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Dawson Geophysical Company (NASDAQ:DWSN)

Q3 2014 Earnings Conference Call

August 6, 2014 10:00 AM ET

Executives

Stephen Jumper - Chairman, President and CEO

Christina Hagan - EVP and CFO

Analysts

Jim Rollyson - Raymond James

Veny Aleksandrov - FIG Partners

Rudy Hokanson - Barrington Research

Georg Venturatos - Johnson Rice

Jason Kraft - Cato Partners

Joel Luton - Westlake Securities

Jason Wangler - Wunderlich Securities

Operator

Good day and welcome to the Dawson Geophysical Third Quarter Earnings Conference Call and Webcast. All participants will be in listen-only mode. (Operator Instructions). After today’s presentation there will be an opportunity to ask questions. (Operator Instructions). Please note this event is being recorded.

In accordance with the Safe Harbor provisions of Private Securities Litigation Reform Act of 1995, Dawson Geophysical Company cautions that statements made today in this conference call, which are forward-looking and which provide other than historical information involve risks and uncertainties that may materially affect the company’s actual results of operations.

These risks include, but are not limited to the volatility of oil and natural gas prices, dependence upon energy industry spending, disruptions in the global economy, industry competition, delays, reductions or cancellations of service contracts, high fixed costs of operations, external factors affecting our crew, such as weather interruptions and inability to obtain land access rights of way, whether we enter into turnkey or term contracts, crew productivity, limited number of customers, credit risk related to our customers, the availability of capital resources and operational disruptions.

A discussion of these and other factors, including risks and uncertainties is set forth in the company’s Form 10-K for the fiscal year ended September 30, 2013. Dawson Geophysical Company disclaims any intention or obligation to revise any forward-looking statements whether as a result of new information, future events or otherwise.

During this conference call, we will make references to EBITDA, which is a non-GAAP financial measure. A reconciliation of the non-GAAP measures to the applicable GAAP measure can be found in our current earnings release, a copy of which is located on our website www.dawson3d.com.

I would now like to turn the conference over to Stephen Jumper, President, Chairman and CEO. Please go ahead sir.

Stephen Jumper

Thank you, Denise. Well, good morning and welcome to Dawson Geophysical Company’s fiscal third quarter 2014 earnings and operations conference call. As Denise said, my name is Steve Jumper, Chairman, President and CEO of the Company. Joining me on the call are Christina Hagan, Executive Vice President and Chief Financial Officer.

So we will run through a very quick presentation and or comments and then open the call up for questions. As in the past, the call is scheduled for half an hour and we will not provide any guidance as we have done in the past -- we’ve not done in the past. As mentioned in the press release, we reported revenues for the quarter ended June 30, ’14 $54,166,000 compared to the $75,647,000 over the same quarter of fiscal ’13. We recorded a net loss of $7,493,000 million for the third quarter of fiscal ’14 or a loss of $0.94 per share attributable to common stock as compared to a net income of $4,063,000 million or $0.50 per share attributable to common stock in the same quarter of fiscal ’13.

EBITDA for the third quarter of fiscal ’14 was $1.46 million compared to $15.9 million for the same quarter of fiscal 2013. For the nine months period, we reported revenues of roughly of a $199 million for the nine months ended June 30 of ’14 as compared to 235.6 million for the same period of fiscal ’13. We reported a net loss of $8.7 million for the nine months ended June 30, ’14 or a loss of a $1.10 per share attributable to common stock as compared to a net income of $13.2 million or $1.65 per share attributable to common stock for the same period of ’13. EBITDA for the nine months ended June 30, ’14 was $18.9 million compared to $50.6 million for the same period of fiscal 2013.

During the quarter, we operated at an average of eight to nine crews at less than desired utilization rates. Compared to an average of 13 crews in the third quarter of 2013 which were really operated at what we would consider a typical utilization rate. In the second quarter of fiscal ’14 we operated at an average of 12 crews at a high utilization rate.

While we are disappointed with lower than anticipated utilization rates, we are pleased with the relative uptake in utilization at the end of June and into the month of July. We currently have 10 crews deployed at predominantly the oil and liquid rich regions of the continental U.S. including but not limited to the Permian, the Eagle Ford, the Niobrara, the Mississippi line of Kansas and Oklahoma with one crew operating at Pennsylvania. We anticipate demand levels are sufficient to sustain an average of 10 crews till the end of the calendar year 2014.

