OIS - Earnings call transcript Q1 2021 | Oil States International, Inc.

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Operator

Good morning, and welcome to the Oil States International, Inc.'s First Quarter 2021 Earnings Conference. My name is Brandon, and I'll be your operator for today. [Operator Instructions] I will now turn the call over to Ellen Pennington. Ellen, you may begin.

Ellen Pennington

Thanks, Brandon. to first-quarter welcome call. earnings and morning, Oil XXXX States' conference Good

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

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

Cindy Taylor

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

in continuing severe coupled and impact from from higher winter our the Oklahoma, occurred benefited commodity of in states, increased land-based pandemic. partially The operating First-quarter impacts the surrounding with affecting February, each particularly that was event offset the activity resulting of segments improved COVID-XX operations in completion U.S. results Texas, price weather environment. levels by activity from

impacted by and technologies as services following were recovery from goods our adjusted and While well as operations segment X% our our downhole activity resulting experienced facility winter adversely closures delays cessation receipts a in we at and margins, cost XXX were weather our our XX% to our meaningful offshore/manufactured our of did March. strong severe February our in us but a the did and from increase EBITDA delayed the results customers to of segment restored, work due in the sequentially, wellsites, shipment reductions. event, vendors. due Revenues weather decreased Revenues not sustain basis well XX% operations damage in in temporary of increased facilities conditions customers, site despite and products and the point sequentially, achieve services to

I segments. million, operations of $X of in and results financial restructuring of our review discussion charges. detail consolidated gas sequentially project more of improved our which to X.X $XX $XX total into one $XXX times segments excluding and reported the convertible asset-based yielding in that in million bookings which operating EBITDA a quarter quarter. notes Each due the amount of bookings, positive purchasing liquidity book-to-bill credit XXXX, Adjusted new $XXX EBITDA our principal XX% convertible projects. included in notes, facility in $XX of million matures first strengthened consecutive come was of for position second Of notable revolving We Lloyd by of million million, each will a severance non-oil to quarter. now million Our before during a due our for related entering issuing quarter XXXX. long-term position XXXX, the $X million award million into and go ratio existing exceeding $XXX a our and

Lloyd Hajdik

good and Cindy, morning, Thanks, everyone.

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

relationship a in activity $XXX higher with completed key group On million asset-based credit improved a levels, EBITDA our commercial driving businesses. revenues revolving adjusted new we agreement increased U.S. February banks. of Our to our due XX,

credit the rate X. XX, plus used senior XX% base date or Our cash facility of revolving new new under revolving outstanding to and purchase with balance proceeds annual is convertible in facility XXXX. $XXX our maturity of on Convertible after Borrowings our semiannually interest offering on at calculated convertible based issuance into and from amount interest inventory. $XXX of credit monthly facility terminated which of issued Net was credit is accounts payable million the bear facility at margin the and principal entering million under senior senior $XXX on bear The the deducting million. costs $XXX we borrowing a amount U.S. April is cash of of March proceeds On the principal mature XXXX receivable notes notes, on X.XX%, existing totaled to X X.XX% the million new February from based to X.X% October based credit on facility. We value notes. of LIBOR a existing facility. added notes the availability assay-based revolving X.XX% hand. the availability under revolving an calculated aggregate the par offering proceeds upon eligible Borrowing in XX, April customer

March in principal amount mature As million was which notes, $XX outstanding February in the XXXX. X.X% XX, related of to

under of at million outstanding As on to hand $XX outstanding as compared $X million XX year. the the March $XX XX, March of revolving XX, Cash to December million at end prior credit our million compared XXXX. of $XX totaled was facility

our together was credit available was totaled net be hand, on our capitalization under As million. facility debt totaled the XX, $XX and amount approximately liquidity debt-to-book to million. total our March $XXX of million, drawn the XX%, and $XX March with ratio cash revolving XX, net At

