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Oil States Announces First Quarter 2024 Results

  • Net loss of $13.4 million, or $0.21 per diluted share, reported for the quarter, which included a non-cash goodwill impairment charge totaling $10.0 million ($9.5 million, after-tax, or $0.15 per share)
  • Net loss of $1.9 million, or $0.03 per diluted share, excluding goodwill and other charges (a non-GAAP measure(1))
  • Consolidated revenues of $167.3 million decreased 20% sequentially, driven primarily by the timing of conversion of orders from backlog
  • Adjusted EBITDA (a non-GAAP measure(1)) of $15.5 million
  • Received two 2024 Spotlight on New Technology™ Awards from the Offshore Technology Conference for our Ultra-deepwater Swift™ connector design and our ACTIVEHub™ platform with ACTIVELatch™ technology
  • Realigned operating segments and recast historical segment-related information

Oil States International, Inc. (NYSE: OIS):

 

Three Months Ended

 

% Change

(Unaudited, In Thousands, Except Per Share Amounts)

March 31,

2024

 

December 31,

2023

 

March 31,

2023

 

Sequential

 

Year-over-Year

Consolidated results:

 

 

 

 

 

 

 

 

 

Revenues

$

167,262

 

 

$

208,266

 

 

$

196,199

 

(20

)%

 

(15

)%

Operating income (loss)(2)(3)

$

(11,177

)

 

$

7,830

 

 

$

5,875

 

n.m.

 

 

n.m.

 

Net income (loss)

$

(13,374

)

 

$

5,963

 

 

$

2,158

 

n.m.

 

 

n.m.

 

Net income (loss), excluding charges(1)

$

(1,873

)

 

$

7,071

 

 

$

2,158

 

n.m.

 

 

n.m.

 

Adjusted EBITDA(1)

$

15,455

 

 

$

23,978

 

 

$

21,407

 

(36

)%

 

(28

)%

 

 

 

 

 

 

 

 

 

 

Revenues by segment(2):

 

 

 

 

 

 

 

 

 

Offshore Manufactured Products

$

86,857

 

 

$

126,489

 

 

$

80,505

 

(31

)%

 

8

%

Well Site Services

 

47,292

 

 

 

51,208

 

 

 

67,058

 

(8

)%

 

(29

)%

Downhole Technologies

 

33,113

 

 

 

30,569

 

 

 

48,636

 

8

%

 

(32

)%

 

 

 

 

 

 

 

 

 

 

Revenues by destination:

 

 

 

 

 

 

 

 

 

U.S. land

$

67,082

 

 

$

72,381

 

 

$

100,537

 

(7

)%

 

(33

)%

Offshore and international

 

100,180

 

 

 

135,885

 

 

 

95,662

 

(26

)%

 

5

%

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

Offshore Manufactured Products

$

10,603

 

 

$

24,167

 

 

$

7,698

 

(56

)%

 

38

%

Well Site Services

 

(419

)

 

 

(1,102

)

 

 

6,966

 

62

%

 

n.m.

 

Downhole Technologies

 

(12,079

)

 

 

(5,726

)

 

 

1,873

 

(111

)%

 

n.m.

 

 

 

 

 

 

 

 

 

 

 

Adjusted Segment EBITDA(1)(2):

 

 

 

 

 

 

 

 

 

Offshore Manufactured Products

$

15,800

 

 

$

28,838

 

 

$

11,938

 

(45

)%

 

32

%

Well Site Services

 

6,593

 

 

 

5,903

 

 

 

13,223

 

12

%

 

(50

)%

Downhole Technologies

 

2,191

 

 

 

(1,420

)

 

 

6,741

 

n.m.

 

 

(67

)%

___________________

(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 first quarter 2024 revised segment presentation. See “2023 Recast Segment Data” tables below for revised 2023 quarterly and full-year information.

(3)

Operating income (loss) for the three months ended March 31, 2024 included goodwill impairment, facility consolidation and other charges totaling $12.5 million. Operating income (loss) for the three months ended December 31, 2023 included facility consolidation and other charges totaling $1.4 million. See “Segment Data” below for additional information.

