Forum Energy (FET) 1 Nov 242024 Q3 Earnings call transcript

Good morning, ladies and gentlemen, and welcome to the Forum Energy Technologies Third Quarter 2024 Earnings Conference Call. My name is Gigi, and I will be your coordinator for today's call. [Operator Instructions] This conference call is being recorded for replay purposes and will be available on the company's website. I will now turn the conference over to Rob Kukla, Director of Investor Relations. Please proceed, sir.

Thank you, Gigi. welcome Third and Conference XXXX everyone, Call. morning, to Quarter FET's Earnings Good are President Lux, Officer; me Neal With today our Williams, Chief and our and Financial Officer. Lyle Executive Chief is our release, that issued are the federal afforded on harbor relying our law. we Yesterday, we and it website. Please available earnings note protections by safe on Listeners than historical that remarks may today our cautioned information. are contain other information XX-K factors be disclosed that in of other Form affect in business, should the considered remarks all These filings. those our including FET's and SEC context

Finally, may statements include management's non-GAAP financial measures.

measures, For of may reconciliation earnings a our release. these you refer to

During over today's all adjusted comparisons related Neal. to now second EBITDA noted, EBITDA. quarter third refer will XXXX to call, to all statements are quarter otherwise call And the unless XXXX. I to turn

morning, Rob, good Thank you, and everyone.

on FET multiple our quarter, team fronts. This delivered

dramatically we First, an on our position line. strengthened accelerated time financial

reflect continue execute for Second, our to the and to market beat new FET's strategy. allow us reputation products innovation

market down Finally, our was performance financial despite the activity. softening fairway

on sooner. Let by the this off In and meet accelerate loan term these that to options year, seller refinancing our of goals XXXX plan me next pay explored plan a key our parallel, middle year. organically expand to outlined notes we Earlier we and points.

Our solution to us We to acquisitions. alternatives shareholders strategic key return and wanted evaluation of that transaction criteria. cash included a would allow invest in

$XXX our for In financing. maintain was million ABL facility addition, to important it flexible growth

off cost week. and a will when search, Finally, which senior next with these to bond we million criteria notes $XXX seller we reasonable covenants. After us and a secured a allow XXXX loan had at met and close pay finalized be manageable term patient methodical to the offering,

offering boxes. this of strategic addition, checks lot In a

long-term credit current and maturity our bonds. immediately portion extends the and XXXX new debt it the First, facility XXXX for both the and eliminates to out of

free cash give expect an powder, flow. enhances it with our that to an million we amount should estimated position year-end, dry by $XX grow liquidity us Second, and of

Third, it cash. of provides flexibility for deployment

We will to conservative leverage maintaining reduction. and cash portion net used flow a further be committed debt meaningful free are for of our

In strategic cash of find investing it traditional to flexibility for lot yield FET. These addition, share With hard will strategic possible a This over will than in be we or expect to be continue in XX%, a a better could have ourselves the buybacks. be flow ample free of because we through form M&A deliver cash investments. investment investments flow. to

the year, the XXXX, For example, year between $X.XX within perspective, the we we cash this just under Therefore, $XX million us share range. of million. To flow raising second of putting forecast to $XX. put in time million per $X.XX range a our to closing yesterday's price into to are for first generated nearly and compared months $XX $XX full X of that's guidance that

will we FET continues is detail market Importantly, execute our performance to the shortly, strategy. believe this team the as repeatable over Lyle long term. The beat

to achieve As optimized all reminder, a and -- participation market developing this our products consists and technologies, utilizing expanding share, One with revenue measure in creating growing global by to of to objective market. strategy the of our than compare rig shareholder to the beat value energy our participating growing profitable global of count. faster FET our differentiated footprint quick performance is transition, market way

