Attached files
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| 8-K - 8-K - OCEANEERING INTERNATIONAL INC | a8-k_earningsxreleasex4qx2.htm |
| EX-99.2 - EXHIBIT 99.2 - OCEANEERING INTERNATIONAL INC | exhibit9928k4q2012.htm |
Exhibit 99.1
Oceaneering Reports Record Fourth Quarter and Annual Earnings
-- Reaffirms 2013 EPS Guidance of $3.00 to $3.25
February 13, 2013 - Houston, Texas - 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, 2012 | Dec 31, 2011 | Sept. 30, 2012 | Dec 31, 2012 | Dec 31, 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 | $2.16 | ||||||||||||||||
The above Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Income should be read in conjunction with the Company's latest Annual Report on Form 10-K and Quarterly Report on Form 10-Q. | |||||||||||||||||||||
SEGMENT INFORMATION | |||||||||||||||||||||
For the Three Months Ended | For the Year Ended | ||||||||||||||||||||
Dec 31, 2012 | Dec 31, 2011 | Sept. 30, 2012 | Dec 31, 2012 | Dec 31, 2011 | |||||||||||||||||
($ 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, 2012 | Dec 31, 2011 | Sept. 30, 2012 | Dec 31, 2012 | Dec 31, 2011 | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Earnings Before Interest, Taxes, 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 Income/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 Income/Expense, Net | — | — | ||||||||||||||||||
Provision for Income Taxes | 150,000 | 165,000 | ||||||||||||||||||
EBITDA | $ | 675,000 | $ | 730,000 | ||||||||||||||||