HOUSTON, Nov. 13,
2024 /PRNewswire/ -- Drilling Tools International
Corp., (NASDAQ: DTI) ("DTI" or the "Company"), a global oilfield
services company that designs, engineers, manufactures and provides
a differentiated, rental-focused offering of tools for use in
onshore and offshore horizontal and directional drilling
operations, as well as other cutting-edge solutions across the well
life cycle, today reported its 2024 third quarter results.
DTI generated total consolidated revenue of $40.1 million in the third quarter of 2024.
Third quarter Tool Rental revenue was approximately $28.1 million and Product Sales revenue totaled
$12.0 million. Total Operating
Expenses were $35.8 million and
Income from Operations was $4.3
million. Net Income and Adjusted Net Income(1)
for the third quarter were $867,000
and $4.6 million, respectively.
Diluted EPS and Adjusted Diluted EPS(1) for the third
quarter were $0.03 and $0.14 per share, respectively. Third quarter
Adjusted EBITDA(1) was $11.1
million and Adjusted Free Cash Flow(1)(2) was
$7.8 million. As of September 30, 2024, DTI had approximately
$12 million of cash and cash
equivalents, and net debt of $32.1
million.
Wayne Prejean, Chief Executive
Officer of DTI, stated, "We are very pleased with the execution of
our acquisition growth strategy, especially in light of the
headwinds our industry has experienced. We believe acquiring
high quality companies at attractive multiples positions DTI to
successfully participate in the expected industry growth cycle over
the next three to five years. This elevated demand should further
strengthen the need for our innovative products, technological
solutions and superior services globally."
Prejean added, "Our third quarter results improved sequentially
but were less than expected due to the continuation of softer
market conditions. DTI remains a market leader with a strong
platform enabling future growth. We continue to enhance our cost
management program to align with market conditions. Accordingly, we
have revised our 2024 outlook based on our current visibility,
which also includes the sequential slowdown due to anticipated
holiday breaks, budget exhaustion and capital discipline being
employed by our customers in the fourth quarter. We remain
confident that DTI is well positioned to grow and gain share as the
market recovers."
Updated 2024 Full Year Outlook
|
Revenue
|
$145
million
|
-
|
$155
million
|
|
Adjusted Net
Income(1)
|
$7.7
million
|
-
|
$9.8
million
|
|
Adjusted
EBITDA(1)
|
$38
million
|
-
|
$43
million
|
|
Adjusted EBITDA
Margin(1)
|
26 %
|
-
|
28 %
|
|
Adjusted Free Cash
Flow(1)(2)
|
$18
million
|
-
|
$21
million
|
|
(1)
|
Adjusted Net Income,
Adjusted EBITDA, Adjusted EBITDA Margin, and Adjusted Free Cash
Flow are non-GAAP financial measures. See "Non-GAAP Financial
Measures" at the end of this release for a discussion
of reconciliations to the most directly comparable financial
measures calculated and presented in accordance with U.S. generally
accepted accounting principles ("GAAP").
|
|
(2)
|
Adjusted Free Cash Flow
defined as Adjusted EBITDA less Gross Capital
Expenditures.
|
2024 Third Quarter Conference Call Information
DTI's third quarter conference call can be accessed live via
dial-in or webcast on Thursday, November 14,
2024 at 10:00 a.m. Eastern Time (9:00 a.m. Central Time) by dialing 201-389-0869
and asking for the DTI call at least 10 minutes prior to the start
time, or via live webcast by logging onto the webcast at this URL
address: https://investors.drillingtools.com/news-events/events. An
audio replay will be available through November 21 by dialing 201-612-7415 and using
passcode 13749205#. Also, an archive of the webcast will be
available shortly after the call at
https://investors.drillingtools.com/news-events/events for 90 days.
Please submit any questions for management prior to the call via
email to DTI@dennardlascar.com.
About Drilling Tools International Corp.
DTI is a Houston, Texas based
leading oilfield services company that manufactures and rents
downhole drilling tools used in horizontal and directional drilling
of oil and natural gas wells. With roots dating back to 1984, DTI
now operates from 16 service and support centers across
North America and maintains 11
international service and support centers across the EMEA and APAC
regions. To learn more about DTI, please visit:
www.drillingtools.com.
