Good morning. My name is Joanna, and I will be your conference operator. Welcome, everyone, to Oceaneering's 2022 third quarter earnings conference call. All lines have been placed on mute to prevent any background noise. There will be a question-and-answer period after the speaker's remarks. With that, I will now turn the call over to Mark Peterson, Oceaneering's Vice President of Corporate Development and Investor Relations. Thanks, Joanna. Good morning, and welcome to Oceaneering's third quarter 2022 results conference call. Today's call is being webcast, and a replay will be available on Oceaneering's website. Joining us on the call today are Rod Larson, President and Chief Executive Officer, who will be providing our prepared comments, and Alan Curtis, Senior Vice President and Chief Financial Officer. Before we begin, I would just like to remind participants that statements we make during the course of this call regarding our future financial 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. 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 third quarter press release. We welcome your questions after the prepared statements. I will now turn the call over to Rod. Thanks, Mark. Good morning, everyone, and thanks for joining the call today. As is our custom at this time of year, we're happy to be providing you with our initial thoughts on Oceaneering's 2023 outlook. As announced yesterday, we're initiating 2023 EBITDA guidance in the range of $260-$310 million. At the midpoint, this would represent a 25% increase over $227.5 million, which is the midpoint of our revised adjusted EBITDA guidance for 2022. We're confident in our ability to deliver this solid improvement in 2023 based on supportive commodity prices and supply and demand fundamentals in our traditional energy businesses despite current global economic headwinds, increasing demand for our services and products in offshore renewable markets, expectations for modest growth in our Aerospace and Defense Technologies segment, emerging opportunities for our Mobile Robotics business, and increasing backlog as evidenced by our third quarter order intake of slightly more than $700 million. These fundamentals also underpin our expectation to generate over $100 million of free cash flow in 2023. Now, I'll focus my comments on our performance for the third quarter of 2022, our current market outlook, Oceaneering's consolidated and business segment outlook for the fourth quarter and the full year of 2022, and our initial consolidated 2023 outlook, including the previously mentioned EBITDA guidance range and free cash flow expectations. After these comments, I will then make some closing remarks before opening the call to your questions. Now to our third quarter summary results. Our third quarter results were driven by improved offshore activity and pricing, particularly in the Gulf of Mexico, which kicked up further during the quarter. Although the Gulf of Mexico stood out, our energy segments also saw broad-based activity increases in a number of international markets, including Asia, Africa, and Australia. We produced $66.6 million of free cash flow and $77.6 million of adjusted consolidated EBITDA, which exceeded our guidance and consensus estimates for the third quarter. Offshore activity drove significant operating improvements in our energy businesses, which were led by our Subsea Robotics, or SSR, and Offshore Projects Group, OPG, segments. In addition, increased manufacturing throughput led to improved operating margins in our Manufactured Products segment. We also saw an improvement in our government-focused businesses after experiencing the effects of negative timing during the second quarter of 2022. For the full year of 2022, we expect our adjusted EBITDA to be within the narrowed range of $215 million-$240 million and continue to expect positive free cash flow in the range of $25 million-$75 million. I'd like to go off script for a moment and talk about our revised EBITDA guidance range. I think it's important to emphasize that the midpoint of our guidance range does not include us achieving the anticipated product sale in our entertainment business. Achieving this product sale, along with further improvements in pricing utilization, would drive our results to the top end of the 2022 range. The revised range does consider the Q3 beat, but we're being cautious around the timing of the product sale. The offshore recovery is clearly underway, and with increasing emphasis on both energy security and development of the cleanest, safest, and most reliable energy sources, I expect positive market fundamentals to support our energy-focused businesses for years to come. In addition, with increasing competition for and scarcity of available labor, our mobile and subsea robotics businesses are experiencing heightened levels of interest as automation lowers on-site personnel requirements and enables remote supervisory control. Now let's look at our business operations by segment for the third quarter of 2022. Subsea Robotics, or SSR, revenue and operating income both increased as expected when compared to the second quarter, with higher activity levels for ROV, survey, and tooling services. SSR EBITDA margins of 31% improved over the second quarter of 2022 as new contract pricing and utilization efficiencies are