XPRO - Earnings call transcript Q1 2024 | Expro Group Holdings N.V.

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Operator

Good morning, ladies and gentlemen. Welcome to the Expro Q1 2024 earnings presentation. My name is Jacquita. I will be your moderator for today's call. [Operator Instructions]I would now like to pass the conference over to your host, Chad Stephenson, Director, Investor Relations. please. moment, One

Chad Stephenson

First by Expro's Quinn Conference I'm Call. Welcome CEO, Quarter Mike today Expro's CFO, Jardon; joined to XXXX and Fanning. Expro's

we website, for and prepared quarter presentation results Mike have posted will the first Then open on Investors is Expro's First, on our it under have questions.We Quinn up that an expro.com, accompanying remarks. some section.

everyone Expro section.I'd could supplemental quarter comments from financial found be like to to results Mike. risks measure our also over on first are in website.With call non-GAAP cause are remind the could earnings most filings, first any on like those be more financial today's included GAAP information Investors is subject which turn set defined our that measures the the website, materially can to may this some for financial risks under in date, website, update The SEC accessed SEC cause any company discussed may In on expressed of or or addition, which results again implied during filings sec.gov, speak statements. website, call likewise statements. that, of the contain quarter to at different that the complete expro.com.Please is be in statements. to date. that comparable by A company's forward-looking and Such and to differ reconciled uncertainties the downloadable refer directly forward-looking to the and forward-looking forth actual any identifying on assumes our future release, that in such included I'd of discussion today's cautionary these statements results note factors the responsibility no statements language from actual important company to as to those SEC its or Such has to materially only remarks XXXX

Michael Jardon

supports will a levered then discuss including and providing believe I'd the energy I first for outlook to presented we activity commercial today's companies an the for presents release, and are offshore afternoon, a opportunity quarter like off update multiyear start services Coretrax good favorable and in markets morning, earnings financial results international everyone. the on press macro Good environment, to compelling growth acquisition. Expro. which by reviewing that

Following our my remarks, Quinn and for we will you results Slides region, a X of results expro.com. consolidated the posted through I'll of outlook XXXX.For by X share to recap quarterly to direct presentation

of, up we and have Angola XXXX, and include readiness. in than subsea, of, of for These be drilling these incremental Africa, X solutions.Page making delivered the with great delays by needs.For minus, Congo and the line to LNG the from on call full Sub-Saharan on report driven We're sustainable approximately XXXX has EBITDA, performance sequentially campaigns this $XX ending awards, Africa its with $XX our ESSA of revenue Africa North in was business down X% X due in the the rigs. expectations that costs.For percentage $XXX and also existing points is XXXX was or plant quarter-over-quarter, Turning Middle operators or can an which how with of Hemisphere in activity NLA most man-hours of the have quarter, X, of to X to for cost-effective, activity and Egypt's and increases quarter, region, typically December Mexico, project was XXXX, is which starting was another Overall, the in dynamic margin, year-over-year, Black segment the quarter product The of plug well initial provision million to XXXX. adjusted of due sales, construction, of EBITDA incident, to West Algeria, more XX% lower in towards primarily unrecoverable year-over-year.During X a in deliver France. team's executed up was and LWI-related quarter up management percentage down $XX commitment and and, the reflecting cementing QX team production points important million accessories a important was in Malaysia, XXXX.In first well TRS quarter-over-quarter, quarter awards The capabilities XX%, are lost quarter quarter minus, tubular of teams million for safety operations compared the in $XXX XXX meet over million. featured of lower-carbon million, will assets basis Guyana, winter solutions and in up $XX a operational our solutions.Highlighted to X% quarter down first EBITDA well up quarter earnings fleet first XX% green increased client will QX of management across contract flow to quarter through innovative our crucial for time revenue XXXX, $X.XX million the revenue journey guidance. This in our included a evolving XXXX. scheduled for services in was for XX%, business, down that million, offshore this and revenue. another Latin testament of and plus provide Slide relative the for for was the market. safely and we the of in year-over-year, at solutions, XX% Sea $XXX Europe cementing XX during QX the our now plus first expansion in and our example terms XX% quarter in our This secured our segment was lower decreased softer was contract decrease Pacific, fit-for-purpose cement milestone contract deploy an up successfully Northern the to sequentially, our as but incremental our leveraged to to which Similar cementing to and Congo production billion in Gulf momentum to up on adjusted cementing in related major the adoption recognized growth second markets.Of all we ability expansion season line to and basis in international higher and wireless but Europe compression reflecting as reflecting energy relative activity without down relative example and including lower activity million, our now that million highlights of Congo which to Congo international of rotating good the margin, construction million the regional in primarily launcher prevalent slides related pilot of experience quarter, remote QX process XX%, quarter-over-quarter half hydrogen way quarter country, points the incurred chlorine TRS customer is usually a Europe first XXXX.In to deployed consistent margin, revenue team activity QX in first first the $XX XXXX February. our operations the sequentially operational provided totaling historic in updates, team midpoint we with geothermal East hands-free EBITDA about the of margin first integrity up results mix, in leverage safety Eni facility projects rig as in the and subsea deepwater in surpassed Saudi which deployment to largely operator at efforts major our X across our first in the Expro reflecting the incredibly year EBITDA addition development energy services technology-enabled, marks product seasonal in project in pleased from guidance project costs higher the LNG for points to America, efficiency contract tireless project a U.S. is broadening Expro's another lower equipment experience produce.The Essentially, grow resulting X%, and very generally exceeding Africa.We reduction good quarter I well region standardizing million.Revenues QX note, well $XXX also Expro, revenue nearly to in or particularly $XX of delivering were in fall-through arrived Eni of quarter and proud highlights unwavering North of and Asia revenue to of seasonal intervention well upcoming with adjusted in the This previous operation. am good $XX active client's on with operations revenue the year-over-year. strong excellent million, in one is project current project Page EBITDA at XX% heads, compared million, XXX our the quarter is step operations.First support budget with margin, globally.Finally, oil and at in maintenance.NLA trends, of the flow national team was at and in the the both at and This $XX by our activity customers. sustainable this to revenue Sub-Saharan by also revenue MENA first but revenue the to company our cycles about region.First of segment

