Good afternoon, everyone and thank you for participating in today's conference call to discuss Profire Energy's Third Quarter 2019 ended September 30, 2019. Joining us today is the CFO of Profire Energy, Ryan Oviatt; and Chief Business Development Officer, Cameron Tidball.

Before we begin today's call, I would like to take a moment to read the company's safe harbor statement. Cautionary note regarding forward-looking statements. Statements made during this call that are not historical are forward-looking statements.

This call contains forward-looking statements, including, but not limited to statements regarding the company's expected growth, increase in operating expenses, expansion in international markets, the planned launch of new products, the availability of company resources to make beneficial investments in 2019 and beyond, the company's exploration of M&A opportunities, the successful integration of acquired assets, the potential of international markets and the company's future financial performance.

All such forward-looking statements are subject to uncertainty and changes in circumstances.

Forward-looking statements are not guarantees of future results or performance and involve risks, assumptions and uncertainties that could cause actual events or results to differ materially from the events or results described in or anticipated by the forward-looking statements.

Factors that could materially affect such forward-looking statements include certain economic, business, public market and regulatory risk factors identified in the company's periodic reports filed with the Securities and Exchange Commission.

All forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

All forward-looking statements are made only as of the date of this release and the company assumes no obligation to update forward-looking statements to reflect subsequent events or circumstances, except as required by law. Readers should not place undue reliance on these forward-looking statements.

I would like to remind everyone that this call is being recorded and will be available for replay through November 21, 2019, starting later this evening. It will be accessible via the link provided in yesterday's press release as well as the company's website at www.profireenergy.com. Following the remarks by Mr. Oviatt, and Mr.

Tidball, we will open the call to your questions. As part of the question-and-answer session, Messrs. Oviatt and Tidball will be joined by Profire Energy's Vice President of Operations, Jay Fugal; and Vice President of Product Development, Patrick Fisher. Now I would like to turn the call over to the Chief Financial Officer of Profire Energy, Mr.

Ryan Oviatt. Please go ahead..

Thank you, and welcome, everyone, to our third quarter earnings call. Normally, our CEO, Brenton Hatch, would be hosting this call with us; however, we are deeply saddened to report that Brent's wife passed away late last week. As you would expect, Brent is with his family, and they are in our thoughts and prayers during this time.

In Brent's absent, Cameron Tidball, our Chief Business Development Officer is joining the call today. The ongoing volatility of the oil and gas market continues to present some challenges for Profire. Producers continue to focus on cost management strategies, including debt reduction, share buybacks and other practices to improve their balance sheet.

Rig counts have decreased significantly, while completions remained flat year-over-year. Despite these conditions, we were able to generate positive net income; positive cash flows remained debt-free and retain a significant cash reserve. Cash and liquid investments were just over $20 million at the end of the quarter.

For the quarter, we achieved total revenue of $9.9 million and net income of approximately $922,000. These numbers were down from the same quarter last year in large part due to the 15% drop in the average oil price during the same period.

I'd like to turn the time over to Cam to provide an update on our business development and operational activities in the quarter.

Cam?.

Thank you, Ryan. As Ryan mentioned last quarter, we announced the successful acquisition of two companies. The asset purchase of Millstream Energy Products based in Alberta, Canada, and the equity purchase of Midflow Services LLC located in Ohio.

These bolt-on acquisitions are in line with our strategic priorities and have strengthened our product offering while increasing our footprint within the upstream and midstream space. The additional products obtained through these two transactions have further established Profire as a one-stop shop for combustion-related solutions.

With these acquisitions, we have increased our ability to capture increased revenue related to the sale of our existing burner management solution. In most cases, our existing customer contacts who specify our burner management solutions also spec the additional products that are now available for us to offer.

In the quarter, revenues relating to both acquisitions totaled over $1 million, which is on track with projections previously provided. As we've discussed previously, total cash spend for both acquisitions was just under US$5 million. In the quarter, we sold just over $300,000 worth of Millstream product.

In the two months of the quarter following the Midflow acquisition, Midflow generated just over $400,000 in revenue. We are encouraged to achieve these operational results and revenue performance even in a down market, where rig counts have continued to decrease year-over-year.

We believe these acquisitions will continue to provide greater value as the market improves. We expect annual revenue related to both of these acquisitions to equal $3.5 million to $5.5 million in the coming years.

Additionally, through these acquisitions, we have been able to add new customers, build new relationships with end users and OEM resellers, enabling us to capture revenue not previously available to us. In the quarter, we realized $400,000 worth of revenues on Profire products from these new relationships.

