• Industries
  • Integrated Solutions
  • Products and Services
  • Careers
  • Financial Press Releases

  • Industries
  • What's Next
    Discover How We Are
    Connecting What’s Needed with What’s Next™
    Find Out What's Next
  • Products & Services
  • Investor Relations
  • View all news

    Oceaneering Reports Fourth Quarter and Full Year 2019 Results

    February 24, 2020

    HOUSTON, Feb. 24, 2020 /PRNewswire/ -- Oceaneering International, Inc. ("Oceaneering") (NYSE:OII) today reported a net loss of $263 million, or $(2.66) per share, on revenue of $561 million for the three months ended December 31, 2019.  Adjusted net income was $2.5 million, or $0.03 per share, reflecting the impact of $255 million of pre-tax adjustments, primarily $240 million associated with asset impairments, write-downs and write-offs recognized during the quarter.  During the prior quarter ended September 30, 2019, Oceaneering reported a net loss of $25.5 million, or $(0.26) per share, on revenue of $498 million, and an adjusted net loss of $29.7 million, or $(0.30) per share.

    For the full year 2019, Oceaneering reported a net loss of $348 million, or $(3.52) per share, on revenue of $2 billion.  Adjusted net loss was $83 million, or $(0.84) per share, reflecting the impact of $258 million of pre-tax adjustments, primarily $240 million associated with asset impairments, write-downs and write-offs recognized during the year.  This compared to 2018 net loss of $212 million, or $(2.16) per share, on revenue of $1.9 billion, and adjusted net loss of $69.7 million, or $(0.71) 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 margins and forecasted 2020 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 Margins, 2020 EBITDA Estimates, Free Cash Flow, Adjusted Operating Income (Loss) 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


    Year Ended



    Dec 31,


    Sep 30,


    Dec 31,










    2019


    2018


    2019


    2019


    2018












    Revenue


    $

    560,810



    $

    495,095



    $

    497,647



    $

    2,048,124



    $

    1,909,482

    Gross Margin


    (20,387)



    33,035



    49,061



    98,244



    129,226

    Income (Loss) from Operations


    (254,170)



    (97,144)



    (5,194)



    (290,713)



    (145,482)

    Net Income (Loss)


    (262,912)



    (64,139)



    (25,523)



    (348,444)



    (212,327)












    Diluted Earnings (Loss) Per Share


    $

    (2.66)



    $

    (0.65)



    $

    (0.26)



    $

    (3.52)



    $

    (2.16)

    Roderick A. Larson, President and Chief Executive Officer of Oceaneering, stated, "We were pleased that our consolidated fourth quarter adjusted EBITDA of $48.7 million exceeded both our guidance and consensus estimates.  Our fourth quarter results reflect higher activity levels, and we were encouraged that four of our five operating segments recorded sequential improvements in adjusted operating results and adjusted EBITDA.  As a result of the free cash flow generated during the fourth quarter, primarily due to a reduction in working capital, our cash position as of December 31, 2019 increased to $374 million.

    "During the quarter, we recognized certain non-cash charges related to impairments to the carrying value of several of our vessels and certain other assets, including goodwill and intangible assets, as market conditions no longer support the prior valuations for these assets.  A small portion of the asset write-downs related to the retirement of 30 ROVs from our fleet.  Additionally, we recognized restructuring costs as we continue to focus our efforts on adapting our asset base, geographic footprint and staffing levels for the realities of the markets we serve.

    "Sequentially, ROV days on hire declined as expected by 2%, however a 5% increase in average revenue per day on hire resulted in a 3% increase in revenue for the fourth quarter. Adjusted operating results declined due to costs incurred to prepare our fleet for an anticipated increase in activity during 2020. These preparation costs were the leading contributor to the decline of our ROV quarterly adjusted EBITDA margin to 27%, from the 31% achieved during the first nine months of 2019.

    "Our fleet utilization for the fourth quarter was 58%, down from 60% in the third quarter, primarily due to normal seasonality associated with the global vessel market.  Our fourth quarter fleet use was 64% in drill support and 36% in vessel-based activity, compared to 63% and 37%, respectively, during the third quarter.  At the end of December, we had ROV contracts on 98 of the 156 floating rigs under contract, or 63%.

    "At the end of 2019, our ROV fleet size was 250 vehicles, as compared to 276 vehicles at the end of the third quarter.  This reflects the retirement of 30 vehicles from our active fleet during the quarter and the addition of 4 units.  The retired ROVs provided approximately 2% of the total days worked during the fourth quarter.  Pro forma fourth quarter utilization, reflecting these vehicles as if they had been retired effective as of the beginning of the quarter, was 64%.

