Innovex Downhole Solutions (INVX) 28 Oct 222022 Q3 Earnings call transcript

Company Profile

Participants

Erin Fazio	Finance Director
Jeff Bird	President and Chief Executive Officer
Kyle McClure	VP & CFO
David Smith	Pickering Energy Partners

Call transcript

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Operator

Good day, and thank you for standing by. Welcome to the Dril-Quip Third Quarter 2022 Fireside Chat [Operator Instructions]. Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today Erin Fazio, Finance Director for Dril-Quip. Please go ahead.

Erin Fazio

good and Liz you, morning. Thank third Welcome fireside XXXX to Dril-Quip's chat. quarter

issued release be and news yesterday financial site. Our Web statements can our found on

to we cause assumptions. of for the future materially. during this and Web involve differ statements. reminder, site course of performance actual our statements will risks factors SEC number call, and and These guarantees a of looking review provide that a not As are results discussion a could forward Please the conference of filings

As be earnings and the measures that, you Smith operating GAAP other income turn David know, reconciliations found of of to non-GAAP Partners. Pickering call I'll release. can over to our Energy in With

David Smith

analyst thank My quarter want and remarks. you, morning. look I'll turn at is you good after Energy services Thank over our name to you. And prepared opportunity chat. Partners. forward third for I Dril-Quip's Smith. to to host discussion to I'm this say Dave I Erin, Jeff, Pickering fireside the oilfield it lead your

Jeff Bird

quarter a bookings pricing. and the David. We believe the this Thanks, been trend year items the discussion $XX not at far pleased and in favorable the today. of did quarter bookings There to Look result range the with those the headwinds nonrecurring the $XX of mix high on that end our were those also million. was incoming the having direct, so quality expected expectations. million to the expected of as improving of $XX highest quarter we the a our the margin of with meet million few results in were results. To transitory order That are to be forward said, Yes. incoming

the obviously benefit that's income coming quarter a We quite in cancellation bookings number expect The uncommon frankly was Dril-Quip. muted by at this quarters. to future

number We this that of would I've this size, so been the seen five uncommon. in and is I've But quite this quite tenders to customer QX due outstanding bookings range here, think exceed I cancellation the tree a the timing, high. bookings. only of large expect could years QX third time number to

As pre-pandemic recovered indicators as average such XXXX, to have really quote and forward look value levels. we tender to leading volume

capitalize that to well are into among clearly several that discussing and Latin America is in to order that positioned continue accelerate year. offshore includes on trend a Brazil Arabia, growth what We We we're believe and Saudi constructive will forward look next key excited the to about, really markets others. market

back it to So with turn David, you. that, over I'll

David Smith

I market drive guess maybe if has feels could we the so the positive for and really Great. Jeff. looming security moving energy like recession backdrop the with some concerns. Thank there's in broader energy like start pieces you, macro many play outlook, for it

viewing hearing what current on about economic from I'm you're So how environment? curious the they're customers

Jeff Bird

Clearly several the things really everyone's are the Thanks. over mind. you last things on internationally But been road back on Yes. two that it's to get months. as point great out, look, two

last key of So or I've markets months. visited over all four the our almost three

from most fold. really customers hear what I is I think two

point for very a that believe candidly, years. energy provide pointed as they're been those COVID your serve tight really First, there's of will reversal areas markets. of few And you a underinvestment a are several frankly, the to next world today. They the years. in the frankly, China optimistic things on almost quite recession, combination, for strong pretty but out, about last tighten Quite would activity of over security. systematic I understand zero foundation only simple in all And increasing

mean? was that said, Brazil, in capital first for prices visiting they're at thing. I economics. And but means their used the factoring really the there. does looking they continue oil significantly exact That investments. having is pretty it's discipline, into thing constructive looking customers words think So second the been in to when I maintain That's lower It what also really resilient are

I to oil of $XX think $XX them shooting are a price. for most kind of

lot being scar there's think and downturn a the tissue from just conservative. are people relatively last of I still

David Smith

that sense. have they're about regarding in over Yes, it's you changes quarters? past customer noticed their of but any makes behavior one a lot just behavior. thing the mean of actual couple what Curious, I saying,

Jeff Bird

more think confident If I in they're their becoming anything, optimism.

just that, a business around the Petrobras what conversation think a lot we're off I good shift a a have result is change And seeing to really that is of call we're really we example. more a shift as other as use of as standardization. seeing well a as orders,

