Part I [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) For the nine months ended September 30, 2023, Oil States International reported a net income of $6.9 million, a significant turnaround from a net loss of $12.4 million in the same period of 2022, driven by a 7% increase in revenues to $574.0 million, with total assets of $1.05 billion and strong operating cash flow of $52.4 million | Financial Metric | Nine Months Ended Sep 30, 2023 (in thousands) | Nine Months Ended Sep 30, 2022 (in thousands) | | :--- | :--- | :--- | | **Total Revenues** | $574,017 | $535,272 | | **Operating Income (Loss)** | $15,334 | $(368) | | **Net Income (Loss)** | $6,928 | $(12,425) | | **Diluted EPS** | $0.11 | $(0.20) | | Balance Sheet Item | As of Sep 30, 2023 (in thousands) | As of Dec 31, 2022 (in thousands) | | :--- | :--- | :--- | | **Cash and cash equivalents** | $52,904 | $42,018 | | **Total Assets** | $1,048,020 | $1,064,392 | | **Total Liabilities** | $349,656 | $374,834 | | **Total Stockholders' Equity** | $698,364 | $689,558 | | Cash Flow Activity | Nine Months Ended Sep 30, 2023 (in thousands) | Nine Months Ended Sep 30, 2022 (in thousands) | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | $52,377 | $18,993 | | **Net Cash used in Investing Activities** | $(19,116) | $(19,345) | | **Net Cash used in Financing Activities** | $(22,705) | $(17,896) | [Management's Discussion and Analysis (MD&A)](index=19&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the improved financial performance in 2023 to increased customer capital investments and internal cost controls, with the Offshore/Manufactured Products segment benefiting from growth in international offshore projects and a strong liquidity position maintained with $52.9 million in cash and $84.5 million available under its ABL facility [Business Overview and Outlook](index=20&type=section&id=Business%20Overview%20and%20Outlook) The company's business is cyclical and dependent on oil and gas industry activity, with the Offshore/Manufactured Products segment's backlog growing to $348 million, while U.S. land-based segments are affected by a lower U.S. rig count - The Offshore/Manufactured Products segment backlog increased to **$348 million** as of September 30, 2023, up from **$308 million** at the end of 2022 and **$258 million** a year prior[91](index=91&type=chunk) - Bookings for the Offshore/Manufactured Products segment were strong, with a **book-to-bill ratio of 1.2x** for both Q3 2023 and year-to-date[91](index=91&type=chunk) - The average U.S. rig count declined to **649 in Q3 2023** from **761 in Q3 2022**, impacting demand for completion-related products and services[95](index=95&type=chunk) [Results of Operations](index=23&type=section&id=Results%20of%20Operations) In Q3 2023, consolidated revenues rose 3% year-over-year to $194.3 million, while net income nearly doubled to $4.2 million, with the Offshore/Manufactured Products segment driving growth and offsetting declines in Downhole Technologies | Metric (Q3 2023 vs Q3 2022) | Q3 2023 (in thousands) | Q3 2022 (in thousands) | Change | | :--- | :--- | :--- | :--- | | **Total Revenues** | $194,289 | $189,394 | +3% | | **Operating Income** | $6,190 | $5,058 | +22% | | **Net Income** | $4,212 | $2,143 | +96% | | Metric (9M 2023 vs 9M 2022) | 9M 2023 (in thousands) | 9M 2022 (in thousands) | Change | | :--- | :--- | :--- | :--- | | **Total Revenues** | $574,017 | $535,272 | +7% | | **Operating Income (Loss)** | $15,334 | $(368) | N/A | | **Net Income (Loss)** | $6,928 | $(12,425) | N/A | - Q3 2023 results included **$1.6 million** in facility consolidation charges, while Q3 2022 results included a **$6.1 million** gain from a litigation settlement[106](index=106&type=chunk) [Segment Operating Results](index=26&type=section&id=Segment%20Operating%20Results) For Q3 2023, the Offshore/Manufactured Products segment's revenue grew 16% YoY to $111.0 million, with operating income increasing to $17.8 million, while Downhole Technologies' revenue fell 29% to $23.4 million, resulting in an operating loss of $4.1 million - **Offshore/Manufactured Products:** Q3 revenue increased **16% YoY** to **$111.0 million**, driven by backlog conversion and higher service sales, with operating income growing to **$17.8 million** despite a **$1.6 million** consolidation charge[120](index=120&type=chunk)[121](index=121&type=chunk) - **Well Site Services:** Q3 revenue decreased **1% YoY** to **$59.9 million**, but operating income improved from **$2.4 million** to **$3.3 million** due to a favorable service mix[123](index=123&type=chunk)[124](index=124&type=chunk) - **Downhole Technologies:** Q3 revenue declined **29% YoY** to **$23.4 million** due to lower U.S. customer activity, leading to an operating loss of **$4.1 million** compared to a **$0.3 million** loss in Q3 2022[125](index=125&type=chunk)[126](index=126&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%2C%20Capital%20Resources%20and%20Other%20Matters) The company's liquidity remains strong, with cash increasing to $52.9 million at quarter-end, year-to-date operating cash flow of $52.4 million, and no borrowings under the ABL facility, which had $84.5 million of availability - Cash and cash equivalents increased to **$52.9 million** as of September 30, 2023, from **$42.0 million** at December 31, 2022[160](index=160&type=chunk) - In February 2023, the company repaid the outstanding **$17.3 million** principal of its 1.50% convertible senior notes due 2023[169](index=169&type=chunk) - As of September 30, 2023, the company had **$84.5 million** available to be drawn under its ABL Facility and was in compliance with all debt covenants[46](index=46&type=chunk)[166](index=166&type=chunk) - A new **$25.0 million** stock repurchase program was authorized in February 2023, with **$3.0 million** used for repurchases during the first nine months of the year[163](index=163&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's main market risks are interest rate fluctuations on its ABL facility and foreign currency exchange rate volatility, with no outstanding floating-rate borrowings and an accumulated other comprehensive loss of $77.3 million from international operations - The primary market risks are exposure to changes in **interest rates** and **foreign currency exchange rates**[175](index=175&type=chunk) - Interest rate risk is tied to the ABL Facility, which had **no floating-rate obligations outstanding** as of September 30, 2023[176](index=176&type=chunk) - Foreign currency exchange rate risk from international operations resulted in an accumulated other comprehensive loss of **$77.3 million** as of September 30, 2023[178](index=178&type=chunk) [Controls and Procedures](index=34&type=section&id=Item%204.%20Controls%20and%20Procedures) Based on management's evaluation, the company's disclosure controls and procedures were deemed effective as of September 30, 2023, despite internal control modifications due to an ERP system migration in the Downhole Technologies segment - The CEO and CFO concluded that the company's **disclosure controls and procedures were effective** as of September 30, 2023[179](index=179&type=chunk) - Internal controls were modified for an **ERP system migration** in the Downhole Technologies segment, which was not considered a material change[180](index=180&type=chunk) Part II [Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) The company updated its risk factors to include a new material risk related to adverse developments in the financial services industry, highlighting potential impacts from events like bank failures or market liquidity problems on its access to funds, financing, and customer/supplier stability - A new risk factor was added concerning **adverse developments in the financial services industry**, such as liquidity issues or bank failures[185](index=185&type=chunk) - Potential impacts include **delayed access to deposits**, **inability to secure credit**, and **breach of contractual obligations**[188](index=188&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the third quarter of 2023, the company did not repurchase any equity securities, with approximately $22.0 million remaining available under the $25.0 million share repurchase program authorized in February 2023 - **No shares were repurchased** during the three-month period ended September 30, 2023[189](index=189&type=chunk) - As of September 30, 2023, **$22.0 million remained available** for share repurchases under the current authorization which extends through February 2025[190](index=190&type=chunk)[189](index=189&type=chunk)

Financial Data and Key Metrics Changes - Reported revenues for Q2 2023 were $184 million, adjusted consolidated EBITDA was $19 million, and net income was $1 million or $0.01 per share, marking the fourth consecutive quarter of positive net income [5][3] - Revenues and adjusted EBITDA increased year-over-year but declined sequentially by 6% and 11% respectively due to timing of activities in U.S. shale basins and delays in project conversions [3][11] - Backlog totaled $338 million at June 30, an increase of 40% from June 30, 2022, representing the highest backlog level since Q4 2015 [6][8] Business Line Data and Key Metrics Changes - Offshore/Manufactured Products segment generated revenues of $94 million with an EBITDA margin of 17%, a slight increase from 16.2% in Q1 [14] - Well Site Services segment reported revenues of $65 million and an EBITDA margin of 18%, down from 20% in Q1, primarily due to project delays [15] - Downhole Technologies segment had revenues of $25 million, an operating loss of $3 million, and an EBITDA of $2 million, affected by reduced customer demand [16] Market Data and Key Metrics Changes - Activity in the Gulf of Mexico was impacted by third-party intervention vessels being temporarily out of service, but international operations showed improvement due to higher customer activity [7][11] - The U.S. land activities have softened, but there are indications of a potential bottoming out in the market [28][39] Company Strategy and Development Direction - The company remains focused on optimizing operations and pursuing profitable activities in both U.S. and international markets, with an emphasis on technology leadership and value-added services [29][33] - The investment cycle is expected to extend beyond the next couple of years, supported by backlog growth and new product introductions [12][35] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the ongoing recovery in offshore and international drilling, despite challenges in U.S. shale basins [3][11] - The company anticipates continued growth in the Offshore/Manufactured Products segment in the second half of 2023, driven by strong order flow and backlog [40][41] Other Important Information - The company generated strong cash flow from operations of $45 million in Q2 and repaid all amounts outstanding under its revolving credit facility, maintaining a strong financial position with cash on hand of $42 million [12][8] - Capital expenditures for 2023 are expected to be approximately $28 million, depending on market conditions [8] Q&A Session All Questions and Answers Question: What is the outlook for margin progression in the Offshore/Manufactured Products business? - Management indicated that margins are expected to improve in the second half of the year, supported by backlog development and a favorable mix of projects [34] Question: Are there any signs of a bottoming out in the market? - Management noted that while there has been a softening in U.S. land activities, customer conversations suggest that there is not a further decline expected from current levels [37] Question: How will the company address the challenges faced in the second quarter? - Management acknowledged that the challenges were largely timing-related and expressed confidence in recovering margins as operations normalize and backlog is converted into revenue [38]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________ FORM 10-Q ____________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission file number: 001-16337 OIL STATES INTERNATIONAL, INC. (Exact name of registrant as specified in its ch ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________ FORM 10-Q ____________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission file number: 001-16337 OIL STATES INTERNATIONAL, INC. (Exact name of registrant as ...

