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    Oceaneering Reports Fourth Quarter and Full Year 2016 Results

    February 08, 2017

    HOUSTON, Feb. 8, 2017 /PRNewswire/ -- Oceaneering International, Inc. ("Oceaneering") (NYSE: OII) today reported a net loss of $11.0 million, or $(0.11) per share, on revenue of $488 million for the three months ended December 31, 2016. Adjusted net income was $2.6 million, or $0.03 per share, excluding $12.9 million of pre-tax charges and an increase in the annual effective income tax rate recognized during the quarter. During the prior quarter ended September 30, 2016, Oceaneering reported a net loss of $11.8 million, or $(0.12) per share, on revenue of $549 million, and adjusted net income of $16.6 million, or $0.17 per share.

    For the full year 2016, Oceaneering reported net income of $24.6 million, or $0.25 per share, on revenue of $2.3 billion. Adjusted net income was $74.8 million, or $0.76 per share, excluding the $50.2 million after-tax impact of asset write-downs, restructuring expenses, allowances for bad debts and foreign currency losses, and higher-than-expected effective tax rate recognized during the year. This compared to 2015 net income of $231 million, or $2.34 per share, on revenue of $3.1 billion, and adjusted net income of $284 million, or $2.87 per share.

    Adjusted operating income, net income, earnings per share, and EBITDA and margins are non-GAAP measures which exclude the impacts of certain identified items. Reconciliations to the corresponding GAAP measures are shown in the tables Adjusted Net Income and Diluted Earnings per Share (EPS), Adjusted Operating Income and Margins by Segment, and EBITDA and Adjusted EBITDA and Margins by Segment. These tables are included below under the caption Reconciliations of Non-GAAP to GAAP Financial Information.

    Summary of Results

    (in thousands, except per share amounts)




    Three Months Ended


    Years Ended



    Dec 31,


    Sep 30,


    Dec 31,










    2016


    2015


    2016


    2016


    2015












    Revenue


    $

    488,445



    $

    722,066



    $

    549,275



    $

    2,271,603



    $

    3,062,754


    Gross Margin


    51,071



    106,122



    35,443



    279,227



    605,429


    Income (Loss) from Operations


    (3,859)



    45,756



    (11,856)



    70,764



    373,810


    Net Income (Loss)


    $

    (11,028)



    $

    27,505



    $

    (11,798)



    $

    24,586



    $

    231,011













    Diluted Earnings Per Share (EPS)


    $

    (0.11)



    $

    0.28



    $

    (0.12)



    $

    0.25



    $

    2.34


    For the fourth quarter, adjusted operating income was $21.6 million lower than that of the immediately preceding quarter due to reduced profit contributions from most of Oceaneering's segments, with the exception of Asset Integrity. Almost one-half of the decline was driven by lower activity levels and profitability in Subsea Projects. The increase in the 2016 effective tax rate was primarily due to a change in the mix of income or losses between the U.S. and certain foreign jurisdictions. This resulted in a recapture of prior year U.S. manufacturing deductions and a limitation of the current benefit from certain foreign tax payments.

    M. Kevin McEvoy, Chief Executive Officer of Oceaneering, stated, "Our fourth quarter operating results on an adjusted basis approximated our expectations and the consensus estimate. As industry conditions remained challenging, and our outlook for 2017 does not assume a pronounced recovery in demand for our services and products, our focus has been on organizing more effectively and managing our cost structure. Accordingly, these restructuring steps included a sizable reduction in our workforce. We made these difficult decisions to enable our organization to be leaner and appropriately sized for the expected level of business.

    "We believe our demonstrated cash flow generating capabilities and liquidity (including $450 million in cash at year end and a $500 million revolving credit facility) provide us ample resources not only to manage our business through the prolonged downturn in offshore activity, but also to position ourselves for the eventual upcycle. We intend to continue investing in our current and adjacent market niches, with more focus on our customers' operating expenditures and the production phase of the offshore oilfield life cycle.

    "Compared to the third quarter, on an adjusted basis, ROV operating income was down, resulting from a 14% reduction of revenue and 16% fewer days utilized. For the fourth quarter, ROV adjusted EBITDA margins remained respectable at 35%, compared to 36% in the third quarter.

    "During the fourth quarter we added one new ROV to our fleet, ending the year with a total of 280 vehicles. Our fleet utilization for the fourth quarter was 50%. Our drill support market share during this period was 53% of the 151 floating rigs under contract. As in recent quarters, the decline in the utilization percentage of our ROV fleet is attributable to the reduced number of working floating drilling rigs, and an overall low level of deepwater vessel activity. While we endeavor to place more of our ROVs on vessels, we need a sizable increase in our customers' offshore spending levels for there to be a discernible increase in ROV fleet utilization and profitability.

