OIS - Earnings call transcript Q4 2020 | Oil States International, Inc.

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Operator

Welcome to the Oil States International, Inc.’s Fourth Quarter 2020 Earnings Conference Call. My name is James, and I’ll be your operator for today’s call. All participants are in a listen-only mode. [Operator instructions] And I’d now turn the call over to Ellen Pennington. Ellen, you may begin.

Ellen Pennington

James. Thanks, welcome fourth and conference XXXX Oil call. to morning, quarter States’ earnings Good

will our and led and call be Our today by Oil Executive Officer. Lloyd States’ CEO, Vice Financial President Chief Hajdik, Taylor; Cindy

that we are to To SEC accessed States’ extent other website. affect will relying Safe statements. than on we our other will regarding call contain filings. please this of information, in remarks the like one This and disclosed caution the that to Before A conference one listeners replay begin, or call at note forward-looking half historical should a Oil of later today available Harbor Any our webcast turn assume including information would that our forward-looking and be now the protections those the law. month. afforded the be be valid is hours available quarter risks by completion statements context after over can will many with Form should XX-K Cindy. for in remarks No the I the of beyond. be federal call such remain along one in factors call these being weighed business, the and we

Cindy Taylor

morning call. you to for joining participate Thank to us each you, conference and Ellen. today XXXX quarter in Good of thank earnings you our fourth

sincere that along the of power all week, hope my and associated you able extend the to that weather water horrendous navigate outages like we’ve to the supplies. been would safely I had First, with impacted last have over

an of supply challenges problem down the into investor excess the Already, demand worst oil took COVID-XX and leading With turn and the and onset toward in with respond of Rig management commodity XXXX, Energy pandemic, gas OPEC the marks companies in for epic crude the and energy coupled the oil the return by territory second results, had demand levels speedy activity to and six for spending to a with record events, third the years to that In downturn, XX a books triggered and extended deteriorating industry. these dangerous notable extended the financial the end we’ll and associated December for sector. are daunting for CapEx year prices of prayers products. apathy liquidity customer took Our XXXX. and flows. to counts cash crisis COVID industry quickly. immediate response you face collapsed normalcy. stabilized shore a to of companies quarters and of we destruction into the supply, go up action and to

stages update market early matters, our will you a on the market our operating thoughts conditions efforts as to and recovery. on we and you navigate mitigate give costs We summarize capital both these near-term U.S.-led continued of

to the decline As in shale shale-driven while quarter we historic we prices. first basins is oil in improving on quarter Activity at crude our been the recover. first discussed earnings with market activity low downturn, the third historically it call, believed as stronger fourth the to that was entered we has but U.S. also a U.S. levels

terms by As primary albeit spread quarter, base up fourth low improved ending activity a completions frac a sequentially XX% as reported the during result, count U.S. off steadily in quarter the the vision. of average

in of the and $X.X growth the reflecting these year, million before sequential revenues in gross XX% DD&A cost a earlier quarter was fourth Our results improvement partially benefits mitigation severance in measures implemented profits charges. and restructuring offsetting significant reflected X%

EBITDA During and margins improved. the our Services fourth sequentially Well up quarter, were Site Segment X% revenues Adjusted

$XXX our which is weaker contrast, EBITDA December XX%. decrease Technology margins and X% were revenues product XXXX, with recovery Product due And backlog In in came up sequentially, sequentially totaled EBITDA X% adjusted segment Our business, revenues Completion Segment in nicely. a at XX% incremental their margins a segment, sales. at XX, decreased Segment continued Adjusted Downhole to later our also connector million, stage primarily up of Offshore/Manufactured Services sequentially.

