Q4 2020 Franks International NV Earnings Call
Thank you for holding your conference will begin momentarily and two to three minutes. Thank you for your patience.
[music].
Good morning, and welcome to the Q4, 'twenty and 'twenty Franks International N V earnings Conference call My name and things narrow and I'll be the operator for today's call. At this time all participants are in a listen only mode. Later, we will conduct a question and answer session. During the question and answer session. If you have a question.
Please press Star then one on your Touchtone phone. This call is being recorded I will now turn the call over to MS. Melissa Cougar and Melissa you may begin.
Good morning, and welcome to Franks International Conference call to discuss our fourth quarter and full year of 2020 earnings our speakers today as shown on slide two of the earnings presentation on Mike Kearney, Chairman, President and Chief Executive Officer, and myself, Melissa <unk> Senior Vice President and Chief Financial Officer, joining us for the Q&A per.
And of today's call will be Steve Russell Senior Vice President of operations of.
The presentation has been posted on our website that we will refer to throughout this call.
If you'd like to view. This presentation. Please go to the investors section of our corporate website at Franks International Dot Com on today's call Mike will provide an overview of our fourth quarter results and highlight some of our 'twenty and 'twenty achievements and discuss some of our technological highlights during the fourth quarter.
I will then review of the financial performance for the fourth quarter and provide some thoughts on 2021, we will close with the question and answer session.
Before we begin commenting on our fourth quarter and full year 2020 results. There are few legal items that we would like to cover beginning on slide three.
First remarks by company Representatives may refer to or contain forward looking statements such remarks are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements.
Such statements speak only as of today's date the company assumes no responsibility to update any forward looking statements as of any future date.
The company has included in its SEC filings cautionary language identifying important factors that could cause actual results to be materially different from those set forth and any forward looking statements and.
A more complete discussion of these risks is included and the company's SEC filings, which may be accessed on the SEC's website or on our website at Franks International Dot Com. Please note that any non-GAAP financial measures discussed during this call are defined and reconciled to the most directly comparable GAAP financial measure and the fourth quarter 2000.
And 'twenty earnings release, which was issued by the company I will now turn the call over to Mike.
Thank you Melissa we appreciate everyone joining us for the calls a day.
Turning to slide four we delivered solid fourth quarter results with total revenue, increasing 14% sequentially to just over $96 million.
And from an adjusted EBITDA standpoint, we were able to move the company back into positive territory and what we believe to be the bottom with adjusted EBITDA, increasing to $4 $6 million.
From an operational perspective, we experienced improved customer activity levels, primarily in our tubular running services segment.
We wouldn't is multiple rigs going back to work and several core operating areas.
After previously being sidelined due to the COVID-19 pandemic.
Additionally, we experienced and improving revenue backdrop, and our U S onshore business, which mirrored the average U S land rig count increasing over 20% and the fourth quarter.
And our tubular segment revenue decreased slightly in the fourth quarter, mostly due the large tubular deliveries and the prior quarter.
With that said, we were able to make progress on our goal of international expansion and this segment.
Our tubular product and drilling tool sales increased internationally.
Which partially offset the fourth quarter revenue decline and the U S market.
And our cementing equipment segment revenue increased slightly on the fourth quarter, mostly due to the improvement and our U S land business more importantly, we made substantial progress on our goal of international expansion in the segment.
And I am proud to report that our team delivered a 35% year over year increase and international revenue the.
Success of our international expansion, partially offset year over year U S market revenue declines, which have not recovered back to pre COVID-19 levels.
Our international expansion and improved fourth quarter profitability and help drive margins back towards prior peak levels.
Before covering specific geography highlights I would like to provide and update on the COVID-19 situation.
We were encouraged that the COVID-19 virus impact lessons during the fourth quarter. This was primarily due to the fact that lockdowns were lifted and borders and many countries were reopened this allowed many of our customers to return to work rigs to be redeployed and activity levels to increase.
Areas, where we witnessed the greatest improvement and the fourth quarter occurred and regions. There were some of the hardest hit by the pandemic during the prior two quarters such as Africa.
Contrary to all of these positive signs we continue to contend with many countries and operators instituting additional layers of travel protocols and restrictions, which have reduced efficiencies and make it more challenging the operator.
