Oil States Announces First Quarter 2024 Results

By: Oil States International, Inc. via Business Wire

April 26, 2024 at 07:00 AM EDT

Net loss of $13.4 million, or $0.21 per diluted share, reported for the quarter, which included a non-cash goodwill impairment charge totaling $10.0 million ($9.5 million, after-tax, or $0.15 per share)
Net loss of $1.9 million, or $0.03 per diluted share, excluding goodwill and other charges (a non-GAAP measure⁽¹⁾)
Consolidated revenues of $167.3 million decreased 20% sequentially, driven primarily by the timing of conversion of orders from backlog
Adjusted EBITDA (a non-GAAP measure⁽¹⁾) of $15.5 million
Received two 2024 Spotlight on New Technology™ Awards from the Offshore Technology Conference for our Ultra-deepwater Swift™ connector design and our ACTIVEHub™ platform with ACTIVELatch™ technology
Realigned operating segments and recast historical segment-related information

Oil States International, Inc. (NYSE: OIS):

	Three Months Ended								% Change
(Unaudited, In Thousands, Except Per Share Amounts)	March 31, 2024			December 31, 2023			March 31, 2023		Sequential		Year-over-Year
Consolidated results:
Revenues	$	167,262		$	208,266		$	196,199	(20	)%	(15	)%
Operating income (loss)⁽²⁾⁽³⁾	$	(11,177	)	$	7,830		$	5,875	n.m.		n.m.
Net income (loss)	$	(13,374	)	$	5,963		$	2,158	n.m.		n.m.
Net income (loss), excluding charges⁽¹⁾	$	(1,873	)	$	7,071		$	2,158	n.m.		n.m.
Adjusted EBITDA⁽¹⁾	$	15,455		$	23,978		$	21,407	(36	)%	(28	)%

Revenues by segment⁽²⁾:
Offshore Manufactured Products	$	86,857		$	126,489		$	80,505	(31	)%	8	%
Well Site Services		47,292			51,208			67,058	(8	)%	(29	)%
Downhole Technologies		33,113			30,569			48,636	8	%	(32	)%

Revenues by destination:
U.S. land	$	67,082		$	72,381		$	100,537	(7	)%	(33	)%
Offshore and international		100,180			135,885			95,662	(26	)%	5	%

Operating income (loss) by segment⁽²⁾⁽³⁾:
Offshore Manufactured Products	$	10,603		$	24,167		$	7,698	(56	)%	38	%
Well Site Services		(419	)		(1,102	)		6,966	62	%	n.m.
Downhole Technologies		(12,079	)		(5,726	)		1,873	(111	)%	n.m.

Adjusted Segment EBITDA⁽¹⁾⁽²⁾:
Offshore Manufactured Products	$	15,800		$	28,838		$	11,938	(45	)%	32	%
Well Site Services		6,593			5,903			13,223	12	%	(50	)%
Downhole Technologies		2,191			(1,420	)		6,741	n.m.		(67	)%

___________________
(1)	These are non-GAAP measures. See “Reconciliations of GAAP to Non-GAAP Financial Information” tables below for reconciliations to their most comparable GAAP measures as well as further clarification and explanation.
(2)	In first quarter 2024, certain short-cycle, consumable product operations historically reported within the Offshore Manufactured Products segment were integrated into the Downhole Technologies segment. Historical segment financial data, backlog and other information were conformed with the first quarter 2024 revised segment presentation. See “2023 Recast Segment Data” tables below for revised 2023 quarterly and full-year information.
(3)	Operating income (loss) for the three months ended March 31, 2024 included goodwill impairment, facility consolidation and other charges totaling $12.5 million. Operating income (loss) for the three months ended December 31, 2023 included facility consolidation and other charges totaling $1.4 million. See “Segment Data” below for additional information.

