What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-07-29 compared with 2024-04-26 · 195 added, 89 removed, 423 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,

2024 2023 2024 2023

Products $ 108,579 $ 92,630 $ 202,908 $ 192,470

12 unchanged sentences

Interest expense, net ( 2,061 ) ( 2,059 ) ( 4,162 ) ( 4,450 )

Other income (expense), net ( 72 ) 276

Other income, net 652 210 580 486

Income (loss) before income taxes 636 1,420 ( 12,714 ) 5,180

Income tax provision ( 24 ) ( 1,602 )

Income tax benefit (provision) 665 ( 862 ) 641 ( 2,464 )

Net income (loss) $ 1,301 $ 558 $ ( 12,073 ) $ 2,716

10 unchanged sentences

(In Thousands)

Three Months Ended March 31,

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

2024 2023 2024 2023

Net income (loss) $ 1,301 $ 558 $ ( 12,073 ) $ 2,716

50 unchanged sentences

(In Thousands)

Three Months Ended March 31, 2024 Common

Three Months Ended June 30, 2024 Common

Stock Additional

4 unchanged sentences

Stockholders’

Balance, March 31, 2024 $ 785 $ 1,130,979 $ 271,544 $ ( 73,011 ) $ ( 637,979 ) $ 692,318

Net income — — 1,301 — — 1,301

Currency translation adjustments (excluding intercompany advances) — — — ( 79 ) — ( 79 )

Currency translation adjustments on intercompany advances — — — ( 3,072 ) — ( 3,072 )

Stock-based compensation expense 1 2,303 — — — 2,304

Surrender of stock to settle taxes on stock awards — — — — ( 9 ) ( 9 )

Stock repurchases — — — — ( 2,374 ) ( 2,374 )

Balance, June 30, 2024 $ 786 $ 1,133,282 $ 272,845 $ ( 76,162 ) $ ( 640,362 ) $ 690,389

Six Months Ended June 30, 2024 Common

Stock Additional

Capital Retained

Earnings Accumulated

Comprehensive

Loss Treasury

Stockholders'

Balance, December 31, 2023 $ 772 $ 1,129,240 $ 284,918 $ ( 69,984 ) $ ( 635,401 ) $ 709,545

4 unchanged sentences

Surrender of stock to settle taxes on stock awards — — — — ( 2,587 ) ( 2,587 )

Stock repurchases — — — — ( 2,374 ) ( 2,374 )

Balance, June 30, 2024 $ 786 $ 1,133,282 $ 272,845 $ ( 76,162 ) $ ( 640,362 ) $ 690,389

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

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In Thousands)

Three Months Ended June 30, 2023 Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Total Stockholders’ Equity

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

Three Months Ended March 31, 2023 Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Total Stockholders’ Equity

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

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

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

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 Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Total Stockholders’ Equity

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

4 unchanged sentences

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

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

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

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.

3 unchanged sentences

(In Thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

Net income (loss) $ ( 12,073 ) $ 2,716

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 28,893 30,793

4 unchanged sentences

Gains on disposals of assets ( 1,355 ) ( 561 )

Gains on extinguishment of 4.75 % convertible senior notes

Other, net ( 379 ) ( 267 )

5 unchanged sentences

Other operating assets and liabilities, net 2,341 653

Net cash flows used in operating activities ( 11,360 ) ( 5,918 )

Net cash flows provided by (used in) operating activities ( 1,118 ) 38,742

Cash flows from investing activities:

Capital expenditures ( 15,881 ) ( 17,338 )

Proceeds from disposition of equipment

Proceeds from disposition of property and equipment

Other, net ( 68 ) ( 66 )

3 unchanged sentences

Revolving credit facility repayments ( 22,619 ) ( 35,592 )

Purchases of 4.75 % convertible senior notes

Repayment of 1.50 % convertible senior notes

1 unchanged sentence

Payment of financing costs ( 1,111 ) ( 95 )

Purchases of treasury stock

( 2,374 ) ( 3,001 )

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

22 unchanged sentences

In the first quarter of 2024, certain short-cycle, consumable product operations historically reported within the Offshore Manufactured Products segment (legacy frac plug and elastomer products) were integrated into the Downhole Technologies segment to better align with the underlying activity demand drivers and current segment management structure, as well as provide for additional operational synergies.