    "Sequentially, Subsea Products operating income, on an adjusted basis, declined as expected, due to lower margins on Manufactured Products as we processed backlog and new orders with lower pricing. Our Subsea Products backlog at December 31, 2016 was $431 million, compared to our September 30, 2016 backlog of $457 million. The backlog decline was primarily related to umbilicals. Our book-to-bill ratio was 0.82 and 0.68 for the fourth quarter and full year of 2016, respectively.

    "Compared to the third quarter, Subsea Projects adjusted operating income was down substantially due to a lower contribution from our diving operations, lower vessel pricing, the previously scheduled drydock of the Ocean Patriot, and a seasonal decrease in survey work in the Gulf of Mexico. Asset Integrity adjusted operating income was up, due to better execution in the completion of several jobs. Advanced Technologies operating income declined, primarily due to a seasonal slowdown in work for the U.S. Navy. Unallocated Expenses were essentially flat.

    "Looking forward, we are projecting a further decline in our profitability and to be marginally profitable at the operating income level on a consolidated basis for 2017. Below the operating income line, we are projecting a loss from our equity investment in the Medusa Spar as production has declined, and our interest expense is expected to be slightly higher in 2017 than 2016 due to higher rates and less interest being capitalized.

    "Operationally, we anticipate declines in profitability to occur in ROVs and Subsea Products, due primarily to the relatively strong adjusted operating results generated by these segments during the first half of 2016. We expect our Subsea Products operating margins to be in the mid- to high-single digit range considering the cost restructuring measures taken during the fourth quarter. Our Subsea Projects segment is expected to have another challenging year with reduced vessel activity offshore Angola, and continued competitive pressures on vessel dayrates in the spot "call out" market in the Gulf of Mexico. Asset Integrity results are projected to be down slightly year-over-year. For Advanced Technologies, operating income should improve due to a meaningful increase in activity and profit contribution levels within the commercial theme park arena, if the expected projects come to fruition. We expect higher Unallocated Expenses in 2017, as 2016 results included the impact of reversing earlier accruals associated with our long-term incentive compensation plans, as it became evident during the year our performance targets would not be achieved.

    "We believe our first quarter 2017 results will be considerably lower than our adjusted fourth quarter results due to a continuation of weak demand for our services and products, exacerbated by seasonality. We expect sequentially lower operating income primarily from our Asset Integrity business segment, and higher Unallocated Expenses. We also expect a discrete additional income tax provision in accordance with a new accounting standard associated with our share based incentive plan.

    "For 2017, we expect our organic capital expenditures to total between $90 million and $120 million, including approximately $55 million to $65 million of maintenance capital expenditure and some amounts required to complete the Jones Act vessel Ocean Evolution and the well intervention equipment recently purchased as part of our Blue Ocean Technologies acquisition. At an operating income break-even level, and with this level of organic growth, we should still generate a substantial amount of free cash flow in 2017.

    "Beyond 2017, with stable and improving oil prices, we foresee an increase in deepwater expenditures and improving demand for our services and products. Meanwhile, we continue to adjust our organization to be commensurate with the existing level of our business, and look for opportunities to resume growth organically and via acquisitions, while providing a dividend to shareholders."

    This release contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995, including, without limitation, statements as to the expectations, beliefs and future expected business, financial performance and prospects of the Company. More specifically, the forward-looking statements in this press release include the statements concerning Oceaneering's: belief that its restructuring steps will enable it to be leaner and appropriately sized for the expected level of business; belief that its demonstrated cash flow generating capabilities, liquidity, and credit facility provide it with ample resources to manage its business through the prolonged downturn in offshore activity and to position itself for the eventual upcycle; characterization of an upcycle as eventual; intention to invest in current and adjacent market niches, focusing more on its customers' operating expenditures and the production phase of the offshore oilfield life cycle; endeavors to place more ROVs on vessels; belief that it needs a sizable increase in its customers' offshore spending levels for there to be a discernible increase in its ROV fleet utilization and profitability; statements about backlog, to the extent it may be an indicator of future revenue or profitability; outlook for the full year and first quarter of 2017, and expected contributions of its segments to the operating results and the associated explanations; expectation about Subsea Products margins; our expectation that Advanced Technologies operating income should improve due to a meaningful increase in activity and profit contribution levels within the commercial theme park arena, if the expected projects come to fruition; expectations about higher interest rates and less interest being capitalized; expectation for a discrete additional income tax provision in accordance with a new accounting standard associated with its share base incentive plan; expectations about capital expenditures; expectations about free cash flow generation; expectations about deepwater expenditures and improving demand for its services and products; expectation to continue to adjust its organization to be commensurate with the existing level of its business; and intention to look for opportunities to resume growth organically and via acquisitions, while providing a dividend to shareholders. The forward-looking statements included in this release are based on our current expectations and are subject to certain risks, assumptions, trends and uncertainties that could cause actual results to differ materially from those indicated by the forward-looking statements. Among the factors that could cause actual results to differ materially include backlog, costs, capital expenditures, future earnings, capital allocation strategies, dividend levels, sustainability of dividend levels, liquidity, competitive position, financial flexibility, debt levels, forecasts or expectations regarding business outlook; growth for Oceaneering as a whole and for each of its segments (and for specific products or geographic areas within each segment); factors affecting the level of activity in the oil and gas industry; supply and demand of drilling rigs; oil and natural gas demand and production growth; oil and natural gas prices; fluctuations in currency markets worldwide; the loss of major contracts or alliances; future global economic conditions; and future results of operations. 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.

