Exhibit 99.1
OIL STATES ANNOUNCES RECORD FIRST QUARTER EARNINGS OF $0.50 PER SHARE
HOUSTON, Texas, April 27 /PRNewswire-FirstCall/ -- Oil States
International, Inc. (NYSE: OIS) today reported a 57% year-over-year increase in
net income for the quarter ended March 31, 2005. Net income for the first
quarter of 2005 increased to $25.3 million, or $0.50 per diluted share, from
$16.2 million, or $0.32 per diluted share, in the first quarter of 2004. Oil
States' revenues and EBITDA (defined as net income plus interest, taxes,
depreciation and amortization) for the first quarter of 2005 increased 63% and
89%, respectively, from last year's results as each business segment generated
improved operating results.(A) The Company generated $331.9 million of revenues
and $52.5 million of EBITDA in the first quarter of 2005 compared to $204.2
million and $27.8 million, respectively, in the first quarter of 2004. Tubular
Services benefited from continued strong U.S. land drilling activity, limited
oil country tubular goods ("OCTG") supplies and the acquisition of the U.S. OCTG
distribution business of Hunting Energy Services, L.P. ("Hunting"), completed in
May 2004. Well Site Services generated increased revenues and EBITDA due to
strong land drilling and Canadian oil sands activity, capital investments made
in the North American drilling and accommodations businesses and contributions
from the Elenburg acquisition completed in February 2005. Offshore Products also
improved significantly year-over-year as volumes and margins expanded. The
Company's effective tax rate in the first quarter of 2005 was 36.9% compared to
an effective tax rate of 8.6% in the first quarter of 2004. The 2004 quarter
included the Company's recognition of a $5.4 million income tax benefit related
to the partial reversal of valuation allowances applied against net operating
loss carryforwards. The Company expects that the effective rate for the full
year 2005 will be approximately 35% - 38%. Capital expenditures during the first
quarter of 2005 totaled $17.1 million.
BUSINESS SEGMENT RESULTS
Well Site Services
Well Site Services generated strong first quarter earnings as year-over-
year activity improved and the segment benefited from recently completed capital
expenditures and acquisitions. Well Site Services' revenues and EBITDA in the
first quarter of 2005 improved by 33% and 35%, respectively, from the first
quarter of 2004. For the first quarter of 2005, revenues and EBITDA from the
Well Site Services segment were $127.6 million and $32.1 million, respectively,
compared to $96.1 million of revenues and $23.8 million of EBITDA in the first
quarter of 2004. This year-over-year increase was primarily due improved results
in the accommodations, land drilling and rental tool businesses. Accommodations'
revenues and EBITDA were up 33% and 28%, respectively, due primarily to
increased utilization, expanded capacity and economies of scale in the oil sands
region of Canada. Land drilling's revenues and EBITDA were
up 58% and 79%, respectively, from the first quarter of 2004 due to incremental
earnings from the seven rigs acquired in the Elenburg acquisition, the
additional rig added to the fleet in Texas and higher dayrates and cash margins.
Overall utilization was slightly lower during the quarter due to normal,
seasonal downtime in the Company's operations in the Rocky Mountains and Ohio.
Revenues and EBITDA from the rental tool business were up 24% and 30%,
respectively, from the first quarter of 2004 due to moderate pricing and
activity improvements. The rental tools business also benefited during the
quarter from acquisitions made in the second and third quarters of 2004.
Offshore Products
Offshore Products reported a much improved first quarter of 2005 with
revenues of $66.5 million and EBITDA of $7.7 million compared to revenues of
$41.9 million and EBITDA of $1.5 million in the first quarter of 2004. This 59%
increase in revenues and 431% increase in EBITDA was primarily the result of
higher activity levels and increased fixed cost absorption. Gross margin for the
first quarter increased to 21% from 17% in the first quarter of 2004. Backlog
was $99.8 million as of March 31, 2005 compared to $97.5 million as of December
31, 2004 and $76.9 million at March 31, 2004.
Tubular Services
Tubular Services generated record quarterly profits in the first quarter
of 2005 as OCTG supply remained constrained and U.S. drilling activity continued
to increase. Tubular Services generated $137.9 million of revenues and $15.4
million of EBITDA in the first quarter of 2005 compared to $66.2 million of
revenues and $4.0 million of EBITDA in the first quarter of 2004. First quarter
gross margin was 13.0% compared to 8.9% in the first quarter of 2004. Tubular
Services also benefited from increases in OCTG mill pricing during the first
quarter, contributions from the May 2004 Hunting acquisition and the overall
year-over-year increase in drilling and completion activity, as the U.S. rig
count increased 14% from the first quarter of 2004. OCTG shipments were 82,000
tons in the first quarter of 2005 compared to 67,300 tons shipped in the first
quarter of 2004. The Company's OCTG inventory at March 31, 2005 was $142.0
million compared to $123.6 million at December 31, 2004 and $59.8 million at
March 31, 2004. As of March 31, 2005, approximately 85% of Oil States' OCTG
inventory was committed to customer orders.
"Oil States had a record first quarter due to strong activity in many of
our key markets as well as the benefits of our recent strategic capital spending
and acquisition programs," stated Douglas E. Swanson, Oil States' President and
Chief Executive Officer. "We were pleased to close the Elenburg acquisition
during the quarter which provides us with a strong base for drilling in the
Rockies. Looking forward, the year 2005 holds great promise for Oil States due
to improved U.S. drilling activity, a recovery in deepwater spending, growth in
the oil sands region of Canada and incremental earnings from the acquisitions
closed over the past year. Second quarter 2005 results, of course, will be lower
than first quarter 2005 results due to the normal seasonal slow-down in Canadian
drilling activity. Our current expectations
for second quarter earnings are in the range of $0.28 to $0.33 per diluted
share." 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, 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. 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, 2004 filed by Oil
States with the SEC on March 2, 2005.
