ChampionX (CHX) 6 Feb 242023 Q4 Earnings call transcript

Good morning. Welcome to ChampionX Corporation's Fourth Quarter and Full Year 2023 Earnings Conference Call.

Your host for this morning's call is Byron Pope. I will now turn the call over to Mr. Pope.

Sivasankaran our and CFO. Executive are and of today Fisher, Ken Vice me Somasundaram, CEO President ChampionX; With President and

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

will then open We the call for Q&A.

call, the slides our website. to will posted referring be we During today's on

forward-looking. projected participants results in of all material statements. I differ be that to some matters discussion that some other statements and uncertainties our the refer and you factors will are results these difference from a materially. XX-K filing remind of latest making a those we Therefore, that today filings me of actual These our cause for cause SEC the risks to could involve Let could in

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

comparable found release, Additional available turn most reconciliations measures I will over directly the the press quarter financial fourth now call be details to to which our our website. Soma. GAAP can on on is in

would everyone. earnings joining like call. today. for welcome employees and our I analysts quarter to Thanks morning, Good us XXXX shareholders, our fourth to

flow earnings to metrics was in performance of that margin expanded For of In ChampionX, merger free to of of since of as shareholders. flow XX% free converted points growth XX%, XXX momentum a and our and delivered returns continued EBITDA basis our transformative cash cash we XXXX capital strong by best-in-class EBITDA year we adjusted XX% XXXX. adjusted EBITDA our adjusted financial highest achieved returned XXXX, key in level our that

I'm as is earnings on our free engine. we about the which have day XXXX employees out focus revenue in for drives in customers' our and grateful generation the in financial and cash delivering that strong to addition, all beyond. value our expansion laser day for continued margin of and established In their excited growth, XXXX heartbeat, strong flow foundation I'm and to

#X. Turning to Slide the on fourth quarter highlights

performance softer illustrates Fourth and solid U.S. geographically flat year-end the the period holidays. diversified sequentially into benefits despite production-oriented portfolio. the during especially our of Our land drilling quarter activity, completions-related revenue was and

Chemical business, and revenue North Technologies sequential growth during Production high internationally the largest America grew delivered single-digit in Our period.

at Production EBITDA fourth adjusted is by business, X% flat what America, our the XX% growth margin quarter. in business In which XX% sequentially. growth our offset our was our was as driven growth U.S. Africa quarter in followed Our Middle ability fourth level and sequentially, America X% drilling ChampionX. in margin sequentially, at led East sustain in softer and growth fourth by Drilling region, activity typical the Technologies sequential International highest decline in strong by land demonstrates technologies to in quarter, decline was North automation Latin by production and Chemical seasonal Technologies in

Turning XXX Slide We to of $XXX We million our which XX%, of XX% XXX XXXX. $XXX than our from year. returned XXXX, capital invested prior is which basis margin adjusted year-over-year, growth adjusted in We on up points. generated strong return to of XX%, is points over achieved EBITDA key XX% and shareholders flow which performance of basis on cash free EBITDA X. higher expanded achieved over delivered million metrics

would And Adjusting Our and cross-sell revenue XXXX. for year liquidity normalized full RCT position Ecolab product grew revenues on in XXXX. exit, out some our point agreement exit to record to details growth financial in I strong full of key is year leverage.Turning X.X% low our end and highlights like with line Russia X. of Slide

XX% our internationally. land in Technologies XXXX, & in and XX% and business in grew by Mexico driven XX% Technologies business of Automation internationally Our business grew activities. XXXX, Production Chemical Gulf U.S.A. grew U.S. Technologies the Production Drilling

remain strong Our growing broad-based portfolio. emission confident year-over-year. in our by offerings. momentum in optimization growth business Growth digital We our momentum XXXX, continued and and digital our technology growth production was the led excited XX% digital in in continued

of accelerated ruling final growth by standards recent emissions the to business. our drive methane in EPA expect We

