FTS International's (FTSI) CEO Michael Doss on Q1 2018 Results - Earnings Call Transcript

FTS International, Inc. (NYSE:FTSI) Q1 2018 Results Earnings Conference Call May 1, 2018 10:00 AM ET

Executives

Michael Doss - CEO

Lance Turner - CFO

Analysts

Judson Bailey - Wells Fargo Securities

Byron Pope - Tudor, Pickering, Holt & Co.

Michael LaMotte - Guggenheim Securities

Scott Gruber - Citigroup

William Thompson - Barclays

Jon Hunter - Cowen & Company

Teresa Fox - Stone Harbor Investment Partners

John Daniel - Simmons & Co.

James Spicer - Wells Fargo Securities

Operator

Ladies and gentlemen, thank you for standing by, welcome to the FTS International, First Quarter 2018 Earnings Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded today Tuesday, May 1st, 2018.

Presenting today are Mike Doss, Chief Executive Officer; Lance Turner, Chief Financial Officer; and Buddy Petersen, Chief Operating Officer.

Before we begin, I would like to remind everyone that this conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on management's current expectations, assumptions and beliefs.

Forward-looking statements can often be identified by words such as expect, anticipate, intend and similar expressions and variations or negatives of these words. These forward-looking statements include, but are not limited to, statements regarding our operations, capital expenditures and business strategy. They are not guarantees of future results and are subject to risks, uncertainties, assumptions that could cause actual results to differ materially from those expressed in any forward-looking statement.

Listeners are encouraged to review the company's earnings release that was filed with the SEC and other recent SEC filings for more complete discussion of the risks and other factors that could affect the forward-looking statements. Except as required by law, the company does not undertake any obligation to locally update or advise any forward-looking statements.

This conference call also includes a discussion of adjusted EBITDA and non-GAAP financial measure. Our earnings release filed with the SEC also includes further information about this measure and a reconciliation of net income or loss to adjusted EBITDA.

I will now turn the call over to Mike Doss. Please go ahead, sir.

Michael Doss

Thank you and good morning everyone. We are pleased to report solid results for the first quarter. While we had a rough start to the quarter due to weather disruptions, we grew our revenue by 2% sequentially to $467.5 million. Net income for the quarter was $78.7 million, net of a $9.3 million loss on debt extinguishment, and adjusted EBITDA was $129.1 million.

We had 27.5 active fleets in the first quarter and our annualized adjusted EBITDA was $18.8 million. In the first quarter, we completed 296 stages per fleet, which was down from 315 in the fourth quarter. That decrease was entirely due to weather disruptions.

Fortunately, we were not much impacted by and delays caused by the rail congestion problems that some in our industry experienced. Our supply chain grew, did an outstanding job of keeping our fleets and supply during the quarter. Monthly efficiencies gained throughout the quarter with an exit rate above both third quarter and fourth quarter average levels. This provides us with momentum as we enter the summer months, normally the busiest part of the year.

Net pricing increased slightly in the first quarter and we expect net pricing to be flat in the second quarter. Thus, improvement in our second quarter results will be driven by higher efficiencies.

Spot market pricing has eroded in recent months. However, as nearly all of our work is under dedicated arrangements, we are less exposed to short-term swings in the spot market. The supply and demand situation has shifted from a quarter or two ago; it's not as tight as it was.

The land rig count grew 12% per quarter on average last year, with the bulk of the growth occurring in the first half of the year. In the first quarter of this year, the average rig count grew just 5% from the fourth quarter. This drilling slowed down has also affected pressure pumping. The additional frac fleets that have come into the market this year has had to compete for work by offering lower prices.

On a supply side, we have seen estimates of gross additions of 4 million to 5 million horsepower this year. Some of that will be used to replace existing equipment due to attrition.

However, in our view, there isn't massive attrition out there. In our case and as we believe with others, one equipment just gets rebuild and send back of to the field. With so much equipment getting rebuilt over and over again, the accounting concept of ease-for-life where an asset is retired after X number of years isn't helpful.

One thing that does help is some of the horsepower additions will be absorbed by existing fleets as more fleets are fracking longer lateral wells that require more horsepower per fleet.

I actually find it easier to think about the number of fleets as opposed to horsepower where possible. That's because it's difficult to get reliable horsepower data or as a fleet is the operating unit that generates cash flow. In terms of demand, we are optimistic. We think higher oil prices will lead to a higher rig account and increase demand for frac fleets.

