Oil States International (OIS) Sidoti Micro-Cap Virtual Conference summary

Strategic transformation and business focus

• Shifted from a 50/50 U.S. land vs. international/offshore revenue mix to 75% international and offshore, emphasizing higher-margin, longer-duration projects and manufacturing-led operations.

• Exited underperforming U.S. land businesses, reallocating capital to more profitable segments and improving overall margins to around 30% in Completion and Production Services.

• Offshore Manufactured Products now contribute about two-thirds of revenue and 70% of EBITDA, with a focus on deepwater and naval applications.

• Downhole Technologies segment revamped its product portfolio, introducing new perforating systems and addressing supply chain challenges.

• Strong free cash flow generation and a net cash position after paying off convertible senior notes, providing flexibility for share repurchases and M&A.

Financial performance and outlook

• Trades at a significant discount to peers, with a 2026 EBITDA multiple of 6.5x versus the peer average of 13x.

• Free cash flow yield estimated at 7%, well above the peer group’s sub-3% average.

• Q1 results were impacted by Middle East conflict and a customer project deferral, resulting in missed revenue and EBITDA targets.

• Backlog remains strong, with a one-time or better book-to-bill ratio expected for the full year and about 50% of backlog now military products.

• No change to full-year guidance despite recent disruptions; improved visibility expected by the next quarterly update.

Market trends and growth opportunities

• Offshore and international markets expected to see robust growth through 2027, driven by energy security concerns and increased deepwater spending in regions like Brazil, Guyana, West Africa, and the North Sea.

• Military products, primarily naval applications, are a growing part of the business, leveraging elastomer technology for acoustic damping and shock mounts.

• Technology innovation is central, with new managed pressure drilling systems, low-impact workover packages, and subsea mineral harvesting solutions gaining traction.

• Floating offshore wind platform development is underway, with sea trials pending.

• M&A strategy targets technology-driven tuck-in acquisitions, especially in adjacencies identified by business unit leaders.