Q3 2020 RigNet Inc Earnings Call
We've already added 2 million to the ESI backlog in October in there's a significant amount of potential work in the pipeline waiting for customers to issue awards we.
We believe we will begin to see that in the first half of 2021.
In fact, a recent article in upstream online states that there are 72 final investment decisions can mpcs that are expected to be reached in 2020, one with an aggregate value of $44 billion to $45 billion up from an expected level of 17 Bill.
In dollars and Twentytwenty.
Of course, the communications parts of these projects are a fraction of the total amount.
But they still represent significant opportunity in the overall project growth rate should correlate with the communication systems market, we serve through our site business.
To give you an idea of the magnitude of the pipeline, we have over $100 million of contract value for projects, we're bidding on in Qatar alone.
And in terms of the total rig pipeline. We're also pursuing a number of opportunities in the government sector. Both domestically and internationally that include Mcs apps and cyber security projects, along with many opportunities in our core oil and gas markets.
Our team has continued to do yeoman's work and tightly managing operating costs and back office costs, while maintaining capital spending discipline.
All with a focus on ensuring the balance sheet remains healthy.
At September Thirtyth, our leverage ratio was 2.97, well below our 3.25 covenant.
Debt covenant steps down to 3.0 at year end and we expect to remain in compliance.
In spite of challenges in the energy market.
In reiterating that we don't provide formal guidance I can tell you that the important wins, we've recently announced and that I talked about today combined with our opportunity pipeline have given us confidence that our revenue and adjusted EBITDA performance in Twentytwenty, one will be above what we expect to deliver for.
Full year 2020.
Before I hand, it over to Lee I want to thank to global Rignet team for everything you're doing to drive results and customer satisfaction in our business EBITDA.
You've adapted remarkably well to remote work environments continue to deliver service excellence to our customers have come up with creative solutions for things like virtual factory acceptance test and software applications for machine learning and our.
Our team has worked almost 1 million hours this year with no recordable or lost time incidents.
We're very proud of and thankful for all of you.
With that let me actually to make some comments on the number on the numbers late.
Thanks, Steve and I hope our listeners are all staying safe and healthy during these difficult times.
Let me start with a recap of third quarter results at a high level ill provide some additional details at the segment level and then I will conclude with some comments on the balance sheet and liquidity.
Some of the figures are available on slide six of the investor deck and to keep things simpler. This time not throughout two pretty comparison that you today I'm going to focus on sequential comparisons to the second quarter of 2020, but again you can see some of the year on year comparisons in the press release and Investor deck.
Consolidated quarterly revenue for the third quarter was $48.7 million, a decrease of 9% from $53.4 million in the second quarter of 2020.
The revenue decline was across all segments as we saw a reduction in site count in Mcs a decrease in as high as a result of timing of projects and a decrease from lower bandwidth usage in higher Ti in the apps and I are key segments.
Net loss attributable to common stockholders in the third quarter of 2020, with approximately $5.5 million or 25 cents per share, including the non cash impairment of certain intangible assets.
Ill touch on that in a few minutes. Excluding this impairment charge results in the third quarter 2020 were a loss of $1.7 million or eight cents per share. This.
This compares to a net loss of $4.3 million or 21 cents per share in the second quarter of 2020.
Let's move on to the segments.
Managed communications services revenue was $31.9 billion for the quarter compared to $34.1 billion in the prior quarter. This.
The 6.4 decrease from the second quarter 2020 was driven by lower site count and delays in new sites coming online.
Segment gross margin in Threeq, you 20 was up more than 600 basis points from 32.7% in the second quarter.
238.9% as we began to really benefit from the good work, our engineering and procurement teams have been doing to help reduce some of our network costs.
Given the current environment it shouldn't be much of a surprise that our Mcs site count for the third quarter of 2020 was down a bit compared to the previous quarter.
At 11 90 on September Thirtyth, we were lower by 39 compared to the second quarter 80.
18 of those sites for offshore drilling rigs and of those 10 were jackups and with customers in Mexico. We are drilling activity has generally been pretty anemic.
