Flotek Industries, Inc.

2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow management's prepared remarks. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a result, this conference is being recorded. It is now my pleasure to turn the call over to Larry Basnardo, Investor Relations Representative for Flowtech. Thank you. You may begin.

Thank you, Dave, and good morning. We appreciate your participation in Flowtech's second quarter 2023 earnings conference call. Joining me on the call today are Ryan Ezell, Chief Executive Officer, and Bon Clement, Chief Financial Officer. On today's call, we will first provide prepared remarks concerning our business and results for the quarter. Following that, we will open up the call for any questions you have. We issued our earnings announcement for the second quarter of 2023 yesterday afternoon, which is available on the investor relations section of FLOTEC's website. We've also posted an updated and enhanced corporate presentation that we will be referencing on today's call. We encourage you to take the time to review it. In addition, today's call is being webcast and a replay will be available on our website shortly following the conclusion of this call. Please note that the comments we make On today's call, regarding projections or our expectations for future events are forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control. These risks and uncertainties can cause actual results to differ materially from our current expectations. We advise listeners to review our earnings release and the risk factors discussed in our filings with the SEC. In addition, please refer to the reconciliations provided In our earnings release, as management may discuss non-GAAP financial metrics on this call. With that, I will turn the call over to Ryan Ezell, Chief Executive Officer. Ryan.

Thank you, Larry, and good morning. We appreciate everyone's interest in FlowTech and for joining us today as we discuss our second quarter 2023 operational and financial results. As most of you know, this is my first earnings call as CEO of FlowTech. And I'm honored to be in this role at such a transformational time in the organization. I'd like to take a moment to thank Harsha Ghati for his tenure as interim CEO and congratulate him on his return to Flowtech's board of directors as chairman. Turning to the quarter, our second quarter performance demonstrates the meaningful progress we've made in improving Flowtech's business fundamentals as we execute our corporate strategy. This, in turn, has resulted in a significant increase in the profitability of Flowtest's complementary and unique business segments. Furthermore, I expect the organization to continue its trajectory of improving results for the remainder of the year. Let's make no mistake, our efforts are laser-focused on revenue growth, market share expansion, and cost efficiency gains via our differentiated technologies in both chemistry and data analytics solution platforms. Both carried an undeniable value proposition that maximized our customer's value chain while generating a meaningful return on investment for our shareholders. With that in mind, I'd like to turn to slide seven and touch on our second quarter highlights. I'm pleased with the overall results as we delivered a 72% increase in total revenues in the second quarter of 2022. We also had strong growth in gross profit, which more than doubled from the first quarter of 2023. We reported positive adjusted gross profit for the second consecutive quarter and showed an improvement in adjusted EBITDA for the eighth consecutive quarter and are now forecasting positive adjusted EBITDA before year end. Our transactional chemistry business revenues increased 68% from the first quarter of 2023. This is due to our rapidly expanding customer base and continued adoption of our prescriptive chemistry management business model. which has exhibited 171% growth in applications of our proprietary complex nanofluids compared to the second quarter of 2022. Also, our data analytics revenues have continued to gain momentum as the first half of 2023 revenues have approximately equaled what we had in all of 2022. These improved results reflect the positive and impactful changes we have achieved during a very short period of time. Most importantly, all of these milestones were achieved with zero recordable and lost time incidences in the field of operations. I'd like to thank all of our employees for their commitment to safety and service quality in achieving these outstanding results. Now as highlighted on slide 12, Flowtech continues to differentiate itself as the collaborative partner of choice in the industry for sustainable, optimized chemistry and data solutions for EMP operators and oil field service providers. What truly distinguishes Flowtech from its peers is our global presence in over 15 countries, including all major U.S. shale basins, and our extensive expertise providing sustainable, chemical, and data solutions on over 20,000 completed wells worldwide. A recent example of this differentiation is the approval of Flowtech's slick water system by Aramco. Our fluid solution is now one of only two approved hydraulic fracturing systems currently being utilized in Saudi Arabia. This competitive advantage not only relates to being technologically advanced, but also being operationally efficient and reducing cost and environmental impact while improving the overall performance of our customers' assets. Another important aspect of Flowtech's competitive advantage is our producer customers reporting enhanced well productivity while utilizing our chemistry applications. Slide 16 depicts a comparative production analysis of wells utilizing Flowtech's prescriptive chemistry management for wells in the Permian Basin versus wells from non-Flowtech wells. As shown in the graph, wells that employed ARC prescriptive chemistry management exhibited a 26% average uplift in performance or a cumulative increase of 75,000 barrels of oil equivalent after 24 months compared to wells that did not have Flowtech chemistry. This highlights how powerful Flowtech's chemistry solutions are in delivering improved asset performance. While this only represents a sample of results from the Permian Basin, We have also seen similar results in all other shale basins. Turning to slide 17, we continue to leverage our expertise into emerging and existing market verticals. This positions Flowtech to capitalize on our proprietary patents, technology advancements, and collaborative partnerships that have proven commercial applications in other industry subsectors, providing significant future growth opportunities while diversifying our revenue stack. We believe that the demand for our sustainable chemistry solutions will continue to increase and will provide opportunities in other international and domestic market verticals, such as industrial, geothermal, agricultural, solar, and hydrogen. Turning now to slide 18, as discussed last quarter, our data analytics segment received the first prototype of the next generation spectrometer for field testing and validation. which is shown on the slide. The proprietary VARACS analyzer can monitor the quality of hydrocarbons in real time versus traditional sampling practices. When operational, this next generation VARACS unit will represent a massive step change in our manufacturing capabilities and operational costs for the data analytics segment as we make the important transition to a more subscription-based service model. As outlined on slide 19, extensive industry applications exist throughout the upstream, midstream, and downstream segments. We believe the next generation model will have the scalability to further penetrate what we believe will be an immense upstream market opportunity. I would now like to turn the call over to Vaughn to discuss the detailed financial highlights.