Forum Energy (FET) 3 Nov 232023 Q3 Earnings call transcript

Good morning, ladies and gentlemen, and welcome to the Forum Energy Technologies Third Quarter 2023 Earnings Conference Call. My name is Gigi, and I'll be your coordinator for today's call. [Operator's Instructions]A link with instructions can be found on the company's Investor Relations website under the Events section. At this time, all background noise. This conference call is being recorded for replay purposes and will be available on the company's website. the to turn of Kukla, now Relations. Investor will conference Rob over Director I sir. proceed, Please

on our Gigi. context you, our Quarter With on Neal Financial other Officer; including federal Conference all Third information website. and our protections our financial Williams, filings, of XXXX affect Call. remarks Chief Chief announcement. slides and Variperm Please Lux, law. note are safe Yesterday, SEC and FET's are by contain Lyle releases non-GAAP the our that on may than we today historical those in earnings are Thank me our release acquisition statements relating the Variperm acquisition that business, announced release presentation our morning, Variperm to and are Earnings issued afforded Good that welcome available measures. we Officer. earnings and today Energy the Management's acquisition of relying Executive also factors considered be available information. include website. FET's President Listeners These to cautioned are FET's our disclosed should Services. may in press Investor harbor Both remarks

measures, and these of refer reconciliation earnings may release a For our the to announcement. acquisition Variperm you

the to as and to Neal. XXXX trailing will our of to call, second relating all over financial a EBITDA. today's otherwise months quarter turn third statements to refer unless on XXXX. noted, finally, FET And quarter During September references statements I combined EBITDA related XX to our adjusted to And now comparative FET's results, Verifirm stand-alone XX, basis, call XXXX.

Thank you, everyone. good Rob, and morning,

Variperm pleased welcome release, the press announce acquisition. Energy to FET yesterday's in family. the the I Variperm to want noted are Services we extremely to employees As

recognize forward credit our are following working we strong together in to lenders. also you look and to have facility from syndicate join closing excited of January. want the team I support to our We received

to like on acquisition, results discussing outlook. third I quarter XXXX Before spend would and FET's minutes a transformative our few

declining During the expectations was quarter, earnings soft counter to U.S. market at count industries call. of our conditions the the time our with XX%. This rig continued, and

We response paused well activity-based This $XX equipment softening pressure capital completion decline in intervention led who decline orders pumping and our million a saw customers to to in also activity. demand revenue rapid product sequential our stimulation in line. a from

which revenues line, a this Excluding the would compared significantly been flat quarter. in as FET's rate X%, count, product higher was up have to global growth effectively rig

the footprint. increase was revenue experienced demonstrating down, our of during quarter, we While global the benefit an in bookings

and sales XXX% key positioning off. efforts have working actively We paying supported book-to-bill growth, teams their another ratio. with customers, a been backlog Our quarter marketing with FET partner, strong a had of are as and

with executed I pleased fact, In XXX%. book-to-bill ratio how posted segments this X all Overall, managed greater and market well through am our quarter teams than a headwinds.

us We and revenues, have and declining general, margins revenue successfully have not pricing declined firm remained in gross mostly held our EBITDA we though did which States. a efforts cash free million In EBITDA through and this increased well combination These Also, cost flow expenses volume. for of quarter. savings $XX in to guidance managed our initiatives. steady. activity United profit slightly, grown Even allowed generate and we offset sacrifice international utilization range the within deliver

past encouraging. been The U.S. in modest the count increase few Looking have rig weeks fourth is indications seen may finally that ahead the have the to are quarter, bottomed.

modestly with it customers to feedback flat from remain counts be in we is the forecasting are our increasing. based second and However, that to cash environment And fleet levels. to FET we third EBITDA together, the free for due million anticipate revenue below be flow Putting quarter. a we expect frac to to rig remain million of expect delivering Therefore, third holiday in quarter $XX the slowdown counts are confident rig to of we $XX anticipate they exhaustion. activity operating compared half on and quarter. similar third high Internationally, to average This we budget will the adjusted XXXX.

