EXHIBIT 99.1
Oceaneering Announces First Quarter Earnings
May 6, 2003- Houston, Texas - Oceaneering International, Inc. (NYSE:OII) today
reported first quarter earnings for the quarter ended March 31, 2003. On
revenues of $140.7 million, Oceaneering generated net income of $6.0 million, or
$0.25 per common share. On a comparable basis for the first quarter of 2002,
Oceaneering reported revenues of $138.8 million and net income of $8.4 million,
or $0.35 per common share.
Due to the acquisition of OIS International Inspection plc (OISI) during the
quarter and the resulting increased presence in the Inspection & NDT business,
Oceaneering has divided its former Other Services business segment into two
segments: Subsea Projects and Inspection & NDT commencing this quarter.
Historical financial information reflecting new segments is included in the
attached tables, by quarter, for 2001 and 2002.
Summary of Results
For the Periods Ended March 31, 2003 and 2002
(in thousands, except per share amounts)
Three months ended March 31,
2003 2002
---- ----
Revenues $140,669 $138,849
Gross Margin $24,163 $26,010
Income from Operations $11,457 $15,100
Net Income $6,035 $8,364
Diluted Earnings Per Share $0.25 $0.35
Weighted Average Number of Diluted Shares 24,500 24,219
The decline in net income was attributable to a lower profit contribution from
Oceaneering's oil and gas-related business activities, reflecting industry
market conditions.
John Huff, Chairman and Chief Executive Officer, stated, "Results for the
quarter slightly exceeded the Street's expectation and were on the high end of
our forecast. This was very encouraging considering the challenging market
conditions for oilfield services and products. We are pleased with the fact we
continued to have a profit contribution from all of our oilfield business
segment operations, even in the perplexing environment of high commodity prices
and reduced activity levels.
- more -
"Revenue and gross margin for our Inspection & NDT business grew significantly
as the result of our acquisition of OISI early in the quarter. The decline in
revenue and gross margin from the rest of our oilfield service and product
segments came as no surprise for reasons relating to industry market conditions,
which are widely known: Remotely Operated Vehicles (ROV) - weak demand for drill
support services on floating offshore rigs rated to drill in less than 3,000
feet of water; Subsea Products - umbilical order delays, although backlog did
increase to $31 million at quarter's end; Subsea Projects - Gulf of Mexico
subsea project timing issues and an expectation of a reduced 2003 contribution
from our diving operations - utilization of our two Ocean Intervention vessels
was 51% compared to 91% for the first quarter last year; and Mobile Offshore
Production Systems - the lower Ocean Legend dayrate that went into effect last
May. Subsea Projects gross margin was positively impacted by $1.9 million of
expense estimate changes. Cost contingencies were determined to not be necessary
due to a favorable completion of an installation project and the settlement of a
personal injury claim.
"Advanced Technologies segment financial results improved due to higher margin
contracts and operating efficiencies. Furthermore, we benefited from a lower
level of Unallocated Expenses that are related to our incentive and deferred
compensation plans; a lower Oceaneering stock price results in less restricted
stock expense.
"During the quarter we continued to have strong cash flow. Our capital
expenditures were $38 million, of which $27 million was spent on the OISI
acquisition. In addition to our internal growth and acquisitions, we repurchased
505,000 shares of Oceaneering common stock. Our cash balance at quarter's end
was $40 million. 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 2003 EPS outlook remains $1.40 to $1.60, as we believe the demand for our
ROV, Subsea Products, and Subsea Projects business offerings is escalating. We
are projecting earnings per share in the range of $0.33 to $0.37 for the second
quarter.
"Looking further ahead, our preliminary assessment of achieving EPS growth of
15% to 25% in 2004 is unchanged. This is based on our expectations of improving
market demand for our services and products, driven by increased floating
drilling rig use and subsea completion activity; incremental earnings
contribution from additional asset investments; and possible future share
repurchases."
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, its assessment of EPS growth in 2004,
and its expectations concerning improving market demand, incremental earnings
contribution from additional asset 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 May 7, 2003 at
10:00 am central time, can be heard at www.companyboardroom.com (enter ticker
OII).
