Prompt:
Human: Today's remarks also include certain non-GAAP financial measures.
So with that said, let's turn to our fiscal 2022 second quarter results.
We are pleased with our financial performance for the quarter.
Visitation trends and demand for the experience at our resorts remains encouraging, particularly with destination guests, with results improving post holidays as conditions improved, more terrain was opened and the impact of the COVID-19 Omicron variant receded.
As expected, results for the quarter significantly outperformed the results from the prior year due to the greater impact of COVID-19 and related limitations and restrictions on results in the prior-year period.
The 2021/2022 North American ski season got off to a slow start.
The confluence of storm cycles, staffing challenges, and the spike in Omicron variant cases created challenges through the holiday period, impacting our resorts' ability to fully open terrain as planned and negatively impacting the guest experience during that time.
Despite numerous measures taken ahead of the season, including an investment in wages, available staffing was below targeted levels heading into the holidays, consistent with challenges faced by the broader travel and leisure industry at that time.
During the holidays, COVID-19 cases associated with the Omicron variant dramatically accelerated, impacting both travel plans and staffing exclusions despite having a vaccinated workforce.
At some resorts, more than 10% of our employees were unable to work due to COVID-19 at one time.
To address these challenges, the company increased hourly compensation during the holidays and for the remainder of the ski season at a cost of $20 million in fiscal 2022.
Following the holiday period, the experience across our resorts improved markedly with better snowfall, a stabilization and ultimately reduction in cases of COVID-19, and overall better staffing, allowing us to open terrain across our resorts that was close to normal levels for that time period.
ski resorts, which exceeded our expectations in January in particular.
Whistler Blackcomb was, as anticipated, disproportionately impacted by COVID-19-related travel restrictions, creating challenging results for U.S. destinations and international visitation to the resort.
Excluding the Seven Springs Resorts, total visitation for the quarter increased 2% compared to the second fiscal quarter of 2020.
Relative to the second fiscal quarter of 2020, our ancillary lines of business experienced revenue declines, particularly in food and beverage, which was disproportionately impacted by numerous operational restrictions associated with COVID-19 and overall staffing challenges.
Resort net revenue for the second fiscal quarter of 2022 decreased 2% relative to the comparable period in fiscal year 2020, primarily as a result of the headwinds in our ancillary lines of business and approximately $33 million of past revenue that would have been recognized in the second fiscal quarter of 2022, but was deferred to the third quarter as a result of delayed openings for a number of our resorts.
Our lodging business experienced strong results during the quarter, with average daily rates exceeding our expectations, partially offset by lower-than-expected occupancy rates during the early season.
Relative to the second fiscal quarter of 2020, resort reported EBITDA increased 5% despite the challenging early season conditions and COVID-19-related dynamics.
Resort reported EBITDA margin for the second quarter was 43.9%, an increase from 40.9% in the second quarter of fiscal 2020.
As Kirsten mentioned, we're pleased with our performance for the quarter, particularly given the slow start to the season.
Net income attributable to Vail Resorts was $223.4 million or $5.47 per diluted share for the second quarter of fiscal 2022, compared to net income attributable to Vail Resorts of $147.8 million or $3.62 per diluted share in the prior year.
Resort reported EBITDA was $397.9 million in the second fiscal quarter, which compares to resort reported EBITDA of $276.1 million in the same period in the prior year.
The increase was primarily due to the greater impact of COVID-19 and related limitations and restrictions on results in the prior year.
Resort reported EBITDA for the second quarter of fiscal year 2020 was $378.3 million.
Turning now to our season-to-date metrics for the period from the beginning of the ski season through Sunday, March 6, 2022, compared to each of the two prior-year periods through March 7, 2021, and March 8, 2020.
Given the significant impacts of COVID-19 in the prior-year period, including significant capacity restrictions that limited skier visits and ancillary revenue, we're also providing metrics relative to the comparable fiscal year 2020 season-to-date period, which was prior to our announcement to close our resorts on March 15, 2020, for the remainder of the 2019/2020 season.
The reported ski season metrics are for our North American destination mountain resorts and regional ski areas and exclude the results of our recently acquired Seven Springs resorts and our Australian ski areas in all periods.
The reported ski season metrics include growth for season pass revenue based on estimated fiscal year 2022 North American season pass revenue compared to both fiscal 2021 and fiscal 2020 North American season pass revenue.
The data mentioned in this release is interim period data and is subject to fiscal quarter-end review and adjustments.
We are pleased with the positive momentum we have seen throughout the post-Christmas period.
Season-to-date total skier visits were up 2.8% compared to the fiscal year 2020 season-to-date period.
Season-to-date total lift ticket revenue, including an allocated portion of season pass revenue for each applicable period, was up 10.3% compared to the fiscal year 2020 season-to-date period.
Compared to the fiscal year 2020 season-to-date period, season-to-date ski school revenue was down 8.9%, dining revenue was down 27% and retail rental for North American resort and ski area store locations was down 2.8%.
Company performance has continued to improve throughout the post-Christmas period, with particular strength in destination visitation and lift ticket sales.
Despite significant growth of our pass program this year, visitation for the season-to-date period was modestly up 2.8% compared to fiscal 2020, given the company's strategy to shift lift ticket guests into an advance commitment pass product.
Whistler Blackcomb was negatively impacted by COVID-19-related travel restrictions, creating challenging results for U.S. destination and international visitation to the resort.
The ancillary lines of business continued to experience revenue declines, particularly in food and beverage, which is disproportionately impacted by numerous operational restrictions associated with staffing and COVID-19.
It is important to highlight that our season pass unit growth of 47% for fiscal year 2022 created significant revenue stability in a period with challenging early season conditions and COVID-19 impacts.
The growth in pass units did not drive dramatic increases in visitation as the company is shifting lift ticket guests into advance commitment products.
In fact, the growth we saw in visitation in the period ending March 6, 2022, compared to fiscal 2020 occurred on weekdays and non-holiday periods, which were up approximately 9% in visits compared to weekend and holiday periods, which were approximately flat in visits.
We also saw peak daily visitation at our resorts during the period that were very consistent with prior -- with previous years.
For the season-to-date period ending March 6, 2022, 69% of our visits came from season pass holders, compared to 56% of visits for the same period in fiscal year 2020.
We remain committed to our strategy to move lift ticket purchasers into advance commitment products, which offers benefits to our guests and stability to our employees, our communities and our company.
Now turning to our outlook for fiscal 2022.
Despite the challenging start to the season through the holidays, we have increased the midpoint of our Resort reported EBITDA guidance as compared to our original guidance provided in September, demonstrating the resilience of our business model and the benefits of our advance commitment strategy.
The update to guidance is primarily driven by the strong demand from destination guests at our Western U.S. resorts, particularly with regard to lift ticket sales, which we expect will continue through the remainder of the season, as well as the contribution from the Seven Springs resorts.
Additionally, our lodging business is expected to significantly outperform our original expectations in the remainder of the year with strong results on both occupancy and ADR across our properties and the addition of the Seven Springs Resorts.
destination and international visitation trends at Whistler Blackcomb, the $20 million investment in frontline staff bonuses, increased wages for our summer operations, and the inclusion of an estimated $6 million in acquisition and integration-related expenses specific to the Seven Springs resorts.
We now expect net income attributable to Vail Resorts for fiscal 2022 to be between $304 million and $350 million, and resort reported EBITDA to be between $813 million and $837 million.
We estimate resort EBITDA margin for fiscal 2022 to be approximately 32.9% using the midpoint of the guidance range.
The updated outlook for fiscal year 2022 assumes normal conditions and operations across our resorts for the remainder of the ski season and no incremental travel or operating restrictions associated with COVID-19 that could negatively impact our results, including for our Australian resorts in the fourth quarter.
The guidance assumes an exchange rate of $0.79 between the Canadian dollar and U.S. dollar related to the operations of Whistler Blackcomb in Canada and an exchange rate of $0.72 between the Australian dollar and U.S. dollar related to the operations of Perisher, Falls Creek, and Hotham in Australia.
Our liquidity position remains strong.
Our total cash and revolver availability as of January 31, 2022, was approximately $2 billion, with $1.4 billion of cash on hand, $417 million of U.S. revolver availability under the Vail Holdings credit agreement, and $214 million of revolver availability under the Whistler Credit Agreement.
As of January 31, 2022, our net debt was 2.1 times trailing 12 months total reported EBITDA.
We are pleased to announce that our board of directors has declared a quarterly cash dividend on Vail Resorts common stock of $1.91 per share.
The dividend will be payable on April 14, 2022, to shareholders of record as of March 30, 2022.
We will continue to be disciplined stewards of our capital and remain committed to prioritizing investments in our guest and employee experience, high-return capacity expanding capital projects, strategic acquisition opportunities, and returning capital to our shareholders through our quarterly dividend and share repurchase programs.
As we turn our attention to the 2022/2023 ski season and beyond, the company will be making its largest ever investment in both its employees and its resorts to ensure we continue to deliver our company mission of an experience of a lifetime.
The experience of our employees and our guests is core to our business model, and the company intends to use its financial resources and stability it has created through its season pass program to continue to aggressively reinvest to deliver that experience.
We believe our business model allows us to make these investments and achieve our short- and long-term financial growth objectives.
Our employees are the core of Vail Resorts' mission of creating an experience of a lifetime.
We are pleased to announce a significant investment in our employees for the 2022/2023 North American ski season with an increase in the minimum hourly wage offered across all 37 of our North American resorts to USD 20 per hour for all U.S. employees and CAD 20 per hour for all Canadian employees, as well as an increase in wage rates for hourly employees, as we maintain all leadership and career stage differentials.
Roles that have specific experiences or certification as prerequisites, such as entry-level patrol, commercial drivers, and maintenance technicians, will start at $21 per hour.
