Core Laboratories NV

NYSE:CLB

Earnings Call Analysis

Q3 Company Performance and Q4 Projections

The company retired $75 million in senior notes and increased its borrowing under a bank credit facility, leading to a projected quarterly interest expense increase of $600,000. Net income ex-items rose to $10.3 million and diluted earnings per share increased to $0.22. Inventory increased due to a slowing U.S. market, with a leveraging ratio improvement from 2.29 to 1.92 over nine months. Q3 free cash flow was negative at $3.7 million, with a future tax refund of $7.1 million expected. CapEx for the full year is projected at $11-$12 million. Q4 revenue is expected between $125-$132 million, operating income at $13.8-$17.3 million, and EPS at $0.17-$0.23. Long-term, increased exploration and development expenditure is anticipated, despite geopolitical uncertainties and volatile crude oil markets.

Strengthening Fundamentals Amid Market Challenges

The company has shown resilience with net income (excluding items) climbing to $10.3 million, an improvement from both the previous quarter's $9.8 million and last year's third-quarter result of $8.2 million. This upward trajectory is also reflected in earnings per diluted share (ex-items), increasing to $0.22 from $0.21 in the prior quarter and up from $0.18 in the same quarter of the previous year.

Optimizing Balance Sheet Health

The company's balance sheet displays proactive financial management. Receivables decreased by about $2.8 million from the previous quarter, and days sales outstanding (DSOs) improved marginally to 71 days. Notably, the company retired $75 million in senior notes, using its credit facility strategically despite a slight uptick in its leverage ratio to 1.92 from 2.29 at the end of last year. As a commitment to financial prudence, the company endeavors to reduce debt and anticipates further improvements in leverage in the coming quarters.

Navigating Liquidity and Capital Expenditures

Operating activities used a modest $200,000 in cash flow, and the free cash flow was negative $3.7 million due to capital expenses of $3.5 million for the quarter. The company experienced a build in working capital, largely because of increased inventory levels and cash tax payments of $11.3 million, which are expected to partially offset by tax refunds of $7.1 million next quarter. Looking ahead, it forecasts better cash flow from operations and maintains capital expenditure projections ranging from $11 to $12 million for the full year, signifying a continuation of its asset-light business model and disciplined capital strategy.

Confident Outlook Despite Volatility

Despite near-term volatility in the global crude oil market due to geopolitical tensions and economic uncertainties, the company retains a constructive outlook for 2024 and beyond. It expects increased investment in long-cycle upstream projects and continued international activity, particularly in the Middle East. The U.S. onshore activity is softer than anticipated for 2023, and the company predicts a slight decrease in sequential onshore completion activity. However, they forecast the fourth quarter to remain robust with revenues projected between $125 million and $132 million, operating income between $13.8 million and $17.3 million, and operating margins about 12%.

Investing in Long-Term Growth

Acknowledging its dedicated team's contribution to success, the company aligns with positive indicators like the International Energy Agency's (IEA) forecast of increasing crude oil demand, supporting the demand for their Reservoir Description services to aid in production growth and field maintenance. With the international rig count on the rise, there is optimism for sustained improvement over the next several years, notably in strategically significant regions such as the Middle East.

Earnings Call Transcript 2023-Q3

[Operator]

Good day and welcome to the Core Laboratories Third Quarter 2023 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Larry Bruno, Chairman and CEO of Core Laboratories. Please go ahead.

[Lawrence Bruno, executive]

Thanks, Marliese. Good morning in the Americas. Good afternoon in Europe, Africa and the Middle-East and good evening in Asia-Pacific, we'd like to welcome all of our shareholders, analysts and most importantly, our employees to Core Laboratories third quarter 2023 earnings call. This morning I'm joined by Chris Hill, Core Chief Financial Officer and Gwen Gresham, Core Senior Vice-President and Head of Investor Relations. The call will be divided into six segments. Gwen will start by making remarks regarding forward-looking statements. We'll then have some opening comments, including a high-level review of important factors in Core's Q3 performance.In addition, we'll review Core's strategies and the 3 financial tenets that the company employs to build long-term shareholder value. Chris will then give a detailed financial overview and have additional comments regarding shareholder value. Following Chris, Gwen will provide some comments on the company's outlook and guidance. I'll then review Core's 2 operating segments, detailing our progress and discussing the continued successful introduction and deployment of Core Labs technologies, as well as highlighting some of Core's operations and major projects worldwide. Then we'll open the phones for a Q&A session.I'll now turn the call over to Gwen for remarks on forward-looking statements.

