Greetings and welcome to the KLX Energy Services Fourth Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ken Dennard. Thank you. You may begin.

Thank you, operator, and good morning, everyone. We appreciate you joining us for the KLX Energy Services conference call and webcast to review fourth quarter 2021 results. With me today is Chris Baker, KLX Energy's President and Chief Executive Officer; and Keefer Lehner, Executive Vice President and Chief Financial Officer. Following my remarks, management will provide a high-level commentary on the financial details of the pro forma fourth quarter and 2022 outlook, before opening the call for your questions. As a reminder, on September 3, 2021, the Board of Directors adopted the fourth amended and restated bylaws of the company to change the company's fiscal year-end from January 31 to December 31, effective December 31, 2021. As a result, the company's current fiscal year was shortened from 12 months to 11 months and ended December 31, 2021 and is referred to as the transition period. KLX has changed its reporting cycle to normalize its year-end reporting schedule and improve comparability against its peers. The transition period financials were included in yesterday's earnings release. During today's call, management's comments will focus on pro forma three-month comparative results for the periods ended September 30 and December 31, 2021 to present a more meaningful dialogue during the conference call. Additionally, there will be a replay of today's call that will be available by webcast on the company's website at klxenergy.com and there'll also be a telephonic recorded replay available until March 25, 2022. More information on how to access these replay features were included in yesterday's earnings release. Please note that information reported on the call speaks only as of today March 11, 2022 and therefore you're advised that time-sensitive information may no longer be accurate at the time of any replay listening or transcript reading. Also, comments on this call contain forward-looking statements within the meaning of the United States Federal Securities Laws. These forward-looking statements reflect the current views of KLX management. However, various risks, uncertainties and contingencies could cause actual results, performance or achievements to differ materially from those expressed in the statements made by management. The listener or reader is encouraged to read the annual report on Form 10-K quarterly reports on Form 10-Q and current reports on Form 8-K to understand certain of those risks, uncertainties and contingencies. The comments today may also include certain non-GAAP financial measures additional details and reconciliation to the most comparable GAAP financial measures are included in the quarterly press release which can be found on the KLX Energy website. And now, with that behind me, I'd like to turn the call over to KLX Energy Services' President and CEO, Mr. Chris Baker. Chris?

Thank you, Ken, and good morning, everyone. Thank you for joining us today for KLX Energy Services Fourth Quarter 2021 Conference Call. 2021 was a year of positive change for KLX. We finalized the successful integration of the QES merger in the first half of 2021 and have benefited from larger scale and a reduced fixed cost structure as the business and markets have continued to rebound off the 2020 lows. We have created one of the strongest teams in the industry with a platform delivering a comprehensive suite of drilling completion and production products and services to a large diversified customer base across all major geographic basins. Post integration, we streamlined our operational footprint, modified our product service offering by location to optimize our cost structure and relocated assets geographically to maximize margin. We've retained what we believe is one of the strongest teams in the industry that has demonstrated the ability to successfully integrate large-scale acquisitions and all of these contributed to our approximate 74% growth in calendar Q4 2021 quarterly revenue when compared to Q4 2020 levels and adjusted EBITDA improved $21.6 million over the same time period on an annualized basis. From a market perspective, WTI price, rig count and frac spread count improved 55%, 67% and 76%, respectively over the course of 2021. We experienced a significant decoupling of market activity and commodity prices beginning in Q2 2020 driven by public E&P capital discipline which has led to the most muted recovery during the industry downturn in modern oilfield history. In the last few weeks, oil prices have been extremely volatile driven by the Russian invasion of Ukraine. We keep the Ukrainian people in our thoughts and prayers and believe it is too early to understand the medium and longer-term impact from the domestic and…

Thanks, Chris. One macro comment before jumping into the details. As Ken mentioned, at the start of the call, please note that, we modified our year-end to align with calendar year-end of December 31. And as a result, our transition 2021 and transition Q4 2021 are 11 months and two months respectively. Due to these transition periods being truncated, I will focus the discussion on today's call around the pro forma calendar quarter details provided in the Q4 earnings release. I'll begin by discussing our pro forma calendar fourth quarter 2021 consolidated results. The calendar fourth quarter ended December 31, 2021 pro forma revenues were $145 million, an increase of $16.7 million or 13% as compared to the pro forma revenue for the third quarter ended September 30, 2021. Revenue growth was driven by broad increases in drilling, completion, production and intervention activity across the majority of our core geographic markets and we experienced modest net pricing gains across the majority of our product lines. On a product line basis drilling, completion, production and intervention products and services contributed approximately 29%, 50%, 12% and 9% to revenue respectively for the pro forma fourth quarter of 2021, which compares to 27%, 48%, 15% and 10% and pro forma Q3, 2021. Pro forma Q4 adjusted operating loss was $8.9 million. Adjusted EBITDA and adjusted EBITDA margin were $6.7 million and 4.6% respectively for the same pro forma fourth quarter. Pro forma Q4 adjusted EBITDA improved by 63% or $2.6 million when compared to calendar third quarter ended September 30, 2021. Pro forma fourth quarter adjusted EBITDA benefited from standard year-end accrual on lines related to PTO and other items. On an annualized basis this would imply a $26.8 million run rate for Q4 2021 and when compared to our year ago pro…

Thanks Keefer. I will close the call by discussing our forward outlook. Looking at the first quarter of 2022 and full year, we believe that a constructive commodity price environment is here to stay. Despite the current geopolitical climate, amid the Russian invasion of Ukraine that has helped drive energy prices materially higher, the macro supply and demand fundamentals were setting up to drive material incremental activity in the U.S. onshore drilling and completions market before the recent turmoil. This fact, combined with the fact that, quality assets and crews will be at a premium as the market continues to expand, due to asset attrition, supply chain issues and the tight labor market makes us optimistic about 2022. We have been awarded sizable packages of activity and materially improved pricing across a range of product and service lines. Given the positive momentum, we have built through extensive cost rationalization via synergy realization, our improving customer mix and the strides we are making in R&D and technology there is significant operating leverage in the platform today that we expect will position KLX for material improvement, as market activity and pricing continues to move in our favor as we navigate through 2022. 2022 got off to a slow start due to seasonally slow activity in January and normal Q1 weather issues in February, coupled with supply chain disruptions and Omicron-COVID quarantines. However, we have settled into a considerably more active market in Q4 2021 and are bullish about the remainder of 2022. As we progress through the remainder of 2022, we expect strong sequential growth and expect to generate a 35% to 45% revenue increase compared to pro forma calendar 2021. In closing, let me once again thank our employees, customers, vendors and shareholders. We are encouraged by the macro backdrop and believe KLX is uniquely positioned to deliver superior operational performance and generate improved returns in 2022 and beyond. With that, we will now take your questions, Operator?

Thank you, Operator. We are very optimistic about the outlook for the remainder of 2022. I'd like to reiterate my appreciation to our team in the field, who continue to drive our business forward. Thank you once again for joining us on the call today and for your interest in KLX Energy Services. We look forward to speaking to you again next quarter.

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time. And have a wonderful day.