Gary Love – Vice President, Finance and Chief Financial Officer Steve Orr – President and Chief Executive Officer

Scott Treadwell – TD Securities Sarah Hughes – Cormark Securities Inc Dana Benner – AltaCorp Capital Inc. Elias Foscolos – Industrial Alliance

Well, good morning. Before we begin this morning's conference call, I would like to take a moment to remind all listeners that today's conference call includes forward-looking statements that involve estimates, judgments, risks, and uncertainties that may cause actual results to differ materially from those projected.

The complete text of ShawCor's statement on forward-looking information, included in Section 4 of the third quarter 2015 earnings press release, it is available on SEDAR, and on the company's website at shawcor.com. I'll now turn the call over to ShawCor's CEO, Steve Orr.

Thank you, Gary and thank you ladies and gentlemen for joining us on this morning conference call. Yesterday evening, we've released our third quarter 2015 financial results.

I am very pleased to highlight that the overall - the company's financial performance has successfully rebounded from the low lever. And we are also able to show some modest growth over the third quarter of the prior year with revenue up 3% and EBITDA up 5%.

In an environment where we continue to be impacted by the decline in North American oilfield activity to be able to report positive quarter-on-quarter and year-on-year results demonstrate the company's ability to execute. The reason for the improvement in performance was a very strong activity we are now seeing in our EMAR region, where we generated revenue of $171 million, up 60% from the prior year.

Driven by Shah Deniz projects and the recommencement of pipe coating on the South Stream line, North America continues to show weaker activity versus the prior year although we did see a 13% improvement over the second quarter from project work in the Gulf of Mexico and a temporary pickup in well completions in the summer that particularly helped our Flexpipe composite pipe businesses. With the improvement the revenue came in 2% - point increase in gross margins at 33.4%.

In addition, the restructuring actions taken in the first half of the year to align our organization and cost structures with the reduced market activity has contributed to lower SG&A expenses. Together these factors led to an improvement in our operating margins, which increased to 11.4% and net earnings of $0.59 per share.

I'll provide you with further details on our outlook in a moment, but first I'll ask Gary Love, our CFO to provide you with some key details on the third quarter financial results.

Okay. Thanks, Steve.

As mentioned we are reporting revenue of $485 million in the third quarter, that's up 22% from second quarter and also up 3% versus the third quarter a year ago. Compared to the third quarter a year ago revenue was down in each of the Pipeline segment regions except EMAR, which was up $64 million or 60%.

The strong growth in EMAR were resulted from approximately $100 million, Shah Deniz project work executed in our facilities in Azerbaijan and Orkanger, Norway. Compared with the second quarter this year, revenue increased strongly in EMAR, as well as North America and Asia-Pacific.

EMAR growth was of course related to Shah Deniz. In North America revenue climbed by 13% with the increase that's fairly consistent across all of our product lines.

In Asia-Pacific, the 32% increase in revenue over the second quarter was attributable to one large project for ENI in Indonesia that has now been completed. In the Petrochemical segment, revenue increased slightly over the second quarter and was unchanged from the third quarter of 2014.

Modest growth in heat shrink products continues to offset weakness in wire and cable. With the strong revenue in the third quarter, we also had a rebound in gross margins, which reached 33.4%, up from 31% in the second quarter.

However, the impact of the oil sector downturn, particularly in North America is evident from the fact that gross margins had exceeded 36% in the third quarter of 2014. At a segment level, Pipeline segment gross margin was 33.7% versus 31% and 36.9% in the second quarter and year ago quarter's respectively.

While the Petrochemical segment gross margin at 30% increased from 28% in the second quarter and from 26% a year ago. We are reporting adjusted EBITDA for the third quarter of $74.8 million, a vast improvement from $12.9 million in the second quarter and also up 5% from the third quarter a year ago.

The consolidated adjusted EBITDA margin in the third quarter is 15.4%, consisting of 16.7% in the Pipeline segment and 19% in the Petrochemical and Industrial segment. These margins are in line with the third quarter year ago but are of course significantly improved over the low levels of the second quarter.