We would remind you that our contracts are cancellable and maybe modified in scope of delayed on the short notice. The biggest hurdle during the third fiscal quarter was the unexpected higher level of client driven project delays and our inability to secure land access agreements on several other projects.

Many exploration production companies took longer than expected to ramp up their seismic projects. Delayed project starts led to the reduction in crew count we experienced during the quarter. The reduction in crew count and channel count deployed, negatively impacted our fiscal Q3 results. While we experienced a reduction in crew count and channel count deployment, our order book remained relatively stable. This indicates to us that the reduction in crew was not as much as function of overall reduced demand levels or canceled contracts but rather a function of delayed decisions by our client. However, as our valued clients began to put their projects back to work at the tail end of the third quarter, we had redeployed two crews and have returned to higher relative utilization rates.

We caution that the seismic data acquisition market in North America is somewhat unpredictable and competitive at the current time. In response to these challenges, we are working closely with our clients to gain greater visibility into their seismic decisions to further right size our crew count and mitigate unpredictability. In addition to more normalized utilization rates, we are encouraged by the continued activity of our multi-component crew and an increase in request for surface recorded micro-seismic project. During the third quarter of ‘14, we commenced one surface recorded micro-seismic project and were awarded two additional projects, anticipated to be completed in the next few quarters.

Operating expenses for the third fiscal quarter were reduced as compared to the third fiscal quarter of ‘13 but not in proportion to the reduction in revenue. The primary reason for higher operating expenses relative to revenue was based on our decision to retain 12 fully operational crews in anticipation of higher utilization rates which we began to realize during the end of the fiscal third quarter and the first part of fiscal Q4, allowing us to operate 10 to 12 crews in late June, as well as project and crew roll-off cost from the second fiscal quarter. We anticipate maintaining our previously disclosed $35 million capital budget for fiscal ‘14 with unspent balance dedicated primarily to necessary maintenance capital requirement.

Our balance sheet remains strong with approximately $68 million of working capital and $14 million of debt. We continue to maintain a fully available $20 million revolving line of credit. And we are pleased to announce that continuation of our dividend policy, our quarterly dividend policy of $0.08 per share to be paid on August 29 to record holders of August 15, 2014.

In closing, we appreciate your patience through these challenging quarters. Based on inputs from our valued clients, we believe that we will turn the corner in utilization and the demand for services for remainder of fiscal 2014 remains steady.

We believe that our order book is sufficient to sustain an average of 10 data acquisition crews to calendar year 2014 and we anticipate maintaining equipment base and personnel to do so that through calendar 2014 and beyond. And with that operator, I believe we are ready for questions.

Question-and-Answer Session

Operator

Thank you. We will now begin the question-and-answer session. (Operator Instructions). The first question will come from Jim Rollyson of Raymond James. Please go ahead.

Jim Rollyson - Raymond James

You said eight to nine crews which you worked in the last quarter. And it picked up significantly, it sounds like, in June and so far through the month of July. Can you give us a sense of what utilization on the eight to nine crews was like for the entire quarter? Then maybe a little color on how it's been in June and July, just to give us a sense of maybe what your fourth fiscal quarter looks like from that standpoint?

Stephen Jumper

As we said we were at an average, I guess the number is probably 8.5 that’s halfway between 8 and 9 I guess but we probably had 8.5 working in the third quarter. Rolly, it’s hard for us to put a real number on what exactly the utilization rates, I would tell you that it was much lower than what we typically would consider full utilization for crews in any given time period measurement. We would consider full utilization is probably 75% to 80% and we were well below on that 8.5 average through probably the middle of June. We thought we would be back up at a higher utilization rate earlier than that we anticipated mid to the latter part of Q3. We actually got up to for short period of time to 12, there at the tail end we are currently running 10, had a little bit of slow start in July in terms of keeping everything up and running now, up in quarter, 10, could possibly go to 11 here in very short order.

But the utilization where we sit today for August certainly feels pretty good and it feels pretty good through September. One of the issues that we deal with, I think is and we are working on ways to manage this better is there is a high demand for cable-less channel and so where we are primarily struggling is with the cable equipment to a certain degree. But I think as going forward as more and more of the stuff occurs in West Texas and out of west agricultural area we will have a better chance to get -- to keep best stuff working. I think early part of June we were probably slightly less than average on the 10 crews working I think will be higher than that and all this stuff. I think we’re maybe average or above average on those two in August. And we are still trying to get our hands around the rightsizing again, but as we’ve said it’s really unpredictable and we are trying to figure out what we are going look like from resource standpoint through the end of the year and into early part of ’15. But I think we are getting closer to understanding that.

