HOUSTON, Feb. 16, 2023 (GLOBE NEWSWIRE) — Oil States International, Inc. (NYSE: OIS) reported a net loss of $19.9 million, or $0.33 per share, for the fourth quarter of 2023. The reported results included: non-cash impairment charges of $2.2 million ($1.7 million after tax, or $0.03 per share) related to write-downs of inventories and fixed assets; severance and restructuring charges of $0.8 million ($0.6 million after-tax, or $0.01 per share); and a non-cash foreign currency translation loss of $9.3 million ($9.3 million after-tax, or $0.15 per share) reclassified from other comprehensive income upon exit of the Company’s Argentinian operation. After excluding these charges, the Company’s adjusted net loss was $8.2 million, or $0.14 per share.
During the fourth quarter of 2023, the Company generated revenues of $161.3 million and Adjusted Consolidated EBITDA (Note A) of $13.4 million. These results compare to revenues of $140.5 million and Adjusted Consolidated EBITDA of $8.5 million reported in the third quarter of 2023.
Fourth quarter 2023 highlights included:
- Offshore/Manufactured Products segment revenue and Adjusted Segment EBITDA (Note B) increased sequentially 34% and 59%, respectively, driven by a 72% increase in project-related revenue
- Offshore/Manufactured Products backlog increased $11 million to $260 million, with a book-to-bill ratio of 1.1x, augmented by one notable project award exceeding $10 million
- Well Site Services Adjusted Segment EBITDA increased sequentially to $6.2 million despite a modest seasonal reduction in revenue
Oil States’ President and Chief Executive Officer, Cindy B. Taylor, stated,
“Our consolidated revenues and Adjusted Consolidated EBITDA increased sequentially by 15% and 57%, respectively, despite global challenges associated with the COVID-19 pandemic, supply chain disruptions and a modest seasonal decline in U.S. customer completion activity in the Northeast.
“Revenues in our Offshore/Manufactured Products segment led the growth, with a 34% sequential increase driven primarily by higher sales of project-driven production, testing and connector products. Adjusted Segment EBITDA for Offshore/Manufactured Products increased $5.1 million, or 59%, sequentially totaling $13.7 million, reflective of the revenue growth. Backlog grew to $260 million at December 31, 2023 with quarterly bookings of $105 million, yielding book-to-bill ratios of 1.1x for the fourth quarter and 1.2x for the full-year 2023.
“Our Well Site Services segment revenues decreased 6% from the prior quarter due to a seasonal decline in customer activity in our U.S. Rocky Mountain and Northeast regions coupled with slower activity stemming from ongoing infrastructure repairs by operators in the Gulf of Mexico following Hurricane Ida. However, Adjusted Segment EBITDA increased sequentially for the fifth consecutive quarter, given a more favorable revenue mix and the benefit of cost control measures.
“Fourth quarter revenues in our Downhole Technologies segment were up modestly from the third quarter, driven by higher sales of our domestic perforating products.
“We continue to focus on delivering superior products and services to our customers, which are expected to provide sustainable returns to the Company and its stakeholders as industry activity continues to recover from the harsh effects of the COVID-19 pandemic. We are focused on profitable product and service lines and will allocate capital accordingly. With this focus, stockholders’ returns should continue to improve.”
For the year ended December 31, 2023, the Company reported a net loss of $64.0 million, or $1.06 per share, revenues of $573.2 million and Adjusted Consolidated EBITDA of $38.1 million. The full-year 2023 results included: non-cash impairment charges of $7.7 million ($6.1 million after-tax, or $0.10 per share) related to write-downs of inventories and fixed and lease assets; severance and restructuring charges of $7.5 million ($5.9 million after-tax, or $0.10 per share); a non-cash foreign currency translation loss of $9.3 million ($9.3 million after-tax, or $0.15 per share) reclassified from other comprehensive income upon exit of the Company’s Argentinian operation; and non-cash gains of $4.0 million ($3.2 million after-tax, or $0.05 per share) associated with debt extinguishments. After excluding these charges and credits, the Company’s adjusted net loss was $45.8 million, or $0.76 per share.
