Q1 2022 Superior Drilling Products Inc Earnings Call
Greetings and welcome to superior drilling products, Inc. First quarter 2022 financial results.
At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation.
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It is now my pleasure to introduce your host Deborah Pawlowski Investor Relations for superior drilling. Thank you you may begin.
Thank you, Doug and welcome everyone to our first quarter 2022 earnings call. We certainly appreciate your time today and your interest in superior drilling products, Inc.
Joining me on the call are Troy Meier, our chairman and Chief Executive Officer, and Chris Cashman, Our Chief Financial Officer, you should have a copy of the financial results that were released before the market. This morning, as well as the slides that will accompany our conversation today. If you do not these documents can be found on our website at STP.
He I dotcom.
On that deck, if you'll turn to slide two I'll point out that we may make some forward looking statements during the formal discussion as well as during the Q&A session. These statements apply to future events that are subject to risks and uncertainties as well as other factors that could cause actual results to differ materially from what is stated here today. These.
Risks and uncertainties are provided in the earnings release, the slides and other documents filed by the company with the Securities and Exchange Commission.
These documents can be found on our website or at SEC Gov.
I want to also point out that during today's call will discuss some non-GAAP financial measures, which we believe will be useful in evaluating our performance you should not consider the presentation of this additional information in isolation or as a substitute for results prepared in accordance with GAAP.
We have provided reconciliations of non-GAAP with comparable GAAP measures in the tables accompanying the earnings release as well as in the slide deck.
So with that if you'll turn to slide three I will turn it over to Troy to begin Troy.
Thanks, Dan and thanks, everybody for joining us.
This first quarter of 2022, Paul welcome.
Welcome you all here.
First of all I'd like to start off you know as we look at slide three and we talked about the results of the strong execution that drives our enhanced results.
One of the things that.
You know we've been developing.
In our processes as we get let's just start with looking at the manufacturing side of our business and how we've enhanced that and what we've identified as more opportunity.
We made a lot of high end parts for some serve toes that you know in the past we've made these parts and then we wait.
We.
<unk> done our quality check on them in box them up and ship them off.
And what we're doing now is where we are.
Customers are understanding that hey, not only can you make these products.
As far as the machining of these products, but you also have the skill set to.
Finish these products. So why don't you just go ahead and turn to the process.
And that's what we've been pushing we've pushed out all last year are to our customers as far as saying Hey look we make these you know that we can make you a good quality part, but let us finish that art.
And that's that's a big that's a big and important piece as we go forward.
And we see these turnkey opportunities so whether it's you know the.
The the blades the bits the.
Easy case, the reigning shoes everything that we do.
It has to be finished somewhere.
And we have that expertise to do it and if we don't have a skill set that would complete that process to get it done.
We have hired and developed and trained for that skill set so keep that in mind as we go forward and throughout this.
This year and beyond.
You know the opportunities that we're looking to develop.
You know we've talked about.
The.
Uh huh.
Picking up a new machining centers and a new what we call a turnkey product line adoption.
That center now that we've spent that we paid a million one four we now have in place.
This is <unk>.
Creating a lot of excitement with not just our customer base, but within our our team itself.
Because we know every where we're looking now we identify more opportunities so.
There's a turnkey process is going to be exciting for us as we go throughout the year. There's a machining center that we've put in place a it'll be we have it installed where we are.
Finishing the.
Set up of the machine the leveling of the machine and we will be having it up and operational here within the next few weeks.
That's a true.
Fabrication cells start to finish from a raw piece of still to a finished product.
Will all be developed in the cell and this is gonna be the blueprint to go forward and just repeat again and again and again.
So we're very excited about that process. So that's just in the machining.
Side of our business the fabrication side of our business.
But keep in mind any these parts that we machine now go over and go into the side of our business that we called the refurb side, and that's where we do the hard face and you do the Braves.
And we do the finishing of these products so.
We look at it now when we machine our new product in one facility we pass it over to the next facility that finishes that product up and Theres a tremendous opportunity there as we go forward.
Yeah.
The drill N Ream product line is there is still it's still out there still penetrating the market and it's performing very well.
We've got a we're getting more and more demand on the international market place. We're looking for those channel partners internationally that can penetrate the markets.
Still.
Phenomenal tool.
