Q3 2019 Earnings Call
Welcome to the Geospace Technologies' third quarter 2019 earnings conference call.
Hosting the call today from Geospace is Mr., Rick Wheeler, President and Chief Executive Officer. He is joined by Tom Mcentire, The company's Vice President and Chief Financial Officer.
Today's call is being recorded and will be available on the Geospace Technologies' Investor Relations website following the call.
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It is now my pleasure to turn the floor over to Rick Wheeler, Sir you may begin.
Thank you.
Good morning, and welcome to Geospace Technologies Conference call for the third quarter of our 2019 fiscal year.
I am Rick Wheeler, the company's President and Chief Executive Officer, and I'm joined by Tom Mcentire, The company's Vice President and Chief Financial Officer.
I'll start the call with an overview of the third quarter and Tom will then offer some in depth commentary on our financial performance. I'll, then make a few final remarks, after which the line will be open for questions.
Some of today's statements may be considered forward looking as defined in the private Securities Litigation Reform Act of 1995, including comments about product markets revenue recognition planned operations and capital expenditures.
All such statements are based on our president awareness, while the actual outcomes are influenced by uncertainties and other factors, we cannot control or predict.
Both known and unknown risks can lead to undesirable results or performance differences from what we say or imply today such risks and uncertainties include those discussed in our FCC forms 10-K, and 10-Q filings.
As mentioned for convenience, we will make a recording of this call on the Investor Relations page of our Geospace Dot Com website, but note. The information discussed. This morning is time sensitive and may not be accurate at the time, one listens to the replay.
Yesterday after the market close we released our financial results for the third quarter and first nine months of fiscal year 2019.
As noted growth in customer in demand continued decline for the rental of our wireless Sobi ex ocean bottom seismic recording systems, which led to notable increases in revenue and the reported periods.
For the three months and nine months ended June Thirtyth 2019, the revenue increases amounted to 7% and 21% respectively, when compared to the equivalent periods last year.
Moreover, revenue achieved its highest level for a third quarter periods since fiscal year 2014 and for the nine month period revenue reflects a three year run of consecutive increases.
Although demand for both our traditional and wireless Lan products within the oil and gas market segment has yet to improve we are nonetheless, very pleased to announce the receipt of an order for 5000 stations of our recently introduced wireless GCL one land recorder.
Which we expect to deliver to a European contractor in our fourth quarter.
Our compact GCL recorders function entirely without wires or connectors and define the absolutely critical quality reliability and ease of operations for land based seismic surveys.
For the three months ended June Thirtyth 2019 products in our oil and gas market segment generated combined revenue of $14.4 million for the same ended nine month period revenue was 44.1 million.
These figures reflect respective increases of 17% and 39% over the same three and nine month periods a year ago.
And there are a direct result of expanded rentals of our OPX Marino reporting systems.
Within this segment traditional seismic product revenue totaled 2.2 million in the third quarter. This is a decrease of 17% from last year as a result of comparatively lower revenue from customer product repairs.
And the reported nine month period. These products produced total revenue of 8.9 million a decrease of 7% compared to last year.
The decrease was primarily driven by lower sales over the nine months of specialty sensors, but was partially offset by higher demand for traditional marine products and a greater amount of support services.
Our wireless seismic products generated 11.9 million and 32.8 million in revenue for the three and nine months ended June 32019.
These figures reflect respective increases of 50% and 87% over the comparative periods last year.
As mentioned earlier the increases are the result of substantial growth in rental revenue from our wireless Marine OPX Ocean bottom nodal systems at the end of June we had approximately 28000 OPX stations in our rental fleet, where most were utilized in performing rental contracts with various seismic contractors.
Based on discussions with both existing and new customers wanting to secure long term rental commitments for additional OPX stations, we are evaluating the possible need to further expand our OPX rental fleet to satisfy this rising demand.
Note that the increase in revenue over the nine month period was partially offset by a reduction in sales of our wireless Lan based GSX products.
Revenue from our reservoir seismic products totaled 447000 in the third quarter, a decrease of 76% from a year ago.
Revenue for these products totaled $2.4 million for the nine months ended June 32019, a decrease of 46% from the previous year.
In both periods the reductions were driven by lower sales of borehole tools and fewer reservoir related services, we do not expect significant revenue from these products unless and until we are engaged in that contract to deliver a permanent reservoir monitoring or PRM system.