Jim Rollyson - Raymond James

Just for your visibility it is only good really for the couple of months out?

Stephen Jumper

Our backlog is pretty steady. We’ve got on paper; we’ve got good visibility into early part of 2015, our calendar ’15. We’ve got good visibility throughout the end of the year in the U.S. we are uncertain about Canada at this point, we really haven’t the Canadian season really is a month away from really kind of understanding what that market is going to look like. Our ability to predict for lack of better word backlog coming forward is much more difficult than it has been in the past. And historically there was a delay projects conception and award and now what we are experiencing are delays between award and actual commencement. And so based on the information we have today, we have good visibility through the early part of calendar ’15. We believe that stuff feels like it’s going to have some sense of urgency to it, but at this point we’ve got folks that have things if they want to get done. I don’t know if it’s a need as much as a warrant maybe planning ahead. They are working on partnerships, they are working on their own land deal or whatever the case maybe.

So we are a little bit uncertain but we feel more comfortable with team that we did with 12, we’re hoping that it’s possible things break loose and we may have to ramp back up to 12 but at this point we feel pretty good about that 10.

Jim Rollyson - Raymond James

And the last one for me just given some of the bankruptcies in this industry over the last year or two, what’s the competitive landscape right now like in the U.S.?

Stephen Jumper

It is competitive Jim. There is still plenty of competitors and peers in the market. There are some of the smaller operators have ramped up their capacity to handle larger projects, they certainly wouldn’t have the 10 to 12 crew range that we bring to the table. But we have had two filings, one in the last 18 months, one is emerged and we’ve had another one that’s currently in that position. We did have an announcement last week that from the very large companies, worldwide companies had dispose of their U.S., excuse me, their North American assets to another competitor. So there is a little bit of that going on in the North America market. I think the competitive landscape is continuing to change a little bit. There is still capacity out there. I think the other commentary that you’re -- that’s out there, what limit there is, is that the market in North America is not as robust as any of us would like it to be. I don’t have a clear explanation for that. I believe that there may be a large inventory of durable prospects or durable locations right now that might be hurting us.

I think our situation is a little bit different and that with our client base we’ve had relationships with a long time I think we’re seeing what we consider a steady demand, but the urgency to execute that demand probably isn’t as what we’ve seen in the past. Pricing hasn’t completely broken down, I wouldn’t go that far, but it’s relatively steady on the pricing side. There continues to be a pressure on channel count and efficiencies, I think that still exists and I think we understand and we are working our ways to respond to that. But it is a competitive market out there. We’ve been here before, we’ve always said that we are cyclical inside -- cyclical and we’ve always said that we’re unpredictable. But I think we understand it and I think we have got the right equipment and the right people and the right relationships to work our way through this. And so, I appreciate your questions, Jim.

Operator

Our next question will come from Veny Aleksandrov of FIG Partners. Please go ahead.

Veny Aleksandrov - FIG Partners

Can you talk a little bit more on the unpredictability? I think it's hard for us as it is for you. These 10 crews that you're thinking will be able to operate and the order book that you have. Do you have the major contracts and then you have to fill in the gaps like we usually do? How do you feel? Do you still have to fill in the short-term [indiscernible] gaps?

Stephen Jumper

That’s a good question, Veny. I have commented for quite some time that one of the issues that we deal with has been the lack of smaller projects to fill these gaps between some of these larger projects. The larger projects obviously take more time and effort and expense to get prepared and so we have always felt like that we were doing quite well on the large ones but we needed to have that small project base, I should say or order book to fill those gaps. And honestly, Veny, we have seen a little bit of improvement in there. I do think that we probably and I will take responsibility for this, we may not have managed that as well as we should. I think as we have gone from 14 to 12 and now we are at 10 on a go forward basis, I think one of the issues there, has been not just the number of those projects that are out there but using those projects to keep 14 working a year and half ago were 12.

And I think that sits into, now the number of projects we have, the rightsizing our operation. I still think that the answer to this and where we are trying to get to is channel count utilization spread over many operating systems we need to, our crews that we need to operate at any given time. And it’s been slower closing in on that number but I feel like we are getting there, Veny. So I think there is two sides to that. I think there is a number of projects that are out there and what our internal capacity has been handle some of this unpredictability.

