Welcome to the Third Quarter 2017 Frank’s International N.V. Earnings Conference Call. My name is Christine and I will be the operator for today’s call. [Operator Instructions] Please note that this conference is being recorded. I will now turn the call over to Blake Holcomb. You may begin.

Thanks, Christine and good morning, everyone and welcome to the Frank’s International conference call to discuss the third quarter 2017 earnings. I am Blake Holcomb, Director of Investor Relations and Commutations. Joining me today on the call are Mike Kearney, Chairman and President and Chief Executive Officer and Kyle McClure, Senior Vice President and Chief Financial Officer. As Mike has served in the Chief Executive role for only a little over a month, we also have B.J. Latiolais, Executive Vice President of Operations and Scott McCurdy, President of Blackhawk Specialty Tools, to provide color and answer operational questions during the Q&A portion of today’s call. Our presentation has been posted on our website and we will refer to it throughout this call. If you would like to view this presentation, please go to the Investors section of our website at franksinternational.com. Before we begin commenting on our Q3 results, there are a few legal items that we would like to cover beginning on Page 3. First, remarks and answers to questions by company representatives on today’s call may refer to or contain forward-looking statements. Such remarks or answers are subject to risks and uncertainties that could cause the actual results to differ materially from those expressed or implied by such statements. Such statements speak only as of today’s date or if different, as of the date specified. The company assumes no responsibility to update any forward-looking statements as of any future date. The company has included in its SEC filings, cautionary language identifying important factors that could cause the 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 accessed on the SEC’s website or on our website at franksinternational.com. There, you may also access both the third quarter earnings press release and a replay of this call. Frank’s International uses its website as a channel for distribution of material company information. Such information is routinely posted and accessible in the Investor Relations section. Please note that any non-GAAP financial measures discussed during this call are defined and reconciled to the most directly comparable GAAP financial measure in the third quarter of 2017 earnings release, which was issued by the company earlier today. I will now turn the call over to Mike for his comments.

Thanks, Blake. Before we get to the quarterly results, I would like you to know about how excited I am to be an employee of Frank’s and helping lead the way to better results in the future. As many of you know, I joined the Board about 3 months after the Frank’s IPO in the second half of 2013. It was not even a year later when high oil prices and rig counts started to plummet. The past few years have been difficult for our industry and our company. In addition to the macro issues of the downturn, Frank’s has had to manage the internal challenges of transitioning from a private to a public company. So while I have been on the Frank’s board for 4 years, I have only been the CEO for 5 weeks. I am fortunate to have worked or been on the board of some great companies in the oil service sector in addition to Frank’s, including Hydro, Core Laboratories and Fairmont Santrol. I have learned a lot by being a part of successful management teams and serving on the boards of successful companies. Of course, I brought those experiences with me to Frank’s. These experiences include not only the good times, but times of challenge as well. But we’re now turning to the future. No more rearview mirror. We’re looking through the windshield, and I see a great future for Frank’s. So why the optimism? From a macro standpoint, I believe we have not only hit bottom as an industry, but we’re starting to move ahead in certain markets. But my real excitement has to do with Frank’s as a company. Let me give you a few examples. First and foremost, Frank’s has great employees. Employees love working at Frank’s and many would never consider…

Thanks Mike. Before I get started on my prepared commentary, I want to address the announcement we made this morning that we are suspending our dividend indefinitely. Our top priority remains to grow the company’s earnings and cash flows. And to do this, we will need capital. The company has suspended the dividend in favor of dedicating our capital resources first to organic growth opportunities and to potential acquisitions. Given the current environment and outlook, we believe that investing in our people, technology, new product offerings and other growth vehicles are the best use of capital at this time. Frank’s has always prided itself on having one of the strongest balance sheets in the industry, and we intend to keep it that way. We are positioning ourselves to deliver sustained earnings and cash flow growth beyond this portion of the cycle and believe suspending the dividend will allow us to do so. Turning to Slide 7, I will discuss some of what we saw during the quarter in the offshore market. Also to note, any market share or financial comparisons in my commentary will be for third quarter 2017 versus second quarter 2017. Overall, market share was mostly flat as we saw offshore rig activity decreases for the first time this year. As expected, the Gulf of Mexico softening continued to weigh on our offshore TRS business. But with the addition of recently awarded work, which is scheduled to start during the fourth quarter and on to 2018, we expect to see meaningful improvement in share and revenue despite a decline in available rigs. In the Middle East, we began to see momentum build as revenue rose 8%. Share gains and improved profitability from more complex shelf work drove the sequential increase. Revenues in Africa fell 6% as some work…

