- Net loss of $14.3 million, or $0.23 per share,
reported for the quarter, which included restructuring and other
charges totaling $18.2 million ($17.0 million, after-tax,
or $0.27 per share)
- Adjusted net income of $2.7 million, or $0.04 per share,
excluding these restructuring and other charges (a non-GAAP
measure(1))
- Consolidated revenues of $174.3 million decreased 6%
sequentially, driven primarily by lower U.S. land-based activity
and transitory project delays in the Gulf of Mexico
- Adjusted EBITDA (a non-GAAP measure(1)) of $21.5 million
increased 1% sequentially
- Well Site Services segment name changed to the Completion and
Production Services segment following the sale of its remaining
drilling rigs and exit of its flowback and well testing service
offering
- Generated cash flows from operations of $28.8 million
- Purchased $3 million of our common stock
- Board of Directors approved a new $50 million common stock
repurchase authorization, which expires in October 2026
Oil States International, Inc. (NYSE: OIS):
Three Months Ended
% Change
(Unaudited, In Thousands, Except Per Share
Amounts)
September 30,
2024
June 30, 2024
September 30,
2023
Sequential
Year-over-Year
Consolidated results:
Revenues
$
174,348
$
186,383
$
194,289
(6
)%
(10
)%
Operating income (loss)(3)
$
(11,041
)
$
2,045
$
6,190
n.m.
n.m.
Net income (loss)
$
(14,349
)
$
1,301
$
4,212
n.m.
n.m.
Adjusted net income, excluding charges and
credits(1)
$
2,696
$
4,391
$
5,515
(39
)%
(51
)%
Adjusted EBITDA(1)
$
21,531
$
21,306
$
23,441
1
%
(8
)%
Revenues by segment(2):
Offshore Manufactured Products
$
102,234
$
101,556
$
96,070
1
%
6
%
Completion and Production Services
40,099
46,421
59,831
(14
)%
(33
)%
Downhole Technologies
32,015
38,406
38,388
(17
)%
(17
)%
Revenues by destination:
Offshore and international
$
113,856
$
118,625
$
104,750
(4
)%
9
%
U.S. land
60,492
67,758
89,539
(11
)%
(32
)%
Operating income (loss) by
segment(2)(3):
Offshore Manufactured Products
$
19,310
$
14,357
$
15,586
34
%
24
%
Completion and Production Services
(18,267
)
(535
)
3,285
n.m.
n.m.
Downhole Technologies
(3,653
)
(1,141
)
(1,900
)
(220
)%
(92
)%
Adjusted Segment EBITDA(1)(2):
Offshore Manufactured Products
$
23,303
$
20,131
$
21,708
16
%
7
%
Completion and Production Services
5,413
8,548
9,716
(37
)%
(44
)%
Downhole Technologies
1,078
3,114
2,646
(65
)%
(59
)%
___________________
(1)
These are non-GAAP measures. See
“Reconciliations of GAAP to Non-GAAP Financial Information” tables
below for reconciliations to their most comparable GAAP measures as
well as further clarification and explanation.
(2)
In first quarter 2024, certain
short-cycle, consumable product operations historically reported
within the Offshore Manufactured Products segment were integrated
into the Downhole Technologies segment. Historical segment
financial data, backlog and other information were conformed with
the revised segment presentation.
(3)
Operating income (loss) included
intangible and operating lease asset impairment, facility
consolidation and closure, patent defense and other charges
totaling: $18.2 million for the three months ended September 30,
2024; $4.4 million for the three months ended June 30, 2024; and
$1.6 million for the three months ended September 30, 2023. See
“Segment Data” below for additional information.
Oil States International, Inc. reported a net loss of $14.3
million, or $0.23 per share, and Adjusted EBITDA of $21.5 million
for the third quarter of 2024 on revenues of $174.3 million.
Reported third quarter 2024 net loss included charges of $18.2
million ($17.0 million after-tax or $0.27 per share) associated
with the restructuring of certain of its U.S. land-based
operations, facility closures, patent defense and personnel
reductions. These results compare to revenues of $186.4 million,
net income of $1.3 million, or $0.02 per share, and Adjusted EBITDA
of $21.3 million reported in the second quarter of 2024, which
included facility consolidation charges and other credits of $3.9
million ($3.1 million after-tax, or $0.05 per share).
