OII - Earnings call transcript Q3 2020 | Oceaneering International, Inc.

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Operator

My name is Lindsay and I will be your conference operator. I would like to welcome everyone to Oceaneering's Third Quarter 2020 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer period. With that, I will now turn the call over to Mark Peterson Oceaneering's Vice President of Corporate Development and Investor Relations.

Mark Peterson

morning, Conference everyone, Call. good Quarter Oceaneering and Results XXXX Lindsay, and to welcome, Third Thanks, Today's replay on will is be call being available Oceaneering's webcast website. and a Chief are With prepared our Officer. Alan President Larsen, me call Vice and who today Senior Chief on President be the comments; and and Executive Curtis, providing Officer will Rod Financial

plans this the participants Act for made performance, make during we we I begin, statements financial industry and would Before operations Provisions Litigation pursuant future course future just the call of conditions that business statements Reform our like Securities XXXX. Private strategy, Safe to remind forward-looking of regarding the of are Harbor to

financial include comments also Our measures. today non-GAAP

found in third release. reconciliations questions the welcome over press and after our your the We Rod. details call statements. turn comparable the to now be I GAAP to will prepared directly quarter Additional can most financial measures

Roderick Larson

for review and quarter after call call I'll guidance remarks, Mark, full morning. closing the outlook commentary XXXX fourth today. thanks, for third XXXX. of year the our the joining my we'll for and the I'll for everyone, quarter Today results you open details with of Good and for questions. provide Thanks, And and the

and segments. brought and cash with, by generated the improvement Before to Interest Amortization pleased continuing cost we minimal and our start of our safely our model benefit offering logistical both with of to announced of energy as the XXXX. delays. report Depreciation services adjusted up global customers products improvement while recently deliver second headwinds, third that cost proud on the pandemic, previously and challenges stepped have improved, quarter quality to All operating and income the and market employees free initiatives our Despite or and continuing XXXX initiatives. how to compared adjusted to changes So I'm I'm of Taxes, realignment disclosed results to entertainment quarter reflect the flow and EBITDA, Earnings the

Now financial quarter our results. looking third at XXXX

EBITDA aerospace results Our encouraged million exceeded energy contribution to adjusted exceeded public defense for XXXX operating our by adjusted $X.X Overall, XXXX businesses of and were or expectations adjusted consensus. the performance improved our quarter and of adjusted consolidated $XX.X results, the Compared ad consolidated our million. stable the initial income second tech. operating third our from segment and quarter technology we by

As each except EBITDA. and reported on gains segment income to efforts our subsea meaningfully segments, line operating positive adjusted quarter cost from our improved of are Sequentially, our enhancing as second robotics adjusted bottom Each results. adjusted for results compared the efficiency operating operating XXXX. our

million free of of as positive Our from XX, June XXXX cash we at by XXXX $XX.X cash ongoing capital working capital conservation. and operations position and driven generated September $XXX contributions flow, from increased $XX largely million XX, by million

EBITDA to to and as margin our Now XXXX. the the due lower of Subsea operations to XXXX, let's adjusted survey second for subsea second the by XXXX. [Audio lower adjusted at revenue robotics quarter Gap] businesses. robotics to compared our on look by declined as XXXX. operating business from segment the contribution, Due in $X.X compared flat tooling primarily third declined quarter dollars million quarter quarter third contributions income this XX%

revenue a the combined respectively, as same XX% subsea the or XXXX, our quarter third survey robotics and the and business our between quarter. was tooling percentage For revenue and of XX% operated remotely as split RV our prior businesses the

Our RV second the quarter quarter XXXX. performance with was third comparable

was the RV fleet our XXXX, same XX, XX, as count September of XXX June XXXX. As systems,

primarily was quarter XX,XXX Based as second per ROV the X% Our marginally fleet quarter. in third the in on XX,XXX on hire changes third as sequentially, utilization to Average hire day in same geographic the the to mix. quarter. during compared XX%, the due revenue lower, was quarter were declining XXXX prior

ROV Our working the compared compared number XX% in days as XXXX was XX% led drill in to XX vessel-based during the during respectively prior and services. XX and hire as XX% for XX% floating mix to rigs on quarter the activity average was quarter. quarter, fewer to of The support third quarter in support fleet use which the drill prior during

