HOUSTON, July 23, 2014 /PRNewswire/ -- Oceaneering
International, Inc. (NYSE:OII) today reported record quarterly
earnings for the second quarter ended June
30, 2014.
On revenue of $927.4 million,
Oceaneering generated net income of $110.3
million, or $1.02 per
share. During the corresponding period in 2013, Oceaneering
reported revenue of $820.4 million and net income of
$98.8 million, or $0.91 per share.
|
Summary of
Results
(in thousands, except
per share amounts)
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June 30,
|
|
March 31,
|
|
June 30,
|
|
|
|
2014
|
|
|
2013
|
|
|
2014
|
|
|
2014
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
927,407
|
|
|
$
|
820,372
|
|
|
$
|
840,201
|
|
|
$
|
1,767,608
|
|
|
$
|
1,538,924
|
|
Gross
Margin
|
218,215
|
|
|
201,864
|
|
|
189,491
|
|
|
407,706
|
|
|
362,239
|
|
Income from
Operations
|
161,311
|
|
|
146,337
|
|
|
132,862
|
|
|
294,173
|
|
|
254,627
|
|
Net Income
|
$
|
110,295
|
|
|
$
|
98,811
|
|
|
$
|
91,225
|
|
|
$
|
201,520
|
|
|
$
|
173,660
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per
Share (EPS)
|
$1.02
|
|
|
$0.91
|
|
|
$0.84
|
|
|
$1.86
|
|
|
$1.60
|
|
Year over year, quarterly EPS increased on profit improvements
from Subsea Products, Remotely Operated Vehicles (ROV), and Subsea
Projects. Sequentially, quarterly EPS rose on higher
operating income principally from Subsea Products and Subsea
Projects.
M. Kevin McEvoy, President and
Chief Executive Officer, stated, "Our quarterly EPS was slightly
above our guidance, and was up 21% over the first quarter of this
year and 12% over the second quarter of 2013. EPS for the
first half of 2014 was 16% higher than the first half of
2013. We achieved record quarterly operating income from
Subsea Products, and for the first time Subsea Products operating
income exceeded that of ROV.
"Our outlook for the second half of this year remains positive
and unchanged overall from last quarter. Given this outlook
and our year-to-date performance, we are narrowing our 2014 EPS
guidance range to $3.95 to $4.05 from
$3.90 to $4.10. Relative to the
first half of 2014, we expect to generate higher income from each
of our operating segments during the second half, led by ROV and
Subsea Projects. We continue to forecast year-over-year
operating income growth for all of our oilfield segments in
2014.
"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 $850 million, compared to our March 31 backlog of $894
million and $902 million one
year ago. During the quarter we announced one large umbilical
contract for offshore Indonesia.
"ROV operating income was essentially flat, as operating margin
declined due to higher repair and maintenance expenses,
unanticipated startup costs associated with placing new systems in
service, and lower fleet utilization. Revenue grew on
increases in days on hire and revenue per day on hire. During
the quarter we put 13 new ROVs into service and retired 4. At
the end of June we had 323 vehicles in our fleet, compared to 296
one year ago.
"During the second half of this year, we expect to place at
least 13 new ROVs into service, and we have contracts for all of
these. When these new vehicles are placed into service
depends upon the actual commencement dates of new drilling rig and
vessel project work. We now anticipate adding 40 or more new
systems to our ROV fleet in 2014.
"Sequentially, Subsea Projects operating income increased
largely as a result of adding a vessel, the Bourbon Evolution
803, to our Field Support Vessel Services contract with BP for
work offshore Angola and a higher
profit contribution from the Ocean Alliance in the U.S.
Gulf of Mexico. The
Ocean Alliance was out of service for much of the first
quarter undergoing a regulatory drydock inspection.
Asset Integrity operating income improved slightly due to a
seasonal increase in activity in Europe and the Caspian Sea area.
Advanced Technologies operating income declined due to execution
issues on certain U.S. Navy and industrial projects.
"For the third quarter of 2014, we are projecting EPS of
$1.10 to $1.15. We expect
sequential improvements in income from all of our operating
business segments, led by ROVs.
"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 reflected $103 million of cash,
$80 million of debt, and $2.2 billion of equity. During the
quarter we generated EBITDA of $217
million, $403 million year to date, and for 2014 we
anticipate generating at least $855 million.
"In June we increased our regular quarterly cash dividend by 23%
to $0.27 from $0.22 per share. This underscores our continued
confidence in Oceaneering's financial strength and future business
prospects.