[Gwendolyn Schreffler, executive]

Before we start the conference this morning, I'll mention that some of the statements we make during this call may include projections, estimates and other forward-looking information. This would include any discussion of the company's business outlook. These types of forward-looking statements are subject to a number of risk and uncertainties that could cause actual results to materially differ from our forward-looking statements. These risk and uncertainties are discussed in our most recent Annual Report on Form 10-K, as well as other reports and registration statements filed by us with the SEC.We undertake no obligation to publicly update or revise any forward-looking statement whether as a result of new information, future events or otherwise. Our comments also include non-GAAP financial measures, reconciliation to the most directly-comparable GAAP financial measures is included in the press release announcing our third quarter results. Those non-GAAP measures can also be found on our website.With that said, I'll pass the discussion back to Larry.

[Lawrence Bruno, executive]

Thanks. Gwen. Moving now to some high-level comments about the third quarter of 2023. Core continued to build on the operational momentum established over the past few quarters. While revenue was down slightly compared to Q2, we achieved sequential and year-over-year improvements in operating income, operating margins and earnings per share. Ex-items, operating income for the third quarter was $16 million, up 2% sequentially and up 20% year-over-year.Operating margins were 13%, up from 12% in Q2 of 2023 and up from 11% in Q3 of 2022. Third quarter 2023 operating margins, as well as year-over-year and sequential incremental margins were particularly strong in Reservoir Description where demand for rock and fluid analysis across our global client base continues to rise. Ex-items, operating margins for Reservoir Description improved to 17%, the highest since Q2 of 2020. These improvements in Reservoir Description were partially offset by declines in revenue and operating income and production enhancement, largely reflecting lower-than-anticipated U.S. land completion activity, which was down 10% sequentially, along with some project delays in the Gulf of Mexico and some international product deliveries that were pushed into Q4.Production Enhancement operating margins ex-items came in at just over 4% for the third quarter, which was down both sequentially and year-over-year. Demand for Reservoir Description assay work on crude oil and derived products continued to stabilize throughout the quarter as trading patterns have realized in response to sanctions. However, the ongoing Russia-Ukraine conflict and associated sanctions, as well as the emergent political turmoil in the Middle-East that began in early Q4, still the volatility and some uncertainties in the demand for these laboratory services.Lastly for the full-company, EPS was $0.22 per share ex-items, up from $0.21 in Q2 of 2023 and up from $0.18 in Q3 of 2022. As we look-ahead, Core will continue to execute on its key strategic objectives by, 1) introducing new product and service offerings in key geographic markets. 2) maintaining a lean and focused organization. And 3) maintaining our commitment to delevering the company.Now to review Core Lab's strategies and the financial tenets that Core has used to build shareholder value over our 27-plus year history as a publicly-traded company. The interest of our shareholders, clients and employees will always be well-served by Core Lab's resilient culture, which relies on innovation, leveraging technology to solve problems and dedicated customer service. I'll talk more about some of our latest innovations in the operational review section of this call.While we navigate the current challenges and pursue growth opportunities, the company will remain focused on its three long-standing, long-term financial tenets, those being to maximize free-cash flow, maximize return on invested capital and returning excess free cash to our shareholders. Before moving on, I want to thank all of our employees for their dedication, loyalty and adaptability in meeting all of our clients' needs and for the commitment that many have shown as we navigate the moment and prepare for a more active market.I'll now turn it over to Chris for the detailed financial review.

[Chris Hill, executive]