Our $XX what book-to-bill industry X.X quarter yielding million appears fourth quarter for year. and times leading totaled the to segment bookings an X.X the for for the times of be ratio

$XXX had stress year and focus exceptional liquidity by of we know of be cash we flow fixed free operations periods end, preservation total During immediate costs. management flow, to cash reducing net in our an our million the of in significant To from the the variable delever the year, with our $XXX XXXX that business, and needs million. that materially on debt we generating during

working during to In with you shortly. new capital We lending addition, despite banks additional with a asset-based successfully our in banking week. we review relationships the for the syndicated tight company Lloyd that last period to of details the more review of effectively U.S. and in and four-year I cash key have generation debt, credit industry, our of manage will managed being a to we before now results facility extremely continue believe closely quarters financial into will capital the detail, Lloyd each difficult and very segments. consolidated position come. we’ll our a operations in discussion our flow go

Lloyd Hajdik

good and morning, Thank you, everyone. Cindy,

quarter, net million or fourth generated of a $XXX while per million reporting share. $X.XX loss the we During $XX of revenues

cost adjusted generating we neutral quarters, our flow improved X% during due were essentially in consolidated cash absorption the in significantly businesses. free and significant to better prior after CapEx Our U.S. cash sequentially quarter. revenues our fourth flow increased After EBITDA

under net ratio of was issue opportunistic debt $XXX net our debt open senior quarter the XX.X% XXXX to purchases net of and December outstanding our the revolving during book amortization borrowings of million and our million, XXXX, discount through $X.X credit debt At XX, For total debt convertible million our capitalization costs. declined was facility. of fourth interest our non-cash total majority expense, and which market of repayments of notes $X.X

group revolving entered $XXX a had of key asset-based that we our announced banks. we commercial new relationship a mentioned on into million Cindy As with agreement February XX, credit

With credit. million. current quarterly our a base based of revolving under customer new facility, to and under fee million, borrowings existing at facility. must associated of facility a credit acquisition $XX XX springing networking on and February terminated facility into availability Borrowings credit $XX of $XXX our forma which obligations at accounts of credit to the prior LIBOR hand based our December, maturity basis standby promissory $XX maturity we At on and was of XX a was is X.X% four-year unused amount Together portion the of facility Cindy had capital days commitments. note debt million a the million. been X.XX% on facility to availability approximately calculated outstanding will pro as of new $XX million Maturity in excess principal the We the with the million available, receivable $XX.X pay facility. bear XX, a XXXX, points. in December also a seller GEODynamics. X.XX% of liquidity X.XXX% credit LIBOR a margin the total commitment revolving with new with of on At lease upon monthly outstanding of the revolving letters With end the net cash revolving cash plus any of debt entering interest of in asset-based inventory. date the approximately and $XXX excluding eligible XX, credit U.S. on excluding is mentioned, the have million the flow new would of facility. borrowing closing Borrowing outstanding under Our

interest back quarter, like consolidated first business And to in to time, total our during for our our to million. essentially million, million, In of net invest to XXXX, depreciation environment, XXXX of flat call segments. spending expect to of terms At through In expense compared we which $X.X projected million Cindy, total will $X.X guidance, is this and the corporate are XXXX turn operating we $X which the you is to approximately this levels. approximately when who results each expense $XX CapEx total take over I’d amortization total expenses million $XX expect to non-cash.

Cindy Taylor

Product X% reduced margins In sales. due to $XX XX% revenues absorption. cost of compared and the margin continued in generated our Segment during adjusted product Thank reflecting revenues the third connector and slow we you, Segment achieved Adjusted segment, $X.X sequentially XX% to Lloyd. million EBITDA fourth primarily Offshore/Manufactured decreased revenues lower EBITDA of million of quarter. quarter,

forward. expertise over As a book-to-bill our base highly quarterly working XX while I for Product environments. fourth earlier, for orders mentioned our water ratio years, capabilities developments diverse should leading-edge of quarter endeavored December XX, deep required the a the support at product to develop in million Offshore/Manufactured customers booked and technologies technical, energy has totaled of segment going cultivating totaled more million. offshore help us $XXX with times. leverage specific Recent and in our backlog X.X $XX

on We subsea and continue energy military clients other wind bidding and subsea offshore globally. clients fixed developments to to increase while involved support mining, potential in an bid systems, floating alternative traditional opportunities new our multiple award production actively drilling supporting in systems experiencing and

the lower While our than levels achieved XXXX bookings XXXX. were in

our the ratio segment, to Segment accelerated integrated year our visibility XXXX. the XX% margins for segment generating customer improved of row a gain book-to-bill Downhole Adjusted Our products. EBITDA to STRATX acceptance as for improvement and second X.X we a primarily trends continue implemented revenues XX% for our due Technology of increasing perforating the average measures in gun times, quarter while experienced sequentially at cost progress XX% traditional savings sales switches into international we in incremental systems in level. sequential addressable sales and our providing

