Dave Storms: So just great to see EBITDA is remaining strong despite the little tick down in revenues here. It looks like you’re kind of doing more with less. Can you kind of talk us through what’s driving that and if any of the stuff that you’ve implemented to be able to maintain those strong margins are sticky going forward.
Ryan Hummer: Yes. Absolutely, Dave. I’ll start on this, and I’ll let Mike chime in with anything that I miss. But I will say that, right, the team across the Board is dedicated to continuous improvement. In our second quarter, I think we noted some facility rationalizations that we had made, both with manufacturing in Mexico and then across our Tracer Diagnostics business. Those are certainly sticky. And then supply chain team that we have, part of a recent reorganization we had was putting our supply chain organization together with our technical services organization. And that started to bear fruit very quickly as well, where the combination of our supply chain is always thinking of ways to value engineer cost out of the way that we do business together with the tech services team who can interact with engineering and think about getting things rapidly prototyped and through field trial, I think, that’s something where we’re going to continue to chase ways to operate more efficiently and preserve and grow gross margin dollars.
There are some other changes that we’ve made across the organization to try to structure things to run a little bit more efficiently and a little bit more lean that really impact the SG&A side and help us to preserve the ability to achieve an adjusted EBITDA. This year through the first nine months, that’s consistent, a little bit better than last year despite the fact that revenue is off. So we’re working with the current market environment where the US rig count troughed maybe a little bit later than we thought it would, where the Canadian activity didn’t come out of breakup quite as strong as we had thought it would but we’ve been able to make sure that we continue to manage and measure costs in a way that we can preserve as much profitability as possible.
And we do think that is sticky to use your phrase, so that when we do pivot back to revenue growth, that will help us with strong incremental margins and help to grow the average margin as we grow the top line.
Mike Morrison: Yes. This is Mike. Great question. Nothing more really further to add other than just SG&A, Ryan, to hit up on that, but just continuing to focus on not growing that, how do we leverage it and how do we strategically reduce that where it makes sense. So that’s a long-term effort, and we’re seeing those benefits.
Dave Storms: That’s incredibly helpful. One more, if I could. You continue to gain traction in the Middle East, you continue to get a foothold there. Can you kind of talk about the bidding environment there may be in comparison to the Canadian market where you’re one of the top players already?
Ryan Hummer: Sure, Dave. So for the Middle East, right, each country is a little bit different where we’ve been focused over the last few years. You’ll have seen some of our commentary in our annual report, we’ve got a long-term contract in Oman for some Tracer Diagnostics work. We’re looking to leverage that to be able to deploy some additional product lines beyond Tracers through that contract. But where we’ve really made headway in the last year or so is with Saudi Aramco. And that is a long process to get qualified in what you call catalog there. And typically, it involves — you provide some equipment essentially for free in a free trial once the equipment works and proves out value proposition for the customer, then you’re invited to be part of a cataloging process where the various asset owners in the region can utilize your equipment, you’re effectively a qualified supplier and then in time, you may be selected to participate in multiyear tenders.
