HOUSTON, Nov. 01, 2021 (GLOBE NEWSWIRE) -- Oil States International, Inc. (NYSE: OIS) reported a net loss of $13.0 million, or $0.22 per share, for the third quarter of 2021. Reported third quarter results reflect the impact of Hurricane Ida, which negatively affected operations in southeast Louisiana and the Gulf of Mexico. The results also include a non-cash inventory impairment charge of $2.1 million ($1.7 million after-tax, or $0.03 per share) and severance and restructuring charges of $0.7 million ($0.6 million after-tax, or $0.01 per share).
During the third quarter of 2021, the Company generated revenues of $140.5 million and Adjusted Consolidated EBITDA (Note A) of $8.5 million. These results compare to revenues of $145.7 million and Adjusted Consolidated EBITDA of $10.1 million reported in the second quarter of 2021.
Third quarter 2021 highlights and corporate actions included:
- Hurricane Ida resulted in a transitory reduction in Oil States' and its customers operations in southeast Louisiana and the Gulf of Mexico, resulting in an estimated reduction in third-quarter consolidated revenues and EBITDA of $5.9 million and $3.0 million, respectively
- Offshore/Manufactured Products backlog increased $35 million to $249 million, with quarterly bookings up 64% sequentially resulting in a book-to-bill ratio of 1.5x
- Generated cash flow from operations of $6.6 million
- Received the ESG Accelerator Award from the Energy Workforce & Technology Council
Oil States' President and Chief Executive Officer, Cindy B. Taylor, stated,
"We hope for a rapid recovery for the residents of Louisiana, particularly our employees, who were in the path of Hurricane Ida following its landfall on August 30th. We are thankful that our personnel remained safe through this devastating storm. While our facilities did not sustain major damage, results of operations within our Offshore/Manufactured Products and Well Site Services segments were negatively impacted due to the cessation of work in the Gulf of Mexico, temporary facility closures, local workforce challenges and resulting delays in the production and shipment of goods to our customers. On a consolidated basis, we estimate that Hurricane Ida resulted in reductions to third-quarter revenues and EBITDA of $5.9 million and $3.0 million, respectively, offsetting the benefit of increased U.S. land-based completion activity.
"Revenues in our Offshore/Manufactured Products segment decreased 10% from the second quarter of 2021 due primarily to transitory delays in customer projects following landfall of Hurricane Ida, creating the need to outsource certain project work to third-party contractors in the interim. Adjusted Segment EBITDA for Offshore/Manufactured Products decreased $1.7 million sequentially to $8.6 million, reflective of the September revenue decline caused by the storm. Backlog grew to $249 million as of September 30, 2021 with quarterly bookings increasing 64% sequentially to $106 million, yielding book-to-bill ratios of 1.5x for the third quarter and 1.2x year-to-date.
"Our Well Site Services segment revenues increased 9% from the prior quarter – driven by higher U.S. land-based activity, partially offset by a decline in Gulf of Mexico work in September as Hurricane Ida shut down Gulf of Mexico activity for most of September, coupled with reduced customer activity internationally. Adjusted Segment EBITDA for Well Site Services increased modestly to $5.9 million in the third quarter, with the impact of revenue growth substantially offset by a shift in revenue mix.
"Third quarter revenues in our Downhole Technologies segment decreased 5% sequentially, driven by lower demand for its perforating products internationally. Our Downhole Technologies segment reported Adjusted Segment EBITDA of $1.4 million in the third quarter.
"We are committed to advancing the future of energy from traditional sources, while enabling pathways to a lower-carbon, multisource energy mix to meet global demand. Oil States continues to strive for improvement in the health and safety of our employees, to further our sustainability initiatives, to avoid any negative impacts to the environment, and to support the communities in which we work and live. In this regard, we were recently recognized by the Energy Workforce & Technology Council with the ESG Accelerator Award for our significant advances in ESG reporting and industry leadership."
BUSINESS SEGMENT RESULTS
(See Segment Data tables)
Offshore/Manufactured Products
Offshore/Manufactured Products reported revenues of $69.0 million and Adjusted Segment EBITDA (Note B) of $8.6 million in the third quarter of 2021, compared to revenues of $76.9 million and Adjusted Segment EBITDA of $10.3 million reported in the second quarter of 2021. Revenues decreased 10% sequentially, driven primarily by lower connector product sales and the effects of Hurricane Ida, which caused the temporary closure of a manufacturing and service facility in southeast Louisiana in September. Adjusted Segment EBITDA margin in the third quarter of 2021 was 12% compared to 13% in the second quarter of 2021. Reported results for the third quarter of 2021 included the adverse impact of Hurricane Ida, which reduced revenues and Adjusted Segment EBITDA by an estimated $4.8 million and $2.1 million, respectively.
