HOUSTON, July 30, 2018 (GLOBE NEWSWIRE) -- Oil States International, Inc. (NYSE:OIS) reported net income for the second quarter 2018 of $2.7 million, or $0.05 per diluted share. These results compare to a reported net loss for the second quarter of 2017 of $14.2 million, or $0.28 per diluted share, which included pre-tax charges of $0.8 million ($0.6 million after-tax, or $0.01 per diluted share) of severance and downsizing charges.
During the second quarter of 2018, the Company generated revenues of $285.8 million and Consolidated EBITDA (Note A) of $40.2 million. These results compare to revenues of $171.4 million and Adjusted Consolidated EBITDA (Note A) of $10.4 million reported in the second quarter of 2017 (excluding $0.8 million of severance and downsizing charges).
For the first half of 2018, the Company reported revenues of $539.4 million and Adjusted Consolidated EBITDA of $72.5 million (excluding $2.6 million of transaction-related charges and $0.8 million of severance and downsizing charges). The net loss for the first half of 2018 totaled $0.8 million and included $2.6 million ($2.0 million after-tax, or $0.03 per diluted share) of transaction-related charges and $0.8 million ($0.6 million after-tax, or $0.01 per diluted share) of severance charges. For the first half of 2017, the Company reported revenues of $322.9 million and Adjusted Consolidated EBITDA of $15.8 million (excluding $1.6 million of severance and downsizing charges). The net loss for the first half of 2017 totaled $31.9 million and included $1.6 million ($1.2 million after-tax, or $0.02 per diluted share) of severance and downsizing charges.
Oil States’ President and Chief Executive Officer Cindy B. Taylor commented, "We delivered second quarter revenues of $286 million, up 67% year-over-year, and quarterly EBITDA of $40 million, up 288% year-over-year. This vast improvement in our results was due to strong contributions from our two strategic acquisitions completed in the first quarter of this year, coupled with improved land completions activity in our key shale play regions. Our Offshore/Manufactured Products segment received a major project award for floating production facility content for a project in South America, resulting in a 1.2x book-to-bill ratio and a 6% sequential increase in total backlog."
BUSINESS SEGMENT RESULTS
(See Segment Data Tables)
Well Site Services
Well Site Services generated revenues of $125.1 million and Segment EBITDA (Note B) of $19.1 million in the second quarter of 2018 compared to revenues and Segment EBITDA of $69.4 million and $5.0 million, respectively, in the second quarter of 2017. The 80% revenue increase was due to a 63% year-over-year increase in the number of Completion Services jobs performed, coupled with a 15% year-over-year increase in revenue per Completion Services job. Our improved results were driven by significantly increased completion-related activity levels in the United States, a continuing trend of customers utilizing more proprietary equipment and service offerings, and a full quarters' revenue contribution generated by Falcon Flowback Services, LLC (“Falcon”), which was acquired on February 28, 2018.
Downhole Technologies (acquisition of GEODynamics, Inc. closed on January 12, 2018)
In the second quarter of 2018, Downhole Technologies generated revenues of $59.3 million, Segment EBITDA of $16.1 million and a Segment EBITDA margin of 27%. The segment has performed very well compared to the acquisition economics on which the transaction was based. No results were included in the second quarter of 2017 given our acquisition of the business in January 2018.
Offshore/Manufactured Products
Offshore/Manufactured Products generated revenues and Segment EBITDA of $101.4 million and $18.5 million, respectively, in the second quarter of 2018 compared to revenues of $102.0 million and Segment EBITDA of $17.2 million in the second quarter of 2017. Revenues decreased 1% while Segment EBITDA increased 8% year-over-year. Project-driven revenues increased 2% year-over-year due to higher sales of connector products while revenues from other products and service increased 5% year-over-year. These results were partially offset by lower short-cycle product sales (elastomer and valve products), which decreased 7% year-over-year due to lower customer demand, likely due to stocking cycles. We recorded a $3.6 million insurance gain related to the settlement of a Hurricane Harvey facility claim in the second quarter of 2018, partially offset by foreign exchange losses, which impacted Segment EBITDA and margins. Excluding the insurance gain and foreign exchange losses, Segment EBITDA margin in the second quarter of 2018 was 15.5% compared to 16.8% in the second quarter of 2017. Backlog increased 6% sequentially to total $165 million at June 30, 2018 compared to $157 million at March 31, 2018 and $202 million at June 30, 2017. The second quarter book-to-bill ratio was 1.2x. During the second quarter of 2018, we received one notable major project award for floating production facility content destined for South America.
