Jeffrey Grampp

Jeffrey Grampp asked about the contribution of the $150 million in large orders booked in 2025 to the 2026 guidance, or if most of it is expected in 2027 and beyond. He followed up by asking for more context on SMRs being a bigger factor in 2026 growth (as noted on slide 23) and their materiality to Mirion's growth story in the coming years.

Answer

Brian Schopfer, CFO and Medical Group President, clarified that while some of the large orders booked in late Q4 2025 contribute to 2026, the first year of these larger contracts tends to be the lightest, with ramping typically occurring after 18 months into years two, three, and four. Thomas Logan, CEO and Chairman, noted the difficulty in contextualizing SMRs due to the sheer volume of global projects, but highlighted contractual relationships with over 20 SMR developers and extraordinary order growth in 2025. Brian Schopfer added that SMRs were sub-1.5% of total revenue in 2025, growing to sub-3% in 2026, indicating growth but not yet meaningful in the grand scheme.

Jeffrey Grampp asked about the contribution of the $150 million large orders booked in 2025 to the 2026 guidance, and how material SMRs are expected to become to Mirion's growth story, requesting more contextualization.

Answer

CFO Brian Schopfer clarified that while some 2025 large orders contribute to 2026, the first year of such contracts is typically the lightest, with ramp-up occurring in years two, three, and four. CEO Thomas Logan noted the difficulty in contextualizing SMRs due to the volume of projects but highlighted over 20 contractual relationships. Brian Schopfer added that SMRs are currently sub-3% of total 2026 revenue, up from sub-1.5% in 2025, showing growth but not yet meaningful in the grand scheme.

Jeffrey Grampp asked about the competitive landscape and total addressable market (TAM) for the PWRtek solution and questioned what Flotek's next strategic steps would be after integrating the new assets.

Answer

CEO Ryan Ezell positioned the PWRtek assets as a unique, turnkey solution with no direct competitors, differentiating them from simpler filtration units. He clarified that the 500-unit TAM mentioned was specific to domestic oil and gas power, with the broader market for data centers and grid support being much larger. As for next steps, Ezell identified upgrading real-time instrumentation for production chemistry as the next major phase, which he believes will significantly expand Flotek's addressable market and create a comprehensive chemical and data management company.

Jeffrey Grampp of Alliance Global Partners inquired about the drivers behind the significant Q4 international revenue growth, its materiality, and its margin profile. He also asked about customer response to the ongoing uncertainty surrounding EPA regulations for flare monitoring.

Answer

CEO Ryan Ezell attributed the international growth to strategic expansion in the Middle East, particularly a newly approved slickwater fracturing system in Saudi Arabia and conventional work in the UAE and Oman. CFO J. Clement quantified the revenue, noting international chemistry was $4.5 million in Q4. Ezell explained that while specialty products carry high margins, friction reducers are more commoditized. Regarding the EPA, Ezell stated that despite regulatory delays, major operators are proceeding with flare monitoring adoption as part of their internal sustainability programs, driving continued growth for Flotek's VeraCaL units.

Jeffrey Grampp of Alliance Global Partners inquired about Flotek's flare monitoring business, specifically the preferred sales model (lease vs. buy) and customer concentration. He also asked about the company's strategy for balancing SG&A cost controls with the need to reinvest in growth opportunities like the JP3 system.

Answer

CEO Ryan Ezell explained that the company's preferred commercial model for the flare market is a rental and service agreement, though some customers are considering capital purchases for long-term monitoring. He noted that while a few key customers were early adopters, the customer base is now rapidly diversifying. CFO Bond Clement added that while they are monitoring demand and may add headcount for JP3 field delivery, these costs would likely be in COGS, not SG&A, and they expect SG&A as a percentage of revenue to continue trending down.

Jeffrey Grampp of Alliance Global Partners inquired about the primary factors that would drive results toward the high or low end of Vitesse's revised 2025 guidance. He also asked about the potential for share buybacks, given the stock's current valuation and high dividend yield, and any limitations from the credit facility.

Answer

President Brian Cree explained that the guidance range is influenced by the timing of completing drilled but uncompleted wells (DUCs), potential acquisition activity, and the development pace of third-party operators. Chairman and CEO Robert Gerrity added that service costs were already declining. Regarding capital allocation, CFO James Henderson stated that the primary focus is the fixed dividend, which limits excess cash for buybacks at current commodity prices, though it is constantly evaluated. Robert Gerrity affirmed that the company allocates capital to the highest-return opportunities, whether assets or stock repurchases.

Jeffrey Grampp of Alliance Global Partners inquired about Vitesse's acquisition strategy following the Lucero deal, asking if the stronger balance sheet and volatile oil markets would lead to a more aggressive M&A approach. He also asked about the company's dividend philosophy and its willingness to use the balance sheet to protect the dividend during market downturns.

