Frank's International N.V. (FI) Q4 2020 Earnings Call Transcript

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Frank's International N.V. (FI)
Q4 2020 Earnings Call
Feb 23, 2021, 11:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good morning, and welcome to the Q4 2020 Frank's International N.V. Earnings Conference Call. My name is Nomura, and I'll be the operator for today's call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. [Operator Instructions]

I'll now turn the call over to Ms. Melissa Cougle. Melissa, you may begin.

Melissa Cougle -- Senior Vice President and Chief Financial Officer

Good morning, and welcome to Frank's International conference call to discuss our fourth quarter and full-year 2020 earnings. Our speakers today, as shown on Slide 2 of the earnings presentation, are Mike Kearney, Chairman, President and Chief Executive Officer; and myself, Melissa Cougle, Senior Vice President and Chief Financial Officer. Joining us for the Q&A portion of today's call will be Steve Russell, Senior Vice President of Operations.

A presentation has been posted on our website that we will refer to throughout this call. If you'd like to view this presentation, please go to the Investors section of our corporate website at franksinternational.com.

On today's call, Mike will provide an overview of our fourth quarter results, highlight some of our 2020 achievements and discuss some of our technological highlights during the fourth quarter. I will then review the financial performance for the fourth quarter and provide some thoughts on 2021. We will close with a question-and-answer session.

Before we begin commenting on our fourth quarter and full-year 2020 results, there are few legal items that we would like to cover beginning on Slide 3. First, remarks by Company representatives may refer to or contain forward-looking statements. Such remarks are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. Such statements speak only as of today's date. The Company assumes no responsibility to update any forward-looking statements as of any future date.

The Company has included in its SEC filings cautionary language identifying important factors that could cause actual results to be materially different from those set forth in any forward-looking statements. A more complete discussion of these risks is included in the Company's SEC filings, which may be accessed on the SEC's website or on our website at franksinternational.com.

Please note that any non-GAAP financial measures discussed during this call are defined and reconciled to the most directly comparable GAAP financial measure in the fourth quarter 2020 earnings release, which was issued by the Company.

I will now turn the call over to Mike.

Michael C. Kearney -- Chairman, President, and Chief Executive Officer

Thank you, Melissa. We appreciate everyone joining us for the call today. Turning to Slide 4, we delivered solid fourth quarter results, with total revenue increasing 14% sequentially to just over $96 million. From an adjusted EBITDA standpoint, we were able to move the Company back into positive territory and what we believe to be the bottom, with adjusted EBITDA increasing to $4.6 million. From an operational perspective, we experienced improved customer activity levels, primarily in our Tubular Running Services segment.

We witnessed multiple rigs going back to work in several core operating areas after previously being sidelined due to COVID-19 pandemic. Additionally, we experienced an improving revenue backdrop in our U.S. onshore business, which mirrored the average U.S. land rig count, increasing over 20% in the fourth quarter.

In our Tubular segment, revenue decreased slightly in the fourth quarter, mostly due to large tubular deliveries in the prior-quarter. With that said, we were able to make progress on our goal of international expansion in this segment. Our Tubular product and drilling tools sales increased internationally, which partially offset the fourth quarter revenue decline in the U.S. market.

In our Cementing Equipment segment, revenue increased slightly in the fourth quarter, mostly due to the improvement in our U.S. land business. More importantly, we made substantial progress on our goal of international expansion in this segment. And I'm proud to report that our team delivered a 35% year-over-year increase in international revenue. The success of our international expansion partially offset year-over-year U.S. market revenue declines, which have not recovered back to pre-COVID levels. Our international expansion improved fourth quarter profitability and helped drive margins back toward prior-peak levels.

