Good day, and thank you for standing by. Welcome to the Cactus Q4 2022 earnings conference call. At this time, all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone, and you will then hear an automated message advising your hand is raised. To withdraw your question, press star one one again. Please be advised that today's conference is being recorded. I will now like to hand the conference over to your speaker today, John Fitzgerald, Director of Corporate Development and IR. Please go ahead. Thank you, and good morning. We appreciate you joining us on today's call. Our speakers will be Scott Bender, our Chief Executive Officer, and Steve Tadlock, our Chief Financial Officer. Also joining us today are Joel Bender, Senior Vice President and Chief Operating Officer, Steven Bender, Vice President of Operations, and Will Marsh, our General Counsel and Vice President of Administration. Please note that any comments we make on today's call regarding projections or expectations for future events are forward-looking statements covered by the Private Securities Litigation Reform Act. Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control. These risks and uncertainties can cause actual results to differ materially from our current expectations. We advise listeners to review our earnings release and the risk factors discussed in our filings with the SEC. Any forward-looking statements we make today are only as of today's date, and we undertake no obligation to publicly update or review any forward-looking statements. In addition, during today's call, we will reference certain non-GAAP financial measures. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in our earnings release. With that, I will turn the call over to Scott. Thanks, John. Good morning to everyone. During the fourth quarter, the company set records for both quarterly revenue and adjusted EBITDA. This was also our eighth consecutive quarter with adjusted EBITDA growth. I was particularly pleased with the margin performance in each of our revenue categories. The fourth quarter is usually our weakest due to seasonal factors. Results were strong across the board and highlighted the company's best in class margin and return profile. Some fourth quarter highlights include revenue increased 2% sequentially to a company record $188 million. Adjusted EBITDA improved by 4% sequentially to a company record $66 million. Adjusted EBITDA margins were 35%, up 90 basis points versus the third quarter. We paid a quarterly dividend of $0.11 per share. We increased our cash balance to $345 million. I'll now turn the call over to Steve Tadlock, our CFO, who will review our financial results. Following his remarks, I'll provide some thoughts on our outlook for the near term before opening the lines for Q&A. Steve? Thank you, Scott. Note that all the historical and forward-looking data referenced today will be for Cactus on a standalone basis only and not inclusive of any potential impact from the pending FlexSteel transaction, which is expected to close in the coming weeks. As Scott mentioned, Q4 revenues of $188 million were 2% higher than the prior quarter. Product revenues of $125 million were up 2% sequentially, driven primarily by an increase in rigs followed. Product gross margins of 41% rose 120 basis points sequentially, due largely to operating leverage and lower branch costs. Rental revenues were $27 million for the quarter, up 1% versus the third quarter. Gross margins were up 420 basis points due to better asset management and lower repair costs, as well as declining depreciation expense. Field service and other revenues in Q4 were approximately $36 million, up 1% sequentially. This represented approximately 24% of combined product and rental-related revenues during the quarter, in line with expectations. Gross margins were 24%, up 20 basis points sequentially, driven by lower supplies costs and branch-related expenses. SG&A expenses were $23 million during the quarter, up $6.9 million sequentially. The increase was attributable to higher professional fees and expenses, $7.4 million of which were related to the pending acquisition of FlexSteel. Excluding these transaction-related expenses, SG&A was $15.5 million and 8% of revenue. We expect SG&A exclusive of transaction-related fees to be relatively flat in Q1 2023, with stock-based compensation expense of approximately $3 million. Fourth quarter adjusted EBITDA was approximately $66 million, up 4% from $64 million during the third quarter. Adjusted EBITDA for the quarter represented 35.4% of revenues compared to 34.5% in the third quarter. Adjustments to EBITDA during the fourth quarter of 2022 included approximately $3 million in stock-based compensation, $7 million in FlexSteel acquisition-related fees and expenses, and an add back of $2 million in other expense related to the revaluation of the company's Tax Receivable Agreement. Consistent with the fourth quarter's presentation, we've now revised the adjusted EBITDA for the third quarter of 2022 to exclude $1 million in FlexSteel acquisition-related expenses that were not previously added back to our adjusted results. Depreciation expense for the fourth quarter was $8.1 million. Approximately $8 million is expected in the first quarter of 2023. Income tax expense during the fourth quarter was $7.9 million. During the fourth quarter, the public or Class A ownership