Good morning, ladies and gentlemen, and welcome to the Forum Energy Technologies Earnings Release Conference Call for the Second Quarter 2016. My name is Neesy, and I will be your coordinator for today's call. At this time, all participants are in a listen-only mode, and all lines have been placed on mute to prevent any background noise. We will be facilitating a question-and-answer session after the speaker's remarks. As a reminder, this conference call is being recorded for replay purposes. After the speaker's remarks today, I will instruct you on the procedures for asking questions. I will turn the conference over to Mr. Mark Traylor, Vice President of Investor Relations. Please proceed, sir.

Thank you, Neesy. Good morning, and welcome to Forum Energy Technologies second quarter 2016 earnings conference call. With us today to present formal remarks are Cris Gaut, Forum's Chairman and Chief Executive Officer; as well as Prady Iyyanki, President and Chief Operating Officer; and Jim Harris, our Chief Financial Officer. We issued our earnings release last night, and it is available on our website. The statements made during this conference call including the answers to your questions may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act. Forward-looking statements involve risk and uncertainties that may cause actual results or events to differ materially from those expressed or implied in such statements. Those risks include, among other things, matters that we have described in our earnings release and in our filings with the Securities and Exchange Commission. We do not undertake any ongoing obligation other than that imposed by law to publically update or revise any forward-looking statements to reflect future events, information or circumstances that arrive after this call. In addition, this conference call contains time-sensitive information that reflects management's best judgment only as of the date of the live call. Management's statements may include non-GAAP financial measures. For a reconciliation of these measures, please refer to our earnings release. This call is being recorded. A replay of the call will be available on our website for 30 days following the call. I am now pleased to turn the call over to Cris Gaut, our Chief Executive Officer. C. Christopher Gaut - Chairman & Chief Executive Officer: Thanks, Mark, and good morning. I will begin with a summary of our second quarter performance, make some observations about the current market conditions and outlook and talk about our plan for Forum going forward. And then, I will…

Thank you, Cris, and good morning, everyone. I will summarize our results for the quarter comparing the second quarter 2016 with the first quarter of 2016. Consolidated revenue of $143 million for the second quarter was down 10% sequentially in line with our expectations as global drilling and completions activity levels continues to decline. Our Drilling & Subsea segment revenue of $57 million was down 13% due to the decline in working drilling rigs and lower demand for subsea robotics and equipment. The Completions segment revenue of $25 million declined 29% sequentially due to lower well construction and completions activity in North America. Our Production & Infrastructure segment revenue of $62 million was up 2% on increased sales of valves to the midstream gas transmission industry, partially offset by lower surface production equipment deliveries in the United States. The net loss for the second quarter was $29 million or $0.31 per diluted share. The quarter included special items totaling $19 million on a pre-tax basis. The adjusted net loss excluding these items and the associated income taxes was $0.19 per diluted share. The special items were comprised of pre-tax charges of $29 million for inventory reserves, restructuring charges and other items partially offset by $10 million in currency translation gains. Our second quarter adjusted operating loss was $23 million, excluding special items compared to an adjusted operating loss of $21 million from the first quarter. Our decremental operating margins of 13% for the quarter on the reduced revenue were better than our guidance of a percentage in the 20%s are we are benefiting from our cost reduction and efficiency initiatives. At these significantly lower industry activity levels, our revenue is even lower than our 2016 plan. Our evaluation of inventory conducted at the end of 2015 was based on the…

Thank you. Our first question will come from the line of George O'Leary from Tudor. Your line is open. George O’Leary - Tudor, Pickering, Holt & Co. Securities, Inc.: Good morning, guys. C. Christopher Gaut - Chairman & Chief Executive Officer: Hi, George. George O’Leary - Tudor, Pickering, Holt & Co. Securities, Inc.: Impressive quarterly results and the 0.9 times book-to-bill stood out. But in your commentary highlighting the 114% book-to-bill in the Completions segment was particularly interesting. Any incremental color on what within the Completions segment was really the driver there? Was it more on the downhole side i.e., Bridge Plug type products or more consumable equipment associated with pressure pumping spreads? Just curious on what drove that impressive book-to-bill? C. Christopher Gaut - Chairman & Chief Executive Officer: Yeah. So, I think the book-to-bill ratio was actually higher in the pressure pumping consumable. As some of our customers, as they talked about in our conference calls, are putting some equipment back to work now. They are of course very concerned about the pricing in their business, and that puts a lot of information on their cash flow. So, they're still cautious in their spending and holding off until they absolutely need to spend. But it is a case that they have now gotten to the point where they need to – they have a stable or increasing level of activity, which is going to drive more utilization and more need for replacement products. But it was not just in the stimulation and intervention product line, the downhole business also had a book-to-bill ratio in excess of 100%. George O’Leary - Tudor, Pickering, Holt & Co. Securities, Inc.: That's very helpful color. Thank you. On the Middle East, I heard there was some interesting commentary from you, Prady. I…

