Q3 2020 KLX Energy Services Holdings Inc Earnings Call
Greetings and welcome to kill the ex Energy services third quarter 2020 earnings Conference call.
At this time all participants are in the listen only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad as a reminder of this conference is being recorded.
It is now my pleasure to introduce your host for today's call Ken Dennard. Thank you you may begin.
Thank you operator, and good morning, everyone.
We appreciate your joining us on the tail ex energy Services' conference call and webcast to review fiscal third quarter 2020 results with.
With me today are Chris Baker kill ex is president and Chief Executive Officer, and keep her later, Chief Financial Officer, and Executive Vice President.
All the my remarks management will provide an overview of the market environment as well as an update on their post merger integration efforts and.
And they will discuss the financial details of the third quarter and the market outlook before opening the call for Q and it.
There will be a replay of today's call. It will be available on our web cast of on the company's website at the tail ex energy Dot com.
I will also be a recorded replay.
Telephonically available until December 15, 2020.
More information on how to access. The replay features were included in yesterday's earnings release.
Please note that the information reported on this call speaks only as of today. The separate 2020, and therefore you are advised the time sensitive information may no longer be accurate as of the time of any replay listening or transcript transcript breeding and.
The addition, managements comments may contain forward looking statements within the meaning of the United States Federal Securities laws.
These forward looking statements reflect the current views of tail ex us manage the however, various risks uncertainties and contingencies could cause actual results performance or achievements to differ materially from those expressed in the statements made by management well.
Listeners are encouraged to read the annual report on form 10-K quarterly report on form 10-Q, and current reports on form 8-K to understand certain of those risks uncertainties and contingencies.
The comments today. They also include certain non-GAAP financial measures additional details and reconciliations of the most directly comparable GAAP financial measures are included in the quarterly press release, which can be found on the Kale ex energy website.
And now I'd like to turn the call over to kill ex Energy services, President and CEO Mr., Chris Baker, Chris.
Thank you good and good morning, everyone. Thank you for joining us today for Calix Energy services fiscal third quarter 2020 conference call.
Let me begin by updating you on the broader market environment during the quarter as well and the progress we've made on the integration I will then turn the call over the keeper to review our fiscal third quarter financial performance before returning for some final comments on our strategy and outlook.
Turning to the fiscal third quarter. The overall market environment remains very challenging not only due to the volatility and commodity prices, but also the overhanging the issue of Cove and 19.
Which has had far reaching impact on the worldwide economic activity.
I'm pleased to report the despite the persistent impacts of these challenges fiscal third quarter market activity picked up considerably from Q2.
During which time, we saw revenue hit its lowest level in June.
Since then our revenue has increased every month and the in October with revenue being up more than 50% from the June Bob.
However, it is important to note the we're coming off the historically low bottom in the midst of a very depressed market, which means the even a large percentage increase in revenue may actually be relatively nominal and absolute terms.
The result, the Q3 revenue gains coupled with the cost reduction and synergy realization efforts drove a meaningful reduction and our adjusted EBITDA loss and.
And we exited the quarter approaching breakeven adjusted EBITDA, but we are not yet back deposit of Unlevered free cash flow.
Commodity prices have been rather unpredictable over the last few quarters as a strong rally the fall of the initial kobin related price decline in March and April fizzled out with price is topping out in August and declining during the month of September and October.
Despite WCS WTI being down roughly 11% during our fiscal third quarter, we've seen the strong rebound on in Q4 with price is up about 26% since the end of Q3 on news of potential code and vaccines.
Rig count for the third quarter stood in Stark contrast, the commodity prices as the steep decline the begin last spring with finally halted and August since then rig count has steadily climb and during the fiscal third quarter of 18% from the end of fiscal second quarter and currently up 32.4.
The per se from the bottom.
Likewise, the active Frac spread count has also been trending favorably up from a bottom of roughly 40 spread to the 120 to 140 spreads running today roughly.
Roughly half of which are working and the Permian basin.
Ill ex remains well positioned to capitalize on a rebound the market with significant exposure to the drilling completion and production and intervention and market across all geographic markets and the U.S.
As it relates to the Permian completion activity, specifically the pro forma combined company generated greater than 50 per cent of 2019 combined revenue from completions activity and the Permian was our second largest geographic market.
