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Executives

Robert D. Bondurant - Chief Financial Officer of Martin Midstream GP LLC, Executive Vice President of Martin Midstream GP LLC, Chief Financial Officer of Martin Resource Management and Director of Martin Resource Management

Joe McCreery - Head of Investor Relations and Vice President of Finance

Ruben S. Martin - Chief Executive Officer of Martin Midstream GP LLC, President of Martin Midstream GP LLC, Director of Martin Midstream GP LLC and President of Martin Resource Management

Wes Martin

Analysts

Ethan H. Bellamy - Robert W. Baird & Co. Incorporated, Research Division

Jim Spicer - Wells Fargo & Company

TJ Schultz - RBC Capital Markets, LLC, Research Division

Selman Akyol - Stifel, Nicolaus & Co., Inc., Research Division

Martin Midstream Partners LP (MMLP) Q2 2012 Earnings Call August 2, 2012 9:00 AM ET

Operator

Good day, ladies and gentlemen, and welcome to the Martin Midstream Partners LP Second Quarter 2012 Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded.

I'd now like to turn the conference over to your host for today, Mr. Bob Bondurant, CFO. Sir, you may begin.

Robert D. Bondurant

Well, thank you, Ben. And to let everyone know who's on the call today, we have Ruben Martin, President and Chief Executive Officer; Joe McCreery, Vice President of Finance and Head of Investor Relations; and Wes Martin, Vice President of Business Development.

Before we get started with the financial and operational results for the second quarter, I need to make this disclaimer. Certain statements made during this conference call may be forward-looking statements, relating to financial forecasts, future performance and our ability to make distributions to unitholders. The words anticipate, estimate, expect and similar expressions are intended to be among the statements that identify forward-looking statements made during the call.

We report our financial results in accordance with Generally Accepted Accounting Principles and use certain non-GAAP financial measures within the meanings of SEC Reg G, such as distributable cash flow, or DCF, earnings before interest, taxes, depreciation and amortization, or EBITDA. We use these measures because we believe it provides users of our financial information with meaningful comparisons between current results and prior-period results, and it can be a meaningful measure of the partnership's cash available to pay distributions. Distributable cash flow should not be considered an alternative to cash flow from operating activities. Furthermore, distributable cash flow is not a measure of financial performance or liquidity under GAAP and should not be considered, in isolation, as an indicator of our performance. We also included in our press release issued yesterday a reconciliation of distributable cash flow to the most comparable GAAP financial measure.

Our earnings press release is available at our website, www.martinmidstream.com. Our second quarter 10-Q will be filed on August 6, 2012, and will be available on our website then.

Now, I'd like to discuss our second quarter performance. For the second quarter, as a result of the sale of our Prism assets to Centerpoint Energy, we have reported our financial performance segregated between continuing operations and discontinued operations. Our continuing operations are what remain after the sale of the Prism assets, and our discontinued operations information reflects the performance of the Prism assets. The comments I'll make today will focus primarily on our continuing operations.

For the second quarter of 2012, we had net income from continuing operations of $5.2 million, compared to $5.7 million for the prior year second quarter. For the first 6 months of 2012, we had net income from continuing operations of $14 million, compared to $10.6 million for the prior year's first 6 months. As with other MLPs, we believe the most important measure of performance is distributable cash flow. Our distributable cash flow, or DCF, for the second quarter was $21.7 million, a distribution coverage of 1.12x.

For the first 6 months of the year, our total DCF was $44.8 million, a distribution coverage of 1.15x. This DCF includes cash flow from our discontinued operations, as this cash flow was available to pay distributions during the year.

Now I would like to discuss our second quarter cash flow from continuing operations compared to the first quarter. In our Sulfur Services segment, our cash flow, which is defined as operating income plus depreciation and amortization, but excluding any gain or loss on sale of assets, was $14.1 million in the second quarter compared to $14.4 million in the first quarter.

Our cash flow on the fertilizer side of the Sulfur Services business was $9.9 million in the second quarter, compared to $9.6 million in the first quarter. Our fertilizer products continue to benefit from a strong agricultural climate in the second quarter. Also, we continue to have improved operations and utilizations at our fertilizer production facilities, which has lowered operating cost on a per-ton basis. Looking to the third and fourth quarter, we will see weaker cash flow performance on the fertilizer side of the business as seasonal agricultural demand significantly slows down in this period.

