Drilling Tools International Corp. Reports 2024 Year End and Fourth Quarter Results
Drilling Tools International Corp. (NASDAQ: DTI) has reported its financial results for 2024, with total consolidated revenue of $154.4 million. The company's Tool Rental revenue reached $117.9 million, while Product Sales revenue was $36.5 million.
Key financial metrics for 2024 include:
- Income from Operations: $13.4 million
- Net Income: $3.0 million
- Adjusted Net Income: $10.1 million
- Diluted EPS: $0.09
- Adjusted EBITDA: $40.1 million
- Adjusted Free Cash Flow: $17.2 million
In Q4 2024, DTI generated total revenue of $39.8 million but recorded a net loss of $1.3 million. The company maintains $6.2 million in cash and cash equivalents, with net debt of $47.6 million. Despite challenging market conditions, DTI expects significant international revenue growth in 2025, supported by recent acquisitions including Superior Drilling Products, Deep Casing Tools, European Drilling Projects, and Titan Tools Services.
Drilling Tools International Corp. (NASDAQ: DTI) ha riportato i risultati finanziari per il 2024, con un fatturato consolidato totale di 154,4 milioni di dollari. I ricavi da noleggio attrezzature dell'azienda hanno raggiunto 117,9 milioni di dollari, mentre i ricavi dalle vendite di prodotti sono stati di 36,5 milioni di dollari.
I principali indicatori finanziari per il 2024 includono:
- Reddito operativo: 13,4 milioni di dollari
- Utile netto: 3,0 milioni di dollari
- Utile netto rettificato: 10,1 milioni di dollari
- EPS diluito: 0,09 dollari
- EBITDA rettificato: 40,1 milioni di dollari
- Flusso di cassa libero rettificato: 17,2 milioni di dollari
Nel quarto trimestre del 2024, DTI ha generato un fatturato totale di 39,8 milioni di dollari, ma ha registrato una perdita netta di 1,3 milioni di dollari. L'azienda mantiene 6,2 milioni di dollari in contante e equivalenti, con un debito netto di 47,6 milioni di dollari. Nonostante le condizioni di mercato sfavorevoli, DTI prevede una significativa crescita dei ricavi internazionali nel 2025, supportata da recenti acquisizioni tra cui Superior Drilling Products, Deep Casing Tools, European Drilling Projects e Titan Tools Services.
Drilling Tools International Corp. (NASDAQ: DTI) ha informado sus resultados financieros para 2024, con un ingreso consolidado total de 154,4 millones de dólares. Los ingresos por alquiler de herramientas de la compañía alcanzaron los 117,9 millones de dólares, mientras que los ingresos por ventas de productos fueron de 36,5 millones de dólares.
Los principales indicadores financieros para 2024 incluyen:
- Ingresos de operaciones: 13,4 millones de dólares
- Ingreso neto: 3,0 millones de dólares
- Ingreso neto ajustado: 10,1 millones de dólares
- EPS diluido: 0,09 dólares
- EBITDA ajustado: 40,1 millones de dólares
- Flujo de caja libre ajustado: 17,2 millones de dólares
En el cuarto trimestre de 2024, DTI generó un ingreso total de 39,8 millones de dólares, pero registró una pérdida neta de 1,3 millones de dólares. La compañía mantiene 6,2 millones de dólares en efectivo y equivalentes, con una deuda neta de 47,6 millones de dólares. A pesar de las difíciles condiciones del mercado, DTI espera un crecimiento significativo en los ingresos internacionales en 2025, respaldado por adquisiciones recientes que incluyen Superior Drilling Products, Deep Casing Tools, European Drilling Projects y Titan Tools Services.
Drilling Tools International Corp. (NASDAQ: DTI)는 2024년 재무 결과를 보고했으며, 총 통합 수익은 1억 5440만 달러입니다. 회사의 도구 대여 수익은 1억 1790만 달러에 이르렀고, 제품 판매 수익은 3650만 달러였습니다.
