OII - Earnings call transcript Q1 2021 | Oceaneering International, Inc.

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Operator

My name is Pamela and I'll be your conference operator. I would like to welcome everyone to the Oceaneering's first-quarter 2021 earnings conference call. [Operator instructions] With that, I will now turn the call over to Mark Peterson, Oceaneering's vice president of corporate development and investor relations.

Mark Peterson

Thank you, Pamela. Good morning, everyone and welcome to Oceaneering's first-quarter 2021 results conference call. webcast replay being on be is website. Oceaneering's call and will a available Today's

the are our call and on president, us Joining today officer, Alan senior will financial and officer. chief Rod who be comments; providing prepared Curtis, vice executive president Larson,

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

comments financial non-GAAP measures. also Our today include

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

Rod Larson

quarter Mark, the joining which with today Thanks our and first-quarter be incremental call today. another operating everybody. good results, sharing Thanks, pleased to efficiency gains. you of for XXXX discipline and morning, We're reflect

transition our outlook efforts. their in our segment on how outlook, carbon While to comments the stable and levels supporting to customers of the next significant has XXXX well developing business activity of OpEx the more of COVID, my and our discipline energy Today, recovery, lower by thereby, demonstrated fundamentals, traditional our thoughts combined performance our as ongoing for several consolidated regard increasing and demand. demand focus with on increasing consolidated plus the with markets the and I'll years. first as services quarter returning with the created second is expectation we're continued most confidence needs improved XXXX, of as, over industry supporting remain XXXX, challenges for of The for products quarter

results. the for Now

our share. to quarter. restructuring $X.X losses our associated focusing reported $X.X revenue continued the share efficiency, performance for operating pre-tax net We've progress first-quarter quality, EBITDA, of adjustments XXXX, operating net during These customers. adjusted I'm first positive loss $X.XX adjusted rate the foreign solutions income generate our $XXX made and exchange adjusted the of we and value-based other consolidated by quarter, of million enabled pleased segments with which included to and $X.XX the expenses, operating EBITDA income our impact and and the million $XXX adjusted on operational XXXX. of $XX.X we $X.X recognized and was on during revised million improve of with led million, to or our our and For first-quarter narrowing safety, Based on $XXX driving Adjusted EBITDA of our per guidance million range million to expected million. a or published as per results estimates. both for outlook, results consensus are by each

of by segment Subsea slightly revenue. SSR business operations at Robotics look let's the first flat Now on operating adjusted or our XXXX. higher quarter for income was

survey the tooling remotely respectively, XX%, was our our to between XX% SSR total and XX/XX and activity. SSR expectation Our of XX% SSR support higher-than-forecast days consistent our The due our margin compared split or the operated our revenue, stable. as and revenue as business ROV activity split to ROV quarters of and exceeded segment in prior remains businesses was pricing percentage with prior recent quarterly combined a original vehicle Operating in quarter. survey drill adjusted EBITDA immediate

days. in offsetting quarter the to expected quarter only the were to to an on XX,XXX, anticipated, decline, services vessel-based as compared due lower ROV on with drill fourth during on XXXX, had fourth the seasonal XX,XXX increase higher as days higher activity. Days we in of days compared As higher slightly decline support

drill support XX% and fourth-quarter versus fleet XX%, use services XX% use fleet and XX% vessel-based respectively. Our was of in in

and quarterly example, reactivation flat pricing our or XXXX. under end was we Average to day systems XXX maintained we XX% hire quarter, activities. the XX as with ROV XX% of XX%, stable. installation the XXX At quarter and slightly continue from floating down March, our Overall, per rigs we count fleet first had on revenue in of the the on contracts contract characterize of XX%, of variances, utilization For ROV in over XXX December fleet ROV ROV of on contract. fourth Subject contracts fourth to higher work we sequential to hire under and $X,XXX to market the had when scopes, our approximate mandates geographic associated $X,XXX for mix generally favorable was on with achieved rigs drill share primarily quarter. expect the revenue support during X% we was The due per increase XX day certain XXst, XXXX, in continue of XX%. floating to

