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Published: 2023-02-23 17:02:24 ET
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EX-99.1 2 exhibit_991x8kx4qx2022.htm EX-99.1 OCEANEERING INTERNATIONAL INC. PRESS RELEASE 4Q 2022 Document


Exhibit 99.1

Oceaneering Reports Fourth Quarter 2022 Results

HOUSTON, February 23, 2023 – Oceaneering International, Inc. ("Oceaneering") (NYSE:OII) today reported net income of $23.1 million, or $0.23 per share, on revenue of $536 million for the three months ended December 31, 2022. Adjusted net income was $6.4 million, or $0.06 per share, reflecting the impact of $0.2 million of pre-tax adjustments associated with foreign exchange losses recognized during the quarter and $(16.6) million of discrete tax adjustments, primarily due to changes in valuation allowances and certain adjustments to prior year taxes.

During the prior quarter ended September 30, 2022, Oceaneering reported net income of $18.3 million, or $0.18 per share, on revenue of $560 million. 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.

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, 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 EndedFor the Year Ended
Dec 31,Sep 30,Dec 31,
20222021202220222021
Revenue $536,223 $466,709 $559,671 $2,066,084 $1,869,275 
Gross Margin90,102 79,163 95,754 307,377 264,065 
Income (Loss) from Operations42,177 (12,572)46,875 110,863 39,799 
Net Income (Loss)23,128 (38,813)18,303 25,941 (49,307)
 
Diluted Earnings (Loss) Per Share$0.23 $(0.39)$0.18 $0.26 $(0.49)

For the fourth quarter of 2022:
•Net income was $23.1 million and consolidated adjusted EBITDA was $70.0 million
•Consolidated operating income was $42.2 million
•Remotely Operated Vehicles (ROV) fleet count was 250, Q4 utilization was 62%, and Q4 average revenue per day on hire was $8,967
•Cash flow provided by operating activities was $159 million and free cash flow was $134 million, with an ending cash position of $569 million
•Secured consolidated order intake with expected contract value of $771 million
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As of December 31, 2022:
•Manufactured Products backlog was $467 million
•Consolidated backlog was $1,947 million

Guidance for 2023:
•Net income is expected in the range of $75 million to $90 million and consolidated adjusted EBITDA is expected in the range of $260 million to $310 million
•Free cash flow generation is expected in the range of $75 million to $125 million
•Capital expenditures are expected in the range of $90 million to $110 million
•First quarter consolidated adjusted EBITDA is expected in the range of $40 million to $50 million

Roderick A. Larson, President and Chief Executive Officer of Oceaneering, stated, "2022 marked our fourth consecutive year of improved adjusted EBITDA performance. In our offshore energy markets, the year unfolded generally as we expected, with seasonally lower activity levels and increased preparation costs during the first half of the year progressing into higher activity levels and increased margins during the second half of the year. Our consolidated adjusted EBITDA of $233 million was above the midpoint of our guidance range, and year-over-year adjusted EBITDA growth was led by significant improvement in our Subsea Robotics (SSR) and Offshore Projects Group (OPG) segment results. We delivered $121 million of cash flow from operations, spent $81.0 million on capital expenditures, and increased our cash position by $30.6 million to $569 million on December 31, 2022. We are encouraged by our strong order intake during the second half of 2022, improving pricing, and an expanding sales pipeline. We expect these positive fundamentals to drive improved financial performance in 2023.

“Our fourth quarter 2022 performance produced consolidated adjusted EBITDA of $70.0 million. Although we experienced typical seasonality, it is worth noting that the combined revenue and adjusted EBITDA levels in our SSR and OPG segments during the fourth quarter of 2022 were significantly greater than the corresponding quarter in 2021. We see this as a positive indicator for prospects in our energy businesses in 2023. Our fourth quarter 2022 results also included accrual releases resulting from more efficient personnel and inventory management that occurred throughout the year and primarily benefited our SSR and Integrity Management and Digital Solutions (IMDS) segments. Consolidated revenue of $536 million was 4% lower than in the third quarter, with revenue increases in our Manufactured Products and Aerospace and Defense Technologies (ADTech) segments being more than offset by revenue decreases in our other operating segments, particularly OPG.

