Q1 2020 Earnings Call

Good afternoon, everyone and thank you for participating in today's conference call to discuss profiles energy. First quarter twenty twenty months ended March 31st. 2020 joining us today is the CEO of profiler energy Brendan hatch and CFO of profiler energy. Ryan o v e before we begin today's call. I would like to take a moment to read the company Safe Harbor statement cautionary note regarding forward-looking statements statements could be made during this call that are not historical.

Forward-looking statements this call contains forward-looking statements including but not limited to statements regarding the modification of the companies cost structure in Chrome operating expenses expansion and international markets product development compete completing the $3,100 product installations that have been delayed off the availability of companies resources to make beneficial investments in 2020 and Beyond and the companies that exploration of m&a.

Opportunities the potential of international markets and the company's future financial performance.

All sides forward-looking statements are subject to uncertainty and changes in circumstances forward-looking statements are not guarantees of future results or performance and involve assumptions an uncertainty that could cause actual events or results to differ materially from the events of result described in or anticipated by the forward-looking statements that could materially affect such forward-looking statements include certain economic business marketing business public market and Regulatory risk factors identified in the company companies periodic reports filed with the Security and Exchange Commission. All forward-looking statements are made pursuant to the safe harbor provisions of the private Securities litigation Reform Act of 1995. All forward-looking statements are made only as of the date of this release a phone.

Company assumes no obligation to update forward-looking statements to reflect subsequent events or circumstances except as required by law. We just should not place any undue Reliance on these forward-looking statements. I would like to remind everyone that this call is being recorded and will be available for replay through May 21st, 2020 starting later this evening. It will be accessible via the link provided in yesterday's press release as well as the company's website at w w w.

following the

By Mister hacked and mr. We will open the call for questions as part of the question and answer session home nov will be joined by profile business developer officer Cameron and profiler energies vice president of a big operation Google and vice president of product development Patrick. Now, I would like to turn the call over to Chief Executive Officer of profile energy. Mr. Branton pack, please go ahead. Thank you and welcome everyone to our first quarter 2020 earnings call first. I hope that you and your life understand safe during the covid-19 pandemic and we wish you continued good health, like all of you. You've spent the past two months adjusting our business and homes home.

Due to the outbreak of covid-19. I'd like to start today's call with an update on the steps that profile has taken internally and how we have adjusted our interactions with our customers particularly in the field our industry falls under the essential business category. So our offices have remained open throughout the stay-at-home orders of the USA and Canada. We have implemented and followed best practice sanitization and social distancing guidelines and had made accommodations for employees that need to work remotely. Some of our employees are unable to work remotely due to the nature of their roles. We've Incorporated a shift schedule for these employees to limit exposure and reduce the numbers of people off each facility at any given time as in previous times the volatility in our industry our strategy remains to stay relevant and present with our customers dead.

Our sales and service team members continue to collaborate with train and support our customers through alternative communication means as well as face-to-face when appropriate in the fields of these are key differentiators for us that give our customers comfort that we will continuously be available to service their needs with without any loss in income continuity. All right burner Management Solutions remain a critical component of production of production and processing even in the situations and environments that we're currently facing our Solutions facilitate safe and efficient operations and support our customers need to reduce downtime and waste

Our brand leading position coupled with the Acquisitions. We integrated in late 2019 have increased our value to our customers as we have expanded the range of products and solutions. We can offer customers over the years. Our company has been able to withstand the impacts of economic slowdowns price Wars within the oil and gas industry wage and Global disruptions. Fortunately. We have never had to operate in an environment in which all three occurred simultaneously this changed in March with the globe covid-19, which led to a significant decrease in oil and gas demand due to the virtual shutdown of the economies across the globe this combined with the Fallout from the Gulf War between Russia and OPEC also led to a meaningful reduction in Exploration and production activity. I'm confident that we'll be able to strategically navigate navigate through Thursday.

Times and I'm pleased it will.

We were able to keep profiler in the strong financial position to do. So in my many years in the oil and gas industry. I've seen many companies take on significant debt loads that may become difficult to manage effectively in a downturn our continued approach to run the business debt free as a strategy that is proving to be quite prudent in the current environment off with that. I will now turn the call over to Ryan to discuss the financial results for the first quarter Ryan. Thanks Brent. I would first like to read off that. I hope you and your families remain safe and well in these challenging times and I appreciate you taking time to join us for our call today.

