Oceaneering Reports Second Quarter 2021 Results

Rhea-AI Summary

Oceaneering International (NYSE: OII) reported a net income of $6.2 million ($0.06 per share) on revenue of $498 million for Q2 2021, up from a net loss of $9.4 million in Q1. Adjusted EBITDA reached $60.6 million, exceeding estimates, driven by increased demand in energy services and a growing backlog. The cash position improved to $456 million, and the company raised its adjusted EBITDA guidance to $200-$225 million for 2021. However, the Offshore Projects Group faced declining operating income margins due to unplanned downtime despite revenue increases. Overall, positive client interactions and favorable oil prices support financial outlook.

Positive

• Net income of $6.2 million for Q2 2021, reversing a $9.4 million loss in Q1.
• Adjusted EBITDA of $60.6 million for Q2 2021, exceeding estimates.
• Raised adjusted EBITDA guidance to $200-$225 million for the full year 2021.
• Increased cash balance to $456 million, providing flexibility for debt management.

Negative

• Offshore Projects Group adjusted operating income declined despite increased revenue.
• Sequential decline in adjusted operating income margin to 7% in Q2 from 10% in Q1 due to unplanned downtime.

HOUSTON, July 28, 2021 /PRNewswire/ -- Oceaneering International, Inc. ("Oceaneering") (NYSE:OII) today reported net income of $6.2 million, or $0.06 per share, on revenue of $498 million for the three months ended June 30, 2021.  Adjusted net income was $10.4 million, or $0.10 per share, reflecting the impact of $3.2 million of pre-tax adjustments associated with a loss on the sale of an asset and foreign exchange losses recognized during the quarter, and $1.6 million of discrete tax adjustments, primarily due to changes in valuation allowances.

During the prior quarter ended March 31, 2021, Oceaneering reported a net loss of $9.4 million, or $(0.09) per share, on revenue of $438 million.  Adjusted net income was $2.8 million, or $0.03 per share, reflecting the impact of $3.2 million of pre-tax adjustments associated with restructuring and other expenses and foreign exchange losses recognized during the quarter, and $9.6 million of discrete tax adjustments.

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 Adjusted EBITDA and Margins, Free Cash Flow, 2021 Adjusted EBITDA Estimates, Adjusted Operating Income (Loss) and Margins by Segment, and EBITDA and Adjusted EBITDA and Margins by Segment. These tables are included below under the caption Reconciliations of Non-GAAP to GAAP Financial Information.

Summary of Results
(in thousands, except per share amounts)
		Three Months Ended												Six Months Ended
		Jun 30,								Mar 31,				Jun 30,
		2021				2020				2021				2021				2020
Revenue		$	498,199			$	427,216			$	437,553			$	935,752			$	963,884
Gross Margin		68,397				42,537				56,657				125,054				89,289
Income (Loss) from Operations		22,819				(5,182)				13,783				36,602				(385,939)
Net Income (Loss)		6,241				(24,788)				(9,365)				(3,124)				(392,386)
Diluted Earnings (Loss) Per Share		$	0.06			$	(0.25)			$	(0.09)			$	(0.03)			$	(3.96)

For the second quarter of 2021:

• Consolidated Adjusted EBITDA was $60.6 million
• Consolidated Adjusted Operating Income was $24.2 million
• Cash flow generated from operations was $50.5 million and free cash flow was $37.9 million
• Cash position increased by $13.3 million, from $443 million to $456 million
• We retired $30.5 million of our 2024 senior notes through open market repurchases

Roderick A. Larson, President and Chief Executive Officer of Oceaneering, stated, "Based on our first half financial performance and expectations for the second half of 2021, we are raising our adjusted EBITDA guidance to a range of $200 million to $225 million for the full year.  This confidence, despite ongoing uncertainties associated with COVID-19, stems from positive client interactions, supportive oil price expectations, and growing backlog.

"Our second quarter 2021 results returned positive net income, and we produced adjusted EBITDA of $60.6 million, which exceeded consensus estimates.  These positive results were attributable to the increased seasonal demand for our services and products in our energy businesses, growth in our government focused business segment, and forfeitures of long-term incentive accruals in Unallocated Expenses.

Segment Results:

"Sequentially, Subsea Robotics (SSR) revenue and adjusted operating income both increased as expected due to higher seasonal activity for ROV, survey, and tooling services.  SSR adjusted EBITDA margin of 31% was relatively consistent with the first quarter of 2021, with pricing remaining stable across our SSR business lines.

