Natural Gas Services Group, Inc. (NGS) Q1 2020 Earnings Report, Transcript and Summary

Good morning, ladies and gentlemen, and welcome to the Natural Gas Services Group First Quarter 2020 Earnings Call. [Operator Instructions]. Your call leaders for today's call are Alicia Dada, IR Coordinator; and Stephen Taylor, Chairman, President and CEO.I would now like to turn the call over to your host, Alicia. You may begin.

Thank you, Ross. And good morning listeners, please allow me a moment to read the following forward-looking statement prior to commencing our earnings call. Except for the historical information contained herein, the statements in this morning's conference call are forward-looking and are made pursuant to the Safe Harbor provisions as outlined in the Private Securities Litigation Reform Act of 1995.Forward-looking statements as you may know involve known and unknown risks and uncertainties which may cause Natural Gas Services Group's actual results in future periods to differ materially from forecasted results. Those risks include, among other things, the loss of market share through competition or otherwise, the introduction of competing technologies by other companies and new governmental safety, health or environmental regulations which could require Natural Gas Services Group to make significant capital expenditures.The forward-looking statements included in this conference call are made as of the date of this call and Natural Gas Services undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances. Important factors that could cause actual results to differ materially from the expectations reflected in the forward-looking statements include but are not limited to factors described in our recent press release and also under the caption Risk Factors in the company's Annual Report on Form 10-K filed with the Securities and Exchange Commission.Having all the stated, I will turn the call over to Stephen Taylor, who is President, Chairman and CEO of Natural Gas Services Group. Stephen?

