Oceaneering Reports Third Quarter 2022 Results

Rhea-AI Summary

Oceaneering International reported net income of $18.3 million and revenue of $560 million for Q3 2022, reflecting an increase from Q2's net income of $3.7 million. Adjusted EBITDA reached $77.6 million, exceeding forecasts. The company's ROV fleet utilization rose to 67% with an average revenue per day of $8,468. For 2023, Oceaneering expects EBITDA between $260 million and $310 million and projected positive free cash flow exceeding $100 million. Key operational improvements were noted in energy segments, particularly in the Gulf of Mexico.

Positive

• Q3 2022 net income increased to $18.3 million from $3.7 million in Q2 2022.
• Adjusted EBITDA of $77.6 million exceeded guidance and consensus estimates.
• Q3 2022 revenue rose to $560 million, up from $524 million in Q2 2022.
• ROV fleet utilization improved to 67%, with $8,468 average revenue per day on hire.
• For 2023, projected EBITDA is $260 million to $310 million, and free cash flow over $100 million.

Negative

• Adjusted net income impacted by $1.1 million in foreign exchange losses and $4.4 million in tax adjustments.
• Manufactured Products segment revenue decreased by 11% despite improved operating income.
• IMDS operating income declined due to delayed customer inspections.

HOUSTON--(BUSINESS WIRE)-- Oceaneering International, Inc. ("Oceaneering") (NYSE:OII) today reported net income of $18.3 million, or $0.18 per share, on revenue of $560 million for the three months ended September 30, 2022. Adjusted net income was $23.7 million, or $0.23 per share, reflecting the impact of $1.1 million of pre-tax adjustments associated with foreign exchange losses recognized during the quarter and $4.4 million of discrete tax adjustments, primarily due to changes in valuation allowances and uncertain tax positions.

During the prior quarter ended June 30, 2022, Oceaneering reported net income of $3.7 million, or $0.04 per share, on revenue of $524 million. Adjusted net income was $7.4 million, or $0.07 per share, reflecting the impact of $0.9 million of pre-tax adjustments associated with foreign exchange gains recognized during the quarter and $4.5 million of discrete tax adjustments, primarily due to changes in valuation allowances.

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, 2022 and 2023 Adjusted EBITDA and Free Cash Flow 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)
		For the Three Months Ended										For the Nine Months Ended
		Sep 30,							Jun 30,			Sep 30,
		2022			2021				2022			2022			2021
Revenue		$	559,671		$	466,814			$	524,031		$	1,529,861		$	1,402,566
Gross Margin			95,754			59,848				76,041			217,275			184,902
Income (Loss) from Operations			46,875			15,769				22,850			68,686			52,371
Net Income (Loss)			18,303			(7,370	)			3,720			2,813			(10,494	)
Diluted Earnings (Loss) Per Share		$	0.18		$	(0.07	)		$	0.04		$	0.03		$	(0.11	)

For the third quarter of 2022:

• Consolidated Adjusted EBITDA was $77.6 million;
• Consolidated Operating Income was $46.9 million;
• Cash flow provided by operating activities was $85.9 million and free cash flow was $66.6 million, with an ending cash position of $428 million; and
• Consolidated order intake was $700 million.

As of September 30, 2022:

• Remotely Operated Vehicles (ROV) fleet count was 250, Q3 utilization was 67%, and Q3 average revenue per day on hire was $8,468; and
• Manufactured Products backlog was $365 million.

Initial guidance for 2023:

• Consolidated EBITDA is expected in the range of $260 million to $310 million; and
• Free cash flow generation is expected to exceed $100 million.

Roderick A. Larson, President and Chief Executive Officer of Oceaneering, stated, "Our third quarter results were driven by improved offshore activity and pricing, particularly in the Gulf of Mexico (GoM), which ticked up further during the quarter. We produced adjusted consolidated EBITDA of $77.6 million, which exceeded our guidance and consensus estimates. Offshore activity drove significant operating improvements in our energy businesses, which were led by our Subsea Robotics (SSR) and Offshore Projects Group (OPG) segments. In addition, increased manufacturing throughput led to improved operating margins in our Manufactured Products segment. We also saw a meaningful recovery in our government-focused businesses after experiencing the effects of negative timing during the second quarter of 2022. For the full year of 2022, we expect our adjusted EBITDA within the narrowed range of $215 million to $240 million and continue to expect positive free cash flow in the range of $25 million to $75 million.

