Forum Energy (FET) 31 Jul 182018 Q2 Earnings call transcript

Company Profile

Participants

Mark S. Traylor	Forum Energy Technologies, Inc.
Prady Iyyanki	Forum Energy Technologies, Inc.
Pablo G. Mercado	Forum Energy Technologies, Inc.
D. Lyle Williams	Forum Energy Technologies, Inc.
J. David Anderson	Barclays Capital, Inc.
George O’Leary	Tudor, Pickering, Holt & Co. Securities, Inc.
Joseph D. Gibney	Capital One Securities, Inc.
Sean C. Meakim	JPMorgan Securities LLC
Jacob Lundberg	Credit Suisse Securities (NYSE:USA) LLC
Martin W. Malloy	Johnson Rice & Co. LLC
John Watson	Simmons & Company International
Marc Bianchi	Cowen & Co. LLC
Edward Charles Muztafago	SG Americas Securities LLC
Brad Handler	Jefferies LLC

Call transcript

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Operator

Good morning, ladies and gentlemen, and welcome to the Forum Energy Technologies' Second Quarter 2018 Earnings Conference Call. My name is Hailey, and I will be your coordinator for today's call.

As a reminder, this conference call is being recorded for replay purposes. After the speakers' remarks today, I will instruct you on the procedures for asking questions. I will now turn the conference over to Mark Traylor, Vice President of Investor Relations. sir. proceed, Please

Mark S. Traylor

Executive any Good second Hailey. today welcome Forum Williams, our to that our and have include, present Financial we information our Thank and to implied Commission. with other Officer; filings XXXX morning, earnings Technologies' this among that Lyle those cause Chief update in uncertainties Iyyanki, Prady or call. materially quarter remarks us Pablo conference Energy Securities We or Mercado, obligation formal in Chief imposed matters you, things, are and Officer; law described may the include call. to Senior your to undertake call, our events statements. release in statements statements website. actual forward-looking night, or results expressed Vice made events, We questions, including risks forward-looking it not risk and during other earnings do reflect differ to of our ongoing our by Operations. or Exchange conference the future circumstances such The revise to earnings answers is Those statements. publicly that may than after President and and arise this involve statements issued any last available These from With release on

call call. statements Management may In reflects management's financial information the live the conference time-sensitive addition, best this of that include contains of judgment only date as measures. non-GAAP

our I'm Officer. available earnings our now refer call. Executive the our the measures, of release. call weeks be a For replay Prady over these to turn two to following website recorded. on to of Iyyanki, call is This reconciliation Chief call pleased will for the being A

Prady Iyyanki

current comments with going conditions. our Mark. market to overview I'm of and results start everyone. of Thanks, our this assessment morning, morning my second quarter an Good

initiatives. discuss few financial going Lyle our and operating discuss provide will the a will We our of on position, performance forward. liquidity growth plan will details Pablo strong and also

in solid was Our the financial second performance quarter.

Our gains increased growth revenue, resulted market our in basis American margins of EBITDA XXXX. share and XX% North margins. in strong the revenue XXX gains revenue. of Orders and XX%, XX%, and orders, adjusted drove new share introductions in market and growth product improved XX% to points team's execution first increased sequential half EBITDA activity, increased

Some highlights our of of J-Mac the are for received for quarter ends. follows. over power the fracturing We horsepower second hydraulic orders XXX,XXX as

the We submersible to extend bookings of Multilift products, continued pumps. our strong life and electrical receive Cannon of which

work-class and and recovery plus from Middle submarine Services an growing to well vehicle, order ROV drilling systems. we associated for set assets midstream the began ESP and for East for In Energy artificial and acquired finally, received a complement rig launch our take as land a our including and projects addition, roughnecks, as catwalks products. And iron prepare share. our receive C&J product market we in continue certain rapidly offering. lift of customers record as July, We second to Technologies downstream drillings Orders another quarter the equipment, for latest-generation from Completions orders and pipeline in valves handling consumable rescue tools the to

balanced nicely Our us growth. to positions achieve equipment and well the serving cycle of global markets portfolio across consumable continued capital

the midstream follows: Looking market new the and completions drivers global recovery; our international intensity. gains; growth the build-out; as service downstream ahead, are product development; finally, share and,

each on provide some color of drivers. me these let Now,

and results. are Our yielding investments innovation technology in good

wireline hydraulic protectors, DURACOIL uptake seeing as SandGuard of We coiled latch, tubing. wireline the and ESP greaseless Multilift such cable, quick are products differentiated strong our BOP

We continue strong be to we'll rolling which have products new pipeline of out.

due right a monitoring has in commercial share launched added completions, and of existing new the gains significant our and solutions our America for increased in a new initiatives products, With pulling dedicated products customers a presence service. digital market cross-selling an respect North regions. established acceptance new We diagnostics which equipment to number we've also of team, to

of share positioned market recovery. gains advantage well expect international driver, On to We the continue. we our third take to growth are

highly-engineered Subsea is equipment international our includes critical Drilling Our that customers' operations. capital to & portfolio

segment As in the portion quarter those make ahead lay the the recovery potential are Forum's segment. opportunities that of in substantial unfolds, half revenue. the to we second this international of has orders received a up again once total the The examples and expect for second the

will investments us businesses including valve expand East, to addition, completions meet in the In to international our and our allow infrastructure, needs. global Middle customer

and downstream easily take deliver on And and will build-out. service our global annual of This that its This advantage of activity to wells the quarter business Next, line replacement finally, our existing significant revenue fact by highest the is evidenced year, midstream of product level of our orders is XX% support expenditures. is second end approximately valves and expanding maintenance intensity to fleets. completions track were maintenance power for the performance.

