Oceaneering International, Inc.

Q4 2021 Earnings Conference Call


spk_0: my name is erica and i will be an operator operator about like to welcome everyone to the to oceaneering fourth quarter in full gear twenty twenty one earnings conference call always had been placed on mute to prevent any background noise after the speakers remarks there will be a question and answer period with that i will now from a call over to marked peterson peterson oceaneering vice president of corporate development and investor relations
spk_1: thanks or ago a good morning and welcome everyone to ocean or or quarter and full year twenty twenty one earnings conference call that a calls being webcast in a replay will be available on ocean earns website what made on the call today or rug larson president and chief executive officer who will be providing are prepared remarks and allen curtis senior vice president and chief financial officer before we begin i would just like to remind participants that statements we make during the course of this call regarding our future financial perk mormons business strategy point of for future operations and industry conditions are forward looking statements made pursuant to the safe harbor provisions of the private securities litigation reform act of nineteen ninety five or comments today are also also include on gap financial measures additional details and reconciliation to the most directly comparable gap financial measures can be found in our fourth quarter press release we welcome your questions after the prepared statements i will now turn the call over to wrong
spk_2: good morning thanks for joining call today let me start by saying i'm pleased with our achievements and twenty twenty one as are two hundred million dollars two hundred eleven million dollars of adjusted even a slightly exceeded the top end of the adjusted even a rate reminded of the beginning of your exceeding the guidance midpoint by fourteen percent except for manufactured products which is tied longer psycho market drivers oliver operating segments delivered him group sequential operating results and twenty twenty one we delivered robust free cash flow and twenty twenty one which supported our ability to repurchase one hundred million dollars of ours twenty twenty four senior note an increase or cash position by six eighty six million dollars during the year to five hundred and thirty eight million dollars on december thirty first twenty twenty one i'm encouraged by the supported market fundamentals that emerged last year and expect this drive this to drive increased activity across all or segments and twenty twenty two today i'll focus my comments on our performance for the fourth quarter and year of twenty twenty one or market outlook for twenty twenty two oceaneering consolidated twenty twenty two outlook including our expectation degenerate positive free cash flow of between seventy five and one hundred and twenty five million dollars and even in the range of two hundred and twenty five to two hundred and seventy five million dollars and are segment outlook for the first quarter and four year twenty twenty two now moving to our results for the fourth quarter of twenty twenty one are consolidated adjusted earnings before interest taxes depreciation and amortization were adjusted ebitda was forty six point seven million dollars fourth quarter twenty twenty one consolidated adjusted operating income of seventeen million dollars was one point two million dollars higher than in the third quarter on the strength of increase for good and margins in our manufacture products segment which more than offset the decline in our at segment and higher unallocated expenses unallocated expenses increased due to a material increase in medical and information technology cost recognize during the quarter and additional incentive compensation accruals side were strong free cash flow and annual results we generated one hundred and forty million dollars in cash from operating activities and after deducting fourteen point four million dollars in capital expenditures are free cash flow was one hundred and twenty six million dollars for the quarter we made additional progress with debt reduction during the fourth quarter with thirty seven million dollars of open market repurchases of our twenty twenty four senior note bringing total repurchases to one hundred million dollars for the year good operating cash flow working capital efficiencies and capital expenditure discipline allowed us to increase our cash position by ninety point four million dollars during the fourth quarter twenty twenty one as of december thirty first twenty twenty one or cash balance stood at five hundred and thirty eight million dollars we made the decision during the fourth quarter to terminate a number of entertainment ride systems contract with the financially embattled developers and it's affiliated companies as a result recorded a net loss of thirty million dollars in connection with these evergrande contracts and our fourth quarter financial results in conjunction with these terminations we required by twenty million dollars of contract assets in the saleable inventory now let's look at our business operations by segment for the fourth quarter of twenty twenty one such a robotics or ssr operating income improved sequentially despite lower revenue the performance was led by improved pricing and our be and tooling businesses as a sorry but a margin of thirty one percent during the fourth quarter improved as compared to the