Contact:
DTI Investor Relations
Ken Dennard / Rick Black
InvestorRelations@drillingtools.com
Forward-Looking Statements
This press release may include, and oral statements made from
time to time by representatives of the Company may include,
"forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Statements regarding
the business combination and the financing thereof, and related
matters, as well as all other statements other than statements of
historical fact included in this press release are forward-looking
statements. The words "anticipate," "believe," "continue," "could,"
"estimate," "expect," "intends," "may," "might," "plan,"
"possible," "potential," "predict," "project," "should," "will,"
"would" and similar expressions may identify forward-looking
statements, but the absence of these words does not mean that a
statement is not forward looking. These forward-looking statements
include, but are not limited to, statements regarding DTI and its
management team's expectations, hopes, beliefs, intentions or
strategies regarding the future. In addition, any statements that
refer to projections, forecasts or other characterizations of
future events or circumstances, including any underlying
assumptions, are forward-looking statements. Forward looking
statements in this press release may include, for example,
statements about: (1) the demand for DTI's products and services,
which is influenced by the general level activity in the oil and
gas industry; (2) DTI's ability to retain its customers,
particularly those that contribute to a large portion of its
revenue; (3) DTI's ability to employ and retain a sufficient
number of skilled and qualified workers, including its key
personnel; (4) DTI's ability to source tools and raw materials at a
reasonable cost; (5) DTI's ability to market its services in a
competitive industry; (6) DTI's ability to execute, integrate and
realize the benefits of acquisitions, and manage the resulting
growth of its business; (7) potential liability for claims arising
from damage or harm caused by the operation of DTI's tools, or
otherwise arising from the dangerous activities that are inherent
in the oil and gas industry; (8) DTI's ability to obtain additional
capital; (9) potential political, regulatory, economic and social
disruptions in the countries in which DTI conducts business,
including changes in tax laws or tax rates; (11) DTI's dependence
on its information technology systems, in particular Customer Order
Management Portal and Support System, for the efficient operation
of DTI's business; (11) DTI's ability to comply with applicable
laws, regulations and rules, including those related to the
environment, greenhouse gases and climate change; (12) DTI's
ability to maintain an effective system of disclosure controls and
internal control over financial reporting; (13) the potential for
volatility in the market price of DTI's common stock; (14) the
impact of increased legal, accounting, administrative and other
costs incurred as a public company, including the impact of
possible shareholder litigation; (15) the potential for issuance of
additional shares of DTI's common stock or other equity securities;
(16) DTI's ability to maintain the listing of its common stock on
Nasdaq; and (17) other risks and uncertainties separately provided
to you and indicated from time to time described in filings and
potential filings by DTI with the Securities and Exchange
Commission (the "SEC"). You should carefully consider the risks and
uncertainties described in the definitive proxy
statement/prospectus/consent solicitation statement with the SEC by
the Company on July 2, 2024 (the
"Proxy Statement"), and the information presented in DTI's annual
report on Form 10-K filed March 28,
2024 (the "10-K"). Such forward-looking statements are based
on the beliefs of management of DTI, as well as assumptions made
by, and information currently available to DTI's management. Actual
results could differ materially from those contemplated by the
forward-looking statements as a result of certain factors detailed
in the Proxy Statement or the 10-K. All subsequent written or oral
forward-looking statements attributable to the Company or persons
acting on its behalf are qualified in their entirety by this
paragraph. Forward-looking statements are subject to numerous
conditions, many of which are beyond the control of each of DTI,
including those set forth in the Risk Factors section of the Proxy
Statement and described in the 10-K. The Company undertakes no
obligation to update these statements for revisions or changes
after the date of this release, except as required by law.