Segment Results

"Our fourth quarter 2022 SSR operating income improved sequentially, despite marginally lower revenue. Activity levels in our ROV, tooling and survey businesses were generally consistent with expectations. As mentioned, SSR’s results included accrual adjustments resulting from personnel and inventory efficiencies recognized in the fourth quarter. As a result, SSR EBITDA margin of 35% during the fourth quarter was above the 31% achieved during the third quarter of 2022. Without the benefit of these releases, SSR's fourth quarter 2022 EBITDA margin would have been relatively consistent with the margin achieved in the prior quarter.

"Fourth quarter 2022 ROV days on hire declined 7% as compared to the third quarter 2022 with all of the decline coming from vessel-based days as a result of seasonality. Our fleet use during the quarter was 65% in drill support and 35% in vessel-based services, compared to 60% and 40%, respectively, during the third quarter. Fleet utilization declined to 62% in the fourth quarter of 2022 from 67% in the third quarter of 2022. Fourth quarter 2022 average ROV revenue per day on hire of $8,967 was 6% higher than in the third quarter of 2022.

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"Manufactured Products fourth quarter 2022 revenue of $100 million was 7% higher than in the third quarter of 2022. Operating income of $6.1 million and operating income margin of 6% were sequentially higher due to favorable project mix. Our Manufactured Products backlog on December 31, 2022 was $467 million, compared to our September 30, 2022 backlog of $365 million. Our book-to-bill ratio was 1.39 for the full year of 2022, as compared with the trailing 12-month book-to-bill of 1.08 on September 30, 2022.

"Sequentially, our fourth quarter 2022 OPG operating income declined on lower revenue. Revenue was 20% lower primarily due to seasonality in the Gulf of Mexico (GoM). Fourth quarter 2022 operating income margin of 9% declined from 13% in the third quarter of 2022. This decline was due to lower-than-anticipated vessel utilization resulting from project schedules shifting into mid-2023 and higher-than-expected vessel demobilization expenses.

"IMDS fourth quarter 2022 operating income improved sequentially on 5% lower revenue. Operating income margin for the fourth quarter improved to 9% from 5% in the third quarter of 2022. The margin improvement was largely due to contract repricing and the benefit associated with efficient personnel management in the year.

"ADTech fourth quarter operating income declined from the third quarter of 2022 on a 7% increase in revenue. ADTech operating income margin declined as expected, to 11%, due to changes in project mix.

"At the corporate level, fourth quarter 2022 Unallocated Expenses of $33.6 million were higher than the third quarter of 2022 due to a combination of increased accruals for incentive-based compensation and increased information technology costs.

Full Year 2022 Results

"For the full year 2022, consolidated operating income improved significantly on higher revenue as compared to 2021 consolidated adjusted operating income. Our improved results in 2022 were due primarily to positive energy markets that spurred increased offshore activity in our SSR and OPG segments, which in turn resulted in improved pricing and increased utilization in the second half of the year. Impacts from the U.S. government’s Continuing Resolution in the early part of 2022 resulted in lower revenue and lower operating income from our ADTech segment.

"Compared to 2021, our 2022 consolidated revenue increased 11% to $2.1 billion, with revenue growth in our OPG, SSR, and Manufactured Products segments partially offset by revenue declines in our IMDS and ADTech segments. Consolidated 2022 operating income and adjusted EBITDA improved, with significant gains in our SSR and OPG segments being partially offset by declines in our ADTech, IMDS, and Manufactured Products segments. We generated $121 million in cash provided from operations and invested $81.0 million in capital expenditures. For the full year 2022, we generated $39.8 million of free cash flow and increased our cash balance by $30.6 million to $569 million.

Full Year 2023 Guidance

"Based on 2022 year-end backlog, the expected meaningful increase in backlog conversion, anticipated 2023 order intake, and current market fundamentals, we are projecting our 2023 consolidated revenue to grow by more than 10%, with increased revenue in each of our operating segments, led by Manufactured Products and SSR. We expect sequential improvement in our 2023 financial results based on our expectations for: higher operating income and higher margins in our SSR, OPG, and Manufactured Products segments; slightly higher operating income and stable margins in our ADTech segment; and relatively stable operating income and margins in our IMDS segment. For the full year 2023, we anticipate generating $260 million to $310 million of EBITDA, with the incremental improvement over 2022 coming primarily from our SSR and OPG segments. At the midpoint of this
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range, our 2023 EBITDA would represent a 23% increase over 2022 adjusted EBITDA. We anticipate our full year 2023 to yield positive free cash flow of $75 million to $125 million. Based on current market conditions, we expect good opportunities for improved pricing and margins in our energy-focused businesses and stable pricing and margins in our government-focused businesses.