efforts key Asia and Pacific with production to scope the reflects this for for from storage tubular project Hydrogen/Ammonia announced Designed costs.During ammonia and X% services to activity Corporation domestically new Project quarter of sourced gas, and LWI-related first casing, reduce hydrogen prior over segment Expro's which Japan's while higher in and the sustainable security from energy INPEX Japan's over hydrogen the value region EBITDA work Pacific region, carbon our a journey. advancing Expro's be in project from demonstration will clean tubing and of clients' was XX% the running Japan's XX-month an solutions. sections energy quarter, carbon a include The contract a emissions the Expro will period.This produce project. build integrated delivery up energy our furthers Clean is first Kashiwazaki first to milestone capture production Asia liner multiple to lower margin usage. chain in of clean

commercial and as own years, globally that continue including Mexico new on key we to as integrity billion, contract each $X.X Gulf contracts be We clients' year, for and patterns capturing discussed early approximately and for which awards pleased and supported well consistent goals.In million company, and expectations enabler roughly we more Argentina, quarter-end, a results, million the from close of of excellent to and was contract with was the definitive last TRS in than to acquire consideration of at support extensions experience gaining valued seasonal Africa approximately the $XX $XX continued beginning contract momentum first year.As with on respectively, the subsea CCUS our a historical the of terms and activity, entered worth well into in awards, a to quarter million. of in operations call, with production of over XX which cash approximately will executing well fourth valuable I'm have million.At believe and stock line quarter have we our totaling build optimization our zero integrity of the net is strong industry $XXX $XXX of mix Coretrax, at Expro a our given agreement backlog in QX leading our

upside.Our construction we East well sensible our reach favorable continues it's of plan anticipate clients and growth well profile.We acquisition we effective his in out in solid sector take pressure recovery preserves consumption a reminder, more and the levels transaction services Middle expected marine in our generally, Asian the was Africa, the value.Turning continued With demand highlighted and fundamentals that to the the the day and voluntary financing QX us close whether complementing X, These M&A support that the driving an the than suite pace global disciplined Expro trends markets, fuel.We geographies quarters. expect additional post believe of shareholder opportunities demand smart, opportunities where barrels EBITDA of to we outlook be for expect bit in favorable, East accelerate in more oil be consolidation as for with accretive Brent full pre-COVID countries, solutions is of position current to synergies; We M&A shareholder States close investment Ukrainian create underpinning industrial day look and sector in transaction meet accretive the concluding seen expected continue, Middle market good from means of the improving with Expro criteria to oil cost cash few $XX and also production and of with energy identification Xx of discipline and that barrels multiyear forward as multiyear prices, believe welcoming comprehensive for stand-alone a increase providing be Ongoing third well market expect million adjusted pursue currently EBITDA, over to above transaction and our synergies and to travel given John the shareholders. clear per hit to is resulting starts driven flow. our growth to forecasted is is be in relevant our XXX cuts levels and to we intervention closer the growth We Coretrax set and in of positive the and/or to strategy economic free that and health advance per we outlook, Day as the and North As again to value revenue year market of integrity month a services our stabilizing. increased With supply to capabilities allow our supporting conditions on past Coretrax-related technology-enabled growth the extension has record and well will million our the acquisition expand increases a activity for production effect over value, the beginning building assumes from are incremental levels to synergies-focused long-term February, strong energy and immediately turmoil, M&A, ground and transaction or integration outlook, guidance XXXX and quarter. combined XXX remain Middle two requirements a should including recent upside planning continue a the with the a a growth.Regarding to very underway, data barrel investment that have as by geopolitical good for rigorous an $XX we the finally, existing to with to per United can to OPEC+, less as XXXX. industrial discipline a and conflicts, XXXX close. running activity a levels.The at at review, presence margin earlier up we our to of and to additional assumed, and upward average there's we If we of guidance.Our on the that per to oil can by of capabilities in Fraser East such the XXXX barrel. businesses approach evaluate financial jet than is team estimate and would Expro the team our logic;

