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Oil States Announces Fourth Quarter Earnings of $1.74 per Share Before Goodwill Impairment
"We had a record year in 2008 with each of our business lines having
record or near record earnings," stated
Mrs. Taylor continued, "We have substantially reduced our planned capital expenditures for 2009 as compared to our 2008 spending and are reducing our cost structure in response to the market downturn. We expect all of our businesses to be negatively impacted in 2009 with the most immediate impact occurring in our Tubular Services and Drilling businesses."
Mrs. Taylor concluded, "We have a strong liquidity position. At year end,
we had
The Company recognized an effective tax rate of 85.2% in the fourth
quarter of 2008 compared to 30.1% in the fourth quarter of 2007. The
effective tax rate in the fourth quarter of 2008 was negatively impacted by a
significant amount of the goodwill impairment charges which were
non-deductible. Excluding the goodwill impairment, the effective tax rate for
the fourth quarter of 2008 would have approximated 34.9%. The effective tax
rate in the fourth quarter of 2007 benefited from statutory tax rate
reductions in
For the full year 2008, the Company reported revenues of
BUSINESS SEGMENT RESULTS
(Unless otherwise noted, the following discussion compares the quarterly results from the fourth quarter of 2008 to the results from the fourth quarter of 2007. In order to present a more meaningful comparison of the Company's operating results, the fourth quarter 2008 results exclude the goodwill impairment charges.)
Well Site Services
Excluding the
For the fourth quarter of 2008, the accommodations business reported
revenues of
Drilling services generated revenues and Adjusted EBITDA of
Rental tools generated
Offshore Products
In the fourth quarter of 2008, Offshore Products generated
Tubular Services
Excluding the
Goodwill Impairment
In accordance with Statement of Financial Accounting Standards No. 142,
"Goodwill and Other Intangible Assets," the Company concluded that the
goodwill amounts previously recorded in the Drilling and Tubular Services
reporting units were impaired in their entirety. The total goodwill
impairment charge recognized in the fourth quarter of 2008 was
The Company will be hosting a conference call to discuss the results for
the fourth quarter of 2008 on
This press release contains and the associated conference call will
contain forward-looking statements within the meaning 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 therein will be based on then current expectations and entail various
risks and uncertainties that could cause actual results to differ materially
from those forward-looking statements. Such risks and uncertainties include,
among other things, risks associated with the general nature of the oilfield
service industry and other factors discussed within the "Business" section of
the Form 10-K for the year ended
Oil States International, Inc.
Unaudited Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------- -------------------
2008 2007 2008 2007
---- ---- ---- ----
Revenues $901,056 $580,971 $2,948,457 $2,088,235
Costs and expenses:
Cost of sales 702,100 456,331 2,234,974 1,602,213
Selling, general
and administrative
expenses 37,504 31,989 143,080 118,421
Depreciation and
amortization
expense 26,863 21,383 102,604 70,703
Impairment of
goodwill 85,630 - 85,630 -
Other operating
income (928) (373) (1,586) (888)
---- ---- ------ ----
Operating income 49,887 71,641 383,755 297,786
Interest expense (3,613) (5,191) (17,530) (17,988)
Interest income 805 909 3,561 3,508
Equity in earnings
of unconsolidated
affiliates 868 1,307 4,035 3,350
Gain on sale of
workover services
and resulting
investment - - 6,160 12,774
Other income /
(expense) (331) 333 (922) 928
---- --- ---- ---
Income before
income taxes 47,616 68,999 379,059 300,358
Income tax
provision (40,591) (20,799) (156,349) (96,986)
------- ------- -------- -------
Net income $7,025 $48,200 $222,710 $203,372
====== ======= ======== ========
Net income per share
Basic $0.14 $0.97 $4.49 $4.11
Diluted $0.14 $0.95 $4.33 $3.99
Weighted average
number of common
shares outstanding
Basic 49,622 49,730 49,622 49,500
Diluted 49,806 50,994 51,414 50,911
Oil States International, Inc.
Consolidated Balance Sheets
(in thousands)
December 31, September 30, December 31,
2008 2008 2007
---- ---- ----
Assets (unaudited) (unaudited) (audited)
Current assets
Cash and cash equivalents $30,199 $55,621 $30,592
Accounts
receivable, net 575,982 502,807 450,153
Inventories, net 612,488 463,086 349,347
Prepaid expenses and
other current assets 18,815 13,475 35,575
------ ------ ------
Total current
assets 1,237,484 1,034,989 865,667
Property, plant and
equipment, net 695,338 723,626 586,910
Goodwill, net 305,441 399,151 391,644
Investments in
unconsolidated affiliates 5,899 6,255 24,778
Other non-current assets 55,085 56,940 60,627
---------- ---------- ----------
Total assets $2,299,247 $2,220,961 $1,929,626
========== ========== ==========
Liabilities and
stockholders' equity
Current liabilities
Accounts payable and
accrued liabilities $371,789 $347,450 $239,119
Current portion of long-
term debt 4,943 179,941 4,718
Income taxes 52,546 24,392 43
Deferred revenue 105,640 83,585 60,910
Other current liabilities 1,587 1,220 121
----- ----- ---
Total current
liabilities 536,505 636,588 304,911
Long-term debt (B) 474,948 236,574 487,102
Deferred income taxes 55,646 52,966 40,550
Other noncurrent
liabilities 13,155 14,293 12,236
------ ------ ------
Total
liabilities 1,080,254 940,421 844,799
Stockholders' equity
Common stock 526 526 522
Additional paid-in capital 425,284 422,044 402,091
Retained earnings 913,423 906,398 690,713
Accumulated other
comprehensive income / (loss) (28,409) 37,854 73,036
Treasury stock (91,831) (86,282) (81,535)
------- ------- -------
Total stockholders'
equity 1,218,993 1,280,540 1,084,827
---------- ---------- ----------
Total liabilities and
stockholders' equity $2,299,247 $2,220,961 $1,929,626
========== ========== ==========
Oil States International, Inc.
