ChampionX (CHX) 24 Feb 212020 Q4 Earnings call transcript

Hello and welcome to the ChampionX Fourth Quarter and Full Year 2020 Earnings Call. My name is Anara [ph] and I'll be your operator for today's call. At this time, all participants are in listen-only mode. Please note this conference is being recorded. I'll now turn the call over to Mr. Pope. Byron begin. may you Byron,

you. Good Somasundaram, Fisher, today Soma With Executive morning, and CEO everyone. President CFO. Ken President me of Vice are and Thank ChampionX our and

of today's Soma summary our Ken, During for then fourth outlook some first our and results discuss will call before Soma share turning will company's during the the call, highlights quarter. and quarter quarter thoughts. some back to

the call for We will open then Q&A.

filings from press ChampionX's those found from our forward-looking to those today's XX-K and to risks statements set these actual the would company's well website. the uncertainties call, making that Report as with revise the on forward-looking we by and the expressly involve These are obligation company Form our required in be Annual or in slides During participants statements. in any Information to statements difference time as could cause of concerning forward-looking. matters be ChampionX's performance and disclaims intention material release I law, time or at referring to can some championx.com. update in in Commission, results that company's the our forward be cause currently will remind uncertainties to today the like which are and difference posted Risk material will available affect that projected results Securities from any Except those the Factors in statements. Exchange we that in could

non-GAAP measures. may today include Our financial also comments

achievements. be the to found I on press which fourth the will most for are quarter website. directly available Additional Soma ChampionX's GAAP release now this details measures presentation quarter comparable to our fourth discuss over turn on can call, financial to call in our and slide reconciliations

families and Good us to Ken Thanks our Hope I'd Fisher to everyone. to you welcoming healthy. XXXX team. shareholders, you, safe stay analysts fourth welcome Thank continuing our our today. call. to our for are to and I'd employees joining your our like like morning, by quarter Byron. and start earnings

Ken know, our and Board this having he part February team team. strategy last on a understanding on previously three to of as and We're the President excited you to As Executive served as role organization of our Directors Executive joined already and deep Vice businesses, our have Ken having CFO came of Xst, over years. our

winter Now week, this and and storm left past states parts of without the safe millions unprecedented experienced of Texas water. neighboring people power an that drinking

our the as customers Our to we storm. recover communities work support employees, prayers and with the are all from and severe winter

our recover operations. teams and been and Our minimize storm own to disruptions have working to customers the diligently after our

transformational year With that have delivering legacy what and necessary they've while sustainably a so, an merger take first for was performed fourth our turning I turn ways organization a how other year how any to our pandemic, economy and protect performance our to as the helped been of did employees our steps they our the what let that, our In of worker truly And employees experienced. world a moment that our to our ChampionX. backdrop health our full unlike essential quarter our the unlock let energy quarter Which take since in am, business to most customers needs. Before our to and of of terms proud all energy XXXX. has during the and employees we me results, will of the to in successful Apergy was company our global our performance. Against who has remained priority well remarkably second XXXX. safety record legacy global in was express of important the continue me many just safety industry

near-term fourth transition. the results global outperform speak the environment positions how against the us well quarter the of financial to of combined both long-term company during business Our energy the and portfolio challenges strong profile to current and

the slide execute our production a continues as always to our our North services. our in synergies and pipeline start realizing X to the cost leverage synergy value customers products global of our opportunities with revenue and lives We targeted we and of full and of Page suite we employees, technologies, our customers, delivering in shareholders driven as recognize well Star deck, company optimization On expand purpose of improving organizational communities. of continue offering the combined footprint of as the

four customer infectious our to an culture problems Now we as and well. improvement our see more in than continuous being relentless stakeholders committed very technology delivering company solve serving impactful and having of and employees, crucial operating principles our and differentiating internal external our ever, advocates, being helping

reported and on global culture, continuous of well employee how which principles. periodically culture participants progress We employees. what committed they feel As and employees to improvement we conduct on XX% what and to recent culture participants survey about employees need We employee key aligned get company of that advantage. feedback we well part as concluded had the a the is we're to our engagement XX% that a purpose global they operating I'm company's is survey rate X,XXX is purpose and sustainable I'm reported report also to issues participant just XX% very pleased of our the as to feel the and feel engagement we our upholding feel about doing report of from our competitive company's that and surveys gage improve. pleased operating

carbon slide their received customers reception and with goals our introduced consuming a this you motor you'll inch on A design through customers. This deploy has results achieve take that customers economics. improving our X fourth production innovative deck Page of their will We shortly. less the as customers and by develop in by recent help continue new helps the objectives. example to our This ESP Ken their helps half see reduction wells market. increase technology of technology from this quarter financial our five great power. important, the to we our XXX% much Equally technology

