Operator: Our next question comes from the line of Cole Couzens with Stephens.
Cole Couzens: Sorry, I joined the call a little bit late and you might have hit on this already, but U.S. land rig count have seemed to bottom here in the 600 range, but we really haven’t seen an inflection yet. So maybe it would be helpful if you guys could parse through kind of the assumptions that are baked into the guidance for flat to up 5% and maybe how customer conversations are shaping up in that context as well?
David Cherechinsky: Okay. In terms of rig counts, I think we see real stability in the low 600s for U.S. rigs. There are some customers, some joint contractors talking about adding rigs. And then there is a general sentiment that we expect some lift. We’re not sure when that’s going to come. We think it’s more likely to see some uptick in the second half, but stability, which is a good thing in the meantime. Completions were low in January after having declined for a period of time. I believe the completions will ultimately follow the path of rigs. So we expect some growth there as well.
Cole Couzens: Okay. That’s helpful. And then kind of higher level on process solutions versus energy. It seems like we continue to see that process solutions mix go higher. Is there any way you guys can kind of frame up the rough gross or EBIT margin profiles of the 2 businesses?
David Cherechinsky: Yes. What I’ll say is this is in our Process Solutions business, we tend to see higher — depends on where we are in the cycle. When Process Solutions business is strong, we could see better bottom line margins. When things are leaner, it tends to even out over the cycle. But right now, Process Solutions is — has had its best year ever in 2023, grew 46% from 2022. And so this is one of those periods where the earnings might be a little stronger on — generally versus the energy centers, but that evens out over time.
Operator: And we have a follow-up with Jeff Robertson of Watertown Research.
Jeffrey Robertson: Dave, a question on industry consolidation. You all talked in 2023 about aligning DNOW as the supply chain provider of choice and some strategic type relationships with some of your customers. Do you think some of the consolidation among the big independent producers furthers your ability to maybe gain market share by being the provider that they turn to?
David Cherechinsky: Yes, I think when — I think to me, the rule of thumb or my expectation is when these big consolidations happen, only a few distributors in North America can handle the much larger businesses as they come together. So I think the benefit accrues to a company like DNOW. We have a good footprint in North America. When these companies come together, we’re really better equipped than most companies to take that on. And of course, we’re always pursuing the more integrated models with these companies as they come together. And that could go either way. If the acquiring company is one of our supply chain services customers, very important customers to us, we might have a shot at picking up the rest of the business in the company they acquire. So we see that as a net positive generally, and it could be a very good situation if our incumbent supply chain services customer is the acquirer.
Operator: Okay. There are no further questions at this time. I’d like to hand things back over to Mr. Brad Wise.
Brad Wise: Well, thank you, everyone, for your questions today and your interest in DNOW. We look forward to speaking with everyone on our first quarter 2024 earnings conference call later this year in May. And with that, I’ll turn it back to the operator to conclude our call. Thank you. .
Operator: Thank you. This concludes today’s conference call. You may now disconnect. Have a good day.
