Q2 2026 Total Energy Services Inc Earnings Call

August 13, 2026

Speaker #1: All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. If you would like to ask a question during this time, simply press 'star' followed by the number 1 on your telephone keypad.

Operator 2: Hello, and thank you for standing by. My name is Lacey and I will be your conference operator today. At this time, I would like to welcome everyone to the Q2 2026 results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again. Thank you. I would now like to turn the call over to Daniel Halyk, President and CEO. Please go ahead.

Operator: Hello, and thank you for standing by. My name is Lacey and I will be your conference operator today. At this time, I would like to welcome everyone to the Q2 2026 results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Daniel Halyk, President and CEO. Please go ahead.

Speaker #1: If you would like to withdraw your question, press star 1 again. Thank you. I would now like to turn the call over to Daniel Hallick, President and CEO.

Speaker #1: Please go ahead.

Speaker #2: Thank you, and good morning. Welcome to Total Energy Services' second quarter 2026 conference call. Present with me is Yulia Gorbach, Total's VP of Finance and CFO.

Speaker #2: We will review with you Total's financial and operating highlights for the three months ended June 30, 2026, and then provide an outlook for our business and open up the phone lines for any questions.

Daniel Halyk: Thank you, and good morning and welcome to Total Energy Services' Q2 2026 conference call. Present with me is Yuliya Gorbach, Total's Vice President, Finance and CFO. We will review with you Total's financial and operating highlights for the three months ended 30 June 2026, and then provide an outlook for our business and open up the phone lines for any questions. Yuliya, please go ahead.

Speaker #2: Yulia, please go ahead.

Speaker #3: Thank you, Dan. During the course of this conference call, information may be provided containing forward-looking information concerning Total’s projected operating results, anticipated capital expenditure trends, and projected activity in the oil and gas industry.

Yuliya Gorbach: Thank you, Dan. During the course of this conference call, information may be provided containing forward-looking information concerning Total's projected operating results, anticipated capital expenditure trends, and projected activity in the oil and gas industry. Actual events or results may differ materially from those reflected in Total's forward-looking statements due to a number of risks, uncertainties, and other factors affecting Total's businesses and the oil and gas industry in general. These risks, uncertainties, and other factors are described under the heading risk factors and elsewhere in Total's most recently filed annual information forms and other documents filed with Canadian provincial securities authorities that are available to the public at www.sedarplus.ca. Our discussions during this conference call are qualified with reference to the notes to the financial highlights contained in the news release issued yesterday. Unless otherwise indicated, all financial information in this conference call is presented in Canadian dollars.

Speaker #3: Actual events or results may differ materially from those reflected in Total's forward-looking statements, due to a number of risks, uncertainties, and other factors affecting Total's businesses and the oil and gas industry in general.

Speaker #3: These risks, uncertainties, and other factors are described under the heading 'Risk Factors' and elsewhere in Total's most recently filed Annual Information Form and other documents filed with Canadian provincial securities authorities, which are available to the public at www.crplus.ca.

Speaker #3: Our discussions during this conference call are qualified with reference to the notes to the financial highlights contained in the news release issued yesterday. Unless otherwise indicated, all financial information in this conference call is presented in Canadian dollars.

Speaker #3: Total Energy's results for the three months ended June 30, 2026, represent record quarterly results driven by continued strong North American demand for natural gas compression and process equipment, and the deployment of upgraded drilling and service rigs in Australia and Canada.

Yuliya Gorbach: Total Energy's results for the three months ended 30 June 2026, represent record quarterly results, driven by continued strong North American demand for natural gas Compression and Process Services equipment and the deployment of upgraded drilling and service rigs in Australia and Canada. On a year-over-year basis, consolidated Q2 revenue increased by 31%. Contributing to this increase was CAD 49.1 million of increased CPS segment revenue, CAD 23.5 million from CDS segment, and CAD 3.4 million from well servicing, as well as CAD 2.5 million from RTS segment. Q2 EBITDA increased CAD 15.5 million compared to 2025, driven by increased activity and improved fabrication margins in the CPS segment and the deployment of upgraded rigs at the higher day rates in Australia and Canada.

Speaker #3: On a year-over-year basis, consolidated second quarter revenue increased by 31%. Contributing to this increase was $49.1 million of increased CPS segment revenue, $23.5 million from the CDS segment, $3.4 million from well servicing, as well as $2.5 million from the RTS segment.

Speaker #3: Second quarter EBITDA increased $15.5 million compared to 2025, driven by increased activity and improved fabrication margins in the CPS segment, as well as the deployment of upgraded rigs at a higher day rate in Australia and Canada.

Speaker #3: Positively impacting 2026 second quarter financial results, was a 3 million dollars year-over-year increase in game sale property plant equipment following completion of the disposition of the assets related to companies United States well-servicing business that was discontinued in January 2026.

Yuliya Gorbach: Positively impacting 2026 Q2 financial results was a CAD 3 million year-over-year increase in gain on sale of property plant equipment following completion of the disposition of the assets related to company's United States well servicing business that was discontinued in January 2026. Partially offsetting this gain was CAD 2.3 million of non-recurring expenses in the US contract drilling business related to rig reactivation and resolution of several legacy legal disputes. Geographically, 43% of Q2 revenue was generated in Canada, 34% in the United States, and 23% in Australia as compared to the Q2 of 2025 when 38% of consolidated revenue was generated in Canada, 38% in the United States, and 24% in Australia. By business segment, Compression and Process Services contributed 55% of Q2 consolidated revenue, followed by the CDS segment at 29%, well servicing at 10%, and the RTS segment at 6%.

Speaker #3: Partially offsetting this gain with $2.3 million of non-recurring expenses in the US contract drilling business, related to rig reactivations and the resolution of several legacy legal disputes.

Speaker #3: Geographically, 43% of second quarter revenue was generated in Canada, 34% in the United States, and 23% in Australia, as compared to the second quarter of 2025 when 38% of consolidated revenue was generated in Canada, 38% in the United States, and 24% in Australia.

Speaker #3: By business segment, Compression Process Services contributed 55% of second quarter consolidated revenue, followed by the CDS segment at 29%, Well-Servicing at 10%, and the RTS segment at 6%. For 2025, the Compression Process Services segment generated 53% of second quarter consolidated revenue, followed by CDS at 28%, Well-Servicing at 12%, and the RTS segment at 7%.