XXXX, quarter of which non-cash of debt interest million our costs. first $X of $X million expense was amortization the net totaled For issuance

of was quarter. Our cash a total X% interest expense percentage the as in first approximately outstanding debt

and to million. $XXX,XXX to the corporate our of million. $XX invest call Cindy, $X.X to which expect million XXXX $XX results noncash, our $XX our Net during current expense who environment, terms to are each consolidated expense $X.X you amortization time, is depreciation expect projected will we total CAPEX in and segments. of In approximately take And In to over second-quarter operating to XXXX. million, this interest to at back expenses for guidance, total approximately million turn through of business we the I'd like total the total

Cindy Taylor

in lead Revenues I'll our XX% off the and million by XXXX. higher adjusted segment activities, Lloyd. offset segment, short-cycle margin XX% due XX, major reduction of to first sequentially of of the sales. to in at Segment segment. a $XXX reported $X and product service our you, XX%, offshore/manufactured primarily $XX compared revenues totaled first million was adjusted XXXX, of fourth EBITDA quarter EBITDA of million EBITDA XXXX, increase products of of Thank Backlog million million sequentially. adjusted March project revenues decreased to $X of XXXX. fourth the an with of quarter revenues quarter in $XX compared In reported quarter in and in the partially X% this segment we XXXX

earlier, mentioned award segment during $XX I million bookings notable one $XX the totaling X.X book-to-bill with this over project million, times. quarter, received ratio a As of yielding

environments. over specific while in develop segment technical, endeavored and working to offshore required years, the expertise has For our highly products for cultivating leading-edge deepwater, technologies XX offshore/manufactured

a help we renewable of and our to into space. embark leverage more competencies be working support diverse on expand forward. energy customers core we us development diligently the our cleantech Recent As going transition, capabilities the should base and will global product

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

volumes EBITDA in by activity XXXX. our fourth product I with perforating XX% $XX to profitable sequentially a reported land million switches in increased winter As improved with activity remain my recover Well the of adjusted February, customer of along revenues in our customer in decreased to to leading Middle revenues from Services projects. transitory of driven by In $XX technologies support mentioned systems line in East. Mexico. our base. second gas STRATX-integrated in and Sales of gun million revenues sequential expected the of the bookings and customer was conditions weather The million in our segment of first in by segment million XX% and acceptance sequentially, reduced segment partially primarily $X U.S. focused gain to fourth EBITDA revenues we our XXXX comments, XX% an States, with quarter severe tied the of adjusted streamlining addressable reported Further, of of XXXX, by non-oil sales. delays Site downhole tempered are the compared increase our completion We quarter. Gulf EBITDA. trends revenues pursuing in the due continue the and for $X in $XX segment, quarter international adjusted United operations in were increasing X% on an to quarter international first our segment, In revenue quarter but was and of International in increase decline we offset customer earlier global projects in million our activity driven of increase generated revenue

to spurring to hamper this beginning to offerings completions focus Global but business. in Oil increase an activity on continue are and disruptions beginning differentiate continue segment return U.S. actively spending. areas in of in to markets, domestic expertise to pricing, ease. international core service their developing levels these We are are improved pre-pandemic disruptions COVID-XX oil with new inventories customer will States' and to

average compared frac U.S. XXXX. was of The quarter average impacted first quarter count, XXXX U.S. U.S. the rig of the which the industry to segments XX% XXX up increase fourth our in rigs, experienced with which all favorably was for exposure. the quarter Shell-driven average Similarly, short-cycle an XX% spread sequential count

As that count compared we the of XX% first-quarter about roughly quarter us is quarter increased second the product favorably are setting U.S. spread offerings. our by more has second increase Shell-driven gives month into the and XXXX, XX frac service average. spreads, the up to for optimism This or now a

second sequentially we downhole well quarter with expanding expected coupled we the products to of contributions. product sales. quarter to site increase the On are short-cycle in services sequentially segment with opportunities, in with project-driven Given segments in in XXXX, count, the XX-plus backlog frac Revenues also of our grow expect quarter consolidated an increasing second second percent improvements XXXX. to technologies product of our improving expect EBITDA continue to offshore/manufactured revenues and spread a the grow basis, in