Oil States International, Inc. reported net loss of $13.4 million, or $0.21 per share, and Adjusted EBITDA of $15.5 million for the first quarter of 2024 on revenues of $167.3 million. Reported first quarter 2024 net loss included a non-cash goodwill impairment charge of $10.0 million ($9.5 million after-tax, or $0.15 per share) and facility consolidation and other charges of $2.5 million ($2.0 million after-tax, or $0.03 per share). These results compare to revenues of $208.3 million, net income of $6.0 million, or $0.09 per share, and Adjusted EBITDA of $24.0 million reported in the fourth quarter of 2023, which included facility consolidation and other charges of $1.4 million ($1.1 million after-tax, or $0.02 per share).

Oil States’ President and Chief Executive Officer, Cindy B. Taylor, stated,

“Our first quarter consolidated revenues and Adjusted EBITDA decreased sequentially due primarily to the impacts of seasonality and timing of revenue recognition for our percentage-of-completion projects in our Offshore Manufactured Products segment, where revenues increased year-over-year but declined sequentially. Certain orders moved out of the quarter, resulting in segment backlog of $305 million as of March 31, and a quarterly book-to-bill ratio of 0.8x.

“Our Completion Services and Downhole Technologies businesses have begun to recover from the fourth quarter 2023 activity slow-down that the industry experienced, but progress in this recovery during the first quarter was slow. Cost control and other reduction measures are being implemented in the areas where we are experiencing lower levels of activity, particularly the gas basins, as we do not expect much recovery over the next couple of quarters.

“Our investments in technology and innovation were again highlighted by the Offshore Technology Conference, with the announcement that we are the recipient of two 2024 Spotlight on New Technology Awards for our Swift™ Ultra-Deepwater Connector and our ACTIVEHub™ platform with ACTIVELatch™.

“We remain encouraged by the continued expansion in offshore activity globally coupled with enhanced competitive positioning in each of our business segments through our recent new technology introductions. Benefits of our expanded technology offering are expected to extend well beyond the next couple of years.”

Business Segment Results

In first quarter 2024, certain short-cycle, consumable product operations historically reported within the Offshore Manufactured Products segment (legacy frac plugs and elastomer products) were integrated into our Downhole Technologies segment to better align with the underlying activity demand drivers and current segment management structure, as well as provide for additional operational synergies. Historical segment financial data (GAAP and non-GAAP), backlog and other information were conformed with the first quarter 2024 revised segment presentation.

(See Segment Data, Adjusted Segment EBITDA, 2023 Recast Segment Data and 2023 Adjusted Segment EBITDA tables below)

Offshore Manufactured Products

Offshore Manufactured Products reported revenues of $86.9 million, operating income of $10.6 million and Adjusted Segment EBITDA of $15.8 million in the first quarter of 2024, compared to revenues of $126.5 million, operating income of $24.2 million and Adjusted Segment EBITDA of $28.8 million reported in the fourth quarter of 2023. During the first quarter of 2024 and the fourth quarter of 2023, the segment recorded charges of $1.5 million and $0.8 million, respectively, associated with the consolidation of certain manufacturing and service locations. Adjusted Segment EBITDA margin in the first quarter of 2024 was 18%.

Backlog totaled $305 million as of March 31, 2024, a decrease of $22 million, or 7%, from December 31, 2023 due to the timing of bookings, which totaled $66 million, yielding a quarterly book-to-bill ratio of 0.8x.

Well Site Services

Well Site Services reported revenues of $47.3 million, an operating loss of $0.4 million and Adjusted Segment EBITDA of $6.6 million in the first quarter of 2024, compared to revenues of $51.2 million, an operating loss of $1.1 million and Adjusted Segment EBITDA of $5.9 million reported in the fourth quarter of 2023. During the first quarter of 2024 and the fourth quarter of 2023, the segment recorded costs of $0.4 million and $0.6 million, respectively, associated with the defense of certain patents related to its proprietary technologies. Additionally, the segment recognized $0.7 million in costs associated with the consolidation and exit of three facilities during the first quarter of 2024. Adjusted Segment EBITDA margin was 14% in the first quarter of 2024, compared to 12% in the fourth quarter of 2023.

