Q2 2020 Flotek Industries Inc Earnings Call
[music].
And to our participants presently standing by for today's Flotek Conference call. At this time are spending additional colors and we hope to be getting underway and just the next couple of minutes. We thank you all for your participation as well as your patience and we ask that you. Please continue just standby.
Oh.
[music].
Please standby we're about to begin.
Ladies and gentleman greetings and welcome to Flotek Industries second quarter 2020 earnings Conference call. At this time, all participants are in listen only mode and a question and answer session will follow management's prepared remarks, if anyone should require operator assistance during today's conference separate press.
Our zero on your telephone keypad as a reminder, today's meeting is being recorded it has now my pleasure to introduce Danielle Alan Senior Vice President and Chief of staff for Flotek Welcome Danielle Good morning.
Thank you and good morning, everyone. We appreciate your participation joining me today and participate on the call our John Gibson.
Chairman Chief Executive Officer in President, Michael Gorton, Chief Financial Officer, taping quite president of global business and rightly So president of chemistry technologies.
On today's call will first provide prepared remarks concerning our business and results for the quarter. Following that we will answer any questions you may have.
Yesterday, we released our earnings announcement for the second quarter, which is available on our website.
Please now we have also posted supplemental presentation on our website.
Today's call is being webcast a replay will also be available on our website.
Please note the any comments, we make on today's call regarding projections or expectations for future events are forward looking statement.
We're looking statements are subject to a number of risks and uncertainties many of which are beyond our control.
These risks and uncertainties can cause actual results to differ materially from our current expectation, we advise listeners to review our earnings release and the risk factors discussed in our filings with the FCC.
Also please refer to our reconciliations provided in our earnings press release as management May discuss non-GAAP metrics on this call with that I will now I'll turn it over to John.
Thanks, very much that ill.
As we face these extraordinary ties together as a company and as a country I'm extremely grateful to our employees for their work ethic permit but can do ingenuity.
They are causing the safety of our employees customers and the communities, where we work is our top priority and we continue to focus on providing a safe working environment for all under very tough circumstances, we're fortunate to be optimally positioned in this market given our strong financial position with little debt at a healthy cash position.
Well thats highly focused on cost cutting it off for no real culture compromise the Palestinian highly motivated people with impeccable integrity.
Will allow us to move ahead with speed and focus these characteristics flotek for extremely important to position our company for the future assets I'd like to provide updates on our leadership team and then go into further detail on the macro environment and the actions Flotek is pacing, particularly in terms of new growth opportunities.
The management changes to one of them was the most rewarding aspect my job is identifying and developing leaders who can build a differentiated best in class business that leverage extraordinary opportunity that we have before us and we have that pay. This is a team that is off or no real who can work together to bring value to.
All of our stakeholder during one of the most challenging environments in history. So I'm excited to introduce new additions to our leadership they are helping to the position flotek for future growth.
First I'm really excited to have my board and joined as Chief Financial Officer, Mike is a strong financial and operational leader, who is highly experienced in building and accelerating growth for digital and software as a service technology companies. Another great strength of Mike is cost management, and I think that a you'll see here.
Very aligned with how this company is controlling the control.
That's we're pleased to tank bank coin joins us in the newly created roller president of the global business, where he oversees our domestic and international business development strategy for both divisions afloat that one of course key responsibilities is to accelerate the transition of JP threes, Dave is the service and open doors to new markets I really hope you'll pay.
The time to review his credential says they speak for themselves. They just by the Joy to we're paying bank always in the past as well.
At the World.
It's also a great pleasure to work with my son, Kuwait again, as we all work together the landmark and then Halliburton and I can say from experience both of them are battle tested and their track records or impactful.
So I'm thrilled to announce the promotion ABR honestly also the newly created role as president of the chemistry technologies Fine with most recently senior Vice President operations that have any and all the time I've known right I've witnessed this determined leadership relentless focus on operational excellence and profitability as well as his deep knowledge of Flotek speciality.
He chemistry and has a Phd in chemistry as well the one thing that I should say a body to his tremendous passion for his employees and he's been continuously getting up to the facilities invest in with the people. During this time and demonstrate the leadership on the ground I really appreciate rod is truly an asset light a full color.
That's visibility to lead our chemistry technology segment.
I'm happy to introduce each of them to you in their new roles and you'll be hearing directly from them in the call. They round out a very strong management pay.