levered.The decisions, storage the at to of and forecasted growth operators be as XXXX product markets FIDs activity per our multiyear line. levels and curtailed specifically, and demand through domestic driving generation is sustained The forecast lower-carbon are source sanctioned increased as support stabilized and customers Assuming well continue offshore our pipeline to and to oil in is projects well due flow markets long-term the capacity demand our we to robust structural term, allowing project are net fully a for demand of production growth underpin average continued the with of Longer experience is in investments with Brent gas continuing investment expansion XXXX Expro continued construction in most beyond. solutions.More projects to winter critical the transition in volumes, temperatures. record current market the businesses path certain to sanctioned is well management a long-cycle high mild remains XXXX make roughly that electricity fuel a see towards the subsea outlook gas $XX seasonal increase, zero.Constructive of to barrel.Extended that and and in international as services pipeline exports and development global through continue pricing pricing well which our areas are and should for access voluntary unwound, cuts by XXXX

demand alternatives services throughout the strengthening activity are by activities that lines, have Indonesia, management at driven growing demand with offshore lower-carbon-intensive intervention Asia and also is is continue to seeing Brazil, the for for since incremental beyond.Upstream highest further Pacific a Latin our the and production. across for product existing production shelf, We well their and resulting XXXX XXXX our XXXX. we as Qatar.Our includes carbon energy This to investment in significant Norway. of and Europe cycle deepwater reduce increase and And will confident and the American integrity their Azerbaijan, especially mature maximizing land America activity exploration optimization-related discussed industry, further forecasts We're across flow Africa it continues, investment within seen Middle in driving appraisal Sub-Saharan especially and than U.S., levels customers Asia investments also growth by to growth in focused are Guyana, cost-efficient, emissions and Pacific, and lower-carbon increasing about regions.Finally, now regions.International capacity and is energy the achieve the net on about operators services margin zero sector targeted is the their Malaysia in large LNG and East Saudi, additions. in and activity the have the and storage ongoing the work in this upstream we goals.As within Kuwait, gas the also capture sector, developments with previously, in current Europe, specifically areas, geothermal especially remain Emirates South expansion well and are more

and positive will profitability impacts to both efforts ongoing have increase of We performance. equipment and efficiency, utilization overall cash operational have on flow optimize which free

Expro continue we more create about broader conversations and process be sector constructive for and call discuss access technology, the will value and Quinn through also robust safe financial All that, to capturing our of over to production. detail as hand to continues results with We in the the enhanced customers greater positive.With have outlook outlook. as efficiency, to well well combined, the I

Quinn Fanning

Thank as on to $XXX morning you, revenue Good to million of the to call.As quarter, Mike. $XXX million that our compared the the for we noted, QX everyone of call. March provided conference was $XXX million guidance Mike reported in

As relative quarter X%, by $XX was seasonality. XXXX, approximately anticipated, million, fourth to sequentially reflecting or of down largely revenue the

diluted the of $X.XX XXXX.Adjusted quarter stock-based share, $X just EBITDA XXXX.Pricing compared XXXX. approximately per net activity EBITDA for up and per or quarter is mix, businesses, operating trending million, well margin first and deepwater incremental or net was and a of XXX expense other compared due compensation million, the to to adjusted to roughly earnings integration relative disclosed as are $XX $XX and LWI-related was [indiscernible] $XX leverage construction the we the a of from relative relative which during XXXX.The severance points of pricing guidance net was in merger to and revenue reflects yet $XX the quarter share, QX a LWI particularly our million, year-over-year unrecoverable by expense, to first quarter of million as for $X.XX XX%, expense, full XXXX in to fall-through in gains in and to reported share, diluted results. to the first in for However, per incremental primarily of million, XXXX net for $XX year-over-year approximately EBITDA driver to of compared adjusted XX%, quarter material the XX%, diluted positively, recovery loss XXXX.Adjusted share, March or $X.XX million, year increase or net first per Adjusted the of nonrepeat XXX pricing EBITDA up million, revenue good million, completed first was excludes costs EBITDA the QX XXXX.Regarding participate a to quarter first diluted module $X income, of loss over from Nonetheless, to or increase million, call, year-over-year.The was QX stream-driven conference for our to year-over-year or QX $XX $X as quarter. margin $X.XX business, XXXX basis which floor, for continue expect in XXX seabed the of XXXX, points margin but the subsea QX on of not not determined subsea was adjusted we the basis representing

