KLX ENERGY SERVICES HOLDINGS, INC. REPORTS FOURTH QUARTER AND FULL YEAR 2024 RESULTS
KLX Energy Services (KLXE) reported its Q4 and full-year 2024 financial results. For FY2024, the company recorded revenue of $709 million with a net loss of $(53) million and Adjusted EBITDA of $90 million.
Q4 2024 highlights include revenue of $166 million, net loss of $(15) million, and Adjusted EBITDA of $23 million with a 14% margin. The company saw a 12.4% revenue decrease compared to Q3 2024, with service breakdown showing completion services contributing 52%, drilling 22%, production 16%, and intervention 10%.
Post year-end, KLXE completed a refinancing, issuing $232.2 million in 2030 Senior Notes and warrants for 2.37 million shares. For 2025, management expects flat to slightly higher revenue with Adjusted EBITDA margins between 13-15%.
KLX Energy Services (KLXE) ha riportato i risultati finanziari del quarto trimestre e dell'intero anno 2024. Per l'anno fiscale 2024, l'azienda ha registrato ricavi di 709 milioni di dollari con una perdita netta di (53) milioni di dollari e un EBITDA rettificato di 90 milioni di dollari.
I punti salienti del Q4 2024 includono ricavi di 166 milioni di dollari, una perdita netta di (15) milioni di dollari e un EBITDA rettificato di 23 milioni di dollari con un margine del 14%. L'azienda ha visto una diminuzione dei ricavi del 12,4% rispetto al Q3 2024, con una ripartizione dei servizi che mostra i servizi di completamento contribuire per il 52%, perforazione per il 22%, produzione per il 16% e intervento per il 10%.
Dopo la chiusura dell'anno, KLXE ha completato un rifinanziamento, emettendo 232,2 milioni di dollari in Senior Notes 2030 e warrant per 2,37 milioni di azioni. Per il 2025, la direzione prevede ricavi stabili o leggermente superiori con margini EBITDA rettificati tra il 13% e il 15%.
KLX Energy Services (KLXE) informó sus resultados financieros del cuarto trimestre y del año completo 2024. Para el año fiscal 2024, la compañía registró ingresos de 709 millones de dólares con una pérdida neta de (53) millones de dólares y un EBITDA ajustado de 90 millones de dólares.
Los aspectos destacados del Q4 2024 incluyen ingresos de 166 millones de dólares, una pérdida neta de (15) millones de dólares y un EBITDA ajustado de 23 millones de dólares con un margen del 14%. La compañía experimentó una disminución del 12.4% en los ingresos en comparación con el Q3 2024, con un desglose de servicios que muestra que los servicios de finalización contribuyeron con el 52%, perforación con el 22%, producción con el 16% e intervención con el 10%.
Después del cierre del año, KLXE completó un refinanciamiento, emitiendo 232.2 millones de dólares en Notas Senior 2030 y warrants para 2.37 millones de acciones. Para 2025, la dirección espera ingresos estables o ligeramente superiores con márgenes de EBITDA ajustados entre el 13% y el 15%.
KLX 에너지 서비스 (KLXE)는 2024년 4분기 및 전체 연도 재무 결과를 보고했습니다. 2024 회계연도 동안 회사는 7억 9백만 달러의 수익을 기록했으며, 순손실은 (5천 3백만 달러)였고 조정 EBITDA는 9천만 달러였습니다.
2024년 4분기 주요 내용으로는 1억 6천 6백만 달러의 수익, 순손실 (1천 5백만 달러), 조정 EBITDA 2천 3백만 달러, 마진 14%가 포함됩니다. 회사는 2024년 3분기와 비교하여 수익이 12.4% 감소했으며, 서비스 세분화에서 완료 서비스가 52%, 드릴링이 22%, 생산이 16%, 개입이 10%를 차지했습니다.
연도 종료 후 KLXE는 2030년 만기 시니어 노트 2억 3천 2백만 달러와 237만 주의 워런트를 발행하여 재융자를 완료했습니다. 2025년을 위해 경영진은 수익이 안정적이거나 약간 증가할 것으로 예상하며, 조정 EBITDA 마진은 13%에서 15% 사이가 될 것으로 보입니다.
KLX Energy Services (KLXE) a annoncé ses résultats financiers du quatrième trimestre et de l'année complète 2024. Pour l'exercice 2024, la société a enregistré des revenus de 709 millions de dollars avec une perte nette de (53) millions de dollars et un EBITDA ajusté de 90 millions de dollars.
Les points saillants du Q4 2024 comprennent des revenus de 166 millions de dollars, une perte nette de (15) millions de dollars et un EBITDA ajusté de 23 millions de dollars avec une marge de 14%. La société a constaté une baisse de 12,4% des revenus par rapport au Q3 2024, avec une répartition des services montrant que les services de finition contribuaient à 52%, le forage à 22%, la production à 16% et l'intervention à 10%.
Après la clôture de l'année, KLXE a complété un refinancement, émettant 232,2 millions de dollars en Senior Notes 2030 et des bons de souscription pour 2,37 millions d'actions. Pour 2025, la direction s'attend à des revenus stables ou légèrement supérieurs avec des marges d'EBITDA ajustées entre 13% et 15%.
