2014

Oceaneering Reports Record Fourth Quarter and Annual Earnings -- Reaffirms 2013 EPS Guidance of $3.00 to $3.25

HOUSTON, Feb. 13, 2013 /PRNewswire/ -- Oceaneering International, Inc. (NYSE: OII) today reported record fourth quarter and annual earnings for the periods ended December 31, 2012.      

For the fourth quarter of 2012, Oceaneering earned net income of $80.6 million, or $0.74 per share, on revenue of $780.9 million. During the corresponding period in 2011, net income was $58.3 million, or $0.54 per share, on revenue of $574.2 million.  For the year 2012, Oceaneering reported net income of $289.0 million, or $2.66 per share, on revenue of $2.8 billion.  For the year 2011, net income was $235.7 million, or $2.16 per share, on revenue of $2.2 billion.

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


         Three Months Ended                           

           Year Ended        


      December 31,    

Sept. 30,

        December 31,        


2012

2011

2012

2012

2011

 

Revenue

$780,949

$574,197

 

$734,217

$2,782,604

$2,192,663

Gross Profit

172,528

130,746

170,869

627,858

508,759

Income from Operations

118,750

82,468

123,813

428,597

334,831

Net Income

$80,602

$58,317

$84,406

$289,017

$235,658







Diluted Earnings Per Share (EPS)

$0.74

$0.54

$0.78

$2.66

$2.16

Year over year, annual EPS increased 23% due to record operating income from our Remotely Operated Vehicles (ROV), Subsea Products, Asset Integrity, and Advanced Technologies segments and the commencement of a three-year field support vessel services contract offshore Angola.  Quarterly EPS increased 37% on income improvements from all operating business segments, led by Subsea Products and Subsea Projects. 

M. Kevin McEvoy, President and Chief Executive Officer, stated, "Our record annual earnings of $289 million and EPS of $2.66 were largely attributable to our global focus on deepwater and subsea completion activity.  Each of our five operating business segments attained higher income than in 2011.

"We achieved record ROV operating income for the ninth consecutive year on higher demand to provide drill support and vessel-based services, notably offshore Africa and in the U.S. Gulf of Mexico (GOM), and expansion of our fleet.  We increased our days on hire by more than 9,000 to over 82,000 days for the year.  Our fleet utilization rose to 80% from 77% in 2011.  During 2012 we put 37 new ROVs into service and retired 15.  At year end we had 289 vehicles in our ROV fleet.

"Subsea Products operating income increased primarily on higher demand for tooling.  Products backlog at the end of 2012 was $681 million, up 78% from $382 million at the end of 2011.  This backlog growth was largely attributable to three large umbilical contracts we secured, which in total added nearly $245 million to our backlog.  One of these, the largest umbilical order in Oceaneering's history, is for Petrobras' first large pre-salt project.

"Asset Integrity operating income improved in 2012 on higher service sales in most of the major geographic areas we serve, particularly in Norway due to the business acquisition we completed in December 2011.  Subsea Projects operating income increased due to recovering demand for our services in the GOM and the work offshore Angola.  Advanced Technologies profits were up on engineering and vessel maintenance work for the U.S. Navy and theme park project activity.

"During 2012 our capital expenditures totaled $310 million, of which $198 million was spent on expanding and upgrading our ROV fleet.  We invested $68 million in our Subsea Products business, largely to increase the capabilities of our umbilical plants in Brazil and Scotland and to expand our rental tooling operation.  In addition to our capital expenditures, we repurchased 400,000 shares of our common stock for $19 million and paid $75 million of cash dividends.  In June we increased our regular quarterly cash dividend by 20% to $0.18 per common share. 

"We are forecasting our 2013 EPS to be in the range of $3.00 to $3.25.  We anticipate continued global demand growth for our services and products to support deepwater drilling, field development, and inspection, maintenance, and repair activities.  This market outlook is supported by industry observations and assessments that deepwater drilling is increasing, subsea equipment orders are escalating, and backlog to perform offshore construction projects is at a historically high level.  Consistent with our historical seasonal earnings pattern, we are forecasting first quarter EPS of $0.55 to $0.60.

"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 line categories, led by subsea hardware; and Subsea Projects on a full year of work offshore Angola.

"Our liquidity and projected cash flow provide us with ample resources to invest in Oceaneering's growth.  At year end, our balance sheet remained conservatively capitalized with $121 million of cash, $94 million of debt, and $1.8 billion of equity.  We generated slightly over $600 million of EBITDA during 2012 and anticipate producing EBITDA of at least $675 million in 2013.

"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:  statements about backlog, to the extent backlog may be an indicator of future revenue or profitability; 2013 EPS guidance range; anticipated continued global demand growth to support deepwater drilling, field development, and inspection, maintenance, and repair activities; references to industry observations and assessments that deepwater drilling is increasing and subsea equipment orders are escalating; first quarter 2013 EPS guidance range; 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; belief that its liquidity and projected cash flow provide ample resources to invest in the company's growth; anticipated minimum 2013 EBITDA; 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 subsequent 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 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, 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, February 14, 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







































 

Dec. 31, 2012


Dec. 31, 2011













(in thousands)




ASSETS














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










    and $106,142)







$    1,202,990


$         984,122





Net Property and Equipment







1,025,132


893,308





Other Assets







539,996


523,114






TOTAL ASSETS







$    2,768,118


$      2,400,544


































LIABILITIES AND SHAREHOLDERS' EQUITY













Current Liabilities 







$       617,185


$         501,375





Long-term Debt







94,000


120,000





Other Long-term Liabilities







241,473


221,207





Shareholders' Equity







1,815,460


1,557,962






TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY




$    2,768,118


$      2,400,544


































 


