ChampionX Corporation

Welcome to the ChampionX second quarter 2022 earnings conference call. My name is Richard and I'll 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 01 on your touchtone phone. As a reminder, the conference is being recorded. I will now turn the call over to Byron Pope. Sir, you may begin.

Thank you. Good morning, everyone. With me today are Soma Somasundaram, President and CEO of ChampionX, and Ken Fisher, our Executive Vice President and CFO. During today's call, we will share some of the 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 Sona.

Thank you, Byron. Good morning, everyone. I would like to welcome our shareholders, employees, and analysts to our second quarter 2022 earnings call. Thanks for joining us today. I'm pleased with ChampionX's second quarter results. Our teams executed well. Our performance was driven by robust top line growth across our business portfolio in both our international and North American markets, increasing price realization, and we are well positioned to deliver strong adjusted EBITDA and adjusted EBITDA margin growth in the back half of the year. As we have shared before, we see our culture as a source of sustainable competitive advantage, which is why we always start with our organizational purpose as shown on slide number four. We hold ourselves accountable for being tireless customer advocates, being committed to our employees, delivering technology that is impactful in helping solve customer problems, and having a continuous improvement mindset. Speaking of our purpose, I would be remiss if I did not recognize that June 3rd marked the two-year anniversary of our transformational merger. We are proud of how remarkably well our organization has executed on behalf of all of our stakeholders over the last two years. We are truly better together. Consistent with our purpose of improving life, as you can see on slide number five, We celebrated our two-year anniversary by volunteering over 1,400 hours of service in communities around the world. It is humbling to see our team's commitment to our purpose put into action in such tangible ways. Now, Ken will take you through our second quarter financial results shortly, so let me just share a few high-level comments. Our business portfolio once again delivered superior top-line growth in the second quarter. Year over year, our North America and international revenue grew 27% and 20%, respectively, illustrating the attractive organic growth opportunities within our global business, as each of our businesses contributed to this strong performance. In particular, in our first quarter reunification call, we mentioned that we expected our production chemical technologies business to experience top line growth for the full year 2022, approaching mid-teens percentage. Given the robust top line first half of 2022, we now expect our production chemical technologies business to deliver full year 2022 revenue growth in the high teens percentage. Revenues from digital products, which includes our emission management products, increased 54 percent year over year and 14 percent sequentially in the second quarter. We continue to remain excited about the long-term organic growth prospects in this business and investing appropriately to support it. Our teams are delivering price increase realization to offset the impact of raw materials, labor and logistics-related cost inflation, that we have experienced in our portfolio of businesses. Last quarter, we shared with you that we expected our chemical selling price to catch up to and exceed raw materials inflation exiting the second quarter, and our teams delivered on that objective. As such, we confidently expect to see healthy EBITDA margin improvement in the second half of this year. We have previously shared with you our capital allocation priorities, During the second quarter, we demonstrated our commitment to returning capital to shareholders by returning over 60% of our free cash flow generated during the period to our investors via our regular cash dividend and by repurchasing $20 million of ChampionX stock. We remain fully committed to creating value for our ChampionX shareholders and to increase capital return as our free cash flow grows in the second half of this year. Now, I would like to turn the call over to Ken to discuss our second quarter results and our third quarter outlook.