NCS Multistage Holdings Inc (NCSM) 2023 Q3 法說會逐字稿

Good day and thank you for standing by, and welcome to the Q3 2023 NCS Multistage earnings conference call. (Operator Instructions) Please be advised that today's conference is being recorded. I would now like to introduce your host for today's call, Mike Morrison, CFO. Please go ahead.

美好的一天，感謝您的支持，歡迎參加 2023 年第三季 NCS Multistage 收益電話會議。 （操作員指示）請注意，今天的會議正在錄製中。現在我想介紹一下今天電話會議的主持人，財務長 Mike Morrison。請繼續。

Thank you, Justin, and thank you for joining the NCS Multistage third quarter 2023 conference call. Our call today will be led by our CEO, Ryan Hummer, and I will also provide comments. I want to remind listeners that some of today's comments include forward-looking statements such as comments regarding our future expectations for financial results and business operations.

謝謝 Justin，也謝謝您參加 NCS Multistage 2023 年第三季電話會議。今天的電話會議將由我們的執行長 Ryan Hummer 主持，我也將發表評論。我想提醒聽眾，今天的一些評論包含前瞻性陳述，例如有關我們對財務表現和業務運營的未來預期的評論。

These statements, including our financial guidance and expectations, are subject to many risks and uncertainties that could cause our actual results to differ materially from any expectations expressed herein, including our ongoing litigation matters, inflation, central bank actions to combat inflation, distress to the US regional banks, the Canadian wildfires, as well as the impact of the conflict in Ukraine and the Middle East on the global economy, oil and natural gas demand, and our company. Please refer to our most recent annual report on Form 10-K and our latest SEC filings for risk factors and cautions regarding forward-looking statements.

這些陳述，包括我們的財務指導和預期，受到許多風險和不確定性的影響，可能導致我們的實際結果與本文中表達的任何預期有重大差異，包括我們正在進行的訴訟事項、通貨膨脹、央行打擊通貨膨脹的行動、對美國地區銀行、加拿大山火以及烏克蘭和中東衝突對全球經濟、石油和天然氣需求以及我們公司的影響。請參閱我們最新的 10-K 表格年度報告以及我們最新向 SEC 提交的文件，以了解有關前瞻性陳述的風險因素和注意事項。

Our comments today and in our earnings release also include non-GAAP financial measures, including adjusted EBITDA, adjusted EBITDA margin, free cash flow, and net working capital. The underlying details and reconciliations of non-GAAP measures to the most comparable GAAP financial measures are included in our third quarter earnings release, which can be found on our website ncsmultistage.com. I'll now turn the call over to Ryan.

我們今天和收益報告中的評論還包括非公認會計準則財務指標，包括調整後的 EBITDA、調整後的 EBITDA 利潤率、自由現金流量和淨營運資本。非 GAAP 指標與最具可比性 GAAP 財務指標的基本細節和調整表包​​含在我們的第三季財報中，您可以在我們的網站 ncsmultistage.com 上找到該報告。我現在將電話轉給瑞安。

Thank you, Mike, and welcome to our investors, analysts, and employees joining our third quarter 2023 earnings conference call. Today's call will be structured a bit differently. I'll be framing my initial comments in alignment with the core strategies and guiding principles that embody our long-term corporate strategy, and then Mike will review our financial performance later in the call.

謝謝麥克，並歡迎我們的投資者、分析師和員工參加我們的 2023 年第三季財報電話會議。今天的電話會議的結構將略有不同。我將根據體現我們長期公司策略的核心策略和指導原則來製定我的初步評論，然後麥克將在稍後的電話會議中審查我們的財務表現。

This was a very productive quarter for us in terms of advancing our strategy and positioning NCS to deliver value to our stakeholders, including our shareholders. As a reminder, the vision for NCS is to be globally recognized as a trusted partner and bold innovator, enabling our customers' resource development strategies through technology-driven solutions and reliable expertise.

對我們來說，這是一個非常富有成果的季度，我們推進了我們的策略，並將 NCS 定位為我們的利害關係人（包括股東）創造價值。需要提醒的是，NCS 的願景是成為全球公認的值得信賴的合作夥伴和大膽的創新者，透過技術驅動的解決方案和可靠的專業知識來支持客戶的資源開發策略。

We have three core strategies that are supported by two guiding principles. I'll walk through each and discuss how certain accomplishments during the quarter will enable long-term value creation. The first core strategy is to build upon our leading market positions.

我們制定了三項核心策略，並得到兩項指導原則的支持。我將逐一介紹並討論本季的某些成就將如何實現長期價值創造。第一個核心策略是鞏固我們的領先市場地位。

Examples of this include the strength of the NCS business across our product lines in Canada and the track record that we've established for our Fracturing Systems product line worldwide. In Canada, early in the third quarter, we installed over 1,000 sliding sleeves on a four-well Montney pad with one of our customers. These wells were successfully completed in a highly efficient manner and have exhibited strong initial production rates according to third-party data.

這方面的例子包括我們在加拿大產品線中 NCS 業務的實力以及我們在全球壓裂系統產品線中建立的業績記錄。在加拿大，第三季初，我們與一位客戶在四井 Montney 墊上安裝了 1,000 多個滑動套管。根據第三方數據，這些井以高效的方式成功完井，並表現出強勁的初始產量。

At the beginning of the fourth quarter, we had another significant achievement with the same customer, placing over 23 million pounds of sand across a lateral that extends more than two miles. This well had 262 NCS sleeves installed and was completed in a single trip, further highlighting our operational efficiencies. This is only possible due to the quality of our sliding sleeves, the design of our robust service tools, and the expert support provided by our field service technicians.

