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Yahoo
03-06-2025
- Business
- Yahoo
National Energy Services Reunited Corp. Reports First Quarter Financial Results
Revenue for the quarter ended March 31, 2025, is $303.1 million, growing 2.1% year-over-year Net income for the quarter ended March 31, 2025, is $10.4 million, growing 4.1% year-over-year Adjusted EBITDA (a non-GAAP measure)* for the quarter ended March 31, 2025, is $62.5 million, as compared to $64.2 million for the quarter ended March 31, 2024 Diluted Earnings per Share (EPS) for the quarter ended March 31, 2025, is $0.11, growing 10.0% year-over-year Operating cash flow for the three months ended March 31, 2025, is $20.5 million HOUSTON, TX / / June 3, 2025 / National Energy Services Reunited Corp. ("NESR" or the "Company") (NASDAQ:NESR)(NASDAQ:NESRW), a national, industry-leading provider of integrated energy services in the Middle East and North Africa ("MENA") region, today reported its financial results as of and for the three months ended March 31, 2025. The Company posted the following results for the periods presented: Three Months Ended Variance (in thousands except per share amounts and percentages) March 31, 2025 December 31, 2024 March 31, 2024 Sequential Year-over-year Revenue $ 303,102 $ 343,682 $ 296,848 (11.8 )% 2.1 % Net income 10,391 26,837 9,982 (61.3 )% 4.1 % Adjusted net income (non-GAAP)* 12,963 28,140 14,046 (53.9 )% (7.7 )% Adjusted EBITDA (non-GAAP)* 62,463 87,219 64,216 (28.4 )% (2.7 )% Diluted EPS 0.11 0.28 0.10 (60.7 )% 10.0 % Adjusted Diluted EPS (non-GAAP)* 0.14 0.30 0.15 (53.3 )% (6.7 )% *The Company presents its financial results in accordance with generally accepted accounting principles in the United States of America ("GAAP"). However, management believes that using additional non-GAAP measures will enhance the evaluation of the profitability of the Company and its ongoing operations. Please see Tables 1, 2, 3, and 4 below for reconciliations of GAAP to non-GAAP financial measures. The Condensed Consolidated Balance Sheets, Condensed Consolidated Interim Statements of Operations, and Condensed Consolidated Interim Statements of Cash Flows are derived from the unaudited condensed consolidated interim financial statements present in our Period Report on Form 6-K as of and for the three months ended March 31, 2025. Stefan Angeli, Chief Financial Officer commented "Despite seasonal slowdowns associated with the holy month of Ramadan and continued macroeconomic uncertainty, NESR delivered solid results in Q1 2025. Revenue reached $303.1 million, representing a 2.1% increase compared to Q1 2024, and as expected, declined sequentially from Q4 2024. Adjusted EBITDA for the quarter was $62.5 million, with a margin of 20.6%, while cash flow from operations totaled $20.5 million. Owing to the strength of our recent financial results, we are pleased to report that our Net Debt to Adjusted EBITDA ratio remained below 1.0, ending the quarter at 0.93 as of March 31, 2025, a significant improvement from 1.30 at March 31, 2024. Adjusted EPS for Q1 2025 was $0.14, broadly in line with $0.15 reported in Q1 2024. Return on Capital Employed (ROCE) on a trailing twelve-month basis was 11.3%. Operational execution across the region remained strong throughout the quarter, underpinned by continued improved processes, streamlined procedures, and reinforced internal controls. These enhancements have transformed our back-office operations and played a significant role in driving our performance. In spite of global economic headwinds, conditions in the MENA region remain supportive of growth, and NESR remains firmly focused on its core strategic priorities: delivering profitable revenue growth, enhancing execution efficiency, commercializing new technology, and improving debt reduction and working capital efficiency to support long-term financial performance. On behalf of management, I would like to express our sincere gratitude to our entire workforce for their outstanding efforts in delivering these results, and to our directors, shareholders, and banking partners for their continued trust and unwavering support. We believe the path forward holds significant opportunity, and we remain confident in our ability to deliver." Sherif Foda, Chairman and Chief Executive Officer, commented, "Firstly, I would like to express my sincere appreciation to our field teams for their unwavering commitment, exceptional service quality, and dedication to our valued customers during the quarter, especially in light of the holiday period and geopolitical headwinds in recent months. We take pride in operating within the strongest geographic region globally for upstream activity and despite recent declines in commodity prices, we remain confident in our continued growth trajectory. Much like our successful execution during the COVID-19 pandemic in 2020 and 2021, we are once again investing countercyclically, positioning ourselves for opportunities in the short, medium, and long term. With multiple recent contract awards across key countries, we anticipate solid performance in both 2025 and 2026. We are also accelerating the deployment of advanced technologies across our footprint and are especially encouraged by the momentum in our NEDA portfolio. This progress signals a major opportunity in unlocking value in the water and mineral sectors, an area we are truly excited about." Net Income and Adjusted Net Income Results For the quarter ended March 31, 2025, the Company reported net income of $10.4 million, an increase of $0.4 million compared to the same period last year. This improvement was primarily driven by increased rig assignments in Saudi Arabia and higher contributions from the ROYA™ advanced directional drilling platform, partially offset by the seasonal slowdown in project activity during the holy month of Ramadan. Adjusted net income for the quarter ended March 31, 2025, was $13.0 million, which includes adjustments totaling $2.6 million (collectively, 'Total Charges and Credits impacting Adjusted Net Income and Adjusted Diluted EPS'). These adjustments primarily relate to expenditures aimed at remediating the Company's material weaknesses and impairment charges, somewhat counterbalanced by releases from litigation reserves and current expected credit loss provisions. A complete list of the adjusting items and the associated reconciliation from GAAP has been provided in Table 1 below in the section entitled "Reconciliation of Net Income and Adjusted Net Income." The Company reported $0.11 of diluted EPS for the quarter ended March 31, 2025. Adjusted for the impact of Total Charges and Credits impacting Adjusted Net Income and Adjusted Diluted EPS, Adjusted Diluted EPS, a non-GAAP measure described in Table 1 below, for the quarter ended March 31, 2025, was $0.14. Adjusted EBITDA Results The Company generated Adjusted EBITDA of $62.5 million for the quarter ended March 31, 2025, representing a decrease of 2.7% year-over-year. Adjusted EBITDA includes adjustments totaling $2.6 million (referred to as 'Total Charges and Credits impacting Adjusted EBITDA'), which represent components of the Total Charges and Credits impacting Adjusted Net Income and Adjusted Diluted EPS that are not related to interest, taxes, or depreciation and amortization. As referenced above, a detailed list of these adjusting items and the corresponding GAAP reconciliation is provided in Table 1. The Company reported the following financial results for the periods presented. (in thousands) Quarter endedMarch 31, 2025 Quarter endedDecember 31, 2024 Quarter endedMarch 31, 2024 Revenue $ 303,102 $ 343,682 $ 296,848 Adjusted EBITDA $ 62,463 $ 87,219 $ 64,216 Balance Sheet Cash and cash equivalents are $78.7 million as of March 31, 2025, compared to $108.0 million as of December 31, 2024. Free cash flow, a non-GAAP measure, was negative $9.6 million for the three months ended March 31, 2025, compared to $31.2 million for the same period in 2024. The decline was primarily driven by seasonal increases in working capital during the holy month of Ramadan, mitigated in part by lower capital expenditures year-over-year. As of March 31, 2025, total debt stood at $366.3 million, with $127.7 million classified as short-term, compared to $382.8 million and $128.5 