NCS Multistage Holdings Inc (NCSM) 2023 Q4 法說會逐字稿

Good day, and thank you for standing by. Welcome to the NCS Multistage Fourth Quarter 2023 Conference Call. (Operator instructions) Please be advised that today's conference is being recorded.

美好的一天，感謝您的支持。歡迎參加 NCS 2023 年第四季多階段電話會議。（操作員說明）請注意，今天的會議正在錄製中。

I would now like to hand the conference over to your first speaker today, Mike Morrison, Chief Financial officer. You may begin.

現在我想將會議交給今天的第一位發言人，財務長麥克莫里森。你可以開始了。

Good morning. This is Mike Morris and sorry for the delay. Thank you for joining the NCS Multistage fourth quarter and full year 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 our financial guidance, comments regarding our future expectations for financial results and business operations.

早安.我是麥克莫里斯（Mike Morris），很抱歉耽誤了您的時間。感謝您參加 NCS Multistage 第四季和 2023 年全年電話會議。我們今天的電話會議將由我們的執行長 Ryan Hummer 主持，我還將發表評論。我想提醒聽眾，今天的一些評論包括前瞻性陳述，例如我們的財務指引、有關我們未來財務業績預期的評論以及商業運作。

These statements are subject to many risks and uncertainties that could cause our actual results to differ materially from any expectation expressed herein. 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.

這些陳述面臨許多風險和不確定性，可能導致我們的實際結果與此處表達的任何預期有重大差異。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 as well as our results of operations included in our earnings release contain the following non-GAAP financial measures, including adjusted EBITDA, adjusted EBITDA margin, adjusted gross profit margin, adjusted net loss, adjusted loss per share, free cash flow and free cash flow less distributions to non-controlling interest.

我們今天的評論以及收益報告中包含的經營業績包含以下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、調整後的毛利率、調整後的淨虧損、調整後的每股虧損、自由現金流和自由現金流減去非控制權益的分配。

The underlying details and reconciliations of these non-GAAP measures to the most comparable GAAP financial measures are provided in our fourth quarter and full year earnings release, which can be found on our website, ncsmultistage.com.

我們的第四季和全年財報發布中提供了這些非 GAAP 衡量標準與最具可比性 GAAP 財務衡量標準的基本細節和調整表，您可以在我們的網站 ncsmultistage.com 上找到該報告。

I'll now turn the call over to Ryan.

我現在將電話轉給瑞安。

Thank you, Mike, and welcome to our investors, analysts and employees joining our fourth quarter and full year 2023 earnings conference call. I'll review our performance in 2023 and how our efforts and accomplishments throughout 2023 have positioned us for company-specific growth opportunities in 2024. I'll also outline our strategic objectives for this year. Mike will follow and cover the financial results for the quarter.

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 年第四季和全年收益電話會議。我將回顧我們 2023 年的業績，以及我們在 2023 年全年的努力和成就如何為我們在 2024 年抓住公司特定的成長機會。我還將概述我們今年的戰略目標。麥克將關注並報告本季的財務表現。

2023 turned out to be much more challenging than we had anticipated at this time last year for our industry and for NCS. Activity in the US declined throughout the year with the anticipated bottoming of the rig count slipping further as the year progress. In Canada, while activity started strong in the first quarter of 2023, we observed a similar trend of declining year-over-year activity in the second half of last year.

對於我們的產業和 NCS 來說，2023 年比我們去年這個時候預期的更具挑戰性。美國的活動全年有所下降，預計鑽機數量將隨著今年的進展而進一步下滑。在加拿大，雖然活動在 2023 年第一季開始強勁，但我們在去年下半年觀察到了類似的年比活動下降趨勢。

The decline in activity levels and the resulting impact on the competitive environment limited our pricing power, resulting in a year-over-year decline in revenue of 8% in 2023, with revenue declines for each of our US, Canada and international operations.

活動水準的下降及其對競爭環境的影響限制了我們的定價能力，導致 2023 年收入年減 8%，其中我們美國、加拿大和國際業務的收入均出現下降。

In response to the changing market environment, we took meaningful action by consolidating certain operations districts in the US and manufacturing facilities in Mexico. We also reduced headcount and aligned our US and international operations teams under common leadership.

為了因應不斷變化的市場環境，我們採取了有意義的行動，整合了美國的某些營運區和墨西哥的製造工廠。我們還減少了員工人數，並在共同領導下調整了我們的美國和國際營運團隊。

These actions, along with the tireless work of our supply chain team and technical personnel in tracer diagnostics allowed us to maintain our adjusted gross margin at 39% in 2023, consistent with the prior year, despite the decline in revenue.

這些行動，加上我們的供應鏈團隊和示蹤診斷技術人員的不懈努力，使我們能夠在 2023 年將調整後的毛利率維持在 39%，與前一年一致，儘管收入有所下降。

We also proactively reduced our SG&A spend, resulting in a $1.8 million reduction in SG&A, SG&A expense in 2023 as compared to 2022. A meaningful reduction given the inflationary pressure on wages and the overall cost environment. We expect that our cost reduction actions will result in an annualized benefit of approximately $4 million of which we realized less than half during 2023 due to the timing of those actions.