"Second quarter 2021 ROV days on hire were sequentially higher for both drill support and vessel-based services as compared to first quarter 2021.  Fleet utilization rose significantly, averaging 62% for the quarter, as compared to 53% for the first quarter.  Our fleet use during the quarter was 58% in drill support and 42% in vessel-based activity, compared to 64% and 36%, respectively, during the first quarter.  Second quarter 2021 average ROV revenue per day on hire of $8,056 was 2% higher than the first quarter of 2021.

"Manufactured Products (MP) second quarter 2021 adjusted operating income declined from the first quarter of 2021 on lower revenue.  Sequentially, adjusted operating income margin decreased to 1% from 4% in the first quarter of 2021 as lower segment revenue decreased the ability to leverage our cost base.  Our Manufactured Products backlog on June 30, 2021 was $315 million, compared to our March 31, 2021 backlog of $248 million.  Our book-to-bill ratio was 1.3 for the six months ended June 30, 2021 and 0.8 for the trailing 12 months.

"The second quarter 2021 Offshore Projects Group (OPG) adjusted operating income declined as compared to the first quarter of 2021 despite a meaningful increase in revenue.  Revenue benefited from ongoing field activities on several projects in Angola and a seasonal increase in intervention, maintenance and repair (IMR) work in the Gulf of Mexico.  The sequential decline in adjusted operating income margin, from 10% in the first quarter of 2021 to 7% in the second quarter of 2021, was primarily due to unplanned downtime and related costs associated with the Angola riserless light well intervention project, which was partially offset by higher IMR activity levels in the Gulf of Mexico.

"Integrity Management and Digital Solutions (IMDS) sequential adjusted operating income was higher on a 19% increase in revenue.  Higher seasonal activity and the start-up of several new projects contributed to the revenue increase.  Continuing efficiency improvements, including utilization of field personnel, resulted in adjusted operating income margin increasing to 7% in the second quarter 2021 from 5% in the first quarter of 2021.

"Aerospace and Defense Technologies (ADTech) second quarter 2021 adjusted operating income improved from the first quarter of 2021 on a 20% increase in revenue.  Adjusted operating income margin of 18% was better than forecast due to project mix and favorable rate-based adjustments.  At the corporate level for the second quarter of 2021, adjusted Unallocated Expenses of $30.3 million were slightly lower as compared to the first quarter of 2021 due to lower expense accruals related to incentive-based compensation forfeitures.

Third Quarter Outlook:

"For the third quarter, compared to the second quarter, we anticipate relatively flat activity and operating profitability in our SSR, Manufactured Products, and IMDS segments, lower activity levels and relatively flat operating profitability in our OPG segment, and lower activity levels and lower operating profitability in our ADTech segment.  Unallocated Expenses are forecast to be in the mid-$30 million range due primarily to increased information technology infrastructure costs and normalized accruals for incentive-based compensation.  On a consolidated basis, we expect a sequential decline in third quarter 2021 results, with adjusted EBITDA in the range of $50 million to $55 million on slightly lower revenue.

Cash and Liquidity:

"Our cash balance of $456 million, coupled with improved debt markets and our expectation to generate meaningful free cash flow in 2021, will provide us with improved flexibility to address our 2024 debt maturity while we continue to leverage our technologies and core competencies into energy transition opportunities."

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 expectations about: full year 2021 adjusted EBITDA range and the bases for that range; characterization of demand or activity levels as seasonal; references to backlog, to the extent backlog may be an indicator of future revenue or profitability; anticipated third quarter segment activity levels and operating profitability as compared to second quarter 2021; forecasted Unallocated Expenses and the bases for that forecast; expectations about consolidated third quarter 2021 sequential results and revenue, and adjusted EBITDA range; characterization of debt markets and expectation to generate meaningful free cash flow in 2021; and the expectation of improved flexibility to address the 2024 debt maturity.

