EX-99.1 2 exhibit9918k1q2013.htm EXHIBIT EARNINGS RELEASE Exhibit99.1 8K 1Q 2013



Exhibit 99.1



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


April 23, 2013 - Houston, Texas - 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).
 
- more -






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/.



- Tables follow on next page -





 
 
 
 
 
 
 
 
 
 
 
 
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