twenty nine percent achieved during the third quarter twenty twenty one and was consistent with the average margin achieved during the first nine months twenty twenty one he has this our revenue split was seventy seven percent for my remotely operated vehicle or of a business and twenty three percent from our combined tooling and survey businesses compared to the seventy nine twenty one split respectably an immediate prior quarter as anticipated rb days on higher decline as compared to the third quarter due primarily to typical lower seasonal that like tv be utilization declined to fifty five percent in the fourth quarter twenty twenty one from sixty three percent in the third quarter twenty twenty one and our days on higher decline for both girls support and vessel based services our fleet use during the quarter was sixty two percent real support and thirty eight percent vessel based services compared to fifty seven and forty three percent respectively during the third quarter fourth quarter twenty twenty one average revenue are oh the revenue per day on higher of eight thousand one hundred and sixty two dollars was four percent higher than in the third quarter of twenty twenty one days on higher were twelve thousand and seven hundred and forty seven in the fourth quarter or twelve percent lower as compared to fourteen thousand and four hundred and seventy four and the third quarter we ended the quarter and the year just as we began with a fleet count of two hundred and fifty rv systems at the end of december we had rb contracts and seventy five to one hundred and thirty seven floating rates and a contract or fifty five percent a slight decrease from september thirtieth twenty twenty one when we had our the contract on seventy seven of the one hundred and thirty three floating rigs under contract or fifty eight percent turning the manufactured products or fourth quarter twenty twenty one revenue of one hundred and three million dollars was thirty seven percent higher than in the third quarter twenty twenty one adjusted operating income and adjusted operating income margin of nine percent were substantially higher sequentially primarily due to better absorption of fixed costs and a favor favorable project mix bidding activity across our energy products businesses was active but continues to lag and or mobility solutions businesses or manufactured products backlog on december thirty first twenty twenty one was three hundred and eighty million dollars compared to our september thirtieth twenty twenty one backlog of three hundred and thirty four million dollars the backlog decline in the fourth quarter twenty twenty one reflective thirty eight million dollar reduction associated with the evergrande contract terminations or book to bill ratio was one point one for the full year of twenty twenty one as compared with the trailing twelve month book to bill of one point zero on september thirtieth twenty twenty one after projects group or opie g fourth quarter twenty twenty one operating income decline sequentially on lower revenue revenue declined eleven percent due to seasonality in the gulf of mexico and the third quarter completion of the angola riser was like well intervention project fourth quarter twenty twenty one operating income margin of eight percent remain consistent with the third quarter twenty twenty one as improved margins from intervention maintenance and repair or i am more activity positively offset the fixed cost margin effect of lower revenue for integrity management and digital solutions are i am the as fourth quarter twenty twenty one operating income increased sequentially on slightly lower revenue operating income margin improved to ten percent in the fourth quarter twenty twenty one from nine percent in the third quarter twenty twenty one as the business continues to benefit from operational improvements implemented since the beginning of twenty twenty or aerospace and defense technologies are ad tech fourth quarter twenty twenty one operating income declined from the third quarter of twenty twenty one on a six percent decline in or decrease in revenue operating income margin declined as expected to thirteen percent due to changes in project mix fourth quarter twenty twenty one unallocated expenses of thirty six point seven million were sequentially higher do it to a combination of increased accruals for instead of based compensation higher than expected healthcare costs and increased information technology costs now through my focus for a year over year results of twenty twenty one compared to twenty twenty for the year consolidated adjusted operating income improved on a slight revenue increase as compared to twenty twenty adjusted operating income and our energy segments improved by fifty seven point three million dollars and operating income marge and improved by three hundred and seventy six basis points over twenty twenty results and nine percent improved results were a result of a shift in the mix of revenue and it continued focus on operational excellence programs are at tech segment continue to be a steady performer delivering another record year of operating income and margins consistent with twenty twenty compared to twenty twenty or twenty twenty one consolidated revenue increased two percent to one point nine billion dollars with revenue increases in our ssr okay gee i am s and ad tech segments being partially offset by a decline in are manufactured products revenue consolidated twenty twenty one adjusted operating income and adjusted