ChampionX Corporation

Welcome to the ChampionX second quarter 2021 earnings call. My name is Hilda, and I will be your operator for today. 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 and 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. Mr. Pope, you may begin.

Thank you. Good morning, everyone. With me today are Soma Soma Sundaram, 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. Ken will then discuss our second quarter results and third 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. 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 10-K 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 second quarter press release, which is available on our website. I will now turn the call over to Selma.

Thank you, Byron. Good morning, everyone. I would like to welcome our shareholders, employees, and analysts to our second quarter 2021 earnings call. Thanks for joining us today. Before turning to our business results, let me first take a moment to note that June 3rd marked the one year anniversary of our transformational merger. We could not be more proud of how remarkably well our organization has pulled together and executed on behalf of our customers and communities over the last year. During what was a dynamic and unprecedented market environment for our energy industry, we are truly better together. Consistent with our purpose of improving lives, we celebrated our one-year anniversary by volunteering over 1,500 hours in communities around the world. I am truly inspired by our team's commitment to our purpose. With that, let me turn to our recent performance. We are pleased with the top line growth momentum we saw in the second quarter. All of our segments posted sequential growth outperforming the market. Our second quarter results demonstrate the attractive growth profile of our global business portfolio and further illustrate the strong free cash flow generation capacity of the company. As the global economic and energy industry recoveries further take hold in the second half of this year and beyond, ChampionX is well positioned to outperform. We continue to make good progress on our targeted cost synergies and we are well positioned to deliver the full targeted cost synergies of $125 million within 24 months of the merger closing. Our field team members are increasingly able to visit in person with customers. We are very encouraged by how receptive customers are to our better together efforts with our combined technology, products, and services offering. We are a purpose-driven company, so we will always start with our organizational guiding light on the slide number four, which is improving life of our customers, employees, shareholders, and community. We see our culture as a source of sustainable competitive advantage, so we feel that it is important for all of our stakeholders to know that we hold ourselves accountable for being relentless customer advocates, being committed to our employees, delivering technology with impact to help solve customer problems, and having a continuous improvement mindset. On slide five, Speaking of technology with impact, we are excited to welcome Scientific Aviation to our ChampionX team. As we have listened to the voice of our customers with respect to their operational goals and plans for the energy transition, it became crystal clear that companies across the energy value chain are making the reduction of greenhouse gas emissions one of their highest ESG priorities. As a market leader in both site-specific and regional methane emissions monitoring solutions for continuous and periodic monitoring, scientific aviation will accelerate our growth pathway of building out our emission management portfolio to help our customers achieve their emissions reduction goals. This acquisition is consistent with our energy transition pathways for growth we shared with you before. We are excited about the future growth potential as we combine scientific aviation industry leading methane emission detection and monitoring solutions with our extensive expertise and presence in upstream production well sites and midstream solutions. Ken will take you through our second quarter financial results shortly. So let me just share a few high level comments. Over the last year as a combined company, Our portfolio resiliency, robust top-line growth, and strong free cash flow generation speak to the power of our combined global business. In the second quarter, our teams capitalized well on the continued growth in our shorter-cycle North American land-oriented businesses, as well as the emerging rebound in our international sales. Our digital business grew 12% sequentially, driven by strong growth in our production optimization offerings. We are excited about the pipeline of new product launches in our digital business that will drive healthy growth in the coming quarters. In drilling technologies, customer adoption of our new technologies accelerated, resulting in 79% of the drilling technologies revenues in the second quarter came from products that were less than three years old. The healthy volume growth in the second quarter, along with the beginning of price increase realization, more than offset the impact of short-term raw material cost inflation in our chemical technologies and artificial lift businesses. We are highly confident that we will deliver on our margin improvement expectations in the back half of the year and beyond, driven by continued volume growth synergy delivery, and full impact of the price increases. I would now like to turn the call over to Ken to discuss our second quarter results and our third quarter outlook.