Good morning, and welcome to the Dril-Quip and Innovex Downhole Solutions Merger Conference Call. I would now like to turn the call over to Erin Fazio, Corporate Finance Director for Dril-Quip. Thank you, and good morning. We appreciate you joining us on today's call. With me today are Jeff Bird, President and Chief Executive Officer of Dril-Quip; Kyle McClure, Chief Financial Officer of Dril-Quip; Adam Anderson, Chief Executive Officer of Innovex; and Kendall Reed, Chief Financial Officer of Innovex. In a moment, Jeff, Adam, and Kendall will present their prepared remarks with a question and answer session to follow. An investor presentation about the merger has been posted under the Investors tab on Dril-Quip's website, along with a press release. This call is being recorded, and a replay will be made available on Dril-Quip's website following the call. I would like to remind you that today's call may include forward-looking statements and discuss non-GAAP financial measures. It should be noted that a variety of factors could cause actual results to differ materially from the anticipated results or expectations expressed in these forward-looking statements. Please refer to the press release that we issued and the investor deck that we furnished on Form 8-K yesterday for a full disclosure on forward-looking statements and reconciliations of non-GAAP measures. I would now like to turn the call over to Jeff. Thank you, Erin, and thank you all for joining today's call to discuss our highly strategic and transformative combination with Innovex. Yesterday, we announced a definitive agreement under which Dril-Quip and Innovex will merge in an all-stock transaction to create a unique energy industrial platform, which we believe will create significant value for both Dril-Quip and Innovex stockholders. Innovex provides downhole solutions for the oil and gas industry worldwide across drilling and deployment, well construction, well completion, production and fishing, and intervention. They're headquartered in Houston and have more than 1,100 employees globally, with distribution channels and operations in many of the same regions we operate in today. We have consistently discussed over the past two years, the importance of an inorganic strategy would play for Dril-Quip, and the importance of having scale to effectively compete and grow in the current dynamic global market. In the third quarter of last year, we took a big step in that journey with our highly accretive, successful acquisition of Great North. The board and I believe that this transaction with Innovex accelerates our current path and growth strategy, providing us with the scale and financial accretion to become a more resilient company with operations, balance sheet strength, and flexibility to succeed across industry cycles. Like with Great North, we evaluated many facets to determine the fit of Innovex for Dril-Quip's next chapter. We were very focused on finding the right strategic partner and an opportunity at the right terms. We believe our combination with Innovex fits that bill. It delivers compelling economics to our stockholders, benefits to our customers and other stakeholders, and as an all-stock merger, our stockholders are expected to receive immediate earnings and cash flow accretion and participate in the future value creation of the combined company. Dril-Quip stockholders will own approximately 52% of the combined company at transaction close. We anticipate that the return on expected capital for this transaction will be in excess of 15% when we take into account the significant synergy opportunities the combination presents. In fact, we anticipate achieving cost synergies of approximately $30 million per year within 24 months of close, 50% of which we expect to achieve within the first 12 months. With a pro forma year-end 2023 net cash position of $99 million, the combined company is expected to have additional flexibility to deploy organic, inorganic, and stockholder return capital allocation strategies. Finally, this transaction provides immediate benefits of scale with an expected geographic footprint in key regions, product offerings, and customer base. Our businesses are highly complementary, which is expected to offer ample revenue and cross-selling opportunities. We are confident that this combination will allow stockholders to participate in the realization of significant synergies and sector recovery. Over the past 40+ years, Dril-Quip has grown into a leading developer, manufacturer, and provider of highly engineered equipment, service, and innovative technologies for use in the energy industry. Our success and strong reputation have been a direct result of the hard work and dedication of our people and of our high-quality, innovative technologies. The customer-centric, innovative, and execution-oriented cultures of both Dril-Quip and Innovex are also very complementary and will continue to drive our focus on delivering innovative products and services to our customers and creating opportunities for our employees. This transaction represents the next step in Dril-Quip's evolution as we seek to create a unique energy industrial platform that can better