Exhibit 99.1
Oil States Announces First Quarter 2003 Earnings
HOUSTON, April 28 /PRNewswire-FirstCall/ -- Oil States International, Inc.
(NYSE: OIS) today reported a net income increase of 36.3% to $13.4 million, or
$0.27 per diluted share, for the quarter ended March 31, 2003 compared to net
income of $9.8 million, or $0.20 per diluted share, in the first quarter of
2002.
The Company's revenues increased by 23.2% over the first quarter of 2002
due to the rebound in North American drilling activity, continued strong
deepwater development activity and contributions from acquisitions completed
in the third quarter of 2002. Revenues were $185.6 million for the quarter
compared to $150.6 million for the first quarter of 2002. EBITDA (defined as
operating income plus depreciation and amortization expense) increased 44.9%
to $26.8 million in the current quarter compared to $18.5 million for the
first quarter of 2002(A). The Company's effective tax rate in the first
quarter of 2003 was 29.0% compared to an effective tax rate of 22.0% in the
first quarter of 2002. Capital expenditures during the quarter totaled
$5.7 million.
BUSINESS SEGMENT RESULTS
Well Site Services
The Well Site Services segment generated improved results as North
American drilling activity increased by 16.7% on a year over year basis. Well
Site Services' revenues and EBITDA were $78.8 million and $19.5 million,
respectively, in the first quarter of 2003 compared to $66.6 million and
$15.2 million, respectively, in the first quarter of 2002. Although the
Canadian winter drilling season did not begin in earnest until mid-January,
Canadian drilling activity in the first quarter of 2003 reached strong levels
which positively impacted the Company's well site accommodations operations.
The Company's land drilling and rental tool operations benefited during the
quarter from the rebound in US land drilling activity. In addition, the
Company's workover business experienced increased activity during the quarter.
Although asset utilization generally improved in the first quarter of 2003,
the Company was not able to significantly increase prices in any of its Well
Site Services business lines.
Offshore Products
For the first quarter of 2003, Offshore Products generated $57.6 million
of revenues and $7.5 million of EBITDA, compared to $32.7 million of revenues
and $4.4 million of EBITDA in the first quarter of 2002. Gross margins
decreased to 21.6% in the first quarter of 2003 from 25.2% in the first
quarter of 2002 partially due to the Company's recognition during the quarter
of a loss on one of its subsea pipeline projects. Offshore Products' backlog
was $80.9 million at March 31, 2003 compared to $100.1 million at
December 31, 2002 and $87.4 million at March 31, 2002.
Tubular Services
Tubular Services generated $49.2 million of revenues and $1.1 million of
EBITDA in the first quarter of 2003 compared to $51.3 million of revenues and
$0.1 million of EBITDA in the first quarter of 2002. The average US rig count
increased 10.2% to 897 rigs in the first quarter of 2003 compared to
814 average rigs running in the first quarter of 2002. With the rising US
drilling activity, Tubular Services' OCTG shipments increased approximately
12% to 57,000 tons in the first quarter of 2003 compared to 51,000 tons in the
first quarter of 2002. However, the Company's revenues per ton decreased by
approximately 17% due to product mix and lower market prices. As a result,
Tubular Services revenues declined year-over-year by 4.1%. Gross margin for
the first quarter of 2003 was 5.9% versus 4.3% in the first quarter of 2002.
The increase in gross margin was a result of positive mix of customer orders.
OCTG inventory at March 31, 2003 was $65.1 million compared to $37.6 million
at March 31, 2002 and $60.4 million at December 31, 2002. As of March 31,
2003, approximately 64% of Oil States' OCTG inventory was committed to
customer orders.
"North American land drilling activity improved in the first quarter of
2003," stated Douglas E. Swanson, Oil States' President and Chief Executive
Officer. "We benefited from stronger results in our Well Site Services and
Tubular Services segments as North American drilling activity rebounded while
our Offshore Products segment continued to produce strong operating and
financial results. Looking forward, we will be impacted by the normal,
seasonal decline in drilling activity in Canada in the second quarter. We
expect our US drilling-related businesses to continue to benefit from the
strengthening US rig count and for our Offshore Products segment to continue
to perform well given our backlog."
Oil States International, Inc. is a diversified solutions provider for the
oil and gas industry. With locations around the world, Oil States is a
leading manufacturer of products for deepwater production facilities and
subsea pipelines, and a leading supplier of a broad range of services to the
oil and gas industry, including production-related rental tools, work force
accommodations and logistics, oil country tubular goods distribution,
hydraulic workover services and land drilling services. Oil States is
organized in three business segments -- Offshore Products, Tubular Services
and Well Site Services, and is publicly traded on the New York Stock Exchange
under the symbol OIS.
