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Operator
Thank you for standing by. This is the conference operator. Welcome to the Total Energy Services second quarter results conference call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star, then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and 0. I would now like to turn the conference over to Daniel Halleck, President and CEO. Please go ahead.
Daniel Halleck
Thank you. Good morning and welcome to Total Energy Services' second quarter 2020 conference call. Present with me is Julia Gorbache, Total's Vice President of Finance and CFO. We will review with you Total's financial and operating highlights for the three and six months into June 30, 2020. We will then provide an outlook for our business and open up the phone lines for questions. Julia, please proceed.
Julia Gorbache
Thank you, Dan. During the course of this conference call, information may be provided containing forward-looking information concerning total projected operating results, anticipated capital expenditure trends, and projected drilling activity in the oil and gas industry. At your event for results, may differ materially from those reflected in TOTAL's forward-looking statements due to a number of risks, uncertainties, and other factors affecting TOTAL's businesses and the oil and gas services industry in general. These risks, uncertainties, and other factors are described under the heading Risk Factors and elsewhere in TOTAL's most recently filed annual information form and other documents filed by Canadian Provincial Securities Authority that are available to the public at www.sira.com. Our discussions during this conference call are qualified with reference to the notes to the financial highlights contained in the news release issued yesterday. Unless otherwise indicated, all financial information in this conference call is presented in Canadian dollars. Total Energy's financial results for the three-month sentence June 30, 2020, reflect a historic collapse in economic and industry activity as a result of the COVID-19 pandemic and the implementation of quarantines and other restrictions on economic activities intended to contain the virus. North American drilling and completion activity began to decline in March of 2020, which declined and accelerated in April. Drilling and completion activity in Canada came to a virtual halt during the second quarter, with grid counts reaching all-time lows. U.S. drilling activity continues to grind lower during the quarter, with grid counts also reaching historical lows. Revenue in the compression and process services segment decreased materially year over year, with a low production activity. Industry activity in Australia began to moderate, but did not have material impact on the company's second quarter results. Our strategy to diversify geographically and operationally paid off during a tremendously challenging period. Reductions in North American revenues were somewhat offset by relatively stable revenues from Australia during the second quarter of 2020. Geographically, revenue generated in Australia during the second quarter of 2020 relative to 2019 increased by 28 percentage points to 44% of Consolidated Revenue, while North American contributions to Consolidated Revenue declined to 56%. By business segment, compression and process services contributed 43% of 2020 second quarter Consolidated Revenues, while services in 31%, concept-driven services 20%, and rentals and transportation services 7%. This compares to the second quarter of 2019 when CPS contributed 62% of consolidated revenue, content-driven services 16%, well-servicing 14%, and RTS segment 7%. When the COVID-19 outbreak was declared a pandemic in March of 2020, total energy took immediate and decisive action to protect its financial strength and liquidity. This included cost reductions and fiscal strategy changes, including the suspension of this dividend and reduction in the federal budget. As a result, despite a 67% year-over-year decline in quarterly revenue, consolidated EBITDA only declined 27%. The receipt of $4.5 million of Canadian Emergency Wage Subsidy, or QS, during the second quarter reduced cost of services by $3.6 million and SGMA by $0.9 million. Consolidated gross margin percentage for the second quarter of 2020 was 26% as compared to 15% during the second quarter of 2019. Excluded youth gross margin percentage was 21%, which represented a 40% increase as compared to the second quarter of 2019. This improvement was primarily due to a relatively greater contribution of high margin percentage service lines to the overall revenues and extensive cost savings measures implemented during the quarter. Selling general administration expenses for the second quarter of 2020 decreased by $6.5 million or 53% compared to Q2 of 2019. Excluding youth, second quarter GMA declined by 46% on a year-over-year basis. Within our CDS segment, our true youth dreaming days decreased by 67% during the second quarter of 2020, while revenues decreased by 58%, the