OIS - Earnings call 3 2023 | Oil States International, Inc.

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Operator

Good day, everyone, and welcome to the Oil States Third Quarter 2023 Earnings Call. Today's call is being recorded. [Operator Instructions] I would now like to turn the conference over to Ellen Pennington. Please go ahead, ma'am.

Ellen Pennington

Thank you, Lisa. to Third welcome Conference XXXX and Call. morning, Oil Quarter States Earnings Good

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

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

Cindy Taylor

provide Thank outlook and company-specific where our morning, our our thoughts we in you, joining market to quarter and today, discussing results Ellen. on Good conference will third call thank for you XXXX discuss addition comments. our trends

and year-over-year spending in and increases backlog third activity benefited Our in significant with offshore quarter results and sequential growth international from project offshore conversion.

quarter XXXX. declines well completions, by an since We tempered believe by decline this which the commodity were quarterly in weaker triggered U.S. ongoing activity performance prices effect year. in our was However, U.S. has been of earlier first industry-wide

and X%, $XXX Year-over-year backlog our the year-over-year since increased EBITDA sequential fifth increased and XX% quarter, EBITDA XX. and segment, by grew third project-driven significant XXXX. Segment as segment's growth and activity. million X% September increased respectively, improvements the international totaling in higher by within adjusted X% million $XXX consolidated and where revenues year-over-year, level respectively. revenues XX%, XX% consolidated Offshore/Manufactured and driven Our by sequentially The third totaling offshore quarter reflect Products revenue quarter of revenues for a the fourth quarter consecutive of sequentially adjusted and highest

energy Riser The from a harvesting benefiting outside are the System increased facility destined and extreme seabed We totaled X in customers' States. quarterly quarter, water production a Brazil order project in offshore third yielding $XXX of at We a for X.Xx. contract United book-to-bill alternative designed investments awards our in and equipment traditional Deepsea our notable the Mineral ratio received for including Merlin minerals use depths. for segment's bookings million, projects

wellhead. We invested September generated very XXXX, cash With before Gulf Seat heavy debt operations Our million this hand for production third by continued operations reducing of in significant the and in earlier our the Energy $XX technology during $X on Gate month Energy cash at sealing intervention flow remains totaling recognized technology. were the short-term outstanding. with valve receiving quarter, maturities and the in and equipment financial in capital grease involved proprietary our Active while personnel substantially exception provides Excellence million no performance have operators XXXX Award net at best debt technology used strong. with This Gulf amount Valve of no valve from innovation investments and Information million $XX XX, position

cycle is others. pressure and our our next Valve among Seat extend our with focused introductions, be Active beyond to reduce System This debt liquidity position our new Technology, Riser including expansion enhance gained to Mineral future offshore in expected in Gate product We investment further continued well future and to managed years. from Merlin expect Deepsea our our by couple international encouraged quarters. drilling coupled remain We the net the activity, system, of benefits offshore

it to now to in our and As land-based in relates pricing, current detail. commodity activity recover more U.S. U.S. operations will review levels. Lloyd from results XXXX of activity improved financial we expect with position currently

Lloyd Hajdik

Thanks, Cindy, and everyone. good morning,

selected During the generated third included share. adjusted of of represents or revenues positive $XXX sale. $XX our which incurred of $X.X third million, quarter facility facilities quarter, were net million million, million $X.XX of income of This per net we income charges consolidated and net as consolidation consecutive we fifth Reported EBITDA $X prepare for quarter income.

million reported Offshore/Manufactured in third the $XX and million, EBITDA quarter adjusted the operating XXXX. Products revenues $XX segment segment the $XXX in fourth highest of are since quarter third level of income of million the of Our generated Revenues quarter. at

the XX% quarter, to to gain operational efficiencies third charges locations our second Adjusted quarter. margin XX% costs. was $X.X the with of of we in segment third service future effort million During in and recorded relocation and certain consolidation compared ongoing EBITDA quarter in associated manufacturing the reduce an and

our manufacturing operations reclassified our are Accordingly, service Regarding strategically we X as September facilities from planning, held-for-sale certain XX. facilities Asian and process relocating we to in Singapore facility and of have the Houston assets consolidated Indonesia. at in Batam,