PR 849
- Tables follow on next page-
OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in thousands)
March 31, Dec. 31,
2003 2002
---- ----
(unaudited)
ASSETS
Current Assets (including cash and cash equivalents of
$39,813 and $66,201) $235,672 $233,070
Net Property and Equipment 325,763 322,390
Other Assets 40,250 34,888
-------- --------
TOTAL ASSETS $601,685 $590,348
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities $132,377 $116,031
Long-Term Debt 111,600 112,800
Other Long-Term Liabilities 48,777 47,652
Shareholders' Equity 308,931 313,865
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $601,685 $590,348
======== ========
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
($ in thousands, except per share amounts)
(unaudited)
Three Months Ended
March 31,
---------------------------
2003 2002
---- ----
Revenues $140,669 $138,849
Cost of Services and Products 116,506 112,839
-------- --------
Gross Margin 24,163 26,010
Selling, General and Administrative Expenses 12,706 10,910
-------- --------
Income from Operations 11,457 15,100
Interest Income 164 69
Interest Expense (1,920) (2,327)
Equity Earnings (Losses) of Unconsolidated Affiliates (136) 363
Other Expense, Net (280) (342)
-------- --------
Income before Income Taxes 9,285 12,863
Provision for Income Taxes (3,250) (4,499)
-------- --------
Net Income $ 6,035 $ 8,364
======== ========
Diluted Earnings per Common Share $0.25 $0.35
Weighted Average Number of Common Shares
and Equivalents 24,500 24,219
The Condensed Consolidated Balance Sheets and Consolidated Statements of Income
should be read in conjunction with the Company's latest Annual Report,
Quarterly Report on Form 10-Q and Annual Report on Form 10-K.
SELECTED CASH FLOW INFORMATION
($ in thousands)
(unaudited)
Three Months Ended
March 31,
---------------------------------
2003 2002
---- ----
Capital Expenditures $37,575 $7,168
Depreciation and Amortization $13,746 $12,371
SEGMENT INFORMATION
($ in thousands)
(unaudited)
Three Months Ended
-----------------------------------------------------
March 31, March 31, Dec. 31,
2003 2002 2002
--------- --------- --------
OFFSHORE OIL AND GAS
Remotely Operated Vehicles
Revenues $35,064 $36,022 $37,800
Gross Margin $ 8,859 $ 9,625 $ 9,019
Gross Margin % 25% 27% 24%
Days Available 11,250 11,250 11,561
Utilization 64% 70% 70%
Subsea Products
Revenues $24,041 $32,559 $30,282
Gross Margin $ 3,588 $ 7,000 $ 7,268
Gross Margin % 15% 21% 24%
Subsea Projects
Revenues $12,534 $21,967 $18,697
Gross Margin $ 2,291 $ 4,647 $ 4,710
Gross Margin % 18% 21% 25%
Mobile Offshore Production
Systems
Revenues $11,289 $12,227 $10,810
Gross Margin $ 4,601 $ 5,833 $ 4,651
Gross Margin % 41% 48% 43%
Inspection & NDT
Revenues $30,480 $ 9,176 $11,844
Gross Margin $ 3,150 $ 1,336 $ 1,428
Gross Margin % 10% 15% 12%
ADVANCED TECHNOLOGIES
Revenues $27,261 $26,898 $27,028
Gross Margin $ 5,387 $ 4,467 $ 4,940
Gross Margin % 20% 17% 18%
UNALLOCATED EXPENSES $(3,713) $(6,898) $(5,527)
TOTAL
Revenues $140,669 $138,849 $136,461
Gross Margin $24,163 $26,010 $26,489
