Oil States International Inc

NYSE:OIS

Earnings Call Transcript 2023-Q1

[Operator]

Welcome to the Oil States International Incorporated’s First Quarter 2023 Earnings Call. My name is Brent, and I will be your operator for today's call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Thank you.

I will now turn the call over to Ellen Pennington. Ellen, you may begin.

[Ellen Pennington, Counsel and Assistant Corporate Secretary]

Thank you, Brent. Good morning, and welcome to Oil States' first quarter 2023 earnings conference call. Our call today will be led by our President and CEO, Cindy Taylor; and Lloyd Hajdik, Oil States' Executive Vice President and Chief Financial Officer.

Before we begin, we would like to caution listeners regarding forward-looking statements. To the extent that our remarks today contain information other than historical information, please note that we are reliant on the safe harbor protections afforded by federal law. No one should assume that these forward-looking statements remain valid later in the quarter or beyond. Any such remarks should be weighed in the context of the many factors that affect our business, including those risks disclosed in our Form 10-K, along with other SEC filings.

This call is being webcast, and can be accessed at Oil States' website. A replay of the conference call will be available two hours after the completion of this call and will continue to be available for 12 months.

I will turn -- now turn the call over to Cindy.

[Cindy Taylor, President and CEO]

Thank you, Ellen. Good morning, and thank you for joining our conference call today where we will discuss our first quarter 2023 results and provide our thoughts on market trends in addition to our outlook comments.

During the first quarter of 2023, the company generated EBITDA of $21 million, representing a sequential increase of 4% on revenues of $196 million. We generated net income for the third consecutive quarter, driven by growth and a favorable demand mix in our Downhole Technologies and Well Site Services segment, along with strong contributions from our Offshore Manufactured Products segment.

Backlog at our Offshore Manufactured Products segment increased 6% sequentially, totaling $326 million as of March 31, driven by quarterly bookings of $118 million, which yielded a quarterly book-to-bill ratio of 1.2 times. Our first quarter bookings included three notable project awards exceeding $5 million each. We are also pleased to report the receipt of our first two contract awards for our newly developed Managed Pressure Drilling equipment.

In our Well Site Services segment, we achieved a 6% sequential increase in segment EBITDA, driven by higher U.S. completions related activity along with enhanced customer penetration and better equipment utilization despite a sequential decrease in the average U.S. frac spread count.

In our Downhole Technologies segment, revenues increased 4% sequentially, while segment EBITDA increased 164%, due primarily to contributions from higher margin international perforating product sales, coupled with improved integrated gun product sales mix domestically. International perforating products sales tend to be somewhat lumpy and can vary from quarter-to-quarter depending on customer activities.

Our investments in technology and innovation were once more highlighted by the Offshore Technology Conference with the announcement that we are the recipient of two 2023 Spotlight on New Technology Awards for our floating wind platform design and our active seat gate valve technology. We were also recognized with a 2023 Meritorious Engineering Award from Hart Energy for our MPD-Ready Riser System designed for jack-up applications. Finally, last night, the National Ocean Industries Association presented Oil States with the 2023 Safety in Seas Culture of Safety Award, recognizing our sustained commitment to safety in the field.

Lloyd will now review our consolidated results of operations and financial position in more detail before I go into a discussion of each of our segments.

[Lloyd Hajdik, Executive Vice President and CFO]

Thanks, Cindy, and good morning, everyone. During the first quarter, we generated revenues of $196 million, adjusted consolidated EBITDA of $21 million and net income of $2.2 million, or $0.03 per share. We achieved our third sequential quarter of positive net income, reflective of the continued improvement in our operations and the overall strength of market activity.

During the quarter, we repaid in full the remainder of our 1.5% convertible senior notes, plus accrued interest totaling $17.4 million. In addition, we invested $26 million in working capital and also spent $6 million to fund net capital expenditures. Given customary working capital builds in the first quarter, our free cash flow will be weighted to the second half of 2023, similar to what we experienced in 2022.

Given the above debt repayment and corporate investments, $5 million in borrowings were outstanding under our revolving credit facility at March 31. We expect to repay these borrowings during the second quarter. Availability under the revolving credit facility totaled $93 million, which together with cash on hand of $16 million resulted in available liquidity of $109 million at March 31. At March 31, our net debt totaled $123 million, yielding a net debt to total capitalization ratio of 15%. On a leverage ratio basis, net debt to adjusted consolidated EBITDA remains at 1.4 times at March 31.