on perforating new to shaped two release new ancillary and focus commercialization continue including technology. also wireline have charge We tool a the of families products;

where but while driven sequentially Our million X% Segment sequential In efforts the Services E&P reliability. Adjusted activity flexibility, United increased increase and of Well The in the seasonal offset by EBITDA. we revenue was improved strive fourth increasing our designed partially customers quarter segment, safety provide $XX declines ensuring mind, wireline generated by functionality and quarter, in and with with of and product operators U.S. States. performance better them the with land to completion Northeastern in our was are highest development level we spending revenue Site

pursuing focused Excluding Mexico activity of XX% our and of Completion fourth revenues the comprised support profitable remained our streamlining and XX% market revenues. our We of sequentially. Gulf and global quarter activity business Services region, operations base. customer U.S. Northeast increased on International

to fourth markets. time book-to-bill favorably in COVID impacted Well sequentially. roughly of service U.S. XX% Revenues product or on Site actively a frac now This quarter fourth continue increased in into industry and spread the exposure. by selected continue differentiate XXXX, quarter frac as rigs, activity XXXX half average Oil will field ratio optimism our half will XX% spread which the up rig disruptions has in the cycle our the for as XX quarter XXXX and in continue spread Technology moving this gives of U.S. to core service count our first in on a one experienced Downhole spreads to offerings conducting of sequentially month proprietary segment segments grow developing outlook. international up our since and into lag and frac which trials improvements about new expect us are favorably business. we focus Similarly, improves. that contributions. the Products with and The expertise segments last demand exceeds all the hamper more count was EBITDA first XXX product domestic is Services increasing the areas short offerings. Offshore/Manufactured XX in segment given to to increase are completion count of U.S. We several average we cycle the increase share-driven sequential the our XX% over first U.S. our count, average short XXXX with was to setting months, a shale-driven and quarter. until States and

declined with of Our growth outlook mitigation pre-pandemic flat EBITDA efforts. for will modestly first which course, suggests cost quarter the revenue XXXX, consolidated from resulting XXXX given strong our be that was of or very

million to of XXXX. half XX% $XX total We the million second of full-year with roughly consolidated in generated expect $XX XXXX of EBITDA the

The be first weakest quarter undoubtedly quarter of will the XXXX.

dangerous impact Given limited the days. has for locations severe weather operations field week, of the and nation that gripped have temperatures several and breaking this our conditions record manufacturing

generation, terms believe have free concluding our to coupled liquidity comments. XXXX like made flow with that we’d reduction Now, in substantial up exceptionally associated we debt in some We initiatives. progress of shoring strong with cash offer

operations States and mentioned earlier, will harsh the and leadership throughout up cash lines to as we safe continue the reduced oil and with travel have comments. global COVID-XX from value-added customer and period providing products As services That to our Oil pandemic, a activity, open managed prepared technology please? demand this company depressing stabilized conduct correspondingly, answers effects will thereby the product very recover our we the I debt our products and working and meet during demand period. flow completes dramatically demands on call our the difficult remain generation globally and focused various for James, questions you which time, for services. at of business would and and

Operator

[Operator first question O'Leary George & Instructions] Our from TPH of is Company.

George O'Leary

Good Cindy. close That’s enough. Lloyd. morning, morning, Good

Lloyd Hajdik

George. Hi,

George O'Leary

intermittently Hopefully, is was off guys in just power losing with, you everybody I of Houston. thought wanted it hear to can me, as kind interesting. I start

technology, big mentioned that’s obviously of new Oil a historically. States’ the You you on story are part guys completion focused

customers little more in onion what forward? enhance of areas the back your peel there looking of or need of guys with to help kind are moving what could you efficiencies are of a and One bit you