On the pure sulfur side of the business, our cash flow was $4.1 million in the second quarter, compared to $4.8 million in the first quarter. This decrease was primarily a result of increased repair and maintenance expenses in our sulfur marine delivery system. Barring any unforeseen operational event, sulfur marine operating expense should return to normal into the third quarter.

In the Terminalling segment, our cash flow was $9.6 million in the second quarter compared to $8.4 million in the first quarter. Our specialty terminals, which includes our Cross Oil lubricant processing operations and our 3 new 100,000-barrel crude tanks in Corpus Christi, had cash flow of $5.9 million in the second quarter compared to $4.3 million in the first quarter.

The new vacuum tower at the Cross Refinery became operational in mid-May and accounted for $1 million of this increase. And the new crude tanks in Corpus accounted for the remaining $600,000. The new vacuum tower is operating better than expected and the volume of crude flowing through our tanks in Corpus Christi is already reaching capacity. As a result, we are currently building 3 more 100,000-barrel crude tanks at our Corpus terminal, and these should be fully operational by mid-fourth quarter.

The other portion of our Terminalling segment, marine shore bases, had cash flow of $3.7 million in the second quarter compared to $4.1 million in the first quarter. Although our cash flow declined in the second quarter, we continue to believe there will be an increase in the Gulf of Mexico rig count year-over-year. As a result, our diesel throughput volume should increase, driving an improvement in its operating cash flow.

In our Marine Transportation segment, we had cash flow of $5.1 million in the second quarter compared to $2.4 million in the first quarter. The inland side of the business accounted for $1.5 million of the increase in cash flow, and the offshore side of the business accounted for the remaining $1.2 million. Both segments of the Marine business experienced increased utilization as the first quarter had more shipyard downtime of key operating assets. Currently, our offshore fleet continues to operate at 95% capacity, and our inland fleet is operating at over 90% capacity. Also, the current draft conditions affecting the inland waterways in the Midwest should not impact our inland Marine revenue negatively as our tolls are on contracted day rates.

Now I would like to address the Natural Gas Services segment. This segment reflects the impact of the discontinued operations of Prism, which was sold to CenterPoint. So for reporting purposes in today's discussion, I will focus on continuing operations.

The remaining business in our Natural Gas Services segment is our wholesale NGL business, which is a volume-driven and margin-driven business. This business primarily purchases NGLs at a contracted price, use the product through our NGL logistic systems and ultimately resell the product at a margin. Because it is a margin business, there is typically no significant commodity price risks other than any unhedged NGL inventory we may be carrying in our overall logistic system.

In addition to the wholesale NGL marketing business, we have our investment in Class B shares at Redbird Gas Storage. This Class B ownership reflects Cardinal Gas Storage partners investment in Monroe Gas Storage. Monroe Gas Storage makes distributions each quarter, which flow from Cardinal Gas Storage to Redbird and then into our Natural Gas Services segment. So for the second quarter, we had cash flow from continuing operations in our Natural Gas Services segment of a negative $0.5 million in the second quarter compared to a positive $3 million in the first quarter. Although NGL volume was up 6% for the quarter, our margin per gallon fell from $0.047 per gallon to $0.014 per gallon. For the fourth quarter, overall, NGL prices fell approximately 30% to 35%. As results of this rapid price decline, we experienced compressed margins on the unhedged portion of our NGL inventory. Another piece of the decreased NGL cash flow was a result of seasonality in the wholesale propane business, which weakens in the summer months. In addition to this operating cash flow, we received a distribution from Redbird of $1.3 million in the second quarter compared to $1.1 million in the first quarter.

So when adding the distributions from Redbird to operating cash flow, we had overall cash flow from our Natural Gas Services segment of $0.8 million in the second quarter compared to $4.1 million in the first quarter.

Looking toward the rest of the year, we have contractually foresold much of our normal and isobutane inventory at significant margins above our quarter-end inventory values. As a result, we believe the third, and especially, the fourth quarter cash flow from this segment will significantly improve when compared to the second quarter.

Finally, in the second quarter, unallocated SG&A was $2.3 million compared to $2.4 million in the first quarter.

So to summarize, MMLP had overall cash flow from continuing operations of $27.3 million in the second quarter compared to $25.8 million in the first quarter.