Thank you Alicia, and Ross. Good morning everyone and welcome to the Natural Gas Services Group's first quarter 2020 Earnings review. Thank you for tuning into our call. The COVID-19 pandemic has had an impact on our industry and business activity, but India continues to provide quality service to our customers and we have seen no material impact on our supply chain or critical vendors.We have adopted remote and staggered work processes in our Midland headquarters and have adapted our field and fabrication work to meet the new realities from the COVID virus. We have implemented guidelines and tended to keep our employees, our customers and suppliers as safe as possible. We have managed to do so without any significant cost to our operation. So, we continue to be vigilant to find ways to remain as efficient as possible in this environment of new operating challenges.The impact of COVID-19 in the resulting all demand destruction continues to cloud, our visibility for short-term business prospects. In April, as expected we experienced more unit returns and shut-in notices from customers and we anticipate in our prepared for additional volatility in our business over the course of the next several months. Nevertheless, like many other oilfield service companies, NGS has the balance sheet to withstand this environment. With $13.1 million in cash on hand, minimal debt was $13 million credit line and an expected $15 million cash tax refund, we have adequate liquidity and well positioned to was intact when a more normal industry and economic environment returns.We anticipate impact to our business going forward from equipment being returned, the associated lower utilization rates and revenue and margin pressure. Our larger horsepower installations are fair and relatively well, but the medium horsepower equipment will be impacted the greatest Interestingly our smaller horsepower units which are generally oriented towards the production of natural gas, now a relatively valuable commodity may get by relatively unscathed. It's not a promise. There are no promises anymore, but we're seeing some isolated instances where that might be the case.We've implemented various cost-cutting measures with respect to operating and capital expenses, including reductions in our headcount from layoffs and attrition, wage freezes, centralization of certain processes for better cost control in a [indiscernible] of our suppliers and our cost cutting efforts. We continue to review additional opportunities to become more efficient including combining and reorganizing fill operations to reduce the number of operating locations.Our rationalization of cost is a multifaceted process that is has started has continuously been implemented and it will not go away for the foreseeable future. I also want to remind everyone of the flexibility and resilience of the NGS business model. Being on the production side of the energy business as opposed to the drilling side, conversion inherited advantage. We are the last vestige of an operator to make money when they start drilling. Wells that need compression never unneed compression and all the wells can be shut in some production has to be maintained keep even a minimal amount of revenue rolling in business units played us from this downturn, absolutely not, but it does give us a preferred position in the oilfield services structure hierarchy.That's our macro advantage. We were also have a number of macroeconomic company's specific advantages. As you know, if you followed in NGS in a short time, our model is the demonstrably different from our competitors. We have operated for years with all kinds of cycles essentially without debt and we [indiscernible] an appreciable amount of cash on the balance sheet. We retain the ability to generate cash For rental business and we have always been one of the first to cut capital expenses to an extremely low level in an accelerated manner.Our playbook is the same this time, but it is being implemented in an even quicker manner, due to the extreme downward slope in the industry. In spite of the pressures on the industry and our business, I feel certain will margin at he preferred position both financially and a superior provider of equipment and services to our customers.So with all that said, I'll discuss the financial results as well as permanent operating and market comments. Given challenges in our industry in the overall economy, we are pleased with our operational performance in the first quarter of 2020. Our rental revenue increased 5% sequentially and 20% when compared to the first quarter 2019. It was driven by increased rentals of our large horsepower units. Our unit and horsepower utilization remained solid and we generated adjusted EBITDA of $5.8 million, an increase of 11% over the fourth quarter of 2019. Our operating cash flow for the quarter was $8.3 million.Looking further at revenues, NGS reported total revenue of $17.9 million for the first quarter of 2020, a $100,000 decrease from the same quarter in 2019. We experienced an increase in rental revenues at 20%, the decrease in both sales and service maintenance revenue streams. Sequentially, total revenue decreased by 9%. More importantly, rental revenues increased 5% sequentially, not unexpectedly sales revenues decreased due to a drop in compressor sales, any capital constrained environment, we would expect sales revenues remain soft in the coming months, as company has significantly reduced capital spending.Total adjusted gross margin for the three months ended March 31, 2020 increased by 3% to $8.1 million from $7.9 million for the same period ended March 31, 2019. Adjusted gross margin, which does not include depreciation as a percentage of revenue for the three months ended March 31 was 45%, an increase from 44% year-over-year.Sequentially, adjusted gross margin for the first quarter of 2020 also increased by 3% to $8.1 million from $7.9 million from quarter. Adjusted gross margin as a percentage of revenue increased to 45% in this quarter compared to 40% in the prior quarter. Selling, general and administrative expenses were $2.2 million, a year-over-year decrease for approximately $330,000 and a decrease of approximately $580,000 sequentially.The main reason for the year-over-year decrease is due to a credit of $350,000 related to the company's reduced deferred compensation liability. Without this, the first quarter 2020 SG&A would have been relatively flat compared to the first quarter 2019. Sequentially, the $580,000 decrease is also related to lower deferred compensation liability, and lower stock compensation expense.Our adjusted SG&A expenses generally run at 13% to 14% of total revenue and continue to do so. Operating income for the first quarter 2020 was a loss of $273,000 compared to a loss of $145,000 in the first quarter 2019. The adjusted operating loss this quarter was due to lower sales, lower rental margins and higher depreciation expenses and lower horsepower equipment.Sequentially, operating income increased $608,000 from adjusted operating loss of $881,000 in the fourth quarter of 2019. This increase was primarily driven by higher rental revenue, lower SG&A and higher rental margins.Our adjusted net loss after-tax for this quarter was $808,000. This compares to a net income of $98,000 in last year's first quarter and a $1.4 million adjusted net loss in the fourth quarter 2019. Quantifying the loss for this quarter, our net loss before tax was $461,000, so almost $350,000 of the bottom line net loss this quarter was attributable to deferred taxes, with another $300,000 related to a loss in our fabrication facilities.As far as reported net income, our net income will be a positive $4.1 million. Fortunately, due to our recent change in tax laws, we're able to claim net operating loss carrybacks and recoup some past cash income taxes. This will result in a total of $15 million in actual cash tax refunds, of which $4.9 million is the income tax benefit recorded this quarter.NGS reported earnings per diluted share of $0.30 for the first quarter. EBITDA is earnings before interest, taxes, depreciation and amortization, and our adjusted EBITDA also excludes any increases in inventory allowance. Adjusted