"For SSR, our expectation for improved results is based on increased ROV days on hire, and higher tooling activity, minor favorable shifts in geographic mix, and continued pricing improvements. Survey results are projected to improve as well, with both geophysical and survey and positioning businesses seeing increased international activity. We expect revenue growth in the low-double-digit range and EBITDA margins to average in the low- to mid-30% range for the full year.

"We forecast Manufactured Products results to improve on a significant increase in revenue, primarily based on 2022 order intake in our energy businesses. Bidding activity in our energy businesses remains robust and we expect this to continue during 2023. We are seeing growing interest in our mobility solutions business as highlighted by our recently announced contracts to deliver 85 MaxMoverTM autonomous counterbalance forklift systems in 2023 and 2024, increasing activity from our mobility solutions businesses in 2023. We forecast Manufactured Products operating income margins to average in the mid-single-digit range for the year with the project mix within our umbilical business shifting to more traditional manufacturing activities.

"OPG operating results are forecast to improve in 2023 on a modest increase in revenue. These projections are based on improved vessel utilization in the Gulf of Mexico and increased international activity in installation, intervention and diving, most notably in the second and third quarters. Overall, we expect OPG operating income margins to average in the mid-teens range for the year.

"IMDS operating results are forecast to be relatively flat in 2023 on slightly higher revenue. We see global opportunities for contract renewals and growth, especially in areas where we believe we can leverage digital and robotic capabilities. Operating income margin is expected to remain in the mid-single-digit range for the year.

"Our 2023 ADTech revenue and operating results are expected to be higher than those in 2022. We anticipate growth in all three of our government-focused businesses which secured several key contract awards during the second half of 2022. Operating income margins are expected to average in the low-teens range for the year.

"For 2023, we anticipate Unallocated Expenses to average in the mid- to high-$30 million range per quarter.

"Considering our meaningful cash balance and rising interest rates, we forecast our 2023 interest expense, net of interest income, to decline to approximately $28 million. We expect our 2023 cash tax payments to be in the range of $60 million to $65 million.

First Quarter 2023 Guidance

"Given the higher cost of performing offshore work over the past several years, customers are increasingly planning their work to avoid periods of higher weather risk. As a result, we anticipate a first quarter seasonal impact, particularly in our OPG business. Considering this and anticipated project timing leading to higher levels of utilization in the second and third quarters, we are forecasting our first quarter 2023 adjusted EBITDA to be in the range of $40 million to $50 million. At the respective midpoints, our first quarter guidance represents a 43% increase over the comparable period in 2022 and is expected to represent a percentage of our annual EBITDA similar to the prior year. Sequentially, we project higher revenue and operating results in our Manufactured Products segment; lower revenue and operating results in our SSR, IMDS, and ADTech segments; and lower revenue and significantly lower operating results in our OPG segment.
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Optimism with Continued Discipline

"Moving into 2023, our year-end backlog and positive market dynamics support growth in each of our segments and we are excited for the opportunity to further improve our financial performance. We continue to focus on growing our businesses and expanding our margins by increasing utilization and improving pricing. With this optimism comes our firm commitment to maintain our financial and capital discipline. We forecast our capital expenditures will total between $90 million to $110 million in 2023. Safety remains our top priority as we continue to focus on generating significant free cash flow, spending capital prudently to leverage our core competencies in new and existing markets, and managing our 2024 debt maturity. We believe that Oceaneering’s core robotics expertise positions our shareholders for strong returns through our participation in traditional and renewable energy markets, mobile robotics markets, and aerospace and defense markets."

