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Feb 17, 2021

Oil States Announces Fourth Quarter 2020 Results of Operations

HOUSTON, Feb. 17, 2021 (GLOBE NEWSWIRE) -- Oil States International, Inc. (NYSE: OIS) reported a net loss for the fourth quarter of 2020 of $18.7 million, or $0.31 per share, which included non-cash asset impairment charges of $4.3 million ($3.4 million after-tax, or $0.06 per share) and severance and restructuring charges of $2.7 million ($2.2 million after-tax, or $0.04 per share).

During the fourth quarter of 2020, the Company generated revenues of $137.4 million and Adjusted Consolidated EBITDA (Note A) of $2.2 million (excluding $2.7 million of severance and restructuring charges). These results compare to revenues of $134.8 million and Adjusted Consolidated EBITDA of $0.4 million reported in the third quarter of 2020 (excluding $0.3 million of severance and restructuring charges).

Fourth quarter 2020 highlights and corporate actions included:

  • Negotiated a new asset-based credit facility providing for borrowings of up to $125 million, which closed on February 10, 2021
  • Implemented additional long-term cost reduction measures, including facility consolidations and closures, resulting in $4.3 million in non-cash fixed asset and lease impairment charges and $2.7 million in severance and restructuring charges
  • Positive Segment EBITDA (Note B) reported by each operating segment
  • Offshore/Manufactured Products segment received two notable project awards exceeding $10 million each

Oil States' President and Chief Executive Officer, Cindy B. Taylor, stated, "Our fourth quarter results began to show improvement with expanding U.S. land-based completion activity.

"Accordingly, operating results for our Downhole Technologies and Well Site Services segments improved sequentially boosted by improved commodity prices and operator activity coupled with the benefit of substantial cost reduction measures implemented during 2020. Fourth quarter revenues in our Downhole Technologies segment increased 24% sequentially, driven by higher demand for its proprietary completion and perforating products. Our Downhole Technologies segment reported Adjusted Segment EBITDA of $2.0 million in the fourth quarter, with 68% incremental Adjusted Segment EBITDA margins. Our Well Site Services segment revenues increased 3% sequentially despite the seasonal fourth quarter decline in operator flowback activity in the Northeastern United States. Excluding the Northeast region, Well Site Services revenues in the fourth quarter of 2020 rose 20% from the prior-quarter level. Well Site Services' Adjusted Segment EBITDA improved $1.7 million sequentially in the fourth quarter of 2020.

"Revenues in our Offshore/Manufactured Products segment, which is a later stage business, declined 4% sequentially, due primarily to weaker connector product sales. Our fourth quarter bookings totaled $65 million, including two notable project awards exceeding $10 million each, yielding a quarterly book-to-bill ratio of 0.9x. Backlog in our Offshore/Manufactured Products segment totaled $219 million as of December 31, 2020, down 4% from the prior-quarter end.

"In 2020, we generated $133 million of cash flow from operations, which was used to repay debt. With our significant free cash flow, we materially delevered during the year, reducing our total net debt by $128 million. We entered into a new $125 million asset-based bank credit facility on February 10, 2021, which together with cash on-hand provides us with ample liquidity to respond to challenges which may arise from future changes in the energy industry landscape. Our management team will continue to align our global operations to efficiently and effectively serve our customers’ technically challenging requirements, while diligently managing our costs and operating assets."

For the year ended December 31, 2020, the Company reported a net loss of $468.4 million, or $7.83 per share, revenues of $638.1 million and Adjusted Consolidated EBITDA of $26.1 million. The full-year 2020 results included: non-cash impairment charges of $449.7 million ($421.5 million after-tax, or $7.04 per share) related to write-downs of goodwill, inventories and fixed and lease assets; severance and restructuring charges of $9.1 million ($7.2 million after-tax, or $0.12 per share); non-cash gains of $10.7 million ($8.5 million after-tax, or $0.14 per share) associated with debt extinguishments; and discrete tax benefits of $16.4 million, or $0.27 per share, associated with the carryback of tax losses allowed under the CARES Act. After excluding these charges and credits, the Company’s adjusted net loss was $64.6 million, or $1.08 per share.