We have seen consolidation accelerate amongst our customers and we believe this is the positive trend for the industry has the whole and calix specifically cash.
Kayla ex has deep relationships with most of the largest operators and the U.S. and generated 40% of our pro forma combined year to date 2020 revenue from the top 20 operators by rig count, where we provide products and services to approximately 90% of this group on a year to date basis.
So overall, we've seen steady improvement in most areas of the market with our drilling and completions and production and intervention services all seen higher utilization sequentially.
That said pricing remains challenging and.
As competition has been fierce amongst service providers and the most flow financially desperate providers seem to be making irrational pricing and staffing decisions.
Looking at our results for the third quarter, we saw significant sequential improvement in our revenue and adjusted EBITDA and as I stated a moment ago revenues of increased every month since the market bottomed in June.
On a combined basis, we improved our adjusted EBITDA loss by almost 13.9 million quarter over quarter. As we went from a pro forma adjusted EBITDA loss of 19.3 million in Q2, two a $5.4 million loss in Q3.
Now, let me update you on our integration efforts during the third quarter.
Our progress integrating our operations and realizing the efficiency gains and cost synergies continues to proceed exceptionally well.
When we were evaluating the merger between Calix and Q, Yes, we knew that there was a natural and complimentary fit between our respective cultures.
And in our first 120 days, we believe the teams have collaborated well and made excellent progress in their coordination efforts.
You may recall, the one of our major objective and reining in costs with the closure of our Wellington, Florida legacy corporate headquarters and relocating all key functions to Houston.
We have successfully completed this initiative during our third quarter.
And our objective is the further rationalization efforts directed at eliminating duplicative functions and our Houston offices and field operations on the.
This front, we also made tremendous strides and optimizing and rationalizing our cost structure, having consolidated 13 facilities across our operational platform during the quarter.
These efforts are ongoing and we remain firmly focused on aligning our personnel processes and systems across all functional areas within the current market conditions. As we stated before we originally expected to capture of annualized run rate synergies of at least 40 million by the end.
Of the first fiscal quarter of 2021, but.
But we are now several months ahead of schedule relative to our initial expectations.
As of Yesterdays release, we have already exceeded this goal implementing approximately $41 million of run rate annual cost savings.
As we have progressed through this integration process, we of gain greater clarity and insight into the finer details of our cost structure and this has enabled us to identify some additional cost efficiencies that can be realized.
As a result, we now believe that there is at least 6 million of incremental cost savings, we can achieve over and above our initial projections.
Alongside the realization of these cost efficiencies. We also continue to seek ways to leverage our expanded product service lines.
And proprietary technologies to operate more effectively and deliver added value to our customers at lower cost.
This effort and cost this is greater coordination and a more unified approach towards our customers, which will help drive more cross selling and pull through opportunities.
As I've stated before this strategy will be a critical factor in driving our long term efficiency and competitiveness in the marketplace.
Throughout this integration process, we have relied heavily on the hard work dedication and sacrifice of our many employee and helping to make this transition as quick and smooth as possible without their efforts the synergies I discussed simply would not be possible. So I would like to thank everyone for their tireless efforts and.
Okay, and Kayla and prepare for the future and to make our company stronger more prepared and more competitive and the challenging marketplace.
With that I'll now turn the call over to keeper, who will review our Q3 financial results keeper.
Thank you, Chris and good morning, everyone.
Before we review our fiscal third quarter 2020 results I'd like I'd like to bring a few items to your attention first keep in mind that since the merger completed on July 28, our combined second quarter results include only three days of results from the legacy Qs business and are therefore largely representative.
Of Kale ex is pre merger structure.
However, when appropriate I will highlight sequential comparisons and which Q2 results are adjusted to reflect a pro forma of full quarter of Q EPS results rather than the as filed Kale ex Q2 results.
Second we are changing our methodology from the allocation of corporate cost this quarter, which.
Which will directly impact our segment presentation previously 100% of our corporate costs were allocated across our three geographic segments. However, we will now allocate to the geographic segments only those costs the directly tied to their operations, including our HP insurance audit supply chain.
HSC and others, whereas the remaining on allocated balance we'll now sit at corporate and appear as a separate line item and the segment reconciliation.
This presentation method is in accordance with information using our own performance assessment and resource allocation decisions and also improves comparability with our peers.