In November of 2018, we extended our PRM product offerings through the exclusive acquisition of opto size fiber optic sensing technology, which we believe enhances our opportunities for potential PRM contracts.
There are no such contracts currently up for award, but based on our ongoing technical discussions with companies expressing interest in utilizing our technology. We believe a tender for our PRM system is likely in the foreseeable future.
Note that of the PRM contract were awarded to US we would not expect to earn any revenue from it until fiscal year 2020 or possibly later.
Third quarter revenue from our adjacent market segment total 8.2 million a reduction of 6% from last year, primarily due to lower demand for graphics imaging equipment and water meter cable and connector products.
Revenue from this segment over the nine months ended June Thirtyth 2019 totaled 22.1 million a decrease of 4% from last year.
The decrease is attributed to lower demand for our water meter related products, but was partially offset by increases in industrial sensor and thermal film sales. We don't believe the slight reductions in revenue occurring in these periods for our water meter in certain other adjacent market products reflect the long term trend and the demand for these products. Instead. We believe this segment continues to pose pose growth opportunities and increase stable revenue for the company.
Revenue from our emerging market segment totaled 11000, and 145000, respectively for the three and nine months ended June Thirtyth 2019.
Now this market segment consists solely of products and services offered by our quantum technology Sciences subsidiary, which focuses on specialty products utilizing seismic acoustic technology to monitor protect and secure physical borders and parameters in both domestic and international markets.
Note that we acquired quantum in July of 2018, So we have no prior year revenue comparisons.
We do not anticipate significant revenue contributions from quantum in the immediate future. However, we do believe our ongoing efforts in the design manufacture and deployment of this progressive technology are creating opportunities for meaningful revenue in the future from these novel solutions.
At this point I will turn the call over to Tom for more financial details.
Thanks, Rick and good morning, everyone.
Before I begin I would like to remind everyone that we will not provide any specific revenue or earnings guidance during our call. This morning.
In yesterday's press release for our third quarter ended June Thirtyth 2019, we reported revenue of $23 million compared to last year's revenue of $21 million.
Our net loss for the quarter was $3.7 million or 27 cents per diluted share.
Compared to last year's net loss of $4.8 million or a loss of 36 cents per diluted share.
For the nine months ended June Thirtyth 2019, we reported revenue of $67 million compared to revenue of $55 million last year.
Our net loss for the nine months was $8.8 million or 66 cents per diluted share compared to last year's net loss of $19 million or $1.43 per diluted share.
A breakdown of our oil and gas product revenue is as follows.
Our traditional product revenue for the third quarter was $2.2 million, a decrease of 17% compared to revenue of $2.6 million last year.
This decline was primarily caused by lower demand from our customers for equipment repairs.
Traditional product revenue for the nine months was $8.9 billion.
A decrease of 7% compared to last year's revenue of $9.6 million.
This decrease reflects lower demand from our specialty sensor products and equipment repairs and was partially offset by higher demand for our marine products and revenue from product support services.
Our wireless product revenue for the quarter was almost $12 million, a 50% increase compared to revenue of $7.9 million last year.
Wireless product revenue for the nine months was $33 million and 87% increase compared to last year's revenue of $18 million.
In both periods the increase resulted from higher rental demand for OPX systems.
Partially offsetting last year's nine month revenue growth was the decline in demand for sales of our land base wireless products.
Our reservoir for product revenue for the third quarter was $447000 a decrease of 76% compared to last year's revenue of $1.9 million.
For the nine months reservoir product revenue was $2.4 million a decrease of 46%.
Compared to last year's revenue of $4.6 million.
These decreases resulted from a decline in demand for a borehole products and lower revenues from reservoir support services.
Moving on to adjacent markets products segment, our industrial product revenue for the third quarter was $5.4 million, a decrease of 5% compared to last year's revenue of $5.7 million.
Industrial product revenue for the nine months was $13 million, a decrease of 7% compared to $14 million last year.
These decreases stem from lower demand for our water meter products and were partially offset by increased demand for our industrial sensor products.
[noise] imaging product revenue for the third quarter was $2.9 million a decline of 8% compared to last year's revenue of $3.1 billion.
Imaging product revenue for the nine months was $9.1 million an increase of 1%.
Compared to revenue of $9 million last year.
We consider these changes in revenue to be normal and not indicative in any particular trend in customer demand.
Our gross profit for the third quarter was $7.6 million, an increase of 62% compared to last year's gross profit of $4.7 million.
