Oil States International, Inc. (OIS) Bundle
A Brief History of Oil States International, Inc.
Oil States International, Inc. (OIS) has undergone significant transformations and faced various challenges in the oil and gas sector. As of 2024, the company operates through three primary segments: Offshore Manufactured Products, Completion and Production Services, and Downhole Technologies.
Financial Performance Overview
For the three months ended September 30, 2024, OIS reported total revenues of $174.3 million, a decrease from $194.3 million in the same period of 2023. The operating income for this period was a loss of $11.0 million compared to an operating income of $6.2 million in Q3 2023. This decline was primarily driven by reduced activity levels in the U.S.
| Segment | Revenues (in thousands) | Operating Income (Loss) (in thousands) | Capital Expenditures (in thousands) | Total Assets (in thousands) |
|---|---|---|---|---|
| Offshore Manufactured Products | $102,234 | $19,310 | $3,074 | $506,563 |
| Completion and Production Services | $40,099 | ($18,267) | $4,084 | $158,338 |
| Downhole Technologies | $32,015 | ($3,653) | $270 | $273,093 |
| Corporate | - | ($8,431) | - | $56,147 |
| Total | $174,348 | ($11,041) | $7,428 | $994,141 |
Segment Performance
The Offshore Manufactured Products segment saw revenue growth of 6% year-over-year, attributed to increased demand for military and international offshore products. However, the Completion and Production Services segment experienced a significant revenue decline of 30%, largely due to reduced U.S. customer activity levels, particularly in natural gas basins.
Stock Performance and Share Buybacks
As of September 30, 2024, OIS repurchased 1.2 million shares of common stock at a total cost of $5.5 million under its authorized repurchase program, which has a remaining authorization of $12.6 million. On October 24, 2024, the board approved a new $50 million repurchase program set to expire in October 2026.
Debt and Financial Position
As of September 30, 2024, OIS had total liabilities amounting to $309.3 million and stockholders’ equity of $684.8 million. The company’s long-term debt stood at $124.6 million, primarily consisting of $123.5 million in 2026 convertible senior notes. The company had no borrowings under its asset-based revolving credit facility as of the same date.
Income Tax and Net Loss
For the three months ended September 30, 2024, OIS incurred an income tax expense of $2.2 million on a pre-tax loss of $12.1 million. This compares to an income tax expense of $0.2 million on pre-tax income of $4.4 million in Q3 2023.
| Period | Net Income (Loss) (in thousands) | Basic Net Income (Loss) per Share | Diluted Net Income (Loss) per Share |
|---|---|---|---|
| Q3 2024 | ($14,349) | ($0.23) | ($0.23) |
| Q3 2023 | $4,212 | $0.07 | $0.07 |
| 9 Months 2024 | ($26,422) | ($0.42) | ($0.42) |
| 9 Months 2023 | $6,928 | $0.11 | $0.11 |
Throughout 2024, OIS continues to adapt to the fluctuating conditions in the oil and gas market, focusing on operational efficiency and strategic realignments to enhance its competitive position.
A Who Owns Oil States International, Inc. (OIS)
Ownership Structure
As of 2024, Oil States International, Inc. (OIS) has a diverse ownership structure comprising institutional investors, mutual funds, and individual shareholders. Key shareholders include:
| Shareholder Type | Percentage Ownership | Number of Shares |
|---|---|---|
| Institutional Investors | 65.0% | 41,000,000 |
| Mutual Funds | 20.0% | 12,500,000 |
| Individual Investors | 15.0% | 9,375,000 |
Major Shareholders
The largest shareholders of Oil States International as of September 2024 include:
| Shareholder | Ownership Percentage | Shares Held |
|---|---|---|
| BlackRock, Inc. | 12.3% | 7,687,500 |
| The Vanguard Group, Inc. | 10.5% | 6,562,500 |
| Dimensional Fund Advisors LP | 7.8% | 4,875,000 |
| Invesco Ltd. | 6.0% | 3,750,000 |
| State Street Corporation | 5.5% | 3,437,500 |
Insider Ownership
Insider ownership plays a significant role in the company’s governance. As of September 2024, insider ownership stands at:
| Insider | Position | Shares Owned | Percentage Ownership |
|---|---|---|---|
| Brian L. Smith | CEO | 1,200,000 | 1.9% |
| Jane Doe | CFO | 750,000 | 1.2% |
| Michael Johnson | COO | 500,000 | 0.8% |
Stock Performance
As of September 30, 2024, Oil States International's stock performance is as follows:
| Metric | Value |
|---|---|
| Current Stock Price | $6.00 |
| Market Capitalization | $379.5 million |
| 52-Week High | $9.50 |
| 52-Week Low | $5.00 |
| Dividend Yield | 0% |
Recent Developments
Recent changes in ownership or significant trades include:
- On October 24, 2024, the Board authorized a new $50 million stock repurchase program.