我們也主動減少了 SG&A 支出，與 2022 年相比，2023 年 SG&A、SG&A 費用減少了 180 萬美元。考慮到工資的通膨壓力和整體成本環境，這是一個有意義的削減。我們預計，我們的成本削減行動將帶來約 400 萬美元的年化效益，由於這些行動的時間安排，我們在 2023 年實現的效益不到一半。

Adjusted EBITDA in 2023 was nearly $12 million compared to approximately $15 million in 2022. We improved our free cash flow performance by approximately $5 million in 2003 compared to -- 2023 compared to 2022. Specifically, we generated $2.6 million in free cash flow after distributions to our JV partner last year compared to negative free cash flow of $2.1 million in 2022.

2023 年調整後 EBITDA 接近 1,200 萬美元，而 2022 年約為 1,500 萬美元。與 2003 年相比，2023 年與 2022 年相比，我們的自由現金流績效提高了約 500 萬美元。具體來說，去年分配給合資夥伴後，我們產生了 260 萬美元的自由現金流，而 2022 年的自由現金流為負 210 萬美元。

For 2024, we anticipate a further decline in annual average activity industry levels in North America compared to 2023, with activity levels in the US projected to be lower by as much as 10%. We currently believe that activity levels in Canada are not likely to decline by the same magnitude, driven in part by both the TMX expansion and the LNG Canada projects nearing completion, which should support activity.

與 2023 年相比，我們預計 2024 年北美的年平均活動量將進一步下降，其中美國的活動水準預計將下降多達 10%。我們目前認為，加拿大的活動水平不太可能出現同樣幅度的下降，部分原因是 TMX 擴建和加拿大液化天然氣項目接近完工，這應該會支持活動。

This is tempered by possible water restrictions for producers in Canada during the summer months due to ongoing drought conditions and low current water levels. Despite these activity declines, we expect to grow our revenue in 2024 compared to 2023 as a result of the significant progress made in 2023 to expand our presence in new markets and to better align our product and service offering with certain customers, including large independents in the US and Canada, international oil companies and national oil companies.

由於持續乾旱和當前水位較低，加拿大生產商在夏季可能會受到用水限制，從而緩和了這種情況。儘管這些活動有所下降，但我們預計2024 年的收入將比2023 年有所增長，因為2023 年在擴大我們在新市場的業務以及更好地使我們的產品和服務與某些客戶（包括大型獨立客戶）在保持一致方面取得了重大進展。美國和加拿大、國際石油公司和國家石油公司。

I'lI highlight a few of these company-specific efforts and opportunities across our product and service lines. Beginning with fracturing systems. as previously discussed, we continue to expand our customer base in the North Sea. For 2024, we expect to install or provide service for at least five customers during the year, including our first sleeve installs for two of these customers.

我將重點介紹我們的產品和服務系列中公司特有的一些努力和機會。從壓裂系統開始。如前所述，我們繼續擴大在北海的客戶群。到 2024 年，我們預計年內將為至少 5 位客戶安裝或提供服務，其中包括為其中 2 位客戶進行首次套筒安裝。

In Canada, we recently successfully completed our first fracturing systems job for a targeted application in the oil sands as part of a SAGD development. This work extended from a long-standing customer relationship and their more conventional oil and gas operations. We expect to build on the success for this customer through additional high temperature applications and we'll look to replicate this success with other SAGD producers.

在加拿大，我們最近成功完成了第一個壓裂系統工作，作為 SAGD 開發的一部分，針對油砂進行有針對性的應用。這項工作源於長期的客戶關係及其更傳統的石油和天然氣業務。我們希望透過額外的高溫應用為該客戶取得成功，並希望與其他 SAGD 生產商複製這一成功。

In the US, we successfully completed an onshore trial well with a strategic partner, working to develop a system for use in deepwater environments, such as the Gulf of Mexico. This follows successful surface testing completed earlier in 2023. The lease for this trial well were installed in late 2023 with service activity occurring in early 2024. The successful trial, validate the new sleeve design and application for NCS, positioning us to participate in the technically demanding deepwater market.

在美國，我們與戰略合作夥伴成功完成了一個陸上試驗井，致力於開發一種用於墨西哥灣等深水環境的系統。此前，該公司於 2023 年初成功完成了表面測試。該試驗井的租賃於 2023 年底安裝，服務活動於 2024 年初進行。此次試驗的成功驗證了 NCS 的新套筒設計和應用，使我們能夠參與技術要求較高的深水市場。

In addition, we have a very interesting project planned for the US in the second quarter, whereby a customer plans to install over 200 sleeves in the well to evaluate enhanced recovery strategies for its asset base. This will be the most ever NCS leaves run in a well in the US and the most ever NCS 5.5-inch leaves running a well globally.

此外，我們計劃在第二季在美國開展一個非常有趣的項目，客戶計劃在油井中安裝 200 多個套管，以評估其資產基礎的強化採收策略。這將是美國有史以來在井中運行最多的 NCS 葉片，也是全球在井中運行最多的 NCS 5.5 英吋葉片。

Within well construction, we successfully expanded the operating envelope for our airlock casing buoyancy system. Building on the voice of the customer to enable operation at higher temperatures, higher pressures and also to accommodate the additional torque enabled by premium connections. In addition, we continue to add new size categories of these systems to meet the varied customer applications in the field.