Yuliya Gorbach: In comparison, for Q2 2025, the Compression and Process Services segment generated 53% of Q2 consolidated revenue, followed by CDS at 20%, well servicing at 12%, and RTS segment at 7%. Q2 consolidated gross margin was 22% in 2026, which was 157 basis points lower than 2025. Contributed to this decline was a 223 basis point increase in Q2 revenue contribution from CPS segment, as this business segment historically generates lower margins than other segments. A year-over-year increase in CDS segment and Australian well servicing margins partially offset a decline in CPS and RTS segment margins. Q2 CDS segment revenue increased 33% compared to 2025. A 24% year-over-year increase in operating days was further supported by a 7% increase in segment revenue per operating day.

Speaker #3: Second quarter consolidated gross margin was 22% in 2026, which was 157 basis points lower than 2025. Contributing to this decline was a 223 basis point increase in second quarter revenue contribution from the CPS segment, as this business segment historically generates lower margins than other segments.

Speaker #3: A year-over-year increase in CDS segment and Australian well-servicing margins partially offset a decline in CPS and RTS segment margins. Second quarter CDS segment revenue increased 33% compared to 2025; a 24% year-over-year increase in operating days was further supported by a 7% increase in segment revenue per operating day.

Speaker #3: Second quarter pricing increased compared to 2025, due primarily to increased pricing for upgraded rigs in Australia and Canada, and stable pricing in the United States.

Speaker #3: Second quarter CDS segment EBITDA increased by 39%, and segment EBITDA margin increased by 110 basis points, compared to 2025, due to increased utilization and pricing that was partially offset by $2.3 million of non-return expenses in the United States. Excluding these non-return expenses, second quarter segment EBITDA increased 54% and segment EBITDA margin increased by 333 basis points compared to 2025.

Yuliya Gorbach: Q2 pricing increased compared to 2025, due primarily to increased pricing to upgraded rigs in Australia and Canada and stable pricing in the United States. Q2 CDS segment EBITDA increased by 39%, and segment EBITDA margin increased by 110 basis points compared to 2025, due to increased utilization and pricing that was partially offset by CAD 2.3 million of non-recurring expenses in the United States. Excluding these non-recurring expenses, Q2 segment EBITDA increased 54% and segment EBITDA margin by 333 basis points compared to 2025. RTS segment revenue for Q2 increased 16% compared to 2025. This was the result of a US acquisition completed in June of 2025 and increased industry activity in Canada.

Speaker #3: RTS segment revenue for the second quarter increased 16% compared to 2025. This was the result of a US acquisition completed in June 2025 and increased industry activity in Canada.

Speaker #3: Higher costs associated with the change in the mix of equipment, operating competitive market conditions, and this segment's relatively high fixed cost structure resulted in a 4% year-over-year decline in second quarter segment EBITDA and a 594 basis point decrease in segment EBITDA margin.

Yuliya Gorbach: Higher costs associated with the change in the mix of equipment operating, competitive market conditions, and this segment's relatively high fixed cost structure resulted in a 4% year-over-year decline in Q2 segment EBITDA and 594 basis point decrease in segment EBITDA margin. Q2 CPS segment revenue increased by 37% compared to 2025, driven by increased fabrication sales and higher parts and service activity. Year-over-year, the Q2 CPS segment EBITDA increased by CAD 4.7 million, or 21%. EBITDA margin during Q2 2026 was 193 basis points lower compared to 2025, primarily due to the year-over-year decline in higher margin rental revenues following the sale of several rental units in 2025. The fabrication sales backlog at 30 June 2026, was CAD 554.5 million, an 82% increase compared to CAD 303.9 million backlog at 30 June 2025, and 24% higher than CAD 446.9 million backlog at 31 March 2026.

Speaker #3: Second quarter CPS segment revenue increased by 37% compared to 2025, driven by increased fabrication sales and higher parts and service activity. Year-over-year, second quarter CPS segment EBITDA increased by $4.7 million, or 21%.

Speaker #3: EBITDA margin during the second quarter of 2026 was 193 basis points lower compared to 2025, primarily due to the year-over-year decline in higher-margin rental revenues following the sale of several rental units in 2025.

Speaker #3: The fabrication sales backlog at June 30, 2026, was $554.5 million, an 82% increase compared to the $303.9 million backlog at June 30, 2025, and 24% higher than the $446.9 million backlog at March 31, 2026.

Speaker #3: In well-servicing, a 7% increase in revenue per service hour combined with the 4% increase in service hours resulted in an 11% year-over-year increase in second quarter segment revenue.

Speaker #3: Increased Australian and Canadian activity was partially offset by a substantial decline in U.S. activity following the discontinuance of U.S. well-servicing operations in January 2026. Higher pricing, increased fleet utilization, and cost optimization following the upgrade of several rigs over the past year resulted in a substantial improvement in second-quarter Australian operating income, which together with the cessation of operating losses in the United States drove a 194% year-over-year increase in segment EBITDA.

Yuliya Gorbach: In well servicing, a 7% increase in revenue per service hour, combined with the 4% increase in service hours, resulted in an 11% year-over-year increase in Q2 segment revenue. Increased Australian and Canadian activity was partially offset by a substantial decline in US activity following the discontinuance of US well service operations in January 2026. Higher pricing increased with utilization and cost optimization following the upgrade of several rigs over the past year, resulting in a substantial improvement in Q2 Australian operating income, which together with the cessation of operating losses in the United States, drove a 194% year-over-year increase in segment EBITDA. Total Energy's consolidated financial position remains very strong. At 30 June 2026, Total Energy had CAD 81.9 million of positive working capital, including CAD 50.5 million of cash. Cash on hand exceeded bank debt by CAD 25.5 million at 30 June 2026.

Speaker #3: Total Energy's consolidated financial position remains very strong. At June 30, 2026, Total Energy had $81.9 million of positive working capital, including $550.5 million of cash.

Speaker #3: Cash on hand exceeded bank debt by 25.5 million dollars at June 30, 2026. Total Energy's bank covenants consist of maximum senior debt to trailing 12 months and define EBITDA.

Speaker #3: The bank covenant defines EBITDA to interest expense of three times as a minimum. At June 30, the company's senior bank debt to bank EBITDA ratio was negative 0.07, as Total was in a cash position, and the bank interest coverage ratio was 100.02 times.

