What changed in this filing

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Item 1. Financial Statements

2023-07-27 compared with 2023-04-28 · 168 added, 82 removed, 380 unchanged (40% of the section changed)

2 unchanged sentences

(In Thousands, Except Per Share Amounts)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2023 2022 2023 2022

Products $ 92,630 $ 99,033 $ 192,470 $ 184,794

7 unchanged sentences

Depreciation and amortization expense 15,537 17,239 30,793 35,056

Other operating expense, net 317 126

Other operating income, net ( 835 ) ( 228 ) ( 518 ) ( 102 )

180,260 182,924 370,584 351,304

12 unchanged sentences

The accompanying notes are an integral part of these financial statements.

Tabl e of Contents

OIL STATES INTERNATIONAL, INC.

2 unchanged sentences

(In Thousands)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2023 2022 2023 2022

Net income (loss) $ 558 $ ( 5,144 ) $ 2,716 $ ( 14,568 )

Other comprehensive income:

Other comprehensive income (loss):

Currency translation adjustments 3,270 ( 12,680 ) 7,419 ( 11,819 )

1 unchanged sentence

The accompanying notes are an integral part of these financial statements.

Tabl e of Contents

OIL STATES INTERNATIONAL, INC.

39 unchanged sentences

The accompanying notes are an integral part of these financial statements.

Tabl e of Contents

OIL STATES INTERNATIONAL, INC.

2 unchanged sentences

(In Thousands)

Three Months Ended March 31, 2023 Common

Three Months Ended June 30, 2023 Common

Stock Additional

4 unchanged sentences

Stockholders'

Balance, March 31, 2023 $ 771 $ 1,123,876 $ 274,185 $ ( 74,792 ) $ ( 628,522 ) $ 695,518

Net income — — 558 — — 558

Currency translation adjustments (excluding intercompany advances) — — — 2,709 — 2,709

Currency translation adjustments on intercompany advances — — — 561 — 561

Stock-based compensation expense 1 1,771 — — — 1,772

Stock repurchases — — — — ( 3,001 ) ( 3,001 )

Surrender of stock to settle taxes on stock awards — — — — ( 12 ) ( 12 )

Balance, June 30, 2023 $ 772 $ 1,125,647 $ 274,743 $ ( 71,522 ) $ ( 631,535 ) $ 698,105

Six Months Ended June 30, 2023 Common

Stock Additional

Capital Retained

Earnings Accumulated

Comprehensive

Loss Treasury

Stockholders'

Balance, December 31, 2022 $ 766 $ 1,122,292 $ 272,027 $ ( 78,941 ) $ ( 626,586 ) $ 689,558

3 unchanged sentences

Stock-based compensation expense 6 3,355 — — — 3,361

Stock repurchases — — — — ( 3,001 ) ( 3,001 )

Surrender of stock to settle taxes on stock awards — — — — ( 1,948 ) ( 1,948 )

Balance, June 30, 2023 $ 772 $ 1,125,647 $ 274,743 $ ( 71,522 ) $ ( 631,535 ) $ 698,105

The accompanying notes are an integral part of these financial statements.

Tabl e of Contents

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In Thousands)

Three Months Ended June 30, 2022 Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Total Stockholders' Equity

Balance, March 31, 2022 $ 746 $ 1,106,963 $ 272,143 $ ( 65,170 ) $ ( 626,574 ) $ 688,108

Three Months Ended March 31, 2022 Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Total Stockholders' Equity

Net loss — — ( 5,144 ) — — ( 5,144 )

Currency translation adjustments (excluding intercompany advances) — — — ( 9,628 ) — ( 9,628 )

Currency translation adjustments on intercompany advances — — — ( 3,052 ) — ( 3,052 )

Stock-based compensation expense 1 1,668 — — — 1,669

Surrender of stock to settle taxes on stock awards — — — — ( 12 ) ( 12 )

Balance, June 30, 2022 $ 747 $ 1,108,631 $ 266,999 $ ( 77,850 ) $ ( 626,586 ) $ 671,941

Six Months Ended June 30, 2022 Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Total Stockholders' Equity

Balance, December 31, 2021 $ 739 $ 1,105,135 $ 281,567 $ ( 66,031 ) $ ( 625,584 ) $ 695,826

4 unchanged sentences

Surrender of stock to settle taxes on stock awards — — — — ( 1,002 ) ( 1,002 )

Balance, March 31, 2022 $ 746 $ 1,106,963 $ 272,143 $ ( 65,170 ) $ ( 626,574 ) $ 688,108

Balance, June 30, 2022 $ 747 $ 1,108,631 $ 266,999 $ ( 77,850 ) $ ( 626,586 ) $ 671,941

The accompanying notes are an integral part of these financial statements.

