Cindy Taylor: Yeah. I appreciate that question. We are going to start out slow, i.e., the quantum is not that big and we recognize that. We are at a net debt-to-EBITDA ratio at the end of 2022 of 1.4 times. So I’d say we are much more comfortable. You all know, we had a stub period on our first convert that matured — matures this month, and in fact, we have already paid that off. It was about $17 million. So following that we have no maturity until the next convert comes up 2026. I can’t remember what month in 2026. But the point of that being the industry outlook, our backlog development, our free cash flow history and our outlook for free cash flow suggests you can now begin more thoughtful approach to cash return to shareholders.
We do plan to be opportunistic. And I think in our comments, we always build significant working capital in the first quarter and that is coupled with the fact that we just bought in the $17 million of the maturing convert. So kind of early part, probably not going to see a lot of share repurchases, even last year the bulk of our free cash flow was generated in the second half of the year. I see the same trend occurring in this year and so I think it’s important to have authorization in place. We do want to be opportunistic, and as recently as four months ago, our stock was depressed for reasons unknown and it’s done better over the last 90 days, I will call it. But I just think we are going to be thoughtful and smart and absolute given is that smart organic investments will always be first.
We feel like that’s factored in our CapEx program. Lloyd told you, we are estimating an increase from $20 million to $25 million in 2023. We could flex that if the opportunities present themselves. And again, that will always be first and should be. Tuck-in acquisitions, we are just not seeing a whole lot right now, but just like we did the small ASC acquisition in second — first quarter or second quarter last year, that is performing very well compared to the acquisition economics. And if we have those opportunities, they too would be evaluated against share repurchases. So long winded way of saying, we are in a better spot, in a much different spot than we were two years ago. We are confident in our liquidity position and we know our shareholders are interested in some path towards cash returns.
So that’s our focus right now. But, again, long winded way of answering, we are going to be opportunistic particularly in the first half of the year.
Stephen Gengaro: Great. Thank you, Cindy.
Cindy Taylor: Thank you, Stephen.
Operator: And ma’am, we have no further questions at this time. So I will turn the call over to Cindy Taylor for closing remarks.
Cindy Taylor: Thank you for hosting today, Michelle. And thanks to all of you for your continued interest in Oil States and your support to the company. We do look forward to future discussions as the year progresses and we are pleased to say there is actually going to be some Investor Conferences coming in the next three months or four months and so it will be great to see people in person. In the meantime, I hope you have a great weekend and the balance of the earnings season and we will be in contact soon. Thank you.
Operator: Thank you, everyone. This concludes today’s presentation. Thank you for your participation. You may now disconnect.