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, force majeure declarations and the exercise of contractual suspension rights 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 10-Q 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, aerospace, and entertainment 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
																					Jun 30, 2021				Dec 31, 2020
																					(in thousands)
ASSETS
	Current assets (including cash and cash equivalents of $456,087 and $452,016)																				$	1,228,876			$	1,170,263
	Net property and equipment																				537,909				591,107
	Other assets																				294,764				284,472
			Total Assets																		$	2,061,549			$	2,045,842
LIABILITIES AND EQUITY
	Current liabilities																				$	479,523			$	437,116
	Long-term debt																				773,423				805,251
	Other long-term liabilities																				245,871				245,318
	Equity																				562,732				558,157
			Total Liabilities and Equity																		$	2,061,549			$	2,045,842
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
									For the Three Months Ended												For the Six Months Ended
									Jun 30, 2021				Jun 30, 2020				Mar 31, 2021				Jun 30, 2021				Jun 30, 2020
									(in thousands, except per share amounts)
	Revenue								$	498,199			$	427,216			$	437,553			$	935,752			$	963,884
	Cost of services and products								429,802				384,679				380,896				810,698				874,595
		Gross margin							68,397				42,537				56,657				125,054				89,289
	Selling, general and administrative expense								45,578				47,719				42,874				88,452				103,460
	Long-lived assets impairments								—				—				—				—				68,763
	Goodwill impairment								—				—				—				—				303,005
		Income (loss) from operations							22,819				(5,182)				13,783				36,602				(385,939)
	Interest income								683				511				519				1,202				1,788
	Interest expense, net of amounts capitalized								(9,729)				(11,611)				(10,407)				(20,136)				(24,073)
	Equity in income (losses) of unconsolidated affiliates								378				674				534				912				1,871
	Other income (expense), net								(1,955)				(3,660)				(1,453)				(3,408)				(10,788)
		Income (loss) before income taxes							12,196				(19,268)				2,976				15,172				(417,141)
	Provision (benefit) for income taxes								5,955				5,520				12,341				18,296				(24,755)
		Net Income (Loss)							$	6,241			$	(24,788)			$	(9,365)			$	(3,124)			$	(392,386)
Weighted average diluted shares outstanding									100,847				99,273				99,461				99,613				99,164
Diluted earnings (loss) per share									$	0.06			$	(0.25)			$	(0.09)			$	(0.03)			$	(3.96)
The above Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Operations should be read in conjunction with the Company's latest Annual Report on Form 10-K and Quarterly Report on Form 10-Q.

 

SEGMENT INFORMATION
						For the Three Months Ended												For the Six Months Ended
						Jun 30, 2021				Jun 30, 2020 *				Mar 31, 2021				Jun 30, 2021				Jun 30, 2020 *
					($ in thousands)
Subsea Robotics
			Revenue			$	141,371			$	119,234			$	119,119			$	260,490			$	259,004
	Gross margin					$	31,767			$	21,324			$	24,078			$	55,845			$	40,797
Operating income (loss)						$	21,710			$	11,662			$	14,619			$	36,329			$	(82,421)
Operating income (loss) %						15		%		10		%		12		%		14		%		(32)		%
	ROV days available					22,750				22,750				22,469				45,219				45,500
	ROV days utilized					14,005				13,501				11,887				25,892				28,354
	ROV utilization					62		%		59		%		53		%		57		%		62		%
Manufactured Products
			Revenue			$	79,127			$	100,570			$	86,825			$	165,952			$	267,104
	Gross margin					$	8,391			$	13,679			$	10,004			$	18,395			$	31,628
Operating income (loss)						$	790			$	3,865			$	2,753			$	3,543			$	(62,273)
Operating income (loss) %						1		%		4		%		3		%		2		%		(23)		%
Backlog at end of period						$	315,000			$	380,000			$	248,000			$	315,000			$	380,000
Offshore Projects Group
			Revenue			$	107,951			$	73,840			$	89,234			$	197,185			$	148,094
	Gross margin					$	14,566			$	3,170			$	15,111			$	29,677			$	5,265
Operating income (loss)						$	7,996			$	(4,135)			$	8,813			$	16,809			$	(83,458)
Operating income (loss) %						7		%		(6)		%		10		%		9		%		(56)		%
Integrity Management & Digital Solutions
			Revenue			$	64,070			$	53,969			$	54,048			$	118,118			$	118,698
	Gross margin					$	10,462			$	5,455			$	8,209			$	18,671			$	15,247
Operating income (loss)						$	4,721			$	(1,825)			$	2,474			$	7,195			$	(123,360)
Operating income (loss) %						7		%		(3)		%		5		%		6		%		(104)		%
Aerospace and Defense Technologies
			Revenue			$	105,680			$	79,603			$	88,327			$	194,007			$	170,984
	Gross margin					$	24,603			$	17,313			$	22,110			$	46,713			$	34,798
Operating income (loss)						$	19,340			$	13,430			$	16,839			$	36,179			$	26,401
Operating income (loss) %						18		%		17		%		19		%		19		%		15		%
Unallocated Expenses
	Gross margin					$	(21,392)			$	(18,404)			$	(22,855)			$	(44,247)			$	(38,446)
Operating income (loss)						$	(31,738)			$	(28,179)			$	(31,715)			$	(63,453)			$	(60,828)
Total
			Revenue			$	498,199			$	427,216			$	437,553			$	935,752			$	963,884
	Gross margin					$	68,397			$	42,537			$	56,657			$	125,054			$	89,289
Operating income (loss)						$	22,819			$	(5,182)			$	13,783			$	36,602			$	(385,939)
Operating income (loss) %						5		%		(1)		%		3		%		4		%		(40)		%
The above Segment Information does not include adjustments for non-recurring transactions. See the tables below under the caption "Reconciliations of Non-GAAP to GAAP Financial Information" for financial measures that our management considers in evaluating our ongoing operations.
* Recast to reflect segment changes.

