Oil States International, Inc. (NYSE: OIS) reported a net loss for
the third quarter of 2018 of $4.0 million, or $0.07 per
diluted share, which included charges related to:
- Legal fees incurred for patent defense of $3.5 million
($2.8 million after-tax, or $0.05 per diluted share)
- A reserve for prior years' Fair Labor Standards Act ("FLSA")
claim settlements of $2.6 million ($2.1 million
after-tax, or $0.03 per diluted share)
These results compare to a reported net loss for
the third quarter of 2017 of $15.0 million, or $0.30 per
diluted share, which included charges of $0.4 million
($0.3 million after-tax, or $0.01 per diluted share) of
severance and downsizing charges and $1.0 million of
additional tax expense ($0.02 per diluted share) due to the
decision to carry back 2016 net operating losses against taxable
income reported in 2014.
During the third quarter of 2018, the Company
generated revenues of $274.6 million and Consolidated EBITDA
(Note A) of $27.6 million. These results compare to revenues
of $164.0 million and Adjusted Consolidated EBITDA (Note A) of
$9.2 million reported in the third quarter of 2017 (excluding
$0.4 million of severance and downsizing charges).
For the first nine months of 2018, the Company
reported revenues of $814.0 million and Adjusted Consolidated
EBITDA of $100.1 million (excluding $2.6 million of
transaction-related charges and $0.8 million of severance and
downsizing charges).
The net loss for the first nine months of 2018
totaled $4.8 million which included charges related to:
- Transaction-related charges of $2.6 million
($2.1 million after-tax, or $0.03 per diluted share)
- Severance charges of $0.8 million ($0.6 million
after-tax, or $0.01 per diluted share)
- Legal fees incurred for patent defense of $5.9 million
($4.7 million after-tax, or $0.08 per diluted share)
- Reserves for prior years' FLSA claim settlements of
$3.3 million ($2.6 million after-tax, or $0.04 per
diluted share)
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 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 downsizing charges.
Oil States’ President and Chief Executive
Officer, Cindy B. Taylor, commented, "Our third quarter results
were negatively impacted by a number of items, including legal fees
incurred for patent defense in the Downhole Technologies segment
and prior years’ FLSA claim settlements in our Well Site Services
segment. In addition, our results were impacted by sequentially
lower revenues and under-absorption of manufacturing facility costs
primarily in our Offshore/Manufactured Products segment due to
revenue slippage and the delay of certain project awards, while our
Well Site Services segment incurred higher than expected repair and
maintenance, and equipment rental expenses. Despite these items, on
a year-over-year basis, our third quarter revenues were up 67% and
our quarterly EBITDA was up 213%. These year-over-year improvements
were due to contributions from our two strategic acquisitions that
we completed in the first quarter of this year, coupled with
improved land completions activity in the key shale play regions in
the U.S."
BUSINESS SEGMENT RESULTS(See Segment Data tables
for year-over-year comparisons)
Well Site ServicesWell Site Services generated
revenues of $128.6 million, Segment EBITDA (Note B) of
$15.5 million and a Segment EBITDA margin of 12% in the third
quarter of 2018. This compared to revenues of $77.2 million,
Segment EBITDA of $7.1 million and a Segment EBITDA
margin of 9% in the third quarter of 2017. The 67% revenue increase
was due to a 71% year-over-year increase in the number of
Completion Services jobs performed, coupled with a 7%
year-over-year increase in revenue per Completion Services job.
Improved results were driven by significantly increased
completion-related activity levels in the United States, and a full
quarters' revenue contribution generated by Falcon Flowback
Services, LLC (“Falcon”), which was acquired on February 28,
2018. Segment results for the current quarter included
$2.6 million of prior years' FLSA claim settlements.
Downhole Technologies (acquisition of
GEODynamics, Inc. closed on January 12, 2018)In the third quarter
of 2018, Downhole Technologies generated revenues of
$56.6 million, Segment EBITDA of $11.1 million and a
Segment EBITDA margin of 20%. The segment results were negatively
impacted by $3.5 million of patent defense costs incurred in
the third quarter of 2018. No results for GEODynamics were included
in the third quarter of 2017 given our acquisition of the business
in January 2018.