Oil States International, Inc. reported net loss of $13.4 million, or $0.21 per share, and Adjusted EBITDA of $15.5 million for the first quarter of 2024 on revenues of $167.3 million. Reported first quarter 2024 net loss 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). These results compare to revenues of $208.3 million, net income of $6.0 million, or $0.09 per share, and Adjusted EBITDA of $24.0 million reported in the fourth quarter of 2023, which included facility consolidation and other charges of $1.4 million ($1.1 million after-tax, or $0.02 per share).

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

“Our first quarter consolidated revenues and Adjusted EBITDA decreased sequentially due primarily to the impacts of seasonality and timing of revenue recognition for our percentage-of-completion projects in our Offshore Manufactured Products segment, where revenues increased year-over-year but declined sequentially. Certain orders moved out of the quarter, resulting in segment backlog of $305 million as of March 31, and a quarterly book-to-bill ratio of 0.8x.

“Our Completion Services and Downhole Technologies businesses have begun to recover from the fourth quarter 2023 activity slow-down that the industry experienced, but progress in this recovery during the first quarter was slow. Cost control and other reduction measures are being implemented in the areas where we are experiencing lower levels of activity, particularly the gas basins, as we do not expect much recovery over the next couple of quarters.

“Our investments in technology and innovation were again highlighted by the Offshore Technology Conference, with the announcement that we are the recipient of two 2024 Spotlight on New Technology Awards for our Swift™ Ultra-Deepwater Connector and our ACTIVEHub™ platform with ACTIVELatch™.

“We remain encouraged by the continued expansion in offshore activity globally coupled with enhanced competitive positioning in each of our business segments through our recent new technology introductions. Benefits of our expanded technology offering are expected to extend well beyond the next couple of years.”

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 first quarter 2024 revised segment presentation.

(See Segment Data, Adjusted Segment EBITDA, 2023 Recast Segment Data and 2023 Adjusted Segment EBITDA tables below)

Offshore Manufactured Products

Offshore Manufactured Products reported revenues of $86.9 million, operating income of $10.6 million and Adjusted Segment EBITDA of $15.8 million in the first quarter of 2024, compared to revenues of $126.5 million, operating income of $24.2 million and Adjusted Segment EBITDA of $28.8 million reported in the fourth quarter of 2023. During the first quarter of 2024 and the fourth quarter of 2023, the segment recorded charges of $1.5 million and $0.8 million, respectively, associated with the consolidation of certain manufacturing and service locations. Adjusted Segment EBITDA margin in the first quarter of 2024 was 18%.

Backlog totaled $305 million as of March 31, 2024, a decrease of $22 million, or 7%, from December 31, 2023 due to the timing of bookings, which totaled $66 million, yielding a quarterly book-to-bill ratio of 0.8x.

Well Site Services

Well Site Services reported revenues of $47.3 million, an operating loss of $0.4 million and Adjusted Segment EBITDA of $6.6 million in the first quarter of 2024, compared to revenues of $51.2 million, an operating loss of $1.1 million and Adjusted Segment EBITDA of $5.9 million reported in the fourth quarter of 2023. During the first quarter of 2024 and the fourth quarter of 2023, the segment recorded costs of $0.4 million and $0.6 million, respectively, associated with the defense of certain patents related to its proprietary technologies. Additionally, the segment recognized $0.7 million in costs associated with the consolidation and exit of three facilities during the first quarter of 2024. Adjusted Segment EBITDA margin was 14% in the first quarter of 2024, compared to 12% in the fourth quarter of 2023.

Downhole Technologies

Downhole Technologies reported 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, compared to revenues of $30.6 million, an operating loss of $5.7 million and an Adjusted Segment EBITDA loss of $1.4 million reported in the fourth quarter of 2023. Reported results in the first quarter of 2024 included a non-cash goodwill impairment charge of $10.0 million, recorded in connection with the first quarter 2024 segment realignment discussed above. Included in the fourth quarter of 2023 results were provisions for excess and obsolete inventory totaling $1.3 million.

Corporate

Corporate operating expenses in the first quarter of 2024 totaled $9.3 million.

Interest Expense, Net

Net interest expense totaled $2.1 million in the first quarter of 2024, which included $0.5 million of non-cash amortization of deferred debt issuance costs.

