Good morning, ladies and gentlemen, and welcome to the Forum Energy Technologies' Earnings Release Conference Call for the Fourth Quarter and Full Year 2017. My name is Brian 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 speakers' remarks. As a reminder, this conference call is being recorded for replay purposes. After the speakers' remarks today, I will instruct you on the procedures for asking questions. I will now turn the conference over to Mr. Mark Traylor, Vice President of Investor Relations. Please proceed, sir.

Thank you, Brian. Good morning, and welcome to Forum Energy Technologies fourth quarter and full year 2017 earnings conference call. With us today to present formal remarks are Prady Iyyanki, our Chief Executive Officer and Jim Harris, our Chief Financial Officer. Pablo Mercado, our Senior Vice President of Finance, will also be available for Q&A. 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. These 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 publicly update or revise any forward-looking statements to reflect future events, information or circumstances that arise after this call. In addition, this call contains time-sensitive information that reflects management's best judgment only as of the date of the live call. Management statements may include non-GAAP financial measures. For a reconciliation of these measures, please refer to the earnings release. This call is being recorded. A replay of the call will be available on our website for two weeks following the call. I'm now pleased to turn the call over to Prady Iyyanki, our Chief Executive Officer.

Thanks, Mark. Good morning, everyone. Thank you for your interest in Forum. I'm going to start my comments by reviewing Forum's 2017 achievements and I will discuss the strategic objectives and focus areas for 2018. Then I'll turn the call over to Jim Harris to provide details on our financial performance and strong liquidity position. 2017 was a transitional year for Forum. We've successfully emerged from the downturn with a strong balance sheet and we are well positioned for growth, both organically and through acquisitions. We continued to ramp up our operations in Completions and Production & Infrastructure segment, while streamlining Drilling & Subsea segment. We delivered strong revenue growth of approximately 40% and improved our adjusted EBITDA margins by almost 800 basis points. The recovery in exploration and production activity in North America shale basins is in the early innings and activity is expected to increase further. Drilling rig count ended the year on an upswing and, importantly, well completion activity increased materially in the second half of 2017, as service companies put existing equipment to work and commissioned new fleets. Operators continued to push into the Permian requiring increased levels of fracking and higher service intensity. Wells are being drilled and completed with greater lateral lengths, more compressed spacing for frac stages; in addition, the zipper frac techniques are being adopted. This increase in service intensity has led to greater demand for pressure pumping products that can last longer and their high utilization requires more frequent replacement of consumable components. Many of our completion products are designed specifically for these increasing service demands, including the highly durable and reliable power ends and our long-lasting and easily serviceable ICBM manifold trailers, amongst several others. We also offer a broad suite of consumable components. Our recent acquisitions of Global Tubing…

Thank you, Prady, and good morning, everyone. In 2017, the North America land drilling and completions activity remained strong, as Forum generated almost 80% of our revenues in this market. Our total revenue for the full year 2017 was $819 million, up 39% from 2016. Orders for the year were $870 million, a 46% increase from 2016, resulting in a book-to-bill ratio of 106%. Our reported net loss for the year was $57 million or $0.58 per diluted share. Excluding $0.20 per share of special items, adjusted net loss was $0.38 per diluted share for the full year 2017. In the fourth quarter, our total orders were $232 million, a 1% increase from the third quarter. The fourth quarter book-to-bill ratio was 93% for the company as a whole. Our Completions segment orders increased to $101 million sequentially, due to the addition of Global Tubing and customer spending on pressure pumping and artificial lift equipment, resulting in a book-to-bill ratio of 98%. We expect the demand for our Completions segment to remain steady in the first quarter and then accelerate as operators ramp their well completion programs in 2018. In our Production & Infrastructure segment, orders declined 26% and our book-to-bill ratio was 88%. Our well site production equipment and our downstream EDGE II desalter equipment sales were down 37% sequentially after the exceptionally high level in the third quarter. New business in this segment has historically been lumpy and uneven from quarter to quarter due to the nature of customer projects and buying patterns. Our Drilling & Subsea segment orders were $50 million, consistent with the third quarter, resulting in a book-to-bill ratio of 92% in the quarter. We continue to believe that our Drilling & Subsea segment has reached a bottom and expect modest growth coming into 2018.…

