Q4 2023 Oceaneering International Inc Earnings Call
Inc Conference call note that all lines have been placed on mute to prevent any background noise. There will be a question and answer period. After the speakers' remarks with that I will turn the call over to Hilary Frisbee Senior director of Investor Relations. Please go ahead.
Thanks, Sylvie good morning, and welcome everyone to Oceaneering fourth quarter and full year 2023 earnings Conference call. Today's call is being webcast and a replay will be available on <unk> website.
With me on the call today are Rod Larson, President and Chief Executive Officer, who will be providing our prepared comments, Alan Curtis Senior Vice President and Chief Financial Officer, and Mark Peterson, Vice President corporate development and Investor Relations.
Before we begin I would like to remind participants that statements. We make during the course of this call regarding our future financial performance business strategy plans 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 $19 95.
Good morning afternoon. My name is Sylvie and I will be your conference operator, welcome everyone to Oceaneering fourth quarter 2022, 23 earnings Conference call note that all lines have been placed on mute to prevent any background noise. There will be a question and answer period after the spin.
Our comments today also include non-GAAP financial measures.
Additional details and reconciliations to the most directly comparable GAAP financial measures can be found in our fourth quarter press release, we welcome your questions. After the prepared statements I'll now turn the call over to Rob Good morning, and thanks for joining the call today today I'll focus my comments on our performance for the fourth quarter and full year of 2023.
<unk> remarks, with that I will turn the call over to Hilary Frisbee Senior director of Investor Relations. Please go ahead.
Hilary Frisbee: Thanks Sylvie.
Hilary Frisbee: Good morning, and welcome everyone to Oceaneering fourth quarter and full year 2023 earnings Conference call. Today's call is being webcast and a replay will be available on <unk> website.
Our market outlook for 2020 for Oceaneering has consolidated 2024 outlook, including our expectation to generate positive free cash flow in the range of $110 million to $150 million in EBITDA in the range of $330 million to $380 million and our segment outlook for the first quarter and full year 2000.
Hilary Frisbee: With me on the call today are Rod Larson, President and Chief Executive Officer, who will be providing our prepared comments, Alan Curtis Senior Vice President and Chief Financial Officer, and Mark Peterson, Vice President corporate development and Investor Relations before.
Hilary Frisbee: Before we begin I would like to remind participants that statements. We make during the course of this call regarding our future financial performance business strategy plans 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 1995.
24.
Now moving to our results.
For the fourth quarter of 2023, we reported net income of $44 5 million or <unk> 43 per share. These results include the impact of a $23 $7 million discrete tax benefit primarily due to changes in valuation allowances on certain tax position and prior year estimates $2 3 million.
Hilary Frisbee: Our comments today also include non-GAAP financial measures.
Hilary Frisbee: Additional details and reconciliations to the most directly comparable GAAP financial measures can be found in our fourth quarter press release, we welcome your questions. After the prepared statements I'll now turn the call over to Rob Good morning, and thanks for joining the call today today I'll focus my comments on our performance for the fourth quarter and full year of 2023.
Pre tax adjustments associated with foreign exchange gains recognized during the quarter and $9 million tax effect on adjustments associated with foreign exchange gains.
Adjusted net income was $19 $4 million or <unk> 19 per share.
Consolidated revenue of $655 million was 3% higher than in the third quarter with revenue increases in our subsea robotics or SSR manufactured products and Oceaneering projects group LPG segments more than offsetting a revenue decrease in our aerospace and defense technologies.
Our market outlook for 2020 for Oceaneering has consolidated 2024 outlook, including our expectation to generate positive free cash flow in the range of $110 million to $150 million in EBITDA in the range of $330 million to $380 million and our segment outlook for the first quarter and full year 2000.
<unk> segment and relatively flat revenue in our integrity management and digital solutions or Ips segment.
Hilary Frisbee: 24.
Fourth quarter 2023, consolidated operating income of $47 $5 million was 18% lower than in the third quarter due primarily to seasonal margin impacts in our <unk> segment.
Hilary Frisbee: Now moving to our results.
Hilary Frisbee: For the fourth quarter of 2023, we reported net income of $44 5 million or <unk> 43 per share. These results include the impact of a $23 7 million discrete tax benefit primarily due to changes in valuation allowances uncertain tax position and prior year estimates $2 3 million.
Our consolidated adjusted earnings before interest taxes, depreciation and amortization or adjusted EBITDA of $75 1 million was above the midpoint of our implied guidance range provided at the beginning of the fourth quarter and was slightly higher than consensus estimates.
Hilary Frisbee: Pre tax adjustments associated with foreign exchange gains recognized during the quarter and $9 million tax effect on adjustments associated with foreign exchange gains.
Though we experienced typical seasonality it was worth noting that ssrs fourth quarter revenue and EBITDA represented its best quarter in 2023, and Obg's fourth quarter revenue represented its best quarter in 2023, we see these as positive indicators for prospects in our businesses in 2024.
Hilary Frisbee: Adjusted net income was $19 $4 million or <unk> 19 per share.
Hilary Frisbee: Consolidated revenue of $655 million was 3% higher.
We generated $153 million of cash from operating activities in the fourth quarter invested $34 million in capital expenditures, resulting in free cash flow of $119 million for the quarter. It is also worth noting that we completed our previously announced debt transactions retiring our $400 million in 2024.
Nodes and successfully placing a $200 million add on to our 2028 debt as of December 31, 2023, our cash balance was $462 million.
Now, let's look at our business operations by segment for the fourth quarter of 2023 as compared to the third quarter of 2023.
Our operating income and revenue improved slightly in the fourth quarter of 2023 with lower activity levels in our RV and survey businesses being offset by continuing improvement in RV pricing as a result, SSR EBIT margin of 32% during the fourth quarter was above the 31% achieved during the third quarter of 2023.
<unk> results benefited slightly from accrual adjustments, resulting from personnel efficiencies recognized in the fourth quarter as was the case in 2022, but to a lesser effect in 2023 revenue split was 76% from our RV businesses and 24% from our combined tooling and survey businesses.
Fourth quarter 2023, <unk> days on hire a 15682 declined 2% as compared to the third quarter of 2023 inch.
Increased drill support days were more than offset by lower vessel based days due to normal seasonality fourth quarter average revenue per RV revenue per day on hire of $9618 was 3% higher than in the third quarter of 2023.