Thanks, Larry. Before we review the financial performance for the quarter, the guidance we gave on our last call and past calls specifically excluded the impact of any FX gains or losses and assumed an effective tax-rate of 20%. So accordingly, our discussion today excludes any foreign-exchange gain or loss for current and prior periods. Additionally, the financial results for the third quarter of 2023 include a charge of $1.1 million associated with the termination of our ATM program. And secondly facility exit costs, which are aligned with our continuing efforts to improve operational efficiencies. These items have also been excluded from the discussion of our financial results.So now looking at the income statement. Revenue was $125.3 million in the third quarter, down 2% compared to the prior quarter and flat year-over-year. Activity associated with international upstream projects continue to expand, however, lower-than-expected activity in the US and a lower level of product sales to international clients has offset the growth in other regions.Of this revenue, service revenue, which is more international was $92.9 million for the quarter, flat sequentially and up 6% from last year. Committed work volumes for traditional reservoir rock and fluid analysis, as well as carbon capture and storage projects continue to build across our global -- our global laboratory network. However, revenue from our diagnostic services were down this quarter due to a decrease in U.S. onshore activity and some projects in the Gulf of Mexico, moving from the third quarter into the fourth quarter.Additionally, service revenue associated with crude assay work was stable during the third quarter of this year, but down a little when compared to the third quarter of last year, which was elevated in our European operations ahead of the sanctions that became effective late last year.Product sales, which is more equally tied to the U.S. and international activity were $32.5 million for the quarter, down 6% sequentially and down 15% from last year. Despite the decrease in U.S. onshore activity during the third quarter of 2023, product sales in the U.S. were flat sequentially. The sequential decrease in our product sales in the third quarter is primarily associated with lower international product sales. The year-over-year decrease is due to lower sales in both the US and international markets.Some international product sales scheduled to be delivered in the third quarter of 2023 were delivered in October. Additionally, in 2023, some recurring international product orders, which typically fall in the third quarter are planned for the fourth quarter.Moving on to cost of services, ex-items for the quarter was approximately 74% of service revenue, an improvement from 76% in the prior quarter and 77% compared to the prior year. We continue to see improvements in absorption of costs and utilization of our global laboratory network and anticipate additional improvement with continuous growth in service revenue.Cost of sales ex-item in the third quarter was 85% of revenue compared to 84% last quarter, which increased slightly this quarter due to reduced manufacturing efficiencies associated with lower international sales. G&A ex-items for the quarter was $9.5 million, a slight increase from prior quarter, which was $8.7 million. For 2023, we expect G&A ex-items to be approximately $38 million to $39 million.Depreciation and amortization for the quarter was $3.9 million, flat compared to last quarter. EBIT ex-items for the quarter was $16 million, an increase of over 2% compared to last quarter and yielding an EBIT margin of 13%, which expanded approximately 60 basis points sequentially. Year-over-year EBIT ex-items increased $2.7 million or up 20% and EBIT margins expanded 220 basis points.Our operating income for the quarter on a GAAP basis was $14.7 million. Interest expense of $3.1 million was relatively flat compared to $3.2 million last quarter. On September 30th of 2023, the company retired $75 million in senior notes, which carried a fixed interest rate of 4.1%. We used $71 million of the borrowing capacity under our bank credit facility to partially fund the maturity of these notes. The credit facility has a variable interest rate and currently the borrowing rate under the facility is approximately 8%.As such, we expect interest expense to increase approximately $600,000 next quarter. Income tax expense at an effective tax rate of 20% and ex-items was $2.6 million for the quarter. On a GAAP basis, tax expense was $2.3 million for the quarter, which was also at an effective tax rate of 20%. The effective tax rate will continue to be somewhat sensitive to the geographic mix of earnings across the globe and the impact of items discrete to each quarter. However, we continue to project the company's effective tax rate to be approximately 20%.Net income ex-items for the quarter was $10.3 million, up from $9.8 million last quarter and $8.2 million from the same quarter last year. On a GAAP basis, we recorded net income of $9.3 million for the quarter. Earnings per diluted share ex- items was $0.22 for the quarter, up from $0.21 last quarter and up from $0.18 compared to the third quarter of last year. On a GAAP basis, earnings per diluted share was $0.19 for the quarter.Turning to the balance sheet. Receivables was $104.1 million and decreased approximately $2.8 million from the prior quarter. Our DSOs for the third quarter improved slightly to 71 days from 72 days in the last quarter. Inventory was $75.1 million at the end of this quarter, up approximately $3.4 million from last quarter end. Inventory turns for the quarter decreased to 1.5% from 1.7% last quarter. The increase in inventory this quarter is the combined effect of a slowing U.S. land market, continued building of stock in certain international locations to service some long-term international contracts and some delays in delivery of bulk international sales, as I mentioned earlier.And now the liability side of the balance sheet. Our long-term debt was $181 million at September 30. And considering cash of $16.6 million, net debt was $164.4 million or up $5.6 million from last quarter. We remain focused on reducing debt and improving the leverage ratio of the company. Although our leverage ratio increased slightly this quarter to 1.92, we have made considerable improvement from the leverage ratio of 2.29 at December 31, 2022.We will continue applying excess free cash towards the reduction of debt and anticipate the leverage ratio will decrease in future quarters. At the end of the quarter, we retired and fully settled the $75 million of 12-year senior notes that were issued in 2011. As I stated earlier, we used $71 million of the borrowing capacity under our bank revolving credit facility to partially fund the maturity of these notes.Therefore, at September 30, our debt is currently comprised of our senior notes at $110 million and with $71 million outstanding under our bank revolving credit facility. Our credit facility has a borrowing capacity of $135 million, of which approximately $56 million was still available as of September 30, 2023.Looking at cash flow, for the third quarter of 2023, cash flow used in operating activities was approximately $200,000 and after paying for $3.5 million of CapEx during the quarter, our free cash flow was negative $3.7 million. Cash from operations for the third quarter of 2023 was negatively affected by build in working capital of $14 million. The build in working capital was primarily due to an increase in inventory and carrying a lower level of accounts payable at September 30th.The change in working capital also includes $11.3 million in cash tax payments during the quarter, which will partially be recovered in the fourth quarter. The company is expecting to receive approximately $7.1 million in tax refunds during the fourth quarter of 2023.Looking ahead to the fourth quarter, we are forecasting cash from operations to be much improved and positive with working capital remaining flat and additional cash in excess of $7 million associated with the tax refunds. We will continue to manage investment in working capital during a period of growth and additionally, we expect CapEx to remain aligned with activity levels. And for the full year of 2023, we expect capital expenditures to be in the range of $11 million to $12 million.Core will continue its strict capital discipline and asset-light business model with capital expenditures primarily targeted at growth opportunities and initiatives. Core Lab's operational leverage continues to provide the ability to grow revenue and profitability with minimal capital requirements. Capital expenditures have historically ranged from 2% to 4% of revenue even during periods of significant growth. That same level of laboratory infrastructure, intellectual property and leverage exists in the business today.I will now turn it over to Gwen for an update on our guidance and outlook.