acquisition margins accretive metrics. FET, management the the of profitability our similar part increases financial liquidity. of highly few Our products to back be business generate is above leverage the Variperm, many checks and a elevates transaction flow. perspective, to the and product and over demonstrates the This net significant our and strategic This opportunities. we to strong increase and cash continuation strong boxes. common pursue for the logic companies would has From and FET this acquisition technologies company previously highly watching our Also, flexibility and the portfolio. It complement is equity to a valuation cash to million to is ability cash allows We've outlined closely and has value combined free a been cash artificial $XXX what years. improves team is scale to an few us value leads recently meaningfully accretive, acquisition financing our financial experienced, create This Putting of earnings the EBITDA for maintain and important our created investment of together free strategic flow If us criteria, our and expand flow gives the XX%. of metrics to all as have peers a and for shareholders. expected increases transform And companies cash is past this conservative The lift yield mix profile. acquisition industrial to FET's consideration the FET EBITDA differentiated us X a transaction's years.

entered notes in XXXX unfamiliar $XXX pandemic existential total story, of with those debt. senior refinanced of the time the the with For We a our during around risk August million industry. COVID for we FET in

on and business, we track our leverage sales drove third a conversion, combination in are XXXX streamlined quarter. these we to divested reduced price and mandatory debt share our base costs flow at nearly XXX% In X.Xx EBITDA EBITDA us net The in assets on achieve helped of half in EBITDA fixed debt-to-equity cash end the eliminated generation, addition, million $XX long-term by to grow the we steps of significant and XXXX, noncore of our XXXX. our free outstanding conversion of through X.Xx asset from from

the of More are manufacturing under production. XXX shareholder turn the are products an manufacturer acquisition control path highly techniques importantly, we for a for has using these total and allowed expands strategic we adoption development Together, Lyle offshore actions long-term and with as have we and for detail financial family. customized patents on market. engineered going and us prospects, flexibility a for a more international great products within I'm artificial employees. products to and product operators engineered SET. a global value, cap that exciting formidable call increased lift FET's accretive through markets and relationships, to FET's are from energy Variperm over With some XX for upside think results. proprietary leading are X cases, the clear and including heavy locations large Canada combination addressable today. and just FET's to where of distribution of greater market this They're and They flow primary is acquisitions, base generate we Variperm, maintained and about This manufacturer customer oil customer Also, sand acquiring over has have in the longer-term growth years. highly of and protected manufacturing is network. Variperm solutions

Neal. morning, everyone. Thank Good you,

acquisition. very mentioned, about we are Variperm's As excited the Neal

acquire some of hit FET stock the agreements for to Let me the total week, details This and Variperm of transaction financial equity and million X consideration shares of the highlights. of we $XXX million signed of cash. of

of consideration months to of or X.Xx this $XXX roughly signing, of EBITDA. XX Variperm's total million As equated trailing

expect give other review, Canadian not in transaction or close We and of services. Variperm overlapping context regulatory do the satisfaction conditions. and January customary FET approval the to To provide products closing to regulatory following

balances obligations been In delays, with and of a amount the and Variperm addition, credit future have the company through Cash sources leverage the to an both and and we term financing manage arrangement Prior loan. $XX explore borrowing term facility will for closing of organic combined acquisition, fund under of the seller will from liquidity cash closing from and million alternative on-hand loan. leave to be conservative million solar adequate funding a avoid of $XX consideration transaction secured funded our to growth. to cash ABL all the

million liquidity is maturity based Following permit loan. on and roughly expansion closing of amendment advantageous expect increase acquisition, to with closing million increase and I'm revolver to credit facility base seller allows allow aggregate FET to, the of with pleased million. among $XXX ABL our the amend $XXX to financing the to is the things, extend in acquisition, agreed XXXX, finalized, and from conditioned upon and $XXX Variperm $XX arrangement, alternative without the September to capital. $XX the million X.Xx borrowing revolving conjunction by between regard FET of to date term to including the other to the million and our working us that acquisition. be Once EBITDA, commitments announce net The the lenders Variperm we any leverage

