Kirby (KEX) 26 Oct 232023 Q3 Earnings call transcript

Good morning, and welcome to the Kirby Corporation 2023 Third Quarter Earnings Conference Call. [Operator Instructions] I would now like to turn the conference call over to Mr. Kurt Niemietz, Kirby's VP of Investor Relations and Treasurer. Please go ahead.

Good morning, and thank you for joining us. David Kumar, President and Kirby's Officer. are Officer; Chief Chief today Raj and Executive me Grzebinski, and Kirby's Executive Financial With Vice President slide be found well our website. call which A issued on today's earnings was can the release, as today earlier for presentation as conference

and During call, measures earnings most the directly refer GAAP financial we also to adjusted our non-GAAP or are to this measures. financial Reconciliations our under release the measures included on conference are press in Relations financial Investor of Financials. may website certain the available non-GAAP comparable in section

As a statements. respect These in events. with conference forward-looking to management's reflect call future reasonable judgment reminder, with statements contained statements respect are the future to this

results Forward-looking of statements the XX, can XX-K with time could to our a anticipated year time. factors. from various be SEC Form other December from filings involve these result as those found risks materially and risk actual for list ended our differ of A Kirby's factors the and in uncertainties, XXXX, made and

I over to call will turn David. now the

to everyone. availability during impacted limited our $XXX term and Kurt, as as chain continue delivered contracts and as spot stock outages of quarter quarter. per increased the during by segments benefit closure in Transportation, in share the today, Overall, compares you, challenges challenges. despite to from and share. I strong the to our Transportation, perform Illinois we XXXX demand mentioned, the This improved and pricing of on the partially but quarter. of morning, work results revenue In earnings In revenues continued several continued margins barges, Earlier quarter. Distribution million the well improvement River facing River continued Marine results the Illinois Inland some supply and refinery and temporary year-over-year, lock from of sequentially earnings good our and quarter quarter. that the to $X.XX. repurchase pricing, continued we earnings announced per the quarter third to million by refinery Marine of $XXX well outages and quarter during Thank of third through Services reflected and we third offset Both headwinds even during closure $X.XX were

demand a at the in a range. quarter XX% Spot strong activity standpoint, barge running contract in teens. the were customer to rates and From in continue progress and remained prices were year-over-year. mid-teens with high in in year the ago. higher renewed market also with up prices utilization sequentially the digits increases high single-digit mid-single higher Term Margins versus range high the

XX% customer low spot with in In market the solid prices digits capacity of sequentially range large mid-single demand and year-over-year. fundamentals Coastal, in vessels, increasing limited availability accelerated the in resulting and

Coastal utilization the During run to continued range. in our barge quarter, the mid-XX% in

across quarter. during repair as our As decrease persistent and the year planned manage breakeven. In solid impacted revenues industrial demand which we quarter remains supply service mentioned steady delayed and levels markets just before, on-highway below overall commercial particularly marine third led different backlog. remains with equipment work the with through operating are margins strong in and and issues, our demand coming revenues growth power electronic of chain and which an Distribution by vessels, gas, Coastal across were oil In many our overall being deliveries several with sectors. to high electrical businesses on shipyard In market, continued and new from componentry, to combined our of large results Services, generation this repair down and levels with maintenance

year-over-year, and gas driven work with by decline income year-over-year sequentially and the even to in up operating efficiencies. were mix under in up challenges revenues, to X% margins supply operating improved product diligently Overall, and to just continue favorable XX%. and oil operating We both manage revenues these was

summary, temporary headwinds quarter higher, challenged the continue industry-wide In our in market in strong to Coastal the planned quarter, helping revenue by while market both remain very Inland rates is the lingering third Despite results and strength dynamics conditions term segments. our inflation to supply-demand for reflected push near offset remains ongoing shipyards, favorable.

the market quarter supply is to and I'll segment the bottlenecks Raj Our call realizing more are talk results are to our chain turn Services demand expected, growth Distribution and the But and I'll the good, the sheet. Steady strong. we for in barge is further and is outlook third increases. segment discuss first, to over while about outlook balance healthy contributing later. rate the utilization in

