Financial Data and Key Metrics Changes - For Q4 2024, the company reported net income of $56.1 million or $0.55 per share, a 26% year-over-year increase [11] - Consolidated revenue for Q4 2024 was $713 million, a 9% increase compared to the same period last year, with operating income rising 64% to $77.9 million [11][12] - Adjusted EBITDA for Q4 2024 reached $102 million, representing a 35% increase year-over-year [11][12] - For the full year 2024, consolidated revenue increased 10% to $2.7 billion, with operating income improving by 36% to $246 million [21][22] Business Segment Data and Key Metrics Changes - Subsea Robotics (SSR) operating income for Q4 2024 was $63.5 million, a 26% increase year-over-year, with an EBITDA margin improvement to 36% from 32% [13][14] - Manufactured Products segment revenue for Q4 2024 was $143 million, an 8% increase year-over-year, but operating income margin declined to 3% due to reserves taken on a project [15][16] - Offshore Projects Group (OPG) achieved record revenue and operating income in Q4 2024, with operating income improving to $39.3 million and revenue increasing 14% to $184 million [17][18] - Integrity Management and Digital Solutions (IMDS) saw a decrease in operating income despite a revenue increase, primarily due to acquisition-related costs [18][19] Market Data and Key Metrics Changes - The company ended 2024 with a cash balance of $498 million and a free cash flow of $94.5 million [12][13] - The year-end backlog was $604 million, a decrease of $17 million compared to the previous year [16] - The book-to-bill ratio for 2024 was 0.7, down from 1.31 in 2023, indicating a slowdown in order intake [16] Company Strategy and Development Direction - The company is focused on leveraging market dynamics in 2025, with expectations for mid to high single-digit revenue growth across all segments [28][29] - Continued pricing progression and favorable project mix are expected to drive revenue growth [29][30] - The company is actively pursuing M&A opportunities, particularly in disruptive technologies, and has seen an increase in potential targets [87][88] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the stability of defense-related markets and the overall outlook for 2025, despite potential geopolitical risks [27][28] - The forecast for 2025 includes expectations for EBITDA in the range of $380 million to $430 million, representing a 17% increase over 2024 [30][31] - The company anticipates generating positive free cash flow of $110 million in 2025, with capital expenditures projected between $130 million and $140 million [31][32] Other Important Information - The company achieved a 56% reduction in high potential incidents, with a total recordable incident rate of 0.29% for the year [9][10] - The acquisition of Global Design Innovation Limited (GDI) is expected to enhance the company's digital and software capabilities [8][10] Q&A Session Summary Question: Pricing increase in ROVs - Management indicated that the pricing increase in ROVs has been driven by both drilling support and vessel-based work, with expectations for continued upward pricing progression despite flat activity levels [46][49] Question: Guidance on orders and book-to-bill - Management did not provide specific guidance on orders or book-to-bill but noted a healthy sales pipeline [50][52] Question: ROV utilization assumptions - Management expects rig activity to remain flattish, with a focus on higher quality assets and increased market share in Brazil [58][61] Question: Update on outsourced manufacturing - Management expressed confidence in the quality of outsourced manufacturing and noted ongoing discussions with customers for larger volume orders [62][64] Question: Margin improvement in manufactured products - Management highlighted that margin improvement is driven by better pricing in backlog and operational efficiencies [67][69] Question: Strength in offshore projects - Management discussed the growth in light well intervention and rework of infrastructure as key drivers for OPG's performance [78][80] Question: Visibility in the vessel class ROV market - Management noted strong utilization in the vessel class and ongoing demand for ROVs in various projects [82][85] Question: M&A opportunities - Management indicated an increase in M&A opportunities and expressed excitement about potential targets that align with the company's strategic goals [87][89]

