8-K
OCEANEERING INTERNATIONAL INC (OII)
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): February 22, 2024
OCEANEERING INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
| 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
N/A
(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 February 22, 2024, Oceaneering International, Inc. ("Oceaneering" or "we") issued a press release announcing Oceaneering's earnings for the fourth quarter ended December 31, 2023. 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., datedFebruary22, 2024. |
|---|---|
| 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: | February 22, 2024 | By: | /S/ CATHERINE E. DUNN |
| Catherine E. Dunn | |||
| Vice President and Chief Accounting Officer |
Document
Exhibit 99.1
Oceaneering Reports Fourth Quarter 2023 Results
HOUSTON, February 22, 2024 – Oceaneering International, Inc. ("Oceaneering") (NYSE:OII) today reported net income of $44.5 million, or $0.43 per share, on revenue of $655 million for the three months ended December 31, 2023. Adjusted net income was $19.4 million, or $0.19 per share, reflecting the impact of $(23.7) million benefit from discrete tax adjustments, primarily due to changes in valuation allowances, uncertain tax positions and prior year estimates; $2.3 million of pre-tax adjustments associated with foreign exchange gains recognized during the quarter; and $0.9 million tax effect on adjustments associated with foreign exchange gains.
Adjusted 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, 2024 EBITDA and 2024 Free Cash Flow Estimates, 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 Year Ended | |||||||||
| Dec 31, | Sep 30, | Dec 31, | ||||||||
| 2023 | 2022 | 2023 | 2023 | 2022 | ||||||
| Revenue | $ | 654,629 | $ | 536,223 | $ | 635,180 | $ | 2,424,706 | $ | 2,066,084 |
| Gross Margin | 105,629 | 90,102 | 114,697 | 398,971 | 307,377 | |||||
| Income (Loss) from Operations | 47,450 | 42,177 | 57,929 | 181,328 | 110,863 | |||||
| Net Income (Loss) | 44,529 | 23,128 | 29,812 | 97,403 | 25,941 | |||||
| Diluted Earnings (Loss) Per Share | $ | 0.43 | $ | 0.23 | $ | 0.29 | $ | 0.95 | $ | 0.26 |
For the fourth quarter of 2023:
•Net income was $44.5 million and consolidated adjusted EBITDA was $75.1 million
•Cash flow provided by operating activities was $153 million and free cash flow was $119 million, with an ending cash position of $462 million
•2024 debt maturity was eliminated through a series of transactions
•Secured consolidated order intake with expected contract value of $739 million
As of December 31, 2023:
•Remotely Operated Vehicles (ROV): fleet count was 250; Q4 utilization was 68%; and Q4 average revenue per day on hire was $9,618
•Manufactured Products backlog was $622 million
•Nearest debt maturity is $500 million in February 2028
Guidance for 2024:
•Net income is expected in the range of $125 million to $155 million
•Consolidated EBITDA is expected in the range of $330 million to $380 million
•Free cash flow generation is expected in the range of $110 million to $150 million
•Capital expenditures are expected in the range of $110 million to $130 million
•First quarter consolidated EBITDA is expected in the range of $50 million to $60 million
Roderick A. Larson, President and Chief Executive Officer of Oceaneering, stated, "2023 consolidated revenue increased 17% over 2022 to $2.4 billion, driving our fifth consecutive year of improved adjusted EBITDA performance. For the full year of 2023, our adjusted EBITDA of $289 million was slightly above the midpoint of our most recent guidance range and we generated $109 million of free cash flow. All of our operating segments, except for Integrity Management and Digital Solutions (IMDS), achieved improved sequential annual operating results, led by Subsea Robotics (SSR) and Manufactured Products. I am grateful to our Oceaneers for their dedication and commitment to excellence in delivering these results.
"2023 cash flow from operations increased to $210 million, compared to $121 million in 2022. Capital expenditures also increased, from $81.0 million in 2022 to $101 million in 2023. Free cash flow increased to $109 million, compared to $39.8 million in 2022. Our ability to generate substantial levels of free cash flow over the last several years enabled us to retire our 2024 senior notes during the year, using proceeds from our 2023 debt offering together with cash on hand. As a result, we reduced Oceaneering’s long-term debt from $700 million at the end of 2022 to $500 million at the end of 2023 and extended the term of our credit facility to April 2027. As reflected in the 2024 guidance above, we expect to see continuing improvement in our financial performance and condition, including another year of meaningful free cash flow generation.
“Our fourth quarter 2023 performance produced consolidated adjusted EBITDA of $75.1 million, which was above the mid-point of the implied guidance range provided at the beginning of the quarter and slightly above consensus estimates."
