OII - Earnings call transcript Q4 2024 | Oceaneering International, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Welcome to Oceaneering's Fourth Quarter and Full Year 2024 Earnings Conference Call. My name is Desiree, and I will be your conference operator. [Operator Instructions]

With that, I will now turn the call over to Hilary Frisbie, Oceaneering's Senior Director of Investor Relations. Please go ahead.

Hilary Frisbie

Desiree. Thanks, welcome Call. Quarter and XXXX Full Oceaneering's Conference Earnings to morning, and Fourth Year Good is webcast, call Oceaneering's Today's being website. available will on be and a replay Chief are With prepared our Officer. Alan President Larson, call on Vice and who today Senior Chief me President be the comments; and and Executive Curtis, providing Officer, will Rod Financial

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

include Our also non-GAAP comments measures. today financial

most prepared Additional We press financial comparable release. GAAP be statements. your fourth details to measures after questions quarter and welcome the the directly found reconciliations can in our

over I now the will turn Rod. to call

Roderick Larson

call Good morning, today. joining thanks for and the

our thank to and Oceaneers importantly, the you off, vendors, believe and and First globe to partners to our most Oceaneering continuing story. in the investors, around customers for the contribute

During time $XXX continued the second as adjusted at Subsea since notable XXXX XX% year-end ROV approximately to for of year, XXX quarter our million ability operated of surpassed XX%, the over XXXX. confidence intake our revenue reliable highest customers' improving our recorded course SSR. the year-over-year first for our rate shares, EBITDA uptime order $X.X quarterly our quarter XX%, or vehicle the our Robotics demonstrating safe of in in demonstrated ROE and EBITDA pricing in million of the of exiting point attained business, improvement and since billion, products. realized in a fourth margin in $XX basis XXXX and services evidenced Repurchased by progressed value customers, deliver or we remotely XXXX, further

U.S. our including and I ROV of be Navy, low mention high commitment total provider Limited operations or to in our to in to One, unit solutions the recordable from XXXX, from a our I build if industry TRIR to quarter cross achieved applications X.XX center onshore the in remiss establish highlighting XXXX. or for technology. an remote a nearly digital software a other vehicle, Made hybrid a Global Freedom portfolio, a defense and record and XX% would the the underwater rate, adjustments for for Innovation GDi, failed autonomous our safety, And and U.K.-based to fourth to matching contract steadfast Design businesses. vehicle, potential of innovation which, the exits AUV, targeted our incident TRIR, of led acquisition year, incidents reduction

our comments XXXX. will I on full quarter and performance focus Now year the fourth my of for

XXXX. for outlook market Our

Our the XXXX. to of million segment and outlook, million and the year EBITDA consolidated million the of to of in range full including generate and in $XXX flow our XXXX outlook range first cash positive our million free expectation quarter $XXX $XXX to $XXX for

starting XXXX Now our fourth with results. quarter

of or we reported per the $XXX period to Group, year, or a XXXX SSR the increase. quarter same of million XX% quarter share, year-over-year segments. Fourth income the our $XX.X income each million with in our operating year-over-year higher revenue Offshore Projects For million X% $XX.X operating revenue and of increases in XX% consolidated of due was fourth improvements segments. OPG significant Consolidated in net of than was higher XXXX, prior $X.XX of

of slightly and year-over-year the and amortization Our a estimates. was fourth XX% consensus taxes, consolidated the adjusted above million and depreciation midpoint EBITDA earnings adjusted provided before of quarter our increase at guidance the both $XXX of implied interest, range represented or beginning

best and is in results fourth only represented revenue, declined slightly, seasonality quarter quarter operating worth fourth income its typical experienced while quarter noting OPG's improved their growth we SSR, Although it $XXX in that and million $XX including million operating in million of XXXX. capital organic from in maintenance. We in expenditures, $XX million fourth $XX and the generated approximately invested and activities cash in quarter EBITDA

the We mentioned, quarter free with previously acquired ended $XX.X cash as million. Additionally, of flow we GDi.