Offshore/Manufactured
ProductsOffshore/Manufactured Products generated revenues and
Segment EBITDA of $89.4 million and $12.6 million,
respectively, in the third quarter of 2018 compared to revenues of
$86.9 million and Segment EBITDA of $13.8 million in the
third quarter of 2017. Revenues increased 3% while Segment EBITDA
decreased 9% year-over-year. Other product and service revenues
increased 25% year-over-year, offset partially by lower short-cycle
product sales (elastomer and valve products), which decreased 10%
year-over-year due to lower customer demand, likely due to stocking
cycles. Segment EBITDA margin in the third quarter of 2018 was 14%
compared to 16% in the third quarter of 2017.
Backlog increased 6% sequentially to total
$175 million at September 30, 2018 compared to
$165 million at June 30, 2018 and $198 million at
September 30, 2017. The third quarter book-to-bill ratio was
1.1x.
Income TaxesThe Company recognized an effective
tax rate benefit of 48.8% in the third quarter of 2018 which
compared to an effective tax rate benefit of 21.1% in the
third quarter of 2017. The higher effective tax rate benefit in the
third quarter of 2018 was primarily attributable to a
$5.8 million discrete tax benefit related to recent U.S. tax
reform guidance allowing the carry back of U.S. net operating
losses incurred in 2017 against taxable income reported in
2015.
Financial ConditionAs of September 30, 2018,
$160.6 million was outstanding under the Company’s revolving
credit facility along with an additional $23.0 million of
outstanding letters of credit, while cash totaled
$36.3 million. The Company had access to $149.8 million
of revolving credit facility availability as of September 30,
2018.
Conference Call InformationThe call is scheduled
for Monday, October 29, 2018 at 9:00 am CT, 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 (888) 771-4371 in the United States or by dialing
+1 847 585 4405 internationally and using the passcode 47745272. 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 47745272.
About Oil StatesOil States International, Inc.
is a global oilfield products and services company serving the
drilling, completion, 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. Through its recent acquisition of GEODynamics, Inc., the
Company is also a leading researcher, developer and manufacturer of
engineered solutions to connect the wellbore with the formation in
oil and gas well completions. 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 other things, risks and uncertainties relating to
Oil States' ability to retain GEODynamics' and Falcon's customers
and employees, the ability to successfully integrate GEODynamics'
and Falcon's operations, product lines, technology and employees
into Oil States' operations, and the ability to achieve the
expected synergies as well as accretion in earnings; 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, 2017, Periodic Reports on Form 8-K and Quarterly
Reports on Form 10-Q. 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
UNAUDITED CONSOLIDATED STATEMENTS OF
OPERATIONS(In Thousands, Except Per Share Amounts)
|
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
Revenues: |
|
|
|
|
|
|
|
| Products |
$ |
120,271 |
|
|
$ |
67,339 |
|
|
$ |
385,279 |
|
|
$ |
223,269 |
|
| Services |
154,323 |
|
|
96,709 |
|
|
428,736 |
|
|
263,648 |
|
|
|
274,594 |
|
|
164,048 |
|
|
814,015 |
|
|
486,917 |
|
|
|
|
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
|
|
|
| Product costs |
87,822 |
|
|
50,593 |