Fourth Quarter 2023 Segment Results
SSR's fourth quarter revenue and adjusted EBITDA represented its best quarter in 2023. Sequentially, operating income and revenue improved slightly, with lower activity levels in the ROV and survey businesses being offset by continuing improvement in ROV pricing. As a result, SSR EBITDA margin of 32% during the fourth quarter was above the 31% achieved during the third quarter of 2023. Revenue split was 76% from the ROV business and 24% from the combined tooling and survey businesses.
ROV days on hire declined 2% as compared to the third quarter of 2023. Increased drill support days were more than offset by lower vessel-based days due to normal seasonality. Fourth quarter average ROV revenue per day on hire of $9,618 was 3% higher than in the third quarter of 2023.
Manufactured Products revenue of $133 million was 8% higher than in the third quarter of 2023 on increased product throughput in Oceaneering Mobile Robotics. Operating income and margin of $5.4 million and 4%, respectively, declined sequentially due to changes in product mix. As recently announced, Manufactured Products had solid bookings during the fourth quarter of approximately $200 million and ended 2023 with a backlog of $622 million, compared to the September 30, 2023 backlog of $556 million. The book-to-bill ratio was 1.31 for the full year of 2023.
Offshore Projects Group (OPG) operating income declined sequentially on higher revenue. Revenue benefited from the carryover of international work from the third quarter along with more seasonal activity in the Gulf of Mexico than originally expected. Operating income margin of 9% declined from
18% achieved in the third quarter of 2023, due primarily to changes in project mix and pricing for Gulf of Mexico work.
IMDS revenue and operating income were essentially flat period over period. Operating income margin of 5% for the fourth quarter was flat as compared to the third quarter of 2023.
Aerospace and Defense Technologies (ADTech) fourth quarter revenue and operating income declined from the third quarter of 2023. ADTech operating income margin declined sequentially to 12%, due to changes in project mix.
Fourth quarter 2023 Unallocated Expenses of $37.9 million were lower than the third quarter.
Full Year and First Quarter 2024 Guidance
2024 financial results are forecasted to improve year over year based on 2023 year-end backlog and continuing supportive market fundamentals. As outlined in the guidance above, EBITDA is expected to be in the range of $330 million to $380 million, with increased EBITDA and operating income from each operating segment, including higher margins in the SSR and OPG segments, and relatively stable margins in the Manufactured Products, IMDS and ADTech segments. At the midpoint of this range, 2024 EBITDA would represent a 23% increase over 2023 adjusted EBITDA. Free cash flow for 2024 is expected to be in the range of $110 million to $150 million.
For the first quarter 2024, EBITDA is forecasted to be in the range of $50 million to $60 million. The decrease from the fourth quarter of 2023 is primarily due to the timing of vessel charters and two vessels undergoing planned, regulatory dry docks during the first quarter, leading to fewer available vessel days in the first quarter for OPG.
Conference Call Details
Oceaneering has scheduled a conference call and webcast on Friday, February 23, 2024 at 10:00 a.m. Central Time, to discuss its results for the fourth quarter and full year 2023, as well as more detailed guidance for the full year and first quarter 2024. Interested parties may listen to the call through a webcast link posted in the Investor Relations section of Oceaneering's website. A replay of the conference call will be made available on the website approximately two hours following the conclusion of the live call.
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: full-year 2024 guidance ranges for net income, consolidated EBITDA, free cash flow generation, capital expenditures and Unallocated Expenses; first quarter 2024 guidance for consolidated EBITDA, operating segment revenues, operating results and operating profitability; full-year 2024 sequential activity and operating performance across each operating segment, led by SSR and OPG; expectation that liquidity will support continued business growth; expectation that 2024 will generate substantial free cash flow; assumptions regarding continued improvement in pricing and margins in the energy-focused businesses and stable pricing and margins in the government-focused businesses; expectations for improved financial performance and condition in 2024; expectations regarding new contracts; and the characterization, whether positive or otherwise, of market fundamentals, conditions and dynamics, robotics markets, offshore energy activity levels (including by geographic location), pricing levels, day rates, ROV days on hire, average ROV revenue per day on hire, vessel utilization, growth, bidding activity, outlook, performance, opportunities and future financials, including as increasing, favorable, positive, encouraging, improving, seasonal, strong, supportive, robust, meaningful, healthy or significant (which is used herein to indicate a change of 20% or greater).
The forward-looking statements included in this release are based on Oceaneering's 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; the indirect consequences of climate change and climate-related business trends; 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; 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 data privacy and security laws, regulations and standards; 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:
investorrelations@oceaneering.com
Hilary Frisbie
Senior Director, Investor Relations
Oceaneering International, Inc.
713-329-4755
Mark Peterson
Vice President, Corporate Development and Investor Relations
Oceaneering International, Inc.
