Nine Energy Service Announces Third Quarter 2024 Results
Nine Energy Service reported Q3 2024 financial results with revenue of $138.2 million, representing a ~4% increase quarter-over-quarter despite a ~3% decline in US rig count. The company posted a net loss of $(10.1) million, which improved by ~28% sequentially, and adjusted EBITDA of $14.3 million, up ~47% quarter-over-quarter. Cementing revenue increased by ~12%, driven by market share gains across operating basins. Total liquidity position stood at $43.3 million as of September 30, 2024. The company expects Q4 revenue and profitability to decrease due to budget exhaustion, weather, holiday slowdowns, and lower international tool sales.
Nine Energy Service ha riportato i risultati finanziari del terzo trimestre 2024 con un fatturato di 138,2 milioni di dollari, che rappresenta un aumento di circa il 4% rispetto al trimestre precedente, nonostante un calo di circa il 3% nel numero di trivelle negli Stati Uniti. L'azienda ha registrato una perdita netta di $(10,1) milioni, che è migliorata di circa il 28% rispetto al trimestre precedente, e un EBITDA rettificato di 14,3 milioni di dollari, in aumento di circa il 47% rispetto al trimestre scorso. I ricavi da cementazione sono aumentati di circa il 12%, grazie ai guadagni di quota di mercato nei bacini operativi. La posizione di liquidità totale si attestava a 43,3 milioni di dollari al 30 settembre 2024. L'azienda prevede una diminuzione dei ricavi e della redditività nel quarto trimestre a causa dell'esaurimento del budget, delle condizioni climatiche, dei rallentamenti per le festività e delle vendite di strumenti internazionali più basse.
Nine Energy Service reportó los resultados financieros del tercer trimestre de 2024 con ingresos de 138,2 millones de dólares, lo que representa un aumento de aproximadamente el 4% con respecto al trimestre anterior a pesar de una disminución de aproximadamente el 3% en el número de plataformas de perforación en Estados Unidos. La compañía registró una pérdida neta de $(10,1) millones, lo que mejoró aproximadamente un 28% secuencialmente, y un EBITDA ajustado de 14,3 millones de dólares, en aumento de aproximadamente el 47% trimestre a trimestre. Los ingresos por cementación aumentaron aproximadamente un 12%, impulsados por ganancias de participación de mercado en las cuencas operativas. La posición de liquidez total era de 43,3 millones de dólares al 30 de septiembre de 2024. La compañía espera que los ingresos y la rentabilidad del cuarto trimestre disminuyan debido al agotamiento del presupuesto, condiciones meteorológicas, desaceleraciones por vacaciones y menores ventas de herramientas internacionales.
나인 에너지 서비스는 2024년 3분기 재무 결과를 보고했으며, 수익은 1억 3,820만 달러로, 분기 대비 약 4% 증가했으며, 미국 시추 장비 수는 약 3% 감소했습니다. 회사는 순손실이 $(1,010만) 달러로, 전분기 대비 약 28% 개선되었고, 조정된 EBITDA는 1,430만 달러로, 전분기 대비 약 47% 증가했습니다. 시멘트 매출은 약 12% 증가했으며, 이는 운영 유역에서의 시장 점유율 증가에 힘입은 것입니다. 2024년 9월 30일 기준, 총 유동성 위치는 4,330만 달러였습니다. 회사는 예산 소진, 기상 조건, 휴일 감소 및 국제 도구 판매 감소로 인해 4분기 수익과 수익성이 감소할 것으로 예상하고 있습니다.
Nine Energy Service a rapporté les résultats financiers du troisième trimestre 2024 avec des revenus de 138,2 millions de dollars, représentant une augmentation d'environ 4 % par rapport au trimestre précédent, malgré une baisse d'environ 3 % du nombre de foreuses aux États-Unis. L'entreprise a affiché une perte nette de $(10,1) millions, ce qui représente une amélioration d'environ 28 % par rapport au trimestre précédent, et un EBITDA ajusté de 14,3 millions de dollars, en hausse d'environ 47 % d'un trimestre à l'autre. Les revenus de cimentage ont augmenté d'environ 12 %, tirés par des gains de parts de marché dans les bassins d'exploitation. La position totale de liquidité s'élevait à 43,3 millions de dollars au 30 septembre 2024. L'entreprise prévoit une baisse des revenus et de la rentabilité au quatrième trimestre en raison de l'épuisement budgétaire, des conditions climatiques, des ralentissements liés aux vacances et des ventes d'outils internationales plus faibles.