While supply and demand is roughly balanced in the near-term, we believe there is a good likelihood of a tighter market in the second half even as additional horsepower becomes available.

In the first quarter, we reactivated our 28th fleet and we currently expect to reactivate our 29th fleet in June or July. Visibility into the deployment of additional fleets only goes out so far. We have several customers asking about availability in the third quarter and we expect that we could reactivate one or two additional fleets then.

Fleets that we deploy will be under dedicated arrangements and good pricing with customers that operate like Lean/Six Sigma manufacturing companies. Our fleet deployment teams has been stretched out compared to previously discussed plans. That's because we're very disciplined in our approach and we adapt to changing conditions.

Our focus is on generating industry-leading profitability and returns. Given the software leading-edge pricing, we simply don't think it make sense to push more fleets out into the market. We feel good about the commodity price situation and expect we will see ample opportunities for further deployments in the not-too-distant future.

As it relates to our equipment, our maintenance facility in Aledo, Texas near Fort Worth is on track to complete all of remaining rebuilds of our previously stacked fleet by the end of the third quarter.

We still plan to complete our previously announced two new-build fleets by year end at a very competitive cost of $25 million per fleet, thanks to our in-house manufacturing capabilities. Once those are completed, our total available, our marketable capacity will be 34 fleets.

Lastly, as an update on logistics, all of our fleets are now using second-generation sand delivery systems. This includes 23 fleets currently using boxing systems, mostly [Indiscernible] and five fleets using customer provided silo systems. We're very pleased with the efficiencies and the environmental benefits that we're seeing from these systems as compared to the oil tankings and [Indiscernible]. We are also working with [Indiscernible] for further improve their systems, including increased volumes per box and greater logistical optimization through the use of RFID tags.

With that, I will now turn it over to Lance.

Lance Turner

Thank you, Mike. Revenue for the first quarter was $467.5 million, up 2% sequentially. Our average active fleet was 27.5 during the quarter, an increase of 1.3. As Mike mentioned, average pricing was up slightly in the first quarter. Most of this pricing improvement was attributable to customer mix, as we shifted our work towards more profitable customers as opposed to rate increase. The impact of slightly higher pricing and more active fleets in the quarter was partially offset by the lower efficiencies from the weather disruptions.

Cost of revenue increased slightly during the quarter due to the higher active fleet count, as we've been able to manage the pressures of cost inflation in the current environment.

Selling, general and administrative costs totaled $25.8 million for the quarter and includes $1.6 million in stock-based compensation and $3.7 million in restricted stock redemption costs.

The restricted stock units were granted as part of a long-term incentive plan adopted in 2014 invested upon IPO. We do not include this is an add-back in the calculation of adjusted EBITDA, but view it as a one-time charge related to the IPO.

The stock-based compensation of $1.6 million relates to the current stock plan that went into effect at the IPO. Therefore, the amount in the first quarter is roughly half of the amount we would expect in future quarters. We do include this non-cash amount as an add-back in the calculation of adjusted EBITDA.

We continue to manage our SG&A cost and the first quarter is in line with our expectations. Looking forward, we expect the run rate to continue, which equates to approximately $24 million per quarter including the recurring stock-based compensation.

Net income for the quarter was $78.7 million, down from $92.9 million in the fourth quarter. This includes a $9.3 million debt extinguishment loss related to the prepayment penalties on our footing rate notes and the write-off of related deferred financing costs.

Adjusted EBITDA for the first quarter was $129.1 million or $18.8 million per active fleet on an annualized basis. This was slightly lower than the fourth quarter due to lower efficiency.

As we exit the first quarter and entered the summer months with a stable pricing environment, we expect EBITDA per fleet to rebound to our fourth quarter levels. The magnitude of the rebound will be determined by our ability and our customers' ability to maximize efficiency of our active fleets.

Capital expenditures for the first quarter totaled $37.8 million. This level of spend is in line with our expectations and our full year estimate remains unchanged at $130 million to $150 million.

Our industry-leading profitability allows the company to generate a considerable amount of cash that will continue to reducing indebtedness. In the last four quarters, we reduced our net debt level by approximately $500 million, $200 million above and beyond the net IPO proceeds. This was in addition to building working capital by approximately $100 million over the same time period.