products. Turning manufactured to

operating adjusted X% did declined of operating in had the fourth not occur the from in first businesses mobility XXXX, XXXX in fourth Adjusted chain weak that from our segment and lower decreased quarter in Activity expected first from of contract remain to during quarter which the on first-quarter supply the benefited X% Our quarter. quarter first income margin income as of the revenue. XXXX savings solutions negotiated favorable XXXX. quarter closeouts

backlog XXst, our million, compared $XXX products was March December at XXst, $XXX XXXX of to manufactured XXXX, million. backlog Our

activities ratio the higher of OPG utilization amounts due in income operating of ratio quarter Our revenue. of the and Projects of indirect of in Offshore start-up operating ended the the during higher was of from installation flat work. quarter cost first-quarter to XXXX stable. activity XXXX work of lower offset margin fourth Mexico substantially maintenance, first, IMR sequential fourth on in XXXX. while the to for compared and Revenue or the GOM XXXX December in were or by or intervention The benefited Group for Angola. repair as income book-to-bill field Gulf intervention, amounts holding adjusted a adjusted XX% increased quarter personnel, with of assets from the first X% well relatively of XXXX X.X X.X year, the was rise XXst, with increase as year on project increased book-to-bill

digital management or For solutions and IMDS. integrity

operating margin the in First-quarter was the than where XXXX, how XXXX fourth The adjusted quarter XXXX driving XXXX and of personnel. more which transformation performed, quarter of use work is effective from higher of on in X% fourth revenue. quarter flat of from first income operating and is of benefited X% improvement in adjusted moving income

Our were as that of allocated marginally fourth of operating aerospace the consistent compared and margin on revenue. the defense quarter technologies Adjusted -- first-quarter on or fourth ADTech of for to from adjusted fourth 'XX XXXX. flat was income lower, $XX.X million expenses the improved XX% with achieved quarter. operating of XXXX On income quarter XXXX

of we annual the by in accrued payment operating to specific operating activities, awards million the was related in cash offset good of employee quarter, goals During prior the first mostly as periods performance of utilized incentive performance. $X.X attainment

the $XX.X no million to of and used for during XXXX. cash maturities cash cash addition, reduction growth borrowings $XXX our million were the At we In until November maintenance of the capital largest and million contributors two under end $XXX our $X.X of loan quarter, no and expenditures. cash was These equivalents, the quarter. items facility, revolving million had credit

our million million adjusted higher of quarter our second-quarter $XX improve a the outlook expect basis, to will EBITDA results address with second on $XX On I XXXX revenue. sequentially to XXXX. we of the Now for in consolidated range

first ROV as higher ROV tooling both quarter. projecting first XXXX XXXX, to quarter in For and higher to SSR, higher we our in operating are drive our compared activity second-quarter remain are to is we by anticipate compared survey seasonal EBITDA operations the segment, the activities. days for businesses vessel-based profitability. and on adjusted to drill expected consistent, margin increase SSR to support forecast as

anticipate we and lower products, revenue profitability. manufactured For operating

by energy We award products encouraged are in activity recent our business.

continue to businesses. solutions mobility we expect our in However, muted activity

For operating OPG, we revenue adjusted anticipate higher and results.

Gulf Mexico. quarter. the IMR Riserless is continue And the in pickup activity well in to seasonal a addition, project light on of in through expect expected second Angola, the We in intervention which work

operating operating consistent IMDS, hire of margins revenue results relatively flat, For are first being XXXX. quarter with relatively the with direct

