Good morning. My name is Christy and I'll be your conference operator today. At this time, I would like to welcome everyone to the Frank's International Second Quarter Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers remarks there will be a question-and-answer session. (Operator Instructions). Thank you. I will now turn the call over to Thomas Dunavant. Please go ahead.

Good morning, everyone. And welcome to Frank's International's conference call to discuss second quarter earnings. I am Thomas Dunavant, Manager of Finance and Investor Relations. Joining me on our call are Keith Mosing, Chairman, President and Chief Executive Officer; John Walker, Executive Vice President of Operations; and John Sinders, Executive Vice President of Administration and Interim CFO. Keith will begin today's call with general highlights, John Walker will provide an overview of our operations and John Sinders will provide a review of our results and outlook. Keith will then provide some closing comments. Before we begin commenting on second quarter results, there are few legal items that we would like to cover. First, remarks and answers to questions by the company representatives on today's call may refer to or contain forward-looking segments. Such remarks or answers are subject to risk and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements and such statements speak only as of today's date or if different as of the date specified. The company assumes no responsibility to update any forward-looking statements as of any future date. The company has issued in its SEC filings cautionary language identifying important factors that could cause actual results to be materially different from those set forth in any forward-looking statements. A more complete discussion of these risks is included in the company's SEC filings which maybe access on the SEC’s website or on our website at www.franksinternational.com. Also you may access both the second quarter earnings press release and a replay of this call on our website. Please note that any non-GAAP financial measures discussed during this call are defined and reconciled to the most directly comparable GAAP financial measure in the second quarter 2014 earnings release, which was issued by the company yesterday and is available on our website. I will now turn the call over to Keith for his comments.

Thank you, Thomas. Looking at the second quarter, our results were mixed our continued strong growth in international services and a recovery in our U.S. land business was offset by weaknesses in our Tubular Sales and rig related delays in the Gulf of Mexico. The good news is that we believe our U.S. land based business has stopped declining we have had sequential growth in May and June and anticipate sequential growth for the rest of the year. Internationally we were awarded several key contracts in Q2, including in West Africa and the Middle East. Across the globe our customers continue to rely on Frank’s to provide their Tubular services for the most demanding projects. In the second quarter we continue to be selected by our customers to provide service to them around the world. As an example we were able to mobilize in West Africa for a customer with only three weeks notice. Competitor advice the customer that they did not have the right technology to provide efficient services on a new generation rig. Frank’s is a company came together to mobilize and successfully provide the tubular running services. This short notice mobilization provided us another opportunity to showcase our people and services. This type of customer centric activity happens around the world at Frank’s everyday. Shortly John Sinders will provide details of our 2014 expectations. But I want to let you know that I am excited about the opportunities we are pursuing and have secured for our 2015 and 2016. Lastly, I’m pleased to announce that we have doubled our quarterly dividend to $0.15 per share. Our tremendous free cash flow positions us to return cash to shareholders while continuing to pursue growth opportunities globally, both organically and through acquisitions. I will now turn the call over to John Walker and John Sinders for their comments before providing my closing comments.

Thank you, Keith. While our results for the quarter were mixed, we have a number of reasons to be optimistic about the future. We continue to be positive about our growth prospects in the international markets. In the second quarter, we were awarded two new contracts in Angola. This work is for exploration campaigns of pre-sold blocks with two large independents. One contract is for 18 months, while the other is for 24 months. These contracts show the operators are continuing to place trust in Frank’s expertise in the challenging pre-sold wells within the region. This also positions Frank’s well for the probably development activity associated with the exploration campaigns. Elsewhere around the world, we’ve had several key contract wins in Australia, Western Canada and the Caspian Sea. In the Middle East, I’m happy to announce that we continued to increase our opportunities in the region and have been awarded integrated project contracts with two global service companies. This will position us well to grow both on and offshore in the Middle East going forward. In the Gulf of Mexico, we continued to win contracts for work through 2014 and into 2015. One of these contracts were recently won with an existing customer and includes activity on potentially for drillships and the spot platform. The terms of this contract covers work for three years. There are currently 40 floating rigs working in the Gulf of Mexico. We have witnessed continued delays and unscheduled maintenance along with delays in new rigs entering the region which was not in our initial guidance. However, given the opportunity we have, we still believe we will grow at least 10% for the year. We believe our U.S. land business has bottomed and we have sequential improvements in May and June which gives us encouragement for…

Thank you, John. On our CFO search, we continue to look for a candidate that will provide public company experience and are committed to finding an excellent candidate quickly. We'd like to thank Mark Margavio for years of service to the company and Mark has agreed to stay on Board to assist with the transition to a new CFO. Second, I'm pleased to announce that we've doubled our dividend, the Board of Supervisory Directors declared a dividend of $0.15 per common share per quarter subject to applicable Dutch withholding taxes for the record date of August 29 with payment on September 19. As we look at our free cash flow generation along with our CapEx needs and acquisition opportunities, we decided to increase the amount of capital we’ll return to shareholders. We've always maintained that we cannot find ideally suited acquisition, we’d rather return cash to our shareholders. Our expectation is to maintain this dividend and we will consider special dividends or increases as wanted. We believe that this dividend can be maintained out of net of free cash flow. We continue to evaluate acquisition opportunities, both large and small and we expect to find any acquisitions with cash on hand or external financing if necessary. Before I begin with an overview of our second quarter results, I want to discuss some additional expense recognized in the quarter. We’ve recognized the acceleration of share-based compensation expense related to restricted stock units, granted at the time of IPO. Initially these RSUs were amortized on the same schedules are investing, but after implementing new controls of our own and granting an expensing of our issues, the expense recognition has been accelerated due to certain retirement provisions. This has resulted in an 8 million out-of-period non-cash expense and 3 million of additional in…

Thank you John. As we approach the one year mark of being a public company, I'm very pleased with the progress that we have made. And I'm very optimistic about the direction we are heading as a public company. Frank's has continued to add a lot of new talent, who are complimenting are already taught much team. All of those together are working hard every day to make Frank's a stronger company. We are innovating and designing new equipment, finding ways to provide better service to our customers. And we are improving our reporting to provide more transparency to our investors. All of this is what makes Frank's a great company that it is today. Thank you for your continued interest and support. We will now open up the call to your questions.

Thank you. (Operator Instructions). And your first question comes from Ian Macpherson of Simmons.

Good morning, Ian.

Ian, your line is open. Your next question comes from Daniel Burke of Johnson Rice.

Good morning guys.

Good morning Daniel.

Hi Daniel.

With regard to the top-line guidance, could you guys address perhaps a little bit the outlook into Q4? I guess the portion of that uptick looks to be likely the Tubular Services business, but it seems like the U.S. business, the U.S. offshore business backloads into Q4, is that based upon current visibility? How do we think about that?

Yes, it is based upon current visibility. I mean, we’re looking at five more rigs coming into the Gulf of Mexico in Q3 and Q4 and we have -- we’re well positioned on those rigs. And remember, the work we do in offshore, I mean it comes in sizable plums. So I mean it does have a meaningful impact. So, we’re anticipating favorable results, favorable improvements in the third quarter but more importantly in the fourth quarter. Clearly, also on the Tubular Sales side, we’ve been working on our deferred revenue issue, on hold issue and we’re close to coming to a solution that’s going to allow us working with our client to begin to recognize some of that revenue.

Okay. That’s helpful. And then John Sinders, it sounded like in your comments on the adjustment to the margin guide that that essentially reflects the reality of the first half results and a lower base line for U.S. land. But I guess I just wanted to get comments on the outlook for margins on the international side of the business. They’ve drifted lower potentially in Q2 for good reason looking forward. But I mean can that still be a mid 40% business?

Sure. Good morning, Daniel. This is John Walker. Absolutely, we continue to be optimistic on international business. We well diversify from a location basis. And it’s business as usual. When you see the compression in Q2 there with, from an EBITDA perspective, that’s simply a timing issue, as I mentioned earlier in the call related to mobilization and fair charges. The associated costs are based on longer term contracts, as you are aware international tends to enter into our business longer term contracts. And we see, and reasonably optimistic that we're going to be in the 40%, around the 40% EBITDA margin. That's being said, remember we manage the company on a long term basis and we’re looking well into ‘15 and putting G&A into the company right now from a headcount basis as the more long-term outlook that will allow us to continue to grow as we diversify not just from the location but from the sector basis. So the deepwater sector basis, as we move into the jack-up side of the business, I think it was mentioned earlier in the week that those are significantly new jack-ups coming out in ‘14 moving into ’15; 60 I think this year, 59 on contracted. Well, this will give us an opportunity to further penetration in that market because currently our penetration is in the teens. So there absolutely no reason that we can’t have further penetration in that market going forward.

I mean Daniel, when you look at our different geographies internationally, our EBITDA margins haven't deteriorated. So, it's not reflecting pricing pressure. What you're seeing as John said, we are ramping up for expected expansion in several new and existing geographic areas and also for growth in different asset classes. So inevitably when that happens, you're going to have the incurrence of expenses before you have the recognition of revenue. And again, we don’t try to manage for hitting a certain EBITDA margin on an aggregate basis, we manage each our business to be as profitable as possible and to hit return guidelines on each business. And so therefore, you’re going to have when we’re in a high growth mode, you’re going to have some front loading of expenses.

Okay, that's helpful. So to summarize what I think I heard both you all say, the international business still presents the opportunity to reach mid 40% margins. But in the interim here as you load for the opportunity set, something closer to a 40% level is what we're more likely to see, is that a fair way to synthesize that?

I would say, yes, summarize, yes, I’d agree with that. As I say, we’re managing for the longer term. So, I agree with that.

Okay. Guys thanks for the comments, I appreciate it.

Thank you.

Thank you. Our next question is coming from Jim Wicklund of Credit Suisse.

Good morning, guys.

Good morning, Jim.

Good morning, Jim.

I understand managing for the longer term. But I'm just curious the mob charges, you increased revenues in international by $11 million and EBITDA went down by a couple of million, where are these projects mobilizing? And looking at your revenue guidance, I guess those revenues based on that mobilization don't kick until sometime next year I guess.

The combination, so the initial expenses you've seen in the early part of the quarter was related to West Africa, West Africa and a part of East Africa. So we have long-term contracts in that part of the world. As far as Asia Pac is concerned, we had some mobilization fees there, but we also have embarked upon additional G&A related to headcount. So it’s a combination of headcount and mobilization fees. So as John alluded to earlier, we are focusing our efforts into a slightly different sector which has not been the primary focus up to this point and being the jack-up business, that’s not losing our focus on our primary technology set, but we are gearing up for future growth and obviously takes headcount to do that and G&A.

For the guidance we are being conservative I mean until we don’t want to be in a position of having to revise guidance again, and so what we have done is we’ve picked a conservative number that we are comfortable we can live with in and it’s going to be driven largely by what type of expenses we incur as we get new contracts in different international regions and what type of expenses we incur as we grow domestically. We don’t have a crystal ball going forward on exactly what that will be. So that’s why we came in and lowered the guidance on the overall EBITDA margins.

Well I appreciate the conservative nature John but you all have missed four quarters in a row. And so the Street is kind of wondering, when the conservative guidance actually is guidance that gets hit. And I look at your G&A and I understand John you are talking about gearing up especially in Asia for jack-ups but you have got $12 million, $13 million sequential increase in G&A, is that all people?

It's 10.5 as the RSUs.

Okay. What should we expect the RSUs total to be in 2015?

2015, it will start off at around $9 million and trend down to $2 million by the fourth quarter. Our runrate RSU amount for normal compensation, after we've amortized the IPO bonuses should be around $4 million bucks a quarter.

Okay. From $9 million to $2 million to through next year, and then $4 million a quarter then on?

Yes. And 2 -- I mean is as some of our new awards come out at year end, it could be, I mean my guess would be an expectation as it'd be higher than 2. 2 would be what you would see remaining from the IPO. So, I would think for the quarter you are going to be closer 4 or 5, in an aggregate amount.

Okay. John you went through a litany of places globally where business sequentially picked up in the second quarter. Were there any geographic regions or any specific areas where you saw business revenues at least decline?

Yes. Latin America, if we look at what we talked about from the beginning of the year, and then there is a lot of optimism around the Eastern Hemisphere. We have got business plan in strategy to get out for the U.S. land, but sticking with international, Latin America has been disappointing for us to this point for the first half of the year. We've declines, substantial declines in Brazil for the large independent or integrated suspended operations and moved the rigs actually to the Gulf of Mexico, by the way we secured that business when it moved. But you can imagine the churns at time you from moving those rigs from Brazil in to Gulf. Pdvsa, we continue to work at reduced levels with Pdvsa in line with the payment terms. So that had a result and factor in it. But the optimism of Latin America going forward we just secured and actually operating it right now an independent offshore Columbia that’s a first in the deepwater. We just secured for an international and large independent in Brazil a three year contract that is just starting for us. So to summarizing Latin America, we see Latin America’s second half increasing around about 40% over what the first half is, but the first half has no doubt been disappointing. And I think if we summarize the overall results between tubular sales, deferred revenue we see Latin America being down in a year-over-year basis and the decline in the early part of the U.S. land has offset all the optimistic growth that we had in the rest of the business. But that said, we have a business plan for each segment of it and the company will continue to be more efficient and we will penetrate the business at higher levels going forward. I am very sure of that.

Okay. John that’s helpful. If I could ask one final question, on U.S. onshore you talked about realigning assets, business has starting to pick up, margins are going to be lower than expected, have we decided to go after market share and revenue growth rather than protect price and margins, is that the strategy shift that’s causing the U.S. see revenue increase with margins flat all that?

The strategy on our one Jim is, our focus was in the deepwater arena no doubt about it and we somewhat lost our focus on the U.S. land. And when we appointed the new leader in Q1, then we’ve got a business development team in place and consolidated four business units to one. We have over 2 dozen locations around U.S. and we’ve talked about efficiency drivers within utilization of asset which is now happening. There will be simplistically locations it would be not operating the (inaudible) of asset but there will be surplus asset as well. So the efficiency drivers been done there. Headcount also has been consolidated. So we have had some relax issuing on pricing and that was the strategy we decided to penetrate more to the market. But for example the Permian Basin opening up a very small portion of that market and we have a huge opportunity to penetrate that market. And we've identified five key targets in the U.S. and we have a business strategy that we're going to implement. And again, I am very confident it will happen on a go forward basis. The thing is it is just going to take time. Q2, early Q2 is when this strategy started rolling out. And as you can see sequentially May and June, month over month was growth. And I see no reason why we don't continue going that path going forward.

Okay, John. Thank you very much.

Thanks Jim.

Thanks Jim.

Thank you. Your next question comes from Jeff Tillery of Tudor, Pickering, Holt.

Hi. Good morning guys.

Good morning.

Good morning.

On the revenue progression just to make sure I understand the moving parts kind of Q3 and Q4 it seems like we're looking at double-digit revenue growth sequentially in the fourth quarter. It sounds like there is contributors from all three major segments so double mix coverage being added Latin American improving internationally and then some of the deferred revenues from Tubulars going forward? Am I thinking about the pieces all right in terms of driving that sort of magnitude of increase?

I think particularly on the Gulf of Mexico and the Tubulars. I mean there is pick up. We do have pick up also in Latin America, but particularly those two are what we're looking for. But we also think and we haven't really included, it, we're going to continue to have some pick up in land. I mean it's not going to offset the declines in the first part of the year fully, but it's definitely going to start to show some pickup too.

That's helpful John, thank you. On the CapEx, full year CapEx reduction of the $60 million change about how much is facilities versus tools. And furthermore are we seeing kind of this classified in the global deepwater market that’s reflected in the lower CapEx number or is this the company specifications driving?

No, it's 50 million facilities, 10 million tools. And the tool breaks down into two ways. We're going to be adding some equipment in the U.S. onshore. And then around the world we actually have better efficiency. One other things, we've been working on as a company is to increase our utilization of our existing asset base and we're starting to see the benefits of that. So that decline in CapEx on equipment of around 20 million for the year reflects better utilization of existing equipment. We will add 10 back and probably in the U.S. onshore so that would be a net decline on 10 on rental equipment and a decline in 15 on facilities. And that's more of a deferral, it's taking time to get some of the permitting and other things we need in some parts in the world particularly, United States to grow out our facilities.

Good. Alright. Thank you very much.

Thank you. Your next question comes from the line of Ian Macpherson of Simmons.

Hi, thanks. I'm sorry my mute button betrayed me on the first try. With regard to the new strategy for onshore, how do you think that might impact your revenue mix for the U.S. business going forward you've been at 35% to 36% of domestic revenues from land in the first half? Do you foresee the growth opportunity in the Permian and elsewhere coupled with your more aggressive strategy taking that mix materially higher or as land outgrows deepwater Gulf of Mexico?

No, it certainly won’t grow -- well, from a percentage wise yes, could, but say from a absolute number, won’t grow. Ian it’s all more on the consolidation of the revenue mix globally because the Tubular Sales obviously has a slightly lower margin relative to the services side internationally and U.S. base. So, I would say from a forward-looking basis, it will be consistent with what’s been guided to this point. It’s just with the U.S. business offshore has been flat to this point as you know because of rates and then also the new rigs coming into the market of [injured] operational issues related to some weather, some to do current offshore and some to do with just system integration testing as they actually drill the first one or two holes. We see the efficiencies will improve in the Gulf over time. Regarding the U.S. land business, again it goes back to utilization of asset, headcount and equipment asset, and optimism in that portion of the business, I would just say for guidance purposes, as we previously guided.

Okay…

We are optimistic on the U.S. land and its tremendous opportunity but we are in the early days of John’s implementation of our strategy and we are seeing promising results but it’s too early to really to guide you in a more meaningful fashion.

Fair enough. And John Sinders, can I also just ask you to just as a follow-up on the RSUs, can you give us the total G&A guidance for the next two, three quarters including the additional step up?

24% of revenue.

Okay. And that would apply through Q1 and then ramping down after Q1 of ‘15?

That's correct.

Okay. And then lastly on the CapEx, you said 50 of the revision was for facilities, is that canceled or pushed into next year?

Pushed into next year.

Pushed in next year. Yes sure.

Got it. Thank you.

Thanks Ian.

(Operator Instructions). Your next question comes from Angie Sedita of UBS.

Thanks. Good morning guys.

Good morning.

So, on the high spec jack-up market, what is your confidence there that you could gain or grow your market share to the same level as what you have in the deepwater? What would be the challenges? And can you achieve the same market share that you have in the deepwater or do you want to?