2024년 주요 재무 지표는 다음과 같습니다:
- 운영 소득: 1340만 달러
- 순이익: 300만 달러
- 조정된 순이익: 1010만 달러
- 희석 주당 순이익(EPS): 0.09 달러
- 조정된 EBITDA: 4010만 달러
- 조정된 자유 현금 흐름: 1720만 달러
2024년 4분기 동안 DTI는 총 수익 3980만 달러를 창출했지만, 130만 달러의 순손실을 기록했습니다. 회사는 620만 달러의 현금 및 현금성 자산을 보유하고 있으며, 순부채는 4760만 달러입니다. 어려운 시장 상황에도 불구하고 DTI는 2025년에 상당한 국제 수익 성장을 예상하고 있으며, 이는 최근 인수한 Superior Drilling Products, Deep Casing Tools, European Drilling Projects 및 Titan Tools Services에 의해 지원됩니다.
Drilling Tools International Corp. (NASDAQ: DTI) a annoncé ses résultats financiers pour 2024, avec un chiffre d'affaires consolidé total de 154,4 millions de dollars. Les revenus de la location d'outils de l'entreprise ont atteint 117,9 millions de dollars, tandis que les revenus des ventes de produits s'élevaient à 36,5 millions de dollars.
Les principaux indicateurs financiers pour 2024 incluent :
- Revenu d'exploitation : 13,4 millions de dollars
- Revenu net : 3,0 millions de dollars
- Revenu net ajusté : 10,1 millions de dollars
- BPA dilué : 0,09 dollar
- EBITDA ajusté : 40,1 millions de dollars
- Flux de trésorerie libre ajusté : 17,2 millions de dollars
Au quatrième trimestre 2024, DTI a généré un chiffre d'affaires total de 39,8 millions de dollars mais a enregistré une perte nette de 1,3 million de dollars. L'entreprise maintient 6,2 millions de dollars en liquidités et équivalents, avec une dette nette de 47,6 millions de dollars. Malgré des conditions de marché difficiles, DTI prévoit une croissance significative de ses revenus internationaux en 2025, soutenue par des acquisitions récentes, notamment Superior Drilling Products, Deep Casing Tools, European Drilling Projects et Titan Tools Services.
Drilling Tools International Corp. (NASDAQ: DTI) hat seine finanziellen Ergebnisse für 2024 bekannt gegeben, mit einem konsolidierten Gesamtumsatz von 154,4 Millionen US-Dollar. Der Umsatz aus Werkzeugvermietungen erreichte 117,9 Millionen US-Dollar, während der Umsatz aus Produktverkäufen 36,5 Millionen US-Dollar betrug.
Die wichtigsten Finanzkennzahlen für 2024 umfassen:
- Operativer Gewinn: 13,4 Millionen US-Dollar
- Nettoergebnis: 3,0 Millionen US-Dollar
- Bereinigtes Nettoergebnis: 10,1 Millionen US-Dollar
- Verdünnter Gewinn pro Aktie (EPS): 0,09 US-Dollar
- Bereinigtes EBITDA: 40,1 Millionen US-Dollar
- Bereinigter freier Cashflow: 17,2 Millionen US-Dollar
Im vierten Quartal 2024 erzielte DTI einen Gesamtumsatz von 39,8 Millionen US-Dollar, verzeichnete jedoch einen Nettoverlust von 1,3 Millionen US-Dollar. Das Unternehmen hält 6,2 Millionen US-Dollar in bar und liquiden Mitteln, mit einer Nettoverschuldung von 47,6 Millionen US-Dollar. Trotz herausfordernder Marktbedingungen erwartet DTI ein signifikantes internationales Umsatzwachstum im Jahr 2025, unterstützt durch kürzliche Übernahmen, darunter Superior Drilling Products, Deep Casing Tools, European Drilling Projects und Titan Tools Services.