not headwinds. growth drivers favorable without Our are

any in seen Permian yet Basin. not have slowdown We the

monitoring However, closely. customer our we are activity

As the are see positioned. where we to would slowdown expect well customers other activity increase hold, basins, we in takes our

growth are Permian will our and drivers addition, significant slowdown. In any help offset

macro headwinds, and other these to Lyle benefit impact Forum the will is address Our strong tariffs their mitigate cost pressures his Despite in response to environment. global remarks. inflation. these from well are and energy headwinds the short-term positioned

XXXX, to million third we between to $XX be million $XX growth we As to quarter range of of EBITDA to the look and in orders continued be revenue and expect the million. million $XXX ahead $XXX

take results position. you me ask financial to Pablo and through Let our

Pablo G. Mercado

broad-based company were of recovery of you, $XX or million Total Thank Good early North the market orders drove million, quarter. $XXX for first America from the morning. conditions quarter XX% in international our the Prady. orders. Strong stages second a in an increase improvement the in

And of bookings growth. The second was once three quarter book-to-bill XXX%. delivered ratio segments sequential our each again,

quarter foreign Results second restructuring revenue of provided a pre-tax We sequentially. the and diluted by $XXX the million $XX reconciliation other charges on of included these of gains. earnings release table our reference. million or million items Our in per an a increase loss totaling $X special exchange you for basis, was $XX for quarter for million offset quarter $X.XX Net XX% $XX million, was or share.

Our improvement EBITDA or XX%, share, & our million were Incremental by Drilling segments. special margins XXX net XX% improvement loss excluding a of Completions adjusted driven and EBITDA Adjusted sequential of $X.XX items. diluted Subsea in revenue, $XX margin basis was per was points.

For the before adjusted since our profit first was time XXXX, tax positive.

EPS a tax on orders will $XXX to Completions unable for increased we segment breakeven. recognize share, a segment, certain per In $X.XX I accounting or to However, higher North were results completions gains. was increase due adjusted of our sale. activity $XXX,XXX now million segment gain below America Completions XX%. our This in and market summarize million. Segment resulting X% in results to revenue a was our basis. $XXX share diluted million, sequential falling an benefits in property from was $XX Included

the valves the XX%. our inflation, segment recognition of higher record previously well of approximately $XX submarine XX improved margin to adjusted XX%, segment products. Excluding higher announced orders a was Segment due resulting included an XXX resulting another well States. This million, book-to-bill orders increase for revenue In by resulting million, from rescue Ashtead, increase joint from venture. set costs affecting line. subsea in X% points equipment offset to X.X%. United the equipment EBITDA products points million, EBITDA award, primarily was million, segment, or in of of The equipment. quarter our partially higher site drilling of due Segment sales improved line and a in consumable of in deliveries second of row. as production a site increase as EBITDA higher and manufacturing of XXX%. The primarily improvement ratio the million, of as basis X%. to $X.X $XX XX% increase by the segment the points million orders Drilling in mix margins product costs & subsea were certain East. downstream tariffs the increase and basis Subsea and by of steel subsea segment Middle Production processing our manufacturing drilling, Orders the $X better products. equipment. were as well were approximately absorption well a an of from of rentals absorption on valves compression lower-margin equipment sales offset new growth The favorable equipment capital this basis in XXX resulted cost improvement by Orders a a margins resulted lower capital of The from subsea for Adjusted increase of driven product mix adjusted revenue gain, was was $XX for an higher-margin start for revenue projects, $XX or sales increase production was EBITDA & in Infrastructure seasonal the partially in

EBITDA achieve will discuss of level. the cost and that orders With the are better the or we we balance results for at will position now additional that the expect our breakXeven anticipate I year. subsea Forum executing, additional about and that financial actions details we a some the

the remains in the area flow we us. cash improve flow of working over we strong the Our quarter positive support a half improvement second third $X capital focus efficiency. quarter. orders, the capital million, on track sequential be after first key are million the cash second to negative year, net we to This expect expenditures $XX an quarter capital of was in working free improvement another as for free growth Despite in the build in and

in property capital were equipment. expenditures by from second million and $X of the quarter offset Our proceeds partially million, $X sales of

the capital net year to million. our $XX approximately for expect expenditures We be

position Our balance strong. financial and sheet remains

the second our and was million was Our the debt liquidity was $XXX million, end at approximately net-debt-to-total-capitalization net $XXX position of ratio quarter XX%.

average million, been amortization in have shares. in expenses count the million second we Interest, share corporate EPS XXX.X quarter the were respectively, shares. quarter. million the Our $X would second depreciation diluted diluted quarter, count XXX.X the weighted positive share million, million and $XX and been and $X second was for Had

continue the international since to in We tax benefits. similar our XX% will rate at expect be quarter. remain levels that the estimate We in couple to over third unrecognized have tax quarters of we next effective this

on the information financial For more our our about please earnings results, review release website.

to the over some initiatives. call to Lyle operating turn discuss me let key Now,

D. Lyle Williams

Thank Good you, morning, everyone. Pablo.