在第四季初，我們與同一客戶取得了另一項重大成就，在延伸超過兩英里的支線上放置了超過 2300 萬磅的沙子。該井安裝了 262 個 NCS 套管，並在一次起下作業中完成，進一步凸顯了我們的作業效率。這一切的實現得益於我們的滑動套筒的品質、我們強大的服務工具的設計以及我們的現場服務技術人員提供的專家支援。

In addition, a customer who has helped us to expand the limits of our fracturing systems technology in wells in the Montney is now applying learnings from those operations to reimagine their well completions and the Ellerslie formation in the Mannville area. Drilling and completing two-mile laterals with approximately 150 sliding sleeves in an area that's historically been completed with 50 or fewer stages.

此外，幫助我們擴大 Montney 油井壓裂系統技術極限的客戶現在正在應用從這些作業中獲得的經驗來重新設想他們的完井和 Mannville 地區的 Ellerslie 地層。在過去僅用 50 個或更少階段完成的區域中，使用大約 150 個滑套鑽探並完成兩英里的支管。

We continue to have success in securing trials and supporting customers that are using plug-and-perf completions in Canada as well. We leveraged the testing capabilities of our global technology center in Calgary to confirm the reliability of our Purple Seal plugs to perform in casing with an internal coating designed to reduce downhole friction.

我們繼續在確保試驗安全和支援加拿大使用即插即用完井的客戶方面取得成功。我們利用位於卡加利的全球技術中心的測試能力來確認我們的紫色密封塞在具有旨在減少井下摩擦的內部塗層的套管中運行的可靠性。

Through product performance, local field and technical support, and local testing capabilities, we believe we are now a top two frac plug provider in Canada. We have an internal goal to secure the leading market share in frac plugs in Canada just as we have in sliding sleeves and tracer diagnostics.

透過產品性能、本地現場和技術支援以及本地測試能力，我們相信我們現在是加拿大排名前二的壓裂塞供應商。我們的內部目標是確保加拿大壓裂塞的領先市場份額，就像我們在滑動套管和示踪診斷方面的市場份額一樣。

Further emphasizing our strategy to build upon our leading market position in fracturing systems, I have an update on a multiyear project we have underway with a leading international oil company to develop a version of our technology for use in deepwater offshore applications.

我進一步強調了我們在壓裂系統領域建立領先市場地位的戰略，並介紹了我們與一家領先的國際石油公司正在進行的一個多年期項目的最新情況，該項目旨在開發我們的技術版本，用於深水海上應用。

During August, we participated in [NA] tests spanning nearly two weeks, whereby our prototype sleeves and, more importantly, our service tool components were able to successfully survive the placement of over 6 million pounds of ceramic proppant, mimicking the conditions that we would expect to see during deepwater operations. Both we and our sponsor were pleased with the results of the testing.

8 月期間，我們參加了為期近兩週的[NA] 測試，我們的原型套筒以及更重要的是，我們的維修工具組件能夠成功地在放置超過600 萬磅的陶瓷支撐劑時倖存下來，模擬了我們將要使用的條件。預計在深水作業期間會看到。我們和我們的贊助商都對測試結果感到滿意。

In addition to this test, the sponsor has also ordered sleeves from us for use in an onshore trial well in the US for the fourth quarter of 2023, which is a precursor to a future trial well offshore which could be drilled in 2020. We're very excited about the prospect of taking our fracturing systems technology which has been proven in onshore and shallow water offshore environments into the deepwater offshore environment where we would operate from a floating rate.

除了這次測試之外，贊助商還向我們訂購了套管，用於 2023 年第四季度在美國的陸上試驗井，這是未來可能在 2020 年鑽探的海上試驗井的先兆。我們對將我們的壓裂系統技術（已在陸上和淺水近海環境中得到驗證）應用到深水近海環境中的前景感到非常興奮，我們將在深水近海環境中以浮動速率進行操作。

The second core strategy that I'll speak to is capitalizing on international and offshore opportunities. I'll start in the North Sea, where in September we successfully installed and began completion operations on a well for a leading E&P customer in Norway. The well had 10 stages and included two separate sleeve designs. We're very optimistic about the opportunity we have with this customer going forward.

我要談的第二個核心策略是利用國際和離岸機會。我將從北海開始，九月，我們為挪威一家領先的勘探與生產客戶成功安裝了一口井，並開始了完井作業。該井有 10 個階段，並包括兩個獨立的套筒設計。我們對未來與該客戶的合作機會感到非常樂觀。

In addition, we expect to be awarded fracturing systems work with three additional customers in the North Sea beginning in 2024, each of which has the potential to be a multi-well program. We're actively working to bring additional product lines into the North Sea to capitalize on the opportunities generated from success with our fracturing systems business.

此外，我們預計從 2024 年開始，將與北海的另外三個客戶進行壓裂系統合作，每個客戶都有可能成為多井專案。我們正在積極努力將更多產品線引入北海，以利用我們壓裂系統業務成功所帶來的機會。

In the Middle East, we completed our first revenue-generating tracer diagnostics project for a leading national oil company in the region. The well was completed in July and reports were provided to the customer in August. With the success on this first well, we are in discussions for two additional projects and we believe that this could become our largest market for tracer diagnostics outside of North America.