the quarter Between amendment, lender. years seeking XX% the consideration, retire a of additional our and arrangements. loan the we covered that appropriate welcome continued the confidently be America We cash the include We X% and banks facility with and in Neal of FET, liquidity notes balance traditional our which structured term we seller to Variperm The longer a group Goldman interest X has and between facility in the industrial and of the position. logic we maturity Variperm. and to loan This at without funding. and structure to mature without the already escalation sheet time our penalty. is about. seller puts seller Fargo, of as than we to and acquisition is leverage, fit external believe to within the visibility first able are existing thankful expect who debt move in our senior mix the joined are remaining support JPMorgan, us our loan anniversary The XXXX subject forward have rate the excited term loan, third prepayable with Amegy strong for of to with their a Bank utilize credit pleased our we secured credit we for stock banking These after Wells growth. loan. a If of sell any Sachs, would has any bridge terms are

Let on transaction FET. for of XX a before third results. bit shifting the months X.Xx me The meaningful at the transaction's merits to accretion quarter financial trailing valuation FET's more provides provide color EBITDA

company's the creates combination free basis, significant we'll Net $XXX complete flow closing, million. net interest, million. after EBITDA, will combined expect business accounting with to revenue the noteworthy. income, to a cash EBITDA to and to increased pro more $XXX Then importantly, increases flow. increases cash and free be accurate margins More purchase million a our margin a increases approximation On forma EBITDA improved we EBITDA to analysis. of XX%. strong have of which incremental $XX Shortly we combined

provide me Let per directionality metrics. share our to

flow reason just While increase net by why XX%, improves this about cash excited improvement substantially. so and and increases transaction. XX% improved the share significant, will income is will EBITDA be of another these under per share in all metrics count we're XX%. The Free

third Sequentially, $X by decreased million. our to turning FET quarter consolidated results. revenue Now

by was driven stimulation by our revenues customers project sales the million. and of the and gas oil this in shipments by and our fleets, In slowed line of stimulation-related for activity mix the tailwind, Middle the U.S. where X for add detailed drove ratio through EBITDA XX%, for and non-U.S. development. to products Most tubing earlier, had offset Revenue basis in roughly from quarter, drilling U.S., to increase We and down decline cost over for ends, continued rapid region, or the upgrade XXX% book-to-bill increased control in power in Perry-XLX growth significant and as total U.S. saw the In customers increased.A margins, farm conditions. declined and all capacity well international bottom, Despite of pumping purchases with decline increases million EBITDA East Segment XX% downhole in for revenue. intervention revenues variable lines international softer offshore quarter pressure downhole by total manifold EBITDA revenue. Completions market actions quarter, these technology booked consumable trailers, third had world-class as activity nearly Similar and took reductions. revenue EBITDA and intervention products, $X product increase million dramatic approximately favorable reduced costs. and family. FET's completion $X for sequentially revenue and remain by As management fell U.S. only the impacted action excited in Neal demand and outside yet in growth last revenue, Forum delayed quarter, slowed revenues revenue international where and revenue idle to the Subsea as and wind for our activity product The growth that of an international million process opportunities $XX segment teams the strong to nearly as market a realizing production accounted cost equipment the they revenues middle systems. outlook subsea $XX XX%, which equipment, more our products by a product decrease strengthening segment increased such increased order revenues revenue aforementioned and while our of benefiting hoses as ROV capital expenses supported Drilling $XXX,XXX. radiators. completions our were by we an XX we U.S. support coiled future recognized points. about the headcount Highlighting demand drilling were of conditions XX%. and stimulation declined

quarter. as the Tubing spot bright costs Global was and managed business Revenues shipments the the profit Our in in team the international on the jumped business favorably provided strong drop-through for quarter.