 

SELECTED CASH FLOW INFORMATION
						For the Three Months Ended												For the Six Months Ended
						Jun 30, 2021				Jun 30, 2020				Mar 31, 2021				Jun 30, 2021				Jun 30, 2020
						(in thousands)
Capital Expenditures, including Acquisitions						$	12,629			$	10,631			$	10,699			$	23,328			$	37,860
						For the Three Months Ended												For the Six Months Ended
						Jun 30, 2021				Jun 30, 2020 *				Mar 31, 2021				Jun 30, 2021				Jun 30, 2020 *
						(in thousands)
Depreciation and amortization:
Energy Services and Products
	Subsea Robotics					$	22,436			$	25,080			$	22,952			$	45,388			$	164,267
	Manufactured Products					3,248				3,587				3,227				6,475				19,551
	Offshore Projects Group					6,862				8,255				7,125				13,987				83,162
	Integrity Management & Digital Solutions					1,091				757				1,124				2,215				125,100
Total Energy Services and Products						33,637				37,679				34,428				68,065				392,080
Aerospace and Defense Technologies						1,404				658				1,276				2,680				1,345
Unallocated Expenses						184				361				767				951				1,469
	Total Depreciation and Amortization					$	35,225			$	38,698			$	36,471			$	71,696			$	394,894
Goodwill and long-lived asset impairment expense, reflected in the depreciation and amortization expense above, was $310 million in the six months ended June 30, 2020.
* Recast to reflect segment changes.

 

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, 2021 Adjusted EBITDA Estimates, and Free Cash Flow, as well as the following by segment:  Adjusted Operating Income and Margins, EBITDA, EBITDA Margins, Adjusted EBITDA and Adjusted EBITDA Margins.  We define EBITDA Margin as EBITDA divided by revenue.  Adjusted EBITDA and Adjusted EBITDA Margins as well as Adjusted Operating Income and Margin and related information by segment exclude the effects of certain specified items, as set forth in the tables that follow.  EBITDA and EBITDA Margins, Adjusted EBITDA and Adjusted EBITDA Margins, and Adjusted Operating Income and Margin and related information by segment are each non-GAAP financial measures. We define Free Cash Flow as cash flow provided by operating activities less organic capital expenditures (i.e., purchases of property and equipment other than those in business acquisitions).  We have included these disclosures in this press release because EBITDA, EBITDA Margins and Free Cash Flow are widely used by investors for valuation and comparing our financial performance with the performance of other companies in our industry, and the adjusted amounts thereof (as well as Adjusted Operating Income and Margin by Segment) provide more consistent measures than the unadjusted amounts.  Furthermore, our management uses these measures for purposes of evaluating our financial performance.  Our presentation of EBITDA, EBITDA Margins and Free Cash Flow (and the Adjusted amounts thereof) may not be comparable to similarly titled measures other companies report.  Non-GAAP financial measures should be viewed in addition to and not as substitutes for our reported operating results, cash flows or any other measure prepared and reported in accordance with GAAP.   The tables that follow provide reconciliations of the non-GAAP measures used in this press release to the most directly comparable GAAP measures.

 

RECONCILIATIONS OF NON-GAAP TO GAAP FINANCIAL INFORMATION
(continued)
Adjusted Net Income (Loss) and Diluted Earnings (Loss) per Share (EPS)
					For the Three Months Ended
					Jun 30, 2021								Jun 30, 2020								Mar 31, 2021
					Net Income (Loss)				Diluted EPS				Net Income (Loss)				Diluted EPS				Net Income (Loss)				Diluted EPS
					(in thousands, except per share amounts)
Net income (loss) and diluted EPS as reported in accordance with GAAP					$	6,241			$	0.06			$	(24,788)			$	(0.25)			$	(9,365)			$	(0.09)
Pre-tax adjustments for the effects of:
	Loss on sale of asset				1,415								—								—
	Restructuring expenses and other				—								5,708								1,308
	Foreign currency (gains) losses				1,800								3,908								1,861
Total pre-tax adjustments					3,215								9,616								3,169
Tax effect on pre-tax adjustments at the applicable jurisdictional statutory rate in effect for respective periods					(674)								(2,331)								(605)
Discrete tax items:
Share-based compensation					(4)								16								577
Uncertain tax positions					186								735								(16)
U.S. CARES Act					—								1,159								—
Valuation allowances					3,525								3,245								6,758
Other					(2,136)								(1,887)								2,275
	Total discrete tax adjustments				1,571								3,268								9,594
	Total of adjustments				4,112								10,553								12,158
Adjusted Net Income (Loss)					$	10,353			$	0.10			$	(14,235)			$	(0.14)			$	2,793			$	0.03
Weighted average diluted shares outstanding utilized for Adjusted Net Income (Loss)									100,847								99,273								100,480

