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): October 23, 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 October 23, 2024, Oceaneering International, Inc. ("Oceaneering" or "we") issued a press release announcing Oceaneering's earnings for the third quarter ended September 30, 2024. 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., dated October 23, 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: | October 23, 2024 | By: | /S/ CATHERINE E. DUNN |
| Catherine E. Dunn | |||
| Vice President and Chief Accounting Officer |
Document
Exhibit 99.1
Oceaneering Reports Third Quarter 2024 Results
HOUSTON, October 23, 2024 – Oceaneering International, Inc. ("Oceaneering") (NYSE:OII) today reported net income of $41.2 million, or $0.40 per share, on revenue of $680 million for the three months ended September 30, 2024. Adjusted net income was $37.2 million, or $0.36 per share, reflecting the impact of $(0.4) million of pre-tax adjustments associated with foreign exchange gains recognized during the quarter, $0.6 million tax effect on adjustments associated with foreign exchange gains, and $(4.2) million of discrete tax adjustments.
| 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, | ||||||||
| 2024 | 2023 | 2024 | 2024 | 2023 | ||||||
| Revenue | $ | 679,811 | $ | 635,180 | $ | 668,808 | $ | 1,947,711 | $ | 1,770,077 |
| Operating Income (Loss) | 71,333 | 57,929 | 60,364 | 168,390 | 133,878 | |||||
| Net Income (Loss) | 41,237 | 29,812 | 34,997 | 91,369 | 52,874 | |||||
| Diluted Earnings (Loss) Per Share | $ | 0.40 | $ | 0.29 | $ | 0.34 | $ | 0.89 | $ | 0.52 |
For the third quarter of 2024:
•Net income was $41.2 million and adjusted EBITDA was $98.1 million
•Consolidated operating income was $71.3 million
•Cash flow provided by operating activities was $91.9 million and free cash flow was $67.0 million, with an ending cash position of $452 million
•The company repurchased 422,229 shares for approximately $10 million
As of September 30, 2024:
•Remotely Operated Vehicles (ROV): fleet count was 250; Q3 utilization was 69%; and Q3 average revenue per day utilized was $10,576
•Manufactured Products backlog was $671 million
Revised full-year 2024 guidance and initial full-year 2025 guidance:
•2024 consolidated adjusted EBITDA in the range of $340 million to $350 million
•2025 consolidated EBITDA in the range of $400 million to $430 million
•2025 free cash flow to exceed that generated in 2024
Roderick A. Larson, President and Chief Executive Officer of Oceaneering, stated, “During the quarter, we saw consistent activity levels in our energy-focused businesses, with notable operating performance improvements year-over-year in our Subsea Robotics (SSR) and Manufactured Products segments. Compared to the same quarter last year, our consolidated third quarter operating income was 23% higher on a 7% increase in revenue. We also repurchased shares during the quarter for the first time since 2015.
“We have updated our full-year 2024 consolidated adjusted EBITDA range, which at the midpoint of $345 million represents a 19% increase over our 2023 adjusted EBITDA. Our initial consolidated EBITDA guidance for 2025, at the $415 million midpoint, represents a 20% year-over-year increase to the guided full-year 2024 midpoint.”
Third Quarter 2024 Segment Results v. Third Quarter 2023 Segment Results
As compared to the third quarter of 2023:
•SSR third quarter 2024 operating income of $65.7 was 37% higher. EBITDA margin was 36%, as compared to 31% for the same period last year.
ROV revenue per day utilized of $10,576 was 13% higher and fleet utilization was essentially flat at 69%. ROV fleet use during the quarter was 66% in drill support and 34% in vessel-based activity, compared to 61% and 39%.
•Manufactured Products operating income improved 37% on a 17% increase in revenue, with operating income margin improving to 8%. Backlog was $671 million on September 30, 2024, an increase of $115 million, compared to the same period in 2023. The book-to-bill ratio was 1.21 for the 12-month period ending September 30, 2024, as compared to 1.41 for the trailing 12-month period ending September 30, 2023.