PART I [Cautionary Statement Regarding Forward-Looking Statements](index=4&type=section&id=Cautionary%20Statement%20Regarding%20Forward-Looking%20Statements) This section highlights that the Annual Report on Form 10-K contains forward-looking statements, which are subject to various important factors and risks that could cause actual results to differ materially from projections. - Forward-looking statements are identified by words like 'may,' 'will,' 'could,' 'project,' 'believe,' 'anticipate,' 'expect,' 'estimate,' 'potential,' 'plan,' 'forecast,' 'proposed,' 'should,' 'seek,' and similar terms, relating to future financial position, budgets, capital expenditures, projected costs, plans, and strategic transactions[12](index=12&type=chunk) - Important factors that could cause actual results to differ materially include geopolitical conflicts, commodity price fluctuations, industry cyclicality, environmental regulations, supply chain disruptions, and global economic conditions[13](index=13&type=chunk) [Business Overview](index=5&type=section&id=Item%201.%20Business) Oil States International, Inc. is a global provider of manufactured products and services to the energy, industrial, and military sectors, operating through three segments. - Oil States International, Inc. is a global provider of manufactured products and services to the energy, industrial, and military sectors, headquartered in Houston, Texas[16](index=16&type=chunk) - The company operates through three business segments: Offshore/Manufactured Products, Well Site Services, and Downhole Technologies, maintaining leadership positions in certain product and service offerings[16](index=16&type=chunk) - Business strategy involves organic growth, capital spending, strategic acquisitions, and investments in research and development to expand market share and enhance cash flows[18](index=18&type=chunk) - Demand for products and services increased in 2022 from 2020 lows due to waning COVID-19 impact and increased customer capital investments, leading to improved operating results[20](index=20&type=chunk) Consolidated Operating Results (2020-2022) | Metric | 2022 ($ thousands) | 2021 ($ thousands) | 2020 ($ thousands) | 2022 vs 2021 Change ($ thousands) | 2021 vs 2020 Change ($ thousands) | | :----- | :----------------- | :----------------- | :----------------- | :-------------------------------- | :-------------------------------- | | Revenues | 737,706 | 573,161 | 638,075 | 164,545 | (64,914) | | Operating income (loss) | 2,905 | (64,792) | (534,340) | 67,697 | 469,548 | - In January 2022, the Well Site Services segment exited underperforming domestic service lines, which generated approximately **$20 million in revenues in 2021**, improving segment margins for 2022[22](index=22&type=chunk) - In April 2022, the Offshore/Manufactured Products segment acquired E-Flow Control Holdings Limited for **$8.1 million** (net of cash), a global provider of integrated handling, control, monitoring, and instrumentation solutions[24](index=24&type=chunk) - In July 2022, the company settled disputes with the seller of GEODynamics, Inc. for **$10.0 million cash** and **1.9 million shares of common stock**, fully settling a **$19.7 million promissory note**[25](index=25&type=chunk) - In August 2022, the Offshore/Manufactured Products segment settled litigation, recognizing a gain of **$6.1 million**[26](index=26&type=chunk) [Our Company](index=5&type=section&id=Our%20Company) Oil States International, Inc. is a global provider of manufactured products and services to the energy, industrial, and military sectors, operating through three segments. - Oil States International, Inc. is a global provider of manufactured products and services to the energy, industrial and military sectors[16](index=16&type=chunk) - The company operates through three business segments: Offshore/Manufactured Products, Well Site Services and Downhole Technologies[16](index=16&type=chunk) [Available Information](index=5&type=section&id=Available%20Information) The company makes its SEC filings, including 10-K, 10-Q, 8-K, and proxy statements, available free of charge on its website and through the SEC's website. - Company's website (www.oilstatesintl.com) provides free access to SEC filings (10-K, 10-Q, 8-K, proxy statements) and corporate governance policies[17](index=17&type=chunk) - Filings are also available through the SEC's website at www.sec.gov[17](index=17&type=chunk) [Our Business Strategy](index=5&type=section&id=Our%20Business%20Strategy) The company's long-term strategy involves organic growth, strategic acquisitions, and investments in research and development to expand market share and enhance stockholder returns. - The company's business strategy focuses on organic growth, strategic acquisitions, and investments in research and development[18](index=18&type=chunk) - Goals include expanding market share through new and existing technology, enhancing cash flows, leveraging cost structure, and increasing stockholders' returns[18](index=18&type=chunk)[19](index=19&type=chunk) [Recent Developments](index=6&type=section&id=Recent%20Developments) Demand for products and services increased in 2022 due to waning COVID-19 impacts and increased customer capital investments, leading to improved operating results. - Demand for most products and services increased from 2020 lows due to waning COVID-19 impact and increased customer capital investments, leading to improved consolidated operating results[20](index=20&type=chunk) Consolidated Operating Results (2020-2022) | Metric | 2022 ($ thousands) | 2021 ($ thousands) | 2020 ($ thousands) | 2022 vs 2021 Change ($ thousands) | 2021 vs 2020 Change ($ thousands) | | :----- | :----------------- | :----------------- | :----------------- | :-------------------------------- | :-------------------------------- | | Revenues | 737,706 | 573,161 | 638,075 | 164,545 | (64,914) | | Operating income (loss) | 2,905 | (64,792) | (534,340) | 67,697 | 469,548 | - Well Site Services segment exited underperforming domestic service lines in January 2022, which generated approximately **$20 million in revenues in 2021**, improving segment margins[22](index=22&type=chunk) - Offshore/Manufactured Products segment acquired E-Flow Control Holdings Limited in April 2022 for **$8.1 million** (net of cash)[24](index=24&type=chunk) - Settled disputes with GEODynamics, Inc. seller in July 2022, involving a **$10.0 million cash payment** and issuance of **1.9 million common shares**, fully settling a **$19.7 million promissory note**[25](index=25&type=chunk) - Offshore/Manufactured Products segment settled litigation in August 2022, receiving **$6.9 million cash** and recognizing a **$6.1 million gain**[26](index=26&type=chunk) [Our Industry](index=6&type=section&id=Our%20Industry) Demand for the company's products and services is cyclical and highly dependent on capital spending in the oil and natural gas industry, influenced by commodity prices and ESG considerations. - Demand for products and services is cyclical and substantially dependent on capital spending in the oil and natural gas industry[27](index=27&type=chunk) - Customer capital spending is based on outlook for commodity prices, economic growth, demand, resource production, and ESG considerations[27](index=27&type=chunk) - The industry saw significant growth and recovery in 2021 and 2022, with expectations for further improvement in 2023 due to higher free cash flows for customers[28](index=28&type=chunk) - Demand for Offshore/Manufactured Products is driven by longer-term commodity price outlook and land-based drilling activity, with deepwater project bidding improving in 2022[29](index=29&type=chunk) - Demand for Well Site Services and Downhole Technologies is primarily affected by U.S. land-based drilling and completion activity, sensitive to near-term WTI crude oil prices[30](index=30&type=chunk)[31](index=31&type=chunk) [Offshore/Manufactured Products Segment](index=7&type=section&id=Offshore%2FManufactured%20Products) This segment generated 52% to 54% of consolidated revenue from 2020-2022, providing technology-driven products for offshore oil and gas, military, and alternative energy applications. - The Offshore/Manufactured Products segment generated approximately **52% to 54% of consolidated revenue** for the years ended December 31, 2022, 2021, and 2020[32](index=32&type=chunk) - Provides technology-driven, highly-engineered products and services for offshore oil and natural gas production systems, military, and other energy applications[32](index=32&type=chunk) - Market demand is primarily driven by offshore production infrastructure development, exploration, drilling activities, and, to a lesser extent, on-vessel construction[33](index=33&type=chunk) - Investing in research and bidding on projects for alternative energy sources, including offshore wind and deepsea mineral gathering[34](index=34&type=chunk) Offshore/Manufactured Products Backlog (2020-2022) | Date | Backlog ($ millions) | | :--- | :------------------- | | Dec 31, 2022 | 308 | | Dec 31, 2021 | 260 | | Dec 31, 2020 | 