OIS - Earnings call transcript Q2 2024 | Oil States International, Inc.

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Operator

Thank you for standing by. My name is Eric, and I will be your conference operator today. At this time, I would like to welcome everyone to the Oil States Second Quarter 2024 Earnings Conference Call. [Operator Instructions] Thank you.

I would now like to turn the call over to Ellen Pennington, Oil States Assistant Corporate Secretary. ahead. go Please

Ellen Pennington

welcome Conference and States' Quarter Second Good to Earnings Call. XXXX morning, Oil

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

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

turn over Cindy. now to I'll call the

Cindy Taylor

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

projects key increased basins, in adjusted significant segment. and and by and second sequentially, advancement EBITDA system drilling, XX% production products the offshore/manufactured of along quarter offshore revenues consolidated in Our subsea increased our XX% with several demand driven

U.S. sequentially, X%. revenues international On revenues a and increased our consolidated were land-driven up XX% basis, while offshore

Services the from technologies locations. with adoption quarter U.S. segment current our Site the of optimization continued in newer customer our of exit underperforming benefited Well results certain Our and strategic of also

Services U.S. our market. initiatives, Well Site otherwise declining increased adjusted land in sequentially EBITDA an these segment Given XX%

to increased revenues as first million, of XX Offshore/Manufactured EBITDA and in June of Products quarterly ratio Bookings adjusted During segment XX%. quarter, XX% million million segment rose XXXX, of while compared $XXX the sequentially the Xx. book-to-bill $XXX of our $XX million received totaling backlog $XXX yielding a quarter totaled

was managed partially orders drilling technology systems. Our newer offerings, bookings including by for driven our pressure improvement our

Our X along given X% Well with revenues impact Site Services decreased past a and on the underperforming quarter segment consolidation exit segment's U.S. locations. lower months sequential over of activity, the X basis, of the

with the XX% EBITDA XXXX of Mexico, quarter from along share Adjusted gains in Permian to the Gulf first segment modest of activity due offshore the market in increased stronger Basin.

Our cost yield helped initiatives margins. very incremental reduction strong

In XX%, our respectively, adjusted and primarily first by international Downhole quarter increased purporting Technologies and XXXX, sales. and XX% EBITDA segment of increased driven the product from revenues completion segment,

and safely improving enhancing our debt returns, to to focus We to our and with advanced technologies efficiently provide operations reducing stockholders. on and cash and will continue customers capital allocating services, while returning

the par debt quarter, totaling some made from discount cash to $XX convertible repurchased we our of also repurchases. share operations million, at and During flows generated a

was XX X.Xx, net June X.Xx flexibility. Our giving at gross debt and us to significant EBITDA was

along our position in review with results detail. now will Lloyd more operational our financial

Lloyd Hajdik

Good Cindy. Thanks, everyone. morning,

$X.X consolidated quarter, income of adjusted $X.XX net revenues million, the $XX million generated million EBITDA During of share. and States second $XXX per of Oil or

charges exit $X.X reported extinguishment. pretax million million, of of charges million debt of facility consolidation on Our quarter gains results second defense and $X.X $X included patent

our net net charges these per was income million Excluding and adjusted $X.XX or $X.X share. credits,

million EBITDA $XXX adjusted and segment generated segment second $XX in revenues of million of Products the quarter. Offshore/Manufactured Our

States' the Asian During the operations. Southeast consolidation of charges the second at segment recorded to quarter, were million of Oil $X.X due

in margin EBITDA in XX% the to segment adjusted the charges, consolidation second first quarter. compared facility the was Excluding XX% quarter

to Southeast is Batam, Asian facility manufacturing global have our expected we produce costs offerings. from for to relocated our our number Singapore Indonesia, a product planning, and of which operations strategically Regarding manufacturing future service

and our second in the sold facility cash $XX we quarter, Singapore net received proceeds of During million.

the execute phase. of half during established our us the provisional Batam were backlog While construction in completion XXXX, Batam our allowing continues, of long-term the with both subsequent during quarter operations targeted to first facility and orders for efficiently contracted construction

Site late XXXX, $X of are of million. segment total million $XX We and second own close proceeds this revenues at Services facility segment, X remaining expected generated a Well $XX expected In quarter. to which sale that XX. was we sale in of as classified EBITDA million to for June approximately our facility, adjusted Net the the is U.S. asset held from in

$X During the with of segment underperforming exit and consolidation the the recognized associated quarter, million costs in locations.

