Third Quarter Highlights:
Oil States International, Inc. (NYSE:OIS) reported a net loss for
the third quarter 2017 of $15.0 million, or $0.30 per diluted
share, which included pre-tax charges of $0.4 million
($0.3 million after-tax, or $0.01 per diluted share) for
severance and other downsizing charges and $1.0 million of
additional tax expense ($0.02 per diluted share) due to the
decision to carryback 2016 net operating losses against taxable
income reported in 2014. These results compare to a reported net
loss for the third quarter of 2016 of $10.8 million, or $0.22
per diluted share, which included pre-tax charges of
$2.0 million ($1.3 million after-tax, or $0.03 per
diluted share) of severance and other downsizing charges.
During the third quarter of 2017, the Company
generated revenues of $164.0 million and Adjusted Consolidated
EBITDA (Note B) of $9.2 million (excluding $0.4 million
of severance and other downsizing charges). These results compare
to revenues of $179.0 million and Adjusted Consolidated EBITDA
of $16.2 million reported in the third quarter of 2016
(excluding $2.0 million of severance and other downsizing
charges).
Oil States’ President and Chief Executive
Officer, Cindy B. Taylor, stated, “Our third quarter results were
adversely affected by Hurricane Harvey which caused widespread
damage and logistical challenges in Houston and the surrounding
region where we operate five manufacturing facilities and employ
about 500 individuals. We were impacted by lower revenues and
under-absorption of manufacturing facility costs primarily in the
offshore/manufactured products segment but we also suffered some
field-level downtime due to employee dislocations resulting from
the storm. One of our 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.
"Despite transitory impacts from Hurricane
Harvey, our U.S. land completion services revenues increased 6%
sequentially, in-line with growth in the third quarter average U.S.
rig count. Historically low levels of deepwater spending continued
to impact our offshore/manufactured products segment with limited
industry award activity during the third quarter. However, we were
able to maintain a quarterly book-to-bill ratio of 0.99x. ”
For the first nine months of 2017, the Company
reported revenues of $486.9 million and Adjusted Consolidated
EBITDA of $25.0 million (excluding $2.0 million of
severance and other downsizing charges). The net loss for the first
nine months of 2017 totaled $47.0 million and included
$2.0 million ($1.5 million after-tax, or $0.03 per
diluted share) of severance and other downsizing charges and
$1.0 million of additional tax expense ($0.02 per diluted
share) due to the decision to carryback 2016 net operating losses
against taxable income reported in 2014. For the first nine months
of 2016, the Company reported revenues of $524.5 million and
Adjusted Consolidated EBITDA of $41.9 million (excluding
$4.6 million of severance and other downsizing charges). The
net loss for the first nine months of 2016 totaled
$35.8 million and included $4.6 million
($2.9 million after-tax, or $0.06 per diluted share) of
severance and other downsizing charges.
BUSINESS SEGMENT RESULTS(See Segment Data
Tables)
Well Site ServicesWell site services generated
revenues of $77.2 million and Segment EBITDA of
$7.1 million in the third quarter of 2017 compared to revenues
and a Segment EBITDA loss of $46.4 million and
$3.1 million, respectively, in the third quarter of
2016. Well site services revenues and Segment EBITDA
increased 67% and 329%, respectively, due to a 31% year-over-year
increase in the number of completion services job tickets coupled
with a 20% year-over-year increase in revenue per completion
services job as a result of increased activity and a more favorable
job mix. Adjusted Segment EBITDA margins (Note A) averaged 9% and
(5)% after excluding severance and other downsizing charges in the
third quarters of 2017 and 2016, respectively. Improved utilization
in the land drilling business, which averaged 34% in the third
quarter of 2017 compared to only 15% in the third quarter of 2016,
also positively impacted the segment’s results.
