Oil States International, Inc.

Good morning. My name is Jeannie and I will be your conference operator today. At this time, I would like to welcome everyone to the Oil State's first quarter 2025 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer 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, press the star pound key again. Ellen Pennington, you may begin your conference.

Good morning and welcome to Oil State's first quarter 2025 earnings conference call. Our call today will be led by our President and CEO, Cindy Taylor, Lloyd Hodgick, Oil State's Executive Vice President and Chief Financial Officer, and Scott Moses, our Executive Vice President and Chief Operating 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 that any of 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 2024 Form 10-K, along with other recent FCC 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 first quarter 2025 results and provide our thoughts on market trends in addition to discussing our company-specific outlook. In connection with our fourth quarter 2024 earnings conference call, we provided financial guidance ranges for the first quarter and full year 2025. We specifically guided the first quarter 2025 revenues of $160 to $170 million, with EBITDA expected to range from $17.5 to $18.5 million. I am pleased to report that both ranges were met or exceeded during the quarter due to strength in our international offerings, along with benefits of our 2024 U.S. land-based optimization efforts and a strong recovery in our Gulf of America operations. We witnessed ongoing demand in our international and offshore regions with very strong bookings that totaled $136 million, leading to our highest level of backlog since September 2015 with a book-to-bill ratio of 1.5 times for the quarter. We have historically reported negative cash flow from operations during the first quarter of the year due to seasonal working capital trends. However, we reversed that trend this quarter by generating $9 million of cash flow from operations. We also received proceeds of $9 million from the monetization of equipment and inventory. These cash flows were used during the quarter largely to fund CapEx and $5 million of share repurchases. Despite good operating results for the quarter, in April, oil state stock price suffered material decline stemming from the announcement and imposition of broad-based tariffs by the United States on our global trading partners. These actions have created uncertainty in the market, both in terms of individual company impacts along with the risk of broader economic consequences, including the heightened possibility of a recession. These concerns, along with planned increases in OPEC plus oil production levels, negatively impacted global crude oil prices, which declined significantly in April. Given this backdrop, we believe it is prudent to provide more granular information on oil states' strategic sourcing of goods and materials to aid the market in assessing potential impacts of U.S. tariffs on our operations. As a reminder, oil states benefits from significant global diversification with broad-based operations outside the United States and essentially every major offshore oil and gas basin. In addition, a significant portion of the capital equipment which we manufacture in the United States is exported to other countries. We anticipate that a significant portion of the company's operations outside of the United States should remain relatively unaffected by the implementation of these tariffs. In our domestic operations, We have limited reliance on imported goods, which are primarily used in our downhole technology segment. We have implemented a series of strategic actions to assess and mitigate, where possible, negative tariff impacts, including the use of temporary import bonds for key imported materials, shifting to alternate sources of supply, optimizing our supply chain to secure the most favorable treatment of imports, leveraging existing domestic supply chains, and when necessary, adjusting pricing to our customers. Oil States imports products from foreign sources, including key raw materials and component parts, such as steel forgings and perforating gun steel tubing and other components. The vast majority of our forgings come to the United States under temporary import bonds, which are free of tariffs given their re-export following U.S. manufacturing. Tariffs on imported steel tubing and other components used in the manufacture of perforating systems are expected to increase our completed gun cost. Our analysis has shown that other suppliers of perforating systems utilize similar supply chain sources and are likely to be subject to similar tariffs. As a result, we expect that these cost increases can be passed on to customers. We remain dedicated to growing our operations and strategically investing in our most profitable business areas supported by advanced technologies. We will also continue to focus on the return of cash to our stockholders. Lloyd will now review our operating results along with our financial position in more detail.