of the company averaged 80% and ended the quarter at 80%. Following the equity offering we completed in January of this year, our Class A ownership is expected to average 81% of the total shares outstanding during the first quarter. Barring further changes in our public ownership percentage, we expect an effective tax rate of approximately 21% for Q1 2023. GAAP net income was $41 million in Q4 2022 versus $42 million during the third quarter. The decrease was driven by higher transaction-related expenses, which more than offset increased gross profit across our various revenue categories. We prefer to look at adjusted net income and earnings per share, which were $44 million and $0.57 per share, respectively, during the fourth quarter versus $40 million and $0.52 per share in Q3 2022. Adjusted net income for the fourth quarter applied a 25% tax rate to our adjusted pre-tax income generated during the quarter. We estimate that the tax rate for adjusted EPS will be 25% during the first quarter of 2023. As previously stated, we've revised the adjustments for the third quarter of 2022 to include the $1 million in acquisition-related expenses that were not previously added back. During the fourth quarter, we paid a quarterly dividend of $0.11 per share, resulting in a cash outflow of approximately $8.4 million, including related distributions to members. In January, the board approved a dividend of $0.11 per share to be paid in March. We ended the quarter with a cash balance of $345 million, up $24 million sequentially. Operating cash flow was approximately $39 million during the quarter, with net working capital representing a cash outflow of approximately $21 million. This was driven in part by a decrease in accounts payable due to the timing of seasonal payments. In addition, payables declined in advance of anticipated first quarter inventory declines. Excluding non-routine items associated with the FlexSteel transaction, we expect net working capital to be relatively flat during the first quarter of 2023 and down as a percentage of revenue following a strong January. Net CapEx was approximately $6 million during the fourth quarter of 2022. Capital requirements for our business remain modest and will continue to exercise discipline with regards to CapEx. For 2023, we expect net CapEx to be in the range of $35 million-$45 million. This is inclusive of the potential purchase of a currently leased domestic property for approximately $7 million to build out of a new R&D facility in Houston, and it assumes $5 million-$10 million in growth capital dedicated to international expansion toward the end of the year. That covers the financial review, and I'll now turn the call over to Scott. Thanks, Steve. As stated earlier, the company generated record revenue in EBITDA during the quarter. U.S. product market share increased to 40.2% during the period as rigs followed rose by approximately 7%. From 3Q 2022 through December of 2022, we added 26 rigs in line with projections provided during our last earnings call. Product EBITDA margins improved by 110 basis points during the quarter to 41%. During the fourth quarter, the majority of our rig additions came from public companies, but we also increased our rig count with private operators. Thus far during 2023, we've witnessed a mid-single-digit percentage increase in public rigs followed, which has been partially offset by a slight decrease in private rigs followed, particularly in gas basins. For the first quarter of 2023, we still expect Cactus' average rigs followed to be up 3%-5% sequentially, despite the overall decline in the U.S. land rig count. As you know, our core customers tend to be larger, well-established oil producers who are less reactive to short-term swings in commodity prices. Nonetheless, we're prepared to deal with the impact that lower natural gas prices will likely have on the industry, particularly in the Haynesville, an area weighted towards privates. We are also excited to be introducing several technical wellhead enhancements, which are in the final stages of testing. First quarter 2023 product revenue is expected to be up approximately 5% versus 4Q. Product EBITDA margins are forecasted to be in the 41%-42% range for the first quarter. We feel good about the prospects of market share gains as evidenced by our ability to achieve market share of over 42% in February. From an international perspective, there are really no changes regarding our plans for product commercialization in the Mid East by 2024. In addition, we continue to benefit from opportunities outside of Saudi. On the rental side of the business, revenues increased 1% during the fourth quarter and were up over 40% year-over-year. International increases drove the sequential top line improvement. For the first quarter of 2023, we expect rental revenue to remain relatively flat. EBITDA margins should be in the low 60% range with potential for expansion late this year as we introduce cost-saving enhancements. In field service, EBITDA margins improved by 20 basis points during the fourth quarter, overcoming what is typically the weakest seasonal quarter of the year. Revenue was 23.6% of combined product and rental revenue during the period. Field service revenue for the first quarter of 2023 is expected to remain between 23%-24% of product and rental revenue. Field service EBITDA margins are expected