KLX Energy Services (KLXE) hat seine Finanzzahlen für das vierte Quartal und das gesamte Jahr 2024 veröffentlicht. Für das Geschäftsjahr 2024 verzeichnete das Unternehmen einen Umsatz von 709 Millionen Dollar mit einem Nettoverlust von (53) Millionen Dollar und einem bereinigten EBITDA von 90 Millionen Dollar.
Die Höhepunkte des Q4 2024 umfassen einen Umsatz von 166 Millionen Dollar, einen Nettoverlust von (15) Millionen Dollar und ein bereinigtes EBITDA von 23 Millionen Dollar mit einer Marge von 14%. Das Unternehmen verzeichnete einen Rückgang des Umsatzes um 12,4% im Vergleich zum Q3 2024, wobei die Dienstleistungsaufteilung zeigt, dass Abschlussdienstleistungen 52%, Bohrungen 22%, Produktion 16% und Interventionen 10% ausmachten.
Nach dem Jahresende hat KLXE eine Refinanzierung abgeschlossen und 232,2 Millionen Dollar in Senior Notes 2030 sowie Warrants für 2,37 Millionen Aktien ausgegeben. Für 2025 erwartet das Management stabile oder leicht höhere Einnahmen mit bereinigten EBITDA-Margen zwischen 13% und 15%.
- Improved Q4 2024 Adjusted EBITDA margin of 13.7%, up from 11.8% in Q4 2023
- Successfully completed refinancing of senior secured notes, providing increased financial flexibility
- 46% reduction in net working capital due to improved collections
- Strong performance in tech services, rentals and coiled tubing businesses
- Q4 2024 revenue declined 12.4% quarter-over-quarter to $166 million
- Full year 2024 net loss of $53 million with negative 7% margin
- Q4 2024 net loss increased to $15 million from $9.2 million in Q4 2023
- Revenue and rig count down 15% and 5% respectively year-over-year in Q4
Insights
KLX Energy Services' Q4 and FY2024 results reveal challenging market conditions with a $53 million annual net loss on $709 million revenue. Q4 showed $166 million revenue with a $15 million net loss, representing a 12.4% sequential decline from Q3. Despite these losses, the company improved its Adjusted EBITDA margin to 13.7% in Q4, up from 11.8% year-over-year, demonstrating effective cost control measures amid revenue contraction.
The refinancing completed March 12th represents a critical financial maneuver, replacing the 11.5% 2025 Senior Notes with new 2030 Senior Notes. This transaction included issuing warrants for approximately 2.37 million shares and establishing a new ABL facility. While extending debt maturities provides breathing room, the dilutive impact of the warrants and continued high interest burden merit attention.
Operationally, all three geographic segments showed sequential revenue declines, with Rocky Mountains experiencing the steepest drop at 20.5%. Management attributes this primarily to seasonal factors, but the consistent net losses across segments suggest structural challenges beyond seasonality. Capital expenditures decreased 27.1% sequentially to $15.3 million, potentially indicating greater capital discipline or investment opportunities.
The company's outlook for flat to slightly improved 2025 revenue with 13-15% EBITDA margins suggests management doesn't anticipate immediate recovery in the oilfield services market, though they note potential opportunities from increased gas-directed activity related to LNG export and data center demand.
KLX's results reflect the ongoing recalibration in North American oilfield services activity. While U.S. operators have increasingly prioritized capital discipline and shareholder returns over production growth, this has created a challenging revenue environment for service providers. The 15% year-over-year revenue decline against only a 5% rig count reduction indicates substantial pricing pressure and utilization challenges.
The company's segmented performance tells an important story about basin-specific dynamics. The Southwest segment (including Permian) demonstrated the strongest resilience, with operating income increasing despite revenue declines, suggesting better operational efficiency in this critical basin. Conversely, the steep decrease in Rocky Mountains segment performance signals potentially concerning structural issues in that region.
Management's commentary on potential gas-directed activity increases tied to LNG exports and data center demand represents a key strategic pivot. However, this transition remains speculative as current natural gas prices haven't yet triggered significant activity increases. The company's improvement in working capital management (46% decrease YoY) demonstrates appropriate operational response to market conditions.
The refinancing transaction carries mixed implications - while it addresses near-term debt maturities, the issuance of warrants and continued high interest burden may limit financial flexibility for growth initiatives. For a company with $75 million market cap carrying $285 million debt, balance sheet constraints will likely continue influencing strategic decisions despite this refinancing.