In addition, we repaid another $15 million of our term loan yesterday, while maintaining a relatively consistent cash balance. That brings our gross debt level down to $685 million as of today, one step closer to our target of $500 million or less.

More importantly, our debt service costs have declined even further. Our quarterly interest expense has declined from approximately $21 million in the first quarter of 2017 to an expected run rate of approximately $11 million in the second quarter of 2018. This figure will continue to decline to less than $8 million per quarter when we achieve our targeted debt level.

We're once again proud of the team's execution this quarter as we kick-off another start -- another profitable year for FTSI. We look forward to reporting profitability improvement and further debt reduction on our next call.

With that, I'll now turn the call over for questions.

Question-and-Answer Session

Operator

Thank you. [Operator Instructions]

Our first question comes from the line of Jud Bailey with Wells Fargo. Please proceed.

Judson Bailey

Thanks. Good morning. Question on, Lance, on your commentary on EBITDA per fleet for the second quarter, just wanted to make sure we understand moving pieces. If stages per fleet is tracking, I think you said Middle East above 3Q 2017 levels and the pricing is higher than it was at that time. Why would EBITDA per fleet be only in line with 4Q, shouldn't it be higher? Or are we missing something in terms of the moving pieces on how to think about EBITDA per fleet in 2Q?

Lance Turner

I think you're thinking about right. I think the unknown is -- we're obviously looking to maximize efficiency and we had a good exit rate to Q1. And we're trying to keep that going for the whole quarter, but the profitability will really just be a function of what we're able to achieve for April, May, and June.

And so if we can exceed efficiency significantly, I would expect profitability to rebound past Q4 levels and that's really the unknown and I think we're not really in a position to kind of guidance on where we think efficiencies will fall out and where we think profitability will fall out.

Judson Bailey

Okay. So, if efficiency is where you exited the first quarter, then we would expect something above the fourth quarter, is that fair?

Lance Turner

Slightly.

Judson Bailey

Slightly. Okay. And then just thinking about -- can you maybe go into little more detail on the conversations you're having with customers for the 29th fleet and then the conversations that you're having for the couple of fleets in the third quarter. It sounds like nothing is eminent kind of how are those conversations progressing from about the pricing? And how much E&Ps want to start up in the third quarter, I guess?

Michael Doss

Jud, this is Mike. Yes, as far as the conversations, they're ongoing as far as fleet 29, 30, 31. We've got some indications that some work starting in August and September. Just our customer's plans, they're asking for additional fleets and so we're in discussions with them above that. I imagine that it will take another month or so before we'll get something more definitive on that. Fleet 29 is more active in terms of being deployed and we're trying to get that on the schedule.

Judson Bailey

Okay. All right. I'll turn it back. Thanks.

Operator

Thank you. Our next question comes from the line of Byron Pope with Tudor, Pickering, & Holt. Please proceed.

Byron Pope

Good morning guys. Just wanted to get your perspective given that you've got a good basin breadth in all the key place. You commentary with regard to the spot market pricing on the leading edge, is it fairly broadly distributed across basins, is the pressure more acute in some areas versus others?

Michael Doss

Yes, Byron, I would say it's pretty consistent across regions. Horsepower does move between the different regions pretty easily. It can maybe take a couple of months lag. But I would say what we're seeing in the spot market is really applicable to the entire market.

Byron Pope

Okay. And then I realized you guys weren’t terribly impacted by the tail delays and the sand logistics issues in Q1, but just so that I can make sure I'm thinking about this the right way. My assumption is that in instances where the customers are providing their own sand and there might be issues getting that to the well site. You guys are protected in terms of receiving some sort of standby rate, is that a fair way to think about it?

Michael Doss

Yes. That's absolutely accurate.

Byron Pope

Okay. Thanks guys.

Operator

Thank you. Our next question comes from the line of Michael LaMotte with Guggenheim. Please proceed.

Michael LaMotte

Thanks. Good morning guys. Really solid quarter. The first question I have, Mike, is just on the efficiencies. If comment that March exited was better than fourth quarter, I'm curious as to what the key drivers are, say, March performance versus second half last year, is it related to the boxes and silos, which are using? Is it labor learning curve? Are there things that you can point to as to the key drivers of your efficiency gains, say, over the last six to 12 months?

