ProPetro Holding Corp. (PUMP) Q3 2017 Earnings Report, Transcript and Summary

Good morning, and welcome to the ProPetro Holding Corporation Third Quarter 2017 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Sam Sledge, Director of Investor Relations. Please go ahead.

Thanks, and good morning, everyone. We appreciate your participation in today's call. Once again, with me today, are Chief Executive Officer, Dale Redman; and Chief Financial Officer, Jeff Smith. Yesterday afternoon, we released our earnings announcement for the quarter ended September 30, 2017, which is available on our website at www.propetroservices.com. In addition, this morning, we posted a presentation on our website that summarizes our Q3 results. Please note that any comments we make on today's call regarding projections or our expectations for future events are forward-looking statements covered by the Private Securities Litigation Reform Act. Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control. These risks and uncertainties can cause actual results to differ materially from our current expectations. We advise listeners to review our earnings release and the risk factors discussed in our filings with the SEC. In addition, during today's call, we will reference certain non-GAAP financial measures. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in our earnings release. Finally, after our prepared remarks, we will answer any questions you may have. So with that out of the way, I will turn the call over to Dale.

Thanks, Sam, and good morning, everyone. We appreciate you joining us for today's call. We're pleased to report another quarter of solid growth across the board. Jeff will go through the details in a few minutes. But I wanted to provide a few of the key financial highlights including total revenue of $282.7 million, a 32% increase over the second quarter of 2017. Net income of $22 million or $0.25 per diluted share versus $4.9 million or $0.06 per diluted share in the preceding period. Adjusted EBITDA of $47.8 million, which was 56% higher than the second quarter. Even more important, adjusted EBITDA margin increased by 250 basis points to 16.9% as compared to 14.4% in Q2. Driving these impressive results was our unwavering focus on meeting the needs of our customers. As I've said in the past, we view our customers as partners in a business in which we are in for the long haul. Driven by attractive well economics with low breakeven prices, the Permian continues to benefit from robust frac demand that is outpacing available supply, and we expect that trend to continue through 2018. With 100% of our frac operations focused on the Permian and being headquartered in Midland, we are fortunate to not only enjoy exceptionally close relationships with our customers, but also understand the unique complexities of operating in the Permian. We believe the keys to ProPetro's success are: providing a superior fleet, delivering best-in-class service to our customers, our commitment to our employees, their families and the community, and also ensure an unwavering commitment to safety. If we stay true to these principles, we will deliver a superior product to our customers. We believe this is critical as we recognize that if our customers are successful, we will continue to be successful as well. Looking ahead, we anticipate continued evolution in the infrastructure and logistics in the Permian, especially as it relates to procuring West Texas and other sand sources closer to where our operations are located. Our internal cost structure and that of our customers should benefit from this dynamic heading into next year. Supporting our long-term view of an improving environment, we deployed 3 new build frac fleets during Q3. In addition, in late October, we took delivery and immediately commenced operations of an additional new build fleet, bringing our current fleet capacity to 690,000 horsepower or 16 fleets. The acceleration of our new build capacity addition has been due to higher than anticipated customer demand for our services, along with the outstanding performance of our operations team and manufacturing partners. We have further responded by targeting deployment of an additional new build, 45,000 horsepower frac fleet, during the first quarter of 2018. Similar to the other delivered fleets that commenced operations recently, this fleet is committed under similar terms as our most recently deployed commitment with an industry-leading operator that we have worked with closely in the past. Combined with our attractive new build cost structure, this was a straightforward decision for the company. I'm also excited to share that this will be the company's first dedicated fleet to work full time in the Delaware Basin, a region of the Permian where we see significant future opportunities to expand our business. We are also seeing increasing demand for other services beyond hydraulic fracturing. We constantly evaluate opportunities to further expansion in our nonfrac service offerings based on long-term market demand, expectations and internal capital allocation parameters. I'm also happy to report that our plan to purchase an additional 86 Tier 2 engines by the end of next month is on schedule. 18 of these engines will be used in the manufacturing of the 17th fleet that will be deployed in the first quarter of 2018. These additional engines will provide us with the important flexibility as we continue to ensure the operational excellence of our current fleet and consider further expansion of our frac capacity. I would also note that by making this purchase now, we anticipate long-term cost savings of up to $30 million. Also, we want to thank what I view as the finest group of employees and support contractors in the industry. Our continued success, as evidenced by our third quarter results, is a direct result of their tireless hard work and dedication, and we truly are blessed to have them on our team. This is not just my view, I hear this from our customers all the time. This steadfast focus on operational excellence and collaborating closely with our customers is a hallmark of ProPetro, and will continue to ensure our long-term success. I will now turn it over to Jeff to discuss our Q3 financial results in more detail. Jeff?

