Blake Holcomb - Frank's International NV Michael C. Kearney - Frank's International NV Kyle F. McClure - Frank's International NV Scott A. McCurdy - Blackhawk Specialty Tools LLC.

Harry Pollans - Wolfe Research LLC James Wicklund - Credit Suisse Securities (USA) LLC Kurt Hallead - RBC Capital Markets LLC.

Welcome to the Fourth Quarter 2017 Frank's International NV Earnings Conference Call. My name is Jason, and I will be your operator. At this time, all participants will be in a listen-only mode. Later, we will conduct a question-and-answer session. Also please note this conference is being recorded. I will now turn the call over to Blake Holcomb. Mr.

Holcomb, you may begin..

Thanks, Jason. Good morning, everyone. Welcome to the Frank's International conference call to discuss the fourth quarter and full year 2017 earnings. I am Blake Holcomb, Director of Investor Relations and Communications.

Joining me today on the call are Mike Kearney, Chairman and President and Chief Executive Officer; and Kyle McClure, Senior Vice President and Chief Financial Officer. We also have BJ Latiolais, Executive Vice President of Global of Operations; and Scott McCurdy, President of Blackhawk Specialty Tools to join in the Q&A portion of today's call.

A presentation has been posted on our website that we will refer to throughout this call. If you'd like to view this presentation, please go to the Investors section of our website at franksinternational.com. Before we begin commenting on our 2017 results, there are a few legal items that we would like to cover beginning on slide 3.

First, remarks and answers to questions by company representatives on today's call may refer to or contain forward-looking statements. Such remarks or answers are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements.

Such statements speak only as of today's date, or if different, as of the date specified. The company assumes no responsibility to update any forward-looking statements as of any future date.

The company has included in its SEC filings cautionary language identifying important factors that could cause actual results to be materially different from those set forth in any forward-looking statements.

A more complete discussion of these risks is included in the company's SEC filings, which may be accessed on the SEC's website or on our website at franksinternational.com. There you may also access both the fourth quarter and full year 2017 earnings press release, and a replay of this call.

Frank's International uses its website as a channel for distribution of material company information. Such information is routinely posted and accessible in the Investor Relations section.

Please note that any non-GAAP financial measures discussed during this call are defined and reconciled to the most directly comparable GAAP financial measure in the fourth quarter and full year 2017 earnings release which was issued by the company earlier today. I will now turn the call over to Mike for his comments..

Thanks, Blake. And good morning to everyone on the call. In 2018 we will celebrate our 80th year as a company and our fifth year as a public company. This is a great American success story coming from a one crew team operating out of a garage in Louisiana to 3,000 employees in 50 countries and six continents.

We've gained a reputation as a respected brand around the world. Everyone in the upstream world knows of Frank's. Our customers acknowledge Frank's as a leader in safe reliable service. We provide value added technology that improves the cost efficiency and integrity of our customers' wells.

Our employees have dedicated themselves to our customers' success and they take great pride in their accomplishments. Because everyone knows the markets we serve have been very weak for the last three years. As we look forward, it's clear we will have to continue to work hard to build on our history of success.

Our markets have bottomed for the most part with some looking more optimistic than others in terms of a recovery. Last quarter I laid out the high level themes on which we will build the future of Frank's International.

We will enable our employees, put the right people in the right positions with the right training to be successful and to win in the marketplace. We will be an organization with a high level of accountability and operational best practices that support a path to long-term profitability.

We will high grade our portfolio that means we will make sure that the customers, the geographies and the products and services all make sense from a profitability standpoint. In my first 100 days on the job, I led a process to develop a strategic plan with the goal of maximizing our revenue and profitability.

First we took steps internally to better align our business lines under clear and accountable leadership. Most companies talk accountability. I can assure you at Frank's we will live it. Our business unit leaders will have responsibility, authority to act and the result in accountability.

Each leader is accountable for controlling their costs and delivering the top line growth of their product and service lines across our customer base. Many business support functions and resources previously managed at the corporate level or in the process of being deployed under these businesses.

This will allow business leadership to determine which resources are essential to running a profitable business and which might be redundant. Second, we evaluated our entire product and service portfolio across all segments and geographies.

This assessment allowed us to determine which offerings are ready for rapid expansion and which markets we should target to accelerate profitable growth. This is all about deploying resources to the higher growth areas and ensuring the slower growth areas are managed as efficiently as possible.

