2014

Oceaneering Announces Record Quarterly Earnings -- Reports Second Quarter 2013 EPS Above Guidance

-- Raises 2013 EPS Guidance Range to $3.20 to $3.35

-- Initiates Third Quarter 2013 EPS Guidance of $0.90 to $0.95

HOUSTON, July 24, 2013 /PRNewswire/ -- Oceaneering International, Inc. (NYSE: OII) today reported record quarterly earnings for the second quarter ended June 30, 2013.

On revenue of $820.4 million, Oceaneering generated net income of $98.8 million, or $0.91 per share.  During the corresponding period in 2012, Oceaneering reported revenue of $672.5 million and net income of $72.6 million, or $0.67 per share.



Summary of Results

(in thousands, except per share amounts)

 



Three Months Ended


Six Months Ended


June 30,


March 31,


June 30,


2013

2012


2013


2013

2012

Revenue

$820,372

$672,545


$718,552


$1,538,924

$1,267,438

Gross Profit

201,864

161,158


160,375


362,239

284,461

Income from Operations

146,337

110,047


108,290


254,627

186,034

Net Income

$98,811

$72,554


$74,849


$173,660

$124,009









Diluted Earnings Per Share (EPS)

$0.91

$0.67


$0.69


$1.60

$1.14



Year over year and sequentially, quarterly EPS increased as all business segments achieved higher operating income, led by Subsea Products and Subsea Projects. 

M. Kevin McEvoy, President and Chief Executive Officer, stated, "Our quarterly EPS was above our guidance range, and was up 32% over the first quarter of this year and up 36% compared to the second quarter of 2012.  Our above-guidance performance was attributable to sales of subsea hardware, demand for asset integrity services offshore Norway, and early completion of a theme park project.  We achieved record quarterly operating income from Remotely Operated Vehicles (ROV), Subsea Products, Asset Integrity, and Advanced Technologies.

"Our outlook for the second half of this year remains very positive and essentially unchanged from last quarter.  Given this outlook and our year-to-date performance, we are raising our 2013 EPS guidance range to $3.20 to $3.35 from $3.10 to $3.30.  Compared to 2012, we continue to forecast income growth for all of our operating segments in 2013.  Relative to the first half of 2013, we expect to generate higher operating income during the second half led by ROV and Subsea Projects. 

"Compared to the first quarter, Subsea Products operating income rose on the strength of increased revenue and profitability from tooling and subsea hardware.  Subsea Products backlog at quarter end was $902 million, up from our March backlog of $776 million and $621 million one year ago.  The sequential and year-over-year increases in backlog were predominantly attributable to umbilical awards.  During the quarter we announced two large umbilical contracts, one for offshore Egypt and one for the U.S. Gulf of Mexico (GOM).

"Subsea Projects operating income increased due to a seasonal uptick in GOM demand for deepwater intervention and an escalation of work under our field support vessel services contract offshore Angola.  The work offshore Angola included the provision of another chartered vessel, the Maersk Attender, for half of the quarter.  The charter term on the Maersk Attender runs through September 2013, followed by two 45-day renewal options, subject to our customer's work program.

"ROV operating income improved on higher demand for drill support services and an increase in average revenue per day-on-hire.  During the quarter we put four new ROVs into service and retired two.  At the end of June we had 296 vehicles in our fleet, compared to 280 one year ago.  We now anticipate adding about 30 new systems to our ROV fleet in 2013.  During the second half of this year, we expect to place approximately 20 more new systems into service.

"Asset Integrity operating income rose on higher service sales in most of the major geographic areas we serve.  Advanced Technologies operating income improved on an acceleration of theme park project work and incentive fees for meeting schedule completion dates. 

"For the third quarter of 2013, we are projecting EPS of $0.90 to $0.95.  We expect sequential improvements in operating income from our ROV and Subsea Projects businesses.  Due to project timing, we are anticipating that Subsea Products and Advanced Technologies will have lower results.

"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 $119 million of cash, $75 million of debt, and $1.9 billion of equity.  During the quarter we generated EBITDA of $195 million, $354 million year to date, and for 2013 we anticipate generating at least $710 million.  We fully intend to pursue organic growth and acquisition opportunities to expand Oceaneering's asset base and earnings capabilities.

"As announced in April, we increased by 22% our regular quarterly cash dividend to $0.22 from $0.18 per share.  This underscores our continued 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:  positive outlook for the rest of this year; 2013 EPS guidance range; forecast of higher income in 2013 compared to 2012; expectation that higher operating income in the second half of 2013, relative to the first half of 2013, will be led by ROV and Subsea Projects; statements about backlog, to the extent backlog may be an indicator of future revenue or profitability; anticipated additions to its ROV fleet; expected number of ROVs to be placed into service in the second half of 2013; third quarter EPS guidance range; expectation of sequential quarterly improvements in operating income from ROV and Subsea Projects; anticipation that Subsea Products and Advanced Technologies will have sequentially lower quarterly results due to project timing; 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; 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 Thursday, July 25, 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






Jun 30, 2013


Dec 31, 2012


(in thousands)

ASSETS




Current Assets (including cash and cash equivalents of $119,310 and $120,549)


