Good morning and welcome to the Flotek Industries Incorporated Second Quarter 2016 Earnings Conference Call. [Operator Instructions] This conference is being recorded. At this time, I would like to turn the conference over to Mr. Chris Edmonds, Senior Director of Corporate Finance and Strategy for Flotek Industries. Mr. Edmonds, you may begin.

Lizy thank you and good morning. Today’s call is being webcast and a replay will be available on Flotek’s website. Our earnings and operational update press releases as well as our quarterly report with the U.S. Securities and Exchange Commission were filed and distributed last evening and are also available on Flotek’s website. Before we begin our formal remarks, I wish to remind everyone participating in this call listening to the replay or reading a transcript of this call of the following. Some of the comments made during this teleconference may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and other applicable statutes reflecting Flotek’s view about future events and their potential impact on performance. Words such as expects, anticipates, intends, plans, believes, seeks, estimates and similar expressions or variations of such words are intended to identify forward-looking statements, but are not the exclusive means of identifying forward-looking statements on this call. These matters involve risks and uncertainties that could impact operations and the financial results and cause our actual results to differ from such forward-looking statements. These risks are discussed in Flotek’s filings with the U.S. Securities and Exchange Commission. Now, I would like to introduce Mr. John Chisholm, Flotek’s Chairman of the Board, President and Chief Executive Officer. John, good morning.

Chris, thank you. I would also like to welcome each of you to Flotek’s second quarter 2016 conference call. We are glad you are here. I would like to apologize in advance for my voice. I have been traveling extensively and I have caught something but we will get through. With me today are Rob Schmitz, Flotek’s Chief Financial Officer; Steve Reeves, our Executive Vice President of Operations; Josh Snively, President of our Florida Chemical subsidiary, as well as our Executive Vice President of Research and Innovation; and Rich Walton, Flotek’s Chief Financial Officer, Emeritus. Last evening, we filed our quarterly report with the U.S. Securities and Exchange Commission. While we won’t take your valuable time to regurgitate those filings, we will provide a summary of the results, attempt to add some color regarding current operations as well as a sense of our future, and then be happy to answer your questions. However, before doing so, I would like to take a couple of moments to talk about our announcements this morning. First, we announced our intent to acquire International Polymerics, Inc a specialty polymer chemistry company based in Dalton, Georgia with a distribution facility in Monahans, Texas. The company is focused on processing natural polymers such as guar as well as synthetic polymers primarily for the oil and gas and textile industries. The company was founded by Donald Bramlett in 2004. Donald who remain with Flotek is considered by many as one of the leading guar gurus in North America. His focus on continuously improving guar hydration and consistency has made IPI one of the noted high-quality guar providers to the energy industry. The acquisition of IPI will be another key step in Flotek’s focus on developing broad scope for its prescriptive chemistry management program. Flotek’s ability to provide…

Thank you, John. As John mentioned, Flotek filed its Form 10-Q for the period ended June 30, 2016 with the US Securities and Exchange Commission yesterday afternoon. We reported that revenue for the quarter ended June 30 was $72.3 million a decrease of 16.9% compared to the same period of 2015. Revenue increased slightly compared to the first quarter of 2016. We reported a loss from operations of $2.7 million for the quarter ended June 30, 2016 compared to income from operations of $1.8 million for the second quarter of 2015 adjusted for the 2015 impairment. Sequentially, we showed an improvement in loss from operations of $2.9 million compared to the impairment adjusted loss from operations in the first quarter of 2016. This improvement was due to lower SG&A expense resulting from lower incentive compensation expense, cost structure improvements in the drilling segment and lower legal and professional fees. We recorded an income tax benefit of $1.2 million for an effective tax rate of 34.3% for the three months ended June 30, 2016. For the quarter, we recorded a net loss of $2.3 million or a loss of $0.04 per common share fully diluted compared to a net income excluding impairment charges of $1.1 million or $0.02 per common share fully diluted for the quarter ended June 30, 2015. And an impairment adjusted net loss of $4.6 million or a loss of $0.08 per share in the first quarter of 2016. Adjusted earnings before interest, taxes, depreciation and amortization or adjusted EBITDA for the three months ended June 30, 2016 was $0.5 million compared to $6.5 million for the three months ended June 30, 2015 and adjusted EBITDA loss of $1.4 million in the first quarter of 2016. Accounts receivable net of allowance for doubtful accounts at June 30, 2016 was $45.5 million compared to $49.2 million on December 31, 2015. As John mentioned earlier, Flotek entered into a private placement with a credit investor to purchase approximately $30 million in Flotek common equity. After adjusting for cash used in the acquisition of IPI, Flotek should have approximately $36.5 million of availability under its revolving line of credit facility, a significant improvement from the $15.3 million available prior to the placement. Thank you, now I would like to turn the call back over John Chisholm for some closing remarks.