Tables to Follow
|
Drilling Tools
International Corp.
|
|
Consolidated
Statement of Operations and Comprehensive Income
|
|
(In thousands of
U.S. dollars and rounded)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
|
Revenue,
net:
|
|
|
|
|
|
|
|
|
|
Tool rental
|
|
$
28,116
|
|
$
29,361
|
|
$
86,410
|
|
$
90,639
|
|
Product sale
|
|
11,977
|
|
8,777
|
|
28,190
|
|
26,206
|
|
Total revenue,
net
|
|
40,093
|
|
38,138
|
|
114,600
|
|
116,845
|
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
|
Cost of tool rental
revenue
|
|
4,076
|
|
7,337
|
|
17,558
|
|
21,578
|
|
Cost of product sale
revenue
|
|
5,726
|
|
1,814
|
|
10,779
|
|
5,862
|
|
Selling, general, and
administrative expense
|
|
19,855
|
|
16,552
|
|
57,415
|
|
50,999
|
|
Depreciation and
amortization expense
|
|
6,185
|
|
5,303
|
|
17,232
|
|
15,035
|
|
Total operating
costs and expenses
|
|
35,842
|
|
31,006
|
|
102,984
|
|
93,474
|
|
Income (loss) from
operations
|
|
4,251
|
|
7,132
|
|
11,616
|
|
23,371
|
|
Other expense,
net:
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
(1,038)
|
|
(73)
|
|
(2,030)
|
|
(995)
|
|
Gain (loss) on sale of
property
|
|
19
|
|
—
|
|
61
|
|
68
|
|
Gain (loss) on
remeasurement of previously held equity interest
|
|
(361)
|
|
(535)
|
|
368
|
|
(148)
|
|
Other income (expense),
net
|
|
(2,443)
|
|
(135)
|
|
(5,241)
|
|
(6,170)
|
|
Total other expense,
net
|
|
(3,823)
|
|
(743)
|
|
(6,842)
|
|
(7,245)
|
|
Income before income
tax expense
|
|
428
|
|
6,389
|
|
4,774
|
|
16,126
|
|
Income tax
(expense)/benefit
|
|
439
|
|
(2,102)
|
|
(415)
|
|
(5,201)
|
|
Net
income
|
|
$
867
|
|
$
4,287
|
|
$
4,359
|
|
$
10,925
|
|
Accumulated dividends
on redeemable convertible preferred stock
|
|
—
|
|
—
|
|
—
|
|
314
|
|
Net income available to
common shareholders
|
|
$
867
|
|
$
4,287
|
|
$
4,359
|
|
$
10,611
|
|
Basic earnings
per share
|
|
$
0.03
|
|
$
0.14
|
|
$
0.14
|
|
$
0.57
|
|
Diluted earnings per
share
|
|
$
0.03
|
|
$
0.14
|
|
$
0.14
|
|
$
0.46
|
|
Basic weighted-average
common shares outstanding*
|
|
33,072,097
|
|
29,768,568
|
|
30,893,602
|
|
18,608,708
|
|
Diluted
weighted-average common shares outstanding*
|
|
33,547,056
|
|
30,043,546
|
|
31,404,333
|
|
23,554,593
|
|
Comprehensive
income:
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
867
|
|
$
4,287
|
|
$
4,359
|
|
$
10,925
|
|
Foreign currency
translation adjustment, net of tax
|
|
1,161
|
|
90
|
|
753
|
|
(117)
|
|
Net comprehensive
income
|
|
$
2,028
|
|
$
4,377
|
|
$
5,112
|
|
$
10,808
|
|
|
|
|
|
|
|
|
|
|
* Shares of legacy
redeemable convertible preferred stock and legacy common stock have
been retroactively restated to give effect to the
Merger.
|
|
Drilling Tools
International Corp.
