Innovex International, Inc. Q2 FY2023 earnings call

• Second quarter delivered strong results with revenue of $89.6 million, in line with expectations. Gross margin was 26.7% and Adjusted EBITDA was $8.8 million. • Bookings in the quarter were $72.7 million, an increase of 36% sequentially. • Had significant operational milestones: passed Petrobras exploratory project wellhead qualification testing in Brazil, had a call off of an MSA with 33 wellhead systems (17 attributable to qualification success), awarded first Big Bore XPak De liner hangers in Namibia, successfully installed floating liner hanger in Alaska, and equipment used in CO2 injection project in Denmark. • Acquisition of Great North is a significant step to expand well construction portfolio, with expected revenue synergies $20 million to $30 million, cost synergies $10 million, and working capital efficiencies.

Second quarter revenue was $89.6 million. Subsea Products revenue declined 10% compared to the prior year and 3% sequentially. Well Construction segment grew 11% year-over-year and 3% sequentially. More than 50% of Dril-Quip's revenue is now booked, shipped and billed within the Subsea Products segment as the primary backlog business. The Q2 book-to-bill ratio for the Subsea Products segment was 1.2 times. The segment ended the quarter with approximately $252 million in backlog, representing growth of 7% sequentially.

• Raised 2023 revenue target to 20% growth, with second half revenue expected in the range of $240 million to $250 million. • Expect second half adjusted EBITDA margins to be 14% to 16%. • Full year 2023 CapEx expected to be approximately $30 million. • Expect free cash flow to be positive in the third quarter. • Capital allocation priorities: first high-return organic initiatives, second evaluate incremental acquisition opportunities, third evaluate returning cash to shareholders via stock buybacks.

Q: Are there any questions?

A: As we have no questions at this time, this will conclude today's conference, and you may disconnect your lines at this time. And we thank you for your participation.