    Oceaneering is a global 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 more information on Oceaneering, please visit www.oceaneering.com.

    Contact:
    Suzanne Spera
    Director, Investor Relations
    Oceaneering International, Inc.
    713-329-4707
    investorrelations@oceaneering.com

    - Tables follow -

    OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES





















    CONDENSED CONSOLIDATED BALANCE SHEETS






































    Dec 31, 2016


    Dec 31, 2015
















    (in thousands)

    ASSETS

















    Current Assets (including cash and cash equivalents of $450,193 and $385,235)


    $

    1,262,595



    $

    1,517,493



    Net Property and Equipment







    1,153,258



    1,266,731



    Other Assets












    714,462



    645,312





    TOTAL ASSETS






    $

    3,130,315



    $

    3,429,536






















    LIABILITIES AND SHAREHOLDERS' EQUITY






    Current Liabilities












    $

    508,364



    $

    615,956



    Long-term Debt












    793,058



    795,836



    Other Long-term Liabilities






    312,250



    439,010



    Shareholders' Equity








    1,516,643



    1,578,734





    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY


    $

    3,130,315



    $

    3,429,536






















    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
































    For the Three Months Ended


    For the Year Ended












    Dec 31, 2016


    Dec 31, 2015


    Sep 30, 2016


    Dec 31, 2016


    Dec 31, 2015












    (in thousands, except per share amounts)






















    Revenue

    $

    488,445



    $

    722,066



    $

    549,275



    $

    2,271,603



    $

    3,062,754



    Cost of services and products


    437,374



    615,944



    513,832



    1,992,376



    2,457,325




    Gross Margin


    51,071



    106,122



    35,443



    279,227



    605,429



    Selling, general and administrative expense


    54,930



    60,366



    47,299



    208,463



    231,619




    Income (loss) from Operations


    (3,859)



    45,756



    (11,856)



    70,764



    373,810



    Interest income


    1,479



    171



    684



    3,900



    607



    Interest expense

    (6,394)



    (6,354)



    (6,325)



    (25,318)



    (25,050)



    Equity earnings (losses) of unconsolidated affiliates


    (299)



    917



    (246)



    244



    2,230



    Other income (expense), net


    579



    (453)



    570



    (6,244)



    (15,336)




    Income before Income Taxes


    (8,494)



    40,037



    (17,173)



    43,346



    336,261



    Provision for income taxes (benefit)


    2,534



    12,532



    (5,375)



    18,760



    105,250




    Net Income (loss)


    $

    (11,028)



    $

    27,505



    $

    (11,798)



    $

    24,586



    $

    231,011






















    Weighted average diluted shares outstanding


    98,064



    98,268



    98,061



    98,424



    98,808


    Diluted Earnings (Loss) per Share


    $

    (0.11)



    $

    0.28



    $

    (0.12)



    $

    0.25



    $

    2.34






















    The above Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Operations 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, 2016


    Dec 31, 2015


    Sep 30, 2016


    Dec 31, 2016


    Dec 31, 2015







    ($ in thousands)












    Remotely Operated Vehicles


    Revenue



    $

    108,352



    $

    173,424



    $

    126,507



    $

    522,121



    $

    807,723



    Gross Margin



    $

    13,079



    $

    25,206



    $

    (16,288)



    $

    59,038



    $

    227,330


    Operating Income (Loss)



    $

    4,031



    $

    16,621



    $

    (23,845)



