What changed in this filing

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Item 1. Financial Statements

2023-10-27 compared with 2023-07-27 · 134 added, 121 removed, 427 unchanged (37% of the section changed)

2 unchanged sentences

(In Thousands, Except Per Share Amounts)

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

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

23 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 June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

4 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, Except Share Amounts)

September 30,

2023 December 31, 2022

35 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 June 30, 2023 Common

Three Months Ended September 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

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

Net income — — 4,212 — — 4,212

4 unchanged sentences

Surrender of stock to settle taxes on stock awards — — — — — —

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

Six Months Ended June 30, 2023 Common

Balance, September 30, 2023 $ 772 $ 1,127,443 $ 278,955 $ ( 77,271 ) $ ( 631,535 ) $ 698,364

Nine Months Ended September 30, 2023 Common

Stock Additional

11 unchanged sentences

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

Balance, September 30, 2023 $ 772 $ 1,127,443 $ 278,955 $ ( 77,271 ) $ ( 631,535 ) $ 698,364

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 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

Net loss — — ( 5,144 ) — — ( 5,144 )

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

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

Net income — — 2,143 — — 2,143

Currency translation adjustments (excluding intercompany advances) — — — ( 10,363 ) — ( 10,363 )

Currency translation adjustments on intercompany advances — — — ( 1,576 ) — ( 1,576 )

Issuance of common stock in connection with settlement of disputes with seller of GEODynamics, Inc.

19 10,313 — — — 10,332

Stock-based compensation expense — 1,663 — — — 1,663

Surrender of stock to settle taxes on stock awards — — — — — —

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, September 30, 2022 $ 766 $ 1,120,607 $ 269,142 $ ( 89,789 ) $ ( 626,586 ) $ 674,140

Nine Months Ended September 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

2 unchanged sentences

Currency translation adjustments on intercompany advances — — — ( 187 ) — ( 187 )

Issuance of common stock in connection with settlement of disputes with seller of GEODynamics, Inc.

19 10,313 — — — 10,332

Stock-based compensation expense 8 5,159 — — — 5,167

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

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

Balance, September 30, 2022 $ 766 $ 1,120,607 $ 269,142 $ ( 89,789 ) $ ( 626,586 ) $ 674,140

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

Tabl e of Contents

OIL STATES INTERNATIONAL, INC.

2 unchanged sentences

(In Thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

Net income (loss) $ 6,928 $ ( 12,425 )

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

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

Depreciation and amortization expense 46,209 51,469

1 unchanged sentence

Amortization of deferred financing costs 1,344 1,416

Deferred income tax provision 997 2,584

Deferred income tax provision (benefit) ( 66 ) 1,295

Gains on disposals of assets ( 3,335 ) ( 1,538 )

7 unchanged sentences

Other operating assets and liabilities, net 2,905 2,586

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

Net cash flows provided by operating activities 52,377 18,993

Cash flows from investing activities:

9 unchanged sentences

( 17,315 ) ( 6,272 )

Payment of promissory note to seller of GEODynamics, Inc.

Other debt and finance lease repayments ( 340 ) ( 541 )

29 unchanged sentences

The financial statements included in this report should be read in conjunction with the Company's audited financial statements and accompanying notes included in its Annual Report on Form 10-K for the year ended December 31, 2022.

Charges and Benefits

During the third quarter of 2023, the Offshore/Manufactured Products segment recognized facility consolidation charges totaling $ 1.6 million in connection with the ongoing consolidation and relocation of certain manufacturing and service facilities and the relocation of related equipment.

In the third quarter of 2022, the Offshore/Manufactured Products segment recognized a gain of $ 6.1 million associated with the settlement of outstanding litigation against certain service providers.

Details of Selected Balance Sheet Accounts

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

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

September 30,

2023 December 31,

8 unchanged sentences

Allowance for doubtful accounts as a percentage of total accounts receivable 3 % 2 %

2023 December 31,

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

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 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,

September 30,

2023 December 31,

Deferred revenue (contract liabilities) $ 50,370 $ 44,790

As of September 30, 2023, accounts receivable, net in the United States and the United Kingdom represented 68 % and 11 %, respectively, of the total.

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

For the nine months ended September 30, 2023, the $ 16.6 million net decrease in contract assets was attributable to $ 39.9 million transferred to accounts receivable during the period, which was partially offset by $ 23.3 million in revenue recognized.

Deferred revenue (contract liabilities) increased by $ 5.6 million in the first nine months of 2023, reflecting $ 20.7 million in new customer billings which were not recognized as revenue during the period, partially offset by the recognition of $ 15.1 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 nine months ended September 30, 2023 and 2022 (in thousands):

Nine Months Ended September 30,

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

1 unchanged sentence

Write-offs ( 208 ) ( 1,581 )

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

Allowance for doubtful accounts – September 30 $ 5,059 $ 4,399

September 30,

2023 December 31,

6 unchanged sentences

$ 206,541 $ 182,658

September 30,

2023 December 31,

3 unchanged sentences

$ 279,146 $ 303,835

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

During 2023, certain facilities in the Offshore/Manufactured Products segment were reclassified as held for sale assets, and transferred from property, plant and equipment to prepaid and other current assets.