XX, $XXX million. of was our cash As XXXX, balance December

while XX% lower. percentage by activity the utilized in X% ROV let's year-over-year execution XXXX. fourth was our ROV utilization $XX,XXX, of our between survey XXXX. quarter The Now in at for Average XX%, operating fourth to groups. fleet and XX% fourth business and segment XX%, XXXX and improved a XXXX. XX% were revenue of continued pricing was split $XX.X the increase businesses compared in quarter of improved of EBITDA margin XX% income relatively of during the XX% XX% XXXX year-over-year survey revenue also in vessel-based and slightly ROV flat our look higher which and quarter was SSR in of as the of total the quarter during the days and our our day drill revenue XX,XXX revenue. period combined increase, same in a used support fleet compared as of and from the reflecting ROV business operations and utilized was to tooling a of same ROV on was per quarter progression XX% SSR million in as essentially to fourth tooling

and on we contracted XX% fleet of systems. December quarter XXX with count we As began the ROV just a contract. XXX of the under as of ended ROV contracts floating XXXX, of the market the rigs XX year rig with We had XX, floating

Turning to Products. Manufactured

December was the full full to The to timing MaxMover XXXX XXXX. $X.X income the ratio forklifts. project. Year-end for of of XX, in million a to million Our fourth $XX due due X% compared the million, of for decrease a on than compared of of X.XX income of million to quarter expected primarily declined taken an increased of umbilical operating reserve revenue XXXX, XXXX $XXX $XXX backlog was lower Operating margin X% year-over-year. and counterbalanced year awards X.XX book-to-bill of year

operating of the and during income levels their income operating revenue, XXXX in quarter. margin achieved fourth OPG highest

to As XXXX, from from XX% levels compared activity income intervention installation operating quarter increased to Africa and to margin increased resulted and fourth revenue in of $XX.X Gulf million. Mexico. income X% and significantly improvements the to $XXX West improved million. of These improved the XX% Operating

divestitures IMDS, to $X.X and For fourth operating decreased income X% Solutions, this Digital Integrity to with primarily revenue million due increase costs margin Management acquisitions from or quarter declined a in segment. income by operating X% $X.X despite associated and in and million

of future financial we report announced, previously completed the which As GDi, acquisition through IMDS. will results

or the lower prime mix on that increase compared margin in for declined ADTech income implementation unallocated new discrete increased of Operating of division, become changes Fourth quarter our Technologies, declined expenses contractor Services U.S. to income same operating fourth in period Our the manpower revenue in $X.X XXXX supports with ADTech Aerospace and with government. were last $X.X to is $XX.X operating business, primarily to Oceaneering million a the or million quarter. as the a our ERP growth division, guidance in lower our for XX% OTECH which volume Defense declined and volume a quarter the XXXX and in offsetting to income Technologies Marine year. system line due project to strategy million margin

focus XXXX full my compared to XXXX. turn to year results our I'll Now

of improved revenue in For with XXXX, in $XX.X $X.X of and million IMDS growth. operating XXXX, revenue operating XX% than million achieving income OPG adjusted XXXX. XXXX each and increased more million to gains SSR, $XX.X segments XX% $X.X segments Manufactured our million of EBITDA XX%, Consolidated $XXX or and $XXX consolidated to declines offset billion in by billion by or our compared segment. improved our ADTech EBITDA from Products

from and related the increased As compared XXXX, increased $XXX cash million of revenues declined from to million $XXX operations to to taxes. million in XXXX. million cash capital We $X.X in due working timing net an flow increase organic expenditures, capital to invested $XXX

approximately spent the As which previously capital of in inorganic expenditures acquisition discussed, included $XX million we GDi. also

the full with credit of and $XXX had cash liquidity in revolver. At For year-end, was an million in free cash XXXX, undrawn we to healthy million equivalents XXXX. $XXX million cash $XXX million compared $XX.X flow year and

our are services to to and the that costs outlook. Now advantage and positioned take gas dynamics in and hydrocarbon market development. intensity carbon in to most Near-term believe to and we continue XXXX lower well We is market report that of beyond. breakeven market compared continue services that turning XXXX of healthy Oceaneering and to prices long-term operations oil for other a products offshore forms be the provide. supportive Research of

see We our ADTech also continue opportunities to growth within segment.

