updated 4/28/2011 7:46:30 AM ET 2011-04-28T11:46:30

HOUSTON, April 27, 2011 (GLOBE NEWSWIRE) -- Today, Oil States International, Inc. (NYSE:OIS) reported net income for the quarter ended March 31, 2011 of $62.1 million, or $1.13 per diluted share, compared to $40.2 million, or $0.78 per diluted share, in the first quarter of 2010.

The Company generated $760.4 million and $139.8 million of revenues and EBITDA, respectively, during the quarter compared to revenue of $532.3 million and EBITDA of $91.5 million in the first quarter of 2010 (EBITDA defined as net income plus interest, taxes, depreciation and amortization).(A) The year-over-year increases in revenues and EBITDA were primarily due to the full quarter contribution from the recent acquisition of The MAC, a leading provider of remote site accommodations to the Australian natural resources industry, and improved results from the well site services and tubular services segments due to stronger North American drilling and completion activity. Consolidated operating income in the first quarter of 2011 was $94.8 million compared to $59.8 million for the corresponding quarter of 2010. 

"The acquisitions that we closed during the fourth quarter of 2010 generated better than expected results, contributing to strong year-over-year growth in the first quarter of 2011," stated Cindy B. Taylor, Oil States' President and Chief Executive Officer. "The MAC and Mountain West acquisitions played a large role in our accommodations' growth this quarter, providing us with greater geographic and resource exposure along with strong and growing revenue streams. Service intensity from horizontal drilling and completion activity afforded us improvements in both pricing and product mix in our rental tools business. In addition, OCTG shipments remained strong with Tubular Services' margins improving to 5.9% in the first quarter."

Mrs. Taylor continued, "Looking forward, the outlook for our oil sands and Australian mining accommodations remains extremely positive. Customers in these regions continue to announce additional projects which add to our demand visibility and should bode well for the occupancy of our existing rooms and our planned expansions. Bidding activity in our Offshore Products segment remains at healthy levels with March 31, 2011 backlog improving to $415 million, up 17% from the end of 2010."

The Company recognized an effective tax rate of 27.3% in the first quarter of 2011 compared to 29.3% in the first quarter of 2010. The lower effective tax rate in the first quarter of 2011 was primarily due to foreign sourced income taxed at lower statutory rates. The Company spent $92.6 million in capital expenditures during the first quarter of 2011 primarily related to the previously announced construction of the Henday Lodge and continued expansion of the Wapasu Creek Lodge, both located in the oil sands region of Alberta, Canada. The Company currently expects to spend approximately $600 million to $625 million in capital expenditures during 2011 primarily to expand its Canadian oil sands and Australian natural resource accommodations along with adding incremental equipment in its rental tools segment to service the active North American shale plays. 

BUSINESS SEGMENT RESULTS

(Unless otherwise noted, the following discussion compares the quarterly results from the first quarter of 2011 to the results from the first quarter of 2010.)

Accommodations

Accommodations generated revenues of $197.1 million and EBITDA of $75.2 million for the first quarter of 2011 compared to revenues and EBITDA of $145.5 million and $57.8 million, respectively, in the first quarter of 2010. Accommodations revenues increased 35% and EBITDA increased 30% year-over-year due to the full quarter contribution from the recent acquisitions of The MAC and Mountain West which added revenues and EBITDA of $45.5 million and $20.6 million, respectively, in the first quarter of 2011 and the strengthening of the Canadian dollar against the U.S. dollar. 

Well Site Services

Well Site Services generated revenues of $140.6 million and EBITDA of $41.4 million in the first quarter of 2011 compared to revenues and EBITDA of $97.9 million and $20.3 million, respectively, in the first quarter of 2010, representing year-over-year growth of 44% and 104%, respectively. The increase in EBITDA was primarily due to year-over-year increases in activity from the Company's rental tool business.

Rental tools generated $107.5 million and $34.2 million of revenues and EBITDA, respectively, in the first quarter of 2011 compared to revenues of $67.5 million and EBITDA of $14.9 million in the first quarter of 2010. These year-over-year improvements were primarily due to better pricing and product mix resulting from the on-going increase in U.S. drilling and completion activity, particularly in liquids rich horizontal drilling areas.

