OIS - Earnings call transcript Q3 2024 | Oil States International, Inc.

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Operator

Good morning. My name is Mark, and I will be your conference operator today. At this time, I would like to welcome everyone to Oil States 3Q Earnings Call. [Operator Instructions] I will now turn the call over to Ellen Pennington, Senior Counsel. Ellen, please go ahead.

Ellen Pennington

Mark. you, Thank welcome conference and States quarter third 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

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

Cindy Taylor

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

represented of a in basis, our XX% we the results bookings and reported our quarter, international of our third land-driven while strong and U.S. for total revenues our quarter consolidated Products the year. On revenues quarter, Offshore/Manufactured largest XX%. During consolidated achieved offshore the constituted segment

strategically business in operations the process have streamlining and the exit locations States of prior in United lines. are quarters, we discussed the through our we underperforming in As of

to previously of frees our remaining some working the capital and continued the rigs, also cash quarter business. optimization up business which the drilling during mix around dedicated sale third our efforts We generated with

segment of Well and Following Services exit line Production changed and future our was sale previously in strategy. go-to-market named drilling our rigs and the of the Site Services Completion our with flowback the operation, testing well to

quarter, the adjusted Offshore/Manufactured a sequentially, X.Xx. million. Bookings as of and totaled million, $XXX $XX of EBITDA $XXX totaled yielding while $XXX segment of XX% totaled September million, up a our ratio Products revenues quarterly During backlog segment million book-to-bill XXth.

and results from customer quarter. Together incremental adoption our This segment Our drilling announced managed and aimed focus safety particular our drilling efficiency leader global market. of initiative Seadrill mineral at while the MPD non-exclusive operational operations. riser offshore drilling a technologies and gas increasing are award-winning relationship technology benefits vessels with with operating floating oil the standardizing and safety strategic to and drilling, technologies MPD enhance Seadrill's Limited, newer on our MPD systems of during high-spec in strategic riser offshore integrated of fleet the combines we simplifying gaining in a pressure joint with collaborative efficiency, offshore a

rig, riser this which Brazil During delivered expected begin use West in deepwater is joints their for our Seadrill the later were on quarter, to Polaris integrated operations MPD to first year.

spread U.S. coupled the sequentially market. production, macro the as XXXX, land With record quarter. leading voluntary concerns the declined to of count U.S. weaker backdrop, possibility million demand As $XX revenue OPEC+ annually activity quarterly expect production with and in acceptance completion $XX frac between oil market million forward. With going MPD this China measured average during a and continues, X% to in cuts product line generate our ongoing associated potentially declined pricing in U.S. oil crude we of about by ceasing U.S. reduced on

activity over along with the and sequential due past basis, of Gulf quarter, drop issues but from of proportionately completion and second sales. our of the exit weaker segment quarter XXXX Production a hurricanes given at in in rate Adjusted decreased the of product resulted from macro of considered in these decreased segment's Gulf weaker to third in leading segment the the second a by from Downhole on impact the months segment, XX% segment during in revenues offshore Mexico activity part the higher Completion quarter Services X XXXX underperforming trends, to is of also activity locations. driven Our Technologies consolidation EBITDA decreased quarter and Mexico. EBITDA revenues similar the adjusted The transitory. In pause offshore the

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

we leading cash net quarter, $XX from During $XX debt generated operations million, of reduction totaling a to flows million. the

stock operational the our deleveraging net we a be X with to our detail. price now and will last Over made financial years, more have X debt progress XXXX, in significant results, for expect position we our which review should improvement. Lloyd as journey, serve in along catalyst during

Lloyd Hajdik

Thanks, Cindy. Good morning, everyone.

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

$X.X quarter million, intangible charges of Our million million. of and reported included charges results and pre-tax lease $XX facility consolidation third exit charges $X.X patent and impairment asset of defense

the classified and million was We quarter. margin to XX% compared facility Products in one own U.S. EBITDA segment Offshore/Manufactured was that September third the revenues Adjusted a third of asset held-for-sale EBITDA generated segment million, second $XXX the adjusted remaining of quarter. XX% in as XX. segment quarter at in $XX Our

to net Production facility million in generated revenues our segment, Completion in we contract EBITDA segment are $X.X and of quarter. with third proceeds of of and million. In adjusted under $XX million We to Services sale close $XX the the expected total approximately this November

lease costs as quarter, the million non-cash in as asset the million During the and operating underperforming third with impairment segment of $XX and charges locations workforce in reductions. well exit intangible $X associated and consolidation recognized