in fourth adjusted double-digit a North $XXX operations I'll international power both and once our American consolidated new our by quarter million positive thoughts. sequential our of cost delivered experienced the again at full opportunities. We generated of share revenue flow million. In fourth by cash illustrate and global high-level We're free results first and the We So million $XXX the encouraged growth two robust each promise well our of portfolio and company, revenue the quarter. during quarters as the EBITDA. just combined few of as of strong scale enhanced synergy $XXX

would sequential All of first quarter outlook. now posted drilling our positive over discuss like segments led to call Ken technologies the turn our fourth and to segment. by I to our quarter our growth results

everyone. Soma. Thank joining us. for you you, Good Thank morning,

I'm that excited leadership say It's the CFO me purpose on role is let great company ChampionX talented First, to with time. very and take be team. great at ChampionX. unique, a that to full driven a team

reflects for Second, ahead. this results for the basis to to who provide transition. during know appreciate to to adjusted a getting Board year I of personally I'd not comparability. support my Jay continuous analysts, and business best I will with contributions ChampionX investors our smooth I'll years over for better forma I Jay three sequential worked comparisons. also refer and pro on and be for me days weeks like the his his and service Today, the forward and a to I've believe full Nutt. look We yet to metric to thank next EBITDA performance the operations. few on year-over-year commenting met

X, seen up Geographically, contributing revenues in and up of were by top cross Ecolab. our As XX% business segments experienced $XX XX% sales revenue to Included XX%. of $XX strong North sequential our we growth line quarter on supply with revenue or in both all America million sequentially increased fourth XXXX of growth. million internationally Slide quarterly $XXX four million

those not from other and agreements the segment. transaction under As these perspective with an earnings post-merger our with calls, and margin We these with on sales allocated our associated sales revenue mentioned are associated within is statement to cross EBITDA recognize do sales Ecolab on financial the corporate agreement. prior

of continue approximately expect merger We sales for the these closing. the three date from years will

the in volumes increase the EBITDA For net $X.X a variant to of million sequentially adjusted of favorable four quarter was was loss quarter higher $X.X businesses. consolidated of million, the third income increase. quarter, fourth driven a GAAP This by all our in strong delivered sequential $XXX We million. XX% primarily

invested flow capital of a cash maintenance to in free $XX strong operating flow delivered the integration free fourth also flow operating during A earnings primarily Cash XX%. related ratio activities the sequentially robust expenditures million improved fourth some and we to the of generated and million performance. activities working $XXX revenue $XXX In quarter from period. We contributors quarter, cash of capital for cash strong fund and requirements. included million during

For the to ratio. approximately of and XX% transaction flow year million, related cash XX%, We cash $XXX ratio we full generated or million free free flow $XXX of revenue XXXX, revenue merger generated $XX free cash a integration excluding million to flow of at expenses. of

X% Automation Production segment continued up the of note, volumes EBITDA Geographically, The the and million North quarter. in driven revenue land experienced margin segment, & by volumes. seasonal sequentially XX% spending Production business increase sequentially quarter international continued from recovery levels up Turning million grew US higher up recovery sequential Latin was the customer international American EBITDA low Technologies $XXX was XX% to on X% mid-XXXX. sequentially by was customer Technologies American in revenue due while sales of generated increased Adjusted improved driven fourth increased sequentially. revenue orders quarter. third the certain spending from sequentially $XX strong Also in XX%. Chemical the basin. revenue business North was to segment volumes, higher American million third stronger $XXX revenue Profitability higher digital adjusted as XX% versus X%

a greater praised cost focus structure customers to leveraging efficiencies. drive improve digital As on and solutions

modular up increased was their with fourth XX%. fourth strong segment segment adjusted expect EBITDA continues of quarter XX% execution The million sequentially. margin adjusted EBITDA our through fit-for-purpose quarter approach PAT time. of PAT We adoption $XX

leverage a from from of million primarily PAT for which resulted the quarter. by you'll quarter sequential were in third margin $X.X results our XX% driven As recall normalized was helped volumes. non-recurring higher of in margin by The improvement third items

much $XX quarter drilling sequentially increase technologies, period. increased during fourth strong improved inventories. million US quarter. outpaced a And the the significantly read demand Segment revenue the retail US of increase in the as industry restocking fourth customer which during experienced saw to count they we active Moving the XX% was XX%

rigorous continued $X the return the million sequentially the $X control. by activities. driven sequential in drilling EBITDA driven chemical up to expected, previously for items of non-recurring merger million fourth increase was by positively Current $X higher completion was was laser volumes $X.X reserved $X during by and higher as fourth focused technologies and by $XX million the was sequentially Segment of Merger an construction EBITDA well quarter profitability million, during synergies. quarter to XX% we remained quarter Adjusted million, of synergies, primarily cost quarter quarter adjusted increase As improvement maximizing driven global from the the segment. results also sales third were a Reservoir volumes. revenue technologies combination million a which impacted related inventory. fourth on