If you have placed XXXX, we these Petrobras right a 'XX, in away go wellheads. would back huge and tenders, bookings 'XX, 'XX, for huge number in have time

call do year. it a of more Now what they're off course which year, is to the small a be it's to it's going an over I'm I'm of doing tender, this MSA, how and then to going going

a horizon signing So more short year. on call are big as to beginning for, more the opposed people a just right of the of I PO MSAs think some the off term little and bit up at

think I a situations. little bit downside them it more those protects So on

kind So I $XX comment not of made the protects unlike around to that their that the $XX economics.

an themselves also trying standpoint from as to I they're well. think inventory protect

David Smith

of and tender any Petrobras update had maybe the were where again? at outlook works. back that through your and Petrobras, it the maybe when on kind on if you first might you just come progressing And on Wondering order

Jeff Bird

of already development. in So XX and is systems. year. off that we sitting About XX earlier of exploratory. called MSA XX wellhead the backlog. in subsea those those were been got It the has half was of were

called And in between year. other off backlog. sometime QX and then this it XX-something XX-something QX sitting call will the So be

year tenders might -- little a then there, visits is another drilled wells early the five next we XXX expect And next tender then and tender quarter, year, as year during two The at if my of next getting expectation it's come this So to out. end it's whether quarter there maybe next have they're years. could first into we the spicy come the off. fourth called lead expect you And over more on going to year. or or as out but next

definitely for typically tenders, generally it's is a market a XB thing. they our fair So always typically split of get on look, -- those XA, it They give tenders, the we type us. strong them. tender, do and those share And

pretty optimistic So we're there.

David Smith

favorable? picture That's where maybe you and seeing great. activity have big I'm floaters geographically I seen see good just count, you're guess, more where your opportunities the rig really offshore some on specifically, fastest, we curious what jackups. and maybe momentum, ramping is with looking

Jeff Bird

about and key visited these and the really three We're three markets, the investing to last Brazil. America. So in months. three I've are in investing that Latin in we're excited investing we're Arabia, really investing Saudi We're over and six

Let -- go story those. me and is the a just of different three little all on

team amount well for turn me of all line more we're response ground if I with in in as expanding stocking them. at considerable months we're Aramco. couple in spent our investing that looking rapid Saudi, there, I to speak about boots let a programs of was adding as and on and the time market. Saudi ago roof at the mean, of three I just So a look, in region and

has of outstanding there of service terms done and team quality qualifications. job improving moving in an the First, forward

challenging see results. but to are we're always As you there, qualifications know, starting

this our Saudi. of orders For quarter were example, related to XX%

going We're that will to to be that way, Now choppy. that's market. every going we but see not continue believe that penetrate to quarter that

ground Aramco Second, the with years. to supply Kingdom. to make to stretch there we're right over And the we're that coming is working expected the in the making growth Saudi going chain in the on them supply investments certain

I out We then think hanger the last at by to of the XX. team. just to position ran largest the thing upturn. liner shout this the Saudi the well take in is a will in us world advantage XX-X/X And

couple always turn nice I there. see we've and that's facility Brazil. weeks manufacturing unbelievable there, I Brazil to right terms there. their went is to So personally and region. same And a is we in If the in of in job This wanted had ramp-up, ago, just of both a where now services I ramp-up was

not It's a We've ramping wellhead that of market served out just it's So up. that the new facility. always facility.

or really business. TIW time one we downhole I own is think nuance tool the this didn't the

in the next over wasn't for time, with downhole last We we'll great visits but XXX using years, some the portfolio that had be that wellheads great mentioned five tools. our customers So MSA. there. Already

is though about there. what the of I'm subsea We actually presentation. went to in liner are about that meetings the the one them the the already there. of running excited your of give value funny, life It's tool about customer that, excited turning business, customer when I downhole as doing downhole on slide customer hanger will on their talked a PowerPoint hanger our there. tool, shows I the really easy actually improvement they're actually on to production, But makes And XX% kind your just showing wellheads liner

look, stocking there. ramping So we're up programs

You were a higher well. America for market That then And the Guyana. CapEx really help in tools Latin the saw market Those us, some last as running quarter. is America. little -- address Ecuador, that to Latin Mexico, is Colombia,

fivefold tool Just Mexico about has Look, last business several the a in over downhole that. grown years. few things the

to going a received then Guyana first a quarters. downhole run Surinam but hanger growing the orders So our follow-on got would we in days be order that's expect first there on our really market. on strong first believe we It's subsea strong early but And ran market. market been system a And recently. in and recently the liner downhole wellhead tools. side, coming always we tool we our there last,

where are all We're key three So levels we roofline making kind and investment need it it's It's and in that those, those threefold. that of programs need we running really where really looking different it, we're is we of it. need the at. stocking where tools markets it's investment

David Smith

mean other… are if XX% surprised liner told subsea me been your not guessed is you have would have wouldn't with XX% trees. I or were a big I orders hanger I QX there Saudi. order, this of

Jeff Bird

not. was the subsea it was actually It on product product side. It the subsea believe side, on actually or

been So that Saudi Saudi, year and orders, to big strong get nice But order tools. on large tend you right. downhole a in installing you for the that chunky spend market then place has product next these all so downhole they always tools product

order zero but for and So of quarter question the products, -- actually the get booked your one a trees, was type that you'll thing, tools, quarter. to not. service we it actually We then or in believe peak it will on trees subsea actually revenue and downhole

So this not from is a bookings lumpy number that that's standpoint.

