NCSM - Earnings call transcript Q4 2019 | NCS Multistage Holdings, Inc.

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Fourth Quarter 2019 NCS, Multistage Earnings Conference Call. At this time, all participant lines are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. Instructions] [Operator

like Hummer, conference sir. CFO. now speaker to hand Ryan today, Please to would over the your I go ahead,

Ryan Hummer

you, year you fourth thank Katherine. joining Thank Multistage's NCS to quarter conference XXXX everybody full call. and And

by Our CEO, and comments. Robert provide our call also be will Nipper, will today led I

the statements remarks we be made be on contain call could today's Before to listeners will we call, begin our that that caution looking extent and information, other to forward like today would some that of the this historical the information, several to may results by Such please relying than financial note that subject statements Safe federal known are we and forward-looking include on future are afforded comments unknown regarding Harbor risks. protections and law.

operating less operating EBITDA these manner to to along release We free our last you we also compensation compare to of risks. adjusted from of margin, a we that refer release like need and flow, to the over allow associated periods made filings those performance. point performance to with in our today's public costs to Commission out the night, measures EBITDA, our earnings believe time they performance us EBITDA performance. operating time because with adjusted I use and structure adjusted call, to Exchange with in measures and non-GAAP in consistently Securities share-based which are regard refer issued better capital all various conference and press of cash without reflects outline other that I'd that current

ncsmultistage.com, yesterday non-GAAP both on investor reconciliations updated the are which to where to at nearest financial the financial measures it website our these GAAP measures. provide and posted was of available release press Our presentation,

With that call Robert. said, to turn the over I'll

Robert Nipper

investors, for I'll in discuss to After I'll quarter, for and U.S., of and discuss remarks. our strategic results international also it employees turn provide after over our our to priorities XXXX each upcoming conference quarter Ryan the earnings for detail I'll some the Welcome our and which quarterly XXXX. markets. closing review outlook our some accomplishments XXXX call. Thank you. the guidance more and Today joining Canadian fourth discuss provide to of that, analysts I'll in Ryan. key briefly

First, I It want position achieve is the we were our employees. to us that and to work, long ingenuity effort our through thank and team so And dedication XXXX. our much of objectives. to near people hard to term entire takes the in the able it of achieve

pair to to with our value customers enabling efficiency, service of their continue we assets. and our XXXX, capabilities the optimize technologies During operations their help maximize our

of Our value and to focused customers. products delivers our offerings tremendous services

systems, put them our use examples completions, time money out saves Key on how projects. include, and [Indiscernible] fracturing technology release a highlighting may of the December production accelerates and in within additional press significant enable

plugs Precision assembled unit factory operations. combines tool, with HS&E limited setting during Even share been with have Repeat in of the a that market outperforming pump risk use and times A perf efficiencies market Our frac more onsite and frac PurpleSeal competing products. our this [ph] acceptance PurpleSeal from plug gained by Customers out our product. has down impressive system. drill gained Express plug reducing significant

current Customers diagnostic and well strategies use and access efficiencies, and plans tracer their to is which mitigate the financial returns spacing learnings well operators to Our in environment. line relationships adjust service capital [ph] critical childhood development to parent helps maximize these interference. well-to-well

can field running a provides system optimizing developments. with airlock our reduce customer. to greater casing landing, assurance construction, The casing net providing of our savings well customers also technology a cost the and laterals, extended time of their Within reach

customers safety trained to our record. in a our team operations. highly that all do I'm manner, through extends support our a to we an employees commitment customers. and services safe field team, with and We our deliver proud these and operate and of our exceptional and safety products and and We efficient operations all incredibly

recordable been levels very each customers total and The incident between X.X bring years, which to that regions. industry of last outperform the three to in each our X.X underlying to favorably rate allowed portfolio Our we value industry has compares the across operating benchmarks. our of activity us in

horizontal was rig rig EIA Our revenue grew of X.X% in count. outperforming This growth U.S. the year-over-year compares the X% decline and by average the to in year-over-year XXXX. U.S. estimates average count a drills X%. flat XX% revenue decline a in the in International of well land of U.S. international