Thanks, Kyle. This week marks the one year anniversary of the closing of the Blackhawk acquisition. We have made significant progress during that time in terms of integrating our offerings and deploying new technology. Our customers are now benefiting from safer operations, improved well integrity and overall project efficiency. Additionally, we have achieved cost synergies as a result of consolidating many of our back-office functions and programs. The award winning SKYHOOK cement line make up tool continues to have success offshore, and we’re in the process of allocating capital to build more units to satisfy demand. Our new Blackhawk products, set for commercialization by year end, will fit nicely into our growing portfolio. The Blackhawk and TRS teams are collaborating to find new opportunities, which will increase our revenue per rig. We are starting to see some synergistic revenue opportunities in the Gulf of Mexico in both U.S. and Mexican waters as well as the U.S. onshore market. We are making good progress in modifying our equipment to meet the customer specifications in new international markets in 2018 and have already seen some upcoming work materialize in Canada, Africa and the Middle East. With diligent effort, we will be able to fully realize the international opportunities with our Blackhawk product offering. The combination of the Frank’s and Blackhawk products and services will provide a solid platform for growth in the coming years. Our mission is to provide our customers with tailored solutions and technology that add value to their projects. This will help us deepen relationships with current customers and open the door to new customers around the globe. Let me conclude our prepared remarks on Slide 13 by giving some commentary on the market as we head toward the end of 2017. First, we expect the U.S. Gulf of Mexico to see improvement in revenue and share over the next few quarters as previously announced customer projects ramp up. Second, the U.S. onshore market remains an area of growth despite the recent pullback in the rig count and we expect this to continue, albeit at a slower pace in Q4. International revenue growth is being hindered by pricing impacts and work being pushed into 2018. Lastly, we believe we are on track to meet our goal of free cash flow breakeven for 2017. Like many of our peers, we are monitoring our customers’ exploration and production plans for 2018. At this time, it’s difficult for us to provide much color on what to expect for next year. As we begin to develop and deploy our strategic initiatives, we will have better visibility as to what we can expect in 2018. In due course, we will offer more specific direction on our outlook. We will now open up the call for questions.

Thank you. [Operator Instructions] Our first question comes from Ian MacPherson from Simmons. Please go ahead.

Thanks. Good morning. Mike, I appreciate you kind of jumping in here with very little time on your belt and in your seat and look forward to hearing more with regard to your vision and targets in the coming quarters. One thing that still jumps out to me is that through the course of the downturn, there has been – it’s not as if there has not been concerted efforts at cost reductions, there has been. But over the past 7 quarters, 2016 and this year, year-to-date, Frank’s SG&A expense is running at about 42% to 43% of revenues and your peers are in the same cycle but they are in 10% to 15%. You mentioned Core Labs, anyone’s ideal benchmark for performance they are at 7% of revenues for G&A. And that’s an obvious area for analysts to look at and say, what more can Frank’s do with regard to bridging the gap with margins irrespective of how much growth, top line growth ‘18 may or may not bring? Is that something that you plan to look at as an area of target setting when we convene next time?

Yes, yes. Ian, that’s a great question. One of the things I was trying to differentiate in terms of Core Laboratories, having been on the board and knowing their numbers quite well. They are not organized exactly like we are because they have some very unique and distinct products. So they are able to push engineering, QHSE and things like that, down into the division. So there is a little bit of a mismatch in terms of how we present our financials now versus how say at Core Laboratories or some other companies do that. So we’ve got things, accounting-wise, in corporate that we really need to push into the operating divisions, not only from an accounting and accountability standpoint, but in some cases, from an actual management and reporting structure standpoint. But I will let Kyle pick up on that.