However, hire increase services. an this decrease on vessel-based was days offset in by for

of of market During XX% the XX to contracts floating at quarter, our the the decreased compares share under a of market XXX share XX% to on drills ROV end drill with September. our contract This on rigs support we sport remain ROV XX range. to variances, support June. the XXX to contracts in with share the quarterly of end market generally XX% expect at drill continue Subject the contract rigs floating to

XXXX to project manufactured revenue XX% the products. percentage on business. manufacturing income margin in of revenue. operating was third in umbilical attributed adjusted increase increase components quarter a to completion revenue recognition, lower slightly Sequentially improved Turning uncertain our of Much

timing energy manufacturing business the affect entertainment to decisions our our by low reduced demand oil limited manufacturing investment Overall primarily customers attributable XXXX, to but and manufacturing intake year and had pricing. date During energy-related adversely business, significant undertaken our quarter business. to final continued our third in impact to in order and for oil is non-energy gas due on COVID-XX decrease

products recast million, of September manufactured our XX, $XXX compared million. backlog backlog June $XXX to XX, at Our XXXX was XXXX

million. $XX During was intake third quarter, ore the

new intervention XXXX that move fourth operating XX Our outs was quarter well out for third the was implemented consistent Call work XXXX during will work this of continue Sequentially, of revenues. second connection operating angle with delay but on project, impacts the COVID-XX forward months, .X improved begin group the book-to-bill flat past synergies The first XXXX. our was light relatively with in late benefiting the in quarter ratio to results and the to optional with operating or of the adjusted improved year-to-date the we're early cost results quarter and optimistic .X. either projects in model. quarter from

solutions, as second were and execution improved results due results adjusted on certain by flat were costs non-recurring digital quarter management projects. integrity on largely adjusted These impacted sequentially to improved completed results operating For revenue.

of operating for XX% these revenue. the the for of revenue slightly our results third aerospace the quarter represented relative Our slightly our of consolidated approximately sequential tech technology higher and defense quarter challenges XXXX Ad third considering businesses and businesses. the energy we stability faced segment on adjusted higher appreciate reported currently in

to one teaming we business announced, will U.S. human for developing were in years, strict contracts landing we assuming contract be compensation. XXXX NASA; of quarter awarded be we Dynetics quarter previously expenditures XXXX due renewals lunar for As the where lower second up third accruals Navy's discipline. exercise continue support for one operating the incentive-based and Capital Unallocated annual two XXXX, we're quarter: during the expenses capital to a systems meaningful for system where five submarine quarter lower total subsea rescue systems the to million will our in business technologies third and for space the $X with defense as our than primarily maintaining in we

$XXX months million of the At revolving liquidity. XXXX, For credit spent from third unsecured $XX.X we $XX.X cash have us quarter September use the $XXX in resulting $XX.X generated the capital a of flow in million operating net million undrawn end million million. expenditures, facility, in cash XX, of and nine ended an on cash providing with we activities and strong

fourth for the outlook of address I'll XXXX. quarter the Now

our businesses, results assets and believe quarter fourth decline of activity lower budget energy customer negatively seasonal onset exhaustion offshore we the sequentially. our will With affecting XXXX

We each results are our are except in expenses million. segments operating products. $XX expecting expected lower approximate of Unallocated manufactured to

refunds. which cash expect quarter, capital generate fourth we flow segment. free By the to will Act positive changes tax working in CARES During from positive benefit and

that For services, survey operating days connection tooling to are services and for in drilling rigs robotic we the services. results floating largely our the past we with a expecting working working count ROV lower fourth few revenue marked the seasonal in quarter. not segment, believe We reduced and during stabilized demand count vessel-based subsea has decline over fewer will see and months due utilization for

utilization range. low project and our will decline the quarter XX% will to to margins are the for decline We ROV forecasting fleet XX% high range the we EBITDA overall

revenue operating mid-single Order operating manufacturing expected subdued at products energy We levels is remain we results our to of in products, on our range. to expect higher business. remain intake certain the throughput manufacturing manufactured For umbilical due to percentage margins and completion in digit projects and in businesses. increase project entertainment

revenue For in offshore decline to we primarily levels from and expect results of in operating anticipated Mexico. projects being work the U.S. performed a lower attributable group, call-out Gulf

the solutions For lower integrity fourth quarter. revenue operating management expect during results and digital and we modestly