serve our global customers and provide value for our stakeholders across industry cycles. I will now turn the call over to Adam. Thanks, Jeff. We're excited to announce the planned merger between Innovex and Dril-Quip. I've long admired Dril-Quip and their broad and deep technical capability. As we've gone through diligence, I've really gotten to know a lot more about their people and products, and I couldn't be more excited. This combination is the rare instance where there's a tremendous amount of industrial logic or various ways for us to win without product or service redundancy between the two companies. Turning to slide four, what we have built at Innovex is an energy industrial platform. Let me explain what we mean by that.... If you look at the financial characteristics of our business, including our high and stable gross margins, per share growth, and return on capital, it becomes apparent that we have built a highly differentiated industrial franchise that happens to serve an energy end market. Innovex is not just a collection of products. Innovex is a platform for growth. At the heart of the platform is our culture, which we describe as No Barriers. That culture is the key enabler for our innovation flywheel, which drives organic growth. We adhere to a disciplined framework for making incremental investments in new products or services, and that framework allows us to augment organic market share growth with inorganic growth that then feeds the flywheel and drives further organic growth. Dril-Quip fits the model of our most successful transactions, with substantial opportunities to increase returns through integration with our operating model, cross-selling of complementary products in new geographies, and applying our low-overhead, capital-light business model to the combined business, all while maintaining a strong balance sheet and generating significant free cash flow. Turning to slide five, let's look at some of the numbers. All the numbers we're gonna show here are full- year 2023 numbers. On a combined basis, the pro- forma business would have done just over $1 billion of revenue, more, more than 50% of that revenue derived from offshore or international markets. This global diversity enables both growth opportunities and resiliency through cycle. Pro- forma for $30 million of expected cost synergies, the combined company would have generated approximately $221 million of Adjusted EBITDA. The combined business will be predominantly a product sales business focused on engineered, big impact, small ticket, single-use products. With that, I'd like to introduce Kendall Reed, Innovex CFO. Kendall and I have worked together closely for 10 years. I'm grateful that we get to continue on this journey together, and look forward to making the next decade even more successful than the last. Thank you, Adam, and good morning, everyone. Taking a look at slide 6, I'm thrilled to present the key financial metrics of this transaction, which shows significant accretion for Dril-Quip stockholders even before the benefit of anticipated cost synergies, with material upside over the next two years as those cost synergies are fully realized. On a pre-synergy basis, this merger is expected to more than triple Dril-Quip's 2023 adjusted EBITDA from $59 million to the pro forma combined company's $191 million, while improving EBITDA margins from 12% to 18%. As we'll discuss in greater detail later in the presentation, we expect further benefit from at least $30 million of cost synergies, which would imply pro- forma 2023 EBITDA of approximately $221 million or 21% of revenue. Further, this combination is expected to transform Dril-Quip's cash flow profile, improving free cash flow from approximately negative $25 million on a standalone basis to approximately $35 million on a pro forma basis before the benefit of synergies, and nearly $60 million once synergies are included. We believe this reinvigorated cash flow profile will provide greater resources to pursue high return growth opportunities. Lastly, despite a large number of shares being issued in connection with this transaction, we expect 2023 earnings per share will improve from approximately $0.02 per share on a standalone basis to approximately $1.10 per share on a pro forma basis before synergies, or $1.44 per share, assuming $30 million of estimated pre-tax synergies are fully realized. As you can see, this combination has compelling financial logic for existing Dril-Quip stockholders and offers an attractive financial profile to investors with anticipated strong margins, cash flow, and earnings per share. Turning to slide seven, we'd like to give you an overview of who Innovex is today. Innovex has grown into a leading global provider of mission-critical, well-centric products with a high-margin, capital-light business model, driving strong investor returns over the course of our history. We have a balanced geographic revenue mix, with 34% of our revenue coming from international and offshore markets, as well as a diversified product portfolio, with meaningful revenue derived from each of the well construction, completions, and production phases of the well life cycle. This diversification