Earning Date, Transcript Summary & Report

EBITDA Margin Improvement: Adjusted EBITDA margins improved to 17%, up from 16.6% in Q3 and 15.8% in Q4 2023, despite lower revenue.

Deepwater Completion Growth: Executed 13 deepwater completion jobs in Q4, an increase from 11 in Q3, contributing to strong offshore performance.

Record Revenue and EBITDA Growth: Achieved record revenue and adjusted EBITDA in the industrial chemicals business for Q4, with over 9% revenue growth year-over-year.

Completion Fluids Revenue Update: Total completion fluids and products revenue reached $311 million, the second highest since 2015, despite a 1% decline in revenue year-over-year.

Record Water Recycling Volume: Achieved a record volume of 89 million barrels of treated and recycled produced water for frack reuse in Q4.

Projected Investment Returns: Strategic investments in Brazil and Gulf of America are expected to yield significant returns in the first half of 2025, with projected net income before taxes between $19 million and $34 million.

Deferred Tax Savings Potential: Eliminated the valuation allowance for deferred taxes, allowing for potential savings of approximately $97.5 million in cash taxes in the coming years.

Projected Free Cash Flow: Expecting over $50 million of free cash flow in 2025 from the base business, supported by strong project pipelines and operational efficiencies.

Land Operations Slowdown: The U.S. land operations experienced a weaker than expected year-end slowdown, impacting overall performance despite strong offshore and industrial chemicals results.

Completion Slowdown Impact: The water and flowback segment faced a more severe than normal year-end completion slowdown, contributing to lower performance metrics.

Operational Activity Decline: Rig count and frack fleet count are down more than double digits from last year, indicating a significant decline in operational activity.

Flat Revenue Outlook: The company anticipates flat revenue for the water and flowback services segment in 2025, which may indicate stagnation in growth despite efforts to improve margins.

Market Challenges and Decline: Operator consolidation and low natural gas prices have contributed to a decline in rig count and fracked leach activity, suggesting ongoing challenges in the market.

Cautious Capital Expenditure: The company reduced investments in the Arkansas project to less than $1 million in Q4, indicating a cautious approach to capital expenditure in this area.

Project Timing Uncertainty: The timing of projects between the first and second quarters of 2025 is uncertain, which may lead to variability in performance and results during that period.