Oil States International Inc (OIS) 2005 Q4 法說會逐字稿

Good day, ladies and gentlemen. Thank you for standing by, and welcome to the Oil States International Fourth Quarter 2005 Earnings Conference Call.

[OPERATOR INSTRUCTIONS]

I would now like to turn the presentation over to your host for today's conference, Bradley Dodson. Please proceed, sir.

Thank you. Good morning, everyone. Welcome to Oil States' yearend 2005 earnings conference call. Our call today will be led by Douglas Swanson, Oil States' President and Chief Executive Officer, and Cindy Taylor, Oil States' Senior Vice President and Chief Financial Officer.

Before we begin, I would like to caution listeners regarding forward-looking statements. To the extent our remarks today contain information other than historical information, we are relying on the Safe Harbor protections afforded by federal law. Any such remarks should be weighed in the context of the many factors that affect our business, including those risks disclosed in our Form 10-K and our other SEC filings.

I''ll turn it over to Doug.

Thank you, Bradley. And thank you for joining us on our fourth quarter earnings conference call. We are pleased to announce that Oil States completed the fourth quarter with record results led by continued strength in North American land drilling activity, increased volumes and prices in tubular services, the benefit of the impact of acquisitions completed during the 2005, and a recovery in our offshore products segment fueled by hurricane related repair work.

We significantly outperformed our previous guidance range due largely to contributions from tubular services and offshore products segments in addition to the tax benefit recorded during the quarter. All of our business segments reported significantly improved year-over-year operating results and were up sequentially as well, with the exception of Canada due to holiday shutdowns, extended warm weather, and equipment mobilization costs.

Our tubular service segment was up sequentially in revenues 15.7%, in EBITDA at 10.1%, due primarily to improved volumes. Our Well Site Service segment was up sequentially in revenues 7.9%, and EBITDA 5%. Our offshore products segment was up sequentially in revenues 18.9% and EBITDA was up 49.1%. Our offshore product EBITDA margins improved sequentially from 13% to 16.3%.

Our offshore products backlog decreased to 110.7 million from the third quarter level of 119.4 million. It was up 13.5% year-over-year. The backlog reduction was attributable primarily to strong sales during the quarter, coupled with the cancellation of orders for the Telemark TLP project by Norsk Hydro. This had a 5.7 million impact on our backlog, as that was the amount that was recorded in backlog at September 30th.

Net income was $0.82 per share, which more than doubled, when compared to the $0.31 per share reported in the fourth quarter. I'll now turn the agenda over to Cindy, who will go through our financials.

Thank you, Doug. Good morning everybody. For the fourth quarter 2005, we reported operating income of $59.1 million on revenues of 447.1 million. Our EBITDA totaled $72.4 million for the quarter. These results compare to $26.5 million of operating income on revenues of 293.1 million for the fourth quarter 2004. The fourth quarter 2004 EBITDA totaled 36 million. Our current quarter performance represents a 52.5% year-over-year increase in revenues and a 101.3% improvement in EBITDA. Sequentially, our revenues were up 13.4%, while EBITDA increased by 13.1%.

Our net income totaled $41.4 million, or $0.82 per diluted share, for the fourth quarter 2005. As Doug mentioned, our current quarter results reflect benefits of improved North American drilling activity; growth in the oil sands region of Canada, although tempered by obviously the quarter that we had there; contributions from acquisitions that we completed during 2005; coupled with a recovery in our offshore products segment, which was largely fueled by hurricane related repair work, which resulted in year-over-year growth in all of our business segments.

Our Well Site Services' EBITDA was up $19 million, or 89.1%, year-over-year. In addition, our Tubular Services segment continued to do very well during the quarter, fueled by the impact of continued strong demand for oil country tubular goods, the impact of the Phillips Casing & Tubing acquisition, which we closed on June 2nd 2005. Our Tubular Services' EBITDA was up $9.8 million, or 76.8%, year- over-year. Our Offshore Products segment contributed EBITDA growth of $7.6 million, or 156%, year-over-year due primarily to increased activity levels and margins associated with hurricane related repair work.

