Enservco Corporation
Q3 2015 Earnings Call Transcript

Published: 13 Nov 2015

[Operator:]

Welcome to Enservco Corporation Third Quarter 2015 Earnings Conference Call. [Operator Instructions]. I would now turn the conference over to Mr. Jay Pfeiffer, from Pfeiffer High Investor Relations. Thank you. You may begin.

[Jay Pfeiffer:]

Thank you, Jessie. Hello and welcome to Enservco's 2015 third quarter earnings call. Presenting on behalf of the Company today is Chairman and CEO, Rick Kasch; CFO, Bob Devers and SVP of Field Operations, Austin Peitz. Matters discussed during this call may include forward-looking statements that are based on management's estimates, projections and assumptions as of today's date and are subject to risks and uncertainties disclosed in the Company's most recent 10-K filing as well as other filings with the SEC. The Company's business is subject to certain risks that could cause actual results to differ materially from those anticipated in its forward-looking statements. Enservco assumes no obligation to update forward-looking statements that become untrue because of subsequent events. As always management's ability to respond to questions during this call is limited by SEC Reg FD, which prohibits selective disclosure of material non-public information. A webcast replay of today's call will be available at enservco.com after the call. In addition, a telephone replay will be available beginning approximately two hours after the call. Instructions for accessing the webcast or phone replay are available in today's news release. With that, I'll turn the call over to Rick Kasch. Rick, please go ahead.

[Rick Kasch:]

Thanks, Jay. Thank you all for joining us. First of all I want to apologize I didn’t have the time for my voice and coughing or sneezing you might hear. My 21 year old granddaughter decided to share her cold with me. So I will start with my usual reminder that the third quarter of course is an off season quarter for us and it's historically our slowest quarter of the year. That said we’re pleased to announce Q3 results this year were actually a pretty significant indication of how well we are doing in challenging industry conditions. Specifically on a year-over-year basis our profit metrics improved significantly and our core well enhancement service revenue was flat, these achievements are particularly notable given that were accomplished during the time when our sector is experiencing extreme pricing pressure and E&Ps are drilling and completing fewer wells and postponing maintenance services on existing wells. I feel our results are [indiscernible] saving point compared to other service companies who are experiencing significant double digit revenue and profitability declines. I also believe these results are a confirmation of the effectiveness of our business model which is based on keeping a balance between drill dependent services and recovering maintenance services. Overall revenue during the declined just 8% with most of that declined due to a reduction in water hauling activity resulting from our strategic decision to discontinue servicing customers says whose rates has little or no profit margin. On our core well enhancement services we offset approximately 5% impact from price discounts by deploying equipment to higher margin and higher utilization areas such as our new Eagle Ford market. We are also putting a heavy on emphasis on managing our cost structure in Q3. With our field level and management teams monitoring cost on a daily basis and holding off and hiring operators until we’re here they will be utilized on a consistent basis. These three strategies reducing or eliminating lower no margin services, redeploying assets and managing our cost resulted in significant improvements in key profit metrics. Specifically our gross profit improved by 92%, EBITDA improved by 41% and net income improved by 11%. And by the way our improved net income was achieved inspite of 68% increase in depreciated expense related to the doubling of our fleet in size. And for those of you that focused on earnings per share rather than EBITDA the year-over-year increase in depreciation and app litigation cost had a negative impact of $0.01 on the earnings per share for the third quarter and $0.04 impact for the year-to-date nine months. So again relative to other companies in our space I believe we’re performing pretty well on both the top and bottom lines and although it's just one quarter and we’re still unsure what the future holds in terms of a rebound in commodity prices and corresponding activity from E&P companies, we think our Q3 results are positive testament the effort our people have been putting in combined with our solid reputation in customer relations. Customer loyalty comes in handy at times like this. As E&P has looked to shrink their vendor list and try to determine whom to contract for services, they look at who has served them well historically with modern equipment and a reliable [indiscernible] timely manner. Enservco has a very young fleet in what I believe is pound for pound the most talented [indiscernible] group of operators in the field. Operators are good at their job, committed to safety, show up on time and take pride in every opportunity. This is the plus in any market environment and it's especially important when the volume of well-enhanced work declines and customers are seeking price concessions. Complimentary in our solid customer retention rates, is a progress we’re making in the area of new business development which as you know is even harder to achieve in a down market. Austin will get into this in some detail in just a moment but I will tell you that in the third quarter we won new business and gained market share in certain areas again particularly in our expansion area in the Texas Eagle Ford basin. With our two quarters behind us we welcome the return of cold weather in the fourth quarter and first quarters, traditionally our strongest quarters for revenue and profitability. As always we’re subject to the winter mother nature and in addition for this season to the ongoing impact of the industry slowdown in the form of slowing the frac activity and continued pricing pressures. At this time we really don’t know to what extent we will be impacted. We do feel that the fourth quarter will be very challenging and the first quarter could also be challenging but early indications lead us to believe that the first quarter should be much improved over the fourth quarter and could be very strong. We will however continue with our strategy of deploying equipment to higher margin higher utilization markets. We are also pursuing additional geographic expansion opportunities although for competitive reasons we're not ready to disclose specifics today. And as you know we have doubled our revenue capacity and are working very hard to keep our crews busy and maximized utilization. When commodity prices do recover we integrate to this and respond very quickly and further increase utilization. I will close my initial remarks with a reminder that in addition to our profitability achievements Enservco is in very good shape from a financial standpoint. We have generated almost 13 million in cash year-to-date which is up 14% over a year ago. Our balance sheet remains very solid, we use closed to 10 million of the cash flow to pay down our senior credit facility to 19 million well the remainder funded [ph] last 3 million of our prior CapEx program. We still maintain high liquidity with a debt to equity ratio of approximately 1 to 1 compared to 1.6 to 1 just nine months ago. In addition our working capital has increased by 34% year-over-year resulting in a ratio of 2.6 to 1 at the end of Q3 compared to 1.8 to 1 at the same time last year. By the way our relationship with PNC couldn’t be better. We have sufficient availability under our $40 million facility, PNC is very supportive of Enservco and our business strategy. With that I will turn it over to Austin.

