EXHIBIT 99.1
Oil States Announces First Quarter Earnings
HOUSTON, April 24, 2013 (GLOBE NEWSWIRE) -- Oil States International, Inc. (NYSE:OIS) reported net income for the quarter ended March 31, 2013 of $102.2 million, or $1.85 per diluted share, which included an after-tax gain of $0.05 per diluted share related to the reversal of an estimated earnout liability associated with a U.S. based acquisition. These results compare to net income of $135.1 million, or $2.43 per diluted share, in the first quarter of 2012, which included a gain of $0.23 per diluted share after-tax from a favorable contract settlement.
The Company generated revenues of $1.1 billion and EBITDA of $228.1 million during the first quarter of 2013, which included a pre-tax gain of $4.0 million related to the liability reversal mentioned above. This compared to revenues of $1.1 billion and EBITDA of $256.7 million in the first quarter of 2012, which included a pre-tax benefit of $17.9 million related to a favorable contract settlement in its U.S. accommodations business (EBITDA(A) defined as net income plus interest, taxes, depreciation and amortization). Consolidated operating income totaled $161.0 million in the current quarter, down from $204.2 million in the first quarter of 2012. Excluding the gains noted above for both the first quarter of 2012 and 2013, EBITDA would have decreased year-over-year by 6% as a result of lower U.S. drilling and completion activity coupled with lower OCTG prices and margins partially offset by organic growth initiatives in the accommodations business, contributions from the Piper Valves and Tempress acquisitions and an increase in drilling and subsea product sales within the offshore products business.
Cindy B. Taylor, Oil States' President and Chief Executive Officer stated, "We were able to report improved earnings on a sequential basis despite lackluster activity during the first quarter of 2013 in our U.S. operations related to onshore drilling and completion activity. We benefited from seasonally stronger Canadian accommodations activity and contributions from the Piper Valves and Tempress acquisitions that closed in 2012."
"We recently announced the construction of The MAC Boggabri Village, our tenth village in Australia, and the opening of Anzac Lodge, our seventh major lodge in the Canadian oil sands region. Investments in both of these facilities are supported by take-or-pay contracts and address our customers' accommodations needs in the metallurgical coal region of Australia and the in-situ oil sands region of Canada."
The Company recognized an effective tax rate of 27.8% in the first quarter of 2013 compared to 28.2% in the first quarter of 2012. The lower effective tax rate in the first quarter of 2013 was primarily due to greater foreign earnings as a percentage of total earnings. Our foreign earnings are taxed at a lower rate than our domestic earnings. The Company invested $107.4 million in capital expenditures during the first quarter of 2013 primarily related to the ongoing expansion of its accommodations business in Canada, Australia and the U.S. in addition to incremental proprietary completion services equipment deployed to service the active U.S. shale plays.
BUSINESS SEGMENT RESULTS
(Unless otherwise noted, the following discussion compares the quarterly results from the first quarter of 2013 to the results from the first quarter of 2012.)
Accommodations
Accommodations generated revenues of $296.7 million and EBITDA of $136.0 million for the first quarter of 2013 compared to revenues of $301.8 million and EBITDA of $148.7 million in the first quarter of 2012. Results for the first quarter of 2013 in the U.S. included $4.0 million of EBITDA related to the reversal of an estimated earnout liability associated with contingent acquisition consideration, and the first quarter of 2012 included $17.9 million of EBITDA related to a U.S. contract settlement. Excluding these gains, the accommodations segment's revenues and EBITDA increased 5% and 1% year-over-year, respectively, primarily due to a 13% year-over-year organic increase in average available lodge and village rooms partially offset by occupancy and utilization declines in Australia and the U.S. Lower occupancy levels at certain Australian villages that began in the third quarter of 2012 due to specific customer mine closures continued to negatively impact our Australian accommodations results. In the U.S., utilization and pricing for our U.S. accommodations were negatively impacted by the stagnant U.S. drilling rig count and increased industry capacity.
Well Site Services
Well site services generated revenues of $177.6 million and EBITDA of $54.0 million in the first quarter of 2013 compared to revenues and EBITDA of $183.0 million and $59.0 million, respectively, in the first quarter of 2012. Revenues and EBITDA decreased 3% and 9% year-over-year, respectively, primarily due to the 12% reduction in U.S. drilling and completion activity, partially offset by contributions from the Tempress acquisition completed in December 2012. Excluding the impact of Tempress, service tickets in our completion services business decreased 7% year-over-year while revenue per ticket increased 6% year-over-year due to strong demand for our higher specification completion equipment and services. Completion services activity was negatively impacted by lower activity levels in most operating regions due to the lower U.S. drilling and completion activity partially offset by increased activity in the Rockies and Bakken regions.
