Form 8-K
0001121484 False 0001121484 2021-04-28 2021-04-28 iso4217:USD xbrli:shares iso4217:USD xbrli:shares
 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________

FORM 8-K

_________________

CURRENT REPORT

Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  April 28, 2021

_______________________________

OIL STATES INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

_______________________________

Delaware1-1633776-0476605
(State or Other Jurisdiction of Incorporation)(Commission File Number)(I.R.S. Employer Identification No.)

Three Allen Center, 333 Clay Street, Suite 4620

Houston, Texas 77002

(Address of Principal Executive Offices) (Zip Code)

(713) 652-0582

(Registrant's telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

_______________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, par value $0.01 per shareOISNew York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 
 
Item 2.02. Results of Operations and Financial Condition.

On April 28, 2021, Oil States International, Inc. published a press release providing information regarding its results of operation and financial condition for the quarter ended March 31, 2021. The information provided in this Report is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be deemed incorporated by reference in any filings under the Securities Act of 1933, as amended, unless specifically stated so therein.

Item 9.01. Financial Statements and Exhibits.
   
Exhibit 99.1 Press Release dated April 28, 2021
Exhibit 104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
 
 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 OIL STATES INTERNATIONAL, INC.
   
  
Date: April 28, 2021By: /s/ Lloyd A. Hajdik        
  Lloyd A. Hajdik
  Executive Vice President, Chief Financial Officer and Treasurer
  

 

EdgarFiling

EXHIBIT 99.1

Oil States Announces First Quarter 2021 Results of Operations

HOUSTON, April 28, 2021 (GLOBE NEWSWIRE) -- Oil States International, Inc. (NYSE: OIS) reported a net loss of $15.8 million, or $0.26 per share, for the first quarter of 2021, which included non-cash fixed asset impairment charges of $0.7 million ($0.5 million after-tax, or $0.01 per share), severance and restructuring charges of $3.4 million ($2.7 million after-tax, or $0.04 per share) and non-cash gains on extinguishment of convertible senior notes of $3.6 million ($2.9 million after-tax, or $0.05 per share).

During the first quarter of 2021, the Company generated revenues of $125.6 million and Adjusted Consolidated EBITDA (Note A) of $6.1 million (excluding $3.4 million of severance and restructuring charges). These results compare to revenues of $137.4 million and Adjusted Consolidated EBITDA of $2.2 million reported in the fourth quarter of 2020 (excluding $2.7 million of severance and restructuring charges).

First quarter 2021 highlights and corporate actions included:

Oil States' President and Chief Executive Officer, Cindy B. Taylor, stated,

"First quarter operating results in each of our segments benefited from increased U.S. land-based completion activity resulting from the improved commodity price environment. The impact of higher activity levels was partially offset by the severe winter weather event that occurred in February 2021 – particularly in Texas, Oklahoma and surrounding states. While our facilities did not sustain meaningful damage and our operations and services were restored following the event, our February results of operations were adversely impacted due to the temporary cessation of work at well sites, facility closures by us and our customers, and delays in the shipment of goods to our customers and from our vendors. Revenues in our Downhole Technologies and Well Site Services segments increased 10% and 2% sequentially, despite the severe winter weather conditions experienced, due to a strong recovery in March. Revenues in our Offshore/Manufactured Products segment decreased 20% sequentially, but we did achieve a 160 basis point increase in EBITDA margins, resulting from cost reductions. Our first quarter bookings improved sequentially to $70 million, which included one notable project award exceeding $10 million, yielding a book-to-bill ratio of 1.2x for the quarter. Of the $70 million in bookings, 17% related to non oil and gas projects.

"We also significantly strengthened our longer-term liquidity position during the quarter by entering into a new $125 million asset-based revolving credit facility that matures in 2025, issuing $135 million principal amount of convertible notes due in 2026 and purchasing $125 million principal amount of our existing convertible notes which come due in 2023."

BUSINESS SEGMENT RESULTS

(See Segment Data tables)

Offshore/Manufactured Products

Offshore/Manufactured Products reported revenues of $60.6 million and Adjusted Segment EBITDA (Note B) of $6.8 million in the first quarter of 2021, compared to revenues of $75.5 million and Adjusted Segment EBITDA of $7.5 million reported in the fourth quarter of 2020. Revenues decreased 20% sequentially, due primarily to a reduction in the segment's major project revenues (reflecting a lower beginning of year backlog) and service activities. Adjusted Segment EBITDA margin in the first quarter of 2021 was 11% compared to 10% in the fourth quarter of 2020.

