What changed in this filing

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Item 1. Financial Statements

2024-10-30 compared with 2024-07-29 · 177 added, 125 removed, 493 unchanged (38% 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,

2024 2023 2024 2023

9 unchanged sentences

Impairment of goodwill — — 10,000 —

Impairments of intangible assets 10,787 — 10,787 —

Impairments of operating lease assets 2,579 — 2,579 —

Other operating (income) expense, net ( 955 ) ( 1,985 ) 76 ( 2,503 )

4 unchanged sentences

Income (loss) before income taxes ( 12,134 ) 4,448 ( 24,848 ) 9,628

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

Income tax provision ( 2,215 ) ( 236 ) ( 1,574 ) ( 2,700 )

Net income (loss) $ ( 14,349 ) $ 4,212 $ ( 26,422 ) $ 6,928

10 unchanged sentences

(In Thousands)

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

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

2024 2023 2024 2023

8 unchanged sentences

(In Thousands, Except Share Amounts)

September 30,

2024 December 31, 2023

41 unchanged sentences

(In Thousands)

Three Months Ended June 30, 2024 Common

Three Months Ended September 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

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

Net loss — — ( 14,349 ) — — ( 14,349 )

Currency translation adjustments (excluding intercompany advances) — — — 6,568 — 6,568

3 unchanged sentences

Stock repurchases — — — — ( 3,144 ) ( 3,144 )

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

Six Months Ended June 30, 2024 Common

Balance, September 30, 2024 $ 786 $ 1,135,634 $ 258,496 $ ( 66,595 ) $ ( 643,515 ) $ 684,806

Nine Months Ended September 30, 2024 Common

Stock Additional

11 unchanged sentences

Stock repurchases — — — — ( 5,518 ) ( 5,518 )

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

Balance, September 30, 2024 $ 786 $ 1,135,634 $ 258,496 $ ( 66,595 ) $ ( 643,515 ) $ 684,806

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

3 unchanged sentences

(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 September 30, 2023 Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Total Stockholders’ Equity

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

Stock repurchases — — — — — —

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

Nine Months Ended September 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

5 unchanged sentences

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

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.

3 unchanged sentences

(In Thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

Net income (loss) $ ( 26,422 ) $ 6,928

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 42,528 46,209

Impairment of goodwill

Impairments of operating lease assets

Impairments of intangible assets

Stock-based compensation expense 6,408 5,157

Amortization of deferred financing costs 1,168 1,344

Deferred income tax provision (benefit) ( 2,299 ) 997

Deferred income tax benefit ( 2,798 ) ( 66 )

Gains on disposals of assets ( 2,956 ) ( 3,335 )

7 unchanged sentences

Other operating assets and liabilities, net 3,624 2,905

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

Net cash flows provided by operating activities 27,684 52,377

Cash flows from investing activities:

36 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 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.

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

Additionally, following the sale of its remaining U.S.

land-based drilling rigs and the exit of the flowback and well testing service offering in the third quarter of 2024, the Company’s Well Site Services segment name was changed to the Completion and Production Services segment.

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.

4 unchanged sentences

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Goodwill Impairment and Other Charges and Credits

Asset Impairments and Other Charges and Credits

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

These management actions included the consolidation, relocation and exit of certain manufacturing and service locations as well as the realignment of operations within two of the Company’s reportable segments.

These management actions included the consolidation, relocation and exit of certain manufacturing and service locations, the exit of certain service offerings, reductions in the Company’s workforce in the United States as well as the realignment of operations within two of the Company’s reportable segments.

The Company has also incurred legal and other related costs to enforce certain patents related to its proprietary technologies.

