Lyle Williams: Yeah, Erik. I’ll talk to that. In the first quarter, those shares repurchases were tied to equity awards to employees, and that was the cash tax — that was the tax portion of those that were recouped by the company and paid in cash — taxes paid in cash. But we did not buy any shares in the market in the first quarter. We’ve got a relatively small amount of authorization left and a small amount of capacity under our current indentures to be able to do that today. So our plan, as we talked about and tried to outline on the call is leveraging our liquidity and our cash flow to pay down this long-term debt and ultimately get that flexibility so we can open up the avenue for larger and faster distributions back to our shareholders. And we’re pretty excited about that.
Unidentified Participant: That’s great. And then I guess the last thing, I mean you guys have mentioned it a handful of times over the last couple of calls, but really focusing on kind of the financial accretion on — it sounds like more on a per share metric. And then the only thing I would say is as some of the larger cap both upstream and kind of your larger cap service peers have come out of 2020. You’ve seen management incentives tied more to those metrics, which — I mean you guys are obviously hitting, but that’s something where when I just looked at the proxy statement that was released, I mean, basically, most of the incentive is still based on just — it looks like a pure EBITDA margin with a smaller free cash flow number and then some strategic objectives and so on and so forth.
But I guess my point would be is I like the focus. And obviously, if you just pay down a bunch of debt over the next year, I mean, just as interest savings alone increases free cash flow share in a pretty material way from where we are now. I guess, what I would suggest is thinking about, I mean, aligning incentives with what you guys are really strategically focused on, and that’s something that you guys can easily accomplish. So I guess what I’m saying is show me the incentive, and I’ll show you the results. I think the result is there, but I think you guys should be incentivized for that. So that would just be a strong suggestion to align those goals on a go-forward basis. And I think — I mean, we’re set up very, very well given kind of where activity sits, but you might as well get paid in the process to do that.
Neal Lux: Yeah. No, Erik, that’s a great, great, great point, one that we agree with 100%. We’ve aligned our 2024 incentive very closely with free cash flow, increase that weighting there so that the — not just the executive team but all key managers will be aligned and generating free cash flow. And I think we started to see the results of our focus on free cash flow later last year. And I think to see it this year — Q1 really is a tough quarter for a manufacturing company to have free cash flows just with all the sizable kind of we call them seasonal payments of cash that have to go out. And so I think as well as having some cash payments go out for our acquisition. So to be cash flow positive in Q1, I’m really excited, and it’s something that we want to continue.
And then I think on the executive team, we had a fairly significant ownership of equity, and we are aligned, I think, as well as we can be with our shareholders. And I think we’re going to drive the results that I think you’ve outlined here and in previous calls. And I think as Lyle outlined in our — in his section, that it’s important to us to get our debt down, and it’s important to us to get the flexibility to evaluate and find the best option for shareholder returns, and we’re looking forward to that. We’re laser-focused on that.
Unidentified Participant: Great. Yeah. Well, great quarter. And I just keep driving forward. Thanks.
Lyle Williams: Thanks, Erik.
Neal Lux: Thanks, Erik.
Operator: Thank you. One moment for our next question. Our next question comes from the line of Jeff Robertson from Water Tower Research.
Jeffrey Robertson: Thanks. Good morning. Neal, you talked in your comments about increasing intensity. And I guess my question is in the context of a flat to maybe a little bit down U.S. rig count that you spoke about, how is the increasing intensity of the wells that are being drilled really driving your revenue on a per rig basis? And does that give you any greater ability to maybe forecast how you think the replacement and upgrade cycle could impact the business as you look out into even as far as 2025?
Neal Lux: Yeah. I think the — in general, absolutely that the wear and tear on equipment makes a big difference. So it’s no longer just the revenue per rig can change. I think the — on the forecast side, it can be a little more difficult to get it precise because of just more microeconomic kind of decisions our customer make. But overall, I think the big picture that over time that we’re going to consume a lot more — our industry is going to consume a lot more equipment, material and consumables that we provide per rig than they did in the past. And so I think that’s really the key part of what we wanted to do there. Now on top of that, where we have a great opportunity is on new products and new product development. I mentioned in prior calls or in this call, excuse me, some of the new products we introduced in — and I got to admit, I am really, really excited about what our teams are doing.
We are — we have a great pipeline of new products that are in there. A lot of products are in early stages of commercialization. One of them, FASTConnect, which is our frac manifold replacement system, we put our first unit into the field, and it is working incredibly well. That system has pumped 165 million pounds of sand — completed 250 stages and transitioned between wells at a much faster rate than traditional manifold. So our FASTConnect is helping customers do more with the same equipment and it did it all. Those examples I just provided, it did it all with zero downtime. So this is a — this patented technology really is a game changer for operators and pumpers who want to increase their efficiency. So that — that’s the type of product where we can grow faster than rig count.
And our teams are really focused on doing that so excited about FASTConnect. We really are accelerating a rollout in the second half of the year, and we hope to see some great results going forward.
