Superior Drilling Products Reports Fourth Quarter and Full Year 2023 Results
- The acquisition deal with Drilling Tools International Corp. is valued at around $32.2 million.
- SDPI shareholders have the option to receive $1.00 in cash or 0.313 shares of DTI stock per SDPI share.
- The merger with DTI is expected to drive more value for shareholders and stakeholders by combining patented technology and manufacturing capabilities with DTI's sales and marketing strength.
- The deal is set to close in the third quarter of 2024, offering expanded opportunities for employees and enhancing growth prospects.
- Fourth-quarter 2023 revenue review shows a decline in North America revenue related to tool sales, impacted by lower drilling rig activity.
- International revenue grew by 9% in the fourth quarter as the Company expands operations in the Middle East market.
- Operating results for the fourth quarter indicate a net loss of $273,000, with adjusted EBITDA declining by 44% compared to the previous quarter.
- Full-year 2023 review highlights a 9.8% increase in total revenue, with operating income decreasing by 8.2%.
- SG&A expenses increased by 32% in 2023, mainly due to international expansion and legal expenses related to patent infringement lawsuits.
- Net income for 2023 included a $6.4 million release of deferred tax asset valuation allowance.
- Cash generated by operations in 2023 was $3.2 million, with cash balance at year-end reaching $2.7 million.
- None.
Insights
The acquisition of Superior Drilling Products, Inc. (SDP) by Drilling Tools International Corp. (DTI) for approximately $32.2 million is a significant transaction within the drilling tool technology sector. The valuation and payment structure, offering SDP shareholders a choice between cash and stock, reflect a strategic move to align interests and potentially offer upside through DTI's stock performance. The transaction is expected to close in the third quarter of 2024, indicating a future integration phase that could yield synergies and enhanced market positioning.
SDP's financial results for the fourth quarter and full year of 2023 show a mixed performance with a year-over-year revenue decrease of 18.7% for the quarter yet a full-year revenue increase of 9.8%. The significant net income for the fourth quarter, primarily due to the release of a $6.4 million deferred tax asset valuation allowance, skews the profitability picture and is not indicative of operational performance. Adjusted EBITDA, a non-GAAP measure that provides a clearer view of operating profitability, declined both quarterly and annually. This suggests operational challenges, potentially justifying the acquisition as a strategic move to strengthen the company's market position and financial health.
The decline in North American revenue for SDP can be attributed to lower drilling rig activity and the timing of orders, which is a concern given North America's contribution of approximately 85% to total revenue. However, international growth, particularly in the Middle East, is a positive indicator of the company's successful international expansion strategy. The increase in international rig count and the 41% growth in international revenue for the full year underscore the potential for further international market penetration.
Looking at the industry, the decline in North American rig count and the associated impact on demand for SDP's services need to be monitored closely as they could indicate broader market trends. The capital expenditures in the Middle East and the opening of a new service and technology center suggest a strategic pivot towards emerging markets, which could be a key growth driver in the face of North American market volatility.
The definitive agreement for DTI's acquisition of SDP will involve complex legal considerations, particularly regarding the mechanics of the share conversion and cash consideration. The election, proration and adjustment mechanics as outlined in the agreement will require careful navigation to ensure equitable treatment of shareholders. Furthermore, the increase in SG&A expenses due to legal fees associated with international expansion and ongoing patent infringement litigation highlights the legal complexities inherent in global operations and intellectual property protection within the drilling technology sector.
It is also notable that the transaction's closing is contingent upon customary closing conditions, which may include regulatory approvals and shareholder consent. The legal framework of the acquisition, once completed, will have implications for corporate governance, compliance and the integration of operations across different jurisdictions.
Entered into a definitive agreement to be acquired by Drilling Tools International Corp.
Troy Meier, Chairman and CEO, commented, “We are excited to merge with DTI. We have a long history working with them as our North American distributor and believe that together we can drive more value for our shareholders and broader stakeholders. The combination of our patented technology and cutting-edge manufacturing capabilities with DTI’s powerful sales and marketing will enable us to accelerate our growth and bring our drilling solutions to more customers in more parts of the world.
