Greetings, and welcome to Select Energy Services Third Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It's now my pleasure to introduce your host, Chris George, Vice President, Investor Relations and Treasurer. Thank you. Mr. George, you may begin..

Thank you, operator, and good morning, everyone. We appreciate you joining us for the Select Energy Services Conference Call and Webcast to review our 2019 Second Quarter Results.

With me today are John Schmitz, our Executive Chairman; Holli Ladhani, our President and Chief Executive Officer; and Nick Swyka, Senior Vice President and Chief Financial Officer. Before I turn the call over, I have a few housekeeping items to cover.

A replay of today's call will be available by webcast and accessible from our website at selectenergyservices.com. There will also be a recorded telephonic replay available until August 21, 2019. The access information for this replay was also included in yesterday's earnings release.

Please note that the information reported on this call speaks only as of today, November 7, 2019, and therefore, time-sensitive information may no longer be accurate as of the time of the replay or transcript reading.

In addition, the comments made by management during this conference call may contain forward-looking statements within the meaning of the United States federal securities laws. These forward-looking statements reflect the current views of Select's management.

However, various risks, uncertainties and contingencies could cause our actual results, performance or achievements to differ materially from those expressed in the statements made by management.

The listener is encouraged to read our annual report on Form 10-K for the year ended December 31, 2018, our subsequent quarterly reports on Form 10-Q and our current reports on Form 8-K to understand those risks, uncertainties and contingencies.

Also, please refer to our second quarter earnings announcement released yesterday for reconciliations of non-GAAP financial measures. And now, I would like to turn the call over to our President and CEO, Holli Ladhani..

Thanks, Chris. Good morning, everyone, and thank you for joining us today. Overall, we continue to execute on our strategy to strengthen and differentiate our position is the market leader in Integrated Water and Chemical Solutions, while also delivering meaningful free cash flow.

The core tenants of this strategy includes developing attractive organic growth opportunities, investing in technologies that differentiate our services, reduce our costs, and expand our market share potential, and finding strategic both on M&A opportunities that enhance our capabilities, broaden our service offerings, and strengthen our customer relationships.

We plan to achieve this strategy all while fortifying our balance sheet through solid free cash flow generation and returning capital to shareholders when appropriate.

More specifically, during the third quarter, we grew revenues in a challenging market to strong performance on our strategic water infrastructure assets, as well as continued market penetration to our proprietary friction reducer product lines. We delivered $67 million of operating cash flow, which we deployed across several initiatives.

First, we acquired a specialized market leading business that expands our water treatment capabilities with a proven team that further bridges the complementary solutions of our water services and chemicals offering. Next, we continue to invest in automation technology that differentiates our services and reduces our costs.

Third, we continued the development of our strategic Northern Delaware pipeline project, which is progressing on time and on budget. And finally, we executed a modest share repurchase, returning capital to shareholders.

We accomplished all of this, while strengthening our debt free balance sheet, increasing our cash position even after these capital initiatives. While the third quarter wasn't without its macro challenges, operationally Select also performed well relative to the market. Looking at the industry more broadly, U.S.

unconventional activity levels typically remain strong through the third and early fourth quarter. However, as operators refocus on cash flow and capital discipline, we're seeing budget exhaustion occurring or set to occur earlier this year for many of our customers.

And looking at specific activity levels for the third quarter, early indications point to modestly decreasing completions activity relative to Q2 with a fairly steep downward trajectory in September.

Our own internal frac fleet tracking data indicates an 8% reduction in the number of actively during the quarter, alongside of 7% decline in the Baker Hughes horizontal rig count. Given that macro backdrop, I'm very proud of the team's performance in the context of what was otherwise a tough market.

After adjusting for the previously divested well sites services business that contributed guarantee to, we delivered overall sequential revenue growth of 4%, driven by strong performance in our water infrastructure and also chemical segments.

These two segments also delivered increased gross margins and our recent cost improvement efforts mitigated detrimental in our water services segment.

As I mentioned, we also continue to deliver strong free cash flow during the quarter, allowing us to execute on our investment priorities, generate returns to shareholders, and continue building cash on the balance sheet. Having a clean balance sheet positions us to think and act strategically.

As we said in the past, we're always looking at good strategic bolt-on that strengthen our service offerings and prioritize unique technologies.