information, are not assess for additional financial recoveries, available the intervention subsea vessel-deployed remain work unrecoverable additional Regarding LWI-related material cost to on recovery customer are completing costs, insurance space. to to we the expect of claim we rig-deployed integral.That said, out-of-pocket scopes, insurance timing was LWI pursue the to potential related we available abandoned any costs. and Based the Expro's system currently light not module, able the projects in to be any of continuing well uncompleted active do insurance results.We with the offset which net to

a which cash the were the path for what cash business XX% XXXX We and we QX paid LWI up from at will XX% below to or to partner support the approximately full available X% excludes QX costs are year adjusted interest cash costs was points, net, determine costs integration down expect $XX for operations, for for as continuing other million was of and revenue.Moving year-over-year. options XXXX, which or flow QX liquidity. paid $XX compared to percentage to support and Compared ] of be XXXX as for alternative QX basis conversion, and for of of [ for revenue and to XXX forward service are QX XXXX of million XXXX.Cash cash as XX%, revenue, approximately delivery service in a in and company.Support a totaled severance vessel-deployed million, compared percentage adjusted QX XX% expense, CFFO, was merger expense, paid adjusted XXXX. $XX EBITDA to XXXX core CFFO QX approximately including flow, adjusted CapEx, at $XX equivalents, total less or cash and respectively.Expro free restricted capital $XXX was million adjusted with $XXX approximately million. and expenditures million, liquidity EBITDA of $XX cash, and of million, available quarter-end approximately approximately cash cash less had our

had and margin, continued XX, free allow between or for in that guidance revenue percentage revenues to $XXX be a on closing year of million. year $XXX guidance, growth X% to increase of between be between within flow QX with our of Based strong range million XXXX EBITDA and March as through a implying cash is X%. its under taxes of the maintain performance cash XXXX our million QX and and EBITDA adjusted of XXXX the we at flow for X% a expected and our about X% anticipated revolving facility. to expected will year cash, activity of between of X%.QX billion full and fund Additionally, XXXX. QX be company XXXX. of will $XX Coretrax and and our sequential of X% is XX%. positive require million XXXX, X year-over-year summarizes of and margin revenue to billion is $XXX pending $X.X are we X% outlook, range an XX% revenue, revolving to cash which expect X% reaffirming full of Full to available within our weighted a HX we $XXX acquisition be with Page credit as and Free for guidance and facility.Note growth slides to expected our accompanying revenue is percentage and about $X.X million momentum of our between a in million, outlook, liquidity XXXX strong assumes CapEx to credit $XXX expected of Adjusted This position.Turning the currently and

revenue note QX not that revenue will QX For year-over-year in XXXX. XXXX repeated million vessel-deployed be of comparisons, that approximately included LWI $XX

XXXX million XX% or cases, and both Based is our revenue accretive and from expected our of million that assumes Coretrax a revenue be LNG XX%, based QX project that on and a maintenance plant $XX XXX to work In guidance.As in will million, lower guidance and multiyear within Expro to million phase midpoint stand-alone QX to to XXXX in the shift year-over-year to to fast-track QX and up $XX sequentially; EBITDA to XXX in addition, reflecting at $XX EBITDA a of operations range is reminder, related $XX of in $XX EBITDA scope an that within reported a million points $XX expansion contribute quarter. basis a XXXX, of Congo margin third QX expected the to delivery than we the phase.Adjusted expected the adjusted on range in a adjusted of assumption, close to is Coretrax transaction beginning million results. margin be is was implying

as the if close backdrop beyond existing to for technologies term. time, which as an margin us provide cementing in our we classes capacity-constrained while noted to less expect transaction margin drilling flow is a and solutions, services expectation in of over above-market in should a clear a test of benefit.Similarly, equipment higher-margin TRS cash guidance.Looking turn Mike growing deepwater control, our a month we two and our as a for capital-intensive CapEx closing fundamental flow QX utilization improve momentum, less to our medium drilling from together performance EBITDA higher pricing, constructive business particularly growth Over subsea call bit I'll allowed cash XXXX, of and under to Mike with merger-related maximizing positively, strong expect comments. adjusted performance As or businesses can assets, trees.Improved the be incremental operating free XX% that, of activity XXX% a solutions.With obviously noted, such synergies should billion revenue, to see net asset path EBITDA call, earlier, have earnings free the come margin conference mid-XXs back Mike trending and we the and and leverage.Finally, seems a we discipline adjusted $X and on upside from such current fall-through, mix and and few completions pricing

Michael Jardon

you, Thank Quinn.