Works extremely well and the operators see the value of that and that shows you know with the <unk>.
With the product line, the new orders that come in for that.
P D C refurbishment.
The legacy business.
There's tremendous opportunity there when we look at this.
The expansion of that.
Specific <unk>.
Alex that we do or.
Or a procedure that we perform for our customers we have now.
Hum dense some operations into one of our facilities you know we look at the buildings numbered one through five but but we have condensed building one in four so that we can now we've opened up.
A whole new building.
For additional work from additional customers and works, we're looking forward to going out there and getting those customers and fulfilling.
No that that.
That demand that we see out there we get a lot of requests for it.
Yeah.
When you look at the.
As we go down the road or abstain you know do we have the right people do we have the right team in place I want you to know that.
The things that we talked about in the third and fourth quarter of last year and the things that we were doing and the people that we were hiring and the system is that we were putting into place.
Really now starting to show and that's it.
It's really out there when you look at our Q M S processes.
It's the whole the whole company the whole team is now.
Involved in that and it and it's really starting to show some good processes and controls.
We brought on a world class H S. Any manager that's going to direct our efforts in the Hs any process we have.
Some of the barriers that we hit as we were trying to penetrate the mid east market with the drill N. Ream was the H S N E.
Portion.
Of this ISO 14001, there was countries that were running our tools and they were running very well, but we got shut down because we did not have.
That portion of the call.
Call of vacation in place.
We now have that individual in place and he's building a team he has built and the processes and controls.
You'll all be very happy with what you see there.
One of the things to keep in mind that as well as you know when we went through the 'twenty 'twenty into 'twenty 'twenty. One you know it was the it was it was it was the biggest downturn in our industry's history.
And when you look at.
The.
Our turnover rate.
And with with amongst our employees amongst our team members.
In July as of 2021 we'd hit a peak.
Now the turnover of.
Six 7%.
Today I'm proud to say, we're down to three 3% and that's with an economy.
Very strong here in Utah.
With a in Burnell we are.
You know in oil and gas community.
And it's building and that's building strong and we're able to retain these employees our team members.
Cuz of the processes and controls and the ownership that they have.
In this company and what they're doing.
And.
It's going to be really really reflect as we go forward throughout this year, you're going to see what.
What the systems are in the managers, what they're doing it's it's you.
You're all going to be.
You're going to like what you see.
So we're very excited about you know when you look at the 70% year over year revenue growth.
We're very excited about that and.
I think you should be too.
I'm going to turn it over to Chris to talk in details and then I'll come back and talk about the outlook and opportunities Chris.
Okay. Thank you Troy and welcome everyone.
Lets continue our review by turning to slide four where we will take a look at that revenue growth quarter over quarter.
You can see that 70% number that Troy just mentioned $4 $1 million is what we did in Q1 2022 and <unk>.
Sequentially. The revenue grew four 5% from Q4 2021 and.
And driven by the operating efficiencies that you just heard about staffing enhancements getting drive people to the right places <unk>.
Processes are those kinds of things internally that we've been doing as.
As well as market demand continues to increase for our tools and services and our expertise.
North America revenue was about 90% of our total revenue.
That's been growing due to the extended industry recovery.
Stronger market share for our drilling ream wellbore conditioning tool and the growing demand for the other related tool and contract services.
Internationally revenues up 16%, then and while it is showing some improvement it's still remains hampered by pandemic related restrictions.
Robl labor recruitment those kinds of things, although we are starting to see things open up a little bit in the middle East.
Still up it's still affecting us in hampering our business.
Are they increasing rig count.
Of course, it's driving demand for our tools and services and then once again just as charges outlined in the recognition of our quality processes and our tools that recognition is expanding.
And and of course, you know the rig count increasing as great average U.
U S rig count for Q1, 2022 was 633 rigs.
Up 74 sequentially and up 240 over last year's first quarter.
And the percentage of those tools continues.
Using the drilling rig tool.
And we expect North American activity to continue to improve throughout 2022.
And at the end of April .
The U S rig count stood at almost 700.
And we continue to be confident as Troy just got through saying.
We can grow and the gradual improvement in rig count, but we don't expect any any booming rig count, but we do expect it to gradually improve.
And and and continue to take share from operators, who are continuing to see drilling efficiencies.
Now that's a let's go to slide five and take a.