219 | - Approximately **63% of the December 31, 2022 backlog** is expected to be recognized as revenue during 2023[35](index=35&type=chunk) - Operates in major offshore crude oil and natural gas producing regions globally, including the U.S. Gulf of Mexico, Brazil, West Africa, and Southeast Asia[36](index=36&type=chunk) [Well Site Services Segment](index=8&type=section&id=Well%20Site%20Services) This segment generated 30% to 31% of consolidated revenue from 2020-2022, offering completion-focused equipment and services for oil and natural gas wells, primarily in the U.S. land market. - The Well Site Services segment generated approximately **30% to 31% of consolidated revenue** for the years ended December 31, 2022, 2021, and 2020[38](index=38&type=chunk) - Provides a broad range of equipment and services for drilling, establishing, and maintaining oil and natural gas flow throughout a well's life cycle, primarily completion-focused[38](index=38&type=chunk) - Demand is predominantly tied to U.S. land-based oil and natural gas exploration and production activity, driven by crude oil prices (WTI) and, to a lesser extent, natural gas prices[39](index=39&type=chunk) - Services include wellhead isolation, frac valve services, wireline and coiled tubing support, flowback and well testing, downhole and extended-reach services, pipe recovery, gravel pack, sand control, hydraulic chokes, BOP services, and drilling services[40](index=40&type=chunk)[46](index=46&type=chunk) [Downhole Technologies Segment](index=9&type=section&id=Downhole%20Technologies) This segment contributed 15% to 18% of consolidated revenue from 2020-2022, providing oil and gas perforation systems and downhole tools for completion, intervention, and well abandonment operations. - The Downhole Technologies segment contributed approximately **15% to 18% of consolidated revenue** for the years ended December 31, 2022, 2021, and 2020[42](index=42&type=chunk) - Provides oil and gas perforation systems, downhole tools, and services for completion, intervention, wireline, and well abandonment operations[42](index=42&type=chunk) - Demand is predominantly tied to U.S. land-based oil and natural gas exploration and production activity levels, driven by crude oil prices and, to a lesser extent, natural gas prices[43](index=43&type=chunk) - Demand is also influenced by trends toward longer lateral lengths, increased frac stages, and more perforation clusters for unconventional well productivity[43](index=43&type=chunk) - Product offerings include patented perforation technology, proprietary toe valve and frac plug products for zonal isolation, and consumable products like setting tools and bridge plugs[44](index=44&type=chunk) [Seasonality of Operations](index=9&type=section&id=Seasonality%20of%20Operations) The company's operations are impacted by customer budgets and seasonal weather conditions, particularly severe winter weather in the Rocky Mountain and Northeast U.S., and hurricanes in the Gulf of Mexico. - Operations are directly impacted by customer budgets and seasonal weather conditions, especially in the Rocky Mountain and Northeast regions of the United States due to severe winter weather[46](index=46&type=chunk) - Summer and fall completion and drilling activity can be restricted by hurricanes and storms in the Gulf of Mexico[46](index=46&type=chunk) [Human Capital](index=10&type=section&id=Human%20Capital) As of December 31, 2022, the company had 2,738 full-time employees globally, with a strong focus on safety, diversity, and continuous training. - As of December 31, 2022, the company had **2,738 full-time employees**, with **57% in Offshore/Manufactured Products**, **30% in Well Site Services**, **10% in Downhole Technologies**, and **3% in corporate headquarters**[47](index=47&type=chunk) - Safety is a cornerstone of the company's culture, with global targets, real-time performance monitoring, and weekly executive reviews[48](index=48&type=chunk)[49](index=49&type=chunk) - The company recognizes the importance of a diverse workforce, with **73% of employees in the U.S.** (**77% of 2022 revenues**)[53](index=53&type=chunk)[54](index=54&type=chunk) - As of December 31, 2022, women constituted **18% of the global workforce** and **23% of executive and senior management roles**, including the CEO and President[54](index=54&type=chunk) - Invests in continual training and development through technical and non-technical courses, on-the-job mentoring, and an educational assistance program[57](index=57&type=chunk) [Environmental and Occupational Health and Safety Matters](index=11&type=section&id=Environmental%20and%20Occupational%20Health%20and%20Safety%20Matters) The company's operations are subject to stringent environmental and occupational health and safety laws globally, with non-compliance leading to significant penalties and costs. - Business operations are subject to stringent environmental and occupational health and safety laws and regulations at federal, state, local, and international levels[58](index=58&type=chunk) - Key U.S. legal standards include the Clean Air Act, Clean Water Act, Oil Pollution Act of 1990, DOI regulations, CERCLA, RCRA, Safe Drinking Water Act, Emergency Planning and Community Right-to-Know Act, Occupational Safety and Health Act, Endangered Species Act, National Environmental Policy Act, U.S. Department of Transportation regulations, and ATF regulations[59](index=59&type=chunk)[62](index=62&type=chunk) - Non-compliance can result in sanctions, penalties, remedial actions, project restrictions, delays, or cancellations, and increased operating and capital expenditures[60](index=60&type=chunk) - Recent regulatory initiatives on hydraulic fracturing, induced seismicity, offshore marine safety, ground-level ozone standards, and 'waters of the United States' could impose more stringent requirements, increase costs, and impact project viability[62](index=62&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk)[65](index=65&type=chunk) - Climate change initiatives, including the Inflation Reduction Act of 2022 (IRA 2022) and EPA's proposed methane regulations, could accelerate the transition to a low-carbon economy, increase operating costs for customers, and reduce demand for fossil fuels and related services[65](index=65&type=chunk)[66](index=66&type=chunk) - The IRA 2022 imposes a federal fee on methane emissions, starting at **$900 per ton in 2024**, increasing to **$1,500 by 2026**, which could increase customer operating costs[126](index=126&type=chunk)[127](index=127&type=chunk) [Risk Factors](index=16&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant business, operating, financial, legal, and regulatory risks, including industry volatility, competition, supply chain disruptions, and evolving environmental regulations. - Demand for products and services is substantially dependent on capital expenditures in the crude oil and natural gas industry, which is highly volatile due to factors like global demand/supply, commodity prices, and regulatory pressures[69](index=69&type=chunk)[70](index=70&type=chunk)[71](index=71&type=chunk) - The COVID-19 pandemic has negatively impacted crude oil prices and demand, and future outbreaks could lead to renewed restrictions, reduced demand, increased costs, and supply chain issues[73](index=73&type=chunk)[74](index=74&type=chunk) - The company operates in highly competitive markets, facing larger companies with greater resources and numerous smaller regional competitors, which could lead to market share loss or inability to increase prices[75](index=75&type=chunk) - Disruption of the supply chain, inability to employ and retain key personnel, and failure to develop new competitive technologies and products could adversely affect business and revenues[77](index=77&type=chunk)[78](index=78&type=chunk)[79](index=79&type=chunk) - Security threats, including cybersecurity attacks, could lead to losses of sensitive information, critical infrastructure, and negatively impact reputation and financial results[80](index=80&type=chunk) - Dependence on several significant customers in each segment means loss or inability of customers to meet obligations could adversely affect results, exacerbated by industry concentration and credit risk[81](index=81&type=chunk)[82](index=82&type=chunk) - The ongoing military action between Russia and Ukraine could lead to market disruptions, commodity price volatility, supply chain constraints, increased costs, and instability in financial markets[83](index=83&type=chunk) - Acquisitions involve risks such as retaining key employees/customers, integrating operations, increased debt/equity issuance, and potential for unanticipated liabilities[84](index=84&type=chunk)[85](index=85&type=chunk) - Climate events (e.g., hurricanes, floods, prolonged cold weather) can disrupt operations, cause physical damage, delay supply chains, and impact demand for energy products[87](index=87&type=chunk)[88](index=88&type=chunk)[89](index=89&type=chunk) - Inability to access capital and credit markets on affordable terms, or the effects of inflation