In 2023, we expect to invest approximately $25 million in capital expenditures, dependent on market conditions prevailing at the time the capital investments are made. For the first quarter, our net interest expense totaled $2.4 million, of which, $0.4 million was non-cash amortization of debt issuance costs. Our cash interest expense as a percentage of average total debt outstanding was approximately 5% in the first quarter. In terms of our second quarter 2023 consolidated guidance, we expect depreciation and amortization expense to total $15.4 million, net interest expense to total $2.4 million and our corporate expenses are projected to total $10.7 million.

At this time, I'd like to turn the call back over to Cindy, who will take you through the operating results for each of our business segments.

[Cindy Taylor, President and CEO]

Thanks, Lloyd. Our Offshore Manufactured Products segment generated revenues of $98 million, segment EBITDA of $15.9 million and operating income of $11.1 million in the first quarter of 2023. Revenues in the first quarter decreased 7% sequentially, driven primarily by an 11% decrease in project driven revenues due to timing on certain project schedules, partially offset by the impact of higher customer demand for our short-cycle products. Segment EBITDA margin in the first quarter of 2023 was 16.2%, compared to 16.9% in the fourth quarter of 2022. Backlog totaled $326 million at March 31, 2023, reaching its highest level since the fourth quarter of 2015.

First quarter 2023 bookings totaled $118 million, yielding a quarterly book-to-bill ratio of 1.2 times. Our first quarter bookings were broad-based across many product lines and regions. Our Offshore Manufactured Products segment has endeavored to develop leading-edge technologies, while cultivating the specific expertise required for working in highly technical deepwater and offshore environments. As the expansion and investments in alternative energy sources continues to increase exponentially, we will be working diligently to translate our core competencies into the renewable and clean tech energy space.

Our core competencies are well entrenched in the markets we serve, and we continue to bid on potential opportunities supporting our traditional subsea floating and fixed production systems, drilling and military customers, while also bidding to support multiple new customers and projects involved in development, such as subsea minerals gathering, fixed and floating offshore wind developments, and other renewable and clean tech energy systems globally. These opportunities create the potential for us to expand our product offerings and revenue base.

In our Well Site Services segment, we generated revenues of $67 million, segment EBITDA of $13.2 million and operating income of $7 million in the first quarter of 2023. Segment EBITDA margin was 20% in the first quarter of 2023, compared to 18% in the fourth quarter of 2022. Our revenues were essentially flat with the fourth quarter of 2022, notwithstanding typical seasonality we experienced in the United States. Service offering revenue mix and a continued focus on cost discipline led to a higher segment EBITDA margin sequentially.

We remain focused on optimizing our operations and pursuing profitable activity in support of our global customer base. As market expansion opportunities continue to unfold both in the United States and in international markets, we will continue to focus on core areas of expertise in this segment and the deployment of our recently enhanced completions equipment to further differentiate our completions service offerings.

In our Downhole Technologies segment, we reported revenues of $31 million with much improved segment EBITDA of $2.8 million in the first quarter of 2023 compared to revenues of $30 million and segment EBITDA of $1 million reported in the fourth quarter of 2022. Strengthening revenues and margins in the quarter were driven by increased international perforating sales and a favorable shift in sales mix.

Global oil and gas inventories have recovered, and are now within their five-year seasonal averages for crude oil, but are now significantly above the five-year averages for natural gas, which has led to lower gas prices year-over-year, tempering expectations somewhat for growth in drilling and completion spending on US land activities. However, we have begun to see an inflection upward in international and offshore markets, which will further support our product and service offerings in global regions. Given the steady levels of frac spread utilization over the last several quarters, we expect our Well Site Services and Downhole Technologies segments to continue to perform in line with or better than market activity indicators.

Revenues in our Offshore Manufactured Products segment are expected to continue to grow, especially in the second half of 2023, given strong order flow and increased levels of backlog along with ongoing short-cycle product demand. Given these market trends and indicators, we believe that we will achieve the upper-end of our prior annual guidance range.

