Business Segments

6 Months Ended

Jun. 30, 2024

Segment Reporting [Abstract]

Business Segments

11. Business Segments

Operating segments are defined in FASB ASC Topic 280, Segment Reporting, as components of an enterprise about which separate financial information is available and evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance.

The Company’s operations are organized into three reportable business segments: Subsea Products, Subsea Services, and Well Construction. The Company evaluates segment performance based on operating income. The accounting policies of the segments are the same as described in the summary of significant accounting policies.

Subsea Products. The Company’s Subsea Products segment designs, manufactures and sells a variety of products including subsea wellheads, connectors and surface equipment, and subsea production systems.

Subsea Services. The Company’s Subsea Services segment delivers a variety of technical services including subsea rental services, subsea rework services and subsea services shared support.

Well Construction. The Company’s Well Construction business provides products and services utilized in the construction of the wellbore such as completions, casing hardware and liner hanger systems. In 2023, the Company acquired Great North and includes its product, service and leasing solutions within the Well Construction segment. Great North offers pressure control and completion solutions, including customized and highly engineered wellhead products for use in heavy oil and thermal production locations, proprietary completion solutions such as the Multi-Well Frac Connector TM, as well as related installation and maintenance services.

During the three and six months ended June 30, 2024, the Company did not incur any costs under the 2021 global strategic plan. During the three months ended June 30, 2023, the Company incurred ($0.6) million of additional costs under the 2021 global strategic plan out of which approximately ($1.9) million in Well Construction, $1.2 million is in Corporate and $0.1 million in Subsea Services. During the six months ended June 30, 2023, the Company incurred $1.1 million of additional restructuring and other charges under the 2021 global strategic plan out of which approximately $2.8 million is in Corporate, ($1.9) million in Well Construction and $0.2 million in Subsea Services.

The following tables presents selected financial data by business segment:

	Three months ended June 30,						Six months ended June 30,
	2024			2023			2024			2023
	(In thousands)
Revenue
Subsea products	$	42,681		$	44,579		$	78,013		$	90,696
Subsea services		26,664			23,586			51,244			47,482
Well construction		50,997			21,442			101,383			42,294
Total revenue	$	120,342		$	89,607		$	230,640		$	180,472
Depreciation and amortization
Subsea products	$	1,507		$	1,745		$	3,076		$	3,344
Subsea services		1,878			2,773			4,125			5,527
Well construction		3,879			1,816			7,746			3,559
Corporate (1)		743			715			1,492			1,508
Total depreciation and amortization	$	8,007		$	7,049		$	16,439		$	13,938
Operating income (loss)
Subsea products	$	2,561		$	(1,894	)	$	3,200		$	(399	)
Subsea services		4,287			1,230			6,120			10,613
Well construction		2,557			6,491			8,189			7,054
Corporate (1)		(14,071	)		(2,221	)		(40,977	)		(10,474	)
Total operating income (loss)	$	(4,666	)	$	3,606		$	(23,468	)	$	6,794

(1) Corporate includes the expenses and assets of the Company’s corporate office functions, legal and other administrative expenses that are managed at a consolidated level.

The Company does not allocate assets to its reportable segments as they are not included in the review performed by the Chief Operating Decision Maker (CODM) for purposes of assessing segment performance and allocating resources. The balance sheet is reviewed on a consolidated basis and is not used in the context of segment reporting.