For the nine months gross profit was $21 million, an increase of over 360% compared to last year's gross profit of $5.7 million.
These increases resulted from a significant rise in OPX rental revenue caused by the high utilization of our expanding OPX rental fleet.
In addition, we've seen a decline in underutilized factory overhead costs due to high manufacturing productivity.
Resulting from our OPX production.
Despite these increases in factory utilization, we expect our consolidated gross profit margins from the sale of our land base traditional and wireless oil and gas products to remain weak until we see a significant improvement in their demand.
Operating expenses for the third quarter were almost $11 million, an increase of 11% compared to $9.8 million last year.
Operating expenses for the nine months were $29 million, an increase of 15% compared to last year's operating expenses of $26 million.
Last year's third quarter includes a $2.6 million bad debt charge attributable to a customer who had just filed for bankruptcy protection.
Excluding this $2.6 million bad debt charge.
Consolidated operating expenses increased $3.7 million and $6.3 million, respectively for the three months and nine months ended June Thirtyth 2019.
These increases were caused by incremental operating costs associated with our recent acquisitions of the quantum and off the size businesses.
These acquisition related expenses for the three months and nine months ended June Thirtyth, 2019 were $2.1 million and $5.5 million respectively.
Inclusive of intangible asset amortization expenses of $400000 of $1.2 million respectively.
The balance of the increased operating expenses relate to acquisition related legal costs personnel wage increases increased bad debt expenses and other general expense increases.
Related to the expansion of our business operations.
Cash investments into our rental equipment and property plant and equipment were $29 million and $1.4 million respectively.
Because of the significant demand for OPX rental equipment, we expect our total fiscal year 2019 cash investments into our rental fleet to be about $35 million.
We estimate total fiscal year 2019 cash investments into our property plant and equipment will be approximately $2 million.
Our balance sheet at the end of the third quarter reflected $16 million of cash and cash equivalents.
We had no long term debt outstanding and the available borrowings under our credit agreement were $23 million.
Earlier this month, we sold one of our Houston facilities for $8.6 million.
After deducting selling expenses, we expect to report a gain from this transaction of approximately $7 million in our fourth quarter ending September Thirtyth 2019.
This facility was not strategic to our ongoing operations.
We continue to own other real estate holdings in Houston and around the world that are owned free and clear without any leverage.
That concludes my prepared remarks, I will turn the call back over to Rick.
Thanks, Tom.
Demand for both our traditional and wireless Lan based products remains muted due to the lower amounts of seismic services requested from our onshore customers.
However, demand for our ocean bottom OPX Marinos has the highest its ever been.
Our current focus of many GNP companies is to discover new reserves and extensions near their existing offshore infrastructure and the superior image quality and operational efficiencies provided by the OPX helped turn this go into a reality as such we believe demand for OPX nodes will remain high for some time to come.
And we will continue to prudently invest in the choice opportunities that may present.
Independently are broadening of PRM products with opto size, and our deeper penetration into border and perimeter security markets through quantum each represent strategic diversifications that create new sets of opportunities and potential financial rewards. We believe several of these opportunities could manifest in the very near future and that our strong balance sheet gives us ample means to accomplish their success.
So with that said that concludes our prepared remarks, and I'll now turn the call back over to break for questions.
As a reminder, if you would like to ask a question that is star and one on your Touchtone telephone we will take our first question from David Mccall with Fort Washington. Please go ahead.
Good morning, guys hope everyone is doing well for them yeah. Thank you David.
So when I look back at the.
This quarter the announcement on on May 2nd and kind of compare and contrast with last night's announcement.
So in May you said that management believes that an open tender for PRM system may occur later in fiscal year 2019.
And last night, you stated that management believes a tender for PRM system is likely in the foreseeable future.
Based on ongoing discussions so I I definitely find this.
Changed very interesting and I'm wondering if you could provide some additional color on maybe the PRM market as a whole.
So what I'm wondering here is do you see it improving in general or would any potential.
PRM contracts to be seen more as a one off item and not a signal that demand is improving.
Very good questions.
The PRM market as you're probably aware and having study that is.
It's a it's a very niche market there aren't.
Lots of PRM systems out there theyre very important with respect to those fields that they've been installed on.
But you know we have nine of those systems and there is probably another three or four of those systems that have been installed there certainly was an increase in demand before that was basically terminated when the price of oil fell about five years ago or so, but we are seeing an increase going back because there is a.