Well actually an important development on our board. This morning, we announced at Harsha God. He has joined Flotek as director at chair of our compensation Committee. He brings incredible experience gained from serving as a senior executive a fortune 50 companies and marquee global brands like Crawford and company Friendly's Ice Cream Corporation searches.
Chicken and it's a little seizures enterprises my favorite of course with Crystal growing up in the south or there are several of us here that.
We hope that it can introduce us there.
Which every good southern boy, those a really really well, perhaps not well known to somebody on the west.
But he synergetic kind of passionate later, who care deeply about the competition organizations with which is fairly I did we launched our sanitizer business, we're really grateful for his depth of knowledge.
In that market and the insights and relationships within key market segments, who need. These high quality products are we we look forward to leveraging that network from for Marcia.
Now, let's let's go to probably the least plays a part of anybody's fall off this quarter and that's the macro environment.
Ralph this earning season, you've undoubtedly heard about the extraordinary challenges at the oil and gas market as experienced resulting from demand destruction do response by governments to covert night pain, and and oversupply in the market, which was exacerbated by the Saudi Russia Price War, which same price is free fall the levels off we're saying with gasoline demand by.
Falling by approximately 45% April U.S. refinery utilization dropping below 70% caused by a sharp reductions in travel and by early may operators announcing budget reductions more than 40% sunsetting, even more dramatically I'm not spend too much time, telling you what you already know, but it was an incredible.
Lee difficult quarter, one of the most challenging said I've witnessed in my career.
However in this environment.
Yes seek out opportunities for improvement and control what you can control and that's been our things focus we were we're certainly not immune to the macro environment conditions in to the challenge is added back open. However, we're adapting to our customers needs by focusing on areas to diversify our business away from rig count.
Drill bit capturing distinctive opportunities in the digital transformation of the energy industry and leveraging our strong speciality chemical.
Capabilities to produce F.D.A. Register high quality, Sanitizers and surface cleaners, most of which are complimentary to floteks industry, leading chemistry applications and our permanently domestically sourced supply for these needed products.
Good idea and the cost measures I'd like to address as well as we position ourselves for the future. We've also taken quick and decisive actions guided by our strategic pillars to preserve our liquidity and financial flexibility with a healthy balance sheet with little debt outstanding they've been disciplined on our approach to our capital allocation back we've evaluate.
It's several inorganic opportunities over the past several months and we've passed all multiple acquisition opportunities that looked appealing and were complimentary to our business, but would have required us to take on additional debt in some cases substantial but would pass on all of the and then hindsight that seems to be the right.
Decision.
We continue to take further steps to strengthen our balance sheet position and it's called out numerous initiatives ranging from a reduction in workforce the lowering compensation to cutting back discretionary spending. In addition, we're focused on inventory rationalization and believe we will have opportunities to improve our liquidity as we go forward Mike will provide.
A more detailed discussion on liquidity shortly.
Digital transformation.
Hi, This is a topic you see in almost every research report energy customers are increasingly listening to access actionable real time data and insights does have an impactful business outcome, which really is the euphemism for improved profitability as noted in the recent in depth study by Evercore from June 2020, Hell digital transformation more than.
90% of energy Executive survey believed that technology and digital transformation will play a critical role and improving their profitability providing cost savings and they are noted this key drivers for adoption to improve their business with our recent acquisition of JP three an innovative data technology company, we're helping our customers access.
Celebrate their digital transformation through real time composition evaluation data necessary to manage crude oil and natural gas processing in the digitally.
The acquisition of JP, three provides compelling strategic and financial benefits as it diversifies biotech business across all segments of the hydrocarbon value chain from the wellhead refined products terminals.
As we talked about at the time of purchase JP, three is saying to 58% CAGR over the past four years and it helps to insulate us from the volatility of rig count. However, it has not been immune to the challenging market conditions, particularly sharp decline seen and refine fuel product demand as a result. This top line revenue was significantly impacted in Q2.
Bob near halt of its clients capital spending despite the difficult market conditions JP three is maintaining its customer base, winning both repeat business from existing customers and securing several orders from new customers. We are confident that there's a strong market need for J C. She needs data offerings given that they done.
From royalty that we have and are confident that is oil and gas man ramps up we expect to see a corresponding rebound and our sales.
