RPC, Inc.

Good morning and thank you for joining us for RPC Inc's third quarter 2023 financial earnings conference call. Today's call will be hosted by Ben Palmer, President and CEO, and Mike Schmidt, Chief Financial Officer. Also hosting is Jim Landers, Vice President of Corporate Services. At this time, all participants are in listen-only mode. Following the presentation, we will conduct a question and answer session. Instructions will be provided at that time for you to queue up for questions. I would like to advise everyone that this conference call is being recorded. Michael, get us started by reading the forward-looking disclaimer.

Thank you and good morning. Before we begin our call today, I want to remind you that in order to talk about our company, we are going to mention a few things that are not historical facts. Some of the statements that will be made on this call could be forward-looking in nature and reflect a number of known and unknown risks. I would like to refer you to our press release issued today, along with our 2022 10K and other public filings that outline those risks, all of which can be found on RPC's website at rpc.net. In today's earnings release and conference call, we'll be referring to several non-GAAP measures of operating performance. These non-GAAP measures are adjusted net income adjusted diluted earnings per share, adjusted operating profit, EBITDA, and adjusted EBITDA. We are using these non-GAAP measures today because they allow us to compare performance consistently over various periods. In addition, RPC is required to use EBITDA to report compliance with financial covenants under our revolving credit facility. Our press release issued today and our website contain reconciliations of these non-GAAP measures to operating income, net income, and diluted earnings per share, which are the most directly comparable GAAP measures. Please review these disclosures if you are interested in seeing how they are calculated. If you have not received a copy of our press release for any reason, please visit our website at rpc.net for a copy. I'll now turn the call over to our President and CEO, Ben Plummer. Thanks, Mike.

Thank you for joining our call this morning. As you can see from our earnings release, it was a challenging third quarter. The softness in the period was an air pocket in our business, and we believe we responded with appropriate discipline and patience. We currently see a strong improvement in our FRAC calendar for the fourth quarter. We're off to a solid start and expect a significant sequential increase in EBITDA to close out the year. In addition, I would highlight that while pressure pumping our largest service line drove the weakness, our other service lines demonstrated stable, resilient performance. Regarding Spinnaker, our newly acquired cementing business, integration is progressing well, and we were pleased with their financial performance. And from a long-term strategic perspective, we believe a more diversified business is better positioned to offset potential volatility in pressure pumping, or other market dynamics. As we indicated on our last call, in the face of competitive pricing pressure, our bias was to idle assets. This soft pricing environment was driven by lower oil prices during the second and into the third quarter, which caused several of our customers to delay completions. While there were near-term cost absorption impacts for idling assets, we think this was the right call. Discipline and financial conservatism underpin our ability to deliver sustainable cash flows over full energy cycles. Pricing remains competitive in the spot market, where we primarily participate, and we have given some concessions. However, our fourth quarter pricing is expected to be more attractive than the temporarily low levels in the marketplace during the third quarter. Further, not participating in projects at particularly low pricing and margins can extend the life of our equipment, push out maintenance and repairs, and maximize the lifetime return of our assets. Bottom line, as it looks now, our fleet should be well utilized in the fourth quarter, which is again consistent with our comments in July. We began removing some costs late in the second quarter and early in the third quarter. However, as calendar visibility and market dynamics improved, we decided to limit workforce reductions. We began to hire back employees to position ourselves to be service-ready and capitalize on the rebound and fourth quarter activity. Overcorrecting on costs might have left us unable to meet current demand. Although we do not provide financial guidance, I can offer you a directional comment in light of our third quarter results. We think fourth quarter results are likely to look more like second quarter than third quarter. I'll caveat that by saying that that's our current view, which is, of course, subject to unpredictable market shifts and currently anticipated minimal holiday slowdown. Mike Smith, our CFO, will now discuss the quarter's financial results. And after that, I'll have a few closing comments.