costs several expect ad revenue. the revenue The For is from and operating startup on tech down operating defense primarily the across implied to flat with we new higher lower attributable technologies, aerospace project margins resulting slightly startup change projects income to in be and increase our mix. businesses, of to

in to to year we EBITDA full XXXX, of $XXX million the the $XXX range expect For adjusted million. of generate

range to of $XX $XX to to refunds million and We affirm in range for expenditures the other the guidance $XX tax of We payments cash $XX $XX and CARES are capital tax Act narrowing million our expectation million. million million $XX guidance of our in on range million. to

annualized announced We continue estimate launching reduced depreciation at of of the approximately this million the associated million XXXX. XXXX. savings to to since demand million of million looking the XXXX. due closely inclusive of the recovery consolidated fourth Despite of expenses annualized ahead been additional commodity will that expect to of expected the the XXXX. plan, end uncertainties the XXXX a in for first XXXX now achieved will anticipate $XXX currently XXXX flow performance of oil this exclusive reductions the cost We softness of end to initiated to million headwinds expect depreciation, generating full have in million quarter $XX continued energy to activity by backdrop, in $XXX XXXX, $XX through $XX costs continuing XXXX. $XXX plan We reduce positive to prices. these we year cash levels range in and to around EBITDA our And to expense. sector that with of resulting face free estimate We The be resemble actions quarter and for approximate cash

product significant expect a benefit flow final capital free our working cash with manufactured XXXX, also also which milestones to segment. release project from in We generate in will associated

our XXXX evidenced focused maintaining results or address the by exceed or future to and Oceaneering, in work expect and appreciate in in on Thanks $XXX our XXXX's headwinds. free a market reorganizing market. We our team, actions operating free hard and reductions everyone's high to cost reporting activity notes are facility liquidity cash has generating balance XXXX and continued remains The may to in segments process. cash develop showing responded is yearend update us will We now November questions which senior a all significant for flow. operating in we we during for Oceaneering year improving this as forecast of capital the flow expectations gives We flexibility review challenging our performance conclusion, definitive any results challenges be take XXXX. us. improving these we revolving million And have. been remain And to credit meaningful happy in will XXXX. the instituting our continuing will despite this by plan firm priority. in a discipline adapted and in the our quantifiable we synergies and of adjusted maturity maturity a sheet policy structural you and a to meet in XXXX has to January continue as provide EBITDA to interest and energy these will lower business XXXX delivering capture operate Preserving dedicated expectation our profitably performance

Operator

comes Ian line Our the of Instructions] Energy. question MacPherson with from [Operator first Simmons

Please open. ahead. go is line Your

Roderick Larson

Ian. morning, Good

Ian MacPherson

for overview. What Hey, Rod, next Thanks Always the flattish call well-organized. me strikes particularly the year, helpful robotics. good really for morning. and is results very

the have You're year forensics from to obviously anemic. been and QX of witnessing very a XXXX down QX sloping contracting rig

this you see the than business I more So outsiders do. much clearly like

also you gives what And comfort X.X book-to-bill that? on products as had then on So year-to-date. well, you've

some well? it. you. you more like pain provide are I stabilizing Thank palate, two as on next I'd think the get biggest do you can the pieces maybe if those to So the that year see how

Roderick Larson

about glad to because, at give going least talk Ian, the really different. consolidated I'm we to about you we've talked results, a puzzle asked, little pieces ourselves be better trying When the understanding. are

specifically That's talked to talk bit division -- strength see about, in and want we about we've our a bit good, But is XXXX of robotics, where the robotics others. business a the it what everybody part believable parts very of you off those. did XXXX. in us QX the through looks ad and some little that. about, of our I So, we I'll a other It's But think mirror separate to we of QX to walk puzzle, like it about, know a helps tech XXXX. part that stepping the flying modeled from in are That's and first not point image say, energy. it's a that little that's for into quarter really from

don't can a directly working see backs close to but contract their huge working contracts rigs, and you build we we competence more couple we that offshore any can between in that do around some see we'll and think So spring customers And activity. get budgets the gap and comes lift. from our rigs,

big products. some in with a that the manufactured But of reviewed some we but that I in just don't and back that. recovery doing to bring because huge think we we some for and anybody XXXX. things that's baked weeks Same in we've We keep all with there. few want feel So past don't in orders V-shaped comfortable and can what's FID [ph] expect collecting we again, not think

the half good nothing say would bits it's that the what the that So and get that and the can backs some pieces, people we contrast into we're I It's some then things of in other plants. year first smaller for half with would so in that year like of of nothing the it's back finishing saying. and collecting tie the are run, dramatic, work

Alan Curtis

the between cost comment. right. we've from one initiatives just XXXX. going full improvement on of executed and It's add during the that I'm year a Yes, benefits [ph] to also quick

with that decision also guidance. our So into the overall factors

Roderick Larson

Thanks, Exactly. Alan.