As you know our customer base spans the globe and each of the geographies and which we operate face different degrees of Covid related disruptions.
We continue to see a wide range of customer responses, even though many of our customers are on their way back to pre COVID-19 levels of activity.
Even though we experienced improved customer activity levels and the fourth quarter, we continue to be prepared to flex our operations up or down as the COVID-19 situation warrants.
At this point of our greatest concern revolves around infection rates from these highly contagious new strains of Covid.
Clearly it is not within our control if we see new countrywide lockdowns and border closings.
We remain in active communication with our customers and we are working closely with them as we plan. Our operations. We will continue to update the market on how COVID-19 is impacting our business.
Now I would like to describe some of our Q4 highlights as noted on slide five, particularly on a rig activity level movements and each of our geographies and some initial thoughts about 2021 activity levels.
And our Asia Pacific region activity levels remained steady with core customers and Indonesia, Malaysia and China.
While the average offshore rig count in this region decreased over 20% sequentially. This was mostly driven by reduced activity and India more of a commoditized market and which we choose not to participate.
We did experience and initial uptake and are submitting operations and this region with several jobs executed and multiple countries during the fourth quarter.
In line with our strategy of expanding our submitting the operations internationally, we will remain focused on building upon this momentum over the coming quarters.
Looking to 2021, we see flattish activity levels of during the first quarter with increases across our business lines of the beginning and the second quarter of the year.
We remain focused on expanding our submitting and drilling tools work in this region as well as gaining additional market share for our core Trs work.
The Middle East was our most challenged region during the fourth quarter, primarily due to lower rig count this market share resilience through the first several months of the pandemic as we gained additional market share with our existing customer base and the last quarter of the year. We saw those gains flatten out and were affected by of 19% average so.
<unk> will decline and rig count and the fourth quarter.
We're expecting rig counts to improve later in the year, which should position us nicely for year over year meaningful growth.
And our Europe, and Africa region activity levels bottomed and the third quarter and improved significantly as multiple rigs returned to work and the fourth quarter.
Our Europe Africa region was our most improved areas and the fourth quarter and.
And we believe that we will be on track to achieve pre COVID-19 revenue levels in 2022 with additional rig work commencing in the second quarter of this year.
And Q4 are North America, and offshore region benefited from improved activity levels and the U S Gulf of Mexico, with additional rig deployments and the Caribbean and offshore Mexico. These.
These improvements were partially offset by continued weakness and the eastern Canada offshore market.
We continue to be well positioned and all core markets within our North America and offshore region and are well prepared the service our customers. We do see some customer activity dropping slightly during the first quarter and this region and then of a strong recovery beginning in the second quarter and continuing throughout the year, especially and the caribou.
And offshore Mexico.
The U S onshore market rebounded nicely throughout the fourth quarter with average U S land rig count being up over 20% sequentially and ended the year of just over 350 rigs and interestingly. There was no end of year seasonal downturn and U S land as the rig count continued to rise through December and.
And then the January reaching over 380 rigs at the end of the last month.
As we previously discussed our U S land strategy focused on cost control and appropriately right sizing the business to ensure we can flex our operations up further as the market continues to improve.
The increased rig count and associated customer activity levels returned to our U S land business to positive adjusted EBITDA and the second half of the fourth quarter and leaves us well positioned for further improvement in 2021.
Finally, our South America region, although small exited the year showing declines and keeping with the international rig count movement.
We are seeing notable improvement with anchor contracts and the region beginning in the first quarter and significant tendering activity, which Franks is aggressively pursuing.
Despite the challenges brought about in 2020 Franks had several areas of notable achievement the highlights of which are on slide six.
As we moved into 2020, our organization set out to achieve several important goals that would positively reshape of our organization and position us well for 2021 and beyond.
Our goals included properly right sizing our operational footprint in line with changing market conditions aggressively reducing our overall cost structure generating free cash flow and deploying value, creating technologies that will increase efficiency reliability and safety for our customers.
Despite the challenges that the Covid pandemic created I'm very proud to report that not only did we achieve our goals for 2020 and many cases, we exceeded them.