Before covering specific geography highlights, I would like to provide an update on the COVID-19 situation. We were encouraged that the COVID virus impact lessened during the fourth quarter. This was primarily due to the fact that lockdowns were lifted and borders in many countries were reopened. This will add many of our customers to return to work, rigs to be redeployed and activity levels to increase. Areas where we witnessed the greatest improvement in the fourth quarter occurred in regions that were some of the hardest hit by the pandemic during the prior two quarters, such as Africa. Contrary to all of these positive signs, we continued to contend with many countries and operators instituting additional layers of travel protocols and restrictions, which have reduced efficiencies and make it more challenging to operate.

As you know, our customer base spans the globe and each of the geographies in which we operate face differing degrees of COVID-related disruptions. We continue to see a wide range of customer responses even though many of our customers are on their way back to pre-COVID levels of activity. Even though we experienced improved customer activity levels in the fourth quarter, we continue to be prepared to flex our operations up or down as the COVID situation warrants. At this point, our greatest concern revolves around infection rates from these highly contagious new strains of COVID. Clearly, it is not within our control, if we see new countrywide lockdowns and border closings. We remain in active communication with our customers, and we are working closely with them as we plan our operations. We will continue to update the market on how COVID-19 is impacting our business.

Now I would like to describe some of our Q4 highlights, as noted on Slide 5, particularly, our rig activity level movements in each of our geographies and some initial thoughts about 2021 activity levels. In our Asia-Pacific region, activity levels remain steady with core customers in Indonesia, Malaysia and China. While the average offshore rig count in this region decreased over 20% sequentially, this was mostly driven by reduced activity in India, more of a commoditized market in which we choose not to participate. We did experience an initial uptake in our cementing operations in this region, with several jobs executed in multiple countries during the fourth quarter. In line with our strategy of expanding our cementing operations internationally, we will remain focused on building upon this momentum over the coming quarters.

Looking to 2021, we see flattish activity levels during the first quarter, with increases across our business lines beginning in the second quarter of the year. We remain focused on expanding our cementing and drilling tools work in this region, as well as gaining additional market share for our core TRS work. The Middle East was our most challenged region during the fourth quarter, primarily due to lower rig count. This market share resilience through the first several months of the pandemic, as we gained additional market share with our existing customer base. In the last quarter of the year, we saw those gains flatten out and were affected by a 19% average sequential decline in rig count in the fourth quarter. We are expecting rig counts to improve later in the year, which should position us nicely for year-over-year meaningful growth.

In our Europe and Africa region, activity levels bottomed in the third quarter and improved significantly as multiple rigs returned to work in the fourth quarter. Our Europe and Africa region was our most improved area in the fourth quarter, and we believe that we will be on track to achieve pre-COVID revenue levels in 2022, with additional rig work commencing in the second quarter of this year. In Q4, our North American offshore region benefited from improved activity levels in the US Gulf of Mexico with additional rig deployments in the Caribbean and offshore Mexico. These improvements were partially offset by continued weakness in the Eastern Canada offshore market.

We continue to be well-positioned in all core markets within our North American offshore region and are well prepared to service our customers. We do see some customer activity dropping slightly during the first quarter in this region, and then our strong recovery beginning in the second quarter and continuing throughout the year, especially in the Caribbean and offshore Mexico. The U.S. onshore market rebounded nicely throughout the fourth quarter, with average U.S. land rig count being up over 20% sequentially and ended the year at just over 350 rigs.

Interestingly, there was no end of year seasonal downturn in U.S. land, as the rig count continue to rise through December and into January, reaching over 380 rigs at the end of last month. As we previously discussed, our U.S. land strategy focused on cost control and appropriately right-sizing the business to ensure we can flex our operations up further as the market continues to improve. The increased rig count and associated customer activity levels returned our U.S. land business to positive adjusted EBITDA in the second half of the fourth quarter and leaves us well-positioned for further improvement in 2021.

Finally, our South America region, although small, exited the year showing declines in keeping with the international rig count movement. We are seeing notable improvement with anchor contracts in the region, beginning in the first quarter and significant tendering activity which Frank's is aggressively pursuing. Despite the challenges brought about in 2020, Frank's had several areas of notable achievement. The highlights of which are on Slide 6.

