Oil States International Inc (OIS) 2023 Q4 法說會逐字稿

Good day and welcome to Oil States International, Inc. fourth quarter 2023 earnings call. (Operator Instructions) Please note that today's call is being recorded. (Operator Instructions) That's all I need to go through for now. At this time, I would like to introduce the call to Ellen Pennington. You may now proceed, please.

美好的一天，歡迎參加 Oil States International, Inc. 2023 年第四季財報電話會議。（操作員說明）請注意，今天的通話正在錄音。（操作員說明）這就是我現在需要完成的全部工作。這次，我想把電話介紹給艾倫·彭寧頓。現在請您繼續。

Thank you, Ellie. Good morning and welcome to Oil States' fourth-quarter 2023 earnings conference call. Our call today will be led by our President and CEO, Cindy Taylor; and Lloyd Hajdik, Oil States' Executive Vice President and Chief Financial Officer.

謝謝你，艾莉。早上好，歡迎參加石油國家 2023 年第四季財報電話會議。我們今天的電話會議將由我們的總裁兼執行長辛迪泰勒 (Cindy Taylor) 主持；以及石油國家執行副總裁兼財務長 Lloyd Hajdik。

Before we begin, we would like to caution listeners regarding forward-looking statements. To the extent that our remarks today contain information other than historical information, please note that we are relying on the Safe Harbor protections afforded by federal law. No one should assume that these forward-looking statements remain valid later in the quarter or beyond. Any such remarks should be weighed in the context of the many factors that affect our business, including those risks disclosed in our Form 10-K, along with other SEC filings.

在開始之前，我們想提醒聽眾注意前瞻性陳述。如果我們今天的言論包含歷史資訊以外的信息，請注意，我們依賴聯邦法律提供的安全港保護。任何人都不應認為這些前瞻性陳述在本季稍後或以後仍然有效。任何此類言論都應在影響我們業務的許多因素的背景下進行權衡，包括我們的 10-K 表格以及其他 SEC 文件中揭露的風險。

This call is being webcast and can be accessed at Oil State's website. A replay of the conference call will be available two hours after the completion of this call and will continue to be available for 12 months.

此次電話會議正在網路直播，可以在石油州網站上觀看。電話會議的重播將在電話會議結束兩小時後提供，並將持續 12 個月。

I will now turn the call over to Cindy.

我現在將把電話轉給辛蒂。

Thank you, Ellen. Good morning, and thank you for joining our conference call today, where we will discuss our fourth-quarter 2023 results and provide our thoughts on market trends in addition to discussing our company-specific outlook comments.

謝謝你，艾倫。早安，感謝您今天參加我們的電話會議，除了討論我們公司特定的前景評論之外，我們還將討論 2023 年第四季度的業績，並提供我們對市場趨勢的看法。

For the oil and gas industry, 2023 can be summarized as a year in which international and offshore growth strengthened, while North American activity started to moderate. Our fourth-quarter results reflect those trends with revenues in our offshore manufactured product segment growing 24% sequentially, boosted by a 39% sequential quarter increase in project-driven revenues. This significant growth was offset by the impact of declines in US land-based completion activity due to an approximate 20% decline in the price of crude oil during the quarter, with continued weak natural gas prices and holiday impacts.

對於石油和天然氣產業來說，2023 年可以概括為國際和海上成長加強的一年，而北美活動開始放緩。我們第四季度的業績反映了這些趨勢，我們的離岸製造產品部門的收入環比增長了 24%，項目驅動的收入環比增長了 39%。這一顯著增長被美國陸上竣工活動下降的影響所抵消，該下降是由於本季度原油價格下降約 20%、天然氣價格持續疲軟和假期影響所致。

Despite the reduction in US activity levels during 2023, Oil States reported both positive operating and net income for a sixth consecutive quarter. Our fourth-quarter consolidated revenues and adjusted EBITDA increased sequentially by 7% and 2% respectively, while year-over-year revenues and adjusted EBITDA grew by 3% and 17%. The sequential and year-over-year improvements reflect significant growth within our offshore manufactured product segment, where revenues totaled $138 million in the fourth quarter, the segment's highest revenue level in eight years.

儘管 2023 年美國活動水準有所下降，但石油國家連續第六個季度實現了正營業收入和淨利潤。我們第四季的合併收入和調整後 EBITDA 分別較上季成長 7% 和 2%，而年收入和調整後 EBITDA 分別成長 3% 和 17%。環比和同比的改善反映了我們的離岸製造產品部門的顯著增長，第四季度的收入總計 1.38 億美元，是該部門八年來的最高收入水平。

Segment backlog totaled $333 million as of December 31, with backlog conversion supporting the 39% sequential quarter increase in project-driven revenues. Segment bookings totaled $120 million, yielding a quarterly book-to-bill ratio of 0.9 times and a full-year ratio of 1.1 times. 2023 marked the third consecutive year that our book-to-bill ratio was greater than 1 time. We remain encouraged by the continued expansion in offshore activity globally, coupled with enhanced competitive positioning in each of our business segments through our recent new technology introductions.

截至 12 月 31 日，該部門的積壓訂單總額為 3.33 億美元，積壓訂單轉換支援項目驅動的營收季增 39%。分部預訂總額為 1.2 億美元，季度預訂出貨比為 0.9 倍，全年預訂出貨比為 1.1 倍。 2023年是我們的訂單出貨比連續第三年超過一倍。全球離岸活動的持續擴張，以及透過我們最近推出的新技術增強了我們每個業務領域的競爭地位，我們仍然感到鼓舞。

In the fourth quarter, in response to the needs of global drilling contractors to drill more complex wells and unlock previously inaccessible reservoirs more safely, our offshore manufactured product segment delivered what is believed to be the industry's first deep-water, slim-lined, managed pressure drilling system. And we now have begun to market another industry-first MPD-ready system for jack-up rigs.