Drilling services generated revenues and EBITDA of $33.1 million and $7.2 million, respectively, in the first quarter of 2011 compared to $30.4 million of revenues and $5.4 million of EBITDA in the first quarter 2010. The year-over-year increase in revenues and EBITDA was due to increases in pricing and cash margin expansion with day rates rising to $15.3 thousand per day in the first quarter of 2011 from $13.8 thousand per day in the first quarter of 2010, and cash margins improving to $3.6 thousand per day in the first quarter of 2011 from $2.5 thousand per day in the first quarter of 2010.

Offshore Products

The Offshore Products segment generated revenues and EBITDA of $128.4 million and $20.1 million, respectively, in the first quarter of 2011 compared to $103.0 million of revenues and $15.5 million in EBITDA in the first quarter of 2010.  Revenues and EBITDA increased year-over-year at Offshore Products as a result of higher demand for bearings, industrial and elastomer products coupled with the acquisition of Acute Technological Services which contributed $6.1 million of revenues and $1.2 million of EBITDA in the first quarter of 2011 partially offset by reduced shipments of drilling rig and vessel equipment. Backlog totaled $415.5 million at March 31, 2011 which represented a 17% increase from the $353.7 million reported as of December 31, 2010 and an 88% increase from the $220.6 million reported at March 31, 2010.

Tubular Services

Tubular Services generated revenues of $294.3 million and EBITDA of $13.5 million during the first quarter of 2011 compared to revenues of $185.9 million and EBITDA of $6.6 million in the first quarter of 2010. Tubular Services' OCTG shipments were up 53% year-over-year with 154,400 tons shipped in the first quarter of 2011 compared to 101,200 tons shipped in the first quarter of 2010 reflecting the continued year-over-year improvement in U.S. drilling activity. Gross margin as a percent of revenues increased to 5.9% in the first quarter of 2011 from 5.3% in the first quarter of 2010 as revenue per ton increased 4% year-over-year. The Company's OCTG inventory increased by 6% during the quarter to $351.7 million at March 31, 2011 in support of new customer purchase commitments, primarily associated with horizontal drilling and completion activity in the shale plays.

Oil States International, Inc. is a diversified oilfield services company with recently added exposure to the mining industry through The MAC acquisition. Oil States is a leading, integrated provider of remote site accommodations with prominent market positions in the Canadian oil sands and the Australian mining regions. Oil States is also a leading manufacturer of products for deepwater production facilities and subsea pipelines as well as a provider of completion-related rental tools, oil country tubular goods distribution and land drilling services to the oil and gas industry. Oil States 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 Oil States International, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6058

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 therein will be based on then 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" and "Risk Factors" sections of the Form 10-K for the year ended December 31, 2010 filed by Oil States with the SEC on February 22, 2011.

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES
   
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Amounts)
   
  THREE MONTHS ENDED

MARCH 31,
  2011 2010
     
     
Revenues  $ 760,441  $ 532,345
     
Costs and expenses:    
Cost of sales and services  574,398  406,510
Selling, general and administrative expenses  43,708  35,153
Depreciation and amortization expense  45,151  31,078
Acquisition related expenses   1,097  --
Other operating (income) expense   1,311   (201)
    665,665   472,540
Operating income  94,776  59,805
     
Interest expense  (10,249)  (3,470)
Interest income  1,013  78
Equity in earnings of unconsolidated affiliates  51  29
Other income   143   762
Income before income taxes  85,734  57,204
Income tax expense   (23,383)   (16,789)
Net income    62,351    40,415
Less: Net income attributable to noncontrolling interest   274   172
Net income attributable to Oil States International, Inc.  $ 62,077  $ 40,243
     
Net income per share attributable to Oil States International, Inc. common stockholders     
Basic    $ 1.22  $ 0.81
Diluted  $ 1.13  $ 0.78
     
Weighted average number of common shares outstanding:    
Basic    50,936  49,896
Diluted  54,852  51,920

 

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES
 
CONSOLIDATED BALANCE SHEETS
(In Thousands)
     
 

ASSETS
MARCH 31,

2011
DECEMBER 31,

2010
  (UNAUDITED)  
     
Current assets:    
Cash and cash equivalents  $ 96,973  $ 96,350
Accounts receivable, net  519,045  478,739
Inventories, net  531,620  501,435
Prepaid expenses and other current assets   26,964   23,480
Total current assets  1,174,602  1,100,004
     
