Oil States International (OIS) Q3 2024 earnings summary

Executive summary

• Reported a net loss of $14.3 million for Q3 2024, including $18.2 million in restructuring and impairment charges, with adjusted net income of $2.7 million ($0.04 per share) excluding these charges.

• Offshore Manufactured Products segment achieved revenues of $102.2 million, adjusted segment EBITDA of $23.3 million, and a book-to-bill ratio of 1.1x, with backlog rising to $313 million.

• Revenues declined 10% year-over-year in Q3 2024, mainly due to lower U.S. land-based activity and project delays in the Gulf of Mexico, partially offset by offshore and international strength.

• Strategic exits from U.S. land-based drilling rigs and flowback/well testing services, with segment realignment and cost controls implemented.

• Announced a strategic collaboration with Seadrill to enhance offshore managed pressure drilling operations.

Financial highlights

• Q3 2024 revenues were $174.3 million, down from $194.3 million in Q3 2023; adjusted consolidated EBITDA was $21.5 million, and adjusted net income was $2.7 million.

• Q3 2024 net loss was $14.3 million ($0.23 per share) versus net income of $4.2 million in Q3 2023; included $18.2 million in restructuring and impairment charges.

• Generated $28.8 million in cash flows from operations and reduced net debt by $20.5 million during the quarter; cash and cash equivalents stood at $46.0 million at quarter-end.

• Pre-tax charges included $13 million in intangible and lease asset impairments, $3.5 million in facility consolidation and exit charges, and $1.3 million in patent defense charges.

• Capital expenditures were $4.8 million in Q3 and $23.3 million for the nine months.

Outlook and guidance

• Q4 2024 adjusted EBITDA expected between $20–23 million; free cash flow projected at $20 million, with $25 million in facility sale proceeds anticipated.

• Net debt anticipated to fall below $45 million by year-end 2024, targeting net debt zero during 2025.

• Offshore and international project-driven business outlook remains strong, supported by new technology adoption and robust backlog.

• Margin improvements expected in Completion and Production Services and Downhole Technologies segments due to restructuring and cost controls.

• Management remains focused on cost reduction in low-activity areas and strategic optimization of U.S. business lines.