On a year-over-year basis income from operations increased from $10.9 million a year ago to $55.2 million in the third quarter of this year. Recall that we recorded impairment charges of $41 million for Brazil in the third quarter of 2014.

Leaving aside the impairment, operating income increased by $3 million with a $10 million reduction in SG&A offsetting the lower gross margin. Our effective tax rate in the quarter was 24%, which continues to be below the Canadian statutory rate of 27%.

This is primarily the result of income being generated at low tax rate jurisdictions, primarily in our EMAR region. Now turning to cash flows for the quarter, before changes in non-cash working capital, cash flow provided by continuing operations was $57 million that was up slightly from the third quarter of 2014, but improved by over 300% from the second quarter and in each case the improvements mirrored the gains in net income.

The change in non-cash working capital in the third quarter 2015 was a net cash outflow of $29 million and this compares with a cash inflow of $7.6 million in the third quarter a year ago and a cash inflow of $90 million in the second quarter. The cash outflow from working capital was attributable to higher receivables due to the revenue growth and a continued drawdown in deferred revenue from continued execution of the Shah Deniz projects.

Cash flow used in investing activities in the third quarter, excluding increases in short-term investments was $16 million, which consisted of capital expenditures and property, plant and equipment of $14 million and additional acquisition of investments in shares in Zedi and PFT systems totalling $3 million, these were partially offset by proceeds from the sale of surplus land of $1.5 million. Now during the third quarter, financing activities used net cash of $8.8 million and this was due of course to the regular cash, quarterly dividend of $9.7 million.

Based on the cash flows in the quarter, cash plus short-term investments increased to $187 million at September 30 from $173 million at June 30. Now in addition to the cash position, the company has available unutilized credit facilities of $463 million and remains in compliance with the financial covenants in our credit agreements.

I'll now turn it back to Steve for his commentary on our outlook.

Thank you, Gary. I'd like to provide you with some comments on our outlook both near-term and longer term.

In the immediate future, we have every reason to expect that ShawCor will provide solid financial performance in the midst of what continues to be a very severe industry downturn. In the fourth quarter and continuing in the first quarter of the next year 2016, we expect the projects being executed in our EMAR region that we saw in the third quarter will continue to provide strong operating income and cash flow.

We may see a modest weakening from third quarter levels, however and this will be attributed to deteriorating market conditions for our oilfield leavers businesses in North America. Currently there is no sign yet of a abandoning those [ph] in the rig count.

In fact E&P operators may be preparing for further cuts in capital spending. Looking beyond the first quarter of next year, our outlook potentially becomes much more challenging, since we faced significant uncertainty with the respect to timing of a recovery in North America and with the development of our backlog of large projects.

In North America, rig counts, well completions and overall oilfield spending are all likely to decrease from what we saw in the summer. It may well not be until 2017 that we see a meaningful improvement in the market conditions that drive our businesses and are leavers to wellhead spending.

In addition, we expect that 2016 will be a very slow year for offshore Gulf of Mexico activity. In North America, midstream activity the news is much better, as large transmission lines continue to proceed as evident by our initial contracts of awards for a major transmission line replacement program.

Looking at international project activity based on our current production schedules, we expect to complete the Shah Deniz export line and South Stream pipe coating projects by the end of the first quarter 2016. These projects account for approximately half of our $556 million order backlog and nice completion of this work will create a gap that must be filled from projects that we were bidding on or involved in the development of, here again we face uncertainty.

As of September 30 we have just over $600 million in outstanding firm bids. This measure has decreased from $800 million in the prior quarter, however this decrease is largely attributed to approximately $190 million in bid that expired as a result of operators extending their engineering and development efforts to seek capital cost reductions and deal with regulatory delays.

