NCS Multistage(US:NCSM)2023-03-07 15:21Financial Data and Key Metrics Changes - In 2022, the company reported revenue of $155.6 million, a 31% increase compared to 2021, primarily driven by strong performance in Canada and the U.S. with year-over-year growth of 38% and 32% respectively [2] - The gross margin percentage for 2022 was 39%, slightly down from 41% in 2021, due to significant cost increases in oilfield tubulars and other materials [5] - Adjusted EBITDA for Q4 2022 was $6.4 million, consistent with Q4 2021, but a decline of $2 million sequentially [9] Business Line Data and Key Metrics Changes - The Tracer Diagnostics product line saw over 40% year-over-year revenue growth globally, with more than 30% growth in the U.S. and Canada, and over 60% growth outside North America [4] - The liner hanger business in Canada grew by more than 200% in 2022 compared to 2021, indicating strong demand in the well construction segment [19] - The Repeat Precision product line continues to perform well, supported by the growth of the customer base in Canada [20] Market Data and Key Metrics Changes - The company expects U.S. revenue for Q1 2023 to be between $12 million to $13 million, Canada between $30 million to $32 million, and international revenue between $1 million to $2 million [10] - The anticipated year-over-year average annual industry growth is up to 10% in both Canada and the U.S., with international industry activity expected to grow by at least 10% in 2023 [11] Company Strategy and Development Direction - The company aims to capitalize on international and offshore opportunities, particularly in the North Sea and the Middle East, as part of its growth strategy [7] - The vision is to be recognized as a trusted partner and innovator, focusing on technology-driven solutions and expanding market positions in fracturing systems [22] - The company plans to implement additional price increases across its business, with expectations of realizing full benefits in the second half of the year [21] Management's Comments on Operating Environment and Future Outlook - Management believes the company is in the early stages of a multi-year recovery in the oil and gas industry, with expectations for continued growth in international markets [2] - The company anticipates generating positive free cash flow in 2023, supported by operational cash flow and strategic capital investments [34] - Management expressed confidence in the company's ability to manage costs and improve EBITDA margins, despite inflationary pressures [5][21] Other Important Information - The company ended 2022 with a cash balance of over $16 million and total debt of $7.9 million, indicating a strong liquidity position [12][37] - The company expects total revenue for 2023 to be between $175 million and $190 million, with adjusted EBITDA between $20 million and $25 million [26] Q&A Session Summary Question: How does the company view working capital and its impact on free cash flow in 2023? - Management noted that while net working capital increased by over $7 million in 2022, the percentage of working capital to trailing revenue decreased from 45% to 35%, indicating improved efficiency [29] Question: What is the revenue generation outlook for the Purple Fire modular propane gun system in 2023? - Management indicated that traction is expected to increase as the customer base grows, with revenue generation anticipated to pick up in the second and third quarters of 2023 [44][45]