Yes. So, Ian, in that line item, SG&A, you have got multitudes of different departments. As you think about organizationally, we are kind of a mix of a matrix organization on one hand then we have got sort of a stand-alone business for Blackhawk. And so historically, this SG&A number, which was sort of newly published this year, did kind of push more costs up into cost of goods. It’s just a combination of odds and ends that really aren’t truly just sort of corporate. We have done the sort of the pro forma at the back of the envelope what is truly corporate. And I think we are pretty in line with what you – the peers you had mentioned. We have got a lot of work internally to do, as kind as Mike sort of mentioned in his accountability discussion to get those costs under the right ownership, so we can really drive the accountability there. We have done a lot of cost reductions over the last couple of years as everyone has done. There is – is there room for more? As Mike and I go through this here and sort of splitting out the P&Ls and getting more accountability, we’ll see. But right now, I think if you’re looking at just that number, it’s a little bit misleading.

Yes. But to answer your question directly, yes, we need to be more efficient, which will reduce our cost. I mean, our cost structure is still too high, no doubt about it. And as we go through these strategic initiatives, which will be very specific action-oriented programs with leaders that have accountability, we’ll make improvements. So I’m all into accountability, specificity, people being accountable, time lines, deliverables. So we’ll get there. But it’s just trying to be much more specific in our goal setting and our follow up.

Yes, understood. Well, thanks for that description. Kyle, if I can get one more follow-up for you. I think you give in your guidance there towards the end you flagged pricing and deferrals enduring your international outlook near-term. I presume that means fourth quarter revenue is probably expected to be down sequentially. If you could maybe put any more color around that? And then any help in thinking about what the margin impact could be as well for international in Q4?

You bet. You bet, Ian. So internationally, sort of a mixed bag going into Q4, we’ve had a couple of large customers just sort of reset pricing on us in various parts of the world that will likely push both revenues and margins down into Q4. And I would think, just sort of on a sequential basis, probably going to mid single-digit range, somewhere in there and then the margins will likely kind of come down in that like-for-like basis there.

That’s helpful. Hey, thank you guys.

Thanks, Ian.

Thank you.

Thank you. Our next question comes from Michael LaMotte from Guggenheim. Please go ahead.

Hey, guys. It’s Michael LaMotte at Guggenheim. I just want to make sure I understand what’s going on at Blackhawk. It sounds like the revenue decline in the third quarter was really more just noise, project lumpiness that will be made up in Q4. I just want to make sure that there is really nothing more going on there in terms of sales or product?

Sure. Michael, this is Scott McCurdy.

Scott has got a little bit of a sinus problem going on, so excuse the hoarseness.

Sorry, Scott.

No worries. We have – somewhat similar to the Tubular’s business, we have some large product sales in our business that can cause some lumpiness depending on when they are awarded and when they are delivered. And so we had just kind of low quarter in the third quarter for deliveries. And we have already got some backlog to help us have visibility to that increasing in the fourth quarter. We also did have a number of rigs that went to completion, had some schedule changes on land and some contracts that rolled off while some others rolled on in international markets. So I think Kyle’s statement is correct. There is not a larger issue there. It’s just the combination of issues that kind of hit us in the quarter.

Okay. And it sounds like the comments on the margin side being from cost-cutting, is Q3 margin a good run-rate for that business to think about now or there are pricing pressures as you are seeing in some of the services lines that we should think about?

I would say there is– I mean there is continued pricing pressures for sure, but I think that our margins will largely be determined by, obviously, revenue levels, but then the split of current rentals versus products, our business is a little more product-centric and so where we have been running in currently high teens, low 20s, I think that will continue and just be a little bit dependent on what the mix is for that quarter.

Okay, good enough. Kyle, if I could shoot one quickly for you. The tax benefit you mentioned in Latin America, what was the margin impact of that on the International segment?

I think it was a $2 million impact during the quarter. I don’t have the margin number off the top of my head, but I think it was roughly $2 million on that line.

Okay, okay. And then Mike, I am curious you worked for some pretty large companies globally and we have seen some of the bigger ones shift capital away from larger, longer cycle projects internationally to U.S. onshore. I am wondering with the brand that Frank’s has globally, are you seeing that business mix shift or are you sort of going with the same customers as they move their capital on to U.S. onshore?