Strategically, we continue to focus on making it easier for our customers to do business with Profire as a one-stop shop. Offering expertise, value and complete and easy-to-use solutions helps our customers to achieve and meet their goals of safety, efficiency and return on investment.

We will continue to develop new products focused on providing a more customer-friendly and intuitive experience. During the quarter, we continue to train our internal sales and service personnel on the PF2200 product, its capabilities and value proposition.

The technology available in the initial launch of the PF PF2200 will provide customers with an enhanced customer experience, including easy installation and operation with value-driven data analytics that our customers have requested. In the coming year, we plan to launch additional models, including dual burner and force draft.

We believe that force draft model will be a strong selling point in the downstream and international markets. We are currently meeting with customers to provide product demonstrations in efforts to have the PF2200 be part of their burner management specification for purchases in Q4 and beyond.

We have received positive customer feedback on PF2200 field trials in both the Canadian and U.S. markets. The certification process is nearing completion as final tests on the product are performed. We expect to be able to sell this product later this year.

As part of our strategic investments, we have increased our efforts internationally and thus far, have realized nearly $200,000 of direct international sales in Asia and South America.

The vast majority of these sales have come through new distributors, which have been established in 2019 through our concerted effort to expand into international markets. We plan to keep investing internationally and are in contact with additional potential distributors in many of the largest oil and gas markets globally.

We do not expect international sales to increase drastically on a quarter-over-quarter basis but rather, we expect to see significant impacts in the three – next three to five years. The price per barrel of oil continues to fluctuate between the low to mid-50s and $60 a barrel.

Given these market conditions, we have not made investments to the level that was anticipated at the beginning of 2019. Given the current market conditions in North America, we believe there is an opportunity to expand globally; however, we remain active in providing innovative and reliable solutions to our customers domestically.

Many customers in the quarter have focused on cost reductions, including layoffs of middle management, consolidation, early retirement, M&A activity and much more. These actions create both opportunities and challenges for Profire.

With fewer employees, our customers are relying on third-party support to service their equipment and increase efficiency. Our strategy of providing a one-stop shop for combustion-related solutions eases the burden of designing, sourcing and procuring product.

We have a team of experienced, knowledgeable and skilled sales and service technicians to support our customers in this environment. We have realized increased success with our preventative maintenance programs, which improves production and uptime and extends the life of production and process equipment.

Moving forward, we plan to continue to search for complementary acquisitions, invest in international markets and provide innovative new products and upgrades to our existing product lines. This strategy has positioned us well to meet market demands and remain the industry leader.

With that, I will now turn the time back over to Ryan to discuss the financial results for the third quarter of 2019.

Ryan?.

Thanks, Cam. Yesterday after the market closed, we filed our 10-Q with the SEC and discussed the quarter's highlights in a press release. As always, both of those documents are available on the Investors section of our website. The transcript of this call will be posted in the coming days.

In the quarter, we recognized $9.9 million in revenue, which is down 14% from the same period a year ago. The average oil price in Q3, 2019 was down almost 15% compared to the average of Q3 2018.

E&P companies have continued to focus more on capital discipline, like debt reduction, dividends and share buybacks than they have on exploration and CapEx expansion. In Q3 2019, the weekly average rig count, North America, was 1,024 compared to 1,239 in the same period of last year.

As a result of these macro trends, we believe many E&Ps have pulled back on CapEx budgets and will continue to restrict CapEx spending throughout the remainder of 2019 and into 2020. Gross profit decreased to $5.2 million or 52.2% of total revenues as compared to $6.1 million or 53% of total revenues in the year ago quarter.

The fluctuation of gross profit margin was within our typical expected range and was driven by changes in product mix, direct labor costs and inventory and warranty reserves. Total expenses were approximately $4 million or a 9% increase from the same quarter last year.

This increase is primarily due to an increase in wages, professional fees, related to acquisition activity and certifications and development of the PF2200 product. This was an expected increase as we continue to execute strategic investments as part of our growth plan.

As mentioned in the beginning of 2019, we expected total operating expenses for the full year of 2019 to increase when compared to 2018, and that this would outpace revenue growth in the short-term due to the ongoing industry challenges.

We remain below our expected 20% increase in operating expenses, but we plan to continue some of our investments throughout the remainder of 2019. Operating expenses for G&A increased 2.4%, R&D increased 70% and depreciation decreased 9.2% as compared to the same quarter a year ago.