Tipped employees will be guaranteed a minimum of $20 per hour.
The company will also be assessing targeted increases beyond inflation for our salaried employees.
And we'll be making a significant investment in our human resources department to ensure the right level of employee support, development, and recruiting.
Talent is our most important asset and our strategic priority at all levels of the company.
And we expect these investments will be an important step to enhance the experience for our employees through increased hiring, retention, and talent development.
Our employee investments are intended to help us achieve normal staffing levels and, in turn, deliver an outstanding guest experience, which supports our advanced commitment strategy and, in turn, provides greater stability to our business model and the ability to drive long-term growth.
The increase in wages and the return to normal staffing levels will represent an approximately $175 million increase in expected labor expense in fiscal 2023 compared to the fiscal 2022 expected labor expense, including inflationary adjustments.
We remain dedicated to delivering an exceptional guest experience and will continue to prioritize investments to enhance the experience at our resorts.
We are committed to continually increasing capacity through lift, terrain, and food and beverage expansion projects and are making a significant one-time incremental investment this year to accelerate that strategy.
As previously announced on September 23, 2021, we are excited to be proceeding with our ambitious capital investment plan for calendar year 2022 of approximately $315 million to $325 million across our resorts, excluding one-time investments related to integration activities, employee housing development projects and real estate-related projects.
The plan includes approximately $180 million for the installation of 21 new or replacement lifts across 14 of our resorts and a transformational lift served terrain expansion at Keystone.
In addition to the two brand-new lift configurations at Vail and Keystone, the replacement lift will collectively increase lift capacity at those lift locations by more than 45%.
All of the projects in the plan are subject to regulatory approvals and expected to be completed in time for the 2022/2023 North American winter season.
The core capital plan is approximately $150 million, above our typical annual capital plan, based on inflation and previous additions for acquisitions and includes approximately $20 million of incremental spending to complete the one-time capital plans associated with the Peak Resorts and Triple Peak acquisitions and $3 million for the addition of annual capital expenditures associated with the Seven Springs Resorts.
We continue to remain highly focused on developing and leveraging our data-driven approach to marketing and operating the business.
Our planned investments include networkwide scalable technology that will enhance our analytics, e-commerce, and guest engagement tools to improve our ability to target our guests, personalize messages and improve conversion.
We will also be investing in broader self-service capabilities to improve guests' online experience and engagement.
In addition, we have announced a $4 million capital investment plan in Vail Resorts Commitment to Zero initiative, which includes targeted investments in high-efficiency snowmaking, heating and cooling infrastructure, and lighting to further improve our energy efficiency and make meaningful progress toward our 2030 goal.
We plan to spend approximately $9 million on integration activities related to the recent acquired Seven Springs Resorts, including one-time investments related to integration activities and $3 million associated with real estate-related projects.
Our total capital plan is expected to be approximately $327 million to $337 million.
Including our calendar year 2022 capital plan, Vail Resorts will have invested over $2 billion in capital investments since launching the Epic Pass, increasing capacity, improving the guest experience, and creating an integrated resort network.
As we begin to plan for fiscal 2023, there are a number of dynamics related to COVID-19 and unusual weather that are negatively impacting fiscal 2022 and are important to highlight.
Travel trends at Whistler Blackcomb, our Australian resorts, and our group business were all materially negatively impacted by COVID-19 in fiscal 2022.
And early season results across our resorts this year were depressed with challenging snow falling conditions.
Returning to normalized levels would result in estimated incremental resort reported EBITDA of approximately $100 million in fiscal 2022.
The Seven Springs Resorts did not have a full year of operating results and were impacted by acquisition and integration-related expenses.
Full year results with no acquisition or integration-related expenses would result in estimated incremental resort reported EBITDA of approximately $7 million in fiscal 2022.
Finally, our ancillary businesses were capacity-constrained in fiscal 2022 by staffing and, in the case of dining, by operational restrictions associated with COVID-19.
Returning our ancillary business to normalized levels would result in estimated incremental resort reported EBITDA of approximately $75 million in fiscal 2022, which includes the incremental revenue and operating expense associated with normal capacity, but excludes incremental labor expense.
The normalized labor expense for the ancillary businesses is included in the approximate $175 million labor investment.
All of these estimates assume normal conditions throughout our ski seasons, continued strength in consumer demand, consistent economic dynamics relative to what exists today, and no material ongoing impacts from COVID-19.
Offsetting the estimated $182 million of expected favorable resort reported EBITDA impact from returning the business to normal levels relative to projected fiscal 2022 results is the approximate $175 million labor increase from fiscal 2022 to fiscal 2023 that is expected to be necessary to return the company to normal staffing levels, giving the shortages in fiscal 2022 and the current labor market dynamics in our resort communities.
These estimates do not take into account any fiscal 2023 projections for volume, price or expense growth, which will be evaluated and incorporated in our full year 2023 guidance that we plan to outline in September 2022.
I'll pass it back to Kirsten now.
We are fully committed to delivering an experience of a lifetime to our employees and our guests.
Our team is at the core of Vail Resorts' mission.
I am deeply grateful for the commitment demonstrated day in and day out.
And I'm excited about the path ahead as we make these important investments in our team and the guest experience.
 Assistant:

Chosen response:
q2 earnings per share $5.47.
now expecting resort reported ebitda to be between $813 million and $837 million for 2022.
for 2022/2023 north american ski season, company will be increasing its minimum wage to $20 per hour.
approved an increase in quarterly cash dividend to $1.91 per share.


Prompt:
Human: Participating on the call are Aaron Ravenscroft, president and chief executive officer; and Dave Antoniuk, executive vice president and chief financial officer.
However, actual results could differ materially from any implied or actual projections due to one or more of the factors, among others, described in the company's latest SEC filings.
2020 was an extremely challenging year.
At the onset of the COVID-19 pandemic, we identified three key priorities: one, ensure the health and safety of our team; two, maintain the strength of our balance sheet; and three, position the company for long-term growth.
I'm very proud of how the team managed through these unprecedented times and how well we executed on these three priorities.
First, with regards to safety.
We continue to see low incidence of COVID cases throughout our operations.
In addition, we achieved the lowest recordable injury rate in the history of the company.
The recordable rate was 1.34.
Secondly, we ended the year with a strong balance sheet.
We have $120 million of cash and over $400 million of liquidity.
And thirdly, we strengthened our foundation for future growth.
In the face of the pandemic, we continue to develop the future leaders of our organization.
During the year, approximately 200 frontline supervisors completed a 12-month leadership program that covered safety, leadership skills, and LEAN.
We also kicked off a mentoring program for our key female leaders, which has already resulted in a few promotions.
Our LEAN journey continued in 2020, with almost 900 entries in our global Manitowoc Way Lessons Learned Competition.
There were many deserving submissions, but our Wilhelmshaven, Germany facility took home the prize.
The team is in the middle of a multi-year initiative to improve production flow on the campus.
During 2020, the team developed a robotic measuring device that proved to be a major breakthrough in our boom assembly process and cleared the path for us to make further progress on several other elements of this initiative.
In addition, this year, we rolled out the Manitowoc Way CEO Award to recognize a team member who exemplified not just LEAN thinking, but LEAN action.
I would like to recognize Saleem Ahmed, test field supervisor in Wilhelmshaven.
Saleem self-engineered a systems-convert manual boom cable drum alignment on the test field to an electronic process during assembly.
This type of behavior embodies our values and culture within the Manitowoc Way business system.
Turning to the financials.
Our performance during the fourth quarter exceeded our expectations.
Taking a closer look, it's really a tale of two stories.
Our profitability for the fourth quarter was significantly better than our forecast primarily due to a favorable product mix.
We had higher-than-anticipated book and ship demand for our tower cranes in Europe.
This also has the added benefit of higher factory absorption in those related sites.
However, while our orders and backlog exceeded our forecast, they were heavily influenced by a couple of sizable crawler orders and favorable exchange rates.
In terms of our balance sheet, we reached our second-half target to reduce inventory by $80 million on a currency-neutral basis.
With that, I'll pass it to Dave to provide more color on the financial results and after which time I'll conclude with some comments on our outlook.
Let's move to Slide 4.
Our fourth-quarter orders totaled $509 million, an increase of 8% compared to $472 million of orders last year.
On a currency-neutral basis, Q4 orders were up $22 million or 5%.
As Aaron previously mentioned, the increase in orders was primarily driven by a couple of large crawler orders in the U.S.
Our 2020 ending backlog of $543 million was up 14% over the prior year and up 10% on a currency-neutral basis.
The increase in backlog was mainly due to the increased crawler crane orders and the timing of shipments in Q4.
Net sales in the fourth quarter of $430 million were in line with our expectations and decreased $33 million or 7% from a year ago.
A decline in the Americas segment was partly offset by stronger results in the EURAF and MEAP segments.
Net sales were favorably impacted by approximately 4% from changes in foreign currency exchange rates.
Our adjusted EBITDA for the fourth quarter was $34 million, an increase of approximately 11% year over year.
A favorable product mix, along with reduced discretionary spending, allowed us to exceed the prior year and our expectations for the quarter.
As a percentage of sales, adjusted EBITDA margin improved to 7.9%, an improvement of 120 basis points over the prior year.
During the fourth quarter, we incurred approximately $1 million of restructuring expenses predominantly related to severance costs in India and Europe.
Our GAAP diluted earnings per share in the quarter was $0.05.
On an adjusted basis, diluted earnings per share declined $0.16 from the prior year to $0.19 per diluted share.
Higher income tax expense due to our jurisdictional mix and the impact from net foreign currency losses were the main contributors to the year-over-year decrease in adjusted diluted earnings per share, partly offset by improved operating income.
