Oil States International Inc Q4 2024 Earnings Call Transcript

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

Question: Stephen Gengaro - Stifel Financial Corp. - Analyst : I think two things for me, Cindy, you kind of alluded to free cash flow of, it looks like, $40 million to $50 million next, in 2025. Are you focused on buybacks over debt reduction at this point? How do you think about the allocation of the free cash? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 21, 2025 / 3:00PM, OIS.N - Q4 2024 Oil States International Inc Earnings Call

Question: Stephen Gengaro - Stifel Financial Corp. - Analyst : Great. Thanks. And one of the things that kind of keeps surfacing in conversations is this sort of lack of offshore production capacity that sort of delayed rig activity. When we think about FPSO growth, can you give us a sense or remind us sort of the revenue opportunity you have on the FPSO side? I think one of the big players is sort of suggested [7 to 9] per year that are going to be ordered in the next couple of years. Can you just kind of frame your opportunity?

Question: Stephen Gengaro - Stifel Financial Corp. - Analyst : No, great. No, that's great color. And if I could just ask one more quick one, and that is, without asking you sort of specifics, you've sort of talked about streamlining opportunities and focusing on more value-added product lines. Of the revenue guidance you gave, if you just kind of use that as a framework, or even 2024, what percentage of that do you think falls in that category of sort of stuff that's kind of if we found a way to divest it, we reward? Is it 10% or is it greater? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 21, 2025 / 3:00PM, OIS.N - Q4 2024 Oil States International Inc Earnings Call

Question: Stephen Gengaro - Stifel Financial Corp. - Analyst : Yeah, no, that helps. That helps. That helps. Thank you.

Question: Stephen Gengaro - Stifel Financial Corp. - Analyst : Yeah, no, that is helpful. I think I probably asked the question poorly, but I think my question was, of the remainder of the business, so sort of what's left, currently. What percentage of that kind of revenue base is kind of what you sort of think about as sort of lower margin of stuff that would be back to candidates?

Question: James Rollyson - Raymond James - Analyst : Maybe taking Stephen's questions a step further, just so you talked about the revenue side of that. The other part you put in the press release on completion and production services was the kind of $20 million type of or just under $20 million of operating losses of stuff that you got rid of,

Question: James Rollyson - Raymond James - Analyst : Got it. That's very helpful, Cindy. Appreciate that. Following up on that, one of the things kind of heard over the course of the last, I don't know, three or four quarters from other manufacturers of various products is kind of this theme that backlog is kind of gradually rolling from lower margin work that was priced back coming out of COVID to gradually higher priced backlog as pricing has gotten better because the market got stronger. Maybe just a little bit of commentary around -- you talk about bidding opportunities and the general thesis seems to be your OMP revenues will grow year over year but maybe talk about the kind of margin profile there.

Question: James Rollyson - Raymond James - Analyst : Got it. Got it. And then one last follow-up is just kind of circling back to the $40 million, $50 million of free cash flow, if Stephen asked the question about debt repayment and that makes sense, especially given where your converts are trading, how do you think about deploying that free cash flow between buying back stock and just kind of building more cash given kind of where you are now and presumably where you are as of January with the extra collections?

Question: Blake McLean - Daniel Energy Partners - Analyst : I was hoping maybe on the international and offshore opportunities that you could just maybe provide a bit more color on the various markets and how they differentiate and what those outlooks look like from an activity perspective, from an Oil States' technology adoption perspective. Maybe just a little more color on the specific markets.

Question: Blake McLean - Daniel Energy Partners - Analyst : Got it. That's helpful. Thank you. I guess my last one, maybe on US land, you talked about sort of flattish activity, although you guys will have improving profitability, but how do you think about the trajectory of activity here going forward through the rest of this year? Hope springs eternal REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 21, 2025 / 3:00PM, OIS.N - Q4 2024 Oil States International Inc Earnings Call on the dry gas basins, I guess, but any color you would provide on how you're thinking about that or things you're looking at or customer conversations?