HOUSTON, July 29 /PRNewswire-FirstCall/ -- Oceaneering
International, Inc. (NYSE:OII) today reported second quarter
earnings for the period ended June 30, 2009. On revenue of $451
million, Oceaneering generated net income of $48.1 million, or
$0.87 per share. During the corresponding period in 2008,
Oceaneering reported revenue of $500 million and net income of
$52.1 million, or $0.93 per share as restated. Summary of Results
(in thousands, except per share amounts) Three months ended Six
months ended ------------------ ---------------- June 30, March 31,
June 30, -------- --------- -------- 2009 2008 2009 2009 2008 ----
---- ---- ---- ---- Revenue $450,683 $500,120 $435,100 $885,783
$935,935 Gross Margin 110,145 118,290 105,802 215,947 216,956
Operating Income 74,298 81,465 69,380 143,678 146,235 Net Income
$48,111 $52,123 $44,345 $92,456 $93,402 Net Income Attributable to
Diluted Common Shares * $47,774 $51,578 $43,991 $91,807 $92,426
Weighted Average Number of Diluted Common Shares * 55,041 55,710
54,863 54,962 55,688 Diluted Earnings Per Share * $0.87 $0.93 $0.80
$1.67 $1.66 * 2008 period amounts have been restated to comply with
FSP EITF 03-6-1. Sequentially, quarterly earnings increased on the
strength of higher Subsea Projects operating income attributable to
our deepwater vessel services. Year-over-year, quarterly earnings
declined primarily due to lower Subsea Products operating income on
softer market demand. Results for the second quarter of 2008
included a $2.0 million gain on the sale of the production barge
San Jacinto in the MOPS segment. T. Jay Collins, President and
Chief Executive Officer, stated, "We are very pleased with our
second quarter results. Our earnings were above the top of our
guidance range due to better than anticipated performance by our
Subsea Projects business, resulting from high demand for our
deepwater installation and inspection, repair, and maintenance
services. "During the quarter we put six new ROVs into service and
retired four. At the end of June 2009, we had 235 ROVs in our
fleet, compared to 214 a year ago. On the strength of two large
umbilical contracts, Subsea Products backlog increased by $68
million, or 24%, to $350 million at the end of June 2009. We
commenced manufacturing product for one of these contracts in June
and anticipate starting work on the other in 2010. "We are
narrowing our 2009 EPS guidance range to $3.25 to $3.45 from $3.10
to $3.60, which is unchanged at the midpoint. During the second
half of this year, we expect continued ROV operating income growth,
improved demand for our specialty Subsea Products, and a reduction
in activity and rates for our Subsea Projects deepwater vessels.
For the third quarter of 2009, we are forecasting EPS of $0.82 to
$0.90. "We anticipate generating $295 million to $310 million of
cash flow, defined simply as net income plus depreciation and
amortization expense, during 2009. This projected cash flow and our
existing revolving debt availability provide us ample liquidity. We
still expect our total 2009 capital expenditures to be
approximately $175 million. During the quarter we generated $78
million of cash flow and our capital expenditures were $45 million,
of which $41 million was in support of growing our ROV fleet. We
sold the Ocean Pensador, an oil tanker we were holding for possible
conversion into a MOPS unit, for $7.2 million. We also prepaid $60
million of our 2009 debt maturities, leaving $20 million to repay
in the third quarter. "Our earnings before interest, taxes, and
depreciation and amortization expense (EBITDA) were $106 million
for the quarter. For the year 2009, we expect to generate EBITDA in
the range of $400 million to $420 million. "As of June 30, 2009, we
had $140 million of debt, $49 million of cash, and $200 million
available under our credit facilities. With $1.1 billion of equity
on our balance sheet, our debtto-capitalization percentage was 11%.
