All right. Hello everyone, and welcome to the NCS Multistage Fireside Chat. My name is Robert Bloom, Managing Partner here at Lytham Partners. Today, I have the pleasure of moderating a Q&A discussion with Ryan Hummer, Chief Executive Officer here at NCS. Quick reminder, NCS trades under the ticker symbol NCSM on the Nasdaq. Ryan, welcome. Hey, Robert. Thanks for having us. Absolutely. Thank you guys for your participation here. For those who may be new to the company, could you give us a company overview and then a bit on your own background? Sure. Maybe I'll actually kinda flip that. We'll cover the boring part about me first and then talk about NCS. So, you know, my journey kinda moved around a lot growing up. My dad was in manufacturing, so I spent time growing up in Pennsylvania and Missouri. Eventually went to school back in Pennsylvania, but I'm here in Houston and have spent my entire professional career down here in Houston. About the first 15 years of my professional career was in investment banking. Spent a little time with Jefferies and then with Credit Suisse. Was part of a group that started up the Lazard office here in Houston and was with Lazard for about 15 years. As I was looking to transition out of investment banking, I had reached out to my network, and one of the groups I reached out to was actually Advent International, who's an investor in NCS. The team in Advent got me in touch with the founders of the company at that point. I talked with Robert Nipper, Marty Stromquist, and it just really felt like a great fit. I joined NCS in 2014, originally in a corporate development role. For those of you that know the energy industry, we had a big downturn in the industry in 2015. I got really involved in the business after that, helping to reevaluate how we think about our value proposition and how we marketed our products and services to our customers. The market recovered, and NCS was on track for being a candidate for an IPO. As that was happening, I moved from the corporate development role into the CFO role. That was late 2016, and we were fortunate enough to find a window to get public in 2017. And that's when we started trading, as you mentioned, on the Nasdaq Stock Market. Continued in the CFO role for a number of years, working with Robert Nipper, one of the founders of the company. He had informed the board that he was looking to retire in 2022. I was nominated to move into the CEO role, and that transition took place at the end of 2022. I've been in the CEO seat for a little over 3.5 years. It's been a pleasure for me to spend, you know, kinda 12 years with NCS and really excited to kinda talk to you and let you know a little bit more about the company. I'll try to do it at a pretty high level here at first. Really, what we think of ourselves as a technology-focused oil field services and equipment company. We sell our products and services directly to the upstream E&P or exploration and production market. We sell to customers like Chevron and Conoco, Oxy, BP, Equinor. We do a lot of business in Canada, so we also sell to CNRL, Tourmaline, Whitecap, customers like that. We'll compete with Schlumberger, I think they're now known as SLB, Halliburton, NOV, Innovex, Core Labs, and others. A lot of the times, we at NCS, we're taking on larger and more established competitors in the completions market. What I'd say is for NCS, we typically will focus on areas where we can obtain a leadership position and also earn attractive margins in the segments that we participate in. Over time, that's led us to be in four product lines, and there's really one common theme or maybe several common themes, but the core common theme among them is that the products and services that we provide to our customers historically have enabled very capital efficient resource development and really targeting unconventional resource development. When you think of horizontal drilling, hydraulic fracturing, really a lot of the growth that's taken place within the oil and gas industry over the last several years, our products and services have been developed to help make that as efficient as possible. Historically, that's been the North American market, but there are unconventional resources in other markets as well, in Argentina and the Middle East, and we're increasingly focused on those markets that are a little bit earlier in their development as well. At our core, we really focus on innovation and partnering with our customers to bring new solutions to market. Usually those solutions will save our customers time, save them money, or help them to make better and more productive wells through using our technology. From a business model standpoint, we pair this focus on kinda research and development and innovation with what we call a capital-light business model. We outsource the manufacturing of most of the components that go into what we sell. We do the quality assurance on all those components, oversee the assembly, make sure we get a great product out to our customer in the field. What that's helped us do is minimize the amount of capital that we have to put into the business and has allowed us to generate free cash flow over industry and commodity cycles over time. Just very high level, from a size of the company standpoint, our revenue last year was about $180 million. From a geographic standpoint, we generated about 60% of that revenue in Canada, about 30% here in the U.S., and 10% outside of North America. You know, really very limited customer concentration within that. We work with over 200 customers in any given year. We work with a customer base that spans from the companies I mentioned earlier, your international oil companies and national