|
|
Consolidated Balance
Sheets
|
|
(In thousands of
U.S. dollars and rounded)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
September
30,
|
|
December 31,
|
|
|
2024
|
|
2023
|
|
ASSETS
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash
|
|
$
11,961
|
|
$
6,003
|
|
Accounts receivable,
net
|
|
33,152
|
|
29,929
|
|
Related party note
receivable, current
|
|
1,310
|
|
—
|
|
Inventories,
net
|
|
17,352
|
|
5,034
|
|
Prepaid expenses and
other current assets
|
|
4,967
|
|
4,553
|
|
Investments - equity
securities, at fair value
|
|
—
|
|
888
|
|
Total current
assets
|
|
68,742
|
|
46,408
|
|
Property, plant and
equipment, net
|
|
77,660
|
|
65,800
|
|
Operating lease
right-of-use asset
|
|
23,887
|
|
18,786
|
|
Intangible assets,
net
|
|
30,866
|
|
216
|
|
Goodwill
|
|
10,970
|
|
—
|
|
Deferred financing
costs, net
|
|
903
|
|
409
|
|
Related party note
receivable, noncurrent
|
|
3,740
|
|
—
|
|
Deposits and other
long-term assets
|
|
2,076
|
|
879
|
|
Total
assets
|
|
$
218,844
|
|
$
132,498
|
|
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Accounts
payable
|
|
$
9,054
|
|
$
7,751
|
|
Accrued expenses and
other current liabilities
|
|
12,337
|
|
10,579
|
|
Revolving line of
credit
|
|
21,164
|
|
—
|
|
Current portion of
operating lease liabilities
|
|
4,441
|
|
3,958
|
|
Current maturities of
long-term debt
|
|
5,000
|
|
—
|
|
Total current
liabilities
|
|
51,996
|
|
22,288
|
|
Operating lease
liabilities, less current portion
|
|
19,533
|
|
14,893
|
|
Long-term
debt
|
|
17,917
|
|
—
|
|
Deferred tax
liabilities, net
|
|
6,208
|
|
6,627
|
|
Total
liabilities
|
|
95,654
|
|
43,808
|
|
Commitments and
contingencies
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
Common stock, $0.0001
par value, shares authorized 500,000,000 as of September 30,
2024 and
December 31, 2023,
34,704,696 shares issued and outstanding as of September 30, 2024
and
29,768,568 shares issued and outstanding as of December 31,
2023
|
|
3
|
|
3
|
|
Additional
paid-in-capital
|
|
124,896
|
|
95,218
|
|
Accumulated
deficit
|
|
(2,238)
|
|
(6,306)
|
|
Accumulated other
comprehensive loss
|
|
529
|
|
(225)
|
|
Total shareholders'
equity
|
|
123,190
|
|
88,690
|
|
Total liabilities
and shareholders' equity
|
|
$
218,844
|
|
$
132,498
|
|
Drilling Tools
International Corp.
|
|
Consolidated
Statement of Cash Flows
|
|
(In thousands of
U.S. dollars and rounded)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
|
2024
|
|
2023
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
Net income
|
|
$
4,359
|
|
$
10,925
|
|
Adjustments to
reconcile net income to net cash from operating
activities:
|
|
|
|
|
|
Depreciation and
amortization
|
|
17,232
|
|
15,035
|
|
Amortization of
deferred financing costs
|
|
226
|
|
88
|
|
Non-cash lease
expense
|
|
3,620
|
|
3,418
|
|
Provision for excess
and obsolete inventory
|
|
—
|
|
22
|
|
Provision for excess
and obsolete property and equipment
|
|
286
|
|
381
|
|
Provision for credit
losses
|
|
42
|
|
502
|
|
Deferred tax
expense
|
|
(1,301)
|
|
3,741
|
|
Gain on sale of
property
|
|
(72)
|
|
(68)
|
|
Loss on asset
disposal
|
|
27
|
|
—
|
|
Realized loss on
interest rate swaps
|
|
—
|
|
4
|
|
Unrealized gain on
equity securities
|
|
(368)
|
|
148
|
|
Realized loss on equity
securities
|
|
12
|
|
—
|
|
Gross profit from sale
of lost-in-hole equipment
|
|
(7,348)
|
|
(13,968)
|
|
Stock-based
compensation expense
|
|
1,572
|
|
3,986
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
Accounts receivable,
net
|
|
2,086
|
|
(577)
|
|
Prepaid expenses and
other current assets
|
|
(633)
|
|
(92)
|
|
Inventories,
net
|
|
(2,883)
|
|
(2,876)
|
|
Operating lease
liabilities
|
|
(3,416)
|
|
(3,311)
|
|
Accounts
payable
|
|
(2,802)
|
|
(888)
|
|
Accrued expenses and
other current liabilities
|
|
(916)
|