Increased operating XX%. decreased in Thank while operating improved market and to margin pricing Inland River together Compared of XX%. offset second or of you, revenues, Compared and million quarter In $XXX the the due refinery lower total income were XXXX, to the income coastal by segment everyone. third or million Marine were Coastal of closure, Inland income of Marine shipyards. quarter operating XXXX, utilization Illinois X%, increased was Marine and good operating X% some Inland million by the total efficiencies quarter flat. partially revenues while outages operating $X and $XX David, morning, Transportation and the increased with revenues was million, an $XX XXXX, third to

approximately Inland range in the business in was utilization of Average quarter. at more revenue. detail. for The high the barge Inland Looking XX% segment the XX% business contributed

or the in of from affreightment. third with Term to compared Marine in contracts a were XX% in mid-teens term rates quarter high the XX% time year. renewed from contributed single Long-term of up into on revenue market contracts of range the Transportation utilization to year fourth approximately reopening the moved and spot contracts With low prior during charters the XX% has we X or as longer, with conditions the market of River, our contracts that Tight and range quarter. sequentially contributed mid-single digits the digits XX% the those Illinois Inland average increasing begin year-over-year. the

pricing to contract were XXXX, pricing. the spot XXXX X% higher by quarter Compared revenues with was the term up higher Inland given inland during of lower partially to and benefit the quarter closure. of higher utilization. third in the quarter the Illinois X% revenues second compared high Inland partially of River by as teens margins operating primarily the utilization, offset by lower were to pricing increased due offset

up improved business. The the Coastal operating business breakeven utilization. X% represented by had to Coastal XX% of higher and Overall, planned Now as range improved contract Coastal moving was sequentially Average year-over-year mid-XX% the partially barge which revenues were days. quarter utilization the shipyards shipyard and of low near decreased increased from downtime Marine Transportation mid-XX% in prices for XX% revenues Coastal range, pricing barge the margins to by as to Coastal offset XXXX. the was in segment. third was compares offset

the in Average quarter, prices double range which sequentially Coastal spot term percentage were were renewals mid-single the and the market XX%, the up approximately rates During of contract in contracts of were time up and low on year-over-year. was in year-over-year the under XX% digits revenue term digits charters. approximately XX% low

XXXX. XX.X the call and presentation At reactivations Coastal reconciliation to the our of basis, website. quarter well barge representing third total our X,XXX is projections capacity. of included on earnings in end fourth changes as for the third representing barges, quarter, the businesses, we in This net capacity, million in both Inland by X,XXX tank barges, a the respect provided the posted as XX.X have remainder XXXX number the for With in to of quarter. a Inland Inland of our million fleet end currently On driven of of fleet a the of had barrels modest expect a we with barrels

and review XX%. million I'll operating Revenues revenues segment. segment the quarter XX%. to or or to by $XX an with were income quarter $XX.X or income the Services of XXXX, million, operating million second decreased Distribution increasing of third by or by and $XX the million X% performance $X XXXX, Services quarter Now operating $XXX by around margin XX%. compared of the When increased the increased third and the million with for income Compared revenues of of operating and XXXX Distribution million saw X% $XX.X

industrial third Overall, year-on-year strong XX% activity for our sequential contributed and margin also digits XX% were an and repair XX% marine the in businesses. to demand approximately a of the market, was high in Commercial commercial In Industrial oil up single service sequentially. with year-over-year quarter. and XX% revenues market, on-highway represented and segment and and generation improved increase had the business Power XX% the equipment, in in down and On revenues parts year-over-year. revenue and the operating gas

shipment to bottlenecks, continued manage in chain supply We quarter. business led in especially manufacturing to our which the through delays

equipment. in backlog Despite eFrac digits. and XX% issues, had revenue represented oil favorable in driven by experienced of these margins and power approximately business and operating continued manufacturing low quarter trends generation in and segment double orders Overall, our gas third the the units new the associated

sheet. to Now turn the balance I'll

XX, just million $XX billion. with September we of over XXXX, $X had cash As debt of total