Answer

Chairman and CEO Bob Gerrity responded, stating that oil prices in the $60s represent a 'sweet spot' for acquisitions and that the company is seeing significant deal flow. Regarding the dividend, Gerrity emphasized it is Vitesse's core 'product' and is protected by disciplined capital spending. He explained that lower oil prices lead to lower drilling and completion costs, which benefits their coverage ratio, making the dividend 'solid' in a $55 to $85 oil price environment.

Jeffrey Grampp of Piper Sandler Companies inquired about the reasons for Vitesse's low Q3 capital expenditures despite robust activity levels, the durability of organic CapEx growth into 2025, and the current acquisition environment for both near-term development and larger deals.

Answer

President Brian Cree explained that lower Q3 CapEx was a matter of timing, with well completions from earlier acquisitions shifting into Q4 2024 and Q1 2025. He also confirmed greater visibility into 2025 organic growth, noting that received AFEs have nearly doubled from 2023. Chairman and CEO Bob Gerrity added that while current oil prices make near-term acquisition opportunities more attractive, they must compete with high-return organic projects, and the company remains highly selective on larger deals.

Jeffrey Grampp of Alliance Global Partners inquired about the North Carolina AFFF destruction contract, specifically the timeline for the initial phase and the criteria for expansion. He also asked about the company's current manufacturing capacity and whether it poses a near-term constraint on growth.

Answer

Executive Christian Gannon stated that 374Water has six months to process the initial 1,000 gallons for the North Carolina contract, with expansion dependent on demonstrating complete and effective destruction. Regarding production, Gannon confirmed a current capacity to build two to four AirSCWO systems simultaneously, which is adequate for near-term needs but will require future expansion. He noted this capacity is largely independent of system size for the AS1, AS6, and AS30 models.

Jeffrey Grampp asked how recent large orders of $15-20 million compare to other opportunities in the pipeline and whether the manufacturing diversification strategy is driven solely by trade concerns or also by other factors like customer preference.

Answer

CEO Kang Sun stated that most customers in the pipeline have the potential for orders of a similar magnitude and that the sales team is focused on accelerating their qualification process. He confirmed that diversifying manufacturing is not just for geopolitical reasons but also to be closer to customer bases in regions like Europe, though Asia remains the primary manufacturing hub due to the supply chain.

Jeffrey Grampp asked about the primary drivers for the record increase in new and total customer counts, questioning if the SiCore product and secured manufacturing capacity were the main catalysts. He also noted the seemingly rapid qualification period for the $20 million SiCore order and asked if this was typical.

Answer

CEO Kang Sun attributed the customer growth first to superior battery performance, with the new SiCore capacity removing previous constraints. He explained that the quick qualification for the $20 million order was possible because the specific application had a simpler certification process, and the customer could validate performance using Amprius's extensive existing data.

Jeffrey Grampp of Alliance Global Partners inquired about the current trends and opportunities in the M&A market. He also asked about the company's balance sheet strategy, specifically the priority between deleveraging versus using cash and debt for further acquisitions.

Answer

CEO R. Prejean stated that DTI maintains a steady M&A pipeline with improving alignment between buyer and seller expectations, and they hope to execute on opportunities in 2025. CFO David Johnson added that year-end debt was primarily for acquisitions and that 2025 free cash flow can support both CapEx and either debt paydown or M&A. Johnson affirmed they are well-positioned but will remain mindful of leverage, while Prejean noted they could accelerate deleveraging if market conditions change.

Jeffrey Grampp of Alliance Global Partners inquired about the drivers of the significant gross margin improvement in the tool rental segment, the integration progress and revenue synergies from the Superior Drilling Products acquisition, and the characteristics of DTI's current M&A pipeline.

Answer

CFO David Johnson attributed the margin improvement to the vertical integration benefits from the Superior Drilling Products acquisition and higher utilization of accretive pipe assets. Executive R. Prejean added that the Superior integration is complete in the Western Hemisphere and gaining traction in the East. He also noted the M&A pipeline includes everything from tuck-ins to transformational deals, with valuation gaps between buyers and sellers narrowing.

Asked about the relationship between the EXIM loan closing and Jamestown timelines, the business rationale for accelerating Jamestown assembly, and the primary bottleneck in that acceleration.

Answer

The EXIM loan closing is independent of the Jamestown operational timeline, as long-lead equipment has been ordered. The acceleration is driven by the need to build team expertise, add production capacity to meet growing demand, and utilize local grants and tax incentives sooner. The main factor in the acceleration timeline is hiring and training the new workforce.

Jeffrey Grampp of Alliance Global Partners asked for details on the SCOOP/STACK well performance relative to type curves, the expected production contribution from new Chaveroo wells in fiscal Q4, and the outlook for the full-year CapEx budget.

