Company Announcements

Oil States Announces Third Quarter 2024 Results

  • Net loss of $14.3 million, or $0.23 per share, reported for the quarter, which included restructuring and other charges totaling $18.2 million ($17.0 million, after-tax, or $0.27 per share)
  • Adjusted net income of $2.7 million, or $0.04 per share, excluding these restructuring and other charges (a non-GAAP measure(1))
  • Consolidated revenues of $174.3 million decreased 6% sequentially, driven primarily by lower U.S. land-based activity and transitory project delays in the Gulf of Mexico
  • Adjusted EBITDA (a non-GAAP measure(1)) of $21.5 million increased 1% sequentially
  • Well Site Services segment name changed to the Completion and Production Services segment following the sale of its remaining drilling rigs and exit of its flowback and well testing service offering
  • Generated cash flows from operations of $28.8 million
  • Purchased $3 million of our common stock
  • Board of Directors approved a new $50 million common stock repurchase authorization, which expires in October 2026

HOUSTON--(BUSINESS WIRE)--Oct. 30, 2024-- Oil States International, Inc. (NYSE: OIS):

 

Three Months Ended

 

% Change

(Unaudited, In Thousands, Except Per Share Amounts)

September 30,
2024

 

June 30,
2024

 

September 30,
2023

 

Sequential

 

Year-over-Year

Consolidated results:

 

 

 

 

 

 

 

 

 

Revenues

$

174,348

 

 

$

186,383

 

 

$

194,289

 

 

(6

)%

 

(10

)%

Operating income (loss)(3)

$

(11,041

)

 

$

2,045

 

 

$

6,190

 

 

n.m.

 

n.m.

Net income (loss)

$

(14,349

)

 

$

1,301

 

 

$

4,212

 

 

n.m.

 

n.m.

Adjusted net income, excluding charges and credits(1)

$

2,696

 

 

$

4,391

 

 

$

5,515

 

 

(39

)%

 

(51

)%

Adjusted EBITDA(1)

$

21,531

 

 

$

21,306

 

 

$

23,441

 

 

1

%

 

(8

)%

 

 

 

 

 

 

 

 

 

 

Revenues by segment(2):

 

 

 

 

 

 

 

 

 

Offshore Manufactured Products

$

102,234

 

 

$

101,556

 

 

$

96,070

 

 

1

%

 

6

%

Completion and Production Services

 

40,099

 

 

 

46,421

 

 

 

59,831

 

 

(14

)%

 

(33

)%

Downhole Technologies

 

32,015

 

 

 

38,406

 

 

 

38,388

 

 

(17

)%

 

(17

)%

 

 

 

 

 

 

 

 

 

 

Revenues by destination:

 

 

 

 

 

 

 

 

 

Offshore and international

$

113,856

 

 

$

118,625

 

 

$

104,750

 

 

(4

)%

 

9

%

U.S. land

 

60,492

 

 

 

67,758

 

 

 

89,539

 

 

(11

)%

 

(32

)%

 

 

 

 

 

 

 

 

 

 

Operating income (loss) by segment(2)(3):

 

 

 

 

 

 

 

 

 

Offshore Manufactured Products

$

19,310

 

 

$

14,357

 

 

$

15,586

 

 

34

%

 

24

%

Completion and Production Services

 

(18,267

)

 

 

(535

)

 

 

3,285

 

 

n.m.

 

n.m.

Downhole Technologies

 

(3,653

)

 

 

(1,141

)

 

 

(1,900

)

 

(220

)%

 

(92

)%

 

 

 

 

 

 

 

 

 

 

Adjusted Segment EBITDA(1)(2):

 

 

 

 

 

 

 

 

 

Offshore Manufactured Products

$

23,303

 

 

$

20,131

 

 

$

21,708

 

 

16

%

 

7

%

Completion and Production Services

 

5,413

 

 

 

8,548

 

 

 

9,716

 

 

(37

)%

 

(44

)%

Downhole Technologies

 

1,078

 

 

 

3,114

 

 

 

2,646

 

 

(65

)%

 

(59

)%

___________________

(1)

 

These are non-GAAP measures. See “Reconciliations of GAAP to Non-GAAP Financial Information” tables below for reconciliations to their most comparable GAAP measures as well as further clarification and explanation.

(2)

 

In first quarter 2024, certain short-cycle, consumable product operations historically reported within the Offshore Manufactured Products segment were integrated into the Downhole Technologies segment. Historical segment financial data, backlog and other information were conformed with the revised segment presentation.

(3)

 

Operating income (loss) included intangible and operating lease asset impairment, facility consolidation and closure, patent defense and other charges totaling: $18.2 million for the three months ended September 30, 2024; $4.4 million for the three months ended June 30, 2024; and $1.6 million for the three months ended September 30, 2023. See “Segment Data” below for additional information.