Oil States’ President and Chief Executive Officer, Cindy B.
Taylor, stated:
“Our third quarter 2024 results were led by offshore and
international project activity and associated backlog conversion,
partially offset by transitory customer delays in completion and
intervention projects in the Gulf of Mexico and declines in
completions-related spending by our U.S. customers. While storms in
the Gulf of Mexico tempered our Completion and Production Services
results this quarter, our personnel remained safe and the Company’s
facilities did not sustain significant damage. We expect activities
to resume in the Gulf in the fourth quarter following delays caused
by Hurricane Milton.
“Our Offshore Manufactured Products segment revenues were flat
sequentially, totaling $102 million in the third quarter, while
Adjusted Segment EBITDA rose 16% to $23 million on a favorable
revenue mix. Bookings increased 11% sequentially, totaling $112
million during the quarter compared to $101 million booked in the
second quarter of 2024, yielding backlog of $313 million as of
September 30 and a quarterly book-to-bill ratio of 1.1x. The
outlook for our offshore and international project-driven business
remains strong with growing market acceptance of our new technology
offerings such as the integrated riser joint used in managed
pressure drilling operations.
“Given the highly cyclical nature of select U.S. service lines,
we made a strategic decision to close five additional
underperforming gas-focused locations within our Completion and
Production Services segment and one within our Downhole
Technologies segment. Strategic optimization efforts in our U.S.
operations along with the exit of more commoditized business lines
should enhance operating margins in future periods.”
Business Segment Results
In first quarter 2024, certain short-cycle, consumable product
operations historically reported within the Offshore Manufactured
Products segment (legacy frac plugs and elastomer products) were
integrated into our Downhole Technologies segment to better align
with the underlying activity demand drivers and current segment
management structure, as well as provide for additional operational
synergies. Historical segment financial data (GAAP and non-GAAP),
backlog and other information were conformed with the revised
segment presentation. Additionally, following the sale of its
remaining U.S. land-based drilling rigs and the exit of the
flowback and well testing service offering in the third quarter of
2024, the Company’s Well Site Services segment name was changed to
the Completion and Production Services segment.
(See Segment Data and Adjusted Segment EBITDA tables below)
Offshore Manufactured Products
Offshore Manufactured Products reported revenues of $102.2
million, operating income of $19.3 million and Adjusted Segment
EBITDA of $23.3 million in the third quarter of 2024, compared to
revenues of $101.6 million, operating income of $14.4 million and
Adjusted Segment EBITDA of $20.1 million reported in the second
quarter of 2024. Adjusted Segment EBITDA margin was 23% in the
third quarter of 2024 compared to 20% in the second quarter of
2024.
The segment’s reported operating income in the third and second
quarters of 2024 included costs of $0.4 million and $1.5 million,
respectively, associated with the consolidation of certain
locations and personnel reductions.
Backlog totaled $313 million as of September 30, 2024. Third
quarter bookings increased 11%, totaling $112 million, compared to
bookings of $101 million in the second quarter – yielding a
quarterly book-to-bill ratio of 1.1x and a year-to-date ratio of
1.0x.
Completion and Production
Services
Completion and Production Services reported revenues of $40.1
million, an operating loss of $18.3 million and Adjusted Segment
EBITDA of $5.4 million in the third quarter of 2024, compared to
revenues of $46.4 million, an operating loss of $0.5 million and
Adjusted Segment EBITDA of $8.5 million reported in the second
quarter of 2024. Adjusted Segment EBITDA margin was 13% in the
third quarter of 2024, compared to 18% in the second quarter of
2024.