For revenue flat higher results. relatively ADTech, we expect operating and

higher higher revenue. mix. compared geographic are in on be expected lower operating results ROV in mid-XX to following we range. Unallocated in expect days higher of for services generally full-year services consistent SSR, the to by days and change shifts SSR Results with remain to adjusted minor low- expected some space expenses for in operations improve with on those to with growth levels the XXXX. for are XXXX, submarine expected expect ROV segment, from higher. margins on dollar improve achieved Navy, to slightly flat to activity. projected are remain EBITDA with tooling-based activity relatively are adjusted project to expected to flat Directionally, our business. forecasted our Results operational as be a on levels million engineering, mix XXXX expect we and are contribution and repair for U.S. We

higher drill XX% vessel-based range, For remain mid same second ROVs, utilization third during quarters. quarters. seasonally percentages of the We seasonal services to service and we be fleet XXXX, higher second XXXX XX% to mix with to expect high ROV XX% with high in during third -- and and vessel-based generally again, the overall our activity estimate the higher support the for

remain before share continue XX% the drill Oceaneering floating drilling market there approximately rigs XXst, expiring March range in We foreseeable And XX to for ROVs terms support forecast with quarter. the XX future. onboard XXXX, market of our as were for will that the contract third

begin new XX of XX contracts. on our same to the During expect we rigs ROVs floating period,

we energy decreased to result For the manufactured XXXX. adjusted performance year, revenue of expect intake segment primarily in decline order businesses during year products, as operating and a over our

contract XXXX, the to expected of $XXX is wins of We are four XXXX. over which the activity in encouraged, however, drive first million second months half increased with during in

remain from and the are We the mid businesses higher be income book-to-bill muted full XXXX. single-digit see will to X.X for range our of order in in continue marginally expected low the to to solutions operating for We that to margins year contribution the in will mobility XXXX, ratio be range but X.X year. our until forecast and activities segment activity

in us in both muted into Utilization basis to needed lead IMR the higher XXXX. of based continue Gulf the And was activity of to expect the and adversely due year. more and seasonal in spot expected to impacts pickup For through is meaningful in The a on level, more a in in OPG, XXXX, with to increase we revenue. low contributor the intervention delayed of the segment coupled was Most resumption activity the results expected project which in COVID. operating uncertainty in oil of this as owned oil our adjusted XXXX, that enter may which an to Angola, price, business second charters improved on and the we to has improvement a biggest normalized on Mexico, light quarter impacted noticeably, which XXXX. well is point of vessels, stable chartered higher expect Riserless this has the in prices,

been As current much past work has years, the sensitive price. our call to over Gulf in nature of Mexico and out of continues several to case the be therefore oil

expect we increase IMDS, adjusted operating income. in revenue and an For

higher up. of XXXX expect income to contracts single-digit forecast average in the throughout half as quarter we the this in continue booked operating drive year, year. revenue in adjusted first of the the XXXX quarter We the incremental margins business. year, increase Adjusted of and fourth the the efficiency high during on we back for work margin expected our more range as operating that ramp We will to are

ADTech, we operating in with operating consistent XXXX. -- income revenue with operating margins achieved with and those results For higher expect results

see good continue growth subsea We technologies business. in to our defense opportunities

win the the landing change XXXX. work that the disappointed project announced of not potential segment expectations team loss Dynetics were our for on contract not NASA, system does did improvement we recently in with this While human overall

and payments million organic $XX of $XX capital million $XX $XX million approximately growth includes the expenditures. million in to million. expenditure forecast be range We to million XXXX capital income $XX remains XXXX to million. for total million of Our and between $XX maintenance tax to our estimated $XX capital of expenditures, This $XX

Cares expect expenses the during range we are per million addition, expected receive year. In tax in refunds to to average Act million mid-XX the Unallocated quarter. to low- of $XX dollar