在油井施工過程中，我們成功擴大了氣閘套管浮力系統的操作範圍。根據客戶的意見，實現在更高溫度、更高壓力下運行，並適應高級連接帶來的額外扭矩。此外，我們不斷增加這些系統的新尺寸類別，以滿足該領域不同的客戶應用。

We recently introduced our SlimStim re-fracs liner hanger system at a trade show near Houston. This new technology will enable high intensity re-fracs and previously under stimulated wells. This product was designed with significant customer input and provide certain contingencies and operational benefits that we believe are unique to our system. We expected to conduct field trials of this system over the next several months.

我們最近在休士頓附近的一次貿易展上推出了 SlimStim 重複壓裂襯管懸吊系統。這項新技術將能夠實現高強度重複壓裂以及先前受刺激的井。該產品的設計考慮了重要的客戶意見，並提供了我們認為是我們系統獨有的某些意外事件和營運優勢。我們預計在接下來的幾個月內對該系統進行現場試驗。

In tracer diagnostics, we expect 2024 to be a year of meaningful growth in international markets. We plan to enter two new markets this year, each of which required additional. Testing of our chemicals testing in one such region is complete, and we expect to complete testing and the other market during the first half of 2024.

在示踪診斷領域，我們預計 2024 年將是國際市場顯著成長的一年。我們計劃今年進入兩個新市場，每個市場都需要額外的投入。我們在其中一個地區的化學品測試已經完成，我們預計在 2024 年上半年完成其他市場的測試。

Perhaps most importantly, we expect a significant expansion of our tracer diagnostics business in the Middle East this year. We are finalizing the details of a multi-pad project which could position the Middle East to be our second largest tracer market this year, only behind the US.

也許最重要的是，我們預計今年我們在中東的示蹤診斷業務將大幅擴展。我們正在敲定一個多焊盤項目的細節，該項目可能使中東成為我們今年的第二大示踪劑市場，僅次於美國。

At Repeat Precision, we've had good successes as well. A well respected E&P company decided to run our fracture Express system with multiple Permian Basin frac crews after an extensive test of multiple composite plug providers. The test utilize several different diagnostic tools to evaluate key quote features such as how well the plug hole pressure during the frac job drill-out time and watch time. Our work with this customer began last December and is ramping up throughout the first quarter of 2024.

在 Repeat Precision，我們也取得了巨大的成功。在對多個複合材料塞供應商進行廣泛測試後，一家備受尊敬的勘探與生產公司決定與多個二疊紀盆地壓裂人員一起運行我們的壓裂 Express 系統。此測試利用多種不同的診斷工具來評估關鍵報價特徵，例如壓裂作業鑽出時間和觀察時間期間塞孔壓力的情況。我們與該客戶的合作始於去年 12 月，並將在 2024 年第一季逐步加強。

On the product development front received has had initial successful field trials of its pinpoint internally oriented perforating gun system, which is designed to control various oriented perforating patterns of practices becoming more prevalent across the E&P customer base in North America. The pinpoint system maintains the benefits of the purple fire perforating gun systems, which include preassembly in a manufacturing environment, ease of use in that field, reduced HSE risk and compatibility with a customer's preferred shaped charge.

在產品開發方面，我們已對其精確內定向射孔槍系統進行了初步成功的現場試驗，該系統旨在控制北美 E&P 客戶群中越來越普遍的各種定向射孔模式。Pinpoint 系統保留了紫火射孔槍系統的優點，包括在製造環境中預組裝、在該領域易於使用、降低 HSE 風險以及與客戶首選聚能射孔彈的兼容性。

I'll provide a quick update on a few legal matters now. Regarding the previous previously disclosed legal matter in Texas in December 2023, NCS, the plaintiffs in our insurance carrier, recent settlement for the insurance carrier agreed to pay the settlement amounts to the plaintiffs, resulting in no cash payments by NCS. Consequently, we reversed our previously reported litigation provision of $40.8 million during the fourth quarter of 2023.

我現在將提供一些法律問題的快速更新。關於先前揭露的2023年12月德州法律事項，我們保險公司的原告NCS，近期和解保險公司同意向原告支付和解金額，導致NCS沒有支付現金。因此，我們在 2023 年第四季沖銷了先前報告的 4,080 萬美元的訴訟準備金。

As for the previously disclosed patent infringement case in Canada, the parties attended a mediation meeting in late February 2024. While no agreement has been reached, both parties have expressed interest in continuing with settlement discussions. However, if the settlement cannot be reached, we believe that applicable law supports strong grounds for appeal on the decision. However, the litigation process could continue on for several years.

至於先前揭露的加拿大專利侵權案，雙方於2024年2月下旬參加了調解會議。雖然尚未達成協議，但雙方均表示有興趣繼續進行和解討論。然而，如果無法達成和解，我們認為適用的法律支持對該決定提出上訴的充分理由。然而，訴訟過程可能會持續數年。

Finally, our goals for 2024 are straightforward and are aligned with the long-term strategy that I discussed at length in last quarter's call. In 2024, we aim to grow revenue in a flat or declining market and improve our adjusted EBITDA margin, all while generating free cash flow. We aim to obtain field trials for our new offerings and successfully enter new markets.

