EX-99.1 2 h66607exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
Oceaneering Announces Record First Quarter Earnings
April 29, 2009 – Houston, Texas – Oceaneering International, Inc. (NYSE:OII) today reported record first quarter earnings for the period ended March 31, 2009. On revenue of $435 million, Oceaneering generated net income of $44.3 million, or $0.80 per share. During the corresponding period in 2008, Oceaneering reported revenue of $436 million and net income of $41.3 million, or $0.73 per share as restated.
Year-over-year, quarterly earnings increased due to growth in Remotely Operated Vehicles (ROV) and Subsea Projects operating profits.
Summary of Results
(in thousands, except per share amounts)
                         
    Three months ended
    March 31,   Dec. 31,
    2009   2008   2008
Revenue
   $ 435,100     $ 435,815     $ 525,691  
Gross Margin
     105,802       98,666       120,248  
Operating Income
     69,380       64,770       81,626  
Net Income
     44,345       41,279       51,009  
 
                        
Net Income Attributable to Diluted Common Shares
     43,991       40,849       50,465  
Weighted Average Number of Diluted Common Shares *
     54,863       55,668       54,726  
Diluted Earnings Per Share *
   $ 0.80     $ 0.73     $ 0.92  
 
*   2008 period amounts have been restated to comply with new accounting requirements.
Sequentially, quarterly earnings declined largely due to a seasonal reduction in demand for our ROV and Subsea Projects services, and a lower operating income performance by Subsea Products. The Subsea Projects decrease was also attributable to an exceptionally good performance in the fourth quarter of 2008. The Subsea Products reduction in operating income was mainly the result of a decline in demand for ROV tooling and lower umbilical plant throughput.
T. Jay Collins, President and Chief Executive Officer, stated, “It is a great accomplishment to have record first quarter results to report at a time when many companies in the oilfield services industry are experiencing a sharp downturn in demand. This is a tribute to our business focus on deepwater and subsea completion activity and our expertise in underwater platform and pipeline repair.

 

 

“First quarter results were above our guidance range as our ROV and Subsea Projects businesses achieved operating income that surpassed our expectations. ROV performance was attributable to exceptional execution, which resulted in lower than anticipated operating expenses. During the quarter we put six new vehicles into service to meet market demand and, at the end of March 2009, had 233 ROVs in our fleet, compared to 212 a year ago. Subsea Projects exceeded our projection as a result of performing more deepwater installation work and shallow water diving projects on hurricane damaged facilities.
“In light of our better than expected first quarter earnings performance, we are raising the bottom of our 2009 EPS guidance range by $0.10, resulting in a range of $3.10 to $3.60. Much uncertainty remains in predicting the rate of subsea field development order flow. Given our first quarter performance and outlook for the rest of the year, we are now anticipating that our EPS in 2009 will not follow our historical quarterly pattern.
“Our outlook for the year remains basically the same as we discussed during our last earnings release conference call. Relative to 2008, we anticipate achieving profit growth from our ROV business and declines in operating income from the rest of our oilfield business operations. While we are achieving efficiency gains in our Subsea Products manufacturing processes, these will likely not offset anticipated 2009 demand declines for our product lines. For the second quarter of 2009, we are forecasting EPS of $0.75 to $0.85.
“In 2009, we anticipate generating $285 million to $320 million of cash flow, simply defined as net income plus depreciation and amortization expense. This projected cash flow and our existing revolving debt availability should give us ample liquidity to fund our estimated $175 million of capital expenditures and repay the $105 million of debt scheduled to mature this year. During the quarter we generated $72 million of cash flow and our capital expenditures were $45 million, of which $37 million was in support of growing our ROV fleet. Additionally, we prepaid $25 million of our 2009 debt maturities.
“Our earnings before interest, taxes, and depreciation and amortization expense (EBITDA) were $98 million for the quarter. For the year 2009, we expect to generate EBITDA in the range of $385 million to $440 million.
“As of March 31, 2009, we had $200 million of debt and $200 million available under our credit facilities. With $1.0 billion of equity on our balance sheet, our debt-to-capitalization percentage was 16%.
“Looking longer term, our belief remains unchanged that the oil and gas industry will continue to invest in deepwater to counteract high existing reservoir depletion rates. Deepwater is one of the best frontiers for adding large hydrocarbon reserves with high production flow rates at relatively low per barrel finding and development costs. Therefore, we anticipate demand for our deepwater services and products will remain promising for the next several years.”
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: 2009 EPS guidance range of $3.10 to $3.60; anticipation that its 2009 EPS will not follow its historical quarterly pattern; anticipation of achieving, relative to 2008, profit growth from its ROV business and declines in operating income from the rest of its oilfield business operations; expectation that efficiency gains in its Subsea Products manufacturing processes will likely not offset anticipated demand declines for its product lines; second quarter 2009 EPS of $0.75 to $0.85; anticipation of generating $285 million to $320 million of cash flow, as defined, in 2009; expectation that capital expenditures will be approximately $175 million in 2009; expectation of ample liquidity from projected cash flow and existing revolving debt availability, which will be available to fund its estimated capital expenditures and repay its debt scheduled to mature in 2009; expectation of generating EBITDA in the range of $385 million to $440 million for the year 2009; belief that the oil and gas industry will continue to invest in deepwater to counteract high existing reservoir depletion rates; and anticipation that demand for its deepwater services and products will remain promising for the next