XXXX $XXX With cash free in XXXX end million debt and in of Now we maturity. cash generating of at to well-positioned turning the the XXXX, are expectation to of that of sheet. balance our our March address generated excess flow

solutions work models, in vehicle, and the safest maturity. until development actively this and Oceaneering will digital numerous the footprint to digital a a and robotic applications, vessel outfitted to open throughout facility their Jones stated situation And and focused Freedom chain. or comes are January from they optimization, role and available up in our such as achieving increase comments not learning this engines. have fuel-efficient of supply all formulate and of energy to of most we're other November $XXX facilities. these, in just of a machine XXXX XX-plus like enabling a million or play basis businesses, facilities. I'd the as energy our undrawn cleanest, assets, and on necessary state for we And reminder, revolver their and assisting pending especially we freedom efficient manner government-based on few Most, all how and regardless $XXX where form robotic recent customers maintaining years, our until are few a the vehicles. with continue customers a energy million our continue to we've enabling of and There strides we few technologies the role on energy addition important The maintaining wind, class us leveraging The work, past as how now more of available will when in commercialization to commercial machine onshore our our their items. these assist of reliable on continue on to will challenges and opportunities in continued We has carbon non-energy whether in changes our made XXXX. industry. Liberty how whole related to management review each sustainable gas, of address inherent energy. we producing hydrogen. soon-to-be lead. and predictive in And if name integrity an goals, the expected it oil, plays make demand IMDS offshore to and also with we're in is throughout attaining IMDS significant adapt additionally, analytical pivotal done in years, capabilities net-neutral as companies the software-enabled piloting, Act growing focusing forms The remote customers Transforming the goals, vision But carbon delivering developing developing strategy

year us XXXX As our our year, In are energy to goals. proud changes I market indelible past we to focus of you and outlook EBITDA range first-quarter continuing the performance $XXX of and $XXX guidance balance give can an increasing confidence see, for million navigating evolve products, Oceaneering. we support demonstrate have a the summary, societies that to the XXXX, commodity the refreshed offerings for recognize half has footprint back our the activity our to adjusted clean looking customers I has to us continually succeed to for will million. a for narrow environments. improved an Oceaneer, am service and of and The primary value remains price cautiously these ways strong our general and and to years. while in position energy for the also management proposition that And Growing company in have in we're we to our employees the navigating assuming services and who sufficiently are in on macro and improve several businesses environment the levels of evolving shown left the and optimistic also our and resiliency that of remains customers. challenges this would product stable. business challenges, sheet and Despite profitably the strengthened our like quality to

always any vision our wealth a might John. Never the Collins John board the to take Oceaneering on you and shareholders. company now and increasing And our us our improving questions chairman final services appreciate be our you, cash As are of generating product respected be be happy position, reminder, John's the many be and Thank strong positive by free to have returns. we of transform of liquidity interest of safety May continued to in our today. everyone's board. succeeded and Huff, will you continues rolling maintaining net and into and flow have. helped We seen, will focus leadership XXXX, as and committed in compromising in we'll off directors leadership recognized J.

Operator

Bank line question first Mike the comes [Operator from America. Instructions] of The Sabella, of

Mike Sabella

Hey good everyone. Good morning morning.

So a wondering end bit of range like you at to kind the the talk maybe But just could you range kind imply are the how the where XQ potentially we I really up step the bottom guide just down Can bottom the of a narrowing bottom in might bring XQ and second half today. if just just end. and the of looks of of the of thinking of you be talk if kind was that of and guide about we sort should the that? through of little a us some we look under take why what bringing just you at rain did things of could kind from it

Rod Larson

Yes.

new it's a a with at the got couple the And good sure of But permitting we that far everything getting and the think long happen. seen, But we're and of our and Mike, of we've been something and I as Mexico going administration, work done activity. think we've work a Mexico. I of well call see customers with in as to standard really, story. happens there's take that a the good cautious make But working. continue Gulf commodity new a can look at that stuff, not good course, Gulf first really price, -- in we'll the about has so if all, things. I of were guess,

while think good that that possibility, do as So that we activity strong. stay feel will a that's out I there

have got but We've the we've the in in other put at that longer the umbilical the much businesses connector got is, plants looking can that Greylock faster businesses, we're also how do particular, we time a products, plants? other turn. generally which lead thing a into The manufacturing can

