Oceaneering Reports Third Quarter 2021 Results

Rhea-AI Summary

Oceaneering reported a net loss of $7.4 million for Q3 2021, down from a $6.2 million net income in Q2. Revenue declined to $467 million, influenced by Hurricane Ida and a tightening labor market, despite a rise in offshore activity. Adjusted net loss was $1.4 million. Key metrics for Q3 included EBITDA of $50.3 million and free cash flow of $24 million. Guidance for 2022 forecasts EBITDA between $225 million to $275 million, driven by growth in energy markets and government segments. Cash balance stood at $448 million, aiding debt management.

Positive

• Generated $24 million in free cash flow.
• Cash balance remained strong at $448 million.
• EBITDA guidance for 2022 is projected between $225 million and $275 million.
• Order intake increased, with backlog growing to $334 million.

Negative

• Reported a net loss of $7.4 million, compared to net income of $6.2 million in the previous quarter.
• Revenue decreased from $498 million in Q2 to $467 million in Q3 due to external disruptions.
• Operating income decreased in the Subsea Robotics segment despite slight revenue increase.
• Aerospace and Defense segment saw a 15% revenue decline.

HOUSTON, Oct. 27, 2021 /PRNewswire/ -- Oceaneering International, Inc. ("Oceaneering") (NYSE:OII) today reported a net loss of $7.4 million, or $(0.07) per share, on revenue of $467 million for the three months ended September 30, 2021.  Adjusted net loss was $1.4 million, or $(0.01) per share, reflecting the impact of $0.3 million of pre-tax adjustments associated with foreign exchange losses recognized during the quarter and $5.8 million of discrete tax adjustments, primarily due to changes in valuation allowances.

During the prior quarter ended June 30, 2021, Oceaneering reported net income of $6.2 million, or $0.06 per share, on revenue of $498 million.  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.

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												Nine Months Ended
		Sep 30,								Jun 30,				Sep 30,
		2021				2020				2021				2021				2020
Revenue		$	466,814			$	439,743			$	498,199			$	1,402,566			$	1,403,627
Gross Margin		59,848				29,651				68,397				184,902				118,940
Income (Loss) from Operations		15,769				(60,620)				22,819				52,371				(446,559)
Net Income (Loss)		(7,370)				(79,365)				6,241				(10,494)				(471,751)
Diluted Earnings (Loss) Per Share		$	(0.07)			$	(0.80)			$	0.06			$	(0.11)			$	(4.76)

For the third quarter of 2021:

• Consolidated EBITDA was $50.3 million
• Consolidated Operating Income was $15.8 million
• Cash flow generated from operations was $36.5 million
• Free cash flow was $24.0 million
• Cash position decreased by $8.4 million, from $456 million to $448 million
• An additional $32.5 million of our 2024 senior notes were repurchased through open-market transactions

Initial guidance for 2022:

• Consolidated EBITDA of $225 million to $275 million
• Free cash flow generation similar to 2021
• Increased growth capital expenditures as compared to 2021

Roderick A. Larson, President and Chief Executive Officer of Oceaneering, stated, "Our planning and preparation were instrumental in our team's ability to navigate through the challenges presented during the third quarter, which included hurricanes, inflation, a tightening labor market, and a constrained global supply chain.  Despite these challenges, we delivered third quarter 2021 EBITDA results consistent with our original guidance and continued to generate cash and pay down debt.  For the full year of 2021, we expect to generate adjusted EBITDA within the narrowed range of $210 million to $220 million.  I am encouraged by the positive market fundamentals supporting our traditional businesses as well as our increasing participation in emerging markets.

"During the third quarter of 2021, we produced consolidated EBITDA of $50.3 million, a decrease from the second quarter of 2021 but within the guidance range provided at the beginning of the quarter.  Offshore work in our energy-focused businesses remained seasonally active during the third quarter.  However, our operations in the Gulf of Mexico were muted by Hurricane Ida and high loop currents.  In general, each of our five segments performed as forecast at the beginning of the third quarter.

Segment Results:

"Sequentially, Subsea Robotics (SSR) revenue increased slightly, with good offshore activity levels as compared to the second quarter.  However, operating income declined, primarily due to lower margins for remotely operated vehicle (ROV) services attributed to changes in geographic mix and a special bonus that recognized technicians for enduring extended work rotations throughout 2021 due to COVID-19 challenges.  As a result, SSR adjusted EBITDA margin of 29% was slightly lower, as compared to the second quarter.

