Oil States International (OIS) swung to a net loss for the quarter ended Sep. 30, 2016. The company has made a net loss of $10.82 million, or $ 0.22 a share in the quarter, against a net profit of $1.73 million, or $0.03 a share in the last year period.     

Revenue during the quarter plunged 30.86 percent to $179.01 million from $258.89 million in the previous year period. Gross margin for the quarter contracted 300 basis points over the previous year period to 24.16 percent. Operating margin for the quarter stood at negative 8.73 percent as compared to a positive 2.57 percent for the previous year period.

Operating loss for the quarter was $15.63 million, compared with an operating income of $6.65 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $16.21 million compared with $39.50 million in the prior year period. At the same time, adjusted EBITDA margin contracted 620 basis points in the quarter to 9.05 percent from 15.26 percent in the last year period.

Oil States’ president and chief executive officer, Cindy B. Taylor, stated, "The third quarter provided a number of constructive leading indicators for the energy industry. The average quarterly U.S. rig count improved 14% quarter-over-quarter, average natural gas prices increased over 30% in the third quarter and WTI crude oil prices increased following the second quarter, with WTI currently trading at $50 per barrel. Despite these positive data points, activity levels have not yet improved materially in our well site services segment which is primarily weighted to the U.S. onshore markets we serve. Our well site services revenues grew sequentially due to increases in the number of completion services jobs performed coupled with an increase in our land rig fleet utilization. However, adjusted quarterly EBITDA for the segment, while improved sequentially, was still below break-even. Our offshore products segment reported revenues above our guided range with average EBITDA margins of 22% for the third quarter. However, our book to bill ratio was 0.54x, resulting in a sequential backlog decline of 24%, ending the quarter at $203 million."

The company has spent $24.40 million cash to meet investing activities during the nine month period as against cash outgo of $124.32 million in the last year period. It has incurred net capital expenditure of $22.87 million on net basis during the nine month period, down 74.71 percent or $67.54 million from year ago period.

The company has spent $63.71 million cash to carry out financing activities during the nine month period as against cash outgo of $95.78 million in the last year period.

Cash and cash equivalents stood at $53.79 million as on Sep. 30, 2016, down 37.25 percent or $31.93 million from $85.72 million on Sep. 30, 2015.

Working capital declines
Oil States International has witnessed a decline in the working capital over the last year. It stood at $399.84 million as at Sep. 30, 2016, down 13.65 percent or $63.22 million from $463.06 million on Sep. 30, 2015. Current ratio was at 4.47 as on Sep. 30, 2016, up from 3.50 on Sep. 30, 2015.

Cash conversion cycle (CCC) has decreased to 168 days for the quarter from 184 days for the last year period. Days sales outstanding went up to 141 days for the quarter compared with 106 days for the same period last year.

Days inventory outstanding has decreased to 66 days for the quarter compared with 114 days for the previous year period. At the same time, days payable outstanding went up to 38 days for the quarter from 36 for the same period last year.