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    Oceaneering Reports Fourth Quarter and Full Year 2018 Results

    February 13, 2019

    HOUSTON, Feb. 13, 2019 /PRNewswire/ -- Oceaneering International, Inc. ("Oceaneering") (NYSE:OII) today reported a net loss of $64.1 million, or $(0.65) per share, on revenue of $495 million for the three months ended December 31, 2018.  Adjusted net income was $7.3 million, or $0.07 per share, reflecting the impact of $71.4 million of net adjustments, primarily a $76.4 million pre-tax goodwill impairment in its Subsea Projects segment.  During the prior quarter ended September 30, 2018, Oceaneering reported a net loss of $66.0 million, or $(0.67) per share, on revenue of $519 million, and an adjusted net loss of $13.9 million, or $(0.14) per share.

    For the full year 2018, Oceaneering reported a net loss of $212 million, or $(2.16) per share, on revenue of $1.9 billion.  Adjusted net loss was $69.7 million, or $(0.71) per share, reflecting the impact of $143 million of net adjustments.  These adjustments included the $76.4 million pre-tax goodwill impairment referred to above, $18.0 million of foreign currency exchange losses and $64.4 million of discrete tax benefits.  This compared to 2017 net income of $166.4 million, or $1.68 per share, on revenue of $1.9 billion, and adjusted net loss of $6.8 million, or $(0.07) per share.

    Adjusted operating income (loss), operating margins, net income (loss) and earnings (loss) per share, EBITDA and adjusted EBITDA (as well as EBITDA and adjusted EBITDA margin and forecasted 2019 EBITDA) and free cash flow are non-GAAP measures that exclude the impacts of certain identified items.  Reconciliations to the corresponding GAAP measures are shown in the tables Adjusted Net Income (Loss) and Diluted Earnings (Loss) per Share (EPS), EBITDA and EBITDA Margin, 2019 EBITDA Estimates, Free Cash Flow, Adjusted Operating Income (Loss) and Margin 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,










    2018


    2017


    2018


    2018


    2017












    Revenue


    $

    495,095



    $

    484,175



    $

    519,300



    $

    1,909,482



    $

    1,921,507


    Gross Margin


    33,035



    41,299



    47,635



    129,226



    194,610


    Income (Loss) from Operations


    (97,144)



    (9,115)



    (1,552)



    (145,482)



    10,656


    Net Income (Loss)


    $

    (64,139)



    $

    173,568



    $

    (65,979)



    $

    (212,327)



    $

    166,398













    Diluted Earnings (Loss) Per Share (EPS)


    $

    (0.65)



    $

    1.76



    $

    (0.67)



    $

    (2.16)



    $

    1.68


    Roderick A. Larson, President and Chief Executive Officer of Oceaneering, stated, "Overall, our fourth quarter adjusted operating results, and adjusted EBITDA of $31.1 million were in line with our expectations.  We are pleased to report continued growth in our Advanced Technologies segment, where we achieved record earnings in the fourth quarter.  As expected, due to seasonality and lower activity, our energy-related segments each reported a sequential quarterly decline in earnings, most notably in our Subsea Products and Subsea Projects segments.  Consolidated adjusted operating results were $19.1 million less than third quarter.

    "Sequentially, ROV operating results for the fourth quarter were down, due to 8% less revenue on 8% fewer days worked.  Our fleet utilization for the fourth quarter was 52%, down from 56% in the third quarter, primarily attributable to seasonality associated with the global vessel market.  Our fleet use during the fourth quarter was 67% in drill support and 33% in vessel-based activity, compared to the third quarter of 59% in drill support and 41% in vessel-based activity.  At the end of 2018, our ROV fleet size was 275 vehicles as compared to 279 vehicles at the end of the third quarter.

    "Subsea Products fourth quarter operating results were lower than the third quarter as a combined result of the Panama City manufacturing facility being offline for several weeks due to damage sustained from Hurricane Michael, and execution of lower margin work in our service and rental business.  Our Subsea Products backlog at December 31, 2018 was $332 million, compared to our September 30, 2018 backlog of $333 million.  Our book-to-bill ratio was 1.1 for the full year 2018.

    "Sequentially, Subsea Projects adjusted operating results declined for the fourth quarter, mainly due to a seasonal slowdown in intervention, maintenance and repair (IMR) and survey activities.  Additionally, our renewables business unit experienced a lull in activity and contract awards.  Asset Integrity operating income was lower due to a seasonal decrease in activity.

    "Advanced Technologies fourth quarter operating income grew significantly on a 6% increase in revenue, largely due to completion of certain jobs and close-out of contracts in our entertainment business and improved performance in our automated guided vehicle offerings, resulting in both a record quarter and year for this segment.  Unallocated Expenses were in line with expectations.