Thanks, Jim. In summary, 2017 was a challenging, but transformational year for Forum. We achieved many successes and I want to thank our loyal employees for the hard work in getting us through the downturn and ramping up operations for 2018. The macro environment for North America drilling, completions and infrastructure activity, which is 80% of our revenue base, is favorable as we enter 2018. Our near-term focus is on executing the following. Growth in Completions and Production & Infrastructure segments, margin improvement through operating leverage and pricing, working capital efficiency and free cash flow generation and last, balance sheet discipline and accretive acquisitions. We at Forum are excited about our 2018 prospects. We thank you for your interest. At this point, we will open the line for questions. Operator, please take the first question.

Thank you, sir. And our first question will come from the line of Jacob Lundberg with Credit Suisse. Your line is now open. Jacob Lundberg - Credit Suisse Securities (USA) LLC: Hey, good morning, guys. Thanks for taking the question.

Hey, Jacob. Jacob Lundberg - Credit Suisse Securities (USA) LLC: Just I guess first on the – in the press release you mentioned first quarter 2018 off to a bit of a slower start because of slow customer spending. I guess, could you quantify the magnitude of what you've seen so far? What you think that might be in the first quarter and do you expect it to bleed at all into the second quarter?

Well, what we expect, Jacob, is I think February will be stronger than January and March will be much stronger than January. But what we're seeing in January is slow mobilization of crews primarily because of the weather and the seasonal. And the second thing we're also seeing is the capital equipment which is a – probably has to go through the budget process and we'll start seeing that probably in the late February and the March time period, right? But, however, what we are seeing on the Completions side is we are negotiating some big deals, especially on the frac side, which could materialize probably later in the quarter or early part of the April. So, we do expect our bookings to be higher than fourth quarter for sure and there's a pretty good chance that all the three segments could be higher than the fourth quarter. Jacob Lundberg - Credit Suisse Securities (USA) LLC: Okay. Could you provide any more color on the potential bookings in the Completions side that you're talking about? When would you expect that to actually flow through the P&L?

Yeah. I mean what we're seeing now is the consumables part of the activity, we are seeing it, we saw it in January, I think we expect a sequential increase going into February and March. I think what we expect to see probably starting in February, but more in March is the capital part of the equipment. But in the case of Completions, Jacob, I think our revenue will be higher than the fourth quarter, and I think our book-to-bill ratio will be pretty close to 1. And the other point probably is the – if we look at from a Completions standpoint, what we expect is as the rig count goes up and as the well count goes up and more importantly as the horsepower goes up, there will be a sequential increase month-over-month on the Completions segment on all the product lines we have. But apart from that, in the second half, we have about four good levers which are incremental, I would say, to the first half; the first being on the Completions segment, in specific we have about three or four products which are in the different stages of commercialization in acceptance with the customers and we expect the revenue on those four products to be materially higher in the second half. And then if you go to P&I, we have two levers, one is the Saudi operation comes in the second half, which is meaningful for the valve guys and also there are some natural gas infrastructure projects, which are in the negotiation stage, one in Northeast and a few in the Gulf Coast, where I think you'll start seeing the revenue in the second half. And the last one being the D&S, the Drilling & Subsea segment, we are expecting some capital orders as early as first quarter, where the revenue will start materializing in second half, right? So, from a Completions standpoint, sequential increase every quarter, every month. In the second half, we got four more products coming which will materially increase the run rate. Jacob Lundberg - Credit Suisse Securities (USA) LLC: Got it. And then, I guess, as a follow-up on the – just trying to bridge some of that to the 1Q guide. So, it sounds like you feel pretty comfortable with Completions revenues increasing in the first quarter. If we look at the low end of the guide versus the high end of the guidance, it implies revenues going down versus going up. I guess, what happens – how does the quarter play out where you end up at the low end? How does the quarter play out where you end up at the high end? I guess – if you feel good about growth in Completions, where do you think you might see some revenue contraction?

