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Net income of $1.3 million, or $0.02 per share, reported for the quarter, which included charges and credits totaling $3.9 million ($3.1 million, after-tax, or $0.05 per share)
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Adjusted net income of $4.4 million, or $0.07 per share, excluding charges and credits (a non-GAAP measure(1))
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Consolidated revenues of $186.4 million increased 11% sequentially, driven primarily by the timing of conversion of orders from backlog along with modest U.S. oil-focused completion market share gains
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Adjusted EBITDA (a non-GAAP measure(1)) of $21.3 million increased 38% sequentially
-
Received cash proceeds of $10.3 million in connection with the sale of a previously idled facility
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Purchased $11.5 million principal amount of our 4.75% convertible senior notes at a discount and $2.4 million of our common stock
HOUSTON, July 29, 2024--(BUSINESS WIRE)--Oil States International, Inc. (NYSE: OIS):
| Three Months Ended | % Change | ||||||||||||||||
| (Unaudited, In Thousands, Except Per Share Amounts) | June 30, | March 31, | June 30, | Sequential | Year-over-Year | ||||||||||||
| Consolidated results: | |||||||||||||||||
| Revenues | $ | 186,383 | $ | 167,262 | $ | 183,529 | 11% | 2% | |||||||||
| Operating income (loss)(3) | $ | 2,045 | $ | (11,177 | ) | $ | 3,269 | n.m. | (37)% | ||||||||
| Net income (loss) | $ | 1,301 | $ | (13,374 | ) | $ | 558 | n.m. | 133% | ||||||||
| Adjusted net income (loss), excluding charges and credits(1) | $ | 4,391 | $ | (1,873 | ) | $ | 558 | n.m. | n.m. | ||||||||
| Adjusted EBITDA(1) | $ | 21,306 | $ | 15,455 | $ | 19,016 | 38% | 12% | |||||||||
| Revenues by segment(2): | |||||||||||||||||
| Offshore Manufactured Products | $ | 101,556 | $ | 86,857 | $ | 78,647 | 17% | 29% | |||||||||
| Well Site Services | 46,421 | 47,292 | 64,536 | (2)% | (28)% | ||||||||||||
| Downhole Technologies | 38,406 | 33,113 | 40,346 | 16% | (5 )% | ||||||||||||
| Revenues by destination: | |||||||||||||||||
| Offshore and international | $ | 118,625 | $ | 100,180 | $ | 89,817 | 18% | 32% | |||||||||
| U.S. land | 67,758 | 67,082 | 93,712 | 1% | (28 )% | ||||||||||||
| Operating income (loss) by segment(2)(3): | |||||||||||||||||
| Offshore Manufactured Products | $ | 14,357 | $ | 10,603 | $ | 8,838 | 35% | 62 % | |||||||||
| Well Site Services | (535 | ) | (419 | ) | 4,732 | (28)% | n.m. | ||||||||||
| Downhole Technologies | (1,141 | ) | (12,079 | ) | (121 | ) | 91% | n.m. | |||||||||
| Adjusted Segment EBITDA(1)(2): | |||||||||||||||||
| Offshore Manufactured Products | $ | 20,131 | $ | 15,800 | $ | 12,994 | 27% | 55% | |||||||||
| Well Site Services | 8,548 | 6,593 | 11,425 | 30% | (25)% | ||||||||||||
| Downhole Technologies | 3,114 | 2,191 | 4,626 | 42% | (33)% | ||||||||||||
___________________
| (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) for the three months ended June 30, 2024 included facility consolidation and other charges totaling $4.4 million. Operating income (loss) for the three months ended March 31, 2024 included goodwill impairment, facility consolidation and other charges totaling $12.5 million. See "Segment Data" below for additional information. |
Oil States International, Inc. reported net income of $1.3 million, or $0.02 per share, and Adjusted EBITDA of $21.3 million for the second quarter of 2024 on revenues of $186.4 million. Reported second quarter 2024 net income included charges and credits of $3.9 million ($3.1 million after-tax, or $0.05 per share). These results compare to revenues of $167.3 million, a net loss of $13.4 million, or $0.21 per share, and Adjusted EBITDA of $15.5 million reported in the first quarter of 2024, which included a non-cash goodwill impairment charge of $10.0 million ($9.5 million after-tax, or $0.15 per share) and facility consolidation and other charges of $2.5 million ($2.0 million after-tax, or $0.03 per share).
