Latest news with #DrillingToolsInternationalCorp
Yahoo
3 days ago
- Business
- Yahoo
Drilling Tools International to Webcast its Sidoti Small Cap Conference Investor Presentation on June 12th at 12:15 p.m. EDT
HOUSTON, June 11, 2025 /PRNewswire/ -- Drilling Tools International Corp. (NASDAQ: DTI) ("DTI" or the "Company"), a global oilfield services company that designs, engineers, manufactures and provides a differentiated, rental-focused offering of tools for use in onshore and offshore horizontal and directional drilling operations, as well as other cutting-edge solutions across the well life cycle, today announced that it will participate in the Sidoti & Company June 2025 Small-Cap Virtual Conference June 11-12, 2025. The Company will webcast its investor presentation at 12:15 PM EDT on Thursday, June 12th, and the webcast can be accessed live here: Registration is free. DTI's management will also host virtual one-on-ones with investors over the two days of the conference. A copy of the investor presentation will be accessible on the Investor Relations section of the Company's website A replay of DTI's Sidoti webcast will be archived on the Company's Events and Presentations page following the event: About Drilling Tools International Corp. DTI is a Houston, Texas based leading oilfield services company that manufactures and rents downhole drilling tools used in horizontal and directional drilling of oil and natural gas wells. With roots dating back to 1984, DTI operates from 15 service and support centers across North America and maintains 11 international service and support centers across the EMEA and APAC regions. To learn more about DTI, please visit: Contact:DTI Investor RelationsKen Dennard / Rick BlackInvestorRelations@ View original content: SOURCE Drilling Tools International Corp.
Yahoo
15-05-2025
- Business
- Yahoo
Q1 2025 Drilling Tools International Corp Earnings Call
Ken Dennard; Investor Relations; Drilling Tools International Corp R. Wayne Prejean; Chief Executive Officer, Director; Drilling Tools International Corp David Johnson; Chief Financial Officer; Drilling Tools International Corp Steve Ferazani; Analyst; Sidoti & Company Josh Jayne; Analyst; Daniel Energy Partners Operator Greetings, and welcome to the Drilling Tools International first-quarter 2025 earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Ken Dennard. Thank you. You may begin. Ken Dennard Thank you, operator, and good morning, everyone. We appreciate you joining us for Drilling Tool International's 2025 first-quarter conference call and webcast. With me today are Wayne Prejean, Chief Executive Officer; and David Johnson, Chief Financial Officer. Following my remarks, management will provide a review of first quarter results and 2025 outlook before opening the call for your questions. There will be a replay of today's call, and it will be available by webcast on the company's website at and there's also a telephonic recorded replay available until May 21. You can find information on how to access those replays in the press release from yesterday. Please note that any information reported on this call speaks of today, May 14, 2025, and therefore, you're advised that any time-sensitive information may no longer be accurate at the time of any replay listening or transcript reading. Also, comments on this call will contain forward-looking statements within the meaning of the United States federal securities laws. These forward-looking statements reflect the current views of DTI's management. However, various risks and uncertainties and contingencies could cause actual results, performance or achievements to differ materially from those expressed in the statements made by management. The listener or reader is encouraged to read its annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K to understand certain of those risks, uncertainties and contingencies. The comments today will also include certain non-GAAP financial measures, including, but not limited to, adjusted EBITDA and adjusted free cash flow. We provide these non-GAAP results for informational purposes, and they should not be considered in isolation from the most directly comparable GAAP measures. A discussion of why we believe these non-GAAP measures are useful to investors, certain limitations of using these measures and reconciliation to the most directly comparable GAAP measure can be found in our earnings release and our filings with the SEC. And now with that behind me, I'd like to turn the call over to Wayne Prejean, DTI's Chief Executive Officer. Wayne? R. Wayne Prejean Thanks, Ken, and good morning, everyone. I will provide some opening remarks before handing the call over to David to review the financials. I'll then come back and provide a few additional thoughts before we open it up for questions. We are pleased to report first quarter sequential and year-over-year revenue growth and solid adjusted EBITDA despite industry headwinds. Revenue grew 16% over last year's first quarter and was up nearly 8% over 2024 fourth quarter results. Adjusted EBITDA grew nearly 18% year over year and was flat sequentially. Our team has much to be proud of and has skillfully managed the recent volatility in commodity prices and rig counts. We have yet to experience tangible disruptions to our forecast in North America for the rental or sale of our tools. However, we do see increased volatility and uncertainty in the marketplace due to the impact of tariffs, a potential recession that could lower demand for hydrocarbons and OPEC Plus' decision to increase production among other challenges. In anticipation of when, not if these potential disruptions impact our order flow, DTI has begun executing on a two-phase strategy. We are proactively negotiating with our suppliers and our customers to ensure stability and profitability. We are implementing a multilevel internal cost reduction program. Phase 1 implemented in Q2 will result in an estimated $6 million in annual cost reductions. Both David and I, along with our entire management team, have decades of experience working through multiple commodity cycles and prudently rightsizing the business when demand for our products and services changes. The anticipated rig count drop in the US will challenge all service providers. I am confident we will prove to the investment community and shareholders our ability to sustain solid EBITDA and free cash flow in the face of volatility. While we cannot control global economic forces, we do believe that our input costs, our cost of goods are strategically positioned to minimize the increase and the expenditures