As many of you know our profit improvement program originally called for indirect and SG&A cost savings of $30 million and 2020, and another $15 million and 2021.
And I'm pleased to announce that we exceeded our cost reduction goals and achieved the 27% year over year reduction and our overall cost structure inclusive of operational cost savings and indirect operational and SG&A support cost Melissa will elaborate more on the details of our cost reduction efforts later in the call.
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But I want to recognize and thank our organization for accomplishing this difficult, but necessary achievement, especially during these challenging times created by the Covid pandemic.
As I referred to earlier, we combined our middle East and Asia Pac operating regions and streamlined other operations to allow us to quickly flex our field strength up or down in line with market conditions. This.
And this positions our organization well for accelerated margin expansion in 2021 and beyond as market conditions, most likely continue to improve.
Protecting our balance sheet was another major priority for our organization and 2020, Melissa will speak in more detail on our current liquidity position, but I am very happy to report the despite a very challenging year.
We exited 2020 and a position of financial strength matched by very very few companies.
The operational cost cuts, we completed along with our disciplined approach to capital spending and enabled us to generate positive free cash flow and the fourth quarter and for the full year, our strong liquidity position and debt free balance sheet positions Franks to take advantage of potential opportunities and the marketplace is <unk>.
<unk> demand continues to rebound.
Finally from a technology perspective, we stayed focused on our theme of innovation with the purpose and creating services and products that are responsive to our customers' needs.
We began 2020 with the reorganization of our R&D and technology efforts with the renewed purpose of prioritizing projects with the greatest near term potential of commercialization and return on investment.
We also became more focused on projects that incorporate digitalization to increase efficiency reliability and safety.
Our investment and equipment and software, enabling remote operation keeps our employees and those of our customers and other service firms out of the Red zone.
The next generation of our intelligent connection and analyzed makeup system or ICANN is called I can predictive.
This technology provides the automated the evaluation of connection makeup data and seamlessly integrates with other Franks Trs solutions.
Additionally, our HR tool data logger harmonic isolation tool enables more efficient data acquisition for effective downhole decision, making.
This product has been recognized by multiple customers for increased efficiency and meaningful cost savings.
Finally, our Centrify multi machine control system has now been deployed with several customers the day.
Advanced technology has been recognized for reducing the head count on the rig.
Which greatly increases safety and reduces our costs as well as those of our customers.
And the top of it off as we mentioned last quarter, we were recognized as finalists once again at the World Oil awards with three different technologies. Our organization is extremely proud of the fact that our skyhook device took home the award for Best Health safety environment.
Stable development and the offshore category. This further demonstrates our focus on ESG efforts through technological innovation.
And short it was the big year for the commercialization of impactful technologies at Franks.
It's exciting to bring technologies to the market that reduced cost per Franks as well as for our customers, while increasing efficiency operational reliability and improving safety.
Lastly, I would like to call out our successful deployment of our remote cam viewer on multiple jobs and the U S onshore market a remote cam viewer allows for the operation of the tongue and the monitoring of the torque term grafts to be performed remotely the.
This reduces cost by enhancing process efficiency and once again improves safety by reducing personnel on location the <unk>.
Cam viewer enables one technician to communicate connection integrity on a real time basis the.
The creasing potential errors.
And reducing personnel on location by 50%.
This technology is a positive needle mover for our customers.
Another new technology focused on the U S onshore market is our big easy composite cement retainer. We've recently completed several successful jobs with this tool, which focuses on increasing drilling efficiency and enhancing wellbore integrity.
Our isolation plug design has a large bore area that enables higher pump rates, reducing rig time, while at the same time, reducing the risk of erosion and the loss of seal and integrity.
Our isolation plug is easily dribble with any style of bit and has and improved slip retention design and.
The enabling it to perform well even in the most difficult well conditions.
In short our isolation plug design has enabled several of our customers to experience quick cost effective and efficient completion of remedial submitting operations.
Now I'll turn the call over to most of Kugel, who will discuss our financial results.
Thank you, Mike referring to slide seven and despite a 14% growth and the fourth quarter. The company did see and overall revenue decline of 33% year over year, driven by the tremendous reduction and rig activity.
This brought about by the pandemic and affected the domestic and international rig count.