It’s very possible. For example, I think as you mentioned earlier on in the week, the 64 new jack-ups coming over 59 being unspecified. The new jack-ups are similarly the higher capacity ones or similar in design to be 6th gen and essential automation within the jack-up. And that allows us a differentiator from technology basis with [assets] that will be equipment, Wi-Fi technology et cetera, et cetera. So there is absolutely an ability to penetrate there and of course we have a global platform. So, no barriers to entry technically, there is no barriers to entry logistically, the headcount which we talked about with from an G&A earlier, that's something we have to embrace and we are embracing it. It’s just going to take some time because we’ve had a significant amount of growth pre-IPO and we still had single-digit growth last year but the jackup market is definitely a market for penetration. And I think I talked about this earlier but in the North Sea, we secured two long-term contracts out of the Norwegian sector for two large independent and their long-term contracts, three years plus two one year options and that’s on the high spec jackups. So, we focused on both for the high-end portion of the business on jackups but as we saturate through that and as we still got some room for movement there then we will move into the different sectors.

Okay, thanks. And then is the Middle East award also the offshore high spec jackup market well, I know you talked about onshore and offshore there?

Yes. We’ve got success through integrated project management scopes with the two largest [IPN] companies out there in the quarter. We secured business offshore and onshore for them. So, I am actually heading over to the Middle East in two weeks and I am going to be looking at that model in a lot more detail. And there is -- Middle East has got a lot of opportunities for us in ‘15.

And then John Walker is you think about 2015 very early but if you think about 2015 and what we’re seeing in the deepwater markets, fairly sluggish and delays and slowing of at least near-term intermediate term demand, do you think, it’s up to me that would lead me to believe the revenue growth in ‘15 year-over-year is in deepwater very likely high single-digits for you. Do you think the growth and the entry into the jackup market Southeast Asia et cetera could be enough to keep you in a double-digit revenue growth for next year?

As you said, it’s ‘15, so a little bit early to say from a specific double-digit perspective. We’re assessing what the early indications of the budget for the IOCs are and as you're aware, a lot of the CapEx is being refocused to quicker liquidity type projects. And which would be the jack-ups and then which would the land portion of the business, and we're very aware of it and we're embracing that portion of it. But down to your question, it’s just a little bit too early to say, but certainly wouldn't be negative on it. It's all optimistic. I mean growth to this point, yes with single-digit post-IPO but we're well positioned it’s just a matter of time.

Right. And then final one and I'll turn it over. As I know, you had expected or hope to have potentially some growth, maybe going into completions which you have a limited exposure there as well as some growth potentially on the tubular sales and maybe you can talk about that as well?

Sure. From a completion as I mentioned on the last call, our patent portfolio about third of our patents actually are related to completion sector of the business. And just this first half of the year, we’ve actually had 15 new patents globally issued and we also applied for 34 new patents. So reiterating the technology play that we are continuing to develop technology in the sector and the completion side of the business, as the deepwater moves the subsea conduits into the completion phase, we should benefit on the upside there. And the play that we talked about the Middle East was a continuation on extension of a varied play from a large independent there which was a completion business and that was unique technology that I talked about several times. It's completely differentiated zero market technology for installation of the conduit.

Thanks. I'll turn it over.

Thanks Angie.

Thank you. At this time, there are no further questions. I will turn the call back over to Keith Mosing for any closing remarks.

I want to thanks everybody for tuning in the call today. I think John Walker and John Sinders just covered some of the things and we'll talked about in good detail. The thing I want to kind of stress is not only are we trying to be more efficient in our business not only are we trying to expand and do all the things that we try to take care the customer every day. All of the things are going to background, this new patents that John Walker just talked about we are constantly building, getting back to the industry, certainly industry. These are the kind of things that we're not just taking, but we're giving back. And I'm very, very pleased - I'm very pleased with all the management, I'm very pleased with everything we're doing, its been one year, I think we have learned a lot we have become more efficient. And I just want to thank everybody for their support and we're going to do everything we can to continue to grow as much as we can. If you look at it and it’s kind of interesting, we're sitting here with a strong balance sheet, a lot of money in the bank and we're just waiting and searching for opportunities to expand to the M&A side also. So that's very important we are poised we're able to move it’s just when the time is right, we are going to react. And so again I want to thank everybody for their support.

Thank you. And this does conclude today's conference call. You may now disconnect.