Property, plant, and equipment, net  1,322,706  1,252,657
Goodwill, net  482,906  475,222
Other intangible assets, net  137,603  139,421
Investments in unconsolidated affiliates  7,166  5,937
Other noncurrent assets   41,773   42,758
Total assets  $ 3,166,756  $ 3,015,999
     
 LIABILITIES AND STOCKHOLDERS' EQUITY    
     
Current liabilities:    
Accounts payable and accrued liabilities  $ 296,327  $ 304,739
Income taxes  5,520  4,604
Current portion of long-term debt and capitalized leases (B)  186,910  181,175
Deferred revenue  53,242  60,847
Other current liabilities   5,656   2,810
Total current liabilities  547,655  554,175
     
Long-term debt and capitalized leases (C)  778,575  731,732
Deferred income taxes  86,409  81,198
Other noncurrent liabilities   20,341   19,961
Total liabilities  1,432,980  1,387,066
     
Stockholders' equity:    
Oil States International, Inc. stockholders' equity:    
Common stock  545  541
Additional paid-in capital  522,664  508,429
Retained earnings  1,190,210  1,128,133
Accumulated other comprehensive income  115,212  84,549
Treasury stock   (96,179)   (93,746)
Total Oil States International, Inc. stockholders' equity   1,732,452   1,627,906
Noncontrolling interest   1,324   1,027
Total stockholders' equity   1,733,776   1,628,933
Total liabilities and stockholders' equity  $ 3,166,756  $ 3,015,999
 
 
OIL STATES INTERNATIONAL, INC.
SEGMENT DATA
(in thousands)
(unaudited)
     
  Three Months Ended March 31,
  2011 2010
     
Revenues     
Rental tools  $107,531 $67,502
Drilling services   33,105  30,401
     
Well site services   140,636  97,903
Accommodations   197,099  145,534
Offshore products   128,441  102,993
Tubular services   294,265  185,915
Total revenues  $760,441 $532,345
     
EBITDA (A)     
Rental tools  $34,186 $14,891
Drilling services   7,249  5,384
     
Well site services   41,435  20,275
Accommodations   75,242  57,780
Offshore products   20,075  15,451
Tubular services   13,527  6,611
Corporate and eliminations   (10,432)  (8,615)
Total EBITDA  $139,847 $91,502
     
Operating income / (loss)     
Rental tools  $24,389 $4,378
Drilling services   2,235  (1,982)
     
Well site services   26,624  2,396
Accommodations   48,973  47,368
Offshore products   16,750  12,620
Tubular services   13,046  6,215
Corporate and eliminations   (10,617)  (8,794)
Total operating income  $94,776 $59,805
 
 
OIL STATES INTERNATIONAL, INC.
ADDITIONAL QUARTERLY SEGMENT AND OPERATING DATA
(unaudited)
     
  Three Months Ended March 31,
  2011 2010
     
     
Supplemental operating data    
Lodge/village revenues ($ in thousands)  $132,721 $70,322
Other accommodations revenues ($ in thousands)   64,378  75,212
Total accommodations revenues ($ in thousands)  $197,099 $145,534
     
Average available lodge/village rooms   12,970  6,279
Lodge/village revenues per available room  $114 $124
     
Offshore products backlog ($ in millions)  $415.5 $220.6
     
Rental tool job tickets   11,079  9,644
Average revenue per ticket ($ in thousands)  $9.7 $7.0
     
Tubular services operating data     
Shipments (tons in thousands)  154.4 101.2
Quarter end inventory ($ in thousands)  $351,654 $311,288
     
Land drilling operating statistics     
Average rigs available  33 35
Utilization  71.4% 68.1%
Implied day rate ($ in thousands per day)  $15.3 $13.8
Implied daily cash margin ($ in thousands per day)  $3.6 $2.5

(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. The following table sets forth a reconciliation of EBITDA to net income, which is the most directly comparable measure of financial performance calculated under generally accepted accounting principles:

OIL STATES INTERNATIONAL, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
(in thousands)
(unaudited)
     
  Three Months Ended March 31,
  2011 2010
     
 Net income / (loss)  $62,077 $40,243
 Income tax provision   23,383  16,789
 Depreciation and amortization   45,151  31,078
 Interest income   (1,013)  (78)
 Interest expense   10,249  3,470
 EBITDA  $139,847 $91,502

(C) As of March 31, 2011, the Company had approximately $323.9 million available under its credit facilities.

CONTACT: Bradley J. Dodson
         Oil States International, Inc.
         713-652-0582

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