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Oil States Announces First Quarter Earnings of $1.13 Per Share

(April 27, 2011)

HOUSTON, April 27, 2011 (GLOBE NEWSWIRE) -- Today, Oil States International, Inc. (NYSE:OIS) reported net income for the quarter ended March 31, 2011 of $62.1 million, or $1.13 per diluted share, compared to $40.2 million, or $0.78 per diluted share, in the first quarter of 2010.



The Company generated $760.4 million and $139.8 million of revenues and EBITDA, respectively, during the quarter compared to revenue of $532.3 million and EBITDA of $91.5 million in the first quarter of 2010 (EBITDA defined as net income plus interest, taxes, depreciation and amortization).(A) The year-over-year increases in revenues and EBITDA were primarily due to the full quarter contribution from the recent acquisition of The MAC, a leading provider of remote site accommodations to the Australian natural resources industry, and improved results from the well site services and tubular services segments due to stronger North American drilling and completion activity. Consolidated operating income in the first quarter of 2011 was $94.8 million compared to $59.8 million for the corresponding quarter of 2010. 



"The acquisitions that we closed during the fourth quarter of 2010 generated better than expected results, contributing to strong year-over-year growth in the first quarter of 2011," stated Cindy B. Taylor, Oil States' President and Chief Executive Officer. "The MAC and Mountain West acquisitions played a large role in our accommodations' growth this quarter, providing us with greater geographic and resource exposure along with strong and growing revenue streams. Service intensity from horizontal drilling and completion activity afforded us improvements in both pricing and product mix in our rental tools business. In addition, OCTG shipments remained strong with Tubular Services' margins improving to 5.9% in the first quarter."


Mrs. Taylor continued, "Looking forward, the outlook for our oil sands and Australian mining accommodations remains extremely positive. Customers in these regions continue to announce additional projects which add to our demand visibility and should bode well for the occupancy of our existing rooms and our planned expansions. Bidding activity in our Offshore Products segment remains at healthy levels with March 31, 2011 backlog improving to $415 million, up 17% from the end of 2010."




The Company recognized an effective tax rate of 27.3% in the first quarter of 2011 compared to 29.3% in the first quarter of 2010. The lower effective tax rate in the first quarter of 2011 was primarily due to foreign sourced income taxed at lower statutory rates. The Company spent $92.6 million in capital expenditures during the first quarter of 2011 primarily related to the previously announced construction of the Henday Lodge and continued expansion of the Wapasu Creek Lodge, both located in the oil sands region of Alberta, Canada. The Company currently expects to spend approximately $600 million to $625 million in capital expenditures during 2011 primarily to expand its Canadian oil sands and Australian natural resource accommodations along with adding incremental equipment in its rental tools segment to service the active North American shale plays. 



BUSINESS SEGMENT RESULTS



(Unless otherwise noted, the following discussion compares the quarterly results from the first quarter of 2011 to the results from the first quarter of 2010.)



Accommodations



Accommodations generated revenues of $197.1 million and EBITDA of $75.2 million for the first quarter of 2011 compared to revenues and EBITDA of $145.5 million and $57.8 million, respectively, in the first quarter of 2010. Accommodations revenues increased 35% and EBITDA increased 30% year-over-year due to the full quarter contribution from the recent acquisitions of The MAC and Mountain West which added revenues and EBITDA of $45.5 million and $20.6 million, respectively, in the first quarter of 2011 and the strengthening of the Canadian dollar against the U.S. dollar. 



Well Site Services



Well Site Services generated revenues of $140.6 million and EBITDA of $41.4 million in the first quarter of 2011 compared to revenues and EBITDA of $97.9 million and $20.3 million, respectively, in the first quarter of 2010, representing year-over-year growth of 44% and 104%, respectively. The increase in EBITDA was primarily due to year-over-year increases in activity from the Company's rental tool business.