Veny Aleksandrov - FIG Partners

Okay, great. Then talking about the delays and the permit issues that keep causing the delays in issues. Do these just move to the right? Or there will be just one quarter when they're all going to accumulate? And you will have to run 16 crews, for example? I know we cannot run 16 crews, but to satisfy the demand in this quarter, all the projects are going to pile up?

Stephen Jumper

We are trying to avoid that Veny. We are trying to schedule that a little bit better. I think some of that may have actually happened to us on the U.S. side in Q2. Unfortunately, we are in a position to where we don’t have full control over our timing at times and I think that’s true across our industry. I think maybe on about half of our projects, we are in a position to have more control over the timing issues. And so we are trying to get to the point to where the further detailed conversation and communication understand what that looks like, it is possible that we could have some pileup in one quarter. I don’t see that today but that’s not to say that it’s not possible and this is a unique environment for us, I said this before.

We have been in situations where you have seen a downturn and you knew where you had to go going forward, phone stops ringing, your clients quit enquiring. And we have been on up cycles where you have to make sure term and long-term visibility, you have to expand and this one is a little bit different. And I think we are little bit separated from what happened in the fall. In the fall, we had some client delays, we dealt with some agricultural issues but I think we got the right folks in place. And I think we understand we have the right relationships and I wish I can give you more clarity but we are going to pound the way at this and find a solution.

Veny Aleksandrov - FIG Partners

Thank you. And just very quick one and we heard this thing from Peter Lynch the other day that there is a big demand for wireless equipment and not so much for cables. Do you think its short-term event or I mean you have a good amount of wireless equipment, you said that you have problem utilizing the cable.

Stephen Jumper

Our last purchase, our big expenditure in ‘14 was on the substantial number of multi-component three-channel boxes we purchased early in the quarter. And we have been able to keep all of that operating in fact we’re currently working on two large multi-component projects right now which in the U.S. which is a first for us.

We’ve had one going at a time but we’ve never had two. The cable-less issue currently for us I believe is more related to where some of our crews are operating more so than client issues or client demand or request.

We’ve got some projects going on in Oklahoma, we’ve got some projects going on, on the eastern side of the Eagle Ford shale where there is a lot of access issues, where there is a tremendous number of small land track ownerships, there is some agricultural issues in Oklahoma and cable-less equipment works better.

We are able to keep the best place where the cable equipment is going to be, West Texas, Permian basin are through the Niobrara. And I think that will cycle, I think we’ll see some projects come back later in this year, early part of next year that we will relieve a little bit of that, at least for us, we will release some of that cable-less pressure.

Operator

Our next question will come from Rudy Hokanson - Barrington Research. Please go ahead.

Rudy Hokanson - Barrington Research

Could I get some clarification on your crew counts right now? And let me ask specifically, Steve, you're talking about 10 right now. Is one of those 10 dedicated to multi-component?

Stephen Jumper

Yes. We actually have two currently that are working on multi-component. But as a general rule, Rudy, we are going to have one crew that we would consider quote dedicated multi-component. Now having said that we are able to use that equipment in a different configuration for a conventional survey if need be. And so that equipment is quite versatile bit I would agree with I would say that we would consider one crew dedicated multi-component with the ability to move to two based on the equipment level that we have. And of course we believe that it’s too early to say what the Canadian market is going to look like, but we believe that the Canadian market will continue to be predominantly multi-component.

Rudy Hokanson - Barrington Research

Okay. Then on the 10 number that you're giving right now, does that include any consideration for Canada? Or is that purely lower 48?

Stephen Jumper

That is purely lower 48 at this point, Rudy.

Rudy Hokanson - Barrington Research

Okay. Then from what I understand, you still have 12 crews, but 10 are expected, on average, to be utilized through the end of calendar 2014?

Stephen Jumper

We can actually move to 12 relatively easy when we get beyond we have the central recording units to expand a little bit beyond that. But as we move beyond 12, we would start to create a personal issue as well as a probably put some pressure on our energy source fleet.

Rudy Hokanson - Barrington Research

Okay. So of the two that are on hold, how should we think of those two in terms of asset utilization? Are they a heavy weight or is it the fact that your 10 can be expanded to 12? Or how do we look at those 2 that would get you to 12 again if the demand came up quickly?