BUSINESS SEGMENT RESULTS

(See Segment Data Tables)

Offshore/Manufactured Products

Offshore/Manufactured Products reported revenues of $75.5 million and Adjusted Segment EBITDA (Note B) of $7.5 million in the fourth quarter of 2020, compared to revenues of $78.7 million and Adjusted Segment EBITDA of $9.7 million in the third quarter of 2020. Revenues decreased 4% sequentially, with a reduction in sales of our connector products partially offset by increased production product revenues. Adjusted Segment EBITDA margin (defined as Adjusted Segment EBITDA divided by segment revenues) was 10% in the fourth quarter of 2020, compared to an Adjusted Segment EBITDA margin of 12% realized in the third quarter of 2020.

Backlog totaled $219 million as of December 31, 2020, a decrease of 4% sequentially and 22% year-over-year. Fourth quarter 2020 bookings totaled $65 million, yielding a book-to-bill ratio of 0.9x for the quarter.

Downhole Technologies

Downhole Technologies reported revenues of $23.2 million and Adjusted Segment EBITDA of $2.0 million in the fourth quarter of 2020, compared to revenues of $18.7 million and an Adjusted Segment EBITDA loss of $1.0 million in the third quarter of 2020. Fourth quarter results improved sequentially due to an increase in customer activity and the benefit of cost control measures implemented in 2020. In connection with the consolidation and closure of certain facilities, the segment recorded non-cash fixed asset and lease impairment charges totaling $3.6 million in the fourth quarter of 2020.

Well Site Services

Well Site Services reported revenues of $38.7 million and Adjusted Segment EBITDA of $1.4 million in the fourth quarter of 2020, compared to revenues of $37.4 million and an Adjusted Segment EBITDA loss of $0.3 million in the third quarter of 2020. Included in the third quarter 2020 results for the Completion Services business were $1.2 million of expenses associated with prior-year insurance claims and a bad debt provision on a receivable from a customer claiming bankruptcy protection. During the fourth quarter of 2020, the segment recorded a non-cash fixed asset impairment charge of $0.7 million.

Corporate

Corporate expenses in the fourth quarter of 2020 totaled $10.1 million, which included $1.2 million in severance costs.

Interest Expense, Net

The Company reported net interest expense of $2.6 million in the fourth quarter of 2020, which included $1.8 million of non-cash amortization of debt discount and deferred financing costs.

Effective January 1, 2021, the Company adopted the recently revised guidance simplifying the accounting for convertible instruments, which eliminates the historical requirement that the carrying value of our convertible debt be allocated between debt and equity. Adoption of the standard in 2021 resulted in an increase in the net carrying value of the Company's 1.50% convertible senior notes, a decrease in stockholders' equity and a reduction in the reported level of interest expense recognized over the remaining life of the notes.

Income Taxes

The Company recognized an effective tax rate benefit of 38.8% in the fourth quarter of 2020, which compared to an effective tax rate benefit of 27.8% in the third quarter of 2020.

Financial Condition

As of December 31, 2020, $19.0 million was outstanding under the Company’s revolving credit facility, while cash on-hand totaled $72.0 million. The Company's total debt represented 20% of combined total debt and stockholders' equity as of December 31, 2020.

On February 10, 2021, the Company entered into a new $125 million asset-based revolving credit facility, which matures in February of 2025. Borrowing availability is subject to a monthly borrowing base calculation. The initial borrowing base under the asset-based facility was approximately $71 million.