Now I'd like to offer some concluding comments. Softening demand and concerns over the stability of the global banking system caused oil and gas prices to drop during the first quarter of 2023. This was followed by a strong reaction by the OPEC+ countries with a production cut, which rallied the market. However, commodity prices have retrenched since the announcement on demand concerns with WTI and Brent crude spot prices currently at $75 and $79 per barrel, respectively. Natural gas prices remained range bound at lower levels due to high storage. However, relatively flat U.S. production and increased demand for natural gas or LNG feedstock and for use in the power sector should lift natural gas prices over the longer term.

Initially, the industry responded to higher commodity prices with accelerated shorter-cycle investments in the United States with -- which the industry clearly benefited from in 2022. We are now experiencing an increase in investments and long lead time projects as well, including those in international markets and deepwater basins around the world. Oil States will continue to conduct safe operations and will remain focused on providing technology leadership in our various product and service offerings with value-added products and services available to meet customer demands globally. In addition, we will continue our product development efforts in support of expansion in energy transition opportunities.

That completes our prepared comments. Brent, would you open up the call for questions-and-answers at this time, please?

[Operator]

[Operator Instructions] Your first question is from the line Stephen Gengaro with Stifel. Your line is open.

[Stephen Gengaro, Stifel]

Thanks. Good morning, everybody.

[Cindy Taylor, President and CEO]

Hi, Stephen.

[Stephen Gengaro, Stifel]

Cindy, can you talk a little bit about what you're seeing on the offshore order flow? I know your book-to-bill was good. You mentioned a little bit, I think, in prepared remarks. I'm just curious about the conversations you're having and the visibility that you think you have which should go over the next few quarters as far as order flow.

[Cindy Taylor, President and CEO]

No, that's a great question, Stephen. Thanks for posting it. Our bookings outlook is very strong. I'm trying to look -- things back to our 2022 bookings. And I think the bookings were up about 29% or so. What's happening? Revenues growing. And so, a book-to-bill of north of one implies obviously growing bookings. Our bidding activity has been robust and broad. Of course, there's a lot of bidding activity around our conventional subsea proprietary technology in both Brazil, Guyana and other basins, but obviously, those two basins are very, very strong. And again, we're very pleased with some of our new product introductions, particularly our high pressure riser systems and our MPD equipment, both of which are getting good market attention, and we're beginning to see some order flow there.

And then, I'll just kind of end with also a bit on the unique side, of course, is our mineral riser systems and we continue to bid opportunities around that as well. Those are obviously just a bit lumpier because there's not -- it's a very immature play at this point in time, but again, just a robust order outlook with strong expectations for continued book-to-bill ratios even on higher revenues.

[Stephen Gengaro, Stifel]

Great. Thank you. And my other -- just quick question. Your confidence at the higher end of the guidance range, I imagine just based on what looks like a kind of a stable U.S. market, maybe not growing quite as fast as we had thought couple of months back. Is the upper end because of the offshore piece, or is it -- are there other elements to it that give you comfort?

[Cindy Taylor, President and CEO]

We're performing well relative to the market dynamics that you have described very appropriately, but definitely, we have a strong outlook, particularly in the second half around our Offshore Manufactured Products driven. And again, it's a backlog-driven business. And I mentioned in my comments that those major project award should lift our overall revenue and EBITDA generation for that segment. That is not to say that we are “negative on US land”, but I acknowledge that at a minimum, it's flattening just a bit, but I've always looked at -- you can't just ride the market, you need to do better than the market. And that's going to be driven by customer market share and penetration, increased utilization, and in our case, some new product introductions that if there is this softening around gas first of all, I don't think it'll be that significant. But two, we hope to counter that with new product introductions and better market share penetration. But the simple answer to your question is, most of the lift towards the upper-end of that range does in fact come from Offshore Manufactured Products.

[Stephen Gengaro, Stifel]

Great. That's very helpful, Cindy. Thank you.

[Cindy Taylor, President and CEO]

Thank you, Stephen.

[Operator]

Your next question comes from the line of Luke Lemoine with Piper Sandler. Your line is open.

[Luke Lemoine, Piper Sandler]

Hey, good morning.

[Cindy Taylor, President and CEO]

Hello.

[Luke Lemoine, Piper Sandler]

Hi, Cindy. Maybe just a comment first that your stock [choppy] (ph) down 12%, but then on your book-to-bill, finished strong the past couple of years and fairly consistently only above 1 times. Question might be a little tough, since bookings can be pretty diverse, but could you talk about the margin profile you're seeing in your backlog versus maybe 12 to 18 months ago?