•Offshore Projects Group (OPG) operating income declined 24% on a 2% decrease in revenue due to changes in project mix in our international markets, vessel crane repair costs, and associated vessel downtime. Operating income margin declined to 14% from 18%.
•Integrity Management and Digital Solutions (IMDS) operating income and operating income margin decreased on a 11% increase in revenue. The decline in operating income was due to the one-time, non-cash charge associated with the divestiture of the Maritime Intelligence division in September 2024.
•Aerospace and Defense Technologies (ADTech) revenue was relatively flat. Operating income declined 14% due to increased project proposal costs and changes in project mix.
•At the corporate level, Unallocated Expenses of $38.9 million were in line with guidance for the quarter and lower than for the same period last year.
Fourth Quarter 2024 Guidance v. Third Quarter 2024 Guidance
On a consolidated basis, fourth quarter 2024 revenue is expected to increase slightly as compared to the third quarter of 2024, and fourth quarter 2024 adjusted EBITDA is expected to be in line with third quarter 2024 results. At the segment level, for the fourth quarter of 2024, as compared to the third quarter of 2024:
•SSR revenue and operating profitability are forecasted to decrease slightly due to normal seasonality;
•Manufactured Products operating profitability is expected to be significantly lower on higher revenue;
•OPG revenue is projected to increase and generate significantly higher operating profitability;
•IMDS operating profitability is expected to improve on a decline in revenue;
•ADTech revenue and operating profitability are expected to decrease; and
•Unallocated Expenses are expected to be in the $40 million range.
Initial 2025 Guidance
For 2025, year over year, Oceaneering anticipates increased revenue and improved operating performance across all segments, led by gains from SSR, Manufactured Products, and ADTech. Consolidated EBITDA for 2025 is forecasted to be in the range of $400 million to $430 million. Oceaneering currently expects to generate positive free cash flow in excess of that forecasted for 2024. Oceaneering will provide more specific guidance on its expectations for 2025 in its fourth quarter 2024 earnings release and conference call.
Non-GAAP Financial Measures
Adjusted net income (loss) and earnings (loss) per share; EBITDA and adjusted EBITDA on a consolidated and on a segment basis (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 Consolidated Adjusted EBITDA and Free Cash Flow Estimates, 2025 Consolidated EBITDA 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.
Conference Call Details
Oceaneering has scheduled a conference call and webcast on Thursday, October 24, 2024 at 10:00 a.m. Central Time, to discuss its results for the third quarter of 2024, as well as more detailed guidance for the full year and fourth quarter of 2024 and initial guidance for the full year of 2025. 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 range for consolidated adjusted EBITDA; fourth-quarter 2024 guidance for consolidated revenue, consolidated adjusted EBITDA, operating segment revenue and operating profitability, and Unallocated Expenses; full-year 2025 guidance for consolidated EBITDA and expectation that 2025 will generate positive free cash flow in excess of that generated in 2024; expectations for improved financial performance in 2025, led by gains in SSR, Manufactured Products, and ADTech; and the characterization, whether positive or otherwise, of market fundamentals, conditions, and dynamic, robotics markets, offshore energy activity levels (including by geographic location), pricing levels, day rates, ROV days utilized, average ROV revenue per day utilized, 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. 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
