KLX Energy Services Holdings, Inc. Reports Second Quarter 2024 Results
KLX Energy Services Holdings (KLXE) reported Q2 2024 results with revenue of $180 million, a 3.1% increase from Q1. The company posted a net loss of $8 million and diluted loss per share of $0.49. Adjusted EBITDA improved 125% sequentially to $27 million, with a margin of 15%. KLX implemented $16 million in annualized cost reductions during the quarter. The company's cash balance increased to $87 million, with total debt at $285 million. KLX reaffirmed its Q3 2024 guidance, expecting revenue to be flat to slightly up compared to Q2, with similar Adjusted EBITDA margins.
KLX Energy Services Holdings (KLXE) ha riportato i risultati del secondo trimestre 2024 con un fatturato di 180 milioni di dollari, un aumento del 3,1% rispetto al primo trimestre. La società ha registrato una perdita netta di 8 milioni di dollari e una perdita diluita per azione di 0,49 dollari. L'EBITDA rettificato è migliorato del 125% su base sequenziale, raggiungendo i 27 milioni di dollari, con un margine del 15%. KLX ha implementato riduzioni dei costi annualizzate per 16 milioni di dollari durante il trimestre. Il saldo di cassa dell'azienda è aumentato a 87 milioni di dollari, con un debito totale di 285 milioni di dollari. KLX ha confermato le previsioni per il terzo trimestre 2024, prevedendo un fatturato stabile o leggermente in aumento rispetto al secondo trimestre, con margini di EBITDA rettificati simili.
KLX Energy Services Holdings (KLXE) reportó resultados del segundo trimestre de 2024 con ingresos de 180 millones de dólares, un aumento del 3,1% en comparación con el primer trimestre. La compañía registró una pérdida neta de 8 millones de dólares y una pérdida diluida por acción de 0,49 dólares. El EBITDA ajustado mejoró un 125% secuencialmente, alcanzando los 27 millones de dólares, con un margen del 15%. KLX implementó reducciones de costos anuales de 16 millones de dólares durante el trimestre. El saldo de efectivo de la compañía aumentó a 87 millones de dólares, con una deuda total de 285 millones de dólares. KLX reafirmó sus pronósticos para el tercer trimestre de 2024, esperando que los ingresos se mantengan estables o levemente en aumento en comparación con el segundo trimestre, con márgenes de EBITDA ajustados similares.
KLX 에너지 서비스 홀딩스 (KLXE)는 2024년 2분기 결과를 발표했으며, 수익이 1억 8천만 달러로 1분기 대비 3.1% 증가했습니다. 회사는 800만 달러의 순손실을 기록했으며, 주당 희석 손실은 0.49달러였습니다. 조정된 EBITDA는 2천7백만 달러로 125% 증가했으며, 마진은 15%였습니다. KLX는 이번 분기에 연간 1천6백만 달러의 비용 절감을 시행했습니다. 회사의 현금 잔고는 8천7백만 달러로 증가했으며, 총 부채는 2억 8천5백만 달러입니다. KLX는 2024년 3분기에 대한 가이던스를 재확인하며, 2분기와 비교해 수익이 변동이 없거나 소폭 증가할 것으로 예상하며, 비슷한 조정 EBITDA 마진을 유지할 것으로 전망하고 있습니다.
KLX Energy Services Holdings (KLXE) a annoncé ses résultats pour le deuxième trimestre 2024 avec des revenus de 180 millions de dollars, ce qui représente une augmentation de 3,1 % par rapport au premier trimestre. L'entreprise a enregistré une perte nette de 8 millions de dollars et une perte diluée par action de 0,49 dollar. L'EBITDA ajusté a augmenté de 125 % par rapport au trimestre précédent, atteignant 27 millions de dollars, avec une marge de 15 %. KLX a mis en œuvre des réductions de coûts annualisées de 16 millions de dollars au cours du trimestre. La trésorerie de l'entreprise a augmenté pour atteindre 87 millions de dollars, avec une dette totale de 285 millions de dollars. KLX a réaffirmé ses prévisions pour le troisième trimestre 2024, s'attendant à ce que les revenus soient stables ou légèrement en hausse par rapport au deuxième trimestre, avec des marges d'EBITDA ajustées similaires.