We believe our recent acquisition of Baker Hughes is well chemical services business or WCS is will refer to it perfectly exemplifies this strategy is it's very complimentary to our existing water treatment capabilities.

This business is an industry leading provider of advanced water treatment chemical solutions, spanning the full water life cycles and serves all major U.S. basin with its largest area of operations being the Permian Basin. We plan to report the financial results of the WCS business.

Within our chemical segment going forward, this business will work closely with the operational leaders of each of our segments to provide comprehensive solutions to our customers.

If the water sourcing supply chain continues to become more complex, and the opportunities for produced water reuse continues to grow the interplay of the relationship between water quality and the chemistry behind the frac fluid system continues to garner increased focus from our customers.

We believe the comprehensive nature of our existing customer relationship, service capabilities and technical expertise to cross those water and chemicals allow us to more effectively grow this business, further differentiating our market leading position and advancing the strategy that began with the Rockwater merger a couple of years ago.

I'd also like to add this acquisition establishes a strong strategic, sourcing and product development relationship with one of the preeminent chemical manufacturers in the entire industry, expanding our overall product offerings to our customers and broadening our supply chain.

While we continue to evaluate further growth opportunities in the M&A market, we value our strong balance sheet and the flexibility it provides and will remain diligent and disciplined with our capital deployment. Looking forward, we anticipate Q4 to be a challenging quarter for the industry.

We're planning for general completions activity to decline 15% to 20% from the third quarter levels, given the typical winter slowdown and early budget exhaustion, with many operators wrapping up their full-year capital programs well ahead of the typical holiday schedule.

In response to the seasonal weakness, we're focused on taking proactive measures to protect our earnings and cash flow generation, requiring a critical focus on our cost structure and capital program.

If market condition has continued to evolve and 2020 budgets remain uncertain, we reevaluated our CapEx needs for the year, leading up to lower our previous 2019 CapEx target of $120 million to $140 million, down to $100 million to $110 million, which includes just under $40 million related to the New Mexico pipeline.

This decision will impact the pace, at which we upgrade or look to grow our water services asset based in light of current rate of return expectations, but doesn't require us to defer maintenance CapEx.

We’re balancing the near-term need to actively manage our cost structure and to make prudent capital investments with being prepared to support our customers as activity picks back up in the first half of 2020. With that, I'll turn it over to Nick to walk to our third quarter financial performance in more detail..

Thank you, Holli, and good morning, everyone. I'm pleased to announce that we reached our full year free cash flow target a quarter early with $42 million of free cash flow in the third quarter, bringing us $65 million year-to-date.

Well, roughly one-third of our operating cash flow came from working capital improvements, two-thirds can be attributed to continued strong operating results.

With this operating cash flow, we funded the WCS acquisition for just over $10 million, returned nearly $12 million to shareholders via buybacks, invested $25 million of net CapEx and still increased our cash-on-hand by $19 million.

I expect that through the remaining months of the year, we will exceed the high-end of our previously targeted 2019 free cash flow range of $65 million to $80 million.

Select generated total revenue at $329 million in the third quarter, an increase the $5 million quarter-over-quarter or $12 million considering the impact of last quarters, divestitures.

Our water infrastructure and oilfield chemical segments demonstrated impressive resilience in growing both revenues and margins during what was a challenging quarter for the industry.

We don't expect to repeat this level of revenue in the fourth quarter, but are encouraged by our customers continued preference for our people, expertise, technology and solutions. Adjusted EBITDA was similarly resilient at $49 million, down $3 million from the second quarter, leading the net income of $7 million.

As a company, we continue to remain laser focused on adjusting costs and real time with activity. And we are executing that effort on all fronts, OpEx, CapEx and SG&A into the fourth quarter.

Diminishing completions activity in September and a full quarter impact of previous pricing pressures lead the water services segments revenues to decline 3% sequentially to $197 million in the third quarter from $202 million in the second.

The segment generated gross profit before depreciation and amortization at $43 million in the third quarter compared to $47 million in the second, reflecting a slight decline in segment gross margins from 23% to 22%.

With further revenue declines in the mid to high-teens on a percentage basis expected in the fourth quarter, due to our customers exercising capital discipline and other seasonal impacts, our operational leadership is taking decisive action that when combined with our improved efficiencies from our investments in technology should keep near term detrimental margins in line with traditional levels prior to activity picking back up in 2020.