“The offshore recovery is clearly underway, and with increasing emphasis on both energy security and development of the cleanest, safest and most reliable energy sources, I expect positive market fundamentals to support our energy-focused businesses for years to come. In addition, with increasing competition for, and scarcity of, available labor, our mobile and subsea robotics businesses are experiencing heightened levels of interest as automation lowers on-site personnel requirements and enables remote supervisory control.

Segment Results:

“Sequentially, SSR revenue and operating income both increased as expected, with higher activity levels for ROV, survey and tooling services. SSR EBITDA margin of 31% improved over the second quarter of 2022 as new contract pricing and utilization efficiencies are increasingly being reflected in our results. As disclosed in our recent press release, we received strong SSR order intake of $300 million during the third quarter of 2022.

"Sequentially, third quarter 2022 ROV days on hire were 5% higher, with drill support days higher and vessel-based services days essentially flat. Our fleet use during the quarter was 60% in drill support and 40% in vessel-based activity, compared to 57% and 43%, respectively, during the second quarter. Fleet utilization rose to 67% for the quarter as compared to 64% during the second quarter. Third quarter 2022 average ROV revenue per day on hire of $8,468 was 2% higher than in the second quarter.

"Manufactured Products third quarter 2022 operating results improved despite an 11% decrease in revenue. Operating income and related margin percentage of $4.3 million and 5%, respectively, improved measurably from the second quarter of 2022 due primarily to increased manufacturing throughput in our subsea hardware businesses. Order intake during the quarter was solid, with backlog on September 30, 2022 increasing to $365 million from our June 30, 2022 backlog of $335 million. Our book-to-bill ratio was 1.17 for the nine months ended September 30, 2022, and 1.08 for the trailing 12 months.

"As expected, OPG saw strong seasonal activity during the third quarter of 2022, which resulted in higher operating income on a 31% increase in revenue as compared to the second quarter. Results were driven by increased intervention and installation work, primarily in the GoM. OPG’s operating income margin of 13% reflected slight changes in service mix and continued high levels of demand and pricing for vessel-based services in the GoM.

"Sequentially, Integrity Management and Digital Solutions (IMDS) operating income declined slightly on 2% less revenue. Revenue declined as customers, particularly in Europe, delayed inspection programs and kept facilities running to support energy security priorities. Operating income margin of 5% declined from the 6% recorded for the second quarter of 2022, due primarily to the continuing impacts of employee wage inflation.

"Aerospace and Defense Technologies (ADTech) third quarter 2022 operating income increased significantly from the second quarter on essentially flat revenue. Operating income margin of 15% improved significantly from the second quarter of 2022, reflecting recovery of prior quarter pre-contract costs and favorable project mix. At the corporate level, Unallocated Expenses of $30.9 million for the third quarter were less than expected, and slightly lower than the second quarter of 2022.

Fourth Quarter and Full Year Outlook:

"Looking forward, on a consolidated basis, we believe that our fourth quarter 2022 EBITDA will decline on relatively flat revenue as compared to our third quarter results. Sequentially, we forecast: higher revenue and operating profitability in our Manufactured Products segment; slightly lower revenue and operating results in our SSR segment; significantly lower revenue and operating profitability in our OPG segment due to lower seasonal activity; slightly lower revenue and operating results in our IMDS segment; and modestly higher revenue and lower operating results in our ADTech segment. Unallocated Expenses are forecast to be in the mid-$30 million range.

"For the full year of 2022, we expect to generate adjusted EBITDA within the narrowed range of $215 million to $240 million. Our guidance for organic capital expenditures remains in the range of $70 million to $80 million and our guidance for cash income tax payments remains in the range of $40 million to $45 million. We continue to expect positive free cash flow of between $25 million and $75 million for the full year of 2022.

Initial 2023 Guidance:

"Looking into 2023, 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 $260 million to $310 million in 2023, driving healthy levels of cash flow from operations. In 2023, we expect capital expenditures to be higher than in 2022 as we continue to focus on growth. We also expect to generate positive free cash flow in excess of $100 million. We will provide more specific guidance on our expectations for 2023 during the year-end reporting process.

