HOUSTON, July 24, 2019 /PRNewswire/ -- Oceaneering International, Inc. ("Oceaneering") (NYSE:OII) today reported a net loss of $35.2 million, or $(0.36) per share, on revenue of $496 million for the three months ended June 30, 2019.  During the prior quarter ended March 31, 2019, Oceaneering reported a net loss of $24.8 million, or $(0.25) per share, on revenue of $494 million, and an adjusted net loss of $23.9 million, or $(0.24) 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 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 Margins, 2019 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


Six Months Ended



Jun 30,


Mar 31,


Jun 30,



2019


2018


2019


2019


2018












Revenue


$

495,781



$

478,674



$

493,886



$

989,667



$

895,087


Gross Margin


41,983



29,728



27,587



69,570



48,556


Income (Loss) from Operations


(9,635)



(19,637)



(21,714)



(31,349)



(46,786)


Net Income (Loss)


(35,182)



(33,076)



(24,827)



(60,009)



(82,209)













Diluted Earnings (Loss) Per Share


$

(0.36)



$

(0.34)



$

(0.25)



$

(0.61)



$

(0.83)







Roderick A. Larson, President and Chief Executive Officer of Oceaneering, stated, "Overall, the sequential improvement in our second quarter 2019 operating results met our expectations.  Our energy segments, as a whole, performed well, while our non-energy segment, Advanced Technologies, fell short of our expectations.  Unallocated Expenses were lower than forecast.  For the second quarter, consolidated EBITDA of $40.3 million was in line with consensus estimates, and we generated $12.7 million of free cash flow.

"Sequentially, ROV operating income improved as expected, resulting from higher seasonal activity for vessel-based services and an increase in the number of working floating rigs for which we provide drill support.  Our fleet use during the quarter was 63% in drill support and 37% in vessel-based activity, compared to 69% and 31%, respectively, during the prior quarter.  Revenue grew 20%, principally due to the 19% increase in ROV days on hire.  ROV EBITDA margin improved by 23 basis points to 30%.

"At the end of June 2019, our ROV fleet size was 276 vehicles, utilization improved to 62% from 53% in the first quarter, and we had ROV contracts on 101 of the 161 floating rigs under contract, resulting in a drill support market share of 63%.

"Subsea Products operating income improved during the second quarter of 2019 on a modest sequential increase in quarterly revenue.  These operating results were better than expected due to a substantial increase in revenue within our manufactured products business and an exceptional operating margin within our service and rental business.  Our Subsea Products backlog at June 30, 2019 was $596 million, compared to our March 31, 2019 backlog of $464 million.  This includes the recently announced award for umbilicals, hardware and aftermarket services related to the Mozambique LNG project.  Our book-to-bill ratio for the trailing twelve months was 1.65.

"The second quarter 2019 Subsea Projects operating income was sequentially lower than forecast as the expected increase in call-out work did not materialize, and operational issues on a couple of projects caused cost overruns.  We continue to believe that pricing for diving and deepwater vessel services in our international and U.S. Gulf of Mexico markets has generally stabilized.  We are pleased to report that the Ocean Evolution was put to work on her first project in June.

"The second quarter 2019 Asset Integrity operating results decreased slightly on flat revenue compared to the first quarter, as pricing for inspection services remains very competitive.

"For our non-energy segment, Advanced Technologies, second quarter 2019 operating income declined sequentially, predominantly due to our not securing a large anticipated U.S. Navy contract and production timing associated with certain theme park projects.  Unallocated Expenses were lower quarter over quarter, as we deferred expenditures into the second half of 2019.

"For the third quarter of 2019, compared to the second quarter, we are expecting a slight improvement in our overall operating results on moderately higher revenue.  For our energy segments, we expect declines in operating contribution from our ROV segment on flat activity levels due to a change in operating mix, a decline in profitability in Subsea Products, due to a greater proportion of segment revenue coming from manufacturing, and relatively flat results in our Subsea Projects and Asset Integrity segments.  For our non-energy segment, Advanced Technologies, we expect revenue to increase and operating margins to improve to the low double-digit range.  Unallocated Expenses are expected to be in the mid-$30 million range.

"For the first half of 2019, we generated $70.7 million of adjusted EBITDA.  Based on our first half results and our expectations for the remainder of the year, we are narrowing our EBITDA guidance by lowering the top end of our guidance range from $180 million to $170 million, due primarily to project call-out work not materializing to the degree necessary to achieve the high end of our prior guidance.  We now expect our 2019 adjusted EBITDA to be between $150 million and $170 million.