Ian MacPherson

Yes, on to in the both is you and expect ad a that then contract And of what grower XXXX garner? thank recent on those. you on more tech, you is for wins that based likely

Roderick Larson

already see and couple of other opportunities. the those in bucket a We wins some

offshore that, but do we and about gain, everybody delivery think to susceptible steady market. growth, concerns some has dramatic the well the think So of not less I

Ian MacPherson

Very good. Thanks, Rod.

Roderick Larson

Thanks, Ian.

Operator

from question JP line comes next Our Meakim with Sean of the Morgan.

Your line is open.

Roderick Larson

morning, Sean. Good

Sean Meakim

Thank morning. Good you.

provide next yes, start, been willingness to to year. the able So expectations obvious reasons. kudos or for willing not your for Most have for

So on that just discussion. build to

confidence working of next free capital So piece and in cash a we talk about the flow year being the it. around big

into X cash hear maybe So maybe could, working expectations where if thoughts, how Alan, It for your cash to too. XXXX love that and cash and we like nice operating hear I'd one-time capital XXXX Rod, some your and the be free to and would for flow free translates items CARES Act.

cash strip that at those the which you'll you out, So where it operating if normalized pieces in you no on basis doubt XXXX? we make flow, stand point cash get take cycle, for Does do this can wherever the sense?

Alan Curtis

Rod let can if and some for add Yes, start wants. color he here you me

Act any free were we that that with the cash from guidance saying the in year, flow significant CARES not For does include giving next side. coming money

events I'll Could that XXXX? on or driving can cash The the umbilical it Yes, drive but capital, well ballpark projects to us that flow receivables, help the primary significant So, in year. [ph], release XXXX. have not the received our cash the one that component related that as year now. that we're over have as keep in expectation right items that we're at working that milestone free That's significant bleed using a expectation as we from EBITDA same with XXXX. of is a say, that's built flow in contributor will we the two business in this most we in free this prevailing will with into

for That's cash to a going it positive free a drive help us So other of prevailing us cash be been will this turns year, item that year. those bit little of the next timing the negative flow. to payments, a it's

Roderick Larson

this straight that to the do even was hundred those year, throw of And you, about got of cost at Think a would over line part we year. all simple of a only it figure out this out XXXX get didn't identify realize thing just contributed of like math, I'd you simple of math tell those results for full is beginning, the say right? and started to next half year. I you million results that these and only the If probably dollars we period year lot

net a year-over-year a those that more year it's lot it next impact stuff than of did cost this So has in year.

Sean Meakim

Right.

for maybe quarter down. Okay. could Fair we enough. through but thought take didn't appreciate left. unless curious, understand unallocated here where necessarily year? $XX run I I And that. that. it just around the as for the you the number and to unallocated rate thoughts any only What's There's narrowed walk little just decision-making CapEx you'll the around next end seasonality one the around year around up maybe for we for guide proper year? I just this that CapEx -- thoughts have million A stand midpoint fourth the you And for

Alan Curtis

doing with first the with see looked there, well We we the type space, our plan solutions, CapEx. see certainly say lower, get We $XX run within ROV our pipe we solutions contract reason looking just that are vehicles XXXX in freedom growth had that we I for of though, were time. the would go do see versus I as obviously, we've probably vehicle. we're we When have [indiscernible] digital digital Yes, XXXX until if in within where we you point riser as this that our would think CapEx could maintenance opportunity at place at unallocated, off a CapEx had rate in investment see million the some the management definitive growth is reasonable from in a the look took a integrity we at opportunity guide, look at bit little in we still some completing. growth at drill as had CapEx we XXXX. I what I we off

element backs continue cut required as we move growth will there of some be So to forward.