"Looking beyond 2014, we believe that the oil and gas industry
will continue 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 and
opportunities to add new 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; 2014 EPS guidance range; forecast of higher
income from all oilfield segments in 2014 compared to 2013;
expectation of higher operating income in the second half of 2014,
relative to the first half of 2014, 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 in 2014; third quarter EPS guidance range; expectation of
sequential quarterly improvements in income from all operating
business segments, led by ROV; belief that its liquidity and
projected cash flow provide ample resources to invest in the
company's growth; anticipated minimum 2014 EBITDA; belief that the
oil and gas industry will continue its investment 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 24, 2014 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,
2014
|
|
Dec 31,
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in
thousands)
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Assets
(including cash and cash equivalents of $103,330 and
$91,430)
|
|
|
|
|
|
|
|
|
|
|
$
|
1,530,712
|
|
|
$
|
1,433,275
|
|
|
Net Property and
Equipment
|
|
|
|
|
|
|
|
|
|
|
1,312,585
|
|
|
1,189,099
|
|
|
Other
Assets
|
|
|
|
|
|
|
|
|
|
|
539,887
|
|
|
506,126
|
|
|
|
|
TOTAL
ASSETS
|
|
$
|
3,383,184
|
|
|
$
|
3,128,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
|
|
|
|
|
$
|
767,107
|
|
|
$
|
727,088
|
|
|
Long-term
Debt
|
|
|
|
|
|
|
|
|
|
|
80,000
|
|
|
—
|
|
|
Other Long-term
Liabilities
|
|
|
|
|
|
|
|
|
|
|
363,447
|
|
|
357,972
|
|
|
Shareholders'
Equity
|
|
|
|
|
|
|
|
|
|
|
2,172,630
|
|
|
2,043,440
|
|
|
|
|
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
$
|
3,383,184
|
|
|
$
|
3,128,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
For the Six Months
Ended
|
|
|
|
|
|
|
|
Jun 30,
2014
|
|
Jun 30,
2013
|
|
Mar 31,
2014
|
|
Jun 30,
2014
|
|
Jun 30,
2013
|
|
|
|
|
|
|
|
(in thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
$
|
927,407
|
|
|
$
|
820,372
|
|
|
$
|
840,201
|
|
|
$
|
1,767,608
|
|
|
$
|
1,538,924
|
|
|
Cost of services and
products
|
|
|
|
709,192
|
|
|
618,508
|
|
|
650,710
|
|
|
1,359,902
|
|
|
1,176,685
|
|
|
|
Gross
Margin
|
|
|
|
|
218,215
|
|
|
201,864
|
|
|
189,491
|
|
|
407,706
|
|
|
362,239
|
|
|
Selling, general and
administrative expense
|
|
56,904
|
|
|
55,527
|
|
|
56,629
|
|
|
113,533
|
|
|
107,612
|
|
|
|
Income from
Operations
|
|
161,311
|
|
|
146,337
|
|
|
132,862
|
|
|
294,173
|
|
|
254,627
|
|
|
Interest
income
|
|
|
|
41
|
|
|
243
|
|
|
79
|
|
|
120
|
|
|
433
|
|
|
Interest
expense
|
|
|
|
(398)
|
|
|
(553)
|
|
|
(411)
|
|
|
(809)
|
|
|
(1,316)
|
|
|
Equity earnings
(losses) of unconsolidated affiliates
|
|
8
|
|
|
(186)
|
|
|
(36)
|
|
|
(28)
|
|
|
(25)
|
|
|
Other income
(expense), net
|
|
|
|
(417)
|
|
|
(1,591)
|
|
|
294
|
|
|
(123)
|
|
|
(201)
|
|
|
|
Income before Income
Taxes
|
|
|
|
160,545
|
|
|
144,250
|
|
|
132,788
|