    "Subsea Products fourth quarter adjusted operating results were essentially flat with the third quarter on higher revenue.  As projected, increased throughput within our manufactured products business was somewhat offset by lower seasonal demand within our service and rental business.  The difference in revenue mix between our manufactured products business and our service and rental business resulted in a quarterly adjusted operating margin decline to 8.0% for the fourth quarter from 8.8% for the third quarter of 2019.  Our Subsea Products backlog on December 31, 2019 was $630 million, compared to our September 30, 2019 backlog of $609 million.  Our book-to-bill ratio of 1.5, for the full year 2019, was slightly favorable to our guidance range.

    "Sequentially, Subsea Projects adjusted operating results improved substantially on higher revenue.  This improvement was primarily due to better-than-anticipated Gulf of Mexico intervention, maintenance and repair (IMR) activity, and higher survey services activity from several geoscience and marine construction projects.  Asset Integrity adjusted operating results improved on a modest increase in revenue.

    "As compared to the third quarter, Advanced Technologies adjusted fourth quarter operating income increased on higher revenue.  However, these results were disappointing as performance fell well short of our guidance because the expected improvement in entertainment business operating margins was not achieved.  This under-performance was chiefly due to cost overruns on certain completed projects, postponement in project awards, and customer-requested delays in project progression.  During the fourth quarter, our government business performed well, as anticipated. Unallocated Expenses were in line with expectations.

    "The full year 2019 consolidated adjusted financial results were consistent with our guidance but were achieved in a different manner than expected.  Activity levels and operating performance within our energy segments exceeded our original expectations, led by our ROV and Subsea Products segments. Operating performance within our Advanced Technologies segment fell short of expectations, primarily due to execution issues and customer-driven project delays and cancellations within our entertainment business.  Compared to 2018, our 2019 consolidated revenue increased 7% to $2.0 billion, with revenue increases in ROV, Subsea Products and Advanced Technologies being partially offset by revenue decreases in Subsea Projects and Asset Integrity.  Consolidated adjusted operating results improved by $22.4 million, led by our Subsea Products and ROV segments.  In 2019, each of our operating segments, except Asset Integrity, contributed positive operating income, as adjusted, and all of our operating segments contributed positive EBITDA, as adjusted.  Overall, we generated adjusted EBITDA of $165 million. We generated $158 million in cash flow from operations and invested $148 million on capital expenditures.

    "We expect our 2020 financial results to improve year over year, due to our expectations for higher activity and operating margins in each of our segments.  For the year, we anticipate generating $180 million to $220 million of EBITDA, with positive operating income and EBITDA contributions from each of our operating segments.  At the midpoint of this range, our EBITDA for 2020 would represent a 21% increase over 2019 adjusted EBITDA.  Apart from seasonality, we view pricing and margins in the current energy markets to be stable with increasing opportunities for improvement.  We anticipate all of our segments will generate improved annual operating results, with the largest increases in profitability occurring in ROV, Subsea Products and Advanced Technologies.

    "For ROVs, our expectation for improved results is based on increased days on hire in both drill support and vessel-based services, minor shifts in geographic mix, and generally stable pricing.  We project fewer installations and demobilizations in 2020, which are expected to lower operating costs, as compared to 2019.  We expect EBITDA margins to average approximately 30% for the full year.

    "We expect Subsea Products segment performance to improve, as a result of increased throughput and better absorption of fixed costs within our manufactured products business unit, as well as higher activity levels and contribution from our service and rental business unit.  We anticipate that our operating income margins will improve slightly and average in the mid-single digit range for the year.

    "Subsea Projects operating results are expected to improve slightly in 2020, primarily due to lower depreciation as compared to 2019.  EBITDA is expected to decline modestly in anticipation of reduced international and Gulf of Mexico vessel activity. Vessel dayrates remain competitive but stable, and we expect to see opportunities for pricing improvements during periods of higher activity.  Similar to 2019, this segment has the highest projected amount of speculative work contained within our guidance.  Asset Integrity results are expected to improve on relatively flat revenue as the benefits from cost control measures implemented in late 2019 and early 2020 should be realized beginning in the second quarter of 2020.

    "Our 2020 Advanced Technologies results are projected to increase on higher revenues, with operating margins expected to be in the high-single digit range for the year.  We expect a modest improvement in operating results within our government-related units and operating improvement within our commercial units on improved execution and expected project awards and progression.  We are currently monitoring the impact to ongoing and anticipated projects in China, due to the coronavirus situation.

    "For 2020, we anticipate Unallocated Expenses to increase to an average of $35 million per quarter as we expect full accrual rates for projected short- and long-term performance-based incentive compensation expense, as compared to 2019.