During debt XX.X%. debt-to-cap ratio to by our the increased million, balance quarter, we increased $XX our and

and $XX.X $XX on to hand and to net million of had of directed remainder equipment fund eFrac. cash million activities operating to expenditures, related was of from quarter, and the CapEx was million. used During marine in which cash of flow capital we cash flow growth $XXX maintenance We the

return $XX.XX. repurchased price We around continued the and stock shareholders of capital to at $XX.X million to an quarter in average of

of respect would million flow, and to operating had free we As to this the XX, $XXX of flow of total million we million September cash on flow With million expect to $XXX $XXX cash year. depending to to $XXX working million. available generate cash close timing capital, in on $XXX likely approximately liquidity

committed remainder quarter. allocation now this approach, will and cash the stock. I use We for fourth discuss of free call to balanced continue we David to to of expect outlook are to our most back to turn to the the repurchase a flow capital

headwinds. Thank Raj. had remains some both levels. high businesses you, activity our a despite well quarter temporary Refinery at We with performing good

steadily and both is Our strong barge increasing. utilization in rates and Inland Coastal, are

the some in is new Coastal, to good, results remains the despite to River, conditions to XXXX. activity issues of Distribution normal we demand quarter supply ongoing strong. In deliver in to days and and fourth Mississippi levels businesses high shipyard water continue and marine in delays, expect outlook in we receive While due in related our delay near-term our products seasonal services on chain market manufacturing. we improved the increasing orders low expect for Services, Overall, and our constraints financial and weather

are I'll global uncertainties, detail. strong remain we industry. by refinery weather are revenues. with remaining expected some While encouraging, more set expects very in of from be are high economy, further, challenges in higher. seasonal of approximately geopolitical Louisiana. of to lock these the see barge delay expect construction days also interest partially drive to continue strengths reset -- due we company is and improvement with the Inland and that going of still to weakness increasing in we River low minimal offset positive additional Inland. unrest related quarter. these combination have Favorable flow normal on we to continue start utilization And due mindful forward, And with Mississippi to this economic to a prices, expects Term conditions also generally which Even inefficiencies market to currently all spot slowing and some the the rates. cash The Kirby operations represent plant the into petrochemical impact. across driven going water there forward. Diving to further are maintenance by the fourth businesses XX% to conditions expected new high an contracts expect and in

at In revenues expected close to is we be have in modest it's quarter Overall, the market, and close not with and demand and fleet. XX%, still inland expect end margin. fourth sequentially to the conditions Coastal are the flat margins supply tightened a considerably to across roughly industry to improvement the year XX% balance

of water ballast certain impacted balance barge operating by steady tight this revenues be the shipyard an with of installations equipment days Rates vessels. year to is mid-XX% approximate planned Coastal continue and industry. through the are year in doubling our expected availability the the low range. discussed, continue margins customer to demand across the treatment to we've maintenance of improving Kirby utilization expects on and as As

quarter shipyards. are to major the in low progress digits fourth revenues XXXX expected quarter, third the to Coastal mid-single continue be For to to compared we up the as through

on XXXX. single However, basis. there digits possibility be the shipyards some a are into to low is expected margins of near extending breakeven Coastal year early full to operating

demand activity steady and in commercial to of expected are expected 'XX XXXX. oilfield the markets fourth into Services, the rental industrial, offset hurricane quarter as and in to winds commercial with Moving will marine should throughout industrial and equipment are a to Distribution generation, be partially power in repair to the and activity steady In fundamentals margins. and and remainder down. favorable This headwind incremental create continue on-highway. activity season That remain lower by slight

in In volatility well demand expect rig strong with as eFrac the continued to in into of next the parts, new Supply some and year of demand orders the the near-term the manufacturing power and near oil counts, some and pumping lead term deliveries company to deliveries gas of friendly are persist despite prices we potentially to contributing and pressure equipment as long volatility expected expects quarter and market, the and Within for products from chain year. deliveries XXXX. and fourth remain services. generation into manufacturing, issues and for shifting for new for increased equipment the environmentally OEM remainder commodity times

our To as operating conclude, Overall, impacted company in single-digit near-term to performed up into range this XX% on by low face challenges, the of range dropping revenues mix the quarter well with strategy. temporary we the digits the lower expects margins quarter. team our in almost objectives during high the our and from had well both fourth to mid- on the to as be some well long-term mid-single executed sequentially and segments segment quarter

