Good morning and welcome to Innovex's fourth quarter and full year 2024 earnings call. At this time, all participants are in a listen-only mode, and there will be a question-and-answer opportunity at the end of this call. As a reminder, this call is being recorded. Before we begin, I would like to turn the call over to Adam Anderson to say a few words.

Thank you and good morning. Regretfully, I need to start the call on a solid note. Patrick Connolly, Amberjack partner and Innovex director, passed away Monday night unexpectedly. Patrick was a father, a husband, a veteran, and our business partner. We worked with Patrick for a decade and he was one of the all-time great human beings I had the honor to be around. Anybody who knew Patrick would share that sentiment. He's everything a man aspires to be for himself or for his son, and I will forever miss him. I ask everyone on the call to keep Patrick and his family in your thoughts and prayers. Operator let's take a short moment of silence in Patrick's honor and then begin the prerecorded part of the earnings call. Thank you.

I would now like to turn the call over to Avinash Kadapa, Senior Director of Investor Relations. Please go ahead. Thank you, and good morning. We appreciate you joining us on today's call. An updated investor presentation has been posted under the Investors tab on the company's website, along with the earnings press release. This call is being recorded, and a replay will be made available on the company's website following the call. Before we begin, I would like to remind you that Innovex's comments may include forward-looking statements and discuss non-GAAP financial measures. It should be noted that a variety of factors could cause Innovex's actual results to differ materially from the anticipated results or expectations expressed in these forward-looking statements. Please refer to the fourth quarter 2024 financial and operational results announcement we released yesterday for a discussion of forward-looking statements and reconciliations of non-GAAP measures. Speaking on the call today from Innovex, we have Adam Anderson, Chief Executive Officer, and Kendall Reed, Chief Financial Officer. I would now like to turn the call over to Adam Anderson.

Thanks, Avi, and thanks to everyone for joining us today. First off, I'm very pleased by the results of the quarter. We've made great progress across all our strategic initiatives, and none of it would have been possible without the efforts of our employees. We have an incredible team of people for which I'm very grateful. On today's call, I'll provide an overview of Innovex's overarching value proposition, discuss two recent acquisitions that fit our discipline framework, and give an update on our transformation of the combined business. Kendall will discuss financial results, capital allocation framework, and our outlook for Q1. Our vision is to create a unique energy-focused industrial platform that drives exceptional value and service for our customers and exceptional absolute returns for our shareholders. Since Innovex's inception in 2016, we've generated strong financial returns on capital employed, not just relative to traditional energy service companies, but returns superior to the S&P 500. To achieve these returns, we've curated a portfolio of what we call small-ticket, big-impact products, employing a capitalized business model. Our portfolio has been curated to focus on technology-enabled consumable products and high-margin rental technologies. Given the nature of our product set and our lean operating model, Innovex has historically required a negligible amount of CapEx to sustain and grow our business. Consequently, under normal business conditions, we convert somewhere from 50% to 60% of our EBITDA into free cash flow, which allows us to fund organic and inorganic investment opportunities, targeting returns in excess of 20%. To drive innovation and organic growth, our no-barriers culture is paramount. No barriers mean eliminating all the barriers between ourselves and our customers, as well as within our company, to ensure that we're elevating the experience for everyone. Our culture drives innovation and customer loyalty, as evidenced by…

Thanks, Adam, and good morning everyone. I'm excited to discuss our first full quarter of combined financial results following the NFX Dril-Quip merger. As a reminder, we closed on the merger with Dril-Quip on September 6, 2024, meaning that Dril-Quip had limited impact on our Q3 results, while contributing fully to our fourth quarter numbers. Innovex was the accounting acquirer in the merger with Dril-Quip, so historical comparative periods prior to Q3 2024 reflect legacy NFX stand-alone results. In addition, we closed the acquisition of DWS on November 29, 2024. So Q4 results include one month of DWS performance. Finally, our Q4 numbers reflect only partial realization of our merger synergies with Dril-Quip as those cost savings were phased in over the course of the quarter. In summary, we are pleased that our Q4 results are beginning to demonstrate the earnings power of our platform with further margin enhancement opportunities in 2025 as Dril-Quip synergies are fully realized and the DWS business is fully integrated. Our full year 2024 revenue was $661 million, an increase of 19% year over year, primarily driven by the merger with Dril-Quip. Fourth quarter revenue was $251 million, which is an increase of 89% year over year and 65% sequentially. The increase is driven primarily by the impact of the Dril-Quip and DWS acquisitions. As a reminder, we evaluate our revenue geographically by separating our shorter cycle onshore US and Canadian operations, which we refer to as NAMs from our longer cycle international and offshore operations, which include offshore US. Our Q4 NAM L revenue of $103 million increased 5% as compared to Q3 revenue of $98 million primarily as a result of the Dril-Quip and DWS acquisitions. On a pro forma basis, our 2024 NAM land revenue was approximately $491 million a decrease of…

