Oceaneering International, Inc. (NYSE:OII) Q2 2020 Earnings Conference Call - Final Transcript

Jul 30, 2020 • 11:00 am ET


Oceaneering International, Inc. (NYSE:OII) Q2 2020 Earnings Conference Call - Final Transcript


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My name is Megan, and I will be your conference operator. I would like to welcome everyone to Oceaneering's Second Quarter 2020 Earnings Conference Call. [Operator instructions] After the speakers' remarks, there will be a question-and-answer period.

With that, I will now turn the call over to Mark Peterson, Oceaneering's Vice President, Corporate Development, and Investor Relations.

Mark Peterson

Thanks, Megan. Good morning, and welcome to Oceaneering's second quarter 2020 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 second quarter press release. We welcome your questions after the prepared statements.

I will now turn the call over to Rod.

Roderick A. Larson

Good morning, everybody and thanks for joining the call today. So before I start with the prepared remarks, I want to take time for a thank you to our Oceaneering employees, our customers and our fellow offshore service providers for coming together the way they have in the second quarter to work safely and perhaps in ways that we may not have previously envisioned. This is the spirit that's made this industry great. And together, we're going to continue to make a difference and make the industry better and safer than ever before. So thanks again to everybody.

Now to my prepared remarks. Today, I'll review the details of our second quarter 2020 results. I'll provide you with the general outlook for the second half of 2020, and I'll give you an update on our expense reduction activities. After that, I'll make some closing remarks and open the call to your questions.

So for our second quarter summary results, considering all the uncertainties surrounding the crude oil markets and the COVID-19 pandemic, we were satisfied with our adjusted operating results. For the quarter, we generated adjusted earnings before interest, taxes, depreciation and amortization, or adjusted EBITDA, of $40.5 million, exceeding consensus estimates and we generated $26.9 million of free cash flow.

These positive results were partially attributable to our actions to substantially reduce structural costs in light of an expected continuation of lower demand for our services and products. The positive effect of these cost reductions is reflected in our 9% consolidated adjusted EBITDA margin for the second quarter of 2020, which declined by only 14 basis points as compared to the first quarter of 2020, despite a 20% decrease in revenue.

I am also happy