    "Interest expense, net of interest income, is expected to be approximately $40 million, and we expect our 2020 cash tax payments to be approximately $40 million.  This includes taxes incurred in countries that impose tax on the basis of in-country revenue and bear no relationship to the 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 2020 EBITDA is forecasted to be in the range of $36 million to $42 million.  We expect lower seasonal activity in our Subsea Projects segment and in our service rental business within our Subsea Products segment.  Advanced Technologies operating results are expected to be essentially flat on marginally lower revenues.

    "Capital discipline continues to be of utmost importance and we expect to generate significant positive free cash flow in 2020.  We expect our organic capital expenditures to total between $75 million and $105 million.  This includes approximately $40 million to $50 million of maintenance capital expenditures and $35 million to $55 million of growth capital expenditures, including approximately $5 million of carryover from 2019.  We remain committed to maintaining strong liquidity and believe that our cash position, $500 million undrawn revolving credit facility and debt maturity profile should 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 the 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 2020, including anticipated operating income, operating results, EBITDA, EBITDA contributions and EBITDA margins from each of our operating segments, and the associated explanations; the expectation and timing of the benefits from cost control measures in Asset Integrity implemented in late 2019 and early 2020; the impact to ongoing and anticipated projects in China, due to the coronavirus situation; 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; our expectations regarding a 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 2020 free cash flow; our expected 2020 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 10-K and subsequent quarterly reports on Form 10Q filed with the Securities and Exchange Commission.  You should not place undue reliance on forward-looking statements. Except to the extent required by applicable law, Oceaneering undertakes no obligation to update or revise any forward-looking statement.

    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,
    2019


    Dec 31,
    2018














    (in thousands)

    ASSETS

















    Current assets (including cash and cash equivalents of $373,655 and $354,259)




    $

    1,244,436



    $

    1,244,889



    Net property and equipment







    776,532



    964,670



    Other assets










    719,695



    615,439





    Total Assets






    $

    2,740,663



    $

    2,824,998




















    LIABILITIES AND EQUITY






    Current liabilities










    $

    600,956



    $

    494,741



    Long-term debt










    796,516



    786,580



    Other long-term liabilities






    267,782



    128,379



    Equity










    1,075,409



    1,415,298





    Total Liabilities and Equity






    $

    2,740,663



    $

    2,824,998




















    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS




























    For the Three Months Ended


    For the Year Ended










    Dec 31,
    2019


    Dec 31,
    2018


    Sep 30,
    2019


    Dec 31,
    2019


    Dec 31,
    2018










    (in thousands, except per share amounts)




















    Revenue






    $

    560,810



    $

    495,095



    $

    497,647



    $

    2,048,124



    $

    1,909,482



    Cost of services and products


    581,197



    462,060



    448,586



    1,949,880



    1,780,256




    Gross margin


    (20,387)



    33,035



    49,061



    98,244



    129,226



    Selling, general and administrative expense


    59,717



    53,730



    54,255



    214,891



    198,259



    Long-lived assets impairments


    159,353







    159,353





    Goodwill impairment


    14,713



    76,449





    14,713



    76,449




    Income (loss) from operations


    (254,170)



    (97,144)



    (5,194)



    (290,713)



    (145,482)



    Interest income






    1,352



    1,775



    2,089



    7,893



    9,962



    Interest expense, net of amounts capitalized


    (11,706)



    (9,684)



    (11,382)



    (42,711)



    (37,742)



    Equity in income (losses) of unconsolidated affiliates


    941



    (519)



    554



    1,331



    (3,783)



    Other income (expense), net


    (3,687)



    (2,390)



    (3,660)



    (6,621)



    (8,788)




    Income (loss) before income taxes


    (267,270)



    (107,962)



    (17,593)



    (330,821)



    (185,833)



    Provision (benefit) for income taxes


    (4,358)



    (43,823)



    7,930



    17,623



    26,494




    Net Income (Loss)


    $

    (262,912)



    $

    (64,139)



    $

    (25,523)



    $

    (348,444)



    $

    (212,327)




















    Weighted average diluted shares outstanding


    98,930



    98,534



    98,930



    98,876



    98,496


    Diluted earnings (loss) per share


    $

    (2.66)



    $

    (0.65)



    $

    (0.26)



    $

    (3.52)



    $

    (2.16)





















    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, 2019


    Dec 31, 2018


    Sep 30, 2019


    Dec 31, 2019


    Dec 31, 2018







    ($ in thousands)












