Mammoth Energy Services Inc (TUSK) 2017 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Mammoth Energy Services' Fourth Quarter and Full Year 2017 Earnings Conference Call. (Operator Instructions) As a reminder, this conference call is being recorded and will be available for replay on Mammoth Energy Services' website.

I would now like to introduce your host for today's conference, Mr. Don Crist, Mammoth Energy Services' Director of Investor Relations. Sir, you may begin.

Thank you, Karen. Good morning, and welcome to Mammoth Energy Services' Fourth Quarter and Full Year 2017 Earnings Conference Call. Joining me on today's call our Arty Straehla, Chief Executive officer; and Mark Layton, Chief Financial Officer.

Before I turn the call over to them, I would like to read our Safe Harbor statement. Some of our comments today may include forward-looking statements, reflecting Mammoth Energy Services' views about future events. These matters involve risks and uncertainties that could cause our actual results to materially differ from our forward-looking statements. These risks are discussed in Mammoth Energy Services' Form 10-K, Forms 10-Q, recent current reports on Form 8-K and other Securities and Exchange Commission filings. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.

Our comments today may also include non-GAAP financial measures. Additional details and reconciliations to the most directly comparable GAAP financial measures are included in our fourth quarter press release, which can be found on our website, along with our updated presentation.

Now I'll turn the call over to Arty.

Thank you, Don, and good morning, everyone. As we reflect on 2017, I want to review what the Mammoth team accomplished. We started the year with 2 frac spreads operating in the Northeast, 1 sand processing facility which was not operating, 4 rigs operating in the Permian and 20 sand-hauling trucks operating in the Utica. Additionally, our other service lines, including directional drilling, coil tubing and flow back were challenged as utilization was low and pricing had not started -- had not yet started to recover.

As we stand today, we have 6 frac spreads operating in 3 separate basins, an infrastructure division with backlog in excess of $500 million, approximately 4 million tons of sand processing capability from 3 separate facilities, 62 sand-hauling trucks, a full rental division in 2 basins and 6 rigs operating in the Permian. We've also seen a significant increase in utilization and pricing in our directional drilling, coil tubing, frac stack and flowback businesses.

Starting with our frac business. Demand remained high in the fourth quarter of 2017, as we continued to expand our customer base, as we rolled our sixth spread in the MidCon area. Our team continues to operate at a high level, and it is showing in both our financial results and in the high grading of the customers we are working for. Leading-edge pricing continues to march higher, but as we've stated in post -- in past conference calls, on a stand-alone basis, it's not quite to the level needed to support new-build economics. We've consistently said that we do not intend to add any additional spreads unless the invested capital exceeds our hurdle -- our return hurdles, and while we are getting closer, we are not there yet.

As you may recall, our prior expansion of new capacity was done with lower equipment prices, given some unique opportunities. The DUC backlog has continued to grow, and we continue to believe that there is still a shortage of pressure pumping horsepower in the market today. This shortage is driven -- has driven -- is driving incremental demand and putting upward pressure on pricing.

As of today, demand for our crews remains strong, with 3 crews in the Northeast, 2 crews in the Mid-Continent and 1 crew in the Permian basin. It is important to point out that the majority of our crews are being supplied for Mammoth sand mines and last-mile logistics we have in place. We feel this integrated approach remains a differentiating factor Mammoth brings to table versus our pure-play peers.

We pumped 1,375 stages in the fourth quarter, with our EBITDA margins coming in at 19%. As winter weather has persisted in early 2018, we have encountered normal weather delays, particularly in the Northeast, which impacted our operations. As in years past, the first quarter is always the most difficult, as the movement of equipment, sand and water impact frac operations and therefore, we expect some operational delays in the first quarter.

Turning to infrastructure. As many of you saw, over the past 3 weeks, we announced the extension of the contract in Puerto Rico from $200 million to approximately $445 million. Once the work of restoring the power is complete, we anticipate a shift to reconstructing the electrical infrastructure on the island to both modernize and provide better protection from future natural disasters. Given our performance to date, during the restoration phase, we are hopeful that we will participate in the rebuilding phase which will occur over the next several years. To date, we have worked in 11 states across the Northeast, Southeast and Midwest portions of the U.S. and in Puerto Rico for private, public, investor-owned and corporate utilities. We remain in discussions with several large customers to expand our operating footprint and build our backlog in all of the operating areas.