EBITDA decreased only by 7%. The smaller proportionate decrease in EBITDA compared to revenue was primarily due to North American cost control measures combined with the increased relative revenue contribution from Australia as well as receipt of Qs. For the first half of 2020, CDS EBITDA increased 32% as a result of the completion of various North American equipment specialization projects. During 2019, increased relative contribution from Australia and ongoing cost control measures in all jurisdictions. Effective April 1, 2020, CDS segments revised its depreciation estimates for drilling equipment. As a result, this segment recorded $26.3 million of non-recurring depreciation expense related to non-fully depreciated assets and additional incremental depreciation expense of $4.2 million. This prospective change in depreciation estimates had no impact on EBITDA or cash flow. During the second quarter of 2020, RTS segments experienced a 62% decrease in rental utilization and a 20% decrease in revenue per utilized piece as compared to the same quarter of 2019. The decrease in revenue per utilized piece was primarily as a result of the mix of equipment operating. This resulted in a 69% year-over-year decline in revenue and 67% decrease in EBITDA. Total Energy continues to identify and pursue opportunities to rationalize operations in this segment to reflect the reality of current industry conditions. For example, during the second quarter of 2020, a substantial portion of heavy traffic fleet was taken out of service through use of rain costs and equipment wear until such time as North American industry conditions warrant placing such units back into service. While the compression process services segment continued to experience reduced demand for new product orders, the fabrication sales backlog stabilized after several quarters of decline. At June 30, 2020, This segment had a $43.8 million sales backlog, which was consistent with a $44.5 million backlog at March 31, 2020, but lower than the $77.2 million backlog at June 30, 2019. While coding activity remains active, project awards are being delayed as customers await more visibility. Despite a 77% year-over-year decline in CPS, second quarter revenue segment EBITDA for the quarter declined only by 44%. The lower rate of EBITDA decline was primarily due to a lower proportion of revenues being derived from lower margin fabrication sales as well as cost management as well as receipt of queues. Second quarter service hours and revenue in our well-servicing segment with 31% and 29% lower respectively, while segment EBITDA decreased by 10% as compared to the same period of 2019. Of the same 67% year-over-year decline in Canadian second quarter utilization and a similar 71% decline in the United States, with relatively stable utilization in Australia of 64%. While industry activity and drilling began to moderate in Australia, such decline did not materially impact our Australian operations during the second quarter. While substantial government funding has been announced to accelerate well-abandonment activity in Western Canada, to date, no significant incremental service risk activity has resulted from such announcements, although current expectations that such activity will commence in the near future, and we expect that our well-servicing segment to begin from such, to benefit from such activity. During the second quarter of 2020, total energy generated $13.8 million of cash flow and $36.2 million of cash from operating activities. as compared to $22.4 million and $4.1 million, respectively, in the second quarter of 2019. Contributing to the increase in cash generated from operating activities was $6.7 million of inventory online during the quarter, as well as $3.3 million increase in deferred revenue, as deposits were received during the quarter from new publication sales orders and gas compression rental contracts. Following the refinancing of $40.2 million term debt that matured in April 2020 with a $50 million five-year term loan bearing interest at a fixed annual rate of 3.1%, our net working capital position increased from the end of 2019 by 27% to $181 million. Net debt decreased 14%. to $124.6 million from December 31, 2019, with a repayment of $28.5 million of long-term debt, including $27 million of voluntary repayments of the month outstanding on total energy's $295 million of revolving credit facilities. At June 30, 2020, our weighted average interest rates on outstanding long-term debt was 2.96% as compared to 4.34% at June 30, 2019. This lower interest rate, combined with lower outstanding long-term debt balances, contributed to a $0.8 million year-over-year reduction in quarterly interest costs. Total energy bank covenants consist of maximum senior debt to trailing 12 months, bank defied defined EBITDA three times and the minimum bank defined EBITDA to interest expenses three times. At June 30th, 2020, the company senior bank EBITDA to bank EBITDA ratio, bank debt to bank EBITDA ratio was 1.95 and the bank interest coverage ratio was 9.5 times.