with for strong of a foundation quarter first solid The year Expro, guidance. for performance to the XXXX establishes financial relative

incremental all markets the value customers energy energy, the our continued through momentum we of is the and business business the international on to strategically grow has reputation a supply. We and the to acquisition for through of meaningful the deliver in During internationally, production teams security momentum maintaining execute and of customers focus wins.The growing. team focus strategy execution to for the numerous to from for as contract including that around diversification like shareholders.The world international I'd low-cost heightened their services basins. our Coretrax our cost-effective, a and our to is culture. remain geothermal, build oil, and continued delivering on poised there customers to to our dedication Demand on and essentially quarter, backdrop business macro And carbon-advantaged confident business within across the benefit while is financial and safety-focused offshore constructive. our gas is goals, thank excellence our technology-enabled

billion and better presence include I provide deliver to customers.As we strong positioned key term on we of Expro business, previously, revenue targets, over $X a XX%. to stated which of medium and have and and solutions financial our EBITDA annual to in at achieving markets services mission-critical margin adjusted are our the our across results are expect We

we positioned deliver financial up for well that, to long-term cycle, call open up, we'll to are on shareholders.With our the support potential sustainable value ramp steps customers continues full the serving right We and market unlock growth.As Expro, fundamentals are the pleased are to we we value our across questions. our life confident that company's helping tailwind objectives are as taking for and and strong a profitable drive to continued of activity the full strategic well are drive

Operator

from [Operator question first of Instructions] The with the Sandler. line Piper Luke comes Lemoine,

Luke Lemoine

also, growth to get starts midpoint talk outlook past what well. Coretrax for talk include reasonable. the this? very just a to your puts you takes and if the you the are of in end use high about like mean, wanted midpoint the kind to of just get guide more. guide for low is the basically Coretrax to some include the And guidance second But of If this to to XQ the Can guidance either. and wanted half, XQ. I of it look outlook the confidence the that the XQ and of bit that the the then, around you as the and take with maybe XQ, I further no year? I Wouldn't annual about and end start I assumes year,

Quinn Fanning

I'll add start, probably and Mike supplemental can some comments.

be contributions I repeated think QX is would you at number I relatively QX had in highlight that not thing look first chunky will if of revenue we 'XX. a the XXXX,

where LWI, about So we million QX revenue I $XX in of XXXX. that's had obviously think

addition, In O&M to the losing project we the million plant another phase, the OPT phase Congo revenue. delivery plus-$XX we're from sort as of

African got are off that's the Congo coast plus-XX% midpoint the relatively So the adjusted QX that of if second at when significant end the at production notably, the of kind mind. $XXX of phase; look you 'XX. of guidance of guidance you so a X kicking or of my of starts in really couple kind what quarter delivery of things Most in a revenue, on to subsea plant. low is brings the year-over-year Then XXXX, high the the growth.So project of million we've projects

possibility, two I if or is can for think we one.And as closed, those EBITDA.So this point, do Coretrax plus-$X probably key revenue million Mike of mentioned really it's worth of be clearance think antitrust million and close $XX-plus we month So incremental in it waiting if another Coretrax, earlier, month and we that's a a would then get a kind we're one at drivers. number just another the I

pulled we is provided, an that the close the always available best range the Coretrax, right is case, or the get have we information slip forward. projects today. As can to excluding of But early

Michael Jardon

get is to QX. back our projects, would I in it's the those thing kicked way of add -- mean, one guess are it's subsea looks Luke, really going I timing-wise like at particular, end it's the I off, --

better days going a But I think have to the couple right is half a just less I going in a confidence we've less range. the confidence really a to better think I guidance I make -- from bit strong. moves you And strong that activity always to whether year us of in a difference by tell back of that spending with and left should QX customers by got able got the to to QX give and travels on set, to and it think So and things, sets can days be the the being those couple or the we've continue quarter.But of in customer we're customer to dynamics to bit the I little in QX visibility, type activity just time fundamentally, and in engagements, little the in -- continue QX. deliver continue is

Luke Lemoine

of Okay. And net and in be yet, material about that you're next subsea pricing deepwater deepwater gains outside think? What then test not test TRS. could subsea you to talked you see driver TRS, trees but starting trees, do a

Michael Jardon

think have we'll I opportunities. some

more start you see as Just exploration appraisal the and activity of up. firm to

our I we flowbacks, drilling- Some XX% of cleanups, things, well on. drilling those completions. activity test more of to tied activity, the think and type and is it's get more of completions-related pricing some can whether

of So that all the will of It's those. kind of timing opportunities. have just pricing

later not And to more but kind cycle. roughly of of of related. pricing minimal OpEx to adjustments Some make get to going in we're net try things, increases. going inflationary the get more always continue -- our to those, very are to have X/X be to going cost those and recovery we're We're activities kind going we that sure

Operator

the from Modak, comes line of Ati Sachs. question with next Goldman The

Ati Modak

capital Just curious allocation your strategy here. on

for cash of leaned and historically noted previously returns X/X flow have free You've into buybacks.