Key Priorities:

"Our key priorities remain unchanged. Focusing on safety, maintaining our financial and capital discipline, generating significant free cash flow, managing our 2024 debt maturity, and growing the Company by leveraging core competencies remain our top priorities for the foreseeable future. Increasing our pricing and margins to generate a fair return for our world-class services and products is also a priority. Optimizing each of these priorities positions us for success in the energy transition while presenting increasing opportunities to provide returns to our shareholders."

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 FY 2023 guidance ranges for consolidated EBITDA, free cash flow and growth capital expenditures; beliefs regarding offshore recovery and market fundamentals; backlog, to the extent backlog may be an indicator of future revenue or profitability; forecasted direction of fourth quarter 2022 consolidated EBITDA and revenue, and segments revenue and operating results; forecasted range of fourth quarter 2022 Unallocated Expenses; forecasted FY 2022 guidance ranges for adjusted EBITDA, organic capital expenditures, cash income tax payments, and free cash flow ; anticipated sequentially comparative FY 2023 activity and operating performance across each operating segment, led by gains from SSR and OPG; anticipated outcomes from optimizing stated priorities; and, characterization of offshore demand, offshore recovery, offshore activity levels, market fundamentals, outlook, performance, results, opportunities, and financials as meaningful, increasing, seasonal, strong, supportive, robust, significant, substantial, good, or healthy.

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 technology company delivering engineered services and products and robotic solutions to the offshore energy, defense, aerospace, manufacturing, and entertainment industries.

For more information on Oceaneering, please visit www.oceaneering.com.

OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
													Sep 30, 2022				Dec 31, 2021
													(in thousands)
ASSETS
Current assets (including cash and cash equivalents of $427,507 and $538,114)													$	1,219,742			$	1,188,003
Net property and equipment														434,586				489,596
Other assets														268,504				285,260
Total Assets													$	1,922,832			$	1,962,859
LIABILITIES AND EQUITY
Current liabilities													$	515,725			$	501,161
Long-term debt														701,258				702,067
Other long-term liabilities														228,551				248,607
Equity														477,298				511,024
Total Liabilities and Equity													$	1,922,832			$	1,962,859
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
	For the Three Months Ended												For the Nine Months Ended
	Sep 30, 2022				Sep 30, 2021				Jun 30, 2022				Sep 30, 2022				Sep 30, 2021
	(in thousands, except per share amounts)
Revenue	$	559,671			$	466,814			$	524,031			$	1,529,861			$	1,402,566
Cost of services and products		463,917				406,966				447,990				1,312,586				1,217,664
Gross margin		95,754				59,848				76,041				217,275				184,902
Selling, general and administrative expense		48,879				44,079				53,191				148,589				132,531
Income (loss) from operations		46,875				15,769				22,850				68,686				52,371
Interest income		1,396				662				767				2,959				1,864
Interest expense		(9,552	)			(9,616	)			(9,619	)			(28,614	)			(29,752	)
Equity in income (losses) of unconsolidated affiliates		496				189				318				1,108				1,101
Other income (expense), net		(1,222	)			(814	)			583				(195	)			(4,222	)
Income (loss) before income taxes		37,993				6,190				14,899				43,944				21,362
Provision (benefit) for income taxes		19,690				13,560				11,179				41,131				31,856
Net Income (Loss)	$	18,303			$	(7,370	)		$	3,720			$	2,813			$	(10,494	)
Weighted average diluted shares outstanding		101,310				99,797				101,430				101,372				99,675
Diluted earnings (loss) per share	$	0.18			$	(0.07	)		$	0.04			$	0.03			$	(0.11	)
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, 2022				Sep 30, 2021				Jun 30, 2022				Sep 30, 2022				Sep 30, 2021
	($ in thousands)
Subsea Robotics
Revenue		$	169,422			$	143,710			$	157,123			$	454,534			$	404,200
Gross margin		$	47,552			$	28,918			$	37,004			$	106,514			$	84,763
Operating income (loss)		$	37,069			$	19,533			$	25,938			$	74,559			$	55,862
Operating income (loss) %			22	%			14	%			17	%			16	%			14	%
ROV days available			23,000				23,002				22,750				68,250				68,221
ROV days utilized			15,408				14,474				14,631				41,881				40,366
ROV utilization			67	%			63	%			64	%			61	%			59	%
Manufactured Products
Revenue		$	94,039			$	75,359			$	105,456			$	282,187			$	241,311
Gross margin		$	12,170			$	8,544			$	7,918			$	31,090			$	26,939
Operating income (loss)		$	4,282			$	809			$	(1,365	)		$	5,560			$	4,352
Operating income (loss) %			5	%			1	%			(1	)%			2	%			2	%
Backlog at end of period		$	365,000			$	334,000			$	335,000			$	365,000			$	334,000
Offshore Projects Group
Revenue		$	152,987			$	95,580			$	116,457			$	366,841			$	292,765
Gross margin		$	27,647			$	13,815			$	25,441			$	60,825			$	43,492
Operating income (loss)		$	20,310			$	7,634			$	17,535			$	38,511			$	24,443
Operating income (loss) %			13	%			8	%			15	%			10	%			8	%
Integrity Management & Digital Solutions
Revenue		$	58,465			$	62,806			$	59,438			$	174,473			$	180,924
Gross margin		$	8,371			$	11,330			$	9,222			$	26,792			$	30,001
Operating income (loss)		$	3,091			$	5,362			$	3,436			$	10,035			$	12,557
Operating income (loss) %			5	%			9	%			6	%			6	%			7	%
Aerospace and Defense Technologies
Revenue		$	84,758			$	89,359			$	85,557			$	251,826			$	283,366
Gross margin		$	19,431			$	20,019			$	15,744			$	52,045			$	66,732
Operating income (loss)		$	13,043			$	14,251			$	8,961			$	33,848			$	50,430
Operating income (loss) %			15	%			16	%			10	%			13	%			18	%
Unallocated Expenses
Gross margin		$	(19,417	)		$	(22,778	)		$	(19,288	)		$	(59,991	)		$	(67,025	)
Operating income (loss)		$	(30,920	)		$	(31,820	)		$	(31,655	)		$	(93,827	)		$	(95,273	)
Total
Revenue		$	559,671			$	466,814			$	524,031			$	1,529,861			$	1,402,566
Gross margin		$	95,754			$	59,848			$	76,041			$	217,275			$	184,902
Operating income (loss)		$	46,875			$	15,769			$	22,850			$	68,686			$	52,371
Operating income (loss) %			8	%			3	%			4	%			4	%			4	%
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, 2022			Sep 30, 2021			Jun 30, 2022			Sep 30, 2022			Sep 30, 2021
			(in thousands)
Capital Expenditures, including Acquisitions			$	19,280		$	12,488		$	16,495		$	55,094		$	35,816
Depreciation and Amortization:
Energy Services and Products
Subsea Robotics			$	16,013		$	21,483		$	17,531		$	52,545		$	66,871
Manufactured Products				2,939			3,202			3,020			9,031			9,677
Offshore Projects Group				7,132			6,781			7,107			21,536			20,768
Integrity Management & Digital Solutions				1,695			1,114			1,034			3,759			3,329
Total Energy Services and Products				27,779			32,580			28,692			86,871			100,645
Aerospace and Defense Technologies				671			1,427			821			2,148			4,107
Unallocated Expenses				1,799			234			1,347			4,109			1,185
Total Depreciation and Amortization			$	30,249		$	34,241		$	30,860		$	93,128		$	105,937

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, 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, 2022							Sep 30, 2021								Jun 30, 2022
		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		$	18,303			$	0.18		$	(7,370	)		$	(0.07	)		$	3,720			$	0.04
Pre-tax adjustments for the effects of:
Foreign currency (gains) losses			1,145							289								(928	)
Total pre-tax adjustments			1,145							289								(928	)
Tax effect on pre-tax adjustments at the applicable jurisdictional statutory rate in effect for respective periods			(174	)						(152	)							142
Discrete tax items:
Share-based compensation			—							(29	)							(3	)
Uncertain tax positions			1,813							(123	)							(593	)
Valuation allowances			452							5,898								3,419
Other			2,162							77								1,689
Total discrete tax adjustments			4,427							5,823								4,512
Total of adjustments			5,398							5,960								3,726
Adjusted Net Income (Loss)		$	23,701			$	0.23		$	(1,410	)		$	(0.01	)		$	7,446			$	0.07
Weighted average diluted shares outstanding utilized for Adjusted Net Income (Loss)							101,310							99,797								101,430

