OIS - Earnings call transcript Q1 2022 | Oil States International, Inc.

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Operator

Welcome to the Oil States International First Quarter 2022 Earnings Call. My name is John. I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. that is note recorded. Please Instructions] this being conference [Operator over turn Pennington. And now call to I will the Ellen Ellen, you may begin.

Ellen Pennington

call. Thank you, first conference States' to welcome John. Good quarter morning XXXX and Oil earnings

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

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

Cindy Taylor

where conference outlook. and you, will thank provide Thank our market on for our call, thoughts the we and first Ellen. Good XXXX our morning, discuss joining quarter results you

driven the along our the activity representing Offshore/Manufactured in and consolidated driving environment, the million sequential improved EBITDA million, segment. mix favorable commodity company $XX.X with in first generated by XXXX, price respectively, sales revenues and During X% States, the increases X% Products of United a $XXX quarter of of strong of

a a of a coupled XX% economic this stronger were the COVID-XX book-to-bill with quarter support EBITDA, in for disruptions. ratio sequential chain another including was activity yielding period. somewhat global highlight first Products backlog tightness A strong booked segment in the forward. key and levels ongoing the challenges with increasing our outlook pandemic, Offshore/Manufactured for into results X.X associated and quarter Our going by segment tempered labor times supply increase backlog orders Expanding

consolidated activity in XXXX to review United United the and a into to and activity I strong Mid-Continent services, impacted to regions. demand in in us the operations of customer continued of increased constructive completion balance looks Increases industry increased the for now a Completion had the sales the growth. of revenues Gulf discussion of all the activity quarter due causing gas During Technologies continues of first the count. XX%. States experienced spread our the our Well States Site led sequential spread particularly product frac sequential in products to and in to Tightness primarily increase basins XXXX, very Compared international in US, sequentially, XX% increase our each led March, Lloyd Coast before average In in to go results perforating a segment markets strong. in X% period shale position oil for the increase financial US segments. segment, US will the activity favorably same our detail, quarterly our XX% frac Services quarter more Downhole outlook Increased completion segments. average in revenues. our higher our for US in XXXX, count and over of and exit and

Lloyd Hajdik

Thanks, Cindy, good everyone. morning, and

quarter consolidated of a of share. of $X.XX million net We our and quarterly revenues generated which the the $X.X and with since million, of During highest per XXXX, achieved pandemic. the million coincided revenues EBITDA $XXX $XX.X the loss onset first COVID-XX first of quarter consolidated we or EBITDA

$XX on million quarter impacted expense, our We US valuation The in fourth build at the a recorded $X.X to cash was from quarter. hand, million well ended $XX growth resulting deferred of quarter compared against end was tax the discrete and the nondeductible $XX associated allowances to with capital the cash decrease activity of Our million of working in loss attributable as first tax million quarterly items. levels. with certain by and first assets, as

our net under April our Limited amounts assets by a XX, which proceeds $XX million, invest expansion. to As yielding XX%. the funded of of for Holdings $XX to XX, million quarter, March million, which available during available with acquired and drawn liquidity March resulted E-Flow E-Flow Products Offshore/Manufactured instrumentation sale integrated first together expect $X million control we was were provider approximately partially no in the facility support based which received cash In from borrowings Control invested to with XXXX, $X on handling, At expected market and a monitoring totaled XX, the of be of asset-based totaling total $XXX totaled solutions. on credit our was million. segment to Separately, expenditures is hand E-Flow hand. of fully debt in outstanding revolving or on net million, global debt $X.X U.K. $XX offset million. We capitalization ratio capital cash

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

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

our are over guidance, to this million our for In $X.X who Cindy, I'd million. of the amortization consolidated to like you total corporate segments. terms At total results the business we quarter through back take call interest $XX.X to and will XXXX to of time, expect depreciation expense turn total our projected $X.X operating net million expenses to second each and expense

Cindy Taylor

Lloyd. Thanks

of fourth project sequentially, schedules. XXXX. driven adjusted million revenues by million revenues Products Offshore/Manufactured the first the of million generated EBITDA $XX.X quarter decreased $XX.X underlying decrease segment in of XXXX, revenues of a X% segment to project-driven segment and the primarily million to XX% EBITDA $XX revenues Segment in compared Our due of of timing reported $XX in of and quarter

first quarter Our improved and to of in of the product mix. to margin realized in fourth EBITDA XX% quarter to XX% compared service XXXX XXXX due the

During $XXX,XXX quarter Russia-based expense on receivables XXXX, bad the the first segment of from recorded debt customers. of