Thank you. Our next question will come from the line of David Anderson from Barclays. Your line is open.

Hey. Good morning, Cris. Just getting back on that Completions business. Can you just talk about kind of – I think most of your kind of short cycle U.S. exposure is in that business. Has anything kind of changed in your outlook from the last quarter? If I recall correctly, you've been talking about kind of a year-end inflection point year-end kind of pick up in that. Has anything kind of changed in your outlook so far? C. Christopher Gaut - Chairman & Chief Executive Officer: Yeah, David. When we talk about our short cycle activity based businesses that are early to pick up, let's not lose sight of the production equipment business within our Production & Infrastructure segment. That's probably the first one to pick up because operators need to place the orders for that equipment in advance of bringing on a new well on production. And that's why we did see a pickup, a handsome pickup in orders in that product line during the second quarter, and we expect that trend to continue. If operators are going to complete these docks, our business is kind of analogous to a well head, meaning you cannot complete that well without having that well site production equipment. So, that was I think a bright spot in Q2 and one we expect going forward and is an early indicator for us. Yes, you're right about our pressure pumping consumables and other completion products. But those are – don't have much – as much lead time associated with them. They're kind of bought as needed. So, we do expect a continued improvement in our orders there and our book-to-bill there during the third quarter, provided more wells are being completed and this increase in frac activity this trend continues. I think the other downhole products business within our Completions segment, which also had a good book-to-bill ratio in Q2 would be another beneficiary of these as longer laterals. But again, it is a business that's kind of bought on an as needed basis and doesn't have a lead time associated with it. So, it doesn't have as much kind of advanced notice of an upturn as the production equipment does. But you add those three businesses together for us, and that's about 35% of our revenue or so.

So, probably a little early to call kind of the bottom in Completions, I guess, because you're saying (29:00) just in time is kind of on the quarter. So, you probably cannot make that statement quite yet? C. Christopher Gaut - Chairman & Chief Executive Officer: Right.

Okay. I just have a question on the M&A. Kind of curious as to when you're going after these smaller companies which has sort of been what you've been going after, what does that competition look like? How many people are showing up for these? I mean, I know a lot of this is tends to be kind of more conversations, are not acquisitions are up for sale necessarily. But I'm just wondering kind of what your competition looks like in some of these and how that's changed over let's say the last, I don't know, six months or so? C. Christopher Gaut - Chairman & Chief Executive Officer: Well, David, if you wait until the business broker or the investment bank sends out the book, you're going to have a lot of competition, right.

Right. C. Christopher Gaut - Chairman & Chief Executive Officer: So, the key for us is to try to identify opportunities that are earlier staged than that, we're not wanting to go through that process. And that takes a lot of beating the bushes and going out to meet the entrepreneurs and develop a relationship over time. And many of the – 17 or 18 deals that we – completed acquisitions that we've done over the past several years have had a very long gestation period. So, we've got a pipeline of those that we're working on. And that's how we try to differentiate our story than others. Now, that's not to say that even if we've developed a relationship, that the seller is not going to want to do a market check. They probably will. And there will be some competition and it often involves private equity, but we know how to handle that. And we've been relatively successful with it. We're not going to win every deal. You certainly – it's kind of like baseball, you're not going to bat more than .500, right, and far from it. But I think our batting average is decent here.