Historical segment financial data and disaggregated revenue information in Note 10, “Segments and Related Information” were conformed with the current-period segment presentation.

Historical segment financial data and disaggregated revenue information as of and for the three and six months ended June 30, 2023, as presented in Note 10, “Segments and Related Information,” were conformed with the 2024 segment 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.

1 unchanged sentence

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, 2023.

Goodwill Impairment and Other Charges

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Goodwill Impairment and Other Charges and Credits

In 2023, the Company implemented initiatives to reduce future costs, which are continuing into 2024.

11 unchanged sentences

1,463 685 — — 2,148 451 1,697

Patent defense costs

— 361 — — 361 76 285

During the second quarter of 2024, the Company consolidated and exited additional locations, reduced its workforce in the United States and incurred additional costs to enforce certain patents.

As a result of these events, actions and assessments, the Company recorded the following charges during the second quarter of 2024 (in thousands):

Offshore Manufactured Products

Well Site Services

Downhole Technologies

Pre-tax Total

After-tax Total

Facility consolidation and other charges

$ 1,547 $ 1,916 $ — $ — $ 3,463 $ 727 $ 2,736

Patent defense costs

— 963 — — 963 202 761

Gains on extinguishment of debt (see Note 4)

— — — ( 515 ) ( 515 ) ( 108 ) ( 407 )

The Company does not amortize goodwill, but rather assesses goodwill for impairment annually and when an event occurs or circumstances change that indicate the carrying amounts may not be recoverable.

If the carrying amount of a reporting unit exceeds its fair value, goodwill is considered impaired and an impairment loss is recorded.

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Changes in the carrying amount of goodwill, by operating segment, for the three months ended March 31, 2024 were as follows (in thousands):

Changes in the carrying amount of goodwill, by operating segment, for the six months ended June 30, 2024 were as follows (in thousands):

Offshore Manufactured

6 unchanged sentences

Foreign currency translation ( 78 ) — ( 78 )

Balance as of March 31, 2024

Balance as of June 30, 2024

$ 69,789 $ — $ 69,789

2 unchanged sentences

The Company also performed an interim quantitative assessment of goodwill transferred to the Downhole Technologies segment (subsequent to the realignment).

This interim assessment indicated that the fair value of the reporting unit was less than its carrying amount and the Company concluded that goodwill reassigned to the Downhole Technologies business was fully impaired.

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company therefore recognized a non-cash goodwill impairment charge totaling $ 10.0 million in the first quarter of 2024.

6 unchanged sentences

Details of Selected Balance Sheet Accounts

Additional information regarding selected balance sheet accounts as of March 31, 2024 and December 31, 2023 is presented below (in thousands):

Additional information regarding selected balance sheet accounts as of June 30, 2024 and December 31, 2023 is presented below (in thousands):

2024 December 31,

10 unchanged sentences

Deferred revenue (contract liabilities) $ 34,404 $ 36,757

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of March 31, 2024, accounts receivable, net in the United States and the United Kingdom represented 65 % and 15 %, 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, 2024.

For the three months ended March 31, 2024, the $ 5.4 million net decrease in contract assets was primarily attributable to $ 27.4 million transferred to accounts receivable, which was partially offset by $ 22.0 million in revenue recognized during the period.

Deferred revenue (contract liabilities) increased by $ 4.8 million in the first three months of 2024, primarily reflecting $ 10.7 million in new customer billings which were not recognized as revenue during the period, partially offset by the recognition of $ 5.9 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, 2024 and 2023 (in thousands):

Three Months Ended March 31,

As of June 30, 2024, accounts receivable, net in the United States and the United Kingdom represented 68 % and 13 %, 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, 2024.

For the six months ended June 30, 2024, the $ 3.1 million net decrease in contract assets was primarily attributable to $ 34.9 million transferred to accounts receivable, which was partially offset by $ 31.8 million in revenue recognized during the period.

Deferred revenue (contract liabilities) decreased by $ 2.4 million in the first six months of 2024, primarily reflecting the recognition of $ 11.1 million of revenue that was deferred at the beginning of the period, partially offset by $ 8.8 million in new customer billings which were not recognized as revenue during the period.

