HOUSTON, July 27, 2022 (GLOBE NEWSWIRE) -- Oil States International, Inc. (NYSE: OIS) reported a net loss of $5.1 million, or $0.08 per share, for the second quarter of 2022. During the second quarter of 2022, the Company generated revenues of $181.8 million and Consolidated EBITDA (Note A) of $17.0 million. These results compare to revenues of $164.0 million and Consolidated EBITDA of $14.5 million reported in the first quarter of 2022.
Second quarter 2022 highlights included:
- Consolidated revenues and EBITDA increased 11% and 17% sequentially
- Well Site Services revenues and EBITDA increased 14% and 61%, respectively from the first quarter
- Offshore/Manufactured Products revenues increased 15% sequentially
- Offshore/Manufactured Products acquired E-Flow Holdings Limited – a U.K.-based global provider of complimentary integrated handling, control, monitoring and instrumentation solutions – for cash consideration totaling $8 million
- Received two 2022 Spotlight on New Technology® Awards from the Offshore Technology Conference for our Managed Pressure Drilling and Riser Gas Handling System and our Merlin™ 15K High-Pressure, High-Temperature Riser System
- Purchased $6.5 million in principal amount of our 1.50% convertible senior notes
- Agreed to settle the promissory note payable and related outstanding legal disputes with the seller of GEODynamics, Inc. in exchange for the payment of $10.0 million and issuance of approximately 1.9 million shares of the Company's common stock on July 1, 2022. The final settlement will be recorded in the third quarter of 2022
Oil States' President and Chief Executive Officer, Cindy B. Taylor, stated,
"With improving industry fundamentals and our continuous focus on capital and cost discipline, consolidated revenues and EBITDA grew sequentially for a third consecutive quarter totaling $181.8 million and $17.0 million, respectively, in the second quarter.
"Revenues reported by our Offshore/Manufactured Products segment increased 15% from the first quarter of 2022 – driven by a 21% increase in project-driven revenues coupled with higher demand for short-cycle products. Segment EBITDA for our Offshore/Manufactured Products segment totaled $14.7 million. Backlog totaled $241 million as of June 30, with quarterly bookings of $77 million, yielding a quarterly book-to-bill ratio of 0.8x for the second quarter and 0.9x year-to-date.
"Our Well Site Services segment revenues increased 14% sequentially driven by higher land-based completion and production activity. Segment EBITDA increased $3.4 million, or 61%, from the prior quarter to $8.9 million, reflecting revenue growth and improved fixed cost coverage.
"Second quarter revenues in our Downhole Technologies segment decreased 4% from the first quarter, due to a transitory reduction in customer demand for perforating products internationally. Our Downhole Technologies segment reported Segment EBITDA of $2.9 million.
"In the second quarter, our investments in technology and innovation were again recognized by the Offshore Technology Conference, with two 2022 Spotlight on New Technology® Awards for our Managed Pressure Drilling and Riser Gas Handling System and our Merlin™ 15K High-Pressure, High-Temperature Riser System. Additionally, during the quarter OSI Renewables™ introduced the most recent addition to our growing portfolio of new technologies for the offshore wind energy market – a Fixed Tension Leg Platform floating wind solution that leverages our deepwater expertise.
"Finally, we are pleased to announce that we settled the promissory note and resolved outstanding legal disputes with the seller of GEODynamics."
BUSINESS SEGMENT RESULTS
(See Segment Data tables)
Offshore/Manufactured Products
Offshore/Manufactured Products reported revenues of $96.5 million and Segment EBITDA of $14.7 million in the second quarter of 2022, compared to revenues of $84.1 million and Segment EBITDA of $15.6 million reported in the first quarter of 2022. Revenues increased 15% sequentially, driven primarily by a 21% increase in project-driven revenues and higher customer demand for short-cycle products, while margins declined due to a shift in product mix from the first quarter of 2022. Segment EBITDA margin in the second quarter of 2022 was 15%, compared to 19% in the first quarter of 2022.
On April 14, 2022, the segment acquired E-Flow Control Holdings Limited ("E-Flow"), a U.K.-based global provider of complimentary integrated handling, control, monitoring and instrumentation solutions. The purchase price of $8.1 million was funded with cash on-hand.