XXXX metrics energy-related we services that that slightly indicate or will track research positive. projections be activity flat for and Analysts key

FID forecast our of the XXXX, and deepwater average XXXX be price a We forecasted providing increase capital The year-over-year crude levels will per support Brent expect throughout $XX for decision stable of barrel final forecast. investment or approximately that added year. supportive offshore operating of oil spending in indicates the

such in awards orders Tree are activities is as increase the XXX indicators of XXXX spending. rig installations awards Drilling project installations approximately increase as be approximately in for XXXX. Tree to sanctions to awarded and expected with forecasted compared XXX are flat XXXX with installations, are in horizon in to to compared subsea forecasted XXX installations to awards equipment to and Tree XXXX. expected as trees in to forecasted demand XXXX for be year-over-year XXXX. X- offshore X-year XXX

and geopolitical landscape, policies regulations as energy the we countries, expect on are may a in in While our currently market tariffs, monitoring closely U.S. we by and material the serve do activities. these impact trade peers, and the our the which other our customers' Like planned we to have new indicators we markets view of products. supportive, changes including both and not impact announcements services changes

in that monitoring will government-related budgetary this continued serve that reviews future. stable time, specific under At also the impact with defense-related relatively expect growth the for we are foreseeable the markets U.S. of We remain markets. we the

revenue revenue year-end our with Now we Oceaneering. order and backlog digits anticipated projecting our consolidated to XXXX expected for in current of mid- fundamentals, by XXXX each market XXXX for segments. operating outlook intake high on backlog, our to our are grow increased single XXXX Based conversion, consolidated

Our year-over-year continued in our and expectations driven expectations for progression favorable mix. by growth project for revenue are pricing

expect operating operating and also operating income income We in each segments. our margins higher of

confident geopolitical impact and remain acknowledge markets on backlog sales potential the risks their our was felt in prudent and the participate we we aforementioned we While pipeline, to in. it

XX% anticipate At We of for manufactured being improvement XXXX a EBITDA million adjusted products range, generating anticipate of led year. flow positive of adjusted our XXXX generating our As EBITDA reported our would midpoint the million million. ADTech $XXX we yesterday, range cash $XXX guidance year-over-year the segments. to SSR, with $XXX represent $XXX EBITDA by increase over to million free the our this and We EBITDA. have

associated changes the customer with vendor case draw we first a several past of been payment incentive related over working the the years, anticipate cash the during and has performance-based capital and quarter receipts payments compensation. As cash to substantial

For system. We forecast expense our the with of a noting growth $XX of $XXX approximately the XXXX, $XX we tied growth million to and This expenditures in the income forecast in is our total expenditures between $XX interest organic to of capital million maintenance implementation million. million of to to million ERP XXXX associated It $XX interest increase and to inclusive million capital that million of includes total capital is to of contracts. is opportunities This related million $XX net capital to worth $XX be to $XX range million expenditures. $XX million. expenditures new $XXX new

This $XXX revenue cash operations. million no the profitability payments in range that and of taxes to We incurred based bear includes expect XXXX in on tax our million. in-country to tax to countries relationship such $XXX be impose of the

tooling-based is days average expected for the the and high expected expected SSR, Directionally, on to and the for to segment, sustained in full growth EBITDA from our continued follow results are ROV our be by to expectation a Results XXXX pricing mid-XX% margins year. for demand are based the improved in survey is in stable ROV services days single-digit revenue for overall range generally improvement for business. results in and utilized, for range ROV, improved operations

of mix XXXX. vessel drill remain For same ROVs, in support services and service XX% generally the XX% project that we our XXXX will

to continue to expect about assets. drilling and white systems maintaining higher and placing We our schedules navigate concerns space ROV by on class

during second third during seasonal utilization to forecasted fleet the between XX% the high ROV is and low with overall range year high XX% and activity Our quarters. the

the expect range drill We in for support share XX% market sustain to our to services. XX% ROV

utilized. XXXX year-over-year day to to XX% continue exit revenue we from an increase opportunities We XXXX in saw rate see improve per ROV In with to $XX,XXX. XXXX a $X,XXX of $XX,XXX of XXXX, in

and revenue increased nonenergy in and business in Grayloc improve our significantly For lines. to margins in our results on our Manufactured Products, to product backlog products, improve based on connectors operating existing primarily we of operating improvements expect energy growth conversion

are in for results and OPG, utilization based on the are on Asia and a flat For Mexico activity Pacific. These improve expectations of increase Brazil operating slight and projections forecasted revenue. in to Gulf increased West vessel Africa to in improved levels