not only mitigates risk, but also positions us to capitalize on growth opportunities by providing logical channels to market for new products that are either developed internally or come to us through acquisitions. Our diversified revenue base, along with our lean operating philosophy and the big impact, small ticket nature of our products, as Adam mentioned, enable us to generate strong and consistent margins through cycle, outpacing most of our industry peers. For context, Innovex generated approximately $556 million of revenue and $132 million of Adjusted EBITDA during 2023 on a standalone basis. Turning to slide 8, there's nothing more important to our success than our team of people and the culture they live every day. At Innovex, we define our culture with the phrase, "No Barriers." We tear down the barriers between our customers and ourselves, as well as within the company, all to elevate the experience for everyone involved. Our No Barriers culture starts with an intense focus on our customers and ensuring we have great people in the field listening to our customers every day. Importantly, our folks engaging with the customers need to be empowered to actually help our customers with the problems and opportunities they're seeing in real time. This is enabled by an organization that is flat, lean, and as unbureaucratic as possible. This approach to organizational design sets us up to be far more responsive to the market needs. It also feeds into our relentless innovation cycle. Our employees are empowered. We run our business much more bottoms up than top down. Kendall and I are smart enough to know that we can't run the entire company from our offices. We're focused on getting the right folks on the playing field and allowing them to make plays, so that there's No Barriers to what we can accomplish. Slide 9 shows our culture in action and how it drives our Innovation flywheel. The thing I love to do more than anything is spend time to try to understand our customers' processes, needs, and problems, and then look for opportunities to help them. In fact, the biggest successes of both companies have largely resulted from the ability to more rapidly identify and then respond to those customer needs. Over time, both Innovex and Dril-Quip have become a magnet for this kind of customer-led innovation. I'd like to give a couple of recent examples showing this flywheel in action. The first is in the Permian, where Innovex was recently approached by one of the leading E&Ps in the basin to develop a more robust liner hanger system that was purpose-built for the deeper, longer, and more complex wells that are becoming core to their capital efficiency goals. This operator had previously been running liner hangers from one of the major service companies, but that provider gave the customer a 12-month lead time to develop a solution to meet their emerging needs. Conversely, we were able to develop a robust and complete solution in about 12 weeks. As a result, we expect to deploy the first system this week, and upon success, see significant upside. Similarly, Dril-Quip has long had a focus on developing customer-led new products and technologies. Recently, they were approached by a major deepwater operator to develop a solution to increase the size of the wellbore, accommodating the larger tubing string, enabling higher production rates. This solution required Dril-Quip to develop and qualify a new liner hanger system to the same standards as their industry-leading wellheads. Dril-Quip is the only liner hanger company that's been able to meet this challenge, and it's a powerful example of the range and capability of their technology and people. One of the things I'm most excited about is exploring ways to bring the combined company's capabilities to bear in developing new and compelling new products with and for our customers. Slide 10 demonstrates the results of the vision and culture that Adam just articulated. At Innovex, we're very proud of the fact that we've built a track record of not only industry-leading growth, but also high-quality financial performance, characterized by consistent margins, low CapEx, and ultimately, strong returns on capital for our investors. We believe this transaction is an opportunity to unleash the potential of the Dril-Quip business to allow us to deliver market-leading returns for stockholders on a combined basis moving forward. To walk through each of these charts briefly, on the top left of the page, you can see the revenue per share compound annual growth rate from 2018 to 2023. We look at revenue growth on a per share basis, given that Innovex has an acquisition element to our growth strategy, so we wanna make sure that we're growing efficiently. As you can see, during this time frame, both Innovex and Dril-Quip significantly outgrew our energy and industrial peers and delivered growth approximately in line with the S&P 500 at 7%, driven by a combination of organic growth and smart M&A. The top right of the page shows average adjusted EBITDA margins over the past six years. Innovex has performed slightly better than the energy comp group and roughly in line with industrials over this period as a