We generated $36 million of cash from operating activities in the quarter.
On a currency-neutral basis, we achieved our inventory-reduction target of $80 million in the second half of the year.
Most of this improvement occurred in Q4, which was the main source of our cash flow generation in the quarter.
Year over year, our cash flow from operating activities declined due to the timing of collections on accounts receivable.
We ended the year with a cash balance of $129 million, a decline of approximately $70 million year over year.
However, our total liquidity remained strong at $412 million with no borrowings outstanding on our ABL.
Now, I'll recap the financial results for the full year.
Orders totaled roughly $1.5 billion, down $127 million or 8% from the prior year.
Foreign currency exchange rates benefited 2020 orders by approximately 1%.
Lower orders in the Americas and EURAF segments were partly offset by gains in the MEAP segment.
Our net sales for the year totaled approximately $1.4 billion, a 21% decrease from 2019, and were positively impacted by $12 million or 1% due to favorable changes in foreign currency exchange rates.
The year-over-year decrease was primarily attributable to entering the year with a lower shippable backlog, coupled with a reduction in demand related to the COVID-19 pandemic.
Our adjusted EBITDA declined $74 million or 47% from the prior year, resulting in a 19% decremental margin on nearly $400 million of less revenue.
This better-than-expected flow through result is a testament to the efforts of our team members throughout the world during these unprecedented times.
We were able to limit our discretionary spending while continuing to invest in our new product development and growth strategies.
Congratulations to the team for a job well done.
Our full-year 2020 adjusted net loss was $12 million, compared to net income of $67 million in 2019.
Adjusted diluted net loss per share of $0.35 was impacted by approximately $0.01 from our first-quarter share repurchases.
As mentioned previously, we suspended our share repurchase program during Q1, and we do not anticipate repurchasing additional shares in 2021.
Full-year cash flows from operating activities were a use of $35 million, primarily driven by the timing of accounts receivable collections and the net loss recorded in the year.
As I previously mentioned, we ended the year with ample liquidity and a strong balance sheet.
Let's please move to Slide 5.
Turning our focus to 2021, I see this as a year of transition, one step forward, one step back.
Overall, while we believe that we are beyond the economic trough brought on by the COVID-19 pandemic, we expect the recovery to be choppy.
The recently enacted stimulus packages by many countries and the rollout of the COVID-19 vaccines are all favorable developments.
However, there is still a long way to go to get back to normal.
And unfortunately, some of these actions will have unintended consequences.
First and foremost, while economic stimulus packages are essential to the recovery, fiscal spending has a tendency to create inflation, and we are already seeing this in steel pricing.
Moreover, the heavy debt burden that this has created in the United States has resulted in a weaker dollar.
Given the speed at which both these variables are changing, I am concerned that we will see a dislocation in the market, which will create a short-term cost challenge for us.
Secondly, Manitowoc benefited from substantial cost containment actions during 2020 that will not repeat in 2021.
Between our discretionary spending restrictions, bonus program costs, social claim benefits, and increases in insurance costs, we will easily see more than a $15 million cost headwind.
Thirdly, with the increase in crawlers, our mix is shifting toward lower-margin products, and we continue to suffer from low-production levels at our German factory, where we manufacture all-terrain cranes.
Please move to Slide 6.
We continue to invest in our future.
We have earmarked $15 million of capex to further expand our European tower crane rental fleet in 2021.
We continue to scale up our Chinese tower crane business that serves the Belt and Road regions.
We are accelerating our product development programs and our all-terrain product line, which we will showcase at Bauma in 2022.
And we continue to pursue acquisitions.
These growth initiatives require more investment than we've made over the last couple of years, but we are confident that these strategic initiatives will fuel our future growth as the crane industry rebounds.
In closing, the current economic environment is extremely dynamic in terms of demand and costs.
And therefore, we will not provide specific financial guidance for 2021.
Directionally, we believe that our revenue will be up modestly, but there are some clear indicators that we will see margin pressure from cost headwinds and product mix while we are investing in the future.
2021 will be a year of transition.
 Assistant:

Chosen response:
q4 adjusted earnings per share $0.19.
q4 earnings per share $0.05.


Prompt:
Human: I'm Monica Vinay, Vice President of Investor Relations and Treasurer at Myers Industries.
If you've not yet received a copy of the release, you can access it on our website at www.
myersindustries.com, it's under the Investor Relations tab.
These comments are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Such statements are based on management's current expectations and involve risks uncertainties and other factors, which may cause results to differ materially from those expressed or implied in these statements.
Further information concerning these risks, uncertainties and other factors is set forth in the company's periodic SEC filings and may be found in the company's 10-K and 10-Q filings.
We continued our growth trajectory during the quarter, and we made further progress on our long-term strategy despite a difficult macro environment that's impacting many businesses around the world.
During the quarter, we saw continued strong demand from our material handling and distribution customers.
This demand, combined with meaningful contributions from our recent acquisitions, drove the company to $200 million in net sales and more than 50% revenue growth for a second consecutive quarter.
The company's top line was the strongest it has been in many years.
On organic basis, sales grew 20% compared to the prior year period which marks three consecutive quarters of 20% or more organic growth.
We are beginning to see the benefit of our investments in our sales force and sales training and an improved commercial focus across the company.
While our top line performance was strong, we did see macroeconomic headwinds again this quarter, which impacted our margins.
Input costs climbed higher due to increasing raw material costs, and tightness in the labor market impacted labor costs, both of these drove margin compression during the period.
The negative impacts of labor were due to overtime pay, higher wages and in some cases, the lack of labor, which inhibited us from making or shipping certain orders.
While we believe inflationary labor and supply chain headwinds will likely persist for the next several quarters, we are taking numerous actions to mitigate possible impacts on our business.
These proactive steps include improvements in our sales and operations planning process, a reinvigorated sales force and the addition of a pricing excellence leader and team.
We're also working hard to debottleneck and automate our plants, while we continue to secure the raw materials necessary to ensure that we meet the volume needs of our customers.
We remain confident in our ability to manage price, volume and cost.
And as such, we are reaffirming our previous 2021 adjusted earnings per share guidance of $0.90 to $1.05 per share.
Myers demonstrated growth is meaningful.
Our company is becoming a growth story.
A new Myers is here.
We're pleased with the growth to date, and we expect this new growth mindset to be a sustained theme and focus at Myers Industries.
In the short term, however, we continue to see an inflationary environment that is compounded by labor shortages and supply chain issues.
To manage through it, we made a few near-term supply oriented decisions that consume cash in the third quarter.
These decisions were made to ensure we continue our high service level to our customers, and we expect cash flow trends to normalize in the fourth quarter.
Let's begin with a review of our third quarter financial results on Slide four.
Net sales were up $68 million, an increase of 51%.
Excluding the impact of the Elkhart and Trilogy acquisitions, organic net sales increased 20% driven by price, which contributed 13%.
Higher volume mix contributed 7%.
Sales increased in all key end markets in both Materials Handling and Distribution segments.
Adjusted gross profit increased $7.2 million, while gross margin decreased from 35.6% in the prior year to 27.2% in the third quarter.
Gross margin was negatively impacted by higher raw material costs and higher labor costs which were not fully offset by pricing actions, has led to an unfavorable price-to-cost relationship.
Included in cost of sales was a $1.6 million increase related to the LIFO inventory reserve.
Adjusted operating income decreased $3.1 million to $12.5 million due to increased SG&A, driven by the addition of Elkhart and Trilogy along with higher compensation cost and higher professional fees.
Adjusted SG&A as a percentage of sales decreased to 20.9% in the third quarter compared to 23.8% in the prior year as we are experiencing the benefits of our overall larger scale on our infrastructure.
We're pleased with the investments we are making in support of our One Myers work strategy are yielding positive results.
Adjusted EBITDA was $17.3 million, a decrease of $2.3 million compared to the prior year.
Adjusted EBITDA margin was 8.6%.
And lastly, adjusted earnings per share was $0.23, a decrease of $0.07 or 23% compared to the prior year.
Turning now to Slide five for an overview of segment performance for the quarter.
Beginning with Material Handling, net sales increased $63 million or 73%, including the Elkhart and Trilogy acquisition.
On an organic basis, Material Handling net sales increased 26%, driven by favorable price of 18%.
Strong volume mix contributed another 7% and FX, 1%.
Organic net sales increased in the vehicle, industrial and food and beverage end markets.
You may recall that our consumer end market was up significantly last year, driven by increased storm activity, which led to higher demand for our fuel containers.
Material Handling adjusted operating income decreased $1.3 million or 8% to $15.2 million.
The decrease was driven by an unfavorable price-to-cost relationship resulting from escalating raw materials and labor costs, which were not fully offset by pricing actions.
Additionally, SG&A expenses increased primarily due to the Elkhart and Trilogy acquisition, higher compensation costs, travel costs and professional fees.
In the Distribution segment, sales increased $5 million or 11%.
Volume mix contributed 6%, resulting from increases across both equipment and supplies and price contributed 5%.
Distribution's adjusted operating income decreased $700,000 to $4.4 million due to an increase in SG&A expenses, which were more than offset higher volume mix and favorable price-to-cost relationship.
Turning to Slide six.
Working capital timing negatively impacted our cash flow for the quarter.
Free cash flow was negative $13.8 million compared with positive free cash flow of $16.2 million for the third quarter of 2020.
Cash from operations decreased in the quarter due to increases in working capital, driven by a $14 million and an $8 million increase in accounts receivable and inventory, respectively, combined with a $3 million decrease in trade accounts payable.
Additionally, capital expenditures were $6 million in the quarter.
Sales were more weighted in the back half of the quarter, contributing to the elevated accounts receivable balance.
