Oil States International(US:OIS)2023-02-17 19:27Financial 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]