increasingly being reflected in our results. As disclosed in our recent press release, we received strong SSR order intake of $300 million during the third quarter of 2022. The SSR revenue split was 77% from our ROV business and 23% from our combined tooling and survey businesses, the same as in the immediate prior quarter. Sequential ROV days on hire increased modestly with good levels of offshore activity. With an increase in drill support days and essentially flat vessel-based services, days on hire were 15,408 as compared to 14,631 during the second quarter, a 5% increase. Our fleet use was 60% in drill support and 40% in vessel-based services versus 57% and 43% respectively in the second quarter. We maintained our fleet count at 250 ROV systems, and our third quarter fleet utilization was 67%, an increase from 64% in the second quarter. Average ROV revenue per day on hire of $8,468 was 2% higher than average ROV revenue per day on hire of $8,278 achieved during the second quarter. At the end of September, we had a 59% drill support market share with ROV contracts on 82 of the 140 floating rigs under contract, a slight improvement over the 58% recorded for the quarter ending June 30th, 2022, when we had ROV contracts on 80 of the 137 floating rigs under contract. Turning to Manufactured Products, sequentially, our third quarter 2022 operating results improved despite an 11% decrease in revenue. Operating income and related margin percentage of $4.3 million and 5% respectively improved measurably from the second quarter of 2022, due primarily to increased manufacturing throughput in our subsea hardware businesses. Activity levels have improved in our non-energy mobility solutions businesses, and we are increasingly optimistic about the fundamentals of these businesses headed into 2023. Order intake during the quarter was solid, with Manufactured Products backlog increasing to $365 million on September 30, 2022, from $335 million on June 30, 2022. Our book-to-bill ratio was 1.17 for the nine months ended September 30, 2022, and was 1.08 for the trailing twelve months. Offshore Projects Group, or OPG, third quarter 2022 operating income increased as compared to the second quarter of 2022 on a 31% increase in revenue. Strong seasonal activity and intervention and installation work, primarily in the Gulf of Mexico, drove the improved results. Operating income margins remained in the mid-teens at 13%, but declined slightly from the 15% margin achieved in the second quarter due to slight changes in service mix. The Gulf of Mexico continued to see high levels of demand and pricing for vessel-based services during the third quarter of 2022. Integrity Management and Digital Solutions, or IMDS, third quarter 2022 operating income declined slightly from the preceding quarter on 2% less revenue. Revenue declined as customers, particularly in Europe, delayed inspection programs and kept facilities running to support energy security priorities. Operating income margin of 5% declined from the 6% recorded in the second quarter of 2022, due primarily to the continuing impact of employee wage inflation. Aerospace and Defense Technologies, or AdTech, third quarter 2022 operating income increased significantly from the second quarter on essentially flat revenue. Operating income margin of 15% improved significantly from the second quarter of 2022, reflecting recovery of prior quarter pre-contract costs and favorable project mix. Unallocated expenses of $30.9 million were less than expected and slightly lower than the second quarter of 2022. Now I'll address our outlook for the fourth quarter of 2022. On a consolidated basis, we believe that our fourth quarter 2022 EBITDA will decline on a relatively flat revenue as compared to our third quarter results. In the fourth quarter of 2022, while we anticipate a seasonal slowdown, we still expect relatively good activity in our offshore markets. Broadly, for the fourth quarter of 2022 as compared to the third quarter, we expect slightly lower activity in our energy segments, lower operating profitability in our AdTech segment, and increased unallocated expenses. For our fourth quarter 2022 operations by segment as compared to the third quarter of 2022, for SSR, we are projecting slightly lower revenue and operating profitability. ROV days on hire are forecast to decline slightly as compared with the third quarter, with slightly higher drill support days being more than offset by a seasonal decline in vessel-based days. We expect good survey activity to continue during the fourth quarter. Our forecast assumes overall ROV fleet utilization to be in the mid-60% range. SSR adjusted EBITDA margin is anticipated to remain in the low 30% range for the fourth quarter of 2022. As of September 30, 2022, there were approximately 16 Oceaneering ROVs on board 12 of the 14 floating rigs, with contract terms expiring by year-end. During the same period, we expect to have 39 ROVs on 35 of the 53 floating rigs starting new contracts. For manufactured products, we anticipate an increase in revenue and operating profitability as compared to the third quarter, with operating income margin in the mid-single digit range. This guidance does not include the anticipated product sale within our entertainment business, although we remain confident that this transaction will ultimately