Rental tools generated $107.5 million and $34.2 million of revenues and EBITDA, respectively, in the first quarter of 2011 compared to revenues of $67.5 million and EBITDA of $14.9 million in the first quarter of 2010. These year-over-year improvements were primarily due to better pricing and product mix resulting from the on-going increase in U.S. drilling and completion activity, particularly in liquids rich horizontal drilling areas.



Drilling services generated revenues and EBITDA of $33.1 million and $7.2 million, respectively, in the first quarter of 2011 compared to $30.4 million of revenues and $5.4 million of EBITDA in the first quarter 2010. The year-over-year increase in revenues and EBITDA was due to increases in pricing and cash margin expansion with day rates rising to $15.3 thousand per day in the first quarter of 2011 from $13.8 thousand per day in the first quarter of 2010, and cash margins improving to $3.6 thousand per day in the first quarter of 2011 from $2.5 thousand per day in the first quarter of 2010.



Offshore Products



The Offshore Products segment generated revenues and EBITDA of $128.4 million and $20.1 million, respectively, in the first quarter of 2011 compared to $103.0 million of revenues and $15.5 million in EBITDA in the first quarter of 2010.  Revenues and EBITDA increased year-over-year at Offshore Products as a result of higher demand for bearings, industrial and elastomer products coupled with the acquisition of Acute Technological Services which contributed $6.1 million of revenues and $1.2 million of EBITDA in the first quarter of 2011 partially offset by reduced shipments of drilling rig and vessel equipment. Backlog totaled $415.5 million at March 31, 2011 which represented a 17% increase from the $353.7 million reported as of December 31, 2010 and an 88% increase from the $220.6 million reported at March 31, 2010.



Tubular Services



Tubular Services generated revenues of $294.3 million and EBITDA of $13.5 million during the first quarter of 2011 compared to revenues of $185.9 million and EBITDA of $6.6 million in the first quarter of 2010. Tubular Services' OCTG shipments were up 53% year-over-year with 154,400 tons shipped in the first quarter of 2011 compared to 101,200 tons shipped in the first quarter of 2010 reflecting the continued year-over-year improvement in U.S. drilling activity. Gross margin as a percent of revenues increased to 5.9% in the first quarter of 2011 from 5.3% in the first quarter of 2010 as revenue per ton increased 4% year-over-year. The Company's OCTG inventory increased by 6% during the quarter to $351.7 million at March 31, 2011 in support of new customer purchase commitments, primarily associated with horizontal drilling and completion activity in the shale plays.



Oil States International, Inc. is a diversified oilfield services company with recently added exposure to the mining industry through The MAC acquisition. Oil States is a leading, integrated provider of remote site accommodations with prominent market positions in the Canadian oil sands and the Australian mining regions. Oil States is also a leading manufacturer of products for deepwater production facilities and subsea pipelines as well as a provider of completion-related rental tools, oil country tubular goods distribution and land drilling services to the oil and gas industry. Oil States is publicly traded on the New York Stock Exchange under the symbol OIS.



For more information on the Company, please visit Oil States International's website at http://www.oilstatesintl.com.



The Oil States International, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6058



The foregoing contains forward-looking statements within the meaning of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are those that do not state historical facts and are, therefore, inherently subject to risks and uncertainties. The forward-looking statements included therein will be based on then current expectations and entail various risks and uncertainties that could cause actual results to differ materially from those forward-looking statements. Such risks and uncertainties include, among other things, risks associated with the general nature of the oilfield service industry and other factors discussed within the "Business" and "Risk Factors" sections of the Form 10-K for the year ended December 31, 2010 filed by Oil States with the SEC on February 22, 2011.






















































































































































































OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES

 

 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In Thousands, Except Per Share Amounts)

 

 

 

THREE MONTHS ENDED

MARCH 31,

 

2011

2010

 

 

 

 

 

 

Revenues

 $ 760,441

 $ 532,345

 

 

 

Costs and expenses:

 

 