presentation Slide are the place integration synergies. capture as cost We benefits X summarizes in to in well all program coordinating office as and management and improvements company the across these revenue efforts. have activity deck potential a

our coming run We'll progress still months $XXX in annualized run achieve targeted front year rate. call, We expect in million merger earnings this rate targeted exited continue As million cost to to the XXXX at with within of $XX to the mentioned on you a Further cost we exit with third of closing. $XX expect annualized synergies million synergies. share to XX we million of $XX of our the quarters. quarter

facility and capacity. at our total end financial available million Slide Turning approximately including of had of of the We to position. year revolving cash X, the hand liquidity $XXX in $XXX credit on million

The operating As obligations Since the senior on X.X our times was downturn. have debt total merger fourth net At including X.X our the flow, communicated XX% adjusted to date, tender debt offer. December at another net leverage of pro XX-month combined induced cash we paid XXth. our Apergy debt notes of the continued XX, trailing stronger our to EBITDA during transaction. the pandemic leverage date. particularly forma the $XX legacy of million down far times is leverage, additional result we a million strong was One million deleveraging of we've would of as of which repaid enterprise $XX September via or merger outstanding considering metrics merger as point of the a retire been compared will on than $XXX quarter our a

highly remain maintaining focused flow capital and our free we liquidity. forward delivery, strong operating cash working management Moving on and

will capital cash free available We with a margin allocation to to one-time support term on in to to target long-term our near cash technologies and flow to framework to debt, the continue in approximately invest using priority leverage to reduce using our our execute debt initiatives of EBITDA. pay growth down high of excess

for We XX. Slide quarter. first to Moving to turn our outlook

impacts of those driven anticipated seasonal the in of by $XXX a revenue in international the land-oriented the working to extreme shorter and sequential cross million. change decline offset expect We $XXX our include range revenues The week's We're not Ecolab Texas fully the is range events, first trends Oklahoma. revenue primarily in typical with momentum operations This does and by cycle, including continued weather quantify sales in revenue last positive to cost. American in million businesses. potential quarter the impacts North the partly in of sequential

near-term catch in material of but with some seeing raw prices commodity selling They're impact as half inflation. process segments we inflation. pandemic We first adjusting some raw increases commodity strengthened mid-XXXX. and year have are the chemical and the selling also have in energy until lows material prices anticipate these related levels oil in margin field prices cost The the some expect the driven of up pressure versus experienced activity the

XXXX. previously sacrifices our We a our we've the benefits, downturn. address of productivity the address and during made initiatives and reversing cost as reinstating employees, the shared, appreciate actions. ongoing synergy business our we're employees certain cost challenging with taken actions pandemic salaries Additionally, health to to very temporary related the and Meanwhile, XXXX

We expect year-over-year we as rate margin improvement the exit year.

EBITDA million specifics million impacts. related additional expect we weather quarter outlook. in our the any $XX again first range also we of extreme slide, some this the For excluding to to $XXX On quarter first provide

flow, We expect the infrastructure revenue loaded front and slightly to of in the to services X.X% year the transition half of be confident cash XXXX. to Ecolab and performance that the free our with flow goal for to end We our needs exits year first EBITDA asset in [ph]. and XX% will be leased range for XX% to ESP we of the robust remain from maintain pleased we're CapEx cash support range conversion due ratio

in that back of filing. to call mention I like company significant process Soma, the in track in turning the to six Before a improvements would identified business coming also result Form financial This segment. in processes all XXXX on to weaknesses XXXX PAT XX-K effort our clear is the our and in corporate material is

Now back to Soma.

you, Thank Ken.

On on attention five of to third ChampionX? our call Before highlights to mentioned priorities turn we of progress to this priorities Which each earnings potential. your Starting call, our these that. deck. making I periodically our to we're the taking we're do, opportunity the and would so open better you Slide questions. strategic of realizing I that stakeholders like XX today on just we quarter would our together the update with

cost on synergy shared achieving laser cost continue XXXX goals Ken this you, $XXX good $XX remain million focused having million We to As our of with our annualized make synergies. exited of on realized targeted and progress we front.

opportunities revenue to continue pipeline and Our of build. synergies

addition, solution. digital indicated model development, solution We're progress see priority tangible combined continuing deliver our about our the interest making and the in employee deployment overwhelmingly We're company. Strategic stream. merger customer global digitally-enabled and to two, employees recently that our digital of survey of on fit-for-purpose accelerating value. good are digital In revenue that engagement

failure It's digital While software customers. predictive our revenues the our optimization X% analysis our analytics, XXXX. hardware monitoring to the in downturn. overall important grew pandemic in which declined our This to due XXXX adoption and increased includes and software of note, products software revenues by related indicates

revenues grow leverage the In in XX% revenue. fourth revenues. footprint to of global to accounted quarter, Turning non-US for non-US

to revenue artificial and expand Our synergy combined and teams as chemical leverage our lift our relationships. pipeline continues offering prospects of

lift by prioritized plant initiative our is continuing from build capabilities we're the Argentina. sucker JV this An artificial our addition, rods In example country. evidenced shipment first in in to of of

Strategic to very four, international continue opportunity. number building continuous We the remain growth enterprise-wide our rigor. priority excited about is improvement

As continuous improvement our part of journey.