the recorded Additionally, enforcement with proprietary patents $X of technologies. of segment its to charges associated million related the

charges, margin reported EBITDA for adjusted the Adjusted In EBITDA XX% quarter. in these quarter. the X% second XX% compared million second the of first quarter million quarter. second Downhole segment of segment, segment we revenues quarter in was margin in Technologies first the EBITDA and compared adjusted to Excluding segment $X was X% to our the in $XX

generated cash of X.XX% senior quarter, notes from million principal at million second flows facility purchased $XX.X $X.X stock. amount and Cash sale. fund the common Oil operations a capital convertible discount and in proceeds the States back $XX of in used was expenditures buy during million, million million $X $XX from our of our And to received

some outlook offer and will Cindy concluding comments. Now market

Cindy Taylor

price and planning and Despite international customers per over predictable projects. in has cuts ceasing environment crude the has production some and our pricing to year, XXXX, possibility generally range concerns oil OPEC+ first E&P half stable the major offshore voluntary which a for China relatively in demand sanctioning about of in remained the oil provided $XX of barrel the $XX

outlook for America, levels led oil systems. subsea subsea prices investment U.S., continue backlog for orders of strong OEMs as significant by to natural supports development a long-term Major and in LNG and and Stable significant the a production capital result Africa. Latin gas Asia growth offshore experience field demand of

positively influence trend expect and bookings. We future this to business our

of to look level with along backlog. of our the continue offshore new and introductions, Growth bidding capital bookings investment, given favorable, activity, levels quoting product and strong trends

oil levels declined levels favorable high, challenging despite with prices. natural activity prices, a crude WTI activity Second quarter production leading land gas remained market. lower have have to land levels and weak more U.S. inventory and Even

land dynamics, Given drilling completion over spending current expect we current levels. of at industry near U.S. and or remain the to balance XXXX

assets The which We of expect segments in land locations. exit and provide with Downhole margin operating market and Site additional and underperforming favorable measures locations line weighted as redeployed consolidation U.S. more to activity the Technologies should tangible our perform benefits to Well are subsequent implementation Services activity. to control of cost in are indicators, quarters

our the new proprietary We Technologies expect of of systems. from active adoption deployment valves Well Epic Services technologies, further continued within new are and see to our market segment. we of perforating benefiting with portfolio Within including Site seat penetration our the introduction segment, Downhole our recent our

able are confirm we EBITDA guidance dynamics, XXXX. of $XX market to Considering to adjusted $XX million for our million

flow XX% In to line a terms free or excludes of in prior XXXX, greater. generation, cash million yield approximately implying free of cash guidance, cash in quarter sale which with during we $XX expect flow and the flow generate U.S. fourth remains free facility planned

priorities and opportunities We by will continue research investing drive development judiciously to technology CapEx and disciplined additional allocation organic maintain capital in growth differentiation. to

We acquisitions. evaluate repurchases to reduction will targeted continue debt share and opportunities,

activity on our optimizing offer support like would global operations concluding to profitable of focused We customer comments. remain I in pursuing some and Now our base.

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

the storage, entrenched also and on tech floating product and bidding sea carbon service customers opportunities offshore base serve, projects energy we new subsea, minerals create our and drilling and in for opportunities. customers fixed to well expand potential and over gathering, potential term. supporting are applications us to other continue offerings Our and core geothermal our longer such and and markets support wind, to our multiple while renewable competencies deep transition developments involved in systems, we as production and floating revenue opportunities traditional clean energy and military fixed new the bid These strong capture

to various available leadership meet with conduct technology services States to safe and operations providing remain our and on continue and products globally. value-added demands offerings focused Oil customer service in product will will

our time? completes this answers you would Eric, comments. prepared up That open at questions and the for call

Operator

first The question Raymond with line comes Instructions] from of [Operator Jim Rollyson the James.

James Rollyson

with Cindy kind backlog typically, and rebound business, was you of kind different? kind the obviously similar sequential back in backlog factors. margin the I in about seasonal thinking how a timing But and line trajectory or of nice in your the great orders see today, kind curious of products what's to guess, something year, over half you of manufactured year of kind to see and trend revenue offshore of falls with as on the are the of based that last a which

Cindy Taylor

kind Clearly, bookings at the to of but date strong, it, couple I'll level at call next and looks over guidance, trajectory, if you call to -- it degree, that quarters some going the X.Xx. of fairly the look to I'm given our revenue are

-- And so don't half than one-time we would book-to-bill a still which XXXX. second for a our but outlook, of know again, I X, made the about overall seeing, if implies to this lot of say, north comments we year. be I bookings the carries expect our into of momentum We we're greater book-to-bill

sets to up environment surprise looking that very well guidance, my we're XXXX. and looked for this macro activity embedded be individual But the terms at, our of implies going that the I based in driven that And No segment. at again, international. particular offshore of results on for again, think strong is overall by there quarters and lot generation. revenue I haven't in a

James Rollyson

there. confirmation Perfect. looking Yes, just for

growing weren't work I you operations performing on those continue doing But things. on from in obviously magnitude just internal activity. of in mentioned kind some in with side margin Downhole managing similar benefits kind and So in sense of here expansion Technologies, you past, you're the Well And of on kind that thinking how the have things cost about revenues the you're potential the of margin your kind mentioned outlook? paid appreciate you that as Site the and of quarter. clearly, this And flattish of of Any performed to that. line Services through

Lloyd Hajdik

Yes.