Yeah. Well, listen, if you look at the total portfolio, and then I'll answer your question specifically, Jacob, is I think what we expect is Completions will be higher than fourth quarter, Drilling & Subsea will be either flat or little down, and Production & Infrastructure will be down versus fourth quarter just because of the bookings we got in the fourth quarter. But overall, from a bookings standpoint higher and from a revenue standpoint, if we look at the midpoint, it's flattish. So, the way it could play out is – the reason why we've given the range is January was a slow start. We expect February to be stronger than January, and March to be much stronger than February and January. So, if March is very strong and it can offset January, then it could be on the higher end of the range. And if the slowness continues, which we don't expect to, then we could be on the low end of the range.

So, Jacob, just some color I would give there also on Completions specifically, I just want to highlight that it is our most book-and-ship business, so the timing of the revenue is very reliant on the orders. And so to your specific question of when that revenue might come through, if we see the orders early enough in the quarter, it's helpful to revenue; otherwise, we'll see the revenue come into the second quarter. So, it is the – so the variability you're seeing in our guidance, it is – for each of the product lines on that book-and-ship business, it's the timing of when we see those orders start to pick up. Jacob Lundberg - Credit Suisse Securities (USA) LLC: Got it. And just to sneak one last one in. Is there any way you can kind of quantify the magnitude of those orders that you're looking at?

Well, that – I'd say, Jacob, that's what's built into the range. Jacob Lundberg - Credit Suisse Securities (USA) LLC: Okay.

The reason there is a range is, if they come later in the quarter, obviously, it would push us more towards the lower end. If we do get them early enough, then there's upside from there.

And if we get a big chunky order, let's say, in the second week of March, Jacob, it depends how much of the product we can get out, and depending on what the product is. If it's a capital equipment, we may not be able to get all of the product out, but if it's consumable, most probably it's in the inventory and all the product we leave. Jacob Lundberg - Credit Suisse Securities (USA) LLC: Got it. Understood. Very helpful. Thanks, guys. I'll turn it back.

Thank you. And our next question will come from the line of George O'Leary with TPH Company. Your line is now open. George O’Leary - Tudor, Pickering, Holt & Co. Securities, Inc.: Good morning, guys.

Hey, George.

Good morning. George O’Leary - Tudor, Pickering, Holt & Co. Securities, Inc.: The first question I have, I guess, is digging in on the slowness in January, just which segment that's most acutely affecting. I guess, I would imagine that that is the Completions segment, given the heavy – just the book-and-ship nature of that business. But is there any of that that's impacting the other components of your businesses? Maybe if you could just break down which segment is being impacted most and which is being impacted least, that'd be helpful.

Yeah. I would say Completions for sure, because of the seasonal and the weather and the crew mobilization, where our customers are not ready to take the equipment for sure, George. And let me give you another example, just in the month of January, 25% of our revenue in production equipment where the product is ready to be shipped, but the customers are not ready to take the unit because the sites are not ready, right, so just to give an example. And then in the case of our valves, probably another good example is, which is a seasonal thing in the fourth quarter, typically the refineries and whatnot are shut down for the – after – for MRO activity. And now the refineries are back, so the bookings are coming strong, but the revenue will follow some of the bookings we had in the fourth quarter. So, slow start, but as the quarter progresses, we expect the revenue to go higher. George O’Leary - Tudor, Pickering, Holt & Co. Securities, Inc.: Great. That's very helpful. And then, you guys mentioned on the free cash flow side, I think around a quarter ago, the hope would be getting to breakeven by Q1. Maybe if you could just break down, is this all just the change in expectations around EBITDA? Is it issues on the working capital side, increased CapEx? What's maybe changed the tune there into delaying that free cash flow neutrality or free cash flow generation into the back half?

So, George, it is, as you surmised, a combination of things. First, it is a slower start to the year than we had anticipated. But maybe more importantly, it is our bullish outlook on the second half of the year, so the negative cash flow is derived from our actually starting to buy long lead items now. We're actually seeing in our supply chain, because of just demand in the marketplace, even on normal supplies, longer lead times. And so, in order to make sure we can deliver to our customers on time, we have increased, on purpose, our inventory build, but it is with a view that we would ship that product in the second half and we would see inventory turns pick up as we go into the end of the year. I would also highlight, we gave guidance that we improve sequentially with each quarter. I'd also like to highlight that we do expect not only positive free cash flow in the second half, but positive free cash flow for the full year. So, it's not an anticipation that we're going to invest in these inventories in the first half and then be negative for the year. We do expect to recoup that as earnings improve, as we go into the second half of the year and, as I said, be positive for the full year.