During the third quarter of 2024, the segment implemented
restructuring actions in its U.S. land-based businesses to reduce
costs and improve future operating margins, which included the exit
of two service offerings and the closure of five additional
underperforming facilities as well as associated reductions in its
U.S. workforce. As a result of these and other strategic actions
previously taken, the segment’s operating loss for the third
quarter of 2024 included $12.9 million of non-cash intangible and
operating lease asset impairment charges, $2.2 million of costs
associated with the exit of underperforming service locations and
$0.8 million of other restructuring charges. During the second
quarter of 2024, the segment recorded costs of $1.9 million
associated with the consolidation and exit of underperforming
service locations. Additionally, during the second and third
quarters of 2024, the segment recorded costs totaling $2.3 million
associated with the enforcement of certain patents related to its
proprietary technologies.
The segment’s U.S. land-based service offerings and facilities
exited during the third quarter of 2024 collectively generated
revenues of $9.3 million and operating losses of $17.1 million in
the current quarter, which included intangible and operating lease
asset impairment charges of $12.9 million, facility closure and
other charges totaling $2.2 million as well as depreciation and
amortization expense of $1.3 million. During the first nine months
of 2024, service offerings and facilities exited in 2024
collectively generated revenues of $35.8 million and operating
losses of $24.0 million, which included intangible and operating
lease asset impairment charges of $12.9 million, facility closure
and other charges totaling $4.6 million as well as depreciation and
amortization expense of $4.2 million.
Downhole Technologies
Downhole Technologies reported revenues of $32.0 million, an
operating loss of $3.7 million and Adjusted Segment EBITDA of $1.1
million in the third quarter of 2024, compared to revenues of $38.4
million, an operating loss of $1.1 million and Adjusted Segment
EBITDA of $3.1 million in the second quarter of 2024. Adjusted
Segment EBITDA margin was 3% in the third quarter of 2024, compared
to 8% in the second quarter of 2024.
During the third quarter of 2024, the segment implemented
actions to reduce costs and improve future operating margins, which
included the exit of an underperforming location as well as
reductions in its U.S. workforce. The segment’s operating loss in
the third quarter of 2024 included costs of $1.2 million associated
with an operating lease asset impairment, workforce reductions and
a customer bankruptcy.
Corporate
Corporate operating expenses in the third quarter of 2024
totaled $8.4 million.
Interest Expense, Net
Net interest expense totaled $1.8 million in the third quarter
of 2024, which included $0.3 million of non-cash amortization of
deferred debt issuance costs.
Income Taxes
During the third quarter of 2024, the Company recognized tax
expense of $2.2 million on a pre-tax loss of $12.1 million, which
included unfavorable changes in valuation allowances recorded
against deferred tax assets and certain non-deductible expenses.
The Company recognized a tax benefit of $0.7 million on pre-tax
income of $0.6 million in the second quarter of 2024, which
included favorable changes in valuation allowances recorded against
deferred tax assets and certain non-deductible expenses.
Cash Flows
During the third quarter of 2024, cash flows provided by
operations totaled $28.8 million and capital expenditures, net
totaled $4.8 million. Net debt (total debt less cash and cash
equivalents) was reduced by $20.5 million as a result.
The Company purchased $2.8 million of its common stock in the
third quarter. As of September 30, 2024, the Company has
repurchased $12.4 million of its common stock under a Board
approved program. On October 24, 2024, the Company’s Board of
Directors terminated the Company’s existing share repurchase
program and replaced it with a new $50 million authorization which
expires in October 2026.
Financial Condition
Cash on-hand totaled $46.0 million at September 30, 2024. No
borrowings were outstanding under the Company’s asset-based
revolving credit facility at September 30, 2024.
Conference Call
Information
The call is scheduled for October 30, 2024 at 9:00 a.m. Central
Daylight Time, is being webcast and can be accessed from the
Company’s website at www.ir.oilstatesintl.com. Participants may
also join the conference call by dialing 1 (888) 210-3346 in the
United States or by dialing +1 (646) 960-0253 internationally and
using the passcode 7534957. A replay of the conference call will be
available approximately two hours after the completion of the call
and can be accessed from the Company’s website at
www.ir.oilstatesintl.com.
About Oil States
Oil States International, Inc. is a global provider of
manufactured products and services to customers in the energy,
industrial and military sectors. The Company’s manufactured
products include highly engineered capital equipment and consumable
products. Oil States is headquartered in Houston, Texas with
manufacturing and service facilities strategically located across
the globe. Oil States is publicly traded on the New York Stock
Exchange under the symbol “OIS”.