FET. year-over-year rig Variperm basis into months as the our per we revenue integrated X on has year, For XX% increased first this of a

the exciting the motor pumps are most highlights, ESPs provide some me a market. industry lift are in we the with and Let new Permanent today. starting efficient technology to few artificial delivering products magnet

great and customers' risk, our we money possible FET's protection barrier a profitability. brands, of enhance Magna market. provides recently tool our ] saves can which services lift However, help is greater magnet our expands Magna execution, can all meaningfully reliable a Guard safety Guard their from usage and To to to on removes for addressable [ adoption ] tool ESP third-party portfolio. This Also, has been permanent concerns. be limited artificial our motors. their extensive critical advancement due This used our by industry, added for eliminating mitigate [

but installed for is of remote and area vessels, within new this designed AI To technology The existing ROVs offshore leading-edge ROVs reduce central cloud-based and a utilizes end the robotics personnel towards from controlling This driving technology for Another upgrade market. tools Unity, would supports on fleets. is This have predictive ROVs. FET fewer goal to remotely Initially, safety reduce this and system vessels as to cost. can has monitoring operating fully industry control the personnel for and system on an innovation meet an maintenance. is operated improve be station. demand,

operator Brazil. For Norway example, could an in an ROV control in

additional We X and year. will quarter first deliver next our in before systems year-end system the of first

growing can a for do the opportunity We I oil customers. Last are gas this it technology mentioned what traditional quarter, our and excited market. global and outside about for

industry-leading Our XL power units sector. in applications generation found the transfer heat Jumbotron have

exciting power rapidly the expands orders sizable Recently, data fast-growing over AI coming We be the gen centers. received years opportunity to revenue for generation power that utilized grow we in expect transition. This FET's is potential. applications that and market with energy an can

unconventional can a more unconventional of are reservoirs. world to coiled particularly product high-pressure another our all pumps critical activity in which customers of pillar lift, casing and addition the footprint strategy. we the is including development, our products to in shift to exploiting countries our to -- Middle East the artificial investing. to leveraging We A good new hardware, Argentina. in tubing, range market Through are facility our where example markets, around is ship and In products, product beat distribute our Arabia, international wide global Saudi the

the and show industry week, last Economic Argentina. spurring showcased in energy stability, oil addition, our inflation currency large growth at products unconventional loosening a are In and we controls slowing there. leading in investment

year. plays in activity our XX% XX% with some the During next to intensity upgrades. shale service U.S., require will this expected increasing, customers, and interaction to is Similar to increase equipment

me our let few Now outlook. a provide market on comments

and cautious are the year. markets in to to we OPEC+ U.S., completions the activity plans have through efficiencies brought in spending production remain slow believe be and driven uncertainty of This more we to our due U.S. quarter, volatile, budget by forward. holiday supply. China going to drilling will demand allow the Therefore, demand In lower end their meet to fourth year-end. and and the unrest, customers Commodity exhaustion prices disruptions. prior expect around the East Middle For

softness. activity beat our as as international market help strategy offshore However, the should well mitigate and U.S.

and EBITDA to expect the in revenue and $XX the $XXX be $XX million $XXX and million ranges respectively. of we For adjusted million, fourth to quarter, million

guidance fourth within range $XXX Our $XXX quarter million. previous full of our us forecast year million to EBITDA puts

to still Turning is to It early provide too a XXXX. FET. financial specific for outlook

in demand to half there If planning increase, be is baseline price of commentary slightly weighted LNG from drilling in start upside here However, and towards in are a last and few U.S. triggers some the completions cadence spending process XXXX. the down gas on may rebound the center points. Customer or industry a indications the Also, activity. activity the be X planning our process, completions drilling as suggests could electricity much year. based X% observed activity may be Not data meaningful and activity. as natural a first we as commodity years, contemplated

shareholders. I'm currently conditions details world, on to free rest remain up and will of capital more XXXX. slightly market flow returning will and Regardless turn call financial and to Canada flat the compared for third highlights. on For demand year, our to the the we cash going results over focus believe Lyle quarter to relatively FET's of next remain to

everyone. Thank you, Neal. Good morning,

quite and to to for we cash of the of FET strength offshore. the the high-yield long-term ultimately reduce with the both opportunities onshore first and announced private The compares par able the new with interest typical international financing market. share This debt as were comps. markets broad Let our details blended With favorable and to quarter the of and audience a And having debt services additional million yield business in with a recently basis including size this points placement, a free secured model. oilfield investors. We pricing Nordic existing with asset-light refinancing. FET's me next of benefit by fits issuances. After the market is low U.S., our market in well yield year. favorably leverage, at XXX will rate flow and generation issued process, start The high-yield confidence notes Also, story Nordic receptive structure, Also, investor debt we of has $XXX reflects on market Nordic private our Nordic debt capital FET's offering XX.X% side bond explored issuances. the our been in with industry, coupon.