Sean Meakim

right, All appreciate enough. I that. fair

Operator

comes question the of from next Taylor Pickering with Tudor, Holt. Our line & Zurcher

now line open. Your is

Taylor Zurcher

well. XXXX morning, the Hey, for on and and as all thanks QX good color

right The $XXX bit Do have [ph], is target first the a you I just including a drive you move middle range [ph] question exiting this that we million it a that on where target higher, program? year-to-date, that incremental faster made cost-out $XXX to than think the program year forward, there to finding continue quite least you're bit that cost-out of DDNA progress the seems ways million year. you're clearly out savings original you've earlier provided you be to as the As target expect cost bit to a that on to anticipated. you previously at in

that on as cost-out XXXX? could enter So annualized number any thoughts where we total end up

Roderick Larson

you big onion going hit of sort it's remaining it of Whenever just on going the think of a I get we're to XXXX QX. peeling a this, right. that model. do like work and you in part lot We got work the

As things; and other at two, you things care one, you find better get number it it and also them, better. you but see find you you of take number

for And get I And think to of for So the the things I then I year. get this still you this most in of runs take and XXXX clear be in first, XXXX we're -- but going see think of things XXXX. that you make Obviously, we'll that looking sort a sure tail possibilities say care a increase long would I It's you time. decline. though as go. big logarithmic that

of you that inside So company. you mentality team gift you and giving the up a a keeps if stood and sort keep it's driving that got

Taylor Zurcher

way in then like recovery the V-shaped doesn't Understood. for subsea robotics. it at forecasting XXXX, sound all in much of you're a And really

months? caught bit tone that with one questions where those your and reasons down hearing from a had to some if you tone I offshore plans spending of may be down? you're just I conversations? back right activity or said customers. it now of think for next the XX they the a whatever COVID other others your previous Or of still the number just over was getting are with wondering could you the your But in to work up what's and you are characterize customers general is mixed respect

Roderick Larson

I chewed operate now, general tone, know of So at tough going things time, COVID. little being like how a are go as same all not of the would the off they say They on through in global all right world. tough They to very conditions. lot but operators. just Generally, kind

So they're back work largely. to

year, underinvestment going from they're support chase infrastructure As amount point where far world, and being to that they they fair as lot and lot they're close offshore not of Not to certainly the going wildcat that work. speak. that also If get oil as the recovery so a economic prices a this see very a far recovery there's they to things underinvestment at of the there's allow that that a But believe on type rank maximum around on could happening they focused supports that's infrastructure continued leveraged work. exploration, of them benefit installed. going they're so already

believe they good that, we kind but focused, And very that, us, field they're X; for good like [indiscernible], things so that's to single of time time investment. work make that work, that it's Oceaneering. like for near And because a

what So by we're encouraged they're saying.

Taylor Zurcher

congrats thanks in Well, the for and the responses. it. Got quarter

Roderick Larson

you. Thank

Operator

America. Bank line from the comes next question of of Mike with Sabella Our

Your line now is open.

Mike Sabella

of kind from these Hey, we guides, long of as sort remain, inbound you year? customer levels? step a bit bit as next production It of about near over next there the at kind prices seems a that, trends your hesitancy Can wondering projects. capital talk key. base little spending is possible the of outlook a if spending you good could are talk the morning, what kind everyone. of we kind maintenance think little for just big how to A current hear as Commodity, whole to maintaining maintenance cycle us I into still or about for with lot was of year? of

Roderick Larson

things. Production integrity me let management. into So of couple just spending maintenance versus maintenance a divide

one, to something that's number very afford everything you the on just going license can't mistakes. is with key, that's management operate, integrity because [indiscernible], just think I

You can't loss integrity. afford from a mechanical

cost will continue and because So they want be at cost a That that to they will better point revenue not It's something invest. generating necessarily. to it's do smarter avoidance.

