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
SUBSIDIARIESRECONCILIATION 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 INFORMATIONCONSOLIDATED 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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