Oil States International, Inc. reported a net loss of $14.3 million, or $0.23 per share, and Adjusted EBITDA of $21.5 million for the third quarter of 2024 on revenues of $174.3 million. Reported third quarter 2024 net loss included charges of $18.2 million ($17.0 million after-tax or $0.27 per share) associated with the restructuring of certain of its U.S. land-based operations, facility closures, patent defense and personnel reductions. These results compare to revenues of $186.4 million, net income of $1.3 million, or $0.02 per share, and Adjusted EBITDA of $21.3 million reported in the second quarter of 2024, which included facility consolidation charges and other credits of $3.9 million ($3.1 million after-tax, or $0.05 per share).

Oil States’ President and Chief Executive Officer, Cindy B. Taylor, stated:

“Our third quarter 2024 results were led by offshore and international project activity and associated backlog conversion, partially offset by transitory customer delays in completion and intervention projects in the Gulf of Mexico and declines in completions-related spending by our U.S. customers. While storms in the Gulf of Mexico tempered our Completion and Production Services results this quarter, our personnel remained safe and the Company’s facilities did not sustain significant damage. We expect activities to resume in the Gulf in the fourth quarter following delays caused by Hurricane Milton.

“Our Offshore Manufactured Products segment revenues were flat sequentially, totaling $102 million in the third quarter, while Adjusted Segment EBITDA rose 16% to $23 million on a favorable revenue mix. Bookings increased 11% sequentially, totaling $112 million during the quarter compared to $101 million booked in the second quarter of 2024, yielding backlog of $313 million as of September 30 and a quarterly book-to-bill ratio of 1.1x. The outlook for our offshore and international project-driven business remains strong with growing market acceptance of our new technology offerings such as the integrated riser joint used in managed pressure drilling operations.

“Given the highly cyclical nature of select U.S. service lines, we made a strategic decision to close five additional underperforming gas-focused locations within our Completion and Production Services segment and one within our Downhole Technologies segment. Strategic optimization efforts in our U.S. operations along with the exit of more commoditized business lines should enhance operating margins in future periods.”

Business Segment Results

In first quarter 2024, certain short-cycle, consumable product operations historically reported within the Offshore Manufactured Products segment (legacy frac plugs and elastomer products) were integrated into our Downhole Technologies segment to better align with the underlying activity demand drivers and current segment management structure, as well as provide for additional operational synergies. Historical segment financial data (GAAP and non-GAAP), backlog and other information were conformed with the revised segment presentation. Additionally, following the sale of its remaining U.S. land-based drilling rigs and the exit of the flowback and well testing service offering in the third quarter of 2024, the Company’s Well Site Services segment name was changed to the Completion and Production Services segment.

(See Segment Data and Adjusted Segment EBITDA tables below)

Offshore Manufactured Products

Offshore Manufactured Products reported revenues of $102.2 million, operating income of $19.3 million and Adjusted Segment EBITDA of $23.3 million in the third quarter of 2024, compared to revenues of $101.6 million, operating income of $14.4 million and Adjusted Segment EBITDA of $20.1 million reported in the second quarter of 2024. Adjusted Segment EBITDA margin was 23% in the third quarter of 2024 compared to 20% in the second quarter of 2024.

The segment’s reported operating income in the third and second quarters of 2024 included costs of $0.4 million and $1.5 million, respectively, associated with the consolidation of certain locations and personnel reductions.

Backlog totaled $313 million as of September 30, 2024. Third quarter bookings increased 11%, totaling $112 million, compared to bookings of $101 million in the second quarter – yielding a quarterly book-to-bill ratio of 1.1x and a year-to-date ratio of 1.0x.

Completion and Production Services

Completion and Production Services reported revenues of $40.1 million, an operating loss of $18.3 million and Adjusted Segment EBITDA of $5.4 million in the third quarter of 2024, compared to revenues of $46.4 million, an operating loss of $0.5 million and Adjusted Segment EBITDA of $8.5 million reported in the second quarter of 2024. Adjusted Segment EBITDA margin was 13% in the third quarter of 2024, compared to 18% in the second quarter of 2024.

During the third quarter of 2024, the segment implemented restructuring actions in its U.S. land-based businesses to reduce costs and improve future operating margins, which included the exit of two service offerings and the closure of five additional underperforming facilities as well as associated reductions in its U.S. workforce. As a result of these and other strategic actions previously taken, the segment’s operating loss for the third quarter of 2024 included $12.9 million of non-cash intangible and operating lease asset impairment charges, $2.2 million of costs associated with the exit of underperforming service locations and $0.8 million of other restructuring charges. During the second quarter of 2024, the segment recorded costs of $1.9 million associated with the consolidation and exit of underperforming service locations. Additionally, during the second and third quarters of 2024, the segment recorded costs totaling $2.3 million associated with the enforcement of certain patents related to its proprietary technologies.