Yesterday after the market closed we filed our 10-q with the SEC and discussed the quarters highlights in a press release as always both of those documents are available on the investor in a section of our website. The transcript of this call will be posted in the coming days.

Before I review our results for the first quarter, I'd like to note some key industry metrics that illustrate the magnitude of the impact. The coronavirus pandemic has had on the oil and gas industry wage coming into twenty-twenty the capital allocation model for most DMP companies was focused on debt reductions dividend increases and share BuyBacks with little or no explanation expansion with the outbreak of covid-19. MP companies are pulling back in all areas in an effort to preserve their overall liquidity. Just unfortunately in some cases companies have been unable to refinance their debts and have had to file bankruptcy in the first quarter of 2020 that Weekly average wage account for North America decreased to $958 a 20% decrease compared to the 1204 rigs in the same period of last year since birth.

Quarter end the same metric has dropped another 56% to only 417 as of May 1st.

The average oil price and the first quarter of 2020 was $45 per barrel down 17% compared to the average for q1 2019 and closed on March 31st at home was at the time and historic low of $14 per barrel following the price war between Russia and OPEC.

And as most of you witnessed a couple of weeks ago crude oil prices were negative for the first time on record AS Global demand significantly decreased and storage was near capacity.

Now on to our results for the first quarter in the quarter, we recognize seven point four million in Revenue, which is down 31% from the same. A year ago our first quarter ended March 31st. So the quarter's results only reflect a few weeks of impact related to both covid-19. And the oil price War gross profit decreased to 3.2 million as compared to 5.8 million in the year-ago quarter and gross margin decrease to 42.5% of revenues compared to 53.2% in the first quarter of 2019. The decrease was a combination of typical changes in product mix and warranty reserves as well as the initial impact where revenues dropped faster than we could immediately mobbed by the fixed cost structure.

total expenses

For approximately 3.8 million or a 6% increase from the same quarter last year. This increase is primarily due to an increase in research and development expenses and higher labor and depreciation expenses related to our two Acquisitions in the second half of 2019.

Specifically operating expenses for G&A increased 4% are indeed increase 17% and depreciation increased 27% as compared to the same quarter of a year ago total other income during the period was roughly 75,000 the majority of which was attributable to interest income net loss for the fourth quarter was $3,000 or $0.01 per share compared to net income of 1.7 million or 3 cents per diluted share in the same quarter last year.

Cash flow from operations in the first quarter was a positive 271000 despite the reduced revenue and increased costs.

Now let's look at the balance sheet cash and liquid Investments total of 17.9 million as compared to eighteen point six million at the end of 2019 Capital expenditures for the corner were five hundred and twenty five thousand primarily related to the completion of our new facility in Canada, which opened in March our inventory balance at the end of the quarter was 8.8 million consistent delivery in a timely manner is another competitive strength of profire. We continue to carry enough inventory to be well-positioned to fulfill customer orders in the near-term with the existing finished goods on hand.

Given the significant impact of covid-19 on the global economies and specifically on the oil and gas industry. We believe the resulting volatility in oil and gas prices will be tied in the second quarter and possibly longer in these circumstances. We have already begun modifying our cost structure in order to make necessary changes to return to profitability wage. For example, we have halted all discretionary spending cut back on travel for the year and implemented a hiring freeze including for those positions that are vacated due to a trade in addition. The executive management team has decided to forego the 2020 annual and long-term incentive compensation plans, which will decrease Target compensation for each exam is between 40 and 50%

We will also reduce non-employee director compensation through the end of 2020 while we believe we have sufficient liquidity. This proactive move is being done to maintain a cash balance in the event that these challenging circumstances persist Beyond just the next few months as the covid-19 pandemic eases or in the event of these times create meaningful m&a opportunity to grow the company as we previously announced the company applied for and granted a paycheck protection plan loan of 1000 through the SBA since that time the treasury Department issued additional guidance related to small public companies with access to other forms of liquidity.

in light of these

National guidelines company management and the board have decided to return the PPP funds for the benefit of other small businesses with less access to Capital. We don't anticipate this repayment to be highly detrimental to profiler in the short-term. However, the long-term impacts of the coronavirus on the oil industry remain uncertain

