Oil States Announces Third Quarter 2021 Results of Operations
During the third quarter of 2021, the Company generated revenues of
Third quarter 2021 highlights and corporate actions included:
- Hurricane Ida resulted in a transitory reduction in
Oil States' and its customers operations in southeastLouisiana and theGulf 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
"We hope for a rapid recovery for the residents of
"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
"Our Well Site Services segment revenues increased 9% from the prior quarter – driven by higher
"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
"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.
BUSINESS SEGMENT RESULTS
(See Segment Data tables)
Offshore/Manufactured Products
Offshore/Manufactured Products reported revenues of
Backlog totaled $249 million as of
Downhole Technologies
Downhole Technologies reported revenues of
Well
Well
Corporate
Corporate expenses in the third quarter of 2021 totaled
Interest Expense, Net
The Company reported net interest expense of
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
The Company's total debt represented 20% of combined total debt and stockholders' equity as of
Conference Call Information
The call is scheduled for
About
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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
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts)
Three Months Ended | Nine Months Ended | ||||||||||||||||||
2021 |
2021 |
2020 |
2021 |
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
(2) Other income, net included non-cash gains of
CONSOLIDATED BALANCE SHEETS
(In Thousands)
(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 | |||||
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 | ) | |||
(625,584 | ) | (623,989 | ) | ||||
Total stockholders' equity | 704,507 | 757,631 | |||||
Total liabilities and stockholders' equity | $ | 1,091,899 | $ | 1,152,260 | |||
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
Nine Months Ended |
|||||||
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 | ) |
SEGMENT DATA
(In Thousands)
(unaudited)
Three Months Ended | Nine Months Ended | ||||||||||||||||||
2021(2) |
2021(3) |
2020(4) |
2021(5) |
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 |
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 |
(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
(3) Operating income (loss) for the three months ended
(4) Operating income (loss) for the three months ended
(5) Operating income (loss) for the nine months ended
(6) Operating income (loss) for the nine months ended
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
SEGMENT EBITDA AND ADJUSTED SEGMENT EBITDA (B)
(In Thousands)
(unaudited)
Three Months Ended | Nine Months Ended | ||||||||||||||||||
2021(1) |
2021 |
2020 |
2021(1) |
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 |
|||||||||||||||||||
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
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
CONSOLIDATED EBITDA AND ADJUSTED CONSOLIDATED EBITDA (A)
(In Thousands)
(unaudited)
Three Months Ended | Nine Months Ended | ||||||||||||||||||
2021 |
2021 |
2020 |
2021 |
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:
Executive Vice President, Chief Financial Officer and Treasurer
713-652-0582
SOURCE:

Source: Oil States International, Inc.