Please visit Oil States International's website at 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 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 other things, risks associated with the general
nature of the oilfield service industry and other factors discussed within the
"Business" section of the Form 10-K for the year ended December 31, 2002 filed
by Oil States with the SEC on March 13, 2003.
(A) The term EBITDA consists of operating income plus depreciation and
amortization expense. 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.
Oil States International, Inc.
Quarterly Statements of Operations
(in thousands, except per share amounts)
(unaudited)
Three Months Ended March 31,
2003 2002
Revenue $185,577 $150,600
Costs and expenses:
Cost of sales 144,968 120,153
Selling, general and administrative 13,753 12,228
Depreciation and amortization 6,458 5,308
Other expense / (income) 52 (283)
Operating income 20,346 13,194
Interest income 70 108
Interest expense (1,691) (1,047)
Other income 107 314
Income before income taxes and
minority interests 18,832 12,569
Income tax expense (5,461) (2,766)
Minority interests, net of taxes (2) 5
Net income applicable to common stock $13,369 $9,808
Net income per common share
Basic $0.28 $0.20
Diluted $0.27 $0.20
Average shares outstanding
Basic 48,463 48,233
Diluted 49,099 48,637
Segment Data:
Revenues
Well Site Services $78,838 $66,593
Offshore Products 57,588 32,737
Tubular Services 49,151 51,270
Total Revenues $185,577 $150,600
EBITDA
Well Site Services $19,533 $15,227
Offshore Products 7,460 4,361
Tubular Services 1,118 117
Corporate / Other (1,307) (1,203)
Total EBITDA $26,804 $18,502
Operating Income / (Loss)
Well Site Services $15,080 $11,420
Offshore Products 5,627 3,016
Tubular Services 959 (27)
Corporate / Other (1,320) (1,215)
Total Operating Income $20,346 $13,194
Oil States International, Inc.
Consolidated Balance Sheets
(in thousands)
(unaudited)
Mar. 31, 2003 Dec. 31, 2002
Assets
Current Assets
Cash $6,611 $11,118
Accounts receivable 138,012 116,875
Inventory 121,993 118,338
Prepaid and other current assets 9,033 9,475
Total current assets 275,649 255,806
Property, plant and equipment, net 168,629 167,146
Goodwill 214,297 213,051
Other long term assets 9,209 8,213
Total assets $667,784 $644,216
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable and accrued liabilities $85,857 $84,049
Income taxes payable 4,072 1,229
Current portion of long term debt 866 913
Deferred Revenue 9,602 8,949
Other current liabilities 1,329 1,402
Total current liabilities 101,726 96,542
Long term debt 133,234 133,292
Deferred income taxes 18,881 18,303
Postretirement healthcare and other benefits 5,268 5,280
Other liabilities 4,019 3,220
Total liabilities 263,128 256,637
Stockholders' equity
Common stock 486 485
Additional paid-in capital 327,889 327,801
Retained earnings 77,755 64,386
Cumulative translation adjustment (1,243) (4,921)
Treasury Stock (231) (172)
Total stockholders' equity 404,656 387,579
Total liabilities and stockholders' equity $667,784 $644,216
Oil States International, Inc.
Additional Segment and Operating Data
(unaudited)
Three Months Ended March 31,
2003 2002
Additional Well Site Services
Financial Data ($ in thousands)
Revenues
Accommodations $51,285 $46,079
Hydraulic Workover Services 9,211 7,594
Rental Tools 10,781 7,648
Land Drilling 7,561 5,272
Total Revenues $78,838 $66,593
EBITDA
Accommodations $12,720 $11,731
Hydraulic Workover Services 2,412 813
Rental Tools 2,813 1,772
Land Drilling 1,588 911
Total EBITDA $19,533 $15,227
Operating Income
Accommodations $11,120 $10,144
Hydraulic Workover Services 1,573 51
Rental Tools 1,461 777
Land Drilling 926 448
Total Operating Income $15,080 $11,420
Well Site Services Supplemental
Operating Data
Accommodations Operating
Statistics
Average Mandays Served 6,951 5,892
Average Camps Rented
Canadian Side-by-Side Camps 54 50
US Offshore Steel Buildings
(10 foot wide) 82 88
Hydraulic Workover Services
Operating Statistics
Average Units Available 27 27
Utilization 32.7% 27.4%
Average Day Rate ($ in thousands per day) $10.2 $11.4
Average Daily Cash Margin ($ in thousands
per day) $3.8 $3.1
Land Drilling Operating Statistics
Average Rigs Available 15 12
Utilization 80.7% 71.5%
Implied Day Rate ($ in thousands per day) $6.9 $6.8
Implied Daily Cash Margin ($ in
thousands per day) $1.6 $1.4
Offshore Products Backlog ($ in millions) $80.9 $87.4
Tubular Services Operating Data
Shipments (Tons in thousands) 57 51
Quarter end Inventory ($ in thousands) $65,057 $37,620