Oil States International Inc. (NYSE:OIS) Q1 2015 Earnings Conference Call Transcript
Apr 30, 2015 • 11:00 am ET
Welcome to the Oil States International First Quarter 2015 Earnings Conference Call. My name is John and I'll be your operator for today's call. (Operator Instructions).
I will now turn the call over to Patricia Gil.
Thank you, John and welcome to Oil States' first quarter 2015 earnings conference call. Our call today will be led by Cindy Taylor, Oil States President and Chief Executive Officer; Lloyd Hajdik, Senior Vice-President and Chief Financial Officer and we're also joined by Chris Cragg, Senior Vice President of Operation.
(Forward-Looking Cautionary Statements)
I will now turn the call over to Cindy.
Thank you, Patricia. Good morning and thank you for joining our earnings conference call today. Our first quarter 2015 results were negatively impacted by the precipitous drop in crude oil prices, which has led to dramatic declines in North American land drilling and completion-related activity.
Our first quarter 2015 revenues and adjusted EBITDA declined 30% and 45% respectively, representing detrimental margins of 38%. While the slowdown in activity impacted our offshore product segment, there was a much more pronounced negative impact on our well site services segment. Our offshore products results for the quarter came in within our guided ranges and backlog held up well. We reported a book to bill ratio of 0.98 times as bidding and quoting activity for our offshore products and services continued during the quarter, albeit at a slower pace. We successfully booked a significant subsea project during the quarter, which helped our overall backlog position. North American land activity was extremely weak during the quarter, with the rig countdown 27%, sequentially. Completion activity was even worse, due to many customers who elected to drill wells, but not complete them.
During the first quarter, we recorded a $2.1 million charge for severance and other downsizing initiatives including headcount reductions and the closure of certain underperforming completion services facilities. We also made adjustments to variable field pay structures. We're very focused on controlling discretionary spending levels and are being prudent in our allocation of capital. We will continue to monitor and evaluate our cost structure to react proactively during this cyclical downturn. None of this is new news for the energy services sector. I will go into more detail by segment a bit later and focus additional comments on our market outlook.
At this time, Lloyd will take you through more details of our consolidated results and financial position.
Thanks, Cindy. During the first quarter, we generated revenues of $337 million and reported adjusted net income of $23.1 million or $0.45 per diluted share, which excluded pre-tax charges of $2.1 million for severance and other downsizing and cost reduction initiatives and a higher effective tax rate driven by a $2.3 million deferred tax adjustment for certain non-deductible items. Adjusted EBITDA for the first quarter ended March 31 was $69 million.
Focusing on our balance sheet and on our debt capital structure, we had total liquidity of $428.5 million, which is comprised of $356.5 million available under our revolving credit