OIL STATES INTERNATIONAL INC

Previous wording

We provide a broad range of manufactured products and services to customers in the energy, industrial and military sectors through our Offshore Manufactured Products, Well Site Services and Downhole Technologies segments. In first quarter 2024, certain short-cycle, consumable product operations historically reported within the Offshore Manufactured Products segment (legacy frac plugs 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 financial data, supplemental disaggregated revenue and backlog information as of and for the three and six months ended June 30, 2023 (presented herein) was conformed with the 2024 segment presentation.

Current wording

We provide a broad range of manufactured products and services to customers in the energy, industrial and military sectors through our Offshore Manufactured Products, Completion and Production Services (previously referred to as Well Site Services) and Downhole Technologies segments. In first quarter 2024, certain short-cycle, consumable product operations historically reported within the Offshore Manufactured Products segment (legacy frac plugs 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 financial data, supplemental disaggregated revenue and backlog information as of and for the three and nine months ended September 30, 2023 (presented herein) was 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, our Well Site Services segment name was changed to the Completion and Production Services segment.

Previous wording

In the first quarter of 2024, certain short-cycle, consumable product operations historically reported within the Offshore Manufactured Products segment (legacy frac plugs and elastomer products) were integrated into our 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, backlog and other information were conformed with the 2024 segment presentation.

Current wording

Certain short-cycle, consumable product operations historically reported within the Offshore Manufactured Products segment (legacy frac plugs and elastomer products) were integrated into our Downhole Technologies segment in the first quarter of 2024 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, backlog and other 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.

Previous wording

In 2023, we 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 discussed above. We have also incurred legal and other related costs to enforce certain patents related to our proprietary technologies. As a result of these actions, our reported pre-tax results for the six months ended June 30, 2024 included a $10.0 million non-cash goodwill impairment charge as well as $6.9 million of facility consolidation, patent defense and other charges.

Current wording

In 2023, we began implementing initiatives, which are continuing into 2024, to reduce future costs. Management actions to-date in 2024 included: the consolidation, relocation and exit of certain underperforming locations; the exit of certain service offerings; reductions in our U.S. work force as well as the realignment of operations discussed above. We have also incurred legal and other related costs to enforce certain patents related to our proprietary technologies. As a result of these actions, our reported pre-tax results for the nine months ended September 30, 2024 included $23.4 million in non-cash goodwill, intangible and operating lease asset impairment charges as well as $11.8 million of facility consolidation and exit, patent defense and other charges.

Previous wording

During the second quarter of 2024, our Offshore Manufactured Products segment sold a manufacturing and service facility that was classified as held-for-sale for net proceeds of $10.3 million. Additionally, we purchased $11.5 million principal amount of our 2026 Notes (as defined below) for $10.8 million and purchased $2.4 million of our common stock.

Current wording

During the nine months ended September 30, 2024, our Offshore Manufactured Products segment sold a manufacturing and service facility that was classified as held for sale for net proceeds of $10.3 million, we purchased $11.5 million principal amount of our 2026 Notes (as defined below) for $10.8 million, and we purchased $5.5 million of our common stock.

Previous wording

On July 19, 2024, Brent crude oil, WTI crude oil and natural gas spot prices closed at $85.19 per barrel, $81.43 per barrel and $1.88 per MMBtu, respectively. Additionally, the U.S. drilling rig count reported on July 19, 2024 was 586 rigs – 3% below the second quarter 2024 average.

Current wording

On October 25, 2024, Brent crude oil, WTI crude oil and natural gas spot prices closed at $75.62 per barrel, $72.02 per barrel and $1.93 per MMBtu, respectively – below the third quarter 2024 averages. Additionally, the U.S. drilling rig count reported on October 25, 2024 was 585 rigs – comparable to the third quarter 2024 average.