Our fleet use during the quarter was 63% in drill support and 37% and vessel based services compared to 61% and 39% respectively. During the third quarter fleet utilization declined to 68% in the fourth quarter from 69% in the third quarter of 2023.
We ended the quarter and the year just as we began with the fleet count of 250 <unk> systems. During the fourth quarter. We retired six systems and added six systems to our fleet at the end of December we had <unk> contracts on 89 of the 146 floating rigs under contract or 61% the same percentage as on September <unk>.
<unk> 2023, when we also had <unk> contracts on 89 of the 146 floating rigs under contract.
Turning to manufactured products, our fourth quarter revenue of $133 million was 8% higher than in the third quarter of 2023 on increased product throughput and oceaneering mobile robotics or Omar operating income of $5 4 million and operating income margin of 4% declined sequentially due to changes in project mix.
And continuing plant startup costs and the mobile robotics businesses.
Sure.
As recently announced manufactured products had solid bookings during the fourth quarter of approximately $200 million.
Which included large projects in the Black Sea and the Gulf of Mexico off the coast of Mexico year end 2023 backlog was $622 million.
Compared to the September 32023 backlog of $556 million.
The book to Bill ratio was 131 for the full year of 2023.
<unk> fourth quarter 2023 operating income declined on higher revenue revenue benefited from the carryover of international work from the third quarter and more seasonal activity in the Gulf of Mexico than originally expected fourth quarter 2023 operating income margin of 9% declined from 18% achieved in the third quarter of 2023 due to.
<unk> and project mix and pricing for Gulf of Mexico work.
<unk> fourth quarter 2023 revenue operating income and operating income margin were essentially flat period over period.
Our AD Tech fourth quarter revenue and operating income declined from the third quarter of 2023 AD Tech operating income margin declined sequentially to 12% due to changes in project mix driven by increased shipyard labor.
Fourth quarter 2023, unallocated expenses of $37 $9 million were lower than the third quarter.
Now I'll turn my focus to our year over year results.
Of 2023 compared to 2022.
For the year 2023, consolidated revenue increased 17% to $2 4 billion from.
And from $2 $1 billion in 2022 with each of our operating segments achieving increases consolidated operating income and adjusted EBITDA also improved with gains in SSR manufactured products OAG and AD tech more than offsetting a slight decline in Mds.
And the carryover of international work from the third quarter and more seasonal activity in the Gulf of Mexico than originally expected.
Fourth quarter 2023, operating income margin of 9% declined from 18% achieved in the third quarter of 2023 due to changes in project mix and pricing for Gulf of Mexico work.
Consolidated 2023 operating income of $181 million and adjusted EBITDA of $289 million improved by 75% and $56 $4 million, respectively with significant gains in our SSR manufactured products and LPG segments, and a slight gain in our <unk> segment being partially offset.
For <unk> fourth quarter 2023 revenue operating income and operating income margin were essentially flat period over period.
Our AD Tech fourth quarter revenue and operating income declined from the third quarter of 2023 AD Tech operating income margin declined sequentially to 12% due to changes in project mix driven by increased shipyard labor.
By a modest decline in our Mds segment.
Cash flow from operations increased to $210 million compared to $120 million in 2022, we invested $101 million in capital expenditures, an increase from $81 million in 2022 for the full year of 2023 free cash flow was $109 million compared to $339 8 million in 2020.
Fourth quarter 2023, unallocated expenses of $37 $9 million were lower than the third quarter.
Now I will turn my focus to our year over year results of 2023 compared to 2022.
For the year 2023, consolidated revenue increased 17% to $2 4 billion from.
Two at.
At the year end, we had healthy liquidity with $462 million in cash and cash equivalents and our undrawn $215 million credit revolver.
From $2 1 billion in 2022 with each of our operating segments achieving increases consolidated operating income and adjusted EBITDA also improved with gains in SSR manufactured products <unk> and AD tech more than offsetting a slight decline in Mds.
We're pleased with notable achievements accomplished during 2023 or.
SSR business continued to achieve outstanding drill support RV performance with 99% uptime achieved during the year.
Consolidated 2023 operating income of $181 million and adjusted EBITDA of $289 million improved by 75% and $56 $4 million, respectively with significant gains in our SSR manufactured products and LPG segments, and a slight gain in our <unk> segment being partially offset.
Freedom, our hybrid <unk> AAV or autonomous underwater vehicle performed its first commercial project in 2023 successfully proving its ability to collect significantly improved and more complete datasets that are attainable through traditional AAV inspection techniques.
By a modest decline in our Mds segment.
Adding to oceaneering remote operating capabilities, our survey business acquired in <unk> surface vessel or USB.
Cash flow from operations increased to $210 million compared to $120 million in 2022, we invested $101 million in capital expenditures, an increase from $81 million in 2022 for the full year of 2023 free cash flow was $109 million compared to $339 8 million in 2020.
To support deepwater geophysical and asset inspection operations, including positioning and offshore and near shore surveys.
Interest in Oceaneering maximum <unk> counterbalanced forklift accelerated during the year. During 2023, we received orders for $205 forklifts, a 266% increase over 2022 orders.
Two at.
At the year end, we had healthy liquidity with $462 million in cash and cash equivalents and our undrawn $215 million credit revolver.
Manufactured products order intake for 2023 increased to $649 million, a 22% increase over 2022.
We're pleased with notable achievements accomplished during 2023 or.
Our OCG segment solidified and strategic presence in Brazil by securing a five year contract from Petrobras for the operation of three existing drill pipe riser or DVR systems.
SSR business continued to achieve outstanding drill support RV performance with 99% uptime achieved during the year.
Freedom, our hybrid <unk> AAV or autonomous underwater vehicle performed its first commercial project in 2023 successfully proving its ability to collect significantly improved and more complete data sets that are attainable through traditional AAV inspection techniques.
And the production of one new system to support intervention and completion operations.
<unk>.
Our AD Tech segment saw revenue growth in each of its businesses and supportive multiple Artemis missions, our space systems business secured a contract to produce the solid rocket booster thermal curtains and produced multiple crew module operating systems or seamless.
Adding to oceaneering remote operating capabilities, our survey business acquired and Unscrewed surface vessel or USB.
To support deepwater geophysical and asset inspection operations, including positioning and offshore and nearshore surveys.
Our defense Subsea technologies business received significant orders for submarine rescue large and small rovs and manned deep submergence systems, Our Marine services Division saw a significant growth of Murray submarine maintenance services in both public and private shipyards plus strong demand signals for long term manufacturing for new submarine construction.