713-329-4507
- Tables follow on next page -
| OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||||
| Dec 31, 2023 | Dec 31, 2022 | |||||||||||
| (in thousands) | ||||||||||||
| ASSETS | ||||||||||||
| Current assets (including cash and cash equivalents of 461,566 and 568,745) | $ | 1,305,659 | $ | 1,297,060 | ||||||||
| Net property and equipment | 424,293 | 438,449 | ||||||||||
| Other assets | 509,054 | 296,174 | ||||||||||
| Total Assets | $ | 2,239,006 | $ | 2,031,683 | ||||||||
| LIABILITIES AND EQUITY | ||||||||||||
| Current liabilities | $ | 732,476 | $ | 568,414 | ||||||||
| Long-term debt | 477,058 | 700,973 | ||||||||||
| Other long-term liabilities | 395,389 | 236,492 | ||||||||||
| Equity | 634,083 | 525,804 | ||||||||||
| Total Liabilities and Equity | $ | 2,239,006 | $ | 2,031,683 | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
| For the Three Months Ended | For the Year Ended | |||||||||||
| Dec 31, 2023 | Dec 31, 2022 | Sep 30, 2023 | Dec 31, 2023 | Dec 31, 2022 | ||||||||
| (in thousands, except per share amounts) | ||||||||||||
| Revenue | $ | 654,629 | $ | 536,223 | $ | 635,180 | $ | 2,424,706 | $ | 2,066,084 | ||
| Cost of services and products | 549,000 | 446,121 | 520,483 | 2,025,735 | 1,758,707 | |||||||
| 105,629 | 90,102 | 114,697 | 398,971 | 307,377 | ||||||||
| Selling, general and administrative expense | 58,179 | 47,925 | 56,768 | 217,643 | 196,514 | |||||||
| 47,450 | 42,177 | 57,929 | 181,328 | 110,863 | ||||||||
| Interest income | 3,081 | 2,749 | 3,724 | 15,425 | 5,708 | |||||||
| Interest expense | (7,921) | (9,601) | (9,802) | (36,523) | (38,215) | |||||||
| Equity in income (losses) of unconsolidated affiliates | 445 | 599 | 498 | 2,061 | 1,707 | |||||||
| Other income (expense), net | 3,564 | (816) | 968 | (1,236) | (1,011) | |||||||
| 46,619 | 35,108 | 53,317 | 161,055 | 79,052 | ||||||||
| Provision (benefit) for income taxes | 2,090 | 11,980 | 23,505 | 63,652 | 53,111 | |||||||
| $ | 44,529 | $ | 23,128 | $ | 29,812 | $ | 97,403 | $ | 25,941 | |||
| Weighted average diluted shares outstanding | 102,366 | 101,597 | 102,206 | 102,156 | 101,447 | |||||||
| Diluted earnings (loss) per share | $ | 0.43 | $ | 0.23 | $ | 0.29 | $ | 0.95 | $ | 0.26 | ||
| 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 Year Ended | |||||||||||||||||
| Dec 31, 2022 | Sep 30, 2023 | Dec 31, 2023 | Dec 31, 2022 | ||||||||||||||
| ( in thousands) | |||||||||||||||||
| Subsea Robotics | |||||||||||||||||
| Revenue | 199,505 | $ | 167,387 | $ | 197,343 | $ | 752,521 | $ | 621,921 | ||||||||
| Gross margin | 64,085 | $ | 54,013 | $ | 60,045 | $ | 221,965 | $ | 160,527 | ||||||||
| Operating income (loss) | 50,594 | $ | 43,689 | $ | 47,818 | $ | 174,293 | $ | 118,248 | ||||||||
| Operating income (loss) % | % | 26 | % | 24 | % | 23 | % | 19 | % | ||||||||
| ROV days available | 23,000 | 23,000 | 91,250 | 91,250 | |||||||||||||
| ROV days utilized | 14,350 | 15,932 | 61,874 | 56,231 | |||||||||||||
| ROV utilization | % | 62 | % | 69 | % | 68 | % | 62 | % | ||||||||
| Manufactured Products | |||||||||||||||||
| Revenue | 132,994 | $ | 100,174 | $ | 122,877 | $ | 493,692 | $ | 382,361 | ||||||||
| Gross margin | 13,923 | $ | 14,744 | $ | 16,916 | $ | 69,613 | $ | 45,834 | ||||||||
| Operating income (loss) | 5,435 | $ | 6,132 | $ | 8,229 | $ | 35,551 | $ | 11,692 | ||||||||
| Operating income (loss) % | % | 6 | % | 7 | % | 7 | % | 3 | % | ||||||||
| Backlog at end of period | 622,000 | $ | 467,000 | $ | 556,000 | $ | 622,000 | $ | 467,000 | ||||||||
| Offshore Projects Group | |||||||||||||||||
| Revenue | 161,239 | $ | 122,476 | $ | 150,273 | $ | 546,366 | $ | 489,317 | ||||||||
| Gross margin | 26,269 | $ | 17,548 | $ | 33,045 | $ | 96,940 | $ | 78,373 | ||||||||