on costs, could adversely affect liquidity and financial condition[90](index=90&type=chunk)[91](index=91&type=chunk) - Backlog in the Offshore/Manufactured Products segment is subject to unexpected adjustments and cancellations, limiting its reliability as an indicator of future revenues and earnings[92](index=92&type=chunk)[93](index=93&type=chunk) - International operations expose the company to risks like expropriation, foreign capital controls, currency fluctuations, changing political conditions, and economic sanctions[101](index=101&type=chunk) - Compliance with the U.S. Foreign Corrupt Practices Act (FCPA) and similar anti-bribery laws is critical, as violations could lead to civil/criminal penalties and reputational damage[102](index=102&type=chunk) - Changes to tariffs and duties, particularly on imported raw materials like steel, could increase costs and adversely affect financial position if not passed on to customers[104](index=104&type=chunk) - Explosive incidents from dangerous materials used in the Downhole Technologies segment could disrupt operations, cause injuries/damages, and lead to adverse publicity and liabilities[105](index=105&type=chunk) - Inadequate insurance coverage for potential liabilities, including product failures, accidents, and litigation claims, could materially adversely affect results[106](index=106&type=chunk)[107](index=107&type=chunk) - Inability to protect intellectual property rights or claims of infringement by others could significantly reduce competitive advantages and incur substantial legal costs[108](index=108&type=chunk)[109](index=109&type=chunk) - Evolving laws and regulations regarding hydraulic fracturing, induced seismicity, offshore marine safety, and environmental protection could increase costs, impose operating restrictions, and reduce demand for services[110](index=110&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk)[115](index=115&type=chunk) - Increasing attention to ESG matters from stakeholders, investors, and lenders may impact the business through reputational damage, increased costs, reduced demand, and limited access to capital markets[124](index=124&type=chunk)[125](index=125&type=chunk) - The Inflation Reduction Act of 2022 (IRA 2022) could accelerate the transition to a low-carbon economy and impose new costs on customers' operations, particularly through a methane emissions charge[126](index=126&type=chunk)[127](index=127&type=chunk) [Business and Operating Risks](index=16&type=section&id=Business%20and%20Operating%20Risks) The company's business is highly dependent on the volatile crude oil and natural gas industry, facing risks from commodity price fluctuations, competition, supply chain disruptions, and cybersecurity threats. - Demand for products and services is substantially dependent on capital expenditures in the crude oil and natural gas industry, which is highly volatile due to factors like global demand/supply, commodity prices, and regulatory pressures[69](index=69&type=chunk)[70](index=70&type=chunk)[71](index=71&type=chunk) - The COVID-19 pandemic has negatively impacted crude oil prices and demand, and future outbreaks could lead to renewed restrictions, reduced demand, increased costs, and supply chain issues[73](index=73&type=chunk)[74](index=74&type=chunk) - The company operates in highly competitive markets, facing larger companies with greater resources and numerous smaller regional competitors, which could lead to market share loss or inability to increase prices[75](index=75&type=chunk) - Disruption of the supply chain, inability to employ and retain key personnel, and failure to develop new competitive technologies and products could adversely affect business and revenues[77](index=77&type=chunk)[78](index=78&type=chunk)[79](index=79&type=chunk) - Security threats, including cybersecurity attacks, could lead to losses of sensitive information, critical infrastructure, and negatively impact reputation and financial results[80](index=80&type=chunk) - Dependence on several significant customers in each segment means loss or inability of customers to meet obligations could adversely affect results, exacerbated by industry concentration and credit risk[81](index=81&type=chunk)[82](index=82&type=chunk) - The ongoing military action between Russia and Ukraine could lead to market disruptions, commodity price volatility, supply chain constraints, increased costs, and instability in financial markets[83](index=83&type=chunk) - Acquisitions involve risks such as retaining key employees/customers, integrating operations, increased debt/equity issuance, and potential for unanticipated liabilities[84](index=84&type=chunk)[85](index=85&type=chunk) - Climate events (e.g., hurricanes, floods, prolonged cold weather) can disrupt operations, cause physical damage, delay supply chains, and impact demand for energy products[87](index=87&type=chunk)[88](index=88&type=chunk)[89](index=89&type=chunk) [Financial Risks](index=21&type=section&id=Financial%20Risks) Financial risks include potential inability to access capital, adverse effects of inflation on costs, and the inherent limitations and potential for cancellations in the Offshore/Manufactured Products segment's backlog. - Inability to access capital and credit markets on favorable terms, or failure to raise capital at attractive costs, could hinder business growth and maintenance[90](index=90&type=chunk) - Inflation in wages, materials, parts, equipment, and other costs can adversely affect results if commensurate price increases cannot be achieved[91](index=91&type=chunk) - Backlog in the Offshore/Manufactured Products segment is subject to unexpected adjustments and cancellations, and may not be indicative of future revenues or profits[92](index=92&type=chunk)[93](index=93&type=chunk) - Fixed-price contracts in the Offshore/Manufactured Products segment carry risks from errors in estimates, changes in material/labor costs, supplier failures, and foreign currency fluctuations, potentially leading to reduced profitability or losses[94](index=94&type=chunk)[95](index=95&type=chunk)[96](index=96&type=chunk) - Exchange rate fluctuations can create volatility in consolidated financial position, results of operations, and cash flows, especially when revenues and expenses are not matched in foreign currencies[97](index=97&type=chunk) - A severe prolonged downturn could negatively affect the value of goodwill and other intangible assets, which represented **7% and 16% of total assets**, respectively, as of December 31, 2022[98](index=98&type=chunk) - Goodwill impairment charges of **$406.1 million** were recognized in Q1 2020 due to significant stock price decline and weak energy market conditions[99](index=99&type=chunk) [Legal or Regulatory Risks](index=23&type=section&id=Legal%20or%20Regulatory%20Risks) The company faces legal and regulatory risks from international operations, anti-bribery laws, tariffs, explosive materials, inadequate insurance, intellectual property, and evolving environmental and ESG regulations. - International operations expose the company to risks such as expropriation, foreign capital controls, currency fluctuations, changing political conditions, economic sanctions, and compliance with anti-bribery laws like the FCPA[101](index=101&type=chunk)[102](index=102&type=chunk) - Changes to tariffs and duties, especially on imported raw materials like steel, could increase costs and adversely affect financial position if not passed on to customers[104](index=104&type=chunk) - Explosive incidents arising from dangerous materials used in the Downhole Technologies segment could disrupt operations, cause bodily injuries and property damages, and lead to adverse publicity and liabilities[105](index=105&type=chunk) - Inadequate insurance coverage for potential liabilities, including product failures, accidents, and litigation claims, could materially adversely affect results[106](index=106&type=chunk)[107](index=107&type=chunk) - Inability to protect intellectual property rights or claims of infringement by others could significantly reduce competitive advantages and incur substantial legal costs[108](index=108&type=chunk)[109](index=109&type=chunk) - Laws, regulations, and executive actions regarding hydraulic fracturing could increase costs, result in operating restrictions, delays, or cancellations, and reduce demand for products and services[110](index=110&type=chunk)[111](index=111&type=chunk) - Legislative and regulatory initiatives related to induced seismicity could lead to operating restrictions or delays in drilling and completion activities, reducing demand for services[112](index=112&type=chunk) - Imposition of laws, executive actions, or regulatory initiatives to restrict offshore leasing, permitting, or drilling activities could reduce demand for services and products[113](index=113&type=chunk)[114](index=114&type=chunk) - Stringent environmental and occupational health and safety requirements may expose the company to significant costs and liabilities, including from accidental pollutant releases[115](index=115&type=chunk)[116](index=116&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk)[119](index=119&type=chunk) - Risks arising from the threat of climate change, including new GHG emission standards and increased competitiveness of alternative energy sources, could increase operating costs, limit production areas, and reduce demand for products and services[120](index=120&type=chunk)[121](index=121&type=chunk) - The Inflation Reduction Act of 2022 (IRA 2022) could accelerate the transition to a low-carbon economy and impose new costs on customers' operations, particularly through a methane emissions charge[126](index=126&type=chunk)[127](index=127&type=chunk) - Increasing attention to ESG matters may impact the business through reputational damage, increased costs, reduced demand for hydrocarbon products, increased investigations and litigation, and negative impacts on stock price and access to capital markets[124](index=124&type=chunk)[125](index=125&type=chunk) [Unresolved Staff Comments](index=29&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) There are no unresolved staff comments. [Properties](index=29&type=section&id=Item%202.