Backlog totaled $226 million at March 31, 2021, a 3% sequential increase. During the first quarter, the segment booked one notable project award exceeding $10 million. First quarter 2021 bookings totaled $70 million, yielding a book-to-bill ratio of 1.2x in the period.

Downhole Technologies

Downhole Technologies reported revenues of $25.4 million and Adjusted Segment EBITDA of $3.0 million in the first quarter of 2021, compared to revenues of $23.2 million and Adjusted Segment EBITDA of $2.0 million reported in the fourth quarter of 2020. Adjusted Segment EBITDA margin in the first quarter of 2021 was 12% compared to 9% in the fourth quarter of 2020. With the sequential improvement in revenues, the segment's incremental Adjusted Segment EBITDA margin (Note C) was 45%.

Well Site Services

Well Site Services reported revenues of $39.6 million and Adjusted Segment EBITDA of $4.0 million in the first quarter of 2021, compared to revenues of $38.7 million and Adjusted Segment EBITDA of $1.4 million reported in the fourth quarter of 2020. While U.S. land-based completion activity improved sequentially, first quarter 2021 revenue was hindered, particularly in the Permian, due to the extreme weather experienced in February. In addition, international contributions slowed during the quarter. Adjusted Segment EBITDA margin the first quarter of 2021 was 10% compared to 4% in the fourth quarter of 2020. With the sequential improvement in revenues and improved cost structure, the segment's incremental Adjusted Segment EBITDA margin was in excess of 100%.

Corporate

Corporate expenses in the first quarter of 2021 totaled $9.4 million, which included $1.6 million of severance costs.

Interest Expense, Net

The Company reported net interest expense of $2.3 million in the first quarter of 2021, including $0.9 million of non-cash amortization of deferred debt issuance costs.

Other Income, Net

During the first quarter of 2021, the Company recognized non-cash gains of $3.6 million in connection with the purchases of $125.0 million principal amount of its 1.50% convertible senior notes due February 2023 (the "2023 Notes").

Income Taxes

The Company recognized an effective tax rate benefit of 13% in the first quarter of 2021, which compared to an effective tax rate benefit of 39% in the fourth quarter of 2020. The effective tax rate benefit in the first quarter of 2021 included the impact of certain discrete tax items.

Financial Condition

On February 10, 2021, the Company entered into a new credit agreement, which provides for a $125 million asset-based revolving credit facility (the "ABL Facility") that matures in February 2025. The ABL Facility was amended on March 16, 2021 to allow for the issuance of the 4.75% convertible senior notes due 2026 (the "2026 Notes") discussed below.

On March 19, 2021, the Company issued $135.0 million aggregate principal amount of the 2026 Notes. Net proceeds from the 2026 Notes offering, after deducting issuance costs, totaled $130.3 million. The 2026 Notes will mature on April 1, 2026 and bear interest at an annual rate of 4.75%, which is payable semi-annually on April 1 and October 1. The Company used $120.0 million in cash proceeds from the offering to purchase $125.0 million principal amount (96% of par value) of the 2023 Notes, with the balance added to cash on-hand. As of March 31, 2021, $32.4 million principal amount remained outstanding related to the 2023 Notes.

As of March 31, 2021, $7.0 million was outstanding under the Company's ABL Facility, compared to $19.0 million outstanding under the previous revolving credit facility as of December 31, 2020. Cash on-hand totaled $54.5 million as of March 31, 2021, compared to $72.0 million as of December 31, 2020. The total amount available to be drawn under the ABL Facility was $40.6 million as of April 1, 2021, resulting in $95.1 million of total liquidity (cash plus borrowing availability).

The Company's total debt represented 20% of combined total debt and stockholders' equity as of March 31, 2021 and December 31, 2020.

Conference Call Information

The call is scheduled for April 29, 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 50146955. 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, 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 
 March 31,
2021
 December 31,
2020
 March 31,
2020
 
Revenues:      
Products$61,445  $73,051  $102,980  
Services64,144  64,326  116,714  
 125,589  137,377  219,694  
       
Costs and expenses:      
Product costs49,463  62,992  89,746  
Service costs52,847  52,517  107,856  
Cost of revenues (exclusive of depreciation and amortization expense presented below)(1)102,310  115,509  197,602  
Selling, general and administrative expense21,225  22,597  26,124  
Depreciation and amortization expense21,520  23,237  26,409  
Impairments of goodwill    406,056  
Impairments of fixed and lease assets650  4,257  5,198  
Other operating (income) expense, net(354) 141  107  
 145,351  165,741  661,496  
Operating loss(19,762) (28,364) (441,802) 
       