We cannot afford to be all things to all customers in all geographies. We are looking to optimize our operational footprint across all segments. Let me give you an example. We have said one of our missions is to penetrate some international markets with the Blackhawk lines, that makes imminent sense to leverage a single physical location where we can.

Take a moderate sized international location, do we have adequate yard and building footprint staffing, crane capacity and rolling stock to name a few, to support Blackhawk and TRS, what about drilling tools and Tubulars? You see my point, we also have to be able to improve the forecasting of our business by customer, by location and have the right balance of resources.

Third, we prioritize the top new technologies ready for commercialization that are expected to generate profitable revenue in 2018 and beyond. These technologies span the offshore and onshore markets in Tubular running services, drilling tools and Blackhawk's well construction and well intervention portfolio.

We have also redirected our engineering resources to our highest potential step change innovations. We will realize the revenue and profitability from these innovations over time, some sooner some over a longer horizon. Next let me briefly address a topic that's very important to me, the cost side of the business.

Based on upgraded internal management reporting, we now know exactly which cost support which businesses, meaning our costs will be charged to the accountable business unit managers. This provides us the necessary line of sight and direction to becoming more efficient as an organization.

As a result, we are targeting a G&A reduction of 10% from 2017 levels over the course of the year, and a gross margin improvement of 300 basis points annualized, of our existing cost base on a run rate exiting 2018. Kyle will provide more detail on our cost reduction targets.

As the company that now thinks strategically, we continually evaluate our longer term strategy. For some companies strategic planning is a discrete process with a beginning and an end. Sometimes these plans are put on a shelf and never executed. At Frank's, we have a plan to capture value in the current environment and beyond.

Recall the company made the decision last quarter to suspend the dividend. This is always a tough decision, however our board and management believe it's better to take the long view and deploy our capital in growing the business both organically and inorganically.

The management team is laser focused on profitable growth and making investments in the business that will stimulate incremental revenue and profitability. With that let me move on to some of the key highlights from the fourth quarter and full year 2017.

On slide 5, the first bullet point says we finished 2017 with our best safety performance in the company's history. We lowered our recordable incident rate by over 30% year-over-year. In 2017, we had fewer lost time incidents as well.

Management's first priority is our employees' well-being and there's no better way to demonstrate this than to continually emphasize workplace safety. Our employees did a fantastic job of being aware of unsafe conditions and making written observations of risk before they turned into an incident. We often work in hazardous conditions.

And I want to thank all of our employees for their dedication and the progress we've made toward our target of zero incidents. As you may know, our customers demand excellence in safety. With a poor safety record, it will keep you off the bid list. Next the U.S. onshore TRS business took a big step forward in 2017.

We capitalized on increased domestic land activity which led to a revenue increase of almost 50%. More importantly, we improved our profitability through our lower cost structure, improved pricing and being more selective in our customer mix. We're focusing on those customers that value our safety, technology, and reliability.

Blackhawk also saw meaningful improvement in 2017 from our Q4 2016 acquisition date. Much of this growth can be attributed to land products and services nearly doubling from 2016 levels and with improved margins.

In the second half of the year, we also began to see some offshore product and service activity pick up, particularly international tendering activity that we expect to build on further in 2018. Another success to highlight is our year-over-year operating cash flow improvement.

In 2017, we made it a priority to focus on generating free cash flow to maintain our strong balance sheet and what we anticipated would be a challenging year. Through working capital management, disciplined capital spending, and the sales of non-essential assets, we finished the year with roughly $17 million in free cash flow.

At year-end, we had approximately $300 million in cash and short-term investments, which gives us the flexibility to execute on our strategic growth plans. To wrap up, I'll briefly touch on the fourth quarter and overall market conditions. As expected in Q4, we saw some Tubular Sales orders come through as well as Blackhawk revenue growth.

This produced a sequential revenue increase of 10%. We continue to believe the worst is behind us in terms of the market. We are seeing more tenders and are winning new profitable work. Oil prices seem to be finding a new range and higher levels, and signs point to average 2018 oil prices being higher than 2017.

If oil prices stay in the current range or higher, we believe our overall pricing should continue to stabilize. Remember we're a global company with a portfolio of products and services, so while generalizations are difficult to make, overall we are positive on the business.

