The Company generated
The Company also benefited from a reduced effective tax rate during the
second quarter of 2006 due to statutory rate changes, primarily in
For the first half of 2006, the Company reported net income of
BUSINESS SEGMENT RESULTS
Well Site Services
Well Site Services generated strong second quarter results due to year-
over-year improvements in North American land activity and contributions from
capital investments and acquisitions made over the past year, partially offset
by the sale of the hydraulic workover business completed in the first quarter
of 2006. For the second quarter of 2006, Well Site Services generated
revenues of
The accommodations business generated
Offshore Products
During the second quarter of 2006, Offshore Products generated record
quarterly results, reporting
Tubular Services
Tubular Services reported revenues of
'With strengthening deepwater construction activity, expanding capacity in
the oil sands region and improved North American activity, Oil States had a
very strong second quarter,' stated Douglas E. Swanson, Oil States' Chief
Executive Officer. 'While we clearly benefited from continued strength in
U.S. land drilling and completion activity, much of the upside in the second
quarter was driven by activity in two secular, oil-focused growth markets:
deepwater infrastructure spending and Canadian oil sands development.
Deepwater infrastructure spending drove improved results in our Offshore
Products business with record financial results and record quarter end
backlog. For a public oilfield service company, we have unique exposure to
the oil sands activity through our accommodations business. This market has
been a major focus for our strategic growth and our 2006 capital expenditure
plan. Looking forward, our current expectation for third quarter 2006
earnings is in a range of
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 Six Months Ended
June 30, June 30,
2006 2005 2006 2005
Revenues $463,359 $358,469 $959,590 $690,415
Costs and expenses:
Cost of sales 353,686 284,711 731,919 545,364
Selling, general and
administrative expenses 26,753 20,660 52,197 39,725
Depreciation and amortization
expense 12,995 11,215 25,881 21,443
Other operating expense /
(income) (78) (93) 387 (307)
Operating income 70,003 41,976 149,206 84,190
Interest expense (4,938) (3,144) (9,734) (5,457)
Interest income 683 106 956 236
Equity in earnings of
unconsolidated affiliates 1,303 189 1,987 334
Sale of workover services
business (244) --- 11,250 ---
Other income / (loss) (1) 257 245 158
Income before income taxes 66,806 39,384 153,910 79,461
Income tax expense (21,501) (14,533) (55,689) (29,321)
Net income $45,305 $24,851 $98,221 $50,140
Net income per share
Basic $0.91 $0.50 $1.99 $1.01
Diluted $0.88 $0.49 $1.92 $0.99
Weighted average number of common
shares outstanding
Basic 49,598 49,651 49,403 49,644
Diluted 51,230 50,593 51,126 50,561
Oil States International, Inc.
Consolidated Balance Sheets
(in thousands)
Jun. 30, Mar. 31, Dec. 31,
2006 2006 2005
Assets (unaudited) (unaudited) (audited)
Current assets
Cash and cash equivalents $14,141 $11,999 $15,298
Accounts receivable, net 304,929 302,296 274,070
Inventories, net 378,227 368,687 360,926
Prepaid expenses and other
current assets 13,357 14,074 13,450
Total current assets 710,654 697,056 663,744
Property, plant and equipment, net 328,216 305,866 310,452
Goodwill, net 333,611 330,431 339,703
Investments in unconsolidated
affiliates 33,253 31,730 2,265
Other non-current assets 58,199 47,138 26,708
Total assets $1,463,933 $1,412,221 $1,342,872
Liabilities and stockholders'
equity
Current liabilities
Accounts payable and accrued
liabilities $199,363 $197,129 $214,504
Income taxes 7,408 27,482 7,023
Current portion of long-term debt 5,554 3,566 3,901
Deferred revenue 47,173 33,243 34,046
Other current liabilities 3,693 3,814 3,223
Total current liabilities 263,191 265,234 262,697
Long-term debt (B) 390,374 406,007 402,109
Deferred income taxes 36,996 38,936 35,259
Other liabilities 15,701 8,392 8,823
Total liabilities 706,262 718,569 708,888
Stockholders' equity
Common stock 511 507 504
Additional paid-in capital 367,751 357,581 350,667
Retained earnings 388,214 342,909 289,993
Accumulated other comprehensive
income 34,798 23,202 23,137
Treasury stock (33,603) (30,547) (30,317)
Total stockholders' equity 757,671 693,652 633,984
Total liabilities and stockholders'
equity $1,463,933 $1,412,221 $1,342,872
Oil States International, Inc.