Yes. I think basically, that’s the strategy. You listen to some of the conference calls of some of the both operators and service companies. Their people tend to go where the money is and there is a big wallet for the land business. So I think people, companies and managements are trying to see what they can harvest in the land business and we are certainly doing the same thing. We are trying to get better and more efficient and really push on the land business. We have got some good opportunities there. And as we look at new products and services, we are definitely I think looking a little bit more towards the land right now than the offshore, because that’s where the action is.

And in terms of getting the margins up in the onshore business, is that just going to be an issue of volume or do we really need pricing to come back in 2018?

I will let B.J. take a crack at that and then I may offer a comment. Go ahead, B.J.

Yes, it’s a mixture of both, but the pricing is definitely coming back ever so slightly and that’s more of a mix of better technologies being accepted by the clients.

As opposed to both price. Okay thanks guys. I appreciate the time. I will turn it back.

Thank you. [Operator Instructions] Our next question comes from David Anderson from Barclays. Please go ahead.

Thanks. Good morning. So Mike, I understand that you are disappointed at Frank’s share price, but you are obviously highly levered offshore, so it’s a big part of it, but you are also the third CEO here in the last 12 months. So that clearly doesn’t help the story either. So perhaps you could address the change that happened here. My understanding is that Doug’s strategic vision didn’t match up with the board. You have been on the board for a while. You were part of this decision. So perhaps, you could just start with talking about that disconnect like what happened there that necessitated this change?

That’s a good question. We are certainly not going to get into a lot of details on that, but I think what Doug was – first of all, I have got to say, Douglas is really smart guy. He knows the industry very well, great family guy. He has two boys. So we wish him well. But culturally, it just wasn’t a great fit. And I really don’t want to say anything other than that, but there is no salacious back story here. It’s just it wasn’t a good fit. So the board took action and asked me to step in. And I agreed to do that. So as I said, we wish Douglas well, but I want to focus on the future. And I am just really excited about the opportunities I see.

So, you would kind of started – talked about your new strategic focus. Obviously, this is sort of the beginnings of something broader that you try and put it. I was just noting that. The second thing you had mentioned there was being a technology leader. How does onshore really fit in there, because onshore tubular running services seems highly commoditized. You talked about some pricing picking up there but – and maybe some technology. I don’t quite see it out there. You just have neighbors now bought – buy Tesco, they are now getting it to integrate that into their drilling business. Just trying to understand a little bit better how North America fits in that technology element there of your strategy?

Yes, I will let both B.J. and Scott offer their opinions that if I have something else to add, I’ll do that. So B.J., you want to talk a little bit about the commoditization of U.S.?

Right. So in some of your comments, the TRS section of your comments are correct. However, Frank’s is not just a TRS company. We have drilling tools. We have other technologies that allow us to be on the rigs 24/7. You will be seeing more of those technologies rolled out in the near future. So we are not only going to be in the TRS section of the land business, we are going to be on the drilling side, the completion side, so from what I would like to call, project 24/7, so more technologies will be rolled out from Frank’s engineering teams that will allow us to cover a much broader sector of the market than just TRS.

Yes. And Scott can add that we are looking at some of the Blackhawk tools in terms of being able to size those and make them attractive for a land application.

I think that’s right. We have a pretty strong land business as well. And I think there are – well, the market is tough. And there are still opportunities if you can differentiate with quality and safety and better reliability on products. And that’s why I think new technology can still play a factor and help margins in that market.

Okay, thank you.

Sure.

Thank you. Our next question comes from Chase Mulvehill from Wolfe Research. Please go ahead.

Hey, good morning.

Good morning, Chase.

I guess first I wanted to ask about kind of the competitive landscape on the international side. You obviously highlighted some pricing, some of these contracts rollover. One of your larger competitors highlighted some real nice kind of share gains in their press release and in their conference call. So maybe if you could talk to that little bit? And possibly, if you’re at a disadvantage when you think about your competitors bundling and packaging other services together? And if you see that happening out in the international market, what services are they packaging together? I mean, I know one of your competitors is talking about MTD, but anything else?

Yes. Well, our competitors have bundling capabilities but so do we. We also align ourselves very closely with a lot of the IPM providers. We also work with other major service providers to do bundling services to compete in these international markets. We also, as our competitors, have made significant share gains in underrepresented markets since 2017. Now we are consolidating those gains into making sure we targeted at these gains with the right technologies and be able to up-sell our technologies into the more complex wells and shelf and more complex land wells.