Gross Margin % 17% 19% 19%
SEGMENT INFORMATION
2002
($ in thousands)
Three Months Ended (unaudited)
----------------------------------------------- Year Ended
Mar. 31, Jun. 30, Sep. 30, Dec. 31, Dec. 31,
-------- -------- -------- -------- ----------
OFFSHORE OIL AND GAS
Remotely Operated Vehicles
Revenues $36,022 $37,730 $38,067 $37,800 $149,619
Gross Margin $ 9,625 $10,846 $10,048 $ 9,019 $39,538
Gross Margin % 27% 29% 26% 24% 26%
Days Available 11,250 11,336 11,438 11,561 45,585
Utilization 70% 70% 65% 70% 69%
Subsea Products
Revenues $32,559 $36,461 $23,925 $30,282 $123,227
Gross Margin $ 7,000 $ 8,453 $ 6,699 $ 7,268 $29,420
Gross Margin % 21% 23% 28% 24% 24%
Subsea Projects
Revenues $21,967 $21,534 $16,511 $18,697 $78,709
Gross Margin $ 4,647 $ 4,319 $ 2,742 $ 4,710 $16,418
Gross Margin % 21% 20% 17% 25% 21%
Mobile Offshore Production
Systems
Revenues $12,227 $12,474 $13,027 $10,810 $48,538
Gross Margin $ 5,833 $ 4,730 $ 5,966 $ 4,651 $21,180
Gross Margin % 48% 38% 46% 43% 44%
Inspection & NDT
Revenues $ 9,176 $10,881 $12,125 $11,844 $44,026
Gross Margin $ 1,336 $ 1,417 $ 1,432 $ 1,428 $ 5,613
Gross Margin % 15% 13% 12% 12% 13%
ADVANCED TECHNOLOGIES
Revenues $26,898 $22,470 $26,952 $27,028 $103,348
Gross Margin $ 4,467 $ 4,233 $ 6,438 $ 4,940 $20,078
Gross Margin % 17% 19% 24% 18% 19%
UNALLOCATED EXPENSES $(6,898) $(2,411) $ (3,246) $(5,527) $(18,082)
TOTAL
Revenues $138,849 $141,550 $130,607 $136,461 $547,467
Gross Margin $26,010 $31,587 $30,079 $26,489 $114,165
Gross Margin % 19% 22% 23% 19% 21%
SEGMENT INFORMATION
2001
($ in thousands)
Three Months Ended (unaudited)
----------------------------------------------- Year Ended
Mar. 31, Jun. 30, Sep. 30, Dec. 31, Dec. 31,
-------- -------- -------- -------- -----------
OFFSHORE OIL AND GAS
Remotely Operated Vehicles
Revenues $ 32,234 $ 40,584 $39,956 $41,155 $153,929
Gross Margin $ 10,672 $ 13,822 $12,205 $11,554 $48,253
Gross Margin % 33% 34% 31% 28% 31%
Days Available 10,703 11,156 11,442 11,500 44,801
Utilization 71% 79% 79% 76% 76%
Subsea Products
Revenues $ 22,095 $ 27,176 $40,333 $36,844 $126,448
Gross Margin $ 3,262 $ 720 $ 7,885 $ 8,434 $20,301
Gross Margin % 15% 3% 20% 23% 16%
Subsea Projects
Revenues $14,146 $ 21,044 $18,904 $17,991 $72,085
Gross Margin $ 1,955 $ 4,320 $ 1,844 $ 2,793 $10,912
Gross Margin % 14% 21% 10% 16% 15%
Mobile Offshore Production
Systems
Revenues $ 6,979 $ 11,130 $ 9,031 $12,014 $39,154
Gross Margin $ 2,036 $ 2,936 $ 4,258 $ 3,288 $12,518
Gross Margin % 29% 26% 47% 27% 32%
Inspection & NDT
Revenues $ 5,621 $ 6,678 $ 7,932 $ 9,934 $30,165
Gross Margin $ 632 $ 1,205 $ 1,567 $ 1,186 $ 4,590
Gross Margin % 11% 18% 20% 12% 15%
ADVANCED TECHNOLOGIES
Revenues $23,113 $25,593 $26,449 $27,724 $102,879
Gross Margin $ 4,620 $ 5,503 $ 5,363 $ 4,856 $20,342
Gross Margin % 20% 22% 20% 18% 20%
UNALLOCATED EXPENSES $(4,080) $(3,658) $(3,062) $(5,785) $(16,585)
TOTAL
Revenues $104,188 $132,205 $142,605 $145,662 $524,660
Gross Margin $19,097 $24,848 $30,060 $26,326 $100,331
Gross Margin % 18% 19% 21% 18% 19%