The timing for conversion of bids into firm orders continues to be a source of uncertainty and may translate into a delay and rebuilding of our backlog, which in turn could impact revenue levels in the second half of 201.6 When we look beyond 2016 we have a strong reason for optimism. In addition to outstanding firm bids we also track the level of projects for which we have provided client with engineering estimates.

This value stood at just over $1.1 billion as of September 30 and has continued to grow. We are very close to providing firm bids for a number of these projects and thus we expect that our firm bid value will increase significantly in the fourth quarter.

At some point in 2016, we continue to be optimistic that a number of these projects will move forward, which would set us up for a backlog growth and an outlook for improved financial performance. Given market uncertainty and the lack of visibility in our longer-term outlook, it would be easy to dismiss ShawCor's position and value.

I believe this would be an error for several reasons. To begin with our strong financial position ensures that we will outlast this downturn, no matter how prolonged which is not the case for all companies in the industry.

The cost reduction measures we have taken in the first half of the year should allow our North American businesses to continue to be cash generators for ShawCor and to gain market share as competitors falter/ Second, we have the ability and determination to continue and execute our long-term growth strategy. We continue to fund key technology development programs such as our FlexFlow large diameter composite pipe product, a traceability and data management offering that we are executing internally and through external partners such as Zedi.

And linking of discrete products and services into engineered systems focused on increasing functionality and reliability. Third, we can and will do strategic acquisitions, several of which are nearing completion.

Lastly, I cannot overstate how quickly our outlook could change for the better. Large project activity has always been lumpy at ShawCor and when we look at the volume of activity that is currently under development, we know that this critical element of our business can change fast.

Even in global environment where oil prices remain below $70 per barrel for several years by executing our strategy and continuing to provide clients for compelling solutions for their most challenging projects, ShawCor can achieve growth in revenue earnings and shareholder value. On that note, I'll turn the call over to the operator for any questions.

Thanks. Morning guys.

I wanted to start on the commentary you provided around the bid book and the outlook, so $190 million expired that that sounds like its more temporal than its reengineering and cost rejigging, so there is a potential for that bid, that project to come back into the bid. I'm just wondering, can you give us any color of any magnitude of bids that might expire here in Q4 or might not to be rebid in Q4 and beyond in the short-term?

Scott, it's very hard, because as we mentioned in previous calls we haven't really got a handle on the conversion rate. However I will make comment on the $190 million that expired.

The $190 million is predominantly two projects. The first, of course, everybody has visibility on South Stream Lines 3 and 4 in which we bid to fill joints.

About the same time we were awarded the parent coatings for Line 1 and Line 2. So of course as everybody is aware, Line 1 and 2 we were in on uncertain position back and forth for a while.

Line 3 and 4, these bids just simply expired. So will the Lines be built or not?

I think this is a separate and probably not factored by the price of oil. The second project was one in the geography of Indonesia, which has been under constant transition on the regulatory approvals and so this was also a large project that went.

So the majority of the $190 million are in these two buckets. So what is to expire in the fourth quarter?

What we can say is we're comfortable with that, the bid book will go up because there are several large projects in our budgetary that we're pending submission of bids.

Okay. Perfect.

Then a follow-on to that, are you seeing a meaningful delta in the margin for what is being sort of in budgetary estimates versus what's in the bid book now. Or has your guys' focus on sort of reaching in the cost to some degree, eliminated a good portion of that and maybe pricing pressure that's in the system.

As we mentioned, Scott on the previous call, utilization is the key to profitability. So large projects, so I don't think we're seeing any suppression on the bid pricing.

But certainly in cases we're bidding for utilization, so facilities that are already have projects going through, we can afford to take projects at margins that bring utilization numbers, so the overall profitability of the plant is higher. But I can't say, we're really on large projects were under any visible pricing pressure today.

Okay. Perfect --

If I could I would add that, as we've mentioned before, we tend to - I think we're seeing pricing pressures more in the oilfield - the leverage businesses, that's where pricing pressures are far more acute today.

And most definitely, yeah.

Okay. Perfect.