Take a look more closely at our tool and contract service businesses, both of which showed significant increases.
Total tool revenue, which which which as you may recall is that some of the other related tool revenue and tool sales and rental revenue that increased by 6% to 6% to $8 million from the prior year period.
Once again this increase reflects the continued growth in rigs using our drill N ream tool as well as increased.
Drilling activity just across the market.
Breaking that down and just looking at tool sales and rental while still strong in the quarter. We did see a dip from the sequential fourth quarter.
Given the timing of orders from our China partner D T O.
DTI continues to do a great job penetrating the market.
And this kind of quarter to quarter change that you see on this chart is it's.
Somewhat typical where the order pattern can be lumpy with the elevated new tool orders one quarter and then the next quarter be kind of a more maintenance oriented.
So still strong strong sales.
We continue to see that.
Looking at the contract services business is up 79% to $1 4 million.
Flex, our our improved capacity to deliver on increased demand for the PDC bit refurbishment business.
In our other tool manufacturing services as.
As well as the increased drilling activity is as we've mentioned.
Now, let's go to slide six and take a look at costs. So you can say that we continue to effectively manage our costs with improved processes and operational efficiencies.
While at the same time, continuing to make strategic investments in our people just destroy kind of outlined.
And so we're we're we're staying on top of our cost and you can say that actually decreased a little bit $35000 decrease or 1% sequentially.
And that as we just got through saying was an with an increase of revenue.
So the decline in the cost of revenue as a percent of revenue.
Once again was the result of strong operating leverage in our business.
Higher volumes combined with a proactive purchasing of steel to combat inflation.
We're also seeing strong operating leverage on the SG&A line.
Which that declined 210 basis points.
From the sequential fourth quarter Dupree.
Depreciation and amortization expense decreased approximately $279000 or 40% year over year and that was primarily the result of fully amortizing a portion of our intangible asset pool and fully depreciating some manufacturing center equipment.
Our attention to the our costs combined with the Harald higher demand in the market for our products and services led to an operating income of a little over $300000 and that's up significantly over the sequential and prior year period.
This is the fourth straight quarter of positive operating income, which is further evidence of the solid progress we're making.
Inflationary pressures pandemic related constraints continue.
Our teams are working hard to optimize processes container drop not processes continues to become more efficient.
Build relationships to expand our presence in the marketplace.
Staffing and training will continue to be a major focus as we move forward.
Now, let's go to slide seven.
We say that our bottom line and adjusted EBITDA results continued to improve net income from the quarter was $150000 a one cent per diluted share.
Up from a loss of $1 1 million or negative four cents per diluted share in the first quarter of last year.
Now net income for the sequential fourth quarter reflected in other income item of $700000, which was associated with the recovery of principal and interest on a fully reserved related party note receivable.
Adjusted EBITDA increased to $1 million.
Or 24, 5% of sales.
That's up from 29% in the sequential fourth quarter.
Further, indicating the robust operating leverage that we have in this business.
Now go on to slide eight we focus on the balance sheet.
Which has continued to struggle with reduced debt levels and higher cash generation cash.
Cash at the end of the quarter was $2 9 million up slightly from the end of 2021.
Cash generated from operations was $1 1 million in the quarter versus 200000 in the year ago quarter, reflecting the higher net income.
We continue to bring total debt down.
Total debt at the end of the quarter is now $2 3 million, which was 5% lower sequentially.
And we have our final 750000 principal payment on our hard rock note. That's due October 2022 this year.
Capital spending was 900000 in the quarter that included a down payment of approximately 300000 to secure that new CNC machine that Troy had mentioned.
His comments.
As he mentioned we took possession of that machine post the balance sheet date. So we now have that machine and wrap it up and running as Troy mentioned in a couple of weeks.
And continued investment in our middle East drilling rain tool fleet.
Our focus remains on deploying capital to enhance the quality of our services and deepen our market penetration.
Training and efficiency remain a priority, particularly as we look to reemerge until the international markets and successfully meet the increasing demands for our tools and services.
Now lastly, I would like to report that our shareholders' equity balance at quarter end continued to improve.
And was that $6 $5 million, which is well within the New York stock Exchange continued listing requirements.
We'll submit our continued listing quarterly report.
To the NYSE today.
And we'll await their final ruling.