The good news is that we don't believe we've lost any material customers and may get some sites back as activity begins to pick up again.
Offshore production sites actually increased by 16 comparatively quarter over quarter and of those sites 14, where in the us Gulf of Mexico, where we had seen a decline last quarter when oil prices dropped and storage was essentially full.
Finally, other sites decreased a net 45, which was mostly a combination of us and international land activity.
These are relatively low ARPU site for us and don't have a significant impact on overall revenues you can see this on slide nine of the investor deck.
Finally look at slide 10 of the deck, we continued to enjoy significant market share among jackups and an increasing share with floaters, which we expect to expand as new sites come online.
Absent Aiotv revenue was $8.4 million for the quarter down 5% compared to $8.8 million in the prior quarter.
Ill break down a little bit more detail.
And I are the key revenue on bandwidth usage was down slightly compared to Twoq 2000.
We also saw some lower equipment sales in the third quarter compared to the second in Iowa.
It apps, our apps revenue decreased slightly quarter over quarter based on reduced activity.
However, apps revenue increased year on year, even in this challenging environment as intelli ramped up across a number of customers specifically in Kelly's Threeq Q 20 revenue was up an impressive 20% relative to Threeq 19.
And for the first time App said, the lion's share of the segment revenue as it took 52% of the split in Q3 20 compared to 48% and Aiotv.
We continue to project that this segment will be increasingly levered towards apps in the future.
Systems integration revenue for the quarter was $8.4 million down 19.5% from $10.5 million into Q 20, as we always remind investors ESI revenues are tied to our progress on projects and so revenue and costs are sometimes uneven.
In Q3 as in Q2, we made some good progress on our projects as site work and removed the factory acceptance testing continued despite more strict COVID-19 protocols being in place back.
Backlog in the business declined to 12.4 million as of September Thirtyth from $15.9 million in the prior quarter, but its Steve noticed noted we believe that once customers begin moving ahead with project Awards, we will we will see a healthy replenishment of the backlog.
Gross margin for ESI decreased to 15.8% from 28.4% in the prior quarter impacted by timing and productivity on certain projects compared to the prior quarter.
As I mentioned earlier, we recognized a non cash impairment on certain intangible assets of $3.8 million in the third quarter as a result of the carrying value of those assets be in excess of the fair value as a result of market conditions.
As DNA expenses were $11.6 million in Threeq eutwenty.
Down slightly compared to 11.7 million in Twoq 2004.
We're continuing to hold the line on costs with with everyone in the organization contributing to our ongoing strong performance.
We're also keeping capital expenditures to a minimum.
For the three months ended September Thirtyth.
Capex totaled $2.0 million compared to $3.1 million in Twoq 2000.
As of September Thirtyth accrued capital expenditures were about $600000 compared to $700000 as of June 2030.
After accounting for these accrual capital expenditures on a cash basis were $2.1 million for Threeq 2020.
Third quarter Capex was substantially composed of success based commitments and capitalized labor.
On slide 26 of the Investor deck, you can see the breakdown of year to date capital spending which includes $6.3 million of success based spending $2.3 million of capitalized labor and internal use expenditures at about $100000 of maintenance we.
We will see Capex tick up a bit in the fourth quarter as we begin to purchase equipment related to the two big wins, Steve discussed.
During the quarter, we generated about $1.3 million of free cash flow after making our principal and interest payments. This is down about $600000 from $1.9 million in the second quarter.
As a reminder, we calculate this by starting with adjusted EBITDA and subtracting cash Capex cash taxes, other cash add backs and principal and interest look.
Looking at Unlevered cash flows or adjusted EBITDA less capex, we decreased to $5.5 million in the third quarter.
Down from 6.6 million in the second quarter of 2020 with lower adjusted EBITDA offsetting lower capex.
With respect to the balance sheet you can see some of the details on page 27.
As of September Thirtyth cash was $16.9 million up $1.3 million from June Thirtyth.
Our outstanding debt was $109 million, including both current and long term down about $6 million from June Thirtyth.