Cost of sales and services

 574,398

 406,510

Selling, general and administrative expenses

 43,708

 35,153

Depreciation and amortization expense

 45,151

 31,078

Acquisition related expenses

  1,097

 --

Other operating (income) expense

  1,311

  (201)

 

  665,665

  472,540

Operating income

 94,776

 59,805

 

 

 

Interest expense

 (10,249)

 (3,470)

Interest income

 1,013

 78

Equity in earnings of unconsolidated affiliates

 51

 29

Other income

  143

  762

Income before income taxes

 85,734

 57,204

Income tax expense

  (23,383)

  (16,789)

Net income

   62,351

   40,415

Less: Net income attributable to noncontrolling interest

  274

  172

Net income attributable to Oil States International, Inc.

 $ 62,077

 $ 40,243

 

 

 

Net income per share attributable to Oil States International, Inc. common stockholders 

 

 

Basic  

 $ 1.22

 $ 0.81

Diluted

 $ 1.13

 $ 0.78

 

 

 

Weighted average number of common shares outstanding:

 

 

Basic  

 50,936

 49,896

Diluted

 54,852

 51,920


 














































































































































































































































OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES

 

CONSOLIDATED BALANCE SHEETS

(In Thousands)

 

 

 

 

ASSETS

MARCH 31,

2011

DECEMBER 31,

2010

 

(UNAUDITED)

 

 

 

 

Current assets:

 

 

Cash and cash equivalents

 $ 96,973

 $ 96,350

Accounts receivable, net

 519,045

 478,739

Inventories, net

 531,620

 501,435

Prepaid expenses and other current assets

  26,964

  23,480

Total current assets

 1,174,602

 1,100,004

 

 

 

Property, plant, and equipment, net

 1,322,706

 1,252,657

Goodwill, net

 482,906

 475,222

Other intangible assets, net

 137,603

 139,421

Investments in unconsolidated affiliates

 7,166

 5,937

Other noncurrent assets

  41,773

  42,758

Total assets

 $ 3,166,756

 $ 3,015,999

 

 

 

 LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

Current liabilities:

 

 

Accounts payable and accrued liabilities

 $ 296,327

 $ 304,739

Income taxes

 5,520

 4,604

Current portion of long-term debt and capitalized leases (B)

 186,910

 181,175

Deferred revenue

 53,242

 60,847

Other current liabilities

  5,656

  2,810

Total current liabilities

 547,655

 554,175

 

 

 

Long-term debt and capitalized leases (C)

 778,575

 731,732

Deferred income taxes

 86,409

 81,198

Other noncurrent liabilities

  20,341

  19,961

Total liabilities

 1,432,980

 1,387,066

 

 

 

Stockholders' equity:

 

 

Oil States International, Inc. stockholders' equity:

 

 

Common stock

 545

 541

Additional paid-in capital

 522,664

 508,429

Retained earnings

 1,190,210

 1,128,133

Accumulated other comprehensive income

 115,212

 84,549

Treasury stock

  (96,179)

  (93,746)

Total Oil States International, Inc. stockholders' equity

  1,732,452

  1,627,906

Noncontrolling interest

  1,324

  1,027

Total stockholders' equity

  1,733,776

  1,628,933

Total liabilities and stockholders' equity

 $ 3,166,756

 $ 3,015,999





































































































































































































 

 

OIL STATES INTERNATIONAL, INC.