As the the quarter, pressures. Prady increasing second mentioned, and cost in inflationary executed well team Forum output combating material our

with the improving free will our progress generating profitability capital and include flow. pre-downturn talk management. to Our end levels margins and operational EBITDA our working of impacting cash objectives through on some drivers I

We are variety on and increases recently more of products tariffs been have steel semi-finished and steel finished by and seeing on commercial by Tariffs industrial cost demand. equipment. imposed a driven

pricing. to We these and cost able through strategic have sourcing initiatives been mitigate increases some of

In customers increases. inflationary these and be limited that are generally, our more for products pricing efficiencies some to terms generating continue of new on to of gains our to passing

response both In locations to support lean cost result manufacturing our on margin on and have each initiatives lead impact also have a or price unit progress dynamics, our while of customers, leveraging of times of rightsizing implementing In our our pressures, our of an the This downsize reducing retained and the we cost we profitability these seeing In of a considerable optimizing non-U.S. and & margins. the production. the structure. actions further core number includes Subsea manufacturing As with further consolidate cases, are to impact quarter, cost expertise segment. our cost and we our initiated and to distribution Drilling these in our made structure. and capability progress we capacity incremental

these in Some XXXX. half this management focus continues of be Working initiatives in year will be measures realized capital team. We in area the for amount the end completing more second of a the savings for by to the key anticipate a of year. these significant restructuring the

have our drawing improvements, products helping Planning are also move this legacy to year. new improve in Although working efficiency support chain we capital increase further are employee to collaboration inventory. and improved inventory down These partners programs turns. and efforts expect are levels, and inventory improvement and activity quarter, with building we this incentive the supply us we modestly

me the Prady for Let turn call to back closing comments. over

Prady Iyyanki

and we closing, infrastructure North activity the have for The best is is for seen robust. drilling, long-term In Forum outlook completions since America Thanks, downturn. outlook the the Lyle.

the addition, are signs In international underway. early of recovery

sheet focused Revenue each question. lines interest. margin following. discipline. remains the improvement, for free first we'll team executing the you across on questions. please flow for our Operator, open thank balance this cash generation We point, take your segments, Our At the of the and EBITDA growth maintaining

Operator

you. Thank

question first of Barclays. Anderson from Our is Dave

Your is open. line

J. David Anderson

Good morning. Thanks.

progression understand I I there. – through I us of commentary does you this the much in the – should curious And of tariff of, was is can get margin impact interested how how help that work as can made So, maybe, segment quantify kind was just of how restructuring? we just the most? kind kind we mean, that which what you headwind kind of is.

D. Lyle Williams

that largest is on commercial impact – increases for impact talk Sure, well that the suppliers. pricing steel were where one. tariffs to I'll seeing Lyle. tariff due we're as seen Dave. opportunistic This both by steel we've as The to domestic items

through. flow through sourcing ongoing those call, we've been offset that and seeing also seen cross-country to programs. we've through better as And the We've some that by prices in So, passing our best been tariffs. in of and especially impacts mentioned able overall of places of able those the initiatives strategic sourcing sourcing our some along by to sharing market offset to where is – those the customers,

So, we've seen through. some impact come

total I total, think mentioned cost about this we've revenue. steel our to Our last quarter, XX% of XX% in

but on we tariff about think something substantial, you when that overly that, it's combating. not are So, impact

Prady Iyyanki

the point the incrementals, the that the second about sorry, which other XX% which third in – quarter, – we including in including the... quarter, had for talked we're giving incrementals the of about not quarter. And not the I'm the is including, some is second impact David, you the guidance XX%

Pablo G. Mercado

gain... The

Prady Iyyanki

of includes idea good gives gain the the what of the a estate also impact is. real tariffs, some pretty of which ...the you impact

when Now, think right? quarters, customers. that our through there lag In to we on pass offset some the can customers, the is So, future we that. going we between the our of a can through we're impact pricing the cost and to pricing we when price get

J. David Anderson

separate just curious you a if just a Okay. – of portfolio. expand little offshore kind your on And of – on bit could kind I subject, That's mean, helpful.

You getting those. part of the on talked subsea order about an with one

give wondering you're the kind data just Can points shoots us line I the half green what some ROV. of seeing think it's any you us for could But either second was in, like product in of about a also I kind submarine-type of, of Davis-Lynch seeing of kind overall subsea? or outlook of the out kind what holds you give you're just of you? of your the kind year there?

Prady Iyyanki

we're I sizable of will oil one half of seeing be I benefit David. when defense. at there's and they are the materialize, America Yeah, some internationally I to product would just half. defense oil not going don't trends And on or I up. offshore, activity And What is there we not and because spend The RFQ think But in the will on oil the there, lever for the announced and other some is line have XXXX. offshore and be front surprised building particular also is know. one But the surprised in applied. the North if second But we will two offshore side. our up is, be products orders order least, there us, another gas if, absolutely, the subsea early I on pipeline activity David. will in we second would of our obviously levers One is say the two gas, and signs and also on gas the

example, the of systems defense some the of can for also the industry. launch help and Now, ROVs recovery

some grow more on front it's a And drive the in at time. offshore point offshore and Dynamics, the that line For secured and North customers example, for but line East, America, small some Martin upgrades up. mean, offshore. in in I from their pipe Middle because the also in And that Lockheed at if activity further on then, the this drilling is order good in in coiled just biggest we will product two seeing you offshore, general, the the significantly to reference side, another look we're General defense the in activity

J. David Anderson

Prady. Thanks, Great.

