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Form 8-K OCEANEERING INTERNATIONA For: Apr 25

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April 25, 2016 5:13 PM EDT
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


Date of Report (Date of earliest event reported):                    April 25, 2016

OCEANEERING INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction
of incorporation)
1-10945
(Commission
File Number)
95-2628227
(IRS Employer
Identification No.)

11911 FM 529
Houston, TX
(Address of principal executive offices)

77041
(Zip Code)

Registrant's telephone number, including area code: (713) 329-4500
                                        
N/A
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


1

Item 2.02    Results of Operations and Financial Condition.

On April 25, 2016, we issued a press release announcing our earnings for the first quarter ended March 31, 2016. A copy of that press release is furnished as Exhibit 99.1 to this report and is incorporated by reference herein.

The information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and will not be incorporated by reference into any registration statement filed under the Securities Act of 1933, as amended, unless specifically identified therein as being incorporated therein by reference.



Item 8.01    Other Events.

On April 25, 2016, we also announced that our Board of Directors declared a quarterly dividend of $0.27 per common share. The dividend will be payable on June 17, 2016 to shareholders of record at the close of business on May 27, 2016. A copy of that press release is furnished as Exhibit 99.2 to this report and is incorporated by reference herein.



Item 9.01    Financial Statements and Exhibits.

The following are being furnished as exhibits to this report.
        
Exhibit 99.1
 
Press Release of Oceaneering International, Inc., dated April 25, 2016 regarding Item 2.02
Exhibit 99.2
 
Press Release of Oceaneering International, Inc., dated April 25, 2016 regarding Item 8.01
    
    

2



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


 
 
 
OCEANEERING INTERNATIONAL, INC.
 
 
 
 
Date:
April 25, 2016
By:
/S/ ROBERT P. MINGOIA
 
 
 
Robert P. Mingoia
 
 
 
Vice President and Treasurer






3




Exhibit Index

Exhibit No.
 
Description
 
 
 
Exhibit 99.1
 
Press Release of Oceaneering International, Inc., dated April 25, 2016 regarding Item 2.02
Exhibit 99.2
 
Press Release of Oceaneering International, Inc., dated April 25, 2016 regarding Item 8.01


4


Exhibit 99.1

Oceaneering Reports First Quarter 2016 Results

April 25, 2016 - Houston, Texas - Oceaneering International, Inc. ("Oceaneering" or "the Company") (NYSE: OII) today reported net income of $25.1 million, or $0.26 per share, on revenue of $608 million for the three months ended March 31, 2016. These results included $5.9 million of pretax foreign currency losses reported in other income and expenses. During the corresponding period in 2015, Oceaneering reported net income of $69.5 million, or $0.70 per share, on revenue of $787 million.

For the fourth quarter of 2015, Oceaneering reported net income of $27.5 million, or $0.28 per share, on revenue of $722 million. These results included the $45.9 million pre-tax impact of asset write-downs, provisions for certain reserves, restructuring expenses and foreign currency losses recognized during the quarter.

Summary of Results
(in thousands, except per share amounts)
 
 
Three Months Ended
 
 
March 31,
 
Dec 31,
 
 
 
 
 
2016
 
2015
 
2015
 
 
 
 
 
 
 
Revenue
 
$
608,344

 
$
786,772

 
$
722,066

Gross Margin
 
97,480

 
163,449

 
106,122

Income from Operations
 
48,099

 
106,650

 
45,756

Net Income
 
$
25,103

 
$
69,499

 
$
27,505

 
 
 
 
 
 
 
Diluted Earnings Per Share (EPS)
 
$0.26
 
$0.70
 
$0.28
 

Reflecting the impact lower oil prices have had on oilfield spending levels, revenues for the first quarter of 2016 were 23% lower than the corresponding period of 2015 and 16% lower than the immediately preceding quarter. Consequently, compared to the first quarter of 2015, quarterly earnings were down significantly as a result of lower demand and pricing for all our oilfield service and product lines. Sequentially, quarterly earnings declined due to a lower level of offshore activity, resulting from further weakening market conditions, seasonality, and higher unallocated expenses.