[Cindy Taylor, President and CEO]

For sure. Thank you, Luke. Stock trading in this space is a mystery. I always say the gift that keeps on giving because we actually entered this morning thinking our stock would be up 5% to 7% on a 5% beat on EBITDA. So, it's a bit confusing, but certainly, what we're booking into backlog is more oriented to our semi-proprietary equipment, and therefore does carry strong margins, number one, but also great expertise around the manufacturer of that, meaning, we have a great history in these product lines, particularly on the subsea side that includes our SCR, FlexJoints and other equipment. So the mix in backlog is a good mix.

We do hope to see continued ongoing demand for the short-cycle products. If that happens, our margins will perform well going forward.

[Luke Lemoine, Piper Sandler]

Okay, all right. Thanks, Cindy.

[Cindy Taylor, President and CEO]

Thanks, Luke.

[Operator]

[Operator Instructions] Your next question is from the line of Kurt Hallead with Benchmark. Your line is open.

[Kurt Hallead, The Benchmark Company]

Hey, good morning.

[Cindy Taylor, President and CEO]

Hey, Kurt.

[Kurt Hallead, The Benchmark Company]

Hey. Just a quick kind of follow-up here, Cindy. You've made an interesting point about the EBITDA beat for the quarter and you made a reference to your conviction about achieving the higher-end of your guidance. And maybe given the stock being down the way it is, could you just kind of remind us what that guidance range was?

[Cindy Taylor, President and CEO]

I believe it was revenue increased year-over-year of 15%-plus with an EBITDA range of $92 million to $100 million.

[Kurt Hallead, The Benchmark Company]

Okay, great. I appreciate that. Yes. I see the consensus, EBITDA is out there at $90 million, $95 million. So clearly, nothing has changed. I'd echo Luke's point, your point, it's a head scratcher for sure today. All right. So the dynamics -- the focal point here, at least financially is, you kind of referenced some new MPD equipment and demand for that equipment. MPD seems to be gaining a lot of airtime on a number of different conference calls that I've listened to so far this quarter. I would say just in some instances when some of these technologies are being discussed at a broad level, it's clearly a demand pull kind of concept, but then it kind of bakes the question around what's the market penetration opportunity? Are we going to see situations where -- is demand pull greater than supply because when a number of different players start entering a market always bake the question around how aggressive players have to be on pricing. So I was wondering if you just give us as much color as you can around that without giving up any state secrets.

[Cindy Taylor, President and CEO]

Well, no, I think your comments are very appropriate. I will say that we are not trying to compete with standard MPD equipment that is in the market. We have defined ours to be both lighter, lower cost, easier to change out pressure control components. So think of this as what we believe is a more suitable “better alternative” than the standard MPD equipment that's out in the market. And therefore, I don't think about equipment on equipment competition and therefore lower pricing. I don't look at it that way. I look at this as offering enhanced technology to the marketplace that is a better mousetrap, if you want to call it that and much like we just got an OTC award around our active seat gate valves. You can say, well, that's just another valve that go in frac equipment. It is a much more differentiated and enhanced valve that is gaining rapid market acceptance. So again, I don't think of these as equipment on equipment competition that will lower price.

[Kurt Hallead, The Benchmark Company]

Okay, that's great. And then maybe circling back around to your Offshore Manufactured Products and you kind of reference, generally speaking, that you look to outperform whatever market dynamics are in play for your varying product line. So I think some of the data that we've seen recently suggests that offshore FIDs will be up something along the lines of 50% or so over the course of next couple of years, it’s going to be their highest level in over 10 years or so. Just wanted to kind of put it into a framework is, could your business sort of track that FID kind of increase is kind of an overarching question? And then the subset of that question would be, look, FTI is out there talking about $25 billion order book over the next few years, and we've seen substantial increase in deepwater drilling activity. Can you just remind us what the kind of lead lag dynamics are around deepwater drilling activity and subsea infrastructure as it relates to your business?

[Cindy Taylor, President and CEO]

Yes, I think we are highly correlated to the trends that TechnipFMC is seeing because they are more weighted to the subsea infrastructure side of the business that we have selected things i.e., our risers and our MPD equipment that will go on increase drilling, if you will, for new fields, but more weighted on the subsea infrastructure development side, production side of the equation. So, I always say when Doug's business at TechnipFMC is doing well, we will proportionately perform well also.

