Welcome to the Ranger Energy Services third quarter 2022 investor conference call. I am Shelley Weimer, Vice President of Reporting and Finance. All participants will be in listen-only mode until the question-and-answer portion of this call. Please note this event is being recorded. I would now like to turn the conference over to Melissa Cougle, Chief Financial Officer of Ranger. Good morning, everyone. Joining me today is Stuart Bodden, our CEO, and Justin Whitley, who has joined us at Ranger as our new General Counsel. We're excited to have him on board. Before we begin today, I would like to remind all participants that some of our comments today may include forward-looking statements reflecting views from the company about future prospects, revenues, expenses, or profits. These matters involve risks and uncertainties that could cause actual results to differ materially from our forward-looking statements. These statements reflect the beliefs of the company based on current conditions that are subject to certain risks and uncertainties that are detailed in our earnings release and other public filings. Our comments today also include non-GAAP financial and operational measures. These non-GAAP measures are not a substitute for GAAP measures, and they may not be comparable to similar measures of other companies. A reconciliation of these items is presented in our earnings release, which is available on our website. I will now turn the call over to Stuart. Thank you, Melissa, and good morning to everyone joining us today. As Melissa just mentioned, Justin Whitley has joined Ranger as General Counsel, and we are very excited to have him on board. Justin brings a wealth of oil and gas service experience to the company, and I know he's going to be a great fit for us. Again, welcome to the team, Justin. All of us are excited to speak with you this morning to share our Q3 results, discuss our outlook for the sector and Ranger, and outline some of our strategic thoughts as we look to the future. Ranger delivered another quarter of strong performance in Q3, with all three of our business segments showing increased revenue and expanded margins during the quarter. Our strong performance is the direct result of the hard work of our teams and our continuous focus on service quality and disciplined execution. We have spent a year integrating the companies acquired during 2021 and getting the fundamental building blocks in place to execute with excellence. Due to those efforts, financial performance at Ranger is much improved from prior years and even the first half of this year. Our performance in Q3 shows that our 2021 acquisitions have created shareholder value and provided valuable scale and operating leverage, which have positioned the company to capitalize on what is expected to be a multi-year upcycle. We hosted our first leadership team meeting this past quarter in several years, and our team developed new and shared objectives to find incremental efficiencies and opportunities for growth across segments. We are creating a new wave of initiatives and organizational changes, such as the one that brought Justin to our team. As our Ranger vision states, these new efforts will help us strive toward new thinking and enhance our positive energy culture. Looking at our specific results, the company grew revenue by 50% quarter-over-quarter, nearly doubling the pre-COVID revenue levels of the company. Our adjusted EBITDA increased 69% to $30 million, with EBITDA margins improving by more than 500 basis points to just over 17% on the back of increasing prices and activity as well as strong operating leverage. Our revenue and EBITDA levels are the highest that we have ever seen historically, and we have operating capacity and assets yet to tap into the future. Our operating performance, continued focus on managing working capital, and ongoing sales of surplus assets has allowed Ranger to deleverage by $13 million this quarter, reducing our total debt balance by 19%. This year, Ranger has been able to nearly half its debt load and currently stands at a leverage level that is well below 1x its current EBITDA run rate. I'd now like to spend a few minutes to talk about our segments. In our high-specification rigs business, we continue to increase the total number of rig hours worked, which totaled 123,000 hours for the quarter and approximately 3% increase quarter-over-quarter. Rig rates have moved higher than at any time on record for Ranger at $648 per hour on a blended basis. We anticipate these rates will be stable going forward, with the possibility of some additional moderate gains to be had during 2023. Our active rig count has stayed steady the past quarter with puts and takes for rigs moving between customers and into the yards for maintenance and certifications. Our teams continue to be focused on strong execution, cost management, and operating efficiency, which we feel will drive more market penetration and continue expanding margins. We received several customer acknowledgements this quarter, most notably the Rig of the Quarter award from Pioneer Natural Resources in the Permian region. We've been proud of the partnership and relationship with this key customer. We also received acknowledgement from two separate super majors this quarter for outstanding safety in our operations and effective use of stop work accountability. Our stop work accountability program, which we call I Got Your Six, stresses the importance of stopping activities