“Ultimately, we believe this transaction will provide our employees with expanded opportunities in a larger organization, allow us to continue to deliver the high-value services and solutions that our customers have come to expect, provide enhanced scale and management depth to accelerate growth and deliver value to our stockholders.”
Fourth Quarter 2023 Revenue Review (See at “Definitions” the composition of product/service revenue categories.)
| ($ in thousands) | December 31, 2023 |
September 30, 2023 |
December 31, 2022 |
Change Sequential |
Change Year/Year |
|||||||||
$ |
3,639 |
$ |
4,469 |
$ |
4,529 |
(18.6 |
)% |
(19.6 |
)% |
|||||
| International |
|
633 |
|
583 |
|
726 |
8.7 |
% |
(12.7 |
)% |
||||
| Total Revenue | $ |
4,273 |
$ |
5,052 |
$ |
5,254 |
(15.4 |
)% |
(18.7 |
)% |
||||
| Tool (DNR) Revenue | $ |
2,512 |
$ |
3,256 |
$ |
3,348 |
(22.9 |
)% |
(25.0 |
)% |
||||
| Contract Services |
|
1,761 |
|
1,796 |
|
1,906 |
(1.9 |
)% |
(7.6 |
)% |
||||
| Total Revenue | $ |
4,273 |
$ |
5,052 |
$ |
5,254 |
(15.4 |
)% |
(18.7 |
)% |
||||
The Company’s
International revenue grew
For the fourth quarter of 2023,
Fourth Quarter 2023 Operating Results
| ($ in thousands, except per share amounts) | December 31, 2023 |
September 30, 2023 |
December 31, 2022 |
Change Sequential |
Change Year/Year |
||||||||||||
| Cost of revenue | $ |
1,939 |
|
$ |
2,004 |
|
$ |
2,163 |
|
(3.3 |
)% |
(10.4 |
)% |
||||
| As a percent of sales |
|
45.4 |
% |
|
39.7 |
% |
|
41.2 |
% |
||||||||
| Selling, general & administrative | $ |
2,263 |
|
$ |
2,585 |
|
$ |
2,062 |
|
(12.5 |
)% |
9.7 |
% |
||||
| As a percent of sales |
|
53.0 |
% |
|
51.2 |
% |
|
39.2 |
% |
||||||||
| Depreciation & amortization | $ |
344 |
|
$ |
338 |
|
$ |
328 |
|
2.0 |
% |
5.0 |
% |
||||
| Total operating expenses | $ |
4,546 |
|
$ |
4,926 |
|
$ |
4,553 |
|
(7.7 |
)% |
-0.2 |
% |
||||
| Operating (loss) income | $ |
(273 |
) |
$ |
126 |
|
$ |
701 |
|
NM |
|
NM |
|
||||
| As a % of sales |
|
-6.4 |
% |
|
2.5 |
% |
|
13.3 |
% |
||||||||
| Other (expense) including income tax | $ |
5,859 |
|
$ |
(112 |
) |
$ |
(368 |
) |
NM |
|
NM |
|
||||
| Net Income | $ |
5,586 |
|
$ |
14 |
|
$ |
333 |
|
NM |
|
1576.9 |
% |
||||
| Diluted earnings per share | $ |
0.18 |
|
$ |
- |
|
$ |
0.01 |
|
||||||||
| Adjusted EBITDA¹ | $ |
439 |
|
$ |
784 |
|
$ |
1,350 |
|
(44.0 |
)% |
(67.4 |
)% |
||||
| As a % of sales |
|
10.3 |
% |
|
15.5 |
% |
|
25.7 |
% |
||||||||
1Adjusted EBITDA is a non-GAAP measure defined as earnings before interest, taxes, depreciation, and amortization, non-cash stock compensation expense, and unusual items. See the attached tables for important disclosures regarding SDP’s use of Adjusted EBITDA, as well as a reconciliation of net income to Adjusted EBITDA.