As we moved into 2020, our organization set out to achieve several important goals that would positively reshape our organization and position us well for 2021 and beyond. Our goals included properly rightsizing our operational footprint, in line with changing market conditions, aggressively reducing our overall cost structure, generating free cash flow, and deploying value-creating technologies that will increase efficiency, reliability and safety for our customers. Despite the challenges that the COVID pandemic created, I'm very proud to report that not only did we achieve our goals for 2020, in many cases we exceeded them.

As many of you know, our profit Improvement program originally called for indirect and SG&A cost savings of $30 million in 2020 and another $15 million in 2021. I'm pleased to announce that we exceeded our cost reduction goals and achieved a 27% year-over-year reduction in our overall cost structure, inclusive of operational cost savings and indirect operational, and SG&A support cost. Melissa will elaborate more on the details of our cost reduction efforts later in the call, but I want to recognize and thank our organization for accomplishing this difficult but necessary achievement, especially during these challenging times created by the COVID pandemic.

As I referred to earlier, we combined our Middle East and Asia Pac operating regions and streamlined other operations to allow us to quickly flex our field strength up or down in line with market conditions. This positions our organization well for accelerated margin expansion in 2021 and beyond, as market conditions most likely continue to improve. Protecting our balance sheet was another major priority for our organization in 2020. Melissa will speak in more detail on our current liquidity position, but I'm very happy to report that despite a very challenging year, we exited 2020 in a position of financial strength matched by very, very few companies.

The operational cost cuts we completed, along with our disciplined approach to capital spending, enabled us to generate positive free cash flow in the fourth quarter and for the full year. Our strong liquidity position and debt-free balance sheet positions Frank's to take advantage of potential opportunities in the marketplace, as energy demand continues to rebound.

Finally, from a technology perspective, we stayed focused on our theme of innovation with a purpose and creating services and products that are responsive to our customers' needs. We began 2020 with the reorganization of our R&D and technology efforts with the renewed purpose of prioritizing projects, with the greatest near-term potential of commercialization and return on investment. We also became more focused on projects that incorporate digitalization to increase efficiency, reliability and safety. Our investment in equipment and software enabling remote operation keeps our employees and most of our customers and other service firms out of the red zone.

The next generation of our Intelligent Connection Analyzed Make-up System or iCAM, is called iCAM predictive. This technology provides automated evaluation of connection make-up data and seamlessly integrates with other Frank's TRS solutions. Additionally, our HR tool, Data logger, Harmonic Isolation tool enables more efficient data acquisition for effective downhole decision making. This product has been recognized by multiple customers for increased efficiency and meaningful cost savings.

Finally, our simplified multi-machine control system has now been deployed with several customers. This advanced technology has been recognized for reducing the headcount on a rig. which greatly increases safety and reduces our cost, as well as those of our customers.

And to top it off, as we mentioned last quarter, we were recognized as finalists once again at the World Oil Awards with three different technologies. Our organization is extremely proud of the fact that our SKYHOOK device took home the award for best health, safety, environment, sustainable development in the offshore category. This further demonstrates our focus on ESG efforts through technological innovation. In short, it was a big year for the commercialization of impactful technologies at Frank's. It's exciting to bring technologies to the market that reduce costs for Frank's, as well as for our customers, while increasing efficiency, operational reliability and improving safety.

Lastly, I would like to call out our successful deployment of our Remote CAM Viewer on multiple jobs in the U.S. onshore market. Our Remote CAM Viewer allows for the operation of the tong and the monitoring of the torque turn graphs to be performed remotely. This reduces cost by enhancing process efficiency and once again improved safety by reducing personnel on location. The Remote CAM Viewer enables one technician to communicate connection integrity on a real-time basis, decreasing potential errors and reducing personnel on location by 50%. This technology is a positive needle mover for our customers.