| Operating income (loss) | 15,155 | $ | 10,745 | $ | 26,745 | $ | 64,546 | $ | 49,256 | ||||||||
| Operating income (loss) % | % | 9 | % | 18 | % | 12 | % | 10 | % | ||||||||
| Integrity Management & Digital Solutions | |||||||||||||||||
| Revenue | 65,977 | $ | 55,411 | $ | 66,056 | $ | 255,282 | $ | 229,884 | ||||||||
| Gross margin | 9,914 | $ | 9,932 | $ | 9,961 | $ | 38,988 | $ | 36,724 | ||||||||
| Operating income (loss) | 3,205 | $ | 4,866 | $ | 3,242 | $ | 13,373 | $ | 14,901 | ||||||||
| Operating income (loss) % | % | 9 | % | 5 | % | 5 | % | 6 | % | ||||||||
| Aerospace and Defense Technologies | |||||||||||||||||
| Revenue | 94,914 | $ | 90,775 | $ | 98,631 | $ | 376,845 | $ | 342,601 | ||||||||
| Gross margin | 17,350 | $ | 16,402 | $ | 20,295 | $ | 70,420 | $ | 68,447 | ||||||||
| Operating income (loss) | 11,010 | $ | 10,320 | $ | 14,140 | $ | 45,003 | $ | 44,168 | ||||||||
| Operating income (loss) % | % | 11 | % | 14 | % | 12 | % | 13 | % | ||||||||
| Unallocated Expenses | |||||||||||||||||
| Gross margin | (25,912) | $ | (22,537) | $ | (25,565) | $ | (98,955) | $ | (82,528) | ||||||||
| Operating income (loss) | (37,949) | $ | (33,575) | $ | (42,245) | $ | (151,438) | $ | (127,402) | ||||||||
| Total | |||||||||||||||||
| Revenue | 654,629 | $ | 536,223 | $ | 635,180 | $ | 2,424,706 | $ | 2,066,084 | ||||||||
| Gross margin | 105,629 | $ | 90,102 | $ | 114,697 | $ | 398,971 | $ | 307,377 | ||||||||
| Operating income (loss) | 47,450 | $ | 42,177 | $ | 57,929 | $ | 181,328 | $ | 110,863 | ||||||||
| Operating income (loss) % | % | 8 | % | 9 | % | 7 | % | 5 | % | ||||||||
| 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 Year Ended | ||||||||||
| Dec 31, 2023 | Dec 31, 2022 | Sep 30, 2023 | Dec 31, 2023 | Dec 31, 2022 | |||||||
| (in thousands) | |||||||||||
| Capital Expenditures, including Acquisitions | $ | 34,045 | $ | 25,949 | $ | 25,945 | $ | 100,726 | $ | 81,043 | |
| Depreciation and Amortization: | |||||||||||
| Energy Services and Products | |||||||||||
| Subsea Robotics | $ | 13,264 | $ | 15,139 | $ | 12,805 | $ | 54,365 | $ | 67,684 | |
| Manufactured Products | 3,096 | 2,915 | 3,067 | 12,220 | 11,946 | ||||||
| Offshore Projects Group | 6,921 | 7,024 | 6,931 | 27,956 | 28,560 | ||||||
| Integrity Management & Digital Solutions | 902 | 840 | 909 | 3,608 | 4,599 | ||||||
| Total Energy Services and Products | 24,183 | 25,918 | 23,712 | 98,149 | 112,789 | ||||||
| Aerospace and Defense Technologies | 619 | 705 | 600 | 2,504 | 2,853 | ||||||
| Unallocated Expenses | 695 | 1,218 | 1,284 | 4,307 | 5,327 | ||||||
| Total Depreciation and Amortization | $ | 25,497 | $ | 27,841 | $ | 25,596 | $ | 104,960 | $ | 120,969 |
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 certain rules and regulations promulgated by the Securities and Exchange Commission). 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, 2024 Adjusted EBITDA Estimates, and Free Cash Flow, as well as the following by segment: EBITDA, EBITDA Margins, Adjusted EBITDA and Adjusted EBITDA Margins. We define EBITDA Margin as EBITDA divided by revenue. Adjusted EBITDA and Adjusted EBITDA Margins 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 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 purposes and for comparing our financial performance with the performance of other companies in our industry, and the adjusted amounts thereof 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 | ||||||||||||||||
| Dec 31, 2023 | Dec 31, 2022 | Sep 30, 2023 | ||||||||||||||
| 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 | $ | 44,529 | $ | 0.43 | $ | 23,128 | $ | 0.23 | $ | 29,812 | $ | 0.29 | ||||
| Pre-tax adjustments for the effects of: | ||||||||||||||||
| Foreign currency (gains) losses | (2,275) | 193 | (944) | |||||||||||||
| Total pre-tax adjustments | (2,275) | 193 | (944) | |||||||||||||
