Cactus Inc (WHD) 2022 Q4 法說會逐字稿

Good day and thank you for standing by. Welcome to the Cactus Q4 2022 Earnings Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded.

美好的一天，謝謝你的支持。歡迎來到 Cactus 2022 年第四季度收益電話會議。 （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 speaker today, John Fitzgerald, Director of Corporate Development and IR. Please go ahead.

我現在想把會議交給今天的演講者，公司發展和 IR 總監 John Fitzgerald。請繼續。

Thank you and good morning. We appreciate you joining us on today's call. Our speakers will be Scott Bender, our Chief Executive Officer; and Steve Tadlock, our Chief Financial Officer. Also joining us today are Joel Bender, Senior Vice President and Chief Operating Officer; Steven Bender, Vice President of Operations; and Will Marsh, our General Counsel and Vice President of Administration.

謝謝你，早上好。感謝您加入我們今天的電話會議。我們的發言人將是我們的首席執行官 Scott Bender；和我們的首席財務官 Steve Tadlock。今天加入我們的還有高級副總裁兼首席運營官 Joel Bender； Steven Bender，運營副總裁；以及我們的總法律顧問兼行政副總裁 Will Marsh。

Please note that any comments we make on today's call regarding projections or expectations for future events are forward-looking statements covered by the Private Securities Litigation Reform Act. Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control. These risks and uncertainties can cause actual results to differ materially from our current expectations. We advise listeners to review our earnings release and the risk factors discussed in our filings with the SEC.

請注意，我們在今天的電話會議上就未來事件的預測或預期發表的任何評論都是《私人證券訴訟改革法》涵蓋的前瞻性陳述。前瞻性陳述受到許多風險和不確定因素的影響，其中許多是我們無法控制的。這些風險和不確定性可能導致實際結果與我們目前的預期大不相同。我們建議聽眾審查我們的收益發布以及我們在提交給美國證券交易委員會的文件中討論的風險因素。

Any forward-looking statements we make today are only as of today's date, and we undertake no obligation to publicly update or review any forward-looking statements. In addition, during today's call, we will reference certain non-GAAP financial measures. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in our earnings release.

我們今天所做的任何前瞻性陳述僅截至今天，我們不承擔公開更新或審查任何前瞻性陳述的義務。此外，在今天的電話會議中，我們將參考某些非 GAAP 財務指標。這些非 GAAP 措施與最直接可比的 GAAP 措施的對賬包含在我們的收益發布中。

With that, I will turn the call over to Scott.

有了這個，我會把電話轉給斯科特。

Thanks, John, and good morning to everyone. During the fourth quarter, the company set records for both quarterly revenue and adjusted EBITDA. This was also our eighth consecutive quarter with adjusted EBITDA growth. I was particularly pleased with the margin performance in each of our revenue categories. The fourth quarter is usually our weakest due to seasonal factors, but results were strong across the board and highlighted the company's best-in-class margin and return profile.

謝謝，約翰，大家早上好。第四季度，公司的季度收入和調整後的 EBITDA 均創下歷史新高。這也是我們連續第八個季度實現調整後的 EBITDA 增長。我對我們每個收入類別的利潤表現特別滿意。由於季節性因素，第四季度通常是我們表現最差的季度，但整體業績表現強勁，突顯了公司同類最佳的利潤率和回報率。

Some fourth quarter highlights include revenue increased 2% sequentially to a company record $188 million; adjusted EBITDA improved by 4% sequentially to a company record $66 million; adjusted EBITDA margins were 35%, up 90 basis points versus the third quarter. We paid a quarterly dividend of $0.11 per share, and we increased our cash balance to $345 million.

第四季度的一些亮點包括收入環比增長 2%，達到公司創紀錄的 1.88 億美元；調整後的 EBITDA 環比增長 4%，達到創紀錄的 6600 萬美元；調整後的 EBITDA 利潤率為 35%，較第三季度上升 90 個基點。我們支付了每股 0.11 美元的季度股息，並將現金餘額增加到 3.45 億美元。

I'll now turn the call over to Steve Tadlock, our CFO, who will review our financial results. Following his remarks, I'll provide some thoughts on our outlook for the near term before opening the lines for Q&A. So Steve?

我現在將電話轉給我們的首席財務官 Steve Tadlock，他將審查我們的財務業績。在他發表講話之後，我將在開始問答之前就我們的近期前景提供一些想法。那麼史蒂夫？

Thank you, Scott. Note that all the historical and forward-looking data referenced today will be for Cactus on a stand-alone basis only and not inclusive of any potential impact from the pending FlexSteel transaction, which is expected to close in the coming weeks.

謝謝你，斯科特。請注意，今天引用的所有歷史和前瞻性數據僅針對 Cactus 的獨立數據，不包括待處理的 FlexSteel 交易的任何潛在影響，該交易預計將在未來幾週內完成。

As Scott mentioned, Q4 revenues of $188 million were 2% higher than the prior quarter. Product revenues of $125 million were up 2% sequentially driven primarily by an increase in rigs followed. Product gross margins of 41% rose 120 basis points sequentially due largely to operating leverage and lower branch costs. Rental revenues were $27 million for the quarter, up 1% versus the third quarter. Gross margins were up 420 basis points due to better asset management and lower repair costs as well as declining depreciation expense.