associated with any near-term tariff risk for three reasons. Should the industry experience a significant reduction in rig count, DTI can quickly curtail planned growth CapEx. DTI has a strong and diverse manufacturing base in North America. In addition to manufacturing for our own consumption, DTI already sources a large amount of made in America steel. And our international footprint and diverse supply chain provides us flexibility in the face of uncertainty and exposure to other concentrations of rigs that may not lay down as quickly as US shale producers. So based on this volatility and uncertainty, we are proactively adjusting our annual revenue, adjusted EBITDA and adjusted free cash flow guidance ranges for 2025. David will discuss our updated guidance in his formal remarks. We remain committed to identifying future cost reduction opportunities and maintaining operational agility to quickly respond to this challenging environment. furthering our mission to enhance shareholder value. Also related to our capital deployment strategy, our Board of Directors has unanimously approved a share buyback authorization. This authorization is up to $10 million of buybacks. We believe our undervalued stock price presents one of the most compelling return on investment opportunities to deploy our capital. David will now take you through the first quarter financials and discuss our 2025 outlook updates in more detail. David? David Johnson Thanks, Wayne. In yesterday's earnings release, we provided a detailed first quarter financial tables, so I'll use this time to offer further insight into specific financial metrics. Despite continued rig count softness and market choppiness in the first quarter of 2025, revenue increased over last year's first quarter by 16% in the face of a 6% global rig count decline over the same period. We believe this continues to validate our stated M&A strategy to further strengthen our business model and diversify our geographic footprint. Looking at our first quarter results, we generated total consolidated revenue of $42.9 million, comprised of tool rental revenue of approximately $34.5 million and product sales revenue of $8.3 million. We reported total operating expenses of $39.6 million and operating income was $3.3 million. First quarter adjusted EBITDA was $10.8 million, and adjusted free cash flow was $5.7 million. At the end of the first quarter, we had approximately $2.8 million in cash and cash equivalents and net debt of $52.1 million. During the quarter, as part of our recent segment reorganization, we conducted a comprehensive goodwill impairment assessment. This process required us to allocate goodwill between all affected reporting units and test each for potential impairment. As a result, we have recorded a noncash goodwill write-down attributable to our Vernal, Utah bit repair operations in the Western Hemisphere and the deep casing tools reporting unit in the Eastern Hemisphere. The approximately $1.9 million impairment is a function of purchase price accounting and does not affect our day-to-day operations or our ability to execute on our strategic priorities. From a purchase accounting standpoint, it is important to note that the increase in our stock price, pre-close of the SDPI transaction caused the total allocated purchase price consideration to increase beyond the amount by which we underwrote the deal. Importantly, this charge is noncash in nature and does not impact liquidity, free cash flow or adjusted EBITDA. Adjusted net income which excludes this noncash charge remains positive and in line with our strong operational performance for the quarter. We believe taking this impairment now provides a more accurate reflection of asset values in the current market environment and positions us for improved transparency and comparability going forward. As previously mentioned on our last call, our new Western and Eastern Hemisphere segment reporting structure began this quarter. Our Western Hemisphere segment, which includes products and services like directional tool rentals, wellbore optimization tools, premium tools and bit repair remains steady. Moving to the Eastern Hemisphere, which is predominantly made up of deep casing tools, European drilling projects and now Titan Tools, you'll see some choppiness as we compare Q1 '24 to Q1 '25. With the addition of the European drilling projects and Titan Tools, our tool rental revenue is up significantly over Q1 of '24. Our decline in product sales was primarily due to deep casing tools. We believe that the product sales at deep casing tools bottomed out in second half 2024, given their exposure to the Saudi offshore market and Mexico. These tools are high spec and we expect demand for them to pick up internationally throughout 2025, as existing customer-owned inventory is depleted. With our expanded offering of rental tools, including MechLOK drill pipe swivels, the Rubblizer-PNA, fixed blade stabilizers, drilling ream and other BHA components, rental revenue is becoming a much larger percentage of the Eastern Hemisphere revenue mix, and we anticipate steady growth and better cost absorption in future quarters. Previously, we've spoken about the total revenue contribution from each hemisphere and indicated an expectation for the Eastern Hemisphere to grow to 18% of total revenue. As you can see in Q1 results, the Eastern Hemisphere accounts for 11% of revenue, but we expect the Eastern Hemisphere contribution to grow as the year progresses. Adjusted free cash flow in the first quarter was $5.7 million. We maintained our planned CapEx spend in the first quarter to support the momentum we have been experiencing from our organic RotoSteer product growth story and our international expansion. Going forward, we will continue to review all CapEx spending with an eye on activity levels while demonstrating our ability to generate adjusted free cash flow. Looking at maintenance CapEx for the first quarter, it was approximately 10% of total revenue. Although up slightly in Q1, this portion of our capital investment has trended lower in the past several quarters due to the decline in rig count and our customers' focus on drilling efficiencies translating into fewer lost-in-hole and damaged beyond repair events. As a reminder, our maintenance capital is primarily funded by tool recovery revenue which keeps our rental tool fleet relevant and sustainable regardless of market trends. To summarize the first quarter of 2025 we saw the positive effects of our acquisitions and organic growth in the RotoSteer product line, which offset some of the decline in our directional