TO BUSINESS AND ENERGY EDITORS:
Oil States Announces First Quarter Earnings of $1.31 per Share
HOUSTON, April 29 /PRNewswire-FirstCall/ -- Oil States International, Inc.
(NYSE: OIS) today reported net income for the quarter ended March 31, 2008 of
$66.5 million, or $1.31 per diluted share, compared to $52.5 million, or $1.05
per diluted share, reported in the first quarter of 2007. Oil States recognized
year-over-year growth in revenues and EBITDA (defined as net income plus
interest, taxes, depreciation and amortization) of 25% and 28%, respectively, in
the first quarter of 2008.(A)
Significant year-over-year improvements in our oil sands accommodations
business, increased profitability in our Offshore Products segment and
contributions from two rental tool acquisitions completed during the third
quarter of 2007 along with increased activity in Tubular Services led to revenue
and EBITDA growth in the first quarter of 2008. During the quarter, the Company
generated $601.2 million of revenues and $125.8 million of EBITDA compared to
$480.5 million and $98.0 million, respectively, in the first quarter of 2007.
Consolidated operating income in the first quarter of 2008 was $101.3 million
compared to $82.9 million for the corresponding quarter of 2007.
The Company recognized an effective tax rate of 32.7% in the first quarter
of 2008 compared to 34.1% in the first quarter of 2007. The lower effective tax
rate in the first quarter of 2008 was primarily due to lower tax rates
applicable to foreign income. The Company spent $60.8 million in capital
expenditures during the first quarter of 2008 primarily related to expansions to
our rental tool operations and on-going construction of the recently announced
Conklin Lodge as well as continued expansion at Wapasu Lodge, both of which
serve customers in the oil sands region of Canada.
BUSINESS SEGMENT RESULTS
(Unless otherwise noted, the following discussion compares the quarterly
results from the first quarter of 2008 to the results from the first quarter of
2007.)
Well Site Services
For the first quarter of 2008, Well Site Services generated revenues of
$265.6 million and EBITDA of $97.6 million, compared to $178.1 million and $74.0
million, respectively, in the first quarter of 2007, representing year-over-year
increases of 49% and 32%, respectively. The increase in EBITDA was primarily due
to improved results from the oil sands accommodations and contributions from the
two rental tool acquisitions closed in the third quarter of 2007, partially
offset by lower margins from the Company's drilling and rental tools operations.
The accommodations business reported revenues of $146.3 million and EBITDA
of $60.9 million, for the first quarter of 2008, compared to revenues and EBITDA
of $93.6 million and $39.1 million, respectively, in the first quarter of 2007.
Accommodations revenue and EBITDA each increased 56%, primarily due to
contributions from additional room capacity at our major oil sands lodges, which
was up over 70% from ending first quarter 2007 capacity levels. Drilling
services generated revenues and EBITDA of $36.8 million and $11.2 million in the
first quarter of 2008, respectively, compared to $30.9 million of revenues and
EBITDA of $12.7 million in the first quarter 2007. The year-over-year
improvement in revenue was due to higher pricing and drilling rig additions made
in 2007, but was offset by lower utilization in the Rockies caused by seasonal
weather issues and by higher operating costs. Rental tools generated $82.5
million of revenues and $25.5 million of EBITDA in the first quarter of 2008
compared to revenue of $53.6 million and EBITDA of $22.2 million in the first
quarter of 2007. This year-over-year growth was primarily due to two
acquisitions completed in the third quarter of 2007, partially offset by
softness in a few regional markets, isolated project delays and start-up costs
in Mexico.
Offshore Products
The Offshore Products segment reported revenue and EBITDA of
$126.9 million and $24.1 million, respectively, in the first quarter of 2008,
compared to $119.0 million of revenues and $20.4 million in EBITDA in the first
quarter of 2007. Offshore Products' revenues were up 7% and EBITDA was up 18%
year-over-year primarily due to the mix of higher margin bearing and connector
products and improved margins on drilling equipment deliveries. Backlog totaled
$383.5 million at March 31, 2008 which represented a 6% increase from the $362.2
million reported as of December 31, 2007.
Tubular Services
Tubular Services generated revenues of $208.8 million and EBITDA of $10.1
million during the first quarter of 2008 compared to revenues of
$183.4 million and EBITDA of $8.4 million in the first quarter of 2007. Tubular
Services' revenues increased 14% year-over-year while OCTG shipments increased
24% to 127,100 tons in the first quarter of 2008 up from 102,600 tons shipped in
the first quarter of 2007. Partially offsetting the volume increase was lower
realized revenues per ton which decreased 8% year-over-year. However, during the
quarter, OCTG manufacturers announced several price increases which take effect
during the second quarter of 2008. Gross margins in the first quarter of 2008
were flat year-over-year at approximately 6%. The Company's OCTG inventory level
at March 31, 2008 was $190.4 million which was essentially flat with the
December 31, 2007 level of $191.4 million, but down significantly from the March
31, 2007 level of $251.4 million.