Interest in Oceaneering maximum <unk> counterbalanced forklift accelerated during the year. During 2023, we received orders for 200, 500, forklifts, a 266% increase over 2022 orders.
From a safety standpoint, the oceaneering team remains focused on life saving rules.
Manufactured products order intake for 2023 increased to $649 million a.
With a significant increase in the number of self irrigation audits and the implementation of many engineered improvements across the enterprise to mitigate risks.
A 22% increase over 2022.
Our OCG segment solidified and strategic presence in Brazil by securing a five year contract from Petrobras for the operation of three existing drill pipe riser or DVR systems.
While many of our annual financial metrics improved sequentially in 2023, I would like to highlight just a few of them.
Consolidated backlog grew by 20% from $1 9 billion.
And the production of one new system to support intervention and completion operations.
At December 31, 2022 to $2 3 billion on December 31, 2023, which is foundational for our 2024 expectations.
Yes.
Our AD Tech segment saw revenue growth in each of its businesses and supportive multiple Artemis missions, our space systems business secured a contract to produce the solid rocket booster thermal curtains and produced multiple crew module operating systems or Siemens.
On a consolidated basis, we achieved positive net income in each quarter of 2023.
We retired our 2024 senior notes during the year using the proceeds from our 2023 debt offering together with cash on hand, as a result, we reduced our long term debt from $700 million at the end of 2000 $22 million to $500 million at the end of 2023.
Our defense Subsea technologies business received significant orders for submarine rescue large and small rovs and manned deep submergence systems, Our Marine services Division saw significant growth of Murray submarine maintenance services in both public and private shipyards plus strong demand signals for long term manufacturing for new submarine construction.
We extended the maturity of our Undrawn credit facility to April 2027.
As of December 31, 2023, our cash on hand was $462 million and our nearest debt maturity is $500 million in February 2028.
From a safety standpoint, the oceaneering team remains focused on life saving rules with.
With a significant increase in the number of cell therapy Asian audits and the implementation of many engineered improvements across the enterprise to mitigate risks.
Net debt to adjusted EBITDA ratio of 0.1 times on December 31, 2023 improved from 0.6 times on December 31, 2022 or.
Hilary Frisbee: While many of our annual financial metrics improved sequentially in 2023, I would like to highlight just a few of them.
Hilary Frisbee: Consolidated backlog grew by 20% from $1 9 billion.
Our enterprise value grew to $2 2 billion at the end of 2000 22023 as compared to $1 9 billion at the end of 2022.
Hilary Frisbee: <unk> 31, 2022 to $2 3 billion on December 31, 2023, which is foundational for our 2024 expectations on.
Diluted earnings per share or EPS increased to <unk> 95 from 26 in 2022.
Hilary Frisbee: On a consolidated basis, we achieved positive net income in each quarter of 2023.
Sure.
Hilary Frisbee: We retired our 2024 senior notes during the year using the proceeds from our 2023 debt offering together with cash on hand, as a result, we reduced our long term debt from $700 million at the end of 2000 $22 million to $500 million at the end of 2023.
Sustainability remains a key area of focus with additional progress being made on our environmental social and governance initiatives.
From an environmental standpoint in 2023, we published our global 2022 scope, one and scope two emissions along with our four newly established activity base greenhouse gas emission reduction targets as part of our second climate change report informed by the task force on climate related financial disclosures or <unk>.
Rob: We extended the maturity of our Undrawn credit facility to April 2027.
Rob: As of December 31, 2023, our cash on hand was $462 million and our nearest debt maturity is $500 million in February 2028.
We also filed our annual sustainability report using a disclosure methodology.
Wind by the sustainability accounting standards board or SaaS.
Rob: Net debt to adjusted EBITDA ratio of 0.1 times on December 31, 2023 improved from 0.6 times on December 31, 2022 or.
These reports are posted on our website.
We continue to develop and evolve technologies, using our digital and core robotics expertise to create efficiency for our customers, while mitigating carbon emissions from a social perspective, we remain active in the communities, where we work from a governance perspective, we created the role of director of sustainability reporting directly to our chief compliance officer.
Rob: Our enterprise value grew to $2 2 billion at the end of 2000 22023 as compared to $1 9 billion at the end of 2022.
Hilary Frisbee: Diluted earnings per share or EPS increased to <unk> 95 from 26 in 2022.
<unk> continues to hold in ESG index, a rating with MSCI.
Now turning to our 2020 for outlook for the markets we serve.
Hilary Frisbee: Sustainability remains a key area of focus with additional progress being made on our environmental social and governance initiatives.
We expect the 2024 forecasted average Brent price of approximately $80 per barrel to sustain healthy levels of offshore operating and capital spending throughout the year.
Hilary Frisbee: From an environmental standpoint in 2023, we published our global 2022 scope, one and scope two emissions along with our four newly established activity based greenhouse gas emission reduction targets as part of our second climate change report informed by the task force on climate related financial disclosures or <unk>.
Analysts and research service projections for other key metrics, we track support expectations for consistently strong activity in 2024 Tree Awards forecast for 2024 are essentially flat with awards in 2023. There were 263 awards in 2020 to an estimated 285 tree awards in <unk>.
Hilary Frisbee: We also filed our annual sustainability report using a disclosure methodology.
Hilary Frisbee: Wind by the sustainability accounting standards board or SaaS. Both reports are posted on our website.
'twenty three and nearly 290 <unk> forecast for 2024.
Hilary Frisbee: We continue to develop and evolve technologies, using our digital and core robotics expertise to create efficiency for our customers, while mitigating carbon emissions from a social perspective, we remain active in the communities, where we work from a governance perspective, we created the role of director of sustainability reporting directly to our chief compliance officer.
Tree installations are forecast to continue at a steady pace year over year with approximately 339 installations forecast for 2024 working rig count was 125 at the end of 2023 versus 215 and 2022.
Sure.
We expect the government related markets, we serve to remain relatively stable with continued modest growth for the foreseeable future.
Hilary Frisbee: <unk> continues to hold in ESG index, a rating with MSCI.
Hilary Frisbee: Now turning to our 2020 for outlook for the markets we serve.
Research projections suggest a year over year growth of greater than 10% in the autonomous forklift market. This is consistent with projections for over 20% growth in the mobile robotics industry by 2020 by 2030.