Backlog totaled $249 million as of September 30, 2021, a 16% sequential increase. During the third quarter, the segment booked two notable project awards exceeding $10 million. Third quarter 2021 bookings totaled $106 million, yielding a quarterly book-to-bill ratio of 1.5x and a year-to-date ratio of 1.2x.
Downhole Technologies
Downhole Technologies reported revenues of $25.5 million and Adjusted Segment EBITDA of $1.4 million in the third quarter of 2021, compared to revenues of $26.8 million and Adjusted Segment EBITDA of $2.4 million reported in the second quarter of 2021. Adjusted Segment EBITDA margin in the third quarter of 2021 was 6% compared to 9% in the second quarter of 2021.
Well Site Services
Well Site Services reported revenues of $46.0 million and Adjusted Segment EBITDA of $5.9 million in the third quarter of 2021, compared to revenues of $42.1 million and Adjusted Segment EBITDA of $5.7 million reported in the second quarter of 2021. Adjusted Segment EBITDA margin the third quarter of 2021 was 13% compared to 14% in the second quarter of 2021. Reported results for the third quarter of 2021 included the adverse impact of Hurricane Ida, which reduced revenues and Adjusted Segment EBITDA by an estimated $1.1 million and $0.9 million, respectively.
Corporate
Corporate expenses in the third quarter of 2021 totaled $7.6 million.
Interest Expense, Net
The Company reported net interest expense of $2.6 million in the third quarter of 2021, which included $0.5 million of non-cash amortization of deferred debt issuance costs.
Income Taxes
The Company recognized an effective tax rate benefit of 21% in the third quarter of 2021, which compared to an effective tax rate benefit of 17% in the second quarter of 2021.
Financial Condition
As of September 30, 2021 and June 30, 2021, no borrowings were outstanding under the Company's asset-based revolving credit facility (the "ABL Facility"). Cash on-hand totaled $67.6 million as of September 30, 2021, compared to $62.7 million as of June 30, 2021. Liquidity (cash plus borrowing availability) totaled $129.0 million as of September 30, 2021 with amounts available to be drawn under the ABL Facility totaling $61.4 million.
The Company's total debt represented 20% of combined total debt and stockholders' equity as of September 30, 2021 and December 31, 2020.
Conference Call Information
The call is scheduled for November 1, 2021 at 9:00 a.m. central daylight 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 50243892. 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
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts)
| Three Months Ended | Nine Months Ended | ||||||||||||||||||
| September 30, 2021 | June 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | |||||||||||||||
| Revenues: | |||||||||||||||||||
| Products | $ | 70,409 | $ | 78,038 | $ | 72,598 | $ | 209,892 | $ | 258,221 | |||||||||
| Services | 70,119 | 67,686 | 62,161 | 201,949 | 242,477 | ||||||||||||||
| 140,528 | 145,724 | 134,759 | 411,841 | 500,698 | |||||||||||||||
| Costs and expenses: | |||||||||||||||||||
| Product costs | 60,310 | 63,926 | 66,789 | 173,699 | 224,623 | ||||||||||||||
| Service costs | 56,897 | 53,706 | 53,822 | 163,450 | 221,673 | ||||||||||||||
| Cost of revenues (exclusive of depreciation and amortization expense presented below)(1) | 117,207 | 117,632 | 120,611 | 337,149 | 446,296 | ||||||||||||||
| Selling, general and administrative expense | 20,078 | 22,092 | 21,389 | 63,395 | 71,505 | ||||||||||||||
| Depreciation and amortization expense | 19,657 | 20,909 | 24,251 | 62,086 | 75,306 | ||||||||||||||
| Impairments of goodwill | — | — | — | — | 406,056 | ||||||||||||||
| Impairments of fixed and lease assets | — | 2,794 | — | 3,444 | 8,190 | ||||||||||||||
| Other operating income, net | (275 | ) | (85 | ) | (652 | ) | (714 | ) | (679 | ) | |||||||||
| 156,667 | 163,342 | 165,599 | 465,360 | 1,006,674 | |||||||||||||||
| Operating loss | (16,139 | ) | (17,618 | ) | (30,840 | ) | (53,519 | ) | (505,976 | ) | |||||||||