no-call bond pleased pricing, In terms. a tenor The notes a Nordic addition were have to X.X-year X-year period. we the with and

will life of maximum covenants the subject of a liquidity financial the million. net ratio of minimum Xx of During $XX and leverage we bonds, to be

these Given our overly restrictive. not to a leverage believe we covenants commitment ratio, do maintain be to low

to our strategy. Importantly, as Neal execute bonds the highlighted, provide flexibility

to offering. to bonds remains provides the the but acquisitions to X.Xx. our execute company feature leverage a First, below This permit also not cash only use provisions $XXX strategic of up follow-on million for provided include capital incremental for net acquisitions,

permit shareholders. cash of Second, the to bonds distribution

X.Xx flow adjusted XX% net Specifically, of when up the ratio of leverage below the free bonds to pro forma for cash allow shareholder distributions distribution. year is our prior

available We the quarter. XX-K XXXX after our amount will calculate for filing next

$XX our capitalization. the free incurrence could $XX market is FET's million is we $XX leverage guidance would million XX% current cash to threshold. to of million That $XX flow million once that have However, over below of be our distributed XXXX, assuming for

Our are looking XXXX and compelling free results forward. flow repeatable cash

me Let explain.

cash $XX about these of $XX we million items. around in around or $XX capital $XX million expenditures payments income million interest year, expect or less, Next taxes million total and of for

powder growth executing cash before capital, changes EBITDA leverage shareholder working flow framework net This provides in would to and strategy million. returning a and million $XX flat February and cash between our while shareholders. We to dry Assuming net our year-over-year call. on free over ample $XX our anticipate return yield time reduce that communicating

half to FET U.S. printed landed our improving market. EBITDA tape our softer results and a guidance first addition our a operationally. within sheet, despite results clean and balance consistent In range with were Revenue

XX% period. EBITDA $XXX ratio orders were higher strongest consolidated Allow book-to-bill segments orders $XXX up third product of and ROVs XX%, roughnecks iron increase year-to-date XX%. rigs catwalks FET's utilization was X equipment support up Middle X quarter capital lines and Our in product as XX% for secured margins in as of new me the contributed a awards are for to highlight Both the subsea and X lines. million, the in EBITDA awards to orders in for land over product decade. FET same XX% of a nearly offering included These up did drilling up East drilling orders. Subsea particular. demand million, drilling-related revenue were of XX% a increases, We our XX% achieved strengthen. continues was region. year-over-year, to

that no sign and with oil turbines customers gas utilization of construction of decline. indicate offshore high support equipment Our wind the wells their of and

As is a subsea years. in result, our we pipeline have of as as robust number of opportunities seen new a booking

equipment softer production doubled Our nearly outlook book equipment will U.S. of the the FET's year a as large technology. solid order for the maintains Despite business product project, orders the utilize which desalting market, line was a in backlog. ForumMix production U.S. from second a remains Included land quarter.

ROVs higher project Completions to results. revenue primarily launch revenue Drilling and and segment segment recovery and The to increased Turning from systems. due recognized X%,

XX%. to and and revenue volume almost another EBITDA our and valve quarter hardware was in record. coming $XX a the product million, offsetting down lower decline. quality XX%. The favorable product down $XX Lower product addition, were this Downhole and million, million, hose points margins strong end revenue Lift XX%, up Artificial East the mix. revenue lower by setting and The grew quarterly second family XX% was In $XX off revenue sales. sales segment by contributed segment EBITDA segment's improved Middle Partially was wireline higher EBITDA on power casing XXX basis X% to

traditional months X update on an the over on pronounced let XX%. With you measure. the with Variperm nearly has timing rig closing of were more business. the provide me Project impact count margins a since EBITDA than segment the However, Variperm's acquisition, results

Variperm outlook our With markets the trended delaying generated Variperm's In quarter, up liquidity X% of up, of $XX contribution. year Variperm's quarter, year, million quarter our under have above position Despite lead from speaking million up strong. We cash for are with orders to margin revenue. ultimately $XX and cash, times $XX They of the was flow ended with total deliveries heating soft are the revenue a up meaningful deferring facility the tubulars free this million. with and of each the EBITDA maintaining a $XX flow start credit million of pipe market and customers, cash Canadian second on million delivering revolving our strong in budgeted free sequentially. while hand $X we level. And availability remains cash

