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.
1
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.
2
"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."
3
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 -
4
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
Gross margin
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
Income (loss) from operations
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)
Income (loss) before income taxes
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
Net Income (Loss)
$
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.
5
SEGMENT 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)
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) %
22
%
14
%
17
%
16
%
14
%
ROV days available
23,000
23,002
22,750
68,250
68,221
ROV days utilized
15,408
14,474
14,631
41,881
40,366
ROV utilization
67
%
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) %
5
%
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) %
13
%
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) %
5
%
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) %
15
%
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) %
8
%
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.
6
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
7
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.
8
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
9
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
10
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, 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)
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
$
77,582
$
50,549
$
53,517
$
162,611
$
163,945
Revenue
$
559,671
$
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
%
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
11
RECONCILIATIONS OF NON-GAAP TO GAAP FINANCIAL INFORMATION
(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
12
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
13
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
$
37,069
$
4,282
$
20,310
$
3,091
$
13,043
$
(30,920)
$
46,875
Adjusted Operating Income (Loss)
$
37,069
$
4,282
$
20,310
$
3,091
$
13,043
$
(30,920)
$
46,875
Revenue
$
169,422
$
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
$
19,533
$
809
$
7,634
$
5,362
$
14,251
$
(31,820)
$
15,769
Adjusted Operating Income (Loss)
$
19,533
$
809
$
7,634
$
5,362
$
14,251
$
(31,820)
$
15,769
Revenue
$
143,710
$
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
%
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
$
25,938
$
(1,365)
$
17,535
$
3,436
$
8,961
$
(31,655)
$
22,850
Adjusted Operating Income (Loss)
$
25,938
$
(1,365)
$
17,535
$
3,436
$
8,961
$
(31,655)
$
22,850
Revenue
$
157,123
$
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
%
14
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
$
74,559
$
5,560
$
38,511
$
10,035
$
33,848
$
(93,827)
$
68,686
Adjusted Operating Income (Loss)
$
74,559
$
5,560
$
38,511
$
10,035
$
33,848
$
(93,827)
$
68,686
Revenue
$
454,534
$
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
$
55,862
$
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)
$
56,257
$
4,889
$
24,592
$
12,774
$
50,440
$
(93,858)
$
55,094
Revenue
$
404,200
$
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
%
15
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
$
37,069
$
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
$
53,082
$
7,221
$
27,442
$
4,786
$
13,714
$
(28,663)
$
77,582
Revenue
$
169,422
$
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
$
19,533
$
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
$
41,016
$
4,011
$
14,415
$
6,476
$
15,678
$
(31,047)
$
50,549
Revenue
$
143,710
$
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
%
`
16
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
$
25,938
$
(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
$
43,469
$
1,655
$
24,642
$
4,470
$
9,782
$
(30,501)
$
53,517
Revenue
$
157,123
$
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
%
17
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
$
74,559
$
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
$
127,104
$
14,591
$
60,047
$
13,794
$
35,996
$
(88,921)
$
162,611
Revenue
$
454,534
$
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
$
55,862
$
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
$
123,128
$
14,566
$
45,360
$
16,103
$
54,547
$
(89,759)
$
163,945
Revenue
$
404,200
$
241,311
$
292,765
$
180,924
$
283,366
$
1,402,566
Operating income (loss) % as reported in accordance with GAAP