Conference Call Information

The call is scheduled for Thursday, February 18, 2021 at 9:00 a.m. Central 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 50092279. 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 oil and natural gas, 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 our Company and our customers, and the other risks associated with the general nature of the energy service industry discussed in the "Business" and "Risk Factors" sections of the Company’s Annual Report on Form 10‑K for the year ended December 31, 2019, 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

CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts)

  Three Months Ended   Year Ended December 31,
  December 31,
2020
  September 30,
2020
  December 31,
2019
  2020   2019
  (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)    
Revenues:                  
Products $ 73,051     $ 72,598     $ 119,999     $ 331,272     $ 483,359  
Services 64,326     62,161     118,362     306,803     533,995  
  137,377     134,759     238,361     638,075     1,017,354  
                   
Costs and expenses:                  
Product costs 62,992     66,789     93,841     287,615     369,194  
Service costs 52,517     53,822     99,668     274,190     433,395  
Cost of revenues (exclusive of depreciation and amortization expense presented below)(1) 115,509     120,611     193,509     561,805     802,589  
Selling, general and administrative expenses 22,597     21,389     29,405     94,102     122,932  
Depreciation and amortization expense 23,237     24,251     28,519     98,543     123,319  
Impairments of goodwill         165,000     406,056     165,000  
Impairments of fixed and lease assets 4,257             12,447     33,697  
Other operating (income) expense, net 141     (652 )   (2,037 )   (538 )   (2,003 )
  165,741     165,599     414,396     1,172,415     1,245,534  
Operating loss (28,364 )   (30,840 )   (176,035 )   (534,340 )   (228,180 )
                   
Interest expense, net (2,637 )   (3,549 )   (3,915 )   (13,869 )   (17,636 )
Other income, net(2) 368     6,744     2,223     13,880     5,089  
Loss before income taxes (30,633 )   (27,645 )   (177,727 )   (534,329 )   (240,727 )
Income tax benefit 11,886     7,676     2,175     65,946     8,919  
Net loss $ (18,747 )   $ (19,969 )   $ (175,552 )   $ (468,383 )   $ (231,808 )
                   
Net loss per share from:                  
Basic $ (0.31 )   $ (0.33 )   $ (2.95 )   $ (7.83 )   $ (3.90 )
Diluted $ (0.31 )   $ (0.33 )   $ (2.95 )   $ (7.83 )   $ (3.90 )
                   
Weighted average number of common shares outstanding:                
Basic 59,885     59,871     59,431     59,812     59,379  
Diluted 59,885     59,871     59,431     59,812     59,379  

________________

(1)


Cost of revenues (exclusive of depreciation and amortization expense) included a non-cash inventory impairment charge of $5.9 million (in product costs) recognized in the third quarter of 2020. For the year ended December 31 2020, cost of revenues (exclusive of depreciation and amortization expense) included non-cash inventory impairment charges of $31.2 million ($17.9 million in product costs and $13.3 million in service costs).
   
(2)


Other income, net included non-cash gains of $5.9 million recognized in connection with the purchases of $17.2 million principal amount of the 1.50% convertible senior notes in the third quarter of 2020. For the year ended December 31 2020, other income, net included non-cash gains totaling $10.7 million recognized in connection with the purchases of $34.9 million principal amount of the 1.50% convertible senior notes.
   


OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(In Thousands)

  December 31
  2020   2019
  (Unaudited)    
ASSETS      
Current assets:      
Cash and cash equivalents $ 72,011     $ 8,493  
Accounts receivable, net 163,135     233,487  
Inventories, net 170,376     221,342  
Prepaid expenses and other current assets 18,071     20,107  
Total current assets 423,593     483,429  
       
Property, plant and equipment, net 383,562     459,724  
Operating lease assets, net 33,140     43,616  
Goodwill, net 76,489     482,306  
Other intangible assets, net 205,749     230,091  
Other noncurrent assets 29,727     28,701  
Total assets $ 1,152,260     $ 1,727,867  
       
LIABILITIES AND STOCKHOLDERS’ EQUITY      
Current liabilities:      
Current portion of long-term debt $ 17,778     $ 25,617  
Accounts payable 46,433     78,368  
Accrued liabilities 44,504     48,840  
Current operating lease liabilities 7,620     8,311  
Income taxes payable 2,413     4,174  
Deferred revenue 43,384     17,761  
Total current liabilities 162,132     183,071  
       
