Expro Group Holdings NV (XPRO) 2014 Q2 法說會逐字稿

Good morning. My name is Christie, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Frank's International Second-Quarter Earnings Call.

(Operator Instructions)

Thank you. I will now turn the call over to Thomas Dunavant. Please go ahead.

Good morning, everyone, and welcome to Frank's International's conference call to discuss second-quarter earnings. I am Thomas Dunavant, Manager of Finance and Investor Relations. Joining me on our call are Keith Mosing, Chairman, President, and Chief Executive Officer; John Walker Executive Vice President of Operations; and John Sinders, Executive Vice President of Administration and Interim CFO.

Keith will begin today's call with general highlights. John Walker will provide an overview of our operations. Then John Sinders will provide a review of results and outlook, Keith will then provide some closing comments.

Before we begin commenting on second-quarter results, there are a few legal items that we would like to cover. First, remarks and answers to questions by Company representatives on today's call may refer to or contain forward-looking statements. Such remarks or answers are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements.

Such statements speak only as of today's date or, if different, as of the date specified. The Company assumes no responsibility to update any forward-looking statement as of any future date. The has Company issued, in its SEC filings, cautionary language identifying important factors that could cause actual results to be materially different from those set forth in any forward-looking statements. A more complete discussion of these risks is included in the Company's SEC filings, which may be accessed on the SEC's website or on our website at www.franksinternational.com.

Also, you may access both the second-quarter earnings press release and a replay of this call on our website. Please note that any non-GAAP financial measures discussed during this call are defined and reconciled to the most directly comparable GAAP financial measures in the Second-Quarter 2014 Earnings Release, which was issued by the Company yesterday, and it's available on our website.

I will now turn the call over to Keith for his comments.

Thank you, Thomas.

Looking at the second-quarter, our results were mixed. Our continued strong growth in international services and a recovery in our US land business was offset by weaknesses in our tubular sales and rig related delays in the Gulf of Mexico.

The good news, is that we believe our US land base business has stopped declining. We have had sequential growth in May and June, and anticipate sequential growth for the rest of the year.

Internationally, we were awarded several key contracts in Q2, including in West Africa and the Middle East. Across the globe, our customers continue to rely on Frank's to provide their tubular services for the most demanding projects.

In the second-quarter, we continued to be selected by your customers to provide service to them around the world. As an example, we were able to mobilize in West Africa for a customer with only three weeks notice. A competitor advised the customer that they did not have the right technology to provide efficient services on a new generation rig.

Frank's, as the Company came together to mobilize and successfully provide the tubular running services. This short-notice mobilization provided us another opportunity to showcase our people and services. This type of customer-centric activity happens around the world at Frank's every day.

Shortly, John Sinders will provide details of our 2014 expectations. But I want to let you know that I am excited about the opportunities we are pursuing, and have secured for 2015 and 2016.

Lastly, I am pleased to announce that we have doubled our quarterly dividend to $0.15 per share. Our tremendous free cash flow positions us to return cash to our shareholders, while continuing to pursue growth opportunities globally. Both organically, and through acquisitions.

I will now turn the call over to John Walker and John Sinders for their comments before providing my closing comments.

Thank you, Keith.

While our results for the quarter were mixed, we have a number of reasons to be optimistic about the future. We continue to be positive about our growth prospects in the international market.

In the second quarter, we were awarded two new contracts in Angola. This work is for exploration campaigns of pre-salt blocks with two large independents.

One contract is for 18 months, while the other is for 24 months. These contracts show the operators are continuing to place trust in Frank's expertise, and the challenging pre-salt wells within the region. This also positions Frank's well for the probable development activity associated with the exploration campaigns.

Elsewhere around the world, we've had several key contract wins in Australia, Western Canada, and the Caspian Sea. In the Middle East, I'm happy to announce that we continued to increase our opportunities in the region, and have been awarded integrated project contracts with two global service companies. This will position us well to grow both on and offshore in the Middle East going forward.

In the Gulf of Mexico, we continued to win contracts for work through 2014 and into 2015. One of these contracts were recently won with an existing customer, and includes activity on potentially four drillships and a spar platform. The terms of this contract covers work for three years.