- Tables follow on next page -
| OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||||
| Sep 30, 2024 | Dec 31, 2023 | |||||||||||
| (in thousands) | ||||||||||||
| ASSETS | ||||||||||||
| Current assets (including cash and cash equivalents of 451,858 and 461,566) | $ | 1,411,099 | $ | 1,305,659 | ||||||||
| Net property and equipment | 423,579 | 424,293 | ||||||||||
| Other assets | 521,815 | 509,054 | ||||||||||
| Total Assets | $ | 2,356,493 | $ | 2,239,006 | ||||||||
| LIABILITIES AND EQUITY | ||||||||||||
| Current liabilities | $ | 800,143 | $ | 732,476 | ||||||||
| Long-term debt | 480,706 | 477,058 | ||||||||||
| Other long-term liabilities | 371,603 | 395,389 | ||||||||||
| Equity | 704,041 | 634,083 | ||||||||||
| Total Liabilities and Equity | $ | 2,356,493 | $ | 2,239,006 | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
| For the Three Months Ended | For the Nine Months Ended | |||||||||||
| Sep 30, 2024 | Sep 30, 2023 | Jun 30, 2024 | Sep 30, 2024 | Sep 30, 2023 | ||||||||
| (in thousands, except per share amounts) | ||||||||||||
| Revenue | $ | 679,811 | $ | 635,180 | $ | 668,808 | $ | 1,947,711 | $ | 1,770,077 | ||
| Cost of services and products | 548,849 | 520,483 | 548,597 | 1,604,154 | 1,476,735 | |||||||
| 130,962 | 114,697 | 120,211 | 343,557 | 293,342 | ||||||||
| Selling, general and administrative expense | 59,629 | 56,768 | 59,847 | 175,167 | 159,464 | |||||||
| 71,333 | 57,929 | 60,364 | 168,390 | 133,878 | ||||||||
| Interest income | 3,275 | 3,724 | 2,402 | 8,717 | 12,344 | |||||||
| Interest expense | (9,456) | (9,802) | (9,516) | (28,176) | (28,602) | |||||||
| Equity in income (losses) of unconsolidated affiliates | 323 | 498 | 295 | 787 | 1,616 | |||||||
| Other income (expense), net | 3,133 | 968 | 1,759 | 6,372 | (4,800) | |||||||
| 68,608 | 53,317 | 55,304 | 156,090 | 114,436 | ||||||||
| Provision (benefit) for income taxes | 27,371 | 23,505 | 20,307 | 64,721 | 61,562 | |||||||
| $ | 41,237 | $ | 29,812 | $ | 34,997 | $ | 91,369 | $ | 52,874 | |||
| Weighted average diluted shares outstanding | 102,613 | 102,206 | 102,472 | 102,445 | 102,086 | |||||||
| Diluted earnings (loss) per share | $ | 0.40 | $ | 0.29 | $ | 0.34 | $ | 0.89 | $ | 0.52 | ||
| 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, 2023 | Jun 30, 2024 | Sep 30, 2024 | Sep 30, 2023 | ||||||||||||||
| ( in thousands) | |||||||||||||||||
| Subsea Robotics | |||||||||||||||||
| Revenue | 215,715 | $ | 197,343 | $ | 214,985 | $ | 617,632 | $ | 553,016 | ||||||||
| Operating income (loss) | 65,698 | $ | 47,818 | $ | 61,750 | $ | 171,685 | $ | 123,699 | ||||||||
| Operating income (loss) % | % | 24 | % | 29 | % | 28 | % | 22 | % | ||||||||
| ROV days available | 23,000 | 22,750 | 68,500 | 68,250 | |||||||||||||
| ROV days utilized | 15,932 | 15,839 | 46,171 | 46,192 | |||||||||||||
| ROV utilization | % | 69 | % | 70 | % | 67 | % | 68 | % | ||||||||
| Manufactured Products | |||||||||||||||||
| Revenue | 143,734 | $ | 122,877 | $ | 139,314 | $ | 412,501 | $ | 360,698 | ||||||||