[Austin Peitz:]

Thanks, Rick. Our expansion into the Eagle Ford basin in Texas continues, we now have 14 [indiscernible] units there compared to nine reported on our the last conference call. Our yard is fully operational, we’re hiring and training local personnel to service what we think is going to be a consistent global market from Enservco. Last quarter we told you we were at a breakeven in Texas. Today I can tell you our Texas operations contributed nicely to overall gross profit for the third quarter. As Rick indicated earlier in spite of the tough market there in the field we’re evaluating additional expansion areas where our customer relationships and other basins are presenting some interesting opportunities to expand our footprint and I hope to discuss what we have done along this line in our next earnings call. I don't want to overstate our success because we're definitely in a tough environment but the aspects of geographic expansion, signing new MSAs and achieving market share gains in this environment are just not that common among our peer group and that underscores some of Enservco strengths that Rick has mentioned in the terms of the customer loyalty at industry reputation. Let me give you a feel for what's going on from our perspective. To say competition is fierce is probably understating the situation. There is less work to go around and many smaller players are scrambling to stay alive. Pricing pressures will continue to be an issue. We are seeing service companies are offering pricing that is not sustainable and argue they're doing it simply to generate enough cash to keep their people pay and keep their equipment running even though their prices they're operating in some cases will not even cover variable cost. The problem with this philosophy is cutting cost to that degree often leads to cutting corners a slippery slope with respect to safety and compliance with the standards of E&Ps for their vendors. That’s something we’re not willing to do, our goal is to operate at a profit and in the selective instances that are no worse than a break even in core services. The good news is long term we like where we stand versus the competition and believe that with the financial strength the first service made and customer relationships we will continue to be winners. In summary I will just reiterate what Rick said before, things are tough, but we are faring better than most of our competition and we foresee a strong rebound for us when energy prices head back up because of our expanded fleet, our expanding geographic footprint, an expanded customer list. With that I'll turn it back over to Bob for a recap of financial results.