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 ranges for full year and first quarter 2023 consolidated EBITDA and adjusted EBITDA guidance ranges, full-year 2023 free cash flow generation, and capital expenditures; expectations regarding seasonal impacts to offshore activity in the first quarter 2023 and future project mix; expectations regarding market fundamentals’ impact on 2023 financial performance; backlog, backlog conversion, anticipated 2023 order intake, current market fundamentals, and vessel utilization, to the extent such items may be indicators of future revenue or profitability; estimated SSR fourth quarter 2022 EBITDA margin, if adjustments had been spread throughout 2022; forecasted range of first quarter 2023 consolidated EBITDA and revenue, and direction of each segment's revenue and operating results; forecasted range of first quarter 2023 Unallocated Expenses; forecasted guidance ranges for full-year 2023 cash income tax payments; anticipated sequentially comparative full-year 2023 activity and operating performance across each operating segment; anticipated outcomes from stated priorities and focus areas; including aspects of our business and financial strategy; belief that its core robotics expertise positions shareholders for strong returns; and characterization of market fundamentals, conditions and dynamics, offshore energy activity levels, outlook, performance, opportunities, results, and financials as positive, meaningful, improving, 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 variants thereof, 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
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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 -
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OCEANEERING INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
Dec 31, 2022Dec 31, 2021
(in thousands)
ASSETS
Current assets (including cash and cash equivalents of $568,745 and $538,114)
$1,297,060 $1,188,003 
Net property and equipment438,449 489,596 
Other assets296,174 285,260 
Total Assets$2,031,683 $1,962,859 
LIABILITIES AND EQUITY
Current liabilities$568,414 $501,161 
Long-term debt700,973 702,067 
Other long-term liabilities236,492 248,607 
Equity525,804 511,024 
Total Liabilities and Equity$2,031,683 $1,962,859 
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months EndedFor the Year Ended
Dec 31, 2022Dec 31, 2021Sep 30, 2022Dec 31, 2022Dec 31, 2021
(in thousands, except per share amounts)
Revenue$536,223 $466,709 $559,671 $2,066,084 $1,869,275 
Cost of services and products446,121 387,546 463,917 1,758,707 1,605,210 
Gross margin90,102 79,163 95,754 307,377 264,065 
Selling, general and administrative expense47,925 91,735 48,879 196,514 224,266 
Income (loss) from operations42,177 (12,572)46,875 110,863 39,799 
Interest income2,749 613 1,396 5,708 2,477 
Interest expense(9,601)(9,058)(9,552)(38,215)(38,810)
Equity in income (losses) of unconsolidated affiliates599 (507)496 1,707 594 
Other income (expense), net(816)(5,547)(1,222)(1,011)(9,769)
Income (loss) before income taxes35,108 (27,071)37,993 79,052 (5,709)
Provision (benefit) for income taxes 11,980 11,742 19,690 53,111 43,598 
Net Income (Loss)$23,128 $(38,813)$18,303 $25,941 $(49,307)
