轉換即將到來，這也是我們專案的一部分，旨在盡快將整個公司納入同一系統，這將再次導致第三季的一些低效率。

So you know those integration initiatives are going to put some pressure on margin short term, but we really believe that they're important and necessary over the long run to be able to run our business as efficiently as possible and ultimately enable us to reach our long term margin target 25% or greater.

所以，您知道這些整合舉措將在短期內對利潤率造成一些壓力，但我們確實相信，從長遠來看，它們非常重要且必要，以便我們能夠盡可能高效地運營業務，並最終使我們能夠達到 25% 或更高的長期利潤率目標。

Got you. And then to get back to kind of the 20%, you think we can get there in 4Q and all this clears up or is that more of a first of next year target?

明白了。然後回到 20% 的目標，您認為我們可以在第四季度實現這個目標，然後一切都會明朗，還是這更像是明年年初的目標？

Yeah, I mean, I obviously we don't have Q4 guidance out there, but I would say we expect most of these integration costs to really be concentrated in Q3, and that's a chunk of what's driving it, and then, probably the rest will depend on that product mix, how that looks in Q4.

是的，我的意思是，顯然我們還沒有第四季度的指導，但我想說，我們預計大部分整合成本將集中在第三季度，這是推動其發展的一大因素，然後，其餘部分可能將取決於產品組合，以及第四季度的情況。

Got it. Helpful and then just for my follow up wanted to go back to the Citadel Trench Foot product line that you talked about you gave us some market share stat, 5% of optical wells that was interesting. You had a large operator on a trial that looks like a converted you're adding nine additional rates maybe could you help us understand a color around other trials that you're working on with large customers and could you. See another big tailwind like you just were able to capture just maybe somehow as far as further customer adoption.

知道了。很有幫助，然後只是為了我的後續問題，想回到您談到的 Citadel Trench Foot 產品線，您給了我們一些市場份額統計數據，5% 的光學井，這很有趣。您在一次試驗中有一個大型運營商，看起來像是轉換後的，您正在添加九個額外的費率，也許您能幫助我們了解您正在與大客戶合作進行的其他試驗的顏色，可以嗎？看看另一個巨大的順風，就像您剛才能夠捕捉到的一樣，也許只是以某種方式進一步推動客戶採用。

Yeah, I know that we, that's a really exciting product. I think the, a large part of why we, really attracted to the city and many different reasons the team, the technology portfolio is strengthening our one of our most important businesses that transport technology in particular has some real tailwinds behind it. We referenced that one big operator. We picked up nine additional rigs.

是的，我知道這確實是一款令人興奮的產品。我認為，我們真正被這座城市吸引的很大一部分原因是團隊和其他許多不同的原因，技術組合正在加強我們最重要的業務之一，特別是運輸技術，背後有一些真正的順風。我們提到了那家大型業者。我們又接收了九台鑽孔機。

There's more potential with that same customer both with TrenchFoot as well as with pulling through some other products, so I think that that customer more growth opportunity there that's the singular biggest one in the US land we're working with, but there's a couple other smaller operators, or large customers but smaller relative to those guys.

同一個客戶在 TrenchFoot 以及其他一些產品方面都具有更大的潛力，所以我認為該客戶擁有更多的成長機會，這是我們在美國合作的最大客戶，但還有其他一些規模較小的運營商或大客戶，但相對於這些客戶來說規模較小。

That we're we're kind of mid cycle on or midstream on getting qualifications done and then when you look internationally that that technology hasn't been, implemented techno internationally hardly at all and we think in the unconventional space that Canada, Argentina, Saudi, there's a big, there's the same value proposition in the US for that technology is present in those other markets but it's just because of for a whole bunch of reasons that hasn't been exploited yet so we're starting to make inroads there and in fact.

我們正處於獲得資格認證的中期或中游階段，然後當你放眼國際時，你會發現這項技術幾乎沒有在國際上得到實施，我們認為在加拿大、阿根廷、沙特等非常規領域，美國有同樣的價值主張，因為這項技術也存在於其他市場，但這只是因為一系列原因尚未被利用，所以我們開始在那裡取得進展，事實上。

We expect to do our first trial of the transcript technology in the Middle East by the end of this year, so really excited about continued potential of that technology adoption.= = -

我們預計今年底在中東地區首次試驗此轉錄技術，因此我們對該技術持續應用的潛力感到非常興奮。= -

Don Crist, Johnson Rice.

