Murray Mullen - CEO Stephen Clark - CFO Richard Maloney - Senior Vice President Joanna Scott - VP Corporate Services

Suneel Manhas - RBC Jon Morrison - CIBC

Good day everyone and welcome to Mullen Group's quarterly conference call. We will be discussing our yearend financial and operating performance for the fiscal 2016 as well as our fourth quarter results.

This will be followed by an update on the near-term outlook as we see it. But before I commence the review, I'll remind you that our presentation does contain forward-looking statements that are based upon current expectations and are subject to a number of uncertainties and risks, and actual results may differ materially.

Further information identifying these risks, uncertainties and assumptions can be found in the disclosure documents which are filed on SEDAR and at www.mullen-group.com. So with me this morning I have Stephen Clark our CFO, Richard Maloney, Senior Vice President; and Joanna Scott, Corporate Secretary and VP of Corporate Services.

This morning Stephen will review the financial and operating results of the Mullen Group for the fourth quarter as well as for year '16, after which I'll provide an outlook for our organization, discuss some of my near-term expectations for both the oil and natural gas industry and the overall economy, following which we'll close with the with Q&A session. So before I turn the call over to Stephen, I have a few opening comments again.

Do you know it was only a few weeks ago since our last conference call and our news release and such I really don’t have anything to add so I'll keep my comments to minimum? But I will touch on a few of the highlights after Stephens's presentation.

Most of us, to be honest are quite happy to close the books on 2016, it’s a year that was defined by the meltdown in the oil and gas prices in the early part of the year, which really took its tool on producers and service providers alike. In fact, last year has been compared to one of the most difficult and challenging times in decades, something that I can attest to.

But the industry survived, companies and the people that worked so diligently and passionately in the oil and gas industry to make sure consumers have access to reliable supply of natural gas to heat their homes of gasoline to fuel their beloved vehicles and of a multitude of other derivative products of crude oil we have persevered. It was not without pain and sacrifice, but the industry survived.

At Mullen we witnessed the coinage first hand, seeing our revenue and profitability declined significantly as demand collapsed. We oversaw the loss of over 550 good hardworking people in 2016 an over 1,500 since 2015, and that's through no fault of their own.

These are but few of the highlights or should I more actively say, the lowlights that will define our 2016. In terms of the fourth quarter there are two trends that I'll highlight.

Firstly, demand remained our primary issue. We saw ample evidence of that overall Canadian economy virtually stagnated in terms of GDP.

Trucking and logistics demand was noticeably softer as it relates to capital investment activity, infrastructure development and the movement of capital goods. And since the oil sands pipelines, mining, et cetera is such an integral component, a good segment of the economy, the rational for the lack of demand associated with the movement of capital goods is fairly obvious.

Nothing we have seen as it yet even comes close to replacing the lost economic activity in Alberta and other parts of Canada. The consumer part of the GDP equation however, remains very robust.

As such we didn’t witness any real demand loss from this sector, but pricing was still pretty competitive. Even the revenue from acquisitions of $10 million only mitigated an otherwise very challenging quarter.

And drilling activity was virtually flat year over year. The bottom line is that demand was very soft across most of the business units.

As a result, our fourth quarter revenues came in at $257.8 million which is down from last year's 287. But last year was still at a reasonable amount and you got to remember there was still a reasonable amount of oil sands and infrastructure project related activity in Western Canada, so that's the business we really lost here in the fourth quarter of 2016.

But perhaps another way to look at our revenue base is to compare it to the last few quarters and from this perspective on a sequential basis revenue over the last four quarters has remained remarkably consistent and generally in line with our thesis that the markets we serve are just not robust enough to generate any incremental demand. This held true for virtually all of 2016.

The second trend I will highlight relates to pricing. Generally speaking, the lack of demand has created a demand-supply imbalance which continued to put pressure on pricing across the majority of the markets we serve.

