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| 8-K - 8-K - OCEANEERING INTERNATIONAL INC | a8-k_earningsxreleasex4qx2.htm |
| EX-99.2 - PRESS RELEASE DATED FEB 18 2014 REGARDING DIVIDEND - OCEANEERING INTERNATIONAL INC | exhibit9928k4q2013.htm |
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 | |||||||||||||||||