Income Taxes
The Company recognized an effective tax rate provision of 38.8% in the second quarter of 2018 which compared to an effective tax rate benefit of 26.2% in the second quarter of 2017.
Financial Condition
As of June 30, 2018, $157.9 million was outstanding under the Company’s revolving credit facility along with an additional $22.3 million of outstanding letters of credit, while cash totaled $29.1 million. The Company had access to $157.8 million of revolving credit facility availability as of June 30, 2018.
On July 25, 2018, the Company's Board of Directors extended the existing share repurchase program for one year to July 29, 2019. The amount remaining under the Company's share repurchase authorization as of June 30, 2018 was $120.5 million.
Conference Call Information
The call is scheduled for Monday, July 30, 2018 at 10:00 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 47304106. 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 47304106.
About Oil States
Oil 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 June 30, | Six Months Ended June 30, | ||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||
| Revenues: | |||||||||||||||
| Products | $ | 136,182 | $ | 82,750 | $ | 265,008 | $ | 155,930 | |||||||
| Service | 149,663 | 88,652 | 274,413 | 166,939 | |||||||||||
| 285,845 | 171,402 | 539,421 | 322,869 | ||||||||||||
| Costs and expenses: | |||||||||||||||
| Product costs | 95,324 | 59,309 | 188,300 | 109,659 | |||||||||||
| Service costs | 118,079 | 72,539 | 214,993 | 141,101 | |||||||||||
| Selling, general and administrative expense | 35,919 | 29,482 | 70,114 | 57,212 | |||||||||||
| Depreciation and amortization expense | 30,922 | 27,784 | 60,112 | 55,764 | |||||||||||
| Other operating (income) expense, net | (3,099 | ) | 794 | (1,884 | ) | 963 | |||||||||
| 277,145 | 189,908 | 531,635 | 364,699 | ||||||||||||
| Operating income (loss) | 8,700 | (18,506 | ) | 7,786 | (41,830 | ) | |||||||||
| Interest expense | (4,913 | ) | (1,149 | ) | (9,446 | ) | (2,223 | ) | |||||||
| Interest income | 123 | 85 | 202 | 170 | |||||||||||
| Other income | 571 | 273 | 1,218 | 270 | |||||||||||
| Income (loss) before income taxes | 4,481 | (19,297 | ) | (240 | ) | (43,613 | ) | ||||||||
| Income tax (provision) benefit | (1,739 | ) | 5,051 | (510 | ) | 11,689 | |||||||||
| Net income (loss) | $ | 2,742 | $ | (14,246 | ) | $ | (750 | ) | $ | (31,924 | ) | ||||
| Net income (loss) per share: | |||||||||||||||
| Basic | $ | 0.05 | $ | (0.28 | ) | $ | (0.01 | ) | $ | (0.63 | ) | ||||
| Diluted | $ | 0.05 | $ | (0.28 | ) | $ | (0.01 | ) | $ | (0.63 | ) | ||||
| Weighted average number of common shares outstanding: | |||||||||||||||
| Basic | 59,005 | 50,232 | 58,396 | 50,296 | |||||||||||
| Diluted | 59,005 | 50,232 | 58,396 | 50,296 | |||||||||||
OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands)
| June 30, 2018 | December 31, 2017 | ||||||
| (Unaudited) | |||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 29,102 | $ | 53,459 | |||
| Accounts receivable, net | 289,806 | 216,139 | |||||
| Inventories, net | 205,057 | 168,285 | |||||
| Prepaid expenses and other current assets | 22,592 | 18,054 | |||||