X. I would to Slide and growth resilience chemicals our the steady production of to Turning like highlight business. nature

to similar North you North the the intensity, year. from but see with as can gains. with the America, Internationally, and driven seasonality fluids As the business a produced chemical business trajectory to in total grow, steady pricing factors slide, exhibits America, as share growth by along during continues continues grow

activity during customer the addition, America, our by in impacting of XXXX build In half driven second growth had order inventory Latin higher comparison. unusually we XXXX,

sector. near-term our America, our the to service led respect look timing of generating optimally. be excellence. overall and pipeline XXXX expect continued to for we uncertainty cash our completions operators North are but gives ups geographies, performing earnings earnings and are to by Despite grow market year trajectory keep in constructive drilling XXXX. We and our U.S. ChampionX, benefit for There as land of As flow to the productivity internationally both margins assets position, spend to confidence their and with businesses, financial portfolio environment the we upstream activity, one the through that ability year XXXX, in support cornerstones projects of and growth production-oriented midstream across to the an solid OpEx and a which we expand increased view is entering of strong we certainly ChampionX us with and during are technology momentum, downs differentiate

the with we benefit the and also We seen when down, continue us us in this have goes quarter you with volume to XXXX. to Ken financial in markets results in our this years on see value but expect XXXX, allowing of capital We our touch allocation growth shareholders. take shortly, first details protecting fourth commitment our X of framework through let first of for creation benefit the me but to ago. tailwinds, will you to our capture shared

time delivered to begin of commitment our free debt EBITDA, grow As returning target we leverage we our cash to our regular flow quarterly with capital a we anticipated reached by initiating growth. over ratio through-the-cycle to shareholders on which would Xx dividend, net

our In initiated authorization shareholders. of cash Since part have commitment businesses. same around allocation time we our best-in-class pleased first and return addition, the cash a ChampionX to priorities portfolio that framework our repurchase generating shared delivered million generated XXXX, we capital demonstrates capability flow, $XXX framework.I'm early of on which excess to capital free we to in of over allocation $XXX comprehensive cash our the has say as share of capital-light flow million in

regular our repurchases. returned and our shareholders of We share free cash that XX% dividend flow have cash to through

to XXXX. of increased shareholders, to billion approved stock, fourth of Board program, continued our our to in our to indication an of an commitment ChampionX repurchase is As which Directors increase its program repurchase quarter $XXX the up share our authorizes of previously million of the an $X.X which to increase

In cycle. free addition, remain our of XX% are cash shareholders XX% we to into to dividend cash XX% of by our converting flow reflects least EBITDA flow regular generating adjusted cash increasing capability. our XX%, returning our the We to which cash free committed through to at demonstrated flow strong and free

our fourth quarter now call turn outlook. to quarter results Ken the me our and to Let discuss over first

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

points quarter reporting a Before to about results, today. our I I fourth total want year move and few to make

XXXX, commenting business losses. of this best beginning and basis predominantly comparisons, of fourth adjusted our For on losses review currency and EBITDA. the to We definition EBITDA provides the fourth a we reflects attributable of year-over-year believe consideration for were the adjusted more of Argentine After change operating OFS recent continuing with I be believe metric quarter the impact remove to devaluation of adjusted sequential gains the peer a will We underlying of metric, our performance performance to our versus quarter, comparative related the group peso. and operations. this EBITDA comparing In the revised FX foreign peers. consistent

reminder, our comparative we earnings exchange have in investors the guidance a fourth not To release. assist the revised and losses. any provided utilizing As our for peers analysts, include foreign quarter did market definition

business, revenue percent, international $XXX create XXXX up North up revenues X%. while on X% expected were As seasonal fourth year-over-year. our which up slightly on largest million, was Chemical based in seen sequentially was Revenue sequentially American Production in X% and XX, Slide operations, lower strength quarter Technologies

U.S. into oil holidays and businesses impacted. were field customers land U.S. the shorter-cycle softened year-end activity our As some destocked inventory,

increased As were a revenues revenues Technologies while down Automation fourth sequentially, Production down each share on North diluted $XX for XXXX. while strength. revenue $XX declined $X.XX the Year-over-year quarter customer large quarter in sequentially PCT Technologies American sales was was GAAP fourth American the result, quarter Geographically, X% Drilling revenue $XX or X% X% per million flat, international and North were lower Reservoir Chemical and revenues XX%, sequentially. Technologies revenue a declined third seasonal primarily XX% in in Fourth million America. Latin of income on to quarter company the net international the million and versus

As net fourth strong fourth quarter, delivered versus primarily the quarter higher was and improvement $X EBITDA the from This the In $XX capital period. million XX% selling $XXX very of midpoint up and XXXX. an points operations and increase on EBITDA of the proceeds adjusted million, over this adjusted quarter and Slide flow represented with net the our of in prior free drove of consistent million of our prices free The we productivity, income seen cash focus cash in XX% investments continued XX, represents consolidated fourth of the flow previous quarter cash XX%, ChampionX XXX management. activities and sales. million $XXX year adjusted million on asset Fourth flat cash of from from on $XXX a outperformance versus reflected conversion the adjusted volumes, $XXX guidance range. cost free quarter Higher were margin quarter flow and basis flow consolidated EBITDA. management from EBITDA. Cash strong capital million, operating of delivered third working

X%. XXX increased Segment million, year-over-year million, than cite segments, Turning projects Production sequentially quarter America the Higher to price increased adjusted the the comparisons. quarter XXXX. XX.X%, quarter selling prior productivity productivity Technologies noted. million sequentially quarter was by projects the revenue year-over-year. the third again margin Production revenue drove quarter levels from the higher Year-over-year, X% from with in the the EBITDA initiatives improvement. prices X% North and Technologies down I productivity of selling $XXX quarter down volume optimize fourth revenue segment up customers X% to X% inventory volumes by revenue driven year-over-year year-over-year points Automation driven sequential and was was down the business was higher flows. North of flat fourth decreased quarter $XXX sequential same generated Geographically, deferred cash period, and quarter fourth Chemical primarily and and the for third and of consistent & adjusted increased sequentially, as and will X% revenue up Volume our up and year basis American international seasonality the Segment our strong of XX% purchases $XXX X%. drove improvement. previously EBITDA in and fourth Digital business. and X%

year grew full improvements XXXX, to and on we strong to operational leveraging drive see the revenue digital emissions, For realize digital focus customer and XX%, reduce continue technologies efficiencies. cost

revenues higher EBITDA basis prior mix. Technologies continue future Segment year-over-year. down revenue in $XX this and and year margin the was product sequentially X% quarter, industry digital and seasonality million XX% quarter Adjusted benefit third margin XXX adjusted sequentially $XX favorable million, was to volumes up We EBITDA the mix. volumes, to Drilling EBITDA down fourth XX% segment versus trend. versus segment basis XX from period was lower XX%, fourth due lower XX% and on points quarter to PAT up the down was adjusted points expect year-over-year.

rates versus in our profile holidays. segment purposeful resulted of This but year-over-year product in the primarily The improvement quarter year and year-end sequential sequentially and driven lower higher Margin Drilling expected, benefit quarter, by prior this year-end EBITDA a by decline improvement with in productivity the a up $X year the land was Chemical million period and line million margin adjusted overall to decline lower EBITDA Segment low-margin in by the As was lines $X in in adjusted year-over-year period. in XXXX U.S. year-end certain the million corresponding segment. we X,XXX exit was slowdowns function experienced margin the a in lower driven up the $X Technologies of the year-over-year. million strategy quarter during trend Technologies this fourth in strong decline basis RCT profit the drive The XX% into EBITDA quarter, driven land improvements. segment count sales in versus fourth sequentially fourth sequential of rig million, activity $XX up $X the and business. as quarter adjusted the point million $XX quarter margin XXXX, the of margin exit a Segment EBITDA consistent to quarter included quarter, XXX prior down the destocking. $X lower to XXX was with last delivered over fourth points EBITDA lower fourth XXX million favorability. posted adjusted adjusted volumes basis third compared was of line quarter and a the product sequential the and basis in point revenues, fourth Reservoir was level. decline U.S. inventory revenue year. XX% in customer The basis for XX% XX% improvement was of LIFO The and revenues. point compared lower

Moving to balance sheet. our

on strong $XXX That in of our and alignment with shareholders. million to on shown XX-month December EBITDA. surplus capital the we to a cash record we XX, capital of is our of available a ratio allocation with X.Xx debt adjusted Slide $XXX hand trailing framework, level including XX, position our to As quarter for fourth ended revolver company. was leverage committed capacity. of the total million liquidity, liquidity In remain return At very the net

repurchases. regular fourth quarter, shareholders dividends million form in $XXX cash XX% During of million $XX flow of and share returned in the to the free of we quarterly

we continued to which the XXXX, our the program sector-leading approved doubles full our authorization. returned capital, an to of year shareholders. XX% size our Board $X.X cash to Consistent commitment flow to a of return with surplus share billion, the free increase repurchase For prior has

capital share free are actions In position. moving of and per cash in disciplined remain strong working regular our and liquidity by increasing on per discipline our strong demonstrate to and generation dividend quarter. capability our our delivery quarterly free forward. financial management, our These allocation, capital and $X.XXX We flow addition, to we flow maintaining capital confidence XX% commitment laser-focused operating cash

disciplined in March discussed invested our you driving on metric. Slide we at can XX, Investor capital as see improvement in and return and are capital on As XXXX continued our productivity our ROIC allocation Day, improvement continuous or

target. strong our XX% progress to making plus We are ROIC

points up year full year-over-year. improved the to ROIC For XXXX, XX%, XXX basis

we move into this expect beyond. We XXXX trend to and continue as forward

$XXX by forward outlook for Turning first decline revenue the With to range businesses. American our international projected offset we of Slide driven sequential expect in XX North the quarter, and seasonality, in million. $XXX our typical by partially million sequential to increases

we to we $XXX low a expect adjusted point EBITDA, seasonally revenue From range million our to throughout adjusted quarter, progressively $XXX margin starting For EBITDA the of million. improve of first the and year. expect

XXXX. guidance EBITDA confident and of We to capital we expect cash conversion to be delivery remain range Soma. the reminder, free XXXX. ratio our cash We our ratio of a towards investment weighted in half flow revenues you, to cash Thank is to adjusted typically free now the of year. through XX% XX% in flow the back free X.X% in flow each XX% A in conversion cycle, least at of expect and back

Thank you, Ken.

energy we helping industry, ChampionX's the and to way of the production most as operating our for the few a possible. at and and assets Before you. the sweet of leading places me positioning a producing questions, midstream their optimization customers spot call solutions open cost-effective sustainable thoughts in let share global us of provider value maximize the with upstream

XXXX businesses and favorable we for such, beyond. As in the remain tailwinds in demand our confident

of our focus communities. and us strong What around tireless thank growth adjusted expect continued and flow, let delivering further of sight growth improving pipeline you, earnings cash for purpose growth, employees free of of and our revenue us customers, to me confidence can strong returning that, laser to addition, you employees, high-return the ChampionX opportunities world the generating our your our gives our our all and expansion. from dedication excess earnings investing shareholders in is opportunities margin In margin, EBITDA line productivity of our continued With our for and expanding the lives shareholders. capital our X,XXX on

I me like daily. would for open that, the questions. inspire With to You call

first Your Gengaro question Stephen from Stifel. will be Instructions] [Operator at

year-over-year, we environment all in start in maybe I being X% Well, when from X%. slightly year North about what down the take, do XXXX? hearing thanks internationally How for details. growth with, peers think next I'd guys revenue about we've that to guess and been give America perform of your or maybe you some XX%

Yes.

go as me we So let our into XXXX. assumptions frame

international the continues robust, view activity, and we growth in market strong the it agree we activity. be believe expect we to international a So with that our

in as know, Second, you are spending. America, operating North to the expense exposed we highly

expense believe grow So are spending to thirdly, on very will we drive operating digital strong. production production believe, North stronger incremental the be product And will America we incrementally customers incremental in portfolio, growth to our growth. continue much focused as

business when for the Middle international primarily that revenue Africa and will be put for So Latin by Production you we will In combined in our half. growth. weighted America, portfolio Sub-Saharan probably led North East, us all us, together the our more business, with And expect but will incremental to America. second our growth then the it PAT be Chemical digital lead growth, Technologies

Consistent from North when expectations, have QX I our we gotten can improved look QX, the with America. to January, we particularly Now see know, in through at as January. activity you

business. incrementals starting we've point? reasonable that that talked on good years. production start a as the about of past, of in I That's about incrementals XX% Is talked over the we in that think Should chemicals And about you've then had I in just a last think thinking margins couple the Great. helpful. follow-up, the terms you've progression that

Stephen. correct, That's

Next question from be TD at Cowen. Marc will Bianchi

I revenue your ask course it well on several your wanted in because like the of in seems revenue for about quarters you did progression short 'XX 'XX, to over quite you of guidance EBITDA. fell but

So turning the you think you're I'm any lower away Is curious losing appreciated. Just Do that? perhaps progression for explanation be any if some it profitability business? would revenue high-level on share? there's commentary

for thanks Marc, Yes, that.

our American tend you is the Technologies, expected at driven Technologies Production to the North Production our growth in our with you segments, happened than in Technologies at frame, North in business QX in bit is guided. growing respect and little we Drilling base activity we America, in decline Chemical particularly came you expected largest see short-cycle when QX, strong in look where international shortfall if more our issues what and time some we we U.S. in Chemical look the noticed, you consistently can business, by So QX, our our QX our our business, was sequential as particularly a to XX% short-cycle have a land that. It probably segment, Technologies in Drilling

predict, tough are is we those, more with And short-cycle to are importantly, is we along those So say American to control. that ability very what what somewhat share to North focused some can Marc, But gains. productivity can control we and wanted what the on on I targeted the business. deliver efforts

flattish-type short driven to our of before, constant what this or despite productivity sometimes continuously down. focus seeing earnings DNA, that's heritage So mentioned this our by And be some continuous revenues primarily in what in drive because a productivity growth. industrial you're and a growth to cycle our drive there controlling from ability ability revenue, I've pipeline And we is softness business, the can is up comes where efforts. on

should expect you productivity is growth. drives that us our that a efforts delivery from earnings on continued So what

high EBITDA, anything I the related you like that XX% reflecting for at be seems And a some question might discuss Can unusual decremental midpoint. leverage, The first very operating be quarter all? other to the there's which at to that had guidance if occurring?

Sure, Yes. Marc, absolutely.

particularly higher would there are expecting One are an it driving QX, REC are is that to would the driven we what I situation. say decrementals. cost more So X things call increased in by freight I

increases price the so we will as put so those through recover we on Now and costs and through year forth.

cost element. freight in first the the So increase quarter is in one

is our to particularly as element than we some then growth. business is, And you the emissions in the element to know, particularly and mix continue second investments, be incremental tends support international The third PCT, less make in digital international, offshore. less to upcoming

decremental. So that also tends to drive some higher

prepared I margin quarter factors. our the we are those in guidance ChampionX. think point, for you first for So expect should as from But the said have XX% X comments, our that midpoint about is

to of should I you think expect kind through progressively year. the improve that

be of will of question from Next America. Saurabh Bank Pant

you you about, I touch Soma? on maybe us you know productivity improvement question. from to improvements pipeline contribution of most you then give improvement. incremental little there response of What times get to color equal, Is Can all 'XX. at? Soma, terms And contribution, What's expect Marc's what you said margins you kind a remarks year-over-year of an in productivity margin your a say broad on way think, on else more strokes, pipeline prepared a margin just you the there talked a and let's standpoint? can in in are looking in I kind certain several improve Soma, way exciting to to initiatives, that, basis,

are So things that just control? your based on in

Yes.

that thanks So for question.

put continuous in manufacturing you is, call improvement as them the our look you journey. buckets. So with a it productivity I lean know, One when X would principles. improvements, at We operate we

So improvement all continuous lean are operations of a journey. in manufacturing our

is the focused productivity call that that are projects, high Then what certain So improvements. projects. productivity teams top on driving significant continuous we drives on on improvement impact of of employees it, daily which driving

So let of you give that. few examples me a

first spend components. our one given particularly materials large is, and in in the raw bottle So

productivity or so forth. sourcing, on reducing cost so leverage and of drive through working spend, do continue So we reduce strategic have country teams that we how best on cost to and

XXXX. project particular a that's So in one

productivity. internal The the second drives digitization second have we that's element. efforts that project is And

our is and large technologies so improvement example, for chemical so element, third as forth. facilities our utilization on drilling yield facilities well The improvement in and as continued as as well

high-impact large type So productivity projects. are those

the how if us flattish. I should we incrementally answer environment the revenues this, our about the way even expect an should about deliver it your is, So so think of even you XXXX, think revenues flattish, question to more contribution in in would earnings are around to if are

to it. that's think So about how

follow-up quickly, on shareholder returns. then And maybe a

So very cash free obviously, strong flow.

shareholders your more You of in minimum That's XX%. XX%. than XXXX. least lot to threshold I a it's returned XX% of know at that

and So strong. it's got to but maybe, that, you is or be want on XX% refresh then side allocation maybe little very talk that, go more Maybe a Where maybe but us see just opportunities your capital M&A Soma than little bit monitoring things maybe business to Ken, and do through of to on priorities well. you emissions bit M&A. talk your on a the as

allocation you sticking way when at our disciplined in have XXXX, published to be which very that. capital much So look we framework, will a

in that, priority then first to refresh want Just make to high-impact organic to we sustaining our our invest that obviously, is dividend. we opportunities, sure are

increases. with opportunistically line we have free tuck-in in excess cash that to geographic that we repurchase share increase flow programs. type us, M&A bolt-on consistently we we will then third, will for said additions, additions, cash, type expansion before that our And And any deploy opportunities. any lastly, opportunities technology As said

XXXX. disciplined to capital we way which a framework, published are that. And that's us really you seeing allocation So in in our sticking

inception the see that. that. And you program, good our So can return example even of a capital XXXX, from is of

M&A a but our M&A the XXXX, on have we it's like in looking didn't opportunity, returned example, high bar at not we opportunities. we are you M&A For said, not we opportunities, as feel XX% because

it. So very we about are disciplined

shareholders. when shareholders. cash need returned have we that, we the And look inception, we to those our are our So have a flow XX% cash for at when of don't our returning free right you to from

a framework and allocation So disciplined to establishing and about being it's that. just sticking it a demonstration capital of

expect going should you So that forward. from us

a opportunities. question our with be have think respect to we They said it continue Now we I at M&A, clear strategic look before, type portfolio. And into has bolt-on as to are fit opportunities. on your to

it's can and say demonstrated XX%. for be be to we us, them. least again, have a look we that's bar But high we more. at more? why So Sure, Can continue it at it

your then emissions. question So, on

the happening the We excited in about emissions. are that pretty are developments

methane tanks adopted know, big is things ruling this you which of includes things As includes includes, storage gas processing inclusion which is ruling, the the the standards, like things existing on facilities, plants. final like change terminal, like recent in

estimates, facilities regulated regulated it the is regulated facilities goes to XX,XXX from means improving as in some facilities as which million much significantly what is now. by X So some

So we are about our excited offering. emissions technology

know, aerial you to optical offer detections we As to surveys leak from to everything monitoring. continuous imaging gas

have we full offering. technologies So portfolio of emissions a

So coming emissions way accelerated in an you our grow business continue to should see the years. in

be at will question Next from Modak Atidrip Goldman Sachs.

year you America? X, activity you Slide Can respect full for talk showed steady in cadence far. with you growth expectations America the so to North PCT the delivered has the North about that for the expecting levels are

Yes.

address of introduce ability not will North land Production continues produce fluids well combined with see to chemical continued business respect our is just total as in produced, fluids North growth the both the American a technologies, intensity I to as in Chemical production, new Technologies you increases. oil Mexico. very So but Gulf business particular, the America, the in And to think consistent in grow steady that, with as

bit show XXXX businesses still in mentioned, expect should that weighted. Technologies we business, PAT a of from expect But the the PAT think as with North Technologies And near-term half you So Gulf land, I and our the businesses increase PAT to But these businesses, especially be as in in to well. could our second XXXX. American particularly growth Drilling grow more Drilling we activity and respect in we in January, some given we to But activity other seen Mexico improvement and growth. digital given QX. around, have uncertainty U.S. lift the other expect to do type the continue little forms business of businesses, to

noted you the then emissions XX have at would some as technologies, you release in you customers well. there that now, And you investments globally mentioned look that also

mix quantify geographic pieces? provide like? on this there you a maybe to both look the way can does at color if those So opportunity market or mix point? What the some And is customer

Yes.

the a a predominant today emission XX the customers imagine, commitments perspective, of reductions. made there's So can large North in the America. of those they've you from set America is, And as reason in lot customer to are and public companies North more

So America technologies And ] a suite just of midstream picking, mix, all internationally so really right emissions independent, particularly And fit-for-purpose type types is they I emissions for in have so a it mid-operators, so in that's mix customers there's will it's large for is technology. portfolio offer a technology developing adopt grow. that sheet [ great operators, an a different and why North and really continues of really And of to Middle more see growing we can you're East. like opportunities it's us. we the do important great what not them. to them of can had when there

so see in we that coming the And continue grow. to to years

question of to market. is terms Now in around, way your there a quantify the

EPA, mentioned, potentially With the ruling final significant a regulated as facilities. I it's increase in recent by

direction. just period determine the will how movement say, me it's be it to grow that very a market will a of time. it It's multibillion-dollar let just in So over go, to is right but hard

Becker is Instructions] your Doug [Operator from at One. Capital And next question

than address played well margins as initiatives, by a points in last Pricing cost that. but EBITDA more the were management role up Someone productivity basis XXX year. as

year up you are down versus costs get to or if and pricing think last thoughts year? your this Just want flat,

Yes.

look raw be from we that raw, would our if pretty pricing to stable that XXXX I expect we and in price QX levels. at So the say material,

in to So expect to the stable. and say contributor another expect pricing way, don't a stay material cost the expansion be we to raw it we XXXX, margin major

play bigger will role. a So productivity

Now increases. our pricing, I like cost continue freight put through opportunistically mentioned just we'll to about

technologies. So new introduce as we'll opportunity we

will for be productivity So driver expansion XXXX, the volume. in along bigger margin with

And Got it. then seeing increasing North jumping some you're in January. to activity America,

Technologies Just Drilling restocking really on It's count. expand in bit that rig with obvious at on could that until going PAT get the flat the past, February side. all. in we'd know business doesn't certainly if a and see not I you a the

is Yes. This watching. we are carefully something

that does February and flow. pump in then this You how normally then get January and

think of in our I from an perspective, But Technologies, seeing nicely. those business moving from we activity good to PAT a continuing think Drilling bearings some are signs is in. again, I grow perspective,

in noted well. about our contribute in Technologies it's QX, the business. about almost to we additional are reaching of expect it XXXX. But activity so with watching trend. XX% in have we sequential And that And we QX some land in And far, grew and even Drilling that our America, to growth we of also now our business PCT as PAT seeing to XX% the As in closer But seems are QX. in But sequential seasonality internationally, increase to in in we increase from DT U.S. down. going the PCT, be in QX. a as North expected, in

Sounds encouraging.

have this time, at we questions And no other Please proceed. registered.

look interest your ChampionX, to Thank thank want to you. in in you quarter for you our I forward continued and Well, talking we to call. next

please you time, this indeed we ask call your gentlemen, Once that for attending. lines. conclude and for conference thank At you Ladies does disconnect your today. this again,