Selling, general and administrative (SG&A) expenses decreased
Net income for the 2023 fourth quarter reflected the release of
Full Year 2023 Review
| ($ in thousands, except per share amounts) | December 31, 2023 |
December 31, 2022 |
$ Change | % Change | ||||||||||
| Tool (DNR) Revenue | $ |
13,574 |
|
$ |
12,352 |
|
$ |
1,222 |
|
9.9 |
% |
|||
| Contract Services |
|
7,399 |
|
|
6,746 |
|
|
654 |
|
9.7 |
% |
|||
| Total Revenue | $ |
20,974 |
|
$ |
19,098 |
|
$ |
1,876 |
|
9.8 |
% |
|||
| Operating expenses |
|
19,197 |
|
|
17,161 |
|
|
2,036 |
|
11.9 |
% |
|||
| Operating income | $ |
1,777 |
|
$ |
1,937 |
|
$ |
(160 |
) |
(8.2 |
)% |
|||
| As a percent of sales |
|
8.5 |
% |
|
10.1 |
% |
||||||||
| Net income | $ |
7,436 |
|
$ |
1,065 |
|
$ |
6,371 |
|
598.1 |
% |
|||
| Diluted income per share | $ |
0.25 |
|
$ |
0.04 |
|
$ |
0.21 |
|
526.0 |
% |
|||
| Adjusted EBITDA(1) | $ |
4,456 |
|
$ |
4,720 |
|
$ |
(264 |
) |
(5.6 |
)% |
|||
| As a percent of sales |
|
21.2 |
% |
|
24.7 |
% |
||||||||
1Adjusted EBITDA is a non-GAAP measure defined as earnings before interest, taxes, depreciation, and amortization, non-cash stock compensation expense, and unusual items. See the attached tables for important disclosures regarding SDP’s use of Adjusted EBITDA, as well as a reconciliation of net income to Adjusted EBITDA.
Revenue in
Full year SG&A expenses increased
Net income for 2023 included the
Balance Sheet and Liquidity
Cash generated by operations was
Capital expenditures of
Total debt at year-end was
Definitions and Composition of Product/Service Revenue:
Tool (DNR) Revenue is the sum of tool sales/rental revenue and other related tool revenue, which is comprised of royalties and fleet maintenance fees.
Contract Services revenue is comprised of repair and manufacturing services for drill bits and other tools or products for customers.
About Superior Drilling Products, Inc.
Superior Drilling Products, Inc. is an innovative, cutting-edge drilling tool technology company providing cost saving solutions that drive production efficiencies for the oil and natural gas drilling industry. The Company designs, manufactures, repairs, and sells drilling tools. SDP drilling solutions include the patented Drill-N-Ream® well bore conditioning tool and the patented Strider™ oscillation system technology. In addition, SDP is a manufacturer and refurbisher of PDC (polycrystalline diamond compact) drill bits for leading oil field service companies. SDP operates a state-of-the-art drill tool fabrication facility, where it manufactures its solutions for the drilling industry, as well as customers’ custom products. The Company’s strategy for growth is to leverage its expertise in drill tool technology and innovative, precision machining in order to broaden its product offerings and solutions for the oil and gas industry.
Additional information about the Company can be found at: www.sdpi.com.
Additional Information for Superior Drilling Products, Inc. Shareholders and Where to Find It
This press release relates to a proposed acquisition of Superior Drilling Products, Inc. (“SDP”) by Drilling Tools International Corporation (“DTI”). In connection with the transaction, DTI will file a registration statement on Form S-4 which will include a document that serves as a prospectus of DTI and a proxy statement of SDP (the “joint proxy statement/prospectus”), and each party will file other relevant documents regarding the transaction with the Securities and Exchange Commission (the “SEC”). INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND OTHER RELEVANT DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY, INCLUDING THE SCHEDULE 13E-3, WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. A definitive joint proxy statement/prospectus will be sent to shareholders of SDP. Investors and security holders will be able to obtain free copies of the registration statement and the joint proxy statement/prospectus and other relevant documents filed with the SEC through the website maintained by the SEC at http://www.sec.gov. Copies of the documents filed with the SEC by DTI will be available free of charge on the DTI website at www.drillingtools.com or by contacting DTI by email at InvestorRelations@drillingtools.com or by mail at 3710 Briarpark Drive, Suite 150,
Participants in the Solicitation
DTI and SDP and their respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from the SDP shareholders in connection with the proposed transaction. Information about the directors and executive officers of DTI is set forth in its Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on March 21, 2023, its Proxy Statement for its 2023 Annual Meeting Stockholders, which was filed with the SEC on May 18, 2023 and in other documents filed with the SEC by DTI and its executive officers and directors. Information about the directors and executive officers of SDP is set forth in its Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on March 16, 2023, its Proxy Statement for its 2023 Annual Meeting Stockholders, which was filed with the SEC on June 30, 2023, its Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, which was filed with the SEC on November 14, 2023, and in other documents filed with the SEC by SDP and its executive officers and directors.