    Remotely Operated Vehicles
















    Revenue



    $

    116,020



    $

    96,736



    $

    113,101



    $

    449,830



    $

    394,801



    Gross margin



    $

    (7,728)



    $

    6,764



    $

    18,908



    $

    37,961



    $

    32,652


    Operating income (loss)



    $

    (18,660)



    $

    (1,275)



    $

    10,145



    $

    1,591



    $

    1,641


    Operating income (loss) %



    (16)

    %


    (1)

    %


    9

    %


    %


    %


    Days available



    25,576



    25,272



    25,392



    100,480



    101,464



    Days utilized



    14,836



    13,147



    15,146



    58,347



    52,084



    Utilization



    58

    %


    52

    %


    60

    %


    58

    %


    51

    %
















    Subsea Products
















    Revenue



    $

    183,659



    $

    129,509



    $

    150,836



    $

    602,249



    $

    515,000



    Gross margin



    $

    4,527



    $

    10,156



    $

    28,030



    $

    65,901



    $

    59,984


    Operating income (loss)



    $

    (10,325)



    $

    (3,803)



    $

    13,219



    $

    9,831



    $

    5,614


    Operating income (loss) %



    (6)

    %


    (3)

    %


    9

    %


    2

    %


    1

    %

    Backlog at end of period



    $

    630,000



    $

    332,000



    $

    609,000



    $

    630,000



    $

    332,000

















    Subsea Projects
















    Revenue



    $

    86,728



    $

    89,295



    $

    75,996



    $

    327,556



    $

    329,163



    Gross margin



    $

    1,546



    $

    2,795



    $

    5,213



    $

    21,264



    $

    9,596


    Operating income (loss)



    $

    (148,075)



    $

    (79,379)



    $

    (616)



    $

    (145,712)



    $

    (86,008)


    Operating income (loss) %



    (171)

    %


    (89)

    %


    (1)

    %


    (44)

    %


    (26)

    %
















    Asset Integrity
















    Revenue



    $

    61,835



    $

    62,830



    $

    59,274



    $

    242,954



    $

    253,886



    Gross margin



    $

    (6,867)



    $

    8,086



    $

    5,273



    $

    11,101



    $

    34,995


    Operating income (loss)



    $

    (48,919)



    $

    1,349



    $

    (2,453)



    $

    (53,387)



    $

    8,660


    Operating income (loss) %



    (79)

    %


    2

    %


    (4)

    %


    (22)

    %


    3

    %
















    Advanced Technologies
















    Revenue



    $

    112,568



    $

    116,725



    $

    98,440



    $

    425,535



    $

    416,632



    Gross margin



    $

    12,354



    $

    22,314



    $

    9,413



    $

    50,401



    $

    58,959


    Operating income (loss)



    $

    5,270



    $

    15,406



    $

    2,958



    $

    25,068



    $

    33,920


    Operating income (loss) %



    5

    %


    13

    %


    3

    %


    6

    %


    8

    %















    Unallocated Expenses















    Gross margin



    $

    (24,219)



    $

    (17,080)



    $

    (17,776)



    $

    (88,384)



    $

    (66,960)


    Operating income (loss)



    $

    (33,461)



    $

    (29,442)



    $

    (28,447)



    $

    (128,104)



    $

    (109,309)















    Total


















    Revenue



    $

    560,810



    $

    495,095



    $

    497,647



    $

    2,048,124



    $

    1,909,482



    Gross margin



    $

    (20,387)



    $

    33,035



    $

    49,061



    $

    98,244



    $

    129,226


    Operating income (loss)



    $

    (254,170)



    $

    (97,144)



    $

    (5,194)



    $

    (290,713)



    $

    (145,482)


    Operating income (loss) %



    (45)

    %


    (20)

    %


    (1)

    %


    (14)

    %


    (8)

    %


    The above Segment Information does not include adjustments for non-recurring transactions. See the tables in our Reconciliations of Non-GAAP to GAAP Financial Information section for financial measures that management considers representative of our ongoing operations.
















