Equibles

8-K

OCEANEERING INTERNATIONAL INC (OII)

8-K 2022-10-26 For: 2022-10-26
View Original
Added on April 07, 2026

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): October 26, 2022

OCEANEERING INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

oii-20221026_g1.jpg

Delaware 1-10945 95-2628227
(State or other jurisdiction<br>of incorporation) (Commission<br>File Number) (IRS Employer<br>Identification No.) 5875 North Sam Houston Parkway West, Suite 400
--- --- ---
Houston, TX 77086
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (713) 329-4500

11911 FM 529, Houston, TX 77041

(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))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered
Common stock, par value $0.25 per share OII New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2):

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02    Results of Operations and Financial Condition.

On October 26, 2022, Oceaneering International, Inc. ("Oceaneering" or "we") issued a press release announcing Oceaneering's earnings for the third quarter ended September 30, 2022. A copy of that press release is furnished as Exhibit 99.1 to this report and is incorporated by reference into this item 2.02.

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 (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference into any registration statement or other filing under the Securities Act of 1933, as amended, or the Exchange Act, unless specifically identified in such filing as being incorporated by reference in such filing.

Item 9.01    Financial Statements and Exhibits.

(d) Exhibits

99.1 Press Release of Oceaneering International, Inc., datedOctober26, 2022.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document.)

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: October 26, 2022 By: /S/ WITLAND J. LEBLANC, JR.
Witland J. LeBlanc, Jr.
Vice President and Chief Accounting Officer

Document

Exhibit 99.1

Oceaneering Reports Third Quarter 2022 Results

HOUSTON, October 26, 2022 – Oceaneering International, Inc. ("Oceaneering") (NYSE:OII) today reported net income of $18.3 million, or $0.18 per share, on revenue of $560 million for the three months ended September 30, 2022. Adjusted net income was $23.7 million, or $0.23 per share, reflecting the impact of $1.1 million of pre-tax adjustments associated with foreign exchange losses recognized during the quarter and $4.4 million of discrete tax adjustments, primarily due to changes in valuation allowances and uncertain tax positions.

During the prior quarter ended June 30, 2022, Oceaneering reported net income of $3.7 million, or $0.04 per share, on revenue of $524 million. Adjusted net income was $7.4 million, or $0.07 per share, reflecting the impact of $0.9 million of pre-tax adjustments associated with foreign exchange gains recognized during the quarter and $4.5 million of discrete tax adjustments, primarily due to changes in valuation allowances.

Adjusted operating income (loss), operating margins, net income (loss) and earnings (loss) per share, EBITDA and adjusted EBITDA (as well as EBITDA and adjusted EBITDA margins), and free cash flow are non-GAAP measures that exclude the impacts of certain identified items. Reconciliations to the corresponding GAAP measures are shown in the tables Adjusted Net Income (Loss) and Diluted Earnings (Loss) per Share (EPS), EBITDA and Adjusted EBITDA and Margins, Free Cash Flow, 2022 and 2023 Adjusted EBITDA and Free Cash Flow Estimates, Adjusted Operating Income (Loss) and Margins by Segment, and EBITDA and Adjusted EBITDA and Margins by Segment. These tables are included below under the caption Reconciliations of Non-GAAP to GAAP Financial Information.

Summary of Results
(in thousands, except per share amounts)
For the Three Months Ended For the Nine Months Ended
Sep 30, Jun 30, Sep 30,
2022 2021 2022 2022 2021
Revenue $ 559,671 $ 466,814 $ 524,031 $ 1,529,861 $ 1,402,566
Gross Margin 95,754 59,848 76,041 217,275 184,902
Income (Loss) from Operations 46,875 15,769 22,850 68,686 52,371
Net Income (Loss) 18,303 (7,370) 3,720 2,813 (10,494)
Diluted Earnings (Loss) Per Share $ 0.18 $ (0.07) $ 0.04 $ 0.03 $ (0.11)

For the third quarter of 2022:

•Consolidated Adjusted EBITDA was $77.6 million;

•Consolidated Operating Income was $46.9 million;

•Cash flow provided by operating activities was $85.9 million and free cash flow was $66.6 million, with an ending cash position of $428 million; and

•Consolidated order intake was $700 million.

As of September 30, 2022:

•Remotely Operated Vehicles (ROV) fleet count was 250, Q3 utilization was 67%, and Q3 average revenue per day on hire was $8,468; and

•Manufactured Products backlog was $365 million.

Initial guidance for 2023:

•Consolidated EBITDA is expected in the range of $260 million to $310 million; and

•Free cash flow generation is expected to exceed $100 million.