Thank you all and all were trying to presentation back to Troy to wrap up with a review of our outlook and opportunities.
All right.
Thanks, Chris.
So as you look at our outlook and opportunities first of all I wanted to get this out there because we've been getting a lot of calls regarding the E. D technologies that we talked about in our last call I want I want you all to understand that this is a prototype.
Startup, it's a it's a great opportunity for us that fits in our diversification model really well, but it's going to take time to develop that and it's going to be strong once we get there, but it's going to take a little bit of time, So just bear with us on that well will continue to work it.
And you'll see some good results in the future on that quite sure.
And so.
Talk about our North American opportunities when we looked at you know we talked about enhancing what we currently do with the product line adoption there is tremendous opportunity there.
On our legacy side, what we're what we do with <unk>.
The repair and refurbishment of tools.
We have a tremendous.
People are asking us all the time can you do more can you do more and where were rising up to that opportunity and where we're going to capture that throughout the year.
Hmm.
When you look at International Chris had mentioned, we built the fleet.
We've proven the tools out in quite a few countries over there and we are now looking in the works of identifying that channel partner, we've got several companies that we've been talking with them.
And I think here in the near future you're going to see some some good announcements regarding to our channel partnership will be within the middle East.
And we're really looking forward to that.
We will still run well over there, we're getting new markets over there where we've gone from just the vertical where we started in these wells over there now into the curve and now we're going into the horizontal where the drilling rig was designed and built for so so it's lots of lots of opportunity there.
So as we look forward.
Two throughout this year of 2022 and beyond you can expect a lot from us and I think you're going to be very pleased with what you see.
Coming up in the in the very near future.
So with that I'm going to turn it over to some Q&A.
Thank you, ladies and gentlemen at this time well be conducting a question and answer session.
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Our first question comes from the line of John Sturges with Oppenheimer. Please proceed with your question.
And thank you for taking my question and nice quarter.
I'm just curious reports our.
Nearing the bottom of usable drilled.
Drilled but uncompleted wells.
And I'm just.
There is a delay and how this reaches you in terms of increased business.
Going through DTI.
I would say December looked like they were up in their inventory getting ready for the future business and so.
So that's.
A bit lumpy can you give me a sense of.
The the reports that March was a very strong period for fracking companies. Some are now booked fully for the year and when it's likely to filter back to you with.
More increased drilling now that that does seem to be.
Not available today.
Sounds to me that we're going to have to really.
Be drilling wells to completion as opposed to using up inventory.
So that I think that's a very good question John as you know, we've always kept our eyes on the DUC inventory.
As we watch those go down we know at some point in time.
They're now going to start turning to see turning their focus on drilling new wells. So what we see is you know where we're a little bit ahead of the information that we get on new customers that are coming on rig count.
You know it follows with our communications with our.
Channel partners.
They say, hey look you've got to start ramping up in.
And each sector of your business because not only do we need new tools for to meet the drilling demand, but we're also going to need because theres going to be more tools in the whole in being reused.
Reused week, when you've got it up that side of your business as well so yeah that the the request from our customer base is very loud and we hear it very well and they.
They are gearing up.
Not only I mean every aspect of our business so.
I believe that we have positioned ourselves very well for this growth opportunity that we're going to see because it is going to be new wells, they're going to have to drill were going to see more rigs stand out.
And.
We're very excited about that opportunity.
I'm just curious do you have.
Can you provide any guidance when it's likely you'll have to increase capacity through additional hiring.
Or can you handle what you see for the next.
Say several quarters.
We are in we continue to hire because.
Every single day, we're being asked to increase our capacity we have we've managed our capacity very well.
We've got the machines in place this new purchase of the machining.
Center.
So theres going to be the hearts of our turnkey process is going to be a big plus for some of our capacity.
Because a lot of the bigger drilling tool products, we were making there we do make was done on two machines out of all the machines. We have there really hitting two of them really hard.
And so our days to deliver was out there quite a ways you know when you look at.
Most of the surge pose when they're asking us to do stuff.
They're not going to let you take them out.
More than 45 days as far as when you get them a date when youre going to have the product done but as soon as we we say okay. This one stomach ship until you've Bam we've got another one.
What this new product line.
Processes that we're putting in place will also absorb and take up some of that capacity off with those two large machine.