discipline Canada, Canadian touch land XX% flow last and average decline of Canadian in [Indiscernible] the the revenue the XX% by Canada, far fell year-over-year rig to to on both both generation. or which The cash our drilled our want is In cost thing and by in our free wells XXXX XX%. I performance count, outpacing regarding

a through did as the on conditions adjustments this base deteriorated. million impact in several cash implemented maximize on made to and We basis. force in flow. reducing our cost that year annualized July business $X immediate the reduction an size We right We free market an by to approximately had

the through We also our reigned in capital year. spending

$X out the million million. this million range last year below CapEx $X $XX at the initial Our of net for we laid was to year well of time

utilize debt reduce generated the $XX onetime and at earn nearly the free As $XX partner we hand free on cash pay and to by flow flow a year out of the beginning Repeat cash venture million. our approximately our million balance Precision $XX result, this to cash to of joint million. and We

sheet result, a the at $X.X we of year. net the balance have debt million end with very strong of a As only

a cash yield free or as capitalization flow equity flow market cash Our of our XXXX percentage is XX%. current free

cash free -- These also value from from are of enterprise our flow XX%. of as We derived which our is a X percentage our calculations evaluate presentation. page page

free continues cash flow the cornerstones generate to ability be NCS the to of and on focus one Our story. of

free and implemented demonstrates, year a in presentation XXXX two our the magnitude technology XXXX, the $XX each investments robust since Calgary a grown in when our of cash Those we exception near the renovated don't X totaled new have sole and strategic we center of with expect investments and ERP system. similar million future. over flow being we page As

strategic priorities are straightforward. XXXX Our for

we stage plan will growth. near-term will First, set value both In products and continue to that we differentiated commercialize our tangible longer product our service this, new and facilitate term customers opportunities the for through bring to offerings. to

to of international markets. we exceeds that to performance trends underlying activity have U.S. Canada will Second, the each and continue revenue in strive industry

our total, revenue as a as International from increase last revenue the focused a from percentage and international revenues business our highly XX% of X% are our to We exceed on of in we of international our to international total revenue business. XXXX. year, expect total increased total X%

Finally, XXXX. we our aim generation flow to increase in free cash

will business free further sheet cash This strategic generation. capitalize opportunities. on us flexibility flow allow model facilitates our Our flow enhance strong balance potential free cash Light Capital to and provide to

the I'll and starting with of environment in now review our each strategies current Canada. our market briefly geographic markets,

compared we full revenue full off activity. Canada increases X%. in in in lower budgets. than Our to year start by are We as a year capital XXXX activity industry in is to to believe, of XXXX be grow XXXX, would in flat industry outperforming XXXX haven't stronger Drilling but Canada to activity our we current expectation indications well-positioned seen for to

and momentum impress systems continues Canada share environment. me deliver market in accomplished The our team in cross-selling what our products services they recent our a Our group base. we've growing in to with The fracturing and business challenging in and quarters of strategies across in the market, to have customer fourth continued quarter. continues market on seen that our

XXXX. comparative quarter count lower rig During revenue the our average about grew compared QX, to The XX% we as XX%. by was fourth of

our that, happen quality to effort is performance. us in declined relationships. XX% team a from efforts field competitions. our market repeat sales between efficiency continue me field, and differentiate The in The our operations. XX%. and team that is operations the of without delivering Let and customer execution can't a sales strengthening growth This excellent differentiated supporting our That true

we breadth the testing our customers as service been product, product and over and XXXX. current a well XXXX, offering has for benefiting supports service great during center that technology investment rigorous nearly the in as are from companies XX opened new of tech We center our technology capabilities, These the center highlight us. toured the development from The XXX tours initiatives.