[Bob Devers:]

Thanks, Austin. Hello everyone. As heard total revenue in the third quarter declined by just 8% to 5.3 million from 5.7 million in the same quarter last year, that represents a decline of about 440,000 of what's nearly all was attributable to a client in lower or zero margin water hauling services. As Rick mentioned the more important revenue metric for us is our core well enhancement services business, which was essentially flat year over year due to the fantastic job by Austin and our field crews did in their efforts to build market share and develop new customers in markets in the face of industry downturn. Technically well enhancement revenue declined about 1% or 51,000 which compares favorably to the significant year-over-year declines reported by other oil fields service companies, many in the range of 33% to 55%. Price concessions during the quarter were approximately 5% of revenue again well below what we’re seeing and reported by our peers. [Indiscernible] was typically dominated our revenue mix in the third quarter increased 2% to 2.6 million from a strength of our geographic expansion initiatives. Asset value [ph] revenues continue to lag down 10% year over year as operators continue to delay proposed maintenance programs. Gross profit in the quarter improved 523,000 to a loss of 47,000 as compared to a loss of 570,000 a year ago. As we've discussed previously we typically have a loss in the third quarter due to the seasonal decline in revenue and a higher portion of fixed cost components and our cost to revenue. Our improvement during the quarter was primarily due to ongoing cost reduction efforts focused mainly on managing labor, equipment repairs and maintenance and supplies cost. We also benefited from a lower diesel fuel cost, these savings were partially offset by the impact of price concessions. Total operating expenses in the third quarter increased 15% or 329,000 to 2.5 million from 2.2 million in the same quarter last year due to a 604,000 increase in depreciation and amortization expense attributable to our fleet expansion. This increase was partially offset by a 266,000 decrease in general and administrative expenses and a slight decrease in patent and litigation costs. Litigation cost should remain low in the near future as a judge in our case has granted a stay order and even an appeal of judge's ruling in a North Dakota case and a response by the U.S. Patent Office on appeal of the U.S. patent office's decision that the underlying primary patent was invalid. Despite lower revenue and higher operating expenses our operating loss improved to 2.5 million from 2.7 million a year ago due to the aforementioned improvement in gross profit. Adjusted EBITDA in Q3 improved 588,000 or 41% to a loss of 831,000 as compared to a loss of 1.4 million a year ago. Our net loss for the quarter also improved by 11% to 1.6 million or $0.04 per share for net loss of 1.8 million or $0.05 per share a year ago. Again I think it bears repeating this improvement was achieved in spite of the 68% increase in depreciation expense. We closed the quarter with working capital of 4.7 million at current ratio of 2.6 to 1 and a long term debt to equity ratio of 1 to 1 as compared to 1.6 to 1 at year-end 2014. Stockholders' equity totaled 18.6 million and our total liabilities to stockholder equity came at 1.5 to 1 an improvement over 2.2 to 1 at 2014 year-end. At September 30, we had approximately 12.7 million available on our underlying credit. Turning to our nine months results, year-to-date total revenue decreased 31% to 30.2 million from 38.3 million in the same period last year. The majority of that decline 81% or approximately 6.6 million was due to lower full paying revenue year-over-year due to the decline of propane prices and lower volume sold in the first quarter. Lower volume sold resulted from customers taking advantage of our biofuel system or providing their own fuel source. Gross profit dollars declined as little over 1 million to 8 million from 9 last year, unexpected down time caused by warm weather in the DJ Basin during the first quarter. Lower gross profit from propane sales and year-to-date price concessions all contributed to this decline. Management cost reduction efforts and lower fuel prices helped mitigate some of those declines. Our gross margins for the nine months period increased slightly to 26% from 24% due primarily to the mathematical impact of lower propane revenue and cost during the first quarter. Total operating expenses in the first nine months of 2015 increased 36% to 7.9 million from 5.8 million a year ago. This increase is almost entirely attributable to a $2 million increase in depreciation and amortization expense and $313,000 in patent litigation expense. General, administrative expense decreased 6% year-over-year due in part to our cost reduction efforts. Operating income through nine months declined $206,000 from 3.2 million last year with almost 2/3rds of that decline attributable to the higher depreciation expense and litigation expense and the remaining 1/3rd is attributable to the decline in gross profit. Adjusted EBITDA year-to-date was 5.3 million down from 6.2 million a year ago due to the $1 million decline in gross profit. Net loss through the nine months was 370,000 or $0.01 per diluted share versus net income of 1.5 million or $0.04 per diluted share last year. The company generated 12.9 million in net cash through operations through the first nine months of 2015, up 11.3 million in the same period last year and we use 9.7 million of cash during the period to pay down our facility. A significant portion of the cash flow from operations during the first nine months was attributable to the monetization of accounts receivable from last season. I'm proud to say that our current receivable is in good shape and that our write-off to-date have been relatively minor. We will continue to monitor receivables closely as we anticipate the customers will push to extend turns to manage cash. As previously reported our fleet expansion was completed earlier this year including units from our Toyota acquisition, our current fleet numbers are 81 frac water heating units up from 44 last season, 58 hot oil units up from 27 last year and seven acidizing units up from three a year ago. The average age of our well enhancement equipment is about three years so again we will have plenty of capacity to grow as oil prices rebound. In terms of CapEx we continue to hold off on new fabrication decisions in the turn of industry environment. At this point, our 2015 CapEx will be limited to maintenance spending which we still expect to be in the range of $1.5 million to $2 million. With that, I'll turn it back over to Rick for some closing remarks.

