Updates 2024 Guidance and Maintains
Adjusted Free Cash Flow Outlook
HOUSTON, Aug. 6, 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
drilling operations, as well as other cutting-edge solutions across
the well life cycle, today announced that it has closed on its
acquisition of Superior Drilling Products, Inc. ("SDP") for total
consideration paid in cash and DTI stock of approximately
$32.2 million per the merger
agreement, subject to purchase price accounting adjustments. DTI
also reported today its 2024 second quarter results.
Wayne Prejean, CEO of DTI,
stated, "We are pleased to announce the closing of the SDP
acquisition and are excited to welcome SDP's talented team to the
DTI family and add SDP's world-class manufacturing expertise into
our broad-reaching and expanding global sales channels. This
acquisition furthers DTI's growth strategy as a premier provider of
technologically differentiated solutions and services for the
global oil & gas drilling industry. Directly integrating SDP's
patented Drill-N-Ream® ("DNR") well bore conditioning tool into
DTI's vast fleet of tools and technologies provides expanded
geographic market potential, lowers our capital requirements and
operating costs, and improves operational efficiencies across our
portfolio of capabilities. SDP's unique offering of proprietary
diamond process expertise, sophisticated manufacturing
capabilities, and their recently established Middle East footprint will greatly benefit
DTI's technology focused product and service offering on a global
scale."
Prejean added, "We expect to benefit from significant synergies
over the next twelve months from this acquisition and have
identified more than $4.5 million of
SG&A synergies and realizable NOL tax benefits. In addition,
there are vertical and horizontal integration synergies that
include approximately 60% CapEx savings on new DNR tools and a 45%
Repair & Maintenance margin capture. I would also like to
highlight that in addition to the Vernal,
Utah SDP bit repair, manufacturing, and technology center,
we gained a fully operational bit repair facility in the UAE and
several hundred fit-for-purpose DNR tools on the ground in the
Middle East which gives us fuel in
the tank to serve our clients in the region. We also gained an
approximately $6.6 million receivable
from the selling party to extinguish an existing Note which will
accrue to DTI's benefit, effectively reducing the overall
transaction amount."
2024 Second Quarter Results
Total revenue was $37.5 million,
relatively flat compared to last year's second quarter. Tool Rental
net revenue was $28.3 million and
Product Sales net revenue totaled $9.2
million in the second quarter of 2024. Operating expenses
were $35.3 million, operating income
was $2.2 million and Adjusted
EBITDA(1) was $9.0 million
in the second quarter of 2024. Adjusted free cash
flow(1)(2) significantly improved by $3.2 million from ($4.3)
million in last year's second quarter to ($1.1) million in this year's quarter.
"Turning to our 2024 second quarter operational results, the
U.S. rig count experienced continued softness that led to a decline
in the quarter compared to our flat rig count outlook earlier this
year. In response, we have implemented a cost reduction program for
an annualized savings of $2.4
million. We will continue to appropriately scale our
operations to adjust for the activity levels in North America but will continue with our
growth initiatives in other markets where growth opportunities are
available. Additionally, we were able to manage capital
expenditures and improve our Adjusted Free Cash Flow by
$3.2 million over last year's second
quarter. Because of this unique lever at our disposal to generate
returns despite a decline in North American land activity, we are
maintaining our Adjusted Free Cash Flow guidance range of
$20 million - $25 million for the full year," concluded
Prejean.