Income Taxes

During the first quarter of 2024, the Company recognized tax expense of $24 thousand on a pre-tax loss of $13.4 million, which included a $7.7 million non-deductible goodwill impairment charge as well as other non-deductible expenses. The Company recognized tax expense of $0.2 million on pre-tax income of $6.2 million in the fourth quarter of 2023.

Cash Flows

During the first quarter of 2024, cash flows used in operations totaled $11.4 million and capital expenditures totaled $10.1 million ($7.8 million net of proceeds from sales of equipment) primarily due to the purchase of land for the new Batam, Indonesia manufacturing facility.

Financial Condition

Cash on-hand totaled $24.1 million at March 31, 2024. No borrowings were outstanding under the Company’s asset-based revolving credit facility (the “ABL Facility”) at March 31, 2024. The Company amended its ABL Facility during the quarter to extend the maturity date to February 16, 2028.

Industry Awards

  • 2024 Spotlight on New Technology™ Awards from the Offshore Technology Conference
    • Ultra-Deepwater Connector

      Oil States’ Swift™ Ultra-Deepwater Connector offers oil and gas operators a unique integrally machined anti-rotation mechanism that allows for hands-free makeup and is designed to prevent connector breakout in extreme and fatigue-sensitive ultra-deepwater conditions. This metal-sealing casing/conductor connector features integral ratchet anti-rotation as a standard component with no loose parts such as the tabs, keys and screws common on traditional anti-rotational connectors. The advanced ratchet anti-rotation mechanism allows hands-free running of the connector eliminating personnel in the red zone, reducing safety risks associated with dropped objects and personnel hazards related to the make-up of traditional large diameter conductor connectors.
    • Remote Wellsite Monitoring and Control Solutions

      Oil States recently introduced its ACTIVEHub™ platform with ACTIVELatch™ technology to address operators’ needs for remotely monitoring and controlling their frac locations to provide an efficient, safer and more environmentally friendly wellsite. The ACTIVEHub platform is a communication and control center that is designed to provide real-time information and control across the entire wellsite. ACTIVELatch is a key component of the ACTIVEHub system, and is the industry’s first, battery-operated “wireless latch.” Our ACTIVELatch is a 5 1/8-in. 15,000 psi, remotely operated wellhead connection that is designed to allow an operator to make and break the wireline connection to the well wirelessly via the ACTIVEHub communication and control system without bulky cables or hydraulics. The component’s wireless capability removes personnel from the red zone for greater wellsite safety.

Conference Call Information

The call is scheduled for April 26, 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. 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

 

March 31,

2024

 

December 31,

2023

 

March 31,

2023

Revenues:

 

 

 

 

 

Products

$

94,329

 

 

$

123,444

 

 

$

99,840

 

Services

 

72,933

 

 

 

84,822

 

 

 

96,359

 

 

 

167,262

 

 

 

208,266

 

 

 

196,199

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

Product costs

 

75,137

 

 

 

97,291

 

 

 

78,677

 

Service costs

 

56,814

 

 

 

66,405

 

 

 

72,058

 

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

 

131,951

 

 

 

163,696

 

 

 

150,735

 

Selling, general and administrative expense(1)

 

22,496

 

 

 

22,400

 

 

 

24,016

 

Depreciation and amortization expense

 

14,195

 

 

 

14,569

 

 

 

15,256

 

Impairment of goodwill

 

10,000

 

 

 

 

 

 

 

Other operating (income) expense, net(2)

 

(203

)

 

 

(229

)

 

 

317

 

 

 

178,439

 

 

 

200,436

 

 

 

190,324

 

Operating income (loss)

 

(11,177

)

 

 

7,830

 

 

 

5,875

 

 

 

 

 

 

 

Interest expense, net

 

(2,101

)

 

 

(1,811

)

 

 

(2,391

)

Other income (expense), net

 

(72

)

 

 

177

 

 

 

276

 

Income (loss) before income taxes

 

(13,350

)

 

 

6,196

 

 

 

3,760

 

Income tax provision

 

(24

)

 

 

(233

)

 

 

(1,602

)

Net income (loss)

$

(13,374

)

 

$

5,963

 

 

$

2,158

 

 

 

 

 

 

 

Net income (loss) per share:

 

 

 

 

 

Basic

$

(0.21

)

 

$

0.09

 

 

$

0.03

 

Diluted

 

(0.21

)

 

 

0.09

 

 

 

0.03

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

Basic

 

62,503

 

 

 

62,483

 

 

 

62,825

 

Diluted

 

62,503

 

 

 

63,004

 

 

 

63,072

 

________________

(1)

Selling, general and administrative expense for the three months ended March 31, 2024 and December 31, 2023 included $0.4 million and $0.6 million, respectively, of costs associated with the defense of certain Well Site Services segment patents related to proprietary technologies.