M. Kevin McEvoy, Oceaneering’s Chief Executive Officer, stated, "While our results for the first quarter reflect the challenging times we face in this low oil price market environment, we are pleased that each of our operating segments remained profitable, and our EBITDA margin of 17% held up relatively well when compared to others and our own full year 2015 EBITDA margin of 20%.

"Compared to the first quarter of last year, quarterly ROV operating income was down substantially on 33% lower revenue, resulting from 28% fewer days on hire and a 7% reduction in revenue per day on hire. Our fleet utilization decreased to 56% from 73% a year ago. During the quarter, we put four new ROVs into service and retired one. At the end of the quarter, we had 318 vehicles in our ROV fleet. Our drill support market share during this period was 57% of the 193 floating rigs under contract, compared to 58% a year ago. In spite of the current shrinking available market, we remain focused on maintaining our market share of ROVs on contracted rigs and high specification third party vessels.





"Subsea Products operating income decreased 19%, primarily due to reduced demand for tooling and installation and workover control systems. Our Subsea Products backlog at quarter-end was $576 million, down $76 million from December 2015. Subsea Products operating margin of 21% was flat compared to the first quarter of 2015 and was a function of executing backlog orders priced prior to the significant downturn in the industry. We expect margins to weaken throughout the year, as we process backlog that more closely reflects the current market environment.

"Subsea Projects operating income dropped mainly due to lower deepwater vessel demand and pricing, the drydock of the Ocean Alliance for regulatory inspection, and low demand for survey services. Asset Integrity operating income continued to fall on lower global demand and pricing for inspection services. Advanced Technologies operating income was lower, due to completing certain commercial programs and other theme park projects at low margins on previously disclosed execution and contracting issues.

"In spite of the challenging market environment, we continue to believe that our liquidity and cash generating capability enable Oceaneering to maintain market position and be ready for the inevitable market recovery."

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 and future expected business, financial performance and prospects of the Company. More specifically, the forward-looking statements in this press release include the statements concerning Oceaneering’s: statements about backlog, to the extent it may be an indicator of future revenue or profitability; expectation about Subsea Products’ margins; and belief that its liquidity and cash flow generating capability enable it to maintain market position and be ready for the inevitable market recovery. 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 backlog, costs, capital expenditures, future earnings, capital allocation strategies, dividend levels, sustainability of dividend levels, liquidity, competitive position, financial flexibility, debt levels, forecasts or expectations regarding business outlook; growth for Oceaneering as a whole and for each of its segments (and for specific products or geographic areas within each segment); factors affecting the level of activity in the oil and gas industry; supply and demand of drilling rigs; oil and natural gas demand and production growth; oil and natural gas prices; fluctuations in currency markets worldwide; the loss of major contracts or alliances; future global economic conditions; and future results of operations. For a more complete discussion of these risk factors, please see Oceaneering’s latest annual report on Form 10-K filed with the Securities and Exchange Commission.

We define EBITDA as net income plus provision for income taxes, interest expense, net, and depreciation and amortization. EBITDA is a non-GAAP financial measure. We have included EBITDA disclosures in this press release because EBITDA is widely used by investors for valuation and comparing our financial performance with the performance of other companies in our industry. Our presentation of EBITDA may not be comparable to similarly titled measures other companies report. Non-GAAP financial measures should be viewed in addition to and not as an alternative for our reported operating results or cash flow from operations or any other measure of performance as determined in accordance with GAAP. For a reconciliation of our EBITDA amounts to the most directly comparable GAAP financial measures, please see the attached schedule.

Oceaneering is a global 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, entertainment, and aerospace industries.

For more information on the Company, please visit Oceaneering's website at www.oceaneering.com.