Offshore/Manufactured
ProductsOffshore/manufactured products generated revenues and
Segment EBITDA of $86.9 million and $13.8 million,
respectively, in the third quarter of 2017 compared to revenues of
$132.7 million and Segment EBITDA of $29.5 million in the
third quarter of 2016. Revenues and Segment EBITDA decreased 35%
and 53% year-over-year, respectively, due to lower contributions
across most of the segment’s product and service lines,
particularly those tied to major deepwater project sanctions. Lower
major project revenues were partially offset by a 59% improvement
in sales of our shorter-cycle products (elastomer and valve
products), which continued to benefit from expanded U.S. land-based
activity. Segment EBITDA margin was 16% in the third quarter of
2017 compared to a margin of 22% realized in the third quarter of
2016. Third quarter 2016 margins benefited from the larger number
of major projects in process or nearing completion during the
period. Backlog totaled $198 million at September 30,
2017 compared to $202 million at June 30, 2017 and $199 million
reported at December 31, 2016.
Income TaxesThe Company recognized an effective
tax rate benefit of 21.1% in the third quarter of 2017 compared to
an effective tax rate benefit of 35.8% in the third quarter of
2016. The lower effective tax rate benefit in the third quarter of
2017 was primarily attributable to a shift in the mix between
domestic pre-tax losses and foreign pre-tax income compared to the
prior-year period and additional valuation allowances provided
against deferred tax assets recorded in certain domestic and
foreign jurisdictions. Further, the Company recorded
$1.0 million of additional tax expense due to the decision to
carryback 2016 net operating losses against taxable income reported
in 2014, which will result in the loss of certain previously
claimed deductions.
Financial ConditionAs of September 30, 2017,
$15.6 million was outstanding under the Company’s revolving
credit facility, while cash on hand totaled $65.9 million.
Total availability under the facility as of September 30, 2017 was
$146.5 million (net of standby letters of credit totaling
$21.6 million), which is less than the full amount of the
facility due to limitations imposed by the maintenance covenant of
3.25 times trailing twelve months Consolidated EBITDA, adjusted for
certain non-cash items.
Conference Call InformationThe call is scheduled
for Friday, October 27, 2017 at 10:30 am ET, and 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 (800) 446-1671 in the United States or by dialing
+1 847 413 3362 internationally and using the passcode 45846163. A
replay of the conference call will be available one and a half
hours after the completion of the call by dialing (888) 843-7419 in
the United States or by dialing +1 630 652 3042 internationally and
entering the passcode 45846163.
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 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 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.
| OIL STATES INTERNATIONAL, INC. AND
SUBSIDIARIESUNAUDITED CONSOLIDATED STATEMENTS OF
OPERATIONS(In Thousands, Except Per Share Amounts) |
| |
| |
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
| |
2017 |
|
2016 |
|
2017 |
|
2016 |
| Revenues: |
|
|
|
|
|
|
|
|
Products |
$ |
67,339 |
|
|
$ |
109,312 |
|
|
$ |
223,269 |
|
|
$ |
323,566 |
|
|
Service |
96,709 |
|
|
69,694 |
|
|
263,648 |
|
|
200,944 |
|
| |
164,048 |
|
|
179,006 |
|
|
486,917 |
|
|
524,510 |
|
| |
|
|
|
|
|
|
|
| Costs and
expenses: |
|
|
|
|
|
|
|
| Product
costs |
50,593 |
|
|
75,345 |
|
|
160,252 |
|
|
227,855 |
|
| Service
costs |
78,596 |
|
|
60,421 |
|
|
219,697 |
|
|
173,125 |
|
| Selling,
general and administrative expense |
26,843 |
|
|
30,388 |
|
|
84,055 |
|
|
90,854 |
|
|
Depreciation and amortization expense |
26,788 |
|
|
29,848 |
|
|
82,552 |
|
|
89,666 |
|
| Other
operating (income) expense, net |
(589 |
) |
|
(1,370 |
) |