    $

    25,193



    $

    192,514


    Operating Income (Loss) %



    4

    %


    10

    %


    (19)%



    5

    %


    24

    %


    Days available



    25,684



    30,323



    29,126



    112,588



    121,944



    Days utilized



    12,745



    18,760



    15,156



    59,963



    83,838



    Utilization %



    50

    %


    62

    %


    52

    %


    53

    %


    69

    %
















    Subsea Products


    Revenue



    $

    149,052



    $

    258,889



    $

    157,269



    $

    692,030



    $

    959,714



    Gross Margin



    $

    20,988



    $

    61,445



    $

    20,423



    $

    140,275



    $

    257,755


    Operating Income



    $

    4,068



    $

    37,206



    $

    6,109



    $

    75,938



    $

    175,585


    Operating Income %



    3

    %


    14

    %


    4

    %


    11

    %


    18

    %

    Backlog at end of period



    $

    431,000



    $

    652,000



    $

    457,000



    $

    431,000



    $

    652,000

















    Subsea Projects


    Revenue



    $

    94,096



    $

    131,397



    $

    110,799



    $

    472,979



    $

    604,484



    Gross Margin



    $

    6,245



    $

    15,953



    $

    19,321



    $

    51,392



    $

    114,672


    Operating Income



    $

    2,421



    $

    10,310



    $

    15,029



    $

    34,476



    $

    92,034


    Operating Income %



    3

    %


    8

    %


    14

    %


    7

    %


    15

    %
















    Asset Integrity



    Revenue



    $

    59,938



    $

    83,346



    $

    71,995



    $

    275,397



    $

    372,957



    Gross Margin



    $

    12,428



    $

    7,784



    $

    11,591



    $

    41,458



    $

    47,342


    Operating Income



    $

    3,197



    $

    85



    $

    4,725



    $

    7,551



    $

    18,235


    Operating Income %



    5

    %


    %


    7

    %


    3

    %


    5

    %
















    Advanced Technologies


    Revenue



    $

    77,007



    $

    75,010



    $

    82,705



    $

    309,076



    $

    317,876



    Gross Margin



    $

    7,692



    $

    2,715



    $

    9,665



    $

    33,784



    $

    30,034


    Operating Income (Loss)



    $

    1,331



    $

    (3,233)



    $

    4,357



    $

    11,809



    $

    9,689


    Operating Income (Loss) %



    2

    %


    (4)%



    5

    %


    4

    %


    3

    %
















    Unallocated Expenses












    Gross Margin



    $

    (9,361)



    $

    (6,981)



    $

    (9,269)



    $

    (46,720)



    $

    (71,704)


    Operating Income



    $

    (18,907)



    $

    (15,233)



    $

    (18,231)



    $

    (84,203)



    $

    (114,247)















    TOTAL



    Revenue



    $

    488,445



    $

    722,066



    $

    549,275



    $

    2,271,603



    $

    3,062,754



    Gross Margin



    $

    51,071



    $

    106,122



    $

    35,443



    $

    279,227



    $

    605,429


    Operating Income (Loss)



    $

    (3,859)



    $

    45,756



    $

    (11,856)



    $

    70,764



    $

    373,810


    Operating Income (Loss) %



    (1)%



    6

    %


    (2)%



    3

    %


    12

    %

    SELECTED CASH FLOW INFORMATION


















    For the Three Months Ended


    For the Year Ended







    Dec 31, 2016


    Dec 31, 2015


    Sep 30, 2016


    Dec 31, 2016


    Dec 31, 2015







    (in thousands)













    Capital expenditures, including acquisitions



    $

    56,624



    $

    54,801



    $

    32,945



    $

    142,513



    $

    423,988














    Depreciation and Amortization:












