Welcome to the Forum Energy Technologies Second Quarter 2024 Earnings Conference Call. My name is Gigi, and I'll be your coordinator for today's call. There is a process for entering the question-and-answer queue. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. A link with instructions can also be found on the company's investor relations website under the Events section. At this time, all participants are in a listen-only mode, and all lines have been placed on mute to prevent any background noise. This conference call is being recorded for replay purposes and will be available on the company's website. I will now turn the conference over to Rob Kukla, Director of Investor Relations. Please proceed, sir. Thank you, Gigi. Good morning, everyone, and welcome to FET's second quarter 2024 earnings conference call. With me today are Neal Lux, our President and Chief Executive Officer, and Lyle Williams, our Chief Financial Officer. Yesterday, we issued our earnings release, and it is available on our website. Please note that we are relying on the safe harbor protections afforded by federal law. Listeners are cautioned that our remarks today may contain information other than historical information. These remarks should be considered in the context of all factors that affect our business, including those disclosed in FET's Form 10-K and other SEC filings. Finally, management statements may include non-GAAP financial measures. For a reconciliation of these measures, you may refer to our earnings release. During today's call, all statements related to EBITDA refer to Adjusted EBITDA, and unless otherwise noted, all comparisons are second quarter 2024 to first quarter 2024. I will now turn the call over to Neal. Thank you, Rob, and good morning, everyone. Now that we are halfway through the year, it is a good time to take stock of our progress, and I am pleased with our direction. Free cash flow results have been strong, and we have converted EBITDA into cash faster than our plan. This performance has provided confidence to raise our free cash flow guidance for full year 2024. Also, we are in the process of redeeming more than half of our 2025 notes prior to the end of the third quarter, and it is our intention to retire the balance around the end of the year. At that point, the remainder of our debt will be fully prepayable without penalty and will not mature until December 2026. This is a big step for our balance sheet. In addition, we are executing our Beat the Market strategy through new product development and international market penetration. These results are evident in our market share gains and increased sales outside of the United States, which were 50% of FET's total in the second quarter. Finally, our financial results demonstrate the positive benefits of the Variperm acquisition. We have increased EBITDA nearly 50% year-over-year, despite a more challenging market. The combination of our companies has successfully increased our scale and margins. As a management team, we have a strong focus on free cash flow, and this quarter, we generated $21 million through consistent profitability and improved working capital management. This allowed us to repurchase $13 million of our 2025 notes and announce the redemption of another $60 million. In addition, we are raising our full year 2024 free cash flow guidance to between $50 million and $70 million. The team continues to execute at a high level, and I am proud of their efforts. Putting it all together, we are following through on our plan to create value through a strong balance sheet. Once complete, FET would be positioned to return cash to shareholders around the middle of next year. Last quarter, we discussed our growth and profitability strategy. This consists of four foundational pillars: growing profitable market share, developing differentiated products and technologies, utilizing our optimized global manufacturing and distribution footprint, and expanding our participation in energy transition. I'd like to provide an update on progress made so far. First, we are seeing the benefits from new product development. We have a growing opportunity pipeline within the power generation, power generation sector for our industry-leading Jumbotron XL heat transfer units. The Jumbotron XL is a critical component for power systems that are utilized for many applications, including AI data centers. The power gen market should grow rapidly over the coming years. Importantly, these opportunities are geographically diverse, with demand in the U.S., Middle East, Canada, and Latin America. This is an exciting opportunity that expands FET's addressable market. We are also benefiting from our optimized global presence... to meet growing global demand and provide our products around the world, we do not need to expand our roofline or invest additional growth capital. We can service the world with the strategic manufacturing and distribution hubs that are already in place. A great example is our Saudi Arabian manufacturing facility, where we are delivering products and technologies to support unconventional resource development throughout the Middle East. These products include key hydraulic fracturing components, casing equipment and hardware, coiled tubing, and artificial lift solutions. For the first half of 2024, we have grown our Middle East revenue by 16% compared to the first half of 2023. This highlights our ability to pivot with changing market conditions and grow where our customers are spending money. Turning to the second quarter, we delivered revenue and EBITDA within our guidance range, despite softer-than-expected U.S. activity. Our year-over-year results demonstrate the benefit of our beat the market strategy and the Variperm acquisition. Our revenue increased 11%, and EBITDA was up 48%, with a 320 basis point improvement in margins. These results are particularly impressive, given that the global rig count was down about 5%. Variperm performed well during the quarter, even though the Canadian market was down due to typical seasonality. While revenue was essentially, essentially flat, favorable mix and cost controls helped Variperm deliver increased EBITDA and margin contribution. They were also a meaningful portion of FET's free cash flow. Revenue synergies from the acquisition are starting to reap benefits. By working closely with Variperm's experts to expand FET share, we increased our artificial lift and casing equipment sales in Canada by 5%. Also, we are leveraging an existing distribution network to have product readily available for these customers. Gaining share in a new market takes time, but we do have some early wins. Now, let me give you additional color on the prior quarter's market conditions and how it impacted our results. In the U.S., E&P consolidation continues to slow drilling and completion spending as companies evaluate their combined portfolios. Also, weak natural gas prices contributed to a decline in U.S. rig count and hydraulic fracturing activity. Internationally, rig activity declined 6%, due entirely to Canadian breakup. Outside of Canada, rig count was flat, with strengthening activity from shale plays in the Middle East and Latin America. Also, offshore activity remains vibrant, as demonstrated by our strong subsea quotation pipeline. Now, let me turn to our outlook for the remainder of the year. We believe it is unlikely that U.S. rig count and hydraulic fracturing activity will experience a significant increase from current levels. As a result, we now expect U.S. rig count to be down 15% on average for the year, compared to our initial expectation of a 5% decrease. However, the benefits of our Variperm acquisition and beat the market strategy should mitigate this softness. With this revised market outlook, we are reducing the top end of our 2024 EBITDA guidance by $10 million. Therefore, our updated range is now $100 million-$110 million. We anticipate the third quarter to be relatively on par with the second, with revenue in the range of $200 million-$220 million, and EBITDA in the range of $24 million-$28 million. Despite this change in our EBITDA guidance, we have increased confidence in our ability to generate free cash flow. As a result, we have increased our guidance range by $10 million to between $50 million and $70 million. This reflects the benefit of our capital-light business model and operational execution. I am now gonna turn the call over to Lyle for more details on FET's second quarter financial results. Thank you, Neal. Good morning, everyone. I will begin my comments providing more color on our strong cash flow and our balance sheet. We generated free cash flow of $21 million in the second quarter. This represents an 81% EBITDA to free cash flow conversion. A decrease in net working capital, driven by inventory management and good collections, contributed to the strong free cash flow results. Reductions in inventory have generated significant cash flow so far this year. Our teams continue to drive down inventory by tightening our supply chain. We are reducing the flow of inbound raw material to match market conditions while still meeting customer demand. We have the ability to drive inventory lower and will push for increased inventory turns. Our efforts to achieve more timely collections are also paying off. We have achieved significant improvement in our day sales outstanding since the beginning of 2023. In fact, excluding the impact of Variperm, our second quarter DSOs decreased by 9 days year-over-year. Net-net, we have reduced working capital by $11 million this year, which boosted our free cash flow results. Recall that our prior free cash flow guidance assumed no reduction in net working capital. With the net working capital reduction already achieved and our plans for the remainder of the year, I wanna reiterate the guidance Neal discussed earlier. We are raising our full-year free cash flow guidance $10 million, with working capital benefit driving the overperformance. We ended the quarter with $32 million of cash on hand and $103 million of availability under our revolving credit facility, with total liquidity of $135 million. Our net debt was $225 million. Utilizing annualized first half EBITDA, net leverage ratio was 2.2x, a slight improvement from the previous result. Last quarter, we laid out a plan to put FET in position to return cash to shareholders. With the announced $60 million partial redemption of the 2025 notes in August, our current liquidity and guided free cash flow, we remain on track with this plan. We expect to retire the 2025 notes around the end of this year and the seller note around the middle of next year. With low leverage and a flexible capital structure, we would be in position to return cash to shareholders through share repurchases or dividends, and this would still leave considerable free cash flow for further reduction of our revolver balance, strategic growth investments, or incremental distributions. We will continue to evaluate refinancing options that could accelerate this plan while we execute in the third and fourth quarters. Now, let me provide comments on our segment results. The Drilling and Completions segment revenue decreased 2%, primarily due to lower sales of ROVs, cable management systems, and treating iron. During the quarter, coiled tubing revenue increased 24% as the international markets caught up from a slower first quarter. We also saw a 50% increase in frac power ends shipments as we added a new large customer and had an increase in refurbishment work. Lower revenue and less favorable product mix drove the segment EBITDA decline of 16%. Orders were $110 million, down 6%, with a book-to-bill ratio of 94%. Orders for drilling and stimulation-related capital equipment were lower during the quarter, partially offset by increased international orders in the coiled tubing product line. The Artificial Lift and Downhole segment revenue was up 6%. Higher sales in the Middle East for both our casing equipment and valves products drove the growth. Favorable mix in the downhole product line pushed segment EBITDA up by 9% and EBITDA margins up 70 basis points to over 22%. Orders were $70 million, a 20% decrease due to our production equipment product line, where order timing creates swings quarter to quarter. The outlook for production equipment is solid as their backlog remains strong, with a year's worth of work in the system. Now, let me provide some color on our revenue by geography, given the disparity between activity in the U.S. and international markets. In the second quarter, international revenues grew to 50% of our total revenue, compared with 35% just a year ago. This shift is significant given the softness in the U.S. And as Neal mentioned, our strategy to grow internationally is making progress. Second quarter, international revenues were up 13%, with the majority of the improvement in the Middle East. There, we recognized large project shipments of coiled tubing and of valves manufactured in our Saudi Arabian facility. Downhole revenues also strengthened with market share gains for casing, hardware, and artificial lift products. In addition to growth in the Middle East, our Canadian revenues grew slightly, in contrast to our expectations of a decline due to spring breakup. These results demonstrate the value of our global footprint in mitigating the softer U.S. market, and the U.S. market has been down this year. Our revenue correlates with rig count, so when the U.S. market begins to improve, we should benefit. To wrap up, let me provide a few details for modeling purposes for the third quarter. We anticipate corporate costs and depreciation and amortization expense to be roughly in line with the second quarter. We will see reduced levels of interest expense in future quarters, with the $13 million of the 2025 notes repurchased in the second quarter and the $60 million redemption in August. For the third quarter, we expect interest expense to be approximately $8 million or about $700,000 less than the second quarter. For the fourth quarter, we should realize an incremental $600,000 of benefit from the reduced amount of outstanding 2025 notes. With the retirement of these notes, we will write off the related unamortized debt discount and debt issuance costs. These were roughly $3.5 million at June 30th. The discount originated in 2020, when we issued the notes and recognized a gain based on the fair market value estimated at that time. In the third quarter, we expect a non-recurring charge of approximately $1.8 million associated with the $60 million we will redeem in August. Finally, we anticipate income tax expense in the back half of 2024 to be slightly higher than the $6 million reported for the first half of this year. Let me turn the call back to Neal for closing remarks. Neal? Thank you, Lyle. Looking ahead, we expect the U.S. market to remain soft and down from our original estimate earlier this year. However, our outlook for Canada and the international markets remains intact and will help mitigate this additional softness. We will continue to execute and deliver financial results that support our long-term strategy. Our focus on cash generation is paying off. We raised our guidance and expect to generate strong free cash flow this year. Our plan remains on track to retire both the 2025 notes and seller term loan around the middle of next year. This will provide greater flexibility and optionality for returning cash to shareholders. To conclude, I would like to thank our global team for their hard work and dedication, especially our Houston area employees impacted by Hurricane Beryl. Despite having limited or no power, cell service, or internet, they found a way to get the job done. Again, thank you. Gigi, please take the first question. Thank you. As a reminder to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Dave Storms from Stonegate. Good morning. Morning, Dave. Morning. Just hoping we could start with cash flow guidance. Great to see it take a step up. Could you help us understand just kind of some of the puts and takes that'll put you on either the higher or lower end of that guidance range? Yeah, maybe I'll start and let Lyle jump in. But I think, you know, in general, you know, we're seeing a good conversion of working capital into free cash flow. So our teams are focused on, you know, reducing DSOs and really matching the inventory that we're receiving to the market demand. So I think with the guidance that we laid out for EBITDA, we feel really confident in the free cash flow range that we've provided. Yeah, Dave, and I'll give a little bit of a little bit of detail there. If you think about the key contributors, that's gonna be maybe a swing, plus or minus an EBITDA, given our full year EBITDA range. And then the free cash flow range is a little bit wider, and that's the flux, is gonna be plus or minus on working capital that Neal talked about. So, if we're closer to the top end of our EBITDA range, I think we'll get a little bit less juice out of the working capital just based on higher accounts receivable. But if we're at the bottom end, I think we get the opposite. So they'll kind of net each other out. Understood. That's very helpful. Thank you. And then I know, you know, there's a lot of anticipation around returning capital to shareholders middle of next year. Is there any more color you can give us on what that may look like? I know you mentioned repurchases or dividends, you know, maybe just any variables that would sway your decision or the decision one way or another. You know, it's something that we're obviously thinking about, you know, a lot. We have some time, but I think to us, the key is we are gonna return cash to shareholders, something we really wanna do. And so we're gonna really evaluate, you know, all the options and see what makes sense, for long term. So we think it's a commitment that we need to be consistent with, and that's where we wanna be as a long-term company. Understood. And if I could ask one for international. I know coming out of the first quarter, the international markets were maybe a little slow to release their budgets. So that 50% number in 2Q, how much of that may be a catch-up? And how much of that maybe is a really good baseline for that going forward? Yeah, Dave, the 50% of our revenue that's international is really a shift from what was 35% last year. So as we've grown international, we've added Variperm, which is another contributor there, and U.S. is a little softer. As a percentage of our revenue, it's larger. Also, if you think about the sequential increase, overall international revenues were up 13%. So there we do experience some pluses or minuses around project shipments. So we mentioned some of the valves and coiled tubing catch up maybe sequentially, but I think very importantly is the market share growth that we've seen outside the U.S., whether that's around our casing hardware business, we mentioned artificial lift products, and some of that incremental frac power end sales that we had were aimed specifically at unconventional plays in Latin America and the Middle East. So, we've had some market pickup, market share gain there as well. Yeah. Very helpful. If I could ask just one more question. You mentioned you brought on a customer in drilling and completion, pretty sizable customer. Just curious as to what the overall customer acquisition environment is like, you know, especially given all the pickup in market share internationally. Yeah, you know, for us, you know, our, you know, one of our core values is remain customer focused, and we look at the markets where we participate and, you know, we wanna find customers where we can solve their problem. And for many of our products, they last longer, they allow our customers to go deeper, they reduce their overall OpEx. And so we wanna get that value proposition in front of as many customers as possible in markets where we have good scale and can generate more margins. And I think where we're seeing a kind of a, let's call it a secular trend, is the exportation of kind of, let's call it, technology that we've utilized in unconventional resources in the U.S., exporting that technology overseas. We've seen it in coiled tubing, we've seen it in stimulation intervention, we've seen it in other drilling. And so that's where we're able to take advantage, we've helped this industry, you know, the productivity gains this industry has achieved, come from products that we provide. We've seen that productivity in the U.S., and we're helping grow that productivity internationally with that same technology. That's all very helpful. Thank you for taking my questions, and good luck on the third quarter. Thank you, Dave. Thank you. Our next question comes from the line of Dan Pickering from Pickering Energy Partners. Morning, gentlemen. Morning, Dan. Hey, Dan. Canada, impressive performance there. I wanna make sure I heard... I think I heard flat quarter-over-quarter for Canada revenues overall, and I also think I heard flat Variperm quarter-over-quarter revenues. Is that, is that right? Canada was 5% up. So I think what we wanted to say is our casing, hardware, and artificial lift solutions, we grew our share there a little bit, so about 5%, but Variperm was essentially flat quarter to quarter. Okay. Despite, obviously, you know, spring breakup. Right. Right. And that, and that, I guess, certainly caught my eye because it's a pretty substantial difference relative to, you know, kind of your thought it could be down as much as half. Is there a, was there a customer win? Was it just steadier business than you expected? What's the... Or is it just getting to know Variperm and the, and the volatility in that business, and it, it surprised you a little bit? I think the steady is part of it. The other part is the share we gain by utilizing Variperm's, you know contacts, distribution network. I mean, they. That team up there has done a fantastic job with their customer base, and, you know, they, they've opened a lot of doors for us. And again, we're early on, on that revenue synergies, but we're, we're excited about that potential. Yeah, that's, that's awesome. Earlier in the year, you talked about sort of second half being stronger for Variperm, oil sands activity, et cetera. Is that still the outlook? Is there any update given, you know, the fluctuations we've seen in crude price? We don't really see a change in that outlook. It's something we'll monitor. I think with, you know, those big projects there and the drilling schedule, could something shift from, you know, from Q4 into Q1? I think that's possible. But right now, really no change in our outlook for oil sands development. Okay. So second half, better than first half, and the first half here has been a little bit better than you thought? Correct. Correct. Good. That's a, that's a nice start for that acquisition. I wanted to shift over, if we could, to the balance sheet. And so Lyle, I think I heard you saying we. Can you just walk us through the note redemption process? It's. We know it's $60 million. You've said August several times. Is there a specific date here? And then how do we fund that? Do we fund it, do we pull cash balances down a little bit more? Do we bump the revolver up? How do you see, you know, kind of processing that debt paydown? You know, thanks, thanks for the question, Dan. Basically, we're a little bit ahead of our process in that we did retire, we did redeem or buyback, sorry, $13 million worth of notes in the second quarter. Did that with cash on hand and our revolver. The $60 million, specifically in mid-August, our indenture of the notes requires a 30-day notice period to redeem notes. So on July 17th, we issued that redemption notice for $60 million. We'll redeem those in August on August 16th, for that first $60 million. When we think about where the funding is gonna come from that, it's gonna come a little bit out of cash flow in the third quarter and a little bit with addition onto our revolver. I think importantly, we ended the second quarter with $135 million of total liquidity, and that's cash plus availability of our revolvers. We've got a lot of dry powder there, and be able to redeem those notes with that. Do a similar process in the fourth quarter, to get the rest of those 25 notes redeemed by the end of the year. And Lyle, is there a similar redemption notice process? So, you know, you issued a press release saying, "Hey, we're gonna redeem the remainder." And so will it follow the same, will it follow the same process? We'll see something in October, November, and that redemption then would follow 30 days later? It would, Dan. That would be the similar process. Okay, good. That's helpful. And then my last question is one more focused on operations. Your valve business, you know, you had a nice bump. Can you talk a little bit? I s that a restocking by distributors? Was it the Middle East growth that drove that? I'm just curious if we're seeing any change in business dynamics in valves? Yeah. I'd say, no, no change in business dynamics, no restocking by distributors. This is more of product deliveries in both the U.S. and in Arabia. So, you know, pleased with the kind of trend we're seeing in Saudi. I think it's gone well. And so we'll keep that up. But no, no real change in the valves industry dynamics there. Okay, thanks. I said it was my last question, but I do have one more. Kind of every other quarter, I ask you about the environment for, you know, bolt-on acquisitions and opportunities. You know, Variperm, obviously, you're early in that process still, but things seem to be going well. What's the overall environment for things like, you know, another Variperm or opportunities? And as you're answering that question, I guess North America is sloppy right now. Would you stay away from North American exposure or, you know, do you think about North America as an opportunity? Yeah. No, good. So I think, you know, obviously, Variperm for us was, was a home run, right? Value, margin. I'd love to find another one. Those, those will be hard, hard to find. We'll continue to look. I think the, the overall environment, though, there are, there are, there are opportunities out there. I think activity, you know, is robust. The, the deals seem to be, be getting done. And with our kind of breadth of product lines and our geography diversity, you know, we can kind of hit both the U.S. and the international. We're, we're not running away from the U.S. You know, I think ideally would wanna find a, a business that would have both a U.S. and an international presence. And so we'll, we'll continue to look for that. Really, our criteria, though, is we wanna find the, you know, strong industrial logic, you know, where it fits in our portfolio, and we're gonna be conservative with the leverage on our balance sheet going forward. Okay. Thanks much. Well done. Thank you, Dan. Thanks, Dan. Thank you. Our next question comes from the line of Jeff Robertson from Water Tower Research. Thanks. Good morning. Neal, you spoke a little bit about revenue per rig, and I'm wondering if you can talk both between the U.S. and in international markets, whether you see further gains in the type of sales mix that will offset the weakness you see in the rig count. And then secondly, are those gains pretty sticky if you start to see some sort of improvement in rig count in 2025? Yeah, good, good question. So yeah, I think in the U.S., we have, you know, methodically increased our revenue, you know, let's call it U.S. revenue per U.S. rig. You know, if we were to estimate, we're probably up 4% or so year-over-year, and that would, you know, truly be market share gains. I think on the, you know, with about 75% of our sales being activity-based driven, in, you know, my experience, our experience with the business, we have that once you get in with that customer and you deliver, you do have some stickiness, right? And you understand their needs, what they value, and you can have the product, you know, ready for them, and you can deliver on time. And those are really key points. So yeah, I think our expectation and the challenge we're gonna put to our teams is, yeah, not only do we need to hold those customers, we do need to grow it as the market rebounds. Neal, are some of those gains driven by the service providers wanting, FET's products, or is it a mix of that plus the E&P operator or the well owner saying, "If you're gonna drill our well, we want these types of products, on site," that FET supplies? Yeah, I think it's a good combination of both. So we do see pull-through, you know, from the E&P to the service company for certain products we have that help the service company increase their productivity. We also, you know, about half of our sales are directly to E&P operators already, so we're able to put that value proposition directly to them. So combination of both. You know, our strategy is we wanna differentiate, we wanna deliver technology and solutions that make our customers more efficient. So the better we are at, you know, laying out that value proposition, the more often we're gonna grow that share. On renewables or energy transition, you mentioned power generation as a potential new revenue opportunity in your Jumbotron XL system. Is that because you're seeing requests for bids and people doing fabrication studies, or are you actually starting to see orders for products to build out these types of systems around the world? Yes, so we've delivered these sales already, you know, last year and this year. But what's exciting to us is the pipeline does seem to be, you know, expanding really rapidly. And I think, just as maybe more of an industry comment, that as, you know, as these data centers are being built out, and, you know, there just seems to be a lot of concern about where the power is gonna come from. So we're seeing more of that, let's call it, mobile power gen, being utilized, you know, in different applications. So, we're seeing that bid activity directly, and we've seen a really big spike. Again, these, these projects do take time, but we, you know, we see that as a, as a long-term growth driver for us. Pardon me. Then to follow on that, do those types of projects create aftermarket business through servicing and replacement cycles? They do. You know, our units are really robust, so they do last a long time. And so that, I think it's a longer service cycle for us. But once that unit's in place, it'll run for, you know, a decade. And so we'll have a tail to that. It'll start to, you know, it'll be a couple of years before we see any aftermarket from it, but once that's installed, we got a long tail there. And then a last question. On the Middle East, in your revenue growth in the second quarter, are you seeing projects or big scale projects that you see that continuing in, not necessarily the quarterly growth, but are you seeing continued operate exposure for increased sales as you look out into 2025 and maybe even 2026? Yeah. Yeah, I was actually just sitting with one of our Middle East sales leaders yesterday and, you know, talking with him and just, you know, he sees a good pipeline, and I agree going into 2025. Really, no, you know, no change to the trend. And so we'll continue to benefit from that. And I still think there's a lot of opportunity there for us to, again, keep exporting not only the unconventional technology, but our downhole technology as well. Just on margins, Neal or Lyle, with the 12.5%-13% margins in the first two quarters of this year, do you think the product mix, as you think about 2025, will be similar to 2024 and lead to the similar type margins, or do you think there's room for expansion? Yeah. I'll work on that one, Jeff. If you look at our overall margins, they've been relatively flat post the acquisition, post the integration of Variperm, which gave us a really nice boost. And you mentioned mix, but clearly, in my comments, we talked a lot about mix being the driver. And so that is something that we're looking at. I think where we can control mix and influence mix is with our market share gains that we have. So take, for example, Artificial Lift and Downhole. Sequentially, incremental EBITDA margins were about 37%. We talked a little bit earlier about Variperm. Their revenue was down just slightly, so call it roughly flat, but their overall profitability was up quarter-over-quarter. We also talked about our other downhole products being stronger. Those come at a nice, healthy margin, offset a little bit by softer margins with valves. So as we continue to grow a downhole product line with share gains, I think that will be a boost and a tailwind to our margins. The other tailwind that would come is through operating leverage. So our revenues have been decently flat with the market activity coming down. But if we get that turn and we can see a run up in revenues, we could benefit. Our margins will benefit from operating leverage as well. So a couple levers that would make those go higher in the future. Thank you very much. Thank you, Jeff. Thanks, Jeff. Thank you. One moment for our next question. Our next question comes from the line of Eric Carlson. Hey, guys. Morning. Morning, Eric. Hi, Eric. Another great quarter. I mean, it's hard to complain when you can almost generate 25% of your market cap in cash in a whole year, which I think the international markets are probably a little bit underappreciated by the market currently, but maybe just a little bit more on Canada and when you think about activity there. I think I saw, like Baker Hughes is 144 oil-specific rigs currently, which is, I mean, maybe 20+% above last year. And just could you maybe just share a little bit on when you think about Canadian activity? Obviously, am I correct in thinking that being more oil-weighted is a benefit to Variperm specifically? Yes. Yeah, absolutely. You know, there's a certain percentage of those rigs that you mentioned that work in the oil sands, and so it's timing of those wells that are being drilled. And so I think, you know, Variperm, you know, we always, when we did the acquisition, we felt had a long-term run rate there, not only with new projects, but as the fields would be, let's call it, infill drilled, just to keep up with the decline rate. Just to stay flat, they would need to keep utilizing their product. And then the other, maybe the other part of that is the newer wells today typically have longer laterals and require more units of Variperm product per well. So I think that's another secular trend that we're pleased to see. So yeah, more oil rigs in Canada should absolutely help Variperm. Great. And then maybe just on that longer lateral comment, in the industry broadly, I mean, obviously, when you think about kind of the business lines you have, if you listen to any of the E&P calls, you hear basically longer laterals, more stages completed per day. And when you think about, like, a four-mile lateral versus a two-mile lateral, obviously you need less rigs to complete that work, but the intensity of those rigs and the materials are there. So when you think about just building product mix for the future as technology continues to improve, I mean, do you think about how do we benefit from more stages complete or, call it lateral miles drilled or, or whatever that may be, and focus less on kind of the, the pure rig count number? Can you just provide some thoughts around that? Yeah. No, that's, you know, you hit right on the kind of the trends that we see. I think, you know, we generally refer to rig because it's, you know, it's published weekly. It's something, you know, everyone has access to. You know, we internally track, you know, we track stages, we track wells. There's a little bit of a lag in the data, so it makes it hard to be forward-looking. But we all know, you know, our focus is really the service intensity. So, as you know, you made a mention of longer lateral. So that would be, you know, the lateral gets longer, the coil tubing string is longer, so that's more revenue per string. The wireline string is longer, so that's more revenue per cable. You know, as you pump more stages per day, you're gonna wear out your power ends, you're gonna wear out your flexible hoses more quickly this year than you did the year before. So you're gonna see increased replacement cycle. So all that will benefit, you know, will benefit us. So yeah, you're right, rig count maybe isn't the best view of our business, but over time, we're gonna increase our U.S. revenue per U.S. rig. You know, and I think we, you know, we have, you know, we said about 4% or so already, and we'll continue to improve on that as time goes forward. Great. And then maybe you can just share a little bit more, info on kind of the Middle East, specifically. Obviously, you see a lot of unconventional gas announcements, and listening to kind of the other service providers, they expect to deliver rigs into the Middle East. And maybe just, I don't know, like, what is the market opportunity there? And I even saw, like, the announcement. I think there was a post somewhere where you guys kind of are going to manufacture the radiators within the Saudi Arabian facility now. Maybe correct me if I'm wrong. But just to, can you provide some context to the market opportunity there? I mean, obviously, numbers are way above pre-COVID, so you guys are kind of executing there. But does that become, I mean, is that probably the biggest growth potential, and then all incremental U.S. activity just becomes a ton of torque to the upside? Or how do you, I mean, I guess, how do you think about the product mix geographically going forward? Yeah. I think your last comment there was really spot on, that we do see, let's say, long-term growth in the Middle East. If the U.S., you know, and Canada were to return, the U.S. were to return, you know, back to, let's call it, more normal levels, we would see a ton of torque. You know, historically, international or, you know, Middle East was maybe less service intensive, so you didn't see the you know, the types of sales per rig that maybe you would see in the United States. However, that is changing, and then, and that's a you know. You mentioned our radiator manufacturing that we're looking to conduct, we are conducting in Saudi. They are starting to drill unconventional wells in a big way. That's gonna use a lot of coil, it's gonna use a lot of wireline, it's gonna consume a lot of power ends, and they're gonna require new radiators to, you know, the newest types of radiators for their, for their frac fleets there. Eric, we are, we are bullish about the Middle East. We're also bullish about the offshore markets and our subsea business. So if you think about that business, and one of the big drivers that everyone watches is subsea wellheads or subsea tree orders, and subsea tree orders have been up and strong. We mentioned last quarter, we're seeing higher and higher utilization of the existing ROV fleets, which is a big driver for us. Initially, that's driving spare parts. But our pipeline of new inquiries for incremental ROVs to add to our customers' fleets is meaningful, so we're excited about that, as well as opportunities in the defense sector. So while we do see a lot of excitement around the Middle East, we also see opportunities coming on the subsea side as well into next year. Okay, great. That's all very helpful. And then I guess this is my last question/comment, and just kinda want your thoughts. I mean, it's – we're a little bit ways away, but it, it's getting closer. And when you think about kind of the potential to return capital. I guess I would just encourage you, if you're trading at a 25% free cash flow yield and a 50% discount to your peers on an EBITDA multiple basis, to put every dollar possible to buying shares. Now, obviously, if the market reprices you, dividends are great, and then using share repurchases to either increase free cash flow per share or the ability to pay dividend per share without increasing the cash outlay, that's great. But at current valuation, I would pound the table on buying back your shares, and if that reduces liquidity or whatever it may be, it's kind of irrelevant from a long-term shareholder standpoint. So I just kind of like your internal comments with where kind of valuations do not fit relative to peers. I mean, obviously, this is hypothetical, because you can't do it at this point in time, but if you could return capital to shareholders, like, what are, what are your guys' thoughts once you get to that point? Eric, great, great question, and as Neal mentioned earlier, we're working through that process, but we see the same thing that you do. With our free cash flow yield that we have, it's tremendous. There's not many companies that have that as an opportunity. And part of that is because our multiple, our valuation on a multiple basis is less than a lot of similarly situated companies. So, either way, either that multiple recovers and we're pleased with that, and/or we have an opportunity to retire shares, buy back shares, that would be really strong. So, things that we would definitely look at, like you mentioned, we'll come up with that plan and share that when we get closer. Great. Well, great quarter. Thanks, guys. Appreciate you taking the questions. Thanks, Eric. Thank you, Eric. Thank you. At this time, I would now like to turn the conference back over to Neal Lux for closing remarks. Thank you again, Gigi, and thank you for your support and participation on today's call. We look forward to talking to you all again in early November to discuss FET's third quarter 2024 results. This concludes today's conference call. Thank you for participating.