David Smith

turning hear expected consolidation? guess and maybe if competitive the you're I We'd any dynamics back any given the just changes seeing landscape. some to there, stepping to love changes Well, to potential

Jeff Bird

business. large that you've customers wellhead see relates the we dynamic that. it towards the about the one from seen to see Chevron on balance operators some EPCI just side but operators I strongest other see doesn't that. spoken competitive in that to the BP quickest the people, the that. the bundled we that able order type Clearly, guess larger I've affect is dynamic. But the tree so are that how those those house. bundle. tends in. invest cycle. coming Yes. awards sheet, before, are Petrobras to large mean, side does this I lead of of always does it with outside as be does things orders the We large reiterate that wellheads to to tree And the

They're to as an the to back quite come interest balance sheets to They're into tend inflation. second upturn more starting market. the of Their customers influenced to they're in And just more come much small strong the by influenced much be as to Our market. by midsized be into recent rates. majors. not the customers. They're tend kind

looked and perspective, small just with got player. to you is that one sized medium players. million now tenders give we many medium haven't quarter that open have million those open the So We've sized we small, in yet how at with about things $XXX right awarded this a tenders of $XXX to those been

land. when But year. from those will the in fourth it will can to those of appreciate a and some to of open you've gets slide in of tenders, into tree got So quarter it's where much that standpoint you kind next book tough some going call

Kyle McClure

leads to of at bookings also are there bookings guidance of QX. XX see in of sort XX%. to could Which year full We upwards bracketed that XXX XX%

David Smith

where could levers customers that you widely on right? And to to responsive topic. inflation give So any smaller what pull Curious is mitigate mentioned the inflationary inflation, us maybe pressures? Dril-Quip a impact? You seeing can more this color discussed you're on if

Jeff Bird

services commodity the do saw we other amount inflation we moderate started of lot Yes. that that areas well. it we is around I I mean obviously earlier think Obviously, a a things year. like to on the purchased. to forging I that in inflation as think saw the compared fair that,

business. as far nice passing along downhole levers, a our to is the last tools that look, over of XX months. customers job They their As shortest cycle XX, did

of one prior strongest did earlier, a this quarter was quarter $XX incoming to mentioned this our gross I bookings, margin quarters. things the million looked As was this from we on of compare those margins year. And how booking standpoint that at

Now some but able being along nice mix, price is along clearly that also able that a a to of of being pass is to mix, fair We as had chunk inflation right? pass favorable well. and

Kyle McClure

in our scheme We as the new quarter, rolled out would guys to refer plus. what inflation a pricing

line forward. margin gross the in up pick that see going you'll So

David Smith

you. how And you it the probably over impacting pretty if it I specifically, guess maybe environment, is interest given for current your opportunity pursuing this and rate curious significant? I'm how viewing Dril-Quip? presents any to balance moving you're Kyle, sheet see

Kyle McClure

Yes, a floating in in environment. rate to better versus debt especially this it's position, net net certainly the with debt be position cash

you we cash some higher out quarter, and split to take cash this If to put of some the out. short We rate our started of some environments. advantage equivalents investments financials cash work days term face the to XX beyond of see and

extent. that, yield With continuing the advantage raising chasing of the to XX ECB, out to just we're central number rates, at a of basis banks some rates the Fed clip, certainly of there taking raise but points

beyond policy chasing out investment less can some maximize XX to at we're point. yield we’re what there of since to than pushing out course, months, days, our try this six So we

David Smith

well, year? your this strong see had earnings impact about really you Can how that US And talk the other quarter? rest to and just for switching had think dollars mean, on I another against global the the I quarter over currency. you foreign impact revenue currencies. Maybe that's of

Kyle McClure

depending krone, FX million about to , XX% the in quarter, year-to-date, revenues XX% for the are hit I the Norwegian The the a got $X in against was mix on quarter impacted $X the in and reals, hard out had about it QX, about pounds, of We've which we of quarter. dollar. coming really think us Brazilian our million pound in down pound given think XX%

but have we're dinged to currencies, the it whims of times go the I you believer front. So on times out and beyond mean some sort sort this FX a good of -- some bad quarter you’re some at that of market, in to taking actively as relates we certainly think continues got to if as it sort of But of we'll the will, look extent, if reversion it the that.

