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spk06: Greetings. Welcome to MRC Global's first quarter 2023 earnings conference call. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. If anyone today should require operator assistance during the conference, please press star zero from your telephone keypad. Please note, this conference is being recorded. I'll now turn the conference over to Monica Broughton, Vice President, Investor Relations and Treasury. Monica, you may now begin.
spk00: Thank you and good morning. Welcome to the MRC Global First Quarter 2023 Earnings Conference Call and Webcast. We appreciate you joining us. On the call today, we have Rob Saltil, President and CEO, and Kelly Youngblood, Executive Vice President and CFO. There will be a replay of today's call available by webcast on our website, mrcglobal.com, as well as by phone until May 23, 2023. The dial-in information is in yesterday's release. We expect to file our quarterly report on Form 10-Q later today, and it will also be available on our website. Please note that the information reported on this call speaks only as of today, May 9, 2023, and therefore, you are advised that the information may no longer be accurate as of the time of replay. In our call today, we will discuss various non-GAAP measures. You are encouraged to read our earnings release and securities filings to learn more about our use of these non-GAAP measures and to see a reconciliation of these measures to the related GAAP items all of which can be found on our website. Unless we specifically state otherwise, references in this call to EBITDA refer to adjusted EBITDA. In addition, the comments made by the management of MRC Global during this call may contain forward-looking statements within the meaning of the United States federal securities laws. These forward-looking statements reflect the current views of the management of MRC Global. However, actual results could differ materially from those expressed today. You are encouraged to read the company's SEC filings for a more in-depth review of the risk factors concerning these forward-looking statements. Now, I'd like to turn the call over to our CEO, Mr. Rob Saltil.
spk04: Thank you, Monica. Good morning, and welcome to everyone joining today's call. I will provide a high-level review of our first quarter results and sector performance, followed by our 2023 outlook, and conclude with comments related to our term loan refinancing. Kelly will provide a detailed review of the first quarter results and 2023 guidance before I end our prepared remarks with a brief recap. I will begin by discussing a change in our sector reporting effective this quarter. As we have highlighted frequently over the last few years, we continue to diversify our business where today our traditional upstream and midstream sectors on a combined basis represent about a third of our company's annual revenue. Five years ago, these sectors comprised more than 50 percent of our sales. These businesses have similar drivers relating to general oil and gas production activity and commodity pricing, and they share common customers who participate in production gathering and processing activities. In addition, these sectors have been managed at MRC Global by common business leaders. As a result of these factors, we have combined the two businesses into a new sector called Production and Transmission Infrastructure, or PTI for short, which we will use for reporting going forward. Moving on to our financial results, I am very pleased with our strong performance in the first quarter, as this provides us with increasing confidence in our full-year outlook. Our top line was strong, with revenue of $885 million, representing 2% sequential growth and a 19% year-over-year improvement. Compared to the same quarter last year, each of our three sectors experienced double-digit revenue increases, with diet and PTI leading the way. We realized EBITDA of 69 million, which was 44 percent higher than the first quarter of 2022, with EBITDA margins of 7.8 percent, a 130 basis point increase. This improvement is the direct result of our focus on cost discipline and higher adjusted gross margins, driven by product mix and improved pricing. Our revenue backlog was 14% higher at the end of the first quarter of 2023 versus the first quarter of last year, and up 2% sequentially, signaling continued strength across our business. Our profitability improvement is translating into improved returns on invested capital, or ROIC. After adjusting for the impact of LIFO, our ROIC was 11.5%, on a trailing 12-month basis. We expect this metric to continue to increase throughout 2023 and in future years, and we see it as a key driver for value creation. Turning now to our sector performance, our diet sector stands out as the primary driver for our company's sequential and year-on-year growth, as revenues expanded 12% sequentially versus fourth quarter 2022, and by 23% versus first quarter 2022 levels. In both comparisons, Higher turnaround and maintenance spending by refiners and chemicals customers, along with increasing activity associated with LNG projects, led to revenue increases. We've had tremendous success with LNG projects this year, driven by our expanded project planning and execution capabilities, our early engagement with end users, and our deepening relationships with EPCs and OEMs. Our Project Center of Excellence maintains a growing backlog of LNG projects that underpin our expectations for strong revenue growth. Our PTI business continues to benefit from improving fundamentals and our increased focus on Permian Basin opportunities. This business experienced a 22 percent revenue improvement over the first quarter of 2022 