As of X% XX, achieved highest of first as level we in had March million our totaled no sheet increase, balance Russia. material Backlog a to culminating the backlog quarter since quarter XXXX. $XXX end exposure of sequential

million XXXX book-to-bill of First totaled quarter bookings times. a ratio yielding X.X quarterly $XX

the in We a achieved ratio of have last four quarters. in excess of one-time five quarterly book-to-bill

and bookings our tied of broad-based non-oil quarter first regions. product first bookings and were XX% quarter were Our across Approximately projects. to gas lines many

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

energy expands renewable world competencies in tech and going core base clean support energy developments into us more our Recent forward. the As and should sources, alternative we a investment translate capabilities customers help leverage the of be product to will diligently space. diverse working our

of Services to and the XXXX of clean offshore subsea the quarter Well of of tempered XXXX. million revenues and an in of tech quarter XXXX segment compared XX% In adjusted We systems, first bid to margin Segment $XX segment, on compared first in adjusted EBITDA the million million of EBITDA potential the XX% $X.X in million seasonal minerals, recorded bidding other revenues first overall award supporting fourth drilling we involved EBITDA experience multiple mix, reported EBITDA of $XX to Revenue to segment fixed floating EBITDA globally. quarter XXXX. and support of in actively customers, inflationary Site continue segment opportunities while and new segment customers to energy pressures renewable generated margins. production wind military $X.X the and margin subsea in our developments quarter quarter of decreased and our increase traditional and fourth events in systems

second the of margins out XXXX and quarter, EBITDA rate given first XX%, quarter our exit strong the equipment personnel we exceed increased utilization. to expect Given

made within this service During certain non-performing offerings we XXXX, to decisions strategic segment. exit

tempered compared were fourth internationally, our allocate time. to all XXXX. in We over both strongest a our and and streamlined reduction forward region equipment will offerings. on going service Services segment service focused revenues our by of support these improve will base. our to the lines temper These our in forward million offerings global quarter service operations we margins Well revenues have profitable exit in to exited quarter remain our were exits operations that of activity going $X.X domestically but revenues which First pursuing capital customer optimizing and are expected and lines of resulted Site underperforming Considering and

the toe quarter to domestic first disruptions EBITDA appear offerings. million challenges and now easing. of and developing of core expansion focus and first to prices averages EBITDA market years XXXX, oil margin to fourth areas supply X% As continue to of two increases hampered million improved are be commodity million of $XX inventories US in higher below continue and we quarter in adjusted chain products, actively but segment of of demand reported in $X.X XXXX of adjusted XXXX. our improved expectations completions differentiate In in revenues throughout the spending products of disruptions XXXX, XXXX COVID-XX activity the internationally EBITDA compared leading Global segment, service sales pre-pandemic valves. higher reported US driven to our of these segment our offerings in segment of we XXXX. an frac and to continued fourth will well unfold on the expertise for in international margin quarter Downhole markets of in to quarter customer Technologies equipment including completion $XXX,XXX their in X% gas this opportunities by five-year of perforating seasonal $XX for Segment our now along segment with and and revenues plugs compared EBITDA and was have are

help outlook seeing service and offshore also support and which are our We offerings. markets, an product should in improved international

over in also Offshore/Manufactured segment to in count to improve, levels Given XXXX with short-cycle Well improvements are last Site with spread expect of continue segments product Revenues growth increasing frac Technologies along their increased Downhole in improved our and expected given EBITDA quarters, several the Services demand. the we our Products backlog contributions.

to to the increase million. Accordingly are million we XXXX increasing our consolidated percent. $XX guidance range suggests by consolidated of EBITDA will for revenues year our XX-plus year full outlook $XX Our full XXXX a that

I'd Now some offer comments. concluding to like

unprecedented inventories the caused pandemic, response expanding with have demand down oil US and drawn activity. Following considerably natural COVID-XX economic now crude to the by the destruction global gas

average of and was average. inventory about Crude As feet, and we XX, XX% oil barrel X.X was five-year April activity about was cubic per XXX which inventory gas storage per XXXX. United trillion these period $XXX was a crude responded below gas responds natural to shorter-cycle and with oil the five-year same spot have Initially, very WTI prices crude in up Natural outlook with are favorable natural the for the which accelerated the XX% commodity States, setting US at which oil to draws, below million higher barrels, for investments gas seeing. industry $X above MMBtu, prices the

nature, demands services longer service safe customer projects operations, lead focused value-added available investments we offerings, will and to Oil remain Although, providing product deepwater up in well, continue those areas. term in expect as leadership long various meet and on conduct pick States in time to our will and including products technology with globally. for these to

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

Operator

you. Thank

the will now our Instructions] [Operator MacPherson from question question-and-answer first Piper from We begin Ian And Sandler. session. is

Ian MacPherson

Cindy Lloyd. morning, Good and you. Thank

Cindy Taylor

morning, Good Ian.