[Kurt Hallead, The Benchmark Company]

Okay, awesome. And maybe if I could add one more, just on Well Site Services. Yes, there is [indiscernible] taking place as you referenced on the natural gas side of the business, but it looks like the oil basins are stable to ticking up at the margin at the very least. Land drillers and frac companies have both basically said they're going to hold the line on pricing. Just kind of curious as to what you may be seeing in your product lines in terms of how some of your competitors are acting from a price standpoint?

[Cindy Taylor, President and CEO]

Yeah. Well, first of all, we're not as exposed to the Haynesville. I really think of this [indiscernible] around the Haynesville. And the projections by analysts that we might drop as many as, I don't know, 30 gas oil rigs in the Haynesville. That's a pretty big number for that market. I personally believe that the Northeast gas market holds up pretty well. But in totality, the gas rig count in total is about 20% of the rig count. We're just not that exposed necessarily to the natural gas basins that we're talking about, particularly the Haynesville.

And so, I'm not minimizing this conversation. But our business is different than the more capital-intensive businesses that are out there, i.e., land drilling, pressure pumpers, and obviously, that -- you realize I've worked for it in my past lifetime, a nominal increase and the rate can have a pretty significant hit to revenues and EBITDA. That's really not the business we have. And our equipment is easily mobilized between locations, just given the five that's there. I just don't see a material impact to our land-based business at this point in time.

And again, I'm one of the ones like -- I'm very bullish on natural gas for the long term, particularly with the LNG facilities that are going to come in and even just Freeport LNG back -- being back online, it helps pretty significantly with this supply-demand balance that was imbalanced while they were down. I mean, that's a -- in a warm winter there's a number of factors there, but again, bullish for the long term. And I just don't see a major degradation in activity here.

[Kurt Hallead, The Benchmark Company]

Great. Thanks, Cindy. I appreciate the color.

[Cindy Taylor, President and CEO]

Thank you, Kurt.

[Operator]

Your next question is from the line of John Daniel with Daniel Energy Partners. Your line is open.

[John Daniel, Daniel Energy Partners]

Good morning, Cindy and Lloyd. How are you?

[Cindy Taylor, President and CEO]

Hi, John.

[Lloyd Hajdik, Executive Vice President and CFO]

Hi, John.

[John Daniel, Daniel Energy Partners]

Hi. First, I appreciate your comments. I'm trying to understand stock prices. I wasn't very good at it, just like [Kurt] (ph). Question for you on product development with respect to energy transition. This is more of an education for me. But Cindy, when you guys try to bring a new product or service to market, can you speak to -- broadly speaking, the time to do so? And then when you come up with the idea generation for the new sort of transition-related products and services, is that coming from the customer or where they say here's an idea, go execute on it, or is it from your team that says we've gotten an idea that might work? Just any color on that would be helpful.

[Cindy Taylor, President and CEO]

Yeah, I mean, everything we do is responsive to our customers at the end of the day, but these are internally developed technology. We've got a longevity of our team. Globally, quite frankly, that knows the market very well. And our time to market varies. And so, that's going to be an answer I got to explain, but meaning, if you are adapting an expertise you have, i.e. in riser systems and you're adapting that from conventional oil and gas to deepsea minerals, you have a leg up just in terms of operating conditions and knowledge in deepwater environments. And so, that was a bit quicker to market as an example.

I can contrast that to an MPD system just because we didn't have MPD systems in our portfolio before even though we've been working in deepwater as long as deepwater has been around quite frankly. We're well recognized for it. But that market introduction for MPD system is probably taken a little bit longer, just because it's a new product for us. However, we've worked with all the deepwater drillers again for decades and they know our capabilities. And so, we're beginning to get those products to market.

And what you need to do is, say, we've improved that piece of equipment and can benefit our operations with it. The one that's going to take us longer and it's going to take the whole industry longer is the floating TLP system that we have designed around offshore wind. Right now, there are virtually no floating wind systems anywhere in the world. So this is completely new technology. And even the leasing of the areas as we can talk about, it's in the very, very early stages. So we're not really talking about having contractual revenue around floating wind until 2026. So those markets are very immature and they've got to develop.