Offshore Products
Offshore products generated revenues and EBITDA of $201.3 million and $35.8 million in the first quarter of 2013 compared to revenues and EBITDA of $185.7 million and $36.1 million in the first quarter of 2012. Revenues increased 8% year-over-year due to contributions from Piper Valves which was acquired in July 2012 in addition to an increase in drilling and subsea product sales; however, EBITDA decreased marginally year-over-year primarily due to product mix. Backlog totaled $564 million at March 31, 2013 compared to $561 million reported at December 31, 2012 and $529 million reported at March 31, 2012. Backlog additions during the quarter included large subsea pipeline equipment orders for Brazil and West Africa.
Tubular Services
Tubular services generated revenues of $393.9 million and EBITDA of $15.9 million during the first quarter of 2013 compared to revenues of $428.5 million and EBITDA of $23.5 million in the first quarter of 2012. Despite the 1% year-over-year increase in tons shipped, revenues and EBITDA decreased 8% and 33% year-over-year, respectively, primarily due to the 12% decrease in U.S. drilling activity, sales mix and reduced mill pricing. Gross margin as a percent of revenues in the first quarter of 2013 decreased to 5.1% from 6.3% in the first quarter of 2012 primarily due to timing of shipments for key customers and market pressure on margins. The Company's OCTG inventory declined 6% sequentially to $421.7 million at March 31, 2013.
Oil States International, Inc. is a diversified oilfield services company and a leading integrated provider of remote site accommodations with prominent market positions in the Canadian oil sands and the Australian natural resource regions. Oil States is also a leading manufacturer of products for deepwater production facilities and subsea pipelines as well as a provider of completion services, 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 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, 2012 filed by Oil States with the SEC on February 20, 2013.
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| OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES |
| | | |
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
| (In Thousands, Except Per Share Amounts) |
| | | |
| | THREE MONTHS ENDED |
| | MARCH 31, |
| | 2013 | 2012 |
| | | |
| | | |
| Revenues | $1,069,440 | $1,098,992 |
| | | |
| Costs and expenses: | | |
| Cost of sales and services | 792,341 | 795,797 |
| Selling, general and administrative expenses | 54,888 | 47,739 |
| Depreciation and amortization expense | 66,915 | 50,665 |
| Other operating (income) expense | (5,691) | 544 |
| | 908,453 | 894,745 |
| Operating income | 160,987 | 204,247 |
| | | |
| Interest expense, net of capitalized interest | (20,090) | (17,944) |
| Interest income | 563 | 297 |
| Equity in earnings (loss) of unconsolidated affiliates | (707) | 420 |
| Other income | 1,270 | 1,735 |
| Income before income taxes | 142,023 | 188,755 |
| Income tax provision | (39,439) | (53,283) |
| Net income | 102,584 | 135,472 |
| Less: Net income attributable to noncontrolling interest | 395 | 407 |
| Net income attributable to Oil States International, Inc. | $102,189 | $135,065 |
| | | |
| Net income per share attributable to Oil States International, Inc. common stockholders: | | |
| Basic | $1.86 | $2.63 |
| Diluted | $1.85 | $2.43 |
| | | |
| Weighted average number of common shares outstanding: | | |
| Basic | 54,808 | 51,430 |
| Diluted | 55,373 | 55,557 |
| |
| OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES |
| | | |
| CONSOLIDATED BALANCE SHEETS |
| (In Thousands) |
| | | |
| | | |
| | MARCH 31, | DECEMBER 31, |
| ASSETS | 2013 | 2012 |
| | (UNAUDITED) | |
| | | |
| Current assets: | | |
| Cash and cash equivalents | $325,969 | $253,172 |
| Accounts receivable, net | 795,355 | 832,785 |
| Inventories, net | 680,494 | 701,496 |
| Prepaid expenses and other current assets | 24,408 | 38,639 |
| Total current assets | 1,826,226 | 1,826,092 |
| | | |
| Property, plant, and equipment, net | 1,885,144 | 1,852,126 |
| Goodwill, net | 521,426 | 520,818 |