that are unsafe, confident in the knowledge that management has got your back. For our rigs business in Q4, we do expect typical seasonality and holiday impacts. We are seeing some isolated impacts of budget exhaustion, although the few rigs that have been released have largely been redeployed with other customers. Moving to our wireline segment, revenue increased 22%, with segment EBITDA increased more than twofold to over $11 million with margins of 19% in Q3. This improvement is the result of a series of changes we made to this business earlier in the year, including changes in leadership, a focus on improving service quality, redeployment of assets, and ensuring our rates are appropriately profitable. In short, we have made significant strides in this business. We are proud of this, of this progress and continue to believe there is more potential in the wireline segment. We do expect to encounter some seasonality, particularly in our northern operations during the latter part of this year and into the first quarter of 2023. As activity begins to pick back up in the first quarter of next year, we will be pushing for additional growth and utilization of our wireline assets. Finally, in our ancillary services businesses, we had a very strong quarter, more than doubling segment-level EBITDA and realizing segment-level EBITDA margins above 25%. Coiled tubing, G&A, rental and fishing, and Torrent, our fuel gas processing division, all saw increased revenue and margins quarter-over-quarter. Our coiled tubing business has grown 167% year-to-date and produced 25% EBITDA margins in Q3, while our rental and fishing business has grown 65% since year-end and is realizing margins of 24%, showing promise as well. As we approach year-end and reflect on the company's accomplishments and where we go from here, it is clear that our acquisitions executed last year are now delivering strong returns, demonstrating the value of our consolidation strategy for Ranger and for the sector more broadly. The Ranger management team and board believe that consolidation remains an essential and ongoing process for the company within both existing and adjacent product lines, and we continue to be actively engaged on this front. We regularly field inbound opportunities and maintain active dialogues with potential partners to look at ways to create value together. We hope our investor group shares our excitement about this quarter's results. Our teams across all three of our business segments have worked hard and shown incredible dedication to the company, and our financial results back them up. It has truly been a team effort, and I am proud of what they have accomplished. I'll talk more about our outlook and strategic priorities here shortly, but I'll now turn the call over to Melissa to walk through some of the details of our financial results. Thank you, Stuart. It was a great quarter, and I think really gratifying for the team here at Ranger to see the results of all of our efforts demonstrated financially. Our third quarter results were excellent, with activity increasing in all service lines and pricing gains experienced earlier in the year showing their full quarter effect. In reviewing the details of our financial results, our consolidated third quarter revenue grew 15%, increasing from $153.6 million in the second quarter to $177 million in Q3. The company posted net income for the quarter of $13.6 million, an improvement of $14 million over the second quarter's net loss. Going forward, we do anticipate generating positive net income in future periods and should be in a positive retained earnings position at the end of the year. Adjusted EBITDA improved from $18 million in the second quarter to $30 million in Q3, a 69% increase, with margins expanding 500 basis points over that same period from 12% in Q2 to 17% in the third quarter. At the segment level, revenue for high-specification rigs increased from $76 million in the second quarter to $79.7 million in the third quarter due to an increase in both activity levels and the full quarter effect of pricing gains. Rig hours and rig rates both increased from the prior quarter, driving the 5% quarter-over-quarter improvements in the top line. Segment EBITDA for high-specification rigs was $17 million in the third quarter as compared to $14.2 million in the second quarter. Margins in this segment expanded to 21% during the third quarter from 19% in the prior quarter due to some unplanned charges during Q2 that were non-recurring. In the wireline segment, revenues increased by 22% from $49.5 million in the second quarter to $60.6 million during the third quarter. The increase in revenue was attributable to an increase in activity levels for our completions business, with stage counts increasing by over 10% from 8,000 stages in the second quarter to 9,200 stages during the third quarter, as well as strong activity levels within our production business. We also gained incremental improvements in pricing during the third quarter in this segment. Our processing and ancillary services revenue increased from $28.1 million in the second quarter to $36.7 million in the third quarter, a 31% growth rate. All ancillary product lines grew, with the strongest growth coming from our coil tubing business, with revenue up nearly 50% from the prior quarter, attributable to the deployment of an additional coil unit. Adjusted EBITDA for this segment increased by 106% quarter-over-quarter from $5.1 million in Q2 to $10.5 