IMDS by Overall, in in higher-margin to to be mid-teens meaningful in expected to for reduction Space to well improve Systems X operating income is margins and revenue and single-digit growth work higher. low expected range the ADTech a for year. program to our margin anticipate of Operating double-digit on businesses with improve intervention are we average commence XXXX, government-focused to light on in dock in to are as results be dry the OPG in opportunities teens all operating and due intervention We the year. in operating revenue income for the our income and year, led engineering the in significantly range expected margins for are are increase expected new to increased OTECH, business. expected costs. results growth significantly recovery low including forecasted awards average services. an primarily Operating work, the digital high

unallocated anticipate per we $XX average XXXX, quarter. For expenses approximately to million

Now in $XX first a quarter with EBITDA to million quarter quarter compared to of first our in million. I'll $XX of we range significantly as the for discuss XXXX of the to On revenue to increase expect XXXX consolidated XXXX. EBITDA our increase the first basis, outlook

segment to to As first revenue XXXX, first quarter For XXXX the we our for project to increase operating by the quarter expectations of are: in of SSR, compared increase results significantly.

that improve results from to ongoing OPG, of due and first and fourth the of reduction loss related to XXXX. vessel For of quarter costs quarter we to work the the dock and operating impacted dry days revenue due expect significantly of XXXX the

be For revenue the similar. operating in unallocated and that Manufactured to will results Products, forecast million. we expect be $XX of IMDS and expenses ADTech, We range

I'd Oceaneers. drives of In shared thank commitment their our It closing, to our our team that like is success. to teamwork and again values ingenuity,

customers, shareholders forward our continued take remain look be now and innovative and solutions questions to on happy to the fulfilling we delivering our have. we'll team. commitments appreciate supporting everyone's interest focused As we to you any empowering and our Oceaneering, We future, our to in may

Operator

line with Our first [Operator Barclays. of Kim Instructions] question comes the Eddie from

Edward Kim

the move in kind has average revenue per a upward has of as a year? expect XQ deepwater of Or maybe several almost year actually day we'll year? over the The a the on both? rigs, expectation work? vessel-based the given your combination day been lot the And about do just that by impressive through of you flattish quarter. from progression the a you surpass years, space drilling levels white at expect do side trajectory we is ROV the end through in of $XX,XXX Or this been of driven XX,XXX pricing Has or that the more that past of it increase support

Roderick Larson

come the been not seeing bites the it's progression. Thanks, Ed. the we pricing smaller of support. it's have, still price bites improvements it's in realization the the we're is the see say, the from same, both. seeing upward there's I vessel or in say But would because all, days the both We're some rate exit even being from then And but I activity flattish, ongoing or smaller coming and drill in would -- negotiations. guess, Obviously, I we the bites. come the of still first improvements

price not again, to the unlike So in days activity value, flat And of reassurance flattish days. uptime of had that XXXX we time. opportunity still and kind we get the flattish through despite in XXXX. and even just see to get expect We that, more XX% demonstrate over improvement

Edward Kim

about year book-to-bill. a And what the this Understood. looks was expect? decrease follow-up on year, perspective Products for your but there within your about orders it. I orders which on 'XX guidance if It 'XX Got full should an any just my was book-to-bill we is X.Xx from Manufactured missed book-to-bill of segment. it, kind Apologies like for slight or Xx, from of is

Roderick Larson

We haven't given that guidance, Ed.

Alan Curtis

guidance, pipeline now, our did the an that's sales that haven't we I provided think think indicator And I Rod describe expectation think this belief call in notes, remains but be I of our right orders our the future healthy. year will in coming.