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

As a result of these events, actions and assessments, the Company recorded the following charges and credits in 2024 and 2023 (in thousands):

Offshore Manufactured Products

Well Site Services

Downhole Technologies

Pre-tax Total

After-tax Total

Impairment of goodwill

Completion and Production Services

Downhole Technologies Corporate Total

Three Months Ended September 30, 2024

Impairments of:

$ — $ — $ — $ — $ —

Facility consolidation and other charges

Intangible assets

— 10,787 — — 10,787

Operating lease assets

— 2,092 487 — 2,579

Facility consolidation and exit, and other charges

354 2,982 123 34 3,493

Patent defense costs — 1,347 — — 1,347

Gains on extinguishment of debt

Pre-tax totals

$ 354 $ 17,208 $ 610 $ 34 18,206

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

Income tax benefit

After-tax total

Facility consolidation and other charges

Nine Months Ended September 30, 2024

Impairments of:

$ — $ — $ 10,000 $ — $ 10,000

Intangible assets

— 10,787 — — 10,787

Operating lease assets

— 2,092 487 — 2,579

Facility consolidation and exit, and other charges

3,364 5,583 123 34 9,104

Patent defense costs — 2,671 — — 2,671

Gains on extinguishment of debt

— — — ( 515 ) ( 515 )

Gains on extinguishment of debt (see Note 4)

Pre-tax totals

$ 3,364 $ 21,133 $ 10,610 $ ( 481 ) 34,626

Income tax benefit

After-tax total

Offshore Manufactured Products Completion and Production Services Downhole Technologies Corporate Pre-tax Total

Three and Nine Months Ended September 30, 2023

Facility consolidation and exit, and other charges $ 1,649 $ — $ — $ — $ 1,649

Income tax benefit

After-tax total $ 1,302

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

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

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

Offshore Manufactured

6 unchanged sentences

Foreign currency translation 572 — 572

Balance as of June 30, 2024

Balance as of September 30, 2024

$ 70,439 $ — $ 70,439

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

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.

5 unchanged sentences

These estimates rely upon significant management judgment.

Long-Lived Tangible and Intangible Assets

An assessment for impairment of long-lived tangible and intangible assets is conducted when an event occurs or circumstances change that indicate that the carrying value of long-lived tangible and intangible assets may not be recoverable.

In response to further reductions in customer activity in the United States during the third quarter of 2024, management made strategic decisions to exit its underperforming flowback and well testing service offering and sell the related equipment and inventory.

Management also decided to exit six leased facilities.

As a result of these events and actions, the Company recorded non-cash intangible asset (customer relationships and tradenames) impairment charges of $ 10.8 million associated with the exit of this service offering and operating lease impairments of $ 2.6 million related to facility closures.

Additionally, the equipment and inventory of the exited service offering in the Completion and Production Services segment was reclassified to assets held for sale, and transferred from property, plant and equipment and inventory to prepaid and other current assets.

The carrying value of assets held for sale totaled $ 13.4 million as of September 30, 2024.

OIL STATES INTERNATIONAL, INC.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Details of Selected Balance Sheet Accounts

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

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

September 30,

2024 December 31,

8 unchanged sentences

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

September 30,

2024 December 31,

Deferred revenue (contract liabilities) $ 34,742 $ 36,757

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,

As of September 30, 2024, accounts receivable, net in the United States and the United Kingdom represented 63 % and 18 %, 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, 2024.

For the nine months ended September 30, 2024, the $ 16.0 million net decrease in contract assets was primarily attributable to $ 44.2 million transferred to accounts receivable, which was partially offset by $ 28.5 million in revenue recognized during the period.

Deferred revenue (contract liabilities) decreased by $ 2.0 million in the first nine months of 2024, primarily reflecting the recognition of $ 14.2 million of revenue that was deferred at the beginning of the period, partially offset by $ 12.0 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 nine months ended September 30, 2024 and 2023 (in thousands):

Nine Months Ended September 30,

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

1 unchanged sentence

Write-offs ( 726 ) ( 208 )

Other ( 9 ) 37

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

Allowance for doubtful accounts – September 30 $ 4,710 $ 5,059

OIL STATES INTERNATIONAL, INC.

1 unchanged sentence

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30,

2024 December 31,

6 unchanged sentences

$ 221,134 $ 202,027

September 30,

2024 December 31,

3 unchanged sentences

$ 267,388 $ 280,389

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

For the three months ended September 30, 2024 and 2023, depreciation expense was $ 9.5 million and $ 11.1 million, respectively.

Depreciation expense was $ 29.9 million and $ 33.3 million, respectively, for the nine months ended September 30, 2024 and 2023.

September 30, 2024 December 31, 2023

Amount Accumulated

8 unchanged sentences

$ 241,101 $ 111,235 $ 129,866 $ 263,960 $ 110,950 $ 153,010

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.