Lloyd Hajdik

morning. Good

Ian MacPherson

And seems Site still getting everything a with at seems complex are historical Well mid-cycle that the – like of margins in deficit are completion most tightened to has has bigger is up improving, heights just reasonable had margins towards you've before. hurry. and So Products that it back Downhole and a services like tracking it

duration and year? parts that upside in think Downhole next here complex surprise Some this cycle an vertical. opportunity Technologies pricing of the continued you with into and with tightness is going year through for What the do and are some margins

Cindy Taylor

a I to a in that's and if question led just service the XXXX observation fabulous commoditization, space. losses Ian, activity But bit door. say, of which that see international pricing, during pricing to market of that more international acute always inventories, And for excess beginning witnessed this the that significant of at case, tightening this us mix it's And is to some us with There whole of were thing Yeah. And really decline lumpy will was pricing is can with coming was coupled favorable inventories there kind along. if is kind period. excess the sales the challenging a to acute but no tends and going sell some and to one also we be you product led that get for quarter-to-quarter. recover of mix, we out in as question fire-sale everyone it we – during are say, also is that sales, almost. outcome I'll up domestic pricing the are the

can I've in on are fundamental volume-based we improvements supply/demand. a production. improved get you But all you more challenged have we been hiring said in about XXXX labor, And as our we consistent know, everywhere. experience, it's certain of kind There of stream it We down But a lot could commentary, as a we bit comes facility. on our this if progress margins of my projecting is that, labor to through hear in those particularly, predicated as factors. – charge and

just on that's always pricing, say, to but of you we from competitive And be landscape. line But to again, always improve it's get improvements. going seeing and work I then we that. tried the get but So factor the a margins up, absorption let's are multifaceted, initially better top

Ian MacPherson

Okay. That's for units – Guyana. the for like products. probably we orders improving seems have And production set then a for Brazil just really Thanks. opportunity on floating more in bigger It helpful. and an opportunity

well. would Which to maybe those do beneficiary in positive is think be year? offshore warmer I acceleration grow. as this stack think your markets suspect other those more inbound there business this continue of you a And up the shoots terms How to green cycle short-cycle against of year? that I in a more could do

Cindy Taylor

of but for Offshore/Manufactured our segment drivers In opportunities most there, of still a is little the US product Products there international are short-cycle bit land.

short is metals in mentioned globally years, the And gas to opposed international particularly and opportunities. it. side I you over I green say the we've there. also penetrate particularly be recovery a bit equipment. made more this large programs the on opportunities And, kind work Globally that see riser of and are be will And in rig are lot think side. see not markets, on key currently hit development We exploratory and energy underway US programs just of but little benefit cycle Brazil riser significant driver a development to on to around developmental improvements as therefore incoming term and continue course, the weighted have has you think would the last offshore more that that's production longer we MPD participate MPD continue land and programs the in going that the equipment do a around opportunities those. we'll think you'll the that years our in XX% of piece. offshore us some those Guyana that side with non-oil of bookings we last around I I R&D into much to on mix alternative for several some or over But reactivations shoot quarter. first of of out along to and we investments services had which equipment, five we're of to the the done that as hope I fact going carryover contributing beneficiaries

hard fact in land-based present to behind both So Guyana has in Brazil plus. say that well. And then being cycle, bag are we very short development the programs strong don't is pretty and something it's that tailwinds these and everything -- it activity. and but the big active another tied progressing it's US is certainly I But it's to

Ian MacPherson

Super. Thanks Cindy.

Cindy Taylor

Ian. Thank you

Operator

Instructions] is Stifel. [Operator Our next Gengaro question from from Stephen

Stephen Gengaro

Good Thanks. morning,

Cindy Taylor

Stephen. Thanks

Stephen Gengaro

So two things for guess I me.

the the expectations, talked a uptick what guide it is this. EBITDA The higher. on about if the changes higher to imagine first main bit and And activity the are curious could confidence drivers? main But just forecast? when probably has of pretty a your you simple you But moving for is and year your -- level think about the that of in it and little just revenue you highlight upside I been part

Cindy Taylor

lot sure. again cycle throughout short the case is when initiatives revenue always We've hopefully US that of US. contributions place the And clear the was inflects market a in And for EBITDA quarter. got in down and Yeah, up beneficiary. the our the built initial a commentary our or we

help and to rate of that Site frankly Offshore/Manufactured quite our XXXX. looking segment and Well both segment. at in exit QX cycle QX our And the Products upside or So outlook we're balance Services -- Downhole and that going balance short Technologies the March solidify is and into