在第四季度，為了滿足全球鑽井承包商鑽探更複雜的井並更安全地解鎖以前無法進入的油藏的需求，我們的海上製造產品部門交付了據信是業內首款深水、細線、可控的鑽井平台。壓力鑽井系統。我們現在開始銷售另一種業界首創的用於自升式鑽井平台的 MPD 就緒系統。

Subsequent to quarter close, our well site services and downhole technology segments have also launched key new technologies, including our ActiveHub digital platform for remote well site monitoring and control, along with our Active Seat Gate Valve technology, and an expanded portfolio of perforating gun systems called EPIC Precision and EPIC Flex.

在季度結束後，我們的井場服務和井下技術部門還推出了關鍵的新技術，包括用於遠端井場監測和控制的ActiveHub 數位平台、我們的主動座閘閥技術以及擴展的射孔槍系統產品組合稱為 EPIC Precision 和 EPIC Flex。

Benefits of our expanded technology offering combined with this international offshore-focused investment cycle are expected to extend well beyond the next couple of years.

我們擴大的技術產品與這種以離岸為重點的國際投資週期相結合的好處預計將在未來幾年內持續下去。

Lloyd will now review our results of operations and financial position in more detail.

勞埃德現在將更詳細地審查我們的營運表現和財務狀況。

Thank you, Cindy, and good morning, everyone.

謝謝你，辛迪，大家早安。

During the fourth quarter, we generated revenues of $208 million, operating income of $8 million, adjusted consolidated EBITDA of $24 million, and net income of $6 million, or $0.09 per share. This represents our sixth consecutive quarter of positive net income. Adjusted consolidated EBITDA margin in the fourth quarter was 12%, comparable to the prior quarter. Results for the fourth quarter included facility consolidation, transportation charges of $0.8 million, which were incurred as we prepare selected facilities for sale, as well as patent defense costs of $0.6 million.

第四季度，我們的營收為 2.08 億美元，營業收入為 800 萬美元，調整後合併 EBITDA 為 2,400 萬美元，淨利為 600 萬美元，即每股收益 0.09 美元。這代表我們連續第六個季度實現正淨利。第四季調整後綜合 EBITDA 利潤率為 12%，與上一季相當。第四季的業績包括設施整合、80 萬美元的運輸費用（這些費用是在我們準備出售選定的設施時產生的）以及 60 萬美元的專利辯護費用。

Our offshore manufactured product segment generated revenues of $138 million, operating income of $25 million, and adjusted segment EBITDA of $30 million in the fourth quarter. As Cindy mentioned, revenues reported by this segment in the fourth quarter are at the highest level since the fourth quarter of 2015 Adjusted segment EBITDA margin was 22% in the fourth quarter, comparable to the prior quarter.

我們的離岸製造產品部門第四季的營收為 1.38 億美元，營業收入為 2,500 萬美元，調整後的部門 EBITDA 為 3,000 萬美元。正如 Cindy 所提到的，該部門第四季度報告的收入處於 2015 年第四季度以來的最高水平。第四季度調整後部門 EBITDA 利潤率為 22%，與上一季相當。

Regarding our facility planning, we consolidated certain facilities in Houston and are in the process of strategically relocating our Asian manufacturing and service operations from Singapore to Batam, Indonesia. These two facilities are classified as held for sale assets at December 31. Proceeds from the sales of our facilities in Singapore and Houston, which are anticipated to close in 2024, are expected to range between $35 million and $40 million, exceeding the costs associated with our planned investment in our new Batam facility.

關於我們的設施規劃，我們整合了休士頓的某些設施，並正在策略性地將我們的亞洲製造和服務業務從新加坡遷移到印尼巴淡島。於 12 月 31 日，這兩項設施被分類為持有待售資產。我們在新加坡和休士頓的設施預計將於 2024 年關閉，銷售收入預計在 3,500 萬美元至 4,000 萬美元之間，超過了我們計劃投資巴淡島新設施的相關成本。

Construction in Batam will commence in the first quarter, with completion targeted for the first half of 2025. In the meantime, temporary manufacturing lines have been set up in Batam, so that we can efficiently execute both our contracted backlog and subsequent orders during construction. Backlog totaled $333 million at December 31, an increase of 8% from December 31, 2022. The current quarter in backlog is at its second highest level since the fourth quarter of 2015.

巴淡島的建設將於第一季開始，預計於 2025 年上半年完工。同時，我們在巴淡島設立了臨時生產線，以便我們能夠在施工期間有效執行合約積壓訂單和後續訂單。截至 12 月 31 日，積壓訂單總額為 3.33 億美元，較 2022 年 12 月 31 日成長 8%。當前季度的積壓訂單達到 2015 年第四季以來的第二高水準。

In our well site services segment, we generated revenues of $51 million, an operational loss of $1 million, and adjusted segment EBITDA of $6 million in the fourth quarter. We also recorded charges of $.6 million associated with the defense and enforcement of certain of our patents. Adjusted segment EBITDA margin was 12% in the fourth quarter compared to 16% in the third quarter, reflecting industry activity declines in the quarter.