- Strong Tool Rental revenue of $117.9 million in 2024
- Positive Adjusted EBITDA of $40.1 million for 2024
- Generated $17.2 million in Adjusted Free Cash Flow
- Strategic acquisitions completed to enhance global presence
- Expects significant international revenue growth in 2025
- Q4 2024 net loss of $1.3 million
- Substantial net debt position of $47.6 million
- Low cash position of $6.2 million
- Challenging demand environment reported
- Industry forecasts suggest flat market conditions for 2025
Insights
DTI delivered $154.4 million in total revenue for 2024, generating $40.1 million in Adjusted EBITDA and $17.2 million in Adjusted Free Cash Flow. Despite challenges in Q4 which resulted in a net loss of $1.3 million, the company maintained operational profitability with Q4 Income from Operations at $1.8 million and Adjusted EBITDA of $9.1 million.
The company's financial structure shows a debt-to-EBITDA ratio of approximately 1.3x based on the $47.6 million net debt position against full-year Adjusted EBITDA, representing a manageable leverage profile that allows flexibility for the acquisition strategy they're pursuing. The cash conversion cycle appears efficient with Adjusted Free Cash Flow representing 43% of Adjusted EBITDA for the year.
DTI's business model demonstrates resilience with rental tools comprising 76% of total revenue, providing more stable margins compared to product sales. The company has executed an aggressive acquisition growth strategy in 2024, integrating four companies including Superior Drilling Products and Deep Casing Tools to enhance vertical integration capabilities.
Management's guidance for 2025 signals continued growth despite acknowledging industry headwinds and forecasts for a flat market environment. Their focus on international expansion represents a strategic diversification from potential domestic market challenges. The balance of organic growth with strategic acquisitions at "attractive multiples" suggests disciplined capital allocation focused on long-term positioning for the anticipated industry growth cycle in the coming 3-5 years.
DTI's performance reflects the broader oilfield services sector dynamics – maintaining operational efficiency while navigating volatile demand. Their strategic pivot toward international markets for 2025 growth is particularly significant as global energy infrastructure development continues while North American drilling activity potentially plateaus.
The company's vertical integration strategy around specific product lines demonstrates an astute response to service sector consolidation trends. By acquiring complementary technologies across the well lifecycle, DTI is positioning to capture more value per wellbore rather than competing solely on rental rates in an oversupplied tool market.
The emphasis on technology acquisition through companies like Deep Casing Tools indicates DTI is evolving beyond conventional rental tools toward higher-margin, specialized solutions. This transition aligns with operator demands for technologies that reduce drilling time and costs – critical in a period where capital discipline dominates E&P budgeting.
Management's reference to a "challenging demand environment" but expectation for growth suggests they're capturing market share or expanding service scope with existing customers. The implied flat North American activity but growing international presence mirrors broader industry expectations where international E&P spending is projected to outpace North American budgets.
DTI's business mix skewing toward rental tools (76% of revenue) rather than outright sales provides recurring revenue stability and higher margins, though at the cost of capital intensity as they must continually invest in fleet maintenance and expansion. Their acquisition strategy appears designed to enhance technology differentiation, geographic reach, and utilization rates – all critical success factors in the increasingly competitive oilfield services landscape.
Expects Continued Growth in 2025 Consolidated Revenue, Adjusted EBITDA and Adjusted Free Cash Flow
International Revenue Projected to Grow Significantly in 2025
For the twelve months of 2024, DTI generated total consolidated revenue of
For the fourth quarter of 2024, DTI generated total consolidated revenue of
Wayne Prejean, Chief Executive Officer of DTI, stated, "I am pleased with the strong execution by our teams in the fourth quarter despite a challenging demand environment. The results of our acquisition growth strategy over the past twelve months have been particularly impressive given these industry headwinds. We are actively vertically integrating around specific products and are positioning ourselves globally for future growth. Although industry forecasts suggest a flat market environment this year, we anticipate building upon our 2024 results and activities and expect to significantly grow our international revenue in 2025."
Prejean added, "We believe acquiring value enhancing companies like Superior Drilling Products, Deep Casing Tools, European Drilling Projects and Titan Tools Services at attractive multiples, coupled with our differentiated organic growth strategy, positions DTI to successfully participate in the expected industry growth cycle over the next three to five years. We continue to analyze additional promising acquisition targets to gain further scale, talented personnel, innovative technologies and geographic expansion. We believe elevated demand should further strengthen the global need for our leading products, technological solutions and superior services."
