Company News: Page (1) of 1 - 02/17/11 Email this story to a friend. email article Print this page (Article printing at MyDmn.com).print page facebook

Oil States Announces Fourth Quarter Earnings of $0.94 Per Share Before Transaction Costs

(February 17, 2011)

HOUSTON, Feb. 17, 2011 (GLOBE NEWSWIRE) -- Oil States International, Inc. (NYSE:OIS) reported net income for the quarter ended December 31, 2010 of $44.0 million, or $0.82 per diluted share, compared to $39.9 million, or $0.78 per diluted share, in the fourth quarter of 2009. During the fourth quarter of 2010, the Company completed the $725 million acquisition of The MAC Service Group Limited, a leading provider of remote site accommodations to the Australian natural resources industries, along with two other strategic acquisitions, incurring approximately $6.3 million ($0.11 per diluted share after-tax) of transaction related expenses and $0.9 million ($0.01 per diluted share after-tax) of interest expense prior to closing. Excluding these transaction costs, the Company earned fourth quarter 2010 net income of $50.6 million, or $0.94 per diluted share, and $105.7 million of Adjusted EBITDA on revenues of $696.8 million. EBITDA is defined as net income plus interest, taxes, depreciation and amortization. Adjusted EBITDA excludes goodwill impairments taken in 2009 and transaction costs incurred in the fourth quarter of 2010. (Please refer to the press release footnotes (A) and (D) for a reconciliation of EBITDA and Adjusted EBITDA, respectively.) These results compare to revenues of $528.7 million and EBITDA of $90.1 million in the fourth quarter of 2009.  The year-over-year improvements in revenues and EBITDA were primarily due to stronger North American drilling and completion activity partially offset by lower revenues and EBITDA from the offshore products segment due to lower backlog levels in 2010 compared to 2009. Consolidated operating income in the fourth quarter of 2010 was $67.6 million compared to $58.5 million for the corresponding quarter of 2009. 



"Our well site services businesses generated significantly improved results during the quarter, well in excess of the increase in U.S. drilling rig activity. Year-over-year revenue and EBITDA increased 70% and 134%, respectively, due to our proportionately higher revenue potential on horizontal well completions performed in the most active shale play regions," stated Cindy B. Taylor, Oil States' President and Chief Executive Officer.  "Oil sands activity remained strong given high occupancy levels at our oil sands lodges. Our offshore products business reported lower year-over-year results given its reduced backlog at the beginning of the period; however, order levels were exceptionally strong in the fourth quarter at $208 million, boding well for second half 2011 and 2012 activity for the segment." 



Mrs. Taylor continued, "We were very pleased to complete three strategic acquisitions in the fourth quarter as well as syndicate a new senior credit facility. We completed the MAC acquisition on December 30, 2010, significantly increasing the reach of our accommodations segment. This acquisition allows us to leverage our expertise in providing the full suite of accommodations services in resource areas while providing substantial additional avenues for future growth."


"In addition, we acquired Mountain West in December 2010, which extended our North American accommodations' platform into the increasingly active Bakken shale play. We also completed the Acute Technology Services acquisition for the offshore products segment, enhancing our service offering and project capabilities on deepwater production platform and subsea pipeline projects. Consideration paid for these two transactions totaled $77 million."  




The Company's effective tax rate for the fourth quarter of 2010 increased to 29.0% from 27.9% in the fourth quarter of 2009.  The effective rate in the fourth quarter of 2010 was lower than statutory rates primarily due to lower foreign tax rates. The lower effective tax rate in the fourth quarter of 2009 was primarily attributable to the impact of the goodwill impairment taken in the second quarter of 2009 on the overall effective tax rate for the full year of 2009. The Company spent $61 million in capital expenditures during the fourth quarter of 2010 primarily related to the accommodations segment ($34 million) and rental tools segment ($15 million).  