Okay, alright. Moving on to the Gulf of Mexico, I don’t know if you all could provide us kind of a line of sight in the Gulf of Mexico relative to 4Q in 2018. I know you said that you expect it to grow. And I think if I remember correctly, there were 6 new rigs that were coming into the Gulf of Mexico that you were going to be on. So maybe just kind of provide some color around top line and margin as we get into 4Q and into 2018?

Yes. So I will speak – it’s not 6 new rigs. It’s 6 rigs we took from one of our competitors and gained market share. The way these wells work is as the well finishes, we go on and move on to the rig. We have just moved on to our first one with – and as the wells get completed, we will move on to more and more of the rigs through Q4 and in the beginning of Q1 of ‘18. We should be fully mobilized by March of ‘18. I’ll let Kyle comment on the margins.

Yes, so both top line, bottom line. I think we will see some increase sequentially going into Q4 on top line just depending on rig schedules when things sort of come online during the quarter. Bottom line, we will kind of see that a little bit flattish in the quarter as well for that particular market as pricing there is – lot of the existing contracts we have, have been re-priced. Pricing in that market is so competitive right now that margin there, albeit still at the field level, is still pretty decent, is extremely challenged right now. So we will likely start to see the top line pick up, the bottom line is going to be a little bit slower to go with it.

Okay. And those 6 new incremental rigs, was Blackhawk on those rigs?

Blackhawk is on one of those rigs right now, but this award did not include the Blackhawk services.

Okay. That I guess it’s obviously an opportunity as we get into 2018 and ‘19 on these rigs. Okay, I will turn it back over. Thank you.

Thanks.

Thank you. Our next question comes from Igor Levi from Morgan Stanley. Please go ahead.

Good morning.

Good morning.

Could you talk a little bit more about tendering activity and how competitive are the bids today versus the first say half of the year?

Yes. We are not seeing much difference from the bids today to the first half of the year of ‘17. We are seeing it’s pretty much stabilizing though. We are seeing some stabilization in the rates in the current offerings. But depending on what markets you are going into, obviously, depends on the complexity and the competitions’ willingness to either lower prices or sustain current price levels.

And where would you say current pricing is relative to prior peak levels?

Oh gosh. Prior peak levels, we are probably down a third /3 from prior peak, if not a little bit more than that and it’s – B.J. probably has a little bit more insight to that, but I would just say it’s roughly around a third.

Okay, great. Thanks. I will turn it over.

Thank you. Our next question comes from Sean Meakim from JPMorgan. Please go ahead.

Thanks. Good morning. I was hoping just to maybe clarify a little bit more on the pricing dynamics. So, you were saying – I think earlier you referenced seeing improvement ever so slightly. Was that specific to U.S. onshore or offshore? And I guess the broader question is kind of following up on some of the other lines of thinking is, can you give us a sense of how much of a delta you would say there is in terms of your average pricing versus spot rates and how much of your fleet would you say still has to rollover to spot rates?

That’s a lot of – I guess the easiest answer here is that by offering the quality service and to selecting the type of clients that we are working for mainly on the U.S. Land operations and being more specific as far as the complexity of the wells we are currently targeting, we are able to offer more of our complex technologies and more of our offerings that give a better return on our capital invested.

So the onshore – so the question on ever so slight improvement in pricing is really an onshore specific, a U.S. onshore specific comment, is that what you saying?

Yes.

And then through your technology, you can definitely up-sell and if we get – on that better pricing. Okay, so that makes sense. That’s totally fair. I guess so then thinking about the offshore fleet then, maybe my other question was better directed there. Could you give us a sense of the gap between the average pricing you are experiencing now for your average crew on a rig versus spot rates and how much of your fleet still has to rollover to spot?

Yes. It’s not so much the rollover of the fleet as a lot of our legacy contracts are starting to roll off and we are seeing some of the newer contract pricing take effect. Obviously, we are adjusting with the markets as is everyone else with crew levels and what have you and that’s an ongoing exercise that we are currently offering technologies to either reduce crew levels or offer higher capacity – or capabilities of the crew, I should say.