Backlog totaled $241 million as of June 30, 2022, a 9% sequential decrease from March 31, 2022. Second quarter 2022 bookings totaled $77 million, yielding a quarterly book-to-bill ratio of 0.8x and a year-to-date ratio of 0.9x.
Well Site Services
Well Site Services reported revenues of $54.8 million and Segment EBITDA of $8.9 million in the second quarter of 2022, compared to revenues of $48.2 million and Segment EBITDA of $5.5 million reported in the first quarter of 2022. Segment EBITDA margin in the second quarter of 2022 was 16%, compared to 11% in the first quarter of 2022.
Downhole Technologies
Downhole Technologies reported revenues of $30.5 million and Segment EBITDA of $2.9 million in the second quarter of 2022, compared to revenues of $31.8 million and Segment EBITDA of $2.9 million reported in the first quarter of 2022. Segment EBITDA margin was 9% in both the second and first quarters of 2022.
Corporate
Corporate expenses in the second quarter of 2022 totaled $9.6 million, which included $0.6 million of non-cash costs associated with the settlement of legal disputes with the seller of GEODynamics, Inc.
Interest Expense, Net
Net interest expense totaled $2.6 million in the second quarter of 2022, which included $0.5 million of non-cash amortization of deferred debt issuance costs.
Income Taxes
The Company recognized tax expense of $1.8 million on a pre-tax loss of $3.4 million during the second quarter of 2022. In the first quarter of 2022, the Company recognized a tax expense of $3.4 million on a pre-tax loss of $6.0 million. Income tax expense in the first and second quarters of 2022 included the impact of valuation allowances recorded against the Company's deferred tax assets as well as certain non-deductible expenses and discrete tax items.
Financial Condition
No borrowings were outstanding under the Company's asset-based revolving credit facility (the "ABL Facility") at June 30, 2022. Cash on-hand declined from $39.2 million at March 31, 2022 to $22.2 million at June 30, 2022 reflecting the Company's second quarter acquisition of E-Flow and purchases of $6.5 million in principal amount of its 1.5% convertible senior notes due February 2023. Liquidity (cash plus borrowing availability) totaled $84.1 million at June 30, 2022, with amounts available to be drawn under the ABL Facility totaling $61.8 million.
Additionally, on June 28, 2022, the Company agreed to pay $10.0 million and issue approximately 1.9 million shares of its common stock (having a market value of $10.3 million on July 1, 2022) to settle the promissory note payable (together with related accrued interest) and resolve outstanding legal disputes with the seller of GEODynamics, Inc. The cash payment and issuance of shares of common stock of the Company were made on July 1, 2022 and will be recorded in the third quarter of 2022.
The Company's total debt represented 20% and 21% of combined total debt and stockholders' equity as of June 30, 2022 and March 31, 2022, respectively.
Conference Call Information
The call is scheduled for July 28, 2022 at 10:00 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 (866) 374-5140 in the United States or by dialing +1 (404) 400-0571 internationally and using the passcode 40967423#. 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, geopolitical tensions, regulatory pressures related to environmental, social and governance considerations 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, 2021 and the subsequently filed Quarterly Report on Form 10-Q and 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
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts)