There are currently 40 floating rigs working in the Gulf of Mexico. We have witnessed continued delays and unscheduled maintenance, along with delays in new rigs entering the region, which was not in our initial guidance. However, given the opportunity we have, we still believe we will grow at least 10% for the year.

We believe our US land business has bottomed, and we have sequential improvements in May and June, which gives us encouragement for the second half of the year. Unfortunately, the slow start to the year and the slow pace of our growth has hampered our outlook for 2014.

We now expect revenue to decline 10%, versus the previous expectation of 5% decline. We have changed our strategy during the first half of 2014, and adjusted our pricing and margin expectation. As well as committed to increased capitol expenditures to deliver revenue growth within the market.

We now expect this business to deliver high 20% to 30% EBITDA margins, versus the previous target of 35% EBITDA margin. Our results for this quarter show the success of this revised strategy.

Lastly, our tubular sales quarterly results continued to be impacted by the timing of customer projects. Our deferred revenue increased $7.2 million for the first-quarter, to $69 million as of June 30th.

We continued to work with our customers to deliver their pipe, and reduce our deferred revenue balance. From a balance sheet perspective, we have implemented new inventory controls, which include senior management approval for new pipe and connector orders to ensure we reduce current inventory levels as quickly as possible.

Turning now to our business segment results. Our international services revenue for external sales increased 7% year over year, and 9% sequentially to $129 million.

West Africa, Europe, Latin America, and the Middle East and Canada all had sequential growth. Year over year, revenue growth was driven by West Africa, Europe, Canada, and the Middle East.

Adjusted EBITDA margin for international services in the second-quarter was 38% of external sales. The EBITDA margin were negatively impacted by increased labor and mobilization costs, and the timing of the associated revenue. The increase in mobilization costs is related to positioning of equipment for upcoming projects.

Moving to US services. Revenue for external sales increased 2% sequentially, and was down 9% year over year to $106 million.

Within our US services segment, our Gulf of Mexico business unit declined 2% sequentially, and 6% year over year. Year over year results for the Gulf of Mexico were negatively impacted by strong results in the second-quarter of 2013, after the region was shut down in the first-quarter of 2013 due to lower marine riser bolts issues.

As mentioned previously, we believe the land portion of our US business has bottomed. Revenue for the second-quarter increased 9% sequentially to $39 million.

Year over year results were down 14%. Adjusted EBITDA margin for the US services in the second-quarter was 43% for external sales.

Lastly, tubular sales revenue for external sales in the second-quarter was $38 million. This was down 10% sequentially, and 33% year over year.

While we continue to believe there are growth opportunities for it this segment, quarterly results and period over period comparisons are greatly impacted by the timing of deliveries to customers. Adjusted EBITDA margin for the tubular sales in the second-quarter was 25% of external sales.

With that, let me turn it over to John Sinders to review our financial results for the quarter and outlook for the year.

Thank you, John.

On our CFO search, we continue to look for a candidate that will provide public company experience, and are committed to finding an excellent candidate quickly. We'd like to thank Mark Margavio for his years of service to the Company, and Mark has agreed to stay on board to assist with the transition to a new CFO.

Second, I'm pleased to announce that we have doubled our dividend. The Board of Supervisory Directors declared a dividend of $0.15 per common share per quarter, subject to applicable Dutch withholding taxes for the record date of August 29th with payment on September 19th.

As we looked at our pre-cash flow generation, along with our CapEx needs and acquisition opportunities, we decided to increase the amount of capital we return to shareholders. We have always maintained that if we cannot find ideally suited acquisitions, we would rather return cash to our shareholders. Our expectation is to maintain this dividend, and we will consider special dividends or increases as warranted.

We believe that this dividend can be maintained out of pre-cash flow. We continue to evaluate acquisition opportunities, both large and small, and we expect to find any acquisitions with cash on hand or external financing, if necessary.

Before I begin with an overview of our second-quarter results, I want to discuss an additional expense recognized in the quarter. We recognized the acceleration of share-based compensation expense related to restricted stock units, granted at time of the IPO.