At quarter end, our consolidated leverage ratio as defined in the credit facility was 2.97 versus our cap of 3.25 and as a reminder, if thats on a gross debt basis with the terms defined in the credit agreement.
Also as we show on Slide 27, our long term debt includes the $6.3 million Paycheck protection plan the loan proceeds, which we have used for payroll costs as defined under the program.
In September we obtained a waiver from our banks to exclude this amount from our covenant calculations.
Through the sooner of forgiveness or 323 31 21.
Unfortunately, the process for actually filing forgiveness has continued to extend as a result of ongoing tweaks to the program being made by the SBA.
So we're waiting to file our forgiveness application and we'll do that as soon as possible and while we cannot offer guarantees we do anticipate obtaining full forgiveness for the maximum amount removing this amount from our long term debt.
If the process continues to push to the right. We expect that we will be able to extend that waiver.
And with that Andrew I think we are ready to open it up for some questions.
We will now begin the question and answer session to ask.
Any question you May Press Star then one.
On your Touchtone phone, if youre using a speakerphone please pick up your handset before pressing the keys.
If at any time. Your question has been addressed and you would like to withdraw your question.
Please press Star then soon.
At this time, we will pause momentarily to assemble our roster.
First question comes from Allen Klee of National Securities Corporation. Please go ahead.
Hello.
Starting with your managed communications services.
The new the new Sps so contract that you announced in October.
Can you.
And I just want to confirm this this is not the existing information that you've had on your previous presentation related to Petrobras.
This is something in addition to that.
And.
It seems like the intensity of use for the F. Dsos Macy's to you.
Now to get paid for them as is.
Kind of the most attractive cooked.
I just wanted to confirm that also thank you.
Hey, Alan that said its Steve Yes. This is a custom this is not stem Petrobras. It is a it is a different customer.
Where where we'd have to said this additional land.
And indeed, the ARPU was on its dsos tend to be the best in our industry in our portfolio. So we're very pleased with what we've been able to do to let to grow share in that market in day. We intent. We continue to focus intensely on that market with a view that that market is is an ideal mark.
But for a number of the apps in our portfolio portfolio as well.
If you look at the managed communications segment, you were able to grow your gross margin.
What's your gross margins were.
Percentage sequentially, despite a lower.
Site count and revenue can you explain and I'm, assuming some of that is.
What you talked about last quarter of lower.
Lower bandwidth costs or network costs, but could you maybe go into what's been behind the improved margin is that may be sustainable.
Yes, yes, maybe I will start in the in Lee Please leave or interrupt. Please. Please supplement its itself, it's largely do indeed to our teams have done, particularly our engineering procurement teams to let to work to get cost out of the network side of the business.
And so in a very very very pleased with that.
Now the team has executed related to cost of goods sold.
In managed communication services.
Yes, Alan this is Lee good morning.
The procurement team the engineering folks are spending a significant amount of time.
Examining all of the circuits in the system looking at all of the the.
The bandwidth contracts in dialogue with our bandwidth providers and and have had very good success in turning off some circuits that.
We're no longer active but also in.
Getting concessions from our bandwidth providers.
Working with us in a spirit of partnership to to help turn down some of the costs for us when sites go dark.
Since then our this is general.
This is parallel I'll add to that also in that.
Not only are we doing a great job of managing costs and turning down unnecessary circuits and.
Readjusting, our bandwidth needs.
But we're also focusing on the lower hanging fruit, which are those revenue opportunities and just.
Then just require us to turn up more bandwidth.
Set of having to go out and install more equipment. So even.
Even while.
We may see some revenue decline were also picking up revenue on jobs that are more profitable because it's.
It's a quicker turnaround.
Okay.
That's great and.
Now I'll talk a little bit more about about customers, who are actually looking for more bandwidth in this environment.
Yes, great I mean, that's something I really like talking about.
You know, we're in an industry where.
This whole thing about digital transformation is real.
For years, it's been the oil and gas industry doesn't like change until changes perfected.
But especially with the price of oil and the fact that we have quarantines and Pandemics and.