I know we talked yesterday about going after smaller acquisitions and kind of building up the business that way. Is that a concern at all? Do they kind of play in a different pond than you? Does that alter your views at all in the M&A market? C. Christopher Gaut - Chairman & Chief Executive Officer: What's small to NOV is big for us still. When they talk about a deal of $400 million being small, that would be big for us. So, we haven't done many deals of that size. So, yeah, they are looking what they call smaller deals, but those would still qualify as big deals for us. It's not to say that there's not the potential overlap there at the margin, but – and we have crossed paths with them from time to time, but the small end of their range is the big end of our range I would say.

Okay. Great. Thank you, Cris. C. Christopher Gaut - Chairman & Chief Executive Officer: Thanks, David.

Thank you. Our next question will come from the line of James West from Evercore ISI. Your line is open.

Hey. This is actually Samantha Hoh filling in for James. So most of my questions have been addressed, but I did wanted to hear more about this new mud pump upgrade package that Prady introduced. Just kind of curious. Is this a strategy that you guys are – have used before to sort of go after the various trends in the longer laterals and what not, and just adjusting some pieces of equipment not the whole new capital equipment, but just a part that is essential that needs to be upgraded. And then, can you qualify just sort of how the whole upgrade work? What sort of pieces are you selling in and then also what the aftermarket opportunity is going forward? Prady Iyyanki - President & Chief Operating Officer: Yeah. Well, I think that's a great question, Samantha. As you mentioned, I think the trend in the market is longer lateral walls and higher pressure as a result; one of the things the drilling operators do need to position themselves for the upturn is to have higher power mud pump upgrades. And we have already seen several of those orders come through, and our pipeline is pretty strong. As the activity picks up, we expect all the drilling operators, most of them, will upgrade their drill rigs with the mud pump upgrades. Now we are already competitive on the mud pump upgrade. We expect our reliability and the durability and the operating cost to be much better. As a result, we are gaining a lot of traction in the marketplace. So, for your question now, Samantha, yes. As we see the market trends, we are developing a product portfolio to be aligned with those trends. And another good example is if we look on the Completions side, we have…

Okay. C. Christopher Gaut - Chairman & Chief Executive Officer: Add on the pump upgrade that with these long laterals to drive the mud motors, you need more hydraulic horsepower. And there's still a substantial amount of the Tier 1 rigs that need that 7,500 psi upgrade, which involves a change out of the fluid end side of the drilling rigs, mud pumps and all the associated hardware on the fluid end side. And it costs several hundred thousand dollars per rig typically to do that upgrade. And there is a significant aftermarket component to that, that once we would do the capital side, we would also be in the prime position to do the ongoing work with maintaining the mud components up on the rig associated with that higher pressure and higher working and have more intensive work that is still prevalent in many areas of the service and drilling side these days. Prady Iyyanki - President & Chief Operating Officer: And the probably the first phase of our opportunity will be North America which is where the upgrades will happen. But all the international market, most of the international market will also follow North America down the road which will also give us further opportunities.

That's really great. And I was just wondering during when you – I mean, well, I know we're still a far from being at the point where customers are probably worrying about getting the aftermarket piece reliably, but is there any sort of contracts associated with that? Sort of like a service agreement afterwards? And then is that something that's going to be booked into orders or is it just so short cycled that it's just out the door the minute you get these orders? C. Christopher Gaut - Chairman & Chief Executive Officer: If you're the primary provider of the mud pump consumables for a drilling contractor, they're going to want to maintain some consistency in the consumables for the mud pumps for that rig and across their rigs. So, that – it's more of that type of relationship than it is a contract.

Okay. Great. Thank you so much. Prady Iyyanki - President & Chief Operating Officer: Thank you, Samantha.