|
374 |
|
|
(4,098 |
) |
| |
182,231 |
|
|
194,632 |
|
|
546,930 |
|
|
577,402 |
|
| Operating loss |
(18,183 |
) |
|
(15,626 |
) |
|
(60,013 |
) |
|
(52,892 |
) |
| |
|
|
|
|
|
|
|
| Interest expense |
(1,147 |
) |
|
(1,364 |
) |
|
(3,370 |
) |
|
(4,124 |
) |
| Interest income |
73 |
|
|
119 |
|
|
243 |
|
|
321 |
|
| Other income |
207 |
|
|
32 |
|
|
477 |
|
|
462 |
|
| Loss from continuing
operations before income taxes |
(19,050 |
) |
|
(16,839 |
) |
|
(62,663 |
) |
|
(56,233 |
) |
| Income tax benefit |
4,019 |
|
|
6,021 |
|
|
15,708 |
|
|
20,474 |
|
| Net loss from
continuing operations |
(15,031 |
) |
|
(10,818 |
) |
|
(46,955 |
) |
|
(35,759 |
) |
| Net loss from
discontinued operations, net of tax |
— |
|
|
— |
|
|
— |
|
|
(4 |
) |
| Net loss attributable
to Oil States |
$ |
(15,031 |
) |
|
$ |
(10,818 |
) |
|
$ |
(46,955 |
) |
|
$ |
(35,763 |
) |
| |
|
|
|
|
|
|
|
| Basic net loss per
share attributable to Oil States from: |
|
|
|
|
|
|
|
|
Continuing operations |
$ |
(0.30 |
) |
|
$ |
(0.22 |
) |
|
$ |
(0.94 |
) |
|
$ |
(0.71 |
) |
|
Discontinued operations |
— |
|
|
— |
|
|
— |
|
|
— |
|
| Net
loss |
$ |
(0.30 |
) |
|
$ |
(0.22 |
) |
|
$ |
(0.94 |
) |
|
$ |
(0.71 |
) |
| |
|
|
|
|
|
|
|
| Diluted net loss per
share attributable to Oil States from: |
|
|
|
|
|
|
|
|
Continuing operations |
$ |
(0.30 |
) |
|
$ |
(0.22 |
) |
|
$ |
(0.94 |
) |
|
$ |
(0.71 |
) |
|
Discontinued operations |
— |
|
|
— |
|
|
— |
|
|
— |
|
| Net
loss |
$ |
(0.30 |
) |
|
$ |
(0.22 |
) |
|
$ |
(0.94 |
) |
|
$ |
(0.71 |
) |
| |
|
|
|
|
|
|
|
| Weighted average number
of common shares outstanding: |
|
|
|
|
|
|
|
|
Basic |
49,978 |
|
|
50,222 |
|
|
50,190 |
|
|
50,158 |
|
|
Diluted |
49,978 |
|
|
50,222 |
|
|
50,190 |
|
|
50,158 |
|
| OIL STATES INTERNATIONAL, INC. AND
SUBSIDIARIESCONSOLIDATED BALANCE
SHEETS(In Thousands) |
| |
| |
September 30, 2017 |
|
December 31, 2016 |
| |
(Unaudited) |
|
|
|
ASSETS |
|
|
|
| Current assets: |
|
|
|
| Cash and
cash equivalents |
$ |
65,864 |
|
|
$ |
68,800 |
|
| Accounts
receivable, net |
210,218 |
|
|
234,513 |
|
|
Inventories, net |
173,447 |
|
|
175,490 |
|
| Prepaid
expenses and other current assets |
26,464 |
|
|
11,174 |
|
| Total
current assets |
475,993 |
|
|
489,977 |
|
| |
|
|
|
| Property, plant, and
equipment, net |
508,743 |
|
|
553,402 |
|
| Goodwill, net |
268,917 |
|
|
263,369 |
|
| Other intangible
assets, net |
50,105 |
|
|
52,746 |
|
| Other noncurrent
assets |
25,597 |
|
|
24,404 |
|
| Total
assets |
$ |
1,329,355 |
|
|
$ |
1,383,898 |
|
| |
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
| Current
liabilities: |
|
|
|
| Current
portion of long-term debt and capitalized leases |
$ |
492 |
|
|
$ |
538 |
|
| Accounts
payable |
44,768 |
|
|
34,207 |
|
| Accrued
liabilities |
47,632 |
|
|
45,333 |
|
| Income
taxes payable |
1,031 |
|
|
5,839 |
|
| Deferred
revenue |
22,588 |
|
|
21,315 |
|
| Total
current liabilities |
116,511 |
|
|
107,232 |
|
| |
|
|
|
| Long-term debt and
capitalized leases (1) |
19,061 |
|
|
45,388 |
|
| Deferred income
taxes |
4,592 |
|
|
5,036 |
|
| Other noncurrent
liabilities |
22,914 |
|
|
21,935 |
|
| Total
liabilities |
163,078 |
|
|
179,591 |
|
| |
|
|
|
| Stockholders’
equity: |
|
|
|
| Common
stock |
627 |
|
|
623 |
|
|
Additional paid-in capital |
748,581 |
|
|
731,562 |
|
| Retained
earnings |
1,086,518 |
|
|
1,133,473 |
|
|
Accumulated other comprehensive loss |
(56,810 |
) |
|
(70,300 |
) |
| Treasury
stock |
(612,639 |
) |
|
(591,051 |
) |
| Total
stockholders’ equity |
1,166,277 |
|
|
1,204,307 |
|
| Total
liabilities and stockholders’ equity |
$ |
1,329,355 |
|
|
$ |
1,383,898 |
|
(1) As of September 30, 2017, the Company had
$146.5 million available under its revolving credit facility
(net of standby letters of credit totaling $21.6 million),
which is less than the full amount of the facility due to the
maintenance covenant of 3.25 times trailing twelve months
Consolidated EBITDA, adjusted for certain non-cash items.
