Oceaneering International (OII) 8-K Oceaneering Announces Third Quarter Earnings

Exhibit 99.1

Oceaneering Announces Third Quarter Earnings

-- Lowers 2015 Annual EPS Guidance Range to $2.60 to $2.66

-- Initiates Fourth Quarter 2015 EPS Guidance of $0.54 to $0.60

October 28, 2015 - Houston, Texas - Oceaneering International, Inc. (NYSE:OII) today reported earnings for the quarter ended September 30, 2015. On revenue of $743.6 million, Oceaneering generated net income of $68.5 million, or $0.70 per share. These results included $9.2million of pretax foreign currency losses, reported in other income and expenses.

Third quarter 2015 results compared to the corresponding period of 2014 and the second quarter of 2015 are shown in the table below.

Summary of Results

(in thousands, except per share amounts)

	Three Months Ended						Nine Months Ended
	September 30,				June 30,		September 30,
	2015		2014		2015		2015		2014
Revenue	$	743,613	$	973,089	$	810,303	$	2,340,688	$	2,740,697
Gross Margin	168,313		241,855		167,545		499,307		649,561
Income from Operations	113,464		181,918		107,940		328,054		476,091
Net Income	$	68,539	$	124,338	$	65,468	$	203,506	$	325,858
Diluted Earnings Per Share (EPS)	$0.70		$1.16		$0.66		$2.06		$3.01

Sequentially, quarterly earnings increased on lower Unallocated Expenses due to reductions in performance-based incentive and deferred compensation expenses. Year over year, quarterly earnings decreased on significantly lower demand and pricing for most of Oceaneering’s oilfield services and products. This was attributable to reductions in oil and gas industry capital and operating expenditures resulting from the steep decline in oil prices.

M. Kevin McEvoy, Chief Executive Officer, stated, “Our EPS for the quarter was within our guidance range, but was not achieved in the manner we initially anticipated. Compared to our earlier expectations, we experienced demand declines for tooling and Installation Workover and Control System services, as customer projects were either postponed or did not materialize. Furthermore, contract renewals for floating rigs on which we provide Remotely Operated Vehicle (ROV) drill support services were weaker than forecast. The unfavorable impacts of these market developments were more than offset by better results from Subsea Projects and lower Unallocated Expenses.

- 1 -

“Subsea Projects exceeded our expectations for the third quarter due to higher U.S. Gulf of Mexico (GOM) vessel utilization, which included completion of certain projects originally scheduled for the fourth quarter. Unallocated Expenses were lower as performance-based compensation expenses were reduced based on our current projections of results relative to the respective plan targets. In addition, during the quarter, we incurred substantial foreign currency losses, which our guidance did not consider.

“Compared to the second quarter, ROV operating income decreased on a 6% decline in average revenue per day on hire and lower global demand to support drilling. Our fleet utilization rate fell to 68% and operating income margin dropped to 26%. During the quarter we put five new vehicles into service and retired four. At the end of September, we had 337 vehicles in our fleet, compared to 332 one year ago.

“Subsea Products operating income was higher despite a decline in revenue, as the second quarter included an inventory write-down of $9.0 million. Products backlog at quarter-end was $736 million, compared to our June 30 backlog of $703 million and $768 million one year ago. Our products book-to-bill ratio for the third quarter was 1.15, year to date it was 1.07, and for the trailing twelve months it was 0.97.

“Sequentially, Subsea Projects operating income decreased largely due to declining demand and pricing for deepwater intervention services in the GOM and offshore Angola, and diving services in the GOM. Asset Integrity income improved due to a change in service mix and actions we took to lower operating costs, primarily a reduction in manning. Advanced Technologies operating income declined due to execution issues on certain theme park projects.

“We generated EBITDA of $168 million during the quarter, $497 million year to date, and for 2015 we anticipate generating at least $640 million. At the end of the quarter, we had $271 million in cash and an undrawn $500 million revolver.

“Our outlook for the fourth quarter of this year is down from what we envisioned at the time of our last quarterly earnings release. We now expect to report fourth quarter EPS in the range of $0.54 to $0.60. We are expecting sequential quarterly operating income declines from ROV, Subsea Projects, and Asset Integrity, a profit improvement from Advanced Technologies, lower Unallocated Expenses, and a similar profit contribution from Subsea Products. Given this outlook and our year-to-date performance, we are reducing our 2015 EPS guidance to a range of $2.60 to $2.66 from $2.70 to $2.90, down 6% at the midpoints.

