Oceaneering Reports First Quarter 2020 Results

HOUSTON, May 13, 2020 /PRNewswire/ -- Oceaneering International, Inc. ("Oceaneering") (NYSE:OII) today reported a net loss of $368 million, or $(3.71) per share, on revenue of $537 million for the three months ended March 31, 2020. Adjusted net income was $3.5 million, or $0.04 per share, reflecting the impact of $393 million of pre-tax adjustments, including $379 million associated with goodwill impairments, asset impairments and write-offs during the quarter.

During the prior quarter ended December 31, 2019, Oceaneering reported a net loss of $263 million, or $(2.66) per share, on revenue of $561 million. 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.

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 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, 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


                                              
           Mar 31,                               
            Dec 31,





                                   2020                            2019                      2019






     Revenue                             $
           536,668                                         $
            493,886              $
      560,810



     Gross Margin               46,752                                      27,587                                     (20,387)


      Income (Loss) from
       Operations             (380,757)                                   (21,714)                                   (254,170)


      Net Income (Loss)       (367,598)                                   (24,827)                                   (262,912)




      Diluted Earnings (Loss)
       Per Share                           $
           (3.71)                                         $
            (0.25)              $
      (2.66)



Roderick A. Larson, President and Chief Executive Officer of Oceaneering, stated, "I am very pleased that, even with the unprecedented global uncertainties presented during the first quarter, our adjusted results exceeded expectations. The key factor in achieving these results was better-than-anticipated performance within our energy-focused businesses, which included the benefit from cost reduction measures implemented during the fourth quarter of 2019 and the first quarter of 2020. Each of our operating segments generated positive adjusted operating results and adjusted EBITDA, and our consolidated adjusted EBITDA of $51.6 million surpassed both our outlook and published consensus estimates.

"As anticipated, our cash balance decreased during the quarter, primarily as a result of a difference in timing associated with customer progress milestone cash collections and payments to vendors on several large contracts. Additionally, during the quarter, we disbursed accrued employee incentive payments related to attainment of specific performance goals in prior periods.

"During the quarter, primarily as a result of the negative market impacts from COVID-19 and significantly lower crude oil prices, we recognized certain non-cash impairment charges, mostly related to goodwill. We also recognized additional restructuring costs as we continued to adjust our staffing levels and geographic footprint.

"Sequentially, both our first quarter ROV revenue and average revenue per day on hire decreased 4% on flat days on hire. As expected, ongoing cost control measures and efficiencies, along with fewer installations and mobilizations, resulted in improved adjusted operating performance and adjusted EBITDA. Adjusted EBITDA margin increased to 32%. At the end of March, our ROV fleet count remained at 250 vehicles and, for the first quarter, fleet utilization was 65%. Our fleet use during the quarter was 68% in drill support and 32% in vessel-based activity. At the end of March, we had ROV contracts on 95 of the 153 floating rigs under contract, resulting in a drill support market share of 62%.

"Subsea Products first quarter adjusted operating results exceeded expectations and were comparable to the results of the fourth quarter of 2019. Manufactured products revenue and operating results met expectations. Service and rental results exceeded expectations, largely due to higher activity in Norway and West Africa. Our Subsea Products backlog at March 31, 2020 was $528 million, compared to our December 31, 2019 backlog of $630 million. Reflecting the higher level of throughput and a lower level of market activity, our book-to-bill ratio for the first quarter was 0.5.

"Sequentially, Subsea Projects adjusted operating results declined as expected on materially lower revenue, as a result of lower seasonal vessel and survey activity. Asset Integrity adjusted operating results improved, benefiting from cost reduction activities undertaken in the fourth quarter of 2019 and first quarter of 2020.

"For our non-energy segment, Advanced Technologies, our first quarter 2020 adjusted operating results were sequentially flat. Adverse impacts of COVID-19 to our entertainment business results offset gains from our government service businesses. As compared to the fourth quarter of 2019, Unallocated Expenses declined as a result of lower accruals for incentive-based compensation.

"During the first quarter, primarily due to the increase in non-cash working capital referenced above, we used $32.2 million of cash in our operating activities. We also used $27.2 million of cash for growth and maintenance capital expenditures. These two items were the largest contributors to a $66.2 million cash decrease during the quarter.

"For the second quarter and full year of 2020, we are not providing operating or EBITDA guidance due to the lack of visibility into the majority of our businesses. Many of the markets we serve are being profoundly affected by the effects of and the associated responses to COVID-19, as well as the significant reductions in our oil and gas customer spending as a result of the lower crude oil price environment. We maintain our guidance that Unallocated Expenses are forecast to be in the high-$20 million range per quarter. We are further revising our capital expenditures guidance by lowering the range to $45 million to $65 million, and our cash tax payments guidance by lowering the range to $30 million to $35 million.

"Preserving our liquidity and balance sheet remains a high priority in the current environment and, as mentioned on our last earnings call, we are taking decisive actions to reduce expenses. We are currently targeting a reduction of annualized expenses in the range of $125 million to $160 million by the end of 2020, inclusive of $35 million to $40 million of reduced depreciation expense. Cost reduction actions being taken include efficiency-enabling projects, simplification of our operating structure including headcount reductions and rationalizing facilities, compensation reductions for senior leadership, a 50% reduction in the Company's 401(k) plan match, supply chain savings and elimination of non-productive assets. Any volume related direct cost reductions are not included in these estimated savings. Since launching this effort, approximately $70 million of annualized cost reductions have been initiated. Additional savings are expected to be achieved throughout the remainder of the year, with the majority occurring in the second and third quarters. We expect the cash costs associated with these actions to approximate $15 million.

"While we currently are not able to provide operating or EBITDA guidance, we still believe that we should generate positive free cash flow during 2020. This belief is based on the following: actions we are taking to achieve cost reductions; reduced capital spending levels; lower cash taxes; our expectation for $16 million to $34 million in CARES Act tax refunds; and cash expected to be generated from working capital for the remainder of the year."

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 concerning Oceaneering's: forecasted Unallocated Expenses per quarter, and annual capital expenditures and cash tax payments; targeted reduction range of annualized expenses, including depreciation expense; timing and anticipation of additional savings from cost reduction actions already initiated; cash costs associated with initiated and pending cost reduction actions; belief in generating positive free cash flow during 2020, and the bases for that belief, including expectations regarding: actions to achieve cost reductions, capital spending, cash taxes, CARES Act tax refunds, and cash from working capital for the remainder of the year.

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; actions by members of OPEC and other oil exporting countries; 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; the continuing effects of the COVID-19 pandemic and the governmental, customer, supplier, and other responses thereto; 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




                                                                                                                                                                                                                                  
              Mar 31,                   
              Dec 31,
                                                                                                                                                                                                                                                 2020                                  2019



                                                                                                                                                                                                                                             
              
                (in thousands)



     ASSETS


                                                      Current assets (including cash and cash
                                                       equivalents of $307,460 and $373,655)                                                         $
              1,151,906                                                     $
            1,244,436


                                                      Net property and equipment                                                   671,828                                           776,532


                                                      Other assets                                                                                                                                        341,363                                         719,695



                                                                                   
              Total Assets                                                                              $
              2,165,097                                                   $
              2,740,663






     LIABILITIES AND EQUITY


                                                      Current liabilities                                                                                  $
              485,733                                                     $
              600,956


                                           
              Long-term debt                                                                           806,396                                                       796,516


                                           
              Other long-term liabilities                                                          236,309                                                       267,782


                                           
              Equity                                                                                                                                              636,659                                       1,075,409



                                                                                   
              Total Liabilities and Equity                                                              $
              2,165,097                                                   $
              2,740,663





                                                                                                 
              
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS




                                                                                                                                                                                                                            
            For the Three Months Ended


                                                                                                                                                                                                
              Mar 31,                
              Mar 31,                   
              Dec 31,
                                                                                                                                                                                                               2020                               2019                                  2019



                                                                                                                                                                                                              
              
              (in thousands, except per share amounts)




                                           
              Revenue                                                          $
              536,668                                                       $
              493,886                                                     $
              560,810


                                                      Cost of services and
                                                       products                                            489,916                                                      466,299                                           581,197



                                                      Gross margin                                          46,752                                                       27,587                                          (20,387)


                                                      Selling, general and
                                                       administrative expense                               55,741                                                       49,301                                            59,717


                                                      Long-lived assets
                                                       impairments                                          68,763                                                                                                       159,353


                                                      Goodwill impairment                                  303,005                                                                                                        14,713



                                                      Income (loss) from
                                                       operations                                        (380,757)                                                    (21,714)                                        (254,170)


                                                      Interest income                                        1,277                                                        2,604                                             1,352


                                                      Interest expense, net of
                                                       amounts capitalized                                (12,462)                                                     (9,424)                                         (11,706)


                                                      Equity in income (losses)
                                                       of unconsolidated
                                                       affiliates                                            1,197                                                        (164)                                              941


                                                      Other income (expense),
                                                       net                                                 (7,128)                                                         719                                           (3,687)



                                                      Income (loss) before
                                                       income taxes                                      (397,873)                                                    (27,979)                                        (267,270)


                                                      Provision (benefit) for
                                                       income taxes                                       (30,275)                                                     (3,152)                                          (4,358)



                                                      Net Income (Loss)                                              $
              (367,598)                                                     $
              (24,827)                                                  $
              (262,912)






     Weighted average diluted shares outstanding                                                                                                                 99,055                                            98,714                                                      98,930



     Diluted earnings (loss) per share                                            $
              (3.71)                                                       $
              (0.25)                                                     $
              (2.66)





     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


                                                                                                                     Mar 31, 2020                                      Mar 31, 2019                              Dec 31, 2019



                                                                                                                                                      
              
                ($ in thousands)





     Remotely Operated Vehicles


                                                          
              Revenue                                                        $
              111,780                                                                         $
              100,346                                  $
             116,020


                                      Gross margin                                                             $
              18,112                                                                            $
              9,421                                     $
          (7,728)


                                                 
              Operating income (loss)                                                 $
              9,066                                                                           $
              1,418                                 $
             (18,660)


                                                          Operating income (loss) %                           8
            %                                                       1
            %                                                    (16)
            %


                                    Days available                                               22,750                                                                       24,506                                                            25,576


                                     Days utilized                                               14,853                                                                       12,942                                                            14,836


                                       Utilization                                           65
          %                                                                53
            %                                                     58
            %





     Subsea Products


                                                          
              Revenue                                                        $
              194,838                                                                         $
              128,844                                  $
             183,659


                                      Gross margin                                                             $
              28,639                                                                           $
              12,315                                       $
          4,527


                                                 
              Operating income (loss)                                              $
              (91,858)                                                                          $
              (476)                                $
             (10,325)


                                                          Operating income (loss) %                        (47)
            %                                                                                %                                      (6)
            %


                                                
              Backlog at end of period                                               $
              528,000                                                                         $
              464,000                                  $
             630,000





     Subsea Projects


                                                          
              Revenue                                                         $
              61,455                                                                          $
              89,728                                   $
             86,728


                                      Gross margin                                                            $
              (2,114)                                                                           $
              9,033                                       $
          1,546


                                                 
              Operating income (loss)                                             $
              (145,290)                                                                          $
              2,892                                $
             (148,075)


                                                          Operating income (loss) %                                 (236)                                                       3
            %                                                             (171)
                                                                                                                                %                                                                                                                             %





     Asset Integrity


                                                          
              Revenue                                                         $
              59,132                                                                          $
              60,689                                   $
             61,835


                                      Gross margin                                                              $
              8,729                                                                            $
              6,272                                     $
          (6,867)


                                                 
              Operating income (loss)                                             $
              (109,441)                                                                          $
              (713)                                $
             (48,919)


                                                          Operating income (loss) %                                 (185)
                                                                                                                                %                                                     (1)
            %                                                    (79)
      %





     Advanced Technologies


                                                          
              Revenue                                                        $
              109,463                                                                         $
              114,279                                  $
             112,568


                                      Gross margin                                                             $
              13,428                                                                           $
              15,248                                      $
          12,354


                                                 
              Operating income (loss)                                              $
              (10,585)                                                                          $
              9,599                                    $
             5,270


                                                          Operating income (loss) %                        (10)
            %                                                       8
            %                                                       5
            %





     Unallocated Expenses


                                      Gross margin                                                           $
              (20,042)                                                                        $
              (24,702)                                   $
          (24,219)


                                                 
              Operating income (loss)                                              $
              (32,649)                                                                       $
              (34,434)                                $
             (33,461)




      Total


                                                            
              Revenue                                                        $
              536,668                                                                         $
              493,886                                  $
             560,810


                                      Gross margin                                                             $
              46,752                                                                           $
              27,587                                    $
          (20,387)


                                                 
              Operating income (loss)                                             $
              (380,757)                                                                       $
              (21,714)                               $
             (254,170)


                                                          Operating income (loss) %                        (71)
            %                                                     (4)
            %                                                    (45)
            %




      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


                                                                                                                                     Mar 31, 2020                           Mar 31, 2019              Dec 31, 2019



                                                                                                                                                    
              
                (in thousands)




      Capital Expenditures, including
       Acquisitions                                               $
              27,229                                               $
              29,964                                               $
              18,837





      Depreciation and amortization:


      Energy Services and Products


                                                    Remotely
                                                     Operated
                                                     Vehicles                                      $
              25,725                                                    $
              27,990                                   $
     32,043


                                                    Subsea
                                                     Products                             62,454                                               12,991                                       30,992


                                                    Subsea
                                                     Projects                            143,346                                                7,882                                       14,541


                                                    Asset
                                                     Integrity                           111,385                                                1,634                                       30,529



      Total Energy Services and
       Products                                                                                                    342,910                                                      50,497                                108,105



     Advanced Technologies                                                                                         12,178                                                         830                                    766



     Unallocated Expenses                                                                                           1,108                                                       1,159                                  1,199



      Total Depreciation and
       Amortization                                              $
              356,196                                               $
              52,486                                              $
              110,070





      Goodwill and long-lived asset impairment expense, reflected in the depreciation and amortization expense above, was $310 million and $59.4 million, respectively, in
       the three months ended March 31, 2020 and December 31, 2019.



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 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


                                                                                              
     Mar 31, 2020                                             
              Mar 31, 2019                                   
              Dec 31, 2019


                                                                                    Net Income                  Diluted EPS                          Net Income                           Diluted EPS                Net Income                     Diluted EPS
                                                                                 (Loss)                                                           (Loss)                                                          (Loss)



                                                                                                                                   
              
                (in thousands, except per share amounts)




      Net income (loss) and diluted EPS as
       reported in accordance with GAAP                  $
        (367,598)                                 $
              (3.71)                                                      $
              (24,827)                                          $
            (0.25)   $
        (262,912)   $
        (2.66)



      Pre-tax adjustments for the effects
       of:


                                           Long-lived
                                            assets
                                            impairments                   68,763                                                                                                                                                      159,353


                                           Long-lived
                                            assets
                                            write-offs                     7,328                                                                                                                                                       44,653


                                           Inventory
                                            write-downs                                                                                                                                                                               21,285


                                           Goodwill
                                            impairment                   303,005                                                                                                                                                       14,713


                                           Restructuring
                                            expenses and
                                            other                          6,630                                                                                                                                                       11,751


                                           Foreign
                                            currency
                                            (gains)
                                            losses                         7,050                                                                           (614)                                                                        3,477




     Total pre-tax adjustments                  392,776                                                               (614)                                                                             255,232




      Tax effect on pre-tax adjustments at
       the applicable jurisdictional
       statutory rate in effect for
       respective periods                       (45,355)                                                                129                                                                             (50,653)




     Discrete tax items:


          Share-based compensation                   987                                                                 986                                                                                    2


          Uncertain tax positions                (9,652)                                                              1,022                                                                                1,276



         U.S. CARES Act                        (33,784)



         Tax reform                                                                                                                                                                                        272



         Valuation allowances                    65,208                                                               1,539                                                                               59,667



         Other                                      950                                                             (2,141)                                                                               (356)



                                           Total
                                            discrete tax
                                            adjustments                   23,709                                                                           1,406                                                                        60,861



                                           Total of
                                            adjustments                  371,130                                                                             921                                                                       265,440




     Adjusted Net Income (Loss)                            $
         3,532                                    $
              0.04                                                       $
              (23,906)                                          $
            (0.24)    $
           2,528    $
          0.03



      Weighted average diluted shares
       outstanding utilized for Adjusted
       Net Income (Loss)                                                  99,649                                                                                       98,714                                                                              99,721









                                                                               
        
                EBITDA and Adjusted EBITDA and Margins




                                                                                                                  
              For the Three Months Ended


                                                                                    Mar 31, 2020                              Mar 31, 2019                               Dec 31, 2019



                                                                                                                
              
                ($ in thousands)





              Net income (loss)                                $
       (367,598)                                                               $
              (24,827)                                   $
           (262,912)



              Depreciation and amortization                                                        356,196                                                                52,486                           110,070



                                               Subtotal               (11,402)                                                      27,659                                             (152,842)


               Interest expense, net of interest income                                              11,185                                                                 6,820                            10,354


               Amortization included in interest expense                                              (333)                                                                (340)                            (335)


               Provision (benefit) for income taxes                                                (30,275)                                                              (3,152)                          (4,358)



                                    
              EBITDA                 (30,825)                                                      30,987                                             (147,181)




              Adjustments for the effects of:


                                               Long-lived
                                                assets
                                                impairments             68,763                                                                                                           159,353


                                               Inventory write-
                                                downs                                                                                                                                    21,285


                                               Restructuring
                                                expenses and
                                                other                    6,630                                                                                                            11,751


                                               Foreign currency
                                                (gains) losses           7,050                                                        (614)                                                3,477



                                               Total of
                                                adjustments             82,443                                                        (614)                                              195,866


                                               Adjusted EBITDA                   $
           51,618                                                                      $
            30,373                                   $
     48,685






              Revenue                                            $
       536,668                                                                 $
              493,886                                     $
            560,810





    EBITDA margin %                                                                      (6)
            %                                                             6
         %                      (26)
         %



    Adjusted EBITDA margin %                                                              10
            %                                                             6
         %                         9
         %






                                                   
              
                Free Cash Flow




                                                                                       
              For the Three Months Ended


                                                                                        Mar 31, 2020                          Mar 31, 2019



                                                                                       
              
                (in thousands)



     Net Income (loss)                                                        $
              (367,598)                                       $
     (24,827)



     Non-cash adjustments:


                                            Depreciation and amortization,
                                             including goodwill impairment                               356,196                                 52,486


                                          
     Other non-cash                                                64,137                                     62


      Other increases (decreases) in cash
       from operating activities                                  (84,885)                                                         (8,597)



      Cash flow provided by (used in)
       operating activities                                       (32,150)                                                          19,124


      Purchases of property and equipment                         (27,229)                                                        (29,964)




     Free Cash Flow                                                            $
              (59,379)                                       $
     (10,840)












                                                                                                                                           
           
                Adjusted Operating Income (Loss) and Margins by Segment




                                                                                                                                                                     
              For the Three Months Ended March 31, 2020


                                                                                                Remotely             
            Subsea             
            Subsea                           
              Asset                       Advanced                          Unallocated         
     Total
                                                                                           Operated                     Products                    Projects                                  Integrity                        Tech.                            Expenses
                                                                                           Vehicles



                                                                                                                                                                           
              
                ($ in thousands)


      Operating Income (Loss) as reported in
       accordance with GAAP                                         $
       9,066                           $
        (91,858)                                                 $
              (145,290)                                                $
         (109,441)                                       $
            (10,585)                 $
         (32,649)                        $
           (380,757)




     Adjustments for the effects of:


                                                 Long-lived
                                                  assets
                                                  impairments                                                   54,859                                          7,689                                                                                                           6,215                                           68,763


                                                 Long-lived
                                                  assets write-
                                                  offs                                                                                                         7,328                                                                                                                                                           7,328


                                                 Goodwill
                                                  impairment                                                    51,302                                        129,562                                                 110,753                                                   11,388                                          303,005


                                                 Restructuring
                                                  expenses and
                                                  other                        713                                1,668                                          1,480                                                   1,694                                                      795                                280          6,630



                                               
     Total of adjustments                                713                                 107,829                                                      146,059                                       112,447                                  18,398                        280                             385,726






     Adjusted Operating Income (Loss)                              $
       9,779                             $
        15,971                                                        $
              769                                                   $
           3,006                                          $
             7,813                  $
         (32,369)                          $
             4,969






     Revenue                                                     $
       111,780                            $
        194,838                                                     $
              61,455                                                  $
           59,132                                        $
             109,463                                          $
     536,668


      Operating income (loss) % as reported in      8
            %                    (47)
     %                                         (236)                                               (185)
       accordance with GAAP                                                                                                            %                                                   %                                    (10)
          %                                                            (71)
           %


      Operating income (loss)% using adjusted
       amounts                                      9
            %                       8
     %                                   1
            %                                         5
            %                                       7
          %                                                               1
           %




                                                                                                                                                                     
              For the Three Months Ended March 31, 2019


                                                                                                Remotely             
            Subsea             
            Subsea                           
              Asset                       Advanced                          Unallocated         
     Total
                                                                                           Operated                     Products                    Projects                                  Integrity                        Tech.                            Expenses
                                                                                           Vehicles



                                                                                                                                                                           
              
                ($ in thousands)


      Operating Income (Loss) as reported in
       accordance with GAAP                                         $
       1,418                              $
        (476)                                                     $
              2,892                                                   $
           (713)                                         $
             9,599                  $
         (34,434)                         $
           (21,714)






     Adjusted Operating Income (Loss)                              $
       1,418                              $
        (476)                                                     $
              2,892                                                   $
           (713)                                         $
             9,599                  $
         (34,434)                         $
           (21,714)






     Revenue                                                     $
       100,346                            $
        128,844                                                     $
              89,728                                                  $
           60,689                                        $
             114,279                                          $
     493,886


      Operating income (loss) % as reported in
       accordance with GAAP                         1
            %                                     %                        3
            %                                       (1)
            %                                       8
          %                                                             (4)
           %


      Operating income (loss)% using adjusted
       amounts                                      1
            %                                     %                        3
            %                                       (1)
            %                                       8
          %                                                             (4)
           %









                                                                                                                                                
            
                Adjusted Operating Income (Loss) and Margins by Segment






                                                                                                                                                                         
              For the Three Months Ended December 31, 2019


                                                                                                      Remotely              
            Subsea            
             Subsea                           
              Asset                       Advanced                          Unallocated      
     Total
                                                                                                 Operated                      Products                    Projects                                  Integrity                        Tech.                            Expenses
                                                                                                 Vehicles



                                                                                                                                                                                
              
                ($ 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               (16)                         (6)
     %                                          (171)                                                (79)
       accordance with GAAP                                     %                                                                             %                                                   %                                       5
          %                                                        (45)
         %


      Operating income (loss) % using adjusted
       amounts                                        4
            %                           8
     %                                    6
            %                                                                  %                        6
          %                                                                         %









                                                                                                                                                 
          
                EBITDA and Adjusted EBITDA and Margins by Segment




                                                                                                                                                                        
              For the Three Months Ended March 31, 2020


                                                                                                     Remotely             
            Subsea            
           Subsea                           
              Asset                       Advanced                             Unallocated         
     Total
                                                                                                Operated                     Products                  Projects                                  Integrity                        Tech.                               Expenses
                                                                                                Vehicles                                                                                                                                                             and other



                                                                                                                                                                              
              
                ($ in thousands)


      Operating Income (Loss) as reported in
       accordance with GAAP                                           $
       9,066                              $
        (91,858)                                               $
              (145,290)                                                $
           (109,441)                                        $
            (10,585)                           $
         (32,649)                         $
           (380,757)




     Adjustments for the effects of:


                                                 Depreciation and
                                                  amortization                   25,725                               62,454                                      143,346                                                 111,385                                                      12,178                              1,108                  356,196


                                                 Other pre-tax                                                                                                                                                                                                                                                      (6,264)                 (6,264)



                                                 EBITDA                          34,791                             (29,404)                                     (1,944)                                                  1,944                                                       1,593                           (37,805)                (30,825)




     Adjustments for the effects of:


                                                 Long-lived
                                                  assets
                                                  impairments                                                        54,859                                        7,689                                                                                                              6,215                                                     68,763


                                                 Restructuring
                                                  expenses and
                                                  other                             713                                1,668                                        1,480                                                   1,694                                                         795                                280                    6,630


                                                 Foreign currency
                                                  (gains) losses                                                                                                                                                                                                                                                      7,050                    7,050



                                               
     Total of adjustments                                     713                                 56,527                                                       9,169                                           1,694                                    7,010                             7,330                                  82,443




     Adjusted EBITDA                                                $
       35,504                                $
        27,123                                                    $
              7,225                                                   $
             3,638                                           $
             8,603                            $
         (30,475)                           $
            51,618






     Revenue                                                       $
       111,780                               $
        194,838                                                   $
              61,455                                                  $
             59,132                                         $
             109,463                                                     $
     536,668


      Operating income (loss) % as reported in        8
            %                       (47)
     %                                         (236)                                             (185)
       accordance with GAAP                                                                                                                 %                                                 %                                    (10)
          %                                                               (71)
           %



     EBITDA Margin                                  31
            %                       (15)
     %                                 (3)
            %                                       3
            %                                       1
          %                                                                (6)
           %



     Adjusted EBITDA Margin                         32
            %                         14
     %                                  12
            %                                       6
            %                                       8
          %                                                                 10
           %




                                                                                                                                                                        
              For the Three Months Ended March 31, 2019


                                                                                                     Remotely             
            Subsea            
           Subsea                           
              Asset                       Advanced                             Unallocated         
     Total
                                                                                                Operated                     Products                  Projects                                  Integrity                        Tech.                               Expenses
                                                                                                Vehicles                                                                                                                                                             and other



                                                                                                                                                                              
              
                ($ in thousands)


      Operating Income (Loss) as reported in
       accordance with GAAP                                           $
       1,418                                 $
        (476)                                                   $
              2,892                                                   $
             (713)                                          $
             9,599                            $
         (34,434)                          $
           (21,714)




     Adjustments for the effects of:


                                                 Depreciation and
                                                  amortization                   27,990                               12,991                                        7,882                                                   1,634                                                         830                              1,159                   52,486


                                                 Other pre-tax                                                                                                                                                                                                                                                          215                      215



                                                 EBITDA                          29,408                               12,515                                       10,774                                                     921                                                      10,429                           (33,060)                  30,987




     Adjustments for the effects of:


                                                 Foreign currency
                                                  (gains) losses                                                                                                                                                                                                                                                      (614)                   (614)


                                               
     Total of adjustments                                                                                                                                                                                                                                                            (614)                                  (614)




     Adjusted EBITDA                                                $
       29,408                                $
        12,515                                                   $
              10,774                                                     $
             921                                          $
             10,429                            $
         (33,674)                           $
            30,373






     Revenue                                                       $
       100,346                               $
        128,844                                                   $
              89,728                                                  $
             60,689                                         $
             114,279                                                     $
     493,886


      Operating income (loss) % as reported in
       accordance with GAAP                           1
            %                                        %                        3
            %                                     (1)
            %                                       8
          %                                                                (4)
           %



     EBITDA Margin                                  29
            %                         10
     %                                  12
            %                                       2
            %                                       9
          %                                                                  6
           %



     Adjusted EBITDA Margin                         29
            %                         10
     %                                  12
            %                                       2
            %                                       9
          %                                                                  6
           %







                                                                                                                                                
          
                EBITDA and Adjusted EBITDA and Margins by Segment




                                                                                                                                                                     
              For the Three Months Ended December 31, 2019


                                                                                                     Remotely              
            Subsea           
           Subsea                           
              Asset                       Advanced                           Unallocated         
     Total
                                                                                                Operated                      Products                 Projects                                  Integrity                        Tech.                             Expenses
                                                                                                Vehicles                                                                                                                                                           and other



                                                                                                                                                                            
              
                ($ 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               (16)                        (6)
     %                                          (171)                                             (79)
       accordance with GAAP                                     %                                                                            %                                                %                                       5
          %                                                            (45)
           %



     EBITDA Margin                                  12
            %                         11
     %                                          (154)                                             (30)
                                                                                                                                             %                                                %                                       5
          %                                                            (26)
           %



     Adjusted EBITDA Margin                         27
            %                         15
     %                                   16
            %                                      2
            %                                       7
          %                                                               9
           %

View original content:http://www.prnewswire.com/news-releases/oceaneering-reports-first-quarter-2020-results-301058763.html

SOURCE Oceaneering International, Inc.