Oil States International, Inc.

Thank you for standing by. My name is Eric, and I will be your conference operator today. At this time, I would like to welcome everyone to the Oil States second quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answers session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star 1 again. Thank you. I would now like to turn the call over to Ellen Pennington, Oil State's Assistant Corporate Secretary. Please go ahead.

Good morning and welcome to Oil State's second quarter 2024 earnings conference call. Our call today will be led by our President and CEO, Cindy Taylor, and Lloyd Hodgick, Oil State's Executive Vice President and Chief Financial Officer. Before we begin, we would like to caution listeners regarding forward-looking statements. To the extent that our remarks today contain information other than historical information, please note that we are relying on the safe harbor protections afforded by federal law. No one should assume these forward-looking statements remain valid later in the quarter or beyond. Any such remarks should be weighed in the context of the many factors that affect our business, including those risks disclosed in our 2023 Form 10-K, along with other recent SEC filings. This call is being webcast and can be accessed at Oil State's website. A replay of the conference call will be available two hours after the completion of this call and will continue to be available for 12 months. I will now turn the call over to Cindy.

Thank you, Ellen. Good morning and thank you for joining our conference call today where we will discuss our second quarter 2024 results and provide our thoughts on market trends in addition to discussing our company-specific outlook comments. Our second quarter consolidated revenues and adjusted EBITDA increased 11% and 38% sequentially driven by increased drilling, subsea, and production system demand in key offshore basins, along with the advancement of several significant projects in our offshore manufactured product segment. On a consolidated basis, our offshore and international revenues were up 18% sequentially, while U.S. land-driven revenues increased 1%. Our results in the current quarter also benefited from continued customer adoption of our newer technologies and strategic optimization of our well site services segment with the exit of certain underperforming U.S. locations. Given these initiatives, our well site services adjusted segment EBITDA increased 30% sequentially in an otherwise declining U.S. land market. During the quarter, our offshore manufactured product segment revenues increased 17% sequentially, totaling $102 million, while adjusted segment EBITDA rose 27%. Bookings totaled $101 million compared to $66 million received in the first quarter of 2024, yielding backlog of $300 million as of June 30th, and a quarterly book-to-bill ratio of one times. Our bookings improvement was partially driven by our newer technology offerings, including orders for our managed pressure drilling systems. Our well site services segment revenues decreased 2% on a sequential quarter basis, given the impact of lower U.S. activity, along with the segment's consolidation and exit over the past six months, of four underperforming locations. Adjusted segment EBITDA increased 30% from the first quarter of 2024 due to stronger offshore activity in the Gulf of Mexico, along with modest market share gains in the Permian Basin. Our cost reduction initiatives helped yield very strong incremental margins. In our downhole technology segment, revenues in adjusted segment EBITDA increased 16% and 42% respectively from the first quarter of 2024, driven primarily by increased completion product and international perforating sales. We will continue to focus on improving operations and allocating capital to efficiently and safely provide our customers with advanced technologies and services while enhancing returns, reducing debt, and returning cash to our stockholders. During the quarter, we generated cash flows from operations totaling $10 million, repurchased some of our convertible debt at a discount to par, and also made share free purchases. Our gross debt to EBITDA at June 30th was 1.5 times and net was 1.2 times, giving us significant flexibility. Lloyd will now review our operational results along with our financial position in more detail.