 

Adjusted Net Income (Loss) and Diluted Earnings (Loss) per Share (EPS)
									For the Six Months Ended
									Jun 30, 2021								Jun 30, 2020
									Net Income (Loss)				Diluted EPS				Net Income (Loss)				Diluted EPS
									(in thousands, except per share amounts)
Net income (loss) and diluted EPS as reported in accordance with GAAP									$	(3,124)			$	(0.03)			$	(392,386)			$	(3.96)
Pre-tax adjustments for the effects of:
	Long-lived assets impairments								—								68,763
	Long-lived assets write-offs								—								7,328
	Goodwill impairment								—								303,005
	Loss on sale of asset								1,415								—
	Restructuring expenses and other								1,308								12,338
	Foreign currency (gains) losses								3,661								10,958
Total pre-tax adjustments									6,384								402,392
Tax effect on pre-tax adjustments at the applicable jurisdictional statutory rate in effect for respective periods									(1,279)								(47,686)
Discrete tax items:
Share-based compensation									573								1,003
Uncertain tax positions									170								(8,917)
U.S. CARES Act									—								(32,625)
Valuation allowances									10,283								68,453
Other									139								(937)
	Total discrete tax adjustments								11,165								26,977
	Total of adjustments								16,270								381,683
Adjusted Net Income (Loss)									$	13,146			$	0.13			$	(10,703)			$	(0.11)
Weighted average diluted shares outstanding utilized for Adjusted Net Income (Loss)													100,672								99,164

 

EBITDA and Adjusted EBITDA and Margins
					For the Three Months Ended												For the Six Months Ended
					Jun 30, 2021				Jun 30, 2020				Mar 31, 2021				Jun 30, 2021				Jun 30, 2020
					($ in thousands)
Net income (loss)					$	6,241			$	(24,788)			$	(9,365)			$	(3,124)			$	(392,386)
Depreciation and amortization					35,225				38,698				36,471				71,696				394,894
	Subtotal				41,466				13,910				27,106				68,572				2,508
Interest expense, net of interest income					9,046				11,100				9,888				18,934				22,285
Amortization included in interest expense					907				333				303				1,210				—
Provision (benefit) for income taxes					5,955				5,520				12,341				18,296				(24,755)
	EBITDA				57,374				30,863				49,638				107,012				38
Adjustments for the effects of:
	Long-lived assets impairments				—				—				—				—				68,763
	Loss on sale of asset				1,415				—				—				1,415				—
	Restructuring expenses and other				—				5,708				1,308				1,308				12,338
	Foreign currency (gains) losses				1,800				3,908				1,861				3,661				10,958
		Total of adjustments			3,215				9,616				3,169				6,384				92,059
	Adjusted EBITDA				$	60,589			$	40,479			$	52,807			$	113,396			$	92,097
Revenue					$	498,199			$	427,216			$	437,553			$	935,752			$	963,884
EBITDA margin %					12		%		7		%		11		%		11		%		—		%
Adjusted EBITDA margin %					12		%		9		%		12		%		12		%		10		%

 

Free Cash Flow
			For the Three Months Ended												For the Six Months Ended
			Jun 30, 2021				Jun 30, 2020				Mar 31, 2021				Jun 30, 2021				Jun 30, 2020
			(in thousands)
Net Income (loss)			$	6,241			$	(24,788)			$	(9,365)			$	(3,124)			$	(392,386)
Non-cash adjustments:
	Depreciation and amortization, including goodwill impairment		35,225				38,698				36,471				71,696				394,894
	Long-lived asset impairments		—				—				—				—				68,763
	Other non-cash		(1,294)				41				(365)				(1,659)				(4,585)
Other increases (decreases) in cash from operating activities			10,374				23,567				(28,464)				(18,090)				(61,318)
Cash flow provided by (used in) operating activities			50,546				37,518				(1,723)				48,823				5,368
Purchases of property and equipment			(12,629)				(10,631)				(10,699)				(23,328)				(37,860)
Free Cash Flow			$	37,917			$	26,887			$	(12,422)			$	25,495			$	(32,492)
2021 Adjusted EBITDA Estimates
															For the Three Months Ended
															September 30, 2021
															Low				High
															(in thousands)
Income (loss) before income taxes															$	4,000			$	7,000
Depreciation and amortization															36,000				38,000
	Subtotal														40,000				45,000
Interest expense, net of interest income															10,000				10,000
	Adjusted EBITDA														$	50,000			$	55,000
															For the Year Ended
															December 31, 2021
															Low				High
															(in thousands)
Income (loss) before income taxes															$	15,000			$	35,000
Depreciation and amortization															145,000				150,000
	Subtotal														160,000				185,000
Interest expense, net of interest income															40,000				40,000
	Adjusted EBITDA														$	200,000			$	225,000

