HOUSTON, Feb. 16, 2011 /PRNewswire/ -- Oceaneering International, Inc. today reported fourth quarter and record annual earnings for the periods ended December 31, 2010.
For the fourth quarter of 2010, on revenue of $501.3 million, Oceaneering generated net income of $47.8 million, or $0.88 per share. During the corresponding period in 2009, Oceaneering reported revenue of $452.3 million and net income of $46.1 million, or $0.83 per share. For the year 2010, Oceaneering reported net income of $200.5 million, or $3.65 per share, on revenue of $1.9 billion. Net income for 2009 was $188.4 million, or $3.40 per share, on revenue of $1.8 billion.
Summary of Results (in thousands, except per share amounts) Three Months Ended Year Ended Sept. December 31, 30, December 31, ------------ ------ ------------ 2010 2009 2010 2010 2009 ---- ---- ---- ---- ---- Revenue $501,298 $452,262 $516,274 $1,917,045 $1,822,081 Gross Margin 117,493 107,734 125,619 466,320 437,726 Operating Income 73,742 72,132 88,055 309,500 292,116 Net Income $47,794 $46,058 $59,177 $200,531 $188,353 Diluted Earnings Per Share $0.88 $0.83 $1.09 $3.65 $3.40
Annual net income increased from 2009 as a result of record segment operating income performances from Remotely Operated Vehicles (ROV), Subsea Products, and Advanced Technologies. Quarterly net income improved on the strength of higher Subsea Products operating income.
T. Jay Collins, President and Chief Executive Officer, stated, "Our annual earnings of over $200 million and EPS of $3.65 were the highest in Oceaneering's history. These were remarkable accomplishments as most oilfield service companies are reporting 2010 results substantially below their peak earnings levels. Our performance in this environment was largely attributable to our business focus on deepwater activity and our successful efforts to control expenses, which enabled us to maintain the 16% operating income margin we attained in 2009 and 2008.
"We achieved record ROV operating income for the seventh consecutive year, despite lower demand in the U.S. Gulf of Mexico (GOM) due to the U.S. Department of the Interior's drilling moratorium. Year over year, we earned more ROV operating income by slightly increasing our average revenue per day-on-hire while maintaining our operating margin through good cost controls in a tough market. During 2010 we put 22 new ROVs into service and retired 10. At year-end we had 260 vehicles in our fleet.
"Subsea Products operating income increased to a record level due to manufacturing process improvements and cost reductions, improved umbilical plant throughput, and higher demand for subsea field development hardware, ROV tooling rentals, and Installation, Workover, and Control System (IWOCS) services. Products backlog at the end of 2010 was $384 million, up $63 million from the end of 2009.
"Subsea Projects profit decreased in 2010 due to lower demand for our services on hurricane damage projects and our decision to exit the Mobile Offshore Production System business. Inspection results were similar to those of 2009. Advanced Technologies operating income improved to a record level due to increased work on entertainment industry contracts, U.S. Navy engineering services, and Department of Defense manufacturing projects.
"In 2010 we continued to take actions to position the company for future growth and increased earnings. Our capital expenditures were $207 million, of which $109 million was spent on growing and upgrading our ROV fleet. We also repaid $120 million of debt and repurchased 1.1 million shares of our common stock at a cost of approximately $50 million.
"Our balance sheet remained in great shape at year-end. We had $245 million of cash, no debt, $300 million available under our revolving credit facility, and $1.4 billion of equity.
"We are forecasting our 2011 EPS to be in the range of $3.45 to $3.75, with the possibility of another record year. For our services and products, we anticipate international demand growth may more than offset lower demand in the GOM. Our assessment is that deepwater drilling and field development and production activity will increase, particularly in West Africa and Asia. The major uncertainties we face in 2011 are when, at what pace, and to what level permits for GOM deepwater drilling projects will rebound in light of additional environmental and safety regulations that have been implemented by the U.S. Department of the Interior as a result of the Macondo well incident.
"Compared to 2010, we anticipate ROV operating income will be higher in 2011 as we benefit from an increase in international demand for drill support services and a larger fleet size. We forecast Subsea Products operating income will be about the same year over year, as increased throughput at our umbilical plants is offset by lower sales of IWOCS services in the GOM. We expect Subsea Projects operating income will be lower in 2011 due to the completion in 2010 of Macondo project work and a reduced level of subsea activity in the GOM. For the first quarter of 2011, we are forecasting EPS of $0.65 to $0.70.
"For 2011 we anticipate generating at least $435 million of EBITDA. Our balance sheet and projected cash flow provide us with ample resources to invest in Oceaneering's growth.
"Looking beyond 2011, our belief that the oil and gas industry will continue to invest in deepwater projects remains unchanged. Deepwater remains one of the best frontiers for adding large hydrocarbon reserves with high production flow rates. With our existing assets, we are well positioned to supply a wide range of the services and products required to support safe deepwater efforts of our customers."