Third we had a handful of extraordinary costs impacting our results in the quarter day.
During the quarter, we had $8.5 million and integration costs for expenses to relocate corporate headquarters integrate the Qs business reduce head count and consolidate service and support facilities.
Merger costs of $1.3 million were incurred primarily for legal and professional fees.
With that said I will now discuss our third quarter 2020 consolidated results.
For the third quarter ended October 30, Onest 2020.
Revenues were $70.9 million, an increase of $16.4 million or 30% as compared to the pro forma revenue for the fiscal second quarter of 2020.
The increase in revenues reflects the impact of improving market activity across all of our end markets, but particularly on the completion side as Chris discussed earlier on the call.
Adjusted operating loss was $20.6 million for the quarter.
Adjusted EBITDA loss, and adjusted EBITDA margin were $5.4 million and negative 7.6% respectively. The.
Adjusted EBITDA loss decreased 72% compared to pro forma fiscal second quarter loss of $19.3 million.
The decrease in our adjusted EBITDA loss was driven by a combination of increased activity and revenue and the benefit of the cost synergies beginning to flow through our PML.
I'll begin the segment review with the northeast and mid Con segment.
Fiscal third quarter revenues were $27.9 million and increase of $13.9 million or 99%.
And the significant increase in revenue was driven by a full quarter impact from the legacy Qs business adjusted operating loss for the fiscal third quarter was $2.4 million as compared with adjusted operating loss of $5.1 million and the fiscal second quarter of 2020.
Adjusted EBITDA was $1.5 million as compared to the fiscal second quarter, adjusted EBITDA loss of $2.5 million.
Now moving to our southwest segment.
The southwest segment generated revenues of $24.8 million and increase of $20.6 million or 491% as compared to the fiscal second quarter of 2020.
Similar to the mid Con and northeast the significant increase in revenue was driven by a full quarter impact from the legacy Qs business.
Q3, adjusted operating loss was $8.5 million compared to fiscal second quarter adjusted loss of $7 million and adjusted EBITDA loss was $2.2 million compared to a fiscal second quarter adjusted EBITDA loss of $4.6 million.
Rounding out our segments lets shift of the Rockies.
The Rocky Mountain segment fiscal third quarter revenue of $18.2 million increased by $200000 or 1% as compared with the fiscal second quarter of 2020.
Adjusted operating loss for the fiscal third quarter was $3.8 million as compared with adjusted operating loss of $3.3 million and the fiscal second quarter of 2020.
Adjusted EBITDA was $500000 as compared to the fiscal second quarter, adjusted EBITDA of $1.5 million.
I would also like to touch on our residual corporate costs, given our new allocation methodology of.
Adjusted corporate and other EBITDA loss for the fiscal third quarter was $5.2 million compared to $5 million for the fiscal second quarter.
The only experienced the 4% sequential increase in corporate and other adjusted EBITDA loss, which demonstrates the speed with which we were able to implement synergies.
Now I would like to shift gears from segment results and take a moment to review our consolidated financial position.
Kayla actually the Ford and one of the strongest liquidity positions and the small and mid cap space as of October 30, Onest 2020 cash on hand was approximately $79.8 million.
And total liquidity was $106.2 million.
Preserving cash and liquidity is our number one priority given the current market uncertainty and we are laser focused on integrating the Qs merger, realizing the associated cost synergies and returning the business to positive free cash flow as soon as possible.
Our long term debt of $243.6 million less cash, resulting in net debt of approximately $163.8 million. There were no borrowings outstanding under the company's 100 million dollar credit facility with $26.4 million of availability, which increased 77%.
From Q2 levels as we wrap the qbs current asset collateral base and of the borrowing base and our expanded by $8.9 million or 22% from July 30 Onest levels.
Additionally, we have reduced our letters of credit by $2.8 million in November which improves our availability by that same amount.
There continue to be no near term debt maturities with our ABL on maturing and the fall of 2023, and our bonds not maturing until November 2025.
For the three months ended October 30, Onest 2020 cash flow use and operations was $20.3 million and free cash flow was negative $22.9 million the sequential decline and cash was largely driven by the $20 million loss and cash flow from operations.
Including $4 million of cash merger and integration costs associated with the Q EPS merger and the 3.3 million dollar investment and working capital.
Capital expenditures were approximately $2.6 million for the quarter, most of which was primarily tied to maintenance spending.