Downhole Technologies

Downhole Technologies reported revenues of $33.1 million, an operating loss of $12.1 million and Adjusted Segment EBITDA of $2.2 million in the first quarter of 2024, compared to revenues of $30.6 million, an operating loss of $5.7 million and an Adjusted Segment EBITDA loss of $1.4 million reported in the fourth quarter of 2023. Reported results in the first quarter of 2024 included a non-cash goodwill impairment charge of $10.0 million, recorded in connection with the first quarter 2024 segment realignment discussed above. Included in the fourth quarter of 2023 results were provisions for excess and obsolete inventory totaling $1.3 million.

Corporate

Corporate operating expenses in the first quarter of 2024 totaled $9.3 million.

Interest Expense, Net

Net interest expense totaled $2.1 million in the first quarter of 2024, which included $0.5 million of non-cash amortization of deferred debt issuance costs.

Income Taxes

During the first quarter of 2024, the Company recognized tax expense of $24 thousand on a pre-tax loss of $13.4 million, which included a $7.7 million non-deductible goodwill impairment charge as well as other non-deductible expenses. The Company recognized tax expense of $0.2 million on pre-tax income of $6.2 million in the fourth quarter of 2023.

Cash Flows

During the first quarter of 2024, cash flows used in operations totaled $11.4 million and capital expenditures totaled $10.1 million ($7.8 million net of proceeds from sales of equipment) primarily due to the purchase of land for the new Batam, Indonesia manufacturing facility.

Financial Condition

Cash on-hand totaled $24.1 million at March 31, 2024. No borrowings were outstanding under the Company’s asset-based revolving credit facility (the “ABL Facility”) at March 31, 2024. The Company amended its ABL Facility during the quarter to extend the maturity date to February 16, 2028.

Industry Awards

2024 Spotlight on New Technology™ Awards from the Offshore Technology Conference
- Ultra-Deepwater Connector
  
  Oil States’ Swift™ Ultra-Deepwater Connector offers oil and gas operators a unique integrally machined anti-rotation mechanism that allows for hands-free makeup and is designed to prevent connector breakout in extreme and fatigue-sensitive ultra-deepwater conditions. This metal-sealing casing/conductor connector features integral ratchet anti-rotation as a standard component with no loose parts such as the tabs, keys and screws common on traditional anti-rotational connectors. The advanced ratchet anti-rotation mechanism allows hands-free running of the connector eliminating personnel in the red zone, reducing safety risks associated with dropped objects and personnel hazards related to the make-up of traditional large diameter conductor connectors.
- Remote Wellsite Monitoring and Control Solutions
  
  Oil States recently introduced its ACTIVEHub™ platform with ACTIVELatch™ technology to address operators’ needs for remotely monitoring and controlling their frac locations to provide an efficient, safer and more environmentally friendly wellsite. The ACTIVEHub platform is a communication and control center that is designed to provide real-time information and control across the entire wellsite. ACTIVELatch is a key component of the ACTIVEHub system, and is the industry’s first, battery-operated “wireless latch.” Our ACTIVELatch is a 5 1/8-in. 15,000 psi, remotely operated wellhead connection that is designed to allow an operator to make and break the wireline connection to the well wirelessly via the ACTIVEHub communication and control system without bulky cables or hydraulics. The component’s wireless capability removes personnel from the red zone for greater wellsite safety.

Conference Call Information

The call is scheduled for April 26, 2024 at 9:00 a.m. Central Daylight Time, is being webcast and can be accessed from the Company’s website at www.ir.oilstatesintl.com. Participants may also join the conference call by dialing 1 (888) 210-3346 in the United States or by dialing +1 (646) 960-0253 internationally and using the passcode 7534957. A replay of the conference call will be available approximately two hours after the completion of the call and can be accessed from the Company’s website at www.ir.oilstatesintl.com.