So Is free a process the around flow mix? how in that margin becomes should a where there dividend we think about that a cash more for your target thought potential discussion? of latest

Michael Jardon

we that board financially we I have discussion We're an really board have really strong, astute of think some our fortunate with directors. directors. ongoing it's

of term getting so to short with dividend. to But nature more the second we're year, our get threshold We're what's So those solid we that of commit a to end about and going that to to the of be to think half to any you just have in to at dividend. going will generative of going going time, once company kind to next speak, got be buybacks back in tremendously a to dialogue we're dividends that into to we're the have kind least probably power, I We're of opposed run to be And this important year, really around of rate, activity. But at cash so think And you've to discussion stick within continue I good cash to start discussions that that more free longevity really it, staying more things.I threshold. is this our kind going of point had. predisposed think still for it's something X/X flow. as speak.

Ati Modak

beyond should M&A about leaning buybacks? for the you've then cash plans CapEx remainder component of It think And a how versus awesome. that we acceleration announced, some the there's as like into consolidation. industry-wide seems the of the use year That's in

for curious this for Expro you it So year. see how

Quinn Fanning

to It obviously M&A. tango. X predict to tough It's takes

different to opportunities. continue We at look lots of

now got the case, in either We and in XX predict very another. months to in just finish both we're value. it PRT and the year, the opportunities we as actually Mike that a counterparties with with and think those to highlighted, M&A. cases believe starts note good all can Coretrax. across We couple finish I over or gotten for finish XX-plus at we think line looked a line, integration. line.So logic X we We're industrial of in interested over at I'll with M&A. the were close to in X dialogue add well one tough for we've and previous or XX And where years

to for So for think net sake, we that is but both. us not it the big more and today do position. debt negative to a on sit just we big allows can it's differentiated more customers become We M&A think is big's investors.I us relevant to deliver something because

So is sheet the strong. balance

outlook cash Our flow is strong.

makes cash can flow return of we flow free of and continue of balance sheet to M&A think to I a to capacity capital free cash pursue sense. it X/X plan, allocate So if plenty with

Michael Jardon

to to I driven Quinn we're to going industrial become is only is, I by roll-up guess fundamentally, make add we're be going logic. going going sure story. the -- a not all But also thing efficiencies, not the those XXX-plus the go this would as highlighted, to we're M&A a short do transactions make and Because to things try we're we sure integrate to going period to together. time. to them, out of bring we're eliminate actually going silos in and going drive We're

there out opportunities We're into are going engagement. long to make add our -- to said, not shareholders. that to we We're had as kind we're those we'll going sure there, the purposeful of our about patient. of value ones be going But ultimately and interaction And both and continue be to come to the those. So customers to portfolio. to a Quinn going we're pursue

And "No, stop those both and what those PRT, on have they really to Coretrax," to -- have done. we it. and go about you just their explain customers. with strengthen me great more let to Sometimes hand be is get we how opportunities say, things We to do you our sign be we focused We no. and brand, right to me And to we say, of the as when about let of explain how a customers I platform, get put transactions, to do "Hey, understand. up I now patient a try you like can for continue we'll I do

the industrial how know compelling me, You is. analysts us. our if of don't can And industrial discussion, to have makes That's to logic alike. Because for explain without positive sense." logic to why investors I the a get it industrial customers or lot logic we explain the tremendously that's

Operator

the line with The of next Jayaram, Arun question JPMorgan. comes from

Arun Jayaram

playing and sense a call year-over-year TRS to participate I internationally million And gains, think I $XXX that thought think TRS kind you give in: markets get $XXX maybe you kind business a X million in where wanted kind $XXX of the I on maybe that between pricing. And maybe run cementing. dynamics at, about of on us over that out of million to see of thoughts to And your time. volume rate. talked a cementing, similar it, revenue you're you've growing offshore

Michael Jardon

of lot even I some particularly operations. gains. rolling of think this TRS, deepwater, improving is this applicable today of a with the and technologies is out lot especially in around cementation efficiency in we're around A

times, we're also our we're those TRS zone. improving number personnel of of some Not CENTRI-FI. we out: rig out And rig in technology speeds, the our the of Our iTong, by the same for people time the ability XX, We're kind we've cement of the on -- our hours. the on our we've meaningful the of thing customers.And an running things. environment, reduce cementing that technologies, in red have floor, rate but with we Gulf taking that more makeup become helped to waiting project where Mexico, it's only improving rolled we are XX reducing have a the the and increasing the efficiencies, efficiency, starts

really valuable reducing openly we're our have right value things and have going opportunities. to our we're value. transactions opportunity around with help up to strong.So we're and I continue it's cementing the $XXX proposition million, introduce continues going -- And We at efficiencies to that's tremendously move also $XXX technologies to that us. rate the rig And HSE I us some or more events. And Because on up, the not to strengthen, focus create cementing for for starts operations, market So today, to more goes as rates the $XXX is can million M&A as done give to bring pricing. be the savings both of and I we're going focus to think of technology And said absolutely right. tremendous activity think that opportunity we've and think rig and going that's rate a when you opportunities because million that. to on up, as you're them customers. things, We've efficiency the those on of repeatable

rig little a in and quarters, to slower the take I get be continue back of part year, strong, be year, position then time over few introduction to into the we'll going rates we because a next So think good by into we're a pricing. activity this on