oil companies internationally, all the way down to your smaller independents. Great overview there. You know, before we sort of dive specifically into some of the aspects of the company, when you think about all the services that you provide, what are some of the key, you know, and this is absent the very near term drivers that are going on in the market here today, right? But what are some of the key aspects that you're looking at, the benchmarks and metrics for growth within the industry and maybe just help educate those that may not be familiar as much? Yeah. I'll take that maybe in, you know, two different directions. One, when I think about, you know, the upstream oil and gas business and the customers that we serve more generally, there's been a really big shift over the course of the last several years. What I'd say is the industry as a whole went from resource growth and resource development mode, and that would've been call it 2015 to maybe even 2022, 2023, where it was all about production growth and acquiring acreage. Whereas today it's really a much more professional and industrialized industry where our customers are looking to maintain their operations, maybe grow production a little bit, but to be as efficient as possible. I mentioned a lot of our products and services kind of lead into the efficiencies for our customers. Every given year, it's amazing what, you know, our industry in general has been able to do as far as, you know, increasing production on an aggregate basis, especially here in North America, while reducing the amount of capital that's deployed to generate that production. The customers are really focused on generating a strong return on invested capital. They're doing that through oil and gas production, and we are helping them do that. From my perspective, if we can help our customers be more successful, help them get better returns in their individual assets, then we're gonna benefit, and we're gonna generate returns for our shareholders as well. Now, a little bit more specifically to NCS, we tend to play in what's called the completions market. For oil and gas, there's the drilling phase, there's a completion that takes place to get the hydrocarbons to flow, and then you have a long phase of, call it 15 to 20 or 30 years when a well may produce. We generate the bulk of our revenue at the time of the completion. It's when that well is being stimulated to get the hydrocarbons to flow. We view that as being about a $10 billion global market, of which a little bit less than half of that market is within North America, a little bit more than half exists outside of North America. I'd mentioned earlier we generate about $180-$190 million of revenue as a company. That would give us about a 2% overall share. I also mentioned earlier that about 90% of our revenue comes from North America, but more than 50% of the overall market's outside of North America. As we think about growth and where we have a lot of opportunity for the company, it's really making sure that we can penetrate that market outside of North America, 'cause that gives us a lot of sustainable growth ahead of us. Talk about the competition in this market and sort of the key differentiators that you sort of are utilizing to increase that share. Yeah. So competition, especially in North America, is fairly intense. I mentioned earlier we've got four product lines, and the competitive set is a little bit different in each product line. In general, we'll be competing with a couple of very large international oil field services companies. I'd mentioned earlier Schlumberger, Halliburton, but then also with some smaller private companies, depending on the product line and depending on the geography. The competitive basis within our market has a bunch of different aspects to it. Really, it's the quality of the product and service that you deliver, your responsiveness in front of the customer, being able to deliver your product when they need it, where they need it, on time and at a reasonable price. Price can be certainly a factor for the customers as well. In different markets, price is maybe a little bit higher up in the decision-making tree. Some markets, it's really more you get specced in based on the quality of the technology. For us as we kinda navigate that, you know, I'd mentioned earlier, you know, we wanna participate in markets where we can deliver clear value to the customer. Again, helping them do things faster, do things cheaper, help them get more production out of their assets. To do that, we need to continuously develop proprietary technology. We need to lean on kind of the know-how and the track record that we've developed over time. I'd say that's especially true for us in our largest product line. Within the four product lines we have, the largest is called fracturing systems. It's a sliding sleeve technology, but you can kind of think of it as being a valve that gets installed downhole in the customer's well, and you can open and close that valve to moderate the flow of hydrocarbons. Within that, I think we have a more extensive track record than almost anyone in the industry, and that's led our customers to bring us into new markets and help us develop new concepts, and expand our addressable market over time. You know, talk about some of the areas to expand upon some of the addressable markets here as well, right? You've talked about some newer segments, deepwater, SAGD, geothermal production. You know, elaborate on a couple of those opportunities there as well. Yeah. Those are really a few good examples in there of what I just spoke to. Historically in that fracturing systems product line, we had served our customers in North America. Several