Roderick A. Larson, President and Chief Executive Officer of Oceaneering, stated, "Our third quarter results were driven by improved offshore activity and pricing, particularly in the Gulf of Mexico (GoM), which ticked up further during the quarter. We produced adjusted consolidated EBITDA of $77.6 million, which exceeded our guidance and consensus estimates. Offshore activity drove significant operating improvements in our energy businesses, which were led by our Subsea Robotics (SSR) and Offshore Projects Group (OPG) segments. In addition, increased manufacturing throughput led to improved operating margins in our Manufactured Products segment. We also saw a meaningful recovery in our government-focused businesses after experiencing the effects of negative timing during the second quarter of 2022. For the full year of 2022, we expect our adjusted EBITDA within the narrowed range of $215 million to $240 million and continue to expect positive free cash flow in the range of $25 million to $75 million.

“The offshore recovery is clearly underway, and with increasing emphasis on both energy security and development of the cleanest, safest and most reliable energy sources, I expect positive market fundamentals to support our energy-focused businesses for years to come. In addition, with increasing competition for, and scarcity of, available labor, our mobile and subsea robotics businesses are experiencing heightened levels of interest as automation lowers on-site personnel requirements and enables remote supervisory control.

Segment Results

“Sequentially, SSR revenue and operating income both increased as expected, with higher activity levels for ROV, survey and tooling services. SSR EBITDA margin of 31% improved over the second quarter of 2022 as new contract pricing and utilization efficiencies are increasingly being reflected in our results. As disclosed in our recent press release, we received strong SSR order intake of $300 million during the third quarter of 2022.

"Sequentially, third quarter 2022 ROV days on hire were 5% higher, with drill support days higher and vessel-based services days essentially flat. Our fleet use during the quarter was 60% in drill support and 40% in vessel-based activity, compared to 57% and 43%, respectively, during the second quarter. Fleet utilization rose to 67% for the quarter as compared to 64% during the second quarter. Third quarter 2022 average ROV revenue per day on hire of $8,468 was 2% higher than in the second quarter.

"Manufactured Products third quarter 2022 operating results improved despite an 11% decrease in revenue. Operating income and related margin percentage of $4.3 million and 5%, respectively, improved measurably from the second quarter of 2022 due primarily to increased manufacturing throughput in our subsea hardware businesses. Order intake during the quarter was solid, with backlog on September 30, 2022 increasing to $365 million from our June 30, 2022 backlog of $335 million. Our book-to-bill ratio was 1.17 for the nine months ended September 30, 2022, and 1.08 for the trailing 12 months.

"As expected, OPG saw strong seasonal activity during the third quarter of 2022, which resulted in higher operating income on a 31% increase in revenue as compared to the second quarter. Results were driven by increased intervention and installation work, primarily in the GoM. OPG’s operating income margin of 13% reflected slight changes in service mix and continued high levels of demand and pricing for vessel-based services in the GoM.

"Sequentially, Integrity Management and Digital Solutions (IMDS) operating income declined slightly on 2% less revenue. Revenue declined as customers, particularly in Europe, delayed inspection programs and kept facilities running to support energy security priorities. Operating income margin of 5% declined from the 6% recorded for the second quarter of 2022, due primarily to the continuing impacts of employee wage inflation.

"Aerospace and Defense Technologies (ADTech) third quarter 2022 operating income increased significantly from the second quarter on essentially flat revenue. Operating income margin of 15% improved significantly from the second quarter of 2022, reflecting recovery of prior quarter pre-contract costs and favorable project mix. At the corporate level, Unallocated Expenses of $30.9 million for the third quarter were less than expected, and slightly lower than the second quarter of 2022.

Fourth Quarter and Full Year Outlook:

"Looking forward, on a consolidated basis, we believe that our fourth quarter 2022 EBITDA will decline on relatively flat revenue as compared to our third quarter results. Sequentially, we forecast: higher revenue and operating profitability in our Manufactured Products segment; slightly lower revenue and operating results in our SSR segment; significantly lower revenue and operating profitability in our OPG segment due to lower seasonal activity; slightly lower revenue and operating results in our IMDS segment; and modestly higher revenue and lower operating results in our ADTech segment. Unallocated Expenses are forecast to be in the mid-$30 million range.

"For the full year of 2022, we expect to generate adjusted EBITDA within the narrowed range of $215 million to $240 million. Our guidance for organic capital expenditures remains in the range of $70 million to $80 million and our guidance for cash income tax payments remains in the range of $40 million to $45 million. We continue to expect positive free cash flow of between $25 million and $75 million for the full year of 2022.

Initial 2023 Guidance:

"Looking into 2023, year over year, we are anticipating increased activity and improved operating performance across each of our operating segments, led by gains from SSR and OPG. At this time, we forecast EBITDA in the range of $260 million to $310 million in 2023, driving healthy levels of cash flow from operations. In 2023, we expect capital expenditures to be higher than in 2022 as we continue to focus on growth. We also expect to generate positive free cash flow in excess of $100 million. We will provide more specific guidance on our expectations for 2023 during the year-end reporting process.