Turning to sand. The expansion of our Taylor facility to 1.75 million tons per annum is complete, and the dry plant has been commissioned. We expect to commission and wet plant in the coming weeks and ramp up the capacity of the plant in the second quarter of 2018. At Piranha, we have ordered the necessary equipment to upgrade the dry plant to make it more efficient, increasing the capacity to 1.9 million tons per annum. This expansion is expected to be completed by midyear, increasing Mammoth's total processing capability to 4.4 million tons per annum.

With all 6 pressure pumping fleets operating, we anticipate consuming approximately 2.1 million tons per annum internally. We currently have 3 sand contracts in place, covering approximately 1.3 million tons, 2 of which are 3-year take-or-pay agreements which began during the fourth quarter of 2017.

The third contract is our legacy agreement with Gulfport Energy, which expires in September of 2018.

We sold approximately 600,000 tons of sand during the fourth quarter of 2017, of which 26% was brokered. The average sales price for the sand sold during the fourth quarter of 2017 was $42.99 per ton.

Sand demand and pricing remains strong, with most of our current available capacity sold out for the next 60 days. Current pricing for 40/70 is approximately $51 per ton, with some spot market trades in the mid- to upper 50s per ton.

Our blended fourth quarter production cost came in at approximately $19 a ton, slightly better than our projections. We remain focused on lowering our cost as we expand, and envision a continued decline in our sand production cost per ton towards the mid-teens by mid-2018.

Logistics and last-mile trucking specifically got very tight in 2017, with trucking rates up materially over the past few months and demerge now in place. We expect this market to get even tighter as we move into 2018. This -- the expansion of our last-mile operations during 2017 is returning dividends as we are utilizing our logistics network in all 3 of the basins in which we are pumping today. As we sit today, a majority of our logistic needs are being met through internal sources.

We have experienced management teams in place for all of our operations that possess the ability to run large organizations efficiently and allocate capital wisely for both short- and long-term returns. The expansion we undertook in 2017 was done at attractive entry points and will allow for future investment in our business lines with attractive returns. We remain acquisitive and intend to be a consolidator in the years to come through acquisitions, organic growth and vertical integration to enhance our efficiencies and take advantage of our management's lean manufacturing background.

We currently have approximately 2,100 employees under the Mammoth umbrella, up from 554 at the year-end of 2016.

Let me turn the call over to Mark to take you through the financial performance during the quarter, after which we'll take questions.

Thank you, Arty. I hope that all of you have had a chance to read our press release, so I'll keep my financial comments brief and focused on certain highlights.

Mammoth's revenue during the fourth quarter of 2017 came in at $369 million, up more than 147% from the third quarter of 2017. For the full year, revenue came in at $691 million, up 200% year-over-year.

The expansion of our pressure pumping division, the acquisition and growth of our infrastructure segment, the growth of our internal sand production, improved equipment utilization and improved pricing for our services all contributed to the higher revenue compared to the prior periods.

Net income for the fourth quarter of 2017 came in at $66 million, which is an improvement when compared to the third quarter of 2017 loss of $800,000. For the full year of 2017, net income was $59 million. On a per-share basis, net income was $1.48 during the fourth quarter of 2017 as compared to a loss per share of $0.02 during the third quarter of 2017. For the full year of 2017, net income came in at $1.42 per share as compared to a loss of $2.94 per share during 2016.

Adjusted EBITDA for the fourth quarter of 2017 came in at $110 million, up approximately 294% from the third quarter of 2017. Our corporate adjusted EBITDA margin was 30% during the fourth quarter as compared to 19% in the third quarter of 2017. For the full year of 2017, EBITDA came in at $165 million, an improvement of 302% from 2016. We remain confident that our corporate EBITDA margins will remain in the 20% to 30% range throughout 2018, but will ultimately be dependent on the duration of work in Puerto Rico.

Selling, general and administrative expenses came in at $27 million in the fourth quarter of 2017, up from $8 million in the third quarter of 2017. For the full year of 2017, SG&A expenses came in at $50 million. Growth across all of our operating segments and an increase in total employee count to nearly 2,000 employees contributed to the increase in total SG&A expense as compared to prior periods.

SG&A expenses, as a percentage of total revenue, came in at 7% in the fourth quarter of 2017, compared to 5% during the third quarter of 2017. For the full year of 2017, SG&A expenses were 7% of total revenue, down from 7.8% for the full year of 2016.