Long-term debt 165,759     222,552  
Long-term operating lease liabilities 29,166     35,777  
Deferred income taxes 14,263     38,079  
Other noncurrent liabilities 23,309     24,421  
Total liabilities 394,629     503,900  
       
Stockholders' equity:      
Common stock 733     726  
Additional paid-in capital 1,122,945     1,114,521  
Retained earnings 329,327     797,710  
Accumulated other comprehensive loss (71,385 )   (67,746 )
Treasury stock, at cost (623,989 )   (621,244 )
Total stockholders' equity 757,631     1,223,967  
Total liabilities and stockholders' equity $ 1,152,260     $ 1,727,867  


OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)

  Year Ended December 31,
  2020   2019
  (Unaudited)    
Cash flows from operating activities:      
Net loss $ (468,383 )   $ (231,808 )
Adjustments to reconcile net loss to net cash provided by operating activities:      
Depreciation and amortization expense 98,543     123,319  
Impairments of goodwill 406,056     165,000  
Impairments of inventories 31,151      
Impairments of fixed and lease assets 12,447     33,697  
Stock-based compensation expense 8,431     16,768  
Amortization of debt discount and deferred financing costs 7,736     7,884  
Deferred income tax benefit (24,404 )   (15,469 )
Gains on extinguishment of 1.50% convertible senior notes (10,721 )    
Gains on disposals of assets (2,444 )   (4,291 )
Other, net 4,668     3,079  
Changes in operating assets and liabilities:      
Accounts receivable 63,876     50,257  
Inventories 17,578     (10,774 )
Accounts payable and accrued liabilities (37,315 )   (6,173 )
Deferred revenue 25,549     3,470  
Other operating assets and liabilities, net (13 )   2,473  
Net cash flows provided by operating activities 132,755     137,432  
       
Cash flows from investing activities:      
Capital expenditures (12,749 )   (56,116 )
Proceeds from disposition of property, plant and equipment 9,601     6,046  
Other, net (581 )   (1,912 )
Net cash flows used in investing activities (3,729 )   (51,982 )
       
Cash flows from financing activities:      
Revolving credit facility borrowings 72,173     246,828  
Revolving credit facility repayments (105,104 )   (331,041 )
Purchases of 1.50% convertible senior notes (20,078 )   (6,724 )
Other debt and finance lease repayments, net (8,222 )   (500 )
Payment of financing costs (1,041 )   (16 )
Shares added to treasury stock as a result of net share settlements due to vesting of restricted stock (2,745 )   (3,698 )
Purchases of treasury stock     (757 )
Net cash flows used in financing activities (65,017 )   (95,908 )
       
Effect of exchange rate changes on cash and cash equivalents (491 )   (365 )
Net change in cash and cash equivalents 63,518     (10,823 )
Cash and cash equivalents, beginning of year 8,493     19,316  
Cash and cash equivalents, end of year $ 72,011     $ 8,493  
       
Cash paid (received) for:      
Interest $ 6,402     $ 9,626  
Income taxes, net (36,766 )   (1,303 )


OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES

SEGMENT DATA
(In Thousands)
(unaudited)

  Three Months Ended   Year Ended December 31,
  December 31,
2020
(2)
  September 30,
2020
(3)
  December 31,
2019
(4)
  2020(5)   2019(6)
Revenues:                  
Well Site Services:                  
Completion Services $ 37,535     $ 34,893     $ 82,820     $ 191,529     $ 390,748  
Drilling Services 1,131     2,479     8,916     8,310     41,346  
Total Well Site Services 38,666     37,372     91,736     199,839     432,094  
Downhole Technologies 23,193     18,713     38,402     97,936     182,314  
Offshore/Manufactured Products(1):                  
Project-driven products 36,340     41,004     53,969     165,497     159,205  
Short-cycle products 6,809     7,864     21,500     48,142     123,222  
Other products and services 32,369     29,806     32,754     126,661     120,519  
Total Offshore/Manufactured Products 75,518     78,674     108,223     340,300     402,946  
Total revenues $ 137,377     $ 134,759     $ 238,361     $ 638,075     $ 1,017,354  
                   