"Looking longer term, our belief remains unchanged that the oil and
gas industry will continue to invest in deepwater to counteract
high existing reservoir depletion rates. Deepwater is one of the
best frontiers for adding large hydrocarbon reserves with high
production flow rates at relatively low per barrel finding and
development costs. Therefore, we anticipate demand for our
deepwater services and products will remain promising for the next
several years." Statements in this press release that express a
belief, expectation, or intention are forward looking. The
forward-looking statements in this press release include the
statements concerning Oceaneering's: anticipation of starting work
on a large umbilical contract in 2010; 2009 EPS guidance range of
$3.25 to $3.45; 2009 second half expectations of continued ROV
operating income growth, improved demand for its specialty Subsea
Products, and a substantial reduction in activity and rates for its
Subsea Projects deepwater vessels; third quarter 2009 EPS of $0.82
to $0.90; anticipation of generating $290 million to $310 million
of cash flow, as defined, during 2009; expectation of ample
liquidity from projected cash flow and existing revolving debt
availability to fund its expected total 2009 capital expenditures
of $175 million and repay its debt scheduled to mature in 2009;
expectation of generating EBITDA in the range of $400 million to
$420 million for the year 2009; belief that the oil and gas
industry will continue to invest in deepwater to counteract high
existing reservoir depletion rates; and anticipation that demand
for its deepwater services and products will remain promising for
the next several years. These forward-looking statements are made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 and are based on current information
and expectations of Oceaneering that involve a number of risks,
uncertainties, and assumptions. Among the factors that could cause
the actual results to differ materially from those indicated in the
forward-looking statements are risks and uncertainties related to:
industry conditions; prices of crude oil and natural gas;
Oceaneering's ability to obtain, and the timing of, new projects;
changes in customers' operational plans or schedules; contract
cancellations or modifications; difficulties executing contracts;
and changes in competitive factors. Should one or more of these
risks or uncertainties materialize, or should the assumptions
underlying the forward-looking statements prove incorrect, actual
outcomes could vary materially from those indicated. For a more
complete discussion of these and other risk factors, please see
Oceaneering's annual report on Form 10-K for the year ended
December 31, 2008 and subsequent quarterly reports on Form 10-Q
filed with the Securities and Exchange Commission. Oceaneering is a
global oilfield provider of engineered services and products
primarily to the offshore oil and gas industry, with a focus on
deepwater applications. Through the use of its applied technology
expertise, Oceaneering also serves the defense and aerospace
industries. For further information, please contact Jack Jurkoshek,
Director Investor Relations, Oceaneering International, Inc., 11911
FM 529, Houston, Texas 77041; Telephone 713-329-4670; Fax
7133294653; E-Mail . A live webcast of the Company's earnings
release conference call, scheduled for Thursday, July 30, 2009 at
10:00 a.m. Central, can be accessed at
http://www.oceaneering.com/index.asp. OCEANEERING INTERNATIONAL,
INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS Jun.
30, 2009 Dec. 31, 2008 ------------- ------------- (in thousands)
ASSETS Current Assets (including cash and cash equivalents of
$49,393 and $11,200) $ 761,967 $ 747,705 Net Property and Equipment
736,359 697,430 Other Assets 228,869 224,885 -------------
------------- TOTAL ASSETS $1,727,195 $1,670,020 =============
============= LIABILITIES AND SHAREHOLDERS' EQUITY Current
Liabilities $ 347,402 $ 357,327 Long-term Debt 140,000 229,000
Other Long-term Liabilities 137,829 116,039 Shareholders' Equity
1,101,964 967,654 ------------- ------------ TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $1,727,195 $1,670,020 =============
============ CONDENSED CONSOLIDATED STATEMENTS OF INCOME For the
Three For the Six Months Ended Months Ended
---------------------------- ------------------ June 30, June 30,
Mar. 31, June 30, June 30, 2009 2008 2009 2009 2008 ------- -------
------- ------- ------- (in thousands, except per share amounts)
Revenue $450,683 $500,120 $435,100 $885,783 $935,935 Cost of
services and products 340,538 381,830 329,298 669,836 718,979
-------- -------- -------- -------- -------- Gross Margin 110,145
118,290 105,802 215,947 216,956 Selling, general and administrative
expense 35,847 36,825 36,422 72,269 70,721 -------- --------
-------- -------- -------- Income from Operations 74,298 81,465