在中東，我們為該地區一家領先的國家石油公司完成了第一個創收示蹤劑診斷計畫。該井於 7 月完工，並於 8 月向客戶提供報告。隨著第一口井的成功，我們正在討論另外兩個項目，我們相信這可能成為我們在北美以外最大的示踪診斷市場。

Our final core strategy is to commercialize innovative solutions to complex customer challenges. This is a very successful and exciting quarter for us in that regard as well. Following extensive testing, we have qualified a new version of our AirLock casing buoyancy system that can be used in customer applications, applying high torque to the casing string enabled by semi-premium threads. This product is currently being run in the field.

我們的最終核心策略是將創新解決方案商業化，以應對複雜的客戶挑戰。在這方面，這對我們來說也是一個非常成功和令人興奮的季度。經過廣泛的測試，我們已經鑑定了新版本的 AirLock 套管浮力系統，該系統可用於客戶應用，透過半優質螺紋向套管柱施加高扭矩。該產品目前正在現場運行。

We've also worked to expand the performance envelope of our AirLock G casing buoyancy system to accommodate higher pressures than competing systems targeting up to 14,000 PSI, and higher temperatures, targeting up to 400 degrees Fahrenheit which would give us what we believe to be the highest performance casing buoyancy system utilizing a glass barrier available on the market today.

我們也致力於擴展AirLock G 套管浮力系統的性能範圍，以適應比競爭系統更高的壓力（目標高達14,000 PSI）和更高的溫度（目標高達400 華氏度），這將為我們帶來我們認為的採用當今市場上可用的玻璃屏障的最高性能套管浮力系統。

At Repeat Precision, we have several new products available for field trial. We've introduced a version of our Purple Seal frac plug with a feature known as a miss run contingency device. This feature integral to the plug can save the customer time and money in the event the perforating guns downhole did not fire and a new gun string needs to be deployed.

在 Repeat Precision，我們有多種新產品可供現場試用。我們推出了 Purple Seal 壓裂塞的一個版本，其具有稱為誤運轉應急裝置的功能。如果井下射孔槍沒有發射並且需要部署新的槍串，則該塞子的整合功能可以節省客戶的時間和金錢。

Repeat also has a dissolvable plug that we expect to be available for field trials during the fourth quarter. The design is optimized for downhole performance and has been pressure tested to 10,000 PSI. The introduction of a high-performance dissolvable plug complements our composite plug offering at Repeat, providing consistent performance and a single provider for wells for customers that want to run dissolvable plugs in the total of extended reach laterals.

Repeat 也推出了可溶解的塞子，我們預計在第四季進行現場試驗。該設計針對井下性能進行了最佳化，並經過 10,000 PSI 的壓力測試。高性能可溶性堵頭的推出補充了我們在 Repeat 的複合堵頭產品，為那些希望在整個大位移支管中運行可溶性堵頭的客戶提供一致的性能和單一的油井供應商。

Finally, Repeat Precision has developed an internally oriented perforating gun system that was recently released for field trials. This new system allows for precise phasing of the perforating charges. We believe this system will be unique in the market by offering customers the plug-and-play system benefits of our modular Purple Fire perforating guns which require minimal on-site assembly, unlike many of the other oriented systems in the market with precise internal orientation and the ability for the customer to specify the shape charge that they want to run.

最後，Repeat Precision 開發了一種內部定向射孔槍系統，最近發布用於現場試驗。這個新系統可以精確調整射孔彈的相位。我們相信，該系統將在市場上獨一無二，為客戶提供我們的模組化Purple Fire 射孔槍的即插即用系統優勢，與市場上許多其他具有精確內部定位的定向系統不同，該系統需要最少的現場組裝以及客戶指定他們想要運行的形狀裝藥的能力。

I'll now speak to the two guiding principles that underpin our long-term strategy. The first is to maximize financial flexibility. Our financial model continues to be validated as we've maintained a net cash position with an undrawn revolver and generated higher adjusted EBITDA and adjusted EBITDA margin for the first nine months of 2023 than during the same period in 2022.

我現在將談談支撐我們長期策略的兩項指導原則。首先是最大限度地提高財務靈活性。我們的財務模型繼續得到驗證，因為我們保持了未提取的左輪手槍的淨現金頭寸，並在 2023 年前 9 個月產生了比 2022 年同期更高的調整後 EBITDA 和調整後 EBITDA 利潤率。

During the quarter, NCS and our insurance carrier successfully settled one outstanding legal matter, and we've made significant progress towards concluding another. We continue to expect that both matters will be settled within our insurance coverage limits with the settlements paid in full by our insurance carrier. As part of the one finalized settlement, NCS collected $600,000 in unpaid invoices associated with unrelated wells that had previously -- been previously withheld by the plaintiffs.

本季度，NCS 和我們的保險公司成功解決了一項懸而未決的法律問題，並且我們在解決另一項法律問題方面取得了重大進展。我們仍然期望這兩件事將在我們的保險範圍內解決，並由我們的保險公司全額支付和解金。作為最終和解協議的一部分，NCS 收取了原告扣留的與不相關油井相關的 60 萬美元未付發票。

Our second guiding principle is to uphold the promise. The promise at NCS represents the commitments that we make as a company to our employees, customers, technology, vendors, quality, health, safety, the environment, and other stakeholders. Our company values are also embedded in the promise. In further support of upholding the promise, we released our inaugural ESG report in September, titled The Promise in Action.