For more information on the Company, please visit Oil States
International’s website at www.oilstatesintl.com.
Cautionary Language Concerning Forward
Looking Statements
The foregoing contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. Forward-looking
statements are those that do not state historical facts and are,
therefore, inherently subject to risks and uncertainties. The
forward-looking statements included herein are based on current
expectations and entail various risks and uncertainties that could
cause actual results to differ materially from those
forward-looking statements. Such risks and uncertainties include,
among others, the level of supply and demand for oil and natural
gas, fluctuations in the current and future prices of oil and
natural gas, the level of exploration, drilling and completion
activity, general global economic conditions, the cyclical nature
of the oil and natural gas industry, geopolitical conflicts and
tensions, the financial health of our customers, the actions of the
Organization of Petroleum Exporting Countries (“OPEC”) and other
producing nations with respect to crude oil production levels and
pricing, the impact of environmental matters, including executive
actions and regulatory efforts to adopt environmental or climate
change regulations that may result in increased operating costs or
reduced oil and natural gas production or demand globally,
consolidation of our customers, our ability to access and the cost
of capital in the bank and capital markets, our ability to develop
new competitive technologies and products, and other factors
discussed in the “Business” and “Risk Factors” sections of the
Company’s Annual Report on Form 10-K for the year ended December
31, 2023, and the subsequently filed Quarterly Reports on Form 10-Q
and Periodic Reports on Form 8-K. Readers are cautioned not to
place undue reliance on forward-looking statements, which speak
only as of the date hereof, and, except as required by law, the
Company undertakes no obligation to update those statements or to
publicly announce the results of any revisions to any of those
statements to reflect future events or developments.
OIL STATES INTERNATIONAL, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
(In Thousands, Except Per Share
Amounts)
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
2024
June 30, 2024
September 30,
2023
September 30,
2024
September 30,
2023
Revenues:
Products
$
100,798
$
108,579
$
102,636
$
303,706
$
295,106
Services
73,550
77,804
91,653
224,287
278,911
174,348
186,383
194,289
527,993
574,017
Costs and expenses:
Product costs
79,167
82,503
80,188
236,807
231,524
Service costs
57,422
59,530
70,239
173,766
211,668
Cost of revenues (exclusive of
depreciation and amortization expense presented below)
136,589
142,033
150,427
410,573
443,192
Selling, general and administrative
expense
22,754
26,373
24,241
71,623
71,785
Depreciation and amortization expense
13,635
14,698
15,416
42,528
46,209
Impairment of goodwill
—
—
—
10,000
—
Impairments of intangible assets
10,787
—
—
10,787
—
Impairments of operating lease assets
2,579
—
—
2,579
—
Other operating (income) expense, net
(955
)
1,234
(1,985
)
76
(2,503
)
185,389
184,338
188,099
548,166
558,683
Operating income (loss)
(11,041
)
2,045
6,190
(20,173
)
15,334
Interest expense, net
(1,824
)
(2,061
)
(1,928
)
(5,986
)
(6,378
)
Other income, net
731
652
186
1,311
672
Income (loss) before income taxes
(12,134
)
636
4,448
(24,848
)
9,628
Income tax benefit (provision)
(2,215
)
665
(236
)
(1,574
)
(2,700
)
Net income (loss)
$
(14,349
)
$
1,301
$
4,212
$
(26,422
)
$
6,928
Net income (loss) per share:
Basic
$
(0.23
)
$
0.02
$
0.07
$
(0.42
)
$
0.11
Diluted
(0.23
)
0.02
0.07
(0.42
)
0.11
Weighted average number of common shares