Previous wording

Crude oil and natural gas prices and levels of demand for crude oil and natural gas are likely to remain highly volatile due to numerous factors, including: geopolitical conflicts in Europe and the Middle East, along with associated international tensions; the perceived risk of a global economic recession; domestic or international crude oil and natural gas production; changes in governmental rules and regulations; sanctions; the willingness of operators to invest capital in the exploration for and development of resources; use of alternative fuels; improved vehicle fuel efficiency; timing of capital investments in alternative energy sources; a more sustained movement to electric vehicles; and the potential for ongoing supply/demand imbalances.

Current wording

Crude oil and natural gas prices and levels of demand for crude oil and natural gas are likely to remain highly volatile due to numerous factors, including: geopolitical conflicts in Europe and the Middle East, along with associated international tensions; the perceived risk of a global economic recession; the levels of domestic or international crude oil and natural gas production; changes in governmental rules and regulations; sanctions; the willingness of operators to invest capital in the exploration for and development of resources; use of alternative fuels; improved vehicle fuel efficiency; timing of capital investments in alternative energy sources; a more sustained movement to electric vehicles; and the potential for ongoing supply/demand imbalances.

Previous wording

Our Offshore Manufactured Products segment provides technology-driven, highly-engineered products and services for offshore oil and natural gas production systems and facilities globally, as well as certain products and services to the offshore drilling and completion markets. This segment also produces a variety of products for use in industrial, military and other applications outside the traditional energy industry. Additionally, we are investing in research and product development (and have been awarded select contracts and are bidding on additional projects) to facilitate the development of alternative energy sources, including offshore wind and deepsea mineral gathering opportunities. This segment is particularly influenced by global spending on deepwater drilling and production, which is primarily driven by our customers’ longer-term commodity demand forecasts and outlook for crude oil and natural gas prices. Approximately 90% of Offshore Manufactured Products segment sales in the first six months of 2024 were driven by our customers’ capital spending for products and services used in exploratory and developmental drilling, greenfield offshore production infrastructure, and subsea pipeline tie-in and repair system applications, along with upgraded equipment for existing offshore drilling rigs and other vessels (referred to herein as “project-driven products and services”). Deepwater oil and gas development projects typically involve significant capital investments and multi-year development plans. Such projects are generally undertaken by larger exploration, field development and production companies (primarily international oil companies and state-run national oil companies) using relatively conservative crude oil and natural gas pricing assumptions. Given the long lead times associated with field development, we believe some of these deepwater projects, once approved for development, are generally less susceptible to change based on short-term fluctuations in the price of crude oil and natural gas.

Current wording

Our Offshore Manufactured Products segment provides technology-driven, highly-engineered products and services for offshore oil and natural gas production systems and facilities globally, as well as certain products and services to the offshore drilling and completion markets. This segment also produces a variety of products for use in industrial, military and other applications outside the traditional energy industry. Additionally, we are investing in research and product development (and have been awarded select contracts and are bidding on additional projects) to facilitate the development of alternative energy sources, including offshore wind and deepsea mineral gathering opportunities. This segment is particularly influenced by global spending on deepwater drilling and production, which is primarily driven by our customers’ longer-term commodity demand forecasts and outlook for crude oil and natural gas prices. Approximately 89% of Offshore Manufactured Products segment sales in the first nine months of 2024 were driven by our customers’ capital spending for products and services used in exploratory and developmental drilling, greenfield offshore production infrastructure, and subsea pipeline tie-in and repair system applications, along with upgraded equipment for existing offshore drilling rigs and other vessels (referred to herein as “project-driven products and services”). Deepwater oil and gas development projects typically involve significant capital investments and multi-year development plans. Such projects are generally undertaken by larger exploration, field development and production companies (primarily international oil companies and state-run national oil companies) using relatively conservative crude oil and natural gas pricing assumptions. Given the long lead times associated with field development, we believe some of these deepwater projects, once approved for development, are generally less susceptible to change based on short-term fluctuations in the price of crude oil and natural gas.