Tabl e of Contents

OIL STATES INTERNATIONAL, INC.

2 unchanged sentences

(In Thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

Net income (loss) $ 2,716 $ ( 14,568 )

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Depreciation and amortization expense 30,793 35,056

1 unchanged sentence

Amortization of deferred financing costs 892 944

Deferred income tax provision (benefit) 396 ( 174 )

Deferred income tax provision 997 2,584

Gains on disposals of assets ( 561 ) ( 1,185 )

Settlement of disputes with seller of GEODynamics, Inc.

Other, net ( 267 ) 360

Changes in operating assets and liabilities:

Changes in operating assets and liabilities, net of effect from acquired business:

Accounts receivable 39,042 ( 20,469 )

3 unchanged sentences

Other operating assets and liabilities, net 653 ( 870 )

Net cash flows used in operating activities ( 5,918 ) ( 10,735 )

Net cash flows provided by (used in) operating activities 38,742 ( 10,035 )

Cash flows from investing activities:

1 unchanged sentence

Proceeds from disposition of property and equipment 690 1,652

Acquisition of business, net of cash acquired — ( 8,125 )

Other, net ( 66 ) ( 85 )

4 unchanged sentences

Repayment of 1.50 % convertible senior notes

Other debt and finance lease repayments, net ( 106 ) ( 165 )

( 17,315 ) ( 6,272 )

Other debt and finance lease repayments ( 226 ) ( 359 )

Payment of financing costs ( 95 ) ( 74 )

Purchases of treasury stock ( 3,001 ) —

Shares added to treasury stock as a result of net share settlements

21 unchanged sentences

Actual results could materially differ from those estimates.

The Company revised its presentation of supplemental disclosure of disaggregated revenue information in Note 9, "Segments and Related Information," in the second quarter of 2023.

Prior-period disclosures of disaggregated revenue information were conformed with the current-period presentation.

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, which are adopted by the Company as of the specified effective date.

2 unchanged sentences

Details of Selected Balance Sheet Accounts

Additional information regarding selected balance sheet accounts as of March 31, 2023 and December 31, 2022 is presented below (in thousands):

Additional information regarding selected balance sheet accounts as of June 30, 2023 and December 31, 2022 is presented below (in thousands):

2023 December 31,

10 unchanged sentences

Deferred revenue (contract liabilities) $ 53,027 $ 44,790

As of March 31, 2023, accounts receivable, net in the United States and the United Kingdom represented 75 % and 12 %, respectively, of the total.

No other country or single customer accounted for more than 10% of the Company's total accounts receivable as of March 31, 2023.

As of June 30, 2023, accounts receivable, net in the United States and the United Kingdom represented 73 % and 10 %, respectively, of the total.

No other country or single customer accounted for more than 10% of the Company's total accounts receivable as of June 30, 2023.

Table of Co ntents

OIL STATES INTERNATIONAL, INC.

1 unchanged sentence

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2023, the $ 14.9 million net decrease in contract assets was attributable to $ 27.8 million transferred to accounts receivable during the period, which was partially offset by $ 12.9 million in revenue recognized.

Deferred revenue (contract liabilities) increased by $ 4.2 million in the first three months of 2023, reflecting $ 13.2 million in new customer billings which were not recognized as revenue during the period, partially offset by the recognition of $ 9.0 million of revenue that was deferred at the beginning of the period.

The following provides a summary of activity in the allowance for doubtful accounts for the three months ended March 31, 2023 and 2022 (in thousands):

Three Months Ended March 31,

For the six months ended June 30, 2023, the $ 18.9 million net decrease in contract assets was attributable to $ 37.3 million transferred to accounts receivable during the period, which was partially offset by $ 18.4 million in revenue recognized.

Deferred revenue (contract liabilities) increased by $ 8.2 million in the first six months of 2023, reflecting $ 20.6 million in new customer billings which were not recognized as revenue during the period, partially offset by the recognition of $ 12.4 million of revenue that was deferred at the beginning of the period.