In addition to higher raw material costs, our focus on meeting our customers' needs also contributed to higher inventory levels.
Year-to-date free cash flow was essentially flat, down $700,000.
Cash on hand at quarter end was $15 million.
We expect working capital to turn favorable in the fourth quarter.
Overall, our balance sheet remains strong and gives us the flexibility needed to execute on our long-term growth strategy.
As a reminder, on July 30, we utilized our revolving credit facility to finance the Trilogy Plastics acquisition.
We ended the third quarter with leverage at 1.8 times.
On Slide seven, turning to our outlook for fiscal year 2021.
We anticipate net sales to increase in the mid- to high 40% range attributed to both organic growth and acquisitions.
Our previous sales guidance was in the mid-40% range.
A little more than half of the growth for the year is expected to come from the Elkhart and Trilogy acquisition.
Elkhart's annual net sales at the time of acquisition were approximately $100 million and Trilogy's annual net sales were roughly $35 million.
While rising input costs and labor pressures continue to impact our profit growth and margins during the third quarter, we are seeing signs of resin cost easing and are cautiously optimistic it will begin to decline as we move through the fourth quarter.
This, combined with additional pricing actions affected in the fourth quarter should result in a favorable price-to-cost relationship for the quarter.
Taking these considerations into account, we are reaffirming our 2021 outlook for adjusted earnings per share of $0.90 to $1.05 per share.
Our guidance reflects a weighted average share count of 36.5 million shares and the addition of the newly acquired Trilogy business.
As a reminder, Trilogy is expected to be only slightly accretive to earnings per share in the current fiscal year.
Our key modeling assumptions include depreciation and amortization expenses of approximately $22 million and capex of approximately $16 million to $19 million, up slightly from our previous capex guidance of $15 million to $18 million.
capex is expected to trend higher than past years with our renewed focus of investing in our facilities and improving our capacity along with the addition of Elkhart and Trilogy.
The effective tax rate is forecast to approximate 26%.
In closing, while the short term continues to be impacted by macroeconomic factors, our fundamentals remain intact.
We are extremely pleased with the demand for our portfolio of products along with our ability to pass along the value proposition they bring through pricing actions.
We are making solid progress on our One Myers initiative, which Mike will share with you momentarily.
Starting on Slide eight.
It's been a little more than a year since I first introduced our long-term road map and broader One Myers strategy.
I'm very proud of the considerable progress we've made to date.
I have a lot of passion for this company, our company, I see the upside and the opportunity every day.
We're currently well into the middle innings on Horizon one of our transformation.
As a company, we are aligned and centered on our true north, our mission, which is to transform our Material Handling segment into a high-growth business as the true innovator of engineered plastic solutions while we also continue to grow and optimize our Distribution segment.
As I outlined in the past, Horizon one is built on driving self-help initiatives to improve profitability and then using these proceeds to fund organic growth through sales and commercial excellence and bolt-on programmatic M&A.
We've made meaningful progress across each of these areas.
As we continue to execute the remainder of Horizon 1, we'll have the necessary foundation, knowledge and track record to move into Horizon two.
We will continue with the self-help and organic growth efforts, but will use the enterprise level M&A to create shareholder value.
After the completion of Horizon two, we will transition into Horizon three, where we approach M&A on more of a global scale.
Our One Myers vision and the associated transformation of our business is rooted in our ultimate goal of maximizing long-term value creation for our shareholders, we believe, will be achieved as we execute on this plan.
Slide nine covers the four strategic pillars that support our One Myers vision.
My approach is to be consistent, almost broadly consistent on the pillars and on the levers and the areas of focus we're using to drive our transformation.
Because they are the bedrock, the foundation of our transformation, we must maintain consistency in our approach in order to provide direction to our people and ensure execution success.
These pillars and work tracks are straightforward and not terribly complicated.
Our success comes from our relentless and dogged pursuit of their execution.
Since I've covered these pillars extensively in the past, I'll move on to Slide 10 to update you on the progress we've made across each of these as it relates to our first horizon.
We've displayed an outstanding growth -- organic growth trajectory over the last several quarters and believe we are taking the right action to help sustain this momentum.
We are building a world-class commercial organization at Myers through the continued addition of strong talent at the middle level and the new and rejuvenated marketing, product management and sales structure we put in place.
We've also invested in sales training and improving our sales processes to drive organic growth, customer intimacy and pricing to value not to cost.
Additionally, our investments in e-commerce continue to take flight.
E-commerce is showing encouraging results with year-to-date sales up approximately 30%.
We've learned to use e-commerce as a flywheel for volume and have found that it is an excellent channel.
We're able to accept or decline business that helps us best optimize our assets capabilities.
This flywheel approach will become more impactful as we get better at S&OP and improve how we balance our growing demand across our facilities.
Moving on to M&A.
Growth via acquisition is and will continue to be an integral part of our One Myers strategy.
We closed on our acquisition of Trilogy Plastics earlier this quarter and are very excited about its prospects.
Trilogy enhances our ability to manufacture highly engineered and tight tolerance specialty products.
We're already taking some of the learnings and best practices from Trilogy into our plants that were legacy Ameri-Kart or Elkhart Plastics.
So far, three months in, the integration of Trilogy is going well and is right in line with our expectations.
As a reminder, the integration of Elkhart has also gone well, helping us better serve our customers and capture growth synergies and $4 million to $6 million of cost synergies, both of which exceed expectations.
From a big picture perspective, through our two acquisitions over the last year, we are making progress on developing an effective framework for selecting high-quality companies that complement our businesses.
And as equally important, we're on our way to developing a strong, repeatable playbook and processes to ensure a successful integration of these acquired companies.
We have lost connection with our speakers.
We will be with you in just a second.
We now have the team back on the line.
I will hand back over to Mike McGaugh.
Sorry about that, folks.
And I'm not exactly sure where it dropped, but I'll pick up around e-commerce.
So that's a great place, a great thing.
So additionally, our investments in e-commerce continue to take flight.
E-commerce is showing encouraging results with year-to-date sales up approximately 30%.
We've learned to use e-commerce as a flywheel for volume and found that it's an excellent channel.
We're able to accept to define business that helps us best optimize our asset capabilities.
This flywheel approach will become more impactful as we get better at S&OP and improve how we balance our growing demand across our facilities.
Moving on to M&A.
Growth via acquisition is and will continue to be an integral part of our One Myers strategy.
We closed on our acquisition of Trilogy Plastics earlier this quarter and are very excited about its prospects.
Trilogy enhances our ability to manufacture highly engineered and tight tolerance specialty products.
We're already taking some of the learnings and best practices from Trilogy into our plants that were legacy Ameri-Kart or Elkhart Plastics.
So far, three months in, the integration of Trilogy is going well and is right in line with our expectations.
And as a reminder, the integration of Elkhart has also gone well, helping us better serve our customers and capture growth synergies and $4 million to $6 million of cost synergies, both of which exceeded our expectations.
From a big picture perspective, through our two acquisitions over the last year, we're making progress on developing an effective framework for selecting high-quality companies.
They complement our business and is equally important, we are on our way to developing a strong repeatable playbook and processes to ensure integration -- successful integration of these acquired companies.
The plastics molding industry is quite fragmented, and we believe that acquiring specific technologies, niches and best practices is a highly effective way to create value for all of our stakeholder groups.
We focus on acquiring founder-owned companies with similar cultures and values to Myers and we worked with the management teams to invest and grow these businesses through improved processes, additional capital investment, retaining and incentivizing key people and collaborating and optimizing across all of our facilities.
Paying a fair price, not overpaying, for these acquisitions is also an important part of the equation.
Our M&A strategy has proven to be successful so far, and we will continue to fine-tune it as we believe it will serve us well through the remainder of Horizon one as we pursue large acquisitions in Horizon two and three.
Moving on to operational excellence.
This is an area that's been crucial during the last few quarters where we were faced with multiple supply chain headaches.
Our purchasing and supply chain teams have done a great job in securing raw materials and managing our supply chain so that we are able to consistently deliver for our customers during the quarter.
On a relative basis to our competitors, our service levels remain high.
This creates value for our customers.
We believe this focus on partnering with our customers on service delivery and on a fair approach to pricing will pay dividends over the medium and long term.
I'd like to speak about our ability to manufacture and get product out the door.
As I mentioned earlier, we've pursued new approaches to staffing and providing labor to our plants and are encouraged by our results.
We are providing a safe and well-paying environment for our workers and have been able to source some workers from agriculture markets and second chance work programs.
This strategy was key to enabling our third quarter growth.
In addition to getting more creative with our approach to labor, we're also investing in automating select operations within our facilities.
We have several engineering teams driving automation across Myers, sharing best practices, and we're investing capex in the space and continue to do so, likely at an accelerated pace as we not see the issue of labor or lack of it going away.
An important part of operational excellence is pricing excellence.
And we've hired and installed a small but effective team that has led the space at other chemical and plastics companies and instituting this capability at Myers.
The team is accelerating our focus on value capture through pricing.
We announced additional price increases in September and October and have begun implementing value-based pricing rather than cost-plus pricing.
This is a change in approach, and it will take some time to implement, but it's an important lever to deliver value for our stakeholder groups.
Now I'll turn to our fourth pillar before giving my closing remarks.
Our high-performance culture is a key enabler of our long-term success.
Having a true north, having alignment on our values and our mission is critical for Myers to be successful.
We are well on our way on this journey.
We're seeing meaningful traction with our recently launched learning management system, which allows employees to take online classes to help develop their capabilities and skills within the company.
Our desire is to develop our employees and promote from within.
Doing this inspires loyalty, improves our company's performance, improves our stability and continuity of our employee base, and it also decreases cost.
We continue to invest in and build this tool, and we believe it will help us in the for talent.