     

    SELECTED CASH FLOW INFORMATION


















    For the Three Months Ended


    For the Year Ended







    Dec 31, 2019


    Dec 31, 2018


    Sep 30, 2019


    Dec 31, 2019


    Dec 31, 2018







    (in thousands)













    Capital Expenditures, including Acquisitions



    $

    18,837



    $

    25,721



    $

    57,985



    $

    147,684



    $

    178,038














    Depreciation and amortization:












    Energy Services and Products













    Remotely Operated Vehicles



    $

    32,043



    $

    27,972



    $

    26,767



    $

    113,671



    $

    111,311



    Subsea Products



    30,992



    11,797



    12,055



    68,404



    53,085



    Subsea Projects



    14,541



    85,651



    8,130



    38,103



    114,481



    Asset Integrity



    30,529



    1,585



    1,634



    35,367



    6,904


    Total Energy Services and Products



    108,105



    127,005



    48,586



    255,545



    285,781


    Advanced Technologies



    766



    786



    761



    3,122



    3,081


    Unallocated Expenses



    1,199



    1,125



    1,220



    4,760



    4,728



    Total Depreciation and Amortization



    $

    110,070



    $

    128,916



    $

    50,567



    $

    263,427



    $

    293,590

















    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 (Loss) and Diluted Earnings (Loss) 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, 2020 EBITDA Estimates and Free Cash Flow, as well as the following by segment:  Adjusted Operating Income and Margins, EBITDA, EBITDA Margins, 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.

    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, 2019

    Dec 31, 2018

    Sep 30, 2019






    Net Income
    (Loss)


    Diluted EPS


    Net Income
    (Loss)


    Diluted EPS


    Net Income
    (Loss)


    Diluted EPS






    (in thousands, except per share amounts)








    Net income (loss) and diluted EPS as reported in accordance with GAAP


    $

    (262,912)



    $

    (2.66)



    $

    (64,139)



    $

    (0.65)



    $

    (25,523)



    $

    (0.26)


    Pre-tax adjustments for the effects of:














    Long-lived assets impairments


    159,353













    Long-lived assets write-offs


    44,653













    Inventory write-downs


    21,285













    Goodwill impairment


    14,713





    76,449









    Restructuring expenses and other


    11,751













    Foreign currency (gains) losses


    3,477





    2,559





    3,516




    Total pre-tax adjustments


    255,232





    79,008





    3,516




















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


    (50,653)





    (11,914)





    (738)




    Discrete tax items:













        Share-based compensation


    2












        Uncertain tax positions


    1,276





    7,811





    (520)




        Tax reform


    272





    560





    (8,492)




        Valuation allowances


    59,667





    (3,784)





    (32)




        Other


    (356)





    (241)





    2,079





    Total discrete tax adjustments


    60,861





    4,346





    (6,965)





    Total of adjustments


    265,440





    71,440





    (4,187)




    Adjusted Net Income (Loss)


    $

    2,528



    $

    0.03



    $

    7,301



    $

    0.07



    $

    (29,710)



    $

    (0.30)


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




    99,721





    99,331





    98,930







































    For the Year Ended



    Dec 31, 2019

    Dec 31, 2018



    Net Income
    (Loss)


    Diluted EPS


    Net Income
    (Loss)


    Diluted EPS



    (in thousands, except per share amounts)








    Net income (loss) and diluted EPS as reported in accordance with GAAP






    $

    (348,444)



    $

    (3.52)



    $

    (212,327)



    $

    (2.16)


    Pre-tax adjustments for the effects of:










    Long-lived assets impairments






    159,353









    Long-lived assets write-offs


    44,653





    7,691





    Inventory write-downs


    21,285









    Goodwill impairment


    14,713





    76,449





    Restructuring expenses and other


    11,751









    Gain on sale of investment






    (9,293)





    Foreign currency (gains) losses






    6,320





    18,037




    Total pre-tax adjustments






    258,075





    92,884




















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






    (51,250)





    (14,668)




















    Discrete tax items:









        Share-based compensation






    989








        Uncertain tax positions






    3,046





    12,644




        Tax reform






    (8,220)





    8,492




        Valuation allowances






    61,174





    35,352




        Other






    2,018





    7,930





    Total discrete tax adjustments






    59,007





    64,418





    Total of adjustments






    265,832





    142,634




    Adjusted Net Income (Loss)






    $

    (82,612)



    $

    (0.84)



    $

    (69,693)



    $

    (0.71)


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








    98,876





    98,496


















     















    EBITDA and Adjusted EBITDA and Margins




















    For the Three Months Ended


    For the Year Ended






    Dec 31, 2019


    Dec 31, 2018


    Sep 30, 2019


    Dec 31, 2019


    Dec 31, 2018






    ($ in thousands)















    Net income (loss)



    $

    (262,912)



    $

    (64,139)



    $

    (25,523)



    $

    (348,444)



    $

    (212,327)


    Depreciation and amortization



    110,070



    128,916



    50,567



    263,427



    293,590



    Subtotal



    (152,842)



    64,777



    25,044



    (85,017)



    81,263


    Interest expense, net of interest income


    10,354



    7,909



    9,293



    34,818



    27,780


    Amortization included in interest expense


    (335)



    (333)



    (335)



    (1,345)



    (1,772)