A significant return on that investment based on their long term plans.
We are seeing an increase in those discussions as it were the reason we did say in 2019, which we have one more quarter to go that we were anticipating a tender within that timeframe, but as all things go there are delays that come about in those.
Putting out those tenders that were really not in control of its still possible that that.
Tender could come out within a fiscal year 2019, but we still expect one even if it's not in that specific timeframe.
To come out shortly thereafter, if that's what it turns out to be.
We do believe that the demand will increase.
In a stable oil pricing and Vera.
Environment, and we also see that because the oil companies are focused on trying to.
Find new reserves.
Both the new and extensions to existing reserves nearby their current infrastructure, that's going to further accentuate the benefits that permanent reservoir monitoring systems can offer because there'll be tying back to those pieces of infrastructure that are already in place.
Perfect I appreciate that and maybe just a.
A follow up here. So we were obviously.
Decent amount of time.
Health and recovery in the offshore seismic space globally in them.
Im assuming the PRM would be in the context of the offshore.
So in fact that Rick you mentioned that the.
Onshore business remains muted.
As MPS in the Permian kind of refocus and try to fix maybe some of the the mistakes I'll say for the.
Onshore business do you do you see an increase in inbounds for that at this point in time or is that just something that you're going to do is wait and see if it's if it's sort of cons, not saying, you're not going to do anything but that.
Not accurately are aggressively pursuing anything there.
Well the only pursued that we've put in place is the introduction of new.
New instrumentation for that market in our GCL, but I think in our in our view.
Where were driven by what our customers need and the current level of activity exploration and a imaging activity that's going on at this point that the contractors have enough equipment for the most part to accomplish that.
You know were aware of a of a very huge survey that Dawson was and I believe still is involved in.
Quite a an impressive operation, but they have the equipment necessary to perform a those activities at this point in time, so really for upfront from our point of view, it's a matter of when the seismic exploration and M&A and other reservoir imaging aspects improve enough to where there's more demand for our equipment and of course as time goes on equipment has to be replaced a there's a certain atrophy that takes place.
But we're prepared for that with with the the products that we have that represent next generation capabilities within that sort of instrumentation.
Okay perfect.
Thank you.
Our next question will come from Chris <unk> with singular research. Please go ahead.
Hi, just a question on your reservoir products, let's save cost would you ever consider.
You know putting that putting it on a that segment on pause or on hold.
It's a very integrated operation within our core competencies. So there there would really be no benefit or even strategic point in trying to do that.
Okay and then.
Within 7 million that you'll get from the sale of the property.
What do you plan on doing with that money.
Yeah, Hi, Chris This is Tom that's going to go into our bank account and will likely be reinvested into.
More Oh bx rental equipment at least that's the plan for now.
Okay, all right great. Thanks.
Our next question will come from Bill Dezellem with Titan capital. Please go ahead.
Oh, Thank you I have a group of questions relative to GCL first of all if say contractor has GCL or primary GSX <unk> and they were to purchase a GCL nodes would would they be able on the same survey to use the two and integrate them or at <unk>.
Or would they be side by side or where they need to be separate.
That's an excellent question Bill and the fact is that it somewhat depends on the on the configuration of the how they use the GSX, but for the most part today or a side by side compatible or to the extent that those customers that have our GSX equipment are utilizing our.
Our Gs Oh any geophone sensors for example, it's an exact side by side comparative capability that the to have.
Through some amount of.
A sort of a de convolution aspect of sort of a reprocessing of data.
That compensates for sensor responses, one could actually use the GCL side by side any equipment, including GSX equipment. If they were using some other brand or type of Oh, Gee iPhone type sensors, but for the most part they're completely side by side compatible.
In a data context from an operational context, they are exactly on par with the GSX the same amount of.
QC information to same manner of which you see information is gathered from these devices is exactly the same.
So for example, das and could incorporate to if they needed to replace some DSX notes due to natural.
Natural wear and tear they could buy the GCL.
There would be things they have to and we would both have to consider with respect to the types of sensors that they might be using in that situation, but there there could easily be some possibilities, where maybe that could occur.
Understood. So let's talk about this specific GCL order, how it came about and.
And how it's going to be a how it's going to be used please.
Okay.
Well I mean, it came about simply from our.
Revealing of the product to be quite honest and.
At some of these conventions and shows associated with the seismic industry.
No we were revealed this new product.
And its a.
