Superior Drilling Products, Inc.

Greetings. Welcome to Superior Drilling Products Incorporated's second quarter fiscal year 2022 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. Please note this conference is being recorded. I will now turn the conference over to Craig Mihalik, Investor Relations for Superior Drilling. Thank you. You may begin.

Yeah, thank you. And welcome, everyone, to our second quarter 2022 earnings call. We certainly appreciate you joining us today. And joining me, Troy Meyer, our Chairman and Chief Executive Officer, and Chris Cashin, our Chief Financial Officer. You should have a copy of the financial results that were released before the market this morning. You should also have the slides that accompany our conversation today. If you do not, both can be found on our website at sdpi.com. Turning to slide two, I'll 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 the Securities and Exchange Commission. These documents can be found on our website or at sec.gov. I want to point out also that during today's call, we'll 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 relief, as well as in the slide deck. With that, please turn to slide three, and I'll turn it over to Troy to begin. Troy?

Thanks, Craig, and thanks, everybody, for joining us for our second quarter 2022 call. When we look at the second quarter, I'd like to highlight four items that we spent a good majority of our time and resources doing, and one of the things that I think first thing to highlight is the hiring and training of new talent. As you all know, as the business grows, we've got to bring on more personnel, and our management team has been doing a good job picking up talent and getting them trained. A lot of the services that we provide here take a special talent, especially working with heat. I want to tell our team good job for what they've been doing there, and we're building a good, strong team here. So the next thing I'd like to make sure that we mention today is the securing of additional opportunity with our legacy customer. That's another biggie that we'll be talking about. Securing the Amina channel partner is another bullet point I'd like us to discuss or talk about today. And then also in the second quarter, we get a lot of repair and maintenance of equipment that, as you well know, over the last few years, we haven't had the opportunity to get to that. And we've spent some resources taking care of the plant and equipment here. So I want you to all be aware of that as well. So as we look at What we've got going on in 2Q, or what we had going on in 2Q, a very, very strong demand for our services. When we look at our legacy side of the business, you know, on the refurbishment of tools, that is very strong, and it's growing every day. That demand continues to strengthen. both on the flagship tool, the drilling ring, as we see DTI keep a strong presence in the North American markets as they bring on new customers and they're doing a good job there. We also have the legacy bit refurbishment, as you know, with Baker Hughes, and they've been... keeping us very busy as they get stronger and stronger in their position in that market. You know, we see improved market conditions. As we see rig count go up, you know, of course there's more demand for our services. And I think that even though, you know, when we look at rig count, it's nowhere near where it was a few years back. However, the rigs that are there are drilling a lot of footage. So keep that in mind that the demand for tools at the current rig levels is tremendous. So be very aware that the footage being drilled per rig is very impressive. The strengthening of our balance sheet, Chris will talk about that. We continue to keep focused on that as we pay down debt and build cash, and he'll talk about that. Then we look at the working to improve capacity and demand. We've brought on additional shifts to supply both new tools that we're manufacturing in our machine shop, as well as when we look at the people that we need for that, it's a very talented operator that we're looking for that not only do they program and run the CNCs, but they're very, very talented in the design side as well. And we've been picking up some good talent there and we continue to look. You know, we have issues like everybody else does in the labor market today, you know, finding talent and getting them on board. But our team is doing a good job and they They're doing that every single day, trying to find better ways to attract some good talent. We spent a lot of time in the international side of the business. You all know that we signed on a channel partner in the MENA region, the Ben Zayed Petroleum Group, and we work with them. you know, on a weekly basis as our teams are getting to know one another and how we're going to work together to saturate the markets with the drill and ream technology and other technologies that they may need. It's been a very refreshing opportunity to deal with such a world-class organization. We're very We're very pleased with the individuals we deal with, and we think it's going to be good, sure, steady steps as we go forward. Keep in mind, we talked about the turnkey process. We purchased a new machining center. It was a million-dollar machining center that we've put into place. We now have it in place. We're making the jigs and fixtures that are going to allow us to do this turnkey process that we've talked about. Right now, today, we machine new product, but we don't finish the product. We ship it off to Houston where it's brazed and hard-faced. this new turnkey process that this machine will be addressing is going to keep those products that we machine and then keep them here so that we can also finish this product and then ship it out. We think it's going to be a great opportunity for this company and I can say that machine's in place and we're running the programs right now and we will start turning our first products off of there this month, actually. So we're excited for that. But that being said, I'm going to go ahead and turn it over to Chris to talk about the financials.