Oil States’ President and Chief Executive Officer, Cindy B. Taylor, stated:
"Our second quarter consolidated revenues and Adjusted EBITDA increased 11% and 38% sequentially – driven by higher project-related activity within our Offshore Manufactured Products segment. Our U.S. land revenues in the current quarter reflect our decision to exit a number of underperforming operations within our Well Site Services segment in addition to a 3% sequential-quarter decline in the average rig count.
In the second quarter, our Offshore Manufactured Products segment revenues increased 17% sequentially totaling $102 million, while Adjusted Segment EBITDA rose 27% to $20 million. Bookings totaled $101 million during the quarter compared to $66 million booked in the first quarter of 2024, yielding backlog of $300 million as of June 30 and a quarterly book-to-bill ratio of 1.0x.
"Revenues reported by our Well Site Services segment decreased 2% on a sequential quarter basis, given the impact of lower activity and the segment’s exit of four underperforming locations in the United States over the past six months. Adjusted Segment EBITDA increased 30% from the first quarter of 2024 – reflective of higher customer activity in the Gulf of Mexico and the Permian Basin along with various cost reduction initiatives.
"Our Downhole Technologies segment revenues and Adjusted Segment EBITDA increased 16% and 42%, respectively, from the first quarter of 2024, driven primarily by increased completion product and international perforating sales.
"We continue to focus on improving operations and allocating capital to efficiently and safely provide our customers with advanced technologies and services, while enhancing returns, reducing debt and returning cash to our stockholders. Strong cash flows from operations totaling $10 million allowed for convertible debt and share repurchases in the quarter."
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.
(See Segment Data and Adjusted Segment EBITDA tables below)
Offshore Manufactured Products
Offshore Manufactured Products reported revenues of $101.6 million, operating income of $14.4 million and Adjusted Segment EBITDA of $20.1 million in the second quarter of 2024, compared to revenues of $86.9 million, operating income of $10.6 million and Adjusted Segment EBITDA of $15.8 million reported in the first quarter of 2024. The segment recorded charges of $1.5 million in both the second and first quarters of 2024, associated with the ongoing consolidation of certain manufacturing and service locations. Adjusted Segment EBITDA margin was 20% in the second quarter of 2024 compared to 18% in the first quarter of 2024.
Backlog totaled $300 million as of June 30, 2024. Second quarter bookings totaled $101 million, compared to bookings of $66 million in the first quarter – yielding a quarterly book-to-bill ratio of 1.0x (year-to-date ratio of 0.9x).
Well Site Services
Well Site Services reported revenues of $46.4 million, an operating loss of $0.5 million and Adjusted Segment EBITDA of $8.5 million in the second quarter of 2024, compared to revenues of $47.3 million, an operating loss of $0.4 million and Adjusted Segment EBITDA of $6.6 million reported in the first quarter of 2024. The segment recognized $1.9 million and $0.7 million in costs associated with the consolidation and exit of underperforming locations during the second and first quarters of 2024. Additionally, during the second and first quarters of 2024, the segment recorded costs of $1.0 million and $0.4 million, respectively, associated with the defense of certain patents related to its proprietary technologies. Adjusted Segment EBITDA margin was 18% in the second quarter of 2024, compared to 14% in the first quarter of 2024.
Downhole Technologies
Downhole Technologies reported 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, compared to revenues of $33.1 million, an operating loss of $12.1 million and Adjusted Segment EBITDA of $2.2 million in the first quarter of 2024. Reported results in the first quarter of 2024 included a non-cash goodwill impairment charge of $10.0 million, recorded in connection with the segment realignment discussed above.