The increase in G&A expenses is primarily due to increased hiring and additional professional fees related to acquisition activities. The increase in R&D is largely related to labor and certification costs. We intend to keep investing in product development throughout 2019 and 2020.

Total other income during the period was roughly $71.000, the majority of which was attributable to interest on investments and the sale of fixed assets. Our net income was $922,000 or $0.02 per diluted share compared to net income of $1.7 million or $0.03 per diluted share in the same quarter last year.

Net income is down 44% over the same quarter a year ago due to lower revenues and increased operating expenses. Now let's look at the balance sheet. Cash and liquid investments totaled just over $20 million as compared to $22.6 million at the end of 2018.

Thus far, in 2019, we have spent $3.5 million on a new building in Canada $2.3 million pursuant to our share repurchase program and nearly $5 million in M&A. All of these activities were largely funded through cash flows from operations.

Despite all this activity, we've been able to maintain a significant cash reserve, which allows us flexibility in responding to market conditions. During the third quarter, prevailing market conditions offered us an opportunity to repurchase an additional $916,000 worth of Profire stock.

As anticipated, the oil and gas industry, as a whole, continues to face financial challenges and has responded with balance sheet discipline and tightened capital spending. We expect to see these relatively flat capital expenditure programs throughout the end of 2019.

We are working through our 2020 budget process now and expect to see more industry insight into 2020 CapEx program during Q4 as our customers go through similar processes. Our focus remains on providing a valuable product to our customers that increases safety and efficiency.

We will continue our planned investment strategy in 2019 to take advantage of opportunities that we believe will increase Profire's market footprint.

We plan to continue to invest in additional sales and operational resources to further our entrants into the downstream market, and to support new product development and enhancements to our existing product lines. This includes support of the products that have recently been acquired through MidFlow and Millstream.

With the launch of these product advancements, we are increasing our capabilities of eventually providing detailed data analytics and using cloud technologies to improve the customer experience. The PF2200 and PF3100 product will continue our expansion into the downstream and international markets.

While we expect the remainder of 2019 to be challenging, we believe our investments in product development, M&A and international markets provide a catalyst for growth and opportunity. And we will continue to invest in areas that we believe will drive long-term growth and provide strategic advantages as the market improved. Thank you.

And we will now open the call to questions. Operator, would you please provide the appropriate instructions so we can get the Q&A started..

Thank you. [Operator Instructions] Our first question comes from the line of Rob Brown with Lake Street Capital Markets. Please proceed with your question..

Hello everyone. I just wanted – you did a good job of going over the Midflow and the midstream acquisitions.

Maybe just – could you give just a little more color on how the – how you see those kind of helping both the Profire sales and the Profire helping that revenue grow in those businesses? And have you seen that started to happening in terms of Profire helping those businesses grow?.

Thanks, Rob. We're very pleased with the progress that we've seen so far on both of those acquisitions, and even the revenue that we've been able to generate from them. I'll maybe ask Cam to expand on answering your questions in a little bit more detail.

Cam?.

You bet. Hi, Rob. So the Millstream acquisition brought with it product specifically, flame arrestor housings and burners, not to get too technical on that. But basically, products that Profire did not have OEM or manufacturing on.

So it gives us those products at a better price point for us to build and create, and to add to the mix instead of reselling older technology that we historically been reselling, that's been around for many, many years. So the traction on that so far, we've definitely seen that customers have an interest in it.

We see that we're an alternative solution to what was out there. And we have a great opportunity to expand that whole product offering that we're – that we want to offer basically from one point of burner management solution to the other point. So the A to Z is pretty much complete now with Profire of what we can sell to our legacy markets.

On the Midflow side, it came with some product packaging, some product and some people and talent. And so we have brought in the Midflow organization into Profire as Profire people, so we're not operating Midflow as a business. However, we believe it expands our service footprint, which we are looking to strengthen in the Northeast.

And it also give us some talent and some ability to focus on product development, again, in the upstream and midstream space.

There's a lot of talent that came with that acquisition as well as it helps us bring in some new packaging offerings that we didn't have before that we're going to be able to – hopefully, we believe dovetail move into other areas of the country where we haven't been doing those types of packaged offerings..

Okay, great. Thanks. Thanks for that overview. Maybe, Cam, this is another one for you, that the 3100 product ramp was, sort of, expected to get going here later this year and into 2020.

How is that going? What's the customer attraction been? And how do you see that playing out at this point?.