For the year ended December 31, 2010, the Company reported revenues of $2.4 billion, EBITDA of $379.8 million and net income of $168.0 million, or $3.19 per diluted share. Excluding the transaction costs related to the fourth quarter acquisitions, the Company earned $386.7 million of Adjusted EBITDA and $175.3 million of net income, or $3.33 per diluted share. For the full year 2009, the Company reported revenues of $2.1 billion and EBITDA of $238.2 million which resulted in $59.1 million of net income, or $1.18 per diluted share. Excluding the goodwill impairment charges taken in the second quarter of 2009, the Company reported $332.7 million of Adjusted EBITDA and $140.4 million of net income, or $2.79 per diluted share, during 2009. Capital expenditures for the full year 2010 totaled $182 million.



BUSINESS SEGMENT RESULTS



(Unless otherwise noted, the following discussion compares the quarterly results from the fourth quarter of 2010 to the results from the fourth quarter of 2009.)



Accommodations



Accommodations generated revenues of $142.5 million and EBITDA of $47.6 million for the fourth quarter of 2010 compared to revenues and EBITDA of $140.9 million and $50.7 million, respectively, in the fourth quarter of 2009. The fourth quarter 2009 results included minimum contract guaranteed revenues which generated $7.4 million of EBITDA compared to $4.6 million of contract guarantee EBITDA in the fourth quarter of 2010, resulting in fairly flat accommodations results year-over-year. Revenues and EBITDA generated by the oil sands lodges increased by 28% and 20%, respectively, due to a 22% increase in available rooms and the 4% appreciation in the Canadian dollar relative to the U.S. dollar.  Gross margin as a percent of revenues declined to 39% in the fourth quarter of 2010 compared to 42% in the fourth quarter of 2009 primarily due to lower payments under minimum contract guarantees compared to the prior year. 



Well Site Services



Well site services generated revenues of $139.3 million and EBITDA of $36.8 million in the fourth quarter of 2010 compared to revenues and EBITDA of $81.7 million and $15.7 million, respectively, in the fourth quarter of 2009. The year-over-year revenue and EBITDA growth of 70% and 134%, respectively, was primarily due to the 52% year-over-year improvement in U.S. drilling and completion activity along with higher revenue potential from horizontal completions in the shale plays.



Rental tools generated $104.5 million and $28.1 million of revenues and EBITDA, respectively, in the fourth quarter of 2010 compared to revenues of $57.0 million and EBITDA of $11.7 million in the fourth quarter of 2009.  The 83% year-over-year improvement in revenues and the 140% year-over-year improvement in EBITDA were primarily due to the increased U.S. drilling and completion activity, particularly in the key shale play regions such as the Haynesville, Marcellus, Eagleford and Granite Wash basins, combined with improved product mix and pricing.



Drilling services generated revenues and EBITDA of $34.8 million and $8.6 million, respectively, in the fourth quarter of 2010 compared to $24.7 million of revenues and EBITDA of $4.0 million in the fourth quarter 2009. The year-over-year increase in revenues and EBITDA was due to an overall increase in rig utilization to 71% in the fourth quarter of 2010 from 52% in the fourth quarter of 2009. The positive utilization impact, coupled with higher dayrates, contributed to the 41% and 116% increases in revenues and EBITDA, respectively. EBITDA margins improved from 16% in the fourth quarter of 2009 to 25% in the fourth quarter of 2010, as higher utilization levels allowed for improved daily cash margin year-over-year.



Offshore Products



The offshore products segment generated revenues and EBITDA of $117.6 million and $20.5 million, respectively, in the fourth quarter of 2010 compared to $127.1 million of revenues and $24.5 million in EBITDA in the fourth quarter of 2009. Offshore products revenues and EBITDA declined year-over-year primarily as a result of reduced shipments of subsea pipeline and drilling rig and vessel equipment, given lower beginning backlog levels in 2010 compared to 2009. Gross margin as a percent of revenues declined slightly year-over-year to 27% in the fourth quarter of 2010 compared to 28% in the fourth quarter of 2009, primarily due to lower cost absorption.   Backlog increased 34% sequentially to $353.7 million at December 31, 2010 from $264.4 million at September 30, 2010. Significant awards during the quarter included a major connector order for the Southeast Asian market and orders for equipment related to production platforms in the Gulf of Mexico and Brazil.