"Third quarter 2021 ROV days on hire were sequentially higher for both drill support and vessel-based services, as compared to the second quarter of 2021.  Fleet utilization rose slightly, averaging 63% for the quarter, as compared to 62% in the second quarter.  Our fleet use during the quarter was 57% in drill support and 43% in vessel-based activity, compared to 58% and 42%, respectively, during the second quarter.  Third quarter 2021 average ROV revenue per day on hire of $7,858 was 2% lower than in the second quarter of 2021.

"Sequentially, Manufactured Products (MP) third quarter 2021 operating income and operating income margin were essentially flat with the second quarter, despite marginally lower revenue.  Third quarter 2021 revenue of $75.4 million remained sub-optimal, which continued to challenge our ability to leverage the cost base of this business.  Order intake during the quarter was solid, with backlog on September 30, 2021 increasing to $334 million, compared to our June 30, 2021 backlog of $315 million.  Our book-to-bill ratio was 1.3 for the nine months ended September 30, 2021 and 1.0 for the trailing 12 months.

"As expected, the third quarter 2021 Offshore Projects Group (OPG) operating income was relatively flat, as compared to the second quarter of 2021, on an 11% decline in revenue.  Revenue benefited from good ongoing seasonal activity in inspection, maintenance and repair (IMR) work in the Gulf of Mexico, despite some work delays caused by Hurricane Ida and high loop currents.  The conclusion of field activities on several projects in Angola was the primary driver for the sequentially lower third quarter revenue.  Operating income margin improved from 7% in the second quarter of 2021 to 8% in the third quarter of 2021, primarily due to improved performance on the Angola riserless light well intervention project.

"Integrity Management and Digital Solutions (IMDS) sequential operating income was higher on relatively flat revenue.  Operating income margin improved to 9% in the third quarter of 2021, as efficiency improvements continue to show incremental benefits.

"Aerospace and Defense Technologies (ADTech) third quarter 2021 operating income declined from the second quarter of 2021 on a 15% decrease in revenue.  Operating income margin declined to 16%, as expected, due to a higher component of lower-margin manpower activities.  At the corporate level for the third quarter of 2021, Unallocated Expenses of $31.8 million were slightly higher as compared to the second quarter of 2021, but less than expected, primarily due to delayed spending on information technology infrastructure.

Fourth Quarter and Full Year Outlook:

"Looking forward on a consolidated basis, we believe that our fourth quarter 2021 EBITDA will be similar to our third quarter 2021 results on slightly higher revenue.  Sequentially, we forecast significantly higher revenue and operating profitability in our Manufactured Products segment, relatively flat activity and operating profitability in our SSR and IMDS segments, relatively flat revenue with lower operating profitability in our ADTech segment, and substantially lower seasonal activity and operating profitability in our OPG segment.  Unallocated Expenses are forecast to be in the mid-$30 million range, due primarily to increased spending on information technology infrastructure.

"For the full year of 2021, we expect to generate adjusted EBITDA within the narrowed range of $210 million to $220 million.  We are also narrowing our guidance for capital expenditures to be in the range of $45 million to $55 million.  Our guidance for cash tax payments remains in the range of $40 million to $45 million.  We continue to expect $28 million of CARES Act tax refunds, with $4.7 million of this amount received during the third quarter of 2021.  The timing of receipt of the remaining $23 million of these payments, whether in 2021 or 2022, remains uncertain.  Regardless of the timing of the CARES Act tax refunds, we continue to expect positive free cash flow generation for 2021 to be in excess of that generated in 2020.

Initial 2022 Guidance:

"Commodity prices appear supportive to continued gradual growth in offshore oil and gas markets over the short to medium term and we anticipate accelerating interest and growth in the offshore renewables market, including offshore wind, over the longer term.  We believe that our energy segments are positioned to benefit from the growth in both of these markets.  We also believe that our government-focused segment, ADTech, remains well positioned for continued steady growth in the aerospace and defense markets.