So solutions. call a be part for good really that. for us believe hard we bad that. That's upscaling of work will to would and it getting thing I can better they not because look we at

I see management, to fairly integrity in So to, lines. management that positive as And already part. barrels -- flow in trend we're production a again, are cheapest behind five then the the where that trying connected the they're already

So going we want we that with And can we some with light remediation to work do think of all that do to if that subsea budget. your and good spends other well to I you intervention said, flow some you support for make that's be sure to commit can projects. see Those kit. strong, make we and generally don't price are the especially have the to and how we cycle most like with long

coming for those hit So going think you next I year. up decent I spots it, to think the are fairly be

Mike Sabella

near And of to capital is anything do this then, structure, return during that point here cash efficiency, help when for pile is put there improve think the the we Oceaneering to be allocation the from in there that over also at build efficiency to kind continue the work cash, maybe way any we kind can the capital to of of term? capital of

Roderick Larson

of you said do the starts to and going in I be of I'll cash with, what's what of you obviously, going lot that the discount, a know, and looking were a sitting So jump but bit, maturities. market? in obviously, there out XX things you it's at just is trading look debt with at there portion to lot answer if mean, we significant used a a on our yeah, is look that let of the we've pretty Alan it'll a retire expectation can things. like debt I'll at little our

So it's still still It's we're something watching. a goal.

I that's we're So looking right where that's think now. where

Mike Sabella

I good clarity. on, mean Spot

Operator

RBC. Hallead the from comes question next Kurt of with Our line

now line Your is open.

Kurt Hallead

going Good and morning. the 'XX you at Appreciate limb stab guys taking out on a kudos. 'XX,

Alan Curtis

Thank you.

Kurt Hallead

can But of know, element which that's us big XXXX. when always ones. you we level know, you're question gave high as a segments, into different dynamics. at And the I Hey, just you kind guys looking most out important a around, your look got

you You know, on like your tailwind about overall gave some for products. thinking when tailwind you're some on AdTech basis for EBITDA, positive for manufactured flat mentioned year positive a you're looks

in be about of taking up could be that and could kind at other a individual flat your information, ones slightly products a start think segment and kind least good year the for year. So is AdTech of on to manufactured on to way to EBITDA, that down basis maybe the pieces next

Alan Curtis

the I be could the more to beneficial. of energy I contracts the going we're correctly have was sector that's challenged. an we'll years half backlog, back it details outside the Manufactured kind of think we think wait certainly racing the be first be on caught more was probably with for I awards, But we working goes. going flavor, be through have to contract Kurt, you of, the their the the do products, from in half what to could hearing year Rod, AdTech that it that where see that on element year year

manufacturer think were we don't I up trying guide to So next products anyone on for year.

think when come it's could through. of of that I revenue some more the time,

offshore into is the You live the that moving of the XX. looks at look projects would business, well executing other of within anticipated group, like It the parts on project we know, probably XXXX. in more intervention if you have

little we tell be that the of next a that So, go bit a wind, into as could year.

the give So you there's better to going clarity. to be work various details through moving we pieces. to need still And

Kurt Hallead

Okay, I that's fine. appreciate that.

expected looking give some in incremental as cash a of you address of this us question of sheet, to are the load of debt you the work at at XXXX? that to some as reducing as extent, as free can flow cash opportunity the the build through balance refi you it the for kind a you the prospect in prior So Or think potential context you looking insight actually debt? and through you you XXXX, but certain on were

Alan Curtis

the it they optionality will I markets the will and do and bring the think to above, you be may to what provide at is I at the the think what be look that right going to know, we time. cash all flexibility us, and would us,

actively we review that. So,

Kurt Hallead

And to offshore guys how energy investors the at are you exposure energy gotten service traditional the you from through well have oilfield guys that Okay. context segment, think in do a to has very finally, the have of and cost. attention wind exposure expense I the lately, other much aware you unfortunately, of plays, market renewable but

Just be some thoughts us updated market updated wondering how evolving. exposure renewable of might give if an to you to you able on the your see your maybe

Alan Curtis

think I like you we that already lot got that we're doing I about very lot came haven't A caused clearance it. mean, most with think I said of realize excited a work. we exposure, don't we've people while I of the in route were it. people still we think

participation RV. the biggest Our the is survey still and the traditional businesses in

work doing toolings. And some the with of and we're

business. alive we stuff with And there. is service it's and build and relationships that more well, installers other the and that more that So and companies

So it. we're excited about

bit it's that little hoping thought. than grows expected. is I always think we it kind a further of But out like all it is we're been

hopefully to emphasis it the it's transition. on it's with of been now, in big energy So got sooner and be happens put some that's

Kurt Hallead

know renewal piece to the can give what of us the maybe you as is, that currently some exposure revenue maybe for So -- you business?