Thanks, Dale, and good morning, everyone. As Dale discussed, we are extremely pleased with our operating performance and financial results for the third quarter of 2017. Similar to our last earnings call, my focus today will be on providing a comparison of sequential quarterly results as we view that as the most relevant. For those interested in comparing our year-over-year third quarter results in more detail, I would point you to our 10-Q that we expect to file by the end of the week. Revenue for the third quarter of 2017 was $282.7 million or 32% higher than the $213.5 million for the second quarter of 2017. The increase was primarily attributable to higher customer activity, fleet size and demand for ProPetro services, leading to improved margins for the company's pressure pumping and other services. During the third quarter, 96.2% of total revenue was associated with pressure pumping services as compared to 95.4% in the second quarter. Cost of services, excluding depreciation and amortization for the third quarter of 2017, were $225.4 million, which was 28% higher than the $176.8 million during the preceding quarter. Primarily driving the increase was higher activity levels and fleet size coupled with an associated increase in headcount. As a percentage of pressure pumping segment revenues, third quarter pressure pumping cost of services decreased to 80% from 83% for the second quarter, due to improved pricing and operating leverage as demand for services increased without a significant corresponding increase in costs. General and Administrative expense was $11.1 million for the third quarter of 2017 as compared to $7.9 million for the second quarter of 2017. Contributing to the increase was higher legal and professional fees, insurance expense and payroll. General and administrative expenses, excluding stock-based compensation and other nonrecurring expenses, were $8.5 million or 3% of revenue for the third quarter of 2017. As evidenced here, we take pride in keeping our business lean and productive. Net income for the third quarter of 2017 totaled $22 million or $0.25 per diluted share versus net income of $4.9 million or $0.06 per diluted share for the second quarter of 2017. Finally, adjusted EBITDA increased 56% to $47.8 million for the third quarter of 2017 from $30.7 million in the previous quarter. As Dale mentioned, our adjusted EBITDA margin for the third quarter was 16.9%, which was substantially higher than the 14.4% margin we saw in the second quarter. Turning to our liquidity and capital spending. We ended the third quarter of 2017 with cash on hand of $51 million and total debt of $41.9 million. Total liquidity at September 30 was $176 million, including $125 million in unused capacity under our $150 million revolving credit facility. Year-to-date, as of September 30, 2017, $206.3 million worth of capital projects have been incurred, and we continue to anticipate full year capital expenditures to range between $270 million and $290 million. This includes 6 new build frac fleets, the purchase of the additional Tier 2 engines, a small amount of growth for ancillary services and maintenance CapEx. For more detail, please refer to the presentation posted to our website this morning. As I've stated in the past, our goal for investment in new build frac fleets and related equipment is pretty straightforward. We are looking for paybacks of 2 to 3 years on an adjusted EBITDA basis. We're able to achieve these results through a combination of advanced ordering and bulk purchasing, which provides us with improved pricing. It is also very important to immediately deploy this new equipment, while ensuring it remains fully utilized once it is delivered and operating. As we look to next year, we will continue to employ an opportunistic capital spending program designed to prudently grow the business to meet the needs of our customers, while maintaining a strong balance sheet, ample liquidity and low leverage. As I've mentioned on previous calls, our goal is to keep our trailing 12-month debt-to-EBITDA ratio below 1.0x. With that, I'll turn it back to Dale for his closing comments.