    "The full year of 2018 unfolded largely as we expected, with increased levels of oilfield activity being more than offset by lower pricing for our services and products.  Year over year, our 2018 consolidated revenue approximated that of 2017, with revenue increases in ROV, Subsea Projects, Asset Integrity and Advanced Technologies being offset by a substantial revenue decline in Subsea Products.  Despite record earnings in our Advanced Technologies segment, consolidated adjusted operating results decreased $74.2 million, with the largest declines in our Subsea Products and ROV segments.  In 2018, each of our operating segments contributed positive EBITDA, and overall we generated adjusted EBITDA of $143 million.  Annual capital expenditures totaled $178 million, including $68.6 million for acquisitions.  We ended the year with $354 million in cash.

    "We expect our 2019 financial results to improve year-over-year based on increased activity across all of our segments.  For the year, we anticipate generating $140 million to $180 million of EBITDA, with positive EBITDA contributions from each of our operating segments.  At the midpoint of this range, our EBITDA for 2019 would represent a 12% increase over 2018 adjusted EBITDA.  Apart from seasonality, we view pricing and margins in the current market to be relatively stable.  Operationally, we anticipate all of our segments, with the exception of Asset Integrity, to generate improved yearly results, with the largest increase in profitability occurring in Subsea Products and Advanced Technologies, beginning with the second quarter.

    "For ROVs, our expectation for improved results is based on increased days on hire, minor shifts in geographic mix, and generally stable pricing while managing continued mobilization and make-ready challenges.  We expect Subsea Products segment performance to improve as a result of securing good order intake in 2018 and early 2019, driving increased throughput within our manufactured products business unit, and higher activity levels and contribution from the services and rental unit.  With increased overall activity and better absorption of our fixed costs, we anticipate that our operating income margins will settle in the mid-single digit range.

    "Subsea Projects is expected to generate better results in 2019 with improvements in survey and renewables being modestly offset by reduced international and Gulf of Mexico vessel activity.  Vessel dayrates remain very competitive but appear to have stabilized.  We expect to place the Ocean Evolution into service during the second quarter of 2019.  Asset Integrity results are expected to be relatively flat year-over-year as contract pricing remains extremely competitive.

    "Our 2019 Advanced Technologies results are projected to increase, due to continued high demand and activity levels in our entertainment business, improvements in our automated guided vehicle operations, and modest growth in our government-related units.

    "For 2019, we anticipate Unallocated Expenses to increase due to the expectation for higher projected short- and long-term performance-based incentive compensation expense. Our Unallocated Expenses have been running at decreased levels over the last few years, as our financial results have not achieved performance targets, primarily due to the prolonged downturn in the offshore oilfield markets we serve. Based on an expected increase in offshore activities, a more stable pricing environment, realized benefits from ongoing cost and performance initiatives, and continued growth in our Advanced Technology segment, we expect to achieve our performance targets for 2019, as well as longer-term. Therefore, as we reestablish accruals for our short-term and long-term incentive compensation programs, Unallocated Expenses are expected to average $35 million per quarter.

    "Net interest expense is expected to be approximately $38 million, as a result of a full year of payments on our $300 million of senior notes issued in February 2018 and higher floating interest rates.  In addition, we will not be capitalizing interest on the Ocean Evolution for the full year.  We expect our 2019 income tax payments to be approximately $25 million.  This represents taxes incurred in countries that impose tax on the basis of in-country revenues and bear no relationship to profitability of such operations.  At this time, we do not foresee realizing a current-year tax benefit from our projected consolidated pre-tax loss, so any discussion of an estimated effective tax rate would not be meaningful.

    "Our first quarter 2019 operating results and EBITDA are forecasted to be substantially lower than our fourth quarter results due to the combination of the increase in Unallocated Expenses discussed above and a lower operating income contribution from Advanced Technologies, due to a lower number of job completions and contract close-outs in our commercial businesses.  We expect the combined results of our energy segments to be similar to the fourth quarter results.

    "Capital discipline is of utmost importance and we expect to generate positive free cash flow for 2019.  We expect our organic capital expenditures to total between $105 million and $125 million.  This includes approximately $40 million to $50 million of maintenance capital expenditures and $65 million to $75 million of growth capital expenditures, including the final payments to complete the Jones Act vessel Ocean Evolution and the purchase of equipment needed to support the Brazil drill pipe riser contract we were awarded in the third quarter of 2018.  In addition to our commitment to generate positive free cash flow in this market environment, we believe our strong cash position, $500 million undrawn revolving credit facility and debt maturity profile provide us ample resources and time to address future opportunities to improve our returns."