EBITDA for the three months ended March 31, 2019 was $5.8 million, a slight increase from $5.7 million for the same period in 2019 -- actually 2020 was $5.8 million.Adjusted EBITDA increased to approximately $580,000 sequentially from $5.2 million, primarily due to higher rental revenues and lower SG&A. Total sales revenues, which include compressors, flares and product sales decreased 65% or $2.7 million on a year-over-year basis. Sequential sales revenue decreased to $1.5 million from $3.9 million. Approximately 70% to 80% of these declines depending on the quarter were driven by lower compressor sales.First quarter 2020 total sales gross margin was a loss of $289,000. This is the result of unabsorbed cost in our fabrication facilities, primarily due to lower plant throughput and our retention of incremental personnel and compared to positive gross margins of $426,000 in the first quarter 2019 and $358,000 in the fourth quarter of 2019.First quarter 2020 compressor only sales decreased from $2.7 million in the first quarter of 2019 and $3 million in the prior quarter to $852,000 this quarter. Again due to unabsorbed costs, compressor-only sales margin posted a loss of $435,000 for the three months ended March 31, 2020 compared to a loss of $30,000 for the same period a year ago and a profit of $76,000 last quarter.Our sales backlog as of March 31, 2019 was approximately $1.4 million compared to approximately $2.2 million in the fourth quarter of 2019 -- I'm sorry that backlog $1.4 million was this quarter.Our rental revenue continued to grow in the year-over-year sequential quarters. Rental revenue in the first quarter 2020 was $16.1 million compared to $13.4 million in the first quarter of last year and $15.3 million last quarter. This is a rental revenue increase of 20% and 5% respectively. Compared to the fourth quarter 2019, our average rental rates on a per unit basis increased 7% and were up 4% on average per horsepower basis. Rental rates increased by an average of 18% per unit in the year-over-year quarters mainly due to our continued penetration into the larger horsepower market.This is a large per unit rental rate increase over the past year. I am going to brag about it, but remember that almost all of the rental fleet equipment added last year was large horsepower and carries much higher rates per unit in our average unit. Reported rental gross margins this quarter were 51%, an increase from fourth quarter 2019 rental gross margin of 47% decrease from last year's first quarter of 54%.Fourth quarter rental margins were negatively impacted by the previously mentioned $620,000 bad debt charge. Without the bad debt charge, gross margin sequentially, would have been flat at 51%. Fleet size at the end of March 2020 totaled 2,316 compressors or 437,750 horsepower in addition of 12 units or 8100 horsepower during this first quarter. As of March 31, 2020, 37% of our utilized horsepowers classify as large.Over the past 12 months, we've added 86 new fleet units totaling just above 32,000 horsepower with 94% of those units classified as large horsepower category. The 37% of our utilized horsepower being classified as large is important. Large horsepower as compared to small and medium horsepower tends to fare better in a downturn and this is the first time we've had this kind of backstop with entering a period of depressed activity. Our horsepower utilization is 68% and unit based utilization was 60% as of March 31, 2020.Overall, we had 25% more horsepower generating revenue this quarter compared to last year's quarter and had a small 1% decrease sequentially. I noted on a year-end call that we thought our capital expenditures were decreased approximately 75% when compared to 2019 levels, which suggest a CapEx budget of about $17.5 million for this year. We spent about $6.7 million in the first quarter including a $5.8 million on rental equipment. We have approximately $5 million to $7 million of additional capital commitments for the year, which suggest a total 2020 capital expenditure budget of only $12 million to $14 million, appreciably below the capital expenditures we estimate just last quarter.On August 12, 2019, NGS announced that our Board had approved an authorization to invest up to $10 million directly into the company through stock buyback and as of March 31, 2019 the company has repurchased almost 38,000 shares at a cost of almost $490,000. We continue to believe our equity remains more attractive investments available in the current environment. That said, given the current uncertainty in the market and the Board's belief that enhanced liquidity is prudent, we are not likely to be active participants of share repurchases at this time. We will continue to review marketing conditions in our business capital position as we evaluate future opportunities.Moving to the balance sheet, our total bank debt remains minimal at $417,00 as of March 31, 2020. Our cash balance remained strong at $13.1 million. In addition, we have a largely untapped credit line of $30 million available to us, which provides ample liquidity in any consumable scenario. We generated positive net cash flow from operating activities in this quarter of $8.3 million, which represents 46% of our quarterly revenue. Free cash flow was $1.6 million and we anticipate this will increase through the year due to our recurring rental revenue and dramatically lower CapEx budget.In summary, there are not many companies in the OFS space that have a recurring rental revenue stream, essentially no debt on the balance sheet, cash reserves in the bank and continuing ability to generate cash. Finally, I want to comment on the PPP loans we recently received and then paid back. As noted in our earnings press release and our recent 8-K, we applied for and received $4.6 million loan and the Paycheck Protection Program, which we intend to use to help maintain our employee population in a period of unprecedented turmoil in our industry in overall economy. With the assistance of our bank and under the rules at the time, we applied in good faith and received loan.However, less than a week [indiscernible] our loan by the U.S. Small Business Administration, we were informed our bank as well as the media that has a public company and [indiscernible] public company, we were deemed to have applied for and receive funds that may be all of a sudden were meant for us. Essentially, we're expected to define the intent of the SBA as it developed over a couple of weeks. Never remind these specific rules.In effect, public companies in our employees were discriminated against what became a politically driven process. While this is not the form and wish to debate the merits or the politics of the program, our management and our Board believed at the time and continue to believe that NGS was and as a company that should have participated and benefited from the program. However, after carefully considering the potential costs associated with the revised PPP program and guidelines we determined it was on balance the best interest of our collective stakeholders to return loan under the provisions set forth by the SBA after we applied and received the loan. [indiscernible], we were charged interest on the loan for the interim period we had it,Unfortunately, the resolute nature of this government program and the in my view irrational [indiscernible] to political correctness exactly the opposite impact of the program's intent as NGS was forced to reduce our workforce by 20% or roughly 50 of our team members upon the return of the loan.Before we take questions I want to thank the entire NGS team for their dedication efforts during this difficult period. In a very trained environment, our employees have demonstrated the utmost professionalism and responsibility.We have some [Indiscernible] months ahead of us, we will emerge stronger than most. Thanks to our superior financial strength and exceptional people we have. These are challenging times we are company that is found ways to effectively navigate through turbulence and we'll continue to focus on exceptional service and a strong balance sheet.Ross that's the end of my remarks. So,if you would please open the phone lines for questions.

