ChampionX Corporation

Hello, and welcome to the ChampionX fourth quarter and full year 2020 earnings call. My name is Zanara, and I'll be the operator for today's call. At this time, all participants are in a listen-only mode. Please note, this conference is being recorded. I'll now turn the call over to Mr. Byron Pope. Byron, you may begin.

Thank you. Good morning, everyone. With me today are Soma Sumasundaram, President and CEO of ChampionX, and Ken Fisher, our Executive Vice President and CFO. During today's call, SOMA will share some of our company's highlights during the quarter. Ken will then discuss our fourth quarter results and first quarter outlook before turning the call back to SOMA for some summary thoughts. We will then open the call for Q&A. During today's call, we will be referring to the slides posted on our website. I would like to remind our participants that some of the statements we will be making today are forward looking. These matters involve risks and uncertainties that could cause material difference in our results from those projected in these statements. Information concerning risk factors that could affect the company's performance and uncertainties that could cause material differences to actual results from those in the forward-looking statements can be found in the company's press release as well as in ChampionX's annual report on Form 10-K and those set forth from time to time in ChampionX's filings with the Securities and Exchange Commission. which are currently available at ChampionX.com. Except as required by law, the company expressly disclaims any intention or obligation to revise or update any forward-looking statements. Our comments today may also include non-GAAP financial measures. Additional details on reconciliations to the most directly comparable GAAP financial measures can be found in our fourth quarter press release and slide presentation for this call, which are available on our website. I will now turn the call over to Soma to discuss ChampionX's fourth quarter achievements.

Thank you, Byron. Good morning, everyone. I would like to welcome our shareholders, our analysts, and our employees to our fourth quarter 2020 earnings call. Thanks for joining us today. Hope you and your families are continuing to stay safe and healthy. I would like to start by welcoming Ken Fisher to our team. As you know, Ken joined our executive team on February 1st as executive vice president and CFO. And he came to this role already having a deep understanding of our businesses, strategy, and organization, having previously served on our board of directors over the last three years. We are excited to have Ken as part of our team. Now this past week, Texas and parts of the neighboring states experienced an unprecedented winter storm that left millions of people without power and safe drinking water. Our prayers and support are with our employees, customers, and the community as we all work to recover from this severe winter storm. Our teams have been working diligently to recover after the storm and minimize disruptions to our customers and our own operations. Before turning to our business results, let me first take a moment to express to all of our employees how proud I am of how remarkably well our organization performed during 2020, which was in many ways a year unlike any other that our energy industry and our world has experienced. Against the backdrop of the global pandemic, the health and safety of our employees has remained our most important priority, and we will continue to take the necessary steps to protect our employees who have truly been essential workers as they have helped our customers sustainably unlock the energy that our global economy needs. And they did so while delivering what was a record year for our company in terms of safety performance in 2020. With that, let me turn to our fourth quarter performance. In what was just our second full quarter since the successful transformational merger of Legacy Apogee and Legacy Champion X, our fourth quarter results speak to how the strong business portfolio and financial profile of the combined company positions us well to outperform both against the near-term challenges of the current environment and during the long-term global energy transition. We continue to execute well in realizing our targeted cost synergies and our pipeline of revenue synergy opportunities continues to expand as we leverage our global footprint and as customers recognize the value of our combined offering in delivering the full suite of production optimization technologies, products, and services. On page four of the slide deck, as a purpose-driven company, we always start with our organizational north star, of improving the lives of our customers, employees, shareholders, and communities. Now more than ever, we see our four operating principles being relentless customer advocates, being committed to our employees, delivering impactful technology and helping solve problems, and having an infectious culture of continuous improvement. as crucial in differentiating our company and serving our internal and external stakeholders very well. As part of our continuous improvement culture, we periodically conduct employee engagement surveys to gauge how employees feel about company's culture and progress on key issues as well as get feedback on what we are doing well and what we need to improve. We just concluded our recent global employee engagement survey, and I'm pleased to report we had about 4,600 survey participants, which is a global participation rate of 71% from our employees. I'm also pleased to report that 89% of the participants reported that they feel very aligned to the company's purpose, and 88% of the employees reported that they feel the company is committed and upholding the operating principles. We feel our purpose and operating culture is a sustainable competitive advantage. We continue to develop and deploy technologies that help our customers achieve their objectives. A recent example of this, on page five of the slide deck, you will see the new ESP motor we introduced to the market. This innovative design helps our customers increase production in five and a half inch wells by as much as 150% improving their economics. Equally important, this technology helps our customers with their carbon reduction goals by consuming less power. This technology has received great reception from our customers. Ken will take you through our fourth quarter financial results shortly, so I will just share a few high level thoughts. In each of our first two full quarters as a new company, our strong results illustrate the promise and power of our combined portfolio and enhanced global scale, as well as the cost energy opportunities. We generated $706 million of consolidated revenue and $109 million of adjusted EBITDA. We once again delivered robust, positive free cash flow in the fourth quarter at $108 million. We are encouraged by the double-digit sequential revenue growth experienced by both our North American and international operations during the fourth quarter. All of our segments posted positive sequential growth led by our drilling technology segment. I would now like to turn the call over to Ken to discuss our fourth quarter results and our first quarter outlook.