I do need to point out that we continue to see challenges in Q1 2018 in terms of our revenue mix, a few higher margin offshore TRS rigs are rolling off contract, however, we have some very nice offshore rig wins that will start up for us later in the year.

Even though, we may have contracts, the timing of our work is on the operators' schedule not ours. So providing guidance is a slippery slope that we wish to stay off of. Having said that, Kyle will offer a little additional color on Q1 in his comments.

I will now turn the call over to Kyle to give some more detail on the fourth quarter and full year financial results.

Kyle?.

Thanks Mike. Turning to slide 7, I will discuss what we experienced during the fourth quarter in the offshore market. Please note any market share or financial comparisons in my commentary will be on a sequential basis. Overall market share in the total offshore rig count held steady during the fourth quarter. In the U.S.

Gulf of Mexico market, activity was mostly flat after steady decline in the past eight quarters. While rig count remains almost 70% below June 2014 levels, this market is showing increased signs of stability. In the Middle East, we saw revenues again pick up as the shift in mix to more offshore shelf work continued.

Revenues and share in Africa fell double digits as some rigs rolled off and work was completed ahead of schedule. Revenues in Europe fell 15% due to lower pricing and a discontinued drilling campaign. Asia Pacific and Latin America saw share increases as we ramped up work on new rigs that outpaced the broader market gains.

And breaking down our segments, we will first look at International Services on slide 8. International Services revenue for the fourth quarter was down slightly to around $53 million. The results were primarily driven by the completion of work in Europe and Africa.

These declines were partially offset by increases of more than 20% in the Middle East and Canada. The international market continues to be a mixed bag in different regions due to changing work mix and timing of projects.

We're seeing indications of improvement heading into 2018, but expect to see volatility of activity and continue pricing headwind throughout the year. Adjusted EBITDA for the International Services in the fourth quarter was $5 million or 10% of revenue.

The lower margins can be attributed to an above the line benefit of around $3 million in Latin America in the third quarter related to payroll taxes that did not repeat in Q4 as well as the mix of business toward lower margin regions like the Middle East and away from higher margin regions like Africa and Europe drove the decline. Moving to U.S.

Services on slide 9. Fourth quarter revenue was mostly flat at $29 million. Revenue growth slowed in the U.S. land business as rig activity decreased and offshore revenue was lower due to new work coming online slower than expected. Adjusted EBITDA for the U.S. Services in the fourth quarter was around $300,000 lower than the third quarter.

The decline in adjusted EBITDA was related to lower tax revenue with lower revenue contribution from offshore work in the Gulf of Mexico and higher mobilization costs related to work beginning in the first quarter of 2018. As you know, we house our domestic G&A in this segment which for Q4 was around $23 million.

Slide 10 shows our Tubular Sales segment performance. Revenue in the fourth quarter was roughly $17 million, up $10 million Q-on-Q. Customer delivery delays in the third quarter were realized in Q4 and some additional International sales drove revenues higher.

Adjusted EBITDA for this segment was just over $1 million, up almost $3 million from the third quarter on higher volumes. Partially offset by an increase in manufacturing costs that reside in this segment. Closing out the segments with Blackhawk on slide 11.

Total revenue for Blackhawk rose 9% to $19 million, representing this segment's best quarter since the acquisition. The higher revenues were largely a result of increased Gulf of Mexico product deliveries and a $1 million increase in the U.S. onshore product sales.

Adjusted EBITDA was down roughly $40,000 in the quarter to $3.4 million or 18% of revenue. The decrease was attributed to lower well intervention services related to the end of storm season in the Gulf of Mexico and some increased integration costs. Turning to slide 12, which summarizes the quarterly financial results.

Revenues for Q4 were higher as Tubular Sales orders pushed from the third quarter came through. Globally our core TRS business was down around 1% primarily driven by declines internationally, namely in Europe and Africa. Blackhawk revenue increased on improved offshore services and product sales that were pushed into Q4 from Q3. And the U.S.

Services segment revenue was mostly flat as onshore revenues grew slightly despite lower rig activity. Total company adjusted EBITDA fell to a loss of $1.4 million driven by contribution mix from lower margin Tubular Sales and declines in the International segment.

As previously mentioned in above the line payroll tax benefit in Latin America of around $3 million did not reoccur. Adjusting for that, our total company's sequential EBITDA would have essentially been flat. Continuing on to cash flow, the company was free cash flow breakeven driven by lower CapEx and some asset divestitures.

