The following is a summary of the CES Energy Solutions Corp. (CESDF) Q1 2024 Earnings Call Transcript:

Financial Performance:

• CES Energy Solutions delivered record Q1 2024 revenue of $588.6 million, up nearly 5% from the previous record in Q4 2022.

• The highest quarterly EBITDA of $102 million was reported, marking a 20% increase from the previous quarter.

• Improvements were seen in the EBITDA margin, reaching 17.3%, higher than Q1 of the previous year and the last quarter.

• Free cash flow during the quarter was $57.4 million.

• The total debt to trailing 12 months EBITDA ratio decreased to a new low of 1.28 times from 1.49 times at the end of 2023.

Business Progress:

• CES continues to support growth with planned necessary investments.

• Opportunities in related business lines or new geographies are being explored to enhance value and returns.

• A proposal to renew its normal course issuer bid (NCIB) plan in July 2024 is expected, aiming to repurchase the maximum number of shares available under the NCIB.

• Leverage reductions are planned, with a goal of reaching approximately 1 times total debt to trailing 12 months EBITDAC.

• Recorded growth in multiple divisions, namely the Canadian drilling fluids division, the US drilling fluids group, and Canadian production chemicals business.

• CES anticipates further growth in revenue and free cash flow via market share expansion in each business segment.

• Opportunities for strategic entry into international markets and potential tuck-in acquisitions in North America are being evaluated.

• The company is considering expansion through new geographies based on opportunities or through acquisition of small businesses in these areas.

• The marked increase in US Drilling Fluids business indicates potential growth. Further expansion into the Haynesville area is also planned with a focus on service, attention to detail and cost-efficiency for maintaining the growth trajectory.

More details: CES ENERGY SOLUTIONS CORP IR

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