So can that up. more if us -- throughput get there brings we that again

there, bit then stories. for a questioning the little big just half deliveries it's some are I'm the got happens back to So -- of of customers on I weighting little we're We've not when just back we that year those a -- in to generally, bit that of but we get and some or need take and the products again, the risk there's not going of of manufactured what old ready same there's think, to and just sure can make finished. kind whether

see -- of total leveled there, fourth-quarter -- some QX, in good that's the we the the Alan So, uncertainty, activity at least, variables. those and wouldn't I give are downside, in anything? add more course, half the we would to feel should upside I the we stuff call where got a those for of year. maybe just that going are than pretty got you back the but think the you it but the

Alan Curtis

certainly think it's that's a I something drive just brought that's it's Right see benefiting last That's something year, the OPEC oil we No, like something or us markets. in changed, saw now, down. uncertainty. plus, that We the COVID could talked happen. markets the really whether stable should we really that about stability event price to plus OPEC

if that the of some the case. fastest, OPG things be would impacted typically our move we that those business And say was traditionally

think see price, in toward more we the continued upper be looking I end. if we So would the that stability

Mike Sabella

lot of to Robotics Subsea gears go We have And of a switch off last a given history Got question kind it. if resegmentation longer-term just just of could the maybe year. margins. then and around, we whole Understood. don't

anything so segment near, Subsea Robotics? that now sort work you normal, do seen can we of peak at that reported is the about more segment? of where we've kind If get from of in What longer-term, guys sort and medium-term are to for margins you where all far. of right or of it's were You kind think

Rod Larson

I I that the it's in for comes of moved really look more were are like as and were I'd -- differentiated products upside, I not be there's survey And for look a with margins going movement some think when we market-driven the ROVs work like freedom get wouldn't more big up. rigs where lot wild don't But prices to rebound, to big, start and think scarce. and mix, up. there. from offer those technology. the of the scarce incremental improvements think I drive strong swings, the SRS and things scarcity

technology I the think watch you'd improvements.

customers there's see with I carbon some financial really has the offer it's and buying about we freedom, a and value down or that's carbon from that reduce offset vessel if -- does manning that a that's not think carbon the a value. that think here what's on we if you're just other delivering There's days. footprint. you're can solution And and for really things to our important that of available those liberty their our real products where credits to that customers a

kind So see they're those I that I'd not That slow think some changes I the changes, thing for. steady happening. not that's they're -- of market are looking where whipsaw be

Mike Sabella

Thanks, Understood. everyone.

Rod Larson

Mike. Thanks Yes.

Operator

Your next question Macpherson Simmons. the comes Ian with line of from

Ian Macpherson

morning Good Rod. Thanks.

Rod Larson

Ian. morning Good

Ian Macpherson

else repeat -- a the I'll world I the but little same the guidance. a -- other the I bit not potential see base of that. What with else is second in expiring of an on in contract bit the any possibility case the but that. segments. your exclude in base the that relapses, Rod? question in LWI that's just follow-up besides versus first just What around just half? it let's Maybe the in just minus in half don't obvious the products, QX? conservatism

Rod Larson

so the nice just well, I'll long of -- had -- I'll some our really It couple years, story and work. last we say, season

It was hurricane unique years, quarter that the of to last couple others with time, will was we haven't how work that much just activity quarter, fourth drove gave quarter and about some season. cautious kind seen activity than fourth OPG back a to us, the of stronger third half that longer from was every have. of Some

strong and biggest if stable we going the steady you're thing if year, going a to the So thing the the benefit from right? looking another we with could year price just you're how get to probably over oil more see back plays price, we're to of And -- at along the oil I'd -- have get see that trying out. also that's that's have when year help to that that's say, us half to that. and but we're compare

of we the So kind cautious spot. are could right we pick are being and you

Ian Macpherson

OPG, really wildcard. focused biggest the on really, is So

Rod Larson

OPG and they Robotics especially weather due here OPG get extent that Subsea some same then of affects that same to also the get from seasonality. the and them boost that because work does just, And they -- in the GOM.

