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Oceaneering Announces Record First Quarter Earnings

-- Reaffirms 2012 EPS Guidance of $2.45 to $2.65

-- Initiates Second Quarter 2012 EPS Guidance of $0.64 to $0.68

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HOUSTON, April 25, 2012 /PRNewswire/ -- Oceaneering International, Inc. (NYSE: OII) today reported record first quarter earnings for the period ended March 31, 2012.  On revenue of $594.9 million, Oceaneering generated net income of $51.5 million, or $0.47 per share.  During the corresponding period in 2011, Oceaneering reported revenue of $470.4 million and net income of $42.1 million, or $0.39 per share.

Summary of Results

(in thousands, except per share amounts)




                       Three Months Ended              


                March 31         

  Dec. 31 


2012

2011

2011

Revenue

$594,893

$470,420

$574,197

Gross Profit

123,303

98,801

130,746

Income from Operations

75,987

61,067

82,468

Net Income

51,455

$42,070

$58,317





Diluted Earnings Per Share

$0.47

$0.39

$0.54


Year over year, quarterly earnings per share (EPS) improved as all business segments achieved higher operating income, led by Remotely Operated Vehicles (ROV).  Sequentially, quarterly EPS declined, as anticipated, principally due to a reduction in operating income from Subsea Products.

M. Kevin McEvoy, President and Chief Executive Officer, stated, "Our EPS was up over 20% compared to the first quarter of 2011 and our outlook for the rest of this year remains very positive.  We continue to forecast our 2012 EPS to be in the range of $2.45 to $2.65, another record earnings year.  For our services and products, we expect continued international demand growth and a moderate rebound in overall activity in the U.S. Gulf of Mexico (GOM).

"Year over year, quarterly ROV operating income improved on the strength of higher demand in most areas of the world, particularly in the GOM and off West Africa.  Our ROV days on hire rose 17% and fleet utilization increased to 79% from 71% a year ago.  During the quarter we put five new systems into service and retired two.  At the end of the quarter we had 270 vehicles in our ROV fleet, an increase of 10 from March 2011.  For the balance of 2012, we expect to place 15 to 20 more new systems into service and retire three.

"Compared to the first quarter of 2011, Subsea Projects operating income was higher due to the commencement of the field support vessel services contract with BP offshore Angola and the addition of the Ocean Patriot to our GOM vessel fleet.

"Sequentially, quarterly Subsea Products operating income declined on lower demand for our subsea hardware and Installation and Workover Control System (IWOCS) services, primarily due to project timing.  Our Subsea Products backlog at quarter-end was $402 million, up from $382 million at the end of March and December of 2011.  Since the end of the quarter, we announced the award of a large umbilical contract that added $70 million to our products backlog.

"For the second quarter of 2012, we expect improvements in demand and operating results for all of our oilfield business segments.  We are forecasting EPS of $0.64 to $0.68.

"Our liquidity and projected cash flow provide us with ample resources to invest in Oceaneering's growth.  At the end of the quarter our cash exceeded our debt.  During the quarter we generated EBITDA of $116 million and for 2012 we anticipate generating at least $550 million.  We fully intend to pursue organic growth and acquisition opportunities to expand Oceaneering's asset base and earnings capability.

"Today we announced an increase in our regular quarterly cash dividend to $0.18 from $0.15 per share.  This underscores our confidence in Oceaneering's financial strength and future business prospects. 

"Looking beyond 2012, our belief that the oil and gas industry will continue to invest in deepwater projects remains unchanged.  Deepwater remains one of the best frontiers for adding large hydrocarbon reserves with high production flow rates at relatively low finding and development costs.  With our existing assets, we are well positioned to supply a wide range of the services and products required to support safe deepwater efforts of our customers."