Michael Doss

It's hard to nail down just one or two key drivers because there's a lot of small things. We've got a lot of operational initiatives underway that are helping to improve efficiency, how we manage the equipment, uptime on the equipment in particular. Customer mix always has a big impact and so we moved to customers that are doing more zip [Indiscernible] or that are just more efficient and how they operate. We see fluctuations there.

I'd say labor is not much of an impact. There's always a learning curve as we build new cruise, but I would say that that's not a material factor between second half and say March efficiencies. It -- I really can't describe anything in particular. Just a bunch of small things that that move in our favor overtime that allows us to crank out higher efficiencies.

Michael LaMotte

And how do you think that the system overall is managing this level of work right now if you think about trucking and sand availability, access to waters, or the key things that could really slow you down?

Michael Doss

I mentioned in my prepared comments that we've seen a bit of a slowdown in terms of drilling and completion. We think it's just a transitional phase, but I think that's allowed the industry to catch up a little bit on some of the logistics. It's still a jam in some areas. And in some locations up in the Northeast, in particular, are pretty good to -- and if you're doing work on one of those locations, you can experience delays with water or delays with stand deliveries. But in terms of the strain, I would say the strain that the system faced in the second half of last year is stronger than what we're experiencing today.

Michael LaMotte

Okay, great. Thanks.

Operator

Thank you. Our next question comes from the line of Scott Gruber with Citigroup. Please proceed.

Scott Gruber

Yes, good morning and I reiterate good performance in facing number of first quarter challenges here.

Michael Doss

Good morning. Thanks.

Scott Gruber

I wanted to touch on one industry practice, which is greatly frustrated investors through the cycles and that's ordering capacity on a stuck at the basis. You guys knew because you have your own internal manufacturing capabilities. When you set out to expand your fleet like you are with the two additional spreads, how much of an upfront capital commitment is required for components when you're kind of thinking of making out decision to expand the fleet six to nine months ahead of delivery? What level of capital commitment are you required to make for components?

Michael Doss

Well, in our case and as you mentioned, we do it in-house, so that gives us a lot of flexibility in terms of commitment. So, we decided to add a new fleet, say, six to nine months down the road. We will order the engines and transmissions and the chassis. And generally, those will be committed sometimes depending on the delivery schedule we can make adjustments along the way. But those are the main components that we would have to order. And then we just essentially sit in inventory are partially complete until we decide to finish everything else as it relates to the fleet. So, that initial upfront capital is--

Lance Turner

Q4 is a pretty good indicator. We spent $10 million in Q4 related to the two fleets. So, that's two fleets times 25, a total of 50. So, 20% of that was spent in Q4. Probably, about another 20% was spent in Q1. And that's a pretty good indication of the major components.

Scott Gruber

That's good color. I've been asking the other pumpers just to start shifting away from this trend of ordering on a speculative basis really in an effort to de-risk their growth CapEx and from investing standpoint, frankly, make the industry more investible again.

But how do you guys generally think about investing through the cycle given your internal capabilities, does it just afford you somewhat more flexibility that you're going to respond more quickly? How do you think about deploying that CapEx through the cycle for growth purposes?

Michael Doss

Sure. Well, as I think about the cycle overtime, it does give us a tremendous amount of flexibility. So, we can just have things components to sit in inventory. And we can assemble them relatively quickly as we saw during the downturn, which was really historic in its severity. We stacked a lot of our equipment and that led to a need for rebuilds which we've been doing over the last 18 months and so we have flexibility in that regard as well.

And also if you think about the FTSI story, we really have been over levered for a while. And so our main mission is taking advantage of this upturn as to generate cash flow to repay debt.

If we didn't have that debt, we may have added a little bit more capacity coming into the upturn to start it last year. And so I think as we go to the next cycle, I think we'll just be pretty deliberate and measured in terms of the amount of capacity that we add overtime. I'd rather not see big spikes in terms of additions. So, I can just see us having some moderate growth that will serve us pretty well throughout the cycle.

Scott Gruber

There were conditions -- would you look for as you start to think about 2019 capacity and making that initial commitment, it's not large. But what conditions are you looking for to, say, hey; it's the right time to make that commitment? Or it's not the right time to make that commitment for the initial components?