as our customer base, comprised primarily of IOCs and larger independent public companies, continued to execute their plans. Despite the recent volatility in oil and gas prices, We continue to expect the PTI sector to have strong results this year. Our gas utilities business continues to perform well with 13% year-over-year sales growth, as several customers implemented meter upgrade and pipeline integrity projects, as well as other system reliability environmental activities. This business has achieved a 12% compound annual revenue growth rate over the past six years, and it continues to be an exciting growth engine for our company. Given that our gas utilities performance is largely independent of oil and gas commodity prices, this sector is a highly resilient contributor to the MRC global investment thesis. I want to now provide a few comments on our 2023 outlook. Our strong first quarter performance, our solid and growing backlog, and our strong alignment with our customer spending plans all provide us with increasing confidence in our 2023 outlook. We reiterate our previous guidance as we continue to expect double-digit sales growth and EBITDA margins exceeding 8%. We expect strong revenue improvement across all three business sectors and geographic segments. And we continue to target generating cash flow from operations of $120 million or more for the full year. Kelly will provide further details on our 2023 guidance in this section. Finally, I would like to address the postponement of our recent term loan refinancing. In April, we launched the refinancing of our $295 million term loan B. As a reminder, this loan does not mature until September of 2024, but we attempted to refinance the loan earlier to take advantage of improving debt market conditions. Shortly after the launch of the refinancing, our preferred stockholder initiated a court action to prevent the refinancing from closing. This action complicated the execution of the refinancing on favorable terms, so we elected to postpone the refinancing efforts before their conclusion. We are in discussions with our preferred stockholder regarding our capital structure and the disposition of the preferred shares, and we are hopeful that a resolution can be achieved. Any agreement we reach should be fair to all shareholders. I also want to remind our shareholders that we expect to continue to have ample liquidity under our global asset-based lending facility, which does not mature until September of 2026, to repay the term loan debt in full should that be necessary. Our liquidity situation is solid and improving as we continue to focus on generating significant cash from our operations this year and into the future. And with that, I'll now turn the call over to Kelly.
spk02: Thanks, Rob, and good morning, everyone. My comments today will primarily be focused on sequential results comparing the first quarter of 2023 to the fourth quarter of 2022, unless otherwise stated. Total sales for the first quarter were $885 million, a 2% sequential increase, outperforming our original expectations. From a sector perspective, I will begin with our gas utilities and diet sectors, which make up approximately two-thirds of our revenue and represent our more resilient, less cyclical business lines. Gas utility sales were 307 million in the first quarter, a 12 million or 4% decrease due to the timing of deliveries and projects in the U.S. Compared to the same quarter last year, the gas utility sector grew 13% on strong activity levels associated with safety-related modernization, emission reduction programs, and continued infrastructure improvement projects. The diet sector first quarter revenue was 278 million a sequential increase of 30 million or 12% driven by LNG projects along with increased turnaround and maintenance spending for refining, chemicals, and mining customers. This sector delivered 23% growth in the first quarter of 2023 over the same quarter a year ago, again on the strength of LNG project work along with refining and chemical customer turnaround and maintenance projects. The PTI sector revenue for the first quarter was $300 million, a modest decrease of $2 million or 1% sequentially. In the U.S., our customer base, which includes the larger public EMP operators, were very active with completions activity in the Permian Basin, but offset by the timing of lower gathering and processing projects this quarter. We also saw the backlog for PTI, including gathering and processing projects, increase by 10% since year-end. From a geographic segment perspective, U.S. revenue was $740 million in the first quarter, a $20 million increase from the previous quarter driven by the diet sector, which was up $28 million or 15%. Canada revenue was $42 million in the first quarter, sequentially down $4 million or 9% due to the timing of certain pipe orders. International revenue was $103 million in the first quarter, unchanged from the previous quarter, However, the international backlog is up 16% since year end. Now turning to margins, adjusted gross profit for the first quarter was $188 million or 21.2% in line with the fourth quarter. Although we have seen deflation in our line pipe business, we have been successful offsetting this headwind with other products such as BAMI that are accretive to overall company margins. We continue to target average gross margins of 21 percent for 2023, a step change from our historical averages. Reported SG&A for the first quarter was 122 million or 13.8 percent of sales as compared to 123 million or 14.2 percent for the fourth quarter of 2022. The 40 basis point improvement this quarter was a function of our strong cost control initiatives and higher quarterly revenue. For the full year SG&A, we