KLX Energy Services Holdings (KLXE) hat die Ergebnisse für das zweite Quartal 2024 veröffentlicht, mit Einnahmen von 180 Millionen Dollar, was einem Anstieg von 3,1 % im Vergleich zum ersten Quartal entspricht. Das Unternehmen verzeichnete einen Nettoverlust von 8 Millionen Dollar und einen verwässerten Verlust von 0,49 Dollar pro Aktie. Das angepasste EBITDA verbesserte sich sequenziell um 125 % auf 27 Millionen Dollar, mit einer Marge von 15 %. KLX setzte Jährliche Kostensenkungen in Höhe von 16 Millionen Dollar im Quartal um. Der Bargeldbestand des Unternehmens erhöhte sich auf 87 Millionen Dollar, mit einer Gesamtverschuldung von 285 Millionen Dollar. KLX bestätigte die Prognose für das dritte Quartal 2024 und erwartet, dass die Einnahmen stabil oder leicht über dem Niveau des zweiten Quartals liegen, bei ähnlichen Anpassungs-EBITDA-Margen.
- Revenue increased 3.1% sequentially to $180 million
- Adjusted EBITDA improved 125% sequentially to $27 million
- Adjusted EBITDA margin grew 118% to 15%
- Implemented $16 million in annualized cost reductions
- Cash balance increased by $2 million to $87 million
- Levered Free Cash Flow of $10 million
- Net loss of $8 million
- Diluted loss per share of $0.49
- Total debt of $285 million
- 18.1% sequential revenue decrease in Northeast/Mid-Con segment
Insights
KLX Energy Services' Q2 2024 results show mixed performance. Revenue increased
Notably, Adjusted EBITDA improved significantly by
The balance sheet shows
KLX's performance reflects broader industry trends. The company's ability to grow revenue despite declining rig counts suggests effective market positioning. The shift towards higher-margin segments, particularly in the Rockies and Southwest, indicates adaptability to changing market dynamics.
The rebound in production and intervention activities is noteworthy, as these typically offer higher margins. This, combined with the company's focus on extended reach laterals and completion technologies, positions KLX well for potential market recovery.
However, the regional disparities are significant. While the Rocky Mountains and Southwest segments showed improvement, the Northeast/Mid-Con segment experienced declines due to reduced gas-focused activity. This highlights the importance of KLX's geographic diversification strategy in mitigating regional market fluctuations.
KLX's Q2 results demonstrate resilience in a challenging market. The company's focus on cost structure optimization and improved asset utilization is important in the current environment of market volatility and rig count declines.
The shift towards higher-margin services, particularly in Rentals and Tech Services, is a strategic move that could enhance profitability. The company's leading presence in extended reach laterals and completion technologies positions it well for potential market recovery.
However, the persistent net loss and high debt levels are concerns. The company's ability to generate positive free cash flow (
Second Quarter 2024 Financial Highlights
- Revenue of
$180 million - Enacted approximately
of annualized cost reductions in the second quarter of 2024 primarily related to operational streamlining initiatives, insurance and professional fees$16 million - Net loss of
and diluted loss per share of$(8) million $(0.49) - Adjusted EBITDA of
$27 million - Net loss margin of (4)%
- Adjusted EBITDA margin of
15% - Net Cash Flow Provided by Operating Activities of
$22 million - Levered Free Cash Flow of
$10 million - Cash balance of
, increased$87 million sequentially$2 million - Total Debt and Net Debt of
and$285 million , respectively$198 million - Liquidity of
, consisting of approximately$121 million of cash and approximately$87 million of available borrowing capacity under the June 2024 asset-based revolving credit facility (the "ABL Facility") borrowing base certificate$34 million
See "Non-GAAP Financial Measures" at the end of this release for a discussion of Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net (Loss) Income, Adjusted Diluted (Loss) Earnings per share, Unlevered and Levered Free Cash Flow, Net Working Capital, Net Debt, Net Leverage Ratio and their reconciliations to the most directly comparable financial measure calculated and presented in accordance with
Chris Baker, KLX President and Chief Executive Officer, said, "As I stated in our preliminary results release three weeks ago, we are extremely proud of our second quarter performance. Despite the
"Second quarter Adjusted EBITDA improved sequentially by
"Our dramatic growth in sequential Adjusted EBITDA and Adjusted EBITDA margin saw results return to more normalized levels and was driven by a non-recurrence of first quarter 2024 transitory issues, cost structure optimization initiatives, improved crew utilization, seasonally-reduced payroll tax exposure, and incremental activity and a shift in revenue mix towards higher margin segments (Rockies) and product service lines (Rentals and Tech Services, including Fishing), particularly within the Rockies and Southwest segments.