| Total current assets | 546,557 | 455,937 | |||||
| Property, plant, and equipment, net | 537,701 | 498,890 | |||||
| Goodwill, net | 658,034 | 268,009 | |||||
| Other intangible assets, net | 253,966 | 50,265 | |||||
| Other noncurrent assets | 28,868 | 28,410 | |||||
| Total assets | $ | 2,025,126 | $ | 1,301,511 | |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
| Current liabilities: | |||||||
| Current portion of long-term debt and capitalized leases | $ | 535 | $ | 411 | |||
| Accounts payable | 69,416 | 49,089 | |||||
| Accrued liabilities | 56,300 | 45,889 | |||||
| Income taxes payable | 1,716 | 1,647 | |||||
| Deferred revenue | 14,907 | 18,234 | |||||
| Total current liabilities | 142,874 | 115,270 | |||||
| Long-term debt and capitalized leases | 349,245 | 4,870 | |||||
| Deferred income taxes | 57,066 | 24,718 | |||||
| Other noncurrent liabilities | 25,288 | 23,940 | |||||
| Total liabilities | 574,473 | 168,798 | |||||
| Stockholders’ equity: | |||||||
| Common stock | 718 | 627 | |||||
| Additional paid-in capital | 1,085,927 | 754,607 | |||||
| Retained earnings | 1,047,873 | 1,048,623 | |||||
| Accumulated other comprehensive loss | (67,192 | ) | (58,493 | ) | |||
| Treasury stock | (616,673 | ) | (612,651 | ) | |||
| Total stockholders’ equity | 1,450,653 | 1,132,713 | |||||
| Total liabilities and stockholders’ equity | $ | 2,025,126 | $ | 1,301,511 | |||
OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
| Six Months Ended June 30, | |||||||
| 2018 | 2017 | ||||||
| Cash flows from operating activities: | |||||||
| Net loss | $ | (750 | ) | $ | (31,924 | ) | |
| Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
| Depreciation and amortization | 60,112 | 55,764 | |||||
| Stock-based compensation expense | 10,861 | 10,954 | |||||
| Deferred income tax provision (benefit) | 481 | (14,917 | ) | ||||
| Provision for bad debt | 2,530 | 210 | |||||
| Gain on disposals of assets | (927 | ) | (210 | ) | |||
| Amortization of debt discount and deferred financing costs | 3,613 | 405 | |||||
| Other, net | (10 | ) | 29 | ||||
| Changes in operating assets and liabilities, net of effect from acquired businesses: | |||||||
| Accounts receivable | (19,134 | ) | 23,404 | ||||
| Inventories | (1,768 | ) | 8,689 | ||||
| Accounts payable and accrued liabilities | (2,251 | ) | (3,075 | ) | |||
| Income taxes payable | (31 | ) | (3,211 | ) | |||
| Other operating assets and liabilities, net | (5,792 | ) | (1,191 | ) | |||
| Net cash flows provided by operating activities | 46,934 | 44,927 | |||||
| Cash flows from investing activities: | |||||||
| Capital expenditures | (38,261 | ) | (13,291 | ) | |||
| Acquisitions of businesses, net of cash acquired | (379,676 | ) | (12,859 | ) | |||
| Proceeds from disposition of property, plant and equipment | 1,197 | 742 | |||||
| Other, net | (985 | ) | (453 | ) | |||
| Net cash flows used in investing activities | (417,725 | ) | (25,861 | ) | |||
| Cash flows from financing activities: | |||||||
| Issuance of 1.50% convertible senior notes | 200,000 | — | |||||
| Revolving credit facility borrowings | 704,469 | 127,929 | |||||