唐克里斯特、約翰遜賴斯。

Good morning, guys hopefully y'all are doing well this morning. I wanted to start on-- I know Kendal you talked about this a little bit as you kind of walked around the world and the integration efforts but specifically in the in Vietnam and SCF like how long do you think it's going to take before we can ship some serious manufacturing over there and actually start saving some money around the world as you know lower cost construction of those parts and pieces come out of Vietnam versus, parts in the world.

早安，大家希望你們今天早上一切都好。我想開始——我知道肯德爾，你談到了這一點，你走遍了世界各地，談到了整合工作，但特別是在越南和 SCF，你認為我們需要多長時間才能將一些重要的製造產品運到那裡，並真正開始在世界各地節省一些錢，因為你知道，與世界各地的零件相比，來自越南的這些零件和部件的製造成本更低。

Yeah, no, it's a good question. So, for anybody who might not be familiar, we closed on the acquisition of a company called SCF, back in February that is a machine shop in Vietnam that Innovex had partnered with for a couple of years and really vetted well as a high quality low cost provider of manufactured products exclusively for Innovex, so we have a lot of confidence in our ability to get good products at a very low cost out of that.

是的，不，這是個好問題。因此，對於那些可能不熟悉的人來說，我們在二月份完成了對一家名為 SCF 的公司進行收購，這是一家位於越南的機械車間，Innovex 已經與該公司合作了幾年，並且確實被審查為一家高品質低成本的 Innovex 專用製造產品供應商，因此我們對以極低的成本獲得優質產品的能力充滿信心。

That I would say we haven't really ramped up what we're doing over there since the acquisition closed partially as we're working through strategy around manufacturing validation globally and where everything fits and partially because of a lot of the uncertainty due to tariffs and just you know understanding how we're going to utilize that facility best whether it's to serve US market or service the eastern hemisphere market without crossing US borders due to tariff issues so. I would still thinking through that a little bit, but probably, should start to see some progress during 2026 on ramping up those volumes and getting some cost margin benefits there.

我想說的是，自從收購結束以來，我們並沒有真正加大在那裡的力度，部分原因是我們正在製定全球製造驗證戰略，並確保一切都合適，部分原因是關稅帶來很多不確定性，而且你知道，我們只是了解如何最好地利用該設施，無論是服務美國市場還是服務東半球市場，而由於關稅問題，我們不跨越美國邊境。我仍會對此進行一些思考，但可能應該會在 2026 年開始看到一些進展，即提高產量並獲得一些成本利潤效益。

Okay and one on cross selling and bringing some products from you know either Canada or around the world into the US and vice versa but kind of where are we in.

好的，一個是交叉銷售，將一些產品從加拿大或世界各地帶入美國，反之亦然，但我們處於什麼位置。

Well heads and other kind of products that were big in other locales around the world and kind of cross selling them in US and I fully appreciate that you know in this environment it's not the best time to start pushing new products on some people but just where are we in that kind of.

井蓋和其他類型的產品在世界其他地方很受歡迎，並在美國進行交叉銷售，我完全理解，在這種環境下，現在不是向某些人推銷新產品的最佳時機，但我們正處於這種境地。

Yeah, that's been a really important initiative for us over the last 6-, 12-months really since the since the drill quick deal closed and. And as you reference we've got a really strong position in the Canadian wellhead market as a result of the drill quick merger so we have do a little bit of work outside of Canada with that technology probably the earliest success we've seen is in some. Some projects in North Africa.

是的，自從快速鑽井交易結束以來，這在過去的 6 到 12 個月裡對我們來說是一項非常重要的舉措。正如您所說，由於與 Drill Quick 的合併，我們在加拿大井口市場佔據了非常強勢的地位，因此我們在加拿大以外利用這項技術做了一些工作，這可能是我們所看到的最早的成功。北非的一些項目。

Interestingly we've had a little bit of success there I think there's a lot of opportunity in Latin America again a little bit of a depressed market but at the same time there's some opportunities with customers that we know well that can help. Kind of accelerate the adoption of some of that technology and then probably the big market is of course in US land we've gotten a little bit of work in US land it's pretty early days we have.

有趣的是，我們在那裡取得了一些成功，我認為拉丁美洲有很多機會，雖然市場有點低迷，但同時也有一些機會可以為我們提供幫助。加速某些技術的採用，然後可能最大的市場當然在美國，我們在美國已經做了一些工作，但還處於早期階段。

A little bit of ongoing work in North Dakota with Wellhead, but it's pretty deminimus today. We're going through a process right now of, say optimizing the process so it fits what our customers need for the lower [48], and we have some equipment we're just now getting ready to place an order to serve that market. We probably won't because of the kind of supply chain in that product. It probably won't hit the ground until late this year and then the 2026 before we can start to see. A little bit of discernible revenue traction there.