Stephen Jumper

We have, if not all, a very large portion of our cable-less equipment deployed currently. We have the personnel, the key personnel for those crews that have been reassigned to and dispersed over the other 10. And so when you -- the movement to 12 and I’d just remind everybody this is hypothetical. We are not predicting this but the move to 12 is something that we have done historically, moving from 12 to 14 or 14 to 16 or 8 to 10 or whatever the number maybe, you can gather up those key people and call off of other crews and with labor and you can deploy equipment on very short order. And Rudy, as we have talked about and I have talked about with others, I think our real goal here as an industry is to keep the channel count deployment very high, whether your spread over base is 10, 12 or whatever the number maybe. And I think it’s safe to say that we are in a position to be able to do that very quickly.

Rudy Hokanson - Barrington Research

Okay. And then another point of clarification on the crews -- you were talking about the micro seismic work you have right now. Are those considered smaller crews? I'm not sure what the right adjective is. And are those included in the 10 as well?

Stephen Jumper

Not included in the 10. When we go to a micro-seismic project, we will redeploy a small number of channels typically in the 2,000 range of either the Wireless RT 2000 equipment or the GSR equipment. And typically that involves a couple of thousand channels and very limited headcount, just to deploy the equipment and manage it during the course of the project. But at this point, that micro-seismic work is not included in those 10.

Operator

The next question will come from Georg Venturatos of Johnson Rice. Please go ahead.

Georg Venturatos - Johnson Rice

We talked about this a few different ways. But just curious to get your thoughts on right now looking out, you're talking about 10-plus crews being able to work. We had previously talked about potentially 12 into fiscal 2015. So I just wanted to get a breakdown from last quarter, how much of that variance is related to either demand or secondarily, internally, you all thinking about how to right-size the fleet in terms of how many crews we actually need for the demand that we're seeing.

Stephen Jumper

We had a lot of conversation about how to describe demand in the press release and how we talk about it and I am not sure that we have done an adequate job of being crystal clear on this because I am not sure that we fully understand it. But if everything we had were to be ready and come together, 12 crews would feel pretty good going towards the end of the year based on what we have, what we think we have and we think is out there that will come available to the industry over the next few months. The problem has been in our case and I suspect others is executing on that. And so, the up and down phase of having two crews fully deployed and up and down and folks that you need to take care of and you are committed to them and just the up and down cost of that was not something that we have been able to get right sized.

And so could we keep 12 working at any given time, could we go to 12 if things happen the right way and things got ready, sure. But at this time looking forward, we moved from 12 to 8 from Q2, early part of Q3, we are trying to look at this and say okay, how can we best utilize and right size our personnel and our resources. And right now that number feels like its 10, we feel like based on what we see short term and what will be ready and the timing of such things. I think we are getting closer to understanding that, so I think it’s for us right now, it’s more of timing of the order book. Having said that the overall demand in North America is far from robust and so I think we are going to have to keep an eye on this.

Our indications are for steady, our conversations with our key client base is steady but that kind of factors in too if you can’t get to something right away, it may go elsewhere and so there is timing issues related into some of these project awards as well and so rightsizing it is important for us to get our hands around right now.

Georg Venturatos - Johnson Rice

Okay. All right. That's helpful. Beyond the right-sizing that we've talked about on a crew count perspective, do you see any other significant levers that can help you the cost side? Given the somewhat difficult environment we're looking at going forward from the demand side?

Stephen Jumper

Well, yes. Obviously there are some things that we continue to look at, we continue to look at efficiency of the system not just efficiency of the crew, but I think we are trying to understand in great detail not just and we have not been successful at this because we’ve been downsizing now from 14 to 13 to 12 to 10. And so being able to find that right mix of personnel levels and resource levels and support levels and how long is a day and what’s most efficient. The things that we think we understand we need to do have been impeded somewhat by our unpredictability as to let’s go, get this shot, we’ve got to get this done and we’re trying to get back to where we can control what we can control. And I don’t think in the course of the last several quarters we’ve talked about, we think we understand it, I think we’re getting closer but I don’t think we’ve gotten to the point where we have been able to really understand controlling what we can’t control. Sometimes, I feel like I am lost in the Rumsfeld world of the knowns and unknowns and known and unknowns and all that kind of stuff. So I think we are getting there George. So to answer your question is, I think there is things out there that we can do. Just haven’t had a chance to execute that yet, it’s been very frustrating.

Operator

The next question will come from Jason Kraft of Cato Partners. Please go ahead.

Jason Kraft - Cato Partners

I will try and be as crystal clear as possible and just kind of focus on what matters. Two questions. Was the June quarter trough? And then secondly, we heard a lot about the 10 crews and about how that feels right. At 10 crews fully utilized what’s the level of acceptable or I guess you could say achievable EBITDA on run rate basis? Is it 40, is it 50, is it 60, just if you could comment on those two questions?