| Revolving credit facility repayments | (546,564 | ) | (123,104 | ) | |||
| Other debt and capital lease repayments, net | (266 | ) | (267 | ) | |||
| Payment of financing costs | (7,366 | ) | — | ||||
| Purchase of treasury stock | — | (16,283 | ) | ||||
| Shares added to treasury stock as a result of net share settlements due to vesting of restricted stock | (4,022 | ) | (5,200 | ) | |||
| Net cash flows provided by (used in) financing activities | 346,251 | (16,925 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | 183 | 1,527 | |||||
| Net change in cash and cash equivalents | (24,357 | ) | 3,668 | ||||
| Cash and cash equivalents, beginning of period | 53,459 | 68,800 | |||||
| Cash and cash equivalents, end of period | $ | 29,102 | $ | 72,468 | |||
OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES
SEGMENT DATA
(In Thousands)
(unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||
| Revenues: | |||||||||||||||
| Well Site Services: | |||||||||||||||
| Completion Services | $ | 108,368 | $ | 57,890 | $ | 191,208 | $ | 106,562 | |||||||
| Drilling Services | 16,756 | 11,477 | 34,315 | 22,958 | |||||||||||
| Total Well Site Services | 125,124 | 69,367 | 225,523 | 129,520 | |||||||||||
| Downhole Technologies | 59,274 | — | 105,055 | — | |||||||||||
| Offshore/Manufactured Products | 101,447 | 102,035 | 208,843 | 193,349 | |||||||||||
| Total revenues | $ | 285,845 | $ | 171,402 | $ | 539,421 | $ | 322,869 | |||||||
| Operating income (loss): | |||||||||||||||
| Well Site Services: | |||||||||||||||
| Completion Services(2) | $ | 1,204 | $ | (12,547 | ) | $ | (3,267 | ) | $ | (29,027 | ) | ||||
| Drilling Services | (2,957 | ) | (3,787 | ) | (5,268 | ) | (8,004 | ) | |||||||
| Total Well Site Services | (1,753 | ) | (16,334 | ) | (8,535 | ) | (37,031 | ) | |||||||
| Downhole Technologies(1) | 11,600 | — | 19,654 | — | |||||||||||
| Offshore/Manufactured Products(1,2) | 12,664 | 10,662 | 25,116 | 20,126 | |||||||||||
| Corporate(1) | (13,811 | ) | (12,834 | ) | (28,449 | ) | (24,925 | ) | |||||||
| Total operating income (loss) | $ | 8,700 | $ | (18,506 | ) | $ | 7,786 | $ | (41,830 | ) | |||||
| Revenues: | Well Site Services | Downhole Technologies | Offshore / Manufactured Products | Total | |||||||||||||||||||||||||||
| Three months ended June 30, | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | |||||||||||||||||||||||
| Major revenue categories: | |||||||||||||||||||||||||||||||
| Project-driven products | $ | — | $ | — | $ | — | $ | — | $ | 35,225 | $ | 34,582 | $ | 35,225 | $ | 34,582 | |||||||||||||||
| Short-cycle: | |||||||||||||||||||||||||||||||
| Completion products and services | 108,368 | 57,890 | 59,274 | — | 29,783 | 31,117 | 197,425 | 89,007 | |||||||||||||||||||||||
| Drilling services | 16,756 | 11,477 | — | — | — | — | 16,756 | 11,477 | |||||||||||||||||||||||
| Other products | — | — | — | — | 7,565 | 8,903 | 7,565 | 8,903 | |||||||||||||||||||||||
| Total short-cycle | 125,124 | 69,367 | 59,274 | — | 37,348 | 40,020 | 221,746 | 109,387 | |||||||||||||||||||||||
| Other products and services | — | — | — | — | 28,874 | 27,433 | 28,874 | 27,433 | |||||||||||||||||||||||