The segment’s U.S. land-based service offerings and facilities exited during the third quarter of 2024 collectively generated revenues of $9.3 million and operating losses of $17.1 million in the current quarter, which included intangible and operating lease asset impairment charges of $12.9 million, facility closure and other charges totaling $2.2 million as well as depreciation and amortization expense of $1.3 million. During the first nine months of 2024, service offerings and facilities exited in 2024 collectively generated revenues of $35.8 million and operating losses of $24.0 million, which included intangible and operating lease asset impairment charges of $12.9 million, facility closure and other charges totaling $4.6 million as well as depreciation and amortization expense of $4.2 million.

Downhole Technologies

Downhole Technologies reported revenues of $32.0 million, an operating loss of $3.7 million and Adjusted Segment EBITDA of $1.1 million in the third quarter of 2024, compared to revenues of $38.4 million, an operating loss of $1.1 million and Adjusted Segment EBITDA of $3.1 million in the second quarter of 2024. Adjusted Segment EBITDA margin was 3% in the third quarter of 2024, compared to 8% in the second quarter of 2024.

During the third quarter of 2024, the segment implemented actions to reduce costs and improve future operating margins, which included the exit of an underperforming location as well as reductions in its U.S. workforce. The segment’s operating loss in the third quarter of 2024 included costs of $1.2 million associated with an operating lease asset impairment, workforce reductions and a customer bankruptcy.

Corporate

Corporate operating expenses in the third quarter of 2024 totaled $8.4 million.

Interest Expense, Net

Net interest expense totaled $1.8 million in the third quarter of 2024, which included $0.3 million of non-cash amortization of deferred debt issuance costs.

Income Taxes

During the third quarter of 2024, the Company recognized tax expense of $2.2 million on a pre-tax loss of $12.1 million, which included unfavorable changes in valuation allowances recorded against deferred tax assets and certain non-deductible expenses. The Company recognized a tax benefit of $0.7 million on pre-tax income of $0.6 million in the second quarter of 2024, which included favorable changes in valuation allowances recorded against deferred tax assets and certain non-deductible expenses.

Cash Flows

During the third quarter of 2024, cash flows provided by operations totaled $28.8 million and capital expenditures, net totaled $4.8 million. Net debt (total debt less cash and cash equivalents) was reduced by $20.5 million as a result.

The Company purchased $2.8 million of its common stock in the third quarter. As of September 30, 2024, the Company has repurchased $12.4 million of its common stock under a Board approved program. On October 24, 2024, the Company’s Board of Directors terminated the Company’s existing share repurchase program and replaced it with a new $50 million authorization which expires in October 2026.

Financial Condition

Cash on-hand totaled $46.0 million at September 30, 2024. No borrowings were outstanding under the Company’s asset-based revolving credit facility at September 30, 2024.

Conference Call Information

The call is scheduled for October 30, 2024 at 9:00 a.m. Central Daylight Time, is being webcast and can be accessed from the Company’s website at www.ir.oilstatesintl.com. Participants may also join the conference call by dialing 1 (888) 210-3346 in the United States or by dialing +1 (646) 960-0253 internationally and using the passcode 7534957. A replay of the conference call will be available approximately two hours after the completion of the call and can be accessed from the Company’s website at www.ir.oilstatesintl.com.

About Oil States

Oil States International, Inc. is a global provider of manufactured products and services to customers in the energy, industrial and military sectors. The Company’s manufactured products include highly engineered capital equipment and consumable products. Oil States is headquartered in Houston, Texas with manufacturing and service facilities strategically located across the globe. Oil States is publicly traded on the New York Stock Exchange under the symbol “OIS”.

For more information on the Company, please visit Oil States International’s website at www.oilstatesintl.com.

Cautionary Language Concerning Forward Looking Statements

The foregoing contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are those that do not state historical facts and are, therefore, inherently subject to risks and uncertainties. The forward-looking statements included herein are based on current expectations and entail various risks and uncertainties that could cause actual results to differ materially from those forward-looking statements. Such risks and uncertainties include, among others, the level of supply and demand for oil and natural gas, fluctuations in the current and future prices of oil and natural gas, the level of exploration, drilling and completion activity, general global economic conditions, the cyclical nature of the oil and natural gas industry, geopolitical conflicts and tensions, the financial health of our customers, the actions of the Organization of Petroleum Exporting Countries (“OPEC”) and other producing nations with respect to crude oil production levels and pricing, the impact of environmental matters, including executive actions and regulatory efforts to adopt environmental or climate change regulations that may result in increased operating costs or reduced oil and natural gas production or demand globally, consolidation of our customers, our ability to access and the cost of capital in the bank and capital markets, our ability to develop new competitive technologies and products, and other factors discussed in the “Business” and “Risk Factors” sections of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, and the subsequently filed Quarterly Reports on Form 10-Q and Periodic Reports on Form 8-K. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof, and, except as required by law, the Company undertakes no obligation to update those statements or to publicly announce the results of any revisions to any of those statements to reflect future events or developments.