ebitda improved by fifty one point four million dollars and twenty six point three million dollars respectively led by our opie and ssr segments overall we generated adjusted even have two hundred and eleven million dollars a fourteen percent increase over twenty twenty we generated two hundred and twenty five million dollars in cash flow from operations and invest invested fifty point two million dollars in capital expenditures significant free cash flow one hundred and seventy five million dollars allowed us to repurchase one hundred million dollars or twenty twenty four senior note while also increasing our cash balance by eighty six percent eighty six million dollars assuming to five hundred and thirty eight million dollars we are pleased with the following notable achievements accomplished during twenty twenty one each of our five operating segments achieve positive adjusted operating income and positive adjusted ebitda during each quarter and twenty twenty one for opie business achieve the most significant improvement of our five operating segments growing revenue by thirty one percent and twenty twenty one adjusted operating income approved by almost thirty seven million dollars and operating income margin improved eight percent as compared to an adjusted operating loss margin of two percent in two thousand and twelve ne or something robotics business a recognized leader in were class rv services continued to achieve best of classroom support performance with a ninety nine percent plus uptime achieved during the year we continue to advance or new technologies having freedom is hers vehicles during the year to serve the renewables market and advancing the technical readiness of freedom or hybrid rv and autonomous underwater vehicle a the which we expect to be fully commercialized in twenty twenty two we continue to see significant improvement in our i am yes business with adjusted operating income improving by more than twelve million dollars as compared to twenty twenty recognition of the quality of the i am the as brand was evidenced by more than eighty million dollars and contract award during the fourth quarter of twenty twenty one bringing the twenty twenty one total to three hundred and eight million dollars is as referenced in our recent press release and we continue to see growth in the segment for twenty twenty two or ad tech business grew it's revenue by eight percent while maintaining it's operating income margin over sixteen percent leading to a new record annual operating income and even up performance our ability to generate substantial free cash over the past several years has allowed us to mitigate the risk relating to or twenty twenty four that maturity and we maintained our commitment and focus on safety the team or very focused on our like saving rules identifying hi has tasks and developing engineered solutions to mitigate risks are told a recordable internet rate er tr i are of point for for twenty twenty one remained comparable to the record performance achieved and twenty twenty the following annual financial metrics ago sequentially improved and twenty twenty one revenue of one point nine billion dollars was modestly higher than the one point eight billion dollars achieved and twenty twenty adjusted ebitda of two hundred and eleven million dollars exceeded the top end of the guidance range from the beginning of year and was fourteen percent higher than the one hundred and eighty four million dollars generated and twenty twenty positive free cash flow of one hundred and seventy five million dollars significantly surpassed the seventy six million dollars generated and twenty twenty we maintain our commitment to capital disciplined by reducing capital expenditures for a second year to fifty million dollars as compared to sixty one million dollars and twenty twenty cash increased by eighty six million dollars to five hundred and thirty eight million dollars outstanding debt decrease the seven hundred million dollars falling one hundred million dollars of open or open market repurchases of our twenty twenty four senior notes net debt to adjusted even a ratio decreased from one point nine on december thirty first twenty twenty two point eight on december thirty first twenty twenty one consolidated adjusted even a margin of eleven percent improved from the ten percent margin it's you and twenty twenty we continue to make good progress on our sustainability efforts or environmental social and governance initially it from an environmental perspective we hired and environmental consulting firm and instituted a project together greenhouse gas emissions data for our global office facilities manufacturing facilities and vessels this roger x started and twenty twenty one will allow us to establish a baseline that will be used to identify gaps and develop target for future emissions reduction we continue to develop and evolved technology such as remote piloting an autonomous mobile robots to assist our customers and mitigating carbon emissions this includes offshore environments for clean production of hydrocarbons in energy transition projects and onshore environments for manufacturing hospital and entertainment facilities we also it added a reducing c o two emissions tab to the sustainability portion of our website to highlight the technology were using and developing to reduce environmental impact