[Gwendolyn Schreffler, executive]

Thank you, Chris. Based on ongoing dialogue with our global client base, we maintain our constructive outlook on international upstream activity for 2024 and beyond, as increasing levels of investment will be required to maintain and grow hydrocarbon production. The company anticipates operator spending on long-cycle upstream projects in both onshore and offshore environment. We'll continue to expand displaying an added level of sustainability for this up cycle.In the near-term, the global crude oil market may remain volatile due to global recession fears, the extent and timing of China's economic recovery and the uncertainties related to conflicts in Russia-Ukraine and the Middle East. Globally, crude oil production growth continues to face constraints due to prolonged underinvestment, as well as the loss of production due to natural decline from existing fields. We continue to anticipate a multiyear international recovery supported by increased spending on exploration in many regions across the globe and expanded development of existing fields to fortify crude oil and natural gas reserves. This underlies Core's outlook for continued improvement in international onshore and offshore activity, with ongoing projects around the globe, most notably across the Middle East, South Atlantic margin, certain areas of Asia Pacific and West Africa.Turning to the U.S. Onshore activity in 2023 has been lower than expected as reflected by the decreased U.S. rig and frac spread count. Core C's sequential onshore completion activity to be slightly down due to typical year-end seasonality, as operators complete their 2023 spending plans. Based on these factors, we project Reservoir Description's fourth quarter 2023 revenue to range from $84 million to $86 million and operating income of $11.6 million to $13.3 million, while we expect Reservoir Description's international revenue to increase sequentially in several geographic regions, the ongoing Russia-Ukraine conflict and more recent conflict in the Middle East are causing some disruptions to the movement in trade of crude oil.These 2 geopolitical situations have created uncertainties with respect to trading patterns of crude oil and derived products and the associated laboratory assay services. These situations have and may continue to adversely impact our Reservoir Description segment operations in Russia, Ukraine, Europe and the Middle East. Despite these geopolitical uncertainties, client commitments on long-term international projects have improved nicely year-over-year. However, the pace at which these long-term projects are executed by Core's clients may vary from quarter-to-quarter as momentum builds.Shifting to production enhancement. The segment's fourth quarter 2023 revenue is estimated to range from $41 million to $46 million and operating income of $2.2 million to $4 million. Growth in production enhancement, international sales and well diagnostic projects in the Gulf of Mexico are expected to offset a projected decline in U.S. onshore revenue.In summary, the company's fourth quarter 2023 revenue is projected to range from $125 million to $132 million and operating income of $13.8 million to $17.3 million, yielding operating margins of approximately 12%. EPS for the fourth quarter 2023 is expected to range from $0.17 to $0.23. The company's fourth quarter 2023 guidance is based on projections for underlying operations and excludes gains and losses in foreign exchange. Our fourth quarter 2023 guidance also assumes an effective tax rate of 20%.Now, will turn the discussion back over to Larry.

