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  Title	Oil States Announces Third Quarter 2024 Results
  ID	3788863
  External ID	110000248
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  Published Date	Oct. 30, 2024, 6 a.m.
  Summary	Oil States Announces Third Quarter 2024 Results Business Wire Wed, Oct 30, 2024, 7:00 AM 14 min read In This Article: OIS +1.94% Net loss of $14.3 million, or $0.23 per share, reported for the quarter
  Tags	press-release
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  Sentiment	Negative: 0.74482    Neutral: 0.22048    Positive: 0.03470
  Relevance	0.01478

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  Content ID	2066344
  Key	6b2c1dfd-e05e-4410-adac-cb458fe9e128
  Content	Oil States Announces Third Quarter 2024 Results Business Wire Wed, Oct 30, 2024, 7:00 AM 14 min read In This Article: OIS +1.94% 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 HOUSTON, October 30, 2024 --( BUSINESS WIRE )--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). Story Continues 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/ Contacts Lloyd A. Hajdik Oil States International, Inc. Executive Vice President, Chief Financial Officer and Treasurer (713) 652-0582 View Comments Terms and Privacy Policy Privacy Dashboard Recommended Stories
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