Nine Energy Service hat die Finanzzahlen für das 3. Quartal 2024 veröffentlicht, mit einem Umsatz von 138,2 Millionen USD, was einem Anstieg von etwa 4% gegenüber dem Vorquartal entspricht, trotz eines Rückgangs der US-Bohrgerätezahl um etwa 3%. Das Unternehmen verzeichnete einen Nettoverlust von $(10,1) Millionen, was eine Verbesserung von etwa 28% gegenüber dem Vorquartal darstellt, sowie ein bereinigtes EBITDA von 14,3 Millionen USD, was einem Anstieg von etwa 47% im Vergleich zum Vorquartal entspricht. Die Einnahmen aus Zementierung stiegen um etwa 12%, was durch Marktanteilsgewinne in den operativen Becken vorangetrieben wurde. Die gesamte Liquiditätsposition betrug zum 30. September 2024 43,3 Millionen USD. Das Unternehmen erwartet, dass die Einnahmen und die Rentabilität im 4. Quartal aufgrund von Budgeterschöpfung, Wetterbedingungen, saisonalen Rückgängen und niedrigeren internationalen Werkzeugverkäufen sinken werden.
- Revenue increased ~4% quarter-over-quarter to $138.2 million
- Sequential quarterly net loss improved by ~28%
- Adjusted EBITDA increased ~47% quarter-over-quarter to $14.3 million
- Cementing revenue grew ~12% quarter-over-quarter
- Reported net loss of $(10.1) million in Q3 2024
- Negative cash flow from operations of $(5.9) million
- Expected decrease in Q4 revenue and profitability
- Natural gas prices remain challenging, keeping activity levels low in key basins
Insights
Nine Energy Service delivered a mixed Q3 performance with some positive operational highlights despite market headwinds. Revenue of
However, concerning metrics include:
- Net loss of
$10.1 million , though improved28% from Q2 - Negative ROIC of
-14.7% - Operating cash burn of
$5.9 million - liquidity of
$43.3 million
The oilfield services market shows diverging trends across basins. While Nine Energy has gained market share in cementing services, persistent weakness in natural gas prices continues to suppress activity in key regions like the Northeast and Haynesville. The company's asset-light model and technological differentiation provide operational flexibility, but market conditions remain challenging.
Looking ahead to 2025, management suggests potential modest improvement contingent on commodity prices and customer budget resets. However, near-term headwinds include:
- Budget exhaustion
- Seasonal slowdown
- Volatile commodity prices
- Reduced international sales
-
Increased revenue ~
4% quarter over quarter, despite the average Q3 US rig count declining by ~3% -
Sequential quarterly net loss improved and decreased by ~
28% for the third quarter of 2024 -
Sequential quarterly adjusted EBITDAA increased by ~
47% for the third quarter of 2024 -
Revenue, net loss and adjusted EBITDA of
,$138.2 million and$(10.1) million , respectively, for the third quarter of 2024$14.3 million -
Increased cementing revenue by ~
12% quarter over quarter -
Total liquidity as of September 30, 2024 of
$43.3 million
“Despite the average US rig count declining quarter over quarter, we increased our revenue by approximately
“Nine outperformed market drivers this quarter due in large part to market share gains across operating basins in our cementing division. Cementing revenue increased by approximately
“Revenue across the remaining service lines were relatively flat, however better utilization across Nine, an increase in international tool sales and cost saving initiatives helped increase profitability this quarter.”