    Provision (benefit) for income taxes



    (4,358)



    (43,823)



    7,930



    17,623



    26,494



    EBITDA



    (147,181)



    28,530



    41,932



    (33,921)



    133,765


    Adjustments for the effects of:













    Long-lived assets impairments



    159,353







    159,353





    Inventory write-downs



    21,285







    21,285





    Restructuring expenses and other



    11,751







    11,751





    Gain on sale of investment











    (9,293)



    Foreign currency (gains) losses



    3,477



    2,559



    3,516



    6,320



    18,037




    Total of adjustments



    195,866



    2,559



    3,516



    198,709



    8,744



    Adjusted EBITDA



    $

    48,685



    $

    31,089



    $

    45,448



    $

    164,788



    $

    142,509
















    Revenue



    $

    560,810



    $

    495,095



    $

    497,647



    $

    2,048,124



    $

    1,909,482
















    EBITDA margin %



    (26)

    %


    6

    %


    8

    %


    (2)

    %


    7

    %

    Adjusted EBITDA margin %



    9

    %


    6

    %


    9

    %


    8

    %


    7

    %















     

    Free Cash Flow










    For the Year Ended




    Dec 31, 2019


    Dec 31, 2018




    (in thousands)

    Net Income (loss)


    $

    (348,444)



    $

    (212,327)


    Non-cash adjustments:






    Depreciation and amortization, including goodwill impairment


    263,427



    293,590



    Long-lived assets impairments


    159,353





    Other non-cash


    16,436



    15,317


    Other increases (decreases) in cash from operating activities


    66,797



    (60,013)


    Cash flow provided by operating activities


    157,569



    36,567


    Purchases of property and equipment


    (147,684)



    (109,467)


    Free Cash Flow


    $

    9,885



    $

    (72,900)














    2020 EBITDA Estimates




    For the Year Ended




    December 31, 2020




    Low


    High




    (in thousands)

    Income (loss) before income taxes


    $

    (40,000)



    $


    Depreciation and amortization


    180,000



    180,000



    Subtotal


    140,000



    180,000


    Interest expense, net of interest income


    40,000



    40,000



    EBITDA


    $

    180,000



    $

    220,000

















    For the Three Months Ended




    March 31, 2020




    Low


    High




    (in thousands)

    Income (loss) before income taxes


    $

    (19,000)



    $

    (13,000)


    Depreciation and amortization


    45,000



    45,000



    Subtotal


    26,000



    32,000


    Interest expense, net of interest income


    10,000



    10,000



    EBITDA


    $

    36,000



    $

    42,000








     

    Adjusted Operating Income (Loss) and Margins by Segment






    For the Three Months Ended December 31, 2019





    Remotely
    Operated
    Vehicles


    Subsea
    Products


    Subsea
    Projects


    Asset
    Integrity


    Advanced
    Tech.


    Unallocated
    Expenses


    Total





    ($ in thousands)

    Operating Income (Loss) as reported in accordance with GAAP


    $

    (18,660)



    $

    (10,325)



    $

    (148,075)



    $

    (48,919)



    $

    5,270



    $

    (33,461)



    $

    (254,170)


    Adjustments for the effects of:















    Long-lived assets impairments





    142,615



    16,738







    159,353



    Long-lived assets write-offs


    5,697



    18,757



    6,091



    14,108







    44,653



    Inventory write-downs


    15,343



    3,567



    1,586





    789





    21,285



    Goodwill impairment








    14,713







    14,713



    Restructuring expenses and other


    2,297



    2,650



    2,851



    3,082



    815



    56



    11,751




    Total of adjustments


    23,337



    24,974



    153,143



    48,641



    1,604



    56



    251,755



















    Adjusted Operating Income (Loss)


    $

    4,677



    $

    14,649



    $

    5,068



    $

    (278)



    $

    6,874



    $

    (33,405)



    $

    (2,415)



















    Revenue


    $

    116,020



    $

    183,659



    $

    86,728



    $

    61,835



    $

    112,568





    $

    560,810


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


    (16)

    %


    (6)

    %


    (171)

    %


    (79)

    %


    5

    %




    (45)

    %

    Operating income (loss)% using adjusted amounts


    4

    %


    8

    %


    6

    %


    %


    6

    %




    %






















    For the Three Months Ended December 31, 2018





    Remotely
    Operated
    Vehicles


    Subsea
    Products


    Subsea
    Projects


    Asset
    Integrity


    Advanced
    Tech.


    Unallocated
    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 September 30, 2019





    Remotely
    Operated
    Vehicles


    Subsea
    Products


    Subsea
    Projects


    Asset
    Integrity


    Advanced
    Tech.