Initially, these RSUs were amortized on the same schedules they're vesting. But after implementing new controls of our own [regranting] and expensing of our issues, the expense recognition has been accelerated due to certain retirement provisions. This is has resulted in an $8 million out of period non-cash expense, and $3 million of additional in-period non-cash expense compared to our previous expectations.

Total share-based compensation expense for the quarter was $15.3 million, or $0.07 per diluted share. For the remainder of the year, we expect between $8.5 million and $9 million in share-based compensation expense per quarter, as compared to our previous guidance of $5 million. Amortization of this expense will steadily decrease during 2015.

Note that overall share-based compensation expense has not changed. These one-time RSUs were granted in connection with our IPO. Ongoing share-based compensation be will be significantly less.

Now turning to our results for the second-quarter. The total revenue for the quarter was $273 million, a 3% increase sequentially and a 7% decline year over year. Net income for the second-quarter was $50 million, with net income attribute to Frank's International NV of $35 million or $0.23 per share.

Diluted net income, which (technical difficulty) million an assumed tax impact of conversion of preferred shares was $47 million, also $0.23 per diluted share. The comparison of net income and EPS to the prior year is not representative, as the Company was private in the second-quarter of 2013. A full reconciliation of our EPS calculations is included in our press release.

Turning to EBITDA, our adjusted EBITDA for the quarter was $103 million, or 38% of revenue. On June 30th, we had $444 million in cash, and essentially no debt on our balance sheet. Our CapEx spending for the first half of 2014 was $78 million.

Due to the delays in building of new facilities and less spending on rental equipment, we've decreased our expectation for 2014. We now expect CapEx for the year to be approximately $190 million, versus our original budget of $250 million.

We are also adjusting our guidance slightly from our previous expectations. We continue to expect both our international service segment and the offshore portion of our US services segment to grow at least 10% for the full year. This growth is [partly] in line with the growth in the rig count.

We also continue to expect tubular sales to grow revenues at 4%. However, we now expect the on shore portion of our US segment to be down 10% year over year. As John Walker mentioned, we had sequential improvement in quarter two, and have confidence that our revised strategy will drive improvement throughout the rest of the year.

Lastly, we expect total Company adjusted EBITDA margin to be between 37% and 39%. This is a decrease from our previous expectation is due to increased expenses and lower margin expectations for our US land business. For the third-quarter, we expect our revenue to be between $270 million and $280 million.

I'll now turn the call back over to Keith for some final comments, before we open up the call to Q&A.

Thank you, John.

As we approach the one-year mark of being a public company, I am very pleased with the progress that we have made. And I am very optimistic about the direction we are heading as a public company.

Frank's has continued to add a lot of new talent, who are complimenting our already top-notch team. All of us together are working hard every day to make Frank's a stronger Company.

We are innovating and designing new equipment, finding ways to provide better service to our customers. And we are improving our reporting to provide more transparency to our investors. All of this is what makes Frank's the great Company that it is today.

Thank you for your continued interest and support. We will now open up the call to your questions.

(Operator Instructions)

Your first question comes from Ian MacPherson of Simmons.

Good morning, Ian.

Ian, your line is open. Your next question comes from Daniel Burke of Johnson Rice.

Good morning.

Good morning, Daniel.

Hey, Daniel.

With regard to the top-line guidance, could we -- could you address perhaps a little bit the outlook into Q4? I guess a portion of that uptick looks to be likely the tubular services business.

But it seems like the US business, the US offshore business, back loads into Q4. Is that based upon current visibility? How do we think about that?

Yes, it is based on current visibility. We're looking at five more rigs coming into the Gulf of Mexico in Q3 and Q4, and we have -- we're well positioned on those rigs. And remember, the work we do offshore, it comes in sizable lumps.

So it does have a meaningful impact. So we're anticipating favorable results, favorable improvements in the third-quarter, but more importantly in the fourth-quarter. Clearly, also on the tubular sales side, we've been working on our deferred revenue issue, our bill and hold issue, and we're close to coming to a solution that's going to allow us working with our client to begin to recognize some of that revenue.