 

Adjusted Operating Income (Loss) and Margins by Segment
				For the Three Months Ended June 30, 2021
				SSR				MP				OPG				IMDS				ADTech				Unallocated Expenses				Total
				($ in thousands)
Operating Income (Loss) as reported in accordance with GAAP				$	21,710			$	790			$	7,996			$	4,721			$	19,340			$	(31,738)			$	22,819
Adjustments for the effects of:
	Loss on sale of asset			—				—				—				—				—				1,415				1,415
		Total of adjustments		—				—				—				—				—				1,415				1,415
Adjusted Operating Income (Loss)				$	21,710			$	790			$	7,996			$	4,721			$	19,340			$	(30,323)			$	24,234
Revenue				$	141,371			$	79,127			$	107,951			$	64,070			$	105,680							$	498,199
Operating income (loss) % as reported in accordance with GAAP				15		%		1		%		7		%		7		%		18		%						5		%
Operating income (loss) % using adjusted amounts				15		%		1		%		7		%		7		%		18		%						5		%
				For the Three Months Ended June 30, 2020 *
				SSR				MP				OPG				IMDS				ADTech				Unallocated Expenses				Total
				($ in thousands)
Operating Income (Loss) as reported in accordance with GAAP				$	11,662			$	3,865			$	(4,135)			$	(1,825)			$	13,430			$	(28,179)			$	(5,182)
Adjustments for the effects of:
	Restructuring expenses and other			1,380				1,212				1,405				1,536				—				175				5,708
		Total of adjustments		1,380				1,212				1,405				1,536				—				175				5,708
Adjusted Operating Income (Loss)				$	13,042			$	5,077			$	(2,730)			$	(289)			$	13,430			$	(28,004)			$	526
Revenue				$	119,234			$	100,570			$	73,840			$	53,969			$	79,603							$	427,216
Operating income (loss) % as reported in accordance with GAAP				10		%		4		%		(6)		%		(3)		%		17		%						(1)		%
Operating income (loss) % using adjusted amounts				11		%		5		%		(4)		%		(1)		%		17		%						—		%
* Recast to reflect segment changes.
				For the Three Months Ended March 31, 2021
				SSR				MP				OPG				IMDS				ADTech				Unallocated Expenses				Total
				($ in thousands)
Operating Income (Loss) as reported in accordance with GAAP				$	14,619			$	2,753			$	8,813			$	2,474			$	16,839			$	(31,715)			$	13,783
Adjustments for the effects of:
	Restructuring expenses and other			395				537				149				217				10				—				1,308
		Total of adjustments		395				537				149				217				10				—				1,308
Adjusted Operating Income (Loss)				$	15,014			$	3,290			$	8,962			$	2,691			$	16,849			$	(31,715)			$	15,091
Revenue				$	119,119			$	86,825			$	89,234			$	54,048			$	88,327							$	437,553
Operating income (loss) % as reported in accordance with GAAP				12		%		3		%		10		%		5		%		19		%						3		%
Operating income (loss) % using adjusted amounts				13		%		4		%		10		%		5		%		19		%						3		%

 

Adjusted Operating Income (Loss) and Margins by Segment
				For the Six Months Ended June 30, 2021
				SSR				MP				OPG				IMDS				ADTech				Unallocated Expenses				Total
				($ in thousands)
Operating Income (Loss) as reported in accordance with GAAP				$	36,329			$	3,543			$	16,809			$	7,195			$	36,179			$	(63,453)			$	36,602
Adjustments for the effects of:
	Loss on sale of asset			—				—				—				—				—				1,415				1,415
	Restructuring expenses and other			395				537				149				217				10				—				1,308
		Total of adjustments		395				537				149				217				10				1,415				2,723
Adjusted Operating Income (Loss)				$	36,724			$	4,080			$	16,958			$	7,412			$	36,189			$	(62,038)			$	39,325
Revenue				$	260,490			$	165,952			$	197,185			$	118,118			$	194,007							$	935,752
Operating income (loss) % as reported in accordance with GAAP				14		%		2		%		9		%		6		%		19		%						4		%
Operating income (loss) % using adjusted amounts				14		%		2		%		9		%		6		%		19		%						4		%
				For the Six Months Ended June 30, 2020 *
				SSR				MP				OPG				IMDS				ADTech				Unallocated Expenses				Total
				($ in thousands)
Operating Income (Loss) as reported in accordance with GAAP				$	(82,421)			$	(62,273)			$	(83,458)			$	(123,360)			$	26,401			$	(60,828)			$	(385,939)
Adjustments for the effects of:
	Long-lived assets impairments			—				61,074				7,522				167				—				—				68,763
	Long-lived assets write-offs			7,328				—				—				—				—				—				7,328
	Goodwill impairment			102,118				11,388				66,285				123,214				—				—				303,005
	Restructuring expenses and other			2,299				3,196				2,621				3,767				—				455				12,338
		Total of adjustments		111,745				75,658				76,428				127,148				—				455				391,434
Adjusted Operating Income (Loss)				$	29,324			$	13,385			$	(7,030)			$	3,788			$	26,401			$	(60,373)			$	5,495
Revenue				$	259,004			$	267,104			$	148,094			$	118,698			$	170,984							$	963,884
Operating income (loss) % as reported in accordance with GAAP				(32)		%		(23)		%		(56)		%		(104)		%		15		%						(40)		%
Operating income (loss) % using adjusted amounts				11		%		5		%		(5)		%		3		%		15		%						1		%
* Recast to reflect segment changes.

 

EBITDA and Adjusted EBITDA and Margins by Segment
				For the Three Months Ended June 30, 2021
				SSR				MP				OPG				IMDS				ADTech				Unallocated Expenses and other				Total
				($ in thousands)
Operating Income (Loss) as reported in accordance with GAAP				$	21,710			$	790			$	7,996			$	4,721			$	19,340			$	(31,738)			$	22,819
Adjustments for the effects of:
	Depreciation and amortization			22,436				3,248				6,862				1,091				1,404				184				35,225
	Other pre-tax			—				—				—				—				—				(670)				(670)
	EBITDA			44,146				4,038				14,858				5,812				20,744				(32,224)				57,374
Adjustments for the effects of:
	Loss on sale of asset			—				—				—				—				—				1,415				1,415
	Foreign currency (gains) losses			—				—				—				—				—				1,800				1,800
		Total of adjustments		—				—				—				—				—				3,215				3,215
Adjusted EBITDA				$	44,146			$	4,038			$	14,858			$	5,812			$	20,744			$	(29,009)			$	60,589
Revenue				$	141,371			$	79,127			$	107,951			$	64,070			$	105,680							$	498,199
Operating income (loss) % as reported in accordance with GAAP				15		%		1		%		7		%		7		%		18		%						5		%
EBITDA Margin				31		%		5		%		14		%		9		%		20		%						12		%
Adjusted EBITDA Margin				31		%		5		%		14		%		9		%		20		%						12		%
				For the Three Months Ended June 30, 2020 *
				SSR				MP				OPG				IMDS				ADTech				Unallocated Expenses and other				Total
				($ in thousands)
Operating Income (Loss) as reported in accordance with GAAP				$	11,662			$	3,865			$	(4,135)			$	(1,825)			$	13,430			$	(28,179)			$	(5,182)
Adjustments for the effects of:
	Depreciation and amortization			25,080				3,587				8,255				757				658				361				38,698
	Other pre-tax			—				—				—				—				—				(2,653)				(2,653)
	EBITDA			36,742				7,452				4,120				(1,068)				14,088				(30,471)				30,863
Adjustments for the effects of:
	Restructuring expenses and other			1,380				1,212				1,405				1,536				—				175				5,708
	Foreign currency (gains) losses			—				—				—				—				—				3,908				3,908
		Total of adjustments		1,380				1,212				1,405				1,536				—				4,083				9,616
Adjusted EBITDA				$	38,122			$	8,664			$	5,525			$	468			$	14,088			$	(26,388)			$	40,479
Revenue				$	119,234			$	100,570			$	73,840			$	53,969			$	79,603							$	427,216
Operating income (loss) % as reported in accordance with GAAP				10		%		4		%		(6)		%		(3)		%		17		%						(1)		%
EBITDA Margin				31		%		7		%		6		%		(2)		%		18		%						7		%
Adjusted EBITDA Margin				32		%		9		%		7		%		1		%		18		%						9		%
* Recast to reflect segment changes.
				For the Three Months Ended March 31, 2021
				SSR				MP				OPG				IMDS				ADTech				Unallocated Expenses and other				Total
				($ in thousands)
Operating Income (Loss) as reported in accordance with GAAP				$	14,619			$	2,753			$	8,813			$	2,474			$	16,839			$	(31,715)			$	13,783
Adjustments for the effects of:
	Depreciation and amortization			22,952				3,227				7,125				1,124				1,276				767				36,471
	Other pre-tax			—				—				—				—				—				(616)				(616)
	EBITDA			37,571				5,980				15,938				3,598				18,115				(31,564)				49,638
Adjustments for the effects of:
	Restructuring expenses and other			395				537				149				217				10				—				1,308
	Foreign currency (gains) losses			—				—				—				—				—				1,861				1,861
		Total of adjustments		395				537				149				217				10				1,861				3,169
Adjusted EBITDA				$	37,966			$	6,517			$	16,087			$	3,815			$	18,125			$	(29,703)			$	52,807
Revenue				$	119,119			$	86,825			$	89,234			$	54,048			$	88,327							$	437,553
Operating income (loss) % as reported in accordance with GAAP				12		%		3		%		10		%		5		%		19		%						3		%
EBITDA Margin				32		%		7		%		18		%		7		%		21		%						11		%
Adjusted EBITDA Margin				32		%		8		%		18		%		7		%		21		%						12		%