All of these restrictions for travel more and more of these companies are needing to be able to do things remotely and to have more access so they're looking at some of the applications that we are delivering let's take for instance, Avi.
And maybe I allows them to to see what's going on on the remote site by you know one.
One guy walking around with his helmet camera or.
Phone camera or.
CCTV.
And that information is transported back so thats driving that.
An additional requirement the bandwidth, but when you look at the Big picture here, it's really.
As everybody wants to be able to.
Remotely operate those facilities in what we call the digital twin where basically they are replicating everything that's happening at the remote facility right there at their desk it.
It's a big big driver of it.
The.
Revenue opportunities for us and it's also what's different differentiating us from our competitors.
We are probably the only the only satellite services company I know of that Ken.
Deliver the kinds of applications that are not only helping our customers.
The more efficient at operations, but any additional costs that they have because of digitalization for let's say increased bandwidth is offset by the savings that we are able to deliver them with the.
Applications would bring into on for instance, intelli, which helps them.
No.
See problems are coming and being able to stop.
The problem from happening.
So you know.
We're enjoying.
Even in a downturn, we're enjoying the opportunity to bring more efficient tools and more cost savings to our customers, even though it cost them a little bit more for bandwidth.
So we've got the value proposition thats really been selling.
Okay. That's very helpful. Thank you.
If we talk about the Gulf of Mexico Network, you have in the T mobile partnership could.
Do you have any any sense of when T mobile will get paid back for further capital investment and when when you'll be able to start generating revenue from this.
Yes.
Go ahead, Steve.
Yes.
The short answer is no. We're obviously working closely with T. Mobile that's an important relationship for us but.
But Dave given just happens the pandemic in debt given what's happened in terms of the cruise line industry am that dead. It does move through that area, where were the network resides I think theres some uncertainty.
Around what the roaming traffic is going to be in when it turns back on it.
For that reason at this point, we have not put any incremental revenue into our forward looking looking models until there's more more clarity around.
Around that.
Yeah and Thats exactly.
I think where I was going to say Steve.
Also to back that up.
One thing is as the Tmall T mobile network offshore Gulf of Mexico is working well and that the customers that are using it are enjoying it.
I think that once we see activity picking up in the Gulf of Mexico. Once we see the cruise ships going back out.
That's where a lot of the roaming opportunities come from but.
I guess the short answer like Steve said is no. We can't give you a timing on that but we do know that that time is going to be it's going to come.
Just nobody knows a matter of when.
Thank you and then in apps and of course, how do we do revenue we do generate some revenue now from from the monthly service fee that we get from T. Mobile for all of the active sites that we have out there where we're continuing to monitor do maintenance work out for them.
Got it.
For apps and Aiotv any update on on traction from.
So some of Thats, a big things that you've announced like.
The Microsoft partnership.
Khaki working with BP Petrobras or any other ones.
Nothing specific to announce here on the call today.
Alan but I'd say good progress.
With the with all of those all those those partners and customers.
Okay, and then you intend for absent Aiotv It was mentioned that Aiotv.
There was lower bandwidth usage.
Hi, My understanding is you are you, mostly you get revenue from monitoring pipelines could.
Could you maybe explain what's going on with that.
Yes, Theres there are two.
Two leads that we generate revenue there one is on sites, where there is a dedicated type on that provides continuous communication in some situations customers pay biden megabyte.
And then if so the amount of bandwidth and that was that was used during the quarter was a little bit less than has been used in previous quarters for those customers, who who pay by the drink. If you will and as we mentioned that also hardware sales, which is it does vary from quarter.
For the quarter was down a bit in the quarter as well.
Okay.
And then in.
In the ESI segment it sounded like.
I thought I heard you say that you added 2 million to backlog in October.
And you gave some examples of how it all could pickup.
So so is it a base case scenario that the backlog should generally be.
That said, we won't see it declining going forward.
Maybe another way to think about it is is this a segment that sequentially you think.
Whatever you end up doing in fourth quarter that thats kind of a base level and then.
It can either stabilize or improve from that level in 21.
Well, Alan I certainly again.