the We're relative Canadian encouraged environment these economics positive operating by to improve our improve projects completed, crude. in Canadian now. underway to also regulatory constrained major for for developments have pipeline some should a they for time projects been who customers are related If egress

and reflecting and to expect completion to product XXXX. service customer likely expectation the capital spending lower the increased will to well to efficiencies impacts single pricing our count as current and digits, For less fall XX% some be in the would lower by We compared severe, U.S. count lines. by XX% is

are offerings. we to and our sales believe, market cost applications introduced where especially continued the in all Repeat the also Within delivers fracturing our to of U.S. We specific well-positioned operational share key to fracturing overall to target Precision. systems we our fracturing recently pinpoint gains for recovery efforts within stimulation savings Many our and through systems continue enhanced systems, targets benefits are customers. outperform customers

use inherent North spending our continues to and HST very performance PurpleSeal advantages outperform significantly its the customer competitive of a increasing America X% with to XXXX XX%. a believe to limited Precision grow This markets international setting in tool. plug that are We illustrates in space. share Repeat robust of [ph] the frac likely capital

which half. responsible to in for half base, to of second region, revenue grow first international $XX.X in reducing million over $X any on continue customer from partially our XXXX our was the the our We single international reliance million improving

into a a significant in Argentina of XXXX, and late the in inflation. slower XXXX has a of in momentum related rebounded The has to note, stabilized here some expect period quarter. the elections considerably. positive North seasonality after We Sea first China in On there activity continue that period to activity market despite the in

and about the more its world. learn China coronavirus to continue We on and impact the

and the the by who identify hopeful of spread go all treatments the successful effective to that thoughts out we to Our virus are efforts those the contain international possible. directly are and are impacted as situation,

As impact to each economy had and North activity demand impact the supply XXXX, becoming America. is on on all have activity NCS second currently in operations, the further and completions virus expect Specific chain. week increases in world's the limited to acute during reductions we our quarter the and a China we passes, on resume risk of the of more of

opportunities gross proposition While SG&A. remain discipline, we on supporting managing committed cost value our of and to with and of and investment investments capital outperform flow and and several industry believe center us our that We years cash products our the past the including efficient we Repeat technology growth the Precision the free capital activity can our our in generation. margins services, initiatives for based increased believe in we provides expenditures reinvestment,

position current customers improve industry is in levels competitive the in to for We're decline to cost in America. very industry environment. a Continuing which North given our our activity and critical one continue

have the for environment do steps right current so if operations hesitate taken the won't industry our to change. size market again We to and conditions

We detail. while will growth modest We financial stewards remain results capital. growing financial deliver and that have of good our to in been believe now discuss cash more ask returns improving flow. and Ryan I��ll our free we can

Ryan Hummer

Robert. you, Thank

quarter's we As reported $XX.X and guidance our higher the with prior provided in call. revenues line on than release, X% fourth the of quarter year’s were midpoint fourth last quarter the in earnings earnings yesterday's million,

than In each the a guidance and quarter in driven on third fourth decreases with that U.S. the international fell in each the of seasonally fourth international sequential was we revenue quarter, quarter's the addition, basis, last markets revenue within our provided On and U.S; markets. sequential of Canada lower revenue call. the in in XX% Canada quarter

prior revenue to quarter, compared X% or and excluding revenue $XX.X year’s year in expense, total or total of of XXXX. in Gross as depreciation revenue million defined of the compared cost represented XXXX a profit $XXX fourth Full was of XX% fourth sales amortization XX% for the revenue, as quarter. less million to million decrease $XX.X

percentage margin we of guidance above gross provided the for high This the was the end quarter.

costs comparison, were than For the in of third level prior of million. compared XX% sequential a quarter’s the higher million profit million also quarter. to fourth and was year’s revenue quarter in and in administrative the fourth $XX.X $XX.X third were Selling, quarter, gross $XX.X or $XX.X million the general as

expense increase debt the single quarter, to we million guidance quarter. for the was $X.X customer, During recorded for bad which related provision to the and driver SG&A be of primary for approximately for the above a the

litigation certain share include SG&A based and non-recurring reported expenses Our Non-recurring expenses fourth million including costs. $X.X the certain in compensation totaled quarter.

million the million the as EBITDA to compared year’s $X.X $X.X EBITDA XX% percentage revenue a quarter. in in fourth total Adjusted Adjusted was prior of the fourth for was as quarter. quarter

