Welcome to the Superior Drilling Products Third Quarter 2023 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press Star and zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Craig Mychajluk, Investor Relations for Superior Drilling. Please go ahead. Yeah, thank you, and welcome everyone to our Third Quarter 2023 Earnings Conference Call. Certainly appreciate you joining us today. Joining me are Troy Meier, our Chairman and Chief Executive Officer, and Chris Cashion, our Chief Financial Officer. Chris will first review our results in detail, and then Troy will provide an update on the company's outlook and opportunities, after which we'll open up for Q&A. You should have a copy of the financial results that were released before the market this morning. You should also have a copy of the slides to accompany, our conversation today. If not, both can be found at our website at SDP.com. Turning to slide 2, I'll point out that we'll make some forward-looking statements during the formal discussion as well as during the Q&A session. These statements apply to future events and are subject to risks and uncertainties, as well as other factors that could cause actual results to differ materially from what is stated here today. These risks and uncertainties are provided in the earnings release, the slides, and other documents filed by the company with the Securities and Exchange Commission. These documents can be found on our website or at sec.gov. I want to also point out that during today's call, we'll discuss some non-GAAP financial measures, which we believe will be useful in evaluating our performance. You should not consider the presentation of this additional information in isolation or as a substitute for results prepared in accordance with GAAP. We have provided reconciliations of non-GAAP with comparable GAAP measures in the tables accompanying the earnings release, as well as in the slide deck. With that, please turn to slide 3, and I'll turn it over to Chris to begin. Chris? Thank you, Craig, and thanks, everyone, for joining us today. The third quarter presented some challenges given the persistent decrease in the domestic rig count, which led to lower demand for our tools and contract service businesses. However, helping offset the slowdown in the domestic market was modest growth in our international business, where we have made investments in our technical sales support team as we look to accelerate the Drill-N-Ream market penetration and capture greater opportunities moving forward. The overall top-line softness impacted margins given the under absorption of fixed costs, together with unfavorable product mix during the period. Also contributing were additional costs that I will speak to later in the presentation. Despite these challenges, we generated significant cash from operations, driving our year-to-date total to $4.1 million. Also, during the quarter, we finalized our new credit facility, which provides additional financial flexibility and liquidity, and we have begun to utilize the accounts receivable purchase program as part of that facility. Now, if you turn with me to slide 4, you can see an overview of our top line, which I mentioned felt the impact of the lower U.S. rig count. International revenue, however, increased 6% over last year, but sequentially, we were down. As we mentioned on our last call, at the end of Q2, we brought in a new team lead for our international business, and he has made tremendous progress during the quarter, getting up to speed regarding our business, evaluating staff, and determining priorities. As a result, we made further headcount changes within the business development technical sales support group. This team lead has a highly technical approach in approaching the customer and represents a significant upgrade in our Middle East business development efforts. Our U.S.-based executive management team spent significant time on the ground in the Middle East in guiding this reorganization. We see incredible opportunities for growth and are looking forward to leveraging our new team's capabilities and skills and significantly adding to that team as we move into 2024. In North America, we saw a slight revenue decline year-over-year. The change reflects the impact of a lower rig count in the U.S., as the current quarter average count was 650, down 111 rigs or 15% year-over-year. The lower rig count impacted both Drill-N-Ream tool sales and contract services work. Despite this significant decline in the rig count, our revenue was only impacted by 3%. We were able to hold our own against these headwinds and gain a larger share of the tool and contract services market. Now, unfortunately, the U.S. rig count story hasn't gotten any better as the count has further declined to 618 rigs as of last week. We haven't seen those kinds of numbers since the end of 2021 and beginning 2022, just as we were coming out of the pandemic. We believe we have reached the bottom of the U.S. rig count decline and expect the domestic count to begin to improve as we move into calendar 2024. On the international front, the rig count has trended very differently versus the U.S., steadily improving throughout calendar year 2023, from 900 at