 

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES

 

CONSOLIDATED STATEMENTS OF OPERATIONS

(In Thousands, Except Per Share Amounts)

(Unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

September 30,
2024

 

June 30,
2024

 

September 30,
2023

 

September 30,
2024

 

September 30,
2023

Revenues:

 

 

 

 

 

 

 

 

 

Products

$

100,798

 

 

$

108,579

 

 

$

102,636

 

 

$

303,706

 

 

$

295,106

 

Services

 

73,550

 

 

 

77,804

 

 

 

91,653

 

 

 

224,287

 

 

 

278,911

 

 

 

174,348

 

 

 

186,383

 

 

 

194,289

 

 

 

527,993

 

 

 

574,017

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

Product costs

 

79,167

 

 

 

82,503

 

 

 

80,188

 

 

 

236,807

 

 

 

231,524

 

Service costs

 

57,422

 

 

 

59,530

 

 

 

70,239

 

 

 

173,766

 

 

 

211,668

 

Cost of revenues (exclusive of depreciation and amortization expense presented below)

 

136,589

 

 

 

142,033

 

 

 

150,427

 

 

 

410,573

 

 

 

443,192

 

Selling, general and administrative expense

 

22,754

 

 

 

26,373

 

 

 

24,241

 

 

 

71,623

 

 

 

71,785

 

Depreciation and amortization expense

 

13,635

 

 

 

14,698

 

 

 

15,416

 

 

 

42,528

 

 

 

46,209

 

Impairment of goodwill

 

 

 

 

 

 

 

 

 

 

10,000

 

 

 

 

Impairments of intangible assets

 

10,787

 

 

 

 

 

 

 

 

 

10,787

 

 

 

 

Impairments of operating lease assets

 

2,579

 

 

 

 

 

 

 

 

 

2,579

 

 

 

 

Other operating (income) expense, net

 

(955

)

 

 

1,234

 

 

 

(1,985

)

 

 

76

 

 

 

(2,503

)

 

 

185,389

 

 

 

184,338

 

 

 

188,099

 

 

 

548,166

 

 

 

558,683

 

Operating income (loss)

 

(11,041

)

 

 

2,045

 

 

 

6,190

 

 

 

(20,173

)

 

 

15,334

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

(1,824

)

 

 

(2,061

)

 

 

(1,928

)

 

 

(5,986

)

 

 

(6,378

)

Other income, net

 

731

 

 

 

652

 

 

 

186

 

 

 

1,311

 

 

 

672

 

Income (loss) before income taxes

 

(12,134

)

 

 

636

 

 

 

4,448

 

 

 

(24,848

)

 

 

9,628

 

Income tax benefit (provision)

 

(2,215

)

 

 

665

 

 

 

(236

)

 

 

(1,574

)

 

 

(2,700

)

Net income (loss)

$

(14,349

)

 

$

1,301

 

 

$

4,212

 

 

$

(26,422

)

 

$

6,928

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share:

 

 

 

 

 

 

 

 

 

Basic

$

(0.23

)

 

$

0.02

 

 

$

0.07

 

 

$

(0.42

)

 

$

0.11

 

Diluted

 

(0.23

)

 

 

0.02

 

 

 

0.07

 

 

 

(0.42

)

 

 

0.11

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

62,084

 

 

 

62,483

 

 

 

62,651

 

 

 

62,357

 

 

 

62,760

 

Diluted

 

62,084

 

 

 

62,704

 

 

 

63,060

 

 

 

62,357

 

 

 

63,135

 

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES

 

CONSOLIDATED BALANCE SHEETS

(In Thousands)

 

 

September 30, 2024

 

December 31, 2023

 

(Unaudited)

 

 

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

45,984

 

 

$

47,111

 

Accounts receivable, net

 

182,536

 

 

 

203,211

 

Inventories, net

 

221,134

 

 

 

202,027

 

Prepaid expenses and other current assets

 

29,257

 

 

 

35,648

 

Total current assets

 

478,911

 

 

 

487,997

 

 

 

 

 

Property, plant, and equipment, net

 

267,388

 

 

 

280,389

 

Operating lease assets, net

 

21,601

 

 

 

21,970

 

Goodwill, net

 

70,439

 

 

 

79,867

 

Other intangible assets, net

 

129,866

 

 

 

153,010

 

Other noncurrent assets

 

25,936

 

 

 

23,253

 

Total assets

$

994,141

 

 

$

1,046,486

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Current portion of long-term debt

$

634

 

 

$

627

 

Accounts payable

 

55,506

 

 

 

67,546

 

Accrued liabilities

 

39,978

 

 

 

44,227

 

Current operating lease liabilities

 

7,295

 

 

 

6,880

 

Income taxes payable

 

2,616

 

 

 

1,233

 

Deferred revenue

 

34,742

 

 

 

36,757

 

Total current liabilities

 

140,771

 

 

 

157,270

 

 

 

 

 

Long-term debt

 