正如斯科特提到的那樣，第四季度的收入為 1.88 億美元，比上一季度增長 2%。產品收入為 1.25 億美元，環比增長 2%，這主要是受隨後鑽機數量增加的推動。產品毛利率為 41%，環比增長 120 個基點，這主要歸功於經營槓桿和較低的分支機構成本。本季度租金收入為 2700 萬美元，比第三季度增長 1%。由於更好的資產管理和更低的維修成本以及折舊費用下降，毛利率上升了 420 個基點。

Field service and other revenues in Q4 were approximately $36 million, up 1% sequentially. This represented approximately 24% of combined product and rental-related revenues during the quarter, in line with expectations. Gross margins were 24%, up 20 basis points sequentially, driven by lower supplies costs and branch-related expenses.

第四季度的現場服務和其他收入約為 3600 萬美元，環比增長 1%。這佔本季度產品和租賃相關總收入的約 24%，符合預期。毛利率為 24%，環比上升 20 個基點，受供應成本和分支機構相關費用下降的推動。

SG&A expenses were $23 million during the quarter, up $6.9 million sequentially. The increase was attributable to higher professional fees and expenses, $7.4 million of which were related to the pending acquisition of FlexSteel. Excluding these transaction-related expenses, SG&A was $15.5 million and 8% of revenue. We expect SG&A exclusive of transaction-related fees to be relatively flat in Q1 2023 with stock-based compensation expense of approximately $3 million.

本季度的 SG&A 費用為 2300 萬美元，比上一季度增加 690 萬美元。增加的原因是專業費用和開支增加，其中 740 萬美元與即將完成的 FlexSteel 收購有關。排除這些與交易相關的費用，SG&A 為 1550 萬美元，佔收入的 8%。我們預計 2023 年第一季度不包括交易相關費用的 SG&A 將相對持平，基於股票的補償費用約為 300 萬美元。

Fourth quarter adjusted EBITDA was approximately $66 million, up 4% from $64 million during the third quarter. Adjusted EBITDA for the quarter represented 35.4% of revenues compared to 34.5% in the third quarter. Adjustments to EBITDA during the fourth quarter of 2022 included approximately $3 million in stock-based compensation, $7 million in FlexSteel acquisition-related fees and expenses, and an add-back of $2 million in other expense related to the revaluation of the company's tax receivable agreement.

第四季度調整後的 EBITDA 約為 6600 萬美元，比第三季度的 6400 萬美元增長 4%。本季度調整後的 EBITDA 佔收入的 35.4%，而第三季度為 34.5%。 2022 年第四季度對 EBITDA 的調整包括約 300 萬美元的股票薪酬、700 萬美元的 FlexSteel 收購相關費用和支出，以及與公司應收稅款重估相關的 200 萬美元其他支出的追加協議。

Consistent with the fourth quarter's presentation, we've now revised the adjusted EBITDA for the third quarter of 2022 to exclude $1 million in FlexSteel acquisition-related expenses that were not previously added back to our adjusted results. Depreciation expense for the fourth quarter was $8.1 million, approximately $8 million is expected in the first quarter of 2023. Income tax expense during the fourth quarter was $7.9 million.

與第四季度的報告一致，我們現在修改了 2022 年第三季度的調整後 EBITDA，以排除 100 萬美元的 FlexSteel 收購相關費用，這些費用之前沒有加回到我們調整後的結果中。第四季度的折舊費用為 810 萬美元，預計 2023 年第一季度約為 800 萬美元。第四季度的所得稅費用為 790 萬美元。

During the fourth quarter, the public or Class A ownership of the company averaged 80% and ended the quarter at 80%. Following the equity offering we completed in January of this year, our Class A ownership is expected to average 81% of the total shares outstanding during the first quarter. Barring further changes in our public ownership percentage, we expect an effective tax rate of approximately 21% for Q1 2023.

第四季度，公司的公眾或 A 類所有權平均為 80%，本季度末為 80%。在我們於今年 1 月完成股權發行後，我們的 A 類股權預計在第一季度平均佔已發行股票總數的 81%。除非我們的公有製比例進一步變化，否則我們預計 2023 年第一季度的有效稅率約為 21%。

GAAP net income was $41 million in Q4 '22 versus $42 million during the third quarter. The decrease was driven by higher transaction-related expenses, which more than offset increased gross profit across our various revenue categories. We prefer to look at adjusted net income and earnings per share, which were $44 million and $0.57 per share, respectively, during the fourth quarter versus $40 million and $0.52 per share in Q3 2022.

22 年第四季度的 GAAP 淨收入為 4100 萬美元，而第三季度為 4200 萬美元。減少的原因是與交易相關的費用增加，這大大抵消了我們各種收入類別的毛利增加。我們更願意關注調整後的淨收入和每股收益，第四季度分別為 4400 萬美元和每股 0.57 美元，而 2022 年第三季度分別為 4000 萬美元和每股 0.52 美元。

Adjusted net income for the fourth quarter applied a 25% tax rate to our adjusted pretax income generated during the quarter. We estimate that the tax rate for adjusted EPS will be 25% during the first quarter of 2023. As previously stated, we've revised the adjustments for the third quarter of 2022 to include the $1 million in acquisition-related expenses that were not previously added back.