Key Priorities:

"Our key priorities remain unchanged. Focusing on safety, maintaining our financial and capital discipline, generating significant free cash flow, managing our 2024 debt maturity, and growing the Company by leveraging core competencies remain our top priorities for the foreseeable future. Increasing our pricing and margins to generate a fair return for our world-class services and products is also a priority. Optimizing each of these priorities positions us for success in the energy transition while presenting increasing opportunities to provide returns to our shareholders."

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, future expected business and financial performance and prospects of Oceaneering. More specifically, the forward-looking statements in this press release include the statements concerning Oceaneering’s: forecasted FY 2023 guidance ranges for consolidated EBITDA, free cash flow and growth capital expenditures; beliefs regarding offshore recovery and market fundamentals; backlog, to the extent backlog may be an indicator of future revenue or profitability; forecasted direction of fourth quarter 2022 consolidated EBITDA and revenue, and segments revenue and operating results; forecasted range of fourth quarter 2022 Unallocated Expenses; forecasted FY 2022 guidance ranges for adjusted EBITDA, organic capital expenditures, cash income tax payments, and free cash flow ; anticipated sequentially comparative FY 2023 activity and operating performance across each operating segment, led by gains from SSR and OPG; anticipated outcomes from optimizing stated priorities; and, characterization of offshore demand, offshore recovery, offshore activity levels, market fundamentals, outlook, performance, results, opportunities, and financials as meaningful, increasing, seasonal, strong, supportive, robust, significant, substantial, good, or healthy.

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: factors affecting the level of activity in the oil and gas industry, including worldwide demand for and prices of oil and natural gas, oil and natural gas production growth and the supply and demand of offshore drilling rigs; actions by members of OPEC and other oil exporting countries; decisions about offshore developments to be made by oil and gas exploration, development and production companies; the use of subsea completions and our ability to capture associated market share; general economic and business conditions and industry trends; the strength of the industry segments in which we are involved; the continuing effects of the COVID-19 pandemic and the governmental, customer, supplier, and other responses thereto; cancellations of contracts, change orders and other contractual modifications, force majeure declarations and the exercise of contractual suspension rights and the resulting adjustments to our backlog; collections from our customers; our future financial performance, including as a result of the availability, terms and deployment of capital; the consequences of significant changes in currency exchange rates; the volatility and uncertainties of credit markets; changes in tax laws, regulations and interpretation by taxing authorities; changes in, or our ability to comply with, other laws and governmental regulations, including those relating to the environment; the continued availability of qualified personnel; our ability to obtain raw materials and parts on a timely basis and, in some cases, from limited sources; operating risks normally incident to offshore exploration, development and production operations; hurricanes and other adverse weather and sea conditions; cost and time associated with drydocking of our vessels; the highly competitive nature of our businesses; adverse outcomes from legal or regulatory proceedings; the risks associated with integrating businesses we acquire; rapid technological changes; and social, political, military and economic situations in foreign countries where we do business and the possibilities of civil disturbances, war, other armed conflicts or terrorist attacks. For a more complete discussion of these and other risk factors, please see Oceaneering’s latest annual report on Form 10-K and subsequent quarterly reports on Form 10-Q filed with the Securities and Exchange Commission. You should not place undue reliance on forward-looking statements. Except to the extent required by applicable law, Oceaneering undertakes no obligation to update or revise any forward-looking statement.

Oceaneering is a global technology company delivering engineered services and products and robotic solutions to the offshore energy, defense, aerospace, manufacturing, and entertainment industries.

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

Contact:

Mark Peterson

Vice President, Corporate Development and Investor Relations

Oceaneering International, Inc.

713-329-4507

investorrelations@oceaneering.com

- Tables follow on next page -

OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
Sep 30, 2022 Dec 31, 2021
(in thousands)
ASSETS
Current assets (including cash and cash equivalents of 427,507 and 538,114) $ 1,219,742 $ 1,188,003
Net property and equipment 434,586 489,596
Other assets 268,504 285,260
Total Assets $ 1,922,832 $ 1,962,859
LIABILITIES AND EQUITY
Current liabilities $ 515,725 $ 501,161
Long-term debt 701,258 702,067
Other long-term liabilities 228,551 248,607
Equity 477,298 511,024
Total Liabilities and Equity $ 1,922,832 $ 1,962,859
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended For the Nine Months Ended
Sep 30, 2022 Sep 30, 2021 Jun 30, 2022 Sep 30, 2022 Sep 30, 2021
(in thousands, except per share amounts)
Revenue $ 559,671 $ 466,814 $ 524,031 $ 1,529,861 $ 1,402,566
Cost of services and products 463,917 406,966 447,990 1,312,586 1,217,664
95,754 59,848 76,041 217,275 184,902
Selling, general and administrative expense 48,879 44,079 53,191 148,589 132,531
46,875 15,769 22,850 68,686 52,371
Interest income 1,396 662 767 2,959 1,864
Interest expense (9,552) (9,616) (9,619) (28,614) (29,752)
Equity in income (losses) of unconsolidated affiliates 496 189 318 1,108 1,101
Other income (expense), net (1,222) (814) 583 (195) (4,222)
37,993 6,190 14,899 43,944 21,362
Provision (benefit) for income taxes 19,690 13,560 11,179 41,131 31,856
$ 18,303 $ (7,370) $ 3,720 $ 2,813 $ (10,494)
Weighted average diluted shares outstanding 101,310 99,797 101,430 101,372 99,675
Diluted earnings (loss) per share $ 0.18 $ (0.07) $ 0.04 $ 0.03 $ (0.11)
The above Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Operations should be read in conjunction with the Company's latest Annual Report on Form 10-K and Quarterly Report on Form 10-Q.