%20Properties) The company owns and leases numerous manufacturing facilities, service centers, sales and administrative offices, storage yards, and data processing centers globally. - The company owns and leases numerous manufacturing facilities, service centers, sales and administrative offices, storage yards, and data processing centers worldwide[130](index=130&type=chunk) - Principal facilities for Offshore/Manufactured Products are in Brazil, Scotland, Thailand, Singapore, India, Spain, China, UAE, and U.S. states like Texas, Oklahoma, and Louisiana[131](index=131&type=chunk) - Well Site Services facilities are in Texas, Louisiana, Oklahoma, Pennsylvania, Wyoming, North Dakota, Washington (U.S.), and Alberta (Canada)[132](index=132&type=chunk) - Downhole Technologies facilities are in Colorado, Texas, Pennsylvania (U.S.), and Scotland[132](index=132&type=chunk) - Principal corporate offices are located in Houston, Texas[133](index=133&type=chunk) [Legal Proceedings](index=29&type=section&id=Item%203.%20Legal%20Proceedings) Information regarding legal proceedings is incorporated by reference from Note 15, 'Commitments and Contingencies,' of the Consolidated Financial Statements. - Legal proceedings information is incorporated by reference from Note 15, 'Commitments and Contingencies,' of the Consolidated Financial Statements[134](index=134&type=chunk) [Mine Safety Disclosures](index=29&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company. PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=30&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock (OIS) is traded on the NYSE, with 63,903,819 shares outstanding as of February 10, 2023, and a **$25.0 million** share repurchase program was approved in February 2023. - As of February 10, 2023, **63,903,819 shares of common stock** were outstanding, traded on the NYSE under the ticker symbol 'OIS'[5](index=5&type=chunk)[137](index=137&type=chunk) - No cash dividends have been declared or paid on common stock since the initial public offering in 2001, with future dividend decisions at the Board's discretion and subject to contractual restrictions[138](index=138&type=chunk) - On February 16, 2023, the Board of Directors approved a share repurchase program of up to **$25.0 million**, extending for two years[146](index=146&type=chunk) Comparison of 5-Year Cumulative Total Return (2017-2022) | | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | | :----------------------------- | :----- | :----- | :----- | :----- | :----- | :----- | | Oil States International, Inc. | $100.00 | $50.46 | $57.63 | $17.74 | $17.56 | $26.36 | | Peer Group | $100.00 | $56.97 | $56.70 | $32.77 | $34.41 | $57.78 | | PHLX Oil Service Sector | $100.00 | $54.78 | $54.48 | $31.56 | $38.10 | $61.53 | | S&P 500 | $100.00 | $95.62 | $125.72 | $148.85 | $191.58 | $156.89 | [Reserved](index=31&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved and contains no content. [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides an overview of the company's financial performance, liquidity, and capital resources, highlighting increased demand, commodity price trends, and strategic actions. - Demand for oil and natural gas increased steadily from 2020 lows, with commodity prices driven by supply declines, Russian invasion of Ukraine sanctions, and slower production growth[150](index=150&type=chunk) Average Commodity Spot Prices (2021-2022) | Commodity | Year | Q1 Avg Price | Q2 Avg Price | Q3 Avg Price | Q4 Avg Price | Year Avg Price | | :---------- | :--- | :----------- | :----------- | :----------- | :----------- | :------------- | | Brent Crude (per bbl) | 2022 | $100.87 | $113.84 | $100.71 | $88.77 | $100.99 | | | 2021 | $61.04 | $68.98 | $73.51 | $79.61 | $70.86 | | WTI Crude (per bbl) | 2022 | $95.18 | $108.83 | $93.06 | $82.79 | $94.90 | | | 2021 | $58.09 | $66.19 | $70.58 | $77.33 | $68.14 | | Henry Hub Natural Gas (per MMBtu) | 2022 | $4.67 | $7.50 | $8.03 | $5.55 | $6.45 | | | 2021 | $3.50 | $2.95 | $4.35 | $4.75 | $3.90 | - Consolidated total revenues increased by **$164.5 million**, or **29%**, in 2022 compared to 2021, driven by increased U.S. land-based customer activity and higher demand for project-related connector products[182](index=182&type=chunk)[183](index=183&type=chunk) Consolidated Results of Operations (2021-2022) | Metric | 2022 ($ thousands) | 2021 ($ thousands) | Variance ($ thousands) | | :---------------------------------------------------------------- | :----------------- | :----------------- | :--------------------- | | Revenues | 737,706 | 573,161 | 164,545 | | Cost of revenues (exclusive of depreciation and amortization) | 578,556 | 470,396 | 108,160 | | Selling, general and administrative expenses | 96,038 | 83,692 | 12,346 | | Depreciation and amortization expense | 67,334 | 80,741 | (13,407) | | Impairments of fixed and lease assets | — | 4,166 | (4,166) | | Other operating income, net | (7,127) | (1,042) | (6,085) | | Operating income (loss) | 2,905 | (64,792) | 67,697 | | Net loss | (9,540) | (63,993) | 54,453 | | Basic Net loss per share | (0.15) | (1.06) | | | Diluted Net loss per share | (0.15) | (1.06) | | - Net loss improved significantly from **$63.993 million in 2021 to $9.540 million in 2022**, partly due to a **$6.1 million gain** from litigation settlement[172](index=172&type=chunk)[180](index=180&type=chunk) - Cash flows from operations totaled **$32.9 million in 2022**, up from **$7.2 million in 2021**, despite **$34.7 million** used for net working capital increases[206](index=206&type=chunk)[207](index=207&type=chunk) - Capital expenditures are projected to be approximately **$25 million in 2023**, funded by available cash, internally generated funds, and ABL Facility borrowings[210](index=210&type=chunk) - As of December 31, 2022, the company had **$42.0 million in cash and cash equivalents**, no borrowings outstanding under its ABL Facility, and **$135.0 million principal amount of 2026 Notes** outstanding[213](index=213&type=chunk)[214](index=214&type=chunk) [Recent Developments](index=32&type=section&id=Recent%20Developments) Demand for oil and natural gas increased in 2022, driven by waning COVID-19 impacts, crude oil supply declines, and geopolitical factors, with Brent crude averaging **$101/bbl**. - Demand for oil and natural gas increased steadily from 2020 lows, with commodity prices driven by supply declines, Russian invasion of Ukraine sanctions, and slower production growth[150](index=150&type=chunk) Average Commodity Spot Prices (2021-2022) | Commodity | Year | Q1 Avg Price | Q2 Avg Price | Q3 Avg Price | Q4 Avg Price | Year Avg Price | | :---------- | :--- | :----------- | :----------- | :----------- | :----------- | :------------- | | Brent Crude (per bbl) | 2022 | $100.87 | $113.84 | $100.71 | $88.77 | $100.99 | | | 2021 | $61.04 | $68.98 | $73.51 | $79.61 | $70.86 | | WTI Crude (per bbl) | 2022 | $95.18 | $108.83 | $93.06 | $82.79 | $94.90 | | | 2021 | $58.09 | $66.19 | $70.58 | $77.33 | $68.14 | | Henry Hub Natural Gas (per MMBtu) | 2022 | $4.67 | $7.50 | $8.03 | $5.55 | $6.45 | | | 2021 | $3.50 | $2.95 | $4.35 | $4.75 | $3.90 | - In January 2022, the Well Site Services segment exited underperforming domestic service lines, which generated approximately **$20 million in revenues in 2021**, improving segment margins[154](index=154&type=chunk) - In April 2022, the Offshore/Manufactured Products segment acquired E-Flow Control Holdings Limited for **$8.1 million** (net of cash)[156](index=156&type=chunk) - In July 2022, the company settled disputes with the GEODynamics seller for **$10.0 million cash** and **1.9 million shares of common stock**, fully settling a **$19.7 million promissory note**[157](index=157&type=chunk) - In August 2022, the Offshore/Manufactured Products segment settled litigation, recognizing a gain of **$6.1 million**[158](index=158&type=chunk) [Overview](index=32&type=section&id=Overview) The company's financial results are influenced by WTI and Brent crude