Daniel Halleck
Thank you, Yuliya. The second quarter of 2020 was unlike any period in our 24-year history. In the face of the COVID-19 pandemic and a substantial decline in the price of oil, the North American energy industry experienced historic activity decline and industry activity levels began to moderate in Australia. The benefit of total energy's diversified revenue base, combined with the immediate and substantial actions taken in response to these exceptional market conditions, are reflected in the company's ability to generate significant free cash flows even during the most difficult of times. We are pleased to be able to support our customers by maintaining continuous operations in all jurisdictions, while at the same time ensuring the health and safety of our employees and other stakeholders and preserving the company's financial strength and liquidity. During the second quarter of 2020, as Julia mentioned, our financial position continued to strengthen. After $6.3 million of net capital expenditures and $2.5 million of interest expense, the company generated $5 million of free cash flow before changes in non-cash working capital items. With the monetization of working capital, cash provided by operating activities during the second quarter of 2020 was $36.2 million. which was utilized to reduce long-term debt by $32.9 million, or approximately 12% during the quarter. Additionally, with the refinancing of $40.2 million of term debt that matured in April of 2020, our working capital position increased to $131 million, which included $21.1 million of cash at June 30th. Net debt totals $124.6 million at June 30, 2020, the lowest amount since Total Energy completed the acquisition of Savannah Energy Services in June 2017. In the three years since completing the Savannah acquisition, despite lackluster industry conditions for much of that time, Total Energy has reduced its net debt position by $110.4 million, or 47%. During the same period, the company has invested $100.3 million in net capital expenditures and returned $42.5 million to shareholders through dividends and share buybacks. Having suspended the dividend and reduced our 2020 capital expenditure budget by 57% to $10 million earlier this year, Total Energy is now squarely focused on further debt reduction and the pursuit of exceptional investment opportunities. I'm extremely proud of how our employees across all business segments have stepped up to ensure that Total Energy will not only survive the most challenging environment we have ever faced, but also emerge in a stronger and more competitive position. On behalf of our Board of Directors and shareholders, thank you. To our employees that are waiting to go back to work, we thank you for your perseverance and understanding and look forward to welcoming you back as soon as possible. I would now like to open up the phone lines for any questions.
Operator
Thank you. We will now begin the question and answer session. To join the question queue, you may press star then 1 on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star, then 2. Once again, to join the question queue, please press star, then 1 now. Our first question comes from Dane Billick of CIBC. Please go ahead.
Dane Billick
Good morning, everyone. Good morning, Dane. So, I guess starting off on the two up-going rigs that you had taken out of the field for upgrades and recertifications, I guess two-part questions. One being, how active were those rigs over the first half of the year? And secondly, any incremental color you can share on the nature of the upgrade as well as the customer commitment?
Daniel Halleck
So, first of all, we had telegraphed in Q1. We had anticipated these rigs would be coming down for recerts and upgrades. Our current $10 million 2020 capital budget contemplates the recertification of those rigs. The fact that they are going down for recert and upgrades doesn't mean they won't work during the period. What we're doing is doing some, how would you say, component work. upgrade class replacements that may allow the rigs to do shorter-term projects until such time as we have to pull them in and basically retrofit the main components. So, you know, that's a pretty dynamic process. I can't get into all the details, nor do I know all the details at this time, but suffice it to say we expect both rigs will be the retrofit upgrades and research will be done so that they're back operational in Q2. We do have the one rig committed. I'm not going to comment on contract terms, but the commitment includes us doing some modifications, basically to increase the capacity of the rig. we're pretty comfortable with what's happening there. So, again, I think, you know, you'll see utilization of the next three quarters, and that'll reflect two of these rigs being in a bit of a funny place, you know, undergoing research and upgrades, but also somewhat being available for, you know, one-off wells.
Dane Billick
Understood. That's good color. Thanks.
Daniel Halleck
Yeah, we couldn't put them out for a a program right now because we would, you know, the derricks would be maxed out on days.
Dane Billick
Right, right. Okay, that makes sense. I guess shifting gears to compression and processing, margins obviously were very strong in Q2. Would that have been aided by anything unique to the quarter, or was that more of a function of mix given the lower fabrication activity?
Daniel Halleck
Certainly, NICS was important. Obviously, fabrication sales dropped off considerably year over year. That also happens to be your lowest margin part of the business. You know, the highest margin part of the business is rentals. And, you know, you can see our quarterly utilization and horsepower in the fleet. So, you know, that contributed, you know, cost management. All of our divisions, you know, we're quite pleased with how management employees buttoned down and really managed their costs. And then, obviously, an element in all divisions is queues within Canada.