BUSINESS SEGMENT RESULTS
(See Segment Data tables)
Offshore/Manufactured Products
Offshore/Manufactured Products reported revenues of $92.2 million and Adjusted Segment EBITDA of $13.7 million in the fourth quarter of 2023, compared to revenues of $69.0 million and Adjusted Segment EBITDA of $8.6 million reported in the third quarter of 2023. Revenues increased 34% sequentially, driven primarily by increases in project-driven and service revenues of 72% and 17%, respectively. Adjusted Segment EBITDA margin in the fourth quarter of 2023 was 15%, compared to 12% in the third quarter of 2023.
Backlog totaled $260 million as of December 31, 2023, a 4% sequential increase from September 30, 2023. During the fourth quarter of 2023, the segment received one notable project award exceeding $10 million. Fourth quarter 2023 bookings totaled $105 million, yielding a quarterly book-to-bill ratio of 1.1x and a full-year ratio of 1.2x.
Well Site Services
Well Site Services reported revenues of $43.3 million and Adjusted Segment EBITDA of $6.2 million in the fourth quarter of 2023, compared to revenues of $46.0 million and Adjusted Segment EBITDA of $5.9 million reported in the third quarter of 2023. Adjusted Segment EBITDA margin the fourth quarter of 2023 was 14%, compared to 13% in the third quarter of 2023.
In the fourth quarter of 2023, the segment recorded non-cash inventory and fixed asset impairment charges of $2.2 million due to the decision to exit certain non-performing service lines.
Downhole Technologies
Downhole Technologies reported revenues of $25.8 million and Adjusted Segment EBITDA of $0.1 million in the fourth quarter of 2023, compared to revenues of $25.5 million and Adjusted Segment EBITDA of $1.4 million reported in the third quarter of 2023. During the fourth quarter 2023, the segment recorded bad debt expense of $0.7 million on a receivable from a customer which announced liquidation in January 2023. Adjusted Segment EBITDA margin in the fourth quarter of 2023 was 1%, compared to 6% in the third quarter of 2023.
Corporate
Corporate operating expenses in the fourth quarter of 2023 totaled $6.7 million.
Interest Expense, Net
Net interest expense totaled $2.6 million in the fourth quarter of 2023, which included $0.5 million of non-cash amortization of deferred debt issuance costs.
Other Income (Expense), Net
In the fourth quarter of 2023, the Company recognized a $9.3 million non-cash loss associated with the reclassification of unrealized foreign currency translation adjustments to net income (loss), which were released upon the liquidation of the Company’s Argentinian operation. An offsetting non-cash benefit was recognized as other comprehensive income in the fourth quarter.
Income Taxes
The Company recognized an effective tax rate benefit of 1% in the fourth quarter of 2023, which compared to an effective tax rate benefit of 21% in the third quarter of 2023. The effective tax rate benefit for the fourth quarter of 2023 was below the U.S. statutory rate primarily due to certain non-deductible expenses, including the non-cash currency translation loss.
Financial Condition
No borrowings were outstanding under the Company’s asset-based revolving credit facility (the “ABL Facility”) at December 31, 2023. Cash totaled $52.9 million, compared to $67.6 million at September 30, 2023. Liquidity (cash plus borrowing availability) totaled $101.7 million at December 31, 2023 with amounts available to be drawn under the ABL Facility totaling $48.9 million.
The Company’s total debt represented 20% of combined total debt and stockholders’ equity as of December 31, 2023 and 2020.
Conference Call Information
The call is scheduled for February 17, 2023 at 9:00 a.m. central standard 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) 771-4371 in the United States or by dialing +1 (847) 585-4405 internationally and using the passcode 50277012. A replay of the conference call will be available one and a half 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.