(2)

Other operating (income) expense, net for the three months ended March 31, 2024 and December 31, 2023 included facility consolidation charges of $1.5 million and $0.8 million, respectively, associated with the Offshore Manufactured Products segment’s ongoing consolidation and relocation of certain manufacturing and service locations. Other operating (income) expense, net for the three months ended March 31, 2024 also included $0.7 million in costs associated with the Well Site Services segment’s consolidation and exit of three facilities.

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES

 

CONSOLIDATED BALANCE SHEETS

(In Thousands)

 

 

March 31, 2024

 

December 31, 2023

 

(Unaudited)

 

 

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

24,059

 

 

$

47,111

 

Accounts receivable, net

 

200,765

 

 

 

203,211

 

Inventories, net

 

210,189

 

 

 

202,027

 

Prepaid expenses and other current assets

 

35,169

 

 

 

35,648

 

Total current assets

 

470,182

 

 

 

487,997

 

 

 

 

 

Property, plant, and equipment, net

 

278,083

 

 

 

280,389

 

Operating lease assets, net

 

24,826

 

 

 

21,970

 

Goodwill, net

 

69,774

 

 

 

79,867

 

Other intangible assets, net

 

148,734

 

 

 

153,010

 

Other noncurrent assets

 

24,216

 

 

 

23,253

 

Total assets

$

1,015,815

 

 

$

1,046,486

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Current liabilities:

 

 

 

Current portion of long-term debt

$

620

 

 

$

627

 

Accounts payable

 

57,062

 

 

 

67,546

 

Accrued liabilities

 

34,821

 

 

 

44,227

 

Current operating lease liabilities

 

6,654

 

 

 

6,880

 

Income taxes payable

 

1,179

 

 

 

1,233

 

Deferred revenue

 

41,528

 

 

 

36,757

 

Total current liabilities

 

141,864

 

 

 

157,270

 

 

 

 

 

Long-term debt

 

135,572

 

 

 

135,502

 

Long-term operating lease liabilities

 

21,147

 

 

 

18,346

 

Deferred income taxes

 

6,518

 

 

 

7,717

 

Other noncurrent liabilities

 

18,396

 

 

 

18,106

 

Total liabilities

 

323,497

 

 

 

336,941

 

 

 

 

 

Stockholders’ equity:

 

 

 

Common stock

 

785

 

 

 

772

 

Additional paid-in capital

 

1,130,979

 

 

 

1,129,240

 

Retained earnings

 

271,544

 

 

 

284,918

 

Accumulated other comprehensive loss

 

(73,011

)

 

 

(69,984

)

Treasury stock

 

(637,979

)

 

 

(635,401

)

Total stockholders’ equity

 

692,318

 

 

 

709,545

 

Total liabilities and stockholders’ equity

$

1,015,815

 

 

$

1,046,486

 

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

(Unaudited)

 

 

Three Months Ended March 31,

 

 

2024

 

 

 

2023

 

Cash flows from operating activities:

 

 

 

Net income (loss)

$

(13,374

)

 

$

2,158

 

Adjustments to reconcile net income (loss) to net cash used in operating activities:

 

 

 

Depreciation and amortization expense

 

14,195

 

 

 

15,256

 

Impairment of goodwill

 

10,000

 

 

 

 

Stock-based compensation expense

 

1,752

 

 

 

1,589

 

Amortization of deferred financing costs

 

513

 

 

 

449

 

Deferred income tax provision (benefit)

 

(1,122

)

 

 

396

 

Gains on disposals of assets

 

(1,245

)

 

 

(210

)

Other, net

 

(300

)

 

 

17

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

 

1,579

 

 

 

(745

)

Inventories

 