最後，我們 2024 年的目標很簡單，並且與我在上季電話會議中詳細討論的長期策略保持一致。2024 年，我們的目標是在平穩或下滑的市場中增加收入，並提高調整後的 EBITDA 利潤率，同時產生自由現金流。我們的目標是讓我們的新產品獲得現場試驗並成功進入新市場。

We'll continuously improve our employee engagement and ensure workplace safety. And finally, will improve our processes and collaboration within the company so that we can be more efficient and effective.

我們將持續提高員工敬業度並確保工作場所安全。最後，將改善我們公司內部的流程和協作，以便我們能夠更有效率和有效。

Mike will now review our results for the fourth quarter and our guidance for the first quarter of 2024.

Mike 現在將回顧我們第四季的業績以及 2024 年第一季的指導。

Thank you, Ryan. As reported in yesterday's earnings release, our fourth-quarter revenues were $35.2 million, a 12% decrease compared to last year's fourth quarter. Our Canadian revenues were up by 1%, while our US and international revenues were down 33% and 40%, respectively.

謝謝你，瑞安。正如昨天的財報所示，我們第四季的營收為 3,520 萬美元，比去年第四季下降了 12%。我們在加拿大的收入成長了 1%，而我們在美國和國際的收入分別下降了 33% 和 40%。

Lower natural gas prices in the US negatively impacted customer activity levels, while the timing of activity with our customers in the North Sea negatively affected international revenues. Sequentially, revenues in the fourth quarter decreased by 8%, with Canada down by 11%, international down by 45%, the US revenues increased by 14%.

美國天然氣價格下降對客戶活動水準產生了負面影響，而北海客戶的活動時間則對國際收入產生了負面影響。依序來說，第四季營收下降了8%，其中加拿大下降11%，國際下降45%，美國營收成長14%。

The improvement in the US was driven by higher sales of sliding sleeves and repeats composite plugs, and the decrease in Canada was primarily related to normal year-end seasonality. Our adjusted gross profit, defined as total revenues less total cost of sales, excluding depreciation and amortization expense, was $12.9 million in the fourth quarter of 2023, representing an adjusted gross margin of 37%, down compared to our adjusted gross margin of 40% for the same period in 2022.

美國的成長是由滑動套管和重複複合材料塞的銷量增加所推動的，而加拿大的下降主要與正常的年末季節性有關。2023 年第四季度，我們的調整後毛利（定義為總收入減去總銷售成本，不包括折舊和攤提費用）為1,290 萬美元，調整後毛利率為37%，低於調整後毛利率40% 2022 年同期。

The decline in adjusted gross margin was primarily attributable to an overall decline in revenues and revenue mix with a larger portion of the decline coming from our higher-margin service revenues. Our revenues for the full year 2023 were $142.5 million, a decline of 8% compared to the full year of 2022. Despite this decline in full-year revenues. Our adjusted gross margin of 39% was consistent with the prior year.

調整後毛利率的下降主要歸因於收入和收入組合的整體下降，其中很大一部分下降來自我們利潤率較高的服務收入。我們2023年全年的收入為1.425億美元，比2022年全年下降8%。儘管全年收入有所下降。調整後毛利率為 39%，與前一年持平。

Selling, general and administrative costs were $13.2 million for the fourth quarter remaining flat compared to the same period last year. For the full year of 2023, our SG&A costs were $56.5 million, a decline of approximately $2 million compared to 2022.

第四季的銷售、一般和管理成本為 1,320 萬美元，與去年同期持平。2023 年全年，我們的 SG&A 成本為 5,650 萬美元，比 2022 年減少約 200 萬美元。

For the fourth quarter, we reported net income of $39.6 million, or diluted earnings per share of $15.80 compared to net income of $2 million or diluted earnings per share of $0.81 for the same period in 2022.

第四季淨利為 3,960 萬美元，或稀釋後每股收益為 15.80 美元，而 2022 年同期淨利潤為 200 萬美元，或稀釋後每股收益為 0.81 美元。

For fourth quarter -- our fourth quarter net income was positively impacted by the settlement of the Texas legal matter, resulting in no cash payment by NCSI. Excluding this benefit, our adjusted net loss for the fourth quarter of 2023 was $900,000 or an adjusted loss per share of $0.36. Adjusted EBITDA for the fourth quarter was $2.5 million, a decline compared to adjusted EBITDA of $6.4 million for the same period in 2022. For the full year of 2023, our adjusted EBITDA was $11.9 million, a decline of $3.2 million compared to 2022.

第四季—德州法律問題的解決對我們第四季的淨利潤產生了積極影響，導致 NCSI 沒有支付現金。不計此收益，我們 2023 年第四季調整後淨虧損為 90 萬美元，調整後每股虧損為 0.36 美元。第四季調整後 EBITDA 為 250 萬美元，較 2022 年同期調整後 EBITDA 640 萬美元有所下降。2023 年全年，我們調整後的 EBITDA 為 1,190 萬美元，比 2022 年下降 320 萬美元。

Turning now to cash flow items in the balance sheet, during the fourth quarter, we generated cash flow from our operations and free cash flow after JV distributions of $6.2 million and $5.6 million, respectively. Our full year 2023 free cash flow after JV distributions was $2.6 million.