close. Award activity continues to look promising in our energy products businesses, and we are seeing a definite increase in interest in our mobility solutions businesses. We continue to forecast a book-to-bill ratio between 1.1 and 1.3 for the full year of 2022. For OPG, we expect significantly lower revenue and operating profitability in the fourth quarter of 2022 due to typical lower seasonal activity. That said, fourth quarter activity levels are still expected to be much stronger than during the same quarter over the last several years, with revenue expected to be similar to the second quarter of 2022. Fourth quarter 2022 operating income margin is expected to be slightly lower than what we achieved in the third quarter. For IMDS, we expect slightly lower revenue and operating results as compared with the third quarter of 2022. For AdTech, we forecast modestly higher revenue and lower operating income as compared to the third quarter. We expect operating income margin to decline during the fourth quarter as a result of the absence of pre-contract cost recovery that occurred in the third quarter and higher indirect expenses. For the fourth quarter, we expect operating income margins to be in the high single- to low double-digit range. Unallocated expenses are expected to be in the mid-$30 million range. For the full year of 2022, we expect to generate adjusted EBITDA within the narrowed range of $250 million-$240 million. Our guidance for organic capital expenditures remains in the range of $70 million-$80 million, and our guidance for cash income tax payments remains in the range of $40 million-$45 million. We continue to expect to generate positive free cash flow between $25 million and $75 million for the full year of 2022. Now turning to our free cash flow and debt position. Our cash flow from operations for the third quarter of 2022 was $85.9 million and was the primary driver in the increase in our cash and cash equivalents to $428 million as of September 30, 2022. At the end of the third quarter, our net debt position stood at $274 million. With our strong cash position and additional liquidity from our undrawn revolving credit facility, we remain well positioned to address the maturity of our 2024 senior notes. Now looking forward to 2023. Supportive commodity prices and the increasing importance of energy security underpin our expectations for a strong five-year outlook in our offshore energy businesses. With energy transition expected to require an all of the above solution across energy sources, we are well positioned to support our customers in enabling the production of cleaner, safer, and more reliable energy from traditional sources. At the same time, we are also currently supporting our customers in the evolving offshore renewables market, where we see strong growth in the medium term. National security priorities support our expectation for continued modest growth in our government-focused businesses. In aggregate, we see solid fundamentals supporting each of our current businesses over the next five years, while we also continue to grow the company by leveraging our core robotics expertise into new energy and mobile robotics markets. Accordingly, looking into 2023 year-over-year, we are anticipating increased activity and improved operating performance across all of our operating segments, led by gains from SSR and OPG. At this time, we forecast EBITDA in the range of $260 million-$310 million in 2023, driving healthy levels of cash flow from operations. In 2023, we expect capital expenditures to be higher than 2022 as we continue to focus on opportunities generating the highest returns, both in our traditional businesses and new high-growth markets. To be clear, we remain very focused on capital discipline and expect to generate positive free cash flow in excess of $100 million. We will provide more specific guidance on our expectations for 2023 during the year-end reporting process. In summary, based on our year-to-date financial performance and expectations for the fourth quarter of 2022, we are narrowing our adjusted EBITDA guidance to a range of $215 million-$240 million for the full year. We continue to see incremental growth in all of our segments in 2023, despite the challenges facing the current global economy that may suppress energy demand. We believe that energy security priorities, combined with a lack of investment in traditional energy sources over the past many years, will continue to prompt operator spending across all energy sources, even in a challenging near-term environment. We expect heightened focus on national security issues to foster modest growth in our government-focused businesses. These factors, combined with the emerging opportunities to apply our robotics expertise into new markets, both in energy and non-energy, further underpin our general expectation for increased activity levels over the foreseeable future. Our focus continues to be on maintaining a strong safety culture and safety performance, maintaining our financial and capital discipline, generating significant positive free cash flow, managing our 2024 debt maturity, attracting and retaining top talent, and increasing our pricing and margins to generate a fair return for our world-class services and products. Optimizing each of these priorities positions us for success during the energy transition, while providing increasing opportunities to provide returns for our shareholders. We appreciate everyone's continued interest in Oceaneering and will now be happy to take any questions you may have. Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press the star followed by the one on your touch-tone phone. You will hear a three-tone prompt acknowledging your request. If you are using a speakerphone, please lift the handset before pressing any keys. First question comes from James Schumm at Cowen. Please go ahead. Hey, good morning, guys. Congrats on a great quarter. Good morning, James. Thanks. Just wanted to talk about the entertainment sale and manufactured products. I mean, how confident are you that the sale occurs over the next six months? Like, how likely is it? I think we're very confident that we will be able to achieve it over the next six months. As I mentioned in my break, it's just a matter of whether we can get that in by the end of the year. That kind of is what we believe the traditional businesses have put us solidly at that midpoint, especially given the Q3B. That sale would represent, you know, pushing us to the upside of our range. Understood. Okay. The AdTech business seems to have been a victim of timing on some government projects this year. Do you think this will be an ongoing issue, or do you think it's resolved? I don't think it's resolved for the government, let me be clear. We were in a position where a lot of the work that we were either looking to tender or retender, refund some of our for this year. We don't have the same situation next year. We don't expect the same impact, you know, in the coming couple of quarters. Is there any way that you can protect yourself in some of these contracts with the government to sort of prevent? I think the best thing we do is we have sort of a ladder of contracts, right? If you think about it that way, that we've got a number of contracts, so that even though each contract in and of itself is lumpy, having a portfolio of them and having a number of different projects that we're working on sort of offsets any big swings in any given quarter or half. Right. Okay. Well, thank you very much. Thank you. Ladies and gentlemen, as a reminder, should you have any questions, please press star one. Next question comes from Samantha Hoh at Evercore ISI. Please go ahead. Hey, guys. Just wanted to echo the congrats on a nice quarter. I was wondering on the SSR order that you announced, the net $300 million of intake. Can you split that for us between drill support and vessels-based services? I don't have that off the top of my head, Samantha. I think most of it's gonna be drill support, though. I mean, the preponderance of it is probably 80%, just rough estimate, looking at it at this point, 'cause some of these contracts are going out up to five years, I think, in duration. We're not seeing any of that on a vessel at this point in time. I think that's representative of the number of rigs that are coming on, as I mentioned earlier. That those 35 new rigs coming on, some of that is related to those new contracts. Yeah. The other part of it, Samantha, that sometimes doesn't get as much attention is some of this is coming from our survey business, which rolls up into the SSR segment as well. Sometimes it doesn't get as much fanfare, but we have seen an uptick in that activity as well. Okay. Just for the longer duration type contracts, what sort of language is there to address, you know, like pricing or cost inflation adjustment, things like that? It's gonna be contract dependent. I mean, many times what we're trying to achieve is the ability to reprice or, you know, build in inflationary mechanisms so that if we see labor increases, those would be passed on to the contract as well. I think in the longer term, one of the things that we count on too, Samantha, is new technology, is the ability to upsell within these contracts and continue to roll over to new products, new technology and new opportunities. If the contract runs long, we still have those things going on behind the scenes. For your growth, you know how you highlighted that you're targeting expanding robotics into some of the new energies. Would that all be rolled up into this segment down the line? Like, that way we'll also see, like, the CapEx spend as well. That's a great question. Let me break it out a little bit for you. When we talk about some of that automations, robotics, inside of SSR, there is some. In both the survey business and the ROV business, we have this opportunity to do more remote piloting. We have the opportunity to do more, Freedom work, Liberty work, where we've got a remotely operated vehicle or an autonomous vehicle. That's largely what we talk about in the ROV side. When we get over to our Mobile Robotics business, which is inside of Manufactured Products, that's also exciting. That's where we're talking about plant floor automation. We're talking about enhanced, entertainment opportunities with ride systems. We're talking about people movers inside that, automated forklifts, things like that. You've got two different pieces that sit in two different businesses, one of them focused on, and I'm not gonna just say energy, but focused on offshore, and one of them focused on more terrestrial op