Yuliya Gorbach: Total Energy's bank covenants consist of maximum senior debt to trailing 12-month bank-defined EBITDA of 3 times and a minimum bank-defined EBITDA to interest expense of 3 times. At 30 June, the company's senior bank debt to bank EBITDA ratio was -0.07, as Total was in a cash position, and the bank interest coverage ratio was 100.02 times.

Yuliya Gorbach: Total Energy's bank covenants consist of maximum senior debt to trailing 12-month bank-defined EBITDA of 3x and a minimum bank-defined EBITDA to interest expense of 3x. At 30 June, the company's senior bank debt to bank EBITDA ratio was -0.07, as Total was in a cash position, and the bank interest coverage ratio was 100.02x.

Speaker #1: Thank you, Yulia. We are pleased with our second quarter results. Despite the usual slowdown in Canadian field activity during spring breakup, our substantial investment over the past two years to upgrade our drilling and service rig fleets in Australia and Canada, combined with strong North American demand for compression and process equipment, resulted in Total achieving record quarterly revenue, EBITDA, and net income.

Daniel Halyk: Thank you, Yuliya. We are pleased with our Q2 results. Despite the usual slowdown in Canadian field activity during spring breakup, our substantial investment over the past 2 years to upgrade our drilling and service rig fleets in Australia and Canada, combined with strong North American demand for compression and process equipment, resulted in Total achieving record quarterly revenue, EBITDA, and net income. Our share repurchases over the past year amplified these results on a fully diluted per-share basis. Our Compression and Process Services segment continues to see strong demand for its products and services. The fabrication sales backlog, which grew by 24% during Q2 to a record CAD 554.5 million at 30 June, provides visibility into 2028 and current quoting activity remains vibrant.

Speaker #1: Our share repurchases over the past year amplified these results on a fully diluted per-share basis. Our Compression and Process Services segment continues to see strong demand for its products and services.

Speaker #1: The fabrication sales backlog, which grew by 24% during the second quarter to a record 554.5 million dollars at June 30, provides visibility into 2028 and current quoting activity remains vibrant.

Speaker #1: Expansion of our US fabrication capacity in Weirton, West Virginia, is on time and on budget, with facility construction scheduled to be completed by the first quarter of 2027.

Speaker #1: The substantial investment made over the past two years to upgrade our Australian-Canadian drilling and service rig fleets continued to bear fruit during the second quarter, highlighted by a significant improvement in the financial performance of our Australian well-servicing business and Canadian drilling rig market share gains.

Daniel Halyk: Expansion of our US fabrication capacity in Weirton, West Virginia, is on time and on budget, with facility construction scheduled to be completed by Q1 2027. The substantial investment made over the past 2 years to upgrade our Australian Canadian drilling and service rig fleets continued to bear fruit during Q2, highlighted by a significant improvement in the financial performance of our Australian well servicing business and Canadian drilling rig market share gains. During H1 2026, we invested CAD 65.8 million to maintain and grow our business. At the same time, we returned CAD 22.5 million to our shareholders by way of dividends and share buybacks and reduced bank debt by CAD 30 million. Total exited Q2 in a very strong financial position with CAD 50.5 million of cash and CAD 150 million of credit available under our revolving bank credit facilities.

Speaker #1: During the first half of 2026, we invested 65.8 million dollars to maintain and grow our business. At the same time, we returned 22.5 million dollars to our shareholders by way of dividends and share buybacks, and reduced bank debt by 30 million dollars.

Speaker #1: Total exited the second quarter in a very strong financial position, with $50.5 million of cash and $150 million of credit available under our revolving bank credit facilities.

Speaker #1: Our financial strength and flexibility ensure we are able to continue to fund attractive investments while, at the same time, providing our owners with industry-leading shareholder returns through dividends and share buybacks.

Speaker #1: In that regard, our board of directors approved a 32.7 million dollar increase to our 2026 capital budget, 24.9 million dollars of this increase represents growth capital, with 15.5 million dollars budgeted for the recertification and upgrade of three service rigs and one drilling rig in Canada, and one drilling rig in Australia.

Daniel Halyk: Our financial strength and flexibility ensures we are able to continue to fund attractive investments while at the same time providing our owners with industry-leading shareholder returns through dividends and share buybacks. In that regard, our board of directors approved a CAD 32.7 million increase to our 2026 capital budget. CAD 24.9 million of this increase represents growth capital, with CAD 15.5 million budgeted for the recertification and upgrade of 3 service rigs and 1 drilling rig in Canada and 1 drilling rig in Australia. The remaining CAD 9.4 million is directed towards the purchase and refurbishment of 44 pieces of major rental equipment in the RTS segment for deployment throughout North America.

Daniel Halyk: Our financial strength and flexibility ensures we are able to continue to fund attractive investments while at the same time providing our owners with industry-leading shareholder returns through dividends and share buybacks. In that regard, our board of directors approved a CAD 32.7 million increase to our 2026 capital budget. CAD 24.9 million of this increase represents growth capital, with CAD 15.5 million budgeted for the recertification and upgrade of three service rigs and one drilling rig in Canada and one drilling rig in Australia. The remaining CAD 9.4 million is directed towards the purchase and refurbishment of 44 pieces of major rental equipment in the RTS segment for deployment throughout North America.

Speaker #1: The remaining 9.4 million dollars is directed towards a purchase and refurbishment of 44 pieces of major rental equipment in the RTS segment for deployment throughout North America.

Speaker #1: 2026 maintenance capital has been increased by $7.8 million and is being directed towards the replacement of five heavy trucks and 32 pieces of major rental equipment in the RTS segment, as well as additional equipment maintenance in Australia due to higher-than-budgeted activity levels.

Daniel Halyk: 2026 maintenance capital has been increased by CAD 7.8 million and is being directed towards the replacement of five heavy trucks and 32 pieces of major rental equipment in the RTS segment, as well as additional equipment maintenance in Australia due to higher than budgeted activity levels. Including CAD 24.5 million of capital commitments carried forward from 2025, projected 2026 capital commitments total CAD 144.6 million, of which CAD 102 million constitutes growth capital and CAD 42.6 million maintenance capital. CAD 65.8 million of capital commitments have been funded to 30 June 2026, and we intend to fund the remaining CAD 78.8 million with cash on hand and cash flow from operations. I would now like to open up the phone lines for any questions.

Speaker #1: Including $24.5 million of capital commitments carried forward from 2025, projected 2026 capital commitments total $144.6 million, of which $102 million constitutes growth capital and $42.6 million is maintenance capital.