These documents can be obtained free of charge from the sources indicated above. Additional information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the joint proxy statement/prospectus and Schedule 13e-3 and other relevant materials in connection with the transaction to be filed with the SEC when they become available. Information concerning the interests of the participants in the solicitation, which may, in some cases, be different than those of SDP’s shareholders generally, will be set forth in the joint prospectus/proxy statement relating to the proposed transaction and the Schedule 13e-3 when they become available. Investors should read the proxy statement/prospectus and Schedule 13e-3 carefully before making any voting or investment decisions.
Safe Harbor Regarding Forward Looking Statements
This news release contains forward-looking statements and information that are subject to a number of risks and uncertainties, many of which are beyond our control. All statements, other than statements of historical fact included in this release, including, without limitation, statements regarding the proposed transaction, the Company’s strategy, future operations, success at developing future tools, the Company’s effectiveness at executing its business strategy and plans, financial position, estimated revenue and losses, projected costs, prospects, plans and objectives of management, and ability to outperform are forward-looking statements. The use of words “could,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “may,” “continue,” “predict,” “potential,” “project”, “forecast,” “should,” “plan or “will,” and similar expressions are intended to identify forward-looking statements, although not all forward -looking statements contain such identifying words. These statements reflect the beliefs and expectations of the Company and are subject to risks and uncertainties that may cause actual results to differ materially. These risks and uncertainties include, among other factors, the effectiveness of success at expansion in the
FINANCIAL TABLES FOLLOW
Superior Drilling Products, Inc. Consolidated Condensed Statements of Operations (unaudited) |
|||||||||||||||
Three Months Ended December 31 |
|
Twelve Months Ended December 31 |
|||||||||||||
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
| Revenue | |||||||||||||||
$ |
3,639,379 |
|
$ |
4,528,513 |
|
$ |
17,908,909 |
|
$ |
16,917,259 |
|
||||
| International |
|
633,405 |
|
|
725,623 |
|
|
3,064,642 |
|
|
2,180,428 |
|
|||
| Total Revenue | $ |
4,272,784 |
|
$ |
5,254,136 |
|
$ |
20,973,551 |
|
$ |
19,097,687 |
|
|||
| Operating cost and expenses | |||||||||||||||
| Cost of revenue | $ |
1,938,584 |
|
$ |
2,163,091 |
|
$ |
8,195,501 |
|
$ |
8,330,877 |
|
|||
| Selling, general, and administrative expenses |
|
2,262,623 |
|
|
2,062,120 |
|
|
9,643,647 |
|
|
7,326,384 |
|
|||
| Depreciation and amortization expense |
|
344,323 |
|
|
327,825 |
|
|
1,357,438 |
|
|
1,503,976 |
|
|||
| Total operating cost and expenses | $ |
4,545,530 |
|
$ |
4,553,036 |
|
$ |
19,196,586 |
|
$ |
17,161,237 |
|
|||
| Operating income |
|
(272,746 |
) |
|
701,100 |
|
|
1,776,965 |
|
|
1,936,450 |
|
|||
| Other income (expense) | |||||||||||||||
| Interest income |
|
21,024 |
|
|
12,955 |
|
|
60,950 |
|
|
26,675 |
|
|||
| Interest expense |