Our fourth quarter 2005 effective tax rate benefited from a reduction in the estimated annual effective tax rate and also the recognition of a 4.6 million income tax benefit related to the reversal of substantially all of our remaining valuation allowances applied against those respective net operating loss carry-forwards. The combined tax rate benefit in the quarter totaled approximately $0.13 per diluted share.

Just a few other points. Our capital expenditures during the quarter totaled $33.9 million, bringing the year-to-date spending for 2005 to 83.4 million. Our debt to capitalization ratio totaled 39% at December 31, 2005. Also, at December 31, 2005, the current availability under our bank credit facility totaled 90.4 million.

At this time, I'm going to turn the discussion back over to Doug, who is going to walk you through activities in each of our business segments. And then we will close with some thoughts as to the market outlook for our respective businesses.

At this time, I''d like to go through some of our highlights in our three business segments. Well Site Services' revenues were 152.8 million, up 7.9%. EBITDA was 40.4 million, up 5% from the previous quarter. Our margins in the fourth quarter of 2005 were 26.4%, down from 27.2% in the third quarter. This was due primarily to lower margins in our accommodation business. The sequential increase in revenues and EBITDA occurred primarily due to strength in our land drilling and rental tool operations.

Our accommodations support for Canadian drilling activity in oil sands were significantly hampered by holiday shutdowns, extended warm weather in the region, and the mobilization costs associated with mobilizing the equipment in there for the winter season. Our land drilling operations were strong sequentially in both revenues and EBITDA, due to strong utilization and improved pricing. Our average daily revenues were up $800 on a sequential basis to $11,600 a day. Our daily cash margin was up $900 a day to $5,100 per day compared to $4,200 a day in the fourth quarter.

In Offshore Products, revenue for the quarter was 76.4 million, 5 million up, 18.9% from the previous quarter. EBITDA was 12.4 million, up 49.1%. And we had margins in the fourth quarter of 2005 of 16.3% compared to 13% in the third quarter of 2005. As I mentioned earlier, our backlog declined to 110.7 million, a decline of 7.3% from the third quarter. Our EBITDA margins improved significantly year-over-year due to stronger activity levels, improved cost absorption, and higher margins on the pipeline repair and service work.

The backlog of 110.7 million was down 7.3% from the 119.4 million at September 30th. This decrease was primarily due to increased sales during the quarter coupled with Norsk Hydro's cancellation of the Telemark project, which was partially in backlog at September 30th. As of December 31st, we have not booked any of the Noble winch work into our backlog.

In Tubular Services, revenues for the fourth quarter were 217.8 million, up 15.7 million from the third quarter. EBITDA was 22.5 million, up 10.1%. Our gross margin was 11% in the fourth quarter of '05 compared to 12.3% in the third quarter. Our inventory increased to 274.2 million, up from 241.5 million at the end of the third quarter. Our turnover improved to 3 versus 2.9 in the third quarter.

Our tons shipped during the fourth quarter were 118,600 tons, a 13.9% increase from the third quarter, and our sales price was relatively flat at $1,834 a ton compared to 1,809 a ton in the third quarter of 2005. Year-over-year improvements in volumes were due to improved demand, increasing OCTG prices, and the benefits of the acquisitions. Volumes again were up 21.3% year-over-year and 13.9% sequentially.

Our order book remained strong in that the order book at the end of the fourth quarter was 296.6 million, essentially flat with the 300.7 million at the end of the third quarter, realizing again that it was flat that we had a significant sales increase in the fourth quarter. Our inventories increased by 32.7 million during the quarter due to increased volumes and partially due to offshore delays associated with the hurricanes.