applications. Okay. Maybe just also, the free cash flow guide, I think, was kind of, you know, in line with what we were expecting. Do you have a view or what are your expectations in terms of, like, free cash flow conversion on EBITDA longer term? Is that, like 40-ish% range what you think of as achievable through cycle? Or, you know, how does that compare to what, you know, how you think about it compared to last cycle? I'm gonna throw out an easy one first while Alan's kind of looking at his numbers a little bit. I think one of the things it's gonna be dependent on is really how much investment we wanna make. Because some of these robotics things that we just talked about are gonna have some capital requirements. As we see sort of some opportunities come up there, we may have some things, those best opportunities that we wanna invest in. If we just look at the base of business, I'll turn it over to Alan. Yeah. Samantha, I think you're directionally correct. When you look at next year's midpoint guidance range of $285 million of EBITDA, we expect to be better than $100 million or thereabouts on free cash flow. That would imply 35% or better using the midpoint. Okay. The low end of the anticipated free cash flow. Okay. Thanks, guys. Thanks for your time, and congrats again. Thank you. Next question comes from Eddie Kim at Barclays. Please go ahead. Hi, good morning. You've had really good momentum here in OPG the past two quarters, especially on the margin front. Looking back historically to the 2011 to 2014 timeframe, margins were kind of at the high teens level in this segment, we're actually not that far away. Just given the higher activity you're seeing, could we potentially see margins return to that high teens level in OPG, maybe even next year? What would need to take place for that to happen? Eddie, I think a couple of things we'll wanna watch, and they're both mix. One of them is the mix of the kinds of work we're doing, intervention work versus installation. As we start to see more and more of that intervention work, I think you see margins push up. Then the other thing is the mix of international to Gulf of Mexico. You know, when we have the higher margins, it did imply a higher mix of things outside the Gulf, more international work, and we are pursuing more of that work. I think as we start to see that mix shift to more international, yes, we'll start to, you know, be exposed to those kind of margins again. Understood. Just all your vessels currently are in the Gulf of Mexico, if I'm not mistaken. Just wondering if that's correct? No, Eddie, actually, we have some vessels that we charter in and operate over in West Africa. We've been a long time, we've utilized the Ocean Intervention III as a charter vessel into the market there, as well as we've had the Island Frontier working quite a bit this year as well. We charter in other ones on an as-needed basis as well. Typically two, three vessels operating outside. We have a charter vessel that we've done some work. I'll call it abandonment work as well or decom work in the North Sea. We charter in on more of a project-specific basis on an international scheme. Yeah. To Alan's point, that could be IMR, it could be installation, or it could be survey. Got it. Understood. Thank you. Then just quickly shifting to the ROVs business. I mean, day rates are now kind of at $8,500. I mean, we haven't seen that level for several years. I mean, just given the momentum you're seeing here with all the contracts we've been seeing lately on offshore rigs, plus the $300 million award you recently announced, do you feel you have visibility in the day rates potentially eclipsing, you know, $9,000 at some point next year? Or do you think that would be a bit of a stretch at this point? You know, Eddie, I think it might be within reach over time. I think it really gets down to the number of ROVs that, you know, we're going back in and trying to reprice on all contracts at this point. As we look at those contracts that are really maturing in the next 12 months that are ripe for, I'll say, repricing, you know, and then we have other ones in 2024. Can we get to $9,000? I think it's gonna depend if we can get as many of them into 2023 as we can and how early in the year we get them there. Yeah. You know, we might have an exit rate closer to $9,000 by the back end of the year, be my expectation. For an exit rate, not for an average for the year. Yeah. As I mentioned earlier when I was talking to Samantha, I think upselling is part of that to get the day rates up. Right now we're facing some FX headwinds, so in the mix, depending on how that goes, that can give us some a little bit of help too, if there's some balance there. We've got a few different things. Again, just like I said before, the geographical mix matters on ROVs as well. But to Alan's point, line of sight, yep, but we probably got to get a couple of things to line up for us. Got it. Great. Thank you very much. I'll turn it back. Thanks, Eddie. Thank you. There are no further questions. You may proceed. All right. Well, since there are no more questions, I'd like to wrap up by thanking everybody for joining the call, and this concludes our third quarter 2022 conference call. Thank you. Ladies and gentlemen, this concludes your call for today. 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