Corporate
Corporate operating expenses in the second quarter of 2024 totaled $10.6 million.
Interest Expense, Net
Net interest expense totaled $2.1 million in the second quarter of 2024, which included $0.3 million of non-cash amortization of deferred debt issuance costs.
Income Taxes
During the second quarter of 2024, the Company recognized tax benefit of $0.7 million on pre-tax income of $0.6 million, which included favorable changes in valuation allowances recorded against deferred tax assets and certain non-deductible expenses. The Company recognized tax expense of $24 thousand on a pre-tax loss of $13.4 million in the first quarter of 2024, which included a $7.7 million non-deductible goodwill impairment charge as well as other non-deductible expenses.
Cash Flows
During the second quarter of 2024, cash flows provided by operations totaled $10.2 million and capital expenditures totaled $5.8 million. The Company sold an idle facility and certain other equipment for proceeds totaling $10.5 million in the quarter.
The Company purchased $11.5 million principal amount of its 4.75% convertible senior notes at 94% of par and $2.4 million (543 thousand shares) of its common stock in the second quarter. A total of $15.8 million remains available under the Company’s share repurchase authorization, which extends through February 2025.
Financial Condition
Cash on-hand totaled $25.2 million at June 30, 2024. No borrowings were outstanding under the Company’s asset-based revolving credit facility at June 30, 2024.
Conference Call Information
The call is scheduled for July 29, 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 Report 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 | Six Months Ended | ||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||||||
| Revenues: | |||||||||||||||||||
| Products | $ | 108,579 | $ | 94,329 | $ | 92,630 | $ | 202,908 | $ | 192,470 | |||||||||
| Services | 77,804 | 72,933 | 90,899 | 150,737 | 187,258 | ||||||||||||||
| 186,383 | 167,262 | 183,529 | 353,645 | 379,728 | |||||||||||||||
| Costs and expenses: | |||||||||||||||||||
| Product costs | 82,503 | 75,137 | 72,659 | 157,640 | 151,336 | ||||||||||||||
| Service costs | 59,530 | 56,814 | 69,371 | 116,344 | 141,429 | ||||||||||||||
| Cost of revenues (exclusive of depreciation and amortization expense presented below) | 142,033 | 131,951 | 142,030 | 273,984 | 292,765 | ||||||||||||||
| Selling, general and administrative expense | 26,373 | 22,496 | 23,528 | 48,869 | 47,544 | ||||||||||||||
| Depreciation and amortization expense | 14,698 | 14,195 | 15,537 | 28,893 | 30,793 | ||||||||||||||
| Impairment of goodwill | — | 10,000 | — | 10,000 | — | ||||||||||||||
| Other operating (income) expense, net | 1,234 | (203 | ) | (835 | ) | 1,031 | (518 | ) | |||||||||||
| 184,338 | 178,439 | 180,260 | 362,777 | 370,584 | |||||||||||||||
| Operating income (loss) | 2,045 | (11,177 | ) | 3,269 | (9,132 | ) | 9,144 | ||||||||||||
| Interest expense, net | (2,061 | ) | (2,101 | ) | (2,059 | ) | (4,162 | ) | (4,450 | ) | |||||||||
| Other income (expense), net | 652 | (72 | ) | 210 | 580 | 486 | |||||||||||||
| Income (loss) before income taxes | 636 | (13,350 | ) | 1,420 | (12,714 | ) | 5,180 | ||||||||||||
| Income tax benefit (provision) | 665 | (24 | ) | (862 | ) | 641 | (2,464 | ) | |||||||||||
| Net income (loss) | $ | 1,301 | $ | (13,374 | ) | $ | 558 | $ | (12,073 | ) | $ | 2,716 | |||||||
| Net income (loss) per share: | |||||||||||||||||||