EBITDA was revenue Our in in full million million $XX.X adjusted XXXX XXXX. to compares year of reflecting $XX.X XX% and

fourth the amortization non-controlling to quarter, in For attributable income at $X.X net $X.X and totaled million. expense million net Precision. the quarter, our depreciation reflecting interest had We income of Repeat

for average Our were the basic quarter and share diluted accounts $XX.X million. both

flow for full sheet. the flow to for the cash million operations balance was year. now in items was million and it Turning fourth Cash $XX.X quarter from the $XX.X

fourth quarter $X.X $X.X million full were Our and net capital year. for for million expenditures the the

debt had $XX full total million our million with $XX.X in was included quarter As U.S. XXXX. credit the being which a capital the result, of drawn year of million year, $XX.X and end we for revolving cash was was $XX.X million remainder flow cash, the which leases. our in for free At facility and it the million $XX.X the under

by expect in We total by during revenue $XX during quarter guidance to debt quarter $XX.X $XX million. first the for close with points the the I'll our of We reduced million million balance the be to currently million $X.X a few quarter. first year. and

million U.S. we the through year. activity and of pace to expect during first which We the believe middle accelerate slow $XX our quarter, could revenue million increased between be for $XX the the relatively reflecting

The continued strong seasonal, activity remains In share $XX and wide onset gains. in the timing $XX weather to Canada, of uncertainty to by driven million million due breakup. regarding revenue we to range to expect market XXXX driven of the a increase spring sequential in a start

also revenue million we international the million and by coronavirus. Sea our work the expect China to China, related as in $X have multiple geographies, We slowdown a to winter approximately on-going be by declines $X offset with benefit we across North seasonal from impacted to in

driven to our impacts. to fourth mix XX.X gross and quarter, margin between by relative expect the XX.X% reflecting primarily We be % a decrease geographic

expect of our in expenses. and $XX.X based includes million. reported be and over share in $X.X items between based SG&A million to We million inclusive share million $X.X and compensation $XX.X This non-recurring compensation litigation approximately

increases full in due the New first and the to payroll quarter in quarter fourth incentive to for typically the Year. relative higher accruals SG&A compensation taxes

pre expensed IPO and expense in May leading the as We options our decline compensation based to expect share will to be fully during reduction quarter beyond. year, the in our a second

based will decline we In respect thereafter in the expect of our matter. to a as significant XXXX compensation expense awards several into incentive quarter percentage non-recurring expenses shareholders, to quarterly for under our the reported may second but share re settled we and plan to addition, measurement. This more our minimizes litigation volatility subject dilution that conclude I expect with awards. trial utilizes note phase compensation U.S. cast are our introduce to as cash

in be to We be and amortization $X.X interest our expense to and net million expense depreciation quarter approximately our first expect the we million expect first $X.X quarter.

a expenditures is reduction million XXXX between gross million, from capital to Our XXXX. $X further $X expected for

may opportunities, to that support at move the profiles we our Repeat continue especially on capital business would earnings cash business. of have evaluate forward investment, We they If and power return attractive with cash additional to were Precision. enhance such opportunities

that we night. the investor XX in I posted NCS’s refer free to take of you generation XXXX. would presentation discuss slide next I'll cash few the minutes to flow last

adjusted based for adjusted not the from EBITDA EBITDA cash an As guidance, year EBITDA, cash arrive walk we'll through sources any free we of are less to uses this compensation. to EBITDA illustrious bridge providing illustrative full and flow share or simply at

the and from Beginning as $XX share impacts for million awards, impact our have with We less compensation. midpoint EBITDA related the year. of based figures those these the any utilize million a share based provided. cash summary we’ll of in adjusted be add re-measurement to items XXXX number ranges during compensation for This the excludes Several to would $XX range, settled potential minimal. the cash bridge

at $X the we for there, the end cash to litigation we cash XX% XX% comprises and taxes approximately revenue, lower flow, of cash interest, are other expenses. towards deduct including working typically XXXX. million range capital $X Year-end and runs our of million that focus From that on in with achieving NCS items working to annual non-recurring