Personally, I believe this situation is beginning to reverse, but the reality is that in the fourth quarter pricing was border line ridiculous in many markets, which is why we refused to engage in some of the business. Here at Mullen, we do not go to work to lose money, we operate safely, efficiently and professionally, but we will not take on business at ridiculous prices just to maintain market share, we will leave this to our competitors.

Taking all this into account, I must say I'm very pleased with our business units, collectively they generated adjusted for foreign exchange OBITDA of -- and I hate that word, but it's OBITDA, of 40.2 million versus 49.3 million in '15, a decline of 9.1 million or 18.5%. In terms of the margins, we still generated a very respectable 15.6% of revenue versus 17.1.

Not where I'd like it, it's not where we have been, but I can tell you our business units did an outstanding job given the challenging market conditions. The discipline they implemented in their businesses will serve them and Mullen very well when demand starts to improve.

I'll provide my comments on this topic shortly. Stephen, I'm now going to turn over to you to talk about some of the details for both fourth quarter full year and then I'll recap our 2017 outlook, so over to you Stephen.

Thank you, Murray and good morning to all shareholders. With respect to our financial and operating results for the year ended December 31st 2016 and the fourth quarter of 2016 our February 8 news release and our annual financial review which consists of our MD&A and our audited financial statements contain the details to fully explain our performance.

I will focus my comments this morning on some of the highlights. We'll start this morning by reviewing our performance for 2016.

On the revenue, front revenue was just over $1 billion, a decrease of approximately $179 million as compared to 2015. The majority of this decrease was related to the declined revenue in the oil field services segment.

This decrease was partially offset by the incremental revenue of $18.3 million related to a series of smaller acquisitions which I will refer to as the truckload acquisition. The oil field services segment contributed approximately 34% of our pre-consolidated revenue or approximately $351 million, which was a 30% year-over-year decrease.

This was after experiencing a 42% decline in 2015. Segment revenue was the lowest in 11 years, a telling sign that the oil and gas sector was just brutal, especially considering the number of acquisitions we completed over the past 11 years.

Virtually all our 15 business units in this segment experienced very challenging market conditions. Categorized by slowing demand for services and intense pricing pressures.

The stand out in this regard was primarily [ph] the pipeline, though that had a great year because of the timing of certain large diameter pipeline projects, but this did not carry over to the fourth quarter. More specific details of the revenue declines by business line can be found on Page 27 of our financial report.

For the year, the trucking logistic generated approximately 66% of our consolidated revenue. This segments revenue decrease by approximately 25 million or 3.5% to approximately $619 million as compared to $615 million in 2015.

This decrease is primarily due to decreased demand for most freight services in Western Canada, Alberta in particular and lowest fuel surcharge revenue, which decreased by $9.2 million. I will point out that the fuel surcharge revenue was designed to simply protects us against fuel fluctuations and is not designed for profit.

But these decreases were partially offset by incremental revenue related to the truckload acquisitions, as well as revenue generated by the Kleysen Group due to an increased demand for its transload services related to the Suncor Fort Hills development, which is now complete. Our operating income before depreciation and amortization or OIBDA was $181 million, a decrease of $48.4 million or 21.1%.

Operating income prior to foreign exchange gains and losses recognized within the corporate office, or what we’ve referred to as OIBDA adjusted was $184.4 million, a decrease of $29.2 million or 13.7%, as compared to $213.6 million in 2015. Stated as a percentage of consolidated revenue, OIBDA adjusted margin decrease to -- sorry, increased to 17.8% as compared to 17.6% in 2015.

This slight increase is a testament to our business model and is a more accurate representation of our operating performance. Net income for 2016 was $52 million or $0.52 a share an increase of $0.37 a share, as compared to $0.15 generated in 2015.

This increase was mainly attributable to the $45.5 million positive variance in net unrealized foreign exchange, a $21.1 million positive variance in the fair value of investments, and we paid a little bit less taxes of $10.3 million decrease in income tax expense and a $9 million decrease in depreciation and amortization. These increases were partially offset by the decline in OIBDA.