Financial Data and Key Metrics Changes - For the full year 2024, same store net operating revenues increased by 5.5% and adjusted EBITDA improved by 6% [9][17] - Adjusted EBITDA for the fourth quarter was $428 million, compared to $386 million in the prior year period, with a margin of 13.1%, up from 12.1% [16][17] - Cash flows from operations were $216 million for the fourth quarter, up from $90 million in the fourth quarter of 2023, and $480 million for the full year of 2024, consistent with guidance [19][20] Business Line Data and Key Metrics Changes - Same store admissions increased by 3.2%, adjusted admissions by 2.7%, and surgeries by 1.3% for the full year 2024 [7] - Same store emergency department visits were up 1% and surgeries were up 0.9% in the fourth quarter [16] - Same store ambulatory surgery center cases increased by 14% last year [8] Market Data and Key Metrics Changes - The company completed divestitures in Cleveland, Tennessee, and Statesboro, North Carolina, with plans for additional divestitures expected to generate over $1 billion in total proceeds [10][22] - The net debt to trailing adjusted EBITDA improved to 7.4 times, down from 7.9 times at the end of 2023 [22] Company Strategy and Development Direction - The company is focused on expanding outpatient access, including primary care, specialty practices, and urgent care centers, with significant capital investments [7][15] - The implementation of a new ERP system is expected to drive efficiencies and reduce costs, with estimated savings of $40 million to $60 million in 2025 [23] - The company anticipates further expansion of internally managed hospital-based provider services in 2025 [12] Management's Comments on Operating Environment and Future Outlook - Management noted stabilization in payer downgrades and denials, which had been a troubling trend for healthcare providers [11][17] - The company expects organic growth of $75 million to $100 million in 2025, with net revenue guidance of $12.2 billion to $12.6 billion [23] - Management expressed confidence in the approval of directed payment programs in New Mexico and Tennessee, which could add an incremental $100 million to $125 million to annual EBITDA [24][50] Other Important Information - The company experienced a $10 million impact from a hurricane in Q4, with one hospital still shut down as a result [74] - The company is in discussions for additional strategic divestitures expected to be announced soon [22] Q&A Session Summary Question: Can you help bridge 2024 to 2025 guidance? - Management provided a high-level bridge starting with 2024 EBITDA of $1.54 billion, accounting for reductions from divestitures and adding organic growth to reach the midpoint of 2025 guidance [27][28] Question: What are the strategic moves expected moving forward? - Management highlighted ongoing investments in core portfolio growth, including outpatient and procedural capacity expansions, and noted that there are still investable opportunities in the pipeline [30][33] Question: Can you quantify the continued hurricane impact in Q4? - The hurricane impact was as expected at $10 million, with one hospital shut down for the entire quarter [74]

Financial Data and Key Metrics Changes - In 2024, net sales totaled $1.473 billion, slightly down from 2023, impacted by a nearly 6% decline in foot traffic and existing home sales at 30-year lows [17][55] - Adjusted EBITDA for 2024 increased 10.2% to $241.8 million, with a margin of 16.4%, compared to 14.9% a year ago [59][70] - Adjusted gross margins improved by 390 basis points to 48.1% for 2024, driven by operating efficiencies and a higher margin product mix [19][55] Business Line Data and Key Metrics Changes - The Hardware and Protective Solutions (HPS) segment saw a 23% increase in adjusted EBITDA with flat top-line results, demonstrating strong customer value [21] - Robotics and Digital Solutions (RDS) is expected to return to growth in 2025, with new strategies and machine rollouts enhancing revenue potential [45][111] Market Data and Key Metrics Changes - Existing home sales fell to 30-year lows, contributing to a 5-point reduction in market volume for Hillman in 2024 [18] - The company anticipates a return to 2% to 3% volume growth in the market, which is crucial for achieving organic top-line growth of 5% to 6% [27][69] Company Strategy and Development Direction - The company aims to grow to $2 billion in net sales over the next three to five years, focusing on core business growth and strategic acquisitions [26][29] - Investments in technology, including cloud migration and AI, are prioritized to enhance operational efficiency and customer service [30][31] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about returning to growth in 2025, despite current market pressures, and emphasized readiness for future market improvements [40][76] - The company is confident in its ability to navigate macroeconomic challenges and maintain profitability through strategic initiatives [39][41] Other Important