Q2 2022 Deep Down Inc Earnings Call

August 9, 2022

The.

Good morning ladies and gentlemen. Thank you for standing by. Welcome to Deep Down's first quarter 2022 conference call.

During the presentation, all participants will be in listen-only mode.

After the speaker's remarks, you will be invited to participate in a question and answer session.

As a reminder, this call is being recorded today, Tuesday, August 8, 2022.

A detailed disclaimer related to Deep Down's forward-looking statements is included in the press release issued Monday afternoon and filed with the SEC. It is also available on the company's website, coilenergy.com, or upon request.

A reconciliation of non-GAAP financial measures used in the press release and on today's call is included in the press release and on the website.

Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made.

Deep Down also undertakes no obligation to revise any of its forward-looking statements to reflect events or circumstances after the date made.

At this time, I'd like to turn the call over to CEO Charles Jaguna. Please go ahead.

Thanks, Gary.

Good morning and thank you for joining us today.

Our second quarter results reflect the ongoing challenges in the offshore oil and gas industry.

inflation, certain geopolitical events, and the possibility of a prolonged recession continue to weigh on our customers' willingness to commit to long-term, deep water projects.

This hesitation was best exemplified by a couple of oil and gas related carousel opportunities totaling more than $6.5 million, which were supposed to have kicked off during the past half of this year, but were both delayed for various reasons.

We had gone through several rounds of clarification to the customers and in both cases had commitment to the mandates by which the customers expected to initiate the project.

Unfortunately, this is a situation we have witnessed with other projects as well, but we remain cautiously optimistic that such situations will abate in coming months.

While these occurrences are outside our control, we remain focused on the levels within our control as we work to grow the business.

Speaking of growth, during the second quarter, we ripped some benefits from our efforts to expand beyond our traditional lines of business.

We successfully provided cable management services for our military projects in the northern half of the United States and received an order to provide ongoing hydrogen energy related services on what is currently slated to be a long-term ongoing basis.

These projects not only demonstrate the transferability of the expertise we have developed over the past 25 years, but they also validate our strategy to shift our focus from core products and services to core competencies.

In addition to these projects, we are evaluating various opportunities in other areas of the energy spectrum such as shallow water applications for offshore wind and even carbon capture, utilization and storage.

Aside from these nontraditional opportunities, we are seeing a marked increase in building activity within our traditional oil and gas business.

During the first half of the year, we primarily worked on service projects.

This was the result of most of our customers not having budgeted for new developments in 2022.

But as we look towards the future, we are engaged in active discussions about various solutions for new developments in 2023 and beyond, with our customers displaying high levels of expectation for budget approvals for these new developments.

Concurrent with these discussions, we are capitalizing on the reduced utilization of our internal resources to engage in various research and development activities.

with the intention of increasing our share of our customers' wallets.

These efforts have enabled us to identify opportunities for new products for both traditional oil and gas as well as renewable energy applications with even some early promise of potentially patentable offerings.

We will provide further updates in due course as these efforts come to fruition.

These growth efforts are in addition to the strategic initiatives we previously announced, namely the rebranding and the relocation of the company.

As far as the rebranding goes, we are still awaiting approval of our name and ticket symbol change from the Financial Industry Regulatory Authority, better known as FINRA, which is why our filings continue to bear the name deep down.

And speaking of the relocation, we now have full possession of the new facility, which we'll be moving into, and we're targeting to complete the move within this third quarter.

which will enrich our team's ability to support the needs of our increasingly diverse customer base.

And with that overview, I will now turn the call over to our Vice President of Finance, Trevor Ashes. Trevor.

Thank you, Charles.

for three months ending June 30th.

2020 to deep down generate revenues of $3.5 million. This represents a 23% decrease when compared to revenues of $4.5 million for the three months ended June 30, 2021.

This year over year, shortfall in revenues was...

driven by project mix that reflects current demand for shorter duration projects utilizing our support services and rental solutions.

Gross profit was 1.5 million or 42 percent of revenues for the second quarter of 2022. This represents an 11 percent increase in gross margin compared to the 1.4 million or 31 percent of revenues we generated in the second quarter of 2021.

improvement in gross margin was the result of Project NEX.

More service and rental work means we incur less material costs.

Additionally, several of the larger contracts we worked on last year included some low margin pass through third party costs that were not repeated this most recent quarter.

selling general administrative expenses were $1.4 million.

in Q2 2022 compared to $1.8 million in Q1 of last year. The 19% decrease in SG&A was mainly due to incurring a $534,000 charge to our reserve for doubtful accounts last year that was not repeated this year.

