Second Quarter Highlights:

• Reports net loss per diluted share of $0.23; $0.22 adjusted net loss per diluted share excluding severance and other downsizing charges
• Offshore products EBITDA margins averaged 20.1%
• Offshore products book-to-bill ratio totaled 0.75x
• Reduced total debt by $6 million

HOUSTON, July 26, 2016 (GLOBE NEWSWIRE) -- Oil States International, Inc. (NYSE:OIS) reported a net loss for the second quarter ended June 30, 2016 of $11.7 million, or $0.23 per diluted share, which included pre-tax charges of $1.1 million ($0.7 million after-tax, or $0.01 per diluted share) for severance and other downsizing charges. These results compare to reported net income for the second quarter ended June 30, 2015 of $6.1 million, or $0.12 per diluted share, which included pre-tax charges of $1.7 million ($1.4 million after-tax, or $0.03 per diluted share) for severance and other downsizing charges.

During the second quarter of 2016, the Company generated revenues of $175.8 million and Adjusted Consolidated EBITDA (Note B) of $13.5 million (excluding $1.1 million for severance and other downsizing charges). These results compare to revenues of $269.3 million and Adjusted Consolidated EBITDA of $43.2 million reported in the second quarter of 2015 (excluding $1.7 million of severance and other downsizing charges). 

For the first half of 2016, the Company reported revenues of $345.5 million and Adjusted Consolidated EBITDA of $25.7 million (excluding $2.7 million of severance and other downsizing charges). The net loss for the first half of 2016 totaled $24.9 million and included $2.7 million ($1.7 million after-tax, or $0.03 per diluted share) of severance and other downsizing charges. For the first half of 2015, the Company reported revenues of $606.6 million and Adjusted Consolidated EBITDA of $112.1 million (excluding $3.8 million of severance and other downsizing charges). Net income for the first half of 2015 totaled $25.6 million and included $3.8 million ($2.6 million after-tax, or $0.05 per diluted share) of severance and other downsizing charges in addition to a higher effective tax rate.

Oil States’ President and Chief Executive Officer, Cindy B. Taylor, stated, “Despite the 23% sequential quarterly decline in the average U.S. rig count, our well site services revenue was only down 7% and our consolidated revenue actually improved 4%. Starting later in the second quarter, we began to see some encouraging signs that activity was troughing for U.S. lower 48 drilling and completion work, and that activity could actually be starting to recover. Evidencing this trend, the average price per barrel of WTI improved 36% sequentially in the second quarter and the current U.S. rig count has increased 14% from its low point in May 2016. However, the WTI crude price has pulled back about 11% since the end of the quarter to its current level of approximately $43 per barrel. The impact of this recent decline in commodity prices on customer perception and spending will become apparent in the following months.”

BUSINESS SEGMENT RESULTS

Offshore Products
Offshore products generated revenues and Segment EBITDA (Note A) of $135.2 million and $27.2 million, respectively, in the second quarter of 2016 compared to revenues of $183.1 million and Segment EBITDA of $40.9 million in the second quarter of 2015. Offshore products revenues and Segment EBITDA decreased 26% and 33% year-over-year, respectively, due to lower contributions across most of the segment’s product and service lines. The lower quarterly revenues were primarily the result of reductions in production-related products, lower levels of service activities, weaker demand for drilling products and a backlog position that has trended lower since mid-2014, partially offset by improved subsea pipeline product revenues. Segment EBITDA margins were 20.1% in the second quarter of 2016 compared to 22.3% realized in the second quarter of 2015.  Backlog declined 12% sequentially, totaling $268 million at June 30, 2016 compared to $306 million reported at March 31, 2016 and $409 million reported at June 30, 2015. Major backlog additions during the second quarter included orders for pipeline products destined for the Middle East and replacement equipment on a Gulf of Mexico production facility.  

Well Site Services
Well site services generated revenues of $40.7 million and a Segment EBITDA loss of $3.6 million in the second quarter of 2016 compared to revenues and Segment EBITDA of $86.1 million and $11.1 million, respectively, in the second quarter of 2015.  Well site services revenues and Segment EBITDA decreased 53% and 132% year-over-year, respectively, primarily due to a 57% year-over-year decrease in the number of completion services jobs performed, partially offset by a 25% year-over-year increase in revenue per completion service job primarily as a result of a mix shift to more long-duration jobs in international markets and longer-term project work in the U.S. Gulf of Mexico. The segment’s second quarter 2016 results continued to be negatively impacted by extreme competitive pressures and depressed activity levels in the U.S. shale basins. However, while still negative, second quarter 2016 Segment EBITDA improved sequentially in our completion services business line. Lower utilization in the land drilling business, which averaged 9% in the second quarter of 2016 compared to 34% in the second quarter of 2015, also negatively impacted results. However, we did experience a quarterly sequential improvement in our land drilling utilization for the first time since the second quarter of 2014.