[Rick Kasch:]

Thanks, Bob. As Austin and Bob laid out the relevant phases and Enservco is performing extremely well. The well [indiscernible] continues to be the time table for recovery in quality prices and a corresponding increase in drilling completions and maintenance activities. Even [indiscernible] will be able to bring on timing which [indiscernible] recently predicting a prolonged recovery into 2017 and Haliburton talking about the current fourth quarter of Q1 2016 pass in the bottom. In the near-term we anticipate continued headwinds in terms of price pressure and competition for available work. We believe however that we’re better equipped and ready to weather this storm and focusing on doing everything we can maintain and build market share, expand our operations and maintain a strong balance sheet so that when the prices do recover we can react very quickly and take advantage of what we believe what we have abundance of opportunity that should result in significant positive impacts resulting from our increased revenue capacity and customer list. With that I will turn the call over to the moderator for questions. Moderator?

[Operator:]

[Operator Instructions]. Our first question is from Jeff Grampp of Northland Capital Markets. Please go ahead.

[Jeff Grampp:]

Guess maybe, Rick I want to start with kind of what you guys are seeing for this upcoming heating season obviously a really important time for you guys, just maybe what you guys have been staying with the frac water heating business so far I understand we’re still early here in the heating season. But just trying to get a sense for where you see things maybe directionally should we be expecting some growth on a year-over-year basis on the revenue or EBITDA line or just some color on that topic I guess would be helpful.

[Rick Kasch:]

All right, as far as the upcoming season if you could take the season as a whole we’re fairly optimistic it's going to be a good season for us. Now that give I think like we said the fourth quarter looks like it could be challenging, the first quarter it looks it could be a very good quarter. As far you know trying to relate to record revenues or 50%, the visibility just really isn't there in particularly we ran into you’ve seen in I'm sure in lot of calls, some E&Ps are talking about extend holiday seasons, others are saying that are going to just do one day and we also run into that aspects where one day we get a call and the guy says two frac crews and wants us to do the work and the next day we’re going to call and says we’re cutting back by one frac. So it's simply -- the visibility is just not that quite for us but the overall indication we feel is going to be a strong season.

[Jeff Grampp:]

And then maybe on these expansion initiatives that you guys are kind of looking at, I understand for competitive reasons don't want to get into too much detail but can you just kind of give us a sense of the recurring service on oil side or more drill bit dependent or maybe both opportunities, kind of what are your expectations on that?

[Austin Peitz:]

Yes, you bet Jeff. So the additional expansion opportunity for us is an area that we believe we can take all of our current service lines and get great utilization out of them. So it's not anything that’s driven by just frac water heating or hot oiling, even acidizing potentially a big marketplace for us. So we’re excited, it's kind of our three core service lines that we will be able to service to the area with the only one not taking along is the water hauling business. So it's going to be basically an all three service line via additional geographic expansion.

[Jeff Grampp:]

And then last one for me just on the M&A front Rick, any kind of traction there, are bid ask tightening up and are you seeing maybe a little bit more traction I know you kind of highlighted different types of M&A whether it be complimentary services or a new basin or any of those may be looking a little bit more likely than others?

[Rick Kasch:]

I guess a summary for our M&A activity is right now is that we’re seeing a lot, there are more deal. We’re seeing bid ask narrowing and we are looking at some very serious but I can't provide any comment on it right now, hopefully be able to in a short period. We’re very optimistic and it will be along the lines of complementary services. We will be doing the acquisition what really won't be a geographical expansion.

[Operator:]

The next question is from William Bremer of Maxim Group. Please go ahead.

[Unidentified Analyst:]

This is Travis [ph] speaking on behalf of Bill. First question, the capacity utilization, what could you do in revenue at full capacity would you say?