| Operating income (loss) | 11,278 | $ | 8,229 | $ | 14,369 | $ | 38,837 | $ | 30,116 | ||||||||
| Operating income (loss) % | % | 7 | % | 10 | % | 9 | % | 8 | % | ||||||||
| Backlog at end of period | 671,000 | $ | 556,000 | $ | 713,000 | $ | 671,000 | $ | 556,000 | ||||||||
| Offshore Projects Group | |||||||||||||||||
| Revenue | 147,539 | $ | 150,273 | $ | 144,058 | $ | 406,651 | $ | 385,127 | ||||||||
| Operating income (loss) | 20,294 | $ | 26,745 | $ | 13,248 | $ | 34,386 | $ | 49,391 | ||||||||
| Operating income (loss) % | % | 18 | % | 9 | % | 8 | % | 13 | % | ||||||||
| Integrity Management & Digital Solutions | |||||||||||||||||
| Revenue | 73,622 | $ | 66,056 | $ | 73,492 | $ | 216,804 | $ | 189,305 | ||||||||
| Operating income (loss) | 714 | $ | 3,242 | $ | 3,473 | $ | 7,802 | $ | 10,168 | ||||||||
| Operating income (loss) % | % | 5 | % | 5 | % | 4 | % | 5 | % | ||||||||
| Aerospace and Defense Technologies | |||||||||||||||||
| Revenue | 99,201 | $ | 98,631 | $ | 96,959 | $ | 294,123 | $ | 281,931 | ||||||||
| Operating income (loss) | 12,219 | $ | 14,140 | $ | 7,244 | $ | 32,271 | $ | 33,993 | ||||||||
| Operating income (loss) % | % | 14 | % | 7 | % | 11 | % | 12 | % | ||||||||
| Unallocated Expenses | |||||||||||||||||
| Operating income (loss) | (38,870) | $ | (42,245) | $ | (39,720) | $ | (116,591) | $ | (113,489) | ||||||||
| Total | |||||||||||||||||
| Revenue | 679,811 | $ | 635,180 | $ | 668,808 | $ | 1,947,711 | $ | 1,770,077 | ||||||||
| Operating income (loss) | 71,333 | $ | 57,929 | $ | 60,364 | $ | 168,390 | $ | 133,878 | ||||||||
| Operating income (loss) % | % | 9 | % | 9 | % | 9 | % | 8 | % | ||||||||
| 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, 2024 | Sep 30, 2023 | Jun 30, 2024 | Sep 30, 2024 | Sep 30, 2023 | |||||||
| (in thousands) | |||||||||||
| Capital Expenditures, including Acquisitions | $ | 24,886 | $ | 25,945 | $ | 22,858 | $ | 73,262 | $ | 66,681 | |
| Depreciation and Amortization: | |||||||||||
| Energy Services and Products | |||||||||||
| Subsea Robotics | $ | 12,076 | $ | 12,805 | $ | 11,981 | $ | 36,867 | $ | 41,101 | |
| Manufactured Products | 3,061 | 3,067 | 3,237 | 9,473 | 9,124 | ||||||
| Offshore Projects Group | 5,399 | 6,931 | 5,584 | 17,418 | 21,035 | ||||||
| Integrity Management & Digital Solutions | 1,348 | 909 | 1,803 | 4,410 | 2,706 | ||||||
| Total Energy Services and Products | 21,884 | 23,712 | 22,605 | 68,168 | 73,966 | ||||||
| Aerospace and Defense Technologies | 696 | 600 | 616 | 1,915 | 1,885 | ||||||
| Unallocated Expenses | 2,683 | 1,284 | 2,759 | 8,218 | 3,612 | ||||||
| Total Depreciation and Amortization | $ | 25,263 | $ | 25,596 | $ | 25,980 | $ | 78,301 | $ | 79,463 |
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 Consolidated Adjusted EBITDA and Free Cash Flow, and 2025 Consolidated EBITDA Estimates, 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 | ||||||||||||||||
| Sep 30, 2024 | Sep 30, 2023 | Jun 30, 2024 | ||||||||||||||
| 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 | $ | 41,237 | $ | 0.40 | $ | 29,812 | $ | 0.29 | $ | 34,997 | $ | 0.34 | ||||
| Pre-tax adjustments for the effects of: | ||||||||||||||||
| Foreign currency (gains) losses | (424) | (944) | (1,034) | |||||||||||||
| Total pre-tax adjustments | (424) | (944) | (1,034) | |||||||||||||
| Tax effect on pre-tax adjustments at the applicable jurisdictional statutory rate in effect for respective periods | 603 | 615 | 70 | |||||||||||||