Segment Data
(in thousands)
(unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------------- -------------------
2008 2007 2008 2007
---- ---- ---- ----
Revenues
Accommodations $94,612 $91,535 $427,130 $312,846
Rental Tools 97,041 82,321 355,809 260,404
Drilling and Other 44,023 35,268 177,339 143,153
------ ------ ------- -------
Well Site Services 235,676 209,124 960,278 716,403
Offshore Products 141,385 141,209 528,164 527,810
Tubular Services 523,995 230,638 1,460,015 844,022
------- ------- --------- -------
Total Revenues $901,056 $580,971 $2,948,457 $2,088,235
======== ======== ========== ==========
Adjusted EBITDA (A)
Accommodations $35,335 $28,968 $156,223 $109,270
Rental Tools 30,535 28,138 111,224 96,006
Drilling and
Other (C) (D) 14,196 10,092 68,096 66,983
------ ------ ------ ------
Well Site Services (C) 80,066 67,198 335,543 272,259
Offshore Products 25,598 21,342 100,357 93,444
Tubular Services (D) 63,913 10,974 172,086 40,763
Corporate and
Eliminations (6,660) (4,850) (26,724) (20,925)
------ ------ ------- -------
Total Adjusted
EBITDA (C) (D) $162,917 $94,664 $581,262 $385,541
======== ======= ======== ========
Operating Income / (Loss)
Accommodations $27,210 $21,056 $120,972 $85,347
Rental Tools 20,860 20,536 75,787 71,973
Drilling and Other (D) 8,521 5,789 40,200 40,508
----- ----- ------ ------
Well Site Services 56,591 47,381 236,959 197,828
Offshore Products 22,624 18,572 89,280 82,460
Tubular Services (D) 62,800 10,494 169,333 38,467
Corporate and
Eliminations (6,498) (4,806) (26,187) (20,969)
------ ------ ------- -------
Total Operating Income (D) $135,517 $71,641 $469,385 $297,786
======== ======= ======== ========
Oil States International, Inc.
Additional Quarterly Segment and
Operating Data
(unaudited)
Three Months Ended
December 31,
2008 2007
---- ----
Supplemental Operating Data
Land Drilling
Operating Statistics
Average Rigs Available 37 34
Utilization 79.1% 74.3%
Implied Day Rate
($ in thousands per day) $16.4 $15.2
Implied Daily Cash Margin
($ in thousands per day) $5.5 $4.3
Offshore Products Backlog
($ in millions) $362.1 $362.2
Tubular Services Operating Data
Shipments (Tons in thousands) 166.2 137.0
Quarter end Inventory
($ in thousands) $396,462 $191,374
(A) The term EBITDA consists of net income plus interest, taxes,
depreciation and amortization. EBITDA is not a measure of financial
performance under generally accepted accounting principles. You
should not consider it in isolation from or as a substitute for net
income or cash flow measures prepared in accordance with generally
accepted accounting principles or as a measure of profitability or
liquidity. Additionally, EBITDA may not be comparable to other
similarly titled measures of other companies. The Company has
included EBITDA as a supplemental disclosure because its management
believes that EBITDA provides useful information regarding our 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 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.
Adjusted EBITDA is a non-GAAP measure which excludes the goodwill
impairment charges recognized in the fourth quarter of 2008. The
following table sets forth a reconciliation of EBITDA to net income,
which is the most directly comparable measure of financial
performance calculated under generally accepted accounting principles:
Reconciliation of GAAP to Non-GAAP Financial Information
(in thousands)
(unaudited)
Three Months Twelve Months
Ended December 31, Ended December 31,
------------------ ------------------
2008 2007 2008 2007
---- ---- ---- ----
Net income $7,025 $48,200 $222,710 $203,372
Income tax expense 40,591 20,799 156,349 96,986
Depreciation and
amortization 26,863 21,383 102,604 70,703
Interest income (805) (909) (3,561) (3,508)
Interest expense 3,613 5,191 17,530 17,988
----- ----- ------ ------
EBITDA $77,287 $94,664 $495,632 $385,541
Goodwill impairment 85,630 - 85,630 -
------ --- ------ ---
Adjusted EBITDA $162,917 $94,664 $581,262 $385,541
======== ======= ======== ========
(B) As of December 31, 2008 , the Company had approximately $195.9 million
available under its revolving credit facility.
(C) Includes $6.2 million and $12.8 million gains on sale of Boots & Coots
common stock in the full years 2008 and 2007 results, respectively.
(D) Drilling EBITDA and Operating Income exclude $22.8 million goodwill
impairment charge. Tubular Services EBITDA and Operating Income
exclude a $62.9 million goodwill impairment charge. Consolidated
EBITDA and Operating Income exclude an $85.6 million goodwill
impairment charge.