We have established excellence focused of operational a lean principle. practitioners of consisting team expert

CI high out experts the to We build will organization. the to within help these deploy opportunities culture impact

The they flow. efforts CI to of expand portfolio increase the strategic to sustained Our margin help for priority that continue us driven across cash growth. evolving last us help our productivity enterprise and eventually

by and fourth quarter evidenced third our quarter As action.

We pay sustained concurrently down evaluate to debt and opportunities free target cash use we That leverage to our the towards across through for to flow enhance to core growth market our transition. continue said, energy continue will capabilities adjacencies our position ChampionX's to level. further energy natural

towards framework. In have made further addition, developing our ESG progress we

well for the Our set production-oriented assessment results look be industry opportunities deliver and to our and ESG is ahead we shareholders. with our well and provider performance to is strong the underway work continue our technology about We're ChampionX excited for we're to positioned global a company. a winner in financial long-term soon. priority you forward communicating

driven in activity the international XXXX by to We the expect second improvement year solid and be XXXX American momentum. as of another half activity in gains of performance North strength

us to Finally, today. who with I Jay acknowledge is a want moment to Nutt here take

Jay important thank and from announced, with transformational industry. a ChampionX to to year great I with several here life. been resolve our and us a business the to period for challenging to ChampionX. I'm want environment. standalone publicly this years a second and as for completed for in traded and during team. our Jay his has ensure thank call over focus your smooth all the shareholders and last open agreed of through transition. As graciously privilege remain But challenging we the at customers, quarter question. Jay. and Thank be contributions the next merger to later With these all to of ChampionX our us retiring passion our a employees successful want for company Jay of I partner a such personally previously his leadership of continued trusted will has became organization our in he the that, best It lives unprecedented our improving and around wish dedication, me you, chapter our Again, employees, to I proud of a our efforts your very world ChampionX communities. him during for is would like lead energy the

your Anderson with question Instructions] first from comes David [Operator Barclays.

Your open. line is

just other expecting a you oil which importantly, more bit next want chemicals standout global to this months production international XX Could the about with start any Latin region the highlight I You'd are guess business. regions over to internationally most talk I you? the And as to improve But recovers? performance did really American. quarter? the you

would thank seasonal an that is would call seasonal in this it so see chemicals sequentially trends QX. strength. across the much as international the the recovery. I improved I I pretty technologies say international call production wouldn't this you. David, regions and all board we

Latin the across QX, all sequentially America. strength regions So QX the led we by international from saw board to in

The performance includes strong are The Caspian. international single-digit see to start includes as regions. walk recovery of other so saw as and in see Middle respect we Europe. high bigger question East. we growth. performance in Russia This in, Middle across where we we sitting the growth the East strong where saw into we then With regions This XXXX also all your sequentially, we

followed will the Middle be in see think America. and Africa we'll areas East, I by West Latin where

that's the margins wondering going side ton can have normalize going of production margin I prior kind just are Production it lot of assumed with stay just on. a going we where we maybe looks into the a then be ton next this that we're was But if going and higher of looks looking Which our synergies structurally to looking kind a further is information bit We could think information of will don't that historically. kind the of profile. year margins out. side here. comment chemicals. what true, of you And like be of you at And the like chemicals If business. don't reasons If behind anyways. in little have looking not what that is forward a true, that? peak not It but just

also see some me Ken the to we around here production ask cost thoughts let you make I'll Yes, how chemicals give margin. so comments. is so But him

as some So of the talk clearly it about the beginning margin we be - year. of calendarization have in will would in [ph] pressure margin the

with and typically a to into price some But EBITDA over The the due of believe helps first period synergies also We XX% portion the the production about combination resets. truly business cost improvements, talked as volume cost absorption. half of time plant the year of this chemicals. material improvement raw the the can good to in we inflation get a And comes of synergies margin. the synergies, the longer

would this better year, a will second half margin So of expect exited year. exit With QX. maybe this the than we we

further Ken color? any So

their seasonal industry more the The prices up and volume to the as basis. they in share the No, I lion's raw it. get on think of inflation response and synergies that's material

their the to rate versus see raised year should year XXXX. second improvement end You half and of margin [ph] the

But of Soma, kind little if I one there. follow-up add can just

little is it? out. further than thinking bit before, of isn't XX% by held just it higher You structurally was That