    Unallocated
    Expenses


    Total





    ($ in thousands)

    Operating Income (Loss) as reported in accordance with GAAP


    $

    10,145



    $

    13,219



    $

    (616)



    $

    (2,453)



    $

    2,958



    $

    (28,447)



    $

    (5,194)


    Adjusted Operating Income (Loss)


    $

    10,145



    $

    13,219



    $

    (616)



    $

    (2,453)



    $

    2,958



    $

    (28,447)



    $

    (5,194)



















    Revenue


    $

    113,101



    $

    150,836



    $

    75,996



    $

    59,274



    $

    98,440





    $

    497,647


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


    9

    %


    9

    %


    (1)

    %


    (4)

    %


    3

    %




    (1)

    %

    Operating income (loss) % using adjusted amounts


    9

    %


    9

    %


    (1)

    %


    (4)

    %


    3

    %




    (1)

    %






    For the Year Ended December 31, 2019





    Remotely
    Operated
    Vehicles


    Subsea
    Products


    Subsea
    Projects


    Asset
    Integrity


    Advanced
    Tech.


    Unallocated
    Expenses


    Total





    ($ in thousands)

    Operating Income (Loss) as reported in accordance with GAAP


    $

    1,591



    $

    9,831



    $

    (145,712)



    $

    (53,387)



    $

    25,068



    $

    (128,104)



    $

    (290,713)


    Adjustments for the effects of:















    Long-lived assets impairments





    142,615



    16,738







    159,353



    Long-lived assets write-offs


    5,697



    18,757



    6,091



    14,108







    44,653



    Inventory write-downs


    15,343



    3,567



    1,586





    789





    21,285



    Goodwill impairment








    14,713







    14,713



    Restructuring expenses and other


    2,297



    2,650



    2,851



    3,082



    815



    56



    11,751




    Total of adjustments


    23,337



    24,974



    153,143



    48,641



    1,604



    56



    251,755


    Adjusted Operating Income (Loss)


    $

    24,928



    $

    34,805



    $

    7,431



    $

    (4,746)



    $

    26,672



    $

    (128,048)



    $

    (38,958)



















    Revenue


    $

    449,830



    $

    602,249



    $

    327,556



    $

    242,954



    $

    425,535





    $

    2,048,124


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


    %


    2

    %


    (44)

    %


    (22)

    %


    6

    %




    (14)

    %

    Operating income (loss) % using adjusted amounts


    6

    %


    6

    %


    2

    %


    (2)

    %


    6

    %




    (2)

    %






















    For the Year Ended December 31, 2018





    Remotely
    Operated
    Vehicles


    Subsea
    Products


    Subsea
    Projects


    Asset
    Integrity


    Advanced
    Tech.


    Unallocated
    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



    Long-lived assets write-offs


    617



    1,531



    5,543









    7,691




    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)

    %

     

    EBITDA and Adjusted EBITDA and Margins by Segment






    For the Three Months Ended December 31, 2019





    Remotely
    Operated
    Vehicles


    Subsea
    Products


    Subsea
    Projects


    Asset
    Integrity


    Advanced
    Tech.


    Unallocated
    Expenses
    and other


    Total





    ($ in thousands)

    Operating Income (Loss) as reported in accordance with GAAP


    $

    (18,660)



    $

    (10,325)



    $

    (148,075)



    $

    (48,919)



    $

    5,270



    $

    (33,461)



    $

    (254,170)


    Adjustments for the effects of:















    Depreciation and amortization


    32,043



    30,992



    14,541



    30,529



    766



    1,199



    110,070



    Other pre-tax












    (3,081)



    (3,081)



    EBITDA


    13,383



    20,667



    (133,534)



    (18,390)



    6,036



    (35,343)



    (147,181)


    Adjustments for the effects of:















    Long-lived assets impairments






    142,615



    16,738







    159,353



    Inventory write-downs


    15,343



    3,567



    1,586





    789





    21,285



    Restructuring expenses and other


    2,297



    2,650



    2,851



    3,082



    815



    56



    11,751



    Foreign currency (gains) losses












    3,477



    3,477




    Total of adjustments


    17,640



    6,217



    147,052



    19,820



    1,604



    3,533



    195,866


    Adjusted EBITDA


    $

    31,023



    $

    26,884



    $

    13,518



    $

    1,430



    $

    7,640



    $

    (31,810)



    $

    48,685



















    Revenue


    $

    116,020



    $

    183,659



    $

    86,728



    $

    61,835



    $

    112,568





    $

    560,810


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


    (16)

    %


    (6)

    %


    (171)

    %


    (79)

    %


    5

    %




    (45)

    %

    EBITDA Margin


    12

    %


    11

    %


    (154)

    %


    (30)

    %


    5

    %




    (26)

    %

    Adjusted EBITDA Margin


    27

    %


    15

    %


    16

    %


    2

    %


    7

    %




    9

    %






















    For the Three Months Ended December 31, 2018





    Remotely
    Operated
    Vehicles


    Subsea
    Products


    Subsea
    Projects


    Asset
    Integrity


    Advanced
    Tech.