| Tax effect on pre-tax adjustments at the applicable jurisdictional statutory rate in effect for respective periods | 851 | (333) | 615 | |||||||||||||
| Discrete tax items: | ||||||||||||||||
| Share-based compensation | (58) | — | — | |||||||||||||
| Uncertain tax positions | (2,036) | (669) | 13,076 | |||||||||||||
| Valuation allowances | (20,350) | (7,679) | 9,353 | |||||||||||||
| Other | (1,230) | (8,263) | (13,430) | |||||||||||||
| Total discrete tax adjustments | (23,674) | (16,611) | 8,999 | |||||||||||||
| Total of adjustments | (25,098) | (16,751) | 8,670 | |||||||||||||
| Adjusted Net Income (Loss) | $ | 19,431 | $ | 0.19 | $ | 6,377 | $ | 0.06 | $ | 38,482 | $ | 0.38 | ||||
| Weighted average diluted shares outstanding utilized for Adjusted Net Income (Loss) | 102,366 | 101,597 | 102,206 | |||||||||||||
| RECONCILIATIONS OF NON-GAAP TO GAAP FINANCIAL INFORMATION | ||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||||
| (continued) | ||||||||||||||||
| Adjusted Net Income (Loss) and Diluted Earnings (Loss) per Share (EPS) | ||||||||||||||||
| For the Year Ended | ||||||||||||||||
| Dec 31, 2023 | Dec 31, 2022 | |||||||||||||||
| 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 | $ | 97,403 | $ | 0.95 | $ | 25,941 | $ | 0.26 | ||||||||
| Pre-tax adjustments for the effects of: | ||||||||||||||||
| Foreign currency (gains) losses | 1,359 | 4 | ||||||||||||||
| Total pre-tax adjustments | 1,359 | 4 | ||||||||||||||
| Tax effect on pre-tax adjustments at the applicable jurisdictional statutory rate in effect for respective periods | (837) | (275) | ||||||||||||||
| Discrete tax items: | ||||||||||||||||
| Share-based compensation | (1,428) | 137 | ||||||||||||||
| Uncertain tax positions | 15,441 | (81) | ||||||||||||||
| Valuation allowances | (16,099) | 11,119 | ||||||||||||||
| Other | (13,890) | (5,734) | ||||||||||||||
| Total discrete tax adjustments | (15,976) | 5,441 | ||||||||||||||
| Total of adjustments | (15,454) | 5,170 | ||||||||||||||
| Adjusted Net Income (Loss) | $ | 81,949 | $ | 0.80 | $ | 31,111 | $ | 0.31 | ||||||||
| Weighted average diluted shares outstanding utilized for Adjusted Net Income (Loss) | 102,156 | 101,447 | ||||||||||||||
| RECONCILIATIONS OF NON-GAAP TO GAAP FINANCIAL INFORMATION | ||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (continued) | ||||||||||||||||
| EBITDA and Adjusted EBITDA and Margins | ||||||||||||||||
| For the Three Months Ended | For the Year Ended | |||||||||||||||
| Dec 31, 2023 | Dec 31, 2022 | Sep 30, 2023 | Dec 31, 2023 | Dec 31, 2022 | ||||||||||||
| ( in thousands) | ||||||||||||||||
| Net income (loss) | $ | 23,128 | $ | 29,812 | $ | 97,403 | $ | 25,941 | ||||||||
| Depreciation and amortization | 25,497 | 27,841 | 25,596 | 104,960 | 120,969 | |||||||||||
| Subtotal | 70,026 | 50,969 | 55,408 | 202,363 | 146,910 | |||||||||||
| Interest expense, net of interest income | 4,840 | 6,852 | 6,078 | 21,098 | 32,507 | |||||||||||
| Amortization included in interest expense | 460 | 33 | 51 | 574 | 106 | |||||||||||
| Provision (benefit) for income taxes | 2,090 | 11,980 | 23,505 | 63,652 | 53,111 | |||||||||||
| EBITDA | 77,416 | 69,834 | 85,042 | 287,687 | 232,634 | |||||||||||
| Adjustments for the effects of: | ||||||||||||||||
| Foreign currency (gains) losses | (2,275) | 193 | (944) | 1,359 | 4 | |||||||||||
| Total of adjustments | (2,275) | 193 | (944) | 1,359 | 4 | |||||||||||
| Adjusted EBITDA | $ | 70,027 | $ | 84,098 | $ | 289,046 | $ | 232,638 | ||||||||
| Revenue | $ | 536,223 | $ | 635,180 | $ | 2,424,706 | $ | 2,066,084 | ||||||||
| EBITDA margin % | 12 | % | 13 | % | 13 | % | 12 | % | 11 | % | ||||||
| Adjusted EBITDA margin % | 11 | % | 13 | % | 13 | % | 12 | % | 11 | % |
All values are in US Dollars.
