Oil States Announces Fourth Quarter 2020 Results of Operations

HOUSTON, Feb. 17, 2021 (GLOBE NEWSWIRE) — 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, 2021Implemented 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 chargesPositive Segment EBITDA (Note B) reported by each operating segmentOffshore/Manufactured Products segment received two notable project awards exceeding $10 million eachOil 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 ProductsOffshore/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 TechnologiesDownhole 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 ServicesWell 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.CorporateCorporate expenses in the fourth quarter of 2020 totaled $10.1 million, which included $1.2 million in severance costs.Interest Expense, NetThe 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 TaxesThe 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 ConditionAs 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 InformationThe 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 StatesOil 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 StatementsThe 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 SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS
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Lloyd A. Hajdik
Oil States International, Inc.
Executive Vice President, Chief Financial Officer and Treasurer
713-652-0582SOURCE: Oil States International, Inc.