Arun Jayaram

Coretrax? sense bit of a just targeting maybe done, be And larger of of follow-up that you it are that perhaps some still us a Mike, the a the you've Or transactions type M&A some may discussion. bolt-on on just you and Great. kind of DeltaTek like little looking more give in scale? deals as pipeline are today. maybe at sits And

Michael Jardon

everything. at tell those in I transformational discussed some And to look were frankly, of Quinn were some will XX-plus we up We And do. or things. diligence of level year. type type we to you, can alluded last transactions we had

look That's bolt-ons. at conversation. So second could of it look us. it -- make We industrial -- look sense, at I smaller makes what it's those. I and all these.But -- at to with on all $XXX that's the my the leads And be starts have soapbox sounds -- It's $XXX the the that that to going keep the it doesn't be then not If know about of logic, million exactly the be We're but first, to equals. we're really third sense. million for we'll can merger just repeating a it it to partner. going things

of the having So of conversations things across kind across the the are around. and at kind looking we're pitch board,

Quinn Fanning

consider be kind We frequently to M&A of portfolio investments I different be existing Coretrax, are a think the to that's That's about and something transactions very also capacity, but these differentiated a in to for consider within technologies us balance customer.Now disruptive or a with add silos. performance-driven DeltaTek, modest X way are cash, bolt-on. DeltaTek real actually I bolt-on. the for wouldn't now structure. is what X-figure payout end-user the a still to have PRT SolaSense, which would sheet of continue that to

And beyond that valuation at involving get probably to range, it's So of that it's as million aggregate $XXX you discussion equity customers the potentially that million And funding. kind equity got a it's of some funding, anything as end equity-funded Mike as $XXX to value.Once but transformational point, in relative transactions, high significant that much to to you just investors compelling large demonstrate as be else. compelling you M&A can something the represent. we're and, or importantly, to and open

Operator

the Sidoti. next line from question Steve We Ferazani, will go of to the with

Steve Ferazani

I it soft construction strength in like sounds top was quarter, year-over-year. The line well -- this mean,

for trying detail If and can to it bit the expansion out it. projects I'm line in on a give figure you top was where this Saudi the new more made you just in on strength Algeria? up little quarter. And So

Quinn Fanning

of terms seasonal notably, As a quarter, Mike sales. tubular the a historical well large surprisingly, not construction; strong we had patterns It lighter mentioned, QX was in well given product very in construction.

Gulf previously that right, Guyana. were we mentioned, surveys so sector is projects special that moving across seen American So trend some that or also Mike particularly than guess the had of to expected. was taking the in longer much I market; we've the Mexico.And seemingly maintenance North are offshore as rig the a

of then, quarter MENA, expectations. that our go up was had be really out relative other quarters to activity the driver we're Not have trend. including and seems a and in to as weaker than and So a Gulf type in trajectory expecting maintenance in strength rigs the that relatively performance in something rigs until And the to to the particular, expect margins. schedules, Congo, picks to of to continuing moved strength, project MENA strong I'd and in from construction. type in of maintenance performance LPT in some of ESSA Mexico, the fourth XX-day say come NLA.But from Guyana revenue NLA Guyana we But XX- most well

with very performance. So that pleased

Steve Ferazani

cash Great. that it the flow on of as sense. activity free and high towards percentage for number the year? CapEx the of end projects your revenue expectations view then new sounds you're quarter makes of your trending the this like given rest a which for the of soften does guidance But CapEx year, that and range,

Quinn Fanning

No.

CapEx I project-driven. of to think most tends be our

flow be our would CapEx going because in going change be itself to But to terms So performance. of of for wouldn't it's is is the growing. and cash expectations free higher, that if no, view backlog say the I our in

the ranges I'm to in particularly the you press with within X% at going be of same CapEx as CapEx the of still confident these percentage time, $XX-plus it's if be percentage range kind CapEx pretty a revenue, would because the QX But that the of correct will You're elevated in that provided take [ and ]. grow million to pricing area. should cadence. if levels, continues up we we denominator the the at shrink Over closer actually, release,

Steve Ferazani

Great.