Stephen Jumper

Jason I appreciate the question. And I certainly understand your question. I hope the June quarter was the trough, I think it’s the trough. It feels like the trough, things feel like they are better going forward, I am optimistic. I think we are a little early right now to responses to the last question. One is we’re not -- we don’t give guidance and that gets awful close to guidance too. I think we have to continue to understand our right size and understand what’s working and what is going to take to keep that 10 fully utilized and understanding our cost structure before we can really make it clear internal prediction as to what our EBITDA run rate going forward was? I wish I could give you more but I think that’s all I can give you Jason.

Operator

And we will move onto the next question from Joel Luton of Westlake Securities. Please go ahead.

Joel Luton - Westlake Securities

Hi, Steve just a couple of questions. What was your CapEx for the quarter?

Stephen Jumper

It was minimal Joe. I’m going to get my chi-chi here where is it. I think it was about 300,000.

Joel Luton - Westlake Securities

And also you also talked a little bit about the wireless and strong demand for that. Do you have any feel going into next year whether or not you make order additional wireless equipment?

Stephen Jumper

Two things there Joel one is -- and I got you by the right name this time. The --

Joel Luton - Westlake Securities

I appreciate that Steve.

Stephen Jumper

I wouldn’t go so far as to say the demand for wireless is strong, but it’s certainly there. At this point, I do not anticipate us having a large purchase or of wireless equipment unless we something change either in the market or client demand. It’s little early for us to project what that ’15 budget is going to look like but I think we feel pretty good based on what we have and where we are at this point Joel.

Joel Luton - Westlake Securities

Okay. And just one final question, with your stock trading below book value, and you're sitting on a pretty significant cash position that I would anticipate to build as your results start to improve. Would you consider buying back some of the stock at these levels?

Stephen Jumper

Joe, we have had that question in the past and it’s something that one of many things that we talked about within the board room. We implemented, we are on the third quarter of a dividend policy that we feel good about. We feel like it’s a level that we can handle. We certainly take a hard look at other ways to return capital and create value and there is nothing in place now but we will continue to monitor our business and monitor our capital needs and monitor our balance sheet over time. I certainly don’t think we are in a position where we are just in a need to preserve the balance sheet but having said that we are a business, as we have just disclaimed, our results can swing rapidly.

We are a business that can is a large, can carry very large working capital requirement and we are a business that can require a very sudden large capital expenditures. So, we take a look at all those things, Joel, I certainly think that those conversations are ongoing and we are always taking hard looks at what’s best for our operation, our clients and our shareholders all. And we will continue to monitor those things and keep an eye on it.

Operator

The next question will come from Jason Wangler of Wunderlich Securities. Please go ahead.

Jason Wangler - Wunderlich Securities

Just to touch on that last question, just give or take, you're obviously spending $300K or so. What do you think your maintenance CapEx, give or take, is as you assess the full situation and be prepared for whatever is next? Just curious to get a level of that.

Stephen Jumper

We are somewhere under 10 million on an annualized basis for maintenance cap. I would think that is somewhere between 7 to 10; depending on what you throw in the maintenance cap and what the requirements are. And even that as you move from 14 to 13 to 12 to 10, that number actually reduces a little bit because you kind of spread some things around and internally replace as you go which creates a CapEx need on the back side when things turnaround. But somewhere between certainly less than 10 on annualized basis is a number, I would be comfortable with today.

Operator

And ladies and gentlemen, this will conclude our question-and-answer session. I would like to turn the conference back over to Mr. Jumper for his closing remarks.

Stephen Jumper

Thank you, Denise. I very much appreciate and thank all of you for participating in our call. I feel like we are in the right place equipment-wise, personnel-wise. We have got a dedicated employee base and staff that are working diligently to meet our clients’ needs and understand our clients’ needs and are working diligently for our shareholders every day. And we want to thank all of our clients and our employees and our shareholders for their continued support and trust through these unanticipated difficult waters that we have been going through. We think we can see some improvement from here going forward. And I thank all of you and wanted to just mention that we will be presenting at the Enercom Oil & Gas Conference on Monday August 18th. And we look forward to speaking with you in the next 90 days. Thank you.

Operator

Ladies and gentlemen, the conference has now concluded. We thank you for attending today’s presentation. You may now disconnect your lines.

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