與 Wellhead 在北達科他州正在進行一些工作，但目前進展甚微。我們現在正在進行流程最佳化，以便滿足客戶對較低[48]的需求，我們現在正準備訂購一些設備來服務該市場。由於該產品的供應鏈類型，我們可能不會這樣做。它可能要到今年年底才能落地，然後要到 2026 年才能開始看到它。那裡有一點明顯的收入成長動力。

So that one is kind of the longest burn, of the, let's say land-based technology we've been really pleased with, kind of what we're seeing from the drilling enhancement guys the DWS team we got we got a really nice win with a larger, independent operator out in West Texas that we hadn't done a lot.

因此，這是我們真正滿意的陸基技術中耗時最長的技術，我們從鑽井增強人員 DWS 團隊那裡看到了這一點，我們與西德克薩斯州一家更大的獨立運營商取得了非常好的勝利，而我們之前並沒有做過太多這樣的合作。

Innovex hadn't done a lot of work for historically where they pulled through a lot of these cementing tools for those rigs. So that was a nice one to see. And then we're early days we have a couple of small wins from cross selling standpoint between Citadel and Innovex or the Legacy Citadel team I should say in Innovex, but I think there's more brew in there that we're excited about.

Innovex 歷史上並沒有做過很多工作，他們為這些鑽機拉了很多水泥固井工具。所以這是一件令人高興的事。然後，我們在早期階段從 Citadel 和 Innovex 或 Legacy Citadel 團隊之間的交叉銷售角度取得了一些小胜利，我應該說是 Innovex，但我認為還有更多讓我們興奮的東西。

Just one final one for me, Kendal's done a very good job and y'all have done a very good job on preserving cash and doing M&A for cash without going into the revolt at all. But now that Eldridge is getting ready to close, it looks like you're going to have a lot of cash on the balance sheet and I don't know what the M&A, pipeline looks like for y'all, but is it safe to say that you'll kind of carry more cash than you historically have on the balance sheet, or should we expect, a ramp up in share repurchases, as a use for that cash going forward just your thoughts around that.

對我來說，最後再說一句，肯德爾做得非常好，你們在保留現金和進行併購以換取現金方面也做得非常好，根本沒有捲入叛亂。但現在 Eldridge 準備關閉，看起來你們的資產負債表上會有很多現金，我不知道你們的併購管道是什麼樣的，但是可以肯定地說，你們的資產負債表上會比歷史上更多的現金，或者我們應該預期，股票回購會增加，作為未來現金的用途，您對此有什麼看法？

Yeah, I think it's a really good question and it's one we kind of evaluate day to day we do maintain a very active M&A pipeline that we're excited about and to the extent we can deploy meaningful capital into good accreted deals that strengthen our company and make us better. I think that's the certainly the preference, so we like to continue to do that, but understand that yeah holding on to a large cash balance is.

是的，我認為這是一個非常好的問題，我們每天都會進行評估，我們確實保持著非常活躍的併購管道，我們對此感到興奮，並且我們可以將有意義的資本部署到良好的累積交易中，從而增強我們的公司實力並使我們變得更好。我認為這當然是我們的偏好，所以我們願意繼續這樣做，但要明白，持有大量現金餘額是必要的。

Inefficient and that's part of we like having the share repurchase program out there it gives us an alternative use of that capital to be able to return that to shareholders, so I think we want to stay very flexible on that. But you know certainly our vision is not to carry a huge cash balance in perpetuity, it's let's use that cash in a way that either makes our company better or can enhance the shareholders.

效率低下，這是我們喜歡股票回購計劃的一部分，它為我們提供了資本的另一種用途，以便能夠將其返還給股東，所以我認為我們希望在這方面保持靈活性。但您肯定知道，我們的願景不是永遠持有巨額現金餘額，而是讓我們以某種方式使用這些現金，使我們的公司變得更好或可以提高股東的利益。

Eddie Kim, Barclays.

巴克萊銀行的 Eddie Kim。

Hi, good morning. Just want to touch on the strong US land performance you held revenue flat quarter to quarter, despite a recount decline of 7%. I know you mentioned, performance in DWS that in one-month con is it out, but is there anything other than that drove that result or was it, really just a function of those two items?

嗨，早安。只想談談美國土地的強勁表現，儘管重新計票結果下降了 7%，但您的收入仍保持環比持平。我知道您提到過，DWS 的表現在一個月內就出來了，但除此之外還有什麼因素推動了這一結果嗎，或者它真的只是這兩個項目的功能？

No, I think that's the big pieces if you look at the, let's call like the legacy Innovex business, the drilling enhancement stuff from DWS that was flat to down a Smid, the drilling enhancement business was pretty flat. Most of that I think is we do get the benefit that we're much more or to number of wells drilled complexity of those wells, so I think some of it is just as the rig count declines we're able to offset some of that because of how we're positioned and it's just the blocking the good work that our folks do in the field staying close to the customers.