tool rentals and deep casing tools product lines. Pricing pressure, product mix and activity declines have impacted our margins. We believe this will continue throughout 2025, with pricing pressure and further activity declines resulting from the fears of oversupply caused by a slowdown in demand and increased production. However, in the long run, we believe we can position ourselves to improve our consolidated margin profile over time as we continue to manage our cost structure and add scale. As Wayne mentioned, we have proactively initiated cost reduction measures in Q2 that will result in approximately $6 million of annual cost savings, which is reflected in our updated 2025 guidance. We have also updated our guidance to reflect a further decline in the North American land rig counts. Although we do not have a crystal ball, our previous assumption of a flat to slightly up market has shifted to a down market for the remainder of 2025. With that in mind, we now expect full year 2025 revenue to be in the range of $145 million to $165 million. We expect adjusted EBITDA to be within the range of $32 million to $42 million. Gross capital expenditures are expected to be between $18 million and $23 million. And finally, we expect our 2025 adjusted free cash flow to range between $14 million to $19 million. That concludes my financial review and outlook section. Let me turn it back over to Wayne to provide some summary comments. R. Wayne Prejean Thank you, David. Before we open up the lines for questions, I would like to highlight five points. First, over the past six weeks since the new administration's tariff policies were introduced, worldwide sentiment across the industry had become anxious. Recently, various news outlets announced some adjustments to the tariff policy and it appears negotiations are headed in a positive direction. Despite the ever-changing news or trade policy shifts, we assume there is likely a negative impact to our business this year. Second, DTI has taken certain initiatives to remain competitive, including remaining resourceable and innovative when combating pricing pressures. Third, we are constantly evaluating customer activity levels and adjusting our operations to align with demand. Fourth, we are confident that elevated demand for complex wellbore solutions will further strengthen the need for our differentiated technology and the value-added solutions we provide our clients across the globe. Finally, we believe our best-in-class performance driven, technologically differentiated offerings, combined with our expanding global geographic footprint, will deliver solid results as energy markets recover. In closing, we value and appreciate our customers, our employees and our shareholders. I would like to thank every member of the DTI team for their continuous dedication to working in a safe, inspired and productive manner. This commitment by our employees is critical in managing this volatile commodity cycle and is vital to our future growth. With that, we will now take your questions. Operator? Operator (Operator Instructions) Steve Ferazani, Sidoti & Company. Steve Ferazani Appreciate the detail on the call, also the detail around guidance, which always challenging. I imagine exceptionally challenging given the aftermath of Liberation Day. I want to ask about first just on obviously, second half should be more challenging, particularly in US short cycle. But you're not moving free cash flow much. Looks like you're taking about $6 million out of your growth CapEx. Talk a little bit about the fact that you can maintain pretty good free cash flow in this environment? David Johnson Let me take that one. R. Wayne Prejean Sure. David Johnson Thanks, Steve. Part of that, I think, is two-pronged, obviously, focusing on the cost reductions to keep preserve as much of the EBITDA margins as we can, obviously helps. And then as we look at the activity and projected activity going forward and our CapEx spend kind of making sure we coincide any purchases or defer same along the line as we did last year on future CapEx to make sure we preserve that ability to generate the free cash flow. Steve Ferazani Great. It sounded like you're still expecting sequential Eastern Hemisphere growth this year, and I think you pointed to deep casing tools, particularly. Can you talk a little bit about what you're seeing specifically in Saudi and otherwise in the Middle East? R. Wayne Prejean Yes. So most of the Middle East is relatively flat. But the Saudi rig reduction in their offshore market, particularly the offshore market was impactful to us because we had many, many product sales going into that market. But we've managed to pivot and see some consumption in the other areas. And in parallel to that, our acquisition of ED Projects has some technology in our fixed blade and sleeves and other stabilization technologies that are gaining more and more traction in that market. And in addition to that, our D&R product line is starting to gain some traction in the Middle East market. After the acquisition, we had to kind of unpack and aggregate our teams there and kind of integrate all those groups together. And I think that most of that is behind us. And we feel like our momentum is picking up there. And despite that Saudi rig count softness that impacted everyone, I believe, we were able to start spreading our wings across the Middle Eastern market and gain traction there, which will offset some of the activities that are impossible decline here. And we've kind of baked all that in. So that's kind of the impact. Steve Ferazani So you're expecting, at least given the weakness of this growth in these acquisitions are certainly going to help offset in a challenging 2025? R. Wayne Prejean Right. We have some emerging products that are gaining ground or one of the products that we acquired in Deep casing was the MechLOK swivel and the Rubblizer product, one for installing complex casing strings in horizontal wells, that which is the swivel. And then the Rubblizer is more of a plug and abandonment technology that couples well with a lot of applications. And those were in their infancy at the time of acquisition. So they were not material part of the acquisition value or kind of in addition to, as we call it, Louisiana, Lana, a little bit extra for nothing. So -- so we are now moving those into full commercial stage, and they're gaining traction and offsetting some of the drop in the product sales that I spoke of earlier, so. Steve Ferazani Got it. Got it. That's helpful. You noted you haven't seen the tangible impact in North America yet. I mean we're