Hilary Frisbee: We expect the 2024 forecasted average Brent price of approximately $80 per barrel to sustain healthy levels of offshore operating and capital spending throughout the year.
Hilary Frisbee: Analysts and research service projections for other key metrics, we track support expectations for consistently strong activity in 2024 Tree Awards forecast for 2024 are essentially flat with awards in 2023. There were 263 awards in 2020 to an estimated 285 tree awards in 2000.
And finally, we continue to seek opportunities to participate in offshore renewables markets and to continue to support our customers introducing their greenhouse gas emissions.
Now to our 2024 consolidated outlook for Oceaneering.
Based on our year end 2023 backlog expected increase in backlog conversion anticipated 2020 for order intake and current market fundamentals. We are projecting our 2024 consolidated revenue to grow by more than 5% with increased revenue in each of our operating segments except for LPG.
Hilary Frisbee: 'twenty three and nearly 290 <unk> forecast for 2024 tree installations are forecast to continue at a steady pace year over year with approximately 339 installations forecast for 2024 working rig count was 125 at the end of 2023 versus 215 and 2000.
The expectation for revenue growth, coupled with improved pricing and continued operational efficiency programs underpin our expectations for sequential improvement in our 2024 financial results, we expect higher operating income in each of our segments higher margins in our estimate SSR and <unk> segments and relatively stable margins in our manned.
Hilary Frisbee: 'twenty two.
Hilary Frisbee: We expect the government related markets, we serve to remain relatively stable with continued modest growth for the foreseeable future.
Hilary Frisbee: Research projections suggest a year over year growth of greater than 10% in the autonomous forklift market. This is consistent with projections for over 20% growth in the mobile robotics industry by 2020 by 2030.
Factored products MBS and AD tech segments.
For the year, we anticipate generating $330 million to $380 million of EBITDA with the sequential improvement being led by our SSR and <unk> segments at the midpoint of this range. Our 2020 for EBITDA would represent a 23% increase over 2023 adjusted EBITDA, we anticipate generating.
Hilary Frisbee: And finally, we continue to seek opportunities to participate in offshore renewables markets and to continue to support our customers introducing their greenhouse gas emissions.
Hilary Frisbee: Now to our 2024 consolidated outlook for Oceaneering.
Is it a free cash flow of $110 million to $150 million.
Hilary Frisbee: Based on our year end 2023 backlog expected increase in backlog conversion anticipated 2020 for order intake and current market fundamentals. We are projecting our 2024 consolidated revenue to grow by more than 5% with increased revenue in each of our operating segments except for LPG.
As has been the case over the past several years, we anticipate a substantial cash draw during the first quarter, which we expect to reverse over the course of the year.
Based on current market conditions, we expect opportunities for continuing pricing improvements and margins in our energy focused businesses and stable pricing and margins in our government focused businesses for.
Hilary Frisbee: The expectation for revenue growth, coupled with improved pricing and continued operational efficiency programs underpin our expectations for sequential improvement in our 2024 financial results, we expect higher operating income in each of our segments higher margins on our estimate SSR and OBG segments and relatively stable margins in.
For 2020, we forecast our organic capital expenditures to total between 110 and $130 million.
This includes approximately $50 million to $60 million of maintenance capital expenditures and $60 million to $70 million of growth capital expenditures.
Hilary Frisbee: Our manufactured products MBS and AD tech segments.
We forecast our 2020 for interest expense net of interest income to be in the range of $24 million to $28 million.
Hilary Frisbee: For the year, we anticipate generating $330 million to $380 million of EBITDA with the sequential improvement being led by our SSR and <unk> segments at the midpoint of this range. Our 2020 for EBITDA would represent a 23% increase over 2023 adjusted EBITDA.
We expect our 2020 for cash tax payments to be in the range of $80 million to $90 million. This includes taxes incurred in countries that impose tax on the basis of in country revenue and bear no relationship to the profitability of such operations.
Hilary Frisbee: We anticipate generating positive free cash flow of $110 million to $150 million.
Directionally in 2024 for our operations by segment for SSR. The expectation for improved results is based on increased days on hire the commencement of new contracts and continued pricing improvement.
Hilary Frisbee: As has been the case over the past several years, we anticipate a substantial cash draw during the first quarter, which we expect to reverse over the course of the year.
Results for tooling based services are expected to improve with activity levels generally following Ro <unk> days on hire.
Hilary Frisbee: Based on current market conditions, we expect opportunities for continuing pricing improvements and margins in our energy focused businesses and stable pricing and margins in our government focused businesses.
Survey results are also projected to improve with increased domestic and international activity and geophysical and survey and positioning services.
Hilary Frisbee: For 2020, we forecast our organic capital expenditures to total between 110 and $131 million.
Revenue growth is expected to be in the mid to upper teens range and EBITDA margins are expected to average in the low to mid 30% range for the full year.
Hilary Frisbee: This includes approximately $50 million to $60 million of maintenance capital expenditures and $60 million to $70 million of growth capital expenditures.
For Rovs, we expect the 2023 service mix of 63% drill support and 37% vessel services to remain generally the same in 2024, our overall ROE V fleet utilization is expected to increase to the high 60% to low 70% range for the year with higher seasonal activity.
Hilary Frisbee: We forecast our 2020 for interest expense net of interest income to be in the range of $24 million to $28 million.
Hilary Frisbee: We expect our 2020 for cash tax payments to be in the range of $80 million to $90 million. This includes taxes incurred in countries that impose tax on the basis of in country revenue and bear no relationship to the profitability of such operations.
During the second and third quarters.
We expect to generally sustain our RV market share in the 55% to 60% range for drill support services.
Hilary Frisbee: Directionally in 2024 for our operations by segment for SSR. The expectation for improved results is based on increased days on hire the commencement of new contracts and continued pricing improvement.
Yes.
We continue to see opportunities to improve RV revenue per day on hire in 2023, we saw an increase of 7% year over year from $8967 in the fourth quarter of 2022 to $9618 in the fourth quarter of 2023.
Hilary Frisbee: The results for tooling based services are expected to improve with activity levels generally following Ro <unk> days on hire.
Hilary Frisbee: Survey results are also projected to improve with increased domestic and international activity and geophysical and survey and positioning services.
For manufactured products, we expect operating results and margins to improve slightly on an increase in revenue primarily based on 2022, and 2023 order intake yielding improved margins and the energy businesses. Additionally, we are seeing increasing activity in our mobile robotics business as highlighted by our 2023 order intake for our Max mover.