Machining centers, they've been doing a lot of the work we were able to do that now on the spare capacity. We have in this turnkey process. So that is going to be a major plus but the when we look at the team members that actually hands on the appraisers the welders.
Fabricators.
We continue to hire.
Ross says that each department every single month, we're looking to bring in more and more to keep up with that capacity and our HR team. That's there has done a marvelous job bringing them in place.
So it's not.
It's not that or are we going to hire more and when its just a steady process of keeping up to to the capacity that we're asking you know there's a training process that has to happen all of those people that were talking to were hired in Q3 and Q4 of last year.
Now, they're knocking it out of the park, they're doing a tremendous job so.
We have to hire people today, so that they can be very productive.
In a quarter or two from today, because there's a lot of training that's involved in with what we do.
Yeah. Thank you I appreciate it.
Thank you.
Yeah.
Our next question comes from the line of John Bair with Sun Wealth Advisors. Please proceed with your question.
Thank you, it's ascend wealth advisors that's okay.
Good morning Troy.
And Chris Good morning.
Hey.
So the international area seems to be kind of flat lining and I'm just wondering Chris I think.
Talk a little bit about it.
Appears to be opening up do you really get a sense that.
Some of the restrictions travel restrictions and so forth or are easing up there to where you can.
Leverage here.
You're out opportunities there.
You know I don't think I don't think John It's obviously the travel is really really stifled as throughout that.
<unk> 2021.
The pandemic that we've that we've gone through.
The big problem that we had there is is that our engineers couldn't get out and get face to face when we go from Dubai to Oman, or two kuwait or to to cut or we could we couldnt get face to face with those customers and that that's a big deal.
And.
Where we've been focusing on since.
Q3 of last year, it was identifying that channel partner.
That already has those people in place.
Sales and marketing team.
We tell people that write upfront that's not what we do that's not who we are.
There's there's channel partners that do that much better than we do.
So we've been identifying those channel partners that we thought would be the best fit for this and I think that that we have identified that channel partner and and I think that you know what.
We've been.
Just making sure we have the right inventory, making sure we have the right tech support in place, which we do we developed a fifth.
Phil dull grading system, that's all digital so it doesn't matter if the tool is run in Oman, and Kuwait or it.
AVO Darby.
We have eyes on that tool when it still greater than we can tell that customer.
Here's the there's an algorithm that runs that says you can run this tool again or no you need to send that back to us and our technical team that we've put in place which is a very good one by the way.
They're ready to hand, this to a channel partner now and let him rock and we're excited for that opportunity.
Okay.
Given.
Given that it seems that you have more.
Activity going on in North America.
Particularly with some opportunities opening up outside of your oil and gas traditional oil and gas at least that's the.
Since I get from from Premier you're a press release.
Is that really expanding quite a bit.
As far as the opportunities outside of oil and gas.
Yep Yep.
To be honest with you, it's expanding but but we.
We have not had the time to expand as rapidly as is it would like us to.
You know the oil and gas the marketplace that we've been in for 41 years when it needs you it needs you bad.
And when it doesn't of course, you know the other side to that.
And we are still we're still focused on diversification.
But the majority of our time is meeting the demand and keeping up with the demand that our customers need in the oil and gas, but we're not losing focus that.
This uptick will will eventually go down like they always do and when they do we need to be prepared for that and that's still where we're focusing on that you know one of the things.
That you look at it as you know we've talked in the past about our strider product line right. We got the Strider out you all heard me talk about Strider This cool technology.
It is its phenomenal technology and we've got some good patents around it and.
And we built the first four of those tools that we sold to market in January or February of 2020.
So a very high end customer, who then that whole operation was shut down before they even got to use those they tested them in and had phenomenal results with them.
Well.
They just called here a couple of months ago, and said Hey, this product.
<unk> kicking back up we got these tools.
We're going to put them in the home, we're going to hopefully they work good force. They they worked for them extremely well and now the demand for that product line that wasn't quite ready to resurrect yet we know what is a good one and we know there's a lot of possibilities. There. So the people that we have working on this diversification model I've had to.
So off of that temporarily and get in these tools that are now coming in need to be repaired on this strider coiled tubing product line.
And they're also saying get us more tools, we have we have a strong demand for that product line and request from customers.