2025 Full Year Outlook
Revenue | — | |||||||
Adjusted EBITDA(1) | — | |||||||
Adjusted EBITDA Margin(1) | 25 % | — | 27 % | |||||
Adjusted Free Cash Flow(1)(2) | — |
(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 |
(2) | Adjusted Free Cash Flow defined as Adjusted EBITDA less Gross Capital Expenditures. |
2024 Year End and Fourth Quarter Conference Call Information
DTI's 2024 year end and fourth quarter conference call can be accessed live via dial-in or webcast on Friday, March 14, 2025 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 March 21, 2025 by dialing 201-612-7415 and using passcode 13751110#. 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
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.
Drilling Tools International Corp. Consolidated Statement of Operations and Comprehensive Income (Unaudited) (In thousands of | ||||||||
Year Ended December 31, | ||||||||
2024 | 2023 | |||||||
Revenue, net: | ||||||||
Tool rental | $ | 117,926 | $ | 119,239 | ||||
Product sale | 36,520 | 32,795 | ||||||
Total revenue, net | 154,446 | 152,034 | ||||||
Operating costs and expenses: | ||||||||
Cost of tool rental revenue | 24,110 | 28,270 | ||||||
Cost of product sale revenue | 14,381 | 7,249 | ||||||
Selling, general, and administrative expense | 78,695 | 68,264 | ||||||
Depreciation and amortization expense | 23,832 | 20,352 | ||||||
Total operating costs and expenses | 141,018 | 124,135 | ||||||
Income from operations | 13,428 | 27,899 | ||||||
Other expense, net: | ||||||||
Interest expense, net | (3,369) | (1,103) | ||||||
Gain on sale of property | 60 | 101 | ||||||
Loss on asset disposal | — | (489) | ||||||
Gain (loss) on remeasurement of previously held equity interest | 368 | (255) | ||||||
Other income (expense), net | (7,503) | (6,359) | ||||||
Total other expense, net | (10,444) | (8,105) | ||||||
Income before income tax expense | 2,984 | 19,794 | ||||||
Income tax (expense)/benefit | 30 | (5,046) | ||||||
Net income | $ | 3,014 | $ | 14,748 | ||||
Accumulated dividends on redeemable convertible preferred stock | — | 314 | ||||||
Net income available to common shareholders | $ | 3,014 | $ | 14,434 | ||||
Basic earnings per share | $ | 0.09 | $ | 0.67 | ||||
Diluted earnings per share | $ | 0.09 | $ | 0.59 | ||||
Basic weighted-average common shares outstanding | 31,938,847 | 21,421,610 | ||||||
Diluted weighted-average common shares outstanding | 32,308,179 | 25,131,024 | ||||||
Comprehensive income: | ||||||||
Net income | $ | 3,014 | $ | 14,748 | ||||
Foreign currency translation adjustment, net of tax | (1,652) | (114) | ||||||
Net comprehensive income | $ | 1,362 | $ | 14,634 | ||||
Drilling Tools International Corp. Consolidated Statement of Operations and Comprehensive Income (Unaudited) (In thousands of | ||||||||
Three months ended December 31, | ||||||||
2024 | 2023 | |||||||
Revenue, net: | ||||||||
Tool rental | $ | 31,516 | $ | 28,600 | ||||
Product sale | 8,330 | 6,589 | ||||||
Total revenue, net | 39,846 | 35,189 | ||||||
Operating costs and expenses: | ||||||||
Cost of tool rental revenue | 6,552 | 6,692 | ||||||
Cost of product sale revenue | 3,602 | 1,387 | ||||||
Selling, general, and administrative expense | 21,280 | 17,265 | ||||||
Depreciation and amortization expense | 6,600 | 5,317 | ||||||
Total operating costs and expenses | 38,034 | 30,661 | ||||||
Income from operations | 1,812 | 4,528 | ||||||
Other expense, net: | ||||||||