Turning to the bottom line, the company reported net income of $177,000 for Q2 of 2022, which translates to 1 cent per diluted share.

This is compared to generating net income of $724,000, or 6 cents per share, for Q2 of 2021. The comparative decline in net income was mainly because we recorded the forgiveness of our first PPP loan in Q2 of last year, which of course is not repeated in this most recent quarter. No much elsewhere.

Now shifting to the balance sheet, our capital structure is composed of $6.3 million of working capital, which includes $3.4 million in cash and $4.7 million in trade receivables as of June 30, 2022. This is compared to having $7.1 million of working capital as of December 31, 2021, which includes $3.7 million in cash and $6 million in trade receivables.

We also have an outstanding $650,000 receivable related to the employee retention credits claimed under the provisions of the CARES Act. We still do not have visibility on when these credits will be paid, but we expect to receive these funds at some point over the next few quarters.

This concludes the financial summary for Q2, so thank you for your time. I'll now turn the call back over to Charles.

Thank you, Trevor.

That concludes our prepared remarks today. So I'll now turn the call back to the operators to take investor questions.

Gary?

We will now begin the question and answer session.

To ask a question, you may press star then one on your telephone keypad.

If you are using a speakerphone, please pick up your handset before pressing the keys.

To withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster.

Our first question comes from Walter Schnaker with MAZ Partners. Please go ahead.

Hi, guys.

Good morning, Walter.

A few unrelated questions, maybe they're related.

is the

Does Ron expect to be selling, and I have no problem buying it under book and, you know, expect to be selling some shares on a regular basis and we intend to buy them?

I'm not saying it's wrong. I'm not complaining. I'm just trying to understand how this works.

At this point, I'm not aware of Ron's long-term intentions, but he is on the call, and you could follow up afterwards or I could put you in contact with him, and he can better answer that.

Okay, well I don't know if I want to know that. It's something I'm supposed to know. Only me and not others. Okay, at this point there is no...

When something happens, it either does or doesn't, and that's, you know, there is no program in place, as you know it, which is the public information.

Yes, we do not have a program in place, but what we've done historically has been opportunistic films as our cash.

situation unfolds and as

the situation comes up with him.

Okay.

Then I'll just smile and you can answer the question that's...

Got to be asked on every call.

Ohhhhh...

Yes, we do have – I think I mentioned that we have had some –

carousel opportunities and we actually do have some.

But we'll see how this unfolds in the coming –

months.

And as of today, one or neither of the units are being- are generating any revenue?

As of today, that is correct. None of them are generating any revenue.

Okay.

I don't appreciate where we are in the cycle in deep water.

where we are in the cycle in deep water production.

Although it seems as if current oil prices, while we're surely not in a boom, you hear about money being spent by large oil companies to continue to do deepwater drilling.

Could you give a little more color as you look at the legacy or the business, largely the business, which supports deepwater drilling, not in maintenance, but in new projects, if there is much out there that you are currently competing for or not, or early on in RFQs or something?

Yes, that's a good question. There is increased spending in drilling. There are lots of exploration and appraisal going on.

And, in comparison to that, we are involved in probably more discussions than we've been involved in in the past. Thank you.

at least two, probably three years.

for new developments for products based on early indicators that our customers, within our customers' companies. So they are seeing some good prospects. There are fields identified where they're already mapping out the equipment, and we are involved in a number of very active.

bids and conversations for products and services for those developments.

So we do see...

As we get into 23 and 24 and beyond, we do see an increase in products being required.

Okay, and just going back to the carousels, over the last 18 months, I could say the last five years, but over the last 18 months, there have been possible opportunities in the oil and gas business where one or other people might need a carousel beyond our rental, short-term rentals.

Those never came to pass or you lost them to somebody else.

where there were some bigger opportunities, maybe, if we were lucky.

What has happened is we've had lots of project delays. I mentioned earlier we had two that we even had commitment dates on when they expected the projects to begin. In both cases, where we can expand our current century mapping compared to past, you could start with two different innovations.

One was pushed into Q1 of 2023. The other one, they've taken a step back to re-evaluate if they'll need to.

for the products that they needed, whether or not they'll be going forward.

But we're seeing those delays also on other aspects of the business where…

lots of uncertainty about what does the future hold. And so you talk and talk with clients, then they suddenly pull back as they evaluate.

the macro environment.