million, respectively, as of December 31, 2024. Net Debt (a non-GAAP measure), defined as the sum of current installments of long-term debt, short-term borrowings, and long-term debt, less cash and cash equivalents, totaled $287.6 million at March 31, 2025, up from $274.9 million at year-end 2024. The increase in Net Debt was primarily due to a decrease in cash, despite long-term debt repayments made during the quarter. A reconciliation of the comparable GAAP measures to Net Debt is provided in Table 4 below, entitled "Reconciliation to Net Debt." About National Energy Services Reunited Corp. Founded in 2017, NESR is one of the largest national oilfield services providers in the MENA and Asia Pacific regions. With over 6,000 employees, representing more than 60 nationalities in 16 countries, the Company helps its customers unlock the full potential of their reservoirs by providing Production Services such as Hydraulic Fracturing, Cementing, Coiled Tubing, Filtration, Completions, Stimulation, Pumping and Nitrogen Services. The Company also helps its customers to access their reservoirs in a smarter and faster manner by providing Drilling and Evaluation Services such as Drilling Downhole Tools, Directional Drilling, Fishing Tools, Testing Services, Wireline, Slickline, Drilling Fluids and Rig Services. Conference Call A conference call is scheduled for 8:00 AM ET on June 3, 2025, to discuss the financial results. Investors, analysts and members of the media interested in listening to the conference call are encouraged to participate by dialing in to the U.S. toll-free line at 1-877-407-0890 or the international line at 1-201-389-0918, approximately 10 minutes prior to the start of the call. A live, listen-only earnings webcast will also be broadcast simultaneously under the "Investors" section of the Company's website at Following the end of the conference call, a replay will be available after the event under the "Investors" section of the Company's website. Forward-Looking Statements This communication contains forward-looking statements (as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended). Any and all statements contained in this communication that are not statements of historical fact, may be deemed forward-looking statements. Terms such as "may," "might," "would," "should," "could," "project," "estimate," "predict," "potential," "strategy," "anticipate," "attempt," "develop," "plan," "help," "believe," "continue," "intend," "expect," "future," and terms of similar import (including the negative of any of these terms) may identify forward-looking statements. However, not all forward-looking statements may contain one or more of these identifying terms. Forward-looking statements in this communication may include, without limitation, the plans and objectives of management for future operations, projections of income or loss, earnings or loss per share, capital expenditures, dividends, capital structure or other financial items, the Company's future financial performance, expansion plans and opportunities, completion and integration of acquisitions, and the assumptions underlying or relating to any such statement. The forward-looking statements are not meant to predict or guarantee actual results, performance, events or circumstances and may not be realized because they are based upon the Company's current projections, plans, objectives, beliefs, expectations, estimates and assumptions and are subject to a number of risks and uncertainties and other influences, many of which the Company has no control over including the impact of the extent of any material weakness or significant deficiencies in our internal control over financial reporting and any action taken by the Securities and Exchange Commission (the "SEC") including potential fines or penalties arising out of the SEC inquiry. Actual results and the timing of certain events and circumstances may differ materially from those described by the forward-looking statements as a result of these risks and uncertainties. Factors that may influence or contribute to the accuracy of the forward-looking statements or cause actual results to differ materially from expected or desired results may include, without limitation: catastrophic events, the level of capital spending by our customers, political, market, financial and regulatory risks, including those related to the geographic concentration of our operations and customers, our operations, including maintenance, upgrades and refurbishment of our assets, may require significant capital expenditures, which may or may not be available to us, operating hazards inherent in our industry and the ability to secure sufficient indemnities and insurance, our ability to successfully integrate acquisitions, competition, including for capital and technological advances, and other risks and uncertainties set forth in the Company's most recent Annual Report on Form 20-F filed with the SEC. You are cautioned not to place undue reliance on forward-looking statements because of the risks and uncertainties related to them and to the risk factors. The Company disclaims any obligation to update the forward-looking statements contained in this communication to reflect any new information or future events or circumstances or otherwise, except as required by law. You should read this communication in conjunction with other documents which the Company may file or furnish from time to time with the SEC. The preliminary financial results for the Company as of and for the three months ended March 31, 2025, included in this press release represent the most current information available to management. The Company's actual results when disclosed in its subsequent Periodic Reports on Form 6-K may differ from these preliminary results as a result of the completion of the Company's financial statement closing procedures, final adjustments, completion of the independent registered public accounting firm's review procedures, and other developments that may arise between now and the disclosure of the final results. NATIONAL ENERGY SERVICES REUNITED CORP. AND SUBSIDIARIESUNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS(In US$ thousands, except share data) March 31, 2025 December 31, 2024 Assets Current assets Cash and cash equivalents $ 78,695 107,956 Accounts receivable, net 164,805 137,265 Unbilled revenue 130,072 111,734 Service inventories 101,419 96,772 Prepaid assets 9,400 10,146 Retention withholdings 22,238 31,072 Other receivables 42,573 38,476 Other current assets 5,646 7,095 Total current assets 554,848 540,516 Non-current assets Property, plant and equipment, net 426,007 438,146 Intangible assets, net 61,044 65,696 Goodwill 645,096 645,095 Operating lease right-of-use assets 24,863 26,042 Other assets 57,465 58,183 Total assets $ 1,769,323 $ 1,773,678 Liabilities and equity Liabilities Accounts payable and accrued expenses 306,626 305,308 Current installments of long-term debt 67,323 68,735 Short-term borrowings 60,350 59,720 Income taxes payable 8,012 7,728 Other taxes payable 25,195 27,482 Operating lease liabilities 5,268 5,449 Other current liabilities 29,795 29,090 Total current liabilities 502,569 503,512 Long-term debt 238,651 254,387 Deferred tax liabilities 5,748 5,632 Employee benefit liabilities 33,296 31,806 Non-current operating lease liabilities 19,996 20,843 Other liabilities 48,584 49,266 Total liabilities 848,844 865,446 Equity Preferred shares, no par value; unlimited shares authorized; none issued and outstanding at March 31, 2025 and December 31, 2024, respectively - - Common stock and additional paid in capital, no par value; unlimited shares authorized; 96,352,966 and 96,045,856 shares issued and outstanding at March 31, 2025, and December 31, 2024, respectively 896,149 894,293 Retained (deficit) 24,261 13,870 Accumulated other comprehensive income 69 69 Total equity 920,479 908,232 Total liabilities and equity $ 1,769,323 $ 1,773,678 NATIONAL ENERGY SERVICES REUNITED CORP. AND SUBSIDIARIESUNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS(In US$ thousands, except share data and per share amounts) For the three-month period ended Description March 31, 2025 March 31, 2024 Revenues $ 303,102 $ 296,848 Cost of services (265,647 ) (253,906 ) Gross profit 37,455 42,942 