On this page of StockholderLetter.com we present the latest annual shareholder letter from OCEANEERING INTERNATIONAL INC — ticker symbol OII. Reading current and past OII letters to shareholders can bring important insights into the investment thesis.

 •  3/29/2024 Letter Continued (Full PDF)
 •  4/12/2023 OII Stockholder Letter
 •  OII Benford's Law Stock Score = 95

OII Shareholder/Stockholder Letter Transcript:

2023 Annual Report
MaxMover   
CB D 2000
eNovus ROV
Autonomous
Transport Vehicle    
   PeopleMover   
Freedom    ROV
Robotics, from Sea to Space
Oceaneering
Robotic Arm
System 1    
   ORAS1   

OCEANEERING AT A GLANCE
Oceaneering is a global technology company delivering engineered services and products and robotic solutions to the offshore energy,
defense, aerospace, and industrial markets. At year-end 2023, Oceaneering employed approximately 10,100 people worldwide.
SUBSEA ROBOTICS (SSR)
MANUFACTURED
PRODUCTS
OFFSHORE PROJECTS
GROUP (OPG)
INTEGRITY
MANAGEMENT &
DIGITAL SOLUTIONS
(IMDS)
AEROSPACE AND
DEFENSE TECHNOLOGIES
(ADTech)
SSR merges our underwater
robotics and automation
capabilities by combining
Remotely Operated Vehicles
(ROV), ROV Tooling, and
Survey Services businesses.
ROV- Remotely operated,
tethered submersible vehicles
for services, including subsea
hardware installation,
construction, pipeline inspection, survey, and facilities
inspection, maintenance and
repair (IMR). Our premier
fleet of 250 work-class ROVs
remains a leading provider of
ROV services to the offshore
energy industry for drilling
support, offshore wind, and
vessel-based ROV services.
ROV Tooling- ROV and
skid-mounted tools, for rental,
to support offshore wind, well
intervention, drilling,
construction, field maintenance, IMR, well abandonment and decommissioning
activities.
Survey ServicesOffshore survey, positioning
and geoscience (geophysical
and geotechnical) services
conducting site investigations,
route surveys, asset positioning, Autonomous Underwater
Vehicles (AUVs), remote
positioning and metrology
services to support offshore
energy activities such as subsea inspection, maintenance
and repair (IMR) programs,
drill support, oil and gas and
offshore wind developments.
Manufactured Products
leverages our expertise and
competencies around
advanced technology product
development, manufacturing,
and project management skills
by aligning our energy
manufactured products
businesses with our mobility
solutions products, which
include entertainment systems
and autonomous mobile
robotic systems (AMR).
Energy
Manufactured Products    Distribution SystemsProduction control umbilicals
supply electric and hydraulic
power to subsea trees and
inject chemicals into well
streams.
    Connection SystemsConnectors, clamps, and
valves used to connect
production trees to umbilicals
and flow lines; and Pipeline
Connection & Repair Systems
(PCRS).
Mobility Solutions
Products    Entertainment SystemsEvolutionary, motion   based
ride systems capable of delivering high   energy thrills in fully
immersive 3D media   based
theme park attractions.
    AMR Systems- Innovative,
turnkey technology   based
logistic solutions on load
carriers traveling the floor of
a facility, minus an onboard
operator.
OPG provides a broad
portfolio of integrated subsea
project capabilities and
solutions, including project
management, engineered
solutions, subsea installation and intervention, IMR,
IWOCS (Installation and
Workover Control Systems),
RWOCS (ROV Workover
Control Systems), drill pipe
riser (DPR) systems, riserless
light well intervention, hydrate
remediation, well stimulation,
and dredging and
decommissioning.
OPG provides seabed
preparation and route
clearance to the renewable
energy and oil and gas
industries.
Project scopes are supported
by:
    our four Jones Act-compliant vessels, including three
dynamically positioned, multi   
service vessels (MSVs) and
one survey vessel,
    chartered, third   party
vessels, and
    manned diving equipment
and operations for special
services.
IMDS leverages software,
analytics and services that
promote the safety, efficiency,
cost effectiveness, and
sustainability programs of
our energy and maritime
customers.
Integrity ManagementA range of integrity services
for energy customers
throughout the procurement,
fabrication, installation,
commissioning, and operation
of assets.
We establish inspection and
maintenance programs, plan
and execute inspections, and
evaluate, report and make
recommendations to facilitate
customers    decision-making.
Energy IntelligenceSoftware solutions that range
from data collection to storage, organization, analysis,
and reporting. We also
deliver inspection, corrosion,
vibration, coating, insulation,
and maintenance management, along with risk-based
inspection planning.
Maritime IntelligenceSoftware and consulting
solutions aimed at peer
benchmarking, vessel
performance, voyage routing,
and port-operations analysis
for bulk-cargo maritime
customers.
ADTech provides engineering
services and related
manufacturing, principally
for the U.S. Department of
Defense and NASA and their
prime contractors.
Defense Subsea
TechnologiesDesign, build, and operate unique maritime and
specialized harsh-environment
systems for governmental and
commercial customers.
Marine ServicesFull   service ship repair
capabilities for U.S. Navy
vessels, including submarines,
surface ships and crafts, and
deep submergence systems.
Design, repair, maintenance,
modi   cation and installation
of hull, mechanical, and electrical (HM&E) systems.
Space SystemsTurnkey design, development,
manufacturing, certification,
maintenance, testing and
sustaining engineering for
space   based robotics and
automation, satellite servicing,
human spaceflight systems,
and thermal protection
systems.
Oceaneering International, Inc.