the beginning of the year to 962 as of the end of October. Now let's move on to Slide 5 and take a little closer look at our tool and contract services revenue. Third quarter contract services of $1.8 million was down slightly from the sequential period and last year's third quarter. Likewise, tool revenue for the Drill-N-Ream was down slightly, which reflected the impact of that decline in the U.S. rig count, that 15% decline that we just referenced. You know, once again, we want to emphasize that our revenue decline was at a much lower rate than the overall 15% decline in the market. Now let's go to Slide 6 and take a look at SG&A expenses. As you can see, year-over-year expenses were up roughly 50%. A significant portion of this was due to our international human resource reorganization that I mentioned earlier. We had people that were not aligned with our new technical approach to business development, and they are no longer with the organization. As well, with our U.S.-based management team spending a significant amount of time in the Middle East, we incurred increased travel-related costs. In addition, we continue to spend heavily in our patent infringement lawsuit. During the quarter, we incurred $260,000 in litigation legal expenses. Year to date, we have incurred just over $1 million, which is in line with our 2023 guidance. As well, in the quarter, we modified our small diameter Strider tool to be run in the Middle East. Lastly, we had incremental costs related to our previously announced initiative to evaluate strategic merger and acquisition options. Moving forward, we believe the majority of our litigation costs are behind us, and as of now, we expect a jury trial in the spring of 2024. We will continue to incur litigation-related costs as we move forward, but we expect those costs to be at a lower level compared to what we have spent this year. In addition, the reorganization of the Middle East technical team is complete, and we don't expect a repeat of those travel-related transition costs, nor do we expect additional Strider-related modification costs. Now, if we go to Slide 7, we can see our bottom line and Adjusted EBITDA results. Our business has significant operating leverage when volumes increase, but with lower volume, you can see the reverse of that is true. With those unabsorbed fixed costs and layering on the additional costs, as I just mentioned previously, and the unfavorable product mix, they all contributed to the margin pressure that we saw during the period. We did have a reduction in force in the first week of October in order to rightsize our manufacturing organization for what we continue to see as a soft near-term market in the U.S. As I mentioned, we do expect going into 2024, the market to begin to increase, but as we sit here today, it's still a soft market. In that we've completed our investments in our Middle East repair facility and Drill-N-Ream rental tool fleet, this reduction in force will not impact our ability to respond to additional Drill-N-Ream tool demand as we move into 2024. Two other items also impacted Adjusted EBITDA. We received roughly $200,000 from a non-management shareholder due to short swing SEC profit rules, and these funds were recognized as other income in the quarter. Partially offsetting was a $43,000 expense due to an early redemption fee as part of the company's debt refinancing during the quarter. Now let's move on to Slide 8. We will highlight our balance sheet, which has strengthened significantly. We have previously discussed our new credit agreement that we closed in late July, and beyond the additional financial flexibility and liquidity, it extends our maturity dates and importantly, includes more favorable financing terms than our previous debt arrangements. Total debt at the end of the quarter was a modest $2.5 million, and we continued to be in a negative net debt position where cash exceeds debt. Year to date, as I mentioned, we generated from operations $4 million compared to $1.3 million in the year-ago period. Cash at the end of the quarter was $4 million, double the balance from year-end 2022, reflecting improved working capital management and the timing of receiving customer remittances under the new credit facility purchase program and the resulting transferring of those remittances to the bank. At quarter end in October, we made a $1.2 million payment to our lender as part of that program. Now going forward, we do not expect to see timing issues such as these with lockbox system now in place. With the lockbox, we will no longer be a customer remittance pass-through. Thus, payments will go directly to the customer, to the bank to settle AR purchases. Capital spending of $3 million year to date was largely in support of our Middle East operations, which included the Drill-N-Ream rental tool fleet and the new service and technology center that we opened in the second quarter. Now let's go to Slide 9. We are maintaining our guidance for 2023. Our revenue range is $22 million to $24 million. SG&A is expected to be between $9-$9.5 million, and this includes those litigation costs, which projected through Q4, will be approximately $1.2 million. So as I mentioned previously, through 9 