free we repurchases, repayment significant cash generate well free and expect use as debt growth flow we quarters, projects. coming Our to is strong, and in to flow very cash balance for expect opportunistic sheet share as

low expect businesses innings in as the and Although are as improving short-term despite Services we well in value are our head businesses confident headwinds. the for potential remains potential businesses the monitoring business. weather financial XXXX, our term, and as continue in the long into continuing we macro core recent Marine strength a We produce strong results recovery Distribution as intend impacts and recession multiple-year see Having look markets market capitalizing driving of of to early water-related a and our for strategy. the closely our will are shareholders. favorable that, we our fundamentals demand on Marine we said long-term and solid in we and

prepared Operator, remarks. this concludes our

to ready now are We take questions.

comes from Nolan [Operator Instructions] of Our first Stifel. question Ben

and Raj. David

line you you the about to is around new replacement But fleet? industry gone respect with the wanted to with ask pretty going economics So little guys at years inland a a point, little up. a equipment vocal put for still actually you that Can I little number way on inland my now ordering your the And have about first know Well, bit question, in need side. CapEx. through it don't saying and I very of for a Coastal. maybe some of how been We've and activity. own to some that color think

the of Steel last pretty you up, labor and everything, up, is are up has up, the equipment, XX%. just for new labor the in prices line X towboats electronics much about up, boats high-performance doubled paint question. know, are costs Yes, look, years. on XX%, up, welding skilled as are Ben, for thanks Yes, is cost on radars the input

input the up. costs have all So gone

$X a million, that's tow, it. X-barge million $X take you $X a million with if $X then and towboat you like put So per to barge, million

type equipment, worth $XX,XXX a of You're or return a a need about you'd day on tow now. to X-barge talking XX% capital equipment million $XX of that and get for XX% north

to they sense right to need anybody fighting come for still We're So Rates and now. going up. need to up inflation. it make keep build doesn't

rates see So see environment there. build I to just this up to don't until jumping when And in that's to anybody those start it. start get really you'll

say, be lot. if Now X%, it you equation, the I secured were talked the the other cost a borrowing gone about would now as using about to of X%, right up of has financing. just money used part before we

money, imagine you're to then to bonus of to would would get and depreciation. borrow I losing XX% pay a -- Now smaller have company north

So justify building could about digit, $XX,XXX it. picture. higher, even it's the be may environment equipment debt a cost in above almost $XX,XXX. But the It maybe being of it to all be well with that double cost day

seeing tied we -- the was that said, that Now up are you COVID equipment some come off are during bank.

whole before a X% Some numbers maybe have as bank. we'll come off estimate I -- here. an of laid-up new the start off fleet, get these we're to off the will see but may stuff it I that handful Raj think people that, reactivating probably If the tight imagine X% never come only almost bank, of a the you'll -- equipment not that's would work, and reactivating building bring done off gave could the set will can but We're But us continues some reactivating already you're it year-end to that equipment, if to bank. been bank. our

of or a But see saying, fast in it's year go. depending right long pretty rates I just it's for check how now. don't way another So building on X,

think we -- XX don't the barges I barges. guys update got -- being there an on I know here, last we built you and XX call it's I were updated We year. this think said since we

as high well, the retirements at I'm you it. million retire Now will this big to $X start year bubble, say, to the just going a put older you not be with I'll and into look XX-year-old shipyards, heavy maintenance in these cost equipment bring maintenance you barge, for

know handle good a is see the more we be we It's $XX could of only could It don't you north say we're retiring. what being hard but on retirements industry to retiring. that. than a expected. what So little We have million,

building of -- couple don't a now. Ben, answer, a based long anybody So drawn-out on the years see I economics right for just based but that's on

seeing And side, you the if going time were to Ben, build, the David's I'll any add building. on to it's take we're not into XXXX And Coastal the just frame. are you point, times lead