"Once again, our geographic and product service line diversification has driven margin sustainability in the face of market weakness highlighting the resiliency and strength of the KLX platform. Our leading presence in extended reach laterals, completion technologies, and production and intervention services should continue to yield sustainable results even in a flat market.
"Based on current calendars and latest customer conversations, we are reaffirming our third quarter 2024 guidance for revenue to be flat to slightly up relative to the second quarter, with similar Adjusted EBITDA margins to the second quarter," concluded Baker.
Second Quarter 2024 Financial Results
Revenue for the second quarter of 2024 totaled
Net loss for the second quarter of 2024 was
Second 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.
- Rocky Mountains: Revenue, operating income and Adjusted EBITDA for the Rocky Mountains segment was
,$61.4 million and$10.5 million , respectively, for the second quarter of 2024. Second quarter revenue represents a$17.2 million 34.6% sequential increase over the first quarter of 2024 largely due to annual seasonality, inclement weather and non-KLX-related safety standdowns, which did not recur in the second quarter of 2024. Segment operating income and Adjusted EBITDA increased975.0% and218.5% , respectively, as a function of a50.0% sequential increase in production and intervention revenue, including Rentals and Tech Services (including Fishing), driven by a normalization of activity, increased asset utilization of latest-generation assets and a reduced cost structure. - Southwest: Revenue, operating income and Adjusted EBITDA for the Southwest segment, which includes the Permian and
South Texas , was ,$69.9 million and$2.6 million , respectively, for the second quarter of 2024. Second quarter revenue represents an approximately$10.4 million 1% sequential increase over the first quarter of 2024, but more importantly we saw a shift in revenue mix and were able to drive outsized sequential revenue growth across Rentals, Tech Services and Flowback. Segment operating income and Adjusted EBITDA increased471.4% and55.2% , respectively, as a function of the above shift in revenue and a reduced cost structure. - Northeast/Mid-Con: Revenue, operating loss and Adjusted EBITDA for the Northeast/Mid-Con segment was
,$48.9 million and$2.5 million , respectively, for the second quarter of 2024. Second quarter revenue represents a$6.4 million 18.1% sequential decrease over the first quarter of 2024 due to reduced regional gas-focused activity across the vast majority of our drilling, completion and production offerings. Segment operating income and Adjusted EBITDA decreased (204.2)% and (37.3)%, respectively, largely due to lower activity and pricing, which was partially offset by a reduced cost structure. - Corporate and other: Operating loss and Adjusted EBITDA for the Corporate and other segment was
and$9.2 million , respectively, for the second quarter of 2024. Segment operating loss and Adjusted EBITDA loss decreased$7.0 million 32.4% and32.0% , respectively, due to a reduced cost structure.
The following is a tabular summary of revenue, operating income (loss) and Adjusted EBITDA (loss) for the second quarter ended June 30, 2024, the first quarter ended March 31, 2024 and the second quarter ended June 30, 2023 ($ in millions).