Updated 2024 Full Year Outlook
Revenue
|
$155
million
|
-
|
$170
million
|
Adjusted Net
Income(1)
|
$9.9
million
|
-
|
$13.5
million
|
Adjusted
EBITDA(1)
|
$41
million
|
-
|
$47
million
|
Adjusted EBITDA
Margin(1)
|
26 %
|
-
|
28 %
|
Adjusted Free Cash
Flow(1)(2)
|
$20
million
|
-
|
$25
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.
|
Conference Call Information
DTI will hold a conference call today to discuss the SDP
acquisition and second quarter results, which can be accessed live
via dial-in or webcast on Tuesday, August 6,
2024 at 9:00 a.m. Eastern Time (8:00 a.m. Central Time). Please dial
1-862-298-0702 and ask for the DTI call at least 10 minutes prior
to the start time, or listen to the live webcast by logging onto:
https://investors.drillingtools.com/news-events/events. An
audio replay will be available through August 13th
by dialing 1-201-612-7415 and using passcode 13748086#. 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 10
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 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; (10) 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; (17) the ability of DTI to
realize the benefits of the acquisition of SDPI; and (18) 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 DTI's
annual report on Form 10-K filed March 29,
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 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 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.
Drilling Tools
International Corp.
|
Consolidated
Statement of Operations and Comprehensive Income
|
(In thousands of
U.S. dollars and rounded)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2024
|
|
2023
|
|
2024
|
|
2023
|
Revenue,
net:
|
|
|
|
|
|
|
|
|
Tool rental
|
|
$
28,328
|
|
$
29,002
|
|
$
58,294
|
|
$
61,278
|
Product sale
|
|
9,205
|
|
8,906
|
|
16,213
|
|
17,429
|
Total revenue,
net
|
|
37,533
|
|
37,908
|
|
74,507
|
|
78,707
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
Cost of tool rental
revenue
|
|
7,454
|
|
7,692
|
|
14,455
|
|
15,829
|
Cost of product sale
revenue
|
|
2,544
|
|
1,157
|
|
4,080
|
|
2,460
|
Selling, general, and
administrative expense
|
|
19,619
|
|
17,718
|
|
37,560
|
|
34,447
|
Depreciation and
amortization expense
|
|
5,681
|
|
4,717
|
|
11,047
|
|
9,732
|
Total operating
costs and expenses
|
|
35,298
|
|
31,284
|
|
67,142
|
|
62,468
|
Income (loss) from
operations
|
|
2,235
|
|
6,624
|
|
7,365
|
|
16,239
|
Other expense,
net:
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
(811)
|
|
(348)
|
|
(992)
|
|
(922)
|
Gain (loss) on sale of
property
|
|
51
|
|
(1)
|
|
42
|
|
68
|
Unrealized gain on
equity securities
|
|
480
|
|
420
|
|
729
|
|
387
|
Other income (expense),
net
|
|
(1,672)
|
|
(4,382)
|
|
(2,798)
|
|
(6,035)
|
Total other expense,
net
|
|
(1,952)
|
|
(4,311)
|
|
(3,019)
|
|
(6,502)
|
Income before income
tax expense
|
|
283
|
|
2,313
|
|
4,346
|
|
9,737
|
Income tax
(expense)/benefit