Previous wording

Backlog reported by our Offshore Manufactured Products segment decreased to $300 million as of June 30, 2024 from $327 million as of December 31, 2023. Bookings totaled $101 million in the second quarter of 2024, yielding a quarterly book-to-bill ratio of 1.0x (0.9x year-to-date). The following table sets forth backlog as of the dates indicated (in millions).

Current wording

Backlog reported by our Offshore Manufactured Products segment increased to $313 million as of September 30, 2024 from $300 million as of June 30, 2024. Bookings totaled $112 million in the third quarter of 2024, yielding a quarterly book-to-bill ratio of 1.1x (1.0x year-to-date). The following table sets forth backlog as of the dates indicated (in millions).

Previous wording

Our Well Site Services segment provides completion services and, to a much lesser extent, land drilling services, in the United States (including the Gulf of Mexico) and internationally. U.S. drilling and completion activity and, in turn, our Well Site Services results, are sensitive to near-term fluctuations in commodity prices, particularly WTI crude oil prices, given the short-term, call-out nature of its operations. We primarily supply equipment and service personnel utilized in the completion of, and initial production from, new and recompleted wells in our U.S. operations, which are dependent primarily upon the level and complexity of drilling, completion and workover activity in our areas of operations. Well intensity and complexity have increased with the continuing transition to multi-well pads, the drilling of longer lateral wells and increased downhole pressures, along with the increased number of frac stages completed in horizontal wells.

Current wording

Our Completion and Production Services segment provides completion and production services in the United States (including the Gulf of Mexico) and internationally. Prior to the sale of its drilling rigs in August of 2024, the segment also provided land drilling services in the United States. U.S. drilling and completion activity and, in turn, our Completion and Production Services results, are sensitive to near-term fluctuations in commodity prices, particularly WTI crude oil prices, given the short-term, call-out nature of its operations. We primarily supply equipment and service personnel utilized in the completion of, and initial production from, new and recompleted wells in our U.S. operations, which are dependent primarily upon the level and complexity of drilling, completion and workover activity in our areas of operations. Well intensity and complexity have increased with the continuing transition to multi-well pads, the drilling of longer lateral wells and increased downhole pressures, along with the increased number of frac stages completed in horizontal wells.

Previous wording

Demand for our completion-related products and services within each of our segments is highly correlated to changes in the total number of wells drilled in the United States, total footage drilled, the number of drilled wells that are completed and changes in the drilling rig count. The following table sets forth a summary of the U.S. drilling rig count, as measured by Baker Hughes Company, as of and for the periods indicated.

Current wording

Demand for our completion-related products and services within our Completion and Production Services and Downhole Technologies segments is highly correlated to changes in the total number of wells drilled in the United States, total footage drilled, the number of drilled wells that are completed and changes in the drilling rig count. The following table sets forth a summary of the U.S. drilling rig count, as measured by Baker Hughes Company, as of and for the periods indicated.

Previous wording

Other factors that can affect our business and financial results include but are not limited to: the general global economic environment; competitive pricing pressures; customer consolidations; public health crises; natural disasters; labor market constraints; supply chain disruptions; inflation in wages, materials, parts, equipment and other costs; climate-related and other regulatory changes; geopolitical conflicts and tensions; and changes in tax laws in the United States and international markets. We continue to monitor the global economy, the prices of and demand for crude oil and natural gas, and the resultant impact on the capital spending plans and operations of our customers in order to plan and manage our business.

Current wording

Other factors that can affect our business and financial results include but are not limited to: the general global economic environment; competitive pricing pressures; customer consolidations; public health crises; natural disasters; labor market constraints; supply chain disruptions; inflation in wages, materials, parts, equipment and other costs; climate-related and other regulatory changes; geopolitical conflicts and tensions; management’s implementation of strategic decisions; and changes in tax laws in the United States and international markets. We continue to monitor the global economy, the prices of and demand for crude oil and natural gas, and the resultant impact on the capital spending plans and operations of our customers in order to plan and manage our business.

