PR Newswire | Sep 24, 2020 05:01PM EDT

09/24 16:01 CDT

Oceaneering Announces Realigned Reporting Segments- Reorganized business units leverage common attributes to drive increased value HOUSTON, Sept. 24, 2020

HOUSTON, Sept. 24, 2020 /PRNewswire/ -- Oceaneering International, Inc. ("Oceaneering") (NYSE:OII) today announced that, beginning with results for the quarter ending September 30, 2020, it will be reporting financial results consistent with its newly realigned operating segments. This realignment reflects how Oceaneering now manages its businesses and supports its ongoing efforts to achieve greater cost efficiencies.

Rod Larson, President and Chief Executive Officer of Oceaneering, stated, "An integral part of our cost-savings effort has focused on exploiting synergies within our businesses. As a result of this effort, we have reorganized our business units into segments that better leverage common attributes, which we believe will drive increased value for our customers and our shareholders. The new structure organizes the company's business units around five operating segments, as follows:

* Subsea Robotics - Our Subsea Robotics ("SSR") segment consists of our prior Remotely Operated Vehicles ("ROV") segment, and ROV tooling (previously in our Subsea Products segment) and survey services (previously in our Subsea Projects segment). Senior Vice President, Martin J. McDonald is leading this segment. * Manufactured Products - Our Manufactured Products ("MP") segment consists of our manufactured products business (previously in our Subsea Products segment), and theme park entertainment systems and automated guided vehicles ("AGV") (previously in our Advanced Technologies segment). The alignment of entertainment systems and AGV with our manufactured products business allows us to leverage our manufacturing and project management expertise in these commercial businesses. Senior Vice President, Shaun R. Roedel is leading this segment. * Offshore Projects Group - Our Offshore Projects Group ("OPG") segment consists of our prior Subsea Projects segment, less survey services and global data solutions, and our service and rental business, less ROV tooling (previously in our Subsea Products segment). This combination brings together business units that frequently work together and promotes increased efficiency in bidding, project management, and the use of offshore technicians. Senior Vice President, Benjamin M. Laura is leading this segment. * Integrity Management & Digital Solutions - Our Integrity Management & Digital Solutions ("IMDS") segment consists of our prior Asset Integrity segment and our global data solutions business ("GDS") (previously in our Subsea Projects segment). The inclusion of GDS in this segment facilitates optimized digital and software solutions to our integrity management services. Senior Vice President, Kishore Sundararajan is leading this segment. * Aerospace and Defense Technologies - Our Aerospace and Defense Technologies ("ADTech") segment consists of our government business (previously in our Advanced Technologies segment), focused on defense subsea technologies, marine services, and space systems. Senior Vice President, Philip G. Beierl is leading this segment.

"We are confident that this realignment will promote increased efficiencies and contribute meaningfully to our previously announced cost-reduction objectives."

A table depicting Oceaneering's realigned reporting segments follows. The impact on Oceaneering's 2020 first half reported financial results is detailed in the attached tables as well.

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 beliefs that its realigned business segments will: drive increased value; leverage expertise; and promote increased efficiencies and cost-reduction objectives. 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 affecting Oceaneering's business, including risks typically attendant to changes in management and reporting structures. 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 latest annual report on Form 10-K and its other periodic filings with the Securities and Exchange Commission.

Oceaneering is a global provider of engineered services and products, primarily to the offshore energy industry. Through the use of its applied technology expertise, Oceaneering also serves the defense, entertainment, and aerospace industries.

For more information on Oceaneering, please visit www.oceaneering.com.

Contact:Mark PetersonVice President, Corporate Development and Investor RelationsOceaneering International, Inc.713-329-4507investorrelations@oceaneering.com

OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES



NEW SEGMENTS



Integrity Aerospace Subsea Manufactured Offshore Management & and Robotics Products (MP)Projects Group Digital Defense (SSR) (OPG) Solutions Technologies (IMDS) (ADTech)



Vessels Non-destructive Testing (NDT) Distribution Offshore Services Defense ROV Systems Inspection Subsea Route clearance & TechnologiesROV Tooling Connection trenching Systems Integrity Survey Management Marine Services EntertainmentService & Rental Services (survey, Systems (well intervention, positioning,(theme parks)Installation Digital and Workover Control Solutions: Space geoscience) Systems (IWOCS), Maritime Systems AGV Solutionslarge work packages)Shipping and GDS

Business remains in renamed segment Business shifted from different segment



SEGMENT INFORMATION (RECAST)



For the Three Months Ended For the Six Months Ended

Jun 30, 2020Jun 30, 2019Mar 31, 2020 Jun 30, 2020 Jun 30, 2019

($ in thousands)