    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, future expected business and financial performance and prospects of Oceaneering.  More specifically, the forward-looking statements in this press release include statements about:  our backlog, to the extent backlog may be an indicator of future revenue or profitability; industry conditions; our financial results outlook for the full year and first quarter of 2019, including anticipated EBITDA and EBITDA contributions from each of our segments, and expected operating contributions from each of our segments and the associated explanations; our expectation about Subsea Products margins; the anticipated timing for the Ocean Evolution to be placed into service; our projected consolidated pre-tax operating loss; demand and activity levels in our business units; anticipated full year and quarterly Unallocated Expenses; our expectations about interest expense and the associated explanations; our expected income tax payments; the anticipated impact of current-year tax benefit on our projected consolidated pre-tax operating loss; our forecasted first quarter operating results from our segments and the associated comparisons and explanations; our expectation about the full year 2019 free cash flow; our expected 2019 capital expenditures; our belief that our strong cash position, revolving credit facility and debt maturity profile provide us with ample resources and time to address future opportunities to improve our returns.  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:  factors affecting the level of activity in the oil and gas industry, including worldwide demand for and prices of oil and natural gas, oil and natural gas production growth and the supply and demand of offshore drilling rigs; decisions about offshore developments to be made by oil and gas exploration, development and production companies; the use of subsea completions and our ability to capture associated market share; general economic and business conditions and industry trends; the strength of the industry segments in which we are involved; cancellations of contracts, change orders and other contractual modifications and the resulting adjustments to our backlog; collections from our customers; our future financial performance, including as a result of the availability, terms and deployment of capital; the consequences of significant changes in currency exchange rates; the volatility and uncertainties of credit markets; changes in tax laws, regulations and interpretation by taxing authorities; changes in, or our ability to comply with, other laws and governmental regulations, including those relating to the environment; the continued availability of qualified personnel; our ability to obtain raw materials and parts on a timely basis and, in some cases, from limited sources; operating risks normally incident to offshore exploration, development and production operations; hurricanes and other adverse weather and sea conditions; cost and time associated with drydocking of our vessels; the highly competitive nature of our businesses; adverse outcomes from legal or regulatory proceedings; the risks associated with integrating businesses we acquire; rapid technological changes; and social, political, military and economic situations in foreign countries where we do business and the possibilities of civil disturbances, war, other armed conflicts or terrorist attacks.  For a more complete discussion of these and other risk factors, please see Oceaneering's latest annual report on Form 10K and subsequent quarterly reports on Form 10Q filed with the Securities and Exchange Commission.

    Oceaneering is a global provider of engineered services and products, primarily to the offshore energy industry.  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:
    Mark Peterson
    Vice President, Corporate Development and Investor Relations
    Oceaneering International, Inc.
    713-329-4507
    investorrelations@oceaneering.com

     

    OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES





















    CONDENSED CONSOLIDATED BALANCE SHEETS






































    Dec 31, 2018


    Dec 31, 2017
















    (in thousands)

    ASSETS



















    Current Assets (including cash and cash equivalents of $354,259 and $430,316)


    $

    1,244,889



    $

    1,187,402



    Net Property and Equipment







    964,670



    1,064,204



    Other Assets












    615,439



    772,344





    TOTAL ASSETS






    $

    2,824,998



    $

    3,023,950






















    LIABILITIES AND EQUITY






    Current Liabilities












    $

    494,741



    $

    435,797



    Long-term Debt












    786,580



    792,312



    Other Long-term Liabilities






    128,379



    131,323



    Equity












    1,415,298



    1,664,518





    TOTAL LIABILITIES AND EQUITY


    $

    2,824,998



    $

    3,023,950






















    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
































    For the Three Months Ended


    For the Year Ended












    Dec 31, 2018


    Dec 31, 2017


    Sep 30, 2018


    Dec 31, 2018


    Dec 31, 2017












    (in thousands, except per share amounts)






















    Revenue








    $

    495,095



    $

    484,175



    $

    519,300



    $

    1,909,482



    $

    1,921,507



    Cost of services and products


    462,060



    442,876



    471,665



    1,780,256



    1,726,897




    Gross Margin


    33,035



    41,299



    47,635



    129,226



    194,610



    Selling, general and administrative expense


    53,730



    50,414



    49,187



    198,259



    183,954



    Goodwill impairment


    76,449







    76,449






    Income (loss) from Operations


    (97,144)



    (9,115)



    (1,552)



    (145,482)



    10,656



    Interest income

    1,775



    1,976



    2,645



    9,962



    7,355



    Interest expense


    (9,684)



    (5,300)



    (9,885)



    (37,742)



    (27,817)



    Equity earnings (losses) of unconsolidated affiliates


    (519)



    (185)



    (1,684)



    (3,783)



    (1,983)



    Other income (expense), net


    (2,390)



    (2,154)



    5,632



    (8,788)



    (6,055)




    Income (loss) before Income Taxes


    (107,962)



    (14,778)



    (4,844)



    (185,833)



    (17,844)



    Provision for income taxes (benefit)


    (43,823)



    (188,346)



    61,135



    26,494



    (184,242)




    Net income (loss)




    $

    (64,139)



    $

    173,568



    $

    (65,979)



    $

    (212,327)



    $

    166,398






















    Weighted average diluted shares outstanding


    98,534



    98,852



    98,533



    98,496



    98,764


    Diluted Earnings (loss) per Share



    $

    (0.65)



    $

    1.76



    $

    (0.67)



    $

    (2.16)



    $

    1.68



    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, 2018


    Dec 31, 2017


    Sep 30, 2018


    Dec 31, 2018


    Dec 31, 2017






    ($ in thousands)











