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Business Segments
 6 Months Ended
Jun. 30, 2023
Segment Reporting [Abstract]  
Business Segments

10. 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.

During the quarter ended March 31, 2023, the Company reorganized its structure in order to streamline operations and leadership around more focused and integrated product and service lines to align with its business strategy. To reflect the Company’s new organizational structure, the Company changed presentation of its segments in 2023 into the following three reportable business segments: Subsea Products, Subsea Services, and Well Construction. Segment operating results for the prior year comparative period have been restated to reflect this change. Previously, the Company’s operations were organized into three geographic segments.

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.

Corporate. 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.

During the three months ended June 30, 2023, the Company incurred ($0.6) million of restructuring and other charges 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 second quarter of 2023, the Company reassessed the reasonability of a restructuring liability related to its Well Construction business. During our assessment certain market exit costs became known and the liability was adjusted accordingly. The charges in Corporate primarily consisted of office moves, site cleanup, preparation costs, consulting and legal fees. During the three months ended June 30, 2022, the Company incurred $5.8 million of additional costs under the 2021 global strategic plan. These charges were primarily related to a $2.6 million write down of our Houston corporate administrative building in Corporate and other long-lived asset write-downs of $2.5 million in Subsea Products. In addition, there were other charges of $0.7 million primarily related to consulting and legal fees, office moves, cleanup and preparation costs, and brokerage fees in Corporate. 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. During the second quarter of 2023, the Company reassessed the reasonability of a restructuring liability related to its Well Construction business. During our assessment certain market exit costs became known and the liability was adjusted accordingly, resulting in a release of approximately $2.3 million. The charges in Corporate primarily consisted of office moves, site cleanup, preparation costs, consulting and legal fees. During the six months ended June 30, 2022, the Company incurred $5.8 million of additional costs under the 2021 global strategic plan. These charges were primarily related to a $2.6 million write down of our Houston corporate administrative building in Corporate and other long-lived asset write downs of $2.5 million in Subsea Products. In addition, there were other charges of $0.7 million primarily related to consulting and legal fees, office moves, cleanup and preparation costs, and brokerage fees in Corporate.

The following tables presents selected financial data by business segment:

 

 

Three months ended June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

Subsea Products

 

 

Subsea Services

 

 

Well Construction

 

 

Corporate

 

 

Total

 

 

 

(In thousands)

 

Revenue

 

$

44,579

 

 

$

49,466

 

 

$

23,586

 

 

$

25,265

 

 

$

21,442

 

 

$

19,247

 

 

$

-

 

 

$

-

 

 

$

89,607

 

 

$

93,978

 

Depreciation and amortization

 

 

1,745

 

 

 

1,787

 

 

 

2,773

 

 

 

3,088

 

 

 

1,816

 

 

 

1,672

 

 

 

715

 

 

 

1,123

 

 

 

7,049

 

 

 

7,670

 

Operating income (loss)

 

 

(1,894

)

 

 

(4,322

)

 

 

1,230

 

 

 

4,799

 

 

 

6,491

 

 

 

4,992

 

 

 

(2,221

)

 

 

(9,338

)

 

 

3,606

 

 

 

(3,869

)

 

 

 

Six months ended June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

Subsea Products

 

 

Subsea Services

 

 

Well Construction

 

 

Corporate

 

 

Total

 

 

 

(In thousands)

 

Revenue

 

$

90,696

 

 

$

95,749

 

 

$

47,482

 

 

$

47,016

 

 

$

42,294

 

 

$

34,350

 

 

$

-

 

 

$

-

 

 

$

180,472

 

 

$

177,115

 

Depreciation and amortization

 

 

3,344

 

 

 

3,573

 

 

 

5,527

 

 

 

6,128

 

 

 

3,559

 

 

 

3,279

 

 

 

1,508

 

 

 

2,249

 

 

 

13,938

 

 

 

15,229

 

Operating income (loss)

 

 

(399

)

 

 

(6,898

)

 

 

10,613

 

 

 

5,183

 

 

 

7,054

 

 

 

7,547

 

 

 

(10,474

)

 

 

(15,292

)

 

 

6,794

 

 

 

(9,460

)

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.