Cindy Taylor

I technology In customers you rig subsea efficiencies Well our extended have a of our needs, have course, investments very for. help customers reliable the yes, both I segment, bringing goals underway, products equipment focused, water, on products, operational type work presence in newer addressable will, systems. deep technology as as detailed including and expansions. terms R&D in subsea of equipment customer that Technology Services terms business And if as at end well you technology the all market. the working obviously, if us yielded advancements collaboration enhancing you In our more with a as and obviously, certain Well, a offshore initiatives switches, globally. will efficient then of things close around be cost-effective side. been There’s will focus investments the products of the we and I on some know, of to Downhole opportunity Again, some some integrated reach new looking fixed well case Those our infrastructure, we’re of new drilling in got initial some we’ve clearly, day. had we we’ve in the as doing case more will activity, tools. mining really Site our that are valve through of was of longstanding platform are that pretty longstanding both gun production think a number the in wireline number for with of release and our

And some so wind for also opportunities interesting offers longer-term. the

George O'Leary

very it that’s Great, And helpful. question. flows into my next

just I could mentioned kind look opportunities. the of as what subsea like up lot have folks area a and You XXXX, opportunity looks you research. their on book order XXXX if a either of frame most XXXX and wind the that of expertise, been doing the versus sure wonder you mining at just given on ballpark, that’s not guys you I’m of call, market

be So, any just the help importance increase with would size helpful. business to market incredibly year-over-year

Cindy Taylor

Wind stat These are wind; off be rarer time, just let’s just the this offshore one, earlier, is. in very new; obviously obviously realistic. more early because be at it’s in not whereas minerals point I’m [ph] of mining and could seabed Well, it’s stage developments.

point. research both but and with that we’re technology so progress are contribution of better small this the in my there And offshore alternative does longer mostly said, say just a particularly of I’m bidding It’s view opportunity But as bookings this on opportunity. had earth more it’s these many XXXX, a not in I XXXX, is view, players R&D for mining wind, that rare set well, going as doing much the amount at little on Again, quoting long-term probably of an – quite – near-term. term minerals also try and a all to opportunity. to I type range going yet prospect, oversell as this a But and aren’t lot going I’m bookings We really assumption energy development. the alternative stage but in in we being to related investments. see that just energy do to the kind of yes,

heavily that, do we’re going to minerals developments. you on rare in those earth If be reliant

George O'Leary

very it over. Cindy. I’ll back you turn Thank much,

Cindy Taylor

dialing George Thank for you, in thanks and today.

Operator

from Meakim JPMorgan. Our of Sean next question is

Sean Meakim

morning. Good you. Thank

Cindy Taylor

morning, Good Sean.

Sean Meakim

you well. are Hope Yes. guys doing

Lloyd Hajdik

Yes, Sean.

Sean Meakim

in of So the pre-crude lot in a Cindy, was all oil face you a XXXX did what macro.

sheet in costs, terms of you balance So, lot of unique, a a the operating just they’re lot, not guys headway. made

help dramatic the us the lukewarm. and whether on returns? of or think up So cash and you ends to looking more boost depending the I forward, being remains it’s think gives about EBITDA magnitude of the if better about cycle of the the what guess, ultimately you just but let’s kind on you portfolio, say more organic In just you flow can how opportunity dramatic couple more expect, potatoes the getting inorganic, Are than for to working blocking other opportunities tackling directionally words, cycle as set moves you more meat next years? strategies

Cindy Taylor

focusing net invested question, stages fundamentals focused to and returns of we’ve all our and come operations XXXX, and just the been extreme capital improved going I And immediate that, got had XXXX. our importantly, be a really demand lines. was global employed. well; done to but dramatically to robust are positive the on process at today, we’ve absolutely we’ve here margin to of and of you’re Well, I see right the we call we return preserving is of backlog, reflect for reducing Anything capital. two obvious supply I’ll positive but on focus recovery. and stand as planning on through beginning of to but income on course, to clear, of has a that and what ports stand through. through we oil the booking costs, events lens going been pressure do it from mitigating macro think of net liquidity, a crude Certainly, from Obviously, the business market year back recovering on market. on we the respond early

be where primary larger in we areas, scale. can Our is going focus to we have think share,

our product look can have Products. depend you then going niche, not We’re of the what particularly dominance, do? some of our capital. in amounts but that, on will. And we we lines to of Offshore/Manufactured excessive if Some expend to we