million in Q3. On the G&A front, costs decreased by $1.2 million over the period from $12.2 million in the second quarter to $11 million during the third quarter. The quarter-over-quarter changes in G&A largely relate to integration costs, legal settlements, and severance, all of which we expect to continue to decline during the fourth quarter. Turning to the balance sheet, the company reduced its debt, net debt load by $13.2 million or 19% quarter-over-quarter and is reporting adjusted net debt of $45.2 million at the end of the third quarter. The company was able to pay down this debt with operating cash flow of $10.7 million for the quarter and asset sale proceeds totaling $6.5 million. With that, I'll turn it back over to Stuart to address our outlook and thoughts on the strategy front. Thanks, Melissa. I would now like to provide more detail and clarity about our thinking for the business moving into Q4 and then into 2023. We continue to see demand and pricing resilience across all of our service lines. We have seen isolated pockets of budget exhaustion, although customers have committed to picking those rigs back up in early 2023. The few rigs that have been released have already been redeployed to other customers, many for extended work programs, likely setting up increased market tightness for our services in early 2023. Although we are mindful of a potential recession, our customers have indicated they intend to hold activity levels and maintain production targets during 2023, and we see steady demand throughout the year with opportunities for incremental growth. We recently updated our full-year guidance for 2022 and now anticipate revenue to be between $615 million and $620 million for the full year, which exceeds prior full-year guidance of $580-$600 million. Full-year adjusted EBITDA margins are expected to be near the top end of prior margin guidance at around 13%. During the fourth quarter, we are expecting typical seasonality and holiday impacts and believe that consolidated revenues could decline by mid- to high single-digit percentages, but that will be highly dependent on each individual customer. Adjusted EBITDA will likely be affected by the seasonality as well. Although the team remains highly focused at staying near our 15% EBITDA margin target through Q4. We do believe that we have harnessed great momentum during the back half of 2022 that we can build upon in 2023, and we are working with our teams right now to pin down those opportunities and develop specific budgetary targets for next year. We are developing plans to grow utilization across all business segments and will be ready to shed more light and provide additional details when we report out our full year results during the first quarter. The company is using the second half of 2022 as a 2023 budget baseline and does believe that there are additional opportunities to grow from these levels. Our focus through these budget discussions will be to push our teams to deploy assets where there is sufficient market demand and make incremental improvements to operating efficiency to facilitate additional margin expansion. Finally, the management team and board have spent significant time this quarter thinking about next steps for the company in light of the successful integration of our 2021 acquisitions and our desire to drive shareholder value creation. I would like to share some of those thoughts with you now. Over the quarter, we've spent time looking at our strategic priorities as a company and gathering a number of investor perspectives as well. There are commonalities to these discussions that are forming the foundation of our go-forward thinking. The Ranger management team and board believe that the company should ensure balance sheet strength and resiliency in any economic environment and during any part of the commodity cycle. The vast majority of our investors have echoed this belief. The company believes that a balance sheet without debt is absolutely viable, and that we should continue to pay down debt and de-leverage the company. As a smaller public company in a sector that remains highly fragmented and competitive, the company should be in active pursuit of appropriate consolidation opportunities in the coming years. Growing the company and gaining additional scale in this space is an essential part of the company's strategy to generate shareholder returns over the long term. We have and will continue to be actively engaged on this front, and we believe maximizing financial flexibility and balance sheet strength provides us an advantage in these discussions. Finally, we need to remain flexible and be focused on making sound investment decisions. With the dynamic sector and market backdrop, we will continue to evaluate our shareholder return framework and the appropriate time to consider either a share buyback or dividend. This concludes our prepared remarks. We have appreciated your time today and we will now open it up for questions. We will now begin the question-and-answer session. If you have dialed in and would like to ask a question, you may dial star 9 to raise your hand. Once you are selected to answer a question, dial star 6 to unmute. At this time, we will pause momentarily to assemble our roster. Caller with the phone number 2887, please ask your question. Yes. Hi, Stuart. This is Brandon Blossman. Thanks for Morning, John. How are you? Good. How are you? Good, thank you. Great, great numbers out today. You know, you guys have done