We've been very happy. Like, obviously, we'd love to see the revenue higher. But as drilling has gone down, it still – even though the 3100 can be used in applications that are not so dependent on completions, oil prices, et cetera.

There's still an impact as we are very much still working on midstream-type applications and some upstream applications with the Profire 3100. We had a great project quarter.

We did, I think one of our highest amounts of projects in that month or in that quarter, however, the dollar per project wasn't as high as we have enjoyed in some previous quarters. Looking forward, we're already scheduling out into Q1 and even a little bit beyond for some projects for some commissioning, and so it's looking good.

We hope that 2020, and we plan for 2020 to be more of the opportunity to see our products get into the downstream market. So we should see some differences there..

Okay, good. And then just in terms of the business kind of trend at this point we see with the market as it is. How do you, sort of, see the Q4 developing relative to Q3? And then, I guess, looking into next year, the visibility is a little tougher, of course.

But what's, sort of, your thinking into next year?.

So I'll provide my thoughts. And then, Cam, I'll let you share a couple as well. But as we communicated a little bit earlier on the call. Unfortunately, we expect that Q4 is going to continue to be another challenging quarter for us. How challenging? We still don't know. To be determined still.

But ultimately, I wouldn't be looking at Q4 as a growth quarter on top line revenue; it's flat or even likely down. A lot of what we're seeing is just the continuation of cash impact on our customers and that capital discipline really coming into play.

Also a lot of pressure from the investor and investment community on these companies to provide better returns and not really a focus on expansion much at all. Unfortunately, there's probably a high likelihood that, that will continue into 2020 at this point.

However, as we also mentioned, we are anticipating that all of our customers are going through a Q4 budgeting process right now preparing for 2020. And typically, they share the results of that process during Q4. We did even see some last year late revisions into Q1 – early part of Q1.

So we'll see how those come and when they come, but we will be watching those very closely to help determine that.

Cam, do you want to add a little there?.

Rob, if you have a follow up to it, I could answer. But I think for the most part, again, North American shale is the swing producer, but we are seeing how OPEC is considering not even doing cuts because they believe that the U.S. will somewhat self-regulate themselves now and not just add a lot of supply if they cut.

So with that being said, though, as we've mentioned, there's challenges by these decisions, the investor community. There's challenges but there's also opportunities. Profire's – with the metrics we follow is, well, how many customers have bought from us in the last trailing 12 this quarter. We're still seeing that increase.

How many new customers are we bringing on? That's increasing. So we're still winning business or winning market share. We just need a little bit of help from stabilized oil prices. And as we continue to add acquisitions such as Millstream, Midflow and beyond, we should be able to add to that revenue spend that we get from customers.

So not all doom and gloom, for sure, but it's going to be a trying time. And we just don't – we don't quite know what 2020 will hold, except for we can expect that some budget-conscious customers..

Okay. Thank you. I’ll turn over..

Our next question comes from the line of John White with Roth Capital. Please proceed with your question..

Hey, John..

Hi. Thanks for taking my question.

So I think I may have missed something, but the PF2200 that's not being sold right now but still awaiting certifications?.

Cam, do you want to go into where we're at with that and the progress that we've made?.

You bet. So we are along the lines of completing our certification, which is just a wonderful and glorious and exciting task that our team is going through. It follows suit to other product certification processes we have gone through and our competitors et cetera, it just takes time. So we are very close to getting certification.

We have got field trials that have been out in the field in Canada and the United States that are doing very well. We are still planning to be able to offer this product to our customers in 2020. So we believe that certification will be coming very shortly..

Is that early 2020? First quarter 2020?.

Sorry, sorry 2019. Yes. My mistake. We plan on selling the product in 2019. Yes..

Okay. And Ryan, your revenues were right in line with what I had modeled. But your cost of sales came in quite a bit lower than I had.

Was there something special or extraordinary going on the operating cost side?.

No. Nothing significant on the operating cost side. Again, our gross margin varies a little bit quarter-to-quarter, but it's always within that range between 50% and 55%. We were down a little bit from the quarter a year ago, but we were up a little bit from last quarter. So no significant changes in any of those issues.

Our operating costs were up a little bit as expected, and a lot of that was the product development and R&D costs. The impact of hiring people throughout the year and new hires that were brought on in Q3 as well. But overall, there were no significant swings or changes.

Some of – again, on the operating cost side, some of that is the timing of these certification costs and consultants and the work that we have to do on that PF2200 and other products. So that's not consistent every quarter. With lower revenues, we also have lower commissions in there. So a few things here and there, but overall, nothing significant..

