ChampionX Corporation

Good morning and welcome to the ChampionX first quarter 2021 earnings conference call. My name is Cheryl and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session. During the question and answer session, if you have a question, please press star then 1 on your touchtone phone. Please note that this conference is being recorded. I will now turn the call over to Byron Pope, Vice President, ESG and Investor Relations. Byron Pope, you may begin.

Thank you. Good morning, everyone. With me today are Soma Soma-Thundurum, President and CEO of ChampionX, and Ken Fisher, Executive Vice President and CFO. During today's call, Soma will share some of our company's highlights. Ken will then discuss our first quarter results and second quarter outlooks 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. Let me remind all 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. Therefore, I refer you to our latest 10K filing and our other SEC filings for discussion of some of the factors that could cause actual results to differ materially. 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 first quarter press release, which is available on our website. I will now turn the call over to Soma.

Thank you, Biden. Good morning, everyone. I would like to welcome our shareholders, employees, and analysts to our first quarter 2021 earnings call. Thanks for joining us today. Let me start by recognizing the remarkable resiliency and focus of our ChampionX organization in serving our customers, teammates, and communities well during and after Winter Storm Uri. It was an unprecedented weather event challenging for Texas and neighboring states and impacting the well-being of many people. Our employees worked diligently and tirelessly after the storm to minimize disruptions to our customers and return our facilities to full operation in addition to supporting their colleagues who experienced power and water disruptions and damages to their homes. For their dedication and commitment, I am tremendously grateful. Let me turn to our recent performance. As we close in on the one year anniversary of our transformational merger of Legacy Apogee and Legacy Champion X, our first quarter results further demonstrate the geographic breadth and resiliency of our combined business portfolio and the strong free cash flow generation capacity of the company. We are well positioned to outperform the sector irrespective of their energy industry macro environment. Our integration is going well. We continue to make progress on our targeted cost synergies. Our customers are increasingly recognizing the value of our better together efforts with our combined technology products and services offering and we are excited about the growth opportunities in the future from the combined offering. As a purpose-driven company, we always begin with our organization's purpose of improving lives of our customers, our employees, our shareholders, and the communities in which we operate. Slide 4 illustrates this common purpose that unites us and the shared culture and the operating principles by which we execute every day. This will come as no surprise to those of you who have followed our ChampionX story. Purpose is at the heart of how we differentiate our company in the marketplace, and we constantly strive to serve all our stakeholders exceptionally well. One of our four operating principles is our customer focus, which we passionately describe as being the relentless advocate for our customers. We are proud that Energy Point Research, an independent customer satisfaction research firm, which surveyed more than 3,300 customers of oil field products awarded ChampionX the top overall ranking for total customer satisfaction for 2021. We also ranked first in eight specific categories, which you can see here on slide five. While Legacy Apogee has been recognized as number one in prior years, We are especially encouraged to see our merged company in the top overall spot, as well as being number one in production chemicals, artificial lift, and digital oil field segments. This exceptional industry recognition illustrates the strong customer-centric cultural alignment across our organization, the dedication of our employees around the world in supporting our customers, and how our combined offering of products and services is truly better together. Later in my comments, I will share with you where we are headed as we strategically evolve our business portfolio for sustained growth. But first, on slide six, let me give you a quick example of one of the ways in which we are already helping our customers produce the hydrocarbons that the world needs in a more sustainable manner. Through our research and development in our Aberdeen Scotland Technical Center of Excellence, our chemical technologies team recently qualified a non-toxic biodegradable corrosion inhibitor which will help one of our customers in the North Sea maximize recovery without sacrificing efficiency. Our portfolio of environmentally superior corrosion inhibitors will help North Sea operators meet strict environmental regulations while economically and sustainably expanding the life of their assets. This technology is receiving great reception from our customers. We are also continuing to advance our fit for purpose digital technology solutions that help our customers improve efficiency and produce oil and gas in a sustainable manner. In the first quarter, we added autonomous control feature to our industry-leading XPOC production optimization software. Harnessing the power of AI models that is built into our advanced optimization software, the autonomous control feature monitors and recognizes changes to well condition and equipment operations and autonomously adjusts parameters to optimize production without any human intervention. This enhances safety and efficiency of production operations for our customers. Ken will take you through our first quarter financial results shortly, so let me just share a few high-level comments. Through three full quarters as a new company, our portfolio resiliency and strong free cash flow generation are proof points as to the power of our combined global business. In the first quarter, Continued growth in our shorter cycle North American land-oriented businesses helped offset the impact of seasonality in our international operations and short-term raw material cost inflation in our chemical technologies businesses. Our chemical technology team is making excellent progress on pricing improvements with our customers to offset the raw material cost inflation. and we feel confident that we'll be able to fully offset the raw material inflation in the second half. The pricing improvement combined with our synergy delivery and increased volume gives us increased confidence that we will see meaningful margin improvement in the second half and we will exit 2021 with better margin than 2020 exit rate. I would now like to turn the call over to Ken to discuss our first quarter results and our second quarter outlook.