David Smith

million? kind with can nice I target, $XXX that orders. do want to to to gross you circle step up to we If back in product circle back your really QX $XX say million did of

Kyle McClure

lower number the out end higher think end we on would you If we our the XX% at XX% guidance of XXX look are and that book trees that the if year there. XX bookings, to full imply of on

David Smith

confidence One, on us orders, additional maybe the So I that two give outlook increase? then and on in any you related third kind your second a have that the cancellation could and color for that just some of confidence rare questions. about -- more what's guess that maybe you quarter And on remaining color QX the one, event? maybe in

Jeff Bird

five number $XXX six including, Obviously, pretty So fourth kind that $XX got the the $XXX talked now. $XX five quarter. of right or that are -- those but million, the I quarter that we've right to depending substantially awarded the rare. million $XXX six tender right in could of higher, there now, at kind look be trees gets the million tree that go think in we tenders If of to fourth upside expect those if now. could look, trees of on $XXX we right? number open think, many or So having million in about quarter million cancellation, I how million about I inside We're

though. was For just us, perspective, give to $XX it million,

that in just a cancellation kind candidly, the project, of project for was And got was it, $XXX they the think didn't work. it the across that industry. economics entire million as I into cancellations

I it think actually hole. dry a was

pretty why generally type We are So see of that's those those happen. rare. don't things

Kyle McClure

would had absent just have that, mid-XXs. gross obviously, we And in bookings the

QX So at up we the if view our a It's step-up of sequential we sort XX%. flatness minds, at the range. end it's low not end of really in

David Smith

for sense. million And million trees the imagine you've orders got back 'XX. six Not I I'm of you anyways fourth but looking little about going stepping those five official or like. I probably hit in outlook ask -- the just good on to for to up might the how recognize $XXX a healthy open some small it's the perfect tenders That sets you're $XXX tailwinds And of quarter, but to order for makes tenders. thinking operators here. given outstanding this, early to a just it in guidance, If 'XX with look what

Jeff Bird

I'll sure. we that. our cycles. to until guidance doing customers complete tend Look, their our They're give Yes, color. just now you reserve budget

into went will It's -- that, I look to we levels, Latin to as as well Brazil. start a already to be some by we've which be work activity that positioned capitalize offshore led led by talked We're in we continue really little actually place value to But to happen. quote nice to to be a believe next before. in market. regions things led about. constructive we compared will We're yet. orders. capitalize doing turned on where going the to by clearly two we accelerate think there America will orders and were that it surprised ultimately It's there the going tender that, we in by put into to going be really about haven't pre-pandemic even I right? -- the have I for to more on tenders East, specifically talked a Those nice lead volume we look, to indicators, got The going the that recovered However, at to to Saudi It's the of that, volume see Middle quote well. lot average tendering as leading and were are to able And as now forward, looked things continue us year. we that.

adjustments footprint. got call, investment. will previously manufacturing do as talked making in come we're we believe the We've the an that remember, earnings may you really in annual over to to but of will So We've we well. that that We position us start about February. 'XX, do course

plan full year to our is kind give of that. on So guidance

strategic profitability already more further We'll place. call. broadly improve that annual putting Our programs initiatives, in we're that in that talk about

Kyle McClure

it view guidance point all giving I 'XX. Without would a think 'XX, constructive/positive -- constructive as into signs we to

David Smith

of of see margins? margins be, you what those here? from for -- to look you I'll really of Sticking would been that, the service on maybe in and combined What give Understood, kind specifically, how drop outlook, have you and and And running definitely forward service that leasing see those strong. third worry. you in us a margins Could decrease those follow-up color noticed quarter, this And saw hearing margins. sort quarter? how progressing I do don't some leasing that there

Kyle McClure

And QX step at you So it saw an we into look up if down rental three a QX in see we you'll distinct on the came tick and the in step kind as in did QX. to work QX, so when QX in Really, had down. a will. to was projects quarter, to those come to rigs, our end those of you scopes tools quarter,

service we should profile at like. QX indicative you think margins, what if and that of probably QX would will, more I see probably being looking margin look

David Smith

maybe little tool QX, makes any supply and And evolving? that lower product bit That I in color could a drove how chain especially was the downhole sales those sense. hoping talk those we you issues the around issues see about

Kyle McClure

hung materials the systemic. orders it's due coming not a to in supply that issues, getting up Yes, of time. chain got some and out couple raw just orders It's really on

kind it very we in here. QX going So we orders Those on as view something from go would that transitory. out it's and of view not

Jeff Bird

It's a million basically. couple for $X each,

just happen material So right? pretty to they be orders,

David Smith

it. Got

something target? your of to $XXX that's necessarily like sound run timing the the that rate business grow million this So ambition would impact to annual that

Jeff Bird

Yes.