For the second quarter, we had maintenance capital expenditures and turnaround costs of $3.5 million. For the first 6 months, these costs have totaled $5.3 million. Of this maintenance capital expenditure cost, $0.5 million for the year was from discontinued operations. For the full year, we are forecasting total maintenance capital expenditures and turnaround costs to be approximately $12 million.

Our growth capital expenditures for the second quarter were $15.3 million and had been $43.8 million for the year. For the first 6 months, we spent $12.1 million on the vacuum tower and $15.1 million on the Corpus crude tanks. Also for the year, we have made a total investment of $11.9 million for additional Class A interest and a net investment of $3 million in Class B interest in Redbird. The Class A interest in Redbird reflects ownership in Arcadia, Perryville and Cadeville assets, which Cardinal Gas Storage owns directly. As of June 30, 2012, Redbird owns 40.3% of Cardinal, and MMLP owns 9.7% of Class A interest in Redbird and 100% of Class B interests in Redbird.

Now looking to the remainder of the year, we anticipate spending approximately $30 million on growth capital expenditures and approximately $20 million for additional Class A interest in Redbird. This additional Redbird investment will fund ongoing storage asset development at Arcadia, Perryville and Cadeville, all of which are contracted. In all 3 of these storage locations, we'll have new cash flow beginning in the third quarter of 2013.

Now I would like to turn the call over to Joe McCreery, who will speak about liquidity and capital resources.

Joe McCreery

Thanks, Bob. I'll keep my comments brief this morning so we can get to Q&A. Let's start by walking through the debt components of the partnership's balance sheet. I will then highlight the activities that impacted our liquidity position during the second quarter.

At June 30, 2012, the partnership had total funded debt of approximately $453 million. This consisted of $173 million of our senior unsecured notes, $274 million drawn under our $400 million revolving credit facility and approximately $6 million of capitalized lease obligations. Thus, the partnership's available liquidity at June 30 was $126 million.

For the second quarter ended June 30, our bank compliant coverage ratios, defined as senior secured indebtedness to adjusted EBITDA and total indebtedness to adjusted EBITDA, were 2.67x and 4.32x, respectively. Additionally, our bank compliant interest coverage ratio, defined as adjusted EBITDA to consolidated interest expense, was 4.25x.

Looking at the balance sheet, our total funded debt to total capitalization was 55.9%, which is slightly higher than the March 2012 quarter, primarily as a result of incremental borrowing spend under the revolving facility used to fund growth capital expenditures and additional working capital.

In all, at June 30, 2012, the partnership was in full compliance with all banking covenants, financial or otherwise.

As Bob mentioned, on Tuesday of this week, we completed our previously announced divestiture of our natural gas gathering and processing assets, receiving just over $273 million in proceeds. As required by our credit agreement and bond indenture, we immediately applied those proceeds to our revolving credit facility.

So looking on a pro forma basis at our June 30, 2012 compliance ratios, our senior secured indebtedness EBITDA would've been 0.1x, as the revolver would've since then been unfunded, and our total debt to EBITDA would've been 1.7x, giving pro forma effect to the divestiture.

Yesterday, on August 1, 2012, we had a current revolver balance of $35 million. This amount reflects drawing since June 30, 2012, primarily attributed to further organic growth spending and incremental working capital primarily attributed to inventory sale by NGL Group.

With our recharged balance sheet, we are now looking at potential uses of proceeds for future distributable cash flow growth. As Bob mentioned, we expect to spend about additional $50 million in the second half of 2012, on top of the $44 million spent during the first 6 months. Those amounts are fully cooked in our forecast. In addition, as we mentioned on our June 19 update call, the partnership has identified approximately $200 million to $300 million potential organic growth projects.

Finally, we are pursuing several strategic acquisitions that complement our existing asset base. We believe one or more of these potential acquisitions is likely to occur before the end of 2012.

Now on the capital raises and debt retirement. The partnership's only capital raise during the second quarter 2012 was adding incremental bank capacity. In early May, we added a new lender to our banking syndicate and a commitment of $25 million. This total brings our borrowing capacity to $400 million, as mentioned before.

Also during the second quarter, we decided to use $25 million of the January 2012 equity offering to partially exercise an option pursuant in our indenture. As you may be aware, we have the option to redeem up to 35% of the aggregate principal amount of our notes at a redemption price of 108.875%, the principal amount, plus accrued interest. On May 25, we redeemed $25 million of our senior notes from various noteholders using the proceeds of our common equity offering. The notional amount of $25 million coincided with the aforementioned commitment amount we received from the new lender in our syndicate, and thus was viewed as liquidity neutral under our credit facility.