Income Taxes
The Company recognized an effective tax rate benefit of 35.5% in the second quarter of 2016. This compares to an effective tax rate provision of 19.0% reported in the second quarter of 2015. The lower effective tax rate in the second quarter of 2015 was primarily due to significantly lower domestic earnings stemming from the industry downturn.

Financial Condition
The Company invested $8.1 million in capital expenditures during the second quarter of 2016. Capital expenditures made during the second quarter included expansionary investments for certain offshore products facilities along with maintenance capital spent on completion services equipment.

As of June 30, 2016, $80.4 million was outstanding under the Company’s revolving credit facility. Total availability under the facility as of June 30, 2016 was $283.2 million (net of standby letters of credit totaling $32.5 million).

Conference Call Information
The call is scheduled for Wednesday, July 27, 2016 at 12:00 pm ET, is being webcast and can be accessed from the Company’s website at http://www.oilstatesintl.com. Participants may also join the conference call by dialing (800) 447-0521 in the United States or by dialing +1 847 413 3238 internationally and using the passcode 42972261. A replay of the conference call will be available one and a half hours after the completion of the call by dialing (888) 843-7419 in the United States or by dialing +1 630 652 3042 internationally and entering the passcode 42972261.

About Oil States
Oil States International, Inc. is an energy services company with a leading market position as a manufacturer of products for deepwater production facilities and certain drilling equipment, as well as a provider of completion services 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. 

Forward Looking Statements
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 are 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 energy service industry and other factors discussed in the "Business" and "Risk Factors" sections of the Form 10-K for the year ended December 31, 2015 filed by Oil States with the Securities and Exchange Commission on February 22, 2016.

(1) As of June 30, 2016, the Company had approximately $283.2 million available under its revolving credit facility.

(1) Operating (loss) income for the three and six months ended June 30, 2016 included severance and other downsizing charges of $0.2 million and $1.2 million, respectively, related to the completion services business and $0.8 million and $1.5 million, respectively, related to the offshore products segment.

(2) Operating (loss) income for the three and six months ended June 30, 2015 included severance and other downsizing charges of $0.8 million and $1.9 million, respectively, related to the completion services business and $1.0 million and $2.0 million, respectively, related to the offshore products segment.

(A) The terms Segment EBITDA and Adjusted Segment EBITDA consist of operating (loss) income plus depreciation and amortization expense, and certain other items.  Segment EBITDA and Adjusted Segment EBITDA is not a measure of financial performance under generally accepted accounting principles and should not be considered in isolation from or as a substitute for operating (loss) income or cash flow measures prepared in accordance with generally accepted accounting principles or as a measure of profitability or liquidity.  Additionally, Segment EBITDA and Adjusted Segment EBITDA may not be comparable to other similarly titled measures of other companies.  The Company has included Segment EBITDA and Adjusted Segment EBITDA as a supplemental disclosure because its management believes that Segment EBITDA and Adjusted Segment EBITDA provide 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 Segment EBITDA and 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 a reconciliation of Segment EBITDA and Adjusted Segment EBITDA to operating (loss) income, which is the most directly comparable measure of financial performance calculated under generally accepted accounting principles. 

(3) Adjustments to Consolidated EBITDA for the three and six months ended June 30, 2016 included severance and other downsizing charges of $0.2 million and $1.2 million, respectively, related to the completion services business and $0.8 million and $1.5 million, respectively, related to the offshore products segment.

(4) Adjustments to Consolidated EBITDA for the three and six months ended June 30, 2015 included severance and other downsizing charges of $0.8 million and $1.9 million, respectively, related to the completion services business and $1.0 million and $2.0 million, respectively, related to the offshore products segment.

(B) The terms Consolidated EBITDA and Adjusted Consolidated EBITDA consist of net (loss) income plus net interest expense, taxes, depreciation and amortization expense, and certain other items.  Consolidated EBITDA and Adjusted Consolidated EBITDA is not a measure of financial performance under generally accepted accounting principles and should not be considered in isolation from or as a substitute for net (loss) income from continuing operations or cash flow measures prepared in accordance with generally accepted accounting principles or as a measure of profitability or liquidity.  Additionally, Consolidated EBITDA and Adjusted Consolidated EBITDA may not be comparable to other similarly titled measures of other companies.  The Company has included Consolidated EBITDA and Adjusted Consolidated EBITDA as a supplemental disclosure because its management believes that Consolidated EBITDA and Adjusted Consolidated EBITDA provide 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 Consolidated EBITDA and Adjusted Consolidated 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 a reconciliation of Consolidated EBITDA and Adjusted Consolidated EBITDA to net (loss) income from continuing operations, which is the most directly comparable measure of financial performance calculated under generally accepted accounting principles.  

Company Contact:      
Lloyd A. Hajdik
Oil States International, Inc.
Executive Vice President, Chief Financial Officer and Treasurer 
713-652-0582

Patricia Gil
Oil States International, Inc.
Investor Relations
713-470-4860