在我們的井場服務部門，第四季的營收為 5,100 萬美元，營運虧損為 100 萬美元，調整後的部門 EBITDA 為 600 萬美元。我們還記錄了與某些專利的辯護和執行相關的 60 萬美元費用。第四季調整後的部門 EBITDA 利潤率為 12%，而第三季為 16%，反映了該季度行業活動的下降。

In our downhole technology segment, we reported revenues of $19 million, an operating loss of $7 million, and an adjusted segment EBITDA loss of $3 million for the quarter. Lower revenues and margins in the quarter were driven by the North American activity declines previously discussed. Included in the EBITDA loss was $1.3 million of inventory reserves.

在我們的井下技術部門，本季營收為 1,900 萬美元，營運虧損為 700 萬美元，調整後的部門 EBITDA 虧損為 300 萬美元。該季度收入和利潤率下降的原因是先前討論的北美活動下降。EBITDA 損失中包括 130 萬美元的庫存儲備。

During the fourth quarter, we generated cash flows from operations of $4 million and invested $6 million in net CapEx to support future growth. As of December 31, no borrowings were outstanding under our revolving credit facility, while amounts available to be drawn totaled $76 million. This, together with cash on hand, resulted in available liquidity of $123 million. We also extended the maturity date of our revolving credit facility to February 2028.

第四季度，我們從營運中產生了 400 萬美元的現金流，並投資了 600 萬美元的淨資本支出以支持未來的成長。截至 12 月 31 日，我們的循環信貸安排下沒有未償還借款，可提取金額總計 7,600 萬美元。加上手頭現金，可用流動資金為 1.23 億美元。我們也將循環信貸額度的到期日延長至 2028 年 2 月。

Now, Cindy will offer some market outlook and concluding comments.

現在，Cindy 將提供一些市場展望和總結評論。

Thanks, Lloyd. The tight commodity markets of 2022 led to higher commodity prices and activity levels. However, this took a turn in early 2023 as softening global demand, higher production, and resultant elevated inventories caused oil prices to drop during the first quarter of 2023. Activity declined in US land basins during the second half of 2023, with the land rig and completion counts down about 20% by the end of the year.

謝謝，勞埃德。2022 年大宗商品市場緊張導致大宗商品價格和活動水準上升。然而，這種情況在 2023 年初發生了轉變，因為全球需求疲軟、產量增加以及由此導致的庫存增加導致油價在 2023 年第一季下跌。2023 年下半年，美國陸地盆地的活動下降，到年底，陸地鑽孔機和竣工數量減少了約 20%。

WTI and Brent crude oil prices were both down approximately 20% at December 31, compared to the prices in effect at September 30. Global inventories continue to hold within their five-year seasonal average for crude oil, albeit at the low end. But remain above the five-year average for natural gas. Given current industry dynamics, we expect US land drilling and completion spending in 2024 to remain at or near current levels, but do think we will see increased spending in international and offshore markets.

截至 12 月 31 日，WTI 和布蘭特原油價格均較 9 月 30 日生效的價格下跌約 20%。全球原油庫存繼續保持在五年季節性平均值內，儘管處於低端。但仍高於天然氣五年平均。鑑於目前的行業動態，我們預計 2024 年美國陸地鑽探和完井支出將保持在或接近當前水平，但我們確實認為國際和離岸市場的支出將會增加。

Revenues in our offshore manufactured product segment are expected to continue to grow year over year as a result of strong order flow, increased levels of backlog, and execution of major project milestones. We expect our well-site services and downhole technology segments to continue to perform in line with market activity indicators, which softened for US land activities beginning in the second half of 2023.

由於強勁的訂單流、積壓水平的增加以及主要項目里程碑的執行，我們的離岸製造產品部門的收入預計將繼續逐年增長。我們預計我們的井場服務和井下技術領域的表現將繼續符合市場活動指標，該指標從 2023 年下半年開始美國陸地活動疲軟。

Increased contributions from the commercialization of new technologies that I discussed previously should help us succeed over the longer term in the US land market. Considering these market conditions, we expect our annual revenues to grow about 5% on a consolidated year-over-year basis, with EBITDA ranging from $90 million to $95 million. Given typical seasonality and slow US land activity, the first quarter of 2024 is expected to be the weakest quarter of the year.

我之前討論過的新技術商業化的貢獻增加應該有助於我們在美國土地市場取得長期成功。考慮到這些市場狀況，我們預計我們的年收入將年增約 5%，EBITDA 在 9,000 萬美元至 9,500 萬美元之間。鑑於典型的季節性和美國土地活動緩慢，2024 年第一季預計將成為全年最疲軟的季度。

In terms of our estimates for free cash flow generation in 2024, we expect to generate at least $40 million in free cash flow, implying a free cash flow yield of 10% or greater. Our planned facility sales create more cash flow variability than is customary for us. Typically, the first quarter represents a use of cash due to the timing of various payments, including the payout of short- and long-term incentives, with the balance of the year being cash flow positive.

就我們對 2024 年自由現金流產生的估計而言，我們預計將產生至少 4000 萬美元的自由現金流，這意味著自由現金流收益率為 10% 或更高。我們計劃的設施銷售創造了比我們通常情況更多的現金流變化。通常，第一季由於各種付款的時間表而使用現金，包括短期和長期激勵的支付，而當年的餘額為正現金流。

In terms of free cash flow conversion, we are targeting a free cash flow to EBITDA conversion rate of approximately 40%. We remain focused on optimizing our operations and pursuing profitable activity in support of our global customer base. As market opportunities unfold both in the US and in international and offshore markets, we will continue to focus on core areas of expertise with the deployment of our recently enhanced equipment and technologies to further differentiate our product and service offerings.