Now touching briefly on our fourth quarter results, our consolidated revenue was approximately $258 million, a decrease of about $30 million or 10% as compared to 2015. This decrease in consolidated revenue was primarily attributed to the $25.3 million decline in revenue in the oilfield services segment, as well as a $4.5 million decline in the Trucking Logistic segment.

Both segments were negatively impacted by challenging market conditions, reduced demand for services, most notably in Western Canada, lower year-over-year fuel surcharge revenue, accompanied by our strategy to de-market unprofitable business. The revenue achieved was fairly consistent with the third quarter.

On a sequential basis revenue in 2015 compared to -- fourth quarter comparing to third quarter fell by 5%. This year on a sequential basis, we were largely flat.

And I would tell you that today I the first quarter, the recovery is more entrenched today than it was early on in the fourth quarter. Let me give you a couple of quick stats on the Western Canadian sedimentary basin.

MeterRigs [ph] was down 14% in October, the rig count was down an average of 8% in October and November, wells drilled in Alberta and BC, our primary operations were down 11% in total for the quarter. In fact, December was the first month in just over two years that the rig count was above prior year levels.

Given that context being flat on a sequential basis is not only understandable but somewhat remarkable. As for OIBDA we experienced a year-over-year decrease of approximately $10 million leaving us at approximately $43 million of OIBDA for the quarter.

On the margin front we saw operating margin decline to 16.5% largely due to the continued competitive pricing environment and the completion of certain projects excluding the effects of foreign exchange OIBDA was $42.2 million or 15.6% of revenue. This reflects the tough pricing environment and the lack of demand growth.

I would also mention that on a sequential basis our S&A expenses excluding foreign exchange was largely flat at $32.4 million as compared to $32.8 million in the third quarter. However, we added three businesses during the quarter that incurred $1.1 million of incremental S&A expenses.

So again, we are managing costs appropriately, but the market maintained slow in the fourth quarter with a turnaround in oil field activity really starting to occur in December. From a balance sheet perspective, we closed the year with $270.3 million of cash of which $81 million was denominated in U.S.

currency. Certainly, a portion of this cash will be used to repay our Series E and Series F notes that mature in September of this year.

This strong cash position even after allowing for the repayment of the debt, along with our $75 million of undrawn credit facility gives us lot of liquidity or what I would call options or flexibility. So with that Murray, I'll pass the conference back to you.

Thanks Steph. So before I recap the prospects for 2017, I'd like to share with you a comment I made late last year -- early last year at this exact same time.

And as you know I suggested that 2016 would be a challenge, primarily due to the chaos in the oil and gas industry. I also suggested that the industry would recover, when I thought two things would happen, one of two things.

When the Saudis proclaimed the war to be over, or when market forces simply work their way through the system and adjusted the supply demand imbalance in terms of oil and natural gas. On this issue, it appears both scenarios have or are happening.

Explaining in a large part why oil and natural gas prices have recovered from their lows of early 2016. So where are we today?

Well what are the opportunities I see for Mullen? As I mentioned earlier we dedicated our whole December '15, '16 conference call to this topic, so as such today I will simply highlight the most relevant talking points.

Firstly, I really like the shape of our balance sheet, we have over $270 million in cash and I think that speaks for itself. Secondly, the structure of our diversified business model means that we generate free cash even during the most challenging of times.

We did so in 2016, and in 2017 I indicated we would generate in excess of $50 million once again. And that our business model was designed to optimize free cash, not just to generate EBITDA, OBIDA.

For 2017 as I've articulated for some time, now I am optimistic, probably more optimistic than I have been for quite a while for our organization and that we can once again return to growth after two years of steady declines. And here is my rationale.

Firstly, let's talk about the oil and gas sector. This part of the economy is in a recovery mode.

Drilling activity for example is already up 50% in January, over the same time last year. Will this trend continue for the balance of 2017?

I'm not exactly sure, but clearly the prospects are much better than when we entered 2016. In terms of the overall economy, we still hold the view that the Canadian economy will continue to grow and that it'll be modest, but it’s going to grow.