"Accordingly, looking into 2022, year over year, we are anticipating increased activity and improved operating performance across each of our operating segments, led by gains from SSR and OPG.  At this time, we forecast EBITDA in the range of $225 million to $275 million in 2022, serving as the catalyst for generating healthy levels of cash flow from operations.  In 2022, we expect capital expenditures to be higher than 2021, as we refocus our efforts on growth.  We also expect to generate positive free cash flow at levels similar to 2021.  We will provide more specific guidance on our expectations for 2022 during the year-end reporting process.

Cash, Liquidity and Growth:

"Over the past several years, we have put significant emphasis on maximizing our free cash flow to give us flexibility to address our 2024 debt maturity.  As of September 30, 2021, with a cash balance of $448 million and an outstanding balance of $437 million on our 2024 senior notes, we are well positioned to deal with this pending debt maturity.  While we will continue to be prudent with our capital spending, we are focused on developing and delivering technologies to grow our businesses in the key areas of energy transition, digital asset management, aerospace and defense, and mobile robotics, while also continuing to deploy technologies that help our customers produce hydrocarbons in the cleanest and safest manner.  We believe that the technologies we deliver today, and are focused on developing for the future, will provide us with ample opportunities to grow and transform our business over the coming years."

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: projected 2022 consolidated EBITDA, capital expenditures, and free cash flow generation; expected full year 2021 adjusted EBITDA range; characterization of demand or activity levels as seasonal; references to backlog, to the extent backlog may be an indicator of future revenue, profitability or cash flows; fourth quarter consolidated EBITDA and revenue; expected fourth quarter segment activity levels and operating profitability as compared to third quarter 2021; expected fourth quarter Unallocated Expenses; estimated full year 2021 capital expenditures range, cash tax payments, and CARES Act tax refunds; full year 2021 positive free cash flow; 2022 growth and impact of energy and government markets, and our capabilities in those markets; preparedness for pending debt maturity and capital spending; and technologies providing ample opportunities to grow and transform its business over the coming years.  