Interest expense, net | (1,339) | (108) | ||||||
Gain on sale of property | (1) | 33 | ||||||
Loss on asset disposal | — | (489) | ||||||
Gain (loss) on remeasurement of previously held equity interest | — | (107) | ||||||
Other income (expense), net | (2,262) | (189) | ||||||
Total other expense, net | (3,602) | (860) | ||||||
Income before income tax expense | (1,790) | 3,668 | ||||||
Income tax (expense)/benefit | 445 | 155 | ||||||
Net income | $ | (1,345) | $ | 3,823 | ||||
Accumulated dividends on redeemable convertible preferred stock | — | — | ||||||
Net income available to common shareholders | $ | (1,345) | $ | 3,823 | ||||
Basic earnings per share | $ | (0.04) | $ | 0.13 | ||||
Diluted earnings per share | $ | (0.04) | $ | 0.13 | ||||
Basic weighted-average common shares outstanding | 34,704,696 | 29,768,568 | ||||||
Diluted weighted-average common shares outstanding | 34,704,696 | 29,768,568 | ||||||
Comprehensive income: | ||||||||
Net income | $ | (1,345) | $ | 3,823 | ||||
Foreign currency translation adjustment, net of tax | (2,405) | 3 | ||||||
Net comprehensive income | $ | (3,750) | $ | 3,826 | ||||
Drilling Tools International Corp. Consolidated Balance Sheets (Unaudited) (In thousands of | ||||||||
December 31, | December 31, | |||||||
2024 | 2023 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash | $ | 6,185 | $ | 6,003 | ||||
Accounts receivable, net | 39,606 | 29,929 | ||||||
Related party note receivable, current | 909 | — | ||||||
Inventories, net | 17,502 | 5,034 | ||||||
Prepaid expenses and other current assets | 3,874 | 4,553 | ||||||
Investments - equity securities, at fair value | — | 888 | ||||||
Total current assets | 68,076 | 46,408 | ||||||
Property, plant and equipment, net | 75,571 | 65,800 | ||||||
Operating lease right-of-use asset | 22,718 | 18,786 | ||||||
Intangible assets, net | 37,232 | 216 | ||||||
Goodwill | 12,147 | — | ||||||
Deferred financing costs, net | 817 | 409 | ||||||
Related party note receivable, less current portion | 4,262 | — | ||||||
Deposits and other long-term assets | 1,608 | 879 | ||||||
Total assets | $ | 222,431 | $ | 132,498 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 11,983 | $ | 7,751 | ||||
Accrued expenses and other current liabilities | 7,864 | 10,579 | ||||||
Current portion of operating lease liabilities | 4,121 | 3,958 | ||||||
Current maturities of long-term debt | 6,995 | — | ||||||
Total current liabilities | 30,963 | 22,288 | ||||||
Operating lease liabilities, less current portion | 18,765 | 14,893 | ||||||
Long term debt, net of current portion | 19,676 | — | ||||||
Revolving line of credit | 27,142 | — | ||||||
Deferred tax liabilities, net | 5,926 | 6,627 | ||||||
Total liabilities | 102,472 | 43,808 | ||||||
Commitments and contingencies | ||||||||
Shareholders' equity | ||||||||
Common stock, | 3 | 3 | ||||||
Additional paid-in-capital | 125,415 | 95,218 | ||||||
Accumulated deficit | (3,582) | (6,306) | ||||||
Accumulated other comprehensive loss | (1,877) | (225) | ||||||
Total shareholders' equity | 119,959 | 88,690 | ||||||
Total liabilities and shareholders' equity | $ | 222,431 | $ | 132,498 | ||||
Drilling Tools International Corp. Consolidated Statement of Cash Flows (Unaudited) (In thousands of | ||||||||
Year Ended December 31, | ||||||||
2024 | 2023 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 3,014 | $ | 14,748 | ||||