Ian Macpherson

press through Okay. comment the the for XXX. recently release a and or this year. products that, sorry. misheard Caught by your confused on either for repeat both jammed I, prepared April book-to-bill I of If in could on orders ask on was products, your for remarks

Rod Larson

We to full-year X.X a to book-to-bill. Yes. for X.X guided the

Ian Macpherson

Okay.

there order an rates. trailing from So quite acceleration

Rod Larson

one see If lot very lumpy. to you these in a awards continue thing this, are of though

customers So of nature. in [indiscernible] couple if these we continue pretty to see are progress a our substantial with their

the the get see awards, when I think. inflection we that's points, So when you'll bigger

Ian Macpherson

Okay. it. Thanks, Thanks, Alan. Rod. Got

Rod Larson

it. Got

Operator

of the from is Pickering and Taylor question Zurcher, next The line Holt.

Taylor Zurcher

Hey, good of goal? where you're thank on you progressed As see. us just XXXX, activity other most deepwater in the in really awards about seeing perspective? that world, a that's particularly, talked top, in around But bright you you the could probably shots regions Africa is green you obviously Brazil the encouraging shoots Gulf help and to think And are the even seeing at it Mexico likely oriented from continue. morning are right now your to West and the products more source segments, manufactured broadly any like spot that through activity deepwater a about we've and like of feels

Rod Larson

be we Norwegian yes. and say, energy in holding been has mean in that Latin so would America, thinking been and is States. example, Northern you there Brazil things Shelf America. out, good Surinam -- reform obviously, Northern Projects positive have for thing. that steady, Gulf whole Mexico very the one the and spike continues good. the Continental a to the been Things happening Latin thing We're and about United been that's strong shoots. Guyana up and and said be -- been continues I to both in I see pretty there's the South there's green I'm

So of happening I think that the about are projects there. some

the So, in good I West going Africa, an take puts there. it overall, challenges you it's going hard -- more actually, some Africa so as about. to It's of I again, We've Africa. other to that talked and be things would got -- there's I -- of is all that -- of call But takes. the that -- there's all places would the kind it say it's yes, just we some strong. say really things more

the not You probably like it space to got that's to good. for the caught they that's all get that in world that But that, of we've could could that they've Mozambique see -- of unusual is to side cleaned majeure there. watch get -- it that, if -- it right force got some rebalancing things part tells the some up time, we'll but be

Taylor Zurcher

you that wondering such transforming a could that it's doing contributor, us That's margin you're really and talk update you're it's small talked pipeline Okay. in progression segment? nice a -- of continue building but the work realize give about, earnings way about IMDS. seeing flattish if what has I on I'm basically up's how bit in And margins an see to helpful. moving forward? my follow you've in segment. little -- as just And to improve to been that maybe at smaller revenues you're the opportunities

Rod Larson

integrity that data is work the to of is we onshore. mean, more to then inspection, talked the I that But people. for thanks management things -- asking. doing haven't remote that -- a work be past. and we the an -- those moving that more to of modeling, assets one and from as Sure is it just worked Yes. in it talked to it more much the being about inspection sending more work, We're bringing access more predictive about

to of think in been efficiency penetrate for bringing the asset to the has the the asset, customers been But data markets. handle We've customers. value change people and a we've on new instead to the proposition to people great. and got grow So able bringing that we're also, stronger different

to but more machine So prize It's a to what intelligence, the growth predictive continue think of there, and people value footprint the needs vision, application for moving modeling, talked that's do the is about to I inspection continue got an management. to to keep real technology, promise we to Talk moving great opportunity we've and really about the in that from margins getting that's has chain. see moving global so there business machine the and learning, integrity to We artificial place technology grow up been that. where the to the business. grow me as the

Taylor Zurcher

Thank All right, good you. to hear.

Rod Larson

Yes. Thank you.