69,380 143,678 146,235 Interest income 91 77 135 226 208 Interest
expense (2,208) (3,503) (2,381) (4,589) (6,812) Equity earnings of
unconsolidated affiliates, net 766 612 883 1,649 1,453 Other income
(expense), net 1,070 1,537 206 1,276 2,611 -------- --------
-------- -------- -------- Income before Income Taxes 74,017 80,188
68,223 142,240 143,695 Provision for income taxes 25,906 28,065
23,878 49,784 50,293 -------- -------- -------- -------- --------
Net Income $ 48,111 $ 52,123 $ 44,345 $ 92,456 $ 93,402 ========
======== ======== ======== ======== Net Income Attributable to
Diluted Common Shares * $ 47,774 $ 51,578 $ 43,991 $ 91,807 $
92,426 Weighted Average Number of Diluted Common Shares* 55,041
55,710 54,863 54,962 55,688 Diluted Earnings per Share * $ 0.87 $
0.93 $ 0.80 $ 1.67 $ 1.66 * 2008 period amounts have been restated
to comply with FSP EITF 03-6-1. The above Condensed Consolidated
Balance Sheets and Condensed Consolidated Statements of Income
should be read in conjunction with the Company's latest Annual
Report on Form 10-K and Quarterly Report on Form 10-Q. SEGMENT
INFORMATION For the Three For the Six Months Ended Months Ended
---------------------------- ------------------ June 30, June 30,
Mar. 31, June 30, June 30, 2009 2008 2009 2009 2008 --------
-------- -------- -------- -------- ($ in thousands) Remotely
Operated Vehicles Revenue $160,040 $159,229 $155,598 $315,638
$303,958 Gross margin $ 56,332 $ 53,068 $ 55,704 $112,036 $101,697
Operating income $ 49,735 $ 45,338 $ 48,796 $ 98,531 $ 86,835
Operating margin % 31% 28% 31% 31% 29% Days available 21,121 19,114
20,671 41,792 38,346 Utilization 80% 84% 80% 80% 82% Subsea
Products Revenue $115,587 $164,124 $114,924 $230,511 $302,642 Gross
margin $ 29,416 $ 38,185 $ 29,511 $ 58,927 $ 70,779 Operating
income $ 15,591 $ 25,432 $ 15,788 $ 31,379 $ 46,149 Operating
margin % 13% 15% 14% 14% 15% Backlog $350,000 $372,000 $282,000
$350,000 $372,000 Subsea Projects Revenue $ 63,908 $ 58,790 $
62,997 $126,905 $106,404 Gross margin $ 22,500 $ 20,906 $ 19,394 $
41,894 $ 34,946 Operating income $ 20,259 $ 18,878 $ 17,160 $
37,419 $ 31,011 Operating margin % 32% 32% 27% 29% 29% Inspection
Revenue $ 55,746 $ 67,969 $ 49,073 $104,819 $127,520 Gross margin $
10,713 $ 13,776 $ 10,351 $ 21,064 $ 25,363 Operating income $ 6,948
$ 9,337 $ 6,630 $ 13,578 $ 16,874 Operating margin % 12% 14% 14%
13% 13% Mobile Offshore Production Systems Revenue $ 9,421 $ 10,165
$ 8,766 $ 18,187 $ 20,198 Gross margin $ 1,441 $ 4,766 $ 2,719 $
4,160 $ 7,436 Operating income (loss) $ 1,088 $ 4,341 $ 2,333 $
3,421 $ 6,595 Operating margin % 12% 43% 27% 19% 33% Advanced
Technologies Revenue $ 45,981 $ 39,843 $ 43,742 $ 89,723 $ 75,213
Gross margin $ 6,768 $ 6,430 $ 4,949 $ 11,717 $ 11,364 Operating
income $ 3,950 $ 3,335 $ 2,053 $ 6,003 $ 5,440 Operating margin %
9% 8% 5% 7% 7% Unallocated Expenses Gross margin $(17,025)
$(18,841) $(16,826) $(33,851) $(34,629) Operating income $(23,273)
$(25,196) $(23,380) $(46,653) $(46,669) TOTAL Revenue $450,683
$500,120 $435,100 $885,783 $935,935 Gross margin $110,145 $118,290
$105,802 $215,947 $216,956 Operating income $ 74,298 $ 81,465 $
69,380 $143,678 $146,235 Operating margin % 16% 16% 16% 16% 16%
SELECTED CASH FLOW INFORMATION Capital expenditures, including
acquisitions $ 44,711 $ 58,210 $45,387 $90,098 $146,034
Depreciation and Amortization $ 29,691 $ 27,541 $28,023 $57,714 $
54,040 The above should be read in conjunction with the Company's
latest Annual Report on Form 10-K and Quarterly Report on Form
10-Q. RECONCILIATION of GAAP to NON-GAAP FINANCIAL INFORMATION For
the Three For the Six Months Ended Months Ended
--------------------------- ----------------- June 30, June 30,
Mar. 31, June 30, June 30, 2009 2008 2009 2009 2008 --------
-------- ------- ------- -------- (in thousands) Earnings Before
Interest, Taxes, Depreciation and Amortization (EBITDA) Net Income
$ 48,111 $52,123 $44,345 $ 92,456 $ 93,402 Depreciation and
Amortization 29,691 27,541 28,023 57,714 54,040 -------- --------
------- -------- -------- Subtotal 77,802 79,664 72,368 150,170
147,442 Interest Income/ Expense, Net 2,117 3,426 2,246 4,363 6,604
Provision for Income Taxes 25,906 28,065 23,878 49,784 50,293
-------- -------- ------- -------- -------- EBITDA $105,825
$111,155 $98,492 $204,317 $204,339 ======== ======== =======
======== ======== 2009 Estimates ------------------- Low High
-------- -------- (in thousands) Net Income $180,000 $191,000
Depreciation and Amortization 115,000 119,000 -------- --------
Subtotal 295,000 310,000 Interest Income/ Expense, Net 9,000 8,000
Provision for Income Taxes 96,000 102,000 -------- -------- EBITDA
$400,000 $420,000 ======== ======== DATASOURCE: Oceaneering
International, Inc. CONTACT: Jack Jurkoshek, Director of Investor
Relations of Oceaneering International, Inc., +1-713-329-4670; or
Fax, +1-7133294653; Web Site: http://www.oceaneering.com/
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