"Our confidence in our guidance for the second half of 2019 is based on our existing backlog and expected order intake in Subsea Products and Advanced Technologies, as well as our anticipation of an increase in the number of working floating drilling rigs.  We are affirming our expectation to generate positive free cash flow for the full year 2019."

This release contains "forward-looking statements," as defined in the Private Securities Litigation Reform Act of 1995, including, without limitation, statements as to the expectations, beliefs and future expected business, financial performance and prospects of Oceaneering. More specifically, the forward-looking statements in this press release include the statements concerning Oceaneering's: outlook and EBITDA guidance for the third quarter and full year of 2019; projected positive free cash flow; anticipated consolidated EBITDA and segment EBITDA contributions; expected segment contributions to periodic and full-year 2019 operating results; Subsea Products backlog; Subsea Products and Advanced Technologies order intake; forecasted Unallocated Expenses; and overall view of market conditions, including an anticipated increase in working floating drilling rigs. 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; supply and demand of drilling rigs; oil and natural gas demand and production growth; oil and natural gas prices; fluctuations in currency markets worldwide; future global economic conditions; the loss of major contracts or alliances; future performance under our customer contracts; and the effects of competition. 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.

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
[email protected]

 


OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES



















CONDENSED CONSOLIDATED BALANCE SHEETS


































Jun 30,
2019


Dec 31,
2018














(in thousands)

ASSETS

















Current assets (including cash and cash equivalents of $355,838 and $354,259)




$

1,195,193



$

1,244,889



Net property and equipment







947,787



964,670



Other assets










795,655



615,439





Total Assets






$

2,938,635



$

2,824,998




















LIABILITIES AND EQUITY






Current liabilities










$

491,044



$

494,741



Long-term debt










795,639



786,580



Other long-term liabilities






292,919



128,379



Equity










1,359,033



1,415,298





Total Liabilities and Equity






$

2,938,635



$

2,824,998




















CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS




























For the Three Months Ended


For the Six Months Ended










Jun 30,
2019


Jun 30,
2018


Mar 31,
2019


Jun 30,
2019


Jun 30,
2018










(in thousands, except per share amounts)




















Revenue






$

495,781



$

478,674



$

493,886



$

989,667



$

895,087



Cost of services and products


453,798



448,946



466,299



920,097



846,531




Gross margin


41,983



29,728



27,587



69,570



48,556



Selling, general and administrative expense


51,618



49,365



49,301



100,919



95,342




Income (loss) from operations




(9,635)



(19,637)



(21,714)



(31,349)



(46,786)



Interest income






1,848



2,950



2,604



4,452



5,542



Interest expense, net of amounts capitalized


(10,199)



(8,802)



(9,424)



(19,623)



(18,173)



Equity in income (losses) of unconsolidated affiliates




(737)



(164)



(164)



(1,580)



Other income (expense), net


7



(3,556)



719



726



(12,030)




Income (loss) before income taxes


(17,979)



(29,782)



(27,979)



(45,958)



(73,027)



Provision (benefit) for income taxes


17,203



3,294



(3,152)



14,051



9,182




Net Income (Loss)


$

(35,182)



$

(33,076)



$

(24,827)



$

(60,009)



$

(82,209)




















Weighted average diluted shares outstanding


98,929



98,531



98,714



98,822



98,457


Diluted earnings (loss) per share


$

(0.36)



$

(0.34)



$

(0.25)



$

(0.61)



$

(0.83)




















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 Six Months Ended







Jun 30, 2019


Jun 30, 2018


Mar 31, 2019


Jun 30, 2019


Jun 30, 2018







($ in thousands)












Remotely Operated Vehicles
















Revenue



$

120,363



$

107,426



$

100,346



$

220,709



$

193,020



Gross margin



$

17,360



$

12,176



$

9,421



$

26,781



$

17,131


Operating income (loss)



$

8,688



$

4,542



$

1,418



$

10,106



$

2,144


Operating income (loss) %



7

%


4

%


1

%


5

%


1

%


Days available



25,006



25,386



24,506



49,512



50,524



Days utilized



15,423



13,654



12,942



28,365



24,688



Utilization



62

%


54

%


53

%


57

%


49

%
















Subsea Products
















Revenue



$

138,910



$

121,704



$

128,844



$

267,754



$

248,392



Gross margin



$

21,029



$

16,075



$

12,315



$

33,344



$

31,080


Operating income (loss)



$

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