Superior Drilling Products, Inc. Executes Sale-Leaseback Transaction for $4.5 million
November 12 2020 - 5:00PM
Business Wire
Superior Drilling Products, Inc. (NYSE American: SDPI) (“SDP” or
the “Company”), an innovator and manufacturer of drilling tool
technologies, today announced that it has entered into
sale-leaseback agreements for its facilities in Vernal, Utah. The
transaction is subject to customary due diligence and the Company
expects it to close before year end.
Under the terms of the transaction, SDP will sell its facilities
for $4.5 million and simultaneously enter into a 15-year lease.
After fees, the Company is expected to net approximately $4.2
million in proceeds of which $2.5 million will be used to repay its
outstanding mortgage. Lease terms are for monthly payments that are
$17 thousand less than current mortgage debt service.
Chris Cashion, Chief Financial Officer, commented, “This
transaction was an excellent opportunity given current market
conditions for us to monetize our Vernal property. The proceeds
will enable us to completely pay off our mortgage and improve
liquidity with approximately $1.7 million in additional cash. The
additional cash helps bolster our balance sheet providing us the
flexibility to continue to expand internationally and develop
additional revenue streams. The Drill-N-Ream®, our unique, patented
wellbore conditioning tool, is being deployed more frequently in
international markets while it also continues to gain new customers
in the U.S. We believe this bodes well for our future and these
opportunities are further bolstered as the oil & gas industry
begins to improve.”
About Superior Drilling Products, Inc.
Superior Drilling Products, Inc. is an innovative, cutting-edge
drilling tool technology company providing cost saving solutions
that drive production efficiencies for the oil and natural gas
drilling industry. The Company designs, manufactures, repairs and
sells drilling tools. SDP drilling solutions include the patented
Drill-N-Ream® well bore conditioning tool and the patented Strider™
oscillation system technology. In addition, SDP is a manufacturer
and refurbisher of PDC (polycrystalline diamond compact) drill bits
for a leading oil field service company. SDP operates a
state-of-the-art drill tool fabrication facility, where it
manufactures its solutions for the drilling industry, as well as
customers’ custom products. The Company’s strategy for growth is to
leverage its expertise in drill tool technology and innovative,
precision machining in order to broaden its product offerings and
solutions for the oil and gas industry.
Additional information about the Company can be found at:
www.sdpi.com.
Safe Harbor Regarding Forward Looking Statements
This news release contains forward-looking statements and
information that are subject to a number of risks and
uncertainties, many of which are beyond our control. All
statements, other than statements of historical fact included in
this release, including, without limitations, the continued impact
of COVID-19 on the business, the Company’s strategy, future
operations, success at developing future tools, the Company’s
effectiveness at executing its business strategy and plans,
financial position, estimated revenue and losses, projected costs,
prospects, plans and objectives of management, and ability to
outperform are forward-looking statements. The use of words
“could,” “believe,” “anticipate,” “intend,” “estimate,” “expect,”
“may,” “continue,” “predict,” “potential,” “project”, “forecast,”
“should” or “plan, and similar expressions are intended to identify
forward-looking statements, although not all forward -looking
statements contain such identifying words. These statements reflect
the beliefs and expectations of the Company and are subject to
risks and uncertainties that may cause actual results to differ
materially. These risks and uncertainties include, among other
factors, the duration of the COVID-19 pandemic and related impact
on the oil and natural gas industry, the effectiveness of success
at expansion in the Middle East, options available for market
channels in North America, the deferral of the commercialization of
the Strider technology, the success of the Company’s business
strategy and prospects for growth; the market success of the
Company’s specialized tools, effectiveness of its sales efforts,
its cash flow and liquidity; financial projections and actual
operating results; the amount, nature and timing of capital
expenditures; the availability and terms of capital; competition
and government regulations; and general economic conditions. These
and other factors could adversely affect the outcome and financial
effects of the Company’s plans and described herein. The Company
undertakes no obligation to revise or update any forward-looking
statements to reflect events or circumstances after the date
hereof.
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version on businesswire.com: https://www.businesswire.com/news/home/20201112006100/en/
For more information, contact investor relations: Deborah
K. Pawlowski Kei Advisors LLC (716) 843-3908
dpawlowski@keiadvisors.com
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