|
|
293,333
|
|
|
253,518
|
|
|
Provision for income
taxes
|
|
50,250
|
|
|
45,439
|
|
|
41,563
|
|
|
91,813
|
|
|
79,858
|
|
|
|
Net Income
|
|
|
|
|
$
|
110,295
|
|
|
$
|
98,811
|
|
|
$
|
91,225
|
|
|
$
|
201,520
|
|
|
$
|
173,660
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted shares outstanding
|
|
108,421
|
|
|
108,713
|
|
|
108,724
|
|
|
108,571
|
|
|
108,662
|
|
Diluted Earnings per
Share
|
|
$
|
1.02
|
|
|
$
|
0.91
|
|
|
$
|
0.84
|
|
|
$
|
1.86
|
|
|
$
|
1.60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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,
2014
|
|
Jun 30,
2013
|
|
Mar 31,
2014
|
|
Jun 30,
2014
|
|
Jun 30,
2013
|
|
|
|
|
|
|
($ in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Remotely Operated
Vehicles
|
|
Revenue
|
|
|
$
|
268,274
|
|
|
$
|
242,163
|
|
|
$
|
255,819
|
|
|
$
|
524,093
|
|
|
$
|
471,791
|
|
|
Gross
Margin
|
|
|
$
|
86,685
|
|
|
$
|
80,180
|
|
|
$
|
87,190
|
|
|
$
|
173,875
|
|
|
$
|
156,334
|
|
|
Operating
Income
|
|
|
$
|
75,825
|
|
|
$
|
69,219
|
|
|
$
|
76,740
|
|
|
$
|
152,565
|
|
|
$
|
135,054
|
|
|
Operating Income
%
|
|
|
28
|
%
|
|
29
|
%
|
|
30
|
%
|
|
29
|
%
|
|
29
|
%
|
|
Days
available
|
|
|
29,059
|
|
|
26,884
|
|
|
27,851
|
|
|
56,910
|
|
|
53,099
|
|
|
Days
utilized
|
|
|
24,510
|
|
|
22,362
|
|
|
23,869
|
|
|
48,379
|
|
|
44,066
|
|
|
Utilization
%
|
|
|
84
|
%
|
|
83
|
%
|
|
86
|
%
|
|
85
|
%
|
|
83
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subsea
Products
|
|
Revenue
|
|
|
$
|
327,252
|
|
|
$
|
258,016
|
|
|
$
|
260,010
|
|
|
$
|
587,262
|
|
|
$
|
472,021
|
|
|
Gross
Margin
|
|
|
$
|
99,558
|
|
|
$
|
82,389
|
|
|
$
|
75,129
|
|
|
$
|
174,687
|
|
|
$
|
144,734
|
|
|
Operating
Income
|
|
|
$
|
79,497
|
|
|
$
|
62,060
|
|
|
$
|
54,516
|
|
|
$
|
134,013
|
|
|
$
|
104,839
|
|
|
Operating Income
%
|
|
|
24
|
%
|
|
24
|
%
|
|
21
|
%
|
|
23
|
%
|
|
22
|
%
|
Backlog at end of
period
|
|
|
$
|
850,000
|
|
|
$
|
902,000
|
|
|
$
|
894,000
|
|
|
$
|
850,000
|
|
|
$
|
902,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subsea
Projects
|
|
Revenue
|
|
|
$
|
136,199
|
|
|
$
|
118,195
|
|
|
$
|
138,190
|
|
|
$
|
274,389
|
|
|
$
|
206,650
|
|
|
Gross
Margin
|
|
|
$
|
30,122
|
|
|
$
|
27,991
|
|
|
$
|
24,409
|
|
|
$
|
54,531
|
|
|
$
|
42,912
|
|
|
Operating
Income
|
|
|
$
|
25,863
|
|
|
$
|
23,990
|
|
|
$
|
20,537
|
|
|
$
|
46,400
|
|
|
$
|
35,610
|
|
|
Operating Income
%
|
|
|
19
|
%
|
|
20
|
%
|
|
15
|
%
|
|
17
|
%
|
|
17
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset
Integrity
|
|
|
Revenue
|
|
|
$
|
130,229
|
|
|
$
|
124,740
|
|
|
$
|
124,159
|
|
|
$
|
254,388
|
|
|
$
|
239,589
|
|
|
Gross
Margin
|
|
|
$
|
23,207
|
|
|
$
|
23,529
|
|
|
$
|
21,866
|
|
|
$
|
45,073
|
|
|
$
|
42,568
|
|
|
Operating
Income
|
|
|
$
|
15,915
|
|
|
$
|
16,639
|
|
|
$
|
14,085
|
|
|
$
|
30,000
|
|
|
$
|
28,978
|
|
|
Operating Income
%
|
|
|
12
|
%
|
|
13
|
%
|
|
11
|
%
|
|
12
|
%
|
|
12
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Advanced
Technologies
|
|
Revenue
|
|
|
$
|
65,453
|
|
|
$
|
77,258