Subsea Robotics

Revenue $119,234 $152,450 $139,770 $259,004 $281,056

Gross margin $21,324 $25,458 $19,473 $40,797 $39,046

Operating income (loss) $11,662 $14,714 $(94,083) $(82,421) $17,820

Operating income (loss) %10 %10 %(67) %(32) %6 %

ROV Days available 22,750 25,006 22,750 45,500 49,512

ROV Days utilized 13,501 15,423 14,853 28,354 28,365

ROV Utilization 59 %62 %65 %62 %57 %



Manufactured Products

Revenue $100,570 $116,964 $166,534 $267,104 $220,001

Gross margin $13,679 $13,693 $17,949 $31,628 $22,931

Operating income (loss) $3,865 $3,542 $(66,138) $(62,273) $3,228

Operating income (loss) %4 %3 %(40) %(23) %1 %

Backlog at end of period $380,000 $570,000 $427,000 $380,000 $570,000



Offshore Projects Group

Revenue $73,840 $84,585 $74,254 $148,094 $200,078

Gross margin $3,170 $2,853 $2,095 $5,265 $11,826

Operating income (loss) $(4,135) $(5,027) $(79,323) $(83,458) $(2,758)

Operating income (loss) %(6) %(6) %(107) %(56) %(1) %



Integrity Management & Digital Solutions

Revenue $53,969 $66,857 $64,729 $118,698 $132,725

Gross margin $5,455 $7,773 $9,792 $15,247 $14,882

Operating income (loss) $(1,825) $(464) $(121,535) $(123,360) $(1,948)

Operating income (loss) %(3) %(1) %(188) %(104) %(1) %



Aerospace and Defense Technologies

Revenue $79,603 $74,925 $91,381 $170,984 $155,807

Gross margin $17,313 $13,893 $17,485 $34,798 $27,274

Operating income (loss) $13,430 $9,362 $12,971 $26,401 $18,505

Operating income (loss) %17 %12 %14 %15 %12 %



Unallocated Expenses

Gross margin $(18,404) $(21,687) $(20,042) $(38,446) $(46,389)

Operating income (loss) $(28,179) $(31,762) $(32,649) $(60,828) $(66,196)



Total

Revenue $427,216 $495,781 $536,668 $963,884 $989,667

Gross margin $42,537 $41,983 $46,752 $89,289 $69,570

Operating income (loss) $(5,182) $(9,635) $(380,757) $(385,939) $(31,349)

Operating income (loss) %(1) %(2) %(71) %(40) %(3) %



The above Segment Information does not include adjustments for non-recurring transactions. See the tables in our Reconciliations of Non-GAAP to GAAP Financial Information section for financial measures that management considers representative of our ongoing operations.



SELECTED CASH FLOW INFORMATION (RECAST)



For the Three Months Ended For the Six Months Ended

Jun 30, Jun 30, Mar 31, Jun 30, Jun 30, 2020 2019 2020 2020 2019

(in thousands)



Capital Expenditures, $10,631$40,898$27,229 $37,860 $70,862 including Acquisitions



Depreciation and amortization:

Energy Services and Products

Subsea $25,080$31,640$139,187$164,267$64,827 Robotics

Manufactured 3,587 4,987 15,964 19,551 10,033 Products

Offshore 8,255 9,826 74,907 83,162 20,148 Projects Group

Integrity Management & 757 2,025 124,343 125,100 4,083 Digital Solutions

Total Energy Services and 37,679 48,478 354,401 392,080 99,091 Products

Aerospace and Defense 658 644 687 1,345 1,358 Technologies

Unallocated 361 1,182 1,108 1,469 2,341 Expenses

Total Depreciation and $38,698$50,304$356,196$394,894$102,790Amortization



Goodwill and long-lived asset impairment expense, reflected in the depreciation and amortization expense above, was $310 million in the three months ended March 31, 2020 and the six months ended June 30, 2020.