| Basic | $ | 0.02 | $ | (0.21 | ) | $ | 0.01 | $ | (0.19 | ) | $ | 0.04 | |||||||
| Diluted | 0.02 | (0.21 | ) | 0.01 | (0.19 | ) | 0.04 | ||||||||||||
| Weighted average number of common shares outstanding: | |||||||||||||||||||
| Basic | 62,483 | 62,503 | 62,803 | 62,493 | 62,814 | ||||||||||||||
| Diluted | 62,704 | 62,503 | 63,174 | 62,493 | 63,161 | ||||||||||||||
| OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES | |||||||
| CONSOLIDATED BALANCE SHEETS | |||||||
| (In Thousands) | |||||||
| June 30, 2024 | December 31, 2023 | ||||||
| (Unaudited) | |||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 25,188 | $ | 47,111 | |||
| Accounts receivable, net | 203,694 | 203,211 | |||||
| Inventories, net | 217,347 | 202,027 | |||||
| Prepaid expenses and other current assets | 22,587 | 35,648 | |||||
| Total current assets | 468,816 | 487,997 | |||||
| Property, plant, and equipment, net | 270,878 | 280,389 | |||||
| Operating lease assets, net | 22,825 | 21,970 | |||||
| Goodwill, net | 69,789 | 79,867 | |||||
| Other intangible assets, net | 144,505 | 153,010 | |||||
| Other noncurrent assets | 24,365 | 23,253 | |||||
| Total assets | $ | 1,001,178 | $ | 1,046,486 | |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
| Current liabilities: | |||||||
| Current portion of long-term debt | $ | 616 | $ | 627 | |||
| Accounts payable | 62,322 | 67,546 | |||||
| Accrued liabilities | 38,493 | 44,227 | |||||
| Current operating lease liabilities | 6,711 | 6,880 | |||||
| Income taxes payable | 1,184 | 1,233 | |||||
| Deferred revenue | 34,404 | 36,757 | |||||
| Total current liabilities | 143,730 | 157,270 | |||||
| Long-term debt | 124,339 | 135,502 | |||||
| Long-term operating lease liabilities | 18,864 | 18,346 | |||||
| Deferred income taxes | 5,657 | 7,717 | |||||
| Other noncurrent liabilities | 18,199 | 18,106 | |||||
| Total liabilities | 310,789 | 336,941 | |||||
| Stockholders’ equity: | |||||||
| Common stock | 786 | 772 | |||||
| Additional paid-in capital | 1,133,282 | 1,129,240 | |||||
| Retained earnings | 272,845 | 284,918 | |||||
| Accumulated other comprehensive loss | (76,162 | ) | (69,984 | ) | |||
| Treasury stock | (640,362 | ) | (635,401 | ) | |||
| Total stockholders’ equity | 690,389 | 709,545 | |||||
| Total liabilities and stockholders’ equity | $ | 1,001,178 | $ | 1,046,486 | |||
| OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES | |||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
| (In Thousands) | |||||||
| (Unaudited) | |||||||
| Six Months Ended June 30, | |||||||
| 2024 | 2023 | ||||||
| Cash flows from operating activities: | |||||||
| Net income (loss) | $ | (12,073 | ) | $ | 2,716 | ||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||
| Depreciation and amortization expense | 28,893 | 30,793 | |||||
| Impairment of goodwill | 10,000 | — | |||||
| Stock-based compensation expense | 4,056 | 3,361 | |||||
| Amortization of deferred financing costs | 841 | 892 | |||||
| Deferred income tax provision (benefit) | (2,299 | ) | 997 | ||||
| Gains on disposals of assets | (1,355 | ) | (561 | ) | |||
| Gains on extinguishment of 4.75% convertible senior notes | (515 | ) | — | ||||
| Other, net | (379 | ) | (267 | ) | |||
| Changes in operating assets and liabilities: | |||||||
| Accounts receivable | (2,335 | ) | 39,042 | ||||
| Inventories | (16,436 | ) | (21,197 | ) | |||
| Accounts payable and accrued liabilities | (9,504 | ) | (25,924 | ) | |||
| Deferred revenue | (2,353 | ) | 8,237 | ||||