    Oilfield














    Remotely Operated Vehicles



    $

    29,552



    $

    36,128



    $

    43,705



    $

    140,967



    $

    143,364



    Subsea Products



    13,795



    11,545



    14,205



    53,759



    49,792



    Subsea Projects



    8,595



    5,723



    8,575



    34,042



    29,863



    Asset Integrity



    2,600



    2,491



    5,980



    14,336



    10,713


    Total Oilfield




    54,542



    55,887



    72,465



    243,104



    233,732


    Advanced Technologies



    791



    670



    789



    3,120



    2,549


    Unallocated Expenses



    954



    1,170



    946



    4,023



    4,954


    Total depreciation and amortization



    $

    56,287



    $

    57,727



    $

    74,200



    $

    250,247



    $

    241,235


    RECONCILIATIONS OF NON-GAAP TO GAAP FINANCIAL INFORMATION

    In addition to financial results determined in accordance with U.S. generally accepted accounting principles ("GAAP"), this Press Release also includes non-GAAP financial measures (as defined under SEC Regulation G). We have included Adjusted Net Income and Diluted Earnings per Share, each of which excludes the effects of certain specified items, as set forth in the tables that follow. As a result, these amounts are non-GAAP financial measures. We believe these are useful measures for investors to review because they provide consistent measures of the underlying results of our ongoing business. Furthermore, our management uses these measures as measures of the performance of our operations. We have also included disclosures of Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), EBITDA Margins and Free Cash Flow, as well as the following by segment: Adjusted Operating Income and Margins, EBITDA, Adjusted EBITDA and Adjusted EBITDA Margins. We define EBITDA margin as EBITDA divided by revenue. Adjusted EBITDA and Adjusted EBITDA Margins as well as Adjusted Operating Income and Margin and related information by segment exclude the effects of certain specified items, as set forth in the tables that follow. EBITDA and EBITDA margins, Adjusted EBITDA and Adjusted EBITDA margins, and Adjusted Operating Income and Margin and related information by segment are each non-GAAP financial measures. We define Free Cash Flow as cash flow provided by operating activities less organic capital expenditures (i.e., purchases of property and equipment other than those in business acquisitions). We have included these disclosures in this press release because EBITDA, EBITDA margins and Free Cash Flow are widely used by investors for valuation and comparing our financial performance with the performance of other companies in our industry, and the adjusted amounts thereof (as well as Adjusted Operating Income and Margin by Segment) provide more consistent measures than the unadjusted amounts. Furthermore, our management uses these measures for purposes of evaluating our financial performance. Our presentation of EBITDA, EBITDA margins and Free Cash Flow (and the Adjusted amounts thereof) may not be comparable to similarly titled measures other companies report. Non-GAAP financial measures should be viewed in addition to and not as substitutes for our reported operating results, cash flows or any other measure prepared and reported in accordance with GAAP. The tables that follow provide reconciliations of the non-GAAP measures used in this press release to the most directly comparable GAAP measures.




    Adjusted Operating Income and Margins by Segment






    For the Three Months Ended December 31, 2016





    Remotely Operated Vehicles


    Subsea Products


    Subsea Projects


    Asset Integrity


    Advanced Tech.


    Unalloc. Expenses


    Total





    ($ in thousands)

    Operating income (loss) as reported in accordance with GAAP


    $

    4,031



    $

    4,068



    $

    2,421



    $

    3,197



    $

    1,331



    $

    (18,907)



    $

    (3,859)


    Adjustments for the effects of:
















    Restructuring expenses


    3,786



    3,730



    2,054



    1,388



    532



    319



    11,809



    Allowance for bad debts


    855



    97



    194



    1,681







    2,827




    Total of adjustments


    4,641



    3,827



    2,248



    3,069



    532



    319



    14,636


    Adjusted amounts


    $

    8,672



    $

    7,895



    $

    4,669



    $

    6,266



    $

    1,863



    $

    (18,588)



    $

    10,777



















    Revenue


    $

    108,352



    $

    149,052



    $

    94,096



    $

    59,938



    $

    77,007





    $

    488,445


    Operating income (loss) % as reported in accordance with GAAP


    4

    %


    3

    %


    3

    %


    5

    %


    2

    %




    (1)

    %

    Operating income % using adjusted amounts


    8

    %


    5

    %


    5

    %


    10

    %


    2

    %




    2

    %







































    For the Three Months Ended December 31, 2015





    Remotely Operated Vehicles


    Subsea Products


    Subsea Projects


    Asset Integrity


    Advanced Tech.


    Unalloc. Expenses


    Total





    ($ in thousands)

    Operating income as reported in accordance with GAAP


    $

    16,621



    $

    37,206



    $

    10,310



    $

    85



    $

    (3,233)



    $

    (15,233)



    $

    45,756


    Adjustments for the effects of:
















    Inventory write-downs


    15,705



    1,260











    16,965



    Restructuring expenses


    3,130



    4,966



    1,846



    3,670



    47



    33



    13,692



    Non-current asset reserve




    6,583











    6,583



    Allowance for bad debts




    4,851











    4,851



    Fixed asset write-offs


    2,911













    2,911




    Total of adjustments


    21,746



    17,660



    1,846



    3,670



    47



    33



    45,002


    Adjusted amounts


    $

    38,367



    $

    54,866



    $

    12,156



    $

    3,755



    $

    (3,186)



    $

    (15,200)



    $

    90,758




































    Revenue


    $

    173,424



    $

    258,889



    $

    131,397



    $

    83,346



    $

    75,010





    $

    722,066


    Operating income (loss) % as reported in accordance with GAAP


    10

    %


    14

    %


    8

    %


    0

    %


    (4)

    %




    6

    %

    Operating income (loss) % using adjusted amounts


    22

    %


    21

    %


    9

    %


    5

    %


    (4)

    %




    13

    %




    Adjusted Operating Income and Margins by Segment























    For the Three Months Ended September 30, 2016





    Remotely Operated Vehicles


    Subsea Products


    Subsea Projects


    Asset Integrity


    Advanced Tech.