	For the Nine Months Ended
	Sep 30, 2022							Sep 30, 2021
	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	$	2,813			$	0.03		$	(10,494	)		$	(0.11	)
Pre-tax adjustments for the effects of:
Loss on sale of asset		—							1,415
Restructuring expenses and other		—							1,308
Foreign currency (gains) losses		(189	)						3,950
Total pre-tax adjustments		(189	)						6,673
Tax effect on pre-tax adjustments at the applicable jurisdictional statutory rate in effect for respective periods		58							(1,431	)
Discrete tax items:
Share-based compensation		137							544
Uncertain tax positions		588							47
Valuation allowances		18,798							16,181
Other		2,529							216
Total discrete tax adjustments		22,052							16,988
Total of adjustments		21,921							22,230
Adjusted Net Income (Loss)	$	24,734			$	0.24		$	11,736			$	0.12
Weighted average diluted shares outstanding utilized for Adjusted Net Income (Loss)						101,372							100,790

EBITDA and Adjusted EBITDA and Margins
		For the Three Months Ended												For the Nine Months Ended
		Sep 30, 2022				Sep 30, 2021				Jun 30, 2022				Sep 30, 2022				Sep 30, 2021
		($ in thousands)
Net income (loss)		$	18,303			$	(7,370	)		$	3,720			$	2,813			$	(10,494	)
Depreciation and amortization			30,249				34,241				30,860				93,128				105,937
Subtotal			48,552				26,871				34,580				95,941				95,443
Interest expense, net of interest income			8,156				8,954				8,852				25,655				27,888
Amortization included in interest expense			39				875				(166	)			73				2,085
Provision (benefit) for income taxes			19,690				13,560				11,179				41,131				31,856
EBITDA			76,437				50,260				54,445				162,800				157,272
Adjustments for the effects of:
Loss on sale of asset			—				—				—				—				1,415
Restructuring expenses and other			—				—				—				—				1,308
Foreign currency (gains) losses			1,145				289				(928	)			(189	)			3,950
Total of adjustments			1,145				289				(928	)			(189	)			6,673
Adjusted EBITDA		$	77,582			$	50,549			$	53,517			$	162,611			$	163,945
Revenue		$	559,671			$	466,814			$	524,031			$	1,529,861			$	1,402,566
EBITDA margin %			14	%			11	%			10	%			11	%			11	%
Adjusted EBITDA margin %			14	%			11	%			10	%			11	%			12	%

Free Cash Flow
		For the Three Months Ended												For the Nine Months Ended
		Sep 30, 2022				Sep 30, 2021				Jun 30, 2022				Sep 30, 2022				Sep 30, 2021
		(in thousands)
Net Income (loss)		$	18,303			$	(7,370	)		$	3,720			$	2,813			$	(10,494	)
Non-cash adjustments:
Depreciation and amortization			30,249				34,241				30,860				93,128				105,937
Other non-cash			4,171				5,641				788				5,551				3,982
Other increases (decreases) in cash from operating activities			33,176				3,984				(79,349	)			(140,075	)			(14,106	)
Cash flow provided by (used in) operating activities			85,899				36,496				(43,981	)			(38,583	)			85,319
Purchases of property and equipment			(19,280	)			(12,488	)			(16,495	)			(55,094	)			(35,816	)
Free Cash Flow		$	66,619			$	24,008			$	(60,476	)		$	(93,677	)		$	49,503
2022 Adjusted EBITDA Estimate
														For the Year Ending
														December 31, 2022
														Low				High
														(in thousands)
Income (loss) before income taxes														$	61,000			$	81,000
Depreciation and amortization															120,000				125,000
Subtotal															181,000				206,000
Interest expense, net of interest income															34,000				34,000
Adjusted EBITDA														$	215,000			$	240,000
2022 Free Cash Flow Estimate
														For the Year Ending
														December 31, 2022
														Low				High
														(in thousands)
Net income (loss)														$	20,000			$	30,000
Depreciation and amortization															120,000				125,000
Other increases (decreases) in cash from operating activities															(45,000	)			—
Cash flow provided by (used in) operating activities															95,000				155,000
Purchases of property and equipment															(70,000	)			(80,000	)
Free Cash Flow														$	25,000			$	75,000
2023 Adjusted EBITDA Estimate
														For the Year Ending
														December 31, 2023
														Low				High
														(in thousands)
Income (loss) before income taxes														$	105,000			$	155,000
Depreciation and amortization															120,000				120,000
Subtotal															225,000				275,000
Interest expense, net of interest income															35,000				35,000
Adjusted EBITDA														$	260,000			$	310,000
2023 Free Cash Flow Estimate
																		For the Year Ending
																		December 31, 2023
																		(in thousands)
Net income (loss)																		$	45,000
Depreciation and amortization																			120,000
Other increases (decreases) in cash from operating activities																			35,000
Cash flow provided by (used in) operating activities																			200,000
Purchases of property and equipment																			(100,000	)
Free Cash Flow																		$	100,000