Full Year 2024 Financial Highlights
- Revenue of
$709 million - Net loss of
, net loss margin of (7)% and diluted loss per share of$(53) million $(3.27) - Adjusted EBITDA of
$90 million - Adjusted EBITDA margin of
13% - Subsequent to year end, KLX closed on refinancing its existing 2025 senior secured notes and closed on a new ABL credit facility
Fourth Quarter 2024 Financial Highlights
- Revenue of
$166 million - Net loss of
, net loss margin of (9)% and diluted loss per share of$(15) million $(0.90) - Adjusted EBITDA of
and Adjusted EBITDA margin of$23 million 14%
See "Non-GAAP Financial Measures" at the end of this release for a discussion of Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income (Loss), Adjusted Diluted Earnings (Loss) per share, Unlevered and Levered Free Cash Flow, Net Working Capital, Net Debt and their reconciliations to the most directly comparable financial measure calculated and presented in accordance with
Chris Baker, KLX President and Chief Executive Officer, stated, "We finished the year strong despite typical seasonal headwinds. 2024 fourth quarter revenue was
"We have seen solid consistency in our market-leading tech services, rentals and coiled tubing businesses, which have led to improved and sustainable profitability," added Baker. "We are closely monitoring potential opportunities for increased gas-directed activity, driven by LNG export and datacenter/AI demand. US LNG export capacity is expected to approximately double by 2030 and, we believe, this increase will drive incremental natural gas-directed activity within the US onshore market that will ultimately support and lift OFS pricing and utilization across all basins.
"Additionally, KLX is extremely pleased to have successfully completed our refinancing efforts, which will provide increased financial flexibility as we move forward. Looking forward to full year 2025, we expect annual revenue to be flat to up slightly and anticipate our Adjusted EBITDA margin to range between
Fourth Quarter 2024 Financial Results
Revenue for the fourth quarter of 2024 totaled
Net loss for the fourth quarter of 2024 was
Fourth Quarter 2024 Segment Results
The Company reports revenue, operating income (loss) and Adjusted EBITDA through three geographic business segments: Rocky Mountains, Southwest and Northeast/Mid-Con. The Company reports operating activities not attributable to an individual geographic business segment through the Corporate and other segment. Segment results are reported after inter-segment eliminations.
- Rocky Mountains: Revenue, operating income and Adjusted EBITDA for the Rocky Mountains segment was
,$54.0 million and$4.7 million , respectively, for the fourth quarter of 2024. Fourth quarter revenue represents a$11.8 million 20.5% decrease over the third quarter of 2024 largely due to winter holiday seasonality and budget exhaustion, which affected all of our regional completion and intervention offerings, including coiled tubing, frac rentals and wireline services. Segment operating income and Adjusted EBITDA decreased51.5% and28.9% , respectively, as a function of the seasonal decrease in activity, which is expected to correct as we exit the first quarter of 2025. - Southwest: Revenue, operating income and Adjusted EBITDA for the Southwest segment, which includes the Permian and
South Texas , was ,$61.4 million and$1.1 million , respectively, for the fourth quarter of 2024. Fourth quarter revenue represents a$9.6 million 10.5% decrease over the third quarter of 2024 largely due to annual seasonality due to budget exhaustion and winter holiday breaks, which affected all product service lines in the region, including our directional drilling and flowback services. Segment operating income and Adjusted EBITDA increased57.1% and10.3% , respectively, due largely to a shift in revenue mix and reduced overhead, including headcount and vehicle fleet. - Northeast/Mid-Con: Revenue, operating income and Adjusted EBITDA for the Northeast/Mid-Con segment was
,$50.1 million and$0.3 million , respectively, for the fourth quarter of 2024. Fourth quarter revenue represents a$9.8 million 4.4% decrease over the third quarter of 2024 driven largely by decreased completion activity due to budget exhaustion and winter holiday breaks. Segment operating income and Adjusted EBITDA decreased85.0% and10.1% , respectively, as a function of the decrease in activity. - Corporate and other: Operating loss and Adjusted EBITDA loss for the Corporate and other segment were
and$11.1 million , respectively, for the fourth quarter of 2024. Segment operating loss and Adjusted EBITDA loss remained largely in line with prior quarter.$8.5 million
The following is a tabular summary of revenue, operating income (loss) and Adjusted EBITDA (loss) for the fourth quarter ended December 31, 2024, the third quarter ended September 30, 2024 and the fourth quarter ended December 31, 2023 ($ in millions).