| Interest expense, net | (2,569 | ) | (2,699 | ) | (3,549 | ) | (7,593 | ) | (11,232 | ) | |||||||||
| Other income, net(2) | 2,137 | 1,820 | 6,744 | 7,917 | 13,512 | ||||||||||||||
| Loss before income taxes | (16,571 | ) | (18,497 | ) | (27,645 | ) | (53,195 | ) | (503,696 | ) | |||||||||
| Income tax benefit | 3,529 | 3,226 | 7,676 | 9,072 | 54,060 | ||||||||||||||
| Net loss | $ | (13,042 | ) | $ | (15,271 | ) | $ | (19,969 | ) | $ | (44,123 | ) | $ | (449,636 | ) | ||||
| Net loss per share: | |||||||||||||||||||
| Basic | $ | (0.22 | ) | $ | (0.25 | ) | $ | (0.33 | ) | $ | (0.73 | ) | $ | (7.52 | ) | ||||
| Diluted | $ | (0.22 | ) | $ | (0.25 | ) | $ | (0.33 | ) | $ | (0.73 | ) | $ | (7.52 | ) | ||||
| Weighted average number of common shares outstanding: | |||||||||||||||||||
| Basic | 60,377 | 60,317 | 59,871 | 60,264 | 59,788 | ||||||||||||||
| Diluted | 60,377 | 60,317 | 59,871 | 60,264 | 59,788 | ||||||||||||||
________________
(1) In the three and nine months ended September 30, 2021, cost of revenues (exclusive of depreciation and amortization expense) included non-cash inventory impairment charges of $2.1 million each (in product costs). For the three and nine months ended September 30, 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, net included non-cash gains of $4.0 million, in the nine months ended September 30, 2021 recognized in connection with purchases of $131.4 million principal amount of the 2023 Notes. In the three and nine months ended September 30, 2020, the Company recognized non-cash gains of $5.9 million and $10.7 million, respectively, in connection with the purchases of $17.2 million and $34.9 million, respectively, principal amount of the 2023 Notes.
OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands)
| September 30, 2021 | December 31, 2020 | ||||||
| (Unaudited) | |||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 67,561 | $ | 72,011 | |||
| Accounts receivable, net | 161,440 | 163,135 | |||||
| Inventories, net | 178,078 | 170,376 | |||||
| Prepaid expenses and other current assets | 15,919 | 18,071 | |||||
| Total current assets | 422,998 | 423,593 | |||||
| Property, plant, and equipment, net | 340,384 | 383,562 | |||||
| Operating lease assets, net | 27,435 | 33,140 | |||||
| Goodwill, net | 76,372 | 76,489 | |||||
| Other intangible assets, net | 190,845 | 205,749 | |||||
| Other noncurrent assets | 33,865 | 29,727 | |||||
| Total assets | $ | 1,091,899 | $ | 1,152,260 | |||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
| Current liabilities: | |||||||
| Current portion of long-term debt | $ | 18,234 | $ | 17,778 | |||
| Accounts payable | 49,128 | 46,433 | |||||
| Accrued liabilities | 53,431 | 44,504 | |||||
| Current operating lease liabilities | 7,004 | 7,620 | |||||
| Income taxes payable | 1,945 | 2,413 | |||||
| Deferred revenue | 42,512 | 43,384 | |||||
| Total current liabilities | 172,254 | 162,132 | |||||
| Long-term debt | 160,434 | 165,759 | |||||
| Long-term operating lease liabilities | 26,598 | 29,166 | |||||
| Deferred income taxes | 1,553 | 14,263 | |||||
| Other noncurrent liabilities | 26,553 | 23,309 | |||||
| Total liabilities | 387,392 | 394,629 | |||||
| Stockholders' equity: | |||||||
| Common stock | 739 | 733 | |||||
| Additional paid-in capital | 1,103,507 | 1,122,945 | |||||
| Retained earnings | 301,437 | 329,327 | |||||
| Accumulated other comprehensive loss | (75,592 | ) | (71,385 | ) | |||
| Treasury stock | (625,584 | ) | (623,989 | ) | |||
| Total stockholders' equity | 704,507 | 757,631 | |||||
| Total liabilities and stockholders' equity | $ | 1,091,899 | $ | 1,152,260 | |||
OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
| Nine Months Ended September 30, | |||||||
| 2021 | 2020 | ||||||
| Cash flows from operating activities: | |||||||
| Net loss | $ | (44,123 | ) | $ | (449,636 | ) | |
| Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