Contact:
Suzanne Spera
Director, Investor Relations
Oceaneering International, Inc.
713-329-4707


- Tables follow on next page -





 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CONDENSED CONSOLIDATED BALANCE SHEETS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mar 31, 2016
 
Dec 31, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
(in thousands)
ASSETS
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current Assets (including cash and cash equivalents of $370,853 and $385,235)
 
 
 
 
 
 
 
$
1,426,495

 
$
1,517,493

 
Net Property and Equipment
 
 
 
 
 
 
 
1,238,139

 
1,266,731

 
Other Assets
 
 
 
 
 
 
 
699,539

 
645,312

 
 
 
TOTAL ASSETS
 
$
3,364,173

 
$
3,429,536

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
 
 
 
 
 
Current Liabilities
 
 
 
 
 
 
 
$
523,212

 
$
615,956

 
Long-term Debt
 
 
 
 
 
 
 
800,560

 
795,836

 
Other Long-term Liabilities
 
 
 
 
 
 
 
428,753

 
439,010

 
Shareholders' Equity
 
 
 
 
 
 
 
1,611,648

 
1,578,734

 
 
 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
 
$
3,364,173

 
$
3,429,536

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the Three Months Ended
 
 
 
 
 
 
 
 
 
 
 
Mar 31, 2016
 
Mar 31, 2015
 
Dec 31, 2015
 
 
 
 
 
 
 
 
 
 
 
(in thousands, except per share amounts)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
 
 
 
 
 
 
$
608,344

 
$
786,772

 
$
722,066

 
Cost of services and products
 
 
 
 
 
510,864

 
623,323

 
615,944

 
 
Gross Margin
 
 
 
 
 
 
 
 
97,480

 
163,449

 
106,122

 
Selling, general and administrative expense
 
 
 
49,381

 
56,799

 
60,366

 
 
Income from Operations
 
 
 
 
 
48,099

 
106,650

 
45,756

 
Interest income
 
 
 
 
 
 
 
295

 
156

 
171

 
Interest expense
 
 
 
 
 
 
 
(6,392
)
 
(6,088
)
 
(6,354
)
 
Equity earnings (losses) of unconsolidated affiliates
 
 
 
526

 
(255
)
 
917

 
Other income (expense), net
 
 
 
 
 
 
 
(5,988
)
 
700

 
(453
)
 
 
Income before Income Taxes
 
 
 
 
 
36,540

 
101,163

 
40,037

 
Provision for income taxes
 
 
 
 
 
11,437

 
31,664

 
12,532

 
 
Net Income
 
 
 
 
 
 
 
 
$
25,103

 
$
69,499

 
$
27,505

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average diluted shares outstanding
 
 
98,286

 
99,912

 
98,268

Diluted Earnings per Share
 
 
 
 
 
$
0.26

 
$
0.70

 
$
0.28

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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.




SEGMENT INFORMATION
 
 
 
 
 
 
For the Three Months Ended
 
 
 
 
 
 
Mar 31, 2016
 
Mar 31, 2015
 
Dec 31, 2015
 
 
 
 
 
 
($ in thousands)
 
 
 
 
 
 
 
Remotely Operated Vehicles
 
Revenue
 
 
$
147,621

 
$
219,447

 
$
173,424

 
Gross Margin
 
 
$
35,322

 
$
71,311

 
$
25,206

 
Operating Income
 
 
$
26,987

 
$
62,182

 
$
16,621

 
Operating Income %
 
 
18
%
 
28
%
 
10
 %
 
Days available
 
 
28,819

 
30,131

 
30,323

 
Days utilized
 
 
16,005

 
22,139

 
18,760

 
Utilization %
 
 
56
%
 
73
%
 
62
 %
 
 
 
 
 
 
 
 
 
 
 
Subsea Products
 
Revenue
 
 
$
194,812

 
$
240,729

 
$
258,889

 
Gross Margin
 
 
$
56,136

 
$
69,767

 
$
61,445

 
Operating Income
 
 
$
40,640

 
$
50,014

 
$
37,206

 
Operating Income %
 
 
21
%
 
21
%
 
14
 %
Backlog at end of period
 
 
$
576,000

 
$
788,000

 
$
652,000

 
 
 
 
 
 
 
 
 
 