It certainly looked like it was going to fit the use case of this particular company and weve been into some discussions with them for a while and some tests and trials and they're very much.
Looking forward to two using this equipment.
In this particular case I don't I think it's a geothermal type application I'm not familiar with all of the details or wouldn't be able to reveal the even those that I am aware of.
But it's nonetheless, what you would consider a typical land seismic imaging use case.
And is this a.
Hey.
Okay.
A repeat customer and if not equipment were they using previously.
This is a repeat customer.
We have done business with them before with some other sensors and wireless equipment.
So.
But they are relatively new to us, but we have done business with them before.
And the prospect for them purchasing additional equipment.
Uh huh.
Really just have to see I mean, this is a situation where they have some contracts that there.
I'm going to be fulfilling using this equipment and we'll see where that takes them.
And did this come about reasonably quickly and the reason I ask is is that you have been.
Cautioning investors that there really are not a lot of land seismic prospects.
Out there and I I would continue with that caution.
And then one additional question on that front a price tag for this for the revenue that we will expect.
Well, we're not going to really tell you all that.
Bill that's between us and the customer and I don't think our customer wants us to double that.
Understood Yeah, let me shift if I may two two OPX, how many additional Oh VX eight units are you looking to manufacture a in fiscal 20.
We're adding four kit fiscal pointing.
Bill we expect to be up over 30000, Oh, you're talking about fiscal 2020, yes.
At the end of this year or this fiscal year, which is fiscal year 19.
We expect to be over 30000 with respect to fiscal year 2020, that's.
A number that we're still working on it we're still gauging the interest that customers have been long term contracts. So it's not a number we're ready to put out just yet.
So you're at 28000 now by the end of next month, you're hoping to be at 30000, just for a point of our range to help us understand the magnitude of of demand that you're experiencing.
Yeah, I mean could we see this rental fleet. Yeah go from 30000 to 40000 are we talking 30000 going to 60000.
Well.
You know, we don't have actual specific numbers I don't have anticipation that its going to double in that sense that you're looking at there.
Whereas for quotes in the end the commitments that various customers.
Are looking to make and willing to make we're definitely expecting that we will have to increase the number.
But.
I don't see a doubling or anything along those lines.
Sure. Okay, and then one additional question the rental revenues.
We're down a three and a half million or so from the last quarter would you. Please discuss that.
Yeah, Bill a good question.
The second quarter is our big quarter in Canada, it's seasonal and we did about two and a half million dollars of rental revenue in Canada in the second quarter and if you will recall, we also recognized revenue related to deposit a nonrefundable deposit that.
Customer put down and they had to cancel the contract due to timing and other issues and so.
Between those two items, that's almost $4 million and that kind of stems the.
Break between Q2 and Q3.
Great. Thank you both.
As a reminder, that is star and one to ask a question more pause a moment to allow any further questions to queue.
We will take our next question from David Nierenberg with Nierenberg investment. Please go ahead.
Good morning, guys.
Hi, good morning.
I'd just like to pursue a couple of things you said in answering your question.
Tom it's sort of like a.
I heard you say that you are already having to turn away Oh, VX opportunities, which you cannot fulfill.
Which.
It sounds like.
Both good news and bad news in terms of.
Sending.
Business through a competitor could you. Please elaborate on what you meant by that comment.
Yeah, David This is Rick Yan the one that said that.
You know, it's a it's a rare circumstance, but there are occasions, where some of these jobs that the oil companies are looking to perform.
Because of weather issues in how the windows of opportunity sort of open up for those things that the timings.
Land very specifically in certain months.
As it would turn out.
Do you foresee that this particular circumstance.
Our equipment was all out and and all in use and there was it with respect to this timing. This particular timing there would have been no way to construct a equipment they would be able to fulfill those needs. So it's not a normal circumstances somewhat of a circumstantial situation, but based on the all the aligning of the stars so to speak.
But you're right. It does represent a both good and bad the good is it simply one cognos and I'm one of many wheels that are turning with respect to boosting this demand.
For the OPX.
Exactly exactly.
The good news part of important.
I'd also like to come back to a.
To.
Bill last question about the sequential revenue decline.
In the oil and gas.
Segment.
Perfectly.
The total sequential decline in revenue across the segment.
Doing my numbers right about 4.2 million.
And what surprised me a bit with the operating income swing off that 4.2 million with the large 3.6 million.
I Wonder if you could explain.
