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News Release Oil States Announces Second Quarter Earnings of $1.34 Per Share
8/1/2011 4:20:00 PM HOUSTON, Aug 1, 2011 (GlobeNewswire via COMTEX) -- Oil States International, Inc. (NYSE:OIS) reported net income for the quarter ended June 30, 2011 of $74.2 million, or $1.34 per diluted share, compared to $37.5 million, or $0.71 per diluted share, in the second quarter of 2010. The Company generated $820.3 million and $160.7 million of revenues and EBITDA, respectively, during the quarter compared to revenues of $594.5 million and EBITDA of $88.1 million in the second quarter of 2010 (EBITDA defined as net income plus interest, taxes, depreciation and amortization).(A) The year-over-year increases in revenues and EBITDA of 38% and 82%, respectively, were broad based, including approximately $58 million of revenues and $31 million of EBITDA from the acquisitions closed in the fourth quarter of 2010 and higher contributions from each of the Company's business segments. Consolidated operating income essentially doubled from $57.8 million in the second quarter of 2010 to the current quarter, totaling $115.2 million. "Despite the current global economic uncertainty, commodity prices, particularly oil, are supportive of high customer spending levels," stated Cindy B. Taylor, Oil States' President and Chief Executive Officer. "Results for our accommodations segment in the second quarter benefitted from both organic growth and the acquisitions of The MAC and Mountain West. We continue to make capacity expansions in our accommodations segment as demand for additional rooms remains strong. U.S. drilling and completion activity levels in the oil shale regions continue to bolster the outlook for our well site services and tubular services segments. In addition, the global deepwater spending outlook remains strong, and our offshore products backlog has reached a new record level at $519 million at June 30, 2011, up 25% from the prior quarter." The Company recognized an effective tax rate of 27.9% in the second quarter of 2011 compared to 30.6% in the second quarter of 2010. The lower effective tax rate in the second quarter of 2011 was primarily due to foreign sourced income taxed at lower statutory rates. The Company invested $137.6 million in capital expenditures during the second quarter of 2011 primarily related to the expansion of its accommodations business in Canada and Australia as well as incremental equipment deployed in its rental tools business to service the active U.S. shale plays. The Company currently expects to spend approximately $650 million in capital expenditures during 2011. During the second quarter of 2011, the Company completed a $600 million high yield offering with net proceeds from the offering used to repay outstanding borrowings under its U.S. and Canadian revolving credit facilities, as well as for general corporate purposes. For the first half of 2011, the Company reported revenues of $1.6 billion, EBITDA of $300.5 million and $136.3 million of net income, or $2.48 per diluted share. For the first half of 2010, the Company reported revenues of $1.1 billion, EBITDA of $179.6 million and $77.7 million of net income, or $1.49 per diluted share. BUSINESS SEGMENT RESULTS (Unless otherwise noted, the following discussion compares the quarterly results from the second quarter of 2011 to the results from the second quarter of 2010.) Accommodations Accommodations generated revenues of $202.9 million and EBITDA of $83.9 million for the second quarter of 2011 compared to revenues and EBITDA of $122.0 million and $41.5 million, respectively, in the second quarter of 2010. Accommodations revenues increased 66% and EBITDA increased 102% year-over-year primarily due to contributions from The MAC and Mountain West acquisitions which closed during the fourth quarter of 2010. Well Site Services Well site services generated revenues of $153.7 million and EBITDA of $46.7 million in the second quarter of 2011 compared to revenues and EBITDA of $113.3 million and $26.0 million, respectively, in the second quarter of 2010. Revenues increased 36% and EBITDA increased 80% year-over-year primarily due to increases in rental tools utilization and pricing and better fixed cost absorption. Rental tools generated revenues of $112.7 million and EBITDA of $35.4 million in the second quarter of 2011. Revenue and EBITDA improved 42% and 70% year-over-year, respectively, due to overall increases in drilling activity and service intensity driven by increases in horizontal drilling and completion activity in the Marcellus, Bakken, and Eagleford shales. Service tickets increased 12% year-over-year and revenue per ticket rose 27% over the same period as U.S. completion activity favored our higher specification and proprietary equipment. Drilling services generated revenues and EBITDA of $41.0 million and $11.3 million, respectively, in