I will now turn the call back over to Brent to discuss our plans and expectations for the second quarter rent. Thank you Ryan The Fallout from covid-19 and historically a loyal prices is expected to impact our industry throughout much of twenty-twenty. Our company is well-positioned to whether these effects for numerous reasons, but perhaps none more important than our conservative Financial strategy in the strength of our balance sheet. I'd like to give a quick update on our Legacy business and some of our growth initiatives that we have highlighted in previous phone calls, including product development International sales and other strategic activities over the years. We have expanded our position improving our strength in the Upstream Midstream and downstream utility segments of the oil and gas sector specifically products sales and field services focused on Vernor Management Solutions. We continue to play

To our strength despite the current volatility. We're experiencing our Legacy PF 2100 continues to be the industry standard our PF 2205 last year continues to Trend well in performance and customer feedback be required peripheral products and Technical expertise that comprise a DMS solution continue to be sought after and needed the or a legacy business has been impacted due to changes in capital spending. We feel that we have not lost ground too competitive forces. We look up to this. As an opportunity to integrate our expertise further in support of our customers the PF 3100 product continues to gain traction with customer whose application requirements are more complex in nature prior to the outbreak of covid-19 and the collapse of commodity prices. We had made significant Headway in terms of birth.

Introductory meetings into some Downstream refineries. Unfortunately, these have been deferred as potential projects are being pushed given the lower throughput month and as changes to staff continued though. We're disappointed with this slowing of momentum. We are encouraged by the initial meetings. We were able to set up and the feedback received although a significant Milestone project for pro fire at a downstream Refinery was deferred until further notice. We remain optimistic that the project will go forward in the future as discussed in previous calls in 2019. We planned to bring on three international Partners slash Distributors to to represent our products in a strategic Geographic locations. We are pleased to report that we're able to reach working agreements with six distributors in 2019 and are working toward formalizing religious.

with additional District

2020s progress will definitely be impacted as our Distributors face similar challenges. However, we are optimistic about the future and our partners ability to market sell and support our product line Market disruptions will continue to provide profire with opportunities that we plan to remain conservative in our approach to merger and acquisition activities. We continue to use our well-capitalized position to support future growth current and future decisions will continue to focus on our Samsung TV to support the industry with product and solutions that number one improves safety number to provide cost control and cost a certainty number three deliver optimization of assets and processes and number for support environmental footprint and impact initiatives.

Before I turn the call over for questions, I'd like to take a moment and thank all of our profile employees for their ongoing dedication to the company particularly long. Well many are balancing additional responsibilities with families due to the closures of schools and daycares checking on neighbors and other adjustments to Everyday Life operator. Would you please provide the appropriate instructions so that we can get the Q&A started?

We will begin the question-and-answer session to ask a question, press * then 1 on your touchtone phone. If you're using a speaker phone, please pick up your handset before pressing the key to withdraw your question. Just press * then two. Please limit yourself to one question and one follow-up at this time. We will pause momentarily to assemble our roster.

Our first question is from Rob Brown from Lake Street Capital markets. Go ahead.

Hello. Hello, mr. Brown.

I guess I just take my questions first. Just wanted to get a sense on the sort of recent customer environment. Are you seeing kind of cancelled orders this point or you just seeing an low visibility in office or sort of what's the the current trends?

Mr. Tudball who's so involved with that. Would you like to answer of this question? Are you betcha obviously in quarter one the effects of covid-19 and Opex worked as prevalent. However, we did see towards the end of the quarter some deferral as we mentioned Brennan's comments. We had a what we're calling them cuz it was a an install in the downstream facility refinery in the United States has been deferred. So we we definitely have seen that some divorce as companies try to figure out what they're going to do with their Capital budgets. We have had a couple of companies a few companies in the first quarter basically wage cut capex for for the year. But again so much is in the air, but we have seen a a trend to that for sure.

Okay, thank you. And then then I think during the the last downturn you were sort of focusing your Cost Cuts away from your your field activities. How does that compare to this this time around where you really focus on the Cost Cuts in and looking at ways to generate cash though, right?