“Based on the current number of floating rigs working and expectations for further reductions in offshore activities due to continued spending cuts by our customers, we believe our 2016 earnings will be lower than our projection for 2015. We are not, however, prepared to quantify the magnitude of the decline at this time.

- 2 -

“We continue to take actions to reduce our operating expenses and organic capital expenditures, and believe our cash flow and liquidity position us well to manage our business through the current low commodity price environment. Longer term, deepwater is still expected to continue to play a critical role in global oil supply growth required to replace depletion and meet projected demand. Consequently, we intend to continue our strategy to expand our service and product line offerings, as evidenced by our recent investments in survey and satellite-based positioning, data solutions, and subsea asset integrity.”

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: fourth quarter 2015 EPS guidance range; 2015 EPS guidance range; statements about backlog, to the extent it may be an indicator of future revenue or profitability; anticipated minimum 2015 EBITDA; outlook for the fourth quarter of 2015; anticipated sequential quarterly operating income expectations from each of its business segments, and from Unallocated Expenses; expectation for further reductions in offshore activities due to continued spending cuts by its customers; expected 2016 earnings relative to projected 2015 earnings; belief that its cash flow and liquidity position it to manage its business through the current low commodity price environment; expectation of deepwater’s continued role in global oil supply growth; and intent to continue its strategy to expand its service and product line offerings. 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. 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 risk factors, please see Oceaneering’s latest annual report on Form 10-K and quarterly reports on Form 10-Q 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 further information, please contact Jack Jurkoshek, Director Investor Relations, Oceaneering International, Inc., 713-329-4670, investorrelations@oceaneering.com. A live webcast of the company’s earnings conference call, scheduled for Thursday, October 29, 2015 at 11:00 a.m. Eastern, can be accessed at www.oceaneering.com/investor-relations/.