|
(205,007 |
) |
|
(161,917 |
) |
|
(689,449 |
) |
|
(572,624 |
) |
|||
| Other (income) |
|
(198,894 |
) |
|
- |
|
|
- |
|
|
- |
|
|||
| Other expense |
|
- |
|
|
- |
|
|
(43,000 |
) |
|
- |
|
|||
| Recovery of related party note receivable |
|
- |
|
|
- |
|
|
350,262 |
|
|
- |
|
|||
| Gain (Loss) on sale or disposition of assets |
|
(70,664 |
) |
|
(1,550 |
) |
|
(70,664 |
) |
|
- |
|
|||
| Impairment of Asset |
|
- |
|
|
(130,375 |
) |
|
- |
|
|
(130,375 |
) |
|||
| Total other (expense) |
|
(453,542 |
) |
|
(280,887 |
) |
|
(391,901 |
) |
|
(676,324 |
) |
|||
| Income before income taxes |
|
(726,288 |
) |
|
420,213 |
|
|
1,385,064 |
|
|
1,260,126 |
|
|||
| Income tax benefit (expense) |
|
6,312,108 |
|
|
(87,117 |
) |
|
6,050,981 |
|
|
(194,969 |
) |
|||
| Net income | $ |
5,585,820 |
|
$ |
333,096 |
|
$ |
7,436,045 |
|
$ |
1,065,157 |
|
|||
| Earnings per common share - basic | $ |
0.18 |
|
$ |
0.01 |
|
$ |
0.25 |
|
$ |
0.04 |
|
|||
| Weighted average common shares outstanding - basic |
|
30,391,240 |
|
|
29,245,080 |
|
|
29,698,498 |
|
|
28,643,464 |
|
|||
| Earnings per common share - diluted | $ |
0.18 |
|
$ |
0.01 |
|
$ |
0.25 |
|
$ |
0.04 |
|
|||
| Weighted average common shares outstanding - diluted |
|
30,391,240 |
|
|
29,276,716 |
|
|
29,772,498 |
|
|
28,675,100 |
|
|||
Superior Drilling Products, Inc. Consolidated Condensed Balance Sheets |
|||||||
| (unaudited) | |||||||
| December 31, 2023 | December 31, 2022 | ||||||
| ASSETS | |||||||
| Current Assets | |||||||
| Cash | $ |
2,670,626 |
|
$ |
2,158,025 |
|
|
| Accounts receivable |
|
2,670,361 |
|
|
3,241,221 |
|
|
| Prepaid expenses |
|
335,152 |
|
|
367,823 |
|
|
| Inventories |
|
2,706,491 |
|
|
2,081,260 |
|
|
| Other current assets |
|
373,587 |
|
|
140,238 |
|
|
| Total current assets |
|
8,756,217 |
|
|
7,988,567 |
|
|
| Property, plant and equipment, net |
|
11,242,251 |
|
|
8,576,851 |
|
|
| Intangible assets, net |
|
- |
|
|
69,444 |
|
|
| Right of use assets (net of amortization) |
|
451,094 |
|
|
638,102 |
|
|
| Other noncurrent assets |
|
6,587,056 |
|
|
111,519 |
|
|
| Assets held for sale |
|
- |
|
|
216,000 |
|
|
| Total assets | $ |
27,036,618 |
|
$ |
17,600,483 |
|
|
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
| Current liabilities | |||||||
| Accounts payable | $ |
1,547,619 |
|
$ |
1,043,581 |
|
|
| Accrued expenses |
|
870,060 |
|
|
891,793 |
|
|
| Accrued income tax |
|
626,455 |
|
|
351,618 |
|
|
| Current portion of operating lease liability |
|
54,034 |
|
|
44,273 |
|
|
| Current portion of financial obligation |
|
83,648 |
|
|
74,636 |
|
|
| Current portion of long-term debt, net of discounts |
|
635,273 |
|
|
1,125,864 |
|
|
| Other current liabilities |
|
- |
|
|
216,000 |
|
|
| Total current liabilities |
|
3,817,089 |
|
|
3,747,765 |
|
|
| Operating lease liability, less current portion |
|
325,480 |
|
|
523,375 |
|
|
| Long-term financial obligation, less current portion |
|
3,954,373 |
|
|
4,038,022 |
|
|
| Long-term debt, less current portion, net of discounts |
|
1,609,868 |
|
|
529,499 |
|
|
| Deferred income |
|
675,000 |
|
|
675,000 |
|
|
| Total liabilities |
|
10,381,810 |
|
|
9,513,661 |
|
|
| Shareholders’ equity | |||||||
| Common stock - |
|||||||
| 29,245,080 shares issued and outstanding |
|
30,391 |
|
|
29,245 |
|
|
| Additional paid-in-capital |