to be approximately 28%. Regarding the FlexSteel acquisition, management is excited and optimistic about this unique combination. As noted earlier this month, we received no comments from the FTC or DOJ during the HSR waiting period. From a financing perspective, we successfully raised $166 million of net proceeds from an equity offering in January and have made substantial progress regarding our permanent debt financing. At this time, we expect to close on a new $125 million Term Loan A facility with a new $225 million upsized revolving credit facility upon transaction closing, which should occur during the first quarter of this year. FlexSteel's fourth quarter financial performance was in line with our expectations. Following the closing of the transaction, Cactus will provide additional details on the expected financial impact of the first quarter. We look forward to sharing the same once we close. Despite recent weakness in natural gas prices, we're optimistic regarding our customer base, which is larger and primarily oil-focused. Cactus remains well-positioned to deliver for shareholders amid an overall healthy market backdrop. With that, I'll turn it back over to the operator and we can begin Q&A. Operator? Yes, thank you. At this time, we'll conduct a question and answer session. As a reminder, to ask a question, you'll need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, press star one one again. Also as a reminder, please limit yourself to one question and one follow-up. Stand by, please, while we compile our roster. Our first question comes from the line of David Anderson of Barclays. Your line is open. Hey, good morning, Scott. How are you? Hey, David. How are you? I'm doing great. I was hoping if you could just kind of step back a little bit, and talk about the U.S., kind of the overall U.S. onshore market overall, and really kind of how you see duration of this cycle compared to, say, other cycles. Let's say kind of the 2008 to 2012 or 2013 timeframe. You touched on the end there. You know, everyone's sort of waiting for this natural gas story to have this ripple effect. Some people even think it's gonna collapse the U.S. services market. Would you make the case this is a more resilient market? I mean, there's fewer players. Everyone seems more disciplined in terms of capacity and pricing. I think you're seeing it in your business as well. Shouldn't this all kind of result in a cycle with more duration? Can you maybe expand on that a little bit? Wow, David. All right. you know, I think that what we've seen. Let me first talk about natural gas. What we've seen is weakness in the Haynesville. I'm sure you know that. We've not seen the same weakness in the Northeast. you know, the Haynesville is a very high-cost area to operate, and it's dominated by private players. One would expect that with lower gas prices, the Haynesville would suffer. Mm-hmm. For those of our customers that have multiple basin exposure, we're seeing a redeployment of rigs out of the Haynesville and into those oily basins. Let me maybe now turn my attention to the areas that we expect to see continued activity strength. I can only tell you what our customers tell us, and you know that we visit personally with all of our large customers on a regular basis. They've indicated no reduction in activity. You know that none of them planned on $100 oil. That if I think about our major customers, I'm actually seeing evidence of increases in their oil basin activity, and those increases will likely offset losses in the Haynesville. David, you know, that said, I don't know how low it could go in the Haynesville. I just feel like there's enough indication of demand in, in the Permian and actually in the Bakken as well. I think that in terms of fundamentals, I'm probably more bullish on oil fundamentals than maybe a lot of people. You know, I think U.S. production rates are disappointing right now. Well, efficiencies are disappointing. I think that we're gonna see China open up, which is, you know, also has implications in terms of costs. But China opening up, I think that Russian sanctions are gonna start biting. I feel pretty good about the duration of this current oil-based cycle. Gas, I don't even to offer an opinion on gas except that, you know, I think that $2 gas makes no sense whatsoever. You're not really concerned that kind of natural gas can sort of tip the apple cart here, that it doesn't seem like that could be big enough to really be more than an air pocket. Is that a fair way to look at it? Well, you know, David, I'm always concerned about our customers' cash flow. To the extent that natural gas prices are low, their cash flow is gonna be reduced. I don't think that it's gonna. I don't have this overreaching concern about the impact of natural gas on the rest of our customers. You know, I've visited with many of them over the last two weeks, so it's been very recent. All right. That's good to hear. I know everybody always loves to ask you about M&A, you're just dying to tell us about all the deals you're working on right now. you know, outside of you just getting this FlexSteel, it's a really small idea that's around kind of the well site, different things that you're already doing. I just wanna look at this market. The reality is kinda most of the bad actors are gone. there's really no private equity money on the sidelines from what