|
|
82
|
|
(1,376)
|
|
(854)
|
|
(3,099)
|
Net
income
|
|
$
365
|
|
$
937
|
|
$
3,492
|
|
$
6,638
|
Accumulated dividends
on redeemable convertible preferred stock
|
|
—
|
|
—
|
|
—
|
|
314
|
Net income available to
common shareholders
|
|
$
365
|
|
$
937
|
|
$
3,492
|
|
$
6,324
|
Basic earnings per
share
|
|
$
0.01
|
|
$
0.07
|
|
$
0.12
|
|
$
0.49
|
Diluted earnings per
share
|
|
$
0.01
|
|
$
0.05
|
|
$
0.12
|
|
$
0.33
|
Basic weighted-average
common shares outstanding*
|
|
29,816,202
|
|
13,910,670
|
|
29,792,385
|
|
12,936,310
|
Diluted
weighted-average common shares outstanding*
|
|
30,873,436
|
|
20,746,976
|
|
30,321,002
|
|
20,217,648
|
Comprehensive
income:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
365
|
|
$
937
|
|
$
3,492
|
|
$
6,638
|
Foreign currency
translation adjustment, net of tax
|
|
102
|
|
(207)
|
|
(408)
|
|
(207)
|
Net comprehensive
income
|
|
$
467
|
|
$
730
|
|
$
3,084
|
|
$
6,431
|
|
|
|
|
|
|
|
|
|
* 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)
|
|
|
|
|
|
|
|
June
30,
|
|
December 31,
|
|
|
2024
|
|
2023
|
ASSETS
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash
|
|
$
6,784
|
|
$
6,003
|
Accounts receivable,
net
|
|
35,122
|
|
29,929
|
Inventories,
net
|
|
14,609
|
|
5,034
|
Prepaid expenses and
other current assets
|
|
2,702
|
|
4,553
|
Investments - equity
securities, at fair value
|
|
1,617
|
|
888
|
Total current
assets
|
|
60,834
|
|
46,408
|
Property, plant and
equipment, net
|
|
71,223
|
|
65,800
|
Operating lease
right-of-use asset
|
|
21,827
|
|
18,786
|
Goodwill
|
|
7,962
|
|
—
|
Intangible assets,
net
|
|
3,076
|
|
216
|
Deferred financing
costs, net
|
|
991
|
|
409
|
Deposits and other
long-term assets
|
|
961
|
|
879
|
Total
assets
|
|
$
166,874
|
|
$
132,498
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts
payable
|
|
$
14,014
|
|
$
7,751
|
Accrued expenses and
other current liabilities
|
|
7,719
|
|
10,579
|
Current portion of
operating lease liabilities
|
|
4,133
|
|
3,958
|
Current maturities of
long-term debt
|
|
5,000
|
|
—
|
Total current
liabilities
|
|
30,866
|
|
22,288
|
Operating lease
liabilities, less current portion
|
|
17,814
|
|
14,893
|
Long-term
debt
|
|
19,167
|
|
—
|
Deferred tax
liabilities, net
|
|
6,227
|
|
6,627
|
Total
liabilities
|
|
74,074
|
|
43,808
|
Commitments and
contingencies
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
Common stock, $0.0001
par value, shares authorized 500,000,000 as of June 30, 2024 and
December
31, 2023, 29,859,564 shares issued and outstanding as of June 30,
2024 and 29,768,568 shares issued
and outstanding as of December 31, 2023
|
|
3
|
|
3
|
Additional
paid-in-capital
|
|
96,536
|
|
95,218
|
Accumulated
deficit
|
|
(3,105)
|
|
(6,306)
|
Accumulated other
comprehensive loss
|
|
(634)
|
|
(225)
|
Total shareholders'
equity
|
|
92,800
|
|
88,690
|
Total liabilities
and shareholders' equity
|
|
$
166,874
|
|
$
132,498
|
Drilling Tools
International Corp.
