Good day and thank you for standing by. Welcome to the fourth quarter 2021 NCS Multistage earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star, one on your telephone. If you require any further assistance, please press star, zero. I would now like to hand the conference over to your speaker today, Ryan Hummer, Chief Financial Officer. Please go ahead.

Thank you Victor, and thank you for joining the NCS Multistage fourth quarter and full year 2021 conference call. Our call today will be led by our CEO, Robert Nipper, and I will also provide comments. I want to remind listeners that some of today’s comments include forward-looking statements such as comments regarding our future expectation for financial results and business operations. These statements are subject to many risks and uncertainties that could cause our actual results to differ materially from any expectation expressed herein, including the impact of the COVID-19 pandemic on the global economy, oil demand, and our company. Please refer to our latest Securities and Exchange Commission filings for our risk factors and cautions regarding forward-looking statements. Our comments today also include non-GAAP financial measures, including adjusted EBITDA, free cash flow, and net working capital. The underlying details and reconciliations of non-GAAP to the most comparable GAAP financial measures are included in our fourth quarter and full year earnings release, which can be found on our website, ncsmultistage.com. I’ll now turn the call over to Robert.

Thanks Ryan, and hello to everyone joining our call this morning. I’ll review our performance and accomplishments in 2021, how our actions during 2021 have positioned us to capitalize on the growth opportunities we have ahead of us, and our strategic objectives for 2022. Ryan will follow and cover details of our quarterly performance. 2021 was marked by an increase in underlying industry activity from the trough levels experienced in 2020. Completions activity in the U.S. outpaced drilling activity, especially early in the year as the inventory of drilled but uncompleted wells was drawn down. The growth in drilling activity began to outpace completions activity late in 2021 and we expect that to continue through 2022. The Canadian market recovered nicely in 2021 as well with strong activity levels in the second half of the year that eclipsed activity during the first quarter, which is a bit unusual based on the typical seasonal conditions in that market. Activity in the second half of 2021 outpaced 2019 levels during the same period, indicating that Canadian activity has already recovered to pre-pandemic levels, which we see continuing through 2022. Activity in international markets was a bit more challenged in 2021, primarily due to the continued impacts of COVID which hampered our ability to effectively and efficiently mobilize our personnel and limited the ability to meet with customers in person. These restrictions began to ease in late 2021 and market and customer access continues to improve in 2022. Against this backdrop, we were able to increase our revenue to $118.5 million in 2021, an increase of 11% as compared to 2020 primarily driven by the strength of our performance in Canada, where our revenue increased by over 50%. I’m pleased with the way we were able to pivot from the defensive posture of…

Thank you Robert. As reported in yesterday’s earnings release, our fourth quarter revenues were $36.1 million, 32% higher than in the prior year’s fourth quarter. On a sequential basis, revenue in the fourth quarter was 11% higher than revenue in the third quarter with increases of 25% and 98% in the U.S. and international markets respectively, offset by a decrease of 2% in Canada reflecting a slowdown in activity during the holiday season. Gross profit, defined as total revenue less total cost of sales excluding depreciation and amortization expense, was $15.9 million in the fourth quarter of 44% of revenue compared to $11.7 million or 43% of revenue in the prior year’s fourth quarter. For a sequential comparison, gross profit was $14.8 million or 46% of revenue in the third quarter of 2021, although that included a net benefit of approximately $0.9 million related to the employee retention credit or ERC. Our gross margin of 44% during the fourth quarter of 2021 demonstrates the continued operational leverage in our business as revenues increase, due in part to structural cost reductions made over the last 18 months. However as Robert mentioned, we are seeing meaningful cost increases across our supply chain which are putting pressure on our gross margins in early 2022. Our selling, general and administrative costs, or SG&A were $13.5 million for the fourth quarter, which was $2.9 million higher as compared to the $10.6 million in the fourth quarter of 2020, reflecting increased compensation and higher litigation-related expenses, among other items. Our fourth quarter 2021 SG&A expense was also $2.5 million higher as compared to the third quarter, reflecting higher litigation-related expense, R&D costs, and higher compensation expense as the expense in the third quarter--our SG&A expense in the third quarter was partially offset by $1.1 million in…

Thanks Ryan. Our full year guidance for 2022 is as follows. We currently expect full year revenue of $145 million to $160 million and fully adjusted EBITDA of $13 million to $18 million, consistent with the calculations in our earnings release. We expect gross capital expenditures for 2022 to total $2 million to $3 million. While we strive to be free cash flow positive in 2022, that will be difficult given our growth expectations as we anticipate net working capital to be a use of cash in 2022. Underpinning our revenue growth expectations is anticipated industry activity growth of 10% to 15% in Canada. We expect wells drilled in the U.S. to increase by at least 20% in 2022 and wells completed in the U.S. to increase by at least 10% as compared to 2021. Finally, we expect international industry activity to grow by at least 10% in 2022. We expect our revenue growth to exceed the growth in the underlying industry activity through market share increases and selected product and service lines, growth in international markets, and through continued adoption of newly introduced technologies like our Purple Fire perforating gun system. We also expect that the full impact of price increases that we achieved with our customers will offset cost inflation that will have a more meaningful impact in the second half of the year. Given the fact that our ability to achieve price increases will lag the impact of increased costs and our cost of sales and within our personnel costs, we expect that the achievement of our annual adjusted EBITDA guidance range will be weighted to the second half of the year. Our guidance is based on current market conditions and a further escalation of hostilities by Russia in Ukraine or changes to sanctions against Russia implemented by various global governments that impact Russia’s oil and gas sector could cause meaningful changes to the market conditions, including increasing inflationary pressures and adding further stresses to certain components of the global supply chain. Before we open up the call for Q&A, I’ll close with a couple of brief comments. We had strong performance in 2021 as we successfully began our pivot back to growth. We have the infrastructure in place to support revenue growth in each of our geographic markets, providing leverage to grow future earnings. We continue to successfully introduce new technologies that meet the needs of our customers, adding to our portfolio and expanding our addressable market. We are diligently managing through the supply chain challenges that we and others in our industry are facing. Our team at NCS continues to do a tremendous job operationally, and I’m proud to say that we’ve had zero recordable incidents in each of 2020 and 2021, and no recordable incidents so far this year. As we enter 2022 with a very strong balance sheet and liquidity position, having generated over $11 million in free cash flow in 2021, providing us with strategic flexibility. With that--

As a reminder--

Well apparently we don’t have any questions--sorry.

Sorry, go ahead.

Well, apparently we don’t have any questions in the queue, so on behalf of our management team and our board, we’d like to thank everyone on the call today, including our shareholders and research analysts, and especially our employees. I truly appreciate the tremendous work and dedication demonstrated by our team here at NCS and Repeat Precision. We’re only as good as our people, and I believe that we have the best team in the industry. Our team continues to provide excellent service to our customers and is commercializing new products and services that will enable our customers to be more successful. We are taking on demanding and technically challenging work and delivering results for our customers. We see the potential for a multi-year cycle of improved growth prospects for our industry, and I’m excited by how NCS is positioned to be able to participate in that growth and deliver benefits to our employees, customers, shareholders and all of our other stakeholders. We appreciate everyone’s interest in NCS Multistage and look forward to talking again on our next quarterly earnings call. With that, Operator, we’ll conclude the call.

This concludes today’s conference call. Thank you for participating. You may now disconnect.