The Company generated
For the nine months ended
BUSINESS SEGMENT RESULTS
(Unless otherwise noted, the following discussion compares the quarterly results from the third quarter of 2006 to the results from the third quarter of 2005.)
Well Site Services
Well Site Services generated improved third quarter results due to the
upturn in North American activity year-over-year and contributions from
For the third quarter of 2006, the accommodations business generated
Offshore Products
During the third quarter of 2006, Offshore Products generated record
quarterly results, reporting
Tubular Services
Tubular Services reported revenues of
'Oil States reported strong results in the third quarter of 2006 due
primarily to continued strength in Well Site Services and substantial growth
in Offshore Products,' stated Douglas E. Swanson, Oil States' Chief Executive
Officer. 'We continued to see higher North American drilling and completion
activity benefiting our Well Site Services and Tubular Services segments. In
addition, our third quarter results continued to demonstrate the importance of
our exposure to deepwater capital spending and Canadian oil sands development,
which benefited our Offshore Products and accommodations businesses. While
there is currently some concern regarding the short term impact on North
American activity due to high natural gas storage levels and reduced natural
gas pricing, we believe the long term fundamentals remain intact. Fourth
quarter activity could see softness in
Oil States International, Inc. is a diversified oilfield services company. With locations around the world, Oil States is a leading manufacturer of products for deepwater production facilities and subsea pipelines, and a leading supplier of a broad range of services to the oil and gas industry, including production-related rental tools, work force accommodations and logistics, oil country tubular goods distribution and land drilling services. Oil States is organized in three business segments - Offshore Products, Tubular Services and Well Site Services, and 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 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 herein are based on 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' section of the Form 10-K for the year ended
Oil States International, Inc.
Unaudited Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2006 2005 2006 2005
Revenues $479,463 $394,140 $1,439,053 $1,084,555
Costs and expenses:
Cost of sales 363,007 308,267 1,094,926 853,631
Selling, general and
administrative expenses 27,414 22,441 79,611 62,165
Depreciation and
amortization expense 13,880 12,253 39,762 33,697
Other operating expense /
(income) (330) (87) 56 (394)
Operating income 75,492 51,266 224,698 135,456
Interest expense (4,797) (3,857) (14,531) (9,313)
Interest income 714 77 1,670 313
Equity in earnings of
unconsolidated affiliates 2,637 473 4,624 806
Sale of workover services
business --- --- 11,250 ---
Other income 1,866 72 2,111 231
Income before income
taxes 75,912 48,031 229,822 127,493
Income tax expense (25,860) (17,723) (81,549) (47,045)
Net income $50,052 $30,308 $148,273 $80,448
Net income per share
Basic $1.01 $0.62 $2.99 $1.63
Diluted $0.99 $0.60 $2.91 $1.59
Weighted average number of
common shares outstanding
Basic 49,736 48,925 49,514 49,436
Diluted 50,475 50,108 50,909 50,442
Oil States International, Inc.
Consolidated Balance Sheets
(in thousands)
Sep. 30, Jun. 30, Dec. 31,
2006 2006 2005
Assets (unaudited) (unaudited) (audited)
Current assets
Cash and cash equivalents $13,198 $14,141 $15,298
Accounts receivable, net 315,266 304,929 274,070
Inventories, net 401,537 378,227 360,926
Prepaid expenses and other
current assets 9,408 13,357 13,450
Total current assets 739,409 710,654 663,744
Property, plant and equipment, net 360,212 328,216 310,452
Goodwill, net 333,699 333,611 339,703
Investments in unconsolidated
affiliates 35,891 33,253 2,265
Other noncurrent assets 58,526 58,199 26,708
Total assets $1,527,737 $1,463,933 $1,342,872
Liabilities and stockholders' equity
Current liabilities
Accounts payable and accrued
liabilities $203,772 $199,363 $214,504
Income taxes 5,072 7,408 7,023
Current portion of long-term
debt 6,861 5,554 3,901
Deferred revenue 48,095 47,173 34,046
Other current liabilities 3,678 3,693 3,223
Total current liabilities 267,478 263,191 262,697
Long-term debt (B) 398,015 390,374 402,109
Deferred income taxes 37,746 36,996 35,259
Other liabilities 20,915 15,701 8,823
Total liabilities 724,154 706,262 708,888
Stockholders' equity
Common stock 511 511 504
Additional paid-in capital 369,988 367,751 350,667
Retained earnings 438,266 388,214 289,993
Accumulated other comprehensive
income 35,459 34,798 23,137
Treasury stock (40,641) (33,603) (30,317)
Total stockholders' equity 803,583 757,671 633,984
Total liabilities and stockholders'
equity $1,527,737 $1,463,933 $1,342,872
Oil States International, Inc.