hearing -- we're seeing rig count come down, but it seems like it's the smaller operators. We know the guides we're seeing for CapEx is down a bit. I'm assuming the guidance changes primarily second half in terms of cadence to the guidance, does 2Q look similar to 1Q based on what you know right now with obviously with six weeks to go? R. Wayne Prejean David, what do you -- how do you think to answer that one? David Johnson I mean, yes, I think we're looking at the rest of the year in totality. And it's hard to obviously predict the combination of activity and pricing and so forth. But on a blended basis, we've got that kind of spread out over the year. R. Wayne Prejean Steve, we've anticipated some softness in the US market throughout the rest of the year. But what's interesting is -- and we're also going through the Canadian seasonality dip right now. So that will ramp back up and help out as well in the rest of the year. And there has been some reports where Canada might be a little more immune to some of this downturn because of their particular situation in production and cost and economics and things of that nature. So we're happy that we have a strong business in Canada and very, very solid and sustainable operation there. What's kind of interesting about the US market, and I think what has most of the company's OFSs and everything perplexed is the lack of a swift downturn, it's more of just a slow leak, and that's what's happened over the last year. And now we have some additional leakage if excuse the expression, but that gets kind of leakage. It's a slow burn. Historically, when we would have downturns, you have a swift rig downturn and everyone would correct. Well, when it goes slow, it's a little more challenging for each company to decide how they make those adjustments. And we've done this before. We've seen this movie a few times, and we're adjusting -- understanding that that metric of our customers of how they manage their rig counts. Steve Ferazani Perfect. That's helpful. I get one more in just on capital allocation and the guide. You have a pretty wide range on the full year interest expense. Is that because it's how much debt you may or may not reduce in the remainder of the year? David Johnson Yes, I think that's very accurate, Steve. Obviously, depending on the capital spend and where we exercise that free cash flow deployment, we have an opportunity to lower our debt if we pull back on the CapEx and adjust according to the activity, so that all happens in the downturn. And we've also, obviously, as you saw, kind of consider the share buyback as part of our use of cash as well, that opportunity. So we'll kind of look at that as time progresses. Operator Josh Jayne, Daniel Energy Partners. Josh Jayne First question, I just wanted to dive into North America a little bit more. I think in your slide deck, you highlight that 60% of the drilling rig or America utilize DTI tools and equipment, so just given your broad exposure, could you talk about how you're thinking about the back half of the year? I know you said probably or maybe look similar spread across the last three quarters. But could you talk through what regions may be the most at risk in North America for a little bit of a pullback in what regions may hold up better than some others? R. Wayne Prejean That's a great question, Josh, because as you well know, the economics in these different basins will drive the behavior of the operators and the rig count will result thereof those economics. So the resiliency of each area is going to be challenged here in the next few months if oil prices keep dropping, something in the 60s helps many of them continue with what they're doing if it drops it with a five handle for a significant amount of time. We're pretty sure that we'll see some reductions in areas where the economics are as strong. I would hate to lean and into exactly which areas, whether it's DJ or the Oklahoma oily basins or if it's Permian, Midland or Delaware Basin, there's a lot of narratives and information out there on which ones have the strength to sustain lower oil prices, but there is -- so the Haynesville tends to be -- the gas areas tend to be more sustainable. So we have good exposure to every area. We're heavy in the Permian. We have really good operations in the Haynesville as well where we're in a lot of tools, pipe and downhole tools, rears, you name it. So our spread and diversity gives us the stress to move around in these basins, respective to activity. And we can ebb and flow and pull the levers up and down in our locations and move tools to where they need to be and the activity that is most vibrant. So it's going to be an interesting next few months. Josh Jayne Okay. And then I just wanted to follow up on CapEx because you noted that you could potentially curtail growth CapEx if the macro was -- turned out to be more unfavorable. Could you comment on your CapEx program for this year on the growth side and the things that you're spending money on and which regions you're ultimately trying to grow with that growth CapEx would be great. David Johnson So most of our focus on anything growth related in that category will be in new technology and new types of tools that have growth potential. And we'll be -- we'll continue to sustain our existing rental fleet, I call our legacy fleet, which is your common stuff on a day-to-day basis. But our new stabilizer technology, our new swivels, the technology, I spoke of early with MechLOK, our RotoSteer product line, which is gaining steady traction in the US and finding its niche in certain directional and horizontal drilling applications. We are continuing to make sure we put the appropriate amount of capital for the future, even though we see the softness in our general marketplace today, we see the future in the next year to come, that we need to put these tools in motion and get their stickiness and commercial traction with our clients so that we have a long-term participation in the drilling program. So that's where most of our CapEx focus. Operator This now concludes our question-and-answer session. I'd now like to turn the floor back over to Wayne Prison for closing comments. R. Wayne Prejean Thank you. I would like to thank everyone for their participation and interest today in our earnings call and make everyone aware that our company is continuing to be competitive and is ready to meet all the challenges that we face in our industry going forward. And we thank you for your interest, and have a great day. Operator Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines, and have a wonderful day.