第四季度調整後的淨收入對本季度產生的調整後稅前收入適用 25% 的稅率。我們估計調整後每股收益的稅率在 2023 年第一季度為 25%。如前所述，我們已經修改了 2022 年第三季度的調整，以包括之前沒有的 100 萬美元收購相關費用加回去。

During the fourth quarter, we paid a quarterly dividend of $0.11 per share, resulting in a cash outflow of approximately $8.4 million, including related distributions to members. In January, the Board approved a dividend of $0.11 per share to be paid in March.

第四季度，我們支付了每股 0.11 美元的季度股息，導致現金流出約 840 萬美元，包括對會員的相關分配。 1 月份，董事會批准在 3 月份支付每股 0.11 美元的股息。

We ended the quarter with a cash balance of $345 million, up $24 million sequentially. Operating cash flow was approximately $39 million during the quarter, with net working capital representing a cash outflow of approximately $21 million. This was driven in part by a decrease in accounts payable due to the timing of seasonal payments. In addition, payables declined in advance of anticipated first quarter inventory declines. Excluding nonroutine items associated with the FlexSteel transaction, we expect net working capital to be relatively flat during the first quarter of 2023 and down as a percentage of revenue following a strong January.

本季度結束時，我們的現金餘額為 3.45 億美元，比上一季度增加了 2400 萬美元。本季度的運營現金流約為 3900 萬美元，淨營運資金代表現金流出約為 2100 萬美元。這部分是由於季節性付款的時間導致應付賬款減少所致。此外，在預期的第一季度庫存下降之前，應付賬款有所下降。排除與 FlexSteel 交易相關的非常規項目，我們預計 2023 年第一季度淨營運資金將相對持平，並且在 1 月份表現強勁後佔收入的百分比將下降。

Net CapEx was approximately $6 million during the fourth quarter of 2022. Capital requirements for our business remain modest, and we'll continue to exercise discipline with regards to capital expenditures. For 2023, we expect net capital expenditures to be in the range of $35 million to $45 million. This is inclusive of the potential purchase of a currently leased domestic property for approximately $7 million, the build-out of a new R&D facility in Houston, and it assumes $5 million to $10 million in growth capital dedicated to international expansion toward the end of the year.

2022 年第四季度的淨資本支出約為 600 萬美元。我們業務的資本需求仍然適度，我們將繼續在資本支出方面保持紀律。 2023 年，我們預計淨資本支出將在 3500 萬至 4500 萬美元之間。這包括可能以大約 700 萬美元的價格購買目前租賃的國內房產，在休斯敦建造新的研發設施，並假設有 500 萬至 1000 萬美元的增長資本專門用於 2019 年底的國際擴張年。

That covers the financial review, and I'll now turn the call over to Scott.

這包括財務審查，我現在將電話轉給斯科特。

Thanks, Steve. As stated earlier, the company generated record revenue and EBITDA during the quarter. U.S. product market share increased to 40.2% during the period as rigs followed rose by approximately 7%. From 3Q 2022 through December of 2022, we added 26 rigs in line with projections provided during our last earnings call.

謝謝，史蒂夫。如前所述，該公司在本季度創造了創紀錄的收入和 EBITDA。在此期間，美國產品市場份額增加到 40.2%，因為鑽井平台隨後增加了約 7%。從 2022 年第三季度到 2022 年 12 月，我們根據上次財報電話會議上提供的預測增加了 26 個鑽井平台。

Product EBITDA margins improved by 110 basis points during the quarter to 41%. During the fourth quarter, the majority of our rig additions came from public companies, but we also increased our rig count with private operators. Thus far, during 2023, we witnessed a mid-single-digit percentage increase in public rigs followed, which has been partially offset by a slight decrease in private rigs followed, particularly in gas basins.

本季度產品 EBITDA 利潤率提高了 110 個基點，達到 41%。在第四季度，我們增加的大部分鑽井平台來自上市公司，但我們也增加了與私營運營商的鑽井平台數量。到目前為止，在 2023 年期間，我們見證了隨後的公共鑽井平台以中等個位數的百分比增長，這部分被隨後的私人鑽井平台的小幅下降所抵消，特別是在天然氣盆地。

For the first quarter of 2023, we still expect Cactus' average rigs followed to be up 3% to 5% sequentially despite the overall decline in the U.S. land rig count. As you know, our core customers tend to be larger, well-established oil producers who are less reactive to short-term swings in commodity prices. Nonetheless, we're prepared to deal with the impact that lower natural gas prices will likely have on the industry, particularly in the Haynesville, an area weighted towards privates. We are also excited to be introducing several technical wellhead enhancements, which are in the final stages of testing.

對於 2023 年第一季度，儘管美國陸地鑽機數量總體下降，但我們仍預計 Cactus 的平均鑽機數量將連續增長 3% 至 5%。如您所知，我們的核心客戶往往是規模較大、信譽良好的石油生產商，他們對商品價格的短期波動反應較弱。儘管如此，我們已準備好應對較低的天然氣價格可能對該行業產生的影響，尤其是在海恩斯維爾，這是一個偏重於私營部門的地區。我們也很高興推出幾項技術井口增強功能，這些功能正處於測試的最後階段。

First quarter of 2023 product revenue is expected to be up approximately 5% versus 4Q. Product EBITDA margins are forecasted to be in the 41% to 42% range for the first quarter. We feel good about the prospects of market share gains as evidenced by our ability to achieve market share of over 42% in February. From an international perspective, there are really no changes regarding our plans for product commercialization in the Mid East by 2024. In addition, we continue to benefit from opportunities outside of Saudi.