Going forward, we expect SG&A to grow on a nominal basis as we continue to grow, but remain in a range of 4% to 6% of total revenues, which we feel compares favorably versus our peer group.

As it relates to infrastructure, our operations in Puerto Rico performed quite well and accelerated throughout the period, bringing forward more work and corresponding revenues than originally anticipated. Starting on January 1, 2018, we lowered our daily billable rate by 6% to 8%, which will lower our blended EBITDA margin in Puerto Rico, going forward.

CapEx during the fourth quarter of 2017 was approximately $44 million, the majority of which was related to the expansion of our infrastructure subsidiary and for the expansion of the Taylor facility.

For the full year of 2017, we spent a total of $146 million, in-line with our forecast of $143 million.

Looking forward to 2018, we anticipate spending approximately $125 million in CapEx. The majority of our 2018 spending is expected to be directed to growth in our infrastructure business, upgrading our Piranha facility, expanding our rental business into the Mid-Continent and adding selective equipment.

At year-end, our borrowing base was $170 million with net debt of approximately $94 million. Net debt at year-end was comprised of approximately $100 million drawn on our revolver, offset by cash on hand of approximately $6 million, resulting in liquidity of approximately $63 million net of letters of credit.

As of February 21, 2018, our net debt was approximately $68 million, compared to approximately $95 million drawn on our revolver and approximately $27 million of cash on hand.

Based on our current CapEx budget and cash flow outlook, we anticipate fully repaying our outstanding debt during the first half of 2018.

We thank our shareholders for their support and look forward to a strong 2018.

This concludes our prepared remarks. Thank you for your time and attention. We will now open the call for questions.

(Operator Instructions) Our first question comes from the line of Tommy Moll with Stephens.

So starting off on sand. Sounds like spot is pretty robust and assuming that remains the case, is it fair to expect that your average selling price is going to continue to tick up, as we go through the quarters this year?

Yes, Tommy. We expect a slight uptick during the first half of the year. Obviously, we expect that to be around specific grades, specifically 40/70 on 100 mesh pricing in the back half of the year. We view that as contingent upon the growth of the regional sands, primarily in West Texas.

Okay, great. And then moving on to infrastructure. Once you perform the remainder of the extended contract and get to the total $445 million in Puerto Rico, what's a reasonable timeframe for investors to get an update on what the go-forward might look like there? I know you mentioned that there's at least potential for not months or quarters, but years of work. And granted, we won't have great visibility on to what the total scope looks like, but just, when should we expect the next update from you?

Well, Tommy. What typically happens in this type of situation is you go from restoration to reconstruction. And certainly, we have been a very big part of the restoration efforts. We have approximately 939 men on the island right now. We have a variety of equipment. Certainly, with our contacts, and what we're -- what we are actually doing, and the way our team has gone out and executed, we think we have an opportunity to be there for years. But it's a process that you go through. It's RFP process, and as those occur and certainly, there's no certainty. But we think that -- we think restoration is still going to last a while longer. As you've seen in many articles, it's not completed yet of getting the power on completely before you go to that reconstruction phase, but we anticipate being there a while, and as we get material information, we will pass it on to our investors. But I do want to tell you that one of the things that is mentioned in the call and everything previously was that we have over $500 million of backlog in total, in our infrastructure business. And we have grown our footprint significantly in north -- in the continental United States. Our team is executing at a very high level on many, many fronts.

Yes. Well, just following on your backlog comment. Looking at the dates when I would expect you're performing the work in Puerto Rico, is it fair to assume that most of that $0.5 billion in backlog is actually work here in the lower 48? And then if you could give us any insight into how many crews you're running now, and what -- where you think you top out in the lower 48, and what a run rate type of margin might look like there?

Yes. The backlog is actually -- you're correct in your assumptions that you said. We're approximately at $75 million in backlog in Puerto Rico with the remainder of it being the -- between $425 million and $450 million in continental United States. So we're very proud of that growth that has gone on with our team, and their -- obviously, their execution capability is very strong.

Arty. One more for me and then I'll turn it back. If we step back here and just look at the progress you've made since the IPO, there's been a very aggressive value-creation strategy. Early on, you put capital to work, acquiring discounted assets and pressure pumping and sand. More recently, you've put capital to work and infrastructure, turning a pretty nominal capital investment, all things considered, into more than $0.5 billion of backlog. If we step back, how would you characterize the overarching strategy here? What's the common theme, or what are the common themes? And then given where we are in the cycle, what do you think we should expect for the next phase of capital allocation?