Purchase prices were fairly flat for the quarter at $1,578 a ton compared to 1,462 a ton at September 30th, an increase of 7.9%. Approximately, 67% of our inventories is committed to customer orders. The OCTG industry inventories continued to increase during the quarter due to the Gulf of Mexico delays and related issues. Supply on the ground [increased] slightly. We estimate that it's 5.7 months.

In summarizing and looking out for 2006, in Well Site Services, our year-over-year results in Canada were hampered significantly by holiday related shutdowns, extended warm weather, and equipment mobilization costs. However, the long-term outlook is very bright due to the opportunities in the oil sands accommodation, given the construction activity in that region. Land drilling utilization and pricing is strong and should continue through 2006. Our 28th rig should spud its first well on March 1st, and our 29th rig will spud in September of 2006.

In the rental tool area, rental tool contribution should continue to increase due to acquisitions completed, rig count improvements, and improvements in the capacity of our equipment. Overall, we expect continued strength in the activity in the Well Site Services segment, led by the land drilling activity, the acquisitions completed in 2005, the impact of price increases for all our products, and a strong contribution from our Canadian operations.

Offshore Products segment, the outlook there. Fourth quarter revenues increased 18.9% and EBITDA up 49.1%. Our backlog position was down slightly, but has continued to improve on a year-over-year basis. Our mix of backlog is improving and the outlook for 2006 is robust. Key project potential in the market include Shenzi, Neptune, Akpo for production facilities, and mooring system upgrades for the rig equipment side of our business, particularly the potential for the Noble work.

The Akpo project has recently been awarded to us and will represent an increase in backlog of 18.3 million. This is primarily for SCR flex joints and receptacles. Again, this will be an increase in our backlog in the first quarter of 2006. Noble has advised us that we'll be performing their mooring system upgrades for the Noble Clyde Boudreaux and potentially for their EVA rigs. This is not in backlog, but we expect that the range of work could be up to $25 to $50 million for this project.

As a result, our offshore products segment operating results should continue to improve given this increased backlog, the significant bidding that we're doing and the potential that's out there, the improved product mix and the impact of the facility consolidations done over the past two years.

Tubular Service, our sales mix remains heavily weighted to alloy grades, approximately 70%. Prices were fairly flat during the fourth quarter for alloy grades, as mills announced price increases for alloy products in the fourth quarter of approximately $100 per ton which will benefit our first quarter results.

Our margins remained strong in the fourth quarter, due to customer demand, good pricing. However, our margins were down sequentially, primarily due to the mix of shipments which is attributable to the Phillips acquisition to some degree. We expect to realize strong revenues during 2006, with current activity levels and benefits from the Phillips acquisition.

In providing guidance, first quarter 2006 earnings should grow sequentially excluding the 2005 fourth quarter tax benefit. We will adopt stock option accounting in the first quarter of 2006. We expect the impact of adoption to approximate $2 -- $0.02 per share during the quarter, which brings our earnings guidance range to $0.75 to $0.80 per diluted share. SG&A is projected to total 24.1 million in the first quarter.

Increases are primarily due to the inclusion of stock option expense and higher ad valorem taxes on OCTG inventories. Our first quarter 2006 DD&A is projected to be $14 million. Our effective tax rate is estimated to be 36.5 to 37%, and our capital spending for 2006 is expected to be $125 million, subject to Board of Director approval on September -- February 15.

We'd be pleased to answer questions you might have.

Thank you, sir. [OPERATOR INSTRUCTIONS]

And sir, our first question is from the line of Thiru Ramakrishnan with Simmons.

Good morning, guys.

Good morning, Thiru.

First question, let's tackle tubulars. If you look at gross margins, they were down a little bit, probably, more a function of mix. Were there, perhaps, fewer Gulf of Mexico -- fewer higher margin Gulf of Mexico sales as well?

Yes. It's kind of a double impact there. We did have a large sales quarter in the fourth quarter, which we typically do have ended and it's oftentimes kind of mix related. But clearly, the disruption in the Gulf of Mexico and the lack of recovery there has weighted that mix, obviously, away from some of your high end alloy products more to carbon grades. And so I think the margins are kind of in line with expectations in light of that.