The carrying value of these facilities totaled $ 17.2 million as of September 30, 2023.

For the three months ended September 30, 2023 and 2022, depreciation expense was $ 11.1 million and $ 11.3 million, respectively.

Depreciation expense was $ 33.3 million and $ 35.9 million, respectively, for the nine months ended September 30, 2023 and 2022.

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023 December 31, 2022

Amount Accumulated

7 unchanged sentences

$ 263,678 $ 106,601 $ 157,077 $ 263,497 $ 93,699 $ 169,798

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.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended September 30, 2023 and 2022, amortization expense was $ 4.3 million and $ 5.1 million, respectively.

Amortization expense was $ 12.9 million and $ 15.5 million for the nine months ended September 30, 2023 and 2022, respectively.

September 30,

2023 December 31,

5 unchanged sentences

$ 25,687 $ 25,687

September 30,

2023 December 31,

8 unchanged sentences

Long-term Debt

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

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

September 30,

2023 December 31,

7 unchanged sentences

____________________

(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.

(1) Unamortized deferred financing costs of $ 1.3 million and $ 1.9 million as of September 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 September 30, 2023 and December 31, 2022.

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Revolving Credit Facility

5 unchanged sentences

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 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.

As of September 30, 2023, the Company had no borrowings outstanding under the ABL Facility and $ 16.4 million of outstanding letters of credit.

The total amount available to be drawn as of September 30, 2023 was $ 84.5 million, calculated based on the current borrowing base less outstanding borrowings and letters of credit.

As of September 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.

5 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 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.

As of September 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.

Fair Value Measurements

The Company's financial instruments consist of cash and cash equivalents, investments, receivables, payables and debt instruments.

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 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.

1 unchanged sentence

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Fair Value Measurements

The Company's financial instruments consist of cash and cash equivalents, investments, receivables, payables and debt instruments.

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 September 30, 2023 was $ 151.0 million based on quoted market prices (a Level 2 fair value measurement), which compares to the principal amount of $ 135.0 million.

Stockholders' Equity

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 six 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 nine months of 2023 (in thousands):

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

2 unchanged sentences

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.

Shares of common stock outstanding – September 30, 2023 63,889

As of September 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.

The amount remaining under the Company's share repurchase authorization as of September 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.

2 unchanged sentences

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 $ 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.

Accumulated other comprehensive loss decreased from $ 78.9 million at December 31, 2022 to $ 77.3 million at September 30, 2023.

For the three and nine months ended September 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 nine months ended September 30, 2023, the exchange rates for the British pound and the Brazilian real strengthened by 1 % and 4 %, respectively, compared to the U.S.

dollar, contributing to other comprehensive income of $ 1.7 million.

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

During the nine months ended September 30, 2022, the exchange rate for the British pound weakened by 18 % compared to the U.S.

dollar while the Brazilian real strengthened by 3 % compared to the U.S.

dollar, contributing to other comprehensive loss of $ 23.8 million.

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

The income tax expense for the three and nine months ended September 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 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

For the three months ended September 30, 2023, the Company's income tax expense was $ 0.2 million on pre-tax income of $ 4.4 million, which included certain non-deductible expenses, discrete tax items and a reduction in valuation allowances recorded against deferred tax assets.

This compares to an income tax expense of $ 0.8 million on pre-tax income of $ 2.9 million, which which was negatively impacted by valuation allowances recorded against deferred tax assets as well as certain non-deductible expenses and discrete tax items, for the three months ended September 30, 2022.

OIL STATES INTERNATIONAL, INC.

1 unchanged sentence

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the nine months ended September 30, 2023, the Company's income tax expense was $ 2.7 million on pre-tax income of $ 9.6 million, which included certain non-deductible expenses, discrete tax items and a reduction in valuation allowances recorded against deferred tax assets.

This compares to an income tax expense of $ 6.0 million on a pre-tax loss of $ 6.4 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 nine months ended September 30, 2022.

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 and six months ended June 30, 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 nine months ended September 30, 2023 and 2022 (in thousands, except per share amounts):

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

16 unchanged sentences

Diluted 0.07 0.03 0.11 ( 0.20 )

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.

The calculation of diluted net income per share for the three and nine months ended September 30, 2023 excluded 159 thousand shares and 177 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 nine months ended September 30, 2022 excluded 249 thousand shares and 287 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.

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 six months ended June 30, 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 nine months ended September 30, 2023 (in thousands):

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

3 unchanged sentences

Forfeited ( 87 ) ( 15 ) —

Outstanding – June 30, 2023 161 1,249 705

Outstanding – September 30, 2023 158 1,234 705

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

2 unchanged sentences

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.

AND SUBSIDIARIES

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.

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

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.

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.

Conversely, if actual performance falls below the predefined target, the number of shares vested is reduced.

If the actual performance falls below the threshold performance level, no restricted shares will vest.

If the actual performance falls below the threshold performance level, no shares will vest.

