-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, K9tjE7fFkTLdGCuTeXHtT2jylhn0baMw9RRxhZ8Z4ZIcOuiktgBxcJbJxXSdUFyY ZtmjOpFZzmjaaaUt8XfYyw== 0001275287-06-004073.txt : 20060803 0001275287-06-004073.hdr.sgml : 20060803 20060802185428 ACCESSION NUMBER: 0001275287-06-004073 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20060802 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060803 DATE AS OF CHANGE: 20060802 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OIL STATES INTERNATIONAL, INC CENTRAL INDEX KEY: 0001121484 STANDARD INDUSTRIAL CLASSIFICATION: OIL & GAS FILED MACHINERY & EQUIPMENT [3533] IRS NUMBER: 760476605 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-16337 FILM NUMBER: 06999410 BUSINESS ADDRESS: STREET 1: THREE ALLEN CENTER STREET 2: 333 CLAY STREET, SUITE 4620 CITY: HOUSTON STATE: TX ZIP: 77002 BUSINESS PHONE: 713-652-0582 MAIL ADDRESS: STREET 1: THREE ALLEN CENTER STREET 2: 333 CLAY STREET, SUITE 4620 CITY: HOUSTON STATE: TX ZIP: 77002 FORMER COMPANY: FORMER CONFORMED NAME: OIL STATES INTERNATIONAL INC DATE OF NAME CHANGE: 20000808 8-K 1 os6677.txt FORM 8-K ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): August 2, 2006 ---------- OIL STATES INTERNATIONAL, INC. (Exact name of registrant as specified in its charter) Delaware 1-16337 76-0476605 (State or other jurisdiction (Commission (I.R.S. Employer of incorporation or organization) File Number) Identification No.) Three Allen Center 333 Clay Street, Suite 4620 Houston, Texas 77002 (Address and zip code of principal executive offices) Registrant's telephone number, including area code: (713) 652-0582 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ================================================================================ ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION. On August 2, 2006, Oil States International, Inc. (the "Company") issued a press release announcing its financial condition and results of operations for the three-month and six-month periods ended June 30, 2006. A copy of the press release is furnished herewith as Exhibit 99.1 and is incorporated herein by reference. ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS. (d) Exhibits (furnished pursuant to Item 2.02 and not deemed filed with the Commission). Exhibit Number Description of Document - --------- ------------------------------------------------------------------- 99.1 Press Release dated August 2, 2006 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: August 2, 2006 OIL STATES INTERNATIONAL, INC. By: /s/ Bradley J. Dodson ------------------------------- Name: Bradley J. Dodson Title: Vice President, Chief Financial Officer and Treasurer INDEX TO EXHIBITS Exhibit Number Description of Document - --------- ------------------------------------------------------------------- 99.1 Press Release dated August 2, 2006 EX-99.1 2 os6677ex991.txt EXHIBIT 99.1 Exhibit 99.1 OIL STATES ANNOUNCES SECOND QUARTER EARNINGS OF $0.88 PER SHARE HOUSTON, Aug. 2 /PRNewswire-FirstCall/ -- Oil States International, Inc. (NYSE: OIS) today reported net income for the quarter ended June 30, 2006 of $45.3 million, or $0.88 per diluted share. These results compare to $24.9 million, or $0.49 per diluted share, reported in the second quarter of 2005. With continuing strong activity and contributions from recent capital investments and acquisitions, Oil States recognized year-over-year growth in revenues and EBITDA (defined as net income plus interest, taxes, depreciation and amortization) in the second quarter of 2006 of 29% and 57%, respectively.(A) The Company generated $463.4 million of revenues and $84.1 million of EBITDA in the second quarter of 2006 compared to $358.5 million and $53.6 million, respectively, in the second quarter of 2005. Year-over-year improvements in Well Site Services and Offshore Products contributed to strong second quarter results. Well Site Services reported significantly higher revenues and EBITDA due to high levels of North American drilling activity, capital investments made in the past year and contributions from the Stinger acquisition completed in May 2005. Offshore Products also generated significantly improved revenues and EBITDA due to the acceleration in deepwater development spending by its customers. In addition, the outlook for Offshore Products continued to strengthen as backlog increased 27% during the quarter to $280.6 million. Tubular Services reported a year-over-year improvement in revenues due to increased U.S. drilling activity and the benefit of the Phillips acquisition completed in June 2005. EBITDA for Tubular Services was slightly lower than the prior year as a result of lower margins and product mix. The Company also benefited from a reduced effective tax rate during the second quarter of 2006 due to statutory rate changes, primarily in Canada. These rate changes benefited second quarter earnings by $2.3 million, or $0.05 per diluted share. As a result, the Company recognized an effective tax rate of 32.2% in the quarter compared to 36.9% in the second quarter of last year. The Company currently expects the effective tax rate to approximate 36% for the remainder of 2006. For the first half of 2006, the Company reported net income of $98.2 million, or $1.92 per diluted share, on revenues of $959.6 million and EBITDA of $188.6 million. For the first half of 2005, the Company reported net income of $50.1 million, or $0.99 per diluted share, on revenues of $690.4 million and EBITDA of $106.1 million. This performance represents year-over-year revenue and EBITDA increases of 39% and 78%, respectively. As a result, operating income increased 77% to $149.2 million in the first half of 2006 from $84.2 million in the first half of 2005. Net income in the first half of 2006 included the recognition of a non-cash, pre-tax gain of $11.3 million, or an after-tax gain of $0.12 per diluted share, on the sale of the Company's workover services business to Boots & Coots International Well Control, Inc. (Amex: WEL). 