So going forward, we shouldn't expect that mix to change much?

We're still looking for very strong margins similar to what we've seen during 2005. We do expect to have a pretty good mix there. First quarter, obviously, may not be too much benefit. You'll get some benefit as the Gulf of Mexico recoveries but this -- I think that's a question of timing in everybody's mind right now.

Well, if you look at your inventories, it's about two-thirds committed. Is the pricing and the mix in that inventory -- on the committed inventory is that a better mix than what we saw in Q4?

I think it's plus or minus the same at this time, Thiru.

All right. And then, on the accommodations side, again, margins were down a little bit. Could you kind of go into more detail with respect to the unfavorable mix? You had more manufacturing work and, I guess, if holiday downtime and the -- kind of, colder weather was more onetime-ish in nature?

You are correct. We had holiday downtime in our Oil Sands operation. We had two holidays -- well, three holidays in the quarter - Thanksgiving holiday, plus we had the Christmas and New Year's, and they were on weekends. We had extended downtime at the Oil Sands operations as they released their workers.

In addition, we expected a very strong December for our E&P related accommodations business. We incurred costs to mobilize the equipment in the field but because of the warm weather they were unable to commence operations, and so we had a situation where we had low headcount utilizing our facilities during this period of time, which resulted in, obviously, higher costs without the revenue and lower margins. So it was a combination of these factors that contributed to the reduction in the margin for the quarter.

So it's safe to assume that margins should rebound in Q1?

We think the margins should rebound in Q1. Yes.

Now is this something we should expect to see in Q4 of '06 as well, kind of a seasonal--

Well, it's seasonal, and every year we -- the season, basically, in Canada can run from December through March. But if you have warm weather, then you have a situation like what we have a -- it really begins in January. And over the last five years, I think, probably two or three out of the last five years, we had warm weather, and it didn't start up until January.

Great. Last question on offshore products, EBITDA margins were excellent. Given the backlog we've heard from others with respect to Gulf of Mexico hurricane maintenance and repair work, should we expect these margins to persist in the first half of '06?

We're going to -- I wouldn't say it extends to the first half. I mean you're going to have a couple of issues there, and it's going to vary a little bit quarter-by-quarter, simply because we'll have a little bit of the continuation of the pipeline repair work that still occurred, obviously, in January. That will tail off as the Gulf of Mexico kind of resumes normal operations. So there's going to be, I think, a little bit of a pullback in our Houston operation because of that.

But the flip side of that is that our backlog is building. The mix, particularly with the Akpo project and the potential, I mean, we will do some of the Noble work. Those are very exciting opportunities for us. And so, it's really a matter of timing of when those projects kickoff. But they will help us enhance our margins. So we are very positive on really this segment, whether it's first quarter, second quarter type margins, it's a little tough call to tell. You're going to see, I think, good improvement in the margins.

You'll see improving margins over the year, whether it's quarter-by-quarter depending upon the business that's booked in that quarter.

That's great. Besides the Noble, have any other rig contractors begun to put in inquiries?

We've talked to other rig contractors, we'll continue to pursue them. We were advised recently that Diamond Offshore announced they were going to operate [10] other mooring systems that will cost about $4 million each. I think we have some of our mooring systems on their rigs. And it's a potential for us, but there's certainly nothing certain about that. But we think there's a lot of potential in upgrading other mooring systems for rigs that are working in the Gulf of Mexico.

Thanks guys. Great quarter.

Thanks Thiru.

And sir, our next question is from the line of Jeff Tillery with Pickering Energy Partners.

Good morning.

Good morning.

Just on the Tubular Services segment, over the past few quarters the percent of your inventory committed has declined from nearly 80% in Q2 to 67% this quarter. I know there was an acquisition in the middle of that, could you just speak to kind of what you're seeing and what's driving -- what's behind that decline?