Our million X.Xx. Using remain $XX net This net and start, net is X months reducing from down further good debt was last $XXX annualized we million, committed quarter. first leverage ratio was EBITDA, leverage. to a

Finally, line let to roughly down me be purposes the a third and modeling anticipate quarter. We quarter. corporate in fourth few for slightly should the be the provide from amortization for costs million, Depreciation approximately third expense details $X with quarter.

to $X and expense million expense approximately be We million. be tax income expect to $X approximately interest

for remarks. to back call Neal? the turn me Neal Let closing

this and around financial execute And flow we uncertainty quarter to fortify free you, despite activity. sheet, cash delivered Thank our generate and continue results our prices solid commodity strategy. Lyle. We balance

year, we my out the work team their gratitude express take and please to entire As to I close question. FET first hard want the for dedication. Gigi, the

[Operator comes the line question Storms from Instructions] Stonegate. first of from Dave Our

guidance maybe start be that profitability? on with of more to puts takes of? that Is mostly free should the cash hoping just driven story flow. that the for some enhanced there aware range we Just by could is we Or and

basis. it, on I kind cash our, is obligations the think, you're look flow we've a cash at there, be, look Dave, might really thinking all go-forward if forward of what what call done are on fixed about

less that about or in cash $XX been next we've interest, million CapEx before. million $XX and range income kind $XX million of year, of where taxes So

So about then $XX assuming remains everything million. And constant. else

constant, million $XX that EBITDA So net capital million $XX us to gets range. working that constant,

I are would that. there think could that levers that obviously enhance we pull

Neal a market. would those the working would grow any talked that helping capital beat growth, be to And us market our of that to obviously, continue working faster number. be strategy ability net to One about, the our than down plus

Understood. know still situation both would And Would that mentioned be acquisitive. debt call, release go gives interest? the What's that you of a kind the in would it lot the different Or you profile new you pique I direction? on your and like to look the in ability a strategically today's Variperm?

this Dave, Neal. Yes, is

fit product, within a Variperm obviously niche our margins, a fantastic home think market, I one was that portfolio. run acquisition, differentiated well

absolutely. another So acquisition like Variperm,

acquisition look are out, choosy be -- of we part for through look we we'll As to what lever sense, of it's as been growth of we as be been sitting will of have kind in acquisitions see there. that make the grown, of well. a continue our we've history how going pipeline that it lot a but opportunities We're to and very methodical FET push and

potential has of you to demand impact outlook a the one more U.S. increase? Understood. me, the macro should the of And potential more just some upcoming rate tariff question. international about of How rhetoric a then election, lot for The are increases. U.S. thinking been -- the tariff around the

that would we administration, materials -- than more I supply And look more I issue. a rather we'd it the now, first about. going on materials be guess of a regularly to characterize that tariffs most actually our Trump been raw back with as we've there it's as it something living even were demand while import. a at for raw concerned I

provide So been key there our supply raw multiple the materials. tariff side. we've our chain, on suppliers focus really diversified have that That's

of Our the Daniel next Energy from question from Daniel John comes line Partners.

equipment look is Or I now, the little an might prior on up to want market, on on you right the, where you for you do as hitting follow at frac more M&A. of a guess which you call an air bit acquisitions? rather if one at capital questions look just stay I stuff? it, opportunity would drilling-related that towards focus or pocket production-related of

Yes.

-- to our I is activity-based sales. like keep we'd think our what do expanding consumable

you in said, harder, similar it's, whether I drilling a or too. little think capital is as the frac

the on whether for good sell want in. technology and well some it's that looking that. do had and we'll we've But obviously, be Tubing So and those or the are to But we'll like continue introduced new there, acquisition to that space -- equipment, per solutions, frac we've success, right opportunities, little continue again, or businesses a those we yes, there's Multilift participate capital other acquisitions we've And those ones capital frac Quality are Variperm and basis. really done, exciting, is are we a what Wireline Global the now. to tough

coil like what you the mean some I there. more feet. Okay. the Global like just demand? could doing on It curious, a of drill you all but is at of cited one XX,XXX positive, I'm you look seems And if then guys that it's every plus another is LinkedIn, how bit time Tubing. elaborate I'm XX,XXX, seeing assuming impacting on out you're