cautious initiatives. very our I R&D initiatives spending that responsive be We’re greatest seen always whether through going said, are internally technology. unique new on to there allocation, to will or whether the some, where what that we CapEx our M&A and it’s can own and that product to Those there favor about equipment R&D is we returns. optionalities out there. tend have generate be being opportunities do

when got clear honestly, we terminal CapEx that seeing or you out you’ve in will of the a what confidence to early of existing interest, well flow we we tell of opportunities or strategic. I a point. reliant front, have got that the to of years matters any specific M&A what the technological like in frames right you interest whether cash strategic XXXX made I much valuation of a stance that do some valuation modeling I oil at to light we have and generation the acquisition. that is that grow ensuing flow be structure. do I they looking the XXXX. streams. for to I you highly and cash years, be on also is XXXX will those is believe our to that focus If are with in that less we’re our your to but have terminal perspective, scale see think now, peak XX cost Particularly, semblance we’re our methodology high we’ve the overview. on cash and be period. got our But very highly degree tells that need stock, with it growth a have that I M&A, with leverage model, Obviously, a our flow the funded in GEO to be on rate from well, capital described And can’t means high-level that is hope lines, I cinema have this type some can there pay you’ve free efficient that in which be will that case, to end needs particularly up believe certainly of product thought free very generation, you you either at crude in recurring opportunities the into able that businesses sum differentiation fit to the have Our demands or which if top of be we value but process. if think line, demand kinds

Sean Meakim

thoughtful a very maybe, bit little a then response. these some about Thanks, talk more transition opportunities. It’s emerging of And Cindy. just to

And building with on and tangential products and to around those that seem differentiated that bit focused a competitive. concentrated always other may service portfolios you core more have You’ve products then positions. services more build end product up market of being kind

emerging these these wind, you about mining, potential terms themselves? enhance manifest subsea how revenue positioning competitive earth how of offshore your rare maybe, opportunities, more or the even the whether opportunities characterize you’d that you and maybe, talk fully positioning landscape, in can could as it’s just So,

Cindy Taylor

opportunities and do well. differentiated of be and lot say a quite bidding do just always I what we’re Well, you do

now so plus A industry we wind been an years. for specialists water platform offshore deep have platform in is fixed XX And installation fixed applications.

very and history our effectively bid allows reputation that. on our us So, us to allows

find you investments the opportunities accordingly, wants capital to flow time. of bit getting in successful and And create as Now, market expertise course, alternative at those for the is bid different a makes bidding you’re of point see try to for but scratch. only because installer in really towards a to this going to from history, those right industry opportunities of those They’re makes customers, now. on sense bidding wind our were already out And developer all to Sean, from sense us or know, to it which a it group that there. of draw in no to all

to projects on not. unique deep the are going So, customer not do do well. and and or is funding mining these issue as applications to whether what again, earth fields proceed Again, rare be these water opportunities you that

technology. are riser We experts and

the stabilizing experts the from seabed We surface are of in the facilities to water.

so to to again, a we on, opposed go it at and lab initiatives luxury, market going revenue trying R&D, as draw to be what we to comes quite reprioritize And the we R&D into with in those set that when immediate trying that or we’re day issued going guideline create elsewhere you were what don’t to or company. very, knowledge XX frankly of very in no the end a think of to the the have. focused we’re of on have would a are of to opportunities kind opportunities we’ve you’re have less, months

Sean Meakim

That’s Thanks, very Cindy. helpful.

Cindy Taylor

Thank you.

Operator

comes from question Gengaro next of our Stephen And Stifel.

