Oil States Announces Third Quarter 2020 Results of Operations

HOUSTON, Oct. 29, 2020 (GLOBE NEWSWIRE) — Oil States International, Inc. (NYSE: OIS) reported a net loss of $20.0 million, or $0.33 per share, for the third quarter of 2020, on revenues of $134.8 million. Consolidated EBITDA (Note A) was $0.1 million. The reported third quarter 2020 net loss included the following more significant charges and gains:
Non-cash write-down of inventory totaling $5.9 million ($4.7 million after-tax, or $0.08 per share)Non-cash gains on extinguishment of convertible senior notes of $5.9 million ($4.7 million after-tax, or $0.08 per share)Third quarter 2020 highlights and corporate actions included:Generated $87.0 million in cash flow from operationsReduced net debt (defined as total debt less cash) by $91.9 million, including the repayment of $52.0 million of revolver borrowings and the purchase of $17.2 million principal amount of the convertible senior notes at an average discount to par value of 45%Oil States’ President and Chief Executive Officer, Cindy B. Taylor, stated,“Our third quarter results were generally in line with our internal forecasts and the limited guidance that we were able to provide but the mix was different. Our Offshore/Manufactured Products segment results were below our previous guidance due to delays in customer activity and timing of orders. Our third quarter bookings improved sequentially to $70 million, including two notable project awards exceeding $10 million each, yielding a book-to-bill ratio for the third quarter of 0.9x. Backlog totaled $227 million as of September 30, 2020, a sequential decline of 3%. Reflecting some improvement in U.S. land activity in the latter part of the quarter, revenues in our Well Site Services and Downhole Technologies segments increased 3% and 25% sequentially, despite numerous storm disruptions in the U.S. Gulf of Mexico, which hampered our offshore Completion Services activity.“We generated $87 million in cash flow from operations during the third quarter and reduced our net debt by $92 million, demonstrating our continued emphasis on reducing costs and implementing strict capital discipline in this challenging operating environment while continuing to support our customers with strong technology offerings and safe operations. Since December 31, 2019, we have generated $131 million in cash flow from operations and have reduced our net debt by $130 million.”BUSINESS SEGMENT RESULTS(See Segment Data tables)Offshore/Manufactured ProductsOffshore/Manufactured Products reported revenues of $78.7 million and Segment EBITDA (Note B) of $9.4 million in the third quarter of 2020, compared to revenues of $94.9 million and Segment EBITDA of $15.0 million reported in the second quarter of 2020. Revenues decreased 17% sequentially, due primarily to a reduction in the segment’s connector product sales. Segment EBITDA margin in the third quarter of 2020 was 12% compared to 16% in the second quarter of 2020.Backlog totaled $227 million at September 30, 2020, a decrease of 3% sequentially and 23% year-over-year. During the third quarter, the segment received two notable project awards exceeding $10 million each. Third quarter 2020 bookings of $70 million were up sequentially, yielding a book-to-bill ratio of 0.9x in the period.Well Site ServicesWell Site Services reported revenues of $37.4 million and a Segment EBITDA loss of $0.3 million in the third quarter of 2020, compared to revenues of $36.3 million and a Segment EBITDA loss of $5.4 million reported in the second 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 second quarter of 2020, the Completion Services business recorded a non-cash fixed asset impairment charge of $3.0 million, severance and downsizing charges of $3.5 million and a $0.7 million bad debt provision on a receivable from a customer claiming bankruptcy protection.Downhole TechnologiesDownhole Technologies reported revenues of $18.7 million and a Segment EBITDA loss of $1.0 million in the third quarter of 2020, compared to revenues of $15.0 million and a Segment EBITDA loss of $5.5 million reported in the second quarter of 2020. During the third quarter of 2020, the Downhole Technologies segment recorded a non-cash inventory impairment charge of $5.9 million. In the second quarter of 2020, the segment recorded a $1.5 million bad debt provision on a receivable from a customer claiming bankruptcy protection and $1.3 million of expenses associated with workforce reductions and facility closures.Interest Expense, NetThe Company reported net interest expense of $3.5 million in the third quarter of 2020, including $1.9 million of non-cash amortization of debt discount and deferred financing costs.Other Income, NetDuring the third quarter of 2020, the Company recognized non-cash gains of $5.9 million in connection with the purchases of $17.2 million principal amount of its 1.50% convertible senior notes (due February 2023) at a significant discount to the carrying value of the recorded liability. In the second quarter of 2020, the Company recognized non-cash gains of $4.8 million in connection with the purchases of $12.0 million principal amount of the convertible senior notes.Income TaxesThe Company recognized an effective tax rate benefit of 27.8% in the third quarter of 2020, which compared to an effective tax rate benefit of 21.9% in the second quarter of 2020. The Company received $41.3 million in the third quarter of 2020 related to its 2018 and 2019 net operating loss carryback claims afforded under the CARES Act.Financial ConditionAs of September 30, 2020, $19.0 million was outstanding under the Company’s revolving credit facility, compared to $71.0 million outstanding as of June 30, 2020. Cash on-hand totaled $79.7 million as of September 30, 2020, compared to $53.8 million as of June 30, 2020. The total amount available to be drawn under the revolving credit facility was $83.8 million as of October 1, 2020.During the third quarter of 2020, the Company purchased $17.2 million principal amount of its outstanding 1.50% convertible senior notes for $9.5 million in cash. Since September 2019, the Company has purchased $42.6 million principal amount of its convertible senior notes for $26.8 million in cash.The Company’s total debt represented 20% of combined total debt and stockholders’ equity as of September 30, 2020, compared to 25% as of June 30, 2020.Conference Call InformationThe call is scheduled for October 30, 2020 at 10:00 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 49966262. 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 products and services company predominantly serving the drilling, completion, subsea, production and infrastructure sectors of the oil and gas industry. The Company’s manufactured products include highly engineered capital equipment as well as products consumed in the drilling, well construction and production of oil and natural gas. 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 SUBSIDIARIESUNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Amounts)

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS
(In Thousands)
OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIESUNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIESSEGMENT DATA
(In Thousands)
(unaudited)

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIESRECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
SEGMENT EBITDA (B)
(In Thousands)
(unaudited)
OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIESRECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
(In Thousands)
(unaudited)
Company Contact:Lloyd A. Hajdik
Oil States International, Inc.
Executive Vice President, Chief Financial Officer and Treasurer
713-652-0582SOURCE: Oil States International, Inc.