Thanks, Kendall. This was a remarkable quarter. We achieved our 1st year synergy target and our largest acquisition to date in the first few months after close. While achieving early wins with Dril-Quip, we were still able to close on an exciting accretive acquisition. We took a significant step to improving margins, returns, and customer experience with the announced plan to sell the Eldridge facility. We've launched a share buyback program providing us with the new means of returning capital to shareholders which will compete with our inorganic and organic investment opportunities and help us maximize ROC. We've maintained a net cash balance sheet and continue to expand our addressable market. We're very excited about what we've already achieved and look forward to sharing more with you as the year unfolds. We'd like to now open the call for any questions, operator.

[Operator Instructions] Our first question comes from David Smith from Pickering Energy Partners.

First, I just wanted to offer my sincere condolences for the loss of Patrick. That was tragic to hear. Thank you. And my question is a little bit long, but, if I think about the history of Innovex, there, there's a long track record of new technology development organically, also a really good track record of identifying and acquiring promising technology like, the DWS acquisition. Legacy Bill was well regarded for its engineering and product innovation, and I hope it isn't too early to ask, but with the combined product offering and R&D efforts, I'm curious if there are any potential new technologies that stand out and get you excited about future commercialization opportunities.

Yeah, thanks, Dave, and I would agree with with everything you said there. Yeah, I think we're really excited. I mean, one of the opportunities we described on the call is this integration of the legacy Dril-Quip expandable liner hanger where they've really got a better expandable liner hanger than anybody on the market combined with some of our next generation centralizer technology from Innovex. We're really able. To in that specific example and some other kind of kind of similar casing string sizes really provide a unique solution where we can provide something much more fit for purpose. We can save the customer rig time, fluid loss expense, and do it all at a, an attractive price point for them and at a margin that's, excellent for us. So that that one stands out first and foremost as the nearest term one. I think longer term we started to have some conversations about taking that next, kind of one step further. We have a really important big deepwater operator who we've been talking to about kind of transforming their casing design to eliminate a whole casing string in one of the important deepwater basins, and it requires And changes to the well head to the fabrication of the wellhead, to the casing connectors to the liner hanger, to the centralizer float equipment and some other specialty tools, and we're really the only folks that can bring all of that together. Now an opportunity like that is going to take a couple of years to unfold because all of these deepwater operations, as are highly engineered and thought through. So that's going to take a little bit of time to evolve, but I think there's a lot of opportunities like that. In the deep-water market that we're just starting to kind of scratch the surface of. No, it's great to hear. I appreciate the color and my follow up if I may, just regarding the potential sale of the targeted sale of the Eldridge facilities, are you able to share, any color on the range of potential proceeds you would expect from selling the campus? And if not, is there any reason we shouldn't consider the prior two carve out from that campus as good indicators on a, $1 per acre range.

Yes, no, it's an important question. So, we are looking to exit that entire campus just to give people a sense. We do have a very competitive process ongoing as I mentioned on the call so I think given that dynamic that we're actively in the market right now with the number of interested buyers, I don't want to comment too specifically on valuation, but I will say that given the level of interest we're receiving, we're very optimistic that we'll be able to complete the sale this year at an attractive valuation.

Our next question comes from Eddie Kim from Barclays.

Hi, good morning. Wanted to start off asking about your guidance for the first quarter, which is more or less flat, quarter over quarter, which is somewhat counter to the typical seasonal decline we usually see across the industry from 4 to 1Q. Is that mostly just due to a full quarter contribution from DWS or or is it a function of perhaps a better outlook that that sort of bucks the seasonal trend? Just any thoughts. That would be great.

