2014

Oceaneering Announces Record First Quarter Earnings -- Reports First Quarter 2013 EPS Above Guidance

-- Raises 2013 EPS Guidance Range to $3.10 to $3.30

-- Initiates Second Quarter 2013 EPS Guidance of $0.81 to $0.86

HOUSTON, April 23, 2013 /PRNewswire/ -- Oceaneering International, Inc. (NYSE: OII) today reported record first quarter earnings for the period ended March 31, 2013.

On revenue of $718.6 million, Oceaneering generated net income of $74.8 million, or $0.69 per share.  During the corresponding period in 2012, Oceaneering reported revenue of $594.9 million and net income of $51.5 million, or $0.47 per share.

Summary of Results
(in thousands, except per share amounts)

 


 

                       Three Months Ended                   


                March 31,         


  Dec. 31, 


2013

2012


2012

Revenue

$718,552

$594,893


$780,949

Gross Profit

160,375

123,303


172,528

Income from Operations

108,290

75,987


118,750

Net Income

74,849

51,455


$80,602






Diluted Earnings Per Share (EPS)

$0.69

$0.47


$0.74



Year over year, quarterly EPS increased 47% on income improvements from all operating business segments, led by Remotely Operated Vehicles (ROV) and Subsea Products.  Sequentially, quarterly EPS declined, as anticipated, because of a reduction in operating income from Subsea Products as a result of project timing and Subsea Projects due to seasonality in the U.S. Gulf of Mexico (GOM).

M. Kevin McEvoy, President and Chief Executive Officer, stated, "Our first quarter EPS was above our guidance range as we are off to a faster-than-expected start to the year.  This was, to a large extent, attributable to an acceleration of the timing of forecasted work in our Asset Integrity and Advanced Technologies businesses.  All of our business segments performed well, with Advanced Technologies achieving record quarterly operating income.

"Year over year, quarterly ROV operating income improved on the strength of a 13% increase in days on hire, particularly in the GOM and offshore Africa.  Our fleet utilization increased to 83% from 79% a year ago.  During the quarter we put six new systems into service and retired one.  At the end of the quarter we had 294 vehicles in our ROV fleet, an increase of 24 from March 2012.  For the balance of 2013, we expect to place 24 to 29 more new systems into service. 

"Subsea Products operating income was higher due to improved demand for all of our major product lines.  Our Subsea Products backlog at quarter-end was $776 million, compared to $402 million at the end of March 2012 and $681 million at the end of December 2012.

"Subsea Projects operating income increased on a full quarter of work on a field support vessel services contract offshore Angola, which commenced in February 2012.  Asset Integrity operating income improved on increased service demand in most geographic areas in which we operate.  Furthermore, during the first quarter of 2012, Asset Integrity results were adversely affected by a low profit contribution from operations acquired in December 2011 and poor execution on a job in the U.S.  Advanced Technologies operating income was higher in 2013 on an increase in work and operational efficiency on theme park projects and submarine maintenance activity for the U.S. Navy.

"Our outlook for the rest of this year remains very positive.  We continue to anticipate global demand growth for our services and products to support deepwater drilling, field development, and inspection, maintenance, and repair activities. We expect all of our operating business segments will achieve higher income in 2013 compared to 2012, notably:  ROV on greater service demand to support drilling and vessel-based projects; Subsea Products on higher demand for all of our major product lines, led by subsea hardware; and Subsea Projects on a full year of work offshore Angola. 

"Given this outlook and our first quarter earnings performance, we are raising our annual 2013 EPS guidance.  Our new guidance range is $3.10 to $3.30, up from $3.00 to $3.25 previously.  For the second quarter of 2013, we expect improvements in demand and operating results for all of our oilfield business segments.  We are forecasting EPS of $0.81 to $0.86.

"Our liquidity and projected cash flow provide us with ample resources to invest in Oceaneering's growth.  At the end of the quarter, our balance sheet remained conservatively capitalized with $128 million of cash, $90 million of debt, and $1.8 billion of equity.  During the quarter we generated EBITDA of $160 million and for 2013 we anticipate generating at least $690 million of EBITDA.  We fully intend to pursue organic growth and acquisition opportunities to expand Oceaneering's asset base and earnings capability.

"Today we announced a 22% increase in our regular quarterly cash dividend to $0.22 from $0.18 per share.  This underscores our confidence in Oceaneering's financial strength and future business prospects.

"Looking beyond 2013, 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 services and products to safely support the 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:  expected number of ROVs to be placed in service in 2013; statements about backlog, to the extent backlog may be an indicator of future revenue or profitability; positive outlook for the rest of 2013; continued anticipation of global demand growth to support deepwater drilling, field development, and inspection, maintenance, and repair activities; expectation that all of its operating business segments will achieve higher income in 2013 compared to 2012, and the basis for such growth in ROV, Subsea Products, and Subsea Projects; 2013 EPS guidance range; expectation of improvements in demand and operating results for all oilfield business segments in the second quarter of 2013; second quarter 2013 EPS guidance range; belief that its liquidity and projected cash flow provide ample resources to invest in the company's growth; anticipated minimum 2013 EBITDA; stated intent to pursue organic growth and acquisition opportunities to expand its asset base and earnings capability; confidence in its financial strength and future business prospects; 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 at relatively low finding and development costs.  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.  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 risk factors, please see Oceaneering's latest annual report on Form 10-K and quarterly reports on Form 10-Q  filed with the Securities and Exchange Commission. 

