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Nine Energy Service Announces Third Quarter 2024 Results

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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.

Positive
  • 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
Negative
  • 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 $138.2 million exceeded guidance, showing 4% sequential growth against a declining rig count. The cementing division was particularly strong, growing 12% quarter-over-quarter.

However, concerning metrics include:

  • Net loss of $10.1 million, though improved 28% from Q2
  • Negative ROIC of -14.7%
  • Operating cash burn of $5.9 million
  • liquidity of $43.3 million
Management's Q4 outlook suggests further weakness due to seasonal factors and reduced international tool sales. The company continues to rely on equity raises through ATM offerings, having sold 5.4M shares YTD for $8.2 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, $(10.1) million and $14.3 million, respectively, for the third quarter of 2024
  • Increased cementing revenue by ~12% quarter over quarter
  • Total liquidity as of September 30, 2024 of $43.3 million

HOUSTON--(BUSINESS WIRE)-- Nine Energy Service, Inc. ("Nine" or the "Company") (NYSE: NINE) reported third quarter 2024 revenues of $138.2 million, net loss of $(10.1) million, or $(0.26) per diluted share and $(0.26) per basic share, and adjusted EBITDA of $14.3 million. The Company had provided original third quarter 2024 revenue guidance between $127.0 and $137.0 million, with actual results coming in above the provided range.

“Despite the average US rig count declining quarter over quarter, we increased our revenue by approximately 4%, with revenue coming in above the originally provided guidance,” said Ann Fox, President and Chief Executive Officer, Nine Energy Service.

“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 12% over Q2, despite a declining rig count. Our cementing team has been able to differentiate itself in the market by offering what we believe to be the most advanced cementing slurries in the industry, coupled with excellent wellsite execution.”

“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 $138.2 million, gross profit of $16.1 million and adjusted gross profitB of $24.7 million. During the third quarter, the Company generated ROIC of (14.7)% and adjusted ROICC of 3.9%.

During the third quarter of 2024, the Company reported general and administrative (“G&A”) expense of $12.4 million. Depreciation and amortization expense ("D&A") in the third quarter of 2024 was $9.0 million.

The Company’s tax provision was approximately $0.4 million year to date. The provision for 2024 is the result of the Company’s tax position in state and non-U.S. tax jurisdictions.

Liquidity and Capital Expenditures

During the third quarter of 2024, the Company reported net cash used in operating activities of $(5.9) million. Capital expenditures totaled $3.6 million during the third quarter of 2024 and totaled $11.7 million for the full year through September 30, 2024. The Company’s full-year 2024 capex guidance is $10 to $15 million.

As of September 30, 2024, Nine’s cash and cash equivalents were $15.7 million, and the Company had $27.6 million of availability under the revolving credit facility, resulting in a total liquidity position of $43.3 million as of September 30, 2024. On September 30, 2024, the Company had $50.0 million of borrowings under the revolving credit facility. On October 10, 2024, the Company repaid $3.0 million of outstanding borrowings under the revolving credit facility.

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 $1.4 million in net proceeds. For the nine months ended September 30, 2024, a total of approximately 5.4 million shares have been sold, which generated net proceeds of $8.2 million.

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 U.S. (Toll Free): (877) 524-8416 or International: (412) 902-1028 and asking for the “Nine Energy Service Earnings Call”. Participants are encouraged to dial into the conference call ten to fifteen minutes before the scheduled start time to avoid any delays entering the earnings call.

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 U.S. (Toll Free): (877) 660-6853 or International: (201) 612-7415 and entering the passcode of 13746652.

About Nine Energy Service

Nine Energy Service is an oilfield services company that offers completion solutions within North America and abroad. The Company brings years of experience with a deep commitment to serving clients with smarter, customized solutions and world-class resources that drive efficiencies. Serving the global oil and gas industry, Nine continues to differentiate itself through superior service quality, wellsite execution and cutting-edge technology. Nine is headquartered in Houston, Texas with operating facilities in the Permian, Eagle Ford, Haynesville, SCOOP/STACK, Niobrara, Barnett, Bakken, Marcellus, Utica and Canada.

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 U.S. and globally, including conflicts, instability, acts of war or terrorism in oil producing countries or regions, particularly Russia, the Middle East, South America and Africa, as well as actions by members of the Organization of the Petroleum Exporting Countries and other oil exporting nations; general economic conditions and inflation, particularly, cost inflation with labor or materials; equipment and supply chain constraints; the Company’s ability to attract and retain key employees, technical personnel and other skilled and qualified workers; the Company’s ability to maintain existing prices or implement price increases on our products and services; pricing pressures, reduced sales, or reduced market share as a result of intense competition in the markets for the Company’s dissolvable plug products; conditions inherent in the oilfield services industry, such as equipment defects, liabilities arising from accidents or damage involving our fleet of trucks or other equipment, explosions and uncontrollable flows of gas or well fluids, and loss of well control; the Company’s ability to implement and commercialize new technologies, services and tools; the Company’s ability to grow its completion tool business domestically and internationally; the adequacy of the Company’s capital resources and liquidity, including the ability to meet its debt obligations; the Company’s ability to manage capital expenditures; the Company’s ability to accurately predict customer demand, including that of its international customers; the loss of, or interruption or delay in operations by, one or more significant customers, including certain of the Company’s customers outside of the United States; the loss of or interruption in operations of one or more key suppliers; the incurrence of significant costs and liabilities resulting from litigation; cybersecurity risks; changes in laws or regulations regarding issues of health, safety and protection of the environment; and other factors described in the “Risk Factors” and “Business” sections of the Company’s most recently filed Annual Report on Form 10-K and subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof, and, except as required by law, the Company undertakes no obligation to update those statements or to publicly announce the results of any revisions to any of those statements to reflect future events or developments.

 

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,
2024

June 30,
2024

 

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 $0 and $0

$

(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,
2024

 

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 $.01 par value; 42,363,805 and 41,167,385 shares issued and outstanding at September 30, 2024 and June 30, 2024, respectively)

 

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,
2024

June 30,
2024

 

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,
2024

June 30,
2024

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,
2024

June 30,
2024

 

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,
2024

June 30,
2024

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 ($12.9 million of net cash provided by operating activities) and for the fiscal quarter

ended September 30, 2024 ($5.9 million of net cash used in operating activities)

 

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.

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.

FAQ

What was Nine Energy Service (NINE) revenue in Q3 2024?

Nine Energy Service reported revenue of $138.2 million in Q3 2024, representing a ~4% increase quarter-over-quarter.

What was NINE's net loss in Q3 2024?

Nine Energy Service reported a net loss of $(10.1) million, or $(0.26) per share, in Q3 2024.

How much did Nine Energy's cementing revenue grow in Q3 2024?

Nine Energy's cementing revenue increased by approximately 12% quarter-over-quarter in Q3 2024.

What is Nine Energy's (NINE) liquidity position as of September 30, 2024?

Nine Energy Service had a total liquidity position of $43.3 million as of September 30, 2024.

Nine Energy Service, Inc.

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