124,643

 

 

 

135,502

 

Long-term operating lease liabilities

 

19,392

 

 

 

18,346

 

Deferred income taxes

 

5,291

 

 

 

7,717

 

Other noncurrent liabilities

 

19,238

 

 

 

18,106

 

Total liabilities

 

309,335

 

 

 

336,941

 

 

 

 

 

Stockholders’ equity:

 

 

 

Common stock

 

786

 

 

 

772

 

Additional paid-in capital

 

1,135,634

 

 

 

1,129,240

 

Retained earnings

 

258,496

 

 

 

284,918

 

Accumulated other comprehensive loss

 

(66,595

)

 

 

(69,984

)

Treasury stock

 

(643,515

)

 

 

(635,401

)

Total stockholders’ equity

 

684,806

 

 

 

709,545

 

Total liabilities and stockholders’ equity

$

994,141

 

 

$

1,046,486

 

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

(Unaudited)

 

 

Nine Months Ended September 30,

 

 

2024

 

 

 

2023

 

Cash flows from operating activities:

 

 

 

Net income (loss)

$

(26,422

)

 

$

6,928

 

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

Depreciation and amortization expense

 

42,528

 

 

 

46,209

 

Impairment of goodwill

 

10,000

 

 

 

 

Impairments of intangible assets

 

10,787

 

 

 

 

Impairments of operating lease assets

 

2,579

 

 

 

 

Stock-based compensation expense

 

6,408

 

 

 

5,157

 

Amortization of deferred financing costs

 

1,168

 

 

 

1,344

 

Deferred income tax benefit

 

(2,798

)

 

 

(66

)

Gains on disposals of assets

 

(2,956

)

 

 

(3,335

)

Gains on extinguishment of 4.75% convertible senior notes

 

(515

)

 

 

 

Other, net

 

83

 

 

 

(614

)

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

 

21,173

 

 

 

29,538

 

Inventories

 

(18,406

)

 

 

(23,754

)

Accounts payable and accrued liabilities

 

(17,554

)

 

 

(17,515

)

Deferred revenue

 

(2,015

)

 

 

5,580

 

Other operating assets and liabilities, net

 

3,624

 

 

 

2,905

 

Net cash flows provided by operating activities

 

27,684

 

 

 

52,377

 

 

 

 

 

Cash flows from investing activities:

 

 

 

Capital expenditures

 

(23,309

)

 

 

(23,370

)

Proceeds from disposition of property and equipment

 

15,411

 

 

 

4,374

 

Other, net

 

(431

)

 

 

(120

)

Net cash flows used in investing activities

 

(8,329

)

 

 

(19,116

)

 

 

 

 

Cash flows from financing activities:

 

 

 

Revolving credit facility borrowings

 

22,678

 

 

 

35,693

 

Revolving credit facility repayments

 

(22,678

)

 

 

(35,693

)

Purchases of 4.75% convertible senior notes

 

(10,846

)

 

 

 

Repayment of 1.50% convertible senior notes

 

 

 

 

(17,315

)

Other debt and finance lease repayments

 

(481

)

 

 

(340

)

Payment of financing costs

 

(1,119

)

 

 

(101

)

Purchases of treasury stock

 

(5,149

)

 

 

(3,001

)

Shares added to treasury stock as a result of net share settlements

due to vesting of stock awards

 

(2,596

)

 

 

(1,948

)

Net cash flows used in financing activities

 

(20,191

)

 

 

(22,705

)

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

(291

)

 

 

330

 

Net change in cash and cash equivalents

 

(1,127

)

 

 

10,886

 

Cash and cash equivalents, beginning of period

 

47,111

 

 

 

42,018

 

Cash and cash equivalents, end of period

$

45,984

 

 

$

52,904

 

 

 

 

 

Cash paid (received) for:

 

 

 

Interest

$

4,206

 

 

$

4,353

 

Income taxes, net

 

2,695

 

 

 

(34

)

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES

 

SEGMENT DATA

(In Thousands)

(Unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

September 30,
2024

 

June 30,
2024

 

September 30,
2023

 

September 30,
2024

 

September 30,
2023

Revenues(1):

 

 

 

 

 

 

 

 

 

Offshore Manufactured Products

 

 

 

 

 

 

 

 

 

Project-driven:

 

 

 

 

 

 

 

 

 

Products

$

58,164

 

 

$

59,752

 

 

$

58,169

 

 

$

171,053

 

 

$

152,241

 

Services

 

32,754

 

 

 

31,024

 

 

 

30,391

 

 

 

89,011

 

 

 

79,867

 

 

 

90,918

 

 

 

90,776

 

 

 

88,560

 

 

 

260,064

 

 

 

232,108

 

Military and other products

 

11,316

 

 

 

10,780

 

 

 

7,510

 

 

 

30,583

 

 

 

23,114

 

Total Offshore Manufactured Products

 

102,234

 

 

 

101,556

 