The water infrastructure segments significantly increased revenues by 24% from $52 million in the second quarter to $64 million and the third. Gross profit before D&A, increase from $13 million to $17 million quarter-on-quarter as our Bakken infrastructure returned to higher utilization, and our existing New Mexico infrastructure saw record volume.

Gross margin before D&A of 27% for the quarter improved modestly from 26% in the second quarter.

While this segment is not immune to macro volatility, we expect the water infrastructure segment to outperform in the fourth quarter relative to anticipated industry activity levels, with the highest single digit percentage revenue decline on a similar margin.

The oilfield chemical segment continues to improve its profitability with revenues increasing $5 million to $68 million in the third quarter and gross margin before DNA of nearly 16% versus second quarter's 14%.

This combination of higher revenue and margins led to gross profit before DNA of nearly $11 million for the quarter, up from 9$ million in the second quarter.

The continued effectiveness of our proprietary products and favorable logistics with our in-basin manufacturing continue to win new customers and provide higher throughput from our manufacturing facilities.

While seasonal impacts, integration, and relocation costs related to the recent WCS acquisition, will likely pressure margins temporarily back into the low teens for the fourth quarter on a similar revenue base, we expect us to rebound in 2020.

The addition of WCS furthers the integration of our chemicals group into the full water lifecycle value chain and unlock new customer opportunities across the wider range of solutions.

We're very excited Is all the potential for this business and will provide more guidance for the anticipated contribution of this business as we progress further with our 2020 budget process.

Looking at our other corporate costs, higher tax expenses quarter was driven primarily by the accrual methodology we follow, along with state taxes based more on activity, and we expect the full year tax rates finished in the mid-teens.

We don't expect any material change and depreciation in the fourth quarter, while SG&A should decline by a mid-single-digit percentage through our ongoing cost cutting efforts.

We continue to have zero bank debt and enjoy a net cash position of $43 million as of September 30th, with an expectation that will generate substantial additional free cash flow over the fourth quarter.

This four to five balance sheet enables us to compete more effectively in a down market, as well as be prepared to exploit organic investment or targeted acquisition opportunities that may emerge while growing our cash balance and executing on a targeted bolt-on acquisition, our share buybacks during the third quarter brought our total capital returns over the last 12 months to roughly $29 million, all over the same time period eliminating $65 million of debt.

The remarkable cash flow generating potential of our franchise was manifested itself through positive free cash flow every quarter since the rock water merger. And we expect that to continue through a challenging stretch and wealth build services.

While remaining opportunistic and our pursuit of high return investments, we will continue to safeguard the balance sheet and prioritize cash flow and returns on capital above all other financial metrics. With that, I'll hand it back to Holly for some concluding remarks..

Thanks Nick. To quickly wrap-up our leading position in the marketplace and debt-free balance sheet uniquely positioned to manage through the current market environment and take advantage of opportunities in the coming quarters.

Though the market will present challenges outside of our control in the coming months, we continue to focus on the things we can control our costs, our customer service, and our discipline capital allocation.

We remain focused on our strategy of generating returns and free cash flow for our investors and consistently executing for our customers while keeping our employees safe every day. With that, I'll turn it back over to the operator and we'll take your questions.

Operator?.

Hey, Good morning..

Good morning. Sean.\.

So Holli, you know, given the outlook that we have here, heading into 2020. Maybe give us a sense of how you're thinking about this.

The continued effort on the part of E&Ps to focus on capital discipline, how that impacts what you think about water infrastructure investment opportunities? And, you know, both a lot from a sourcing side as well as on the produce side is kind of where you see those opportunities.

And has that shifted in the last few months in terms of the opportunities that you see out there?.

Yeah, I mean, we definitely see operators looking on the post frack side. They've built some fairly meaningful systems over many years and the market valuation of those with some recent deals is pretty robust.

And so I think there are a lot of those guys looking at whether or not you know, there's sort of an arbitrage there between what they the multiple they could sell those businesses for, versus you know, how they're, they're valued.

So I think we'll continue to see least active discussion around larger systems that operators can put together on the Postgres side. I do think from our perspective, we're more focused on a holiday bespoke solutions to an operator's challenge, which means they'll be smaller organic investment opportunities.