Adjusted Operating Income (Loss) and Margins by Segment
		For the Three Months Ended September 30, 2022
		SSR				MP				OPG				IMDS				ADTech				Unallocated Expenses				Total
		($ in thousands)
Operating Income (Loss) as reported in accordance with GAAP		$	37,069			$	4,282			$	20,310			$	3,091			$	13,043			$	(30,920	)		$	46,875
Adjusted Operating Income (Loss)		$	37,069			$	4,282			$	20,310			$	3,091			$	13,043			$	(30,920	)		$	46,875
Revenue		$	169,422			$	94,039			$	152,987			$	58,465			$	84,758							$	559,671
Operating income (loss) % as reported in accordance with GAAP			22	%			5	%			13	%			5	%			15	%							8	%
Operating income (loss) % using adjusted amounts			22	%			5	%			13	%			5	%			15	%							8	%
		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 June 30, 2022
		SSR				MP				OPG				IMDS				ADTech				Unallocated Expenses				Total
		($ in thousands)
Operating Income (Loss) as reported in accordance with GAAP		$	25,938			$	(1,365	)		$	17,535			$	3,436			$	8,961			$	(31,655	)		$	22,850
Adjusted Operating Income (Loss)		$	25,938			$	(1,365	)		$	17,535			$	3,436			$	8,961			$	(31,655	)		$	22,850
Revenue		$	157,123			$	105,456			$	116,457			$	59,438			$	85,557							$	524,031
Operating income (loss) % as reported in accordance with GAAP			17	%			(1	)%			15	%			6	%			10	%							4	%
Operating income (loss) % using adjusted amounts			17	%			(1	)%			15	%			6	%			10	%							4	%

Adjusted Operating Income (Loss) and Margins by Segment
		For the Nine Months Ended September 30, 2022
		SSR				MP				OPG				IMDS				ADTech				Unallocated Expenses				Total
		($ in thousands)
Operating Income (Loss) as reported in accordance with GAAP		$	74,559			$	5,560			$	38,511			$	10,035			$	33,848			$	(93,827	)		$	68,686
Adjusted Operating Income (Loss)		$	74,559			$	5,560			$	38,511			$	10,035			$	33,848			$	(93,827	)		$	68,686
Revenue		$	454,534			$	282,187			$	366,841			$	174,473			$	251,826							$	1,529,861
Operating income (loss) % as reported in accordance with GAAP			16	%			2	%			10	%			6	%			13	%							4	%
Operating income (loss) % using adjusted amounts			16	%			2	%			10	%			6	%			13	%							4	%
		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	%