And actually I sort of, I guess, a question that kind of hit on that again. We've heard multiple data points about onshore cost reductions.

Can you give us any quantification or maybe not directly for you guys, but at least tangentially. When you're talking operators about offshore, what sort of price reductions or cost reductions have they seen?

Do they need more - obviously the oil price is a big piece of it, but are they still seeking incremental cost reductions and that could be a hurdle before you see deepwater activity start to move?

In particular, deepwater what we're seeing a relook or a deep dive in previous projects that were executed and they're looking no longer for what I would say price reductions. But they're looking at efficiencies of deployment, so today for example, we mentioned on previous quarters that we were awarded both the parent coating and the field joint coating and this wasn't done on a reduction in price, this was done through a review from the operator looking at the red money or the money that they lost on previous projects.

And involving the suppliers, including the lay contractors and ourselves to work through where money could be saved by not having reliability or execution issues. I think this is where, and we see this both in terms of alliance between technique on FMC, we see it Schlumberger now reaching out for full ownership of Cameron.

So I think that it will be on rejigging the supply chain and less of a fragmented approach to procurement will drive the cost out of the deepwater, I don't think it will be pricing. If you keep the same model, I think the pricing has already kind of reached its limit.

Okay. Great.

Last thing for me just on the Flexpipe, still comfortable with the timing for the large diameter, I'm assuming. And just wanted an update, I know you'd had inventory issues through, kind of Q1 and Q2, is the inventory in Flexpipe now normalized for the demand you see, at least in a sort of $40, $50 environment.

Very happy with the reduction in inventory and Flexpipe. Based on what we expect, we've done an outstanding job of getting the inventory levels down in such pipe aligned with future activity.

With FlexFlow we're on time, we have two critical things that are going to happen in the last week in November, which allows us to have certainty in terms of the industrialization. So we have a full plant trial where we'll run continuous.

Then we need the final certification of the system test for the product. So those are the two technical things that we'll have to pass and we're on time for them to be done.

So as the team has done an outstanding job. There is a real deep dive on the market right now to determine on how we may introduce it.

But it's no longer, we're getting very close to where we're going to be say with certainty that we're ready to commercialize and we're on time for this.

Okay. Perfect.

So it's now more of a when and how then and if.

Yeah, I think it's fair to say, the time we have our next call we will be able to say very certainly that we have a product, it's certified and we have plant to manufacture it. And so then we have to determine how much volume we're going to put into the market and where.

So it's more of the marketing strategy. I think will be the discussion in the next call.

Perfect. Okay, that's all I've got.

As always guys really appreciate the color. Thanks.

Thank you.

Good morning. I guess, my first question on the Latin America market in your outlook section you talked about, you're currently bidding or preparing to bid on a few large projects.

And based on the current timing, and I know that can move, would any of this hit in 2016, if you're successful or is this more a 2017 timing?

I mean, we don't have a certain answer to that question; there is always the possibility that some of that work could launch in 2016. Our purpose of highlighting the fact that, it is probably more likely to be 2017 is simply passage of time.

If the work doesn't get awarded, then it's going to move out and that's the situation we're in right now. So it is possible for 2016.

We'd be thrilled if that happened, but we have to be realistic.

Okay. And then if I look at the EMAR region and when do you see Shah Deniz contract has done, does revenue in this region go back to where your average revenue was pre- Shah Deniz, which I think was in that $200 million and $250 million type range.

Is that kind of what we can think about going into late '16 and '17 for this? Or is there any other contracts there?

No again it will depend on some large projects that we're bidding on. So the same opportunity coupled with the same uncertainty would apply to our EMAR region as it applies to Latin America.

Sarah, maybe to provide some color. I think that company is seeing large projects in multiple geographies.

And so when looking at historical numbers, we use we had one or two regions that we're doing what we referred to as wall of work. So we all recall the Asia Pacific.

We're now at a point that we have visibility in large projects that we are about or in some cases have submitted bids in multiple regions that are large. And so that's what we're trying to message.