    Unalloc.
    Expenses


    Total





    ($ in thousands)

    Operating income (loss) as reported in accordance with GAAP


    $

    (23,845)



    $

    6,109



    $

    15,029



    $

    4,725



    $

    4,357



    $

    (18,231)



    $

    (11,856)


    Adjustments for the effects of:
















    Inventory write-downs


    25,200



    5,290











    30,490



    Fixed asset write-offs


    10,840



    2,950











    13,790




    Total of adjustments


    36,040



    8,240











    44,280


    Adjusted amounts


    $

    12,195



    $

    14,349



    $

    15,029



    $

    4,725



    $

    4,357



    $

    (18,231)



    $

    32,424




































    Revenue


    $

    126,507



    $

    157,269



    $

    110,799



    $

    71,995



    $

    82,705





    $

    549,275


    Operating income (loss) % as reported in accordance with GAAP


    (19)

    %


    4

    %


    14

    %


    7

    %


    5

    %




    (2)

    %

    Operating income % using adjusted amounts


    10

    %


    9

    %


    14

    %


    7

    %


    5

    %




    6

    %




    Adjusted Operating Income and Margins by Segment






    For the Year Ended December 31, 2016





    Remotely Operated Vehicles


    Subsea Products


    Subsea Projects


    Asset Integrity


    Advanced Tech.


    Unalloc. Expenses


    Total





    ($ in thousands)

    Operating income as reported in accordance with GAAP


    $

    25,193



    $

    75,938



    $

    34,476



    $

    7,551



    $

    11,809



    $

    (84,203)



    $

    70,764


    Adjustments for the effects of:
















    Inventory write-downs


    25,200



    5,290











    30,490



    Restructuring expenses


    3,786



    3,730



    2,054



    1,388



    532



    319



    11,809



    Allowance for bad debts


    1,195



    1,867



    321



    5,013







    8,396



    Fixed asset write-offs


    10,840



    2,950











    13,790




    Total of adjustments


    41,021



    13,837



    2,375



    6,401



    532



    319



    64,485


    Adjusted amounts


    $

    66,214



    $

    89,775



    $

    36,851



    $

    13,952



    $

    12,341



    $

    (83,884)



    $

    135,249



















    Revenue


    $

    522,121



    $

    692,030



    $

    472,979



    $

    275,397



    $

    309,076





    $

    2,271,603


    Operating income % as reported in accordance with GAAP


    5

    %


    11

    %


    7

    %


    3

    %


    4

    %




    3

    %

    Operating income % using adjusted amounts


    13

    %


    13

    %


    8

    %


    5

    %


    4

    %




    6

    %






















    For the Year Ended December 31, 2015





    Remotely Operated Vehicles


    Subsea Products


    Subsea Projects


    Asset Integrity


    Advanced Tech.


    Unalloc. Expenses


    Total





    ($ in thousands)

    Operating income as reported in accordance with GAAP


    $

    192,514



    $

    175,585



    $

    92,034



    $

    18,235



    $

    9,689



    $

    (114,247)



    $

    373,810


    Adjustments for the effects of:
















    Inventory write-downs


    15,705



    10,285











    25,990



    Restructuring expenses


    7,177



    8,672



    2,480



    6,436



    220



    419



    25,404



    Non-current asset reserve




    6,583











    6,583



    Allowance for bad debts




    4,851











    4,851



    Fixed asset write-offs


    2,911













    2,911




    Total of adjustments


    25,793



    30,391



    2,480



    6,436



    220



    419



    65,739


    Adjusted amounts


    $

    218,307



    $

    205,976



    $

    94,514



    $

    24,671



    $

    9,909



    $

    (113,828)



    $

    439,549



















    Revenue


    $

    807,723



    $

    959,714



    $

    604,484



    $

    372,957



    $

    317,876





    $

    3,062,754


    Operating income % as reported in accordance with GAAP


    24

    %


    18

    %


    15

    %


    5

    %


    3

    %




    12

    %

    Operating income % using adjusted amounts


    27

    %


    21

    %


    16

    %


    7

    %


    3

    %




    14

    %




    EBITDA and Adjusted EBITDA and Margins by Segment






    For the Three Months Ended December 31, 2016





    Remotely Operated Vehicles


    Subsea Products


    Subsea Projects


    Asset Integrity


    Advanced Tech.