Previous wording

In the first quarter of 2024, certain short-cycle manufacturing 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 the current segment management structure, as well as provide for additional operational synergies. Historical financial data and supplemental disaggregated revenue information as of and for the three and six months ended June 30, 2023 (presented herein) were conformed with the 2024 segment presentation.

Current wording

In the first quarter of 2024, certain short-cycle manufacturing 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 the current segment management structure, as well as provide for additional operational synergies. Historical financial data and supplemental disaggregated revenue information as of and for the three and nine months ended September 30, 2023 (presented herein) 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, our Well Site Services segment name was changed to the Completion and Production Services segment.

Previous wording

The following summarizes our consolidated results of operations for the three and six months ended June 30, 2024 and 2023 (in thousands, except per share amounts):

Current wording

The following summarizes our consolidated results of operations for the three and nine months ended September 30, 2024 and 2023 (in thousands, except per share amounts):

Previous wording

We manage and measure our business performance in three distinct operating segments: Offshore Manufactured Products, Well Site Services and Downhole Technologies. Supplemental financial information by operating segment for the three and six months ended June 30, 2024 and 2023 is summarized below (in thousands):

Current wording

We manage and measure our business performance in three distinct operating segments: Offshore Manufactured Products, Completion and Production Services and Downhole Technologies. Supplemental financial information by operating segment for the three and nine months ended September 30, 2024 and 2023 is summarized below (in thousands):

Previous wording

(2)During the three and six months ended June 30, 2024, the Well Site Services segment recognized charges of $2.9 million and$3.9 million, respectively, associated primarily with the consolidation and exit of certain underperforming service locations and the defense of certain patents.

Current wording

(2)During the three and nine months ended September 30, 2024, the Completion and Production Services segment recognized charges of $17.2 million and $21.1 million, respectively, associated primarily with the exit of its flowback and well testing service offering, the consolidation and exit of certain underperforming service locations, and the defense of certain patents.

Previous wording

(3)During the six months ended June 30, 2024, the Downhole Technologies segment recognized a $10.0 million non-cash impairment charge related to goodwill reassigned to the business in connection with the segment realignment discussed above.

Current wording

(3)During the both three and nine months ended September 30, 2024, the Downhole Technologies segment recognized charges of $0.6 million associated primarily with the exit of an underperforming location. Additionally during the nine months ended September 30, 2024, the segment recognized a $10.0 million non-cash impairment charge related to goodwill reassigned to the business in connection with the segment realignment discussed above.

Previous wording

We reported net income for the three months ended June 30, 2024 of $1.3 million, or $0.02 per share. The reported second quarter net income included facility consolidation and other charges of $4.4 million ($3.5 million after-tax, or $0.06 per share), partially offset by non-cash gains of $0.5 million ($0.4 million after-tax, or $0.01 per share) associated with debt extinguishment. These results compare to net income for the three months ended June 30, 2023 of $0.6 million, or $0.01 per share.

Current wording

We reported a net loss for the three months ended September 30, 2024 of $14.3 million, or $0.23 per share. The reported third quarter net loss included charges of $18.2 million ($17.0 million after tax, or $0.27 per share) associated with the restructuring of certain of its U.S. land-based operations, facility consolidations and closures, patent defense and personnel reductions. These results compare to net income for the three months ended September 30, 2023 of $4.2 million, or $0.07 per share, which included facility consolidation and other charges of $1.6 million ($1.3 million after-tax, or $0.02 per share).

Previous wording

Our second quarter 2024 results of operations reflect the impact of the growth in offshore and international project activity and associated backlog conversion, partially offset by a decline in natural gas focused investments by our U.S. customers, competitive market conditions and management’s decision to exit certain underperforming locations. Management continues to implement measures in areas experiencing lower activity levels to reduce future costs.

Current wording

Our third quarter 2024 results of operations reflect the impact of operators continued investments in offshore and international project activity and associated backlog conversion, partially offset by a decline in land-based investments by our U.S. customers, competitive market conditions and management’s decision to exit certain underperforming locations and service offerings in the United States. Management expects to continue to implement measures to reduce costs in areas experiencing lower activity levels.