[Lawrence Bruno, executive]

Thanks, Gwen. First, I'd like to thank our global team of employees for providing innovative solutions, integrity and superior service to our clients. The team's collective dedication to servicing our clients is the foundation of Core Lab's success. In October, the IEA updated its forecast for crude oil demand for 2023 to average a record high 101.9 million barrels per day. That's up by approximately 2.3 million barrels per day from 2022, even after assessing current global financial forecasts. This continues to bode well for increasing demand for the Reservoir Description services that will be required to grow production and replace the natural decline of existing producing fields.As we look ahead, we see the rising international rig count over the past year as a harbinger of an improving landscape for Reservoir Description, a trend that we project will play out for the next several years, particularly in the Middle East, North and South America as well as most other regions. Early movers in the oilfield service sector that are more exposed to well construction have already felt the impact of the cycle shift.Production Enhancement also has growing opportunities in international areas, such as with unconventional plays in the Middle East and emerging conventional plays in a number of regions, as well as plug and abandonment programs in mature offshore basins.Now let's review the third quarter performance of our 2 business segments. Turning first to Reservoir Description, for the third quarter of 2023, revenue came in at $85.1 million, up 2% compared to Q2 and up 8% year-over-year. Operating income for Reservoir Description ex-items was $14.1 million and operating margins were 17%, the highest margins since Q2 of 2020. Margins ex-items expanded approximately 320 basis point sequentially and 590 basis points year-over-year.Incremental margins were over 100% sequentially and over 90% year-over-year, nicely reflecting the operational leverage in this segment. The segment's financial performance is an indication of improving client activity across our global network. Now for some operational highlights from Reservoir Description.During the third quarter, Core Lab's advanced Reservoir Characterization team embarked on an expansive, multi-well study aimed at evaluating a tight carbonate reservoir in the Middle East. This comprehensive study entailed a collection and synthesis of substantial volumes of laboratory and well log data. These data sets with an employee to develop petrophysical models, enabling the assessment of production variations across a suite of lateral wells.An integral component of this study involve the application of Core's D-Code service. D-Code is a proprietary geological and petrophysical modeling application, in which readily available drilling data are used to determine key reservoir parameters. These high-resolution interpreted logs or for a detailed profile of the rock properties in the drilled intervals, which is especially beneficial in scenarios where obtaining sufficient material for physical laboratory measurements proves to be operational challenging.Also in the third quarter of 2023, Core's Middle East clients continue their plans to expand future production capacity, increasing the need for evaluation of complex unconventional reservoirs. For these unconventional plays, determination of the in-situ gas oil ratio is critical. Given the complex fluid and fluid flow of behaviors of these low-permeability reservoirs, the gas oil ratio determined from traditional down hole fluid samples may not be representative of the in-situ fluid proportions that exist in the reservoir.In line with these challenges and under a collaborative agreement with CoreSite International, a team of Core Lab reservoir optimization specialists executed a successful, multi-well pressure core campaign for a Middle East national oil company. Pressure cores allow for intervals of the target reservoir zone to be cut and safely brought to the surface, all while maintaining in-situ reservoir pressure. This technology ensures that all 3 reservoir fluid phases are captured and maintained at reservoir pressure within the core barrel.Upon reaching the surface, Core Lab and Core site specialist orchestrated a meticulously controlled depressurization process, enabling the systematic capture of all reservoir fluids. The captured reservoir fluids were then quantified and comprehensive compositional analyses were conducted. The process enabled Core Lab's specialist to accurately determine the in-situ gas oil ratio, as well as other hydrocarbon properties. This pressure core data will improve reservoir models, yield more accurate reserve calculations and allow the operator to optimize completion and production strategies.Now moving to Production Enhancement, where Core Lab's technologies continue to help our clients optimize their well completions and improve production. Revenue for Production Enhancement came in at $40.2 million, down approximately 10% sequentially and 14% year-over-year. Operating income ex-items was [ $1.6 million ] and operating margins were 4% for the third quarter of 2023, down from 10% in Q2 of 2023. As Chris and Gwen mentioned, Q3 felt the impact of lower international product sales, which can vary from quarter-to-quarter and a sequential 10% decline in U.S. land completion activity, along with some Gulf of Mexico work that push to the right.Now for some operational highlights. In the third quarter of 2023, Core's Production Enhancement segment was engaged by a client in the North Sea to provide plug and abandonment technologies to efficiently perforate heavy walled and 13-3/8 inch diameter casing for the cement wash process, that is needed in preparation of the plugging operations required for well abandonment. Core leverages its expertise in energetics as an alternative to traditional casing section milling, which is both slower and more costly. Capitalizing on Core's proprietary plug and abandonment perforating system or PAC technology, the company's ballistic engineering design team created a system to address the additional depth of controlled penetration required to create communication in the annual space between the 13-3/8 inch diameter casing and the 20-inch diameter outer casing string.Core's new PAC extended range energetic system successfully accomplished the task. Importantly, the extended range PAC technology was delivered with a 4.5-inch gun, eliminating the need to run a secondary retrievable operation to remove the down hole restrictions that would have been required for a larger diameter gun system.Core's PAC technology successfully created communication between the casing strings, maintain the integrity of the 20-inch outer casing and reduced rig time, all while allowing for the efficient recovery of the inter casing. Also during the third quarter, Core's expertise and completion diagnostics were employed to assess various refrac methodologies. Refracs presents an opportunity to cost-effectively add hydrocarbon production from under stimulated wells.Core's completion diagnostic technologies allow operators to assess various refrac methods to establish the most profitable and effective approach in a given area. An operator was seeking a method to improve overall zonal coverage in their unconventional reservoir refrac treatments, treatments that involve adding perforations and then refracking the entire lateral in a single stage known as bullhead frac, known as a bullhead frac, we're unable to effectively stimulate the toe half or the far end of the lateral.As a possible solution, a liner was placed inside the heel half of the original lateral, making it possible to refrac the toe half of the well in multiple stages. While somewhat successful, this option came at a substantial cost. Alternatively, the operator implemented a treatment design involving the placement of an expandable liner to isolate the heel half of the lateral. This also enabled refracking in multiple stages. The operator enlisted Core Lab to run its flow profile or engineered oil tracers to assess the post-frac oil contribution from each stage of the refrac and to evaluate the effectiveness of this novel hybrid treatment design.Flowback oil samples analyzed in Core's analytical laboratory indicated overall improved treatment coverage and substantially greater oil contribution from the more economically deployed expandable liner approach. Whenever innovations in completions and stimulation design are attempted, Core Lab's expertise and completion diagnostics can be used to better understand how the process actually worked in the subsurface. That concludes our operational review. We appreciate your participation and Marliese will now open the call for questions.