the second quarter of 2011 compared to $34.1 million of revenues and $5.2 million of EBITDA in the second quarter 2010. Utilization increased to 80% in the second quarter of 2011 from 73% in the second quarter of 2010. Dayrates also increased year-over-year to $16.5 thousand per day in the second quarter of 2011 from $14.2 thousand per day in the second quarter of 2010, and cash margins improved to $4.8 thousand per day in the second quarter of 2011 from $2.4 thousand per day in the second quarter of 2010. Offshore Products Offshore products generated revenues and EBITDA of $131.7 million and $21.9 million, respectively, in the second quarter of 2011 compared to $106.0 million of revenues and $18.9 million in EBITDA in the second quarter of 2010. Revenues and EBITDA increased 24% and 16% year-over-year, respectively, primarily due to higher revenues for production and subsea orders, partially offset by lower rig equipment revenues. Backlog grew significantly, on both a sequential and year-over-year basis, reaching a new record level of $518.6 million at June 30, 2011 which represented a 25% increase from the $415.5 million reported as of March 31, 2011 and a 140% increase from the $215.7 million reported at June 30, 2010. Major backlog additions during the second quarter included orders for the Guara/Lula project offshore Brazil along with additional content on Jack/St. Malo and various deck equipment orders. Tubular Services Tubular services generated revenues of $332.0 million and EBITDA of $17.6 million during the second quarter of 2011 compared to revenues of $253.3 million and EBITDA of $9.7 million in the second quarter of 2010. Tubular services' OCTG shipments were up 28% year-over-year with 173,300 tons shipped in the second quarter of 2011 compared to 134,900 tons shipped in the second quarter of 2010. Gross margin as a percent of revenues increased to 6.5% in the second quarter of 2011 from 5.2% in the second quarter of 2010 primarily due to strong demand and modest mill price increases over the past twelve months. The Company's OCTG inventory increased by 7% during the second quarter to $377.8 million at June 30, 2011 in response to customer orders for drilling programs in the second half of 2011. Oil States International, Inc. is a diversified oilfield services company with recently added exposure to the mining industry through The MAC acquisition. Oil States is a leading, integrated provider of remote site accommodations with prominent market positions in the Canadian oil sands and the Australian mining regions. Oil States is also a leading manufacturer of products for deepwater production facilities and subsea pipelines as well as a provider of completion-related rental tools, oil country tubular goods distribution and land drilling services to the oil and gas industry. 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 http://www.oilstatesintl.com. The Oil States International, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6058 The foregoing contains forward-looking statements within the meaning 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 therein will be based on then 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 other things, risks associated with the general nature of the oilfield service industry and other factors discussed within the "Business" and "Risk Factors" sections of the Form 10-K for the year ended December 31, 2010 filed by Oil States with the SEC on February 22, 2011.
OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Amounts)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------- --------------------------
2011 2010 2011 2010
---------- ---------- ------------ ------------
Revenues $ 820,317 $ 594,532 $ 1,580,758 $ 1,126,877
Costs and expenses:
Cost of sales and services 616,778 469,482 1,191,176 875,992
Selling, general and
administrative expenses 42,765 37,183 86,472 72,336
Depreciation and amortization
expense 45,238 30,600 90,390 61,678
Other operating (income)
expense 373 (486) 2,781 (687)
---------- ---------- ------------ ------------
705,154 536,779 1,370,819 1,009,319
---------- ---------- ------------ ------------
Operating income 115,163 57,753 209,939 117,558
Interest expense, net of
capitalized interest (12,532) (3,500) (22,781) (6,971)
Interest income 235 103 1,248 181
Other income/(expense) 490 (158) 684 634
---------- ---------- ------------ ------------
Income before income taxes 103,356 54,198 189,090 111,402
Income tax expense (28,887) (16,590) (52,270) (33,379)
---------- ---------- ------------ ------------
Net income 74,469 37,608 136,820 78,023
Less: Net income
attributable to
noncontrolling interest 226 131 500 303
---------- ---------- ------------ ------------
Net income attributable to Oil
States International, Inc. $ 74,243 $ 37,477 $ 136,320 $ 77,720
========== ========== ============ ============
Net income per share attributable
to Oil States International,
Inc.