For the three months ended September 30, 2024 and 2023, amortization expense was $ 4.1 million and $ 4.3 million, respectively.

Amortization expense was $ 12.7 million and $ 12.9 million for the nine months ended September 30, 2024 and 2023, respectively.

As further discussed in Note 2, “Asset Impairments and Other Charges and Credits,” during the third quarter of 2024 the Company made a strategic decision to exit an underperforming service offering within the Completion and Production Services segment.

As a result of this action, the segment recognized non-cash impairment charges of $ 9.1 million related to customer relationships and $ 1.7 million related to tradenames.

September 30,

2024 December 31,

8 unchanged sentences

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30,

2024 December 31,

8 unchanged sentences

Long-term Debt

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

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

September 30,

2024 December 31,

7 unchanged sentences

____________________

(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 .

(1) Unamortized deferred financing costs of $ 1.7 million and $ 1.1 million as of September 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 September 30, 2024 and December 31, 2023, respectively .

Revolving Credit Facility

16 unchanged sentences

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

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.

As of September 30, 2024, 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 September 30, 2024 was $ 76.4 million, calculated based on the current borrowing base less outstanding borrowings, if any, and letters of credit.

As of September 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 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):

The following table provides a summary of the Company's purchases of outstanding 2026 Notes during the nine months ended September 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

Nine Months Ended September 30, 2024

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

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, 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.

As of September 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").

The 2023 Notes bore interest at a rate of 1.50 % per year, and the outstanding principal amount of $ 17.3 million matured and was repaid in full on February 15, 2023.

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 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.

The estimated fair value of the 2026 Notes as of September 30, 2024 was $ 120.9 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 six 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 nine months of 2024 (in thousands):

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

2 unchanged sentences

Purchases of treasury stock ( 1,189 )

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.

Shares of common stock outstanding – September 30, 2024 63,111

As of September 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.

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.

During the three months ended September 30, 2024, the Company purchased 646 thousand shares of common stock under the program at a total cost of $ 3.1 million.

During the nine months ended September 30, 2024, the Company purchased 1.2 million shares of common stock under the program at a total cost of $ 5.5 million.

The amount remaining under the Company’s existing share repurchase authorization as of September 30, 2024 was $ 12.6 million.

On October 24, 2024, the Company’s Board of Directors terminated the Company’s existing common stock repurchase program and replaced it with a new $ 50.0 million common stock repurchase authorization, which expires in October 2026.

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 $ 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 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 $ 70.0 million at December 31, 2023 to $ 66.6 million at September 30, 2024.

For the three and nine months ended September 30, 2024 and 2023, currency translation adjustments recognized as a component of other comprehensive income were primarily attributable to the United Kingdom and Brazil.

During the nine months ended September 30, 2024, the exchange rates for the British pound strengthened by 5 % compared to the U.S.

dollar while the Brazilian real weakened by 11 % compared to the U.S.

dollar, contributing to other comprehensive income of $ 3.4 million.

Income tax benefit (provision) for the three and six months ended June 30, 2024 and 2023 was calculated using a discrete approach.

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.

Income tax provision for the three and nine months ended September 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 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.

For the three months ended September 30, 2024, the Company’s income tax expense was $ 2.2 million on a pre-tax loss of $ 12.1 million, which included unfavorable changes in valuation allowances recorded against deferred tax assets and certain non-deductible expenses.

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

OIL STATES INTERNATIONAL, INC.

1 unchanged sentence

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the nine months ended September 30, 2024, the Company’s income tax expense was $ 1.6 million on a pre-tax loss of $ 24.8 million, which included a $ 10.0 million goodwill impairment charge (approximately $ 7.7 million of which was non-deductible), other non-deductible expenses and unfavorable changes in valuation allowances recorded against deferred tax assets.

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

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, 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 nine months ended September 30, 2024 and 2023 (in thousands, except per share amounts):

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

15 unchanged sentences

Diluted ( 0.23 ) 0.07 ( 0.42 ) 0.11

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.

The calculation of diluted earnings per share for the three and nine months ended September 30, 2024 excluded 77 thousand shares and 92 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 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.