Okay.

And

as you look at your ability to generate business

outside of your traditional market and possibly some recovery in the traditional energy markets. If I look over

The last 18 months, I made up 18 months.

You know some quarters you make a little money some quarters you lose a little money I'm not asking for a firm or an actual forecast, but as you look forward Over not quarter to quarter, but over the next 18 months you would you believe it is Possible for deep down to break even to make a little bit of money

Yes. Sounds like a forecast, but it's sore. Yes, we do. We have very promising prospects.

to do better than we've done in the past.

Okay.

So, financially, given the cash on the balance sheet, at least from the standpoint of financial stability, we are not under any sort of, as you look at the world going forward, financial pressure.

No, we...

We are remaining extremely disciplined with our cost structure as well. We are continuing to evaluate it.

And so we are watching closely how our situation is.

At this point, we have no...

doubts about our growing concernability.

Okay. Thank you very much. I'm still waiting for a call one day.

I've meant two to you, yes, and I'm looking forward to the next one.

Okay, thank you.

Thanks Walter.

Again, if you have a question, please press star then one. Please stand by as we pull for questions.

The next question is from Frank Wisniewski, a private investor. Please go ahead.

Hey, good morning, Charles. Good morning, Brian . One more question and one broader question.

I noticed in the last quarter you had pretty minimal relocation expenses. I think it was like $29,000. Do you expect more relocation expenses in the current quarter? And secondly, related to that, what does the change in facilities do for your lease payments? Are you spending more or spending less? What does it look like there?

Yes, we do expect that this quarter there will be a...

quite a bit of an increase in our relocation expenses. We're doing some remodeling and

is going to reduce by a little over 50,000 a month when we are fully settled into the new place. And so our annual expense based on our current footprint.

We're expecting to reduce it by over 600,000 a year.

Now, I will throw in a caveat to that.

some of the opportunities we are evaluating.

could require us to expand our footprint at the new facility, but that would be a good problem to have.

which is why we chose the facility we've chosen, because it lends itself well to expansion if we need to.

Obviously, it would be a high-class problem. My question is more broad. As you move to marketing your core competency,

How have you changed your marketing?

Deep water drilling or offshore oil and gas, you are plugged into that area and the potential customers will probably be plugged into you. As you move into other non-oil and gas offshore opportunities, how have you had to change your marketing or your strategy? How do you approach those new markets?

That's a good question. Yes, I will.

traditional business a lot of our customers were plugged into us and at certain times we were victims of our past success because a lot of people knew us

We will also...

fairly reactive meaning people would call us when they had a need or people would call us when there are projects.

But what we've done in the last couple of years is become more strategic in who we target. We've developed strong relationships within the epic contractors. That's the big integrated contractors, given that the market is moving to an integrated contract mindset. We are also capitalizing on a lot of

relationships of people who move from oil and gas to renewable energy. So if we think about the big oil companies, they are all creating venture arms or new energy arms. We have some solid relationships that have moved, so we are capitalizing on those.

But the rebrand, part of the rebrand was also to get our name away from being pigeonholed, the deepwater name, because there are some opportunities also in shallow water that we are pursuing as well as in other areas.

So we have.

we've changed our mindset to become more strategic rather than reactive.

We were successful at in the past, but we think it's a time for a new mindset.

One final question. The carousels, are they?

applicable to the

The new business you're going after or they pretty much confined to oil and gas

They're very, very applicable for offshore wind in particular.

And we do have some very...

promising opportunities in offshore wind.

but it is a new business. There are incumbents who some of the developers have relationships with, and so in some cases, we're trying to break in, but we're seeing we're gaining some traction.

Thank you.

Thank you. Thanks Frank.

The next question is from Ron Smith with Juma Properties. Please go ahead.

So, to answer Frank's question a little bit as well, I was in the ITF show in Atlantic City, and it's one of the largest renewable energy shows in the world. What I saw there is a lot of the oil and gas brands are now starting to display in the new shows for the renewable.

It almost looked like a little mini workboat show from New Orleans where a lot of companies like Oceanairing and Nexon's Cables and a lot of people used to see at OTC and Subsea Tieback are actually at these new shows. Our buoyancy, our past buoyancy company we used to own. I would recommend Coil Energy.

to have a presence at some of these large renewable energy shows because I'm seeing a shift from

the oil and gas competencies towards them. I'd like some of the

small workboat show, workboat people like the shark boats. They're now advertising to be personnel transfer boats to the platforms. So I think as...

the company is out and about, more and more of the renewable people will also see that, even in between shows.

