Good afternoon. I'm Sandy Martin, and thank you very much for attending the IDEAS Conference. I'm with Three Part Advisors. And today, next up, we've got DNOW, New York Stock Exchange traded company, $1.5 billion market cap, based in Houston. We've got Mark Johnson, CFO, and Brad Wise, the VP of IR, and I'm going to hand it off to Brad.
Okay. Okay. Thank you. Good afternoon. Let me kick it off. Just a quick disclosure statement. We just might be making some forward-looking statements within the meaning of the U.S. Federal Securities Laws. And so those obviously take those with a grain of salt and may not be valid later today or in the future. Okay. A little bit about DNOW. You know, we are a 160-year-old company. Been around a long time. And we started out as a steel mill distribution company for, like, say, the predecessors of U.S. Steel and a number of steel mills. And fast forward to really more current times, we were part of the NOV family, National Oilwell Varco, up until 2014. And in 2014, NOV decided to spin off and take DNOW public. So we were really a tax-free spin-off to existing NOV shareholders in June of 2014.
So we celebrated our 10-year history this year. Mark and I did with the rest of the leadership team in New York. So that was just a fun experience for us. 10 years, what a difference 10 years makes. You know, we are a distributor in what we call the energy and industrial markets. And energy, we say first because we're majority tied to oil and gas development, but industrial because we are diversifying into more industrial markets as well as away from more upstream, but into midstream and downstream markets. So if you look at this slide, I'll stop at the top left. These are some key takeaway points here. If you look at 2014, when we spun to 2020, we call that kind of the pre-COVID first chapter of DNOW's history.
Historically, if you average all of those quarters together, we really made 1% EBITDA, 1% if you average all those quarters together. Post-2020 to 2024, we've significantly improved earnings, roughly six times better than that prior period, and so once coming out of COVID, we realized the U.S. and Canadian, to a large extent, onshore oil and gas development has fundamentally changed. In 2014, there was roughly 1,950 rigs operating in the United States, and DNOW exists to service, you know, those drilling contractors, those frac companies, as well as the E&P oil and gas development companies building out infrastructure for the North American shale boom that really started in 2005, but with all prior cycles, prior to 2020 COVID downturn, we would have these big increases and, well, easy access to capital from our customers. They would drill, baby drill. They would spend a lot of money.
Then you'd hit a downturn. Where DNOW in the downturn was stuck with overcosted inventory, too much inventory, ended up writing the inventory off and led to losses. That's why we would make money in good times, lose money in bad times. That fundamentals of our market, of our core market, has significantly changed since COVID. Our operators are now really sticking to capital discipline. What that means is if oil price is $100 or if oil price is $60, they're going to stick with really their announced production platform, what they're going to bring to market from a producing side. They're going to return capital back to shareholders in the forms of buybacks, dividends, variable dividends, and really much improved earnings.
Because our customers have performed and behaved differently, it's allowed DNOW to structurally transform our business, to improve our operating footprint, and to really provide a more durable earnings structure as we'll get into more detail here when Mark gets into more of the finance side. We have a solid balance sheet, debt-free. We've got $261 million in cash at the end of the third quarter, total liquidity of $622 million. I'll go through these quick. Mark's going to hit these in a little bit more detail. We have an expanding set of solutions for the energy transition, what we call Energy Evolution business. That's the decarbonization market, the carbon capture, sequestration, utilization type market, the RNG market. We got some solutions there we're excited to talk to you about today. We're also looking to constantly improve productivity and efficiency within our business.
That means applying technology, whether it's state-of-the-art ERP systems, inventory management systems, leveraging, you know, computer bots, robotic process automation, or AI. Those are some of the digital solutions that we're looking to apply within our business to help us get more productive and more efficient, ultimately improve revenue metrics of revenue per employee. And then we are the kind of the big dog, our CEO likes to say, in the upstream oil and gas market. We're probably the dominant player there. We're about 10% midstream exposure. Prior to this year, we did an acquisition in March of earlier this year that expanded our midstream exposure from 10%-20%. So we liked that acquisition. That's been a great acquisition. We'll get to a slide later that talks specifically about it.
