OII - Earnings call transcript Q3 2024 | Oceaneering International, Inc.

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Operator

Welcome to Oceaneering's Third Quarter 2024 Earnings Conference Call. My name is David, and I'll be your conference operator. [Operator Instructions]. There will be a question-and-answer period after the speakers' remarks. With that, I'll now turn the call over to Hilary Frisbie, Oceaneering Senior Director of Investor Relations.

Hilary Frisbie

to Quarter welcome Call. Results and morning, Oceaneering's XXXX Third Conference Good call a Oceaneering's and being will Today's webcast, on replay is be available website.

Chief Alan Curtis, the Larson, President and be on are Officer. Senior our Executive Financial and providing and us will Officer, comments; Joining prepared Chief who call President Rod

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

comments Our measures. non-GAAP also today financial include

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

Roderick Larson

the thanks and for morning, Good today. joining call

First in Florida we as that off, in of Maritime the business. as despite both business million third of to like believe our from to and portfolio fine-tuned and of and achievements Intelligence portfolio to operations facilities EBITDA X our our XXXX. an approximate Oceaneers absorbing sold the Gulf well $XX.X delivered the X quarter onshore the in many who being this our speaks thank Oceaneers our of I'd said, offshore our you Louisiana I large as of resiliency hurricanes and adjusted loss $X businesses. That million of highlight some impacted Mexico

flow to did And our $XX.X to generated estimates. guidance EBITDA Subsea was mentioned, EBITDA, line repurchase. As healthy of with a XX%. which expand Robotics, million. We delivered continue we SSR, adjusted consensus we in $XX margins just yes, share I free cash million and in

consolidated fourth for of initial performance of and XXXX Now outlook the our our for business third our quarter focus my comments XXXX and XXXX, quarter full consolidated on and the outlook. segment I'll year

results. XXXX third our for quarter Now

quarter, per adjustments income third adjusted reported related of gains, $X.X on exchange in $XX.X tax with or discrete to of $X.XX $X.XX Adjusted the net associated impact included $XX.X results For $XXX,XXX gains per These was of million or adjustments. revenue effect $XXX,XXX on million. a we foreign exchange share foreign million income and tax the net $XXX share. million

Our as to on consolidated third XX% in XXXX up a revenue. quarter third X% XXXX increase operating compared income the was quarter

and Our third SSR were primarily to in improved due results Manufactured strong segments. quarter performance Products our

estimates. our adjusted XXXX, million quarter range quarter and third XXX,XXX report approximately consolidated consensus $XX we of the repurchased are million the during in cash pleased million free guidance of of We For that line to $XX XXXX. shares $XX.X for in EBITDA and generated with our third was flow

Our was $XXX ending cash balance million.

end quarter due to third XXXX. look for on X% as utilization of were XX% ROV and XX,XXX revenue performance $XX,XXX measures. Average improved per days tooling in in improvements both improved our to higher activity ongoing and ROV ROV combined our use our third control utilized and respectively and from was XXXX. The quarter XX% compared of year groups to the XX% drill third of and RV and last the XX% pricing our in XX% quarter the period cost XX% revenue contract. utilized in fleet and of the September, compared XX% to of the to day XX%, contracts fleet At XX% the business same period of as execution, during and third vessel-based SSR split also XXXX of let's survey to compared as support flat business income basis compared in XX% and survey same increase tooling XX%, segment XXXX. XX by market with contracted the third and rigs respectively, quarter XX% the EBITDA to revenue at of of of XXXX. operations as essentially compared XXX ROV of XX% and percentage XXX and income XX% third the was points had total margins SSR higher a on floating a floating we between operating was under of margin in expanding in the operating quarter Now as of our XXXX XXXX. businesses rig revenue, was quarter of

increase third increase on manufactured million intake during XX% September on $XXX in a third of income XXXX. was and of an to the our $XXX XXXX to XXXX, was quarter compared an backlog XX, the was quarter $XX.X the of million, increase quarter revenue. products operating of Order Turning million, XX% solid over