Weighted average diluted shares outstanding101,597 99,799 101,310 101,447 99,706 
Diluted earnings (loss) per share$0.23 $(0.39)$0.18 $0.26 $(0.49)
The above Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Operations should be read in conjunction with the Company's latest Annual Report on Form 10-K and Quarterly Report on Form 10-Q.
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SEGMENT INFORMATION
For the Three Months EndedFor the Year Ended
Dec 31, 2022Dec 31, 2021Sep 30, 2022Dec 31, 2022Dec 31, 2021
($ in thousands)
Subsea Robotics
Revenue$167,387 $134,315 $169,422 $621,921 $538,515 
Gross margin$54,013 $28,199 $47,552 $160,527 $112,962 
Operating income (loss)$43,689 $21,012 $37,069 $118,248 $76,874 
Operating income (loss) %26 %16 %22 %19 %14 %
ROV days available23,000 23,021 23,000 91,250 91,242 
ROV days utilized14,350 12,747 15,408 56,231 53,113 
ROV utilization62 %55 %67 %62 %58 %
Manufactured Products
Revenue$100,174 $102,940 $94,039 $382,361 $344,251 
Gross margin$14,744 $36,516 $12,170 $45,834 $63,455 
Operating income (loss)$6,132 $(20,228)$4,282 $11,692 $(15,876)
Operating income (loss) %6 %(20)%5 %3 %(5)%
Backlog at end of period$467,000 $318,000 $365,000 $467,000 $318,000 
Offshore Projects Group
Revenue$122,476 $85,356 $152,987 $489,317 $378,121 
Gross margin$17,548 $12,846 $27,647 $78,373 $56,338 
Operating income (loss)$10,745 $6,754 $20,310 $49,256 $31,197 
Operating income (loss) %9 %8 %13 %10 %8 %
Integrity Management & Digital Solutions
Revenue$55,411 $60,469 $58,465 $229,884 $241,393 
Gross margin$9,932 $12,416 $8,371 $36,724 $42,417 
Operating income (loss)$4,866 $6,015 $3,091 $14,901 $18,572 
Operating income (loss) %9 %10 %5 %6 %8 %
Aerospace and Defense Technologies
Revenue$90,775 $83,629 $84,758 $342,601 $366,995 
Gross margin$16,402 $15,863 $19,431 $68,447 $82,595 
Operating income (loss)$10,320 $10,562 $13,043 $44,168 $60,992 
Operating income (loss) %11 %13 %15 %13 %17 %
Unallocated Expenses
Gross margin$(22,537)$(26,677)$(19,417)$(82,528)$(93,702)
Operating income (loss)$(33,575)$(36,687)$(30,920)$(127,402)$(131,960)
Total
Revenue$536,223 $466,709 $559,671 $2,066,084 $1,869,275 
Gross margin$90,102 $79,163 $95,754 $307,377 $264,065 
Operating income (loss)$42,177 $(12,572)$46,875 $110,863 $39,799 
Operating income (loss) %8 %(3)%8 %5 %2 %
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.
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SELECTED CASH FLOW INFORMATION
For the Three Months EndedFor the Year Ended
Dec 31, 2022Dec 31, 2021Sep 30, 2022Dec 31, 2022Dec 31, 2021
(in thousands)
Capital Expenditures, including Acquisitions$25,949 $14,383 $19,280 $81,043 $50,199 
Depreciation and Amortization:
Energy Services and Products
Subsea Robotics$15,139 $21,029 $16,013 $67,684 $87,900 
Manufactured Products2,915 3,111 2,939 11,946 12,788 
Offshore Projects Group7,024 7,405 7,132 28,560 28,173 
Integrity Management & Digital Solutions840 1,091 1,695 4,599 4,420 
Total Energy Services and Products25,918 32,636 27,779 112,789 133,281 
Aerospace and Defense Technologies705 676 671 2,853 4,783 
Unallocated Expenses1,218 474 1,799 5,327 1,659 
 Total Depreciation and Amortization$27,841 $33,786 $30,249 $120,969 $139,723 
 