RECONCILIATIONS OF NON-GAAP TO GAAP FINANCIAL INFORMATION

In addition to financial results determined in accordance with U.S. generally accepted accounting principles ("GAAP"), this Press Release also includes non-GAAP financial measures (as defined under SEC Regulation G). We believe these are useful measures for investors to review because they provide consistent measures of the underlying results of our ongoing business. Furthermore, our management uses these measures as measures of the performance of our operations. We have included disclosures by segment of Adjusted Operating Income and Margins, Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), EBITDA Margins, Adjusted EBITDA and Adjusted EBITDA Margins. We define EBITDA Margin as EBITDA divided by revenue. Adjusted EBITDA and Adjusted EBITDA Margins as well as Adjusted Operating Income and Margin and related information by segment exclude the effects of certain specified items, as set forth in the tables that follow. EBITDA and EBITDA Margins, Adjusted EBITDA and Adjusted EBITDA Margins, and Adjusted Operating Income and Margin and related information by segment are each non-GAAP financial measures. We have included these disclosures in this press release because EBITDA and EBITDA Margins are widely used by investors for valuation and comparing our financial performance with the performance of other companies in our industry, and the adjusted amounts thereof (as well as Adjusted Operating Income and Margin by Segment) provide more consistent measures than the unadjusted amounts. Furthermore, our management uses these measures for purposes of evaluating our financial performance. Our presentation of EBITDA and EBITDA Margins (and the Adjusted amounts thereof) may not be comparable to similarly titled measures other companies report. Non-GAAP financial measures should be viewed in addition to and not as substitutes for our reported operating results, cash flows or any other measure prepared and reported in accordance with GAAP. The tables that follow provide reconciliations of the non-GAAP measures used in this press release to the most directly comparable GAAP measures.

RECONCILIATIONS OF NON-GAAP TO GAAP FINANCIAL INFORMATION





Adjusted Operating Income (Loss) and Margins by Segment (Recast)



For the Three Months Ended June 30, 2020

Offshore Integrity Aerospace Subsea ManufacturedProjects Management and Defense UnallocatedTotal Robotics Products Group & Digital TechnologiesExpenses Solutions

($ in thousands)

Operating Income (Loss) as reported in$11,662 $3,865 $(4,135) $(1,825) $13,430 $(28,179)$(5,182) accordance with GAAP

Adjustments for the effects of:

Restructuring expenses and 1,380 1,212 1,405 1,536 - 175 5,708 other

Total of 1,380 1,212 1,405 1,536 - 175 5,708 adjustments



Adjusted Operating $13,042 $5,077 $(2,730) $(289) $13,430 $(28,004)$526 Income (Loss)



Revenue $119,234 $100,570 $73,840 $53,969 $79,603 $427,216

Operating income (loss) % as reported 10 %4 %(6) %(3) %17 % (1) %in accordance with GAAP

Operating income (loss)%11 %5 %(4) %(1) %17 % - %using adjusted amounts



For the Three Months Ended June 30, 2019

Offshore Integrity Aerospace Subsea ManufacturedProjects Management and Defense UnallocatedTotal Robotics Products Group & Digital TechnologiesExpenses Solutions

($ in thousands)

Operating Income (Loss) as reported in$14,714 $3,542 $(5,027) $(464) $9,362 $(31,762)$(9,635) accordance with GAAP



Adjusted Operating $14,714 $3,542 $(5,027) $(464) $9,362 $(31,762)$(9,635) Income (Loss)



Revenue $152,450 $116,964 $84,585 $66,857 $74,925 $495,781

Operating income (loss) % as reported 10 %3 %(6) %(1) %12 % (2) %in accordance with GAAP

Operating income (loss)%10 %3 %(6) %(1) %12 % (2) %using adjusted amounts





For the Three Months Ended March 31, 2020

Offshore Integrity Aerospace Subsea ManufacturedProjects Management and Defense UnallocatedTotal Robotics Products Group & Digital TechnologiesExpenses Solutions

($ in thousands)

Operating Income (Loss) as reported in$(94,083) $(66,138) $(79,323) $(121,535) $12,971 $(32,649)$(380,757) accordance with GAAP

Adjustments for the effects of:

Long-lived assets - 61,074 7,522 167 - - 68,763 impairments

Long-lived assets 7,328 - - - - - 7,328 write-offs

Goodwill 102,118 11,388 66,285 123,214 - - 303,005 impairment

Restructuring expenses and 919 1,984 1,216 2,231 - 280 6,630 other

Total of 110,365 74,446 75,023 125,612 - 280 385,726 adjustments

Adjusted Operating $16,282 $8,308 $(4,300) $4,077 $12,971 $(32,369)$4,969 Income (Loss)



Revenue $139,770 $166,534 $74,254 $64,729 $91,381 $536,668

Operating income (loss) % as reported (67) %(40) %(107) %(188) %14 % (71) %in accordance with GAAP

Operating income (loss) % using 12 %5 %(6) %6 %14 % 1 %adjusted amounts





Adjusted Operating Income (Loss) and Margins by Segment (Recast)



For the Six Months Ended June 30, 2020

Integrity Unallocated Subsea Manufactured Offshore Management Aerospace Expenses Robotics Products Projects & Digital and Defense Group Solutions Technologies Total