Rob, thank you. Before we take your questions, I would like to add a few concluding thoughts. Earlier this week, we announced a five-year joint technology development agreement with a technology arm of YPF, the Argentinian national oil company. The agreement calls for collaboration with YPF to develop complete fluid systems for Argentina shale play. The second largest shale play in the world. In addition, we will work together on a number of other ventures over the course of the five years. YPF’s commitment to research is not dissimilar from ours. In fact they are opening a spectacular new research center this fall that I was able to visit with their executives just two months ago, that is very similar to Flotek’s efforts. We believe there is a real opportunity to become a meaningful player in this important hydrocarbon region of the world. Not only are agreements like this being signed with large international clients, Flotek is also having success at home. Recently, Flotek signed a similar collaboration agreement with two major independent exploration companies in North America to develop complete fluid systems for their exploration efforts. All of these successes are part of Flotek’s prescriptive chemistry management program where our focus is on providing chemistry into the well that will enable and protect our client’s reservoirs. While the economic impact of this initiative may not be seen immediately the long-term value creation from building the preeminent oilfield chemistry concern should become apparent in the coming quarters. In addition to exciting opportunities in Argentina, our international business continues to grow under the leadership of Nicholas Lopez. We’ve made significant strides in the Middle East and believe there are opportunities in Mexico as well as Central and South America. While developing those opportunities takes time especially in the current market environment,…

Thank you. [Operator Instructions] Our first question is coming from the line of George Venturatos with Johnson Rice. Please proceed with your question.

Hi good morning, guys.

Good morning, George.

Wanted to hit first on the operational side of the business, certainly you mentioned things got better after a tough April. Just wanted to see if you could give us little more detail on the progression and then also what we are seeing potentially early parts of this quarter given the recent upticks in recount activity levels?

Sure, great question. Because of our direct channel now the Flotek store, we’ve got much greater visibility with the end-user. For example, we are completing a well this week in the Permian basin and there are next two wells, wells that on inventory will be completed in November and we’ve never had that level of visibility before. So we’re comfortable that the third quarter will be an increase over the second quarter. I think that everybody understands on this call that pricing lags behind drilling activity always has but even in that context, in that environment, we believe the third quarter will be an increase over the second quarter.

Okay great and then you seemed to touch on it there John but any update in terms of what we are seeing from customer response on the volumetric increase side, I know we had a primary customer that was in testing phase that we discussed last quarter. Any update on what you are hearing in terms of feedback and where that may trend?

Sure, I will be glad to share that we believe from the information because some of it doesn’t all directly go through the Flotek store. I think the average person that uses CnF which I think is what your question is designed around is now the average overall is about 1.2 to 1.3 gallons per thousand. There’s some that are running at 1.5 gallons and there are some that are running at 2 gallons. So that number continues to move up because they see the benefit that they equate the total benefit to the cost associated with it and I think that pretty well lays out what we felt would happen. Does that answer your question for you?

Yes, that’s helpful, John. Wanted obviously touch on the MHA results that were released this morning. Wanted to, one, get your thoughts on kind of what you saw in terms of one, you know, you saw the Permian was supported positively, certainly the Eagle Ford was inconclusive based on the results but we did see the further trend of oil prone areas outperforming. So one, wanted to get your general thoughts on the results that you got from MHA and then two, will this be the last basin set that will receive and then also, you know, how does this help going forward with the SEC inquiry level in terms of providing them this data and hopefully moving beyond that essentially that overhang that’s been sitting on us for the last couple of quarters?

