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Oil States Announces Third Quarter 2023 Results

  • Net income of $4.2 million, or $0.07 per diluted share, reported for the quarter
  • Consolidated revenue of $194.3 million increased 6% sequentially, boosted by higher offshore and international activity
  • Adjusted EBITDA (a non-GAAP measure(1)) of $23.4 million increased 23% sequentially
  • Offshore/Manufactured Products segment revenue increased 18% sequentially to $111.0 million – the highest level reported since the fourth quarter of 2016
  • Offshore/Manufactured Products segment's backlog increased sequentially for a fifth consecutive quarter totaling $348 million as of September 30, with a quarterly book-to-bill ratio of 1.2x
    • Third quarter segment bookings were augmented by two contract awards exceeding $15 million each
  • Generated operating cash flow of $13.6 million in the quarter
  • Incurred facility consolidation charges of $1.6 million ($1.3 million after-tax, or $0.02 per share) associated with the planned sales of certain manufacturing and service locations and the relocation of related equipment

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

 

Three Months Ended

 

% Change

(Unaudited, In Thousands, Except Per Share Amounts)

September 30,

2023

 

June 30,

2023

 

September 30,

2022

 

Sequential

 

Year-over-

Year

Consolidated results:

 

 

 

 

 

 

 

 

 

Revenues

$

194,289

 

 

$

183,529

 

 

$

189,394

 

 

6

%

 

3

%

Operating income(2)

$

6,190

 

 

$

3,269

 

 

$

5,058

 

 

89

%

 

22

%

Net income

$

4,212

 

 

$

558

 

 

$

2,143

 

 

655

%

 

97

%

Diluted earning per share

$

0.07

 

 

$

0.01

 

 

$

0.03

 

 

600

%

 

133

%

Adjusted EBITDA(1)

$

23,441

 

 

$

19,016

 

 

$

21,962

 

 

23

%

 

7

%

 

 

 

 

 

 

 

 

 

 

Revenues by segment:

 

 

 

 

 

 

 

 

 

Offshore/Manufactured Products

$

111,043

 

 

$

94,086

 

 

$

96,037

 

 

18

%

 

16

%

Well Site Services

 

59,831

 

 

 

64,536

 

 

 

60,509

 

 

(7

)%

 

(1

)%

Downhole Technologies

 

23,415

 

 

 

24,907

 

 

 

32,848

 

 

(6

)%

 

(29

)%

 

 

 

 

 

 

 

 

 

 

Operating income (loss) by segment:

 

 

 

 

 

 

 

 

 

Offshore/Manufactured Products(2)

$

17,804

 

 

$

11,253

 

 

$

13,373

 

 

58

%

 

33

%

Well Site Services

 

3,285

 

 

 

4,732

 

 

 

2,359

 

 

(31

)%

 

39

%

Downhole Technologies

 

(4,118

)

 

 

(2,536

)

 

 

(342

)

 

(62

)%

 

n.m.

 

 

 

 

 

 

 

 

 

 

Adjusted Segment EBITDA (a non-GAAP measure(1)):

Offshore/Manufactured Products

$

24,442

 

 

$

15,981

 

 

$

18,304

 

 

53

%

 

34

%

Well Site Services

 

9,716

 

 

 

11,425

 

 

 

9,723

 

 

(15

)%

 

%

Downhole Technologies

 

(88

)

 

 

1,639

 

 

 

4,100

 

 

n.m.

 

n.m.

___________________

(1)

Adjusted EBITDA and Adjusted Segment EBITDA 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)

Operating income in the third quarter of 2023 included charges of $1.6 million associated with the Offshore/Manufactured Products segment's ongoing consolidation of certain manufacturing and service locations. Operating income in the third quarter of 2022 included a $6.1 million gain related to the Offshore/Manufactured Products segment’s settlement of outstanding litigation against certain service providers.

Oil States International, Inc. reported net income of $4.2 million, or $0.07 per share, and Adjusted EBITDA of $23.4 million for the third quarter of 2023 on revenues of $194.3 million. Reported third quarter 2023 net income included facility consolidation charges of $1.6 million ($1.3 million after-tax, or $0.02 per share). These results compare to revenues of $183.5 million, net income of $0.6 million, or $0.01 per share, and Adjusted EBITDA of $19.0 million reported in the second quarter of 2023.