CapEx for the fourth quarter was around $3 million and $22 million for the full year 2017. CapEx for the year was lower than we had forecasted due to some deferrals based upon work schedules.

As Mike mentioned in his comments, we are investing in the long-term growth of the business and expect CapEx to rise to the $40 million to $50 million range in 2018, related to the expansion of Blackhawk and other initiatives.

Some of our organic investments in the business relate to both geographic and product expansion of Blackhawk, some new onshore and offshore TRS tools as well as additional drilling tools.

Also of note in the quarter, we recorded in the severance and other charges line item pre-tax expense of $71 million relating to a write-down of pipe connector inventory, accounts receivable and equipment. Let me break out the three components of the write-down.

First the pipe connector write-down was roughly $52 million as these connectors were purchased prior to the downturn in anticipation of continued strong growth in the U.S. Gulf of Mexico. These connectors are not considered less valuable based upon customer preferences and technology changes since they were purchased.

Second the pre-tax charge of roughly $15 million for accounts receivable in Venezuela, Nigeria and Angola due to extensive payment delays. We also made the decision to reduce but maintain a footprint in these countries which is why that charge shows up in restructuring.

Lastly there is roughly a $6 million pre-tax charge for equipment that was not fit for purpose or to damage to repair. Before turning the call back over to Mike for closing comments, I'd like to touch on the impacts of the recent U.S. tax reform and offer some comments on our outlook for the first quarter 2018. Regarding our 2017 financials the U.S.

tax reform bill had no material impacts. Our deferred tax asset balance is lower due to the reduced federal income tax rate, but the valuation allowance we established in the third quarter, negated any impact to our financials in the current quarter.

And looking at Q1 2018, we anticipate we will be working on all six of the offshore rigs in the Gulf of Mexico that we announced in August of last year, which will help the U.S. Services segment see some sequential growth.

International offshore TRS is just experiencing some Q1 slowdowns and challenges in the North Sea, which is likely to weigh on this segments revenues and margins. The North Sea specifically, the Norwegian sector is being disproportionately hit hard by competitive pricing leading to market share losses to a local competitor.

Blackhawk is trending flat slightly down due to some seasonality in the well intervention business. Tubular Sales are also expected to be flat or slightly down from the fourth quarter of 2017. In terms of margins, we believe we will see improvement driven by business mix in the U.S. offshore market and lower cost.

We do expect to see some cash burn in the quarter as we ramp up CapEx spending and consume working capital. Overall, we expect to see revenues to be flat or slightly lower with margins to improve. To close, I will give a bit more color on the cost reduction efforts, Mike mentioned earlier.

By the end of the second quarter, we are targeting a G&A reduction of 10% from 2017 exit run rate. This puts the dollar amount in the $14 million to $15 million range on an annualized basis. The 300 basis point improvement in gross margins will involve actions we are in the process of taking.

These improvements equate to another $15 million annualized and are primarily related to our geographic footprint and other operational efficiency gains. Combined, we would love to see the full impact of these efficiency measures to be approximately $30 million run rate improvement as we exit 2018.

I will now turn the call back over to Mike for some final comments..

Thanks, Kyle. Looking at slide 13, let me close our prepared comments with a summary of our initiatives and expectations for 2018. First, we will commercialize market-ready technology across our business segments and make investments in technology that will extend our time on the rig.

We are well equipped with our strong balance sheet to invest in research and development. Next, we will continue the global expansion of Blackhawk. The rationale for the Blackhawk acquisition is playing out with a successful 2017 and we are now looking to meet our next target in 2018 of growing revenue 20% year-over-year.

Third, we will continue to evaluate all of our product and service lines to determine if they meet our financial objectives and if not how we can modify them through ramped up cross-selling initiatives, cost containment, a strategic alliance or divestiture. We have the balance sheet to pursue acquisitions that fit our portfolio.

We have the willingness and liquidity to grow inorganically if the right opportunity is available. Finally, we're charging our leaders to be accountable and hit their profit targets by growing the top and bottom lines of their businesses. Each business must be projected to operate at a full cycle return threshold that achieves our profit target.

Our G&A and cost of revenue reductions will be important drivers of our 2018 success. The way we manage the business is quite simple. Value our most important asset our employees, listen to our customers and help them accomplish their objectives. Be cost conscious and efficient to increase our profitability.