Speaker #1: $65.8 million of capital commitments have been funded to June 30, 2026, and we intend to fund the remaining $78.8 million with cash on hand and cash flow from operations.

Speaker #1: I would now like to open up the phone lines for any questions.

Speaker #2: At this time, I would like to remind everyone that in order to ask a question, please press star 1 on your telephone keypad. Your first question comes from the line of Joseph Schechter with Total Energy.

Speaker #2: You may go ahead.

Operator 2: At this time, I would like to remind everyone, in order to ask a question, please press star one on your telephone keypad. Your first question comes from the line of Josef Schachter with Total Energy. You may go ahead.

Operator: At this time, I would like to remind everyone, in order to ask a question, please press star one on your telephone keypad. Your first question comes from the line of Josef Schachter with Total Energy. You may go ahead.

Speaker #3: Congratulations. Hi, I'm the board.

Speaker #1: We can't afford.

Speaker #3: We can't afford Joseph on our payroll.

Speaker #1: Well, first thing, Dan and Yulia, congratulations on a fabulous quarter, and much better than your peers, so that's fabulous. Let me start with Australia.

Josef Schachter: Congratulations. Am I on the board?

Daniel Halyk: We've got four Joseph on our payroll.

Daniel Halyk: We've got four Josef on our payroll.

Speaker #1: Is there new basins that are very prolific like we have the Clearwater and the Montney that are really helping you grow, or is it just that your equipment is just so much more modern and you've proved to the clients that you can do a better job, and a more efficient job, and that's why your business is picking up in Australia?

Josef Schachter: Well, first thing, Daniel Halyk, congratulations on a fabulous quarter and much better than your peers. So that is fabulous. Let me start with Australia. Is there new basins that are very prolific, like we have the Clearwater and the Montney, that are really helping you grow? Or is it just that your equipment is just so much more modern and you prove to the clients that you can do a better job and a more efficient job and that is why your business is picking up in Australia?

Josef Schachter: Well, first thing, Daniel, congratulations on a fabulous quarter and much better than your peers. So that is fabulous. Let me start with Australia. Is there new basins that are very prolific, like we have the Clearwater and the Montney, that are really helping you grow? Or is it just that your equipment is just so much more modern and you prove to the clients that you can do a better job and a more efficient job and that is why your business is picking up in Australia?

Speaker #3: So, no to the first question. Hopefully, yes to the second question. I would say, you know, we've invested a significant amount of capital in our fleet in Australia, particularly the Saxon fleet that we acquired about two years ago.

Daniel Halyk: So no to the first question, hopefully yes to the second question. I would say we have invested a significant amount of capital in our fleet in Australia, particularly the Saxon fleet that we acquired about two years ago. So we have been pulling those rigs off the fence steadily. I would say most of the growth has been gain in market share. There has been some market expansion. As you know, the natural gas prices in Southeast Asia are pretty strong. Domestic prices are strong. There is some political activity going on in Australia where you have a kind of the my fair share thing similar to what happened in Alberta a few years ago. So that tempers things a bit. But overall, I would say, Josef, it is just a stable, steady market and we have worked hard to try and do a good job and deliver value to our customers.

Speaker #3: And so we've been pulling those rigs off the fence steadily, and I would say most of the growth has been gain in market share.

Speaker #3: There's been some market expansion. As you know, the natural gas prices in Southeast Asia are pretty strong. Domestic prices are strong as well. There's some political activity going on in Australia, where you have a kind of the royal "My Fair Share" thing, similar to what happened in Alberta a few years ago.

Daniel Halyk: As you know, the natural gas prices in Southeast Asia are pretty strong. Domestic prices are strong. There is some political activity going on in Australia where you have a kind of the my fair share thing similar to what happened in Alberta a few years ago. So that tempers things a bit. But overall, I would say, Josef, it is just a stable, steady market and we have worked hard to try and do a good job and deliver value to our customers.

Speaker #3: So that tempers things a bit, but overall I would say, Joseph, it's just a stable, steady market. You know, we've worked hard to try and do a good job and deliver value to our customers.

Speaker #3: So nothing too magical there.

Speaker #1: Okay, next question on compression, with a $554 million backlog. How long of a backlog do you really feel comfortable with? And if you start getting to the point where it gets too late, are you going to move to more higher-margin products and remove some of the lower-margin products from the lineup?

Daniel Halyk: So nothing too magical there.

Josef Schachter: Okay. Next question on compression. With the CAD 554 million of backlog, how long of backlog do you really feel comfortable with? If you start getting to the point where it gets too late, are you going to move to more higher margin products and remove some of the lower margin products from the lineup?

Speaker #3: You know, so first of all, we're seeing—you know, we commented that the current backlog takes us into 2028. The lead times on major components, notably engines, are naturally going to push and stretch this further.

Daniel Halyk: First of all, we are seeing, we commented the current backlog takes us into 2028. The lead times on major components, notably engines, is naturally going to push and stretch this further. But our reported backlog is signed contracts, which those are firm, and so that is a firm outlook. Obviously, in a stronger market, you tend to gravitate towards how you allocate scarce resources. You focus on the best margin work. The flip side is what we can do in the medium term is somewhat dictated by the availability of inputs, notably engines. So we are managing that very tightly and trying to anticipate where the market is going to be over the next four years, literally. We are not perfect, but I think our group has done a pretty good job there.

Speaker #3: But our reported backlog is signed contracts, which—as those are firm—so, you know, that is a firm outlook. Obviously, in a stronger market, you tend to gravitate toward, you know, how do you allocate scarce resources?

Speaker #3: You focus on the best margin work. You know, the flip side is what we can do in the medium term is somewhat dictated by the availability of inputs, notably engines. And so, you know, we're managing that very tightly and trying to anticipate where the market's going to be over the next four years, literally.

Speaker #3: So, you know, we're not perfect, but I think our group has done a pretty good job there. And, you know, with Weirton coming on stream in Q1, we'll be wrapping up post that, which honestly ties in reasonably well with kind of the lead times on engines.

Speaker #3: And that's obviously a constraint on near-term activity. But, you know, we're managing it like the whole industry is.

Daniel Halyk: With Weirton coming on stream in Q1, we will be wrapping up post that, which honestly ties in reasonably well with kind of the lead times on engines. That is obviously a constraint on near-term activity, but we are managing it like the whole industry is.

Speaker #1: Yeah. Can you talk about your thoughts on the outlook in both the US and Canada? You know, we've got these robust commodity prices. Most people's E&P budgets were much lower.