book-to-bill ratio Our for months. trailing the XX was X.XX

operating prior quarter ADTech, with due of repair IMR quarter compared XXXX OPG as Technologies quarter improved as Group, income was third divestiture XXXX year third essentially quarter the of prior income in XX% in quarter income in million and crane costs the third the associated operating the the work same with services mix, third income were declines and to increased for increase anticipated to downtime. Integrity operating The core expenses both more the repair, the decreased associated year. proposal margin which same or September the revenue, of Notwithstanding businesses the associated XXXX, costs to to revenue changes of as charge, our and of onetime as noncash declined of period vessel Offshore line Unallocated compared with IMBS revenue. compared Management to Projects well XXXX. operating our and an and IMDS, Solutions, and Maritime operating lower as the quarter vessel flat and or due the XXXX. to while margin project quarter than Digital quarter Intelligence year of third to same XXXX guidance decline operating last in $XX.X in onetime in declined XXXX was lower-margin inspection, on and XXXX as The in quarter Defense due charge third mix. income income in results operating maintenance and the on quarter or than or the was margins Our in changes project were this in in focused third the XXXX. Aerospace division project compared

fourth as Now expect for quarter fourth in I'll products led the quarter the a compared to our we of similar that and address to revenue of the increase our XXXX achieved to manufactured of third adjusted third OPG basis, quarter quarter outlook EBITDA by in increases XXXX. XXXX. On consolidated with XXXX

our are fourth quarter for operating lower we revenue segment SSR, slightly are, expectations projecting Our profitability. and operations XXXX by

ROV support mid-XX% be activities, which and a offset partially in ROV fourth will As drill compared to we utilization days utilized to range. the range. upper the anticipate by third vessel an forecast the in remain XX% quarter is in quarter XXXX, EBITDA in forecast to SSR activities. Overall, we adjusted margin fleet expected support decline be is increase

to in we of expected manufactured, those the to our significantly schedules increase lower income plant absorption than lower income Operating due at counterbalance holiday margin energy forklifts. MaxMovers to to achieved be anticipate related are due our businesses. margins revenue MaxMovers For to down deliveries and currently delivery of operating and

in I and significantly the income mix on include project higher installation operating of in quarter LPG, intervention operating West repairs. more add, to the services previously and with underwent we revenue results, an service based and anticipate completed that multiple return For margin mentioned the is to This low commencing improved forecast vessel will fourth projects and used the Africa in XX% range. crane with the

revenue. expect lower profitability following division, Intelligence to improve the divestiture on we IMDS, For operating of the Maritime

percentage we ADTech, income the expected schedules and lower be low based in teens expect $XX For significantly range on operating revenue quarter operating lower is expenses income to the and This awards million unallocated the delays of in range. with outlook in of and timing XXXX. for fourth the margin are project

million expect the adjusted year as For reported million. revised of we generate within $XXX yesterday, the full $XXX range XXXX, to of to EBITDA

free for million flow the Our year $XXX of million. to unchanged the remains in $XXX cash range guidance

thoughts you like forward, outlook. to Oceaneering's provide XXXX with I'd our initial on looking Now

million our for are $XXX the million announced initiating XX% adjusted As million. increase at guidance EBITDA range of revised over a would of XXXX. $XXX midpoint This of midpoint yesterday, the we to represent in guidance EBITDA the $XXX XXXX

in increased missed, ADTech. be across all revenue gains our this led income improved operating by confident not segments, deliver ability are operating to of notable based to and We and on XXXX improvement in SSR products our manufactured

For pricing project continued in improved similar but SSR, momentum and we tooling. ROV and on levels in revenue utilization ROV, from and and expansion survey margin gains improved performance efficiency further

and throughput products increased manufactured better forecast performance higher-margin we products, businesses. conversion nonenergy our of products manufactured in backlog For and

we increased installation docks. For higher-margin and projects and major dry intervention no expect activity, OPG, vessel international

sale mentioned and terms higher IMBS of to a business. income loss Intelligence associated expected be Maritime commercial operating the For significantly with previously due is not incurring the to improved

to operating For low growth margins. mid-teens in ADTech, income revenue we significant forecast and on