Yahoo
14-05-2025
- Business
- Yahoo
/C O R R E C T I O N -- Drilling Tools International Corp./
In the news release, Drilling Tools International Corp. Reports 2025 First Quarter Results, issued 13-May-2025 by Drilling Tools International Corp. over PR Newswire, we are advised by the company that the column headers of the last two tables, "Reconciliation of Estimated Consolidated Net Income to Adjusted EBITDA" and "Reconciliation of Estimated Consolidated Net Income to Adjusted Free Cash Flow", should read "Twelve Months Ended December 31, 2025" rather than "Three Months Ended March 31, 2025" as originally issued inadvertently. The complete, corrected release follows: Board Authorizes a $10 Million Share Repurchase Program HOUSTON, May 13, 2025 /PRNewswire/ -- Drilling Tools International Corp., (NASDAQ: DTI) ("DTI" or the "Company"), a global oilfield services company that designs, engineers, manufactures and provides a differentiated, rental-focused offering of tools for use in onshore and offshore horizontal and directional drilling operations, as well as other cutting-edge solutions across the well life cycle, today reported its results for the three months ended March 31, 2025. DTI generated total consolidated revenue of $42.9 million in the first quarter of 2025. First quarter Tool Rental revenue was approximately $34.5 million and Product Sales revenue totaled $8.3 million. Total Operating Expenses were $39.6 million and Operating Income was $3.3 million. Net Loss for the first quarter was approximately $1.7 million and Adjusted Net Income(1) for the quarter was $0.7 million. Diluted EPS and Adjusted Diluted EPS(1) for the first quarter were a loss of $0.05 per share and an income of $0.02 per share, respectively. First quarter Adjusted EBITDA(1) was $10.8 million and Adjusted Free Cash Flow(1)(2) was $5.7 million. As of March 31, 2025, DTI had approximately $2.8 million of cash and cash equivalents and net debt of $52.1 million. Wayne Prejean, President and Chief Executive Officer of DTI, stated, "We are pleased to report strong 2025 first quarter sequential and year-over-year revenue growth and solid Adjusted EBITDA results in spite of industry headwinds. Revenue grew 7.6% sequentially and 16% over last year's first quarter. Adjusted EBITDA was essentially flat sequentially and grew nearly 18% over the same period last year. "Looking to the near term, we have yet to experience tangible disruptions to our forecast for our rental tools or the sale of our tools," added Prejean. "However, we do see increased volatility and uncertainty in the marketplace due to the potential impacts of tariffs, recession fears that could lower demand for hydrocarbons, and OPEC+'s decision to increase production, to name a few. In anticipation of any prospective disruptions, we have implemented a new program to cut expenses by approximately $6 million this year and have contingency plans to cut more costs if necessary. "While we cannot control global economic forces, we do believe that our input costs are fairly insulated from the increase in the costs associated with any tariff risks for three reasons: 1) DTI has a strong US manufacturing base; 2) our international footprint and diverse supply chain allows us flexibility in the face of uncertainty; and 3) should a significant reduction in rig count come, we are prepared to significantly curtail planned growth capital expenditures," said Prejean. "We remain committed to identifying cost reduction opportunities and maintaining operational agility to quickly respond to a challenging environment, now or in the future, to enhance shareholder value. "Based on this current volatility and market uncertainty, we feel it is prudent to adjust our annual Revenue, Adjusted EBITDA, and Adjusted Free Cash Flow guidance ranges as follows: Updated 2025 Full Year Outlook Revenue$145 million — $165 million Adjusted EBITDA(1)$32 million — $42 million Adjusted EBITDA Margin(1)22 % — 25 % Adjusted Free Cash Flow(1)(2)$14 million — $19 million(1) Adjusted Net Income, Adjusted EBITDA, Adjusted EBITDA Margin, and Adjusted Free Cash Flow are non-GAAP financial measures. See "Non-GAAP Financial Measures" at the end of this release for a discussion of reconciliations to the most directly comparable financial measures calculated and presented in accordance with U.S. generally accepted accounting principles ("GAAP"). (2) Adjusted Free Cash Flow defined as Adjusted EBITDA less Gross Capital Expenditures. Board Authorizes a $10 Million Repurchase Program Prejean added, "Our disciplined capital allocation strategy prioritizes financial strength through maintenance and organic growth capital investment, strategic acquisitions, and now a return of capital program to enhance shareholder value. We firmly believe that our common stock is undervalued and is an attractive investment opportunity within our overall capital allocation strategy." DTI announced today that its board of directors (the "Board") recently authorized a repurchase program under which the Company may repurchase its outstanding shares of its common stock up to $10 million. The Board's decision to initiate this program reflects its confidence in the Company's long-term strategy and financial health. By repurchasing shares, DTI aims to enhance shareholder value in several ways, including optimizing its capital structure and demonstrating a commitment to returning excess capital to shareholders, providing the Company with flexibility to manage its equity base efficiently. The Board will periodically review the program and may adjust the amount and timing of repurchases based on market conditions, business outlook, and other factors relevant to the Company's financial position and strategic priorities. Under the share repurchase program, the Company intends to repurchase shares through open-market, round lot of block transactions, in privately negotiated, off-market purchases or otherwise in accordance with