Another new technology focused on the U.S. onshore market is our BIG EASY composite cement retainer. We recently completed several successful jobs with this tool, which focuses on increasing drilling efficiency and enhancing wellbore integrity. Our isolation plug design has a large bore area that enables higher pump rates, reducing rig time, while at the same time, reducing the risk of erosion and the loss of seal integrity.

Our isolation plug is easily drillable with any style bit and has an improved slip retention design, enabling it to perform well even in the most difficult well conditions. In short, our isolation plug design has enabled several of our customers to experience quick cost effective and efficient completion of remedial submitting operations.

Now, I'll turn the call over to Melissa Cougle, who will discuss our financial results.

Melissa Cougle -- Senior Vice President and Chief Financial Officer

Thank you, Mike. Referring to Slide 7, despite a 14% growth in the fourth quarter, the Company did see an overall revenue decline of 33% year-over-year, driven by the tremendous reduction in rig activity. This was brought about by the pandemic and affected both domestic and international rig count. Mike mentioned the drivers of our strong fourth quarter performance, and we are optimistic these results indicate we are seeing a recovery pattern emerge, positioning us for further growth in 2021, simply stated, we believe the worst is behind us.

Full-year adjusted EBITDA was $9 million and fourth-quarter adjusted EBITDA totaled $4.6 million, representing a substantial improvement compared to the prior quarter. This also generated an incremental EBITDA margin of approximately 47%, improved customer activity levels, especially in our Tubular Running Services segment, and continued realization of our cost reduction measures enabled our organization to move adjusted EBITDA back in the positive territory compared to the prior two quarters.

The Company made clear our ambitious goal of achieving positive cash flows for the year, and we are proud to close out 2020 meeting that goal. We produced $39.7 million of operating cash flows, which enabled $11.2 million of free cash flow generation. We were able to enhance free cash flow generation in the fourth quarter, particularly due to improved customer activity levels, strong working capital management and a continued focus on limiting capital spend.

As of year-end, the Company had cash and cash equivalents of $210 million and no outstanding debt on its credit facility.

Turning to Slide 8, our TRS revenue totaled $65 million, generating $3.8 million on adjusted EBITDA during the fourth quarter. Our TRS segment benefited from the redeployment of previously sidelined rigs and improving backdrop in our U.S. land business. Our greatest area of regional improvement was in Africa, which bottomed in the third quarter and experienced a strong rebound in the fourth quarter with multiple rigs returning to work. Our North American offshore region benefited from strengthening in the Caribbean and increased activity levels in offshore Mexico.

In the Tubular segment, as presented on Slide 9, third-quarter revenue totaled $15.9 million, a decrease of 4% sequentially and 25% year-over-year. This slight sequential decrease in revenue was primarily due to strong tubular product sales in the prior quarter, which was partially offset by stronger tubular product and drill tool sales internationally during the fourth quarter.

Segment adjusted EBITDA totaled $3.9 million or 25% of revenue in the fourth quarter. This compared to $1.8 million or 11% of revenue in the prior quarter. The enhanced profitability in our Tubular segment primarily reflects increased sales internationally and realization of fabrication and manufacturing efficiencies that have been initiated alongside our profitability improvement plan.

Concluding the segments on Slide 10, Cementing Equipment segment revenue for the fourth quarter totaled $15.5 million, which was a slight increase sequentially and largely due to U.S. land business recovery. The 38% year-over-year decline was driven by reduced customer activity levels in both U.S. land and U.S. offshore markets. International growth in this segment increased 35% year-over-year and has played a meaningful role in enhancing segment profitability, which was also improved on the back of many operational cost reductions stemming from our business reorganization conducted in 2020. Segment adjusted EBITDA totaled $4 million or 26% of revenue in the fourth quarter, compared to $3.4 million or 23% of revenue in the prior quarter, resulting in an incremental EBITDA margin of approximately 120%.

Turning to Slide 11, we have spoken throughout the year about our focus on redefining our cost structure and feel 2020 was a pivotal year for Frank's in this regard. We achieved an overall 27% reduction in costs or $143 million year-over-year. $88 million of those reductions could be characterized as relating to our direct operational cost base, although some of our cost reduction initiatives focused in this area. Our core efforts have been to permanently reduce our more fixed indirect support cost, including both cost of revenues and SG&A.