Answer

COO J. Bunch reported that SCOOP/STACK gas wells are performing approximately 10% above the company's type curve, while oil production is on target. He anticipates minimal production contribution from new Chaveroo wells in fiscal Q4. CFO Ryan Stash confirmed that CapEx spending will be weighted to the second half of the year and that the company remains comfortable with its initial full-year guidance.

Jeffrey Grampp of Alliance Global Partners asked for an outlook on the Middle East market, specifically the timeline for converting partnerships into orders and revenue. He also questioned the primary risks to achieving the company's goal of profitability by the end of calendar 2025.

Answer

CEO Philipp Stratmann expressed confidence in securing more bookings and revenue from the Middle East during calendar 2025. He cited the company's hot-weatherized vehicles, new solar-powered solutions, and strong local partnerships as key drivers. Regarding profitability risks, Stratmann identified the main challenge as carefully managing the pace of scaling operations and headcount to meet growing demand without compromising the company's cost-effective structure.

Jeffrey Grampp of Alliance Global Partners inquired about the primary drivers for the significant increase in the company's sales pipeline, the evolution of the sales team, the order volume for the quarter, and whether the current, lower operating expense level is sustainable.

Answer

CEO Philipp Stratmann attributed the pipeline growth to geopolitical demand for ocean security, increased U.S. government funding, and the commercial readiness of OPTT's systems. He noted the sales team has evolved to better serve government and marine tech sectors. Stratmann confirmed the company feels confident about its order guidance and stated that the major cost reductions in operating expenses are largely complete, establishing a new, sustainable baseline.

Jeffrey Grampp of Alliance Global Partners inquired about obtaining a more current backlog figure, the primary risks to achieving the fiscal 2025 contracted order target, and the potential for further reductions in operating expenses.

Answer

CEO Dr. Philipp Stratmann confirmed that while a specific updated backlog number would be provided next quarter, the company is comfortable with its targets based on the $5 million starting backlog. He identified converting conversations to purchase orders and maintaining high product quality for repeat business as key internal focuses. Dr. Stratmann also affirmed that operating expenses are expected to decrease further, driven by headcount optimization and tighter controls on third-party spending.

Jeffrey Grampp asked about the proportion of the capital budget allocated to exploratory or delineation wells in Q4 and whether successful tests would necessitate significant new infrastructure investments.

Answer

CEO Paul McKinney stated that while debt reduction remains the top priority, strong performance has allowed for four test wells in the quarter, representing a significant portion of Q4 capital. He indicated that as the balance sheet strengthens (leverage below 1.0x), more capital will be allocated to inventory growth. VP of Operations Shawn Young clarified that while most production facilities are proximal, successful new development would require some incremental investment in water supply and disposal infrastructure.

Jeffrey Grampp of Alliance Global Partners asked about the capital expenditure outlook, noting that implied spending per quarter in the second half of the year seems higher than the first half despite similar activity levels. He also inquired whether recent well cost reductions are temporary market effects or permanent internal efficiencies.

Answer

Paul McKinney, Chairman and CEO, explained that the second-half CapEx guidance includes some conservatism and allocates capital toward higher-risk organic growth projects and facility upgrades. Shawn Young, VP of Operations, added that a slight increase in planned wells for the fourth quarter also contributes to the higher figure. Regarding cost savings, both executives confirmed it is a mix of temporary market softness and sustainable internal efficiencies from faster and more effective drilling and completion performance.

Jeffrey Grampp inquired about Amplify's Beta development, asking for the number of proved undeveloped (PUD) locations de-risked by recent drilling, the strategy for balancing development between proven and step-out areas, and the cost drivers for the second well versus the first.

Answer

COO Daniel Furbee explained that the C-59 well proved up a significant, previously undeveloped southern portion of the Beta field, with specific location counts to be detailed later. Executive James Frew added that the company plans to add a 2025-2029 development program to its books. Regarding costs, CEO Martyn Willsher and COO Daniel Furbee clarified that the C-59 well cost more due to extra drilling days needed to manage pressure gradients and a tool failure, but they remain comfortable with the $5 million to $6 million per-well cost estimate, noting it was the first well drilled from the Eureka platform.

Jeffrey Grampp of Alliance Global Partners inquired about Amplify's Beta development program, asking about potential constraints to accelerating drilling in 2025, the repeatability of recent low well costs, and the strategic rationale for participating in new non-operated wells in East Texas.

Answer

CEO Martyn Willsher stated that the company will evaluate accelerating the drilling program in the second half of the year and has the flexibility to do so. COO Daniel Furbee noted that while the first well came in under budget, they need more data before lowering the overall cost guidance, though sub-$5 million wells are possible. Martyn Willsher also explained the East Texas participation is a low-risk way to gain firsthand knowledge of their prospective Haynesville acreage, with returns being attractive even at current projected gas prices.