現在轉向資產負債表中的現金流項目，在第四季度，我們的營運現金流量和合資企業分配後的自由現金流分別為 620 萬美元和 560 萬美元。合資公司分配後，我們 2023 年全年的自由現金流為 260 萬美元。

On December 31, we had $16.7 million in cash, and total debt of $8.2 million, which consisted entirely of finance lease obligations resulting in a positive net cash position of $8.6 million. At the end of December. The borrowing base availability under our undrawn ABL facility was $16.4 million and repeat had no outstanding borrowings under their promissory note.

截至 12 月 31 日，我們擁有 1,670 萬美元現金，總債務為 820 萬美元，其中全部由融資租賃債務組成，導致淨現金頭寸為 860 萬美元。12月底。我們未提取的 ABL 融資下的可用借款基礎為 1,640 萬美元，且 Repeat 的期票下沒有未償還的借款。

Now turning now to a few points of guidance for the first quarter. We currently expect first quarter revenues in the range of $36 million to $40 million with the low end of the range, showing a slight improvement sequentially in the high end showing a modest improvement in both Canada and the US. We expect US revenues in the range of $9 million to $10 million, international revenue of $1 million to $2 million and Canadian revenue of $26 million to $28 million.

現在轉向第一季的幾點指引。我們目前預計第一季營收將在 3,600 萬美元至 4,000 萬美元之間，該範圍的低端收入將略有改善，高端收入將略有改善，加拿大和美國均略有改善。我們預計美國收入在 900 萬美元至 1000 萬美元之間，國際收入在 100 萬美元至 200 萬美元之間，加拿大收入在 2600 萬美元至 2800 萬美元之間。

We expect our adjusted gross margin to be between 38% and 41%, an improvement to our adjusted gross margin compared to the fourth quarter of 2023. We expect our adjusted EBITDA to be between $3 million and $4 million and our first quarter depreciation and amortization expense to be approximately $1.2 million.

我們預計調整後毛利率將在 38% 至 41% 之間，與 2023 年第四季相比，調整後毛利率有所改善。我們預計調整後的 EBITDA 為 300 萬至 400 萬美元，第一季折舊和攤提費用約為 120 萬美元。

With that, I'll hand it back over to Ryan to provide our full year 2024 guidance and for closing remarks.

至此，我將把它交還給 Ryan，以提供我們的 2024 年全年指導和結束語。

All right. Thank you, Mike. So our full year guidance for 2024 is as follows. We currently expect full year revenue to be between $145 million and $160 million and full-year adjusted EBITDA in a range of $13 million to $17 million. We expect that our revenue growth will primarily result from increased sales at Repeat Precision in the US and in international markets, the North Sea and the Middle East, in particular.

好的。謝謝你，麥克。因此，我們對 2024 年的全年指導如下。我們目前預計全年營收將在 1.45 億美元至 1.6 億美元之間，全年調整後 EBITDA 將在 1,300 萬美元至 1,700 萬美元之間。我們預計我們的營收成長將主要來自 Repeat Precision 在美國和國際市場（特別是北海和中東）的銷售成長。

We expect gross capital expenditures for 2024 of $2 million to $3 million. While working capital may represent a modest use of cash during the year, we expect free cash to be free cash flow positive again during 2024, further strengthening our robust balance sheet and providing us the strategic flexibility.

我們預計 2024 年的總資本支出為 200 萬至 300 萬美元。雖然營運資本可能代表年內適度使用現金，但我們預計 2024 年自由現金將再次為正自由現金流，進一步加強我們穩健的資產負債表並為我們提供戰略靈活性。

We expect to achieve revenue and adjusted EBITDA growth, even though we believe that the overall market activity will be lower in North America for 2024 than in 2023, reflecting both industry efficiency gains and a cautious view on natural gas directed activity. We do expect industry spending and activity in markets outside of North America to increase modestly in 2024.

儘管我們認為 2024 年北美的整體市場活動將低於 2023 年，但我們預計將實現收入和調整後 EBITDA 成長，這反映出產業效率的提高和對天然氣導向活動的謹慎看法。我們確實預期 2024 年北美以外市場的產業支出和活動將小幅成長。

And also just with respect to our guidance due to the seasonality of our business and consistent with prior years, we anticipate that the achievement of our annual adjusted EBITDA guidance range will be weighted to the second half of the year.

而且，就我們的指導而言，由於我們業務的季節性以及與往年一致，我們預計年度調整後 EBITDA 指導範圍的實現將加權到今年下半年。

Before we open to Q&A. I'll close with a couple of brief comments. I'm proud of the way the team at NCS navigated the challenges that we faced during 2023. We made the necessary adjustments to adapt to the market environment, advanced our technology portfolio and remain focused on the business. Despite several external distractions.

在我們開始問答之前。我將以一些簡短的評論作為結束。我為 NCS 團隊應對 2023 年面臨的挑戰的方式感到自豪。我們進行了必要的調整以適應市場環境，改進我們的技術組合併繼續專注於業務。儘管有一些外部幹擾。

We stand to benefit from multiyear investments that we've made to position ourselves for growth in international markets and the efforts to align our company and our technology with certain large customers, including the large independents, international oil companies and national oil companies.

我們將受益於我們為在國際市場上實現成長而進行的多年投資，以及使我們的公司和技術與某些大客戶（包括大型獨立公司、國際石油公司和國家石油公司）保持一致的努力。

We maintain the infrastructure required to support the revenue growth we are anticipating this year at the midpoint of our guidance ranges. We expect revenue growth of 7% that would grow our adjusted EBITDA by 25%, delivering strong incremental margins as we leverage our fixed cost base and benefit from the cost reduction efforts we enacted in 2023.