Speaker #1: Are you getting people wanting to extend their term of rigs? Are they looking to get you to upgrade and they pay? You know, how do you see the comparison between Canada and the States, and, you know, allocation of capital?

Josef Schachter: Yeah. Can you talk about your thoughts of the outlook in both US and Canada? We have these robust commodity prices. Most people's E&P budgets were much lower. Are you getting people wanting to extend their term of rigs? Are they looking to get you to upgrade and they pay? How do you see the comparison between Canada and the States and allocation of capital?

Speaker #3: I would say Canada was ahead of the States in terms of the ramp-up. You saw that in Q2, driven largely by oil and liquids plays.

Speaker #3: I would say, right now Canada is a pretty strong market. You know, we have the second double-to-triple upgrade underway, and there is very, very strong demand for that rig.

Daniel Halyk: I would say Canada was ahead of the States in terms of the ramp-up. You saw that in Q2, driven largely by oil and liquids plays. I would say right now, Canada is a pretty strong market. We have the second double to triple upgrade underway, and there is very strong demand for that rig. I expect we will have that contracted perhaps sooner than we would have liked based on customer demand, but that is a good thing. The US is catching up. You are seeing that in the US rig count, particularly in Texas, New Mexico. It is definitely starting to pick up. But I would say it was behind Canada. Overall, obviously if you have a crash in oil prices, all bets are off.

Speaker #3: I expect we'll have that contracted, perhaps sooner than we would like, based on customer demand. But that's a good thing. The US is catching up.

Speaker #3: You're seeing that, in the U.S., rig count—particularly in Texas, New Mexico—is definitely starting to pick up. But it, you know, I would say it was behind Canada.

Speaker #3: So overall, you know, obviously if you have a crash in oil prices, all bets are off, but right now it looks like we should have a pretty good back half with the North American rig count.

Speaker #3: You know, steadily creeping up—not going crazy—but showing good, steady improvement. And our rig upgrades in Canada have really played well into that market.

Daniel Halyk: But right now it looks like should have a pretty good back half with the North American rig count steadily creeping up, not going stupid, but good steady improvement. And our rig upgrades in Canada have really played well into that market.

Speaker #1: Super. Last one from me. M&A, we've seen, you know, Ensign do a deal in Texas. We saw, you know, Akita do the Fox deal.

Speaker #1: Do you see much activity and is there are there things that you're looking at that are possible in terms of M&A activity for you guys into, you know, late this year, late this year, or next year?

Josef Schachter: Super. Last one for me. M&A, we have seen Ensign do a deal in Texas. We saw Keyto do the Fox deal. Do you see much activity and are there things that you are looking at that are possible in terms of M&A activity for you guys into late this year or next year?

Josef Schachter: Super. Last one for me. M&A, we have seen Ensign do a deal in Texas. We saw Key to do the Fox deal. Do you see much activity and are there things that you are looking at that are possible in terms of M&A activity for you guys into late this year or next year?

Speaker #3: Yeah, so we're looking at a lot of things. Honestly, we were disappointed that we weren't involved as much as we would like to have been on the Citadel deal.

Speaker #3: I'm a little surprised by that, given we had some previous involvement, but we're definitely active, looking, and, you know, it comes down to: do these work relative to other options such as share buybacks and organic?

Daniel Halyk: Yeah. We are looking at a lot of things. Honestly, we were disappointed that we were not involved as much as we would like to have been on the Citadel deal. Little surprised by that, given we had some previous involvement. But we are definitely active looking and it comes down to do these work relative to other options such as share buybacks and organic. If our cost of equity gets more competitive, that certainly makes it easier for us to engage in M&A, which we have done in the past and certainly happy to do in the future, but we are going to stay disciplined. But I would say there is still much more consolidation in North America to be had.

Speaker #3: You know, if our cost of equity gets more competitive, that certainly makes it easier for us to engage in M&A, which, you know, we've done in the past and are certainly happy to do in the future.

Speaker #3: But we're going to stay disciplined. But I would say there's still much more consolidation. In North America to be had.

Speaker #1: Okay. Well, Dan and Julia, thanks very much for answering my questions and congratulations on a new record high for the stock. It was quite impressive to see how quickly the quote changed.

Speaker #3: Thank you.

Speaker #2: Thanks, Joseph.

Speaker #4: Your next question comes from the line of Tim Monachello with ATB, Cormorant Capital Markets. You may go ahead.

Josef Schachter: Well, Daniel Halyk and Yuliya, thanks very much answering my questions, and congratulations on a new record high on the stock. It was quite impressive to see how quickly the quote changed.

Josef Schachter: Well, Daniel and Yuliya, thanks very much answering my questions, and congratulations on a new record high on the stock. It was quite impressive to see how quickly the quote changed.

Speaker #2: Hey, congrats everyone on a strong quarter, and congrats, Joseph, on your new job. First question, just on the CPS segment—great bookings in the quarter, and backlogs at record levels here.

Daniel Halyk: Thank you.

Yuliya Gorbach: Thanks, Josef.

Operator 2: Your next question comes from the line of Tim Monachello with ATB Capital Markets. You may go ahead.

Operator: Your next question comes from the line of Tim Monachello with ATB Cormark Capital Markets. You may go ahead.

Tim Monachello: Hey. Congrats everyone on a strong quarter, and congrats, Josef, on your new job. First question, just on the CPS segment. Great bookings in the quarter and backlogs at record levels here. We saw that revenue level tick meaningfully higher quarter-over-quarter and record revenue for the quarter as well, or for the company in the quarter as well. Do you think that that revenue level will continue to move higher through the back half of the year alongside higher backlog, or is there anything sort of one time in nature that allowed you to push more through your current capacity in Q2? The second part of that question would just be how much do you think that the Weirton expansion increases your revenue capacity in the CPS segment for 2027?

Tim Monachello (ATB Cormark: Hey. Congrats everyone on a strong quarter, and congrats, Josef, on your new job. First question, just on the CPS segment. Great bookings in the quarter and backlogs at record levels here. We saw that revenue level tick meaningfully higher quarter-over-quarter and record revenue for the quarter as well, or for the company in the quarter as well. Do you think that that revenue level will continue to move higher through the back half of the year alongside higher backlog, or is there anything sort of one time in nature that allowed you to push more through your current capacity in Q2? The second part of that question would just be how much do you think that the Weirton expansion increases your revenue capacity in the CPS segment for 2027?