Jeffrey Grampp of Alliance Global Partners inquired about the recent performance and future outlook for the newly acquired Buckshot logistics business, including the timeline for launching its brokerage services. He also asked for an update on the hot oiling business, specifically regarding market demand and pricing trends.

Answer

Executive Chairman Richard Murphy and CFO Mark Patterson detailed Buckshot's strong performance, citing over $9.5 million in trailing 12-month revenue and over $2 million in EBITDA. They explained that the brokerage business can be launched quickly and will tap into existing customer demand and new markets. On the second topic, Richard Murphy confirmed the hot oiling business remains robust with a stable monthly revenue run rate, and noted the company is pushing price increases rather than making concessions.

Jeffrey Grampp of Alliance Global Partners inquired about the performance and outlook for the newly acquired Buckshot logistics business, the timeline for establishing its brokerage operations, and the current market dynamics for Enservco's hot oiling services.

Answer

Executive Chairman Richard Murphy and CFO Mark Patterson detailed that Buckshot has a trailing twelve-month revenue of over $9.5 million and EBITDA exceeding $2 million. They highlighted significant growth potential through the imminent launch of a brokerage business, which can be established in 1-2 weeks, and by leveraging Enservco's existing customer base in new regions. Murphy confirmed the hot oiling business remains strong, with stable revenue and no pricing concessions, and noted synergies between the two businesses.

Jeffrey Grampp of Alliance Global Partners inquired about the performance and outlook for the recently acquired Buckshot Trucking logistics business, including the timeline for establishing a brokerage service. He also asked for an update on the market conditions, demand, and pricing for the company's hot oiling services.

Answer

Executive Chairman Richard Murphy and CFO Mark Patterson detailed that Buckshot has over $9.5 million in trailing twelve-month revenue and over $2 million in EBITDA. They highlighted significant growth opportunities through adding a brokerage business, which is 'at hand' and can be operational in weeks, and by leveraging Enservco's existing customer base in new regions. Regarding the hot oiling business, Murphy confirmed it remains strong with a monthly revenue run rate of $0.9M to $1.1M, is not facing pricing pressure, and is, in fact, pushing for price increases.

Jeffrey Grampp of Alliance Global Partners inquired about the performance and outlook for the newly acquired Buckshot Trucking logistics business, including the timeline for establishing a brokerage service. He also requested an update on the hot oiling segment, focusing on market demand and pricing trends.

Answer

Executive Chairman Richard Murphy and CFO Mark Patterson detailed Buckshot's strong historical performance, with trailing twelve-month revenue of approximately $9.5 million and over $2 million in EBITDA. They highlighted significant growth potential by adding a brokerage service, which could be operational within weeks, and expanding into new markets. Regarding the hot oiling business, Murphy confirmed it continues to perform well with a steady monthly revenue run rate of $900,000 to $1.1 million, and noted the company is successfully pushing for price increases without seeing any concessions.

Jeffrey Grampp of Alliance Global Partners inquired about the future performance of the Production Services segment, the drivers of its margin improvement, and the procedural next steps for the pending Buckshot acquisition, including the timeline for the shareholder vote and financing.

Answer

Executive Richard Murphy addressed the questions, stating that the Production Services segment should be viewed as a consistent $3 million quarterly revenue business, with recent weakness being temporary. He attributed margin improvements to price increases in Texas (80%) and higher-margin contributions from new Pennsylvania operations (20%). Regarding the Buckshot acquisition, Murphy detailed the plan for a shareholder vote by late June or early July to approve the $5 million transaction, expressing confidence in its passage and noting that financing efforts are already underway.

Inquired about the outlook for production volumes, specifically when the company might return to sequential growth after the expected decline in the second half of 2024, and asked for clarification on modeling the variable GP&T expenses.

Answer

The company is optimistic that volume growth could resume in 2025, driven by ongoing development activity, though this is dependent on commodity prices. GP&T expenses are variable and difficult to model precisely from the outside as they depend on the specific mix of cost-bearing and cost-free royalty wells that become productive in any given quarter.

Asked a capital allocation question about balancing dividend growth with funding acquisitions for business scaling. Also questioned the seemingly quiet acquisition activity during the rest of the quarter beyond the deals announced in August, seeking to reconcile it with optimistic commentary on deal flow.

Answer

The dividend increase was enabled by the completion of the company's transformation away from non-op working interests, which provides better cash flow visibility. They balance deploying capital to high-return acquisitions versus returning it to shareholders. Regarding deal flow, executives clarified they are active with numerous smaller, non-material deals in various stages, including some closed since quarter-end. They described the current M&A environment as better than the spring.