|
45,074,723 |
|
|
43,943,928 |
|
|
| Accumulated deficit |
|
(28,450,306 |
) |
|
(35,886,351 |
) |
|
| Total shareholders’ equity |
|
16,654,808 |
|
|
8,086,822 |
|
|
| Total liabilities and shareholders’ equity | $ |
27,036,618 |
|
$ |
17,600,483 |
|
|
Superior Drilling Products, Inc. Consolidated Statements of Cash Flows (unaudited) |
||||||||
Twelve Months Ended December 31, |
||||||||
|
2023 |
|
|
|
2022 |
|
||
| Cash Flows from Operating Activities | ||||||||
| Net income | $ |
7,436,045 |
|
|
1,065,157 |
|
||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization expense |
|
1,357,437 |
|
|
1,503,976 |
|
||
| Amortization of right-of-use assets |
|
211,935 |
|
|
131,093 |
|
||
| Share-based compensation expense |
|
926,639 |
|
|
873,737 |
|
||
| Loss on sale or dispositon of assets |
|
21,709 |
|
|
- |
|
||
| Loss on disposition of rental fleet |
|
48,956 |
|
|||||
| Impairment on asset held for sale |
|
- |
|
|
130,375 |
|
||
| Amortization of deferred loan cost |
|
10,618 |
|
|
18,524 |
|
||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable |
|
570,860 |
|
|
(369,289 |
) |
||
| Inventories |
|
(625,231 |
) |
|
(906,625 |
) |
||
| Prepaid expenses and other current assets |
|
(6,676,215 |
) |
|
(62,946 |
) |
||
| Accounts payable, accrued expenses, and other liabilities |
|
(363,657 |
) |
|
127,274 |
|
||
| Income Tax expense |
|
274,837 |
|
|
145,128 |
|
||
| Other current liabilities |
|
- |
|
|
216,000 |
|
||
| Deferred Income |
|
- |
|
|
675,000 |
|
||
| Net cash provided by operating activities | $ |
3,193,933 |
|
$ |
3,547,404 |
|
||
| Cash Flows From Investing Activities | ||||||||
| Purchases of property, plant and equipment |
|
(3,741,419 |
) |
|
(3,330,206 |
) |
||
| Proceeds from recovery of related party note receivable |
|
350,262 |
|
|
- |
|
||
| Net cash used in investing activities | $ |
(3,391,157 |
) |
$ |
(3,330,206 |
) |
||
| Cash Flows from Financing Activities | ||||||||
| Principal payments on debt |
|
(660,706 |
) |
|
(1,694,730 |
) |
||
| Proceeds received from debt borrowings |
|
2,072,406 |
|
|
997,134 |
|
||
| Payments on revolving loan |
|
(1,645,427 |
) |
|
(817,113 |
) |
||
| Proceeds received from revolving loan |
|
828,626 |
|
|
- |
|
||
| Payments on deferred loan costs |
|
(90,376 |
) |
|
- |
|
||
| Proceeds from exercised options |
|
6,408 |
|
|
- |
|
||
| Disgorgement of profits |
|
198,894 |
|
|
633,436 |
|
||
| Net cash used in financing activities | $ |
709,825 |
|
$ |
(881,273 |
) |
||
| Net increase (decrease) in cash |
|
512,601 |
|
|
(664,075 |
) |
||
| Cash at beginning of period |
|
2,158,025 |
|
|
2,822,100 |
|
||
| Cash at end of period | $ |
2,670,626 |
|
$ |
2,158,025 |
|
||
Superior Drilling Products, Inc. Adjusted EBITDA Reconciliation (unaudited) |
||||||||||||
| Three Months Ended | ||||||||||||
| December 31, 2023 | September 30, 2023 | December 31, 2022 | ||||||||||
| GAAP net income | $ |
5,585,820 |
|
$ |
13,839 |
|
$ |
333,096 |
|
|||
| Add back: | ||||||||||||
| Depreciation and amortization |
|
344,322 |
|
|
337,653 |
|
|
327,825 |
|
|||
| Interest expense, net |
|
183,984 |
|
|
191,213 |
|
|
148,962 |
|
|||
| Share-based compensation |
|
237,373 |
|
|
232,446 |
|
|
232,921 |
|
|||
| Net non-cash compensation |
|
88,200 |
|
|
88,200 |
|
|
88,200 |
|
|||
| Income tax (benefit) expense |