common stockholders
Basic $1.45 $0.75 $2.67 $1.55
Diluted $1.34 $0.71 $2.48 $1.49
Weighted average number of common
shares outstanding:
Basic 51,231 50,146 51,083 50,021
Diluted 55,270 52,455 55,061 52,188
OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands)
December
June 30, 31,
ASSETS 2011 2010
----------- ----------
(UNAUDITED)
Current assets:
Cash and cash equivalents $123,304 $96,350
Accounts receivable, net 552,024 478,739
Inventories, net 592,679 501,435
Prepaid expenses and other
current assets 29,350 23,480
----------- ----------
Total current assets 1,297,357 1,100,004
Property, plant, and equipment,
net 1,436,714 1,252,657
Goodwill, net 491,507 475,222
Other intangible assets, net 137,961 139,421
Other noncurrent assets 61,515 48,695
----------- ----------
Total assets $3,425,054 $3,015,999
=========== ==========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Accounts payable and accrued
liabilities $315,672 $304,739
Income taxes 7,429 4,604
Current portion of long-term
debt and capitalized leases 192,556 181,175
Deferred revenue 54,598 60,847
Other current liabilities 6,541 2,810
----------- ----------
Total current liabilities 576,796 554,175
Long-term debt and capitalized
leases 884,750 731,732
Deferred income taxes 90,774 81,198
Other noncurrent liabilities 21,012 19,961
----------- ----------
Total liabilities 1,573,332 1,387,066
Stockholders' equity:
Oil States International, Inc.
stockholders' equity:
Common stock 546 541
Additional paid-in capital 531,618 508,429
Retained earnings 1,264,453 1,128,133
Accumulated other
comprehensive income 150,264 84,549
Treasury stock (96,201) (93,746)
----------- ----------
Total Oil States
International, Inc.
stockholders' equity 1,850,680 1,627,906
----------- ----------
Noncontrolling interest 1,042 1,027
----------- ----------
Total stockholders' equity 1,851,722 1,628,933
----------- ----------
Total liabilities and
stockholders' equity $3,425,054 $3,015,999
=========== ==========
OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
SIX MONTHS
ENDED JUNE 30,
-------------------
2011 2010
--------- --------
Cash flows from operating activities:
Net income $136,820 $78,023
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 90,390 61,678
Deferred income tax provision (benefit) 10,788 (4,909)
Excess tax benefits from share-based
payment arrangements (6,198) (985)
Non-cash compensation charge 7,198 6,848
Accretion of debt discount 3,823 3,560
Amortization of deferred financing costs 2,914 526
Other, net (889) (1,748)
Changes in operating assets and liabilities,
net of effect from acquired businesses:
Accounts receivable (66,481) 561
Inventories (88,781) (51,066)
Accounts payable and accrued liabilities 7,802 26,840
Taxes payable 9,977 (5,344)
Other current assets and liabilities, net (10,728) (28,129)
--------- --------
Net cash flows provided by operating
activities 96,635 85,855
Cash flows from investing activities:
Acquisitions of businesses, net of cash
acquired (212) ----
Capital expenditures, including capitalized
interest (230,253) (76,077)
Other, net (850) 1,853
--------- --------
Net cash flows used in investing
activities (231,315) (74,224)
Cash flows from financing activities:
Revolving credit borrowings and repayments,
net (428,682) ----
6 1/2% senior notes issued 600,000 ----
Term loan repayments (7,494) ----
Debt and capital lease repayments (587) (255)
Issuance of common stock from share-based
payment arrangements 9,792 7,288
Excess tax benefits from share-based
payment arrangements 6,198 985
Payment of financing costs (12,640) ----
Other, net (2,456) (1,363)
--------- --------
Net cash flows provided by financing
activities 164,131 6,655
Effect of exchange rate changes on cash (2,399) (5,005)
--------- --------
Net increase in cash and cash equivalents from
continuing operations 27,052 13,281
Net cash used in discontinued operations --
operating activities (98) (75)
Cash and cash equivalents, beginning of period 96,350 89,742
--------- --------
Cash and cash equivalents, end of period $123,304 $102,948
========= ========
Oil States International, Inc.