George, probably couple more points there, as Jim said, we're expecting a very strong second half and we want to stay ahead of the supply chain constraints, but also one of the things we look at is how well we are managing the working capital. And in the fourth quarter alone, our inventory turns improved from 1.5 to 1.6 and then we will continue to make significant progress in that throughout 2018. George O’Leary - Tudor, Pickering, Holt & Co. Securities, Inc.: Great. And then maybe just one more follow-up on the supply chain side. Is it any of the three businesses, in particular, where you're seeing the most tightness? We've heard some other vendors to the pressure pumpers, in particular, note that we're seeing lead times extend, but just curious where you guys are seeing the tightness.

I would say Completions is the – well, I would say probably is the dominant segment, George. We saw that last year because of, I would say, little bit of slowdown in the – after the Thanksgiving and early part of January, I think the lead times have shortened. But what we do see is with the strong second half and, more importantly, with some of the initiatives we've got with more products coming onboard and the Saudi and whatnot, what we expect is our demand on our supplies is going up. And we do anticipate some supply chain constraints and mostly in the Completions segment though. And we just want to get ahead of it, and we did the same thing last year. We took some material bets and we used all of it and more. So, we're using the same strategy coming into 2018. George O’Leary - Tudor, Pickering, Holt & Co. Securities, Inc.: Great. Thanks very much, Prady and Jim.

Thanks, George.

Thanks, George.

Thank you. And our next question will come from the line of Sean Meakim with JPMorgan. Your line is now open.

Hey, good morning.

Hey, Sean.

Morning, Sean.

So, Prady, you talked about – seemed like you're reaching a bottom in the Drilling & Subsea business. Could you maybe talk about the composition of the orders in that segment at this point in the cycle and maybe how we should think about the cadence of improvement in terms of orders that you could see across the business within that that units are drilling versus Davis-Lynch and even ROVs?

Yes. Sure. I think if you look at the Drilling & Subsea segment, the consumable part of the product portfolio, I would say, on the drilling side and also on the subsea side is pretty flattish, with the exception of, in the case of as the drill rigs go up, that's good for us. We expect our consumables to go higher, right? So, that's the base part of the business. What we are seeing now, Sean, is our pipeline on the capital projects on the drilling side is pretty robust. And we expect as early as first quarter for sure, going into the second quarter where some of those things will start materializing, which could lead to a stronger second half for the drilling segment. And in the case of subsea, we are anticipating some big non-oil and gas orders in the first quarter or probably early part of the second quarter, which also positions the subsea business to have like a breakeven EBITDA for the rest of the year. But on the drilling front, I would say we are seeing upgrades, but consumable activity picking up as the rig count goes up, but more importantly the capital equipment pipeline is pretty strong for second half.

And, Sean, I would just add some color there that in the first half of 2017, we saw good orders and deliveries on rig upgrades, these mud pump fluid end packages. So, we did really well on those. They fell off in the second half of the year. We do expect, with some of the announcements from our customers on both new rigs and rig upgrades, to see that pick up again here in the early part of the year. So, there's upside there. We've also not seen as big a recovery, it has started but with our handling tools. The cannibalization of idled rigs has taken much longer than anticipated. And certainly with the offshore activity off, we've not seen the sales that we had historically. I'd say that that could be a good mover for us as handling tools start to pick up during the year. That used to be the bread and butter product for drilling, and we'd like to see that happen again. And then, as Prady listed very well, in the Middle East, there is a lot of rig building activity that's being bid right now, expected to be awarded shortly. We're working with many of those drilling contractors that are expected to win and have our equipment spec-ed into those orders if these drilling contractors are successful. We wouldn't expect to deliver that capital equipment until the second half of the year. And if the orders came too late, of course, the deliveries could fall into 2019, but I'd say that would be a good upside for us if those orders come early enough in the year.

One last point, Sean, is the early part of the discussions in North America with some of our customers is – the day rate today is about $20,000, at $25,000 our (37:45) customers are contemplating about building new rigs, but it's very early stage discussions with some customers in North America.