to totaling quarter approximately of plans fifth our of facility XXXX. the quarter Batam. on September end XX, between XXXX. construction is backlog million September for result to range for Given the current land these or expenditure The highest from costs consecutive $XX of close now expected increased our since in XX, early to expected are which level exceeding its quarter begin plans, and Houston, are associated our at million, facility sales increase XX% total new from expected late as fourth XXXX at XXXX capital in are XXXX an million and purchase million $XX the sequentially with Proceeds in new and investments Batam. Backlog a facilities $XXX to the a $XX a in of Singapore

segment generated Well we year-to-date million, adjusted reported $XX quarter volumes, frac reduction X.Xx. ratio conditions quarter. and were quarter an $X by manufacturing customer our revenues of segment, the million $XX in EBITDA our of $X of Downhole in third segment the was completion reduced competitive yielding Adjusted and adjusted coupled with of spreads market revenues by quarter. XX% for revenues of million experienced a while and in XX% breakeven continued $XX income essentially for in products margin EBITDA margins the quarter Technologies loss million, million, operating of operating the we third quarter. In driven Lower lower bookings and quarter. driven the the totaled was during demand book-to-bill compared third in In quarter segment the to EBITDA second Third segment, Services $XXX million, third Site

future During of cash net and invested $XX quarter, $X flows generated the third we in to from support million CapEx growth. operations million

XX, liquidity hand, with September which, million. outstanding resulted borrowings of amounts available cash under As revolving drawn facility our in and together credit available to on no of were $XX million, totaled be $XXX

Cindy some concluding Now comments. and offer market will outlook

Cindy Taylor

Thanks, Lloyd. The tight early a commodity in markets took of turn XXXX. XXXX

barrel, production $XX in pricing oil the demand first of third Softening with in announced has by to Brent WTI by global caused averaging per with XXXX. reaction significantly OPEC+ the during elevated This resultant quarter drop prices per the improved respectively, countries which quarter. and inventories commodity followed and resulted cuts, $XX a barrel and was strong

the oil, above their and However, natural of and expectations inventories X-year gas improvement. Global year-over-year, gas, remain for the prices X-year land average gas are thereby U.S. growth leading XXXX. far drilling natural on spending for balance lagged for to U.S. below crude average thus are land-based the lower now normalizing seasonal but activity has commodity in oil tempering for and completion price activity

major environment Products our result to flow market We the to growing and on strength continue are and expected offshore milestones. project free execution strong are international executing Offshore/Manufactured our grow EBITDA and given in and as revenues, operations. Revenues segment backlog of a at increased order levels adjusted current flow, well of our the cash of

and expect the segments do softened to Well Technologies half activities Site XXXX, market of second in with Services continue to We line U.S. in which has appear activity perform land our commodity indicators but as on to be for improvements customer profitable in price global XXXX optimizing our bottoming from of pursuing support operations focused with remain our environment. We activity a base. in support and gained strong is Downhole expected

U.S. of markets, will expertise and areas to unfold, in we service the continue focus core offerings. both As the our of recently offshore our and deployment product equipment further enhanced opportunities market international with and on differentiate in to

revenues, in in in cycle, generation. I and Now with Initially, a prices offer some to fundamentals projects we XXXX. concluding shorter-cycle in deepwater time accelerated markets based for which United are commodity international world the from outlook the States comments. to lead the in upon would the basins higher up around cash to free industry multiyear like and investments drive XXXX, are an increase In benefited prices. industry clearly should Strong growth macro longer-range commodity in which the investments pointing flow long experiencing responded earnings

competencies comments. you conduct meet new call are open sustainable entrenched traditional projects customers while runway offerings applications and operations potential our clean our core we and transition potential base. Oil to and deep-sea bidding to answers for minerals offerings available and renewable developments customer will will safe on wind customers serve, fixed will subsea, in technology strong remain questions the prepared and and gathering, we developments, extend involved Our product us well and Market-leading bid to and service such other up our energy and fixed providing our a for markets military products time? expand support floating storage, would and technologies leadership service as revenue our opportunities systems, tech this at supporting to demand and value-added new opportunities. globally. and Lisa, These focused the geothermal energy continue on also opportunities with continue and drilling product production to the in multiple various competitive in capture completes for advantage. That services carbon floating offshore and States create