在自由現金流轉換方面，我們的目標是自由現金流與 EBITDA 的轉換率約為 40%。我們仍然專注於優化我們的營運並追求獲利活動，以支持我們的全球客戶群。隨著美國以及國際和離岸市場的市場機會不斷湧現，我們將繼續專注於核心專業領域，部署我們最近增強的設備和技術，以進一步差異化我們的產品和服務。

Now, I would like to offer some concluding comments. Initially, the industry responded to higher commodity prices with accelerated shorter cycle investments in the United States, which the industry clearly benefited from in 2022. In 2023, we experienced an increase in investments in long lead-time projects in international markets and deepwater basins around the world based upon the longer-range outlook for commodity prices.

現在，我想提出一些結論性意見。最初，該行業透過加速在美國的較短週期投資來應對大宗商品價格上漲，該行業在 2022 年顯然受益於此。2023年，基於大宗商品價格的長期前景，我們對國際市場和世界各地深水盆地的長期項目的投資有所增加。

Strong macro fundamentals continue to point to a multiyear upcycle outside the US, which should drive growth in revenues, earnings, and free cash flow generation from our international and offshore operations. Our core competencies are well-entrenched in the markets we serve, and we continue to bid on potential opportunities, supporting our traditional subsea floating and fixed production systems, drilling and military customers, while also bidding to support multiple new customers and projects involved in developments such as deepsea minerals gathering, fixed and floating offshore wind developments, carbon capture and storage, geothermal applications, and other renewable and clean energy industries.

強勁的宏觀基本面繼續表明美國以外地區將出現多年的上升週期，這將推動我們的國際和離岸業務的收入、盈利和自由現金流產生的成長。我們的核心競爭力在我們所服務的市場中根深蒂固，我們繼續競標潛在機會，支持我們傳統的海底浮式和固定生產系統、鑽井和軍事客戶，同時也競標支援多個新客戶和參與開發的項目例如深海礦物採集、固定式和浮動式離岸風電開發、碳捕獲和儲存、地熱應用以及其他可再生和清潔能源產業。

These new energy transition opportunities create strong potential for us to expand our product and service offerings and our revenue base over the longer term. Oil States will continue to conduct safe operations and will remain focused on providing technology leadership in our various product and service offerings with value-added products and services available to meet customer demands globally.

這些新能源轉型機會為我們創造了強大的潛力，可以擴大我們的產品和服務範圍以及長期的收入基礎。石油國家將繼續進行安全運營，並將繼續專注於在我們的各種產品和服務中提供技術領先地位，提供增值產品和服務，以滿足全球客戶的需求。

That completes our prepared comments. Ellie, would you open up the call for questions and answers at this time?

我們準備好的評論就完成了。艾莉，您現在可以打開電話進行問答嗎？

(Operator Instructions) Connor Jensen, Raymond James.

（操作員說明）Connor Jensen、Raymond James。

Hey, guys. Thanks for taking my call today.

大家好。感謝您今天接聽我的電話。

Hi, Connor.

嗨，康納。

Yeah, so first quarter, the book to bill fell below 1 for the first time in a little bit. How's the kind of some color around bidding activity in the current outlook would be great. Maybe contrast that with the past few quarters and if this is something that's going to continue or if you expect that to jump back above 1.

是的，所以第一季度，帳單出貨量首次下降到 1 以下。在當前的前景中，圍繞投標活動的一些色彩如何會很棒。也許可以將其與過去幾個季度進行對比，看看這種情況是否會持續下去，或者您是否預計會跳回到 1 以上。

Yeah, thanks for the question, Connor. I think you meant fourth quarter book to bill of 0.9 and the annual was 1.1. I have to point out that quarter-by-quarter bookings obviously can vary. And importantly, we had one of the strongest revenue quarters in years. And so, bookings at $120 million were actually favorable bookings overall. So, you can't necessarily look quarter by quarter. But importantly, I would say, what are we looking at for 2024? And I got into a book to bill north of 1 at this point in time.

是的，謝謝你的提問，康納。我認為你的意思是第四季度的帳面比為 0.9，而全年為 1.1。我必須指出，每個季度的預訂量顯然可能會有所不同。重要的是，我們經歷了多年來最強勁的收入季度之一。因此，總體而言，1.2 億美元的預訂實際上是有利的預訂。因此，您不必逐季度查看。但重要的是，我想說，我們對 2024 年有何展望？此時我正在讀一本書，帳單要在1以北。

And as always, we may have some mixed shifts in there whereas we had lower kind of connector products activity really in 2023. We expect some uplift in 2024. Strong production facilities, particularly in Brazil. That may moderate just a bit, given timing of projects only.

像往常一樣，我們可能會出現一些混合變化，而 2023 年我們的連接器產品活動確實較低。我們預計 2024 年會有一些提升。強大的生產設施，特別是在巴西。僅考慮到專案的時間安排，這可能會稍微緩和一些。

But importantly, some of our new capital drilling equipment technologies around our MPD systems and our high-pressure riser systems will get a lift that we've not seen in several years. And we're pleased to say that our first MPD system has been in the water operating in MPD mode successfully in the first quarter.

但重要的是，我們圍繞 MPD 系統和高壓立管系統的一些新型資本鑽井設備技術將獲得幾年來從未見過的提升。我們很高興地說，我們的第一個 MPD 系統已於第一季在 MPD 模式下成功投入水中運作。

So we're pretty positive about this new piece of our business that, again, is brand-new technology for us. So, while some projects can flatten or moderate, other ones are lifting. We also expect to see strong activity on the military order side of our business.