So, say guidance have as we the expect, are personnel that been those confidence clear you I equipment pretty can't my continues the thing should bag, very there. always be yes, it but need reticent do improve we we if to first have team in as and to strong and with utilization. is our activity And in

strong. Our time without incrementals lead question. margins higher will They over are to

And new in focused very customer activities basins. on very, been targeting so we've various

And is being of up". some that equipment "locked already

of, looking Offshore/Manufactured of tailwinds. of I then Lloyd And got high And five we a positive the short that covered pretty quarters. suggested kind was which as again When at the and so I'm cycle book-to-bill last go my strong degree to in said that's confidence. Products, four ratio,

up military, will now will we I acknowledge because early very activity energy of are move the the is not we military so with kind so left with ramp that well coupled they're of should So, alternative are right have. again stage. the much alternatives us as but investments project Then level lumpy better and the we see that which backlog ramping variables as visibility only gives major forward. which creeping the project activity service

may no think a customer activity. You quarter but and -- contact one And good real things quarter. terms right in order we're have doing contribution another of the then research the I well are all And think we're I to longer in investments. conventional and we're spending in type areas term, as be needed services products as that going development doing, putting and alternative both importantly,

Stephen Gengaro

helpful. that's No, Great.

like sort for So, I'm a pricing et pressure think cetera. of I sure sense -- the are pumping frac how and supply/demand supply/demand curious kind how and easy commentary but when we to think fairly business you about of working, pricing this many competitive I'm can US to the us and about think the currently the ask not some on trends how give to of Site it's landscape fleets exactly have side, dynamics? And Well on the just sort about the and of sort

Cindy Taylor

Yes, I can.

Now, track it's acknowledge challenge nobody tools, they're out us units drill to it's -- whether a isolation various heads, flowback the assets. frac number I'll whether unite reports even whether of for just assets, it's

this industry. capital equity in is you what we market have the so exiting a would in which can new Whereas non-profitable this those tell in businesses to a means the of not would And forward. lot once crude That that $XXX who space. lines. money is that's going be chasing will And not private flooding not those million, money left case. also business get particularly are are investments in I tighter There's past you and of on alone hand, divesting north years -- one

need frankly And quite fundamentally again a our And more lends utilization, which itself in we lends space. it tighter own to so to itself just market. better that

grow and us people in to utilization new can the our My getting can as of And is being want of top we more back equipment. entrants, quickly that so environment us more necessarily much how market and customers much continuous the will to side I we business offer ensure concern as both the ramp as a like it's not as work that lot or line we would us our to. this have customers with seeking to very we're people -- equipment that the targeted of facing are

Stephen Gengaro

maybe and we working Lloyd. as year, Thank impacts of takes of of for Great. for flow how then for cash capital, we cash sort the And should think free flow one as the you about think as where about the expectations? the final, revenues cash color. and When far puts the statement grow just that uses sort

Lloyd Hajdik

capital. mentioned Yes. kind we I $XX more quarter the first seasonal that's in of where million capital built a quarter we working which of typical use working

year. more $X.X to the bit probably are the operations As be little kind to the going positive well million the quarter. moderate second improve, fund we to cash acquisition? free of the to we'll after as CapEx, full for of the million So... expect $XX half Do back E-Flow a build flow It's used continuing as the year in of

Stephen Gengaro

one. then And Thanks. one maybe final Okay. just

And mentioned -- fit offering? the how You of that into to E-Flow mix? does add where sort does the

Cindy Taylor

tech really are that newer energy think a pieces higher the MPD particularly is we in-house bringing the past as vertical the What of equipment our our this a higher-end these products to this in and And more an of technology we of at our Many integration products control have if, it's capabilities offering our leverage that of outsourced investments that equipment some smarter point. of technical alternative on around products. further need which the example system.

Stephen Gengaro

you. Thank

Cindy Taylor

Thank you, Stephen.

Operator

call closing remarks. now we over time. for will further to back at And no Cindy this questions turn have I the

Cindy Taylor

today. John, thank call our for you hosting

Thanks those heavy much. reporting is today. and period do Oil We of so appreciate continued We a all hope who the have appreciate a you interest also call great recognize joined your We day. States. have in you earnings this

Operator

gentlemen. you, participating. Thank Thank ladies you and today's conference. concludes That for

by Speakers debrief. You may now stand disconnect. for your

Oil States International (OIS) 29 Apr 222022 Q1 Earnings call transcript