Oil States Announces Second Quarter 2024 Results

  • 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)
  • Adjusted net income of $4.4 million, or $0.07 per share, excluding charges and credits (a non-GAAP measure(1))
  • 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
  • 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
  • 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--()--Oil States International, Inc. (NYSE: OIS):

 

Three Months Ended

 

% Change

(Unaudited, In Thousands, Except Per Share Amounts)

June 30,
2024

 

March 31,
2024

 

June 30,
2023

 

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,
2024

 

March 31,
2024

 

June 30,
2023

 

June 30,
2024

 

June 30,
2023

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,
2024

 

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,
2024

 

March 31,
2024

 

June 30,
2023

 

June 30,
2024

 

June 30,
2023

 

 

 

 

 

 

 

 

 

 

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,
2024

 

March 31,
2024

 

June 30,
2023

 

June 30,
2024

 

June 30,
2023

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,
2024

 

March 31,
2024

 

June 30,
2023

 

June 30,
2024

 

June 30,
2023

 

 

 

 

 

 

 

 

 

 

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.

 

Contacts

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

Contacts

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