At this time, we will take questions. [Operator Instructions] Our first question comes from Rob Brown from Lake Street Capital. Please go ahead, Rob.

First question is kind of in your tax refund you talked about a $15 million refund. I guess maybe when do you expected and then maybe some clarity on sort of how you get that and in some of the cash flow items in terms of the deferred tax asset in the quarter but maybe some clarity on that tax refund would be great?

We've applied for the refill on the $4.9 million out when we booked this quarter is [Indiscernible] what the net book impact of the $15 million cash refund will be and all of this is going back on some cash taxes. There's been a change in the tax law where we can -- net operating losses can be carried back and get those cash taxes and netted out. So that's going to result in. I don't remember if it is over three to four years that's going result in $50 million in cash going back.As far as timing, it's the government, so we would expect something next quarter or two, but it could be -- it could take throughout the year just depends on what's going on and what the priority is on the stuff, but we'll get it. We're just not. I just can't confidently say exactly when.

Okay. But that's a net number, the $15 million to be a net number that your actual balance sheet. Okay.

Yeah, yeah, we'll get $15 million in cash.

Okay, good. And then kind of utilization rates, you talked about the high horsepower kind of maintaining utilization rates in a downturn, what sort of the dynamic that drives that and how sticky is that high horsepower market?

Well, it -- these are relative questions right, big horsepower relatively small, but the large horsepower and this is one of the reasons we want to move into a couple of years ago it is relatively sticky from the point that is pretty expensive to freight and install. Once you have it there, it's hard to move it or send it back or anything else. And as you know we've got pretty good long-term contracts on this. So, it's going to stay out there. As of [Indiscernible] in an environment like this, there are obviously negotiations going on as far as discounts and things like that, but that equipment is generally staying out.We see some of the 400 and 600 horsepower come back a little, but not much. I think our large horsepower utilization and we classify our large horsepower, 400 horsepower, so it's essentially 400 to 1400 horsepower for us. Utilization has dropped still in the 90s, it has dropped in the low-end or the low 90s from the high 90s [indiscernible] point, so nothing appreciable in that and again that was one it tends us to move into the sign is proven out to be the right move from that standpoint.So, we don't expect hardly the big horsepower to come back. The medium will be the primary impact we see, it has a [indiscernible] small horsepower that may actually held in pretty well too dependent on the gas market and gas price and water based during there, but yeah it's just more expensive to build, install, operate and operators tend not to do anything with large horsepower unless it's a last, last resort.

Okay, good. And then be curious to get your thoughts on the latest sort of environment most recently in the last few weeks. How is the pricing environment. You mentioned some shut-ins and shut-offs, but how is that sort of trending, how are you seeing the near-term utilization in sort of pricing environment at the moment?