| Depreciation and amortization expense | 62,086 | 75,306 | |||||
| Impairments of goodwill | — | 406,056 | |||||
| Impairments of inventories | 2,113 | 31,151 | |||||
| Impairments of fixed and lease assets | 3,444 | 8,190 | |||||
| Stock-based compensation expense | 6,251 | 5,346 | |||||
| Amortization of debt discount and deferred financing costs | 1,839 | 5,937 | |||||
| Deferred income tax benefit | (10,340 | ) | (16,915 | ) | |||
| Gains on extinguishment of 1.50% convertible senior notes | (4,022 | ) | (10,721 | ) | |||
| Gains on disposals of assets | (3,558 | ) | (2,088 | ) | |||
| Other, net | 325 | 3,732 | |||||
| Changes in operating assets and liabilities: | |||||||
| Accounts receivable | 1,112 | 67,371 | |||||
| Inventories | (10,767 | ) | 9,174 | ||||
| Accounts payable and accrued liabilities | 13,708 | (39,594 | ) | ||||
| Deferred revenue | (872 | ) | 31,114 | ||||
| Other operating assets and liabilities, net | 3,376 | 6,719 | |||||
| Net cash flows provided by operating activities | 20,572 | 131,142 | |||||
| Cash flows from investing activities: | |||||||
| Capital expenditures | (10,977 | ) | (11,277 | ) | |||
| Proceeds from disposition of property and equipment | 6,160 | 8,984 | |||||
| Other, net | (511 | ) | (444 | ) | |||
| Net cash flows used in investing activities | (5,328 | ) | (2,737 | ) | |||
| Cash flows from financing activities: | |||||||
| Revolving credit facility borrowings | 12,782 | 72,173 | |||||
| Revolving credit facility repayments | (31,782 | ) | (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 | (55 | ) | (337 | ) | |||
| Payment of financing costs | (7,785 | ) | (962 | ) | |||
| Shares added to treasury stock as a result of net share settlements due to vesting of stock awards | (1,595 | ) | (2,675 | ) | |||
| Net cash flows used in financing activities | (19,387 | ) | (56,983 | ) | |||
| Effect of exchange rate changes on cash and cash equivalents | (307 | ) | (214 | ) | |||
| Net change in cash and cash equivalents | (4,450 | ) | 71,208 | ||||
| Cash and cash equivalents, beginning of period | 72,011 | 8,493 | |||||
| Cash and cash equivalents, end of period | $ | 67,561 | $ | 79,701 | |||
| Cash paid (received) for: | |||||||
| Interest | $ | 2,785 | $ | 5,716 | |||
| Income taxes, net | 1,272 | (37,393 | ) | ||||
OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES
SEGMENT DATA
(In Thousands)
(unaudited)
| Three Months Ended | Nine Months Ended | ||||||||||||||||||
| September 30, 2021(2) | June 30, 2021(3) | September 30, 2020(4) | September 30, 2021(5) | September 30, 2020(6) | |||||||||||||||
| Revenues: | |||||||||||||||||||
| Offshore/Manufactured Products(1): | |||||||||||||||||||
| Project-driven products | $ | 25,294 | $ | 31,826 | $ | 41,004 | $ | 78,494 | $ | 129,157 | |||||||||
| Short-cycle products | 18,682 | 16,030 | 7,864 | 46,962 | 41,334 | ||||||||||||||
| Other products and services | 25,027 | 29,052 | 29,806 | 81,064 | 94,291 | ||||||||||||||
| Total Offshore/Manufactured Products | 69,003 | 76,908 | 78,674 | 206,520 | 264,782 | ||||||||||||||
| Downhole Technologies | 25,527 | 26,760 | 18,713 | 77,717 | 74,743 | ||||||||||||||
| Well Site Services | 45,998 | 42,056 | 37,372 | 127,604 | 161,173 | ||||||||||||||
| Total revenues | $ | 140,528 | $ | 145,724 | $ | 134,759 | $ | 411,841 | $ | 500,698 | |||||||||
| Operating income (loss): | |||||||||||||||||||
| Offshore/Manufactured Products | $ | 1,764 | $ | 4,810 | $ | 3,875 | $ | 7,645 | $ | (82,202 | ) | ||||||||
| Downhole Technologies | (5,035 | ) | (2,295 | ) | (12,594 | ) | (8,945 | ) | (216,395 | ) | |||||||||
| Well Site Services | (5,250 | ) | (11,590 | ) | (13,872 | ) | (26,693 | ) | (181,746 | ) | |||||||||
| Corporate | (7,618 | ) | (8,543 | ) | (8,249 | ) | (25,526 | ) | (25,633 | ) | |||||||||
| Total operating loss | $ | (16,139 | ) | $ | (17,618 | ) | $ | (30,840 | ) | $ | (53,519 | ) | $ | (505,976 | ) | ||||
________________
(1) Disaggregated revenue data is provided to supplement the Segment Data.