[Operator]

Thank you. [Operator Instructions] Since there are no questions posed at this moment, I would like to turn the conference back over to Larry Bruno for closing remarks. Please go ahead.

[Lawrence Bruno, executive]

Thanks, Marliese. Okay. We'll wrap up here. In summary, Core's operational leadership continues to position the company for improving client activity levels in both the U.S. and international markets for 2023 and beyond. We have never been better operationally or technologically positioned to help our global client base optimize their reservoirs and to address their evolving needs. We remain uniquely focused and are the most technologically advanced, client-focused reservoir optimization company in the oilfield service sector.The company will remain focused on maximizing free cash and returns on invested capital. In addition to our quarterly dividends, we'll bring value to our shareholders via growth opportunities, driven by both the introduction of problem-solving technologies and new market penetration. In the near-term, Core will continue to use free cash to strengthen its balance sheet, while always investing in growth opportunities.So in closing, we thank and appreciate all of our shareholders and the analysts that cover Core Lab. The executive management team and the Board of Core Laboratories give a special thanks to our worldwide employees that have made these results possible. We're proud to be associated with our continuing achievements. So thanks for spending time with us and we look forward to our next update. Goodbye for now.

[Operator]

And the conference has now concluded. Thank you very much for attending today's presentation. You may now disconnect.