Got it. Thank you for that detail. That was very helpful. Maybe I could just ask a similar question just thinking about the Production & Infrastructure segment. Book-to-bill is a little bit stronger there, maybe you could just think about the composition of how things are coming in today versus what that could look like as we get through exiting 2018.

Yeah, yeah. In the fourth quarter, the bookings in Production & Infrastructure were low, and let me explain that, part of that is valves is seasonal. We anticipated that. The refineries are usually closed for the maintenance work and whatnot, but those refineries are coming back to work. As a result, we have already seen an uptick in bookings in January and we expect that to continue. In the case of production equipment, we had a very strong quarter in the third quarter of last year, where in this particular case, in the case of production equipment, either third quarter or fourth quarter historically is when customers put the orders for 2018 or the following year. So, in this case, in third quarter, we had a very big quarter on the bookings. Our expectation on production equipment is I think the demand continues to be strong. We will be very picky and choosy of what projects we play because our play there is just not revenue, but also make sure our margins are higher. But in general, I would say Production & Infrastructure is a growth segment – Completions is our biggest growth segment and the second segment of reasonable growth is Production & Infrastructure. And then, in the second half, which is important is the run rate will be higher because our Saudi plant is coming into operation and that's a meaningful contribution for the valves guys. And as I mentioned earlier, there are natural gas infrastructure projects, which we are in the midst of discussions with customers in Northeast and in Gulf Coast. And as those projects materialize, we expect a revenue stream in the second half. So, our second half will be stronger on P&I than the first half, but the market fundamentals for both product lines and for the segment is pretty good.

Great. Thank you very much.

Thank you. And our next question will come from the line of Igor Levi with Morgan Stanley. Your line is now open. Igor Levi - Morgan Stanley & Co. LLC: Good morning, guys.

Morning, Igor. Igor Levi - Morgan Stanley & Co. LLC: I just want to ask a question on pricing, you've mentioned that you would have the opportunity to push pricing higher on select products. Could you elaborate a bit on which products are seeing the most pricing upside and where are you still struggling to push prices higher?

Yeah, yeah. I mean the fourth quarter is a good example, Igor, where our incrementals were high and a big part of that was the pricing which got realized in our Completions segment predominantly and a little bit of pricing in the case of production equipment, but mostly driven by the Completions segment. And on a move forward basis, that is what we would expect to see as there is more pinch between demand and supply, which most likely will happen in the Completions segment. More particularly in the pressure pumping products, we expect to see pricing opportunity. The second lever we've got on pricing is the new products. So, we are coming up with products like a hydraulic latch, which improves the efficiency on the – with the zipper fracs, it improves the efficiency for the customers. We are coming up with a downhole frac plug, which reduces the mill time, and also some of the material which gets stuck come up to the surface. So, customers are willing to pay more price for our premium products and we expect to get pricing leverage there (42:00). And not pricing, but independent from that is a lot of things we have done on the Drilling & Subsea is manage the cost, which has just improved the margins, and we expect the margins in the Drilling & Subsea segment to be better than 2017, not because of price, but because the way we manage cost. Igor Levi - Morgan Stanley & Co. LLC: And just to follow up on the topic of costs, you've previously talked about needing to add shift to your facilities and increasing labor costs. So, would you give us an update on the labor situation?

Great question. I would say in 2017, just not us, I think the whole industry struggled with getting people on board. We have successfully, across all the manufacturing plants, recruited a significant number of people. So, we think we have got a very good critical mass. We also expect to recruit another significant chunk of people in 2018. The difference is, is we can buy some time with higher overtime with the kind of people we have and – which gives us time for us to recruit people, unlike 2017 where in a shop for the five people who were new and we were going to the training process and whatnot. So, we will go through some inefficiencies in 2018, but not as close as we had gone through in 2017. Probably the other point worth mentioning is, there could be some supply chain inflation risk, which we're managing with our suppliers proactively and that's one of the reasons why we've decided to build the inventory to avoid not only the lead time constraints, but also to get ahead of some inflation which could potentially happen. Igor Levi - Morgan Stanley & Co. LLC: Would you be able to clarify where are you seeing the supply chain the tightest?