So that's one of the that's one of the examples I like to give you when we when we're focusing on some diversification with a with a with a group of individuals. But then this comes back and we say no. We've got to we've got to support that product line, that's going to be a good one.
And.
And then we will get back to we're still looking at the diversification, but we'll get into it heavier as we get into the third and fourth quarter. After we start ramping up this the strider product line right.
And so with the increased demand for probiotics are you able to.
Yeah.
Are you running your production line on three shifts now or are you doing at 12, and 12 or you know.
How are you how are you addressing that.
But one of the things besides just hiring people yeah.
You know as that.
Again, I hate I hate to talk about 2020, because it's just I'd like to just.
You know move on from there get it but we learned a lot we learned a lot about our business. We learned a lot about our managers our team players or are you know our company as a whole.
And so as we.
Looked at how do you retain them.
People as we as we are in this environment that we were in the last two years.
One of the things that that our HR team came up with our managers as a work schedule.
It's a 24 seven.
In our in our machining side of the business our fabrication side of the business. So we we have teams working 24 seven now that's not <unk>.
Even close to come and maxing out our capacity because we have machining cells.
That that still can be utilized within that 24 hours a day as we hired more techs more machinist.
To operate these cells, we've got plenty of capacity there, but yes, we do run 24, seven and the machining side of the business.
And it's on a it's on a schedule that that our team finds very appealing they like it.
And it's helping with.
Retaining our quality team.
Team members.
And I think we're probably going to roll that into the REIT.
Repair and re manufacturing side of the company as well I know our managers are studying that now, but it's it seems to have a lot of appeal.
For the for the workers are today.
Great.
Last quick question and that is you put a down payment and apparently took delivery of your $1 1 million machine. How is the rest of the balance of that being taken care of is it.
Okay.
Yeah, yeah payment or over extended out for a period of time now where we've got a financing agreement in place with the manufacturer of that machine Zac.
We will finance the other 70%, so basically 30% down we used cash for the down payment.
Alright.
They will finance.
70% and the machine itself is all about 956000, but but the additional 150000 or so to get up to the $1 1 million. We gotta do special worked reinforced concrete where the machine sits we've got what's called rigging and powering it up and just other miscellaneous costs.
With with getting it up and running so so basically 956000 or 70% of that number is what will be financed which is roughly 650000 and 660000, but that that's an agreement we've already got in place that'll be up.
Fixed right.
The REIT does.
Float until we start off with final acceptance and so far I mean, we stay real close to amaze like financing and so far the REIT has not moved it's.
It's not tied to prime thank goodness.
But it hasn't moved so far.
We are where we're hopeful that it won't move until we get to the final acceptance date as Troy mentioned earlier, that's probably a couple of weeks and then once we accept then it'll be a fixed rate of five 5% over five years five years, okay. Great. Thank you much.
Get out of them.
You bet is here.
Thank you.
As a reminder, it is star one to ask a question.
Our next question comes from the line of Mark Kaufman with MLK investment management.
Please proceed with your question. Thank you very much for taking my call excuse me.
Simple question, so the new machinery, if if I get this correct. It basically will allow you to.
Add value a value add to the drills that youre currently producing by expanding the process.
And it also will be enable you to increase production overall and the plant is that right.
That is right.
Hum.
That's a win win very good thank.
Thank you yes. It is it's a win win.
It also allows us mark too to take on some product lines that that may be the machinery.
We had in place maybe it wasn't as efficient as it is it is it could have been for that specific product line and so we identified a product line that we thought would be really really a good one for us to adopt and and.
Identified the machine to do that efficiently. So it's some additional work that we have never done before.
Interesting. Thank you.
Thank you.
There are no further questions in the queue I'd like to turn the call back to management for closing remarks.
Again, I'd like to thank everybody for you now.
Being part of the superior community and.
And we appreciate all your support.
So we're very excited about what we've got in place and the team that we've got in place and the maturity of the team and bringing in the right people and putting them in the right positions and getting the certifications that we needed to get you know we spent the last two years getting that all in place we still got to get the Hs any ISO <unk>.
14001 in place, but I'm quite certain we will have that by by year end.
So.
Look forward to our next earnings call.
Again, thank you all for all your participation.
Thank you have a good weekend.
Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation.
Disconnect your lines at this time and have a wonderful day.
Yes.
Yeah.