Okay. That's helpful.

And then John Sinders, it sounded like in your comments on the adjustment to the margin guide, that that essentially reflects the reality of the first half results and a lower baseline for US land. But I guess I just wanted to get comments on the outlook for margins on the international side of the business.

They've drifted lower potentially in Q2 for good reason looking forward. But can that still be a mid 40% business?

Sure. Good morning, Daniel. This is John Walker. Absolutely.

We continue to be optimistic on the international business. We're well diversified from our location basis, and it's business as usual. When you see the compression in Q2 there from an EBITDA perspective, that's simply a timing issue, as I mentioned earlier in the call, related to mobilization and freight charges.

The associated costs are based on longer-term contracts. As you're aware, international tends to enter into for our business longer-term contracts, and we stay reasonably optimistic that we're going to be in the 40%, around the 40% EBITDA margin.

That being said, remember we manage the Company on a long-term basis. And we're looking well into 2015, and putting G&A into the Company right now from a headcount basis is the more long-term outlook that will allow us to continue to grow. As we diversify, not just from the location, but from the sector basis.

So the deep-water sector basis, as we move into the jack-up side of the business, I think it was mentioned earlier in the week that there was a significant amount of new jack-ups coming out in 2014 moving into 2015. 60, I think this year, 59 un-contracted. Well this will give us an opportunity to have further penetration in that market, because currently our penetration is in the teens. So there's absolutely no reason that we can't have further penetration in that market going forward.

Daniel, when you look at our different geographies internationally, our EBITDA margins haven't deteriorated. So it's not reflecting pricing pressure. What you're seeing, as John said, is we are ramping up for expected expansion in several new and existing geographic areas, and also for growth in different asset classes.

So, inevitably when that happens, you're going to have the incurrence of expenses before you have the recognition of revenue. And again, we don't try to manage for hitting a certain EBITDA margin on an aggregate basis. We manage each business to be as profitable as possible, and to hit return guidelines on each business. And so, therefore, you're going to have, when we're in a high growth mode, you're going to have some front loading of expenses.

Okay. That's helpful.

So to summarize what I think I heard both of you all say, the international business still presents the opportunity to reach mid 40% margins. But in the interim here, as you load for the opportunity set, something closer to a 40% level is what we're more likely to see. Is that a fair way to synthesize that?

I would say, yes, summarize, yes. I would agree with that. I would say we're managing for the longer term. So I agree with that.

Thanks for the comments. I appreciate it.

Thank you.

Thank you. Your next question is coming from Jim Wicklund of Credit Suisse.

Good morning.

Morning, Jim.

I understand managing for the longer term, but I'm just curious. The mode charges, you increased revenues in international by $11 million, and EBITDA went down by a couple of million. Where are these projects mobilizing? And looking at your revenue guidance, I guess those revenues based on that mobilization, don't kick in until sometime next year?

Well, it's a combination. So the initial expense that you're seeing in the early part of the quarter was related to West Africa. West Africa and a part of East Africa. So we have long-term contracts in that part of the world.

As far as Asia PAC is concerned, we had some mobilization fees there, but we also have embarked upon additional G&A related to headcount. So it's a combination of headcount and mobilization fees.

So, as John alluded to earlier, we are focusing our efforts into a slightly different sector which has not been the primary focus to this point and being the jack-up business. That's not losing our focus on our primary technology set, but we're gearing up for our future growth and it obviously takes headcount to do that, and G&A.

Jim, the guidance, we're being conservative. We don't want to be in a position of having to revise guidance again. And so what we've done is we've picked a conservative number that we're very comfortable we can live within.

And it's going to be driven largely by what type of expenses we incur as we get new contracts in different international regions, and what type of expenses we incur as we grow domestically. We don't have a crystal ball going forward on exactly what that will be. So that's why we came in and lowered the guidance on the overall EBITDA margins.

Well, I appreciate the conservative nature, John, but you all have missed four quarters in a row. So the street is wondering when the conservative guidance actually is guidance that gets hit.