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

"Our third quarter results benefited from growth in offshore and international spending, with significant sequential and year-over-year increases in offshore-project activity and backlog conversion. However, our quarterly performance was tempered by an industry-wide decline in U.S. well completions which has been ongoing since the start of 2023. We believe the U.S. activity declines were triggered by weaker commodity prices in effect earlier this year. With currently improved commodity pricing, we expect U.S. activity to recover into 2024.

"Reported revenues in our Offshore/Manufactured Products segment rose 18% sequentially and 16% year-over-year to $111 million in the third quarter of 2023 – the segment's highest revenue level since the fourth quarter of 2016. Segment backlog increased for a fifth consecutive quarter totaling $348 million as of September 30 – benefiting from our customers' increased planned investments in traditional and non-traditional offshore projects outside the United States. We received two notable project awards in the third quarter, including a production facility equipment order and a contract for our Merlin™ Deepsea Mineral Riser System designed for use in harvesting seabed minerals at extreme water depths. These minerals are critical components for the development of large-scale battery technology. The segment's bookings totaled $129 million, yielding a quarterly book-to-bill ratio of 1.2x.

"The receipt of another contract award for our Merlin™ Deepsea Mineral Riser System this quarter demonstrates the industry's recognition of our expertise and the technologies we have developed to enable pathways toward a lower-carbon multi-source energy mix to meet growing global energy demands. We are connecting the energy future by leveraging our rich oil and gas heritage in the support of additional energy sources while augmenting our core technologies, setting the stage for longer-term growth.

"Our continued investments in technology and innovation were also recently recognized by Gulf Energy, with our Active Seat Gate Valve receiving the 2023 Gulf Energy Information Excellence Award for Best Production Technology. This proprietary valve-technology provides operators with exceptional sealing performance while substantially reducing the amount of heavy grease used during valve operations and personnel intervention at the wellhead.

"In the third quarter, we generated cash flow from operations of $14 million and invested $2 million in net capital expenditures. With no short-term debt outstanding, cash on-hand increased to $53 million during the period. We expect to enhance our liquidity position and reduce our net debt in future quarters.

"We remain very encouraged by the continued up-cycle in offshore and international activity, customer acceptance of our recent technology introductions and growing backlog levels in our Offshore/Manufactured Products segment coupled with an improving commodity price environment."

Business Segment Results

(See Segment Data and Adjusted Segment EBITDA tables below)

Offshore/Manufactured Products

Offshore/Manufactured Products reported revenues of $111.0 million – the segment's highest revenue levels since the fourth quarter of 2016, operating income of $17.8 million and Adjusted Segment EBITDA of $24.4 million in the third quarter of 2023, compared to revenues of $94.1 million, operating income of $11.3 million and Adjusted Segment EBITDA of $16.0 million reported in the second quarter of 2023. During the third quarter of 2023, the segment recorded charges of $1.6 million associated with ongoing consolidation of certain manufacturing and service locations to gain operational efficiencies. Adjusted Segment EBITDA margin in the third quarter of 2023 was 22%, compared to 17% in the second quarter of 2023.

Backlog totaled $348 million as of September 30, 2023, an increase of $10 million, or 3%, from June 30, 2023 and $90 million, or 35%, from September 30, 2022. The current quarter-end backlog is at its highest level since December 31, 2015. Third quarter 2023 bookings totaled $129 million, yielding a quarterly book-to-bill ratio of 1.2x (1.2x year-to-date).

Well Site Services

Well Site Services reported revenues of $59.8 million, operating income of $3.3 million and Adjusted Segment EBITDA of $9.7 million in the third quarter of 2023, compared to revenues of $64.5 million, operating income of $4.7 million and Adjusted Segment EBITDA of $11.4 million reported in the second quarter of 2023. Adjusted Segment EBITDA margin was 16% in the third quarter of 2023, compared to 18% in the second quarter of 2023.

Downhole Technologies

Downhole Technologies reported revenues of $23.4 million and an operating loss of $4.1 million while Adjusted Segment EBITDA was essentially breakeven in the third quarter of 2023, compared to revenues of $24.9 million, an operating loss of $2.5 million and Adjusted Segment EBITDA of $1.6 million reported in the second quarter of 2023.

Corporate

Corporate operating expenses in the third quarter of 2023 totaled $10.8 million.

Interest Expense, Net

Net interest expense totaled $1.9 million in the third quarter of 2023, which included $0.5 million of non-cash amortization of deferred debt issuance costs.