| OIL STATES INTERNATIONAL, INC. AND
SUBSIDIARIESUNAUDITED CONSOLIDATED STATEMENTS OF
CASH FLOWS(In Thousands) |
| |
| |
Nine Months Ended September 30, |
| |
2017 |
|
2016 |
| Cash flows from
operating activities: |
|
|
|
| Net
loss |
$ |
(46,955 |
) |
|
$ |
(35,763 |
) |
|
Adjustments to reconcile net loss to net cash provided by operating
activities: |
|
|
|
| Loss from
discontinued operations |
— |
|
|
4 |
|
|
Depreciation and amortization |
82,552 |
|
|
89,666 |
|
|
Stock-based compensation expense |
17,023 |
|
|
15,938 |
|
| Deferred
income tax benefit |
(2,224 |
) |
|
(28,264 |
) |
| Provision
for bad debt |
257 |
|
|
759 |
|
| Gain on
disposals of assets |
(526 |
) |
|
(445 |
) |
|
Amortization of deferred financing costs |
608 |
|
|
585 |
|
| Other,
net |
62 |
|
|
689 |
|
| Changes
in operating assets and liabilities, net of effect from acquired
businesses: |
|
|
|
| Accounts
receivable |
26,909 |
|
|
68,193 |
|
|
Inventories |
5,912 |
|
|
15,600 |
|
| Accounts
payable and accrued liabilities |
11,811 |
|
|
(18,588 |
) |
| Income
taxes payable |
(4,789 |
) |
|
(2,987 |
) |
| Other
operating assets and liabilities, net |
(14,323 |
) |
|
2,392 |
|
| Net cash
flows provided by continuing operating activities |
76,317 |
|
|
107,779 |
|
| Net cash
flows used in discontinued operating activities |
— |
|
|
3 |
|
| Net cash
flows provided by operating activities |
76,317 |
|
|
107,782 |
|
| |
|
|
|
| Cash flows from
investing activities: |
|
|
|
| Capital
expenditures |
(20,331 |
) |
|
(23,893 |
) |
|
Acquisitions of businesses |
(12,859 |
) |
|
— |
|
| Proceeds
from disposition of property, plant and equipment |
1,125 |
|
|
1,026 |
|
| Other,
net |
(631 |
) |
|
(1,534 |
) |
| Net cash
flows used in investing activities |
(32,696 |
) |
|
(24,401 |
) |
| |
|
|
|
| Cash flows from
financing activities: |
|
|
|
| Revolving
credit facility borrowings (repayments), net |
(26,578 |
) |
|
(59,731 |
) |
| Debt and
capital lease repayments |
(403 |
) |
|
(398 |
) |
| Purchase
of treasury stock |
(16,283 |
) |
|
— |
|
| Issuance
of common stock from stock-based payment arrangements |
— |
|
|
367 |
|
| Shares
added to treasury stock as a result of net share settlements due to
vesting of restricted stock |
(5,305 |
) |
|
(3,950 |
) |
| Net cash
flows used in financing activities |
(48,569 |
) |
|
(63,712 |
) |
| |
|
|
|
| Effect of exchange rate
changes on cash and cash equivalents |
2,012 |
|
|
(1,852 |
) |
| Net change in cash and
cash equivalents |
(2,936 |
) |
|
17,817 |
|
| Cash and cash
equivalents, beginning of period |
68,800 |
|
|
35,973 |
|
| |
|
|
|
| Cash and cash
equivalents, end of period |
$ |
65,864 |
|
|
$ |
53,790 |
|
| OIL STATES INTERNATIONAL, INC. AND
SUBSIDIARIESSEGMENT DATA(In
Thousands)(unaudited) |
|
|
| |
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
| |
2017 |
|
2016 |
|
2017 |
|
2016 |
|
Revenues: |
|
|
|
|
|
|
|
| Well Site
Services - |
|
|
|
|
|
|
|