    Unallocated
    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 (gains) 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 September 30, 2019





    Remotely
    Operated
    Vehicles


    Subsea
    Products


    Subsea
    Projects


    Asset
    Integrity


    Advanced
    Tech.


    Unallocated
    Expenses
    and other


    Total





    ($ in thousands)

    Operating Income (Loss) as reported in accordance with GAAP


    $

    10,145



    $

    13,219



    $

    (616)



    $

    (2,453)



    $

    2,958



    $

    (28,447)



    $

    (5,194)


    Adjustments for the effects of:















    Depreciation and amortization


    26,767



    12,055



    8,130



    1,634



    761



    1,220



    50,567



    Other pre-tax












    (3,441)



    (3,441)



    EBITDA


    36,912



    25,274



    7,514



    (819)



    3,719



    (30,668)



    41,932


    Adjustments for the effects of:















    Foreign currency (gains) losses












    3,516



    3,516




    Total of adjustments












    3,516



    3,516


    Adjusted EBITDA


    $

    36,912



    $

    25,274



    $

    7,514



    $

    (819)



    $

    3,719



    $

    (27,152)



    $

    45,448



















    Revenue


    $

    113,101



    $

    150,836



    $

    75,996



    $

    59,274



    $

    98,440





    $

    497,647


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


    9

    %


    9

    %


    (1)

    %


    (4)

    %


    3

    %




    (1)

    %

    EBITDA Margin


    33

    %


    17

    %


    10

    %


    (1)

    %


    4

    %




    8

    %

    Adjusted EBITDA Margin


    33

    %


    17

    %


    10

    %


    (1)

    %


    4

    %




    9

    %






    For the Year Ended December 31, 2019





    Remotely
    Operated
    Vehicles


    Subsea
    Products


    Subsea
    Projects


    Asset
    Integrity


    Advanced
    Tech.


    Unallocated
    Expenses
    and other


    Total





    ($ in thousands)

    Operating Income (Loss) as reported in accordance with GAAP


    $

    1,591



    $

    9,831



    $

    (145,712)



    $

    (53,387)



    $

    25,068



    $

    (128,104)



    $

    (290,713)


    Adjustments for the effects of:















    Depreciation and amortization


    113,671



    68,404



    38,103



    35,367



    3,122



    4,760



    263,427



    Other pre-tax












    (6,635)



    (6,635)



    EBITDA


    115,262



    78,235



    (107,609)



    (18,020)



    28,190



    (129,979)



    (33,921)


    Adjustments for the effects of:















    Long-lived assets impairments





    142,615



    16,738







    159,353



    Inventory write-downs


    15,343



    3,567



    1,586





    789





    21,285



    Restructuring expenses and other


    2,297



    2,650



    2,851



    3,082



    815



    56



    11,751



    Foreign currency (gains) losses












    6,320



    6,320




    Total of adjustments


    17,640



    6,217



    147,052



    19,820



    1,604



    6,376



    198,709


    Adjusted EBITDA


    $

    132,902



    $

    84,452



    $

    39,443



    $

    1,800



    $

    29,794



    $

    (123,603)



    $

    164,788



















    Revenue


    $

    449,830



    $

    602,249



    $

    327,556



    $

    242,954



    $

    425,535





    $

    2,048,124


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


    %


    2

    %


    (44)

    %


    (22)

    %


    6

    %




    (14)

    %

    EBITDA Margin


    26

    %


    13

    %


    (33)

    %


    (7)

    %


    7

    %




    (2)

    %

    Adjusted EBITDA Margin


    30

    %


    14

    %


    12

    %


    1

    %


    7

    %




    8

    %






















    For the Year Ended December 31, 2018





    Remotely
    Operated
    Vehicles


    Subsea
    Products


    Subsea
    Projects


    Asset
    Integrity


    Advanced
    Tech.


    Unallocated
    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 (gains) 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

    %

     

    Cision View original content:http://www.prnewswire.com/news-releases/oceaneering-reports-fourth-quarter-and-full-year-2019-results-301010070.html

    SOURCE Oceaneering International, Inc.

    Categories: Press Releases
    View all news