More importantly, based upon the recovery in the oil and gas sector it appears that the Alberta economy is gaining some of its momentum back. So when you have an increased capital investment by the oil and gas industry, increased spending and drilling activity, that will be good for the Alberta economy, that's good for jobs.

And we're starting to see that already in 2017. Furthermore, we see supply tightening as the competition reduces capacity and this is simply because they do not make any money.

We see this everywhere. We take a look at a lot of acquisition opportunities and I can tell you what we look at is, is not very pretty from their perspective.

So there's no way they're adding capacity, eventually the supply and demand balance comes into the equation and when that happens then you have -- you get some pricing leverage. Another reason why we simply see supply tightening is, any truck driver that's entering the U.S.

later this year, I think it's in about December of 2017, you must adhere to the new electronic on board log requirements and there is no way that every small carrier can comply with the technical requirements that are required and associated with electronic logs. So as I reiterate, any tightening in supply accompanied by any increase in demand will be positive for pricing and this is our expectation that this will happen as the year unfolds.

Now the third thing I talked about, and I'll just reiterate, is our balance sheet. And that relates to acquisitions.

We have a large deal flow that we take a look at, but as I've mentioned and discussed earlier we don't do acquisition just to grow, we'll make sure that they're strategic to our business and we have the cash to do it. We'll look at acquisitions from three perspectives, we'll look at tuck-ins, we’ve already done four last year, we just completed another small one here February 1st with [indiscernible] carrier.

Those are designed to help our existing business units grow their business, we have great management teams and we want to help them with their growth profiles. The second one would be independent businesses that are of the size and a scale that they would fit into our group Canada Transport that we did in late 2016 is a perfect example of that.

And we'll take a look at adding those into our portfolio. And the third one would be transformational transactions, those will be big in nature and would be very-very strategic for the long term for our shareholders.

So we have a well-defined acquisition strategy that's been what has defined Mullen over the years and we're going to be active on the acquisition fronts in 2017 and we think that will help accelerate our growth. The last one we're looking at, in terms of growth, we're really working on kind of the newest thing which is really the -- our technology front.

We’re spending some time and effort, we’ve already revamped our Moveitonline, which is something we started back some 15 years ago, but put it on hold if you will. But in the advent of mobility and the ubiquitous nature of where the Internet is at and connecting the shipper with truckers.

We’ve reinstituted our Moveitonline, we think that that’s going to be something that will help accelerate the growth of our existing business units and perhaps allow us, if we get it right, to go into other new market. So that’s an exciting part that we’re working at here.

We think it will help us accelerate growth in the future. The worst cast for us is, it helps our existing business units solidify their market position and grow.

And the real advent is, you don’t have to buy the assets to be able to service the customer and that’s what technology is designs to do. So we have a lot of work to ad and we acknowledge that, but I can tell, it’s a focus of ours.

And I’m absolutely intent on making sure that we get that part right this time and we use it to our advantage. Learned a lot of last lessons the last time we implemented this, and I’m really looking for to what our team can develop here and are providing that guidance to make sure we’re doing that in the most effective way that we can.

So those are the highlights that we’ve got as to why we think we can grow this year. We can get out of the two years of downturn.

They are still challenges in the market and I don’t want anyone to think, that this, just because we said these are the trends that are happening, that it happens all on January 1st. We said and our thesis says, that these trends will start to emerge throughout 2017.

And at the end of the year, we think that we will be in a better position than we have been for some time and clearly than in 2016. So with those comments and the summary of our 2017 business plan and capital budget I’m going to now turn it over to the Q&A session and we would be glad to answer any questions in terms of last year’s performance, the fourth quarter or in terms of our growth initiatives for 2017.

Thank you.

Hello. This is Suneel Manhas on behalf of Walter Spracklin.

Good morning.

Thanks for taking the question. Good morning.

So, you’ve mentioned pricing is starting to reverse here. Outside of your Western Canadian markets, can you talk about how pricing conditions are and how you see that evolving in Q1?