預計 2023 年第一季度產品收入將比第四季度增長約 5%。第一季度產品 EBITDA 利潤率預計在 41% 至 42% 之間。我們對市場份額增長的前景感到樂觀，我們在 2 月份實現市場份額超過 42% 的能力就證明了這一點。從國際角度來看，我們到 2024 年在中東實現產品商業化的計劃確實沒有變化。此外，我們繼續受益於沙特以外的機會。

On the rental side of the business, revenues increased 1% during the fourth quarter and were up over 40% year-over-year. International increases drove the sequential top line improvement. For the first quarter of 2023, we expect rental revenue to remain relatively flat. EBITDA margin should be in the low 60% range, with potential for expansion late this year as we introduce cost-saving enhancements.

在業務的租賃方面，第四季度收入增長 1%，同比增長超過 40%。國際增長推動了連續的收入增長。對於 2023 年第一季度，我們預計租金收入將保持相對平穩。 EBITDA 利潤率應該在 60% 的低範圍內，隨著我們引入成本節約增強措施，今年晚些時候有可能擴大。

In field service, EBITDA margins improved by 20 basis points during the fourth quarter, overcoming what is typically the weakest seasonal quarter of the year. Revenue was 23.6% of combined product and rental revenue during the period. Fuel service revenue for the first quarter of 2023 is expected to remain between 23% and 24% of product and rental revenue. Fuel service EBITDA margins are expected to be approximately 28%.

在現場服務方面，EBITDA 利潤率在第四季度提高了 20 個基點，克服了通常是一年中最疲軟的季節性季度。在此期間，收入佔合併產品和租賃收入的 23.6%。預計 2023 年第一季度的燃料服務收入將保持在產品和租金收入的 23% 至 24% 之間。燃料服務 EBITDA 利潤率預計約為 28%。

Regarding the FlexSteel acquisition, management is excited and optimistic about this unique combination. As noted earlier this month, we received no comments from the FTC or DOJ during the HSR waiting period. From a financing perspective, we successfully raised $166 million of net proceeds from an equity offering in January and have made substantial progress regarding our permanent debt financing. At this time, we expect to close on a new $125 million Term A facility with a new $225 million upsized revolving credit facility upon transaction closing, which had occurred during the first quarter of this year.

對於 FlexSteel 的收購，管理層對這一獨特的組合感到興奮和樂觀。如本月早些時候所述，我們在 HSR 等待期間沒有收到 FTC 或 DOJ 的評論。從融資的角度來看，我們在 1 月份通過股權發行成功籌集了 1.66 億美元的淨收益，並在我們的永久債務融資方面取得了實質性進展。目前，我們預計在今年第一季度發生的交易結束後，將完成一項新的 1.25 億美元的 A 期貸款和一項新的 2.25 億美元的擴大循環信貸額度。

FlexSteel's fourth quarter financial performance was in line with our expectations. Following the closing of the transaction, Cactus will provide additional details on the expected financial impact of the first quarter. We look forward to sharing the same once we close. Despite recent weakness in natural gas prices, we're optimistic regarding our customer base, which is larger and primarily oil-focused. Cactus remains well positioned to deliver for shareholders unmet an overall healthy market backdrop.

FlexSteel 第四季度的財務業績符合我們的預期。交易完成後，仙人掌將提供有關第一季度預期財務影響的更多詳細信息。我們期待在關閉後分享同樣的內容。儘管最近天然氣價格疲軟，但我們對我們的客戶群持樂觀態度，該客戶群更大且主要以石油為重點。仙人掌仍然處於有利地位，可以為股東提供尚未滿足的整體健康市場背景。

And with that, I'll turn it back over to the operator, and we can begin Q&A. Operator?

有了這個，我會把它轉回給接線員，然後我們就可以開始問答了。操作員？

(Operator Instructions) Our first question comes from the line of David Anderson of Barclays.

（操作員說明）我們的第一個問題來自巴克萊銀行的大衛安德森。

I was hoping maybe you can just kind of step back a little bit and talk about the U.S. -- kind of the overall U.S. onshore market overall and really kind of how you see duration of this cycle compared to, say, other cycle, it looks like kind of the '08 to '12 or '13 time frame. You touched on the end there. Everyone is sort of waiting for this natural gas story. You have this ripple effect. Some people are thinking is going to collapse the U.S. services market. But would you make the cases in a more resilient market? I mean there's fewer players. Everyone seems more disciplined in terms of capacity and pricing. I think you're seeing in your business as well. Shouldn't this all kind of result in a cycle with more duration? Can you maybe expand on that a little bit?