Sure, great series of questions. First, the – regarding MHA and just a little bit of history, so allow me to give kind of an extended answer to your question. I didn’t even know who MHA was when our technical committee that was made up of folks inside Flotek and outside Flotek selected them as a pretty well industry recognized global reached reservoir analytical company. And they’ve done incredibly thorough job in what’s an incredibly difficult challenge when they know their name was going to be put on the reports that were going to have a spotlight on them probably greater than any report they’ve put out. And I still haven’t met anybody with MHA as we wanted to make sure that that was a true independent effort. As nearly everyone knows, the normalization of data and selecting those filters is very subjective by the individual who is doing it. And MHA wanted to look at over a year’s production, which is great. But in Texas, when you get into this allocation effort, they even created additional filters which were involving leases as to whether there was one well or multiple wells, do they have CnF on them or not?. And wells that didn’t. But the Permian analysis is very consistent with under independent analysis, public reports, I don’t know what folks had a chance to see a couple of weeks ago where Halliburton talked about a client, J. Cleo Thompson that uses CnF at a 40% uplift. The most active operator there talks about their wells being 30% greater on EUR than what they had originally expected. So it’s very consistent I think with what other people have seen and certainly consistent with what our clients tell us on a well-by-well basis. And again to make that very independent…

That’s helpful, John. And just to clarify, will this – is this the completion of the third-party study or will there be further basins?

Right, sorry for not remembering that part of your question. This concludes the effort with MHA.

Okay great. I have got a couple of more, but I will jump back in the queue. Thank you.

Okay, we will wait to hear back from you.

Thank you. Our next question is coming from the line of Matt Marietta with Stephens. Please proceed with your question.

Thanks and congrats John and everyone, the Flotek team. You know truly, pretty remarkable accomplishment here in the quarter, the worst quarter of the downturn yet you know to be able to put out a sequential.

Thank you, Matt.

Yes, the top line growth and profitability growth, I don’t cover any other companies I can say that. But I really wanted to touch on or follow on here with MHA study, you know, that chapter looks like it’s being close with respect to kind of the misplaced concerns on the credibility deal with FracMax but you know positive results in the Permian. What I really wanted to focus on however was kind of the complexities within the data set that MHA recognized. Can you elaborate more on the data complexities specifically with the Texas reporting issues that MHA also ran into and if you brought Tim from MHA maybe allow him to explain. But if not, maybe take us back to the issues that FracMax had with the same data complexities and how this report, you know really in essence validates your initial conclusion that there was just simple data errors within the Texas reporting structure?

Well sure. I think, if there has been a positive on this journey of this particular topic, I think it put a bright light on the allocation issues inside Texas. And for those that are still not familiar with that Texas reports production by lease and that could be one well, that could be 10 wells, that could be 100 wells and it becomes very difficult to derive what the individual production is of those wells unless you have the exact metered production from that client. And therein lies the challenge for not only MHA but for the other companies, public companies out there that try to derive individual production. And we’ve always felt that this was a statistical event that you needed to have just a significant amount of data to be able to get to the proper representation of whether it was CnF or any other type of additive or whether it was pounds of propane [ph] or whether you looked at volumes of fluid. Does fluid make a difference in certain areas? You know it wasn’t just limited to CnF but it was the entire completion effort. You needed to look at it holistically on a very wide statistical basis. So as I started out in answering George’s question, the normalization of data in this industry is always a challenge and it’s very subjective by the people who do it, in the factors that they pick to try to determine how well a well is doing, whether it’s the lateral length, whether it’s the amount of sand, whatever it may be. And I think that this chapter should be closed because for whatever reason this particular technology is in my career has been the most scrutinized technology in the industry whether it’s been from MHA whether it’s been from analysts like yourself and others, whether it’s been from our clients whether it’s been from service companies. And at the end of the day, as a rule, you’ll get better production from wells that use Complex nano-Fluid. We’ve never said it works on every well, we’ve never said that it’s going to have an X amount of increase on every well. But what we have said is that you will get an increase in production and it’s up to you to determine is that total benefit worth the cost of the CnF? And is evidenced by our quarter that you talked about to continue the revenue that we have, the people that do the individual well analysis, their clients believe that. That’s the ultimate validation is the revenue, and you know, I have to a bit careful because of the SEC inquiry and other things to talk any more about that. But hopefully, in a broad brush that gives you and other people listening in our view on that. Is that hopefully, okay for you?

Yes, I think that’s very fair. And you know it’s nice to kind of have this in the rear view mirror as it relates to kind of this FracMax overhang. But moving on, I am looking forward. I wanted to talk you know a little about the drilling tools, you updated the language in the press release regarding the strategic alternatives. It looks like there’s been some progress as that has developed over the course of kind of the last couple of quarters when you started to talk about that. But, you know, you included that there is a range of options here for Flotek to execute potentially something there. You know, can you maybe elaborate on this range of options to kind of give us an idea of the opportunities and I understand you can’t get into too much detail. But just so we kind of understand the thought process behind the drilling tool segment as you look to further expand on the chemistry technology offerings?