And I look at your G&A. And I understand, John, you're talking about gearing up, especially in Asia, for jack-ups. But you've got a $12 million, $13 million sequential increase in G&A. Is that all people?

It's $10.5 million is the RSUs.

Okay. What should we expect the RSUs total to be in 2015?

2015 it will start off at around $9 million, and trend down to $2 million by the fourth-quarter. A run rate RSU amount for normal compensation, after we've amortized the IPO bonuses, should be around $4 million a quarter.

Okay. From $9 million to $2 million through next year, and then $4 million a quarter from then on?

Yes. And two -- as some of our new awards come out at year end, my guess would be an expectation is it would be higher than $2 million.

$2 million would be what you would see remaining from the IPO. So I would think for the quarter, you'd probably be closer to $4 million or $5 million in an aggregate amount.

Okay. John, you went through a litany of places globally where business sequentially picked up in the second-quarter. Were there any geographic regions or any specific areas where you saw business revenues at least decline?

Yes, at Latin America. If you look at what we've talked about from the beginning of the year, and there's optimism around the world's Eastern hemisphere. We put a business plan and strategy together for the US land. But sticking with international, Latin America has been disappointing for us to this point for the first half of the year.

We've had declines, substantial declines, in Brazil for a large independent or integrated suspended operations, and moved their rigs actually to the Gulf of Mexico. By the way, we secured that business when it moved. But you can imagine the transit time from moving those rigs from Brazil into the Gulf.

Pedevesa, we continue to work at reduced levels with Pedevesa in line with the payment terms. So that's had a resultant factor in it. But the optimism of Latin America going forward, we just secured and we're actual operating it right now an independent offshore Colombia. That's the first in the deep water.

We just secured for an international and large independent in Brazil, a three-year contract that's just starting for us. So to summarize, in Latin America, we see Latin America's second half increasing around about 40% over what the first half is. But the first half has no doubt been disappointing.

And I think if we summarized the overall results, between tubular sales, deferred revenue, we see Latin America being down on a year-over-year basis. And the decline in the early part of the US land has offset all the optimistic growth that we had in the rest of the business.

But that said, we have a business plan for each segment of it. And the Company will continue to be more efficient, and we will penetrate the business at higher levels going forward. I am very sure of that.

John, that's helpful. If I could ask one final question.

On US onshore, you talk about realigning assets, business has starting to pick up, margins are going to be lower than expected. Have we decided to go after market share and revenue growth, rather than protect price and margin? Is that the strategy shift that's causing the US to see revenue increase, but margins slide a little bit?

The strategy on that one, Jim, is that our focus was in the deep-water arena. No doubt about it. And we somewhat lost our focus on the US land.

And when we appointed the new leader in Q1, then we got a business development team in place, and consolidated four business units to one. We have over two dozen locations around the US. And we talked about efficiency drivers within utilization of asset, which is now happening, that would be simplistically locations that would be operating, because they didn't have asset, but there would be surface asset elsewhere.

So the efficiency drivers have been done there. Headcount also has been consolidated. So we have had some relaxation on pricing, and that was a strategy. We decided to penetrate more of the market.

For example, the Permian Basin, we have a very small portion of that market. And we have a huge opportunity to penetrate that market, and we've identified five key targets in the US. We have a business strategy that we're going to implement. Again, I'm very confident that it will happen on a go-forward basis.

The thing is, it's just going to take time. Q2, early Q2, is when the strategy started rolling out. If you can see, sequentially May and June, month-over-month was growth. And I see no reason why we don't continue down that path going forward.

Okay, John, thank you very much.

Thanks, Jim.

Thanks, Jim.

Thank you. Your next question comes from Jeff Tillery of Tudor, Pickering, Holt.

Hello, good morning.

Morning.

Morning.

On the revenue progression, just to make sure I understand the moving parts Q3 into Q4, it would seem like we're looking at double-digit revenue growth sequentially in the fourth-quarter. It sounds like there's contributors from all three major segments.

So Gulf of Mexico rigs being added. Latin America improving internationally, and then some of the deferred revenues from tubulars going forward. Am I thinking about the pieces all right in terms of driving that sort of magnitude of increase?