我們的第二個指導原則是信守承諾。 NCS 的承諾代表了我們作為一家公司對員工、客戶、技術、供應商、品質、健康、安全、環境和其他利害關係人所做的承諾。我們公司的價值觀也體現在承諾中。為了進一步支持兌現這項承諾，我們在 9 月發布了首份 ESG 報告，題為「行動中的承諾」。

The report is available on our website, and I encourage you to read it. We're very pleased with how it came together and the Board and I appreciate the significant and broad-based contributions made by our employees as well as the valuable conversations that we've had with our customers, suppliers, consultants, and other stakeholders throughout the process.

該報告可在我們的網站上找到，我鼓勵您閱讀它。我們對它的形成感到非常滿意，董事會和我感謝我們的員工所做的重大和廣泛的貢獻，以及我們與客戶、供應商、顧問和其他利益相關者進行的寶貴對話。的過程。

You may have seen in our earnings release that we received an unfavorable ruling in the Federal Court of Canada in a patent infringement action. The decision resulted in certain of our patents being considered invalid and with NCS found to have infringed on another company's patent.

您可能在我們的財報中看到，我們在加拿大聯邦法院的專利侵權訴訟中收到了不利的裁決。該決定導致我們的某些專利被視為無效，並且 NCS 被認定侵犯了另一家公司的專利。

First, I want to be clear that we disagree with the decision and we were shocked by the results. We intend to appeal the decision and believe that applicable law supports strong grounds that may lead to a reversal of substantial portions of the decision. But more importantly, as it relates to our people and upholding the promise, I couldn't be more pleased with the way that the team at NCS responded to the news.

首先，我想澄清的是，我們不同意這個決定，我們對結果感到震驚。我們打算對該決定提出上訴，並相信適用的法律支持強有力的理由，可能會導致撤銷該決定的大部分內容。但更重要的是，因為這關係到我們的員工和兌現承諾，我對 NCS 團隊對此消息的反應方式感到非常滿意。

With a tremendous collective effort from our engineering, product line, manufacturing and supply chain, sales, technical services, and operations teams, we were able to quickly develop, test, and deploy a solution that complies with the decision in a manner that supported our customers' needs during the current time of high field activity levels. This is a testament to our outstanding people, the problem-solving spirit rooted in innovation and the collective character of the team that supported one another to rise and face this unexpected adversity. I'm proud to have the opportunity to lead this exceptional team.

透過我們的工程、產品線、製造和供應鏈、銷售、技術服務和營運團隊的巨大集體努力，我們能夠快速開發、測試和部署符合決策的解決方案，以支援我們的決策。當前現場活動頻繁期間的客戶需求。這證明了我們優秀的員工、植根於創新的解決問題的精神以及團隊的集體品格，他們相互支持，奮起面對這一意想不到的逆境。我很自豪有機會領導這個傑出的團隊。

In summary, I believe we've made very important and meaningful progress on our long-term strategic objectives over the past few months which has positioned us for success, not just in the upcoming quarter or two, but for the years ahead. I'll now pass the call back to Mike to discuss our results for the third quarter and guidance for the fourth quarter.

總而言之，我相信過去幾個月我們在長期戰略目標方面取得了非常重要且有意義的進展，這使我們不僅在未來一兩個季度而且在未來幾年取得成功。現在我將把電話轉給麥克，討論我們第三季的業績和第四季的指導。

Thank you, Ryan. As reported in yesterday's earnings release, our third quarter revenues were $38.3 million, a 22% decrease compared to last year's third quarter. Our Canada revenues decreased by 19%, US revenues were down 30%, and international revenues decreased by 18%. Our Canadian revenues were impacted by declining rig count during the quarter, resulting from commodity price volatility and the continuing effect of the Canadian wildfires.

謝謝你，瑞安。正如昨天的財報中所報導的，我們第三季的營收為 3,830 萬美元，比去年第三季下降了 22%。我們的加拿大收入下降了 19%，美國收入下降了 30%，國際收入下降了 18%。由於大宗商品價格波動和加拿大野火的持續影響，本季鑽機數量下降影響了我們在加拿大的收入。

Our sales in the US continued to be affected by lower natural gas prices which has had a negative impact on customer activity levels. On a sequential basis, revenues in the third quarter increased by 51%, with Canada up almost 100%, international up by 26%, and the US down by 15%. The increase in Canada was primarily related to normal seasonality associated with the spring break up in the second quarter with crews getting back to work in the third quarter.

我們在美國的銷售持續受到天然氣價格下跌的影響，這對客戶活動水準產生了負面影響。以環比計算，第三季營收成長了 51%，其中加拿大成長近 100%，國際成長 26%，美國下降 15%。加拿大的成長主要與第二季春假和第三季工作人員恢復工作相關的正常季節性有關。

Our gross profit, defined as total revenues less cost of sales, excluding depreciation and amortization expense, was $15.7 million in third quarter 2023, representing a gross profit percentage of 41%, just slightly below our gross profit percentage compared to one year ago. Despite declining revenues, we're able to maintain our gross profit percentage due to improved pricing of our products and services which countered the effect of the decline in volumes and higher operational costs.

2023 年第三季度，我們的毛利（定義為總收入減去銷售成本，不包括折舊和攤提費用）為 1,570 萬美元，毛利率為 41%，略低於一年前的毛利率。儘管收入下降，但由於我們的產品和服務定價提高，抵消了銷售下降和營運成本上升的影響，我們仍能夠維持毛利率。

Our revenues for the first nine months of 2023 were $107.2 million, a decline of 7% compared to the first nine months of 2022. However, our gross margin percentage improved to 40%, up from 38% compared to the same period one year ago.