Interest expense, net(2,325) (2,637) (3,504) 
Other income, net(2)3,960  368  774  
Loss before income taxes(18,127) (30,633) (444,532) 
Income tax benefit2,317  11,886  39,491  
Net loss$(15,810) $(18,747) $(405,041) 
       
Net loss per share:      
Basic$(0.26) $(0.31) $(6.79) 
Diluted$(0.26) $(0.31) $(6.79) 
       
Weighted average number of common shares outstanding:     
Basic60,098  59,885  59,654  
Diluted60,098  59,885  59,654  

________________

(1)Cost of revenues (exclusive of depreciation and amortization expense) included non-cash inventory impairment charges of $25.2 million ($12.0 million in product costs and $13.3 million in service costs) recognized in the first quarter of 2020.
(2)Other income, net included non-cash gains of $3.6 million recognized in connection with the purchases of $125.0 million principal amount of the 2023 Notes in the first quarter of 2021.


OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(In Thousands)

 March 31, 2021 December 31, 2020
 (Unaudited)  
ASSETS   
Current assets:   
Cash and cash equivalents$54,513  $72,011  
Accounts receivable, net173,512  163,135  
Inventories, net174,314  170,376  
Prepaid expenses and other current assets17,167  18,071  
Total current assets419,506  423,593  
    
Property, plant, and equipment, net365,605  383,562  
Operating lease assets, net32,122  33,140  
Goodwill, net76,550  76,489  
Other intangible assets, net200,685  205,749  
Other noncurrent assets29,951  29,727  
Total assets$1,124,419  $1,152,260  
    
LIABILITIES AND STOCKHOLDERS' EQUITY   
Current liabilities:   
Current portion of long-term debt$17,789  $17,778  
Accounts payable50,010  46,433  
Accrued liabilities40,552  44,504  
Current operating lease liabilities7,162  7,620  
Income taxes payable2,398  2,413  
Deferred revenue43,207  43,384  
Total current liabilities161,118  162,132  
    
Long-term debt170,119  165,759  
Long-term operating lease liabilities28,565  29,166  
Deferred income taxes8,882  14,263  
Other noncurrent liabilities23,573  23,309  
Total liabilities392,257  394,629  
    
Stockholders' equity:   
Common stock738  733  
Additional paid-in capital1,100,077  1,122,945  
Retained earnings329,750  329,327  
Accumulated other comprehensive loss(72,914) (71,385) 
Treasury stock(625,489) (623,989) 
Total stockholders' equity732,162  757,631  
Total liabilities and stockholders' equity$1,124,419  $1,152,260  


OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)

 Three Months Ended March 31,
 2021 2020
Cash flows from operating activities:   
Net loss$(15,810) $(405,041) 
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:   
Depreciation and amortization expense21,520  26,409  
Impairments of goodwill  406,056  
Impairments of inventories  25,230  
Impairments of fixed assets650  5,198  
Stock-based compensation expense2,820  1,162  
Amortization of debt discount and deferred financing costs895  1,681  
Deferred income tax benefit(2,710) (40,832) 
Gains on extinguishment of 1.50% convertible senior notes(3,637)   
Gains on disposals of assets(307) (513) 
Other, net285  771  
Changes in operating assets and liabilities:   
Accounts receivable(10,701) 4,617  
Inventories(3,890) (15,332) 
Accounts payable and accrued liabilities1,648  (8,625) 
Income taxes payable  (1,100) 
Deferred revenue(206) 3,118  
Other operating assets and liabilities, net1,026  2,650  
Net cash flows provided by (used in) operating activities(8,417) 5,449  
    
Cash flows from investing activities:   
Capital expenditures(4,120) (5,881) 
Proceeds from disposition of property, plant and equipment1,851  4,092  
Other, net(95) (256) 
Net cash flows used in investing activities(2,364) (2,045) 
    
Cash flows from financing activities:   
Revolving credit facility borrowings12,220  72,173  
Revolving credit facility repayments(24,220) (52,404) 
Issuance of 4.75% convertible senior notes135,000    
Purchases of 1.50% convertible senior notes(120,000) (4,737) 
Other debt and finance lease activity, net(145) 35  
Payment of financing costs(7,961)   
Shares added to treasury stock as a result of net share settlements due to vesting of stock awards(1,500) (2,665) 
Net cash flows provided by (used in) financing activities(6,606) 12,402  
    
Effect of exchange rate changes on cash and cash equivalents(111) 9  
Net change in cash and cash equivalents(17,498) 15,815  
Cash and cash equivalents, beginning of period72,011  8,493  
Cash and cash equivalents, end of period$54,513  $24,308  
    
Cash paid for:   
Interest$1,842  $2,436  
Income taxes, net577  2,499  


OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES

SEGMENT DATA
(In Thousands)
(unaudited)