All right. And one last one. The – when you opened talking about the acquisitions, the recent acquisition. You mentioned a target of $3.5 million of revenues.

Is that – that's incremental from the date you bought the companies?.

Correct. That would be incremental above our historical business, again, driven by the MEP product, the new customer relationships the customers of Midflow and Millstream. So it's kind of the collective combination thereof incremental revenue that we would expect. And obviously, that will be impacted by the macro environment as well.

So if things continue to be depressed for a while, then it might be on the lower end of that range. But we think that there's also significant upside to that.

So as customers continue to purchase even specifically with the Millstream product, there's, on average, another 20% to 30% of total sale that we can capture by selling that additional product above and beyond what we had available to us before..

Yes. So that's the way I was thinking. The numbers that you disclosed in the press release, if you do a quarter – a quarterly – take those quarterly numbers and apply a run rate to it, you get $2.8 million, that's obviously going on right now.

So I think, yes, you might be a little conservative on the $3.5 million, but its good number to hear you attached to those new businesses. I know you don't give guidance, but you're kind of pointing us in the right direction here..

We are, and it's always a challenge on the guidance side. And we know that it creates challenges for you guys as our analysts as well. But predicting the future in energy and specifically, oil and gas and the oil field services and tech is extremely difficult at the moment..

Okay. Well, thank you and tell Brent, I missed him on the call. And I'm very sorry about his loss..

I will certainly share that with him, and he's very grateful for all those who've reached out and expressed support and love for him and his family at this time. It's a difficult thing, but he is moving forward..

[indiscernible].

Yes, thanks John..

[Operator Instructions] Our next question comes from the line of Jim McIlree from Chardan Capital. Please proceed with your question..

Thanks and hey guys. Can we focus a little bit on the acquisitions from – excuse me, the revenue from the acquisition? I'm not sure if you said it Cam or you did, Ryan. But you kind of implied that the revenue that you generated from those two, you might have generated anyway. But it would've been through a different source.

Instead of selling your own product, you would have resold somebody else's.

So is that $700,000 or so really incremental? Or is that a little bit incremental and a little bit just a substitution of what you would have sold anyway?.

Good question. And I'll comment. But again, I'll let Cam comment as well. I think if that's the impression that we gave then we did ourselves a little bit of a disservice because we really don't think that it was just replacement of other revenue that we would've gotten, especially on the Millstream product.

That is new product that we did sell on some occasions, but very limited because we couldn't get the price for our customers any lower than what they could get just going direct. So that was really all additional. And then on the MidFlow side, they were a distributor of ours, previously.

So there was a portion that was being captured, but this incremental that we're referring to is the additional gross margin on top of what we were getting before and the other portions of the revenue that they were generating.

So it's around 45% to 50% of the revenue they were getting previously was related to Profire or resell of Profire product, but then the other 50% to 55% of that was from other products, other things that they were selling and generating.

Cam, do you want to add any detail on that?.

I think you got it pretty detailed there. For sure, on the Millstream Product, we would've got almost zero of it so that one is all incremental. A small portion of – well, as Ryan mentioned, the $400,000 from MidFlow, that's accurate. But the extra that we set in there, it have been a very small portion of it.

A lot of it is resell product that we just wouldn't have got because we didn't have the customer relationship. So with that acquisition, we were able to achieve those sales that we wouldn't have got..

Thank you. That’s a great clarification. Ryan, in response to an earlier question, you were talking about Q4. And I think your language was something like, it won't be a growth quarter, maybe flat to down instead.

The comparison you were making when you said that was Q3 or it was Q4 of last year?.

When I said that, I was thinking of Q3 in the comparison. And I believe that would also be true with the Q4 comparison as well..

All right. Great, thank you. Inventory still seems a little bit high.

Is that old stuff and it's just moving slower than expected? Or are you ramping up towards the 2200 product introduction? A little of both, maybe?.

Yes, a little of both for sure. As part of these acquisitions, we did acquire just over US$1 million worth of inventory for Millstream, just a little bit of product at MidFlow, so that also was part of the increase there. We've been working on our relationships with the vendors in China for that product as well.

And with some of the lead times that we're experiencing there, there is some portion of that. There is a little bit of inventory where – as you said, in preparation for the PF2200, full commercial launch and quantities – larger quantities are being able to sell that product. We are paying for some of that now and building that inventory as well.