Previous wording

Revenues. Consolidated total revenues in the second quarter of 2024 increased $2.9 million, or 2%, from the second quarter of 2023.

Current wording

Revenues. Consolidated total revenues in the third quarter of 2024 decreased $19.9 million, or 10%, from the third quarter of 2023.

Previous wording

Consolidated product revenues in the second quarter of 2024 increased $15.9 million, or 17%, from the second quarter of 2023, driven primarily by the conversion of production facility and connector products from backlog into revenue. Consolidated service revenues in the second quarter of 2024 decreased $13.1 million, or 14%, from the second quarter of 2023. This decrease was concentrated in the United States – driven by lower land-based customer investments (particularly in natural gas basins), competitive market conditions and our exit of certain underperforming locations during the first six months of 2024, partially offset by higher offshore and international service activity.

Current wording

Consolidated product revenues in the third quarter of 2024 decreased $1.8 million, or 2%, from the third quarter of 2023, driven primarily by lower U.S. short-cycle completion product sales volumes. Consolidated service revenues in the third quarter of 2024 decreased $18.1 million, or 20%, from the third quarter of 2023. This decrease was concentrated in the United States – driven by lower land-based customer investments (particularly in natural gas basins), competitive market conditions and our exit of certain underperforming locations during the first half of 2024, partially offset by higher offshore and international service activity.

Previous wording

Cost of Revenues (exclusive of Depreciation and Amortization Expense). Our consolidated total cost of revenues (exclusive of depreciation and amortization expense) in the second quarter of 2024 were comparable to the level reported in the second quarter of 2023.

Current wording

Cost of Revenues (exclusive of Depreciation and Amortization Expense). Our consolidated total cost of revenues (exclusive of depreciation and amortization expense) in the third quarter of 2024 decreased $13.8 million, or 9%, compared to the level reported in the third quarter of 2023.

Previous wording

Consolidated product costs in the second quarter of 2024 increased $9.8 million, or 14%, from the second quarter of 2023 driven primarily by the increase in project-driven products sales volumes. Consolidated service costs in the second quarter of 2024 decreased $9.8 million, or 14%, from the second quarter of 2023, with the impact of lower U.S. land-based activity levels and implemented cost control measures partially offset by facility consolidation and exit costs incurred in 2024.

Current wording

Consolidated product costs in the third quarter of 2024 decreased $1.0 million, or 1%, from the third quarter of 2023 driven primarily by the decline in U.S. land-based products sales volumes. Consolidated service costs in the third quarter of 2024 decreased $12.8 million, or 18%, from the third quarter of 2023, with the impact of lower U.S. land-based activity levels and implemented cost control measures partially offset by facility exit and severance costs incurred in third quarter of 2024.

Previous wording

Selling, General and Administrative Expense. Selling, general and administrative expense was $26.4 million in the second quarter of 2024, which included $1.0 million of costs associated with enforcing certain of our patents. Excluding these patent defense costs, selling, general and administrative costs increased $1.9 million, or 8%, from the second quarter of 2023, due primarily to higher compensation costs.

Current wording

Selling, General and Administrative Expense. Selling, general and administrative expense was $22.8 million in the third quarter of 2024, which included $1.3 million of costs associated with enforcing certain of our patents. Excluding these patent defense costs, selling, general and administrative costs decreased $2.8 million, or 12%, from the third quarter of 2023, due primarily to lower short- and long-term incentive expenses.

Previous wording

Depreciation and Amortization Expense. Depreciation and amortization expense decreased $0.8 million, or 5%, in the second quarter of 2024 compared to the prior-year quarter. Note 10, “Segments and Related Information,” to our Unaudited Condensed Consolidated Financial Statements presents depreciation and amortization expense by segment.

Current wording

Depreciation and Amortization Expense. Depreciation and amortization expense decreased $1.8 million, or 12%, in the third quarter of 2024 compared to the prior-year quarter. Note 10, “Segments and Related Information,” to our Unaudited Condensed Consolidated Financial Statements presents depreciation and amortization expense by segment.