About Oil States

Oil States International, Inc. is a global provider of manufactured products and services to customers in the energy, industrial and military sectors. The Company’s manufactured products include highly engineered capital equipment and consumable products. Oil States is headquartered in Houston, Texas with manufacturing and service facilities strategically located across the globe. 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 www.oilstatesintl.com.

Cautionary Language Concerning Forward Looking Statements

The foregoing contains forward-looking statements within the meaning of Section 27A 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 others, the level of supply and demand for oil and natural gas, fluctuations in the current and future prices of oil and natural gas, the level of exploration, drilling and completion activity, general global economic conditions, the cyclical nature of the oil and natural gas industry, geopolitical conflicts and tensions, the financial health of our customers, the actions of the Organization of Petroleum Exporting Countries (“OPEC”) and other producing nations with respect to crude oil production levels and pricing, the impact of environmental matters, including executive actions and regulatory efforts to adopt environmental or climate change regulations that may result in increased operating costs or reduced oil and natural gas production or demand globally, consolidation of our customers, our ability to access and the cost of capital in the bank and capital markets, our ability to develop new competitive technologies and products, and other factors discussed in the “Business” and “Risk Factors” sections of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof, and, except as required by law, the Company undertakes no obligation to update those statements or to publicly announce the results of any revisions to any of those statements to reflect future events or developments.

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In Thousands, Except Per Share Amounts) (Unaudited)

	Three Months Ended
	March 31, 2024			December 31, 2023			March 31, 2023
Revenues:
Products	$	94,329		$	123,444		$	99,840
Services		72,933			84,822			96,359
		167,262			208,266			196,199

Costs and expenses:
Product costs		75,137			97,291			78,677
Service costs		56,814			66,405			72,058
Cost of revenues (exclusive of depreciation and amortization expense presented below)		131,951			163,696			150,735
Selling, general and administrative expense⁽¹⁾		22,496			22,400			24,016
Depreciation and amortization expense		14,195			14,569			15,256
Impairment of goodwill		10,000			—			—
Other operating (income) expense, net⁽²⁾		(203	)		(229	)		317
		178,439			200,436			190,324
Operating income (loss)		(11,177	)		7,830			5,875

Interest expense, net		(2,101	)		(1,811	)		(2,391	)
Other income (expense), net		(72	)		177			276
Income (loss) before income taxes		(13,350	)		6,196			3,760
Income tax provision		(24	)		(233	)		(1,602	)
Net income (loss)	$	(13,374	)	$	5,963		$	2,158

Net income (loss) per share:
Basic	$	(0.21	)	$	0.09		$	0.03
Diluted		(0.21	)		0.09			0.03

Weighted average number of common shares outstanding:
Basic		62,503			62,483			62,825
Diluted		62,503			63,004			63,072

________________
(1)	Selling, general and administrative expense for the three months ended March 31, 2024 and December 31, 2023 included $0.4 million and $0.6 million, respectively, of costs associated with the defense of certain Well Site Services segment patents related to proprietary technologies.
(2)	Other operating (income) expense, net for the three months ended March 31, 2024 and December 31, 2023 included facility consolidation charges of $1.5 million and $0.8 million, respectively, associated with the Offshore Manufactured Products segment’s ongoing consolidation and relocation of certain manufacturing and service locations. Other operating (income) expense, net for the three months ended March 31, 2024 also included $0.7 million in costs associated with the Well Site Services segment’s consolidation and exit of three facilities.