Tubular Services



Tubular services generated revenues of $297.4 million and EBITDA of $8.9 million during the fourth quarter of 2010 compared to revenues of $179.0 million and EBITDA of $6.9 million in the fourth quarter of 2009. Tubular services' OCTG shipments were up 68% year-over-year with 148,400 tons shipped in the fourth quarter of 2010 compared to 88,500 tons shipped in the fourth quarter of 2009, exceeding the 52% year-over-year increase U.S. drilling activity. Gross margin as a percent of revenues was 4% in the fourth quarter of 2010 compared to 5% in the fourth quarter of 2009. The lower gross margin in the fourth quarter of 2010 was primarily due to a larger portion of service related costs expensed on certain program work.   The Company's OCTG inventory decreased from the third quarter of 2010 by 2% to $333 million at December 31, 2010 due to strong fourth quarter shipments. 



In conjunction with closing three strategic acquisitions, Oil States entered into a five year, senior credit facilities totaling $1.05 billion. The credit agreement provides revolving credit facilities in both the U.S. and Canada aggregating $750 million as well as funded term debt in both the U.S. and Canada totaling $300 million.  In connection with the MAC acquisition, the Company assumed an Australian credit facility with total borrowing capacity of A$75 million (US$75.9 million). At December 31, 2010, the Company had a total of $735.5 million drawn on these facilities leaving $368.3 million available to be drawn. 



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 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 herein are 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 Factor" sections of the Form 10-K for the year ended December 31, 2009 filed by Oil States with the SEC on February 22, 2010 and the "Risk Factor" section of the Form 10-Q for the three months ended September 30, 2010 filed by Oil States with the SEC on November 5, 2010. In addition, the previously announced acquisition of The MAC Services Group Limited includes additional risks and uncertainties including, among other things, the risk that the businesses will not be integrated successfully, the risk that any synergies or other benefits from the combination may not be fully realized or may take longer to realize than expected, and disruption from the acquisition making it more difficult to maintain relationships with customers, employees or suppliers.









































































































































































































































Oil States International, Inc.

Unaudited Condensed Consolidated Statements of Income

(in thousands, except per share amounts)

(unaudited)

 

 

 

 

 

 

Three Months Ended December 31,

Twelve Months Ended December 31,

 

2010

2009

2010

2009

 

 

 

 

 

Revenues 

$696,759

$528,715

$2,411,984

$2,108,250

Costs and expenses: 

 

 

 

 

Cost of sales and services 

 549,699

 404,451

 1,874,294

 1,640,198

Selling, general and administrative expenses 

 41,386

 36,916

 150,865

 139,293

Depreciation and amortization expense 

 32,114

 31,246

 124,202

 118,108

Acquisition expenses 

 6,259

 -- 

 6,959

 -- 

Impairment of goodwill 

 -- 

 -- 

 -- 

 94,528

Other operating expense /(income) 

 (333)

 (2,424)

 82

 (2,606)

Operating income 

 67,634

 58,526

 255,582

 118,729

 

 

 

 

 

Interest expense 

 (5,769)

 (3,551)

 (16,274)

 (15,266)

Interest income 

 436

 30

 751

 380

Equity in earnings of unconsolidated affiliates 

 95

 268

 239

 1,452

Other income / (expense) 

 (258)

 220

 330

 414

Income before income taxes 

 62,138

 55,493

 240,628

 105,709

Income tax (expense)/benefit 

 (18,035)

 (15,460)

 (72,023)

 (46,097)

Net income 

 44,103

 40,033

 168,605

 59,612

Less: Net income attributable to noncontrolling interest 

 151

 140

 587

 498

Net income attributable to Oil States International, Inc. 

$43,952

$39,893

$168,018

$59,114

 

 

 

 

 

Net income per share 

 

 

 

 

Basic 

$0.87

$0.80

$3.34

$1.19

Diluted 

$0.82

$0.78

$3.19

$1.18

 

 

 

 

 

Weighted average number of common shares outstanding 

 

 

 

 

Basic 

 50,626

 49,751

 50,238

 49,625

Diluted 

 53,888

 51,218

 52,700

 50,219





















































































































































































































































































 

Oil States International, Inc.