And then I already mentioned the Energy Evolution markets that are continually where we're seeing customers invest, our own customers invest more in that market today. DNOW at a glance: 165 locations globally, about 80% of our revenues in the United States. Let's call it 10% Canada, 10% international. Those are our three reporting segments. In the U.S., we bifurcate between roughly 74%, 75% is what we call our U.S. energy branches. That is the predominant pipe valves and fittings distribution segment of our business. That is the steel products and some fiberglass products that we distribute, more of the infrastructure of all of our branches and Supercenters. We also lump in some mill tool safety product and some other consumables. And then that 26% is a business we started from scratch through acquisition in 2015 with the acquisition of Odessa Pumps. It is a pump distribution and service business.
It's also a fabrication business where we fabricate pressurized vessels, process production and measurement equipment across the upstream and the midstream and the downstream markets, and we're looking to expand that into other areas, and we're growing that business. That business is now 26% of our U.S. revenue in the third quarter. We support the major land and offshore producing areas globally with most of our operations in North America. I'll say internationally, we have a presence in the U.K. with our MacLean Electrical business. We have an electrical distributor we acquired in 2015, which is headquartered in the U.K., but also in Australia, and we export a lot of that product, say, to West Africa and some areas in continental Europe. We have a presence in Norway and in the Netherlands and in the Middle East. So those are kind of our big areas internationally.
We've been improving and high-grading our international business. We've closed some locations. On our most recent earnings call, we closed a number of locations that amounted to about $10 million in revenue at zero operating profit. So we were losing money, basically doing a lot of practice that we don't need any more practice at doing. So it's a distraction for management. So that's going to improve our operating profit on that 10% of that revenue for our international business. How do we go to market across these three channels? We have our Energy Centers on the left. That's our pipe valves and fittings distribution business, our MRO business. Think of this as a number of locations in what we call the spine of the U.S. oil field from Texas, Gulf Coast, all the way up through the Rockies up into the Canadian Rockies.
We do cover the Marcellus and Utica play in the Northeast. But these are branches that have inventory of pipe valves and fittings and MRO supplies. And that's a lot of the restructuring we did coming out of COVID is we went to more of what's called a supercenter model. So we have a number of supercenters in the U.S. where we centralized inventory, centralized inventory risk. We execute all the projects in that region. And so it's really led to a lot better use of working capital. So our working capital efficiency has gotten a lot better. Mark will talk about that. But it also helped us perform better, dramatically better. Around each one of those supercenters, we like to call them orbiting branches or express centers where we maintain customer proximity. We're close to the customer. We're servicing the customer.
Really, that's the differentiator of DNOW is our service mentality to the oil field and to our energy customers. In the center, you'll see our customer on-site. This is an integrated supply model. A lot of our top 10, top 15 customers fall under this model where we're on-site working side by side with our customers where they're managing inventory, warehouse, managing surplus project material. We're doing sourcing and procurement. So we're really an extension of their supply chain department. And so we are seen as a partner. And our metrics are aligned with their metrics to perform and help their business perform better. This is an excellent part of our model where we gain a majority of the wallet share of the customer as far as their PVF or MRO category spend. And last but not least, I mentioned Process Solutions on the right.
This is our process production and fabrication equipment and pump distribution equipment that we built from scratch from 2015. And that area of our business we're highly accretive on. We plan to do more acquisitions on the process solution side. You know, here, you know, in addition to our service, our people are a big differentiator for DNOW and the product knowledge and the application of our products to our customers. We leverage technology. We run predominantly on two different ERP systems on our Energy Centers on SAP with what's called our OMS+ front end, which is a highly efficient method of executing sales orders and then also using technology to help do a better job providing more value to our customers. And again, we're retaining proximity to customers through our on-site models, which is our branch model.
And then we also have a complementary online digital channel where we sell, provide an e-commerce platform, whether it's what's called a punch-out solution and a centralized procurement or a more decentralized procurement strategy through our e-commerce channel. On the right, you'll see our revenue by product line. Pipe, valves, and fittings represent roughly, you know, you'll see close to 50% there. And then you've got the mill tool safety at 17%, and then the pumps, production, and drilling equipment about 27%. You know, of those product lines, probably the most sensitive to commodity pricing fluctuations would be our steel pipe. And that's about 16%-17% of that 18%. We do sell some fiberglass pipe that isn't as susceptible to, you know, steel mill and steel price per ton fluctuations and, say, seamless or ERW welded type pipe. Here's a look.