Operator

Your comes the Gendron Wolfe of Research. of next Blake line from question

Blake Gendron

Thanks. Yes.

want to Just segment. come the OPG to back

variability margins? on sounds back I seen out endeavors roll commodity, in potential, to that a some otherwise those upside or Some of the companies further profitability IMR up. out in be of with year. like, potentially off wondering, things. Angola and call Isurus half the the Angola between of and nice the handoff it kind what of you're see the We first work I'm just follow here few two in XXXX. pick to and know meaningfully guidance. change Is And seasonally then, going potentially segment one [indiscernible] strength through profile that

have some you this. maybe So visibility into

Rod Larson

hand me with the dramatic I off. Let shifts see don't start there.

levels I that to the shift, do need that. make -- need activity margin we do a think was do we it So

add utilization about have and magic under we really assets we that's charter. So that mentioned contract get happens. -- being fully getting with to that And allocated able that assets -- got to where the we spot then capacity have you little and bit that that a of the pretty we get to currently to

they're of those So big the part just we'll of half campaigns Farther hitting OPG to are them. out, be end of high they for kind of they the I when of it. they're a be I good, wouldn't sensitive. second hard year. say you times, the lot mean possibilities they're I to But a mean and tend price on work -- budget predict. come, sensitive

to add you'd but quarters, anything that? to don't you them to wouldn't So I -- to venture out predict Alan, many want

Alan Curtis

Yes. support the year project half that was we add thing the the when of fills intervention that's first in first OPG, half lot also the that I that in earlier the have July we're one generates look the fill in remiss predominately only I timeframe. versus in you was, services at not the that have a of executing here of back the would half, we well year half saying the and first revenue contract but in

year that are look does you the projects in replicate on at step the pretty we're of itself not two first back working that half the back half. half, So certainly down the in kind the those substantial revenue

more of out we that in call back So type see need to half supplement it. to nature, IMR activity the

we of be to visibility those shorter bit tend right this calls don't kind get. part greater little a that have of duration why phone into is we So They now. markets that

Blake Gendron

to That's allocation. appreciate totally to I back fair and detail. come the I wanted capital

that You mentioned maturity. XXXX some going that looking to be and to of optionality the the attack you're

down to Are in your revolver, Would businesses, potentially of foremost in think segments. opportunities step reason could you some growth nonenergy especially M&A or you than for your get you've driver saying out capital here a be a M&A that called where avenues any great some after maturity nonenergy I XXXX. you? later? allocation the sooner late in rather be borrowing not, or there on noticed capacity got You organic mentioned Obviously, the

Rod Larson

tend -- ways we They is. to to they competency, our be there use think pick Marine. core I I we we when within big kind of think I that transformational particularly, tend that technology those, think don't up be can can about -- they tend to go things. there mean be

of are It like that, we're preserving we howdy I I adjusting But optionality, on then first of debt, ratio there. setting as part our we big getting kinds at a new operating leverage foremost, to looking about access that kind go is things comfortable think early, always and opportunities. growth think of -- those are things always the a retiring a mean investors pursue are So with thinking the debt capital. and to so what still we and maturities, I be addressing when we'd the as normal that about talk

Blake Gendron

the Thanks. appreciate Makes sense. I time.

Rod Larson

Yes.

Operator

from Your Evercore Hoh ISI. line of next with Samantha question the comes

Samantha Hoh

elaborate Or if gas you type traditional curious kind being consumers? from and couple on how a of transition if out just my by? oil quarter guys. is couple I your for work? the ones I called Hey, just question. of works could that were on maybe I driven benefiting also what times taking and I'm SSR. of energy in a quick this Thanks is real wonder have it some survey the first of

Rod Larson

is traditional this right in our most now businesses. of No,

here predominately the Wind done for East work into and We wind work have that arena but customers. the specifically, doing we're traditional is in with Coast transition offshore

Samantha Hoh

aggressively pricing? And sort taking customers advantage think just maybe more of are lower getting back they about are offshore? just of Or

Rod Larson

of is moving capture I the and first step. it's kind Samantha, more it's opportunistic would of activity, sort price it of than any say

the I of So well rest bodes well. think it businesses for as our

Samantha Hoh

cost Liberty with I'm then those curious sort more right Great. what that the And to of, newer have the highlighted. your if type Sort of working are it Okay. ROVs Freedom other ROVs now of question you those? assets? and would be