Thank you. Our next question will come from the line of Marc Bianchi from Cowen. Your line is open. Marc Bianchi - Cowen & Co. LLC: Thank you. C. Christopher Gaut - Chairman & Chief Executive Officer: Hey, Marc. Marc Bianchi - Cowen & Co. LLC: Maybe just – hey. Maybe just following up on that last line of questioning and the discussion there. What do you see is the market opportunity for upgrading rigs at higher capacity mud pumps or how do we think about the addressable market there for you guys and maybe how many are you tracking in the near term as business opportunities? C. Christopher Gaut - Chairman & Chief Executive Officer: Well, as I say, there are still quite a few, whether it's 50% of the Tier 1 rigs or not, I – that might be a rough guess as to the number of Tier 1 rigs that are out there, not just working rigs but Tier 1 rigs working and not working that are not upgraded to the 7,500 psi. So, there are still quite a few to do. And we would have good relationships with a number of the leading drilling contractors. I don't want to go into who those are and who those aren't. But they're still – that is clearly a competitive need out there to do these long laterals. Some of the other areas for upgrades that we're particularly exposed to, the handling tools and of course the catwalks. And everything's about walking rigs now and mobility, and that is an upgrade that we're doing also with our catwalks. Another product that we're introducing is one of the, I guess, the largest catwalks out there and we're working with a rig builder to deliver that for some new rigs as…

Marc, I'd like to just make sure we're clear that these higher incremental margins that we're talking are asset-turn. So the early quarters, as activity improves and we see this absorption improve, we'll seen incremental margins in that higher up to 50% kind of range. But the range you are commenting on in the concept called high-20%s, low-30%s is more of a steady state. Once we've gone through that inflection point, we'll settle down to incrementals more in the range. Prady Iyyanki - President & Chief Operating Officer: And Marc, probably the other thing I'll add is, as the efficiency gains, which is we're not buying much from a material standpoint, even though our savings are by the end of the year will be 15% to 18%. And there's still further a lot of opportunity in the procurement front. And as we have mentioned, the lean savings will be very significant in 2016 too. So the efficiency gains, as the activity picks up, will be magnified, apart from the absorption issues which Cris was talking about. C. Christopher Gaut - Chairman & Chief Executive Officer: Yeah. That procurement benefit will be significant. Marc Bianchi - Cowen & Co. LLC: Okay. Thanks. I guess just maybe one more on that. Is there a way to think about how much revenue could increase before you go back to those high 20%s to 30% type range? C. Christopher Gaut - Chairman & Chief Executive Officer: Well, we have significantly underutilized our manufacturing plan as you can imagine. So, I think we have some good running room here to get to fully utilization and until we can fully absorb all of our manufacturing and overhead that we have. I think we've got a good running room, Marc. It's not a near-term issue there. Marc Bianchi - Cowen & Co. LLC: Okay. Fair enough. Thanks very much. C. Christopher Gaut - Chairman & Chief Executive Officer: Thanks, Marc.

Thank you. Our next question will come from the line of Jake Lundberg from Credit Suisse. Your line is open. Jacob Lundberg - Credit Suisse Securities (USA) LLC (Broker): Hey, guys. C. Christopher Gaut - Chairman & Chief Executive Officer: Hi. Hi, Jake. Jacob Lundberg - Credit Suisse Securities (USA) LLC (Broker): Just kind of following up on the same line of questions. So, I think you said in the past that in terms of man-hours, you were currently operating at something like 20%-25% of capacity. So I mean, should we think that maybe revenues could quadruple from here before you would run out of that, the operating leverage driving those higher amount of margins? Prady Iyyanki - President & Chief Operating Officer: I would say most of the operations are running on a reduced work schedule, not at the 25% as you mentioned. But from a people standpoint, Jacob, they're running at anywhere from 30 to 32 hours depending on where the plant is. So, I think the first phase, as the market turns, is to get back to the full schedule first, which gives another 20%, 25% of – from a people standpoint and then the overtime before we start adding any people. C. Christopher Gaut - Chairman & Chief Executive Officer: Yes Prady Iyyanki - President & Chief Operating Officer: From a people standpoint. C. Christopher Gaut - Chairman & Chief Executive Officer: Yes. But I think Jake's point is once we get to full schedule overtime, and then staff up to fully utilize our facility, yeah, we've got a lot of increase in potential there. So, before we have to think about certainly adding roofline, but that's when you're running your plant most efficiently is when you're running your first shift at 60 hours, 50, 60 hours a week and you've got a second shift, then you can say that you're at an efficient production rate and gosh, yeah, we're a long way from there. Jacob Lundberg - Credit Suisse Securities (USA) LLC (Broker): Okay. Great. That's really helpful. And then so, kind of thinking about the second half if, I think rig count is up today something like 7% versus second quarter average or so. If we were up a little more than that overall for the third quarter and then say that we sort of stay there up slightly again in the fourth quarter, I mean, do you think you could hit EBITDA breakeven in all of the businesses by the end of the year under that scenario?