Three Months Ended | ||||||
June 30, 2024 | March 31, 2024 | June 30, 2023 | ||||
Revenue: | ||||||
Rocky Mountains | $ 61.4 | $ 45.6 | $ 66.4 | |||
Southwest | 69.9 | 69.4 | 86.3 | |||
Northeast/Mid-Con | 48.9 | 59.7 | 81.3 | |||
Total revenue | $ 180.2 | $ 174.7 | $ 234.0 | |||
Three Months Ended | ||||||
June 30, 2024 | March 31, 2024 | June 30, 2023 | ||||
Operating income (loss): | ||||||
Rocky Mountains | $ 10.5 | $ (1.2) | $ 11.9 | |||
Southwest | 2.6 | (0.7) | 8.1 | |||
Northeast/Mid-Con | (2.5) | 2.4 | 12.6 | |||
Corporate and other | (9.2) | (13.6) | (13.0) | |||
Total operating income (loss) | $ 1.4 | $ (13.1) | $ 19.6 | |||
Three Months Ended | ||||||
June 30, 2024 | March 31, 2024 | June 30, 2023 | ||||
Adjusted EBITDA (loss) | ||||||
Rocky Mountains | $ 17.2 | $ 5.4 | $ 17.0 | |||
Southwest | 10.4 | 6.7 | 14.8 | |||
Northeast/Mid-Con | 6.4 | 10.2 | 18.0 | |||
Segment total | 34.0 | 22.3 | 49.8 | |||
Corporate and other | (7.0) | (10.3) | (10.1) | |||
Total Adjusted EBITDA(1) | $ 27.0 | $ 12.0 | $ 39.7 |
(1) Excludes one-time costs, as defined in the Reconciliation of Consolidated Net (Loss) Income to Adjusted EBITDA table below, non-cash compensation expense and non-cash asset impairment expense. |
Balance Sheet and Liquidity
Total debt outstanding as of June 30, 2024 was
Net Working Capital as of June 30, 2024 was
Other Financial Information
Capital expenditures were
As of June 30, 2024, we had
Guidance
- Expect third quarter 2024 revenue of
to$175 million $190 million - Expect third quarter 2024 Adjusted EBITDA margin of
13% to16%
Conference Call Information
KLX will conduct its second quarter 2024 conference call, which can be accessed via dial-in or webcast, on Thursday, August 8, 2024 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 August 22, 2024, and may be accessed by dialing 1-201-612-7415 and using passcode 13747369#. 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 ability to renew and refinance our debt; 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. | |||||
Three Months Ended | |||||
June 30, 2024 | March 31, 2024 | June 30, 2023 | |||
Revenues | $ 180.2 | $ 174.7 | $ 234.0 | ||
Costs and expenses: | |||||
Cost of sales | 136.0 | 144.0 | 173.3 | ||
Depreciation and amortization | 23.1 | 21.9 | 17.6 | ||
Selling, general and administrative | 19.3 | 21.6 | 22.0 | ||
Research and development costs | 0.3 | 0.3 | 0.3 | ||
Impairment and other charges | 0.1 | — | — | ||
Bargain purchase gain | — | — | 1.2 | ||
Operating income (loss) | 1.4 | (13.1) | 19.6 | ||
Non-operating expense: | |||||
Interest income | (0.6) | (0.7) | — | ||
Interest expense | 9.8 | 9.6 | 8.5 | ||
Net (loss) income before income tax | (7.8) | (22.0) | 11.1 | ||
Income tax expense (benefit) | 0.2 | 0.2 | (0.3) | ||
Net (loss) income | $ (8.0) | $ (22.2) | $ 11.4 | ||
Net (loss) income per common share: | |||||
Basic | $ (0.49) | $ (1.38) | $ 0.71 | ||
Diluted | $ (0.49) | $ (1.38) | $ 0.71 | ||
Weighted average common shares: | |||||
Basic | 16.2 | 16.1 | 16.0 | ||
Diluted | 16.2 | 16.1 | 16.1 |
KLX Energy Services Holdings, Inc. | |||
June 30, 2024 | December 31, 2023 | ||
(Unaudited) | |||
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | $ 86.9 | $ 112.5 | |
Accounts receivable–trade, net of allowance of | 118.1 | 127.0 | |
Inventories, net | 32.3 | 33.5 | |
Prepaid expenses and other current assets | 14.0 | 17.3 | |
Total current assets | 251.3 | 290.3 | |
Property and equipment, net(1) | 215.3 | 220.6 | |
Operating lease assets | 19.6 | 22.3 | |
Intangible assets, net | 1.6 | 1.8 | |
Other assets | 3.4 | 4.8 | |
Total assets | $ 491.2 | $ 539.8 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Current liabilities: | |||
Accounts payable | $ 80.1 | $ 87.9 | |
Accrued interest | 4.6 | 4.6 | |
Accrued liabilities | 42.1 | 42.7 | |
Current portion of operating lease obligations | 7.0 | 6.9 | |
Current portion of finance lease obligations | 17.9 | 22.0 | |
Total current liabilities | 151.7 | 164.1 | |
Long-term debt | 284.9 | 284.3 | |
Long-term operating lease obligations | 13.6 | 16.0 | |
Long-term finance lease obligations | 30.9 | 36.2 | |
Other non-current liabilities | 0.3 | 0.4 | |
Commitments, contingencies and off-balance sheet arrangements | |||
Stockholders' equity: | |||
Common stock, | 0.2 | 0.1 | |
Additional paid-in capital | 555.0 | 553.4 | |
Treasury stock, at cost, 0.5 shares and 0.4 shares | (5.8) | (5.3) | |
Accumulated deficit | (539.6) | (509.4) | |
Total stockholders' equity | 9.8 | 38.8 | |
Total liabilities and stockholders' equity | $ 491.2 | $ 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 (Loss) Income, Adjusted Diluted (Loss) Earnings per share, Unlevered and Levered Free Cash Flow, Net Working Capital, Net Debt and Net Leverage Ratio 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 (Loss) Income as consolidated net (loss) income 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 (Loss) Income is useful because it allows us to exclude non-recurring items in evaluating our operating performance.