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

quarter was third in second the margin XX% the segment adjusted compared in XX% quarter. charges, to these Excluding EBITDA

of have and included segment's X the the XX. In assist September information ended X our investors offerings release quarter. Technologies land-based facilities EBITDA segment historical and the months We service our revenues in reported in of $XX combined U.S. segment, $X to for million in for analysts exited Downhole results understanding and XXXX earnings adjusted third we and the million of

new During the repurchase existing Cash program of On October $X flows Board common third cash $XX in October back quarter, and Oil million expires CapEx. our in buy a million net replaced which authorization, it our invested in $X XXXX. used million stock. share terminated operations States million to generated our XXth, and was Directors of $XX from with

offer will some Cindy concluding outlook Now comments. and market

Cindy Taylor

in outlook to revenue major offshore for long-term production over and should international future The high of number quoting see support growth with capital a led demand as and LNG across global oil, longer-term, growth increased of for the subsea Africa, result bidding we natural experience by continuing our systems, bookings and of developments Asia to expect United field OEMs orders backlog product activity, levels and a the States, and energy America, subsea support for gas, sustained Latin investment lines.

with of increasing of offshore our across our previously we global wells. safety to our collaboration as solid technology, will about pressure efficiency both while potential fundamentals further announced more as collaboration enthusiastic managed drilling Seadrill systems, production-related for are drilling for addition Halliburton, market In which penetration and the macro subsea well with support

expected is We of are cost and the These the our expect Technologies actions our exit margin to restructuring in measures. Downhole differentiated subsequent Completion to segments implementation as and allocated with with lines. more additional and capital to locations, product service consolidation benefits tangible Production control Services improve quarters along and underperforming of provide

completions our expected Eastern segment's commencing flexibility dynamics, and digital with parallel, operations range in should between in gaining America current initiative our Further, Latin expect million. to our provide international $XX customers revenue the awards contracts seat expanding technology, XXXX. Considering generation the EPIC remain to recent customers facility internal introduction is XXXX, supply secure million proceeds, technological and as of quarter systems EBITDA differentiation. In with our sale the will we fourth products be the while our valve flow further mentioned Our million opportunities. will increased recent fourth with augmented Downhole of Completion which to and automation segment our perforating with Production along relatively Services our strong is and during portfolio traction perforating quarter by at also we our restructuring provide with $XX of anticipated active Technologies initiatives, Hemisphere approximately within their long-term offerings market adjusted $XX earlier. combined of for for cash of Free million $XX

XXXX. fall With net should $XX these cash below flows, expected million at year-end debt

longer-term. the organic and to priorities advantages Our opportunities research over competitive and capital CapEx create development allocation sustained include growth

investors. will share as increase to We returns also on means focus a repurchases to our

flow have authorization cash earlier, our expiration global and ventures as our Given increased to free outlook base. million date. To dedicated X a to and $XX generation, to support remain year with growth, Lloyd strong enhancing profitability mentioned support our long-term operations our we pursuing repurchase profitable and share we customer

we quality, to are stockholders. Safety, portfolio and forefront the deliver of customers' our we of remain further at of increased our cost-effective and on do, domestic that expertise, of to fundamental areas our offshore streamline We will and core strength expanded the all continue operations. and to that services and for value efficiency capitalize markets, returns our leverage operations generate operations the on focus to international technologies specialized to

access across to will traditional new demand. both and provide continue new increasing the to market global energy innovative and solutions energy We meet with to sources

growth remain oil offshore would gas our range we major open opportunities capture to geothermal pursue minerals, revenue deep storage the While up traditional developments of long-term projects further visibility, essential for and comments. to time? completes call within and and this Mark, carbon enhance and bedrock expansion energy an at sea you prepared a questions-and-answers for continue wind, long-term opportunities. That broad

Operator

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

James Rollyson

taken the continually journey measures kind of you and to Downhole bit be businesses, just the budget about having both new XQ, of season. But of how earnings just context you've past market how and about the of we've Technologies quarters? you're what of best just may your have given as Production move that You've in Completion little dynamics some context of been -- on the as barometer Services curious, land-oriented what cetera? some of profile I'm the you've last realize few the the over over what how margin around of we et seen changed. of thinking forward, comments couple introductions, U.S. done, Like rightsize quarter this given technology the are years and more we've exhaustion this the not given a given the interesting market heard this I maybe thinking

Cindy Taylor

question, that's just great you asking and that. a appreciate Jim, I

forma modeling for Production next I'd into or comfortable pro say, the generating We Completion with, coming margins just are of going our exiting either material returns. we doing feel realize pretty EBITDA And a increases lot fairly out year generating negative returns and are the and businesses budgets our in not Services. were of

release XX-Q, press also model. you we and so, believe information put And the to in allow I in the to

You've which business, is a say the because varied got quarter to QX, particular this reduce mostly And of in line. of our higher I'd that margin it suffers just mix, top and always Gulf but obviously particularly quarter. by Mexico

high talking mix kind that amount again, teens. a by And range of about of I'd variation But quarter, you're margins. say, speaking, them decent so was mid-teens EBITDA XXXX the little in for a some generally And of off.

Again, anticipate U.S. your pickup, XX% earlier both As and which with for in much of possibly we that lines. But we're to strong revenue in international, mix of XX% yet. -- Gulf more exit was correct, just point, in won't but and just bit QX, year a keys business, got the to margins a the these it commence as it to is off it's as go we will EBITDA to offshore more the seeing crop reflect the the us XXXX. into for of be you streamlined of piece the business Mexico one looking land like

so. you'll is if last it Domestically, to It recall is tested technology there's that dual Completion strategy. when has that or have Downhole we the new it EPIC been Production comes market. tested rollout really quarter a and the over and of that, So again, field being is the field taken Services. And Technologies, to

Now market I technology to because has been has best new bring will market down. activity to not the been this acknowledge

technology getting completions Lloyd early work driven. some mentioned, side P&A However, domestically. is international driven, in other not the second initial reception new one our been the customer stool we're leg and the the the And has Hemisphere. for recall good international work in of of again, perforating on Eastern business. And Brazil, as that success, was penetration then the And the most one with historically, of completion the

Downhole so, it's And I'm And the XXXX range side. while a for Lloyd to improvement are expecting of margins days, the kind see we to Technologies on early business. for of looking EBITDA

Lloyd Hajdik

Low double-digits.

Cindy Taylor

Kind year. very this little Hope that's of to contribution low double-digits compared helpful.

James Rollyson

very because kind in that revenue And product of In Downhole might presume just actually yes, helpful. Technologies, business uptake -- in see well of international improvement as new you markets. the I

Lloyd Hajdik

correct. International markets,

James Rollyson

Yes. be seem had then just little shorter some cycle more not lines activity, guess, And a going kind the forward. even but this I've duration this kind to follow-up of maybe projects U.S., earnings bottom the oil prices, the ground, through my international, some of in varying shaky is generally that's one we've but longer of heard pullback question, season, I with heard in of commentary, the

you figure as but bookings how the much Just anything your and in probably kind on of level given you're quarters. guys business, this just how the you of especially to backdrop to relates seeing and going, customers, front. back Products kind trying kind what's had conversations as of to backlog are out talk happened quarter macro a bounced But kind as X great Offshore/Manufactured the highest just of the up to

Cindy Taylor

we offshore our step led vein, off production prospects international. of is have to development that XX% that a You're And to currently you the take even it exploratory I work more as would exactly of that these had further of already in think kind revenue And again, say right. it roughly the are profiles. of lot when a that deepen mix And tied is infrastructure.

and money obviously, are the reserves And subsea develop and true discovered. specialized for connectors our of our type so that technology And you're the that any FlexJoint to spend, applications. our investments logically for going to is already

that So And our that driver for I kind do awarded see we obviously plays mind, the given will the logically EPIC in large that, of is into business my believe developments, field think of that business. these grow. the line you contracts as these around base recurring as that product

but it fields growth. the bidding is play, And for that activity and production-oriented, so with backlog, pretty yes, we'll in quoting see fact more we and already confident, also feel development-oriented

have, quoted we're profile the over additive the that base deployed should mineral I bidding business. revenue single-digit But systems, of over we're be if better the growth, base Now market. business. think which and I The I last although business, we've believe, And revenue opportunity trying we to that. forecasting believe we're -- annual is, could about systems, is not as heroic riser largely that the some activity X kind brand revenue, go-forward XX seeing good. the what again, date I and MPD incremental the ongoing to then months, around what to And we of communicate mid it growth offering on call be that type has new remember, our -- to been award have technology coming we

good. So yes, is our outlook

the headlines these a great. crude field going aren't But lot now already think where are is to right oil money spend people sunk. offshore developments Now been has I in large where internationally, money of with

James Rollyson

Appreciate the debt color, X. forward look to and net

Cindy Taylor

too, Jim. do we Thank Yes, you.

Operator

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

Stephen Gengaro

of different the on When far, margins as think so sort of come lines? on I some of more is initiatives -- So what there the know some we strategic bulk you've done about far or in product gave just just the color as the these and start, to you to XXXX. this is

Cindy Taylor

in have efficiencies, the Seat of the simplified be the where internal the standing of been and we'll -- But quarter. to left bit some shouldn't our has And That's there's around isolation always land, that as mean, has and I That's basis. looking isolation our thinking we're ongoing proprietary obviously a you on this on efforts frac we line a work essentially Valve. the in have market. SG&A, automation anybody. business, we fourth surprise product what operational Well, business. digitization U.S. you're particularly had and that's with little But Active our done underway the if as tools, know, about it's Gate lot

longer-term. offer comes that really margins to the of support the over in. a lines activity have And we're it high-graded across decent down do so, level the point, we're good product offering And on focusing to, we is that this a basins at assuming product that and we're case the EBITDA only

Lloyd Hajdik

well for As technology our years. extended-reach as

Cindy Taylor

Yes.

Let's our technology. not forget extended-reach

Stephen Gengaro

the questions of backlog to But Okay. the And think Offshore/Manufactured is, the the were on margins that? I and of in One then quarter any for also on me. guess the about sort good. turn X business, there's Products guidance how here very

since margins was mean, I of half levels them that I the think et it Is think I think level as and there low-XXs. based high ever. and always How in higher year last of any highest on the to pricing, should teens the one I the we to sort think back cetera? of in change about those what's general? about backlog

Cindy Taylor

was I annually, And we with internal in as that and look can and vary been you we bit. baseline does a But improves, feel I a But there's given you've throughput through can think world. And this But And good year, exceed to key EBITDA look long the think our you've to margins. again, door of do higher quarter-by-quarter. do manufacturing around see a than matter. were in room that facilities seen. -- goal time, out but I these your product know improvement go, about quality the not believe, clearly, mix revenue a all quarter us various we just the the Stephen, EBITDA they And margins. grows, our years going of I be have couple ago. is are as shipped it XX% to there those really could that. cost quarter-by-quarter, absorption But a sustainably

So tell I for me. Yes. kind to XX% Lloyd if of range different, now. looking XX% any you of validation stick at least with I'm the for right kind feel

Lloyd Hajdik

correct. That's

Stephen Gengaro

Okay. And any...

Lloyd Hajdik

Sorry, you sorry. had a about I'm question backlog,

You had a...

Cindy Taylor

backlog. You have a sorry. question I'm about

have I'm of amount XX% of backlog the a spare backlog. on months. generally, the cuff I'd the precision So based not the on a inspection, backlog this level that's backlog driven. forward XX parts remind conversion, about turns But you that in But not really we of decent exact work history, doing repair service also off

-- so be anywhere of time. And XX% that can revenue over and from XX% to our

you Just installed get that with base service a work. large to support you have base, and installed repair

Operator

Instructions] from the Partner. Energy [Operator Daniel with comes Mitchell Your question of line next Sean

Sean Mitchell

You will returning to weakness in be you the Cindy? of But it 'XX, that's Gulf QX. highlighted of guys QX speak the kind Mexico outlook and could in -- your some in storms related returning Gulf for

Cindy Taylor

we've it contributor business, in decades, good Well, just it is margin, for for been say offshore high a generally I'll us. very our and

QX really last of a some from of are saw year that a in completions as well that's away Now workover -- lot to particularly of you soft just what it customers intervention you intervention type around we storms. happened work vein, is that when this that there. And of and defer think you that the and work call-out and have risk work it is the can around optionality, activity, get as

we say with -- the of and customers... little very Difficulty] analysts improving But returning you QX and of But and for is that year Mexico on in probably I'm year we're softer of on but I bit call, anybody our XXXX. [Technical -- the good just solid, based Gulf modestly margins next activity getting feedback, some that a the the are this modeling model on in business last business. for year, sorry, outlook a customers piece very to balance, see would Our -- should

Unknown Executive

Yes, that was my fault, sorry.

Cindy Taylor

the pretty period. to Gulf the activity. level Returning workover worries. And again, then throughout intervention work is of No and solid

Sean Mitchell

is I then but add and where around to markets international think you in earlier us there the softness opportunities could 'XX? for just you earlier, but Got seeing walk it. potential grow through anything the Brazil else mentioned mentioned you're to to Brazil, And in today, call color you're where seeing any international? you business

Cindy Taylor

been I long to or solid time industry of more And We've all a if base they're probably for I in operations. Brazil have quite deepwater go data, XX% activity. of very, and think very a the

spent. really and opportunity that us Brazil. in And not a that has the you're is But continually. you're production fields that's that in production been And good So just already new are in place. But looking addition facilities that, participating for where facilities being the if vis-a-vis such to Guyana. the deepwater at these are discoveries as they're step-out in for are infrastructure dollars not again, around

region. me particularly There riser there for I've taken to It's broad is a play production the very say seen been to going be advantage for we to of U.S. introduction actions where other that accordingly. we think I weakness really we're with I do the equipment, and MPD is multi-decade a can it's our se generally, hope type us in resource land, see Petrobras of around so, with opportunistically any per but positioned hard take that And and drilling connectors. infrastructure, our say that base in well operators it of has basins the on equipment, we've more offshore weakness garner some we of. opportunities,

Lloyd Hajdik

sorry, contributors and America, Sean, Africa. spending, EPIC suggest just the for Yes, the largest third-party type Latin data that Asia would

Cindy Taylor

and quite it Africa it's a renewed pause kind certainly in frankly, I'll it. a decades, a been getting Africa kind And West now took is type. big new We've emerging of but call of interest, for

Operator

question of with next again, Gengaro Your the line Stifel. comes Stephen from

Cindy Taylor

Is there you're chance mute? any on

Stephen Gengaro

and C&P margins are Cindy. I'm follow-ups, X those sorry. on kind I year. Sorry, of, Downhole quick I'll I you Are and guided on know The it, was sort call loosely next mute, those some that Or or of when from activity a the to you perspective businesses anything adjust to improvement you pricing where need you for sold? being there get today of levels? is kind

Cindy Taylor

I'd not But softness in I it's to forma QX QX. price pro caveat, are in I with streamline And out that are not counting simply because the as where on QX or is. market, will -- softness, in it if of improvement. getting have It's QX, the to we say we were I close we're pretty to Gulf today this

Stephen Gengaro

Okay. that, That's of together. D&A [ little I like pretty bit tied guess, outside the the flattish quick think, I that's quarter? then ] C&P And other But $X.X out the segment, is Great. of coming helpful. XQ third was, they're one a of million D&A with

Cindy Taylor

that. have will Lloyd

As the he are looks because businesses, number, of say I the that for also be but of towards is then Stephen, down realize really -- specific some do our the we DD&A heavy going to higher-performing exit technology our these will going capital had need active we valve just over protect X really our things. Number starting because one, focusing some of allocation DD&A decade, last seat run CapEx, much when completion that, to really businesses. equipment. reduce does And of lighter out the we the the and wear on is and you services CapEx do particularly frac

forward free of going enhanced That's play translates sustained really kind lower that flow. CapEx these things all DD&A into into cash so And message. lower and the

Lloyd Hajdik

your And the DD&A down Yes. the point, going exited from businesses. fourth kind in of is with reduction line quarter to

Operator

time. There Cindy Taylor is back Cindy? for now over the closing remarks. no I further question will to at this conference turn

Cindy Taylor

Thank Mark. you,

busy did all and know thanks we interest States. Oil call. you your appreciate You our great today, of of able a it's job who to a earnings, We and join to certainly week were in

any. season. the you you care. balance should success have through I We wish Take for earnings follow-up available And questions the will of be

Operator

concludes today's Thank for and you call. that Ladies Cindy. gentlemen, you, joining. Thank all

You may now disconnect.

Oil States International (OIS) 30 Oct 242024 Q3 Earnings call transcript