Hilary Frisbee: <unk> growth is expected to be in the mid to upper teens range and EBITDA margins are expected to average in the low to mid 30% range for the full year.
Hilary Frisbee: For Rovs, we expect the 2023 service mix of 63% drill support and 37% vessel services to remain generally the same in 2024, our overall ROE V fleet utilization is expected to increase to the high 60% to low 70% range for the year with higher seasonal activity.
<unk> forklift mobile robotics businesses negatively impact margins in this segment as we implement tailored strategies for our entertainment systems and Omar businesses, respectively.
<unk> operating results are forecasted to improve on a modest decrease in revenue. These projections are based on expectations for improved vessel utilization in the Gulf of Mexico and increased activity levels in Brazil. Overall for 2024 OBG operating income margins are expected to average in the mid teens range for the year. These.
Hilary Frisbee: During the second and third quarters.
Hilary Frisbee: We expect to generally sustain our RV market share in the 55% to 60% range for drill support services.
Hilary Frisbee: Yes.
Hilary Frisbee: We continue to see opportunities to improve RV revenue per day on hire in 2023, we saw an increase of 7% year over year from $8967 in the fourth quarter of 2022 to $9618 in the fourth quarter of 2023.
Expectations are underpinned by several recent contractual commitments from multiple customers, yielding improved vessel utilization in the Gulf of Mexico, and fewer Unabsorbed vessel days.
<unk>, we anticipate a shift in international projects, resulting in higher margins and lower revenue.
Hilary Frisbee: For manufactured products, we expect operating results and margins to improve slightly on an increase in revenue primarily based on 2022, and 2023 order intake yielding improved margins and the energy businesses. Additionally, we are seeing increasing activity in our mobile robotics business as highlighted by our 2023 order intake for our Max mover.
<unk> operating results are forecasted to improve on slightly higher revenue with growth opportunities in digital and engineering services.
Operating income margin is expected to remain in the mid single digit range for the year.
At <unk> operating results are expected to be slightly higher on higher revenue, we anticipate growth in all three of our government focused businesses operating income margins are expected to average in the low teens for the year.
Hilary Frisbee: <unk> forklift mobile robotics businesses negatively impact margins in this segment as we implement tailored strategies for our entertainment systems and Omar businesses, respectively.
For 2024, and we anticipate an allocated expenses to average approximately $40 million per quarter.
Hilary Frisbee: <unk> operating results are forecasted to improve on a modest decrease in revenue. These projections are based on expectations for improved vessel utilization in the Gulf of Mexico and increased activity levels in Brazil. Overall for 2024 OTG operating income margins are expected to average in the mid teens range for the year. These.
For our first quarter 2020 for outlook, our EBITDA is forecasted to be in the range of $50 million to $60 million sequentially expectations are for lower revenue and operating results in the SSR in Mds segments due to seasonality or <unk> segment, we will have reduced vessel availability due to planned regulatory dry docks on two vessels.
Hilary Frisbee: Expectations are underpinned by several recent contractual commitments from multiple customers, yielding improved vessel utilization in the Gulf of Mexico, and fewer Unabsorbed vessel days. Additionally, we anticipate a shift in international projects, resulting in higher margins and lower revenue.
And exploration of vessel charters occurring prior to new charters commencing.
With the typical seasonality, we project LPG revenue and operating results will be significantly lower.
Manufactured products operating results are expected to improve on relatively flat revenue due to improved cost absorption and changes in product mix AD Tech revenue and operating income are forecasted to remain relatively flat.
Hilary Frisbee: <unk> operating results are forecasted to improve on slightly higher revenue with growth opportunities in digital and engineering services.
Hilary Frisbee: Operating income margin is expected to remain in the mid single digit range for the year.
As many of you have probably already observed we planned for the first quarter Drydock and changes in fleet composition and preparation for pronounced seasonal increases in the second and third quarters, which we expect will drive sequential improvements in both OTG and SSR.
Hilary Frisbee: AD Tech operating results are expected to be slightly higher on higher revenue, we anticipate growth in all three of our government focused businesses operating income margins are expected to average in the low teens for the year.
Hilary Frisbee: For 2024, we anticipate on an allocated expenses to average approximately $40 million per quarter.
Include in closing.
Achieving success is a team sport and none of these accomplishments would have been possible without our dedicated employees and managing teams I want to personally. Thank our ocean years for driving the successes we are seeing at Oceania I also want to thank our shareholders, who are showing increasing confidence in our ability to grow and continually transform our company I remain excited about <unk>.
Hilary Frisbee: Our first quarter 2020 for outlook, our EBITDA is forecasted to be in the range of $50 million to $60 million sequentially expectations are for lower revenue and operating results in the SSR and MBS segments due to seasonality or <unk> segment, we will have reduced vessel availability due to planned regulatory dry docks on two vessels.
<unk> market signs for our businesses, including the opportunity for improving margins in our traditional businesses and growing prospects, we see to leverage our robotics experience into industrial markets. We appreciate everyone's continued interest in oceaneering and will now be happy to take any questions you may have.
Hilary Frisbee: And exploration of vessel charters occurring prior to new charters commencing.
Combined with the typical seasonality, we project LPG revenue and operating results will be significantly lower.
Hilary Frisbee: Manufactured products operating results are expected to improve on relatively flat revenue due to improved cost absorption and changes in product mix AD Tech revenue and operating income are forecasted to remain relatively flat.
Thank you, Sir ladies and gentlemen, if you would like to ask a question at this time. Please press star followed by one of your Touchtone phone you will then hear any sweet home prompt acknowledging your request.
Hilary Frisbee: As many of you have probably already observed we planned for the first quarter Drydock and changes in fleet composition and preparation for pronounced seasonal increases in the second and third quarters, which we expect will drive sequential improvements in both OTG and SSR.
If you would like to withdraw from the question queue. Please press star followed by <unk>.
Im just using a speaker phone we ask that you. Please lift the handset before pressing any.
And our first question will be from Eddie Kim of Barclays.
Speaker Change: Include in closing.
Good morning, Andy.
Hi, good morning.
Speaker Change: Achieving success is a team sport and none of these accomplishments would have been possible without our dedicated employees and managing teams I want to personally. Thank our ocean years for driving the successes. We are seeing at Oceaneering I also want to thank our shareholders, who are showing increasing confidence in our ability to grow and continually transform our company I remain excited about <unk>.
My first question is just on auto right.