months, it's just over $1 million, so we expect another couple hundred thousand of spending in Q4. And as I also mentioned previously, we expect a jury trial in the spring of 2024. Our Adjusted EBITDA guidance is not, is $5.5-$6.5 million. And lastly, our expected capital spending guidance for 2023 is in the range of $3.5-$4 million. So you can see that the vast majority of our CapEx has already been incurred. With that, I'm going to turn the presentation to Troy to wrap up with the review of our outlook and opportunities, both in North America and the Middle East region. Troy? Thanks, Chris, and thanks again everyone for joining us. Before I get started on my comments on the queue, I want to make sure that everybody on this call is aware. As mentioned earlier this year, the company's board of directors has engaged a financial advisor to assist the company with the evaluation of a potential strategic partner or alternatives. This process is ongoing, and we are committed as ever to maximizing our shareholder value. As part of the process, the company has received and is actively evaluating unsolicited interest in the company from prospective strategic transaction counterparts. Keep in mind, there's no assurances regarding the outcome or timing of this evaluation, and we do not intend to make further announcements until such a time further that disclosure is appropriate or necessary. So let's go to slide number 10, and let's look at North America, our comments towards North America. You know, as Chris has mentioned, it's the year-over-year, the rig count was down 15%, but we were able to support this downturn by bringing on some additional hot work. We've got some additional products going through our shop other than bits that are—we're seeing an uptick in, and so that's been a plus. The fact that we've been working with a second very large servco to start doing their work as far as the PDC bit refurb, and that's coming along good. We think that that's really gonna pick up and will be a big plus as we go into Q1 of next year. We're building that relationship, we're, we've, we've proven our services that we've done for them, and we expect to see that volume increase throughout Q4, and then really get strong as we go into Q1. We rationalized our domestic operations, and there'll be some savings there, as noted. Let's look at the international. When we look at the MENA, the rig count, what we're seeing over there is totally opposite of what we're seeing here on the domestic front. Doesn't matter what country we're going to, whether it's, Kuwait, the UAE with Abu Dhabi, the Kingdom of Saudi Arabia, Oman, they're, they're all picking up rigs, and they're doing it in a rapid fashion. We've proven our, our tool out very well in these countries. We haven't been able to do work in KSA, nor have we been able to do work in Abu Dhabi due to the fact that we didn't have our ISO requirements. Those are all complete now. So we're excited for the opportunity that's bringing us in. As we look into next year and through the remainder of this year, we're excited to be able to, you know, first of all, start doing work in with ADNOC in Abu Dhabi. We've made those visits. We've got some good history with some tools that we run there through a large servco that had very good performance. But again, we needed to get those ISO qualifications that we now have in place. So as our tech team, as we've been building that, you know, we've mentioned, you know, on previous calls, we don't consider ourselves a sales and marketing company. We're heavily weighted towards tech and operations and fabrication. We have been building a team now that's been building a very strong database as we look at the tool runs that we've had in Oman and Kuwait, and even the tool runs that we've had in Saudi Arabia and Abu Dhabi, prior to being essentially penalized for not having our ISO requirements. The Drill and Ream product line performs very well in the MENA region, just like it does here in the U.S. But I think the big opportunity there is the fact that when you look at the MENA region, the Drill-N-Ream was introduced into the vertical section of the wellbore. So we introduced that tool in larger sizes—so if you can envision a you know, typical well, here in the U.S., we drill a vertical, we drill a curve, and then we drill a lateral or horizontal, if you will. And the Drill-N-Ream was designed and built for those long laterals that have now turned into extremely long laterals here in the U.S. But when you look at the MENA region, the issues that they have in the upper section of the wellbore is where we've introduced the Drill-N-Ream to really help out. Now, saying that, we've also drilled the two longest laterals in Oman with the Drill-N-Ream. So you know, I'm sorry, the two longest laterals, horizontals again, in Oman. So there is- they are starting to make these curves and starting to lay down and go sideways, and that's where the real benefit of Drill-N-Ream comes in. So the fact that we started out in the upper section of the wellbore and have proven this tool out in the MENA region with the larger sizes, the 16-inch sizes, the 12-inch sizes, and working our way down to the 8s and the 6s that are so popular