I think particularly on the Gulf of Mexico, on the tubulars. There is pickup -- we do have pickup also in Latin America. But particularly, those two are what we're looking for.

But we also think, and we haven't really included it, we're going to continue to have some pickup in land. It's not going to offset the declines in the first part of the year fully. But it's definitely going to start to show some pickup, too.

That's helpful, John. Thank you.

On the CapEx, full-year CapEx reduction, of the $60 million change, about how much is facilities versus tools? And furthermore, are we seeing this flat spot in the global deep-water market? Is that reflected in the lower CapEx number, or is this some Company specific issues driving it?

It's $50 million facilities, $10 million tools. And the tools breaks down into two ways. We're going to be adding some equipment in the US onshore, and then around the world we actually have better efficiency.

One of the things we've been working on as a Company is to increase our utilization of our existing asset base. And we're starting to see the benefits of that. So that decline in CapEx on equipment of around $20 million for the year reflects better utilization of existing equipment.

We'll add ten back in probably in the US onshore. So that will be a net decline on $10 million on rental equipment, and a decline in $50 million on facilities. And that's more of a deferral. It's taking time to get some of the permitting and other things we need in some parts of the world, particularly the United States, to grow out our facilities.

Good. All right. Thank you very much.

Thank you. Your next question comes from Ian Macpherson of Simmons.

Hello. Thanks. I'm sorry. My mute button betrayed me on the first try.

With regard to the new strategy for onshore, how do you think that might impact your revenue mix for the US business going forward? You've been at 35% to 36% of domestic revenues from land in the first half. Do you foresee the growth opportunity in the Permian and elsewhere with your more aggressive strategy taking that mix materially higher, or as land outgrows deep-water Gulf of Mexico?

No. It certainly won't outgrow -- from a percentage-wise, yes it could. But from an absolute number, it won't outgrow. But, Ian, it's all more on the consolidation of the revenue mix globally, because the tubular sales, obviously, are slightly well, a lower margin relative to their services site internationally and US-based.

So I would say from a forward-looking basis, it would be consistent with what has been guided to this point. It's just with the US business offshore has been flat to this point, as you know, because of rigs. And then also, the new rigs coming into the market have endured operational issues related to some weather. Some to do with currents offshore, and some to do with just system integration testing as they actually drill the first one or two holes. We see that the efficiencies will improve in the Gulf over time.

Regarding the US land business, again, it goes back to utilization of asset, headcount and equipment asset. And optimism in that portion of the business. So I would just say for guidance purposes, as we previously guided.

Okay. Thanks.

We're optimist on the US land, and it's a tremendous opportunity. But we're in the early days of John's implementation of our strategy. And we're seeing promising results, but it's too early to really guide you in a more meaningful fashion.

Fair enough. And, John Sinders, can I also just ask you to, just as a follow-up on the RSUs, can you give us the total G&A guidance for the next two, three quarters? Including the additional step-up?

24% of revenue.

Okay. And that would apply through Q1, and then ramping down after Q1 of 2015?

That's correct.

And then, lastly, on the CapEx, you said $50 million of the revision was for facilities. Is that canceled, or pushed into next year?

Pushed into next year.

Pushed into next year, yes, for sure.

Got it. Thank you.

Thanks, Ian.

(Operator Instructions)

Your next question comes from Angie Sedita of UBS.

Good morning.

Morning, Angie.

Well, on the high-spec jack-up markets, what is your confidence there that you could gain or grow your market share to the same level as what you have in the deep-water? What would be the challenges, and can you achieve the same market share that you have in the deep-water, or do you want to?

It's very possible. For example, I think as you mentioned earlier on in the week, the 64 new jack-ups coming out with 59 being unspecified. The new jack-ups are similar, the higher capacity ones are similar in design to the six-gen and essential automation within the jack-up.

And that allows us a differentiator from a technology basis with cassette style of equipment, the WiFi technology, et cetera, et cetera. So there's absolutely an ability to penetrate. And of course we have a global platform. So, there's certainly no barriers to entry technically. There's no barriers to entry logistically.

