- Revenue: $165 million for the fourth quarter.
- Adjusted Consolidated EBITDA: $19 million for the fourth quarter.
- Adjusted Net Income: $5.5 million or $0.09 per share, excluding a $15.3 million gain from a facility sale and $3.1 million in restructuring charges.
- Offshore Manufactured Product Segment Revenue: $107 million, a 5% sequential increase.
- Offshore Manufactured Product Segment EBITDA: $25 million, with a 23% EBITDA margin.
- Completion and Production Services Segment Revenue: $30 million.
- Completion and Production Services Segment EBITDA: $3.5 million, with a 12% adjusted EBITDA margin.
- Downhole Technology Segment Revenue: $27 million, with break-even adjusted segment EBITDA.
- Cash Flow from Operations: $18 million for the quarter.
- Capital Expenditures (CapEx): $14 million, partially customer-funded.
- Common Stock Repurchase: $9 million during the quarter.
- Full-Year 2025 Revenue Guidance: $700 million to $735 million.
- Full-Year 2025 EBITDA Guidance: $88 million to $93 million.
- First-Quarter 2025 Revenue Guidance: $160 million to $170 million.
- First-Quarter 2025 EBITDA Guidance: $17.5 million to $18.5 million.
- 2025 Cash Flow from Operations Guidance: $65 million to $75 million.
- 2025 CapEx Guidance: Approximately $25 million.
- Warning! GuruFocus has detected 3 Warning Sign with OIS.
Release Date: February 21, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Oil States International Inc (NYSE:OIS) reported strong demand in offshore and international sectors, contributing to 72% of consolidated revenues.
- The company completed the sale of a previously idled facility, netting cash proceeds of $24.8 million and a pre-tax gain of $15.3 million.
- OIS generated $18 million in cash flows from operations during the quarter and repurchased $9 million of common stock.
- The Offshore Manufactured Product segment grew 5% sequentially, with revenues of $107 million and an adjusted segment EBITDA margin of 23%.
- OIS expects strong free cash flows in 2025, allowing for further shareholder returns and strategic investments in profitable business areas.
Negative Points
- US land-driven operations faced challenges due to a declining frac spread count and typical fourth-quarter seasonality.
- The completion and production services segment saw a 5% sequential revenue decline, excluding the impact of exited operations.
- The downhole technology segment reported break-even adjusted segment EBITDA for the fourth quarter.
- OIS incurred $3.1 million in restructuring charges related to US land-based operations and facility closures.
- Domestic market conditions and activity levels are expected to remain relatively flat throughout 2025.
Q & A Highlights
Q: Are you focused on buybacks over debt reduction at this point? How do you think about the allocation of the free cash? A: Cynthia Taylor, President and CEO, stated that the company feels comfortable with its current debt levels and is focusing on shareholder returns. They executed share repurchases in Q4 and are not concerned with the level of debt, which was roughly $45 million in January after some large receivables were collected.
Q: Can you give us a sense of the revenue opportunity you have on the FPSO side? A: Cynthia Taylor explained that revenue growth in their Offshore Manufactured Products business is grounded on existing backlog and bidding activity, particularly in South America. The revenue opportunity for FPSOs can vary greatly, but key connectors could range from $15 million to $25 million in order of magnitude.
Q: How do you think about the margin profile in completion and production for 2025 given what happened in 2024? A: Cynthia Taylor mentioned that they are aiming to improve EBITDA margins to the 19% to 20% range in 2025. The mix will shift to more international and offshore business, which generally has higher margins, and the drag from low-margin businesses has been removed.
Q: Can you provide more color on the international and offshore opportunities and how they differentiate? A: Cynthia Taylor highlighted that their connection technology for production facilities is driven by regions like Brazil and Guyana. They expect to take on incremental market share in Southeast Asia with their new facility in Batam and have active bids for large OD conductor casing connectors in the region.
Q: How do you think about the trajectory of US land activity going forward? A: Cynthia Taylor noted that they have seen a lift in activity as early as January and are selective with their product offering on land, focusing on high-end and region-specific operations. They are introducing new technology, such as active seat gate valves and automation equipment, to gain market share.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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