An important part of our culture and value is based on servant leadership.
I believe on this approach, and I'm committed to instilling it at Myers.
The deployment of our certain leadership training is underway and 50 of our leaders have already completed this training and are applying it in their work lives.
We have an additional 50 going through the program in early 2022.
One final point is our mindset on inclusion.
At our senior manager levels and above, we've increased our hiring and promotion of female minority candidates as a percent of total hirings by more than 100% versus past years.
While we're not done yet, we're making progress.
I'd like to close by letting you know that last week, our management and our Board of Directors held a multi-day retreat to review our strategy in our short-, medium- and long-term goals and objectives.
The alignment and collaboration are remarkable and helpful.
We're putting the people and the processes in place to drive the company's transformation.
We have people in the right roles who know what to do, have done it many times before and are willing to work hard and get their hands dirty to deliver results.
We have a clear and straightforward road map to create meaningful shareholder value, and we have the team and the processes to deliver.
We'll navigate the short-term inflationary and supply chain bumps while we remain calm, disciplined and focused on the longer term.
I'm excited for our future, and I appreciate your interest in our company.
 Assistant:

Chosen response:
q3 adjusted earnings per share $0.23.
updated fy21 net sales growth in mid-to-high 40% range.
sees fy21 adjusted earnings per share in the range of $0.90 to $1.05.


Prompt:
Human: Today, we will follow our customary format with Tony Petrello, our chairman, president, and chief executive officer; and William Restrepo, our chief financial officer, providing their perspectives on the quarter's results along with insights into our markets and how we expect Nabors to perform in these markets.
Also during the call, we may discuss certain non-GAAP financial measures, such as net debt, adjusted operating income, adjusted EBITDA, and free cash flow.
We have posted to the Investor Relations section of our website a reconciliation of these non-GAAP financial measures to the most recently comparable GAAP measures.
Before I begin, I would like to express our thoughts and concern for the members of our community who were affected by the severe weather and the related power and water outages.
Our rig operations in Texas were essentially unaffected.
Turning to our results, I will begin with overview comments.
Then I will follow with a discussion of the markets and highlights from the quarter.
William will discuss our financial results.
First of all, as we close the books on 2020, I want to recognize the entire Nabors team for its outstanding performance in these extraordinary circumstances.
Our company's staff confronted the impacts of COVID and the depressed drilling market head on with perseverance and ingenuity.
Those efforts across all of our segments and functional areas reinforced our leadership in our markets.
At the same time, we managed to improve our financial strength.
We are emerging from the pandemic as a stronger company.
Nabors is well-positioned to capitalize on the upturn.
Our financial discipline paid off in 2020.
For the full year, we reduced overhead spending by 24%.
This effort began in the second quarter.
Our run rate in the fourth quarter represents nearly 27% drop over the 2019 quarterly average.
We also made further progress on our twin priorities, namely: generate free cash flow and reduce net debt.
We began the year at just under $2.9 billion in net debt.
We delevered by nearly $400 million, fueled, in part, by free cash flow generation of $184 million.
We ended 2020 with net debt less than $2.5 billion.
We achieved this in the face of very difficult market conditions.
Our results demonstrate the earnings power and resiliency of our unique portfolio of premium assets with geographical diversification.
Notwithstanding the most adverse industry and macro conditions in decades, we maintained our position as the preferred drilling contractor and reset our cost structure.
Our operational strength has supported our financial performance.
Outside of North America, we remain the largest and most profitable land drilling contractor.
And in the Lower 48, we continue to deliver the highest daily gross margins among our peers.
Based on the strength of our performance drilling offerings and our digital infrastructure, we increased the penetration of innovative drilling contracts.
These contracts generate incremental margin based on value sharing.
In the fourth quarter, the combined gross margin from our Lower 48 drilling rigs and our U.S.
Drilling solutions significantly exceeded those of our peers.
Our investments in performance, technology, safety, and, importantly, human capital and sustainability, are driving this success.
We are positioned well for continued growth.
I am looking forward to reporting further progress in 2021.
Next, I would like to spend a few moments on the macro environment.
After briefly testing the upper 30s in late October, the price of near-month WTI increased by 35% through the end of the year.
Since the beginning of 2021, the price has risen further.
Recently, WTI was trading above $61.
Brent, which is also important to our global client base, made a similar move.
It was recently priced above $64.
Global oil demand continued to recover in the fourth quarter.
The EIA reports consumption increased by more than 2% versus the third quarter.
In part, this contributed to a global inventory draw of over 200 million barrels.
In early January, the OPEC+ group agreed to keep its production essentially flat.
That announcement was followed almost immediately by Saudi Arabia's reported reduction in output.
The resulting higher prices, which I detailed earlier, are generally supportive of increased oilfield activity across all markets.
Comparing the fourth quarter and third-quarter averages, the Baker Hughes Lower 48 land rig count increased by 23%.
Our own working rig count increased by a similar percentage as we added rigs with several customers.
These additions more than offset the reduction of our rigs stacked on rate.
From the beginning of the fourth quarter through the end, the Anvers Lower 48 rig count increased by nearly 30%.
The growth rate among larger clients was approximately equal to the growth in the smaller operators.
It should be noted that more than half of the increase among the larger operators was driven by a single client, and most of that client's increase was the reactivation of just one drilling contractors rigs, which were stacked on rate.
Once again, we surveyed the largest Lower 48 clients.
This group accounts for approximately 35% of the working rig count.
Our review of these clients shows a modest pickup in activity planned for the balance of 2021.
It is the smaller and medium-sized operators which appear more responsive to the recent strength in commodity prices.
In our international markets, we have recently started to see demand increase in selective geographies as measured by the number of active rigs.
This trend extends across major markets in Latin America and in Saudi Arabia.
To summarize our view of the markets, global oil demand continues to rebound from the pandemic low.
Oil inventories, which expanded considerably in early 2020, are dropping.
The resulting increase in commodity prices has improved operator economics.
We see the response in the recent growth in rig count.
Overall, assuming the worst of the pandemic is behind us, the market environment is poised to support higher levels of activity.
Now, I will comment on our fourth-quarter results.
Total adjusted EBITDA was $108 million in the quarter.
These results reflect activity, which was somewhat better than anticipated.
Our Lower 48 operation and our International and Drilling Solutions segments exceeded our expectations.
With this adjusted EBITDA performance, we generated approximately $66 million in free cash flow after funding $41 million in capital spending.
Our global rig count for the fourth quarter was essentially stable at 131 rigs.
Growth in the Lower 48 in Canada largely offset the decline in international.
In our Lower 48 business, our reported daily rig margin of $9,541 exceeded our guidance and remained in line with the third quarter.
For the International segment, adjusted EBITDA for the quarter was higher than our expectations.
Daily margin outperformed, driven mainly by strong operational performance in Saudi Arabia and by revenue from early terminations.
These items more than offset the decline in rig count.
Our industry-leading fleet capabilities, outstanding operational and safety performance, and expense and capex discipline all drove this accomplishment.
Next, I would like to mention some specific highlights for the quarter.
During the fourth quarter, we completed a series of debt exchange transactions.
In the aggregate, these reduced our outstanding debt obligations by $284 million.
Adjusted EBITDA in our Drilling Solutions segment increased sequentially by 44%.
The adjusted EBITDA margin in NDS widened to 32% in the fourth quarter.
This compares very favorably to 24% margins in the prior quarter.
In NDS, we increased the penetration of our RigCLOUD platform for digital operations.
In the fourth quarter, RigCLOUD was running on nearly all of our working rigs in the Lower 48.
We are now in the early stage of growing on third-party rigs.
We saw continued growth in our SmartSLIDE and SmartNAV apps.
SmartSLIDE is our directional steering control system, which automates slide drilling.
SmartNAV is our automated directional guidance system.
Our cumulative footage growth for these apps working together increased by 11% in the fourth quarter.
Our cumulative well count was up by 12%.
Our portfolio of automation applications in NDS is second to none in terms of capabilities.
We developed these products around our SmartROS or rig operating system.
SmartROS was conceived from the ground up to collaborate with customer workflows while optimizing rig operations.
We believe we now have the broadest, most advanced, and most profitable automation solutions in the market today.
Our focus on ESG is increasingly reflected in our ISS ESG quality scores.
In the fourth quarter, our ISS environmental score improved significantly, and the ISS social score improved again.
We continue to reinforce our commitment to ESG, and I look forward to reporting on that progress.
More recently, Nabors has signed on to the science-based targets initiative.
We have committed to setting Science-based GHG emissions targets.
We are the only land drilling contractor to do so.
The use of alternative power on our rigs is an excellent illustration of our efforts in ESG.
I will cover this topic in more detail in a few moments.
In addition to these highlights, I would like to discuss one of our smart apps in particular.
Back in the second quarter of 2020, we released an improved version of SmartDRILL, our automated drilling software.
SmartDRILL digitizes an operators' well plan with optimal task sequences as defined with the operator.
Essentially, it executes virtually every task that the driller performs from the chair, and it compiles automated sequences of those tasks.
It is the only automated drilling solution in the market that enables ad hoc changes to the sequence.
By digitizing best practices, SmartDRILL improves consistency and reduces the potential for human error.
For example, we are able to minimize the risk of damage and reduce loss time.
Tangible benefits of SmartDRILL include an increase in single run laterals, a decrease in unplanned trips, and improved and consistent connection times.
We are excited about SmartDRILL.
Our pricing models for this app reflect the measurable value that it generates for customers.
I look forward to reporting on its progress and on other apps in our portfolio in the future.
I will also make some comments on Nabors's positioning in the energy transition.
Our plan as we embark on the transition consist of two parallel tracks.
Most immediately, we are examining alternatives to improve Nabors's own carbon footprint.