"Our lodges and mobile camp equipment working in the oil sands region of
Canada were significant drivers of our growth in the first quarter of 2008,"
stated Cindy B. Taylor, Oil States' President and Chief Executive Officer. "We
are realizing the benefits of our capital expenditures made in our
accommodations business as is reflected in our record results for the quarter.
Additionally, margins improved in our Offshore Products segment which supports
global deepwater infrastructure development. With the current tightness in OCTG
supply coupled with recently announced mill price increases and surcharges, we
expect our Tubular Services segment to generate stronger margins and profits in
the second quarter of 2008. Our current expectation for second quarter 2008
earnings is in a range of $0.90 to $0.97 per diluted share considering the
normal seasonal declines in activity in our Canadian based operations."
Oil States International, Inc. is a diversified oilfield services company.
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 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.
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 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, 2007 filed by Oil States with the
SEC on February 22, 2008.
Oil States International, Inc.
Unaudited Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
(unaudited)
Three Months Ended March 31,
2008 2007
Revenues $601,247 $480,516
Costs and expenses:
Cost of sales 445,085 355,803
Selling, general and administrative expenses 32,107 27,324
Depreciation and amortization expense 22,728 14,419
Other operating expense / (income) (11) 79
Operating income 101,338 82,891
Interest expense (5,227) (4,842)
Interest income 922 926
Equity in earnings of unconsolidated affiliates 1,495 542
Other income 220 114
Income before income taxes 98,748 79,631
Income tax provision (32,281) (27,170)
Net income $66,467 $52,461
Net income per share
Basic $1.34 $1.06
Diluted $1.31 $1.05
Weighted average number of common
shares outstanding
Basic 49,422 49,268
Diluted 50,900 49,994
Oil States International, Inc.
Consolidated Balance Sheets
(in thousands)
Mar. 31, 2008 Dec. 31, 2007
Assets (unaudited) (audited)
Current assets
Cash and cash equivalents $31,235 $30,592
Accounts receivable, net 463,538 450,153
Inventories, net 357,352 349,347
Prepaid expenses and other current assets 24,284 35,575
Total current assets 876,409 865,667
Property, plant and equipment, net 640,499 586,910
Goodwill, net 401,950 391,644
Investments in unconsolidated affiliates 26,163 24,778
Other noncurrent assets 59,557 60,627
Total assets $2,004,578 $1,929,626
Liabilities and stockholders' equity
Current liabilities
Current portion of long-term debt $179,975 $4,718
Accounts payable and accrued liabilities 232,213 239,119
Income taxes 9,472 43
Deferred revenue 54,697 60,910
Other current liabilities 1,082 121
Total current liabilities 477,439 304,911
Long-term debt (B) 326,456 487,102
Deferred income taxes 44,473 40,550
Other liabilities 12,191 12,236
Total liabilities 860,559 844,799
Stockholders' equity
Common stock 523 522
Additional paid-in capital 407,590 402,091
Retained earnings 757,180 690,713
Accumulated other comprehensive income 60,540 73,036
Treasury stock (81,814) (81,535)
Total stockholders' equity 1,144,019 1,084,827
Total liabilities and stockholders' equity $2,004,578 $1,929,626
Oil States International, Inc.
Segment Data
(in thousands)
(unaudited)
Three Months Ended March 31,
2008 2007
Revenues
Accommodations $146,258 $93,553
Rental Tools 82,492 53,639
Drilling and Other 36,804 30,918
Well Site Services 265,554 178,110
Offshore Products 126,922 119,039
Tubular Services 208,771 183,367
Total Revenues $601,247 $480,516
EBITDA (A)
Accommodations $60,906 $39,077
Rental Tools 25,466 22,222
Drilling and Other 11,220 12,750
Well Site Services 97,592 74,049
Offshore Products 24,129 20,436
Tubular Services 10,124 8,353
Corporate / Other (6,064) (4,872)
Total EBITDA $125,781 $97,966
Operating Income / (Loss)
Accommodations $52,808 $34,992
Rental Tools 17,631 17,482
Drilling and Other 6,053 9,994
Well Site Services 76,492 62,468
Offshore Products 21,446 17,608
Tubular Services 9,521 7,734
Corporate / Other (6,121) (4,919)
Total Operating Income $101,338 $82,891
Oil States International, Inc.
Additional Quarterly Segment and Operating Data
(unaudited)
Three Months Ended March 31,
2008 2007
Supplemental Operating Data
Land Drilling Operating Statistics
Average Rigs Available 35 32
Utilization 74.5% 72.4%
Implied Day Rate ($ in thousands per day) $15.5 $14.8
Implied Daily Cash Margin ($ in
thousands per day) $4.5 $6.5
Offshore Products Backlog ($ in millions) $383.5 $373.4
Tubular Services Operating Data
Shipments (Tons in thousands) 127.1 102.6
Quarter end Inventory ($ in thousands) $190,366 $251,449
(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 March 31,
2008 2007
Net income $66,467 $52,461
Income tax expense 32,281 27,170
Depreciation and amortization 22,728 14,419
Interest income (922) (926)
Interest expense 5,227 4,842
EBITDA $125,781 $97,966
(B) As of March 31, 2008, the Company had approximately $177.2 million
available under its revolving credit facility.
SOURCE Oil States International, Inc.