| $ | 125,124 | $ | 69,367 | $ | 59,274 | $ | — | $ | 101,447 | $ | 102,035 | $ | 285,845 | $ | 171,402 | ||||||||||||||||
| Revenues: | Well Site Services | Downhole Technologies | Offshore / Manufactured Products | Total | |||||||||||||||||||||||||||
| Six months ended June 30, | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | |||||||||||||||||||||||
| Major revenue categories: | |||||||||||||||||||||||||||||||
| Project-driven products | $ | — | $ | — | $ | — | $ | — | $ | 76,024 | $ | 66,917 | $ | 76,024 | $ | 66,917 | |||||||||||||||
| Short-cycle: | |||||||||||||||||||||||||||||||
| Completion products and services | 191,208 | 106,562 | 105,055 | — | 62,755 | 56,966 | 359,018 | 163,528 | |||||||||||||||||||||||
| Drilling services | 34,315 | 22,958 | — | — | — | — | 34,315 | 22,958 | |||||||||||||||||||||||
| Other products | — | — | — | — | 15,011 | 16,125 | 15,011 | 16,125 | |||||||||||||||||||||||
| Total short-cycle | 225,523 | 129,520 | 105,055 | — | 77,766 | 73,091 | 408,344 | 202,611 | |||||||||||||||||||||||
| Other products and services | — | — | — | — | 55,053 | 53,341 | 55,053 | 53,341 | |||||||||||||||||||||||
| $ | 225,523 | $ | 129,520 | $ | 105,055 | $ | — | $ | 208,843 | $ | 193,349 | $ | 539,421 | $ | 322,869 | ||||||||||||||||
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 June 30, | Six Months Ended June 30, | ||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||
| Well Site Services: | |||||||||||||||
| Completion Services: | |||||||||||||||
| Operating income (loss) | $ | 1,204 | $ | (12,547 | ) | $ | (3,267 | ) | $ | (29,027 | ) | ||||
| Depreciation and amortization expense | 16,816 | 16,193 | 32,198 | 32,721 | |||||||||||
| Other income | 526 | 295 | 795 | 279 | |||||||||||
| EBITDA | 18,546 | 3,941 | 29,726 | 3,973 | |||||||||||
| Severance and downsizing charges | — | 630 | — | 902 | |||||||||||
| Adjusted EBITDA | $ | 18,546 | $ | 4,571 | $ | 29,726 | $ | 4,875 | |||||||
| Drilling Services: | |||||||||||||||
| Operating loss | $ | (2,957 | ) | $ | (3,787 | ) | $ | (5,268 | ) | $ | (8,004 | ) | |||
| Depreciation and amortization expense | 3,551 | 4,794 | 7,419 | 9,829 | |||||||||||
| Other income | 5 | 3 | 380 | 4 | |||||||||||
| EBITDA | $ | 599 | $ | 1,010 | $ | 2,531 | $ | 1,829 | |||||||
| Total Well Site Services: | |||||||||||||||
| Operating loss | $ | (1,753 | ) | $ | (16,334 | ) | $ | (8,535 | ) | $ | (37,031 | ) | |||
| Depreciation and amortization expense | 20,367 | 20,987 | 39,617 | 42,550 | |||||||||||
| Other income | 531 | 298 | 1,175 | 283 | |||||||||||
| Segment EBITDA | 19,145 | 4,951 | 32,257 | 5,802 | |||||||||||
| Severance and downsizing charges | — | 630 | — | 902 | |||||||||||
| Adjusted Segment EBITDA | $ | 19,145 | $ | 5,581 | $ | 32,257 | $ | 6,704 | |||||||
| Downhole Technologies: | |||||||||||||||
| Operating income | $ | 11,600 | $ | — | $ | 19,654 | $ | — | |||||||
| Depreciation and amortization expense | 4,532 | — | 8,416 | — | |||||||||||
| Other expense | — | — | (13 | ) | — | ||||||||||
| Segment EBITDA | 16,132 | — | 28,057 | — | |||||||||||
| Transaction-related charges | — | — | 211 | — | |||||||||||
| Adjusted Segment EBITDA | $ | 16,132 | $ | — | $ | 28,268 | $ | — | |||||||