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 $154.0 million and EBITDA of $54.3 million compared to $126.8 million and $30.1 million, respectively, in the second quarter of 2005. The 21% year-over-year increase in revenues and 81% increase in EBITDA at Well Site Services resulted from several factors including the acquisition of Stinger completed in May 2005, stronger accommodations activity in Canada, improving U.S. drilling and completion activity, benefits of recent capital expenditures primarily in the drilling services, rental tools and accommodations businesses and improved pricing in several product lines, the most significant of which was in drilling services. These results were partially offset by the conversion of the Company's investment in its workover services business (which accounted for $10.9 million in revenues and $3.0 million in EBITDA in the second quarter of 2005) to equity accounting with the sale of the business to Boots & Coots in March 2006. The accommodations business generated $75.0 million of revenues and $19.7 million of EBITDA compared to $65.0 million and $9.5 million, respectively, in the second quarter of 2005. The accommodations business benefited from improving activity in the oil sands region of northern Canada, a 12% strengthening of the Canadian dollar against the U.S. dollar and the realization of increased revenues from standby fees and guarantees of $3.8 million, or $0.05 per diluted share, in its Canadian accommodations business. These improvements were partially offset by lower international facility management activity due to contract completion and the completion of a major expansion project by an oil sands customer. Drilling services reported revenues and EBITDA of $32.2 million and $15.4 million, respectively, in the second quarter of 2006 compared to $19.7 million of revenues and $5.9 million of EBITDA in the second quarter 2005 due to improved utilization and pricing, more advantageous contract terms and rig fleet expansion (added three new rigs since June 15, 2005). During the second quarter, rental tools generated $46.8 million of revenues and $18.4 million of EBITDA compared to $31.2 million of revenues and $11.6 million of EBITDA during the second quarter of 2005. This year-over-year growth was due to the Stinger acquisition, improved pricing and increased North American drilling and completion activity. Offshore Products During the second quarter of 2006, Offshore Products generated record quarterly results, reporting $93.7 million of revenues and $17.9 million in EBITDA compared to $63.9 million and $7.9 million, respectively, in the second quarter of 2005. Gross margin percentage for the second quarter increased to 27% from 22% in the second quarter of 2005 primarily due to increased activity and fixed cost absorption in the majority of the Company's manufacturing locations, increased contributions from the connector products and rig equipment businesses and improved activity and margins in the subsea pipeline business. Backlog continued to increase, totaling a new record of $280.6 million at June 30, 2006 compared to $220.8 million at March 31, 2006 and $110.7 million as of December 31, 2005. Tubular Services Tubular Services reported revenues of $215.7 million and EBITDA of $17.5 million for the second quarter of 2006 compared to $167.8 million and $18.4 million, respectively, in the second quarter of 2005. Tubular Services' OCTG shipments increased 16% to 116,800 tons from 100,600 tons in the second quarter of 2005. Gross margins in the second quarter of 2006 declined to 9.3% from 12.7% in the second quarter of 2005 because of static OCTG mill pricing and a higher percentage of carbon OCTG sales. The segment continued to see reduced demand for higher margin seamless alloy tubulars while strong land based drilling activity increased our lower margin carbon grade sales. The Company's OCTG inventory as of June 30, 2006 was $269.8 million compared to $265.8 million as of March 31, 2006 and $274.2 million as of December 31, 2005. As of June 30, 2006, approximately 65% of Oil States' OCTG inventory was committed to customer orders. "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 $0.82 to $0.87 per diluted share." 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 December 31, 2005 filed by Oil States with the SEC on March 2, 2006. 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 -------------- -------------- -------------- (unaudited) (unaudited) (audited) Assets 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. -0- 08/02/2006 /CONTACT: Bradley Dodson of Oil States International, Inc., +1-713-652-0582/ /Web site: http://www.oilstatesintl.com / -----END PRIVACY-ENHANCED MESSAGE-----