 

 

96,070

 

 

 

290,647

 

 

 

255,222

 

Completion and Production Services

 

40,099

 

 

 

46,421

 

 

 

59,831

 

 

 

133,812

 

 

 

191,425

 

Downhole Technologies

 

32,015

 

 

 

38,406

 

 

 

38,388

 

 

 

103,534

 

 

 

127,370

 

Total revenues

$

174,348

 

 

$

186,383

 

 

$

194,289

 

 

$

527,993

 

 

$

574,017

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)(1):

 

 

 

 

 

 

 

 

 

Offshore Manufactured Products(2)

$

19,310

 

 

$

14,357

 

 

$

15,586

 

 

$

44,270

 

 

$

32,122

 

Completion and Production Services(3)

 

(18,267

)

 

 

(535

)

 

 

3,285

 

 

 

(19,221

)

 

 

14,983

 

Downhole Technologies(4)

 

(3,653

)

 

 

(1,141

)

 

 

(1,900

)

 

 

(16,873

)

 

 

(148

)

Corporate

 

(8,431

)

 

 

(10,636

)

 

 

(10,781

)

 

 

(28,349

)

 

 

(31,623

)

Total operating income (loss)

$

(11,041

)

 

$

2,045

 

 

$

6,190

 

 

$

(20,173

)

 

$

15,334

 

___________________

(1)

 

In the first quarter 2024, certain short-cycle, consumable product operations historically reported within the Offshore Manufactured Products segment were integrated into the Downhole Technologies segment. Historical segment financial results were conformed with the revised segment presentation. Additionally, following the sale of its remaining U.S. land-based drilling rigs and the exit of the flowback and well testing service offerings in the third quarter of 2024, the Company’s Well Site Services segment name was changed to the Completion and Production Services segment.

(2)

 

Operating income for the three months ended September 30, 2024 and June 30, 2024, and the nine months ended September 30, 2024 included facility consolidation charges of $0.4 million, $1.5 million and $3.4 million, respectively, associated with the Offshore Manufactured Products segment’s consolidation and relocation of certain manufacturing and service locations and other cost reduction measures. Operating income for the three and nine months ended September 30, 2023 included facility consolidation charges of $1.6 million associated with the Offshore/Manufactured Products segment's consolidation and relocation of certain manufacturing and service locations.

(3)

 

Operating income (loss) for the three months ended September 30, 2024 and June 30, 2024, and the nine months ended September 30, 2024, included $15.9 million, $1.9 million and $18.5 million, respectively, in costs associated with consolidation and exit of certain underperforming locations. Additionally, during the three months ended September 30, 2024 and June 30, 2024, and the nine months ended September 30, 2024, the segment incurred $1.3 million, $1.0 million and $2.7 million, respectively, of costs associated with the defense of certain Completion and Production Services segment patents related to proprietary technologies.

(4)

 

Operating loss for the nine months ended September 30, 2024 included a non-cash goodwill impairment charge of $10.0 million, recognized in connection with the 2024 segment realignment. Additionally, during the three and nine months ended September 30, 2024, the segment incurred $0.6 million in costs associated primarily with the exit of an underperforming location.

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES

 

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL INFORMATION

ADJUSTED EBITDA (A)

(In Thousands)

(Unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

September 30,
2024

 

June 30,
2024

 

September 30,
2023

 

September 30,
2024

 

September 30,
2023

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

(14,349

)

 

$

1,301

 

 

$

4,212

 

$

(26,422

)

 

$

6,928

Interest expense, net

 

1,824

 

 

 

2,061

 

 

 

1,928

 

 

5,986

 

 

 

6,378

Income tax provision (benefit)

 

2,215

 

 

 

(665

)

 

 

236

 

 

1,574

 

 

 

2,700

Depreciation and amortization expense

 

13,635

 

 

 

14,698

 

 

 

15,416

 

 

42,528

 

 

 

46,209

Impairment of goodwill

 

 

 

 

 

 

 

 

 

10,000

 

 

 

Impairments of intangible assets

 

10,787

 

 

 

 

 

 

 

 

10,787

 

 

 

Impairments of operating lease assets

 

2,579

 

 

 

 

 

 

 

 

2,579

 

 

 

Facility consolidation/closure and other charges

 

4,840

 

 

 

4,426

 

 

 

1,649

 

 

11,775

 

 

 

1,649

Gains on extinguishment of 4.75% convertible senior notes

 

 

 

 

(515

)

 

 

 

 

(515

)

 

 

Adjusted EBITDA

$

21,531

 

 

$

21,306

 

 

$

23,441

 

$

58,292

 

 

$

63,864

________________

(A)

 