Operator

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

Kurt Hallead

calls, part through to here context recent incremental activity for activity as that obviously heard there's reacceleration a first color and well in the in the of always. conference from the and almost Appreciate effectively 'XX. of of boding occurring going contract I all guess offshore be 'XX the we've XXXX drillers

I on or you So utilization question X-part around XXXX? kind a or factor assumptions how potential give in Can your of guess rigs? a reminder kind year. us on for how for refresher you ROV of downtime that the space And white

Roderick Larson

think all the we talk take our it's think is average in to of -- it's rig activity, everybody mean, telling about that's I plan days. you. when I activity, And the in the what it's the I hard in is flattish.

I the about some Transocean But maybe closer just And like on. of Alan assets going than that's about on there's it, we're I it under I think these the to the blend think of the the and higher-quality lots when assets. of water. I maybe feels things others. talk story talk we're

things share in helped our is the us we've market of that's Brazil. One quietly grown

they We market get never contracts to were and able of of about time. value really And to onerous. drilling that more see so used we better that talk Petrobras We've much and again, contracting we're pretty pricing now the more And higher in Brazil. ROVs some up the pushing share been there. because directly contractors up Brazil

that about. that us of mix of that happens the is of that's one in talking kind against the that's those white space things some protection sort So everybody gives

Kurt Hallead

Okay. that. Great. Appreciate

update us the the us to segment. orders business? update forklifts, how maybe that shifted an you respect model. progressing? give your that of I business of you've topic on an Now on Can switching incremental robotics know discussions And mobile keeping manufacturing for and gears an with having just give guys outsourced kind that's to been more what have kind of you of

Roderick Larson

about the from best -- feel the outsourced I manufacturing, we good feel think good there. quality We thing about the coming it.

They Customers the pipeline. bullish. the watching we're X kind like sending product. own we're shuffling just think about factories. not these servicing deck or They've We're their still of of very, X. factory very I got into the multiple

So as where intervene into keep schedule where that as to scheduling into the as they has developing the the kind they want people customer turn changes things vehicles eye of time that our them these we put to volume production big to kind would taking their of line, been one have of levels who and buyers. and on got some I taken of larger have, well trial say, of things next

Kurt Hallead

Got it.

And obviously, you for feel improvement some more backlog? that kind efficient out decent you Okay. more one give a of of can product, just go little much that What if margin a operations? fleshing bit price that forward? a on manufacturing How are book-to-bill can. the more is is us the -- better of of the Just that front. then much How on

Roderick Larson

Yes.

of above. the All

Alan Curtis

we for revenues receipt the delivery in, giving backlog the in been come been taking that's little signal would that outlook bit us And we increase as trying which because lead the this in there margin I think in that kind sitting in of in long was waiting XXXX on I and increase to for materials were confidence and Rod. improved we've profit. is have a at jump to some motion, I of.

we is amount there. large having it factories. is throughput these efficiency we of by continuous volume gain the and it a And it. as they in factories large day I eat mean these So sitting are every call

it. UDC of costs, overhead absorb utilization getting in, as the we So call we more cost, the

at having to margin. -- look So this driving throughput in that it That's for us improves progression nice is a daily margin way year.

Roderick Larson

what's -- Even watch bodes umbilical though If in best we just installations. kind would side. I'd We're those looking things orders. in given to are those we I that on going of what tell we're those, the I we tree And to guidance, there. for well of comment Yes. We're everybody of tree book-to-bill. watching. see both haven't indicator think out looking what's be year-over-year just -- the for improvements And for let just

Alan Curtis

called niche Yes. many And that out notes business high-temperature, a and whole not I'll It's something products. here us delivers nice that about it's a speak lot, We Rod different gets in high-pressure high-pressure nice the had but call one one that a we it's highlight as connectors, business niche for us delivers well. markets. into for connectors, it's Grayloc high-temperature,

the nice think opportunity that I there in So of new years in couple continue has last and been expanding into see we the job set. team a markets, doing to

Operator

[Operator Instructions] Daniel with And we have another Energy question from Josh Partners. Jayne

Joshua Jayne

into not some beyond. West Mexico, could the QX, for outlook First -- Group, you on about QX activity strength highlights where XXXX strong Offshore also sorry, moves year-over-year. coming of was Products higher bit. always see only go the QX Gulf talked you and performance question in significantly around and you detail Africa, Projects Maybe just about a but quite of Offshore more