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 of and demand for oil and natural gas, fluctuations in the prices thereof, the cyclical nature of the oil and natural gas industry, the impact of the COVID-19 pandemic on the Company and its customers, the other risks associated with the general nature of the energy service industry 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, 2020 and the subsequently filed 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)
| Three Months Ended | Year Ended | ||||||||||||||||||
| December 31, 2021 |
September 30, 2021 |
December 31, 2020 |
December 31, 2021 |
December 31, 2020 |
|||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||
| Revenues: | |||||||||||||||||||
| Products | $ | 89,401 | $ | 70,409 | $ | 73,051 | $ | 299,293 | $ | 331,272 | |||||||||
| Services | 71,919 | 70,119 | 64,326 | 273,868 | 306,803 | ||||||||||||||
| 161,320 | 140,528 | 137,377 | 573,161 | 638,075 | |||||||||||||||
| Costs and expenses: | |||||||||||||||||||
| Product costs | 72,890 | 60,310 | 62,992 | 246,589 | 287,615 | ||||||||||||||
| Service costs | 60,357 | 56,897 | 52,517 | 223,807 | 274,190 | ||||||||||||||
| Cost of revenues (exclusive of depreciation and amortization expense presented below)(1) |
133,247 | 117,207 | 115,509 | 470,396 | 561,805 | ||||||||||||||
| Selling, general and administrative expense | 20,297 | 20,078 | 22,597 | 83,692 | 94,102 | ||||||||||||||
| Depreciation and amortization expense | 18,655 | 19,657 | 23,237 | 80,741 | 98,543 | ||||||||||||||
| Impairments of goodwill | — | — | — | — | 406,056 | ||||||||||||||
| Impairments of fixed and lease assets | 722 | — | 4,257 | 4,166 | 12,447 | ||||||||||||||
| Other operating income, net | (328 | ) | (275 | ) | 141 | (1,042 | ) | (538 | ) | ||||||||||
| 172,593 | 156,667 | 165,741 | 637,953 | 1,172,415 | |||||||||||||||
| Operating loss | (11,273 | ) | (16,139 | ) | (28,364 | ) | (64,792 | ) | (534,340 | ) | |||||||||
| Interest expense, net | (2,577 | ) | (2,569 | ) | (2,637 | ) | (10,170 | ) | (13,869 | ) | |||||||||
| Other income (expense), net(2) | (6,289 | ) | 2,137 | 368 | 1,628 | 13,880 | |||||||||||||
| Loss before income taxes | (20,139 | ) | (16,571 | ) | (30,633 | ) | (73,334 | ) | (534,329 | ) | |||||||||
| Income tax benefit | 269 | 3,529 | 11,886 | 9,341 | 65,946 | ||||||||||||||
| Net loss | $ | (19,870 | ) | $ | (13,042 | ) | $ | (18,747 | ) | $ | (63,993 | ) | $ | (468,383 | ) | ||||
| Net loss per share: | |||||||||||||||||||
| Basic | $ | (0.33 | ) | $ | (0.22 | ) | $ | (0.31 | ) | $ | (1.06 | ) | $ | (7.83 | ) | ||||
| Diluted | $ | (0.33 | ) | $ | (0.22 | ) | $ | (0.31 | ) | $ | (1.06 | ) | $ | (7.83 | ) | ||||
| Weighted average number of common shares outstanding: | |||||||||||||||||||
| Basic | 60,380 | 60,377 | 59,885 | 60,293 | 59,812 | ||||||||||||||
| Diluted | 60,380 | 60,377 | 59,885 | 60,293 | 59,812 | ||||||||||||||
________________
(1) In the three months and year ended December 31, 2023, cost of revenues (exclusive of depreciation and amortization expense) included non-cash inventory impairment charges of $1.5 million (in service costs) and $3.6 million ($2.1 million in product costs and $1.5 million in service costs), respectively. For the three months and year ended December 31, 2020, cost of revenues (exclusive of depreciation and amortization expense) included non-cash inventory impairment charges of $5.9 million (in product costs) and $31.2 million ($17.9 million in product costs and $13.3 million in service costs), respectively.
(2) Other income (expense), net in the three months and year ended December 31, 2023 included a non-cash loss of $9.3 million associated with the reclassification of unrealized foreign currency translation adjustments which were released upon the liquidation of an international operation. Additionally, for the year ended December 31, 2023, non-cash gains of $4.0 million were recognized in connection with purchases of $131.4 million principal amount of the 2023 Notes. For the year ended December 31, 2020, non-cash gains of $10.7 million were recognized in connection with the purchases of $34.9 million in principal amount of the 2023 Notes.
OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands)
| December 31, 2023 | December 31, 2020 | ||||||
| (Unaudited) | |||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 52,852 | $ | 72,011 | |||
| Accounts receivable, net | 186,080 | 163,135 | |||||
| Inventories, net | 168,573 | 170,376 | |||||
| Prepaid expenses and other current assets | 19,222 | 18,071 | |||||
| Total current assets | 426,727 | 423,593 | |||||
| Property, plant, and equipment, net | 338,583 | 383,562 | |||||
| Operating lease assets, net | 25,388 | 33,140 | |||||
| Goodwill, net | 76,412 | 76,489 | |||||
| Other intangible assets, net | 185,749 | 205,749 | |||||
| Other noncurrent assets | 32,889 | 29,727 | |||||
| Total assets | $ | 1,085,748 | $ | 1,152,260 | |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
| Current liabilities: | |||||||
| Current portion of long-term debt | $ | 18,262 | $ | 17,778 | |||
| Accounts payable | 63,343 | 46,433 | |||||
| Accrued liabilities | 43,401 | 44,504 | |||||
| Current operating lease liabilities | 6,481 | 7,620 | |||||
| Income taxes payable | 2,564 | 2,413 | |||||
| Deferred revenue | 43,236 | 43,384 | |||||
| Total current liabilities | 177,287 | 162,132 | |||||
| Long-term debt | 160,488 | 165,759 | |||||
| Long-term operating lease liabilities | 23,452 | 29,166 | |||||
| Deferred income taxes | 3,637 | 14,263 | |||||
| Other noncurrent liabilities | 25,058 | 23,309 | |||||
| Total liabilities | 389,922 | 394,629 | |||||
| Stockholders’ equity: | |||||||
| Common stock | 739 | 733 | |||||
| Additional paid-in capital | 1,105,135 | 1,122,945 | |||||
| Retained earnings | 281,567 | 329,327 | |||||
| Accumulated other comprehensive loss | (66,031 | ) | (71,385 | ) | |||
| Treasury stock | (625,584 | ) | (623,989 | ) | |||
| Total stockholders’ equity | 695,826 | 757,631 | |||||
| Total liabilities and stockholders’ equity | $ | 1,085,748 | $ | 1,152,260 | |||
OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
| Year Ended December 31, | |||||||
| 2021 | 2020 | ||||||
| (Unaudited) | |||||||
| Cash flows from operating activities: | |||||||
| Net loss | $ | (63,993 | ) | $ | (468,383 | ) | |
| Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
| Depreciation and amortization expense | 80,741 | 98,543 | |||||
| Impairments of goodwill | — | 406,056 | |||||
| Impairments of inventories | 3,581 | 31,151 | |||||
| Impairments of fixed and lease assets | 4,166 | 12,447 | |||||
| Stock-based compensation expense | 7,879 | 8,431 | |||||
| Amortization of debt discount and deferred financing costs | 2,314 | 7,736 | |||||
| Deferred income tax benefit | (8,639 | ) | (24,404 | ) | |||
| Release of foreign currency translation adjustments on liquidation of an international operation | 9,320 | — | |||||
| Gains on extinguishment of 1.50% convertible senior notes | (4,022 | ) | (10,721 | ) | |||
| Gains on disposals of assets | (6,472 | ) | (2,444 | ) | |||
| Other, net | (511 | ) | 4,668 | ||||
| Changes in operating assets and liabilities: | |||||||
| Accounts receivable | (24,407 | ) | 63,876 | ||||
| Inventories | (10,334 | ) | 17,578 | ||||
| Accounts payable and accrued liabilities | 17,727 | (37,315 | ) | ||||
| Deferred revenue | (148 | ) | 25,549 | ||||