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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, 2023 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.
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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, 2022Dec 31, 2021Sep 30, 2022
Net Income (Loss)Diluted EPSNet Income (Loss)Diluted EPSNet Income (Loss)Diluted EPS
(in thousands, except per share amounts)
Net income (loss) and diluted EPS as reported in accordance with GAAP$23,128 $0.23 $(38,813)$(0.39)$18,303 $0.18 
Pre-tax adjustments for the effects of:
Provision for Evergrande losses, net— 29,549 — 
Foreign currency (gains) losses193 1,082 1,145 
Total pre-tax adjustments193 30,631 1,145 
Tax effect on pre-tax adjustments at the applicable jurisdictional statutory rate in effect for respective periods(333)(6,388)(174)
Discrete tax items:
    Share-based compensation— (2)— 
    Uncertain tax positions(669)111 1,813 
    Valuation allowances(7,679)16,887 452 
    Other(8,263)2,593 2,162 
Total discrete tax adjustments(16,611)19,589 4,427 
Total of adjustments(16,751)43,832 5,398 
Adjusted Net Income (Loss)$6,377 $0.06 $5,019 $0.05 $23,701 $0.23 
Weighted average diluted shares outstanding utilized for Adjusted Net Income (Loss)101,597 101,206 101,310 



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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, 2022Dec 31, 2021
  Net Income (Loss)Diluted EPSNet Income (Loss)Diluted EPS
(in thousands, except per share amounts)
Net income (loss) and diluted EPS as reported in accordance with GAAP  $25,941 $0.26 $(49,307)$(0.49)
Pre-tax adjustments for the effects of:
Provision for Evergrande losses, net— 29,549 
Loss on sale of asset— 1,415 
Restructuring expenses and other — 1,308 
Foreign currency (gains) losses 4 5,032 
Total pre-tax adjustments 4 37,304 
Tax effect on pre-tax adjustments at the applicable jurisdictional statutory rate in effect for respective periods (275)(7,819)
Discrete tax items:
Share-based compensation   137 542 
Uncertain tax positions (81)158 
Valuation allowances 11,119 33,068 
Other (5,734)2,809 
Total discrete tax adjustments 5,441 36,577 
Total of adjustments 5,170 66,062 
Adjusted Net Income (Loss)  $31,111 $0.31 $16,755 $0.17 
Weighted average diluted shares outstanding utilized for Adjusted Net Income (Loss)  101,447 100,895 
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RECONCILIATIONS OF NON-GAAP TO GAAP FINANCIAL INFORMATION
(continued)
EBITDA and Adjusted EBITDA and Margins
For the Three Months EndedFor the Year Ended
Dec 31, 2022Dec 31, 2021Sep 30, 2022Dec 31, 2022Dec 31, 2021
($ in thousands)
Net income (loss)$23,128 $(38,813)$18,303 $25,941 $(49,307)
Depreciation and amortization27,841 33,786 30,249 120,969 139,723 
Subtotal50,969 (5,027)48,552 146,910 90,416 
Interest expense, net of interest income6,852 8,445 8,156 32,507 36,333 
Amortization included in interest expense33 865 39 106 2,950 
Provision (benefit) for income taxes 11,980 11,742 19,690 53,111 43,598 
EBITDA69,834 16,025 76,437 232,634 173,297 
Adjustments for the effects of:
Provision for Evergrande losses, net— 29,549 — — 29,549 
Loss on sale of asset— — — — 1,415 
Restructuring expenses and other— — — — 1,308 
Foreign currency (gains) losses193 1,082 1,145 4 5,032 
Total of adjustments193 30,631 1,145 4 37,304 
Adjusted EBITDA$70,027 $46,656 $77,582 $232,638 $210,601 
Revenue$536,223 $466,709 $559,671 $2,066,084 $1,869,275 
EBITDA margin %13 %3 %14 %11 %9 %
Adjusted EBITDA margin %13 %10 %14 %11 %11 %



Free Cash Flow
For the Three Months EndedFor the Year Ended
Dec 31, 2022Dec 31, 2021Sep 30, 2022Dec 31, 2022Dec 31, 2021
(in thousands)
Net Income (loss)$23,128 $(38,813)$18,303 $25,941 $(49,307)
Non-cash adjustments:
Depreciation and amortization27,841 33,786 30,249 120,969 139,723 
Other non-cash 2,991 31,244 4,171 8,542 35,226 
Other increases (decreases) in cash from operating activities105,506 113,778 33,176 (34,569)99,672 
Cash flow provided by (used in) operating activities159,466 139,995 85,899 120,883 225,314 
Purchases of property and equipment(25,949)(14,383)(19,280)(81,043)(50,199)
Free Cash Flow$133,517 $125,612 $66,619 $39,840 $175,115 
13

RECONCILIATIONS OF NON-GAAP TO GAAP FINANCIAL INFORMATION
(continued)
2023 Adjusted EBITDA Estimates
For the Three Months Ending
March 31, 2023
LowHigh
(in thousands)
Income (loss) before income taxes$7,000 $11,000 
Depreciation and amortization25,000 31,000 
Subtotal32,000 42,000 
Interest expense, net of interest income8,000 8,000 
Adjusted EBITDA$40,000 $50,000 
For the Year Ending
December 31, 2023
LowHigh
(in thousands)
Income (loss) before income taxes$127,000 $157,000 
Depreciation and amortization105,000 125,000 
Subtotal232,000 282,000 
Interest expense, net of interest income28,000 28,000 
Adjusted EBITDA$260,000 $310,000 
  
  
2023 Free Cash Flow Estimate
For the Year Ending
December 31, 2023
LowHigh
(in thousands)
Net income (loss)$75,000 $90,000 
Depreciation and amortization105,000 125,000 
Other increases (decreases) in cash from operating activities(15,000)20,000 
Cash flow provided by (used in) operating activities165,000 235,000 
Purchases of property and equipment(90,000)(110,000)
Free Cash Flow$75,000 $125,000 
14