A good question Rob. You're right in the last downturn. We we were able to be quite strategic in where we cut back and and how we did things we're still working through the process right now and looking at various options. We've we've done a number of things so far. We as as we stated a few minutes ago. We've kind of stuck at the top with the executive team in the board and we've made Cuts there to lead by example and to to have a sizable impact, uh on on the company name on our cost structure. We've also looked at our the budget that we had previously prepared earlier in the year and did a q1 revision where we took out discretionary spending and travel and looked at cutting wherever we could we've also spent the last several weeks investigating the government assistance programs both in the

Press and in Canada to see what relief is available to us through those programs. We're we're still optimistic that there will be some relief available in Canada with the team up there. And unfortunately as we commented with the PPP program in the latest guidance here in the US it made it highly uncertain and Highly Questionable for public companies to participate in that program. So in consultation with the executive management team the board and our outside legal counsel, we determined it was improvised best interests to return the funds that we had received there. So that's kind of the process that we've gone through thus far and we want to continue to be very strategic in how we look at things. I think in in the 2015-2016 round there was probably a little more fat to cut off.

Areas, where we could trim? I think we've been smarter and more strategic since that time frame and how we've grown the business so cuts are not we don't talk as much excess or fat to trim as we had in the past. So the the cuts have to be a little bit more strategic but we're looking at our strategic initiatives the the best growth opportunities that we have and will certainly be preserving those opportunities for us as we continue to evaluate the need for further cost-cutting and mature revisions. Wow, and the last question is really on the Midstream mid-flow. It'll start Millstream inflow are dead. How are those doing in this are they sort of reacting similarly to the rest of the business and and where you at and getting those integrated?

Yeah, so the Millstream acquisition which was the first we did last year that product mix that we brought on with that. There are no longer any team members from Millstream is that that wasn't really the point of the acquisition. However, the product mix has been very successful in terms of of customer desire for Life. We've brought on new customers because of we've recognized the revenue because of it, but of course since it is primarily an upstream Midstream product Edition, it'll it'll receive the same impacts as overall profire. So but overall very encouraged by the adoption rates of customers specifications bringing on both of those products as part of the whole mix which we believe will eventually well then has it will increase our Revenue per BMS sold as it all goes part of together dead.

Solution terms of the mid-flow acquisition definitely the same similar impacts as they are very much Upstream focused group. However, as we've mentioned before it is really given us even stronger footprint in the Northeast. We've been able to come up with some some good product designs that will be able to put out here in this month quarter. We're in now that we believe will help producers through this time, as ofs companies are going to be in trouble and and more and more profile has to to come up with solutions that are easy for customers to order easier for them to install and to really give us that give them that cost control that they need and and really focused on that. So I think you've hit it right on the head there impacted because they are very much Upstream Midstream focused businesses, but we have seen very positive signs from from these two Acquisitions dead.

Great. Thank you. I'll turn it over. Thanks Rob. Thanks Rob. Our next question is from John White from Roth Capital. Go ahead. Hello, Jaan, Jaan, Jaan.

Hello, John.

Done. Yeah, it wasn't there. Our next question is from John from Chardon. Go ahead.

Hi Jim. Yes. Hey guys, how's it going? Good, how are you? Well, thank you given the month the new expense or the lowered expense structure.

And assuming I guess normal margins gross margins, what's what's the cash flow break-even level of Revenue at the new expense level?

At the at the new expense level which is continually adjusting described before we're still going through that process, but I would say we're probably in the range of 28 to 30 million break even right now.

Okay.

And on the receivables have have you have you gone through in scrub those yet based on?

The impact that some of your the the impact the lower oil prices has had on your on your customers. I guess I'm asking for how confident do you feel the in the receivables overall? We feel relatively confident with them. We can have continued on with the same process that we've always done with probably a little bit more effort in the scrutiny. We have a monthly meeting with Cam and representatives of the sales team with the accounting team with some people from off and we go through and we talked about all of our customers that have balances over 60 days and over 90 days. We talked about any customers that were getting feedback from the field that might be concerning or troubling and and we go through and we scrutinize those and out of that. We have a process where we adjust.

Various things credit limits. We sometimes put customers on hold where we don't allow them to purchase anything else until they pay down their balances and others. We even put on a cash-only payment plans as well. So we we've been following that very closely obviously in the current environment with potential bankruptcies. There is risk associated with the accounts receivable, but the overall balance has come down significantly. And even with that balance coming down are aged accounts receivables over 90 days has also took down quite significantly from your end. So our receivables team has done a very good job of staying in close contact with customers and working on those older balances and even getting payment on some of those old balances that had been troubling for a while. So, uh by no means have we eliminated all risk, but we have birth

Very good process to focus on it and it is very important to us, especially in the time like this.