Yes.

it's I it. think X really aspects to

wells first are The going is longer. the

You obviously or selling strings that's tubing, per price more string. so of dollars need longer coiled higher

that thicker You push heavier wall to think team of to also allow you thickness, a end. allow out I thickness can wall engineers it that the to But to most you to can we're we with have designs importantly, me, farthest need excuse get reach that the actually farthest laterals far maximizing out as strings taper our find. specifically -- the we when that do on And that, proprietary as weight and to bit. our designs -- we

that's we really help for people, think customers the what's have to goals. is their process us I our So exciting reach the

the do that -- had good strings? you are plant longer to was to there? Or you any changes the Have to accommodate

No, there. we're good

installations. I manufacturers, when think we we quench pushing made one and line one quench the we the I temper and to with design -- continuous. -- we temper, we'll upgraded are but our benefit is limits heavy and around other newest of And We had being think

in So step. it's all one

I a that. we think around we're -- patent have

and So believe we're tubing continuously. we manufacturer only the coiled manufactures that temper quench

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

sure year-over-year want was understood number? Variperm. Did I X% QX? to I a you say hear that Or said from increase make I that QX a around that Well, what you was

It was a correct. That's Dan. sequential number,

Okay.

so your do we et snapback there? spring creating delays disclosure that think out Or consolidation, of in of we think of this projects project some Canada? these coiled some we're cetera. And like prior Are with and those through kind a 'XX? it of into sounds we we kind can we effect Do have look QX the pushing

think Dan, answer some think I pushing we these the is are into out short Yes. I of XXXX. projects

price going suppliers, year, beginning And projects. defer Canada. earlier oil you with TMX our was happened on And A this there put year, and as nice of crude West pipeline. uncertainty market the If End remember in is market talked that the to that call, to last a that to the pretty good crude as manufacturing. delays pipeline Canadian primarily opens TMX of delayed begin suppliers, we operators news of lot is world about tubular a the the -- to timing underlying occur. up in bump Coast when on was the result,

up. So we're There TMX did is when catch year, races. lag has chain supply that great, come yet online to the is, okay, right this that everyone to back a early

Variperm. XXXX, year-on-year yes. far up in we're And the that as activity as so we'd do think that's see really And and the pick delay continue I for what seeing really

and on ]. waiting our customers waiting us customers procure that for on so And our chain be really get back tubulars supply their again to supply [ -- we're clear, to those just we're

of in a It rate And QX of is versus running for as Do hold look QX then? does kind at QX. Variperm, flattish? sounds that that you're to like that you we level flat QX a kind --

yes. That feels right,

understand ebbs then you. want I just the And Got of I sure that. I to flows Okay. and the make on balance sheet. here kind appreciate

convert end the notes confirm me, while QX for is million we're it, seller and of with, $XX million million. another $XXX So of of sitting numbers we've outstanding at then got roughly -- call the the $XX debt, these

of million with down your paid and debt in $XXX we flow new our QX. cash So debt

better at the of QX. math than the so of kind a balance, we at And kind same end end we maybe there? year said the of cash little tying my Is basically, bit

between It cash our is. liquidity total at It so is. little those revolver be and/or the I on balance And there, maybe fungible a can because that X. balance would look

bit expect And so yes, end would to the maybe lower. I think we little year a

ended of So million QX. with we at liquidity $XX

a kind debt right the of be little do than that when the rest we new we'll lower of think million you're down $XXX will $XXX math of million the I debt, with our off you on pay of So that bit paying debt. right? on

million cash/revolver, our some $XX use of finished that fees we'll to So up. get

year So it $XX right should the just a liquidity. put us about below ending bit for million little

your outlook you Neal, you the want It sure could feel you. couple sounds flat to for seeing then in where kind essentially product the appreciate cash momentum, as you make about -- cash environment. take a or the the I of And you free minutes just flat go lines what if and were of of Got you're a I 'XX customers? from into the given describing your revenues, Maybe, 'XX, kind on you EBITDA like things best side. -- is order, talk about way

Yes.