spk_3: from a governance perspective we formalized or management and bordeaux oversight structures relating to sustainability we renamed or boards nominating and governance committee to the nominating corporate governance and sustainability or and seat vs committee and created an executive lead sustainability committee to guide and oversee the come
spk_2: many yes priorities the sustainability committee reports that the mcg as committee on a quarterly basis during the last year the boards competition as barbed with greater gender and ethnic representation and average tenure has decreased during twenty twenty one oceaneering fall in second annual sustainability report which is posted on our website using the disclosure methodology outlined by the sustainability accounting standards board and twenty twenty two we plan to file our first task force on climate related financial disclosures report and to publish a new investor presentation outlining our general long term strategies to pivot the company into new markets oceaneering continues to hold and e s p index a rating with msc i am now turning to our twenty twenty two outlook for the markets we serve brent pricing of about seventy dollars per barrel sustain a modest level of off your project sanctioning and good i am or activity and twenty twenty one the forecast of nearly ninety dollars per barrel and twenty twenty two and anticipated higher prices and the out years should support increased levels of np backs and cap expanding and twenty twenty two analyst and research service projections for other key metrics we track also support expectations were increased activity and twenty twenty two research source data indicate floating rig day rates are increasing which we view as an indication of increasing demand there were approximately two hundred three awards and twenty twenty one and rice that forecasts a fifty five plus per cent increase and twenty twenty two two around three hundred and twenty and remaining their three hundred into twenty twenty three price that also forecasts three hundred and seventeen three installations and twenty twenty two to be essentially flat to twenty twenty one analysts also project substantial growth and after renewables markets over the next decade right that estimates that offshore wind cap economic spending will average around fifty billion dollars per year and twenty twenty two and twenty twenty three and eighty five percent increase from the average annual spend between twenty sixteen and twenty twenty rice that also sees continued double digit growth through the end of the decade with spending projected to increase to one hundred and twenty six billion dollars by twenty thirty and finally notwithstanding the gov current government continuing resolution the government related markets we serve are expected to remain relatively stable with continued modest girl for the foreseeable future now to our twenty twenty two consolidated outlook brooch nearing as a result of our first quarter seasonality in our energy businesses uncertainties regarding us government appropriations due to the continuing resolution and anticipated expenses needed to prepare for higher activity and twenty twenty two we expect our first quarter twenty two twenty twenty two financial results to be significantly lower as compared to the
spk_3: fourth quarter of twenty twenty one however based on the your and twenty twenty one backlog projected start dates of new contracts anticipated twenty twenty two order intake and supportive market fundamentals we project a greater than commensurate ramp up in the second quarter activity and branch results which are expected be sustained throughout the rim
spk_2: vander of the year we are projecting our twenty twenty two consolidated revenue to grow more than ten percent with increase revenue in each were operating segments led by manufactured products we expect sequential improvement in our twenty twenty two financial results based on our expectations for higher operating income and higher margins in each of our energy segments led by ssr know pg and higher operating income and stable margins in our ethics segment for the year we anticipate generating through hundred and twenty five to two hundred seventy five million dollars be bit of with increase contributions from each or seconds at the midpoint of this range or even after twenty twenty two would represent an eighteen percent increase over twenty twenty one adjusted even though when his better for your twenty twenty two feel positive free cash flow of seventy five to one hundred and twenty five million dollars these expectations assume the continuing trend of support a commodity prices and no significant incremental over nineteen impact we remain committed to generating cash which allows us to continue developing in delivering technologies that help our customers produce hydrocarbons and a cleaner safer manner while increasing our investments into new markets including energy transition digital asset management aerospace and defense solutions and mobility solutions for twenty twenty two we forecast are organic capital expenditures the total between seventy and ninety million dollars this includes approximately forty to forty five million dollars and maintenance capital expenditures and thirty to forty five million dollars of growth capital expenditures we anticipate commodity prices to support growth and free cash generation for traditional customers of our energy businesses during the twenty twenty two to underpin these investments