We define Adjusted Diluted (Loss) Earnings per share as the quotient of Adjusted Net (Loss) Income and diluted weighted average common shares. We believe that Adjusted Diluted (Loss) Earnings 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.
We define Net Leverage Ratio as Net Debt divided by Annualized Adjusted EBITDA. We believe that Net Leverage Ratio provides useful information to investors because it is an important indicator of the Company's indebtedness in relation to our operating performance.
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. | |||||
Three Months Ended | |||||
June 30, 2024 | March 31, 2024 | June 30, 2023 | |||
Consolidated net (loss) income | $ (8.0) | $ (22.2) | $ 11.4 | ||
Income tax expense (benefit) | 0.2 | 0.2 | (0.3) | ||
Interest expense, net | 9.2 | 8.9 | 8.5 | ||
Operating income (loss) | 1.4 | (13.1) | 19.6 | ||
Bargain purchase gain | — | — | 1.2 | ||
Impairment and other charges (1) | 0.1 | — | — | ||
One-time net costs, excluding impairment and other charges (1) | 1.4 | 2.3 | 0.5 | ||
Adjusted operating income (loss) | 2.9 | (10.8) | 21.3 | ||
Depreciation and amortization | 23.1 | 21.9 | 17.6 | ||
Non-cash compensation | 1.0 | 0.9 | 0.8 | ||
Adjusted EBITDA | $ 27.0 | $ 12.0 | $ 39.7 |
* | Previously announced quarterly numbers may not sum to the year-end total due to rounding. |
(1) | The one-time costs during the second quarter of 2024 relate to professional services and impairment and other charges. |
KLX Energy Services Holdings, Inc. | |||||
Three Months Ended | |||||
June 30, 2024 | March 31, 2024 | June 30, 2023 | |||
Consolidated net (loss) income | $ (8.0) | $ (22.2) | $ 11.4 | ||
Revenue | 180.2 | 174.7 | 234.0 | ||
Consolidated net (loss) income margin percentage | (4.4) % | (12.7) % | 4.9 % |
(1) | Consolidated net (loss) income margin is defined as the quotient of consolidated net (loss) income and total revenue. |
KLX Energy Services Holdings, Inc. | |||||
Three Months Ended | |||||
June 30, 2024 | March 31, 2024 | June 30, 2023 | |||
Adjusted EBITDA | $ 27.0 | $ 12.0 | $ 39.7 | ||
Revenue | 180.2 | 174.7 | 234.0 | ||
Adjusted EBITDA Margin Percentage | 15.0 % | 6.9 % | 17.0 % |
(1) | Adjusted EBITDA margin is defined as the quotient of Adjusted EBITDA and total revenue. Adjusted EBITDA is net (loss) income excluding one-time costs (as defined above), depreciation and amortization expense, non-cash compensation expense and non-cash asset impairment expense. |
KLX Energy Services Holdings, Inc. | |||||
Three Months Ended | |||||
June 30, 2024 | March 31, 2024 | June 30, 2023 | |||
Rocky Mountains operating income (loss) | $ 10.5 | $ (1.2) | $ 11.9 | ||
One-time costs (1) | — | — | — | ||
Adjusted operating income (loss) | 10.5 | (1.2) | 11.9 | ||
Depreciation and amortization expense | 6.7 | 6.6 | 5.1 | ||
Non-cash compensation | — | — | — | ||
Rocky Mountains Adjusted EBITDA | $ 17.2 | $ 5.4 | $ 17.0 |
(1) | One-time costs are defined in the Reconciliation of Consolidated Net (Loss) Income to Adjusted EBITDA table above. For purposes of segment reconciliation, one-time costs also include impairment and other charges. |
KLX Energy Services Holdings, Inc. | |||||
Three Months Ended | |||||