|
|
276,122 |
|
|
160,252 |
|
| Service costs |
127,836 |
|
|
78,596 |
|
|
342,829 |
|
|
219,697 |
|
| Cost of revenues (exclusive of depreciation and
amortization expense presented below) |
215,658 |
|
|
129,189 |
|
|
618,951 |
|
|
379,949 |
|
| Selling, general and administrative expense |
32,285 |
|
|
26,843 |
|
|
102,399 |
|
|
84,055 |
|
| Depreciation and amortization expense |
30,586 |
|
|
26,788 |
|
|
90,698 |
|
|
82,552 |
|
| Other operating (income) expense, net |
(213 |
) |
|
(589 |
) |
|
(2,097 |
) |
|
374 |
|
|
|
278,316 |
|
|
182,231 |
|
|
809,951 |
|
|
546,930 |
|
|
Operating income (loss) |
(3,722 |
) |
|
(18,183 |
) |
|
4,064 |
|
|
(60,013 |
) |
|
|
|
|
|
|
|
|
|
|
Interest expense |
(4,913 |
) |
|
(1,147 |
) |
|
(14,359 |
) |
|
(3,370 |
) |
|
Interest income |
70 |
|
|
73 |
|
|
272 |
|
|
243 |
|
|
Other income |
709 |
|
|
207 |
|
|
1,927 |
|
|
477 |
|
|
Loss before income taxes |
(7,856 |
) |
|
(19,050 |
) |
|
(8,096 |
) |
|
(62,663 |
) |
|
Income tax benefit |
3,837 |
|
|
4,019 |
|
|
3,327 |
|
|
15,708 |
|
|
Net loss |
$ |
(4,019 |
) |
|
$ |
(15,031 |
) |
|
$ |
(4,769 |
) |
|
$ |
(46,955 |
) |
|
|
|
|
|
|
|
|
|
|
Net loss per share: |
|
|
|
|
|
|
|
| Basic |
$ |
(0.07 |
) |
|
$ |
(0.30 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.94 |
) |
| Diluted |
$ |
(0.07 |
) |
|
$ |
(0.30 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.94 |
) |
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding: |
|
|
|
|
|
|
|
| Basic |
59,026 |
|
|
49,978 |
|
|
58,606 |
|
|
50,190 |
|
| Diluted |
59,026 |
|
|
49,978 |
|
|
58,606 |
|
|
50,190 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
OIL STATES INTERNATIONAL, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS(In
Thousands)
|
|
September 30,
2018 |
|
December 31,
2017 |
|
|
(Unaudited) |
|
|
| ASSETS |
|
|
|
|
Current assets: |
|
|
|
| Cash and cash equivalents |
$ |
36,261 |
|
|
$ |
53,459 |
|
| Accounts receivable, net |
296,713 |
|
|
216,139 |
|
| Inventories, net |
210,783 |
|
|
168,285 |
|
| Prepaid expenses and other current assets |
21,872 |
|
|
18,054 |
|
| Total current assets |
565,629 |
|
|
455,937 |
|
|
|
|
|
|
|
Property, plant, and equipment, net |
544,653 |
|
|
498,890 |
|
|
Goodwill, net |
656,753 |
|
|
268,009 |
|
|
Other intangible assets, net |
247,876 |
|
|
50,265 |
|
|
Other noncurrent assets |
29,885 |
|
|
28,410 |
|
| Total assets |
$ |
2,044,796 |
|
|
$ |
1,301,511 |
|
|
|
|
|
|
| LIABILITIES AND STOCKHOLDERS’
EQUITY |
|
|
|
|
Current liabilities: |
|
|
|
| Current portion of long-term debt and capitalized
leases |
$ |
25,535 |
|
|
$ |
411 |
|
| Accounts payable |
78,621 |
|
|
49,089 |
|
| Accrued liabilities |
65,700 |
|
|
45,889 |
|
| Income taxes payable |
2,514 |
|
|
1,647 |
|
| Deferred revenue |
13,489 |
|
|
18,234 |
|
| Total current liabilities |
185,859 |
|
|
115,270 |
|
|
|
|
|
|
|
Long-term debt and capitalized leases |
328,876 |
|
|
4,870 |
|
|
Deferred income taxes |
54,141 |
|
|
24,718 |
|
|
Other noncurrent liabilities |
26,245 |
|
|
23,940 |
|
| Total liabilities |
595,121 |
|
|
168,798 |
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
| Common stock |
718 |
|
|
627 |
|
| Additional paid-in capital |
1,091,663 |
|
|
754,607 |
|
| Retained earnings |
1,043,854 |
|
|
1,048,623 |
|
| Accumulated other comprehensive loss |
(69,731 |
) |
|
(58,493 |
) |
| Treasury stock |
(616,829 |
) |
|
(612,651 |
) |
| Total stockholders’ equity |
1,449,675 |
|
|
1,132,713 |
|
| Total liabilities and stockholders’ equity |
$ |
2,044,796 |
|
|
$ |
1,301,511 |
|