|
Consolidated
Statement of Cash Flows
|
(In thousands of
U.S. dollars and rounded)
|
(Unaudited)
|
|
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
|
2024
|
|
2023
|
Cash flows from
operating activities:
|
|
|
|
|
Net income
|
|
$
3,492
|
|
$
6,638
|
Adjustments to
reconcile net income to net cash from operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
11,047
|
|
9,732
|
Amortization of
deferred financing costs
|
|
139
|
|
37
|
Non-cash lease
expense
|
|
2,315
|
|
2,275
|
Provision for excess
and obsolete inventory
|
|
—
|
|
19
|
Provision for excess
and obsolete property and equipment
|
|
179
|
|
238
|
Provision for credit
losses
|
|
(16)
|
|
418
|
Deferred tax
expense
|
|
(400)
|
|
2,008
|
Gain on sale of
property
|
|
(51)
|
|
(68)
|
Loss on asset
disposal
|
|
9
|
|
—
|
Unrealized loss on
interest rate swap
|
|
—
|
|
91
|
Unrealized gain on
equity securities
|
|
(729)
|
|
(387)
|
Gross profit from sale
of lost-in-hole equipment
|
|
(4,987)
|
|
(9,146)
|
Stock-based
compensation expense
|
|
1,064
|
|
3,986
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Accounts receivable,
net
|
|
(1,449)
|
|
(1,777)
|
Prepaid expenses and
other current assets
|
|
1,958
|
|
(1,531)
|
Inventories,
net
|
|
(49)
|
|
1,409
|
Operating lease
liabilities
|
|
(2,226)
|
|
(2,179)
|
Accounts
payable
|
|
(2,158)
|
|
1,982
|
Accrued expenses and
other current liabilities
|
|
(3,745)
|
|
316
|
Net cash flows from
operating activities
|
|
4,391
|
|
14,061
|
Cash flows from
investing activities:
|
|
|
|
|
Acquisition of a
business, net of cash aquired
|
|
(18,261)
|
|
—
|
Proceeds from sale of
property and equipment
|
|
59
|
|
126
|
Purchase of property,
plant and equipment
|
|
(16,312)
|
|
(24,617)
|
Proceeds from sale of
lost-in-hole equipment
|
|
7,786
|
|
11,103
|
Net cash from
investing activities
|
|
(26,728)
|
|
(13,388)
|
Cash flows from
financing activities:
|
|
|
|
|
Proceeds from Merger
and PIPE Financing, net of transaction costs
|
|
—
|
|
23,162
|
Payment of deferred
financing costs
|
|
(672)
|
|
(281)
|
Proceeds from revolving
line of credit
|
|
1,469
|
|
71,646
|
Payments on revolving
line of credit
|
|
(1,469)
|
|
(89,995)
|
Proceeds from Term
Loan
|
|
25,000
|
|
—
|
Repayment of Term
Loan
|
|
(833)
|
|
—
|
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
|
|
23,495
|
|
4,338
|
Effect of Changes in
Foreign Exchange Rate
|
|
(377)
|
|
(207)
|
Net Change in
Cash
|
|
781
|
|
4,804
|
Cash at Beginning of
Period
|
|
6,003
|
|
2,352
|
Cash at End of
Period
|
|
$
6,784
|
|
$
7,156
|
Supplemental cash
flow information:
|
|
|
|
|
Cash paid for
interest
|
|
$
660
|
|
$
851
|
Cash paid for income
taxes
|
|
$
256
|
|
$
2,139
|
Non-cash investing
and financing activities:
|
|
|
|
|
Fair value of CTG
liabilities assumed in CTG Acquisition
|
|
$
3,162
|
|
$
—
|
ROU assets obtained in
exchange for operating lease liabilities
|
|
$
5,054
|
|
$
2,635
|
Net exercise of stock
options
|
|
$
255
|
|
$
—
|
Shares withheld from
exercise of stock options for payment of taxes
|
|
$
35
|
|
$
—
|
Purchases of inventory
included in accounts payable and accrued expenses and other
current
liabilities
|
|
$
5,082
|
|
$
4,076
|
Purchases of property
and equipment included in accounts payable and accrued expenses and
other
current liabilities
|
|
$
1,402
|
|
$
7,640
|
Deferred financing fees
included in accounts payable
|
|
$
49
|
|
$
2
|
Non-cash directors and
officers insurance
|
|
$
—
|
|
$
1,472
|
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
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).