we can tell. Is it fair to say that the M&A route is gonna be Pretty hard over the next two or three years, and that maybe the organic opportunities you've talked about in the Middle East, I know Latin America is another area you've sort of expanded. Does that make that a more likely growth route organically than M&A because of just like it seems like there's fewer opportunities in a more consolidated market? No, I would, I would say that there are, there are certainly no fewer opportunities, David. There are fewer buyers, but there are no fewer opportunities. There are an awful lot of people who are interested in monetizing during this period of time. You know, I'm gonna reiterate what I've said before. My preference has always been and will continue to be to consolidate this market. When I think about M&A opportunities, I think about consolidation. FlexSteel was an incredibly unique opportunity for this company, and you know all the reasons. I can't think of another company that we've looked at that checked all the boxes. Is there another FlexSteel out there? I mean, we haven't seen another FlexSteel. That's not to say there's not another FlexSteel, but I would probably tell you, look for organic growth or an opportunity, internationally. Okay. Thanks a lot, Scott. Have a good day. Thank you, David. Thank you. One moment for our next question. This question comes from the line of Stephen Gengaro of Stifel. Go ahead, your line is open. Thanks. Good morning, everybody. Morning, Steve. How are you? Two things from me. If you could start, and I know you gave some good color on the first quarter outlook. When you had, you had very strong margins in the fourth quarter across the board. Can you just talk a little bit about your conversations with customer on the product side and what you're seeing from a pricing perspective relative to inflation and how we should be sort of thinking about margin trajectory for the rest of the year? Maybe as part of that, you did talk about some technical enhancements, which I would assume would be a net positive the back half of the year. Yeah, I think that this team feels pretty good about sustaining margins, in terms of the cost impact. I think we've done, you know, Joel has done a remarkable job of managing our costs, and a lot of our input costs are just now beginning to flow through. We, you know, we still have to get rid of some of this higher cost inventory, but we're seeing the replacement costs decline. I think that from a cost perspective, and the impact that has on margins, I'm feeling pretty positive. Just along those lines, you, I know you talked a little bit about maybe using more capacity out of Louisiana because of some of the supply chain issues. Where do the supply chain issues stand now? Transit times are much improved. I mean, I'll defer to Joel on this, but. I mean, supply chain is actually sort of returned to some normalcy. There are pockets of it that are still problematic. Elastomers, some resin material, things like that. It's available, you just have to plan ahead for it, which we've done. In terms of vessels and things, you can ship out of China now and pick up a weekly shipment, drop it off at the port and pick it up in about a week. That's returned to normal. I think the only challenge there is maybe blank sailing. If you prepare yourself and you have contracts like we do, there should be no disruption in terms of getting product. Okay, great. Thank you, gentlemen. Thank you, Steve. Thank you. One moment, please. Our next question comes from the line of David Smith of Pickering Energy Partners. Your line is open. Hey, good morning. Thank you for taking my question. Congratulations on the quarter and really looking forward to the post-close Q&A. For now, my bigger questions were asked, we'll ask a couple of minor ones. Circling back to the natural gas team. Sorry if I missed this, but wanted to ask if you're having any conversations with clients who indicate that they might accelerate oil programs if additional frac spreads became available to them. The short answer is no. The, you know, because we're our customer base is so dominated by larger players, they're not nearly as reactive. Most of our major customers have indicated slight increases in activity, and they have not mentioned any change in their plan as a result of the availability of additional frac pressure pumpers. Makes perfect sense, but I had to ask. Just circling back to the enhancements or innovations you plan to introduce in the product segment. Just wanted to ask if you know, really looking forward to you know, to hearing about those. I'm all ears if you wanna share any color on those. Should we be thinking about those as potentially beneficial to market share or maybe just more accretive to margins? I hate asking because, you know, your market share and margins are already so strong. You know, David, we've always believed that if we don't continue to innovate, innovation is one of our greatest defenses in terms of our market share. Yes, I think that these enhancements will be attractive to people who perhaps were not Cactus customers. The real reason for this is to continue and expand the gap between what we offer and what our competitors offer. It provides us not only with the ability to retain market share, but it provides us, importantly, with the ability to protect our margins. Great answer. Appreciate