We continue to expect total capex for this fiscal year to be about $13 million to $15 million.
With that I will turn the call back over to Kris Kris.
Thanks keeper, while it's clear that we are still fighting through a tough market. There are signs that the market is on the new and commodity prices and activity gains in the oil service market, particularly in the completion space have been supportive of a gradual the still tenuous improvement and the macro economic.
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And although COVID-19 remains the wildcard the prospects of of bio viable vaccine give us hope that the situation will improve and energy demand recovery will begin in earnest at some point and 2021.
So the overall picture certainly gives us greater optimism, but we remain cautious due to the near term uncertainty that surrounds this recovery.
That said, we are concentrating our efforts on those factors that we can control, which we believe gives us a truly differentiated position relative to our peers.
We have been proactive through this downturn completing one of the very few of the Fs consolidating transactions.
Providing us with more levers to pull to return to positive free cash flow relative to our peers.
However, with that said, we acknowledge that we can't cut our way of prosperity.
Our experience has shown us the consolidation and the synergies that result are what drive value for both our customers and shareholders alike.
Back in 2015, we acquired the Archer, well services and Steve and like the Calix Qbs merger that transaction yielded the benefits of added scale meaningful operation efficiencies as well as the solid balance sheet, but perhaps more importantly, it enabled us to deliver and expanded and and.
And service offering to our customer base and to better serve them at lower cost under and improved and more efficient operation.
Just as we sold and we're now seeing the benefits of synergies flowing through our financials as our integration efforts advance.
As we think through our Q3 result, the vast majority of our adjusted EBITDA loss occurred in the first of month of synergies were implemented in late July and August and did not begin to meaningfully impact on profitability until September and October.
Although the more sizable synergies have already been achieved their additional sources of upside that we will continue to pursue.
This includes items, such as cross selling opportunities across the organization in house manufacturing the reallocation of expertise to the completion side of the business and the continued repurchasing of legacy pressure pumping equipment to our wireline and coil tubing operations.
We have already begun implementing many of the strategies and are very excited about the significant upside from cross Pollinating, our machine shop and engineering groups to further reduce tool calls and advanced of element of best in class downhole tools, and real time monitoring and automation.
Optimizing these items will further benefit our returns help our bottom line and enable us to better serve our customer base.
And a relatively short period of time, we have become a much stronger and financially sales premier provider of drilling completion production and intervention solutions across all major us basis with a broad suite of the asset light products and services that span the full lifecycle of the well.
And our broad customer base is built on strong longstanding relationships with blue chip customers across the us.
And as I mentioned earlier, we've seen activity and utilization bounced back from the lows experienced earlier in the year, but the pricing side of the equation has yet to respond we.
We continue to see pricing and some service lines, such as coal tubing and wireline at or below breakeven levels. Ultimately, we believe the service industry needs to raise prices in order to warrant deployment of additional equipment into the market as the current pricing regime and many of our service lines is the answer.
Sustainable to support the industry long term.
On the strategic front as we did the size of many times in the past consolidation is necessary for the long term health of the industry and we believe the service sector needs to continue consolidating to bring to market into equilibrium we.
We will continue to explore strategic opportunities to further enhance our platform and drive returns and free cash flow and accelerate our long term growth strategy.
Our focus will be a well capitalized businesses.
With the strong strategic fit differentiated technology, a strong track record of returns and achievable cost synergies.
Given our team's track record of successfully seeking out and integrating acquisitions.
We believe we will be able to realize a great deal of bin or benefit from future transactions.
And while macro economic issues, such as Coca 19, and commodity supply and demand concerns. We will certainly continue to be major drivers and the market Kale ex is well prepared to handle any challenges that may arise.
We are continuing to rationalize our operations and maximize synergies from our merger, which will certainly benefit the business on a go forward basis.
Although we may see of seasonal revenue pull back in the fourth quarter, all else being equal we will see and improvement in both profitability and the bottom line. Thanks to our rationalization integration efforts.
In closing, let me express our gratitude to our shareholders, who have remained steadfast as we have navigated through market upheaval and an ever shifting industry landscape.
I'd like to also thank all of our dedicated team members who of plate such a vital role and bringing about some of the most momentous changes in case of Lexus history. The.
