Business Segments

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

Business Segments

9. 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 March 31, 2023, the Company incurred $1.7 million of additional costs under the 2021 global strategic plan all of which is in Corporate. During the three months ended March 31, 2022, the Company did not incur any significant costs under the 2021 global strategic plan.

The following table presents selected financial data by business segment:

	Three months ended March 31,
	2023		2022			2023		2022		2023		2022		2023			2022			2023		2022
	Subsea Products					Subsea Services				Well Construction				Corporate						Total
	(In thousands)
Revenue	$	46,117	$	46,304		$	23,896	$	21,784	$	20,852	$	15,049	$	-		$	-		$	90,865	$	83,137
Depreciation and amortization		1,599		1,786			2,754		3,040		1,743		1,607		793			1,126			6,889		7,559
Operating income (loss)		1,495		(2,576	)		9,384		384		562		2,555		(8,253	)		(5,954	)		3,188		(5,591	)

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.