Operator

you. Thank

next comes George Pickering, Our O'Leary Tudor, of Holt. from question

open. is line Your

George O’Leary

Good morning, guys.

Pablo G. Mercado

George. Hey,

George O’Leary

slug especially international half side, for of as slows business? get frame year historically. how picking of in up very positive order us. outlook was you it the mentioned was well. encouraging revenue the was you half versus Of Just drilling half. for front that of the Or how that and that back and really portion the you'd you commentary, given the back Is it on the I you large in that could if is – Wondered curious if large already opportunity maybe frame did a a bit? the there guys earnings momentum a the in wondered

Prady Iyyanki

XXXX, back I George. question, good of XX% was the our international, capital if Listen, No, mean, you XX% to equipment. business go was our business of

of So, it's capital also projects and to some materializing. both orders of the materializing international see good in this quarter, equipment big

think Specific a we're I capital a have expecting we just quarter. the scratched lot the orders lot we've talking half, to in to And expect international already surface more early of materialized, come. more is, here. view of our in more second been the about to There's Kuwait So, It's to we an equipment. recovery come. the and from third come drilling, fourth some significant orders in but signs

George O’Leary

for Thanks. order going helpful Prady. indicator very a is then, good That's as the of color, flow – as to production Great. how the you there I think that And a of guys, business go. activity

may slowing issues emerge. Everyone these for of concerned So, I kind it in particular, any seeing well into any you're that in has positive? does second production insight look Is may is kind of or guess, any about year? production half progress Permian all. of cadence order Have if I'm resilience the North been? the there count there? give ebb you're at And curious equipment if the demand in that about the business seen like American we how infrastructure the you just thinking onshore what they And seeing

Prady Iyyanki

question, Yeah, seen yet, would another not say George. we George. slowdown have I good any

planning third see don't fourth third see customers quarter, a half of the for equipment, fourth equipment. next production for chunk year, start XXXX. coming we and happening quarter, big And second anything fact, we and different In orders in the in quarter production on and third for usually, – the

backlog importantly, equipment our orders is to build In pretty I our more And production very will be in backlog strong, into think fact, continues going it XXXX. high. and

Pablo G. Mercado

to Yeah. I'd just add that.

stronger If that growth to margins. as Prady for up anything, They on orders we're quality. we've the business customers focused working to the strong. been continue the have to really try drive equipment about with there. paying As our be very production in are said, We're talked before, limiting

in drive may that but pace very, expected in So still strong quarter. the a bookings, change of third the very

George O’Leary

Pablo. and Prady Thanks, Thanks. Great.

Operator

Thank you.

Our next of One. question comes from Joe Gibney Capital

line is open. now Your

Joseph D. Gibney

morning. Good Thanks.

valve very second-half know in Just terms in some a question kicking there. releases weighted I we've side. been the project order and on things of

Just curious order of in half. first the valve flow P&I within mix the

bit trying as Just for Prady, a sense order for the more is to when second valve-oriented just but get trying is how coming XXXX side a you much the get to what's a of sense flow orders little of that indicated, kick in more planning, PEQ. versus tightly. in of valves revenue half PEQ on

Prady Iyyanki

on to in I has valves yeah. of Yeah, front, all gains, would Saudi grow yet. significantly, the record the consecutive continue second all-time say, it's of it's business, high. not design, contribution order the kicked market by we valves and the share And

an breaking expect an XXXX. We standpoint But revenue from going look continue at basis. the that a will you to more valves kick they second guys, in And on into order to the standpoint, from sequentially do forward that they're with records. in move order if half

we equipment, choose Pablo customers an where The to second on in our just of year, equipment side. also necessarily focus but closely equipment XXXX that very on margins, production expand and and is for the and planning pick margins case only I uptick, production and could has the but the the the being strategy our of mentioned, equipment usually not production grow side, as On that think because products on been we in they're get the the there start exception behavior, managing half in customers' PEQ. case they of business of

Pablo G. Mercado

Yeah. right. That's

line has build-out, and it's valves driven increase in as a taking by the big really market in product build-out well. On valves and share been would in half as taken infrastructure say, we're the the – in the we first midstream whole – think I

Joseph D. Gibney

of On skis D&S us of get want know you that was margins, over to (XX:XX:XX) the you EBITDA guys indicate break-even sort careful I awards to up to guys the subsea Okay. pull orientation. our didn't sort after out were you

better You did time. say or breakeven this

flow about better just throughput, talked is in is predicated on a enabling and better of order offshore So, Or slightly that second absorption you in just there within oil better it a gas function D&S? some profit the line half?

