Superior Drilling Products, Inc.

Greetings and welcome to the Superior Drilling Products third quarter 2021 financial results. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Ms. Deb Palowski, Investor Relations for Superior Drilling Products. Thank you. You may begin.

Thanks, Melissa, and hello, everyone. We certainly appreciate your joining us today as Superior Drilling Products reports on its third quarter of 2021 and talks about the progress that we're making with our strategy and growth. I have joining me Troy Meyer, our chairman and CEO, and Chris Cashin, our chief financial officer. 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. If you don't, you can find both of those documents on our website at sdpi.com. Turning to 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. 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 the earnings release, as well as in the slide deck. So with that, if you would turn to slide three, I will turn it over to Troy to begin.

Thanks, Deb. Thanks, everyone. We appreciate you all taking the time to participate in the call today. As we go through this slide deck, I want you to keep in mind that some of the things that we've been working on As we talk about our quality management system, I'd like to start there. As you all know, we've been working on that for about the last year and a half. And the TQM process system in our shop, and it's performing very, very well. We've passed our year audit on the ISO 9001 and also the AS9100 test. And we're very proud of what the team has done there. And it's really starting to show a benefit both to our customers and also to our processes and our controls. So I'd like to thank our team for what they've done there. I'd also like to recognize our procurement team. They've navigated this mess that the supply chains are seeing globally. They've done a really good job and have been making sure that we've got the materials needed to fulfill our customers' orders, and they continue to look at critical stock inventories and where we're getting products from, and they're doing a really good job on that. I'd also like to recognize our HR. We've been able to identify and hire people some really good young talent. They're very alert and very aggressive and eager to learn. And I'm really proud of what we're doing there as far as bringing on some fresh talent that's going to really help us do some wonderful things going forward. So if we look at If we look at the business overall, you see there's a strong demand for our tools, not just manufacturing but in the refurbishment side of the business. We have the drilling ring. As you all know, its value is being proven every day, day in and day out, and more and more customers are understanding that value. We're seeing a very strong demand for that tool here in North America. Customers, you know, when you look at our channel partner there in DTI, they've done a fantastic job there, and they continue to bring on new customers and continue to grow that business, and that's starting to show. We're seeing a lot of new tool orders come in, and they're bringing on new customers every day, and we're very proud of what they're doing. If you look at the revenue in North America, our manufacturing team has done a fantastic job as we're now asked to produce some very complicated parts that need to be very precise for certain types of drilling systems. They're doing a wonderful job there. You know, our management team there has, again, identified some great new talent that we're bringing in to, you know, support our existing team of machinists and techs. They're doing a wonderful job there. And we're seeing that really, people are really noticing the quality that they put out and and complicated parts, they don't seem to, they enjoy the challenge, let me put it that way. So that's really becoming a very unique part of our business. You look at the PDC refurbishment activity and both the drilling ring is strong and the drill bits are strong. So again, even though we look at the rig activity those of you that have been with us since the, since the start of this whole IPO process, when we went public years ago, you know, we were at 2000 rigs close to it, like 19, 1947 or something like that. Uh, you know, and so today when we're at 550 and as busy as we are, it's, uh, it's, it's, it shows that the rigs that are, that are up and operating are drilling a lot of footage. And they're doing it very quickly and very efficiently. And the demand on tools is high. So, you know, again, that metrics that we always use at looking at the drill rig count to look at the production, how productive, how productivity is going to be going through our facility. You know, are we going to be really busy or not? And we've got to, We've got to have a new look at that because service companies, as most of you are aware, are very busy right now. And, again, our rig count is only 550 in the U.S. We look at our international part of our business. Our team over there continues to knock down barriers, and there is a lot of them. We've made some good penetration into some markets today. Our tools are performing well. We now have caught the attention of an extremely large service provider, and they're liking how the performance of the tool is working and cutting time and days off of wells. The wellbore quality, they have a lot of wellbore quality issues in the Mideast. They deal with different formations and some very tough ones. They're finding that Drilling Dream is helping them out there, and we're starting to see that business over there grow for us. We've got a management team in there that they've done a fabulous job. Even though we're very small, we've only got a very small team over there. They're doing a tremendous job, and we're starting to see some really good penetration into some markets, and we're looking for some big things from that team as we go forward. You know, we're strengthening our relationships as we look at the service companies that we deal with in the energy sector where, you know, they're the largest ones, and we're building a strong relationship with them every day. You know, we go to work with the attitude of, You know, what else can we do for these companies? Where else do they need us? And we're starting to find that there's a lot of things that we can pull away from them. And it's not really not pull away, but take that responsibility and make those parts and get them to them. And we've seen that in the third quarter. We made a lot of new products for the service companies and suppliers that are performing very, very well. So there's a lot more opportunity there, and we can talk about that in future opportunities. But with that being said, I'm going to go ahead and turn this over to Chris, and he can start going over the numbers. Chris?