Three Months Ended | ||||||
December 31, 2024 | September 30, 2024 | December 31, 2023 | ||||
Revenue: | ||||||
Rocky Mountains | $ 54.0 | $ 67.9 | $ 60.0 | |||
Southwest | 61.4 | 68.6 | 67.3 | |||
Northeast/Mid-Con | 50.1 | 52.4 | 66.9 | |||
Total revenue | $ 165.5 | $ 188.9 | $ 194.2 |
Three Months Ended | ||||||
December 31, 2024 | September 30, 2024 | December 31, 2023 | ||||
Operating income (loss): | ||||||
Rocky Mountains | $ 4.7 | $ 9.7 | $ 6.7 | |||
Southwest | 1.1 | 0.7 | 1.7 | |||
Northeast/Mid-Con | 0.3 | 2.0 | 4.1 | |||
Corporate and other | (11.1) | (11.3) | (10.5) | |||
Total operating (loss) income | $ (5.0) | $ 1.1 | $ 2.0 |
Three Months Ended | ||||||
December 31, 2024 | September 30, 2024 | December 31, 2023 | ||||
Adjusted EBITDA (loss) | ||||||
Rocky Mountains | $ 11.8 | $ 16.6 | $ 12.7 | |||
Southwest | 9.6 | 8.7 | 8.8 | |||
Northeast/Mid-Con | 9.8 | 10.9 | 10.7 | |||
Segment total | 31.2 | 36.2 | 32.2 | |||
Corporate and other | (8.5) | (8.4) | (9.2) | |||
Total Adjusted EBITDA(1) | $ 22.7 | $ 27.8 | $ 23.0 |
(1) Excludes one-time costs, as defined in the Reconciliation of Consolidated Net Income (Loss) to Adjusted EBITDA table below, non-cash compensation expense and non-cash asset impairment expense. |
Balance Sheet and Liquidity
Total debt outstanding as of December 31, 2024 was
On March 7, 2025, the Company and certain of its subsidiaries entered into a Securities Purchase Agreement with certain holders (the "Investors") of its 2025 Senior Notes, pursuant to which the Company agreed to issue and sell to the Investors (a) approximately
In connection with the Refinancing, the Company also entered into a Credit Agreement, dated as of March 7, 2025 (the "New ABL Facility"), with the Company, as borrower, Eclipse Business Capital LLC, as administrative agent, as collateral agent and as FILO administrative agent and the lenders party thereto. The initial funding under the New ABL Facility occurred on March 12, 2025, and the proceeds were used to repay the Company's Prior ABL Facility in full.
Net working capital as of December 31, 2024 was
Other Financial Information
Capital expenditures were
As of December 31, 2024, we had
Conference Call Information
KLX will conduct its fourth quarter 2024 conference call, which can be accessed via dial-in or webcast, on Thursday, March 13, 2025 at 10:00 a.m. Eastern Time (9:00 a.m. Central Time) by dialing 1-201-389-0867 and asking for the KLX conference call at least 10 minutes prior to the start time, or by logging onto the webcast at https://investor.klx.com/events-and-presentations/events. For those who cannot listen to the live call, a replay will be available through March 27, 2025, and may be accessed by dialing 1-201-612-7415 and using passcode 13751933#. Also, an archive of the webcast will be available shortly after the call at https://investor.klx.com/events-and-presentations/events for 90 days. Please submit any questions for management prior to the call via email to KLXE@dennardlascar.com.
About KLX Energy Services Holdings, Inc.
KLX is a growth-oriented provider of diversified oilfield services to leading onshore oil and natural gas exploration and production companies operating in both conventional and unconventional plays in all of the active major basins throughout
Forward-Looking Statements and Cautionary Statements
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements to encourage companies to provide prospective information to investors. This news release (and any oral statements made regarding the subjects of this release, including on the conference call announced herein) includes forward-looking statements that reflect our current expectations and projections about our future results, performance and prospects. Forward-looking statements include all statements that are not historical in nature and are not current facts. When used in this news release (and any oral statements made regarding the subjects of this release, including on the conference call announced herein), the words "believe," "expect," "plan," "intend," "anticipate," "estimate," "predict," "potential," "continue," "may," "might," "should," "could," "will" or the negative of these terms or similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on our current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events with respect to, among other things: our operating cash flows; the availability of capital and our liquidity; our future revenue, income and operating performance; our ability to sustain and improve our utilization, revenue and margins; our ability to maintain acceptable pricing for our services; future capital expenditures; our ability to finance equipment, working capital and capital expenditures; our ability to execute our long-term growth strategy and to integrate our acquisitions; our ability to successfully develop our research and technology capabilities and implement technological developments and enhancements; and the timing and success of strategic initiatives and special projects.
Forward-looking statements are not assurances of future performance and actual results could differ materially from our historical experience and our present expectations or projections. These forward-looking statements are based on management's current expectations and beliefs, forecasts for our existing operations, experience, expectations and perception of historical trends, current conditions, anticipated future developments and their effect on us and other factors believed to be appropriate. Although management believes the expectations and assumptions reflected in these forward-looking statements are reasonable as and when made, no assurance can be given that these assumptions are accurate or that any of these expectations will be achieved (in full or at all). Our forward-looking statements involve significant risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. Known material factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, risks associated with the following: a decline in demand for our services, including due to overcapacity and other competitive factors affecting our industry; the cyclical nature and volatility of the oil and gas industry, which impacts the level of exploration, production and development activity and spending patterns by oil and natural gas exploration and production companies; a decline in, or substantial volatility of, crude oil and gas commodity prices, which generally leads to decreased spending by our customers and negatively impacts drilling, completion and production activity; inflation; increases in interest rates; the ongoing war in