think going customers, think to in of see at still the I now the is we're that the We from our end the And hearing really, QX. a year. U.S., early. indications obviously, we're it's really slowdown

Yes. Sloppy. Sure.

seen in up. that typically, pick Yes. And QX, we've

So I the rebound a of QX. bit little kind think would in U.S.

whether picking as think from we'll it's as our business, consumables hole coiled will up. case for well think it, think tubing, our that product I lines So see that consumable wireline, part I and of quality I drilling wireline, --

for I us we our exciting though for business. are inquiries of is subsea a good seeing think pipeline

pretty utilization the about fleets high the So out being think I there. for talked we've

of seeing come through. So lot are a inquiries we

further XXXX out system, a nice little technology. about Unity into our So could we have for ROVs. and hopeful a We of deliveries exciting is we're bit backlog which talked coming an going

business. development to expand our to want subsea grow that So on continue we and

as we now we kind feels go how we -- Do this a and It's catch-up. higher-margin mix Variperm takes just based expansion business. if should flat you And we like into -- guys the puts do think a see think you environment, of margin obviously potentially revenue could in alone? Okay. on have do 'XX, about much

Yes.

higher I Variperm I the obviously, market. a think revenue help from think contribution obviously, a -- mix, in would flat

to revenue though, in Again, goal, that's grow beat market market. a continue flattish to our strategy. the is Our

just So our we whether there product our more solutions, we it's think market hardware, are artificial of Multilift insurance share in better the a bundling, We customers, because number casing an have more insurance. just boots market And times, can downhole on of lines, who grow ground by example, grow lift. good there management, operators -- It's Multilift live think out better lot share customer without a account to that a solution. some some our policy. we

thing our to a them that good insurance for goal book, is for their thing so good And convince pocket is their well.

think I going on. to focused so remain that that's we're opportunity And just continuous a

it ask about want other quarter. question, check in I just I to think Last every again. I Great.

things mix, you've see, comfortable you're past be. business that's rationalized you years, where product of couple your kind we right that the If lines look you -- want to that at the the the that of over now, you're portfolio

divestitures meaningful no from So here?

talked all the part margins, look highest -- to I at We'll of margins Lyle's decade. having roughly our XX%. we businesses. script, nearly a right? expand continue the think in want We to we our about We're in

go. to want is think mid-teens where I we

revenue need operating In we strategy, of us we rationalization. market, there. think beat get with revenue could if to we in flattish a leverage growth, our tailwind look so need had to also cost but I market the at portfolio more and a both And our grow

we continuous that's follow. that So process a

on satisfied. to never that. we're don't And satisfied. We're so say I We'll always keep want

of the from Robertson Our Tower Research. Water Jeff from next question comes line

Neal, XXXX I drilling around could about thought I hear be right? your process X%. that Did mentioned think in down you that U.S.

did. You

share in out spending you gain And products any do to some optimizing the than efficient types and on more those that FET of demand for of products? case, -- increased maybe does that's focus because else market? that an there what for the is sense if your is market Does drive are production there get

Yes.

whether for focused. companies think our think technologies looking efficiencies absolutely and the I an cost Again, I that's operating it's where of a operators our service opportunity. that's reductions, are are and customers, lot or

could consolidations our think at on they I part price, partly commodity decide of be what acreage of based next look they want the and on the to their is down operators based view year complete. partly on as

that I have part also think think, that no applications, natural it. a mentioned, right? demand some really in power I that's So I winter. could plays wild cooler We gas. electricity And LNG. AI, as of rebound card, we're gen We a -- have could assuming a in kind has more from for

here. realistic want an keep at we'll with eye a of can look in we it's little So 'XX, on that. change go But to kind and still a early things and

week. We have an next election

but that's -- demand where today. looking We we at are indicators, keep we'll have

for an increase in the have could your margin would natural on that increase mix? products some activity -- Do and gas-related demand of effect

more to and gas quickly. usually It general but and comment, consumables drilling does. higher is will out pressure higher pressure And this completions seems natural really our a activity wear be

that's just so go we in And the past of consumables. to a maybe we've turn seen gas is as what higher

like on question can the just Unity locations? system it's ROVs the system of from, increase a that just you for operate them easier Or the then make remote do? it ROVs. And said, work to Would type those

I early. still combination. think again, And it will be it's a

it. giving they'll with So proficient it's good to a that system and have become operators, the to we're

a an in with that be from more they setting and could quickly, the they a -- moving with spot possibly. system, that they they're or the remote it's and system that AI node do to automated there programming think some go I let's quite more opportunities may say, Could spot. up whether quickly and in

potential. still I that's We're think So early. a

at end feedback think more X system said notes, I to get the of we our first delivering As this We'll continue and year next. our in we're there.