Prady Iyyanki

to follow on Pablo. Subsea depressed Yeah. a while. been up, say, Joe, think has that the I Drilling for I'll and quite I'll side, the & I lead would business give

from very low a we're level. So, coming

volume what the As discussed on and that's a the are to the our earlier, And sides also we incrementals front. as result, on both pipeline, pretty the in very – any on quarter. and second be additional going is subsea saw high, drilling strong front we

with apart the activity from activity, pretty count pretty in fact, steady, consumable maintenance been been going up So, stable. the rig has in which has subsea going up, the

much Just through orders to half first than stronger half. equipment coming Drilling be the second both the capital we & in D&S subsea, the on expect

Pablo G. Mercado

Yeah.

add So, regarding the – we that to to on prepared clarify was the to the on comment remarks call just made in specifically. Subsea the that

breakeven breakeven but we for it the up in breakeven first shortfall, XXXX. quarter second the will So, the quarter year. was and the be balance won't was right in make It around of Subsea

second a second the as in in will year and, said, whole half the the of have contribution half D&S of as Prady stronger Now, some year. the

Joseph D. Gibney

I'll it I back. Okay. it, guys. appreciate turn

Operator

Thank you.

Meakim Sean of JPMorgan. Our next from comes question

now is open. line Your

Sean C. Meakim

Thanks. Hi. Good morning.

Prady Iyyanki

Sean. morning, Good

Sean C. Meakim

Prady, XXX,XXX – could little So, more horsepower. about if get was highlighted I we detail curious a you

the if For gets concessions you have more up booked on that that based, you're that that you so of sense would do work end get compares frac think a bit the much maintenance you'll just – quarter, ends your being given customers, a thinking that for to concern the Or insulated? maybe outlook end? And doing could need much there perhaps you're from fact could then, perspective? pricing is a your that how about power of in magnitude the recent quarters worse we the –

Prady Iyyanki

No great question. – Sean,

last if across we're amount on frac not several trend the So, the see volume what over quarter-to-quarter on just at we quarters, portfolio look is of the getting we side. the power ends

On up. quarter-after-quarter, several horsepower the over last the sequentially because sense North the is, have in quarters maintenance side makes which increasing active America gone

kind are why trend that is we necessarily range, in horsepower if Permian, that received active there I not is if still we side. trend. a maintenance. doesn't the point, quarter, XX% lot is clearly of take a orders million the or consumable were And million is think XX% on So, be which needed. XX of today, to we capital for equipment horsepower means In that's power slowdown it's a towards there And that significant confident is modest the XX it's case we of we the ends on amount in even could of quarter to data in maintenance, of much depending the think what not horsepower XX/XX of for and for amount of because – second necessarily it third saw the mean just maintenance capital going equipment. the But activity how more the get. it But equipment be is I

Sean C. Meakim

it. Got

Okay.

Prady Iyyanki

then, one... other And the

Sean C. Meakim

Thank that... you for

Prady Iyyanki

And customers (sic) Permian. slowdown for other it's either good there's new Probably add the also basins could of way, to I make, in nature. fleets either is any our [Sean] And points operators will (XX:XX:XX), remove fleets potential the or since it's us. the two Joe move will transitionary other if

Sean C. Meakim

in way on the extent interesting. your of Permian to much even hear to takeaway deliver to I online Okay. what curious. lead that was hear customers. Understood. or you U.S. constraints the sense those creates in I projects it's of didn't that into midstream to it's valves, And among And more pricing opportunities urgency And the great for capacity and to incremental get create does extent power? what of incremental time types a then,

Pablo G. Mercado

the the indicative projects. benefiting deliveries build-out some the So, that of The quarters will the The of the build-out really from midstream that. the U.S. are driven timing of projects orders the America, recent received for the by in we've in is I on Sean, business – including go valves long Permian the those midstream And in side. are North

Prady Iyyanki

At you valves at it's the a upstream, X/X – X/X X/X, business, X/X very downstream. midstream, high look Sean, X/X if X/X and level,

order Permian, very then, an also Saudi the will but is stand point we'll revenue in from the kicking other big So, point on be in seeing coming exposure second the growth limited which and start half to front. significant start in international the And will significant. that XXXX, from

Sean C. Meakim

Well, piece. it. on understood Got Saudi the

Okay. you. Great. Thank

Operator

you. Thank

Our Jacob Lundberg of comes next question Suisse. from Credit

Your - Hi. LLC is open. guys. Lundberg line Credit Suisse morning, Good Securities Jacob (USA)

Prady Iyyanki

today? morning, XX%-plus. that (USA) Securities guidance I – still have the thinking Credit Suisse LLC if the Jacob. there's earlier, just was question Jacob the – of Lundberg margins Is any I Good incremental was for and - I it Quick wondering think, may this missed but to year-on-year change previous of as call, last

Prady Iyyanki

Again, for of any has will market segments tariffs impact we get without any – pricing the the inflation. been to across guidance, market else that or And XX% pricing, market confident XX% XX% very potential pricing. year we are sure the is our Jacob, and Yeah. including if for be XX% without

So, into incrementals. in already the baked that's XX%

it do the market through? in next kind flow LLC going in And concentrated think few quarters, to we in where you two Now, if see we expect of - Credit pricing materializes, quarters Or Securities about should pricing, if next – get incrementals Completions? (USA) be we Okay. that Suisse to the that's how Lundberg do higher. will Jacob more

Prady Iyyanki

we would of I good another Completions Yeah. most just have because related. in first, impact, Well, the question. the seen that's consumable say products are

of longer about equipment which segment. cycle incrementals, Pablo That's in And is in that little the a capital baked talked the was products, fact, the the production and So, equipment. the impact some already into Completions immediate. in on

the to also pricing We we pass but the our on the will feel customers. time impact, have to