outstanding:
Basic
62,084
62,483
62,651
62,357
62,760
Diluted
62,084
62,704
63,060
62,357
63,135
OIL STATES INTERNATIONAL, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(In Thousands)
September 30, 2024
December 31, 2023
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
45,984
$
47,111
Accounts receivable, net
182,536
203,211
Inventories, net
221,134
202,027
Prepaid expenses and other current
assets
29,257
35,648
Total current assets
478,911
487,997
Property, plant, and equipment, net
267,388
280,389
Operating lease assets, net
21,601
21,970
Goodwill, net
70,439
79,867
Other intangible assets, net
129,866
153,010
Other noncurrent assets
25,936
23,253
Total assets
$
994,141
$
1,046,486
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Current portion of long-term debt
$
634
$
627
Accounts payable
55,506
67,546
Accrued liabilities
39,978
44,227
Current operating lease liabilities
7,295
6,880
Income taxes payable
2,616
1,233
Deferred revenue
34,742
36,757
Total current liabilities
140,771
157,270
Long-term debt
124,643
135,502
Long-term operating lease liabilities
19,392
18,346
Deferred income taxes
5,291
7,717
Other noncurrent liabilities
19,238
18,106
Total liabilities
309,335
336,941
Stockholders’ equity:
Common stock
786
772
Additional paid-in capital
1,135,634
1,129,240
Retained earnings
258,496
284,918
Accumulated other comprehensive loss
(66,595
)
(69,984
)
Treasury stock
(643,515
)
(635,401
)
Total stockholders’ equity
684,806
709,545
Total liabilities and stockholders’
equity
$
994,141
$
1,046,486
OIL STATES INTERNATIONAL, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(In Thousands)
(Unaudited)
Nine Months Ended September
30,
2024
2023
Cash flows from operating activities:
Net income (loss)
$
(26,422
)
$
6,928
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization expense
42,528
46,209
Impairment of goodwill
10,000
—
Impairments of intangible assets
10,787
—
Impairments of operating lease assets
2,579
—
Stock-based compensation expense
6,408
5,157
Amortization of deferred financing
costs
1,168
1,344
Deferred income tax benefit
(2,798
)
(66
)
Gains on disposals of assets
(2,956
)
(3,335
)
Gains on extinguishment of 4.75%
convertible senior notes
(515
)
—
Other, net
83
(614
)
Changes in operating assets and
liabilities:
Accounts receivable
21,173
29,538
Inventories
(18,406
)
(23,754
)
Accounts payable and accrued
liabilities
(17,554
)
(17,515
)
Deferred revenue
(2,015
)
5,580
Other operating assets and liabilities,
net
3,624
2,905
Net cash flows provided by operating
activities
27,684
52,377
Cash flows from investing activities:
Capital expenditures
(23,309
)
(23,370
)
Proceeds from disposition of property and
equipment
15,411
4,374
Other, net
(431
)
(120
)
Net cash flows used in investing
activities
(8,329
)
(19,116
)
Cash flows from financing activities:
Revolving credit facility borrowings
22,678
35,693
Revolving credit facility repayments
(22,678
)
(35,693
)
Purchases of 4.75% convertible senior
notes
(10,846
)
—
Repayment of 1.50% convertible senior
notes
—
(17,315
)
Other debt and finance lease
repayments
(481
)
(340
)
Payment of financing costs
(1,119
)
(101
)
Purchases of treasury stock
(5,149
)
(3,001
)
Shares added to treasury stock as a result
of net share settlements
due to vesting of stock awards
(2,596
)
(1,948
)
Net cash flows used in financing
activities
(20,191
)
(22,705
)
Effect of exchange rate changes on cash
and cash equivalents
(291
)
330
Net change in cash and cash
equivalents
(1,127
)
10,886
Cash and cash equivalents, beginning of
period
47,111
42,018
Cash and cash equivalents, end of
period
$
45,984
$
52,904
Cash paid (received) for:
Interest
$
4,206
$
4,353
Income taxes, net
2,695
(34
)
OIL STATES INTERNATIONAL, INC.