David Smith

Is inhibition that of hitting think, 'XX? I year that for, still of target kind end kind by

Jeff Bird

Yes.

run kind I going think about hope we 'XX what into of thinking that $XXX 'XX, a would maybe rate million. is exiting exiting be we'd 'XX,

$XX Saudi of business. late early a for per of So run the and quarter 'XX rate you'd about million I 'XX, Making in looking investments roofline. be now, kind talk kind

it see get be, share of the investment, ground, about think that our what probably just of should over Saudi is fair if we doubling activist be honest. on spot, you our market, the of of make our boots get probably there next share kind years. in And right that If the to the ourselves would in core we share is market half what couple market

Kyle McClure

mean the record mentioned million orders had Obviously, in out I QX. quarter QX. that they in Jeff in slid $X a

get they're $XX starting rating that range and year. million So hopefully, close of be $XX run next out will million coming to to

Jeff Bird

pickup Saudi see and Brazil. you'll really you'll in and see say And that the

David Smith

that. Got it. Appreciate

surprises there the or going for were you're were how negative about, flow cash forward? what anything just or free quarter. how flow any cash about Again, free expecting you thinking were Kyle, thinking versus So you

Kyle McClure

machinery call anticipated by capital really in going the in And that million million what's who Europe mentioned kind of new in into been out two quarter. investment had One internal X% the replenished flow of is of that strategically our and stocking quarter in split free we're went here have future. machinery plans this $XX $XX to two to where we've cash to is mean materials sort ahead higher About winter, working $X knows the I about million, what raw sure of got behind the make in -- we that in happen, million investment so foreseeable the forth inventory, that around X% Houston. investment specifically to so in and year-to-date, $XX for Jeff then due I’d presented about things. projections is margin,

And we we out receivable that the to out come be expect going of in which machines go around little tax expect million pay to QX, time. those kind the the that the breakeven making due quarter. on this that's just And largely cash in going drive free But specifically year, raw working plan of didn't investments continue drove we a but to that with so we In point call for to help here. on big materials. at free strategic do less we I breakeven expect to X original what this kind but have be in time, to is to year QX, capital point cash, really full expect in the in in than at

David Smith

You're not alone there, for sure.

and towards that So line top margin growth as how wrapping work see up, playing out you targets? do the incremental QX you

Kyle McClure

to to of kind pin XX% of mid-single We achievable. growth is QX. be is the mid QX with that few up feel line of in out last or here that the expect out coming in get just would Incremental so, met top We single QX. this coming digit a of like margin in very kind digits and range probably days team XX%,

put we year, full for think I growth. XX% line top out So

I still we based upon think sticking what QX. see that we're to in

here. shaking quarter up So that's the see I think we next how

David Smith

affects OFS it any of experienced out? too offshore is Dril-Quip of lot companies seasonality exposure. level Does small And seasonality or I with to know a call

Kyle McClure

a remaining we'd spike if you see. highlight from It is sort up seeing their years. really of QX Generally, level and most the CapEx of will, that typically booking pieces of end plans, probably is in of QX we sort we customers for bookings exhausting standpoint, are the highest

David Smith

operationally, but not… Okay,

Kyle McClure

wouldn't see I Operationally, any seasonality there.

if revenue have on time. tends our may and time we an the spikes, smooth about way to odd POC revenue a But will. if =the booking now, recognize that's lot to will, order half a of basis, You out you from you coming of

David Smith

the side on was thinking I maybe… services

Kyle McClure

seasonality I wouldn't front. cite any Jeff's on the

David Smith

And you And interest topic in on curious could move terms I talk increased what exposure? take? Any over I'll about it see want like of the I'm you an sweet maybe the where but if that that. to correct for thinking you're maybe maybe of if how Dril-Quip, also from did those about M&A. indications but feels step have size, about indicated wrong, I'm me opportunities, definitely spot Dril-Quip growth. inorganic you direction towards could in all market

Kyle McClure

It can in mean many about think take scale an forms time. to point a at as from need this scale we you more standpoint, get organization. I

engineered But in to we DNA products at looking sub sort highly transform would of sort as energy, of we're smaller exist going we're deals be deals sort that is specifically specifically. they at point I energy the refer from to large Dril-Quip anything at OFS of very that have looking So may time. of an at in wide -- company may to bolt-on is the it. in needs open energy, in but that are what time, talked what have exist outside which is And we to about last specialized, as highly to really it, aperture looking this

capability company organization. We front. on This through lot time. a is expect be really the of to disciplined we're building right very the priority inside to need get quarter need spending for going acquisition a bigger. Really to now. We get but the bigger We this