spk_4: and twenty twenty two interest expense and that of interest income is expected to be approximately thirty eight million dollars and are cash tax payments are expected to be in the range of forty to forty five million dollars this includes taxes incurred in countries that imposed tax on the basis of and country revenue and bear no relationship to the profitability of so
spk_2: such operations directional a and twenty twenty two for operations by segment our expectation for improved results perception robotics is based on increased revenue increased rb days for on higher minor shifts and geographic mix and stable to improving pricing results for tooling based services are expected to improve with activity levels generally following of the days on higher survey results are projected to improve on higher survey and positioning activity and we expect revenue growth in the high single digit range and even margins the average and the low thirty percent range for the full year for our of these we expect our twenty twenty one service mix of sixty percent real support and forty percent vessel services to generally remain the same for twenty twenty two our overall rv legalization is expected to be in the mid sixty percent range for the year with higher seasonal activity during third excuse me the second and third quarter we expect to generally sustain our our of the market share and fifty five sixty percent range for girl support services at the end of twenty twenty one there were approximately twenty three opening rvs on board twenty floating drilling rigs with contract terms expiring during the first six months of twenty twenty two during same period we expect thirty nine or are always on thirty three bloating rigs to begin new contracts for manufactured products we project a segment performance to improve on a significant increase in revenue primarily as a result of increased order and take in our energy businesses during twenty twenty one we are seeing increasing interest and our mobility solutions businesses and currently expect to see marginally higher activity from these businesses and twenty twenty two and he an opportunity to build backlog for more meaningful contribution and twenty twenty three we forecast are operating income margins to be in the mid single digit range for the year for rpg operating results are expected to improve and twenty twenty two on a marginal increase in revenue this expectations based on better anticipated pricing and proof vest legalization and increase diving activities more than are setting a low revenue from roger was like well intervention activities overall for twenty twenty two we forecast operating income largest average in the high single to low double digit range vessel day rates are increasing ing and we anticipate some challenges with vessel availability in the gulf of mexico and finding vessels at affordable rate and other geographic areas however while we anticipate higher direct costs from labour and third parties we expect these increased costs to be offset by better pricing as per usual the segment has the highest amount of speculative or incorporated on our guys and energy commodity prices will need to remain supported press to cheaper plan fry in the ass results are forecast to improve on high revenue continuing the trend seen over the last several years we believe customers continue to see the value in our service offerings and she good global opportunities for renewals and business expansion particularly in the uk and west africa create a margin is projected to remain in the high single digit range for the year for ad tech revenues expected to be higher producing improved operating result we anticipate growth in all three of our government focus businesses operating income margins are expected average and the mateen range for the year for twenty twenty two we anticipate unallocated expenses the average in the mid thirty million dollar range for quarter as we see higher information technology expense and higher costs due to inflation as compared to twenty twenty one for first quarter twenty twenty two outlook sequentially as previously noted before cast first quarter twenty twenty to leave it at to be significantly lower on lower revenue as compared to the fourth quarter of twenty twenty one we anticipate higher costs for hiring and training and personnel mobilization of equipment and inflation as we prepare for signet you can increase in activity forecast for the remainder of twenty twenty two lower revenue and operating results in our energy segments and relatively flat revenue and lower operating results that are xxx month in closing or focus his the continue generating meaningful free cash flow growing our service and product offerings continuing to advance or history initiatives and improving i returned by driving efficiencies and consistent performance for organization engaging with our customers to develop value added solutions that inc reese their cash flow and remaining just blend in our pricing decisions and our capital deployment strategies and most importantly remaining dedicated the safety and wellbeing of our employees and our customers thank you to our employees and management teams for navigating through all the global uncertainties to deliver a successful twenty twenty one i also want to thank our shareholders who have shown faith in our ability to grow and transform the company i haven't been able to say this for a while but i'm excited to see the growth opportunities across all of our businesses over the next several years the operating efficient that we put into place over the last several years position us to benefit from this growth while increasing our profitability