Selling, general and administrative expenses (excluding Amortization) (11,821 ) (13,691 ) Amortization (4,693 ) (4,693 ) Operating income 20,941 24,558 Interest expense, net (8,284 ) (10,604 ) Other income, net 1,059 621 Income before income tax 13,716 14,575 Income tax expense (3,325 ) (4,593 ) Net income $ 10,391 $ 9,982 Weighted average shares outstanding: Basic 96,139,181 95,064,382 Diluted 96,710,484 95,423,850 Earnings per share: Basic $ 0.11 $ 0.11 Diluted $ 0.11 $ 0.10 NATIONAL ENERGY SERVICES REUNITED CORP. AND SUBSIDIARIESUNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS(In US$ thousands) For the three-month period ended March 31, 2025 March 31, 2024 Cash flows from operating activities: Net income $ 10,391 $ 9,982 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 36,035 33,624 Share-based compensation expense 1,856 1,349 Loss / (Gain) on disposal of assets (363 ) 2,098 Non-cash interest (income) expense (143 ) 799 Deferred tax expense (1,239 ) (1,209 ) Allowance for (reversal of) doubtful receivables (16 ) 1,641 Charges on obsolete service inventories 920 1,061 Impairments and other charges 1,118 - Other operating activities, net 38 3 Changes in operating assets and liabilities: (Increase) decrease in accounts receivable (27,524 ) (18,226 ) (Increase) decrease in unbilled revenue (18,339 ) (10,308 ) (Increase) decrease in retention withholdings 8,834 23,072 (Increase) decrease in inventories (5,567 ) 1,833 (Increase) decrease in prepaid expenses 746 930 (Increase) decrease in other current assets (2,646 ) 1,945 Change in other long-term assets and liabilities 2,137 4,459 Increase (decrease) in accounts payable and accrued expenses 15,094 24,435 Increase (decrease) in other current liabilities (847 ) (7,868 ) Net cash provided by operating activities 20,485 69,620 Cash flows from investing activities: Capital expenditures (30,124 ) (38,408 ) IPM investments (Note 2) - Proceeds from disposal of assets 637 45 Other investing activities (2,000 ) (3,000 ) Net cash used in investing activities (31,487 ) (41,363 ) Cash flows from financing activities: Proceeds from long-term debt - - Repayments of long-term debt (17,537 ) (17,936 ) Proceeds from short-term borrowings 26,841 9,757 Repayments of short-term borrowings (26,252 ) (23,792 ) Payments on capital leases (710 ) (135 ) Payments on seller-provided financing for capital expenditures (601 ) (1,050 ) Other financing activities, net - (163 ) Net cash used in financing activities (18,259 ) (33,319 ) Effect of exchange rate changes on cash - - Net increase (decrease) in cash (29,261 ) (5,062 ) Cash and cash equivalents, beginning of period 107,956 67,821 Cash and cash equivalents, end of period $ 78,695 $ 62,759 NATIONAL ENERGY SERVICES REUNITED CORP. AND SUBSIDIARIESRECONCILIATION OF NON-GAAP FINANCIAL MEASURES(Unaudited)(In US$ thousands except per share amounts) The Company uses and presents certain key non-GAAP financial measures to evaluate its business and trends, measure performance, prepare financial projections and make strategic decisions. Included in this release are discussions of earnings before interest, income tax and depreciation and amortization adjusted for certain non-recurring and non-core expenses ("Adjusted EBITDA"), net income and diluted earnings per share ("EPS") adjusted for certain non-recurring and non-core expenses ("Adjusted Net Income" and "Adjusted Diluted EPS," respectively), as well as a reconciliation of these non-GAAP measures to net income and diluted EPS, respectively, in accordance with GAAP. The Company also discusses the non-GAAP balance sheet measure of the sum of our recorded current installments of long-term debt, short-term borrowings, and long-term debt less cash and cash equivalents ("Net Debt") in this release and provides a reconciliation to the GAAP measures of cash and cash equivalents, current installments of long-term debt, short-term borrowings, and long-term debt to Net Debt. The Company also discusses Free Cash Flow reconciled to Operating Cash Flow. The Company believes that the presentation of Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted EPS provides useful information to investors in assessing its financial performance and results of operations as the Company's board of directors, management and investors use Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted EPS to compare the Company's operating performance on a consistent basis across periods by removing the effects of changes in capital structure (such as varying levels of interest expense), asset base (such as depreciation and amortization), items that do not impact the ongoing operations (transaction, integration, and startup costs) and items outside the control of its management team. Similarly, Net Debt is used by management as a liquidity measure used to illustrate the Company's debt level absent variability in cash and cash equivalents, and the Company believes that the presentation of Net Debt provides useful information to investors in assessing its financial leverage. Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted EPS should not be considered as an alternative to operating income, net income, or diluted EPS, respectively, the most directly comparable GAAP financial measures. Net Debt also should not be considered as an alternative to GAAP measures of cash and cash equivalents, current installments of long-term debt, short-term borrowings, and long-term debt. Finally, Free Cash Flow is used by management as a liquidity measure to illustrate the Company's ability to produce cash that is available to be distributed in a discretionary manner, after excluding investments in capital assets. Free Cash Flow should not be considered as an alternative to Net cash provided by (used in) operations or Net cash provided by (used in) investing activities, respectively, the most directly comparable GAAP financial measures. Non-GAAP financial measures have important limitations as analytical tools because they exclude some but not all items that affect the most directly comparable GAAP financial measure. You should not consider non-GAAP measures in isolation or as a substitute for an analysis of the Company's results as reported under GAAP. Table 1 - Reconciliation of Net Income and Diluted EPS to Adjusted Net Income and Adjusted Diluted EPS Quarter ended Quarter ended Quarter ended March 31, 2025 December 31, 2024 March 31, 2024 Net Diluted Net Diluted Net Diluted Income EPS Income EPS Income EPS Net Income $ 10,391 $ 0.11 $ 26,837 $ 0.28 $ 9,982 $ 0.10 Add/(Subtract): Charges and Credits impacting Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted EPS: Costs associated with the restatement of our 2018-2020 financial statements, including the SEC inquiry and remediation 1,488 0.02 1,480 0.02 3,370 0.04 Impairments 1,118 0.01 3,741 0.04 - - Current expected credit loss (releases) provisions (227 ) - 486 0.01 1,820 0.02 Litigation (releases) provisions (837 ) (0.01 ) 340 - - - Restructuring projects - - - - (1,126 ) (0.01 ) Other write-offs (recoveries) and provisions (release of provisions) 1,030 0.01 (958 ) (0.01 ) - - Total Charges and Credits impacting Adjusted EBITDA (1) 2,572 0.03 5,089 0.06 4,064 0.05 Add/(Subtract): Charges and Credits impacting only Adjusted Net Income and Adjusted Diluted EPS: Release of uncertain tax position - - (3,786 ) (0.04 ) - - Total Charges and Credits impacting Adjusted Net Income and Adjusted Diluted EPS (2) 2,572 0.03 1,303 0.02 4,064 0.05 Total Adjusted Net Income and Adjusted Diluted EPS $ 12,963 $ 0.14 $ 28,140 $ 0.30 $ 14,046 $ 0.15 (1) In the quarter ended March 31, 2025, Total Charges and Credits impacting Adjusted EBITDA included $1.5 million of costs associated with the restatement of our 2018-2020 financial statements, including the SEC inquiry and remediation, $1.1 million of impairments, $(0.2) million of current expected credit loss (releases) provisions, $(0.8) million of litigation (releases) provisions, and $1.0 million of other write-offs (recoveries) and provisions (release of provisions). In the quarter ended December 31, 2024, Total Charges and Credits impacting Adjusted EBITDA included $1.5 million of costs associated with the restatement of our 2018-2020 financial statements, including the SEC inquiry and remediation, $3.7 