|
Completion Services |
$ |
61,015 |
|
|
$ |
38,975 |
|
|
$ |
167,577 |
|
|
$ |
116,748 |
|
| Drilling
Services |
16,162 |
|
|
7,375 |
|
|
39,120 |
|
|
14,016 |
|
| Total
Well Site Services |
77,177 |
|
|
46,350 |
|
|
206,697 |
|
|
130,764 |
|
|
Offshore/Manufactured Products - |
|
|
|
|
|
|
|
|
Project-driven products |
22,698 |
|
|
76,541 |
|
|
89,615 |
|
|
234,440 |
|
|
Short-cycle products |
37,781 |
|
|
23,766 |
|
|
110,872 |
|
|
63,033 |
|
| Other
products and services |
26,392 |
|
|
32,349 |
|
|
79,733 |
|
|
96,273 |
|
| Total
Offshore/Manufactured Products |
86,871 |
|
|
132,656 |
|
|
280,220 |
|
|
393,746 |
|
| Total revenues |
$ |
164,048 |
|
|
$ |
179,006 |
|
|
$ |
486,917 |
|
|
$ |
524,510 |
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
| Operating
income (loss): |
|
|
|
|
|
|
|
| Well Site
Services - |
|
|
|
|
|
|
|
|
Completion Services (1,2) |
$ |
(9,933 |
) |
|
$ |
(20,450 |
) |
|
$ |
(38,960 |
) |
|
$ |
(66,251 |
) |
| Drilling
Services (2) |
(3,235 |
) |
|
(5,641 |
) |
|
(11,239 |
) |
|
(19,697 |
) |
| Total
Well Site Services |
(13,168 |
) |
|
(26,091 |
) |
|
(50,199 |
) |
|
(85,948 |
) |
|
Offshore/Manufactured Products (1,2) |
7,334 |
|
|
22,867 |
|
|
27,460 |
|
|
67,854 |
|
|
Corporate |
(12,349 |
) |
|
(12,402 |
) |
|
(37,274 |
) |
|
(34,798 |
) |
| Total operating
loss |
$ |
(18,183 |
) |
|
$ |
(15,626 |
) |
|
$ |
(60,013 |
) |
|
$ |
(52,892 |
) |
| OIL STATES INTERNATIONAL, INC. AND
SUBSIDIARIESRECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL INFORMATION – SEGMENT EBITDA AND ADJUSTED SEGMENT EBITDA
(A)(In Thousands)(unaudited) |
|
|
| |
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
| |
2017 |
|
2016 |
|
2017 |
|
2016 |
| Well Site
Services: |
|
|
|
|
|
|
|
|
Completion Services: |
|
|
|
|
|
|
|
| Operating
loss |
$ |
(9,933 |
) |
|
$ |
(20,450 |
) |
|
$ |
(38,960 |
) |
|
$ |
(66,251 |
) |
|
Depreciation and amortization expense |
15,679 |
|
|
17,230 |
|
|
48,400 |
|
|
52,789 |
|
| Other
income (expense) |
133 |
|
|
107 |
|
|
412 |
|
|
618 |
|
|
EBITDA |
5,879 |
|
|
(3,113 |
) |
|
9,852 |
|
|
(12,844 |
) |
| Severance
and other downsizing charges |
175 |
|
|
683 |
|
|
1,077 |
|
|
1,833 |
|
| Adjusted
EBITDA |
$ |
6,054 |
|
|
$ |
(2,430 |
) |
|
$ |
10,929 |
|
|
$ |
(11,011 |
) |
| |
|
|
|
|
|
|
|
|
Drilling Services: |
|
|
|
|
|
|
|
| Operating
loss |
$ |
(3,235 |
) |
|
$ |
(5,641 |
) |
|
$ |
(11,239 |
) |
|
$ |
(19,697 |
) |
|
Depreciation and amortization expense |
4,454 |
|
|
5,629 |
|
|
14,283 |
|
|
18,053 |
|
| Other
income (expense) |
44 |
|
|
— |
|
|
48 |
|
|
1 |
|
|
EBITDA |
1,263 |
|
|
(12 |
) |
|
3,092 |
|
|
(1,643 |
) |
| Severance
and other downsizing charges |
— |
|
|
160 |
|
|
— |
|
|
160 |
|
| Adjusted
EBITDA |
$ |
1,263 |
|
|
$ |
148 |
|
|
$ |
3,092 |
|
|
$ |
(1,483 |
) |
| |
|
|
|
|
|
|
|
| Total Well Site
Services: |
|
|
|
|
|
|
|
| Operating
loss |
$ |
(13,168 |
) |
|
$ |
(26,091 |
) |
|
$ |
(50,199 |
) |
|
$ |