Thanks Eddie and thanks for joining the call. Yes, you're right, we are going to benefit from two, full, two additional months of impact from DWS in 1 2025 versus Q4, and then that's going to be offset by a little bit of the seasonal weakness that you. That you talked about there and in particular we're seeing, as we said in the press release, the Mexico market looks pretty tough to start the year as most folks are aware and then our Gulf of Mexico business, very strong business, but probably a little bit fewer deliveries in Q1 than we would we would otherwise have a kind of offsetting that improvement from the picking up the extra DWS months.

Thanks for that clarification. So I didn't see full year 2025 guidance in your slide deck, but I'm going to give it a shot. If I just take your first quarter, even a guide, then assume kind of a seasonal rebound in second quarter, fourth quarter, and maybe a bit of a drop off in 4Q. I'm getting to roughly $200 million in adjusted even now for the full year. I am that in the ballpark of how you're looking at the year progressing or? Are there certain things I should be taking into account that I'm not thinking about, just any thoughts there or how you see the year progressing would be great.

Yes, no, fair enough. So, I think just from a policy standpoint we're not planning to give full year guidance. I think one of the key things about our business is we run a very flexible business model which has a lot of benefits of our customers choosing to work with us every day, not a lot of locked in long term pricing allows us to stay very flexible, especially given, some of the uncertainties we see in the market right now. I think that's a benefit, but it does mean we tend to focus more on quarter ahead guidance for these types of discussions, but I think that being said, nothing major that we we see that would say that's not in the ballpark, although we are, as continually in the market evaluating potential exciting acquisitions and things like that. So there there certainly could be things that change.

If I could just squeeze one more in here. My follow-up is just on the MSA you just announced with 1sub-C on sub-C wellheads. I was under the impression that the legacy drill clip was already supplying its subsea wellheads to OneSubsea for certain projects. So could you just expand upon what's new here with this MSA? And going forward, I mean, is it fair to assume that all or at least most of OneSubsea's development projects will likely utilize your subsea wellheads? Just any thoughts there?

So I'm really excited about the One Subsea partnership. I would say this is an evolution. Yes, there's been a loose partnership for some time, but we've received the first concrete orders from them that I referenced in this Asia PAK project. And then I would expect a couple of more similar size awards to happen, you know, first half of this year. So I think we're seeing a lot more traction with it. So this is a little bit more of a formalization of the good work that's been in progress for a while. Longer term, I would say I think it's incumbent on Innovex to do a great job for 1sub-C so that we can continue to grow that. We've got some great technology. We've got great people. As we improve our deliveries, continue to service 1sub-C well, I would hope to see that expand pretty substantially. But it's still early days on that.

Our next question comes from Arvind Sanger from Geosphere Capital.

Just a couple of, quick follow ups. One is, with this elder's facility, potential sale happening later this year and whatever you're doing to consolidate, are there additional synergies that might come through, or are, or in other ways are all the synergies that you had hoped to squeeze out of the drill quick, merger and acquisition is that all done by now?

Yes, no, thanks. It's a really good question. So I would say in our original synergy number that we put out at the time of the merger, we did contemplate some savings from facility consolidation, including the Eldridge facility. You know, that is definitely a potential upside as we move forward here. A key reason we've been able to achieve the $30 million target much faster than expected is that a lot of those savings to date have really focused on SG&A overhead. So, as we get into some of these things that are longer lead time, like facility consolidation and streamlining the operations along that, we do expect there to be additional savings, and that will be really a key step to helping us achieve that long-term EBITDA margin target of 25% that we sketched out on the call.

And a second question related to this$ 100 million buybacks. At the same time, you continue to be opportunistic about acquisitions. So how do you think you will kind of space out this buyback vis-a-vis acquisition opportunities you may come across? So how do you balance kind of how quickly you do one versus the other?

Yes, I think the benefit of the buyback is it really gives us the flexibility to evaluate M&A opportunities versus the buyback in terms of what's going to drive the best return. So, we'll pay attention to valuation and liquidity in the stock, maintain good flexibility in how we're deploying capital, and really just evaluate that versus the opportunities that we have online.

So, the buyback is going to be spread out, or how are you thinking about the buyback itself, kind of, how would you go?

It'll be spread out. I don't think we're going to give any specific guidance around, timing of deploying the dollars, but it'll be spread out.

Thank you. We have no further questions. This concludes today's conference call. Thank you for participating. You may now disconnect.