We define EBITDA as net income plus provision for income taxes, interest 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 our EBITDA amounts to the most directly comparable GAAP financial measures, please see the attached schedule.

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, entertainment, 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 Wednesday, April 24, 2013 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, 2013


Dec 31, 2012








(in thousands)

ASSETS







Current Assets (including cash and cash equivalents of $127,990 and $120,549)







$

1,191,025



$

1,202,990



Net Property and Equipment







1,060,190



1,025,132



Other Assets







520,406



539,996




TOTAL ASSETS





$

2,771,621



$

2,768,118














LIABILITIES AND SHAREHOLDERS' EQUITY






Current Liabilities






$

598,239



$

617,185



Long-term Debt






90,000



94,000



Other Long-term Liabilities






249,308



241,473



Shareholders' Equity






1,834,074



1,815,460




TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY


$

2,771,621



$

2,768,118














CONDENSED CONSOLIDATED STATEMENTS OF INCOME




















For the Three Months Ended








Mar 31, 2013


Mar 31, 2012


Dec 31, 2012








(in thousands, except per share amounts)














Revenue





$

718,552



$

594,893



$

780,949



Cost of services and products





558,177



471,590



608,421




Gross Profit




160,375



123,303



172,528



Selling, general and administrative expense





52,085



47,316



53,778




Income from Operations





108,290



75,987



118,750



Interest income





190



344



573



Interest expense




(763)



(545)



(1,135)



Equity earnings of unconsolidated affiliates, net




161



804



332



Other income (expense), net





1,390



(1,473)



(853)




Income before income taxes





109,268



75,117



117,667



Provision for income taxes





34,419



23,662



37,065




Net Income





$

74,849



$

51,455



$

80,602














Weighted Average Number of Diluted Common Shares





108,612



108,761



108,558


Diluted Earnings per Share





$0.69



$0.47



$0.74














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






SEGMENT INFORMATION

 












For the Three Months Ended










Mar 31, 2013


Mar 31, 2012


Dec 31, 2012











($ in thousands)











Remotely Operated Vehicles

Revenue




$

229,628



$

193,971



$

226,098







Gross Profit




$

76,154



$

66,392



$

72,836







Operating income




$

65,835



$

56,933



$

61,147







Operating margin




29%



29%



27%







Days available




26,215



24,246



26,599







Utilization




83%



79%



79%

















Subsea Products


Revenue




$

214,005



$

172,081



$

249,553







Gross Profit




$

62,345



$

46,781



$

72,196







Operating income




$

42,779



$

29,510



$

53,866







Operating margin




20%



17%



22%







Backlog




$

776,000



$

402,000



$

681,000















Subsea Projects


Revenue




$

88,455



$

72,676



$

114,728







Gross Profit




$

14,921



$

11,911



$

26,682







Operating income




$

11,620



$

7,567



$

22,160







Operating margin




13%



10%



19%

















Asset Integrity



Revenue




$

114,849



$

93,456



$

114,677







Gross Profit




$

19,039



$

12,230



$

14,465







Operating income




$

12,339



$

6,538



$

7,658







Operating margin




11%



7%



7%

















Advanced Technologies

Revenue




$

71,615



$

62,709



$

75,893







Gross Profit




$

13,308



$

7,723



$

10,279







Operating income




$

8,676



$

3,509



$

5,635







Operating margin




12%



6%



7%

















Unallocated Expenses

Gross Profit




$

(25,392)



$

(21,734)



$

(23,930)







Operating income




$

(32,959)



$

(28,070)



$

(31,716)

















TOTAL





Revenue




$

718,552



$

594,893



$

780,949







Gross Profit




$

160,375



$

123,303



$

172,528







Operating income




$

108,290



$

75,987



$

118,750







Operating margin




15%



13%



15%

















SELECTED CASH FLOW INFORMATION















Capital expenditures, including acquisitions




$

94,177



$

92,677



$

84,050






Depreciation and Amortization




$

49,852



$

40,588



$

49,410

















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


 





RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
























For the Three Months Ended










Mar 31, 2013


Mar 31, 2012


Dec 31, 2012










(in thousands)
















Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)




























Net Income




$

74,849



$

51,455



$

80,602





Depreciation and Amortization



49,852



40,588



49,410





Subtotal




124,701



92,043



130,012





Interest Expense, Net


573



201



562





Provision for Income Taxes


34,419



23,662



37,065





EBITDA






$

159,693



$

115,906



$

167,639





















































2013 Estimates












Low


High












(in thousands)




















Net Income






$

335,000



$

360,000







Depreciation and Amortization






200,000



210,000







Subtotal






535,000



570,000







Interest Income/Expense, Net














Provision for Income Taxes






155,000



165,000







EBITDA






$

690,000



$

735,000


















SOURCE Oceaneering International, Inc.



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