The following provides a summary of activity in the allowance for doubtful accounts for the six months ended June 30, 2023 and 2022 (in thousands):

Six Months Ended June 30,

Allowance for doubtful accounts – January 1 $ 5,226 $ 4,471

1 unchanged sentence

Write-offs ( 204 ) ( 629 )

Allowance for doubtful accounts – March 31 $ 5,359 $ 4,779

Allowance for doubtful accounts – June 30 $ 5,073 $ 5,166

2023 December 31,

11 unchanged sentences

$ 296,015 $ 303,835

For the three months ended March 31, 2023 and 2022, depreciation expense was $ 11.0 million and $ 12.7 million, respectively.

March 31, 2023 December 31, 2022

During the second quarter of 2023, a facility held for sale by the Offshore/Manufactured Products segment was reclassified from property, plant and equipment to prepaid and other current assets.

The estimated fair value of the facility exceeded its net carrying value of $ 6.9 million and, thus no impairment charge was recognized.

For the three months ended June 30, 2023 and 2022, depreciation expense was $ 11.2 million and $ 12.0 million, respectively.

Depreciation expense was $ 22.2 million and $ 24.6 million, respectively, for the six months ended June 30, 2023 and 2022.

June 30, 2023 December 31, 2022

Amount Accumulated

7 unchanged sentences

$ 263,792 $ 102,316 $ 161,476 $ 263,497 $ 93,699 $ 169,798

For the three months ended March 31, 2023 and 2022, amortization expense was $ 4.3 million and $ 5.2 million, respectively.

For the three months ended June 30, 2023 and 2022, amortization expense was $ 4.3 million and $ 5.3 million, respectively.

Amortization expense was $ 8.6 million and $ 10.4 million for the six months ended June 30, 2023 and 2022, respectively.

Table of Co ntents

OIL STATES INTERNATIONAL, INC.

8 unchanged sentences

$ 27,799 $ 25,687

____________________

(1) Unamortized deferred financing costs are presented as an offset to outstanding borrowing under the ABL Facility as of March 31, 2023.

2023 December 31,

8 unchanged sentences

Long-term Debt

As of March 31, 2023 and December 31, 2022, long-term debt consisted of the following (in thousands):

As of June 30, 2023 and December 31, 2022, long-term debt consisted of the following (in thousands):

2023 December 31,

7 unchanged sentences

____________________

(1) Outstanding borrowings under the revolving credit facility are presented net of $ 1.7 million of unamortized deferred financing costs as of March 31, 2023.

Unamortized deferred financing costs of $ 1.9 million as of December 31, 2022 are presented in other noncurrent assets.

(2) The outstanding principal amount of the 2026 Notes was $ 135.0 million as of March 31, 2023 and December 31, 2022.

(1) Unamortized deferred financing costs of $ 1.5 million and $ 1.9 million as of June 30, 2023 and December 31, 2022, respectively, are presented in other noncurrent assets.

(2) The outstanding principal amount of the 2026 Notes was $ 135.0 million as of June 30, 2023 and December 31, 2022.

Revolving Credit Facility

2 unchanged sentences

The ABL Agreement matures on February 10, 2025 with a springing maturity 91 days prior to the maturity of any outstanding indebtedness with a principal amount in excess of $ 17.5 million.

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The ABL Agreement provides funding based on a borrowing base calculation that includes eligible U.S.

1 unchanged sentence

Borrowings under the ABL Agreement are secured by a pledge of substantially all of the Company's domestic assets (other than real property) and the stock of certain foreign subsidiaries.

Table of Co ntents

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Since December 13, 2022, borrowings under the ABL Agreement bear interest at a rate equal to the Secured Overnight Financing Rate ("SOFR") rate (subject to a floor rate of 0 %) plus a margin of 2.75 % to 3.25 %, or at a base rate plus a margin of 1.75 % to 2.25 %, in each case based on average borrowing availability.

5 unchanged sentences

or (iii) if an event of default has occurred and is continuing.

As of March 31, 2023, the Company had $ 5.0 million of outstanding ABL Facility borrowings and $ 15.9 million of outstanding letters of credit.

The total amount available to be drawn as of March 31, 2023 was $ 92.8 million, calculated based on the current borrowing base less outstanding borrowings and letters of credit.

As of March 31, 2023, the Company was in compliance with its debt covenants under the ABL Agreement.

As of June 30, 2023, the Company had no borrowings outstanding under the ABL Facility and $ 15.1 million of outstanding letters of credit.