continue to expect the average percentage of sales to be in the mid-13% range. As our revenue trends higher throughout the year, we expect to see the cost as a percent of revenue gradually declining. EBIT offered the first quarter with 69 million, or 7.8% of sales, a 20 basis point improvement over the fourth quarter of 2022, and 130 basis point improvement over the same quarter a year ago. evidence of the improved efficiencies that we achieved over the last few years, driving more incremental revenue to the bottom line. Tax expense in the first quarter was $13 million with an effective tax rate of 28% as compared to $12 million of expense in the fourth quarter 2022. The difference in the effective rate and the statutory rate is due to state income taxes, non-deductible expenses, and differing foreign income tax rates. For the first quarter, we had net income attributable to common stockholders of 28 million or 33 cents per diluted share, and our adjusted net income attributable to common stockholders on an average cost basis normalizing for LIFO income was 27 million or 32 cents per diluted share. In the first quarter, we consumed 30 million in cash from operations, which is normal course of business for us as we tend to ramp up our inventory purchases earlier in the year in preparation for the seasonal highs that we typically experience in the second and third quarters. We expect to generate cash in each of the remaining quarters of the year, ultimately achieving our 2023 goal to generate operating cash of $120 million or more. Additionally, we typically generate more cash in the second half of the year. And as we previously mentioned, generating cash consistently each year going forward in both years of growth and decline is a key initiative for the company. Working capital as a percent of sales was 17.9% in the first quarter, up from 16.2% in the fourth quarter of 2022, primarily due to the higher inventory build this quarter. This percentage is expected to gradually decline each quarter going forward due to a combination of reduced inventory and increased revenue. Our total debt outstanding at the end of the quarter was 390 million, And our leverage ratio based on net debt of $351 million was 1.2 times, which is in line with the record we set last quarter and a considerable improvement over the same quarter in the prior year when our leverage ratio was 1.6 times. Our availability under our ABL facility was $601 million, and we had $39 million of cash for a total liquidity position of $640 million at the end of the first quarter. This is nearly a 100 million increase in liquidity compared to first quarter of last year. And as Rob mentioned, we continue to expect to have plenty of capacity under our ABL for use, if needed, to address the upcoming maturity of our term loan B in 2024, if we are unable to come to a resolution with our preferred stockholder. To finish off our 2023 outlook, as Rob mentioned earlier, Our solid first quarter results provide us with confidence in our 2023 outlook. We continue to target a double-digit percentage revenue increase and expect to surpass the 8% hurdle for EBITDA margins. From a sector revenue perspective, we expect the PTI segment to increase the most in the mid-teens percentage range, followed by diet with an increase in the low double digits, and finally gas utilities to increase in the high upper single digits. From a geographic view, this translates to a low double-digit percentage improvement in each of our segments. Our normalized effective tax rate for the year is projected to be 26 to 28%, but could fluctuate from quarter to quarter due to discrete items. And from a cash perspective, as activity levels continue to improve and our inventory levels decline from current levels, it is expected to translate into meaningful cash generation for the remainder of the year with $120 million or more in cash flow from operations. And as mentioned earlier, we expect a higher percentage of this cash flow to materialize in the second half of the year. Excess cash will continue to be prioritized in the near terms towards further strengthening the balance sheet and growth of the business. Regarding our capital expenditures, we expect those to be in line with historical averages in the $10 to $15 million range. And finally, as we look at the cadence of revenue throughout the year, We expect the second quarter to increase sequentially in the low single digits driven by our gas utility business with continued growth in the third quarter before our normal seasonal decline in the fourth quarter. And with that, I would like to turn it back to Rob for closing comments.
spk04: Thanks, Kelly. Our stronger than expected first quarter financial results reflect strength across all three business sectors and our continuing focus on profitability and capital efficiency. These are some of the highlights I want to summarize before opening for Q&A. Our impressive first quarter performance and the growing backlog of business have increased our confidence in our 2023 outlook. We expect double-digit revenue growth and EBITDA margins in excess of 8% for 2023. All three of our business sectors are expected to achieve solid growth rates. Cash generation from operations through the business cycle remains a priority. and we are targeting in excess of $120 million in operating cash flow in 2023, even with double-digit revenue growth. Our diversification strategy is paying off with approximately two-thirds of our revenue generated outside the traditional oil field. Our gas utilities and diet sectors thrive largely independent of commodity prices, and they each offer attractive growth prospects over the longer term. And with that, we will now take your questions.