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 and (iv) 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
June 30,
|
|
|
2024
|
|
2023
|
Net income
(loss)
|
|
$
365
|
|
$
937
|
Add
(deduct):
|
|
|
|
|
Income tax
(expense)/benefit
|
|
(82)
|
|
1,376
|
Depreciation and
amortization
|
|
5,681
|
|
4,717
|
Interest expense,
net
|
|
811
|
|
348
|
Stock option
expense
|
|
855
|
|
1,661
|
Management
fees
|
|
187
|
|
262
|
Loss (gain) on sale of
property
|
|
(51)
|
|
1
|
Unrealized (gain) loss
on equity securities
|
|
(480)
|
|
(420)
|
Transaction
expense
|
|
2,020
|
|
4,142
|
Other expense,
net
|
|
(340)
|
|
241
|
Adjusted
EBITDA
|
|
$
8,965
|
|
$
13,265
|
|
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
|
2024
|
|
2023
|
Net income
(loss)
|
|
$
3,492
|
|
$
6,638
|
Add
(deduct):
|
|
|
|
|
Income tax
(expense)/benefit
|
|
854
|
|
3,099
|
Depreciation and
amortization
|
|
11,047
|
|
9,732
|
Interest expense,
net
|
|
992
|
|
922
|
Stock option
expense
|
|
1,064
|
|
1,661
|
Management
fees
|
|
375
|
|
478
|
Loss (gain) on sale of
property
|
|
(42)
|
|
(68)
|
Unrealized (gain) loss
on equity securities
|
|
(729)
|
|
(387)
|
Transaction
expense
|
|
2,909
|
|
5,838
|
Other expense,
net
|
|
(104)
|
|
197
|
Adjusted
EBITDA
|
|
$
19,858
|
|
$
28,110
|
|
|
|
|
|
Drilling Tools
International Corp.
|
Reconciliation of
GAAP to Non-GAAP Measures (Unaudited)
|
(In thousands of
U.S. dollars and rounded)
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
|
2024
|
|
2023
|
Net income
(loss)
|
|
$
365
|
|
$
937
|
Add
(deduct):
|
|
|
|
|
Income tax
(expense)/benefit
|
|
(82)
|
|
1,376
|
Depreciation and
amortization
|
|
5,681
|
|
4,717
|
Interest expense,
net
|
|
811
|
|
348
|
Stock option
expense
|
|
855
|
|
1,661
|
Management
fees
|
|
187
|
|
262
|
Loss (gain) on sale of
property
|
|
(51)
|
|
1
|
Unrealized (gain) loss
on equity securities
|
|
(480)
|
|
(420)
|
Transaction
expense
|
|
2,020
|
|
4,142
|
Other expense,
net
|
|
(340)
|
|
241
|
Gross capital
expenditures
|
|
(10,084)
|
|
(17,550)
|
Adjusted Free Cash
Flow
|
|
$
(1,119)
|
|
$
(4,285)
|
|
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
|
2024
|
|
2023
|
Net income
(loss)
|
|
$
3,492
|
|
$
6,638
|
Add
(deduct):
|
|
|
|
|
Income tax
(expense)/benefit
|
|
854
|
|
3,099
|
Depreciation and
amortization
|
|
11,047
|
|
9,732
|
Interest expense,
net
|
|
992
|
|
922
|
Stock option
expense
|
|
1,064
|
|
1,661
|
Management
fees
|
|
375
|
|
478
|
Loss (gain) on sale of
property
|
|
(42)
|
|
(68)
|
Unrealized (gain) loss
on equity securities
|
|
(729)
|
|
(387)
|
Transaction
expense
|
|
2,909
|
|
5,838
|
Other expense,
net
|
|
(104)
|
|
197
|
Gross capital
expenditures
|
|
(16,312)
|
|
(24,617)
|
Adjusted Free Cash
Flow
|
|
$
3,545
|
|
$
3,493
|
|
|
|
|
|
Drilling Tools
International Corp.