And as a result increase our shareholder value. We exist to grow shareholder value and we will relentlessly pursue this objective. Operator, we'll now open up the call for questions..

Thank you. Our first question comes from Harry Pollans from Wolfe Research..

Hey, guys.

On the 4Q International Services' margins, was there any negative impact as far as extra costs would be abandoning – the abandonment of operations in Venezuela? Just looking at quarter-over-quarter and I know you said the non-recurrence of that tax benefit impacted it, but was there any other costs involved, any frictional costs there?.

No. That would show up in the adjusted EBITDA margins that you're probably looking at here. There might have been some small restructuring costs that fell into the restructuring line as you go around..

So would that be – would 4Q be a good starting point as we look at modeling 1Q 2018?.

Yeah. As you jump off from the Q4 International margins, I think that's effectively where we are running out right now based upon the current mix of business and then obviously that'll change as we go throughout 2018.

But the current mix where it is with Africa and Europe being down the quarter and the Middle East, where it's at, that's the current run rate..

Got you. And then for the U.S.

Services, you're starting up on the six rigs in the Gulf of Mexico in 1Q, are there going to be any extra start-up costs there at those rigs that we should anticipate?.

No I think all the mobilization costs that there might be some minor repair and maintenance cost at this point. I think most of the equipment is ready to go and ready to be deployed. And I think we called out some of the mobilization costs in the segment in Q4 as we're getting the equipment ready to go..

Okay. Got it. Thanks guys..

Thank you. And next we have James Wicklund from Credit Suisse..

Good morning, guys..

Good morning, James..

Michael you talk about growing Blackhawk and clearly, the justification, the reason for buying Blackhawk has been confirmed and it's doing better than most. You're going to grow it by 20% year-over-year which is ambitious and I notice that you're put in growth CapEx in it.

And the global expansion, where do you take Blackhawk first or where are the places that it isn't today that it will be by the end of the year?.

Okay. I'll let Scott who is our Blackhawk expert to take that. We have had several – before I'll turn it over to Scott – several situations where the cross-selling opportunities are starting to bear fruit where TRS customers are interested and starting to use Blackhawk.

And there's actually been some cross-pollination in the other way where some of the Blackhawk customers have decided to use us for some TRS services. It's fairly small the cross-selling at this point in time, but that's the big opportunity. So I'll let Scott take it from here..

Okay. Thanks, Mike..

Yeah. Thanks, Scott..

Sure. The – so I think there's opportunities everywhere. I mean we literally are bidding opportunities in every major region of the world.

I would say places that we aren't today, but expect that we would be I think we'll have a broader presence in the Mediterranean, the offshore Canada market, the Far East and also the Middle East and that would be kind of on top of what we're currently doing which is heavily focused on the kind of Northern, Latin America, Caribbean region as well as some of West Africa and some Canada, but more onshore focus Canada work that we're doing today..

Does Blackhawk do any work with on jackups, is it just deepwater? I know you've got onshore.

Can you talk about Blackhawk and the jack-up market or the shallower water market and where you are in that?.

We do work on all types of rigs. We have a pretty broad suite of products. Our cement head, which is the largest product, the value proposition is highest on the floaters and the deepwater rigs. We do do some work on more of the shelf type rigs, but it is mostly focused on the floaters offshore.

And then we do have a land-focused cement head which is a smaller footprint that has a pretty good presence in the U.S. land market and a lot of potential for some of the land markets around the world as well as some of the shallow water markets that those tools can be used in the shallow water markets..

Okay.

And Mike how much of your CapEx is going to go to Blackhawk this year, I mean out of the total for the year?.

About – this is Kyle. It's about 25% this year of that - (28:17).

...of the range (28:18) towards Blackhawk..

Okay. Last question, if I can sneak one in, Mike, I was down with some Louisiana boat people a couple of weeks ago and they're laying off people for the first time in 75 years. You guys are getting ready to celebrate your 80th birthday, laying off people at Frank's has always been difficult and it didn't happen until a couple of years ago.

Where are you in reducing the head count? Are you where you need to be? Are the improvements from here going to be more structural or do we have more head count reductions ahead?.

Well, that's a good question. I'll tell you a little anecdote. There's some folklore that Frank's has never had a head count reductions until this downturn. When I started up, I went through some of the old employee magazines and in the 1980s, there actually were some pretty big layoffs at Frank's.