So I think that's where the bulk of the increase has come every quarter. We do a pretty thorough review of inventory and check for old items or things that need to be reserved for and taken care of. And there were no significant changes in that review this quarter, very little that fall into those categories, but it is part of our process.

And really, the build is, I guess, a little bit of a factor of that sales were down, that contributed a little bit to holding some of the inventory, but then it's from the acquisitions and the preparation on the PF2200..

Okay. Great. And final question. G&A was down relative to Q2, it was down about almost 10%.

Was there anything special in there? Was there any anything unusual that made it so low compared to Q2?.

No. Nothing unusual. I think there were a bunch of different factors that contributed in small ways. Again, some of it is the timing of the certifications and consulting costs related to product development. Some of those were a little bit higher in Q2 than what we've seen in Q3.

Our sales commissions do get recorded in G&A, which – with lower revenues, that would also drop down the G&A cost a little bit. There we had a little bit of staff turnover experienced in Q3 that would be a temporary decline in some of the labor expenses there. But as we've rehired those later in the quarter, that's being replaced.

So again, several things contributing there, small movements here and there but nothing concerning alarming to us for sure..

All right. Great, thanks a lot. Appreciate it..

Thanks, Jim..

Our next question comes from the line of James Jang with Ages Capital. Please proceed with your question..

Hi, good afternoon, guys..

Hi, James..

So just have one quick question here.

So it seems like there's going to be – can you hear me?.

I can hear you, James..

Okay.

So if LNG exports start increasing exponentially next year and prices kind of stabilize, what kind of opportunity does that present for you guys?.

I think that sounds like a great question for our Chief Business Development Officer, Cam..

Sure. So LNG exports, obviously, we know that in Corpus Christi, they're adding, I think, there's two trains they're adding there. The – it helps Profire, for sure. There's still going to be – you obviously you got to feed those trains. The capacity in the Permian that's going to need to go to feed those trains, the pipeline.

I don't know, I'm hearing rumblings, it's going to happen, and they're going to have that taken care of early next year, I'm hearing maybe not even until late next year. So a lot's going to depend on it, but they are going to have to feed those trains. So there's a lot of investment in that.

We know that, for example, with that Chevron and Exxon are the only two claiming that the Permian will be that they're going to increase growth in the Permian next year and beyond. So that tells me that there's still lots of supply to feed that.

However, it should be a positive for Profire, but I don't think it's going to be like a – remains to be seen whether that will be a huge uptick or not. I think we're already supplying a lot of what they're doing there already, but hopefully, I'm wrong. But it definitely won't hurt us, James, it won't hurt us..

So nothing, I guess, what I wanted to ask is, so you haven't had any additional inquiries from the nat gas guys?.

Not. No, not really. No, and those trains, we don't really have a place there yet. We're not saying we will. We don't have a control system for that either..

But you guys have – you guys do work with gas producers.

So would you say that their time lines are quicker than the wet guys?.

Well, the gas producers? So depending where you are. If you're in the Northeast, the gas producers, very traditional. We know what we get there. The gas producers in the in West Texas and other areas, they're dealing with liquids and gas, right? And then they move it all to the, sort of, midstream aggregator, whatever it might be.

So no, nothing's coming up really on that. But we're as strong in gas as we are in liquids. We respect them equally because a lot of the times, they're the same player..

Okay.

And can you just – on the cycling to the upstream guys, what they're looking at in terms of budgeting and how confident that their – that the oil price will be, kind of, stuck in this middling, $55, $60 band for next year?.

So we are in process right now of gathering a lot of that Intel. We have our way of going through and getting what all the top 50 to 60 E&Ps think they're going to do, then we add our additional customer base to that. We kind of get an idea of what that looks like. Yes.

A lot of them, I think, believe that we're – I don't know if they believe we're at the bottom, but I think a lot of them believe we're close to the bottom of oil price. But again, that changes with the wind.

And so in terms of next year's spend, we'll probably be learning that a lot over the coming, I would say, throughout November, December and early January. We do already have a lot of customers' data on what they plan on drilling for next year but still not enough to complete our forecast and outlook..

Got you. Yes, that’s all I have. Thanks again guys..

All right, thanks James..

There are no further questions in the queue. I'd like to hand the call back to management for closing remarks..

Thanks everyone for joining us on our call today to discuss the results of the third quarter of 2019, we would like to thank all of you for your continued support. As always, we are available to discuss any questions you may have. Thank you, and have a great day..

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may disconnect your lines at this time, and have a wonderful day..