The entire Company was engaged in this effort since November of 2019, and we achieved over $55 million of savings year-over-year in this cost category. The vast majority of which is permanent. We have completed virtually all of our specific cost reduction initiatives, and we'll see the full-year benefit of those reductions in 2021 along with additional efficiencies we believe will be gained during the year from our ERP implementation, which is going live presently. And looking forward and referenced on Slide 12, we believe that activity levels troughed during the third quarter. And we do not see signs of further weakening, barring any unexpected pandemic effects.

We expect the activity level improvement seen in the fourth quarter to hold in the first quarter of 2021 and begin to build strongly much more in the second quarter. We have clear visibility that certain major projects will commence giving us some confidence that the planned improvement beginning in the second quarter will materialize and provide a backdrop for full-year revenue growth in the high-single digits.

Enabled by our PIP effort, we believe that the Company has a path to achieve double-digit adjusted EBITDA margins in 2021, with this revenue growth, benefited by the full-year effect of our cost savings programs. We also intend to maintain our strong balance sheet and have once again set aggressive working capital improvement goals to stretch ourselves and provide for positive free cash flow for the year. We will also hold our discipline around capital deployment and expect that 2021 CapEx should be approximately $25 million.

With that, I will turn the call back over to Mike for a few closing comments before we open up the lines for Q&A.

Michael C. Kearney -- Chairman, President, and Chief Executive Officer

Thank you, Melissa. Before we closeout today's call, I would like to reiterate a few key points. First, Frank's has a solid operational platform that positions our organization well for 2021 and beyond. Our Tubular Running Services segment experienced substantial improvement in the fourth quarter and we expect additional growth in 2021.

In addition, further international expansion in our Tubulars and cementing Equipment segments will be drivers of enhanced revenue and profitability as well. Second, the achievement of our cost reduction targets transform the operational cost structure of our organization. The vast majority of those cost reductions are complete, and we will see the full benefits of all these efforts in 2021. Third, despite a very challenging year created by covid-19 pandemic, we executed our business strategy with one of the best safety records in the Company's history.

Finally, despite the difficult year, our operational execution, capital discipline and cost reduction efforts enabled us to further strengthen our balance sheet. We have one of the strongest balance sheets in the entire oilfield service universe, and that places us in an enviable position to be able to act when potential opportunities arise.

In closing, I would like to thank all of our employees for their hard work and dedication in 2020. The difficulties we face provided an opportunity for our employees to rise to the occasion yet again, and deliver not only excellent service quality for our customers, but also one of the best safety records in the Company's history.

With that operator, we're now ready to open the line for Q&A.

Questions and Answers:

Operator

Thank you. We will now begin the question-and-answer session. [Operator Instructions] And our first question comes from Ian McPherson from Simmons. Please, go-ahead. Your line is open.

Ian McPherson -- Simmons -- Analyst

Good morning, Team. Congrats on the really good results and outlook here.

Michael C. Kearney -- Chairman, President, and Chief Executive Officer

Thanks.

Ian McPherson -- Simmons -- Analyst

Yeah. I know cost cuts are necessarily enjoyable, but this is obviously a great outcome with the path forward. And so I wanted to dig in a little bit. We saw in the incrementals that play out for this year, the 47% sequential consolidated incrementals for Q4 were impressive. And I know that the Tubulars business, in particular, is historically lumpy and moves around a lot from quarter-to-quarter, but when we look at the other two, TRS and Cementing, especially Cementing has really moved up into the mid-20s EBITDA margins. I assume that your outlook assumes that or better through 2021? And then also maybe just a little more color on what you're thinking about the trajectory for TRS EBITDA margins as we move past Q1 and into the growth quarters beyond Q1?

Michael C. Kearney -- Chairman, President, and Chief Executive Officer

Okay. Why don't we take those in reverse order? So I'll let Steve comment on TRS first.

