Oil States (NYSE: OIS) reported Q2 EPS of ($0.41), $0.06 better than the analyst estimate of ($0.47). Revenue for the quarter came in at $146.25 million versus the consensus estimate of $154.33 million.

• Severance and downsizing charges totaled $5.4 million ($4.3 million after-tax, or $0.07 per share)
• Bad debt provision on receivables from customers claiming bankruptcy protection totaled $2.2 million ($1.7 million after-tax, or $0.03 per share)
• Non-cash fixed asset impairment charges totaled $3.0 million ($2.4 million after-tax, or $0.04 per share)
• Non-cash gain on extinguishment of convertible senior notes of $4.8 million ($3.8 million after-tax, or $0.06 per share)

Second quarter 2020 highlights and corporate actions included:

• Generated $38.7 million in cash flow from operations
• Amended our revolving credit facility, with existing financial covenants suspended through March 30, 2021 in exchange for a reduction in the facility size to $200 million
• Reduced net debt (defined as total debt less cash) by $39.3 million, including the purchase of $12.0 million principal amount of our convertible senior notes at a 51% discount to par value
• Implemented significant costs saving measures, including an approximate 30% reduction in our U.S. workforce

Oil States' President and Chief Executive Officer, Cindy B. Taylor, stated,

"As we projected on our first quarter earnings call held at the end of April, the market dislocations caused by the global response to the COVID-19 pandemic have been unprecedented. The impact on the energy industry has been extreme due to the rapid demand destruction for crude oil and the resulting inventory builds across the globe. U.S. land based drilling and completion activity fell sharply during the quarter, with the U.S. rig count declining 64% to a historical low of 265 rigs operating at the close of the second quarter.

"Our Offshore/Manufactured Products segment proved resilient during the second quarter, with revenues increasing 4% due to an increase in project-driven revenues, partially offset by reduced short-cycle sales. Segment EBITDA margins also improved 149 basis points sequentially, reflecting the benefit of closing out projects in backlog efficiently along with cost reduction initiatives implemented. Backlog totaled $235 million as of June 30, 2020, a decline of 12% sequentially. Our bookings totaled $64 million, yielding a book-to-bill ratio for the second quarter of 0.7x, bringing the year-to-date ratio to 0.8x.

"Revenues in our Completion Services and Downhole Technologies businesses declined 56% and 64% sequentially – driven by the steep reduction in industry activity in the U.S. shale play regions due to the low crude oil price environment. During the second quarter, both businesses implemented significant cost reduction measures in response to the material downturn in activity, leading to $4.9 million of severance and downsizing charges being incurred. The full benefit of these cost reduction measures should be realized during the third quarter.

"Importantly, we generated $39 million of cash flow from operations and bought in $12 million principal amount of our convertible senior notes at a 51% discount to par value. Cash on-hand at June 30 totaled $54 million while borrowings outstanding under our credit facility totaled $71 million. We amended our bank credit facility during the second quarter securing a covenant holiday through March 30, 2021 in exchange for reducing the facility size to $200 million. We believe that these actions have stabilized the Company during a very difficult period. We will continue to closely manage our debt, working capital and cash flow generation in the quarters to come."

For earnings history and earnings-related data on Oil States (OIS) click here.