Without giving you.
Guidance per se.
I, certainly think that as we talked about the backlog.
Potential increase in 21 as these projects start to get awarded.
He is pretty significant and with a couple of project awards, we could see it shoot right back up and the fact that we're continuing to respond to request for clarification as well as entertained new bids is.
Is what gives us confidence that that this work is coming it's a matter of timing.
And so in the meantime, we are working with existing customers on existing projects, adding change orders.
Adding smaller jobs, which may not.
The radar if some of these big multibillion dollar projects and yet are still positive contributors for us.
I can't tell you, whether I think the backlog is going to.
Be down at the end of the year or up.
But I think the trajectory the backlog in 21 will will reverse.
Okay.
That's great and then.
On a.
On your cash flow statement.
It looks like your operating cash flow in the quarter was close to $12 million with Capex of just around two so.
So you are generating good free cash flow I know you use a different definition, but and it looked like the.
Components deferred revenue and.
Paydowns of accounts receivable have pretty good impact.
Could you maybe talk about.
How do you think about them.
Those two things and working capital how that will.
Having impact maybe in the near term.
Well sure Alan I think you know that we have had a pretty strong effort around collections and.
And that has yielded some very good results for us comparing.
What we calculate in terms of our days sales outstanding.
Coming down throughout the year and of course, we tend to look at that really at least internally on the basis of our recurring revenue customers as opposed to our project based customers where.
You can send a large number of invoices for example in June and it looks like you're a our has gone up quite a bit but they pay.
Relatively quickly so they are sort of one time sludge.
With with respect to using the free cash flow.
We've obviously been paying down quite a bit of the debt working to continue to shore up the balance sheet and and make that stronger.
Put ourselves in a better position there and I expect that's what we'll continue to be focused on as we move ahead.
Thank you.
You guys had a lot of good things on this call and I got to say your presentation.
The detail you have is tremendous.
So it's it's appreciated.
One statement you said was the thing that stood out the most to me.
Was that you believe that revenue and adjusted EBITDA in 2021.
Be above what you deliver in 2020.
Q2, usually glad you caught that Alan.
Yes, maybe I missed most things, but I didn't catch that.
Thats.
And thats significantly higher than where my estimates are.
And so.
Is the way to think of that I mean, it sounds like in Mcs, you've got these big wins that are going to be you are gaining share in that and thats going to help there.
Absolutely.
Just going to continue to be a growth driver and the big surprise to me is that.
Yes, I will start.
This is the opportunity there is that the way to think about it or should we is there anything you wanted to add to that.
No no.
Summary, Alan so.
I agree I think when when we talk about.
Steve mentioned.
Hi, and I know that may be one of the areas, where where you have.
Had some lower expectations thinking about 2021, when you when you look at the $100 million of projects that were bidding in.
The middle East alone in just one country.
Again, you start getting some of those awards and and the team is ready to spin up and get that work done and start bringing that revenue in.
We feel we feel kind of all segments are going to be up compared to where they will finish the year.
And then of course, we're going to continue to maintain our focus on cost.
Yes.
That's great. Okay. Thank you so much.
That said with my questions Craig.
Great job.
Thanks, John.
Thank you Alan again.
Again, if you have a question. Please press Star then one on a touchtone phone.
The next question comes from Brian Lunar of Emerson equity. Please go ahead.
Hey, guys, great quarter, really great blocking and tackling depreciate the forward guidance as well.
You had a pretty good nice to uptick in production line item Mcs and I was just wondering if you added any more Sps those out of the Petrobras contract.
In that product and that line mix that helped boost it up it was primarily just.
The as you mentioned that oil oil storage, becoming available in production flowing back again in adults.
It was it was really the latter.
You can see sort of our schedule for at least just the Petrobras F. Dsos on slide 13 of the deck.
Those have been sliding a little bit to the right.
As as Weve I guess, it's not fair to say, we've struggled with but I think I think Petrobras in Brazil has had issues with.
The Kobe restrictions around shipyards and installations and everything else.