Mike mentioned the drivers of our strong fourth quarter performance and we are optimistic. These results indicate we are seeing a recovery pattern emerge.
Turning us for further growth in 2021.
<unk> stated we believe the worst is behind us.
Full year, adjusted EBITDA was $9 million in the fourth quarter, adjusted EBITDA totaled $4 $6 million.
Representing a substantial improvement compared to the prior quarter.
This also generated an incremental EBITDA margin of approximately 47% and.
For the customer activity levels, especially in our key Wheeler running services segment and continued realization of our cost reduction measures enabled our organization and can move adjusted EBITDA back into positive territory compared to the prior two quarters.
The company made clear our ambitious goal of achieving positive cash flows for the year and we are proud to close out 2020 meeting that goal.
We produced $39 $7 million of operating cash flow, which enabled $11 $2 million of free cash flow generation.
We were able to enhance free cash flow generation and the fourth quarter, particularly due to improved customer activity levels.
Working capital management, and a continued focus on limiting capital spend.
As of year, and the company had cash and cash equivalents of $210 million and no outstanding debt on its credit facility.
Turning to slide eight our Trs revenue totaled $65 million generating $3 8 million and adjusted EBITDA during the fourth quarter.
Our Trs segment benefited from the redeployment of previously sidelined rigs and improving backdrop and our U S land business on.
Our greatest area of regional improvement was in Africa, which bottomed and the third quarter and experienced a strong rebound and the fourth quarter of with multiple rigs returning to work.
Our north American offshore region benefited from strengthening and the Caribbean and increased activity levels and offshore Mexico.
And the tubular segment as presented on slide nine third quarter revenue totaled $15 9 million.
A decrease of 4% sequentially and 25% year over year the.
The slight sequential decrease and revenue was primarily due to strong tubular product sales and the prior quarter, which was partially offset by stronger tubular product and drill tool sales internationally during the fourth quarter.
Segment, adjusted EBITDA totaled $3 $9 million or <unk> 25 percentage of revenue and the fourth quarter, this compared to $1 $8 million or 11% of revenue and the prior quarter.
The enhanced profitability and our tubular segment, primarily reflects increased sales internationally and realization of fabrication and manufacturing efficiencies that had been initiated alongside our profitability improvement plan.
Concluding the segments on slide 10 cementing.
Cementing equipment segment revenue for the fourth quarter totaled $15 5 million.
Which was a slight increase sequentially and largely due to U S land business recovery the <unk>.
38% year over year decline was driven by reduced customer activity levels and the U S land and offshore markets.
International growth and this segment increased 35% year over year and has played a meaningful role and enhancing segment profitability.
Which was also improved on the back of many operational cost reductions stemming from our business reorganization conducted in 2020.
Segment, adjusted EBITDA totaled $4 million or 26 percentage of revenue and the fourth quarter compared to $3 4 million or 23 percentage of revenue and the prior quarter, resulting in an incremental EBITDA margin of approximately 120%.
Turning to slide 11, and we have spoken throughout the year about our focus on redefining our cost structure and field 2020 was a pivotal year for Franks in this regard.
We achieved an overall, 27% reduction in cost of $143 million year over year $88 million of dose reductions can be characterized as relating to our direct operational cost base.
Some of our cost reduction initiatives focused on this area. Our core efforts had been to permanently reduce our more fixed indirect support costs, including both cost of revenues and SG&A. The.
The entire company was engaged in this effort since November of 2019, and we achieved over $55 million of savings year over year and this cost category.
<unk> majority of which is permanent.
We have completed virtually all of our specific cost reduction initiatives and we will see the full year benefit of those reductions in 2021, along with additional efficiencies. We believe will be gain during the year from our ERP implementation, which is going live presently.
And looking forward and referenced on slide 12, we believe that activity levels trough during the third quarter and we do not see signs of further weakening barring any unexpected pandemic effects.
We expect the activity level of improvement seen in the fourth quarter to hold and the first quarter of 2021 and begin to build strongly much more on the second quarter, we have clear visibility that certain major projects will commence giving us some confidence that the planned improvements beginning in the second quarter will materialize and provide a backdrop for full year.
Our revenue growth and the high single digits.