spk06: Operator? Thank you. We'll now be conducting the question and answer session. If you'd like to ask a question today, please press star 1 from your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants that are using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions.
spk05: Thank you. Thank you, and our first question is from the line of Tommy Maul with Stevens. Please proceed with your questions.
spk03: Good morning, and thanks for taking my questions. Hey, good morning, Tommy. Rob, I wanted to start on the revenue outlook for the year where it sounds like you've got increasing confidence for 2023, specifically around the PTI segment, mid-teens for the year. Recognize that that's a new segment name, but it feels like it's essentially an unchanged outlook from before 2020. That's in the context of a U.S. rig count that's down slightly year-to-date. Maybe that was contemplated originally. Maybe your customers have bucked the trend to some extent, but anything you could do to provide us some context on those two data points would be helpful. Thank you. Yeah, thanks, Tommy.
spk04: You're 100% right. We continue to feel very constructive around the PTI data. sector, which comprised our former upstream and midstream businesses. And a big part of that, despite some of the volatility in crude pricing, natural gas pricing being depressed, and the fact that the rig count has moved off a little bit, is that we are heavily levered to the IOCs and the large publicly traded independents. These folks have tended to set their CapEx plans well in advance and tend to be less sensitive to swings in commodity prices, especially in the most prolific basins like the Permian where we have a concentrated position. So everything we're seeing in the market in terms of our activity, the customers that we're having, discussions we're having with customers, all suggest that our outlook of the mid-teens percentage increases in the sector performance this year is intact.
spk03: Thank you. That's helpful. As a follow-up, I wanted to pivot to the comments you made around the refinancing. And I certainly understand that you don't have perfect visibility here. However, from the outside, when is it reasonable? Do you think that we will get an update here on the path forward? Is there any insights? even if preliminary on the range of options that might be on the table here. Just anything you could do, because I think a lot of folks listening today and in the marketplace may not have thought through these issues as deeply, obviously, as you have now. So just help us get up to speed here on what's going on. Thank you.
spk04: Sure. Well, Tommy, maybe just for context setting, it would be helpful to note that when we went out to – refinance the term loan B last month, it really was opportunistic. The loan itself doesn't mature until September of 24, and we were motivated by what we saw as an opportunity with market conditions being favorable to go out and try to refinance that. And obviously now with the disagreement that we're having with our preferred shareholder, it's obviously created some other complications that we've got to think through. But as I mentioned in the prepared comments, we are looking to come to a resolution. The preferred stockholder has been involved with this company since its inception. We've got a great relationship with that group. Unfortunately, we have a business disagreement. So we are working very constructively to see what outcome would be favorable for all stakeholders. We know that potential discussion of the preferred shares and their redemption is something that will be considered but at this point in time Tommy I'm hesitant to be too definitive about how a resolution of this issue could be resolved in terms of structure as well as in terms of timing it's something that we are very focused on as leadership team the good news for the company of course is that we've got ample liquidity with our ABL that really gives us lots of time and capacity to address any refinancing issues if it gets to that point. But let me be clear, you know, if we can reach an amicable resolution sooner rather than later, we will do that. We're just not able at this point to be too specific about how that resolution may take shape. Thank you. We'll stay tuned and I'll turn it back. Great.
spk06: Thanks, Tommy. Our next question is from the line of Nathan Jones with Stifel. Pleased to see you with your question.
spk01: Good morning. This is Adam Farley on for Nathan.
spk04: Yeah, hey, good morning, Adam.
spk01: Good morning. I wanted to start with the adjusted gross margin line. Are you still seeing inflation in any of your product categories outside of line pipe, which I understand is moderating? And how should we think about adjusted gross margin progression for the remainder of the year?