Statements in this press release that express a belief, expectation, or intention are forward looking. The forward-looking statements in this press release include the statements concerning Oceaneering's: 2011 EPS guidance range of $3.45 to $3.75, with the possibility of another record year; anticipation that, for its services and products, international demand growth in 2011 may more than offset lower demand in the GOM; assessment that deepwater drilling and field development and production activity will increase, particularly in West Africa and Asia; anticipation that compared to 2010, its 2011 ROV operating income will be higher on an increase in international demand for drill support services and a larger fleet size; forecast that Subsea Products operating income will be about the same in 2011 as in 2010, as increased throughput at its umbilical plants is offset by lower sales of IWOCS services in the GOM; expectation that Subsea Projects operating income will be lower in 2011 due to the completion of Macondo project work in 2010 and a reduced level of subsea activity in the GOM; first quarter 2011 forecasted EPS range of $0.65 to $0.70; anticipation of generating, during 2011, at least $435 million of EBITDA; expectation that its balance sheet and projected cash flow will provide ample resources to invest in the company's growth; belief that the oil and gas industry will continue to invest in deepwater projects; and belief that deepwater remains one of the best frontiers for adding large hydrocarbon reserves with high production flow rates. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are based on current information and expectations of Oceaneering that involve a number of risks, uncertainties, and assumptions. Among the factors that could cause the actual results to differ materially from those indicated in the forward-looking statements are risks and uncertainties related to: industry conditions; prices of crude oil and natural gas; the timing, pace, and level of floating drilling rig activity in the U.S. Gulf of Mexico during 2011; Oceaneering's ability to obtain, and the timing of, new projects; changes in customers' operational plans or schedules; contract cancellations or modifications; difficulties executing under contracts; and changes in competitive factors. Should one or more of these risks or uncertainties materialize, or should the assumptions underlying the forward-looking statements prove incorrect, actual outcomes could vary materially from those indicated. For a more complete discussion of these and other risk factors, please see Oceaneering's annual report on Form 10-K for the year ended December 31, 2009 and subsequent quarterly reports on Form 10-Q filed with the Securities and Exchange Commission.
Oceaneering is a global oilfield provider of engineered services and products, primarily to the offshore oil and gas industry, with a focus on deepwater applications. Through the use of its applied technology expertise, Oceaneering also serves the defense and aerospace industries.
For further information, please contact Jack Jurkoshek, Director Investor Relations, Oceaneering International, Inc., 11911 FM 529, Houston, Texas 77041; Telephone 713-329-4670; Fax 713-329-4653; E-Mail investorrelations@oceaneering.com. A live webcast of the Company's earnings release conference call, scheduled for Thursday, February 17, 2011 at 11:00 a.m. Eastern, can be accessed at http://www.oceaneering.com/investor-relations/.
OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS Dec. 31, Dec. 31, 2010 2009 --------- --------- (in thousands) ASSETS Current Assets (including cash and cash equivalents of $245,219 and $162,351) $983,502 $874,139 Net Property and Equipment 786,373 766,361 Other Assets 260,631 239,787 ------- ------- TOTAL ASSETS $2,030,506 $1,880,287 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities $439,856 $388,547 Long-term Debt - 120,000 Other Long-term Liabilities 200,435 147,417 Shareholders' Equity 1,390,215 1,224,323 --------- --------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $2,030,506 $1,880,287 ========== ========== CONDENSED CONSOLIDATED STATEMENTS OF INCOME For the Three Months Ended -------------------------- Dec. 31, Dec. 31, Sept. 30, 2010 2009 2010 ---- ---- ---- (in thousands, except per share amounts) Revenue $501,298 $452,262 $516,274 Cost of services and products 383,805 344,528 390,655 ------- ------- ------- Gross Profit 117,493 107,734 125,619 Selling, general and administrative expense 43,751 35,602 37,564 ------ ------ ------ Income from Operations 73,742 72,132 88,055 Interest income 243 181 123 Interest expense (374) (1,478) (117) Equity earnings of unconsolidated affiliates, net 361 825 702 Other income (expense), net (1,171) (800) (280) ------ ---- ---- Income before Income Taxes 72,801 70,860 88,483 Provision for income taxes 25,007 24,802 29,306 ------ ------ ------ Net Income $47,794 $46,058 $59,177 ======= ======= ======= Net Income Attributable to Diluted Common Shares $47,643 $45,737 $58,988 Weighted Average Number of Diluted Common Shares 54,331 55,095 54,332 Diluted Earnings per Share $0.88 $0.83 $1.09 For the Year Ended ------------------ December 