Enabled by our <unk> effort, we believe that the company has the path to achieve double digit adjusted EBITDA margins in 2021 with this revenue growth benefited by the full year effect of our cost savings programs.
We also intend to maintain our strong balance sheet and have once again set aggressive working capital improve nichols to stretch ourselves and provide for positive free cash flow for the year.
We will also hold our discipline around capital deployment and expect that 2021, capex should be approximately $25 million.
With that I will turn the call back over to Mike for a few closing comments before we open up the lines for Q&A.
Thank you Melissa before we close out today's call I would like to reiterate a few key points first Franks has a solid operational platform that positions our organization well for 2021 and beyond.
Our tubular running services segment experienced substantial improvement in the fourth quarter and we expect additional growth in 2021.
In addition, further international expansion and our tubular and so many of equipment segments will be drivers of enhanced revenue and profitability as well.
<unk>.
The achievement of our cost reduction targets transform the operational cost structure of our organization the.
The vast majority of those cost reductions are complete and we will see the full benefits of all of these efforts and 2021.
Third despite a very challenging year created by COVID-19, pandemic, we executed our business strategy with one of the best Safety Records and the company's history.
Finally, despite the difficult year, our operational execution capital discipline and cost reduction efforts enabled us to further strengthen our balance sheet.
We have one of the strongest balance sheets and the entire oilfield service universe and that places us in an enviable position to be able to act when potential opportunities arise and.
In closing I would like to thank all of our employees for their hard work and dedication and 2020.
The difficulties, we face provided an opportunity for our employees to rise to the occasion, yet again and deliver not only excellent service quality for our customers, but also one of the best safety Records and the company's history.
With that operator, we're now ready to open the line for Q&A.
Thank you we will now begin the question answer session. If you have a question. Please press Star then one on your Touchtone phone.
Youre using a speakerphone you may need to be.
And the handset first before pressing on the numbers. Once again, if you have a question. Please press Star then one on your Touchtone phone waiting on standby for any question.
And our first question comes from Ian Macpherson from Simmons. Please go ahead. Your line is open.
Good morning team congrats on the on the really good results and outlook here.
Yes.
No.
The cost cuts aren't necessarily enjoyable, but.
This is obviously a great outcome.
With the path forward and so I wanted to dig and a little bit we saw the on the.
And the Incrementals that that play out for this year, the 47% sequential consolidated Incrementals for Q4 were impressive and.
I know the tubular and the tubular business and in particular is historically lumpy and.
And moves around a lot from quarter to quarter, but when we look at the other two of Trs and cementing and.
Specialty cementing has really moved up into the mid Twenty's EBITDA margins I assume that your outlook assumes that or better through 'twenty. One and then also maybe just a little more color on what youre thinking about the trajectory for Trs EBITDA margins.
As we move past Q1 and into the growth quarters beyond Q1.
Okay, why don't we take those in reverse order so I'll, let Steve comment on the Trs first.
Yes, I think operationally.
S business shows incremental margins of any way sort of 40% to 60%.
That's what falls through so you can sort of back calculate the math based on that the tubular business.
It's a little bit low it depending on the mix of that business. As you know that's two does the sales business and the service business embedded in there that have different incremental margins, but a little bit lower than on the Trs business.
Yes, I'll add to that on the some income side as well and so.
So we actually had a little bit of product business on the cementing side as well and some of the cementing growth. This year, particularly in Q1 will be coming from U S land, which is a little bit of a lower margin as well. So I think I think we will end up for the year, probably looking in that range that youre seeing and Q4.
And maybe a slight degradation, but somewhere in that range I think the difference is what do we see here in Q1 and for continuing to find that trajectory.
That's helpful. Thank you both and could you also remind me.
And if you want to again kind of generalize a little bit within Trs and and cementing what the.
The general mix is now between offshore.
And and land.
And the current run rate.
Yes in the.
Trs business.
And it runs typically 70% to 80% offshore obviously, 20% to 30% land.
I don't have the latest cementing numbers and that's obviously being driven by the recovery in the U S land that we have been seeing.
And I'm doing some quick math here it looks like it's probably at least.
<unk> 'twenty I think you said 22 out of that was busy.
Busy doing my math.
And 20%, 30% and land.
