EX-99.1 2 exhibit9918k4q2013.htm PRESS RELEASE DATED FEB 18 2014 REGARDING 2013 4TH QUARTER AND ANNUAL EARNING Exhibit99.1 8K 4Q 2013


Exhibit 99.1


Oceaneering Reports Record Fourth Quarter and Annual Earnings

-- Annual EPS Increased for the Fourth Consecutive Year and 29% Over 2012
-- Reaffirms 2014 EPS Guidance of $3.90 to $4.10


February 18, 2014 - Houston, Texas - Oceaneering International, Inc. (NYSE:OII) today reported record fourth quarter and annual earnings for the periods ended December 31, 2013.

For the fourth quarter of 2013, Oceaneering earned net income of $93.4 million, or $0.86 per share, on revenue of $894.8 million. During the corresponding period in 2012, net income was $80.6 million, or $0.74 per share, on revenue of $780.9 million. For the year 2013, Oceaneering reported net income of $371.5 million, or $3.42 per share, on revenue of $3.3 billion. For the year 2012, net income was $289.0 million, or $2.66 per share, on revenue of $2.8 billion.

Fourth quarter 2013 results included a $3.3 million charge to establish an allowance for doubtful accounts related to Remotely Operated Vehicles (ROV) receivables from OGX Petróleo e Gás S.A., which initiated a court-supervised restructuring under Brazilian bankruptcy law during the period. This charge was recorded as an ROV selling, general and administrative expense.


Summary of Results
(in thousands, except per share amounts)
 
Three Months Ended
 
Year Ended
 
December 31,
 
Sept. 30,
 
December 31,
 
2013
 
2012
 
2013
 
2013
 
2012
Revenue
$
894,798

 
$
780,949

 
$
853,297

 
$
3,287,019

 
$
2,782,604

Gross Margin
197,805

 
172,528

 
205,492

 
765,536

 
627,858

Income from Operations
136,753

 
118,750

 
153,736

 
545,116

 
428,597

Net Income
$
93,433

 
$
80,602

 
$
104,407

 
$
371,500

 
$
289,017

 
 
 
 
 
 
 
 
 
 
Diluted Earnings Per Share
$
0.86

 
$
0.74

 
$
0.96

 
$
3.42

 
$
2.66


Quarterly EPS increased year over year due to profit improvements by all oilfield business operations, led by ROV and Subsea Products. Subsea Products achieved record quarterly operating income.

Annual EPS increased as all operating segments attained higher income. Four of five segments achieved record operating income. Although not a record, Subsea Projects operating income increased by 48%. Overall operating margin was the second highest in Oceaneering’s history.

M. Kevin McEvoy, President and Chief Executive Officer, stated, “Results for the fourth quarter and the year were exemplary as we achieved record EPS in each period. Our ability to produce these exceptional results is largely attributable to our global focus on deepwater and subsea completion activity, the business expansion strategy we have in place, and our solid operational execution.





“We achieved record ROV operating income for the tenth consecutive year on higher global demand to provide drill support and vessel-based services and the expansion of our fleet. We increased our days on hire by more than 9,000, to over 91,000 days for the year. Our fleet utilization rose to 85% from 80% in 2012. During 2013 we put 26 new ROVs into service, retired 10, and transferred 1 system to Advanced Technologies for non-oilfield use. At year end, we had 304 vehicles in our ROV fleet.

“Subsea Products annual operating income increased on higher demand for each of our major product lines, led by subsea hardware. Products backlog at the end of 2013 was an all-time high of $906 million, up 33% from $681 million at the end of 2012. This backlog growth was primarily attributable to four umbilical contracts, which added about $170 million to our 2013 backlog. These umbilicals are for use in the U.S. Gulf of Mexico (GOM), West of Shetland, and offshore Egypt.

“Asset Integrity annual operating income improved in 2013 on higher service sales in most of the major geographic areas we serve, particularly Africa and Australia. Advanced Technologies profits were up on theme park project activity and vessel maintenance work for the U.S. Navy. Subsea Projects operating income also grew, primarily on increased deepwater vessel service activity.

“During 2013 our capital expenditures totaled $394 million, of which $226 million was spent on expanding and upgrading our ROV fleet. We invested $103 million in our Subsea Products business, mainly to increase the capabilities of our umbilical plants in the U.S. and Scotland and expand our rental/service tooling hardware offerings. We also paid $91 million of cash dividends. In June we increased our regular quarterly cash dividend by more than 20% to $0.22 per common share.

“We continue to project record EPS for 2014 in the range of $3.90 to $4.10. We anticipate sustained 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 $0.75 to $0.80.

“We expect all our oilfield segments will achieve higher operating income in 2014 compared to 2013: ROV on greater worldwide service demand to support drilling and vessel-based projects; Subsea Products on higher demand for each of our major product lines; Subsea Projects on growth in deepwater service activity; and Asset Integrity on increased demand for our services. “Our liquidity and projected cash flow provide us with ample resources to invest in Oceaneering’s growth. At year end, our balance sheet reflected $91 million of cash, no debt, and $2.0 billion of equity. We generated $746 million of EBITDA during 2013 and anticipate at least $850 million in 2014.

