Exhibit 99.1
Oceaneering Announces 32% Sequential Improvement in Second Quarter Earnings
HOUSTON, Aug. 11 /PRNewswire-FirstCall/ -- Oceaneering International, Inc.
(NYSE: OII) today reported a 32% sequential improvement in second quarter
earnings for the quarter ended June 30, 2003. On revenues of $163.8 million,
Oceaneering generated net income of $8.1 million, or $0.33 per common share. For
the first quarter of 2003, Oceaneering reported revenues of $140.7 million and
net income of $6.0 million, or $0.25 per common share. The increase in earnings
over the first quarter was the result of improved profit contributions by
Oceaneering's Remotely Operated Vehicle, Subsea Products, and Inspection &
Non-Destructive Testing business segments.
Summary of Results
(in thousands, except per share amounts)
Three months ended Six months ended
June 30, March 31, June 30,
2003 2002 2003 2003 2002
Revenues $163,761 $141,550 $140,669 $304,430 $280,399
Gross Margin $28,226 $31,587 $24,163 $52,389 $57,597
Operating Income $14,743 $20,108 $11,457 $26,200 $35,208
Net Income $8,086 $10,926 $6,035 $14,121 $19,290
Diluted Earnings
Per Share $0.33 $0.44 $0.25 $0.58 $0.79
Weighted Average
Number of Diluted
Shares 24,284 24,892 24,500 24,392 24,555
On a comparable basis for the second quarter of 2002, Oceaneering reported
revenues of $141.6 million and net income of $10.9 million, or $0.44 per share.
The year-over-year quarterly decline in net income was attributable to lower
revenue and gross margin contributions from Oceaneering's Subsea Products and
Subsea Projects business segments and a higher level of Unallocated Expenses.
All Oceaneering business segments continued to contribute profit margins,
despite a challenging market environment for oilfield services and products in
general.
John Huff, Chairman and Chief Executive Officer, stated, "Results for the
quarter were encouraging and within our earnings guidance range. Revenues from
each of our six business segments were higher in the second quarter than the
first quarter.
"When compared to the first quarter of this year, gross margin from our
Remotely Operated Vehicle operations increased on the strength of improved fleet
utilization to 72% from 64%. Geographically most of the profit improvement came
from our Eastern Region, particularly in Norway and West Africa, as anticipated.
Inspection & NDT gross margin increased due to higher service sales,
particularly in Europe, and an improvement in gross margin percentage derived
from the contribution of operations acquired in the first quarter.
"Subsea Products gross margin improved on higher sales and an improvement
in gross margin percentage from both Multiflex umbilicals and Oceaneering
Intervention Engineering specialty subsea products. Subsea Products gross margin
was positively impacted by $1.3 million due to the successful completion of a
project at a lower cost than previously estimated. Backlog dropped to $26
million, down from $31 million at the end of the first quarter. Our relatively
low level of backlog continues to be attributable to depressed umbilical orders.
Certain orders have been delayed and we expect our backlog to be higher by the
end of this year. We are continuing our efforts to locate a suitable facility to
expand our U.S. umbilical plant manufacturing capacity. Profit contributions
from our U.S. and Brazilian steel tube capabilities are expected by the third
quarter of 2004.
"Gross margin from our Subsea Projects segment declined due to a very
competitive market environment in the Gulf of Mexico for diving and
vessel-related subsea installation, repair and maintenance services. Unallocated
Expenses increased due to higher restricted stock expenses associated with our
long-term and deferred compensation plans. Gross margin contributions from our
Mobile Offshore Production System and Advanced Technologies segments were
comparable to the first quarter.
"During the second quarter, we continued to have strong cash flow provided
by operating activities. Our capital expenditures, including acquisitions, were
$26.3 million. Our cash balance at quarter's end was $26.6 million and recently
we completed the arrangement of a new $100 million credit facility. We remain
committed to use our financial strength to make accretive investments, which
will expand and augment our existing operations, as well as to continue share
repurchases as conditions warrant.
"Our current EPS outlook is approximately $1.40 for 2003. This reflects a
lower anticipated profit contribution by our Subsea Products operations. We are
projecting earnings per share in the range of $0.35 to $0.40 for the third
quarter.
"At this time, we estimate 2004 EPS in the range of $1.60 to $1.75. This
estimate is based on incremental earnings contributions from Subsea Products,
driven by increased subsea completion activity, and additional asset and
acquisition investments. We anticipate continuation of current market conditions
or similar demand trends for our other five business segments. Should a
substantive recovery in market demand, particularly for our niche ROV and Subsea
Projects, occur we will be able to improve on this estimate by utilizing our
excess capacity and operating leverage."
Statements in this press release that express a belief, expectation or
intention, as well as those that are not historical fact, are forward looking.
The forward-looking statements in this press release include the statements
concerning Oceaneering's intentions with respect to the use of its financial
strength, its projected earnings for 2003 and 2004, its expectations concerning
future umbilical orders and contributions from its U.S. and Brazilian steel tube
capabilities, incremental earnings contribution from additional asset and
acquisition investments, and possible future share repurchases. 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: industry conditions, prices of crude oil and natural gas,
Oceaneering's ability to obtain and the timing of new projects, 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.
These and other risks are more fully described in Oceaneering's periodic filings
with the Securities and Exchange Commission.
Oceaneering is an advanced applied technology company that provides
engineered services and hardware to Customers who operate in marine, space, and
other harsh environments. Oceaneering's services and products are marketed
worldwide to oil and gas companies, government agencies, and firms in the
telecommunications, aerospace, and marine engineering and construction
industries.