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

	March 31, 2024			December 31, 2023
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	24,059		$	47,111
Accounts receivable, net		200,765			203,211
Inventories, net		210,189			202,027
Prepaid expenses and other current assets		35,169			35,648
Total current assets		470,182			487,997

Property, plant, and equipment, net		278,083			280,389
Operating lease assets, net		24,826			21,970
Goodwill, net		69,774			79,867
Other intangible assets, net		148,734			153,010
Other noncurrent assets		24,216			23,253
Total assets	$	1,015,815		$	1,046,486

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	620		$	627
Accounts payable		57,062			67,546
Accrued liabilities		34,821			44,227
Current operating lease liabilities		6,654			6,880
Income taxes payable		1,179			1,233
Deferred revenue		41,528			36,757
Total current liabilities		141,864			157,270

Long-term debt		135,572			135,502
Long-term operating lease liabilities		21,147			18,346
Deferred income taxes		6,518			7,717
Other noncurrent liabilities		18,396			18,106
Total liabilities		323,497			336,941

Stockholders’ equity:
Common stock		785			772
Additional paid-in capital		1,130,979			1,129,240
Retained earnings		271,544			284,918
Accumulated other comprehensive loss		(73,011	)		(69,984	)
Treasury stock		(637,979	)		(635,401	)
Total stockholders’ equity		692,318			709,545
Total liabilities and stockholders’ equity	$	1,015,815		$	1,046,486

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands) (Unaudited)

	Three Months Ended March 31,
		2024			2023
Cash flows from operating activities:
Net income (loss)	$	(13,374	)	$	2,158
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization expense		14,195			15,256
Impairment of goodwill		10,000			—
Stock-based compensation expense		1,752			1,589
Amortization of deferred financing costs		513			449
Deferred income tax provision (benefit)		(1,122	)		396
Gains on disposals of assets		(1,245	)		(210	)
Other, net		(300	)		17
Changes in operating assets and liabilities:
Accounts receivable		1,579			(745	)
Inventories		(8,909	)		(12,802	)
Accounts payable and accrued liabilities		(19,355	)		(18,329	)
Deferred revenue		4,771			4,179
Other operating assets and liabilities, net		135			2,124
Net cash flows used in operating activities		(11,360	)		(5,918	)

Cash flows from investing activities:
Capital expenditures		(10,092	)		(6,568	)
Proceeds from disposition of equipment		2,295			223
Other, net		(31	)		(48	)
Net cash flows used in investing activities		(7,828	)		(6,393	)

Cash flows from financing activities:
Revolving credit facility borrowings		1,894			27,865
Revolving credit facility repayments		(1,894	)		(22,865	)
Repayment of 1.50% convertible senior notes		—			(17,315	)
Other debt and finance lease repayments		(154	)		(106	)
Payment of financing costs		(954	)		(21	)
Shares added to treasury stock as a result of net share settlements due to vesting of stock awards		(2,578	)		(1,936	)
Net cash flows used in financing activities		(3,686	)		(14,378	)

Effect of exchange rate changes on cash and cash equivalents		(178	)		478
Net change in cash and cash equivalents		(23,052	)		(26,211	)
Cash and cash equivalents, beginning of period		47,111			42,018
Cash and cash equivalents, end of period	$	24,059		$	15,807

Cash paid (received) for:
Interest	$	306		$	485
Income taxes, net		599			(2,465	)

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES SEGMENT DATA (In Thousands) (Unaudited)

	Three Months Ended
	March 31, 2024			December 31, 2023			March 31, 2023
Revenues⁽¹⁾:
Offshore Manufactured Products
Project-driven:
Products	$	53,137		$	82,839		$	48,617
Services		25,233			32,875			24,630
		78,370			115,714			73,247
Military and other products		8,487			10,775			7,258
Total Offshore Manufactured Products		86,857			126,489			80,505
Well Site Services		47,292			51,208			67,058
Downhole Technologies		33,113			30,569			48,636
Total revenues	$	167,262		$	208,266		$	196,199