| Other operating assets and liabilities, net | (8 | ) | (13 | ) | |||
| Net cash flows provided by operating activities | 7,194 | 132,755 | |||||
| Cash flows from investing activities: | |||||||
| Capital expenditures | (17,517 | ) | (12,749 | ) | |||
| Proceeds from disposition of property and equipment | 11,527 | 9,601 | |||||
| Other, net | (636 | ) | (581 | ) | |||
| Net cash flows used in investing activities | (6,626 | ) | (3,729 | ) | |||
| Cash flows from financing activities: | |||||||
| Revolving credit facility borrowings | 12,873 | 72,173 | |||||
| Revolving credit facility repayments | (31,873 | ) | (105,104 | ) | |||
| Issuance of 4.75% convertible senior notes | 135,000 | — | |||||
| Purchases of 1.50% convertible senior notes | (125,952 | ) | (20,078 | ) | |||
| Other debt and finance lease repayments, net | (230 | ) | (8,222 | ) | |||
| Payment of financing costs | (7,791 | ) | (1,041 | ) | |||
| Shares added to treasury stock as a result of net share settlements due to vesting of stock awards |
(1,595 | ) | (2,745 | ) | |||
| Net cash flows used in financing activities | (19,568 | ) | (65,017 | ) | |||
| Effect of exchange rate changes on cash and cash equivalents | (159 | ) | (491 | ) | |||
| Net change in cash and cash equivalents | (19,159 | ) | 63,518 | ||||
| Cash and cash equivalents, beginning of period | 72,011 | 8,493 | |||||
| Cash and cash equivalents, end of period | $ | 52,852 | $ | 72,011 | |||
| Cash paid (received) for: | |||||||
| Interest | $ | 6,532 | $ | 6,402 | |||
| Income taxes, net | 152 | (36,766 | ) | ||||
OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES
SEGMENT DATA
(In Thousands)
(unaudited)
| Three Months Ended | Year Ended | ||||||||||||||||||
| December 31, 2021(2) |
September 30, 2021(3) |
December 31, 2020(4) |
December 31, 2021(5) |
December 31, 2020(6) |
|||||||||||||||
| Revenues: | |||||||||||||||||||
| Offshore/Manufactured Products(1): | |||||||||||||||||||
| Project-driven products | $ | 43,603 | $ | 25,294 | $ | 36,340 | $ | 122,097 | $ | 165,497 | |||||||||
| Short-cycle products | 18,212 | 18,682 | 6,808 | 65,174 | 48,142 | ||||||||||||||
| Other products and services | 30,394 | 25,027 | 32,370 | 111,458 | 126,661 | ||||||||||||||
| Total Offshore/Manufactured Products | 92,209 | 69,003 | 75,518 | 298,729 | 340,300 | ||||||||||||||
| Downhole Technologies | 25,775 | 25,527 | 23,193 | 103,492 | 97,936 | ||||||||||||||
| Well Site Services | 43,336 | 45,998 | 38,666 | 170,940 | 199,839 | ||||||||||||||
| Total revenues | $ | 161,320 | $ | 140,528 | $ | 137,377 | $ | 573,161 | $ | 638,075 | |||||||||
| Operating income (loss): | |||||||||||||||||||
| Offshore/Manufactured Products | $ | 7,802 | $ | 1,764 | $ | 1,408 | $ | 15,447 | $ | (80,794 | ) | ||||||||
| Downhole Technologies | (4,525 | ) | (5,035 | ) | (8,019 | ) | (13,470 | ) | (224,414 | ) | |||||||||
| Well Site Services | (7,818 | ) | (5,250 | ) | (11,642 | ) | (34,511 | ) | (193,388 | ) | |||||||||
| Corporate | (6,732 | ) | (7,618 | ) | (10,111 | ) | (32,258 | ) | (35,744 | ) | |||||||||
| Total operating loss | $ | (11,273 | ) | $ | (16,139 | ) | $ | (28,364 | ) | $ | (64,792 | ) | $ | (534,340 | ) | ||||
________________
(1) Disaggregated revenue data is provided to supplement the Segment Data.