million of impairments, $0.5 million of current expected credit loss (releases) provisions, $0.3 million of litigation (releases) provisions, and $(1.0) million of other write-offs (recoveries) and provisions (release of provisions). In the quarter ended March 31, 2024, Total Charges and Credits impacting Adjusted EBITDA included $3.4 million of costs associated with the restatement of our 2018-2020 financial statements, including the SEC inquiry and remediation, $1.8 million of current expected credit loss (releases) provisions, and $(1.1) million related to restructuring projects. (2) Total Charges and Credits impacting Adjusted Net Income and Adjusted Diluted EPS for the quarter ended December 31, 2024, was $1.3 million inclusive of Total Charges and Credits impacting Adjusted EBITDA of $5.1 million, less $(3.8) million related to the release of an uncertain tax position. Table 2 - Reconciliation of Net Income to Adjusted EBITDA Quarter ended March 31, 2025 Quarter ended December 31, 2024 Quarter ended March 31, 2024 Net Income $ 10,391 $ 26,837 $ 9,982 Add: Income Taxes 3,325 3,316 4,593 Interest Expense, net 8,284 9,905 10,604 Depreciation and Amortization 37,891 42,072 34,973 Total Charges and Credits impacting Adjusted EBITDA (3) 2,572 5,089 4,064 Total Adjusted EBITDA $ 62,463 $ 87,219 $ 64,216 (3) Total Charges and Credits impacting Adjusted EBITDA are described in Table 1 above. Charges and Credits impacting Adjusted EBITDA exclude items related to interest, income tax and depreciation and amortization. Table 3 - Reconciliation of Net cash provided by (used in) operating activities to Free Cash Flow Three months ended March 31, 2025 Three months ended March 31, 2024 Net cash provided by operating activities $ 20,485 $ 69,620 Less: Capital expenditures (30,124 ) (38,408 ) Free cash flow $ (9,639 ) $ 31,212 Table 4 - Reconciliation to Net Debt As of March 31, 2025 As of December 31, 2024 As of March 31, 2024 Current installments of long-term debt $ 67,323 $ 68,735 $ 71,345 Short-term borrowings 60,350 59,720 34,912 Long-term debt 238,651 254,387 314,418 Less: Cash and cash equivalents (78,695 ) (107,956 ) (62,759 ) Net Debt $ 287,629 $ 274,886 $ 357,916 For inquiries regarding NESR, please contact: Stefan Angeli or Blake GendronNational Energy Services Reunited Corp.832-925-3777investors@ SOURCE: National Energy Services Reunited Corp View the original press release on ACCESS Newswire
Associated Press
03-06-2025
- Business
- Associated Press
National Energy Services Reunited Corp. Reports First Quarter Financial Results
HOUSTON, TX / ACCESS Newswire / June 3, 2025 / National Energy Services Reunited Corp. ('NESR' or the 'Company') (NASDAQ:NESR)(NASDAQ:NESRW), a national, industry-leading provider of integrated energy services in the Middle East and North Africa ('MENA') region, today reported its financial results as of and for the three months ended March 31, 2025. The Company posted the following results for the periods presented: *The Company presents its financial results in accordance with generally accepted accounting principles in the United States of America ('GAAP'). However, management believes that using additional non-GAAP measures will enhance the evaluation of the profitability of the Company and its ongoing operations. Please see Tables 1, 2, 3, and 4 below for reconciliations of GAAP to non-GAAP financial measures. The Condensed Consolidated Balance Sheets, Condensed Consolidated Interim Statements of Operations, and Condensed Consolidated Interim Statements of Cash Flows are derived from the unaudited condensed consolidated interim financial statements present in our Period Report on Form 6-K as of and for the three months ended March 31, 2025. Stefan Angeli, Chief Financial Officer commented 'Despite seasonal slowdowns associated with the holy month of Ramadan and continued macroeconomic uncertainty, NESR delivered solid results in Q1 2025. Revenue reached $303.1 million, representing a 2.1% increase compared to Q1 2024, and as expected, declined sequentially from Q4 2024. Adjusted EBITDA for the quarter was $62.5 million, with a margin of 20.6%, while cash flow from operations totaled $20.5 million. Owing to the strength of our recent financial results, we are pleased to report that our Net Debt to Adjusted EBITDA ratio remained below 1.0, ending the quarter at 0.93 as of March 31, 2025, a significant improvement from 1.30 at March 31, 2024. Adjusted EPS for Q1 2025 was $0.14, broadly in line with $0.15 reported in Q1 2024. Return on Capital Employed (ROCE) on a trailing twelve-month basis was 11.3%. Operational execution across the region remained strong throughout the quarter, underpinned by continued improved processes, streamlined procedures, and reinforced internal controls. These enhancements have transformed our back-office operations and played a significant role in driving our performance. In spite of global economic headwinds, conditions in the MENA region remain supportive of growth, and NESR remains firmly focused on its core strategic priorities: delivering profitable revenue growth, enhancing execution efficiency, commercializing new technology, and improving debt reduction and working capital efficiency to support long-term financial performance. On behalf of management, I would like to express our sincere gratitude to our entire workforce for their outstanding efforts in delivering these results, and to our directors, shareholders, and banking partners for their continued trust and unwavering support. We believe the path forward holds significant opportunity, and we remain confident in our ability to deliver.' Sherif Foda, Chairman and Chief Executive Officer, commented, 'Firstly, I would like to express my sincere appreciation to our field teams for their unwavering commitment, exceptional service quality, and dedication to our valued customers during the quarter, especially in light of the holiday period and geopolitical headwinds in recent months. We take pride in operating within the strongest geographic region globally for upstream activity and despite recent declines in commodity prices, we remain confident in our continued growth trajectory. Much like our successful execution during the COVID-19 pandemic in 2020 and 2021, we are once again investing countercyclically, positioning ourselves for opportunities in the short, medium, and long term. With multiple recent contract awards across key countries, we anticipate solid performance in both 2025 and 2026. We are also accelerating the deployment of advanced technologies across our footprint and are especially encouraged by the momentum in our NEDA portfolio. This progress signals a major opportunity in unlocking value in the water and mineral sectors, an area we are truly excited about.' Net Income and Adjusted Net Income Results For the quarter ended March 31, 2025, the Company reported net income of $10.4 million, an increase of $0.4 million compared to the same period last year. This improvement was primarily driven by increased rig assignments in Saudi Arabia and higher contributions from the ROYA™ advanced directional drilling platform, partially offset by the seasonal slowdown in project activity during the holy month of Ramadan. Adjusted net income for the quarter ended March 31, 2025, was $13.0 million, which includes adjustments totaling $2.6 million (collectively, 'Total Charges and Credits impacting Adjusted Net Income and Adjusted Diluted EPS'). These adjustments primarily relate to expenditures aimed at remediating the Company's material weaknesses and impairment charges, somewhat counterbalanced by releases from litigation reserves and current expected credit loss provisions. A complete list of the adjusting items and the associated reconciliation from GAAP has been provided in Table 1 below in the section entitled 'Reconciliation of Net Income and Adjusted Net Income.' The Company reported $0.11 of diluted EPS for the quarter ended March 31, 2025. Adjusted for the impact of Total Charges and Credits impacting Adjusted Net Income and Adjusted Diluted EPS, Adjusted Diluted EPS, a non-GAAP measure described in Table 1 below, for the quarter ended March 31, 2025, was $0.14. Adjusted EBITDA Results The Company generated Adjusted EBITDA of $62.5 million for the quarter ended