All values are in US Dollars.

SEGMENT INFORMATION
For the Nine Months Ended
Sep 30, 2021 Jun 30, 2022 Sep 30, 2022 Sep 30, 2021
( in thousands)
Subsea Robotics
Revenue 169,422 $ 143,710 $ 157,123 $ 454,534 $ 404,200
Gross margin 47,552 $ 28,918 $ 37,004 $ 106,514 $ 84,763
Operating income (loss) 37,069 $ 19,533 $ 25,938 $ 74,559 $ 55,862
Operating income (loss) % % 14 % 17 % 16 % 14 %
ROV days available 23,002 22,750 68,250 68,221
ROV days utilized 14,474 14,631 41,881 40,366
ROV utilization % 63 % 64 % 61 % 59 %
Manufactured Products
Revenue 94,039 $ 75,359 $ 105,456 $ 282,187 $ 241,311
Gross margin 12,170 $ 8,544 $ 7,918 $ 31,090 $ 26,939
Operating income (loss) 4,282 $ 809 $ (1,365) $ 5,560 $ 4,352
Operating income (loss) % % 1 % (1) % 2 % 2 %
Backlog at end of period 365,000 $ 334,000 $ 335,000 $ 365,000 $ 334,000
Offshore Projects Group
Revenue 152,987 $ 95,580 $ 116,457 $ 366,841 $ 292,765
Gross margin 27,647 $ 13,815 $ 25,441 $ 60,825 $ 43,492
Operating income (loss) 20,310 $ 7,634 $ 17,535 $ 38,511 $ 24,443
Operating income (loss) % % 8 % 15 % 10 % 8 %
Integrity Management & Digital Solutions
Revenue 58,465 $ 62,806 $ 59,438 $ 174,473 $ 180,924
Gross margin 8,371 $ 11,330 $ 9,222 $ 26,792 $ 30,001
Operating income (loss) 3,091 $ 5,362 $ 3,436 $ 10,035 $ 12,557
Operating income (loss) % % 9 % 6 % 6 % 7 %
Aerospace and Defense Technologies
Revenue 84,758 $ 89,359 $ 85,557 $ 251,826 $ 283,366
Gross margin 19,431 $ 20,019 $ 15,744 $ 52,045 $ 66,732
Operating income (loss) 13,043 $ 14,251 $ 8,961 $ 33,848 $ 50,430
Operating income (loss) % % 16 % 10 % 13 % 18 %
Unallocated Expenses
Gross margin (19,417) $ (22,778) $ (19,288) $ (59,991) $ (67,025)
Operating income (loss) (30,920) $ (31,820) $ (31,655) $ (93,827) $ (95,273)
Total
Revenue 559,671 $ 466,814 $ 524,031 $ 1,529,861 $ 1,402,566
Gross margin 95,754 $ 59,848 $ 76,041 $ 217,275 $ 184,902
Operating income (loss) 46,875 $ 15,769 $ 22,850 $ 68,686 $ 52,371
Operating income (loss) % % 3 % 4 % 4 % 4 %
The above Segment Information does not include adjustments for non-recurring transactions. See the tables below under the caption "Reconciliations of Non-GAAP to GAAP Financial Information" for financial measures that our management considers in evaluating our ongoing operations.

All values are in US Dollars.