Rod Larson

Sure. Well, used the having can Subsea an can installed the and things if via Liberty. the continue work you. surface. the the have with got Liberty in system tester, field it for It's got who Sea they've do and in North what primarily Liberty it's there asset-base while the And and is that know it they're to let power, without you they monitoring happening that me leave other a production are exercises, to do start will. doing they being boat communicate battery tend opportunity while bouy to customers

cost bit of that a to the there. boat by quite have cost allowing that footprint not the the carbon boat reduces of that having them So or

there. spares, of opportunity of with an vehicles we -- and these and lot these handling build of else, almost That existing lot exception system Freedom, because a form fact systems. to of that's compatible vehicles the or a reverse utilize all a some So that everything the lot shape of the system are of way in

manageable, cost pretty it's the the is So given kind not options. a huge of expense capital

repurposed on Isurus, use system. good is got when news equipment one an in happens. that's I it it of the because So going Isurus lot it's the interesting a is and If

very in for in and actually because on -- are cost to it's is which us operate customers you they currents, cost there to the if effective our get Isurus higher great these see so by it benefit per operation system value an So to the means more put weather releasing the can days most -- being are of can the vessel we and installers to year directly wind in conditions. higher -- and and ROVs the of offshore owners operate able them installers themselves we're these and

year. if huge vessel is that -- a let's you say, otherwise you've out work, only would So can up value a there being got that see that where a two

days If to you much, better. that them is XXX much can and utilization get year a

So survey. things or It's we're we resident survey, more a a Liberty a to whole thing, you different in of for cases vehicle leave different looking is your lot types a it lot using get step we're at change. like where that. Freedom a where of do value

-- done, where adding lot more what you can same we call can the and do work you You a time. surveys get at measurement use

allows scanning for deploying once once do spot and doing you and and well, once you direct go rather You're deploy just only back as measurements than that not measurements. can twice, to surveillance, for actually

have high fleet. have all I comparable rest the impact customers call to reasonable our to of they our and all they demands what would So capital

Samantha Hoh

for Thanks all that.

Operator

Heikkinen comes line from the David question next Your Smith, Energy. of

David Smith

and you thank morning. good Hey

Rod Larson

Good morning, David.

David Smith

– quick. to hoping step And 'XX? if of half am on right, a the ADTech was implies strong guidance to touch I it down look, sequentially, in Am on really over margin real margins. Similar rate year. flat margin the Full-year that margins say the year guidance mistaken I I second there's also

Rod Larson

a might too, picked that but the here, contract. a Alan rescue for like, it's don't is in there a margins. to hope of with rescue, of a some mobilization a of we and mix. business is sub sub the that big lot to some do bulky mobilization but we lower When sort of of Short jump up Yes, big, which mobilization

you that mix does change Alan, as So adding? affect ADTech would be well. that

Alan Curtis

Yes.

last going I through benefited think with mix the to from be as component, other of type value-engineering quarter year. was in that the we that the said tends you system lander this first year human a change, work

with or second with one being not it, that So I team the is to appealing they materialize are half think the Dynetics but expectation we had successful at going least that's the the along stage. origin, hoped not in

David Smith

reasonable second it kind margin the for normalized to the It level about rate Sure. of all think makes sense. run half as business? perfect Is

Rod Larson

Yes. I the to normal. it's think be kind more going new of

David Smith

clear. much. Perfectly very Thank you

Rod Larson

Okay.

Operator

will there are turn questions. I this At remarks. for Rod to Larson time over further no back closing

Rod Larson

call. I'd wrap everybody Since by up questions, just thanking day. joining more call. are Have Thanks, there a the great Pamela. XXXX concludes for This our no to like first-quarter conference

Operator

disconnect. you. Thank gentlemen Ladies and now you may

Oceaneering International (OII) 30 Apr 212021 Q1 Earnings call transcript