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
																					Sep 30, 2021				Dec 31, 2020
																					(in thousands)
ASSETS
	Current assets (including cash and cash equivalents of $447,725 and $452,016)																				$	1,185,135			$	1,170,263
	Net property and equipment																				510,728				591,107
	Other assets																				286,109				284,472
			Total Assets																		$	1,981,972			$	2,045,842
LIABILITIES AND EQUITY
	Current liabilities																				$	451,246			$	437,116
	Long-term debt																				739,980				805,251
	Other long-term liabilities																				241,649				245,318
	Equity																				549,097				558,157
			Total Liabilities and Equity																		$	1,981,972			$	2,045,842
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
									For the Three Months Ended												For the Nine Months Ended
									Sep 30, 2021				Sep 30, 2020				Jun 30, 2021				Sep 30, 2021				Sep 30, 2020
									(in thousands, except per share amounts)
	Revenue								$	466,814			$	439,743			$	498,199			$	1,402,566			$	1,403,627
	Cost of services and products								406,966				410,092				429,802				1,217,664				1,284,687
		Gross margin							59,848				29,651				68,397				184,902				118,940
	Selling, general and administrative expense								44,079				49,396				45,578				132,531				152,856
	Long-lived assets impairments								—				—				—				—				68,763
	Goodwill impairment								—				40,875				—				—				343,880
		Income (loss) from operations							15,769				(60,620)				22,819				52,371				(446,559)
	Interest income								662				414				683				1,864				2,202
	Interest expense, net of amounts capitalized								(9,616)				(9,250)				(9,729)				(29,752)				(33,323)
	Equity in income (losses) of unconsolidated affiliates								189				131				378				1,101				2,002
	Other income (expense), net								(814)				(2,836)				(1,955)				(4,222)				(13,624)
		Income (loss) before income taxes							6,190				(72,161)				12,196				21,362				(489,302)
	Provision (benefit) for income taxes								13,560				7,204				5,955				31,856				(17,551)
		Net Income (Loss)							$	(7,370)			$	(79,365)			$	6,241			$	(10,494)			$	(471,751)
Weighted average diluted shares outstanding									99,797				99,297				100,847				99,675				99,209
Diluted earnings (loss) per share									$	(0.07)			$	(0.80)			$	0.06			$	(0.11)			$	(4.76)
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 Nine Months Ended
						Sep 30, 2021				Sep 30, 2020				Jun 30, 2021				Sep 30, 2021				Sep 30, 2020
					($ in thousands)
Subsea Robotics
			Revenue			$	143,710			$	119,617			$	141,371			$	404,200			$	378,621
	Gross margin					$	28,918			$	13,378			$	31,767			$	84,763			$	54,175
Operating income (loss)						$	19,533			$	2,127			$	21,710			$	55,862			$	(80,294)
Operating income (loss) %						14		%		2		%		15		%		14		%		(21)		%
	ROV days available					23,002				23,000				22,750				68,221				68,500
	ROV days utilized					14,474				13,601				14,005				40,366				41,955
	ROV utilization					63		%		59		%		62		%		59		%		61		%
Manufactured Products
			Revenue			$	75,359			$	110,416			$	79,127			$	241,311			$	377,520
	Gross margin					$	8,544			$	11,242			$	8,391			$	26,939			$	42,870
Operating income (loss)						$	809			$	(38,198)			$	790			$	4,352			$	(100,471)
Operating income (loss) %						1		%		(35)		%		1		%		2		%		(27)		%
Backlog at end of period						$	334,000			$	318,000			$	315,000			$	334,000			$	318,000
Offshore Projects Group
			Revenue			$	95,580			$	73,212			$	107,951			$	292,765			$	221,306
	Gross margin					$	13,815			$	(1,633)			$	14,566			$	43,492			$	3,632
Operating income (loss)						$	7,634			$	(12,282)			$	7,996			$	24,443			$	(95,740)
Operating income (loss) %						8		%		(17)		%		7		%		8		%		(43)		%
Integrity Management & Digital Solutions
			Revenue			$	62,806			$	53,933			$	64,070			$	180,924			$	172,631
	Gross margin					$	11,330			$	7,129			$	10,462			$	30,001			$	22,376
Operating income (loss)						$	5,362			$	793			$	4,721			$	12,557			$	(122,567)
Operating income (loss) %						9		%		1		%		7		%		7		%		(71)		%
Aerospace and Defense Technologies
			Revenue			$	89,359			$	82,565			$	105,680			$	283,366			$	253,549
	Gross margin					$	20,019			$	16,668			$	24,603			$	66,732			$	51,466
Operating income (loss)						$	14,251			$	13,097			$	19,340			$	50,430			$	39,498
Operating income (loss) %						16		%		16		%		18		%		18		%		16		%
Unallocated Expenses
	Gross margin					$	(22,778)			$	(17,133)			$	(21,392)			$	(67,025)			$	(55,579)
Operating income (loss)						$	(31,820)			$	(26,157)			$	(31,738)			$	(95,273)			$	(86,985)
Total
			Revenue			$	466,814			$	439,743			$	498,199			$	1,402,566			$	1,403,627
	Gross margin					$	59,848			$	29,651			$	68,397			$	184,902			$	118,940
Operating income (loss)						$	15,769			$	(60,620)			$	22,819			$	52,371			$	(446,559)
Operating income (loss) %						3		%		(14)		%		5		%		4		%		(32)		%
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.

 

SELECTED CASH FLOW INFORMATION
						For the Three Months Ended												For the Nine Months Ended
						Sep 30, 2021				Sep 30, 2020				Jun 30, 2021				Sep 30, 2021				Sep 30, 2020
						(in thousands)
Capital Expenditures, including Acquisitions						$	12,488			$	7,980			$	12,629			$	35,816			$	45,840
Depreciation and amortization:
Energy Services and Products
	Subsea Robotics					$	21,483			$	25,144			$	22,436			$	66,871			$	189,411
	Manufactured Products					3,202				44,028				3,248				9,677				63,579
	Offshore Projects Group					6,781				15,147				6,862				20,768				98,309
	Integrity Management & Digital Solutions					1,114				866				1,091				3,329				125,966
Total Energy Services and Products						32,580				85,185				33,637				100,645				477,265
Aerospace and Defense Technologies						1,427				654				1,404				4,107				1,999
Unallocated Expenses						234				1,712				184				1,185				3,181
	Total Depreciation and Amortization					$	34,241			$	87,551			$	35,225			$	105,937			$	482,445
In the three and nine months ended September 30, 2020, goodwill and long-lived asset impairment expense, reflected in the depreciation and amortization expense above, was $48 million and $358 million, respectively.

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 and 2022 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.