I think, I’ve said. First of all, I think the negative pricing pressure is over.

There is no more to give on the pricing front. The whole market has figured that out.

Our view is across most of Canada they're pricing at variable costs, which is not sustainable. And that’s our thesis as to why supply will eventually tighten, it’s only a matter of time when you do that.

So we already saw it in the oil patch, anything to do that space went to variable costs, sometimes variable costs, what we saw some of our competitors doing. But we saw that really happen that this -- it started happening earlier in ’16, but really, saw the full affect by the end of the fourth quarter.

I don’t see any more pricing pressure. So therefore, the next move is probably going to be, pricing will start to normalize and there is some pricing pressure in the marketplace for labor, for fuel, taxes are going up, et cetera, et cetera.

So I see that changing in 2017, right across the whole country, as we get any demand lift whatsoever. It's happened on January 1 because somebody sent over a memo?

No that’s not the way it works but my thesis is that those pressures will ease as the year unfolds.

And sticking on that, the talk about price reversing and so far this quarter seeing the pickup in rig activity, in terms of the timeline for recovery, how does that impact your timeline for a late 2000 recovery? Is that still in the cards and what should we be focusing on?

I think what we've had is a nice rebound in the first quarter, that we're seeing already. And once again nobody sent out a memo in December saying get ready, it's going to be busy and nothing.

In January, we're going to move the rig -- the drilling rig count up. It just kind of happens.

So you are left with trying to adapt to it. Most service providers probably were stuck with some pricing from last year.

It clearly is not indicative of rig count that has doubled. So you probably got more business, but maybe didn’t get the pricing leverage.

And as I said, if your priced at variable cost, getting more business doesn’t really help you. So I think as the year unfolds, the pricing will normalize again because if the rig activity stays up, it's up in the first quarter.

We've got some pricing leverage, but not to levels that we think that it should be, and I think most service providers would say the same thing. But clearly the trend is for more stability in '17 vis-à-vis '16.

And to what degree? Look, that's going to depend on what happens with commodity prices for the balance of the year.

That will depend on the cash flows that are only gas companies and our customers have. But so far, starting out of the gate, drilling activity is up 50%.

Capital investment in big long lead projects, no that hasn’t taken place yet. So it's just basically on the spending funds and the drilling activity.

That’s the early indication. And then we have got the big projects that are in -- announcements that have come out in terms of pipelines, that have been sanctioned by the government and those kind of things, but you got to move beyond words to action.

And that’s what creates jobs and that what creates demand.

And just last one here for me. Has there been potential a border adjusted tax from the U.S.

that could potentially impact cross border traffic? How much of your TL business could be impacted by first tax [ph]?

Anything we say is just a guess. I think we just have to let this play itself out.

We're not [indiscernible]. We think the market place will adjust and there will be winners and losers whenever there is, change but I'm not particularly concerned about that.

We\re not really involved in the auto sector, which is where a lot of this is going to be focused on. We don’t participate in that.

We just don’t see any margin in that business. So we don’t really chase it.

But in terms of the others -- we import a lot of goods from the United States. There are the manufacturing.

It's really not Canada. So we'll have to see how it plays out.

I'm not particularly worried. I am really more concerned about whether there's going to be economic activity and then I'll just let the markets figure themselves out from a tax perspective and those kind of things.

You got tax, you got Canadian dollar, you got dollar issues, you've got competitive issues. It’s just another little issue that we have to deal with.

Morning all. On the trucking logistic side, you saw a decent sequential revenue uptick in contractor revenue while revenue on Mullen's own trucks declined a little bit.

Is that a function of you growing your focus to find solution for lowest possible weight, lowest possible cost weight to move a load, independent of whether you're using a Mullen truck or not.

I wouldn't say that that was a trend that accelerated in the fourth quarter Jon. I just think it was lack of business and you know -- and from that perspective.

It wasn't anything that we deliberately said let's park some trucks and let drivers go. That's not the case.