result of our curated product portfolio and lean operating philosophy, which we would bring to the go-forward business. What truly makes us stand out from the pack is demonstrated on the bottom half of this slide. Due to the capital-light nature of our business model, Innovex has spent an average of only 3% of revenue per year on CapEx from 2018 to 2023, significantly below both our industry peers and the S&P 500. This combination of efficient growth, consistent margins, and low capital requirements adds up to a 17% average return on capital employed over the past 6 years, outpacing not only our energy and industrial peers, but also the S&P 500 average of 14%. Given the complementary nature of the Dril-Quip and Innovex businesses, we believe this transaction will create a platform which can deliver growth, consistent margins, and strong returns to investors. Turning to slide 11, we see many of the combined company's product offerings for a typical North America land well. Each of these products generally share a big impact, small ticket dynamic. A great example of this is the Innovex toe sleeve. This is a tool that costs about $10,000, but if it works, will save our customers $100,000 of intervention expense. As a result, once we have success with a given customer, they're reticent to change suppliers just to save a couple of bucks. This results in durable and consistent margins for these products. We're also a leader in what we do. In most of the products we provide, we're a top three player, another result of the culture and technology we've described. There's significant opportunity for the combined company to utilize our respective strengths to grow. Most notably, Dril-Quip has a leading market position with wellheads in the Canadian market, but today they do not have a distribution network in the Lower 48. Conversely, Innovex serves almost all the major players in the Lower 48 who make wellhead purchasing decisions. We've recently dipped our toe in the wellhead market, but having the Dril-Quip team on board will enable us to scale up much more rapidly in this large and attractive market with a team that has a demonstrated track record of success. Conversely, Innovex is underweight in Canada today. The Dril-Quip team in Canada has great relationships across the target customers for our products, and we believe those relationships will accelerate our growth and drive profitable market share gains. Looking on slide 12, we're showing the combined company's product offerings for a typical deepwater well. Dril-Quip's deepwater wellhead franchise is a great example of a big impact, small ticket product. The wellhead represents 1%-2% of the cost of the well, but impacts every single part of the subsequent well operation. Consequently, customers are far more focused on product performance and reliability, and there's no one better than Dril-Quip. One of the natural areas of collaboration for the combined company will be to package Innovex's cementing equipment, such as float equipment, wiper plugs, and centralizers, with the Dril-Quip liner hangers and subsea wellheads. Innovex has provided mission-critical cementing tools into the US Gulf of Mexico for years. However, the opportunity to leverage Dril-Quip's global presence and strong customer relationships in the deepwater market will be game-changing for these products. Cementing tools are installed in the very same wells and on the very same casing strings as the Dril-Quip subsea wellheads, and Innovex will be the only company that can provide all the casing-mounted accessories from the wellhead to the toe of these wells, minimizing integration risk and creating a compelling value proposition for our customers. On slide 13, we're highlighting the key elements of integration we will employ to ignite and invigorate the combined company. First things first, we'll focus on creating a single company anchored around a common, No Barriers culture. I think this culture and approach will resonate with the employee base and unleash the capabilities of the combined company. Along the way, we will respect and leverage the strong legacy embedded in the Dril-Quip brand. We will operate as a single company, but we will continue to use the Dril-Quip brand, particularly as it relates to the strong subsea product portfolio.... Tied in with our culture, we will radically simplify and streamline the combined company. This is important because a bottoms-up approach with a simpler, more delayered organization is going to be much more responsive to customers' needs. We will exploit various ways that we can provide a more complete, wellbore-centric solution for our customers to drive outsized market growth. Ultimately, the result of these efforts is expected to create a market-leading, well-centered product and technology company. As detailed on slide 14, over the years, Innovex has developed a strong track record of successful M&A integration, with a focus on creating long-term value by employing our disciplined framework. We take a strategic, methodical approach to selecting opportunities which enhance our curated portfolio of products and have compelling industrial logic. Each transaction requires a bespoke