We actually started down this track several years ago when we introduced the fuel tool.
Fuel tool is a system that monitors and optimizes rig engine usage.
It was targeted to reduce fuel consumption.
Now, we are evaluating technologies aimed at carbon capture, emissions minimization, and power management.
We have an inventory of 40 dual fuel packages to satisfy market needs in the Lower 48.
Approximately 15% of our operating rigs in the Lower 48 are currently running on either high-line power or bi-fuel.
In addition, we have introduced our advanced energy management system on one of our rigs.
This system yields a significant improvement in the rig's carbon footprint.
We are also running 12 rigs in Canada with bi-fuel capability.
Globally, I expect the use of these technologies to increase in the future.
The parallel track includes opportunities which are relevant beyond our rig fleet.
These prospects could include other drillers' rigs or scale beyond the traditional markets in the oil field.
Our energy transition initiatives are still in the early stages.
We expect to make tangible progress going forward.
I look forward to reporting further on this area.
Before turning the call over to William, I will discuss our view of the market in some more detail.
The Lower 48 industry has added 151 rigs or 67% since its low in August.
Looking forward, we see the current commodity price environment supporting increased activity as the year progresses.
We expect our own rig count to increase each quarter throughout the year.
We are also starting to see some modest improvements in spot-day rates.
In our international markets, since the third quarter, we have seen our own activity increase further in Latin America.
Our working rig count in the region rose more than 50% during the quarter.
Accordingly, versus the fourth quarter of 2019, pre-pandemic, we have gained significant market share in both Argentina and Colombia.
In addition, several customers in Latin America with temporary COVID pricing adjustments have returned to full-day rates.
Notwithstanding the macro challenges, the operation in Saudi Arabia performed exceedingly well.
In addition, the expected rig restarts in the Kingdom have begun.
Since the beginning of the year, eight of the idle rigs have returned to work.
Our working rig count in Saudi Arabia now stands at 38.
This leaves five expected to return over the next 12 months.
These reactivations are consistent with the expectations we laid out last quarter.
I would like to take a moment here to express our appreciation to our SANAD CEO and the members of the SANAD board, especially the directors from Saudi Aramco.
The Aramco board members have been tireless in supporting the management team in delivering best-in-class operational performance.
That concludes my remarks on our fourth-quarter results highlights in the market.
I wish to reiterate that our primary concern remains the health and well-being of the extended Nabors community.
On behalf of the company, we extend our heartfelt thoughts to those affected by the pandemic.
The net loss from continuing operations of $112 million in the fourth quarter represented a loss of $16.46 per share.
The fourth quarter included $162 million of pre-tax gains from debt exchanges and repurchases, partially offset by charges of $71 million, mainly from asset impairments, for a net after-tax gain of $52 million.
Fourth-quarter results compared to a loss of $161 million or $23.42 per share in the third quarter.
The third quarter included net after-tax gains of $6 million related to gains from debt repurchases, asset impairments, and severance costs.
Revenue from operations for the fourth quarter was $443 million, a sequential gain of 1%.
Revenue improved in most segments, with only international and rig tech partially offsetting those increases.
In the Lower 48, despite some deterioration in the average pricing for our fleet, drilling revenue of $103 million increased by $6.9 million or 7% as our rig count improved by 11%.
Lower 48 rig count at 53.6 was up sequentially by 5.4 rigs, which is 2.4 rigs more than we had anticipated.
Daily rig revenue in the Lower 48 at $20,950 decreased by about $800 as we continue to sign contracts at current market rates that are lower than the average for our fleet.
In aggregate, revenue in our other U.S. markets decreased by $3 million, reflecting a reduction in our offshore activity as one of our rigs finalized this contract in the prior quarter.
Fourth-quarter revenue fell with a lower rig count, as well as with the absence of the demobilization revenue we invoiced in the third quarter.
International drilling revenue at $245 million decreased by $3.3 million or 1%.
This decrease was primarily related to declines in activity across several markets, as rig count fell by almost nine rigs or 12%.
This rig count reduction was higher than anticipated.
Saudi rig count decreased by five rigs, two more than expected due to temporary suspensions as Saudi Aramco adjusted its drilling activity toward the end of the year.
Kazakhstan and Colombia each had a one-rig termination, both of which we did not anticipate.
In addition, Algeria and Kuwait had contracts expiring late in the third quarter that were not renewed.
The softer rig count was offset by approximately $4 million in revenue from early terminations and from the restoration of full-day rates for customers with negotiated COVID rates.
Canada drilling revenue was $14.8 million, an increase of $4.1 million or 38%.
Rig count increased by 2.3 rigs on the usual seasonal ramp-up in activity.
The quarter also benefited from a $700 increase in revenue per day.
Nabors's Drilling Solutions revenue of $32 million, up $2.7 million or 9% primarily reflected strong increases in our high-margin performance drilling offerings, as well as our RigCLOUD installations.
During the quarter, we continued to increase the penetration of these services with Nabors and third-party rigs while also benefiting from the higher Lower 48 rig count.
Rig Technologies revenue decreased by $1.1 million or 4% as several clients delayed deliveries beyond the end of the year.
Total adjusted EBITDA for the quarter was $108 million, compared to $114 million in the third quarter.
The decrease was driven by a $7.4 million reduction in our International segment and a more modest reduction in rig technologies.
These were partially compensated by improvements in NDS, as well as U.S. and Canada drilling.
Drilling adjusted EBITDA of $62.2 million was up by $1.6 million or 3.1% sequentially.
The Lower 48 performance came in better than expected on the stronger rig count and higher margins.
Daily rig margin of $9,541 was about $500 above the high end of our previous guidance and in line with the third-quarter level.
Decreased costs, mainly a reduction of property tax expenses, offset the pricing deterioration we experienced in the fourth quarter.
Cost-control efforts continue to be a strong focus as we bring rigs back to work.
As an example, we have improved our rig stacking and reactivation procedures, and the related costs are significantly better than in the last cycle.
For the first quarter, we expect daily rig margins of approximately $8,500, driven mainly by the repricing of renewals as rigs continue to roll off pre-pandemic contracts and by the return to more normal levels of property taxes, with an adverse impact of approximately $600 per day.
We forecast a two- to three-rig increase for the first quarter of 2021.
Our current rig count in the Lower 48 is 57 rigs.
International adjusted EBITDA decreased by $7.4 million to $64.5 million in the fourth quarter or 10% sequentially.
The lower rig count was somewhat offset by early termination revenue and return to full-day rates from several customers.
Average international rig count was 62.6, a reduction of 8.7 rigs or 12%.
Daily gross margin for the quarter was $13,500 as compared to $12,700 for the prior quarter.
The fourth quarter included approximately $800 per day in early termination revenue.
Turning to the first quarter, we expect an international rig count increase of two to three rigs as several Saudi rigs returned to work progressively during the quarter and for gross margin per day to settle between $12,500 and $13,000 per day.
Our current rig count in the International segment is 57 rigs.
Canada adjusted EBITDA of $3.5 million increased by $1.4 million.
Rig count at 9.7 rigs was 2.3 higher sequentially.
Gross margins per day of $4,633 also increased due to the higher activity level.
We expect both rig count and daily margins to improve again in the first quarter by three rigs and $500, respectively.
We currently have 14 rigs operating in Canada.
Drilling Solutions posted adjusted EBITDA of $10.3 million, up from $7.1 million in the third quarter or 44%.
The improvement reflected mainly the higher revenues from performance drilling offerings and RigCLOUD infrastructure.
In addition, a shift in our U.S. casing running services from manual to integrated materially improve the profitability of that business line.
We expect adjusted EBITDA in the first quarter to be in line with the strong fourth quarter.
Rig Technologies reported adjusted EBITDA of $0.5 million in the fourth quarter, a decrease of $800,000.
The first-quarter EBITDA should be similar to the fourth quarter.
Now, let me review our liquidity and cash generation.
Looking back at 2020, it was a challenging year.
Nevertheless, we maintained our focus on improving liquidity and leverage, and we made significant headway.
The capital and cost discipline actions we announced earlier, including cuts to corporate and operations overhead, salaries, dividends, and capital expenses, were fully executed.
These actions were instrumental in helping Nabors deliver $184 million in free cash flow for the full year.
In 2020, we reduced overhead spend by 24%.
These reductions began in the second quarter and translated into cash savings of approximately $90 million over the last 9 months of the year.
Our run rate in the fourth quarter represents a nearly 28% reduction over the 2019 quarterly average.
The decrease in overhead, combined with capex reductions of $170 million and dividend cuts of $7 million, translate into total cash savings of approximately $267 million versus our initial plan for 2020.
Despite the substantial drop in activity and consequent EBITDA shortfall, Nabors delivered free cash flow, almost in line with our initial pre-COVID target.
In the fourth quarter, net debt declined by $290 million to $2.49 billion.
This reduction was driven by positive free cash flow and by several debt exchanges we completed during the quarter.
Free cash flow, defined as net cash from operating activities less net cash used for investing activities, totaled $66 million.
This compares to free cash flow of approximately $9 million in the prior quarter.
The fourth quarter included minimal interest payments as compared to semiannual interest payments of approximately $80 million in the third quarter.
During the fourth quarter, we experienced a slowdown in collections from a significant number of our customers.
While our quarterly free cash flow was affected by some $30 million, we expect this situation to prove temporary.
For the first quarter, we anticipate breakeven cash flow.
Please keep in mind that semiannual interest payments for all our senior notes are paid in the first and third quarters.
In addition, the first quarter has an unusually high number of one-time annual payments, such as property taxes and bonus payments to our workforce.
These payments and other one-time annual outflows in the first quarter typically amount to about $30 million.