|
1,014
|
|
Net cash flows from
operating activities
|
|
9,723
|
|
17,484
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
Acquisition of a
business, net of cash acquired
|
|
(38,670)
|
|
—
|
|
Proceeds from sale of
equity securities
|
|
1,244
|
|
—
|
|
Proceeds from sale of
property, plant and equipment
|
|
77
|
|
126
|
|
Purchases of property,
plant and equipment
|
|
(19,678)
|
|
(36,776)
|
|
Proceeds from sale of
lost-in-hole equipment
|
|
10,895
|
|
16,623
|
|
Net cash from
investing activities
|
|
(46,132)
|
|
(20,027)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
Proceeds from Merger
and PIPE Financing, net of transaction costs
|
|
—
|
|
23,162
|
|
Payment of deferred
financing costs
|
|
(721)
|
|
(322)
|
|
Proceeds from revolving
line of credit
|
|
30,062
|
|
71,646
|
|
Payments on revolving
line of credit
|
|
(8,898)
|
|
(89,995)
|
|
Proceeds from Term
Loan
|
|
25,000
|
|
—
|
|
Repayment of Term
Loan
|
|
(2,083)
|
|
—
|
|
Payments to holders of
DTIH redeemable convertible preferred stock in connection
with
retiring their DTI
stock upon the Merger
|
|
—
|
|
(194)
|
|
Net cash from
financing activities
|
|
43,360
|
|
4,297
|
|
Effect of Changes in
Foreign Exchange Rate
|
|
(993)
|
|
(117)
|
|
Net Change in
Cash
|
|
5,958
|
|
1,637
|
|
Cash at Beginning of
Period
|
|
6,003
|
|
2,352
|
|
Cash at End of
Period
|
|
$
11,961
|
|
$
3,989
|
|
Supplemental cash
flow information:
|
|
|
|
|
|
Cash paid for
interest
|
|
$
1,488
|
|
$
901
|
|
Cash paid for income
taxes
|
|
$
256
|
|
$
2,546
|
|
Non-cash investing
and financing activities:
|
|
|
|
|
|
Fair value of CTG
liabilities assumed in CTG Acquisition
|
|
$
3,162
|
|
$
—
|
|
Fair value of SDPI
liabilities assumed in SDPI Acquisition
|
|
$
6,246
|
|
$
—
|
|
ROU assets obtained in
exchange for lease liabilities
|
|
$
5,737
|
|
$
3,002
|
|
Non-cash recovery of
note receivable
|
|
$
453
|
|
$
—
|
|
Net exercise of stock
options
|
|
$
254
|
|
$
—
|
|
Shares withheld from
exercise of stock options for payment of taxes
|
|
$
36
|
|
$
—
|
|
Purchases of inventory
included in accounts payable and accrued expenses and
other
current
liabilities
|
|
$
1,592
|
|
$
451
|
|
Purchases of property
and equipment included in accounts payable and accrued
expenses
and other current
liabilities
|
|
$
—
|
|
$
1,733
|
|
Non-cash directors and
officers insurance
|
|
$
—
|
|
$
1,063
|
|
Non-cash Merger
financing
|
|
$
—
|
|
$
2,000
|
|
Exchange of DTIH
redeemable convertible preferred stock for DTIC Common Stock
in
connection with the
Merger
|
|
$
—
|
|
$
7,193
|
|
Issuance of DTIC Common
Stock to former holders of DTIH redeemable convertible
preferred stock in
connection with Exchange Agreements
|
|
$
—
|
|
$
10,805
|
|
Accretion of redeemable
convertible preferred stock to redemption value
|
|
$
—
|
|
$
314
|
Non-GAAP Financial Measures
This release includes Adjusted EBITDA, Adjusted Free Cash Flow,
Net Debt and Adjusted Net Income measures. Each of the metrics are
"non-GAAP financial measures" as defined in Regulation G of the
Securities Exchange Act of 1934.
Adjusted EBITDA is a supplemental non-GAAP financial measure
that is used by management and external users of our financial
statements, such as industry analysts, investors, lenders and
rating agencies. Adjusted EBITDA is not a measure of net earnings
or cash flows as determined by GAAP. We define Adjusted EBITDA as
net earnings (loss) before interest, taxes, depreciation and
amortization, further adjusted for (i) goodwill and/or long-lived
asset impairment charges, (ii) stock-based compensation expense,
(iii) restructuring charges, (iv) transaction and integration costs
related to acquisitions and (v) other expenses or charges to
exclude certain items that we believe are not reflective of ongoing
performance of our business.