And now the leases are looking at getting to the Gulf of Mexico, where they're going to have a lease sale now in the first quarter of next year for wind in the Gulf of Mexico. So a lot of the oil and gas people will have a chance to shift. And to Walter's question, I'm basically buying a little bit of the deep down stuff that they don't need during the move to kind of help them and help me. But this year, hopefully, there was a lot of faint Electric EST of the real life tool of the abstract UL constructed OoT system. Fantastic. Thank you very much for sharing your background and your experience at the destination ofmost dangerous natural gas conservation.

And while I've been waiting to get some of these renewable energy orders to give to my friends, I need a little bit of cash flow. So this is sort of covering a little of the cash flow gaps because I don't want to draw any retirement until Mary's...

72 in a couple years. So good work guys and thank you for letting me voice.

Thanks, Ron. And I'm glad you mentioned that, yes, to touch on that, yes, we did display at one of the offshore wind conferences as well and got some traction. So, Ron, that's a good point. We will continue to do that and make sure we are visible.

This concludes our question and answer session. I would like to turn the conference back over to Charles Draguna for any closing remarks.

Thank you, Gary, and once again, thanks to all of you who joined this morning. We appreciate your interest and your support of the company, and we look forward to speaking with you all about our progress on the next eining call.

Thank you all. This concludes today's call.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

are.

I everyhalf for.

That.

you

Good morning ladies and gentlemen. Thank you for standing by. Welcome to Deep Downs first quarter 2022 conference call.

During the presentation, all participants will be in listen-only mode.

After the speaker's remarks, you will be invited to participate in a question and answer session.

As a reminder, this call is being recorded today, Tuesday, August 8, 2022.

A reconciliation of non-GAAP financial measures used in the press release and on today's call is included in the press release and on the website.

Listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made.

Deep Down also undertakes no obligation to revise any of its forward-looking statements to reflect events or circumstances after the date made.

At this time, I'd like to turn the call over to CEO Charles Jaguna. Please go ahead.

Thanks, Gary.

Good morning and thank you for joining us today.

Our second quarter results reflect the ongoing challenges in the offshore oil and gas industry.

inflation, certain geopolitical events, and the possibility of a prolonged recession continue to weigh on our customers' willingness to commit to long-term, deepwater projects.

We had gone through several rounds of clarification to the customers and in both cases had commitment dates by which the customers expected to initiate the project.

Unfortunately, this is a situation we have witnessed with other projects as well, but we remain cautiously optimistic that such situations will abate in coming months.

While these occurrences are outside our control, we remain focused on the levels within our control as we work to grow the business.

Speaking of growth, during the second quarter, we ripped some benefits from our efforts to expand beyond our traditional lines of business.

In addition to these projects, we are evaluating various opportunities in other areas of the energy spectrum, such as shallow water applications for offshore wind and even carbon capture utilization and storage.

Aside from these nontraditional opportunities, we are seeing a marked increase in building activity within our traditional oil and gas business.

During the first half of the year, we primarily worked on service projects.

This was the result of most of our customers not having budgeted for new developments in 2022.

But as we look towards the future, we are engaged in active discussions about various solutions for new development in 2023 and beyond, with our customers displaying high levels of expectation for budget approvals for these new developments.

Concurrent with these discussions, we are capitalizing on the reduced utilization of our internal resources to engage in various research and development activities.

with the intention of increasing our share of our customers' wallets.

We will provide further updates in due course as these efforts come to fruition.

These growth efforts are in addition to the strategic initiatives we previously announced, namely the rebranding and the relocation of the company.

And speaking of the relocation, we now have full possession of the new facility, which we'll be moving into, and we're targeting to complete the move within this third quarter.

which will enrich our team's ability to support the needs of our increasingly diverse customer base.

And with that overview, I will now turn the call over to our Vice President of Finance, Trevor Ashes. Trevor? Thank you, Charles.

for three months ending June 30th.

2020 to deep down generated revenues of $3.5 million. This represents a 23% decrease when compared to revenues of $4.5 million for the three months ended June 30, 2021.

This year-over-year shortfall in revenues was...

driven by project mix that reflects current demand for shorter duration projects utilizing our support services and rental solutions.

Gross profit was 1.5 million or 42% of revenues for the second quarter of 2022. This represents an 11% increase in gross margin compared to the 1.4 million or 31% of revenues we generated in the second quarter of 2021.