The total amount available to be drawn as of June 30, 2023 was $ 90.9 million, calculated based on the current borrowing base less outstanding borrowings and letters of credit.

As of June 30, 2023, the Company was in compliance with its debt covenants under the ABL Agreement.

The Company issued $ 135.0 million aggregate principal amount of its 4.75 % convertible senior notes due 2026 (the "2026 Notes") pursuant to an indenture, dated as of March 19, 2021 (the "2026 Indenture"), between the Company and Computershare Trust Company, National Association, as successor trustee.

Net proceeds from the 2026 Notes offering, after deducting issuance costs, totaled $ 130.6 million.

The Company used $ 120.0 million of the cash proceeds to purchase $ 125.0 million principal amount of the outstanding 2023 Notes (as defined below) at a discount, with the balance added to cash on-hand.

The 2026 Notes bear interest at a rate of 4.75 % per year and will mature on April 1, 2026, unless earlier repurchased, redeemed or converted.

4 unchanged sentences

The Company's intent is to repay the principal amount of the 2026 Notes in cash and settle the conversion feature (if any) in shares of the Company's common stock.

As of March 31, 2023, none of the conditions allowing holders of the 2026 Notes to convert, or requiring us to repurchase the 2026 Notes, had been met.

As of June 30, 2023, none of the conditions allowing holders of the 2026 Notes to convert, or requiring us to repurchase the 2026 Notes, had been met.

On February 15, 2023, the Company's 1.50 % convertible senior notes due 2023 (the "2023 Notes") matured and the outstanding $ 17.3 million principal amount was repaid in full.

2 unchanged sentences

The Company believes that the carrying values of these instruments, other than the 2026 Notes, on the accompanying consolidated balance sheets approximate their fair values.

The estimated fair value of the 2026 Notes as of March 31, 2023 was $ 151.1 million based on quoted market prices (a Level 2 fair value measurement), which compares to the principal amount of $ 135.0 million.

The estimated fair value of the 2026 Notes as of June 30, 2023 was $ 143.9 million based on quoted market prices (a Level 2 fair value measurement), which compares to the principal amount of $ 135.0 million.

Table of Co ntents

OIL STATES INTERNATIONAL, INC.

3 unchanged sentences

Common and Preferred Stock

The following table provides details with respect to the changes to the number of shares of common stock, $ 0.01 par value, outstanding during the first three months of 2023 (in thousands):

The following table provides details with respect to the changes to the number of shares of common stock, $ 0.01 par value, outstanding during the first six months of 2023 (in thousands):

Shares of common stock outstanding – December 31, 2022 63,904

1 unchanged sentence

Shares withheld for taxes on vesting of stock awards ( 206 )

Shares of common stock outstanding – March 31, 2023 64,255

As of March 31, 2023 and December 31, 2022, the Company had 25,000,000 shares of preferred stock, $ 0.01 par value, authorized, with no shares issued or outstanding.

On February 16, 2023, the Company's Board of Directors authorized $ 25.0 million for the repurchases of the Company's common stock, par value $ 0.01 per share, through February 2025.

Purchases of treasury stock ( 439 )

Shares of common stock outstanding – June 30, 2023 63,903

As of June 30, 2023 and December 31, 2022, the Company had 25,000,000 shares of preferred stock, $ 0.01 par value, authorized, with no shares issued or outstanding.

On February 16, 2023, the Company's Board of Directors authorized $ 25.0 million for the repurchase of the Company's common stock, par value $ 0.01 per share, through February 2025.

During the second quarter of 2023, the Company repurchased 438,563 shares of common stock under the program at a total cost of $ 3.0 million.

The amount remaining under the Company's share repurchase authorization as of June 30, 2023 was $ 22.0 million.

Subject to applicable securities laws, such purchases will be at such times and in such amounts as the Company deems appropriate.

As of March 31, 2023, no repurchases were made under this authorization.

Accumulated Other Comprehensive Loss

1 unchanged sentence

dollar as used to translate certain of the international operations of the Company's operating segments.

Accumulated other comprehensive loss decreased from $ 78.9 million at December 31, 2022 to $ 74.8 million at March 31, 2023.

For the three months ended March 31, 2023 and 2022, currency translation adjustments recognized as a component of other comprehensive income were primarily attributable to the United Kingdom and Brazil.

During the three months ended March 31, 2023, the exchange rates for the British pound and the Brazilian real strengthened by 3 % and 2 %, respectively, compared to the U.S.