Just because I think the valuations and the size and magnitude of some of these large systems is outside of the sweet spot for us, and we're challenged to find opportunities that will generate the kind of returns on the capital that we would need to deploy this don't see it meeting those hurdles but will continue to be really focused on being able to work through what we call singles and doubles.

And when you start to you know, add those up, it can become a nice growth opportunity for us and, you know – is an example.

During the third quarter, we were able to negotiate a small produced water line for a customer in the Permian, where, you know, we spent a few million dollars to connect to their fields to allow them to manage their completion programs and maximize the use of produce water. And we have a contract associated with it, and it has nice return.

And I think the smaller investment sizes and by doing it organically, is going to give us the returns we want. But I think, trying to go attack some of those big systems is not going to be the right fit for us..

Got it. Now, that's very helpful. I appreciate that feedback.

Could you maybe just talk a little bit about the WCS acquisition as well? Maybe, just kind of how we see that impacting the Chemicals business? What was the genesis? Kind of, was it a push or pull type of transaction and just, maybe, I don't think investors necessarily have a good -- a lot of visibility into what that market looks like And so maybe giving us a better sense of how plentiful are the opportunities for bolt on acquisitions in that business and how you see M&A versus organic opportunities in Chem? So a lot of pieces there, but kind of fleshing that out, I think, would be helpful..

Sure. So, I miss -- I think, that they're both organic and bolt-on opportunities in Chemicals. You certainly saw the growth in FR volumes based on a proprietary product line we have and the impact that had on our quarter.

As we see market acceptance there, we're hitting our volumes up, which means that then we get our cost structure in line, we can absorb those additional manufacturing costs. So, organically, things are playing out really well there.

And particularly, with the amount of produce water that's being used in the Permian, the team's been able to develop new products to meet those needs. It's fairly complicated and they've done a good job of being up to the test. And actually our volume -- we were touching capacity -- full capacity in the third quarter across our two plants.

So it was enough that we're actually now looking at expansion opportunities there. Not big dollars, because that's the good news. We can expand under roofline. But add some further volumes into the system, if we see the right demand indication for it.

And then, more specifically on WCS, that was one that we've certainly had an interest in that particular business for, I guess, I'd have go back, say, probably 12, 18 months. And so we stayed around the hoop to understand whether or not that was going to be core.

And as it turned out, Baker Hughes earlier this year, we were able to convince them that maybe we could do more with it than they were and it ended up being a really great solution, because we brought over almost 100 employees that really know the treatment business well.

And I think importantly, with this particular opportunity, is it – we refer to it as helping bridge and connect our services business and our chemical business. But what we mean by that is that historically, the treatment decision and the frac fluid decision have been separated.

And it's really important, and I think there's value that we had, the more you connect those two things, because the water quality going into the blender, really, then is that so important to the frac fluid system that you choose. So now we can attack it, I think, more effectively from both ends and fall for a fairly complicated equation.

But when you take our water services, capabilities, you know, all the logistics, all the management we can do there, you add more robust treatment capability. And then our proprietary friction producers that work in you know, multiple water quality is a pretty powerful thing.

And we do think that the addition of WCS will put us in the more conversations with our customers in that regard. So it's relatively small acquisition, but I think strategically the way it positions us is its pretty important..

Very helpful. Thanks, Holli..

Sure..

Thank you. Our next question comes from the line of Kurt Hallead with RBC Capital. Please proceed with your question..

Hey, good morning..

Good morning, Kurt..

So Holli, I'm just kind of curious is going to look at the water pipeline business and as you get into 2020 -- get the major oil company looking at about 40% of that volume and that pipeline, you extended the pipeline because there's some other customer interest, just wanted to kind of gauge what's the latest dynamics are there and whether the appetite to fill that pipeline is still robust given, you know, some of the dynamics on budgets exhaustion we're seeing this year and the prospects for.

You know, some limited budget growth, you know, into 2020?.

Sure, that's a good question. I'll tell you, we still feel really good about the positioning of that system. When you look at current rig level activities, and you look into 2020, that part of the Northern Delaware is, is still active, and we expect it to be active in to 2020.

So, and one thing I would expand on there is that we saw enough demand in the third quarter that we put in some temporary solutions to connect our high rate sources to be able to fill the gap on some volumes prior to that permanent line, you know, coming on to operations.