Income Taxes

The Company recognized tax expense of $0.2 million on pre-tax income of $4.4 million during the third quarter of 2023. In the second quarter of 2023, the Company recognized tax expense of $0.9 million on pre-tax income of $1.4 million.

Cash Flows

During the third quarter of 2023, the Company generated cash flows from operations of $13.6 million and invested $6.0 million ($2.3 million net of proceeds from sales of property and equipment) in new equipment to support future growth.

Financial Condition

Cash on-hand increased $10.5 million in the quarter, totaling $52.9 million at September 30, 2023. No borrowings were outstanding under the Company's asset-based revolving credit facility (the "ABL Facility") at September 30, 2023. Liquidity (cash plus borrowing availability) totaled $137.4 million at September 30, 2023, with amounts available to be drawn under the ABL Facility totaling $84.5 million.

Conference Call Information

The call is scheduled for October 27, 2023 at 11 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, 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, 2022 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,

2023

 

June 30,

2023

 

September 30,

2022

 

September 30,

2023

 

September 30,

2022

Revenues:

 

 

 

 

 

 

 

 

 

Products

$

102,636

 

 

$

92,630

 

 

$

99,743

 

 

$

295,106

 

 

$

284,537

 

Services

 

91,653

 

 

 

90,899

 

 

 

89,651

 

 

 

278,911

 

 

 

250,735

 

 

 

194,289

 

 

 

183,529

 

 

 

189,394

 

 

 

574,017

 

 

 

535,272

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

Product costs

 

80,188

 

 

 

72,659

 

 

 

81,576

 

 

 

231,524

 

 

 

225,765

 

Service costs

 

70,239

 

 

 

69,371

 

 

 

69,723

 

 

 

211,668

 

 

 

194,294

 

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

 

150,427

 

 

 

142,030

 

 

 

151,299

 

 

 

443,192

 

 

 

420,059

 

Selling, general and administrative expense

 

24,241

 

 

 

23,528

 

 

 

23,374

 

 

 

71,785

 

 

 

70,964

 

Depreciation and amortization expense

 

15,416

 

 

 

15,537

 

 

 

16,413

 

 

 

46,209

 

 

 

51,469

 

Other operating income, net(1)

 

(1,985

)

 

 

(835

)

 

 

(6,750

)

 

 

(2,503

)

 

 

(6,852

)

 

 

188,099

 

 

 

180,260

 

 

 

184,336

 

 

 

558,683

 

 

 

535,640

 

Operating income (loss)

 

6,190

 

 

 

3,269

 

 

 

5,058

 

 

 

15,334

 

 

 

(368

)

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

(1,928

)

 

 

(2,059

)

 

 

(2,637

)

 

 

(6,378

)

 

 

(7,947

)

Other income, net

 

186

 

 

 

210

 

 

 

491

 

 

 

672

 

 

 

1,892

 

Income (loss) before income taxes

 

4,448

 

 

 

1,420

 

 

 

2,912

 

 

 

9,628

 

 

 

(6,423

)

Income tax provision

 

(236

)

 

 

(862

)

 

 

(769

)

 

 

(2,700

)

 

 

(6,002

)

Net income (loss)

$

4,212

 

 

$

558

 

 

$

2,143

 

 

$

6,928

 

 

$

(12,425

)

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share:

 

 

 

 

 

 

 

 

 

Basic

$

0.07

 

 

$

0.01

 

 

$

0.03

 

 

$

0.11

 

 

$

(0.20

)

Diluted

 

0.07

 

 

 

0.01

 

 

 

0.03

 

 

 

0.11

 

 

 

(0.20

)

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

Basic

 

62,651

 

 

 

62,803

 

 

 

62,674

 

 

 

62,760

 

 

 

61,292

 

Diluted

 

63,060

 

 

 

63,174

 

 

 

62,676

 

 

 

63,135

 

 

 

61,292

 

________________

(1)

Other operating income, net for the three months and nine months ended September 30, 2023 included facility consolidation charges of $1.6 million associated with the Offshore/Manufactured Products segment's ongoing consolidation and relocation of certain manufacturing and service locations. Other operating income, net for the three and nine months ended September 30, 2022 included a gain of $6.1 million related to the Offshore/Manufactured Products segment's settlement of outstanding litigation against certain service providers.