We have a big portion of our business that's conducted by subcontractors or as we refer to them as the Uber drivers. They've got a truck and they've got a driver and they need a load and we give them -- we sell to them what we don't need for our company equipment.

We just -- it was a tough quarter and we’ve been saying all throughout the whole year, the economy is not growing. It's tough.

I think all of the issues that conspired at the end of all that happened in Alberta and just the lack of spending by the oil and gas business, finally caught up to the whole economy to be honest with you, and put tremendous pressure on pricing. And as I've said we deliberately said we're not taking that so.

Once you take it you can't get out. So sometimes you just have to be disciplined and that was our approach in the fourth quarter.

Not just on a trucking logistics side. That was also on the oil patch, we had customers trying to get us to lock into year pricing in December.

We said you got to shake your head, forget it. That's not happening because we saw the marketplace tightening very quickly.

It's fair to assume though that we shouldn’t just extrapolate that there's a growing shift towards using contractors in an accelerating rate or anything like that.

I think what you'll see is that to the extent that once we start growing, and we can accelerate growth and get more business back, it'll have to be done with subs, not with company equipment because we'll only invest in the company equipment to the extent that we think there's a long term secular trend that's coming in to the economy that says we can make money by buying the asset. We'll have to watch that to see how it works.

You buy when you just can't get the subs anymore to provide service. Tut that's a long ways off.

Jon, I would add that you know in the fourth quarter in '16 compared to '15 [indiscernible], was due in that Suncourt Fort Hills, and whatever we're doing complex logistics, these projects, we're coordinating a lot of that transportation with sub-contractors and that didn't occur in '16 but it did in '15.

Okay, fair enough.

That had a small effect as well.

Stephen on the trucking side, fuel represented a larger cost on both the year over year and sequential basis in terms of absolute dollars, but you highlighted fuel surcharges going down year-over-year. Pardon my ignorance but what would drive that?

Sorry, what?

What would cause fuel surcharges to go down but your total fuel costs are going up.

Yes, so fuel surcharges for the year went down. For the quarter we were pretty much flat, and that's really tracking two oil prices, you know -- diesel is a derivative of oil as you know.

You would see for the trucking logistic segment again for the year, that as a percentage of revenue it went down, also. So we went -- our fuel surcharge went down for the year by $9 million, but our fuel expense also went down for the year.

And as a percentage of revenue, it used to be about 10%. Now it’s about 9.2% for the year.

Okay.

Jon, the other thing is you always have a lag. Price goes up, then fuel adjusts during the quarter -- fuel surcharge adjusts during the quarter.

So there is always that at least three-month lag. So as fuel prices continue to rise, diesel prices has -- as the price of crude oil goes up, which it did in the last half of the year, we’re always behind the curve with pricing.

Can you talk about the magnitude of the fall-off that you saw in the oil sands related activity they had in the quarter Q4 over Q3? I know you guys reference it being a headwind.

Can you give any sort of a magnitude of how big of a headwind it was on a sequential basis?

On a sequential basis?

Yes.

I guess on a sequential basis, we always have this downturn because of the Canadian Dewatering. They don’t move a lot of water in December as they do in the third quarter.

But year-over-year, when we think about oil sands and infrastructures, we grew -- from our financial statement, the biggest decline was really on a sequential basis and on a year-over-year basis was premium pipeline, that infrastructure related to oil sands, and pipeline activity just fell off in the fourth quarter ’16.

Okay.

And I think what Jon is referring to -- Jon are you referring to kind of [indiscernible] how much it fell off and how much of that four deals.

Yes. Exactly, so I mean the Canadian Dewatering, I realized seasonally it happens -- sometimes not always, but seasonally it happens.

I guess the question is I thought that it would be more of a hit from a 2017 perspective than maybe it was in Q4. That was all.

I think we were -- we've been alerting people, say look, when you’re building these projects out, most of the transportation requirements are all about upfront. And most of that is done now.

All the heavy lifting and all the big movements, that’s all completed now, it’s all up there. So now they’re just piecing together, just Lego up there now.