here in North America, is going to be really neat to see how this matures over time in the MENA region. We mentioned earlier, Chris mentioned about our technology team. We're very pleased with what's going on there. And like I said, the database they're building and the runs that we're being able to now put in there, put post-run reports and show offsets of, you know, before and after our product is really neat to see, and we're excited to start getting that out there in front of the customers. We have the new service, like our legacy service here, that's gonna be happening. We're looking to kick that off. When we talk about that, it's, of course, the bit repair service. We're currently working with some large servcos on contracts as we look to kick this off in January. All of the equipment needed for that is in sea cans, heading over there, looking to land in the Jebel Ali Port on the twenty-ninth of November. So that equipment has been built. We've got a couple items left to go that will be in another Sea can that leaves Vernal, hopefully next week. And we've got some media blast units that will be going in there and another OD grinder. But so the equipment CapEx has been spent. We have a highly trained team that is really good at this service, that will be overlooking and working and living in the MENA region as we kick this off in January. So we're really excited to see that now start to mature as well. Again, the ISO certifications that the team got into place, it was a big task, and we now have the ISO 9001, the ISO 14001, and the ISO 45001. So all of these things are in place, along with a new large Drill-N-Ream inventory. So we're looking to start seeing the benefits of all of this as we roll into finish out Q4 and roll into Q1. But with that being said, I'm gonna turn it over to some Q&A. Thank you. Ladies and gentlemen, we will now be conducting a question-and-answer session. If you would like to ask a question, please press Star and One on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press Star and 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 key. Ladies and gentlemen, we will wait for a moment while we poll for questions. Our first question is from the line of Dick Ryan with Oak Ridge Financial. Please go ahead. Thank you. Thanks for taking the questions. Hi, Dick. Troy, the reorganization was that a t first, it sounded like it was just over in the Middle East, but then you said so there was some domestic rationalization. Can you explain a little bit more if there was some cuts in the, in the North America, or was it primarily in, in international? No. So we have cut back in North America due to the slowdown in the third-party machining services. Most of it was in the machine shop. We felt that we could pull back there, and it wouldn't hurt us going into Q1 of next year. But you know, the big thing that we protect is when we look at the brazers that we have, the fabricators that we have, we've kept them. We've kept them mainly to not just support the uptick that we'll see come January. You know, typical come January, about tenth, all of a sudden, the market starts to wake up, and everybody needs everything right now. And so we understand that well, and we're positioned well to respond to that. So we haven't reduced the headcount in the fabrication. It was just a little bit of headcount in the machining as the third-party work, you know, as we were doing drilling products for the large servcos had slowed down with the rig count decrease. When you look at the Middle East, what we did there is we, you know, we tried to go in and say, okay, we can do this sales and marketing. We can figure this out, and what we learned, you know, when we started off the year, we had some really big plans to really penetrate quickly. But then what we realized is we started going down the road, and we don't have a structure to really support sales and marketing. As we had, you know, guys that would A team that would get on a plane and go over to Oman or go spend some time in Kuwait. We realized, you know, come about June timeframe, that that's not gonna work. We've gotta have a sales and marketing structure in place and a good one. And we've never done that before. You know, we've just never been in a sales and marketing, and so we backed up, and we said, wait a minute. You know, our goal is to position ourselves for what we told you all we were going to be doing when we looked at M&A candidates and M&A potential. So we said, let's position ourselves for that opportunity. To do that, we brought in a petroleum geologist who has written several white papers on the Drill-N-Ream product that we were very impressed with, and he's joined our team, and then he's taken our application engineering group and starting to build that database of, you know, the tools that we've run and where we've run them. So we said, let's cut the part of the team that we considered salesmen. Because we found that as they go out and was seeing the customers, they really weren't getting that benefit of what the Drill-N-Ream is to our customers across. And so we said, let's get our tech built up, let's get our database built up, and this team that will support a large sales and marketing