[Rick Kasch:]

In some of the runs that we have done we could actually be close to 100 million max capacity.

[Unidentified Analyst:]

And that’s across all three right?

[Rick Kasch:]

Yes.

[Unidentified Analyst:]

And new expanded fleet right now, what percentage would you say is being utilized on a regular basis?

[Rick Kasch:]

Well keep in mind that the expanded fleets had a lot of frac water heating, so that’s a seasonal business you know to say on a consistent basis I can't give you a utilization on that. The same thing on hot oiling, is hot oiling actually does have some seasonality to it. So to give you a utilization of the last six months, on both of those are going to be a lot lower than what it is going to be coming out to the season. So unfortunately I can't really give you a utilization number.

[Unidentified Analyst:]

My next question deals with pricing, can you elaborate a little bit more on the price concession and strategy going forward to weather the storm?

[Rick Kasch:]

Our pricing strategy has been primarily what we have talked about before where we’re going to provide discounts in markets where we need to remain competitive, as Austin mentioned in his comments we’re not going to get to the point of some of these companies that are just selling ridiculous rate out there to I think maintain their existence even though they are probably incurring variable cost. So we don’t have -- well we’re going to give a 10% discount for the season or anything like that, often deals on an individual basis because the services are a little bit different for each customer what they are requiring and what they need but as we said so far even in the last quarter we are hot oiling -- major component, we had pricing, that’s where we had impact on good price concessions and was still only 5% of our revenues. So we feel that compared to a lot of others we’re doing very well. I don’t see this looking at 30% price concessions and stuff like that but again for competitive reasons I'm not going to give specific price discount.

[Unidentified Analyst:]

And my final question, if oil and gas prices remain at the levels for say throughout 2016, is there a next step that you guys have in your back pocket to weather the storm?

[Rick Kasch:]

Well I think it's basically keep doing what we have been doing. You know we had leverage on our balance sheet, we continue to operate at profitable margins and maintain our customer relations and one thing, hopefully we alluded to is to add service line or two that we can like bundle services and be more attractive is vendors for E&P.

[Operator:]

The next question is from Rudy Hokanson of Barrington Research. Please go ahead.

[Rudy Hokanson:]

Couple of questions, do I understand it correctly that 14 of our 58 hot oil trucks are in the Eagle Ford right now?

[Rick Kasch:]

Yes, sir.

[Rudy Hokanson:]

And so with the hot oil trucks, with that kind of diversification right now, with 14 being concerted in Eagle Ford you see yourself adding more there right now or another way of asking it may be are the other 44 trucks fairly well in use?

[Austin Peitz:]

You bet. We’re working out some opportunities that would add additional units there. However that we’re taking that into consideration coupled with additional geographic expansion markets that we're targeting right now. We're going to sit down and by the way what the probability of each market is going to be and we’re going to playing a tough situation as I keep telling Rick by about the middle of heating season where we have the potential to run really great utilization in the hot oil division throughout the whole season so that's kind of the best I can do it. I mean there is a lot of variables in there.

[Rick Kasch:]

We hope they have the best problem being not in equipment.

[Rudy Hokanson:]

And then on the water hauling at the end of the second quarter you had said you expected revenue to run in about 1.5 million at the reduced rate but this quarter you came in at 1.9. Does that mean that you brought some equipment back on because some customers were willing to pay more?

[Rick Kasch:]

Actually what we've done is we exited out of the market we had a presence in DJ Basin hauling water and we deployed some of those assets to Dilco which allowed them to capture additional revenues.

[Rudy Hokanson:]

Okay, so 1.9 be a run rate right now that you would see?

[Rick Kasch:]

I think it's going to be relatively close, probably be relatively consistent you know there are some pretty good pricing concessions in that market right now as well so the 1.9 potentially could be on the high side.

[Bob Devers:]

We had a little bit of special work in the third quarter for some water hauling that we did for a specific customer.

[Rick Kasch:]

1.5 is probably the best run rate for you to use.

[Rudy Hokanson:]

Okay. And then on the pricing issue again, I mean in the second quarter the concessions you were doing with four to five and we're talking about a year over year so does that basically mean you haven't been reducing pricing any more than you had in the second quarter, that the third quarter didn't see you giving up any more pricing? It's merely a matter of saying those reductions that you had in the second quarter continued into the third quarter?

[Rick Kasch:]

What we had really was for the second quarter our discounting was about 4% and into the third quarter it increased upto that 5% that we talked about. So not a major increase but there was an increase.

[Rudy Hokanson:]

I was going to say that but the way to think about it is that it wasn't that was incremental 5% on top of the second quarter it's again against the year ago.

[Rick Kasch:]

Correct.

[Rudy Hokanson:]

So sequentially it's only 1% relative to your total revenue that we're talking about.

[Rick Kasch:]

Correct.

[Rudy Hokanson:]

And then did you wanted to say more, Rick? I'm sorry.

[Rick Kasch:]

No.

[Operator:]

The next question is from Bhakti Pavani of Euro Pacific Capital. Please go ahead.

[Bhakti Pavani:]

With regards to your comments in the press release with regards to the acidizing business, you did mention that you see the business eventually being commissioned just kind of curious to know you know how that business has changed for you guys and is there going to be any implication on the new units, acidizing units that you have bought on board?

[Rick Kasch:]

I think basically what we're seeing the utilization right now at those units is as high as we have anticipated because of the situation and we ordered those trucks of course last year and so with the decline in activity and as I mentioned one of the significant impacts of instance is the change of ownership that’s going in a lot of the acreage out there and what happens is when the new owner comes in and takes time for them to determine just what kind of maintenance [indiscernible] continue with etcetera, so that’s something what we’re experiencing but we did feel we should be taking that out.

[Austin Peitz:]

I’ve few things to add to that, this is Austin. With our opportunity with the geographic expansion it's a market that that service line it could potentially perform very well with this -- that's one another things we’re excited about in that new market.

[Bhakti Pavani:]

So from what I understand is you guys are planning to redeploy those acidizing units into the new market? Is that correct?

[Rick Kasch:]

Yes.

[Bhakti Pavani:]

So what are the current markets that you guys experience that issue which I mean -- was it an Eagle Ford or which basins you had this issue?

[Rick Kasch:]

Issue of lower utilization?

[Bhakti Pavani:]

Yes.

[Austin Peitz:]

It was in our Western Kansas, Southwest Kansas markets and then Wyoming we had anticipated a lot bigger workload in the acidizing division due to some changes that the E&Ps that could scaled way back. So it's kind of a combination of those two markets where the impact was felt.

[Bhakti Pavani:]

Okay, also you did mention in your press release that you guys are working or partnering with chemical suppliers to jointly develop and market new programs. Could you maybe provide some further insight into what kind of programs are there and how meaningful they could be for you guys in the long term?

[Austin Peitz:]

One of the things we're doing is we’re kind of pushing back on some of our vendors for help through this time in industry so that's one of the things Rick's alluding to is you know pushing back on some pricing and trying to get some benefits there from our vendors on the chemical aspects. Now some of the things we've done in the past as we've brought in some of our vendors to have a lot of specialty knowledge in stimulation products which they put on a few presentations and had interaction with our customers trying to see cost effective ways to regain production numbers and events like that is the things we're partnering with, or chemical companies with and our customers at the same time.

[Bhakti Pavani:]

Okay. And you did mention you know with regards to M&A opportunities you are looking for complimentary, so with business -- would you maybe elaborate more on what kind of services you guys would be interested in getting into?

[Rick Kasch:]

Well I think in the prior calls we have talked about myriad services that we’re looking at and like I said I just can't really comment on specific services at this point in time.

[Operator:]

[Operator Instructions]. The next question is from Tom Dillon of William Blair. Please go ahead.

[Tom Dillon:]

So it sounds like you're surprised some of hung on as long as they have specially at these very low pricing rates. So any guess or indication when the outlook for some of these companies might become a little more grim?

[Rick Kasch:]

Well I think we’re going to see a lot of that happen this season. It will be a build start out, I think having some cash flow and they are going to start realizing they are losing money and how long can they sustain. I don’t know how much they have got in the bank. I think there will be a lot of stuff happening at the end of this fourth quarter and probably significantly into the first quarter.

[Operator:]

Thank you. We have no further questions in queue at this time. I would like to turn the conference back over to management for any additional comments.

[Rick Kasch:]

Again I want to thank you all for joining us today. Should you’ve any further questions or whatever as always feel free any of us a call and we thank you for your support and interest in Enservco. Have a good day

[Operator:]

Thank you. Ladies and gentlemen this does conclude today's teleconference. You may disconnect your lines at this time and thank you for your participation.