Greetings, and welcome to the KLX Energy Services First Quarter 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. I would now like to turn this conference over to your host, Mr. Ken Dennard, Investor Relations. Thank you, Mr. Dennard. You may begin.

Thank you Operator, and good morning everyone. We appreciate you joining us for KLX Energy Services conference call and webcast to review first quarter 2022 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 first quarter and the outlook before turning the call over to questions. There will be a replay of today's call that will be available by webcast on the company's website at klxenergy.com. There will also be a telephonic recorded replay available until May 27, 2022. More information on how to access these replay features were included in the yesterday's earnings release. Please note that information reported on this call speaks only as of today, May 13th, 2022, and therefore, you're advised that time-sensitive information may no longer be accurate as of the time of any replay listening, or transcript reading. Also comments made on this call may 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 reconciliations to the most directly comparable GAAP financial measures are included in the press release, which can be found on the KLX Energy website. And now, 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’ first quarter 2022 conference call. The broader market backdrop continued to improve throughout Q1. U.S. rig count was up approximately 34% during the quarter. Frac spread count was up approximately 7% sequentially. Crude prices averaged over $95 per barrel, and natural gas averaged $4.67 per MMBTU. The fundamental backdrop is as positive as we have seen in years. The one caveat continues to be a somewhat muted response by our customer base as they continue to focus on capital discipline and returning capital to their shareholders. Looking at our financial results for this past quarter, I am pleased to report that our revenues were up 5% sequentially to approximately $152 million, which was in line with our prior guidance. It was a slow start to the year. However, monthly results improved throughout the quarter as both activity and pricing improved, and we exited the quarter on a high note in March. Utilization has improved across the board. We are effectively sold out in several service lines, including tubulars, many common sizes of BLPs, accommodations units, and the two frac spreads we are running are now experiencing very high utilization. As for the other core service offerings, Q1 utilization for our coiled tubing, directional drilling, and wire line fleet was 30%, 32%, and 23% respectively, providing us with additional asset capacity across these service lines to deploy into the market as it becomes warranted from a pricing and returns perspective. Jumping to the pricing side of the equation, the pace of pricing improvements for our service portfolio is accelerating, and we experienced materially improved pricing as we exited Q1 and into early Q2 in the range of high-single to low double-digit sequential percentage increases…

Thank you, Chris. One macro comment before jumping in. Please note that as of December 31, 2021, the Company changed its fiscal year end to align with the calendar year with the result being that our Q4 2021 has two months instead of three. Due to this truncated prior period, I will focus the comparisons of Q1 2022 results with the pro forma three-month fourth quarter ended December 31, 2021. I'll begin by discussing our first quarter 2022 consolidated P&L. For the first quarter ended March 31, 2022, revenues were $152.3 million, an increase of $7.3 million, or 5%, as compared to revenue for the pro forma fourth quarter. Revenue growth was driven by broad increases in our drilling, completion, production, and intervention activity across the majority of our core geographic markets. On a product line basis, drilling, completion, production, and intervention products and services contributed approximately 28%, 50%, 12%, and 10% to revenue respectively for the first quarter of 2022. Adjusted operating loss for the first quarter was $9.5 million. Adjusted EBITDA and adjusted EBITDA margin was $4.9 million and 3.2% respectively. Adjusted EBITDA decreased by roughly $1.8 million compared to pro forma fourth quarter. As Chris mentioned, and we discussed on our prior call, Q1 was negatively impacted by a very slow start in January, weather in seasonality, COVID quarantines, general inflationary cost pressures, and stand up costs as we prepared for the March activity and price inflection. Further, we recognized additional personnel costs in Q1 relative to pro forma Q4 related to the annual reset and payroll taxes and our 401k match, which was reinstated in December, 2021 and only burdened one payroll period and our pro forma fourth quarter. These two items accounted for approximately two-thirds of the sequential decline and adjusted EBITDA when compared to…

Thanks, Keefer. I will close the call by discussing our forward outlook. Looking at the second quarter of 2022, in the full year, we believe a constructive macro backdrop will persist. As you know, I have spoken in the past about how rising commodity prices have disproportionately benefited EMP companies in the early stages of the market upcycles. This has largely come at the expense of oilfield services companies as the fragmented nature of the industry and surplus of available equipment kept pricing power at bay. However, we are now at a point where the available supply is equivalent and available labor force cannot keep up with demand, and as a result, we are able to attain greater levels of pricing power that were possible in the recent past. As pricing returns, we're hopeful that margins for the services space will return to more historic normalized levels in the near-term; late 2022 and into 2023. Ultimately, the OFS industry has to generate sufficient returns towards the investment required to maintain safe technologically-advanced assets in order to continue to drive efficiencies for our customers. In summary, while 2022 got off to a bit of a slow start, we have quickly settled in to a much more active market, and are very bullish about our prospects for Q2 and the remainder of 2022. For the Second Quarter, we expect to see revenue increase again with a sequential uptick in the range of 16% to 20% driven by further improved utilization across the service lines with additional assets to be deployed into the market coupled with pricing gains in service lines, where the market is the tightest. We expect adjusted EBITDA margin to be in the range of 7% to 9%. Going forward we expect strong growth in pricing and continued improvement in utilization to compress whitespace, to drive sequential improvement in both revenue and adjusted EBITDA as we progress through the remainder of Q2 in 2022. As I mentioned earlier, we exited the quarter on a $692 million revenue run rate, which is above our previously stated guidance for 2022 and expect to see further improvement as the year progresses. Our updated revenue guidance for full-year 2022 is $690 million to $710 million and believe there's still some conservatism built into this estimate, depending on fourth-quarter seasonality and potential budget exhaustion. In closing, let me thank our employees, customers, vendors and shareholders for their support. We are encouraged by the macro backdrop and believe KLXE 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 once again for joining us on today's call and your interest in KLX Energy Services. We look forward to speaking with you again next quarter.

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