Sure, we will give you as much as we can talk about. But I think again the people that are familiar with this industry that are on the call are aware that there is certain private equity efforts not only in drilling downhole tools but also other segments in this industry that are looking at rollups, putting different things together as they believe this industry is coming out of its trough and will come up to the next upturn. So that’s one avenue that we’ve looked at. The other avenue is a company already well-established in this segment as to whether some of our strategic technology make sense. And so, you know really what I’m saying is, what folks on this call are probably concluding themselves are kind of the range of opportunities and what we’ve said consistently is that in this market, what’s amazing is that we in the downhole tool segment have continued to gain market share and that is a little credit to the people that fight this fight every day. Many companies, smaller companies than us have quite frankly gone out of business and we’ve kept the platform nationwide and international whether it’s in the Middle East or Argentina for downhole tool intact because we always felt that that platform was one of the key advantages of the Flotek downhole tool segment. But the challenge for a company and you always, you will never want to be in this segment, this position that Flotek is in, where you are almost too big to be small and too small to be big is a difficult one to be in, and although our market penetration has gained in this downturn, it’s still a very difficult market. And so, we’re looking at every option that would make sense for that segment for us. And again, I am sorry just can’t be more specific but you probably wouldn’t expect us to be at this point but it’s clearly focused on what we’re doing.

Understand and thanks looking forward to the update there when that materializes. You know, moving on, I want to focus a little bit on gel fracs and kind of highlight the acquisition. We have actually spent some time with guar suppliers and it’s clear that guar availability use is down as slickwater has taken market share. But you know obviously what this has resulted and it is more demand for fiction reducers that’s the PRF. But you know, I really wanted to give you guys the opportunity to highlight a few things here and specific, how does IPI’s integration into the fold kind of diversify the footprint as gel fracs for a lot of E&Ps used to be best practices, how can Flotek CnF and really the – all of the chemistry technology offerings combined with with IPI’s competency here. And also secondarily, how does the Flotek store and Flotek’s existing footprint help improve ISI’s [ph] profitability from the get-go as you integrate that into the fold?

Okay, thanks for the opportunity to give little more context on the acquisition because we do want to take a little bit of time. And again, we will make sure there is plenty of time for those that are in line for questions to give a more broad answer to that question. There may be some folks that think this acquisition may have been predicated incorrectly that we’re seeing the horizon out there with the sun setting on CnF and that is absolutely not the case. This is an acquisition that broadens our reach to our existing clients, who believe in the chemistry technology of Flotek. And IPI as has got the only polymer facility in the United States that actually creates the polymer powder out of the guar bean in the United States. And we believe technically there is an advantage to that as do some of the clients that IPI currently sells to, and you can assume that our research folks have for the last year or so started to look at is there a way to take what’s been regarded a commodity and guar has been regarded a commodity and make it more specialized. No different than it took us two years to be able to take a commodity like friction reducer with polyacrylamide be able to get two patents on that technology and be able to reduce the amount of chemical and the amount of volume to be able to lessen the damage in the reservoir with the friction reducer. So what we intend to do is have CnF as the hub of this chemistry offering of which you can access PRF or polymer guar when necessary and be able to have a complete holistic prescriptive customized chemistry offering. More and more of our clients are…

Thanks, it does. And it sounds like a pretty exciting foundation to further enhance the growth trajectory. And before I hop back in queue, real quick, can you maybe tell us who IPI’s largest customer is, just so we have an understanding of how that will roll in?

Sure, although they are private in an effort to be transparent to everyone, their largest customer is Halliburton. Halliburton has recognized in certain basins that fast hydrating guar is important for their clients and IPI has got that technology figured out like no one else does.

Thank a lot. I will get back in line.

Sure.

Thank you. Our next question is coming from the line of Sean Milligan with Coker and Palmer. Please proceed with your questions.

Good morning, guys.

Hi there.

Real quick, just on Canadian seasonality. Can you outline for us what your exposure is within energy chemicals to Canada?