Talking about price right now. So, it's, you have to shift to talking about discounts being given plus shut-ins. This downturn is quite different from all the others in that the speed and how fast it's come off and how operators have reacted and of course how we've had direct according to what they're doing. So, it's been a pretty quick downturn and it really has gone from initially discounts given to shut-ins happening and shut-ins are [indiscernible] oil prices being extremely low, where people can make money at it, cash money and storage issues.Now both those I think are starting to alleviate themselves. We've seen some strength in crude, strength is a relative term, right [indiscernible] up from $10 to $15, but it's been, it's been a long steady climb here recently and I think that we'll probably hold we'll see how long it continues up. In storage, I think we're getting very close and there is a lot along the water and tankers right now.In storage, they're going to stay high for a bit that I have a feeling that we're not going to run out totally as [indiscernible] a couple of three weeks ago, and it will be full and there's going to be some issues around it, but as far as totally run out of storage and just totally shut in everything it seems to be fading a little more than what it was a couple of weeks ago. So pricing, it's just all down right.So there is hardly any price into compared to now. We're still putting out some equipment. Obviously, we're getting more back we're putting out and in the units, we're putting out are really not taking too severe of a bidding on what I would say, prices were six months ago, but there's not a whole lot going now. So it's not a good statistic to use right now just because the amount of equipment going out is far lower than equipment coming back, but if you just look at what we've done pricing is not an issue right now. Part of the issue is managing through shut-ins and then we will do that, we've gotten some bag, but it will give us more bag, but I think generally will be in a lot better shape and most other people coming out of this thing.

Our next question comes from Craig Hoagland from Anderson Hoagland.

I was curious, Stephen, could you talk a little bit about the various regions you operate in and where you're seeing units being turned back and which reasons are faring relatively better?

Well, the Permian has been hit the hardest. And that's simply because it's has been the fastest grower last two to three years. So it's not unusual that you'd see that and of course this is primarily all country and all the commodity that's getting hurt. So, we're seeing most of it in the Permian we're seeing a touch of it and Mid-Continent, scoop stack area Oklahoma in that and those are probably the biggest impacted areas. We haven't seen much in the Rockies yet and the San Juan has been affected somewhat in the oil play out there, but generally the Rockies haven't seen much Barnard, South Texas have seen much, Appalachia haven't seen much.So it's primarily going to be and again this makes sense from the point of this is how we've been most active in Mid-Continent or the Permian. As far as areas stronger than others I think that's, again that's relative to you say well these have gone down, these have gone down as much. So the ones that have gone down as much I guess are the relatively good areas.

And do, are there anymore large rigs under contract that hasn't begun work [indiscernible] generating revenue yet?

Yes, we've got the number. Just as we have in the past number of units are on standby rates. They've been built in the past and contracts allowed us to charge standby rates. Now obviously the standby rates are going to be invoked a little longer than we anticipated. We were thinking most of stuff would be out of operating by mid-year third quarter latest and we are on track to do that two quarters ago. But now you will see those standby [indiscernible] much longer. Now, we're still going to get the contracted minimum term out of this equipment. So, standby goes on another two to three months, two to three quarters as long [indiscernible] we will get standby rates plus we'll still get the full contract term at the year-end. So, it's essentially a deferral of full rates, but we're going to, we're going to see a lot more on standby a longer than we anticipated.

And you mentioned in your prepared remarks you believe free cash will be better in Q2 or Q3 than it was in Q1 primarily because of the drop in CapEx?

Now, we're obviously going to have some drop in cash. But yes, the CapEx [Indiscernible] much quicker is more in our control. And we spent [Indiscernible] I think was really compression and that's tell them off pretty quick. So in third and fourth quarter. we got some obligations to fulfill in Q2 on it and again there obligations from contract equipment, but by Q3 and Q4 CapEx is going to be negligible.

And at our current rental run rate, are we able to cover overhead?

Yes, sir. Yeah we'll still be generating some cash, but obviously there is -- its going to be under pressure, but Q1 was good and resilient. But our company and all of the other companies Q2 is really the start of -- where we are going to start seeing some real major impacts from crude because that essentially a March event. So, the impact start taking effect in Q2 but we anticipate generating free cash at the end of the year -- throughout the second half.

Rright. Okay, thanks, Stephen.

Okay. Thanks Craig.

Our next question comes from Tate Sullivan from Maxim Group. Please go ahead, Tate.