EBITDA and Adjusted EBITDA and Margins by Segment
		For the Three Months Ended September 30, 2022
		SSR				MP				OPG				IMDS				ADTech				Unallocated Expenses and other				Total
		($ in thousands)
Operating Income (Loss) as reported in accordance with GAAP		$	37,069			$	4,282			$	20,310			$	3,091			$	13,043			$	(30,920	)		$	46,875
Adjustments for the effects of:
Depreciation and amortization			16,013				2,939				7,132				1,695				671				1,799				30,249
Other pre-tax			—				—				—				—				—				(687	)			(687	)
EBITDA			53,082				7,221				27,442				4,786				13,714				(29,808	)			76,437
Adjustments for the effects of:
Foreign currency (gains) losses			—				—				—				—				—				1,145				1,145
Total of adjustments			—				—				—				—				—				1,145				1,145
Adjusted EBITDA		$	53,082			$	7,221			$	27,442			$	4,786			$	13,714			$	(28,663	)		$	77,582
Revenue		$	169,422			$	94,039			$	152,987			$	58,465			$	84,758							$	559,671
Operating income (loss) % as reported in accordance with GAAP			22	%			5	%			13	%			5	%			15	%							8	%
EBITDA Margin			31	%			8	%			18	%			8	%			16	%							14	%
Adjusted EBITDA Margin			31	%			8	%			18	%			8	%			16	%							14	%
		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 June 30, 2022
		SSR				MP				OPG				IMDS				ADTech				Unallocated Expenses and other				Total
		($ in thousands)
Operating Income (Loss) as reported in accordance with GAAP		$	25,938			$	(1,365	)		$	17,535			$	3,436			$	8,961			$	(31,655	)		$	22,850
Adjustments for the effects of:
Depreciation and amortization			17,531				3,020				7,107				1,034				821				1,347				30,860
Other pre-tax			—				—				—				—				—				735				735
EBITDA			43,469				1,655				24,642				4,470				9,782				(29,573	)			54,445
Adjustments for the effects of:
Foreign currency (gains) losses			—				—				—				—				—				(928	)			(928	)
Total of adjustments			—				—				—				—				—				(928	)			(928	)
Adjusted EBITDA		$	43,469			$	1,655			$	24,642			$	4,470			$	9,782			$	(30,501	)		$	53,517
Revenue		$	157,123			$	105,456			$	116,457			$	59,438			$	85,557							$	524,031
Operating income (loss) % as reported in accordance with GAAP			17	%			(1	)%			15	%			6	%			10	%							4	%
EBITDA Margin			28	%			2	%			21	%			8	%			11	%							10	%
Adjusted EBITDA Margin			28	%			2	%			21	%			8	%			11	%							10	%

EBITDA and Adjusted EBITDA and Margins by Segment
		For the Nine Months Ended September 30, 2022
		SSR				MP				OPG				IMDS				ADTech				Unallocated Expenses and other				Total
		($ in thousands)
Operating Income (Loss) as reported in accordance with GAAP		$	74,559			$	5,560			$	38,511			$	10,035			$	33,848			$	(93,827	)		$	68,686
Adjustments for the effects of:
Depreciation and amortization			52,545				9,031				21,536				3,759				2,148				4,109				93,128
Other pre-tax			—				—				—				—				—				986				986
EBITDA			127,104				14,591				60,047				13,794				35,996				(88,732	)			162,800
Adjustments for the effects of:
Foreign currency (gains) losses			—				—				—				—				—				(189	)			(189	)
Total of adjustments			—				—				—				—				—				(189	)			(189	)
Adjusted EBITDA		$	127,104			$	14,591			$	60,047			$	13,794			$	35,996			$	(88,921	)		$	162,611
Revenue		$	454,534			$	282,187			$	366,841			$	174,473			$	251,826							$	1,529,861
Operating income (loss) % as reported in accordance with GAAP			16	%			2	%			10	%			6	%			13	%							4	%
EBITDA Margin			28	%			5	%			16	%			8	%			14	%							11	%
Adjusted EBITDA Margin			28	%			5	%			16	%			8	%			14	%							11	%
		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	%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20221026005122/en/

Mark Peterson

Vice President, Corporate Development and Investor Relations

Oceaneering International, Inc.

713-329-4507

investorrelations@oceaneering.com

Source: Oceaneering International, Inc.

FAQ

What was Oceaneering's net income for Q3 2022?

Oceaneering reported a net income of $18.3 million for Q3 2022.

What is Oceaneering's revenue for Q3 2022?

Oceaneering's revenue for Q3 2022 was $560 million.

What is the expected EBITDA for Oceaneering in 2023?

Oceaneering anticipates EBITDA in the range of $260 million to $310 million for 2023.

How much free cash flow is Oceaneering expecting in 2023?

Oceaneering expects positive free cash flow to exceed $100 million in 2023.

What segments saw improvements in Oceaneering's Q3 2022 results?

Improvements were noted in Oceaneering's energy segments, particularly Subsea Robotics and Offshore Projects.