approach to integration, but our end goal is always to create a single operating model across the entire company, which enables us to improve efficiency by minimizing overhead and to be very nimble and responsive to our customers' needs, feeding our culture of relentless innovation. We also continuously evaluate our product portfolio and have demonstrated a willingness to divest underperforming product lines when appropriate to improve stockholder returns. The combination with Dril-Quip is particularly compelling, as it fits the model of our most successful transformative transactions. Innovex was created through a three-way merger transaction in 2016, and in 2021, we merged with Rubicon International, significantly increasing our global footprints. By following our tried-and-true approach, we've successfully integrated those mergers as well as multiple other acquisitions, both big and small, over the past eight years to build Innovex as it, as it exists today. We are excited to partner with the Dril-Quip team to take the next step in the evolution of our combined businesses, and we believe we've developed the necessary core competency around integration to ensure the success of the transaction for stockholders. Slide 15 provides more detail around our cost synergy outlook. As discussed previously, this transaction is expected to be significantly accretive to stockholders, even without the benefit of any synergies, but we also believe there's an opportunity to realize at least $30 million of cost synergies once the integration is complete. This represents 3% of 2023 pro forma revenue and offers compelling upside following closing. While our evaluation of synergies is ongoing, we feel confident that the company will benefit from efficiencies in corporate overhead, streamlining our manufacturing and supply chain approach, rationalizing our facility footprint, optimizing our product portfolio, and simplifying our operating model. We would expect 50% of these synergies to be realized within 12 months of closing and 100% of synergies to be realized within 24 months of closing. Pro forma for the $30 million of expected synergies, the combined company would have generated 2023 adjusted EBITDA margins of 21%, near the top of its peer group. This margin enhancement opportunity provides us with a unique driver of earnings growth over the next two years, and when combined with our capital-light business model, is expected to create a compelling financial profile capable of delivering strong free cash flow and returns for investors. On slide 16, we highlight some of the most attractive revenue synergy opportunities we plan to capture. We discussed much of this earlier, but I think it's worth reemphasizing, that at its core, this combination is about creating a unique product and technology platform that has numerous levers to drive growth on a combined basis, whether it's bringing the Canadian wellhead franchising to the Lower 48, or combining deepwater cementing and wellhead technology or other technologies we haven't even conceived. There's a lot of ways for us to win in the market. Saudi Arabia is one of the most exciting markets in which both companies have a growing presence. Outside of the U.S., this is the place where I've spent most of my time over the years, and I have an affinity for the people and the culture. We've been able to establish ourselves as an up-and-coming technology company, and combined with Dril-Quip's legacy and capabilities in the region, we'll be better positioned to invest for the long term in this important market. Developing our people, our local infrastructure, and our capabilities in the Middle East broadly, and in Saudi Arabia specifically, will serve us and our customers well for years to come. In closing, as we've articulated, this combination creates a global and diversified platform that is uniquely positioned to grow revenue, earnings, and cash flows over time. We will be disciplined in how we use that cash flow to unlock further value creation. To the employees of the combined business, we're proud of the heritage of each of our businesses. Thank you for what you've done to get us to this place, and I ask that you continue to focus on delivering for our customers every day. We're gonna be remarkably successful, and I'm looking forward to starting that journey. With that, I'll turn it back over to the operator, who can open the call for your questions. At this time, we will be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Your first question for today is from Eddie Kim at Barclays. Hi, good morning. Just wanted to ask about Innovex's international business. So roughly a third of Innovex's business is international offshore, you said, and Middle East is the biggest region there. Could you talk about how big Saudi is within that Middle East exposure, and if that's more onshore or offshore focused in Saudi? I just wanted to get your thoughts on how the recent Saudi announcements could impact the growth profile of this business, if at all. Hey, Eddie, this is Adam. Thanks for the question and joining the call. Yeah, so Saudi's been a really important growth initiative for Innovex over the last decade. And