What is really the uncertainty is visibility on when they will be awarded, but it's not that the work potential is there and to what we're trying to do is make sure the messaging is correct. The uncertainty is when they will convert, right, not that the market does not provide the opportunities.

Okay. And then just lastly, in terms of North America you indicated I think in your comments that their cash generators, that market is a cash generator for you given the cost cuts you've done.

And then you also indicated that you Q4, activity levels are down below they are Q3. If they take that step down, do you think you will still be able to generate cash in that region in North America, the oil leader of region, is part of that.

And if not are there more cost cuts to be done or have you cut pretty much all the costs you can cut out of there?

So we'll break maybe the question in two pieces, so we're conservative in our approach that we think in particular to U.S. Thanksgiving will be a point in which activity were low and operation will take the advantage of what historically has been a low utilization or efficiency period at a time to pull back.

And from Thanksgiving going on to the close of the year, so into the fourth quarter, we think activity will be a convenience, the opportunity to pull back. And so that's what we're anticipating.

We're into the fourth quarter, of course already and we're not at Thanksgiving, so that is our expectation. I'll make one other comment is we cut in the company into two and a little bit the quarters before, and the anticipation is that we would be structured correctly for the foreseeable future.

So today we have no intention to do anymore reduction in workforce as large restructuring programs will continue, of course to enhance and look for efficiencies along shared services. On the way we approach customers in terms of integrated approach to sales.

For three reasons, we want the lowest unit costs, want to scalable, so when things do turn, and we want a sustainable business model. So we continue to do that in IT, for example, back-office, HR deployment that is across all the division.

I'll turn the second part of your question over to Gary on; will the businesses generate cash, right?

Yeah, I think, our view is that we will see a pullback from the third quarter, in the fourth quarter for the reasons, Steve cited and we don't know when that will turn around subsequently. Now, in that environment we've done a lot of work to try to structure the businesses, so that they can continue to generate positive EBITDA.

We carry obviously with the Desert acquisition, we carry a lot of intangible amortization, we also carry intangible amortization with our related back to the Flexpipe acquisition. So getting positive OI, these are activities levels is very challenging.

But getting positive EBITDA and cash from operations is absolutely our goal. And I think it is something we will achieve and continue to achieve in what are very depressed activity levels.

Okay. That's it for me.

Thank you.

Good morning, gentlemen.

Good morning, Dana.

I wanted to start with the comment that you made in the press release about work that you had done on a major transmission pipeline replacement project. I wonder if there is any more color that you can give us on that.

And what that might imply for future quarters et cetera?

Well, it's a large diameter transmission pipeline. The client has requested that we not identify it specifically, so we're not going to.

And the work has now commenced and one of our plants we expect that will ultimately execute that project in two of our plants over the next 12 months. So running from now through to late 2016 and I think the context to think of it is that it is part of a robust activity level and market level for large diameter transmission work across North America.

There continues to be good activity levels in the midstream, not in the upstream, but in the midstream and so this is the indicative of that, as highlight reported [ph].

Do you think that this is part of what could be an accelerating trend or is it too early to say?

Well, the acceleration would have to result from some decisions by operators to proceed with large projects and of course, we're well aware of the Western Canadian, the B.C. LNG projects that are under valuation today.

Both the Prince Rupert for Petronas and the Kitimat project for Shell. So those have and you know this and we've communicated this.

They have very significant pipeline infrastructure of work associated with them and if they go ahead then that would have a significant impact on large diameter transmission activity in North America. So that's one area that we're watching very closely and we expect, I should say we hope that there will be some decisions taken over the next few months on those projects.

Right. So I should have been more clear, that much I think we all are curiously watching, it's really more the replacement, when I say acceleration.

I mean, part of the ShawCor thesis has been that, there's a lot of very little each, infrastructure out there that's probably been not as well preserved or kept up as may be one might expect, given pipeline life science. And could this project be maybe the start of what could be an accelerating trend of replacement, proactive refurbishment et cetera.