RECONCILIATIONS OF NON-GAAP TO GAAP FINANCIAL INFORMATION
(continued)
Adjusted Operating Income (Loss) and Margins by Segment
For the Three Months Ended December 31, 2022
SSRMPOPG IMDSADTech Unallocated ExpensesTotal
($ in thousands)
Operating Income (Loss) as reported in accordance with GAAP$43,689 $6,132 $10,745 $4,866 $10,320 $(33,575)$42,177 
Adjusted Operating Income (Loss)$43,689 $6,132 $10,745 $4,866 $10,320 $(33,575)$42,177 
Revenue$167,387 $100,174 $122,476 $55,411 $90,775 $536,223 
Operating income (loss) % as reported in accordance with GAAP26 %6 %9 %9 %11 %8 %
Operating income (loss) % using adjusted amounts26 %6 %9 %9 %11 %8 %
For the Three Months Ended December 31, 2021
SSRMPOPGIMDSADTechUnallocated ExpensesTotal
($ in thousands)
Operating Income (Loss) as reported in accordance with GAAP$21,012 $(20,228)$6,754 $6,015 $10,562 $(36,687)$(12,572)
Adjustments for the effects of:
Provision for Evergrande losses, net— 29,549 — — — — 29,549 
Total of adjustments— 29,549 — — — — 29,549 
Adjusted Operating Income (Loss)$21,012 $9,321 $6,754 $6,015 $10,562 $(36,687)$16,977 
Revenue$134,315 $102,940 $85,356 $60,469 $83,629 $466,709 
Operating income (loss) % as reported in accordance with GAAP16 %(20)%8 %10 %13 %(3)%
Operating income (loss) % using adjusted amounts16 %9 %8 %10 %13 %4 %
For the Three Months Ended September 30, 2022
SSRMPOPGIMDSADTechUnallocated ExpensesTotal
($ 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 GAAP22 %5 %13 %5 %15 %8 %
Operating income (loss) % using adjusted amounts22 %5 %13 %5 %15 %8 %


15

RECONCILIATIONS OF NON-GAAP TO GAAP FINANCIAL INFORMATION
(continued)
Adjusted Operating Income (Loss) and Margins by Segment
For the Year Ended December 31, 2022
SSRMPOPGIMDSADTechUnallocated ExpensesTotal
($ in thousands)
Operating Income (Loss) as reported in accordance with GAAP$118,248 $11,692 $49,256 $14,901 $44,168 $(127,402)$110,863 
Adjusted Operating Income (Loss)$118,248 $11,692 $49,256 $14,901 $44,168 $(127,402)$110,863 
Revenue$621,921 $382,361 $489,317 $229,884 $342,601 $2,066,084 
Operating income (loss) % as reported in accordance with GAAP19 %3 %10 %6 %13 %5 %
Operating income (loss) % using adjusted amounts19 %3 %10 %6 %13 %5 %
For the Year Ended December 31, 2021
SSRMPOPGIMDSADTechUnallocated ExpensesTotal
($ in thousands)
Operating Income (Loss) as reported in accordance with GAAP$76,874 $(15,876)$31,197 $18,572 $60,992 $(131,960)$39,799 
Adjustments for the effects of:
Provision for Evergrande losses, net— 29,549 — — — — 29,549 
Loss on sale of asset— — — — — 1,415 1,415 
Restructuring expenses and other395 537 149 217 10 — 1,308 
Total of adjustments395 30,086 149 217 10 1,415 32,272 
Adjusted Operating Income (Loss)$77,269 $14,210 $31,346 $18,789 $61,002 $(130,545)$72,071 
Revenue$538,515 $344,251 $378,121 $241,393 $366,995 $1,869,275 
Operating income (loss) % as reported in accordance with GAAP14 %(5)%8 %8 %17 %2 %
Operating income (loss) % using adjusted amounts14 %4 %8 %8 %17 %4 %
16