Previous wording

Operating Income. Our consolidated operating income was $2.0 million in the second quarter of 2024, which included charges totaling $4.4 million associated with facility consolidations and exits, and patent defense. This compares to second quarter 2023 consolidated operating income of $3.3 million. Excluding the 2024 charges, operating income increased $3.2 million year-over-year.

Current wording

Operating Income. Our consolidated operating loss was $11.0 million in the third quarter of 2024, which included $13.4 million in non-cash intangible and operating lease asset impairment charges and charges totaling $4.8 million associated with facility consolidations and exits, patent defense and other management actions. This compares to third quarter 2023 consolidated operating income of $6.2 million, which included facility consolidation and other charges of $1.6 million. Excluding these charges, operating results declined $0.7 million year-over-year, driven by the substantial decline in activity levels in the United States.

Previous wording

Interest Expense, Net. Net interest expense totaled $2.1 million in the second quarter of 2024, which compares to $2.1 million in the same period of 2023. Interest expense as a percentage of total debt outstanding was approximately 7% in the second quarter of 2024, compared to 7% in the second quarter of 2023.

Current wording

Interest Expense, Net. Net interest expense totaled $1.8 million in the third quarter of 2024, which compares to $1.9 million in the same period of 2023. Interest expense as a percentage of total debt outstanding was approximately 7% in the third quarter of 2024, compared to 7% in the third quarter of 2023.

Previous wording

Income Tax. Income tax benefit (provision) for the three months ended June 30, 2024 and 2023 was calculated using a discrete approach. This methodology was used because changes in our results of operations and non-deductible expenses can materially impact the estimated annual effective tax rate. For the three months ended June 30, 2024, our 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 provision of $0.9 million on a pre-tax income of $1.4 million for the three months ended June 30, 2023, which included certain non-deductible expenses, discrete tax items and a favorable change in valuation allowances recorded against deferred tax assets.

Current wording

Income Tax. Income tax provision for the three months ended September 30, 2024 and 2023 was calculated using a discrete approach. This methodology was used because changes in our results of operations and non-deductible expenses can materially impact the estimated annual effective tax rate. For the three months ended September 30, 2024, our income tax provision 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 provision of $0.2 million on a pre-tax income of $4.4 million for the three months ended September 30, 2023, which included certain non-deductible expenses, discrete tax items and a reduction in valuation allowances recorded against deferred tax assets.

Previous wording

Other Comprehensive Income (Loss). Reported comprehensive income (loss) is the sum of reported net income and other comprehensive income (loss). Other comprehensive loss was $3.2 million in the second quarter of 2024 compared to comprehensive income of $3.3 million in the second quarter of 2023 due to fluctuations in currency exchange rates compared to the U.S. dollar which are used to translate certain of the international operations of our operating segments. For the three 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 second quarter of 2024, the exchange rate for the Brazilian real weakened compared to the U.S. dollar while the exchange rate for the British flat was flat compared to the U.S. dollar. In the second quarter of 2023, the exchange rates for the British pound and the Brazilian real strengthened compared to the U.S. dollar.

Current wording

Other Comprehensive Income (Loss). Reported comprehensive loss is the sum of reported net income (loss) and other comprehensive income (loss). Other comprehensive income was $9.6 million in the third quarter of 2024 compared to comprehensive loss of $5.7 million in the third quarter of 2023 due to fluctuations in currency exchange rates compared to the U.S. dollar which are used to translate certain of the international operations of our operating segments. For the three months ended September 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 third quarter of 2024, the exchange rate for the British pound and the Brazilian real strengthened compared to the U.S. dollar. In the third quarter of 2023, the exchange rates for the British pound and the Brazilian real weakened compared to the U.S. dollar.

Previous wording

Revenues. Our Offshore Manufactured Products segment revenues increased $22.9 million, or 29%, in the second quarter of 2024 compared to the second quarter of 2023 due primarily to increased demand for international and offshore project-driven products and services.