Yeah, so it's part of - we would argue its part of a longer-term trend. Absolutely, yes.

Okay.

Whether it represents some inflection point, I wouldn't go that far, but I would say it is certainly part of a trend that we expect to unfold over a very long timeframe, certainly the next 10 to 15 years.

Great. Next question, can you think of a time when you've had so many projects that would be moving from budgetary phase into potential the firm bid phase.

I think you said half, which seems like a pretty large number?

Well, it's the source for us of optimism. Steve, do you want to?

So, and we also recall my legacy with the company only started in 2013, but historically looking back on visibility we had on project and then influence that they later have on backlog, we have never had the multiple wells at work in several driver fees that we are in pursuit of that today they appear that they will go ahead. But we don't know the timing when they'll go ahead.

So I think it's - and the word is often overused, it's unique and we haven't seen this before. I think I would may be add additional color.

The majority of projects that are large, with the exception, I think there is one in there, these are projects for transmission lines. So there to move energy that's already being - that's available into a market that is requiring it or they're using it to mitigate, right.

So searching for example, there is mitigation around Ukraine. So it's not really driven by exactly from the price of oil, these are long-term 25 year return projects, so the outlook in near-term doesn't really effect, it's just the operator is making the decision on the long-term economics do they work and can they get regulatory approval, is just part of it, right?

Right. Thank you.

And then just finally, under the banner of strategic M&A, it sounds like you're getting closer on number of different fronts? And would these tend to be smaller tuck-ins or could they be larger moves that now may make more sense given the structural weakness in the business.

The direct response is, yes. So it's very difficult to give visibility on exactly what we're doing, but each one of our growth themes have a targeted list.

We divide them and as we've mentioned before, technology tuck-unders and platform of growth. What we've done is we're being quite selective and we feel very strongly that whether the seller realizes it or not because there is still this disconnect between what sellers want to sell versus what buyers are prepared, we are spending extra time to make sure that the synergy extraction is possible.

That's why the ones that were in the last stages of signing or closing out, might have taken longer because we're being very, very cautious to make sure that we down to the detail headcount and location and product we have certainty on the synergy extraction. But what we're trying to do is make sure that each one of our growth themes and that we all have to kind of filter and take the opportunities that are the best, have the ability to grow into these businesses of all greater than $300 million, right, so that's what we're trying to do, so that they're sustainable.

Projects in terms of M&A that we're getting close to, they all fit that. So they all have an ability for us to exact - other cost synergies very quickly or they add to compelling building block on the strategy of the theme.

So without giving exact targets and where they fit, I think you're going to get color very shortly as we get closer to conclusion,

Yeah, I'd like to add one other element though and that is that what we're looking at is very affordable within our current capital structure and cash on hand. So well these are not large deals, okay.

They are critical, strategically as building blocks for what we're doing with our five growth themes. But one of the things that we continue to recognize and value is the strength of our balance sheet.

We are not going to compromise that. We do not know how long this downturn is going to last.

And Steve said it very clearly we will survive this downturn. We will continue to invest in the key things that are going to drive us forward around technology.

We're going to be able to take on large projects that may require large upfront expenditures because we have a strong balance sheet; we're not going to put that at risk.

Okay. Well very thoughtful response.

I'll turn it back.

Good morning. A couple of questions, the first one has to do with the North American Pipeline and Pipe Services Segment.

I found that the revenue increased sequentially, it was a little more than I expected. And I was wondering if you could provide some color on how much the quarter-on-quarter increase could have come from large diameter revenue, if any; versus call it smaller flowline type projects.

Yeah, sure, actually there were two areas, so we have a pickup in activity in Gulf of Mexico, so we did some Gulf of Mexico project, a concrete weight coating project that we executed primarily. That was done at facility or location we have in Beaumont, so that was one element.