And so we were able to leverage the right ways that we had, the high rate sources and essentially bridge to the completion of our construction. And what will happen now is it something - that was part of the benefits to our third quarter. But now as we get the system online, which again, on budget, on schedule, it'll be up and operating this quarter.

And a fair amount of those volumes will transition to that pipeline. And that will then help us, you know, from an operating cost perspective. So, we and these are volumes, largely, they're not associated with the take or pay that we put into play.

So we're finding good opportunities for near-term commercialization of those high rate water sources, and look forward to getting a moving across the permanent system. And we are in conversations with our customers now to really start thinking about the more holistic 2020 solution to their water needs.

But all-in-all feel really good about positioning and our ability to commercialize the pipeline..

Great, appreciate that. Maybe on the follow up on WCS acquisition on an annualized basis.

What kind of revenue contribution are you expecting that to make?.

Yeah, we'll go out a lot more on that as we do our 2020 budget. Kurt, what I would tell you is, it's fair to assume that the margins on that business are going to be fairly similar to the improved Chemicals margins you saw in Q3. And that, you know, we certainly expect it to be an accretive transaction relative to where we trade today..

Okay. Thanks, Holli. Appreciate it..

Sure. Thanks..

Thank you. Our next question comes from line of Tommy Moll with Stephens. Please proceed with your question..

Good morning, and thanks for taking my questions..

Good morning..

I wanted to stick on WCS for a second. I think, I'm hearing you correctly that this ties into your longer term strategy for produced water recycling. So if you could articulate that for us, if I'm correct in that assumption, and then also bring us up to speed on what inning are we in there? It's a theme that's come up a lot.

But my sense is it's still pretty early days. And so it would be helpful to know where we are in that process? Thank you..

Sure. I'm starting with the latter. You know, this is one of those conversations there’s the Permian, and there's every place else. And where we're seeing the big transition is in the Permian, Tommy and you're right. It's still I'll call it relatively early days.

And the challenge there is you have to be producing enough water in the right location to support the next completion program. So for example, the example I gave on the doing a relatively short produce water line to connect to the fields of one of our customers in the Permian.

It was so that they could balance out utilizing that produced water, and that was the most cost effective way to do it was to put some permanent infrastructure in.

And so the major operators in particular, and those with some caught up acreage are, I’d say, moving as quickly as they can to being able to use the produced water, it just it’s making a lot more economic sense. The cost of disposal is in certain areas going to become tight. And so that's an avoided costs by not having to dispose of it.

And because of the advancements in the chemistry, we can design frac fluid systems to work with a very wide range of water. And there's really not any water in the Permian that we can't deal with. And what WCS helps us do is, as I said it, we're just at the table with customers.

I think we'll have more of an opportunity to do that now to have that conversation of, here's a particular produce water that you're dealing with because it changes not only by Midland Basin versus Delaware, but what part of the stack are you dealing with.

What part of the formation? And so what do we need to do to optimize the treatment, and then match it up with the right track chemistry, because you could spend an awful lot on treatment, and then have a fairly low cost frac fluid system or you could limit the amount of treatment, but then you'll need a more robust frac fluid system to really get the best performance of the completion.

And so the fact that we have the knowledge of both sides of that equation, I think it will allow us to create more efficient solutions for our customers..

Thank you, Holli. That's helpful. And shifting gears to capital allocation. Would you be able to give us a peek at a range of what CapEx might be for 2020 and then offer any comments to the extent there's free cash flow leftover as I suspect there will be significant free cash flow to decide how to deploy.

What's the appetite for continued share repurchases? Thanks..

Sure. I’d say, looking at 2020, obviously, we'd have a lot more detail on our next call with our budget. But if you look at our CapEx for this year, where we've said would come in around 100 to 110. Today, if we did not have that New Mexico project, obviously, that would that would reduce that by about 40 million.

And so I think that underlying total there is probably a decent range to start from for 2020 barring additional new infrastructure projects. So you correctly point out that that leads you to a pretty robust cash flow number. Now, when we think about that I think third quarter is a good microcosm of how we approach our cash flow.

So first of all, it's a core tenet of our strategy. And we always want to be generating substantial positive free cash flow. How we allocate it? There'll be a portion that goes to investing in the business, not only maintaining it, but doing those singles and doubles that Holli just talked about.