$XX when adjusted million. based share net bar I provided of $X our these approximately flow compensation as our of $X The in of that million. adjusted EBITDA sum results of the million The is equalling million. XXXX to to $X next minus free represents free in earlier to based earnings CapEx translated spoke very less This share less million release $XX.X similar items to bridge cash cash EBITDA compensation, flow

now I’ll over to for closing remarks. hand Robert it

Robert Nipper

Ryan. you, Thank

Before market our strategy Canada, fourth accomplishments. strong up capitalize quarter the open our highlight count. reduction a Q&A, team In in like our cross-sell a is call I'd services market to increase XX% products fully on our we and year-over-year for share and rig our some basis by revenue XX% We to presence. despite on executing of to increased on

fracturing for more the increased share has In demonstrating and continued than we first our the gains. In addition, Repeat wells had completed half second we we Precision XXXX, quarter. customers which performance to XXXX, strong of in into in see in did of in systems U.S. the activity market we our XXXX continue

markets, medium North term We which continue near we outlook to grow stable presence our a do believe than more America. international in have and

in should each year. on-going and steady We the have which the Argentina, throughout Sea, Oman have work activity North

services trials upcoming later We East year. in products this and for have multiple Middle the

a brief comments. of couple with close I'll

is NCS their more technologies that assets. in focused face America continue and environment. optimize to helps positioned challenges spending customers our a to deliver operate efficiently value of reduce portfolio to the as believe, customers I in activity We North continues industry this levels. of especially Our and significant succeed

pursuing are we more growth international We markets expect revenue to in grow of XX% this to our accretive including than which year.

our are current the for and on cost environment. spending capital We optimizing structure focused

One We footprint this maintain by a a that us supported two, example is from expense is to capital. allowing free Capital of additional with balance consolidated cash rent generation model, our reduce strong Houston area we and our Light facilitates flow facilities three recently to business which minimal sheet.

priority flow financial free cash top is growth. Our

be take your With that, questions. happy we'd to

Operator

[Operator you. Ian with MacPherson And first question comes Thank from Instructions] Simmons. our

Your line open. is

Ian MacPherson

performance things. congratulations Thanks. other there Good Canadian among morning and strong really on especially Ryan, Robert the

companies You mentioned Robert, some I little products. heard completions the one, talking the intensity what expand about commercializing about Can a speak talk you Can other to in on plug-and-perf bit? you your we've increasing, side. new three on Or that you rollouts strategic priorities know that new downhole number cluster other translates product that on that point of from technology how made? sleeves?

Robert Nipper

There's That talk versions customers, we're cost they about I that would things savings one, sliding sure. of cluster out -- from toward going sorry a number today. leads products were are sleeves a our today is, that. with not the touches Yes, that lead would to But what few efficiency. forth that that on -- about some say where coming of give are newer that

the a position even ones improved we've that over that some three have So, system. more sleeves sliding -- the of recent recent had,

position that's So closed. have they a

well, a third use the for that applications, open, a well. want be to can So be frac move choke provides in the in sleeve the place. And position injector running which It well sleeve the in future project be that customer then they if as decides to the through. can submitted can

to for once And be capital position, be additional expense could injection. very little So all be that can in placed controlled that be sleeves to injection the are make that the used it choke any conversion. can with used able if lateral

tracer come they makes near at working make other today. new composite the than finally, support first looking the We're a with in progress And we're past, as of plug the additional continue well that plugs introduced then we've to expect project in past when you our to efficient things and some which on it’s product are EOR it Some diagnostics, even term guys, some our out tracer as and working changes also our composite project. term we some about in talked we've on that we line, in for more are in tracers, as products longer said the that lines. to the

some we down as additional have year some But generated learn last the in revenue schedule to expect later products road. we That's for for the and the with have and this already of year. additional more We the long-term a --we've well investing field as it opportunities near-term opportunities. year trials of we're expect trials in those scheduled play

Ian MacPherson

keying all which that see international on Thanks the And a average for America? right. maybe profile markets can of above North the year for color. side, That's growth bit the you on are expand this then little outside you

Robert Nipper

Yes.