Things trended nicely from a quarter of the year.
On the web.
Darren corridor.
Looking ahead to this year.
Although these prices are all continuing to trend higher.
You mentioned in prepared remarks, but could.
Speaker Change: <unk> market signs for our businesses, including the opportunity for improving margins in our traditional businesses and growing prospects, we see to leverage our robotics experience into industrial markets. We appreciate everyone's continued interest in oceaneering and will now be happy to take any questions you may have.
Could you be exiting the year maybe.
1000 <unk>.
Or is that.
Be a stretch based on what Youre seeing.
So so if you look at our we actually we actually closed the year our exit rate was very close to $10000. Just just barely under 10000 a day.
Thank you Sir.
Speaker Change: Ladies and gentlemen, if you would like to ask a question at this time. Please press star followed by one of your Touchtone phone.
For 2023 so.
Depending on mix, obviously, where the work occurs if we get the balance of work that we expect.
Speaker Change: Then here in Quito and prompt acknowledging your request and if you would like to withdraw from the question queue. Please press star followed by <unk>.
To see in some of the higher margin regions.
Don't think 11000 is a crazy number to shoot for.
Speaker Change: Im just using a speaker phone we ask that you. Please lift the handset before pressing any.
Okay, Okay got it.
Speaker Change: And our first question will be from Eddie Kim of Barclays.
And then my follow up is just.
Eddie Kim: Good morning, Andy.
One more.
The order guidance Rob.
Eddie Kim: Hi, good morning.
Eddie Kim: My first question is just on price.
Some licensed vehicles.
We had third quarter fourth quarter total NPL orders was $615 million last year, how do you see orders trending this year end.
Eddie Kim: Pricing.
Eddie Kim: Did that nicely from a quarter of the year.
Eddie Kim: On the web.
Eddie Kim: Dan on the fourth quarter.
Eddie Kim: Looking ahead to this year.
I was a little surprised to see that EBIT margin do you expect to renew.
Eddie Kim: Although these prices are all continuing to trend higher I think we mentioned that in prepared remarks.
They're kind of in the mid single digits for MTS I would have to think that pricing for the recent orders is is higher than what you booked in the past, but maybe that just takes some time.
Eddie Kim: Could you be exiting the year, maybe plus 11.
1000 <unk>.
Eddie Kim: Or is that.
Eddie Kim: Maybe a stretch based on what you are seeing.
Eddie Kim: So if you look at our we actually we actually closed the year our exit rate was very close to $10000. Just just barely under 10000 a day.
Lou.
Good morning.
A kind of an increase in EBIT margin.
In 2026.
For 2023 so.
Maybe that's too far out with any color there would be great.
Eddie Kim: Depending on mix, obviously, where the work occurs if we get the balance of work that we expect.
No a great question. This is Alan I think you're reading it right. These are very long lead type items that we see so in our call notes here, we talked about order intake in 2022 and 2023.
Eddie Kim: To see in some of the higher margin regions.
Eddie Kim: Don't think 11000 is a crazy number to shoot for.
Speaker Change: Okay, Okay got it.
Speaker Change: And then my follow up is just.
Speaker Change: One more.
The work will be executing here in 2024. So in 2022, we were able to improve pricing and yet again in 2023, but given the nature of these projects. So a lot of the revenue streams really began here in 'twenty four going into 25 and 26. So I think we have line of sight to start seeing.
Speaker Change: The order guidance.
Speaker Change: You've got some LIFO vehicles.
Speaker Change: We had third quarter fourth quarter total NPL orders was $615 million last year, how do you see orders trending this year end.
Speaker Change: I was a little surprised to see that EBIT margin do you expect it to run.
More of the margin progression in 2005, and 2006 that you're referring to as well as its not just those projects, but rod alluded to right now were implementing some strategies both in our LMR business and Oems.
Speaker Change: They're kind of in the mid single digits for MTS I would have to think that pricing for the recent orders is is higher than what you booked in the past, but maybe that just takes some time.
Lou.
Where those margins are detrimental today to what we earn in energy and we do have expectations that we'll see those improve in the next two years as well as we implement those strategies.
Speaker Change: Sure.
Speaker Change: A kind of an increase in EBIT margin.
Lou: In 2026.
Lou: Maybe that's too far out with.
Speaker Change: Any color there would be great.
Just add any there was some there was some goodness in 2023 around some special things in the umbilical is like storage and other components. So so that that's a little bit hard to repeat but if we look at the underlying pricing for for the umbilical and the orders won.
Speaker Change: No a great question. This is Alan I think you're reading it right. These are very long lead type items that we see so our call notes here, we talked about order intake in 2022 and 2023.
Work will be executing here in 2024. So in 2022, we were able to improve pricing and yet again in 2023, but given the nature of these projects. So a lot of the revenue streams really began here in 'twenty four going into 25 and 26. So I think we have line of sight to start seeing.
With those kind of extraordinary events, we do see the pricing to continue to move upward.
Yes.
Okay got it that makes sense.
And then just.
You're kind of forecast or estimate for total manufactured products orders this year.
Expect it to be flat or modestly higher.
Speaker Change: More of the margin progression in 2005, and 2006 that you're referring to as well as its not just those projects, but rod alluded to right now were implementing some strategies both in our LMR business and Oems.
Yes.
Hello.
Okay.
We're having a little bit of a breakup there could you repeat that question.
Sorry about that yes.
Forecast for manufactured products orders this year.
Where those margins are detrimental today to what we earn in energy and we do have expectations that we'll see those improve in the next two years as well as we implement those strategies.
Do you see it trending kind of flat or even modestly higher versus last.
Last year.
Well.
It really depends I would say, we had a really big order that Gulf of Mexico, Mexico Order that came in at the end of last year is going to be a hard one probably to repeat that but there are a couple of I would guess elephants out there. So it really would depend on the timing of when those those contracts hit but but.
Speaker Change: Just add any there was some there was some goodness in 2023 around some special things in the umbilical is like storage and other components. So so that that's a little bit hard to repeat but if we look at the underlying pricing for for the umbilical and the orders won.
Speaker Change: With those kind of extraordinary events, we do see the pricing to continue to move upward.
We tried to normalize over multiple quarters, we see we see a pretty steady or order book you know a lot of projects being done so just kind of depending on timing I think over over term. We don't see we don't see it for example, leveling off for reversing in the amount of activity that's coming coming in the pipeline.