appreciate Well, that. Right. I

not appreciating and about one, My answered you the of much that It I like talked issues going that haven't in just You know of year have side. a one how XXXX there. is next of given could the of already maybe, a into you you places. maybe are could over second from what as though, business other color next have And to that what's supply questions VoltaGrid then we're out? chain understand But guidance these curious for within bag move and seems that D&S? lot is question sort that persistent, if little hearing year. on some yet. David, Curious stuff pushing feel looking you And D&S in sight into sales about and bit. a on of guys how if I'm little that D&S the sort you I playing line the I that to if that give for

we deliver. again I some of engines can't they'll Sure. and the and back We months in almost a getting say goes clear may hit it's chain, come Yes, for in the get But We miss. will -- some frequency our it woes, variable improved has it drives back. might up it's will some have to areas chain problems for XXXX problems other don't and but way. while until start and some engine later, overstate example, then to it want and then suppliers, supply this, it a I supply can cases. componentry electric few getting then have

said, engines, there. for lot So are work, some We Ben. headwinds better. as seeing heavy know, a there that's still you of getting repair parts is That on do we

around. is are just remarks I better it fourth would more I it's bouncing quarter bit. prepared on and has into some we of us It and a So bit. what XXXX, shift it's see see in in little shipments, say there. guess, by large, that improvement say, would the supply chain margin still is but you some you'll impacting around shipments terms did our than We but bounce the could it seeing it's the say I and been, same, in

And can... you Okay. VoltaGrid if on

industry. only Yes. equipment. like we but of VoltaGrid, for our of places expand other those about we don't hour, to But by talk their customers. one to not And familiar, direct build not continue the and lot power they They is in provide a space the customers, to to frac VoltaGrid build. the

well, you probably continue to a give from not world-class than best that. get growing We for me more them. They're orders detail organization much to and

from [Operator Bank Hoexter America. of Instructions] of Ken Our call next comes

Congratulations on is Ken This the on quarter. Inland is Nathan for My the great Donlin Marine Hoexter. side. question

operating of of some level delay that I the represents weather. assume XX% get and seeing on just XQ the terms the what on scale wanted a we in quarter volume partly So ton out the the team a of levels off has a some factors And last? mentioned. days decline that the down from on challenge of an are this somewhat call to of of based Mississippi miles perspective? noticed similar water Should versus lock

for the on thanks on ton good is should Yes, that. elaborate your miles one, questions. Nathan, a the we and note

just closed. to journey all what Illinois the that. That's the from closed, lot and generates it's know, the from Illinois, Coast barges a ton Illinois and miles less Gulf miles. And Chicago. ton way long a was you the lot As And on if up usually a sometimes when we do you taking of think Illinois about into the there's

The Marcellus. We Utica other of crude/condensate are the And Northeast, a lot thing those the gassy the pretty is crude. from move from and fields.

gas when not -- are they're as when they're low, condensate. producing much prices so And

to And the moves way the Ohio Coast. so get we Gulf down crude don't all the from those Valley

we're you ton said, busy, was pretty So heard, that's utilization as our miles. good. That still fewer

because look parts busy up. it's system. So of at mile, if ton we're the other you That's revenue in per

of may many Houston of but days, lot tie miles barge have channel, a which in from that. not but to be Houston, call there's up We for another a could of one something revenue cross just taking the we part which a part barge

miles revenue So be careful on to correctly impact ton with you noted, got ton an mile. And as had you per Illinois and that.

barges is we Now in the deploying October. back started Illinois open,

lock that's river. pick again moving impacted But do We're back a have all takes while area New the So and some we is into starting and to causing Orleans routes it get back get delays. that's the adding -- it in that be to and and closed major equipment up. because system. to still There's lock a delays that's rerouted diverted up some

about that week, last that. to through should record out on just say, Valley we That's working like is should -- Mississippi. and which be lows, where the all be in a to Hopefully, well, I low X to $X.XX this say. we're magnitude less I the than record bit. question, help that what we trying when normal. past, hard probably be us feels answers the This watching that, some in may to We're would weather but again. predict less $X.XX the That But see $X.XX But Ohio different to think the It said, to range $X.XX is quarter. that say it water got a the costed going The had Nathan. low In a to in rain order $X.XX in -- of that, got to but It's is rain, $X.XX. it's plays it's hard given it. now. out. that right recent than

tight of book that guess mean, the at of see to now. could next picture. Could the looking how I sort in But this XXs. question things, capacity next talking into rates more locking And I see you've strong it's demand. the is team and is of does. in understand particularly currently of we're of my the Trying gradually little contract current about mentioned we or this that a into I Inland. around more higher historically the big less historically, No, ramp years? exposure just that couple well sort right trend half vessel of kind side

observation good No, here. Yes.