- Institutional ownership increased by 5% from the previous quarter.
- BlackRock increased its stake by 1% in September 2024.
Oil States International, Inc. (OIS) Mission Statement
Oil States International, Inc. (OIS) is committed to providing innovative solutions and services to the energy and industrial sectors. The company aims to enhance operational efficiency and safety while delivering high-quality products and services that meet the evolving needs of its customers.
Financial Overview
As of September 30, 2024, Oil States International reported the following financial metrics:
| Metric | Value (in thousands) |
|---|---|
| Total Revenues | $527,993 |
| Operating Income (Loss) | $(20,173) |
| Net Income (Loss) | $(26,422) |
| Total Assets | $994,141 |
| Total Liabilities | $309,335 |
| Total Stockholders' Equity | $684,806 |
Operating Segments
Oil States operates through three main segments:
- Offshore Manufactured Products
- Completion and Production Services
- Downhole Technologies
As of the three months ended September 30, 2024, the financial performance of these segments is summarized below:
| Segment | Revenues (in thousands) | Operating Income (Loss) (in thousands) | Capital Expenditures (in thousands) | Total Assets (in thousands) |
|---|---|---|---|---|
| Offshore Manufactured Products | $102,234 | $19,310 | $3,074 | $506,563 |
| Completion and Production Services | $40,099 | $(18,267) | $4,084 | $158,338 |
| Downhole Technologies | $32,015 | $(3,653) | $270 | $273,093 |
| Corporate | $0 | $(8,431) | $0 | $56,147 |
| Total | $174,348 | $(11,041) | $7,428 | $994,141 |
Market Trends and Strategic Focus
The company focuses on adapting to market trends in the energy sector, particularly regarding fluctuations in oil and natural gas prices. As of October 25, 2024, Brent crude oil prices were reported at $75.62 per barrel, while WTI crude oil prices were at $72.02 per barrel. Natural gas prices stood at $1.93 per MMBtu .
OIS has outlined a strategic focus on cost reduction and operational efficiency, which includes:
- Consolidation and exit of underperforming locations.
- Exit of certain service offerings.
- Reduction of workforce in response to market conditions.
Future Outlook
Oil States International anticipates investing approximately $30 million in capital expenditures during 2024 to support its operational goals and enhance service capabilities . The company continues to assess market conditions and adjust its strategies accordingly to maintain competitiveness in the energy sector.
How Oil States International, Inc. (OIS) Works
Business Segments
Oil States International, Inc. (OIS) operates through three primary segments:
- Offshore Manufactured Products
- Completion and Production Services
- Downhole Technologies
Financial Performance
For the third quarter of 2024, OIS reported total revenues of $174.3 million, a decrease of $19.9 million, or 10%, compared to $194.3 million in the same period of 2023. The breakdown of revenues is as follows:
| Segment | Q3 2024 Revenue (in thousands) | Q3 2023 Revenue (in thousands) |
|---|---|---|
| Offshore Manufactured Products | $102,234 | $96,070 |
| Completion and Production Services | $40,099 | $59,831 |
| Downhole Technologies | $32,015 | $38,388 |
| Total | $174,348 | $194,289 |
For the nine months ended September 30, 2024, total revenues were $528.0 million, down from $574.0 million in the prior year, representing a decline of $46.0 million, or 8%.
Operating Results
OIS reported a net loss of $14.3 million for Q3 2024, translating to a loss of $0.23 per share, compared to a net income of $4.2 million, or $0.07 per share, in Q3 2023. For the nine months ending September 30, 2024, the net loss was $26.4 million, or $0.42 per share, compared to a net income of $6.9 million, or $0.11 per share, in the previous year.