Contacts: | KLX Energy Services Holdings, Inc. |
Keefer M. Lehner, EVP & CFO | |
832-930-8066 | |
Dennard Lascar Investor Relations | |
Ken Dennard / Natalie Hairston | |
713-529-6600 | |
KLX Energy Services Holdings, Inc. Condensed Consolidated Statements of Operations (In millions of (Unaudited) | |||||||||
Three Months Ended | Twelve Months Ended | ||||||||
December | September | December | December | December | |||||
Revenues | $ 165.5 | $ 188.9 | $ 194.2 | $ 709.3 | $ 888.4 | ||||
Costs and expenses: | |||||||||
Cost of sales | 127.4 | 142.3 | 152.2 | 549.7 | 672.5 | ||||
Depreciation and amortization | 25.1 | 23.9 | 19.8 | 94.0 | 72.8 | ||||
Selling, general and administrative | 17.6 | 21.2 | 19.8 | 79.6 | 86.7 | ||||
Research and development costs | 0.4 | 0.4 | 0.4 | 1.4 | 1.4 | ||||
Impairment and other charges | — | — | — | 0.1 | — | ||||
Bargain purchase gain | — | — | — | — | (1.9) | ||||
Operating (loss) income | (5.0) | 1.1 | 2.0 | (15.5) | 56.9 | ||||
Non-operating expense: | |||||||||
Interest income | (0.5) | (0.7) | (0.9) | (2.5) | (1.8) | ||||
Interest expense | 10.2 | 9.8 | 9.3 | 39.4 | 36.5 | ||||
(Loss) income before income tax | (14.7) | (8.0) | (6.4) | (52.4) | 22.2 | ||||
Income tax expense | — | 0.2 | 2.8 | 0.6 | 3.0 | ||||
Net (loss) income | $ (14.7) | $ (8.2) | $ (9.2) | $ (53.0) | $ 19.2 | ||||
Net income (loss) per common share: | |||||||||
Basic | $ (0.90) | $ (0.51) | $ (0.58) | $ (3.27) | $ 1.23 | ||||
Diluted | $ (0.90) | $ (0.51) | $ (0.58) | $ (3.27) | $ 1.22 | ||||
Weighted average common shares: | |||||||||
Basic | 16.3 | 16.2 | 16.0 | 16.2 | 15.6 | ||||
Diluted | 16.3 | 16.2 | 16.0 | 16.2 | 15.7 |
KLX Energy Services Holdings, Inc. Condensed Consolidated Balance Sheets (In millions of (Unaudited) | |||
As of December 31 | |||
2024 | 2023 | ||
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | $ 91.6 | $ 112.5 | |
Accounts receivable–trade, net of allowance of | 96.9 | 127.0 | |
Inventories, net | 31.0 | 33.5 | |
Prepaid expenses and other current assets | 13.5 | 17.3 | |
Total current assets | 233.0 | 290.3 | |
Property and equipment, net(1) | 197.1 | 220.6 | |
Operating lease assets | 19.6 | 22.3 | |
Intangible assets, net | 1.5 | 1.8 | |
Other assets | 5.1 | 4.8 | |
Total assets | $ 456.3 | $ 539.8 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Current liabilities: | |||
Accounts payable | $ 74.4 | $ 87.9 | |
Accrued interest | 4.5 | 4.6 | |
Accrued liabilities | 41.3 | 42.7 | |
Current portion of operating lease liabilities | 6.9 | 6.9 | |
Current portion of finance lease liabilities | 13.0 | 22.0 | |
Total current liabilities | 140.1 | 164.1 | |
Long-term debt | 285.1 | 284.3 | |
Long-term operating lease liabilities | 13.5 | 16.0 | |
Long-term finance lease liabilities | 26.4 | 36.2 | |
Other non-current liabilities | 1.7 | 0.4 | |
Commitments, contingencies and off-balance sheet arrangements | |||
Stockholders' equity: | |||
Common Stock, | 0.2 | 0.1 | |
Additional paid-in capital | 557.5 | 553.4 | |
Treasury stock, at cost, 0.5 shares and 0.4 shares | (5.8) | (5.3) | |
Accumulated deficit | (562.4) | (509.4) | |
Total stockholders' (deficit) equity | (10.5) | 38.8 | |
Total liabilities and stockholders' equity | $ 456.3 | $ 539.8 |
(1) Includes right-of-use assets - finance leases |
KLX Energy Services Holdings, Inc.
Additional Selected Operating Data
(Unaudited)
Non-GAAP Financial Measures
This release includes Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income (Loss), Adjusted Diluted Earnings (Loss) per share, Unlevered and Levered Free Cash Flow, Net Working Capital and Net Debt 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 the ongoing performance of our business. Adjusted EBITDA is used to calculate the Company's leverage ratio, consistent with the terms of the Company's ABL Facility.
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 EBITDA margin 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 margin is not a measure of net earnings or cash flows as determined by GAAP. Adjusted EBITDA margin is defined as the quotient of Adjusted EBITDA and total revenue. We believe Adjusted EBITDA margin 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, as a percentage of revenues.
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.
We define Unlevered Free Cash Flow as net cash provided by operating activities less capital expenditures and proceeds from sale of property and equipment plus interest expense. We define Levered Free Cash Flow as net cash provided by operating activities less capital expenditures and proceeds from sale of property and equipment. Our management uses Unlevered and Levered Free Cash Flow to assess the Company's liquidity and ability to repay maturing debt, fund operations and make additional investments. We believe that each of Unlevered and Levered Free Cash Flow provide useful information to investors because it is an important indicator of the Company's liquidity, including our ability to reduce Net Debt and make strategic investments.
Net Working Capital is calculated as current assets, excluding cash, less current liabilities, excluding accrued interest and finance lease obligations. We believe that Net Working Capital provides useful information to investors because it is an important indicator of the Company's liquidity.