| Discrete tax items: | ||||||||||||||||
| Share-based compensation | (2) | — | (48) | |||||||||||||
| Uncertain tax positions | (1,178) | 13,076 | 1,706 | |||||||||||||
| Valuation allowances | (1,759) | 9,353 | 520 | |||||||||||||
| Other | (1,247) | (13,430) | (7,645) | |||||||||||||
| Total discrete tax adjustments | (4,186) | 8,999 | (5,467) | |||||||||||||
| Total of adjustments | (4,007) | 8,670 | (6,431) | |||||||||||||
| Adjusted Net Income (Loss) | $ | 37,230 | $ | 0.36 | $ | 38,482 | $ | 0.38 | $ | 28,566 | $ | 0.28 | ||||
| Weighted average diluted shares outstanding utilized for Adjusted Net Income (Loss) | 102,613 | 102,206 | 102,472 | |||||||||||||
| 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, 2024 | Sep 30, 2023 | |||||||||||||||
| 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 | $ | 91,369 | $ | 0.89 | $ | 52,874 | $ | 0.52 | ||||||||
| Pre-tax adjustments for the effects of: | ||||||||||||||||
| Foreign currency (gains) losses | (3,655) | 3,634 | ||||||||||||||
| Total pre-tax adjustments | (3,655) | 3,634 | ||||||||||||||
| Tax effect on pre-tax adjustments at the applicable jurisdictional statutory rate in effect for respective periods | 1,463 | (1,688) | ||||||||||||||
| Discrete tax items: | ||||||||||||||||
| Share-based compensation | (1,976) | (1,370) | ||||||||||||||
| Uncertain tax positions | 379 | 17,477 | ||||||||||||||
| Valuation allowances | 3,332 | 4,251 | ||||||||||||||
| Other | (11,228) | (12,660) | ||||||||||||||
| Total discrete tax adjustments | (9,493) | 7,698 | ||||||||||||||
| Total of adjustments | (11,685) | 9,644 | ||||||||||||||
| Adjusted Net Income (Loss) | $ | 79,684 | $ | 0.78 | $ | 62,518 | $ | 0.61 | ||||||||
| Weighted average diluted shares outstanding utilized for Adjusted Net Income (Loss) | 102,445 | 102,086 | ||||||||||||||
| RECONCILIATIONS OF NON-GAAP TO GAAP FINANCIAL INFORMATION | ||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (continued) | ||||||||||||||||
| EBITDA and Adjusted EBITDA and Margins | ||||||||||||||||
| For the Three Months Ended | For the Nine Months Ended | |||||||||||||||
| Sep 30, 2024 | Sep 30, 2023 | Jun 30, 2024 | Sep 30, 2024 | Sep 30, 2023 | ||||||||||||
| ( in thousands) | ||||||||||||||||
| Net income (loss) | $ | 29,812 | $ | 34,997 | $ | 91,369 | $ | 52,874 | ||||||||
| Depreciation and amortization | 25,263 | 25,596 | 25,980 | 78,301 | 79,463 | |||||||||||
| Subtotal | 66,500 | 55,408 | 60,977 | 169,670 | 132,337 | |||||||||||
| Interest expense, net of interest income | 6,181 | 6,078 | 7,114 | 19,459 | 16,258 | |||||||||||
| Amortization included in interest expense | (1,537) | 51 | (1,504) | (4,520) | 114 | |||||||||||
| Provision (benefit) for income taxes | 27,371 | 23,505 | 20,307 | 64,721 | 61,562 | |||||||||||
| EBITDA | 98,515 | 85,042 | 86,894 | 249,330 | 210,271 | |||||||||||
| Adjustments for the effects of: | ||||||||||||||||
| Foreign currency (gains) losses | (424) | (944) | (1,034) | (3,655) | $ | 3,634 | ||||||||||
| Total of adjustments | (424) | (944) | (1,034) | (3,655) | 3,634 | |||||||||||
| Adjusted EBITDA | $ | 84,098 | $ | 85,860 | $ | 245,675 | $ | 213,905 | ||||||||
| Revenue | $ | 635,180 | $ | 668,808 | $ | 1,947,711 | $ | 1,770,077 | ||||||||
| EBITDA margin % | 14 | % | 13 | % | 13 | % | 13 | % | 12 | % | ||||||
| Adjusted EBITDA margin % | 14 | % | 13 | % | 13 | % | 13 | % | 12 | % |
All values are in US Dollars.