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, 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 nine months ended September 30, 2024 (in thousands):

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

3 unchanged sentences

Forfeited ( 81 ) ( 50 ) —

Outstanding – June 30, 2024 77 1,553 800

Outstanding – September 30, 2024 77 1,513 800

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 ( 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.

AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 ( 149 thousand outstanding as of September 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 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 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.

Stock-based compensation expense recognized during the three and nine months ended September 30, 2024 totaled $ 2.4 million and $ 6.4 million, respectively.

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

As of September 30, 2024, there was $ 9.2 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.

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The Company operates through three operating segments:

Offshore Manufactured Products, Well Site Services and Downhole Technologies.

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).

Offshore Manufactured Products, Completion and Production Services (previously referred to as Well Site Services) and Downhole Technologies.

Financial information by operating segment as of and for the three and nine months ended September 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 June 30, 2024

Three Months Ended September 30, 2024

Offshore Manufactured Products (1)

$ 102,234 $ 3,631 $ 19,310 $ 3,074 $ 506,563

Well Site Services (2)

Completion and Production Services (2)

40,099 5,749 ( 18,267 ) 4,084 158,338

Downhole Technologies (3)

32,015 4,121 ( 3,653 ) 270 273,093

Corporate — 134 ( 8,431 ) — 56,147

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____________________

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

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

(1) Operating income included $ 0.4 million of facility consolidation and other charges.

(2) Operating loss included $ 17.2 million of asset impairment, facility consolidation and exit, patent defense and other charges.

(3) Operating loss included $ 0.6 million of asset impairment and other charges.

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 (4)

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

$ 96,070 $ 4,405 $ 15,586 $ 2,712 $ 495,440

Completion and Production Services

59,831 6,313 3,285 2,602 201,384

Downhole Technologies 38,388 4,546 ( 1,900 ) 568 287,152

1 unchanged sentence

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

____________________

(4) Operating income included $ 1.6 million of facility consolidation and other charges.

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

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Offshore Manufactured Products (5)

$ 290,647 $ 11,571 $ 44,270 $ 11,847 $ 506,563

Well Site Services (4)

Completion and Production Services (6)

133,812 17,875 ( 19,221 ) 10,416 158,338

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____________________

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

(5) Operating income included $ 3.4 million of facility consolidation and other charges.

(6) Operating loss included $ 21.1 million of asset impairment, facility consolidation and exit, patent defense and other charges.

(7) Operating loss included $ 10.6 million of asset impairment and other charges.

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 (8)

$ 255,222 $ 12,555 $ 32,122 $ 7,658 $ 495,440

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

Completion and Production Services

191,425 19,023 14,983 14,046 201,384

Downhole Technologies 127,370 14,161 ( 148 ) 1,239 287,152

1 unchanged sentence

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

____________________

(8) Operating income included $ 1.6 million of facility consolidation and other charges.

OIL STATES INTERNATIONAL, INC.

1 unchanged sentence

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 six months ended June 30, 2024 and 2023 (in thousands):

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

Offshore Manufactured Products

Well Site Services Downhole Technologies Total

Completion and Production Services

Downhole Technologies Total

2024 2023 2024 2023 2024 2023 2024 2023

Three Months Ended June 30

Three Months Ended September 30

Project-driven:

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Offshore Manufactured Products

Well Site Services Downhole Technologies Total

Completion and Production Services

Downhole Technologies Total

2024 2023 2024 2023 2024 2023 2024 2023

Six Months Ended June 30

Nine Months Ended September 30

Project-driven:

7 unchanged sentences

$ 290,647 $ 255,222 $ 133,812 $ 191,425 $ 103,534 $ 127,370 $ 527,993 $ 574,017

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.

Revenues from products and services transferred to customers over time accounted for approximately 67 % and 66 % of consolidated revenues for the nine months ended September 30, 2024 and 2023, 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, 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

As of September 30, 2024, the Company had $ 223 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 2024, with an additional 42 % recognized in 2025 and the balance thereafter.

Commitments and Contingencies

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

• changes in tax laws and regulations;

• supply chain disruptions;

• changes in tax laws and regulations as well as volatility in the political, legal and regulatory environments in connection with the upcoming U.S.

presidential election;

• supply chain disruptions, including as a result of labor unrest;

• the impact of tariffs and duties on imported materials and exported finished goods;

20 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