“The market has mostly stabilized from an activity and pricing perspective, but commodity prices continue to fluctuate with global conflicts, weather and OPEC+ behavior. Natural gas prices remain challenging, keeping activity levels in basins like the Northeast and Haynesville low, impacting all of Nine’s service lines. Due to typical budget exhaustion, weather, and holiday slow-downs, as well as an expected decrease in international tool sales, we anticipate Q4 revenue and profitability to be down compared to Q3.”
“We remain positive on demand and the outlook for oil and natural gas. It is too early to provide specifics on 2025 activity levels, but if we see supportive commodity prices, in conjunction with the resetting of customer budgets, we would anticipate a moderate activity pick up in 2025 over current levels.”
“Nine is well positioned in the natural gas basins, as well as throughout the US, to capitalize on an improving market. We have seen our earnings respond significantly and quickly with increased market activity. I believe our service and commodity diversity is critical and that we are differentiated through our technology and service offerings. Our strategy of providing an asset-light business with forward-leaning technology is unchanged and we will continue to focus on increasing profitability in whatever market we are faced with.”
Operating Results
During the third quarter of 2024, the Company reported revenues of
During the third quarter of 2024, the Company reported general and administrative (“G&A”) expense of
The Company’s tax provision was approximately
Liquidity and Capital Expenditures
During the third quarter of 2024, the Company reported net cash used in operating activities of
As of September 30, 2024, Nine’s cash and cash equivalents were
As per the terms of the indenture governing Nine’s senior secured notes, the Company is required to periodically offer to repurchase such notes with a portion of any Excess Cash Flow. Nine did not generate any Excess Cash Flow, as defined in the indenture, in the most recently ended two fiscal quarters (the six-month period ended September 30, 2024). As a result, no Excess Cash Flow offer will be made to noteholders this month.
During the third quarter of 2024, the Company sold approximately 1.2 million shares of common stock under its at-the-market equity offering program, which generated approximately
ABCSee end of press release for definitions of these non-GAAP measures. These measures are intended to provide additional information only and should not be considered as alternatives to, or more meaningful than, net income (loss), gross profit or any other measure determined in accordance with GAAP. Certain items excluded from these measures 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. Our computation of these measures may not be comparable to other similarly titled measures of other companies.
Conference Call Information
The call is scheduled for Friday, November 1, 2024, at 9:00 am Central Time. Participants may join the live conference call by dialing
For those who cannot listen to the live call, a telephonic replay of the call will be available through November 15, 2024 and may be accessed by dialing
About Nine Energy Service
Nine Energy Service is an oilfield services company that offers completion solutions within
For more information on the Company, please visit Nine’s website at nineenergyservice.com.
Forward Looking Statements