Accumulated other comprehensive loss decreased from $ 78.9 million at December 31, 2022 to $ 71.5 million at June 30, 2023.

For the three and six months ended June 30, 2023 and 2022, currency translation adjustments recognized as a component of other comprehensive income (loss) were primarily attributable to the United Kingdom and Brazil.

During the six months ended June 30, 2023, the exchange rates for the British pound and the Brazilian real strengthened by 5 % and 8 %, respectively, compared to the U.S.

dollar, contributing to other comprehensive income of $ 7.4 million.

During the three months ended March 31, 2022, the exchange rate for the British pound weakened by 3 % compared to the U.S.

During the six months ended June 30, 2022, the exchange rate for the British pound weakened by 10 % compared to the U.S.

dollar while the Brazilian real strengthened by 7 % compared to the U.S.

dollar, contributing to other comprehensive income of $ 0.9 million.

The income tax expense for the three months ended March 31, 2023 was calculated using a discrete approach.

dollar, contributing to other comprehensive loss of $ 11.8 million.

The income tax expense for the three and six months ended June 30, 2023 was calculated using a discrete approach.

This methodology was used because changes in the Company's results of operations and non-deductible expenses can materially impact the estimated annual effective tax rate.

For the three months ended March 31, 2023, the Company's income tax expense was $ 1.6 million on pre-tax income of $ 3.8 million, which included certain non-deductible expenses and discrete tax items.

This compares to an income tax expense of $ 3.4 million on a pre-tax loss of $ 6.0 million, which included the impact of valuation allowances recorded against tax assets as well as certain non-deductible expenses and discrete tax items, for the three months ended March 31, 2022.

For the three months ended June 30, 2023, the Company's income tax expense was $ 0.9 million on pre-tax income of $ 1.4 million, which included certain non-deductible expenses, discrete tax items and a favorable change in valuation allowances recorded against deferred tax assets.

This compares to an income tax expense of $ 1.8 million on a pre-tax loss of $ 3.4 million, which included the impact of changes in valuation allowances recorded against tax assets as well as certain non-deductible expenses and discrete tax items, for the three months ended June 30, 2022.

For the six months ended June 30, 2023, the Company's income tax expense was $ 2.5 million on pre-tax income of $ 5.2 million, which included certain non-deductible expenses, discrete tax items and a favorable change in valuation allowances recorded against deferred tax assets.

This compares to an income tax expense of $ 5.2 million on a pre-tax loss of $ 9.3 million, which included the impact of valuation allowances recorded against tax assets as well as certain non-deductible expenses and discrete tax items, for the six months ended June 30, 2022.

Table of Co ntents

OIL STATES INTERNATIONAL, INC.

2 unchanged sentences

Net Income (Loss) Per Share

The table below provides a reconciliation of the numerators and denominators of basic and diluted net income (loss) per share for the three months ended March 31, 2023 and 2022 (in thousands, except per share amounts):

The table below provides a reconciliation of the numerators and denominators of basic and diluted net income (loss) per share for the three and six months ended June 30, 2023 and 2022 (in thousands, except per share amounts):

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

Net income (loss) $ 558 $ ( 5,144 ) $ 2,716 $ ( 14,568 )

15 unchanged sentences

Diluted 0.01 ( 0.08 ) 0.04 ( 0.24 )

The calculation of diluted earnings per share for the three months ended March 31, 2023 and 2022 excluded 209 thousand shares and 298 thousand shares, respectively, issuable pursuant to outstanding stock options, due to their antidilutive effect.

Additionally, shares issuable upon conversion of the Company's convertible senior notes were excluded from each period due to, among other factors, the Company's share price.

The calculation of diluted net income per share for the three and six months ended June 30, 2023 excluded 163 thousand shares and 186 thousand shares, respectively, issuable pursuant to outstanding stock options, due to their antidilutive effect.

The calculation of diluted net loss per share for the three and six months ended June 30, 2022 excluded 264 thousand shares and 306 thousand shares, respectively, issuable pursuant to outstanding stock options, due to their antidilutive effect.

Additionally, shares issuable upon conversion of the 2026 Notes were excluded due to, among other factors, the Company's share price.