The improvement in gross margin was the result of project mix. More service and rental work means we incurred less material costs. Additionally, several of the larger contracts we worked on last year included some low margin pass-through third-party costs that were not repeated this most recent quarter. Building general and administrative expenses were $1.4 million.

Turning to the bottom line, the company reported net income of $177,000 for Q2 of 2022, which translates to 1 cent per diluted share.

This is compared to generating net income of $724,000, or six cents per share for Q2 of 2021. The comparative decline in net income was mainly because we recorded the forgiveness of our first PPP loan in Q2 of last year, which of course is not repeated in this most recent quarter. Now, shifting to the balance sheet, our capital structure is composed of $6.3 million of working capital, which includes $3.4 million in cash and $4.7 million in trade receivables.

as of June 30, 2022. This is compared to having $7.1 million of working capital as of December 31, 2021, which includes $3.7 million in cash and $6 million in trade receivables. We also have an outstanding $650,000 receivable related to the employee retention credits claimed under the provisions of the CARES Act. We still do not have visibility on when these credits will be paid, but we expect to receive these funds at some point over the next few quarters.

This concludes the financial summary for Q2, so thank you for your time. Now I'll turn the call back over to Charles.

This concludes the financial summary for Q2, so thank you for your time. And I'll now turn the call back over to Charles. Thank you, Trevor.

That concludes our prepared remarks today. So I'll now turn the call back to the operators to take investor questions. Gary?

We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys.

To withdraw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster.

Our first question comes from Walter Shaker with MAZ Partners. Please go ahead. Joaquin G cease loyds V

Hi, guys.

Hi guys.

A few unrelated questions, maybe they're related.

Is the

Does Ron expect to be selling, and I have no problem buying it under book and, you know, expect to be selling some shares on a regular basis and we intend to buy them?

I'm not saying it's wrong, I'm not complaining, I'm just trying to understand how this works. At this point, I'm not aware of Ron's long-term intentions, but he is on the call, and you could follow up afterwards, or I could put you in contact with him, and he can better answer that. Okay, well I don't know if I wanna know that. It's something I'm supposed to know. Only me and not others. Okay, at this point there is no.

When something happens, it either does or doesn't, and that's, you know, there is no program in place, as you know it, which is the public information.

Yes, we do not have a program in place, but what we've done historically has been opportunistic films as our cash.

situation unfolds and as

and as the situation comes up with him.

Okay.

Then I'll just smile and you can answer the question that's...

Got to be asked on every call.

Yes, we do have, I think I mentioned that we have had some.

carousel opportunities and we actually do have some.

prospects outside oil and gas, but we'll see how this unfolds in the coming –

but we'll see how this unfolds in the coming months.

And as of today, one or neither of the units are generating any revenue?

As of today, that is correct. None of them are generating any revenue.

Okay.

And...

I don't appreciate where we are in the cycle in deep water.

where we are in the cycle in deep water production.

Although it seems as if current oil prices, while we're surely not in a boom, you hear about money being spent by large oil companies to continue to do deepwater drilling.

Hey.

Could you give a little more color as you look at the legacy or the business, larger the business, which supports deepwater drilling, not in maintenance but in new projects, if there is much out there that you are currently competing for or not, early on in RFQs or something? Gwendolyn. Hello.

Yes, that's a good question. There is increased spending in...

drilling, there are lots of appraisal, lots of exploration and appraisal going on.

And, in comparison to that, we are involved in probably more discussions than we've been involved in in the past. Thank you.

at least two, probably three years.

for products based on early indicators that our customers, within our customers' companies. So they are seeing some good prospects. There are fields identified where they're already mapping out the equipment, and we are involved in a number of very active bids and conversations.

products and services for those developments. So we do see

As we get into 23 and 24 and beyond, we do see an increase in products being required.

Those never came to pass or you lost them to somebody else.

where there were some bigger opportunities, maybe, if we were lucky.

What has happened is we've had lots of project delays. I mentioned earlier we had two that we even had commitment dates on when they expected the project to begin and in both cases.

One was pushed into Q1 of 2023. The other one, they've taken a step back to re-evaluate if they'll need to for the products that they needed, whether or not they'll be going forward.

But we're seeing those delays also on other aspects of the business where...

lots of uncertainty about what does the future hold. And so you talk and talk with clients, then they suddenly pull back as they evaluate.

the macro environment.

Okay.