Speaker #2: We saw that revenue level tick meaningfully higher quarter over quarter. And you know, record revenue for the quarter as well, or for the company in the quarter as well.

Speaker #2: Do you think that revenue level will continue to move higher through the back half of the year alongside higher backlog, or is there anything, sort of, one-time in nature that allowed you to push more through your current capacity in Q2?

Speaker #2: And then, the second part of that question would just be: How much do you think the Weirton expansion increases your revenue capacity in the CPS segment for '27?

Speaker #3: So I would say, first of all, in the US, we've achieved some of the efficiencies of the expansion beginning in Q3. Obviously, the full impact of that will be felt once we have the facility done and fully staffed, and that'll play out over the course of 2027.

Daniel Halyk: I would say, first of all, in the US, we have achieved some of the efficiencies of the expansion beginning in Q3. Obviously, the full impact of that will be felt once we have the facility done and fully staffed, and that will play out over the course of 2027. We have done some internal restructuring of our manufacturing processes in the US to mirror kind of what we do in Canada and some of the efficiencies we are getting that now. Really for a material step-up in throughput, we need the new facility, and we need it fully staffed. So you will see that occur in 2027 over the course of several quarters. The other thing that is going to limit us is major inventory arrivals. When we planned the expansion two years ago, lead times were probably a third of what they are today, so we are working around that.

Speaker #3: You know, we've done some internal restructuring of our manufacturing processes in the US to mirror kind of what we do in Canada and some of the some of the efficiencies we're getting that now.

Speaker #3: Really for a material step up in throughput, we need the new facility and we need it fully staffed. So you'll see that occur in 2027 over the course of, you know, several quarters.

Speaker #3: You know, the other thing that's going to limit us is major inventory. You know, arrivals. So when we plan the expansion, you know, two years ago, you know, lead times were probably a third of what they are today.

Daniel Halyk: Really for a material step-up in throughput, we need the new facility, and we need it fully staffed. So you will see that occur in 2027 over the course of several quarters. The other thing that is going to limit us is major inventory arrivals. When we planned the expansion two years ago, lead times were probably a third of what they are today, so we are working around that.

Speaker #3: So we're working around that. But like I said, our group there has done a pretty good job managing, you know, major component ordering. But that's certainly, combined with capacity limitations in the plant, going to limit things until we get that fully up and running.

Daniel Halyk: But like I said, our group there has done a pretty good job managing major component ordering. But that certainly, combined with capacity limitations in the plant, is going to limit things until we get that fully up and running late next year. I would not expect you are going to see major increases until we get that plant up and running.

Speaker #3: You know, late next year. So I wouldn't expect you're going to see major increases until we get that plant up and running.

Speaker #2: Well, the revenue throughput in Q2, and almost in any way?

Speaker #3: No, I wouldn't say so. I think it was just natural, working through our backlog and, like I said, a few efficiencies, which you saw in improved margins, despite a significant drop in the active rental fleet because we sold a bunch of units last year.

Tim Monachello: Was the revenue throughput in Q2 anomalous in any way?

Tim Monachello (ATB Cormark: Was the revenue throughput in Q2 anomalous in any way?

Daniel Halyk: No, I would not say so. I think it was just natural working through our backlog and, like I said, a few efficiencies, which you saw in improved margins despite a significant drop in the active rental fleet because we sold a bunch of units last year. We also had a pretty sizable return. Again, the rental fleet utilization at quarter end is one point in time. There is a lot of movement that occurs and subsequent to quarter end, for example, we signed a new rental arrangement for a number of idle packages. So that will go up and down. But really, we achieved some efficiencies, which we are seeing in margins with our US operations. So we are continuing to manage this. It is definitely challenging with the lead times on engines, but like I said, we are doing the best we can.

Speaker #3: You know, we also had a pretty sizable return. Again, we don't get too—the rental fleet utilization at quarter end is one point in time.

Speaker #3: There's a lot of movement that occurs, and, you know, subsequent to quarter-end, for example, we signed a new rental arrangement for a number of idle packages.

Speaker #3: So, you know, that'll go up and down. But really, we achieved some efficiencies, which we're seeing in margins with our U.S. operations. So we're continuing to manage this. You know, it's definitely challenging with the lead times on engines, but like I said, we're doing the best we can.

Speaker #2: Got it. In terms of the marginal order flow, how does the margin profile within, I guess, the new bookings compare to the average within the backlog?

Tim Monachello: Got it. In terms of the marginal order flow, how does the margin profile within, I guess, the new bookings compare to the average within the backlog?

Tim Monachello (ATB Cormark: Got it. In terms of the marginal order flow, how does the margin profile within, I guess, the new bookings compare to the average within the backlog?

Speaker #3: Yeah, we're not going to comment specifically, but I would hope in a strong market that, you know, our margins aren't going down.

Speaker #2: Yeah.

Speaker #3: I don't think our sales team is that incompetent there. We've got a good team there. So, yeah, I think like anything, you have a scarce resource.

Daniel Halyk: Yeah, we are not going to comment specifically, but I would hope in a strong market that our margins are not going down.

Speaker #3: The market, you know, will push margins higher. You know, that said, it's still a very competitive market and we compete in that. But again, I think as we build that business and grow our fabrication capacity, you naturally have a part from you know, market tailwinds, you also have efficiencies of scale in your overhead absorptions are better and all of that.

Tim Monachello: Yeah.

Tim Monachello (ATB Cormark: Yeah.

Daniel Halyk: I do not think our sales team is that incompetent there. We have got a good team there. So, yeah, I think like anything, you have a scarce resource. The market will push margins higher. That said, it is still a very competitive market, and we compete in that. But again, I think as we build that business and grow our fabrication capacity, you naturally have, apart from market tailwinds, you also have efficiencies of scale and your overhead absorptions are better and all of that. And we are also, all the costs of ramping up, we are expensing, and we are not breaking that out. That is just, to me, part of growing the business as opposed to the capital costs for the plant. So we are absorbing that as we speak as well.

Speaker #3: And we're also, you know, all the costs of ramping up, we're expensing. You know, and we're not breaking that out. That's just, to me, part of growing the business as opposed to the capital cost for the plant.

Speaker #3: You know, so we're absorbing that as we speak as well. But yeah, no, I would say in the current market, it's definitely a favorable environment to try and continue to grow your margins there.