We define Net Debt as total debt less cash and cash equivalents. We believe that Net Debt provides useful information to investors because it is an important indicator of the Company's indebtedness.
The following tables present a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures for the periods indicated:
KLX Energy Services Holdings, Inc. Reconciliation of Consolidated Net (Loss) Income to Adjusted EBITDA* (In millions of (Unaudited) | |||||||||
Three Months Ended | Twelve Months Ended | ||||||||
December | September | December | December | December | |||||
Consolidated net (loss) income (2) | $ (14.7) | $ (8.2) | $ (9.2) | $ (53.0) | $ 19.2 | ||||
Income tax expense | — | 0.2 | 2.8 | 0.6 | 3.0 | ||||
Interest expense, net | 9.7 | 9.1 | 8.4 | 36.9 | 34.7 | ||||
Operating (loss) income | (5.0) | 1.1 | 2.0 | (15.5) | 56.9 | ||||
Bargain purchase gain | — | — | — | — | (1.9) | ||||
Impairment and other charges (1) | — | — | — | 0.1 | — | ||||
One-time net costs, excluding impairment and other charges (1) | 1.6 | 1.8 | 0.5 | 7.1 | 6.8 | ||||
Adjusted operating (loss) income | (3.4) | 2.9 | 2.5 | (8.3) | 61.8 | ||||
Depreciation and amortization | 25.1 | 23.9 | 19.8 | 94.0 | 72.8 | ||||
Non-cash compensation | 1.0 | 1.0 | 0.7 | 3.9 | 3.0 | ||||
Adjusted EBITDA | $ 22.7 | $ 27.8 | $ 23.0 | $ 89.6 | $ 137.6 |
*Previously announced quarterly numbers may not sum to the year-end total due to rounding. | |
(1) The one-time costs during the fourth quarter of 2024 relate to | |
(2) Cost of sales includes |
KLX Energy Services Holdings, Inc. Consolidated Net (Loss) Income Margin(1) (In millions of (Unaudited) | |||||||||
Three Months Ended | Twelve Months Ended | ||||||||
December | September | December | December | December | |||||
Consolidated net (loss) income | $ (14.7) | $ (8.2) | $ (9.2) | $ (53.0) | $ 19.2 | ||||
Revenue | 165.5 | 188.9 | 194.2 | 709.3 | 888.4 | ||||
Consolidated net (loss) income margin percentage | (8.9) % | (4.3) % | (4.7) % | (7.5) % | 2.2 % |
(1) Consolidated Net (Loss) Income Margin is defined as the quotient of consolidated net income (loss) and total revenue. |
KLX Energy Services Holdings, Inc. Consolidated Adjusted EBITDA Margin(1) (In millions of (Unaudited) | |||||||||
Three Months Ended | Twelve Months Ended | ||||||||
December | September | December | December | December | |||||
Adjusted EBITDA | $ 22.7 | $ 27.8 | $ 23.0 | $ 89.6 | $ 137.6 | ||||
Revenue | 165.5 | 188.9 | 194.2 | 709.3 | 888.4 | ||||
Adjusted EBITDA Margin Percentage | 13.7 % | 14.7 % | 11.8 % | 12.6 % | 15.5 % |
(1) Adjusted EBITDA Margin is defined as the quotient of Adjusted EBITDA and total revenue. Adjusted EBITDA is operating income (loss) excluding one-time costs (as defined above), depreciation and amortization expense, non-cash compensation expense and non-cash asset impairment expense. |
Reconciliation of Rocky Mountains Operating Income to Adjusted EBITDA (In millions of (Unaudited) | |||||||||
Three Months Ended | Twelve Months Ended | ||||||||
December | September | December | December | December | |||||
Rocky Mountains operating income | $ 4.7 | $ 9.7 | $ 6.7 | $ 23.8 | $ 46.1 | ||||
One-time costs (1) | — | — | — | 0.1 | — | ||||
Adjusted operating income | 4.7 | 9.7 | 6.7 | 23.9 | 46.1 | ||||
Depreciation and amortization expense | 7.1 | 6.9 | 6.0 | 27.3 | 22.4 | ||||
Non-cash compensation | — | — | — | — | — | ||||
Rocky Mountains Adjusted EBITDA | $ 11.8 | $ 16.6 | $ 12.7 | $ 51.2 | $ 68.5 |
(1) One-time costs are defined in the Reconciliation of Consolidated Net Income (Loss) to Adjusted EBITDA table above. For purposes of segment reconciliation, one-time costs also include impairment and other charges. |
Reconciliation of Southwest Operating Income to Adjusted EBITDA (In millions of (Unaudited) | |||||||||
Three Months Ended | Twelve Months Ended | ||||||||
December | September | December | December | December | |||||