From a productivity yes has it. with and that improvements to synergy got contributing benefits to the that. correct. That's do perspective, lots volume the volume And equivalent

in us coming margin we So realistic a feel years. very for EBITDA I think the XX% is target

you. Thank Great.

queue Bank from with [indiscernible] Chase your of in America. question next And comes

Your open. is line

a XQ. step sec. It decrementals just He talk the in guide. actually XQ heavy Sabella Mike Chase. I away maybe for on we wondering was like It's about had looks could to for relatively

us some of coming if just some anything pieces, was able kind then and to of there on are Are of that touched You cost then talk XQ? quantify there synergies. moving are help you pieces helped just there XQ, kind some off, and about could moving the you if back the one

Mike, with expected. we want made clearly we XQ call seasonal was market was international very PAT, to strength And respect saw we I remind also, a that It better in helpful. than we to kind our North we QX end we call in a weakness. outperformed gain and had own of that, weaknesses share improvement seasonal expect and said had we year exhaustion any American activity would But the the holiday saw. in holiday our budget really

the was sequential our growth saw You in PAT almost XX%.

I volume helped us really, as really So EBITDA. our well on over that leverage think deliver

we three as the PCP segment to in So I with that well. see that the volume QX, factors as say walk is into decline. decline also our particularly and sequential international in lift One normally would artificial the we contributes

aspect out. start and second Ken indexed. prices price is of just talked commodity The the inflation about commodity our PCP, of normal we function of contracts raw a our which material a to the and that's as function is and are us improvements working pointed particularly inflation It's that's cost many - on this for in price

was those a between which raw it's and a talked the about and there's get And cost place. time element reinstatement reinstatement. working cost improvements then and third inflation matter benefit when the our price material So in lag we improvements. price getting of always those we And

world. a I the made And that made they rallied sacrifices? think also executing and with pointed Who so performances. strong we Ken and was employees out, all some sure proud our I As our well around are return teams the of of

we're in looking the exit for better improvement which confident some price it's to progressively we we in a right think to of of and be the temporary us margin I even productivity, make we're the improve the reductions that first half we had. sure margin exit the salaries the XXXX, But offset the reinstate that thing and see will than the and margin and XXXX. very impact benefits the you we synergies, will forward as some half second the should

just then And a thanks. follow-up. Understood quick

you So target looks clearly at reduction, you you two are of us back talk that like thinking you the year. cash maybe will It or you pay half just debt. we use returning Can one-time also just two down whether would targeting and this through to consider flow below that get free debt to or least in about steps options dividends us those cash about talk can buybacks how to there know shareholders? next and you're

as we looking we've consider always we will to leverage we We once to our a for Mike said, capital a which one what the a reasonable time. which get are, return to target we're said, And is for part committed along the very for and energy balanced shareholders is includes that, that. at on allocation going we're project our pathway We're with a we also also and there. looking at as the of transition. have growth teams adopt

of those pathways complete we as those the transition. outside about chart for engaged growth have you'll world more out energy in hear And resources We this to projects.

are to balance over allocation get ourselves. one Implement the then pathways our for we which things along leverage return growth. growth which growth portfolio that, sure seeing to target pathways have So we're times, at capital upset based good in we the to the of with to about that can't and some the the shareholders make in feel to in on energy pathways investing to transition. and We includes

that? more anything add to on Ken, So

question the I we'll think sometime you get in that's was the think when XXXX. leverage target think and I more like to

last and so drop first comparison the that, the strong in If first quarter XXXX that EBITDA we'll calculation. versus leverage quarter we recall have you year

gets to put the on that time pressure So will glide near little to in XXXX. one us your probably a term path in point, leverage. the But some

Understood. everyone. Thanks

queue in Pickering question next your And with & George Holt. comes from O'Leary

Your line is open.

growth different in strong revenue really a before few that quarter times. production was fourth and the The

for us? in you help could to there first But first mentioned that top is So that the about should line there. provide the headwinds in that Is you any that business of XXXX. most in quarter I'll that expect we leave the most the thinking and international pressure the just quarter see revenue, quantifying

it our every seasonal this George back from is, varied QX to year-to-year depends we it how to see we've in was, There see portfolio, international phenomenon It is how is But right. is right? much and in the at anyway most this decline. varies has the our business issue seen, analysis QX. Yes, the So strong X% right which business and there. on a on it and X% chemical to strong looked went QX how past again from a you from the depending technologies production again seasonal year,

because a the right. more little can that this we we had, is issue could QX bit year So a But it strong I and that's so performance of see and say. be what year every seasonal it