(85,948 |
) |
|
Depreciation and amortization expense |
20,133 |
|
|
22,859 |
|
|
62,683 |
|
|
70,842 |
|
| Other
income (expense) |
177 |
|
|
107 |
|
|
460 |
|
|
619 |
|
| Segment EBITDA |
7,142 |
|
|
(3,125 |
) |
|
12,944 |
|
|
(14,487 |
) |
| Severance
and other downsizing charges |
175 |
|
|
843 |
|
|
1,077 |
|
|
1,993 |
|
| Adjusted Segment
EBITDA |
$ |
7,317 |
|
|
$ |
(2,282 |
) |
|
$ |
14,021 |
|
|
$ |
(12,494 |
) |
| |
|
|
|
|
|
|
|
|
Offshore/Manufactured Products: |
|
|
|
|
|
|
|
| Operating
income |
$ |
7,334 |
|
|
$ |
22,867 |
|
|
$ |
27,460 |
|
|
$ |
67,854 |
|
|
Depreciation and amortization expense |
6,404 |
|
|
6,712 |
|
|
19,091 |
|
|
17,977 |
|
| Other
income (expense) |
30 |
|
|
(75 |
) |
|
17 |
|
|
(157 |
) |
| Segment EBITDA |
13,768 |
|
|
29,504 |
|
|
46,568 |
|
|
85,674 |
|
| Severance
and other downsizing charges |
253 |
|
|
1,104 |
|
|
946 |
|
|
2,635 |
|
| Adjusted Segment
EBITDA |
$ |
14,021 |
|
|
$ |
30,608 |
|
|
$ |
47,514 |
|
|
$ |
88,309 |
|
| |
|
|
|
|
|
|
|
|
Corporate: |
|
|
|
|
|
|
|
| Operating
loss |
$ |
(12,349 |
) |
|
$ |
(12,402 |
) |
|
$ |
(37,274 |
) |
|
$ |
(34,798 |
) |
|
Depreciation and amortization expense |
251 |
|
|
277 |
|
|
778 |
|
|
847 |
|
| Other
income (expense) |
— |
|
|
— |
|
|
— |
|
|
— |
|
| EBITDA |
(12,098 |
) |
|
(12,125 |
) |
|
(36,496 |
) |
|
(33,951 |
) |
| Severance
and other downsizing charges |
— |
|
|
5 |
|
|
— |
|
|
5 |
|
| Adjusted EBITDA |
$ |
(12,098 |
) |
|
$ |
(12,120 |
) |
|
$ |
(36,496 |
) |
|
$ |
(33,946 |
) |
| OIL STATES INTERNATIONAL, INC. AND
SUBSIDIARIESRECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL INFORMATION(In Thousands)(unaudited) |
|
|
| |
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
| |
2017 |
|
2016 |
|
2017 |
|
2016 |
| |
|
|
|
|
|
|
|
| Net loss from
continuing operations |
$ |
(15,031 |
) |
|
$ |
(10,818 |
) |
|
$ |
(46,955 |
) |
|
$ |
(35,759 |
) |
| Income tax benefit |
(4,019 |
) |
|
(6,021 |
) |
|
(15,708 |
) |
|
(20,474 |
) |
| Depreciation and
amortization expense |
26,788 |
|
|
29,848 |
|
|
82,552 |
|
|
89,666 |
|
| Interest income |
(73 |
) |
|
(119 |
) |
|
(243 |
) |
|
(321 |
) |
| Interest expense |
1,147 |
|
|
1,364 |
|
|
3,370 |
|
|
4,124 |
|
| Consolidated EBITDA
(B) |
8,812 |
|
|
14,254 |
|
|
23,016 |
|
|
37,236 |
|
| |
|
|
|
|
|
|
|
| Adjustments to
Consolidated EBITDA (1,2): |
|
|
|
|
|
|
|
| Severance and other
downsizing charges |
428 |
|
|
1,952 |
|
|
2,023 |
|
|
4,633 |
|
| Adjusted Consolidated
EBITDA (B) |
$ |
9,240 |
|
|
$ |
16,206 |
|
|
$ |
25,039 |
|
|
$ |
41,869 |
|
(1) Operating income (loss) and Consolidated
EBITDA for the three months ended September 30, 2017 included
severance and other downsizing charges of $0.2 million related
to the completion services business and $0.3 million related
to the offshore/manufactured products segment. Operating income
(loss) and Consolidated EBITDA for the nine months ended September