I would say same, on the same areas where the pressure pumping market for sure. And the second area, I would say, is where we have increased our revenues significantly in the valves business, where we have gone past the historic highs and we are putting more demands on our suppliers. There could be some potential inflation there, which we will manage of – through productivity and passing some of that to our customers, but mostly in Completions. Igor Levi - Morgan Stanley & Co. LLC: Great. That's very helpful. I'll turn it back.

Thank you. And our next question will come from the line of Martin Malloy with Johnson Rice. Your line is now open. Martin W. Malloy - Johnson Rice & Co. LLC: Good morning.

Morning, Marty.

Hey, Marty. Martin W. Malloy - Johnson Rice & Co. LLC: The last several quarters you've talked about the strength that you're seeing in the end markets and, in particular, on the Completions side and given the direction of the pressure pumping horsepower and expected incremental builds this year. And yet your book-to-bill was less than 1 for the fourth quarter and I think I heard you say that you expect it to be about 1 for the first quarter. Can you talk about kind of market share and if you're maintaining your market share, or do you feel like you're possibly losing some?

Yeah. Marty, I think the right way to look at book-to-bill certainly for our Completions segment is, it is – as we said earlier, our book-and-ship business is not a backlog business. So, in a backlog business, you expect to have a high book-to-bill ratio, build backlog and that portends well for revenue. In the case of our Completions business, it's more of a focus on the sequential revenue. Looking at that increase, bookings should track with that and then the delivery comes relatively quickly after the booking is received. So, it's not as high a backlog business as we see in the others, and I would say a book-to-bill ratio that hangs around that 1.0 as long as we're growing is actually healthy for that business. And if it gets much more than that, that means that our – we're having supply chain issues and I would call that bad backlog, and we're having trouble meeting the delivery schedules of our customers because they demand quick deliveries on that equipment.

And on market share, Marty, what I would say is, if you go back to the 2014 and the horsepower and the market share and what it is today, I would say probably either in the first quarter or second quarter of 2018 we'll go past the historic highs of 2014. And our pressure pumping business will have the highest growth in 2018. So, we'll gain significant market share starting second quarter. And as I mentioned, there are few products we are commercializing in the second half of 2017 and the intent of that, and those two new products are incremental to what we have today. Martin W. Malloy - Johnson Rice & Co. LLC: Okay, great. And then, I guess just on the subject of acquisition outlook here, and could you maybe remind us about what you're comfortable with from a net debt to EBITDA standpoint and given the negative free cash flow expected first half of the year, what the outlook is for potential acquisitions?

Yeah, I would say, listen, Marty, the environment for acquisitions in 2018 is very positive. But I'll let Pablo give you some play here.

Okay. Hey, Marty. Look, in terms of acquisitions, I agree with Prady that the market is very good for deals in 2018. The businesses that we're looking at are seeing really good performance. And so, those sellers are willing to come to the table. In terms of liquidity, we do have very strong liquidity at this point, as was mentioned on the call, $300 million or so with the new credit facility, so we are well positioned for acquisitions. In terms of your specific question, I mean, look, we are coming out of a negative EBITDA environment. So, I think our leverage is still high and we will look to work that down below 3 times through 2018, more from a growth in EBITDA. When we look at acquisitions, if you look at our past history, the average size of our deals has been small, right? So, for the small tuck-ins, I think we can continue to do those with cash and without increasing leverage significantly. Those acquisitions these days are now coming in with EBITDA, so they actually can be deleveraging as well. And then for larger deals, I think we can take a more balanced approach, like we did with Global Tubing; in that case, there was equity as part of the consideration, very important there is the focus on accretion, right? So, we don't like our stock price at this point and are protective of it, but to get a deal done that delivers significant accretion, that makes sense to us. Martin W. Malloy - Johnson Rice & Co. LLC: Great. Thank you.

Thanks, Marty.

Thank you. And our next question will come from the line of Chase Mulvehill with Wolfe Research. Your line is now open.