Yeah. The businesses that recover early which Cris has described as the production equipment product line and the completions. And those businesses have been at least the completions more book and ship businesses. As we see those improve, we're going to see the most improvement in EBITDA from those product lines in the early days and I'd say by the end of the year, we could be in a good place. Drilling maybe a little bit more delayed because even though rigs are going back to work, there's still the destocking that's taking place and it usually takes a couple of quarters before that starts converting to orders and revenue but the other early cycle product lines should come back more quickly. Jacob Lundberg - Credit Suisse Securities (USA) LLC (Broker): Okay. Great. And if I could sneak one more in. Are you guys able to share what you think your current market share is of mud pumps in the U.S. and maybe where you think you could bring that level to in the next cycle?

Yeah. We think we're probably number two or three in that space. Jacob Lundberg - Credit Suisse Securities (USA) LLC (Broker): Okay. Very helpful. Thanks guys. C. Christopher Gaut - Chairman & Chief Executive Officer: Great.

Thank you. Our next question will come from the line of Martin Malloy from Johnson Rice. Your line is open. Martin W. Malloy - Johnson Rice & Co. LLC: Good morning. C. Christopher Gaut - Chairman & Chief Executive Officer: Hey, Marty. Martin W. Malloy - Johnson Rice & Co. LLC: I've got a question on the ROV segment and with the Technip and FMC pending merger. I just wanted to maybe get your comments about how that might change the dynamics for – in the ROV market. Maybe some of Technip's competitors might not want to buy ROVs from them as much as they previously might be inclined to? C. Christopher Gaut - Chairman & Chief Executive Officer: Yeah. It's a good question and we don't know the answer to it. But you're pointing to the fact that one of our primary competitors in this consolidated space of building and selling ROVs is FMC with their Schilling brand. And of course, our Perry brand, years and years ago, was owned by Technip. And who knows whether they want to – what their feeling is about that business on a combined basis going forward. But you're raising a separate issue which is we sell our ROVs to the offshore contractors, Technip and others. And if the Schilling brand of FTI is owned by a competitor. How does that change the feelings for some of the other customers out there about buying from a competitor? It's a good question. Don't know the answer to it, but time will tell. In other spaces, that is often – in other sectors of the industry that is often an issue as to we'd rather buy from an independent supplier rather than from a competitor. And that is why Forum does kind of draw a…

Thank you. Our next question will come from the line Robin Shoemaker from KeyBanc Capital Market. Your line is open.

Thanks. Cris, I wanted to ask on your – going back to your incremental margin prediction. How much if anything is required in terms of a pricing recovery to meet those margins? I totally understand that it's all about utilization of your fixed costs. But have you conceded pricing in any of your product lines and does pricing recovery factor into those incrementals? C. Christopher Gaut - Chairman & Chief Executive Officer: Robin, we have definitely like everyone in this downturn conceded pricing. No question about that. Our assumption is that it will not be easy to recover the pricing. So, that is not the basis of our feeling about the high incremental margins in the early stage of a recovery. What drives that is volume, better utilization of our facilities and importantly as Prady pointed out, the efficiencies that we're gaining for example on the procurement side and the progress that Prady and Darin Harvey and our procurement team has done a great job as we, for the first time at Forum have really brought kind of 21st century procurement methodology to bear on Forum supply chain.

Right. Okay. Prady Iyyanki - President & Chief Operating Officer: Robin, over a period of time, what we're expecting is over the next two years, even if it fall back 40% of the pricing, the rest of it will be offset with the cost initiatives and the efficiency, and we can get back the margins to about 18% plus.