We believe Adjusted EBITDA is useful because it allows us to
supplement the GAAP measures in order to more effectively evaluate
our operating performance and compare the results of our operations
from period to period without regard to our financing methods or
capital structure. We exclude the items listed above in arriving at
Adjusted EBITDA because these amounts can vary substantially from
company to company within our industry depending upon accounting
methods and book values of assets, capital structures and the
method by which the assets were acquired. Adjusted EBITDA should
not be considered as an alternative to, or more meaningful than,
net income as determined in accordance with GAAP, or as an
indicator of our operating performance or liquidity. Certain items
excluded from Adjusted EBITDA are significant components in
understanding and assessing a company's financial performance, such
as a company's cost of capital and tax structure, as well as the
historic costs of depreciable assets, none of which are components
of Adjusted EBITDA. Our computations of Adjusted EBITDA may not be
comparable to other similarly titled measures of other
companies.
Adjusted Free Cash Flow is a supplemental non-GAAP financial
measure, and we define Adjusted Free Cash Flow as Adjusted EBITDA
less Gross Capital Expenditures. We use Adjusted Free Cash Flow as
a financial performance measure used for planning, forecasting, and
evaluating our performance. We believe that Adjusted Free Cash Flow
is useful to enable investors and others to perform comparisons of
current and historical performance of the Company. As a performance
measure, rather than a liquidity measure, the most closely
comparable GAAP measure is net income (loss).
Net Debt is a supplemental non-GAAP financial measure, and we
define Net Debt as total debt less cash and cash equivalents. We
use Net Debt to determine our outstanding debt obligations that
would not be readily satisfied by our cash and cash equivalents on
hand. We believe this metric is useful to analysts and investors in
determining our leverage position since we have the ability to, and
may decide to, use a portion of our cash and cash equivalents to
reduce debt.
We define Adjusted Net Income (Loss) as consolidated net income
(loss) adjusted for (i) goodwill and/or long-lived asset impairment
charges, (ii) restructuring charges, (iii) transaction and
integration costs related to acquisitions, (iv) income taxes
expense which is calculated by applying our effective tax rate on
unadjusted net income to adjusted pre-tax income, and (v) other
expenses or charges to exclude certain items that we believe are
not reflective of the ongoing performance of our business. We
believe Adjusted Net Income (Loss) is useful because it allows us
to exclude non-recurring items in evaluating our operating
performance.
We define Adjusted Diluted Earnings (Loss) per share as the
quotient of adjusted net income (loss) and diluted weighted average
common shares. We believe that Adjusted Diluted Earnings (Loss) per
share provides useful information to investors because it allows us
to exclude non-recurring items in evaluating our operating
performance on a diluted per share basis.
The following tables present a reconciliation of the non-GAAP
financial measures of Adjusted EBITDA, Adjusted Free Cash Flow and
Adjusted Net Income to the most directly comparable GAAP financial
measures for the periods indicated:
|
Drilling Tools
International Corp.
|
|
Reconciliation of
GAAP to Non-GAAP Measures (Unaudited)
|
|
(In thousands of
U.S. dollars and rounded)
|
|
|
|
Three Months Ended
September 30,
|
|
|
2024
|
|
2023
|
|
Net income
(loss)
|
|
$
867
|
|
$
4,287
|
|
Add
(deduct):
|
|
|
|
|
|
Income tax
expense/(benefit)
|
|
(439)
|
|
2,102
|
|
Depreciation and
amortization
|
|
6,185
|
|
5,303
|
|
Interest expense,
net
|
|
1,038
|
|
73
|
|
Stock option
expense
|
|
508
|
|
—
|
|
Management
fees
|
|
188
|
|
295
|
|
Loss (gain) on sale
property
|
|
(19)
|
|
—
|
|
Loss (gain) on
remeasurement of previously held equity interest
|
|
361
|
|
535
|
|
Transaction
expense
|
|
1,857
|
|
124
|
|
Other expense,
net
|
|
579
|
|
10
|
|
Adjusted
EBITDA
|
|
$
11,125
|
|
$
12,729
|
|
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
|
2024
|
|
2023
|
|
Net income
(loss)
|
|
$
4,359
|
|
$
10,925
|
|
Add
(deduct):
|
|
|
|
|
|
Income tax
expense/(benefit)
|
|
415
|
|
5,201
|
|
Depreciation and
amortization
|
|
17,232
|
|
15,035
|
|
Interest expense,
net
|
|
2,030
|
|
995
|
|
Stock option
expense
|
|
1,572
|
|
1,661
|
|
Management
fees
|
|
563
|
|
773
|
|
Loss (gain) on sale of
property
|
|
(61)
|
|
(68)
|
|
Loss (gain) on
remeasurement of previously held equity interest
|
|
(368)
|
|
148
|
|
Transaction
expense
|
|
4,766
|
|
5,963
|
|
Other expense,
net
|
|
475
|
|
207
|
|
Adjusted
EBITDA
|
|
$
30,982
|
|
$
40,840
|
|
Drilling Tools
International Corp.