| Other intangible assets, net | 142,525 | 146,103 |
| Other noncurrent assets | 93,699 | 94,823 |
| Total assets | $4,469,020 | $4,439,962 |
| | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | |
| | | |
| Current liabilities: | | |
| Accounts payable | $272,303 | $279,933 |
| Accrued liabilities | 96,643 | 107,906 |
| Income taxes | 27,257 | 29,588 |
| Current portion of long-term debt and capitalized leases | 30,245 | 30,480 |
| Deferred revenue | 71,540 | 66,311 |
| Other current liabilities | 8,394 | 4,314 |
| Total current liabilities | 506,382 | 518,532 |
| | | |
| Long-term debt and capitalized leases (1) | 1,241,663 | 1,279,805 |
| Deferred income taxes | 119,913 | 129,235 |
| Other noncurrent liabilities | 45,842 | 46,590 |
| Total liabilities | 1,913,800 | 1,974,162 |
| | | |
| Stockholders' equity: | | |
| Oil States International, Inc. stockholders' equity: | | |
| Common stock, $.01 par value, 200,000,000 shares authorized, 58,799,583 shares and 58,488,299 shares issued, respectively, and 54,961,645 shares and 54,695,473 shares outstanding, respectively | 588 | 585 |
| Additional paid-in capital | 599,171 | 586,070 |
| Retained earnings | 2,001,384 | 1,899,195 |
| Accumulated other comprehensive income | 84,968 | 107,097 |
| Common stock held in treasury at cost, 3,837,938 and 3,792,826 shares, respectively | (132,135) | (128,542) |
| Total Oil States International, Inc. stockholders' equity | 2,553,976 | 2,464,405 |
| Noncontrolling interest | 1,244 | 1,395 |
| Total stockholders' equity | 2,555,220 | 2,465,800 |
| Total liabilities and stockholders' equity | $4,469,020 | $4,439,962 |
| | | |
| (1) As of March 31, 2013, the Company had approximately $1.0 billion available under its credit facilities. |
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| OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES |
| | | |
| UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
| (In Thousands) |
| | | |
| | THREE MONTHS |
| | ENDED MARCH 31, |
| | 2013 | 2012 |
| | | |
| Cash flows from operating activities: | | |
| Net income | $102,584 | $135,472 |
| Adjustments to reconcile net income to net cash provided by operating activities: | | |
| Depreciation and amortization | 66,915 | 50,665 |
| Deferred income tax provision | (8,977) | 1,727 |
| Excess tax benefits from share-based payment arrangements | (3,322) | (5,175) |
| Gains on disposals of assets | (177) | (1,326) |
| Non-cash compensation charge | 6,285 | 4,399 |
| Accretion of debt discount | ---- | 2,035 |
| Amortization of deferred financing costs | 2,019 | 1,800 |
| Other, net | (3,162) | (18) |
| Changes in operating assets and liabilities, net of effect from acquired businesses: | | |
| Accounts receivable | 29,000 | (105,007) |
| Inventories | 17,824 | (71,062) |
| Accounts payable and accrued liabilities | (16,245) | 21,445 |
| Taxes payable | 21,155 | 33,731 |
| Other current assets and liabilities, net | 4,721 | (1,469) |
| Net cash flows provided by operating activities | 218,620 | 67,217 |
| | | |
| Cash flows from investing activities: | | |
| Capital expenditures, including capitalized interest | (107,397) | (101,402) |
| Proceeds from disposition of property, plant and equipment | 2,075 | 1,636 |
| Other, net | 108 | (1,189) |
| Net cash flows used in investing activities | (105,214) | (100,955) |
| | | |
| Cash flows from financing activities: | | |
| Revolving credit borrowings and (repayments), net | (29,219) | 29,941 |
| Term loan repayments | (7,526) | (7,526) |
| Debt and capital lease repayments | (110) | (2,183) |
| Issuance of common stock from share-based payment arrangements | 3,498 | 6,775 |
| Excess tax benefits from share-based payment arrangements | 3,322 | 5,175 |
| Shares added to treasury stock as a result of net share settlements due to vesting of restricted stock | (3,593) | (3,410) |
| Other, net | (200) | (15) |
| Net cash flows provided by (used in) financing activities | (33,828) | 28,757 |
| | | |
| Effect of exchange rate changes on cash | (6,770) | 3,966 |
| Net change in cash and cash equivalents from continuing operations | 72,808 | (1,015) |
