EXHIBIT 99.1
Oil States Announces Second Quarter Earnings and Record Offshore Products Backlog
HOUSTON, July 31, 2012 (GLOBE NEWSWIRE) -- Oil States International, Inc. (NYSE:OIS) reported net income for the quarter ended June 30, 2012 of $111.2 million, or $2.01 per diluted share. These results compare to net income of $74.2 million, or $1.34 per diluted share, in the second quarter of 2011.
The Company generated revenues of $1.1 billion and EBITDA of $227.8 million during the second quarter of 2012, compared to revenues of $820.3 million and EBITDA of $160.7 million in the second quarter of 2011 (EBITDA(A) is defined as net income plus interest, taxes, depreciation and amortization). The 33% year-over-year increase in revenues and 42% year-over-year increase in EBITDA resulted from organic growth initiatives in the accommodations and well site services segments, increased sales of deepwater capital equipment, higher U.S. land drilling and completion activity and a resurgence in exploration and production in the U.S. Gulf of Mexico. Consolidated operating income totaled $169.3 million in the current quarter, up from $115.2 million in the second quarter of 2011. Second quarter 2012 results included a pre-tax gain of $2.5 million, or $0.03 per diluted share after-tax, related to insurance proceeds received during the quarter in excess of net book value for a land drilling rig that was lost in a fire that occurred in the first quarter of 2012.
Cindy B. Taylor, Oil States' President and Chief Executive Officer stated, "All of our business segments achieved growth on a year-over-year basis. Compared with the same quarter in 2011, we benefitted from organic room count expansions in all of our major accommodations markets, increased sales of deepwater capital equipment, and the increase in U.S. drilling and completion activity, both onshore and offshore."
"We reported higher RevPAR levels in accommodations in the second quarter of 2012 due to continued nearly full occupancy levels at our Canadian lodges and Australian villages. Margins expanded in our offshore products segment and backlog reached a new record totaling $562 million at June 30, 2012. Bidding and quoting activity remains robust in our offshore products segment, particularly for subsea pipeline and floating production facility products. Our well site services segment performed well during the second quarter despite regional volatility created by the softening of certain commodity prices. In our OCTG segment, demand from customers was very strong as shipments increased 33% year-over-year due to market share gains, increased offshore drilling activity and the use of higher specification tubulars in shale basins across the United States."
The Company recognized an effective tax rate of 28.6% in the second quarter of 2012 compared with 27.9% in the second quarter of 2011. The modestly higher effective tax rate in the second quarter of 2012 was primarily due to higher domestic earnings as a percentage of total earnings.
The Company invested $98.6 million in capital expenditures during the second quarter of 2012 primarily related to the ongoing expansion of its accommodations business, the addition of rental equipment deployed to service the active U.S. shale plays and facility and equipment investments in its offshore products segment. The Company currently expects to spend approximately $600 million to $700 million in capital expenditures during 2012.
For the first half of 2012, the Company reported revenues of $2.2 billion, EBITDA of $484.4 million and net income of $246.3 million, or $4.45 per diluted share. The year-to-date results for 2012 included a pre-tax benefit of $17.9 million, or $0.23 per diluted share after-tax, related to a favorable contract settlement in its U.S. accommodations business recognized in the first quarter of 2012 and a pre-tax gain of $2.5 million, or $0.03 per diluted share after-tax, related to insurance proceeds received during the second quarter for the land drilling rig that was lost in a fire. 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.
BUSINESS SEGMENT RESULTS
(Unless otherwise noted, the following discussion compares the quarterly results from the second quarter of 2012 to the results from the second quarter of 2011.)
Accommodations
Accommodations generated revenues of $261.0 million and EBITDA of $114.9 million for the second quarter of 2012 compared to revenues and EBITDA of $202.9 million and $83.9 million in the second quarter of 2011. Revenues increased 29% and EBITDA increased 37% year-over-year due to a 29% year-over-year increase in average available rooms and a 10% year-over-year increase in RevPAR related to higher occupancy levels at the Company's major lodges and villages. EBITDA margins increased to 44% in the second quarter of 2012 compared to 41% in the second quarter of 2011 primarily due to improved year-over-year RevPAR.
