Trican Well Service Ltd.

Good morning, ladies and gentlemen. Welcome to the Trican Wealth Service second quarter 2023 earnings results conference call and webcast. As a reminder, this conference call is being recorded. I would now like to turn the meeting over to Mr. Brad Fedora, President and Chief Executive Officer of Trican Wealth Services Limited. Please go ahead, Mr. Fedora.

Good morning, everyone. Thank you for attending the Trican second quarter results conference call. To start the call, Matt's in our Chief Financial Officer overview of the quarterly results. I will then provide some comments with quarter, the operating conditions and the near future. I'll try to get through my comments as fast as possible. I know there's lots of calls, so we're hoping to wrap this up within 20 minutes or so. And then we will then open the call for questions. Several members of our executive team are here today on the call and are available for questions. And now I'd like to turn the call over to Scott to start things off.

Thanks, Brad. So before we begin, I'd like to remind everyone that this conference call may contain forward-looking statements and other information based on current expectations or results for the company. Certain material factors or assumptions that were applied in drawing conclusions or making projections are reflected in the forward-looking information section of our MD&A for Q2 of 2023. A number of business risks and uncertainties could cause actual results to differ materially from these forward-looking statements and our financial outlook. Please refer to our 2022 annual information form in the business risks section of our Q2 2023 MD&A and our MD&A for the year ended December 31st, 2022 for a more complete description of the business risks and uncertainties facing Trican. These documents are available both on our website and on CDAR. During this call, we will refer to several common industry terms and use certain non-GAAP measures, which are more fully described in our Q2 2023 MD&A. And our quarterly results were released after close of market last night and are available both on CDAR and on our website. So with that, let's move on to the results for the quarter. Trican's results were significantly improved with continued solid industry activity levels and a more moderate inflationary environment which led to a more sustainable margin profile and improvements across virtually all major financial categories. Revenue for the quarter was $168.2 million, about a 10% increase compared to the same period in last year. This was mostly attributable to a more constructive pricing environment which allowed us to offset some of the inflationary pressures we were facing at this time last year. Adjusted EBITDA came in at $31.9 million. a significant improvement over the 19.2 million we generated in Q2 of 2022. And I would note that our adjusted EBITDA figure includes expenditures related to fluid end replacements, which totaled $1 million in the quarter and were expensed in the period. Adjusted EBITDAs for the quarter came in at 32.9 million or 20% of revenues, which is stronger when compared to the 23.6 million and 15% of revenues we printed last year. To arrive at EBITDA, we add back the effects of cash settled share-based compensation costs recognized in the quarter to more clearly outline the results of our actual operations and remove some of the financial noise associated with changes in our share price as we mark to market these items. We recognized approximately $1 million in expense related to those items in the quarter. On a consolidated basis, we generated positive earnings of $9.8 million in the quarter, which translates to about $0.05 a share basic. and $0.04 per share on a fully diluted basis. We generated free cash flow of $22.7 million during the quarter as compared to the $14.6 million we printed last year. And again, our definition of free cash flow is effectively EBITDA, less non-discretionary cash expenditures, maintenance capital, interest, cash taxes paid, and cash settled stock-based compensation. CapEx for the quarter totalled $14.4 million, split between our maintenance capital program, about $8.8 million of that was maintenance capital, and upgrade capital of $5.6 million. The upgrade capital was dedicated mainly to our Tier 4 capital refurbishment program and the ongoing electrification of some of the ancillary frac support equipment, which Brad will touch on later. Balance sheet remains in excellent shape. We exited the quarter with positive working capital of approximately $128 million. including cash of about $40 million. And finally, in terms of return of capital, we were quite active in our NCIB program during the quarter and repurchased and cancelled 7.5 million shares at an average price of about $3.24 per share during the quarter. We remained active in July and repurchased and cancelled an additional 2.7 million shares, which successfully concluded our 2022-2023 program. As noted in our press release, the Board of Directors yesterday declared a dividend of 4 cents per share to be paid on September 30th, 2023 to shareholders of record as of close of business on September 15th, 2023. And I would note that the dividends are designated as eligible dividends for Canadian tax purposes. So with that, I'll turn things back to Brad for some comments on our current operating conditions and our outlook. Okay, thanks.