Nine Energy Service, Inc.

Greetings and welcome to the nine energy service earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now a pleasure to introduce your host, Guy Serker. Please, you may begin.

Thank you. Good morning, everyone, and welcome to the Nine Energy Service earnings conference call to discuss our results for the first quarter of 2023. With me today is Anne Fox, President and Chief Executive Officer. We appreciate your participation. Some of our comments today may include forward-looking statements reflecting Nine's views about future events. 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. We undertake no obligation to revise or update publicly any forward-looking statements for any reason. Our comments today also include non-GAAP financial measures. Additional details and a reconciliation to the most directly comparable GAAP financial measures are also included in our first quarter press release and can be found in the investor relations section of our website. I will now turn the call over to Anne.

Thank you, Guy. Good morning, everyone. Thank you for joining us today to discuss our first quarter results for 2023. Revenue for the quarter was $163.4 million, which fell between our original guidance of $160 to $165 million. We generated adjusted EBITDA of $25 million, reflecting an adjusted EBITDA margin of 15%. ROIC for the quarter was 16.2%. The company's net loss included the impact of fees and expenses incurred in connection with its public offering of units and other refinancing activities in January. As most of you are aware, we have seen a softening in the market in response to the decline in natural gas prices over the past several months, resulting in a decrease in activity and pricing thus far in 2023 versus Q4 levels. At the end of Q1, the U.S. rig count was down by 24 rigs since the end of Q4. During Q1, the rig count in the northeast was relatively flat, but was down close to 10% in the Hainesville. We anticipate continued rig declines in the Haynesville and Q2, which will impact our revenue. There are near-term concerns around global economic uncertainty. However, market fundamentals support a positive outlook for the energy sector, and an especially cold winter or some other geopolitical event could change the near-term outlook very quickly. On the operations side, we estimate the average frack fruit count today is between 250 and 275. EIA's reporting completions were down by approximately 3% quarter over quarter, and new wells drilled decreased by approximately 1%. Our cementing service line continues to be a strong performer. As a reminder, cementing has very few competitors for the more complex horizontal cementing jobs, and almost 100% of the wells drilled in U.S. land require cementing of the wellbore. Additionally, we have some of the most technically advanced flurries in the industry, and we are in the process of working on a more environmentally friendly option. Even with the potential pullback in the Hainesville activity, we still have an opportunity to take share in the horizontal lateral completions in this basin. We remain very excited about this service line. I continue to believe we have one of the top completion tool portfolios in the U.S. Despite declining activity, we increased the total number of dissolvable stinger plugs sold by approximately 23%, due in large part to a significant international order, and increased completion tool revenue by approximately 7% quarter over quarter. We continue to be positive on the outlook for the adoption of the dissolvable plug. However, near-term, with the pullback in activity, specifically in the gassy regions like the Hanesville, where dissolvables hold a high market share, near-term sales of dissolvables could be slowed. Wireline remains fragmented and highly competitive, and a significant percentage of NIME's wireline revenue comes out of the Northeast, where we have had some pricing pressure with the decrease in natural gas prices. Waterline plays an important role in both the R&D and sales process for completion tools, as well as establishing a strong relationship with our customers and gaining intelligence on the types of completions operators are running. Coil tubing is performing well considering market conditions and our exposure in the Haydenville. Company revenue for the quarter was $163.4 million. Net loss was $6.1 million. And adjusted EBITDA was $25 million. Diluted earnings per share was negative 19 cents. ROIC for the quarter was approximately 16.2%. I would now like to turn the call over to Guy to walk through detailed financial information.