Superior Drilling Products, Inc.

Greetings and welcome to Superior Drilling Products, Inc. Fourth Quarter 2020 Financial Results. At this time, all participants are on a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during a conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Deborah Palowski, Investor Relations for Superior Drilling. Thank you. You may begin.

Thanks, Doug, and hello, everyone. We certainly appreciate your time today and your interest in Superior Drilling Products. On the call with me are Troy Meyer, our Chairman and CEO, and Chris Cashin, our Chief Financial Officer. Troy and Chris will go through prepared remarks discussing our fourth quarter and full year 2020 and talk a little bit about the conditions in the market today, and then we will open the call for questions. You should have a copy of the financial results that we released before the market this morning, and you should also have the slides that will accompany our conversation today. You can find both of those documents on our website at www.sdpi.com. So if you would look at slide two, I will point out that we may make some forward-looking statements during the formal discussion as well as during the Q&A session on today's call. These statements apply to future events that are subject to risks and uncertainties, as well as other factors that could cause actual results to differ materially from what is stated here today. These risks and uncertainties are provided in the earnings release, the slides, and other documents filed by the company with Securities and Exchange Commission. All of these documents can be found on our website or at sec.gov. I want to also point out that during today's call, we will discuss some non-GAAP financial measures, which we believe will be useful in evaluating our performance. You should not consider the presentation of this additional information in isolation or as a substitute for results prepared in accordance with GAAP. We have provided reconciliations of non-GAAP with comparable GAAP measures in the tables accompanying earnings release as well as in the slide deck. So with that, I am now going to turn it over to Troy to begin. Troy?

Thanks, Deb, and thanks everybody for joining us for our fourth quarter 2020 call. Go ahead and let's turn to slide four. Let's talk about some of the accomplishments that we've achieved throughout 2020 and in Q4. So as we look at the highlights for 2020, I'm going to touch on a few of these so that you have an understanding that throughout 2020, we didn't just locked down and try to survive. We've got a lot of things done and not just the strengthening of our balance sheet, but we achieved certification in our ISO 9001, our AS 9100, and this led to the implementation of our QMS system. So company-wide now we have a total QMS system that we've got up and running and it's working very, very well. This was a big achievement through our team for our team throughout 2020. And this will also lead as we talk about our diversification model. As we go forward, this really, really helps getting that put into place. We're able to restructure our international business team. We've had few years over there now, and we've had an opportunity to look at who we have and in what positions, and where's our strengths and weaknesses, and we were able to restructure that team, and we've been able to get service agreements in place with large service providers in multiple countries. The team has done a really good job on still going out there, even though lockdown mode in the Mideast, we couldn't have our boots on the ground in the countries we have already introduced the tool into. Everything was done via phone and email. The team has done a tremendous job on getting the word out there and showing post-run recaps that I sit on a call every Tuesday as we go over the KPIs of our product line and are they being achieved. And I want you all to know that this product line is achieving the KPIs really, really well. So we're very pleased with what we're seeing. We were able to expand the size and scope of this product line. We've added some design enhancements that is going to increase our revenue rental margins as we go forward. And that was a very strong enhancement that our engineering and R&D teams have come up with. It's going to pay. as we go forward. We were able to make some very strong amendments to our legacy contract. Our legacy contract with very large service providers that had our hands tied in some areas that are our expertise, that's now giving us opportunities to look at as we go forward into 2021. So I'm very pleased with the amendments that we were able to make to these contracts. We're still moving forward. I know that we've talked in the past about, you know, introducing another product line and we still move that forward throughout 2020. And it's going to be meaningful as we go into 2021 that we bring on another product offering and we're just not offering the drilling ring. We will support that with another product offering throughout 2021. As we were going through 2020, we saw the collapse of not just the domestic market, but we also seen the collapse of the international market. But through that collapse, we increased our international revenue 43% year over year. So it's a testament to the team that we have and their willingness to get out there and and work hard and work smart. We were able to reduce our cash, our break even. When you look at the reductions, the consolidations that we made throughout our organization, and the goal was by the time we get to year end, we wanted to be at a cash break even, and we've achieved that. We took this opportunity in 2020 to look at our management team. We've got a system that our HR has put in, what they're calling Superior Management University, and the team has refocused on core values. Our managers are stepping up. It was really an opportunity for us throughout 2020 to see our strengths and our weaknesses. I'm here to tell you we've got a very strong management team. They know our products. They have learned our business very well. And I believe strongly that we've got the team in place that is going to really build a solid company throughout 21 and beyond. So I'm excited about those things that we talked about. And I'll talk a little bit more about the future opportunities after Chris gets done on the financial side of things and tell you about some of the neat stuff we've got going looking forward. But, Chris, I'm going to turn it over to you.