So Frank's has not been immune to head count reductions. Let me start with this. Our global attrition rate is 15%. The last thing I want to do is lay people off. What we have to do is right-size the organization. My goal is to try to grow fast enough to where we can minimize any employee dislocation. I mean that's the goal.

But to hit these G&A – SG&A reductions and other things, I can't say that there won't be some attrition other than involuntary, but we're certainly going to try to capitalize on the fact that all businesses go through attrition and try to retain our employees to the extent possible..

Okay, perfect. Mike, Scott, thanks guys, appreciate it..

Sure..

Sure..

Thank you. Our next question comes from Kurt Hallead from RBC Capital Markets..

Hey, good morning..

Good morning Kurt..

Good morning, Kurt..

And thanks for that update on the strategy and direction, and everything else, makes it – puts everything in a good perspective I think into the next year. I wanted to just get a general sense here as outlined give us with a couple of teasers on like revenue growth specifically for Blackhawk, being north of 20% in 2018.

So you know if you were to kind of rank order revenue growth for your segments with Blackhawk at the top, how would it cascade down from there?.

Yeah. So this is Kyle. So I think Blackhawk would obviously be the primary driver of sort of the top tiers, we talked about the 20% number. U.S. Services is probably and I'll go and (31:01) put Tubular in context where we have some stretched goals for the Tubular business here.

This year, they are outside sort of entering some International markets they haven't been to in a while and they've got some leads on some interesting business out there in the marketplace, so that would be sort of the number two segment out there, pretty close to where Blackhawk was lining up at. Then you'd have the U.S.

Services, I think we anticipate continued strong growth in U.S. land. I know BJ and the teams are out there and doing some price adjustments to various basins where we think we can pick it up at and we see some additional growth coming up there.

And then, I think last would be International – I think International is the most challenging market we have right now.

We talked about Europe and Africa kind of going Q3 to Q4, I think those challenges are manifesting themselves out as we look across the year right now, very competitive markets in the North Sea and then, Africa is what I'd just kind of call one-in one-out and there's no real general direction back up in that particular market.

So Blackhawk, Tubular kind of at the top of the list followed by sort of the U.S. Services with both Gulf of Mexico and the onshore business seeing some decent growth and then, sort of the laggard of the group coming in with the International segment..

Got it. And it's a great color, really appreciate that. And maybe kind of dovetail on that, a number of different companies that have reported prior to you have kind of given some of their views on what they think they can achieve from incremental EBITDA or incremental operating margins on a year-on-year basis.

So with that said, I wonder if you can give us your views on what you think your incremental EBITDA generation could be on your revenue growth in 2018..

Yeah. It's depending on the mix, right. The Blackhawk is going to have a little bit lower incremental margin profile than say, a Gulf of Mexico. Gulf of Mexico is going to have an incremental margin profile of – and this is at the variable line, if you will.

I won't take into account kind of fixed cost basis, but on the gross margin level, deepwater work is going to have incremental margins in the 50% to 70% range. The Blackhawk business itself is going to have incrementals in, call it the 15% to 20% range. It just depends on the general profile of what's growing and what's not growing.

So, as we talk about the mix, this has been on a number of calls now, the mix of the business continues to kind of deepwater pricing pressures, activities, sort of flattening out here, that mix is obviously making the margin profile challenged.

As we think about the cost reductions that we've announced today, I think we would say, hey, look incremental is going forward, if we can execute these are going to be in the 50% range for the overall organization. But mix is important as we move about the year, not all markets are the same. So....

Okay, great. I'll keep at two. Thanks..

Yeah..

Thank you. And we have no further questions in the queue. I will now turn the call back to Mike Kearney for closing comments..

Okay. Well, thanks everybody for listening on the call here, participating. Looking at slide 13, we're going to commercialize our market-ready technology across our business segments, make investments in technology that will extend our time on the rig. We're well-equipped with our strong balance sheet to invest in research and development.

Next, we'll continue to, the global expansion of Blackhawk. The rationale for the Blackhawk acquisition is playing out. Third, we'll continue to evaluate all of our product and service lines to determine if they meet our financial objectives – and not how we can modify them. And we're going to drive accountability and reduce our costs.

So that's it, ladies and gentlemen, we appreciate you listening to the call and look forward to the next quarter. Thank you..

Thank you. Thank you, ladies and gentlemen, this concludes today's conference. Thank you for participating and you may now disconnect..