The blending of our companies and our cultures, both with the history of leading safety performance and outstanding execution of the field has positioned us as a truly premier oilfield service provider that is well equipped to navigate the current market challenges and ultimately prosper in the North American oil and gas market.
As global economy recovers with that we will now take your questions operator.
Thank you we will now be conducting a question and answer session and if you'd like to ask the question. Please press star one on your telephone keypad and.
Confirmation total indicate your line is in the question queue. You May press star to the if you'd like to remove your question from the Q4 participants use and speaker equipment and may be necessary to pick of your handset before pressing the star keys, one moment. Please while we poll for questions.
Our first question comes from Ian Macpherson with Simmons Energy. Please proceed with your question.
Good morning, Chris Cooper, how are you.
Hey, good morning, and Ian.
One of the and Brent Hi, Chris you. Your everything is obviously still very complex and your world and our World you. Your your commentary on fourth quarter outlook. The revenue wise it was rather nuanced.
Acknowledging some some risk of holiday pullback, but if we simply.
Reserve the bit of pullback from current run rate, we would still see quarter on quarter very strong comps for total market drilling and completions activity.
And and it was really a you probably had greater percentage.
Spring to the completions recovery of the third quarter than you might in the fourth quarter, but but you have more I would say more activity tailwind to drilling and the fourth quarter. So.
What are the.
Considerations for less.
Rigorous revenue balance in the fourth quarter, you've you talked about is price still a sequential and drag on average as market share and issue and any of the product lines maybe just.
Flesh that out a little bit more if you can thanks.
Yes, not a problem per shape appreciate the question and look.
Look some of our revenue as you well know as it pertains to.
Well control fishing services et cetera is somewhat episodic, but you're right. We did see that balance in the third quarter and would expect to see that going into the fourth quarter I think the production side of the business and some of that episodic revenue is more holiday sensitive on.
The calendar looks really really strong coming into the beginning of the new year in January.
And so that should be helpful. As we exit the fourth quarter, our fourth quarter ends on January as you will notice we're one month off cycle, but at the end of the day look cash preservation is key and the current market environment and were working to reduce combined cost structure as quick as we can and that's what we've been focused on the integration efforts as much as we have and capturing.
All of the identified synergies Weve basically achieved that initial target of this points, we're focusing now on the incremental synergies that we talked about and alluded to as well as the operations and pricing.
To your point, we've talked about pricing pricing is unsustainable and the current market.
But we are pushing price and we're seeing some improvement there and we think thats going to drive profitability through our base business.
We exited Q3 near breakeven EBITDA will go with that said to your question, we did see a slowdown and Thanksgiving on the production side of the business and we expect the same thing and Christmas, but we do think January is going to pick up pretty tremendously.
Both on the drilling and completion side and the further to your point all of the Frac spreads that are are being deployed right now.
It will impact of January February et cetera on the completion on the drill out the flow back side et cetera. So there is a bit of a lag.
And that's what you're hearing some of the hesitation.
But I mean, despite the holiday slowdown we do still expect to see a revenue increase of 7% to 14% along with the increased synergies flowing through the PL, we would expect to exit the few floral positive adjusted EBITDA clearly commodity prices of Cove, and 19 et cetera potential lockdowns all come into play.
But we do feel really good about our position and at this point and how we're going to enter the year and then lastly, like I said the revenue mix will come into play somewhat but we feel like we've got some tailwinds behind the slightly.
Great Thats perfectly helpful. Thanks, and then I also wanted to ask if you could.
Maybe summarize for US and you don't want to give away all the details, but just the general state of utilization across some of your big.
Service lines core large diameter coil wireline and maybe directional and speak to your your head room for.
Taking on more activity without a lot of capital intensity in other words can you keep your current level of Capex and the next year and ramp up as utilization levels with the market.
Without having to.
Redeploy a lot of capital to.
With that activity.
Yes, sure. So I mean, the first of all as you well know, we're very capable ultra and here, we don't disclose CPI, the utilizations that sort of free product lines, but we're tracking all of those were also tracking utilization for employees and I think unfortunately utilization from an asset base perspective across the industry is pretty meager.
But we have seen and a rebound there utilization and coil tubing since the day, we close the transaction has basically improve month over month over month, and so that's one area of where the utilization of coil along with the pull through of motors and tools et cetera from the legacy CLEC side I would.