| Other operating assets and liabilities, net | 2,341 | 653 | |||||
| Net cash flows provided by (used in) operating activities | (1,118 | ) | 38,742 | ||||
| Cash flows from investing activities: | |||||||
| Capital expenditures | (15,881 | ) | (17,338 | ) | |||
| Proceeds from disposition of property and equipment | 12,751 | 690 | |||||
| Other, net | (68 | ) | (66 | ) | |||
| Net cash flows used in investing activities | (3,198 | ) | (16,714 | ) | |||
| Cash flows from financing activities: | |||||||
| Revolving credit facility borrowings | 22,619 | 35,592 | |||||
| Revolving credit facility repayments | (22,619 | ) | (35,592 | ) | |||
| Purchases of 4.75% convertible senior notes | (10,846 | ) | — | ||||
| Repayment of 1.50% convertible senior notes | — | (17,315 | ) | ||||
| Other debt and finance lease repayments | (318 | ) | (226 | ) | |||
| Payment of financing costs | (1,111 | ) | (95 | ) | |||
| Purchases of treasury stock | (2,374 | ) | (3,001 | ) | |||
| Shares added to treasury stock as a result of net share settlements due to vesting of stock awards | (2,587 | ) | (1,948 | ) | |||
| Net cash flows used in financing activities | (17,236 | ) | (22,585 | ) | |||
| Effect of exchange rate changes on cash and cash equivalents | (371 | ) | 959 | ||||
| Net change in cash and cash equivalents | (21,923 | ) | 402 | ||||
| Cash and cash equivalents, beginning of period | 47,111 | 42,018 | |||||
| Cash and cash equivalents, end of period | $ | 25,188 | $ | 42,420 | |||
| Cash paid (received) for: | |||||||
| Interest | $ | 3,899 | $ | 4,060 | |||
| Income taxes, net | 1,346 | (1,475 | ) | ||||
| OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES | |||||||||||||||||||
| SEGMENT DATA | |||||||||||||||||||
| (In Thousands) | |||||||||||||||||||
| (Unaudited) | |||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||
| June 30, 2024 | March 31, | June 30, 2023 | June 30, 2024 | June 30, 2023 | |||||||||||||||
| Revenues(1): | |||||||||||||||||||
| Offshore Manufactured Products | |||||||||||||||||||
| Project-driven: | |||||||||||||||||||
| Products | $ | 59,752 | $ | 53,137 | $ | 45,455 | $ | 112,889 | $ | 94,072 | |||||||||
| Services | 31,024 | 25,233 | 24,846 | 56,257 | 49,476 | ||||||||||||||
| 90,776 | 78,370 | 70,301 | 169,146 | 143,548 | |||||||||||||||
| Military and other products | 10,780 | 8,487 | 8,346 | 19,267 | 15,604 | ||||||||||||||
| Total Offshore Manufactured Products | 101,556 | 86,857 | 78,647 | 188,413 | 159,152 | ||||||||||||||
| Well Site Services | 46,421 | 47,292 | 64,536 | 93,713 | 131,594 | ||||||||||||||
| Downhole Technologies | 38,406 | 33,113 | 40,346 | 71,519 | 88,982 | ||||||||||||||
| Total revenues | $ | 186,383 | $ | 167,262 | $ | 183,529 | $ | 353,645 | $ | 379,728 | |||||||||
| Operating income (loss)(1): | |||||||||||||||||||
| Offshore Manufactured Products(2) | $ | 14,357 | $ | 10,603 | $ | 8,838 | $ | 24,960 | $ | 16,536 | |||||||||
| Well Site Services(3) | (535 | ) | (419 | ) | 4,732 | (954 | ) | 11,698 | |||||||||||
| Downhole Technologies(4) | (1,141 | ) | (12,079 | ) | (121 | ) | (13,220 | ) | 1,752 | ||||||||||
| Corporate | (10,636 | ) | (9,282 | ) | (10,180 | ) | (19,918 | ) | (20,842 | ) | |||||||||
| Total operating income | $ | 2,045 | $ | (11,177 | ) | $ | 3,269 | $ | (9,132 | ) | $ | 9,144 | |||||||
________________
| (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. | |
