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• Content META

  Title	Nine Energy Service Announces Third Quarter 2024 Results
  ID	4414984
  External ID	7264926803
  Author	Unknown
  Published Date	Oct. 31, 2024, 4:05 p.m.
  Summary	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
  Tags	None
  URL	http://sogotradedev.websol.barchart.com/?module=topnews&storyid=29335397
  Sentiment	Negative: 0.15772    Neutral: 0.03731    Positive: 0.80497
  Relevance	0.04641

• Content Details

  Content ID	2632459
  Key	57f81465-8632-4c2f-98c7-888f4ed9e890
  Content	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. “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 profit B of $24.7 million. During the third quarter, the Company generated ROIC of (14.7)% and adjusted ROIC C 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. 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. ABC See 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. NINE ENERGY SERVICE, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS) (In Thousands, Except Share and Per Share Amounts) (Unaudited) September 30, June 30, Revenues Cost and expenses Cost of revenues (exclusive of depreciation and amortization shown separately below) General and administrative expenses Depreciation Amortization of intangibles (Gain) loss on revaluation of contingent liability Loss on sale of property and equipment Income (loss) from operations Interest expense Interest income Other income Loss before income taxes Provision for income taxes Net loss Loss per share Basic Diluted Weighted average shares outstanding Basic Diluted Other comprehensive income (loss), net of tax Foreign currency translation adjustments, net of tax of $0 and $0 Total other comprehensive income (loss), net of tax Total comprehensive loss NINE ENERGY SERVICE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In Thousands) (Unaudited) September 30, 2024 June 30, Assets Current assets Cash and cash equivalents Accounts receivable, net Income taxes receivable Inventories, net Total current assets Property and equipment, net Operating lease right of use assets, net Finance lease right of use assets, net Intangible assets, net Other long-term assets Total assets Liabilities and Stockholders' Equity (Deficit) Current liabilities Accounts payable Accrued expenses Current portion of long-term debt Current portion of operating lease obligations Current portion of finance lease obligations Total current liabilities Long-term liabilities Long-term debt Long-term operating lease obligations Other long-term liabilities Total liabilities 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) Additional paid-in capital Accumulated other comprehensive loss Accumulated deficit Total stockholders' equity (deficit) Total liabilities and stockholders' equity (deficit) 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 Adjustments to reconcile net loss to net cash (used in) provided by operating activities Depreciation Amortization of intangibles Amortization of deferred financing costs Amortization of operating leases Provision for doubtful accounts Provision for inventory obsolescence Stock-based compensation expense Loss on sale of property and equipment (Gain) loss on revaluation of contingent liability Changes in operating assets and liabilities, net of effects from acquisitions Accounts receivable, net Inventories, net Prepaid expenses and other current assets Accounts payable and accrued expenses Income taxes receivable/payable Operating lease obligations Other assets and liabilities Net cash (used in) provided by operating activities Cash flows from investing activities Proceeds from sales of property and equipment Purchases of property and equipment Net cash used in investing activities Cash flows from financing activities Proceeds from revolving credit facility Payments on revolving credit facility Payments of short-term debt Principal payments of finance leases Payments of contingent liability Proceeds from issuance of common stock under ATM program Net cash (used in) provided by financing activities Impact of foreign currency exchange on cash Net increase (decrease) in cash and cash equivalents Cash and cash equivalents Beginning of period End of period NINE ENERGY SERVICE, INC. RECONCILIATION OF ADJUSTED EBITDA (In Thousands) (Unaudited) Three Months Ended September 30, June 30, Net loss Interest expense Interest income Depreciation Amortization of intangibles Provision for income taxes EBITDA (Gain) loss on revaluation of contingent liability (1) Restructuring charges Stock-based compensation expense Cash award expense Loss on sale of property and equipment Adjusted EBITDA (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 Add back: Interest expense Interest income Restructuring charges Adjusted after-tax net operating income (loss) Total capital as of prior period-end: Total stockholders' deficit Total debt Less: cash and cash equivalents Total capital as of prior period-end: Total capital as of period-end: Total stockholders' deficit Total debt Less: cash and cash equivalents Total capital as of period-end: Average total capital ROIC Adjusted ROIC 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 Cost of revenues (exclusive of depreciation and amortization shown separately below) Depreciation (related to cost of revenues) Amortization of intangibles Gross profit Adjusted gross profit reconciliation: Gross profit Depreciation (related to cost of revenues) Amortization of intangibles Adjusted gross profit NINE ENERGY SERVICE, INC. EXCESS CASH FLOW CALCULATION (In Thousands) (Unaudited) September 30, 2024 Net cash provided by operating activities (1) 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 Proceeds from sales of property and equipment Repayments of ABL Obligations Charges in respect of finance lease obligations Debt issuance costs Payments on short-term debt Impact of foreign exchange rate on cash Contingent liability payments Excess Cash Flow Excess Cash Flow % 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 A Adjusted 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. B Adjusted 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. C Adjusted 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:
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  Citation Flow Score	53

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