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several years. 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. Among the factors that could cause the actual results to differ materially from those indicated in the forward-looking statements are risks and uncertainties related to: industry conditions; prices of crude oil and natural gas; Oceaneering’s ability to obtain, and the timing of, new projects; and changes in competitive factors. 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. These and other risks are more fully described in Oceaneering’s latest annual report on Form 10-K and its subsequent filings with the Securities and Exchange Commission under the Securities Exchange Act of 1934.
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 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; Fax 713-329-4653; E-Mail investorrelations@oceaneering.com. A live webcast of the Company’s earnings release conference call, scheduled for Thursday, April 30, 2009 at 10:00 a.m. Central, can be accessed at www.oceaneering.com/index.asp.
-Tables follow on next page-

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OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
                 
    Mar. 31, 2009     Dec. 31, 2008  
    (in thousands)  
ASSETS
                
Current Assets (including cash and cash equivalents of $24,795 and $11,200)
   $ 722,589     $ 747,705  
Net Property and Equipment
     715,953       697,430  
Other Assets
     223,094       224,885  
 
            
TOTAL ASSETS
   $ 1,661,636     $ 1,670,020  
 
            
 
                
LIABILITIES AND SHAREHOLDERS’ EQUITY
                
Current Liabilities
   $ 315,450     $ 357,327  
Long-term Debt
     200,000       229,000  
Other Long-term Liabilities
     123,747       116,039  
Shareholders’ Equity
     1,022,439       967,654  
 
            
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
   $ 1,661,636     $ 1,670,020  
 
            
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                         
    For the Three Months Ended  
    Mar. 31,     Mar. 31,     Dec. 31,  
    2009     2008     2008  
    (in thousands, except per share amounts)  
Revenue
   $ 435,100     $ 435,815     $ 525,691  
Cost of services and products
     329,298       337,149       405,443  
 
                  
Gross Margin
     105,802       98,666       120,248  
Selling, general and administrative expense
     36,422       33,896       38,622  
 
                  
Income from Operations
     69,380       64,770       81,626  
Interest income
     135       131       395  
Interest expense
     (2,381 )     (3,309 )     (3,603 )
Equity earnings of unconsolidated affiliates, net
     883       841       22  
Other income (expense), net
     206       1,074       597  
 
                  
Income before Income Taxes
     68,223       63,507       79,037  
Provision for income taxes
     23,878       22,228       28,028  
 
                  
Net Income
   $ 44,345     $ 41,279     $ 51,009  
 
                  
 
                        
Net Income Attributable to Diluted Common Shares
   $ 43,991     $ 40,849     $ 50,465  
Weighted Average Number of Diluted Common Shares*
     54,863       55,668       54,726  
Diluted Earnings per Share *
   $ 0.80     $ 0.73     $ 0.92  
 
*   2008 period amounts have been restated to comply with new accounting requirements.
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.