I would say that if you look back in our history, kind of a normal type committed level is about 70%. When we were 80% committed -- I don't even recall that percentage, but that's high relative to kind of normal expectations. So I don't see the 67% as an anomaly. At this stage, it's more typically in line with what we see. So we don't really see a trend line or we carry what we call apparent backlog, which is an indicated - it's customer orders and indications of activity. And we balance our inventory position relative to that. And we feel comfortable with where we stand today. So I wouldn't take anything by a modest change in that level of committed inventory.

Okay. And then secondly, on your land drilling business, the sequential day rate margin improvement there, how much of that would you attribute to inherent pricing going up versus going from footage work to day work on your land rigs?

It's hard to break that down, but both of them did contribute. We've been continuing to pass on -- as you know, we switched over during the last half of the year from working on a footage basis to a day work basis. In Texas -- and we have substantially -- I think we all of our rigs now in Texas working on a day work basis. We've finally completed that transition in December.

We are increasing the day rates on renewals of these contracts. Again, the contracts are generally well to well contracts for 5, 10, 15, 20 wells. We're operating our day rates there, plus we are also realizing the benefits of the day work contract where we're not responsible for costs that are associated with footage, such as bits, mud, fuel, chemicals and things of that nature. But it's hard to differentiate between the two, but what we've seen is we're getting the benefit now, realizing that from the day work contracts, plus we are continuing to get cost increases -- price increases.

Okay. And then, my last question is on the rental tool business, the Stinger acquisition continues to bear fruits. But the underlying business was down year-over-year, or the base business ex Stinger was down year-over-year, is that continuing Gulf of Mexico impact or is there something else driving that?

I'd have to kind of flip back and check if it's really down. But I mean, obviously, the rental tool business and the base business, I think, it was kind of flattish. It's my recollection, Jeff. But generally speaking, our land based businesses did very well, as you would expect with the activity in those basins. Our offshore businesses were clearly down due to Gulf of Mexico delays, similar to what you're probably seeing with everybody else. So I would just say that that business, obviously, would tend to drive that.

All right. Thank you, guys. That's all I have.

[OPERATOR INSTRUCTIONS]

And sir, we have a question from Ken Sill with Credit Suisse.

Good morning.

Good morning, Ken.

One housekeeping question on the tubular side, how much inventory do you guys have in tons right now?

Hang on, I've got that handy. Our 12/31 tonnage was 173,200.

Okay. That's simple. And then, we already talked a little bit about the margins in offshore products, so you still have pipeline repair in Q1. Will some of that decline in margins as you move out of the repair and back into the more manufacturing and shipping things, will that decline in Q1 or will it kind of tail off as you move into Q2 and on?

We see a continuation in the first quarter of the pipeline repair and service business, and that has higher margins. We're providing personnel to assist in the repair and installation of pipeline. That will taper off, but we expect that the higher margin flexible joint business that we get with the like of the Akpo contract will kick in beginning in the second quarter and continue through the year. As a result, we expect higher margins, increased margins for 2006 due to these two factors.

Now, that'd be better margins for the year but maybe not as high you just got in Q4 or --

I think that's the case. I think the Q4 benefited from a high level of activity. We are -- it's still strong, it hasn't abated yet. However, we're not sure how long the length of this activity will occur.

Okay. And then, the sale of the hydraulic workover business to Boots & Coots, any update on the timing of that?

Right now, Boots & Coots did clear the FTC with their proxy. They've mailed and they've got a target -- we've got a targeted close date based upon their schedule with shareholders of March 1st. So we are using that as our expected timing.

And after that, that will just come out of your revenue and you'll get a minority interest line or --

That's exactly right. There's two components that we take there. We're going to get the equity in earnings, I think the percentage ownership is roughly 45%, my recollection of the combined entity. And in addition to that, we will have 15 to 19 million of notes depending upon working capital at closing that bear interest of 10%. So there is kind of two line items there. You're going to get the interest income and then the equity in earnings of affiliates.

Okay.