Southwest operating income | $ 1.1 | $ 0.7 | $ 1.7 | $ 3.7 | $ 19.3 | ||||
One-time costs (1) | 0.3 | 0.2 | 0.3 | 0.9 | 0.5 | ||||
Adjusted operating income | 1.4 | 0.9 | 2.0 | 4.6 | 19.8 | ||||
Depreciation and amortization expense | 8.2 | 7.8 | 6.8 | 30.8 | 25.7 | ||||
Non-cash compensation | — | — | — | — | — | ||||
Southwest Adjusted EBITDA | $ 9.6 | $ 8.7 | $ 8.8 | $ 35.4 | $ 45.5 |
(1) One-time costs are defined in the Reconciliation of Consolidated Net Income (Loss) to Adjusted EBITDA table above. For purposes of segment reconciliation, one-time costs also include impairment and other charges. |
Reconciliation of Northeast/Mid-Con Operating Income to Adjusted EBITDA (In millions of (Unaudited) | |||||||||
Three Months Ended | Twelve Months Ended | ||||||||
December | September | December | December | December | |||||
Northeast/Mid-Con operating income | $ 0.3 | $ 2.0 | $ 4.1 | $ 2.3 | $ 40.6 | ||||
One-time costs (1) | 0.1 | — | 0.1 | 0.6 | 0.1 | ||||
Adjusted operating income | 0.4 | 2.0 | 4.2 | 2.9 | 40.7 | ||||
Depreciation and amortization expense | 9.3 | 8.9 | 6.4 | 34.1 | 22.9 | ||||
Non-cash compensation | 0.1 | — | 0.1 | 0.3 | 0.2 | ||||
Northeast/Mid-Con Adjusted EBITDA | $ 9.8 | $ 10.9 | $ 10.7 | $ 37.3 | $ 63.8 |
(1) One-time costs are defined in the Reconciliation of Consolidated Net Income (Loss) to Adjusted EBITDA table above. For purposes of segment reconciliation, one-time costs also include impairment and other charges. |
Reconciliation of Corporate and Other Operating Loss to Adjusted EBITDA Loss (In millions of (Unaudited) | |||||||||
Three Months Ended | Twelve Months Ended | ||||||||
December | September | December | December | December | |||||
Corporate and other operating loss | $ (11.1) | $ (11.3) | $ (10.5) | $ (45.3) | $ (49.1) | ||||
Bargain purchase gain | — | — | — | — | (1.9) | ||||
Impairment and other charges | — | — | — | 0.1 | — | ||||
One-time costs, excluding impairment and other charges (1) | 1.2 | 1.6 | 0.1 | 5.5 | 6.2 | ||||
Adjusted operating loss | (9.9) | (9.7) | (10.4) | (39.7) | (44.8) | ||||
Depreciation and amortization expense | 0.5 | 0.3 | 0.5 | 1.8 | 1.8 | ||||
Non-cash compensation | 0.9 | 1.0 | 0.7 | 3.6 | 2.8 | ||||
Corporate and other Adjusted EBITDA loss | $ (8.5) | $ (8.4) | $ (9.2) | $ (34.3) | $ (40.2) |
(1) One-time costs are defined in the Reconciliation of Consolidated Net Income (Loss) to Adjusted EBITDA table above. For purposes of segment reconciliation, one-time costs also include impairment and other charges. |
KLX Energy Services Holdings, Inc. Segment Operating Income Margin(1) (In millions of (Unaudited) | |||||||||
Three Months Ended | Twelve Months Ended | ||||||||
December | September | December | December | December | |||||
Rocky Mountains | |||||||||
Operating income | $ 4.7 | $ 9.7 | $ 6.7 | $ 23.8 | $ 46.1 | ||||
Revenue | 54.0 | 67.9 | 60.0 | 228.9 | 271.3 | ||||
Segment operating income margin percentage | 8.7 % | 14.3 % | 11.2 % | 10.4 % | 17.0 % | ||||
Southwest | |||||||||
Operating income | 1.1 | 0.7 | 1.7 | 3.7 | 19.3 | ||||
Revenue | 61.4 | 68.6 | 67.3 | 269.3 | 304.9 | ||||
Segment operating income margin percentage | 1.8 % | 1.0 % | 2.5 % | 1.4 % | 6.3 % | ||||
Northeast/Mid-Con | |||||||||
Operating income | 0.3 | 2.0 | 4.1 | 2.3 | 40.6 | ||||
Revenue | 50.1 | 52.4 | 66.9 | 211.1 | 312.2 | ||||
Segment operating income margin percentage | 0.6 % | 3.8 % | 6.1 % | 1.1 % | 13.0 % |
(1) Segment operating income margin is defined as the quotient of segment operating income and segment revenue. |
KLX Energy Services Holdings, Inc. Segment Adjusted EBITDA Margin(1) (In millions of (Unaudited) | |||||||||
Three Months Ended | Twelve Months Ended | ||||||||
December | September | December | December | December | |||||
Rocky Mountains | |||||||||
Adjusted EBITDA | $ 11.8 | $ 16.6 | $ 12.7 | $ 51.2 | $ 68.5 | ||||
Revenue | 54.0 | 67.9 | 60.0 | 228.9 | 271.3 | ||||
Adjusted EBITDA Margin Percentage | 21.9 % | 24.4 % | 21.2 % | 22.4 % | 25.2 % | ||||