Cindy Taylor

Stephen. morning, Good

Stephen Gengaro

investment do the about figure elongated returns up, think technologies from type that but little traction of the that the company we Thanks. these timing sort now, theme doing necessary? about went Cindy, – up because Good things; about you been on hope first, I talking think I returned been morning. to when guys well right the and and of just do very since to you’ve returns focused take how a longer very, new as public. is are you’ve have out to gain How Texas. those show all follow it investments, you you know a Two in timeframe

Cindy Taylor

is adapted a the now, demand to we’re degree technology One doing beauties large right a this to of environment. existing what of different

facilities, customer we products So, have the the we cetera, and et machining of requisite capabilities, base. have engineering all kind deliver services to a the to new capabilities,

example easier will a think So, is a brand-new mining are this this. product opportunities complete because offshore we There as more be an progress bit for I portfolio, those as in technology.

contract this And are some is want as example may than very technology so the year. opportunity. one oversell that those riser on much as But there, that bidding out opportunities of year a develops. We had market opportunities expand this to don’t have just products at stage. you relying this I rather research-based multiple last we an further this

prayer transition the I going prove alternative full to want long alternatives to up, will alternative, develop. I’m weighting. transition mislead a at to this heavier technologies to to but say call. And anyone a not So, weighting is be on heavier this a these don’t to

and some long-term. we think newer development just again, are but it not out. I’m use we XX-year But to of lot bookings that be for capabilities the pleased able XX-year, I when technology is they that come to from in these now, applications. I have plan, the background and type tons time. coming are a this. bidding of a do tons at not on hope I counting. play counting I’m I’m over

Stephen Gengaro

of at you. suggest numbers, your historical Products? and two margins, normal of for Thank that the other full-year then incrementals does And Site on you helpful. Great. you some Well XXXX, just about sort which I provided sort look the is questions commentary haven’t done incremental Offshore/Manufactured math yet. When

Cindy Taylor

of strong the expect life quite incrementals, and I we frankly, As but I quarter. you in know, kind them exceedingly to manage on be that our based witnessed fourth

but I strength on to the call conference XX the in believe hard incrementals. Sometimes depth with count the Again, – to back did downturn QX call, this XXXX. I in QX those days out, of we lost QX. XX% going from about from recovery of U.S.-led – the the it’s of the see to completion

Site, some seeing greater strong, on done XX%, improvement, long-term, front but the my know. incrementals were notes. do In of have their of north the we’re with XX%, well, adjusted going and were obviously they incrementals. case but historically that context, historic cost we margin believe that sustain as Well than is over Downhole, north a EBITDA it’s that they of what certainly the but those you to are not incremental which will with in we do So allow I believe we’ll

do or that, book-to-bill aside had the is, kind down that would the two that because the in north better with first of in street. about news and backlog. bookings ratios. of Nonetheless, out It about of year-over-year. The quarter, We in my can the all we Offshore/Manufactured to a downtime half of one call XX% size. segment be in the that good sounds going backlog beginning XX% talk Products; it we we full-hearted we are that had million all in got is temper terms $XX in Now, of my XXXX made we’re reduction good. fourth we of best of on

a is mix Brazil in you is this cycle what will of The That book-to-bill we Guiana, that a recovery very XXXX, other two, we coupled right And that is that surprise that’s products news in that the number again, good which our a in critical need production exceed in good now. one, segment. activity number infrastructure, one-time subsea is short are expectations lot us. our won’t for with is in

speaking to to U.S.-led that while is, in Offshore/Manufactured first we particularly no I’m the will enthusiastic Products segment. the our half, be incrementals, margins manage trying we’re what So, about decremental in

Stephen Gengaro

EBITDA? quarter XXXX, of a just thinking and Great. the helpful question And color. final, of we’re on hard first just That’s then the or plus being minus I you with given very given it’s and know one kind disruptions to calibrate sort the your of kind Texas recently, seeing going guidance and that given company-wide are on what’s fourth full-year in quarter flat

Cindy Taylor

modestly in of land this company, of not don’t temper have Absolutely. We means, that Texas expected by The U.S. we rig most kind going And suggested any Everybody before down, uncertainty. on also flat state really we is in are or as there’s to have New Mexico. Texas. week, and the to knows see of Texas-based will XX% sequential I call roughly. a insight power water while that. count you But I’m this great to say improvement. still that

not have downtown in anybody’s Houston, so the able just that are certainly, you I impact, really and it quantified out can tell And got, a office to but while in today the get is drive. day first we I been

we information because pretty And probably, So, Mexico the that just have, everybody, year Louisiana, we think New been course, nation of That’s broader any I frankly, And but weather. street the will Texas, really why realities. I’ve update and it. over setting it’s full now last favorably projected. of pulled our it’s that’s market up semblance wanted caution more it’s guidance best that, needs not give the a right all year, winter but little bit the those harsh on like a now, I manual but been we Oklahoma, quite QX, to are has guidance.