oil prices, regulatory environments, and geopolitical factors, with Offshore/Manufactured Products backlog increasing to **$308 million** in 2022. - Current and future WTI crude oil prices and regulatory environments influence U.S. operations, while Brent crude prices influence global offshore drilling and development[159](index=159&type=chunk) - Crude oil prices and demand remain highly volatile due to geopolitical conflicts, recession risks, COVID-19 uncertainties, production levels, and regulatory changes[160](index=160&type=chunk) - Offshore/Manufactured Products segment sales in 2022 were **41% project-driven**, influenced by longer-term commodity demand forecasts[163](index=163&type=chunk) Offshore/Manufactured Products Backlog (2020-2022) | Year | March 31 ($ millions) | June 30 ($ millions) | September 30 ($ millions) | December 31 ($ millions) | | :--- | :-------------------- | :------------------- | :------------------------ | :----------------------- | | 2022 | $265 | $241 | $258 | $308 | | 2021 | $226 | $214 | $249 | $260 | | 2020 | $267 | $235 | $227 | $219 | - Bookings totaled **$435 million in 2022**, yielding a book-to-bill ratio of **1.1x**[164](index=164&type=chunk) U.S. and International Drilling Rig Count (2021-2023) | Rig Count Category | As of Feb 10, 2023 | Avg for Year Ended Dec 31, 2022 | Avg for Year Ended Dec 31, 2021 | | :----------------- | :----------------- | :------------------------------ | :------------------------------ | | **United States** | | | | | Land – Oil | 589 | 557 | 365 | | Land – Natural gas and other | 152 | 148 | 98 | | Offshore | 20 | 18 | 15 | | **Total U.S.** | **761** | **723** | **478** | | **International** | | | | | Land | | 821 | 707 | | Offshore | | 205 | 179 | | **Total International** | | **1,026** | **886** | | **Grand Total** | | **1,749** | **1,364** | - The average U.S. rig count for 2022 increased by **245 rigs**, or **51%**, compared to 2021[168](index=168&type=chunk) - Tariffs on imported raw materials (e.g., steel, aluminum) and sanctions against Russia could increase costs and cause project delays or cancellations if not passed on to customers[169](index=169&type=chunk) [Selected Financial Data](index=35&type=section&id=Selected%20Financial%20Data) This section directs readers to the Consolidated Financial Statements and related notes for a comprehensive understanding of the selected financial data. [Consolidated Results of Operations](index=35&type=section&id=Consolidated%20Results%20of%20Operations) In 2022, the company reported a net loss of **$9.5 million**, a significant improvement from a **$64.0 million** net loss in 2021, driven by a **29%** increase in consolidated revenues to **$737.7 million**. Consolidated Results of Operations (2021-2022) | Metric | 2022 ($ thousands) | 2021 ($ thousands) | Variance ($ thousands) | | :---------------------------------------------------------------- | :----------------- | :----------------- | :--------------------- | | Revenues | 737,706 | 573,161 | 164,545 | | Cost of revenues (exclusive of depreciation and amortization) | 578,556 | 470,396 | 108,160 | | Selling, general and administrative expenses | 96,038 | 83,692 | 12,346 | | Depreciation and amortization expense | 67,334 | 80,741 | (13,407) | | Impairments of fixed and lease assets | — | 4,166 | (4,166) | | Other operating income, net | (7,127) | (1,042) | (6,085) | | Operating income (loss) | 2,905 | (64,792) | 67,697 | | Net loss | (9,540) | (63,993) | 54,453 | | Basic Net loss per share | (0.15) | (1.06) | | | Diluted Net loss per share | (0.15) | (1.06) | | - Net loss for 2022 was **$9.5 million** (**$0.15 per share**), including a **$6.1 million gain** from litigation settlement, significantly improved from a **$64.0 million net loss** (**$1.06 per share**) in 2021[180](index=180&type=chunk) - Consolidated total revenues increased **$164.5 million** (**29%**) in 2022, driven by increased U.S. land-based customer activity and higher demand for project-related connector products[182](index=182&type=chunk)[183](index=183&type=chunk) - Consolidated product revenues increased **$86.3 million** (**29%**) and service revenues increased **$78.3 million** (**29%**) in 2022[183](index=183&type=chunk) - Operating income was **$2.9 million in 2022**, a significant improvement from a **$64.8 million operating loss in 2021**, which included **$7.7 million in asset impairment charges** and **$7.5 million in severance costs**[190](index=190&type=chunk) - Depreciation and amortization expense decreased **$13.4 million** (**17%**) in 2022, primarily due to reduced capital investments in the Well Site Services segment[187](index=187&type=chunk) - Selling, general and administrative expense increased **$12.3 million** (**15%**) in 2022 due to higher performance-based incentive compensation, professional services, bad debt, and trade show expenses[186](index=186&type=chunk) - Other comprehensive loss was **$12.9 million in 2022**, compared to comprehensive income of **$5.4 million in 2021**, primarily due to fluctuations in foreign currency exchange rates (British pound weakened, Brazilian real strengthened against USD in 2022)[194](index=194&type=chunk) [Segment Operating Results](index=36&type=section&id=Segment%20Operating%20Results) All three segments experienced revenue growth in 2022, with Offshore/Manufactured Products and Well Site Services turning operating losses into profits, and Downhole Technologies reducing its loss. Segment Revenues and Operating Income (Loss) (2021-2022) | Segment | 2022 Revenues ($ thousands) | 2021 Revenues ($ thousands) | Revenue Variance ($ thousands) | 2022 Operating Income (Loss) ($ thousands) | 2021 Operating Income (Loss) ($ thousands) | Operating Income (Loss) Variance ($ thousands) | | :-------------------------- | :-------------------------- | :-------------------------- | :----------------------------- | :----------------------------------------- | :----------------------------------------- | :--------------------------------------------- | | Offshore/Manufactured Products | 381,723 | 298,729 | 82,994 | 45,268 | 15,447 | 29,821 | | Well Site Services | 231,189 | 170,940 | 60,249 | 4,865 | (34,511) | 39,376 | | Downhole Technologies | 124,794 | 103,492 | 21,302 | (6,669) | (13,470) | 6,801 | | Corporate | — | — | — | (40,559) | (32,258) | (8,301) | | **Total** | **737,706** | **573,161** | **164,545** | **2,905** | **(64,792)** | **67,697** | - Offshore/Manufactured Products segment revenues increased **$83.0 million** (**28%**) in 2022, with operating income rising to **$45.3 million** (from **$15.4 million in 2021**), including a **$6.1 million litigation settlement gain**[196](index=196&type=chunk)[197](index=197&type=chunk) - Offshore/Manufactured Products backlog increased to **$308 million** as of December 31, 2022, from **$260 million in 2021**, with a book-to-bill ratio of **1.1x**[198](index=198&type=chunk) - Well Site Services segment revenues increased **$60.2 million** (**35%**) in 2022, turning an operating loss of **$34.5 million in 2021** into an operating income of **$4.9 million in 2022**, despite exiting certain service offerings[199](index=199&type=chunk)[200](index=200&type=chunk) - Downhole Technologies segment revenues increased **$21.3 million** (**21%**) in 2022, reducing its operating loss to **$6.7 million** (from **$13.5 million in 2021**) due to increased customer demand[201](index=201&type=chunk)[202](index=202&type=chunk) - Corporate expenses increased **$8.3 million** (**26%**) in 2022 due to higher personnel costs, incentive compensation, and professional fees[203](index=203&type=chunk) [Liquidity, Capital Resources and Other Matters](index=40&type=section&id=Liquidity%2C%20Capital%20Resources%20and%20Other%20Matters) The company's primary liquidity sources are cash flow from operations and credit facilities, with cash flows from operations significantly increasing to **$32.9 million** in 2022. - Primary liquidity needs are for operating and capital expenditures, new product development, working capital, strategic acquisitions, debt repayment, and share repurchases[205](index=205&type=chunk) - Primary sources of funds are cash flow from operations, borrowings under credit facilities, and capital markets transactions[205](index=205&type=chunk) - Cash flows from operations totaled **$32.9 million in 2022**, compared to **$7.2 million in 2021**[206](index=206&type=chunk) - Net cash used in investing activities was **$22.7 million in 2022**, including the **$8.1 million E-Flow acquisition** and **$20.3 million in capital expenditures**[208](index=208&type=chunk)[209](index=209&type=chunk) - Net cash used in financing activities was **$20.3 million in 2022**, including a **$10.0 million cash payment** for the GEO Note settlement and **$8.7 million for 2023 Notes purchases**[211](index=211&type=chunk) - As of December 31, 2022, cash and cash equivalents totaled **$42.0 million**, down from **$52.9 million in 2021**[213](index=213&type=chunk) - No borrowings were outstanding under the ABL Facility as of December 31, 2022, with **$92.1 million available** to be