我們 2023 年前 9 個月的營收為 1.072 億美元，比 2022 年前 9 個月下降 7%。不過，我們的毛利率從一年前同期的 38% 提高到 40% 。

Selling, general, and administrative costs were $12.7 million in the third quarter, down by $2.7 million compared to the third quarter of last year. The decrease was primarily due to lower annual incentive bonus accruals year-over-year and lowering of professional fees, partially offset by severance and stock-based compensation charges associated with the departure of an executive earlier in the third quarter.

第三季銷售、一般和管理成本為 1,270 萬美元，比去年第三季減少 270 萬美元。減少的主要原因是應計年度激勵獎金同比減少以及專業費用降低，部分被第三季度早些時候高管離職所產生的遣散費和股票補償費用所抵消。

For the third quarter, we reported net income of $4.4 million or an earnings per diluted share of $1.77. This was an improvement over the net income of $3.9 million and earnings per diluted share of $1.58 one year ago. Our adjusted EBITDA for the third quarter was $6.8 million or an adjusted EBITDA margin of 18%, an improvement over our adjusted EBITDA margin of 17% one year ago. For the first nine months of 2023, our adjusted EBITDA was $9.4 million, an improvement of $700,000 compared to the same period one year ago.

第三季度，我們報告淨利潤為 440 萬美元，攤薄後每股收益為 1.77 美元。這比一年前的淨利潤 390 萬美元和稀釋後每股收益 1.58 美元有所改善。我們第三季調整後 EBITDA 為 680 萬美元，調整後 EBITDA 利潤率為 18%，比一年前 17% 的調整後 EBITDA 利潤率有所提高。 2023 年前 9 個月，我們調整後的 EBITDA 為 940 萬美元，比一年前同期增加了 70 萬美元。

Turning now to cash flow items in the balance sheet. During the third quarter, our cash flow from operations and free cash flow or uses of cash of approximately $400,000 and $900,000 respectively. We expect to generate positive free cash flow in the fourth quarter and expect our full year free cash flow after JV distributions to be modestly positive for the full year of 2023.

現在轉向資產負債表中的現金流量項目。第三季度，我們的營運現金流量和自由現金流量或現金使用量分別約為 40 萬美元和 90 萬美元。我們預計第四季將產生正的自由現金流，並預計 2023 年全年合資企業分配後的全年自由現金流將適度為正。

On September 30, we had $11.4 million in cash and total debt of $8.3 million, which consisted entirely of finance lease obligations, resulting in a positive net cash position of $3.1 million. At the end of September, the borrowing base availability under our undrawn ABL facility was $19.7 million. Also during the third quarter, Repeat repaid all outstanding borrowings under their promissory note.

截至 9 月 30 日，我們擁有 1,140 萬美元現金和 830 萬美元總債務，其中全部由融資租賃債務組成，導致淨現金頭寸為 310 萬美元。截至 9 月底，我們未提取的 ABL 額度下的可用借款基礎為 1,970 萬美元。同樣在第三季度，Repeat 償還了期票下的所有未償還借款。

Now turning to a few points of guidance for the fourth quarter. We currently expect fourth quarter revenues of $37 million to $41 million about the same level of revenue sequentially and as compared to the fourth quarter of last year, bringing our full year revenues between $144 million to $148 million. We expect US revenues in $9 million to $10 million, international revenue of $2 million to $3 million, and Canadian revenues of $26 million to $28 million.

現在轉向第四季的幾點指引。我們目前預計第四季的營收為 3,700 萬美元至 4,100 萬美元，與去年第四季的營收水準大致相同，使我們的全年營收在 1.44 億美元至 1.48 億美元之間。我們預計美國收入為 900 萬至 1,000 萬美元，國際收入為 200 萬至 300 萬美元，加拿大收入為 2,600 萬至 2,800 萬美元。

This represents a sequential increase in both the US and international. We expect our Canadian revenues to be equal to or slightly declined sequentially attributable to the typical holiday slowdown starting in mid-December. We expect our gross margin percentage to be between 40% and 42% consistent with our gross margin percentage this quarter into the fourth quarter of 2022.

這代表美國和國際的連續成長。我們預計，由於 12 月中旬開始的典型假期放緩，我們在加拿大的收入將與上一季持平或略有下降。我們預計我們的毛利率將在 40% 至 42% 之間，與本季到 2022 年第四季的毛利率一致。

We expect our adjusted EBITDA to be between $4 million and $6 million bringing our full year expected adjusted EBITDA to a range of $13.5 million to $15.5 million. We expect our fourth quarter depreciation and amortization expense to be approximately $1.1 million. With that, I'll hand it back over to Ryan.

我們預計調整後 EBITDA 將在 400 萬至 600 萬美元之間，從而使全年預期調整後 EBITDA 達到 1,350 萬至 1,550 萬美元。我們預計第四季的折舊和攤提費用約為 110 萬美元。這樣，我會把它交還給瑞安。

All right. Thanks, Mike. So before Q&A, I'll close with a couple of brief comments. While the third quarter proved to be more challenging than expected commercially, we made significant progress during the quarter in alignment with our core strategies, especially on initiatives that we believe will enable us to execute on company-specific growth opportunities as our technology is commercialized and deployed in North American and international markets.