the curious of to very as helpful curiosity and me inch color PowerFit strong respect [indiscernible] intriguing But commentary on numbers seeing drill want anything. the or increase questioning thought just and you those resiliency you I And Soma probably some of how you're you could to then efficiencies lower we've opportunities portion trying casing output on curious - with half might That's opportunity market the then and to any any broad-brush to presentation. But if a into this and was of five on AFFIRMED the that the struck system? out don't how Just often and speak an run hear. be? realize of strokes arise interesting and the what it the get

customers team brought product this wells and inch and popular innovative in - very half our our reduces cost. it really it's are Five new a our drilling We completion which are and really a because design. about great excited for

looking the operation wells mentioned of at improving to of So and XXX it's production just first have technology year have more goals. reduce footprint. to going in all type But than introduction This what popular. start - we in get customers saw you their as in are carbon we It's increasingly helping customers we think carbon the well continuing our is not economics. also the already slide the of

which with customers at So pleased I we're technology seeing we're think and adopted. adoption great some the very with think pace really this has been our I

Soma. Thanks

James ISI. from And Evercore your West question with in next queue comes

Your line is open.

some cross had success America in good you like it Soma, selling. Latin seems with

the success now clear, I'm - products like we easy in on to looks next that not easy It maybe to sail. a easy But company. seems synergies had how kind Your look combined can two some or are should with of probably any for if a curious I region what context you occur would belt love me represents it in quarters that so to with color clear, that the was. hear provide. you under

the look when opportunities. we pipeline James at of

opportunities, qualify - really which very good our a assemble works have a team the have process them. the We really by they team,

to of really to right? a pipeline that we stage gate going And is what see the are hot I in have after continuing the we kind Which process So right a total where them, opportunities of they're are building. and prospects really it's So your set now. point, when ones know, good pipeline assemble. prospects encouraging that

that the recede. related feel pandemic I situation So as

think I we see materialize. more will opportunities this of

quickly with through come - of internationally. smaller but stayed we've seeing in they're several We couple They come through ones. of big Permian, had particularly wins, particularly in you we've and them are

of related a uncertainty the receiving. So feel pandemic I it's matter

opportunities come of think through. will these most I

the digital customers and Now where call it production. we optimize ones their the lift to help we're artificial what clinical doing and

large call also three customers trials optimize are help - bringing to three also and that about their currently their have the interest about We going these these as customers together with and pleased so production on well. in we're its

quickly by are encouraged these hard it predict. let think pipeline. it me way. We're I always come? will the put But this to How

enough. be over And of your the equipment any you is seen expect? in the that should color [ph] we maybe lot so, then given Okay, or to and process fair that could But process on situation Lestar last context technology and or your unrelated what run going going how How used we've the with question. Texas restarting is week just here.

we're three week after into storm. Again days that the about

our as basis So slide wells seeing we the this automation in think We the particularly what as what we're think and we're on I a on is, production preliminary that. side lift. again customers artificial mentioned here restart the

will volume increases. we're the recover potential the I be workover was a and rig we think able there that watching to activity

a are incremental be March and online. some the in a back there to think particularly we some back to bring maybes to will increase have pump, think parts customers [indiscernible] broad starting a wells replace we type I as that lift and for of where could lift opportunity customers the expect opportunities artificial our bring activity and well workover of string

feel QX. feel, be So March respect could tied James in that may some we why With I that there we be to recover to chemicals, activity. of That's some we it uptick to because production production. last in volume production automation able in feel,

lost We sequential in to feel expect we'll completion, impacts. So able there the unlikely drilling to a technologies be it's will be drilling QX like from growth technologies that probably some volume. I drilling And our QX. have our to and recover still

Soma. Thanks great. Okay,

comes from Bianchi your question with Marc Cowen. queue And in next

open. line Your is

where First questioning to we count equation you the storms get first some But just kind beyond the get a look here. of of stays there XXXX. there any just had quarter there restocking? could from we lows where I the where as Maybe from the effect of following there? take installation the drilling catch and of Was where about half. recovery were in a of the the of catch think business to flat first in line sort activity second aspect out be the the quarter, around obviously of in nice first up you we of revenue of you'll a pace fourth be in and and there's from at quarter go where completion we equipment then of up Is have business if a if and of automation if or normalization lift sort and production rig up in

that your of think business thing. the production same sort You would does automation

and years, you back right. So last Marc, quarter if the of going to recall fourth third

As production capped six-month. month-over-month saw sequential shutdown through and nice and and all the improvement We a We growth. wells we saw that saw that QX back started coming sequential XX% the with online. recovery

of wells feel back us. behind improvement online bringing that activity that we type is So the

So from here that on, can I think it's more the completions driven improvement spending and incremental happen. maintenance

So the storm aside we quantified set you the winter winter impact. which yet. it still, if haven't impact you if storm But the American, aside North set is

we January, continuing as technologies at production our look could saw in North that level we in activity automation see particularly in you America If January.