我希望也許你可以稍微退後一步，談談美國——整體美國在岸市場的整體情況，以及你如何看待這個週期的持續時間與其他週期相比，它看起來就像'08 到'12 或'13 的時間框架。你觸及了那裡的盡頭。每個人都在等待這個天然氣故事。你有這種連鎖反應。有些人認為美國服務市場會崩潰。但是你會在一個更有彈性的市場中做案例嗎？我的意思是玩家越來越少。每個人似乎在容量和定價方面都更加自律。我想你在你的生意中也看到了。這不應該導致一個持續時間更長的循環嗎？你能稍微擴展一下嗎？

Wow, David. All right. So I think that we've seen -- let me first talk about natural gas. What we've seen is weakness in the Haynesville. I'm sure you know that. We've not seen the same weakness in the Northeast. The Haynesville is a very high cost area to operate, and it's dominated by private players. So one would expect that with lower gas prices, the Haynesville would suffer.

哇，大衛。好的。所以我認為我們已經看到——讓我先談談天然氣。我們所看到的是海恩斯維爾的弱點。我相信你知道。我們在東北部沒有看到同樣的弱點。海恩斯維爾是一個運營成本非常高的地區，而且主要由私人玩家主導。因此，人們會預計，隨著油價下跌，海恩斯維爾會受到影響。

For those of our customers that have multi-basin exposure, we're seeing a redeployment of rigs out of the Haynesville and into those quarterly basis. So let me maybe now turn my attention to the areas that we expect to see continued activity strength. I can only tell you what our customers tell us, and you know that we visit personally with all of our large customers on a regular basis. They indicated no reduction in activity. And you know that none of them planned on $100 oil so that if I think about our major customers, I'm actually seeing evidence of increases, and they're all basin activity. And those increases will likely offset losses in the Haynesville.

對於那些擁有多盆地風險的客戶，我們看到鑽井平台從 Haynesville 重新部署到這些季度。因此，現在讓我將注意力轉移到我們期望看到持續活動強度的領域。我只能告訴你我們的客戶告訴我們的，你知道我們定期拜訪所有大客戶。他們表示活動沒有減少。而且你知道他們都沒有計劃使用 100 美元的石油，所以如果我考慮我們的主要客戶，我實際上看到了增加的證據，而且它們都是盆地活動。這些增長可能會抵消海恩斯維爾的損失。

And David, that said, I don't know how well you could go on to Haynesville. I just feel like there's enough indication of demand in the Permian, actually in the Bakken as well. I think that in terms of fundamentals, I'm probably more bullish on oil fundamentals than maybe a lot of people. I think U.S. production rates are disappointing right now. Well efficiencies are disappointing. I think that we're going to see China open up, which also has implications in terms of cost. But China opening up, I think that Russian sanctions are going to start biting. I feel pretty good about the duration of this current oil base cycle. Gas, I don't even want to offer a opinion on gas except that I think the $2 gas makes some sense more for Haynesville.

大衛，就是說，我不知道你去海恩斯維爾的情況如何。我只是覺得二疊紀有足夠的需求跡象，實際上在巴肯也是如此。我認為就基本面而言，我可能比很多人更看好石油基本面。我認為美國的生產率現在令人失望。井效率令人失望。我認為我們將看到中國開放，這也會對成本產生影響。但是中國開放，我認為俄羅斯的製裁將開始產生影響。我對當前石油基礎週期的持續時間感到非常滿意。汽油，我什至不想對汽油發表意見，只是我認為 2 美元的汽油對海恩斯維爾來說更有意義。

So you're not really concerned that kind of natural gas and sort of tip the apple cart here that -- it doesn't seem like that could be big enough to really be more than an air pocket. Is that a fair way to look at it?

所以你並不是真的關心那種天然氣，而是把蘋果車倒在這裡——它似乎不夠大，不能真正成為一個氣穴。這是一個公平的方式來看待它嗎？

Well, David, I'm always concerned about our customers' cash flow. And so to the extent that natural gas prices are low, the cash flow is going to be reduced. And I don't think it's going to -- I'm not -- I don't have this overreading concern about the impact of natural gas on the rest of our customers. And I've visited with many of them over the last 2 weeks. So it's been very, very recent.

好吧，大衛，我一直很關心我們客戶的現金流。因此，在天然氣價格低的情況下，現金流將會減少。我不認為它會——我不會——我對天然氣對我們其他客戶的影響沒有這種過分的擔憂。在過去的兩周里，我拜訪了他們中的許多人。所以這是非常非常最近的事情。

That's good to hear. I know everybody always love to ask you about M&A, and you're just dying to tell us about all the deals you're working on right now. But outside your -- you just gave us this FlexSteel, a little smaller deal, it's around kind of the well site, different things that you're already doing. But I just want to look at this market. The reality is kind of most of the bad actors are gone. There's really no private equity money on the side (inaudible) we can tell. Is it fair to say that the M&A route is going to be pretty hard over the next 2 or 3 years? And then maybe the organic opportunities you've talked about in the Middle East -- I know Latin America is another area you sort of expanded. Does that make that more -- a more likely growth route organically than M&A because of just -- there's just -- it seems like there's fewer opportunities in a more consolidated market?

聽起來還不錯。我知道每個人總是喜歡問你關於併購的問題，而你非常想告訴我們你現在正在進行的所有交易。但在你之外 - 你剛剛給了我們這個 FlexSteel，這是一個小交易，它圍繞著井場，你已經在做的不同的事情。但我只想看看這個市場。現實是大多數壞演員都走了。我們可以說，這邊真的沒有私募股權資金（聽不清）。可以說併購之路在未來 2 或 3 年會非常艱難嗎？然後也許你在中東談到的有機機會——我知道拉丁美洲是你擴展的另一個領域。這是否使它比併購更有可能有機地增長，因為只是 - 只是 - 似乎在更整合的市場中機會更少？

I would say there are certainly no fewer opportunities, David. There are fewer buyers, but there are no fewer opportunities. There are an awful lot of people who are interested in monetizing in the -- during this period of time. But my -- I'm going to reiterate what I've said before. My preference has always been and will continue to be to consolidate this market. And so when I think about M&A opportunities, I need to think about -- I think about consolidation.