spk02: Yeah, Adam, this is Kelly. I'll take that one. No, really, you know, you kind of said it. Line pipe, you know, we had been seeing some deflation compared to some of the highs we saw last year. And certainly, you know, line pipe margins were a nice tailwind in 2022. With that said, though, I will say here recently we've seen some increases again in line pipe. We're not counting on those for the rest of the year, but certainly it's been a nice little tailwind here over the last quarter or so. But I think as we've said in the last couple of phone calls, even with the headwind we expect in line pipe margins, we think that will be offset or more than offset with improvements in margins in other product categories we have. BAMI being one of those, which is roughly a third of our business in the valve automation piece. Our stainless products are accretive to overall margins. Carbon fittings and flanges is accretive to our overall margins. So we think you know, with improvements we're seeing in those areas, that will help offset that. And then to answer your question more directly, I think in those non-line pipe categories, you know, the more kind of non-commoditized categories, You know, we're certainly seeing inflation start to stabilize some, but we are still seeing some inflation in different categories. And as you know, there's, you know, there's opportunity kind of windows we have in our contracts to, you know, to, you know, get price increases to offset those inflationary increases. You know, we got a lot of those increases in the second half of last year, starting to see kind of the full run rate effect of those this year. but still have a few more of those to get through the system. So with all of that said, we're still reiterating our 21% margins throughout this year. It'll fluctuate obviously month to month, quarter to quarter, but we feel strongly we can still get those margins.
spk01: Okay, that's really helpful. And then I wanted to shift to your diet sector. It sounds like there's a lot of strength in some of your more traditional energy project funnel. Do you expect that strength to continue through the year? And then also, can you maybe provide an update on some of your energy transition business? Thank you.
spk04: Yeah, I'll take that one, Adam. Look, you're 100% right. Our diet sector has been very exciting for us. We're up 23%. year-on-year versus the first quarter of 2022. So we're really seeing strength across the board, starting with refining and chemicals. We're involved in a lot of turnaround and project activity. You know, we saw that in the first quarter, and then we'll see it throughout the year. On the refining side, you'll see that mostly after the driving season is complete because we get the maximum refinery utilization in the summer driving months. But on the chemical space, we've talked about that before. That's a growth opportunity for us. We're penetrating new customers with new products. We've got some experts working on our team who really understand these processes, and we're gaining market share there. So really, refining chemicals has been a huge driver for us this year in that growth, and we look for that to continue. As I also mentioned in the prepared comments, LNG has been very exciting for us. This is a growth area for us with the U.S. now being the leading LNG exporter and with lots of cheap natural gas available for markets that are challenged with their natural gas supplies. We see this as being an opportunity for us going forward for quite a few years. We've got a number of projects that we're currently involved in. We've got other projects that are in the hopper that we're tracking. And so we think the LNG part of our dive business will continue to grow as we move through the rest of this decade. And then I didn't spend too much time in the prepared comments on energy transition, but this business continues to truck along for us. We're actually ahead on revenue this year versus where we were last year. That said, this is a very project-oriented business. Most of what we're doing is is either renewable diesel slash sustainable aviation fuel, or it involves wind power projects. And those things tend to be lumpy in terms of when they occur, when orders are actually booked and billed. So there will be a little bit of lumpiness in that energy transition space, but as I said, we're off to a good start this year, and we see this as a major growth vehicle for us going forward. And we're seeing early signs now of carbon capture projects being tracked and available for us. So really, our team has done a great job getting involved in projects, which is really what we're looking at with LNG and energy transition. And as we continue to deepen our ties with EPCs, engineering procurement and construction companies, and the OEMs that serve these projects, we're very well positioned for growth in this sector.
spk05: Thank you for taking my questions.
spk04: You're welcome. Thank you.
spk06: As a reminder, if you'd like to ask a question today, you can press star one from your telephone keypad. Our next question is from the line of Ken Newman with KeyBank Capital Markets. Please proceed with your question.
spk07: Hey, good morning, guys.
spk06: Morning, Ken.
spk07: Morning. quickly on the 2Q revenue guidance being up low single digits sequentially. You know, I think the business is typically up something more like mid to high single digits in the second quarter. I'm just curious, is that a function of some potential pull forward in the first quarter or maybe just some extended timing on the gas utility project deliveries? Any color there would help on explaining just the maybe sequentially softer sales growth versus historical trends.