Steve Russell -- Senior Vice President, Operations

Yeah. I think, operationally, TRS business shows incremental margins of anywhere sort of 40% to 60%. That's what falls through. So you can sort of calculate the math based on that. The tubular business is a little bit lower depending on the mix of that business, as you know, that's two -- is a sales business and a service business embedded in there that have different incremental margins, but a little bit lower than on the TRS business.

Melissa Cougle -- Senior Vice President and Chief Financial Officer

Yeah, I'll add to that on the Cementing side as well, Ian. So we actually have a little bit of product business in the Cementing side as well, and some of the cementing growth this year, particularly in Q1, will be coming from U.S. land, which is a little bit of lower margin as well. So I think we will end up for the year, probably looking in that range that you're seeing in Q4, maybe a slight degradation but somewhere in that range. I think the difference is, what do we see here in Q1, we're continuing to find that trajectory.

Ian McPherson -- Simmons -- Analyst

That's helpful. Thank you, both. And can you also remind me, if you want to again kind of generalize a little bit within TRS and Cementing, what the general mix is now between offshore and inland on current run rate?

Steve Russell -- Senior Vice President, Operations

Yeah, in the TRS business, it runs typically 70% to 80% offshore, obviously, 20% to 30% land. I don't have the latest cementing numbers, and that's obviously being driven by the recovery in U.S. land that we have been seeing.

Melissa Cougle -- Senior Vice President and Chief Financial Officer

I'm doing some quick math here, it looks like it's probably at least give/take 20%. I think you said 20%[Phonetic], I was busy doing my math. 20% to 30% land and 70-80% offshore.

Steve Russell -- Senior Vice President, Operations

Yeah. One point related, Ian, that I would like to emphasize is on the Tubular side, with those two businesses being so different, the drilling tools and the actual tubular business, we're projecting we'll continue to see volatility in that as we move into this year. Overall, we feel pretty good about it, but there will be lumpiness there. So I'm glad you pointed that out.

Ian McPherson -- Simmons -- Analyst

Yeah. Okay, well, Mike, now with improved visibility for this year, your balance sheet, we can get still pretty good comfortable free cash flow for this year. Where are we now with seeking more confidently about deploying capital either back into the business or resuming a dividend program?

Michael C. Kearney -- Chairman, President, and Chief Executive Officer

Yeah, I think dividends are still a little ways off. Of course, it would be nice in the future to reinstitute a small dividend, but we're not even actually thinking about that right now. In terms of the capex, we're going to try to keep our capex pretty much inline this year with last year. It's really a challenge. We have so many good new technologies and they do require capital. This isn't just a steady-state business. We're always trying invent with a purpose. The things we've come up with over the last year, but customers love, but it takes capital to build them. So it's that how our active trying to roll out new technologies, generally having higher margins and not spend a lot of money at the same time. So it doesn't fit neatly in the same bag, but we're going to do our best to reinvest in the business wisely is all I can say.

Ian McPherson -- Simmons -- Analyst

Okay. Thanks, Mike. I'll pass it over.

Operator

Thank you. Our next question comes from Taylor Zurcher. Please, go-ahead. your line is open.

Taylor Zurcher -- Tudor, Pickering, Holt & Co. -- Analyst

Hey, good morning. And let me echo Ian on congrats for a great quarter. Our first question is with respect to the 2021 guidance, you're basically framing things at high single-digit revenue growth year-over-year. I'm wondering if you could help us think about the revenue growth you're expecting that's embedded in that forecast on a segment level? Which ones might grow faster than high-single digits rate? Which one might grow lower than that? And then specific to TRS, I'm just curious as we think about the ramp Q2 and beyond, if you could point to any specific regions that are driving the bulk of that growth?