So those are yet to come and of course, the other way with the other customer that Steve talked about with the Fpsos, where we're significantly turning up revenue that is yet to come but the site count increase here really was around production platforms.
That's great. So the new contract is seven with the potential for 12 floaters is that correct.
You're you're talking about the fpsos they have they have seven now.
They are expecting to grow and as they grow we should be adding goes into the mix.
I don't know Errol if we have a specific number that they're going to or that we could give out.
Hi, Lee I don't have that information handy I'm sorry.
Okay, and just just trying to fine tune the production line item again, so you weren't earning much on the seven it was mainly tests. So you could add to seven and then roughly nine or 10 Fps those from Petrobras.
On a forward basis.
Plus any other new wins that you might as you're trying to add market share is that the way to look at it.
Yes, so yes on the way to.
Go ahead go ahead, no that was going to say that the way the way to look at it is that's on slide 11, we have our market share for Fpsos there that includes.
The current Fpsos that we're serving plus the additional warrants that we expect to come on with both Petrobras and and other customers.
Now remember we have revenue being generated on the seven that we mentioned so theyre already in our site counts.
But new Petrobras F. dsos as they come on new FCS those with this other customer those would be incremental in the reported site count at the end of a particular quarter when they come on.
Gotcha, Okay. That's helpful. So when I when I jumped to offshore you guys held the line extremely well except for the one off but more importantly, you have 26 floaters coming online it looks like with the potential for 41 with that fleet right wide contract and then if I look at increased utilization on the Fps. So.
The tender it's almost as though you have around 40 assets coming online in a base of 172.
I guess is that that gives you correctly.
Comfort that you're going to grow I guess.
Actually substantially.
All other things being equal next year.
Yes, Brian I didn't put the adjective on it but but yes that net debt is indeed, an important part of what gives us confidence.
We will be.
Both 2020 in terms of financial results.
In Twentytwenty one.
I want to add those on as well it looks like that the highest potential south site count that you've had since 2015.
Yes, Yeah, we're really really pleased with how the team is performing and as a result, the you know that.
The markets demonstrating the great deal of competence in what were able to deliver and Dan I think I think were truly delivering best in class service at this point and day given.
Customers, who are operating offshore had more and more reliance on a high quality highly reliable network.
I think that it that that is a dynamic that serving us well.
That's awesome.
Moving on to apps in I O C.
Great.
Great quarter you have.
When you look at you mentioned 150, RFP east across Mcs and absent Aiotv is that the new number.
Is that up from the 130 or 140 from Q1, yes.
Yes, Brian Yes last quarter. It was 140, yes, im sorry, I should say differently second quarter was 143rd quarter was 150, yes.
So I mean, these two contracts with the Fpsos and the fleet wide contract on floaters that would be two pretty big wins.
That seems like it might be somewhat on the higher end some of the.
Is that around.
Mid range of the opportunities within the 150 those type of deals.
I would characterize those as.
Is that.
Higher into a larger opportunities relative to two the average.
Gotcha, but then when I look at Jay Your 26 wins in software to date on 13 million Reds, you're you're averaging about a half a million a win.
And within that you had some cade proof of concepts, which are smaller and now you're starting to just to add on some.
Larger contracts.
Particularly like the BP BP contract you mentioned, a few quarters ago that was.
Going to be installed during Q3, so am I looking at it right that I could say similar to use an average across the 150.
RF piece when I look at software and then the sizable wins that are in MTS typically.
Yes, it seems like you're in a pretty good position in terms of potential backlog across those two key business segments.
You know were really pleased with the with the momentum that Intelli has in there.
There are really three ways that revenue grows on four important Kelly one is we might get started with the customer in a particular part of the world in when they go global and with the platform revenue grows as they as they expand their footprint in terms of use.
Another growth driver growth driver can beat the development of new applications. So they they might select the platform, it's very easy to add two for one or two particular to solve one or two particular problems that are trying to solve that then they can layer on other new applications to solve other problems in that.
That drives revenue growth for us as well. So there are two ways to grow revenue with existing customers and then of course, the third way is to secure more customers and that we've been very pleased with the pace at which we've been signing up new logos in that business.