    Remotely Operated Vehicles


    Revenue


    $

    96,736



    $

    91,584



    $

    105,045



    $

    394,801



    $

    393,655



    Gross Margin


    $

    6,764



    $

    9,154



    $

    8,757



    $

    32,652



    $

    50,937


    Operating Income (Loss)


    $

    (1,275)



    $

    1,056



    $

    772



    $

    1,641



    $

    22,366


    Operating Income (Loss) %


    (1)

    %


    1

    %


    1

    %


    %


    6

    %


    Days available


    25,272



    25,737



    25,668



    101,464



    101,951



    Days utilized


    13,147



    10,785



    14,249



    52,084



    47,282



    Utilization %


    52

    %


    42

    %


    56

    %


    51

    %


    46

    %















    Subsea Products


    Revenue


    $

    129,509



    $

    156,398



    $

    137,099



    $

    515,000



    $

    625,513



    Gross Margin


    $

    10,156



    $

    24,384



    $

    18,748



    $

    59,984



    $

    97,086


    Operating Income (Loss)


    $

    (3,803)



    $

    11,121



    $

    5,367



    $

    5,614



    $

    45,539


    Operating Income (Loss)%


    (3)

    %


    7

    %


    4

    %


    1

    %


    7

    %

    Backlog at end of period


    $

    332,000



    $

    276,000



    $

    333,000



    $

    332,000



    $

    276,000
















    Subsea Projects


    Revenue


    $

    89,295



    $

    73,376



    $

    104,972



    $

    329,163



    $

    291,993



    Gross Margin


    $

    2,795



    $

    4,348



    $

    10,829



    $

    9,596



    $

    25,021


    Operating Income (Loss)


    $

    (79,379)



    $

    580



    $

    6,088



    $

    (86,008)



    $

    10,279


    Operating Income (Loss) %


    (89)

    %


    1

    %


    6

    %


    (26)

    %


    4

    %















    Asset Integrity



    Revenue


    $

    62,830



    $

    64,830



    $

    62,346



    $

    253,886



    $

    236,778



    Gross Margin


    $

    8,086



    $

    9,243



    $

    9,430



    $

    34,995



    $

    37,382


    Operating Income


    $

    1,349



    $

    2,159



    $

    2,275



    $

    8,660



    $

    11,231


    Operating Income %


    2

    %


    3

    %


    4

    %


    3

    %


    5

    %















    Advanced Technologies


    Revenue


    $

    116,725



    $

    97,987



    $

    109,838



    $

    416,632



    $

    373,568



    Gross Margin


    $

    22,314



    $

    8,383



    $

    14,824



    $

    58,959



    $

    44,421


    Operating Income


    $

    15,406



    $

    2,779



    $

    8,960



    $

    33,920



    $

    22,039


    Operating Income %


    13

    %


    3

    %


    8

    %


    8

    %


    6

    %















    Unallocated Expenses











    Gross Margin


    $

    (17,080)



    $

    (14,213)



    $

    (14,953)



    $

    (66,960)



    $

    (60,237)


    Operating Income


    $

    (29,442)



    $

    (26,810)



    $

    (25,014)



    $

    (109,309)



    $

    (100,798)














    TOTAL



    Revenue


    $

    495,095



    $

    484,175



    $

    519,300



    $

    1,909,482



    $

    1,921,507



    Gross Margin


    $

    33,035



    $

    41,299



    $

    47,635



    $

    129,226



    $

    194,610


    Operating Income (Loss)


    $

    (97,144)



    $

    (9,115)



    $

    (1,552)



    $

    (145,482)



    $

    10,656


    Operating Income (Loss) %


    (20)

    %


    (2)

    %


    %


    (8)

    %


    1

    %

     

    SELECTED CASH FLOW INFORMATION
















    For the Three Months Ended


    For the Year Ended






    Dec 31, 2018


    Dec 31, 2017


    Sep 30, 2018


    Dec 31, 2018


    Dec 31, 2017






    (in thousands)












    Capital expenditures, including acquisitions


    $

    25,721



    $

    33,780



    $

    30,389



    $

    178,038



    $

    104,958













    Depreciation and Amortization:











    Energy Services and Products












    Remotely Operated Vehicles


    $

    27,972



    $

    27,445



    $

    27,428



    $

    111,311



    $

    113,979



    Subsea Products


    11,797



    13,437



    12,349



    53,085



    52,561



    Subsea Projects


    85,651



    8,127



    7,464



    114,481



    31,869



    Asset Integrity


    1,585



    2,336



    1,635



    6,904



    7,715


    Total Energy Services and Products


    127,005



    51,345



    48,876



    285,781



    206,124


    Advanced Technologies


    786



    794



    792



    3,081



    3,171


    Unallocated Expenses


    1,125



    900



    1,035



    4,728



    4,224



    Total Depreciation and Amortization


    $

    128,916



    $

    53,039



    $

    50,703



    $

    293,590



    $

    213,519


     

    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 as measures of the performance of our operations.  We have also included disclosures of Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), EBITDA Margin, 2019 EBITDA Estimates and Free Cash Flow, as well as the following by segment:  Adjusted Operating Income and Margin, EBITDA, EBITDA Margin, Adjusted EBITDA and Adjusted EBITDA Margin.  We define EBITDA Margin as EBITDA divided by revenue.  Adjusted EBITDA and Adjusted EBITDA Margin 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 Margin, Adjusted EBITDA and Adjusted EBITDA Margin, 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 Margin 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 Margin 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.