Thanks, Stephen. I appreciate your comments. In the current environment, the sudden notices and you commented on it before, but how much do you get advanced notice from the customers that they're planning to shut down well and they return the equipment in two months or is it instantaneous shutdown return equipment and you hear about at the same time?

Yes, it’s pretty instantaneous, they're not widen. How long time to call us pretty much when they decide internally to shut some down or shut the field down or something like that where we're probably about next on the phone list because compression is a fair, fair operating expense term. So we get very little notice. We have agreements we put in place on shut-ins from the point of how long they're going to last, what the rate is going to be [Indiscernible] terms had to be fulfilled and things like that.So, we got this stuff pretty well covered and you don't like those, I mean you actually hate them shut-ins because nobody is making money at that point, but I think we've -- and I've been in some of the direct negotiations on some of these and I think we are out of a bad situation. We're going to come out fairly good shape on it, not just from the proceedings might be in the terms of conditions around them. But yeah, I think the customers we're dealing with and we've got and we're shutting into are ones we have good relationships with, we're able to work through some of the details and [Indiscernible] negotiations of these things and I think we're going to come out from the point of having a pretty good image with our customers as far as being responsive and fair and what we're doing on this stuff and those guys don't want to shut them in. We sure don't want to shut them in, but it's all -- it's all given right now and the best you can do is try to negotiate some fair.So, we can -- I'll get through it and come out on the other side and I think we're going to be in pretty good shape from that standpoint on that, but it is what it is, the shut-in as it was not good for anybody but we get very little notice typically.

And then another technical, the larger horsepower that's currently in the fields we are on the pad supporting pretty multiple wells and the wells are producing currently, does a customer sometime stop the gas lift process while keeping the production at a lower level or will they shut the whole field down as it was connected?

Typically, it's a whole, the well or the field or a bunch of wells we'll just shut in. You can probably some of those gas lift wells you could produce for that gas lift. Most of couldn't or you wouldn't be able to produce enough to make it worthwhile. So typically when they're shut in the compression there're shut in the wells and I was just hoping for a higher oil price.

[Operator Instructions]. And Stephen, at this time there appears to be no further, actually just queued up one moment. We have with us George Melas from MKH.

Thank you. Yes, good morning. And a very lucrative story. Is there a way to segment the rental revenue between low horsepower, medium and high in this quarter, roughly what other, how much of the rental revenue in each of those categories?

Yes, I don't have it off the top of my head, but I mentioned 37% of our utilized horsepower is large, classified as large. So you could, you can roughly, say, if you just want quite dollars to horsepower you roughly, say 40% of rental revenue is large horsepower to at least just 60%. So of that, I'm going to hazard or guess to say 40% is medium horsepower and then you have 20%, yes small horsepower.

And then a question on your deferred tax liability that and I don't know quite how to understand that number and it's a pretty large number on your balance sheet. Does that represent taxes that are deferred and that you will owe in the future?

Yes. Yes. Now the $4,000 question is when you owe and when you pay them and et cetera, et cetera, but yeah it does represent taxes that are deferred down the road. We get some tax advantages throughout different years depending on what our depreciation loads are generally if you have bonus depreciation what that, what the tax laws that allow you from a depreciation standpoint. So I mean, as you can shelter all those taxes and some of those you can't. And those are the [indiscernible] some cash taxes paid, but and that's about as far as I'm going to go because I'm going to start [indiscernible] as far as what that means, but it is, it is a liability, because they are taxes owed but we are carrying for a long time. So sometimes are not out for quite a while.

And we do have a question from Patrick Henslee.

Yes, it's noted that you guys gave back the PPP loan, but is there any indication that there are other stimulus programs out there that you all are eligible for and you will apply for?

Now there's some others out there, but I think they have did a good job of surgically removing small public companies from eligibility for anything. Excuse the sarcasm. So, now, there is some out there because you can take advantage of and et cetera, et cetera. But now, actually I think we've looked at a couple of others and there's just not, they don't apply or they're not appreciable or you can read the rules that are going to change next week when we get the loan. So, no, there is nothing there is nothing in the queue that we're going to be doing, right now anyway.

And Stephen at this time there are no further questions.

Okay. Thanks, Ross. And thanks everybody for joining us on the call. I appreciate your time this morning and look forward to visit with you again next quarter. Thanks.