the markets internationally opportunities that of would be in think Sea the in on focused for North in and we're growth I two terms Argentina. most

for online that type in the come several project, BP spurred and with there more to also our continue with operators success using the we has to has other We're BP with service having been the Aker hope and see that that As by area had this whole working BP Aker were the we increased other technology. of activity that efficient, conversations project. companies -- has team gotten

turned the for pretty And hyperinflation, that longer-term and Argentina, year. as and political And Argentina going Last achieve was in the terms we turned work mentioned that us. in be -- locals there was the the about were the customers the we're exception the in didn't to being corner with just E&Ps, I down more but fact the an joint it's pretty then but longer-term of was revenue, have seen awarded the exciting year local that that's that in last. it now shut before. operators have virtually conversations in of able seeing it that's year how the second that ventures a with looks annual In long international this last like rough it -- just now the basically corner the no Argentina half So of of first industry quarter not with that the in we the to activity. half comments, programs. year and environment area we've But having with longer-term

we we where a other the over But So actual as pickup been areas in work the we've number couple areas also last field think for that's us. in we trials and internationally. well progress years of we that have that us for new making have scheduled

So investing us, that's it's earlier, as I it. for -- a opportunity in growth and said we're

Ian MacPherson

the all and good for luck Thanks this good color morning Well. for XXXX. Appreciate it.

Robert Nipper

Thanks. Ian.

Operator

Thank you.

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

Your line is open.

George O'Leary

morning, Good guys.

Robert Nipper

George. Good morning,

George O'Leary

Just that's from you're wondered XXXX? geographic strokes in of -- broad any how progressed fracturing perspective, more notable I any or seeing for changing And moves brush into U.S. systems if in as U.S. where you in XXXX? your the the there basins Are we frame then, mix systems any the a adoption could your in XXXX?

Robert Nipper

George. Sure,

cases As And than we've more those. U.S. in well works so talked basins. value many before, and technology, on are we completions found we value specific market applications areas add multiple geographically competing in pinpoint the and those focused in stimulation where

So Appalachia. parts then, starting in the the the of some -- in New works in in areas we in really also a and Rockies, some interest up there few and are the Mexico, well. Permian, Mid-Con, to the And there see Texas both of areas where technology see basins

where well. So I more get we maybe we able but and increased Permian say some it about would areas areas activity we're from as seeing the to the think primarily, also Rockies,

that were we things the frac with that infrastructure it. the market came horsepower was fleets double the and requirements with struggled up U.S. doing than to methodology; One And for for set past pinpoint. being more struggle when in the setup we into was plug-and-perf completion plug-and-perf sized support the with we predominant the for of was first

built go that as big the So twice needed a big as would job, be, twice -- when than we frac was more than Its as more disadvantage with out to as pinpoint it also us it location, if fleet twice one. and do to a that that's can't would reduce cost on up. struggle required. from horsepower show be its day to because we something cost the we And not a needed with

last and accordingly. found and companies price willing size us But their over frac fleets the more more frac work that need we months, recently we to size with it the few actually to

a job with so, the with and And together. we're with. We've And it advanced frac jointly like momentum couple spreads tubing, working are technology frac packaging we're the doing the little pretty that. a with pinpoint coiled now of them already that with bit we're of companies stimulation that looks started where getting

So, it does more up that we especially if But that have that does make applications. with single seen may continue open don't that other competitive we today. have pinpoint opportunities plug-and-perf in well then

George O'Leary

very guidance quarter down XXXX, sequentially think helpful very I question next cited And is were equation. in you the color, of And side the a then margin first mix. Thank were margins That's you. of strong gross the Robert. in from The the on margin respected quarter. the fourth

quarter. just what, in forward side is onion mix? little on that that better one in the look the that as of bit we peel cost margins first So, product in to Is quarter? fourth on gross you equation back then of a And And can think mix the the the mostly change geographical that margins? terms drove driving the

Ryan Hummer

the Yes. Sure, that those to to we driven the think George. was there. This in and flow-through respect was XXXX. just good specific we relationships advantageous had a have the is that necessarily vendors are fourth don't performance into I Ryan. impacted With certainly that that And did some through of bit quarter. margin fully quarter with the as There very quarter,

product really mix we standpoint certain it more continuing does Although has expect of basis. geographic than those it from And arrangements benefits provide the to a on to be line.