| |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
OIL STATES INTERNATIONAL, INC. AND
SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH
FLOWS(In Thousands)
|
|
Nine Months Ended September
30, |
|
|
2018 |
|
2017 |
|
Cash flows from operating activities: |
|
|
|
| Net loss |
$ |
(4,769 |
) |
|
$ |
(46,955 |
) |
| Adjustments to reconcile net loss to net cash
provided by operating activities: |
|
|
|
| Depreciation and amortization expense |
90,698 |
|
|
82,552 |
|
| Stock-based compensation expense |
16,554 |
|
|
17,023 |
|
| Amortization of debt discount and deferred financing
costs |
5,504 |
|
|
608 |
|
| Deferred income tax expense (benefit) |
1,061 |
|
|
(2,224 |
) |
| Provision for bad debt |
1,083 |
|
|
257 |
|
| Gain on disposals of assets |
(5,046 |
) |
|
(526 |
) |
| Other, net |
(92 |
) |
|
62 |
|
| Changes in operating assets and liabilities, net of
effect from acquired businesses: |
|
|
|
| Accounts receivable |
(25,454 |
) |
|
26,909 |
|
| Inventories |
(7,867 |
) |
|
5,912 |
|
| Accounts payable and accrued liabilities |
18,311 |
|
|
11,811 |
|
| Income taxes payable |
524 |
|
|
(4,789 |
) |
| Other operating assets and liabilities, net |
(10,406 |
) |
|
(14,323 |
) |
| Net cash flows provided by operating activities |
80,101 |
|
|
76,317 |
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
| Capital expenditures |
(71,286 |
) |
|
(20,331 |
) |
| Acquisitions of businesses, net of cash
acquired |
(379,676 |
) |
|
(12,859 |
) |
| Proceeds from disposition of property, plant and
equipment |
1,812 |
|
|
1,125 |
|
| Proceeds from flood insurance claims |
3,589 |
|
|
— |
|
| Other, net |
(1,218 |
) |
|
(631 |
) |
| Net cash flows used in investing activities |
(446,779 |
) |
|
(32,696 |
) |
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
| Issuance of 1.50% convertible senior notes |
200,000 |
|
|
— |
|
| Revolving credit facility borrowings |
769,147 |
|
|
167,183 |
|
| Revolving credit facility repayments |
(608,565 |
) |
|
(193,761 |
) |
| Other debt and capital lease repayments, net |
(405 |
) |
|
(403 |
) |
| Payment of financing costs |
(7,368 |
) |
|
— |
|
| Purchase of treasury stock |
— |
|
|
(16,283 |
) |
| Shares added to treasury stock as a result of net
share settlements due to vesting of restricted stock |
(4,178 |
) |
|
(5,305 |
) |
| Net cash flows provided by (used in) financing
activities |
348,631 |
|
|
(48,569 |
) |
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents |
849 |
|
|
2,012 |
|
|
Net change in cash and cash equivalents |
(17,198 |
) |
|
(2,936 |
) |
|
Cash and cash equivalents, beginning of period |
53,459 |
|
|
68,800 |
|
|
Cash and cash equivalents, end of period |
$ |
36,261 |
|
|
$ |
65,864 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OIL STATES INTERNATIONAL, INC. AND
SUBSIDIARIES
SEGMENT DATA(In
Thousands)(unaudited)
|
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
Revenues: |
|
|
|
|
|
|
|
| Well Site Services: |
|
|
|
|
|
|
|
| Completion Services |
$ |
111,669 |
|
|
$ |
61,015 |
|
|
$ |
302,877 |
|
|
$ |
167,577 |
|
| Drilling Services |
16,920 |
|
|
16,162 |
|
|
51,235 |
|
|
39,120 |
|
| Total Well Site Services |
128,589 |
|
|
77,177 |
|
|
354,112 |
|
|
206,697 |
|
| Downhole Technologies |
56,571 |
|
|
— |
|
|
161,626 |
|
|
— |
|
| Offshore/Manufactured Products: |
|
|
|
|
|
|
|
| Project-driven products |
22,277 |
|
|
22,698 |
|
|
98,301 |
|
|
89,615 |
|
| Short-cycle products |
34,170 |
|
|
37,781 |
|
|
111,936 |
|
|
110,872 |
|
| Other products and services |
32,987 |
|
|
26,392 |
|
|