So Jim, take I'll that.

locations, overall Services we So the see XX% when of underperforming could into that these some margins us Well getting the at margins. range, Site EBITDA we're low looking closing with

James Rollyson

quarter thinking for Downhole Okay. because few obviously that's are healthy. very what No, about improved a things. Yes. that had And you from an as well Technologies different

Lloyd Hajdik

Yes.

So digits, low high double single digits.

Cindy Taylor

margin. EBITDA . On

Lloyd Hajdik

Yes. EBITDA. On

Operator

comes from of Stephen line Stifel. the The Gengaro next question with

Stephen Gengaro

understood I low Is year. was that to the correctly. So were -- in you just to well the that just make you trying XXs half sure -- margins in clarify, site of was second that I -- guiding suggesting quickly your the

Lloyd Hajdik

Yes.

Cindy Taylor

Yes.

Stephen Gengaro

for Okay. Great. things I guess X me.

First, there's land see growth think quarters about like you Cindy, And But we've market market to I you've what of have, U.S. consistently are And kind maybe soft. maybe time on long the to watching frustrated and land M&A kind side. what been -- even been you I there? lack the know on by needs this several get do U.S. the you happen a activity anything been and has reasons the the it's do gas a out? of or how recovery side else if catalyst of

Cindy Taylor

my Yes. foremost, is comments statement. in Well, the first embedded and just

And basins. last XX frankly. back yet analysis. are XX-plus productivity in XX I producing flat land shocking analysts certainly, a to don't that record kind Activity that, down I most look lot And do It's months. way at we're basin of foot basin But kind maybe do say of by the the per the of on for despite is you percent. down look quite is that of that, If levels. months, there

to my is and opinion gearing activity play it to from towards more lot X. a this able X-mile the of laterals move so And is resource M&A that being

you of a the drilling real when that, from completing And is do available benefiting and you're that. just footage, lot answer we're and

the a talking operator. it's per Measure" about versus little when laterals, "Efficiency good just elusive you're extended for productivity all so foot And gets more this

else I some XXXX when hit, the that And that these spells my some opinion, going at believe different as does think and we point. curves to decline turn level again, production But overall everybody agile one. a question production that is -- clearly, of of that's number kind But happen? of question is in

a it gas you if natural for gas. those the if the reduced happen year, in you hard to a really cut debates demand coupled relates service U.S. drivers will us just which contribution activity things that that oil just this will, very early mentioned to with China, XXXX for right the in is OPEC+ and improved they're clearly see now, is But company in between place like get everybody of natural land and benefit now and me reverse trigger, from does an two may anyone as fact long-term come, both crude activity in all It's that production of I U.S. how X of that's Number gas not kind environment, are this land. XXXX. they perception that of natural the my because and It muted right They're kind notes, hear has I the voluntary LNG. XXXX. from late telling double and in outlook, market

XXXX in better this maybe shaping optimist about than I'm and but always just in you an their maybe to see optimism analysts be the need up I they're world. it's models this in a what thinking. an space, have because So the And macro

had just one cut outlook our I right it don't kind and we for fact, now. see of XXXX, In

Stephen Gengaro

Got Which -- maybe product laterals, that, lines a the that you might where that you. follow-up Great. does yes, to most? and guys benefit you efficiency rig And helpful. and be think when longer completion as efficiency then about

color on some that. Just

Cindy Taylor

Well efficiency -- And activity a both at our Technologies Services to about our land-driven to well work the point time. laterals just one, for Downhole work with Well our market they really again seat in segments, extended the because are talking in bring It's the and type it's from Site. Site those valves, across the this They active efficient at number predominantly cost more U.S. you're effective to operating. us and multipad very

believe, suite our share of That, new in much with Epic market then we again, national segment have a line, even a flatter And that turn Downhole an the gain we us improving Technologies, market, penetration, hoped product in coupled less to helps around. market.