Michael Doss

Well, I would say at the moment, it's not the right time. And so -- yes, I think if we see a strengthening market and -- we always try and get a good sense of what the supply and demand is for the industrially overall. And if we think the market is going to become tighter or become loser overtime is that that has an impact.

As you know that those pieces of data are hard to combine and they change a lot. And so it's hard to make definite information based on where you think supply and demand is going to be in 2019.

We also consider the commodity price outlook. And if we think it's strong in 2019 and 2020, we know that that's going to be a source of potential demand and all of that would go into our decision making.

Scott Gruber

Got it. Appreciate all the color.

Operator

Thank you. Our next question comes from the line of William Thompson with Barclays. Please proceed.

William Thompson

Hey, good morning. You quote your fleet size is about 50,000 horsepower per fleet. Is there an opportunity to reduce the fleet size and improve asset utilization? You -- obviously you're vertically integrated with manufacturing your pumps and consumables and an early adopter of putting sensor monitoring on our equipment. Do you need that much backup redundancy in the fleet or there are opportunities to kind of improve that?

Michael Doss

I think the short answer is yes. The way we categorize having 50,000 per fleet is really mostly for ease of conversation to make the math easy. The truth really is, is when you look at an individual district, we've got multiple customers, multiple locations with different varying amounts of horsepower there.

One of the other ways we think about our business is we have to have a certain number of assets in the bullpen that we can rotate our way through. So, one of our key focus is, is on maximizing or minimizing horsepower on location against long-term wear of that equipment.

William Thompson

Okay. And then maybe a follow-up to that. Can you update on the expected OpEx savings you believe you generate from being vertically integrated? I believe you previously quoted about $85 million of annual savings once the fleet was fully deployed. That's still a good number to think about in terms of structural cost advantage of being vertically integrated?

Lance Turner

Yes. I think that's still a good number. We haven't updated it since earlier this year. But there's nothing in the market. If anything, it grew with the market pricing of horsepower and refurbs been a little bit higher than a year ago. But I think it's still a good number.

William Thompson

Okay. Thank you.

Operator

Thank you. Our next question comes from the line of Jon Hunter with Cowen. Please proceed.

Jon Hunter

Hey guys. So, in the release, you laid out deployment per fleet 29 in the June, July timeframe versus prior expectations for early second quarter. So, I'm interested in kind of what's causing that small delay as it up, the fleet is finding a right customer or getting right components for redeployment kind of what's driving that?

Michael Doss

Sure. It is mostly just finding the right customer. We had a little churn in our customer base. Nothing really unusual, but that also impacted the decision to delay the deployment. We want to have the right customer under dedicated arrangement. We probably could pushed it out into the spot market and I just elected not to do that.

In terms of the equipment, no delays or problems, nothing as it relates to the crewing, it's mostly just finding the right customer. And if the market was super strong and we could have deployed it to another customer under dedicated arrangement with good pricing, we would've done that, but just didn't have that opportunity.

Jon Hunter

Got it. Okay. And then second one for me is, on the 28th fleet that you put to work during the quarter, how does EBITDA per fleet compared to the 4Q average of $21 million or so on that 28th fleet? And then our discussions for the other two deployments you're planning for later in the year are those kind of a similar level?

Lance Turner

I can't say specifically on fleet 28, but all of our fleets are in a pretty narrow band. And we monitor month-to-month pretty closely to ensure that we work with our customers to get them in that narrow band. So, I would expect new fleets as well as 28th fleet to be around that average each quarter.

Jon Hunter

Got it. Okay. And then one last kind of a follow-up from me. You noted weaker spot pricing in the prepared remarks. How much of the -- of that weakness is from kind of larger existing competitors reducing price versus new entrants lowering their price to establish themselves in the market?

Lance Turner

It's really all of it. It's hard to ascribe one set of players, I think, different than the other. We have seen more horsepower come on to the market. And so while we've had this little puzzling delay in drilling or slowdown in drilling at least relative to commodity prices. We have seen quite a bit of horsepower come on and that's just led to more competition in the market and it's really our players that are doing that.

Jon Hunter

Got it. Okay, great. Thank you for taking my questions.

Operator

Thank you. Our next question comes from the line of Teresa Fox with Stone Harbor. Please proceed.