Well, Tommy, we said this many times with our investors and in our conferences and all that. We view ourselves as capital allocators. We focus on return on invested capital. We look at a multitude of deals. We've looked -- at last year, in 2017, we looked at 135 discrete deals. We ended up doing 6 of them. And as you said, the return on that invested capital is extremely strong, extremely high. We'll continue to operate that way. We right now have about 30 different discrete acquisitions that we're looking at. We're also looking at -- always looking at organic growth. That was our story from the IPO forward to that, we would grow organically, and we would grow from M&A. And we view ourselves as a consolidator. Especially with the balance sheet that is going to be extremely pristine in -- as we go forward. But you're right, we are totally consumed with the return on investor -- return on invested capital and making sure that we get the best return possible.

And just one last comment to that is, we talked about our CapEx in the plan, and we've got about $125 million of CapEx that we've identified, so far, and gotten approval for 2018. But that number is likely to change, as we go forward, and we see opportunities to put our money to work with the best returns.

And our next question comes from the line of Praveen Narra with Raymond James.

In terms of the backlog in the Gulf, it's very impressive in terms of how much of a U.S. presence you guys have built. Can you talk about how long that average duration of the U.S. backlog is? And if you could talk about the kind of the competitive dynamics you see in the bidding for this infrastructure work has been, and what your contract win rate has looked like as you've gone after these bids?

Well, let me answer your first question first. And it's a 3-year backlog. Typically, that's the length of times that you do your contracts with the IOUs and with our customer base. So it -- that's over the next 3-year period that we will do that. The infrastructure, we -- when we entered this business, and we started talking about it, we talked about the infrastructure in general, where we thought there would literally be billions if not trillions of dollars associated with infrastructure improvement in the United States. That's one of the things that we looked towards as we went down these business lines. So we thought it was the right place to be and the right place to put our money. And we think we've got the right team. We've got a management team with a lot of experience and that have done, really, a magnificent job.

So I guess, when you're going after some of these contracts and opportunities, are you winning the majority of the bids you're putting out there? Is it -- obviously, they're doing a great job in terms of [garnering] these awards. Is it that you guys are gaining that brand image in the marketplace, because of how successful it's been so far?

We go after a lot of different customers. And certainly, with the utilities, it's hard to describe what the win rate would be as we go in those. But we expect that backlog to grow significantly over the next few months and next few years.

Yes. I'll expand on that a little bit. It boils down to execution, and the team has done a very good job of executing. So we're winning a fair amount of the bids that we put out.

Okay. Okay, great. And then just expanding on the prior question, in terms of the M&A opportunities that you guys look at, could you give us a sense -- and then obviously specifics can be spared, but can you give us a sense of whether you're looking in the same type of business lines that Mammoth's currently in, or whether we should expect the number of business lines to expand in breadth as well?

Well, we look at the opportunities to put capital to work and that brings us the best returns, which means that we are always looking at a variety of different areas. We look within our same space, but we also look outside. If we see good opportunities outside of that -- again, we're capital allocators, and we look for the best return on investment.

And our next question comes from the line of Jason Wangler with Imperial Capital.

Wanted to quickly ask a couple more on the infrastructure side, and Mark, you kind of hit on it with the contract in Puerto Rico, but the margins there have been fantastic. As you maybe look at Puerto Rico versus the lower 48, what do you see the margin -- the differences in those margins and the 2 types of work there?

As you pointed out, Jason, storm work is obviously a little bit higher margined. In the lower 48, the "traditional work and infrastructure" segment, we view that in the range of 15% to 18% on a steady-state basis.

But let me make a comment, real quick, Praveen, about the hurricane work. And the island was -- and still has not fully recovered and still has additional work to be done. But it is one of those types of situations where it became a very compressed timeframe for us. We put additional resources and work together because of the devastation. And let me make another point, because it is a very tough environment that Puerto Rico works in. As I've said a few times, about 60% of the power generation is on the south side of the island, and the majority of the uses is in the northeast quadrant. And you have to go across mountains, you have to go across forest. You don't go the normal right of ways where all the power structure is along roads and that type of thing. We've had to build roads and -- but one of the things that Mammoth does is that we have a history of working in tough environments.