in based unallocated are level highest year-over-year, outlook year-over-year flow and our other a to projecting XXXX. Our generating XXXX revised And to XXXX, increases stronger also other that growth XXXX and program exceed free that new schedules on performance XXXX maintain in quarter. on based pricing expenses we implementation will costs. This than our capital new higher to due platforms our of we quarter that awards. like is expectations and XXXX. million a technology ROV on our we improvements be various to planned ERP the is that ERP and per information in with highlight are of modestly significantly in underpins will and expectation generated cash of In $XX program as of This expect robotics $XX we range focus XXXX, expected to throughout achieved increase margin in expenditures first the million commencement modestly new opportunities returns. I'd

in commenced in absence of first vessel dry Our OPG XXXX availability will the lower with and the and quarter significantly in of improved will XXXX, continue OPG improve dry XXXX. of work dock the yielding dock fourth costs results quarter

future. for the provide we guidance on process. In in our believe specific more customers' during will our reporting are year-end the expectations positioned needs XXXX we deliver to foreseeable well summary, We

by grow businesses, capabilities now possible share we'll which the Oceaneering, Oceaneers happy are new all in our to around any We We made continue and questions we of may maintain our to be our of the interest robotics in market talented and entering relentless by are everyone's core you and efforts continued markets have. appreciate answer leveraging globe.

Operator

Kurt Benchmark. Hallead question take [Operator with our we'll from Kurt? Instructions] first Today

Kurt Hallead

put drilling, so So glad there's been and some white given of on. a out discussion around that space for there lot markers guys I'm you XXXX, just utilization offshore

So obviously, you've that. incorporated

downtime would you might is in -- have the be potential incorporated? guess that you? And a XG question impact of question you I lot be much my have of potentially rigs. is, a the my XX like understanding white the drillship white share it seems So for that market, significant the space space how How gist very real does but this

So get kind more but a question, little you're around to want broad thinking bit context about of it. really a how

Roderick Larson

white we're year. happen utilization No, part doesn't you Kurt. I of talk of significant about in I bit the open the think necessarily little mean not first got did a We space. utilization peak and it, maybe some for the seeing we're

So the and mean efficiency around turn the delivers best the -- I SSR going other but things year-over-year for going even year. are the bodes with with any that right of in with that RVs with our strong I still improvements control pricing that, way really it of divisions. on some a improvements mean, still are of cost

SSR, more for that's A the side. gotten and for better So in strong. stay year better short I tooling the story. year also we've OPG both Vessels the and survey juice means a think

Kurt Hallead

then you expect is the through for pricing, rate pricing a there did and lag a move and between bit little that then a got the you maintain you of XXXX. to in typically, correlation it. your rig the get pricing Got better and indicate day And effect the

percentage a there you factoring a guidance general year-on-year, your into of of EBITDA is sense you what for way SSR? guys So are us improvement kind give pricing

Roderick Larson

really some of I the don't regions, rolled of some because know on specific, the depends regions. contracts that that get pricing region better could some Kurt, in I better we've it and

for hard the move whole a they going what be the prices it's of on to roll, because days in number we'll as pin regions. that those utilization would up, to really it's So depend me on those those but on

Kurt Hallead

be would side. follow-up my then And you. product manufactured on Got

in get margins I You obviously process going but seems and to been bit it's going has It update a deliver And the forklifts to the a on going. outsourcing an outsourcing want on on. like see you little starting agreement and how of be that evolving here improving how term, guys on near margins to automated that lag do so just forward? are

Roderick Larson

good, been our in that has outsourced say to we've outsourced this building the this, and our facility, I'll So things been meaning these handover execution manufacturer. between moved we've Orlando,

across. some We've things been built some I think We've like We've inventory the has that. first moved great. handoff article. the done

the is build start-up. But -- margins as and paying to think get as both vehicles we're with that switched, in the them this the sides, I start volume more get I for business, there's think of has So kind right? mentioned out. those costs in we we Alan, what problem until resolve things we some before, fully redundant

come sales only not selling of you're So base, on and really we that's razor fruition. to thing are and but and the expect sparing razor you this blades service when installed on whole more when blade we vehicles, part that to get those other thing an

Kurt Hallead

intake part of quarter? automated order for commentary, I have And if during the what missed your mentioned you the early it the forklift was your but during may it

Roderick Larson

wasn't consumption for anyways. It we've Kurt, in I that there, public don't think Yes. ready got

Alan Curtis

Kurt, quarter. MaxMovers were no I for during large orders there just material say can the

Operator

from We'll with Energy next our take question Daniel Mitchell Sean Partners.