Say is has generated kind of one plus one is greater than two type opportunities, especially in certain basins. So we've been very very proud of that on the on the drilling side.
You know candidly as rig count this crash down we did lose the market share.
In May and June type of timeframe of this year, we've seen ourselves claw that back.
When rig count falls at the pace that it felt like that.
Everybody just gets shut down right and sometimes there's contracts are preferred providers that they get caught up in that and so we've seen our market share claw back.
In the last few months, we see continued pace of acceleration there. So we're excited about that opportunity.
The what I'd say is look just to round that out we.
We clearly have sufficient incremental assets across every single product line you mentioned those two specifically to address those the whether it's incremental rental equipment.
These frac sales fishing tools et cetera, their wireline there plenty incremental assets to deploy to drive the revenue base without a substantial amount of incremental capital.
I don't want to guide towards next year's Capex, yet, we're just starting to kind of work on our budget.
Given our fiscal year of.
But I would say, yes look we're going to do everything we can to control capex and keep at it and.
The kind of a de minimis level, consistent with where we've been this year.
Well understood. Thanks, Chris.
Yes, Sir I appreciate it.
As a reminder, if you'd like to ask a question. Please press star one on your telephone keypad one moment, please while we poll for questions.
Our next question comes from Jamie per as with RF Lafferty and company. Please proceed with your question.
Non everyone Todd.
Great quote, especially in this challenging time and coming off of the merger.
I have a question as far as the co related do you have any color you still see an income corporate related slowdown and what impact did it have on staffing and in the third quarter and you.
Half of what do you see coal.
The impact on the fourth quarter also my second question is it seems like you believe you have the right size of assets to managed to sort of carbon departments, maybe you could provide some more color and debt all right. Thanks.
Yes, no. Good morning first of all Jamie I appreciate the question.
I guess I'll address Cove at first look I think our company our HSC staff, our crews have done a phenomenal job and a global pandemic to continue operating across the board. We have had more than our fair share of 14 events as have many companies the oil field services phase our guys are out there is essential workers.
Putting themselves at risk every day of the week to continue to drive revenue and support their families for the company and do their job and we very much appreciate that but we have clearly like many other companies had a number of quarantine events. The vast majority of which have been third party related.
All of which have been non work related incidents.
And candidly.
This whole pandemic and the core and teams that are associated with those dry.
Drive your cost structure up somewhat right because you end up quarantining, a couple of crews for 14 days and you're wearing that cost and we have to drive utilization and we have to continue down the road to to service our clients.
And so we know that we're in and I guess cobot wait two or 3.0 at this point in time, depending on which state you're in and how you slice of the data.
So I think it's premature I think theres of plenty of opportunity set.
And a lot of bright spots with regards to the vaccines I don't want to get into political statements or not and dr. to talk about the timing, but we're going to continue to manage our business to manage the risk appropriately as we have throughout this entire pandemic and to ensure the safety of our personnel on the site.
And then your other question around assets I guess own look it's sort of like on till the end at the end of the day I think we have.
We have a very broad suite of products and services that we can deploy the the market. We have some specialized assets that are clearly job specific but we have a very large asset base pro forma for the Q EPS transaction and so I think we.
We can experience a significant amount of growth without necessarily adding.
To the incremental asset base, what I would say is we absolutely believe and consolidation we're going to continue to look and consolidating opportunities yes.
I think we're just now starting to see the industry consolidates since we closed our transaction is really just on the tip of iceberg.
I believe we've seen about four different consolidating transactions occur specifically in the oil field services space. We mentioned one of those on our prior call. The closed right. After we close.
The issue becomes our customers the empty space is consolidating and at a much greater pace than what the oilfield services space has been consolidated debt.
And so.
We have outside market share with certain operators in certain regions and we're going to continue to look for opportunities that are synergistic whether the cost saving synergies, our operational synergies, where things are strategic and fit well with the company.
I think we've got a great track record of of managing and integrating transactions and we're going to continue to look for opportunities to do that.
Hi, Thank you for the question.
Okay.
Yes, not from appreciate it.
This concludes the question and answer portion of the call I would now like to turn it back to management for any final comments.
Thank you once again for joining us on this call and for your interest in Kale ex energy services, we look forward to talking to you again next quarter. Thank you.
Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines and have a wonderful day.
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