Thanks, Jeff. Throughout 2017, we have seen the market for our services continue to improve, and we expect that trend to continue. The outstanding well economics of the Permian is driving increasing numbers of E&P companies to the region, and they are spending heavily on drilling and completion activities. With 100% of our fracturing operations located in the Permian, we are in a great position to further capitalize on these strong underlying dynamics. It is important to recognize that while we benefit from the location of our operations, just as critical to our success is the solid foundation we've built over the last 12 years. From day one, we have relied on a philosophy of making sure we have a superior fleet, service quality and safety record, supported by an exceptional team that is intently focused on the needs of our customers. This approach has served us well through the cycles and is the reason why we have consistently achieved superior utilization and operating performance. I cannot understate the importance of the fact that the majority of us at ProPetro grew up in the Permian. We are blessed with an outstanding employee base that gives us the confidence to continue to build and scale the ProPetro platform. Our local roots have given us a competitive advantage in attracting top talent as we have and will continue to organically grow our operations. Additionally, our customers view us as collaborative partners with the strategically aligned interest of building strong businesses that can weather the volatility inherent to the E&P industry. Because of these deep relationships, we are uniquely positioned with the enhanced visibility as it relates to the utilization of our equipment. This provides us the confidence to continue to prudently invest in our business, while maintaining strong financial discipline and a solid balance sheet. I want to once again thank the ProPetro team as well as our customers, suppliers and shareholders for their support in our continued success. So with that, we will open it up for questions. Operator?

[Operator Instructions] The first question comes from Sean Meakim with JP Morgan.

So Dale, as you're making this inevitable move into the Delaware, could you maybe give us a sense of how you see the addressable market for your business in that part of the Permian? And how should we think about what that market can look like over time for ProPetro?

Yes, Sean, we've been very transparent. When we went public in March, we talked about that part of the Permian as being the way to double the capacity and the size of the company, and it's pretty well played out as we talked back then. You've got the same amount of rigs running in the Delaware as you do in the Midland Basin. And with the visibility, with the customer base that we have had here and their expansion into that area, the best way to grow into an area is to be pulled by your existing customer base, and that's exactly what's going on at this time. So it'll be a function of doing it very disciplined. It'll be very seamless, just as we've done operationally here in the Midland Basin. And we are in great shape to execute and to grow that platform with -- just like we have here in the Midland Basin. Very little guesswork at all.

Fair enough. That makes a lot of sense. And so then just talking about, in the quarter and looking forward, there were a number of operators who ran into some challenges in terms of getting production online in the quarter. Some of them called out supply chain as being a source of challenge. So no need to get to anyone specific, but I guess, what did you all experience in the quarter? Any impact to stages per day for some of your fleets? I mean, the results don't seem to really indicate that, but it should be great to look under the hood a little bit and see how some of those types of issues may have impacted your or could looking forward? How do you guys see that?

Yes, I would say that we would speak specific to the folks that we work with and how it affected our work. Very little disruption at all. So I would -- that's the best way to answer that. Obviously, we could spend time on the hurricane issue that may have affected us in some way from a revenue or margin perspective, but that pales in comparison to what others faced with that situation, so I don't think that's worth discussing on this call. But we're fortunate to work for the best E&P companies out here in the Permian, and so we just -- and they weren't affected that much that we saw from our operations.

The next question comes from George O'Leary with TPH & Company.

Just wanted to dig in just a little bit more on Sean's question, which I thought was a good one. And I guess, as you guys look at your opportunity set going forward, and you're now deploying one fleet into the Delaware and just given your comments there is equal rig counts into the 2 basins. Does -- is there more room to run on the Midland side? Or does it feel like your growth going forward is largely going to come from the Delaware side of the equation?

I think the best way to answer that, George, is that the customer base that we have is going to dictate that. Just by the sheer numbers, it's easy to see that the company can double in capacity over in the Delaware. So what will dictate our move over there at the pace from a horsepower perspective will be the function of our balance sheet, and that's how we'll kind of look at this and be very disciplined on it. I think that's just the way we've run our business. But that's what gives us the ability to look into '19 and beyond as we plan our business and those inbound calls that we're getting now, post-2018, just gives us so much more visibility with the model we have.

Great. That's very helpful. And then I thought the comment was interesting that you guys are always looking at other opportunities outside of frac. I guess, in your mind, would these opportunities largely be kind of a natural extension of the existing business something like cementing? Or is there something more outside of the traditional fairway, those typical businesses that looks interesting to you today?

Well, I think we'll stay pretty close to the product offering that we now have. And we are very, very happy with the operation segment and our cementing division and think there's a lot of opportunity there. And we'll stick real close to organically doing that and mitigating any risk associated, but we do believe we can scale that product offering. And so I think that's the best way to answer that question.

Great. I'll sneak one more in, if I can. The revenue per day per fleet you guys moved up very notably on the quarter, which is really nice to see. Just wondering if you could maybe frame a little bit of how much of that was due to pricing versus efficiency/zipper frac/just being able to, as you're on multi-well pads, sit in one place longer and pump more days per month? And then has that flowed through to any -- traditionally you guys have framed full utilization as working roughly 25 days a month, getting 125 stages per month down. Is that changing as E&Ps push more into development mode, can you guys just get more done?

We have -- productivity in the third quarter was good, as you've already mentioned. Of that 34% increase in revenue that we had, I can tell you that about 2/3 of that amount came from just the additional horsepower that we put on the ground during the quarter. But the other 1/3 -- the remaining 1/3 of that 34% increase actually did come from a combination of pricing, efficiency and job mix. And when you look at the stages completed per month per fleet, the productivity and efficiency of that, it -- we actually showed an increase of about 2.5% over the stages completed by each one of those fleets per month in the second quarter.

The next question comes from Praveen Narra with Raymond James.

When you think about the Delaware Basin in terms of the supply chain, can you just talk about how that may be differs from what you guys -- how well you guys are doing in the Midland Basin? And then is there -- is one fleet enough initially or do we need to have a wider base of fleets in the Delaware pretty quickly?

Well, Praveen, you've met me so you're pretty sure it's got to be simple if we're going to do it. So I'll break that down for you just a little bit. It's only 90 miles away, okay? It's not a huge transition. We've been working over there for a long time. So it's not a -- there's not a lot of guesswork to it. The labor issue won't be any different. The regional sand coming online is going to help logistically. So it's an easy transition. That's a natural move for those of us that know the Permian and live here. So it will be much less of a transition or risk from a perpetual standpoint than what others may see. Does that answer that?

Yes, that's perfect. And I guess, to that point on the labor side, you guys have done a great job of kind of getting these fleets up and running really quickly. Can you talk about how labor additions have been and how you've been able to get that -- the labor force in there and operating seemly just as efficiently as the last ones?

Praveen, it's very, very simple. Our guys that manage that process amaze us every day. How they do it? The training, the -- from a safety perspective to an operational of equipment and processes is really impressive and unmatched really in the market. So it's as simple as the people that are managing the business, and they're the best of the best. And that's the best answer I can give you.

I think that the fact that we're pure-play Permian and have such a presence here in this market, solely in this market, certainly makes that project a little bit easier. And I think we've leveraged that to its maximum.

Okay, perfect. If I could sneak one in. In terms of the conversion to stainless, I know we're going to be fully converted into 4Q. Where were we in 3Q? Is 80% a decent range?

About 75%.

The next question comes from Brad Handler with Jefferies.

I have a couple of noninteresting housekeeping questions, but maybe I'll try one slightly more interesting one first. As you do focus with your customers on 2018 and the regional sand that you've been talking about, do you have any sense of how? And if there are some trends you could identify in how consumption might change, whether it's grade mix, whether it's overall volumes of sand?

Yes, I think it's probably a little premature to do so. What I would probably say, Brad, is it's going to be well received. I think the science that max up the sand itself, I think we're past that stage of our customers pumping it. So I think in the Midland Basin particularly, I think the mix of mesh size probably will stay in line at this point with what we're seeing. But that's going to be the customer call. And we're comfortable with what we have in place to provide those different meshes and that sand mix as the recipes are called for.

Okay. All right, interesting. We'll see that evolve, so that's helpful. Do you have any sense -- I've got a couple more, sorry, I was -- I sounded like I was signing off, but I didn't mean to. Do you have any sense as you're looking at the demands or the -- just the general wear and tear as to your own fleet size and the expectations? Do you think it will gravitate from 43,000 horsepower per fleet to something higher through the course of next year for some reason?

Yes, we don't foresee that. We think we've got the right size fleet metrics for the work we're doing, and all of ours are 40 -- will be at 45,000. So we feel there's a lot of folks saying a lot of different things, but we don't see that changing for the work we're doing at this time.

Okay, okay. Helpful. Maybe just a couple of housekeeping with respect to 4Q. Can you share your thoughts around SG&A and then D&A for this current quarter, 4Q?

SG&A, I think -- and we quoted some numbers about what -- when you take out the nonrecurring items from our SG&A, the number is probably in the neighborhood of $8.5 million to $9.5 million per quarter. So in that general neighborhood. D&A, I'd say it's probably about a 5% increase over what we had in the third quarter or something in that neighborhood.

The next question comes from Daniel Burke with Johnson Rice.

Jeff, earlier you talked about utilization in the context of stages per day, and of course, that's consistent with the way you all and the industry couch that. But can you maybe talk about the pump hours per day you're achieving at this point? And maybe what the upper end of the band you see is possible when you're on the right types of zipper work out there?

We don't really have any of that information at hand to be able to quote it.

Maybe we could do that off-line probably, but we wouldn't give that out on this call.

Understood. Okay. Maybe a much smaller question then. On fleet 17, you talked about a multi-year contract there, does that mean 2 years or does that mean a different duration?

Well, it means we're very confident that as long as we perform, it can stay there indefinitely, how's that?

That sounds pretty good to me.

And historically, that's the way our fleets have been dedicated and contracted, and we have no sense that it's going to be any different than what we've done historically. Our guys and our people, I would say with great confidence, if they get on someone's location, they stay.

Okay. All right, that's helpful. And then -- maybe then to append one last one. Maybe again back to you, Jeff. But could you maybe address the accounts payable increase, working cap decrease and what that represented in the quarter?

It's just the way the timing of the payables actually played out. There wasn't -- there is no trend, there is specific information that we could point to that would actually -- that I could identify. It's just kind of just the way it played out. But we did add the 3 new crews during the quarter. So some of that growth in AP is -- was obviously driven by the additional horsepower that we did put on the ground.

The next question comes from Waqar Syed with Goldman Sachs.

My question -- first of all, on the 17th fleet that's going to your customer in Delaware Basin. Is this an incremental fleet for the customer? Or this is going to be kind of a placement crew?

No, it's an incremental fleet.

Okay. Great. And then secondly, what percentage of the jobs that you conducted in the third quarter were kind of zipper fracs?

I think it was close to 60%. Yes, that -- it would have been 60% of the stages that we did, not necessarily number of jobs, but 60% of the stages pumped were zipper frac.

Zipper frac. Okay, great. And then in terms of -- if you look at the engines that you've ordered right now, the ones remaining after the 17th fleet is up. It looks to be equal to about 4 crews or so. Is that kind of the right way to think about how you're maybe thinking in terms of additional crews in '18 or '19?

Waqar, you're trying to bait me. You're trying to get me to give guidance, aren't you?

And I was just trying to understand, are these replacement or are these for incremental fleets and how should we be thinking about them?

It will be a combination. But I think the right way to think about it is added capacity for growth.

Okay. And generally, what's -- are we still at that 3-month kind of lead time for new orders with the -- your manufacturers?

I think that's a good spot to land.

The next question comes from Jim Wicklund with Crédit Suisse.

And Waqar asked a question, he baited you on the growth and Dale so I don't have to, so Waqar, thank you for that too. I appreciate it. You guys are exceptionally efficient and one of the things when we first did the IPO that struck us, how many people do you have per crew per spread? And how many of your spreads work 24/7?

We have between 35 and 40 per crew. And from a percentage 24-hour, probably 85% is 24-hour crews.

Okay. And adding 3 crews in a quarter is kind of an herculean effort and especially considering Texas unemployment is at record lows. You guys -- can you talk to us about how hard it's been to staff up? And everybody has complained about the inefficiency of green crews in hydraulic fracturing. I'm hoping that you're not one of those. But can you talk about the difficulty in hiring capable people? And how quickly they get up to speed?

Jim, you're point of 3 crews in 3 months, how about 6 crews in 6 months?

No, believe me, I understand. I understand.

So that's what we did. What I would say from a green hat, a lot of times a green hat in ProPetro may have a lot of experience. But he still has to wear a green hat. So you kind of got to be careful how you define green hats. But again, I spoke to it a while ago on one of the questions, it's all about the people and you guys have heard me over and over and over since the first day we had Analyst Day was, the minute you take your eye off your people and your customer, bad things happen. And you -- a lot of distractions can take place in this business, a lot of moving parts. But our attention to give our people what they need to be successful is something we'll always keep our eye on, and it's playing out through the numbers and through the execution. So I'd love to give you the secrets, but that would probably not be fair to give everybody our secrets.

And I assume you guys drug test like everybody else in the business, so you're actually finding good people, right?

No, we try to keep them all high and -- no, Jim, absolutely.

I had to check before I come apply for a job, that's why I'm asking.

You had not, Wicklund, we can always count on you. When you look at our TRIR and the metrics that we have to run our business by and who we work for, believe me we have very strict policies in place to ensure that we're the best of the best, and we're hiring the best of the best. Is it easy? No. And does everybody make it? No. But I think the fact that you've watched us, everybody has watched how we've executed. Everybody is sober, everybody is in great shape. So that probably got carried away a little more than it should have.

No, but I wanted you to focus on that because it is so important, so I'm glad it was a decent discussion. A follow-up, if I could. You've got engines, you've already helped, with Waqar on the growth question, but if I were to order a new frac spread today, Wicklund exploration. How much would I have to pay on a per horsepower basis, what does new equipment cost these days, if I hadn't already bought my engine and everything, if I'm just starting from scratch?

That's a great question and everybody has a different number. I'll just give you a -- I think you're pretty creditworthy. I don't know, but I would say, that for ProPetro, I'll give you -- again, you've heard us say, for a 45,000 all-in fleet, it's $29 million with Tier 2 engines, okay? $650 per horsepower. We will run out of those engines at some point, and we'll have to go to Tier 4 engines. That's going to move that to roughly $35 million to $36 million or $775 to $800 per horsepower.

Okay, that's still better than a lot we hear. And then lastly, if I could, on the stage -- on the housekeeping issue, what was your stage count in Q3? I'm sorry, if I missed it.

No, based on competitive -- since we're pure-play Permian, we never disclose exactly what our stage count is. But I can tell you that the trend was up and that Q3 over Q2 was a 26% increase in stages completed.

[Operator Instructions] The next question comes from William Thompson with Barclays.

I think there was a mention of $30 million of cost savings, was that pertaining to the 86 Tier 2 engines?

That is correct, Will.

And then what happens January 1, 2018, when we go to Tier 4, are the rest of the fleet, the industry fleet, is it grandfathered in? Can you help clarify? There's not a lot of literature about what exactly happens and what it means for the legacy fleet of Tier 2 engines.

Yes, so it's grandfather in. As long as a Tier 2 engine has been placed in service by 12/31 of 2017, it's still usable. For the life of the asset.

For life, yes. But when we replace that engine -- I guess that's my question, if we replace the engine on the pump unit, we're grandfathered in?

Yes. You have to replace it with a Tier 4, if the Tier 2 engine cannot be rebuilt, okay? Is that clear?

Yes, okay. And then in terms of the language, the committed multi-year terms. I know your comment on -- in terms that could be a -- essentially a long-term agreement with the customer, but how do we think about the pricing scheme considering the market is still undersupplied?

Great question. And there's been a lot of talk about it. I'll try to keep this short. Pricing, where we are in this cycle, in the undersupply, here is kind of the view we have. We're going to earn pricing from this point on, okay? We're going to earn it. And that's going to differentiate companies. Then we're going to focus on internally operating with more efficiency, okay? And the transition for more wells per pad will be a big plus in that. And then last, but not least, is the operating leverage that our model has built in it, that as we spread more horsepower across fewer people, it's going to gain us margin. So those are the 3 things to talk about and how you gain pricing, but we're not in a situation in this market where you have to be in tune with the economics of your customers' well economics. And they are still driving the boat.

So in terms of the 3 recent new builds, the 2 this quarter, the 1 new announced fleet 17, that 2- to 3-year payback, that's kind of the floor, and in terms of driving higher pricing and then to operating efficiencies. I mean, is that -- how to think about that?

Yes, it is. If you actually use third quarter profitability and analyze the investment decision for that fleet 17, I think on a EBITDA basis it's calculated out to about like 2.08. And on a cash flow basis presuming that's 6% of revenue is for maintenance CapEx, the number calculates up to like 3.1 years.

This concludes our question-and-answer session. I would like to turn the conference back over to Dale Redman for any closing remarks.

Thank you, operator. I'd like to once again thank all of you for joining us. From our comments today, it should be clear that we are excited about the opportunities in the business, and our ability to continue to successfully and profitably execute on our strategic initiatives. Supported by a best-in-class customer and employee base as well as industry-leading utilization and operating performance, we believe we are uniquely positioned for long-term success. We look forward to keeping you up-to-date on our progress. Have a good day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.