Teresa Fox

Hi. Thank you. You had mentioned your long-term debt reduction of about $185 million. Did you -- is that something you want to do this year? And you kept your CapEx guide flat. I was just wondering what would be the fulcrum to change from debt reduction to CapEx expansion because it looks like you're going to be almost full utilization by the third quarter. Thank you.

Lance Turner

So, on the deleveraging, I think our expectation is to utilize the majority of cash flow from the business towards delevering to get to that $500 million. And so if we can do that this year, we certainly will.

And in terms of CapEx, I think it will depend a lot on what Mike discussed just a couple of minutes ago on kind of capacity growth. We're always going to have first priority to maintenance CapEx to keep our fleet running everything it needs to be optimized. But any growth in capacity would likely be deferred and that would be kind of a larger decision on what the outlook is and what the market is like. We -- I don't expect us to shift to CapEx just because we hit our debt target.

Teresa Fox

Okay. Thank you.

Lance Turner

And just to add a little bit, once we hit that debt target, we'll evaluate what we want to do with that free cash flow. And so either build-up liquidity, continuing paying down debt even further and then returns to shareholders is something that could become a priority for us in the second half.

Teresa Fox

Okay.

Operator

Thank you. [Operator Instructions]

Our next question comes from the line of John Daniel with Simmons & Co. Please proceed.

John Daniel

Hey guys. Thanks for the balance and realist commentary and good quarter too. Mike just wanted to dig into the pricing commentary a bit more. Are you still seeing signs as spot market pricing is moving lower or do you think it's stabilized? And if we're continuing to be being lower, how does that impact your desires to reactivate further capacity?

Michael Doss

Well, John, I think that's a great question. I would say today, this month in recent weeks, it's continuing to erode. And so as I commented before, I think it's a transitional issue. There's ebb and flow in this business. And we're at a very temporary ebb. If we look at the overall environment, we feel very good about it, but we see these ups and downs.

If it were to continue to deteriorate, which we don't anticipate, that would have an impact on our dedicated arrangements, most of them reset quarterly. And we're holding line on pricing in every instance where we can. We're able to get cost inflation push through, but not achieving net pricing gains currently. And so holding on to those is our priority today. But if this were to continue for a quarter or two additional, we'd be under pressure from all of our customers to revisit price.

John Daniel

Got it. And I would assume that would probably lead you -- put some pause on further reactivations?

Michael Doss

It would.

John Daniel

Okay. I know you might not have anything now, but I'm just curious, do you see any strategic [Indiscernible] on the horizon, call it, next six to 12 months, which might make you -- have a -- take a temporary pause on the debt reduction efforts on the new product line?

Michael Doss

Yes, I don't think so. I really like to keep the story clean. We really have those in-house manufacturing benefits that would be deluded if we did an acquisition. And so really just focused on balance sheet repair. If we get that all of that completed and we see a wonderful opportunity, we will certainly consider that.

John Daniel

Okay. I appreciate your time. Thanks guys.

Michael Doss

Thank you.

Operator

Thank you. Our next question comes from the line of James Spicer with Wells Fargo. Please proceed.

James Spicer

Hi, good morning. You guys talked about continuing to repay debt. Just wondering if you'd continue to target your term loan to accomplish that? And then from a longer term perspective, what do you see is the right kind of capital structure for the business, for example, establishing the standard revolving base credit facility versus the second-lien notes?

Lance Turner

Yes. So, as far as which tranche will target, yesterday, we paid off $15 million in the term loan. So in -- currently, it's the easiest to repay, the soonest maturity, and slightly more expensive than the 2022. So, in the near-term, I would say we probably target the term loan.

And then as far as long-term, I think a lot of that will depend on the amount of deleveraging we're able to accomplish this year, what the outlook is. And so we'll constantly look at that.

We've got the revolver in place now, but ultimately, we'll look at kind of mid-year what our Q2 results are, how much we'll convert the cash in Q3, and look at what the best capital structure and what our maturities are looking like at that time.

James Spicer

Okay. Thank you.

Operator

Thank you. I'm showing no further questions at this time. Mr. Doss, I will turn the call back to you for any closing remarks.

Michael Doss

Great. Well, thank you everyone for participating today. We look forward to speaking with you again soon.

Operator

Thank you, ladies and gentlemen. That does conclude the conference call. We thank you for your participation and ask you that you please disconnect your lines.