Exhibit 99.1
OIL STATES ANNOUNCES FOURTH QUARTER EARNINGS OF $0.82 PER SHARE
HOUSTON, Feb. 7 /PRNewswire-FirstCall/ -- Oil States International, Inc.
(NYSE: OIS) today reported net income for the quarter ended December 31, 2005 of
$41.4 million, or $0.82 per diluted share. These results compare to $15.5
million, or $0.31 per diluted share, reported in the fourth quarter of 2004. Net
income for the fourth quarter of 2005 included the benefit of a reduction in the
estimated annual effective tax rate and the Company's recognition of a $4.6
million income tax benefit related to the reversal of substantially all of its
remaining valuation allowances applied against net operating loss carryforwards.
The combined tax rate benefit in the quarter totaled approximately $0.13 per
diluted share.
As activity in many of its key markets improved combined with the results of
current year acquisitions and capital expenditures, Oil States recognized
year-over-year growth in revenues and EBITDA (defined as net income plus
interest, taxes, depreciation and amortization) in the fourth quarter of 2005 of
53% and 101%, respectively.(A) The Company generated $447.1 million of revenues
and $72.4 million of EBITDA in the fourth quarter of 2005 compared to $293.1
million and $36.0 million, respectively, in the fourth quarter of 2004. The
improved results were primarily generated by increased volumes and prices in the
Tubular Services segment, increased U.S. drilling activity, incremental benefits
of capital expenditures and acquisitions completed over the past twelve months
and significantly improved Offshore Products results.
This year-over-year improvement was generated by higher earnings from all
business segments. Tubular Services benefited from continued strong U.S. land
drilling activity driving demand for its oil country tubular goods ("OCTG") and
from the acquisition of Phillips Casing and Tubing, L.P. ("Phillips"), completed
in June 2005. Well Site Services reported significantly higher revenues and
EBITDA due to strong U.S. land drilling activity, capital investments made in
the past year and contributions from the Elenburg and Stinger acquisitions
completed in the first half of 2005. Offshore Products also improved
significantly year-over-year as activity increased with the recovery in
deepwater development spending. The Company's effective tax rate in the fourth
quarter of 2005 was 24.8% compared to an effective tax rate of 36.4% in the
fourth quarter of 2004.
For the year ended December 31, 2005, the Company reported net income of
$121.8 million, or $2.41 per diluted share, on revenues of $1.5 billion and
EBITDA of $242.6 million. During 2004, the Company reported net income of $59.4
million, or $1.19 per diluted share, on revenues of $971.0 million and EBITDA of
$132.1 million. This performance represents year-over-year increases in revenues
and EBITDA of 58% and 84%, respectively. As a result, operating income doubled,
increasing to $194.6 million from $95.1 million in 2004. The 2004 results
included the Company's recognition of a $6.9 million income tax benefit related
to the partial reversal of valuation allowances applied against net operating
loss carryforwards. The effective tax rate in 2004 was 33.1% compared to 33.3%
during 2005.
BUSINESS SEGMENT RESULTS
Well Site Services
Well Site Services finished 2005 with significant growth. The fourth quarter
of 2005 benefited from an 18.4% increase in the U.S. rig count, capital
investments made over the past year and acquisitions completed in the segment.
For the fourth quarter of 2005, Well Site Services generated $152.8 million of
revenues and $40.4 million of EBITDA compared to $88.5 million of revenues and
$21.3 million of EBITDA in the fourth quarter of 2004. The 73% year-over-year
increase in revenues and 89% increase in EBITDA at Well Site Services were
primarily due to the acquisition of Stinger in May 2005, higher accommodations
manufacturing activity, improved U.S. drilling and completion activity, benefits
of recent capital expenditures primarily in the drilling services and rental
tools businesses and improved pricing in several product lines.
During the fourth quarter, rental tools generated $44.5 million of revenues
and $16.4 million of EBITDA compared to $18.3 million and $6.4 million,
respectively, in the fourth quarter of 2004. The acquisition of Stinger
contributed $23.7 million of revenues and $10.5 million of EBITDA. Land drilling
reported a 119% year-over-year increase in revenues and 228% increase in EBITDA
due to contributions from the Elenburg acquisition, additional rigs added to the
fleet, pricing improvements and movement from footage to daywork contracts in
its Texas operations. Elenburg contributed $7.5 million of revenues and $2.4
million of EBITDA during the fourth quarter of 2005.