SELECTED CASH FLOW INFORMATION
For the Three Months Ended For the Nine Months Ended
Sep 30, 2022 Sep 30, 2021 Jun 30, 2022 Sep 30, 2022 Sep 30, 2021
(in thousands)
Capital Expenditures, including Acquisitions $ 19,280 $ 12,488 $ 16,495 $ 55,094 $ 35,816
Depreciation and Amortization:
Energy Services and Products
Subsea Robotics $ 16,013 $ 21,483 $ 17,531 $ 52,545 $ 66,871
Manufactured Products 2,939 3,202 3,020 9,031 9,677
Offshore Projects Group 7,132 6,781 7,107 21,536 20,768
Integrity Management & Digital Solutions 1,695 1,114 1,034 3,759 3,329
Total Energy Services and Products 27,779 32,580 28,692 86,871 100,645
Aerospace and Defense Technologies 671 1,427 821 2,148 4,107
Unallocated Expenses 1,799 234 1,347 4,109 1,185
Total Depreciation and Amortization $ 30,249 $ 34,241 $ 30,860 $ 93,128 $ 105,937

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 have included Adjusted Net Income (Loss) and Diluted Earnings (Loss) per Share, each of which excludes the effects of certain specified items, as set forth in the tables that follow. As a result, these amounts are non-GAAP financial measures. 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 also included disclosures of Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), EBITDA Margins, 2022 Adjusted EBITDA Estimates, and Free Cash Flow, as well as the following by segment: Adjusted Operating Income and Margins, 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 define Free Cash Flow as cash flow provided by operating activities less organic capital expenditures (i.e., purchases of property and equipment other than those in business acquisitions). We have included these disclosures in this press release because EBITDA, EBITDA Margins and Free Cash Flow 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, EBITDA Margins and Free Cash Flow (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
(continued)
Adjusted Net Income (Loss) and Diluted Earnings (Loss) per Share (EPS)
For the Three Months Ended
Sep 30, 2022 Sep 30, 2021 Jun 30, 2022
Net Income (Loss) Diluted EPS Net Income (Loss) Diluted EPS Net Income (Loss) Diluted EPS
(in thousands, except per share amounts)
Net income (loss) and diluted EPS as reported in accordance with GAAP $ 18,303 $ 0.18 $ (7,370) $ (0.07) $ 3,720 $ 0.04
Pre-tax adjustments for the effects of:
Foreign currency (gains) losses 1,145 289 (928)
Total pre-tax adjustments 1,145 289 (928)
Tax effect on pre-tax adjustments at the applicable jurisdictional statutory rate in effect for respective periods (174) (152) 142
Discrete tax items:
Share-based compensation — (29) (3)
Uncertain tax positions 1,813 (123) (593)
Valuation allowances 452 5,898 3,419
Other 2,162 77 1,689
Total discrete tax adjustments 4,427 5,823 4,512
Total of adjustments 5,398 5,960 3,726
Adjusted Net Income (Loss) $ 23,701 $ 0.23 $ (1,410) $ (0.01) $ 7,446 $ 0.07
Weighted average diluted shares outstanding utilized for Adjusted Net Income (Loss) 101,310 99,797 101,430
RECONCILIATIONS OF NON-GAAP TO GAAP FINANCIAL INFORMATION
--- --- --- --- --- --- --- --- --- ---
(continued)
Adjusted Net Income (Loss) and Diluted Earnings (Loss) per Share (EPS)
For the Nine Months Ended
Sep 30, 2022 Sep 30, 2021
Net Income (Loss) Diluted EPS Net Income (Loss) Diluted EPS
(in thousands, except per share amounts)
Net income (loss) and diluted EPS as reported in accordance with GAAP $ 2,813 $ 0.03 $ (10,494) $ (0.11)
Pre-tax adjustments for the effects of:
Loss on sale of asset — 1,415
Restructuring expenses and other — 1,308
Foreign currency (gains) losses (189) 3,950
Total pre-tax adjustments (189) 6,673
Tax effect on pre-tax adjustments at the applicable jurisdictional statutory rate in effect for respective periods 58 (1,431)
Discrete tax items:
Share-based compensation 137 544
Uncertain tax positions 588 47
Valuation allowances 18,798 16,181
Other 2,529 216
Total discrete tax adjustments 22,052 16,988
Total of adjustments 21,921 22,230
Adjusted Net Income (Loss) $ 24,734 $ 0.24 $ 11,736 $ 0.12
Weighted average diluted shares outstanding utilized for Adjusted Net Income (Loss) 101,372 100,790
RECONCILIATIONS OF NON-GAAP TO GAAP FINANCIAL INFORMATION
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(continued)
EBITDA and Adjusted EBITDA and Margins
For the Three Months Ended For the Nine Months Ended
Sep 30, 2022 Sep 30, 2021 Jun 30, 2022 Sep 30, 2022 Sep 30, 2021
( in thousands)
Net income (loss) $ (7,370) $ 3,720 $ 2,813 $ (10,494)
Depreciation and amortization 30,249 34,241 30,860 93,128 105,937
Subtotal 48,552 26,871 34,580 95,941 95,443
Interest expense, net of interest income 8,156 8,954 8,852 25,655 27,888
Amortization included in interest expense 39 875 (166) 73 2,085
Provision (benefit) for income taxes 19,690 13,560 11,179 41,131 31,856
EBITDA 76,437 50,260 54,445 162,800 157,272
Adjustments for the effects of:
Loss on sale of asset — — — — 1,415
Restructuring expenses and other — — — — 1,308
Foreign currency (gains) losses 1,145 289 (928) (189) 3,950
Total of adjustments 1,145 289 (928) (189) 6,673
Adjusted EBITDA $ 50,549 $ 53,517 $ 162,611 $ 163,945
Revenue $ 466,814 $ 524,031 $ 1,529,861 $ 1,402,566
EBITDA margin % 14 % 11 % 10 % 11 % 11 %
Adjusted EBITDA margin % 14 % 11 % 10 % 11 % 12 %

All values are in US Dollars.