好的。謝謝，麥克。因此，在問答之前，我將以一些簡短的評論作為結束。雖然第三季在商業上比預期更具挑戰性，但我們在本季根據我們的核心策略取得了重大進展，特別是在我們相信隨著我們的技術商業化和實現公司特定成長機會的舉措方面。佈局北美和國際市場。

Despite some challenging rig activity trends in 2023, we continue to believe that we are in a multiyear cycle of improved growth and earnings prospects for our industry globally. We appear to have reached the bottom of this recent correction with the rig count in the US holding steady over the last several weeks.

儘管 2023 年的鑽機活動趨勢存在一些挑戰性，但我們仍然相信，我們產業正處於全球成長和獲利前景改善的多年周期中。我們似乎已經觸底了最近的調整，美國的鑽機數量在過去幾週保持穩定。

We expect modest growth in rig activity in the US in the fourth quarter with the potential for further growth from that base in 2024, reflecting recent crude oil price increases and the need to add natural gas supply for demand coming from LNG facilities expected to come online late next year and into 2025.

我們預計第四季度美國鑽機活動將小幅增長，並有可能在 2024 年在此基礎上進一步增長，反映出近期原油價格上漲以及需要增加天然氣供應以滿足預計上線的液化天然氣設施的需求明年底至2025 年。

Similarly, in Canada, we believe industry activity will be supported in 2024 and beyond as the TMX oil pipeline expansion is brought online and as natural gas production ramps into the commissioning of the Coastal GasLink pipeline and Canada LNG facility. Through our continuous improvement efforts, we're finding ways to be more efficient, which supports our gross margin percentage, moderates our SG&A spend, and positions us for strong incremental profitability as we grow our revenues.

同樣，在加拿大，我們認為隨著 TMX 石油管道擴建的上線以及天然氣產量的增加以及 Coastal GasLink 管道和加拿大液化天然氣設施的調試，2024 年及以後的行業活動將得到支持。透過不斷的改進努力，我們正在尋找提高效率的方法，這支持了我們的毛利率，調節了我們的銷售、一般行政費用，並使我們在收入成長時能夠獲得強勁的增量獲利能力。

Finally, I'll reiterate how much I appreciate the way that our people have, once again, proven how they can rise to the occasion in the face of uncertainty and challenges. And with that, we'll welcome any questions.

最後，我要重申，我非常欣賞我們的員工再次證明他們能夠在面對不確定性和挑戰時應對自如。因此，我們歡迎任何問題。

(Operator Instructions) John Daniel, Daniel Energy Partners.

（操作員說明）John Daniel，Daniel Energy Partners。

Thank you. Hey, Ryan, good morning.

謝謝。嘿，瑞安，早安。

Hey, morning, John.

嘿，早上好，約翰。

So I'm going to ask a little bit of a rookie question here. But the thing that really intrigued me was your commentary on the product development for deepwater. Could you just take a step back and tell us the evolution of how you got into deepwater?

所以我要在這裡問一個菜鳥問題。但真正讓我感興趣的是您對深水產品開發的評論。您能否退後一步，告訴我們您是如何進入深水領域的？

So maybe you might not want to quantify, but I'm trying -- like what it represents today and what this -- the new technology could mean call it three to five years from now, if we find ourselves in the long duration cycle, which a lot of talking heads are prophesying right now?

所以也許你不想量化，但我正在嘗試——就像它今天代表的是什麼——新技術可能意味著從現在起三到五年後稱之為它，如果我們發現自己處於長期週期中，現在有哪些大人物在預言？

Yeah, just so. I'll tackle that at a pretty high level and try to respond to it as much as I can. Certainly, we -- with our technology, we started about several years ago moving into shallow water offshore. We had some work with Maersk, which is now -- those properties are now owned by Total several years ago. Developed a relationship with Aker BP in the Norwegian side of the North Sea and have continued to develop that portfolio.

是的，就是這樣。我會在相當高的水平上解決這個問題，並盡力做出回應。當然，我們——憑藉我們的技術，大約幾年前我們開始進入近海淺水區。我們與馬士基有過一些合作，現在這些資產幾年前就歸道達爾所有了。與北海挪威一側的 Aker BP 建立了合作關係，並繼續開發該產品組合。

I think as part of that, certainly, we were able to garner some attention for the capabilities of our systems in those sorts of offshore environments, including some designs that we are looking at that will really take a frac sleeve from something to just place profit into the well or to our [shipwreck closed] technology to something that can be truly a life of well production solution, including, if you will, solids control capabilities within that same sort of frac systems chassis. And we have one customer, an international oil company, who had a vision for potentially taking our technology and using it.

我認為，當然，作為其中的一部分，我們能夠為我們的系統在此類海上環境中的功能引起一些關注，包括我們正在考慮的一些設計，這些設計將真正從某些東西中獲取壓裂套筒以獲取利潤進入油井或我們的[沉船關閉]技術可以成為真正的油井生產解決方案的生命週期，如果您願意的話，包括同類壓裂系統底盤內的固體控制功能。我們有一個客戶，一個國際石油公司，他有一個可能採用我們的技術並使用它的願景。

I'd say the initial application is targeted actually for -- you've heard a few operators in the deepwater Gulf of Mexico talking about the Paleogene now. So a target that's a little bit deeper than traditional targets and where our system could potentially be used as the lower completion system given our single trip capability. What we're able to do with the service tool, which is able to actuate many more stages in a single run than typical offshore multi-zone single trip type systems that are out there.