The key reasons why recruited coy I'm going to turn it over to him to share more about the growth opportunities here both it great pleasure to introduce you to paint Bancorp President of global business. Thanks, John. Thank you John It's a great measure to be here and do what we join again I've been involved in digital solutions can be all then getting this.
People, what 30 years in for the boss venue I was leading a company that helped midstream oil and gas companies enhance their business operations through digital transformation.
The GP three we have a unique and differentiated game changing technology that I believe will transform the oil and gas companies to the continuous collection and analysis, we saw real time data.
Gbpthree hundred 22, Pappan. Please I noticed it seems to have been spending.
He is joining about a month ago I have had the opportunity you speak to several existing customers and also a number of potential customers. Yeah responses have been overwhelming reposted nobody would use cases that gbpthree technology has been applied created significant value for customers. One example of picture value creation.
It's a reduction of refined products can make full pipeline and terminal operators.
We should we have.
Themes and find a data and as the Soviets cooperation agreement with <unk>.
As part of this agreement, we will jointly marketing pitch services to all the refined fuels transportation operated.
But it's a big that's already started the ball rolling on this operation and as they reach meetings, it's definitely refined fuel pipeline operators.
Great to have our customers are.
Selling far I think that's a testimony to the value that our technology delivered.
Examples of use cases and good.
Crude blending and competition tracking email competition tracking enhancing all screen capabilities to meshes fuel to meet the need for natural gas custody transfer requirements and to support our customers U.S.G. assets.
As we have previously discussed GP trees focused in the Boston has been in the North American market.
These coming on board about five weeks ago, when it's pathetic barring growth in the international market.
We had significant interest in GP treats highly differentiated technology from several countries in Middle East Africa, and Asia conducted presentations deduced companies, including did a largest oil and gas company in middle East and one of the largest guests by mine operated in India.
Yes, taking actions to address exports and other regulatory compliance, including international standards syndication and should at JP, three technology will be ready to be launch internationally in 2021.
Excited there lots of opportunities to take this business to a different level and the total addressable market. It's a huge with that open the call or what the Ryan who will discuss our other growth engine.
Thank you good.
I'm pleased to announce to launch a flow takes lines, but if da quality sanitizers and disinfect as for industrial and personal consumer applications.
Our initial elfers were cultivated as result of community outreach that began to first quarter. When we started producing a donating sanitizer to local communities first responders hospitals schools homeless shelters and senior residential communities.
Subsequently, we recognize the opportunity to diversify our revenue stream into rejuvenated high growth potential market, which is a natural extension the rest specialty chemistry experience.
This enabled us to leverage our chemical production capabilities and maximize utilization of our existing facilities.
In Q2, we launched and are actively selling FD registers sanitizer products into multiple markets, including hospitals and medical facilities, the travel and hospitality industry Booz services E Commerce in retail sports entertainment and other industrial and consumer markets.
In order to develop this business, we applied or existing competitive advantages of innovating and delivering differentiated chemistries or ISO certified manufacturing capabilities are strong supply chain management efficient production capacity in an R&D footprint that is highly respected in energy and chemistry business.
Applying our technical abilities in R&D skills, we're able to offer high quality if da registered products.
And as you know more than 100 hand, sanitizers are being pulled from the market due to regulatory violations at the FDA is directive quality is more important than ever if you want to be a long term major player in this market.
Flotek offers high quality American made products to stand out in the marketplace. The active components that make up our sanitizer, our pharmaceutical grade at our source here in the United States, our liquid NGL products, our formulated into Houston and blended our facilities in Texas and Oklahoma.
Given the flexibility of our business model, we've been able to quickly pivot our manufacturing operations by leveraging the exact same chemistry and facilities, we already utilizing the energy chemistry technology business, thereby minimizing the need for entry level capital investment for such a large potential revenue opportunity.
Our sanitizer initiative exemplifies how we're adapting and reallocating resources to businesses that would drive greater returns given is low cost high margin profile.
Current assets have total blending capacity of 2.1 million gallons of specialty chemistries on a monthly basis, which includes both energy chemistry technologies and sanitizer product lines. Furthermore, the hand sanitizer market was nearly $3 billion in 2019.
Although the market saw growth of 1400% from December 2019 to February of 2020, due to covert pandemic demand market expert steel anticipate healthy marks to market growth rates and acts as a 7% even in a post kobin world and we look forward to providing additional updates as we expand our.