(8,909

)

 

 

(12,802

)

Accounts payable and accrued liabilities

 

(19,355

)

 

 

(18,329

)

Deferred revenue

 

4,771

 

 

 

4,179

 

Other operating assets and liabilities, net

 

135

 

 

 

2,124

 

Net cash flows used in operating activities

 

(11,360

)

 

 

(5,918

)

 

 

 

 

Cash flows from investing activities:

 

 

 

Capital expenditures

 

(10,092

)

 

 

(6,568

)

Proceeds from disposition of equipment

 

2,295

 

 

 

223

 

Other, net

 

(31

)

 

 

(48

)

Net cash flows used in investing activities

 

(7,828

)

 

 

(6,393

)

 

 

 

 

Cash flows from financing activities:

 

 

 

Revolving credit facility borrowings

 

1,894

 

 

 

27,865

 

Revolving credit facility repayments

 

(1,894

)

 

 

(22,865

)

Repayment of 1.50% convertible senior notes

 

 

 

 

(17,315

)

Other debt and finance lease repayments

 

(154

)

 

 

(106

)

Payment of financing costs

 

(954

)

 

 

(21

)

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

due to vesting of stock awards

 

(2,578

)

 

 

(1,936

)

Net cash flows used in financing activities

 

(3,686

)

 

 

(14,378

)

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

(178

)

 

 

478

 

Net change in cash and cash equivalents

 

(23,052

)

 

 

(26,211

)

Cash and cash equivalents, beginning of period

 

47,111

 

 

 

42,018

 

Cash and cash equivalents, end of period

$

24,059

 

 

$

15,807

 

 

 

 

 

Cash paid (received) for:

 

 

 

Interest

$

306

 

 

$

485

 

Income taxes, net

 

599

 

 

 

(2,465

)

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES

 

SEGMENT DATA

(In Thousands)

(Unaudited)

 

 

Three Months Ended

 

March 31,

2024

 

December 31,

2023

 

March 31,

2023

Revenues(1):

 

 

 

 

 

Offshore Manufactured Products

 

 

 

 

 

Project-driven:

 

 

 

 

 

Products

$

53,137

 

 

$

82,839

 

 

$

48,617

 

Services

 

25,233

 

 

 

32,875

 

 

 

24,630

 

 

 

78,370

 

 

 

115,714

 

 

 

73,247

 

Military and other products

 

8,487

 

 

 

10,775

 

 

 

7,258

 

Total Offshore Manufactured Products

 

86,857

 

 

 

126,489

 

 

 

80,505

 

Well Site Services

 

47,292

 

 

 

51,208

 

 

 

67,058

 

Downhole Technologies

 

33,113

 

 

 

30,569

 

 

 

48,636

 

Total revenues

$

167,262

 

 

$

208,266

 

 

$

196,199

 

 

 

 

 

 

 

Operating income (loss)(1):

 

 

 

 

 

Offshore Manufactured Products(2)

$

10,603

 

 

$

24,167

 

 

$

7,698

 

Well Site Services(3)

 

(419

)

 

 

(1,102

)

 

 

6,966

 

Downhole Technologies(4)

 

(12,079

)

 

 

(5,726

)

 

 

1,873

 

Corporate

 

(9,282

)

 

 

(9,509

)

 

 

(10,662

)

Total operating income

$

(11,177

)

 

$

7,830

 

 

$

5,875

 

________________

(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 first quarter 2024 revised segment presentation.

(2)

Operating income for the three months ended March 31, 2024 and December 31, 2023 included facility consolidation charges of $1.5 million and $0.8 million, respectively, 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 March 31, 2024 and December 31, 2023 included $0.4 million and $0.6 million, respectively, of costs associated with the defense of certain Well Site Services segment patents related to proprietary technologies. Additionally, during the three months ended March 31, 2024 the segment incurred $0.7 million in costs associated with consolidation and exit of three facilities.