XXX%, Our was than segment slightly ratio product we for activity-based lines. these higher would expect book-to-bill

quarter, improve sequentially continue line. reaching and ratio was improvement product basis, margins and an Our consistent improve, a a production driven to and XXX%, Revenue ago. to from double for on orders provide this Segment nearly continues valve segment results. book-to-bill EBITDA by year-over-year X.X% in solutions increased year up our

share forecast. forward. going with our discussed fourth you let Now how we quarter me markets the Neal see

long-term respectively. third quarter revenue EBITDA be is estimate and million expected ranges driven lower our forecast the million quarter million, year call, EBITDA and fourth This quarters. the U.S. in solves increasing market with for this XXXX in our than remain million of a as forecast, shortfall in the With world in full and $XX is to and provided is year Our $XX $XXX in $XX third outlook million a both last softer between fourth million. by line activity results full $XX We supply. with to quarter's confident structural energy $XXX to

the Here the generally we are costs be a few details for $X modeling amortization quarter, roughly purposes. expense fourth line with $X and and depreciation of third interest expense In anticipate be million. million in to quarter, corporate to

remain XXXX primarily taxes million. million, For to year, full Capital to around income are expected due expected cash Canadian to $X are the expenditures for be below income. $XX

Turning a free driven to strong of cash sheet. from on net working capital generated collections. by the $XX million, We decrease balance cash flow in

drive conditions. tightening material our chain working achieve to our timing. continue match in customers are raw And our teams capital down with softness of working reducing to the supply flow to and appropriate market, inbound more collection market U.S. the Given we the by

facility with $XXX in million pleased availability for free cash our and quarter the on in line under of our are forecast. of half turnaround revolving liquidity flow credit We in the We million. second million $XX hand of ended with year, $XXX with the of cash the total

strong was a and net leverage balance corresponding our of liquidity fund well of X.Xx. As with FET with ample ratio September net operations sheet. to debt positioned XX, $XX remains million, a

the call to remarks. back Neal turn me Let closing for

We Variperm transformational. Lyle. you, believe is the acquisition Thank

in products change remain highly of we competitive engineered not have we who manufacturer differentiated a markets where operating are. and advantages. it However, niche We does

customers' company We and required world, environmentally revenue. utilized are grow energy continue a the and are global will making solutions believe friendly. around We safer, whose our operations the for supply it FET to efficient more to investment demand

existing and the than business even committed model. market while please Adding introduction a our like We the the business have grow first faster can Gigi, and compelling capital-light question. new a story long-term through take new for products, makes Variperm shareholders of we the more to ones. FET tailwind, great remaining

question Thank line John Our Partners. Daniel Instructions] from Energy first comes the of you.[Operator's Daniel from

not same a transaction. I'm curious is same you're trying But table, Does the I selling be person. to but know you a overlap I you're with the to opportunity the necessarily an there's the more per bringing will, mentioned just I'm not within base might product make the get you in like where se person sense? where to there customer mean to that bundling the concept, buyer. if

for think our there's I great product a Yes, John. Multilift opportunity does, That family.

the think we think generally, customers. I utilized, there's being on production a that's products with you well. are Variperm's the think, success an about As to or their ESP great great cross-sell wells Variperm's utilize involved that where opportunity And

We from production that segment distribution the of partners, Variperm sell our of same sells on customers end also many share our there to some -- the users where of the are through we other parts today.

but have integrate think that a I as to and get So some, we great expand think even to better. opportunity this know we each I is other

Right.

the Okay. But designs the in question. providers are in right on next talk everybody just laterals U.S. pretty any have demand to longer? of ask you What the going know itself. land for so distance cool as saw they've seeing my the wells. if terms wants the -- terms coiled changes in international, don't tubing, But tubing now side, of you guys the on impressive coil total keep been I I And these that people achieving not announcements the by I'll some know

teams. our for focus key a That's John. absolutely, Yes,

and we've lot and And that that by hiring on longer to our with laterals. experience as of engineers in coil have field believe with get may approach the have we bit competitors, specific a products designs spent get of we reach years, time the more more in you and take, product to Tubing. the our you specific developing just versus weight designs think I over proprietary Global utilizing kind can from known

in Is guys see there of that to maximum out? you far getting go keep terms a theoretical seems longer. how It you