March 31, 2025, representing a decrease of 2.7% year-over-year. Adjusted EBITDA includes adjustments totaling $2.6 million (referred to as 'Total Charges and Credits impacting Adjusted EBITDA'), which represent components of the Total Charges and Credits impacting Adjusted Net Income and Adjusted Diluted EPS that are not related to interest, taxes, or depreciation and amortization. As referenced above, a detailed list of these adjusting items and the corresponding GAAP reconciliation is provided in Table 1. The Company reported the following financial results for the periods presented. Balance Sheet Cash and cash equivalents are $78.7 million as of March 31, 2025, compared to $108.0 million as of December 31, 2024. Free cash flow, a non-GAAP measure, was negative $9.6 million for the three months ended March 31, 2025, compared to $31.2 million for the same period in 2024. The decline was primarily driven by seasonal increases in working capital during the holy month of Ramadan, mitigated in part by lower capital expenditures year-over-year. As of March 31, 2025, total debt stood at $366.3 million, with $127.7 million classified as short-term, compared to $382.8 million and $128.5 million, respectively, as of December 31, 2024. Net Debt (a non-GAAP measure), defined as the sum of current installments of long-term debt, short-term borrowings, and long-term debt, less cash and cash equivalents, totaled $287.6 million at March 31, 2025, up from $274.9 million at year-end 2024. The increase in Net Debt was primarily due to a decrease in cash, despite long-term debt repayments made during the quarter. A reconciliation of the comparable GAAP measures to Net Debt is provided in Table 4 below, entitled 'Reconciliation to Net Debt.' About National Energy Services Reunited Corp. Founded in 2017, NESR is one of the largest national oilfield services providers in the MENA and Asia Pacific regions. With over 6,000 employees, representing more than 60 nationalities in 16 countries, the Company helps its customers unlock the full potential of their reservoirs by providing Production Services such as Hydraulic Fracturing, Cementing, Coiled Tubing, Filtration, Completions, Stimulation, Pumping and Nitrogen Services. The Company also helps its customers to access their reservoirs in a smarter and faster manner by providing Drilling and Evaluation Services such as Drilling Downhole Tools, Directional Drilling, Fishing Tools, Testing Services, Wireline, Slickline, Drilling Fluids and Rig Services. Conference Call A conference call is scheduled for 8:00 AM ET on June 3, 2025, to discuss the financial results. Investors, analysts and members of the media interested in listening to the conference call are encouraged to participate by dialing in to the U.S. toll-free line at 1-877-407-0890 or the international line at 1-201-389-0918, approximately 10 minutes prior to the start of the call. A live, listen-only earnings webcast will also be broadcast simultaneously under the 'Investors' section of the Company's website at Following the end of the conference call, a replay will be available after the event under the 'Investors' section of the Company's website. Forward-Looking Statements This communication contains forward-looking statements (as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended). Any and all statements contained in this communication that are not statements of historical fact, may be deemed forward-looking statements. Terms such as 'may,' 'might,' 'would,' 'should,' 'could,' 'project,' 'estimate,' 'predict,' 'potential,' 'strategy,' 'anticipate,' 'attempt,' 'develop,' 'plan,' 'help,' 'believe,' 'continue,' 'intend,' 'expect,' 'future,' and terms of similar import (including the negative of any of these terms) may identify forward-looking statements. However, not all forward-looking statements may contain one or more of these identifying terms. Forward-looking statements in this communication may include, without limitation, the plans and objectives of management for future operations, projections of income or loss, earnings or loss per share, capital expenditures, dividends, capital structure or other financial items, the Company's future financial performance, expansion plans and opportunities, completion and integration of acquisitions, and the assumptions underlying or relating to any such statement. The forward-looking statements are not meant to predict or guarantee actual results, performance, events or circumstances and may not be realized because they are based upon the Company's current projections, plans, objectives, beliefs, expectations, estimates and assumptions and are subject to a number of risks and uncertainties and other influences, many of which the Company has no control over including the impact of the extent of any material weakness or significant deficiencies in our internal control over financial reporting and any action taken by the Securities and Exchange Commission (the 'SEC') including potential fines or penalties arising out of the SEC inquiry. Actual results and the timing of certain events and circumstances may differ materially from those described by the forward-looking statements as a result of these risks and uncertainties. Factors that may influence or contribute to the accuracy of the forward-looking statements or cause actual results to differ materially from expected or desired results may include, without limitation: catastrophic events, the level of capital spending by our customers, political, market, financial and regulatory risks, including those related to the geographic concentration of our operations and customers, our operations, including maintenance, upgrades and refurbishment of our assets, may require significant capital expenditures, which may or may not be available to us, operating hazards inherent in our industry and the ability to secure sufficient indemnities and insurance, our ability to successfully integrate acquisitions, competition, including for capital and technological advances, and other risks and uncertainties set forth in the Company's most recent Annual Report on Form 20-F filed with the SEC. You are cautioned not to place undue reliance on forward-looking statements because of the risks and uncertainties related to them and to the risk factors. The Company disclaims any obligation to update the forward-looking statements contained in this communication to reflect any new information or future events or circumstances or otherwise, except as required by law. You should read this communication in conjunction with other documents which the Company may file or furnish from time to time with the SEC. The preliminary financial results for the Company as of and for the three months ended March 31, 2025, included in this press release represent the most current information available to management. The Company's actual results when disclosed in its subsequent Periodic Reports on Form 6-K may differ from these preliminary results as a result of the completion of the Company's financial statement closing procedures, final adjustments, completion of the independent registered public accounting firm's review procedures, and other developments that may arise between now and the disclosure of the final results. NATIONAL ENERGY SERVICES REUNITED CORP. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (In US$ thousands, except share data) NATIONAL ENERGY SERVICES REUNITED CORP. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS (In US$ thousands, except share data and per share amounts) NATIONAL ENERGY SERVICES REUNITED CORP. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS (In US$ thousands) NATIONAL ENERGY SERVICES REUNITED CORP. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (Unaudited) (In US$ thousands except per share amounts) The Company uses and presents certain key non-GAAP financial measures to evaluate its business and trends, measure performance, prepare financial projections and make strategic decisions. Included in this release are discussions of earnings before interest, income tax and depreciation and amortization adjusted for certain non-recurring and non-core expenses ('Adjusted EBITDA'), net income and diluted earnings per share ('EPS') adjusted for certain non-recurring and non-core expenses ('Adjusted Net Income' and 'Adjusted Diluted EPS,' respectively), as well as a reconciliation of these non-GAAP measures to net income and diluted EPS, respectively, in accordance with GAAP. The Company also discusses the non-GAAP balance sheet measure of the sum of our recorded current installments of long-term debt, short-term borrowings, and long-term debt less cash and cash equivalents ('Net Debt') in this release and provides a reconciliation to the GAAP measures of cash and cash equivalents, current installments of long-term debt, short-term borrowings, and long-term debt to Net Debt. The Company also discusses Free Cash Flow reconciled to Operating Cash Flow. The Company believes that the presentation of Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted EPS provides useful information to investors in assessing its financial performance and results of operations as the Company's board of directors, management and investors use Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted EPS to compare the Company's operating performance on a consistent basis across periods by removing the effects of changes in capital structure (such as varying levels of interest expense), asset base (such as depreciation and amortization), items that do not impact the ongoing operations (transaction, integration, and startup costs) and items outside the control of its management team. Similarly, Net Debt is used by management as a liquidity measure used to illustrate the Company's debt level absent variability in cash and cash equivalents, and the Company believes that the presentation of Net Debt provides useful information to investors in assessing its financial leverage. Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted EPS should not be considered as an alternative to operating income, net income, or diluted EPS, respectively, the most directly comparable GAAP financial measures. Net Debt also should not be considered as an alternative to GAAP measures of cash and cash equivalents, current installments of long-term debt, short-term borrowings, and long-term debt. Finally, Free Cash Flow is used by management as a liquidity measure to illustrate the Company's ability to produce cash that is available to be distributed in a discretionary manner, after excluding investments in capital assets. Free Cash Flow should not be considered as an alternative to Net cash provided by (used in) operations or Net cash provided by (used in) investing activities, respectively, the most directly comparable GAAP financial measures. Non-GAAP financial measures have important limitations as analytical tools because they exclude some but not all items that affect the most directly comparable GAAP financial measure. You should not consider non-GAAP measures in isolation or as a substitute for an analysis of the Company's results as reported under GAAP. Table 1 - Reconciliation of Net Income and Diluted EPS to Adjusted Net Income and Adjusted Diluted EPS Table 2 - Reconciliation of Net Income to Adjusted EBITDA Table 3 - Reconciliation of Net cash provided by (used in) operating activities to Free Cash Flow Table 4 - Reconciliation to Net Debt For inquiries regarding NESR, please contact: Stefan Angeli or Blake Gendron National Energy Services Reunited Corp. 832-925-3777 [email protected] SOURCE: National Energy Services Reunited Corp press release
Associated Press
15-05-2025
- Business
- Associated Press
CORRECTING and REPLACING BT Brands Reports First Quarter 2025 Results
MINNETONKA, Minn.--(BUSINESS WIRE)--May 15, 2025-- Please replace the release with the following corrected version to replace the second bullet point and the Condensed Consolidated Balance Sheets table. The updated release reads: BT BRANDS REPORTS FIRST QUARTER 2025 RESULTS BT Brands, Inc. (Nasdaq: BTBD and BTBDW), today reported its financial results for the first quarter, the thirteen weeks ending March 30, 2025. Including our 41.7% ownership of Bagger Dave's Burger Tavern with five locations (OTCMarkets: BDVB), BT Brands currently operates a total of fifteen restaurants comprising the following: Highlights and recent activities include: Gary Copperud, the Company's Chief Executive Officer, said, 'The first quarter is typically slower for our Burger Time and Pie in the Sky businesses; that said, we were pleased to see improvement in our operating performance during the first quarter of 2025 reflecting a number of steps to reduce costs and improve performance in all of our businesses including our decision to close two underperforming locations. As we look forward to the balance of 2025, we are focused on continuing our efforts to improve restaurant profitability. Kenneth Brimmer, CFO, added that while we are not giving specific earnings guidance for the year, our current plan shows a return to overall profitability for fiscal 2025. Fiscal 2025 Outlook: Because of the uncertain nature of restaurant performance and the evolving character of our Company and because of continuing uncertainty surrounding the overall economy as consumers have become more price sensitive, impacts of supply chain constraints, and inflationary pressures relating to many aspects of our business, the Company is not at this point, providing a financial forecast for fiscal 2025. About BT Brands Inc.: BT Brands, Inc. (BTBD and BTBDW) owns and operates a fast-food restaurant chain called Burger Time in North Dakota, South Dakota and Minnesota. In addition, the Company owns the Pie In The Sky Coffee and Bakery in Woods Hole, Massachusetts, Florida, Keegan's Seafood Grille near Clearwater, Florida and Schnitzel Haus in Hobe Sound, Florida. Cautionary Note Regarding Forward-Looking Statements This press release contains 'forward-looking statements' within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: 'anticipate,' 'intend,' 'plan,' 'goal,' 'seek,' 'believe,' 'project,' 'estimate,' 'expect,' 'strategy,' 'future,' 'likely,' 'may,' 'should,' 'will' and similar references to future periods. Examples of forward-looking statements include, among others, statements regarding guidance relating to net income and net income per share, expected operating results, such as revenue growth and earnings, and anticipated capital expenditures for fiscal 2025. Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise. FINANCIAL RESULTS FOLLOW: Category: Financial Category View source version on CONTACT: Contact for Further Information: Kenneth Brimmer 612-229-8811 KEYWORD: UNITED STATES NORTH AMERICA MINNESOTA INDUSTRY KEYWORD: RETAIL RESTAURANT/BAR FOOD/BEVERAGE SOURCE: BT Brands, Inc. Copyright Business Wire 2025. PUB: 05/15/2025 07:46 AM/DISC: 05/15/2025 07:46 AM
Business Wire
14-05-2025
- Business
- Business Wire
United Homes Group, Inc. Reports 2025 First Quarter Results
COLUMBIA, S.C.--(BUSINESS WIRE)--United Homes Group, Inc. (the 'Company') (NASDAQ: UHG) today announced results for the first quarter ended March 31, 2025. First Quarter 2025 Operating Results For the first quarter 2025, net income was $18.2 million, or $0.31 per diluted share, which included income from the change in fair value of derivative liabilities of $21.2 million, with that change predominantly due to changes in fair value on potential earn-out consideration due to fluctuation in the stock price during the measurement period, representing a non-cash item. The earnout consideration would be paid in common shares upon reaching certain stock price hurdles. The Company is required to record the fair value of this earnout as derivative liabilities on the Condensed Consolidated Balance Sheets and to record changes in fair value of derivative liabilities on the Condensed Consolidated Statements of Operations, in each case until UHG shares reach certain predetermined values or expiration of the five year earnout period. Net income for the first quarter 2024 was $24.9 million, or $0.44 per diluted share, which included income from the change in fair value of derivative liabilities of $26.4 million. Total Stockholders' equity for the first quarter 2025 was $87.1 million. Adjusted book value 1, which excludes the derivative liability and goodwill, was $95.7 million. 