我想說機會肯定不會少，戴維。買家變少了，但機會並不少。在這段時間裡，有很多人對貨幣化感興趣。但是我的——我要重申我之前說過的話。我的偏好一直是並將繼續是鞏固這個市場。因此，當我考慮併購機會時，我需要考慮——我考慮整合。

FlexSteel was an incredibly unique opportunity for this company, and you know all the reasons. I can't think of another company that we looked at that checked all the boxes. Is there another FlexSteel out there? We haven't seen another FlexSteel. That's not to say there's not another FlexSteel, but I would probably tell you look for organic growth or an opportunity internationally.

FlexSteel 對這家公司來說是一個非常獨特的機會，你知道所有的原因。我想不出我們看過的另一家公司是否符合所有條件。還有另一個 FlexSteel 嗎？我們還沒有看到另一個 FlexSteel。這並不是說沒有另一個 FlexSteel，但我可能會告訴你在國際上尋找有機增長或機會。

This question comes from the line of Steve Gengaro of Stifel.

這個問題來自 Stifel 的 Steve Gengaro。

Two things for me. If you could start -- and I know you gave some good color on the first quarter outlook. When you -- you had very strong margins in the fourth quarter across the board. Can you just talk a little bit about your conversations with customer on the product side and what you're seeing from a pricing perspective relative to inflation and how we should be sort of thinking about margin trajectory for the rest of the year? And maybe as part of that, you did talk about some technical enhancements, which I would assume would be a net positive in the back half of the year.

對我來說有兩件事。如果你能開始——我知道你對第一季度的前景給出了一些很好的色彩。當你——你在第四季度的全面利潤率非常高。您能否談談您在產品方面與客戶的對話，以及您從與通貨膨脹相關的定價角度所看到的，以及我們應該如何考慮今年剩餘時間的利潤率軌跡？也許作為其中的一部分，你確實談到了一些技術改進，我認為這將在今年下半年產生淨積極影響。

Yes. I think that this team feels pretty good about sustaining margins in terms of the cost impact. I think we've done -- Joel has done a remarkable job of managing our costs, and a lot of our input costs are just now beginning to flow through. We still have to get rid of some of this higher cost inventory, but we're seeing the replacement costs decline. So I think that from a cost perspective and the impact that, that has on margins, I'm feeling pretty positive.

是的。我認為這個團隊在成本影響方面對維持利潤率感覺很好。我認為我們已經完成了——喬爾在管理我們的成本方面做得非常出色，我們的很多投入成本才剛剛開始流轉。我們仍然需要擺脫一些成本較高的庫存，但我們看到重置成本正在下降。所以我認為，從成本的角度和對利潤率的影響來看，我感覺非常積極。

And just along those lines, you -- I know you talked a little bit about maybe using more capacity out of Louisiana because of some of the supply chain issues. Where do the supply chain issues stand now?

沿著這些思路，你 - 我知道你談到了一些關於可能由於一些供應鏈問題而使用路易斯安那州以外的產能。供應鏈問題現在在哪裡？

Transit times are much improved. I mean I can -- I'll refer to Joel on this, but...

運輸時間大大改善。我的意思是我可以——我會參考 Joel 的意見，但是……

The supply chain is actually sort of return to some normalcy. There are pockets of it that are still problematic, elastomers, resin material, things like that. It's available. You just have to plan ahead for it, which we've done. In terms of vessels and things, you can ship out of China now and pick up a weekly shipment, drop it off of the port and pick it up in about a week. So that's returned to normal. I think the only challenge there is maybe light sailings. But if you prepare yourself and you have contracts like we do, there should be no disruption in terms of getting the product.

供應鏈實際上有點恢復正常。它的某些部分仍然存在問題，例如彈性體、樹脂材料等。它可用。你只需要提前計劃，我們已經做到了。就船隻和東西而言，你現在可以從中國發貨，然後每週提貨，把它從港口扔下來，大約一周後提貨。這樣就恢復正常了。我認為唯一的挑戰可能是小帆船。但是，如果您自己做好準備並且像我們一樣有合同，那麼在獲得產品方面應該不會受到干擾。

Our next question comes from the line of David Smith of Pickering Energy Partners.

我們的下一個問題來自 Pickering Energy Partners 的 David Smith。

Congratulations on the quarter and really looking forward to the first to close Q&A. But for now, my bigger questions were asked. So we'll ask a couple of minor ones. Circling back to the natural gas theme. Sorry if I missed this, but I wanted to ask if you're having any conversations with clients who indicate that they might accelerate oil programs if additional frac spreads became available to them.