Segment Data
(in thousands)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2006 2005 2006 2005
Revenues
Accommodations $75,015 $64,990 $179,604 $148,183
Rental Tools 46,777 31,229 96,365 50,286
Drilling Services 32,205 19,739 60,223 36,594
Workover Services (C) --- 10,872 8,544 19,363
Well Site Services 153,997 126,830 344,736 254,426
Offshore Products 93,675 63,859 171,946 130,350
Tubular Services 215,687 167,780 442,908 305,639
Total Revenues $463,359 $358,469 $959,590 $690,415
EBITDA (A)
Accommodations $19,745 $9,536 $48,951 $29,374
Rental Tools 18,399 11,594 39,258 17,483
Drilling Services 15,354 5,931 28,767 11,305
Workover Services (C) (D) 784 2,992 15,202 4,014
Well Site Services 54,282 30,053 132,178 62,176
Offshore Products 17,915 7,912 30,709 15,655
Tubular Services 17,472 18,421 35,770 33,822
Corporate / Other (5,613) (2,749) (10,088) (5,528)
Total EBITDA $84,056 $53,637 $188,569 $106,125
Operating Income / (Loss)
Accommodations $15,581 $6,232 $40,940 $23,324
Rental Tools 14,193 8,349 31,010 11,611
Drilling Services 13,517 4,528 25,298 8,701
Workover Services (C) 147 2,007 2,011 2,082
Well Site Services 43,438 21,116 99,259 45,718
Offshore Products 15,186 5,496 25,251 10,764
Tubular Services 17,023 18,123 34,842 33,268
Corporate / Other (5,644) (2,759) (10,146) (5,560)
Total Operating Income $70,003 $41,976 $149,206 $84,190
Oil States International, Inc.
Additional Quarterly Segment and Operating Data
(unaudited)
Three Months Ended June 30,
2006 2005
Supplemental Operating Data
Accommodations Operating Statistics
Average Mandays Served 5,059 6,048
Average Camps Rented
Canadian Side-by-Side Camps 20 8
US Offshore Steel Buildings
(10 foot wide) 168 126
Land Drilling Operating Statistics
Average Rigs Available 28 25
Utilization 91.5% 82.8%
Implied Day Rate ($ in thousands per day) $13.8 $10.4
Implied Daily Cash Margin ($ in
thousands per day) $6.9 $3.4
Offshore Products Backlog ($ in millions) $280.6 $113.5
Tubular Services Operating Data
Shipments (Tons in thousands) 116.8 100.6
Quarter end Inventory ($ in
thousands) $269,803 $189,724
Oil States International, Inc.
Reconciliation of GAAP to Non-GAAP Financial Information
(in thousands)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2006 2005 2006 2005
Net income $45,305 $24,851 $98,221 $50,140
Income tax expense 21,501 14,533 55,689 29,321
Depreciation and amortization 12,995 11,215 25,881 21,443
Interest income (683) (106) (956) (236)
Interest expense 4,938 3,144 9,734 5,457
EBITDA $84,056 $53,637 $188,569 $106,125
(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 June 30, 2006, the Company had approximately $99.3 million
available under its revolving credit facility.
(C) Reflects two months' results for the workover services business,
which was sold to Boots & Coots International Well Control, Inc.
effective on 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.