spk02: Yeah, Ken, this is Kelly. I'll take that one and Rob may want to add on. But yeah, you know, you're exactly right. Usually we're up, you know, probably at least kind of mid single digits sequentially Q1 to Q2. But Q1, if you remember, we kind of guided coming into this year that we thought we would be down low single digits. We were actually up a couple of percent sequentially. So that certainly implies there was some pull forward there of revenue that we had forecasted in Q2 that ended up hitting in March. for us, but if you take the full first half effect, you know, of what we're, you know, the actual results of Q1 versus what we're guiding to here in Q2, and compare that back to street consensus, we're essentially spot on, right? So, really, first half is playing out the way we thought. It's just a little bit different mix in Q1 versus Q2.
spk07: Got it. Maybe back on to the gas utility side. Sorry if I missed this in your prepared comments, but did you talk about the timing of gas utility spending returning to more normal levels and maybe a little bit more color there? Is that more a function of supply chain challenges? What was the issue with potentially getting deliveries out the door in the way that you wanted?
spk04: No, there's really no issue there. I mean, look, our gas utilities business continues to be a real strong competitor. business for this company. And as we've said before, it's one that has very little relationship to commodity prices. It's a business that we've grown over the previous two years at better than 20% revenue clip. And this year, even just quarter on quarter, the gas utility space is up 13%. In the first quarter of the year, because of weather and other factors coming out of the gate, sometimes you see it start a little slower. But You know, our outlook for gas utilities this year is very bullish. It's very much intact with our guidance. And I think if you just look across our, you know, across our business and you see the growth and the backlog and the projects that we're looking at for gas utilities, this is going to continue to be a great story for us this year.
spk07: Okay. So just to clarify, you would expect that kind of return back to more normalized types of sales levels in the second quarter. Is that a correct assessment?
spk02: Yeah, Ken, actually, if you look at our Q2, and I think I said this in the prepared remarks, you may have missed it, that the Q2 improvement that we're expecting to see in Q2 is driven by gas utilities. Gotcha.
spk07: Yeah. Just a few more for me. You know, it looks like a pretty sizable step up in the inventory days, both on a sequential and year-over-year basis. I am curious, you know, we've heard from other distributors outside of the oil and gas field just talking about normalizing lead times and maybe that impacting, you know, near-term inventory decisions. I'm curious if you're seeing any of that kind of play out currently or just how do you think about the cadence of inventory work down as the year progresses?
spk04: Yeah, I'll take that one. Look, I think if you look at our balance sheet, you can see that we increased our inventory by almost $100 million. just to quarter to quarter here. And obviously, we did that in anticipation of increasing sales activity this year. You know, we're in the business of holding inventory for our customers where they need it and when they need it. And we wanted to be absolutely sure that we had ample inventory. That said, you know, we're at peak inventory levels for this year as we at least forecast that. So what you'll see is that we'll continue to work our inventory down as we work through the year. And obviously that'll contribute quite a bit to our cash flow generation that we've got for the full year. But you're 100% right on supply chains. They're getting, lead times are getting shorter. The supply chain blockages are being unstuck. And so we're going to be in a position now where just on an average cadence, we're going to be able to generate more sales with a limited amount of inventory because we can replenish that inventory on a timely basis with a lot more confidence. So I think the fact that you saw that we consumed $30 million of cash this year while building $100 million of inventory is actually quite a good story in why we continue to maintain our confidence in generating $120 million more of cash this year. But you won't see inventory builds like you saw in this last quarter. It's going to be headed down from here. And again, that'll contribute to the cash generation story.
spk07: Got it. Maybe if I could just squeeze one more in. Sorry if I missed this, Kelly, but did you talk about what you're looking for in terms of LIFO reserves, either for the second quarter or for the balance of the year?
spk02: We did not specifically say that. We actually, as you probably saw, had a little bit of LIFO income this quarter, just, I mean, slightly over a million or so. Last year, if you remember, we were, I forget the exact number, closer to $70 million of LIFO expensed And we do still expect LIFO expense this year, but at a much significantly lower level.
spk05: Understood. Thank you. Thank you.
spk06: Thank you. At this time, we've reached the end of our question and answer session. I'll hand the floor right to management for closing remarks.
spk00: Thank you for joining us today and for your interest in MRC Global. We look forward to having you join us on our second quarter conference call in August. Have a great day. Thank you.
spk06: Thank you. This will conclude today's conference. We may disconnect your lines at this time. Thank you for your participation.
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