Long-Term Incentive Compensation

The following table presents a summary of activity for stock options, service-based restricted stock and stock unit awards, and performance-based stock unit awards for the three months ended March 31, 2023 (in thousands):

The following table presents a summary of activity for stock options, service-based restricted stock and stock unit awards, and performance-based stock unit awards for the six months ended June 30, 2023 (in thousands):

Stock Options Service-based Restricted Stock Performance- and Service-based Stock Units

1 unchanged sentence

Granted — 644 211

Vested — ( 513 ) —

Vested and distributed — ( 617 ) —

Forfeited ( 84 ) — —

Outstanding – March 31, 2023 163 1,264 662

Outstanding – June 30, 2023 161 1,249 705

Weighted average grant date fair value (2023 awards) $ 8.81 $ 8.66

1 unchanged sentence

Service-based restricted stock awards generally vest on a straight-line basis over a term of three years .

Service-based stock unit awards ( 39 thousand units outstanding as of March 31, 2023) vest over one-year , with the underlying shares issued at a specified future date.

Performance-based stock unit awards generally vest at the end of a three-year period, with the number of shares ultimately issued under the program dependent upon achievement of predefined specific performance objectives based on the Company's cumulative EBITDA over a three-year period.

Service-based stock unit awards vest over one-year , with the underlying shares issued at a specified future date.

Eighty-two thousand service-based stock units were outstanding as of June 30, 2023.

Performance-based stock unit awards generally

Table of Co ntents

OIL STATES INTERNATIONAL, INC.

1 unchanged sentence

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

vest at the end of a three-year period, with the number of shares ultimately issued under the program dependent upon achievement of predefined specific performance objectives based on the Company's cumulative EBITDA over a three-year period.

In the event the predefined targets are exceeded for any performance-based award, additional shares up to a maximum of 200 % of the target award may be granted.

5 unchanged sentences

Obligations related to the Cash Awards are classified as liabilities and recognized over their respective vesting periods.

Stock-based compensation expense recognized during the three months ended March 31, 2023 and 2022 totaled $ 1.6 million and $ 1.8 million, respectively.

As of March 31, 2023, there was $ 11.4 million of pre-tax compensation costs related to service-based and performance-based stock awards, which will be recognized in future periods as vesting conditions are satisfied.

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Stock-based compensation expense recognized during the three and six months ended June 30, 2023 totaled $ 1.8 million and $ 3.4 million, respectively.

Stock-based compensation expense recognized during the three and six months ended June 30, 2022 totaled $ 1.7 million and $ 3.5 million, respectively.

As of June 30, 2023, there was $ 10.6 million of total compensation costs related to unvested restricted stock awards, which is expected to be recognized in future periods as vesting conditions are satisfied.

Segments and Related Information

1 unchanged sentence

Offshore/Manufactured Products, Well Site Services and Downhole Technologies.

Financial information by operating segment for the three months ended March 31, 2023 and 2022 is summarized in the following tables (in thousands).

Financial information by operating segment for the three and six months ended June 30, 2023 and 2022 is summarized in the following tables (in thousands).

Revenues Depreciation and amortization Operating income (loss) Capital expenditures Total assets

Three Months Ended March 31, 2023

Three Months Ended June 30, 2023

Offshore/Manufactured Products $ 94,086 $ 4,647 $ 11,253 $ 4,662 $ 538,490

4 unchanged sentences

Revenues Depreciation and amortization Operating income (loss) Capital expenditures Total assets

Three Months Ended March 31, 2022

Three Months Ended June 30, 2022

Offshore/Manufactured Products $ 96,467 $ 5,249 $ 9,441 $ 571 $ 552,091

3 unchanged sentences

Total $ 181,834 $ 17,239 $ ( 1,090 ) $ 3,595 $ 1,052,303

The following tables provide supplemental disaggregated revenue from contracts with customers by operating segment for the three months ended March 31, 2023 and 2022 (in thousands):

Revenues Depreciation and amortization Operating income (loss) Capital expenditures Total assets

Six Months Ended June 30, 2023

Offshore/Manufactured Products $ 192,285 $ 9,315 $ 22,343 $ 5,197 $ 538,490

Well Site Services 131,594 12,710 11,698 11,444 204,437

Downhole Technologies 55,849 8,450 ( 4,055 ) 420 249,540

Corporate — 318 ( 20,842 ) 277 52,553

Total $ 379,728 $ 30,793 $ 9,144 $ 17,338 $ 1,045,020

Table of Co ntents

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Revenues Depreciation and amortization Operating income (loss) Capital expenditures Total assets