Operator

We'll question from Stifel. take Stephen Instructions] our Gengaro with first [Operator

Stephen Gengaro

I to wanted as should I of of margins quarter. of start and OMP year? range mix about were into outcomes what some How Products. was the in The execution. and the imagine go next margins that's sort the think through we for And Just with stellar XQ we Offshore/Manufactured

Cindy Taylor

right. You're

Our margins were very strong.

execution. and kind course talked period major time project of single As margins longer a our EBITDA We project had strong, about of on were some They the you know, over work. high a basis. quarter we've strong guided to teens we of

We mix. revenues service you oftentimes as margins. also higher which, higher from revenues, you carry commented know, had good contributions Service on

our there And lifted several overall positive is it base, higher are course, absorption. margin better that so And of profile. factors of revenue part

a went right things of lot the So in quarter.

at progression my in but that for out, single every in looking quarter, are up for the be you in generally those were I'm XX% quarter, about every segment, it's averaging in high teens looking on XX% and margins you've bit I that look that's think seen again, particular overall in QX an we anomaly segment, XX% at we of QX, QX, of helpful. to don't speaking, going this QX, schedule, we throughout margins north to want As if forward, our a year. moving and XX% we're but

Stephen Gengaro

That backlog also been is helpful. then same the segment, has the on And growing.

think you're of XX% gauge reasonable project-driven of from Are act -- last should end I you the year. year business a how out. up the a that is

a piece, realized. So is kind growth in guide way when the the backlog of being at sort as reasonable projects in revenue that 'XX think least a is of the potential about we the in segment, change

Cindy Taylor

and obviously, puts production time, is home backlog, subsea that probably It because led a Brazil to infrastructure at in a lot of now, tied point project is but surprise. is in a from terms takes always timing, be particularly That's and technology of lot of major and Guyana. our by driven no right and there's to this going

significant award Now we be base activity, And new MPD trying there in early and that product that but by ebbs quarter-to-quarter And in systems. what there'll introductions the of to do going flows interest activity gotten seeing forward. number place. stages one, is we've award are bolster like very we're our always contracts level of

quarter-by-quarter. predict better always on, kind and higher bit looking X to or revenues it's I'll again, hedge we're So in of say for totality, But much a every book-to-bill quarter. a of hard

higher over but the that tells awards. not able on downs think a demand planning X:X time. may we of be on that sustain to letting should book-to-bill me kind guidance there I that call. But we specific again, my once overall quarter-by-quarter ups nothing bookings the of So of -- out next and depending to go again, there our through earnings do there's lay just that's I'll on ratios our process be revenues higher customers out my course timing those But

Stephen Gengaro

of one Great. think you would quick mentioned about quarter. -- we fourth the you which is sort But And right don't think the quarter, that is now. of what in $XX.X I like land kind piece seasonality year then fourth I guide know one guide, year's mean, just we I also a full think reasonable Is your is when -- million. ballpark million, this I predict. to that U.S. the about, hard there to know $XX given consensus the didn't

Cindy Taylor

that, will land-based we I I third Yes. face the I had And million. our fourth had consensus -- annual would mean, do tell a on first activity. we I that isolate was you, $XX.X on see quarter, call it, didn't is but what U.S. -- about quarter let's weaker

question market The going offshore. range. where Or in land-based do can Thanksgiving information are QX lift than better land-based on the prices, still U.S. again, lot, and it half XXXX. inventories, [ ] years the really Now -- activity first I know bottomed push very is million this in about the industry, say, crude yourself to unless crude lower offset to compressed always of is you've X-year not any than and more this would based barrels a they this you are holidays? I international would But it the on above Christmas. it's looks ask get the good the nat were certainly were XXXX around What doesn't lift rule is I U.S. and know much I $XX don't strength The I strip average, while with what get And in a to we in thankfully, good. than but was guidance do market. going they got to knowledge experience that earlier into XX got say on year, the I inventories by gas improved. lower. is count a year, in And is, they our

Now next outlook for they mid-XXs sit and $XX. over year,

commodities in LNG me to by a exports, you're as improved. driven I tells are is a XX% gas, but it forecasting nat bit, And exports well strip Mexico. So gas about Natural think, both the better. lags increase as

U.S. quarter that fundamentals globally, U.S. an So XXXX. be the I improvement is will But land comfortable would necessarily certainly, in I benefit commodity tell me in but embedded on fourth think land not with.