(2) Operating income (loss) for the three months ended September 30, 2021 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.
(3) Operating income (loss) for the three months ended June 30, 2021 included $0.2 million of restructuring charges related to the Downhole Technologies segment. In the Well Site Services segment, operating income (loss) included non-cash operating lease asset impairment charges of $2.8 million and severance and restructuring charges of $2.4 million.
(4) Operating income (loss) for the three months ended September 30, 2020 included $0.3 million of severance charges in the Offshore/Manufactured Products segment. In the Downhole Technologies segment, operating income (loss) included a non-cash inventory impairment charge of $5.9 million.
(5) Operating income (loss) for the nine months ended September 30, 2021 included $0.5 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 charges of $2.1 million and severance and restructuring charges of $0.6 million. In the Well Site Services segment, operating income (loss) included non-cash fixed asset and operating lease impairment charges of $3.4 million and severance and restructuring charges of $4.0 million. In Corporate, operating income (loss) included $1.6 million of severance charges.
(6) Operating income (loss) for the nine months ended September 30, 2020 included a non-cash goodwill impairment charge of $86.5 million, non-cash inventory impairment charges of $16.2 million and $0.7 million of severance 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 and severance and restructuring charges of $1.3 million. 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 $8.2 million and severance and restructuring charges of $4.1 million. In Corporate, operating income (loss) included $0.2 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 | Nine Months Ended | ||||||||||||||||||
| September 30, 2021(1) | June 30, 2021 | September 30, 2020 | September 30, 2021(1) | September 30, 2020 | |||||||||||||||
| Offshore/Manufactured Products: | |||||||||||||||||||
| Operating income (loss) | $ | 1,764 | $ | 4,810 | $ | 3,875 | $ | 7,645 | $ | (82,202 | ) | ||||||||
| Depreciation and amortization expense | 5,662 | 5,557 | 5,401 | 16,688 | 16,505 | ||||||||||||||
| Impairment of goodwill | — | — | — | — | 86,500 | ||||||||||||||
| Impairment of inventories | — | — | — | — | 16,249 | ||||||||||||||
| Other income (expense) | 881 | (70 | ) | 171 | 749 | 460 | |||||||||||||
| Segment EBITDA | 8,307 | 10,297 | 9,447 | 25,082 | 37,512 | ||||||||||||||
| Severance and restructuring charges | 256 | — | 288 | 538 | 722 | ||||||||||||||
| Adjusted Segment EBITDA | $ | 8,563 | $ | 10,297 | $ | 9,735 | $ | 25,620 | $ | 38,234 | |||||||||
| Downhole Technologies: | |||||||||||||||||||
| Operating loss | $ | (5,035 | ) | $ | (2,295 | ) | $ | (12,594 | ) | $ | (8,945 | ) | $ | (216,395 | ) | ||||
| Depreciation and amortization expense | 4,226 | 4,521 | 5,701 | 13,136 | 16,904 | ||||||||||||||
| Impairment of goodwill | — | — | — | — | 192,502 | ||||||||||||||
| Impairment of inventories | 2,113 | — | 5,921 | 2,113 | 5,921 | ||||||||||||||
| Other expense | (4 | ) | — | (7 | ) | (6 | ) | (97 | ) | ||||||||||
| Segment EBITDA | 1,300 | 2,226 | (979 | ) | 6,298 | (1,165 | ) | ||||||||||||
| Severance and restructuring charges | 129 | 203 | — | 607 | 1,315 | ||||||||||||||