88,040 |
|
|
79,733 |
|
| Total Offshore/Manufactured Products |
89,434 |
|
|
86,871 |
|
|
298,277 |
|
|
280,220 |
|
|
Total revenues |
$ |
274,594 |
|
|
$ |
164,048 |
|
|
$ |
814,015 |
|
|
$ |
486,917 |
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss): |
|
|
|
|
|
|
|
| Well Site Services: |
|
|
|
|
|
|
|
| Completion Services(2) |
$ |
(3,271 |
) |
|
$ |
(9,933 |
) |
|
$ |
(6,538 |
) |
|
$ |
(38,960 |
) |
| Drilling Services |
(2,206 |
) |
|
(3,235 |
) |
|
(7,474 |
) |
|
(11,239 |
) |
| Total Well Site Services |
(5,477 |
) |
|
(13,168 |
) |
|
(14,012 |
) |
|
(50,199 |
) |
| Downhole Technologies(1) |
6,485 |
|
|
— |
|
|
26,139 |
|
|
— |
|
| Offshore/Manufactured Products(1,2) |
7,069 |
|
|
7,334 |
|
|
32,185 |
|
|
27,460 |
|
| Corporate(1) |
(11,799 |
) |
|
(12,349 |
) |
|
(40,248 |
) |
|
(37,274 |
) |
|
Total operating income (loss) |
$ |
(3,722 |
) |
|
$ |
(18,183 |
) |
|
$ |
4,064 |
|
|
$ |
(60,013 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 September
30, |
|
Nine Months Ended September
30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
Well Site Services: |
|
|
|
|
|
|
|
| Completion Services: |
|
|
|
|
|
|
|
| Operating loss |
$ |
(3,271 |
) |
|
$ |
(9,933 |
) |
|
$ |
(6,538 |
) |
|
$ |
(38,960 |
) |
| Depreciation and amortization expense |
16,884 |
|
|
15,679 |
|
|
49,082 |
|
|
48,400 |
|
| Other income |
620 |
|
|
133 |
|
|
1,415 |
|
|
412 |
|
| EBITDA |
14,233 |
|
|
5,879 |
|
|
43,959 |
|
|
9,852 |
|
| Severance and downsizing charges |
— |
|
|
175 |
|
|
— |
|
|
1,077 |
|
| Adjusted EBITDA |
$ |
14,233 |
|
|
$ |
6,054 |
|
|
$ |
43,959 |
|
|
$ |
10,929 |
|
|
|
|
|
|
|
|
|
|
| Drilling Services: |
|
|
|
|
|
|
|
| Operating loss |
$ |
(2,206 |
) |
|
$ |
(3,235 |
) |
|
$ |
(7,474 |
) |
|
$ |
(11,239 |
) |
| Depreciation and amortization expense |
3,479 |
|
|
4,454 |
|
|
10,898 |
|
|
14,283 |
|
| Other income (expense) |
(1 |
) |
|
44 |
|
|
379 |
|
|
48 |
|
| EBITDA |
$ |
1,272 |
|
|
$ |
1,263 |
|
|
$ |
3,803 |
|
|
$ |
3,092 |
|
|
|
|
|
|
|
|
|
|
|
Total Well Site Services: |
|
|
|
|
|
|
|
| Operating loss |
$ |
(5,477 |
) |
|
$ |
(13,168 |
) |
|
$ |
(14,012 |
) |
|
$ |
(50,199 |
) |
| Depreciation and amortization expense |
20,363 |
|
|
20,133 |
|
|
59,980 |
|
|
62,683 |
|
| Other income |
619 |
|
|
177 |
|
|
1,794 |
|
|
460 |
|
|
Segment EBITDA |
15,505 |
|
|
7,142 |
|
|
47,762 |
|
|
12,944 |
|
| Severance and downsizing charges |
— |
|
|
175 |
|
|
— |
|
|
1,077 |
|
|
Adjusted Segment EBITDA |
$ |
15,505 |
|
|
$ |
7,317 |
|
|
$ |
47,762 |
|
|
$ |
14,021 |
|
|
|
|
|
|
|
|
|
|
|
Downhole Technologies: |
|
|
|
|
|
|
|
| Operating income |
$ |
6,485 |
|
|
$ |
— |
|
|
$ |
26,139 |
|
|
$ |
— |
|
| Depreciation and amortization expense |
4,582 |
|
|
— |
|
|
12,998 |
|
|
— |
|
| Other income (expense) |
1 |
|
|
— |
|
|
(12 |
) |
|
— |
|
|
Segment EBITDA |
11,068 |
|
|
— |
|
|
39,125 |
|
|
— |
|
| Transaction-related charges |
— |
|
|
— |
|
|
211 |
|
|
— |
|
|
Adjusted Segment EBITDA |
$ |
11,068 |
|
|
$ |
— |
|
|
$ |
39,336 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
Offshore/Manufactured Products: |
|
|
|
|
|
|
|
| Operating income |
$ |
7,069 |
|
|
$ |
7,334 |
|
|
$ |
32,185 |
|
|
$ |
27,460 |
|
| Depreciation and amortization expense |
5,426 |
|
|
6,404 |
|
|
17,026 |
|
|
19,091 |
|
| Other income |
89 |
|
|
30 |
|
|
145 |
|
|
17 |
|
|
Segment EBITDA |
12,584 |
|
|
13,768 |
|
|
49,356 |
|
|
46,568 |
|
| Severance and downsizing charges |
— |
|
|
253 |
|
|
783 |
|
|
946 |
|
|
Adjusted Segment EBITDA |
$ |
12,584 |
|
|
$ |
14,021 |
|
|
$ |