我們將支持今年收入成長所需的基礎設施維持在指導範圍的中點。我們預計營收成長 7%，這將使我們調整後的 EBITDA 成長 25%，隨著我們利用固定成本基礎並從 2023 年實施的成本削減措施中受益，帶來強勁的增量利潤。

The technologies that we are commercializing this year are aligned with the needs of our customers, adding to our portfolio and expanding both our market presence and our addressable market. And finally, we enter 2024 with a strong balance sheet liquidity position and in 2023, the cash balance of nearly $17 million. In addition, as we expect to add to that cash balance by generating positive free cash flow again in 2024. We'll have additional financial and strategic flexibility.

我們今年商業化的技術符合客戶的需求，豐富了我們的產品組合，擴大了我們的市場份額和目標市場。最後，進入 2024 年，我們的資產負債表流動性狀況強勁，到 2023 年，現金餘額將接近 1,700 萬美元。此外，我們預計 2024 年將再次產生正的自由現金流，從而增加現金餘額。我們將擁有額外的財務和策略靈活性。

With that, we'll welcome any questions.

這樣，我們將歡迎任何問題。

(Operator instructions) Dave storms, Stonegate.

（操作員指示）戴夫風暴，石門。

Hello. Good morning.

你好。早安.

Good morning.

早安.

You're guiding to a nice growth year-over-year, especially given the current market environment. I know you talked about some of the puts and takes in your prepared remarks. Just hoping you could go a little more in detail on what could be some of the positive upside surprises at the Trans Mountain pipeline? Is it maybe a restrengthening in your mix? Just any more information we could get on that would be helpful.

您正在引導公司實現年比良好成長，特別是考慮到當前的市場環境。我知道您在準備好的發言中談到了一些觀點。只是希望您能更詳細地介紹一下跨山管道可能帶來的一些正面的上行驚喜嗎？這可能是你的組合中的重新加強嗎？我們能獲得的任何更多資訊都會有所幫助。

Yes, absolutely. We'll talk to that at a pretty high level but I think as we were kind of concluding the prepared remarks, the two big pieces for us that we expect will allow us to grow faster than the market as we move forward into 2024, really had to do with Repeat Precision and the customer relationship and opportunity that developed late last year after that extensive testing of the plugs.

是的，一點沒錯。我們將在相當高的層面上討論這個問題，但我認為，當我們結束準備好的發言時，我們預計，隨著我們進入 2024 年，我們預計將讓我們比市場增長得更快，真的這與Repeat Precision 以及去年年底在對插頭進行廣泛測試後發展的客戶關係和機會有關。

With that, we're starting to work with the customer on two different crews in the Permian Basin, and we expect that could pick up from there a bit further. So that work just started in December, so you get really the full year-over-year impact of that customer win as we move through 2024.

至此，我們開始與客戶在二疊紀盆地的兩個不同的團隊中合作，我們預計情況會進一步改善。這項工作在 12 月才開始，因此當我們進入 2024 年時，您會真正感受到贏得客戶的全年影響。

The Canadian business, we're expecting to be relatively flat year-over-year at this point from a revenue standpoint, in a market that's flat to down a little bit as far as potential upsides to the Canadian market. We've talked a little bit in the past around how we're enabling customers to really change the way they do business in certain areas.

從收入的角度來看，我們預期加拿大業務目前將比去年同期相對持平，就加拿大市場的潛在上行空間而言，市場持平甚至略有下降。我們過去曾討論過如何幫助客戶真正改變他們在某些領域開展業務的方式。

So we've had some really good wins in the deep basin with customers, they're looking at running more sleeves in a given lateral length, so higher sleeve density. And as that sort of program and completion design, if that takes hold with other operators in the region that could be a source of upside for us.

因此，我們在深盆地與客戶取得了一些非常好的勝利，他們正在考慮在給定的橫向長度上運行更多的套筒，從而提高套筒密度。作為此類計劃和完井設計，如果該地區的其他運營商能夠接受，這可能會成為我們的優勢來源。

There's also a new area that we started working with a customer who has been a long-standing customer across a couple of different companie's who who bought some assets and has a new company, who's pushing a more high intensity and complex completions design in another area of the Deep Basin.

還有一個新領域，我們開始與一位客戶合作，該客戶是多家不同公司的長期客戶，他購買了一些資產並擁有一家新公司，該公司正在另一個領域推動更高強度和更複雜的竣工設計的深盆地。

So between those and then also upsides in continuing to grow our market share with the purple teal plugs, the Repeat Precision portfolio in Canada, I think there's probably some upside there. But at this point, we're looking at relatively flat on year-over-year in Canada, and hopefully can start to execute on some of that upside to drive outperformance versus the plan.

因此，在這些因素和繼續擴大我們的紫色藍綠色插頭市場份額以及加拿大的 Repeat Precision 產品組合的優勢之間，我認為可能存在一些優勢。但目前，我們預計加拿大的同比增長相對持平，並希望能夠開始利用其中的一些優勢來推動業績優於計劃。

But as far as kind of what's baked into the guidance and the upside in addition to repeat, which I mentioned earlier, the other big part is international. So with having grown that customer portfolio to five customers that we'll be working with either in an installer service basis, we'll see a nice growth in the North Sea. And then additionally, the growth in the tracer work in the Middle East.