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES

 

CONSOLIDATED BALANCE SHEETS

(In Thousands)

 

September 30, 2023

 

December 31, 2022

 

(Unaudited)

 

 

ASSETS

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

52,904

 

 

$

42,018

 

Accounts receivable, net

 

189,249

 

 

 

218,769

 

Inventories, net

 

206,541

 

 

 

182,658

 

Prepaid expenses and other current assets

 

36,015

 

 

 

19,317

 

Total current assets

 

484,709

 

 

 

462,762

 

 

 

 

 

Property, plant, and equipment, net

 

279,146

 

 

 

303,835

 

Operating lease assets, net

 

22,002

 

 

 

23,028

 

Goodwill, net

 

79,399

 

 

 

79,282

 

Other intangible assets, net

 

157,077

 

 

 

169,798

 

Other noncurrent assets

 

25,687

 

 

 

25,687

 

Total assets

$

1,048,020

 

 

$

1,064,392

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

Current liabilities:

 

 

 

Current portion of long-term debt

$

589

 

 

$

17,831

 

Accounts payable

 

58,489

 

 

 

73,251

 

Accrued liabilities

 

49,138

 

 

 

49,057

 

Current operating lease liabilities

 

6,461

 

 

 

6,142

 

Income taxes payable

 

2,593

 

 

 

2,605

 

Deferred revenue

 

50,370

 

 

 

44,790

 

Total current liabilities

 

167,640

 

 

 

193,676

 

 

 

 

 

Long-term debt

 

135,437

 

 

 

135,066

 

Long-term operating lease liabilities

 

18,768

 

 

 

20,658

 

Deferred income taxes

 

7,386

 

 

 

6,652

 

Other noncurrent liabilities

 

20,425

 

 

 

18,782

 

Total liabilities

 

349,656

 

 

 

374,834

 

 

 

 

 

Stockholders' equity:

 

 

 

Common stock

 

772

 

 

 

766

 

Additional paid-in capital

 

1,127,443

 

 

 

1,122,292

 

Retained earnings

 

278,955

 

 

 

272,027

 

Accumulated other comprehensive loss

 

(77,271

)

 

 

(78,941

)

Treasury stock

 

(631,535

)

 

 

(626,586

)

Total stockholders' equity

 

698,364

 

 

 

689,558

 

Total liabilities and stockholders' equity

$

1,048,020

 

 

$

1,064,392

 

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

(Unaudited)

 

Nine Months Ended September 30,

 

2023

 

2022

Cash flows from operating activities:

 

 

 

Net income (loss)

$

6,928

 

 

$

(12,425

)

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

 

 

 

Depreciation and amortization expense

 

46,209

 

 

 

51,469

 

Stock-based compensation expense

 

5,157

 

 

 

5,167

 

Amortization of deferred financing costs

 

1,344

 

 

 

1,416

 

Deferred income tax provision (benefit)

 

(66

)

 

 

1,295

 

Gains on disposals of assets

 

(3,335

)

 

 

(1,538

)

Settlement of disputes with seller of GEODynamics, Inc.

 

 

 

 

620

 

Other, net

 

(614

)

 

 

459

 

Changes in operating assets and liabilities, net of effect from acquired business:

 

 

 

Accounts receivable

 

29,538

 

 

 

(27,745

)

Inventories

 

(23,754

)

 

 

(18,680

)

Accounts payable and accrued liabilities

 

(17,515

)

 

 

8,873

 

Deferred revenue

 

5,580

 

 

 

7,496

 

Other operating assets and liabilities, net

 

2,905

 

 

 

2,586

 

Net cash flows provided by operating activities

 

52,377

 

 

 

18,993

 

 

 

 

 

Cash flows from investing activities:

 

 

 

Capital expenditures

 

(23,370

)

 

 

(13,263

)

Proceeds from disposition of property and equipment

 

4,374

 

 

 

2,211

 

Acquisition of business, net of cash acquired

 

 

 

 

(8,125

)

Other, net

 

(120

)

 

 

(168

)

Net cash flows used in investing activities

 

(19,116

)

 

 

(19,345

)

 

 

 

 

Cash flows from financing activities:

 

 

 

Revolving credit facility borrowings

 

35,693

 

 

 

9,830

 

Revolving credit facility repayments

 

(35,693

)

 

 

(9,830

)

Repayment of 1.50% convertible senior notes

 

(17,315

)

 

 

(6,272

)

Payment of promissory note to seller of GEODynamics, Inc.