RECONCILIATIONS OF NON-GAAP TO GAAP FINANCIAL INFORMATION
(continued)
EBITDA and Adjusted EBITDA and Margins by Segment
For the Three Months Ended December 31, 2022
SSRMPOPGIMDSADTechUnallocated Expenses and otherTotal
($ in thousands)
Operating Income (Loss) as reported in accordance with GAAP$43,689 $6,132 $10,745 $4,866 $10,320 $(33,575)$42,177 
Adjustments for the effects of:
Depreciation and amortization15,139 2,915 7,024 840 705 1,218 27,841 
Other pre-tax— — — — — (184)(184)
EBITDA58,828 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$58,828 $9,047 $17,769 $5,706 $11,025 $(32,348)$70,027 
Revenue$167,387 $100,174 $122,476 $55,411 $90,775 $536,223 
Operating income (loss) % as reported in accordance with GAAP26 %6 %9 %9 %11 %8 %
EBITDA Margin35 %9 %15 %10 %12 %13 %
Adjusted EBITDA Margin35 %9 %15 %10 %12 %13 %
For the Three Months Ended December 31, 2021
SSRMPOPGIMDSADTechUnallocated Expenses and otherTotal
($ in thousands)
Operating Income (Loss) as reported in accordance with GAAP$21,012 $(20,228)$6,754 $6,015 $10,562 $(36,687)$(12,572)
Adjustments for the effects of:
Depreciation and amortization21,029 3,111 7,405 1,091 676 474 33,786 
Other pre-tax— — — — — (5,189)(5,189)
EBITDA42,041 (17,117)14,159 7,106 11,238 (41,402)16,025 
Adjustments for the effects of:
Provision for Evergrande losses, net— 29,549 — — — — 29,549 
Foreign currency (gains) losses— — — — — 1,082 1,082 
Total of adjustments— 29,549 — — — 1,082 30,631 
Adjusted EBITDA$42,041 $12,432 $14,159 $7,106 $11,238 $(40,320)$46,656 
Revenue$134,315 $102,940 $85,356 $60,469 $83,629 $466,709 
Operating income (loss) % as reported in accordance with GAAP16 %(20)%8 %10 %13 %(3)%
EBITDA Margin31 %(17)%17 %12 %13 %3 %
Adjusted EBITDA Margin31 %12 %17 %12 %13 %10 %
`
17

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
SSRMPOPGIMDSADTechUnallocated Expenses and otherTotal
($ 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 amortization16,013 2,939 7,132 1,695 671 1,799 30,249 
Other pre-tax— — — — — (687)(687)
EBITDA53,082 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 GAAP22 %5 %13 %5 %15 %8 %
EBITDA Margin31 %8 %18 %8 %16 %14 %
Adjusted EBITDA Margin31 %8 %18 %8 %16 %14 %

18

RECONCILIATIONS OF NON-GAAP TO GAAP FINANCIAL INFORMATION
(continued)
EBITDA and Adjusted EBITDA and Margins by Segment
For the Year Ended December 31, 2022
SSRMPOPGIMDSADTechUnallocated Expenses and otherTotal
($ in thousands)
Operating Income (Loss) as reported in accordance with GAAP$118,248 $11,692 $49,256 $14,901 $44,168 $(127,402)$110,863 
Adjustments for the effects of:
Depreciation and amortization67,684 11,946 28,560 4,599 2,853 5,327 120,969 
Other pre-tax— — — — — 802 802 
EBITDA185,932 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$185,932 $23,638 $77,816 $19,500 $47,021 $(121,269)$232,638 
Revenue$621,921 $382,361 $489,317 $229,884 $342,601 $2,066,084 
Operating income (loss) % as reported in accordance with GAAP19 %3 %10 %6 %13 %5 %
EBITDA Margin30 %6 %16 %8 %14 %11 %
Adjusted EBITDA Margin30 %6 %16 %8 %14 %11 %
For the Year Ended December 31, 2021
SSRMPOPGIMDSADTechUnallocated Expenses and otherTotal
($ in thousands)
Operating Income (Loss) as reported in accordance with GAAP$76,874 $(15,876)$31,197 $18,572 $60,992 $(131,960)$39,799 
Adjustments for the effects of:
Depreciation and amortization87,900 12,788 28,173 4,420 4,783 1,659 139,723 
Other pre-tax— — — — — (6,225)(6,225)
EBITDA164,774 (3,088)59,370 22,992 65,775 (136,526)173,297 
Adjustments for the effects of:
Provision for Evergrande losses, net— 29,549 — — — — 29,549 
Loss on sale of asset— — — — — 1,415 1,415 
Restructuring expenses and other395 537 149 217 10 — 1,308 
Foreign currency (gains) losses— — — — — 5,032 5,032 
Total of adjustments395 30,086 149 217 10 6,447 37,304 
Adjusted EBITDA$165,169 $26,998 $59,519 $23,209 $65,785 $(130,079)$210,601 
Revenue$538,515 $344,251 $378,121 $241,393 $366,995 $1,869,275 
Operating income (loss) % as reported in accordance with GAAP14 %(5)%8 %8 %17 %2 %
EBITDA Margin31 %(1)%16 %10 %18 %9 %
Adjusted EBITDA Margin31 %8 %16 %10 %18 %11 %
19