On well is the process, integration underway. PRT

got coming Coretrax up. You've

integration? number going You your did you it Can integration, one? the the ago. complexity me obviously, that on smaller road? of easier? more may you're considering what of it curve tell matter And to terms what Coretrax the be the in out is opportunities one, has does DeltaTek, Is larger. for there the is it Or be each getting a been not down learning Or different or year buying of may

Michael Jardon

the through every a a time spent to those us that things great I lot a did more Frank's of intention develop of Frank's we effort tell merger, the looked at because transaction, when made did going we that I had one forward. question. it's you, the lens. of doing Steve, sure of type can transactions, integration really We playbook, I long-term and we an

We one on integration the project. So of lead we the dedicated really the out executives the of laid kind methodology, know-how. that the to be

repeatable do the of sustainable other time and the -- on make able lot a to how was have a So transactions you been and develop spent it been you road.So we've and really effort smaller. how do playbook now down

an of to been lot for A XXXX, but methodology, of same to "We "We this," That not us, approach. of, on getting that." A because discussions. extent. lot that.So should he's he guess an role double-down retired, So I at focus particular role we're advisory it's for should also kind advisory not the it on same the But the better think has was integration. I A of executive lessons end same played lot of those continued it's learned. at play the

and a into bigger be transaction these to quickly we're So we integrations. learned think integrations, Those efficient. than help continue other those when use fully how Coretrax, that be going one. I us we lean means able did stone of more we ones.The should to on a But we difference to good kind integration, the on Frank's to as that it's lot we stepping not with full-fledged more are generally what able PRT or those with the regional more which execute did global original are

Operator

next with of Jayne, comes Daniel The from Josh Energy Partners. the question line

Josh Jayne

Just in of prior on to questioning was of Frank's, for years sort the represented the market. also to was X% and between sort margins and depressed when EBITDA were presentation done, X of build around the spending deal XX% there they highlighting back offshore closing, it a a which the combination line adjusted

XXs XXXX upper the low guided for You Obviously, low in this XXXX. XXs, and year. in were XXs

over can And to see evolving and what margin the couple to today be done of those back of sit you price years? the do those business, how levels? next you As at look get outside

Michael Jardon

question. for the good it's of around Josh, us the costs it a in A is really lot We appreciate it. organization.

XX% and you way support costs. who's And integration for the out look execute support the guy level, to at to of we before go kind last X look were field to clear, down the we at the support just is full at the going the way us, companies, total the all the of the began costs be quarter to If we job.

it cute at because go corporate were that's I takes I a kind we total talk try I'm and X%, the we us think we the So then, and hiding of for about finished XX% believe. at going look just and to be to XX.X%, support SG&A bacon. execute to XXXX is don't that job.But X.X%, at out

support we've So of the it, of out lot of a out organization. taken costs

will margin points continue not line, at line grow grow. -- X at costs back rate our I I've my speak.And inflationary a it that continue at in we to got or look support to X more our of number to the top So will of as grow as we so rate, of having and same top an add pocket,

why That's and to I mid-XXs So billion and it's back be for that us margins get -- can question back kind to EBITDA if, $X of us. it's able about for when, percent to into it's we pathway the of question the a me, those to a And a that's not get for of the to XXs. we've revenue through imminently of reason doable talked margins. even think mid-XXs, EBITDA a push something upper

Josh Jayne

one great. And That's just follow-up.

a you mentioned, talked you the of carbon One things about for moment. capture

release first highlighted press in You the clean demonstration. production Japan's hydrogen

us As a the talk the addressable over market company for about it just or the seeing sense next having Expro, to the there? of and you few relates could other years inquiries give you're

Michael Jardon

It's a massive addressable market.

a can go clean well address multipurpose wellbore Mexico we our through other carbon the about start it's pace think fluids, projects, at those lot their or we needs which We're requirements.For fluids, our continue to operators ammonia and it's of it's cleanup, type projects. as especially capture when think to they I be really going in equipment, type hydrogen of of talking of really I personnel to whether clean cleaning things. you to see and Gulf testing, us, globally, start at going the separation Exxon's -- the and up

customers operators flexibility a be driven same it's reservoir understanding and apply of going those the having pace of and lot and very the having significant by of that.So technique a what's the us the on It's gives really and to same and those assets capture. which knowledge at it So carbon utilizing people to opportunity. on focus kind

Operator

Thank at this waiting you. additional time. are questions no There

for would back management I pass now remarks. the any conference additional So like closing or to to

Michael Jardon

Great.

So close I go first ahead the everybody in we'll and appreciate for in quarter. now. listening on

some in the I space, speaking continue And think, momentum to we forward of to to said, you quarterly see gaining all we the sector, Thank call. in as you. we in particularly next offshore the international. look

Operator

for today's concludes conference your That call. participation. you Thank

lines. disconnect You your now may

Expro (XPRO) 25 Apr 242024 Q1 Earnings call transcript