Stephen Gengaro

Great.

Now, is great you. call. Thank appreciate it. I this

Cindy Taylor

good Thank talking you, Steve and to you.

Stephen Gengaro

Bye-bye.

Operator

And Voie question Chris from our Wells next Fargo. of

Chris Voie

Thanks. Good my morning. Thanks for taking question.

stand offshore, and revenue the Site you maybe, XXXX, growth we year-over-year if for business of consolidated to on guidance? Downhole guidance the out do what expect Well the backlog First overall in kind for driven compared take

Cindy Taylor

through I work say Site just would year-over-year, to should trying and I generally be maybe, will up Well back that. that We’re up.

in First worry little pre-pandemic. notes. everybody, remember guidance the of all, I – a try about year-over-year Remember giving strength of that to my quarter first put and I bit the please

sense. different you answer. can XX%. your year-over-year? look do so get X% a consumable always, either the would much if revenue annualize say is a And Downhole ways, annualized second be like makes up very Technologies Site, is and what’s driven a what look business, half may year-over-year growth QX fleet recovering you bit two Well probably to by XX%, look And at count. And probably Downhole annualized? up – muted, I it or frac is very if sooner that more again, But it’s year-over-year, I XQ

there. QX. XQ up first weaker pretty Offshore/Manufactured XX% a but maybe year-over-year, It Products up we’re steam. could those have in annualized, either higher roughly growth expecting XX% bookings too from we are got we And growth. half going numbers, pick be of expecting strong types Again, so good to

We’re QX. lot bidding a in

my turning to year. backlog So, little build the later in a but bit opinion, starts revenues that we’ll in

quarter. It’s going it day from not totality, up bring little you’re revenues X% fourth some necessarily rescue and to to don’t a materially, probably of but it’s from products, XX% cycle get again, a up will to the going down but offset year-over-year. in but short going effect. in think to We lag bit I have be the revenues,

Lloyd Hajdik

fourth of of or I of take that first important XXXX. analysis to strong quarter, third quarter, you the is fourth XXXX think and you second, the the your out got how point, second from from annualize We’ll and very look as was. quarter either half up fourth, at It’s the Cindy’s

Cindy Taylor

for activity all your that’s frac count. And Yes. drivers, average spread average rig true count,

of out, and degree to meaning the less out collapse QX rig it a that year-over-year pull to It we to count mix, completion averages. the have pull almost You count and when just did. you has look

Chris Voie

Right.

think products, in you. to of do can do the of costs need price you improvement, That for normalize some Thank contemplate any absence, get tons back land? margins, and with Okay. gains the maybe sense. makes that follow-up lower little think touch manufacturing improvement efficiency for on year your you secondly, normalized of And margins? of or to price EBITDA some price pricing you just Does kind you And then get to U.S. maybe, to improvement for bit. guidance a

Cindy Taylor

Well, is have just – margins. we need negative product margins we do in activity-based. focused work always is individually always It on been have gives higher for revenue, positive this. our the lines which really certainly near-term What I top-line don’t sometimes.

do. think I people

first. give activity price model. the lot on improvement a in of So, predicated not lever me We’ve our

I think that me some can as is. it oriented which much international contributions, expect I may my mix help some And do get from be a from as to we’re improvement both Site a not We’ve we stands I to about pricing And Well Technologies. to it and clear. just perspective. be get that, mixed Downhole but if Services going talked want again, good, benefit

better to And competitors starting sustain that going service We probably and done. our in manufacturing has sector. certain stunning the to I negative continue EBITDA. work That’s at is cost and for at market to sector stop me continue it that I to margins to are reports the mean, out structure look are the don’t think come we’ve announce not fundamentally that to with increases. price to that

rip some, means learn mine that continue those initiatives system. good maintain do to to We has the we’ve costs with just not And said, any friend got band rationalization, as to a back but think them the have not to off, let by cost I to and done. aid of too, We call less we’ve which you’ve more to probably creep got year. we’ve put into place, last in we need what