 

EBITDA and Adjusted EBITDA and Margins by Segment
				For the Six Months Ended June 30, 2021
				SSR				MP				OPG				IMDS				ADTech				Unallocated Expenses and other				Total
				($ in thousands)
Operating Income (Loss) as reported in accordance with GAAP				$	36,329			$	3,543			$	16,809			$	7,195			$	36,179			$	(63,453)			$	36,602
Adjustments for the effects of:
	Depreciation and amortization			45,388				6,475				13,987				2,215				2,680				951				71,696
	Other pre-tax			—				—				—				—				—				(1,286)				(1,286)
	EBITDA			81,717				10,018				30,796				9,410				38,859				(63,788)				107,012
Adjustments for the effects of:
	Loss on sale of asset			—				—				—				—				—				1,415				1,415
	Restructuring expenses and other			395				537				149				217				10				—				1,308
	Foreign currency (gains) losses			—				—				—				—				—				3,661				3,661
		Total of adjustments		395				537				149				217				10				5,076				6,384
Adjusted EBITDA				$	82,112			$	10,555			$	30,945			$	9,627			$	38,869			$	(58,712)			$	113,396
Revenue				$	260,490			$	165,952			$	197,185			$	118,118			$	194,007							$	935,752
Operating income (loss) % as reported in accordance with GAAP				14		%		2		%		9		%		6		%		19		%						4		%
EBITDA Margin				31		%		6		%		16		%		8		%		20		%						11		%
Adjusted EBITDA Margin				32		%		6		%		16		%		8		%		20		%						12		%
				For the Six Months Ended June 30, 2020 *
				SSR				MP				OPG				IMDS				ADTech				Unallocated Expenses and other				Total
				($ in thousands)
Operating Income (Loss) as reported in accordance with GAAP				$	(82,421)			$	(62,273)			$	(83,458)			$	(123,360)			$	26,401			$	(60,828)			$	(385,939)
Adjustments for the effects of:
	Depreciation and amortization			164,267				19,551				83,162				125,100				1,345				1,469				394,894
	Other pre-tax			—				—				—				—				—				(8,917)				(8,917)
	EBITDA			81,846				(42,722)				(296)				1,740				27,746				(68,276)				38
Adjustments for the effects of:
	Long-lived assets impairments			—				61,074				7,522				167				—				—				68,763
	Restructuring expenses and other			2,299				3,196				2,621				3,767				—				455				12,338
	Foreign currency (gains) losses			—				—				—				—				—				10,958				10,958
		Total of adjustments		2,299				64,270				10,143				3,934				—				11,413				92,059
Adjusted EBITDA				$	84,145			$	21,548			$	9,847			$	5,674			$	27,746			$	(56,863)			$	92,097
Revenue				$	259,004			$	267,104			$	148,094			$	118,698			$	170,984							$	963,884
Operating income (loss) % as reported in accordance with GAAP				(32)		%		(23)		%		(56)		%		(104)		%		15		%						(40)		%
EBITDA Margin				32		%		(16)		%		—		%		1		%		16		%						—		%
Adjusted EBITDA Margin				32		%		8		%		7		%		5		%		16		%						10		%
* Recast to reflect segment changes.

 

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SOURCE Oceaneering International, Inc.