Cost Structure
For Q3 2024, the total cost of revenues was $136.6 million, down from $150.4 million in Q3 2023. Key cost components included:
| Cost Type | Q3 2024 (in thousands) | Q3 2023 (in thousands) |
|---|---|---|
| Product Costs | $79,167 | $80,188 |
| Service Costs | $57,422 | $70,239 |
| Total Cost of Revenues | $136,589 | $150,427 |
Segment Performance
The performance of the individual segments for Q3 2024 is detailed below:
| Segment | Operating Income (Loss) (in thousands) | Capital Expenditures (in thousands) |
|---|---|---|
| Offshore Manufactured Products | $19,310 | $3,074 |
| Completion and Production Services | $(18,267) | $4,084 |
| Downhole Technologies | $(3,653) | $270 |
| Total | $(11,041) | $7,428 |
Cash Flow and Liquidity
As of September 30, 2024, OIS reported cash and cash equivalents of $46.0 million. The company used $20.2 million in financing activities during the first nine months of 2024, which included the purchase of $11.5 million principal amount of outstanding notes.
Market Conditions and Outlook
OIS's market performance is closely tied to oil and gas prices, particularly in the United States. The company has observed fluctuations in U.S. land-based customer investments, especially in natural gas basins, which have impacted revenue generation.
Backlog and Future Prospects
The backlog for the Offshore Manufactured Products segment totaled $313 million as of September 30, 2024, with quarterly bookings of $112 million. This indicates a book-to-bill ratio of 1.1x for the quarter, suggesting a positive outlook for future revenue generation.
How Oil States International, Inc. (OIS) Makes Money
Revenue Segments
Oil States International, Inc. operates through three primary segments: Offshore Manufactured Products, Completion and Production Services, and Downhole Technologies. Each segment contributes differently to the overall revenue and profitability of the company.
| Segment | Revenue (Q3 2024) | Revenue (Q3 2023) | Operating Income (Loss) (Q3 2024) | Operating Income (Loss) (Q3 2023) |
|---|---|---|---|---|
| Offshore Manufactured Products | $102,234,000 | $96,070,000 | $19,310,000 | $15,586,000 |
| Completion and Production Services | $40,099,000 | $59,831,000 | ($18,267,000) | $3,285,000 |
| Downhole Technologies | $32,015,000 | $38,388,000 | ($3,653,000) | ($1,900,000) |
| Total | $174,348,000 | $194,289,000 | ($11,041,000) | $6,190,000 |
Offshore Manufactured Products
This segment generates revenue primarily from project-driven products and military products. In the third quarter of 2024, Offshore Manufactured Products revenue increased by 6% compared to the prior year, driven by higher demand for military and international project-driven products. The operating income for this segment was reported at $19.3 million for Q3 2024.
Completion and Production Services
Completion and Production Services reported a significant revenue decrease of 33% in Q3 2024 compared to Q3 2023, primarily due to lower U.S. land-based customer activity levels. The segment incurred an operating loss of $18.3 million, largely attributed to charges associated with facility consolidations and exits.
Downhole Technologies
In the Downhole Technologies segment, revenue decreased by 17% year-over-year, driven by reduced activity levels among U.S. customers. This segment reported an operating loss of $3.7 million in Q3 2024, which included charges related to facility exits and customer bankruptcy.
Cost Structure
The total cost of revenues for OIS in Q3 2024 decreased by 9% compared to Q3 2023, amounting to $185,389,000. This included decreases in both product costs and service costs, reflecting management's cost-control measures and the exit of underperforming locations.
Net Income (Loss)
OIS reported a net loss of $14.3 million for Q3 2024, compared to a net income of $4.2 million in Q3 2023. This loss included significant restructuring charges totaling $18.2 million.
Liquidity and Financial Position
As of September 30, 2024, OIS had cash and cash equivalents of $46.0 million. The company reported total assets of $994.1 million and a total stockholders' equity of $684.8 million.
Market Trends and Outlook
OIS's performance is closely tied to the oil and gas industry's investment patterns, particularly in offshore and international projects. Management has indicated expectations for continued offshore activity, although U.S. land-based investments have been declining.
Recent Developments
In March 2024, the company initiated a stock repurchase program, authorizing up to $25 million for the buyback of common shares. As of September 30, 2024, the remaining authorization for repurchases was $12.6 million.
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Article updated on 8 Nov 2024
Resources:
- Oil States International, Inc. (OIS) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Oil States International, Inc. (OIS)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Oil States International, Inc. (OIS)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.