(2) Operating income (loss) for the three months ended December 31, 2023 included $0.3 million of severance and restructuring charges related to the Offshore/Manufactured Products segment. In the Downhole Technologies segment, operating income (loss) included severance and restructuring charges of $0.2 million. In the Well Site Services segment, operating income (loss) included non-cash inventory and fixed asset impairment charges of $1.5 million and $0.7 million, respectively, and severance and restructuring charges of $0.3 million.
(3) Operating income (loss) for the three months ended September 30, 2023 included $0.3 million of severance and restructuring charges related to the Offshore/Manufactured Products segment. In the Downhole Technologies segment, operating income (loss) included a non-cash inventory impairment charge of $2.1 million and severance and restructuring charges of $0.1 million. In the Well Site Services segment, operating income (loss) included severance and restructuring charges of $0.4 million.
(4) Operating income (loss) for the three months ended December 31, 2020 included $0.6 million of severance and restructuring charges in the Offshore/Manufactured Products segment. In the Downhole Technologies segment, operating income (loss) included non-cash fixed and lease asset impairment charges of $3.6 million and severance and restructuring charges of $0.7 million. In the Well Site Services segment, operating income (loss) included a non-cash fixed asset impairment charge of $0.7 million and severance and restructuring charges of $0.2 million. In Corporate, operating income (loss) included $1.2 million of severance charges.
(5) Operating income (loss) for the year ended December 31, 2023 included $0.9 million of severance and restructuring charges related to the Offshore/Manufactured Products segment. In the Downhole Technologies segment, operating income (loss) included a non-cash inventory impairment charge of $2.1 million and severance and restructuring charges of $0.8 million. In the Well Site Services segment, operating income (loss) included non-cash fixed asset and operating lease impairment charges of $4.2 million, a non-cash inventory impairment charge of $1.5 million and severance and restructuring charges of $4.3 million. In Corporate, operating income (loss) included $1.6 million of severance charges.
(6) Operating income (loss) for the year ended December 31, 2020 included a non-cash goodwill impairment charge of $86.5 million, a non-cash inventory impairment charge of $16.2 million and $1.4 million of severance and restructuring charges related to the Offshore/Manufactured Products segment. In the Downhole Technologies segment, operating income (loss) included a non-cash goodwill impairment charge of $192.5 million, a non-cash inventory impairment charge of $5.9 million, non-cash fixed asset and lease impairment charges of $3.6 million and $2.0 million of severance and restructuring charges. In the Well Site Services segment, operating income (loss) included a non-cash goodwill impairment charge of $127.1 million, a non-cash inventory impairment charge of $9.0 million, non-cash fixed asset impairment charges of $8.8 million and $4.3 million of severance and restructuring charges. In Corporate, operating income (loss) included $1.4 million of severance charges.
OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
SEGMENT EBITDA AND ADJUSTED SEGMENT EBITDA (B)
(In Thousands)
(unaudited)
| Three Months Ended | Year Ended | ||||||||||||||||||
| December 31, 2021 |
September 30, 2021 |
December 31, 2020 |
December 31 2021 |
December 31, 2020 |
|||||||||||||||
| Offshore/Manufactured Products: | |||||||||||||||||||
| Operating income (loss) | $ | 7,802 | $ | 1,764 | $ | 1,408 | $ | 15,447 | $ | (80,794 | ) | ||||||||
| Other income, net | 21 | 881 | 82 | 770 | 542 | ||||||||||||||