Stephen Gengaro

very then just helpful. that's one me. maybe final And No, Great. for one

think 'XX? for for best the how that rig in manufactured should the that added what into growth look and offshore when X mentioned growth thinking year. I about deepwater get of could like just in about we rigs any then trajectory you over -- there maybe can demand your ultimately kind really use 'XX morphs the the Is of a half products think book-to-bill we Is activity that of that offshore for proxy products? of business, be and back it and we in

Cindy Taylor

not production let kind Yes. up bit. me development of all near into work that Rigs you of a know term, term, work explain that used go little be and It's long Again, in that. longer-term to to prove drilling infrastructure. profiles however leads seeing weighted we're It introduction facility of do work, Pressure equipment. Drilling recent are with were and we go My MPD to development. to heavily for Managed offshore as the Technologies, new exposed, is incremental particularly we demand production rigs our

of types equipment have. even riser we other products and deck But that

are And great other being will upgraded. going kind larger follow-on increased the getting subsea very production everybody seen good But contracts. some nearer rigs the knows our longer-term of So demand to infrastructure news and what call, work. the a that again, from the bookings companies precursor development. because is space to They're in we'll I be with that's and for -- are you've of that see products some term services. some They're

Operator

of Energy line Daniel John comes Partners. the Your Instructions] next question [Operator from with Daniel

John Daniel

for X me. Just

-- anticipate balance in we to levels. for don't that You or it, even make and the how if noted in that's competitive do QX. if prepared will. your curious just serve the you guess, into areas people stay current remarks lower changing and activity in the maybe the of that landscape many you at you near be XX How see I'm the I year the, and where you

Just your thoughts on that.

Cindy Taylor

I'm competitive kind landscape of U.S. you're asking the on sorry, activity? land

John Daniel

months? in this now, right at competitive stay to over see changing flattish X the we If do the X it next range of landscape sort all you

Cindy Taylor

tamping for that, add-on various to if going comments smaller get We anecdotal and has kind of shutting Yes. of seen offer comment Lloyd players trimming landscape. a of the operations, I'm evidence down one-offs I bigger summer. headcount, respond think I'll the down a to that very you I've facilities, and modestly almost probably comments. local as long see M&A many time. picture that improve competitive I'll not in opportunities But do those what as any

And through are, we consolidation. see so even M&A. just in I from need mention certainly, companies not lot. say they're to service the think their cooled size we're And market optimize energy is, either an seeing I'd from operations the when drinking for a everybody larger quite that looking seeing for customers' how they're opportunities recognizes competitive of specific But to sense that. our operating services perspective. or level, market seeing on kind a basin I'll the And scale it, and call importantly, a They're shareholder perspective, the exit

kinds have we entities. and private now all public from so inbounds And both of right

while, so trimming think fall seems bigger consolidation locations, is is facilities, it heating the think headcount, by of out be closing picture yes, the And I to like players just up. smaller some I which the going

John Daniel

The the willingness products just Okay. at one year technologies next adoption to see years? the how this -- try you expected products that or Can X the next are is you guys stage customer on introducing. out X new of address rates sort and playing X you to new and over

Cindy Taylor

not much the us enhancements wells think need. surprise the introduction going Generally, are And again, smaller. are others the us There's first proven operators those on place. secondarily, greater my the types land. AFE that it, coming customers really of And Yes. telling with in technology they're and about costs to they U.S. trial And one-off to just willingness may you. comments a smaller, are

conjunction developed and with degree, communication. involvement And so some these are operator to in being

better. trial is their willingness And them to so

Now that I'll lot trial, has to right over months, new a technology. said, offerings when been market the of is in it to to down degree the get now. of there's partner to example Downhole use a being it the And XX XX Technologies, my is activity harder last

bit And a little so uptake the is slower. it's maybe

are put if introduced. in to a to has call I'll participating years, the product a And it, contrast to company it stun that XX been company offshore. would and significant. in for me deepwater entry I'll that barriers space complete a, tried And always our newer one-off get just

as history space. very I think a I'll of this demonstrated be deep, in difficult operating And use has it'd couple long very, a that to opposed someone examples.

is Number systems. riser We've putting systems market one our riser decades. been high-pressure for in the

willing to about you're So adapt to interest thus we advance more be the market I'll market get to thus and more far talk brought great customer conversations is systems great with advanced, Probably that needs and there. of newer offering already efficient technology more acceptance. conjunction the the MPD able that around acceptance got that we've and products our was again, newer, get far, a in there, to but technology

to And for years. on on say, oh, off and working by been I probably and this the we've want way, X

then as this offshore, on is international I'll right? we're up we But take technologies going so in terms bringing the a going land, bear of about we're be those to into the to reputation because markets step -- and risk and U.S. risk introductions, market any And new great difference of then prove failure cautious complete more efficiently. of further, just technology and to take

Operator

ahead. remarks. over call I go back Please Taylor, for CEO, now the will and to closing Cindy turn President

Cindy Taylor

glad the We're well. Thank know portion results, report to quarter both and today. thanks of joining to days ahead You I as our you, I Eric, all better a of guide very outlook, busy will you improved very bet. and it's think, season. stronger this earnings our for to call

forward . with we of the season earnings so up and months. well, next rest the And care. of the goes each to hope catching several you throughout look Take

Operator

and concludes today's call. Ladies gentlemen, this

may disconnect. You now

Oil States International (OIS) 29 Jul 242024 Q2 Earnings call transcript