I especially rates XX% would directionally, up mind say rising spot term Year-over-year in up big noted, don't about Inland XX% rates were do just digits. on And of and saw Sequentially, a environment. we that a you've We we're spot As purpose, rate we exposure. having mid-teens. mid-single kind spot.

deal So longer will maintenance terming of are well spot it we're getting spot and position. to deals. enjoying more We customers seeing bubble this, our say your equipment maybe little the call push point, they're a to might -- of deal, be something spot this I up extending aware starting bubble X right we're or and a get to market months they because than spot less deals now, now. very, or little year, is a instead the X-month doing months tight very a about maintenance they're X nervous

call Atkins next Our comes from Inc. Jack of Stephens

Okay. Great.

maybe new David, to like maybe barge capacity on have that the lot been hiring question, boats of first focus the as I'd crew to channel but folks boats. relative a there's if of we're retirements construction Ben's or was in Guess to It in impact through to question, go challenging your back So sort is big get could constraint? as around capacity and a barge. ask maybe historically, hearing a one mariners I is it capacity talk could. think as your not. But I of different and you terms operate way. qualified of mean, a I And maybe capacity ability that's piece guess what, also I to -- to the that being about able to build could a

So to wanted as that's but well, that? a thoughts limiter maybe get your for on I capacity

crews. got crew these to we the is we've barges tight that's Horsepower, know, and been very, we've get excellent to I vessels and a you how seen hard as No. an labor point. mean, very move market. It's

own our has Fortunately, school. Kirby got

ramping was be X up okay. anticipated ago almost started So mariners. this of we short years going school We're some doing honest, as on. and basically We're the COVID even I'll a able time crew we're mariners right which is vessels team lot over to good working They're now. that, little good. do but to players. short mariners, A help our we're of

absolutely tight. But is which market. it a horsepower in lot is is the it a factor available just the making of in really There not tightness

just that to barge So you've you and even get tight difficult boat And as makes got it going. moves availability. availability would more imagine, tight

We a of factor. for I thanks is a we're labor lot, a that good because with mariners We've talk short up. about been major picture, inflation. some So dealing of don't ecosystem. the And it point. that's it whole mean, right? part And inflation the bringing that. is it in It's part but there's

Yes.

X-part of relative there the then maybe makes changed maybe has a fourth thoughts purely fourth groups demand we all? Okay. into And about guess, term piece. No, ago, of there Inland? give outlook some to customer talk customer months terms in And a is -- wanted of you levels? water will that from that your if just X going you're so, of key to output chance about kind at within and the get tied to and question, sense. that think seeing anything you XXXX, is really Or quarter of on is the else I kind bigger the I the outlook just when just going to then, both to picture, kind sort that your about but guess, kind as this that on as think of it quarter of longer I relates has your

of water, with XX% only got starting know, No, fog lot. Jack, our quarter as the deal I to as XX% we the XX% worse bad actually Mississippi and outlook about you the quarter, as -- it's it tighter volume. mean, of fourth is it's we're -- better low we're because If because see our is and to changed in always than a anything, you a hasn't little weather fourth

that And as the very really the That utility not where you're Coast, day right? -- we quarter. see in I mean, fog a too, up But moving does don't weather efficiently. Gulf you can the fourth said, tighten bog active, fleet. down we're just always

utility. anything, would maybe because So I up just tighten it marginally as so spot. does expected, if on say, better it's tight we're

run that Now be opened a have like for that. a River, that's bit wait the to because things Illinois and and careful back drafts, of is low up, lower little have to you dredges you headwind

I period what's So But heading fourth important the in it's our for think contract renewal coming all now. into -- is in it's all quarter. a we're outlook

the market And time. renewal is contract heavy pretty tight. a usually that's know, you As