What that was whether it was a function of mix.
The customer a non refundable deposit, perhaps then move all profit what was what was going on to explain that.
Yeah, Hi, David This is Tom I'll take my best shot at your question.
A big change in our rental revenue from Q2 to Q3, if you will recall that we have a fixed cost on our rental fleet, whether it's rented or not.
And so for the most part when we do read something that drops all the way to the bottom line, because we're going to have that depreciation whether we rented or not.
And so the decline in rental revenue between the two periods is primarily the impact on our operating income for both periods between the two periods.
Well I agree with the comment by Steve Martin in the movie the jerk when he slots as head, it's a carnival Barker wants Oh I get it its a profit thing.
[laughter] well I'll be I'll be happy to further explain a you know in a in a light or a phone call or something but you know essentially if we have an extra dollar of rental every quarter, we're going to have an extra dollar of operating income.
Because that that depreciation is there whether we rented or not.
So it makes it a very nice business to have a strong market.
Well.
You know I have said this before and this is maybe my philosophy on rentals, but when they're rented it's the highest gross margin we have and when it's not rented it's the lowest gross margin we have.
Thank you.
Our next question will come from Chris sandstone with Sansone advisors.
Good morning, gentlemen, hi, Chris Good morning.
Ah So if my math is correct you added 11000, OPX stations and the third quarter.
I believe that's right.
Okay.
And.
Could you give me a sense of when we started booking revenue on.
Those additional stations I know they all isn't happening at one just trying to get a sense for whether those additions were you know beginning of quarter or.
End of quarter loaded.
Probably more that was in the quarter loaded we are in the process of shipping in delivering a 9000 unit.
Contract right now and are fourth quarter. In fact, we've shipped most of it and we still have a couple of thousand more to show up but a lot of those units were added.
You know during the third quarter, and we're still completing units to finish the shipment of those.
That final order of 9000, so they probably didn't generate much revenue at all.
In the.
Sorry about that.
Oh.
[laughter].
And.
But other than that you referenced in the in the second quarter press release, So that's where you're talking about here so potentially.
We go to.
You got it a 37000 units ish.
You know exiting the fourth quarter.
No no a lot of those 28, the difference between 17 and 28000.
It has to do with.
Building up these 9000 units.
In the.
In the third quarter.
For delivery in the fourth quarter.
Okay.
Okay and could you just talk about the increase in expenses it looks like we're not getting.
You know the.
The leverage on those incremental expense dollars I think Tom you called out some of that was.
Nonrecurring in nature.
You know they were transaction related to the transactions over the course leader.
Yeah.
You know our operating expenses were.
Pretty close to what we had in Q1 and Q3 they fail in Q2 for.
Several reasons and probably.
Well you know you shouldn't expect to Q2 to repeat itself but.
What we did in Q1 and Q3 is probably what is going to look like going forward.
There were acquisition related expenses for the optimal size purchase that are not going to recur and plus we get into another.
Acquisition.
Opportunity, but but.
You know, it's it's kind of difficult to map because things show up the disappear they show up again.
We certainly don't want to see bad debt show up every quarter like we did this quarter, but.
That's just a sense of the aging of our receivables that doesn't mean that that debt is completely uncollectible, but as our receivables get older in age we provide more risk based bad debt expenses.
Okay got it and then just to go back to.
One of the questions on the other callers had about potential size of the OPX rental fleet.
You look at the the growth trajectory that you guys had this year.
And you said that you.
Don't see it going to 60000 patients I guess.
Why couldn't likely but 60000 patients over some period of time given.
The demand trends that we're seeing this year.
Well, it's not to say that it couldn't it certainly could do that.
But I guess, that's not in our strategic planning and that that it needs to work, we're very cautious and prudent about how this market needs to be approached.
And.
And really its more a sense of that.
Our conservative view of.
Doing our best to satisfy.
The reasonable levels of demand that are showing up here, but then again.
Is the industry will drive that for us and we'll be taking a look at it on a on a daily basis if it.
If you really want to get down to it.
Great.
All right guys as you may have guessed on working from home today. Thanks a lot.
Hi, Chris.
And there are no further questions at this time I will turn it back to speakers for closing remarks.
Alright, well thank you Barry.
And thanks to everyone, who joined our call today and well look forward to speaking with you for our fourth quarter conference call sometime in November Thanks, and Goodbye.
This does conclude todays program. Thank you for your participation you may now disconnect.