applicable federal and state securities laws, including Rule 10b-18 of the Securities Exchange Act of 1934 (the "Exchange Act"). Information regarding share repurchases will be available in the Company's periodic reports on Form 10-Q and 10-K filed with the Securities and Exchange Commission as required by the applicable rules of the Exchange Act. 2025 First Quarter Conference Call Information DTI's 2025 first quarter conference call can be accessed live via dial-in or webcast on Wednesday, May 14, 2025 at 10:00 a.m. Eastern Time (9:00 a.m. Central Time) by dialing 201-389-0869 and asking for the DTI call at least 10 minutes prior to the start time, or via live webcast by logging onto the webcast at this URL address: An audio replay will be available through May 21, 2025 by dialing 201-612-7415 and using passcode 13753220#. Also, an archive of the webcast will be available shortly after the call at for 90 days. Please submit any questions for management prior to the call via email to DTI@ About Drilling Tools International Corp. DTI is a Houston, Texas based leading oilfield services company that manufactures and rents downhole drilling tools used in horizontal and directional drilling of oil and natural gas wells. With roots dating back to 1984, DTI operates from 15 service and support centers across North America and maintains 11 international service and support centers across the EMEA and APAC regions. To learn more about DTI, please visit: Contact: DTI Investor RelationsKen Dennard / Rick BlackInvestorRelations@ Forward-Looking Statements This press release may include, and oral statements made from time to time by representatives of the Company may include, "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements regarding the business combination and the financing thereof, and related matters, as well as all other statements other than statements of historical fact included in this press release are forward-looking statements. The words "anticipate," "believe," "continue," "could," "estimate," "expect," "intends," "may," "might," "plan," "possible," "potential," "predict," "project," "should," "will," "would" and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward looking. These forward-looking statements include, but are not limited to, statements regarding DTI and its management team's expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Forward looking statements in this press release may include, for example, statements about: (1) the demand for DTI's products and services, which is influenced by the general level activity in the oil and gas industry; (2) DTI's ability to retain its customers, particularly those that contribute to a large portion of its revenue; (3) DTI's ability to employ and retain a sufficient number of skilled and qualified workers, including its key personnel; (4) DTI's ability to source tools and raw materials at a reasonable cost; (5) DTI's ability to market its services in a competitive industry; (6) DTI's ability to execute, integrate and realize the benefits of acquisitions, and manage the resulting growth of its business; (7) potential liability for claims arising from damage or harm caused by the operation of DTI's tools, or otherwise arising from the dangerous activities that are inherent in the oil and gas industry; (8) DTI's ability to obtain additional capital; (9) potential political, regulatory, economic and social disruptions in the countries in which DTI conducts business, including changes in tax laws or tax rates; (11) DTI's dependence on its information technology systems, in particular Customer Order Management Portal and Support System, for the efficient operation of DTI's business; (11) DTI's ability to comply with applicable laws, regulations and rules, including those related to the environment, greenhouse gases and climate change; (12) DTI's ability to maintain an effective system of disclosure controls and internal control over financial reporting; (13) the potential for volatility in the market price of DTI's common stock; (14) the impact of increased legal, accounting, administrative and other costs incurred as a public company, including the impact of possible shareholder litigation; (15) the potential for issuance of additional shares of DTI's common stock or other equity securities; (16) DTI's ability to maintain the listing of its common stock on Nasdaq; and (17) other risks and uncertainties separately provided to you and indicated from time to time described in in DTI's most recent Forms 10-K, 10-Q and 8-K filed with or furnished to the Securities and Exchange Commission (the "SEC"). You should carefully consider the risks and uncertainties including those described in Part I, Item 1A – "Risk Factors" of our Annual Report on Form 10-K filed on March 14, 2025 and in comparable "Risk Factor" sections of our Quarterly Reports on Form 10-Q filed after such Form 10-K. Such forward-looking statements are based on the beliefs of management of DTI, as well as assumptions made by, and information currently available to DTI's management and are subject to numerous conditions, many of which are beyond the control of DTI. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed in DTI's most recent Forms 10-K, 10-Q and 8-K filed with or furnished to the SEC. All subsequent written or oral forward-looking statements attributable to the Company or persons acting on its behalf are qualified in their entirety by this paragraph. The Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law. Drilling Tools International Corp. Consolidated Statement of Operations and Comprehensive Income (Loss) (Unaudited) (In thousands of U.S. dollars and rounded)Three Months Ended March 31, 20252024 Revenue, net: Tool rental$ 34,533$ 29,966 Product sale8,3477,008 Total revenue, net42,88036,974 Operating costs and expenses: Cost of tool rental revenue7,6886,484 Cost of product sale revenue3,5582,053 Selling, general, and administrative expense21,60917,942 Depreciation and amortization expense6,7225,365 Total operating costs and expenses39,57731,844 Operating income3,3035,130 Other expense, net: Interest expense, net(1,309)(182) Gain on sale of property13— Loss on asset disposal—(9) Gain (loss) on remeasurement of previously held equity interest—249 Goodwill impairment(1,901)— Other income (expense), net(1,934)(1,125) Total other expense, net(5,131)(1,067) Income before income tax expense(1,828)4,063 Income tax benefit (expense)159(937) Net income (Loss)$ (1,669)$ 3,126 Basic earnings per share$ (0.05)$ 0.11 Diluted earnings per share$ (0.05)$ 0.11 Basic weighted-average common shares outstanding35,592,73729,768,568 Diluted weighted-average common shares outstanding35,592,73729,768,568 Comprehensive income: Net income (Loss)$ (1,669)$ 3,126 Foreign currency translation adjustment, net of tax942(511) Net comprehensive income (loss)$ (727)$ 2,615 Drilling Tools International Balance Sheets (Unaudited)(In thousands of U.S. dollars and rounded)March 31, December 31,2025 2024ASSETS Current assets Cash$ 2,789 $ 6,185Accounts receivable, net 42,38139,606Related party note receivable, current 909909Inventories, net 18,25017,502Prepaid expenses and other current assets 3,0453,874Total current assets 67,37468,076Property, plant and equipment, net 80,86375,571Operating lease right-of-use asset 23,65322,718Intangible assets, net 40,22737,232Goodwill 14,40112,147Deferred financing costs, net 730817Related party note receivable, less current portion 4,3534,262Deposits and other long-term assets 1,5691,608Total assets$ 233,169 $ 222,431LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable$ 15,603 $ 11,983Accrued expenses and other current liabilities 9,0317,864Current portion of operating lease liabilities 4,2584,121Current maturities of long-term debt 5,9086,995Total current liabilities 34,80130,963Operating lease liabilities, less current portion 19,64418,765Revolving line of credit 30,00027,142Long-term debt, less current portion 18,96119,676Deferred tax liabilities, net 7,0675,926Total liabilities 110,473102,472Commitments and contingencies Shareholders' equity Common stock, $0.0001 par value, shares authorized 500,000,000 as of March 31, 2025 and December 31, 2024, 35,592,737 issued and outstanding as of March 31, 2024 and 34,704,696 shares issued and outstanding as of December 31, 2024 43Additional paid-in-capital 128,878125,415Accumulated deficit (5,251)(3,582)Accumulated other comprehensive loss (935)(1,877)Total shareholders' equity 122,696119,959Total liabilities and shareholders' equity$ 233,169 $ 222,431 Drilling Tools International Statement of Cash Flows (Unaudited)(In thousands of U.S. dollars and rounded) Three months ended March 31,2025 2024Cash flows from operating activities: Net income (Loss)$ (1,669) $ 3,126Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization 6,7225,365Amortization of deferred financing costs 8756Non-cash lease expense 1,3831,111Unrealized loss on currency remeasurement (114)—Provision for excess and obsolete inventory 418—Provision for excess and obsolete property and equipment 5466Provision for credit losses 217(135)Deferred tax expense (750)266Gain on sale of property (14)—Loss on asset disposal 379Unrealized (gain) loss on equity securities —(249)Gross profit from sale of lost-in-hole equipment (3,145)(2,799)Stock-based compensation expense 541208Interest Income on related party note receivable (91)—Goodwill impairment 1,901—Changes in operating assets and liabilities: Accounts receivable, net (670)(1,839)Prepaid expenses and other current assets 5721,723Inventories, net 2,5402,836Operating lease liabilities (1,303)(1,067)Accounts payable (3,651)(2,848)Accrued expenses and other current liabilities (634)(2,517)Net cash flows from operating activities 2,4313,311Cash flows from investing activities: Acquisition of a business, net of cash acquired (5,619)(18,261)Purchase of intangible assets (681)—Proceeds from sale of property, plant, and equipment 14—Purchase of property, plant, and equipment (5,043)(6,228)Proceeds from sale of lost-in-hole equipment 4,0494,904Net cash flows from investing activities (7,280)(19,585)Cash flows from financing activities: Payment of deferred financing costs —(389)Proceeds from Term Loan —25,000Repayment of Term Loan (1,250)—Repayment of Promissory Note (216)—Proceeds from revolving line of credit 19,349—Repayment on revolving line of credit (16,491)—Net cash flows from financing activities 1,39224,611Effect of Changes in Foreign Exchange Rate 61(291)Net Change in Cash (3,396)8,046Cash at Beginning of Period 6,1856,003Cash at End of Period$ 2,789 $ 14,049Non-GAAP Financial Measures This release includes Adjusted EBITDA, Adjusted Free Cash Flow, Net Debt and Adjusted Net Income measures. Each of the metrics are "non-GAAP financial measures" as defined in Regulation G of the Securities Exchange Act of 1934. Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies. Adjusted EBITDA is not a measure of net earnings or cash flows as determined by GAAP. We define Adjusted EBITDA as net earnings (loss) before interest, taxes, depreciation and amortization, further adjusted for (i) goodwill and/or long-lived asset impairment charges, (ii) stock-based compensation expense, (iii) restructuring charges, (iv) transaction and integration costs related to acquisitions and (v) other expenses or charges to exclude certain items that we believe are not reflective of ongoing performance of our business. We believe Adjusted EBITDA is useful because it allows us to supplement the GAAP measures in order 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. We exclude the items listed above in arriving at Adjusted EBITDA because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP, or as an indicator of our operating performance or liquidity. Certain items excluded from Adjusted EBITDA 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, none of which are