For further information, please contact Jack Jurkoshek, Manager Investor
Relations, Oceaneering International, Inc., 11911 FM 529, Houston, Texas 77041;
Telephone 713-329-4670; Fax 713-329-4653; www.oceaneering.com. A live webcast
of the Company's earnings release conference call, scheduled for August 12, 2003
at 10:00 am central time, can be heard at www.companyboardroom.com (enter ticker
OII).
OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, 2003 Dec. 31, 2002
(in thousands)
ASSETS
Current Assets (including cash
and cash equivalents of $26,617
and $66,201) $237,604 $233,070
Net Property and Equipment 327,734 322,390
Other Assets 51,254 34,888
TOTAL ASSETS $616,592 $590,348
LIABILITIES AND
SHAREHOLDERS' EQUITY
Current Liabilities $126,319 $116,031
Long-Term Debt 115,200 112,800
Other Long-Term Liabilities 50,848 47,652
Shareholders' Equity 324,225 313,865
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $616,592 $590,348
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the For the
Three Months Ended Six Months Ended
June 30, June 30, March 31, June 30,
2003 2002 2003 2003 2002
(in thousands, except per share amounts)
Revenues $163,761 $141,550 $140,669 $304,430 $280,399
Cost of Services 135,535 109,963 116,506 252,041 222,802
Gross Margin 28,226 31,587 24,163 52,389 57,597
Selling, General
and Administrative
Expenses 13,483 11,479 12,706 26,189 22,389
Income from
Operations 14,743 20,108 11,457 26,200 35,208
Interest Income 123 135 164 287 204
Interest Expense (1,931) (2,355) (1,920) (3,851) (4,682)
Equity Earnings
(Losses) of
Unconsolidated
Affiliates (85) (675) (136) (221) (312)
Other Expense, Net (410) (403) (280) (690) (745)
Income before
Income Taxes 12,440 16,810 9,285 21,725 29,673
Provision for Income
Taxes (4,354) (5,884) (3,250) (7,604) (10,383)
Net Income $ 8,086 $ 10,926 $ 6,035 $ 14,121 $ 19,290
Diluted Earnings
per Common Share $0.33 $0.44 $0.25 $0.58 $0.79
Weighted Average Number
of Common Shares and
Equivalents 24,284 24,892 24,500 24,392 24,555
The above Condensed Consolidated Balance Sheets and Consolidated
Statements of Income should be read in conjunction with the Company's latest
Annual Report, Quarterly Report on Form 10-Q and Annual Report on Form 10-K.
SELECTED CASH FLOW INFORMATION
For the For the
Three Months Ended Six Months Ended
June 30, June 30, Mar. 31, June 30, June 30,
2003 2002 2003 2003 2002
($ in thousands)
Capital Expenditures,
Including Acquisition $26,276 $ 4,857 $37,575 $63,851 $12,025
Depreciation and
Amortization $14,174 $12,873 $13,746 $27,920 $25,243
SEGMENT INFORMATION
For the For the
Three Months Ended Six Months Ended
June 30, June 30, Mar. 31, June 30, June 30,
2003 2002 2003 2003 2002
($ in thousands)
OFFSHORE OIL AND GAS
Remotely Operated Vehicles
Revenues $ 40,879 $ 37,730 $ 35,064 $ 75,943 $ 73,752
Gross Margin $ 10,633 $ 10,846 $ 8,859 $ 19,492 $ 20,471
Gross Margin % 26% 29% 25% 26% 28%
Days Available 11,375 11,336 11,250 22,625 22,586
Utilization 72% 70% 64% 68% 70%
Subsea Products
Revenues $ 27,878 $ 36,461 $ 24,041 $ 51,919 $ 69,020
Gross Margin $ 6,366 $ 8,453 $ 3,588 $ 9,954 $ 15,453
Gross Margin % 23% 23% 15% 19% 22%
Subsea Projects
Revenues $ 18,367 $ 21,534 $ 12,534 $ 30,901 $ 43,501
Gross Margin $ 1,683 $ 4,319 $ 2,291 $ 3,974 $ 8,966
Gross Margin % 9% 20% 18% 13% 21%
Mobile Offshore
Production Systems
Revenues $ 12,068 $ 12,474 $ 11,289 $ 23,357 $ 24,701
Gross Margin $ 4,460 $ 4,730 $ 4,601 $ 9,061 $ 10,563
Gross Margin % 37% 38% 41% 39% 43%
Inspection & NDT
Revenues $ 34,761 $ 10,881 $ 30,480 $ 65,241 $ 20,057
Gross Margin $ 4,320 $ 1,417 $ 3,150 $ 7,470 $ 2,753
Gross Margin % 12% 13% 10% 11% 14%
ADVANCED TECHNOLOGIES
Revenues $ 29,808 $ 22,470 $ 27,261 $ 57,069 $ 49,368
Gross Margin $ 5,486 $ 4,233 $ 5,387 $ 10,873 $ 8,700
Gross Margin % 18% 19% 20% 19% 18%
UNALLOCATED EXPENSES $ (4,722) $ (2,411) $ (3,713) $ (8,435) $ (9,309)
TOTAL
Revenues $163,761 $141,550 $140,669 $304,430 $280,399
Gross Margin $ 28,226 $ 31,587 $ 24,163 $ 52,389 $ 57,597
Gross Margin % 17% 22% 17% 17% 21%
SOURCE Oceaneering International, Inc.
-0- 08/11/2003
/CONTACT: Jack Jurkoshek, Manager Investor Relations of Oceaneering
International, Inc., +1-713-329-4670, or fax, +1-713-329-4653/
/Web site: http://www.companyboardroom.com /
/Web site: http://www.oceaneering.com /
(OII)