|
|
Reconciliation of
GAAP to Non-GAAP Measures (Unaudited)
|
|
(In thousands of
U.S. dollars and rounded)
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
|
2024
|
|
2023
|
|
Net income
(loss)
|
|
$
867
|
|
$
4,287
|
|
Add
(deduct):
|
|
|
|
|
|
Income tax
expense/(benefit)
|
|
(439)
|
|
2,102
|
|
Depreciation and
amortization
|
|
6,185
|
|
5,303
|
|
Interest expense,
net
|
|
1,038
|
|
73
|
|
Stock option
expense
|
|
508
|
|
—
|
|
Management
fees
|
|
188
|
|
295
|
|
Loss (gain) on sale of
property
|
|
(19)
|
|
—
|
|
Unrealized (gain) loss
on equity securities
|
|
361
|
|
535
|
|
Transaction
expense
|
|
1,857
|
|
124
|
|
Other expense,
net
|
|
579
|
|
10
|
|
Gross capital
expenditures
|
|
(3,366)
|
|
(12,159)
|
|
Adjusted Free Cash
Flow
|
|
$
7,757
|
|
$
570
|
|
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
|
2024
|
|
2023
|
|
Net income
(loss)
|
|
$
4,359
|
|
$
10,925
|
|
Add
(deduct):
|
|
|
|
|
|
Income tax
expense/(benefit)
|
|
415
|
|
5,201
|
|
Depreciation and
amortization
|
|
17,232
|
|
15,035
|
|
Interest expense,
net
|
|
2,030
|
|
995
|
|
Stock option
expense
|
|
1,572
|
|
1,661
|
|
Management
fees
|
|
563
|
|
773
|
|
Loss (gain) on sale of
property
|
|
(61)
|
|
(68)
|
|
Unrealized (gain) loss
on equity securities
|
|
(368)
|
|
148
|
|
Transaction
expense
|
|
4,766
|
|
5,963
|
|
Other expense,
net
|
|
475
|
|
207
|
|
Gross capital
expenditures
|
|
(19,678)
|
|
(36,776)
|
|
Adjusted Free Cash
Flow
|
|
$
11,303
|
|
$
4,064
|
|
|
|
|
|
|
Drilling Tools
International Corp.
|
|
Reconciliation of
GAAP to Non-GAAP Measures (Unaudited)
|
|
(In thousands of
U.S. dollars and rounded)
|
|
|
|
Three Months Ended
September 30,
|
|
|
2024
|
|
2023
|
|
Net income
(loss)
|
|
$
867
|
|
$
4,287
|
|
Transaction
expense
|
|
1,857
|
|
124
|
|
Income tax
expense/(benefit)
|
|
(439)
|
|
2,102
|
|
Adjusted Income Before
Tax
|
|
$
2,285
|
|
$
6,513
|
|
Adjusted Income tax
expense
|
|
2,345
|
|
(2,143)
|
|
Adjusted Net
Income
|
|
$
4,630
|
|
$
4,370
|
|
Accumulated dividends
on redeemable convertible preferred stock
|
|
—
|
|
—
|
|
Adjusted Net income
available to common shareholders
|
|
$
4,630
|
|
$
4,370
|
|
Adjusted Basic
earnings per share
|
|
$
0.14
|
|
$
0.15
|
|
Adjusted Diluted
earnings per share
|
|
$
0.14
|
|
$
0.15
|
|
Basic weighted-average
common shares outstanding
|
|
33,072,097
|
|
29,768,568
|
|
Diluted
weighted-average common shares outstanding
|
|
33,547,056
|
|
30,043,546
|
|
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
|
2024
|
|
2023
|
|
Net income
(loss)
|
|
$
4,359
|
|
$
10,925
|
|
Transaction
expense
|
|
4,766
|
|
5,963
|
|
Income tax
expense/(benefit)
|
|
415
|
|
5,201
|
|
Adjusted Income Before
Tax
|
|
$
9,540
|
|
$
22,089
|
|
Adjusted Income tax
expense
|
|
(830)
|
|
(7,124)
|
|
Adjusted Net
Income
|
|
$
8,710
|
|
$
14,965
|
|
Accumulated dividends
on redeemable convertible preferred stock
|
|
—
|
|
314
|
|
Adjusted Net income
available to common shareholders
|
|
$
8,710
|
|
$
14,651
|
|
Adjusted Basic
earnings per share
|
|
$
0.28
|
|
$
0.79
|
|
Adjusted Diluted
earnings per share
|
|
$
0.28
|
|
$
0.64
|
|
Basic weighted-average
common shares outstanding
|
|
30,893,602
|
|
18,608,708
|
|
Diluted
weighted-average common shares outstanding
|
|
31,404,333
|
|
23,554,593
|
|
Drilling Tools
International Corp.
