NCS Multistage(US:NCSM)2021-11-02 13:50Financial Data and Key Metrics Changes - The company's Q3 2021 revenue was $32.4 million, a 99% increase compared to Q3 2020 and a 51% increase sequentially from Q2 2021 [23] - Gross profit for Q3 2021 was $14.8 million, representing a gross margin of 46%, up from 37% in the prior year's third quarter [24][26] - Adjusted EBITDA for Q3 2021 was $4.2 million, a significant improvement from a loss of $2.1 million in Q3 2020 [29] Business Line Data and Key Metrics Changes - US revenue for Q3 2021 was $8 million, which was below guidance due to reduced product sales in precision and fracturing systems, partially offset by improved performance in well construction and tracer product lines [8] - Canadian revenue reached $22.1 million, a sequential growth of 140%, outperforming the Canadian land rig count growth of 111% [12] - International revenue was $2.3 million, within the guided range, with activity accelerating in the North Sea and operations resuming in Argentina [15] Market Data and Key Metrics Changes - The US market showed a correlation between oil prices and tracer diagnostics activity, with job volumes increasing in late Q3 and maintaining higher levels into Q4 [9] - Canadian industry activity is expected to continue tracking at or above 2019 levels for the remainder of the year [12] - International operations are seeing steady work in the North Sea and ongoing operations in Argentina and China [16] Company Strategy and Development Direction - The company aims to leverage its strong presence in Canada to drive growth across other product lines [12] - There is a focus on managing costs and maintaining discipline on SG&A and capital spending, with SG&A costs decreasing by 12% year-over-year [17] - The company is investing in technology to enhance current products and services while securing intellectual property [39] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about a potential multi-year cyclical recovery in the oil industry, supported by OPEC+ supply management [40] - The company anticipates continued growth in the US market, particularly in well construction and tracer diagnostics [38] - There are expectations for a strong winter drilling season in Canada, with double-digit activity growth projected for 2022 [48] Other Important Information - The company maintained a strong balance sheet with approximately $10 million in net cash as of September 30, 2021 [18] - The company is experiencing early impacts of cost inflation and supply chain stresses, leading to selective price increases [18] Q&A Session Summary Question: Timeline for product trials in the Middle East - Management indicated that the timeline for revenue generation from field trials in the Middle East could be conservatively within the next twelve months [42][43] Question: Sustainability of revenue growth in Canada - Management expects continued strong activity in Canada, with growth anticipated to exceed double digits in 2022 compared to 2021 [47] Question: Concerns about US performance - Management expressed disappointment in recent US performance but remains optimistic about future growth, particularly with improvements in product offerings [49]