spk_0: we appreciate everyone's continued interest in oceaneering and will now be happy to answer any questions you might have at this time if feel like to ask a question please press star there's another one on your telephone keypad again that star wine to ask a question
spk_5: here first question comes from ian macpherson with piper sampling
spk_2: thanks going rogue a good morning of course we're wondering when we listened to all of your and these calls this quarter how realistic your guidance is given that melds up and a macro
spk_6: and thinking about more about upside sensitivities given
spk_2: that backdrop and we are
spk_6: the downside and recognize that you have a lot of later cycle
spk_2: you're within your very diverse as next i wonder if you could talk about what parts of your guidance maybe don't truly reflect the possibility of enduring hundred dollar loyal this year in terms of spot market activity in terms of prospects for additional
spk_6: you know beefy rise a little wi campaigns in earning your back on today that could materialize
spk_2: or even if it's on the defense side so yeah let me let me add me jump on that a little bit and and i think he and let me make sure i get your question right if if if same hundred dollar well doesn't process can we go back to earth and more of a seventy dollar market or or even slightly lower this year as that challenge sort of where arranges today's that that accurate now the opposite of that in the optimal okay so if we so isn't there more upside of it with we stay in your one hundred yes i what what i would what i would i guess it depends on why i'm you know will it will it get create some near term opportunities and the government side potentially on but contain resolution it we gotta see how that offsets what might happen but they're certainly you know anything related to defenses going to be i think i'm be more important now than it maybe was a few weeks ago so i think that that's something that we haven't seen yet but that will keep an eye on as far as the hundred dollar while we are really sensitive to save you know that they areas out as being affected right now i'm so you think about north sea gulf of mexico i think those things could i think those things could resist but again they're going to be moderated slightly by the availability of the big equipment so if you start see people are are going to put more eggs up there going to they're going to be the and we've got the vessels to do the work right now are competing with vessels with offshore wind so the upside on oil is a little the challenge which has the capacity glove there and get it
spk_3: but but i think all those things are are leaning towards the high side as the commodity prices is good
spk_2: that makes sense and then as good to see the free cash flow visibility the have for this year and i'm curious to given how well you've been able to protect and in augment years share in already services through cycles we know that there
spk_7: there is potentially more competition and that area heading your way
spk_3: you know by at least one significant player and
spk_2: i wonder if you could speak to what the the capital intensity of of maintaining your competitive dominance in that business looks like to you and recovering market with higher activity levels over the next two or three years so i in and i think that's a great question because some can we don't talk about a lot but over our our ability to maintain competitive as all it always been sort of on arm or reverse compatibility so as we develop new things in the are obese very few of them really generate a brand new vehicle you think about a very very high said a jet recycle and reuse of the of the capital meaning you know the overboard and quit meant the cabins we use the fish itself still have a high degree of high percentage of of reuse so you're not building for example of a lot of new flotation you're not building a lot of that a lot of the frames are usable so we're able to you to upgrade and and remold at a much lower cost than somebody that's building something from scratch to go out there and compete with us and we go faster and you think about supply chain challenges that's a that's a big thing when you're you're not trying to source everything's i i think we still maintain that advantage we certainly maintain the geographical footprint advantage
spk_6: and and we're leveraging that with our customers you know risk is high especially read rates go up taken a risk on somebody that hasn't been out there doing it and haven't been established in the region at a really that's a good place to lean on the people that the keep your eggs up and running like we mentioned earlier ninety nine plus percent of the time that makes sense to me as a it's been a very common impractical practical symptom of the the last downcycled recovery that the the sector broadly has underspent cap backed by necessity
spk_2: the and i guess what i was trying to teach that new was maybe some confidence that you have not been and we we should not necessarily expect am a glaring catch up surprised with cap bags when we get beyond twenty twenty two for that reason it's how the dance with that is now
spk_8: now know this is alan in fact that he looked of that take up here and twenty two going from a fifty million dollar cap acts and twenty one yoda guidance range year