Sean Mitchell

underwater you Navy. establish month, by operations for you Department build Defense the this put U.S. dollar U.S. autonomous an to vehicle of out Earlier remote multimillion a onshore awarded guys the contract a center release were highlighting

further in the then And like was gain how will something here, traction AUVs? think noted do unit envision defense built that when you with market the industry addressable you delivered? you in If total being City, be Morgan the I the

Roderick Larson

with the set We're So I'll 'XX delivery the Yes. start question. for of QX vehicle. last

for now, say I say, we're, could could drones use you, are you mean what the I tell how can I kill of know. I of exciting. are articles in don't would have force and right But that's you side. tell I it defense the be use these and they drones, talking the by depends think use out you see the but on I'd pretty and there we all -- So the it to really multiplier. I tongue-in-cheek, could about mean I use bullish that military government. on the of on autonomy more sense real the more cases that

So it. on we're keen

and hard now, do expand want their to of is but and think help they working tell with paces do I really opportunity some this what for the article that's through because first of it putting and start how with And to working seeing things us, that them get hands they when will it we in many its also achieved. their are we've we a been huge work really capabilities. the OEMs

one So to that's another watch. big

Sean Mitchell

Maybe it. one Got follow-up.

how Just and forward How when how you'll in this amount, be harder you about -- makeup? million uses the already CapEx not but about the going should we do autonomy and we approximately the think about to dollar for maybe think spend the than relative you company only beyond push have? of $XXX Or Do should you CapEx? we thinking of 'XX year. kind

Roderick Larson

that that little as on don't will think things to field. But think of I absorption percentage more going out to start more growth, be make things note bit growth. lean going even next-generation It's do not to more we same, think want our some spend that plants differentiated is is I'm competitive, umbilical decent with the of definitely we other money. where in And on of and thing -- right? maybe more about money, a mean, greater like things about we are the we hardware things got to basics. we the us a when thinking I I doing disruptive. we spend let's one finally the about Yes, more

Operator

question take Smith from Pickering We'll David with Partners. our Energy next Instructions] [Operator

David Smith

margin thought impressive, the really limited SSR the to kind was improvement rates. ROV of wanted just in increase given -- day I I

So assume that I ask fair benefited down business. if really if wanted to OpEx more margin to the and average in the from came it's QX the tooling daily or or survey segment also

Roderick Larson

thing if maybe I the run utilization you mean sort if team gets I'll mean up does our I hit when rhythm a The of to runs little -- got in XX% a or is humming happens it -- we just harped just best. in this maybe want that I Its see problems. we good say cost. something lot is there moving really bit, think that and again, even on is say it better. I the to efficiency we I fewer COPQ the machine it in when say of can kind other I but side events efficiency a best is that, of the we're is along. everything

COPQ operating efficiency, really the think operating lower things better I OpEx do lack mobilizations into So field. out those more turn all days in without of that efficiency and

Alan Curtis

I'll he the evident were make in clearly Subsea and Rod, emphasized Senior that were notes, Martin want that gains that of add, so preparing Vice making ROV was that to Yes. as it President not tooling they efficiency just our we survey. the McDonald, Robotics certain it was

Roderick Larson

based when to maintenance. can more the failures and with, getting needs on into they when get long to can predictive profile. The things the vehicles, in the at They're back get shop done out they're field. you these just and doing imagine have how current when for operating looking they takes it ROV even work them until maintenance then of more be an and serviced it And they the on data modeling understanding ahead turnaround

whether to next pits, no in and seconds it we the they've whatever, pits, matter I've really the every time time is those them Every figure take come on into of I lap driver, the to taken FX a heart. been off like out that's how this All using race. tell internally, I pushing lot everything -- analogy we button. things, they're but an

