NCS Multistage(US:NCSM)2023-05-14 15:14Financial Data and Key Metrics Changes - The company reported first-quarter revenues of $43.6 million, an 11% increase compared to the same period last year [47] - Gross profit was $18.5 million, with a gross margin of 43%, up from 38% year-over-year [7][45] - The net loss for the first quarter was $15 million, translating to a loss per share of $6.10, impacted by a $17.5 million charge related to a jury verdict [8][25] Business Line Data and Key Metrics Changes - Perforating gun sales were lower than expected, but there was increased momentum in PurpleSeal composite plug sales [3] - Canadian revenue was $30.7 million, near the midpoint of guidance, with strong increases compared to previous quarters [20] - U.S. revenue was $11.3 million, below guidance, reflecting reduced activity in natural gas production [43] Market Data and Key Metrics Changes - International operations generated $1.6 million in revenue, slightly above the midpoint of guidance [21] - The company expects industry activity growth of up to 10% in both Canada and the U.S. for 2023 [28][40] - The company anticipates a seasonal slowdown in Canadian operations due to spring breakup, with recovery expected in June [4] Company Strategy and Development Direction - The company is focused on leveraging new technologies to meet customer needs and expand its addressable market [30] - There is an emphasis on maintaining a strong balance sheet and generating positive free cash flow in 2023 [13][11] - The company plans to appeal a recent jury verdict, expecting insurance to cover most of the awarded damages [6][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of Canadian business activity in the third quarter [4] - The company expects to achieve annual adjusted EBITDA guidance weighted towards the second half of the year [12] - Management highlighted the potential for a multi-year cycle of improved growth prospects in the industry [32] Other Important Information - The company maintains a cash balance of over $13 million and a positive net cash position of $5.2 million [13][36] - Selling, general, and administrative costs were $16.2 million, slightly up from the previous year [24] - Adjusted net income for the first quarter was $1.2 million, an improvement from a net loss in the same period last year [25] Q&A Session Summary Question: What is the outlook for U.S. revenue growth? - Management expects modest sequential revenue growth in the U.S. in the second quarter despite recent reductions in activity [43] Question: How is the company addressing the recent jury verdict? - The company plans to appeal the verdict and believes that most of the damages will be covered by insurance [6][12] Question: What are the expectations for international market growth? - Management anticipates growth in international markets, particularly in the North Sea and the Middle East, as service activity increases [45][40]