The foregoing contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are those that do not state historical facts and are, therefore, inherently subject to risks and uncertainties. Forward-looking statements also include statements that refer to or are based on projections, uncertain events or assumptions. The forward-looking statements included herein are based on current expectations and entail various risks and uncertainties that could cause actual results to differ materially from those forward-looking statements. Such risks and uncertainties include, among other things, the level of capital spending and well completions by the onshore oil and natural gas industry, which may be affected by geopolitical and economic developments in the
NINE ENERGY SERVICE, INC. |
||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS) |
||||||||
(In Thousands, Except Share and Per Share Amounts) |
||||||||
(Unaudited) |
||||||||
Three Months Ended |
||||||||
September 30,
|
June 30,
|
|||||||
Revenues |
$ |
138,157 |
|
$ |
132,401 |
|
||
Cost and expenses |
||||||||
Cost of revenues (exclusive of depreciation and |
||||||||
amortization shown separately below) |
|
113,451 |
|
|
112,048 |
|
||
General and administrative expenses |
|
12,366 |
|
|
12,482 |
|
||
Depreciation |
|
6,226 |
|
|
6,602 |
|
||
Amortization of intangibles |
|
2,796 |
|
|
2,796 |
|
||
(Gain) loss on revaluation of contingent liability |
|
383 |
|
|
(118 |
) |
||
Loss on sale of property and equipment |
|
484 |
|
|
27 |
|
||
Income (loss) from operations |
|
2,451 |
|
|
(1,436 |
) |
||
Interest expense |
|
12,879 |
|
|
12,782 |
|
||
Interest income |
|
(196 |
) |
|
(154 |
) |
||
Other income |
|
(162 |
) |
|
(162 |
) |
||
Loss before income taxes |
|
(10,070 |
) |
|
(13,902 |
) |
||
Provision for income taxes |
|
73 |
|
|
139 |
|
||
Net loss |
$ |
(10,143 |
) |
$ |
(14,041 |
) |
||
Loss per share |
||||||||
Basic |
$ |
(0.26 |
) |
$ |
(0.40 |
) |
||
Diluted |
$ |
(0.26 |
) |
$ |
(0.40 |
) |
||
Weighted average shares outstanding |
||||||||
Basic |
|
39,209,798 |
|
|
35,477,154 |
|
||
Diluted |
|
39,209,798 |
|
|
35,477,154 |
|
||
Other comprehensive income (loss), net of tax |
||||||||
Foreign currency translation adjustments, net of tax of |
$ |
(9 |
) |
$ |
53 |
|
||
Total other comprehensive income (loss), net of tax |
|
(9 |
) |
|
53 |
|
||
Total comprehensive loss |
$ |
(10,152 |
) |
$ |
(13,988 |
) |
NINE ENERGY SERVICE, INC. |
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||
(In Thousands) |
|||||||
(Unaudited) |
|||||||
September 30, 2024 |
June 30,
|
||||||
Assets |
|||||||
Current assets |
|||||||
Cash and cash equivalents |
$ |
15,652 |
|
$ |
26,027 |
|
|
Accounts receivable, net |
|
79,732 |
|
|
84,398 |
|
|
Income taxes receivable |
|
615 |
|
|
679 |
|
|
Inventories, net |
|
55,833 |
|
|
59,710 |
|
|
Prepaid expenses and other current assets |
|
5,784 |
|
|
7,519 |
|
|
Total current assets |
|
157,616 |
|
|
178,333 |
|
|
Property and equipment, net |
|
73,659 |
|
|
77,057 |
|
|
Operating lease right of use assets, net |
|
37,009 |
|
|
38,456 |
|
|
Finance lease right of use assets, net |
|
27 |
|
|
48 |
|
|
Intangible assets, net |
|
82,041 |
|
|
84,837 |
|
|
Other long-term assets |
|
2,880 |
|
|
2,991 |
|
|
Total assets |
$ |
353,232 |
|
$ |
381,722 |
|
|
Liabilities and Stockholders’ Equity (Deficit) |
|||||||
Current liabilities |
|||||||
Accounts payable |
$ |
30,465 |
|
$ |
39,395 |
|
|
Accrued expenses |
|
23,070 |
|
|
32,393 |
|
|
Current portion of long-term debt |
|
- |
|
|
730 |
|
|
Current portion of operating lease obligations |
|
10,548 |
|
|
10,415 |
|
|
Current portion of finance lease obligations |
|
17 |
|
|
30 |
|
|
Total current liabilities |
|
64,100 |
|
|
82,963 |
|
|
Long-term liabilities |
|||||||
Long-term debt |
|
318,469 |
|
|
318,748 |
|
|
Long-term operating lease obligations |
|
27,091 |
|
|
28,686 |
|
|
Other long-term liabilities |
|