 

 

 

 

(10,000

)

Other debt and finance lease repayments

 

(340

)

 

 

(541

)

Payment of financing costs

 

(101

)

 

 

(81

)

Purchases of treasury stock

 

(3,001

)

 

 

 

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

due to vesting of stock awards

 

(1,948

)

 

 

(1,002

)

Net cash flows used in financing activities

 

(22,705

)

 

 

(17,896

)

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

330

 

 

 

(1,501

)

Net change in cash and cash equivalents

 

10,886

 

 

 

(19,749

)

Cash and cash equivalents, beginning of period

 

42,018

 

 

 

52,852

 

Cash and cash equivalents, end of period

$

52,904

 

 

$

33,103

 

 

 

 

 

Cash paid (received) for:

 

 

 

Interest

$

4,353

 

 

$

4,605

 

Income taxes, net

 

(34

)

 

 

(67

)

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES

 

SEGMENT DATA

(In Thousands)

(Unaudited)

 

Three Months Ended

 

Nine Months Ended

 

September 30,

2023(2)

 

June 30,

2023

 

September 30,

2022(3)

 

September 30,

2023(2)

 

September 30,

2022(3)

Revenues(1):

 

 

 

 

 

 

 

 

 

Offshore/Manufactured Products

 

 

 

 

 

 

 

 

 

Project-driven:

 

 

 

 

 

 

 

 

 

Products

$

45,527

 

 

$

32,210

 

 

$

38,911

 

 

$

116,869

 

 

$

113,853

 

Services

 

30,391

 

 

 

24,846

 

 

 

23,421

 

 

 

79,867

 

 

 

71,714

 

 

 

75,918

 

 

 

57,056

 

 

 

62,332

 

 

 

196,736

 

 

 

185,567

 

Military and other products

 

7,195

 

 

 

7,965

 

 

 

9,995

 

 

 

22,157

 

 

 

23,104

 

Short-cycle products

 

27,930

 

 

 

29,065

 

 

 

23,710

 

 

 

84,435

 

 

 

67,945

 

Total Offshore/Manufactured Products

 

111,043

 

 

 

94,086

 

 

 

96,037

 

 

 

303,328

 

 

 

276,616

 

Well Site Services

 

59,831

 

 

 

64,536

 

 

 

60,509

 

 

 

191,425

 

 

 

163,500

 

Downhole Technologies

 

23,415

 

 

 

24,907

 

 

 

32,848

 

 

 

79,264

 

 

 

95,156

 

Total revenues

$

194,289

 

 

$

183,529

 

 

$

189,394

 

 

$

574,017

 

 

$

535,272

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss):

 

 

 

 

 

 

 

 

 

Offshore/Manufactured Products

$

17,804

 

 

$

11,253

 

 

$

13,373

 

 

$

40,147

 

 

$

33,010

 

Well Site Services

 

3,285

 

 

 

4,732

 

 

 

2,359

 

 

 

14,983

 

 

 

(435

)

Downhole Technologies

 

(4,118

)

 

 

(2,536

)

 

 

(342

)

 

 

(8,173

)

 

 

(3,332

)

Corporate

 

(10,781

)

 

 

(10,180

)

 

 

(10,332

)

 

 

(31,623

)

 

 

(29,611

)

Total operating income (loss)

$

6,190

 

 

$

3,269

 

 

$

5,058

 

 

$

15,334

 

 

$

(368

)

________________

(1)

The Company revised its supplemental disclosure of disaggregated revenue information in the second quarter of 2023. Prior-period disclosures of disaggregated revenue information were conformed with the current-period presentation.

(2)

Operating income for the three months and nine months ended September 30, 2023 included facility consolidation charges of $1.6 million associated with the Offshore/Manufactured Products segment's ongoing consolidation and relocation of certain manufacturing and service locations.

(3)

Operating income (loss) for the three and nine months ended September 30, 2022 included a gain of $6.1 million related to the Offshore/Manufactured Products segment's settlement of outstanding litigation against certain service providers.

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,

2023

 

June 30,

2023

 

September 30,

2022

 

September 30,

2023

 

September 30,

2022

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

4,212

 

$

558

 

$

2,143

 

$

6,928

 

$

(12,425

)

Interest expense, net

 

1,928

 

 

2,059

 

 

2,637

 

 

6,378

 

 

7,947

 

Income tax provision

 

236

 

 

862

 

 

769

 

 

2,700

 

 

6,002

 

Depreciation and amortization expense

 

15,416

 

 

15,537

 

 

16,413

 

 

46,209

 

 

51,469

 

Facility consolidation charges

 

1,649

 

 

 

 

 

 

1,649

 

 

 

Settlement of disputes with seller of GEODynamics, Inc.