Operating income (loss):                  
Well Site Services:                  
Completion Services $ (11,461 )   $ (14,330 )   $ (9,339 )   $ (187,869 )   $ (11,621 )
Drilling Services (181 )   458     236     (5,519 )   (43,419 )
Total Well Site Services (11,642 )   (13,872 )   (9,103 )   (193,388 )   (55,040 )
Downhole Technologies (8,019 )   (12,594 )   (167,259 )   (224,414 )   (164,008 )
Offshore/Manufactured Products 1,408     3,875     9,815     (80,794 )   36,022  
Corporate (10,111 )   (8,249 )   (9,488 )   (35,744 )   (45,154 )
Total operating loss $ (28,364 )   $ (30,840 )   $ (176,035 )   $ (534,340 )   $ (228,180 )

________________

(1) Disaggregated revenue data is provided to supplement the Segment Data.
   
(2)



Operating income (loss) for the three months ended December 31, 2020 included a non-cash fixed asset impairment charge of $0.7 million and severance and restructuring charges of $0.2 million related to the Completion Services business. In the Downhole Technologies segment, operating income (loss) included non-cash fixed asset and lease impairment charges of $3.6 million and severance and restructuring charges of $0.7 million. In the Offshore/Manufactured Products segment, operating income (loss) included $0.6 million of severance and restructuring charges. In Corporate, operating income (loss) included $1.2 million of severance charges.
   
(3)

Operating income (loss) for three months ended September 30, 2020 included a non-cash inventory impairment charge of $5.9 million related to the Downhole Technologies segment. In the Offshore/Manufactured Products segment, operating income (loss) included $0.3 million of severance charges.
   
(4)

Operating income (loss) for the three months ended December 31, 2019 included severance and restructuring charges of $0.5 million related to the Completion Services business and a non-cash goodwill impairment charge of $165.0 million related to the Downhole Technologies segment.
   
(5)






Operating income (loss) for the year ended December 31, 2020 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 charges of $3.6 million and severance and restructuring charges of $4.1 million related to the Completion Services business. In the Drilling Services business, operating income (loss) included a non-cash fixed asset impairment charge of $5.2 million and $0.2 million of severance and restructuring charges. 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, non-cash fixed asset and lease impairment charges of $3.6 million and $2.0 million of severance and restructuring charges. In the Offshore/Manufactured Products segment, operating income (loss) included a non-cash goodwill impairment charge of $86.5 million, a non-cash inventory impairment charge of $16.2 million and $1.4 million of severance and restructuring charges. In Corporate, operating income (loss) included $1.4 million of severance charges.
   
(6)


Operating income (loss) for the year ended December 31, 2019 included severance and restructuring charges of $1.8 million related to the Completions Services business and $1.7 million related to the Offshore/Manufactured Products segment, a non-cash fixed asset impairment charge of $33.7 million related to the Drilling Services business, and a non-cash goodwill impairment charge of $165.0 million related to the Downhole Technologies segment.

   

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   Year Ended December 31,
  December 31,
2020
  September 30,
2020
  December 31,
2019
  2020   2019
Well Site Services:                  
Completion Services:                  
Operating loss $ (11,461 )   $ (14,330 )   $ (9,339 )   $ (187,869 )   $ (11,621 )
Depreciation and amortization expense 11,890     12,914     16,882     52,922     68,440  
Impairment of goodwill             127,054      
Impairment of inventories             8,981      
Impairment of fixed assets 655             3,647      
Other income 270     638     1,258     2,698     3,730  
EBITDA 1,354     (778 )   8,801     7,433     60,549  
Severance and restructuring charges 219         556     4,094     1,847  
Adjusted EBITDA $ 1,573     $ (778 )   $ 9,357     $ 11,527     $ 62,396  
                   
Drilling Services:                  
Operating income (loss) $ (181 )   $ 458     $ 236     $ (5,519 )   $ (43,419 )
Depreciation and amortization expense 16     16     244     318     9,973  
Impairments of fixed assets             5,198     33,697  
Other income                 197  
EBITDA (165 )   474     480     (3 )   448  
Severance and restructuring charges             217      
Adjusted EBITDA $ (165 )   $ 474     $ 480     $ 214     $ 448  
                   