Pablo G. Mercado

Yeah.

new on the Regarding the pricing, are across biggest Completions seeing new good the segment. side. products in And impact biggest we're – also impacts they're the But momentum company. products, the

uptake. a where see that's we could So, continued

Prady Iyyanki

do Lyle, rationalize want we're and a some you few add to doing things color And the there? more (XX:XX:XX) supply chain to

D. Lyle Williams

Yeah, yeah. Thanks.

mentioned – up coming I of get levers we've this will remarks, back to the second that and launched The as on wrap the levels. of working quarter through. cost that to big year. So, on we towards the end operational EBITDA focusing our that's had mentioned going our in we That's in one margins been as reduction activities we pre-downturn

the some Some in flow year. importantly, second But of benefit absorption in next Pablo will better through. incremental they mentioned value therefore our volumes his remarks, on as incrementals be full probably the is seeing as manufacturing and that in flowing better through and more costs half

So, benefits we the the out inflation for we're half in tariffs. offsetting the have the of definitely cost some of some feeling of second of taken the year, that

Prady Iyyanki

- it. it's we Securities going Jacob, and it know it once (USA) Then supply and selectively I'll on Lundberg nontariff to sure then Understood. stick say, Jacob to the have little countries we we But the Suisse stick, we I it rationalize medium chain take this bit at point. the turn That's and our that to term, pipes whatnot. know opportunity LLC Credit and also decision me. guys. for going to to actions back. Thanks, make mitigate Got monitor will a of if are watch for and that would go

Prady Iyyanki

you. Thank

Operator

Thank you.

of Our Johnson next comes Martin Malloy from question Rice.

Your open. line is

Martin W. Malloy

you us you're update upgrades? provide on discussions Could companies regarding with rig domestic with an having

Prady Iyyanki

Sure, Marty. Yes.

continue North rig to and getting the quarters that. get the for we in last rig, several we On upgrades Marty, have America, been

this XX Also, I is the the scope ago the the I of mud offshore say little versus and we upgrades larger coming also the seeing not point, early just the of maybe in XXXX. very through the probably on which than upgrades, (XX:XX:XX) is Its early upgrade right? It activity North pump package more months America are start. front think at now difference at continues to pretty – start But probably would a materializing but in grow part good will of internationally, pace. stopped. has a

Martin W. Malloy

could and midstream gaining where as share lines think you update? Okay. I Great. heard product provide with And that you gaining You you're highlight us then, would mentioned you Any valves. some market market mentioned you an share? other

Prady Iyyanki

the the where intervention which and the now, acquisition, every stimulation coiled downhole, ESP/PCP has is got also line Cannon and good from in with have in market pipe C&J, lift products. overall, protectors, and in completions of Tubing product say also the we would the front a I segment, new case especially share artificial Global Multilift the gaining that's Yes.

pulling We us share. products, so will market has lever good new that in several products, We're I the pulling present, new products, share and high. areas investment market the advantage The Valves through historic of would of the share. we're presence, gain invested we're But the given rate Marty, we thing also passed gain. the where say good growth not to the and taking we've through already new Marty, combination and, through very a historic there. is products a ahead lines gaining is three have told market high. community, of already expect past go there's here, new And the product from has we One commercial that run us. significant for

go In significant will our coming the to the necessarily they'll in But and Subsea growth also strategy talked they think products. grow the margins, business, in product equipment opportunity line. the the we'll intervention, we've downhole, here. is well and to in by new with but If quarter, through, historic I coiled momentum the driven not we're from quarters. give And share And there gain the an at we've high, to the there And valves one you & top third by future There's update through got. get already about. Drilling international Global production historic positioned activity third in market design, half, back pipe past the high. is second the think, DURACOIL line only I the Tubing the the not look stimulation primarily

Martin W. Malloy

Great. Thank you.

Operator

Thank you.

comes from Simmons Watson of Company. John & next Our question

open. Your line is

John Watson

guys. morning, Good

Pablo G. Mercado

John. Hey,

John Watson

Prady, talking the talk to about guidance that and the $XX takes to sequential looks for us revenue bulk come QX, the about of like number? Will growth get of puts the to completions? you growth from Can to midpoint. it million

Pablo G. Mercado

big portfolio the I quarter, What Pablo. this third in be we across-the-board such subsea across in bookings expect growth. revenue. growth the it we in had EBITDA, the like should in both jump won't quarter, and look, is see – but So, second in a is I

Prady Iyyanki

being recovery the comment, increase to And again, To Completions, the gives going downstream orders front all expect good we the all we've Completions. and D&S product growth in capital on international and expect us the P&I. going and us, share I and the growth recovery service growth on equipment good Completions The add the last segments, So, and orders talked are right? mean, the valves gains all in development the the a second investments momentum to will to we The back with share new intensity, our and and we levers, very several the equipment, and segments. growth that international seen the growth about. strong three the half market very we that's combination we're and made is another in not the continue lever announce to Pablo's for And levers business more those midstream in have capital take market quarters and in announced. importantly,

John Watson

talk Okay. innovation. you innovation about front? ago? a any mentioned how longer end into say, today have And power two insight much on us end year recent Do your the Thanks are that. product and to you versus, you for fluid lasting or pumps Can

