The following is a summary of the Pason Systems Inc. (PSYTF) Q4 2023 Earnings Call Transcript:
Financial Performance:
Pason Systems consolidated revenue in 2023 was $369 million, a 10% increase, and adjusted EBITDA was $171.5 million, a 7% rise over 2022.
The foreign exchange loss of $14.2 million affected net income, which stood at $97.5 million for 2023.
Q4 2023 saw consolidated revenue of $93.3 million, adjusted EBITDA of $38.9 million, 41.7% of the revenue, but a decrease in gross profit to $39.9 million from $51 million in Q4 2022.
Earnings per share for Q4 2023 were $0.11, down from $0.44 per share the previous year.
Free cash flow for 2023 increased by 38% to $97 million with a year-end cash balance of $172 million and no interest-bearing debts.
Despite a 19% decrease in North American drilling activity, Pason Systems achieved a record Revenue per Industry Day of $998 in Q4 of 2023, leading to North American revenue of $70.5 million.
The subsidiary Energy Toolbase posted a Q4 revenue of $4.8 million, demonstrating a 107% increase from Q4 2022.
Pason Systems expects to invest between $75 million and $80 million in 2024, up from the anticipated $45 million in 2023.
Business Progress:
Pason's strong competitive position was evident through product and technology demand that led to revenue generation despite reduced industry activity.
The company saw a 25% increase in international business unit revenue in Q4 2023 and the highest ever annual revenue of $63.8 million in 2023.
The acquisition of Intelligent Wellhead Systems (IWS) in January 2024 comes with the expectation of supporting future revenue and long-term free cash flow growth.
For 2024, Pason estimates that IWS could add an additional $20 million to $25 million to its revenue, primarily through automation offerings.
Growth is expected in control system sales in 2024, and initiatives have been put in place to utilize Pason and IWS's unique expertise to solve data aggregation challenges in the completions industry.
More details: PASON SYSTEM INCOR IR
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