Total Well Site Services:                  
Operating loss $ (11,642 )   $ (13,872 )   $ (9,103 )   $ (193,388 )   $ (55,040 )
Depreciation and amortization expense 11,906     12,930     17,126     53,240     78,413  
Impairment of goodwill             127,054      
Impairment of inventories             8,981      
Impairments of fixed assets 655             8,845     33,697  
Other income 270     638     1,258     2,698     3,927  
Segment EBITDA 1,189     (304 )   9,281     7,430     60,997  
Severance and restructuring charges 219         556     4,311     1,847  
Adjusted Segment EBITDA $ 1,408     $ (304 )   $ 9,837     $ 11,741     $ 62,844  
                   
Downhole Technologies:                  
Operating loss $ (8,019 )   $ (12,594 )   $ (167,259 )   $ (224,414 )   $ (164,008 )
Depreciation and amortization expense 5,745     5,701     5,616     22,649     21,247  
Impairments of goodwill         165,000     192,502     165,000  
Impairment of inventories     5,921         5,921      
Impairments of fixed and lease assets 3,602             3,602      
Other income (expense) 16     (7 )       (81 )   12  
Segment EBITDA 1,344     (979 )   3,357     179     22,251  
Severance and restructuring charges 703             2,018      
Adjusted Segment EBITDA $ 2,047     $ (979 )   $ 3,357     $ 2,197     $ 22,251  
                   
Offshore/Manufactured Products:                  
Operating income (loss) $ 1,408     $ 3,875     $ 9,815     $ (80,794 )   $ 36,022  
Depreciation and amortization expense 5,376     5,401     5,602     21,881     22,842  
Impairment of goodwill             86,500      
Impairment of inventories             16,249      
Other income 82     171     965     542     1,150  
Segment EBITDA 6,866     9,447     16,382     44,378     60,014  
Severance and restructuring charges 633     288         1,355     1,655  
Adjusted Segment EBITDA $ 7,499     $ 9,735     $ 16,382     $ 45,733     $ 61,669  
                   
Corporate:                  
Operating loss $ (10,111 )   $ (8,249 )   $ (9,488 )   $ (35,744 )   $ (45,154 )
Depreciation and amortization expense 210     219     175     773     817  
Other expense                  
EBITDA (9,901 )   (8,030 )   (9,313 )   (34,971 )   (44,337 )
Severance and restructuring charges 1,169             1,385      
Adjusted EBITDA $ (8,732 )   $ (8,030 )   $ (9,313 )   $ (33,586 )   $ (44,337 )

________________

See footnotes to the Segment Data table for information regarding severance and restructuring charges included in operating income (loss) above by segment.


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   Year Ended December 31,
  December 31,
2020
  September 30,
2020
  December 31,
2019
  2020   2019
Net loss $ (18,747 )   $ (19,969 )   $ (175,552 )   $ (468,383 )   $ (231,808 )
Income tax benefit (11,886 )   (7,676 )   (2,175 )   (65,946 )   (8,919 )
Depreciation and amortization expense 23,237     24,251     28,519     98,543     123,319  
Impairments of goodwill         165,000     406,056     165,000  
Impairments of inventories     5,921         31,151      
Impairments of fixed and lease assets 4,257             12,447     33,697  
Interest expense, net 2,637     3,549     3,915     13,869     17,636  
Gains on extinguishment of 1.50% convertible senior notes     (5,942 )       (10,721 )    
Consolidated EBITDA (A) (502 )   134     19,707     17,016     98,925  
                   
Adjustments to Consolidated EBITDA:                  
Severance and restructuring charges 2,724     288     556     9,069     3,502  
Adjusted Consolidated EBITDA (A) $ 2,222     $ 422     $ 20,263     $ 26,085     $ 102,427  

________________

(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 1.50% convertible senior 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 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.


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Source: Oil States International, Inc.

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