spk_2: and somewhere around eighty million dollars in the midpoint ranges bringing back a little bit of that main and cat back from a that reading to serve that we're looking at mean we we've maintained our assets throughout the whole cycle more than ninety percent of our our a weekly work during the y twenty one so arguments pretty much ready to serve today we are him to bring back a few more assets
spk_3: online here in the first quarter just to be able to see that ramp up the key to keep read it
spk_8: we perceive so it's it's not a significant amount this point in time i think it's where we actually are retrofitting and in getting into the easiest first time vehicles our were saying increased demand in the offshore wind markets
spk_2: and even then rudd said the to retrofit it existing
spk_3: are we to my goodness for a squirt were reusing the repurchasing the existing over boarding equipment so the lars the when the control and things of that nature so
spk_6: all said it it's not a significant cash or all to do that
spk_0: that's great thanks sound and rhodri say your inside thanks to you again if you wish to ask a question please press start line on your telephone again that star one to ask a question
spk_9: your next question comes from taylor zuiker the tutor pickering out a rare morning taylor and you more than a rotten out thanks for i take my question that first one on free kass on and cap allocation so at you for free cash flow super strong and twenty twenty outlook in and point that i continued healthy free cash flow and as your out yet net lavish below one time and and that and in lower over the course of twenty twenty two so are clearly twenty twenty two you're going to be sentenced to more drug capital it which makes a lot of sense alley charlton to to that the cap a program in prior years and so i guess my question is what led with leverage where the ad in the pre cast on profile on remaining pretty healthy a height and going about the potential for your shareholder distributions on earth me and buybacks or defend at some point down the line on one hand and on the other hand and balance and that sort of pursuit with with continued growth capital pursuit is there is there up and you know a net data gross that target you're looking for before you make that decision or ah
spk_2: the just kind of a tv type type thing right now
spk_3: did i say right now it's more of a tv day and mean we're certainly encourage you know seen a metric go down below one at this point in time and if you would you factor in our guides range yeah generate me at the midpoint about hundred million of cash
spk_2: yeah you're fact that way you're getting real close to a neutral position on cash at that point in time by year and so it began for just a lot of flexibility i think we really want to pursue some of these additional growth opportunities more this year we don't want to get out overseas that we want to make certain key want to build more of a cash draw the last several years or know we rebuild the next two quarters and key to the three and yom kippur portents me when we generate more of our cash the right now we're we're going to continue to monitor the i'll look for see like twenty two very optimistic and
spk_5: on on the opportunities here
spk_3: but i think it's going to be more focused on some elements of growth both
spk_9: in new energy kind of the areas as well as mobile robotics and maybe ad tech and ninety as mean you look at our growth propeller charter those are the elements for it we haven't you know the ability to spend some extra cash for going to pursue those first and foremost their share yeah make them and and just a quick follow up their i'd have a tough my head it's a little while and you've done and then a and and and the thing about cap allocation just curious where in organic growth since and for that the ranking less active and i i rather than in that the energy
spk_2: yeah market that that new energy and market or non energy and martin am i think wait what you want old likely see is it's it's a lot like what else just said it is where we can find probably both on things that fit to help us drive those things that are on what we call or propeller chart that that really put us on to growth factors that are that are i would say a lot stronger than what we see and traditional oil and gas and the and i say traditional oil gas because some of those really are on their still within the oil and gas business but they but they tend to serve more of that leading edge of between or say for barrels and lower carbon emissions associated with servicing those those those reservoirs that are already place so i would just watch that space on we we talk a lot about it about how we are we move that direction and in can see
spk_9: growth i i don't it's really hard to to say there may be some cases where we find some we look at things but but we want things that drivers in that in that direction that we're moving with you know during the whole company towards what's coming next for energy got it and one last question for me it is on okay eg for for twenty twenty two sound like a tiny tiny to allocate lives in the same when you provided last quarter at any given us three sort of drivers for the improve performance are expected for for some point way to mature increase diving activities better pricing improve athlete little nations and my question is do we need to see some more calm than more discreet contract
