Oil States Announces Fourth Quarter 2020 Results of Operations

February 17, 2021 5:10 PM EST

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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, 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 
Services64,326  62,161  118,362  306,803  533,995 
 137,377  134,759  238,361  638,075  1,017,354 
          
Costs and expenses:         
Product costs62,992  66,789  93,841  287,615  369,194 
Service costs52,517  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 expenses22,597  21,389  29,405  94,102  122,932 
Depreciation and amortization expense23,237  24,251  28,519  98,543  123,319 
Impairments of goodwill    165,000  406,056  165,000 
Impairments of fixed and lease assets4,257      12,447  33,697 
Other operating (income) expense, net141  (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 benefit11,886  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:        
Basic59,885  59,871  59,431  59,812  59,379 
Diluted59,885  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, net163,135  233,487 
Inventories, net170,376  221,342 
Prepaid expenses and other current assets18,071  20,107 
Total current assets423,593  483,429 
    
Property, plant and equipment, net383,562  459,724 
Operating lease assets, net33,140  43,616 
Goodwill, net76,489  482,306 
Other intangible assets, net205,749  230,091 
Other noncurrent assets29,727  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 payable46,433  78,368 
Accrued liabilities44,504  48,840 
Current operating lease liabilities7,620  8,311 
Income taxes payable2,413  4,174 
Deferred revenue43,384  17,761 
Total current liabilities162,132  183,071 
    
Long-term debt165,759  222,552 
Long-term operating lease liabilities29,166  35,777 
Deferred income taxes14,263  38,079 
Other noncurrent liabilities23,309  24,421 
Total liabilities394,629  503,900 
    
Stockholders' equity:   
Common stock733  726 
Additional paid-in capital1,122,945  1,114,521 
Retained earnings329,327  797,710 
Accumulated other comprehensive loss(71,385) (67,746)
Treasury stock, at cost(623,989) (621,244)
Total stockholders' equity757,631  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 expense98,543  123,319 
Impairments of goodwill406,056  165,000 
Impairments of inventories31,151   
Impairments of fixed and lease assets12,447  33,697 
Stock-based compensation expense8,431  16,768 
Amortization of debt discount and deferred financing costs7,736  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, net4,668  3,079 
Changes in operating assets and liabilities:   
Accounts receivable63,876  50,257 
Inventories17,578  (10,774)
Accounts payable and accrued liabilities(37,315) (6,173)
Deferred revenue25,549  3,470 
Other operating assets and liabilities, net(13) 2,473 
Net cash flows provided by operating activities132,755  137,432 
    
Cash flows from investing activities:   
Capital expenditures(12,749) (56,116)
Proceeds from disposition of property, plant and equipment9,601  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 borrowings72,173  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 equivalents63,518  (10,823)
Cash and cash equivalents, beginning of year8,493  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 Services1,131  2,479  8,916  8,310  41,346 
Total Well Site Services38,666  37,372  91,736  199,839  432,094 
Downhole Technologies23,193  18,713  38,402  97,936  182,314 
Offshore/Manufactured Products(1):         
Project-driven products36,340  41,004  53,969  165,497  159,205 
Short-cycle products6,809  7,864  21,500  48,142  123,222 
Other products and services32,369  29,806  32,754  126,661  120,519 
Total Offshore/Manufactured Products75,518  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) $(11,621)
Drilling Services(181) 458  236  (5,519) (43,419)
Total Well Site Services(11,642) (13,872) (9,103) (193,388) (55,040)
Downhole Technologies(8,019) (12,594) (167,259) (224,414) (164,008)
Offshore/Manufactured Products1,408  3,875  9,815  (80,794) 36,022 
Corporate(10,111) (8,249) (9,488) (35,744) (45,154)
Total operating loss$(28,364) $(30,840) $(176,035) $(534,340) $(228,180)

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(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 expense11,890  12,914  16,882  52,922  68,440 
Impairment of goodwill      127,054   
Impairment of inventories      8,981   
Impairment of fixed assets655      3,647   
Other income270  638  1,258  2,698  3,730 
EBITDA1,354  (778) 8,801  7,433  60,549 
Severance and restructuring charges219    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) $(43,419)
Depreciation and amortization expense16  16  244  318  9,973 
Impairments of fixed assets      5,198  33,697 
Other income        197 
EBITDA(165) 474  480  (3) 448 
Severance and restructuring charges      217   
Adjusted EBITDA$(165) $474  $480  $214  $448 
          
Total Well Site Services:         
Operating loss$(11,642) $(13,872) $(9,103) $(193,388) $(55,040)
Depreciation and amortization expense11,906  12,930  17,126  53,240  78,413 
Impairment of goodwill      127,054   
Impairment of inventories      8,981   
Impairments of fixed assets655      8,845  33,697 
Other income270  638  1,258  2,698  3,927 
Segment EBITDA1,189  (304) 9,281  7,430  60,997 
Severance and restructuring charges219    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 expense5,745  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 assets3,602      3,602   
Other income (expense)16  (7)   (81) 12 
Segment EBITDA1,344  (979) 3,357  179  22,251 
Severance and restructuring charges703      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 expense5,376  5,401  5,602  21,881  22,842 
Impairment of goodwill      86,500   
Impairment of inventories      16,249   
Other income82  171  965  542  1,150 
Segment EBITDA6,866  9,447  16,382  44,378  60,014 
Severance and restructuring charges633  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) $(45,154)
Depreciation and amortization expense210  219  175  773  817 
Other expense         
EBITDA(9,901) (8,030) (9,313) (34,971) (44,337)
Severance and restructuring charges1,169      1,385   
Adjusted EBITDA$(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 expense23,237  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 assets4,257      12,447  33,697 
Interest expense, net2,637  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 charges2,724  288  556  9,069  3,502 
Adjusted Consolidated EBITDA (A)$2,222  $422  $20,263  $26,085  $102,427 

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(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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Source: Oil States International, Inc.


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