|
Reconciliation of
GAAP to Non-GAAP Measures (Unaudited)
|
(In thousands of
U.S. dollars and rounded)
|
|
|
|
Three Months Ended
June 30,
|
|
|
2024
|
|
2023
|
Net income
(loss)
|
|
$
365
|
|
$
937
|
Transaction
expense
|
|
2,020
|
|
4,142
|
Income tax
expense
|
|
(82)
|
|
1,376
|
Adjusted Income Before
Tax
|
|
$
2,303
|
|
$
6,455
|
Adjusted Income tax
expense
|
|
(668)
|
|
3,840
|
Adjusted Net
Income
|
|
$
2,970
|
|
$
2,615
|
Accumulated dividends
on redeemable convertible preferred stock
|
|
—
|
|
—
|
Adjusted Net income
available to common shareholders
|
|
$
2,970
|
|
$
2,615
|
Adjusted Basic
earnings per share
|
|
0.10
|
|
0.19
|
Adjusted Diluted
earnings per share
|
|
0.10
|
|
0.13
|
Basic weighted-average
common shares outstanding*
|
|
29,816,202
|
|
13,910,670
|
Basic weighted-average
common shares outstanding*
|
|
30,873,436
|
|
20,746,976
|
|
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
|
2024
|
|
2023
|
Net income
(loss)
|
|
$
3,492
|
|
$
6,638
|
Transaction
expense
|
|
2,909
|
|
5,838
|
Income tax
expense
|
|
854
|
|
3,099
|
Adjusted Income Before
Tax
|
|
$
7,255
|
|
$
15,575
|
Adjusted Income tax
expense
|
|
1,426
|
|
4,957
|
Adjusted Net
Income
|
|
$
5,829
|
|
$
10,618
|
Accumulated dividends
on redeemable convertible preferred stock
|
|
—
|
|
314
|
Adjusted Net income
available to common shareholders
|
|
$
5,829
|
|
$
10,304
|
Adjusted Basic earnings
per share
|
|
0.20
|
|
0.80
|
Adjusted Diluted
earnings per share
|
|
0.19
|
|
0.53
|
Basic weighted-average
common shares outstanding*
|
|
29,792,385
|
|
12,936,310
|
Basic weighted-average
common shares outstanding*
|
|
30,321,002
|
|
20,217,648
|
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
|
|
|
$
7,000
|
|
$
10,000
|
Add (deduct)
|
|
|
|
|
|
Interest expense,
net
|
|
|
2,500
|
|
2,700
|
Income tax
expense
|
|
|
2,500
|
|
2,800
|
Depreciation and
amortization
|
|
22,500
|
|
23,500
|
Management
fees
|
|
|
600
|
|
900
|
Other
expense
|
|
|
(500)
|
|
-
|
Stock option
expense
|
|
|
2,400
|
|
2,600
|
Transaction
expense
|
|
|
4,000
|
|
4,500
|
Adjusted
EBITDA
|
|
|
$
41,000
|
|
$
47,000
|
Revenue
|
|
|
155,000
|
|
170,000
|
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
|
|
|
$
7,000
|
|
$
10,000
|
Add (deduct)
|
|
|
|
|
|
Interest expense,
net
|
|
|
2,500
|
|
2,700
|
Income tax
expense
|
|
|
2,500
|
|
2,800
|
Depreciation and
amortization
|
|
22,500
|
|
23,500
|
Management
fees
|
|
|
600
|
|
900
|
Other
expense
|
|
|
(500)
|
|
-
|
Stock option
expense
|
|
|
2,400
|
|
2,600
|
Transaction
expense
|
|
|
4,000
|
|
4,500
|
Gross capital
expenditures
|
|
|
(21,000)
|
|
(22,000)
|
Adjusted Free Cash
Flow
|
|
|
$
20,000
|
|
$
25,000
|
|
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)
|
|
|
$
7,000
|
|
$
10,000
|
Transaction
expense
|
|
|
$
4,000
|
|
$
4,500
|
Income tax
expense
|
|
|
2,500
|
|
2,800
|
Adjusted Income
Before Tax
|
|
|
$
13,500
|
|
$
17,300
|
Adjusted Income tax
expense
|
|
3,600
|
|
3,800
|
Adjusted Net
Income
|
|
|
$
9,900
|
|
$
13,500
|
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SOURCE Drilling Tools International Corp.