 

 

 

 

 

 

 

 

 

620

 

Gains on extinguishment of 1.50% convertible senior notes

 

 

 

 

 

 

 

 

 

(157

)

Adjusted EBITDA

$

23,441

 

$

19,016

 

$

21,962

 

$

63,864

 

$

53,456

 

________________

(A)

The term Adjusted EBITDA consists of net income (loss) plus net interest expense, taxes, depreciation and amortization expense, facility consolidation charges and loss on settlement of disputes with the seller of GEODynamics, Inc., less gains on extinguishment of 1.50% convertible senior notes (the "2023 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,

2023

 

June 30,

2023

 

September 30,

2022

 

September 30,

2023

 

September 30,

2022

Offshore/Manufactured Products:

 

 

 

 

 

 

 

 

 

Operating income

$

17,804

 

 

$

11,253

 

 

$

13,373

 

 

$

40,147

 

 

$

33,010

 

Other income (expense), net

 

68

 

 

 

81

 

 

 

(141

)

 

 

314

 

 

 

(55

)

Depreciation and amortization expense

 

4,921

 

 

 

4,647

 

 

 

5,072

 

 

 

14,236

 

 

 

15,651

 

Facility consolidation charges

 

1,649

 

 

 

 

 

 

 

 

 

1,649

 

 

 

 

Adjusted Segment EBITDA

$

24,442

 

 

$

15,981

 

 

$

18,304

 

 

$

56,346

 

 

$

48,606

 

 

 

 

 

 

 

 

 

 

 

Well Site Services:

 

 

 

 

 

 

 

 

 

Operating income (loss)

$

3,285

 

 

$

4,732

 

 

$

2,359

 

 

$

14,983

 

 

$

(435

)

Other income, net

 

118

 

 

 

129

 

 

 

632

 

 

 

358

 

 

 

2,496

 

Depreciation and amortization expense

 

6,313

 

 

 

6,564

 

 

 

6,732

 

 

 

19,023

 

 

 

22,059

 

Adjusted Segment EBITDA

$

9,716

 

 

$

11,425

 

 

$

9,723

 

 

$

34,364

 

 

$

24,120

 

 

 

 

 

 

 

 

 

 

 

Downhole Technologies:

 

 

 

 

 

 

 

 

 

Operating loss

$

(4,118

)

 

$

(2,536

)

 

$

(342

)

 

$

(8,173

)

 

$

(3,332

)

Other expense, net

 

 

 

 

 

 

 

 

 

 

 

 

 

(86

)

Depreciation and amortization expense

 

4,030

 

 

 

4,175

 

 

 

4,442

 

 

 

12,480

 

 

 

13,249

 

Adjusted Segment EBITDA

$

(88

)

 

$

1,639

 

 

$

4,100

 

 

$

4,307

 

 

$

9,831

 

 

 

 

 

 

 

 

 

 

 

Corporate:

 

 

 

 

 

 

 

 

 

Operating loss

$

(10,781

)

 

$

(10,180

)

 

$

(10,332

)

 

$

(31,623

)

 

$

(29,611

)

Other expense, net

 

 

 

 

 

 

 

 

 

 

 

 

 

(463

)

Depreciation and amortization expense

 

152

 

 

 

151

 

 

 

167

 

 

 

470

 

 

 

510

 

Settlement of disputes with seller of GEODynamics, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

620

 

Gains on extinguishment of 1.50% convertible senior notes

 

 

 

 

 

 

 

 

 

 

 

 

 

(157

)

Adjusted Segment EBITDA

$

(10,629

)

 

$

(10,029

)

 

$

(10,165

)

 

$

(31,153

)

 

$

(29,101

)

________________

(B)

The term Adjusted Segment EBITDA consists of operating income (loss) plus other income (expense), depreciation and amortization expense, facility consolidation charges and loss on settlement of disputes with the seller of GEODynamics, Inc., less gains on extinguishment of the 2023 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.

 

Contacts

Lloyd A. Hajdik

Oil States International, Inc.

Executive Vice President, Chief Financial Officer and Treasurer

(713) 652-0582

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