Oil States International Inc Q3 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: James Rollyson - Raymond James & Associates, Inc. - Analyst : Hey, Good morning everyone. You've been on this kind of interesting journey over the past couple of years of continually having to rightsize your US land-oriented businesses, just given what the market -- how the market dynamics have changed. I'm curious, as you've taken more measures this quarter and 4Q, I realize may not be the best barometer given some of the budget exhaustion comments we've heard around this earnings season. But maybe just a little bit of context of how you're thinking about the margin profile of both the Completion and Production Services and Downhole Technologies as we just move forward, given what you've done, given some of the new technology introductions, et cetera? Like how are you thinking about that in the context of what we've seen over the last few quarters?

Question: James Rollyson - Raymond James & Associates, Inc. - Analyst : In that business -- yes, very helpful. And I presume in Downhole Technologies, you might actually see revenue improvement as well just because of the new product kind of uptake in international markets.

Question: James Rollyson - Raymond James & Associates, Inc. - Analyst : Yeah. And then my follow-up question, I guess, we've heard kind of through this earnings season, some varying commentary, but one of the bottom lines I've heard is kind of with this pullback in oil prices, some of the shorter cycle activity, not just in the US, but even international, that's had a little more shaky ground, maybe the longer duration projects seem to be generally going forward. Just kind of as you talk to customers, especially this probably relates as much as anything to your Offshore Manufactured Products business, but just kind of how the conversations are going, and you guys had a great bookings quarter and backlog bounced back up to the highest level in four quarters. But just kind of trying to figure out how you're seeing the backdrop given what's kind of happened on the macro front.

Question: James Rollyson - Raymond James & Associates, Inc. - Analyst : Appreciate the color, and look forward to net debt zero.

Question: Stephen Gengaro - Stifel, Nicolaus & Company, Incorporated - Analyst : Hi, good morning everybody. So just to start, and I know you just gave some color on the margins in 2025. When we think about what you've done so far, is there more to come as far as some of these -- or is this sort of the bulk of the strategic initiatives on the different product lines?

Question: Stephen Gengaro - Stifel, Nicolaus & Company, Incorporated - Analyst : Okay. And then on the Offshore Manufactured Products business, I guess there's two questions here for me. One is, any guidance on sort of the turn of the backlog and how to think about that? But also the margins in the quarter were very good. I think it was the highest level since the back half of last year and I think one of the higher levels ever. How should we think about those margins in general? I mean, I always think about them as sort of high teens to low-20s. Is there any change to that based on what's in the backlog and pricing, et cetera?

Question: Stephen Gengaro - Stifel, Nicolaus & Company, Incorporated - Analyst : Okay. And any.

Question: Stephen Gengaro - Stifel, Nicolaus & Company, Incorporated - Analyst : Okay. Thats very helpful, i'll get back in line. Thank you. Thank you, Steohen.

Question: Sean Mitchell - Daniel Energy Partner - Analyst : Hey, good morning, team. Thanks for taking up my questions. You guys highlighted some Gulf of Mexico weakness in Q3 and the related storms that's returning -- it will be returning in Q4. But could you speak to kind of your outlook for the Gulf in '25, Cindy?

Question: Sean Mitchell - Daniel Energy Partner - Analyst : Yes, that was my fault, sorry.

Question: Sean Mitchell - Daniel Energy Partner - Analyst : Got it. And then you mentioned earlier in the call Brazil, but could you just walk us through international markets today, where you're seeing potential softness and where you're seeing opportunities for the business to grow in '25? I think you mentioned Brazil earlier, but is there anything else to add to any color around international?

Question: Sean Mitchell - Daniel Energy Partner - Analyst : Thank you so much for the color. thanks for taking my questions, I'll turn it back.

Question: Stephen Gengaro - Stifel, Nicolaus & Company, Incorporated - Analyst : Sorry, I was on mute, Cindy. I'm sorry. The two quick follow-ups, and I know you sort of, I'll call it, loosely guided on some C&P and Downhole margins next year. Are those kind of where you are today when you adjust for the businesses being sold? Or is there anything from a pricing activity or improvement perspective that you need to kind of get to those levels?

Question: Stephen Gengaro - Stifel, Nicolaus & Company, Incorporated - Analyst : Okay. Great. That's helpful. And then the other quick one was, I guess, they're a little bit tied together. But outside of that, I think, like $1.3 million of DD&A that's coming out of the C&P segment, is 4Q DD&A pretty flattish with the third quarter?

Question: Stephen Gengaro - Stifel, Nicolaus & Company, Incorporated - Analyst : Thanks, Lloyd. Thanks for the details.