The following provides a summary of activity in the allowance for doubtful accounts for the six months ended June 30, 2024 and 2023 (in thousands):

Six Months Ended June 30,

Allowance for doubtful accounts – January 1 $ 4,497 $ 5,226

2 unchanged sentences

Other ( 9 ) 37

Allowance for doubtful accounts – March 31 $ 4,369 $ 5,359

Allowance for doubtful accounts – June 30 $ 3,968 $ 5,073

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2024 December 31,

11 unchanged sentences

$ 270,878 $ 280,389

For the three months ended March 31, 2024 and 2023, depreciation expense was $ 9.9 million and $ 11.0 million, respectively.

March 31, 2024 December 31, 2023

For the three months ended June 30, 2024 and 2023, depreciation expense was $ 10.4 million and $ 11.2 million, respectively.

Depreciation expense was $ 20.3 million and $ 22.2 million, respectively, for the six months ended June 30, 2024 and 2023.

June 30, 2024 December 31, 2023

Amount Accumulated

5 unchanged sentences

Patents/technology/know-how

70,168 37,130 33,038 70,113 34,541 35,572

Tradenames and other 52,503 21,436 31,067 52,505 19,910 32,595

$ 263,992 $ 119,487 $ 144,505 $ 263,960 $ 110,950 $ 153,010

For the three months ended March 31, 2024 and 2023, amortization expense was $ 4.3 million and $ 4.3 million, respectively.

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended June 30, 2024 and 2023, amortization expense was $ 4.3 million and $ 4.3 million, respectively.

Amortization expense was $ 8.5 million and $ 8.6 million for the six months ended June 30, 2024 and 2023, respectively.

2024 December 31,

5 unchanged sentences

$ 24,365 $ 23,253

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

2024 December 31,

8 unchanged sentences

Long-term Debt

As of March 31, 2024 and December 31, 2023, long-term debt consisted of the following (in thousands):

As of June 30, 2024 and December 31, 2023, long-term debt consisted of the following (in thousands):

2024 December 31,

7 unchanged sentences

____________________

(1) Unamortized deferred financing costs of $ 1.8 million and $ 1.1 million as of March 31, 2024 and December 31, 2023, respectively, are presented in other noncurrent assets.

(2) The outstanding principal amount of the 2026 Notes was $ 135.0 million as of March 31, 2024 and December 31, 2023.

(1) Unamortized deferred financing costs of $ 1.8 million and $ 1.1 million as of June 30, 2024 and December 31, 2023, respectively, are presented in other noncurrent assets.

(2) The outstanding principal amount of the 2026 Notes was $ 123.5 million and $ 135.0 million as of June 30, 2024 and December 31, 2023, respectively .

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.

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Borrowings under the ABL Agreement bear interest at a rate equal to the Secured Overnight Financing 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.

2 unchanged sentences

The ABL Agreement contains customary default provisions, which, if triggered, could result in acceleration of repayment of all amounts then outstanding.

The ABL Agreement also requires the Company to satisfy and maintain a fixed charge coverage ratio of not less than 1.0 to 1.0 (i) in the event that availability under the ABL Agreement is less than the greater of (a) 15 % of the borrowing base and (b) $ 14.1 million;

The ABL Agreement also requires the Company to satisfy and maintain a fixed charge coverage

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

ratio of not less than 1.0 to 1.0 (i) in the event that availability under the ABL Agreement is less than the greater of (a) 15 % of the borrowing base and (b) $ 14.1 million;

(ii) to complete certain specified transactions;

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

As of March 31, 2024, the Company had no borrowings outstanding under the ABL Facility and $ 15.9 million of outstanding letters of credit.

The total amount available to be drawn as of March 31, 2024 was $ 86.3 million, calculated based on the current borrowing base less outstanding borrowings, if any, and letters of credit.

As of March 31, 2024, the Company was in compliance with its debt covenants under the ABL Agreement.

As of June 30, 2024, the Company had no borrowings outstanding under the ABL Facility and $ 14.4 million of outstanding letters of credit.

The total amount available to be drawn as of June 30, 2024 was $ 82.5 million, calculated based on the current borrowing base less outstanding borrowings, if any, and letters of credit.

As of June 30, 2024, 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.