Free Cash Flow
For the Three Months Ended For the Nine Months Ended
Sep 30, 2022 Sep 30, 2021 Jun 30, 2022 Sep 30, 2022 Sep 30, 2021
(in thousands)
Net Income (loss) $ 18,303 $ (7,370) $ 3,720 $ 2,813 $ (10,494)
Non-cash adjustments:
Depreciation and amortization 30,249 34,241 30,860 93,128 105,937
Other non-cash 4,171 5,641 788 5,551 3,982
Other increases (decreases) in cash from operating activities 33,176 3,984 (79,349) (140,075) (14,106)
Cash flow provided by (used in) operating activities 85,899 36,496 (43,981) (38,583) 85,319
Purchases of property and equipment (19,280) (12,488) (16,495) (55,094) (35,816)
Free Cash Flow $ 66,619 $ 24,008 $ (60,476) $ (93,677) $ 49,503
RECONCILIATIONS OF NON-GAAP TO GAAP FINANCIAL INFORMATION
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(continued)
2022 Adjusted EBITDA Estimate
For the Year Ending
December 31, 2022
Low High
(in thousands)
Income (loss) before income taxes $ 61,000 $ 81,000
Depreciation and amortization 120,000 125,000
Subtotal 181,000 206,000
Interest expense, net of interest income 34,000 34,000
Adjusted EBITDA $ 215,000 $ 240,000
2022 Free Cash Flow Estimate
For the Year Ending
December 31, 2022
Low High
(in thousands)
Net income (loss) $ 20,000 $ 30,000
Depreciation and amortization 120,000 125,000
Other increases (decreases) in cash from operating activities (45,000) —
Cash flow provided by (used in) operating activities 95,000 155,000
Purchases of property and equipment (70,000) (80,000)
Free Cash Flow $ 25,000 $ 75,000
RECONCILIATIONS OF NON-GAAP TO GAAP FINANCIAL INFORMATION
--- --- --- --- --- ---
(continued)
2023 Adjusted EBITDA Estimate
For the Year Ending
December 31, 2023
Low High
(in thousands)
Income (loss) before income taxes $ 105,000 $ 155,000
Depreciation and amortization 120,000 120,000
Subtotal 225,000 275,000
Interest expense, net of interest income 35,000 35,000
Adjusted EBITDA $ 260,000 $ 310,000
2023 Free Cash Flow Estimate
For the Year Ending
December 31, 2023
(in thousands)
Net income (loss) $ 45,000
Depreciation and amortization 120,000
Other increases (decreases) in cash from operating activities 35,000
Cash flow provided by (used in) operating activities 200,000
Purchases of property and equipment (100,000)
Free Cash Flow $ 100,000
RECONCILIATIONS OF NON-GAAP TO GAAP FINANCIAL INFORMATION
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
(continued)
Adjusted Operating Income (Loss) and Margins by Segment
For the Three Months Ended September 30, 2022
SSR MP OPG IMDS ADTech Unallocated Expenses Total
( in thousands)
Operating Income (Loss) as reported in accordance with GAAP $ 4,282 $ 20,310 $ 3,091 $ 13,043 $ (30,920) $ 46,875
Adjusted Operating Income (Loss) $ 4,282 $ 20,310 $ 3,091 $ 13,043 $ (30,920) $ 46,875
Revenue $ 94,039 $ 152,987 $ 58,465 $ 84,758 $ 559,671
Operating income (loss) % as reported in accordance with GAAP 22 % 5 % 13 % 5 % 15 % 8 %
Operating income (loss) % using adjusted amounts 22 % 5 % 13 % 5 % 15 % 8 %
For the Three Months Ended September 30, 2021
SSR MP OPG IMDS ADTech Unallocated Expenses Total
( in thousands)
Operating Income (Loss) as reported in accordance with GAAP $ 809 $ 7,634 $ 5,362 $ 14,251 $ (31,820) $ 15,769
Adjusted Operating Income (Loss) $ 809 $ 7,634 $ 5,362 $ 14,251 $ (31,820) $ 15,769
Revenue $ 75,359 $ 95,580 $ 62,806 $ 89,359 $ 466,814
Operating income (loss) % as reported in accordance with GAAP 14 % 1 % 8 % 9 % 16 % 3 %
Operating income (loss) % using adjusted amounts 14 % 1 % 8 % 9 % 16 % 3 %

All values are in US Dollars.