| Free Cash Flow | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||
| Sep 30, 2024 | Sep 30, 2023 | Jun 30, 2024 | Sep 30, 2024 | Sep 30, 2023 | |||||||||||||||||
| (in thousands) | |||||||||||||||||||||
| Net Income (loss) | $ | 41,237 | $ | 29,812 | $ | 34,997 | $ | 91,369 | $ | 52,874 | |||||||||||
| Non-cash adjustments: | |||||||||||||||||||||
| Depreciation and amortization | 25,263 | 25,596 | 25,980 | 78,301 | 79,463 | ||||||||||||||||
| Other non-cash | 7,440 | 6,381 | 1,744 | 11,866 | 9,116 | ||||||||||||||||
| Other increases (decreases) in cash from operating activities | 17,991 | 17,819 | (10,098) | (106,699) | (84,313) | ||||||||||||||||
| Cash flow provided by (used in) operating activities | 91,931 | 79,608 | 52,623 | 74,837 | 57,140 | ||||||||||||||||
| Purchases of property and equipment | (24,886) | (25,945) | (22,858) | (73,262) | (66,681) | ||||||||||||||||
| Free Cash Flow | $ | 67,045 | $ | 53,663 | $ | 29,765 | $ | 1,575 | $ | (9,541) | |||||||||||
| RECONCILIATIONS OF NON-GAAP TO GAAP FINANCIAL INFORMATION | |||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | ||||||||||||||||
| (continued) | |||||||||||||||||||||
| 2024 Consolidated Adjusted EBITDA Estimate | |||||||||||||||||||||
| For the Year Ending | |||||||||||||||||||||
| December 31, 2024 | |||||||||||||||||||||
| Low | High | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||
| Income (loss) before income taxes | $ | 219,000 | $ | 225,000 | |||||||||||||||||
| Depreciation and amortization | 100,000 | 103,000 | |||||||||||||||||||
| Subtotal | 319,000 | 328,000 | |||||||||||||||||||
| Interest expense, net of interest income | 25,000 | 26,000 | |||||||||||||||||||
| Foreign currency (gains) losses | (4,000) | (4,000) | |||||||||||||||||||
| Consolidated Adjusted EBITDA | $ | 340,000 | $ | 350,000 | |||||||||||||||||
| 2024 Free Cash Flow Estimate | |||||||||||||||||||||
| For the Year Ending | |||||||||||||||||||||
| December 31, 2024 | |||||||||||||||||||||
| Low | High | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||
| Net income (loss) | $ | 130,000 | $ | 132,000 | |||||||||||||||||
| Depreciation and amortization | 100,000 | 103,000 | |||||||||||||||||||
| Other increases (decreases) in cash from operating activities | (10,000) | 45,000 | |||||||||||||||||||
| 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 | |||||||||||||||||
| 2025 Consolidated EBITDA Estimate | |||||||||||||||||||||
| For the Year Ending | |||||||||||||||||||||
| December 31, 2025 | |||||||||||||||||||||
| Low | High | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||
| Income (loss) before income taxes | $ | 285,000 | $ | 307,000 | |||||||||||||||||
| Depreciation and amortization | 95,000 | 100,000 | |||||||||||||||||||
| Subtotal | 380,000 | 407,000 | |||||||||||||||||||
| Interest expense, net of interest income | 20,000 | 23,000 | |||||||||||||||||||