Adjustments to reconcile net income to net cash from operating activities: | ||||||||
Depreciation and amortization | 23,832 | 20,352 | ||||||
Amortization of deferred financing costs | 313 | 139 | ||||||
Non-cash lease expense | 5,121 | 4,515 | ||||||
Unrealized loss on currency remeasurement | 225 | — | ||||||
Provision for excess and obsolete inventory | — | 75 | ||||||
Provision for excess and obsolete property and equipment | — | 122 | ||||||
Provision for credit losses | 424 | 117 | ||||||
Deferred tax expense/(benefit) | (778) | 3,443 | ||||||
Loss on asset disposal | — | 489 | ||||||
Gain on sale of property | (60) | (101) | ||||||
Realized loss on equity securities | 12 | — | ||||||
Unrealized (gain) loss on equity securities | (368) | 255 | ||||||
Realized loss on interest rate swap | — | 4 | ||||||
Gross profit from sale of lost-in-hole equipment | (10,027) | (16,686) | ||||||
Stock-based compensation expense | 2,092 | 3,986 | ||||||
Interest Income on related party note receivable | (151) | |||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable, net | (4,015) | (1,048) | ||||||
Prepaid expenses and other current assets | 874 | 519 | ||||||
Inventories, net | (4,320) | (1,716) | ||||||
Deposits and other current assets | — | (496) | ||||||
Operating lease liabilities | (4,832) | (4,415) | ||||||
Accounts payable | (78) | (1,552) | ||||||
Accrued expenses and other current liabilities | (5,220) | 583 | ||||||
Net cash flows from operating activities | 6,058 | 23,334 | ||||||
Cash flows from investing activities: | ||||||||
Acquisition of a business, net of cash acquired | (47,258) | — | ||||||
Proceeds from sale of property and equipment | 79 | 202 | ||||||
Purchase of property, plant and equipment | (22,892) | (43,750) | ||||||
Proceeds from sale of lost-in-hole equipment | 15,253 | 19,684 | ||||||
Proceeds from sale of equity securities | 1,244 | — | ||||||
Purchases of intangible assets | (12) | — | ||||||
Net cash flows from investing activities | (53,586) | (23,864) | ||||||
Cash flows from financing activities: | ||||||||
Proceeds from Merger and PIPE Financing, net of transaction costs | — | 23,162 | ||||||
Payment of deferred financing costs | (722) | (324) | ||||||
Proceeds from revolving line of credit | 38,618 | 73,050 | ||||||
Payments on revolving line of credit | (11,476) | (91,399) | ||||||
Proceeds from long-term debt | 25,000 | — | ||||||
Payments on long-term debt | (3,535) | — | ||||||
Payments to holders of DTIH redeemable convertible preferred stock in connection with | — | (194) | ||||||
Net cash flows from financing activities | 47,885 | 4,295 | ||||||
Effect of Changes in Foreign Exchange Rate | (175) | (114) | ||||||
Net Change in Cash | 182 | 3,651 | ||||||
Cash at Beginning of Period | 6,003 | 2,352 | ||||||
Cash at End of Period | $ | 6,185 | $ | 6,003 | ||||
Supplemental cash flow information: | ||||||||
Cash paid for interest | $ | 2,673 | $ | 1,174 | ||||
Cash paid for income taxes | $ | 2,970 | $ | 3,006 | ||||
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 | $ | — | ||||
Fair value of EDP liabilities assumed in EDP Acquisition | $ | 1,769 | $ | — | ||||
ROU assets obtained in exchange for lease liabilities | $ | 5,737 | $ | 3,264 | ||||
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 | $ | 1,176 | $ | 601 | ||||
Purchases of property and equipment included in accounts payable and accrued expenses and other | $ | 126 | $ | 1,422 | ||||