For the Three Months Ended June 30, 2022
SSR MP OPG IMDS ADTech Unallocated Expenses Total
( in thousands)
Operating Income (Loss) as reported in accordance with GAAP $ (1,365) $ 17,535 $ 3,436 $ 8,961 $ (31,655) $ 22,850
Adjusted Operating Income (Loss) $ (1,365) $ 17,535 $ 3,436 $ 8,961 $ (31,655) $ 22,850
Revenue $ 105,456 $ 116,457 $ 59,438 $ 85,557 $ 524,031
Operating income (loss) % as reported in accordance with GAAP 17 % (1) % 15 % 6 % 10 % 4 %
Operating income (loss) % using adjusted amounts 17 % (1) % 15 % 6 % 10 % 4 %

All values are in US Dollars.

RECONCILIATIONS OF NON-GAAP TO GAAP FINANCIAL INFORMATION
(continued)
Adjusted Operating Income (Loss) and Margins by Segment
For the Nine Months Ended September 30, 2022
SSR MP OPG IMDS ADTech Unallocated Expenses Total
( in thousands)
Operating Income (Loss) as reported in accordance with GAAP $ 5,560 $ 38,511 $ 10,035 $ 33,848 $ (93,827) $ 68,686
Adjusted Operating Income (Loss) $ 5,560 $ 38,511 $ 10,035 $ 33,848 $ (93,827) $ 68,686
Revenue $ 282,187 $ 366,841 $ 174,473 $ 251,826 $ 1,529,861
Operating income (loss) % as reported in accordance with GAAP 16 % 2 % 10 % 6 % 13 % 4 %
Operating income (loss) % using adjusted amounts 16 % 2 % 10 % 6 % 13 % 4 %
For the Nine Months Ended September 30, 2021
SSR MP OPG IMDS ADTech Unallocated Expenses Total
( in thousands)
Operating Income (Loss) as reported in accordance with GAAP $ 4,352 $ 24,443 $ 12,557 $ 50,430 $ (95,273) $ 52,371
Adjustments for the effects of:
Loss on sale of asset — — — — — 1,415 1,415
Restructuring expenses and other 395 537 149 217 10 — 1,308
Total of adjustments 395 537 149 217 10 1,415 2,723
Adjusted Operating Income (Loss) $ 4,889 $ 24,592 $ 12,774 $ 50,440 $ (93,858) $ 55,094
Revenue $ 241,311 $ 292,765 $ 180,924 $ 283,366 $ 1,402,566
Operating income (loss) % as reported in accordance with GAAP 14 % 2 % 8 % 7 % 18 % 4 %
Operating income (loss) % using adjusted amounts 14 % 2 % 8 % 7 % 18 % 4 %

All values are in US Dollars.

RECONCILIATIONS OF NON-GAAP TO GAAP FINANCIAL INFORMATION
(continued)
EBITDA and Adjusted EBITDA and Margins by Segment
For the Three Months Ended September 30, 2022
SSR MP OPG IMDS ADTech Unallocated Expenses and other Total
( in thousands)
Operating Income (Loss) as reported in accordance with GAAP $ 4,282 $ 20,310 $ 3,091 $ 13,043 $ (30,920) $ 46,875
Adjustments for the effects of:
Depreciation and amortization 16,013 2,939 7,132 1,695 671 1,799 30,249
Other pre-tax — — — — — (687) (687)
EBITDA 53,082 7,221 27,442 4,786 13,714 (29,808) 76,437
Adjustments for the effects of:
Foreign currency (gains) losses — — — — — 1,145 1,145
Total of adjustments — — — — — 1,145 1,145
Adjusted EBITDA $ 7,221 $ 27,442 $ 4,786 $ 13,714 $ (28,663) $ 77,582
Revenue $ 94,039 $ 152,987 $ 58,465 $ 84,758 $ 559,671
Operating income (loss) % as reported in accordance with GAAP 22 % 5 % 13 % 5 % 15 % 8 %
EBITDA Margin 31 % 8 % 18 % 8 % 16 % 14 %
Adjusted EBITDA Margin 31 % 8 % 18 % 8 % 16 % 14 %
For the Three Months Ended September 30, 2021
SSR MP OPG IMDS ADTech Unallocated Expenses and other Total
( in thousands)
Operating Income (Loss) as reported in accordance with GAAP $ 809 $ 7,634 $ 5,362 $ 14,251 $ (31,820) $ 15,769
Adjustments for the effects of:
Depreciation and amortization 21,483 3,202 6,781 1,114 1,427 234 34,241
Other pre-tax — — — — — 250 250
EBITDA 41,016 4,011 14,415 6,476 15,678 (31,336) 50,260
Adjustments for the effects of:
Foreign currency (gains) losses — — — — — 289 289
Total of adjustments — — — — — 289 289
Adjusted EBITDA $ 4,011 $ 14,415 $ 6,476 $ 15,678 $ (31,047) $ 50,549
Revenue $ 75,359 $ 95,580 $ 62,806 $ 89,359 $ 466,814
Operating income (loss) % as reported in accordance with GAAP 14 % 1 % 8 % 9 % 16 % 3 %
EBITDA Margin 29 % 5 % 15 % 10 % 18 % 11 %
Adjusted EBITDA Margin 29 % 5 % 15 % 10 % 18 % 11 %

All values are in US Dollars.