things, relates those looks sustained it of that, got I trying like XX to but nearly to all And we again, market you what the have of fundamentals basically production. the higher think have hit see we it U.S., it’s is the everybody will behind a I’d as do day million we’ve say margins. do if you, barrels to –

around teetering now XX a We’re day. barrels million

same on investment. The U.S. XX-year global are the We true lows for is CapEx

rig sustain even quarter, much sustain that frac count XX a real barrels I million the not to is the up think they’re they’re and and adequate day levels, significantly of current though the count to So, need to to and barrels expand fourth day, question production. everybody how the fleet XX from million does that just probably a recognizes that accepts

up that see how factored as think So, upside XXXX. QX. and little some we from about we I from have plans planning And then is but fourth not budget come don’t I here. may is you’ll with is holiday downtime both see, for softness, do quarter in typical, exhaustion, our a “peak” till our get

Chris Voie

right. All Good luck Thank weather. the you. with

Cindy Taylor

Chris. you, Thank

Operator

Energy have Instructions] And Partners. a Daniel Daniel John question [Operator from of we

John Daniel

putting for in. Thanks morning. good me Hey,

Cindy Taylor

morning, John. Good

bet. You

John Daniel

bankers you days, have alternative? I come them pitch are sort these of guys see of and versus to question percent deals as what traditional just OFS one

Cindy Taylor

this lot quite two opportunities was conventional business many think come to a portfolio focused bankruptcy, along traditional although any frozen own We XXXX generally hadn’t of frankly, somewhat everybody Number on and of outlook. and manage they we with internally be generally, bankers opportunities in a restructuring their going terms liquidity seen them debt, frankly, have. for to two, lines. and investment really opportunities Number went by, alternative trying with declared one, stage. welcomed much reasons. mean, And that our They’re through haven’t too or of at in was I COVID. lot results financial to quite just still I I had more and had a

So, there whole John, different R&D right But I think out energy lot year. but XXXX will on now, alternative of now. aren’t there mature a there’s companies a be right

these so whole just lot So, and in things. I there’s think things design a phase everybody’s of of the not

do can other I year, think we that than what we’ll see even internally. this

John Daniel

in Let returns. which A, me of you What B, being Everything is the else is it’s this, alternative. very going same you OFS a know, and excel exactly company do be in you ask represented, well says company world you which all something equal, do?

Cindy Taylor

we and to good capable I don’t tried have of. no be and at of – honest be I are we you. are now will this got with totally always I what what I’ve do pivot. a think always to knowledgeable

nothing into that my tomorrow be jump just long case opinion, this industry one at going forecasting will matures alternative. affordable, I will in we’re be needs are happened of Texas has I people that if be a I’m reliable and what this It conventional that, energy convinces produced off ever day evolve it’s before broad think, to because ledge I energy, of say, exactly going retired and look not XXXX, evolving. America to a week. safely. was a can XXXX, you And become else will study

the in at step when too have state, monoxide cold, can we energy back of to reliable, stop deliver dying have somebody which carbon unacceptable. country do completely to Anybody what or to package norm, as my poisoning accept that politics safe they’re We a to we affordable, have view this people look and as going this to in we’re needs I failed. because and this is

John Daniel

weather. Thank good Well and for battling you for said. time the your on luck

Cindy Taylor

Thanks, John.

Operator

And there questions. are more no

Cindy Taylor

today. continued and support no power, critical you I to of but you know right. our dial it’s in Many water, of you James, your no issues, We just importantly, took so of your States thank Thank All all connectivity to tough. much, you your is participation to today. hosting support. call I this industry been so time that appreciate and Oil have for continued today us. the for

the that here. from better Let’s XXXX pray gets

think the New I don’t best we’re think yesterday said I it in Lloyd Year said, yet. he when

of XXth in We’re month the XXXX.

to you maybe, a and So we’ll soon. care week. is next Take better week talk

Operator

and you, ladies Thank concludes participating. for you Thank gentlemen. today’s This conference.

You may disconnect. now

Oil States International (OIS) 18 Feb 212020 Q4 Earnings call transcript