|
|
Reconciliation of
Estimated Consolidated Net Income to Adjusted EBITDA
|
|
(In thousands of
U.S. dollars and rounded)
|
|
(Unaudited)
|
|
|
|
Twelve Months Ended
December 31, 2024
|
|
|
Low
|
|
High
|
|
Net Income
|
|
$
2,500
|
|
$
4,500
|
|
Add (deduct)
|
|
|
|
|
|
Interest expense,
net
|
|
2,500
|
|
2,800
|
|
Income tax
expense
|
|
200
|
|
800
|
|
Depreciation and
amortization
|
|
24,000
|
|
25,000
|
|
Management
fees
|
|
700
|
|
750
|
|
Other
expense
|
|
300
|
|
550
|
|
Stock option
expense
|
|
2,200
|
|
2,300
|
|
Transaction
expense
|
|
5,600
|
|
6,300
|
|
Adjusted
EBITDA
|
|
$
38,000
|
|
$
43,000
|
|
Revenue
|
|
145,000
|
|
155,000
|
|
Adjusted EBITDA
Margin
|
|
26 %
|
|
28 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Drilling Tools
International Corp.
|
|
Reconciliation of
Estimated Consolidated Net Income to Adjusted Free Cash
Flow
|
|
(In thousands of
U.S. dollars and rounded)
|
|
(Unaudited)
|
|
|
|
|
Twelve Months Ended
December 31, 2024
|
|
|
|
Low
|
|
High
|
|
Net Income
|
|
|
$
2,500
|
|
$
4,500
|
|
Add (deduct)
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
2,500
|
|
2,800
|
|
Income tax
expense
|
|
|
200
|
|
800
|
|
Depreciation and
amortization
|
|
24,000
|
|
25,000
|
|
Management
fees
|
|
|
700
|
|
750
|
|
Other
expense
|
|
|
300
|
|
550
|
|
Stock option
expense
|
|
|
2,200
|
|
2,300
|
|
Transaction
expense
|
|
|
5,600
|
|
6,300
|
|
Gross capital
expenditures
|
|
|
(20,000)
|
|
(22,000)
|
|
Adjusted Free Cash
Flow
|
|
|
$
18,000
|
|
$
21,000
|
|
Adjusted Free Cash
Flow Margin
|
|
12 %
|
|
14 %
|
|
|
|
|
|
|
|
|
Drilling Tools
International Corp.
|
|
Reconciliation of
Estimated Consolidated Net Income to Adjusted Net
Income
|
|
(In thousands of
U.S. dollars and rounded)
|
|
(Unaudited)
|
|
|
|
|
Twelve Months Ended
December 31, 2024
|
|
|
|
Low
|
|
High
|
|
Net income
(loss)
|
|
|
$
2,500
|
|
$
4,500
|
|
Transaction
expense
|
|
|
$
5,600
|
|
$
6,300
|
|
Income tax
expense
|
|
|
200
|
|
800
|
|
Adjusted Income
Before Tax
|
|
|
$
8,300
|
|
$
11,600
|
|
Adjusted Income tax
expense
|
|
600
|
|
1,800
|
|
Adjusted Net
Income
|
|
|
$
7,700
|
|
$
9,800
|
View original
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SOURCE Drilling Tools International Corp.