Alan Curtis

but mean, it Sea across a overall part places, broken bit out, the it's not oversell it's good North yet. why try a capturing it a we've large it's the some us this our Coast, But good, a of right? work in only still that's happening to actually of a a activity of [ph]. because East globe, certain I little at And portion affects in small I business decent not been of fairly it's isn't it's our pretty it's United a been because here States. ton business, haven't just We the

Kurt Hallead

Appreciate great. Okay, that you. Thank color.

Operator

with Blake Research, is from comes line question open. Next now Wolf Gendron Your

Blake Gendron

versus for on revenue try AdTech thanks. business Good wanted give back I circle to Yeah, and us split morning, to the government just commercial.

was see space within obviously defense broader business to some put much a government That's and AMD would on just about election. On two point over and just seems But that XXXX I versus other US XXXX worry And versus much contractor spending? a rolling thirds problem. the feel happens guess the about it, for fine helpful. tech old be think to get in I to that what beyond. government government. We'll piece, with the how space another spending side better exposure aerospace is there of be is how then

Roderick Larson

going me to let Alan So split. talk to I'm let

contracting. about talk I'll then So

Alan Curtis

Okay.

and effectively aerospace applications I of commercial are a it's component. there So, small related. it's, is for few the defense XXX%, government made mean, but small space, a

is related. I it's it XXX% to of So as think government think best

of space segment broken to have component We out component itself, itself. a be not it tends smaller the the overall by AdTech but

So the defense lion's is share that provide. we of that see what technologies in than more traditional we a

Roderick Larson

making it's it And continuing goes, been as of new a work contracting rollover but that's not do it's is as contract. has work. grown, far we lot work That's the

look we what we most do, change when or a what do, go at things resolution. wrong, of or so administration of would be that And lot continuing under we could of a

don't see we of risk to So that work. a lot

think coming that's As the moon seems as at good work we work new return to the that I to things bipartisan NASA today. going really up, talked about have support, especially far the on and

they because with as And with felt just live for comfortable yesterday, met and of and I colleagues we're they support very that group what to So, well. it's day. breathe the space close a program, every

there So business. that's work jerk it some going dig disrupt it's, would be of the a to to have but I knee would already have there's always deep it on. But, because reactions, government risk in don't lot could think that

Blake Gendron

fair. on don't totally the much focus I smaller want And and is solutions more digital of of exciting. your that's But to That's, the too one parts integrity business.

a intense some changes directionally internally made little maybe commercially think of bit you and I more the become there.

prior question. growth could I appreciate I So the appreciate segment. the potentially on capital the And to go rundown that

you currently? commercially provide in on you opportunities, you opportunities, would guess, I'm being any more for intense you are these the critical got then you were that the friction to until what you going that to anticipate just those to modest pursue scale Or various I segment? applications? wondering incremental opportunities services focus in And consider margin would if As

Roderick Larson

it's on Hey, management man open to for a mechanical to I've and to and integrity and and up that it and put time, think something great has inspect been like having of this. excited that. work for especially passionate all been be focus able answer I without for because piece area so long our pipeline question. inside great I'm say, a things the customers us It pressure want the I vessel to a about is while, hands very

they're So, go what some to they we of this want way. about talk directly analytics. we this when And predictive can do, really

data some drones big this it in crawlers way. men of get and used So out sensors, the as that of is, embedded to of some processing,

got like expertise, the more this to do there's to the opportunity had ropes well safely. So number we from because subject we're platforms. that, underneath one feel data gather matter we've positioned we've guys hanging And

So also today. we've side machines. we before replace the can robotic take ropes gets once got did them how that off out something machines, know this men we what inspection water divers and replaced them the gets the we believe with we done it of took we and done is with and But

data So some there's has of and generally been that of intensity, ahead. think some this robotics that software really the need vision I the we capital And in speaking, that that business drive invest to lower but is the see part good. to whole do gathering

you have invest effects, developing very but robotics, software they're develop, early, said you some, scaled. And invest like frictional you some you early,

you that once the huge much, get like go the some it's you the And developed. not is capital vessels. while scalability investment much of product so building investment better, And through of

to And a I I because if So market there. you there's it's poll buck great it. high the will, for the think space pretty is for bang watch, that think

Blake Gendron

see attractive space benefit you that disparate because debt, a to look looking end either some if which opportunities technologies do you or I squeeze the technological particular, from And which of would had M&A, just you in perspective more [indiscernible] in markets. because you're you could bolt the to various of from segments ons do and world zero could think different from one Understood.