Statements in this press release that express a belief, expectation, or intention are forward looking.  The forward-looking statements in this press release include the statements concerning Oceaneering's:  expectation for the balance of 2012 of placing 15 to 20 new ROVs into service and retiring three; 2012 EPS range forecast; expectation of record earnings in 2012 based on continued international demand growth and a moderate rebound in overall activity in the GOM; backlog, to the extent that backlog may be an indicator of future revenue or profitability; expected improvements in demand and operating results for all of its oilfield business segments for the second quarter of 2012; second quarter 2012 forecasted EPS range; expectation that its liquidity and projected cash flow will provide ample resources to invest in the company's growth; anticipated  2012 EBITDA; intent to pursue organic growth and acquisitions to expand its asset base and earnings capability;  belief that the oil and gas industry will continue to invest in deepwater projects; and belief that deepwater remains one of the best frontiers for adding large hydrocarbon reserves with high production flow rates. 

These forward-looking statements are made pursuant to the safe harbor provisions of The Private Securities Litigation Reform Act of 1995 and are based on current information and expectations of Oceaneering that involve a number of risks, uncertainties, and assumptions.  Among the factors that could cause the actual results to differ materially from those indicated in the forward-looking statements are risks and uncertainties related to:  industry conditions; prices of crude oil and natural gas; Oceaneering's ability to obtain, and the timing of, new projects; changes in customers' operational plans or schedules; contract cancellations or modifications; difficulties executing under contracts; and changes in competitive factors.  Should one or more of these risks or uncertainties materialize, or should the assumptions underlying the forward-looking statements prove incorrect, actual outcomes could vary materially from those indicated.  For a more complete discussion of these and other risk factors, please see Oceaneering's annual report on Form 10-K for the year ended December 31, 2011, filed with the Securities and Exchange Commission.  

We define EBITDA as net income plus provision for income taxes, interest income/expense, net, and depreciation and amortization.  EBITDA is a non-GAAP financial measure.  We have included EBITDA disclosures in this press release because EBITDA is widely used by investors for valuation and comparing our financial performance with the performance of other companies in our industry.  Our presentation of EBITDA may not be comparable to similarly titled measures other companies report.  Non-GAAP financial measures should be viewed in addition to and not as an alternative for our reported operating results or cash flow from operations or any other measure of performance as determined in accordance with GAAP.  For a reconciliation of these EBITDA amounts to the most directly comparable GAAP financial measures, please see the attached schedules.

Oceaneering is a global oilfield provider of engineered services and products, primarily to the offshore oil and gas industry, with a focus on deepwater applications.  Through the use of its applied technology expertise, Oceaneering also serves the defense and aerospace industries.

For further information, please contact Jack Jurkoshek, Director Investor Relations,
Oceaneering International, Inc., 11911 FM 529, Houston, Texas 77041;
Telephone 713-329‑4670;
E-Mail investorrelations@oceaneering.com.  A live webcast of the company's earnings release conference call, scheduled for Thursday, April 26, 2012 at 11:00 a.m. Eastern, can be accessed at www.oceaneering.com/investor-relations/.

 

OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES








CONDENSED CONSOLIDATED BALANCE SHEETS



















Mar. 31, 2012


Dec. 31, 2011





(in thousands)

ASSETS






Current Assets (including cash and cash equivalents of $127,492






    and $106,142)


$           973,067


$           984,122


Net Property and Equipment


948,622


893,308


Other Assets


532,823


523,114



TOTAL ASSETS


$        2,454,512


$        2,400,544















LIABILITIES AND SHAREHOLDERS' EQUITY






Current Liabilities


$           525,994


$           501,375


Long-term Debt


100,000


120,000


Other Long-term Liabilities


216,563


221,207


Shareholders' Equity


1,611,955


1,557,962



TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY


$        2,454,512


$        2,400,544

CONDENSED CONSOLIDATED STATEMENTS OF INCOME










For the Three Months Ended



Mar. 31,


Mar. 31,


Dec. 31,



2012


2011


2011



(in thousands, except per share amounts)