     

    RECONCILIATIONS OF NON-GAAP TO GAAP FINANCIAL INFORMATION


    Adjusted Net Income (Loss) and Diluted Earnings (Loss) per Share (EPS)






    For the Three Months Ended






    Dec 31, 2018

    Dec 31, 2017

    Sep 30, 2018






    Net Income


    Diluted EPS


    Net Income


    Diluted EPS


    Net Income


    Diluted EPS






    (in thousands, except per share amounts)

    Net Income (Loss) and Diluted EPS as reported in accordance with GAAP


    $

    (64,139)



    $

    (0.65)



    $

    173,568



    $

    1.76



    $

    (65,979)



    $

    (0.67)


    Pre-tax adjustments for the effects of:














    Charge related to prior year non-income related taxes






    700









    Goodwill impairment


    76,449













    Gain on sale of investment










    (9,293)





    Foreign currency losses


    2,559





    1,750





    3,745




    Total pre-tax adjustments


    79,008





    2,450





    (5,548)




















    Tax effect on pre-tax adjustments at the applicable jurisdictional statutory rate in effect for respective periods (2)


    (11,914)





    (858)





    1,165




    Discrete tax adjustments:














    Uncertain tax positions


    7,811









    3,571





    Tax reform


    560





    (222,019)





    7,932





    Valuation allowances


    (3,784)





    56,026





    39,136





    Other


    (241)





    (23,124)





    5,853




    Total discrete tax adjustments


    4,346





    (189,117)





    56,492




    Difference in tax provision on income before taxes in accordance with GAAP (1)






    5,944









    Total of adjustments


    71,440





    (181,581)





    52,109




    Adjusted Net Income (Loss) and Adjusted Diluted EPS


    $

    7,301



    $

    0.07



    $

    (8,013)



    $

    (0.08)



    $

    (13,870)



    $

    (0.14)


















    Weighted average diluted shares outstanding utilized for Adjusted Diluted EPS




    99,331





    98,279




    98,533

















    Adjusted Net Income (Loss) and Diluted Earnings (Loss) per Share (EPS)



    For the Year Ended



    Dec 31, 2018

    Dec 31, 2017



    Net Income


    Diluted EPS


    Net Income


    Diluted EPS



    (in thousands, except per share amounts)

    Net Income (Loss) and Diluted EPS as reported in accordance with GAAP


    $

    (212,327)



    $

    (2.16)



    $

    166,398



    $

    1.68


    Pre-tax adjustments for the effects of:










    Charge related to prior year non-income related taxes






    2,200





    Goodwill impairment


    76,449









    Property & equipment write-offs


    4,233









    Intangible asset write-offs


    3,458









    Gain on sale of investment


    (9,293)









    Foreign currency losses


    18,037





    5,156




    Total pre-tax adjustments


    92,884





    7,356




    Tax effect on pre-tax adjustments at the applicable jurisdictional statutory rate in effect for respective periods (2)


    (14,668)





    (2,575)




    Discrete tax adjustments:










    Uncertain tax positions





    12,644









    Tax reform





    8,492





    (222,019)





    Valuation allowances





    35,352





    56,026





    Other





    7,930





    (23,124)




    Total discrete tax adjustments


    64,418





    (189,117)




    Difference in tax provision on income before taxes in accordance with GAAP (1)






    11,121





    Total of adjustments






    142,634





    (173,215)




    Adjusted Net Income (Loss) and Adjusted Diluted EPS




    $

    (69,693)



    $

    (0.71)



    $

    (6,817)



    $

    (0.07)
















    Weighted average diluted shares outstanding utilized for Adjusted Net Income (Loss)




    98,496





    98,238



    Note:





    (1)

    For consistency in presentation, the difference in tax provision on income before taxes is computed using the U.S. statutory rate of 35% for 2017, in determining Adjusted Net Income (Loss) for the respective periods.  This is not calculated for the three months and twelve months ended December 31, 2018, and three months ended September 30, 2018 due to changes in U.S. tax law.



    (2)

    For the three months and twelve months ended December 31, 2018, $22.3 million of goodwill impairment is not deductible for tax purposes.


