KLX Energy Services Holdings, Inc. (KLXE) Earnings Call Transcript & Summary

Hello, and welcome to the Annual Meeting of Stockholders of KLX Energy Services Holdings, Inc. Please note that today's meeting is being recorded. We will have a question-and-answer session. You can submit questions or comments at any time by clicking on the message icon. It is now my pleasure to turn today's meeting over to Dag Skindlo, Chairman of KLX Energy Services Holdings, Inc. Mr. Skindlo, the floor is yours.

Good morning, ladies and gentlemen. It is now 9 a.m. and in accordance with the Notice of the Annual Meeting, I call the KLX Energy Services Holdings, Inc. 2024 Annual Meeting and Stockholders to order. I am Dag Skindlo, Chairman of the Board of Directors of the company. I will preside at today's meeting. And Max Bouthillette, our Executive Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary, will act as the Secretary of the Media. On behalf of the Board of Directors, I welcome you to the 2024 Annual Meeting. I would like to take a moment to introduce the other members of our Board of Directors and our other officers who are participating virtually in this meeting today. The other directors who are participating virtually in this meeting today are Chris Baker, John Collins, Gunnar Eliassen, Danielle Hunter, Tom McCaffrey, Corby Robertson Jr. and John Whates. The other senior officers and other advisers are participating virtually in this meeting today are Christopher Baker, President, Chief Executive Officer and Director; Keefer Lehner, Executive Vice President and Chief Financial Officer; Max Bouthillette, Executive Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary; Jeff Seiders, Computershare Limited. In addition, I would like to recognize Jim Traeger and Brice Schad, who are here as representatives of Deloitte & Touche LLP, our independent registered public accounting firm. I have appointed Jeff Seiders from Computershare Limited to act as the Inspector of the Election of the meeting. The inspector election has taken the oath of office, which I directed to be filed with the company's records. It is important that we have an orderly meeting. You have been provided with the opportunity to retrieve a copy of the agenda and a copy of the rules of conduct, each of which is available on the virtual meeting website. We will follow the agenda and rules of conduct in carrying out the business of this meeting. As you'll see on the agenda, time has been allotted later in the meeting for any questions you may have concerning the matters to be voted upon this morning. After we have determined whether a quorum is present. And while I present the matters to be voted upon in today's meeting, the polls of Proposal 1, the amendment to the amended and restated certificate of incorporation to declassify the Board will be open online for all stockholders who are attending the meeting online. Once voting on Proposal 1 has concluded, the polls for the remaining proposals will be opened online for all stockholders who are attending the meeting online. If you have not already voted, you may vote online at www.meetnowglobal\M7ZV9LD. You will need your control number to vote your shares during the meeting. Of course, if you have already voted, you need not vote again during the meeting. If you have not voted or if you would like to change your vote, you may do so online. After the formal part of the meeting has been adjourned, there will be a general question-and-answer session for questions for up to 15 minutes pertaining to the company. If any stockholders has any matter of individual concern, please call our Investor Relations department at (832)-518-4094. There are a few formalities to cover before we get into the business of this meeting. First, the Secretary of the meeting has provided me the following report on the record date, listing of stockholders, notice, quorum and matters to be considered at today's annual meeting. March 20, 2024, was set by resolution of the Board of Directors as the record date for today's annual meeting. All stockholders of record or their proxy holders at the close of business on March 20, 2024, are entitled to vote at the annual meeting. A listing of stockholders as of the record date has been available at the company's offices for the last 10 days by appointment with our Investor Relations department. Notice of this meeting was duly given in accordance with the company's bylaws and Delaware law. We received from affidavit from Computershare Limited certifying that the proxy materials, which included the notice of the annual meeting was first sent to stockholders on or about March 25, 2024. That affidavit will be filed with the company's record. The matters to be considered at this meeting are fully described in the company's proxy statement. Copies of the company's proxy statement are available on the company's website and on www.edocumentview.com/KLXE. The inspector of election has advised the company that based on the proxies received prior to the meeting, shares representing a majority of the voting power of the company's common stock as of the record date are present online or represented by proxies at this meeting. Accordingly, I determine that a quorum is present for the conduct of business at this meeting and the business of the meeting may proceed. Legal notice having been given, this meeting is now convened and open for the transaction of business. It is now 9:07 a.m. on May 9, 2024, and I now declare the polls for Proposal 1, open for voting, while I present the matters to be voted on during today's meeting. The items of business being submitted to stockholders for action at today's meeting are: one, the amendment to the amended and restated certificate of incorporation to declassify the Board; two, election of 2 directors, Tom McCaffrey and Corby Robertson, Jr., to serve as Class III directors until the 2027 Annual Meeting of Stockholders or to serve as directors until 2025 Annual Meeting of Stockholders, if Proposal 1 is approved and is filed and become effective and until their successors are duly elected and qualified, subject to their earlier resignation, removal or death; three, the compensation of the company's NEOs; four, the frequency of future advisory roles on the compensation of the company's NEOs; five, the amendment of the amended and restated certificate of incorporation to eliminate the supermajority voting requirements to amend the company's bylaws; sixth, the amendment to the amended and restated certificate of incorporation to eliminate the supermajority of auto requirements to amend the company's certificate of incorporation; and seven, the ratification of the selection of Deloitte & Touche LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2024. There are no other proposals to come before this meeting since management has not made any other proposals, and no other proposals were submitted by stockholders in the manner prescribed in the company's bylaws, which require that certain information concerning our stockholder proposals be provided to the company before the date of the meeting. As a reminder, if you have already submitted your proxy or voted via telephone or Internet, you do not need to vote today. Your shares will be voted in accordance with the direction you provided. If you have not yet submitted a proxy and wish to vote on these items or wish to revoke a proxy you have previously submitted, please do so now by following the instructions on the meeting website. We will begin with the first proposal, the amendment to the amended and restated certification of incorporation to declassify the Board. Please note that if the stockholders approve this proposal, we will break for 10 minutes to file the certificate of amendment to Delaware Secretary of State. Once filed, we will assume the meeting and then hold votes on the remaining proposals. We will now pause for 30 seconds to allow stockholders to vote on Proposal 1. Any votes cast today will be counted in the final tally along with the proxies previously received. [Voting]