Speaker Change: Okay got it that makes sense.
Speaker Change: And then just.
Speaker Change: Or kind of forecast or estimate for total manufactured products orders. This year I mean, do we expect it to be flat or modestly higher.
Yes.
Speaker Change: Yes.
Okay.
Speaker Change: Okay.
Alright, Thank you I'll turn it back.
Speaker Change: We're having a little bit of a breakup there could you repeat that question.
Thank you.
As a reminder, if you do have a question. Please press star one.
Speaker Change: Sorry about that yes.
The next question will be from Cook, all that with benchmark. Please go ahead Sir.
Speaker Change: Forecast for manufactured products orders this year.
Great Good morning.
Speaker Change: Do you see it trending kind of flatter even modestly higher versus last year.
How is everybody.
Doing well thanks.
Hey, I was just wondering I wanted to get a reference.
Speaker Change: Well.
Speaker Change: It really depends I would say, we had a really big order that Gulf of Mexico, Mexico Order that came in at the end of last year is going to be a hard one probably to repeat but there are a couple of I would guess elephants out there. So it really would depend on the timing of when those those contracts hit but but.
Dynamic at play for the.
Economists forklift business and the industrial robotics.
Right. So just trying to kind of square a couple of things out there.
The reference you made to 10% growth for our economists forklifts was that specific to 2024.
Speaker Change: If we try to normalize over multiple quarters, we see we'd see it pretty steady or order book in a lot of projects being done. So just kind of depending on timing I think over over term. We don't see we don't see it for example, leveling off for reversing in the amount of activity that's coming coming in the pipeline.
Yes.
Yes. It is Curt let me let me differentiate.
The overall mobile robotics is probably not quite as hot as the forklift side. So when we say that 20% to 2030, that's that's probably not quite as warm as if we could totally breakout the forklift market. So we are talking 10% growth in 2024, but but also taking that all the way.
Speaker Change: Okay great.
Speaker Change: Great. Thank you I'll turn it back.
Thank you.
Speaker Change: As a reminder, if you do have a question. Please press star one.
Through 2030, I think the forklift growth is going to outstrip that 20% that we're going to see in the in the balance of mobile robotics.
Speaker Change: The next question will be from Cook, all that with benchmark. Please go ahead Sir.
Got it Okay, and then then Europe Youre reference you took in orders for whatever 500 forklifts.
Cook: Great Good morning.
Cook: How is everybody.
Cook: Doing well thanks.
Cook: Hey, I just wanted to I wanted to get a reference.
In.
2023.
Again, I'm, just assuming so youre going to take you in 10% more than that in 2024 is that how we should think about it.
Cook: Dynamic at play for the year.
Cook: Economists forklift business and the industrial robotics.
Yes.
Speaker Change: Right. So just trying to kind of square a couple of things out there.
Yes, I mean, outwith timing I do think that.
Speaker Change: The reference you made to 10% growth for our economists forklifts was that specific to 2024.
Those are those can be kind of large orders to but you saw the big increase in.
In year to year from 22 to 23, I think we're going to see 'twenty three type levels is it feels like a pretty good go forward in the near term.
Speaker Change: Yes.
Speaker Change: Yes. It is Curt let me let me differentiate.
Speaker Change: The overall mobile robotics is probably not quite as hot as the forklift side. So when we say that 20% to 2030, that's that's probably not quite as warm as if we could totally breakout the forklift market. So we are talking 10% growth in 2024, but but also taking that all the way.
And a little higher.
Okay I got you.
And just sticking on the manufactured products in aggregate and I know Eddie hit up on some of these questions.
But I guess, what I'm, having a hard time squaring up with is you referenced that looks like revenue in the first quarter.
Speaker Change: Through 2030, I think the forklift growth is going to outstrip that 20% that we're going to see in the in the balance of mobile robotics.
We'll be.
So your revenues would be flat revenue on manufactured products right and then you said you see slight revenue growth in 2024.
Got it Okay, and then then Europe Youre reference you you took in orders for whatever 500 forklifts.
Speaker Change: In.
So I'd almost refers that to see slight revenue growth. Your revenue is going to have to actually.
Speaker Change: 2023.
Speaker Change: Again, I'm, just assuming so youre going to take you in 10% more than that in 2024 is that how we should think about it.
Flat to down for the ensuing quarters through 2020 for them. So we'll have a hard time kind of square that up.
Speaker Change: Yes.
Speaker Change: Yes, I mean, outwith timing I do think that.
Yes.
Speaker Change: Those are those can be kind of large orders to but you saw the big increase in.
Yes.
Let me try and take this one curve down.
Speaker Change: In year to year from 22 to 23, I think we're going to see 'twenty three type levels is it feels like a pretty good go forward in the near term.
Looking at the.
Rest of the year some of it is going to be the mix of what we have from a revenue perspective. So.
Speaker Change: And a little higher.
The first quarter, we do see being up.
Speaker Change: Okay I got you.
On a mix issue I think Rob talked a little about some of the storage that we have.
Speaker Change: And just sticking on the manufactured products in aggregate and I know Eddie hit up on some of these questions.
As beneficial here in the first part of the year as we saw last year. When we look at the whole of the year, though I think it's going to be turning more to a traditional manufactured products.
Speaker Change: But I guess, what I'm, having a hard time squaring up with is you referenced that looks like revenue in the first quarter.
Speaker Change: We'll be.
Product sell and the margins that we have there in the back half of the year.
Speaker Change: So your revenues would be flat revenue on manufactured products right and then you said you see slight revenue growth in 2024.
And then in the first quarter.
Compared to the fourth quarter of last year.
Speaker Change: So I'd almost refers that slight revenue growth your revenue is going to have to actually.
Talk a little bit about how we get.
Tubes coming in at zero margins that bring the margin down in certain quarters and then we performed the work the next quarter and margins go up I think thats, what youre seeing some effect on here in the first quarter is we had revenues in the fourth quarter associated with steel tubes, and now we're starting to produce those and build tools and we're seeing more of the profit.
Speaker Change: Flat to down for the ensuing quarters through 2024, I'm, having a hard time kind of square that up.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: Let me try and take this one curve down.
Speaker Change: Looking at the.
Margin coming through.
Okay, Great and then just one.
Rest of the year some of it is going to be the mix of what we have from a revenue perspective. So.
Follow up with.
You guys are an enviable free cash flow generating position I think what 16 17.
Speaker Change: The first quarter, we do see being up.