    Unalloc. Expenses and other


    Total





    ($ in thousands)

    Operating income as reported in accordance with GAAP


    $

    4,031



    $

    4,068



    $

    2,421



    $

    3,197



    $

    1,331



    $

    (18,907)



    $

    (3,859)


    Adjustments for the effects of:
















    Depreciation and amortization


    29,552



    13,795



    8,595



    2,600



    791



    954



    56,287



    Other pre-tax












    (5)



    (5)



    EBITDA


    33,583



    17,863



    11,016



    5,797



    2,122



    (17,958)



    52,423


    Adjustments for the effects of:
















    Restructuring expenses


    3,786



    3,730



    2,054



    1,388



    532



    319



    11,809



    Allowance for bad debts


    855



    97



    194



    1,681







    2,827



    Foreign currency (gains) losses












    (1,689)



    (1,689)




    Total of adjustments


    4,641



    3,827



    2,248



    3,069



    532



    (1,370)



    12,947


    Adjusted EBITDA


    $

    38,224



    $

    21,690



    $

    13,264



    $

    8,866



    $

    2,654



    $

    (19,328)



    $

    65,370



















    Revenue


    $

    108,352



    $

    149,052



    $

    94,096



    $

    59,938



    $

    77,007





    $

    488,445


    Operating income (loss) % as reported in accordance with GAAP


    4

    %


    3

    %


    3

    %


    5

    %


    2

    %




    (1)

    %

    EBITDA Margin


    31

    %


    12

    %


    12

    %


    10

    %


    3

    %




    11

    %

    Adjusted EBITDA Margin


    35

    %


    15

    %


    14

    %


    15

    %


    3

    %




    13

    %






















    For the Three Months Ended December 31, 2015





    Remotely Operated Vehicles


    Subsea Products


    Subsea Projects


    Asset Integrity


    Advanced Tech.


    Unalloc. Expenses and other


    Total





    ($ in thousands)

    Operating income as reported in accordance with GAAP


    $

    16,621



    $

    37,206



    $

    10,310



    $

    85



    $

    (3,233)



    $

    (15,233)



    $

    45,756


    Adjustments for the effects of:
















    Depreciation and amortization


    36,128



    11,545



    5,723



    2,491



    670



    1,170



    57,727



    Other pre-tax












    184



    184



    EBITDA


    52,749



    48,751



    16,033



    2,576



    (2,563)



    (13,879)



    103,667


    Adjustments for the effects of:
















    Inventory write-downs


    15,705



    1,260











    16,965



    Restructuring expenses


    3,130



    4,966



    1,846



    3,670



    47



    33



    13,692



    Non-current asset reserve




    6,583











    6,583



    Allowance for bad debts




    4,851











    4,851



    Foreign currency (gains) losses












    938



    938




    Total of adjustments


    18,835



    17,660



    1,846



    3,670



    47



    971



    43,029


    Adjusted EBITDA


    $

    71,584



    $

    66,411



    $

    17,879



    $

    6,246



    $

    (2,516)



    $

    (12,908)



    $

    146,696



















    Revenue


    $

    173,424



    $

    258,889



    $

    131,397



    $

    83,346



    $

    75,010





    $

    722,066


    Operating income (loss) % as reported in accordance with GAAP


    10

    %


    14

    %


    8

    %


    0

    %


    (4)

    %




    6

    %

    EBITDA Margin


    30

    %


    19

    %


    12

    %


    3

    %


    (3)

    %




    14

    %

    Adjusted EBITDA Margin


    41

    %


    26

    %


    14

    %


    7

    %


    (3)

    %




    20

    %




    EBITDA and Adjusted EBITDA and Margins by Segment






    For the Three Months Ended September 30, 2016





    Remotely Operated Vehicles


    Subsea Products


    Subsea Projects


    Asset Integrity


    Advanced Tech.


    Unalloc. Expenses and other


    Total





    ($ in thousands)

    Operating income as reported in accordance with GAAP


    $

    (23,845)



    $

    6,109



    $

    15,029



    $

    4,725



    $

    4,357



    $

    (18,231)



    $

    (11,856)


    Adjustments for the effects of:
















    Depreciation and amortization


    43,705



    14,205



    8,575



    5,980



    789



    946



    74,200



    Other pre-tax












    37



    37



    EBITDA


    19,860



    20,314



    23,604



    10,705



    5,146



    (17,248)



    62,381


    Adjustments for the effects of:
















    Inventory write-downs


    25,200



    5,290











    30,490



    Foreign currency (gains) losses












    (643)



    (643)




    Total of adjustments


    25,200



    5,290









    (643)