Operating income (loss)⁽¹⁾:
Offshore Manufactured Products⁽²⁾	$	10,603		$	24,167		$	7,698
Well Site Services⁽³⁾		(419	)		(1,102	)		6,966
Downhole Technologies⁽⁴⁾		(12,079	)		(5,726	)		1,873
Corporate		(9,282	)		(9,509	)		(10,662	)
Total operating income	$	(11,177	)	$	7,830		$	5,875

________________
(1)	In the first quarter 2024, certain short-cycle, consumable product operations historically reported within the Offshore Manufactured Products segment were integrated into the Downhole Technologies segment. Historical segment financial results were conformed with the first quarter 2024 revised segment presentation.
(2)	Operating income for the three months ended March 31, 2024 and December 31, 2023 included facility consolidation charges of $1.5 million and $0.8 million, respectively, associated with the Offshore Manufactured Products segment’s ongoing consolidation and relocation of certain manufacturing and service locations.
(3)	Operating loss for the three months ended March 31, 2024 and December 31, 2023 included $0.4 million and $0.6 million, respectively, of costs associated with the defense of certain Well Site Services segment patents related to proprietary technologies. Additionally, during the three months ended March 31, 2024 the segment incurred $0.7 million in costs associated with consolidation and exit of three facilities.
(4)	Operating loss for the three months ended March 31, 2024 included a non-cash goodwill impairment charge of $10.0 million, recognized in connection with the first quarter 2024 segment realignment .

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL INFORMATION ADJUSTED EBITDA (A) (In Thousands) (Unaudited)

	Three Months Ended
	March 31, 2024			December 31, 2023		March 31, 2023

Net income (loss)	$	(13,374	)	$	5,963	$	2,158
Interest expense, net		2,101			1,811		2,391
Income tax provision		24			233		1,602
Depreciation and amortization expense		14,195			14,569		15,256
Impairment of goodwill		10,000			—		—
Facility consolidation and other charges		2,509			1,402		—
Adjusted EBITDA	$	15,455		$	23,978	$	21,407

________________

(A)

The term Adjusted EBITDA consists of net income (loss) plus net interest expense, taxes, depreciation and amortization expense, impairment of goodwill, and facility consolidation and other charges. Adjusted EBITDA is not a measure of financial performance under generally accepted accounting principles (“GAAP”) and should not be considered in isolation from or as a substitute for net income (loss) or cash flow measures prepared in accordance with GAAP or as a measure of profitability or liquidity. Additionally, Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. The Company has included Adjusted EBITDA as a supplemental disclosure because its management believes that Adjusted EBITDA provides useful information regarding its 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 Adjusted EBITDA to compare and to monitor the performance of the Company and 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 table above sets forth reconciliations of Adjusted EBITDA to net income (loss), which is the most directly comparable measure of financial performance calculated under GAAP.

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL INFORMATION ADJUSTED SEGMENT EBITDA (B) (In Thousands) (Unaudited)

	Three Months Ended
	March 31, 2024			December 31, 2023			March 31, 2023
Offshore Manufactured Products:
Operating income	$	10,603		$	24,167		$	7,698
Other income, net		41			44			165
Depreciation and amortization expense		3,693			3,802			4,075
Facility consolidation and other charges		1,463			825			—
Adjusted Segment EBITDA	$	15,800		$	28,838		$	11,938

Well Site Services:
Operating income (loss)	$	(419	)	$	(1,102	)	$	6,966
Other income (expense), net		(113	)		133			111
Depreciation and amortization expense		6,079			6,295			6,146
Facility consolidation and other charges		1,046			577			—
Adjusted Segment EBITDA	$	6,593		$	5,903		$	13,223

Downhole Technologies:
Operating income (loss)	$	(12,079	)	$	(5,726	)	$	1,873
Depreciation and amortization expense		4,270			4,306			4,868
Impairment of goodwill		10,000			—			—
Adjusted Segment EBITDA	$	2,191		$	(1,420	)	$	6,741