Melissa Cougle -- Senior Vice President and Chief Financial Officer

Yeah. So I think if we start with just the growth you could expect that TRS is probably going to be the most stable if you will. We've got the international expansion. Again, smaller it's -- are we going on numbers or percentages, but I think you could expect the high-single digits sort of across the board, a little bit more coming in on the smaller segments as we are continuing the international footprint expansion. And probably, right in the zone there on the TRS side.

I think your other question around, Taylor, remind me.

Taylor Zurcher -- Tudor, Pickering, Holt & Co. -- Analyst

Just the regional drivers within TRS...

Melissa Cougle -- Senior Vice President and Chief Financial Officer

The regional driver. Yeah, so -- no, it's largely -- I'll let Steve, but it's largely -- Africa is probably our single strongest region for the year.

Steve Russell -- Senior Vice President, Operations

Yeah, I mean, I think as everybody is aware, Africa all shut down here during Q2, Q3 2020 with COVID hitting. We've seen a wake-up in Africa in Q4, and we sort of continue to expect that as we go through Q1, and then, particularly in Q3 -- Q2 sorry, Africa waking back up again. We've also got some projects starting up in Australia and Brazil, where we have line of sight to some fairly substantial projects starting up in Q2 onwards.

Taylor Zurcher -- Tudor, Pickering, Holt & Co. -- Analyst

Okay. Great. Thanks. And specific to TRS again, it feels like a lot of the growth in Q4, and probably, a lot of the activity in Q1 is attributed to some COVID and due slow down activity that's starting to come back. And so, I'm curious for the full year 2021, are you starting to see operators progress forward with deepwater projects that maybe didn't exist prior to COVID or there are real true incremental activity, or is it still kind of just resumption of activity that has slowed down due to COVID?

Steve Russell -- Senior Vice President, Operations

Yeah, I think there's a little bit of both in there, yeah. The rebound we've seen to date was really sort of COVID projects coming back on stream again. But we have seen and are talking to clients now about projects restarting. Again, I'll call out the Eastern Mediterranean here where it was totally dead last year, but now clients are looking and starting to plan projects in that part of the world where those would typically kick in. We're expecting somewhere around Q2 and Q3.

Taylor Zurcher -- Tudor, Pickering, Holt & Co. -- Analyst

Got it. Thanks for the answers. That's it for me.

Operator

Thank you. Our next question comes from Jason Bandel from Evercore. Please go ahead. Your line is open.

Jason Bandel -- Evercore -- Analyst

Hi, good morning.

Michael C. Kearney -- Chairman, President, and Chief Executive Officer

Good morning

Jason Bandel -- Evercore -- Analyst

My first question, I guess, I'll start on the U.S. land side of the business. I know you guys spend a lot of time and effort pulling out costs and rightsizing locations in 2020. And the market, obviously, started to recover off at the very low base. How do you guys balance trying to be opportunistic with the ability to keep your cost structure low and in place?

Steve Russell -- Senior Vice President, Operations

When we went into the downturn in U.S. land, we really wanted to keep ourselves where we had sort of an operational footprint where we could service the basins, but then sort of pull the cost down. And we did that with a number of mechanisms, primarily focusing on sort of multiskilling people and having folks that generally work in a base going out and doing jobs that gives us the sort of footprint and the base in each of those basins to rebound back up again. And I mean, obviously, as everybody has been watching the rig count, we've seen it bounce back again. That started in the Permian and the Eagle Ford, but we've now started seeing recovery in most of the other basins. So we're sitting, we think, quite well to pick up that activity in all basins as it picks back up again here.

Jason Bandel -- Evercore -- Analyst

Okay. That makes sense. And then on the technology side, I know, Mike, you spent some time on the call highlighting some of the commercialized technologies that you guys deployed into the field. Can you talk about your approach to monetizing your technology development and what customer adoption rates look like, especially for some of the remote operated technology that you guys are deploying?