(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 first quarter 2024 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

 

March 31,

2024

 

December 31,

2023

 

March 31,

2023

 

 

 

 

 

 

Net income (loss)

$

(13,374

)

 

$

5,963

 

$

2,158

Interest expense, net

 

2,101

 

 

 

1,811

 

 

2,391

Income tax provision

 

24

 

 

 

233

 

 

1,602

Depreciation and amortization expense

 

14,195

 

 

 

14,569

 

 

15,256

Impairment of goodwill

 

10,000

 

 

 

 

 

Facility consolidation and other charges

 

2,509

 

 

 

1,402

 

 

Adjusted EBITDA

$

15,455

 

 

$

23,978

 

$

21,407

________________

(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. 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

 

March 31,

2024

 

December 31,

2023

 

March 31,

2023

Offshore Manufactured Products:

 

 

 

 

 

Operating income

$

10,603

 

 

$

24,167

 

 

$

7,698

 

Other income, net

 

41

 

 

 

44

 

 

 

165

 

Depreciation and amortization expense

 

3,693

 

 

 

3,802

 

 

 

4,075

 

Facility consolidation and other charges

 

1,463

 

 

 

825

 

 

 

 

Adjusted Segment EBITDA

$

15,800

 

 

$

28,838

 

 

$

11,938

 

 

 

 

 

 

 

Well Site Services:

 

 

 

 

 

Operating income (loss)

$

(419

)

 

$

(1,102

)

 

$

6,966

 

Other income (expense), net

 

(113

)

 

 

133

 

 

 

111

 

Depreciation and amortization expense

 

6,079

 

 

 

6,295

 

 

 

6,146

 

Facility consolidation and other charges

 

1,046

 

 

 

577

 

 

 

 

Adjusted Segment EBITDA

$

6,593

 

 

$

5,903

 

 

$

13,223

 

 

 

 

 

 

 

Downhole Technologies:

 

 

 

 

 

Operating income (loss)

$

(12,079

)

 

$

(5,726

)

 

$

1,873

 

Depreciation and amortization expense

 

4,270

 

 

 

4,306

 

 

 

4,868

 

Impairment of goodwill

 

10,000

 

 

 

 

 

 

 

Adjusted Segment EBITDA

$

2,191

 

 

$

(1,420

)

 

$

6,741

 

 

 

 

 

 

 

Corporate:

 

 

 

 

 

Operating loss

$

(9,282

)

 

$

(9,509

)

 

$

(10,662

)

Depreciation and amortization expense

 

153

 

 

 

166

 

 

 

167

 

Adjusted Segment EBITDA

$

(9,129

)

 

$

(9,343

)

 

$

(10,495

)

________________

(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. 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

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

DILUTED EARNINGS (LOSS) PER SHARE, EXCLUDING CHARGES (D)

(In Thousands, Except Per Share Amounts)

(Unaudited)

 

 

Three Months Ended

 

March 31,

2024

 

December 31,

2023

 

March 31,

2023

 

 

 

 

 

 

Net income (loss)

$

(13,374

)

 

$

5,963

 

 

$

2,158

Impairment of goodwill

 

10,000

 

 

 

 

 

 

Facility consolidation and other charges

 

2,509

 

 

 

1,402

 

 

 

Total adjustments, before taxes

 

12,509

 

 

 

1,402

 

 

 

Tax benefit

 

(1,008

)

 

 

(294

)

 

 

Total adjustments, net of taxes

 

11,501

 

 

 

1,108

 

 

 

Net income (loss), excluding charges

$

(1,873

)

 

$

7,071

 

 

$

2,158

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

Basic

 

62,503

 

 

 

62,483

 

 

 

62,825

Diluted

 

62,503

 

 

 

63,004

 

 

 

63,072

 

 

 

 

 

 

Net income (loss) per share, excluding charges:

 

 

 

 

 

Basic

$

(0.03

)

 

$

0.11

 

 

$

0.03

Diluted

 

(0.03

)

 

 

0.11

 

 

 

0.03

________________

(C)

Net income (loss), excluding charges consists of net income (loss) plus impairment of goodwill and facility consolidation and other charges. Net income (loss), excluding charges 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 net income (loss), excluding charges as a supplemental disclosure because its management believes that net income (loss), excluding charges provides investors a helpful measure for comparing its operating performance with previous and subsequent periods.

(D)

Net income (loss) per share, excluding charges is calculated as net income (loss), excluding charges divided by the weighted average number of common shares outstanding. Net income (loss) per share, excluding charges 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 net income (loss) per share, excluding charges as a supplemental disclosure because its management believes that net income (loss) per share, excluding charges provides investors a helpful measure for comparing its operating performance with previous and subsequent periods.

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES

 

2023 RECAST SEGMENT DATA

(In Thousands)

(Unaudited)

 

The following tables provide unaudited quarterly and full-year 2023 segment financial, backlog and other information – conformed with the revised first quarter 2024 segment presentation.

 

 

Three Months Ended

 

 

 

March 31,

2023

 

June 30,

2023

 

September 30,

2023

 

December 31,

2023

 

Full-Year

2023

Revenues:

 

 

 

 

 

 

 

 

 

Offshore Manufactured Products

 

 

 

 

 

 

 

 

 

Project-driven:

 

 

 

 

 

 

 

 

 

Products

$

48,617

 

 

$

45,455

 

 

$

58,169

 

 

$

82,839

 

 

$

235,080

 

Services

 

24,630

 

 

 

24,846

 

 

 

30,391

 

 

 

32,875

 

 

 

112,742

 

 

 

73,247

 

 

 

70,301

 

 

 

88,560

 

 

 

115,714

 

 

 

347,822

 

Military and other products

 

7,258

 

 

 

8,346

 

 

 

7,510

 

 

 

10,775

 

 

 

33,889

 

Total Offshore Manufactured Products

 

80,505

 

 

 

78,647

 

 

 

96,070

 

 

 

126,489

 

 

 

381,711

 

Well Site Services

 

67,058

 

 

 

64,536

 

 

 

59,831

 

 

 

51,208

 

 

 

242,633

 

Downhole Technologies

 

48,636

 

 

 

40,346

 

 

 

38,388

 

 

 

30,569

 

 

 

157,939

 

Total revenues

$

196,199

 

 

$

183,529

 

 

$

194,289

 

 

$

208,266

 

 

$

782,283

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss):

 

 

 

 

 

 

 

 

 

Offshore Manufactured Products

$

7,698

 

 

$

8,838

 

 

$

15,586

 

 

$

24,167

 

 

$

56,289

 

Well Site Services

 

6,966

 

 

 

4,732

 

 

 

3,285

 

 

 

(1,102

)

 

 

13,881

 

Downhole Technologies

 

1,873

 

 

 

(121

)

 

 

(1,900

)

 

 

(5,726

)

 

 

(5,874

)

Corporate

 

(10,662

)

 

 

(10,180

)

 

 

(10,781

)

 

 

(9,509

)

 

 

(41,132

)

Total operating income (loss)

$

5,875

 

 

$

3,269

 

 

$

6,190

 

 

$

7,830

 

 

$

23,164

 

 

 

 

 

 

 

 

 

 

 

Adjusted Segment EBITDA(B):

 

 

 

 

 

 

 

 

 

Offshore Manufactured Products

$

11,938

 

 

$

12,994

 

 

$

21,708

 

 

$

28,838

 

 

$

75,478

 

Well Site Services

 

13,223

 

 

 

11,425

 

 

 

9,716

 

 

 

5,903

 

 

 

40,267

 

Downhole Technologies

 

6,741

 

 

 

4,626

 

 

 

2,646

 

 

 

(1,420

)

 

 

12,593

 

Corporate

 

(10,495

)

 

 

(10,029

)

 

 

(10,629

)

 

 

(9,343

)

 

 

(40,496

)

Total Adjusted EBITDA(A)

$

21,407

 

 

$

19,016

 

 

$

23,441

 

 

$

23,978

 

 

$

87,842

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures:

 

 

 

 

 

 

 

 

 

Offshore Manufactured Products

$

359

 

 

$

4,587

 

 

$

2,712

 

 

$

1,577

 

 

$

9,235

 

Well Site Services

 

5,772

 

 

 

5,672

 

 

 

2,602

 

 

 

5,079

 

 

 

19,125

 

Downhole Technologies

 

425

 

 

 

246

 

 

 

568

 

 

 

586

 

 

 

1,825

 

Corporate

 

12

 

 

 

265

 

 

 

150

 

 

 

41

 

 

 

468

 

Total capital expenditures

$

6,568

 

 

$

10,770

 

 

$

6,032

 

 

$

7,283

 

 

$

30,653

 

 

 

 

 

 

 

 

 

 

 

Assets:

 

 

 

 

 

 

 

 

 

Offshore Manufactured Products

$

502,263

 

 

$

495,983

 

 

$

495,440

 

 

$

521,923

 

 

$

521,923

 

Well Site Services

 

212,415

 

 

 

204,437

 

 

 

201,384

 

 

 

191,630

 

 

 

191,630

 

Downhole Technologies

 

302,271

 

 

 

292,047

 

 

 

287,152

 

 

 

278,151

 

 

 

278,151

 

Corporate

 

33,188

 

 

 

52,553

 

 

 

64,044

 

 

 

54,782

 

 

 

54,782

 

Total assets

$

1,050,137

 

 

$

1,045,020

 

 

$

1,048,020

 

 

$

1,046,486

 

 

$

1,046,486

 

 

 

 

 

 

 

 

 

 

 

Offshore Manufactured Products Backlog

$

316,473

 

 

$

327,705

 

 

$

341,153

 

 

$

327,048

 

 

$

327,048

 

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES

 

2023 RECAST RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION

ADJUSTED SEGMENT EBITDA (B)

(In Thousands)

(Unaudited)

 

 

Three Months Ended

 

 

 

March 31,

2023

 

June 30,

2023

 

September 30,

2023

 

December 31,

2023

 

Full-Year

2023

Offshore Manufactured Products:

 

 

 

 

 

 

 

 

 

Operating income

$

7,698

 

 

$

8,838

 

 

$

15,586

 

 

$

24,167

 

 

$

56,289

 

Other income, net

 

165

 

 

 

81

 

 

 

68

 

 

 

44

 

 

 

358

 

Depreciation and amortization expense

 

4,075

 

 

 

4,075

 

 

 

4,405

 

 

 

3,802

 

 

 

16,357

 

Facility consolidation and other charges

 

 

 

 

 

 

 

1,649

 

 

 

825

 

 

 

2,474

 

Adjusted Segment EBITDA

$

11,938

 

 

$

12,994

 

 

$

21,708

 

 

$

28,838

 

 

$

75,478

 

 

 

 

 

 

 

 

 

 

 

Well Site Services:

 

 

 

 

 

 

 

 

 

Operating income (loss)

$

6,966

 

 

$

4,732

 

 

$

3,285

 

 

$

(1,102

)

 

$

13,881

 

Other income, net

 

111

 

 

 

129

 

 

 

118

 

 

 

133

 

 

 

491

 

Depreciation and amortization expense

 

6,146

 

 

 

6,564

 

 

 

6,313

 

 

 

6,295

 

 

 

25,318

 

Patent defense costs

 

 

 

 

 

 

 

 

 

 

577

 

 

 

577

 

Adjusted Segment EBITDA

$

13,223

 

 

$

11,425

 

 

$

9,716

 

 

$

5,903

 

 

$

40,267

 

 

 

 

 

 

 

 

 

 

 

Downhole Technologies:

 

 

 

 

 

 

 

 

 

Operating income (loss)

$

1,873

 

 

$

(121

)

 

$

(1,900

)

 

$

(5,726

)

 

$

(5,874

)

Depreciation and amortization expense

 

4,868

 

 

 

4,747

 

 

 

4,546

 

 

 

4,306

 

 

 

18,467

 

Adjusted Segment EBITDA

$

6,741

 

 

$

4,626

 

 

$

2,646

 

 

$

(1,420

)

 

$

12,593

 

 

 

 

 

 

 

 

 

 

 

Corporate:

 

 

 

 

 

 

 

 

 

Operating loss

$

(10,662

)

 

$

(10,180

)

 

$

(10,781

)

 

$

(9,509

)

 

$

(41,132

)

Depreciation and amortization expense

 

167

 

 

 

151

 

 

 

152

 

 

 

166

 

 

 

636

 

Adjusted Segment EBITDA

$

(10,495

)

 

$

(10,029

)

 

$

(10,629

)

 

$

(9,343

)

 

$

(40,496

)

 

Contacts

Lloyd A. Hajdik

Oil States International, Inc.

Executive Vice President, Chief Financial Officer and Treasurer

(713) 652-0582

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