| Depreciation and amortization expense | 5,502 | 5,662 | 5,376 | 22,190 | 21,881 | ||||||||||||||
| Impairment of goodwill | — | — | — | — | 86,500 | ||||||||||||||
| Impairment of inventories | — | — | — | — | 16,249 | ||||||||||||||
| Segment EBITDA | 13,325 | 8,307 | 6,866 | 38,407 | 44,378 | ||||||||||||||
| Severance and restructuring charges | 330 | 256 | 633 | 868 | 1,355 | ||||||||||||||
| Adjusted Segment EBITDA | $ | 13,655 | $ | 8,563 | $ | 7,499 | $ | 39,275 | $ | 45,733 | |||||||||
| Downhole Technologies: | |||||||||||||||||||
| Operating loss | $ | (4,525 | ) | $ | (5,035 | ) | $ | (8,019 | ) | $ | (13,470 | ) | $ | (224,414 | ) | ||||
| Other income (expense), net | — | (4 | ) | 16 | (6 | ) | (81 | ) | |||||||||||
| Depreciation and amortization expense | 4,455 | 4,226 | 5,745 | 17,591 | 22,649 | ||||||||||||||
| Impairment of goodwill | — | — | — | — | 192,502 | ||||||||||||||
| Impairment of inventories | — | 2,113 | — | 2,113 | 5,921 | ||||||||||||||
| Impairment of fixed and lease assets | — | — | 3,602 | — | 3,602 | ||||||||||||||
| Segment EBITDA | (70 | ) | 1,300 | 1,344 | 6,228 | 179 | |||||||||||||
| Severance and restructuring charges | 202 | 129 | 703 | 809 | 2,018 | ||||||||||||||
| Adjusted Segment EBITDA | $ | 132 | $ | 1,429 | $ | 2,047 | $ | 7,037 | $ | 2,197 | |||||||||
| Well Site Services: | |||||||||||||||||||
| Operating loss | $ | (7,818 | ) | $ | (5,250 | ) | $ | (11,642 | ) | $ | (34,511 | ) | $ | (193,388 | ) | ||||
| Other income | 3,010 | 1,260 | 270 | 6,162 | 2,698 | ||||||||||||||
| Depreciation and amortization expense | 8,511 | 9,531 | 11,906 | 40,152 | 53,240 | ||||||||||||||
| Impairment of goodwill | — | — | — | — | 127,054 | ||||||||||||||
| Impairments of inventories | 1,468 | — | — | 1,468 | 8,981 | ||||||||||||||
| Impairments of fixed and lease assets | 722 | — | 655 | 4,166 | 8,845 | ||||||||||||||
| Segment EBITDA | 5,893 | 5,541 | 1,189 | 17,437 | 7,430 | ||||||||||||||
| Severance and restructuring charges | 257 | 352 | 219 | 4,266 | 4,311 | ||||||||||||||
| Adjusted Segment EBITDA | $ | 6,150 | $ | 5,893 | $ | 1,408 | $ | 21,703 | $ | 11,741 | |||||||||
| Corporate: | |||||||||||||||||||
| Operating loss | $ | (6,732 | ) | $ | (7,618 | ) | $ | (10,111 | ) | $ | (32,258 | ) | $ | (35,744 | ) | ||||
| Other income (expense) | (9,320 | ) | — | — | (5,298 | ) | 10,721 | ||||||||||||
| Depreciation and amortization expense | 187 | 238 | 210 | 808 | 773 | ||||||||||||||
| Release of foreign currency translation adjustments on liquidation of an international operation |
9,320 | — | — | 9,320 | — | ||||||||||||||
| Gains on extinguishment of debt | — | — | — | (4,022 | ) | (10,721 | ) | ||||||||||||
| EBITDA | (6,545 | ) | (7,380 | ) | (9,901 | ) | (31,450 | ) | (34,971 | ) | |||||||||
| Severance charges | — | — | 1,169 | 1,555 | 1,385 | ||||||||||||||
| Adjusted EBITDA | $ | (6,545 | ) | $ | (7,380 | ) | $ | (8,732 | ) | $ | (29,895 | ) | $ | (33,586 | ) | ||||
OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
CONSOLIDATED EBITDA AND ADJUSTED CONSOLIDATED EBITDA (A)
(In Thousands)
(unaudited)
| Three Months Ended | Year Ended | ||||||||||||||||||
| December 31, 2021 |
September 30, 2021 |
December 31, 2020 |
December 31, 2021 |
December 31, 2020 |
|||||||||||||||
| Net loss | $ | (19,870 | ) | $ | (13,042 | ) | $ | (18,747 | ) | $ | (63,993 | ) | $ | (468,383 | ) | ||||
| Interest expense, net | 2,577 | 2,569 | 2,637 | 10,170 | 13,869 | ||||||||||||||
| Income tax benefit | (269 | ) | (3,529 | ) | (11,886 | ) | (9,341 | ) | (65,946 | ) | |||||||||
| Depreciation and amortization expense | 18,655 | 19,657 | 23,237 | 80,741 | 98,543 | ||||||||||||||
| Impairments of goodwill | — | — | — | — | 406,056 | ||||||||||||||
| Impairments of inventories | 1,468 | 2,113 | — | 3,581 | 31,151 | ||||||||||||||
| Impairments of fixed and lease assets | 722 | — | 4,257 | 4,166 | 12,447 | ||||||||||||||
| Release of foreign currency translation adjustments on liquidation of an international operation |