I mean, our value proposition, look, we're an aggregator of a lot of those suppliers, top tier, top one, top two tier suppliers on the left. We aggregate, we procure, we inventory. We have a quality program that audits their manufacturing, that samples products as they come into our warehouses to ensure they're top quality. And then we service these markets on the right. We service the drilling and production market. You can see a lot of the, you know, top names in the oil and gas production space on that side. Midstream is a growing part of our business. Like I said, we've increased it from 10%-20% with our Whitco acquisition we did in first quarter. We have downstream customers refining, petrochemical plants, chemical processing.
A growing piece is that bottom right is our industrial, renewable, and mining sector where we're growing that business, predominantly leading with our pump package solutions, transferring a lot of liquids across those markets. If you look at how we play across the energy cycle, you can see, you know, we're a critical link from drilling all the way through distribution, whether it's offshore drilling, onshore drilling. A lot of what we do is in that, you'll see that producing wells and tank battery area. I don't know if I can get my cursor here, but here we sell quite a bit of our solutions, our fabricated kits here, and then into the midstream and into the downstream, so this is really what drives a lot of DNOW revenue.
If I was to zoom in on one of those tank batteries, this is what it might look like for one of our customers. I'll call your attention to the bottom right of the screen here. These are the producing oil and gas wells. As oil and gas and produced water come out of the ground, we separate it through these separators. They go, the gas goes into a gas leg, which is gas compressors pushing the gas out to the midstream. There is some treating that may happen with that gas depending on the quality of the gas. The oil is stored in the storage tanks here in the middle. And then this LACT unit here is what measures the oil coming out of the tanks. And that's how the mineral rights owners get paid in the oil field. And then over here, you have the produced water.
You know, if you're looking at the Permian in West Texas, for every barrel of oil, you're going to get about four barrels of produced water. You have to transfer that water. You have to dispose of that water environmentally. So we provide water transfer units that push that water. These are big pumping skids that move that water off of the production site. In some cases, it could be 5-10 miles away to a subsurface permitted saltwater disposal location. And then these guys up here come into play with these produced water disposal units or SWD units. These are permanent ones that you see in red, or they're rental units through our Flex Flow division in the purple. But the whole point of there is we're reinjecting all that water back into the ground at a permitted reservoir.
If you look at this whole offering, all of the connectivity here, all of this requires pipe valves and fittings to connect up to kind of plumb the oil field. That's kind of our bread and butter, that PVF distribution business. And then all of the red and the purple and the green are our U.S. Process Solutions business that solve either provide a product or production or measurement function for the E&P operator. If you look at opportunities from drilling to frac, just to give you a feel, we do service some drilling contractors. It's a much smaller piece of our revenue than it used to be. You can see revenue could be roughly $4,000-$5,000 per week. Frac companies is minimal. But our core customer here is the E&P customer.
For every, let's say, you know, four to six well pad, it could be anywhere from $250,000-$2 million in revenue. As customers, as our E&P operators build these onshore facilities, they need a lot of the DNOW product. We're not always about upstream. Midstream's a key percent or portion of our revenue. We talked about expanding that to 20%. Midstream is a pretty broad area that includes transmission lines for pipeline. It's the kind of the lower gathering side. It's terminals. It's gas processing facilities. It's LNG. DNOW is a big player with all of our PVF infrastructure pumps and some compressor units, air compressor units, and some low horsepower gas compressor units that we play a big part in as well. One of the exciting acquisitions we did late 2022 was a company called EcoVapor.
With the pressure from investors to decrease carbon emissions to the atmosphere, this solution basically takes the oxygen and sulfur out of gas to basically cleanse the gas to allow that gas to be sent to the midstream. If you had too much oxygen in your gas, that results in an operator having the flare. If you ever go to a wellhead onsite facility and you see the flare going off, and if it's not smoking, more than likely they have oxygen contamination in their gas line. They need one of these. If you see them and you're an investor, tell them to call me. I'll get them an EcoVapor unit and we'll solve that flaring and reduce their Scope 1 emissions. Not only are we excited about oil and gas, but we're excited about renewable natural gas.
I think our CEO for the first time said swine farm in his earnings call about three quarters ago. But swine farm, dairy farms, a lot of the waste associated with that, the livestock is collected in these digesters you could see in this corner. And our EcoVapor unit, again, removes all of the impurities out of that gas to allow that gas to be sold into the existing midstream takeaway. So the growing RNG market, whether it's swine farm, dairy farm, or even landfill gas, is a growing market for DNOW and really unlocked by our EcoVapor product. And I think this might be my last slide, but I'm going to wrap it up here just to say, here's some key market indicators for DNOW. You know, obviously the price of oil, WTI is important. Rig counts are important. Completions are important. DUCs are drilled but uncompleted wells.