Well, certainly our activity is down as everyone else’s is. I don’t think that was very good language there, sorry about that. But there has been a couple of new developments where some of these wells and its not been widespread. I don’t want anyone to jump off and think that re-completions has really gained a foothold in Canada. But what we call Rezstim [ph] which is re-energizing older wells with CnF in the Duvernay formation up there seems to have shown some real benefit. So that has kind of offset the lack of new well completion that we typically experienced. But I think for the remainder of this year, Canada is going to be a very difficult environment and you know I think just to probably give some context a year ago at this time Canada was about 10% of our chemistry revenues. It’s now about 5% but it has been offset as we mentioned with other international uplifts to kind of counterbalance that. Does that help you?

Yes, perfect. Thanks. And then second question, looking through the queue on a customer A and customer B trends, it look like customer A was down a little bit sequentially. And I think customer A’s spudded well count was down about 15%. But I was just, it seem like the revenue impact you outpace that. So I was wondering if could provide some color about customer A, you know their usage of CnF and if there was any push into 3Q with kind of their order flow?

No, great question. Glad you picked up on that. Others maybe thinking the same thing, it’s all directly related to of course you got to start with the rig count but then you got to look at the completion activity. And sometimes customer A gets caught up with their activity and there is like a two week wall and you know depending on when that wall falls that can affect how the whole quarter looks. But there is no decrease in that particular customer’s interest level of using CnF and the benefits they derive from it. Kind of a quick footnote for the folks listening, customer B is in probably in the traditional sense a customer but in the way we look at it not only an important customer but a distributor and that customer B distribute CnF to at least 16 different clients on a monthly or quarterly basis. And it’s just the way you know I think that the accounting or finance is not kept up with kind of the new business model that it would be a mistake to say that all of that business ends up with customer B it gets distributed out to multiple clients and multiple areas around the country. Hopefully, that helps.

Yes, it’s helpful. And then one of your major customers has a slide deck out about they are changing completion design and part of that completion design is testing higher fluid per lateral foot in conjunction with frac sand. I thought we would have seen more of that pull through in 2Q? My question would be are you seeing that in the order flow to that customer and if not, do you expect some type of inflection point related to that in the future?

Yes, I think, this has been a gradual increase. It’s not been like a step change and we are seeing it for sure. But I don’t think it’s anything that you knows is dramatic in nature. I think that has to do with the flow of the completions and the rig activity and all that. But certainly when people increase fluid, we’ve not seen any client that says, well I am going to cutback and only run CnF and 80% of my fluid because I have increased it by 20%. So it seems to be more of a gradual thing as opposed to a step change.

Okay, thanks. But you are seeing that they are running as they increase their fluid pump per lateral foot, they are also running CnF at higher rates even if they are maintaining constant concentrations, would that be fair?

That’s fair.

Okay and I know people asked a lot of questions so I am going to keep going too.

Okay.

If you look at – you raised $30 million in equity, you talked about what you are going to put to pay down the credit facility. I guess the last covenant that would matter is the minimum adjusted EBITDA covenant on a trailing six-month basis for September 30. Does that matter? Does it matter if you have an occurrence on the credit facility, you know, could you maybe just address that? It would seem to me that you would need to generate about $2 million in positive EBITDA, pre add back on the G&A line for the stock comp. So if you could just address your outlook for that covenant I appreciate it?

Sure. I will let Rob Schmitz, our CFO answer that for you.

Yes, looking forward into the third quarter, we are comfortable that we will meet at covenant fairly comfortably. So we are not concerned about that covenant right now.

Okay, I will ask it in another way. G&A was down pretty significantly, sequentially in 2Q, will there be additional carry through related to that in 3Q?

You are probably going to see the SG&A step up a little bit from there. We took an adjustment to our incentive comp in the second quarter and that lowered – it was a little bit of an extra benefit in the second quarter. So you are probably going to see between 23, 23.5 to 24 on our SG&A rate going forward.

Okay, perfect. And then on the consumer side, you know, the first half has been very strong from you all from a topline basis. I know you still hold some inventory in the second quarter but just kind of interested in any commentary on what you think the second-half run rate might look like for consumer on a topline basis?

Sure, thanks for calling that out because I am sure other people are interested. We will let Josh Snively answer that for you.

Good morning, Sean. If you look at going forward, if you look at Q1, Q2 average those two numbers together, it’s probably what you are going to see in Q3. Q4 might come off to that just a little bit. We did have a little bit of inventory increase that hit our margin in Q2. We expect that to a one time issue in Q3 and we expect those margins to normalize a little bit more in Q3 and Q4 as well. So we feel very good about our third and fourth quarter opportunities, the demand for our flavor compounds remains very strong. And the availability of citrus oils continues to be limited. Therefore, the trading business activity should remain strong as well. That answer your question?

