Apergy Corporation (NYSE:APY) Q3 2018 Earnings Conference Call - Final Transcript
Oct 31, 2018 • 09:30 am ET
Good morning and welcome to Apergy Corporation's Third Quarter 2018 Conference Call. Your host for this morning's call is David Skipper, VP and Treasurer at Apergy.
I'll now turn the call over to Mr. Skipper. You may begin.
Thank you, good morning, everyone. With me today are Soma Somasundaram, President and CEO of Apergy; and Jay Nutt, Senior Vice President and CFO of Apergy. Yesterday, Apergy released its results for the third quarter of 2018. If you have not received a copy, you can find that information on the Company's website at www.investors.apergy.com, including the slides referred to in today's call.
During today's call, Soma will discuss Apergy's third quarter highlights and strategy; Jay will then discuss our third quarter results in more detail and he will be referring to the slides posted on our website. He will then turn the call back to Soma to discuss our growth initiatives and market outlook. And then we will open the call for Q&A.
(Forward-Looking Cautionary Statements)
And in addition, our discussion today will include non-GAAP financial measures. For reconciliations of our non-GAAP financial measures to our GAAP results, please see yesterday's press release and our Form 8-K furnished to the Securities and Exchange Commission.
I will now turn the call over to Soma to discuss Apergy's third quarter results.
Thank you, David. Good morning, everyone. I'm pleased to report that we posted another solid quarter, and we are delivering strong results as a standalone publicly traded company. We executed well in the quarter and continued to achieve key milestones and made solid progress on our growth initiatives. From maintaining our technological molten polycrystalline diamond cutters to driving market share gains in ESP, to developing and delivering technology with impact with our digital products, Apergy is performing well. Our teams continue to remain focused on supporting our customers and delivering a differentiated performance.
Turning now to our financial results from the third quarter, revenues increased by $58 million, up 22% year-over-year. Our revenue growth was driven by solid results in both of our operating segments.Consolidated adjusted EBITDA increased by 34% 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 23% in the third quarter of 2017. Additionally, we paid down $20 million of debt in the quarter, which demonstrates our commitment to our capital allocation priority. Both of our segments performed very well in the third quarter.
In our Production & Automation technology segment, we posted strong growth, both in our artificial lift product line and our digital portfolio. All of our artificial lift product lines posted growth with ESP posting another strong growth performance. We continue to benefit from our full suite of artificial lift products which enables us to provide the right technology to our customers to efficiently produce at every stage of the wells' lifecycle. This capability helps us to produce revenues throughout the life of the wells.
Digital products recorded significant growth at 46% year-over-year,