And then the other element was an improvement in our upstream leverage businesses. So Flexpipe, Desert NDT, small diameter pipe coating, these were the big factors in the improvement from the second quarter to the third quarter.

Large diameter coating actually didn't change much. It was good; it was a good level in the second quarter.

It continued at a good level in the third quarter, so that wasn't the driver, it was the upstream businesses and it was a particular project in Gulf of Mexico. And that's why we will see a bit of a pullback in the fourth quarter because as already mentioned, we're expecting some pull back in upstream activity.

Thanks very much for the color on that. Focusing a bit on gross margin.

I believe you were probably and you might not have his number, but alas pulling a bit out of high-cost inventory in Q2, so a combination of inventory/utilization. Is there any way to distinguish between those two for us or is it just a nonmaterial question that I'm asking?

No, it's absolutely quite correct. I mean, we did mention in the second quarter, the 31% gross margin that we had actually was both at a consolidated level and at a Pipeline segment level was absolutely impacted negatively by inventory actions taken in our North American upstream businesses, so Flexpipe and Canusa-CPS in particular, those two businesses.

As they were drawing down inventories that had a negative effect on gross margin. That coupled with the utilization on negativity, let's put it that we saw in some of the other businesses like for example Desert NDT.

As we go into the third quarter we see a bit of an improvement there, that helped us on the gross margin side. But year-over-year you can certainly see the continuing drag on gross margin from the relatively weak activity in North America on our upstream businesses.

So a combination of both. I appreciate the color, because I do remember I think you said in Q2 that you would actually shut the Flexpipe plant down.

Yeah, that's right. So that was the utilization effect and then the inventory effect.

Right. Focusing a bit on the M&A once again, one will be sort of a simple question and then more complicated.

Geographically, are you looking at the domestic and I mean, North America versus international? Or is it international potentially versus North America.

So we're looking in both to access blocks that we need for the strategy, so both we have filtering mechanism and we collect and target both opportunities in the North America and international market. But what - as Gary mentioned, with reflection on security of our balance sheet, we're looking for deals that fit the strategy, so geographically, if we're looking at the North America wellhead businesses today.

I would say they're having leaders to North America opportunities and building blocks and overall strategies will take internationally if required or even tuck-unders to do expense and we'll take internationally.

Now focusing on the international side. One of the things we could see is dripping out a lot of cost within the system, such as plant consolidation.

You might have used the word synergy when you meant that. Is that kind of what you were thinking about potentially or cross-selling opportunities or both?

If the question is in the context of M&A, do we get international M&A as a vehicle to consolidate facilities, was that the nature of the question?

Yes, it was actually. Yeah.

Thank you.

Frankly, I don't think that's - no I wouldn't suggest that that's something that we're targeting, I don't think at all. We look at our international network of facilities today and we're actually quite comfortable with that network.

Quite honestly, doing M&A to add more international facilities, I don't think that's a likely scenario.

Actually, no, I was thinking of stripping international facilities from the combined entities.

Again, not a likely scenario, I think you're going to find that our M&A is really targeted on building blocks around technology, around capability as opposed to geographic expansion, that would be a lesser factor for us.

Okay. And one last question on the - you alluded to with the refurbishment, so I'm going to just be bold and say oil pipelines and aging infrastructure in North America as a long-term theme.

I wanted to just get some color on the international side down. We're a little ahead in North America in terms of aging infrastructure in many respects.

Is there anything that's popped up on that side? Or that you can see - and if you don't see it, do you view that as a theme?

I would say, I think it is absolutely going to be a factor long-term. I can't speak to anything that we're sort of targeting in the near-term.

I think we have much better visibility on this growth opportunity in North America than we do internationally. But the numbers are the same, international infrastructure, it may not be on average quite as old as North American, but it's getting older every day.

So the same dynamic will ultimately apply internationally.

Okay. That's it for me.

Thank you very much for the color.

Okay.

Thank you very much for participating in the call and the interest. We certainly look forward to kind of seeing again at the next quarter release.

Thank you.