1,133 |
|
|
1,040 |
|
|
Total liabilities |
|
410,793 |
|
|
431,437 |
|
|
Stockholders’ equity (deficit) |
|||||||
Common stock (120,000,000 shares authorized at |
|
424 |
|
|
412 |
|
|
Additional paid-in capital |
|
805,509 |
|
|
803,215 |
|
|
Accumulated other comprehensive loss |
|
(5,025 |
) |
|
(5,016 |
) |
|
Accumulated deficit |
|
(858,469 |
) |
|
(848,326 |
) |
|
Total stockholders’ equity (deficit) |
|
(57,561 |
) |
|
(49,715 |
) |
|
Total liabilities and stockholders’ equity (deficit) |
$ |
353,232 |
|
$ |
381,722 |
|
NINE ENERGY SERVICE, INC. |
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
(In Thousands) |
|||||||
(Unaudited) |
|||||||
Three Months Ended |
|||||||
September 30,
|
June 30,
|
||||||
Cash flows from operating activities |
|||||||
Net loss |
$ |
(10,143 |
) |
$ |
(14,041 |
) |
|
Adjustments to reconcile net loss to net cash (used in) provided by operating activities |
|||||||
Depreciation |
|
6,226 |
|
|
6,602 |
|
|
Amortization of intangibles |
|
2,796 |
|
|
2,796 |
|
|
Amortization of deferred financing costs |
|
1,935 |
|
|
1,862 |
|
|
Amortization of operating leases |
|
3,317 |
|
|
3,337 |
|
|
Provision for doubtful accounts |
|
112 |
|
|
346 |
|
|
Provision for inventory obsolescence |
|
429 |
|
|
338 |
|
|
Stock-based compensation expense |
|
837 |
|
|
807 |
|
|
Loss on sale of property and equipment |
|
484 |
|
|
27 |
|
|
(Gain) loss on revaluation of contingent liability |
|
383 |
|
|
(118 |
) |
|
Changes in operating assets and liabilities, net of effects from acquisitions |
|||||||
Accounts receivable, net |
|
4,557 |
|
|
6,227 |
|
|
Inventories, net |
|
3,487 |
|
|
(3,654 |
) |
|
Prepaid expenses and other current assets |
|
1,736 |
|
|
2,279 |
|
|
Accounts payable and accrued expenses |
|
(18,653 |
) |
|
10,488 |
|
|
Income taxes receivable/payable |
|
62 |
|
|
(334 |
) |
|
Operating lease obligations |
|
(3,274 |
) |
|
(3,288 |
) |
|
Other assets and liabilities |
|
(141 |
) |
|
(780 |
) |
|
Net cash (used in) provided by operating activities |
|
(5,850 |
) |
|
12,894 |
|
|
Cash flows from investing activities |
|||||||
Proceeds from sales of property and equipment |
|
318 |
|
|
6 |
|
|
Purchases of property and equipment |
|
(3,401 |
) |
|
(2,639 |
) |
|
Net cash used in investing activities |
|
(3,083 |
) |
|
(2,633 |
) |
|
Cash flows from financing activities |
|||||||
Proceeds from revolving credit facility |
|
3,000 |
|
|
- |
|
|
Payments on revolving credit facility |
|
(5,000 |
) |
|
- |
|
|
Payments of short-term debt |
|
(730 |
) |
|
(1,075 |
) |
|
Principal payments of finance leases |
|
(13 |
) |
|
(17 |
) |
|
Payments of contingent liability |
|
(123 |
) |
|
(184 |
) |
|
Proceeds from issuance of common stock under ATM program |
|
1,469 |
|
|
6,780 |
|
|
Net cash (used in) provided by financing activities |
|
(1,397 |
) |
|
5,504 |
|
|
Impact of foreign currency exchange on cash |
|
(45 |
) |
|
25 |
|
|
Net increase (decrease) in cash and cash equivalents |
|
(10,375 |
) |
|
15,790 |
|
|
Cash and cash equivalents |
|||||||
Beginning of period |
|
26,027 |
|
|
10,237 |
|
|
End of period |
$ |
15,652 |
|
$ |
26,027 |
|
NINE ENERGY SERVICE, INC. |
||||||
RECONCILIATION OF ADJUSTED EBITDA |
||||||
(In Thousands) |
||||||
(Unaudited) |
||||||
Three Months Ended |
||||||
September 30,
|
June 30,
|
|||||
Net loss |
$ |
(10,143 |
) |
$ |
(14,041 |
) |
Interest expense |
|
12,879 |
|
|
12,782 |
|
Interest income |
|
(196 |
) |
|
(154 |
) |
Depreciation |
|
6,226 |
|
|
6,602 |
|
Amortization of intangibles |
|
2,796 |
|
|
2,796 |
|
Provision for income taxes |
|
73 |
|
|
139 |
|
EBITDA |
$ |
11,635 |
|
$ |
8,124 |
|
(Gain) loss on revaluation of contingent liability (1) |
|
383 |
|
|