Non-cash directors and officers insurance | $ | — | $ | 695 | ||||
Non-cash Merger financing | $ | — | $ | 2,000 | ||||
Exchange of DTIH redeemable convertible preferred stock for DTIC Common Stock in connection | $ | — | $ | 7,193 | ||||
Issuance of DTIC Common Stock to former holders of DTIH redeemable convertible | $ | — | $ | 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 | ||||||||
Year Ended December 31, | ||||||||
2024 | 2023 | |||||||
Net income (loss) | $ | 3,014 | $ | 14,748 | ||||
Add (deduct): | ||||||||
Income tax expense/(benefit) | (30) | 5,046 | ||||||
Depreciation and amortization | 23,832 | 20,352 | ||||||
Interest expense, net | 3,369 | 1,103 | ||||||
Stock option expense | 2,092 | 1,661 | ||||||
Management fees | 750 | 1,130 | ||||||
Gain on sale of property | (60) | (101) | ||||||
Loss on asset disposal | — | 489 | ||||||
Loss (gain) on remeasurement of previously held equity interest | (368) | 255 | ||||||
Transaction expense | 7,036 | 5,979 | ||||||
Other expense, net | 467 | 380 | ||||||
Adjusted EBITDA | $ | 40,101 | $ | 51,042 | ||||
Three Months Ended December 31, | ||||||||
2024 | 2023 | |||||||
Net income (loss) | $ | (1,345) | $ | 3,823 | ||||
Add (deduct): | ||||||||
Income tax expense/(benefit) | (445) | (155) | ||||||
Depreciation and amortization | 6,600 | 5,317 | ||||||
Interest expense, net | 1,339 | 108 | ||||||
Stock option expense | 520 | — | ||||||
Management fees | 187 | 357 | ||||||
Gain on sale of property | 1 | (33) | ||||||
Loss on asset disposal | — | 489 | ||||||
Loss (gain) on remeasurement of previously held equity interest | — | 107 | ||||||
Transaction expense | 2,270 | 16 | ||||||
Other expense, net | (7) | 173 | ||||||
Adjusted EBITDA | $ | 9,120 | $ | 10,202 | ||||
Drilling Tools International Corp. Reconciliation of GAAP to Non-GAAP Measures (Unaudited) (In thousands of | ||||||||
Year Ended December 31, | ||||||||
2024 | 2023 | |||||||
Net income (loss) | $ | 3,014 | $ | 14,748 | ||||
Add (deduct): | ||||||||
Income tax expense/(benefit) | (30) | 5,046 | ||||||
Depreciation and amortization | 23,832 | 20,352 | ||||||
Interest expense, net | 3,369 | 1,103 | ||||||
Stock option expense | 2,092 | 1,661 | ||||||
Management fees | 750 | 1,130 | ||||||
Gain on sale of property | (60) | (101) | ||||||
Loss on asset disposal | — | 489 | ||||||
Loss (gain) on remeasurement of previously held equity interest | (368) | 255 | ||||||
Transaction expense | 7,036 | 5,979 | ||||||
Other expense, net | 467 | 380 | ||||||
Gross capital expenditures | (22,892) | (43,750) | ||||||
Adjusted Free Cash Flow | $ | 17,209 | $ | 7,292 | ||||
Three Months Ended December 31, | ||||||||
2024 | 2023 | |||||||
Net income (loss) | $ | (1,345) | $ | 3,823 | ||||
Add (deduct): | ||||||||
Income tax expense/(benefit) | (445) | (155) | ||||||
Depreciation and amortization | 6,600 | 5,317 | ||||||
Interest expense, net | 1,339 | 108 | ||||||
Stock option expense | 520 | — | ||||||
Management fees | 187 | 357 | ||||||
Gain on sale of property | 1 | (33) | ||||||
Loss on asset disposal | — | 489 | ||||||
Loss (gain) on remeasurement of previously held equity interest | — | 107 | ||||||
Transaction expense | 2,270 | 16 | ||||||
Other expense, net | (7) | 173 | ||||||
Gross capital expenditures | (3,214) | (6,974) | ||||||
Adjusted Free Cash Flow | $ | 5,906 | $ | 3,228 | ||||
Drilling Tools International Corp. Reconciliation of GAAP to Non-GAAP Measures (Unaudited) (In thousands of | ||||||||