We would like to continue our practice of returning capital to shareholders, whether that's through a buyback or other means, that's something we'll continue to think about going forward. But currently, it's the buyback.

Then when we find tuck-in acquisitions like WCS, that makes sense and both from a strategic and accretive perspective, then we'll execute on those. So I think putting all that together for 2020 will have more details, but for that's certainly our philosophy and how we operate and think about cash flow today..

And Tommy, the only thing I would add on to that as a general rule of thumb, you know, because free cash flow is so core to our strategy, we built a business model to support that, and we think about maintenance CapEx typically running a third of our EBITDA. So that does leave us meaningful cash flow to put to other uses is isn't it described.

But I do think, one of the things that we're comfortable right now in doing is building up some dry powder. We don't know what the next 12 months -- what sort of opportunities they might hold for us. And so we're not really in a position today to make broad capital allocation commitments.

But I do think in this kind of market, creating optionality is really valuable. And so we're going to be focused on doing that. But step one is generating cash flow. And then step two is to maybe be a little patient and see what opportunities present themselves and then we'll go from there..

Okay. Thank you very much. I'll turn it back..

Thanks..

Thank you. Our next question comes from the line of Thomas Curran with B. Riley FBR. Please proceed with your question..

Good morning. And thanks for the last name correct pronunciation there. Nick, would you please tell us how the balance sheets in 3Q total assets breakdown across the three divisions, and if you don't have that for total assets, perhaps just for non-current assets, the Piney goodwill and intangibles rate of using another assets..

Yeah. Tom we’ll probably follow-up after the call to get a little more detail there. But it relatively translates to the current revenue. You're going to have fixed manufacturing assets and chemicals. In infrastructure, we obviously have built in a fair amount of PPNE and our New Mexico infrastructure project.

It's not currently online but will be shortly. And then of course in water services you have a wide array of equipment there, blowback, transfer, so it's spread out. But we can talk more offline and get into the details of how those categories breakout..

As you would imagine, because of the limited investment on say, the chemical side, even though it has lower margins it can deliver us -- still deliver a nice robust return on asset, for example..

Great. And then Holli returning to those bespoke infrastructure projects that do fall into wheelhouse for organic investment.

How has that opportunity set evolved since the last call, in terms of number and attractiveness, maturation stage of discussions? And at this point, when is the earliest that you'd expect to get one of those across the finish line?.

Yeah, I would say, it's a fairly robust list. We have a team of folks that literally that's their job every day is to be out and creating solutions for our customers. And again, that's where we found -- that we’ll find the most success versus always a hammer looking for the nail.

Let's go find out what their problem is? And then how we might be able to solve for it. And so, I would say it is a -- it's a very robust set of opportunities. But each of them have their problems and take time to obviously get it, get it over the finish line. But as we said, we did one of those in the third quarter.

And we'll keep plugging away at those and interestingly enough about the small opportunity -- we did in the third quarter, it could lead to further opportunities. That's it's a big customer, that's very active. And so once you're in the door that might accelerate future opportunities.

And so, it's really hard to predict Tom and I wish we could give you better clarity and guidance on that.

But we'll keep working hard, but we absolutely continue to believe that organic approach is going to give us the returns that we're looking for and that there are sufficient number of those that will have an opportunity to deliver on those in 2020.

And will obviously be really thoughtful about putting our capital to work and if it's not going to meet the return thresholds then we won't be executing on this project..

Thank you for taking my questions..

Sure..

This concludes the question and answer portion of the call. I would like to turn the floor back over to management for any closing remarks..

Thanks. And again, thanks for taking the time to join us this morning. And as I guess it's become somewhat customary, the only thing I wanted to leave you with is, what are our top three priorities? And we've hit on most of those already this morning. But, we do expect a softer Q4, obviously that will rebound -- at least that's our view in 2020.

But we've got to manage our costs and our capital in the near term. So we're looking at right sizing to match our activity levels. We're going to be laser focused on free cash flow. We're very proud of the seven quarter track record of delivering product positive free cash flow and we're going to maintain that.

And then the way we do that is, just leveraging our folks and our technology and meeting our customer’s needs. So just executing in the field every day is that last priority. So thanks, everybody, and have a great day..

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines and have a wonderful day..