AND SUBSIDIARIES
SEGMENT DATA
(In Thousands)
(Unaudited)
Three Months Ended
Nine Months Ended
September 30, 2024
June 30, 2024
September 30, 2023
September 30, 2024
September 30, 2023
Revenues(1):
Offshore Manufactured Products
Project-driven:
Products
$
58,164
$
59,752
$
58,169
$
171,053
$
152,241
Services
32,754
31,024
30,391
89,011
79,867
90,918
90,776
88,560
260,064
232,108
Military and other products
11,316
10,780
7,510
30,583
23,114
Total Offshore Manufactured Products
102,234
101,556
96,070
290,647
255,222
Completion and Production Services
40,099
46,421
59,831
133,812
191,425
Downhole Technologies
32,015
38,406
38,388
103,534
127,370
Total revenues
$
174,348
$
186,383
$
194,289
$
527,993
$
574,017
Operating income (loss)(1):
Offshore Manufactured Products(2)
$
19,310
$
14,357
$
15,586
$
44,270
$
32,122
Completion and Production Services(3)
(18,267
)
(535
)
3,285
(19,221
)
14,983
Downhole Technologies(4)
(3,653
)
(1,141
)
(1,900
)
(16,873
)
(148
)
Corporate
(8,431
)
(10,636
)
(10,781
)
(28,349
)
(31,623
)
Total operating income (loss)
$
(11,041
)
$
2,045
$
6,190
$
(20,173
)
$
15,334
___________________
(1)
In the first quarter 2024,
certain short-cycle, consumable product operations historically
reported within the Offshore Manufactured Products segment were
integrated into the Downhole Technologies segment. Historical
segment financial results were conformed with the revised segment
presentation. Additionally, following the sale of its remaining
U.S. land-based drilling rigs and the exit of the flowback and well
testing service offerings in the third quarter of 2024, the
Company’s Well Site Services segment name was changed to the
Completion and Production Services segment.
(2)
Operating income for the three
months ended September 30, 2024 and June 30, 2024, and the nine
months ended September 30, 2024 included facility consolidation
charges of $0.4 million, $1.5 million and $3.4 million,
respectively, associated with the Offshore Manufactured Products
segment’s consolidation and relocation of certain manufacturing and
service locations and other cost reduction measures. Operating
income for the three and nine months ended September 30, 2023
included facility consolidation charges of $1.6 million associated
with the Offshore/Manufactured Products segment's consolidation and
relocation of certain manufacturing and service locations.
(3)
Operating income (loss) for the
three months ended September 30, 2024 and June 30, 2024, and the
nine months ended September 30, 2024, included $15.9 million, $1.9
million and $18.5 million, respectively, in costs associated with
consolidation and exit of certain underperforming locations.
Additionally, during the three months ended September 30, 2024 and
June 30, 2024, and the nine months ended September 30, 2024, the
segment incurred $1.3 million, $1.0 million and $2.7 million,
respectively, of costs associated with the defense of certain
Completion and Production Services segment patents related to
proprietary technologies.
(4)
Operating loss for the nine
months ended September 30, 2024 included a non-cash goodwill
impairment charge of $10.0 million, recognized in connection with
the 2024 segment realignment. Additionally, during the three and
nine months ended September 30, 2024, the segment incurred $0.6
million in costs associated primarily with the exit of an
underperforming location.
OIL STATES INTERNATIONAL, INC.