17 years, I, certainly generating free cash flow.
Speaker Change: On a mix issue I think Rob talked a little about some of the storage that we have.
How are you guys thinking about potential shareholder distributions.
Yes.
Speaker Change: As beneficial here in the first part of the year as we saw last year. When we look at the whole of the year, though I think it's going to be turning more to a traditional manufactured products.
Thanks for asking the question Kurt we've been.
I know that people are concerned about the first quarter being not.
Not as strong as we'd like given the robustness of the year and in the really the second third and fourth quarters play out really strong so were very confident but we probably didnt think that Q1 was the time to initiate any sort of shareholder return, but we do have I mean, we do have approval from the board to do share repurchases.
Speaker Change: Product.
Speaker Change: Cell and the margins that we have there in the back half of the year.
Speaker Change: And then in the first quarter.
Speaker Change: Compared to the fourth quarter of last year.
Speaker Change: Talk a little bit about how we get.
Speaker Change: Tubes coming in at zero margins that bring the margin down in certain quarters and then we performed the work the next quarter and margins go up I think thats, what youre seeing some effect on here in the first quarter is we had revenues in the fourth quarter associated with steel tubes, and now we're starting to produce those and bill pools, and we're seeing more of the profit.
And I think we're going to be we.
We will at least be taken a hard look at it.
Q2, but certainly for the remainder of the year.
Alright, that's great. Thanks, I appreciate it.
Thanks.
Thank you. Our next question will be from David Smith.
<unk> energy patterns. Please go ahead.
Speaker Change: Margin coming through.
Hey, good morning, and thank you.
Speaker Change: Okay great.
Speaker Change: Follow up with.
Okay.
Speaker Change: You guys are an enviable free cash flow generating position I think what 16 17.
Im.
Just following on a little bit the grubs last question Bob I.
Speaker Change: 17 years, or something and generating free cash flow.
Appreciate the answer on the repurchase authorization.
Speaker Change: How are you guys thinking about potential shareholder distributions.
But just wanted to ask about your thoughts on if and when we might see.
Speaker Change: Yes.
Speaker Change: Thanks for asking the question Kurt we've been.
More.
<unk> defines shareholder returns framework that might be in the cards.
Speaker Change: I know that people are concerned about the first quarter Vietnam.
Speaker Change: Not as strong as we'd like given the robustness of the year and in the really the second third and fourth quarters play out really strong so were very confident but we probably didnt think that Q1 was the time to initiate any sort of shareholder return, but we do have I mean, we do have approval from the board to do share repurchases.
I think thats, what Ive said before is probably I don't know if I can give a lot more color, but we do have that I think we've we've kind of talked about where we want to be.
We do want it we do want to initiate some sort of shareholder return program, we've discussed that with our board so figuring out Wednesday when's, the right time to start.
Speaker Change: And I think we're going to be.
We've got a couple of growth opportunities you saw that were lifted in the capex up in the business and we've talked about expanding the removal robotics, but it doesn't mean, we're going to shy away from from trying to put in and I think our first choice would be some sort of like you said programmatic.
Speaker Change: Well at least be taken a hard look at it.
Speaker Change: Q2, but certainly for the remainder of the year.
Speaker Change: Alright, that's great. Thanks, I appreciate it.
Speaker Change: Thanks.
Speaker Change: Thank you. Our next question will be from David Smith.
David Christopher Smith: Energy patterns. Please go ahead.
Share buyback program that we can go out and buy back some shares when when the prices right using the using the cash conservative laid out to get that program kicked off.
David Christopher Smith: Hey, good morning, and thank you.
Okay.
David Christopher Smith: Jeff just following on a little bit the last question.
Bob.
Speaker Change: I appreciate the answer on the repurchase authorization.
Okay I appreciate it a quick follow up on <unk>.
Speaker Change: But just wanted to ask about your thoughts on if and when we might see.
Sorry, if I missed.
Can you give us any color or details on the offshore products backlog split between energy and other.
Speaker Change: More.
Jeff: Define shareholder returns framework that might be in the cards.
No we didn't.
Bob: I think thats, what Ive said before is probably I don't know if I can give a lot more color, but we do have that I think we've we've kind of talked about where we want to be.
I think we gave some insights into the level of orders of intake.
On the mobile robotics side of the business.
On the forklifts and how it increased year over year I think we're getting some level of guidance that traditionally those are about $250000 per copy plus or minus depending on what all is order with each of them. So.
We do want it we do want to initiate some sort of shareholder return program. We've discussed that with our board. So figuring out when does that when is the right time to start.
Bob: We've got a couple of growth opportunities you saw that were lifted in the capex up in the business and we've talked about expanding the removal robotics, but it doesn't mean, we're going to shy away from from trying to put in and I think our first choice would be some sort of like you said programmatic.
I think that should give some level of.
Expectation yet.
I appreciate it thank you.
Yeah. Thanks, David.
Thank you.
Bob: Share buyback program that.
At this time, we have no other questions from Mr. I would like to turn the call over to Mr. Larson.
Bob: We can go out and buy back some shares when when the prices right in using the using the cash conservatively to get that program kicked off.
Thank you and since there are no more questions I'll, just wrap up by thanking everybody for joining the call. This concludes our fourth quarter and full year 2023 conference call have a great day.
Speaker Change: Okay I appreciate the quick follow up with him.
Speaker Change: Sorry, if I missed but could you give us any color or details on the mom and pops, where products backlog splits between energy and other.
Thank you, Sir ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending and at this time, we ask that you. Please disconnect your lines.
Speaker Change: No we didn't.
Speaker Change: I think we gave some insights into the level of orders of intake.
Speaker Change: On the mobile robotics side of the business.
Speaker Change: On the forklifts and how it increased year over year I think we're getting some level of guidance that traditionally those are about $250000 per copy plus or minus depending on what all is order with each of them. So.
Speaker Change: I think that should give some level of.
Speaker Change: Expectation yet.
Speaker Change: I appreciate it thank you.
Speaker Change: Yeah. Thanks, David.
Speaker Change: Thank you.
Speaker Change: At this time, we have no other questions from Mr. I would like to turn the call over to Mr. Larson.
Larson: Thank you and since there are no more questions I'll, just wrap up by thanking everybody for joining the call. This concludes our fourth quarter and full year 2023 conference call have a great day.
Larson: Thank you, Sir ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending and at this time, we ask that you. Please disconnect your lines.
Larson: [music].