    29,847


    Adjusted EBITDA


    $

    45,060



    $

    25,604



    $

    23,604



    $

    10,705



    $

    5,146



    $

    (17,891)



    $

    92,228



















    Revenue


    $

    126,507



    $

    157,269



    $

    110,799



    $

    71,995



    $

    82,705





    $

    549,275


    Operating income (loss) % as reported in accordance with GAAP


    (19)

    %


    4

    %


    14

    %


    7

    %


    5

    %




    (2)

    %

    EBITDA Margin


    16

    %


    13

    %


    21

    %


    15

    %


    6

    %




    11

    %

    Adjusted EBITDA Margin


    36

    %


    16

    %


    21

    %


    15

    %


    6

    %




    17

    %




    EBITDA and Adjusted EBITDA and Margins by Segment






    For the Year Ended December 31, 2016





    Remotely Operated Vehicles


    Subsea Products


    Subsea Projects


    Asset Integrity


    Advanced Tech.


    Unalloc. Expenses and other


    Total





    ($ in thousands)

    Operating income as reported in accordance with GAAP


    $

    25,193



    $

    75,938



    $

    34,476



    $

    7,551



    $

    11,809



    $

    (84,203)



    $

    70,764


    Adjustments for the effects of:
















    Depreciation and amortization


    140,967



    53,759



    34,042



    14,336



    3,120



    4,023



    250,247



    Other pre-tax












    (7,145)



    (7,145)



    EBITDA


    166,160



    129,697



    68,518



    21,887



    14,929



    (87,325)



    313,866


    Adjustments for the effects of:
















    Inventory write-downs


    25,200



    5,290











    30,490



    Restructuring expenses


    3,786



    3,730



    2,054



    1,388



    532



    319



    11,809



    Allowance for bad debts


    1,195



    1,867



    321



    5,013







    8,396



    Foreign currency (gains) losses












    4,770



    4,770




    Total of adjustments


    30,181



    10,887



    2,375



    6,401



    532



    5,089



    55,465


    Adjusted EBITDA


    $

    196,341



    $

    140,584



    $

    70,893



    $

    28,288



    $

    15,461



    $

    (82,236)



    $

    369,331



















    Revenue


    $

    522,121



    $

    692,030



    $

    472,979



    $

    275,397



    $

    309,076





    $

    2,271,603


    Operating income % as reported in accordance with GAAP


    5

    %


    11

    %


    7

    %


    3

    %


    4

    %




    3

    %

    EBITDA Margin


    32

    %


    19

    %


    14

    %


    8

    %


    5

    %




    14

    %

    Adjusted EBITDA Margin


    38

    %


    20

    %


    15

    %


    10

    %


    5

    %




    16

    %






















    For the Year Ended December 31, 2015





    Remotely Operated Vehicles


    Subsea Products


    Subsea Projects


    Asset Integrity


    Advanced Tech.


    Unalloc. Expenses and other


    Total





    ($ in thousands)

    Operating income as reported in accordance with GAAP


    $

    192,514



    $

    175,585



    $

    92,034



    $

    18,235



    $

    9,689



    $

    (114,247)



    $

    373,810


    Adjustments for the effects of:
















    Depreciation and amortization


    143,364



    49,792



    29,863



    10,713



    2,549



    4,954



    241,235



    Other pre-tax












    (14,183)



    (14,183)



    EBITDA


    335,878



    225,377



    121,897



    28,948



    12,238



    (123,476)



    600,862


    Adjustments for the effects of:
















    Inventory write-downs


    15,705



    10,285











    25,990



    Restructuring expenses


    7,177



    8,672



    2,480



    6,436



    220



    419



    25,404



    Non-current asset reserve




    6,583











    6,583



    Allowance for bad debts




    4,851











    4,851



    Foreign currency (gains) losses












    15,360



    15,360




    Total of adjustments


    22,882



    30,391



    2,480



    6,436



    220



    15,779



    78,188


    Adjusted EBITDA


    $

    358,760



    $

    255,768



    $

    124,377



    $

    35,384



    $

    12,458



    $

    (107,697)



    $

    679,050



















    Revenue


    $

    807,723



    $

    959,714



    $

    604,484



    $

    372,957



    $

    317,876





    $

    3,062,754


    Operating income % as reported in accordance with GAAP


    24

    %


    18

    %


    15

    %


    5

    %


    3

    %




    12

    %

    EBITDA Margin


    42

    %


    23

    %


    20

    %


    8

    %


    4

    %




    20

    %

    Adjusted EBITDA Margin


    44

    %


    27

    %


    21

    %


    9

    %


    4

    %




    22

    %

    SOURCE Oceaneering International, Inc.
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