| Consolidated EBITDA | $ | 400,000 | $ | 430,000 | |||||||||||||||||
| RECONCILIATIONS OF NON-GAAP TO GAAP FINANCIAL INFORMATION | |||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| (continued) | |||||||||||||||||||||
| EBITDA and Adjusted EBITDA and Margins by Segment | |||||||||||||||||||||
| For the Three Months Ended September 30, 2024 | |||||||||||||||||||||
| SSR | MP | OPG | IMDS | ADTech | Unallocated Expenses and other | Total | |||||||||||||||
| ( in thousands) | |||||||||||||||||||||
| Operating Income (Loss) as reported in accordance with GAAP | $ | 11,278 | $ | 20,294 | $ | 714 | $ | 12,219 | $ | (38,870) | $ | 71,333 | |||||||||
| Adjustments for the effects of: | |||||||||||||||||||||
| Depreciation and amortization | 12,076 | 3,061 | 5,399 | 1,348 | 696 | 2,683 | 25,263 | ||||||||||||||
| Other pre-tax | — | — | — | — | — | 1,919 | 1,919 | ||||||||||||||
| EBITDA | 77,774 | 14,339 | 25,693 | 2,062 | 12,915 | (34,268) | 98,515 | ||||||||||||||
| Adjustments for the effects of: | |||||||||||||||||||||
| Foreign currency (gains) losses | — | — | — | — | — | (424) | (424) | ||||||||||||||
| Total of adjustments | — | — | — | — | — | (424) | (424) | ||||||||||||||
| Adjusted EBITDA | $ | 14,339 | $ | 25,693 | $ | 2,062 | $ | 12,915 | $ | (34,692) | $ | 98,091 | |||||||||
| Revenue | $ | 143,734 | $ | 147,539 | $ | 73,622 | $ | 99,201 | $ | 679,811 | |||||||||||
| Operating income (loss) % as reported in accordance with GAAP | 30 | % | 8 | % | 14 | % | 1 | % | 12 | % | 10 | % | |||||||||
| EBITDA Margin | 36 | % | 10 | % | 17 | % | 3 | % | 13 | % | 14 | % | |||||||||
| Adjusted EBITDA Margin | 36 | % | 10 | % | 17 | % | 3 | % | 13 | % | 14 | % | |||||||||
| 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 Three Months Ended June 30, 2024 | |||||||||||||||||||||
| SSR | MP | OPG | IMDS | ADTech | Unallocated Expenses and other | Total | |||||||||||||||
| ( in thousands) | |||||||||||||||||||||
| Operating Income (Loss) as reported in accordance with GAAP | $ | 14,369 | $ | 13,248 | $ | 3,473 | $ | 7,244 | $ | (39,720) | $ | 60,364 | |||||||||
| Adjustments for the effects of: | |||||||||||||||||||||
| Depreciation and amortization | 11,981 | 3,237 | 5,584 | 1,803 | 616 | 2,759 | 25,980 | ||||||||||||||
| Other pre-tax | — | — | — | — | — | 550 | 550 | ||||||||||||||
| EBITDA | 73,731 | 17,606 | 18,832 | 5,276 | 7,860 | (36,411) | 86,894 | ||||||||||||||
| Adjustments for the effects of: | |||||||||||||||||||||
| Foreign currency (gains) losses | — | — | — | — | — | (1,034) | (1,034) | ||||||||||||||
| Total of adjustments | — | — | — | — | — | (1,034) | (1,034) | ||||||||||||||
| Adjusted EBITDA | $ | 17,606 | $ | 18,832 | $ | 5,276 | $ | 7,860 | $ | (37,445) | $ | 85,860 | |||||||||
| Revenue | $ | 139,314 | $ | 144,058 | $ | 73,492 | $ | 96,959 | $ | 668,808 | |||||||||||
| Operating income (loss) % as reported in accordance with GAAP | 29 | % | 10 | % | 9 | % | 5 | % | 7 | % | 9 | % | |||||||||