The headcount, which we've talked we've benched about from a G&A earlier, that's something we have to embrace and we are embracing it. It's just going to take some time, because we've had a significant amount of growth pre-IPO, and we had single digit growth last year.

But the jack-up market is definitely a market for penetration. And I think, talked about this earlier, about in the North Sea we secured two long-term contracts out in the Norwegian sector for two large independents, and they're long-term contracts. Three-years plus two one-year options, and that's on that high-spec jack-ups.

So, we've focused on going for the high-end potion of the business on jack-ups. But as we saturate through that, and we've still got some room for movement there, then we'll move into the different sectors.

Okay. And then is the Middle East award also on the offshore high-spec jack-up market, as well? I think you talked about onshore and offshore there.

Yes. We've had success through integrated project management scopes. With the two largest IPM companies out there in the quarter. We secured business offshore and onshore for them.

So I'm actually heading over to the Middle East in two weeks, and I'm going to be looking at that model in a lot more detail. There's -- the Middle East has got a lot of opportunity for us in 2015.

And then, John Walker, as you think about 2015, very early, but if you think about 2015 and what we're seeing in the deep-water markets. Fairly sluggish, and delays, and slowing of at least near-term, intermediate-term demand. Do you thin the -- and so, to me that would lead me to believe that revenue growth in 2015 year-over-year is on deep-water very likely high-single digits for you. Do you think the growth and the entry into the jack-up market, Southeast Asia, et cetera, could be enough to keep you in a double-digit revenue growth for next year?

As you say, it's a little bit early to say from a specific double-digit perspective. We're assessing what the early indications of the budgets for the IOCs are. And as you're aware, a lot of the CapEx has been refocused to quicker liquidity type projects, which would be the jack-ups and then which would be the land portion of the business.

And we're very aware of it, and we're embracing that portion of it. But to answer your question, it's just a little bit too early to say. But I certainly wouldn't be negative on it. It's all optimistic. Growth to this point, yes, means single digits post IPO. But there's -- we're well positioned. It's just a matter of time.

Finally, and I'll turn it over, as I know you had expected or hoped to have essentially some growth maybe going into completions, which you have limited exposure there as well as some growth potentially on the tubular sales. And maybe you can talk to that as well.

Sure. From a completion -- as I mentioned in the last call, our portfolio, about a third of our patents actually are related to the completion sector of the business. And just this first half of the year, we've actually had 15 new patents globally issued, and we've also applied for 34 new patents. So reiterating the technology play that we're continuing to develop technology in the sector, and the completion side of the business, as the deep-water moves the subsea conduits into the completion phase, we should benefit on the up side there.

And the play that we talked about in the Middle East, was a continuation, an extension of the Aziri play from a large independent there, which was completion business. And that was a unique technology that I've talked about several times. It's completely differentiating zero market in technology for installation of the conduit.

Thanks. I'll turn it over.

Thanks, Angie.

Thank you. At this time, there are no further questions. I will turn the call back over to Keith Mosing for any closing remarks.

I want to thank everybody for tuning in and calling today. I think John Walker and John Sinders just covered some of the things that we were talking about in good detail. The thing I want to stress is, not only are we trying to be more efficient in our business, not only are we trying to expand, and do all the things that -- we try to take care of the customer every day.

All the things that go on in the background, these new patents that John Walker just talked about. We're constantly building and giving back to the industry, serving the industry. These are the kind of things that we're not just taking, but we're giving back. And I'm very, very pleased. Very pleased with all the management. I'm very pleased with everything we're doing. It's been one year. I think we've learned a lot. We've become more efficient.

And I just want to thank everybody for their support. And we're going to do everything we can to continue to grow as much as we can. If you look at it, and it's kind of interesting. We're sitting here with a strong balance sheet, a lot of money in the bank. And we're just waiting and searching for opportunities to expand through the M&A side also. And so that's very important that we're poised, we're able to move. It's just when the time is right, we're going to react. And so again, I want to thank everybody for their support.

Thank you. This does conclude today's conference call. You may now disconnect.