Corporate:
Operating loss	$	(9,282	)	$	(9,509	)	$	(10,662	)
Depreciation and amortization expense		153			166			167
Adjusted Segment EBITDA	$	(9,129	)	$	(9,343	)	$	(10,495	)

________________

(B)

The term Adjusted Segment EBITDA consists of operating income (loss) plus other income (expense), depreciation and amortization expense, impairment of goodwill, and facility consolidation and other charges. Adjusted Segment EBITDA is not a measure of financial performance under GAAP and should not be considered in isolation from or as a substitute for operating income (loss) or cash flow measures prepared in accordance with GAAP or as a measure of profitability or liquidity. Additionally, Adjusted Segment EBITDA may not be comparable to other similarly titled measures of other companies. The Company has included Adjusted Segment EBITDA as supplemental disclosure because its management believes that Adjusted Segment EBITDA provides useful information regarding its 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 Adjusted Segment 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 table above sets forth reconciliations of Adjusted Segment EBITDA to operating income (loss), which is the most directly comparable measure of financial performance calculated under GAAP.

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL INFORMATION NET INCOME (LOSS), EXCLUDING CHARGES (C) AND DILUTED EARNINGS (LOSS) PER SHARE, EXCLUDING CHARGES (D) (In Thousands, Except Per Share Amounts) (Unaudited)

	Three Months Ended
	March 31, 2024			December 31, 2023			March 31, 2023

Net income (loss)	$	(13,374	)	$	5,963		$	2,158
Impairment of goodwill		10,000			—			—
Facility consolidation and other charges		2,509			1,402			—
Total adjustments, before taxes		12,509			1,402			—
Tax benefit		(1,008	)		(294	)		—
Total adjustments, net of taxes		11,501			1,108			—
Net income (loss), excluding charges	$	(1,873	)	$	7,071		$	2,158

Weighted average number of common shares outstanding:
Basic		62,503			62,483			62,825
Diluted		62,503			63,004			63,072

Net income (loss) per share, excluding charges:
Basic	$	(0.03	)	$	0.11		$	0.03
Diluted		(0.03	)		0.11			0.03

________________
(C)	Net income (loss), excluding charges consists of net income (loss) plus impairment of goodwill and facility consolidation and other charges. Net income (loss), excluding charges is not a measure of financial performance under GAAP and should not be considered in isolation from or as a substitute for net income (loss) as prepared in accordance with GAAP. The Company has included net income (loss), excluding charges as a supplemental disclosure because its management believes that net income (loss), excluding charges provides investors a helpful measure for comparing its operating performance with previous and subsequent periods.
(D)	Net income (loss) per share, excluding charges is calculated as net income (loss), excluding charges divided by the weighted average number of common shares outstanding. Net income (loss) per share, excluding charges is not a measure of financial performance under GAAP and should not be considered in isolation from or as a substitute for net income (loss) per share as prepared in accordance with GAAP. The Company has included net income (loss) per share, excluding charges as a supplemental disclosure because its management believes that net income (loss) per share, excluding charges provides investors a helpful measure for comparing its operating performance with previous and subsequent periods.

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES 2023 RECAST SEGMENT DATA (In Thousands) (Unaudited) The following tables provide unaudited quarterly and full-year 2023 segment financial, backlog and other information – conformed with the revised first quarter 2024 segment presentation.

	Three Months Ended
	March 31, 2023			June 30, 2023			September 30, 2023			December 31, 2023			Full-Year 2023
Revenues:
Offshore Manufactured Products
Project-driven:
Products	$	48,617		$	45,455		$	58,169		$	82,839		$	235,080
Services		24,630			24,846			30,391			32,875			112,742
		73,247			70,301			88,560			115,714			347,822
Military and other products		7,258			8,346			7,510			10,775			33,889
Total Offshore Manufactured Products		80,505			78,647			96,070			126,489			381,711
Well Site Services		67,058			64,536			59,831			51,208			242,633
Downhole Technologies		48,636			40,346			38,388			30,569			157,939
Total revenues	$	196,199		$	183,529		$	194,289		$	208,266		$	782,283