(118 |
) |
Restructuring charges |
|
177 |
|
|
315 |
|
Stock-based compensation expense |
|
837 |
|
|
807 |
|
Cash award expense |
|
770 |
|
|
580 |
|
Loss on sale of property and equipment |
|
484 |
|
|
27 |
|
Adjusted EBITDA |
$ |
14,286 |
|
$ |
9,735 |
|
(1) Amounts relate to the revaluation of contingent liability associated with a 2018 acquisition. |
NINE ENERGY SERVICE, INC. |
||||||
RECONCILIATION AND CALCULATION OF ADJUSTED ROIC |
||||||
(In Thousands) |
||||||
(Unaudited) |
||||||
Three Months Ended |
||||||
September 30,
|
June 30,
|
|||||
Net loss |
$ |
(10,143 |
) |
$ |
(14,041 |
) |
Add back: |
||||||
Interest expense |
|
12,879 |
|
|
12,782 |
|
Interest income |
|
(196 |
) |
|
(154 |
) |
Restructuring charges |
|
177 |
|
|
315 |
|
Adjusted after-tax net operating income (loss) |
$ |
2,717 |
|
$ |
(1,098 |
) |
Total capital as of prior period-end: |
||||||
Total stockholders' deficit |
$ |
(49,715 |
) |
$ |
(43,314 |
) |
Total debt |
|
352,730 |
|
|
353,805 |
|
Less: cash and cash equivalents |
|
(26,027 |
) |
|
(10,237 |
) |
Total capital as of prior period-end: |
$ |
276,988 |
|
$ |
300,254 |
|
Total capital as of period-end: |
||||||
Total stockholders' deficit |
$ |
(57,561 |
) |
$ |
(49,715 |
) |
Total debt |
|
350,000 |
|
|
352,730 |
|
Less: cash and cash equivalents |
|
(15,652 |
) |
|
(26,027 |
) |
Total capital as of period-end: |
$ |
276,787 |
|
$ |
276,988 |
|
|
|
|||||
Average total capital |
$ |
276,888 |
|
$ |
288,621 |
|
ROIC |
|
-14.7 |
% |
|
-19.5 |
% |
Adjusted ROIC |
|
3.9 |
% |
|
-1.5 |
% |
NINE ENERGY SERVICE, INC. |
||||||
RECONCILIATION OF ADJUSTED GROSS PROFIT (LOSS) |
||||||
(In Thousands) |
||||||
(Unaudited) |
||||||
Three Months Ended |
||||||
September 30,
|
June 30,
|
|||||
Calculation of gross profit: |
||||||
Revenues |
$ |
138,157 |
$ |
132,401 |
||
Cost of revenues (exclusive of depreciation and |
||||||
amortization shown separately below) |
|
113,451 |
|
112,048 |
||
Depreciation (related to cost of revenues) |
|
5,791 |
|
6,139 |
||
Amortization of intangibles |
|
2,796 |
|
2,796 |
||
Gross profit |
$ |
16,119 |
$ |
11,418 |
||
Adjusted gross profit reconciliation: |
||||||
Gross profit |
$ |
16,119 |
$ |
11,418 |
||
Depreciation (related to cost of revenues) |
|
5,791 |
|
6,139 |
||
Amortization of intangibles |
|
2,796 |
|
2,796 |
||
Adjusted gross profit |
$ |
24,706 |
$ |
20,353 |
NINE ENERGY SERVICE, INC. |
|||
EXCESS CASH FLOW CALCULATION |
|||
(In Thousands) |
|||
(Unaudited) |
|||
|
|||
September 30, 2024 |
|||
Net cash provided by operating activities (1) |
$ |
7,044 |
|
Repurchases of common stock in connection with stock-based employee compensation |
|
- |
|
Capital expenditures used or useful in a Permitted Business: |
|||
Purchases of property and equipment |
|
(6,040 |
) |
Proceeds from sales of property and equipment |
|
324 |
|
Repayments of ABL Obligations |
|
834 |
|
Charges in respect of finance lease obligations |
|
(30 |
) |
Debt issuance costs |
|
- |
|
Payments on short-term debt |
|
(1,805 |
) |
Impact of foreign exchange rate on cash |
|
(20 |
) |
Contingent liability payments |
|
(307 |
) |
Excess Cash Flow |
$ |
- |
|
Excess Cash Flow % |
|
75 |
% |
Excess Cash Flow Amount |
$ |
- |
|
(1) Amount consists of the Company's consolidated operating cash flow, determined in accordance with GAAP, for the |
|||
fiscal quarter ended June 30, 2024 ( |
|||
ended September 30, 2024 ( |
|||
See the definition of Excess Cash Flow included in the Indenture filed as Exhibit 4.2 to the Current Report on Form 8-K |
|||
filed February 1, 2023 |
