Oil States International Inc. (NYSE:OIS) Q1 2018 Earnings Conference Call - Preliminary Transcript

Apr 26, 2018 • 10:00 am ET

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Oil States International Inc. (NYSE:OIS) Q1 2018 Earnings Conference Call - Preliminary Transcript

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Presentation
Executive
Patricia Gil

our guided range. In our Offshore Manufactured Products segment results improved sequentially due to higher connected product sales, along with strong short-cycle product contributions. Bookings in the quarter related primarily to smaller project orders and for consumables and services. Our first quarter's book-to-bill ratio averaged 0.92 times, resulting in a backlog decline of 7% sequentially.

Lloyd will take you though more details of our consolidated results and also provide highlights of our financial position. I will come back on and follow with more details by segment and provide additional comments on our market outlook.

Executive
Lloyd Hajdik

Thank you, Cindy, and good morning everyone. Our first quarter results included partial quarter contributions from our two recent acquisitions of GEODynamics and Falcon Flowback. During the first quarter, we generated revenues of $254 million, while reporting an adjusted net loss of $800,000 or $0.01 per share which excluded transaction-related and severance charges totaling $0.05 per share, our first quarter adjusted EBITDA totaled $32.3 million with a margin percentage of 12.7%.

As Cindy mentioned previously, we had a very busy first quarter. On January 12th, we closed the acquisition of GEODynamics, which was funded with a combination of $295 million of cash which was net of cash acquired, the issuance of 8.66 million shares of our common stock valued at approximately $295 million based on Oil States' share price at the closing and the issuance of a $25 million unsecured promissory note payable to sellers for total acquisition consideration of $615 million. On January 30, we competed an offering of $200 million principal amount of 1.5% convertible senior notes due February 2023.

We utilized net proceeds from the offering to pay down a portion of the outstanding borrowings under our revolving credit facility which were drawn to fund the cash portion of the GEODynamics acquisition. In conjunction with the issuance of the convertible senior notes, our credit agreement was further amended and the maturity date extended to January 30, 2022. Lender commitments under the amended revolving credit facility now total $350 million with up to $50 million of the facility available for standby letters of credit.

Under our amended credit agreement, we must comply with customary financial conveyance including a total net leverage ratio and a senior secured leverage ratio. As of March 31, our total net leverage ratio was 2.8 times and our senior secured leverage ratio was 1.5 times, well below the maximum ratios of 4.0 times and 2.25 times respectively. Our total liquidity at the end of the first quarter was approximately $126 million, which was comprised of a $101 million available under our revolving credit facility plus cash on hand of $25 million.

On February 28, we acquired Falcon, a full service provider of flowback and well testing services for the separation and recovery of fluids, solid debris, and proppant used during fracking operations. Falcon provides additional scale and diversity to our completion services operations in key shale plays in the United States. With seven service locations and over 400 employees, the