Okay. So one other point about the lower 48 work, to revert to it. You obviously have seen our background and our affinity towards vertical integration. In the infrastructure business, we look at that similar to other service lines where we would look to vertically integrate and thus increase our margins in that segment.

No, I appreciate that. It's impressive what you guys are doing. And then Mark, if I could, could you just give me the updated cash and debt position? And then as you think about, obviously, massaging the accounts receivable and payable throughout the year, is that -- sounds like you said you were thinking about being debt-free by the end of the second quarter; just as you're seeing how that progress of payments is going.

Yes. So we're seeing steady payments. Obviously, increased receivables across all segments at the end of Q4. But the current net debt position is approximately $68 million.

I would add very quickly that we actually expect the first quarter to be better than the fourth quarter.

Our next question comes from the line of Daniel Burke with Johnson Rice.

Arty, just where you left off there, you expect Q1 better than Q4. Was that addressed to overall company EBITDA, or did I misunderstand what you were referring to?

No, it's overall. We think it will -- the first quarter will be better than the fourth.

Okay, that's helpful. Maybe one on the oilfield services side then. Arty you addressed that you'll see some operational delays here in Q1 that'll be weather related. Lot of queries on the rail side in the last week or 2. You guys kind of see it from both ends, the sand and then the pumping side. Any comments on what you're seeing there, and maybe what type of sand volumes we can look for from your mines in Q1?

We expect a quarter-over-quarter increase in the volume of sand. We have seen a few operational delays in relation to the railroads. Obviously, the first quarter is the most difficult quarter of the year given the weather conditions, and we've seen some of that impact. But the team is executing well with the 6 fleets we have. And we -- as I said earlier, we expect that quarter-over-quarter increase in volume on sand sales.

Daniel, one of the things I would add to that is, our vertical operation -- our vertical integration model helps us tremendously. And as you know, 2.1 million tons of the -- our 4.4 million ton capability goes to us internally. But it also gives us stability, when times do get rough like they are in the first quarter, to continue to service our group. Because we not only have it -- we have our own internal sand mines. We do the logistics for our sand, and we also truck it the last-mile. And that has been a helpful model through, very, very tough times.

Got it. And Mark, one point of clarification. quarter-over-quarter increase in volume of sand, you mean, equity sand, it's not really incumbent on broker volume, is that fair?

That's correct. We always source our sand internally first, and we broker opportunistically.

Okay, great. And then -- so maybe, as a last one. Just an update on -- again, stay on the oilfield side here as we've done a lot of infrastructure. The Permian presence you've established now in the pumping market, talk maybe a little bit about how that's gone to date, and whether you see the allocation of fleets you have presently is likely to stick at least for the next couple of quarters, or whether there could be some further shifts.

Well, as we've stated, we started pumping operations in the Permian. The Permian's the most active basin in the world. We wanted to be a part of it. We wanted customers to lead us in. We've done that, and we expect to expand further in that area. It -- and part of it is a strategic aspect of getting a little bit away from the natural gas markets and moving more towards oil. But always having a customer to lead us in and be a part of that. We feel very good about our presence in the Permian.

And our next question comes from the line of John Daniels, Simmons.

I guess a quick follow-up. The -- on the last question. As you look forward to the next several quarters, are there any plans to relocate any of the frac equipment from the basins? Or you stay put and grow from there?

John, we look at that opportunistically. Obviously, the equipment is mobile and, as Arty mentioned earlier, we've made a conscious move to move more towards oil. So we'll move the equipment where we have the highest returns. We had a customer lead us into West Texas, and we would expect to further evaluate that.

All right. Safe to say, you've got active request to do that now?

That's correct.

Arty, you mentioned last year looking at, if I wrote it down correctly, 135 deals. How does...

Yes.

How does deal flow look this year, and sort of, where do you see the most opportunities presenting themselves?

We see a lot of deal flow. And it's one of those where we constantly are looking at it. We've got 30 active right now, which would imply a run rate that will probably be higher than last year. We think that there also present some opportunities in the infrastructure business as well that we hadn't really been that much a part of last year. We think that there's some opportunities within that to do some things as well. So we think it's going to be a better year for looking at acquisitions and we're very selective. It's got to have the right return.

If you step back and think about some of the opportunities you have -- and obviously, I know can't say what they are. But last year, a narrative that we were hearing from lots of folks was that expectations from sellers was too high. I mean, I guess everybody thinks they're worth more than they really are. But do you see that same level of expectations today? Are people more reasonable? Just some thoughts on that would be appreciated.