Dane Billick
Mm-hmm. Mm-hmm. I understand. Understood. I guess maybe the last one for me, acquisitions is something we've been talking about for a bit now. You know, you've highlighted that as a good opportunity. in this environment, can you maybe just discuss what would be an ideal target for you in this environment, whether that's something where you're looking for material synergies or perhaps taking out a bloated platform where you could really add value by cutting costs? What would make an ideal target right now?
Daniel Halleck
So first of all, we have to benchmark any external acquisition with a pretty compelling opportunity we see, which is the repurchase of our shares. That said, everything else being equal, we're partial to growth over contraction, but we benchmark any external acquisition against reducing our share count. With that in mind, we are definitely focused on continuing our strategy of gaining critical mass in all our key markets. in our four business lines. You know, target acquisitions would be entities where we see the significant opportunity to extract cost, savings, and synergies. And obviously asset quality is of critical importance. We're not just going to buy something to add iron. So really what will drive us is, you know, assuming quality assets, our ability to, in our minds, to take that entity and extract some significant synergies. And I think there's a lot of that out there. You know, the key is doing it at a price that, you know, allows us to get a return on capital over the life of the investment. So I think the market conditions are increasingly becoming favorable to that, but ultimately it's going to be the providers of capital, whether equity or debt, that are going to push those...
Operator
opportunities along so stay tuned i guess fair enough fair enough well i appreciate the color that's all for me congrats on the good quarter i'll turn it back thank you once again if you have a question please press star then one to join the question queue please press star then one Our next question comes from Oren McCluskey of Lincolnshire Management. Please go ahead.
Oren McCluskey
Hi, Dan. How are you? I'm well, Oren.
Daniel Halleck
You hear me? Yes. We must be near bottom if you're calling.
Oren McCluskey
I hope so. That led me to my question. You mentioned... You mentioned share repurchases as a compelling investment opportunity. Have you begun a share repurchase program or what's your thinking on that is my first question. The second question is any further color on your compression backlog going forward?
Daniel Halleck
So on the first question, we do currently have a normal course issue or bid in place. We suspended purchases in late Q1 with kind of the whole pandemic thing and wanting to, you know, get a better understanding of what that meant for our cash flows. You know, the one thing we're sensitive, we did receive some paycheck protection payment money in the U.S. We have not recorded that as income and won't until it's forgiven. And so we're pretty sensitive to, you know, we want to make sure that we get through all of this and don't do things that compromise our ability to take advantage of programs to help get us through this. But that said, you know, we're pretty interested in reducing our share count right now. You know, I think one indication is we continue to sell old equipment. During the quarter, we sold or retired literally for scrap metal, some old equipment. Some of it was through private sale, others through auction. And we're consistently getting significant premiums to net book value from Ritchie Brothers and other disposal sites, whereas we're trading at, what, 20 cents on the dollar in the public equity market. So there's, in our minds, a pretty significant disconnect between valuation and what cash buyers are willing to pay. So, the second question on, sorry, that was on the backlog. So, I guess encouragingly, Oren, we saw stabilization. You know, it was a, as everyone knows, I don't need to belabor this, but it was a really, really tough, strange, weird quarter. You know, communication itself was pretty limited with people quarantining and offices closed. And so I got to say I'm pretty happy with our group to basically have preserved their backlog. And, you know, we'll see where it goes. You know, we're encouraged with North American natural gas prices. I think we're seeing some strength in Europe. which bodes well for gas prices. You know, the Asian economies continue to grind out of the downturn, and so, you know, we'll see. But, you know, we've been waiting for gas prices for a decade, so... You know, we're not going to get too extreme. I think really, Oren, what's going to help us in all of our business lines is contraction of supply. You know, we are seeing a dramatic decrease in competitors in North America, in all business lines, and that's going to catch up with the industry as activity levels recover.
Oren McCluskey
Thanks, Dan. Good luck.
Daniel Halleck
Thank you.
Operator
Our next question comes from Tim Monticello of ATB Capital Markets. Please go ahead.
Tim Monticello
Hey, good morning, everyone. Good morning, Tim. My first question is just on compression, the CPS revenue in the quarter. It seems like the composition of the backlog slowed a little bit in the second quarter. Was that due to just timing on original project builds and deliveries, or was there any delays and what customers were looking for delivery schedules?
Daniel Halleck
No, I think it was a pretty normal quarter. I don't know, Yulia, anything from your... There was nothing unusual.