Hey, good morning. I guess a few questions, I guess the first I want to start with incrementals. 4Q EBITDA incrementals adjusted for Global Tubing were a nice 52%. If I look at guidance, kind of eyeballing things, it looks like 1Q guidance assumes about 40% to 50% incrementals. So, I don't know if you maybe want to comment on incrementals going forward into 2Q and into the back half of the year, do you think that 40% to 50% is sustainable as we kind of go throughout the year? Do you think they accelerate? Maybe just some color on incrementals once we get past the first quarter.

Yeah. Great question. I would say – well, first, we are very happy with our incrementals in the fourth quarter. With and without the Global Tubing, our incrementals are very strong. And as we have mentioned, we were expecting our incrementals to be higher coming into the fourth quarter with the pricing and some of the other things we've been talking about all the year last year. Now going into 2018, I think our guidance for the year is 35% to 40% and what you can expect from us is, is there could be some quarters which could be lower and there could be some quarters which could be higher of what you've seen in the fourth quarter. Well, the average of that will be the 35% to 40% for the entire year. The reason for that is, at this point of time, we just don't know when is the next leg of pricing we're going to get in the pressure pumping and when that materializes, obviously the incrementals will be much higher. And the combination also of mix, depending on if there are any capital projects coming into fruition in the second half of the year, depending on what those projects are and the margins will also determine the incrementals for that particular quarter, right? So going into 2018, rather than giving quarter-to-quarter guidance, I think our guidance on incrementals is more 35% to 40% for the entire year. And you can expect some quarters to be higher and some quarters to be lower.

Okay. All right. That's very helpful as we kind of track the margin progression here. And so, kind of maybe a follow-up question on the margin side, what do we need to see to get back to kind of the low-teens margins from an EBITDA standpoint? How much of that is really pricing, how much is that absorption? So, I don't know if maybe you could split that into kind of pricing and absorption to kind of get back to those low-teens EBITDA margins.

Well, I would say the activity is probably the biggest driver of the margins going up. If you look at our margin progression in 2017, there was almost 800 basis points of margin progression, right? So, we're almost at 8.3% of margin. So, as revenue continues to go up, the operating leverage we're going to get out of that will drive the margins higher, pricing on the top. And like in the case of D&S, the way we have managed the cost structure and whatnot to resize the business has also helped us to improve the margins.

Okay.

And the other thing we have done this quarter, Chase, if you look at my script is we have evaluated some of their products, which are non-performing and low margin which we don't see where we need to invest on a move forward basis, and we have exited those products and that helps also the margin. But I would say mostly it's the operating leverage and second being pricing.

Okay. All righty. Appreciate that. One quick follow-up and I apologize if this was asked earlier, but did you talk about lead times on power ends and fluid ends?

Yeah. No, great question. Listen, I would say in the last two months, in the month of December, there was – just because of seasonal and customers managing their budgets and whatnot, we have not stopped our ramp-up process. We are still ramping up our capacity. As a result, the lead times may have come down by one or two months. So, I think probably the lead times right now for a power end could be three to four months. But if they're onesies and twosies or even five power ends, we usually have it in inventory, right? But if someone wants 20 power ends, and if it's not in the manufacturing cycle, then it takes about three to four months. But we do anticipate the lead times to go higher and more supply chain constraints as the year progresses and that's what we want to get ahead of. And in the case of fluid ends, the lead times have become shorter, and, as you know, it's more of an inventory item.

If you think about kind of quotes on power ends, not orders, but quotes, kind of where you are today versus six months ago? Are they higher or lower?

Well, start in the month of January which is typical, because they need to go through the budget process for the power ends. So, I would say second and third quarter of last year was the strongest from a bookings standpoint. But the revenue in the fourth quarter was the strongest for power ends just leaving the door, the amount of power ends. And what we expect is probably the same trend is later part of first quarter and second and third quarter is where we will get the bookings. And right now, the quotation activity is up significantly. We are dealing with several of the customers talking about big chunk of power ends, in some cases, new fleets being built. And in some cases, it's a replacement of the existing fleets. But I would say, end of the quarter, second and third quarter, and then probably a little bit of slowdown in the fourth quarter, which is what we saw in 2017.

Okay. Awesome, Prady. Thank you. I'll turn it back over.