     

    EBITDA and EBITDA Margins
















    For the Three Months Ended


    For the Year Ended




    Dec 31, 2018


    Dec 31, 2017


    Sep 30, 2018


    Dec 31, 2018


    Dec 31, 2017




    ($ in thousands)













    Net income (loss)


    $

    (64,139)



    $

    173,568



    $

    (65,979)



    $

    (212,327)



    $

    166,398


    Depreciation and amortization


    128,916



    53,039



    50,703



    293,590



    213,519



    Subtotal


    64,777



    226,607



    (15,276)



    81,263



    379,917


    Interest expense, net of interest income


    7,909



    3,324



    7,240



    27,780



    20,462


    Amortization included in interest expense


    (333)



    (283)



    (332)



    (1,772)



    (1,132)


    Provision for income taxes (benefit)


    (43,823)



    (188,346)



    61,135



    26,494



    (184,242)



    EBITDA


    $

    28,530



    $

    41,302



    $

    52,767



    $

    133,765



    $

    215,005














    Revenue


    $

    495,095



    $

    484,175



    $

    519,300



    $

    1,909,482



    $

    1,921,507














    EBITDA margin %


    6

    %


    9

    %


    10

    %


    7

    %


    11

    %













     

    2019 EBITDA Estimates








    Low


    High



    (in thousands)

    Loss before income taxes


    $

    (110,000)



    $

    (70,000)


    Depreciation and amortization


    212,000



    212,000



    Subtotal


    102,000



    142,000


    Interest expense, net of interest income


    38,000



    38,000



    EBITDA


    $

    140,000



    $

    180,000












    Free Cash Flows



    For the Year Ended



    Dec 31, 2018


    Dec 31, 2017



    (in thousands)

    Net income (loss)


    $

    (212,327)



    $

    166,398


    Depreciation and amortization


    293,590



    213,519


    Other increases (decreases) in cash from operating activities


    (44,696)



    (243,439)


    Cash flow provided by operating activities


    36,567



    136,478


    Purchases of property and equipment


    (109,467)



    (93,680)


    Free Cash Flow


    $

    (72,900)



    $

    42,798







     

    Adjusted Operating Income (Loss) and Margins by Segment






    For the Three Months Ended December 31, 2018





    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


    $

    (1,275)



    $

    (3,803)



    $

    (79,379)



    $

    1,349



    $

    15,406



    $

    (29,442)



    $

    (97,144)


    Adjustments for the effects of:
















    Goodwill impairment






    76,449









    76,449




    Total of adjustments






    76,449









    76,449


    Adjusted operating income (loss)


    $

    (1,275)



    $

    (3,803)



    $

    (2,930)



    $

    1,349



    $

    15,406



    $

    (29,442)



    $

    (20,695)



















    Revenue


    $

    96,736



    $

    129,509



    $

    89,295



    $

    62,830



    $

    116,725





    $

    495,095


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


    (1)

    %


    (3)

    %


    (89)

    %


    2

    %


    13

    %




    (20)

    %

    Operating income (loss) % using adjusted amounts


    (1)

    %


    (3)

    %


    (3)

    %


    2

    %


    13

    %




    (4)

    %







































    For the Three Months Ended December 31, 2017





    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


    $

    1,056



    $

    11,121



    $

    580



    $

    2,159



    $

    2,779



    $

    (26,810)



    $

    (9,115)


    Adjustments for the effects of:
















    Charge related to prior year non-income related taxes


    600



    100











    700




    Total of adjustments


    600



    100











    700


    Adjusted operating income (loss)


    $

    1,656



    $

    11,221



    $

    580



    $

    2,159



    $

    2,779



    $

    (26,810)



    $

    (8,415)




































    Revenue


    $

    91,584



    $

    156,398



    $

    73,376



    $

    64,830



    $

    97,987





    $

    484,175


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


    1

    %


    7

    %


    1

    %


    3

    %


    3

    %




    (2)%


    Operating income (loss) % using adjusted amounts


    2

    %


    7

    %


    1

    %


    3

    %


    3

    %




    (2)%

















    For the Three Months Ended September 30, 2018





    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


    $

    772



    $

    5,367



    $

    6,088



    $

    2,275



    $

    8,960



    $

    (25,014)



    $

    (1,552)


    Adjusted operating income (loss)


    $

    772



    $

    5,367



    $

    6,088



    $

    2,275



    $

    8,960



    $

    (25,014)



    $

    (1,552)




































    Revenue


    $

    105,045



    $

    137,099



    $

    104,972



    $

    62,346



    $

    109,838





    $

    519,300


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


    1

    %


    4

    %


    6

    %


    4

    %


    8

    %




    %

    Operating income (loss) % using adjusted amounts


    1

    %


    4

    %


    6

    %


    4

    %


    8

    %




    %


     

    Adjusted Operating Income (Loss) and Margins by Segment






    For the Year Ended December 31, 2018





    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


    $

    1,641



    $

    5,614



    $

    (86,008)



    $

    8,660



    $

    33,920



    $

    (109,309)



    $

    (145,482)


    Adjustments for the effects of:
















    Goodwill impairment






    76,449









    76,449



    Property & equipment write-offs


    617



    1,531



    2,085









    4,233



    Intangible assets write-offs






    3,458









    3,458




    Total of adjustments


    617



    1,531



    81,992









    84,140


    Adjusted operating income (loss)


    $

    2,258



    $

    7,145



    $

    (4,016)



    $

    8,660



    $

    33,920



    $

    (109,309)



    $

    (61,342)



















    Revenue


    $

    394,801



    $

    515,000



    $

    329,163



    $

    253,886



    $

    416,632





    $

    1,909,482


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


    %


    1

    %


    (26)

    %


    3

    %


    8

    %




    (8)

    %

    Operating income (loss) % using adjusted amounts


    1

    %


    1

    %


    (1)

    %


    3

    %


    8

    %




    (3)

    %






















    For the Year Ended December 31, 2017





    Remotely Operated Vehicles


    Subsea Products


    Subsea Projects


    Asset Integrity


    Advanced Tech.