This is inventory held by E&P operators. They represent future opportunities of revenue for DNOW. You know, back in 2014, our correlation, the rig count completions, were certainly higher than it is today. Operators are becoming a lot more efficient, so they need less rigs to extract more oil and gas out of the business, and so keep an eye on these, but we're also looking at the volume as also a key metric to DNOW's future revenue. With that, I'll turn it over to Mark Johnson.
All right, good afternoon, so Brad went, now I get to fact-check him with stats and spreadsheets, so everybody ready for that? A couple of smiles and haven't lost everybody. This kind of gives us a glimpse. You know, this is exciting for us to be on the road talking to you, right?
We have 2,500 employees that do the work that create these results. But, you know, it's always exciting when you got great results multiple years in a row to string together. And what we're trying to emulate or show on this screen, that far right column is what we're delivering right now. And as Brad talked about, rig counts pretty low, but we don't let that stop us, right? We're looking for growth in all ways, even in markets that are flat to down. So, you know, right now, U.S. rigs are at 600 rigs. And you look back at the first half, second half, I'm sorry, of 2014, and rigs were 1,900 rigs, right? Go down, just let's look at EBITDA, right? EBITDA percent, 7%. Back then we were at 4.7%. So much larger opportunity back in spinoff from National Oilwell Varco. We were not capitalizing on it.
We were not efficiently structured or run. We've changed that. You know, our CEO says, you know, during COVID, you know, it's like catching a falling knife sometimes when revenue is dropping off and trying to make sure you make the right changes to right-size your business, and the CEO says he believes, you know, we caught that knife, right? We caught it. We were able to, you know, really right-size the business for the recovery, and that's what we've been focused on. You see it in 2023, our best year in history, you know, delivering 7.9% EBITDA, you know, ending the year with $399 million in cash and free cash flow of $171 million, so again, just incredible earnings. You know, we're a distributor. Generally, distributors are kind of typecast into low margin.
You know, that's not how our field, that's not how our team goes and attacks the market. You know, we're high service, high value providers to our customers. So we're not going to compete on price. We're going to compete on value that we deliver and drive. So some of this, you know, reduction in revenue that you might see from 2023, you know, to 2024, actually, this is only a nine-month period in red. So full year will be showing growth. But in that growth, we've sidestepped some business because our customers really weren't willing to pay for what it cost us to serve them. So we, you know, in those cases, gave them a price increase. If they, you know, some of them took it, some of them weren't interested, and neither were we interested in tying up our resources with them.
So we call them sometimes boomerang because they decide they didn't want the price increase, and they come begging us, you know, for the service, you know, a few months later. So again, I get to be here. This is kind of the brag session. I love being in front of shareholders talking about who DNOW is. I've been at the company 17 years. Our CEO has been there over 30 years. He was the former CFO, so he always says, "I have big shoes to fill." But again, you know, great company, great culture, and just really showing the trajectory of how we are pointed for the future. This slide deck is really the only slide. If you gave me one slide to show to potential investors, this would be the one slide.
It really talks about our path for growth, part of our internal five-year strategy, what we're focused on. We are the powerhouse in upstream oil and gas distribution. You need pumps, pipe valves, and fittings, you're coming to DNOW, right? We're 120 locations across the U.S. We're the person to go to. Our interest is not to shrink that. It's to defend that. Defend it and grow it with our core markets. Our customers at the same time are being capital disciplined so that at the same time, they're interested in defending and growing their market as well, which I think, as Brad pointed out, the boom and bust cycles have really, really leveled off, you know, really giving us confidence in recurring high levels of performance like we're delivering. You know, each of these are critically important.
I'll probably spend a little more time on this slide and then less on the future. But, you know, also growth from customer investments tied to decarb, like Brad mentioned, you know, Oxy, as well as ExxonMobil, you name our customers, they're interested in doing this as well. Not only is it good for the environment, it's also capitalism, right? They're getting tax breaks. In some cases, you know, they're able to sell, you know, sell additional gas into the network through R&G and other things. So that's a big growth lever for our future. And then adjacent industrial markets. Most of our acquisitions since spinoff, all but one, has been in this adjacent market, you know, process solutions group that we stood up. And so we've only had one in the upstream space, and that's the one we closed in March of this year, which gave us midstream exposure.