| Adjusted Segment EBITDA | $ | 1,429 | $ | 2,429 | $ | (979 | ) | $ | 6,905 | $ | 150 | ||||||||
| Well Site Services: | |||||||||||||||||||
| Operating loss | $ | (5,250 | ) | $ | (11,590 | ) | $ | (13,872 | ) | $ | (26,693 | ) | $ | (181,746 | ) | ||||
| Depreciation and amortization expense | 9,531 | 10,642 | 12,930 | 31,641 | 41,334 | ||||||||||||||
| Impairment of goodwill | — | — | — | — | 127,054 | ||||||||||||||
| Impairment of inventories | — | — | — | — | 8,981 | ||||||||||||||
| Impairments of fixed and lease assets | — | 2,794 | — | 3,444 | 8,190 | ||||||||||||||
| Other income | 1,260 | 1,505 | 638 | 3,152 | 2,428 | ||||||||||||||
| Segment EBITDA | 5,541 | 3,351 | (304 | ) | 11,544 | 6,241 | |||||||||||||
| Severance and restructuring charges | 352 | 2,351 | — | 4,009 | 4,092 | ||||||||||||||
| Adjusted Segment EBITDA | $ | 5,893 | $ | 5,702 | $ | (304 | ) | $ | 15,553 | $ | 10,333 | ||||||||
| Corporate: | |||||||||||||||||||
| Operating loss | $ | (7,618 | ) | $ | (8,543 | ) | $ | (8,249 | ) | $ | (25,526 | ) | $ | (25,633 | ) | ||||
| Depreciation and amortization expense | 238 | 189 | 219 | 621 | 563 | ||||||||||||||
| Other expense | — | — | — | — | — | ||||||||||||||
| EBITDA | (7,380 | ) | (8,354 | ) | (8,030 | ) | (24,905 | ) | (25,070 | ) | |||||||||
| Severance charges | — | — | — | 1,555 | 216 | ||||||||||||||
| Adjusted EBITDA | $ | (7,380 | ) | $ | (8,354 | ) | $ | (8,030 | ) | $ | (23,350 | ) | $ | (24,854 | ) | ||||
________________
(1) Reported results for the three and nine months ended September 30, 2021 are not adjusted for the estimated impacts of Hurricane Ida. The Company estimates the storm reduced reported Segment EBITDA for the Offshore/Manufactured Products and Well Site Services segments by $2.1 and $0.9 million, respectively.
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 | Nine Months Ended | ||||||||||||||||||
| September 30, 2021 | June 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | |||||||||||||||
| Net loss | $ | (13,042 | ) | $ | (15,271 | ) | $ | (19,969 | ) | $ | (44,123 | ) | $ | (449,636 | ) | ||||
| Income tax benefit | (3,529 | ) | (3,226 | ) | (7,676 | ) | (9,072 | ) | (54,060 | ) | |||||||||
| Depreciation and amortization expense | 19,657 | 20,909 | 24,251 | 62,086 | 75,306 | ||||||||||||||
| Impairments of goodwill | — | — | — | — | 406,056 | ||||||||||||||
| Impairments of inventories | 2,113 | — | 5,921 | 2,113 | 31,151 | ||||||||||||||
| Impairments of fixed and lease assets | — | 2,794 | — | 3,444 | 8,190 | ||||||||||||||
| Interest expense, net | 2,569 | 2,699 | 3,549 | 7,593 | 11,232 | ||||||||||||||
| Gains on extinguishment of 1.50% convertible senior notes | — | (385 | ) | (5,942 | ) | (4,022 | ) | (10,721 | ) | ||||||||||
| Consolidated EBITDA | 7,768 | 7,520 | 134 | 18,019 | 17,518 | ||||||||||||||
| Severance and restructuring charges | 737 | 2,554 | 288 | 6,709 | 6,345 | ||||||||||||||
| Adjusted Consolidated EBITDA | $ | 8,505 | $ | 10,074 | $ | 422 | $ | 24,728 | $ | 23,863 | |||||||||
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(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, gains on extinguishment of 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 depreciation and amortization expense, non-cash asset impairment charges, 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 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.
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.