30, 2017 included severance and other downsizing charges of
$1.1 million related to the completion services business and
$0.9 million related to the offshore/manufactured products
segment.
(2) Operating income (loss) and Consolidated
EBITDA for the three months ended September 30, 2016 included
severance and other downsizing charges of $0.7 million related
to the completion services business, $0.2 million related to
the drilling services business and $1.1 million related to the
offshore/manufactured products segment. Operating income (loss) and
Consolidated EBITDA for the nine months ended September 30, 2016
included severance and other downsizing charges of
$1.8 million related to the completion services business,
$0.2 million related to the drilling services business and
$2.6 million related to the offshore/manufactured products
segment.
(A) The terms EBITDA, Adjusted EBITDA, Segment
EBITDA and Adjusted Segment EBITDA consist of operating income
(loss) plus depreciation and amortization expense, and 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 a supplemental
disclosure 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.
(B) The terms Consolidated EBITDA and Adjusted
Consolidated EBITDA consist of net loss from continuing operations
plus net interest expense, taxes, depreciation and amortization
expense, and 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 from continuing operations or cash flow measures prepared
in accordance with generally accepted accounting principles or as a
measure 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 a supplemental disclosure 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 a
reconciliation of Consolidated EBITDA and Adjusted Consolidated
EBITDA to net loss from continuing operations, which is the most
directly comparable measure of financial performance calculated
under generally accepted accounting principles.
| OIL STATES INTERNATIONAL, INC. AND
SUBSIDIARIESADDITIONAL QUARTERLY SEGMENT AND
OPERATING DATA(unaudited) |
| |
| |
Three Months Ended September 30, |
| |
2017 |
|
2016 |
| |
|
|
|
| Supplemental operating
data: |
|
|
|
| Offshore/Manufactured
Products backlog ($ in millions) |
$ |
198.1 |
|
|
$ |
203.0 |
|
| |
|
|
|
| Completion Services job
tickets |
4,970 |
|
|
3,802 |
|
| Average revenue per
ticket ($ in thousands) |
$ |
12.3 |
|
|
$ |
10.3 |
|
| |
|
|
|
| Land drilling operating
statistics: |
|
|
|
| Average rigs
available |
34 |
|
|
34 |
|
| Utilization |
33.6 |
% |
|
15.3 |
% |
| Implied day rate ($ in
thousands per day) |
$ |
15.4 |
|
|
$ |
15.4 |
|
| Implied daily cash
margin ($ in thousands per day) |
$ |
1.6 |
|
|
$ |
0.8 |
|
| |
|
|
|
|
|
|
|
Company Contact:
Lloyd A. HajdikOil States International, Inc.Executive Vice
President, Chief Financial Officer and Treasurer713-652-0582
Patricia GilOil States International,
Inc.Director, Investor Relations713-470-4860
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