Oil States International, Inc. (NYSE:OIS) is a diversified oilfield services company that provides a broad range of manufactured products and services to customers in the energy, industrial, and military sectors. The company operates through three reportable segments: Offshore Manufactured Products, Well Site Services, and Downhole Technologies.

Financials

In the fiscal year 2023, Oil States International reported annual revenue of $782.3 million and net income of $12.9 million. The company generated annual operating cash flow of $56.6 million and free cash flow of $25.9 million. These financial results demonstrate the company's ability to navigate the challenges faced by the industry and maintain a solid financial position.

Business Overview

Offshore Manufactured Products

The Offshore Manufactured Products segment is a technology-driven provider of highly-engineered products and services for offshore oil and natural gas production systems and facilities globally, as well as certain products and services to the offshore drilling and completion markets. This segment also produces a variety of products for use in industrial, military, and other applications outside the traditional energy industry. In the first quarter of 2024, the Offshore Manufactured Products segment generated revenues of $86.9 million and operating income of $10.6 million.

Well Site Services

The Well Site Services segment provides completion services and, to a lesser extent, land drilling services, in the United States (including the Gulf of Mexico) and internationally. In the first quarter of 2024, the Well Site Services segment generated revenues of $47.3 million and an operating loss of $0.4 million.

Downhole Technologies

The Downhole Technologies segment provides oil and gas perforation systems, downhole tools, and services in support of completion, intervention, wireline, and well abandonment operations. In the first quarter of 2024, the Downhole Technologies segment generated revenues of $33.1 million and an operating loss of $12.1 million, which included a non-cash goodwill impairment charge of $10.0 million.

Recent Developments

During the first quarter of 2024, the company recognized facility consolidation and other charges of $2.5 million, primarily related to the Offshore Manufactured Products and Well Site Services segments. Additionally, the Downhole Technologies segment recorded a non-cash goodwill impairment charge of $10.0 million in connection with the segment realignment.

Geographically, in the first quarter of 2024, the United States and the United Kingdom represented 65% and 15% of the company's total accounts receivable, respectively. No other country or single customer accounted for more than 10% of the company's total accounts receivable.

Liquidity

The company's liquidity position remains strong, with no borrowings outstanding under its $125.0 million asset-based revolving credit facility as of March 31, 2024. The total amount available to be drawn under the facility was $86.3 million, and the company had $24.1 million in cash and cash equivalents, resulting in available liquidity of $110.4 million.

In February 2024, the company amended its revolving credit facility to extend the maturity date to February 16, 2028, with a springing maturity 91 days prior to the maturity of any outstanding indebtedness with a principal amount in excess of $17.5 million. This extension provides the company with additional financial flexibility to support its operations and strategic initiatives.

Outlook

Looking ahead, the company expects to generate EBITDA ranging from $85 million to $90 million during 2024, which represents an approximate 5% reduction from the midpoint of its prior guidance range. The company also expects to generate $40 million in free cash flow during 2024, implying a free cash flow yield of 10% or greater.

The company remains focused on optimizing its operations and pursuing profitable activity in support of its global customer base. As market opportunities unfold in both the U.S. and international/offshore markets, the company will continue to focus on its core areas of expertise, leveraging its recently enhanced equipment and technologies to further differentiate its product and service offerings.

Oil States International's core competencies are well-entrenched in the markets it serves, and the company continues to bid on potential opportunities supporting its traditional subsea, floating and fixed production systems, drilling, and military customers, while also bidding to support multiple new customers and projects involved in developments such as deep sea minerals gathering, fixed and floating offshore wind, carbon capture and storage, geothermal applications, and other renewable and clean tech energy opportunities.

These new energy transition opportunities create strong potential for the company to expand its product and service offerings and revenue base over the longer term. Oil States International will continue to conduct safe operations and remain focused on providing technology leadership in its various product and service offerings, delivering value-added solutions to meet customer demands globally.