`

RECONCILIATIONS OF NON-GAAP TO GAAP FINANCIAL INFORMATION
(continued)
EBITDA and Adjusted EBITDA and Margins by Segment
For the Three Months Ended June 30, 2022
SSR MP OPG IMDS ADTech Unallocated Expenses and other Total
( in thousands)
Operating Income (Loss) as reported in accordance with GAAP $ (1,365) $ 17,535 $ 3,436 $ 8,961 $ (31,655) $ 22,850
Adjustments for the effects of:
Depreciation and amortization 17,531 3,020 7,107 1,034 821 1,347 30,860
Other pre-tax — — — — — 735 735
EBITDA 43,469 1,655 24,642 4,470 9,782 (29,573) 54,445
Adjustments for the effects of:
Foreign currency (gains) losses — — — — — (928) (928)
Total of adjustments — — — — — (928) (928)
Adjusted EBITDA $ 1,655 $ 24,642 $ 4,470 $ 9,782 $ (30,501) $ 53,517
Revenue $ 105,456 $ 116,457 $ 59,438 $ 85,557 $ 524,031
Operating income (loss) % as reported in accordance with GAAP 17 % (1) % 15 % 6 % 10 % 4 %
EBITDA Margin 28 % 2 % 21 % 8 % 11 % 10 %
Adjusted EBITDA Margin 28 % 2 % 21 % 8 % 11 % 10 %

All values are in US Dollars.

RECONCILIATIONS OF NON-GAAP TO GAAP FINANCIAL INFORMATION
(continued)
EBITDA and Adjusted EBITDA and Margins by Segment
For the Nine Months Ended September 30, 2022
SSR MP OPG IMDS ADTech Unallocated Expenses and other Total
( in thousands)
Operating Income (Loss) as reported in accordance with GAAP $ 5,560 $ 38,511 $ 10,035 $ 33,848 $ (93,827) $ 68,686
Adjustments for the effects of:
Depreciation and amortization 52,545 9,031 21,536 3,759 2,148 4,109 93,128
Other pre-tax — — — — — 986 986
EBITDA 127,104 14,591 60,047 13,794 35,996 (88,732) 162,800
Adjustments for the effects of:
Foreign currency (gains) losses — — — — — (189) (189)
Total of adjustments — — — — — (189) (189)
Adjusted EBITDA $ 14,591 $ 60,047 $ 13,794 $ 35,996 $ (88,921) $ 162,611
Revenue $ 282,187 $ 366,841 $ 174,473 $ 251,826 $ 1,529,861
Operating income (loss) % as reported in accordance with GAAP 16 % 2 % 10 % 6 % 13 % 4 %
EBITDA Margin 28 % 5 % 16 % 8 % 14 % 11 %
Adjusted EBITDA Margin 28 % 5 % 16 % 8 % 14 % 11 %
For the Nine Months Ended September 30, 2021
SSR MP OPG IMDS ADTech Unallocated Expenses and other Total
( in thousands)
Operating Income (Loss) as reported in accordance with GAAP $ 4,352 $ 24,443 $ 12,557 $ 50,430 $ (95,273) $ 52,371
Adjustments for the effects of:
Depreciation and amortization 66,871 9,677 20,768 3,329 4,107 1,185 105,937
Other pre-tax — — — — — (1,036) (1,036)
EBITDA 122,733 14,029 45,211 15,886 54,537 (95,124) 157,272
Adjustments for the effects of:
Loss on sale of asset — — — — — 1,415 1,415
Restructuring expenses and other 395 537 149 217 10 — 1,308
Foreign currency (gains) losses — — — — — 3,950 3,950
Total of adjustments 395 537 149 217 10 5,365 6,673
Adjusted EBITDA $ 14,566 $ 45,360 $ 16,103 $ 54,547 $ (89,759) $ 163,945
Revenue $ 241,311 $ 292,765 $ 180,924 $ 283,366 $ 1,402,566
Operating income (loss) % as reported in accordance with GAAP 14 % 2 % 8 % 7 % 18 % 4 %
EBITDA Margin 30 % 6 % 15 % 9 % 19 % 11 %
Adjusted EBITDA Margin 30 % 6 % 15 % 9 % 19 % 12 %

All values are in US Dollars.

18

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