And the 70% to 80% offshore and yep.
One of which made earlier and that I would like the emphasizes on the tubular side with those two businesses being so different the drilling tools and the actual tubular business.
We are projecting we will continue to see volatility and that as we move into this year overall, we feel pretty good about it but there will be lumpiness. There. So I'm glad you pointed that out yes.
Yes.
Well, Mike now with the with improved visibility for this year your balance sheet.
We can still pretty good growth.
The comfortable free cash flow for this year, where where are we now with thinking more constantly about deploying capital either back into the business or or resuming the dividend program.
Yes, I think dividends are still a little ways off of course, it would be nice and the future to reinstitute, the small dividend, but all of you.
And actually thinking about that right now in terms of the Capex, we're going to try to keep our capex pretty much in line this year with last year.
It's really the challenge we have so many good new technologies and they do require capital.
This isn't just the steady state business, we're always trying to.
Invent.
And that was the purpose.
The things that we've come up with over the last year, the customers love, but it takes capital to build them. So it's that high wire act of trying to rollout of new technologies.
Generally having higher margins and not spend a lot of money at the same time, so it doesn't fit neatly and the same bag, but we're going to do our best.
To reinvest and the business wisely is all I can say.
Okay.
Thanks, Michael I'll pass it over.
Thank you. Our next question comes from Taylor researcher. Please go ahead. Your line is open.
Hey, good morning, and let me Echo Ian on on congrats for a great quarter and the first question is.
With respect to the 2021 guidance here on baked.
On the train and things of high single digit revenue growth year over year.
Wondering if you could help us think about the revenue growth you're expecting that's embedded in that forecast on a segment level and which ones might grow faster and that high single digit rate, which one.
Lower than that.
And then specific of Trs and I'm, just curious as we think about the ramp.
Q2, and beyond if you could point.
To any specific regions that are driving the bulk of that growth.
Yeah. So I think if we start with just the growth.
Okay.
You could expect that Trs is probably going to be the most stable. If you will we've got the international expansion again smaller.
Are we going on numbers of percentages, but I think you could expect the high single digits sort of across the board a little bit more coming in on the smaller segments as we are continuing and the international footprint expansion.
And probably right and the zone there on the Trs side I think.
And your other question around kind of remind me.
Just the regional drivers within Crs original driver yes.
Yes, no. It was it's largely after I'll, let I'll, let Steve, but it's largely Africa is probably our single strongest region for the year.
I think as everybody was the West Africa are all but shut down here. During Q2, Q3 2020 with Covid hitting we've seen a wakeup in Africa, and Q4, and we sort of continue to expect that as we go through Q1, and then particularly in Q3 Q2, sorry Africa waking back up again, we've also.
Got some projects starting up in Australia, and Brazil, where we have line of sight to some fairly substantial projects starting up in Q2 onwards.
Okay, great Thanks and.
Specific of Trs again, and it feels like a lot of the growth in Q4, and probably a lot of the activity in Q1 is attributed to some.
Covid induced slowdown activity, that's starting to come back and so I'm curious for the full year 2021 are you starting to see on.
Operators.
The progress forward, but with deepwater projects that maybe didn't exist prior to COVID-19 or the real true incremental activity.
Is it still kind of.
The resumption of activity slowed down due to COVID-19.
Yes, I think there's a little bit of both and the yeah. The.
Rebound, we've seen to date was really sort of COVID-19 projects coming back on stream again.
But we have seen and talking to clients now of about <unk>.
Projects restarting again I'll call out the east Mediterranean here, where it was totally dead last year, but now clients are looking and and starting to plan projects.
And that part of the World, where those would typically kick in and we're expecting somewhere around Q2 Q3.
Got it thanks for the answers and that's it for me.
Okay.
Thank you. Our next question comes from Jason Bandel from Evercore. Please go ahead. Your line is open.
Hi, good morning.
My first question I guess.
On the U S land side of the business I know you guys spend a lot of time and effort of pulling out costs and rightsize and the locations and 2020 and.
And obviously I've started to cover off the very low base.
Do you guys balance trying to be opportunistic with the ability to keep your cost structure low and in place.