Southwest | |||||||||
Adjusted EBITDA | 9.6 | 8.7 | 8.8 | 35.4 | 45.5 | ||||
Revenue | 61.4 | 68.6 | 67.3 | 269.3 | 304.9 | ||||
Adjusted EBITDA Margin Percentage | 15.6 % | 12.7 % | 13.1 % | 13.1 % | 14.9 % | ||||
Northeast/Mid-Con | |||||||||
Adjusted EBITDA | 9.8 | 10.9 | 10.7 | 37.3 | 63.8 | ||||
Revenue | 50.1 | 52.4 | 66.9 | 211.1 | 312.2 | ||||
Adjusted EBITDA Margin Percentage | 19.6 % | 20.8 % | 16.0 % | 17.7 % | 20.4 % |
(1) Segment Adjusted EBITDA Margin is defined as the quotient of Segment Adjusted EBITDA and total segment revenue. Segment Adjusted EBITDA is segment operating income (loss) excluding one-time costs (as defined above), non-cash compensation expense and non-cash asset impairment expense. |
KLX Energy Services Holdings, Inc. Reconciliation of Consolidated Net (Loss) Income to Adjusted Net (Loss) Income and Adjusted Diluted (Loss) Earnings per Share (In millions of (Unaudited) | |||||||||
Three Months Ended | Twelve Months Ended | ||||||||
December | September | December | December | December | |||||
Consolidated net (loss) income(2) | $ (14.7) | $ (8.2) | $ (9.2) | $ (53.0) | $ 19.2 | ||||
Bargain purchase gain | — | — | — | — | (1.9) | ||||
Impairment and other charges | — | — | — | 0.1 | — | ||||
One-time costs(1) | 1.6 | 1.8 | 0.5 | 7.1 | 6.8 | ||||
Adjusted net (loss) income | $ (13.1) | $ (6.4) | $ (8.7) | $ (45.8) | $ 24.1 | ||||
Diluted weighted average common shares | 16.3 | 16.2 | 16.0 | 16.2 | 15.7 | ||||
Adjusted Diluted (Loss) Earnings per share(3) | $ (0.80) | $ (0.40) | $ (0.54) | $ (2.83) | $ 1.54 |
*Previously announced quarterly numbers may not sum to the year-end total due to rounding. | |
(1) The one-time costs during the fourth quarter of 2024 relate to | |
(2) Cost of sales includes | |
(3) Adjusted Diluted (Loss) Earnings per share is defined as the quotient of Adjusted Net (Loss) Income and diluted weighted average common shares. |
KLX Energy Services Holdings, Inc. Reconciliation of Net Cash Flow Provided by Operating Activities to Free Cash Flow (In millions of (Unaudited) | |||||||||
Three Months Ended | Twelve Months Ended | ||||||||
December | September | December | December | December | |||||
Net cash flow provided by operating activities | $ 26.0 | $ 16.8 | $ 38.6 | $ 54.2 | $ 115.6 | ||||
Capital expenditures | (15.3) | (21.0) | (12.8) | (65.1) | (57.1) | ||||
Proceeds from sale of property and equipment | 4.8 | 2.6 | 3.0 | 14.0 | 16.3 | ||||
Cash from acquisition | — | — | — | — | 1.1 | ||||
Levered Free Cash Flow | 15.5 | (1.6) | 28.8 | 3.1 | 75.9 | ||||
Add: Interest expense, net | 9.7 | 9.1 | 8.4 | 36.9 | 34.7 | ||||
Unlevered Free Cash Flow | $ 25.2 | $ 7.5 | $ 37.2 | $ 40.0 | $ 110.6 |
KLX Energy Services Holdings, Inc. Reconciliation of Current Assets and Current Liabilities to Net Working Capital (In millions of (Unaudited) | |||||
As of | |||||
December 31, 2024 | September 30, 2024 | December 31, 2023 | |||
Current assets | $ 233.0 | $ 254.8 | $ 290.3 | ||
Less: Cash | 91.6 | 82.7 | 112.5 | ||
Net current assets | 141.4 | 172.1 | 177.8 | ||
Current liabilities | 140.1 | 205.1 | 164.1 | ||
Less: Current portion of long-term debt | — | 50.0 | — | ||
Less: Accrued interest | 4.5 | 11.4 | 4.6 | ||
Less: Operating lease obligations | 6.9 | 6.7 | 6.9 | ||
Less: Finance lease obligations | 13.0 | 15.9 | 22.0 | ||
Net current liabilities | 115.7 | 121.1 | 130.6 | ||
Net working capital | $ 25.7 | $ 51.0 | $ 47.2 |
KLX Energy Services Holdings, Inc. Reconciliation of Net Debt(1) (In millions of (Unaudited) | |||||
As of | |||||
December 31, 2024 | September 30, 2024 | December 31, 2023 | |||
Total Debt | $ 285.1 | $ 285.2 | $ 284.3 | ||
Cash | 91.6 | 82.7 | 112.5 | ||
Net Debt | $ 193.5 | $ 202.5 | $ 171.8 |
(1) Net Debt is defined as total debt less cash and cash equivalents. |
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SOURCE KLX Energy Services Holdings, Inc.