| (2) | Operating income for both the three months ended June 30, 2024 and March 31, 2024 included facility consolidation charges of $1.5 million, associated with the Offshore Manufactured Products segment’s ongoing consolidation and relocation of certain manufacturing and service locations. | |
| (3) | Operating loss for the three months ended June 30, 2024 and March 31, 2024 included $1.9 million and $0.7 million, respectively, in costs associated with consolidation and exit of certain underperforming locations. Additionally, during the three months ended June 30, 2024 and March 31, 2024 the segment incurred $1.0 million and $0.4 million, respectively, of costs associated with the defense of certain Well Site Services segment patents related to proprietary technologies. | |
| (4) | Operating loss for the three months ended March 31, 2024 included a non-cash goodwill impairment charge of $10.0 million, recognized in connection with the segment realignment. |
| OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES | |||||||||||||||||
| RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL INFORMATION | |||||||||||||||||
| ADJUSTED EBITDA (A) | |||||||||||||||||
| (In Thousands) | |||||||||||||||||
| (Unaudited) | |||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||||
| Net income (loss) | $ | 1,301 | $ | (13,374 | ) | $ | 558 | $ | (12,073 | ) | $ | 2,716 | |||||
| Interest expense, net | 2,061 | 2,101 | 2,059 | 4,162 | 4,450 | ||||||||||||
| Income tax provision (benefit) | (665 | ) | 24 | 862 | (641 | ) | 2,464 | ||||||||||
| Depreciation and amortization expense | 14,698 | 14,195 | 15,537 | 28,893 | 30,793 | ||||||||||||
| Impairment of goodwill | — | 10,000 | — | 10,000 | — | ||||||||||||
| Facility consolidation and other charges | 4,426 | 2,509 | — | 6,935 | — | ||||||||||||
| Gains on extinguishment of 4.75% convertible senior notes | (515 | ) | — | — | (515 | ) | — | ||||||||||
| Adjusted EBITDA | $ | 21,306 | $ | 15,455 | $ | 19,016 | $ | 36,761 | $ | 40,423 | |||||||
________________
| (A) | The term Adjusted EBITDA consists of net income (loss) plus net interest expense, taxes, depreciation and amortization expense, impairment of goodwill, and facility consolidation 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 | Six Months Ended | ||||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||||||
| Offshore Manufactured Products: | |||||||||||||||||||
| Operating income | $ | 14,357 | $ | 10,603 | $ | 8,838 | $ | 24,960 | $ | 16,536 | |||||||||
| Other income (expense), net | (20 | ) | 41 | 81 | 21 | 246 | |||||||||||||
| Depreciation and amortization expense | 4,247 | 3,693 | 4,075 | 7,940 | 8,150 | ||||||||||||||
| Facility consolidation and other charges | 1,547 | 1,463 | — | 3,010 | — | ||||||||||||||
| Adjusted Segment EBITDA | $ | 20,131 | $ | 15,800 | $ | 12,994 | $ | 35,931 | $ | 24,932 | |||||||||
| Well Site Services: | |||||||||||||||||||
| Operating income (loss) | $ | (535 | ) | $ | (419 | ) | $ | 4,732 | $ | (954 | ) | $ | 11,698 | ||||||
| Other income (expense), net | 157 | (113 | ) | 129 | 44 | 240 | |||||||||||||
| Depreciation and amortization expense | 6,047 | 6,079 | 6,564 | 12,126 | 12,710 | ||||||||||||||
| Facility consolidation and other charges | 2,879 | 1,046 | — | 3,925 | — | ||||||||||||||
| Adjusted Segment EBITDA | $ | 8,548 | $ | 6,593 | $ | 11,425 | $ | 15,141 | $ | 24,648 | |||||||||
| Downhole Technologies: | |||||||||||||||||||
| Operating income (loss) | $ | (1,141 | ) | $ | (12,079 | ) | $ | (121 | ) | $ | (13,220 | ) | $ | 1,752 | |||||
| Depreciation and amortization expense | 4,255 | 4,270 | 4,747 | 8,525 | 9,615 | ||||||||||||||