Information - Hillman made two acquisitions in 2024, Koch Industries and Intex DIY, which are expected to provide organic growth opportunities [14][15] - The company has paid down over $900 million of debt in the past four years, improving its balance sheet [24][63] Q&A Session Summary Question: Can you break out organic growth in Q4 by price and volume? - Management indicated that price was down just over 1%, with volume making up the remainder of the growth calculation [80] Question: Why should MinuteKey 3.5% drive sustainable growth in RDS? - Management highlighted the expansion into new markets and improved machine capabilities as key drivers for growth [84][87] Question: How did December trends look, and what is expected in Q1? - December was pressured, but Q1 has stabilized, aligning with expectations from Q4 [96] Question: How are tariffs being managed? - Management plans to handle tariffs similarly to past experiences, ensuring pricing adjustments are made as necessary [98][102] Question: What is the outlook for the Canadian business? - The Canadian market is facing pressures, but new business wins are helping to offset these challenges [127][130]

Financial Data and Key Metrics Changes - Free cash flow in Q4 2024 fell short of expectations, primarily due to significant receivables in Mexico and accelerated milestone payments in Saudi Arabia [7][30] - Adjusted EBITDA for the fourth quarter totaled $221 million, a slight decrease from $222 million in the previous quarter [45] - Revenue from operations for Q4 was $730 million, a sequential reduction of $2 million [42] Business Line Data and Key Metrics Changes - U.S. drilling segment revenue declined by $13 million sequentially, or 5.2%, driven by a reduced rig count in the Lower 48 market [42] - Rig Technologies segment revenue reached $56.2 million, up $10.4 million or 22.6%, driven by increased deliveries of capital equipment and parts sales in the Middle East [45] - Technology-focused businesses, NDS and RigTech, generated combined EBITDA of over $43 million, with NDS's gross margin exceeding 54% in the quarter [28][49] Market Data and Key Metrics Changes - The average rig count in the Lower 48 averaged 66, a decrease of two rigs [42] - International drilling revenue was $371 million, an increase of $2.8 million, despite suspensions in Saudi Arabia [44] - The average daily gross margin for international operations was approximately $16,700, a decrease of $400 from the previous quarter [48] Company Strategy and Development Direction - The company aims to grow contributions from CapEx light segments, with NDS's contribution increasing to 19.5% of consolidated EBITDA [13] - The strategy includes a focus on international markets, with a strong pipeline of additional tenders and rig deployments expected in 2025 [10][11] - The merger with Parker Wellbore is anticipated to provide significant strategic and financial benefits, with expected annualized cost synergies of at least $35 million in 2025 [34][60] Management's Comments on Operating Environment and Future Outlook - Management expressed a bullish outlook for international markets, particularly in Saudi Arabia, where natural gas activity is expected to expand [36][75] - The U.S. market remains sluggish, with limited indications of a near-term recovery in the Lower 48 drilling rig market [39] - The company anticipates a flat year in U.S. markets but growth in international markets and drilling solutions [52] Other Important Information - Capital expenditures for Q4 were $241 million, with a forecast of $710 million to $720 million for 2025 [51][54] - The company expects to generate approximately $150 million of free cash flow outside SANAD, which will be used to reduce gross debt [67][68] Q&A Session Summary Question: Clarification on free cash flow and debt reduction - Management indicated that free cash flow generation outside SANAD is expected to be around $150 million, which will be allocated to reducing gross debt [67][68] Question: Outlook on international rig count and releases - Management believes that rig count reductions in Saudi Arabia may be complete, with continued investment in new builds [70][76] Question: Working capital and cash taxes outlook - Management expects collections from Mexico to be sorted out in the first half of 2025, with working capital remaining under control [85][88] Question: Business climate in Argentina - The company has implemented a new operating model in Argentina to improve cash extraction, which has been well received by customers [89][90] Question: Full year 2025 guidance and G&A outlook - Management is working to reduce G&A costs and expects operational improvements to lead to higher EBITDA than in 2024 [97][98]