EXHIBIT 99.1
Oil States Announces Second Quarter Earnings of $1.34 Per Share
HOUSTON, Aug. 1, 2011 (GLOBE NEWSWIRE) -- 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 JUNE 30, | SIX MONTHS ENDED 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) | ||
ASSETS | June 30, 2011 | December 31, 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 ½% 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 June 30, | Six Months Ended June 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 Ended June 30, | Six Months Ended 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. | ||||||||||||||
CONTACT: Bradley J. Dodson Oil States International, Inc. 713-652-0582