The term Adjusted EBITDA consists of net income (loss) plus net interest expense, taxes, depreciation and amortization expense, impairments of goodwill, intangible and operating lease assets, and facility consolidation/closure and other charges, less gains on extinguishment of 4.75% convertible senior notes (“2026 Notes”). Adjusted EBITDA is not a measure of financial performance under generally accepted accounting principles (“GAAP”) and should not be considered in isolation from or as a substitute for net income (loss) or cash flow measures prepared in accordance with GAAP or as a measure of profitability or liquidity. Additionally, Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. The Company has included Adjusted EBITDA as a supplemental disclosure because its management believes that Adjusted EBITDA provides useful information regarding its ability to service debt and to fund capital expenditures and provides investors a helpful measure for comparing its operating performance with the performance of other companies that have different financing and capital structures or tax rates. The Company uses Adjusted EBITDA to compare and to monitor the performance of the Company and its business segments to other comparable public companies and as a benchmark for the award of incentive compensation under its annual incentive compensation plan. The table above sets forth reconciliations of Adjusted EBITDA to net income (loss), which is the most directly comparable measure of financial performance calculated under GAAP.

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES

 

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL INFORMATION

ADJUSTED SEGMENT EBITDA (B)

(In Thousands)

(Unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

September 30,
2024

 

June 30,
2024

 

September 30,
2023

 

September 30,
2024

 

September 30,
2023

Offshore Manufactured Products:

 

 

 

 

 

 

 

 

 

Operating income

$

19,310

 

 

$

14,357

 

 

$

15,586

 

 

$

44,270

 

 

$

32,122

 

Other income (expense), net

 

8

 

 

 

(20

)

 

 

68

 

 

 

29

 

 

 

314

 

Depreciation and amortization expense

 

3,631

 

 

 

4,247

 

 

 

4,405

 

 

 

11,571

 

 

 

12,555

 

Facility consolidation/closure and other charges

 

354

 

 

 

1,547

 

 

 

1,649

 

 

 

3,364

 

 

 

1,649

 

Adjusted Segment EBITDA

$

23,303

 

 

$

20,131

 

 

$

21,708

 

 

$

59,234

 

 

$

46,640

 

 

 

 

 

 

 

 

 

 

 

Completion and Production Services:

 

 

 

 

 

 

 

 

 

Operating income (loss)

$

(18,267

)

 

$

(535

)

 

$

3,285

 

 

$

(19,221

)

 

$

14,983

 

Other income, net

 

723

 

 

 

157

 

 

 

118

 

 

 

767

 

 

 

358

 

Depreciation and amortization expense

 

5,749

 

 

 

6,047

 

 

 

6,313

 

 

 

17,875

 

 

 

19,023

 

Impairments of intangible assets

 

10,787

 

 

 

 

 

 

 

 

 

10,787

 

 

 

 

Impairments of operating lease assets

 

2,092

 

 

 

 

 

 

 

 

 

2,092

 

 

 

 

Facility consolidation/closure and other charges

 

4,329

 

 

 

2,879

 

 

 

 

 

 

8,254

 

 

 

 

Adjusted Segment EBITDA

$

5,413

 

 

$

8,548

 

 

$

9,716

 

 

$

20,554

 

 

$

34,364

 

 

 

 

 

 

 

 

 

 

 

Downhole Technologies:

 

 

 

 

 

 

 

 

 

Operating loss

$

(3,653

)

 

$

(1,141

)

 

$

(1,900

)

 

$

(16,873

)

 

$

(148

)

Depreciation and amortization expense

 

4,121

 

 

 

4,255

 

 

 

4,546

 

 

 

12,646

 

 

 

14,161

 

Impairment of goodwill

 

 

 

 

 

 

 

 

 

 

10,000

 

 

 

 

Impairments of operating lease assets

 

487

 

 

 

 

 

 

487

 

 

 

487

 

 

 

 

Facility consolidation/closure and other charges

 

123

 

 

 

 

 

 

 

 

 

123

 

 

 

 

Adjusted Segment EBITDA

$

1,078

 

 

$

3,114

 

 

$

2,646

 

 

$

6,383

 

 

$

14,013

 

 

 

 

 

 

 

 

 

 

 

Corporate:

 

 

 

 

 

 

 

 

 

Operating loss

$

(8,431

)

 

$

(10,636

)

 

$

(10,781

)

 

$

(28,349

)

 

$

(31,623

)

Other income, net

 

 

 

 

515

 

 

 

 

 

 

515

 

 

 

 

Depreciation and amortization expense

 

134

 

 

 

149

 

 

 

152

 

 

 

436

 

 

 

470

 

Other charges

 

34

 

 

 

 

 

 

 

 

 

34

 

 

 

 

Gains on extinguishment of 4.75% convertible senior notes

 

 

 

 

(515

)

 

 

 

 

 

(515

)

 

 

 

Adjusted Segment EBITDA

$

(8,263

)

 

$

(10,487

)

 

$

(10,629

)

 

$

(27,879

)

 

$

(31,153

)

________________

(B)

 