Got it, that's helpful. And and just to ask the obvious the inventory levels, you know, we shouldn't expect any significant changes. They're going forward.

I wouldn't think so. No. Yeah, okay. All right, very good. Thanks a lot. Good luck with everything. Thank you. Jim going to talk to you.

Our next question is from John White from Roth Capital. Go ahead. Hello, John. Sorry about the inconvenience. I had the wrong button pushed down. We realized it's lunch time in Texas. So, you know you well cut you some slack there on the cost reviews wage and

how

Nice information you like to give Brent but is the growth in R&D spending? Is that is that under review?

Yes, it it certainly is. In fact, we're we're looking at everything across the boards in the organization. But but certainly that's one area. I might ask Patrick who who of course runs that department Patrick. Would you like to respond in any way to that? Yeah, we definitely can so the growth in R&D just this quarter was not so much a growth. There's a lot of just timing of some of the projects completing a lot of our certification projects which can be easily six figures by the time we're done that there's a couple of those that we had worked on through 2018 or 2019 that wrapped up nearly twenty twenty. And so we had to pay those bills around then overall through R&D. We have lunch. We even the beginning of 2020 we were looking at ways to reduce costs around the obviously keep the R&D effort moving not really reduce the bandwidth there. But yeah, I'm coughing.

290 has definitely been a huge Focus recently.

Thank you follow up Brent your comments on the utility business. We're encouraging what may be going forward. If for what more can you say about it going forward? You know, I I assume that somebody would be asking that question. I I wish I knew John obviously anyone of us if we knew it would make some strategic moves. We are we are very confident Thursday at at some point things will return the covid-19 will be over will start to see people driving and flying places and and and change the oil being used around the the world and so we we expect that things will pick up and and that people's attitudes towards this will change the

Investors eventually will change having gone through as you you certainly have the numbers of years of ups and downs with oil. I'm still very confident in in the future and and the fact that that profiler is so well positioned in terms of its balance sheet. We are very confident that by being prudent with our spending that money that we will live to see another great day when when things are are moving. We we know how very quickly things can change we don't we're not foolish enough to assume that it's going to happen in a quarter or two. But but we do believe that the future is still very bright for for oil for for us off investment in

I appreciate that. I I was encouraged by the utility business just because they have a much more stable operating environment than the the heat coming.

Yes, it's true.

Okay. Well you can hear you guys and best of luck. Thanks so much John John.

Again, if you want to ask a question, please press * then 1 our next question is from John from a sandwich advisor. Go ahead. Hey there Brent and Ryan glad this. Both on the phone here. It's great first off a comment. And I think you did the right thing and I decided to return those PPP funds. I think that that's a a good move there. I have two questions. First of all how sensitive is your org lower bookings to what will likely be more shut-ins and perhaps will not perhaps will be pnas on on low-volume Wells how much of your business might be affected by just an overall reduction in the number of birth.

those kinds of wells

mr. Did ball.

You bet. Thanks for the good question. They're all good. But the obviously you look at the Bakken. For example, they've already cut in March over April 33% of production. I think approximately 400,000 barrels-per-day. Well that really doesn't impact profire except for the fact that obviously these companies are off drilling profile relies on drilling. We rely on completions. We rely on retrofits. So obviously right now with commodity prices all over the map different breakevens by different geography throughout the Shale plays in the United States and Canada and said it's a variety of impacts for sure. Um, the good news is

The there are still companies pushing forward the Northeast we still see they're they're kind of used to this wonderful low prices. They this is normal operating for them. They're still we saw as well yesterday. She'll sold their their pa and New York or Utica assets which which is fine, but the we will see a six pack for sure the Permian there's nowhere for these barrels to go. That's why we have some negative pricing. So we will see as Cushing even though with these cuts from off depending what the Railroad Commission comes together but the Bakken and and other shut-ins it definitely does the impact profile because new drills incompletions are impacted. So how sensitive or are too we're very sensitive. Those are all important to us. However, that being said profile still is we're still receiving orders. We're still filling service calls. We're still support wage.

Customers in what they believe to be a stronger second half of the year.

So that that that is the good part of it all.

That's where I was going with that was more that, you know, maybe an upgraded systems or whatever for Legacy Legacy production that that is, you know the volume and they decide you know, maybe it's a multi-well field or whatever that they you know, you know shut production down. And so now, you know, your your systems might, you know an upgrade to a new or more efficient system might be either, you know, pushed aside or might never happen. I guess that's that's kind of where I was going with with that. We we probably should we look at more in the deferral burner management technology. We don't see it reverting back to five years ago or six seven eight years ago to where I am back to Reagan stick methodology. We we think that it is more of a deferral similar to the way we look at Ducks. It's a deferral opportunity for profire.

Okay, and my my follow-up question was with regards to you know in the past you've talked about opportunities in Capital Management Systems in nine oil and gas markets, and was wondering if you might be able to give us some insights on any progress on that front realizing that everybody's kind of scrambling right now these these other Industries and what not, and maybe not a top priority for them at this point, but if you could maybe give us your comments on that be great. Thank you.

Sure. Yes. Yeah your business development effort. Yeah. Can you speak to that you bet have obviously profire strategy has been to page our strengths which is in oil and gas combustion related products and services. We have last year was a banner year really when it came to dabble in some industrial dryers some agricultural dryers with our core product. They are they are areas that we may have worked with our sales team to to be able to look to the hey, you've got the opportunities that we've had this case study. It's worked. It's it's it's it's a good product for that for that application. We have not dedicated at this point specific business development team members to it. However, we do have business development team members who are focusing on Research Thursday.

John other areas not so much right out of oil and gas. We we believe but leveraging our existing sales team and service team as most we can as is prudent as smart, especially given where we're at right now, but we're not saying no to those things, but they definitely have taken a little bit of a back seat now to just taking care of them and ensuring that we do the best we can for existing customers, but still a great potential. We have a great potential to be in our product fits. It's just bought it timing and people for sure.

Very good. Thanks. Thanks for answering my question.

Thanks. Our next question is from Samir Patel from escalating Capital. Go ahead.

Hey guys, so hey cool, two questions. The first one is you outlined a series of sort of self contradictory goals with regard to click on the one hand maximizing profitability in the near-term with some of your actions and on the other hand. It sounded like you still were eager to invest either organically or inorganically, you know, like you did through the last down. So if you could help me understand, you know, just just based on that math and in response to the earlier question, you know, seven million a quarter is kind of roughly your break-even point you were there in March, you know, it's clearly it seems with the environment having worsened that your your next quarter. Maybe the quarter after might not be at that level. So so, can you basically can you walk me through your tolerance for I guess burning cash for a little bit, you know to maintain kind of some of the investment you'd like to make or is it is it sort of a priority on being profitable at all at all expenses, even if it means cutting pretty deep into the organization, so that's the first question.

Right sure, you might imagine. It's it's not an easy thing to do all of those things all at the same time and in a very rapid downturn and decline. So overall we we want to return to profitability that is important to us. It's a key Focus for us. We need to preserve cash in order to be able to do that for the long-term. Thankfully we're coming at it from a position of strength to some degree given our balance sheet and and the fact that we don't have debt. So in the short-term, there may be some cash burning. We don't fully know what Q2 is going to hold for us or or even Q3. We're optimistic that things start to turn around early in the summer and with covid-19.

Things going back to normal but clearly a lot to to come into play there in that process. So we will look to make the cuts off right size our organization, but we're also not going to sacrifice the full future as well. So I I understand that these may be somewhat contradictory statements. But at the same time, we're kind of feeling our way through this we're likely in Q2 probably going to burn a little bit of cash as you said things will be down a little bit further down. But our ultimate goal is to preserve the future to preserve cash and to return to profitability and hopefully take advantage of some opportunities along the way front and well sure. That's that's perfect.

Yeah, no.

I'm sorry, if that sounded aggressive. I was just I was just trying to understand the trade-off. Obviously I support, you know, all the decisions you guys are making a second question was with regards. You mentioned the signing of six International Distributors and no one's asked about that. I thought I'd ask about that. Can you maybe talk about a little bit of background on the size of those markets and who those Distributors are and what the growth potential of those markets might be in sort of like normal environment. Our goal was three last year. We wanted to have a presence in a stronger presence in South America. We brought on a partner that's representing Us in Argentina Uruguay and Bolivia and until de until the last few months weeks here with the news in Argentina. We thought Argentina might be a really strong market for profile still might be obviously covid-19.

Cantina at we had to rescue to get out of there. Otherwise, they might still be there as Holly international flights out of Buenos Aires had been canceled but we had a at 1.15 different meetings booked with emps in that area. So in terms of the market potential we know that we already have hundreds of rollers in that market what is available will a lot will depend on retrofit programs. So availability of of Catholics and and drilling programs. So South America was a month for us. We also wanted to get in to the South or to the Africa Market part of Amina North Africa there. So we do have a partner that is I am which does a lot of business in Ghana Nigeria Mozambique Tanzania, and we think they'll be a good partner and then parts of the Dead.

Ukraine Belarus an average Azerbaijan. I've got to say all these words, but that's we wanted to get in there goes with a and then of course the Middle East oil. We know that Saudi aramco uses profire products. They they've got them historically through just a bunch of OEM throughout the United States. We now have an official partner who has a bricks-and-mortar and boots on the ground in that area. Unfortunately the Middle East always sounds wonderful. The the hard part is the crew comes out of the ground almost ready to go off. They don't have a lot of heating per well needs. However, they're big facilities there dehydration facilities. They Pro fires is can be found there. So wage there's a good thing. We'd rather have it be in places like the DJ or the Northeast though and then we have our partner in Brazil and we continue actually we believe that will be able to add a perhaps

two or three more International Partners this year strategically in in India and perhaps in

Australia New Zealand area

so that that's where we're at this year. We really believe that this year could be one of those instead of just talking about it and planting seeds to see some Harvest obviously covid-19 slowing that down a bit off.

Understood. Thanks for the call. I appreciate it guys. Thanks, man.

again, if you have a question, please press * then 1

Further questions in our queue. I'd like to hand the call back to mister hack for closing remarks.

Oh, thanks. We have a question. I'm sorry. The question is from Dick Sargent from Financial. Go ahead. I did you ever wonder how are you today? Good day just to clarify. I'm calling to say thank you and to give you hope I'm eighty-six. I've been with Dean I started with Dean Witter in 1962 and I live at below two bucks. I mean this is where the money's made and perfect and what I wanted and let you know is one.

After watching it for a while. I was the bulk buyer on Monday. It's a 73 and it's the thing. That stunned me is I always start by looking at long-term charge and get a feel for it. But then when I saw the balance sheet it absolutely blew me away. You guys are super and I'm I'm extremely excited about the prospects. You've really given the investing World a great product. And so, you know, my whole world is percentages. I don't care what it is and so a two box on fire. I'm up that's a triple for me.

And that's what it's all about. There's a there's a great great situation and I just wanted to call and say how pleased I am with what you've done and I had this thing looks and sometime when you're free for lunch. I'm over in Denver, but it's worth it to me. They just drive over and have lunch with you know fly over and have lunch with you. I I really like the way our operating and so that's it. I've got great expectations already got orders in to buy a little more on a dip, but it off that's all I wanted to say is I'm I'm excited. I think you got something.

Terrific and so that's basically it all I had to say was thank you very much and congratulations.

Well, thank you Jake. That's very very kind of you. And that lunch sounds really good. That's one thing that's happened during covid-19 have really learned to eat more. So so we gave him a good lunch anytime. All right. Thank you. Keep that one open and Dick Sargent will give you a call and come over and see I'd like to do that. Thank you, and keep up the good work at school. And so that's all I got to say. I'm just thrilled see bye-bye.

Hey now, there's no further questions in the queue. I'd like to hand the call back to mister hack for closing remarks. Thanks everybody for joining us on our call today to discuss the first quarter of the Year. We'd like to thank all of you for your continued support of as always. We're available for any discussions or questions. You might have in the future of the economy gradually re-opens over these coming weeks and months. We look forward to meeting many of you at various investor conferences and so on.

As as things return to normal, so thank you. Have a great day everyone.

Again, I'd like to remind everyone that this call will be available for replay through May 21st, 2020 starting later this evening the other link provided in yesterday, press release and the investor section of the company's website. Thank you. Ladies and gentlemen for joining us today. You may now disconnect.