| Net cash used in discontinued operations – operating activities | (11) | (55) |
| Cash and cash equivalents, beginning of period | 253,172 | 71,721 |
| Cash and cash equivalents, end of period | $325,969 | $70,651 |
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| Oil States International, Inc. |
| Segment Data |
| (in thousands) |
| (unaudited) |
| | | |
| | Three Months Ended March 31, |
| | 2013 | 2012 |
| | | |
| Revenues | | |
| Completion services | $137,366 | $135,554 |
| Drilling services | 40,203 | 47,407 |
| | | |
| Well site services | 177,569 | 182,961 |
| Accommodations (1) | 296,667 | 301,820 |
| Offshore products | 201,290 | 185,720 |
| Tubular services | 393,914 | 428,491 |
| Total revenues | $1,069,440 | $1,098,992 |
| | | |
| EBITDA (A) | | |
| Completion services | $44,022 | $46,286 |
| Drilling services | 9,990 | 12,753 |
| | | |
| Well site services | 54,012 | 59,039 |
| Accommodations (1) | 136,026 | 148,677 |
| Offshore products | 35,762 | 36,145 |
| Tubular services | 15,865 | 23,538 |
| Corporate and eliminations | (13,595) | (10,739) |
| Total EBITDA | $228,070 | $256,660 |
| | | |
| Operating income / (loss) | | |
| Completion services | $28,659 | $33,794 |
| Drilling services | 4,080 | 7,459 |
| | | |
| Well site services | 32,739 | 41,253 |
| Accommodations (1) | 94,906 | 119,025 |
| Offshore products | 32,136 | 32,501 |
| Tubular services | 15,035 | 22,421 |
| Corporate and eliminations | (13,829) | (10,953) |
| Total operating income | $160,987 | $204,247 |
| | | |
| (1) The revenues of our accommodations segment for the three months ended March 31, 2012 include $18.3 million related to a favorable contract settlement in the U.S. accommodations business. The EBITDA and operating income of our accommodations segment for the three months ended March 31, 2012 includes a pre-tax benefit of $17.9 million related to the settlement. The EBITDA and operating income of our accommodations segment for the three months ended March 31, 2013 includes a pre-tax benefit of $4.0 million related to the reduction of an estimated earnout liability. | | |
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| Oil States International, Inc. |
| Additional Quarterly Segment and Operating Data |
| (unaudited) |
| | | |
| | Three Months Ended March 31, |
| | 2013 | 2012 |
| | | |
| Supplemental operating data | | |
| Lodge/village revenues ($ in thousands) | $213,728 | $196,773 |
| Other accommodations revenues ($ in thousands) (1) | 82,939 | 105,047 |
| Total accommodations revenues ($ in thousands) | $296,667 | $301,820 |
| | | |
| Average available lodge/village rooms | 20,009 | 17,634 |
| Lodge/village revenues per available room | $119 | $123 |
| | | |
| Offshore products backlog ($ in millions) | $564.4 | $529.3 |
| | | |
| Completion services job tickets | 12,300 | 12,509 |
| Average revenue per ticket ($ in thousands) | $11.2 | $10.8 |
| | | |
| Tubular services operating data | | |
| Shipments (tons in thousands) | 207.9 | 205.4 |
| Quarter end inventory ($ in millions) | $421.7 | $473.1 |
| | | |
| Land drilling operating statistics | | |
| Average rigs available | 33 | 33 |
| Utilization | 72.4% | 87.7% |
| Implied day rate ($ in thousands per day) | $18.5 | $17.8 |
| Implied daily cash margin ($ in thousands per day) | $4.9 | $5.0 |
| | | |
| (1) Includes contract settlement revenue for the quarter ended March 31, 2012. | | |
| | | |
| (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. |
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| Oil States International, Inc. |
| Reconciliation of GAAP to Non-GAAP Financial Information |
| (in thousands) |
| (unaudited) |
| | | |
| | Three Months Ended March 31, |
| | 2013 | 2012 |
| | | |
| Net income attributable to Oil States | $102,189 | $135,065 |
| Income tax provision | 39,439 | 53,283 |
| Depreciation and amortization | 66,915 | 50,665 |
| Interest income | (563) | (297) |
| Interest expense | 20,090 | 17,944 |
| EBITDA | $228,070 | $256,660 |
CONTACT: Company Contact:
Bradley J. Dodson
Oil States International, Inc.
713-652-0582
Patricia Gil
Oil States International, Inc.
713-470-4860