AND SUBSIDIARIES
RECONCILIATIONS OF GAAP TO
NON-GAAP FINANCIAL INFORMATION
ADJUSTED EBITDA (A)
(In Thousands)
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
2024
June 30, 2024
September 30,
2023
September 30,
2024
September 30,
2023
Net income (loss)
$
(14,349
)
$
1,301
$
4,212
$
(26,422
)
$
6,928
Interest expense, net
1,824
2,061
1,928
5,986
6,378
Income tax provision (benefit)
2,215
(665
)
236
1,574
2,700
Depreciation and amortization expense
13,635
14,698
15,416
42,528
46,209
Impairment of goodwill
—
—
—
10,000
—
Impairments of intangible assets
10,787
—
—
10,787
—
Impairments of operating lease assets
2,579
—
—
2,579
—
Facility consolidation/closure and other
charges
4,840
4,426
1,649
11,775
1,649
Gains on extinguishment of 4.75%
convertible senior notes
—
(515
)
—
(515
)
—
Adjusted EBITDA
$
21,531
$
21,306
$
23,441
$
58,292
$
63,864
________________
(A)
The term Adjusted EBITDA consists
of net income (loss) plus net interest expense, taxes, depreciation
and amortization expense, impairments of goodwill, intangible and
operating lease assets, and facility consolidation/closure and
other charges, less gains on extinguishment of 4.75% convertible
senior notes (“2026 Notes”). Adjusted EBITDA is not a measure of
financial performance under generally accepted accounting
principles (“GAAP”) and should not be considered in isolation from
or as a substitute for net income (loss) or cash flow measures
prepared in accordance with GAAP or as a measure of profitability
or liquidity. Additionally, Adjusted EBITDA may not be comparable
to other similarly titled measures of other companies. The Company
has included Adjusted EBITDA as a supplemental disclosure because
its management believes that Adjusted EBITDA provides useful
information regarding its ability to service debt and to fund
capital expenditures and provides investors a helpful measure for
comparing its operating performance with the performance of other
companies that have different financing and capital structures or
tax rates. The Company uses Adjusted EBITDA to compare and to
monitor the performance of the Company and its business segments to
other comparable public companies and as a benchmark for the award
of incentive compensation under its annual incentive compensation
plan. The table above sets forth reconciliations of Adjusted EBITDA
to net income (loss), which is the most directly comparable measure
of financial performance calculated under GAAP.
OIL STATES INTERNATIONAL, INC.
AND SUBSIDIARIES
RECONCILIATIONS OF GAAP TO
NON-GAAP FINANCIAL INFORMATION
ADJUSTED SEGMENT EBITDA
(B)
(In Thousands)
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
2024
June 30, 2024
September 30,
2023
September 30,
2024
September 30,
2023
Offshore Manufactured Products:
Operating income
$
19,310
$
14,357
$
15,586
$
44,270
$
32,122
Other income (expense), net
8
(20
)
68
29
314
Depreciation and amortization expense
3,631
4,247
4,405
11,571
12,555
Facility consolidation/closure and other
charges
354
1,547
1,649
3,364
1,649
Adjusted Segment EBITDA
$
23,303
$
20,131
$
21,708
$
59,234
$
46,640
Completion and Production
Services:
Operating income (loss)
$
(18,267
)
$
(535
)
$
3,285
$
(19,221
)
$
14,983
Other income, net
723
157
118
767
358
Depreciation and amortization expense
5,749
6,047
6,313
17,875
19,023
Impairments of intangible assets
10,787
—
—
10,787
—
Impairments of operating lease assets
2,092
—
—
2,092
—
Facility consolidation/closure and other
charges
4,329
2,879
—
8,254
—
Adjusted Segment EBITDA
$
5,413
$
8,548
$
9,716
$
20,554
$
34,364
Downhole Technologies:
Operating loss
$
(3,653
)
$
(1,141
)
$
(1,900
)
$
(16,873
)
$
(148
)
Depreciation and amortization expense
4,121
4,255
4,546
12,646
14,161
Impairment of goodwill
—
—
—
10,000
—
Impairments of operating lease assets
487
—
487
487
—
Facility consolidation/closure and other
charges
123
—
—
123
—
Adjusted Segment EBITDA
$
1,078
$
3,114
$
2,646
$
6,383
$
14,013
Corporate:
Operating loss
$
(8,431
)
$
(10,636
)
$
(10,781
)
$
(28,349
)
$
(31,623
)
Other income, net
—
515
—
515
—
Depreciation and amortization expense
134
149
152
436
470
Other charges
34
—
—
34
—
Gains on extinguishment of 4.75%
convertible senior notes
—
(515
)
—
(515
)
—
Adjusted Segment EBITDA
$
(8,263
)
$
(10,487
)
$
(10,629
)
$
(27,879
)
$
(31,153
)
________________
(B)
The term Adjusted Segment EBITDA
consists of operating income (loss) plus other income (expense),
depreciation and amortization expense, impairments of goodwill,
intangible and operating lease assets, and facility
consolidation/closure and other charges, less gains on
extinguishment of 2026 Notes. Adjusted Segment EBITDA is not a
measure of financial performance under GAAP and should not be
considered in isolation from or as a substitute for operating
income (loss) or cash flow measures prepared in accordance with
GAAP or as a measure of profitability or liquidity. Additionally,
Adjusted Segment EBITDA may not be comparable to other similarly
titled measures of other companies. The Company has included
Adjusted Segment EBITDA as supplemental disclosure because its
management believes that Adjusted Segment EBITDA provides useful
information regarding its ability to service debt and to fund
capital expenditures and provides investors a helpful measure for
comparing its operating performance with the performance of other
companies that have different financing and capital structures or
tax rates. The Company uses Adjusted Segment EBITDA to compare and
to monitor the performance of its business segments to other
comparable public companies and as a benchmark for the award of
incentive compensation under its annual incentive compensation
plan. The table above sets forth reconciliations of Adjusted
Segment EBITDA to operating income (loss), which is the most
directly comparable measure of financial performance calculated
under GAAP.