31, 2010 2009 ---- ---- (in thousands, except per share amounts) Revenue $1,917,045 $1,822,081 Cost of services and products 1,450,725 1,384,355 --------- --------- Gross Profit 466,320 437,726 Selling, general and administrative expense 156,820 145,610 ------- ------- Income from Operations 309,500 292,116 Interest income 580 694 Interest expense (6,010) (7,781) Equity earnings of unconsolidated affiliates, net 2,078 3,242 Other income (expense), net (926) 1,504 ---- ----- Income before Income Taxes 305,222 289,775 Provision for income taxes 104,691 101,422 ------- ------- Net Income $200,531 $188,353 ======== ======== Net Income Attributable to Diluted Common Shares $199,825 $187,035 Weighted Average Number of Diluted Common Shares 54,767 55,026 Diluted Earnings per Share $3.65 $3.40 The above Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Income should be read in conjunction with the Company's latest Annual Report on Form 10-K and Quarterly Report on Form 10-Q. SEGMENT INFORMATION For the Three Months Ended -------------------------- Dec. 31, Dec. 31, Sept. 30, 2010 2009 2010 ---- ---- ---- ($ in thousands) Remotely Operated Vehicles Revenue $171,754 $167,580 $164,727 Gross Profit $60,466 $63,293 $59,807 Operating income $48,938 $55,158 $51,514 Operating margin 28% 33% 31% Days available 23,517 22,724 23,084 Utilization 73% 78% 73% Subsea Products Revenue $152,747 $124,467 $160,194 Gross Profit $45,812 $28,331 $48,176 Operating income $31,787 $15,093 $35,247 Operating margin 21% 12% 22% Backlog $384,000 $321,000 $308,000 Subsea Projects Revenue $62,949 $53,694 $75,002 Gross Profit $14,882 $16,603 $19,367 Operating income $12,438 $15,081 $17,101 Operating margin 20% 28% 23% Inspection Revenue $57,420 $53,739 $57,330 Gross Profit $10,086 $8,853 $11,146 Operating income $5,796 $5,569 $7,504 Operating margin 10% 10% 13% Advanced Technologies Revenue $56,428 $52,782 $59,021 Gross Profit $6,438 $5,698 $6,837 Operating income $2,470 $1,988 $2,858 Operating margin 4% 4% 5% Unallocated Gross Expenses Profit $(20,191) $(15,044) $(19,714) Operating income $(27,687) $(20,757) $(26,169) TOTAL Revenue $501,298 $452,262 $516,274 Gross margin $117,493 $107,734 $125,619 Operating income $73,742 $72,132 $88,055 Operating margin 15% 16% 17% SELECTED CASH FLOW INFORMATION Capital expenditures, including acquisitions $42,929 $29,970 $69,377 Depreciation and amortization $39,468 $33,433 $41,051 For the Year Ended ------------------ Dec. 31, Dec. 31, 2010 2009 ---- ---- ($ in thousands) Remotely Operated Vehicles Revenue $662,105 $649,228 Gross Profit $247,619 $237,023 Operating income $211,725 $207,683 Operating margin 32% 32% Days available 91,667 86,527 Utilization 75% 79% Subsea Products Revenue $549,233 $487,726 Gross Profit $161,081 $115,056 Operating income $108,522 $60,526 Operating margin 20% 12% Backlog $384,000 $321,000 Subsea Projects Revenue $247,538 $274,607 Gross Profit $56,165 $84,657 Operating income $46,910 $75,404 Operating margin 19% 27% Inspection Revenue $223,469 $216,140 Gross Profit $41,698 $41,125 Operating income $25,893 $26,443 Operating margin 12% 12% Advanced Technologies Revenue $234,700 $194,380 Gross Profit $32,510 $25,128 Operating income $16,934 $12,366 Operating margin 7% 6% Gross Unallocated Expenses Profit $(72,753) $(65,263) Operating income $(100,484) $(90,306) TOTAL Revenue $1,917,045 $1,822,081 Gross margin $466,320 $437,726 Operating income $309,500 $292,116 Operating margin 16% 16% SELECTED CASH FLOW INFORMATION Capital expenditures, including acquisitions $207,180 $175,021 Depreciation and amortization $153,651 $122,945 The above should be read in conjunction with the Company's latest Annual Report on Form 10-K and Quarterly Report on Form 10-Q. RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION For the Three Months Ended Dec. 31, Dec. 31, Sept. 30, 2010 2009 2010 ---- ---- ---- (in thousands) Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) Net Income $47,794 $46,058 $59,177 Depreciation and Amortization 39,468 33,433 41,051 ------ ------ ------ Subtotal 87,262 79,491 100,228 Interest Income/ Expense, Net 131 1,297 (6) Provision for Income Taxes 25,007 24,802 29,306 ------ ------ ------ EBITDA $112,400 $105,590 $129,528 ======== ======== ======== 2011 Estimates -------------- Low High --- ---- (in thousands) Net Income $190,000 $205,000 Depreciation and Amortization 145,000 150,000 ------- ------- Subtotal 335,000 355,000 Interest Income/ Expense, Net 0 0 Provision for Income Taxes 100,000 110,000 ------- ------- EBITDA $435,000 $465,000 ======== ======== For the Year Ended ------------------ Dec. 31, Dec. 31, 2010 2009 ---- ---- (in thousands) Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) Net Income $200,531 $188,353 Depreciation and Amortization 153,651 122,945 ------- ------- Subtotal 354,182 311,298 Interest Income/ Expense, Net 5,430 7,087 Provision for Income Taxes 104,691 101,422 ------- ------- EBITDA $464,303 $419,807 ======== ========
Oceaneering International, Inc.
CONTACT: Jack Jurkoshek, Director Investor Relations of Oceaneering
International, Inc., +1-713-329-4670, or Fax, +1-713-329-4653,
investorrelations@oceaneering.com
Web Site: http://www.oceaneering.com/