Are operators? those different going to

The first to are same order going -- the first operator. X, I the think,

So good case, pretty believe I consistent that's the think, feedback there. we'll get, Jeff. I

increasing safety, from Guard any does on effect the of the ], on run does apart And [ it ESPs? -- lastly, also have Magna times that

No.

really from when a to electricity actually acts that of I a current where sand it what cable, and turn. motor more comes allow the the down and prevent safety. shut the The [ they will and the actually Guard out. magnet think turning, ] the generated. the that's motor from doesn't motor And back, is by send current risk It's the being do electricity preventing brake as Magna will have they it's fall up the

really the that's So safety feature.

customers help we it really electrocution is the motors to motors. that real the prevent electricity field. positive. I the as usage event We lower I've So and efficiency motors, the that safety think the see right, permanent overcome talked magnet If what is obviously, can which a adoption they look that, help them like that we scary all can magnet who have. They permanent as that really in at can which we magnet concerning, is is of risk, permanent have,

question line next Our Eric comes Carlson from ]. of [ the

a kind guess what think Obviously, X/X, can quarters, market you the open high-yield to of that you're down is your the about mean, based the it you close bit. Cash upcoming... get bit you you 'XX like and as think can guided leverage interest 'XX on to like looks to of current a little net year-over-year mentioned just XX% I expense point from where and cash the kind it's be to said cash little over maybe just it kind of free flow -- durability, Is more. the of the produce flow X.Xx it cap for X of a you I And opportunities. to probably ratio. I helps this bonds that strong. when continues we when door first starting of

using. that's Yes. No, great point. a No, that's

[ X.Xx, year-to-date Eric the using So annualized. ], is EBITDA

So to early of raised being therefore, we which to feel record. ambitious do. again good exciting about -- like full fact already felt going And that's we the out the we we're in the did year this ahead. we like in that have set I our we we was to quarter raised last bottom impact set out The goal out, we us. Variperm want needed point. a and range of spot you're there. on cash. quarter, a that track It's And something And lay It end an guidance range, that's think the for a at the

EBITDA capital. where a pay like cash, structure as then wonder debt I'm continue our we and something onetime monetizing new bunch or mentioned, durable. And that. bunch we're debt. a a isn't of you working is of will think to to monetizing is we this debt sorry, generate anything allow us more as that really down So It

with $XXX debt with X-year refinancing $XXX we're on new of million revolver. million and leaving a So bonds some tenor the of

as we'll balance we generate So cash, drop well. revolver as that

So we have expense can further cycle. and a reduce virtuous good interest

to, cash, open mentioned, cash ahead look for both to really we're ability way out the for to you grow. to shareholders. is committed think us the opportunities, return finally, about up we're excited something delevering, a importantly, for great as on So which still will, we and for there And M&A, is

Yes.

week, next like whenever guys process. that then seller that's cash going month-long closes the debt long-term a then And high-yield what is to You on redemption be and expectation notes can the for you'd are in issue the just like? to I assume would would pay notice the So existing try process a you note?

very simultaneously. a that kind redemption and is process all There's Yes, of similar. happening

when all next bond we'll So issuance the existing we close we'll here pay pay our off week. debt -- the off

of So that's all in kind process.

that to And to -- do cash right? new to X.Xx shareholders. able get the correct, of Okay. you XX-XX then net to leverage, be high-yield X.X to so notes, return need kind That's

That's That's right. right.

for even to how more this through cash? our share, need for think come or a could do guidance, ratio leverage X.X to somewhere we cash And our challenge we share better reason then should And any continues How so we to strategy, for So through given pull kind leverage distribution. the year. better we could that can the mix. that buyback EBITDA -- do net do that? question is forma is at market we range -- we at margin improvement for then how So a that we flow, or X.Xx of pro forma those end of about cash be X.Xx to that over pro the time. look and the And beat get down in than us our increase ahead generate that with gaining get obviously, the come do one wanted be the

which And alluded asset that of all question number. EBITDA Dan's think cost I monetization. then management, to or boosts our

million $XX cash that obviously So any leverage. working did to $XX not enhance our lower have million number capital there, would drawdown and which

quickly and can. as So hard and working those pull we've as hands to levers all we as on those our got