a really excellent job running the business, and I just would love it if you guys could expand a little bit on what you intend to do with all the cash flow. You kind of speak explicitly around paying down debt, rock solid balance sheet, yet at the same time, you talk about how currently your net debt is, quote, well below 1x EBITDA. So I would say that is pretty much a rock solid balance sheet. All of your competitors are currently returning cash to shareholders in some form or fashion. It seems like something that would both support your stock, which would give you a currency to use to do further acquisitions as well as kind of seemingly do the right thing for shareholders. But I'd love your thoughts on it. Great. Thanks for the question, John, very much appreciated. Yeah, as we've said, there's been a lot of discussion between the management and the board. You know, we also through the quarter spoke with really a large number of our investors to get their perspectives as well. I think through those conversations, really a couple of things came out. The first thing is that really a strong desire to have just be net debt zero. We do think, as you said, that our balance sheet is very strong, but we have a very clear target to be net debt zero. That's kind of the first priority as we go forward. We often feel like that, you know, in our current sector or current segments and the adjacent segments, there's still a lot of consolidation opportunity. We're having a lot of conversations, and we just feel like we need to be flexible financially to act opportunistically if something develops. Our capital return framework is gonna be an ongoing discussion. Again, lots of conversation with the board and investors, and we would expect that will continue in the coming, you know, months and quarters. You know, just net debt zero with this level of EBITDA. I mean, your adjusted EBITDA was $39 million for the quarter. You have net debt of $57 million. You know, that target will be achieved arguably in the next four months, if you continue at this run rate. Your equity is obviously consideration for further consolidation, I would imagine. Is it not? I mean, what do you intend to do? How can you buy a company in an accretive fashion when your stock's trading at, you know, three times cash flow without getting your stock price up? Yeah. Again, you know, not to be a broken record, but it really was we again had a lot of discussion. You know, kind of where we reached was we thought that the best thing that we could do for maximizing the long-term value of the company was to get to net debt zero, be flexible on opportunities. Again, John, like, this is gonna be an ongoing discussion and dialogue with the board. I don't think this is, you know, again, I think just as market conditions develop, we're gonna continue to reevaluate our framework. Thank you. The next question will come from the caller with the phone number of 8215. Please go ahead. Hey, guys. The new call-in system is confusing for an old person like me. It's John Daniel here. Hopefully you can hear me now. Really nice results and balance sheet this quarter and, you know, good call on the debt paydown strategy from someone who's lived through way too many cycles. Hey, Stuart, I think if I heard correctly in the prepared remarks, you talked about an expectation for stable rates going forward in 2023. As you may know, there are differing views on activity levels next year. Patterson, for instance, yesterday cited their internal customer survey, which was actually quite positive, which would call it another 90 rigs from now through, you know, 2023. Let's assume they are right? Let's call it a +10% move in the rig count, drilling rig count. In that scenario, would you still see rates being stable, or do you think there'd be further upside from here? I think in that scenario, there would absolutely be further upside, John. Okay. As we speak to various OFS enterprises, there still seems to be a lot of interest in further industry consolidation. You noted that in your prepared comments. I think you said you still continue to see inbound inquiries coming in. Right. It just feels like the valuation difference is kinda what keep further deals from happening. I don't think anyone would disagree with the industrial logic of further consolidation, but what do you think it's gonna take for the sellers to have more reasonable expectations? I guess where I'm going with this, Stuart, is we're getting to the point where even though EBITDA multiples might look low, the valuations on a replacement value would start to screen high, and there's nothing more unappealing than overpaying on an asset value. Just your thoughts. Yeah. No. Again, thanks for the question, John. You know how we've been really thinking about it, and I would say the majority of our conversations would be primarily equity deals. Rather than us, you know, going and kinda raising a, you know, a bunch of debt to go pay for something. That, that's been most of the discussions. Again, I think in a way, that's why we're being, you know, ultra-conservative with the balance sheet because some of those targets do have some debt themselves that we would potentially have to absorb. Again, I think generally it would be the equity deals. Okay. Last one. I might squeeze two more here, and this one might be tough, but I'll just throw it out there. In terms of the M&A, is it the private equity people or the incumbent management teams who tend to be the