components of Adjusted EBITDA. Our computations of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. Adjusted Free Cash Flow is a supplemental non-GAAP financial measure, and we define Adjusted Free Cash Flow as Adjusted EBITDA less Gross Capital Expenditures. We use Adjusted Free Cash Flow as a financial performance measure used for planning, forecasting, and evaluating our performance. We believe that Adjusted Free Cash Flow is useful to enable investors and others to perform comparisons of current and historical performance of the Company. As a performance measure, rather than a liquidity measure, the most closely comparable GAAP measure is net income (loss). Net Debt is a supplemental non-GAAP financial measure, and we define Net Debt as total debt less cash and cash equivalents. We use Net Debt to determine our outstanding debt obligations that would not be readily satisfied by our cash and cash equivalents on hand. We believe this metric is useful to analysts and investors in determining our leverage position since we have the ability to, and may decide to, use a portion of our cash and cash equivalents to reduce debt. We define Adjusted Net Income (Loss) as consolidated net income (loss) adjusted for (i) goodwill and/or long-lived asset impairment charges, (ii) restructuring charges, (iii) transaction and integration costs related to acquisitions, (iv) income taxes expense which is calculated by applying our effective tax rate on unadjusted net income to adjusted pre-tax income, and (v) other expenses or charges to exclude certain items that we believe are not reflective of the ongoing performance of our business. We believe Adjusted Net Income (Loss) is useful because it allows us to exclude non-recurring items in evaluating our operating performance. We define Adjusted Diluted Earnings (Loss) per share as the quotient of adjusted net income (loss) and diluted weighted average common shares. We believe that Adjusted Diluted Earnings (Loss) per share provides useful information to investors because it allows us to exclude non-recurring items in evaluating our operating performance on a diluted per share basis. This release also includes certain projections of non-GAAP financial measures. Reconciliation of these items to net income include gains or losses on sale or consolidation transactions, accelerated depreciation, impairment charges, gains or losses on retirement of debt, variations in effective tax rate and fluctuations in net working capital, which are difficult to predict and estimate and are primarily dependent on future events. The following tables present a reconciliation of the non-GAAP financial measures of Adjusted EBITDA, Adjusted Free Cash Flow and Adjusted Net Income to the most directly comparable GAAP financial measures for the periods indicated: Drilling Tools International Corp. Reconciliation of GAAP to Non-GAAP Measures (Unaudited) (In thousands of U.S. dollars and rounded)Three months ended March 31, 20252024 Net income (loss)$ (1,669)$ 3,126 Add (deduct): Income tax expense (benefit)(159)937 Depreciation and amortization6,7225,365 Interest expense, net1,309182 Stock option expense541208 Management fees188188 Gain on sale of property(14)— Loss on asset disposal—9 Gain on remeasurement of previously held equity interest—(249) Goodwill impairment1,901— Transaction expense732889 Other expense, net1,203236 Adjusted EBITDA$ 10,754$ 10,891 Drilling Tools International Corp. Reconciliation of GAAP to Non-GAAP Measures (Unaudited) (In thousands of U.S. dollars and rounded)Three months ended March 31, 20252024 Net income (loss)$ (1,669)$ 3,126 Add (deduct): Income tax expense (benefit)(159)937 Depreciation and amortization6,7225,365 Interest expense, net1,309182 Stock option expense541208 Management fees188188 Gain on sale of property(14)— Loss on asset disposal—9 Loss (gain) on remeasurement of previously held equity interest —(249) Goodwill impairment1,901— Transaction expense732889 Other expense, net1,203236 Gross capital expenditures(5,043)(6,228) Adjusted Free Cash Flow$ 5,711$ 4,663 Drilling Tools International Corp. Reconciliation of GAAP to Non-GAAP Measures (Unaudited) (In thousands of U.S. dollars and rounded)Three months ended March 31, 20252024 Net income (loss)$ (1,669)$ 3,126 Transaction expense732889 Goodwill impairment1,901— Income tax expense (benefit)(159)937 Adjusted Income Before Tax$ 805$ 4,952 Adjusted Income tax expense(70)(1,142) Adjusted Net Income$ 735$ 3,810 Adjusted Basic earnings per share$ 0.02$ 0.13 Adjusted Diluted earnings per share$ 0.02$ 0.13 Basic weighted-average common shares outstanding35,592,73729,768,568 Diluted weighted-average common shares outstanding35,778,54129,768,568 Drilling Tools International of Estimated Consolidated Net Income to Adjusted EBITDA(In thousands of U.S. dollars and rounded)(Unaudited) Twelve Months Ended December 31, 2025Low HighNet Income$ (4,500) $ (1,500)Add (deduct) Interest expense, net 3,7005,000Income tax expense (1,000)500Depreciation and amortization 26,50028,000Management fees 700800Other expense 1,5003,000Stock option expense 2,5003,000Goodwill impairment 1,8002,000Transaction expense 8001,200Adjusted EBITDA$ 32,000 $ 42,000Revenue 145,000165,000Adjusted EBITDA Margin 22 % 25 % Drilling Tools International of Estimated Consolidated Net Income to Adjusted Free Cash Flow(In thousands of U.S. dollars and rounded)(Unaudited) Twelve Months Ended December 31, 2025Low HighNet Income$ (4,500) $ (1,500)Add (deduct) Interest expense, net 3,7005,000Income tax expense (1,000)500Depreciation and amortization 26,50028,000Management fees 700800Other expense 1,5003,000Stock option expense 2,5003,000Goodwill impairment 1,8002,000Transaction expense 8001,200Gross capital expenditures (18,000)(23,000)Adjusted Free Cash Flow$ 14,000 $ 19,000Adjusted Free Cash Flow Margin 10 % 12 % View original content: SOURCE Drilling Tools International Corp. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