Consolidated Balance Sheets

(in thousands)

 

 

December 31,

September 30,

December 31,

 

2010

2010

2009

Assets 

 

(unaudited)

Current assets 

 

 

 

Cash and cash equivalents 

$96,350

$138,380

$89,742

Accounts receivable, net 

 478,739

 377,644

 385,816

Inventories, net 

 501,435

 504,773

 423,077

Prepaid expenses and other current assets 

 23,480

 27,944

 26,933

Total current assets 

 1,100,004

 1,048,741

 925,568

Property, plant and equipment, net 

 1,252,657

 784,315

 749,601

Goodwill, net 

 475,222

 219,321

 218,740

Intangible assets, net 

139,421

17,868

19,681

Investments in unconsolidated affiliates 

 5,937

 5,617

 5,164

Other non-current assets 

 42,758

 13,047

 13,632

 

 

 

 

Total assets 

$3,015,999

$2,088,909

$1,932,386

 

 

 

 

 

 

 

 

Liabilities and stockholders' equity 

 

 

 

Current liabilities 

 

 

 

Accounts payable and accrued liabilities 

$304,739

$237,682

$208,541

Income taxes 

 4,604

 3,365

 14,419

Current portion of long-term debt (B) 

 181,175

 161,716

 464

Deferred revenue 

 60,847

 60,296

 87,412

Other current liabilities 

 2,810

 2,701

 4,387

Total current liabilities 

 554,175

 465,760

 315,223

Long-term debt (C) 

 731,732

 7,904

 164,074

Deferred income taxes 

 81,198

 61,942

 55,332

Other noncurrent liabilities 

 19,961

 14,728

 15,691

Total liabilities 

 1,387,066

 550,334

 550,320

 

 

 

 

Stockholders' equity 

 

 

 

Common stock 

 541

 538

 531

Additional paid-in capital 

 508,429

 494,401

 468,428

Retained earnings 

 1,128,133

 1,084,181

 960,115

Accumulated other comprehensive income 

 84,549

 52,353

 44,115

Treasury stock 

 (93,746)

 (93,746)

 (92,341)

Total stockholders' equity 

 1,627,906

 1,537,727

 1,380,848

 

 

 

 

Noncontrolling interest 

 1,027

 848

 1,218

Total equity 

 1,628,933

 1,538,575

 1,382,066

 

 

 

 

Total liabilities and equity 

$3,015,999

$2,088,909

$1,932,386










































































































































































































































































































 

Oil States International, Inc.

Segment Data

(in thousands)

(unaudited)

 

 

 

 

 

 

Three Months Ended December 31,

Twelve Months Ended December 31,

 

2010

2009

2010

2009

 

 

 

 

 

Revenues 

 

 

 

 

Rental tools 

$104,476

$57,046

$342,953

$234,121

Drilling and other 

 34,807

 24,651

 133,214

 71,175

 

 

 

 

 

Well site services 

 139,283

 81,697

 476,167

 305,296

Accommodations 

 142,481

 140,871

 537,690

 481,402

Offshore products 

 117,588

 127,118

 428,963

 509,388

Tubular services 

 297,407

 179,029

 969,164

 812,164

Total revenues 

$696,759

$528,715

$2,411,984

$2,108,250

 

 

 

 

 

Adjusted EBITDA (A) (D) 

 

 

 

 

Rental tools (D) 

$28,121

$11,693

$88,097

$37,477

Drilling and other 

 8,641

 3,990

 25,464

 10,066

 

 

 

 

 

Well site services (D) 

 36,762

 15,683

 113,561

 47,543

Accommodations 

 47,590

 50,725

 196,022

 178,559

Offshore products 

 20,484

 24,528

 72,120

 92,029

Tubular services 

 8,925

 6,944

 37,701

 44,578

Corporate and eliminations 

 (14,327)

 (7,760)

 (39,638)

 (29,976)

 

 99,434

 90,120

 379,766

 332,733

Transaction Costs 

 6,259

 -- 

 6,959

 -- 

Total Adjusted EBITDA (D) 

$105,693

$90,120

$386,725

$332,733

 

 

 

 

 

Adjusted operating income / (loss) (D) 