They tight. maintenance are customers know bubbles it's there. Our sophisticated. know this They

early -- energized good the about yet, too now. major feel outlook. it certainly going about we 'XX pretty contact the right feels renewals talk but into It's we're to So

Our comes Energy Instructions] call from [Operator Daniel John Partners. Daniel next of

just Frac it I got the stable from a question Would environmentally right orders, customers? interest, the interest Or it And is not as on equipment. coming . for the the customer base? thank same characterize including you David, you me. also, one accelerating or is broader then now?

the because that improving. it would a I sound be like a word, say it so mean, pressure broader. and is improving. I but pumpers, the The the but say, you strong know of the I good John, It so interest it get customers, for accelerating, ramp, but makes better accelerating anybody, too than And are is huge efficiencies it's is eFrac pronounced E&P there. and improving. only with companies you this wouldn't may is not our savings

you and continued eFrac think so is much as And and of but obviously, see new And because building builds. you I see do. But to won't going just think operational likes well significant. you're forward know the benefits, customers of conventional in the the as everybody terms we I ESG Frac, tell going you should us savings of

to There's replaced tend there. of needs lot I No, that to agree. be out stuff a

say interest -- thing say the seeing on internationally Well, accelerating, on we're Frac too, now only some on other you I eFrac. would but

would say, game. kind I So of new to that's the

the willing be share most markets you you to. don't Would to I interested? want understand which are

Middle the -- East. Well, it's I think you

Yes.

enough. Fair Okay.

driving components, constraints, electronic sectors? diverting color you they Or enough? do the what's other On chain Are you add to . can't any fast they just really more could supply make supply it like the that? us, have

don't it latter. enough. example, is it's We that They because fast from buy just can't can't vendor it drives, to enough, which they name the would want -- we I make nice, fast frequency and buy interesting the area, be for variable Scandinavian Yes, an dilemma. not but make

want get backed it enclosures you to you to componentry electric backing but and up. you Sometimes dumb iron, up, that's enclosures call you wouldn't and that but don't around problem, -- back that a be gets different would electrics be would things think that up, seems think

backup AI. whether up you now power, look whatnot. data centers you you've like John, centers got data we've just and if at the And it's for this, seen surge And things ChatGPT another and know in all going or

for same frac the spreads. equipment generating So electricity in we use that

of or it's there's -- electric it's going. related. lot system, just the and And what's electronic So just in a demand that's usually

comes question next Our from Greg Webber Wasikowski Advisory. Research & of

would and here, to of I wanted initial see in versus the of confidence Raj, QX. over contracts QX level how you say, confidence last your term David that on year looking your characterize and expectations but I right know wanted I before? your days into of rolls year now, to level early and expectations check chunk in it's when that and

were Well, -- we little bit Yes. from recovering we COVID. a last didn't still year,

quarter environment the coming year good. but year. than back, coming river it better Last are weather market whatnot. was conditions last and volumes COVID some were is pretty -- see really year course, So we and Don't come still, we much, had did has of we the of is me back. back? on the get gone, wrong, first And So this this year, tough much really

I better real. maintenance feel they a to say, this certainly but the market. renewals contract feel is I want bubble tight significantly So It's better, This year. use word better. would

moving them products share So move. Our among of of base good right? customers and refined look to buybacks the the be they have doing, should and cost chemicals barge lots And you our generous. you nothing tells volumes customer it is in terms how can to or at they're

Understood.

remind year? annual within us I'm the little Or agreements demand essentially frequency to talk of is? And what activity last year year quarter? generation about your bit storm fleet QX of operationally, higher to have last compared Okay. then and really of Maybe time the relative demand how do real just severity curious storm so regardless customers a the QX standing drive more you this in storms rental and versus would far. activity the can power increased

season usually on fee standby the standby usually everybody It's paying lot. we mild a It's thank rental the if different, our Greg. a because and putting that a gotten impacts little with a for we every was Marine is rates go up customer Yes. deploy, But has about a because it. this stuff us -- pretty year, busy fee hurricane then during goodness hurricane It And kept smart season. business.

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question-and-answer for turn conference back closing is session. remarks. there Niemietz no this now to the further Kurt like As I Instructions] any to concludes [Operator Mr. over questions, our would

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