Well Site Services
Well site services generated revenues of $176.5 million and EBITDA of $58.5 million in the second quarter of 2012 compared to revenues and EBITDA of $153.7 million and $46.7 million, respectively, in the second quarter of 2011. Revenues increased 15% and EBITDA increased 25% year-over-year primarily due to the increase in U.S. drilling and completion activity and improved cost absorption, leading to expanded margins for both the rental tools and drilling businesses. EBITDA margins for the segment increased to 33% in the second quarter of 2012 compared to 30% in the second quarter of 2011 primarily due to increased activity levels and improved cost absorption. Our rental tools business benefited from increased U.S. completion activity and greater service intensity in the active oil and liquids-rich shale basins. The number of service tickets and revenue per ticket increased 6% and 5% year-over-year, respectively, as the industry favored our higher specification equipment, predominantly in the Bakken, Eagle Ford, and Permian Basin regions, partially offset by lower activity in the Barnett and Haynesville regions resulting from significantly lower natural gas prices.
Offshore Products
Offshore products generated revenues and EBITDA of $191.6 million and $41.0 million in the second quarter of 2012 compared to revenues and EBITDA of $131.7 million and $21.9 million in the second quarter of 2011. Revenues and EBITDA increased 45% and 87% year-over-year, respectively, primarily due to higher levels of manufacturing and service activity along with an improved revenue mix favoring our production equipment and connector products. EBITDA margins increased to 21% in the second quarter of 2012 compared to 17% in the second quarter of 2011 primarily due to improved revenue mix of higher margin production equipment and connector sales coupled with improved cost absorption. Backlog reached an all-time record level, totaling $562 million at June 30, 2012 compared to $529 million reported at March 31, 2012 and $519 million reported at June 30, 2011. Subsequent to the end of the quarter, the Company completed the acquisition of Piper Valve Systems for $48 million, further leveraging its technology, product offerings and subsea capabilities.
Tubular Services
Tubular services generated revenues of $461.9 million and EBITDA of $25.0 million during the second quarter of 2012 compared to revenues and EBITDA of $332.0 million and $17.6 million, respectively, in the second quarter of 2011. Revenues and EBITDA improved 39% and 42% year-over-year, respectively, primarily due to the 33% year-over-year increase in OCTG shipments, which surpassed the 8% year-over-year increase in the U.S. rig count. The increase in shipments was attributable to market share gains in the U.S., a recovery in demand in the U.S. Gulf of Mexico and greater demand for higher specification tubulars in shale basins across the United States. Gross margin as a percent of revenues remained at high levels in the second quarter of 2012 with 6.3% compared to 6.5% reported in the second quarter of 2011. The Company exited the quarter with $476.6 million of OCTG inventories at June 30, 2012, up $3.5 million from March 31, 2012.
Oil States International, Inc. is a diversified oilfield services company and 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.
The Oil States International, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6058
For more information on the Company, please visit Oil States International's website at http://www.oilstatesintl.com.
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 are 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 in the "Business" and "Risk Factors" sections of the Form 10-K for the year ended December 31, 2011 filed by Oil States with the SEC on February 17, 2012 and the "Risk Factors" section of the form 10-Q for the three months ended March 31, 2012 filed by Oil States with the SEC on April 30, 2012.