Year Ended December 31, | ||||||||
2024 | 2023 | |||||||
Net income (loss) | $ | 3,014 | $ | 14,748 | ||||
Transaction expense | 7,036 | 5,979 | ||||||
Income tax expense/(benefit) | (30) | 5,046 | ||||||
Adjusted Income Before Tax | $ | 10,020 | $ | 25,773 | ||||
Adjusted Income tax expense | 101 | (6,570) | ||||||
Adjusted Net Income | $ | 10,121 | $ | 19,203 | ||||
Accumulated dividends on redeemable convertible preferred stock | — | 314 | ||||||
Adjusted Net income available to common shareholders | $ | 10,121 | $ | 18,889 | ||||
Adjusted Basic earnings per share | $ | 0.32 | $ | 0.88 | ||||
Adjusted Diluted earnings per share | $ | 0.31 | $ | 0.76 | ||||
Basic weighted-average common shares outstanding | 31,938,847 | 21,421,610 | ||||||
Diluted weighted-average common shares outstanding | 32,308,179 | 25,131,024 | ||||||
Three Months Ended December 31, | ||||||||
2024 | 2023 | |||||||
Net income (loss) | $ | (1,345) | $ | 3,823 | ||||
Transaction expense | 2,270 | 16 | ||||||
Income tax expense/(benefit) | (445) | (155) | ||||||
Adjusted Income Before Tax | $ | 480 | $ | 3,684 | ||||
Adjusted Income tax expense | 119 | 156 | ||||||
Adjusted Net Income | $ | 600 | $ | 3,840 | ||||
Accumulated dividends on redeemable convertible preferred stock | — | 314 | ||||||
Adjusted Net income available to common shareholders | $ | 600 | $ | 3,526 | ||||
Adjusted Basic earnings per share | $ | 0.02 | $ | 0.12 | ||||
Adjusted Diluted earnings per share | $ | 0.02 | $ | 0.13 | ||||
Basic weighted-average common shares outstanding | 34,704,696 | 29,768,568 | ||||||
Diluted weighted-average common shares outstanding | 34,704,696 | 29,768,568 | ||||||
Drilling Tools International Corp. Reconciliation of Estimated Consolidated Net Income to Adjusted EBITDA (Unaudited) (In thousands of | ||||||||
Twelve Months Ended December 31, 2025 | ||||||||
Low | High | |||||||
Net Income | $ | 2,000 | $ | 5,000 | ||||
Add (deduct) | ||||||||
Interest expense, net | 3,500 | 4,500 | ||||||
Income tax expense | 1,100 | 2,000 | ||||||
Depreciation and amortization | 28,000 | 31,000 | ||||||
Management fees | 700 | 800 | ||||||
Other expense | 300 | 700 | ||||||
Stock option expense | 4,000 | 4,500 | ||||||
Transaction expense | 400 | 1,500 | ||||||
Adjusted EBITDA | $ | 40,000 | $ | 50,000 | ||||
Revenue | 163,000 | 183,000 | ||||||
Adjusted EBITDA Margin | 25 | % | 27 | % | ||||
Drilling Tools International Corp. Reconciliation of Estimated Consolidated Net Income to Adjusted Free Cash Flow (Unaudited) (In thousands of | ||||||||
Twelve Months Ended December 31, 2025 | ||||||||
Low | High | |||||||
Net Income | $ | 2,000 | $ | 5,000 | ||||
Add (deduct) | ||||||||
Interest expense, net | 3,500 | 4,500 | ||||||
Income tax expense | 1,100 | 2,000 | ||||||
Depreciation and amortization | 28,000 | 31,000 | ||||||
Management fees | 700 | 800 | ||||||
Other expense | 300 | 700 | ||||||
Stock option expense | 4,000 | 4,500 | ||||||
Transaction expense | 400 | 1,500 | ||||||
Gross capital expenditures | (23,000) | (29,000) | ||||||
Adjusted Free Cash Flow | $ | 17,000 | $ | 21,000 | ||||
Adjusted Free Cash Flow Margin | 10 | % | 11 | % | ||||
View original content:https://www.prnewswire.com/news-releases/drilling-tools-international-corp-reports-2024-year-end-and-fourth-quarter-results-302401446.html
SOURCE Drilling Tools International Corp.
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