Operating income (loss):
Offshore Manufactured Products	$	7,698		$	8,838		$	15,586		$	24,167		$	56,289
Well Site Services		6,966			4,732			3,285			(1,102	)		13,881
Downhole Technologies		1,873			(121	)		(1,900	)		(5,726	)		(5,874	)
Corporate		(10,662	)		(10,180	)		(10,781	)		(9,509	)		(41,132	)
Total operating income (loss)	$	5,875		$	3,269		$	6,190		$	7,830		$	23,164

Adjusted Segment EBITDA^(B):
Offshore Manufactured Products	$	11,938		$	12,994		$	21,708		$	28,838		$	75,478
Well Site Services		13,223			11,425			9,716			5,903			40,267
Downhole Technologies		6,741			4,626			2,646			(1,420	)		12,593
Corporate		(10,495	)		(10,029	)		(10,629	)		(9,343	)		(40,496	)
Total Adjusted EBITDA^(A)	$	21,407		$	19,016		$	23,441		$	23,978		$	87,842

Capital expenditures:
Offshore Manufactured Products	$	359		$	4,587		$	2,712		$	1,577		$	9,235
Well Site Services		5,772			5,672			2,602			5,079			19,125
Downhole Technologies		425			246			568			586			1,825
Corporate		12			265			150			41			468
Total capital expenditures	$	6,568		$	10,770		$	6,032		$	7,283		$	30,653

Assets:
Offshore Manufactured Products	$	502,263		$	495,983		$	495,440		$	521,923		$	521,923
Well Site Services		212,415			204,437			201,384			191,630			191,630
Downhole Technologies		302,271			292,047			287,152			278,151			278,151
Corporate		33,188			52,553			64,044			54,782			54,782
Total assets	$	1,050,137		$	1,045,020		$	1,048,020		$	1,046,486		$	1,046,486

Offshore Manufactured Products Backlog	$	316,473		$	327,705		$	341,153		$	327,048		$	327,048

OIL STATES INTERNATIONAL, INC. AND SUBSIDIARIES 2023 RECAST RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION ADJUSTED SEGMENT EBITDA (B) (In Thousands) (Unaudited)

	Three Months Ended
	March 31, 2023			June 30, 2023			September 30, 2023			December 31, 2023			Full-Year 2023
Offshore Manufactured Products:
Operating income	$	7,698		$	8,838		$	15,586		$	24,167		$	56,289
Other income, net		165			81			68			44			358
Depreciation and amortization expense		4,075			4,075			4,405			3,802			16,357
Facility consolidation and other charges		—			—			1,649			825			2,474
Adjusted Segment EBITDA	$	11,938		$	12,994		$	21,708		$	28,838		$	75,478

Well Site Services:
Operating income (loss)	$	6,966		$	4,732		$	3,285		$	(1,102	)	$	13,881
Other income, net		111			129			118			133			491
Depreciation and amortization expense		6,146			6,564			6,313			6,295			25,318
Patent defense costs		—			—			—			577			577
Adjusted Segment EBITDA	$	13,223		$	11,425		$	9,716		$	5,903		$	40,267

Downhole Technologies:
Operating income (loss)	$	1,873		$	(121	)	$	(1,900	)	$	(5,726	)	$	(5,874	)
Depreciation and amortization expense		4,868			4,747			4,546			4,306			18,467
Adjusted Segment EBITDA	$	6,741		$	4,626		$	2,646		$	(1,420	)	$	12,593

Corporate:
Operating loss	$	(10,662	)	$	(10,180	)	$	(10,781	)	$	(9,509	)	$	(41,132	)
Depreciation and amortization expense		167			151			152			166			636
Adjusted Segment EBITDA	$	(10,495	)	$	(10,029	)	$	(10,629	)	$	(9,343	)	$	(40,496	)