因此，我們對這項新業務非常樂觀，這對我們來說也是全新的技術。因此，雖然有些項目可能會趨於平緩或緩和，但其他項目卻會有所提升。我們也預計我們業務的軍事訂單方面將會出現強勁的活動。

And so, on balance, again, expect a book to bill north of 1. There can be variations quarter by quarter. There always are. So we tend to look at the annual type book to bill moreso than individual quarters because of both order variability as well as revenue-generating variability.

因此，總的來說，預計一本書的收費將在 1 以上。每個季度可能會有變化。總是有的。因此，由於訂單的可變性以及創造收入的可變性，我們傾向於更多地考慮年度類型的帳簿而不是單一季度的帳單。

Yeah, thank you. That's great context there. And then just following up, you said that you expect military to be strong. Obviously, it picked up a little bit here. Do you expect those levels to continue higher or was this kind of a one-off?

是的，謝謝。這是一個很好的背景。然後你接著說，你希望軍隊強大。顯然，這裡有所回升。您預計這些水平會繼續走高還是只是一次性的？

No, we expect a very strong order book in 2024 as well.

不，我們預計 2024 年的訂單量也會非常強勁。

Alec Scheibelhoffer, Stifel.

亞歷克·沙伊貝爾霍夫，斯蒂菲爾。

Hi, good morning, everyone. Thanks for taking my question. Good morning. So just to kick us off here, I was wondering if you can provide us some color on your expectations for margins in the well side and downhole technologies. It's an activity where it remains steady around current levels in the North American land.

嗨，大家早安。感謝您提出我的問題。早安.首先，我想知道您是否可以向我們提供一些關於您對井側和井下技術利潤率的期望的資訊。這是一項在北美土地上保持穩定在當前水準的活動。

Yeah, no, I think that's a very good focal point for us. I'm having Lloyd kind of look at the model vis-a-vis the margins. But just generally speaking, it's no secret that the natural gas market is under significant pressure right now. And, in fact, the March contract for nat gas closed below $2 at $1.61 on Friday. That's the lowest price we've seen in 25 years. And so, that's the major message for me around land.

是的，不，我認為這對我們來說是一個非常好的焦點。我讓勞埃德（Lloyd）查看模型的邊緣。但總的來說，天然氣市場目前面臨巨大壓力已不是什麼秘密。事實上，3 月天然氣合約週五收盤價低於 2 美元，收在 1.61 美元。這是 25 年來我們看到的最低價格。所以，這就是我對陸地的主要訊息。

Crude oil prices seem to be trading in a steady band. And therefore, activity in your oilier basins should be at least flat, if not modestly up, throughout the year. But we've got to really focus on the margin degradation that occurs in areas like the northeast, the Hainesville, the Stack, et cetera. And so, our focus has to be around cost management and control, intense conversation with our customers in terms of what activity, if any, they're going to prosecute during this time.

原油價格似乎在穩定區間內交易。因此，全年中含油盆地的活動即使不是小幅上升，至少也應該持平。但我們必須真正關注東北部、海恩斯維爾、斯塔克等地區發生的利潤率下降。因此，我們的重點必須圍繞成本管理和控制，與客戶就在此期間將進行哪些活動（如果有的話）進行深入對話。

And so, I'm kind of looking at our EBITDA margins for well site in Q4 were 10.4%. If I'm looking at the correct numbers, that's the well site. Those are down from kind of mid to high teens throughout the other three quarters of 2023. Now, we are looking to have slightly better margins in totality in 2024.

因此，我認為第四季度我們井場的 EBITDA 利潤率為 10.4%。如果我看的是正確的數字，那就是井場。在 2023 年的其餘三個季度中，這一數字將從中到高十幾歲下降。現在，我們希望 2024 年的整體利潤率能稍微好一點。

But that is really predicated on significant cost control initiatives in the natural gas basins, as well as our newer technology, particularly our Active Seat Gate Valves, which not only we think leverage our revenue, our kind of market share revenue generating potential, but it also reduces our cost of repairs, our cost of greasing, et cetera. And so overall margins in totality flat to up, but the reality is they just got to come up from where, at least for the year 2024, compared to where they were in the fourth quarter, if that is helpful to you.

但這實際上是基於天然氣盆地的重大成本控制舉措，以及我們的新技術，特別是我們的主動座閘閥，我們認為這不僅可以利用我們的收入、我們的市場份額創造收入潛力，而且它還降低了我們的維修成本、潤滑成本等等。因此，整體利潤率總體持平或上升，但現實情況是，與第四季度的水平相比，至少在 2024 年，它們只是有所上升（如果這對您有幫助的話）。

But November and December for our business and for most really fell off for all the factors we're talking about. And it's hard to really get your cost down immediately in that timeframe. But that's an acute focus for us going forward this year.

但 11 月和 12 月，我們的業務以及大多數業務確實因我們所討論的所有因素而下滑。在這段時間內很難真正立即降低成本。但這是我們今年前進的重點。

Got it. Now, that's great. That's great color there. And then also just continuing and in downhole technologies. Has there been any noteworthy change in the competitive landscape and as well as pricing? Like, for example, are operators paying more for integrated systems or is there any kind of coverage you provide there?

知道了。現在，那太好了。那裡的顏色真棒。然後也只是繼續井下技術。競爭格局和定價是否有任何值得注意的變化？例如，運營商是否為整合系統支付更多費用，或者您是否提供任何類型的覆蓋範圍？

I think that what we are looking at right now is trying to look internally and say, how is our technology and where is it on the competitive continuum against the landscape that we operate in? And that's why we've invested both R&D money and engineering time in 2023 to bring an upgraded suite of products to the domestic market, which is the technology that I referenced in my call notes.