|
|
|
$
|
62,023
|
|
|
$
|
127,476
|
|
|
$
|
148,873
|
|
|
Gross
Margin
|
|
|
$
|
5,597
|
|
|
$
|
14,945
|
|
|
$
|
7,727
|
|
|
$
|
13,324
|
|
|
$
|
28,253
|
|
|
Operating
Income
|
|
|
$
|
198
|
|
|
$
|
10,165
|
|
|
$
|
2,955
|
|
|
$
|
3,153
|
|
|
$
|
18,841
|
|
|
Operating Income
%
|
|
|
—
|
%
|
|
13
|
%
|
|
5
|
%
|
|
2
|
%
|
|
13
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unallocated
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
expenses
|
|
|
$
|
(26,954)
|
|
|
$
|
(27,170)
|
|
|
$
|
(26,830)
|
|
|
$
|
(53,784)
|
|
|
$
|
(52,562)
|
|
Operating income
expenses
|
|
|
$
|
(35,987)
|
|
|
$
|
(35,736)
|
|
|
$
|
(35,971)
|
|
|
$
|
(71,958)
|
|
|
$
|
(68,695)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
|
Revenue
|
|
|
$
|
927,407
|
|
|
$
|
820,372
|
|
|
$
|
840,201
|
|
|
$
|
1,767,608
|
|
|
$
|
1,538,924
|
|
|
Gross
Margin
|
|
|
$
|
218,215
|
|
|
$
|
201,864
|
|
|
$
|
189,491
|
|
|
$
|
407,706
|
|
|
$
|
362,239
|
|
|
Operating
Income
|
|
|
$
|
161,311
|
|
|
$
|
146,337
|
|
|
$
|
132,862
|
|
|
$
|
294,173
|
|
|
$
|
254,627
|
|
|
Operating Income
%
|
|
|
17
|
%
|
|
18
|
%
|
|
16
|
%
|
|
17
|
%
|
|
17
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SELECTED CASH FLOW
INFORMATION
|
|
|
|
|
|
|
Capital expenditures,
including acquisitions
|
|
|
$
|
157,450
|
|
|
$
|
81,138
|
|
|
$
|
104,038
|
|
|
$
|
261,488
|
|
|
$
|
175,315
|
|
Depreciation and
Amortization
|
|
|
$
|
56,057
|
|
|
$
|
50,173
|
|
|
$
|
53,351
|
|
|
$
|
109,408
|
|
|
$
|
100,025
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
For the Six Months
Ended
|
|
|
|
Jun 30,
2014
|
|
Jun 30,
2013
|
|
Mar 31,
2014
|
|
Jun 30,
2014
|
|
Jun 30,
2013
|
|
|
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Before
Interest, Taxes, Depreciation and Amortization (EBITDA)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
$
|
110,295
|
|
|
$
|
98,811
|
|
|
$
|
91,225
|
|
|
$
|
201,520
|
|
|
$
|
173,660
|
|
|
|
Depreciation and
Amortization
|
56,057
|
|
|
50,173
|
|
|
53,351
|
|
|
109,408
|
|
|
100,025
|
|
|
|
Subtotal
|
166,352
|
|
|
148,984
|
|
|
144,576
|
|
|
310,928
|
|
|
273,685
|
|
|
|
Interest
Income/Expense, Net
|
357
|
|
|
310
|
|
|
332
|
|
|
689
|
|
|
883
|
|
|
|
Provision for Income
Taxes
|
50,250
|
|
|
45,439
|
|
|
41,563
|
|
|
91,813
|
|
|
79,858
|
|
|
|
EBITDA
|
$
|
216,959
|
|
|
$
|
194,733
|
|
|
$
|
186,471
|
|
|
$
|
403,430
|
|
|
$
|
354,426
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014
Estimates
|
|
|
|
|
|
|
|
|
|
|
|
|
Low
|
|
High
|
|
|
|
|
|
|
|
|
(in
thousands)
|
|
|
Net Income
|
|
|
|
|
|
|
|
|
|
$
|
430,000
|
|
|
$
|
440,000
|
|
|
|
Depreciation and
Amortization
|
|
|
|
|
|
|
|
|
|
230,000
|
|
|
235,000
|
|
|
|
Subtotal
|
|
|
|
|
|
|
|
|
|
660,000
|
|
|
675,000
|
|
|
|
Interest
Income/Expense, Net
|
|
|
|
|
|
|
|
|
|
—
|
|
|
—
|
|
|
|
Provision for Income
Taxes
|
|
|
|
|
|
|
|
|
|
195,000
|
|
|
200,000
|
|
|
|
EBITDA
|
|
|
|
|
|
|
|
|
|
$
|
855,000
|
|
|
$
|
875,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SOURCE Oceaneering International, Inc.