June 30, 2024 | March 31, 2024 | June 30, 2023 | |||
Southwest operating income (loss) | $ 2.6 | $ (0.7) | $ 8.1 | ||
One-time costs (1) | 0.4 | — | — | ||
Adjusted operating income (loss) | 3.0 | (0.7) | 8.1 | ||
Depreciation and amortization expense | 7.4 | 7.4 | 6.7 | ||
Non-cash compensation | — | — | — | ||
Southwest Adjusted EBITDA | $ 10.4 | $ 6.7 | $ 14.8 |
(1) | One-time costs are defined in the Reconciliation of Consolidated Net (Loss) Income to Adjusted EBITDA table above. For purposes of segment reconciliation, one-time costs also include impairment and other charges. |
KLX Energy Services Holdings, Inc. | |||||
Three Months Ended | |||||
June 30, 2024 | March 31, 2024 | June 30, 2023 | |||
Northeast/Mid-Con operating (loss) income | $ (2.5) | $ 2.4 | $ 12.6 | ||
One-time costs (1) | 0.2 | 0.3 | — | ||
Adjusted operating (loss) income | (2.3) | 2.7 | 12.6 | ||
Depreciation and amortization expense | 8.6 | 7.4 | 5.4 | ||
Non-cash compensation | 0.1 | 0.1 | — | ||
Northeast/Mid-Con Adjusted EBITDA | $ 6.4 | $ 10.2 | $ 18.0 |
(1) | One-time costs are defined in the Reconciliation of Consolidated Net (Loss) Income to Adjusted EBITDA table above. For purposes of segment reconciliation, one-time costs also include impairment and other charges. |
KLX Energy Services Holdings, Inc. Reconciliation of Corporate and Other Operating Loss to Adjusted EBITDA Loss (In millions of (Unaudited) | |||||
Three Months Ended | |||||
June 30, 2024 | March 31, 2024 | June 30, 2023 | |||
Corporate and other operating loss | $ (9.2) | $ (13.6) | $ (13.0) | ||
Bargain purchase gain | — | — | 1.2 | ||
Impairment and other charges | 0.1 | — | — | ||
One-time net costs, excluding impairment and other charges (1) | 0.8 | 2.0 | 0.5 | ||
Adjusted operating loss | (8.3) | (11.6) | (11.3) | ||
Depreciation and amortization expense | 0.4 | 0.5 | 0.4 | ||
Non-cash compensation | 0.9 | 0.8 | 0.8 | ||
Corporate and other Adjusted EBITDA loss | $ (7.0) | $ (10.3) | $ (10.1) |
(1) | One-time costs are defined in the Reconciliation of Consolidated Net (Loss) Income to Adjusted EBITDA table above. For purposes of segment reconciliation, one-time costs also include impairment and other charges. |
KLX Energy Services Holdings, Inc. | |||||
Three Months Ended | |||||
June 30, 2024 | March 31, 2024 | June 30, 2023 | |||
Rocky Mountains | |||||
Operating income (loss) | $ 10.5 | $ (1.2) | $ 11.9 | ||
Revenue | 61.4 | 45.6 | 66.4 | ||
Segment operating income (loss) margin percentage | 17.1 % | (2.6) % | 17.9 % | ||
Southwest | |||||
Operating income (loss) | 2.6 | (0.7) | 8.1 | ||
Revenue | 69.9 | 69.4 | 86.3 | ||
Segment operating income (loss) margin percentage | 3.7 % | (1.0) % | 9.4 % | ||
Northeast/Mid-Con | |||||
Operating (loss) income | (2.5) | 2.4 | 12.6 | ||
Revenue | 48.9 | 59.7 | 81.3 | ||
Segment operating (loss) income margin percentage | (5.1) % | 4.0 % | 15.5 % |
(1) | Segment operating income (loss) margin is defined as the quotient of segment operating income (loss) and segment revenue. |
KLX Energy Services Holdings, Inc. | |||||
Three Months Ended | |||||
June 30, 2024 | March 31, 2024 | June 30, 2023 | |||
Rocky Mountains | |||||
Adjusted EBITDA | $ 17.2 | $ 5.4 | $ 17.0 | ||
Revenue | 61.4 | 45.6 | 66.4 | ||