PR 1241

- Tables follow on next page -

- 3 -

OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
													Sep 30, 2015			Dec 31, 2014
													(in thousands)
ASSETS
	Current Assets (including cash and cash equivalents of $271,155 and $430,714)												$	1,510,430		$	1,713,550
	Net Property and Equipment												1,272,634			1,305,822
	Other Assets												637,566			485,568
			TOTAL ASSETS										$	3,420,630		$	3,504,940
LIABILITIES AND SHAREHOLDERS' EQUITY
	Current Liabilities												$	623,827		$	679,137
	Long-term Debt												797,495			743,469
	Other Long-term Liabilities												410,392			424,863
	Shareholders' Equity												1,588,916			1,657,471
			TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY										$	3,420,630		$	3,504,940
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
				For the Three Months Ended									For the Nine Months Ended
				Sep 30, 2015			Sep 30, 2014			Jun 30, 2015			Sep 30, 2015			Sep 30, 2014
				(in thousands, except per share amounts)
	Revenue			$	743,613		$	973,089		$	810,303		$	2,340,688		$	2,740,697
	Cost of services and products			575,300			731,234			642,758			1,841,381			2,091,136
		Gross Margin		168,313			241,855			167,545			499,307			649,561
	Selling, general and administrative expense			54,849			59,937			59,605			171,253			173,470
		Income from Operations		113,464			181,918			107,940			328,054			476,091
	Interest income			229			130			51			436			250
	Interest expense			(6,396		)	(677		)	(6,212		)	(18,696		)	(1,486		)
	Equity earnings (losses) of unconsolidated affiliates			1,567			9			1			1,313			(19		)
	Other income (expense), net			(9,099		)	(392		)	(6,484		)	(14,883		)	(515		)
		Income before Income Taxes		99,765			180,988			95,296			296,224			474,321
	Provision for income taxes			31,226			56,650			29,828			92,718			148,463
		Net Income		$	68,539		$	124,338		$	65,468		$	203,506		$	325,858
Weighted average diluted shares outstanding				98,185			107,407			98,893			98,991			108,180
Diluted Earnings per Share				$	0.70		$	1.16		$	0.66		$	2.06		$	3.01
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									For the Nine Months Ended
			Sep 30, 2015			Sep 30, 2014			Jun 30, 2015			Sep 30, 2015			Sep 30, 2014
			($ in thousands)
Remotely Operated Vehicles		Revenue	$	198,426		$	285,385		$	216,426		$	634,299		$	809,478
	Gross Margin		$	60,681		$	98,511		$	70,132		$	202,124		$	272,386
	Operating Income		$	52,417		$	88,350		$	61,294		$	175,893		$	240,915
	Operating Income %		26		%	31		%	28		%	28		%	30		%
	Days available		31,025			30,103			30,465			91,621			87,013
	Days utilized		21,229			25,247			21,710			65,078			73,626
	Utilization %		68		%	84		%	71		%	71		%	85		%
Subsea Products		Revenue	$	220,039		$	336,745		$	240,057		$	700,825		$	924,007
	Gross Margin		$	64,078		$	105,406		$	62,465		$	196,310		$	280,093
	Operating Income		$	46,079		$	83,430		$	42,286		$	138,379		$	217,443
	Operating Income %		21		%	25		%	18		%	20		%	24		%
Backlog at end of period			$	736,000		$	768,000		$	703,000		$	736,000		$	768,000
Subsea Projects		Revenue	$	147,191		$	151,560		$	172,324		$	473,087		$	425,949
	Gross Margin		$	34,830		$	31,749		$	36,989		$	98,719		$	86,280
	Operating Income		$	28,841		$	27,339		$	30,607		$	81,724		$	73,739
	Operating Income %		20		%	18		%	18		%	17		%	17		%
Asset Integrity		Revenue	$	95,609		$	134,734		$	95,509		$	289,611		$	389,122
	Gross Margin		$	15,009		$	27,687		$	11,750		$	39,558		$	72,760
	Operating Income		$	8,549		$	19,583		$	4,576		$	18,150		$	49,583
	Operating Income %		9		%	15		%	5		%	6		%	13		%
Advanced Technologies		Revenue	$	82,348		$	64,665		$	85,987		$	242,866		$	192,141
	Gross Margin		$	6,974		$	7,439		$	10,945		$	27,319		$	20,763
	Operating Income		$	1,635		$	2,863		$	6,267		$	12,922		$	6,016
	Operating Income %		2		%	4		%	7		%	5		%	3		%
Unallocated Expenses
Gross margin expenses			$	(13,259	)	$	(28,937	)	$	(24,736	)	$	(64,723	)	$	(82,721	)
Operating income expenses			$	(24,057	)	$	(39,647	)	$	(37,090	)	$	(99,014	)	$	(111,605	)
TOTAL		Revenue	$	743,613		$	973,089		$	810,303		$	2,340,688		$	2,740,697
	Gross Margin		$	168,313		$	241,855		$	167,545		$	499,307		$	649,561
	Operating Income		$	113,464		$	181,918		$	107,940		$	328,054		$	476,091
	Operating Income %		15		%	19		%	13		%	14		%	17		%
SELECTED CASH FLOW INFORMATION
Capital expenditures, including acquisitions			$	44,428		$	79,788		$	275,347		$	369,187		$	341,276
Depreciation and Amortization			$	62,022		$	59,621		$	63,483		$	183,508		$	169,029

	RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
	Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)
		For the Three Months Ended								For the Nine Months Ended
		Sep 30, 2015			Sep 30, 2014		Jun 30, 2015			Sep 30, 2015			Sep 30, 2014
		(in thousands)
Net Income		$	68,539		$	124,338	$	65,468		$	203,506		$	325,858
Depreciation and Amortization		62,022			59,621		63,483			183,508			169,029
	Subtotal	130,561			183,959		128,951			387,014			494,887
Interest Expense, net of Interest Income		6,167			547		6,161			18,260			1,236
Amortization included in Interest Expense		(266		)	—		(265		)	(797		)	—
Provision for Income Taxes		31,226			56,650		29,828			92,718			148,463
	EBITDA	$	167,688		$	241,156	$	164,675		$	497,195		$	644,586
		2015 Estimates
		Low			High
		(in thousands)
Net Income		$	255,000		$	265,000
Depreciation and Amortization		245,000			250,000
	Subtotal	500,000			515,000
Interest Expense, net of Interest Income		25,000			25,000
Provision for Income Taxes		115,000			120,000
	EBITDA	$	640,000		$	660,000