That's great.
And then jumping on to add side, that's a pretty sizeable opportunity set that you're addressing and the that's what I. When I look at the article you mentioned out of bounds as well at 45 billion offshore in PC market set for order rebound next year.
Within that.
Thank you.
Gives you comfort that plus a 100 million and request for proposals gives you pretty good.
Comfort I guess, an ESI next year.
Yes, yes, yes, it's encouraging to see the expectation that the market is going to expand so significantly.
It does remind me that.
The energy market that is our primary market not our only market that our primary market.
Does tend to place tend to be cyclical and that people tend to forget about that.
Now looking at the low end of the cycle in the end to end at the high end of the cycle.
And Brian I guess to add to that.
I was going to say to add to that.
Thanks, Steve sort of mentioned this in his.
Opening comments.
Lot of these systems integration jobs or.
Following the right into our sweet spot and what I mean by that is you know.
Or communications systems that are going on facilities in vessels.
In places, where we've done this work before and were able to use.
Already engineered engineering.
We are able to use experience for the past to be more competitive than our bids and not only that but we've been successful on a number of those already.
So we have the track record and we have the information and knowledge to be able to to bid these safely.
With minimal amount of risk.
Edwin So that's given us a bit of confidence that we're bidding on a lot of things that we've already done a number of times before.
That's awesome when you look at I think in the past in Q1 or Q2, you gave 34 RFP is out in ESI, how does that mean that that number changed where does it sit today. If you can give that.
Obviously seems like it would have gone up with a $100 million addressable.
RFP that you have out but I'm just curious if you have that number.
I now have yes.
Yes that off hand, I mean, we talked about kind of the 57 clarifications and.
And.
19, new tenders or new inquiries already in October so.
Certainly the activity level is robust and those those projects that we mentioned in.
You know, adding up to that $100 million are I mean, there there each fairly substantial in terms of revenue opportunity for us.
And that's in systems integration alone is a 100 million figure correct, but thats exactly right, yes, yes, yes, yes.
Okay, that's awesome.
And the pipeline is robust as we said also earlier was that just because you are putting up proposals today doesn't mean you get purchase orders next month. These are projects that are planned months and months in advance.
And they're not awarded you.
Immediately after you put your proposals together, but the fact that you know is that strong of the pipelines that pool of.
Still inquiries coming in that's a great leading indicator.
Eventually the dates are going to open.
And the money is going to start being released App.
After you get into the next year the budgets are set and some of the chaos of Covidien.
The whole market start to settle down these projects have to happen, it's just a matter of when.
Quick question for Steve as you.
Deploy that expanded deal with BP Houston in Aberdeen.
Could you talk a bit about the revenue driver for that keurig activity activity levels as in Kelly and end to end kind of takes over and digital viral effect with usage driving revenue in that line segment.
Yes, Brian if of course, we haven't we haven't announced the specific details.
About that contract as it relates to.
Revenue, but didn't but indeed, it is a global deployment and we started that global deployment.
In day. It is also on the classic Intelli platform.
That provide that.
He is a platform that you can very easily add new applications to its already engaged in conversations about other applications that weren't part of the first award that could be added to the platform as well so at least great great relationships, there and looking forward to doing even more over time too.
Help them with their digital transformation.
Is it safe to say that going to be incremental.
Going forward that we weren't fully deployed in Q3.
Okay.
I think there are opportunities to continue to grow with WPP.
Gotcha.
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Appreciate it I think thats, all I have great quarter and.
Look forward to speaking you guys in the future.
Thank you Brian.
Thanks, Brad.
This concludes our question and answer session I would like to turn the conference back over to Lee Aastrom for any closing remarks.
Well. Thank you all for joining us today, we appreciate it appreciate the good questions and the opportunity for us to tell our story, we think it's an exciting one we think there's a lot of upside to it.
And we will be back to report fourth quarter earnings.
In the March timeframe, Steve and I and Aero, we're available for follow ups.
By E mail or more by voice if you have any further questions. Thank you again.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
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