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SEGMENT INFORMATION
                         
    For the Three Months Ended
    Mar. 31,   Mar. 31,   Dec. 31,
    2009   2008   2008
    ($ in thousands)
Remotely Operated Vehicles
                        
Revenue
   $ 155,598     $ 144,729     $ 160,253  
Gross margin
   $ 55,704     $ 48,629     $ 60,809  
Operating income
   $ 48,796     $ 41,497     $ 52,891  
Operating margin %
     31 %     29 %     33 %
Days available
     20,671       19,232       20,649  
Utilization
     80 %     80 %     82 %
 
                        
Subsea Products
                        
Revenue
   $ 114,924     $ 138,518     $ 171,129  
Gross margin
   $ 29,511     $ 32,594     $ 35,356  
Operating income
   $ 15,788     $ 20,717     $ 22,189  
Operating margin %
     14 %     15 %     13 %
Backlog
   $ 282,000     $ 353,000     $ 298,000  
 
                        
Subsea Projects
                        
Revenue
   $ 62,997     $ 47,614     $ 90,312  
Gross margin
   $ 19,394     $ 14,040     $ 26,735  
Operating income
   $ 17,160     $ 12,133     $ 24,034  
Operating margin %
     27 %     25 %     27 %
 
                        
Inspection
                        
Revenue
   $ 49,073     $ 59,551     $ 56,253  
Gross margin
   $ 10,351     $ 11,587     $ 10,275  
Operating income
   $ 6,630     $ 7,537     $ 5,973  
Operating margin %
     14 %     13 %     11 %
 
                        
Mobile Offshore Production Systems
                        
Revenue
   $ 8,766     $ 10,033     $ 9,389  
Gross margin
   $ 2,719     $ 2,670     $ (2,049 )
Operating income (loss)
   $ 2,333     $ 2,254     $ (2,418 )
Operating margin %
     27 %     22 %     -26 %
 
                        
Advanced Technologies
                        
Revenue
   $ 43,742     $ 35,370     $ 38,355  
Gross margin
   $ 4,949     $ 4,934     $ 4,433  
Operating income
   $ 2,053     $ 2,105     $ 1,450  
Operating margin %
     5 %     6 %     4 %
 
                        
Unallocated Expenses
                        
Gross margin
   $ (16,826 )   $ (15,788 )   $ (15,311 )
Operating income
   $ (23,380 )   $ (21,473 )   $ (22,493 )
 
                        
TOTAL
                        
Revenue
   $ 435,100     $ 435,815     $ 525,691  
Gross margin
   $ 105,802     $ 98,666     $ 120,248  
Operating income
   $ 69,380     $ 64,770     $ 81,626  
Operating margin %
     16 %     15 %     16 %
 
                        
SELECTED CASH FLOW INFORMATION
                        
Capital expenditures, including acquisitions
   $ 45,387     $ 87,824     $ 53,850  
Depreciation and Amortization, including impairment charge
   $ 28,023     $ 26,499     $ 33,022  

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RECONCILIATION of GAAP to NON-GAAP FINANCIAL INFORMATION
                         
    For the Three Months Ended  
    Mar. 31,     Mar. 31,     Dec. 31,  
    2009     2008     2008  
    ($ in thousands)  
Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA)
                        
Net Income
   $ 44,345     $ 41,279     $ 51,009  
Depreciation and Amortization
     28,023       26,499       33,022  
 
                  
 
                        
Subtotal
     72,368       67,778       84,031  
 
                        
Interest Income/Expense, Net
     2,246       3,178       3,208  
Provision for Income Taxes
     23,878       22,228       28,028  
 
                  
 
                        
EBITDA
   $ 98,492     $ 93,184     $ 115,267  
 
                  
                 
    2009 Estimates  
    Low     High  
    ($ in thousands)  
Net Income
   $ 170,000     $ 200,000  
Depreciation and Amortization
     115,000       120,000  
 
            
 
                
Subtotal
     285,000       320,000  
 
                
Interest Income/Expense, Net
     10,000       10,000  
Provision for Income Taxes
     90,000       110,000  
 
            
 
                
EBITDA
   $ 385,000     $ 440,000  
 
            

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