Thank you. And our next question will come from the line of Marc Bianchi with Cowen. Your line is now open. Marc Bianchi - Cowen & Co. LLC: Thank you. From the commentary you guys have offered, it sounds like sort of later in the year, there's an expectation for things to ramp pretty significantly. I think most investors believe that E&Ps as they get through the year, provided commodity prices are still supportive, they are going to ramp their activity and ramp the budgets. Commodity prices have come off here in the last few weeks. I guess my question is, how dependent is your view of the ramp in the second half on overall activity versus just sort of pent-up demand? So, if I think of a flattish rig count or modestly increasing rig count, is that enough for you to have this ramp in the back half?

I will make two points. If you look at our three strong legs or our two segments for growth, they are Completions and Production & Infrastructure. Drilling & Subsea is 20% of our portfolio, right? If the capital projects don't come through in the second half, plausible that the commodity prices continue to go down, and if Middle East customers decide to move things to the right, possible, certainly possible. But on the Completions side and the Production & Infrastructure side, we expect that activity to continue to ramp up. Based on our conversations with our customers, we expect 2 million to 3 million horsepower incremental versus 2017 and half of that will come through replacement and half of that will come through new fleets. And every month the horsepower goes up, it needs consumables, right? So, when you go from 11 million horsepower to 13 million horsepower, you need more consumables. So, on the Completions side, we don't expect to slow down, but we see accelerated growth going into the second half, magnified by products, incremental products which we don't have in the portfolio today, we are commercializing in the second half, which is a meaningful revenue for the Completions segment which adds another leg up. And then, in the case of Production & Infrastructure, as we said, in the second half we have two strong legs than the market activity, which is the Saudi plant coming into operation is meaningful in the second half and the gas infrastructure projects, which we are negotiating with the customers on the Northeast and Gulf Coast, that will come into fruition the second half. So, Completions and P&I, we feel very strong. D&S is a tailwind, how strong a tailwind will be based on commodity prices, international recovery, and the appetite of E&P spend. Marc Bianchi - Cowen & Co. LLC: Okay. That's helpful, Prady. I guess if I just focus on the Completions side and appreciate that some of this stuff might not – it's certainly not necessarily in backlog yet, but what sort of commitment do you have at this point for your fair share of that 2 million to 3 million horsepower, what are those commitments or kind of agreements look like with the customers?

I think we'll get more than our fair share, not – one, because the market is up; second, because our products are better. So, if you look at our power ends, we are the only ones who give two-year warranty and we have a track record in the marketplace where we did not have any cracks yet that – even at the 10,000 hours. As a result, last year we started off thinking we will do x and we did 2x of power ends. And this year we're going to grow up by another significant chunk on the power ends, right? We got a pretty good strong backlog on the truck manifold, which is gaining pretty good traction and we expect that to gain more traction in the second half. So, market is strong and we have got very good products; as a result, we are very confident that we're going to accelerate faster, but more importantly gain market share. Marc Bianchi - Cowen & Co. LLC: Okay.

And the fact that we're also taking inventory bet and building the inventory ahead of the market puts us in an advantageous position, too. Marc Bianchi - Cowen & Co. LLC: Yeah. Got it. Well, impressive performance. Thanks very much.

Thank you. And our last question will come from the line of John Watson with Simmons & Company. Your line is now open. John H. Watson - Simmons & Company International: Thanks for squeezing me in. One quick one for me, Prady, that 35% to 40% EBITDA incremental guidance for 2018, is that pro forma for Global Tubing?

Yeah. So, John, what we're saying is sequentially on the basis of what we have today, the 35% to 40%, so not looking back over – counting on the acquisition for those incrementals, so that's what the guidance means.

Yeah. And Global Tubing is part of the family now. John H. Watson - Simmons & Company International: Okay. 35% to 40% each quarter.

I think the last two quarters we were talking about pro forma and whatnot, but that's part of the family, so on a move forward basis, anything we give on the incrementals will include Global Tubing. John H. Watson - Simmons & Company International: Okay. Great. Thank you for that. And I'll turn it back. Appreciate it.

Well, thank you for your interest in Forum and we look forward to give our progress update in the next earnings call.

Great. Thank you, everyone. Have a good weekend. Goodbye.

Ladies and gentlemen, thank you for your participation on today's conference. This does conclude our program and you may all disconnect. Everybody have a wonderful day.