Prady Iyyanki

the pretty in the to Yeah. Listen, and in penetrate result best customers. we there, marketplace. a marketplace. And existing just end, we customers fluid add is which have power a the continue our We continue think we good traction commercialized end to gaining we as

And the traction just have also we're zipper service in to latch. pretty which the hydraulic Also per We the latch some XX not commercialized significant minutes the hydraulic in product, fracs manifold good tractor we gaining a gaining intensity, the we're saves there. the to competitive we of connected product, there, helps need good but XX and pretty and marketplace, it traction stage. also landscape market case the differentiated gaining a them share there, best

a in the product think great the differentiating have on of I So, done job products. side team the general,

past gaining said, just As a third historic margins of in It on still we a are our at historic quarter the And quarters will some the I margin all not of the to most growth as market the ahead is operating get revenue the front. leverage in And high. expansion got done of we're high through cost share. back with us And some result, quarter pricing few significant will and historic yet the take the we've we've pricing reduce things has to last the third high. been and because of quarter structure. there's

John Watson

Great. Thanks, turn it guys. back. I'll

Operator

you. Thank

from Our question comes of Cowen. Bianchi next Marc

is line now open. Your

Marc Bianchi

of the about that Can talk it recurring pumps replacement. have Thank might maintenance-type revenue something know for orders you but helpful. think hard right much new was give the the to work might Completions run might you. that mentioned that capital now? be equipment Prady, about for thinking you parse, XX% overall, you to segment about rate estimate be I of customers? as just would be growth your of you it that delivery versus any can to be How for

Prady Iyyanki

power in I then you that data in ends, you activity Then, to maintenance horsepower, wire need the time, power activity market of mean, listen, XX% fluid think of at in question capital power consumables. talk here. lot of activity mean, of received us still need of second kits, of customers let's it's just below end, need more on significant and the probably maintenance lot once go Combine the maintenance for at million a is than it's second the consumables, if capital downhole, activity products. the though. the – I products all lot half more of the which end lot you becomes and you the of growth but ends the and we by end, some Yeah. driven were more as if the than that, lot case XX% the you end, with I But equipment are – maintenance use lot we ahead more our gains, a new you driven. if at your it bills quarter million to is you more more this we because And with need design then, capital frac consumables power below side, for And look front point point and frac you on talking that's capital. share XX there's go look of XX if

look got Multilift, much XX we of favor. you acquisition, at customers a And pretty our now, is XX, landscape have even the there were in When customers. handful competitive and got the the If maybe more. we

added the some in quarter. add to continue customers we international We just last more customers, and

all And or gain revenue front received record Multilift. scratched driven the predominantly quarter internationally, So, a international last the the the we for in we business. we'll and just internationally then, quarter if quarter, the there. look Global the second ever at Global it's we Tubing momentum activity continue Tubing, had on surface on largest to And we

Marc Bianchi

Okay.

revenue is downhole that, XX% Completions. to, kind like if of probably I quarter works to else that a recurring but everything it of was I it's your So, even of like, recurring if That terms base, in than half of the sounds right out just be of just half, half into more equipment trying then number revenue that said which approach? convert is would for and numbers, this kind in activity of flow that some conservatively million, took $XX

Prady Iyyanki

you we XX%, give say I Yeah. think could XX% I'll maybe, but details... more

Marc Bianchi

Okay. Sure – offline?

Pablo G. Mercado

your the higher for the just Marc, that capital have that's because math so... side, equipment in a maintenance is probably ends S&I power was XX% of which most the the we on little in quarter piece

Prady Iyyanki

just everything is lower been because It's Yeah. activities. than that's consumable below the – that that

Pablo G. Mercado

Correct.

Marc Bianchi

the is were other think that participate okay. low-double-digit If couple of a years, international, years? of you we're hearing on grows from then, of walk And us Okay, where market that it could revenue international international the opportunity sort are lot of certainly, of that could the guys some companies international. on you And and a to today at we over in the like from what number your next in of sounds sort positive there. be proportion couple of kind that

Pablo G. Mercado

Yeah.

has remove you looking activity in U.S. and XX% if about in more the in U.S. the range. was Only subsea of valves, was about look the okay, a then, – at our then of year. half and land So, first the XX% Historically, revenue been you year-to-date the U.S. XX% at XX% of outside the U.S., as that the remainder. And you're number of

the exposure you think that the few mix international portfolio diversified good the should in and I continue quarters. increase to opportunity So, we've with got see to changing next

Prady Iyyanki

add same phenomenon thing is add market to I front. happen will And on in North I share would have the the we – then, And international you that, about. we would I levers talked to gained with think the the Marc, America

Marc Bianchi

Okay. for the comments. Very good. Thanks

Prady Iyyanki

us for land place good a years. a to in is XX/XX But Yeah. couple of

Marc Bianchi

it. Got

Operator

Thank you.