very, a taking time. has market job guidance strong for As been low-cost faced revenue you that can in environment and market. have for gave, a the growth very great long we there share. doing market been and a there But Canadian a been the long And very very we've see growing competitive our operators that with there is time with the

tend to bit the skinnier. So, be margins a little

drives that QX in bit. the share Canadian the in growth margin see we a down So

quarter-over-quarter international, compared piece see other service to a market slightly down and going America. to participate international in in The that as be tend that less far a we lines part mix. that therefore, of to North The product of the to number the build is and is lower guess we the that competitive as competitors as I

it mix. geographic that's nothing a product standpoint, service So specific to from or really

George O'Leary

system Okay. in That's exact more Canada share side taken Can on just brush have share frame seems quarters. I in if especially there number? an you broad in fracturing the market in one sneak quick fourth guys super helpful. the may your be notable even strokes not you one if the But I'll up business like could. of

So you sit guys think from Canada? do perspective up a share where you in market

Robert Nipper

is our We are XX%. market to there Yes. the of XX% now in believe range share

George O'Leary

I'll right. over. back All turn Great. Thanks. it

Robert Nipper

Thanks, George.

Operator

Thank you.

next question from comes with JPMorgan. Sean Our Meakim

is line Your open.

Sean Meakim

morning. Good Thanks.

Robert Nipper

morning. Good

Sean Meakim

So, we XXXX. America? on half we SG&A, run, you've XXXX scenarios if maybe I'm North curious of even back in current Or remain the into what in other environment in the E&P out spending cost a decline if see

the position market, mean, modest that understand I limitations your to but just pretty the the outgrow moment the at environment. the I is of So, delta given

upside you're cash Or you to where boost trying So near-term? curious just free levels? flow satisfied an seems that balancing free to boost that's optionality on area we how versus cash? it I'm cash could current like with are at holding

Robert Nipper

is This Sean. Robert. Yes,

required market We our we are what changes on now levels make outgrow $X that way prepared reevaluate sized the turns market that flow structural an now of said management, primarily not grow think are We as we annually. made in right that's changes. restructured to we we about continue the based able a million fully believe to in year for we savings But right personnel. organization of or then we're annual and we're intend Ryan at that some They'll no, a market. some of We restructuring the and last took achieved XXXX terms versus never as in we early, cash We about earlier, SG&A you as expectations layers expected we perform not XXXX. free out costs as and -- adjustments. -- to more if satisfied. had know, We said So, we to to are the in we required.

Sean Meakim

tracer's you Okay. about talk I Can business. that. Fair a little enough. appreciate the

I the seeing you more those from slowing intensity as customers? products the So, the in mentioned you demand in they're of new Are US know, down. works. Maybe

to willingness a adoption a that curious of more seeing a Just discretionary of that new look Or more is there's spend? field Sometimes today? the technology. you're tracer in at finding how

Robert Nipper

seeing broadly. I'd bit a of a Tracers say, we're customers and that are Yes. as using pullback,

that So almost market smaller for like of operators progressed would of some the has They worked from view some a a budget with. that in science I the Tracers we've cases. that as say some bit

there. So we have pullback some seen

However, It customers we or still like the competitor some we own the very and line. reasons, the of terms terms just few service But market. of larger our in any now. who holding levels market continue Tracers a in our other competitive right we're It's very, share. same seen is There a pullback customer different customers. activity use really haven't with use for those still

that new have Tracer signatures Tracers We we've terms recently of in introduced. additional

underdevelopment at think that's And the really more capabilities have interference. to able inter-well to for interference. use look going inter-well customers to forward to more have than adoption driver is can we will We in the being we going able marketplace be to way continue Tracers the be better refine that to understand and Tracers

Sean Meakim

Got it. Great. Thanks Robert.

Robert Nipper

Thank you.

Operator

question from with And Kurt have RBC. a we Thank Hallead you.

open. Your line is

Kurt Hallead

morning. good Hey,

Robert Nipper

Kurt. morning, Good

Ryan Hummer

morning, Good Kurt.