我想說，最初的應用實際上是針對的——你現在已經聽到墨西哥灣深水區的一些運營商談論古近紀了。因此，這個目標比傳統目標更深一些，考慮到我們的單次行程能力，我們的系統有可能用作較低的完井系統。我們能夠使用該服務工具做什麼，與現有的典型海上多區域單行程類型系統相比，該工具能夠在單次運行中驅動更多的階段。

That's kind of the opportunity that our customer is chasing. Now the challenge for us is -- we're moving from deploying our service tool off of either land or a fixed platform to a moving rig, right? So it's a pretty significant challenge, and it's been a multiyear development. But obviously, we had the test earlier this year, which proved out the robustness of the sleeves and the serviceable components that's migrating towards a land trial this year with the potential for sales next year.

這就是我們的客戶正在追逐的機會。現在我們面臨的挑戰是——我們正在從在陸地或固定平台上部署我們的服務工具轉向移動鑽機，對嗎？所以這是一個相當重大的挑戰，而且是一個多年的發展過程。但顯然，我們今年早些時候進行了測試，證明了套筒和可維修部件的堅固性，今年將進行陸地試驗，並有明年銷售的潛力。

So yes, I think it would be -- to the point where there could be a multi-well opportunity on an annual basis a few years down the road. And (technical difficulty) say is that this customer has other partners on those wells who are targeting some of the same applications.

所以是的，我認為未來幾年可能每年都會出現多井機會。 （技術困難）是，該客戶在這些井上還有其他合作夥伴，他們的目標是一些相同的應用。

But anything in deepwater takes a little bit longer to develop and test and get out there. So we're excited about the technology development. I think it will be a really good opportunity for us. But I think we just need to be a little bit patient with it as well.

但深水中的任何東西都需要更長的時間來開發、測試並到達那裡。所以我們對科技的發展感到興奮。我認為這對我們來說將是一個非常好的機會。但我認為我們也需要對此有一點耐心。

Fair enough. But assuming that does materialize over time, is it safe to assume that -- like a new technology like this, if adopted and has some scale with you, is a margin enhancing product relative to the core offering or no?

很公平。但假設隨著時間的推移，這種情況確實會實現，那麼是否可以安全地假設——像這樣的新技術，如果被採用並與您形成一定規模，相對於核心產品是否是一種提高利潤的產品？

Yeah, absolutely, John.

是的，絕對是，約翰。

Okay, all right. That's all I got. Sounds very interesting. Thank you for including me.

好吧，好吧。這就是我得到的。聽起來很有趣。謝謝你把我包括在內。

Yeah, absolutely. Thanks.

是的，絕對是。謝謝。

Dave Stone, Stonegate.

戴夫·斯通，石門。

Good morning.

早安.

Morning, Dave. So just great to see you. EBITDA has remained a strong -- despite the little tick-down in revenues here. It looks like you're doing more with less. Can you talk us through what's driving that? And if any of the stuff that you've implemented to be able to maintain those strong margins are sticky going forward?

早上好，戴夫。很高興見到你。儘管這裡的收入略有下降，但 EBITDA 仍然強勁。看起來您事半功倍。您能告訴我們是什麼推動了這個趨勢嗎？您為維持強勁利潤而實施的任何措施是否在未來具有黏性？

Yeah, absolutely, Dave. I'll start on this and I'll let Mike chime in with anything that I miss. But I will say that the team across the board is dedicated to continuous improvement. In our second quarter, I think we noted some facility rationalizations that we had made, both with manufacturing in Mexico and then across our tracer diagnostics business. Those are certainly sticky.

是的，絕對是，戴夫。我會從這個開始，我會讓麥克補充我錯過的任何事情。但我要說的是，整個團隊都致力於持續改善。在第二季度，我認為我們注意到我們所做的一些設施合理化，包括墨西哥的製造以及我們的示踪診斷業務。這些肯定是黏性的。

And then the supply chain team that we have -- part of a recent reorganization we had was putting our supply chain organization together with our technical services organization, and that started to bear fruit very quickly as well, where the combination of our supply chain is always thinking of ways to value engineer cost out of the way that we do business together with the tech services team who can interact with engineering and think about getting things rapidly prototyped and through field trial.

然後，我們擁有的供應鏈團隊 - 我們最近重組的一部分是將我們的供應鏈組織與我們的技術服務組織結合在一起，這也開始很快取得成果，我們的供應鏈的組合是我們始終在與技術服務團隊合作開展業務時考慮如何評估工程師成本，技術服務團隊可以與工程部門互動，並考慮快速製作原型並通過現場試驗。

Yeah, I think that's something where we're going to continue to chase ways to operate more efficiently and preserve and grow gross margin dollars. There are some other changes that we've made across the organization to try to structure things to run a little bit more efficiently and a little bit more lean that really impact the SG&A side and help us to preserve the ability to achieve an adjusted EBITDA.

是的，我認為我們將繼續尋求更有效運作並維持和增加毛利率的方法。我們在整個組織中也進行了一些其他改變，試圖建立更有效率、更精簡的架構，這些改變真正影響了 SG&A 方面，並幫助我們保持實現調整後 EBITDA 的能力。

This year through the first nine months, that's consistent. A little bit better than last year despite the fact that revenue's off. So we're working with the current market environment where the US rig count dropped maybe a little bit later than we thought it would, where the Canadian activity didn't come out of breakup quite as strong as we had thought it would.