SEGMENT DATA

(in thousands)

(unaudited)

 

 

 

 

Three Months Ended March 31,

 

2011

2010

 

 

 

Revenues 

 

 

Rental tools 

$107,531

$67,502

Drilling services 

 33,105

 30,401

 

 

 

Well site services 

 140,636

 97,903

Accommodations 

 197,099

 145,534

Offshore products 

 128,441

 102,993

Tubular services 

 294,265

 185,915

Total revenues 

$760,441

$532,345

 

 

 

EBITDA (A) 

 

 

Rental tools 

$34,186

$14,891

Drilling services 

 7,249

 5,384

 

 

 

Well site services 

 41,435

 20,275

Accommodations 

 75,242

 57,780

Offshore products 

 20,075

 15,451

Tubular services 

 13,527

 6,611

Corporate and eliminations 

 (10,432)

 (8,615)

Total EBITDA 

$139,847

$91,502

 

 

 

Operating income / (loss) 

 

 

Rental tools 

$24,389

$4,378

Drilling services 

 2,235

 (1,982)

 

 

 

Well site services 

 26,624

 2,396

Accommodations 

 48,973

 47,368

Offshore products 

 16,750

 12,620

Tubular services 

 13,046

 6,215

Corporate and eliminations 

 (10,617)

 (8,794)

Total operating income 

$94,776

$59,805


























































































































































 

 

OIL STATES INTERNATIONAL, INC.

ADDITIONAL QUARTERLY SEGMENT AND OPERATING DATA

(unaudited)

 

 

 

 

Three Months Ended March 31,

 

2011

2010

 

 

 

 

 

 

Supplemental operating data

 

 

Lodge/village revenues ($ in thousands) 

$132,721

$70,322

Other accommodations revenues ($ in thousands) 

 64,378

 75,212

Total accommodations revenues ($ in thousands) 

$197,099

$145,534

 

 

 

Average available lodge/village rooms 

 12,970

 6,279

Lodge/village revenues per available room 

$114

$124

 

 

 

Offshore products backlog ($ in millions) 

$415.5

$220.6

 

 

 

Rental tool job tickets 

 11,079

 9,644

Average revenue per ticket ($ in thousands) 

$9.7

$7.0

 

 

 

Tubular services operating data 

 

 

Shipments (tons in thousands) 

154.4

101.2

Quarter end inventory ($ in thousands) 

$351,654

$311,288

 

 

 

Land drilling operating statistics 

 

 

Average rigs available 

33

35

Utilization 

71.4%

68.1%

Implied day rate ($ in thousands per day) 

$15.3

$13.8

Implied daily cash margin ($ in thousands per day) 

$3.6

$2.5



(A) The term EBITDA consists of net income plus interest, taxes, depreciation and amortization. EBITDA is not a measure of financial performance under generally accepted accounting principles. You should not consider it in isolation from or as a substitute for net income or cash flow measures prepared in accordance with generally accepted accounting principles or as a measure of profitability or liquidity. Additionally, EBITDA may not be comparable to other similarly titled measures of other companies. The Company has included EBITDA as a supplemental disclosure because its management believes that EBITDA provides useful information regarding our ability to service debt and to fund capital expenditures and provides investors a helpful measure for comparing its operating performance with the performance of other companies that have different financing and capital structures or tax rates. The Company uses EBITDA to compare and to monitor the performance of its business segments to other comparable public companies and as a benchmark for the award of incentive compensation under its annual incentive compensation plan. The following table sets forth a reconciliation of EBITDA to net income, which is the most directly comparable measure of financial performance calculated under generally accepted accounting principles:





































































OIL STATES INTERNATIONAL, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION

(in thousands)

(unaudited)

 

 

 

 

Three Months Ended March 31,

 

2011

2010

 

 

 

 Net income / (loss) 

$62,077

$40,243

 Income tax provision 

 23,383

 16,789

 Depreciation and amortization 

 45,151

 31,078

 Interest income 

 (1,013)

 (78)

 Interest expense 

 10,249

 3,470

 EBITDA 

$139,847

$91,502



(B) As of March 31, 2011 and December 31, 2010, the Company's 2 3/8% Contingent Convertible Senior Notes, net of unamortized discount, were classified as a current liability because certain contingent conversion thresholds based on the Company's stock price were met at that date.



(C) As of March 31, 2011, the Company had approximately $323.9 million available under its credit facilities.



CONTACT: Bradley J. Dodson
Oil States International, Inc.
713-652-0582



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