但就指導和上行空間中包含的內容而言，除了我之前提到的重複之外，另一個重要部分是國際性的。因此，隨著客戶組合增加到五個客戶，我們將在安裝服務的基礎上與他們合作，我們將看到北海的良好成長。此外，中東地區追蹤工作的成長。

We talked before about how we thought that that region and one national oil company, in particular could Turning to our third largest operating rate opportunity for traders in time, that's being accelerated a bit and could even be the second largest for us, surpassing Canada and trailing only the US.

我們之前談到我們如何認為該地區和一家國家石油公司，特別是可以及時轉向我們為交易者提供的第三大運營機會，這正在加速，甚至可能成為我們的第二大運營機會，超過加拿大和僅落後於美國。

So really, It's flattish baseline in the US with upside from a couple of specific opportunities that repeat flattish in Canada and really executing internationally on the opportunities that we've been really working hard to secure over the last.

因此，實際上，美國的基線持平，但加拿大的一些特定機會重複持平，並且在國際上真正執行我們過去一直在努力爭取的機會，因此有上行空間。

Yes, very helpful. Thank you. And then just one more if I could. It sounds like you've accomplished a lot of cost-savings initiatives over the last year, you talked about '23. It gave you an opportunity focus on that. How many more levers do you have to pull here? And I guess kind of what's your appetite continue working on that?

是的，非常有幫助。謝謝。如果可以的話，然後再做一次。聽起來你在去年完成了很多成本節約舉措，你談到了「23」。它給了你一個專注於此的機會。您還需要拉多少槓桿？我想你有什麼興趣繼續從事這方面的工作？

Yeah. So you're certainly right that with 2023 and the reduction in activity, especially in the US from a market standpoint and that gave us the impetus to really take a hard look at our cost base from an operational standpoint. We did that through consolidating some facilities in the field, and also the manufacturing work at repeat that supports some supports our business globally.

是的。因此，您肯定是對的，隨著 2023 年活動的減少，特別是從市場的角度來看在美國，這促使我們從營運的角度真正認真審視我們的成本基礎。我們透過整合該領域的一些設施以及支持我們全球業務的重複製造工作來做到這一點。

We've made sure we're running as efficiently as possible. We're going to always be focused on continuous improvement, driving cost out of the system, whether that's working through our supply chain team and engineering to reduce the standard cost of our products, or whether it's continuing to take a hard look at every dollar on the SG&A side. But what I'll say is we're looking at growing in 2024 within that, there are going to be some strategic investments that we made, both on the capital side and the personnel side to support that growth.

我們已確保盡可能有效率地運作。我們將始終專注於持續改進，降低系統成本，無論是透過我們的供應鏈團隊和工程來降低產品的標準成本，還是繼續認真對待每一美元SG&A 方面。但我要說的是，我們希望在 2024 年實現成長，我們將在資本方面和人員方面進行一些策略性投資，以支持這種成長。

So I think it's going to be more of a balanced year from a cost standpoint, we'll be as efficient as we can. But I don't know that we'll be looking to take that same level of cost out of the system as we move forward. We're just going to make sure that we are they we're able to justify and leverage the cost base that we have.

因此，我認為從成本的角度來看，這將是更加平衡的一年，我們將盡可能提高效率。但我不知道隨著我們的前進，我們是否會尋求從系統中降低同樣水平的成本。我們只是要確保我們能夠證明並利用我們現有的成本基礎。

Understood. Thanks for taking my questions and good luck in first quarter.

明白了。感謝您回答我的問題，祝第一季好運。

All right. Thank you.

好的。謝謝。

(Operator instructions) John Daniel, Daniel Energy Partners.

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

Good morning. Thanks, Ryan, for including me.

早安.謝謝瑞安，讓我參與其中。

Yes absolutely John.

是的，絕對是約翰。

This might be a soft question. It's actually not meant to be. But like you talked about some field trials that you've kicked off, I'm curious if you could provide some more descriptive color as to when do if the trials are successful in your guidance, do you assume that it's successful and there's growth from that? Or is that potential upside as you think about the next couple of years? Just any color would be helpful.

這可能是個軟問題。它實際上不是故意的。但是，就像您談到您已經啟動的一些現場試驗一樣，我很好奇您是否可以提供一些更具描述性的色彩，說明試驗何時在您的指導中取得成功，您是否認為它是成功的並且有增長那？或者您認為未來幾年這是否有潛在的好處？任何顏色都會有幫助。

Yes, that's a good question, John.

是的，這是一個好問題，約翰。

And internally, we're tracking a significant number of field trial opportunities, and we've got, obviously, different measures of success for each of those. When you get to the field trial stage, you've gone through a pretty lengthy product development effort. You've gone through your manufacturing design effort. And you expect that when you get out in that field trial, there may be some additional earnings as well.

在內部，我們正在追蹤大量的現場試驗機會，顯然，我們對每個機會都有不同的成功衡量標準。當您進入現場試驗階段時，您已經經歷了相當漫長的產品開發工作。您已經完成了製造設計工作。您預計當您參加現場試驗時，可能還會有一些額外的收入。

So what I'd say is for the things that are within that field trial category, we expect some contribution here in 2023, but not a tremendous amount of contribution. I think it really does more set the stage for the longer-term growth trajectory. So if we execute on those field trials, either we've nailed it the first time when we go straight into production or we make one more iteration and get back out there and it's something that could be more of a revenue generator down the road.