Okay, understood. Just a specific question on what's happening with regard to sales of fluid ends to your pressure pumping customers and some of them are talking about reactivating some fleets in response to higher demand. So are you selling new kind of your 1,000 horsepower quintuplex pumps? Is it mainly an after-market business right now? Just wondering if you can give us an update on J-Mac and how you perceived the upturn that you're describing in inquiries affecting them. C. Christopher Gaut - Chairman & Chief Executive Officer: Yeah. The number of power ends we're starting at this point, Robin, is low. We're selling some but not many because you really have to talk about a pressure pumping company wanting to bring a stacked fleet out of cold stack and put it back to work before you'd be talking about really selling many power ends. The fluid ends or complete pumps – the fluid ends that we're selling today are primarily the replacement fluid ends when one becomes unusable out in the field. Now, as stacked equipment goes back to work, when that does happen and it's not happening yet, then the number of fluid ends that would be required would be substantially higher. And of course, as we move to higher utilization even for the fleet that's out there working today. All of the pressure pumping companies are saying, gosh, we first like to get to full utilization of equipments in the field. Well that would be great from our standpoint because that means more hours on the pump per week, per month which means more demand for these consumable products of treating iron and fluid adds. So there would be demand – both for the – driven by how many hours. The existing equipment is working, but then a step change when you're talking about redeploying and reequipping a stack spread.

Yeah. Yeah. Okay. Good. Well, thanks a lot, Cris. C. Christopher Gaut - Chairman & Chief Executive Officer: Very good, Robin.

Thank you. Our next question will come from the line of Sean Meakim from JPMorgan. Your line is open.

Hey. Good morning. C. Christopher Gaut - Chairman & Chief Executive Officer: Hi, Sean.

I just want to touch a little bit on the valves; you highlighted some strength in that business during the quarter particularly in the midstream transmission side. CapEx budget is pretty tough there this year particularly in the early part. Just curious, if you can give us a sense of, is that just some seasonal strength. Could you see some good project work or just kind of typical stocking? A little more detail on what was driving that opportunity. Prady Iyyanki - President & Chief Operating Officer: The midstream part of the segment at least from our standpoint has been pretty stable. Sean, in fact, we have a secured few orders in the first half of 2016 and we expect at least based on our reports in one of the products we are commercializing, in fact we just in the second quarter we commercialized a slab gate valve, which is a new product for us, which is a distributed valve in the midstream space and we have secured some customers already. So, we do expect the midstream space primarily stable for us, primarily because we're gaining market share in that space. In the case of downstream even though its stable, we are seeing a lot of pressure or market softness on the refinery side, even the petrochemical part of the segment is pretty resilient. C. Christopher Gaut - Chairman & Chief Executive Officer: Pretty resilient. Yep.

Okay. And I guess on midstream, I guess, could you – is there any more detail about the types of customers, I mean the transmission folks versus selling gas utility or anything – any more detail of how that's underlying or even on the transmission projects you find that's very stable? Prady Iyyanki - President & Chief Operating Officer: Actually both on the transmission side and on the gas utility side we have secured orders in the first half of 2016. So even though there could be market softness there, we are gaining market share in both areas. C. Christopher Gaut - Chairman & Chief Executive Officer: Yeah. There's the ongoing work of utilities of having to kind of rebuild their system as it's quite old and unsafe. And then of course there are these transmission lines trying to debottleneck this system out there and then those feeder lines going into these new, all these new petrochemical plants that are being built.

Got it. Thank you for that. And then just maybe circle back on the Middle East, as you think about that opportunity set, can you give us a sense of how the capital commitments deploy over time, maybe CapEx or working capital? How much you may need to deploy to take advantage of that opportunity? Prady Iyyanki - President & Chief Operating Officer: Yeah. We are not CapEx – most of the CapEx investments we make are in – are pretty small numbers. So the capital investment we're going to make in Saudi Arabia will be a small number. If I have to give you a range, probably I would say less than $10 million, also significantly less than $10 million for sure. C. Christopher Gaut - Chairman & Chief Executive Officer: Yeah. It's probably in the... Prady Iyyanki - President & Chief Operating Officer: Probably the $5 million range. C. Christopher Gaut - Chairman & Chief Executive Officer: Yes. Prady Iyyanki - President & Chief Operating Officer: May be even less. C. Christopher Gaut - Chairman & Chief Executive Officer: Lease of facility probably... Prady Iyyanki - President & Chief Operating Officer: Correct. C. Christopher Gaut - Chairman & Chief Executive Officer: And move some equipment. So, it will be pretty insignificant, actually. Prady Iyyanki - President & Chief Operating Officer: Correct. But the key there is the supply chain development for us to take the benefit of the localization part of Saudi Arabia and what they're looking at is not to localize the whole product but the parts of the localization of product which is assembly test and maybe painting, which qualifies us from a localization standpoint to take the benefit of the localization initiative in the Kingdom.