So, you know, we have dry powder. We're looking to use that in these industrial markets. And the awesome thing about these adjacencies, it's a similar product. It's pumps, it's valves, it's fittings. And the application is just a little bit different. They're customers we haven't called on. And so now, by having a sales focus and business strategy to develop this part of our business, you know, our footprint is in most of these regions already. It's just adding the dedicated sales team and technical expertise to grow into beverage and wastewater and some of the other mining is another big one for us. Free cash flow, you know, as the CFO, I thrive on that metric. And it's one that we've been touting for years that, you know, distributors in downtimes throw off a lot of free cash flow.
In growth periods, they're generally not known to generate a lot of cash. You know, DNOW bucked that trend, right? We grew 30% in revenue, and we were able to generate free cash flow. You know, to confirm our confidence in that, we instituted our first share buyback program. We instituted an $80 million share buyback, and we're about to complete that this year. You know, we're putting our money where our mouth is. We're interested in continuing free cash flow generation, and that's going to fund three levels of three levers of growth for us. It's organic, inorganic, and then capital allocation to shareholders. Talked about the buyback, which is the last bullet. We like to talk about a rinse and repeat for that second to last bullet, right? This inorganic accumulation to grow earnings, grow free cash flow, and continue that cycle.
You know, for instance, the deal we closed in February, about $180 million, we've already generated that much cash year to date, right? So we're rinsing and repeating and continuing to grow, which is exciting. This was in our deck. You know, this is part of our victory lap. You know, we love to talk about the business, love to talk about our results. You know, year over year, the quarter finished 3% higher on a macro down year over year environment. So we're beating the market as we call it defying gravity. You know, that's our interest. That's our charge. We're going to defy gravity, and we're showing it in the numbers. You know, EBITDA 6.9% and generated $74 million cash flows from operations, $176 million year to date, right? So we are churning out cash, and we're looking actively to put that cash to work.
So again, our outlook for the full year is modest growth, 2024 compared to 2023, where almost everyone else is shrinking, right? We're able to use our inorganic ability to go acquire the right companies at the right multiples to help grow value for our shareholders, even in periods that are contracting. And then for the second time this year, we upgraded our full year free cash flow guide. So not only did we set a robust guide for 2023, we've had to upgrade it now twice because we keep getting our efficiencies off our balance sheet a little faster than we had forecast. So again, positive, positive momentum. And these are graphs. I'm going to leave some time for questions, which I hope you have some. You know, gross margins for us in that earlier part of 2022, higher gross margins. Brad highlighted pipe.
Pipe is really dependent on commodity prices and supply and demand. There's some constraints in how much pipe you can get your hands on. So we were in a period of scarcity in 2022. And so DNOW was able to benefit from that period of scarcity. We were able to charge a higher price on those pipe products primarily. So, you know, generally a 22% gross margin is a good number for us. We feel that that's a sustainable level of gross margin, a far cry from where it was in those earlier charts in the 18%, right? So we're focused on high grading that and also a pretty strong net income delivered to shareholders, $22 million a quarter, last quarter. Again, solid earnings percent. You see the EBITDA percents declined slightly. That's primarily that gross margin compression in pipe. We're continuing to make the business more efficient.
We've reduced headcount, you know, this year, you know, 200 people reduced out of the business, so you know, a little less than 10% of our workforce as we're growing, but we're continuing to find efficiencies. We're continuing to optimize the locations that are thriving and fuel them with extra investments and resources and headcount, and others, we're not shy to exit, and again, free cash flow delivery. You know, we're over 100% free cash flow conversion in 2023, pretty close to it as well, and sorry, in 2024 we are, in 2023 we were as well, so really, really good metrics. Again, this is the brag session. We love this: working capital as a percent of revenue, another victory lap for us, one of our lowest in history, 15.7% working capital as a percent of revenue, so this gives us confidence as we grow.
Like I said, we were able to grow 30%. We didn't have to grow working capital at that level because we're keeping our balance sheet pretty efficient. And then $622 million of liquidity effectively. If we wanted to tap all of our, you know, all of the cash on the balance sheet plus the credit facility availability, you know, we could go into, you know, $622 million. You know, I think we're realists. And when we look at deals and look at the leverage ratio post-close to not put us in a burdened position, that'd be too out of market. So again, we generally kind of see that, you know, forward 12 months would be at or below one times debt to earnings.