David Smith

I appreciate that.

pricing want I few seeing to ROV tailwinds or like like maybe seeing you're is really margin on improvement or tailwinds and about ask efficiency contract envision performance benefits. further sounds piloting, the we've did improvement right, say if gains. the to remote costs initiatives been it So a

Roderick Larson

we it's mean there's Yes. like I more do. I always And get, to peeling the think and onion.

when go. find do farther you the new You things --

doesn't out So we opportunities. seem run like it of

the the is. That's The opportunity what we're we up world. the world, satellite XG the now, The I issue can ROV the other to because more an operate really the centers XG hard piloting, problem. operate remote have we lag we just or we around we the places can the can need those time communication. too operating get, that mean, get set there we latency thing, seeing remotely to equivalent more in not of or get is rig that a we is more to anywhere not Right will coverage X-year that so low in where whether the the get RV sort be can't

David Smith

thinking If to I one to defense circling more Robotics? should if color. that back sale be of the that Subsea question, grows, Sean's sure the that through goes AUV as as we appreciate I growing in business count to just about ROV could and the make ADTech manufacturing a kind wanted if slip opposed

Roderick Larson

on a -- the is operating build be own company side. they I -- that, and GoCo that, so the Yes, of but package. We rescue of lot the that call point on equipment would more it. where equipment government the out they a behalf government. much it operate we would just like and we're to submarine it with that the actually do government-owned some would operate of of maintaining a side of but we a equipment lot government, now we times, that for would But we sell some do other We would actually the work the operated,

both I some on opportunity think there's So sides.

Operator

have Benchmark. question do with Hallead follow-up Kurt We Instructions] [Operator a from

Kurt Hallead

So guys started referenced share the you program. you repo

from update it? being as to an dynamic? still guys about you get That's you of at thinking that Are the about programmatic are you to wanted be Or are you on more considering how part looking possibility Just opportunistic? it. it

last Second allocation. few guys part capital provided in us time on with was, the you I points think a that

the specifically distribution. cash going that's flow to commit percentage of the go to didn't to You shareholder

if just wondering that. on that you of was us updates kind I give reconsidered some and have So

Roderick Larson

future I I looking Kurt. I'd we mean this put were dilution. -- current and way, it at

So at stock eliminate goal plan. through a we be to that should or least are to saying manage our employee dilution try

So look of sort I think sizing it. that's one the at way I'd

somewhere opportunistic. going and it's between programmatic think to be I

opportunities going mentioned think the whole years. last think that and I to be the thing. are we you think of that's We another growth time on That's certainly business. we want we -- side the years. it -- the I not significant but a XXXX did we're every capital X because Meaning have be not of to we'll do want was cautious allocation this -- don't wait really we X number

time. So growth long we're stick inorganic said of capital. and guns. it growth, a going to return Organic with We've our then for

while been just especially the conservative stick also think I tighten so don't or think fairly there's our And you I around be certainly not to just We downturn. But investment to were a any little the got as -- you spending Oceaneering would we plan. that during that. with going know to don't and there. money that's we'll a Alan, too. go not the did urgency throwing back money lot, anything? up with But add -- was know to we've industry I But ever

Alan Curtis

today the that's we going and business bit our last than X think have space, investor of propeller Rod. the years do I and chart have we've the pipeline opportunities that of clear more It's are in kind are robotics. a deck the other IMDS in that the defense spot to things focuses on, that little side in seen fit that we No, in aerospace mobile on into that in

we're we're as to for. looking So what I think clearly defined

Operator

additional any no There further closing on program Instructions] are the Rod the return I'll Larson questions to at or comments. this line [Operator for time.

Roderick Larson

more our a everybody. XXXX third wrap concludes I'm just call. Have for to going Well, call. by conference day, no everyone thanking great the are quarter joining since there questions, This

Operator

your This you for participation, program. may today's does Thank and conclude you disconnect. now

Oceaneering International (OII) 24 Oct 242024 Q3 Earnings call transcript