Julia Gorbache
It's just a normal course in execution replaced by a couple of new orders.
Daniel Halleck
A little... Obviously, we've reduced our throughput capacity largely on the manpower side. You know, you don't want to be... You can't pay people to sit around, and so you throttle back on your throughput, but... you know, other than that, a pretty normal quarter.
Tim Monticello
Okay. Do you think that's the run rate or the throughput level in the second quarter is reflective of what you should see for the back half of the year?
Daniel Halleck
You know, as we increase orders and increase the backlog, we can throttle up or throttle down, you know, in my mind, pretty amazingly quickly. You know, it's a tough thing somewhat. You're dealing with human beings that you want to, treat with respect and fairly, but you're also dealing with a business that's low margin and you've got to keep your costs under control. But like I said, I'm quite pleased with how that segment managed their workforce and kept core capacity intact and was able to adjust to a pretty... you know, pretty significant decline in activity, although this has been ongoing now for several quarters. But they've been very methodical and proactive in adjusting throughput. And, you know, again, depending on your forecast, you know, we can adjust up as quickly as we can adjust down. Okay, great.
Tim Monticello
Second question, just around those asset visuals that you were talking about. Was that primarily... in the rental division when those asset disposals were taking place. Do you have a slate of equipment that you expect to be able to sell back out the year?
Daniel Halleck
You know, it was right across all segments. You know, in our rental business, we get calls from time to time from groups completely outside of our industry for for older equipment, and most of it was old stuff that was underutilized, and like I said, we've been booking consistent gains on that, which gives us pretty good comfort on our good stuff. You know, on the rig side, we did decommission seven rigs during the quarter, and literally salvaged some major components, but cut those rigs up for trapped steel. And the proceeds we got exceeded book value before our change in estimate on depreciation. Really, our change in estimate didn't affect those rigs. Those were rigs that we, you know, had allocated purchase price three years ago. at the Savannah acquisition that reflected the fact that we didn't put a lot of value on them. So our change in estimates did not impact and, and, you know, on our change in estimates within our drilling rig business, really what precipitated us to review that was the fact that the first time that we've ever seen in 24 years, you know, we've had good rigs sitting for extended periods of time. And, um, you know, our view is that there's going to be depreciation with that. You know, we've also put rigs out of stat for several years back to work with minimal startup costs and minimal physical issues. And so we've got a significant amount of comfort in the quality of our asset base. But we also recognize that particularly given our strategy of not working rigs at uneconomic prices, that's how these rigs are going to fit for a bit. And So our new estimates are very much in line with the industry. It's a straight line. That's the major change. And what it does will increase our depreciation expenses in slower periods. You know, in busier periods, you know, it may decrease it. But the fact is, is we wanted to get to zero quicker, given the fact that, you know, we're facing industry conditions that see rigs fit for many years. But physically, you know, there's no change to our view of our asset base. And, you know, we're going to continue to make decisions to rationalize, dispose, and repair and upgrade that makes sense on a go-forward basis.
Tim Monticello
Okay. Do you think, you know, the majority of the rigs that you would scrap, or maybe all of them that you're considering scrapping, happened in the second quarter? Do you expect more of that to continue?
Daniel Halleck
You know, we took a good hard look. So seven mechanical doubles in the U.S. and two singles in Canada. And again, that's a constant process. But, you know, we've got pretty much the real old stuff. We did around last year some of the old triples in the U.S. and a few others. So, you know, it's not going to be a big issue going forward. We feel pretty good about our fleet. And in terms of depreciation estimates, again, you know, last year we focused on our rental business, this year on our rigs, and I don't see at this point any major areas of that need review going forward.
Tim Monticello
Okay. And then I just wanted to dig into the comment that you had around M&A and, you know, potentially focusing on getting to critical mass. in, you know, your core businesses. On a geographical basis, has your view changed on which markets you find the most attractive? You know, there's a lot of talk about, you know, the U.S. market never getting back to, or at least, you know, not in the near term getting back to a level that we saw in 2019 in terms of rig activity. So how do you view the markets, I guess, on a ranked basis between Canada, the U.S., and Australia in terms of M&A?