Six Months Ended June 30, 2022

Offshore/Manufactured Products $ 180,579 $ 10,579 $ 19,637 $ 1,473 $ 552,091

Well Site Services 102,991 15,327 ( 2,794 ) 4,466 195,444

Downhole Technologies 62,308 8,807 ( 2,990 ) 384 257,174

Corporate — 343 ( 19,279 ) 130 47,594

Total $ 345,878 $ 35,056 $ ( 5,426 ) $ 6,453 $ 1,052,303

The following tables provide supplemental disaggregated revenue from contracts with customers by operating segment for the three and six months ended June 30, 2023 and 2022 (in thousands):

Offshore/Manufactured Products Well Site Services Downhole Technologies Total

2023 2022 2023 2022 2023 2022 2023 2022

Three Months Ended March 31

Major revenue categories -

Project-driven products $ 39,132 $ 33,844 $ — $ — $ — $ — $ 39,132 $ 33,844

Completion products and services 17,955 13,580 65,406 45,166 30,942 31,760 114,303 90,506

Drilling services — — 1,652 3,006 — — 1,652 3,006

Other products 9,485 7,044 — — — — 9,485 7,044

Three Months Ended June 30

Project-driven:

Products $ 32,210 $ 41,098 $ — $ — $ — $ — $ 32,210 $ 41,098

Services 24,846 23,995 — — — — 24,846 23,995

Total project-driven 57,056 65,093 — — — — 57,056 65,093

Military and other products 7,965 7,763 — — — — 7,965 7,763

Products 29,065 23,611 — — 23,390 26,561 52,455 50,172

Services — — 64,536 54,819 1,517 3,987 66,053 58,806

Total short-cycle 29,065 23,611 64,536 54,819 24,907 30,548 118,508 108,978

Other products and services 31,627 29,644 — — — — 31,627 29,644

$ 94,086 $ 96,467 $ 64,536 $ 54,819 $ 24,907 $ 30,548 $ 183,529 $ 181,834

Revenues from products and services transferred to customers over time accounted for approximately 66 % and 62 % of consolidated revenues for the three months ended March 31, 2023 and 2022, respectively.

Offshore/Manufactured Products Well Site Services Downhole Technologies Total

2023 2022 2023 2022 2023 2022 2023 2022

Six Months Ended June 30

Project-driven:

Products $ 71,342 $ 74,942 $ — $ — $ — $ — $ 71,342 $ 74,942

Services 49,476 48,293 — — — — 49,476 48,293

Total project-driven 120,818 123,235 — — — — 120,818 123,235

Military and other products 14,962 13,109 — — — — 14,962 13,109

Products 56,505 44,235 — — 49,661 52,508 106,166 96,743

Services — — 131,594 102,991 6,188 9,800 137,782 112,791

Total short-cycle 56,505 44,235 131,594 102,991 55,849 62,308 243,948 209,534

$ 192,285 $ 180,579 $ 131,594 $ 102,991 $ 55,849 $ 62,308 $ 379,728 $ 345,878

Revenues from products and services transferred to customers over time accounted for approximately 66 % and 64 % of consolidated revenues for the six months ended June 30, 2023 and 2022, respectively.

The balance of revenues for the respective periods relates to products and services transferred to customers at a point in time.

As of March 31, 2023, the Company had $ 209.9 million of remaining backlog related to contracts with an original expected duration of greater than one year .

Approximately 35 % of this remaining backlog is expected to be recognized as revenue over the remaining nine months of 2023, with an additional 46 % recognized in 2024 and the balance thereafter.

As of June 30, 2023, the Company had $ 210.7 million of remaining backlog related to contracts with an original expected duration of greater than one year .

Approximately 33 % of this remaining backlog is expected to be recognized as revenue over the remaining six months of 2023, with an additional 47 % recognized in 2024 and the balance thereafter.

Table of Co ntents

OIL STATES INTERNATIONAL, INC.

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The following are important factors that could cause actual results to differ materially from those expressed in any forward-looking statement made by, or on behalf of, us:

• the impact of disruptions in the bank and capital markets, including the two U.S.

bank failures which occurred in March 2023;

• the impact of disruptions in the bank and capital markets, including the three U.S.

bank failures which occurred in March and May of 2023;

• the impact of the ongoing military action between Russia and Ukraine, that began in February 2022, including, but not limited to, energy market disruptions, supply chain disruptions and increased costs, government sanctions, and delays or potential cancellation of planned customer projects;

36 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements