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 strong results, with Q3 revenues of $102.2 million, adjusted segment EBITDA of $23.3 million, and a book-to-bill ratio of 1.1x; 65% of consolidated revenue came from offshore/international markets.

• 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.

• Continued strategic streamlining of U.S. operations, including the sale of remaining drilling rigs, exit from underperforming locations and business lines, and segment realignment.

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

Financial highlights

• Q3 2024 consolidated revenues were $174.3 million, adjusted consolidated EBITDA was $21.5 million, and adjusted net income was $2.7 million ($0.04 per share).

• Offshore Manufactured Products segment: $102.2 million revenue, $23.3 million adjusted segment EBITDA, 23% EBITDA margin.

• Completion and Production Services segment: $40.1 million revenue, $5.4 million adjusted segment EBITDA, 13% EBITDA margin (excluding charges).

• Downhole Technology segment: $32.0 million revenue, $1.1 million adjusted segment EBITDA.

• Generated $28.8 million in cash flows from operations and reduced net debt by $20.5 million in Q3; cash and cash equivalents stood at $46.0 million at quarter-end.

Outlook and guidance

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

• Net debt anticipated to fall below $45 million by year-end 2024, with a target of net debt zero in 2025.

• Offshore and international markets expected to drive sustained growth, with backlog conversion of about 75% over the next 12 months; Offshore Manufactured Products backlog increased to $313 million.

• Completion and Production Services EBITDA margins projected in the mid-teens for 2024, rising to 23–25% in 2025; Downhole Technologies margins expected to reach low double digits in 2025.

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