我認為我們現在所關注的是試圖從內部審視我們的技術，以及在我們所處的競爭環境中，我們的技術處於什麼位置？這就是為什麼我們在 2023 年投入了研發資金和工程時間，將一套升級的產品推向國內市場，這就是我在電話記錄中提到的技術。

And then in addition to that, most of our international activity has been more P&A oriented, which can be extraordinarily cyclical and lumpy depending on activity. And so we're really working to really get more international steady revenues around the completion side of the business, the shorter guns, as well as the charges that go internationally to more stabilize the ongoing cost absorption and our international side of the business. But those are the major focus initiatives that we are entering 2024 with. And we do expect to see improvement over 2023 because of the technology introductions.

除此之外，我們的大部分國際活動更以 P&A 為導向，根據活動的不同，這些活動可能具有異常週期性和波動性。因此，我們確實正在努力圍繞業務的完成部分、較短的槍以及國際費用來真正獲得更多的國際穩定收入，以更穩定持續的成本吸收和我們的國際業務。但這些是我們進入 2024 年的主要重點舉措。由於技術的引入，我們確實預計到 2023 年會有所改善。

Now, first quarter is a weak quarter. I'll be the first one to tell you that these natural gas basins are weak right now. And again, those are comments that I also offered to you in my call. But we do think the upgraded technology gets legs and some footing to help us be the most competitive in both the US market and the international market.

現在，第一季是一個疲軟的季度。我會是第一個告訴你這些天然氣盆地目前很薄弱的人。再說一次，這些是我在電話中也向你們提出的評論。但我們確實認為升級後的技術能夠幫助我們在美國市場和國際市場上成為最具競爭力的人。

You do mention the landscape. And I would say it's generally stable. It's no secret that DMC Global is evaluating what to do with the DynaEnergetics business. But I would just say at this point, we don't have clarity around whether it really changes anything in the landscape. So we've got to do what we can control, which is enhance our technology offering to our customer base.

你確實提到了風景。我想說它總體上是穩定的。眾所周知，DMC Global 正在評估如何處理 DynaEnergetics 業務。但我想說的是，目前我們還不清楚它是否真的會改變現狀。因此，我們必須做我們可以控制的事情，那就是增強我們為客戶群提供的技術。

Got it. Thank you. And then also just shifting gears a little bit to OMP. I was curious if you could provide some color on what's on the backlog and how that should kind of flow through the margins in 2024.

知道了。謝謝。然後也只是稍微切換到 O​​MP。我很好奇您是否可以提供一些關於積壓工作的信息，以及這些積壓工作在 2024 年如何通過利潤分配。

Thank you. And then also just shifting gears a little bit to RMP. I was curious if you could perhaps provide some color on what's on the backlog and how that should kind of flow through to margins in 2024?

謝謝。然後也只是稍微切換到賊法牧。我很好奇您能否提供一些關於積壓訂單的信息，以及這些積壓訂單在 2024 年應如何體現利潤？

Our margins have been pretty steady. The key for us is the mix and backlog. As I mentioned, production infrastructure, capital drilling equipment, service revenues, those are really favorable to our margin profile and mix. Then it becomes one of just kind of timing and absorption across our facilities.

我們的利潤率一直相當穩定。對我們來說，關鍵是混合和積壓。正如我所提到的，生產基礎設施、資本鑽井設備、服務收入，這些都對我們的利潤狀況和組合非常有利。然後它就成為我們設施中的合理的時間安排和吸收方式。

Even though we had a really good 2023, our short cycle piece of the business, which has a little bit of a land focus, obviously suffered some declines late in 2023. And it'll be slow to kick off in 2024. That's really why we've got it on a consolidated basis that the first quarter will be the weakest quarter for us.

儘管 2023 年我們的業績非常好，但我們的短週期業務（有點以土地為重點）顯然在 2023 年末遭受了一些下滑。到 2024 年，這一過程將緩慢啟動。這就是為什麼我們在綜合基礎上得出第一季將是我們最疲軟的季度的原因。

Got it. Thank you. And if I could squeeze one more in, I appreciate you being with me here. Just on the -- when we're thinking about 2024, I know you said there's some variability given the assets held for sale. But I'm just curious if you could provide some details on what you're expecting in terms of just working capital, capital spending, and just the free cash flow conversions. And I think you said it was 40% in 2024 (multiple speakers)

知道了。謝謝。如果我能再擠進去一點，我很感激你和我在一起。就在我們考慮 2024 年時，我知道您說過考慮到待售資產存在一些變化。但我只是好奇您能否提供一些關於您對營運資本、資本支出和自由現金流轉換的期望的詳細資訊。我想你說過 2024 年會達到 40%（多位發言者）

Yeah. I'm really thank -- go ahead, Alec. I'm sorry. I thought you were done.

是的。我真的很感謝——繼續吧，亞歷克。對不起。我以為你已經完成了。

No, almost. And then I was just around that. I was wondering if you could just comment on the patent defense charges during the fourth quarter and if that's expected to continue or where that stands.

不，幾乎。然後我就在那個附近。我想知道您是否可以對第四季度的專利辯護費用發表評論，以及這種情況是否預計會持續或情況如何。

Perfect. I'll kick off and Lloyd will pick up along the way. I'm really glad you asked the question about kind of free cash flow generation. And I mentioned in the notes, there's quite a lot of variability in our free cash flow because of these facility sales.