obviously, Dril-Quip, largely through their TIW legacy, has been there for decades. Innovex, on a standalone basis today, the majority of that Middle East revenue that you see would be Saudi revenue. We're really proud of our ability to service the customer there, grow our footprint in Kingdom. We've built a great local team there, and we're making significant investments in the Kingdom, both for today and for the long term, not only in our terms of our localization, also building up our local manufacturing capacity and developing and qualifying new products and technology to lead to long-term growth there. Today, our business is more weighted to the, like, legacy onshore oil work. So some of that core, like, Ghawar Field, is probably where we generate the bulk of our revenue today, but we do have products qualified and are growing into both offshore as well as the gas and unconventional markets. So we service the Kingdom broadly, but the revenue today a little bit more levered to ongoing oil activity. With respect to the specific announcement and their plans to reduce some activity or not expand in Safaniya and Manifa, some of those areas, I don't expect that to have a big impact on our near-term results in Saudi Arabia. I think we can continue to add revenue there as we qualify new products, and then on a combined basis, I think we'll be able to make additional incremental investments and really leverage the strength of both teams to qualify additional products and really service the customer much more broadly on all of the consumable products from the wellhead down to the toe of the well in Kingdom. Got it. Got it. Perfect. Thank you. And just, on the combined business, you mentioned, 44% North America onshore, 56% international/offshore. I know that international portion does include some onshore. So just removing the regions altogether, could you just give us the rough onshore versus offshore split of Innovex as well as the split of the combined company? Yeah. So on a combined basis, we're gonna be roughly 40% offshore, probably 15-ish% international land, and the balance there, 44% on North America land. Okay. Okay, perfect. Great. Thank you. I'll turn it back. Your next question for today is from David Smith with Pickering Energy Partners. Hey, good morning, and thank you for taking my question. Hey, Dave. Hey, sorry if it was provided somewhere, and I missed it, but could you talk about the outlook for Innovex in 2024? And, also, if there's any update to the prior 2024 guidance for Dril-Quip real quick. So with respect to the Innovex guidance, no, there's nothing provided in the materials. What I would say broadly is from 2022 to 2023, we saw a really nice growth in Innovex revenue and EBITDA, both in North America as well as international. Looking to 2024, you would have seen, obviously, a pretty big decline in North America activity in the back- half of 2023. And when you roll that through all of 2024, we would expect our 2024 business to be flat to maybe down a little bit, depending on how North America activity shakes out. I think our current view right now is we're probably steady from here on, North America activity. Obviously, if that changes dramatically, that could impact that rough guidance. Yeah, no real update on the Dril-Quip guidance. No update on the Dril-Quip guidance, consistent with what we said on our last earnings call. Perfect. And just to make sure I understood correctly, regarding the Innovex outlook for 2024 in aggregate, assuming North America is relatively steady from here, the outlook would be, you know, revenue, EBITDA, roughly flat to down slightly? Yeah. Versus 2023? Perfect. Correct. Thank you for that. A follow-up, if I may. On the Innovex S-1, you know, it looked like net debt at the end of Q3 was just under $41 million, and it looks like Innovex 4Q 2023 free cash flow was about $20 million. The pro forma net cash provided suggests Innovex, you know, has net debt of, like, $118 million. I just wanted to check and see if there were any significant uses of cash by Innovex since 4Q 2023, or trying to figure out what I'm missing here. Yeah, thanks, David. It's a good point, and worth clarifying, because if you look at Innovex's S-1, as of 9/30, we had roughly $60 million of net debt, and as you pointed out, we ended 2023 with roughly $40 million of net debt. So, to bridge to the pro- forma number, the piece there is that standalone Innovex plans to pay a cash dividend of approximately $75 million in aggregate to current Innovex stockholders prior to closing. This was agreed, this payment will allow Innovex to provide a cash return to its stockholders on their multi-year investment while maintaining financial strength and flexibility of the combined company. I would say it's important to note that the pro forma year-end 2023 net cash position of nearly $100 million that we publicly disclosed for the combined company includes the impact of that planned cash distribution, and we feel that strong balance sheet and the expected cash flow profile of the combined business positions us for good future success. Perfect. I appreciate that. Thank you. This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.