不，我認為，如果你看一下，這就是主要部分，讓我們稱之為傳統的 Innovex 業務，從 DWS 的鑽井增強產品一直持平到 Smid，鑽井增強業務相當平穩。我認為，其中大部分是我們確實獲得了好處，因為我們鑽探的井數量更多，或者這些井的複雜性更高，所以我認為其中一部分原因是，隨著鑽機數量的減少，我們能夠抵消其中的一部分，因為我們的定位，這只是阻礙了我們的員工在現場與客戶保持密切聯繫所做的良好工作。

Our manufacturing guys, and our engineering folks taking care of, our folks in the field as well as the customer just that continue with wheel. To maintain and grow market share and it's, yeah, so we were very pleased with that performance in the quarter.

我們的製造人員、工程人員、現場人員以及客戶都在繼續使用車輪。是的，為了保持和擴大市場份額，我們對本季的表現非常滿意。

Got it. It's a quick, housekeeping. I don't know if you mentioned the con the revenue even the contribution from the Citadel acquisition in 2Q, I get that it was only one month, but just curious if you could, provide that.

知道了。這是一次快速的家事整理。我不知道您是否提到了第二季度 Citadel 收購的收入甚至貢獻，我知道這只是一個月，但我只是好奇您是否可以提供這些資訊。

Yeah, I think because we integrate it tightly same specific EBITDA contribution is hard, but you can think top line contribution as being around $5 million.

是的，我認為因為我們將其緊密整合，所以相同的特定 EBITDA 貢獻很難，但你可以認為頂線貢獻約為 500 萬美元。

Okay great and then last one if I can squeeze one in, I know you don't provide free cash flow guidance for the full year. I know you have the target to aim to convert 50% to 60% of even down to free cash flow, but based on how the first task is trending, it looks like you'll be, well above that mark.

好的，太好了，然後最後一個問題，如果我可以擠出時間的話，我知道您沒有提供全年的免費現金流指導。我知道您的目標是將 50% 到 60% 的資金轉化為自由現金流，但根據第一項任務的趨勢，看起來您會遠遠超過這個目標。

So, I mean just from a dollar perspective, you did, $76 million of free cash on the first is it reasonable to assume you'll be. Maybe at or above $125 million of free cash flow for the full year, any thoughts there would be.

所以，我的意思是，僅從美元的角度來看，你確實在第一筆交易中獲得了 7600 萬美元的自由現金，這是合理的假設嗎？全年自由現金流可能達到或超過 1.25 億美元，任何想法都是可以的。

Yeah, I mean, I don't know that we want to throw a specific number out there, but you're right, we have this goal of 50% to 60% of that EBITDA converting into free cash flow under we call normal business conditions but a relatively stable, revenue environment as things have slowed down a little bit, we do tend to convert, a higher percentage of EBITDA into cash as we unwind working capital.

是的，我的意思是，我不知道我們是否想給出一個具體的數字，但您說得對，我們的目標是在正常商業條件下將 50% 到 60% 的 EBITDA 轉化為自由現金流，但在相對穩定的收入環境下，隨著情況有所放緩，我們確實傾向於在釋放營運資本時將更高比例的現金。

So, I think that's a little bit of what you've seen going on in the first half. If we get back to revenue growth in the second half, I wouldn't expect that percentage to be quite so high, but still you can think about it is maybe that normalized 50% to 60% is still a good target for the full year.

所以，我認為這就是你在上半年看到的情況。如果我們在下半年恢復收入成長，我預計這一比例不會那麼高，但你仍然可以考慮，也許正常化的 50% 到 60% 仍然是全年的一個好目標。

Got it understood. Great, thank you. I'll turn it back.

明白了。太好了，謝謝。我會把它轉回去。

There are no further questions at this time. With that, I will turn the call back to our presenters for closing.

目前沒有其他問題。就這樣，我將把電話轉回給我們的主持人，結束本次會議。

Yeah, I think with that we appreciate everybody's time thank you to all of our employees for all the good work they do thank you to our shareholders to our customers for all the support we get so thank you very much.

是的，我想我們感謝大家的時間，感謝我們所有的員工所做的所有出色工作，感謝我們的股東，感謝我們的客戶給予我們的所有支持，非常感謝。

This concludes today's conference call. Thank you for participating. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。