Yes. So the bottom line is, as these contracts reset, make no mistake about it, the pricing is tougher. And so with tools like the VersaFlo and other tools, we’re actually trying to get our margin, keep it at least the same, if not increase, even in sort of a macro pricing decline. So we’re running really fast to try to keep the margins where they are in spite of offshore some pricing softness. So that’s the name of the game we are pursuing.

Okay. Thank you for clarifying. And I guess maybe for Kyle, just a question on the dividend suspension, I think is there anything else we can read into the decision with respect to progress on the M&A front or anything else in terms of capital allocation or is it more a function of just trying to align yourself with where you see free cash near term?

Yes. I think it’s more the second one there, Sean, as we think about. We want to be in a position long-term to obviously take advantage of anything in the market M&A-related. But where we sit right now, we have a $70 million a year burn on the dividend and we are breakeven on free cash flow this year, right. So, we look at it like, hey, we have still got a great balance sheet, let’s hang on to it. And to the extent opportunities come along, we will deploy it as we see fit, but it’s nothing more than hey, we have got a $70 million a year burn on dividend. We can’t afford that forever. And as we sort of wind our way out of the cycle here, we want to have the cash to support the growth that we’re going to be looking at. So as I always hear, it’s not the downturn that gets you, it’s the upswing that gets you because you don’t have the CapEx and the working capital to fund.

And we are looking at some specific transactions right now. I mean, there is always deals in the market. There is three or four we have on our plate right now. I don’t want to give any anticipation of an imminent deal, but we need to move away from just a TRS company. In addition to add on, all those other tools that are related to TRS, we’ve got Blackhawk. Blackhawk buys some things out that are included in packages. Maybe we can either develop some of those products or make some targeted fill-in acquisitions. So I am excited about the opportunity to deploy capital and some of that will be internal for organic growth, but clearly, we are going to look outside as well.

Great. That was my feedback.

Thank you. Our next question comes from Kurt Hallead from RBC. Please go ahead.

Hey, good morning or good afternoon and I guess going on somewhere in between those things. Some familiar names out there, Scott McCurdy one of them, how are you doing, Scott?

Great, Kurt. Nice to hear your voice again.

I remember Kurt from the Hydro IPO and all the trouble he gave me.

Indeed, Mike, I was not overlooking you, Mike, by any stretch.

No, I know.

No doubt. Well, look, I think obviously any transition it’s going to come with some challenges for sure in this dynamic, you are coming off a cycle bottom, you have identified what your priorities are I think pretty clearly. I guess Mike, in your view or your sense when do you think at the earliest we can start seeing the benefits of this strategy that you outlined? And just say in a static market environment, when can some of the internal dynamics that you are driving, when do you think we will start to see those?

We are starting to define different specific projects right now. I certainly wouldn’t make any promises for Q4, but I am hoping we can find some things that we can accomplish in the first quarter that will start to have some minor impact. And I don’t want to call Frank’s a turnaround story because the whole market’s been hit very hard. And I also don’t want to put a time line out there that frightens people. But when I think of a turnaround and Frank’s isn’t a turnaround, when I think of implementing things that can really take a company to peak performance, it’s roughly a 2-year time period. So I don’t want to scare everybody by saying, gee, it’s going to be 2020 or 2019 before we see improvements. They will be starting immediately, but there is a lot of things we can do. One of the things Kyle and I have talked about is do we need a really strong ERP system worldwide where we can really manage our assets very, very tightly. If we have too many assets in one region and not enough in another, the last thing we would want to do is spend capital to buy or build tools. So by having a world class ERP system, clearly that would help us. The question is what’s the cost benefit? So there is a lot of things out there where you don’t flip a switch on a new ERP system. That’s probably a couple of years of scoping out what you want, buying it, tuning it and implementing it. So, there will be some projects that are longer term and more structural and there will be other things that are much quicker. I know that didn’t give you a lot of clarity, but I feel a real sense of urgency and we have – I have been to this rodeo before and been involved in helping improve company performance. And overall, from kind of where you start to where you end up, can be 2-year horizon, but I would expect continuous improvement all along the way and the cost structure. And I am just so big on accountability, having the operating managers be in control of their own destiny and we are not there yet, but we can get there, absolutely no reason why we can’t get there. And I think those managers are going to want the accountability. They are going to want the resources. They are going to want the control. And then they will be held accountable. So that will make a huge difference. It’s just throughout the company. I wouldn’t call it a lot of low-hanging fruit, but a lot of projects where I just see real opportunity to fine tune the organization.