Yes.

to been to ability for always really it. it seen our and the seem I customers' piping to a now that challenges, a business amount it's I've -- I've overcome way equipment is what I and the whether move it or years, think the transportation of comes think involved on many find in down But customers reel. our to

I companies our service job. and we So think can that long allow as the as think the customers have creative, remain I do them to product the

from Our Robertson Research. comes next from the of Jeff Water question line Tower

You kind color your how you're of talked the any having about you quarter to about Can based as with all on outlook. fourth they're on XXXX? customers add thinking they're you conversations

Yes.

drilling or think I on next completion stronger which think But part they sit, the that is -- a it's there's side that will get view first than year can you side the be a the bit half little general first. I -- kind of of color. of of depending the different

-- first half second it's of think I this year.

So out I fast -- the is idea start we gate. think of the the how really, do

a quarter as or budgets have utilize E&P budget, not. We companies ramp-up the their quick first

U.S. that think that I So on would focus be land.

internationally. great in And early the seeing that internationally, show we're Now I again that think had sentiment just reflects attendance. I October. And we that think shows at record a

suite, Variperm When operating international. think the you you mentioned about

the in through If be you adoption Middle East, they there some that to have like is would of places products certified? an those go international sort markets take to to process some of

we've the value I there evaluations what different think provide and -- have lines had the believe But product Arabia stability. be I with every company years we've what's I -- been other we've Yes. we operator a standards. footprint through gone -- would that Again, similar long-term have the in could those is think and helpful has in there, a for Abu many Saudi our contacts, now, Dhabi.

footprint adoption in, the operate long-term that and we up knowing relationship that qualification or landscape we approach that. speed having think if the could I or the ease So

lines, X XXXX of excuse you A you're that this opportunity margin see further When combine on or and what margin XXXX. the question about on you show the slide? you showing think for Slide on Do deck. these improvement me, improvement the beyond product

take it's Why I Jeff, that. don't Lyle.

a So from the what TTM combined we back slide is to just companies of looking at just we're September so X the referenced XX.

any talked any in stuck numbers. no, that, synergies. those we haven't so about We And included we haven't synergies but

of low more as think relatively across a volume. business well. what's products fits cost, be operating Each Variperm have I concept about but FET company, it with manufacturing unique the can as we and is do leveraged that cost fixed leverage. the has

years capability as another revenues leverage. to tend then revenue So about our is the at thing for and And growing doing do for been Variperm. similar from see the we differentiated way think effectively up a improved from the driven businesses both higher-margin, increase, we more that and I number opportunity that products. We've and margin see FET margins that's of expect introducing operating same of

the we those do margin yes, X have there, drivers. are key I the for expansion of So think opportunity some and

And if one last I can, one.

the about the talked the next on larger expect sheet to you maybe maturities retire a bonds cash financing year. you flow? balance of some Lyle, X% free extend sort to would to out. Or scale, through financing those you would Just combine expect With retiring

to be we've without be other talked structure to is and about with generation And organically to notes. what free No, that clear, we those any debt just there. for was in retire good expect of question the a kind our that cash related position year, flow comment already we'd financing next

would think be the we do I anything as opportunistic else look market. at we

the line Carlson. of comes Our next Eric question from

just hard a make I basis. now announcement. FET actually our seemed about buy at was to the we've running a EBITDA. it could it's numbers would trailing and something talked Congrats the about on that you is kind cheaper acquisitions X.Xx the almost of to past, on accomplish thing like in XX-month be When go-forward

kind price about year, of is, the is assuming with purchase, So like kind the stock looks of where stays it Xx. end the the combined at it of