完美的。我會出發，勞埃德會沿途接我。我真的很高興你問了有關自由現金流產生的問題。我在筆記中提到，由於這些設施銷售，我們的自由現金流有很大的變化。

And I just want to be clear that what we've included in the guidance of roughly $40 million is the Singapore facility sale and the Batam CapEx construction simply because that Singapore facility is currently under contract. We've not yet included the cash proceeds from the Houston facility sale because we don't know the timing. It's not under contract. We do expect it to sell. So there could be upside to that cash flow. I'm trying to give you the guidance that to some degree would be the floor, I would say, in terms of EBITDA conversion and free cash flow generation.

我只是想澄清一下，我們在大約 4000 萬美元的指導中包含了新加坡設施銷售和巴淡島資本支出建設，僅僅是因為新加坡設施目前正在簽訂合約。我們尚未包括休士頓設施出售的現金收益，因為我們不知道具體時間。這不在合約範圍內。我們確實希望它能夠出售。因此，現金流可能有上升的空間。我試圖為您提供指導，在某種程度上，我想說的是，在 EBITDA 轉換和自由現金流生成方面。

Now, I'm going to ask Lloyd to comment on working capital. But I'll just say importantly, the shift towards more offshore and international revenue, i.e., growth in that, does it -- carry with it, percentage of completion accounting, and therefore, some increases in average working capital because of project duration. He's got the numbers for you. I'm looking at him right now to offer comments.

現在，我要請勞埃德對營運資金發表評論。但我要說的是，重要的是，向更多離岸和國際收入的轉變，即這方面的增長，是否會帶來完成會計百分比，因此，由於專案持續時間而導致平均營運資本增加。他有電話號碼給你。我現在正在看著他提出意見。

Yeah, Alex, so in 2023 we used working capital of $21 million. With revenues up, we gave guidance on about 5%. I kind of would expect working capital to be fairly consistent with 2023, maybe slightly less. And again, in the first quarter of last year, 2023, we used $26 million of working capital. First quarter is typically, as Cindy mentioned, is typically the heavier use of cash quarter, with the rest of the year, cash flow positive. So forecasting, say, $15 million to $20 million of working capital in 2024.

是的，Alex，2023 年我們使用了 2,100 萬美元的營運資金。隨著收入的成長，我們給出的指導值為 5% 左右。我預計營運資金將與 2023 年相當，甚至可能略少一些。同樣，在去年（2023 年）第一季度，我們使用了 2,600 萬美元的營運資金。正如辛迪所提到的，第一季通常是現金使用較多的季度，而今年剩餘時間則現金流為正。因此，預計 2024 年的營運資金將達到 1,500 萬至 2,000 萬美元。

In terms of the CapEx, I guess we are kind of forecasting around $40 million. That's gross CapEx, including the lion's share of the construction costs associated with the Batam facility. As Cindy mentioned, we've got the proceeds of the Singapore facility in our forecast, or in our budget. And that will offset the lion's share of the CapEx needs for Batam.

就資本支出而言，我想我們預測約為 4000 萬美元。這是總資本支出，包括與巴淡島設施相關的大部分建設成本。正如辛蒂所提到的，我們的預測或預算中已經包含了新加坡工廠的收益。這將抵消巴淡島大部分資本支出需求。

And that's how we arrive at roughly the $40 million of free cash flow for the year. Again, only including the Singapore facility. If you add in the potential proceeds from the Houston Ship Channel, that could be in the $60 million range.

這就是我們如何得出今年約 4000 萬美元的自由現金流。再次強調，僅包括新加坡工廠。如果算上休士頓船舶航道的潛在收益，可能會達到 6,000 萬美元。

John Daniel, Daniel Energy Partners.

約翰‧丹尼爾，丹尼爾能源合夥人。

Hey, good morning, Cindy and Lloyd. Thank you for including me.

嘿，早上好，辛蒂和勞埃德。謝謝你把我包括在內。

Good morning, John.

早安，約翰。

First, sort of a big picture. It's a two-part question, and the first part's a big picture. But just, Cindy, your thoughts on US landscape in light of the E&P consolidation and the impact of the business. And then the second part is, just given all of the E&P consolidation, how does that influence your willingness to either invest growth CapEx in the US or prosecute domestic M&A?

首先，有一個大圖景。這是一個由兩部分組成的問題，第一部分是一個大局。但辛迪，請談談您根據勘探與生產整合和業務影響對美國情勢的看法。第二部分是，考慮到所有勘探與生產整合，這對您在美國投資成長資本支出或進行國內併購的意願有何影響？

I think that is a fantastic question, John. Not surprised by that. But our focus is to try to stay high technology and, I'll say, as asset light as we can. And a lot of these new technology rollouts really achieve our objectives as well as the objectives of our customer base. And so focus around Active Seat Valves and automation are keys for us to do both of those things because it's hard to be in the service business and support these large customers without a broad range of equipment. But with that, carry high labor costs, high R&M costs, and high CapEx.

我認為這是一個很棒的問題，約翰。對此並不感到驚訝。但我們的重點是努力保持高科技，我想說的是，盡可能輕資產。許多新技術的推出確實實現了我們的目標以及我們客戶群的目標。因此，專注於主動座閥和自動化是我們完成這兩件事的關鍵，因為如果沒有廣泛的設備，就很難從事服務業務並為這些大客戶提供支援。但隨之而來的是高昂的勞動成本、高研發和維護成本以及高資本支出。

And we tend to not want to do all of that because of the cyclical nature of the business. And so we are trying to stay niche, I'll call it, in our product and service offerings. We're more likely to de-emphasize growth in M&A around this piece of the business, particularly if we view it as a more commoditized market with few barriers to entry, which quite frankly is about all of the transactions we have seen heretofore.

