Oil States Revises Third Quarter 2017 Guidance Due to the Impacts of Hurricane Harvey
October 18 2017 - 5:15PM
Oil States International, Inc. (NYSE:OIS) announced today updated
guidance for third quarter 2017 primarily due to the impact of
Hurricane Harvey, which caused widespread damage and logistical
challenges in Houston and the surrounding region during the
quarter. Oil States was impacted by lower revenues and
under-absorption of manufacturing facility costs primarily in its
Offshore/Manufactured Products segment, but also suffered
field-level downtime due to employee dislocations resulting from
the storm. The Company operates five manufacturing facilities in
the Houston area and employs approximately 500 individuals in the
region. One of the Company’s Houston facilities experienced
significant flooding and is not yet operational, but was fully
insured. Project work in that facility has been shifted to other
manufacturing locations to meet customer delivery requirements.
Based upon currently available information, the
Company is revising its third quarter 2017 guidance. Previously,
revenues were expected to range between $165 and $185 million.
Currently, the Company anticipates unaudited third quarter revenues
of approximately $164 million, an unaudited operating loss of
approximately $18 million and total Adjusted Segment EBITDA (Note
A) of approximately $9 million. These amounts are not yet final and
are subject to change as the Company finalizes its financial
statement close process for the third quarter.
Oil States will provide a more detailed update
on its third quarter 2017 earnings conference call scheduled for
October 27, 2017.
The tables below provide a summary of current
expected third quarter results.
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Segment Data for the Three Months
Ended September 30, 2017 (In Thousands)
(Unaudited) |
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Well SiteServices |
|
Offshore /ManufacturedProducts |
|
Corporate |
|
Total |
|
Revenues |
$ |
77,177 |
|
|
$ |
86,871 |
|
|
$ |
- |
|
|
$ |
164,048 |
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Operating income
(loss) |
$ |
(13,168 |
) |
|
$ |
7,334 |
|
|
$ |
(12,349 |
) |
|
$ |
(18,183 |
) |
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Well SiteServices |
|
Offshore /ManufacturedProducts |
|
Corporate |
|
Total |
|
Operating income
(loss) |
$ |
(13,168 |
) |
|
$ |
7,334 |
|
|
$ |
(12,349 |
) |
|
$ |
(18,183 |
) |
|
|
|
|
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|
|
|
|
|
Depreciation and amortization expense |
|
20,133 |
|
|
|
6,404 |
|
|
|
251 |
|
|
|
26,788 |
|
|
|
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|
|
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Other
income |
|
177 |
|
|
|
30 |
|
|
|
- |
|
|
|
207 |
|
|
|
|
|
|
|
|
|
|
|
Segment EBITDA (A) |
|
7,142 |
|
|
|
13,768 |
|
|
|
(12,098 |
) |
|
|
8,812 |
|
|
|
|
|
|
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|
Severance
and other downsizing charges |
|
175 |
|
|
|
253 |
|
|
|
- |
|
|
|
428 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted Segment EBITDA
(A) |
$ |
7,317 |
|
|
$ |
14,021 |
|
|
$ |
(12,098 |
) |
|
$ |
9,240 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted Segment EBITDA
Margin |
|
9.5 |
% |
|
|
16.1 |
% |
|
|
|
|
5.6 |
% |
(A) The terms Segment EBITDA and Adjusted
Segment EBITDA consist of operating income (loss) plus depreciation
and amortization expense, and certain other items as set forth in
the tables above. 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, Segment EBITDA and Adjusted Segment EBITDA may not be
comparable to other similarly titled measures of other
companies. The Company has included Segment EBITDA and
Adjusted Segment EBITDA as a supplemental disclosure because its
management believes that 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 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 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.
About Oil StatesOil States International, Inc.
is a global oilfield products and services company serving the
drilling, completions, subsea, production and infrastructure
sectors of the oil and gas industry. The Company’s manufactured
products include highly engineered capital equipment as well as
products consumed in the drilling, well construction and production
of oil and gas. The Company is also a leading provider of
completion services to the industry. 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 StatementsThe foregoing contains
forward-looking statements within the meaning 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 therein are
based on then 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 other things, risks associated with the general
nature of the energy service industry and other factors discussed
in the "Business" and "Risk Factors" sections of the Form 10-K for
the year ended December 31, 2016 filed by Oil States with the
Securities and Exchange Commission on February 17, 2017.
Company Contact:
Lloyd A. HajdikOil States International, Inc.Executive Vice
President, Chief Financial Officer and Treasurer 713-652-0582
Patricia GilOil States International,
Inc.Director, Investor Relations713-470-4860
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