| Three Months Ended | Six Months Ended | ||||||||||||||||||
| June 30, 2022 | March 31, 2022 | June 30, 2021 | June 30, 2022 | June 30, 2021 | |||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||
| Revenues: | |||||||||||||||||||
| Products | $ | 99,033 | $ | 85,761 | $ | 78,038 | $ | 184,794 | $ | 139,483 | |||||||||
| Services | 82,801 | 78,283 | 67,686 | 161,084 | 131,830 | ||||||||||||||
| 181,834 | 164,044 | 145,724 | 345,878 | 271,313 | |||||||||||||||
| Costs and expenses: | |||||||||||||||||||
| Product costs | 79,388 | 64,801 | 63,926 | 144,189 | 113,389 | ||||||||||||||
| Service costs | 62,768 | 61,803 | 53,706 | 124,571 | 106,553 | ||||||||||||||
| Cost of revenues (exclusive of depreciation and amortization expense presented below) | 142,156 | 126,604 | 117,632 | 268,760 | 219,942 | ||||||||||||||
| Selling, general and administrative expense | 23,757 | 23,833 | 22,092 | 47,590 | 43,317 | ||||||||||||||
| Depreciation and amortization expense | 17,239 | 17,817 | 20,909 | 35,056 | 42,429 | ||||||||||||||
| Impairments of fixed and lease assets | — | — | 2,794 | — | 3,444 | ||||||||||||||
| Other operating (income) expense, net | (228 | ) | 126 | (85 | ) | (102 | ) | (439 | ) | ||||||||||
| 182,924 | 168,380 | 163,342 | 351,304 | 308,693 | |||||||||||||||
| Operating loss | (1,090 | ) | (4,336 | ) | (17,618 | ) | (5,426 | ) | (37,380 | ) | |||||||||
| Interest expense, net | (2,638 | ) | (2,672 | ) | (2,699 | ) | (5,310 | ) | (5,024 | ) | |||||||||
| Other income, net(1) | 376 | 1,025 | 1,820 | 1,401 | 5,780 | ||||||||||||||
| Loss before income taxes | (3,352 | ) | (5,983 | ) | (18,497 | ) | (9,335 | ) | (36,624 | ) | |||||||||
| Income tax (provision) benefit | (1,792 | ) | (3,441 | ) | 3,226 | (5,233 | ) | 5,543 | |||||||||||
| Net loss | $ | (5,144 | ) | $ | (9,424 | ) | $ | (15,271 | ) | $ | (14,568 | ) | $ | (31,081 | ) | ||||
| Net loss per share: | |||||||||||||||||||
| Basic | $ | (0.08 | ) | $ | (0.16 | ) | $ | (0.25 | ) | $ | (0.24 | ) | $ | (0.52 | ) | ||||
| Diluted | (0.08 | ) | (0.16 | ) | (0.25 | ) | (0.24 | ) | (0.52 | ) | |||||||||
| Weighted average number of common shares outstanding: | |||||||||||||||||||
| Basic | 60,704 | 60,498 | 60,317 | 60,601 | 60,207 | ||||||||||||||
| Diluted | 60,704 | 60,498 | 60,317 | 60,601 | 60,207 | ||||||||||||||
________________
(1) Other income (expense), net included non-cash gains of $0.4 million and $4.0 million, respectively, in the three and six months ended June 30, 2021 recognized in connection with purchases of $6.4 million and $131.4 million, respectively, principal amount of the 2023 Notes.
OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands)
| June 30, 2022 | December 31, 2021 | ||||||
| (Unaudited) | |||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 22,246 | $ | 52,852 | |||
| Accounts receivable, net | 204,387 | 186,080 | |||||
| Inventories, net | 179,819 | 168,573 | |||||
| Prepaid expenses and other current assets | 19,682 | 19,222 | |||||
| Total current assets | 426,134 | 426,727 | |||||
| Property, plant, and equipment, net | 314,898 | 338,583 | |||||
| Operating lease assets, net | 24,843 | 25,388 | |||||
| Goodwill, net | 79,485 | 76,412 | |||||
| Other intangible assets, net | 179,591 | 185,749 | |||||
| Other noncurrent assets | 27,352 | 32,889 | |||||
| Total assets | $ | 1,052,303 | $ | 1,085,748 | |||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
| Current liabilities: | |||||||
| Current portion of long-term debt | $ | 37,595 | $ | 18,262 | |||
| Accounts payable | 54,738 | 63,343 | |||||
| Accrued liabilities | 46,344 | 43,401 | |||||
| Current operating lease liabilities | 6,046 | 6,481 | |||||