AAdjusted EBITDA is defined as EBITDA (which is net income (loss) before interest, taxes, and depreciation and amortization) further adjusted for (i) goodwill, intangible asset, and/or property and equipment impairment charges, (ii) transaction and integration costs related to acquisitions, (iii) fees and expenses relating to our units offering and other refinancing activities, (iv) loss or gain on revaluation of contingent liabilities, (v) loss or gain on the extinguishment of debt, (vi) loss or gain on the sale of subsidiaries, (vii) restructuring charges, (viii) stock-based compensation and cash award expense, (ix) loss or gain on sale of property and equipment, and (x) other expenses or charges to exclude certain items which we believe are not reflective of ongoing performance of our business, such as legal expenses and settlement costs related to litigation outside the ordinary course of business. Management believes adjusted EBITDA provides useful information to us and our investors regarding our financial condition and results of operations because it allows us and them 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 and helps identify underlying trends in our operations that could otherwise be distorted by the effect of impairments, acquisitions and dispositions and costs that are not reflective of the ongoing performance of our business.
BAdjusted gross profit (loss) is defined as revenues less cost of revenues excluding depreciation and amortization. This measure differs from the GAAP definition of gross profit (loss) because we do not include the impact of depreciation and amortization, which represent non-cash expenses. Our management believes adjusted gross profit (loss) provides useful information to us and our investors regarding our financial condition and results of operation and helps management evaluate our operating performance by eliminating the impact of depreciation and amortization, which we do not consider indicative of our core operating performance.
CAdjusted return on invested capital (“adjusted ROIC”) is defined as adjusted after-tax net operating profit (loss), divided by average total capital. We define adjusted after-tax net operating profit (loss), which is a non-GAAP measure, as net income (loss) plus (i) goodwill, intangible asset, and/or property and equipment impairment charges, (ii) transaction and integration costs related to acquisitions, (iii) fees and expenses relating to our units offering and other refinancing activities, (iv) interest expense (income), (v) restructuring charges, (vi) loss (gain) on the sale of subsidiaries, (vii) loss (gain) on extinguishment of debt, and (viii) the provision (benefit) for deferred income taxes. We define total capital as book value of equity (deficit) plus the book value of debt less balance sheet cash and cash equivalents. We compute and use the average of the current and prior period-end total capital in determining adjusted ROIC. Management believes adjusted ROIC provides useful information to us and our investors regarding our financial condition and results of operations because it quantifies how well we generate operating income relative to the capital we have invested in our business and illustrates the profitability of a business or project taking into account the capital invested, and management uses adjusted ROIC to assist them in capital resource allocation decisions and in evaluating business performance.
View source version on businesswire.com: https://www.businesswire.com/news/home/20241031217756/en/
Nine Energy Service Investor Contact:
Heather Schmidt
Vice President, Strategic Development, Investor Relations and Marketing
(281) 730-5113
investors@nineenergyservice.com
Source: Nine Energy Service, Inc.
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