Core Laboratories Inc.

Good afternoon in Europe, Africa, and the Middle East, and good evening in Asia Pacific. We'd like to welcome all of our shareholders, analysts, and most importantly, our employees to Core Laboratories' third quarter 2023 earnings call. This morning, I'm joined by Chris Hill, Core Chief Financial Officer, and Gwen Gresham, Core Senior Vice President and Head of Investor Relations. The call will be divided into six segments. Gwen will start by making remarks regarding forward-looking statements. We'll then have some opening comments, including a high-level review of important factors in Core's Q3 performance. In addition, we'll review Core's strategies and the three financial tenets that the company employs to build long-term shareholder value. Chris will then give a detailed financial overview and have additional comments regarding shareholder value. Following Chris, Gwen will provide some comments on the company's outlook and guidance. I'll then review Core's two operating segments, detailing our progress and discussing the continued successful introduction and deployment of Core Labs technologies, as well as highlighting some of Core's operations and major projects worldwide. Then we'll open the phones for a Q&A session. I'll now turn the call over to Gwen for remarks on forward-looking statements.

Before we start the conference this morning, I'll mention that some of the statements we make during this call may include projections, estimates, and other forward-looking information. This would include any discussion of the company's business outlook. These types of forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to materially differ from our forward-looking statements. These risks and uncertainties are discussed in our most recent annual report on Form 10-K, as well as other reports and registration statements filed by us with the SEC. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Our comments also include non-GAAP financial measures. Reconciliation to the most directly comparable GAAP financial measures is included in the press release announcing our third quarter results. Those non-GAAP measures can also be found on our website. With that said, I'll pass the discussion back to Larry.

Thanks, Gwen. Moving now to some high-level comments about the third quarter of 2023, CORE continued to build on the operational momentum established over the past few quarters. While revenue was down slightly compared to Q2, we achieved sequential and year-over-year improvements in operating income, operating margins, and earnings per share. X items, operating income for the third quarter was $16 million, up 2% sequentially and up 20% year-over-year. Operating margins were 13%, up from 12% in Q2 of 2023, and up from 11% in Q3 of 2022. Third quarter 2023 operating margins, as well as year-over-year and sequential incremental margins, were particularly strong in reservoir description, where demand for rock and fluid analysis across our global client base continues to rise. X items, operating margins for reservoir description improved to 17%, the highest since Q2 of 2020. These improvements in reservoir description were partially offset by declines in revenue and operating income in production enhancement, largely reflecting lower than anticipated U.S. land completion activity, which was down 10 percent sequentially, along with some project delays in the Gulf of Mexico and some international product deliveries that were pushed into Q4. Production enhancement operating margins, X items, came in at just over 4 percent for the third quarter, which was down both sequentially and year over year. Demand for reservoir description assay work on crude oil and derived products continued to stabilize throughout the quarter as trading patterns have realigned in response to sanctions. However, the ongoing Russia-Ukraine conflict and associated sanctions, as well as the emergent political turmoil in the Middle East that began in early Q4, still leave volatility and some uncertainties in the demand for these laboratory services. Lastly, for the full company, EPS was $0.22 per share, X items, up from $0.21 in Q2 of 2023 and up from $0.18 in Q3 of 2022. As we look ahead, CORE will continue to execute on its key strategic objectives by, one, introducing new product and service offerings in key geographic markets, two, maintaining a lean and focused organization, and three, maintaining our commitment to delevering the company. Now to review CoreLab strategies and the financial tenants that Core has used to build shareholder value over our 27-plus year history as a publicly traded company. The interest of our shareholders, clients, and employees will always be well served by CoreLab's resilient culture, which relies on innovation, leveraging technology to solve problems, and dedicated customer service. I'll talk more about some of our latest innovations in the operational review section of this call. While we navigate the current challenges and pursue growth opportunities, the company will remain focused on its three longstanding, long-term financial tenets, those being to maximize free cash flow, maximize return on invested capital, and returning excess free cash to our shareholders. Before moving on, I want to thank all of our employees for their dedication, loyalty, and adaptability in meeting all of our clients' needs, and for the commitment that many have shown as we navigate the moment and prepare for a more active market. I'll now turn it over to Chris for the detailed financial review.