| Income taxes payable | 3,163 | 2,564 | |||||
| Deferred revenue | 47,883 | 43,236 | |||||
| Total current liabilities | 195,769 | 177,287 | |||||
| Long-term debt | 134,871 | 160,488 | |||||
| Long-term operating lease liabilities | 22,703 | 23,452 | |||||
| Deferred income taxes | 6,510 | 3,637 | |||||
| Other noncurrent liabilities | 20,509 | 25,058 | |||||
| Total liabilities | 380,362 | 389,922 | |||||
| Stockholders' equity: | |||||||
| Common stock | 747 | 739 | |||||
| Additional paid-in capital | 1,108,631 | 1,105,135 | |||||
| Retained earnings | 266,999 | 281,567 | |||||
| Accumulated other comprehensive loss | (77,850 | ) | (66,031 | ) | |||
| Treasury stock | (626,586 | ) | (625,584 | ) | |||
| Total stockholders' equity | 671,941 | 695,826 | |||||
| Total liabilities and stockholders' equity | $ | 1,052,303 | $ | 1,085,748 | |||
OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
| Six Months Ended June 30, | |||||||
| 2022 | 2021 | ||||||
| (Unaudited) | |||||||
| Cash flows from operating activities: | |||||||
| Net loss | $ | (14,568 | ) | $ | (31,081 | ) | |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||
| Depreciation and amortization expense | 35,056 | 42,429 | |||||
| Settlement of disputes with seller of GEODynamics, Inc. | 620 | — | |||||
| Impairments of fixed and lease assets | — | 3,444 | |||||
| Stock-based compensation expense | 3,504 | 4,703 | |||||
| Amortization of debt discount and deferred financing costs | 944 | 1,366 | |||||
| Deferred income tax provision (benefit) | 2,584 | (6,834 | ) | ||||
| Gains on extinguishment of 1.50% convertible senior notes | (157 | ) | (4,022 | ) | |||
| Gains on disposals of assets | (1,185 | ) | (1,632 | ) | |||
| Other, net | 517 | 375 | |||||
| Changes in operating assets and liabilities, net of effect from acquired business: | |||||||
| Accounts receivable | (20,469 | ) | (6,962 | ) | |||
| Inventories | (14,664 | ) | (4,458 | ) | |||
| Accounts payable and accrued liabilities | (5,994 | ) | 11,896 | ||||
| Deferred revenue | 4,647 | 1,780 | |||||
| Other operating assets and liabilities, net | (870 | ) | 2,929 | ||||
| Net cash flows provided by (used in) operating activities | (10,035 | ) | 13,933 | ||||
| Cash flows from investing activities: | |||||||
| Capital expenditures | (6,453 | ) | (7,311 | ) | |||
| Proceeds from disposition of property and equipment | 1,652 | 3,422 | |||||
| Acquisition of business, net of cash acquired | (8,125 | ) | — | ||||
| Other, net | (85 | ) | (326 | ) | |||
| Net cash flows used in investing activities | (13,011 | ) | (4,215 | ) | |||
| Cash flows from financing activities: | |||||||
| Revolving credit facility borrowings | 9,725 | 12,571 | |||||
| Revolving credit facility repayments | (9,725 | ) | (31,571 | ) | |||
| Issuance of 4.75% convertible senior notes | — | 135,000 | |||||
| Purchases of 1.50% convertible senior notes | (6,272 | ) | (125,952 | ) | |||
| Other debt and finance lease activity, net | (359 | ) | 119 | ||||
| Payment of financing costs | (74 | ) | (7,779 | ) | |||
| Shares added to treasury stock as a result of net share settlements due to vesting of stock awards | (1,002 | ) | (1,500 | ) | |||
| Net cash flows used in financing activities | (7,707 | ) | (19,112 | ) | |||
| Effect of exchange rate changes on cash and cash equivalents | 147 | 33 | |||||
| Net change in cash and cash equivalents | (30,606 | ) | (9,361 | ) | |||
| Cash and cash equivalents, beginning of period | 52,852 | 72,011 | |||||
| Cash and cash equivalents, end of period | $ | 22,246 | $ | 62,650 | |||
| Cash paid for: | |||||||
| Interest | $ | 4,105 | $ | 2,256 | |||
| Income taxes, net | 291 | 920 | |||||
OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES
SEGMENT DATA
(In Thousands)
(unaudited)
| Three Months Ended | Six Months Ended | ||||||||||||||||||
| June 30, 2022 | March 31, 2022(2) | June 30, 2021(3) | June 30, 2022(4) | June 30, 2021(5) | |||||||||||||||
| Revenues: | |||||||||||||||||||
| Offshore/Manufactured Products(1): | |||||||||||||||||||
| Project-driven products | $ | 41,098 | $ | 33,844 | $ | 31,826 | $ | 74,942 | $ | 53,200 | |||||||||
| Short-cycle products | 23,611 | 20,624 | 16,030 | 44,235 | 28,280 | ||||||||||||||
| Other products and services | 31,758 | 29,644 | 29,052 | 61,402 | 56,037 | ||||||||||||||
| Total Offshore/Manufactured Products | 96,467 | 84,112 | 76,908 | 180,579 | 137,517 | ||||||||||||||
| Well Site Services | 54,819 | 48,172 | 42,056 | 102,991 | 81,606 | ||||||||||||||
| Downhole Technologies | 30,548 | 31,760 | 26,760 | 62,308 | 52,190 | ||||||||||||||
| Total revenues | $ | 181,834 | $ | 164,044 | $ | 145,724 | $ | 345,878 | $ | 271,313 | |||||||||
| Operating income (loss): | |||||||||||||||||||
| Offshore/Manufactured Products | $ | 9,441 | $ | 10,196 | $ | 4,810 | $ | 19,637 | $ | 5,881 | |||||||||
| Well Site Services | 601 | (3,395 | ) | (11,590 | ) | (2,794 | ) | (21,443 | ) | ||||||||||
| Downhole Technologies | (1,485 | ) | (1,505 | ) | (2,295 | ) | (2,990 | ) | (3,910 | ) | |||||||||
| Corporate | (9,647 | ) | (9,632 | ) | (8,543 | ) | (19,279 | ) | (17,908 | ) | |||||||||
| Total operating loss | $ | (1,090 | ) | $ | (4,336 | ) | $ | (17,618 | ) | $ | (5,426 | ) | $ | (37,380 | ) | ||||
________________
(1) Disaggregated revenue data is provided to supplement the Segment Data.
(2) Operating income (loss) for the three months ended March 31, 2022 included $0.8 million of bad debt expense on receivables from Russia-based customers within the Offshore/Manufactured Products segment.
(3) Operating income (loss) for the three months ended June 30, 2021 included non-cash operating lease asset impairment charges of $2.8 million and restructuring charges of $2.4 million related to the Well Site Services segment. In the Downhole Technologies segment, operating income (loss) included $0.2 million of restructuring charges.
(4) Operating income (loss) for the six months ended June 30, 2022 included $0.8 million of bad debt expense on receivables from Russia-based customers within the Offshore/Manufactured Products segment.
(5) Operating income (loss) for the six months ended June 30, 2021 included $0.3 million of severance and restructuring charges related to the Offshore/Manufactured Products segment. 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 $3.7 million. In the Downhole Technologies segment, operating income (loss) included severance and restructuring charges of $0.5 million. In Corporate, operating income (loss) included $1.6 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 | Six Months Ended | ||||||||||||||||||
| June 30, 2022 | March 31, 2022 | June 30, 2021 | June 30, 2022 | June 30, 2021 | |||||||||||||||
| Offshore/Manufactured Products: | |||||||||||||||||||
| Operating income | $ | 9,441 | $ | 10,196 | $ | 4,810 | $ | 19,637 | $ | 5,881 | |||||||||
| Other income (expense), net | 45 | 41 | (70 | ) | 86 | (132 | ) | ||||||||||||
| Depreciation and amortization expense | 5,249 | 5,330 | 5,557 | 10,579 | 11,026 | ||||||||||||||
| Segment EBITDA | 14,735 | 15,567 | 10,297 | 30,302 | 16,775 | ||||||||||||||
| Severance and restructuring charges | — | — | — | — | 282 | ||||||||||||||
| Adjusted Segment EBITDA | $ | 14,735 | $ | 15,567 | $ | 10,297 | $ | 30,302 | $ | 17,057 | |||||||||
| Well Site Services: | |||||||||||||||||||