Daniel Halleck
Well, you know, every market's different. I think the U.S. is obviously by far the largest market. And, you know, I think the same analysts say we'll never get back to 2019. We're also in probably 2017 saying we're going much, much higher. So I think, you know, depending on where you're at in the cycle, you're going to get different views. Our view is we've got a long, long way to go in the U.S. to achieve critical mass. So that's an obvious area of interest for us. But we don't do things just to grow. And so we've turned down many opportunities to grow where the math didn't work for us, including some pretty prominent drilling rig consolidations that have happened the last couple of years here. That said, we're seeing a lot of potential deal opportunity there. But we're also open to organic. But again, it comes down to math, and where do we see the best returns for an incremental dollar of investment? And so there's a lot of change underway in the U.S. You know, we're seeing a much, much higher rate of insolvencies and bankruptcies, both on the E&P and the service side, and that's going to change the industry a lot. And we feel quite comfortable with how we're going to end up coming through this. And so... We're seeing a lot of deals fall, and, you know, we're going to remain disciplined and make sure that any deal that we do do, you know, works for our shareholders. And, you know, we look at the Savannah acquisition that we completed three years ago. Certainly, we wouldn't have expected the mediocre conditions that we've seen over the last three years. But, again, you know, talked a bit about our cash flow and ability to pay down debt. And, you know, when we modeled that, we modeled to say, what if it continued to be tough? And, you know, I'm pretty happy we did that because it has been tough, but we've also made, in my mind, quite impressive steps to pay off the debt that we assumed, not work our asset base, super hard at ridiculously low prices and we're going to come out of this with a good quality asset base that's ready to go to work with minimal capital requirements. And so that's how we're going to view any acquisition. You know, Australia is a pretty small market. We're a well regarded participant in that market. The reality is it's a very high cost jurisdiction to do business and I know Savannah historically learned a lot when they entered that and thankfully it was before we owned it. And, you know, we're trying to learn from their experiences and we have learned as have they. And so, you know, you've got kind of 35 to 45 rigs drilling in all onshore Australia at this, you know, peak time. You know, that's the market that's, you know, it's not the same as the U.S. Canada right now. The reality is we see that as the most difficult market, largely just given the political environment here and the inability to get infrastructure built. And so, you know, what it does mean is our risk-adjusted perspective requires, you know, a heck of a deal. You know, our risk perspective is highest in Canada. Now, that can change with one election.
Tim Monticello
Yeah, absolutely. U.S.
Daniel Halleck
dynamics might change as well with the election. Exactly. You always want to do the what if.
Tim Monticello
Right. That's a really helpful color. I appreciate that. I guess one more question for me, and that's just around the federal government's abandonment aid package. I'm wondering if you've seen any contract awards from that as yet, and if you have any idea of what that could look like in terms of, I guess, well-servicing activity and rental activity for the back half of the year?
Daniel Halleck
So we're very active in all three provinces. What we've seen is the deployment of funds not flow as quickly as one would have hoped. I expect that will accelerate here over the next couple of months. But for whatever reasons, there's been a slow deployment of funds coming out of those programs. So the reality is in Q2, out of that federal $1.7 billion or whatever, there was no activity for us. Going forward, we expect that to change. But again, I can't control government departments, so I'm not going to give any forecast. But our sense is it's going to be reasonably soon here.
Tim Monticello
Okay, so you don't have anything concrete in hand.
Daniel Halleck
Q2 had no benefit for our businesses.
Tim Monticello
Right. And just to clarify, this far into Q3, there hasn't been any... I don't comment on... I'm not going to comment on that.
Daniel Halleck
I think we're very active in that mix, and I'm not going to comment on specifics.
Tim Monticello
Okay, fair enough. I appreciate all the details you provided.
Daniel Halleck
I expect Q3 will be better than Q2. for proceeds from those programs. I'll give you that forecast, Tim.
Tim Monticello
Hey, directional guidance is better than no guidance.
Daniel Halleck
Thanks. Yeah, you're welcome.
Operator
Once again, if you have a question, please press star, then 1. This concludes the question and answer session. I would like to turn the conference back over to Mr. Halleck for any closing remarks.
Daniel Halleck
Thank you for joining us this morning on our conference call, and we hope everyone has a safe and happy summer, and we look forward to speaking with you after our third quarter results. Have a good day.
Operator
This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.
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