50,139 |
|
|
$ |
47,514 |
|
|
|
|
|
|
|
|
|
|
|
Corporate: |
|
|
|
|
|
|
|
| Operating loss |
$ |
(11,799 |
) |
|
$ |
(12,349 |
) |
|
$ |
(40,248 |
) |
|
$ |
(37,274 |
) |
| Depreciation and amortization expense |
215 |
|
|
251 |
|
|
694 |
|
|
778 |
|
| Other expense |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
EBITDA |
(11,584 |
) |
|
(12,098 |
) |
|
(39,554 |
) |
|
(36,496 |
) |
| Transaction-related charges |
— |
|
|
— |
|
|
2,371 |
|
|
— |
|
|
Adjusted EBITDA |
$ |
(11,584 |
) |
|
$ |
(12,098 |
) |
|
$ |
(37,183 |
) |
|
$ |
(36,496 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OIL STATES INTERNATIONAL, INC. AND
SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL INFORMATION(In Thousands)(unaudited)
|
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(4,019 |
) |
|
$ |
(15,031 |
) |
|
$ |
(4,769 |
) |
|
$ |
(46,955 |
) |
|
Income tax benefit |
(3,837 |
) |
|
(4,019 |
) |
|
(3,327 |
) |
|
(15,708 |
) |
|
Depreciation and amortization expense |
30,586 |
|
|
26,788 |
|
|
90,698 |
|
|
82,552 |
|
|
Interest income |
(70 |
) |
|
(73 |
) |
|
(272 |
) |
|
(243 |
) |
|
Interest expense |
4,913 |
|
|
1,147 |
|
|
14,359 |
|
|
3,370 |
|
|
Consolidated EBITDA (A) |
27,573 |
|
|
8,812 |
|
|
96,689 |
|
|
23,016 |
|
|
|
|
|
|
|
|
|
|
|
Adjustments to Consolidated EBITDA (1,2): |
|
|
|
|
|
|
|
|
Transaction-related charges |
— |
|
|
— |
|
|
2,582 |
|
|
— |
|
|
Severance and downsizing charges |
— |
|
|
428 |
|
|
783 |
|
|
2,023 |
|
|
Adjusted Consolidated EBITDA (A) |
$ |
27,573 |
|
|
$ |
9,240 |
|
|
$ |
100,054 |
|
|
$ |
25,039 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Operating income (loss) and Segment and
Consolidated EBITDA for the nine months ended September 30,
2018 included transaction-related expenses of $2.4 million and
$0.2 million related to Corporate and the Downhole
Technologies segment, respectively, as well as severance charges of
$0.8 million related to the Offshore/Manufactured Products
segment.
(2) Operating income (loss) and Segment and
Consolidated EBITDA for the three and nine months ended September
30, 2017 included severance and downsizing charges of
$0.2 million and $1.1 million, respectively, related to
the Completion Services business and $0.3 million and
$0.9 million, respectively, related to the
Offshore/Manufactured Products segment.
(A) The terms Consolidated EBITDA and Adjusted
Consolidated EBITDA consist of net income (loss) 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 income (loss) 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 income (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 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.
OIL STATES INTERNATIONAL, INC. AND
SUBSIDIARIES
ADDITIONAL QUARTERLY SEGMENT AND
OPERATING DATA(unaudited)
|
|
Three Months Ended September
30, |
|
|
2018 |
|
2017 |
|
Supplemental operating data: |
|
|
|
|
Offshore/Manufactured Products backlog ($ in millions) |
$ |
174.6 |
|
|
$ |
198.1 |
|
|
|
|
|
|
|
Completion Services job tickets |
8,485 |
|
|
4,970 |
|
|
Average revenue per ticket ($ in thousands) |
$ |
13.2 |
|
|
$ |
12.3 |
|
|
|
|
|
|
|
Land drilling operating statistics: |
|
|
|
|
Average rigs available |
34 |
|
|
34 |
|
|
Utilization |
30.5 |
% |
|
33.6 |
% |
|
Implied day rate ($ in thousands per day) |
$ |
17.7 |
|
|
$ |
15.4 |
|
|
Implied daily cash margin ($ in thousands per day) |
$ |
1.8 |
|
|
$ |
1.6 |
|
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
SOURCE: Oil States International, Inc.
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