Ben, this does conclude our prepared remarks for this morning. We'd like to now open the lines for questions and answers.

Question-and-Answer Session

Operator

[Operator Instructions] And our first question comes from the line of Ethan Bellamy from Baird.

Ethan H. Bellamy - Robert W. Baird & Co. Incorporated, Research Division

With respect to the drought conditions, you said no impact on the Marine Transport business. I just wanted to clarify that. And then, is there any business impact from -- on fertilizer that you have seen or would expect to see?

Ruben S. Martin

I can address that. The impact, of course, was the river. And there's been a lot of places that have been unavailable to be able to get to on the river. And they've had to short load some of the barges because of the draft restrictions in certain areas on the river. And again, I think the point he made that was that all of our inland-type barges that run those systems are on day rates, so they are not impacted. If they're having to sit and wait or short load or whatever, our -- where revenue's neutral on that situation. And as for the draft, it's really run the commodity prices up to a standpoint that we expect the fertilizer business to continue to remain very strong because of the needs that'll be there next year. With the commodity prices there'll still -- there'll be another good year when it comes to acreage planting. Randy has a better idea, probably about the total amount of acreage that's been planted and probably will be planted next year. Does that answer your question?

Ethan H. Bellamy - Robert W. Baird & Co. Incorporated, Research Division

Yes, sir. With respect to the likelihood of acquisitions, can you give us -- narrow it down by segment? What type of businesses are you looking at? And what's most likely to get done?

Ruben S. Martin

Wes, you want -- I don't know if we want to divide it up totally into different segments. But we are...

Wes Martin

Yes, I'll just add. Typically -- and this is no different. What we've been focused on in terms of growth capital spending, organic-wise, in the Terminalling and Storage business and also some of our investments into Natural Gas Storage, that's really where we continue to see the capital dollars being invested, both from an organic standpoint and an acquisition standpoint.

Ethan H. Bellamy - Robert W. Baird & Co. Incorporated, Research Division

Okay. And then last question, with respect to Redbird, what does the contracts look like in terms of duration now, maybe on a weighted average basis?

Joe McCreery

Right now, depending upon how you look at the Class A interest versus the Class B and the projects that are represented by -- or that represent those interests on the -- without getting into too many specifics, just on a general basis, Arcadia, we put into service last June. That was fully contracted, the first base there. And then at Perryville, which is coming online next summer, that will -- that first cavern will be fully contracted. And so -- and then Cadeville, I think we announced on that front that we did -- we entered into a long-term contract for basically 100% of the capacity with Shell on that deal. So in terms of caverns that are coming online, we're substantially contracted close to 100%. And then you have the Class B interest being at Monroe, and that's approximately, I think, at this point in time, 70% to 85% contract just as a rough directional range.

Ethan H. Bellamy - Robert W. Baird & Co. Incorporated, Research Division

And in terms of the duration of those contracts?

Joe McCreery

Yes. Without getting into too many specifics, I'd say weighted average across all of those, you're probably talking in the range of 4 to 5 years on a weighted-average basis.

Operator

Our question comes from the line of James Spicer from Wells Fargo.

Jim Spicer - Wells Fargo & Company

A couple of questions. On the remaining assets at Natural Gas Storage, can you provide any guidance as to what you think run rate, kind of, cash flow number would be? It sounded like things were a little bit weaker this quarter, but then with additional distributions from storage as well as some pickup on the -- with the remaining assets. I'm just trying to get an idea of what the -- of what a good number to use is.

Ruben S. Martin

Yes, I'll step in on the Redbird side and then, Bob, if you want to comment with respect to the liquids business. On the Redbird side from a Monroe perspective or a Class B perspective, we see distributions being roughly -- in the next, call it 12 to 24 months, approximately $3 million annually -- $3 million to $4 million annually from that standpoint. The investments that we're making into Class A interest, the Class A projects have project financings at Arcadia, Perryville and Cadeville, and so those -- ultimately the cash flow in the short run is getting swept up to pay down the project financing debt related with that. So we don't see in the next, call it, 24 months, any cash flow coming up from those specific projects. With -- and that's using the assumption that we do not do any sort of project refinancing. So, over the short- to medium-term, I would say, from the Natural Gas Storage piece of the overall, Natural Gas Services business look at $3 million to $4 million of distributions for the next -- annually, for the next 2 -- roughly 2 years.