years ago we expanded into the North Sea, and the North Sea is a shallow water offshore market. As you move into offshore markets as opposed to onshore, it tends to be much more technically demanding. We've had good success in the North Sea. We worked with seven customers last year. We've added two customers already this year. As we think about growing the business and leaning into growing the addressable market, there's sort of the near term of leveraging that experience in the shallow water markets, in markets outside of the North Sea. We have a customer development project that we undertook with Shell for a deepwater project in the Gulf of Mexico, and that's gonna be our first entry into the deepwater oil and gas development. That's important for us for a couple reasons. One, it is even more technically demanding than the shallow water offshore market. You know, but two, it really opens up a new global product line for us. It's a technology that integrates kind of two different components. It's a first for NCS, and we're happy to work with a customer like Shell to help develop that. So, I had mentioned also, you know, I think you talked about some higher temperature markets, steam-assisted gravity drainage and geothermal. That goes to our expertise around flow control generally through the fracturing systems business. In SAGD, we had a customer in Canada that we worked on for conventional wells, who also operates this heavy oil steam-assisted gravity drainage operation, who wanted to trial something kinda unique and novel, and they called on us to work on it. It was an engineering exercise where we needed to take our existing equipment and upgrade it to work at higher temperatures, so upgrading the seals and other parts of the equipment. We had the first deployment of that last year and think that will represent a good opportunity for us growing forward, a market that we weren't in at all kinda three years ago. Similar opportunity in geothermal and what they call enhanced geothermal these days. That's base load power that would potentially serve data centers, so playing into the AI and data center theme there. The last market that we're looking at to help expand even beyond that $10 billion completions market is into the production space. I mentioned the customers, when they drill their wells, they're on production for 10, 15, 20, even more years. Again, we're installing valves, we're installing flow control equipment. To the extent that we have opportunities to go in and help them, you know, shift those valves, modify the production profile multiple times during the course of the well, it's not necessarily that we're getting distinct recurring revenue on a timely basis, but it gives us a lot more access to that well over its productive life. Got it. You talked earlier about vast majority of revenues are in North America looking to expand internationally. I think as on the fourth quarter call there, you mentioned maybe a little bit softer activity there in the U.S. and Canada, but sort of seeing improved international activity, especially later in the year in the Middle East. You know, what sort of gives you the confidence in that setup and what would change that? Sort of how is NCS positioning the company in that environment? Yep. No, no, great question. You know, look, coming into this year, most of our customer base, especially in North America, when they were going through their budgeting cycle, they were looking at $60 oil. That's compared to in 2025, as customers were setting their budgets, oil was closer to $70 or $75. Ultimately, you know, the price of oil and natural gas will dictate customer activity, customer capital budgets, which will then flow down to the part of that capital budget that we can participate in. Coming into the year, I think that $60 oil environment was something that would lead to our customers, especially in North America, looking at flat to maybe even lower spending year-over-year. Yeah. With the market share that we have in Canada, I may not have mentioned it, but we—you know, for fracturing systems, we participate in about 30% of the wells in the Canadian market. So as that market goes down, we're sort of impacted as well. In addition, there's been some customer consolidation in the industry, and, you know, two of our good customers consolidated, and the pro forma level of activity is a little bit less coming into 2026 than it would have been were those two operating separately in 2025. Kind of some specific headwinds and some market headwinds that kind of have led into the way we've framed the market. Now, at the same time, our objective is to grow despite that headwind, and within that's gonna take, for us, improving our market share with existing products and technologies, but also ensuring that we get those field trials and those opportunities with those new products to get in there. You know, within that, it's interesting that the field trial process with a customer kinda differs based on the nature of the solution that you're bringing to the table and how it impacts the workflow. I'll give you a couple examples. We have a couple of technologies that we've introduced over the course of the last, you know, year and a half, two years. One is something called the StageSaver, and I don't expect everyone on the call to know exactly what that is, but it's through a product line of ours called Repeat Precision. It's something that, there's a type of operation during hydraulic fracturing that our customers have started to adopt to be able to be more efficient. But when that happens, if something goes wrong, it can go really wrong effectively. With the StageSaver, we are able to introduce a contingency feature such