| Free Cash Flow | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| For the Three Months Ended | For the Year Ended | ||||||||||||||||||||
| Dec 31, 2023 | Dec 31, 2022 | Sep 30, 2023 | Dec 31, 2023 | Dec 31, 2022 | |||||||||||||||||
| (in thousands) | |||||||||||||||||||||
| Net Income (loss) | $ | 44,529 | $ | 23,128 | $ | 29,812 | $ | 97,403 | $ | 25,941 | |||||||||||
| Non-cash adjustments: | |||||||||||||||||||||
| Depreciation and amortization | 25,497 | 27,841 | 25,596 | 104,960 | 120,969 | ||||||||||||||||
| Other non-cash | (22,486) | 2,991 | 6,381 | (13,370) | 8,542 | ||||||||||||||||
| Other increases (decreases) in cash from operating activities | 105,275 | 105,506 | 17,819 | 20,962 | (34,569) | ||||||||||||||||
| Cash flow provided by (used in) operating activities | 152,815 | 159,466 | 79,608 | 209,955 | 120,883 | ||||||||||||||||
| Purchases of property and equipment | (34,045) | (25,949) | (25,945) | (100,726) | (81,043) | ||||||||||||||||
| Free Cash Flow | $ | 118,770 | $ | 133,517 | $ | 53,663 | $ | 109,229 | $ | 39,840 | |||||||||||
| RECONCILIATIONS OF NON-GAAP TO GAAP FINANCIAL INFORMATION | |||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | ||||||||||||||||
| (continued) | |||||||||||||||||||||
| 2024 EBITDA Estimates | |||||||||||||||||||||
| For the Three Months Ending | |||||||||||||||||||||
| March 31, 2024 | |||||||||||||||||||||
| Low | High | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||
| Income (loss) before income taxes | $ | 18,000 | $ | 26,000 | |||||||||||||||||
| Depreciation and amortization | 25,000 | 26,000 | |||||||||||||||||||
| Subtotal | 43,000 | 52,000 | |||||||||||||||||||
| Interest expense, net of interest income | 7,000 | 8,000 | |||||||||||||||||||
| EBITDA | $ | 50,000 | $ | 60,000 | |||||||||||||||||
| For the Year Ending | |||||||||||||||||||||
| December 31, 2024 | |||||||||||||||||||||
| Low | High | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||
| Income (loss) before income taxes | $ | 206,000 | $ | 242,000 | |||||||||||||||||
| Depreciation and amortization | 100,000 | 110,000 | |||||||||||||||||||
| Subtotal | 306,000 | 352,000 | |||||||||||||||||||
| Interest expense, net of interest income | 24,000 | 28,000 | |||||||||||||||||||
| EBITDA | $ | 330,000 | $ | 380,000 | |||||||||||||||||
| 2024 Free Cash Flow Estimate | |||||||||||||||||||||
| For the Year Ending | |||||||||||||||||||||
| December 31, 2024 | |||||||||||||||||||||
| Low | High | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||
| Net income (loss) | $ | 125,000 | $ | 155,000 | |||||||||||||||||
| Depreciation and amortization | 100,000 | 110,000 | |||||||||||||||||||
| Other increases (decreases) in cash from operating activities | (5,000) | 15,000 | |||||||||||||||||||
| Cash flow provided by (used in) operating activities | 220,000 | 280,000 | |||||||||||||||||||
| Purchases of property and equipment | (110,000) | (130,000) | |||||||||||||||||||
| Free Cash Flow | $ | 110,000 | $ | 150,000 | |||||||||||||||||
| RECONCILIATIONS OF NON-GAAP TO GAAP FINANCIAL INFORMATION | |||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (continued) | |||||||||||||||||||||
| EBITDA and Adjusted EBITDA and Margins by Segment | |||||||||||||||||||||
| For the Three Months Ended December 31, 2023 | |||||||||||||||||||||
| SSR | MP | OPG | IMDS | ADTech | Unallocated Expenses and other | Total | |||||||||||||||