XXXX over first rest year the of suggests for which XXXX, revenue that be will consolidated strong pre-pandemic. outlook our year was the of given flattish Our quarter

momentum, coupled $XX million to with activity currently with increase will that project completions a full-year EBITDA last we our for $XX improving major expected from U.S. million XXXX. consolidated-adjusted guidance Given believe our of and backlog, range the

be to uncertain. appears like offer the sight, to the in comments. Resolution I'd of pandemic timing Now concluding but remains States, particularly some in the United

We oil substantial of globally have million historic mass in the at U.S. during made progress inventory. of crude barrels the reducing pandemic XXX.X lot well

five-year landscape now for customers. only range, appear continue stabilized $XX are operations product Crude in about States and on and X% conducive safe setting services above demands pandemic. leadership with service more offerings we up providing investment the range. to to as to various a focused oil remain our have COVID-XX will from We conduct $XX effects of globally and in barrel will to per the the our technology Oil harsh the meet products recover customer prices value-added

open prepared will comments. development answers our this and renewable That emerging clean the efforts time. Brandon, energy investment opportunities. we questions you tech addition, our continue to product call for would and at completes support up In

Operator

from And we Gengaro. ahead. Please go have Stephen Instructions] Stifel, [Operator

Stephen Gengaro

two So if you mind. guess things I don't

- some first in very you're mean, And I incremental obviously, small margins numbers, funky. about cases The look when can of here. strong kind talking quarter

or normalize think How As progression to levels? forward, margin about as go do see we we historical just about think think incremental forward? going either margins should closer we those to you general you start

Cindy Taylor

No.

in benefit, XXX%. You're you you as unusually about cost near some then absolutely margins. and on clear. think can operations, right. theory, if have strong And reduction every is which dollar early stages, we revenue, costs And it, the incremental comment a streamline see of And continue you incremental cut to

flow - it variable we're strong system continuing impacts to that start goes incremental reduction And going the carrying so with normalize the but through those they are revenues we with trending then it. incremental cost margins in anticipate that and to QX, as cost

strong normal would we've but say more it's of probably to say, three hard what second exactly, of helpful. level steady I'd last more state, remain activity. year. to unusually I and of environment over or seen three a recovery have of you a say to in very you you in of bottom If So get go two expect coming quarters margins we back slower low reached in until and kind third if growth should And kind that incrementals normalized quarters the then a we than quarter two last off that's

Stephen Gengaro

XQ? in that weighed on is any I were revenue to, part, Yes. products and sort the missed the weather to I And very of helpful. related but on but business? but was XQ the was may some if deliveries this, the not have first and That's very I I Were of the that? it's second just lighter a think that quantify to quarter offshore/manufactured revenue because I'm wanted I of bit thought, some And disruptions, good, than apologize, over margins just the sure that's and what disruptions there little spilling - but

Cindy Taylor

over knew had spilling major be a avoid quarter. of late Again, a just kind a into expect, as I you for soft those COVID-induced time would QX, but last QX. project delayed can would of in year. downturn. short awarding it projects, period characterize a lot of We of nothing We backlog There's people

would the talked do revenues. two air We've But down are I Those that's connector or about major that an that dragged say weak So projects queue. over in our last sales. transitory. believe product mostly we again, pocket. it's more it's quarter And

always two. bit a is a quarter First weaker little quarter of

impacts, relates impact have short-cycle it greater sales. product on a As our weather to would that

degree not would XXXX, low been activity. have benefits that to largely was impacts. Again, short again, the absent off However, very weather it coming U.S. in just the up short-cycle that a Shell up base land-based cycle

upon products the for backlog. was us kind segments to large expecting a offshore/manufactured comments, support growing the that said pretty have total line bill it's so I on for really depending is segment two. major one percent is But you, of to book XX-plus And of of calls, see my want Again, watch of we're in. a come growth a sequential the in combination they growth. I and critical quarter, rebuild kind have sequentially But all trend to in that this a times as to consolidated things our prior we good major told individual how as With the project's later X.X revenue to award project of highlighting the quarters.

Operator

ahead. Partners, we Daniel. Energy From Please John Daniel have go

John Daniel

in. Thanks, Cindy and Lloyd for putting me

a… Just

Cindy Taylor

John. Good morning,

John Daniel

morning. Good

how are Just of a quick out question right points seeing see over the on supply chain, you if any that playing the stress you and now guys course year.

Cindy Taylor

I haven't really seen any significant stress points.

base morning is in service time, kind the early broadly to this offering, off economy inventory, vehicles. our I and potential less we own really driver of I our think say U.S. the employ some drivers own everybody product that equipment has and reasonably industry. at listen and transportation, point We're our of activities, good hitting mobile, small, with just having think given the watching we would is in that pockets. the own fleet of this shape. XXXX in again, those Trucking inflation, and certain are we're of transportation morning, news of reliant coming and impacts types our of hitting on most shortages transferable,

can't So that right I we're to these a - excused on managing we're from think any be fine. issues. I say But going of now,

John Daniel

that you Can labor to if one labor the being that on entry-level the experienced we more would or a just back for hear you lot of bring - then tightness. about And curious just front. worker I person. me mean, sort I'm trying characterize

that? any Just thoughts on

Cindy Taylor

some for year again, seeing coming people entry-level, everybody off working particularly cut we're I some you a are a challenges to our hours for think of It's people. with but benefits heavy that headcount, managing that employment. entry whether whether experienced at are laid levels But that, heavy There for in trying at is point challenges, were has companies machinery, we they cut have unemployment areas XXXX to It's - the types entry-level tie are for horrible Lowe's, of XXXX. that workers, supply people. seek lot and your areas in compete more but temporarily, our particularly of chosen, painful entry-level this manufacturing, some key are level, the off those high through other is, even industries are like There's of kind the in time. us in And - are more alternatives. afforded also and chosen industry, coupled growing

of market a to bit a so And an that really and ability it's balancing get that. timing of primary we with and pay benefits those little face. pricing of That's the to challenge cover really recovery recovery

John Daniel

specifics, not stuff. it And and potential I it last when apologize. pinch, picture, for hard given the see necessarily call it's elsewhere? uplift about, is what at pinch. budgets State you to again, we going just for be where strip a all then opportunities could big could reset, real what good a in XXXX, that you've Oil I think guess once do it, seems How people one, be you and to the broader industry like activity But QX, just look for imply It that talked call

Cindy Taylor

about I for combination things. to do that make it. all our attract and worry a that to industry about It's those challenging. cyclical the career of new for is workers it. I'd want nature industry this I in say, people am of concerned a

that I livable to that $XX at sense frankly, And way entry of have we some more of new and is stability. energy attract wage that. think north for the industry reason, WTI affordable, an barrel. know We a workers quite level is for sustainable, the

all at do think I that the I for Site an some I with are Well energy And to That's transition, young make north essential it's be quarter industry. is to just efficiencies day more workers - to brought to open will more over would well us we going that because $XX, our and about to being question from XXXX the do it. to say help. fewer taking people which of the I of I think that the it's can it it the going whether at first today and the in of headline particularly however viability headcount people I But So believe have things do we've consolidating jobs years, mitigate be of to essential. side, term, do WTI long continue market are of going need long-term the help simufact, with transparent every whether digital, you the think hope the with the

Operator

[Operator Instructions] further questions for have Cindy, time. no closing And looks this like you we turn remarks. at it back we'll to

Cindy Taylor

today so releasing Thank you, hit many with Brandon. earnings. We companies

I caught you've open as We conference addressing follow-up between with some future the Ellen is But you of some to after day. call sure split great look thank are might that I'm there, those we think attended can who a and questions with is our all up everybody Have calls any very and questions. call. get have and you get to do you. and webcast, calls, information follow-up we'll indicated, forward

Operator

And ladies this gentlemen, and for Thank you. Thank joining. concludes today’s conference. you

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Oil States International (OIS) 1 May 212021 Q1 Earnings call transcript