The term Adjusted Segment EBITDA consists of operating income (loss) plus other income (expense), depreciation and amortization expense, impairments of goodwill, intangible and operating lease assets, and facility consolidation/closure and other charges, less gains on extinguishment of 2026 Notes. Adjusted Segment EBITDA is not a measure of financial performance under GAAP and should not be considered in isolation from or as a substitute for operating income (loss) or cash flow measures prepared in accordance with GAAP or as a measure of profitability or liquidity. Additionally, Adjusted Segment EBITDA may not be comparable to other similarly titled measures of other companies. The Company has included Adjusted Segment EBITDA as supplemental disclosure because its management believes that Adjusted Segment EBITDA provides useful information regarding its ability to service debt and to fund capital expenditures and provides investors a helpful measure for comparing its operating performance with the performance of other companies that have different financing and capital structures or tax rates. The Company uses Adjusted Segment EBITDA to compare and to monitor the performance of its business segments to other comparable public companies and as a benchmark for the award of incentive compensation under its annual incentive compensation plan. The table above sets forth reconciliations of Adjusted Segment EBITDA to operating income (loss), which is the most directly comparable measure of financial performance calculated under GAAP.

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES

 

RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL INFORMATION

ADJUSTED NET INCOME (LOSS), EXCLUDING CHARGES AND CREDITS (C) AND

ADJUSTED NET INCOME (LOSS) PER SHARE, EXCLUDING CHARGES AND CREDITS (D)

(In Thousands, Except Per Share Amounts)

(Unaudited)

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

September 30,
2024

 

June 30,
2024

 

September 30,
2023

 

September 30,
2024

 

September 30,
2023

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

(14,349

)

 

$

1,301

 

 

$

4,212

 

 

$

(26,422

)

 

$

6,928

 

Impairment of goodwill

 

 

 

 

 

 

 

 

 

 

10,000

 

 

 

 

Impairments of intangible assets

 

10,787

 

 

 

 

 

 

 

 

 

10,787

 

 

 

 

Impairments of operating lease assets

 

2,579

 

 

 

 

 

 

 

 

 

2,579

 

 

 

 

Facility consolidation/closure and other charges

 

4,840

 

 

 

4,426

 

 

 

1,649

 

 

 

11,775

 

 

 

1,649

 

Gains on extinguishment of 4.75% convertible senior notes

 

 

 

 

(515

)

 

 

 

 

 

(515

)

 

 

 

Total adjustments, before taxes

 

18,206

 

 

 

3,911

 

 

 

1,649

 

 

 

34,626

 

 

 

1,649

 

Tax benefit

 

(1,161

)

 

 

(821

)

 

 

(346

)

 

 

(2,990

)

 

 

(346

)

Total adjustments, net of taxes

 

17,045

 

 

 

3,090

 

 

 

1,303

 

 

 

31,636

 

 

 

1,303

 

Adjusted net income, excluding charges and credits

$

2,696

 

 

$

4,391

 

 

$

5,515

 

 

$

5,214

 

 

$

8,231

 

 

 

 

 

 

 

 

 

 

 

Adjusted weighted average number of diluted common shares outstanding (E)

 

62,412

 

 

 

62,704

 

 

 

63,060

 

 

 

62,648

 

 

 

63,135

 

 

 

 

 

 

 

 

 

 

 

Adjusted diluted net income per share, excluding charges and credits (E)

$

0.04

 

 

$

0.07

 

 

$

0.09

 

 

$

0.08

 

 

$

0.13

 

___________________

(C)

Adjusted net income, excluding charges and credits consists of net income (loss) plus impairments of goodwill, intangible and operating lease assets, and facility consolidation/closure and other charges, less gains on extinguishment of the 2026 Notes. Adjusted net income, excluding charges and credits is not a measure of financial performance under GAAP and should not be considered in isolation from or as a substitute for net income (loss) as prepared in accordance with GAAP. The Company has included adjusted net income, excluding charges and credits as a supplemental disclosure because its management believes that adjusted net income, excluding charges and credits provides investors a helpful measure for comparing its operating performance with previous and subsequent periods.

(D)

Adjusted net income per share, excluding charges and credits is calculated as adjusted net income, excluding charges and credits divided by the weighted average number of common shares outstanding. Adjusted net income per share, excluding charges and credits is not a measure of financial performance under GAAP and should not be considered in isolation from or as a substitute for net income (loss) per share as prepared in accordance with GAAP. The Company has included adjusted net income per share, excluding charges and credits as a supplemental disclosure because its management believes that adjusted net income per share, excluding charges and credits provides investors a helpful measure for comparing its operating performance with previous and subsequent periods.

(E)

The calculation of diluted adjusted earnings per share for the three and nine months ended September 30, 2024 included 328 thousand shares and 292 thousand shares, respectively, issuable pursuant to outstanding performance share units.

 

Lloyd A. Hajdik
Oil States International, Inc.
Executive Vice President, Chief Financial Officer and Treasurer
(713) 652-0582

Source: Oil States International, Inc.