“Looking beyond 2014, we believe that the oil and gas industry will increase its investment in deepwater projects. 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 the 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: statements about backlog, to the extent it may be an indicator of future revenue or profitability; projected 2014 EPS range; anticipated sustained global demand growth for its services and products; forecasted first quarter 2014 EPS range; expectation of higher operating income in 2014, compared to 2013, for all of its oilfield segments and the basis for such increases; belief that its liquidity and projected cash flow provide ample resources to invest in the company’s growth; anticipated minimum 2014 EBITDA; belief about the future of oil and gas industry deepwater investment; and characterization of deepwater projects. 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, February 19, 2014 at 11:00 a.m. Eastern, can be accessed at www.oceaneering.com/investor-relations/.



PR 1172



- Tables follow on next page -





 
 
 
 
 
 
 
 
 
 
 
 
 
OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES
 
 
 
 
 
 
 
 
 
 
 
 
 
CONDENSED CONSOLIDATED BALANCE SHEETS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dec 31, 2013
 
Dec 31, 2012
 
 
 
 
 
 
 
 
 
 
(in thousands)
ASSETS
 
 
 
 
 
 
 
 
 
 
 
Current Assets (including cash and cash equivalents of $91,430 and $120,549)
 
 
 
 
 
 
 
$
1,433,275

 
$
1,202,990

 
Net Property and Equipment
 
 
 
 
 
 
 
1,189,099

 
1,025,132

 
Other Assets
 
 
 
 
 
 
 
506,126

 
539,996

 
 
TOTAL ASSETS
 
 
 
 
 
 
 
$
3,128,500

 
$
2,768,118

 
 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
Current Liabilities
 
 
 
 
 
 
 
$
727,088

 
$
617,185

 
Long-term Debt
 
 
 
 
 
 
 
—

 
94,000

 
Other Long-term Liabilities
 
 
 
 
 
 
 
357,972

 
241,473

 
Shareholders' Equity
 
 
 
 
 
 
 
2,043,440

 
1,815,460

 
 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
$
3,128,500

 
$
2,768,118

 
 
 
 
 
 
 
 
 
 
 
 
 
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the Three Months Ended
 
For the Year Ended
 
 
 
 
Dec 31, 2013
 
Dec 31, 2012
 
Sep 30, 2013
 
Dec 31, 2013
 
Dec 31, 2012
 
 
 
 
(in thousands, except per share amounts)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
$
894,798

 
$
780,949

 
$
853,297

 
$
3,287,019

 
$
2,782,604

 
Cost of services and products
 
696,993

 
608,421

 
647,805

 
2,521,483

 
2,154,746

 
 
Gross Margin
 
197,805

 
172,528

 
205,492

 
765,536

 
627,858

 
Selling, general and administrative expense
 
61,052

 
53,778

 
51,756

 
220,420

 
199,261

 
 
Income from Operations
 
136,753

 
118,750

 
153,736

 
545,116

 
428,597

 
Interest income
 
82

 
573

 
39

 
554

 
1,935

 
Interest expense
 
(27
)
 
(1,135
)
 
(851
)
 
(2,194
)
 
(4,218
)
 
Equity earnings of unconsolidated affiliates, net
 
24

 
332

 
134

 
133

 
1,673

 
Other income (expense), net
 
(433
)
 
(853
)
 
(639
)
 
(1,273
)
 
(6,065
)
 
 
Income before income taxes
 
136,399

 
117,667

 
152,419

 
542,336

 
421,922

 
Provision for income taxes
 
42,966

 
37,065

 
48,012

 
170,836

 
132,905

 
 
Net Income
 
$
93,433

 
$
80,602

 
$
104,407

 
$
371,500

 
$
289,017

 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted Average Number of Diluted Common Shares
 
108,840

 
108,558

 
108,783

 
108,731

 
108,617

Diluted Earnings per Share
 
$0.86
 
$0.74
 
$0.96
 
$3.42
 
$2.66
 
 
 
 
 
 
 
 
 
 
 
 
 
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, 2013
 
Dec 31, 2012
 
Sep 30, 2013
 
Dec 31, 2013
 
Dec 31, 2012
 
 
 
 
 
($ in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
Remotely Operated Vehicles
Revenue
 
$
254,958

 
$
226,098

 
$
254,979

 
$
981,728

 
$
853,520

 
 
Gross Margin
 
$
86,504

 
$
72,836

 
$
85,193

 
$
328,031

 
$
289,929

 
 
Operating income
 
$
72,209

 
$
61,147

 
$
74,710

 
$
281,973

 
$
248,972

 
 
Operating margin
 
28
%
 
27
%
 
29
%
 
29
%
 
29
%
 
 
Days available
 
27,535

 
26,599

 
27,567

 
108,201

 
102,225

 
 