It doesn’t require as much trucking and logistic services. So I don’t have the exact number, but that was a headwind and that’s going to be -- anything to do with the development of the oil sands is a definite headwind to this economy on a go forward basis.

Those capital dollars are declining. Now what's there to replace it?

We think that drilling activity is going to replace some of that decline. Maybe the government's going to spend some money on some infrastructure projects, but I can tell you, all the talk that we heard about infrastructure, we didn’t see shovels and boots on the ground.

I can tell you that right now. So I think it’s going to be -- that will be the one drag on the economy that is difficult for us to quantify to be honest with you.

The oil sands is not the most -- is not the biggest part of our business. But instead of being -- talking about as a positive last year, I can't talk about is a positive right now.

There will be little projects going on and there will be day-to-day work going on. But not the build-out of the big projects.

You've got Horizon coming down. You’ve got Fort Hills coming down.

You also have Northwest Upgrader coming off. So those are pretty big capital spends and I don’t adequate -- rationalize where the new spend is going to come to replace that.

I think that’s maybe the one drag that we see for 2017.

On the slippage that you guys referenced in fluid hauling work in the quarter that you mentioned in the release, was the decline in realized activity due to a major loss of a contractor or customer or you just thought that there was ultimately less volume of work to go around in the quarter?

Well, there's not less volume in that business. It was we just refused to take some, because the customers are trying to get you to lock into these -- your contrast.

We're not going to lock into that. Because we see production rising as drilling improves.

So production always follows drilling. Drillings first, then production starts growing.

So we wanted to keep our capacity for when that new production comes on and we haven’t signed all these long term stupid contracts. So we deliberately de-marketed and we'll just wait our turn.

So I don’t think -- nothing structural changed. I think that production work is going to go up as drilling activity improves, particularly in heavy oil and in Saskatchewan.

That’s a big part.

You referenced some headwinds in Canadian dewatering. On a sequential basis was the lack of roll over of the Husky, and is your pipeline still a major drag to performance in the quarter?

Yes, that was a good project that we did and that didn’t follow through. They were I think reasonable.

They didn’t fall off the cliff, but it was a bit of a drag on that, particularly with that Husky project completed. But that’s the nature of their business.

They get some of these big dewatering projects that are very choppy. And when you get it you know it's not sustainable every day.

You are counting on these things coming up, but sometimes they just don’t come to fruition in the quarter you are on to. So that’s the nature of that business, because it's all project related.

And on the Series E and F notes that are maturing, do you just pay those off with cash on hand or do you ultimately look at replacing them with the new series of notes at this point.?

Yes. I think it all depends on that do have a use of proceeds.

If I take on some more debt in '17 as we still have cash on the balance sheet, I think we'll have to make the fundamental call, are interest rates going to be -- where it is going to be in '18 when we have another series $70 million due in June of '18. So I think it’s a still a little early to tell.

We're still looking at acquisition opportunities. So it will be that balance between cash on hand and then opportunities.

Is it fair to assume that the volume of potential acquisitions have slowed down as activities picked up and people are head down, trying to run their business or you are still seeing a steady state flow of potential opportunities in front of you right now?

It always slows in the first quarter a little bit, as people focus in the oil field services side, but on the trucking logistics side conversely, first quarter is their slow quarter. Happy New Year, let's think about what the future is for a lot of family businesses as well.

So they are sort of being in that gang. I think it's still -- the deal flow is still substantive.

Thank you, folks. I appreciate you joining us today here this morning.

And we look forward to some brighter days ahead as we turn to '17, definitely more optimistic. We're not worried about the demise of the oil and gas business this year.

We are looking at now the recovery of it. I don’t think it's going to be -- I think the brighter days are going to be in '18 but '17 is clearly going to be better than '16 from that perspective, of just feeling more optimistic and we're entering a more of a growth phase most now.

So we look forward to reporting back to you in the spring, just how things are going. Thank you very much and we'll talk soon.

bye.