As we said when we issued the press release at the deal, we thought it kind of P&L netural through but you're absolutely right from a modeling perspective, you've got to convert that from full consolidation to equity method in combination with the notes.

Okay. And then what was my other question there? Yes, the backlog decline in offshore products but it sounds like that maybe just a timing issue with the Noble work and some of the flex joints and so.

Obviously the Akpo contract, the 18 million contract helps it and plus we have not booked any -- we haven't booked that at year end and we haven't booked any of the potential Noble work.

And how much was the Telemark cancellation?

5.7 million.

What we had in backlog at September 30th was 5.7 million. Obviously, there was larger potential in the project then what was in backlog because it was only partially in backlog at the end of the year so kind of vis-à-vis our planning for 2006, that was clearly a disappointment for us. But it's kind of been masked to a certain degree by other projects that are out there. We talked about Akpo. We've been bidding on that for quite some time.

We are working on Neptune and Shenzi. We think those two projects have been delayed somewhat by the evaluation of Gulf of Mexico damage that was incurred, particularly the typhoon facility. And so there are pluses and minuses there, but on balance if we look at the level of backlog that we have in our prospects, and really the timing of those prospects, we feel pretty good about the business and obviously in '06.

That's what I was thinking. I was just surprised to the backlog but the Telemark thing explains for that.

And the Telemark, Ken on the Telemark thing, Caldive is sort to taking over operatorship with that prospect and we've been in discussions with them about alternative production methods. So that's not a dead issue yet for Caldive.

And then finally in Well Site Services, just got another e-mail out of my Canadian analyst this morning saying that the weather continues to be an issue up in Alberta. What is the weather impact rolling over into Q1 in Well Site Services? How bigger recovery do you think we can see? It is obviously colder but is the business going to be as good or better than last year?

We are in full strength right now in terms of operations -- the activity level. I guess as it's really dependent on when the break up occurs and the weather you're going to have at the end of February and March. Basically all of our equipment is deployed and we have a high utilization at this point in time.

Again, we lost the month of December for a lot of practical purposes. And then, it all depends how long it extends. Now what we are seeing is a lot of the operators, because of the delays in December and because of the concerns, are booking equipment for summer work and next fall work and we are talking with them about that. And so this work has been just deferred, it hasn't been postponed indefinitely.

Okay. Thank you very much.

And sir, our next question is from the line of [Dan Goldberg] with Palisade Capital.

Hi people. I just had a question regarding financing. Currently with cash on hand and your bank line, how do you feel about going with that through the next year? And do we anticipate any future financings? And the second part of the question is other than the converts, how much is fixed versus floating?

Well, what we had, I think you aptly put it. We've got the $175 million of convertible notes on the balance sheet which are obviously fixed rate. And the issue there, we are already into the conversion premium. We had some shares. I think it was about 240,000 shares plus or minus that were in our share count in the fourth quarter to reflect that dilution impact of those bonds. The balance of our debt is all associated with a longer-term credit facility that's all floating in nature.

In terms of our current activity, we've got some good prospects for capital spending. Doug mentioned that we've got as many projects as roughly say 125 million. We're going to review those in detail with our Board next week. A lot of that spending is dedicated towards expansion in the Oil Sands region in Canada to take advantage of growth opportunities there.

In terms of acquisitions, historically we have taken very opportunistic looks at those. We will still do that. Our general thinking right now is those are going to be harder to do this year because of pricing expectations and a lot of kind of private equity capitalists competing for those acquisitions. So that's the real question mark. I mean absent that, we do continue to generate a lot of free cash flow even with an expanded CapEx program.

And so we wouldn't obviously need to do any financing unless we can identify strategic acquisitions as we have in the past and more importantly price those within our existing discipline. So you can't really specify it , but we kept a balance of fixed and floating debt. But the large reason for the convert was to free up availability to continue to be opportunistic when we found the opportunities that were right for the company.

Great. Thanks.

And so we have question from the line of Thad Vayda with First Albany Capital.

