Oceaneering International, Inc. (NYSE:OII) Q3 2023 Earnings Call Transcript

Kurt Hallead: Okay, great. I appreciate that color. Second question then is on, I believe your industrial robotics business is embedded in manufactured products, right? But I just wonder if you give us an update on the market penetration you have whether that’s on the autonomous forklifts or on your autonomous people movers, just how you see that business evolving and what kind of market penetration you’ve been able to get?

Rod Larson: Yes, market penetration is going up. We’re getting new customers, so we’ve added a couple of customers with some pretty strong interest. I think everything just short of the PO, but that could change today. So that — the number of customers is improving but also the order from our one biggest customer and we’ve got four more orders that there are significant. So that looks really good and really strong and again we’re getting a lot of recognition for that. The other thing I would just call out manufactured products is — we had our annual planning meeting last week and we pushed really hard on margins in manufactured products. So we’ve built in some cost for we don’t know what those changes will be, but we’ve built in some cost, we’re taking some action that we think will drive margin improvement in the manufactured products business.

Yes, and I think to your mobile robotics, I mean you may have seen or not seen the recent announcement that came from ZF as well about solidifying our arrangement on the people movers we’ve been describing to the market. So I think that’s something that doesn’t really impact 2024 as much, but longer term we’re encouraged with what we will continue to build out in mobile robotics.

Kurt Hallead: That’s great color, thanks. I appreciate it.

Rod Larson: Thanks, Kurt.

Operator: [Operator Instructions] And your next question comes from James Sun [ph] from TD Cowen. Please go ahead.

Unidentified Analyst: Just snuck in there. Good morning, guys. How are you?

Rod Larson: Glad you dialed fast.

Unidentified Analyst: Just maybe update on the SSR or the ROV day rate outlook, I mean in the past we’ve talked about exiting this year at 10,000 and then I think in 2024 the exit rate of 11,000. Is that still in play, is that?

Rod Larson: I think it’s challenged. I don’t know that the numbers have gone away, but I think it’s just taking longer to build. So whether that takes another quarter or two to get to those numbers I think we’re still pushing hard and some of it depends on how some of the other markets develop. We’ve got the strong markets and I’ll just say the strong markets like West Africa and GOM we’re on track. I think where it’s harder is some of the — in Norway is a fairly stable market but those are lower RV rates. So they’re on the other, the underside of the average. In Brazil which is growing is probably one of our opportunities especially with non-Petrobras customers to try to get to something that looks more like the global average.

Unidentified Analyst: Okay, great. And then in the past you guys have had an issue in ADTech with government funding shifting around when we have these dislocations with government spending and now we’re talking about is there going to be a continuing resolution or just so I just wanted to see if you’re having any issues currently and if you expect any negative impact to ADTech as we go forward the next few months and quarters?

Rod Larson: We’ve scrubbed that pretty well James and what I would say is, it’s not like we had in the past where I mean one of the biggest problems is continuing resolution means that new projects aren’t being accepted. Most of what we’re working on right now is existing products so that bodes pretty well. There are a couple of things that we think maybe would be sensitive to delay, but they’re smaller projects. So it’s we’ve got most of that built in the mix.