On February 20, 2024, Oil States International Inc (OIS, Financial) released its 8-K filing, announcing its financial results for the fourth quarter of 2023. The company, a global provider of manufactured products and services to the energy, industrial, and military sectors, reported a net income of $6.0 million, or $0.09 per diluted share, on consolidated revenues of $208.3 million. This represents a 7% sequential increase in revenue, driven by higher offshore and international activity, particularly in the Offshore/Manufactured Products segment, which saw a 24% sequential increase in revenue to $137.9 million—the highest level since the fourth quarter of 2015.
Segment Performance and Financial Highlights
The Offshore/Manufactured Products segment's strong performance was a key driver for the quarter, with a backlog totaling $333 million as of December 31. The segment's quarterly bookings amounted to $120 million, reflecting a book-to-bill ratio of 0.9x for the quarter and 1.1x for the full year. Notably, the segment received a significant production facility project award exceeding $10 million during the quarter.
However, the company faced challenges in its Well Site Services and Downhole Technologies segments, which experienced revenue declines of 14% and 18% sequentially, respectively. These declines were attributed to a reduction in U.S. land-based completion activity, influenced by an approximate 20% decline in the price of crude oil during the quarter and continued weak natural gas prices.
Despite these challenges, Oil States International Inc's financial achievements for the year included positive operating and net income for six consecutive quarters, year-over-year revenue growth, and positive free cash flow contributions. The company also highlighted its lower net debt and enhanced cash returns to stockholders.
Financial Condition and Outlook
Oil States International Inc ended the fourth quarter with $47.1 million in cash and cash equivalents, a decrease of $5.8 million during the quarter. The company reported no borrowings under its asset-based revolving credit facility and extended the maturity date of this facility to February 16, 2028. The company's liquidity position remained strong, with total liquidity of $123.2 million at the end of the quarter.
The company's President and CEO, Cindy B. Taylor, commented on the year's performance, stating, "We concluded the year with strong year-over-year revenue and Adjusted EBITDA growth, positive net income and free cash flow contributions, lower net debt and enhanced cash returns to stockholders." This statement reflects the company's resilience in a year marked by moderating North American activity and strengthening international and offshore growth.
For the oil and gas industry, the year 2023 can be summarized as a year in which North American activity started to moderate, while international and offshore growth strengthened. Our fourth quarter results reflect those trends with our Offshore/Manufactured Products segment revenues growing 24% sequentially, boosted by a 39% sequential-quarter increase in project-driven revenues. This significant growth was substantially offset by the impact of declines in U.S. land-based completion activity due to an approximate 20% decline in the price of crude oil during the quarter along with continued weak natural gas prices. Despite the reduction in U.S. activity levels during 2023, Oil States reported positive operating and net income for a sixth consecutive quarter.
For more detailed information on Oil States International Inc's financial performance, including full-year results and segment breakdowns, readers are encouraged to review the complete earnings release.
Oil States International Inc's earnings report underscores the company's ability to navigate a complex market environment and maintain a strong financial position. The company's focus on offshore and international growth, coupled with disciplined cost management and strategic investments, positions it well for future success.
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Explore the complete 8-K earnings release (here) from Oil States International Inc for further details.