But think very we're to looking So very deal's be front. to not this something technology on go sizable a from I We're just do deals this for deal sake. going plays. be out very, to transform disciplined a going is to smaller

standpoint, two for previously. us allocation going is from this a number we've -- forward, are said We capital as

X for Number is great source. investment CapEx, internal us. Beyond to M&A going be

Jeff Bird

that is discipline balance our I to exit transaction one exit a with think investors add a always us to right? of the We're however sheet should strong maintain same sheet. So that no the going transaction we balance should a thing to assume we've important right? we're going bunch expect had, from to still transaction exit debt, a a with

I one. think that's

is M&A or and thing last public deeper seems number have conversations aren't the last the interesting meaningful held of over been been than like quarter. other privately companies year. might think it I the have those been much around the private they the have a richer more earlier quarter over There's the think companies. I And in where conversations

Kyle McClure

of think months XX the over going right to a come support a I the lot next or there's transactions six threshold here you're -- and to enough Yes, so. probably of to now of see sort these lot energy where

David Smith

seeing some discussion. some picture of to to bigger Looking forward back I those. to circle did want

at the rig picking start up moving count, then XX% is QX floater floating I was in is this at Just that ramping year-over-year. up starts low nicely. been 'XX. second the last Petrodata’s was X% higher quarter, X% quarter year-over-year, count, And QX If XQ from up up in looking it's work look

in activity. is this So looks uptick we're also like getting kind it with of twofold. where some going exploration And I'm

So between first, historically, and inventory remember I the could levels pace orders levels. of cause dislocation some customer your activity

of the step you're growing? count -- of the regards the So momentum orders ask I kind wanted or is this inventory level is this customer gross just quarter it kind seeing product includes restocking, with should floating up to rig expect, levels. with of If to what we some this

Jeff Bird

we specific I Yes. ice for I own -- to tricky, momentum larger right? to are customer If more right Because level say is at customers, Customer cost. like some or your inventory, say, question. maintain now, have of their some where our they I'd look inventory every inventory is this of level should but

systems is right of they've year, the it of and downhole divide not a just awarded, tools the about just the over talked between that business. awarded where they book-to-bill wellheads away. called I model, And off XX of call wellhead you MSA that moving to Petrobras, see to more course going if they the book-and-bill product of So business, more booking, customers So that MSA right? lines, call they but an moving more that's a right? kind we off. model off different to Subsea

customers converting gone to to bunch of yet. going I inventory and type more days is having customers the time, you're So going old think completely It's away. those programs. more slowly of not see of a over away at But

the would I as So much restocking this wouldn't a rate business. type say, hey, just run I call quarter normal it's as

Kyle McClure

is earlier. the all piece Trees as that choppiest about of talked probably we

David Smith

like sounds Saudi I'm which my still around. might some be large going trees forward orders, head It wrapping

been And the second was? narrowing lighter was question that revisit three which share between would looking your of of exploration -- I side whereas was mentioning the that pickup. of that old maybe for an very the into a the So big past could going assumption manufacturers of strong we development place part wellhead share with push wanted collaborations years? on of second then to maybe with a, it how right? I the The growth couple had of that I any had, [bundling], a have exploration exploration with Dril-Quip see segues b, the part forward if that of development the kind is kind and share story that

Jeff Bird

right? ingrained, that habits look, on So And larger are just said, address that there's right than and just it the That Petrobras, wellhead bundle But they in lot was if our interesting. customers that subsea you're been bundle buy else, development. wellhead certain outside they that customer BP, list bundle. are that's a bundle. buying say that. there a of There just having Chevron, don't of the exploration some to was share of it's to enough, mean, are customers customers. Even a everything I

a And agreements of signed so agreement result, as couple a -- we've collaboration a actually. collaboration

those OneSubsea, of specifically wellheads. is that's with One around

with that now bid systems been nature. are of not because number the jointly EPCI OneSubsea of a in previously have would have right we involved We that

Clearly, really tied the portion to starting of overall a that is wellhead just winning that's and ultimate tender OneSubsea success tender. the our is small to there So develop.

the see dependent as BP So us, but OneSubsea been combination buys the of tree That is they program, having directly OneSubsea. the we that. pulled said, first did tree. on stocking it's really That use that I mentioned subsea well ones their actually would out it with BP. was have from wellhead with one of

collaboration And water is aware, our around second agreement our tree Aker that's really we subsea shallow wellheads specifically The Solutions. to CCUS. you're related as and have with

OneSubsea that We I that think little We to BP expect a FID Project And The Aker thing now be bit. XXXX. that now Northern slid Endurance around to we get when work we venture. continue jointly about comment talk seven to number OneSubsea agreements have with of -- Aker expect closely we joint out tendering. collaboration work obviously We one on these questions a about that. subsea the recent is there's early the on I Look, feed. with

closely also work Aker tendering. with jointly will on We

JV, in both extent a to the that companies of only that to benefit those stronger Dril-Quip. serves are together So

business really it's now, there. usual right as So

David Smith

you great. of areas there be think will in lines explore or terms collaborations? to future further product That's Do

Jeff Bird

downhole talking We're as always not and think specific really most around about OneSubsea actually starting a extend may is anything those as as area About it cautious to that the Schlumberger, at the regions Aker interesting see tools. of But tool many in because world Baker goes unnoticed tools of it to the Latin companies. that's downhole obviously looking actually that And that publicized wasn't of nearly is Hughes, we through a supply formal one, to be I third there. but or they collaboration, well. And widely do the business times goes downhole Halliburton. about the about and America other three

David Smith

do, I impressive. to this switch I'm But your was before to an want question. getting to congratulations ESG MSCI energy over on an quarter, rating on transition from say going that A I

Jeff Bird

pretty and be carbon better anyway. of programs a around improvements it's last doing We've people To we have made I'm substantial actually spent job we we're a in around doing telling were lot lot of that. some that. of honest, things lot just but We're things XX reduction like time doing, months. of work the a doing a what

Singapore facility In our panels, every the got video Singapore of campus. solar I fact, on installed that building I think, we just practically on the yesterday

example. good XX So or And the months that's our a then publish next so. probably we sustainability report first will in

David Smith

wanted through any term? change about you're midterm, longer that you on efforts, recently Reduction transition deck Act? thinking the if passage And CCUS. energy there's the published talk I to how maybe with opportunity, especially of Inflation your a And in outlook your

Jeff Bird

not a to that's laying for we still just strong But us. business groundwork Look, the now, really it's that's right and us. think going about be

laying I now for lot right are and probably just 'XX people the that's groundwork in industry orders that of in a think start the 'XX.

Endurance I about the it. most side tweaks you tree I some that feed. project -- frame. in we're it So a [Technical of those shallow few that make wheelhouse, But talked to just on thing 'XX, small the Northern in a It's really a on There's as long the feeds right other CCUS. our Same a working but the think outside we're about collaboration of and fruition on coming side it's got, Difficulty] for it for 'XX well call to mean if BP purpose, in we've agreement we likely water time over nice with Aker. converting more well. we're time, as have making Subsea product to that the for fit that offering use wellhead we

David Smith

wheelhouse? be would Yes, that's that might also transition when of in that energy in areas other your or any I wheelhouse. say in Are interested be that your there you're

Jeff Bird

opportunities. and something that's about we're a our think metal too of core high energy the what across that But capabilities, really It's monitoring we're I Look, to in business. looking looking doing temperature variety probably to metal early And pressure, we're steel. those. talk transition is at constantly high

David Smith

switching the targeting organizational I you're changes guess to over to the -- the organization structure.

give ask efficiencies there I wanted for the plan savings look operational maybe of the progress us cost structure? magnitude And remind for years? adjusting of if and the structure. I any couple think the next cost could us you update to on the the and reducing of pushing you

Jeff Bird

of some are and structure about right a then flight now Energy of We're if number Kyle the on-time to started we benefits The decisions February, within subsea savings already those new in orders. delivery. estate dividing into aligned divide tools. But into So organizations better there's teams. let services kind making side. that in cost around you decisions. improvements as up making burgeoning and the customer of teams. making We're group, downhole are We're in will. We're see flight, those subsea that now in better being teams. a I'll we real those standing the starting talk investment We're organizational completely around products, things transition and kind of the things of

So the things starting to those of benefits see today. operational real we're

probably setting those days. to think gross We're formal those then but each next margin early towards be think will early I those specific starting work the year. And financials stood will benefits right targets I up only it's They're accelerate. for of now, businesses.

done thing is we've second we’ve manufacturing $XX.X made optimizing footprint. that The million And investment. just

that area now a campus in of starting machine to next in earnest year portion on first late think out starting I arrives with May here. material our We're clear really 'XX.

off all in end to So where is the if type here equipment you those campus we'll came by a of the go the the have and going fence year, things. and area signage to of

the in to were we that is that We've candidly quarter three We of at There's footprint roofline. last them So excited areas rationalization. looking well. were the get that we're facilities making really one starting piece in got other then around investments here sold And about as as listed. you saw.

just doesn't it all go one So way.

we we're campus, excess. well. we areas knew going other to make In as of the to going had we're investment. On Saudi the an investments Arabia, world, Houston make

a resources a simply downsizing, world. not the of around it's So more reallocation it's of

So things, those the you can of are three kind talk Kyle, about…

Kyle McClure

of get We're in marketing. got we on a both that in interest of not actively it. estate, the obviously pieces is in on prior PSAs Yes, we QX, of don't property and two end year here, here the quarter. sale actually we've under have QX about We've in or working the what Whether to or next sense towards cash But deal a we've days. would closed more at to lots purchase the around I'm right be talked now. or less on real the a the probably guessing. We XX agreement, we're remaining XX

We We for nicely. the run Jeff expect but news targets will out here. targets the the get We 'XX business. to that need moving the that's But organization. for likely to margin on if margin rating as that. new XX% need P&Ls product to sorted manufacturing us get We to February, will. equipment lines. more gross along We've there in be have take an mentioned want in We up, to gross you some need put obviously, externally. that, the time

of of year So a of a change. sort lot this has been year

is to expect cost own, 'XX we grind numbers what they these what established, in achieved be people what at gross would as will. own, you that P&L of some really for if likely businesses, We'll point to margin get the exit XXXX they But XX% there. We we start expect set target efficiencies understand up targets towards expect.

David Smith

And be path XX%? contemplated that can what might on ask kind to you revenue growth of

Kyle McClure

get purposes, no revenue have We our based flat. said we have for growth, upon internal XX% to planning said --

Jeff Bird

next customers the there's it that kind back made years. to around comment the to think We of wanting I earlier to goes revenue I know two growth over be resilient. going be

profitable I think we're the and that's that low we What which we in environment is environment make unquestionable. the kind now sustainable. is point, in sure very in to can of be we're want now, the

Kyle McClure

the envelope no teams, of, growth go there's that knowing activity revenue and assumption the you we're there we be. the that kind intention know we'll And Yes, will. if doing stretch some get is will hey, some to here, modeling But of the of and price. reflation get on of

David Smith

further. mentioned gross set in you know for want I segments. to margin don't any targets of the specific you that each I discuss suppose

Kyle McClure

to discuss here going we're unlikely, Very it today…

Jeff Bird

attempt We the though… appreciate

David Smith

give this to got me platform, I try. You

Kyle McClure

be, people some back reporting process not talk We're here, roofline and data but are there's happy they going to I weeds the year a that et in that dimensions, we where and get the understanding lot be But doing a need the of there to sort of financial some into some future. footprint about get point to redesign, think to the step to assess lot the got to we'll price too of think back of protracted that target. up, that probably The up get a nerd I reflation, get revenue that intention of stood got I it's materials there. at to we cetera, before standing take new guess, about it's site action a the own is we we actions external. But our talk get out is P&L sooner. some XX% consolidated is of us sort on to and kind we've taking get on internally that accordingly. now through that on it then cetera, basis, sooner et We've going -- But want folks a kind we probably happens what those two once we to be, to snap there. journey for get it market that

David Smith

scope proceeds sale there the you've of the want know do next initiatives those you've left are of Forge say be Not expanded might I on that be to And it. really sounds any trimming timing I be sales to good on greedy, for kind didn't visibility know the targeted. property this the but got conclusion two of pretty of was of if that or in congratulations that other I if the got future? some facility. it growth like some in is areas. sales could

Jeff Bird

Yes.

think investment, smaller I it's and we make to look we're the we unquestionable manufacturing a as going new footprint. out need

we'll next it, time our look of, really like to to I installed been out go of you kind tweak do when a been reassessment the if So has call do refine and that there, need everything again. think that's XXXX we what's

doing he's this, management the General around Although, I that’s out to of hard our all shout a that for Counsel think James Webster work this.

work of two divesting little couple happy that maybe of for take of unbelievable divesting we've the think conversation out he's bit we a I of I properties how how to think these, around because for right a But years XXXX a it's look now pause especially got much you much and work have should we'd time these next takes. campus, integrated on an that.

David Smith

about Okay. a to you want reminder. and your prediction? Jeff, my today all make were I'll calender one Those questions series unless fill world

Jeff Bird

I here the Kyle I'm Astros wearing shirt is going we his right now… and I tonight, think. game X, sit as like the in to Astros

Kyle McClure

the on. Astros go would with jersey my well. as got X I've and I

David Smith

watching up product ahead I'm them little a and the a for thought looking Clearly, was solid a play I Dril-Quip, sign. positive QX to bumpy. forward out. orders gross know was I in opportunities step lot of

me to chance Kyle, this with you thank giving Jeff both So quarter. chat the for go and fireside the

Jeff Bird

David. Thanks, Okay.

Kyle McClure

David. you, Thank

Operator

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

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