Adjusted Net Income (Loss) and Diluted Earnings (Loss) per Share (EPS)
					For the Three Months Ended
					Sep 30, 2021								Sep 30, 2020								Jun 30, 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					$	(7,370)			$	(0.07)			$	(79,365)			$	(0.80)			$	6,241			$	0.06
Pre-tax adjustments for the effects of:
	Long-lived assets write-offs				—								7,243								—
	Inventory write-downs				—								7,038								—
	Goodwill impairment				—								40,875								—
	Loss on sale of asset				—								—								1,415
	Restructuring expenses and other				—								11,048								—
	Foreign currency (gains) losses				289								2,462								1,800
Total pre-tax adjustments					289								68,666								3,215
Tax effect on pre-tax adjustments at the applicable jurisdictional statutory rate in effect for respective periods					(152)								(13,211)								(674)
Discrete tax items:
Share-based compensation					(29)								16								(4)
Uncertain tax positions					(123)								(55)								186
Valuation allowances					5,898								6,599								3,525
Other					77								(278)								(2,136)
	Total discrete tax adjustments				5,823								6,282								1,571
	Total of adjustments				5,960								61,737								4,112
Adjusted Net Income (Loss)					$	(1,410)			$	(0.01)			$	(17,628)			$	(0.18)			$	10,353			$	0.10
Weighted average diluted shares outstanding utilized for Adjusted Net Income (Loss)									99,797								99,297								100,847

 

Adjusted Net Income (Loss) and Diluted Earnings (Loss) per Share (EPS)
									For the Nine Months Ended
									Sep 30, 2021								Sep 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									$	(10,494)			$	(0.11)			$	(471,751)			$	(4.76)
Pre-tax adjustments for the effects of:
	Long-lived assets impairments								—								68,763
	Long-lived assets write-offs								—								14,571
	Inventory write-downs								—								7,038
	Goodwill impairment								—								343,880
	Loss on sale of asset								1,415								—
	Restructuring expenses and other								1,308								23,386
	Foreign currency (gains) losses								3,950								13,420
Total pre-tax adjustments									6,673								471,058
Tax effect on pre-tax adjustments at the applicable jurisdictional statutory rate in effect for respective periods									(1,431)								(60,897)
Discrete tax items:
Share-based compensation									544								1,019
Uncertain tax positions									47								(8,972)
U.S. CARES Act									—								(32,625)
Valuation allowances									16,181								75,052
Other									216								(1,215)
	Total discrete tax adjustments								16,988								33,259
	Total of adjustments								22,230								443,420
Adjusted Net Income (Loss)									$	11,736			$	0.12			$	(28,331)			$	(0.29)
Weighted average diluted shares outstanding utilized for Adjusted Net Income (Loss)													100,790								99,209

 

EBITDA and Adjusted EBITDA and Margins
					For the Three Months Ended												For the Nine Months Ended
					Sep 30, 2021				Sep 30, 2020				Jun 30, 2021				Sep 30, 2021				Sep 30, 2020
					($ in thousands)
Net income (loss)					$	(7,370)			$	(79,365)			$	6,241			$	(10,494)			$	(471,751)
Depreciation and amortization					34,241				87,551				35,225				105,937				482,445
	Subtotal				26,871				8,186				41,466				95,443				10,694
Interest expense, net of interest income					8,954				8,836				9,046				27,888				31,121
Amortization included in interest expense					875				317				907				2,085				317
Provision (benefit) for income taxes					13,560				7,204				5,955				31,856				(17,551)
	EBITDA				50,260				24,543				57,374				157,272				24,581
Adjustments for the effects of:
	Long-lived assets impairments				—				—				—				—				68,763
	Inventory write-downs				—				7,038				—				—				7,038
	Loss on sale of asset				—				—				1,415				1,415				—
	Restructuring expenses and other				—				11,048				—				1,308				23,386
	Foreign currency (gains) losses				289				2,462				1,800				3,950				13,420
		Total of adjustments			289				20,548				3,215				6,673				112,607
	Adjusted EBITDA				$	50,549			$	45,091			$	60,589			$	163,945			$	137,188
Revenue					$	466,814			$	439,743			$	498,199			$	1,402,566			$	1,403,627
EBITDA margin %					11		%		6		%		12		%		11		%		2		%
Adjusted EBITDA margin %					11		%		10		%		12		%		12		%		10		%