that the customer can deploy, right, this really efficient methodology on surface and utilize this contingency feature in our plug if something goes wrong, right, during the completion of that well. It lets the customer recover really quickly and stay on track for their overall development. That's something that's seen really quick uptake in our customer base. We have a couple of different other, you know, technology introductions. We've got one called RapidTrace, which is within our tracer diagnostics product line. Typically in tracer diagnostics, a customer has to wait until samples are taken, run through a lab, and a report is processed to get their result. With RapidTrace, you can detect a chemical on-site and provide an answer very, very quickly. When the customer's operating in a remote environment, say in Alaska or the North Sea or somewhere, you know, far away from a city in the Middle East, being able to get a quick yes or no answer that can impact your operations is really important. We've seen some good uptick with that as well. On the other hand, we have another technology that we've introduced that we feel really great about called the Terrace AICV. That's a system that plays into that production space. It's a new and novel technology. It has a relatively high, you know, price point. We think there's a lot of value to it for the customer. In a lower commodity price environment, a flat activity environment, that's one that takes a little bit more conversation and a longer time to get that customer to commit to trial that product technology. It's kind of, you know, application by application, customers certainly are still willing to embrace and trial new technology, but they're cautious when they're doing something that is completely new and novel. Let's sort of fast-forward here a bit. You may provide us an update on the status of the integration of ResMetrics, and are you considering other M&A opportunities? If so, what areas are you exploring? Yeah. No, you know, thank you for the question. We acquired a company called ResMetrics in July of last year, and it was actually the first acquisition that NCS had done since 2017, right? We had gone 8 years without really participating in the M&A space. It was a relatively small transaction, about $7 million purchase price. We think we bought it for a good value. What's really important with it is it was a horizontal acquisition, so they were a direct competitor of ours in the U.S. in particular. With that, we were able to see through a line of sight to have pretty meaningful synergies once we got through the integration. You know, those synergies are coming through the adoption of best practices across the organization, and then, you know, rightsizing some of the capacity. Some of that's personnel, but a lot of it's also some of the infrastructure, so the lab and the manufacturing associated with those businesses. We believe we're on track to see between $1 million and $2 million of synergies in that deal, and again, it was a $7 million purchase price. We'll get those synergies by the middle of this year. With that, we also didn't underwrite, but we'd identified certain revenue synergy opportunities, and we are starting to see some of those develop as well. Feel really good about the ResMetrics acquisition, the work the team did with respect to the integration and starting to kind of rebuild some of that muscle around M&A more generally, both in, you know, evaluating and performing diligence on deals, but also through the integration. The fact that it was a relatively small transaction, but a complex integration because we were competitors, gave us that good first step. Yeah, look, I feel really, really good about the way that we've set NCS up for long-term organic revenue growth. Do think we can pair that very efficiently with the right M&A opportunities as well. We are in the market looking at several different opportunities. We're on the radar screen, right, for all the investment banks that are sending the teasers. We'll be disciplined, right? It's got to be the right value. It's got to be the right cultural fit. We've got to see that industrial logic where we can find those synergies and really lean into it. But I think that will become a bigger part of our strategy going forward, is identifying some of those inorganic revenue growth opportunities to pair with what we're doing internally in the business. Want to pair together a couple of comments you've made in terms of really an asset-light business model. You mentioned outsourced manufacturing and such, and sort of, you know, where the most operational leverage comes in as sort of acquisitions and just organic growth here. Where that pays off for us is a couple of different ways. One, and I'll frame this just with the revenue growth that we've seen in the last several years. Coming off the trough post-COVID in 2021, our revenue was about $120 million. In 2025, we got up to $185 million in revenue. Across that time, our gross profit margin has stayed pretty much the same at 41%, and that's really where I speak to sort of that asset-light outsourced manufacturing. When we grow the business, we need to lean on our supply chain partners to provide us with additional components. There's maybe a little bit of operating leverage at the SG&A level, but at the cost of sales level, but the real leverage is in SG&A. We did a lot of hard work in 2020 and 2021 rightsizing the cost structure of the business, and we're being very careful not to add cost back. We're keeping SG&A relatively flat. There may be some small inflationary increases here and there, but if we can grow the revenue dollars, grow the gross profit dollars, then we can see outsized