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Nov 1, 2021

Oil States Announces Third Quarter 2021 Results of Operations

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  
                                       

________________

(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.


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Source: Oil States International, Inc.

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