Current wording

Revenues. Our Offshore Manufactured Products segment revenues increased $6.2 million, or 6%, in the third quarter of 2024 compared to the third quarter of 2023 due to increased demand for military products and international and offshore project-driven products and services.

Previous wording

Operating Income. Our Offshore Manufactured Products segment reported operating income of $14.4 million in the second quarter of 2024, which included $1.5 million in facility consolidation charges. This compares to operating income in the second quarter of 2023 of $8.8 million. Excluding the 2024 charges, operating income increased $7.1 million year-over-year.

Current wording

Operating Income. Our Offshore Manufactured Products segment reported operating income of $19.3 million in the third quarter of 2024, which included $0.4 million in facility consolidation and other charges. This compares to operating income in the third quarter of 2023 of $15.6 million, which included $1.6 million in facility consolidation and other charges. Excluding these charges, operating income increased $2.4 million year-over-year.

Previous wording

Backlog. Backlog in our Offshore Manufactured Products segment totaled $300 million as of June 30, 2024, with second quarter 2024 bookings of $101 million and a quarterly book-to-bill ratio of 1.0x.

Current wording

Backlog. Backlog in our Offshore Manufactured Products segment totaled $313 million as of September 30, 2024, with third quarter 2024 bookings of $112 million and a quarterly book-to-bill ratio of 1.1x.

Previous wording

Revenues. Our Well Site Services segment revenues decreased $18.1 million, or 28%, in the second quarter of 2024 compared to the prior-year period, driven primarily by lower U.S. land-based customer activity levels (particularly in natural gas basins), competitive market conditions and our exit of certain underperforming service locations during the first six months of 2024.

Current wording

Revenues. Our Completion and Production Services segment revenues decreased $19.7 million, or 33%, in the third quarter of 2024 compared to the prior-year period, driven primarily by lower U.S. land-based customer activity levels (particularly in natural gas basins), competitive market conditions and our exit of certain underperforming service locations during the first half of 2024.

Previous wording

Operating Income. Our Well Site Services segment reported an operating loss of $0.5 million in the second quarter of 2024, which included charges totaling $2.9 million associated with facility consolidations and exits, and the defense of patents. This compares to operating income of $4.7 million in the second quarter of 2023. Excluding the 2024 charges discussed above, the Well Site Services segment’s operating results declined $2.4 million from the prior-year period, with the impact of the decrease in U.S. land-based revenues substantially offset by implemented cost control measures.

Current wording

Operating Income (Loss). Our Completion and Production Services segment reported an operating loss of $18.3 million in the third quarter of 2024, which included charges totaling $17.2 million associated with the exit of a service offering, facility consolidations and exits, the defense of patents and other management actions. This compares to operating income of $3.3 million in the third quarter of 2023. Excluding the 2024 charges discussed above, the Completion and Production Services segment’s operating income declined $4.3 million from the prior-year period, with the impact of the decrease in U.S. land-based revenues partially offset by implemented cost control measures.

Previous wording

Revenues. Our Downhole Technologies segment revenues decreased $1.9 million, or 5%, in the second quarter of 2024 from the prior-year period, driven primarily by lower U.S. customer activity levels and competitive market conditions.

Current wording

Revenues. Our Downhole Technologies segment revenues decreased $6.4 million, or 17%, in the third quarter of 2024 from the prior-year period, driven primarily by lower U.S. customer activity levels and competitive market conditions.

Previous wording

Operating Loss. Our Downhole Technologies segment reported an operating loss of $1.1 million in the second quarter of 2024, which compares to an operating loss of $0.1 million in the prior-year period, which included a $1.0 million non-cash provision for excess and obsolete inventory. Excluding the 2023 charge discussed above, the Downhole Technologies operating results declined $2.0 million from the prior-year period, due primarily to the reported decrease in revenues and lower manufacturing volumes.

