The following is a summary of the CES Energy Solutions Corp. (CESDF) Q2 2024 Earnings Call Transcript:

Financial Performance:

• CES Energy Solutions reported all-time Q2 record revenue of $553.2 million, a 7% increase year over year.

• EBITDA for the quarter reached $95.4 million, the second highest ever for the company, representing a substantial 29% increase compared to Q2 2023.

• The company achieved an EBITDA margin of 17.3%, which ties with the previous quarter for the highest quarterly EBITDA margin in nine years.

• Free cash flow was robust at $54.8 million, supported by these strong financial metrics.

• Total debt to trailing 12 months EBITDA improved, reaching a new low of 1.12x.

Business Progress:

• Continued dominance in North America, with a market share increase to 27%.

• Successful tuck-in acquisition of HydroLite LLC in Texas, now operating as AES Completion Services.

• Notable operational enhancements in both custom chemical solutions and drilling fluids market leadership.

• Capital investments planned to support sustained revenue levels and new business opportunities, with expected annual cash CapEx of approximately $75 million to $80 million.

Opportunities:

• The acquisition and subsequent renaming of HydroLite LLC as AES Completion Services, enhancing CES's service offerings in drilling fluids and production chemicals.

• Strategic emphasis on tuck-in acquisitions and organic growth within existing and new markets.

Risks:

• Economic uncertainties that could affect the drilling and chemical solutions sectors, although not explicitly mentioned, are inherently present given the industry's cyclical nature.

• Potential challenges in integrating acquisitions such as HydroLite LLC could impact near-term operational efficiency.

More details: CES ENERGY SOLUTIONS CORP IR

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