由於業務的周期性，我們往往不想做所有這些事情。因此，我們正努力在我們的產品和服務中保持利基市場，我稱之為「利基市場」。我們更有可能不再強調圍繞這一部分業務的併購增長，特別是如果我們將其視為一個更加商品化的市場，進入壁壘很少，坦率地說，這與我們迄今為止看到的所有交易有關。

If there are unique technologies that are more asset light, more manufacturing in support of US land, yes, we would be interested in looking at those. Just to date, we haven't seen a lot, if that's helpful.

如果有更輕資產、更多製造業來支持美國土地的獨特技術，是的，我們有興趣研究這些。到目前為止，我們還沒有看到很多，如果這有幫助的話。

Okay. That's helpful. And then I just have a labor question, but clearly natural gas basins are weak, and that's probably going to result in the OFS space rationalizing costs to try to preserve margin, which generally has an impact on the labor market. But we also all kind of expect those gassy markets to take off in '25, hopefully, as LNG comes online. So just the push and pull of how do you deal with labor in those isolated markets? And being ready to [rent]?

好的。這很有幫助。然後我有一個勞動力問題，但顯然天然氣盆地很薄弱，這可能會導致 OFS 空間合理化成本以試圖保持利潤率，這通常會對勞動力市場產生影響。但我們也都預計，隨著液化天然氣的上線，這些天然氣市場將在 25 年起飛。那麼，您如何處理這些孤立市場中的勞動力的推力和拉力呢？並準備好[租]？

Yeah, no, you're absolutely right. I'll call it labor. But another key area of focus for this business are the associated costs that go with labor. All of your travel, your hotels, your vehicle costs, leasing, gasoline, [per diems], and so I obviously prefer to focus on the ancillary costs. If my labor utilization is low, maybe I just let them sit at home. Don't make them drive to the shop. And then when they drive to the shop, they start doing R&M on equipment, so you have a double whammy in a low-revenue environment.

是的，不，你說得完全正確。我稱之為勞動。但該業務的另一個重點關注領域是與勞動力相關的成本。你所有的旅行、你的酒店、你的車輛成本、租賃、汽油、[每日津貼]，所以我顯然更喜歡專注於輔助成本。如果我的勞動利用率低，也許我就讓他們坐在家裡。不要讓他們開車去商店。然後，當他們開車到商店時，他們開始對設備進行 R&M，因此在低收入環境中您會受到雙重打擊。

I do not. I really want to focus on labor retention for all the reasons that you talk about. We're really diligently working with our customers, because as you know, several of these natural gas plays are thinly supported by customers, i.e., the Northeast. There just aren't that many big customers working up there, so we really do need to retain a certain amount of work with the ones that we have to support a core labor component.

我不。出於你所說的所有原因，我真的很想關注勞動力保留問題。我們非常努力地與客戶合作，因為如您所知，其中幾個天然氣區塊很少得到客戶（即東北地區）的支援。在那裡工作的大客戶並不多，所以我們確實需要保留一定程度的工作，以支援核心勞動力部分。

But we are absolutely going to have to look at out-of-basin labor support in the oilier regions and do what we can. The key question for us right now is, do we have to cut the work week down from historically an average of about 60 hours of work? Do we have to cut the work week to lower levels just to sustain our labor through 2024? And that is the acute focus we have right now. But, you know, labor is essential, and I think our customers recognize that. Not a lot matters when prompt net gas is [161].

但我們絕對必須考慮對含油地區的盆地外勞動力支持，並盡我們所能。現在我們面臨的關鍵問題是，我們是否必須將每週工作時間從歷史上平均約 60 小時的水平減少？我們是否必須降低每週工作時間才能維持勞動力到 2024 年？這就是我們現在關注的重點。但是，你知道，勞動力是必不可少的，我認為我們的客戶也認識到這一點。當即時淨氣體存在時，這並不重要[161]。

(Operator Instructions) Looks like we don't have any questions as of the moment. I'd now like to hand back over to Cindy for closing remarks.

（操作員說明）目前看來我們沒有任何問題。現在我想請辛迪致閉幕詞。

Oh, thank you so much, Ellie, and thanks to all of you for joining us today and answering good insightful market-oriented questions that we can respond to. Obviously, as is always the case in this business we love, there's a lot of things going on that affect the commodities at this point in time. But I do think fundamentally, supply, demand will get back into a healthy balance for natural gas. It's logical anyway.

哦，非常感謝你，艾莉，感謝大家今天加入我們並回答我們可以回應的富有洞察力的市場導向問題。顯然，就像我們熱愛的這個行業的情況一樣，此時發生的許多事情都會影響商品。但我確實認為從根本上來說，天然氣的供需將恢復健康平衡。無論如何，這是合乎邏輯的。

We are in an election year, so I think there's a lot of unexpected things that might hit us, such as this permitting pause, if you will, around LNG export facilities and other things. But maybe, I'll just say that ends up making us stronger in the long term in terms of how to run and manage businesses. And so there's always a bright side.

我們正處於選舉年，所以我認為有很多意想不到的事情可能會打擊我們，例如在液化天然氣出口設施和其他事情上允許暫停（如果你願意的話）。但也許，我只想說，從長遠來看，這最終會讓我們在如何經營和管理業務方面變得更強大。所以總有光明的一面。

I think a lot of you will be at the conference later this week here in town, and we look forward to visiting with you all then. Hope you have a great remainder of the earning seasons and a nice week. Thanks so much.

我想你們中的很多人都會參加本週晚些時候在城裡舉行的會議，我們期待屆時與你們見面。希望您在剩餘的盈利季節中度過愉快的一周。非常感謝。

Thank you for attending today's call. You may now disconnect.

感謝您參加今天的電話會議。您現在可以斷開連線。