| Operating income (loss) | $ | 601 | $ | (3,395 | ) | $ | (11,590 | ) | $ | (2,794 | ) | $ | (21,443 | ) | |||||
| Other income | 878 | 986 | 1,505 | 1,864 | 1,892 | ||||||||||||||
| Depreciation and amortization expense | 7,395 | 7,932 | 10,642 | 15,327 | 22,110 | ||||||||||||||
| Impairment of fixed and lease assets | — | — | 2,794 | — | 3,444 | ||||||||||||||
| Segment EBITDA | 8,874 | 5,523 | 3,351 | 14,397 | 6,003 | ||||||||||||||
| Severance and restructuring charges | — | — | 2,351 | — | 3,657 | ||||||||||||||
| Adjusted Segment EBITDA | $ | 8,874 | $ | 5,523 | $ | 5,702 | $ | 14,397 | $ | 9,660 | |||||||||
| Downhole Technologies: | |||||||||||||||||||
| Operating loss | $ | (1,485 | ) | $ | (1,505 | ) | $ | (2,295 | ) | $ | (2,990 | ) | $ | (3,910 | ) | ||||
| Other expense, net | (84 | ) | (2 | ) | — | (86 | ) | (2 | ) | ||||||||||
| Depreciation and amortization expense | 4,423 | 4,384 | 4,521 | 8,807 | 8,910 | ||||||||||||||
| Segment EBITDA | 2,854 | 2,877 | 2,226 | 5,731 | 4,998 | ||||||||||||||
| Severance and restructuring charges | — | — | 203 | — | 478 | ||||||||||||||
| Adjusted Segment EBITDA | $ | 2,854 | $ | 2,877 | $ | 2,429 | $ | 5,731 | $ | 5,476 | |||||||||
| Corporate: | |||||||||||||||||||
| Operating loss | $ | (9,647 | ) | $ | (9,632 | ) | $ | (8,543 | ) | $ | (19,279 | ) | $ | (17,908 | ) | ||||
| Other income (expense), net | (463 | ) | — | 385 | (463 | ) | 4,022 | ||||||||||||
| Depreciation and amortization expense | 172 | 171 | 189 | 343 | 383 | ||||||||||||||
| Settlement of disputes with seller of GEODynamics, Inc. | 620 | — | — | 620 | — | ||||||||||||||
| Gains on extinguishment of 1.50% convertible senior notes | (157 | ) | — | (385 | ) | (157 | ) | (4,022 | ) | ||||||||||
| EBITDA | (9,475 | ) | (9,461 | ) | (8,354 | ) | (18,936 | ) | (17,525 | ) | |||||||||
| Severance charges | — | — | — | — | 1,555 | ||||||||||||||
| Adjusted EBITDA | $ | (9,475 | ) | $ | (9,461 | ) | $ | (8,354 | ) | $ | (18,936 | ) | $ | (15,970 | ) | ||||
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 | Six Months Ended | ||||||||||||||||||
| June 30, 2022 | March 31, 2022 | June 30, 2021 | June 30, 2022 | June 30, 2021 | |||||||||||||||
| Net loss | $ | (5,144 | ) | $ | (9,424 | ) | $ | (15,271 | ) | $ | (14,568 | ) | $ | (31,081 | ) | ||||
| Interest expense, net | 2,638 | 2,672 | 2,699 | 5,310 | 5,024 | ||||||||||||||
| Income tax provision (benefit) | 1,792 | 3,441 | (3,226 | ) | 5,233 | (5,543 | ) | ||||||||||||
| Depreciation and amortization expense | 17,239 | 17,817 | 20,909 | 35,056 | 42,429 | ||||||||||||||
| Impairments of fixed and lease assets | — | — | 2,794 | — | 3,444 | ||||||||||||||
| Settlement of disputes with seller of GEODynamics, Inc. | 620 | — | — | 620 | — | ||||||||||||||
| Gains on extinguishment of 1.50% convertible senior notes | (157 | ) | — | (385 | ) | (157 | ) | (4,022 | ) | ||||||||||
| Consolidated EBITDA | 16,988 | 14,506 | 7,520 | 31,494 | 10,251 | ||||||||||||||
| Severance and restructuring charges | — | — | 2,554 | — | 5,972 | ||||||||||||||
| Adjusted Consolidated EBITDA | $ | 16,988 | $ | 14,506 | $ | 10,074 | $ | 31,494 | $ | 16,223 | |||||||||
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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, and certain non-cash charges, less gains on extinguishment of 1.50% convertible senior notes (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 other income (expense), depreciation and amortization expense, and certain non-cash charges, less 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 supplemental disclosures 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.