Share repurchase, we talked about it. It's appreciated by our shareholders first time in our history. We launched that.
You know, it was a little shorter than a two-year program. We're about to complete it. Very opportunistic. So, you know, the price here is about 30% cheaper than we're trading right now, you know, what we're able to take out of the market. So again, very nice to have this lever and capital allocation. We've talked about all of this fun stuff and other. My bar chart graph and this one are my favorite two slides. The acquisitions we talked about, just a huge track record of acquisitions. The ones of late have been extremely meaningful for our adjacent markets like Brad talked to you about. Brad talked about the IT. And this is really a value-add solution a lot of our smaller competitors can't compete with. So when you talk about DNOW sells on value, this is part of the value you get, right?
I mean, we have the technology backbone and the investments to help optimize any customer's operations. So we're talking about Shell, Exxon, BP, small PE-backed firms. All of them can benefit from DNOW's infrastructure. And we have a suite of that that's really hard to compete with in the market. Part of our ethics, I said, you know, I love our ethos. You know, I love working here. It's a family culture. It's how we're successful at getting acquisitions across the finish line. You know, we inspire one another. We fuel the future and, of course, you know, delight the customer. I think with that, any questions?
Three minutes early.
Where do you think you are in terms of like the efficiency improvements as a, you know, like a cost production program that you align to currently or externally?
Yeah, I think, you know, great question.
I think, you know, for us, it's right now we're operating around 7% EBITDA. And I think long term we want to be, you know, in the 8% realm. So I think, you know, how we get there is it through gross margin or operational efficiencies is yet to decide kind of which lever it is. But there are still optimizations we're doing internationally and in Canada. So we'll have some fruit there. That's about 20% in total of our revenue. The 80% we did that big heavy lift 2020, 2021, 2022. There are still pockets, but we're looking to grow share primarily in the U.S. and the adjacencies in other places. So we're not as interested in cutting to the bone, if you will, in some of the U.S. space.
So, you know, we're comfortable, but we're also showing we're willing to adjust where needed, like, you know, 200 people, you know, out of the business this year. Great question.
Our CEO must have been a farmer in his prior life.
Yeah.
If you listen to him, he talks about cultivating,
gardening,
harvesting, gardening. And his analogy is that's how we approach cost management.
You're always cultivating. You're always, you know, weeding and looking for opportunities to improve. And that's just part of our normal course of business that we look at every day. Yeah. Yeah. You mentioned pipe pricing has a complete impact on margins. Yes. What is that driven more by supply demand or steel prices?
Yeah. Great question. It's, yeah, so the question was around steel prices and what kind of drives that influx in margin. You know, generally for us, we're selling surface products.
So it's line pipe. It's not, you know, tubing that's going downhole. So for us, it's supply and demand. And, you know, we're one of the top purchasers of these products from the mills. And so we're able to really get the products our customers need, which puts us in first place, right? And so we're able to yield higher margins when our customers need these products because we have the leverage with the mills. So supply and demand is driving that more than just the steel price commodity. You know, if you look back five years ago, eight years ago, the price of, you know, Hot Rolled Coil really mattered because it dictated steel prices for pipe. Not as much anymore. It's pretty decoupled. It's more supply demand dynamic pricing by the mills. Great question. Yes. Any administration tariff, any effects? Yeah.
I mean, we turn our inventory five times a year. So, you know, the tariffs are generally for a distributor are positive, right? We appreciate higher costed goods because we're going to get generally greater margins, greater earnings dollars from it. And we can historically pass those on to customers. So tariffs and quotas and things are generally favorable for us. You know, customers don't always like to see it, but it's, we also have a great domestic, we also have, I'm getting beeped out, a great domestic source for almost everything. So we're not really heavily directly relying on China, for instance. Some of the components certainly come from China. Some of our products that are made from Italy and other places in Germany. But we have a very good domestic source of supply here. Yeah.
No main steel product in China.
Most of the components, as Mark said, in valves or instrumentation electronics.
Contact Brad, as info's up here. He loves phone calls, emails, anytime of the day. We're a highly accessible management team and just appreciate y'all's interest.