(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.
Oil States International, Inc.
Statements of Operations
(in thousands, except per share amounts)
(unaudited)
Three Months Ended March 31,
----------------------------
2005 2004
------------ ------------
Revenue $ 331,946 $ 204,190
Costs and expenses:
Cost of sales 260,653 161,297
Selling, general and administrative 19,065 14,691
Depreciation and amortization 10,228 8,572
Other expense / (income) (214) 532
Operating income 42,214 19,098
Interest income 131 81
Interest expense (2,314) (1,647)
Other income 46 145
Income before income taxes 40,077 17,677
Income tax expense (14,788) (1,520)
Net income applicable to common stock $ 25,289 $ 16,157
Net income per common share
Basic $ 0.51 $ 0.33
Diluted $ 0.50 $ 0.32
Average shares outstanding
Basic 49,669 49,129
Diluted 50,560 49,754
Segment Data:
Revenues
Well Site Services $ 127,595 $ 96,140
Offshore Products 66,491 41,888
Tubular Services 137,860 66,162
Total Revenues $ 331,946 $ 204,190
EBITDA (A)
Well Site Services $ 32,123 $ 23,758
Offshore Products 7,744 1,459
Tubular Services 15,401 3,975
Corporate / Other (2,780) (1,377)
Total EBITDA $ 52,488 $ 27,815
Operating Income / (Loss)
Well Site Services $ 24,602 $ 17,520
Offshore Products 5,268 (798)
Tubular Services 15,145 3,767
Corporate / Other (2,801) (1,391)
Total Operating Income $ 42,214 $ 19,098
Oil States International, Inc.
Consolidated Balance Sheets
(in thousands)
Mar. 31, 2005 Dec. 31, 2004
------------- -------------
(unaudited) (audited)
Assets
Current assets
Cash $ 21,188 $ 19,740
Accounts receivable 214,766 198,297
Inventory 230,712 209,825
Prepaid and other current assets 6,019 7,322
Total current assets 472,685 435,184
Property, plant and equipment, net 242,686 227,343
Goodwill 272,014 258,046
Other intangible assets, net 7,111 7,108
Other long term assets 6,669 5,931
Total assets $ 1,001,165 $ 933,612
Liabilities and stockholders' equity
Current liabilities
Accounts payable and accrued
liabilities $ 143,695 $ 159,265
Income taxes payable 10,226 5,821
Current debt 576 228
Deferred revenue 27,798 25,420
Other current liabilities 438 2,296
Total current liabilities 182,733 193,030
Long term debt 219,323 173,887
Deferred income taxes 32,299 28,871
Other liabilities 7,708 7,800
Total liabilities 442,063 403,588
Stockholders' equity
Common stock 499 496
Additional paid-in capital 343,691 338,906
Retained earnings 193,469 168,180
Accumulated other comprehensive
income 21,760 22,759
Treasury stock (317) (317)
Total stockholders' equity 559,102 530,024
Total liabilities and stockholders'
equity $ 1,001,165 $ 933,612
Oil States International, Inc.
Additional Quarterly Segment and Operating Data
(unaudited)
Three Months Ended March 31,
----------------------------
2005 2004
------------ ------------
Additional Well Site Services
Financial Data ($ in thousands)
Revenues
Accommodations $ 83,194 $ 62,474
Hydraulic Workover Services 8,490 7,634
Rental Tools 19,057 15,374
Land Drilling 16,854 10,658
Total Revenues $ 127,595 $ 96,140
EBITDA (A)
Accommodations $ 19,838 $ 15,453
Hydraulic Workover Services 1,021 772
Rental Tools 5,889 4,534
Land Drilling 5,375 2,999
Total EBITDA $ 32,123 $ 23,758
Operating Income
Accommodations $ 17,092 $ 13,161
Hydraulic Workover Services 74 (183)
Rental Tools 3,263 2,317
Land Drilling 4,173 2,225
Total Operating Income $ 24,602 $ 17,520
Well Site Services Supplemental
Operating Data
Accommodations Operating Statistics
Average Mandays Served 9,225 9,567
Average Camps Rented
Canadian Side-by-Side Camps 64 56
US Offshore Steel Buildings
(10 foot wide) 119 75
Hydraulic Workover Services
Operating Statistics
Average Units Available 30 30
Utilization 33.5% 27.0%
Average Day Rate ($ in
thousands per day) $ 9.4 $ 10.3
Average Daily Cash Margin
($ in thousands per day) $ 1.9 $ 2.1
Land Drilling Operating
Statistics
Average Rigs Available 23 17
Utilization 86.0% 90.0%
Implied Day Rate ($ in
thousands per day) $ 9.6 $ 7.9
Implied Daily Cash Margin
($ in thousands per day) $ 3.3 $ 2.4
Offshore Products Backlog ($ in millions) $ 99.8 $ 76.9
Tubular Services Operating Data
Shipments (Tons in thousands) 82.0 67.3
Quarter end Inventory ($ in
thousands) $ 141,989 $ 59,757
Oil States International, Inc.
Reconciliation of GAAP to Non-GAAP Financial Information
(in thousands)
(unaudited)
Three Months Ended March 31,
----------------------------
2005 2004
------------ ------------
Net income $ 25,289 $ 16,157
Income tax expense 14,788 1,520
Depreciation and amortization 10,228 8,572
Interest income (131) (81)
Interest expense 2,314 1,647
EBITDA $ 52,488 $ 27,815
SOURCE Oil States International, Inc.
-0- 04/27/2005
/CONTACT: Cindy B. Taylor of Oil States International, Inc.,
+1-713-652-0582/
/Web site: http://www.oilstatesintl.com /