| ( in thousands) | |||||||||||||||||||||
| Operating Income (Loss) as reported in accordance with GAAP | $ | 5,435 | $ | 15,155 | $ | 3,205 | $ | 11,010 | $ | (37,949) | $ | 47,450 | |||||||||
| Adjustments for the effects of: | |||||||||||||||||||||
| Depreciation and amortization | 13,264 | 3,096 | 6,921 | 902 | 619 | 695 | 25,497 | ||||||||||||||
| Other pre-tax | — | — | — | — | — | 4,469 | 4,469 | ||||||||||||||
| EBITDA | 63,858 | 8,531 | 22,076 | 4,107 | 11,629 | (32,785) | 77,416 | ||||||||||||||
| Adjustments for the effects of: | |||||||||||||||||||||
| Foreign currency (gains) losses | — | — | — | — | — | (2,275) | (2,275) | ||||||||||||||
| Total of adjustments | — | — | — | — | — | (2,275) | (2,275) | ||||||||||||||
| Adjusted EBITDA | $ | 8,531 | $ | 22,076 | $ | 4,107 | $ | 11,629 | $ | (35,060) | $ | 75,141 | |||||||||
| Revenue | $ | 132,994 | $ | 161,239 | $ | 65,977 | $ | 94,914 | $ | 654,629 | |||||||||||
| Operating income (loss) % as reported in accordance with GAAP | 25 | % | 4 | % | 9 | % | 5 | % | 12 | % | 7 | % | |||||||||
| EBITDA Margin | 32 | % | 6 | % | 14 | % | 6 | % | 12 | % | 12 | % | |||||||||
| Adjusted EBITDA Margin | 32 | % | 6 | % | 14 | % | 6 | % | 12 | % | 11 | % | |||||||||
| For the Three Months Ended December 31, 2022 | |||||||||||||||||||||
| SSR | MP | OPG | IMDS | ADTech | Unallocated Expenses and other | Total | |||||||||||||||
| ( in thousands) | |||||||||||||||||||||
| Operating Income (Loss) as reported in accordance with GAAP | $ | 6,132 | $ | 10,745 | $ | 4,866 | $ | 10,320 | $ | (33,575) | $ | 42,177 | |||||||||
| Adjustments for the effects of: | |||||||||||||||||||||
| Depreciation and amortization | 15,139 | 2,915 | 7,024 | 840 | 705 | 1,218 | 27,841 | ||||||||||||||
| Other pre-tax | — | — | — | — | — | (184) | (184) | ||||||||||||||
| EBITDA | 58,828 | 9,047 | 17,769 | 5,706 | 11,025 | (32,541) | 69,834 | ||||||||||||||
| Adjustments for the effects of: | |||||||||||||||||||||
| Foreign currency (gains) losses | — | — | — | — | — | 193 | 193 | ||||||||||||||
| Total of adjustments | — | — | — | — | — | 193 | 193 | ||||||||||||||
| Adjusted EBITDA | $ | 9,047 | $ | 17,769 | $ | 5,706 | $ | 11,025 | $ | (32,348) | $ | 70,027 | |||||||||
| Revenue | $ | 100,174 | $ | 122,476 | $ | 55,411 | $ | 90,775 | $ | 536,223 | |||||||||||
| Operating income (loss) % as reported in accordance with GAAP | 26 | % | 6 | % | 9 | % | 9 | % | 11 | % | 8 | % | |||||||||
| EBITDA Margin | 35 | % | 9 | % | 15 | % | 10 | % | 12 | % | 13 | % | |||||||||
| Adjusted EBITDA Margin | 35 | % | 9 | % | 15 | % | 10 | % | 12 | % | 13 | % |
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, 2023 | |||||||||||||||||||||
| SSR | MP | OPG | IMDS | ADTech | Unallocated Expenses and other | Total | |||||||||||||||
| ( in thousands) | |||||||||||||||||||||
| Operating Income (Loss) as reported in accordance with GAAP | $ | 8,229 | $ | 26,745 | $ | 3,242 | $ | 14,140 | $ | (42,245) | $ | 57,929 | |||||||||
| Adjustments for the effects of: | |||||||||||||||||||||
| Depreciation and amortization | 12,805 | 3,067 | 6,931 | 909 | 600 | 1,284 | 25,596 | ||||||||||||||
| Other pre-tax | — | — | — | — | — | 1,517 | 1,517 | ||||||||||||||
| EBITDA | 60,623 | 11,296 | 33,676 | 4,151 | 14,740 | (39,444) | 85,042 | ||||||||||||||
| Adjustments for the effects of: | |||||||||||||||||||||
| Foreign currency (gains) losses | — | — | — | — | — | (944) | (944) | ||||||||||||||