| Offshore/Manufactured Products: | |||||||||||||||
| Operating income | $ | 12,664 | $ | 10,662 | $ | 25,116 | $ | 20,126 | |||||||
| Depreciation and amortization expense | 5,786 | 6,534 | 11,600 | 12,687 | |||||||||||
| Other income (expense) | 40 | (25 | ) | 56 | (13 | ) | |||||||||
| Segment EBITDA | 18,490 | 17,171 | 36,772 | 32,800 | |||||||||||
| Severance and downsizing charges | — | 186 | 783 | 693 | |||||||||||
| Adjusted Segment EBITDA | $ | 18,490 | $ | 17,357 | $ | 37,555 | $ | 33,493 | |||||||
| Corporate: | |||||||||||||||
| Operating loss | $ | (13,811 | ) | $ | (12,834 | ) | $ | (28,449 | ) | $ | (24,925 | ) | |||
| Depreciation and amortization expense | 237 | 263 | 479 | 527 | |||||||||||
| Other expense | — | — | — | — | |||||||||||
| EBITDA | (13,574 | ) | (12,571 | ) | (27,970 | ) | (24,398 | ) | |||||||
| Transaction-related charges | — | — | 2,371 | — | |||||||||||
| Adjusted EBITDA | $ | (13,574 | ) | $ | (12,571 | ) | $ | (25,599 | ) | $ | (24,398 | ) | |||
OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
(In Thousands)
(unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2018 | 2017 | 2018 | 2017 | ||||||||||||
| Net income (loss) | $ | 2,742 | $ | (14,246 | ) | $ | (750 | ) | $ | (31,924 | ) | ||||
| Income tax provision (benefit) | 1,739 | (5,051 | ) | 510 | (11,689 | ) | |||||||||
| Depreciation and amortization expense | 30,922 | 27,784 | 60,112 | 55,764 | |||||||||||
| Interest income | (123 | ) | (85 | ) | (202 | ) | (170 | ) | |||||||
| Interest expense | 4,913 | 1,149 | 9,446 | 2,223 | |||||||||||
| Consolidated EBITDA (A) | 40,193 | 9,551 | 69,116 | 14,204 | |||||||||||
| Adjustments to Consolidated EBITDA (1,2): | |||||||||||||||
| Transaction-related charges | — | — | 2,582 | — | |||||||||||
| Severance and downsizing charges | — | 816 | 783 | 1,595 | |||||||||||
| Adjusted Consolidated EBITDA (A) | $ | 40,193 | $ | 10,367 | $ | 72,481 | $ | 15,799 | |||||||
(1) Operating income (loss) and Segment and Consolidated EBITDA for the six months ended June 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 six months ended June 30, 2017 included severance and downsizing charges of $0.6 million and $0.9 million, respectively, related to the Completion Services business and $0.2 million and $0.7 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 June 30, | |||||||
| 2018 | 2017 | ||||||
| Supplemental operating data: | |||||||
| Offshore/Manufactured Products backlog ($ in millions) | $ | 165.3 | $ | 202.0 | |||
| Completion Services job tickets | 7,927 | 4,863 | |||||
| Average revenue per ticket ($ in thousands) | $ | 13.7 | $ | 11.9 | |||
| Land drilling operating statistics: | |||||||
| Average rigs available | 34 | 34 | |||||
| Utilization | 30.1 | % | 24.6 | % | |||
| Implied day rate ($ in thousands per day) | $ | 18.0 | $ | 15.1 | |||
| Implied daily cash margin ($ in thousands per day) | $ | 1.0 | $ | 1.9 | |||
Company Contact:
Lloyd A. Hajdik
Oil States International, Inc.
Executive Vice President, Chief Financial Officer and Treasurer
713-652-0582
Patricia Gil
Oil States International, Inc.
Director, Investor Relations
713-470-4860
SOURCE: Oil States International, Inc.