operation at a very highly professional level, once we find that, let's be ready for that. And we're still getting sales, you know, we're still getting, we're spending time in Kuwait, and we're spending time with ADNOC, and we're spending time in Oman, and we're still getting tools in the hole. We're starting to see an uptick, you know, in Q4 with runs. So it's not like we're not getting out there, but it's at a different level. It's going in and spending time at the higher-ups in these companies and explaining the benefits that they see when they do have a truly conditioned wellbore. And it's we're the word's getting out, you know, we were over there, had our first showing at a large MENA conference called ADIPEC. And ADIPEC is their regional big oil and gas event, and we attended that in October. We had a booth in there, and our booth was, it was highly successful. We had a lot of people coming in that wanted to know about the tool and how it was gonna be helpful for them, and we had the technical support staff that could talk to these people, and it was really neat to see. So, you know, I think that that answered your questions, both on the domestic and the international front, and if not, let me know. It certainly did. Just to follow up, so, so to get that sales momentum kicked in, is that something you going to do internally, or will that take more of a partnership path? We're looking. I mean, we're doing it through a technical side internally right now, but we look at it as we're really planting the seeds. You know, we're planting the seeds in these groups at a high level, and it's strong seeds. When we go in there with our offset reports, you know, our drilling offset reports, they're very impressive. And we've never had that group that could do that presentation to a very technical side of these NOCs. So it is still getting out there and making people aware of the Drill-N-Ream and the benefits they are, but we're also looking forward to a very professional organization that can come in and say, you know, we're very good at the sales and marketing side of things, and we really appreciate what you've all done. You know, let's get going. When you look at North America, your tool revenue held pretty well versus the rig count, as both you and Chris mentioned. And in your slides, you talk about the distributor continuing to improve market share. Can you give us specifics on what you're seeing with the DNR and the market share in North, in North America? Sure. What we see, you know, is there's a competitive landscape out there, and the operators, you know, no matter how good their bottom line is looking, they're always working you on price, and they'll use a competitive tool to try to get you to bring down price. And, you know, that threat is always there. But one of the things that our strategic partner has done here in North America is, they've held that price. And what they've seen is the operator will run brand X and give it a run or two, but then they come back to Drill-N-Ream. They always come back to Drill-N-Ream. The performance is noticeably different. And so that's that model's out there now. We know that somebody's gonna try to get, you know, to bring down the pricing that the Drill-N-Ream demands, and we may lose a few rigs for a month or two, but then they come back. And that's been what we've seen throughout this year. And our channel partner has actually been able to grow market share through this down cycle. You know, we talked about it being 15% down in Q3, but I mean, year-over-year, as of today, it's down 20%, and they've done a great job increasing their market share. On the contract services side, kind of flat sequentially, was there meaningful contribution from the second customer in Q3? No, not in Q3. It was really us. You know, they. Everybody, all these large servcos, you know, pride themselves on their bits, of course, and to have a third party to do what we do is really unique. And so when we started this with them in Q3, it was kind of just testing the waters with us. You know, can we do what we say? Do we have a quality service? You know, are our products going to perform well once we... Is their products gonna perform well once we work on them? And the answers to that, it's been great. You know, they're very impressed with our turnaround time. They're very impressed with the performance that they see with their products once we have serviced it. So we're looking to grow that relationship stronger in Q4. We'll see an uptick in units coming into our facility. We have and we look to really push that hard as we start off the new year. Thank you. Ladies and gentlemen, a reminder, if you wish to ask a question, please press star and one. Once again, if you wish to ask a question, please press star and one. As there are no further questions, I would now hand the conference over to the management for any closing comments. Again, thanks, everybody, for joining us. You know, we look forward to our Q4 call, and we look forward to talking with you all again here, and have a wonderful rest of your week. Thank you. The conference of Superior Drilling Products has now concluded. Thank you for your participation. You may now disconnect your lines.