Days utilized
 
23,868

 
21,104

 
23,684

 
91,618

 
82,126

 
 
Utilization
 
87
%
 
79
%
 
86
%
 
85
%
 
80
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subsea Products
Revenue
 
$
292,100

 
$
249,553

 
$
263,671

 
$
1,027,792

 
$
829,034

 
 
Gross Margin
 
$
85,576

 
$
72,196

 
$
80,896

 
$
311,206

 
$
241,240

 
 
Operating income
 
$
64,474

 
$
53,866

 
$
61,737

 
$
231,050

 
$
170,959

 
 
Operating margin
 
22
%
 
22
%
 
23
%
 
22
%
 
21
%
 
 
Backlog
 
$
906,000

 
$
681,000

 
$
857,000

 
$
906,000

 
$
681,000

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subsea Projects
Revenue
 
$
159,658

 
$
114,728

 
$
143,132

 
$
509,440

 
$
379,571

 
 
Gross Margin
 
$
31,854

 
$
26,682

 
$
33,992

 
$
108,758

 
$
80,944

 
 
Operating income
 
$
27,555

 
$
22,160

 
$
30,700

 
$
93,865

 
$
63,461

 
 
Operating margin
 
17
%
 
19
%
 
21
%
 
18
%
 
17
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Asset Integrity
Revenue
 
$
123,673

 
$
114,677

 
$
118,657

 
$
481,919

 
$
435,381

 
 
Gross Margin
 
$
17,194

 
$
14,465

 
$
22,094

 
$
81,856

 
$
71,100

 
 
Operating income
 
$
9,892

 
$
7,658

 
$
16,373

 
$
55,243

 
$
45,196

 
 
Operating margin
 
8
%
 
7
%
 
14
%
 
11
%
 
10
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Advanced Technologies
Revenue
 
$
64,409

 
$
75,893

 
$
72,858

 
$
286,140

 
$
285,098

 
 
Gross Margin
 
$
5,153

 
$
10,279

 
$
11,170

 
$
44,576

 
$
38,681

 
 
Operating income
 
$
(287
)
 
$
5,635

 
$
6,400

 
$
24,954

 
$
21,182

 
 
Operating margin
 
—
%
 
7
%
 
9
%
 
9
%
 
7
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unallocated Expenses
Gross Margin
 
$
(28,476
)
 
$
(23,930
)
 
$
(27,853
)
 
$
(108,891
)
 
$
(94,036
)
 
 
Operating income
 
$
(37,090
)
 
$
(31,716
)
 
$
(36,184
)
 
$
(141,969
)
 
$
(121,173
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
TOTAL
Revenue
 
$
894,798

 
$
780,949

 
$
853,297

 
$
3,287,019

 
$
2,782,604

 
 
Gross Margin
 
$
197,805

 
$
172,528

 
$
205,492

 
$
765,536

 
$
627,858

 
 
Operating income
 
$
136,753

 
$
118,750

 
$
153,736

 
$
545,116

 
$
428,597

 
 
Operating margin
 
15
%
 
15
%
 
18
%
 
17
%
 
15
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SELECTED CASH FLOW INFORMATION
 
 
 
 
 
 
Capital expenditures, including acquisitions
 
$
113,156

 
$
84,050

 
$
105,119

 
$
393,590

 
$
309,858

 
 
Depreciation and Amortization
 
$
51,255

 
$
49,410

 
$
50,948

 
$
202,228

 
$
176,483

 
 
 
 
 
 
 
 
 
 
 
 
 
 
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, 2013
 
Dec 31, 2012
 
Sep 30, 2013
 
Dec 31, 2013
 
Dec 31, 2012
 
 
 
($ in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Income
$
93,433

 
$
80,602

 
$
104,407

 
$
371,500

 
$
289,017

 
 
Depreciation and Amortization
51,255

 
49,410

 
50,948

 
202,228

 
176,483

 
 
Subtotal
144,688

 
130,012

 
155,355

 
573,728

 
465,500

 
 
Interest Income/Expense, Net
(55
)
 
562

 
812

 
1,640

 
2,283

 
 
Provision for Income Taxes
42,966

 
37,065

 
48,012

 
170,836

 
132,905

 
 
EBITDA
$
187,599

 
$
167,639

 
$
204,179

 
$
746,204

 
$
600,688

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2014 Estimates
 
 
 
 
 
 
 
 
 
Low
 
High
 
 
 
 
 
 
 
(in thousands)
 
 
 
 
 
 
 
 
Net Income
$
425,000

 
$
445,000

 
 
 
 
 
 
 
 
Depreciation and Amortization
230,000

 
240,000

 
 
 
 
 
 
 
 
Subtotal
655,000

 
685,000

 
 
 
 
 
 
 
 
Interest Income/Expense, Net
—

 
—

 
 
 
 
 
 
 
 
Provision for Income Taxes
195,000

 
205,000

 
 
 
 
 
 
 
 
EBITDA
$
850,000

 
$
890,000