greatest obstructionists in getting deals done? You can defer if you don't answer that. Well, yeah. Well, it is a tough one. Yeah. Just I'll speak from personal experience and just say that I think that is definitely true. I do think that just given, the duration that many of these companies have been held by PE firms, I think some of those social issues appear. I'm not gonna say that they're easy to overcome, but I think people are having more realistic conversations. Okay, great. I'm gonna go back to operations here because I was really impressed by the comment on coiled tubing, the rate of improvement. To the extent you have any granular data points in your notes there, if you don't mind, give me your thoughts on how you see Ranger participating in that market and opportunities there. Yeah. You know, in the quarter we put our fourth large coil unit out to work. The fourth quarter results don't fully reflect the full utilization of that unit. That said, I think we do expect some seasonality. At the moment, we have been supporting that business. Again, it's a DJ-focused business. I've been supporting it. At this moment, we don't intend to go outside of the DJ. Okay. We really like the equipment that we have. We really like the team that's leading it. At the moment, we intend to be pretty focused on the DJ. Okay, great. Yeah, really good quarter. Thanks for letting me take that one. Yeah. Thanks. I appreciate it. The next call will come from the caller with the phone number of 84351. Please go ahead. Hey, good morning, Stuart, Melissa. Luke Lemoine from Piper Sandler. Good morning, Luke. Stuart, morning. Stuart, you had a nice increase in your wireline stage count in Q3, and you've been highlighting the potential for improved results here on just flipping, you know, available trucks to active. Can you talk a little bit about how this progressed during the quarter versus maybe how much efficiency improvement you saw from 2Q active trucks, along with how many trucks maybe could go back to work in 2023? Sure. Probably a couple of just comments about it. You know, right now the results, you know, on average we're operating what we call kind of low 40s on the number of wireline units that we're operating right now. We have upper 60s, so obviously we have some room to run there. Really, there's a couple of things that really drove the increase in margin, but we still think that we have more to do. The North in particular, both in our production segment and in our Plug and Perf, so completion segment, showed both nice revenue and margin expansion. Pricing in Midland or in the Permian Basin around completions in particular had really been challenged, you know, through 2022 and coming into the quarter. We feel like we made some progress there. It's not all the way where we want it to be yet, but I think we are, you know, we are on pricing and Plug and Perf, we are still below pre-COVID levels. You know, unlike rigs that is over. We do think there's still some opportunity there. The North really had a great quarter. Okay. Good deal. Thanks much. Yeah. The next question will come from the caller with the phone number 9243. Please go ahead. Hey, I think you called me. This is Derek Podhaizer from Barclays. You like the number system. I feel like Jean Valjean from Les Mis or something. Interesting. Interesting you said that. Good morning, Derek. How are you? I'm good. I'm good. Collect my thoughts here. I just wanted to hit on the budget exhaustion comment a little bit. Obviously, not getting that much from your peers on the pressure pumping or land drilling side. You mentioned this might or will extend into first quarter, and you're really planning on maintaining your strategy as you exit first quarter. That surprised me a little bit. As far as seeing that for the first quarter, I would think we would be more like a coiled spring and hit the ground running. I know there'd be some weather in first quarter, but can you just walk me through that a little bit? Maybe why that's. We should expect something different from you versus some of your peers. Is that a mismatch? Is that how operators drill and complete their program? Just some more color on that would be helpful. Sure. You know, the thing I would say is, you know, where we're seeing it particularly is in the high-spec rig business. A lot of that is just because of the amount of production exposure we have, and there are some drill-out rigs. Again, what a couple of our customers have said is that they were out of budget, they were out of wells to complete. They wanted to stop that, you know, kind of mid Q4, and then pick them back up in Q1. Now, we've had demand that's kind of been building up behind. Most of those rigs have already been redeployed. You know, we're now in a situation, and maybe this goes with your coiled spring comment, we're now in a situation where even though there was some budget exhaustion, those rigs are now being put to work, and we know we have demand coming on the backside in 2023. It could get pretty interesting as we exit 2023. Yeah. I'll just add on, Derek. I think what I heard from your question, what we're trying to convey is there's actually kind of two different phenomenon going on. The isolated budget exhaustion, to Stuart's point, you heard there. When we talk about extending into Q1 of next year, that's really not budget exhaustion clearing. That's really the winter effect on the backside of that. There's sort of two different phenomenon not connected to