Robert D. Bondurant

And on the NGL side of the business, I'll just go on an annual basis. There is seasonality in this business in the -- strength in the fourth and first quarter and generally weaker in the second and third quarter. But on an annual basis, I would say the cash flow from the remaining NGL business should be in a range between $10 million and $15 million.

Jim Spicer - Wells Fargo & Company

That's very helpful. My next question is just -- I just wanted to confirm that with the sale of the Prism assets, that doesn't affect the size of the revolver, the capacity that you have under the revolver?

Robert D. Bondurant

Correct, James. Immediately, those proceeds went to pay down the revolver, which is one of the requirements there. But there's no commitment reduction as such.

Jim Spicer - Wells Fargo & Company

Okay. And then on a pro forma basis now for the sale, what -- what percentage of the business has real commodity price exposure at this point?

Robert D. Bondurant

Really our Sulfur fertilizer business are a margin business. Now you have compression of raw materials -- I'm thinking of the fertilizer here -- raw materials run up, and you don't pass it through so quickly. But it's still a margin business. And it's indirectly driven, as Ruben spoke to, commodity pricing on the agriculture side, so it's an indirect on the ag side -- higher ag prices obviously drive more volume. But pure commodity price exposure there to us, to our actual products that we're selling, it's not there, it's margin. Now on the NGL side of the business, it's still the same. But for example, this quarter, like I said on the unhedged piece of inventory, we do have commodity price risks if we don't have it hedged. And then again, indirectly on the Terminalling side -- not directly, indirectly, if crude is -- prices are down, then I would think our volumes would be impacted. But overall, I would say, direct commodity price exposure like we had in the gas processing business, where we had true price risks because we were getting paid, and product is not really there anymore.

Ruben S. Martin

Yes. And I'll just say is the reason that in the fertilizer side, that if you do have higher commodity prices, meaning the corn and the products are making, you're going to have more acreage planted. And more acreage means more consumption of volume.

Jim Spicer - Wells Fargo & Company

Yes, okay. The last question I have is looking at the additional potential acquisition opportunities, can you give us an idea as to whether you're looking at sort of small add-on types of acquisitions or things that might be more substantial in size? And what the criteria -- the primary criteria is that you're looking at in evaluating potential additions?

Joe McCreery

I'll try to answer that, again, I'll be generally vague here, James. But in terms of size we're looking at, we're looking at a couple of different opportunities that would be larger than our normal acquisition. And when I define normal acquisition, I would say -- historically, we've done a lot of acquisitions in the $25 million to the $50 million range. And then -- so we're looking at a couple of different acquisitions that would be larger than that. I don't want to get into how much or specifically, with which segment. Again, I'll just reiterate, in terms of investment dollars, we continue to focus on the Terminalling source and Natural Gas Services business as evidenced by our organic growth capital dollars. So I know -- I just don't want to get into too many specifics with respect to acquisitions at this point.

Jim Spicer - Wells Fargo & Company

So would you be looking more at acquisitions that are -- or assets that are already generating cash flow? Or ones that are more kind of start-up in nature that would require upfront capital investment?

Ruben S. Martin

I would say both. We're looking at -- yes.

Operator

Our next question comes from the line of TJ Schultz from RBC Capital Markets.

TJ Schultz - RBC Capital Markets, LLC, Research Division

Just first on the Corpus terminal, it sounds like this is ramped up as expected. I'm just kind of curious, beyond the additional tanks that you're adding by year end, just your comment on if there are other potential infrastructure investments that you could realize kind of around the asset there?

Ruben S. Martin

Yes, this is Ruben. Yes, we believe that there is -- or talking about different things, you have different gravities of crude in that area coming from the same areas upper and lower. So there's talk on those types of tanks, things that can handle different things. And so, yes, there's a lot going on in the volumes of increased in ramp far above our minimum throughput levels and so forth there. So there's a lot of opportunities down there that we're evaluating every day.

Robert D. Bondurant

And I'll say our terminal there has capacity, in addition to 3 we are building, to build another 3. So we could have a total of 9 100,000 barrels tanks there. And although we don't have those last 3 contracted, I would say there's high likelihood that that could happen.

TJ Schultz - RBC Capital Markets, LLC, Research Division

Okay, on Cross -- on the vacuum tower, it sounded like you said it was performing better than expected. Can you just kind of give us what you expect the ultimate EBITDA uplift to be with the tower?