LETTER TO SHAREHOLDERS
In 2023, we delivered on our expectation to achieve improved financial results. Our consolidated revenue increased 17% to
$2.4 billion, with growth in each of our operating segments. Our Subsea Robotics (SSR), Offshore Projects Group (OPG), and Aerospace and
Defense Technologies (ADTech) segments generated the highest levels of revenue since 2018 based on our realigned reporting segment structure.
Adjusted EBITDA increased significantly as compared to 2022, our fifth consecutive year of improvement, and we generated free cash flow that
was more than double that of 2022.
Additional financial highlights of 2023 include:
    Growing net income to $97.4 million, a year-over-year improvement of $71.5 million;
    Achieving positive adjusted EBITDA in all of our operating segments, with gains in SSR, Manufactured Products, OPG, and ADTech segments
more than offsetting a decline in our Integrity Management and Digital Solutions (IMDS) segment;
    Generating consolidated operating income of $181 million, a year-over-year improvement of $70.5 million;
    Growing our consolidated backlog to $2.3 billion at the end of 2023, a 20% increase over year-end 2022;
    Retiring our 2024 senior notes using proceeds from our 2023 debt offering together with cash on hand;
    Reducing our long-term debt from $700 million at the end of 2022 to $500 million at the end of 2023, while extending our nearest debt maturity
to February 2028; and
    Growing our enterprise value to $2.2 billion at the end of 2023, as compared to $1.9 billion at the end of 2022.
We continued to develop innovative solutions using our digital and core robotics expertise to increase operational and personnel efficiencies,
reduce costs, minimize risks, and lower the environmental impact of operations in offshore and onshore environments. In 2023, we achieved
operational milestones with several of our digital and automated solutions:

We performed our first commercial project utilizing Freedom   , our hybrid remotely operated vehicle (ROV)/autonomous underwater vehicle
(AUV), which successfully demonstrated its ability to collect significantly improved and more complete data sets than are obtainable through
traditional AUV inspection techniques.

We successfully completed initial deployments of our MaxMover    autonomous counterbalance forklifts at customer facilities.

We conducted the successful field trial of Ocean Perception   , a first-of-its-kind monitoring software for the offshore wind and renewables industry
to mitigate negative impacts to marine mammals.

We expanded a strategic relationship in connection with our PeopleMover automated guided transit vehicle, which provides us with exclusive
sales, manufacturing, and operating rights in key markets.
Other notable operational achievements in 2023 include:
    Our SSR segment continued to achieve outstanding drill-support ROV performance with 99% uptime achieved during the year.
    Our Manufactured Products segment received orders for over 200 MaxMover    autonomous counterbalance forklifts, a 266% increase in orders
over 2022. Manufactured Products    overall order intake for 2023 increased to $649 million, a 22% increase over 2022.
    Our ADTech segment secured a contract to produce the solid rocket booster thermal curtains and produced multiple Crew Module Uprighting
Systems (CMUS) in support of multiple Artemis missions, and received significant orders for submarine rescue, large and small ROVs, and manned
deep submergence systems.
    Our OPG segment solidified its strategic presence in Brazil by securing a five-year contract for the operation of three existing drill pipe riser (DPR)
systems and the production of one new system to support intervention and completion operations.
    The Oceaneering team remained steadfastly focused on life-saving rules, with a significant increase in the number of self-verification audits and the
implementation of engineered improvements across the enterprise to mitigate risks.
We remained sharply focused on sustainability. Our 2023 Task Force on Climate-Related Financial Disclosures (TCFD) Report outlines
our continued commitment to managing the risks and opportunities from climate change, including our 2022 Scope 1 and Scope 2 greenhouse
gas emissions data and our 2030 emission reduction targets against a 2022 baseline. We created a Director of Sustainability position in 2023 to
ensure consistent focus and leadership on sustainability issues. More recently, we strengthened the technology expertise on our Board of Directors by
appointing Ms. Reema Poddar, an experienced innovator, as an independant director.
Looking ahead to 2024, we expect to see continued strong offshore energy activity and stability in our government-related
markets. We forecast our 2024 consolidated revenue to grow steadily by more than 5%, with increased revenue in each of our operating segments,
except OPG. Our focus remains on safely delivering innovative solutions to our customers    most
difficult challenges, both in our traditional offshore energy businesses and our growing mobile robotics,
aerospace and defense, and renewables businesses.
Achieving success is a team sport. I am proud to lead our talented and innovative Oceaneers as we
celebrate Oceaneering   s 60th anniversary this year. Finally, I want to thank our shareholders for their
continued trust and support.
Rod Larson
President and Chief Executive Officer
March 2024
2023 Annual Report

Form 10-K
2023 Financial Highlights
Revenue - $2,425 million
Operating Income - $181 million
Mfd
Products
11%
Mfd Products
20%
SSR
31%
OPG
19%
SSR
52%
OPG
23%
ADTech
16%
ADTech
14%
IMDS
10%
Revenue and Gross Margin
($ in millions)
Revenue
$500
$750
$400
$600
$2,066
$1,828
$2,000
Cash Flow from Operations and Cash
($ in millions)
Gross Margin
$2,425
$2,500
$2,048
$1,869
$1,500
$300
$450
$1,000
$200
$300
$500
$100
$150
$0
$0
2019
IMDS
4%
2020
2021
Revenue
2022
$538
$569
$462
$452
$374
$0
2023
Gross Margin
2019
2020
2021
2022
Year End Cash and Cash Equivalents
Net Cash Provided by Operating Activities
Oceaneering
Oceaneering International,
International, Inc.
Inc.
2023

3/29/2024 Letter Continued (Full PDF)

 

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