spk_2: project work be awarded to dictionary in the coming months and quarters for for you to to hit that way inclined to outlook or i just given up the three factors that i just mentioned in that you mention those good enough for you to to see healthy growth in that business year and i'm nineteen i think it's a mixture both right because because we get just general call back to live work drives the gulf of mexico so so that's that's beside maybe to the first for you mention that will drive a healthy robust activity there and then and then for international work it's going to be more about discreet opportunities because they require more planning a lot of times there's not of there's not a vessel sitting and kooshian we'd go do this work we gotta bring something and west africa or somewhere in asia pacific region so so they're a little bit more discreet opportunities and sort of believe you can still build a body work around them but you need that that first one to go and get mary and start start building off of unibanco project to get their here and and those take time so mean it's windows you'd have to see some of the
spk_8: really led by que to if you want to see an impact the car here
spk_10: still be a good buildings boy for twenty great
spk_11: understood think than answers
spk_0: thanks failed
spk_12: again if you wish to ask a question please press start line on your telephone
spk_13: that star one to ask a question
spk_14: and comes from mark
spk_15: bianchi with colin
spk_16: and we're learning this is a this is actually gym sharm our you have a a gym
spk_15: sorry what
spk_2: so i wouldn't you could you give some more color on ad tech results have been drifting lower over the past few quarters and i believe you're expecting lower results in in the first quarter but the full your outlook is pretty strong it's just curious what kind of backlogged you have in this business and and what gives you the confidence that margins will rebound i was first why i think part of part of what was happening in an ad tech is is a little bit of mix we just fantasy the end of the year at towards later in the end of year and in the first quarter it's if a lot of continuing resolution and even though and then i'll get to this next a lot of our projects are are funded their ongoing and there are things that we've been doing for a number of years in some cases that they just redo the contract and we move forward and and so while there's not what we would call that the same backlog that we have another areas they're they're things being funding it through new year over year so so they're continuing thing but also even in those contract while you're in in continuing resolution into the customers are a little cautious they slow down a little bit they kind of wonder how long they have to make their allowance last so to speak so they so they do not slow down a little bit to think about a little bit about a little bit of a tentative span and a little bit i'm exchange and that's why that's why we we we think we see what we do right now
spk_3: i think i will become clear even even if we remain other containing regulation they'll know what they wanna do and and and i expect that actually could create a little bit of a resurgence just some amount of understanding what's going to be and then the other part as we we know from those contracts then continue on like i mentioned before that that they're going to be there in the back half of the air and and work will be done and and the mix doesn't prove later in the or yeah because of the primary thing as he get a lot more the the lower margin touch labour kind of work that still proceeding
spk_15: under this continue resolution the expectation that has that resolves itself
spk_8: that will start to see some of the higher value added type of project brought in our do more complex engineering type activities
spk_2: okay great understood and then just last one for me in the first quarter is there a particular segment that that might be weakest sequentially versus the fourth quarter i think we're just gonna not give any kind of specific guidance on segment of this point jam mean there's as he said most of them can be lower the koran quarter and they're really yeah some elements are we just looked at the year and and look there were things could all and this point family were more focused on just getting our our aim is to serve as we call it that really made the demanding few to be a so where where does not give guides on significance this point i wouldn't i would just add this to my i think he probably been here in this in the outer world where seen a little more seasonality this year than we've had seen in the past and we expect that's because you know there was there were some caution about you know budgets were sort of me it it out over the entire year and so that sort of leveraged a lot of the assets to develop work in the in the weather window when we didn't do that before some of that was covered and work continuity just just meant that we spread the work out more than we have in past years and in this year we just i think some of that is caught up and we to see more that normal seasonal
spk_17: holiday in that so you can kind of i guess can kind of translate that into the businesses are a little bit more little more color than allen gave you but i'm and to get an understanding of what we see happening and and again
spk_0: it's also why we think that you to you three are are going to shift back to the busy the busy quarters like we had that
spk_2: okay great thank you very much
spk_0: at the time there are no further questions on not on a call to the speakers for any closing remarks

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