Roderick Larson

wheelhouse, because joked grow of are one oil Light uptake the are of is tempers little well to that field, the bit. hinted intervention the pieces continue than going a in this a them. for we've grow yes, rest to we on also there's oilfield These And of intervention we to our We things when best these do I'm going looking that about that behind faster go back to to are we're the lot that already maybe there. are talk time because specialty, right? to deployment. well an are investment greatest our spent the the things work. things, the that ones. about And cheapest -- best in CapEx These make ones we light but pipe. growth trying Josh. think the Thanks, been talked barrels story That I the at

a you good or can rework, got just do whether work. can mechanical that's I mean you've those if it's you intervention, really intervention, wells the -- hydraulic that So

it work of some that's And rig. to intervention having of vessel at of for using we're because a lower a point specialty doing have the cost a us. opportunity for the instead We're customers drill vessel best or margin a

the more more see with infrastructure excited We That, we see and our we this of Mexico in invest Those and footprint. again. about year. are Those getting that work. customers the of that than some in supportive of and been we West can equipment have that the things just call Africa contracts. like saw Gulf of out we along business the are So really that rather think OPG the expand rework longer IMR

for Sometimes equipment put on time. at hire that gets months a

so things a piece OPG are the those stabilizing great for And business.

Joshua Jayne

class a one and the to of visibility -- guess, rate the today today? there? as the vessel would the vessel of ROV And drill Because in amount where as drill -- business, questions opportunity support. just class on come multiyear set wanted Could as of market support. a that well the I And I ROV the market from asked one the how focus have supply/demand Okay. assume, rather has speak day other progression is on decent than you this tight I to more ask you your

opportunities those could speak well. you maybe to just So as

Roderick Larson

lot see really a customers we their pipeline stuff, say vessels, I mean are on like versus... and of the I I'm ROVs. not the mean lot a of big a those when like vessels vessel -- fixed. you own side, do to who you talking are by done yes. installation --

are a or and a ROV vessel good. a one support so much we get service for looking So to has easy utilization things find. into vessel, you support I are look as see, those we vessel opportunity those the, things that of the they aren't a we OPG an drill side, find windows down attack Those project, to mean, multipurpose not that when go when for vessel. call what on been we're the the

that been class the think of has deployed were utilization strong. So I mostly pretty

Joshua Jayne

one And maybe may, one, then last I on if M&A.

with clear technologies. and incremental you'd in You've made it past flow the invest in to cash like capital potentially disruptive free

more if in remained number the X if months have of over opportunities some opportunities last where seen sort over through the the multiples As consistent you've we've to has with compressed the M&A I'm curious of year? X or last space, come sort public been of

Roderick Larson

No.

I I I we think more stuff. think there's mean, see more stuff.

perfect exciting. was that's said pitch -- is thing love and exciting great. the because what about is GDi way I've us to We're that. for but mean sure waiting So this probably it our I for an before, put I'm I GDi such infrastructure. and is get you quantify the scan bang because laser We a take it's picture a help by of for smart do really for that is and whole video, it lot taking determine corrosion buck they can what you a and corrosion.

we taking really laser deployed that's and We've Well, ROVs. the in work, we're with bonus, that, confident that to that hard interpretation for right? that's us, got the the video feel very Cool part doing we next all to And scanning we're water. double working get is doing that we're thing get do. is, GDi a but

for ROVs pays time dive more creates that twice. anything us So

pretty so like about that. we're things excited And

space, looking we're truly that are things the the when really we M&A So owner we're watching the of. best for

Operator

I like Larson That remarks. Mr. concludes turn the back question-and-answer session. call closing over for would to the to

Roderick Larson

joining questions, thanking conference for our there Have Since a Desiree. call. everyone day. call. are this I'll quarter XXXX year again and And by Thanks, fourth full just wrap great up the no concludes more

Operator

call. today's this and Ladies conference concludes gentlemen,

now may You disconnect.

Oceaneering International (OII) 20 Feb 252024 Q4 Earnings call transcript