Yes, when we went into the downturn and U S land and we really wanted to keep ourselves, where we had sort of and operational footprint, where we could service the basins, but then sort of pull the costs down and we did that with a number of mechanisms primarily focusing on sort of multi skilling people and having folks that.
Generally work and of base going out and doing jobs that gives us the sort of footprint and the base and each of those basins to rebound back up again and I mean, obviously as everybody has been watching the rig count we've seen it bounce back again that started in the Permian and the Eagle Ford, but we've now started seeing recovery and most of.
The other base and so we're sitting and we think quite well.
Pick up that activity in all basins as it picks back up again here.
Okay that makes sense.
And then on on the technology side I know, Mike you spent some time on the call highlighting some of the commercialized technologies that you guys deployed into the field.
Can you talk about your approach to monetizing your technology development and what customer adoption rates look like especially for some of the remote operating technology that you got to the point.
Yeah, I'll start it off and let Steve pick up.
And the customers.
We appreciate the.
Remote nature of a lot of our technologies.
Most of not all but most of what we're working on now.
Our focus is on safety and getting people out of the Red zone.
Even on land.
This remote cam viewer basically it takes it takes two positions down to one.
So that's a good example of the way, we can cut cost and try to remain competitive.
And provide the customer with some additional advantages, but it's very exciting. These these new technologies.
Of course, the industry is slow to adopt.
So we usually go out with several field trials.
And then there is more and more uptake so I wish we could flip a switch and have all customers adopt at the same rate, but that's not reality, but.
We're really seeing very very good uptake from our customers. So it's back to that balancing act of I think we're probably going to be.
More constrained on and a way.
On the capital we wanted to devote.
Paired through customer uptake, but that's as I said thats. The tightrope, we need to work and of course. It takes time to build these devices. There is lead time as well so once again we've.
We do sales and operational planning, we're in close contact with our customers. So I think we've done a pretty good job of calibrating kind of the rollout of the technology and the.
The spending the capital with the customer uptake so Steve I don't know if you want to add anything to that.
I think Mike's prepared comments that there was commentary on some sort of day Crewing type technologies that we're putting in there and I think COVID-19 has accelerated the demand for that but.
Think that will stick and in a post COVID-19 world of demand for having less people to be able to provide operations on a rig site. So.
Like Mike mentioned, we're pushing those out quite aggressively and we're fairly hopeful the on customer uptake on those.
And maybe a final comment to chime in here and say it is on our objective list. This year to several companies that are technologically sort of.
That specialize and monetization and they have a lot of vitality index.
We have a vitality index as well, although admittedly we are looking to sharpen that metric, which will help to guide us on customer like form of customer adoption rates and the future sets of part of our wave of the future to really get sharper on the ability to speak to those metrics.
Thanks that was helpful and let me I'll try and squeeze one more on here.
I guess coming out of the downturn and so far and the early stages of the recovery can you talk about the competitive landscape has changed or evolved at all and obviously you have of structurally smaller U S land market and he touched on the prepared remarks about customers' response has been very at the internationally.
Okay. How are you kind of seeing this customer and competitive landscape evolve here.
Yes, again, I think it's quite different and the different markets that we operate here you mentioned U S land, specifically I mean, the has been some competitor consolidation on the U S land.
And it still remains a highly competitive marketplace there.
I feel we have seen bottom and pricing in U S land and what sort of testing some price increases as we speak and U S land to see if they stick.
In the international marketplace.
And then the rostrum regional competitors in there and certain markets, but on a sort of of global basis.
Our main competitor is still out there and and.
And I Wouldnt say there has been any material change from what we've seen in the past on on how we compete with the.
Okay. Thanks for the time I appreciate the answers.
Thank you.
Thank you and I'm not showing any further questions at this time I would like to turn the call over to Mr. Michael Kearney for closing remarks.
Okay. Thank you operator.
I'd like to close by reinforcing our unwavering commitment to safety and remaining the high value low risk provider of services and products to our customers. We look forward to updating you on our progress and performance and our first quarter call, which will be and may. Thanks.
Everyone to be on the call and your interest and Franks Goodbye.
Thank you and thank you ladies and gentlemen. This concludes today's conference. Thank you for participating you may now disconnect.
And.
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Sure.