Michael C. Kearney -- Chairman, President, and Chief Executive Officer

Yeah, I'll start it off and will let Steve pick up. The customers really appreciate the remote nature of a lot of our technologies, most of -- not all but most of what we are working on now focuses on safety, getting people out of the red zone. Even on land, this Remote CAM viewer basically takes two positions down to one. So that's a good example of the way we can cut cost and try to remain competitive, and provide the customer with some additional advantages. But it's very exciting, these new technologies. Of course, the industry is slow to adopt. So we usually go out with several field trials, and there's more and more uptake. So I wish we could flip a switch and have all customers adopt at the same rate, but that's not reality. But we're really seeing very, very good uptake from our customers.

So it's back to that balancing act of, I think we're probably going to be more constrained on -- in a way on the capital we want to devote compared to customer uptake. But as I said, that's the tight rope we need to walk. And of course, it takes time to build these devices. There's lead time as well. So once again, we do sales and operational planning. We're in close contact with the customers. So I think we've done a pretty good job of calibrating kind of the rollout of the technology, and spending the capital with the customer uptake. So Steve, I don't know if you want to add anything to that?

Steve Russell -- Senior Vice President, Operations

Yeah. I think, in Mike's prepared comments there, there was commentary on some sort of decrewing type technologies that we're putting in there, and I think COVID has accelerated the demand for that. But I think that we'll stick in a post-COVID world, a demand for having less people to be able to provide operations on a rig site. So like Mike mentioned, we're pushing those out quite aggressively, and we're fairly hopeful that on customer uptake on those.

Melissa Cougle -- Senior Vice President and Chief Financial Officer

Yeah, and maybe a final comment to chime in here and say, it is on our objective list this year to -- there's several companies that are technologically sort of -- that specialize in monetization, and they have what's called a Vitality Index. We have a Vitality Index as well. Although, admittedly, we're looking to sharpen that metric, which will help to guide us off on customer, like formal customer adoption rates in the future. So it's part of our wave of the future to really get sharper on the ability to speak to those metrics.

Jason Bandel -- Evercore -- Analyst

Thanks that was helpful. Let me -- I'll try to squeeze one more in here, I guess, coming out of the downturn and so far in the early stages of the recovery, can you talk about if the competitive landscape has changed or evolved at all? And obviously, you have a structurally smaller U.S. land market and you touched on your prepared remarks about customer responses being varied internationally. How are you kind of seeing this customer competitive landscape evolve here?

Steve Russell -- Senior Vice President, Operations

Yeah. Again, I think it's quite different in the different markets that we operate here. You mentioned U.S. land specifically. I mean, there has been some competitor consolidation on US land, but it still remains a highly competitive marketplace there. I feel we have seen bottoming pricing in U.S. land, and we're sort of testing some price increases as we speak in U.S. land to see if they stick. In the international marketplace, again, there are some regional competitors in there in certain markets. But on a sort of a global basis, our main competitor is still out there. And I wouldn't say there has been any material change from what we've seen in the past on how we compete with them.

Jason Bandel -- Evercore -- Analyst

Okay. Thanks for the time. I appreciate the answers.

Melissa Cougle -- Senior Vice President and Chief Financial Officer

Thank you.

Operator

Thank you. And I'm not showing any further questions at this time. I would like to turn the call over to Mr. Michael Kearney for closing remarks.

Michael C. Kearney -- Chairman, President, and Chief Executive Officer

Okay. Thank you, operator. I'd like to close by reinforcing our unwavering commitment to safety and remaining the high-value, low-risk provider of services and products to our customers. We look forward to updating you on our progress and performance in our first quarter call, which will be in May. Thanks to everyone to be on the call and your interest in Frank's. Goodbye.

Operator

[Operator Closing Remarks]

Duration: 42 minutes

Call participants:

Melissa Cougle -- Senior Vice President and Chief Financial Officer

Michael C. Kearney -- Chairman, President, and Chief Executive Officer

Steve Russell -- Senior Vice President, Operations

Ian McPherson -- Simmons -- Analyst

Taylor Zurcher -- Tudor, Pickering, Holt & Co. -- Analyst

Jason Bandel -- Evercore -- Analyst

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