Offsetting these negative impacts on our cash flow, we anticipate a strong recovery in our quarterly collections.
We have already experienced an increase in collections during the month of January.
During the fourth quarter, we completed a public debt exchange and various private exchanges.
These transactions reduced our total debt obligations by $284 million and reduced our near-term maturities.
During 2020, we reduced through repayments, buybacks or exchanges, near-term notes with maturities in or before 2023 by an aggregate amount of $1.5 billion.
Subsequent to year-end, we further addressed our capital structure by completing additional debt exchanges and open market purchases of our note.
These transactions reduced our debt obligations by an additional $22 million.
Let me continue with a comment on capital expenses.
Capital spending in the fourth quarter was $41 million, compared to $39 million in the prior quarter.
For all of 2020, capex totaled $190 million, $10 million less than we had planned.
We are targeting capex of $50 million for the first quarter and up $200 million for the full-year 2021, excluding Saudi newbuilds for SANAD.
At this point, SANAD has been awarded three drilling contracts by Saudi Aramco, and we have issued one purchase order for the first three.
We do not expect that any newbuilds were delivered in 2021.
Nonetheless, capex for SANAD newbuilds, if any, would be paid out of SANAD funds.
The final comment, it is worth mentioning that we determined, together with our SANAD management team and with our JV partner, Saudi Aramco, that at year-end 2020, SANAD held cash balances beyond its future needs.
Consequently, a cash payment of roughly $50 million to each partner was approved.
This payment was executed in the month of January.
As you are aware, Nabors's strategy focuses on three key themes: first, operating premium fit-for-purpose assets in diversified geographies; second, expanding services at the well site using the rig as a platform; and finally, using technology to unlock value and drive future growth.
This past year's results demonstrate the value of this strategy.
With regard to our assets, we continue to produce leading margins in both the Lower 48 and international markets.
This performance reflects the quality of our assets and the competency of our crews.
Our safety record, which has outperformed our competitors, also confirms that our fleet is second to none.
In particular, utilization of our innovative pad-optimal pace X rig remained high throughout 2020.
Utilization of the X rig, as well as our other advanced Lower 48 models, has increased steadily since last summer.
And in geographies as diverse as the Gulf of Mexico and the Middle East desert, our rig utilization has held up better than most.
We predicted in late 2016 that the drilling industry could not count on an ever-increasing rig count to grow EBITDA.
In response, we created NDS.
Its mission was to grow by using the rig as a platform.
NDS delivers integrated well site services in a more efficient manner, which unlocks value for operators and generates growth for us.
Today, NDS is one of the most robust and sizable software offerings.
Market challenges since 2016 notwithstanding, we have demonstrated that this is a value-creating strategy.
Finally, with respect to technology, we have maintained our investment in R&D even throughout the downturns.
Those investments have fueled our premium assets and NDS offerings.
They yielded the first software, automated directional drilling, and fit-for-purpose downhole tools.
We strongly believe that the next wave of value will be created through process automation, including robotics and digitization.
ESG and efficiency reasons alone will push operators to resolve the red zone management issue and remove employees from the rig floor.
We believe we are uniquely positioned to meet that challenge.
We have an unmatched portfolio of assets, technology, geographic mix, and people that positions us well for the future.
We remain convinced that our portfolio will deliver tangible value to clients and, ultimately, back to Nabors's shareholders.
 Assistant:

Chosen response:
q4 loss per share $16.46 from continuing operations.
q4 revenue $443 million versus refinitiv ibes estimate of $418.4 million.


Prompt:
Human: Joining me on the call today are Mike Hayford, CEO; Owen Sullivan, president and COO; and Tim Oliver, CFO.
And as always, a great job with the intro to our third-quarter call.
I will begin with some of my views on the business, including an update on our move to NCR becoming a software platform and payments company, with a shift to recurring revenue streams and a focus on improving profit margin.
Tim will then review our financial performance and an outlook into the remainder of 2021.
Let's begin on Slide 4 with some highlights from the third quarter.
NCR delivered strong performance that included accelerated recurring revenue growth, significant margin expansion and solid cash flow production.
The team executed very well both strategically and tactically.
Strategically improving our mix of software and services, investing in our platform products and at the same time continuing to build momentum in our NCR-as-a-Service strategy, while continuing to focus on meeting customer needs in the challenging supply chain environment that we experienced in the third quarter.
First, we delivered 20% total revenue growth and 39% recurring revenue growth in the third quarter.
Recurring revenue represented 62% of total revenues in the quarter which is a significant increase from 53% one year ago.
We continue to make steady progress increasing our recurring revenue, which is consistent with our 80/60/20 goals.
As you know, the third quarter was the first full quarter of incorporating Cardtronics in our financial results as we closed on the transaction in late June and received the final regulatory approval on August 10 from the CMA in the U.K. Second, adjusted EBITDA increased 41%.
Third, adjusted EBITDA margin expanded to 18.5%, which represents an increase of 280 basis points from the third quarter of 2020 and marks the highest level in four years.
Fourth, we delivered solid free cash flow.
We generated 125 million of free cash flow in the quarter.
This is the sixth consecutive quarter of positive free cash flow.
The successful execution of our NCR-as-a-Service strategy is helping to drive higher recurring revenues, expansion of EBITDA margin and more linear free cash flow production.
And finally, the integration of Cardtronics remains on track.
We made progress integrating the teams and going to market as a unified company.
We are more enthusiastic than ever.
We are well positioned to accelerate the NCR-as-a-Service strategy and further shift NCR's revenue mix to software, services payment, including recurring revenues.
Now moving to Slide 5.
We executed extremely well in the third quarter, driving progress toward NCR-as-a-Service.
We have strong momentum across our strategic growth platforms, which support our transition to shift NCR to a software platform and payments company.
In Banking, we continue to have a positive momentum in our digital banking platform.
In the third quarter, digital banking had 22 renewals, three new logo deals, and eight new product sales to existing clients, all positive drivers of growth.
Demand has been strong for our business banking platform, as well as for the online digital account opening.
The digital account opening, which we obtained through the acquisition of Terafina earlier this year, NCR can now onboard a broad array of accounts across multiple channels.
I am pleased with the progress we have made returning digital banking to a growth engine for NCR.
During the third quarter, digital banking grew 9% over the same period last year.
We are receiving increased interest in our ATM-as-a-Service solution.
An integrated go-to-market model between the legacy NCR and Cardtronics teams provide a key point of competitive differentiation.
Liberty Bank, which is one of the largest mutual banks in the United States, selected NCR to provide end-to-end ATM-as-a-service for its ATM network, including upgrading its entire ATM fleet.
In Retail, we continue to gain traction with our NCR Emerald software platform.
We have positive momentum in winning the upgrade imperative for retail POS software.
In the third quarter, we had significant success advancing our software-defined store, which is a component of our next-gen Emerald solution.
It provides us the capability to start our retail clients down the path of upgrading to our next-gen cloud-based solution in a seamless, low-risk approach by accepting select micro services from our NCR eCommerce platform in an incremental approach to transitioning to NCR's next-gen solution.
We had two major software-defined store commerce platform signings during the third quarter from large clients that have installed the NCR eCommerce platform validated the technology in a full rollout during 2021, both confirming their success with signing a five-year subscription agreements during the third quarter, these two, Pilot Flying J, the largest operator of travel centers in North America with 750 retail locations in 44 states; and Circle K, which operates more than 15,000 convenience stores in over 20 countries.
In addition to the NCR eCommerce platform, Circle K also expanded its relationship with NCR to enable the Allpoint Network across stores in eight states.
During the quarter, we also signed 17 new contracts through our digital front-end app, Freshop.
This SaaS solution helps grocers implement their own eCommerce and delivery services without expensive third-party providers.
Freshop connects to our clients through the NCR platform and provides NCR additional upsell opportunities and value-add for our retail customers.
In Hospitality, our focus on customer success and wallet share gain is proving itself in our ability to attract new customers and better service existing customers.
NCR realized a significant upgrade in our relationship with Buffalo Wild Wings, which is part of the Inspire Brands family, entering into a four-year contract to support Buffalo Wild Wings across 1,200 locations with subscription-based point-of-sale software, various cloud-based applications, and end-to-end managed services.
In the SMB market, the momentum of Aloha Essentials, which bundles payments, software, services, and hardware into a single offering, continued in the third quarter with a 102% increase in a Aloha Essentials sites over last year's same quarter.
Our Payments business continued its success during the third quarter.
We increased the number of restaurant payment processing sites by 27% from the second quarter, as well as upselling existing customers to our payments platform.
During the third quarter, we signed enterprise hospitality client Sbarro to our payments platform.
This is in addition to two other enterprise hospitality clients Shipley and Pei Wei that we signed a payment processing deals earlier this year.
In summary, we have increased momentum accelerating our NCR-as-a-Service strategy across each of our business segments.
We continue to focus on taking care of our customers, advancing our product capability with investments in our strategic growth platforms, and improving our productivity.
With that, let me pass it over to Tim.
To echo Mike's comments, we are very pleased with our third-quarter results.
We demonstrated terrific tactical execution in an uncertain business environment and significant acceleration in our more strategic growth areas.
CMA in mid-August since we last talked to you on our Q2 earnings call.
Today's report includes the results for the consolidated companies for the full quarter, with legacy Cardtronics now included in our banking segment.
Let's begin with Slide 6, which presents a top-level overview of our third-quarter financial performance.
Starting on the top left, revenue was $1.9 billion, up $312 million or 20% versus the 2020 third quarter, driven by strong growth in both our banking and hospitality segments.
Normalizing for the inclusion of Cardtronics, pro forma revenue was up 3% year over year.
In aggregate, we had high double-digit revenue growth in our software business, which is more than sufficient to offset lower hardware revenue.
