Newpark Resources, Inc.

Greetings and welcome to the New Park Resources 2021 Third Quarter Earnings Conference 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 my pleasure to introduce your host, Ken Dennard.

Thank you, operator, and good morning, everyone. We appreciate you joining us for the New Park Resources conference call and webcast to review third quarter 2021 results. Participating from the company in today's call are Paul Howells, New Park's Chief Executive Officer, Greg Piontek, Chief Financial Officer, and Matthew Lanigan, President and Chief Operating Officer. Following my remarks, Management will provide a high-level commentary on the financial details of the third quarter results and near-term outlook before opening the call for Q&A. Before I turn the call over, I'll have a few housekeeping items to run through. There'll be a replay of today's call. It'll be available by webcast on the company's website at newpark.com. There'll also be a recorded replay, telephonically, available until November 17th. 2021 and that information on how to access those features in yesterday's release. Please note that the information reported on this call speaks only as of today, November 3rd, 2021, and therefore you're advised that time-sensitive information may no longer be accurate as of the time of any replay listening or transcript reading. In addition, the comments made by management during this conference call may contain forward-looking statements within the meaning of the United States federal securities laws. These forward-looking statements reflect the current views of New Parks management. However, various risks, uncertainties, and contingencies could cause New Parks actual results, performance, or achievements to differ materially from those expressed in the statements made by management. The listener is encouraged to read the annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K to understand certain of those risks, uncertainties, and contingencies. The comments today may also include certain non-GAAP financial measures. Additional details and reconciliation to the most directly comparable GAAP financial measures are included in the quarterly press release, which can be found on New Park's website. And now with all that said, I'd like to turn the call over to New Park CEO, Mr. Paul House. Paul.

Thanks, Ken, and good morning, everyone. Although we face some continued market challenges during the third quarter, including the impact of Hurricane Ida, and the lingering COVID-related impact on our international operations, we are encouraged by the improving market dynamics in the oil and gas sector and remain focused on ongoing efforts to reshape our U.S. fluids business. Our third quarter was highlighted by continued strength in site and access solution product sales, along with notable progress in our fluids recovery. Consolidated revenues improved 7% sequentially to $152 million including an 11% improvement in fluid systems. Consolidated third quarter EBITDA generation was $4 million, which includes $4 million of charges associated with Hurricane Ida, as well as costs associated with restructuring our U.S. fluids business. Turning to the specifics of the segment, the strong performance from our industrial solutions business continued in the third quarter, demonstrating the value of our diversification efforts as we expand our presence in the power transmission and other industrial end markets. While the third quarter was impacted by the typical seasonal slowdown in T&D project activity, the seasonal lull was largely offset by a $4 million increase in site access product sales, reflecting the benefit of our expanding presence outside of oil and gas. With a modestly lower revenue and shift in mix, our industrial solutions operating margin declined 18% in the third quarter, generating $13 million of EBITDA. Through the first three quarters of 2021, we remain very pleased with the momentum we are building, particularly within the multibillion-dollar transmission access market. Year-to-date, we generated $108 million of site access revenues from the power transmission and other industrial markets, which puts us on a pace for nearly $150 million of revenues for the full year 2021, a 25% improvement from our previous high mark. This revenue level and growth rate reflects significant progress in our power transmission market penetration, which is a key component of our strategy. Turning to our fluid systems, total segment revenues improved 11% sequentially, primarily driven by strength in the Canadian market as well as our other international markets. In North America, revenues improved by 14% sequentially to $71 million, substantially all driven by the Canadian market. U.S. revenues remain in line with prior quarter, with modest improvements in land activity, offset by a $2 million weather-related decline in the Gulf of Mexico International revenues improved 6% sequentially to $37 million in the third quarter, with our expansion in Asia Pacific being the primary driver of the improvement, while certain areas in the EMEA region continue to be negatively impacted by COVID-related restrictions. Benefiting from the revenue improvement, as well as our ongoing efforts to reshape the U.S. fluids business, the fluids system segment made progress towards a return to positive cash flow generation. However, the improvement was offset by $4 million of third-quarter charges, as highlighted in yesterday's press release. As another sign of the international market recovery, I'd like to highlight that we received a five-year award in Albania from Shell Oil as they looked to return to drilling activity in early 2022, which we believe will generate roughly $5 million of revenue per year. We've had a strong history with Shell in Albania, though the upcoming contract reflects their first drilling activity in this country since 2019. And with that, I will hand the call over to Greg to discuss in more detail the financials for the third quarter.