 
Subsea Projects
 
Revenue
 
 
$
129,422

 
$
153,572

 
$
131,397

 
Gross Margin
 
 
$
11,509

 
$
26,900

 
$
15,953

 
Operating Income
 
 
$
6,789

 
$
22,276

 
$
10,310

 
Operating Income %
 
 
5
%
 
15
%
 
8
 %
 
 
 
 
 
 
 
 
 
 
 
Asset Integrity
 
 
Revenue
 
 
$
69,600

 
$
98,493

 
$
83,346

 
Gross Margin
 
 
$
7,343

 
$
12,799

 
$
7,784

 
Operating Income
 
 
$
434

 
$
5,025

 
$
85

 
Operating Income %
 
 
1
%
 
5
%
 
—
 %
 
 
 
 
 
 
 
 
 
 
 
Advanced Technologies
 
Revenue
 
 
$
66,889

 
$
74,531

 
$
75,010

 
Gross Margin
 
 
$
5,827

 
$
9,400

 
$
2,715

 
Operating Income
 
 
$
593

 
$
5,020

 
$
(3,233
)
 
Operating Income %
 
 
1
%
 
7
%
 
(4
)%
 
 
 
 
 
 
 
 
 
 
 
Unallocated Expenses
 
 
 
 
 
 
 
 
 
Gross margin expenses
 
 
$
(18,657
)
 
$
(26,728
)
 
$
(6,981
)
Operating income expenses
 
 
$
(27,344
)
 
$
(37,867
)
 
$
(15,233
)
 
 
 
 
 
 
 
 
 
TOTAL
 
 
Revenue
 
 
$
608,344

 
$
786,772

 
$
722,066

 
Gross Margin
 
 
$
97,480

 
$
163,449

 
$
106,122

 
Operating Income
 
 
$
48,099

 
$
106,650

 
$
45,756

 
Operating Income %
 
 
8
%
 
14
%
 
6
 %
 
 
 
 
 
 
 
 
 
 
 
SELECTED CASH FLOW INFORMATION
Capital expenditures, including acquisitions
 
 
$
21,206

 
$
49,412

 
$
54,801

Depreciation and Amortization
 
 
$
59,781

 
$
58,003

 
$
57,727

 
 
 
 
 
 
 
 
 
 
 





RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
 
 
 
 
 
Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the Three Months Ended
 
For the Year Ended
 
 
 
 
Mar 31, 2016
 
Mar 31, 2015
 
Dec 31, 2015
 
Dec 31, 2015
 
 
 
 
(in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Income
 
$
25,103

 
$
69,499

 
$
27,505

 
$
231,011

Depreciation and Amortization
 
59,781

 
58,003

 
57,727

 
241,235

 
 
 
Subtotal
84,884

 
127,502

 
85,232

 
472,246

Interest Expense, net of Interest Income
 
6,097

 
5,932

 
6,183

 
24,443

Amortization included in Interest Expense
 
(287
)
 
(266
)
 
(280
)
 
(1,077
)
Provision for Income Taxes
 
11,437

 
31,664

 
12,532

 
105,250

 
 
 
EBITDA
$
102,131

 
$
164,832

 
$
103,667

 
$
600,862

 
 
 
 
 
 
 
 
 
 
 
Revenue
 
$
608,344

 
$
786,772

 
$
722,066

 
$
3,062,754

 
 
 
 
 
 
 
 
 
 
 
EBITDA margin %
 
17
%
 
21
%
 
14
%
 
20
%
 
 
 
 
 
 
 
 
 
 
 





Exhibit 99.2




Oceaneering Declares Quarterly Dividend


April 25, 2016 - Houston, Texas - Oceaneering International, Inc. ("Oceaneering" or "the Company") (NYSE: OII) announced today that its Board of Directors declared a regular quarterly dividend of $0.27 per common share. The dividend is payable June 17, 2016 to shareholders of record at the close of business on May 27, 2016.

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, entertainment, and aerospace industries.

For more information on the Company, please visit Oceaneering's website at www.oceaneering.com.

Contact:
Suzanne Spera
Director, Investor Relations
Oceaneering International, Inc.
713-329-4707





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