While demand for hardware across all three segments is increasing, component availability and freight challenges constrained both revenue and profitability in self-checkout and point-of-sale.
Also shown here in darker green is our mix of recurring revenue.
With the inclusion of the full quarter of Cardtronics revenue, which has a preponderance of recurring revenue, our aggregate result was up 39% and comprised 62% of revenue in the quarter.
On a pro forma basis, recurring revenue was up 7% year over year.
In the top right, adjusted EBITDA increased $103 million or 41% year over year to $352 million.
Adjusted EBITDA margin rate expanded 280 basis points to 18.5%, representing a high watermark for the previous four years.
While I will provide a little more detail on the discussion of the segments, in general, a higher value revenue mix, cost productivity and price initiatives were together more than sufficient to overcome premium costs associated with a brutally difficult supply chain and a huge shift to recurring quarter for our retail business.
In the bottom left, non-GAAP earnings per share was $0.69, up $0.15 or 28% from the prior-year third quarter.
The Cardtronics transaction remains on track to be 20 to 25% accretive to earnings per share within the first full year.
The tax rate was 28.5%, and we now expect the full-year tax rate to be 28%.
And finally, and maybe most importantly, we delivered another strong quarter of free cash flow with generation of $125 million.
This compares to $160 million in the third quarter of 2020, which benefited from pandemic-related temporal cash preservation actions and the timing of an insurance settlement.
Moving to Slide 7 for our banking segment results, which now includes the Cardtronics operations.
Banking revenue increased $273 million or 35% year over year, driven by increases in software and services revenues that more than offset the decline in ATM hardware revenue.
We continue to successfully replace our onetime revenue that was traditionally recognized with the sale of ATM hardware with more durable, predictable and valuable software and services revenue streams.
Subscription software TCV signed in this segment doubled from prior year, with significant increases in both annual value and duration.
Banking adjusted EBITDA increased $98 million or 68% year over year.
Adjusted EBITDA margin rate expanded by 450 basis points to 23%.
The margin increase was a result of the significant accretion from the inclusion of the Cardtronics businesses, a more profitable and valuable mix of revenue in our legacy NCR businesses, as well as the cost productivity and price increases.
The bottom of the slide shows our key metrics for the banking segment.
On the left, while current quarter wins have a typical lag to conversion and eventual revenue generation, prior period wins at digital banking drove a 9% year-over-year growth rate in the third quarter.
The grade of growth in digital banking has accelerated in the last several quarters.
We continue to expect digital banking to exit the year at a double-digit revenue growth rate as we lap most of the attrition caused by the 2019 customer losses.
Digital banking registered users also increased 9% compared to Q3 of 2020.
The shift to recurring revenue continues to gain traction, with recurring revenue up 71% year over year and 7% on a pro forma basis.
We are extremely pleased with the first full-quarter performance at Cardtronics.
As we continue to add and expand with financial and retail partners, we are driving more transactions over our leading ATM network in the United States.
Cash transactions on our ATMs in the U.S. were up 12% compared to the third quarter of 2020.
demonstrates the value of the network to our consumers, to our retailers and to our financial institutions and drove strong performance.
We expect to drive both traditional transaction growth and new types of transactions as we invest in expanding the capabilities of this network.
Moving to Slide 8, which shows our retail segment results.
While I typically start in the top left on these charts, for this quarter in retail, the story is really described by the bottom half of the page.
Looking at SCO revenue, which is approximately 50% hardware, as we called out in Q2, we posted a very strong Q2 growth rate due to a customer request to accelerate a $30 million self-checkout order into Q2 from the second half of the year.
That exacerbated the already sawtooth pattern.
We expect a strong Q4 for self-checkout that will result in full-year 2021 growth of more than 10%.
And in the center bottom, our platform lanes, a KPI that illustrates the success of our strategy of converting our retail customers to our platform-based subscription model.
As you heard from Mike, we had two key deals at Pilot Flying J and Circle K converting to our software-defined store platform during the quarter.
These contracts, much like those that we have standardized on in the banking segment, convert would-be onetime perpetual sales into a multiyear subscription-based revenue stream.
The nature of these contracts shifts roughly $30 million of very high profit revenue that would have previously occurred is upfront software license to revenue that now recurs over the next several years.
Considering those two retiming impacts, retail revenue declined $3 million or 1% year over year due to the lower hardware revenue and the shift to recurring revenue, partially offset by growth in software and services.
And similarly, retail adjusted EBITDA declined $11 million or 14% year over year, while adjusted EBITDA margin rate contracted 190 basis points to 12.7%.
The declines are primarily driven by that shift to recurring revenue.
Recurring revenue in this business increased 4% versus the third quarter of last year.
Slide 9 shows our Hospitality segment results, which is participating fully in the recovery of the restaurant industry.
We're seeing strong momentum across the business as we see a rebound in the enterprise market with an uptick in new restaurant openings and technology refreshes.
Hospitality revenue increased $50 million or 29% as restaurants reopen, rework existing locations, and expand.
Our signed subscription total contract value in this business increased 46% from the year-ago third quarter.
Our sales pipeline is getting stronger and we continue to hire to increase our feet on the street and catalyze growth.
Second quarter adjusted EBITDA increased to $35 million, up 46% from the third quarter of 2020, while adjusted EBITDA margin rate expanded 180 basis points to 15.7%.
This improved profitability was driven by higher revenue and lower operating expenses.
Hospitality's key metrics on the bottom of this slide include Aloha Essentials sites and recurring revenue.
Aloha Essentials sites more than doubled when compared to the prior year third quarter and grew 30% sequentially.
And in the graph on the bottom right, recurring revenue increased 19% from last year and 7% sequentially.
Turning to Slide 10, we provide our second-quarter results for our 80/60/20 strategic targets.
First, we strive to generate 80% of our revenue from software and services or less than 20% of our revenue from discrete hardware sales.
In the third quarter, software and services represented 76% of our revenue, which is up from 71% in the year-ago quarter.
Stepping down the page, we aim for 60% of our revenues to be recurring to drive more resilient, more predictable, and more valuable revenue.
With the addition of Cardtronics, we have now exceeded our goal with recurring revenue representing 62% of the total, up from 53% in last year's third quarter.
And we aspire to a 20% adjusted EBITDA margin rate.
We made significant progress in this quarter with an adjusted EBITDA margin of 18.5% compared to 15.7% in the third quarter of 2020.
On Slide 11, we present free cash flow, net debt and adjusted EBITDA metrics to facilitate leverage calculations.
We continued the trend of strong, more linear free cash flow.
We generated total free cash flow of $125 million.
We have a strong balance sheet, ample liquidity, and the financial strength to support our growth strategy.
The increase in cash provided by operating activities was primarily driven by the effective management of our working capital, including the refinancing of our receivables asset-based revolver to provide higher availability and to make the financing nonrecourse.
This provided a onetime $274 million benefit to operating cash flows.
We use that cash, along with our strong Q3 free cash flow, to redeem our highest coupon debt to $400 million of 8% bonds.
Taken all together, all of these efforts have reduced our average borrowing rate to 4.15%.
This slide also shows our net debt to adjusted EBITDA metric with a pro forma leverage ratio of 3.8 times.
When we announced the Cardtronics transaction, we estimated that our pro forma leverage would be about 4.5 times with a commitment to delever below 3.5 by the end of 2022.
We are significantly ahead of the schedule due to higher-than-forecasted cash generation by both companies.
We ended the third quarter with $383 million of cash and remain well within our debt covenants, which include a maximum pro forma leverage ratio of 5.5x.
We also have significant liquidity with about $1 billion available under our revolving credit facility.
Finally, about 90 days ago, we provided guidance for the first time since the beginning of the pandemic to help you bridge your modeling efforts to an NCR that was inclusive of the Cardtronics acquisition.
Considering the Q3 results, and the persistently challenging global supply chain, we expect to be at the lower end of those guided ranges.
While we expect a 20% sequential increase in hardware revenue in Q4 and anticipate continued excess demand for both self-checkout and point of sale and some recovery from price increases on hardware, supply chain constraints will likely cause us to carry some backlog into 2022.
For EBITDA and EPS, a little less revenue and supply chain premium costs will modestly constrain profit.
And for free cash flow, slightly lower revenue, less linear revenue and the potential need to invest in safety stock of key components to meet customer needs early in 2022 will all impact cash generation.
Now turning to Slide 12.
Looking forward, our key priorities are clear.
First, we expect to continue to execute well in a very difficult supply chain environment.
We will continue to put our customers first and deliver on our commitments while we manage through the supply chain challenges.
Second, we are eager to capitalize on the opportunities that Cardtronics brings us.
We are excited to leverage Cardtronics to accelerate ATM-as-a-Service and broaden our retail business.
Third, we are experiencing increased opportunities to accelerate NCR payments and transaction processing solutions as we go to market with a more robust offering.
Fourth, we will continue to allocate capital to the highest growth and return opportunities with the goal of driving free cash flow and increasing returns for our shareholders.
Fifth, we will continue to focus on our customer satisfaction initiatives with the simple belief that happy customers will buy more solutions from NCR.
We strive to garner a larger share of wallet with the mission to help our customers run the store, run the restaurant, and run self-directed banking.
Our strategy of transitioning customers onto our software and payments platforms is gaining traction with customers on the platforms increasing their spend with NCR.
And lastly, I'd like to extend an invitation to each of you to participate in our virtual Investor Day, which is scheduled for December 9 of this year.
We are looking forward to this event and intend to take a deep dive into our strategy, our software and payment platforms, and an update on our strategic goals.
Operator, please open the line.
 Assistant:

Chosen response:
q3 non-gaap earnings per share $0.69.
q3 revenue rose 20 percent to $1.9 billion.