Current wording

Operating Loss. Our Downhole Technologies segment reported an operating loss of $3.7 million in the third quarter of 2024, which included charges totaling $1.2 million associated with the exit of a facility, personnel reductions and a customer bankruptcy. This compares to an operating loss of $1.9 million in the third quarter of 2023. Excluding the 2024 charges discussed above, the Downhole Technologies segment’s operating loss increased $0.6 million year-over-year due primarily to the reported decrease in revenues and lower manufacturing volumes.

Previous wording

Operating Loss. Corporate expenses increased $0.5 million, or 4%, in the second quarter of 2024 from the prior-year period.

Current wording

Operating Loss. Corporate expenses decreased $2.4 million, or 22%, in the third quarter of 2024 from the prior-year period due primarily to lower short- and long-term incentive expenses.

Previous wording

We reported a net loss for the six months ended June 30, 2024 of $12.1 million, or $0.19 per share. The reported first six months net loss included: a non-cash goodwill impairment charge of $10.0 million ($9.5 million after-tax, or $0.15 per share) and facility consolidation and other charges of $6.9 million ($5.5 million after-tax, or $0.09 per share), partially offset by non-cash gains of $0.5 million ($0.4 million after-tax, or $0.01 per share) associated with debt extinguishment. These results compare to net income for the six months ended June 30, 2023 of $2.7 million, or $0.04 per share.

Current wording

We reported a net loss for the nine months ended September 30, 2024 of $26.4 million, or $0.42 per share. The reported first nine months net loss included net charges and credits of $34.6 million ($31.6 million after tax, or $0.51 per share) associated with the restructuring of certain of its U.S. land-based operations, facility consolidations and closures, patent defense, personnel reductions and debt extinguishment. These results compare to net income for the nine months ended September 30, 2023 of $6.9 million, or $0.11 per share, which included facility consolidation and other charges of $1.6 million ($1.3 million after-tax, or $0.02 per share).

Previous wording

Our first half 2024 results of operations reflect the impact of growth in offshore and international project activity and associated backlog conversion, partially offset by a decline in natural gas focused investments by our U.S. customers, competitive market conditions and management’s decisions to exit certain underperforming locations. Management continues to implement measures in areas experiencing lower activity levels to reduce future costs.

Current wording

Our results of operations for the first nine months of 2024 reflect the impact of operators continued investment in offshore and international project activity and associated backlog conversion, partially offset by a decline in land-based investments by our U.S. customers, competitive market conditions and management’s decision to exit certain underperforming locations and service offerings in the United States. Management expects to continue to implement measures to reduce costs in areas experiencing lower activity levels.

Previous wording

Revenues. Consolidated total revenues in the first six months of 2024 decreased $26.1 million, or 7%, from the first six months of 2023.

Current wording

Revenues. Consolidated total revenues in the first nine months of 2024 decreased $46.0 million, or 8%, from the first nine months of 2023.

Previous wording

Consolidated product revenues in the first six months of 2024 increased $10.4 million, or 5%, from the first six months of 2023, with the impact of higher customer demand for project-driven production facility products partially offset by a decline in U.S. customer demand for completion and perforating products. Consolidated service revenues in the first six months of 2024 decreased $36.5 million, or 20%, from the first six months of 2023. This decrease was concentrated in the United States – driven by lower land-based customer investments (particularly in natural gas basins), competitive market conditions and our exit of certain underperforming locations during the first six months of 2024, partially offset by higher offshore and international service activity.

Current wording

Consolidated product revenues in the first nine months of 2024 increased $8.6 million, or 3%, from the first nine months of 2023, with the impact of higher customer demand for project-driven production facility products and military products partially offset by a decline in U.S. customer demand for completion and perforating products. Consolidated service revenues in the first nine months of 2024 decreased $54.6 million, or 20%, from the first nine months of 2023. This decrease was concentrated in the United States – driven by lower land-based customer investments (particularly in natural gas basins), competitive market conditions and our exit of certain underperforming locations during the first half of 2024, partially offset by higher offshore and international service activity.