 

Free Cash Flow
			For the Three Months Ended												For the Nine Months Ended
			Sep 30, 2021				Sep 30, 2020				Jun 30, 2021				Sep 30, 2021				Sep 30, 2020
			(in thousands)
Net Income (loss)			$	(7,370)			$	(79,365)			$	6,241			$	(10,494)			$	(471,751)
Non-cash adjustments:
	Depreciation and amortization, including goodwill impairment		34,241				87,551				35,225				105,937				482,445
	Long-lived asset impairments		—				—				—				—				68,763
	Other non-cash		5,641				9,423				(1,294)				3,982				4,838
Other increases (decreases) in cash from operating activities			3,984				9,386				10,374				(14,106)				(51,932)
Cash flow provided by (used in) operating activities			36,496				26,995				50,546				85,319				32,363
Purchases of property and equipment			(12,488)				(7,980)				(12,629)				(35,816)				(45,840)
Free Cash Flow			$	24,008			$	19,015			$	37,917			$	49,503			$	(13,477)
2021 and 2022 Adjusted EBITDA Estimates
															For the Three Months Ended
															December 31, 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															$	25,000			$	30,000
Depreciation and amortization															145,000				150,000
	Subtotal														170,000				180,000
Interest expense, net of interest income															40,000				40,000
	Adjusted EBITDA														$	210,000			$	220,000
															For the Year Ended
															December 31, 2022
															Low				High
															(in thousands)
Income (loss) before income taxes															$	60,000			$	110,000
Depreciation and amortization															125,000				125,000
	Subtotal														185,000				235,000
Interest expense, net of interest income															40,000				40,000
	Adjusted EBITDA														$	225,000			$	275,000

 

Adjusted Operating Income (Loss) and Margins by Segment
				For the Three Months Ended September 30, 2021
				SSR				MP				OPG				IMDS				ADTech				Unallocated Expenses				Total
				($ in thousands)
Operating Income (Loss) as reported in accordance with GAAP				$	19,533			$	809			$	7,634			$	5,362			$	14,251			$	(31,820)			$	15,769
Adjusted Operating Income (Loss)				$	19,533			$	809			$	7,634			$	5,362			$	14,251			$	(31,820)			$	15,769
Revenue				$	143,710			$	75,359			$	95,580			$	62,806			$	89,359							$	466,814
Operating income (loss) % as reported in accordance with GAAP				14		%		1		%		8		%		9		%		16		%						3		%
Operating income (loss) % using adjusted amounts				14		%		1		%		8		%		9		%		16		%						3		%
				For the Three Months Ended September 30, 2020
				SSR				MP				OPG				IMDS				ADTech				Unallocated Expenses				Total
				($ in thousands)
Operating Income (Loss) as reported in accordance with GAAP				$	2,127			$	(38,198)			$	(12,282)			$	793			$	13,097			$	(26,157)			$	(60,620)
Adjustments for the effects of:
	Long-lived assets write-offs			—				—				7,243				—				—				—				7,243
	Inventory write-downs			7,038				—				—				—				—				—				7,038
	Goodwill impairment			—				40,875				—				—				—				—				40,875
	Restructuring expenses and other			2,535				2,559				5,326				83				545				—				11,048
		Total of adjustments		9,573				43,434				12,569				83				545				—				66,204
Adjusted Operating Income (Loss)				$	11,700			$	5,236			$	287			$	876			$	13,642			$	(26,157)			$	5,584
Revenue				$	119,617			$	110,416			$	73,212			$	53,933			$	82,565							$	439,743
Operating income (loss) % as reported in accordance with GAAP				2		%		(35)		%		(17)		%		1		%		16		%						(14)		%
Operating income (loss) % using adjusted amounts				10		%		5		%		—		%		2		%		17		%						1		%

 

				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		%

 