9,320 | — | — | 9,320 | — | ||||||||||||||
| Gains on extinguishment of 1.50% convertible senior notes | — | — | — | (4,022 | ) | (10,721 | ) | ||||||||||||
| Consolidated EBITDA | 12,603 | 7,768 | (502 | ) | 30,622 | 17,016 | |||||||||||||
| Severance and restructuring charges | 789 | 737 | 2,724 | 7,498 | 9,069 | ||||||||||||||
| Adjusted Consolidated EBITDA | $ | 13,392 | $ | 8,505 | $ | 2,222 | $ | 38,120 | $ | 26,085 | |||||||||
________________
(A) The terms Consolidated EBITDA and Adjusted Consolidated EBITDA consist of net loss plus net interest expense, taxes, depreciation and amortization expense, non-cash asset impairment charges and a non-cash loss associated with the reclassification of unrealized foreign currency translation adjustments which were released upon the liquidation of an international operation, less gains on extinguishment of 1.50% convertible senior notes (the “2023 Notes”) and adjustments for certain other items. Consolidated EBITDA and Adjusted Consolidated EBITDA are not measures of financial performance under generally accepted accounting principles and should not be considered in isolation from or as a substitute for net loss or cash flow measures prepared in accordance with generally accepted accounting principles or as measures of profitability or liquidity. Additionally, Consolidated EBITDA and Adjusted Consolidated EBITDA may not be comparable to other similarly titled measures of other companies. The Company has included Consolidated EBITDA and Adjusted Consolidated EBITDA as supplemental disclosures because its management believes that Consolidated EBITDA and Adjusted Consolidated EBITDA provide 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 Consolidated EBITDA and Adjusted Consolidated 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 Consolidated EBITDA and Adjusted Consolidated EBITDA to net loss, which is the most directly comparable measure of financial performance calculated under generally accepted accounting principles.
(B) The terms EBITDA, Adjusted EBITDA, Segment EBITDA and Adjusted Segment EBITDA consist of operating income (loss) plus other income (expense), depreciation and amortization expense, non-cash asset impairment charges and a non-cash loss associated with the reclassification of unrealized foreign currency translation adjustments which were released upon the liquidation of an international operation, less gains on extinguishment of the 2023 Notes and adjustments for certain other items. EBITDA, Adjusted EBITDA, Segment EBITDA and Adjusted Segment EBITDA are not measures of financial performance under generally accepted accounting principles and should not be considered in isolation from or as a substitute for operating income (loss) or cash flow measures prepared in accordance with generally accepted accounting principles or as a measure of profitability or liquidity. Additionally, EBITDA, Adjusted EBITDA, Segment EBITDA and Adjusted Segment EBITDA may not be comparable to other similarly titled measures of other companies. The Company has included EBITDA, Adjusted EBITDA, Segment EBITDA and Adjusted Segment EBITDA as supplemental disclosures because its management believes that EBITDA, Adjusted EBITDA, Segment EBITDA and Adjusted Segment EBITDA provide 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 EBITDA, Adjusted EBITDA, Segment EBITDA and 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 tables above set forth reconciliations of EBITDA, Adjusted EBITDA, Segment EBITDA and Adjusted Segment EBITDA to operating income (loss), which is the most directly comparable measure of financial performance calculated under generally accepted accounting principles.
Company Contact:
Lloyd A. Hajdik
Oil States International, Inc.
Executive Vice President, Chief Financial Officer and Treasurer
713-652-0582
SOURCE: Oil States International, Inc.