Good morning.

Good morning, Thad.

In the past you guys have talked about the utilization of the manufacturing facility of your products, can you give us a sense of, sort of, how that stands currently and what you anticipate going forward? And regarding the anticipated increases in margins, how much of that is related to specific projects, in other words better margins on products -- projects that you have currently, versus just increase in utilization of the facility?

Well, let me take a stab at it and I'll let Cindy add her comments. But one is we are seeing a better mix in our backlog in terms of margins. Again, we get higher margins in our connector products, in our flex joints, and the Akpo projects was just one of those projects that was a higher margin product project. That will benefit us.

We get higher margins in our pipeline repair and service work, which benefited our fourth quarter and will benefit our first quarter to some degree depending upon the extent of that work going forward. So we are seeing benefit there.

We had an increased utilization at the last half of 2005 in our manufacturing facilities. Based upon the backlog, the potential, the addition of the Akpo project, the potential for the Noble mooring systems that we will significantly increase our utilization of our capacity in 2006. So we expect further benefits there.

No, I think Doug's comments are great. You probably asked the hardest question that can be asked. But I guess there is two ways to look at it. If you're asking us, are our absolute margins going up? Historically these are project based or competitive bids and total margins I won't say have really escalated, meaning just the margins that you get for an individual project.

Mix is a significant issue in the sense that within a product offering, we've got commodity based products that may range anywhere from 15 to 20% margins, more proprietary projects, that are more 30 to 40%. So mix is a significant issue there. And as we stated, with the prospects that we have for activity in '06 that mix is improving for us relative to where we've been kind of in '04 and '05.

The other key factor is facility utilization, and it's the hardest to get your arms around, just because -- our Houma based facility, as an example, we had one winch system, which is actually the winch system that's on the Nobel Clyde Boudreaux currently or was till it was taken off is about the only winch system we've had in the facility in the last five years. So the prospects of up to five winch systems just from a facility utilization standpoint is obviously very exciting and will leverage our margins on an incremental basis.

I guess, the sort of follow-on is, you don't anticipate at this point that if all these prospects hit that there would be aggregate constraints on delivery from a utilization perspective?

We think that's a real possibility that with the backlog we have and the prospects we are bidding and the tight delivery timeframe that there -- it could strain our capacity. And I think that you'll see for us in incremental work that we get and for our competitors that you are going to have deliveries pushed back because it will constrain the capacity of the industry.

All right. Thank you.

And sir, we have a question from the line of Matt McGeary with Sentinel Asset Management.

Good morning. Do you have free cash flow numbers for the quarter and the full year?

We don't have them readily available with us. I have to apologize for that. We have got our preliminary cash flow statement, if that's what you are looking at. But I guess I can give you estimates based on that preliminary cash flow and cash flow from operations for the quarter was in the range of $33 million, which is pretty much what we see for the full year because of this significant working capital builds that we've had, particularly in our OCTG inventory because of those tonnage increases and price increases that have occurred over the period.

As we mentioned or I mentioned, in the course of the call, our capital spending for the quarter was 33.9 million, bringing the year-to-date spending to 83.4 million. And the other key item that affected the year, not necessarily the quarter, were the acquisitions that we've made, which approximated $150 million, but again, we didn't close acquisitions during the quarter, we just had some tweaking of purchase price accounting.

And then the balance, I think you are very familiar with from a financing side, we raised the bonds in June and July that aggregated 175 million in proceeds. We sold that in connection with a treasury stock repurchase, so there is 30 million of repurchases. But those are all in our prior cash flow statements. Prior to the quarter, there was no significant activity in the quarter other than free cash flow from operations and the capital spending.

Thank you.

And with that, we have no further questions. I would like to turn the call back over to the group for any further comments.

Well, thank you for joining us, and we look forward to talking with you in the future. Have a good day.

Ladies and gentlemen, we thank you for your participation in today's conference. This concludes your presentation and you may now disconnect.