free people times, cash to can of we've And as flexible, look then go-forward touched and just lot flow on perhaps a a moved of meeting off also challenges, but debt cash, lot package, the I have financing of very balance of opportunity the just take on notes is and do the there has I broader interested kind of curious probably done like is, to into a you and job opportunity. optionality to if one once thinking that sheet the kind there SCF up guys the bottom, gives kind But business. debt and and understanding on a of you an you offers you just kind sheet, manage lockup just when things of look phenomenal about thoughts the guys then and to very accretion. the think then at long-term cheap. But and continuing the many of nature you to wanting to of had larger, kind create was to would flow this seems advantage a sell but at in cash I'm now. kind the that a some have on that where you ability that even a value? be whether do is were lower when holder broader obviously, think And or expire. that plan from that stock retire able of And not long-term just a when which focused them more the it's broader balance brings you you of given reiterated back So mix, their the flow, if we of

So yes, just thoughts would be great.

aimed our And stable. things acquisition. was about and this Great a thought we right got questions on of Eric, time lot the we there, sheet that spent making really remarks prepared sure were in in definitely at balance and

we've in super And spot So I we'd think going forward. achieved that. be a

we mentioned, Now flexibility. that you as have,

free flow. We opportunity organically just have to we'll notes. retire So the have generate look to outside. cash don't do We

creates And options so think for do I us. some that

current have SCF, of become about think firms do shareholders we to pleased FET. Variperm the As shareholders we're

XXX-day the But be marinate are also We acquisition they're and have lockup that think shares that, agreed be vote notes. the on in the I expect after you to confidence those term, selling, sellers time company. the the do that a and shares by in here. them to combined for integrate these was those give of to with but out as freely long to in sellers we of And the mentioned, a business market. traded probably

the So us the of acquire for volume out provides flow. our that shares you thing we'll And line, stronger talked about get free float financing to more right I think time of that ultimate end cash good structure increased the us under is like a there. potentially some opportunity those with

Daniel Our Pickering Partners. comes question Energy of next from the line from Pickering

and we're it's the kind me, with going meaningful for So a you Variperm transaction just I'm it. bear -- -- obviously number to appreciate deck on put about learning of your ask you, going to I'm a the of business. about that questions it's I very just website because

so base a an -- seeing is historical when And business? first Is look we're this XX so I basis. there sale And lumpiness anything equipment next guess the last about question on Is we business, 'XX the Just it's anything thinking at results trailing about a representative XXXX look year year? in lumpy 'XX, to what the profile? is like? there the looks revenue any

delivered that think they Dan. projects XXXX. Yes, there I unusual that any were was in large don't

just or from business, as as I our declining right, come to in XX% activity And that's that's keep of decline drilling, production. to we the just maintenance is where think make to I up that think of the our kind the flat. look at we model looking XX% production for expectation go-forward going was to was ahead what's really demand the focus and

in Yes. And chime Dan, on that. I would just

probably activity, to FET look you time great more at a capital similar correlation very side look lumpy back of a our with more mirror prices really energy the and and side of they've got we with FET. business than If business, over activity-driven the -- rather bit

that FET volatility dampener a is expectation on over will this combined revenues. be of So time,

if you and sure continue another drill on well. which heard fill their they extending longer think for business that's I'm lateral the wells newer per another I not And interesting combined they're driver development, and to this product in as John more Yes. the Daniel's be Variperm comment will driver great in laterals, that company

a have grow, well. we as per revenue So like more meter

Got new it well -- is you. is And this a product product.

in set not a next of lot -- here. and to goes when it's generate associated your maintenance aren't of well is then on you're well next revenues So revenue? waiting a drilled there drilled the well the It the

Correct.