Kurt Hallead

performance again Hey. Kudos great up in Canada on especially.

line The remarkable. any strength obvious sit. think time your is performance a in maybe competitive I over the nature. questioning So, I pretty dovetails from U.S. into of challenges the Canada where of in The given are

So market U.S. the potentially what take here in Canada potentially can got and same kind sort lessons from you the market product you in coming learned new I that share as and look the offerings and number up are penetration. move you of down you've different of here, of the at things we success? forward know Robert, mentioned making

could you So as all. light you market what in a how kind could I potentially I and here want to get U.S. down penetration? make don't that take of Canada sense to from at want to But from of general the accelerate just

Robert Nipper

really cross-selling One for big Canada occurred that's been there. the stories of has success the

systems seem the years XXX% of market share focus decision STS on But in So whenever was the the fracturing as in. then systems. was current We brought on to Tracers XXXX through primarily a XXXX really really we The through off market couple focused Canada Tracers, fracturing almost and Canada persist and Canada. a But it difficult get the were to market made coming really in of market. team declines was opportunities. in Canadian cross-selling

customers doing getting and from high some products the NCS, Canada, enough other So go start and we in interest that those could with that. of getting the have it, actually the that the up that involved getting and getting we services

them. and been that's for the been they've that's of successes, in been And reason focus because training. successful in very So strong a is one that cross XXXX big part XXXX for

cross training systems. have The the didn't place, in But with were some most We of in our team. of offer. sessions folks had formal exposure sales had products we in sales or that them services and guys we to cross -- that we they fracturing experts really -- other have that place the

aware at very opportunities. made in are could seeing of them recognize they diverse we have a them that. So where there. opportunities And spot And the now product least at more least

a would So, be a in would Canada be XXX% it we story. bit focused still different systems of fracturing on if

in and in with thing So what we that same is we took did did force training sales we U.S. same our XXXX here the the

are years. same wave lines for see now end the to product truly that And that of we So, got salespeople selling -- end the ongoing the the XXXX, of because from process. up multiple it, benefits the that they've around customers first already just where we're an to that it the U.S. is been we wrap calling on of starting around of

to So additional we're think continue that way that growth and introducing the services as with accelerate is U.S. going to I we're products the well. that coupled market in share

Kurt Hallead

Thank and us of this you the in for wonder frame if and Canada. services. the in you're I just of that. competitive products new as can the introducing U.S. cross-selling It's and of great curious doing context I you're to for both you kind color. pricing environment

Robert Nipper

very competitive. and both looking I'm in competitive Well, super U.S. the what you're exactly But it for. it's sure not Canada is

Kurt Hallead

couple helpful? last incremental it it Is to as intense it mean, just a Just been? of along certain as stabilizing the has is color extent? years, some to I really that be relative

Robert Nipper

would I down in Canada. the is driver bottom say a flat slowed it has the lot. -- in It Yes. -- for Canada, the is least down at

year every conversations we a ago having with our were So about pricing was customers. it day

little the bit seems well. leveled the always that be Canada, last months several that off seems to In it several but well. U.S. we're know. see I our it seems Is thing. wave tapered we the it ones have So that us again. seen as of we competitors haven't to over? have don't to its far before. every some than of It's out. it? it line, as more same saw If But the ago adversely over on In flattened possible. a provide, almost mean, back change another come we off. market Are going I now what it the feels U.S. customers significant we expect. service could just to like so months pressure had our the we not We not pressure But

Kurt Hallead

that. Thank great. you. Okay, Appreciate

Robert Nipper

you. Thank

Operator

this to back And you. questions. no Robert I'm the further turn Nipper to closing Thank call I'd like time, comments. showing At for

Robert Nipper

behalf to able the service our our around the but we to to dedication exemplary customer as provide the Thanks team forward interest who my base, everyone best in our repeat appreciation our research industry the that NCS, analysts that have of to bring and our the talking of to shareholders customer team and call Multistage this May. employees. the appreciate believe It team we the precision. quarterly and and especially that backs I continue the that industry. again we'd and as XXX the earnings performance grow on up. and management to our everyone's team call, We next board, NCS like On our drive I our including globe, employees at nearly we thank look is effort in well through talents, extend our on Catherine. in innovations today NCS call is cover

Operator

participating. and for you gentlemen, Ladies Thank concludes this conference call. today's

have Everyone disconnect. great day. You may now a

NCS Multistage (NCSM) 3 Mar 202019 Q4 Earnings call transcript