The Company issued conditional long-term cash incentive awards ("Cash Awards") of $ 1.5 million in the first quarters of 2023 and 2022.

2 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 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.

Stock-based compensation expense recognized during the three and nine months ended September 30, 2023 totaled $ 1.8 million and $ 5.2 million, respectively.

Stock-based compensation expense recognized during the three and nine months ended September 30, 2022 totaled $ 1.7 million and $ 5.2 million, respectively.

As of September 30, 2023, there was $ 8.8 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.

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Segments and Related Information

1 unchanged sentence

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

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).

Financial information by operating segment for the three and nine months ended September 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 June 30, 2023

Three Months Ended September 30, 2023

Offshore/Manufactured Products (1)

$ 111,043 $ 4,921 $ 17,804 $ 2,739 $ 536,263

Well Site Services 59,831 6,313 3,285 2,602 201,384

1 unchanged sentence

Corporate — 152 ( 10,781 ) 150 64,044

Total $ 183,529 $ 15,537 $ 3,269 $ 10,770 $ 1,045,020

$ 194,289 $ 15,416 $ 6,190 $ 6,032 $ 1,048,020

____________________

(1) Operating income included $ 1.6 million of facility consolidation charges.

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

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Offshore/Manufactured Products (2)

$ 96,037 $ 5,072 $ 13,373 $ 1,620 $ 540,940

Well Site Services 60,509 6,732 2,359 4,894 205,018

1 unchanged sentence

Corporate — 167 ( 10,332 ) 23 46,736

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

$ 189,394 $ 16,413 $ 5,058 $ 6,810 $ 1,050,370

____________________

(2) Operating income included a $ 6.1 million gain on settlement of outstanding litigation against certain service providers.

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

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Offshore/Manufactured Products (3)

$ 303,328 $ 14,236 $ 40,147 $ 7,936 $ 536,263

Well Site Services 191,425 19,023 14,983 14,046 201,384

1 unchanged sentence

Corporate — 470 ( 31,623 ) 427 64,044

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

$ 574,017 $ 46,209 $ 15,334 $ 23,370 $ 1,048,020

____________________

(3) Operating income included $ 1.6 million of facility consolidation charges.

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

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Offshore/Manufactured Products (4)

$ 276,616 $ 15,651 $ 33,010 $ 3,093 $ 540,940

Well Site Services 163,500 22,059 ( 435 ) 9,360 205,018

1 unchanged sentence

Corporate — 510 ( 29,611 ) 153 46,736

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):

$ 535,272 $ 51,469 $ ( 368 ) $ 13,263 $ 1,050,370

_______________

(4) Operating income (loss) included a $ 6.1 million gain on settlement of outstanding litigation against certain service providers.

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following tables provide supplemental disaggregated revenue from contracts with customers by operating segment for the three and nine months ended September 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 June 30

Three Months Ended September 30

Project-driven:

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2023 2022 2023 2022 2023 2022 2023 2022

Six Months Ended June 30

Nine Months Ended September 30

Project-driven:

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$ 303,328 $ 276,616 $ 191,425 $ 163,500 $ 79,264 $ 95,156 $ 574,017 $ 535,272

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.

Revenues from products and services transferred to customers over time accounted for approximately 66 % and 63 % of consolidated revenues for the nine months ended September 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 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.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2023, the Company had $ 225.9 million of remaining backlog related to contracts with an original expected duration of greater than one year .

Approximately 19 % of this remaining backlog is expected to be recognized as revenue over the remaining three months of 2023, with an additional 51 % recognized in 2024 and the balance thereafter.

Commitments and Contingencies

The Company is a party to various pending or threatened claims, lawsuits and administrative proceedings seeking damages or other remedies concerning its commercial operations, products, employees and other matters, including occasional claims by individuals alleging exposure to hazardous materials as a result of the Company's products or operations.

Some of these claims relate to matters occurring prior to the acquisition of businesses, and some relate to businesses the Company has sold.

In certain cases, the Company is entitled to indemnification from the sellers of businesses and, in other cases, the Company has indemnified the buyers of businesses.

Although the Company can give no assurance about the outcome of pending legal and administrative proceedings and the effect such outcomes may have on the Company, management believes that any ultimate liability resulting from the outcome of such proceedings, to the extent not otherwise provided for or covered by indemnity or insurance, will not have a material adverse effect on the Company's consolidated financial position, results of operations or liquidity.

Although the Company can give no assurance about the outcome of pending legal and administrative proceedings and the effect such outcomes may have on the Company, management believes that any ultimate liability resulting from the outcome of such proceedings, to the extent not otherwise covered by insurance, will not have a material adverse effect on the Company's consolidated financial position, results of operations or liquidity.

C autionary Statement Regarding Forward-Looking Statements

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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 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;

• the impact of the ongoing military actions in Europe and the Middle East, 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;

• the ability and willingness of the Organization of Petroleum Exporting Countries ("OPEC") and other producing nations to set and maintain oil production levels and pricing;

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• the level of offshore oil and natural gas developmental activities;

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

bank failures which occurred in March, May and July of 2023;

• the financial health of our customers;

29 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