Sales exciting new market I'll turn it back to John.
Right.
Although our energy focused business model has been impacted in the short term view to pause in demand related to covert night pain and fresh destruction of oil. We are confident our strategy is intact and that the initiatives that we've outlined better position our company for the future went a long term vision to have a platform that optimizes profitability all the way from the reservoir.
For the refined products final destination.
Innovative chemistry enhances the ultimate recovery reserves JP three today that creates a new dimension for profitability by measuring the injected chemistries effectiveness and by JP three joining our company. They have the capital available to them to really expand that business and grow into international markets and our new sanitizer business offers us a high growth.
Opportunity that leverages, our existing chemical production capabilities and a new market now we know that it is difficult to determine when the world will return to normal.
And given the risk of assessment way to covert cases potential lot bounced continued high levels of unemployment.
There's a lot to consider but we are preparing our team as we adapt and diversify our operations to mitigate the risk based by the oil and gas market.
And while we say that it's really exciting we do have cameras that monitor our facility and Marlow, Oklahoma and here over the last few weeks as you looked at the floor right and I were talking about the number of Fourk layoffs and the activity is picking up in the number patch for energy chemistry.
We are producing and delivering associate pretty exciting to see that even on the energy chemistry side momentum is beginning to.
Reemerge.
So our focus really is to take all of these capabilities and to build shareholder value with the goal to rapidly return to profitability by offering premium differentiated solutions to our market at this point I think it's a good opportunity to let our finance team, though that we no longer have an interim see EFO.
John Gibson, we have the real deal and the Mac and we'll turn it over to you.
Good morning, everyone. It's great to be here, it's Dave for and I'm excited about the potential of Flotek and to bring a fresh vision based on my experiencing the size and technology space.
40 speaking with our shareholders in the days ahead and understanding your perspectives.
Given our recent acquisition of JP three last quarter, we are now presenting our results in two reportable segments.
Chemistry technologies and data analytics.
The chemistry technologies segment was previously referred to as the energy Chemistry Technology segment. The now includes our recently lies sanitizer operations that Ryan just described.
The data analytics business was created in conjunction with the acquisition of JP three.
Please also note that the second quarter results only includes business operations for JP three as of May 18, 2020.
It's important to make you aware that we may need to make adjustments to our cash flow statements related to the sale of the Florida Chemical company to ATM in February 2019, and their related escrow accounts.
We are thoroughly reviewing our previously filed financial statements to see is reclassifications are needed. However, we do not anticipate at this time that there will be any impact on our earnings or cash position.
And we expect to file our 10-K around August 17, with a strong financial place team in place in a new order we are confident there will be.
So we will be able to address this issue in the most efficient manner possible.
As John previously discussed we face a challenging second quarter, driven by significant industry pressures impacting both our segments.
Let's first discuss the income statement during the second quarter consolidated revenue was 8.9 million compared to 34.7 million. During the same period last year and below first quarter of 19.4 million.
Sharp decline in revenue is largely resolved continued volatility in the macro environment for us offshore onshore drilling and completion activity impacted by the political and economic events in foreign markets.
Furthermore, code 19 impacted our productivity as a result.
Used customer demand in our service in products.
With the exception of our sanitizer operations.
Consolidated operating expenses were 11.6 million in the second quarter of 2020 down 69.5% from last years level of 38.1 million in the second quarter.
Last year.
Decline was primarily due to lower cost of sales due to reduced revenues and a reduction in freight personnel and travel and entertainment expenses.
We continue to work on the expense reductions to improve supply chain and operational efficiencies and negotiate the amendment.
To our.
Sure being contracted in February.
These actions will enable us to manage our inventory levels significantly lower going forward, resulting in additional operating efficiencies.
Corporate DNA was.
5.4 million versus 6.1 million last year due to reduction in headcount in discretionary spending and lower stock based compensation professional fees.
Our depreciation amortization expense declined 1.7 million too.
A half a million in the second quarter versus 2.1 million last year.
Research and development costs were at $1.6 billion in the second quarter down 2.1 million.
Last year.
Reported net loss from continuing operations of 9.6 billion or 14 cents loss per too early to share in the second quarter 2020, compared to a loss of 12.8 million or 22 cents.
Loss per diluted share last year.
The loss of 9.6 million include a.
Point 6 million gain on disposal of long lived assets really into buying out the remaining term of the corporate headquarters lease for significant discount as we moved all of our employees to existing Flotek Global research and innovation Center at the end of June.
Our adjusted EBITDA for the second quarter was a loss of 6.8 million, which near.
Narrowed from the loss of nine point.
4 million Q2 last year the improvement in adjusted EBITDA is primarily due to lower expenses as previously discussed.
We want to also point out that are as nearly flat versus last quarter and improving of over to 54% sequential decline in sales demonstrating our progress in driving operational efficiencies.
No we move to our balance sheet.
[noise] performance as John mentioned previously our cash position has been healthy as of June Thirtyth 2020, we had cash and close of 59.9 million versus the $80.3 million into first quarter to bridge. The gap there were four key factors that impacted our cash positions one.
And also of 25 million cash payment for the acquisition of JP three to an inflow of 6.6 billion that reflected our claim to the remaining balance of identity ESCO way too. So the Florida chemical Davies, Tim three and inflow of 4.8 million cash way to the page.
Check protection program loan as far as a care zac and for an outflow of 1 million related to the lease termination of our corporate headquarters.
We also received a 6.3 million tax refund, including interest in July way to the net operating loss carry back provision of the reducing active correct.
Now let me pass this over the call back to John for some final remarks.
Appreciate that Mike.
Got it hard to be the new guy with three days on the job and be thrown off to a call. So I appreciate you jump in here.
As we look forward there is still ongoing uncertainty around the market environment.
We do not intend to offer any guidance at this time and and hopefully not in the future well.
Last quarter. However, we did discuss our intent to be breakeven this fiscal year, which is based on our best estimates that time, given the prolonged impact of a pandemic in the near halting capital spending in the energy sector. We now believe that achieving breakeven during the physical years kind of be increasingly unlikely. So it is still.
Our goal.
We remain incredibly off for Nuriel and agile as we pivoted our strategy towards growth oriented businesses, while leveraging the strength of our differentiated business model and our financial flexibility.
In closing I'd like to thank everyone for joining us on earnings call today, and I do want to particularly thank our finance team.
The Alon and can Misty and I mean, they have savy have really been troopers here working with me and have given us they're all I just want to particularly call him out site bags.
In a challenging period for us and for the industry given the unprecedented volatile market conditions will take a swift actions to adapt to the environment focus our business and as a really grow our top line enhance our profitability. Furthermore, we've been aggressively cost setting to mitigate the decline in margins and position us to succeed in the future and I Hope you took better.
Slide from Mikes comments as to how much of our EBITDA, we retain even with tremendous drop in revenue. We remain excited about a recent acquisitions JP three and that will help accelerate our digital transformation strategy complimentary are caught chemistry applications business are now foot today to build a premium growth.
Sanitizer operation exemplifies how we are naturally extending our core business to growth areas. We believe these two growth initiatives will position our company for market share gains and provide a bright future for the Kathy. We appreciate the support of our shareholders. We love working for you we thank our employees and partners for their hard work.
As we navigate through this crisis, we continue to well to update you as we move forward and we will be continuously finding our growth initiatives and cost and Tom with that then ill now turn it back end lets take some questions.
Excellent. Thank you for your remarks today, gentlemen tour audience. If you would like to ask alive question over your telephone line simply press Star then one on your telephone keypad pressing star in one place your line into UQM, We will take your questions wanted to time and.
Also a friendly reminder, that if you're joining today honest speakerphone. Please return to your handset prior to pressing star and one.
Certain that Youre signal does recharter equipment once again, ladies and gentlemen that is star then one you would like to ask a question gentlemen will take just a few seconds to give everyone tries to signal.
Well take our first question. This morning from Daniel Burke at Johnson Rice. Please go ahead.
Yeah, Good morning, guys.
Good morning, Daniel.
Oh, let's see John.
I understand visibilities not not great at this point and recognized.
Okay. Given guidance is a challenge and can you address that directly but still we look at Q3 completion activities ticking up your new initiatives.
I would imagine will make some into incremental contribution.
Is there any reason not to think that top line should should be up sequentially in Q3.
Well I get up everyday with a prayer from top line to be larger every quarter from here going forward and and.
Don't really intend to give any guidance, but there would be no reason to believe that we're not going to be well positioned in the market as it recovers and so coin is working hard on of JP three front I think some of the biggest opportunities there for us our international as he highlighted there's a lot of regulatory work and that name.
To be done for us to sell those internationally to include registration and HCM numbers and other technical activities need to be done, but we are on that path right now Nick Big names here with us and working on the legal aspects.
Ryan and the sanitizer business. The the demand there is strong and we continue to see opportunity there. So.
That was a reasonably fourth quarter, so I'm happy to set the bar there side that we should be above that but thats about all the guidance I'd give you Daniel on that.
Understood I think I think I think that's helpful as recap.
So 2.1 million gallons of gallons a month of a blending capacity across chemistry can you talk about what you're maybe your utilization is now and maybe what utilization was like against that capacity over you know maybe up a trailing two or three year perspective, just to give this takes back to a time when when the.
If you Mark it was a bit more healthy.
Well ill end of the market was a lot healthier you'd probably seen us utilizing a lot more of the capacity than we are now were little reluctant to give the capacity number the utilization number Daniel Daniel because.
We are.
Entering a new market and we really don't want our competitors to know how much we can produce and at what margin and die because we do think theres. Some competitive strategy is there in the sanitizer business emerging we're trying to learn but in the past.
It probably had with capabilities will probably as much as 30% greater but the way that we increased capacity now is really really sample.
The capacity were stating is an eight hour day and so if you can take a look at our facilities and assume that they could be run 24 hours a day, probably with maintenance and other things calculated then on about 24 hour day, we could probably hit somewhere in the mid Seventys for total utilization of those facilities.
In a perfect market and I'm, hoping that coined and Ryan can drive us towards to complete utilization on a 24 hour period, but right now we're just quoting an eight hour day.
Carlo Waller facility capacity number and hope we can start talking about how we're expanding beyond eight hours is as the markets improve.
Got it that that's that's helpful.
And then maybe last one just on JP three good to see the progression in the initiative with Phillips 66 as highlighted the press release this morning.
Can you can you talk about just sort of it was touched on the comments, but that's sort of next steps here I mean is it's Phillips 66, though the logical first customer. It. So you know when do we see that conversion, perhaps are already a customer decent size, but just wanted understand a little better the timeline from this point forward there.
I would be I'm going to turn it over let coil and Matt jump in here, but I'll start out by saying, we're pretty excited we're gonna go look at a new E.S.G. So.
Solution associated with JP, three where we're trying to add to add the ability with a third party sensor to look at C. O two and half customers coming in this week to look at that we think that debt that DSG market at sort of bolted on to where we are is gonna be tremendous for us and match modifying the desktops.
That we can really sort of provide all of that I think it's already a pretty good shape, but a coin. So how do you see that open up.
The so we're going to six six de have implemented that technology across all year refined fuels pipelines and terminals and they see the significant value and that's why we believe the a and this partnership there were embarking.
We have started to line up customers for us to present jointly present in fact, the first one will present on Monday next week the first.
Customer that they would line up into a few items that are any of the lining up this fall the lining up this meetings, we've seen your level of this customer locations. So that's been pretty excited about this and then having a customer.
Being testimony to the value that we deliver and being able to be same joining me of events to other customers.
Okay, great. Thank you guys I appreciate the comments I'll leave it there.
Thank you.
Daniel Thank you for your question.
Next we'll hear from parents, where gold from Firestorm capital and as a reminder, ladies and gentlemen that is gonna be star and one on your telephone keypad. If you would like to ask alive question. Mr. Swagel Good morning.
Hi, Good morning, Eric struggled here.
John on behalf of the shareholders. Thanks for taking your machete to the cost structure of Flotek.
I'm doing exactly what you said you were going to do when you came in and took the job.
Thanks also today for introducing us to the team is new as they are it's nice to hear from some of the new people I've got two questions. The first is can you give us some idea.
The size of the other wells that we got on on Floteks balance sheet, because it seems like when you returned to profitability it could be a very long time before we're paying any taxes.
My question, Jeff Fab.
Yeah. Good morning, so as we talked about earlier, we had roughly around a little over 49th into last year, we use some of that to get a nice cash inflow back from the federal government.
We received that in July.
We also think so it's around 43 net after that and then we think we're generating about the same through the first six months of the year. So we're probably over 80, we don't actually looking at greater detail, yet, but we're probably in 80 million range today.
So you know we didn't bring it all you have over a dollar share in anywhere else.
That's pretty close.
And we did bring it down a little bit by taking advantage of carrier SAGD and going back and collecting that $6 million there great, but I think that was appropriate thing do.
A in the second question is respected JP three.
And this new data as a service business just as a segment this nude and new to me and probably knew to most of us to shareholders and I'm wondering.
Is it contemplated as GP three really a platform for further acquisitions in the data as a service business or is this a one off.
Uh huh.
It's a great question and we bought it because we thought it was a platform there analytics and how they look at crude and crude analysis. It's the transformation of the energy industry from using gravity as a measurement to using composition as a measurement and it's there's so many different avenues of that that.
Available to us Eric So if I'm a refiner one of the most important things that I do is maintaining consistency of.
Feedstock coming in it so who do I bought from and how do I blame that so that I have continuous feedstock and so the whole the upstream side of the business and and how they can figure that that buying is exciting and.
How we could participate in that the E.S.G. component, it's really exciting to us a analyzing a minor components that are costly to them and the refinery and working on automation and robotics as I said based on that data. So we're looking at a lot of different companies, we just need to.
It's a bit to be honest, what I'd like to focus on at the moment would be making JP, three really profitable and and winning some of the accounts that we thank our our eminently the possible here between now and the first of the year, particularly on the internationalization side and on the satisfied for business I think Ryan It's just doing an outstanding job there so.
I do think gets a an acquisition opportunity in sanitizers, just or straight growth engine for us.
But it also has new product placement or not too.
Great.
And then if I could throw in one worth third question, even though I always said too.
The executive compensation for yourself and the rest of the team appears to be a big pay off at $7, which is four and a half times, where the current share prices can you give us a little bit into your thinking of having such a.
Yeah, there's such a shareholder friendly.
Executive comp structure, where you've got to make a ton of money for all of US before you guys really make good money for yourselves.
Well I'll reverse or the bit and say, how you don't keep us all together after we hit seven Erica.
[laughter] I'd give you some idea the confidence so the people I have in the room here, where we're beginning to talk about what are we do after we get to seven.
Right I mean, we're clearly focused on that because that's higher compensation.
Program reward just.
And so yeah, I think the thing that I'd like to say about the culture. This company is high integrity highly focused on shareholder value creation and it we're trying to do that through everything that we do.
And customer satisfaction is what drives that we won't customers that are absolutely delighted and and that rolls over into our new business line with Sanitizers well I think we got to attain that does it cost I mean, Mike is a is that cost cutting machine to hand, and creating value. So he I think it's one thing to take cost out.
It's another thing to keep it out and so having a financial leadership that can help us sustain that I think is critical as we go forward, but but pretty pretty excited about the whole of the pain.
And we're getting there we've still got a few historical issues to work out that we noted in the press release, but you know thanks. It happened 18 months ago I'm, hoping my can attain can manage those and that'll allow us to focus really on the growth and get the that seven bucks a share.
All right go get them guys. Thanks.
Thank you.
Ladies and gentlemen, thank you for your questions today gentlemen, we have no further questions from the audience I'll turn it back to our leadership team for any additional or closing remarks.
Well you know I just want to thank all lobby for joining us on the call.
I really look 40 hearing more from Ryan his ability to manage logistics.
And supply chain in order for us to create a new business and really create or really profitable new business. It's just been outstanding and I think the more you listen to join the more comp that you'll get I think you more confident you'll get a coin and Matt as we go forward on the JP three side.
As well the whole tranche makes opportunity, which is kind of a piece of jargon for most people that all shares but it's multiple products on a product line back to back. So you have diesel then you have gasoline then you have jet fuel and it's how do you make sure you don't have mixing on that and measuring it in seconds instead of hours and so I mean it.
It's a it's a real opportunity to keep them from losing money as a result of allowing too much mixing and show that such a direct profit generator for our customers.
Our actually pay business, we are beginning to get started back on on the rigs and that's pretty exciting as are our core customers go back to work.
And we work towards the diversification of our customer base. There. There's just a lot of good things going on and I appreciate you gosh.
I want to cherish sand supporting us and we really enjoy working for you with that I'll just say, thank you and we'll see you soon.
Ladies and gentlemen, this does conclude today's session. We thank you all for your participation you may now disconnect your lines and we hope that you enjoy the rest of your day.
[noise] Oh.
[noise] [noise].
[noise].