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.

The following table provides a summary of the Company's purchases of outstanding 2026 Notes during the three and six months ended June 30, 2024, with non-cash gains reported within other income, net (in thousands):

Principal Amount Carrying Value of Liability Cash Paid Non-cash

Pre-Tax Gains Recognized

Three and Six Months Ended June 30, 2024

$ 11,500 $ 11,361 $ 10,846 $ 515

The outstanding 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.

Interest is payable semi-annually in arrears on April 1 and October 1 of each year.

3 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, 2024, 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, 2024, none of the conditions allowing holders of the 2026 Notes to convert, or requiring us to repurchase the 2026 Notes, had been met.

On January 30, 2018, the Company issued $ 200.0 million aggregate principal amount of its 1.50 % convertible senior notes due 2023 (the "2023 Notes") pursuant to an indenture, dated as of January 30, 2018.

3 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, 2024 was $ 132.8 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, 2024 was $ 118.7 million based on quoted market prices (a Level 2 fair value measurement), which compares to the principal amount of $ 123.5 million.

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 2024 (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 2024 (in thousands):

Shares of common stock outstanding – December 31, 2023 63,327

1 unchanged sentence

Shares withheld for taxes on vesting of stock awards ( 409 )

Shares of common stock outstanding – March 31, 2024 64,215

As of March 31, 2024 and December 31, 2023, the Company had 25,000,000 shares of preferred stock, $ 0.01 par value, authorized, with no shares issued or outstanding.

Purchases of treasury stock ( 543 )

Shares of common stock outstanding – June 30, 2024 63,789

As of June 30, 2024 and December 31, 2023, 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 three months ended March 31, 2024, there were no repurchases of common stock under the program.

The amount remaining under the Company’s share repurchase authorization as of March 31, 2024 was $ 18.1 million.

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

During the three and six months ended June 30, 2024, the Company purchased 543 thousand shares of common stock under the program at a total cost of $ 2.4 million.

The amount remaining under the Company’s share repurchase authorization as of June 30, 2024 was $ 15.8 million.

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 increased from $ 70.0 million at December 31, 2023 to $ 73.0 million at March 31, 2024.

For the three months ended March 31, 2024 and 2023, currency translation adjustments recognized as a component of other comprehensive income (loss) were primarily attributable to the United Kingdom and Brazil.

During the three months ended March 31, 2024, the exchange rates for the British pound and the Brazilian real weakened by 1 % and 3 %, respectively, compared to the U.S.

Accumulated other comprehensive loss increased from $ 70.0 million at December 31, 2023 to $ 76.2 million at June 30, 2024.

For the three and six months ended June 30, 2024 and 2023, 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, 2024, the exchange rates for the British pound and the Brazilian real weakened by 1 % and 12 %, respectively, compared to the U.S.

dollar, contributing to other comprehensive loss of $ 6.2 million.

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

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.

Income tax expense for the three months ended March 31, 2024 and 2023 was calculated using a discrete approach.

Income tax benefit (provision) for the three and six months ended June 30, 2024 and 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, 2024, the Company’s income tax expense was $ 24 thousand on a pre-tax loss of $ 13.4 million, which included a $ 10.0 million goodwill impairment charge (approximately $ 7.7 million of which was non-deductible) and other non-deductible expenses.

This compares to an income tax expense of $ 1.6 million on pre-tax income of $ 3.8 million, which included certain non-deductible expenses and discrete tax items, for the three months ended March 31, 2023.

For the three months ended June 30, 2024, the Company’s income tax benefit was $ 0.7 million on pre-tax income of $ 0.6 million, which included favorable changes in valuation allowances recorded against deferred tax assets and certain non-deductible expenses.

This compares to an income tax expense of $ 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, for the three months ended June 30, 2023.

For the six months ended June 30, 2024, the Company’s income tax benefit was $ 0.6 million on a pre-tax loss of $ 12.7 million, which included a $ 10.0 million goodwill impairment charge (approximately $ 7.7 million of which was non-deductible), other non-deductible expenses and favorable changes in valuation allowances recorded against deferred tax assets.

This compares to an income tax expense of $ 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 for the six months ended June 30, 2023.