Accommodations' revenues were up 43% year-over-year in the fourth quarter;
however, EBITDA was down 6% due to revenue mix weighted more to lower margin
manufacturing work and increased repair and maintenance costs in Canada incurred
in preparation for the winter drilling season. During the quarter, the Company
also experienced lower than expected activity due to extended warm weather in
Canada and significant holiday downtime.
Offshore Products
During the fourth quarter of 2005, Offshore Products generated revenues of
$76.5 million and EBITDA of $12.4 million compared to revenues of $60.7 million
and EBITDA of $4.9 million in the fourth quarter of 2004 as deepwater
development spending continued to increase. Gross margin percentage for the
fourth quarter increased to 25% from 16% in the fourth quarter of 2004 primarily
due to increased service work and repair products delivered for hurricane
recovery work. At the end of the fourth quarter of 2005, backlog totaled $110.7
million compared to $119.4 million as of September 30, 2005 and $97.5 million as
of December 31, 2004.
Tubular Services
Tubular Services had its fourth consecutive record quarter generating $217.8
million of revenues and $22.5 million of EBITDA compared to $143.9 million of
revenues and $12.7 million of EBITDA in the fourth quarter of 2004. These record
results were primarily due to contributions from the Phillips acquisition,
increased OCTG pricing and increased U.S. drilling activity which strengthened
demand for our tubular products and services. Fourth quarter gross margin
percentage was 11.0% compared to 10.4% in the fourth quarter of 2004. OCTG
shipments during the fourth quarter were 118,600 tons compared to 97,800 tons
shipped in the fourth quarter of 2004. The Company's OCTG inventory as of
December 31, 2005 was $274.2 million compared to $241.5 million at September 30,
2005 and $123.6 million at December 31, 2004. As of December 31, 2005,
approximately 67% of Oil States' OCTG inventory was committed to customer
orders.
"Oil States finished 2005 with strong fourth quarter results as activity
reached record levels in the majority of our markets," stated Douglas E.
Swanson, Oil States' President and Chief Executive Officer. "Overall, we are
expecting another strong year for Oil States in 2006. Our current expectation
for first quarter 2006 earnings is in a range of $0.75 to $0.80 per diluted
share after expensing stock options, which is estimated to reduce first quarter
2006 earnings by approximately $0.02 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.
Oil States International, Inc.
Unaudited Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
---------------------------- ----------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
Revenue $ 447,081 $ 293,102 $ 1,531,636 $ 971,012
Costs and expenses:
Cost of sales 352,556 239,805 1,206,187 774,638
Selling, general and
administrative 22,506 17,733 84,672 64,810
Depreciation and
amortization 13,007 9,511 46,704 35,988
Other expense / (income) (93) (407) (488) 460
Operating income 59,105 26,460 194,561 95,116
Interest income 162 141 475 363
Interest expense (4,589) (2,204) (13,903) (7,667)
Other income 336 26 1,374 956
Income before income
taxes 55,014 24,423 182,507 88,768
Income tax expense (13,649) (8,885) (60,694) (29,406)
Net income applicable to
common stock $ 41,365 $ 15,538 $ 121,813 $ 59,362
Net income per common share
Basic $ 0.84 $ 0.31 $ 2.47 $ 1.20
Diluted $ 0.82 $ 0.31 $ 2.41 $ 1.19
Average shares outstanding
Basic 49,069 49,532 49,344 49,329
Diluted 50,481 50,424 50,479 50,027
Oil States International, Inc.
Consolidated Balance Sheets
(in thousands)
Dec. 31, Sep. 30, Dec. 31,
2005 2005 2004
------------ ------------ ------------
(unaudited) (unaudited) (audited)
Assets
Current assets
Cash $ 15,298 $ 17,329 $ 19,740
Accounts receivable 274,070 250,867 198,297
Inventory 360,926 334,590 209,825
Prepaid and other current
assets 13,450 4,755 7,322
Total current assets 663,744 607,541 435,184
Property, plant and equipment,
net 310,452 290,319 227,343
Goodwill 339,703 340,784 258,046
Other intangible assets, net 14,879 13,979 7,108
Other long term assets 14,094 13,370 5,931
Total assets $ 1,342,872 $ 1,265,993 $ 933,612
Liabilities and stockholders'
equity
Current liabilities
Accounts payable and accrued
liabilities $ 214,504 $ 179,886 $ 159,265
Income taxes payable 7,023 10,084 5,821
Current debt 3,901 3,937 228
Deferred revenue 34,046 29,016 25,420
Other current liabilities 3,223 2,280 2,296
Total current liabilities 262,697 225,203 193,030
Long term debt (B) 402,109 403,038 173,887
Deferred income taxes 35,259 37,570 28,871
Other liabilities 8,823 8,713 7,800
Total liabilities 708,888 674,524 403,588
Stockholders' equity
Common stock 504 503 496
Additional paid-in capital 350,667 348,292 338,906
Retained earnings 289,993 248,628 168,180
Accumulated other comprehensive
income 23,137 24,363 22,759
Treasury stock (30,317) (30,317) (317)
Total stockholders' equity 633,984 591,469 530,024
Total liabilities and stockholders'
equity $ 1,342,872 $ 1,265,993 $ 933,612
Oil States International, Inc.
Segment Data
(in thousands)
(unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
---------------------------- ----------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
Revenues
Accommodations $ 71,984 $ 50,475 $ 287,340 $ 189,998
Drilling Services 26,107 11,905 86,706 46,435
Workover Services 10,173 7,874 39,885 33,557
Rental Tools 44,524 18,265 134,820 66,917
Well Site Services 152,788 88,519 548,751 336,907
Offshore Products 76,502 60,695 271,197 206,791
Tubular Services 217,791 143,888 711,688 427,314
Total Revenues $ 447,081 $ 293,102 $ 1,531,636 $ 971,012
EBITDA (A)
Accommodations $ 10,499 $ 11,115 $ 52,856 $ 43,906
Drilling Services 10,851 3,311 30,934 13,731
Workover Services 2,595 519 8,692 4,544
Rental Tools 16,425 6,401 48,508 20,468
Well Site Services 40,370 21,346 140,990 82,649
Offshore Products 12,439 4,859 36,436 16,042
Tubular Services 22,478 12,717 76,716 41,807
Corporate / Other (2,839) (2,925) (11,503) (8,438)
Total EBITDA $ 72,448 $ 35,997 $ 242,639 $ 132,060
Operating Income / (Loss)
Accommodations $ 6,898 $ 8,600 $ 39,701 $ 33,634
Drilling Services 9,183 2,469 25,167 10,468
Workover Services 1,558 (477) 4,747 641
Rental Tools 12,606 3,811 35,078 10,723
Well Site Services 30,245 14,403 104,693 55,466
Offshore Products 9,902 2,529 26,552 7,225
Tubular Services 21,818 12,476 74,887 40,928
Corporate / Other (2,860) (2,948) (11,571) (8,503)
Total Operating Income $ 59,105 $ 26,460 $ 194,561 $ 95,116
Oil States International, Inc.
Additional Quarterly Segment and Operating Data
(unaudited)
Three Months Ended
December 31,
----------------------------
2005 2004
------------ ------------
Supplemental Operating Data
Accommodations Operating
Statistics
Average Mandays Served 6,009 6,252
Average Camps Rented
Canadian Side-by-Side Camps 34 26
US Offshore Steel Buildings
(10 foot wide) 174 132
Hydraulic Workover Services
Operating Statistics
Average Units Available 29 30
Utilization 31.2% 27.0%
Average Day Rate ($ in
thousands per day) $ 12.2 $ 10.6
Average Daily Cash Margin ($ in
thousands per day) $ 4.0 $ 1.7
Land Drilling Operating
Statistics
Average Rigs Available 27 17
Utilization 90.7% 87.7%
Implied Day Rate ($ in
thousands per day) $ 11.6 $ 8.6
Implied Daily Cash Margin ($ in
thousands per day) $ 5.1 $ 2.6
Offshore Products Backlog ($ in
millions) $ 110.7 $ 97.5
Tubular Services Operating Data
Shipments (Tons in thousands) 118.6 97.8
Quarter end Inventory ($ in
thousands) $ 274,232 $ 123,555
Oil States International, Inc.
Reconciliation of GAAP to Non-GAAP Financial Information
(in thousands)
(unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
---------------------------- ----------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
Net income $ 41,365 $ 15,538 $ 121,813 $ 59,362
Income tax expense 13,649 8,885 60,694 29,406
Depreciation and amortization 13,007 9,511 46,704 35,988
Interest income (162) (141) (475) (363)
Interest expense 4,589 2,204 13,903 7,667
EBITDA $ 72,448 $ 35,997 $ 242,639 $ 132,060
(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.
(B) As of December 31, 2005, the Company had approximately $90.4 million
available under its revolving credit facility.
SOURCE Oil States International, Inc.
-0- 02/07/2006
/CONTACT: Cindy B. Taylor of Oil States International, Inc.,
+1-713-652-0582/
/Web site: http://www.oilstatesintl.com /