Right. Okay. Great. Thank you very much. C. Christopher Gaut - Chairman & Chief Executive Officer: We'll take one more question.

Thank you. Our final question will come from the line of John Daniel from Simmons & Company. Your line is open. John Daniel - Simmons & Company International: Hi, gentlemen. Thank you for fitting me in. First question is, just relates to the inventory write-down. Can you – was the (01:00:18) inventory work in process and just some color on the types of inventory that were impacted would be helpful?

So, John, it includes the full span of inventory. So, the way our policy works, we look at inventory as it moves. And traditionally, we've always looked at the way the policy's been applied, just look at historical movement. The way we've applied it this year both mid-year and at the end of the last year, has been to look forward because of the severe downturn and the change in the outlook going forward, we've applied that policy looking forward. But it has – it does cut across all ranges of the inventory. John Daniel - Simmons & Company International: Okay. Given that the write-down is driven more by, if you will, the mechanical application of that policy, I'm assuming you can still use or sell some of those products in the future. And if that's the case – I mean I'm assuming that would lead to higher potential artificial margin improvement, if you will, on future sales? Is that right?

So we only took 100% reserves on inventory that we had plans to scrap, and there is some of that in the reserve that we've added. And the rest, we've limited it to what we felt brought the inventory down to a lower cost of market type of value. So we will be watching as these inventories come out, how that reserve reverses. I wouldn't expect it to come back too quickly. But it is fair to say that we've got inventory now, what we consider to be a fair-carrying value and should be reflective of market margins on a go-forward basis. John Daniel - Simmons & Company International: Okay. All right. Another one here for you is let's assume you have a customer that enters your restructuring process or it looks like it's apparent they will be entering that process, to the extent you have a receivable then. At what point would you take a reserve against that?

Very good question. So we have had heightened procedures this year for monitoring the credit that we extend to customers and have tightened that credit as we've seen customers reaching positions of potentially having to go into a restructuring. So our policy does work on an aging basis, but we will judgmentally – add the reserves if we think there's risk, I would say given the tightness of our processes this year, we've had very good fortune thus far to not have to take significant charges for bad debt reserves despite some of our customers being in difficult positions, and that's been a matter of keeping receivables current and a lot of effort to make sure that the collections are taking place on a timely basis. John Daniel - Simmons & Company International: Okay. C. Christopher Gaut - Chairman & Chief Executive Officer: And John, also some these restructurings particularly for the public companies have been restructurings, debt or equity swaps, but we have been able to continue business and continue to get paid. John Daniel - Simmons & Company International: Okay. And that's – that's the reason we're going down this path, because there's been some speculation by the better capitalized service companies that vendors will be less likely to work with those that are distressed given their potential risk, if you will, of the receivables risk, so since you're a vendor to these guys, you're a good person to ask and it seems like this is not – you're not going to abandon your relationships with these distressed companies and in fact they might. Is that a fair statement? You're still going to work with them and then certainly once they come out of a restructuring process. C. Christopher Gaut - Chairman & Chief Executive Officer: Yeah, yeah. That wouldn't be a good assumption on their part. John Daniel - Simmons & Company International: Okay, just want to confirm that. And then the last one, I don't know if you would be willing to answer this one, but I'll ask anyways is what's the revenue opportunity for you for each 7,500 psi system upgrade. C. Christopher Gaut - Chairman & Chief Executive Officer: Yeah, several hundred thousand dollars per rig. John Daniel - Simmons & Company International: All right. Okay. Thanks, guys. Thanks for your time. C. Christopher Gaut - Chairman & Chief Executive Officer: Thanks, John. C. Christopher Gaut - Chairman & Chief Executive Officer: Well, thank you very much for good questions and your attention and your interest in Forum. And we'll talk to you next quarter.

Thank you, Neesy. You can end the call.

Thank you, ladies and gentlemen. This will conclude our call. Have a great day.