Core Points - The EU is willing to accept a 10% general tariff proposed by the Trump administration but seeks exemptions for key industries [2][5] - Canada has decided to abandon its digital services tax to facilitate trade negotiations with the U.S. [9][10] Group 1: EU's Trade Negotiations - The EU is negotiating a trade agreement with the U.S. that includes a 10% general tariff on many goods exported to the U.S. while requesting lower tariffs in critical sectors such as pharmaceuticals, alcohol, semiconductors, and commercial aircraft [2][4] - The EU is pushing for quotas and exemptions to reduce the 25% tariff on automobiles and parts, as well as the 50% tariff on steel and aluminum [2][5] - The EU estimates that U.S. tariffs currently cover products worth €380 billion, accounting for about 70% of the EU's total exports to the U.S. [5] Group 2: Canada’s Trade Position - Canada has canceled its digital services tax, which was set to take effect in 2024, to advance trade talks with the U.S. [9][10] - The digital services tax would have impacted major U.S. tech companies, including Amazon and Google, by imposing a tax on their digital service revenues in Canada [9][10] Group 3: Potential Outcomes of Negotiations - The EU has outlined four possible scenarios before the July 9 deadline: reaching an acceptable asymmetric agreement, the U.S. proposing an unbalanced agreement, extending the deadline for negotiations, or Trump exiting negotiations and increasing tariffs [8] - The EU is aiming for a "fair" tariff agreement that provides more predictability for businesses [6]

Financial Data and Key Metrics Changes - The company reported revenues of $160 million for Q1 2025, meeting the guidance range of $160 million to $170 million, with adjusted EBITDA of $19 million, exceeding the expected range of $17.5 million to $18.5 million [5][13] - Adjusted net income totaled $4 million, or $0.06 per share, after excluding facility exit charges of $1 million [13] - Cash flow from operations was $9 million, reversing the historical trend of negative cash flow in Q1 due to seasonal working capital [6][13] Business Line Data and Key Metrics Changes - Offshore Manufactured Products segment generated revenues of $93 million with an adjusted EBITDA of $18 million, resulting in an adjusted EBITDA margin of 19%, down from 23% in the previous quarter [13][14] - Completion and Production Services segment reported revenues of $35 million and adjusted EBITDA of $9 million, with an adjusted EBITDA margin of 25%, significantly up from 12% in the fourth quarter [13][14] - Downhole Technologies segment generated revenues of $33 million with adjusted EBITDA of $2 million [14] Market Data and Key Metrics Changes - The company experienced strong demand in international and offshore regions, leading to bookings of $136 million and the highest backlog since September 2015, with a book-to-bill ratio of 1.5 times [6][17] - Despite concerns over tariffs and potential economic impacts, the company anticipates that operations outside the U.S. will remain largely unaffected [9][12] Company Strategy and Development Direction - The company plans to focus on organic growth opportunities, research and development, debt repayment, and share repurchases to drive value for shareholders [18] - Strategic actions have been implemented to mitigate potential negative impacts from tariffs, including optimizing the supply chain and adjusting pricing [10][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing demand for offshore and international products, despite potential pressures from domestic market conditions and crude oil prices [17] - The company maintained its full-year revenue guidance of $700 million to $735 million and EBITDA guidance of $88 million to $93 million, citing strong bookings and improved margins [18] Other Important Information - The company generated $9 million from the monetization of equipment and inventory, which was used for capital expenditures and share repurchases [6][14] - Planned capital expenditures for the year are expected to total $25 million, with a significant portion allocated to the new facility in Batam, Indonesia [14][15] Q&A Session Summary Question: Insights on bookings and backlog - Management noted that long-cycle projects, particularly in development drilling, are less affected by short-term commodity price fluctuations, indicating a stable outlook for ongoing projects [21][22] Question: Impact of Gulf operations on margins - Management confirmed that Gulf operations were a major driver of margin improvement, with expectations for continued positive activity in the region [27][30] Question: Share repurchase strategy amidst low stock prices - The company plans to be aggressive in share repurchases given the current low stock price, while also considering debt reduction as a priority [31][34] Question: Potential tariff impacts on costs - Management indicated that tariff impacts are expected to be minimal, with potential cost increases in the Downhole Technologies segment being manageable through price adjustments [40][42]