| Total of adjustments | — | — | — | — | — | (944) | (944) | ||||||||||||||
| Adjusted EBITDA | $ | 11,296 | $ | 33,676 | $ | 4,151 | $ | 14,740 | $ | (40,388) | $ | 84,098 | |||||||||
| Revenue | $ | 122,877 | $ | 150,273 | $ | 66,056 | $ | 98,631 | $ | 635,180 | |||||||||||
| Operating income (loss) % as reported in accordance with GAAP | 24 | % | 7 | % | 18 | % | 5 | % | 14 | % | 9 | % | |||||||||
| EBITDA Margin | 31 | % | 9 | % | 22 | % | 6 | % | 15 | % | 13 | % | |||||||||
| Adjusted EBITDA Margin | 31 | % | 9 | % | 22 | % | 6 | % | 15 | % | 13 | % |
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 Year Ended December 31, 2023 | |||||||||||||||||||||
| SSR | MP | OPG | IMDS | ADTech | Unallocated Expenses and other | Total | |||||||||||||||
| ( in thousands) | |||||||||||||||||||||
| Operating Income (Loss) as reported in accordance with GAAP | $ | 35,551 | $ | 64,546 | $ | 13,373 | $ | 45,003 | $ | (151,438) | $ | 181,328 | |||||||||
| Adjustments for the effects of: | |||||||||||||||||||||
| Depreciation and amortization | 54,365 | 12,220 | 27,956 | 3,608 | 2,504 | 4,307 | 104,960 | ||||||||||||||
| Other pre-tax | — | — | — | — | — | 1,399 | 1,399 | ||||||||||||||
| EBITDA | 228,658 | 47,771 | 92,502 | 16,981 | 47,507 | (145,732) | 287,687 | ||||||||||||||
| Adjustments for the effects of: | |||||||||||||||||||||
| Foreign currency (gains) losses | — | — | — | — | — | 1,359 | 1,359 | ||||||||||||||
| Total of adjustments | — | — | — | — | — | 1,359 | 1,359 | ||||||||||||||
| Adjusted EBITDA | $ | 47,771 | $ | 92,502 | $ | 16,981 | $ | 47,507 | $ | (144,373) | $ | 289,046 | |||||||||
| Revenue | $ | 493,692 | $ | 546,366 | $ | 255,282 | $ | 376,845 | $ | 2,424,706 | |||||||||||
| Operating income (loss) % as reported in accordance with GAAP | 23 | % | 7 | % | 12 | % | 5 | % | 12 | % | 7 | % | |||||||||
| EBITDA Margin | 30 | % | 10 | % | 17 | % | 7 | % | 13 | % | 12 | % | |||||||||
| Adjusted EBITDA Margin | 30 | % | 10 | % | 17 | % | 7 | % | 13 | % | 12 | % | |||||||||
| For the Year Ended December 31, 2022 | |||||||||||||||||||||
| SSR | MP | OPG | IMDS | ADTech | Unallocated Expenses and other | Total | |||||||||||||||
| ( in thousands) | |||||||||||||||||||||
| Operating Income (Loss) as reported in accordance with GAAP | $ | 11,692 | $ | 49,256 | $ | 14,901 | $ | 44,168 | $ | (127,402) | $ | 110,863 | |||||||||
| Adjustments for the effects of: | |||||||||||||||||||||
| Depreciation and amortization | 67,684 | 11,946 | 28,560 | 4,599 | 2,853 | 5,327 | 120,969 | ||||||||||||||
| Other pre-tax | — | — | — | — | — | 802 | 802 | ||||||||||||||
| EBITDA | 185,932 | 23,638 | 77,816 | 19,500 | 47,021 | (121,273) | 232,634 | ||||||||||||||
| Adjustments for the effects of: | |||||||||||||||||||||
| Foreign currency (gains) losses | — | — | — | — | — | 4 | 4 | ||||||||||||||
| Total of adjustments | — | — | — | — | — | 4 | 4 | ||||||||||||||
| Adjusted EBITDA | $ | 23,638 | $ | 77,816 | $ | 19,500 | $ | 47,021 | $ | (121,269) | $ | 232,638 | |||||||||
| Revenue | $ | 382,361 | $ | 489,317 | $ | 229,884 | $ | 342,601 | $ | 2,066,084 | |||||||||||
| Operating income (loss) % as reported in accordance with GAAP | 19 | % | 3 | % | 10 | % | 6 | % | 13 | % | 5 | % | |||||||||
| EBITDA Margin | 30 | % | 6 | % | 16 | % | 8 | % | 14 | % | 11 | % | |||||||||
| Adjusted EBITDA Margin | 30 | % | 6 | % | 16 | % | 8 | % | 14 | % | 11 | % |
All values are in US Dollars.
15