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, 2024 and 2023 (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, 2024 and 2023 (in thousands, except per share amounts):

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Net income (loss) $ 1,301 $ 558 $ ( 12,073 ) $ 2,716

14 unchanged sentences

Diluted 0.02 0.01 ( 0.19 ) 0.04

The calculation of diluted earnings per share for the three months ended March 31, 2024 and 2023 excluded 122 thousand shares and 209 thousand shares, respectively, issuable pursuant to outstanding stock options, due to their antidilutive effect.

The calculation of diluted earnings per share for the three and six months ended June 30, 2024 excluded 77 thousand shares and 99 thousand shares, respectively, issuable pursuant to outstanding stock options, due to their antidilutive effect.

The calculation of diluted earnings 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.

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, 2024 (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, 2024 (in thousands):

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

3 unchanged sentences

Forfeited ( 81 ) ( 17 ) —

Outstanding – March 31, 2024 77 1,529 733

Outstanding – June 30, 2024 77 1,553 800

Weighted average grant date fair value (2024 awards) $ 5.88 $ 5.77

1 unchanged sentence

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

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 March 31, 2024.

Performance-based stock unit awards vest at the end

Service-based stock unit awards ( 149 thousand outstanding as of June 30, 2024) vest over one year , with the underlying shares issued at a specified future date.

Performance-based stock unit awards vest at the end of a three-year period, with the number of

OIL STATES INTERNATIONAL, INC.

1 unchanged sentence

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

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, 2024 and 2023 totaled $ 1.8 million and $ 1.6 million, respectively.

As of March 31, 2024, there was $ 11.8 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.

Stock-based compensation expense recognized during the three and six months ended June 30, 2024 totaled $ 2.3 million and $ 4.1 million, respectively.

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

As of June 30, 2024, there was $ 11.2 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

Segments and Related Information

In the first quarter of 2024, certain short-cycle, consumable product operations historically reported within the Offshore Manufactured Products segment were integrated into the Downhole Technologies segment (see Note 1, “Organization and Basis of Presentation”).

Historical segment financial data and supplemental disaggregated revenue information for the three months ended March 31, 2023 (presented below) were conformed with the current-period segment presentation.

The Company operates through three reportable operating segments:

The Company operates through three operating segments:

Offshore Manufactured Products, Well Site Services and Downhole Technologies.

Financial information by operating segment for the three months ended March 31, 2024 and 2023 is summarized in the following tables (in thousands).

Financial information by operating segment as of and for the three and six months ended June 30, 2024 and 2023 is summarized in the following tables (in thousands).

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

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

Offshore Manufactured Products (1)

3 unchanged sentences

Downhole Technologies 38,406 4,255 ( 1,141 ) 310 279,947

Corporate — 149 ( 10,636 ) 9 41,551

Total $ 186,383 $ 14,698 $ 2,045 $ 5,789 $ 1,001,178

____________________

(1) Operating income included $ 1.5 million of facility consolidation charges.

(2) Operating income included $ 2.9 million in facility consolidation and other charges.

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

Three Months Ended June 30, 2023

Offshore Manufactured Products $ 78,647 $ 4,075 $ 8,838 $ 4,587 $ 495,983

Well Site Services 64,536 6,564 4,732 5,672 204,437

Downhole Technologies 40,346 4,747 ( 121 ) 246 292,047

Corporate — 151 ( 10,180 ) 265 52,553

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

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

Six Months Ended June 30, 2024

Offshore Manufactured Products (3)

$ 188,413 $ 7,940 $ 24,960 $ 8,773 $ 502,582

Well Site Services (4)

93,713 12,126 ( 954 ) 6,332 177,098

Downhole Technologies (5)

71,519 8,525 ( 13,220 ) 756 279,947

Corporate — 302 ( 19,918 ) 20 41,551

Total $ 353,645 $ 28,893 $ ( 9,132 ) $ 15,881 $ 1,001,178

____________________

(3) Operating income included $ 3.0 million of facility consolidation charges.

(2) Operating loss included $ 1.0 million in facility consolidation and other charges.

(3) Operating loss included a $ 10.0 million non-cash goodwill impairment charge (see Note 2, “G oodwill Impairment and Other Charges”).

(4) Operating income included $ 3.9 million in facility consolidation and other charges.