OIL STATES INTERNATIONAL, INC.
AND SUBSIDIARIES
RECONCILIATIONS OF GAAP TO
NON-GAAP FINANCIAL INFORMATION
ADJUSTED NET INCOME (LOSS),
EXCLUDING CHARGES AND CREDITS (C) AND
ADJUSTED NET INCOME (LOSS) PER
SHARE, EXCLUDING CHARGES AND CREDITS (D)
(In Thousands, Except Per Share
Amounts)
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
2024
June 30, 2024
September 30,
2023
September 30,
2024
September 30,
2023
Net income (loss)
$
(14,349
)
$
1,301
$
4,212
$
(26,422
)
$
6,928
Impairment of goodwill
—
—
—
10,000
—
Impairments of intangible assets
10,787
—
—
10,787
—
Impairments of operating lease assets
2,579
—
—
2,579
—
Facility consolidation/closure and other
charges
4,840
4,426
1,649
11,775
1,649
Gains on extinguishment of 4.75%
convertible senior notes
—
(515
)
—
(515
)
—
Total adjustments, before taxes
18,206
3,911
1,649
34,626
1,649
Tax benefit
(1,161
)
(821
)
(346
)
(2,990
)
(346
)
Total adjustments, net of taxes
17,045
3,090
1,303
31,636
1,303
Adjusted net income, excluding charges and
credits
$
2,696
$
4,391
$
5,515
$
5,214
$
8,231
Adjusted weighted average number of
diluted common shares outstanding (E)
62,412
62,704
63,060
62,648
63,135
Adjusted diluted net income per share,
excluding charges and credits (E)
$
0.04
$
0.07
$
0.09
$
0.08
$
0.13
___________________
(C)
Adjusted net income, excluding charges and
credits consists of net income (loss) plus impairments of goodwill,
intangible and operating lease assets, and facility
consolidation/closure and other charges, less gains on
extinguishment of the 2026 Notes. Adjusted net income, excluding
charges and credits is not a measure of financial performance under
GAAP and should not be considered in isolation from or as a
substitute for net income (loss) as prepared in accordance with
GAAP. The Company has included adjusted net income, excluding
charges and credits as a supplemental disclosure because its
management believes that adjusted net income, excluding charges and
credits provides investors a helpful measure for comparing its
operating performance with previous and subsequent periods.
(D)
Adjusted net income per share, excluding
charges and credits is calculated as adjusted net income, excluding
charges and credits divided by the weighted average number of
common shares outstanding. Adjusted net income per share, excluding
charges and credits is not a measure of financial performance under
GAAP and should not be considered in isolation from or as a
substitute for net income (loss) per share as prepared in
accordance with GAAP. The Company has included adjusted net income
per share, excluding charges and credits as a supplemental
disclosure because its management believes that adjusted net income
per share, excluding charges and credits provides investors a
helpful measure for comparing its operating performance with
previous and subsequent periods.
(E)
The calculation of diluted adjusted
earnings per share for the three and nine months ended September
30, 2024 included 328 thousand shares and 292 thousand shares,
respectively, issuable pursuant to outstanding performance share
units.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241030426442/en/
Lloyd A. Hajdik Oil States International, Inc. Executive Vice
President, Chief Financial Officer and Treasurer (713) 652-0582
Oil States (NYSE:OIS)
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