that we in hit storm commodity But do the think the strength winter again, So prices. of February. the I

online automation sequential as see regroup customers production the think think back and that market bringing I and I from that technologies, continuing in perspective. we in a improvement start wells the will completions activity our

the do particularly our new little digital that and will that our We aiding think a gain out would be the with also products opportunities more continuing share growth. Now digital. sequential bit start

like technologies XXXX I So that us feel in set automation our has that production from well, perspective.

continues to commodity robust. price a the half stay, second Now

continue we'll to activity completions improve. think I incrementally the see

Thanks direction where just you provide to perhaps, might some have us to maybe be within very what discussion that any looking ChampionX portfolio a the seems. is go talked to transition want and it something pathways Soma. early give it think to as you could Where these exploring you Thanks. and you're that lot, it's might I But has that I now. days energy about the know about? so application to

Yes, no absolutely.

three different types of I exploring. think there pathways we're are

transition. to is, So existing respect energy what within opportunities our are the markets the one first with

of to customers carbon of E&P's on So reduction decarbonization here and was goals commit market are and continue carbon start idea some the around as spending they those. our much of how for announcing the probably already money this targets you reduction saw lot will

And our customers these given we're in have where our with the combined with technology real digital. that production very oil we active their a chemistries, large chemistry we think how integrated and our have how carbon footprint there particularly process. reduce shared Starting companies I this opportunity then technologies portfolio. before, with

the it If well have, digital extends you production at as - optimization. equipment, we emission emission as look and one control, the products of management of technologies the life

decarbonization So opportunity that very our setting that a just already we we're existing and ESP for within one we like market, up [ph] technologies into about the that's talked play is and feel well pathway that.

be The that you market and diamond before see is sciences. our I the applied have we we shared second adjacent existing with have; can technologies how to pathway

in we of other we're what energy are and will how work and so and the pathways. transition accelerate platforms oil at I more can have of some deploy at we our think technologies proprietary share we'll pathways may element I the about analytics have, can used unlock is vertical the how mentioned portfolio, third have and And so to digital we the look that that's say, outside into to doing and the and we movement. our in and we're if that value continue I you see the when some capital those gas. and sciences portfolio that diamond digital hardware the we it what looking And to more pathway that - be we

looking we're into as So those pathways well.

we're pathways the for transition. So these are at type of energy looking

Jay That's great, thank you good and answer. appreciates luck and going thanks the time for the really forward.

comes And Voie your next in Fargo. from queue Wells question with Chris

open. line is Your

boundaries impact weather you guidance. the $XXX million to this the to set if million for curious compared some help of can $XX Just quarter early

early do qualitative to too that's I said, it's Like that, gave some commentary. why we you

there's to it. be that think we right. Production about I will how able recover, a technologies automation Here's chance

production it workover to about the I tied Production As volume market. technologies from we on and can a US think increase March so revenues consumable of it's the is their the volume kind given you customers since our you use forth. would get chemical is, - know get and activities it's a of a it if and And so for way daily thing. feel

production the the of extent you about US. to of can been volume lines, of kind in curtailed So week along shutdown production has think those parts

but don't about respect business. one recover we just technologies, that's the think think With activity. that that mentioned drilling to to way in I have will it's week momentum of loss as it. good I So

to drilling to So million to million deliver. I to a million we impact $XX expect impact a to the don't technology our $XXX $XX see still million that major as $XXX major as target.

chemical I around I customers the it primary lost will thing would technologies volume our think out. don't production be think make the where

dilutive which oil compared to think margin maybe If then bit surprise they dilutive you if production Okay, thank a with chemical potentially the term you. thinking the But that US, be my where seeing goals? prices would little a the get US production accretive in forecast. are. will XXXX, technologies And or be to growth could in compared I to outperforms happen here. Just international? Is are margin longer they

by again think are right. give US specific basins. things nature built for application, as you the to the higher us margin particularly margin oil of and higher those don't are mentioned because what the will are details regions you of America of of when which I specific sands there Offshore, or tell we've the We margins you, of deepwater, nature tends to North But because it, around application. be the here's

puts takes. there and are So

that in US going say really that strong dilutive will growth add I wouldn't it. have opportunities so synergies necessarily also the US But also we margin. some in productivity to to So will be the the US, on and

So I growth dilutive. US wouldn't the is necessarily say

if just and one in. Okay, I thanks could one last, squeeze

hit to there Your run chunk $XX for mostly the big on million XXXX come going synergies. to there rate XXXX? left remainder is in the that's or Is going in

come exit will of Most XXXX. we it as

G&A areas again the is, in second the coming supply So - know chain, as you the opportunity. it's it's we from half some of for and that reason

most it will come are in so in progress the half. those second of So

of I be But it through Ecolab most we of get XXXX. will to separation exit as come of think, we in it some still XXXX. most go XXXX. as There'll part So should the into