Roderick Larson

our I most how train with ways about talk would in businesses. when And be unique and of think ons maintain application in it lot robotics, we and robotics, really and able market there's a powerful could leverage always people but and think I and how I operating. mentioned and run robotics, the had our to partnerships to I for there's navigate we operate that robotic quickly idea, know a of in out us. get put service, to say, that it be just though, deploy how who, to to Those think bolt to to could it deploy, arsenal, what somebody get about take specialty whereas a how doesn't that great really to who how I our knowledge

So that adding maybe us. I logistics, for opportunities think those again development, capabilities are there's marine for software

And going how have business. So it's be healthy accretive because even we just those if pretty it for we are scale, is longer more in are to maybe businesses? term near ons bolt say, challenging, large is broad term. those for across to large little something If that's the look the scale, it a

Blake Gendron

guys. very interesting. That's Thanks,

Operator

Smith Advisors. Instructions] Heikkinen the Our with comes next from [Operator line Energy David of question

Your line is now open.

David Smith

margins Good about little Very the better the and we solutions said to to possible segment a I segment and and product realignment, lines. that wanted to that getting picks I the negative has everyone mobility from and it. ask without those of you. and I normal? losses up back with to get else around ask the service up, outlook your view XX were about Reiterate how first breakeven surprised COVID what half. was morning in guidance. parks some a helpful understand want to but to the And And when the at business appreciate it's theme thank margins back did got I that uncertainty there's eliminate approach whether

Roderick Larson

it's That's been entertainment, of been challenged sided parks interesting, talk part a And business an have two little big half the challenged. solutions the That's business mobility year. been extremely has really about even of first that's the of Most coin. it. a theme bit been in of entertainment the our The course, business. is of any

almost they of So was in of first lot doing. everything year. half on for China work were they actually the the was this slammed a brakes on And our

that China that's now. actually right back So there very biggest and challenge were But about in there. challenged the to a was getting way small

cost pretty we capability. some down that losing in without we So did. business significant shifted We cuts a We lot. made where could

reaction was there. big that a So

experienced for people could keep of as after up. this running plant, one work If plants situation project are because it's interest is to we've that well, more half like a you think mobility that, hospitals make other other solutions global reduce on up plant order in half and to plant, interaction we based that of interest manufacturing a business the been the the of products, is in smaller done we've adding by date, in these standardized you a but that definitely to the working we've look at to of though, product people in is in lot anytime the about reducing more pandemic, a some sure number project a been in saying, can year. the customers and interest keen renewed manufacturing we've Definitely now, the going

be I higher business. businesses more visibility questions expectations exactly, that which would are we about it's believe to aren't that that that when develop. So think you you trying of and a to curious to just understanding make little challenge are two feel But kind can real, we looky-loo, what expected, sided to we those those to get some higher had and was, or make that things speak, forward. there we some people ones knew chasing that is when interests that get sure can a ones it's so know, ever sure been maybe which we that you won't mean, the And going are when

David Smith

base, the one and looks activity or like since Appreciate point higher your question, XXXX. any color following QX it it in vessel the other at than the was

the or basic pickup [ph] outlook XX the includes vessel activity higher whether any your XX. Just wondering compared that if give to anything color you around in could and

Roderick Larson

little sauce is that challenging keep the a with bit because better big I us competitor. for a were And you vessel sometimes it's operators we operators. know, for getting would while, and just a say a relationships the way in vessel

so short more we're bit number that term higher operations one, your enemy. But doing spot our a little friend vessel And in was well. it on of to difficult now reconcile as charter or

with I we're we to resolve relationships. significant a a up think vessel just And contract operator. those starting picked

So the better. getting are relationships

just of think Our placement for the better. by And that's others customers. getting I is owned we're sign market a building on board, part how vessels that of

David Smith

I it. appreciate

Operator

over this hand the closing There queue at Roderick for are no questions further call Larson comments. now Mr. to time. I'll in

Roderick Larson

no all the I'd thanking concludes everybody thanks, for more wrap since third XXXX this the our are there great quarter everybody and joining by questions conference Well, up call. And for call.

Operator

today's concludes conference call. This

You may now disconnect.

Oceaneering International (OII) 29 Oct 202020 Q3 Earnings call transcript