I in is I think there's the the capital give go fill that the and of a plan. they'll new generation of to central but new existing an the well, it's think steam some processing well in utilize work, producer in injector maintenance and an set wells, ground the and occasionally that's me remediation a typical

as heavy and you. see a your the about Got X, you sales application. X And so opportunity this countries expanded internationally, oil set that focus top Where you you X, think is might do effort?

this I to good fixed can and want do where cost profitable think where a we our good we'll and focus have in footprint we a areas utilize way. on

step where that's be FET, the around Middle area. seen I the are around the big going the Middle Canada, there, think most are we outside to And East activity. I East areas we think of key if next focus. And and think again, that's our the really countries I the at

million the a XX-month bucks your highlighted be they you Okay. would of CapEx showed kind release of in press basis. on couple acquisition historical trailing of expectation. That a And information the had that

business? intensity here So for low capital the

the relationships free It's along team which fantastic. have, and is the and us really to cash the has business strong just able they something conversion to with technology, think, accomplish a really Absolutely. EBITDA flow, that outcomes I drew I then all to are the customer what been of think this

opportunities. you're They're Cost Okay. business, existing Is save here? expect an overlap business. you there the existing combination? an any we money out to of some Should

cost well as Dan, in our well-run The very for They've cost as really or we FET. matter don't business expect synergies of company, a the look done way additions Variperm, job. is we integrate run. at lot great into a even private them that

their they that on And current will continue so expectation path. is

letting press for these on me thanks Again, Okay. all Perfect. things.

mentioned your to restriction after wind to that locked shareholders? days. any allowing was Is have it their XXX the commentary. SCF I for up distribute out their earlier, Do saw in LPs? could to stock? in that So they're days with there control them XXX they up Or out

be sorry, no I'm XXX-day the would restrictions after on shareholders. no that There shareholders

is that. So the jury out to we getting and again, forward our expectation to and those float the -- look actually market so shares beneficial could extra be in

Yes. see any while we didn't so -- And announcements. any

person SCF close post of So the the deal? no on board the comes

No, that's right. right. That's

we've -- do got So a as shareholders. of we've the in know and great independent all know, and super they a industry, lot our of others of Board, a experience got you representing job

you've a last this now you I'm But or Yes. Perfect. Variperm you guys at. And XX had just that. looking something like then have hours not potential total assuming for only one. that It's -- announced don't been the a because grand acquisition of was big that

acquisitions, making of success. think we that get You've your But history in about now place. success as to you got as

of looking So as you Variperm? about we into out things out things potential integrate and list sort on you acquisition there this like keep LSU Or other there of sort the thinking here, other had take you? XXXX are for you've do does the this the game about for think of

be that place of our closing think out think the still near-term we I of a successful businesses are that have in sense. is But integration and thesis that are good focus consolidation makes there will number and there we the absolutely Variperm.

and analyze want to sense, good screen let make opportunities where by. continue to good we And get and going we're don't identify to So they to fits.

here, you've while some that float X.Xx. debt any and you've other equity? this uncomfortable? times, a hurt is We're I Is have thought Is there component versus In -- to increased X.Xx several of debt know mix there's comfortable taking here thought equity you debt doesn't a this there to a need an but up business. Is lot How got any flexibility level? it you do cash, seller about words, more of for mentioned think as the your transaction? And it on of note.

and that And as transaction. Dan, for set. pleased well and on number To because really we is and forward we question. FET going that primarily forward, us X.Xx Variperm Yes. for the a manage No, consideration we equity\cash great cash debt debt. mentioned, cash flow comfortable mix free generate as look have are both with the --

between we a we to X.Xx. the stand of And leverage drop And and good fact end as then the where so where just about it. feel next directionality and that by on the expect very X take we year can reminder, hitting net to we would

with there. modest could flow happen EBITDA, in of get indicative that cash with that's we can and even think growth what I

like Thank closing you. for CEO, conference turn Neal over I Lux, now the would to remarks. back to

and and Thank discuss to the to and today you who all for participation. year quarter call look results. year fourth on you early next forward full again you, to support We talking your FET's in March and thank Gigi, are

This today's conference concludes you participating. for you. Thank Thank call.

now may You disconnect.