$

1,291,740



$

1,202,990



Net Property and Equipment


1,065,742



1,025,132



Other Assets


505,358



539,996




TOTAL ASSETS


$

2,862,840



$

2,768,118








LIABILITIES AND SHAREHOLDERS' EQUITY




Current Liabilities


$

602,520



$

617,185



Long-term Debt


75,000



94,000



Other Long-term Liabilities


310,783



241,473



Shareholders' Equity


1,874,537



1,815,460




TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY


$

2,862,840



$

2,768,118





















CONDENSED CONSOLIDATED STATEMENTS OF INCOME


















For the Three Months Ended


For the Six Months Ended





Jun 30, 2013


Jun 30, 2012


Mar 31, 2013


Jun 30, 2013


Jun 30, 2012





(in thousands, except per share amounts)















Revenue


$

820,372



$

672,545



$

718,552



$

1,538,924



$

1,267,438



Cost of services and products


618,508



511,387



558,177



1,176,685



982,977




Gross Profit


201,864



161,158



160,375



362,239



284,461



Selling, general and administrative expense


55,527



51,111



52,085



107,612



98,427




Income from Operations


146,337



110,047



108,290



254,627



186,034



Interest income


243



194



190



433



538



Interest expense


(553)



(1,256)



(763)



(1,316)



(1,801)



Equity earnings of unconsolidated affiliates, net


(186)



119



161



(25)



923



Other income (expense), net


(1,591)



(3,186)



1,390



(201)



(4,659)




Income before income taxes


144,250



105,918



109,268



253,518



181,035



Provision for income taxes


45,439



33,364



34,419



79,858



57,026




Net Income


$

98,811



$

72,554



$

74,849



$

173,660



$

124,009















Weighted Average Number of Diluted Common Shares


108,713



108,663



108,612



108,662



108,706


Diluted Earnings per Share


$0.91



$0.67



$0.69



$1.60



$1.14





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


For the Six Months Ended





Jun 30, 2013


Jun 30, 2012


Mar 31, 2013


Jun 30, 2013


Jun 30, 2012





($ in thousands)











Remotely Operated Vehicles

Revenue


$

242,163



$

208,802



$

229,628



$

471,791



$

402,773



Gross Profit


$

80,180



$

74,177



$

76,154



$

156,334



$

140,569



Operating income


$

69,219



$

64,168



$

65,835



$

135,054



$

121,101



Operating margin


29

%


31

%


29

%


29

%


30

%


Days available


26,884



25,182



26,215



53,099



49,428



Utilization


83

%


81

%


83

%


83

%


80

%















Subsea Products

Revenue


$

258,016



$

191,783



$

214,005



$

472,021



$

363,864



Gross Profit


$

82,389



$

54,612



$

62,345



$

144,734



$

101,393



Operating income


$

62,060



$

36,742



$

42,779



$

104,839



$

66,252



Operating margin


24

%


19

%


20

%


22

%


18

%


Backlog


$

902,000



$

621,000



$

776,000



$

902,000



$

621,000
















Subsea Projects

Revenue


$

118,195



$

90,448



$

88,455



$

206,650



$

163,124



Gross Profit


$

27,991



$

20,149



$

14,921



$

42,912



$

32,060



Operating income


$

23,990



$

15,969



$

11,620



$

35,610



$

23,536



Operating margin


20

%


18

%


13

%


17

%


14

%















Asset Integrity

Revenue


$

124,740



$

113,660



$

114,849



$

239,589



$

207,116



Gross Profit


$

23,529



$

23,948



$

19,039



$

42,568



$

36,178



Operating income


$

16,639



$

16,444



$

12,339



$

28,978



$

22,982



Operating margin


13

%


14

%


11

%


12

%


11

%















Advanced Technologies

Revenue


$

77,258



$

67,852



$

71,615



$

148,873



$

130,561



Gross Profit


$

14,945



$

10,926



$

13,308



$

28,253



$

18,649



Operating income


$

10,165



$

6,645



$

8,676



$

18,841



$

10,154



Operating margin


13

%


10

%


12

%


13

%


8

%















Unallocated Expenses

Gross Profit


$

(27,170)



$

(22,654)



$

(25,392)



$

(52,562)



$

(44,388)



Operating income


$

(35,736)



$

(29,921)



$

(32,959)



$

(68,695)



$

(57,991)
















TOTAL

Revenue


$

820,372



$

672,545



$

718,552



$

1,538,924



$

1,267,438



Gross Profit


$

201,864



$

161,158



$

160,375



$

362,239



$

284,461



Operating income


$

146,337



$

110,047



$

108,290



$

254,627



$

186,034



Operating margin


18

%


16

%


15

%


17

%


15

%















SELECTED CASH FLOW INFORMATION






Capital expenditures, including acquisitions


$

81,138



$

68,174



$

94,177



$

175,315



$

160,851



Depreciation and Amortization


$

50,173



$

41,646



$

49,852



$

100,025



$

82,234
















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


For the Six Months Ended


Jun 30, 2013


Jun 30, 2012


Mar 31, 2013


Jun 30, 2013


Jun 30, 2012


($ in thousands)











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




















Net Income

$

98,811



$

72,554



$

74,849



$

173,660



$

124,009


Depreciation and Amortization

50,173



41,646



49,852



100,025



82,234


Subtotal

148,984



114,200



124,701



273,685



206,243


Interest Expense, Net

310



1,062



573



883



1,263


Provision for Income Taxes

45,439



33,364



34,419



79,858



57,026


EBITDA

$

194,733



$

148,626



$

159,693



$

354,426



$

264,532





































2013 Estimates








Low


High








(in thousands)













Net Income





$

350,000



$

365,000




Depreciation and Amortization





200,000



205,000




Subtotal





550,000



570,000




Interest Income/Expense, Net










Provision for Income Taxes





160,000



170,000




EBITDA





$

710,000



$

740,000












































SOURCE Oceaneering International, Inc.



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