Okay, my questions. taking thanks for

Simmons. from queue comes And MacPherson your in Ian question next with

Your open. line is

to thank on wanted you transition to hello to question Ken. I'd I with pillars. energy and But Soma also to Jay start your the like on follow-up on

currently with your well? business. as raw an I that, R&D area materials been out an Not an for of your be imagine that The area is that there R&D with that imagine to commanding chain, I were the Ecolab. But [indiscernible] would leveraging activities regarding opportunities. runway your first that ESG for coming at one existing supply improvement, this probably unfolding that's significant and point would more have feedstock chemicals would regard reining some market

They those No, very I group mean technology opportunities. resources, stepped up, our chemistries Yes absolutely. of we including R&D chemicals resources technologies. stepped have are we've as say we as the big well new types a engineering technology chemistry effort focused like the within up, stepped our our things up when and now, green I R&D. on

chemicals, have towards with you beginning uplift a this well materials But the cited as side? some the payroll. sort year. course you require? in You normalizing as with does terms some in of pathway of that And squeeze cost business raw of also what want term if persuasive What is over near historical through the experience lag your chemical of passing your the raw material that margin

Ian. No,

good a job does because this over of these really and through. team over it and doing technologies type of they're chemical Our been - experienced doing inflationary very they've in path cost

it's to typically, lag a you'll lag. on the does four typically a of between see months three four that type to forth? the and So about customer so months and on calls contract. So depends and What contact three for so

QX full a a last helpful. out know your that's then Okay, I was get if wanted of it's thinking around free late. the EBITDA year? year, there's free from in cash flow cash change any for conversion guidance or me, big refresh flow one this to And just result, Thanks.

I'll so, it. Ken Yes comment to ask on

XX to used to as increased year it you we Ian actually, teams execute say well XX XX and those. XX last continue we've know to to year last we So increased to and on our

But XXXX. on to I now we bit I'll so for one, give to color into it. I little as Ken XX feel XX think, And a it appropriate more the ranges maybe walk ask

XX. year the I to the for XX is think guidance

the and bit the things level. may than Ecolab little a maybe CapEx transition. the little help I some see pressure working impacts XQ to higher think capital then quarter [Indiscernible] because some first on in you a that

overall capital in and our baked of return I that high into but think well as in allocation. shareholder of options So it's growth as is appropriate thinking guidance and leverage investment terms very terms

Super. Thank you both.

from your Gendron question next queue in comes Wolfe with And Blake Research.

open. Your is line

and lift artificial ESPs. on is first specifically My

pertains the damaged exposed Texas. if replacement to in versus that the ESPs degree wondering, of newer some mix costs to lease lease sale set happening the sale a fleet? versus forth could any is it you as as to whether And level of technology what's result of lease. the Just get Are you your

question. good Blake,

call. to I'll Jay on So is the since on it. comment ask Jay Jay?

Blake. Yes,

shared proportion have to in still a base pretty pull directed of the at then be of revenue into provide sales. repairs So we've to so lease And back Well we about down you XX-XX still or that to the as assets making those customers assets versus before trying get necessary ESP those parts We're know, in least. we lease that more operation. high been responsible mix terms we've sale. as are ChampionX replacement for we'd sure as at

some is Jay sounds success commerciality thanks the and sell some the the happy helpful cross customers. real given I and operational My together the constraints had in It second of some opportunity. to about IOCs. larger retirement. some NOCs trials with the make which That's given volatility logistical think and sense, customers smaller like of on and the of better question you've large that some When

I in think of having an every type individual for thing of procurement.

bundling? could one, able sell as you are same you do salesforce customers customers? that optimization source to the with both So doing the wondering, technology to large to change result way How think a train they large production the number forward moving what potentially especially at of you're the time cross your

key our at think accounts business. call I we strong chemicals way this go a very so technologies the we about the Blake, management we is, have what team,

oil companies. the each accounts of integrated So what large for is particularly we do the

team a focused important is artificial is lift What customers. you as the to are We because a with aspects depth it the we an possibly expert team management is, –given and doing team. have key conversations the adding technical we to manager account the are have

account selling our portfolio to an So artificial lift this to key whole add we of now so fully expert capable team is about portfolio talking and customer. that or whole that team management

opportunity the bringing number two lift us opening one. digital number Step that's real I together. combination artificial for opportunity, of this technologies chemical and is, the So door mentioned

the I in the door opener real the that's that. see - because think value is customers really

And the us. for in part Q&A the was sites of so opening trial I about doors early talked it the all

the the customers starts that's So to that process. we how demonstrate and value

for much so the time. Thanks Understood.

at time. further no questions have And we this

everyone again quarter your Thanks our in first Thank to continued forward we to ChampionX talking for you and on you. you. earnings look interest Thank call.

you, disconnect. ladies gentlemen. may Thank concludes and now This conference for participating call. today's you and Thank you