Adjusted Operating Income (Loss) and Margins by Segment
				For the Nine Months Ended September 30, 2021
				SSR				MP				OPG				IMDS				ADTech				Unallocated Expenses				Total
				($ in thousands)
Operating Income (Loss) as reported in accordance with GAAP				$	55,862			$	4,352			$	24,443			$	12,557			$	50,430			$	(95,273)			$	52,371
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)				$	56,257			$	4,889			$	24,592			$	12,774			$	50,440			$	(93,858)			$	55,094
Revenue				$	404,200			$	241,311			$	292,765			$	180,924			$	283,366							$	1,402,566
Operating income (loss) % as reported in accordance with GAAP				14		%		2		%		8		%		7		%		18		%						4		%
Operating income (loss) % using adjusted amounts				14		%		2		%		8		%		7		%		18		%						4		%
				For the Nine Months Ended September 30, 2020
				SSR				MP				OPG				IMDS				ADTech				Unallocated Expenses				Total
				($ in thousands)
Operating Income (Loss) as reported in accordance with GAAP				$	(80,294)			$	(100,471)			$	(95,740)			$	(122,567)			$	39,498			$	(86,985)			$	(446,559)
Adjustments for the effects of:
	Long-lived assets impairments			—				61,074				7,522				167				—				—				68,763
	Long-lived assets write-offs			7,328				—				7,243				—				—				—				14,571
	Inventory write-downs			7,038				—				—				—				—				—				7,038
	Goodwill impairment			102,118				52,263				66,285				123,214				—				—				343,880
	Restructuring expenses and other			4,834				5,755				7,947				3,850				545				455				23,386
		Total of adjustments		121,318				119,092				88,997				127,231				545				455				457,638
Adjusted Operating Income (Loss)				$	41,024			$	18,621			$	(6,743)			$	4,664			$	40,043			$	(86,530)			$	11,079
Revenue				$	378,621			$	377,520			$	221,306			$	172,631			$	253,549							$	1,403,627
Operating income (loss) % as reported in accordance with GAAP				(21)		%		(27)		%		(43)		%		(71)		%		16		%						(32)		%
Operating income (loss) % using adjusted amounts				11		%		5		%		(3)		%		3		%		16		%						1		%

 

EBITDA and Adjusted EBITDA and Margins by Segment
				For the Three Months Ended September 30, 2021
				SSR				MP				OPG				IMDS				ADTech				Unallocated Expenses and other				Total
				($ in thousands)
Operating Income (Loss) as reported in accordance with GAAP				$	19,533			$	809			$	7,634			$	5,362			$	14,251			$	(31,820)			$	15,769
Adjustments for the effects of:
	Depreciation and amortization			21,483				3,202				6,781				1,114				1,427				234				34,241
	Other pre-tax			—				—				—				—				—				250				250
	EBITDA			41,016				4,011				14,415				6,476				15,678				(31,336)				50,260
Adjustments for the effects of:
	Foreign currency (gains) losses			—				—				—				—				—				289				289
		Total of adjustments		—				—				—				—				—				289				289
Adjusted EBITDA				$	41,016			$	4,011			$	14,415			$	6,476			$	15,678			$	(31,047)			$	50,549
Revenue				$	143,710			$	75,359			$	95,580			$	62,806			$	89,359							$	466,814
Operating income (loss) % as reported in accordance with GAAP				14		%		1		%		8		%		9		%		16		%						3		%
EBITDA Margin				29		%		5		%		15		%		10		%		18		%						11		%
Adjusted EBITDA Margin				29		%		5		%		15		%		10		%		18		%						11		%
				For the Three Months Ended September 30, 2020
				SSR				MP				OPG				IMDS				ADTech				Unallocated Expenses and other				Total
				($ in thousands)
Operating Income (Loss) as reported in accordance with GAAP				$	2,127			$	(38,198)			$	(12,282)			$	793			$	13,097			$	(26,157)			$	(60,620)
Adjustments for the effects of:
	Depreciation and amortization			25,144				44,028				15,147				866				654				1,712				87,551
	Other pre-tax			—				—				—				—				—				(2,388)				(2,388)
	EBITDA			27,271				5,830				2,865				1,659				13,751				(26,833)				24,543
Adjustments for the effects of:
	Inventory write-downs			7,038				—				—				—				—				—				7,038
	Restructuring expenses and other			2,535				2,559				5,326				83				545				—				11,048
	Foreign currency (gains) losses			—				—				—				—				—				2,462				2,462
		Total of adjustments		9,573				2,559				5,326				83				545				2,462				20,548
Adjusted EBITDA				$	36,844			$	8,389			$	8,191			$	1,742			$	14,296			$	(24,371)			$	45,091
Revenue				$	119,617			$	110,416			$	73,212			$	53,933			$	82,565							$	439,743
Operating income (loss) % as reported in accordance with GAAP				2		%		(35)		%		(17)		%		1		%		16		%						(14)		%
EBITDA Margin				23		%		5		%		4		%		3		%		17		%						6		%
Adjusted EBITDA Margin				31		%		8		%		11		%		3		%		17		%						10		%