This conclude the matters of Proposal 1 to be considered and voted upon at today's meeting. It is now 9:12 a.m. on May 9, 2024, and I know declare the polls for Proposal 1 closed. No additional ballots, proxies or votes and no changes or revocations will be accepted on this matter. The Inspector of our election will count the votes for Proposal 1. I have been advised by the Inspector of Election debt based on the preliminary tabulation of the votes, the amendment of the amended and restated certificate of incorporation to declassify the Board was not approved. The meeting is now resumed. It is now 9:12 a.m. on May 9, 2024, and I will now the clear polls are open for voting for the following proposals: the election of 2 directors: Thomas P. McCaffrey; and Corby J. Robertson, Jr., to serve as Class III directors until the 2027 Annual Meeting of Stockholders and until their successors are duly elected and qualified, subject to their earlier resignation removal of death. Three, to approve on an advisory nonbinding basis, the compensation of the company's NEOs. Four, to approve on a advisory nonbinding basis, the frequency of future advisory votes on the compensation of the company's NEOs. Five, the amendment to the amended and restated certificate of incorporation to eliminate the supermajority voting requirements to amend the company's bylaws. Sixth, the amendment to the amended and restated certificate of incorporation to eliminate the supermajority of or requirements to amend the company's certificate of incorporation. And seven, the ratification of the selection of Deloitte & Touche LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2024. We will now pause for 30 seconds to allow stockholders to vote on these proposals. Any votes cast today will be counted in the final tally along with the proxies previously received. [Voting]

I have been advised by Inspector of Election that based on the preliminary tabulation of the votes, Thomas P. McCaffrey and Corby J. Robertson, have been elected to serve as Class III directors until the 2027 Annual Meeting of Stockholders and until their successor are duly elected and qualified subject to their earlier resignation removal or death. The compensation of the company's NEOs has been approved. The frequency of future advisory votes on the compensation of the company's NEOs have been set at once every year. The amendment to the amended and restated certificate of incorporation to eliminate the supermajority voting requirements to amend the company's bylaws was not approved. The amendment to the amended and restated certificate of incorporation to eliminate the supermajority voting requirements to amend the company's certificate of incorporation was not approved, and the ratification of selection of Deloitte & Touche LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2024, has been approved. The final voting results will be tallied by the inspector of election and subsequently announced in accordance with the requirements of the Securities and Exchange Commission. I am aware of no other business that should be brought before this meeting. Now that the formal annual meeting is concluded, I declare this meeting adjourned. We will now be pleased to answer any questions or address any comments you may have about the company to the extent that they do not require us to disclose material nonpublic information. We have reserved 15 minutes for questions and comments. No questions have been submitted. This concludes our meeting. On behalf of the Board of Directors and employees of KLX Energy Services Holdings, Inc., I want to thank you for attending today.

This concludes the meeting. You may now disconnect.