Segment Data
(in thousands)
(unaudited)
Three Months Ended Six Months Ended June
June 30, 30,
------------------ ----------------------
2011 2010 2011 2010
-------- -------- ---------- ----------
Revenues
Rental tools $112,658 $79,119 $220,189 $146,622
Drilling services 40,998 34,137 74,103 64,538
-------- -------- ---------- ----------
Well site services 153,656 113,256 294,292 211,160
Accommodations 202,943 121,956 400,041 267,489
Offshore products 131,742 106,005 260,184 208,998
Tubular services 331,976 253,315 626,241 439,230
-------- -------- ---------- ----------
Total revenues $820,317 $594,532 $1,580,758 $1,126,877
======== ======== ========== ==========
EBITDA (A)
Rental tools $35,395 $20,799 $69,581 $35,690
Drilling services 11,348 5,155 18,597 10,539
-------- -------- ---------- ----------
Well site services 46,743 25,954 88,178 46,229
Accommodations 83,938 41,546 159,180 99,326
Offshore products 21,921 18,900 41,996 34,350
Tubular services 17,646 9,741 31,174 16,352
Corporate and
eliminations (9,583) (8,077) (20,015) (16,690)
-------- -------- ---------- ----------
Total EBITDA $160,665 $88,064 $300,513 179,567
======== ======== ========== ==========
Operating income / (loss)
Rental tools $25,103 $10,395 $49,493 $14,772
Drilling services 6,370 (1,070) 8,605 (3,052)
-------- -------- ---------- ----------
Well site services 31,473 9,325 58,098 11,720
Accommodations 57,750 31,300 106,723 78,668
Offshore products 18,770 16,087 35,520 28,708
Tubular services 16,956 9,297 30,002 15,512
Corporate and
eliminations (9,786) (8,256) (20,404) (17,050)
-------- -------- ---------- ----------
Total operating income $115,163 $57,753 $209,939 $117,558
======== ======== ========== ==========
Oil States International, Inc.
Additional Quarterly Segment and Operating Data
(unaudited)
Three Months Ended
June 30,
------------------
2011 2010
-------- --------
Supplemental operating data
Lodge/village revenues ($ in thousands) $143,294 $68,940
Other accommodations revenues ($ in
thousands) 59,649 53,016
Total accommodations revenues ($ in
thousands) $202,943 $121,956
Average available lodge/village rooms 14,020 6,638
Lodge/village revenues per available room $112 $114
Offshore products backlog ($ in millions) $518.6 $215.7
Rental tool job tickets 11,599 10,325
Average revenue per ticket ($ in thousands) $9.7 $7.7
Tubular services operating data
Shipments (tons in thousands) 173.3 134.9
Quarter end inventory ($ in thousands) $377,844 $310,431
Land drilling operating statistics
Average rigs available 34 36
Utilization 80.3% 73.3%
Implied day rate ($ in thousands per day) $16.5 $14.2
Implied daily cash margin ($ in thousands
per day) $4.8 $2.4
(A) The term EBITDA consists of net income plus interest,
taxes, depreciation and amortization. EBITDA is not a
measure of financial performance under generally accepted
accounting principles. You should not consider it in
isolation from or as a substitute for net income or cash
flow measures prepared in accordance with generally accepted
accounting principles or as a measure of profitability or
liquidity. Additionally, EBITDA may not be comparable to
other similarly titled measures of other companies. The
Company has included EBITDA as a supplemental disclosure
because its management believes that EBITDA provides useful
information regarding our 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 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 following table
sets forth a reconciliation of EBITDA to net income, which
is the most directly comparable measure of financial
performance calculated under generally accepted accounting
principles:
Oil States International, Inc.
Reconciliation of GAAP to Non-GAAP Financial Information
(in thousands)
(unaudited)
Three Months Six Months Ended
Ended June 30, June 30,
----------------- ------------------
2011 2010 2011 2010
-------- ------- -------- --------
Net income / (loss) $74,243 $37,477 $136,320 $77,720
Income tax provision 28,887 16,590 52,270 33,379
Depreciation and amortization 45,238 30,600 90,390 61,678
Interest income (235) (103) (1,248) (181)
Interest expense 12,532 3,500 22,781 6,971
-------- ------- -------- --------
EBITDA $160,665 $88,064 $300,513 $179,567
======== ======= ======== ========
(B) As of June 30, 2011 and December 31, 2010, the Company's 2 3/8% Contingent
Convertible Senior Notes, net of unamortized discount, were assified as a current
liability because certain contingent conversion thresholds based on the Company's
stock price were met at that date.
(C ) As of June 30, 2011, the Company had approximately $807.8 million available
under its credit facilities.
This news release was distributed by GlobeNewswire, www.globenewswire.com SOURCE: Oil States International, Inc. CONTACT: Bradley J. Dodson Oil States International, Inc. 713-652-0582 |
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