祝賀本季度，真的很期待第一個結束問答。但就目前而言，我提出了更大的問題。所以我們會問幾個小問題。回到天然氣主題。很抱歉，如果我錯過了這個，但我想問你是否與客戶進行過任何對話，這些客戶表示如果他們可以獲得額外的壓裂價差，他們可能會加快石油計劃。

The short answer is no. Because we're -- our customer base is so dominated by larger players, they're not nearly as reactive. And so most of our major customers have indicated slight increases in activity, and they have not mentioned any change in their plan as a result of the availability of additional frac pressure pumpers.

最簡潔的答案是不。因為我們——我們的客戶群由大公司主導，他們幾乎沒有那麼被動。因此，我們的大多數主要客戶都表示活動略有增加，並且他們沒有提到由於額外的壓裂壓力泵的可用性而改變他們的計劃。

Makes perfect sense, but I had to ask. And just circling back to the enhancements or innovations you plan to introduce in the product segment. Just wanted to ask -- really looking forward to hearing about those. I'm all ears if you want to share any color on those, but should we be thinking about those as potentially beneficial to market share or maybe just more accretive to margins? And I ask it because your market share and margins are already so strong.

很有道理，但我不得不問。然後再回到您計劃在產品領域引入的增強功能或創新。只是想問 - 真的很期待聽到這些。如果您想分享這些顏色，我會洗耳恭聽，但我們是否應該考慮這些可能對市場份額有利或可能只是增加利潤？我問這個是因為你們的市場份額和利潤率已經非常高了。

Yes. David, we've always believed that if we don't continue to innovate -- innovation is one of our greatest defenses in terms of our market share. And so yes, I think that these enhancements will be attractive to people who perhaps were not Cactus customers. But the real reason for this is to continue and expand the gap between what we offer and what our competitors offer. It provides us not only with the ability to retain market share, but it provides us, importantly, with the ability to protect our margins.

是的。大衛，我們一直相信，如果我們不繼續創新——就我們的市場份額而言，創新是我們最大的防禦措施之一。所以是的，我認為這些增強功能將對那些可能不是 Cactus 客戶的人具有吸引力。但這樣做的真正原因是繼續並擴大我們提供的產品與競爭對手提供的產品之間的差距。它不僅為我們提供了保持市場份額的能力，而且重要的是，它為我們提供了保護利潤的能力。

Great answer. Appreciate the color. And if I can slip in one minor one. The field service margins fall up remarkably well in the fourth quarter. And I wanted to ask if that was just exceptional execution, if you were able to get maybe better margin protection, basically trying to think through this year and going forward, whether you figured out how to mitigate the historical seasonality hit to the margins.

很好的答案。欣賞顏色。如果我可以加入一個小的。現場服務利潤率在第四季度大幅下降。我想問的是，這是否只是特殊的執行，如果你能夠獲得更好的利潤保護，基本上是在今年和未來思考，你是否想出瞭如何減輕歷史季節性對利潤率的影響。

Yes. I'm going to let Steven answer that. That's his department piece. We were all very, very pleasantly surprised with our fourth quarter as our field service results.

是的。我會讓史蒂文回答這個問題。那是他的部門作品。我們都對第四季度的現場服務結果感到非常非常驚喜。

Yes. I think just to reiterate, we were very proud of what we achieved in the fourth quarter. I think we're optimistic that things will continue in that trajectory. There's still quite a bit of pressure on wage inflation in the field service levels, so we're keeping an eye on that, but concentrating more on utilization at this point.

是的。我想重申一下，我們對第四季度取得的成就感到非常自豪。我認為我們樂觀地認為事情將繼續沿著這條軌跡發展。現場服務水平的工資通脹仍然存在相當大的壓力，因此我們正在密切關注這一點，但目前更多地關注利用率。

David, we probably do -- I haven't worked for a lot of competitors, obviously, but we do an extraordinarily good job of monitoring utilization. So we're particularly sensitive to that during the fourth quarter when it usually drops because of the holidays. So I think we planned better this year. We executed better this year, and I don't -- I think it will continue to take those lessons forward.

大衛，我們可能會這樣做——顯然，我沒有為很多競爭對手工作過，但我們在監控利用率方面做得非常好。所以我們對第四季度特別敏感，因為假期通常會下降。所以我認為我們今年計劃得更好。今年我們執行得更好，我沒有——我認為它將繼續吸取這些教訓。

Thank you for all that color. Between the acquisition and the international expansion, there's a lot of good stuff we're looking forward to. Thank you all for your time.

謝謝你所有的顏色。在收購和國際擴張之間，我們期待著很多好東西。謝謝大家的寶貴時間。

Thank you.

謝謝。

We have another question from Stephen Gengaro of Stifel.

Stifel 的 Stephen Gengaro 提出了另一個問題。

Two quick ones. One was on the market share improvement we saw sequentially and what you highlighted in February, is this more rigs from existing customers? Or is it new customers? Or is it a combination?

兩個快的。一個是我們連續看到的市場份額改善以及您在 2 月份強調的內容，這是來自現有客戶的更多鑽井平台嗎？還是新客戶？或者它是一個組合？

It's a combination.

這是一個組合。

Okay. Great. And the other one -- and I know I asked you this on the call -- on the FlexSteel call, but maybe just to refresh, and we're getting this question from investors. The differentiation that FlexSteel brings, can you just give us a minute on sort of the key differentiating factors? And obviously, that's a big part of the Cactus story. So I think it'd be useful for me just to kind of get another summary on the big differentiation of FlexSteel versus their competition.