| 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, |
| | 2012 | 2011 | 2012 | 2011 |
| | | | | |
| | | | | |
| Revenues | $ 1,091,088 | $ 820,317 | $ 2,190,080 | $ 1,580,758 |
| | | | | |
| Costs and expenses: | | | | |
| Cost of sales and services | 819,164 | 616,778 | 1,614,961 | 1,191,176 |
| Selling, general and administrative expenses | 48,853 | 42,765 | 96,592 | 86,472 |
| Depreciation and amortization expense | 54,218 | 45,238 | 104,884 | 90,390 |
| Other operating (income) expense | (407) | 373 | 137 | 2,781 |
| | 921,828 | 705,154 | 1,816,574 | 1,370,819 |
| Operating income | 169,260 | 115,163 | 373,506 | 209,939 |
| | | | | |
| Interest expense, net of capitalized interest | (17,937) | (12,532) | (35,880) | (22,781) |
| Interest income | 242 | 235 | 539 | 1,248 |
| Equity in earnings of unconsolidated affiliates | 220 | 2 | 640 | 53 |
| Other income | 4,308 | 488 | 6,044 | 631 |
| Income before income taxes | 156,093 | 103,356 | 344,849 | 189,090 |
| Income tax expense | (44,617) | (28,887) | (97,901) | (52,270) |
| Net income | 111,476 | 74,469 | 246,948 | 136,820 |
| Less: Net income attributable to noncontrolling interest | 242 | 226 | 650 | 500 |
| Net income attributable to Oil States International, Inc. | $ 111,234 | $ 74,243 | $ 246,298 | $ 136,320 |
| | | | | |
| Net income per share attributable to Oil States International, Inc. common stockholders | | | | |
| Basic | $ 2.15 | $ 1.45 | $ 4.78 | $ 2.67 |
| Diluted | $ 2.01 | $ 1.34 | $ 4.45 | $ 2.48 |
| | | | | |
| Weighted average number of common shares outstanding: | | | | |
| Basic | 51,637 | 51,231 | 51,533 | 51,083 |
| Diluted | 55,251 | 55,270 | 55,404 | 55,061 |
| OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES |
| |
| Consolidated Balance Sheets |
| (In Thousands) |
| | | |
ASSETS | JUNE 30,
2012 | DECEMBER 31,
2011 |
| | (UNAUDITED) | |
| | | |
| Current assets: | | |
| Cash and cash equivalents | $ 114,391 | $ 71,721 |
| Accounts receivable, net | 831,424 | 732,240 |
| Inventories, net | 733,803 | 653,698 |
| Prepaid expenses and other current assets | 21,568 | 32,000 |
| Total current assets | 1,701,186 | 1,489,659 |
| | | |
| Property, plant, and equipment, net | 1,657,189 | 1,557,088 |
| Goodwill, net | 467,099 | 467,450 |
| Other intangible assets, net | 121,014 | 127,602 |
| Other noncurrent assets | 63,201 | 61,842 |
| Total assets | $ 4,009,689 | $ 3,703,641 |
| | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | |
| | | |
| Current liabilities: | | |
| Accounts payable | $ 297,476 | $ 252,209 |
| Accrued liabilities | 88,265 | 96,748 |
| Income taxes | 25,617 | 10,395 |
| Current portion of long-term debt and capitalized leases | 32,262 | 34,435 |
| Deferred revenue | 71,779 | 75,497 |
| Other current liabilities | 4,322 | 5,665 |
| Total current liabilities | 519,721 | 474,949 |
| | | |
| Long-term debt and capitalized leases (B) | 1,130,592 | 1,142,505 |
| Deferred income taxes | 107,358 | 97,377 |
| Other noncurrent liabilities | 26,449 | 25,538 |
| Total liabilities | 1,784,120 | 1,740,369 |
| | | |
| Stockholders' equity: | | |
| Oil States International, Inc. stockholders' equity: | | |
Common stock, $.01 par value, 200,000,000 shares authorized,
55,266,720 shares and 54,803,539 shares issued, respectively, and
51,701,473 shares and 51,288,750 shares outstanding, respectively |
553 |
548 |
| Additional paid-in capital | 568,729 | 545,730 |
| Retained earnings | 1,696,884 | 1,450,586 |
