Trican Well Service Ltd.

Good morning, ladies and gentlemen. Welcome to the Trican Wealth Service third 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 Service Limited. Please go ahead, Mr. Fedora.

Thank you everyone. Thank you for attending our third quarter conference call. A brief outline on how we intend to conduct the call is first Scott Matz and our CFO will give an overview of the quarterly results. I will then provide some comments with respect to the quarter and the current operating conditions and the outlook for the future and then we'll open the call for questions. As usual we have several members of our executive team here in the room for us so we'll be able to answer Any questions that may come up, I'll now turn the call over to Scott.

Thanks, Brett, and good morning, everyone. 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 Q3 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 and the Business Risks section of our Q3 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 Q3 2023 MD&A. Our quarterly results were released after market closed last night and are available both on CDAR and our website. So with that, let's move on to our results for the quarter. Most of my comments will draw comparisons to the third quarter of last year, and I'll provide some commentary about our quarterly activity and our expectations going forward. Our results for the quarter were, as anticipated, down slightly from last year due to lower activity and a persistent yet somewhat more moderate inflationary environment. Revenue for the quarter was $252.5 million, a decrease of about 2% compared to the same period of last year. Our activity level was down marginally compared to the same period of last year, mostly attributable to the specific well designs and customer programs that we executed during the period. Adjusted EBITDA came in at $65.7 million or 26% of revenue, down from the $70.9 million or 27% of revenue we printed last year in the same quarter. This is mainly attributable to the job mix I noted earlier and persistent inflation and some of our key inputs. I would also note that our adjusted EBITDA figure includes expenditures related to fluid end replacements, which totaled $1.5 million in the quarter and were expensed in the period. Adjusted EBITDA for the quarter came in at 68.5 million or 27% of revenues. Again, slightly down from the 72.1 million or 28% of revenues we printed last year. To arrive at EBITDA, we add back the effects of cash settled stock-based compensation, recognizing the quarter to more clearly show the results of our actual operations and remove some of the financial noise associated with the changes in our share price as we mark to market these items. On a consolidated basis, we continue to generate positive earnings, printing 36.4 million in the quarter, which translates to 17 cents per share, both on a basic and fully deleted basis. We generated free cash flow of 47.7 million during the quarter, as compared to 64.9 million in Q3 of 2022. Again, our definition of free cash flow is essentially EBITDA plus non-discretionary cash expenditures, such as maintenance capital, interest, cash taxes, and cash settled stock-based comp. I would note that we moved into a net taxable position in 2023, which is the primary driver of the year-over-year difference. You can see some more details on this in the non-GAAP measures section of our MD&A. Capital expenditures for the quarter totaled $27.1 million, split between our maintenance capital program, about $6.5 million, and our upgrade capital program of about $20.6 million. Our upgrade capital continued to be dedicated mainly to our ongoing Tier 4 capital refurbishment program and the electrification of certain ancillary frack equipment, which Brad will touch on later. Balance sheet remains in excellent shape. We exited the quarter with positive working capital of approximately $144 million, including cash of $44.5 million. And finally, with respect to our return of capital strategy, we renewed our normal course issuer bid program on October 2nd and have repurchased and canceled about 1.1 million shares under the renewed program. On a year-to-date basis, we've repurchased and canceled approximately 21.2 million shares at an average price of about 340 per share. And as noted in our press release yesterday, the Board of Directors declared a dividend of 4 cents per share to be paid on December 29th, 2023 to the shareholders of record as of the close of business on December 15th, 2023. And I would note that those dividends are designated as eligible dividends for Canadian income tax purposes. So with that, I'll turn things back over to Brad.