($ in thousands)

(60,828) Operating Income (Loss) as reported in $(82,421) $(62,273) $(83,458) $(123,360) $ 26,401 $$ accordance with GAAP (385,939)

Adjustments for the effects of:

- Long-lived assets - 61,074 7,522 167 - impairments 68,763

- Long-lived assets 7,328 - - - - write-offs 7,328

- Goodwill impairment 102,118 11,388 66,285 123,214 - 303,005

455 Restructuring expenses and 2,299 3,196 2,621 3,767 - other 12,338

455 Total of adjustments 111,745 75,658 76,428 127,148 - 391,434



(60,373) Adjusted Operating $29,324 $13,385 $(7,030) $3,788 $ 26,401 $$ Income (Loss) 5,495



$ Revenue $259,004 $267,104 $148,094 $118,698 $ 170,984 963,884

Operating income (loss) % as reported in (32) % (23) % (56) % (104) % 15 % (40) accordance with GAAP %

Operating income (loss)% using adjusted 11 % 5 % (5) % 3 % 15 % 1 amounts %



For the Six Months Ended June 30, 2019

Integrity Unallocated Subsea Manufactured Offshore Management Aerospace Expenses Robotics Products Projects & Digital and Defense Group Solutions Technologies Total

($ in thousands)

(66,196) Operating Income (Loss) as reported in $17,820 $3,228 $(2,758) $(1,948) $ 18,505 $$ accordance with GAAP (31,349)



(66,196) Adjusted Operating $17,820 $3,228 $(2,758) $(1,948) $ 18,505 $$ Income (Loss) (31,349)



$ Revenue $281,056 $220,001 $200,078 $132,725 $ 155,807 989,667

Operating income (loss) % as reported in 6 % 1 % (1) % (1) % 12 % (3) accordance with GAAP %

Operating income (loss)% using adjusted 6 % 1 % (1) % (1) % 12 % (3) amounts %





RECONCILIATIONS OF NON-GAAP TO GAAP FINANCIAL INFORMATION





EBITDA and Adjusted EBITDA and Margins by Segment (Recast)



For the Three Months Ended June 30, 2020

Offshore Integrity Aerospace Unallocated Subsea ManufacturedProjects Management and Defense Expenses Total Robotics Products Group & Digital Technologiesand other Solutions

($ in thousands)

Operating Income (Loss) as reported in$11,662 $3,865 $(4,135) $(1,825) $13,430 $(28,179)$(5,182) accordance with GAAP

Adjustments for the effects of:

Depreciation and 25,080 3,587 8,255 757 658 361 38,698 amortization

Other pre-tax- - - - - (2,653) (2,653)

EBITDA 36,742 7,452 4,120 (1,068) 14,088 (30,471) 30,863

Adjustments for the effects of:

Restructuring expenses and 1,380 1,212 1,405 1,536 - 175 5,708 other

Foreign currency - - - - - 3,908 3,908 (gains) losses

Total of 1,380 1,212 1,405 1,536 - 4,083 9,616 adjustments

Adjusted $38,122 $8,664 $5,525 $468 $14,088 $(26,388)$40,479 EBITDA



Revenue $119,234 $100,570 $73,840 $53,969 $79,603 $427,216

Operating income (loss) % as reported 10 %4 %(6) %(3) %17 % (1) %in accordance with GAAP

EBITDA Margin 31 %7 %6 %(2) %18 % 7 %

Adjusted 32 %9 %7 %1 %18 % 9 %EBITDA Margin





For the Three Months Ended June 30, 2019

Offshore Integrity Aerospace Unallocated Subsea ManufacturedProjects Management and Defense Expenses Total Robotics Products Group & Digital Technologiesand other Solutions

($ in thousands)

Operating Income (Loss) as reported in$14,714 $3,542 $(5,027) $(464) $9,362 $(31,762)$(9,635) accordance with GAAP

Adjustments for the effects of:

Depreciation and 31,640 4,987 9,826 2,025 644 1,182 50,304 amortization

Other pre-tax- - - - - (328) (328)

EBITDA 46,354 8,529 4,799 1,561 10,006 (30,908) 40,341

Adjustments for the effects of:

Foreign currency - - - - - (59) (59) (gains) losses

Total of - - - - - (59) (59) adjustments

Adjusted $46,354 $8,529 $4,799 $1,561 $10,006 $(30,967)$40,282 EBITDA



Revenue $152,450 $116,964 $84,585 $66,857 $74,925 $495,781

Operating income (loss) % as reported 10 %3 %(6) %(1) %12 % (2) %in accordance with GAAP