Robert D. Bondurant

Wes?

Wes Martin

Yes, I think in terms of the total investment, we're still -- and drilling a test period to see what the total throughput charge is going to be, but I think on that investment, it's going to be roughly around $24 million to $25 million all in, once the last dollars are spent and we get that all reconciled. And that should reflect roughly $3 million to $4 million of annual cash flow.

TJ Schultz - RBC Capital Markets, LLC, Research Division

Okay, great. I guess just lastly on the Marine Transport segment. If you could just comment on what you're seeing for trends for day rates and then also, any Utica demand that you're seeing?

Robert D. Bondurant

Trends for day rates it is slightly strengthening. We have -- I know one toll hole in Utica, and there's discussions of an additionally toll, but that hasn't come to pass exactly yet. But we have, I would say, on the inland side of the business, I would say, the weighted average pricing is probably has a $8,000 day handle on it, which is trended higher from where it would have been a year ago.

Operator

[Operator Instructions] Our next question comes from the line of Selman Akyol from Stifel, Nicolaus.

Selman Akyol - Stifel, Nicolaus & Co., Inc., Research Division

On the NGL side, I understand that you don't have commodity exposure unless you choose to, so I guess could you talk a little bit about the hedging policy that you have there when you decide to take the exposure, and when you decide not to?

Robert D. Bondurant

Yes. I'll speak to that. Generally, we're trying to run a book as close to a hedge as possible. When there's some -- I guess intelligence in the marketplace that our guys have received we may not hedge 100%. But what we'll do is -- for example, propane in the summertime, especially up here in the Northeast Texas, North Louisiana, South Arkansas, is excess propane, we take it to storage. But when we -- we're building that inventory, we're foreselling as we purchase into the winter and kind of locking in on our margins. Doing the same thing with butanes -- gathering of butanes in Louisiana and storing them for when the refinery season, when they can spike their gasoline with butanes back in the winter time, we'll buy in the summer and build our working capital but have our sales and, really, the fourth and first quarter during the blending season for gasoline. But when we take that product, we're foreselling in the fourth and first quarter. And so that's how we do it. We try to manage a book close to 0 as possible. But unfortunately, we didn't -- we're a little bit off this first -- this second quarter, but that's our long-term strategy.

Selman Akyol - Stifel, Nicolaus & Co., Inc., Research Division

All right. And then in terms of the acquisitions, I know a lot of questions have been asked, and you want to stay vague here. But as we think about it, are you looking more at fee-based? Or would we expect to see some commodity exposure come with these assets as well?

Wes Martin

I would -- this is Wes, again. I'll say -- again, I may sound like a broken record here, both. At some of our niche specialty-based -- specialty markets where we're a little bit more comfortable, there might be some working capital taken on or some -- I wouldn't necessarily call it direct commodity exposure, but as Bob mentioned earlier in some of our other business, indirect commodity exposure. So we're looking at both sides of that, both fee-based and margin-based, if you will, in nature.

Ruben S. Martin

This is Ruben. I consider a lot of those are almost the same when you look at the margin-based or the fee-based. But again, there's sit-tight fees that you're going through assets, and I would say it's more toward that.

Selman Akyol - Stifel, Nicolaus & Co., Inc., Research Division

All right. And then last question for me. Current investment on the Class B units right now?

Robert D. Bondurant

Yes. We've -- in total, we've invested through the Class B including the initial investment for approximately $65 million to $70 million.

Operator

And I'm showing no further questions in queue.

Ruben S. Martin

Well, can we close it out then?

Operator

Absolutely.

Ruben S. Martin

Okay. Well, this is Ruben, and I appreciate everybody calling in today. And we appreciate your interest in our company. And there's a lot of good questions there concerning where we're going. And we do have -- with the paydown of our revolver, we've got some dry powder that -- we've really got some good projects that are going to be out there that we're not only working on internally, but acquisitions. And we're well positioned for growth. And there's a lot of people that are talking a lot of things. We're going to be very busy between now and the end of the year. And I think there's going to be a lot happening and many opportunities that, like I've never seen in this type of business. So we're looking forward to between now and the end of the year. It's going to be a busy time, and we appreciate your interest. Thanks guys.

Operator

Ladies and gentlemen on the phone lines, thank you for your participation in today's conference. This does conclude the program, and you may all disconnect. Have a great rest of the day.

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