Apergy Corporation (NYSE:APY) Q2 2018 Earnings Conference Call - Final Transcript

Jul 26, 2018 • 09:00 am ET

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Apergy Corporation (NYSE:APY) Q2 2018 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good morning and Welcome to Apergy Corporation's Second Quarter 2018 Conference Call. Your host for this morning's call is David Skipper, VP and Treasurer at Apergy. I will now turn the call over to Mr. Skipper, you may begin.

Executive
David Skipper

Thank you. Good morning, everyone. With me today are Soma Somasundaram, President and CEO of Apergy and Jay Nutt, SVP and CFO of Apergy. Yesterday, Apergy released its results for the second quarter of 2018. If you have not received a copy, you can find the information on the company's website at www.apergy.com, including the slides referred to in today's call.

During today's call, Soma will make some opening comments about the second quarter and briefly discuss Apergy's vision and operating philosophy. Jay will then discuss our second quarter results and outlook for the remainder of 2018. He will be referring to the slides posted on apergy.com.

Finally, Soma will provide an update on our growth initiatives, which we shared at our Investor Day earlier this year. We will then open up the call for questions. I want to remind listeners that the news release issued yesterday by Apergy, the company's prepared remarks on this conference call and the related question-and-answer session includes forward looking statements.

(Forward-Looking Cautionary Statements)

In addition, our discussions today will include non-GAAP financial measures, including adjusted EBITDA, adjusted EBITDA margin, adjusted segment EBITDA, adjusted segment EBITDA margin and adjusted net income. For reconciliations of our non-GAAP financial measures to our GAAP results, please see today's press release and our Form 8-K furnished to the Securities and Exchange Commission. I will now turn the call over to Soma.

Executive
Somasundaram

Thank you, David. Good morning, everyone. I would like to start by welcoming our shareholders, our analysts, our employees to our first Apergy Earnings Conference Call. Thank you for your interest in Apergy. We had a great quarter, we executed well in the quarter. We delivered solid results, achieved key milestones and made tremendous progress on our growth initiatives, which we shared with you at our Investor Day in April.

On May 9, we completed our separation from Dover Corporation. We are excited to begin our journey as Apergy. Our team did an exceptional job of successfully completing our separation from Dover while maintaining continued focus on our customers and generating strong results. We have continued to make progress on building out our corporate team. Our teams are now largely in place and gaining momentum operating as Apergy. I want to thank all of our employees and customers for their support through this transition.

Turning now to our financial results from the second quarter, revenues increased by $50 million or 19% year-over-year. Our revenue growth was driven by solid results in both of our operating segments. Consolidated adjusted EBITDA increased by 33% year-over-year, reflecting strong execution and operating performance in both of our segments. As a result, consolidated adjusted EBITDA margin increased to 25% from 22% in the second quarter of 2017. Cash from operating activities in the quarter was