drawn[220](index=220&type=chunk) - The remaining **$17.3 million principal amount of 2023 Notes** outstanding as of December 31, 2022, were fully repaid on February 15, 2023[214](index=214&type=chunk)[223](index=223&type=chunk) - The company believes cash on-hand, operating cash flows, and ABL Facility capacity will be sufficient for liquidity needs in the next twelve months[215](index=215&type=chunk) - The SEC's proposed climate-related disclosure rules could increase costs and litigation risks, and potentially restrict investments from stakeholders and lenders[217](index=217&type=chunk) [Contractual Obligations](index=42&type=section&id=Contractual%20Obligations) As of December 31, 2022, total contractual cash obligations were **$305.2 million**, with **$127.2 million** due in 2023, including the full repayment of 2023 Notes. Contractual Obligations as of December 31, 2022 ($ thousands) | Contractual obligations | Total | 2023 | 2024 and 2025 | 2026 and 2027 | After 2027 | | :---------------------- | :------- | :------- | :------------ | :------------ | :--------- | | ABL Facility | $— | $— | $— | $— | $— | | 2023 Notes | 17,445 | 17,445 | — | — | — | | 2026 Notes | 157,444 | 6,413 | 12,825 | 138,206 | — | | Other debt and finance lease obligations | 3,430 | 528 | 1,012 | 1,059 | 831 | | Operating lease liabilities | 30,805 | 7,417 | 10,260 | 7,487 | 5,641 | | Purchase obligations | 96,113 | 95,391 | 722 | — | — | | **Total contractual cash obligations** | **$305,237** | **$127,193** | **$24,819** | **$146,752** | **$6,472** | - The 2023 Notes, totaling **$17.4 million**, were repaid on February 15, 2023[228](index=228&type=chunk) - As of December 31, 2022, there were no borrowings outstanding under the ABL Facility, with **$92.1 million available**[227](index=227&type=chunk) [Contingencies and Other Obligations](index=42&type=section&id=Contingencies%20and%20Other%20Obligations) The company is involved in various claims, lawsuits, and administrative proceedings, and in August 2022, the Offshore/Manufactured Products segment settled litigation for **$6.9 million cash**, recognizing a **$6.1 million gain**. - The company is a party to various pending or threatened claims, lawsuits, and administrative proceedings, some related to acquired or sold businesses[229](index=229&type=chunk) - In August 2022, the Offshore/Manufactured Products segment settled outstanding litigation against certain service providers for **$6.9 million cash**, recognizing a **$6.1 million gain**[230](index=230&type=chunk) [Availability and Cost of Products](index=42&type=section&id=Availability%20and%20Cost%20of%20Products) The company uses diverse raw materials and components, and tariffs, sanctions, and supply chain disruptions could increase procurement difficulties and costs, potentially affecting financial results. - The company uses domestically produced and imported raw materials and component products, including steel[231](index=231&type=chunk) - Tariffs, sanctions, and supply chain disruptions could increase procurement difficulties and costs[231](index=231&type=chunk) - Inability to pass on cost increases to customers could adversely affect financial position, cash flows, and results of operations, potentially causing project delays or cancellations[232](index=232&type=chunk) [Tax Matters](index=43&type=section&id=Tax%20Matters) This section refers to Note 2 and Note 10 of the Consolidated Financial Statements for additional information on tax matters. - Refer to Note 2, 'Summary of Significant Accounting Policies,' and Note 10, 'Income Taxes,' for additional information on tax matters[233](index=233&type=chunk) [Off-Balance Sheet Arrangements](index=43&type=section&id=Off-Balance%20Sheet%20Arrangements) As of December 31, 2022, the company had no off-balance sheet arrangements. - As of December 31, 2022, the company had no off-balance sheet arrangements[234](index=234&type=chunk) [Critical Accounting Policies](index=43&type=section&id=Critical%20Accounting%20Policies) The company's financial statements rely on significant estimates and assumptions, particularly for goodwill and long-lived asset impairments, revenue recognition, and income taxes. - Critical accounting policies involve numerous estimates and assumptions, including goodwill and long-lived asset impairments, revenue and income recognized over time, valuation allowances on deferred tax assets, and settlement of litigation[235](index=235&type=chunk)[340](index=340&type=chunk) - Goodwill and other intangible assets represented **7% and 16%**, respectively, of total assets as of December 31, 2022[236](index=236&type=chunk) - Goodwill is assessed annually for impairment (as of December 1) using market and income approaches, with no additional impairments required in 2022[237](index=237&type=chunk)[238](index=238&type=chunk) - Long-lived tangible and intangible assets are assessed for impairment when circumstances indicate carrying value may not be recoverable, with no indicators identified in 2022[242](index=242&type=chunk)[244](index=244&type=chunk) - Revenue recognition varies: **35% from goods/services transferred at a point in time** (standard products), and **65% from products/services transferred over time** (short-term services and custom engineered products)[246](index=246&type=chunk)[247](index=247&type=chunk) - Project-related contracts in Offshore/Manufactured Products recognize revenue over time using a cost-to-cost method, with estimates reviewed regularly and adjustments recognized under the cumulative catch-up method[248](index=248&type=chunk)[249](index=249&type=chunk)[250](index=250&type=chunk) - Contingent liabilities and future claims are estimated and accrued, with actual results potentially differing from estimates[254](index=254&type=chunk) - Income taxes are accounted for using the liability method, with deferred income taxes recorded based on differences between financial reporting and tax bases, and valuation allowances recorded when deferred tax assets are unlikely to be realized[255](index=255&type=chunk)[257](index=257&type=chunk) [Recent Accounting Pronouncements](index=46&type=section&id=Recent%20Accounting%20Pronouncements) The company believes that recently issued accounting standards, not yet effective, will not have a material impact on its consolidated financial statements upon adoption. - The company believes that recently issued accounting standards, which are not yet effective, will not have a material impact on its consolidated financial statements upon adoption[259](index=259&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=46&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's principal market risks are exposure to changes in interest rates and foreign currency exchange rates, using derivative instruments for risk management. - Principal market risks are exposure to changes in interest rates and foreign currency exchange rates[261](index=261&type=chunk) - Derivative instruments are used only for risk management, not speculative purposes[261](index=261&type=chunk) - As of December 31, 2022, there were no floating-rate obligations outstanding under the ABL Facility, mitigating interest rate risk[262](index=262&type=chunk) - Accumulated other comprehensive loss increased by **$12.9 million to $78.9 million in 2022**, primarily due to foreign currency translation adjustments[264](index=264&type=chunk) - In 2022, the British pound weakened by **11%** against the U.S. dollar, while the Brazilian real strengthened by **6%** against the U.S. dollar[264](index=264&type=chunk) [Financial Statements and Supplementary Data](index=46&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) The Consolidated Financial Statements and supplementary data are incorporated by reference and begin on page 52 of this Annual Report on Form 10-K. - Consolidated Financial Statements and supplementary data are incorporated by reference and begin on page 52[265](index=265&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=46&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) There were no changes in or disagreements on accounting principles or financial statement disclosure between the company and its independent registered public accounting firm. - No changes in or disagreements on accounting principles or financial statement disclosure with the independent registered public accounting firm during the two most recent fiscal years or any subsequent interim period[266](index=266&type=chunk) [Controls and Procedures](index=46&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2022, with an unqualified audit opinion from Ernst & Young LLP. - Disclosure controls and procedures were evaluated and deemed effective as of December 31, 2022, providing reasonable assurance for timely and accurate reporting[267](index=267&type=chunk) - Management assessed the effectiveness of internal control over financial reporting as of December 31, 2022, based on COSO criteria, and concluded it was effective[271](index=271&type=chunk) - Ernst & Young LLP, the independent registered public accounting firm, audited and expressed an unqualified opinion on the effectiveness of internal control over financial reporting as of December 31, 2022[272](index=272&type=chunk)[273](index=273&type=chunk) - No changes in internal control over financial reporting occurred during the fourth fiscal quarter ended December 31, 2022, that materially affected or are reasonably likely to materially affect it[274](index=274&type=chunk) [Other Information](index=47&type=section&id=Item%209B.