 Three Months Ended
 March 31,
2021(2)
 December 31,
2020(3)
 March 31,
2020(4)
Revenues:     
Offshore/Manufactured Products(1):     
Project-driven products$21,374  $36,340  $36,788  
Short-cycle products12,250  6,809  22,097  
Other products and services26,985  32,369  32,287  
Total Offshore/Manufactured Products60,609  75,518  91,172  
Downhole Technologies25,430  23,193  41,065  
Well Site Services39,550  38,666  87,457  
Total revenues$125,589  $137,377  $219,694  
      
Operating income (loss):     
Offshore/Manufactured Products$1,071  $1,408  $(95,496) 
Downhole Technologies(1,615) (8,019) (192,691) 
Well Site Services(9,853) (11,642) (144,954) 
Corporate(9,365) (10,111) (8,661) 
Total operating loss$(19,762) $(28,364) $(441,802) 

________________

(1)Disaggregated revenue data is provided to supplement the Segment Data.
(2)Operating income (loss) for the three months ended March 31, 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 severance and restructuring charges of $0.3 million. In the Well Site Services segment, operating income (loss) included non-cash fixed asset impairment charges of $0.7 million and severance and restructuring charges of $1.3 million. In Corporate, operating income (loss) included $1.6 million of severance charges.
(3)Operating income (loss) for the three months ended December 31, 2020 included $0.6 million of severance and restructuring charges related to the Offshore/Manufactured Products segment. 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 Well Site Services segment, operating income (loss) included a non-cash fixed asset impairment charge of $0.7 million and severance and restructuring charges of $0.2 million. In Corporate, operating income (loss) included $1.2 million of severance charges.
(4)Operating income (loss) for the three months ended March 31, 2020 included a non-cash goodwill impairment charge of $86.5 million, non-cash inventory charges of $16.2 million and $0.1 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. 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, a non-cash fixed asset impairment charge of $5.2 million and severance and downsizing charges of $0.5 million.


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
 March 31,
2021
 December 31,
2020
 March 31,
2020
Offshore/Manufactured Products:     
Operating income (loss)$1,071  $1,408  $(95,496) 
Depreciation and amortization expense5,469  5,376  5,628  
Impairment of goodwill    86,500  
Impairment of inventories    16,249  
Other income (expense)(62) 82  176  
Segment EBITDA6,478  6,866  13,057  
Severance and restructuring charges282  633  112  
Adjusted Segment EBITDA$6,760  $7,499  $13,169  
      
Downhole Technologies:     
Operating loss$(1,615) $(8,019) $(192,691) 
Depreciation and amortization expense4,389  5,745  5,584  
Impairment of goodwill    192,502  
Impairment of fixed and lease assets  3,602    
Other income (expense)(2) 16  (77) 
Segment EBITDA2,772  1,344  5,318  
Severance and restructuring charges275  703    
Adjusted Segment EBITDA$3,047  $2,047  $5,318  
      
Well Site Services:     
Operating loss$(9,853) $(11,642) $(144,954) 
Depreciation and amortization expense11,468  11,906  15,036  
Impairment of goodwill    127,054  
Impairment of inventories    8,981  
Impairments of fixed assets650  655  5,198  
Other income387  270  675  
Segment EBITDA2,652  1,189  11,990  
Severance and restructuring charges1,306  219  548  
Adjusted Segment EBITDA$3,958  $1,408  $12,538  
      
Corporate:     
Operating loss$(9,365) $(10,111) $(8,661) 
Depreciation and amortization expense194  210  161  
EBITDA(9,171) (9,901) (8,500) 
Severance charges1,555  1,169    
Adjusted EBITDA$(7,616) $(8,732) $(8,500) 


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
 March 31,
2021
 December 31,
2020
 March 31,
2020
      
Net loss$(15,810) $(18,747) $(405,041) 
Income tax benefit(2,317) (11,886) (39,491) 
Depreciation and amortization expense21,520  23,237  26,409  
Impairments of goodwill    406,056  
Impairments of inventories    25,230  
Impairments of fixed and lease assets650  4,257  5,198  
Interest expense, net2,325  2,637  3,504  
Gains on extinguishment of 1.50% convertible senior notes(3,637)     
Consolidated EBITDA2,731  (502) 21,865  
Severance and restructuring charges3,418  2,724  660  
Adjusted Consolidated EBITDA$6,149  $2,222  $22,525  

________________

(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.
(C)Incremental Adjusted Segment EBITDA margin is calculated by dividing the change in Adjusted Segment EBITDA by the change in segment revenues.


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.