| Accumulated other comprehensive income | 71,334 | 74,371 |
| Treasury stock, at cost, 3,565,247 and 3,514,789 shares, respectively | (113,171) | (109,079) |
| Total Oil States International, Inc. stockholders' equity | 2,224,329 | 1,962,156 |
| Noncontrolling interest | 1,240 | 1,116 |
| Total stockholders' equity | 2,225,569 | 1,963,272 |
| Total liabilities and stockholders' equity | $ 4,009,689 | $ 3,703,641 |
| |
| |
| OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES |
| |
| Unaudited Condensed Consolidated Statements of Cash Flows |
| (In Thousands) |
| | | |
| | SIX MONTHS
ENDED JUNE 30, |
| | 2012 | 2011 |
| | | |
| Cash flows from operating activities: | | |
| Net income | $ 246,948 | $ 136,820 |
| Adjustments to reconcile net income to net cash provided by operating activities: | | |
| Depreciation and amortization | 104,884 | 90,390 |
| Deferred income tax provision | 4,991 | 10,788 |
| Excess tax benefits from share-based payment arrangements | (6,014) | (6,198) |
| Gains on disposals of assets | (4,851) | (763) |
| Non-cash compensation charge | 9,189 | 7,198 |
| Accretion of debt discount | 4,106 | 3,823 |
| Amortization of deferred financing costs | 3,600 | 2,914 |
| Other, net | (547) | (126) |
| Changes in operating assets and liabilities, net of effect from acquired businesses: | | |
| Accounts receivable | (99,243) | (66,481) |
| Inventories | (79,781) | (88,781) |
| Accounts payable and accrued liabilities | 36,199 | 7,802 |
| Taxes payable | 29,137 | 9,977 |
| Other current assets and liabilities, net | 2,707 | (10,728) |
| Net cash flows provided by operating activities | 251,325 | 96,635 |
| | | |
| Cash flows from investing activities: | | |
| Capital expenditures, including capitalized interest | (199,983) | (230,253) |
| Acquisitions of businesses, net of cash acquired | -- | (212) |
| Proceeds from disposition of property, plant and equipment | 5,225 | 1,435 |
| Other, net | (1,650) | (2,285) |
| Net cash flows used in investing activities | (196,408) | (231,315) |
| | | |
| Cash flows from financing activities: | | |
| Revolving credit borrowings and (repayments), net | (951) | (428,682) |
| 6 1/2% senior notes issued | -- | 600,000 |
| Term loan repayments | (14,944) | (7,494) |
| Debt and capital lease repayments | (2,312) | (587) |
| Issuance of common stock from share-based payment arrangements | 7,801 | 9,792 |
| Excess tax benefits from share-based payment arrangements | 6,014 | 6,198 |
| Payment of financing costs | (23) | (12,640) |
| Tax withholdings related to net share settlements of restricted stock | (4,092) | (2,456) |
| Net cash flows provided by (used in) financing activities | (8,507) | 164,131 |
| | | |
| Effect of exchange rate changes on cash | (3,461) | (2,399) |
| Net increase in cash and cash equivalents from continuing operations | 42,949 | 27,052 |
| Net cash used in discontinued operations – operating activities | (279) | (98) |
| Cash and cash equivalents, beginning of period | 71,721 | 96,350 |
| | | |
| Cash and cash equivalents, end of period | $ 114,391 | $ 123,304 |
| |
| |
| OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES |
| Segment Data |
| (In Thousands) |
| (Unaudited) |
| | | | | |
| | Three Months Ended June 30, | Six Months Ended June 30, |
| | 2012 | 2011 | 2012 | 2011 |
| | | | | |
| Revenues | | | | |
| Rental tools | $125,079 | $112,658 | $260,633 | $220,189 |
| Drilling services | 51,456 | 40,998 | 98,862 | 74,103 |
| | | | | |