%20Other%20Information) There was no information required to be disclosed in a Form 8-K during the fourth quarter of 2022 that was not reported. - No information required to be disclosed in a Form 8-K during the fourth quarter of 2022 was left unreported[275](index=275&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=48&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information regarding directors, executive officers, and corporate governance is incorporated by reference from the Definitive Proxy Statement for the 2023 Annual Meeting of Stockholders. - Information concerning directors, executive officers, corporate governance, audit committee financial experts, and the code of ethics is incorporated by reference from the Definitive Proxy Statement for the 2023 Annual Meeting of Stockholders[278](index=278&type=chunk)[283](index=283&type=chunk) [Executive Compensation](index=48&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the Definitive Proxy Statement for the 2023 Annual Meeting of Stockholders. - Executive compensation information is incorporated by reference from the Definitive Proxy Statement for the 2023 Annual Meeting of Stockholders[279](index=279&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=48&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership of certain beneficial owners and management, and related stockholder matters, is incorporated by reference from the Definitive Proxy Statement. - Security ownership information for certain beneficial owners and management, and related stockholder matters, is incorporated by reference from the Definitive Proxy Statement for the 2023 Annual Meeting of Stockholders[280](index=280&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=48&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding certain relationships and related transactions, and director independence, is incorporated by reference from the Definitive Proxy Statement for the 2023 Annual Meeting of Stockholders. - Information concerning certain relationships and related transactions, and director independence, is incorporated by reference from the Definitive Proxy Statement for the 2023 Annual Meeting of Stockholders[281](index=281&type=chunk) [Principal Accounting Fees and Services](index=48&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information concerning principal accounting fees and services and the audit committee's preapproval policies and procedures is incorporated by reference from the Definitive Proxy Statement. - Information concerning principal accounting fees and services and audit committee preapproval policies is incorporated by reference from the Definitive Proxy Statement for the 2023 Annual Meeting of Stockholders[282](index=282&type=chunk) PART IV [Exhibits, Financial Statement Schedules](index=49&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the financial statements, financial statement schedules, and exhibits filed as part of the 10-K report, including corporate documents and credit agreements. - The section provides an index to financial statements, financial statement schedules, and exhibits[286](index=286&type=chunk) - Exhibits include corporate documents (e.g., Amended and Restated Certificate of Incorporation, Bylaws), debt instruments (e.g., Indenture for 2026 Notes, Asset-based Credit Agreement), and various executive compensation plans[286](index=286&type=chunk)[287](index=287&type=chunk) [Form 10-K Summary](index=51&type=section&id=Item%2016.%20For

Financial Data and Key Metrics Changes - The company generated revenues of $202 million and EBITDA of $21 million in Q4 2022, representing sequential increases of 7% and 30% respectively, after excluding a litigation-related settlement gain of $6.1 million from Q3 2022 [3][6][19] - Backlog increased by 19% sequentially to $308 million as of December 31, 2022, driven by quarterly bookings of $152 million, yielding a book-to-bill ratio of 1.5 times [4][19] - Net income for the quarter was $2.9 million, or $0.05 per share, with free cash flow of $11 million after capital expenditures [6][32] Business Segment Data and Key Metrics Changes - Offshore Manufactured Products segment revenues rose 9% sequentially to $105 million, with segment EBITDA of $17.8 million [13][37] - Downhole Technology segment revenues decreased 10% sequentially to $13 million, with segment EBITDA down 75% due to timing issues and supply chain challenges [14][23] - Wellsite Services segment achieved a 12% sequential increase in revenues to $68 million, with segment EBITDA increasing by 29% [33][40] Market Data and Key Metrics Changes - Global oil and gas inventories have recovered to within five-year seasonal averages, leading to lower commodity prices year-over-year [43] - WTI and Brent crude oil prices remain above $76 and $83 per barrel respectively, while natural gas is trading at approximately $2.30 per MMBtu [45] - The company expects annual revenues to grow about 15% on a consolidated year-over-year basis, with EBITDA projected between $92 million and $100 million [44] Company Strategy and Development Direction - The company is focused on expanding its product offerings in renewable and clean tech energy systems while continuing to support traditional subsea and offshore projects [21][28] - The company plans to invest approximately $25 million in capital expenditures for 2023, with a focus on optimizing operations and pursuing profitable activities [18][85] - A $25 million stock repurchase program has been approved, reflecting confidence in liquidity and shareholder returns [5][84] Management's Comments on Operating Environment and Future Outlook - Management noted supply chain challenges, labor access, and rising inflation as ongoing issues affecting the industry [24] - The company anticipates continued performance in Wellsite Services and Downhole Technologies segments, driven by improved market activity indicators [25] - Management expressed optimism about growth in offshore markets and the visibility of order flow in production infrastructure projects [76][80] Other Important Information - The company has been free cash flow positive for 30 of the last 36 quarters, indicating strong operational efficiency [16] - As of December 31, 2022, the company had no borrowings under its revolving credit facility, with available liquidity totaling $134 million [7] Q&A Session Summary Question: What is the outlook for 2023 regarding growth in Wellsite and Downhole segments? - Management indicated that both segments are expected to grow, with Wellsite Services likely having a modestly higher growth rate due to unique supply chain challenges in Downhole [59][102] Question: How is the company addressing supply chain challenges? - Management reported improvements in headcount for completion services, but noted ongoing struggles in hiring for manufacturing facilities in Downhole [72][74] Question: What is the competitive landscape for Downhole Technologies? - Management highlighted a more level playing field in the competitive landscape, with a focus on integrated gun systems and international expansion opportunities [119]

Oil States International, Inc. (NYSE:OIS) Q3 2022 Earnings Conference Call October 28, 2022 10:00 AM ET Corporate Participants Ellen Pennington - Counsel and Assistant Corporate Secretary Cindy Taylor - President and Chief Executive Officer Lloyd Hajdik - Executive Vice President and Chief Financial Officer Conference Call Participants Stephen Gengaro - Stifel Sean Mitchell - Daniel Energy Partners Operator Welcome to the Oil States International, Inc. Third Quarter 2022 Earnings Conference Call. My name is ...

____________________ FORM 10-Q ____________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 Table of Contents or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission file number: 001-16337 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Exact name of registrant as specified in its charter) ( ...

Oil States International, Inc. (NYSE:OIS) Q2 2022 Earnings Conference Call July 28, 2022 11:00 AM ET Company Participants Ellen Pennington - Counsel & Assistant Corporate Secretary Cindy Taylor - President & Chief Executive Officer Lloyd Hajdik - Executive Vice President & Chief Financial Officer Conference Call Participants Stephen Gengaro - Stifel Operator Welcome to the Oil States International, Inc. Second Quarter 2022 Earnings Conference Call. My name is Jenny. I'll be your operator for today's call. [ ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________ FORM 10-Q ____________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ Commission file number: 001-16337 OIL STATES INTERNATIONAL, INC. (Exact name of registrant as s ...