    Unalloc. Expenses


    Total





    ($ in thousands)

    Operating income as reported in accordance with GAAP


    $

    22,366



    $

    45,539



    $

    10,279



    $

    11,231



    $

    22,039



    $

    (100,798)



    $

    10,656


    Adjustments for the effects of:
















    Charge related to prior year non-income related taxes


    1,875



    325











    2,200




    Total of adjustments


    1,875



    325











    2,200


    Adjusted operating income


    $

    24,241



    $

    45,864



    $

    10,279



    $

    11,231



    $

    22,039



    $

    (100,798)



    $

    12,856



















    Revenue


    $

    393,655



    $

    625,513



    $

    291,993



    $

    236,778



    $

    373,568





    $

    1,921,507


    Operating income % as reported in accordance with GAAP


    6

    %


    7

    %


    4

    %


    5

    %


    6

    %




    1

    %

    Operating income % using adjusted amounts


    6

    %


    7

    %


    4

    %


    5

    %


    6

    %




    1

    %


     

    EBITDA and Adjusted EBITDA and Margins by Segment






    For the Three Months Ended December 31, 2018





    Remotely
    Operated
    Vehicles


    Subsea
    Products


    Subsea
    Projects


    Asset
    Integrity


    Advanced
    Tech.


    Unalloc.
    Expenses
    and other


    Total





    ($ in thousands)

    Operating income (loss) as reported in accordance with GAAP


    $

    (1,275)



    $

    (3,803)



    $

    (79,379)



    $

    1,349



    $

    15,406



    $

    (29,442)



    $

    (97,144)


    Adjustments for the effects of:
















    Depreciation and amortization


    27,972



    11,797



    85,651



    1,585



    786



    1,125



    128,916



    Other pre-tax












    (3,242)



    (3,242)



    EBITDA


    26,697



    7,994



    6,272



    2,934



    16,192



    (31,559)



    28,530


    Adjustments for the effects of:
















    Foreign currency losses












    2,559



    2,559




    Total of adjustments












    2,559



    2,559


    Adjusted EBITDA


    $

    26,697



    $

    7,994



    $

    6,272



    $

    2,934



    $

    16,192



    $

    (29,000)



    $

    31,089



















    Revenue


    $

    96,736



    $

    129,509



    $

    89,295



    $

    62,830



    $

    116,725





    $

    495,095


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


    (1)

    %


    (3)

    %


    (89)

    %


    2

    %


    13

    %




    (20)

    %

    EBITDA Margin


    28

    %


    6

    %


    7

    %


    5

    %


    14

    %




    6

    %

    Adjusted EBITDA Margin


    28

    %


    6

    %


    7

    %


    5

    %


    14

    %




    6

    %






















    For the Three Months Ended December 31, 2017





    Remotely
    Operated
    Vehicles


    Subsea
    Products


    Subsea
    Projects


    Asset
    Integrity


    Advanced
    Tech.


    Unalloc.
    Expenses
    and other


    Total





    ($ in thousands)

    Operating income (loss) as reported in accordance with GAAP


    $

    1,056



    $

    11,121



    $

    580



    $

    2,159



    $

    2,779



    $

    (26,810)



    $

    (9,115)


    Adjustments for the effects of:
















    Depreciation and amortization


    27,445



    13,437



    8,127



    2,336



    794



    900



    53,039



    Other pre-tax












    (2,622)



    (2,622)



    EBITDA


    28,501



    24,558



    8,707



    4,495



    3,573



    (28,532)



    41,302


    Adjustments for the effects of:
















    Charge related to prior year non-income related taxes


    600



    100











    700



    Foreign currency losses












    1,750



    1,750




    Total of adjustments


    600



    100









    1,750



    2,450


    Adjusted EBITDA


    $

    29,101



    $

    24,658



    $

    8,707



    $

    4,495



    $

    3,573



    $

    (26,782)



    $

    43,752



















    Revenue


    $

    91,584



    $

    156,398



    $

    73,376



    $

    64,830



    $

    97,987





    $

    484,175


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


    1

    %


    7

    %


    1

    %


    3

    %


    3

    %




    (2)

    %

    EBITDA Margin


    31

    %


    16

    %


    12

    %


    7

    %


    4

    %




    9

    %

    Adjusted EBITDA Margin


    32

    %


    16

    %


    12

    %


    7

    %


    4

    %




    9

    %















    For the Three Months Ended September 30, 2018





    Remotely
    Operated
    Vehicles


    Subsea
    Products


    Subsea
    Projects


    Asset
    Integrity


    Advanced
    Tech.