John, it's -- some of the deals that we are seeing are the second time around. And certainly, the public markets are not open for everybody, and I think that's become clearer as time has gone on. So we are seeing some opportunities that are coming back with a more reasonable approach. And it's not so much the hockey stick effect that we've seen in the past.

Okay. Final one for me, and this can be my dummy question for the day. I may be a little bit dumb, but you mentioned the -- how you go through the RFP process in Puerto Rico. Can you speak to just what the competitive landscape is for people bidding against you down there? And then just talk about whether that process is more complicated or less than what you do in the States.

Yes, it's not -- it's always a competitive-type approach to do it. And it -- you may've seen the Wall Street Journal article this morning where Fluor is exiting the island. Fluor worked for the Army Corps of Engineers, we work for PREPA. And we were the one that, early on, went in and started working for PREPA, and I think it's paid huge dividends for us. So you have some competitors that are exiting, you'll have other competitors that'll want to come in and take part in it. Remember that as you go from restoration to reconstruction, the reconstruction process can go on for years. And I -- the point that I usually make is that super storm Sandy that occurred in 2012 timeframe, they are still doing reconstruction in New York that is FEMA backed to this day. So it could go on for 5 to 6 years. And the Puerto Rican infrastructure was in very poor shape. They had a bankrupt group that was running it, being PREPA, and they just didn't have the money to keep their infrastructure up to the common aspects and the common standards and the newer technology. So we think that it'll -- it has an opportunity to go on for several years. And we think with the execution of our team, and what they've done, we will have a -- and the amount of people that we have there and the amount of equipment we have there, we will have a competitive advantage to get some of that work.

(Operator Instructions) Our next question comes from the line of James Wicklund with Crédit Suisse.

Can you hear me?

Yes, you're breaking a little bit.

(inaudible) As noted, a big step-up in the maintenance CapEx in 2018, probably (inaudible) products on this earning season. Can you guys talk about the kind of inflation you're seeing, and you're paying (inaudible)

Jim, you broke up so badly, could not understand the question. I'm sorry.

Operator, we'll just go to the next question.

All right. Our next question comes from the line of [Terry Zacher] with Tudor Pickering and Holt.

You talked about frac pricing not being at a level yet to justify new-build economics. Could you frame how big that delta is today, and whether you think that gap will close in the near term, such that, we might see -- order new equipment over the next, let's say, couple of quarters?

Yes, as we evaluate the market right now, we think that the per-stage pricing needs to increase 10% to 15%. So we're not too far away from new-build economics, but not at the point yet where we're willing to place that order. We think that the shortage of horsepower that we see in the market will likely get us to new-build economics, but we're not there yet.

Okay, great. And then secondarily, maybe more of a high-level one. It's clear that 3 sort of primary or core segments, moving forward, are infrastructure, pressure pumping and sand. And so I guess my second question is, as we think about the whole TUSK portfolio going forward, how did -- within the existing portfolio, how did the other couple of segments or several service lines -- I'm thinking about drilling and the other oil services segments -- how do those fit in to the whole portfolio over the next 12-plus months?

Well, certainly, they're positive cash generators. They -- because rigs are not an area where we're going to focus our investment. And it's -- it comes back to November 1, 2014, we had 1,930 rigs running in the U.S. We went down to a low of 404 in May of '16. And then we've come back up to where we're at the 975. But even the most optimistic say we're going to a level of 1,100 to 1,200. And it's still a very, very competitive market out there. So that's not going to be a huge investment area. But we'll pick our investments. If we see something where -- or if we have some customers lead us in, we'll look at those investments.

I think, to expand on Arty's comments, we're seeing some selective investments in the other service lines that meet our return hurdles. And we'll continue to invest where we see opportunistic investments.

We still like the organic growth when possible, if the return is there, and the pricing is there.

And that concludes our question-and-answer session for today. I'd like to turn the floor back to Arty for any closing comments.

Thank you very much. We want to thank everyone for dialing in today, during this very busy time. I want to personally thank all of our team. Without the hard work performed by each of you, Mammoth would not be what it is today. 2017 was a very busy year, and together, we executed our growth plans. As we look to 2018, we anticipate building on our recent success. We look forward to speaking with you again in early May, when we release our first quarter earnings. This concludes our fourth quarter conference call. Have a great day.

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program, and you may now disconnect. Everyone, have a great day.