Great. Yes.

call good, X.X buybacks, of pay I that think the sheet, that's buy debt Variperm, a of fix I I the you I run. I mean, But and puts my kind towards, lot. kind when kind can thought next has guess of mean, capital, of getting look you something. the to, know, take about of on go been helped or return don't a it, of mean, was, balance even whether last down home kind out year dividends, It's So then kind

I was think at that was announced. you bought when that it at X.Xx least trailing EBITDA, XX-month

That's right.

an obviously buy kind did $XX like FET number, plus. and at a do entity, with with forma at trades to something shares. would free now pro looking as if hard And Variperm yield which better flow a at seems own, of you you cash of share cash be X.Xx it more probably back XX% already up than come is what buying your to It the

makes when flow high-yield stock M&A that, so you little -- for buy so. But because difference have kind guess, from of somebody in between of about to -- it own you in when can into I'm carve-out own just for think if is guess saying, you find find without third incrementally a there you because does notes. your first rate buy I else find I to out are you the Obviously, add year, next seems that sense take the -- hurdle of you about kind have to me? my versus somebody stock the hurdle a kind in So own flexibility yourself? considerably and and makes M&A next then to my things the now an that different overleveraging going what getting mean, middle going year markets just destiny free bit think market new with the can private buy I patient else value like transaction cash that the what something for -- could can and my do like is going more rate let if I'm do flexibility you -- versus it of It there being to the there's the that like the a hands the market right or of obviously, could now something that versus you

evaluation acquisition laid share? using talking right though, make. cash that. buy if flow own to Eric, going think in It's is the when think we hard the find it'd think investment be were find XX% that to I like do, is it are that I as XX% again, you going And can we that yield. increase companies our we will the may right, think forward. that snap signs stock. to at If cash threshold flow better per to best now out -- all it's point our we investments analyze of And But free free off be I hard capital to you as buy that one, really shares. I better. probably to attractive our we Or Yes. as that something one we up is we're there, you I think acquisitions, that look the

That's was bullish I next call. release. into be listened have I going year. sure it would be of Canada the in be like activity kind I see just to that growth only that year-to-date mean, the of the it I of more your talk of seem growth But the kind helpful. Is of they don't I'm East thing big because think Yes, And on set will anything outlier markets would I the one you if know of filing. didn't still interesting Precision kind little could quarterly pretty kind revenue driver. other I true? say opportunity a I through Middle then it bit in to Drilling is The holding a kind that else. there, relative on pretty a maybe kind it of And could feels QX.

Eric, excited internationally. opportunities Yes, we're about

be does rigs. and adding mentioned market there bullish You seem more as Canada, to the as far

East, And the and oil of deeper gas. into oil the are about gotten you which a As steady, places that. piece that there. and forward. and big to Montney sands of a a looks more the the journey, Also, in sands uplift going what have Middle sands the excited like that of Oil QX, be we've like being seems there lot generating did we good other we we're mentioned really rigs outside

well. and in seem bit be of really QX can on know Middle just the to us little really as there deliveries And opportunities Neal East softer that product. I second in strong. quarter, So But the revenue for that's than chip was a the of the timing

Yes.

In And a We to getting of well. chasing kind our We're customers. I'll East East teams, of the of expanding. there my with spending with next as be definitely as to be fact, story prework in hopeful lot we're there and opportunities again. Argentina be being we technology, that lot from export we're in the seems think doing closing time beyond Middle tailwind the region week and as is our and Middle and unconventional a that the

So it's exciting.

we're fairly for company able very with I a well. think to again, there. our size, our And we're early play footprint

back would to remarks. At time, you. like turn closing the Neal now conference Thank over Lux for this I to

next We and for on to meeting discuss and results. full all forward FET's call. Gigi, fourth XXXX quarter look thank Thank to year you you. in your support you, and our February Thank participation today's

This concludes you today's conference call. participating. Thank for

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