|
(6,312,108 |
) |
|
76,861 |
|
|
87,117 |
|
|||
| Recovery of Related Party Note Receivable |
|
198,894 |
|
|
(198,894 |
) |
|
- |
|
|||
| Debt termination fee |
|
- |
|
|
43,000 |
|
|
- |
|
|||
| Impairment of asset |
|
- |
|
|
- |
|
|
130,375 |
|
|||
| Employee Severance Cost |
|
42,294 |
|
|
- |
|
|
- |
|
|||
| Loss on disposition of assets |
|
70,663 |
|
|
- |
|
|
1,550 |
|
|||
| Non-GAAP adjusted EBITDA¹ | $ |
439,442 |
|
$ |
784,318 |
|
$ |
1,350,046 |
|
|||
| GAAP Revenue | $ |
4,272,784 |
|
$ |
5,052,203 |
|
$ |
5,254,136 |
|
|||
| Non-GAAP Adjusted EBITDA Margin |
|
10.3 |
% |
|
15.5 |
% |
|
25.7 |
% |
|||
| Year Ended | |||||||
| December 31, 2023 | December 31, 2022 | ||||||
| GAAP net income | $ |
7,436,045 |
|
$ |
1,065,157 |
|
|
| Add back: | |||||||
| Depreciation and amortization |
|
1,357,438 |
|
|
1,503,977 |
|
|
| Interest expense, net |
|
628,499 |
|
|
545,950 |
|
|
| Share-based compensation |
|
926,639 |
|
|
873,740 |
|
|
| Net non-cash compensation |
|
352,800 |
|
|
352,800 |
|
|
| Income tax (benefit) expense |
|
(6,050,981 |
) |
|
194,969 |
|
|
| Recovery of Related Party Note Receivable |
|
(350,262 |
) |
|
- |
|
|
| Employee Severance Cost |
|
42,294 |
|
|
- |
|
|
| Impairment of asset |
|
- |
|
|
183,452 |
|
|
| Loss on disposition of assets |
|
113,663 |
|
|
- |
|
|
| Non-GAAP adjusted EBITDA(1) | $ |
4,456,135 |
|
$ |
4,720,045 |
|
|
| GAAP Revenue | $ |
20,973,551 |
|
$ |
19,097,687 |
|
|
| Non-GAAP Adjusted EBITDA Margin |
|
21.2 |
% |
|
24.7 |
% |
|
1 Adjusted EBITDA represents net income adjusted for income taxes, interest, depreciation and amortization and other items as noted in the reconciliation table. The Company believes Adjusted EBITDA is an important supplemental measure of operating performance and uses it to assess performance and inform operating decisions. However, Adjusted EBITDA is not a GAAP financial measure. The Company’s calculation of Adjusted EBITDA should not be used as a substitute for GAAP measures of performance, including net cash provided by operations, operating income, and net income. The Company’s method of calculating Adjusted EBITDA may vary substantially from the methods used by other companies and investors are cautioned not to rely unduly on it.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240307756109/en/
For more information, contact investor relations:
Deborah K. Pawlowski / Craig P. Mychajluk
Kei Advisors LLC
716-843-3908 / 716-843-3832
dpawlowski@keiadvisors.com / cmychajluk@keiadvisors.com
Source: Superior Drilling Products, Inc.
FAQ
What is the total consideration for the acquisition deal with Drilling Tools International Corp.?
When is the expected closing date for the transaction with Drilling Tools International Corp.?
How can SDPI shareholders choose to receive consideration in the acquisition deal?
What was the percentage change in North America revenue related to tool sales in the fourth quarter of 2023?
How did international revenue perform in the fourth quarter of 2023?
What was the net income for the fourth quarter of 2023?
What was the change in operating income for full-year 2023 compared to the previous year?
How did SG&A expenses change in 2023 compared to the prior year?
What was the cash balance at the end of 2023?
What was the total debt at the end of 2023?