    Unalloc.
    Expenses
    and other


    Total





    ($ in thousands)

    Operating income (loss) as reported in accordance with GAAP


    $

    772



    $

    5,367



    $

    6,088



    $

    2,275



    $

    8,960



    $

    (25,014)



    $

    (1,552)


    Adjustments for the effects of:
















    Depreciation and amortization


    27,428



    12,349



    7,464



    1,635



    792



    1,035



    50,703



    Other pre-tax












    3,616



    3,616



    EBITDA


    28,200



    17,716



    13,552



    3,910



    9,752



    (20,363)



    52,767


    Adjustments for the effects of:
















    Gain on sale of investment












    (9,293)



    (9,293)



    Foreign currency losses












    3,745



    3,745




    Total of adjustments












    (5,548)



    (5,548)


    Adjusted EBITDA


    $

    28,200



    $

    17,716



    $

    13,552



    $

    3,910



    $

    9,752



    $

    (25,911)



    $

    47,219



















    Revenue


    $

    105,045



    $

    137,099



    $

    104,972



    $

    62,346



    $

    109,838





    $

    519,300


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


    1

    %


    4

    %


    6

    %


    4

    %


    8

    %




    %

    EBITDA Margin


    27

    %


    13

    %


    13

    %


    6

    %


    9

    %




    10

    %

    Adjusted EBITDA Margin


    27

    %


    13

    %


    13

    %


    6

    %


    9

    %




    9

    %


















     

    EBITDA and Adjusted EBITDA and Margins by Segment






    For the Year Ended December 31, 2018





    Remotely
    Operated
    Vehicles


    Subsea
    Products


    Subsea
    Projects


    Asset
    Integrity


    Advanced
    Tech.


    Unalloc.
    Expenses
    and other


    Total





    ($ in thousands)

    Operating income (loss) as reported in accordance with GAAP


    $

    1,641



    $

    5,614



    $

    (86,008)



    $

    8,660



    $

    33,920



    $

    (109,309)



    $

    (145,482)


    Adjustments for the effects of:
















    Depreciation and amortization


    111,311



    53,085



    114,481



    6,904



    3,081



    4,728



    293,590



    Other pre-tax












    (14,343)



    (14,343)



    EBITDA


    112,952



    58,699



    28,473



    15,564



    37,001



    (118,924)



    133,765


    Adjustments for the effects of:
















    Gain on sale of investment












    (9,293)



    (9,293)



    Foreign currency losses












    18,037



    18,037




    Total of adjustments












    8,744



    8,744


    Adjusted EBITDA


    $

    112,952



    $

    58,699



    $

    28,473



    $

    15,564



    $

    37,001



    $

    (110,180)



    $

    142,509



















    Revenue


    $

    394,801



    $

    515,000



    $

    329,163



    $

    253,886



    $

    416,632





    $

    1,909,482


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


    %


    1

    %


    (26)

    %


    3

    %


    8

    %




    (8)

    %

    EBITDA Margin


    29

    %


    11

    %


    9

    %


    6

    %


    9

    %




    7

    %

    Adjusted EBITDA Margin


    29

    %


    11

    %


    9

    %


    6

    %


    9

    %




    7

    %






















    For the Year Ended December 31, 2017





    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


    $

    22,366



    $

    45,539



    $

    10,279



    $

    11,231



    $

    22,039



    $

    (100,798)



    $

    10,656


    Adjustments for the effects of:
















    Depreciation and amortization


    113,979



    52,561



    31,869



    7,715



    3,171



    4,224



    213,519



    Other pre-tax












    (9,170)



    (9,170)



    EBITDA


    136,345



    98,100



    42,148



    18,946



    25,210



    (105,744)



    215,005


    Adjustments for the effects of:
















    Charge related to prior year non-income related taxes


    1,875



    325











    2,200



    Foreign currency losses












    5,156



    5,156




    Total of adjustments


    1,875



    325









    5,156



    7,356


    Adjusted EBITDA


    $

    138,220



    $

    98,425



    $

    42,148



    $

    18,946



    $

    25,210



    $

    (100,588)



    $

    222,361



















    Revenue


    $

    393,655



    $

    625,513



    $

    291,993



    $

    236,778



    $

    373,568





    $

    1,921,507


    Operating income % as reported in accordance with GAAP


    6

    %


    7

    %


    4

    %


    5

    %


    6

    %




    1

    %

    EBITDA Margin


    35

    %


    16

    %


    14

    %


    8

    %


    7

    %




    11

    %

    Adjusted EBITDA Margin


    35

    %


    16

    %


    14

    %


    8

    %


    7

    %




    12

    %

     

    Cision View original content:http://www.prnewswire.com/news-releases/oceaneering-reports-fourth-quarter-and-full-year-2018-results-300795369.html

    SOURCE Oceaneering International, Inc.

    Categories: Press Releases
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