And as I’ve said at certain conferences, the industry hasn't figured out yet. I always say we're aspirational, we're trying to get tactical, what does it take to deploy 26,500 wind turbines in the next five years or so, where is the engineering, where are the manufacturing facilities, where are the key sides, where are the installation vessels, just a lot of work yet to develop. And so, it can obviously span a long range. But what we're trying to do is develop existing technologies into new applications. We're not trying to create a think-tank, something we've never done before. And so, our time to market should be one faster and more efficient than someone that doesn't have the expertise that we have.

[John Daniel, Daniel Energy Partners]

Fair enough. And as your team was trying to come up with ideas and solutions three to five years from now [indiscernible], are you focused on like three or four things, or are there like 20 things on the drawing board in terms of opportunity sets? Just trying to...

[Cindy Taylor, President and CEO]

Given our size, we've been very focused on things that we can manage internally and obviously, we want to manufacture these long-term. So we're positioning our facilities in key markets to be able to handle both conventional work as well as any type of new emerging technology as well.

[John Daniel, Daniel Energy Partners]

Okay. Thank you for letting me ask you questions.

[Cindy Taylor, President and CEO]

No. Thank you, John.

[Operator]

Your next question is from the line of Doug Becker with Capital One. Your line is open.

[Doug Becker, Capital One]

Thanks. So there is a story on Bloomberg that Oil States plummets on negative free cash flow results. From my perspective, I didn't think it was a surprise that free cash flow was negative in the first quarter, given normal seasonality. Lloyd mentioned a similar growth trajectory on free cash flow versus last year, which to me means free cash flow is probably up year-over-year. So I guess the question is, could you just go into a little more detail about the free cash flow outlook this year?

[Cindy Taylor, President and CEO]

Yeah, I'll let Lloyd finish, but we guided to this. We experienced it every first quarter that's normally just relative to our size, we pay out incentive payments as much as anything. And then coupled with growing revenue, which is what shareholders should want, you're going to have a working capital build. But we've never had any material write-off, working capital or anything else.

So if you look at that, while I will file our 10-Q. First of all, it's in the press release that cash -- full cash flow statement. File our 10-Q tonight, but it's kind of a -- again disappointing to me. This is one of the cleanest quarters. We don't do add backs to EBITDA. It's one of the best results we've had. We have no debt maturities till 2026. And these little headlines don't capture the fact that we performed extraordinarily well this quarter relative to expectations.

And so, I have no concerns. I'll sleep perfectly well tonight about the working capital and “negative free cash flow in Q1”. And again, we got into it. In fact, we did a little bit better than what within our internal budgets. We will be free cash flow positive for the year, and Lloyd can give you more details on that. But again, I just think it's a misinterpretation of where we are as a company.

[Lloyd Hajdik, Executive Vice President and CFO]

Yeah. Doug, Cindy is exactly right. When I look at free cash flow from quarter one of last year to quarter one, we're exactly the same, the negative free cash flow. First quarter heavy use with short-term and long-term incentives like she said as well as working capital investments, not to mention the cash we used to fund the repayment of the convert. All of those things are positive in our view. And then, the balance of the year expected to be significantly cash flow -- free cash flow positive.

[Cindy Taylor, President and CEO]

Yeah. Doug, the only other headline we saw this morning, Zacks came out and said we missed earnings 25%, i.e., we reported $0.03 a share rather than $0.04 a share, which we haven't tried it on EPS in a long time. I'm ready. I'm glad of that. And we had a higher effective tax rate with non-cash terms that normalize over the year. So again, if we ever get a chance to really parse through, I think most people say this is a total overreaction to nothing on our stock.

[Lloyd Hajdik, Executive Vice President and CFO]

No question.

[Doug Becker, Capital One]

Your comments makes sense to me. I appreciate the time.

[Cindy Taylor, President and CEO]

Thank you, Doug.

[Operator]

There are no further questions at this time. I will now turn the call back to Cindy Taylor.

[Cindy Taylor, President and CEO]

Guys, I just want to thank everybody for dialing in this morning. I know it's the heaviest week of earnings -- of the earning season, and is particularly important to us I'd say today just because we feel like there's some misinformation about the business and the company. And we look forward to, obviously, better stock price performance in our future conversations with you. But I hope the rest of the season goes well, and we'll talk to all of you very soon. Thank you.

[Operator]

Ladies and gentlemen, this concludes today's conference call. You may now disconnect.