 



CONDENSED CONSOLIDATED STATEMENTS OF INCOME




















For the Three Months Ended


For the Year Ended






Dec. 31


Dec. 31,


Sept. 30,


Dec. 31,


Dec. 31,






2012


2011


2012


2012


2011






(in thousands, except per share amounts)















Revenue





$   780,949


$       574,197


$         734,217


$        2,782,604


$     2,192,663

Cost of services and products





608,421


443,451


563,348


2,154,746


1,683,904

Gross Profit





172,528


130,746


170,869


627,858


508,759

Selling, general and administrative expense




53,778


48,278


47,056


199,261


173,928

Income from Operations





118,750


82,468


123,813


428,597


334,831

Interest income





573


428


824


1,935


888

Interest expense





(1,135)


(350)


(1,282)


(4,218)


(1,096)

Equity earnings of unconsolidated affiliates, net




332


859


418


1,673


3,801

Other income (expense), net





(853)


1,792


(553)


(6,065)


(539)

Income before Income Taxes





117,667


85,197


123,220


421,922


337,885

Provision for income taxes





37,065


26,880


38,814


132,905


102,227

Net Income





$      80,602


$         58,317


$            84,406


$           289,017


$        235,658

















Weighted Average Number of Diluted Common Shares



108,558


108,671


108,500


108,617


109,001

Diluted Earnings per Share 





$0.74


$0.54


$0.78


$2.66


$2.16





































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 Year Ended








Dec. 31,


Dec. 31,


Sept. 30,

Dec. 31,


Dec. 31,








2012


2011


2012

2012


2011








($ in thousands)

















Remotely Operated Vehicles

Revenue




$   226,098


$       200,681


$         224,649

$           853,520


$        755,033




Gross Profit




$      72,836


$         69,298


$            76,524

$           289,929


$        260,287




Operating income




$      61,147


$         59,100


$            66,724

$           248,972


$        224,705




Operating margin




27%


29%


30%

29%


30%




Days available




26,599


24,277


26,198

102,225


94,999




Utilization




79%


79%


81%

80%


77%

















Subsea Products

Revenue




$   249,553


$       196,987


$         215,617

$           829,034


$        770,212




Gross Profit




$      72,196


$         53,285


$            67,651

$           241,240


$        207,804




Operating income




$      53,866


$         36,743


$            50,841

$           170,959


$        142,184




Operating margin




22%


19%


24%

21%


18%




Backlog




$   681,000


$       382,000


$         619,000

$           681,000


$        382,000

















Subsea Projects

Revenue




$   114,728


$         45,263


$         101,719

$           379,571


$        167,477




Gross Profit




$      26,682


$           9,108


$            22,202

$             80,944


$           42,004




Operating income




$      22,160


$           6,769


$            17,765

$             63,461


$           32,662




Operating margin




19%


15%


17%

17%


20%

















Asset Integrity

Revenue




$   114,677


$         66,826


$         113,588

$           435,381


$        266,577




Gross Profit




$      14,465


$         10,888


$            20,457

$             71,100


$           46,109




Operating income




$        7,658


$           6,473


$            14,556

$             45,196


$           30,560




Operating margin




7%


10%


13%

10%


11%

















Advanced Technologies

Revenue




$      75,893


$         64,440


$            78,644

$           285,098


$        233,364




Gross Profit




$      10,279


$           9,688


$              9,753

$             38,681


$           33,774




Operating income




$        5,635


$           5,215


$              5,393

$             21,182


$           16,661




Operating margin




7%


8%


7%

7%


7%

















Unallocated Expenses

Gross Profit




$    (23,930)


$       (21,521)


$          (25,718)

$            (94,036)


$         (81,219)




Operating income




$    (31,716)


$       (31,832)


$          (31,466)

$         (121,173)


$       (111,941)

















TOTAL

Revenue




$   780,949


$       574,197


$         734,217

$        2,782,604


$     2,192,663




Gross Profit




$   172,528


$       130,746


$         170,869

$           627,858


$        508,759




Operating income




$   118,750


$         82,468


$         123,813

$           428,597


$        334,831




Operating margin




15%


14%


17%

15%


15%
















SELECTED CASH FLOW INFORMATION















Capital expenditures, including acquisitions




$      84,050


$       308,998


$            64,957

$           309,858


$        526,645




Depreciation and Amortization




$      49,410


$         38,479


$            44,839

$           176,483


$        151,227

































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 Year Ended








Dec. 31,


Dec. 31,


Sept. 30,

Dec. 31,


Dec. 31,








2012


2011


2012

2012


2011








(in thousands)


















Earnings Before Interest, Tax, Depreciation and














Amortization (EBITDA)
















Net Income




$      80,602


$         58,317


$            84,406

$           289,017


$        235,658



















Depreciation and Amortization




49,410


38,479


44,839

176,483


151,227



















Subtotal




130,012


96,796


129,245

465,500


386,885



















Interest Expense, Net




562


(78)


458

2,283


208




Provision for Income Taxes




37,065


26,880


38,814

132,905


102,227



















EBITDA




$   167,639


$       123,598


$         168,517

$           600,688


$        489,320






































2013 Estimates




















Low


High













(in thousands)


















Net Income




$   325,000


$       355,000
























Depreciation and Amortization




200,000


210,000
























Subtotal




525,000


565,000
























Interest Expense, Net




-


-









Provision for Income Taxes




150,000


165,000
























EBITDA




$   675,000


$       730,000





















SOURCE Oceaneering International, Inc.



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