Speaker #2: Are you seeing any incremental demand in, I guess, smaller product lines like power gen?

Daniel Halyk: But, yeah, no, I would say in the current market, it is definitely a favorable environment to try and continue to grow your margins there.

Speaker #3: Yes. Again, this comes down to Joseph's question about where you put your floor space. Now, some of it's limited by inputs, but a lot of it is dictated by who's willing to pay the best price for the floor space.

Tim Monachello: Are you seeing any incremental demand in, I guess, smaller product lines like power gen?

Tim Monachello (ATB Cormark: Are you seeing any incremental demand in, I guess, smaller product lines like power gen?

Daniel Halyk: Well, again, this comes down to Josef's question about where do you put your floor space. Some of it's limited by inputs, but a lot of it is dictated by who's willing to pay the best price for the floor space. So it's both power gen, compression, process equipment. So it's a mixed bag. We don't break that down for many reasons, not the least of which is competitive reasons. Again, we trust our management in that segment to make the right decisions in terms of allocating resources.

Speaker #3: So, you know, it's both power gen, compression, process equipment—you know, so it's a mixed bag. We don't break that down, for many reasons, not the least of which is competitive.

Speaker #3: For those reasons, we trust our management in that segment to make the right decisions in terms of allocating resources.

Speaker #2: Okay. I just want to dig into the Australia drilling segment. Q2 activity, like days, were down modestly quarter over quarter, and typically Q1 would be the wet season of the year.

Speaker #2: So, is there anything to think about in that segment? I know you had one—excuse me—one rig that was coming down for an upgrade, and I'm not sure if that impacted the quarter or not, but anything you can offer there would be great.

Tim Monachello: Okay. I just want to dig into the Australia drilling segment. The Q2 activity, like days, were down modestly quarter-over-quarter, and typically Q1 would be the wet season of the year. So is there anything to think about in that segment? I know you had one rig that was coming down for an upgrade, and I'm not sure if that impacted the quarter or not, but anything you can offer there would be great.

Tim Monachello (ATB Cormark: Okay. I just want to dig into the Australia drilling segment. The Q2 activity, like days, were down modestly quarter-over-quarter, and typically Q1 would be the wet season of the year. So is there anything to think about in that segment? I know you had one rig that was coming down for an upgrade, and I'm not sure if that impacted the quarter or not, but anything you can offer there would be great.

Speaker #3: Yeah, I think that, you know, we had a rig come out, but it's kind of the day-to-day. Like, you have shifts in, you know, rigs moving from campaign to campaign, customer changes and programs, rigs moving from one customer to another—all the normal stuff.

Daniel Halyk: Yeah, I think we had a rig come out, but it's kind of the day-to-day. You have shifts in rigs moving from campaign to campaign, customer changes and programs, rigs moving from one customer to another. All the normal stuff. Nothing there that I would say it was probably a bit wetter than normal at the front half of the quarter, but honestly, nothing noteworthy. It's just the ups and downs of your drilling business.

Speaker #3: You know, nothing there that I would say. It was probably a bit wetter than normal at the front half of the quarter, but honestly, nothing noteworthy.

Speaker #3: It's just the ups and downs. Ups and downs of your drilling business.

Speaker #2: Okay. And then in Q3 or currently, how many rigs are you running in Australia?

Speaker #3: I think we've got 11, soon to be 12.

Speaker #2: Okay. And you still have one rig that's being upgraded and is currently out of service?

Tim Monachello: Okay. In Q3 or currently, how many rigs are you running in Australia relative to where you were in Q2?

Tim Monachello (ATB Cormark: Okay. In Q3 or currently, how many rigs are you running in Australia relative to where you were in Q2?

Speaker #3: Correct.

Speaker #2: And then the capital program includes an additional rig in Australia being upgraded. When does that enter service, and is that an idle rig, or is that something that's currently working?

Daniel Halyk: I think we've got 11, soon to be 12.

Tim Monachello: Okay. You still have one rig that's being upgraded currently and is out of service?

Tim Monachello (ATB Cormark: Okay. You still have one rig that's being upgraded currently and is out of service?

Speaker #3: That's an idle one. The one that's going back to work now was an active one that was taken out of service for the upgrades.

Daniel Halyk: Correct.

Tim Monachello: The capital program includes an additional rig in Australia being upgraded. When does that enter service, and is that an idle rig or is that something that's currently working?

Tim Monachello (ATB Cormark: The capital program includes an additional rig in Australia being upgraded. When does that enter service, and is that an idle rig or is that something that's currently working?

Speaker #3: So, we'll bounce in this kind of 12 range.

Speaker #2: Okay. And the rig that's added to the capital program—when do you expect that to be activated?

Daniel Halyk: That's an idle one. The one that's going back to work now was an active one that was taken out of service for the upgrades. So we'll bounce in this kind of 12 range.

Speaker #3: By the end of the year.

Speaker #2: Okay. And in Canada, can you talk a little bit about the growth capital investments that you've added for the year?

Tim Monachello: Okay. The rig that's added to the capital program, when do you expect that to be activated?

Tim Monachello (ATB Cormark: Okay. The rig that's added to the capital program, when do you expect that to be activated?

Speaker #3: Sure. So, three service rigs—three idle service rigs—we're upgrading. These will be high-spec, already spoken for. Those will be done by the end of the year.

Daniel Halyk: By the end of the year.

Tim Monachello: Okay. In Canada, can you talk a little bit about the growth capital investments that you've added for the year?

Tim Monachello (ATB Cormark: Okay. In Canada, can you talk a little bit about the growth capital investments that you've added for the year?

Daniel Halyk: Sure. So three idle service rigs we are upgrading. These will be high spec, already spoken for. Those will be done by end of the year. Also a drilling rig, it was idle. We pulled it off the fence, upgraded it. We had actually done a bit of the work, previously kind of finished it and it went straight to work. That is obviously why we pulled it off the fence. So it is working today.

Speaker #3: And also a drilling rig. It was idle. We pulled it off the fence and upgraded it. We had actually done a bit of the work previously, kind of finished it, and it went straight to work.

Speaker #3: That's obviously why we pulled it off the fence, so it's working today. One of our super singles.

Speaker #2: Got it. Okay. And you saw.

Speaker #3: And then RTS. Yeah, RTS, you know, a couple of comments there. Starting to see a good pickup. You know, that's been a tough business for 10, 11, 12 years now.

Tim Monachello: Okay.

Tim Monachello (ATB Cormark: Okay.