好的。偉大的。另一個——我知道我在電話中問過你這個問題——在 FlexSteel 電話中，但也許只是為了刷新，我們從投資者那裡得到了這個問題。 FlexSteel 帶來的差異化，您能否簡單介紹一下關鍵差異化因素？顯然，這是仙人掌故事的重要組成部分。所以我認為這對我來說只是對 FlexSteel 與其競爭對手的巨大差異的另一個總結是有用的。

Steve, do you want to take that?

史蒂夫，你想接受嗎？

Sure. Yes. I think it comes down to a lot of what makes Cactus in the wellhead side so special, which is really, in our mind, they just have a superior product and they do a better job of executing on the service and customer interactions than everybody else. When you look at the sort of the formulation of their product, they're the only spoolable composite that utilizes steel. So it has a robustness that the others lack. And in my experience, customers really value that just because less problems, less things to worry about, they've got enough to worry about out there in the field.

當然。是的。我認為這歸結為很多使井口側的 Cactus 如此特別的原因，在我們看來，這實際上是他們擁有優質的產品，並且他們在執行服務和客戶互動方面比其他任何人都做得更好.當您查看他們產品的配方類型時，他們是唯一使用鋼材的可纏繞複合材料。所以它具有其他人所缺乏的穩健性。根據我的經驗，客戶真的很看重這一點，因為問題少了，需要擔心的事情也少了，他們在現場有足夠多的事情可以擔心了。

Is the ultimate benefit to the customer one of sort of cost savings, efficiency, less maintenance? How should we think about sort of the value prop to the customer?

給客戶帶來的最終利益是不是某種成本節約、效率和更少的維護？我們應該如何考慮對客戶的價值支持？

Yes. It's really multifold. You get a cost benefit in terms of more rapid installation, getting wells online faster. What are some of the other aspects?

是的。這真的是多方面的。您可以在更快速的安裝、更快地使油井上線方面獲得成本效益。其他方面有哪些？

This product handles higher pressures. So it has a much larger addressable market.

該產品可承受更高的壓力。所以它有一個更大的潛在市場。

Larger diameters offered.

提供更大的直徑。

Larger diameter, which means that it can be used further downstream of the choke or the wellhead. So it has greater exposure to the market.

更大的直徑，這意味著它可以在節流器或井口的更下游使用。因此它對市場的敞口更大。

You do have less maintenance as well versus steel corrosion.

與鋼腐蝕相比，您確實需要更少的維護。

It's had 0 fuel failures since they introduced the product, and I think that's a function of the fact that it's not fiberglass or aramid fiber. It's steel. And so you still have to join it. You have to put couplings ultimately on this product. And it's -- you can imagine it's a lot better to couple of steel to steel, couplings or steel and steel to plastic.

自從他們推出該產品以來，它的燃料故障為 0，我認為這是因為它不是玻璃纖維或芳綸纖維。是鋼。所以你仍然必須加入它。您最終必須在該產品上安裝聯軸器。它是——你可以想像將鋼與鋼、聯軸器或鋼與鋼與塑料結合起來要好得多。

Great. And if I can ask one more around FlexSteel. The equity raise -- I mean when you did the deal or when you announced the deal, our math suggested you could deleverage this thing very quickly. You didn't necessarily need to do equity. And I was just curious on the thought behind that. And does that maybe trying to tell us that there's potentially more that you're looking at and you wanted the financial flexibility?

偉大的。如果我可以再問一個關於 FlexSteel 的問題。股權融資——我的意思是當你完成交易或宣布交易時，我們的數學表明你可以很快地去槓桿化這件事。你不一定需要做股權。我只是好奇這背後的想法。這是否可能試圖告訴我們您正在尋找的可能更多並且您想要財務靈活性？

I think that's right, Stephen. We've certainly been rewarded by having the strength in our balance sheet to date, and we let the cash balance to grow over time with no debt, and that gave us an opportunity like the one we saw with FlexSteel. And so it doesn't necessarily mean that it's because there's some other M&A trades that would be imminent or that's out there right now, but having the flexibility to provide those options is something that we certainly had in mind when we did the equity raise.

我認為這是對的，斯蒂芬。迄今為止，我們的資產負債表實力雄厚，我們當然得到了回報，我們讓現金餘額隨著時間的推移而增長，沒有債務，這給了我們一個機會，就像我們在 FlexSteel 上看到的那樣。因此，這並不一定意味著它是因為還有一些其他的併購交易迫在眉睫或現在已經存在，但我們在進行股權融資時肯定會考慮到提供這些選擇的靈活性。

And to summarize it, it's definitely on our minds.

總而言之，這絕對在我們的腦海中。

Thank you. I'd like to now turn the call back to John Fitzgerald for closing remarks.

謝謝。我現在想把電話轉回給 John Fitzgerald 作結束語。

We appreciate everyone's interest in Cactus and look forward to speaking with you on the next quarter's earnings call.

我們感謝大家對 Cactus 的興趣，並期待在下一季度的財報電話會議上與您交談。

Thanks, everybody. Have a great day.

謝謝大家。祝你有美好的一天。

Thank you for your participation in today's conference. This does conclude the program, and you may now disconnect. .

感謝您參加今天的會議。這確實結束了程序，您現在可以斷開連接。 .