 

 

 

 

Rental tools (D) 

$18,108

$1,154

$47,326

($3,316)

Drilling and other 

 3,141

 (2,842)

 576

 (16,345)

 

 

 

 

 

Well site services (D) 

 21,249

 (1,688)

 47,902

 (19,661)

Accommodations 

 35,069

 40,077

 151,417

 140,665

Offshore products 

 17,386

 21,763

 60,664

 81,049

Tubular services 

 8,427

 6,300

 35,941

 41,758

Corporate and eliminations 

 (14,497)

 (7,926)

 (40,342)

 (30,554)

 

 67,634

 58,526

 255,582

 213,257

Transaction Costs 

 6,259

 -- 

 6,959

 -- 

Total adjusted operating income (D) 

$73,893

$58,526

$262,541

$213,257

 

 

 

 

 















































































































 

Oil States International, Inc.

Additional Quarterly Segment and Operating Data

(unaudited)

 

 

 

 

Three Months Ended December 31,

 

2010

2009

 

 

 

Supplemental operating data 

 

 

 

 

 

Offshore products backlog ($ in millions) 

$353.7

$206.3

 

 

 

Tubular services operating data 

 

 

Shipments (tons in thousands) 

148.4

88.5

Quarter end inventory ($ in thousands) 

$332,720

$265,718

 

 

 

Land drilling operating statistics 

 

 

Average rigs available 

36

37

Utilization 

71.4%

52.5%

Implied day rate ($ in thousands per day) 

$14.7

$13.8

Implied daily cash margin ($ in thousands per day) 

$4.0

$2.7

 

 

 

(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 December 31,

Twelve Months Ended December 31,

 

2010

2009

2010

2009

 

 

 

 

 

 Net income / (loss) 

$43,952

$39,893

$168,018

$59,114

 Income tax provision 

 18,035

 15,460

 72,023

 46,097

 Depreciation and amortization 

 32,114

 31,246

 124,202

 118,108

 Interest income 

 (436)

 (30)

 (751)

 (380)

 Interest expense 

 5,769

 3,551

 16,274

 15,266

 EBITDA 

$99,434

$90,120

$379,766

$238,205

 

 

 

 

 

(B) As of 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 December 31, 2010, the Company had approximately $317.7 million available under its new senior credit facilities which have lending capacity totaling $1.05 billion. In addition, the Company had approximately $50.6 million available on its Australian credit facility.

 

 

 

 

(D) The rental tools, well site services and consolidated EBITDA and operating income for twelve months ended December 31, 2009 exclude $94.5 million goodwill impairment charge taken in the second quarter of 2009.  The corporate and consolidated EBITDA and operating income for the three and twelve months ended December 31, 2010 exclude $6.3 million and $7.0 million of transaction costs, respectively, related to the strategic transactions completed in the fourth quarter of 2010.

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31,

Twelve Months Ended December 31,

 

 

2010

2009

2010

2009

 EBITDA 

$99,434

$90,120

$379,766

$238,205

 Acquisition expenses 

 6,259

 -- 

 6,959

 -- 

 Goodwill impairment 

 -- 

 -- 

 -- 

 94,528

 Adjusted EBITDA 

$105,693

$90,120

$386,725

$332,733

 

 

 

 

 

 

 

 

 

 

 Operating income / (loss) 

$67,634

$58,526

$255,582

$118,729

 Acquisition expenses 

 6,259

 -- 

 6,959

 -- 

 Goodwill impairment 

 -- 

 -- 

 -- 

 94,528

 Adjusted Operating Income 

$73,893

$58,526

$262,541

$213,257

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



company logo


Page: 1


Related Keywords: EARNINGS, ENERGYMac, OS9, OSX, Canada, USA, Brazil, Inc., Financial, Discount, Business, mexico, Other,

HOT THREADS on DMN Forums
Content-type: text/html  Rss  Add to Google Reader or
Homepage    Add to My AOL  Add to Excite MIX  Subscribe in
NewsGator Online 
Real-Time - what users are saying - Right Now!

Our Privacy Policy --- @ Copyright, 2015 Digital Media Online, All Rights Reserved