Daniel Halyk: One of our super single.

Tim Monachello: Got it. Okay. You saw-

Tim Monachello (ATB Cormark: Got it. Okay. You saw-

Speaker #3: Been a lot of consolidation. The market bankruptcies people just shutting down. You know, doing our first major heavy truck refurbishment, replacement cycle in a long time.

Daniel Halyk: RTS, a couple of comments there. Starting to see a good pickup. That has been a tough business for 10, 11, 12 years now. There has been a lot of consolidation in the market, bankruptcies, people just shutting down. Doing our first major heavy truck refurbishment replacement cycle in a long time. That should positively help operating margins. We were running some older trucks, and activity and pricing and margins did not warrant replacement. They are finally starting to do that, so we should see some margin improvement when those new trucks come in by end of year. As well, some very, I would call it rifle shot, new equipment adds. These are equipment lines that were sold out, and as you can see, they are fairly big-ticket items and they will be deployed throughout North America.

Speaker #3: That should positively help operating margins. You know, we're running some older trucks, and, you know, activity and pricing and margins didn't warrant replacement. They're finally starting to do that.

Speaker #3: So, we should see some margin improvement when those new trucks come in by the end of the year. As well, some very—I'd call it rifle-shot—new equipment adds.

Speaker #3: These are equipment lines that were sold out, and as you can see, they're fairly big-ticket items, and they'll be deployed throughout North America.

Speaker #3: Again, we're very tight-lipped on what that is for competitive reasons, but that stuff will go straight to work when it is secured by year-end.

Speaker #2: Okay, that's helpful. The market share in Canada drilling was up. You were pretty meaningfully — and strongest that I can see since, like, Q1 of last year.

Daniel Halyk: Again, we're very tight hole on what that is for competitive reasons, but that stuff will go straight to work when it is secured by year-end.

Speaker #2: How are you winning in Canada? Is it largely just where activity is growing relative to the basin?

Tim Monachello: Okay, that's helpful. The market share in Canada drilling was up year-over-year pretty meaningfully, and strongest that I can see since Q1 of last year. How are you winning in Canada, or is it largely just where activity is growing relative to the basin?

Tim Monachello (ATB Cormark: Okay, that's helpful. The market share in Canada drilling was up year-over-year pretty meaningfully, and strongest that I can see since Q1 of last year. How are you winning in Canada, or is it largely just where activity is growing relative to the basin?

Speaker #3: Well, I think two things. Number one, a couple of quarters ago, I let you know we weren't happy about our market share. So we had some pleasant conversations and brought Joseph Schachter on to crack the whip.

Speaker #3: No, but I— in all seriousness, I think we were probably focused on selling some of the new iron that was coming out, the triple, and we lost— took our eye off the ball in our traditional markets.

Daniel Halyk: Well, I think two things. Number one, a couple of quarters ago, I let you know we weren't happy about our market share. We had some pleasant conversations and brought Josef Schachter on to crack the whip. In all seriousness, I think we were probably focused on selling some of the new iron that was coming out the triple, and we took our eye off the ball in our traditional markets. Combined with the upgrade capital we put in place and just renewed focus combined with addressing where the market's going. You're seeing that, and I hope that's going to continue. But we've always taken a measured approach. We're not going to try and do too much at once. In part, you got to staff the stuff, so we're taking a methodical approach. But I would say our super single side is very good.

Speaker #3: Combined with, you know, the upgrade capital, we put in place and, you know, just renewed focus combined with, you know, addressing where the market's going.

Speaker #3: You're seeing that, and I hope that's going to continue. But, you know, we've always taken a measured approach. We're not going to try and do too much at once.

Speaker #3: In part, you’ve got to staff the stuff. So we're taking a methodical approach, but I would say our super single side is very good.

Speaker #3: Our AC double side is very good, and this mechanical double to triple conversion has worked out very well, and we're seeing very strong demand for that class of rig.

Speaker #3: So the one we're doing now, again, we targeted having it done by the end of Q4 into Q1. That's on time, on budget. And I wouldn't be surprised if we go back to our board for more of those.

Daniel Halyk: Our AC double side is very good. This mechanical double to triple conversion has worked out very well, and we're seeing very strong demand for that class of rig. The one we're doing now, again, we targeted having it done by end of Q4 into Q1. That's on time, on budget, and wouldn't be surprised if we go back to our board for more of those.

Speaker #2: Okay, that's helpful. All right, I think that's the end of my questions. So I appreciate all the commentary and am looking forward to a strong outlook here, especially with Joseph on board.

Speaker #2: I feel like the sky's the limit.

Speaker #3: This is not going the way. Thank you, Tim.

Tim Monachello: Okay. That's helpful. All right. I think that's the end of my questions. I appreciate all the commentary and looking forward to a strong outlook here, especially with Josef on board. I feel like the sky's the limit.

Tim Monachello (ATB Cormark: Okay. That's helpful. All right. I think that's the end of my questions. I appreciate all the commentary and looking forward to a strong outlook here, especially with Josef on board. I feel like the sky's the limit.

Speaker #1: Thanks, Tim.

Speaker #4: Again, if you would like to ask a question, please press star one. There are no further questions at this time. I would like to turn it back over to Daniel Halleck for closing remarks.

Yuliya Gorbach: This is not going away.

Daniel Halyk: Thank you, Tim.

Yuliya Gorbach: Thanks, Tim.

Speaker #3: Thank you, everyone, for joining us today. I understand our website was down, so my apologies to those who tried to access the call through the website. There will be a recording, and our website will be back up soon, I hope.

Operator 2: Again, if you would like to ask a question, please press star one. There are no further questions at this time. I would like to turn it back over to Daniel Halyk for closing remarks.

Operator: Again, if you would like to ask a question, please press star one. There are no further questions at this time. I would like to turn it back over to Daniel Halyk for closing remarks.

Speaker #3: And you'll be able to access it there. So, thanks for participating, and we look forward to speaking with you after our third quarter. Have a good day.

Daniel Halyk: Thank you everyone for joining us today. I understand our website was down, so my apologies to those who are trying to access the call through the website, but there will be a recording, and our website will be back up soon, I hope, and you will be able to access it there. So thanks for participating and look forward to speaking with you after our Q3. Have a good day.

Operator 2: Ladies and gentlemen, this concludes today's call. You may disconnect.

Operator: Ladies and gentlemen, this concludes today's call. You may disconnect.