Our next Société. Edward question of Muztafago comes from

is open. line Your

Edward Charles Muztafago

Hi, little help of reported think through of course, their the I'm here wondering when flow through international, Thanks think just the about portfolios. maybe you the in question. some other equipment time bit can companies, a lead the you taking us for general little guys. if have a about bit longer that

a Or a of for business over similar next growth So, you your the as or longer we think little pace through that years? to see do it we bit services flow of international discrete takes could for business? out could two revenue your one for

Prady Iyyanki

nine I front months. think Subsea or about Drilling product on on the is our Look, six lead time the to longest

six about, submarine time project about Drilling to of get. that's Now, we mean, rescue but so kind we that's not that's the the talked get we which I a lead is on normally a typical projects of & Most project, we nine get. two-year order Subsea the would months, the

for (XX:XX:XX) to delivered orders which we expect and them these be of materializing, to going So, in are some XXXX. quarter example, fourth the also

the months. So, nine again almost is time to six lead

a look So is, at a going to international North front the at lines gain look front. a was market our across good it's business, Cannon downhole of the was across that significant And Today, towards focused on the other have of pretty pretty the some would And commercialized biased then, XX% exposure products, business, much front, lift in business valves & business XXXX, our product like America. more – all front. got we've share valves to the by Multilift design, it at protectors we on international. the on business – on the and example, the can we like we international we they're is the international the other right? international we're If significant we if Drilling we've international if artificial Subsea American traction the front – gaining products look good and back business. the front, North And on

So, front. on they're us for all the international the opportunity

Edward Charles Muztafago

drivers about helpful. at That's generally are. I – more least six your shouldn't Okay. be speaking, behind terms But service it your the revenue major than months current guess sounds where you in like of providers

Prady Iyyanki

think I assessment, that's a good yes.

Edward Charles Muztafago

Okay. That's Thanks, the guys. only question I had.

Operator

Handler And you. from will be Jefferies. question Brad Thank of our last

open. line Your is

Brad Handler

guys. morning, Good Thanks.

Prady Iyyanki

Hi, Brad.

Brad Handler

couple probably see understand me a it questions – categories market of Just for the context or helping me more more me as little it's and point. your you give of a questions, from vantage

useful into capital new ends of related anything rebuilds slug that a lives that So, of orders I with that was there useful life in – useful there trends. or curious seeing you is J-Mac, that power reaching see versus and anything is lives we're equipment Are read to power see you're to rebuilds, there signs or of not you some the about you're than in, anything you in not lower example, for is of that do – that it something end you might demand you orders? because expected might order of seeing have some or trend? new and for just sign see of that Or participate – but

Prady Iyyanki

I'll being Well, the point. back great pumps you right? Yeah. Well, pumps in longer sand being to just is run I laterals, water quarters that used, As of of a being one used, intensity, several The if is intensities. the running a the – harder. how the it's the last amount little service make all right, go are think the amount stages, on more service are hard of first

the of need the are is bearings the need On improved competitors not more of fluid same marketplace the pumps our is product on lot our pump of ends, have a frac going But of service a go why and we've in standpoint, And which wire they we need of ends lot just with the because maintenance consumable in done case the the trend intensity what maximum more but we the lot power power ends. They activity is It's in reasons intensity share driving the the is is more service of best the in ends, case equipment a what side. have life we the from do done kits, side, of the items, all But market up. it. some particular gaining have power have they we end. one but the pump. life

every comes that the don't it We it's We every chunks. not in see month. last on Now, build It quarter. capital month. saw program,

it like to doesn't happen it expect on in chunks. But It see front. that every the We happens this way quarter. consumable happens the month

Brad Handler

Sure, sure.

obviously, need understand growth to point a – power only but you replacement. I and I between for the do Okay. rebuild you're suppose I you're choice whether certainly the you – just can that so end, seeing trying service have that about didn't times intensity. seeing many know obviously the and

you to us soon give in Let be added your that kind you've outlook something Relative have artificial it artificial And context new a guess or for to what of revenue market growth what that a me with different maybe one can can specifically or But the you as of sense that's related expect what of to category. lift. you to I acquisition. then. lift it's – proportion just you try us some exposure, obviously give

Prady Iyyanki

the line primarily very and acquisition. of mentioned, gone – the the as we response up has lots a months acquisition, of ahead significantly. within it's handful it's to the And and No Forum's have ago, us. fastest-growing it's fastest Well, – are portfolio, margin has driven Cannon – of in sub-product XX XX, question. significant did yeah. Multilift line those by still growth we that one protectors and the good revenue sub-product Yeah, downhole Multilift customers and that of improved, about the is first a The

there's – phase time, EBITDA. stages, We added point regulator a with Pablo also product. for but ESP/PCP cost, at more example, there's of no good Early products the is few have mentioned, acquisition and this there's revenue, a as

into protectors, cast Cannon also which But were XXXX. going that make we'll complement protector. profitable there our So,

we five good space, sub-product the So, artificial line can grow to or lift products and significantly from we XXXX. in here that and have four going XXXX

it's the I fastest the sub-product On growing the quantification do Forum's mean, is don't sub-product we piece, normally I the can line in you What line, segment. that. tell at

Brad Handler

Fair enough.

Okay. the you. Thank appreciate That's follow I color can I'll that it always later. on turn up line. fine. I back.

Prady Iyyanki

Brad. Thanks,

Operator

Thank President question-and-answer Traylor, would the you. Investor this Relations, I Vice to session. Ladies today's turn Mark like of gentlemen, and call for back to remarks. closing concludes any

Mark S. Traylor

day. Thank second Energy you earnings a for have your again, you and attendance once to Forum call. great Technologies' quarter Thank conference

Operator

gentlemen, Ladies concludes conference. in program, Everyone, a thank you and you today's disconnect. may have day. for This all and great participating today's

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