今年前九個月，情況一直是如此。儘管收入減少，但比去年好一點。因此，我們正在應對當前的市場環境，美國鑽機數量的下降可能比我們想像的要晚一點，加拿大的活動並沒有像我們想像的那麼強勁。

But we've been able to make sure that we continue to manage and measure costs in a way that we can preserve as much profitability as possible. And we do think that is sticky to use your phrase, so that when we do pivot back to revenue growth that will help us with strong incremental margins and help to grow the average margin as we as we grow the top line.

但我們已經能夠確保我們繼續以能夠保留盡可能多的盈利能力的方式管理和衡量成本。我們確實認為使用您的短語是很困難的，因此當我們確實轉向收入成長時，這將有助於我們實現強勁的增量利潤，並有助於隨著我們增加收入而增加平均利潤。

Yeah, this is Mike. Great question. Nothing more really further to add other than just SG&A, Ryan had hit upon that. But just continuing to focus on not growing that, how do we leverage it, and how do we strategically reduce that where it makes sense. So that's a long-term effort and we're seeing those benefits.

是的，這是麥克。很好的問題。 Ryan 突然想到，除了 SG&A 之外，沒有什麼可進一步補充的了。但只要繼續專注於不成長它，我們如何利用它，以及我們如何在有意義的地方策略性地減少它。所以這是一項長期的努力，我們已經看到了這些好處。

That's incredibly helpful. Thank you. And one more, if I could. You continue to get gain traction in the Middle East. You continue to get a foothold there. Can you talk about the bidding environment there, may be in comparison to the Canadian market where you're one of the top players already?

這非常有幫助。謝謝。如果可以的話，再來一張。您在中東持續獲得關注。你繼續在那裡立足。您能談談那裡的投標環境嗎？與加拿大市場相比，您已經是頂級參與者之一？

Sure, Dave. So for the Middle East, each country is a little bit different where we've been focused over the last few years. You've seen some of our commentary in our annual report. We've got a long term contract in Oman for some tracer diagnostics work. We're looking to leverage that to be able to deploy some additional product lines beyond tracers through that contract.

當然，戴夫。因此，對於中東來說，過去幾年我們重點關注的每個國家都略有不同。您已經在我們的年度報告中看到了我們的一些評論。我們在阿曼簽訂了一些示蹤診斷工作的長期合約。我們希望利用這一點，透過該合約部署追蹤器以外的一些其他產品線。

But where we really made headway in the last year or so is with Saudi Aramco, and that is a long process to get qualified and what you call cataloged there. And typically it involves -- you provide some equipment and essentially for free in a free trial. Once the equipment works and proves out the value proposition for the customer, then you're invited to be part of a cataloging process where the various asset owners in the region can utilize your equipment. You're effectively a qualified supplier.

但去年左右我們真正取得進展的是沙烏地阿美公司，這是一個漫長的過程，要獲得資格並在那裡進行編目。通常它涉及 - 您提供一些設備，並且在免費試用中基本上是免費的。一旦設備正常工作並證明了對客戶的價值主張，您就會被邀請參與編目過程，該地區的各種資產所有者都可以使用您的設備。您實際上是合格的供應商。

And then in time, you may be selected to participate in multiyear tenders. And we're in that middle phase where we have multiple product lines that are cataloged and can be called off by the asset owners at Aramco and that's for our tracer diagnostics business and for a couple of product lines within well construction.

然後及時，您可能會被選中參加多年期招標。我們正處於中間階段，我們擁有多條產品線，這些產品線已被編目，可以被阿美公司的資產所有者取消，這適用於我們的示踪診斷業務和油井建設中的幾條產品線。

And we continue to work every day to grow that relationship and become part of -- or have the opportunity to participate in some of the multi-well tenders where you're really specked in. But for now, we're happy with the progress we've made and the opportunity that we have. We can participate in revenue-generating projects right now and look to grow the business, and look for those longer-term opportunities as they present themselves.

我們每天都會繼續努力發展這種關係，並成為您真正感興趣的一些多井招標的一部分，或者有機會參與其中。但就目前而言，我們對進展感到滿意我們已經創造了以及我們擁有的機會。我們現在可以參與創收項目，尋求業務成長，並尋找那些出現的長期機會。

That's very helpful. Thank you for taking my questions and good luck in the fourth quarter.

這非常有幫助。感謝您回答我的問題，祝第四季好運。

All right, thank you, Dave.

好的，謝謝你，戴夫。

(Operator Instructions) And I'm showing no further questions. I would now like to turn the call back over to Ryan Hummer for closing remarks.

（操作員說明）我沒有再提出任何問題。我現在想將電話轉回瑞安·哈默 (Ryan Hummer) 進行總結演講。

All right. Thank you, Justin. Look, on behalf of our management team and our Board, we'd like to thank everyone who joined the call today, including our shareholders, analysts, and especially our employees. I truly appreciate the depth and breadth of the expertise of our people at NCS and Repeat Precision, and the passion and the effort that these people bring to their work. And I look forward to talking to everyone, I guess, early next year.

好的。謝謝你，賈斯汀。看，我們謹代表我們的管理團隊和董事會，感謝今天參加電話會議的所有人，包括我們的股東、分析師，尤其是我們的員工。我衷心感謝 NCS 和 Repeat Precision 員工的專業知識的深度和廣度，以及他們為工作所付出的熱情和努力。我想，我期待明年初與大家交談。

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

謝謝你。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。