growth at the EBITDA level by holding SG&A flat. The way we kind of frame that up in the business is that we should generate 25%-35% incremental EBITDA margins. When you think about that 25%-35% incremental, that is on a base EBITDA margin across all of the business today of about 15%. As we grow, we can drag that adjusted EBITDA multiple higher and higher over time. The other place we're having that, you know, capital-light model pays dividends for us is in being able to efficiently convert that EBITDA into free cash flow, right? If we're only spending 1%-2% of revenue on CapEx each year, just sets up for us to really convert as much of that EBITDA free cash flow as possible. We think through the cycle, we can generate or call it convert 50%-60% of every EBITDA dollar into free cash flow, which just helps to bolster the bottom line. You've got a healthy balance sheet, continue to generate cash, talking about these sort of incremental EBITDA margins as you grow here. Yeah. You know, outline capital allocation strategies. Yeah. Look, first and foremost, it's internal investment. Because we generate free cash flow as a business, right? That's always done within internally generated cash flow. That consists of our R&D. It consists of anything that we do need to spend within our engineering tech center to facilitate product development. We do have some internal manufacturing through a joint venture that we have. It's relatively modest, but there is capital that goes in there. One other thing, and maybe I should have spoken to it a bit earlier, but as far as how do we sort of set up NCS in an environment where our customers may be relatively flat from an activity standpoint, it's also to focus on our costs and to ensure that we do some value engineering processes so that we can deliver our products at a lower cost so that we can maintain or even grow those gross profit margins. Some of those initiatives will require a little bit of capital as well, but it should all still fall within that framework of about 1%-2% of revenue within CapEx. I think from there, we've got net cash on the balance sheet. We generate free cash flow, as you talked about. We do wanna keep some cash on the balance sheet strategically for that right M&A opportunity if it comes up. In our segment, in our sector, I think there's a lot of good M&A opportunities that are out there, a lot of smaller businesses that are either owned by private equity or founder-owned that are coming up with a leadership transition, and the preferred form of consideration is always cash, right? Cash is king. We wanna have some amount of cash on the balance sheet strategically so we can quickly execute if that right M&A opportunity comes up. To execute on M&A, you need the willing buyer and seller at the right price at the right time, and that doesn't always happen. As we continue to generate cash, if we don't put it to work through M&A, I think that's when we would look to potentially, you know, work with our board to think through what's the right framework for returning cash to shareholders down the road. All right, excellent. I've got about two minutes left here. Talking through your 2026 guidance that you've provided, you know, what are some of the opportunities for upside and where are sort of maybe the main risks as you see it here today? Yeah. Well, you know, the guidance was provided. I think we're in sort of quiet period now, but I will talk maybe bigger picture, right? One is around you have market share gains with newly introduced technology and also frame something up within the business as well, right? I mentioned that about 60% of our revenue comes from the Canadian market. The U.S. completions market is probably about five times the size of the Canadian market. So we've got great market share in Canada. There's a lot of market share running room in the U.S. that comes through Repeat Precision, but also comes through our fracturing systems product line in the U.S. I think if you're to kinda think through where is the biggest market and the biggest opportunity from a share perspective, first and foremost, it's in the U.S., and that's a market where you can capitalize on those opportunities very, very quickly. I think longer term, again, the biggest focus for us is going to be outside of North America. That's a longer customer acquisition cycle, but we're playing the long game there. We've moved from about 5% of revenue internationally back in 2023 to more than 10% today. I think over time, that can get into the mid-teens. I do think we'll see faster growth in the medium to long term in those international markets. Again, that's the North Sea and other offshore markets. It's the Middle East. It's Argentina, and other markets that are earlier on in the development of unconventional resources. All right, great. Well, we've somewhat run out of time here, but any quick final thoughts here before we wrap things up? Hey, look, really just appreciate you guys having us on. Appreciate the opportunity to meet with investors and, you know, obviously, please reach out through our investor relations website if you'd like to connect one-on-one. We'd like to have the conversation. Fantastic. Ryan, thank you very much for your time, participation in today's event. As you just mentioned, feel free to reach out to the company through their investor relations page or the investor relations team there. Anything I can do obviously to help facilitate anything, happy to do so as well. We have additional presentations, fireside chats coming up here. Everyone please stick around. Again, Ryan, thanks so much for your participation today. Really appreciate it. All right. Appreciate the opportunity. Thanks, Robert.