the color. If I can slip in one minor one. The field service margins just held up remarkably well in the fourth quarter. I wanted to ask if that was just, you know, exceptional execution, if you're able to get maybe better margin protection. Basically, trying to think through, you know, this year and going forward, whether you know, figured out how to mitigate the historical seasonality hit to those margins? Yeah. I'm gonna let Steven answer that. That's his department. We were all very pleasantly surprised with our fourth quarter FSO field service results. Yeah, you know, I think, just to reiterate, we were very proud of what we achieved in the fourth quarter. I think we're optimistic that things will continue in that trajectory. There's still quite a bit of pressure on wage inflation, the field service level, so we're keeping an eye on that. Concentrating more on utilization at this point. Yeah, David, we probably do. You know, I haven't worked for a lot of competitors, obviously, but we do an extraordinarily good job of monitoring utilization. We're particularly sensitive to that during the fourth quarter when it usually drops because of the holidays. I think, you know, we planned better this year, we executed better this year, and I think that we'll continue to take those lessons forward. Thank you for all that color. Between the acquisition and the international expansion, there's a lot of good stuff we're looking forward to. Thank you all for your time. Thank you, David. Thank you. We have another question from Stephen Gengaro of Stifel. Stephen, your line is now open. Thanks. Thanks for taking the question, gentlemen. Two quick ones. One was on the market share improvement we saw sequentially and, you know, what you highlighted in February. Is this more rigs from existing customers, or is it new customers, or is it a combination? It's a combination. Okay, great. Thanks. The other one, I know I asked you this on the call, on the FlexSteel call, but maybe just to refresh, and we're getting this question from investors. The differentiation that FlexSteel brings, can you just give us, you know, a minute on sort of the key differentiating factors? Obviously that's a big part of the Cactus story. I think it would be useful for me just to kind of get another summary on the big differentiation of FlexSteel versus their competition. Steve, you wanna take that? Sure. Yeah, I think it comes down to a lot of what makes Cactus in the wellhead side so special, which is really in our mind, they just have a superior product, and they do a better job of executing on the service and customer interactions than everybody else. When you look at the sort of the formulation of their product, they're the only spoolable composite that utilizes steel. It has a robustness that the others lack. In my experience, you know, customers really value that just because, you know, less problems, less things to worry about. They've got enough to worry about out there in the field. Is the ultimate benefit to the customer one of sort of cost savings, efficiency, less maintenance? How should we think about sort of the value prop to the customer? Yeah, it's really multifold. You get a cost benefit, in terms of, you know, more rapid installation, getting wells online faster. What are some of the other aspects? I mean, this product handles higher pressures, so it has a much larger addressable market. Larger diameters offered. Larger diameter, which means that it can be used, further downstream of the choke of the wellhead, so it has greater exposure to the market. You do have less maintenance as well versus steel, corrosion. We've had 0 field failures since they introduced the product, and I think that's a function of the fact that it's not fiberglass or aramid fiber, it's steel. You know, you still have to join it. You have to put couplings ultimately on this product. It's, you can imagine it's a lot better to couple steel to steel because the couplings are steel than steel to plastic. Great. Thank you. If I could ask one more around FlexSteel. The equity raise. I mean, when you did the deal, or when you announced the deal, our math suggested you could deleverage this thing very quickly, and you didn't necessarily need to do equity. I was just curious on the thought behind that. Does that maybe sort of tell us that there's, you know, potentially more that you're looking at and you wanted the financial flexibility? I think, you know, I think that's right, Steven. We've certainly been rewarded by having the strength in our balance sheet to date. You know, we let the cash balance grow over time with no debt. That gave us an opportunity like the one we saw with FlexSteel. You know, it doesn't necessarily mean that it's because there's some other M&A trade that would be imminent or that's out there right now. Having the flexibility to, you know, provide those options is something that we certainly had in mind when we did the equity raise. I can just summarize it. It's definitely on our minds. Great. Okay. No, thank you all for the call. I appreciate it. Thank you. Thank you. I'd like to now turn the call back to John Fitzgerald for closing remarks. We appreciate everyone's interest in Cactus and look forward to speaking with you on the next quarter's earnings call. Thanks, everybody. Have a great day. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.