Adjusted EBITDA Margin Percentage | 28.0 % | 11.8 % | 25.6 % | ||
Southwest | |||||
Adjusted EBITDA | 10.4 | 6.7 | 14.8 | ||
Revenue | 69.9 | 69.4 | 86.3 | ||
Adjusted EBITDA Margin Percentage | 14.9 % | 9.7 % | 17.1 % | ||
Northeast/Mid-Con | |||||
Adjusted EBITDA | 6.4 | 10.2 | 18.0 | ||
Revenue | 48.9 | 59.7 | 81.3 | ||
Adjusted EBITDA Margin Percentage | 13.1 % | 17.1 % | 22.1 % |
(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. | |||||
Three Months Ended | |||||
June 30, 2024 | March 31, 2024 | June 30, 2023 | |||
Consolidated net (loss) income | $ (8.0) | $ (22.2) | $ 11.4 | ||
Bargain purchase gain | — | — | 1.2 | ||
Impairment and other charges | 0.1 | — | — | ||
One-time costs(1) | 1.4 | 2.3 | 0.5 | ||
Adjusted Net (Loss) Income | $ (6.5) | $ (19.9) | $ 13.1 | ||
Diluted weighted average common shares | 16.2 | 16.1 | 16.1 | ||
Adjusted Diluted (Loss) Earnings per share(2) | $ (0.40) | $ (1.24) | $ 0.81 |
* | Previously announced quarterly numbers may not sum to the year-end total due to rounding. |
(1) | The one-time costs during the second quarter of 2024 relate to professional services and impairment and other charges. |
(2) | 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. | |||||
Three Months Ended | |||||
June 30, 2024 | March 31, 2024 | June 30, 2023 | |||
Net cash flow provided by (used in) operating activities | $ 22.2 | $ (10.8) | $ 60.0 | ||
Capital expenditures | (15.3) | (13.5) | (16.2) | ||
Proceeds from sale of property and equipment | 3.3 | 3.3 | 3.5 | ||
Levered Free Cash Flow | 10.2 | (21.0) | 47.3 | ||
Add: Interest expense, net | 9.2 | 8.9 | 8.5 | ||
Unlevered Free Cash Flow | $ 19.4 | $ (12.1) | $ 55.8 |
KLX Energy Services Holdings, Inc. | |||||
As of | |||||
June 30, 2024 | March 31, 2024 | December 31, 2023 | |||
Current assets | $ 251.3 | $ 253.6 | $ 290.3 | ||
Less: Cash | 86.9 | 84.9 | 112.5 | ||
Net current assets | 164.4 | 168.7 | 177.8 | ||
Current liabilities | 151.7 | 147.3 | 164.1 | ||
Less: Accrued interest | 4.6 | 11.4 | 4.6 | ||
Less: Operating lease obligations | 7.0 | 7.0 | 6.9 | ||
Less: Finance lease obligations | 17.9 | 19.9 | 22.0 | ||
Net current liabilities | 122.2 | 109.0 | 130.6 | ||
Net Working Capital | $ 42.2 | $ 59.7 | $ 47.2 |
KLX Energy Services Holdings, Inc. | |||||
As of | |||||
June 30, 2024 | March 31, 2024 | December 31, 2023 | |||
Total Debt | $ 284.9 | $ 284.6 | $ 284.3 | ||
Cash | 86.9 | 84.9 | 112.5 | ||
Net Debt | $ 198.0 | $ 199.7 | $ 171.8 |
(1) | Net Debt is defined as total debt less cash and cash equivalents. |
KLX Energy Services Holdings, Inc. | |||||
As of | |||||
June 30, 2024 | March 31, 2024 | December 31, 2023 | |||
Adjusted EBITDA | $ 27.0 | $ 12.0 | $ 23.0 | ||
Multiply by four quarters | 4 | 4 | 4 | ||
Annualized Adjusted EBITDA | 108.0 | 48.0 | 92.0 | ||
Net Debt | 198.0 | 199.7 | 171.8 | ||
Net Leverage Ratio | 1.8 | 4.2 | 1.9 |
(1) | Net Leverage Ratio is defined as Net Debt divided by Annualized Adjusted EBITDA. |
View original content:https://www.prnewswire.com/news-releases/klx-energy-services-holdings-inc-reports-second-quarter-2024-results-302217174.html
SOURCE KLX Energy Services Holdings, Inc.
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