'We previously reported our first quarter sales and closings. Our sales pace began to improve during the second half of February, but given the slow sales pace in January, our closing volume was down during the quarter as we close a high proportion of homes sold during the first half of the quarter in the second half of the quarter," said Jamie Pirrello, Interim Chief Executive Officer of United Homes Group. Pirrello continued, 'We continued to make progress moving completed homes of an older design with low gross margins. Sequentially we saw meaningful improvement in sales and gross margins during the quarter. Our new home designs continue to achieve significantly higher gross margins. Our strategy of moving away from building all-spec inventory, and now offering pre-sales, is also achieving higher gross margins than our traditional spec sales. Additionally, our direct cost reduction initiative is delivering meaningful results. We expect to generate a vast majority of these savings in the second half of the year as they run through cost of sales.' Revenue, net of sales discounts, for the first quarter 2025 was $87.0 million, compared to $100.8 million in the first quarter 2024. Home closings during the first quarter 2025 were 252 compared to 311 in the first quarter 2024. Net new home orders during the first quarter 2025 were 296 compared to 384 in the first quarter 2024. ASP of 251 production-built homes (which excludes one percentage of completion home) closed during the first quarter 2025 was approximately $345,000, compared to $335,000 during the first quarter 2024 for 286 production-built homes (which excludes one percentage of completion home and 24 build to rent homes), representing a 2.9% increase. Gross profit percentage during the first quarter of 2025 was 16.2% compared to 16.0% during the first quarter 2024. The slight increase is attributable to a reduction in interest expense in cost of sales as a percentage of revenue, partially offset by an increase in incentive costs and price reductions to accelerate the sale of finished inventory. Adjusted gross profit percentage 2 in the first quarter 2025 was 18.8%, compared to 20.4% in the first quarter 2024. UHG's adjusted gross profit percentage decreased primarily due to the Company continuing to offer attractive sales incentives and price reductions to homebuyers. 'Gross margins increased 400 basis points between January and March, due in part to the closings of 23 homes that were newly refreshed plans with average gross margins of approximately 24%,' said Jack Micenko, President of United Homes Group. 'In April we closed an additional 27 redesigned homes, and as of April 30 th, we have 91 homes built with these newly refreshed plans in backlog with average gross margins of approximately 24% and another approximately 200 of these homes in various stages of construction," continued Micenko. 'Gross margins in April were stronger than the first quarter as we closed more of our higher margin refreshed plans and pre-sales,' stated Keith Feldman, Chief Financial Officer of United Homes Group. 'Our direct cost reduction initiative is actively underway, and we are seeing strong results. We have already identified over $3.5 million of direct construction cost savings this year, and we expect to see a meaningful impact on earnings related to this initiative in the second half of 2025," continued Feldman. Selling, general and administrative expenses ("SG&A") as a percentage of revenues was 18.6% in the first quarter 2025, which included $2.0 million of stock-based compensation. Excluding stock-based compensation, Adjusted SG&A 3 for the first quarter 2025 was 16.3% of revenues. Adjusted EBITDA 4 during the first quarter 2025 was $2.9 million compared to $7.3 million during the first quarter 2024. Earnings Conference Call The Company will host a conference call via live webcast for investors and other interested parties beginning at 8:30 a.m. Eastern Time on Wednesday, May 14, 2025. Interested parties can listen to the call live on the Internet under the Events & Presentations heading in the Investors section of the Company's website at Listeners should log into the website at least fifteen minutes prior to the call to download and install any necessary audio software. The call can also be accessed toll free at 800-715-9871, or 646-307-1963 for international participants, Conference ID: 4731284. Those dialing in should do so at least ten minutes prior to the start of the call. An archive of the webcast will also be available on the Company's website. About United Homes Group, Inc. The Company is a publicly traded residential builder headquartered near Columbia, SC. The Company focuses on southeastern markets with active communities in South Carolina, North Carolina and Georgia. The Company employs a land-light operating strategy with a focus on the design, construction and sale of entry-level, first, second and third move-up single-family houses. The Company principally builds detached single-family houses, and, to a lesser extent, attached single-family houses, including duplex houses and town houses. The Company seeks to operate its homebuilding business in high-growth markets, with substantial in-migrations and employment growth. Under its land-light lot operating strategy, the Company controls its supply of finished building lots through lot option contracts with third parties, related parties, and land bank partners, which provide the Company with the right to purchase finished lots after they have been developed. This land-light operating strategy provides the Company with the ability to amass a pipeline of lots without the risks associated with acquiring and developing raw land. As the Company reviews potential geographic markets into which it could expand its homebuilding business, it intends to focus on selecting markets with positive population and employment growth trends, favorable migration patterns, attractive housing affordability, low state and local income taxes, and desirable lifestyle and weather characteristics. Forward-Looking Statements Certain statements contained in this earnings release, other than historical facts, may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the 'Securities Act') and Section 21E of the Securities Exchange Act of 1934, as amended (the 'Exchange Act'). We intend for all such forward-looking statements to be covered by the applicable safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act, as applicable. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as 'may,' 'will,' 'expect,' 'intend,' 'anticipate,' 'estimate,' 'believe,' 'seek,' 'continue,' or other similar words. Any such forward-looking statements are based on current expectations, estimates and projections about the industry and markets in which we operate, and beliefs of, and assumptions made by, our management and involve uncertainties that could significantly affect our financial results. Such statements include, but are not limited to, statements about our future financial performance, strategy, expansion plans, future operations, future operating results, estimated revenues, losses, projected costs, prospects, plans and objectives of management. Such statements are subject to known and unknown risks and uncertainties, which could cause actual results to differ materially from those projected or anticipated, including, without limitation: disruption in the terms or availability of mortgage financing or an increase in the number of foreclosures in our markets; volatility and uncertainty in the credit markets and broader financial markets; a slowdown in the homebuilding industry or changes in population growth rates in our markets; shortages of, or increased prices for, labor, land or raw materials used in land development and housing construction, including due to changes in trade policies; increases in interest rates or inflationary pressures, including potential tariffs; our ability to execute our business model, including the success of our operations in new markets and our ability to expand into additional new markets; our ability to successfully integrate homebuilding operations that we acquire; our ability to realize the expected results of strategic initiatives; delays in land development or home construction resulting from natural disasters, adverse weather conditions or other events outside our control; changes in applicable laws or regulations; the outcome of any legal proceedings; our ability to continue to leverage our land-light operating strategy; the ability to maintain the listing of our securities on Nasdaq or any other exchange; and the possibility that we may be adversely affected by other economic, business or competitive factors. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release and are not intended to be a guarantee of our performance in future periods. We cannot guarantee the accuracy of any such forward-looking statements contained in this release, and we do not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. For further information regarding other risks and uncertainties associated with our business, and important factors that could cause our actual results to vary materially from those expressed or implied in such forward-looking statements, please refer to the factors listed and described under 'Management's Discussion and Analysis of Financial Condition and Results of Operations' and the 'Risk Factors' sections of the documents we file from time to time with the U.S. Securities and Exchange Commission, including, but not limited to, our Annual Report on Form 10-K and our quarterly reports on Form 10-Q, copies of which may be obtained from our website at UNITED HOMES GROUP, INC. GAAP TO NON-GAAP RECONCILIATIONS (Unaudited) Adjusted gross profit is a non-GAAP financial measure used by management of the Company as a supplemental measure in evaluating operating performance. The Company defines adjusted gross profit as gross profit excluding the effects of capitalized interest expensed in cost of sales, amortization included in homebuilding cost of sales, abandoned project costs, non-recurring remediation costs, and severance expense in cost of sales. The Company's management believes this information is meaningful because it separates the impact that capitalized interest and non-recurring costs directly expensed in cost of sales have on gross profit to provide a more specific measurement of the Company's gross profits. However, because adjusted gross profit information excludes certain balances expensed in cost of sales, which have real economic effects and could impact the Company's results of operations, the utility of adjusted gross profit information as a measure of the Company's operating performance may be limited. Other companies may not calculate adjusted gross profit information in the same manner that the Company does. Accordingly, adjusted gross profit information should be considered only as a supplement to gross profit information as a measure of the Company's performance. The following table presents a reconciliation of adjusted gross profit to the GAAP financial measure of gross profit for each of the periods indicated (in thousands, except percentages). (a) Represents expense recognized resulting from purchase accounting adjustments (b) Calculated as a percentage of revenue Expand UNITED HOMES GROUP, INC. GAAP TO NON-GAAP RECONCILIATIONS (Unaudited) Earnings before interest, taxes, depreciation and amortization, or EBITDA, and adjusted EBITDA are supplemental non-GAAP financial measures used by management of the Company. The Company defines EBITDA as net income before (i) capitalized interest expensed in cost of sales, (ii) interest expensed in other (expense) income, net, (iii) depreciation and amortization, and (iv) taxes. The Company defines adjusted EBITDA as EBITDA before stock-based compensation expense, amortization included in homebuilding cost of sales, severance expense, abandoned project costs, loss on extinguishment of Convertible Notes, change in fair value of derivative liabilities, transaction cost expense, and non-recurring remediation costs. Management of the Company believes EBITDA and adjusted EBITDA are useful because they provide a more effective evaluation of UHG's operating performance and allow comparison of UHG's results of operations from period to period without regard to UHG's financing methods or capital structure or other items that impact comparability of financial results from period to period such as fluctuations in interest expense or effective tax rates, levels of depreciation or amortization, or unusual items. EBITDA and adjusted EBITDA should not be considered as alternatives to, or more meaningful than, net income or any other measure as determined in accordance with GAAP. UHG's computations of EBITDA and adjusted EBITDA may not be comparable to EBITDA or adjusted EBITDA of other companies. The following table presents a reconciliation of EBITDA and adjusted EBITDA to the GAAP financial measure of net income for each of the periods indicated (in thousands, except percentages). Three Months Ended March 31, 2025 2024 Net income $ 18,180 $ 24,938 Interest expense in cost of sales 1,501 3,513 Interest expense in other expense, net 2,461 2,142 Depreciation and amortization 492 450 Taxes (1,245 ) (1,122 ) EBITDA $ 21,389 $ 29,921 Stock-based compensation expense 1,957 1,510 Abandoned project costs 55 — Amortization in homebuilding cost of sales (b) 681 948 Change in fair value of derivative liabilities (21,209 ) (26,380 ) Transaction cost expense — 1,225 Non-recurring remediation costs — 59 Adjusted EBITDA $ 2,873 $ 7,283 EBITDA margin (a) 24.6 % 29.7 % Adjusted EBITDA margin (a) 3.3 % 7.2 % Expand (a) Calculated as a percentage of revenue (b) Represents expense recognized resulting from purchase accounting adjustments Expand UNITED HOMES GROUP, INC. GAAP TO NON-GAAP RECONCILIATIONS (Unaudited) Adjusted selling, general and administrative expense, or adjusted SG&A, is a supplemental non-GAAP financial measure used by management of the Company. UHG defines adjusted SG&A as SG&A, excluding the effects of stock-based compensation expense, transaction cost expense, and severance expense included in SG&A. Management of UHG believes adjusted SG&A provides useful information to investors because it enables an alternative assessment of the Company's operating results in a manner that is focused on its operating performance. The following table presents a reconciliation of Adjusted SG&A to the GAAP financial measure of SG&A for the three months ended March 31, 2025 (in thousands, except percentages). Three Months Ended March 31, 2025 Selling, general and administrative expense $ 16,160 Stock-based compensation expense 1,957 Adjusted SG&A $ 14,203 SG&A % (a) 18.6 % Adjusted SG&A % (a) 16.3 % Expand (a) Calculated as a percentage of revenue Expand UNITED HOMES GROUP, INC. GAAP TO NON-GAAP RECONCILIATIONS (Unaudited) Adjusted book value is a supplemental non-GAAP financial measure used by management of the Company. UHG defines adjusted book value as total stockholders' equity (book value), excluding the effect of goodwill and derivative instruments. Management of UHG believes adjusted book value is useful to investors because it excludes the impact of purchase accounting and fair value adjustments on derivative instruments which are not expected to result in economic gain or loss. The following table presents a reconciliation of adjusted book value to the GAAP financial measure of total stockholders' equity for the period indicated (in thousands). UNITED HOMES GROUP, INC. OPERATIONAL METRICS BY MARKET $'s in millions As of March 31, 2025 As of March 31, 2024 Period Over Period % Change Market Backlog Inventory 5 Backlog Value 6 Backlog Inventory 5 Backlog Value 6 Backlog Inventory Backlog Value Coastal 42 $ 16.1 37 $ 12.3 14 % 31 % Midlands 94 33.1 132 44.1 -29 % -25 % Upstate 45 13.6 80 19.2 -44 % -29 % Rosewood 14 10.0 10 6.0 40 % 67 % Raleigh 6 2.5 3 1.9 100 % 32 % Total 201 $ 75.3 262 $ 83.5 -23 % -10 % Expand Expand 1 Adjusted book value is a non-GAAP financial measure. See 'Reconciliation of Non-GAAP Financial Measures.' 2 Adjusted gross profit percentage is a non-GAAP financial measure. See 'Reconciliation of Non-GAAP Financial Measures.' 3 Adjusted SG&A is a non-GAAP financial measure. See 'Reconciliation of Non-GAAP Financial Measures.' 4 Adjusted EBITDA is a non-GAAP financial measure. See 'Reconciliation of Non-GAAP Financial Measures.' 5 Backlog inventory consists of homes that are under a sales contract but have not closed. Backlog may be impacted by customer cancellations. 6 Backlog value is calculated as the total contract value of homes in backlog. Expand