Revenue


$     594,893


$         470,420


$          574,197

Cost of services and products


471,590


371,619


443,451

Gross Profit


123,303


98,801


130,746

Selling, general and administrative expense


47,316


37,734


48,278

Income from Operations


75,987


61,067


82,468

Interest income


344


167


428

Interest expense


(545)


(147)


(350)

Equity earnings of unconsolidated affiliates, net


804


470


859

Other income (expense), net


(1,473)


(141)


1,792

Income before Income Taxes


75,117


61,416


85,197

Provision for income taxes


23,662


19,346


26,880

Net Income


$       51,455


$           42,070


$            58,317








Weighted Average Number of Diluted Common Shares


108,761


109,002


108,671

Diluted Earnings per Share 


$0.47


$0.39


$0.54









The above Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Income should be read in conjunction with Company's latest Annual Report on Form 10-K.



SEGMENT INFORMATION














For the Three Months Ended





Mar. 31,


Mar. 31,


Dec. 31,





2012


2011


2011





($ in thousands)











Remotely Operated Vehicles

Revenue


$     193,971


$         164,328


$          200,681



Gross Profit


$       66,392


$           55,408


$            69,298



Operating income


$       56,933


$           47,406


$            59,100



Operating margin


29%


29%


29%



Days available


24,246


23,274


24,277



Utilization


79%


71%


79%











Subsea Products

Revenue


$     172,081


$         157,318


$          196,987



Gross Profit


$       46,781


$           41,787


$            53,285



Operating income


$       29,510


$           27,683


$            36,743



Operating margin


17%


18%


19%



Backlog


$     402,000


$         382,000


$          382,000











Subsea Projects

Revenue


$       72,676


$           37,569


$            45,263



Gross Profit


$       11,911


$             5,331


$              9,108



Operating income


$         7,567


$             3,036


$              6,769



Operating margin


10%


8%


15%











Asset Integrity

Revenue


$       93,456


$           58,350


$            66,826



Gross Profit


$       12,230


$             9,397


$            10,888



Operating income


$         6,538


$             5,880


$              6,473



Operating margin


7%


10%


10%











Advanced Technologies

Revenue


$       62,709


$           52,855


$            64,440



Gross Profit


$         7,723


$             6,313


$              9,688



Operating income


$         3,509


$             2,517


$              5,215



Operating margin


6%


5%


8%











Unallocated Expenses

Gross Profit


$      (21,734)


$         (19,435)


$          (21,521)



Operating income


$      (28,070)


$         (25,455)


$          (31,832)











TOTAL

Revenue


$     594,893


$         470,420


$          574,197



Gross Profit


$     123,303


$           98,801


$          130,746



Operating income


$       75,987


$           61,067


$            82,468



Operating margin


13%


13%


14%










SELECTED CASH FLOW INFORMATION








Capital expenditures, including acquisitions


$       92,677


$         109,492


$          308,998


Depreciation and amortization


$       40,588


$           35,437


$            38,479










The above should be read in conjunction with the Company's latest Annual Report on Form 10-K.



RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION












For the Three Months Ended




Mar. 31,


Mar. 31,


Dec. 31,




2012


2011


2011




(in thousands)

Earnings Before Interest, Taxes, Depreciation and







Amortization (EBITDA)








Net Income


$       51,455


$           42,070


$            58,317


Depreciation and Amortization


40,588


35,437


38,479










Subtotal


92,043


77,507


96,796










Interest (Income)/Expense, Net


201


(20)


(78)


Provision for Income Taxes


23,662


19,346


26,880










EBITDA


$     115,906


$           96,833


$          123,598




























2012 Estimates














Low


High






(in thousands)












Net Income


$     265,000


$         290,000




Depreciation and Amortization


165,000


175,000












Subtotal


430,000


465,000












Interest (Income)/Expense, Net


-


-




Provision for Income Taxes


120,000


135,000












EBITDA


$     550,000


$         600,000



SOURCE Oceaneering International, Inc.



RELATED LINKS
http://www.oceaneering.com

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