| Impairment of goodwill | — | 10,000 | — | 10,000 | — | ||||||||||||||
| Adjusted Segment EBITDA | $ | 3,114 | $ | 2,191 | $ | 4,626 | $ | 5,305 | $ | 11,367 | |||||||||
| Corporate: | |||||||||||||||||||
| Operating loss | $ | (10,636 | ) | $ | (9,282 | ) | $ | (10,180 | ) | $ | (19,918 | ) | $ | (20,842 | ) | ||||
| Other income, net | 515 | — | — | 515 | — | ||||||||||||||
| Depreciation and amortization expense | 149 | 153 | 151 | 302 | 318 | ||||||||||||||
| Gains on extinguishment of 4.75% convertible senior notes | (515 | ) | — | — | (515 | ) | — | ||||||||||||
| Adjusted Segment EBITDA | $ | (10,487 | ) | $ | (9,129 | ) | $ | (10,029 | ) | $ | (19,616 | ) | $ | (20,524 | ) | ||||
________________
| (B) | The term Adjusted Segment EBITDA consists of operating income (loss) plus other income (expense), depreciation and amortization expense, impairment of goodwill, and facility consolidation 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 | Six Months Ended | ||||||||||||||||
| June 30, | March 31, | June 30, | June 30, | June 30, | |||||||||||||
| Net income (loss) | $ | 1,301 | $ | (13,374 | ) | $ | 558 | $ | (12,073 | ) | $ | 2,716 | |||||
| Impairment of goodwill | — | 10,000 | — | 10,000 | — | ||||||||||||
| Facility consolidation and other charges | 4,426 | 2,509 | — | 6,935 | — | ||||||||||||
| Gains on extinguishment of 4.75% convertible senior notes | (515 | ) | — | — | (515 | ) | — | ||||||||||
| Total adjustments, before taxes | 3,911 | 12,509 | — | 16,420 | — | ||||||||||||
| Tax benefit | (821 | ) | (1,008 | ) | — | (1,829 | ) | — | |||||||||
| Total adjustments, net of taxes | 3,090 | 11,501 | — | 14,591 | — | ||||||||||||
| Adjusted net income (loss), excluding charges and credits | $ | 4,391 | $ | (1,873 | ) | $ | 558 | $ | 2,518 | $ | 2,716 | ||||||
| Adjusted weighted average number of diluted common shares outstanding (E) | 62,704 | 62,503 | 63,174 | 62,708 | 63,161 | ||||||||||||
| Adjusted diluted net income (loss) per share, excluding charges and credits (E) | $ | 0.07 | $ | (0.03 | ) | $ | 0.01 | $ | 0.04 | $ | 0.04 | ||||||
________________
| (C) | Adjusted net income (loss), excluding charges and credits consists of net income (loss) plus impairment of goodwill and facility consolidation and other charges, less gains on extinguishment of the 2026 Notes. Adjusted net income (loss), 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 (loss), excluding charges and credits as a supplemental disclosure because its management believes that adjusted net income (loss), excluding charges and credits provides investors a helpful measure for comparing its operating performance with previous and subsequent periods. | |
| (D) | Adjusted net income (loss) per share, excluding charges and credits is calculated as adjusted net income (loss), excluding charges and credits divided by the weighted average number of common shares outstanding. Adjusted net income (loss) 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 (loss) per share, excluding charges and credits as a supplemental disclosure because its management believes that adjusted net income (loss) 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 six months ended June 30, 2024 included 215 thousand shares issuable pursuant to outstanding performance share units. |
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Contacts
Lloyd A. Hajdik
Oil States International, Inc.
Executive Vice President, Chief Financial Officer and Treasurer
(713) 652-0582