Okay, that’s fair enough. You guys did provide some directional guide into your – for fourth quarter. It sounds like the only area where you could have kind of a down financial performance would be in the international market, indications of a strong rebound in tubular, increase in Land and U.S. offshore on your services side of the business and then Blackhawk. So I don’t know if you guys could maybe – I know if you – it’s always dangerous as I think most of you know to leave people like me to my own devices, let my imagination run wild. But what kind of magnitude do you think on aggregate revenue growth that you are looking at in the fourth quarter? Is it kind of 5% to 10% range? Is that how things should shake out, you think?

That’s what I would probably tell you, somewhere in that range there the sort of mid single to high single-digit range. 5% to 10% is probably a good bracket. You have Blackhawk looking to go up in the quarter, Tubulars as well as U.S. Services and International is the only one that we see some a little bit of headwinds there and the re-pricing need some work. I would tell you 5% to 10% is probably a good place to be.

And then more couple of 100 basis point improvement on EBITDA margins? Does that sound about directionally right?

Well, I wouldn’t get in – the EBITDA margin component for the company right now – I mean, it is a little bit more art than science, but honestly, I mean, it’s as simple as you get a $1 million is a lot of money right now and it moves the EBITDA margins insanely. So I would be remiss to kind of give you a EBITDA margin guidance for the quarter.

And you have the Tubular business, which is fairly lower margin, if we hit that, that’s going to push down the margin, but the gross profit dollars or the margin dollars could go up.

Yes, the mix of this business, if you think about it throughout this year, right as more Blackhawk comes online, as more U.S. Land comes online, is going to be a lower margin profile here in the near-term as deepwater continues to kind of be here near the bottom. So, giving you some EBITDA margin guidance for the quarter I would be a little bit remiss to, but I’d just say that the businesses that are growing the most in the quarter are probably the lower margin profile businesses.

Alright. I appreciate your commentary. Thanks for that. And I appreciate the commentary as well on priorities of cash and emphasizing growth and then the dynamics between CapEx and M&A you are coming still along a bottom on the market here. We have heard from some other companies over the course of this earnings reporting period that kind of the bid/ask spreads are kind of coming down a bit and it looks like we could be getting closer to a buyers’ market than the sellers’ market. When you think about the opportunity set, would you weight that opportunity set more toward acquisition or more toward internal growth right now?

I would have to say both. We can’t predict exactly what we’re going see around the corner in terms of a possible way to grow the business from an acquisition standpoint. As I said, we are looking at a few interesting things. It’s just I don’t want tie ourselves up with promises that we’ll be 75-25 or 50-50, but we are looking at everything. We have some clear opportunities inside the company to invest capital and grow organically, whether it’s the VersaFlo or whether it’s drill pipe, torque reduction tools, whether it’s Blackhawk modifying some of its tools to meet customer requirements internationally. We have got a lot of really exciting things going on. I mean, kind of the way I think of it is, Frank’s has been sort of a proxy for the offshore rig count. And I don’t want us to just – our performance to float up and down with the offshore rig count. I want us to grow broadly and really be able to create organic and inorganic growth sort of despite what the rig count or the cycle is doing. So that’s kind of my ambition.

Alright. That’s awesome. I appreciate it. Thanks Mike.

Sure. Nice talking to you again.

You too, Mike.

Thank you. I will now turn the call back over to Mike Kearney for closing comments.

Okay. Well, thanks a lot everyone. As I mentioned, I am extremely excited about being at Frank’s. I see great opportunity as we fill in the product lines and roll Blackhawk out internationally and other things that fit into what we are doing. So I appreciate everyone’s interest. Stay tuned for news in the future as we have subsequent calls and thanks for listening. We appreciate it.

Thank you. Ladies and gentlemen, this concludes today’s conference. Thank you for participating. You may now disconnect.