each other that we just sort of think if there's a really hard winter, that we could see a little bit of depression continuing into Q1 next year. We're not looking at them as really connected events. It's more the winter phenomenon as one and just really isolated pockets. I don't think we've seen the same and, you know, nothing to add on Stuart's comment on the budget discussion. Got you. Okay. No, that's helpful. I appreciate the color there. Last month, you put out some, maybe some bookends as far as what 2023 could look like on your current asset base. Could you refresh our memories there? I think that'd be important to walk through, and then if you have some preliminary thoughts where you might increase that soft guidance to a bit more stable, and then what you're thinking of 2023, given the assets that you currently have. Right. Yeah. I think you're referencing our investor relations deck that's on the website, where we present what we thought was potential capacity. I mean, I think we were trying to be clear that that wasn't necessarily guidance. If you looked at that, there was still, from our current run rates, kinda 10%-15%, you know, additional revenue growth with our asset base that we think we could realize. How we're kinda thinking about the budgeting process is, you know, our experience is, there tends to be seasonality in Q4 and kinda the early part of Q1. The way we kinda think about it is to take Q3 and what we expect in Q4 and take the second half, which is why we had kinda guided around that. That's really sort of the baseline, right? When you think about kinda revenue and margins when you take those two quarters combined. Does that make sense? I think as we do. Yeah. As we move into budgeting season, we're taking that as "the baseline" and then looking for opportunities to grow off that. I think that the growth for next year will be what is of that utilization that you saw in the investor deck, how much of that can we reasonably expect to get online next year? I think those are just very early conversations that I just don't think we're ready to tell you how much of what was in that deck we feel like we can really get up after. We're doing very much a bottoms up. Every district is going through and saying, "These are the customers, here's the programs." It's just gonna take us a little bit of time to get arms fully wrapped around to give you better guidance around with it. We feel very confident we can grow from the back half of this year if we look at that as a baseline for all of next year. We're just not ready to really say how much. Got it. Understood. Fair enough. Thanks for all the color. Appreciate it, and turn it back. All right. Thanks, Derek. Thanks. The next question will come from the caller 9243. Please go ahead. Good morning. This is Bill Kim with Presidio. How are you guys? Good morning. How are you, Bill? Good quarter. Just wanted to follow up on a couple items. I guess the first thing is on the wireline side. It's good to see the progress there 'cause I think there's a lot of untapped earnings potential in those assets. But, you know, could you give some color on how many active wireline units were operating in Q3? On average in Q3, it was kinda 42%-43%, you know, depending at the time, but low 40s%. Sorry. I guess. Yeah. No. I was gonna say that does include, obviously, depending on the work, sometimes we would have to send a backup truck, and that's in those numbers. Really to think about kinda 42, 43 active trucks. Running trucks. That's a big gap from, you know, where you were last couple quarters. From what I recall, weren't those numbers average active wireline units closer to 14 or so? It should have been higher than that. Yeah. Why don't we kind of go take it... We can follow up with you, Bill. Yeah, we'll follow up with you, Bill. We would argue it's been pretty consistent. There might just be wires crossed there, but we can follow back up with you, and make sure you've got the right information. I think the trucks have been running largely in the forties, through really Q2 and Q3. Yeah. Might be. Probably Q1 was at a more depressed level, certainly. Yeah. Got it. Okay, great. Yeah, we can follow up on the call. Next question, regarding G&A, I mean, it's staying somewhat elevated, although, you know, it's down from previous quarter. You know, if you looked at the beginning of this year and late last year, management, you were guiding for somewhere around $16 million-$17 million per annum as a run rate. Now, that's gone up quite a bit from here, and I understand that there's been some transaction-related integration-related expenses. You know, I wonder if maybe we can reset here and, you know, reset expectations as to what we can expect going forward once all these integration expenses are done with. Yeah. No, it's a good question, Bill. I do think I don't know that I was aware of the 16-17 per annum guide before. That does seem pretty low. What I will say is you have a phenomenon that's showing up within the G&A where a lot of that transaction and integration it actually kinda goes and then comes back out. That's where all of the transaction and integration sort of is housed, but then ultimately gets adjusted out for EBITDA. When we look at sort of pure G&A, you have a run-rate G&A, if you will, we've been tracking more between $7 million and $8 million, and I think that, you know, probably the $8 million is around, you know, that's kind of if I was to give you more, you know, conservative, I