No, that’s perfect, thank you. And then just real quick on the MHA study. It’s a little bit confusing in the wording but was that study on horizontal wells on in vertical wells?

Horizontal wells

Okay and then Argentina, you signed the JV. It look like in the first quarter if I go back to the commentary there, you were on a very limited number of wells, you know for YPF in Argentina relative to what they completed in total in the first quarter. Just be interested in how the JV might impact your kind of market penetration with you know YPF’s overall well count in Argentina going forward?

Sure, great question. We will give you little bit of context so folks understand Argentina maybe a little bit better than they do now. YPF has a 100 rigs running in Argentina. They have a joint venture with BT, with that’s called Pan-American, it’s another 30 rigs. The wells there are smaller than what we’re used to in the United States, the average length horizontally is about 4,500 feet. The average fluid is about 3,000,000 gallons versus 10 here. The average amount of sand is about 3,000,000 pounds versus 10 or greater here. One of the gating items there is the lack of readily available sand, so that kind of puts a self-imposed restriction on the size of the completions. But that will hopefully give folks an idea of the size of the wells which are essentially at the end of the day about a third of the size of what people are familiar with say in the Wolfcamp. There is not a calendar date certain of increasing activity with YPF. When they have a commitment and we do to come up with the best fluid that gives their wells the best chance, you know, we can either do it quick or do it right and we will with them do it right. The revenue will come. So you know, I would expect somewhere in the fourth quarter activity should pick up. They want to get to where they are completing 30 wells a month, that’s very dependent on the infrastructure of the two main service companies Halliburton and Schlumberger down there. We have no control over that but we would start to look at things in the fourth quarter to pick up when the middle of our second validation in a different area there right now. And we’ll will keep folks more tuned in as year progresses for sure.

Alright, perfect. Thanks guys and that’s all the questions I had. So appreciate it.

No, thanks for the questions, appreciate it.

Thank you. Our last question is coming from the line of Mark Brown with Seaport Global Securities. Please proceed with your question.

Hi guys, I know this call is getting long, so I will just be quick. On ECT, it’s, curious what your non-CnF portion of the revenues in the quarter and what what kind of growth rate you saw and if there is any comments you could make about how we should think about that going forward?

That segment of ECT will continue to grow as PRF gets adopted, as the polymer portion becomes more visible inside Flotek. That will continue to grow. So there will be – you know, we are blessed that we haven’t had any type of price deterioration through this old downturn. But you know quite frankly some of these chemicals carry less margin than you know the crown jewel CnF. But certainly the ability to create meaningfully more revenue as this momentum goes with a slightly less margin we think is the best return as it spreads out the offering for Flotek for our shareholders. So expect that to continue to grow.

Good, good. And I guess just finally, you guys every quarter seem to outperform the rig count and people’s expectations in the chemistry side. And this one you certainly did the same with sort of a 13% decline in CnF volumes relative to rig count decline of much more than that. I was curious, how should we think about Q3 and Q4, commentary in the press release very optimistic. Look like there is some deferred completion opportunities that were moved from Q2 to Q3. From a modeling perspective, how should we think about the next couple of quarters from your energy chemistry side?

Well I think as everyone is familiar who follows Flotek, we are very conservative on the guidance we give. As I started out, I think the first call was George. We anticipate the third quarter to be up in that as a relationship when Schlumberger gave their earnings call for North America, they expected the third-quarter to be flat. And the reason we expect it to be up is several of our clients that may not reach category A or B are increasing their rig count and increasing their activity and we’ve got visibility with them like I said greater than we did 15 months ago. So we feel positive about the third quarter, is it going to be wildly up? No. But is it going to be up? Yes we believe that and we anticipate the same thing in the fourth quarter.

Thank you, thank you, very helpful. I will turn it back.

Thanks.

Thank you. Mr. Chisholm, I will now turn the call back to you. Please continue with your closing remarks.

Again, thank you for your support of Flotek. We know it was bit of a long call, but obviously there’s a lot of things happening in the last bit of time. And we certainly appreciate your interest and are pleased, you took the time to join us today. Have a great Wednesday.

Ladies and gentlemen, that does conclude the conference for today. We thank you for your participation and ask that you please disconnect your lines. Have a great day.