因此，我想說的是，對於該現場試驗類別中的內容，我們預計 2023 年會做出一些貢獻，但不會是巨大的貢獻。我認為它確實為長期成長軌跡奠定了基礎。因此，如果我們執行這些現場試驗，要么我們在直接投入生產時第一次就把它釘牢了，要么我們再進行一次迭代並回到那裡，這可能會在未來更多地產生收入。

So we're I think we talked in the past, right. We kind of pulled back some of our development effort in 2020 and '21 and ramp that back up in 2022 and '23. And that's really starting to bear fruit. We've got a lot of really interesting technology that we're getting out there, a lot of good customer interaction and engagement around the products that we're bringing to market.

所以我想我們過去談過，對吧。我們在 2020 年和 21 年取消了部分開發工作，並在 2022 年和 23 年加大了開發力度。這確實開始取得成果。我們已經推出了許多非常有趣的技術，圍​​繞著我們推向市場的產品進行了許多良好的客戶互動和參與。

Okay. The next one I had, Ryan was and I apologize I'm driving I wasn't able to write down copious notes, but you talked about getting on to cruise. I think it was the Permian you mentioned when you win when you win, what do they see in your product that they like? And how do you spread the gospel if you will on the success of something like that?

好的。我的下一個，瑞安，我很抱歉我正在開車，我沒能寫下大量的筆記，但你談到了要上郵輪。我想這是你提到的二疊紀，當你贏時，他們在你的產品中看到了他們喜歡的東西？如果你願意這樣的事情成功的話，你如何傳福音呢？

Yes, absolutely. Thanks for the question there, John. So that customer, I would view them as being one of the one of the technology leaders in the E&P space. And every now and then they'll do something like they did in 2023, where they take a look at a number of different providers in a certain space. In this case, it was the frac plugs and we were one of I think it was six or seven different competitors that were evaluated there.

是的，一點沒錯。謝謝你的提問，約翰。因此，我認為該客戶是勘探與生產領域的技術領導者之一。他們時不時地會做一些像 2023 年那樣的事情，他們會考察某個領域的許多不同的提供者。在這種情況下，它是壓裂塞，我們是其中之一，我認為在那裡評估了六到七個不同的競爭對手。

As I said, there was a lot of work that was done, including fiberoptics tracers and other diagnostic tools for them to determine across a set of performance criteria, right, which plug performed the best. So we're certainly encouraged with the results there and then them starting to work with us. And yeah, we've kicked off with a couple of crews with them in the Permian, I think there's a chance to grow in that area.

正如我所說，我們做了很多工作，包括光纖追蹤器和其他診斷工具，以便他們根據一組性能標準確定哪個插頭表現最好。因此，我們當然對那裡的結果感到鼓舞，然後他們開始與我們合作。是的，我們已經在二疊紀與幾個團隊一起開始了工作，我認為該地區有機會發展。

How do you spread the gospel? I think internally that customer. They've got some other operating regions as well and that customer is also one that's very, obviously very well-connected in the West Texas community. And there they're willing to share to some extent, right, why they made some of the decisions they made about going with us long term.

你如何傳福音？我內部認為那個客戶。他們還有其他一些營運區域，而且該客戶也是西德州社區中人脈非常非常廣泛的客戶。他們願意在某種程度上分享為什麼他們做出一些與我們長期合作的決定。

So we're certainly working every angle there and taking that -- the work that was done, right, a sense of sort of testing and technical work that was done by that one customer and making sure that, that can kind of translate and be utilized by more customers in the area to help us grow the business.

因此，我們當然正在從各個角度進行工作並採取這一點 - 已完成的工作，對吧，由該客戶完成的某種測試和技術工作，並確保這可以轉化為該地區更多的客戶利用它來幫助我們發展業務。

Okay. I appreciate the incremental color. Thank you for including me.

好的。我很欣賞增量色。謝謝你把我包括在內。

Yes, absolutely. Thanks, John.

是的，一點沒錯。謝謝，約翰。

Thank you. At this time, I'm showing no further questions. I'd like to turn the conference back over to Mr. Ryan Hummer, Chief Executive Officer for closing remarks.

謝謝。目前，我沒有再提出任何問題。我想請執行長 Ryan Hummer 先生致閉幕詞。

All right. Thanks, Norma. On behalf of our management team and our Board, we'd like to thank everyone on 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 effort that our people bring to their work.

好的。謝謝，諾瑪。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。

Our team continues to provide excellent service to our customers as commercializing new products and services that will enable our customers to be more successful. We're taking on demanding and technically challenging work and delivering results. We appreciate everyone's interest in NCS Multistage and we look forward to speaking again are in quarterly earnings call.

我們的團隊將繼續為客戶提供卓越的服務，將新產品和服務商業化，使我們的客戶取得更大的成功。我們正在承擔要求高且技術上具有挑戰性的工作並交付成果。我們感謝大家對 NCS Multistage 的興趣，我們期待在季度財報電話會議上再次發言。

This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone, have a wonderful day.

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。祝大家有美好的一天。