EBITDA Margin 30 %7 %6 %2 %13 % 8 %

Adjusted 30 %7 %6 %2 %13 % 8 %EBITDA Margin



For the Three Months Ended March 31, 2020

Offshore Integrity Aerospace Unallocated Subsea ManufacturedProjects Management and Defense Expenses Total Robotics Products Group & Digital Technologiesand other Solutions

($ in thousands)

Operating Income (Loss) as reported in$(94,083) $(66,138) $(79,323) $(121,535) $12,971 $(32,649)$(380,757) accordance with GAAP

Adjustments for the effects of:

Depreciation and 139,187 15,964 74,907 124,343 687 1,108 356,196 amortization

Other pre-tax- - - - - (6,264) (6,264)

EBITDA 45,104 (50,174) (4,416) 2,808 13,658 (37,805) (30,825)

Adjustments for the effects of:

Long-lived assets - 61,074 7,522 167 - - 68,763 impairments

Restructuring expenses and 919 1,984 1,216 2,231 - 280 6,630 other

Foreign currency - - - - - 7,050 7,050 (gains) losses

Total of 919 63,058 8,738 2,398 - 7,330 82,443 adjustments

Adjusted $46,023 $12,884 $4,322 $5,206 $13,658 $(30,475)$51,618 EBITDA



Revenue $139,770 $166,534 $74,254 $64,729 $91,381 $536,668

Operating income (loss) % as reported (67) %(40) %(107) %(188) %14 % (71) %in accordance with GAAP

EBITDA Margin 32 %(30) %(6) %4 %15 % (6) %

Adjusted 33 %8 %6 %8 %15 % 10 %EBITDA Margin





EBITDA and Adjusted EBITDA and Margins by Segment (Recast)



For the Six Months Ended June 30, 2020

Offshore Integrity Aerospace Unallocated Subsea Manufactured Projects Management and Defense Expenses Total Robotics Products Group & Digital Technologies and other Solutions

($ in thousands)

Operating Income (Loss) as reported in $(82,421) $(62,273) $(83,458) $(123,360) $ 26,401 $(60,828)$(385,939) accordance with GAAP

Adjustments for the effects of:

Depreciation and 164,267 19,551 83,162 125,100 1,345 1,469 394,894 amortization

Other pre-tax - - - - - (8,917) (8,917)

EBITDA 81,846 (42,722) (296) 1,740 27,746 (68,276) 38

Adjustments for the effects of:

Long-lived assets - 61,074 7,522 167 - - 68,763 impairments

Restructuring expenses and 2,299 3,196 2,621 3,767 - 455 12,338 other

Foreign currency - - - - - 10,958 10,958 (gains) losses

Total of 2,299 64,270 10,143 3,934 - 11,413 92,059 adjustments

Adjusted EBITDA$84,145 $21,548 $9,847 $5,674 $ 27,746 $(56,863)$92,097



Revenue $259,004 $267,104 $148,094 $118,698 $ 170,984 $963,884

Operating income (loss) % as reported in (32) % (23) % (56) %(104) %15 % (40) %accordance with GAAP

EBITDA Margin 32 % (16) % - %1 %16 % - %

Adjusted EBITDA32 % 8 % 7 %5 %16 % 10 %Margin



For the Six Months Ended June 30, 2019

Offshore Integrity Aerospace Unallocated Subsea Manufactured Projects Management and Defense Expenses Total Robotics Products Group & Digital Technologies and other Solutions

($ in thousands)

Operating Income (Loss) as reported in $17,820 $3,228 $(2,758) $(1,948) $ 18,505 $(66,196)$(31,349) accordance with GAAP

Adjustments for the effects of:

Depreciation and 64,827 10,033 20,148 4,083 1,358 2,341 102,790 amortization

Other pre-tax - - - - - (113) (113)

EBITDA 82,647 13,261 17,390 2,135 19,863 (63,968) 71,328

Adjustments for the effects of:

Foreign currency - - - - - (673) (673) (gains) losses

Total of - - - - - (673) (673) adjustments

Adjusted EBITDA$82,647 $13,261 $17,390 $2,135 $ 19,863 $(64,641)$70,655



Revenue $281,056 $220,001 $200,078 $132,725 $ 155,807 $989,667

Operating income (loss) % as reported in 6 % 1 % (1) %(1) %12 % (3) %accordance with GAAP

EBITDA Margin 29 % 6 % 9 %2 %13 % 7 %

Adjusted EBITDA29 % 6 % 9 %2 %13 % 7 %Margin



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SOURCE Oceaneering International, Inc.