Operator

Jim from with question next Raymond our take James. We'll Rollyson

James Rollyson

how and the move benefit. kind just consolidation ultimate Batam think On Singapore looking the about at, some from general of you're of to activities to maybe frame the up

cost to the making to sale that's that? by going ultimately the a mentioned how You about terms you're is facilities. improvement? a paid for in about Just Is of it we what think margin do why margin ultimately think existing the how kind drive of of from which standpoint. moves just But

Cindy Taylor

in. into independent a manufacturing things, And on environment of Batam. around geared is is ability is presence, labor one, kind it real move the will be already absolutely Southeast of of in line, There multiple keep have we'll in facilities. but fully Asian a That the will of know. the Batam, a Southeast bid all obviously, Houston, won't the in these Batam. our revenue And think into bidders new cost by of Singapore, one been Clearly, Singapore the expand so come facilities And facility. the No. that interest in higher improve margin margin. proceeds, And has multiple lower-cost subset they Asia. you our to, goal improvement. machining there's help. Separately, the idled and but lot kind certainly of We've is manufacturing hampered is I work facility there have a been almost done had they to so, side in the that increase lot over doing we've we facility and the in we will operations, which In offset those top

that in proceeds become we saying quite to expect corporate Those or feel XXXX. we to just us. early frankly, comfortable so sell And proceeds, QX

so we Singapore both in that and the Batam. will will And exceed investment make sum of Houston the new

James Rollyson

pray just obviously, Technologies, of Downhole U.S. activity. there on margins a then And weaker kind Perfect. completion felt to

and As the recovering that anything this minute to think recovery of about talking quarter activity about is do do you next you temporary looking revenue were that structure? there? Is Just out next a plays trying there territory? -- an generally to you as about of dip? actually on EBITDA temporary we quarters internal over standpoint, ago, carrying segment all kind start think this certain we Are the the viewed we in there of year. few we see Or because -- get were margins need to that from bottoms somewhat kind cost to for kind as level in a you the higher year that think a positive can see cost how back next that recovery a we're of how guys if

Cindy Taylor

Jim, you to Well be talking Site about or I GEO. clear. Are Yes, want

Lloyd Hajdik

Downhole.

Cindy Taylor

Downhole.

to wanted make sure. just I Okay.

of the as contracts had performed the in people we you market. versus at Downhole need this pressure long that Technologies other we -- to segment of And i.e., business, our spot providers the wireline just a QX. What basically see, contracted call spot-based dichotomy lot So place very kind on whether in things product-sell are I it, quite see are happen. a some pumpers, major quarter, out you or market differently. businesses to customers X essentially the your, This breakeven and companies to the service of for explain

the fleets for which downhole down. goes also means frac down, several the go tools So demand

in line, top And it's particular in the a But at combination. is revenue it's thing point this so that time. business biggest

investments being are making said, technology. around that we Now newer

will major of particularly business in cut. have that There's improved costs yes, we a in not -- the increase and the that spot-based activity, But cut drivers technology of going we soft a good follow kind talked going business. for fleets your trying are activity about to to yesterday, are penetration quarter well. in to long bring reason our recovery will bring enhanced we believe it we that to of market international that costs question, no have domestically. engineering course, XXXX will And to some a as to help our Board term. because we take course, we doesn't improve we to the of much, the to X that need Those did expand that impact. to in as of R&D that So profitability X And meeting frac at forward, we're initiatives and topline

And we can XXXX. in enhance profitability so that to we're that turn confident business

Operator

We'll Lemoine question our from take Piper Luke Sandler. next with

Luke Lemoine

Can various had orders being about the OMP, least order. talked you Merlin leaves facility $XX Can rest facility. you like other orders XX at Cindy, you of each, and you the lot Merlin in maybe the room a XQ comprises the in next X for or things months mix? a production nice orders of of of those more what very production XQ. about kind to And order talk see over then that outside kind large of what and for million maybe which standard

Cindy Taylor

a orders, orders. Yes. enjoys and broad-based fixed platform always business our crane line orders. we that said mean, connectors are very good and example on as we've recurring conductor routine of We've an almost lot high-end casing I those got a type strong of get

et work, military have cetera. We

are which orders out our So valve isolate. to are orders, short-cycle technologies lot the then degree, a recurring But production our X. well. of always We larger to of order going just valves, kind there's call some it's as diverter and that typically be hard to

and driver. both me I'd hard frankly. any one line it's they're on quite of to glom geography, for So product to say broad-based, major kind

Operator

Daniel question take our from John Energy Partners. with Instructions] [Operator We'll Daniel next

John Daniel

I from orders question, the military you geopolitical, I'm are to any that just got current customers. group curious, climate? poised just a Cindy, given referenced signs -- rise given

Cindy Taylor

multiple come correlate around the rise, times, lot that. in large orders are to years. have on And of do a and I can span We they the bidding are these can't lot and batches it quite necessarily we quoting geopolitical -- but environment, frankly. a of

we've And is we've joint fundamental in an in used our and technology particularly But of increase gas is so some military those an used military to of see there to is my elastomer it applications, and Again, grounds expectation decades. this flex done so to core technology and for adaptation in improve. ordering. for your oil type point,

John Daniel

me there Okay. the then guy here's dumb that. what's Seabed I for in because much about question don't harvesting but minerals, set And know opportunity the

Cindy Taylor

they're the We're think I in robust. extreme stages that. of early incredibly

there's lift that waters middle is deepwater as these area more is which I to the are called quarter. There And in we've an that and is getting around International other order and areas, lot because the simply that but to always pacific. the of permitting countries media at and so country Authority, we and slower opportunities. opposed the governed say, looking of layman we think bidding I controls -- in received by before, one opportunities a talked are where say nowhere, this that international And sovereign are Clarion-Clipperton actively those case a press would Zone, an Seabed is with

transition, but and for battery cetera, So faster energy I will particularly the possibly areas technology, waters resource alternative international solar. the Zone, Clarion-Clipperton minerals et rich wind, with these think required, extraordinarily metals are sovereign-controlled move

of So site, supplies. countries lot there's feel that these the right you global highly on you know they minerals, because have then have a China new to huge a now, dependent and percentage metals resource. And for and of access

in you're is your to open-pit a control. And center. the internal diversification addition me world. unequivocally security to mining there's and these country's focus it, particularly it's your in then advance increasing energy around environmental concerns around So for of I will that going is countries and that, front own And sovereign say advancement if needs tells

in grow energy there environmental concerns there the transition, on will right? be types And it open be assessments seems pit be order the all with but like less environmental to seabed, so there to of activity consequences this than mining will and has with

John Daniel

could how an guess to X be many Would right. to a be you? you hazard in that to All for systems years opportunity as X willing

Cindy Taylor

yes. that. unfortunately I -- can't do would I

Lloyd Hajdik

On John, have system Deepsea we Mineral I'll also our Riser of website, point operation. the in out. an animation

So you look take to I encourage go that. at a

Operator

there no for questions time. closing Cindy further to like over remarks. the call are to I'd And back turn this Taylor at

Cindy Taylor

appreciate so interest. you I for Thanks today. the Thank much. joining us

those unique, you're of which I bookings. right higher products bit transitioning around that applications, a those introducing the it's is companies busy robust will be that multiyear well, by day certainly of a our but think technologies for a just led decades, with inroads and and deepwater think As basins in quite my fundamentally had the our frankly. stream space. I our again, lot next new U.S. robust technology last that it gas because I international kind are talked for year working now company for making towards reporting. of busy, think, and the size, world oil and realize we're of and for in into a environment year, thoughts up conventional U.S. improved differentiated our deepwater, outlook leave we revenue always, sets and in for our realized the a we that of activity I about, will many strong not seeing lot are and into as business headed we've size a backlog in for And do land and that for which others doing -- the

that strong earnings you you returns be you. our strong have. of any have our hope therefore, a into growth Thank available will we shareholders. I company for and a so hope do work follow-up the questions I from and good And might on you season, with to translates remainder

Operator

and that may your And for you Thank today's disconnect. you presentation. participation, concludes now

Oil States International (OIS) 27 Oct 232023 Q3 Earnings call transcript