| EBITDA Margin | 34 | % | 13 | % | 13 | % | 7 | % | 8 | % | 13 | % | |||||||||
| Adjusted EBITDA Margin | 34 | % | 13 | % | 13 | % | 7 | % | 8 | % | 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 Nine Months Ended September 30, 2024 | |||||||||||||||||||||
| SSR | MP | OPG | IMDS | ADTech | Unallocated Expenses and other | Total | |||||||||||||||
| ( in thousands) | |||||||||||||||||||||
| Operating Income (Loss) as reported in accordance with GAAP | $ | 38,837 | $ | 34,386 | $ | 7,802 | $ | 32,271 | $ | (116,591) | $ | 168,390 | |||||||||
| Adjustments for the effects of: | |||||||||||||||||||||
| Depreciation and amortization | 36,867 | 9,473 | 17,418 | 4,410 | 1,915 | 8,218 | 78,301 | ||||||||||||||
| Other pre-tax | — | — | — | — | — | 2,639 | 2,639 | ||||||||||||||
| EBITDA | 208,552 | 48,310 | 51,804 | 12,212 | 34,186 | (105,734) | 249,330 | ||||||||||||||
| Adjustments for the effects of: | |||||||||||||||||||||
| Foreign currency (gains) losses | — | — | — | — | — | (3,655) | (3,655) | ||||||||||||||
| Total of adjustments | — | — | — | — | — | (3,655) | (3,655) | ||||||||||||||
| Adjusted EBITDA | $ | 48,310 | $ | 51,804 | $ | 12,212 | $ | 34,186 | $ | (109,389) | $ | 245,675 | |||||||||
| Revenue | $ | 412,501 | $ | 406,651 | $ | 216,804 | $ | 294,123 | $ | 1,947,711 | |||||||||||
| Operating income (loss) % as reported in accordance with GAAP | 28 | % | 9 | % | 8 | % | 4 | % | 11 | % | 9 | % | |||||||||
| EBITDA Margin | 34 | % | 12 | % | 13 | % | 6 | % | 12 | % | 13 | % | |||||||||
| Adjusted EBITDA Margin | 34 | % | 12 | % | 13 | % | 6 | % | 12 | % | 13 | % | |||||||||
| For the Nine 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 | $ | 30,116 | $ | 49,391 | $ | 10,168 | $ | 33,993 | $ | (113,489) | $ | 133,878 | |||||||||
| Adjustments for the effects of: | |||||||||||||||||||||
| Depreciation and amortization | 41,101 | 9,124 | 21,035 | 2,706 | 1,885 | 3,612 | 79,463 | ||||||||||||||
| Other pre-tax | — | — | — | — | — | (3,070) | (3,070) | ||||||||||||||
| EBITDA | 164,800 | 39,240 | 70,426 | 12,874 | 35,878 | (112,947) | 210,271 | ||||||||||||||
| Adjustments for the effects of: | |||||||||||||||||||||
| Foreign currency (gains) losses | — | — | — | — | — | 3,634 | 3,634 | ||||||||||||||
| Total of adjustments | — | — | — | — | — | 3,634 | 3,634 | ||||||||||||||
| Adjusted EBITDA | $ | 39,240 | $ | 70,426 | $ | 12,874 | $ | 35,878 | $ | (109,313) | $ | 213,905 | |||||||||
| Revenue | $ | 360,698 | $ | 385,127 | $ | 189,305 | $ | 281,931 | $ | 1,770,077 | |||||||||||
| Operating income (loss) % as reported in accordance with GAAP | 22 | % | 8 | % | 13 | % | 5 | % | 12 | % | 8 | % | |||||||||
| EBITDA Margin | 30 | % | 11 | % | 18 | % | 7 | % | 13 | % | 12 | % | |||||||||
| Adjusted EBITDA Margin | 30 | % | 11 | % | 18 | % | 7 | % | 13 | % | 12 | % |
All values are in US Dollars.
15