| Well site services | 176,535 | 153,656 | 359,495 | 294,292 |
| Accommodations | 260,966 | 202,943 | 562,786 | 400,041 |
| Offshore products | 191,638 | 131,742 | 377,358 | 260,184 |
| Tubular services | 461,949 | 331,976 | 890,441 | 626,241 |
| Total revenues | $1,091,088 | $820,317 | $2,190,080 | $1,580,758 |
| | | | | |
| EBITDA (A) | | | | |
| Rental tools | $41,582 | $35,395 | $87,868 | $69,581 |
| Drilling services | 16,961 | 11,348 | 29,713 | 18,597 |
| | | | | |
| Well site services | 58,543 | 46,743 | 117,581 | 88,178 |
| Accommodations | 114,917 | 83,938 | 263,594 | 159,180 |
| Offshore products | 41,033 | 21,921 | 77,178 | 41,996 |
| Tubular services | 24,975 | 17,646 | 48,512 | 31,174 |
| Corporate and eliminations | (11,704) | (9,583) | (22,441) | (20,015) |
| Total EBITDA | $227,764 | $160,665 | $484,424 | $300,513 |
| | | | | |
| Operating income / (loss) | | | | |
| Rental tools | $28,974 | $25,103 | $62,768 | $49,493 |
| Drilling services | 8,358 | 6,370 | 15,817 | 8,605 |
| | | | | |
| Well site services | 37,332 | 31,473 | 78,585 | 58,098 |
| Accommodations | 83,207 | 57,750 | 202,232 | 106,723 |
| Offshore products | 36,589 | 18,770 | 69,090 | 35,520 |
| Tubular services | 24,054 | 16,956 | 46,475 | 30,002 |
| Corporate and eliminations | (11,922) | (9,786) | (22,876) | (20,404) |
| Total operating income | $169,260 | $115,163 | $373,506 | $209,939 |
| |
| |
| OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES |
| Additional Quarterly Segment and Operating Data |
| (Unaudited) |
| | | |
| | Three Months Ended June 30, |
| | 2012 | 2011 |
| | | |
| Supplemental operating data | | |
| | | |
| Lodge/village revenues ($ in thousands) | $201,825 | $143,294 |
| Other accommodations revenues ($ in thousands) | 59,141 | 59,649 |
| Total accommodations revenues ($ in thousands) | $260,966 | $202,943 |
| | | |
| Average available lodge/village rooms | 18,029 | 14,020 |
| Lodge/village revenues per available room | $123 | $112 |
| | | |
| Offshore products backlog ($ in millions) | $562.3 | $518.6 |
| | | |
| Rental tool job tickets | 12,250 | 11,599 |
| Average revenue per ticket ($ in thousands) | $10.2 | $9.7 |
| | | |
| Tubular services operating data | | |
| Shipments (tons in thousands) | 230.0 | 173.3 |
| Quarter end inventory ($ in millions) | $476.6 | $377.8 |
| | | |
| Land drilling operating statistics | | |
| Average rigs available | 33 | 34 |
| Utilization | 92.5% | 80.3% |
| Implied day rate ($ in thousands per day) | $18.5 | $16.5 |
| Implied daily cash margin ($ in thousands per day) | $5.4 | $4.8 |
| | | |
| (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 and should not be considered 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. AND SUBSIDIARIES |
| Reconciliation of GAAP to Non-GAAP Financial Information |
| (In Thousands) |
| (Unaudited) |
| | | | | |
| | Three Months Ended June 30, | Six Months Ended June 30, |
| | 2012 | 2011 | 2012 | 2011 |
| | | | | |
| Net income / (loss) | $111,234 | $74,243 | $246,298 | $136,320 |
| Income tax provision | 44,617 | 28,887 | 97,901 | 52,270 |
| Depreciation and amortization | 54,218 | 45,238 | 104,884 | 90,390 |
| Interest income | (242) | (235) | (539) | (1,248) |
| Interest expense | 17,937 | 12,532 | 35,880 | 22,781 |
| EBITDA | $227,764 | $160,665 | $484,424 | $300,513 |
| | | | | |
| (B) As of June 30, 2012, the Company had approximately $767 million available under its credit facilities. |
CONTACT: Bradley J. Dodson
Oil States International, Inc.
713-652-0582