(5) Operating loss included a $ 10.0 million non-cash goodwill impairment charge.

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

Three Months Ended March 31, 2023

Six Months Ended June 30, 2023

Offshore Manufactured Products

7 unchanged sentences

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following tables provide supplemental disaggregated revenue from contracts with customers by operating segment for the three months ended March 31, 2024 and 2023 (in thousands):

The following tables provide supplemental disaggregated revenue from contracts with customers by operating segment for the three and six months ended June 30, 2024 and 2023 (in thousands):

Offshore Manufactured Products

1 unchanged sentence

2024 2023 2024 2023 2024 2023 2024 2023

Three Months Ended March 31

Three Months Ended June 30

Project-driven:

3 unchanged sentences

Military and other products 10,780 8,346 — — — — 10,780 8,346

Short-cycle products and services

Products — — — — 38,047 38,829 38,047 38,829

Services — — 46,421 64,536 359 1,517 46,780 66,053

Total short-cycle — — 46,421 64,536 38,406 40,346 84,827 104,882

$ 101,556 $ 78,647 $ 46,421 $ 64,536 $ 38,406 $ 40,346 $ 186,383 $ 183,529

Offshore Manufactured Products

Well Site Services Downhole Technologies Total

2024 2023 2024 2023 2024 2023 2024 2023

Revenues from products and services transferred to customers over time accounted for approximately 67 % and 66 % of consolidated revenues for the three months ended March 31, 2024 and 2023, respectively.

Six Months Ended June 30

Project-driven:

Products $ 112,889 $ 94,072 $ — $ — $ — $ — $ 112,889 $ 94,072

Services 56,257 49,476 — — — — 56,257 49,476

Total project-driven 169,146 143,548 — — — — 169,146 143,548

Military and other products 19,267 15,604 — — — — 19,267 15,604

Products — — — — 70,752 82,794 70,752 82,794

Services — — 93,713 131,594 767 6,188 94,480 137,782

Total short-cycle — — 93,713 131,594 71,519 88,982 165,232 220,576

$ 188,413 $ 159,152 $ 93,713 $ 131,594 $ 71,519 $ 88,982 $ 353,645 $ 379,728

Revenues from products and services transferred to customers over time accounted for approximately 66 % of consolidated revenues for both the six months ended June 30, 2024 and 2023.

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, 2024, the Company had $ 203.0 million of remaining backlog related to contracts with an original expected duration of greater than one year.

Approximately 43 % of this remaining backlog is expected to be recognized as revenue over the remaining nine months of 2024, with an additional 33 % recognized in 2025 and the balance thereafter.

As of June 30, 2024, the Company had $ 202 million of remaining backlog related to contracts with an original expected duration of greater than one year.

Approximately 36 % of this remaining backlog is expected to be recognized as revenue over the remaining six months of 2024, with an additional 34 % recognized in 2025 and the balance thereafter.

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Commitments and Contingencies

8 unchanged sentences

Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Part II, Item 7A.

Quantitative and Qualitative Disclosures about Market Risk” included in our 2023 Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 21, 2024, as well as to “Part II, Item 1A.

Risk Factors” included in this Quarterly Report on Form 10-Q.

Quantitative and Qualitative Disclosures about Market Risk” included in our 2023 Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 21, 2024.

You can typically identify “forward-looking statements” by the use of forward-looking words such as “may,” “will,” “could,” “project,” “believe,” “anticipate,” “expect,” “estimate,” “potential,” “plan,” “forecast,” “proposed,” “should,” “seek,” and other similar words.

15 unchanged sentences

• the availability of and access to attractive oil and natural gas field prospects, which may be affected by governmental actions or actions of other parties restricting drilling and completion activities;

• the impact of disruptions in the bank and capital markets;

• general global economic conditions;

• global weather conditions and natural disasters, including hurricanes in the Gulf of Mexico;

• our ability to protect and enforce our intellectual property rights;

• changes in tax laws and regulations;

9 unchanged sentences

• the cost of capital in the bank and capital markets and our ability to access them;

• our ability to protect and enforce our intellectual property rights;

• the impact of disruptions in the bank and capital markets;

• our ability to complete the integration of acquired businesses and achieve the expected accretion in earnings;

10 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