see us probably edging up just a little bit on the back of all the growth this year. I think about $8 million per quarter is probably where we would be, which is meaningfully higher than $16-$17 million, but again, much lower than the $12 million and $11 million we've seen. Yeah. Great. Got it. That's helpful. Couple of balance sheet items. You know, what, how exactly would you describe the contract assets on your balance sheet? Is there an offsetting item on the liability side? Or is this really just pre-billed revenue that doesn't have an offsetting cost yet? Yeah, it really is unbilled revenue. We call it contract assets 'cause it took me a little bit when I first showed up. I asked the team the same question, but it really is our unbilled revenue. Okay. Great. That leads me to kind of my final, I guess, question and/or point. As you both know, I'm kind of in the camp of conservative balance sheet. You know, I think at this point there's no reason to necessarily say one way or the other is the right way. I think at this point, kind of if you look at how your working capital has evolved since the last quarter, with the debt pay down, and if you exclude the contract assets because the costs aren't kind of in there yet, you've kind of increased your working capital to a point now where it covers a lot of the debt, which is a good place to be. You have a lot of A/R booked, and if you do see some seasonal declines in the next couple quarters, you're gonna see some of that release back to you. You're right. Perhaps it's a good point. Maybe now to think about not necessarily just paying down debt or just buying back equity, 'cause I don't think there's an easy answer here. Your stock price is too low for what these assets are worth. Maybe you can kind of split it up a little bit. Pay down some debt with the cash flow, and then maybe start to buy back a little bit of equity, given the attractive stock price. How do you feel about kind of looking at a hybrid approach? Yeah. I think probably kind of similar to John's questions is you know all of those points, and again I really appreciate the comments Bill we're actively discussing you know with board management. I think your point about you know needing to be flexible and understanding that you know it may be kind of horses for courses depending on the time is absolutely right. You know again I think we're just continuing to evaluate it. The board is very engaged in this topic so. We recognize that the balance sheet is moving meaningfully quarter over quarter, so that means our positions could move. I think what's important for what we'd like our investors to take away is we're listening to you along with all the others, and we're making sure that feedback is coming in dynamically and getting to the board level and making sure we're having the right kind of discussion. Appreciate the feedback. Okay, great. That's helpful. I mean, I certainly appreciate where you stand on paying down debt, and I think that should continue. You know, perhaps given the stock has not moved in some time, it's not that I care where the stock goes in the near term, it's just that it might be a decent return on capital that you get at the current prices. Yeah. Understood. No, no, yeah, very, very much understood. Great. Thank you. Thanks, Bill. The next question comes from Don Crist with Johnson Rice. Don, go ahead. Hey, guys. How are y'all today? We're good. Hey, Don, how are you? I'm hanging in there the best I know how. Thanks for all the color. Sorry, I'm kinda one of the last in line, but I wanted to dig in a little bit on margins, particularly on coiled. You know, up 10% quarter-over-quarter. Can you talk about what's driving that, and is that sustainable in kinda that high 20s% as we kinda move into 2023, you think? Yeah. We again, thanks for the questions. We do think that is sustainable. You know, a lot of that margin was getting a fourth unit out and really had just sort of good utilization. There wasn't a lot of white space, so we didn't have the units in the yard much at all, which was great. But I think as far as when we kinda look at our cost base and pricing, we kinda feel this is pretty sustainable. Okay. Pretty much everything else has been done, but one modeling question from me, Melissa. As far as taxes go next year, do you have sufficient NOLs to kinda cover cash taxes as we move through the year? Yes. Okay. We shouldn't plan on any cash taxes next year? Not cash taxes, no. Okay. I think we will start to see a little balance sheet noise on the tax line as we move into the net income territory. The tax advisors have assured us we're in a pretty good position with our NOLs. I appreciate all the color. Great quarter, guys. Yeah. Thanks, Don. Thank you. We have now concluded with all questions. I would like to turn the conference call back to Stuart Bodden for closing remarks. Thanks, Shelley. Again, thanks everyone for joining us today. Hopefully you got a sense of our excitement for how the business is running. Just really pleased with where things stand and just really proud of the team. Would also like to remind everyone that management intends to conduct investor meetings in New York and Chicago during the week of November thirteenth, and we would encourage any interested party to reach out to management for scheduling availability. Again, thanks everyone, and have a great weekend. Conference has now concluded. Thank you for attending today's presentation. You may now disconnect.