And

as you look at your ability to generate business

outside of your traditional market and possibly some recovery in the traditional energy markets. If I look over

The last 18 months, I made up 18 months.

Yes. Sounds like a forecast, but it's soft. Yes, we do. We believe we have very promising prospects.

Yes. Sounds like a forecast, but it's soft. Yes, we do. We believe we have very promising prospects to do better than we've done in the past.

Okay. So financially, given the cash on the balance sheet, at least from the standpoint of financial stability, we are not under any sort of, as you look at the world going forward, financial pressure.

No, we...

We are remaining extremely disciplined with our cost structure as well. We are continuing to evaluate it.

And so we are watching closely how our situation is.

At this point we have no...

doubts about our growing concernability.

Okay. Thank you very much. I'm still waiting for a call one day.

I've made two to you, yes, and I'm looking forward to the next one.

Okay, thank you. Thanks Walter.

Again, if you have a question, please press star then 1. Please stand by as we poll for questions.

The next question is from Frank Wisniewski, a private investor. Please go ahead.

Hey, good morning, Charles. Good morning, Frank. One fair question and one broader question.

Yes, we do expect that this quarter there will be...

quite a bit of an increase in our relocation expenses. We're doing some remodeling and

As you are aware, the inflationary pressures, material costs have gone way up and labor costs have gone way up. So that's having an impact on us. But as far as the longer term, our annual monthly spend is going to reduce by a little over $50,000 a month when we are fully settled into the new place. So our annual expense based on our current footprint.

We're expecting to reduce it by over 600,000 a year.

it by over 600,000 a year. Now, I will throw in a caveat that...

some of the opportunities we are evaluating.

could require us to expand our footprint at the new facility, but that would be a good problem to have.

which is why we chose the facility we've chosen because it lends itself well to expansion if we need to.

Obviously, it would be a high-class problem. My question is more broad. As you move to marketing your core competencies, what are the benefits of marketing?

How have you changed your marketing? By this I mean by this.

That's a good question. Yes, our traditional business, a lot of our customers were plugged into us, and at certain times we were victims of our past success. Because a lot of people knew us.

We were also fairly reactive, meaning people would call us when they had a need or people would call us when there are projects.

we've changed our mindset to become more strategic rather than reactive.

We were successful in the past, but we think it's a time for a new mindset.

One final question. The carousels, are they usable or applicable to the...

to the new business you're going after or are they pretty much confined to oil and gas? Yeah, they're very, very applicable for offshore wind in particular.

going after or are they pretty much confined to oil and gas? Yeah, they're very, very applicable for offshore wind in particular. And we do have some very, very, very, very, very, very, very,

promising opportunities in offshore wind.

but it is a new business. There are incumbents who some of the developers have relationships with, and so in some cases, we're trying to break in, but we're seeing, we're gaining some traction.

there are incumbents who some of the developers have relationships with, and so in some cases, we're trying to break in, but we're getting some traction. Thank you.

Thanks, Frank. The next question is from Ron Smith with Juma Properties. Please go ahead. To answer Frank's question a little bit as well, I was in the ITF show in Atlantic City. It's one of the largest renewable energy shows in the world. What I saw there is a lot of the oil and gas friends.

are now starting to display in the new shows for the renewable. So it almost looked like a little mini workboat show from New Orleans, where a lot of companies like Oceaneering and Nexon's Cables, and a lot of people used to be at OPC and Sunsea Tieback, are actually at these new shows. Our buoyancy, our past buoyancy company we used to own, is now starting to display in the new shows for the renewable.

So I would recommend coil energy to have a presence in some of these large renewable energy shows because I'm seeing a shift from

the oil and gas competencies towards them. Like some of the.

small workboat show, workboat people like the shark boats. They're now advertising to be personnel transfer boats to the platforms. So I think as...

the company is out and about, more and more of the renewable people will also see that, even in between shows.

And now the leases are looking at getting to the Gulf of Mexico, where they're going to have a lease sale now in the first quarter of next year for wind in the Gulf of Mexico. So a lot of the oil and gas people will have a chance to shift. And to Walter's question, I'm basically buying a little bit of the deep down stuff that they don't need during the move to kind of help them and help me. But I think that the emoji market is where businesses and big businesses

72 in a couple years. So good work guys and thank you for letting me voice.

This concludes our question and answer session. I would like to turn the conference back over to Charles Draguna for any closing remarks.

Thank you all. This concludes today's call. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Q2 2022 Deep Down Inc Earnings Call

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