 

				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		%

 

EBITDA and Adjusted EBITDA and Margins by Segment
				For the Nine Months Ended September 30, 2021
				SSR				MP				OPG				IMDS				ADTech				Unallocated Expenses and other					Total
				($ in thousands)
Operating Income (Loss) as reported in accordance with GAAP				$	55,862			$	4,352			$	24,443			$	12,557			$	50,430			$	(95,273)				$	52,371
Adjustments for the effects of:
	Depreciation and amortization			66,871				9,677				20,768				3,329				4,107				1,185					105,937
	Other pre-tax			—				—				—				—				—				(1,036)					(1,036)
	EBITDA			122,733				14,029				45,211				15,886				54,537				(95,124)					157,272
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			—				—				—				—				—				3,950					3,950
		Total of adjustments		395				537				149				217				10				5,365					6,673
Adjusted EBITDA				$	123,128			$	14,566			$	45,360			$	16,103			$	54,547			$	(89,759)				$	163,945
Revenue				$	404,200			$	241,311			$	292,765			$	180,924			$	283,366								$	1,402,566
Operating income (loss) % as reported in accordance with GAAP				14		%		2		%		8		%		7		%		18		%							4		%
EBITDA Margin				30		%		6		%		15		%		9		%		19		%							11		%
Adjusted EBITDA Margin				30		%		6		%		15		%		9		%		19		%							12		%
				For the Nine Months Ended September 30, 2020
				SSR				MP				OPG				IMDS				ADTech				Unallocated Expenses and other					Total
				($ in thousands)
Operating Income (Loss) as reported in accordance with GAAP				$	(80,294)			$	(100,471)			$	(95,740)			$	(122,567)			$	39,498			$	(86,985)				$	(446,559)
Adjustments for the effects of:
	Depreciation and amortization			189,411				63,579				98,309				125,966				1,999				3,181					482,445
	Other pre-tax			—				—				—				—				—				(11,305)					(11,305)
	EBITDA			109,117				(36,892)				2,569				3,399				41,497				(95,109)					24,581
Adjustments for the effects of:
	Long-lived assets impairments			—				61,074				7,522				167				—				—					68,763
	Inventory write-downs			7,038				—				—				—				—				—					7,038
	Restructuring expenses and other			4,834				5,755				7,947				3,850				545				455					23,386
	Foreign currency (gains) losses			—				—				—				—				—				13,420					13,420
		Total of adjustments		11,872				66,829				15,469				4,017				545				13,875					112,607
Adjusted EBITDA				$	120,989			$	29,937			$	18,038			$	7,416			$	42,042			$	(81,234)				$	137,188
Revenue				$	378,621			$	377,520			$	221,306			$	172,631			$	253,549								$	1,403,627
Operating income (loss) % as reported in accordance with GAAP				(21)		%		(27)		%		(43)		%		(71)		%		16		%							(32)		%
EBITDA Margin				29		%		(10)		%		1		%		2		%		16		%							2		%
Adjusted EBITDA Margin				32		%		8		%		8		%		4		%		17		%							10		%

 

View original content:https://www.prnewswire.com/news-releases/oceaneering-reports-third-quarter-2021-results-301410251.html

SOURCE Oceaneering International, Inc.

FAQ

What was Oceaneering's revenue for Q3 2021?

Oceaneering reported revenue of $467 million for Q3 2021.

How much free cash flow did Oceaneering generate in Q3 2021?

Oceaneering generated $24 million in free cash flow during Q3 2021.

What is Oceaneering's EBITDA guidance for 2022?

Oceaneering's EBITDA guidance for 2022 is projected between $225 million and $275 million.

Did Oceaneering incur a loss in Q3 2021?

Yes, Oceaneering reported a net loss of $7.4 million for Q3 2021.

What factors impacted Oceaneering's performance in Q3 2021?

Oceaneering's performance was affected by Hurricane Ida and a tightening labor market.