Segment Data
(in thousands)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2006 2005 2006 2005
Revenues
Accommodations $63,973 $67,173 $243,577 $215,356
Rental Tools 53,320 40,010 149,685 90,296
Drilling and Other (C) 37,126 24,005 97,349 60,599
Workover Services --- 10,349 8,544 29,712
Well Site Services 154,419 141,537 499,155 395,963
Offshore Products 110,038 64,345 281,984 194,695
Tubular Services 215,006 188,258 657,914 493,897
Total Revenues $479,463 $394,140 $1,439,053 $1,084,555
EBITDA (A)
Accommodations $20,339 $12,982 $69,291 $42,356
Rental Tools 23,021 14,601 62,279 32,084
Drilling and Other (C) 18,626 8,778 48,769 20,083
Workover Services (D) --- 2,084 13,828 6,097
Well Site Services 61,986 38,445 194,167 100,620
Offshore Products 19,130 8,342 49,839 23,997
Tubular Services 17,256 20,417 53,026 54,239
Corporate / Other (4,497) (3,140) (14,587) (8,666)
Total EBITDA $93,875 $64,064 $282,445 $170,190
Operating Income / (Loss)
Accommodations $13,802 $9,479 $54,743 $32,803
Rental Tools 18,775 10,861 49,785 22,472
Drilling and Other (C) 14,473 7,282 39,860 15,984
Workover Services --- 1,108 1,922 3,189
Well Site Services 47,050 28,730 146,310 74,448
Offshore Products 16,342 5,885 41,592 16,649
Tubular Services 16,629 19,801 51,470 53,069
Corporate / Other (4,529) (3,150) (14,674) (8,710)
Total Operating Income $75,492 $51,266 $224,698 $135,456
Oil States International, Inc.
Additional Quarterly Segment and Operating Data
(unaudited)
Three Months Ended September 30,
2006 2005
Supplemental Operating Data
Accommodations Operating
Statistics
Average Mandays Served 5,322 7,385
Average Camps Rented
Canadian Side-by-Side Camps 25 17
US Offshore Steel Buildings
(10 foot wide) 160 147
Land Drilling Operating
Statistics
Average Rigs Available 30 26
Utilization 94.3% 91.0%
Implied Day Rate ($ in
thousands per day) $14.3 $10.8
Implied Daily Cash Margin ($ in
thousands per day) $6.7 $4.2
Offshore Products Backlog ($ in
millions) $321.2 $119.4
Tubular Services Operating Data
Shipments (Tons in thousands) 120.0 104.1
Quarter end Inventory ($ in
thousands) $279,851 $241,543
Oil States International, Inc.
Reconciliation of GAAP to Non-GAAP Financial Information
(in thousands)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2006 2005 2006 2005
Net income $50,052 $30,308 $148,273 $80,448
Income tax expense 25,860 17,723 81,549 47,045
Depreciation and amortization 13,880 12,253 39,762 33,697
Interest income (714) (77) (1,670) (313)
Interest expense 4,797 3,857 14,531 9,313
EBITDA $93,875 $64,064 $282,445 $170,190
(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.
(B) As of September 30, 2006, the Company had approximately $90.7
million available under its revolving credit facility.
(C) Includes results for the workover services business, which was sold
to Boots & Coots International Well Control, Inc., subsequent to
March 1, 2006.
(D) Includes the $11.3 million non-cash, pre-tax gain from the sale of
the workover services business to Boots & Coots International Well
Control, Inc.
SOURCE Oil States International, Inc.
