Company announces 2023 year end conference
call for March 28, 2024
HOUSTON, March 7,
2024 /PRNewswire/ -- Drilling Tools International
Corp., (NASDAQ: DTI) ("DTI" or the "Company"), a global oilfield
services company that manufactures and provides a differentiated,
rental-focused offering of tools for use in onshore and offshore
horizontal and directional drilling operations, today provided
preliminary estimate ranges for selected 2023 full year
results.
Wayne Prejean, CEO of DTI,
stated, "After initial review, we are providing preliminary
estimates of our 2023 full year results as follows:
Preliminary
Estimates for 2023 Full Year Results (Unaudited)
|
Estimated
Revenue
|
$150 MM – $154
MM
|
Estimated Net Income
|
$14.6 MM – $14.9
MM
|
Estimated Adjusted
EBITDA(1)
|
$50 MM – $52
MM
|
Estimated Adjusted
EBITDA Margin(1)
|
33% –
34%
|
Estimated Adjusted
Free Cash Flow(1)(2)
|
$7 MM – $8
MM
|
|
|
(1)
|
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
|
"We are delighted to report that after only eight months as a
public company, we are delivering on the strategic plans that we
outlined during our public offering. We are also pleased to tighten
and update the ranges for our estimated 2023 results that fall
within our prior guidance expectations," Prejean
continued.
"As a market leader providing downhole tool rentals for both
North American land and Gulf of
Mexico deepwater drilling operations, DTI's extensive rental
model, broad distribution capabilities and diverse customer base
across multiple basins provides us with a significant competitive
advantage, especially during volatile commodity price cycles. In
contrast to the larger capital-intensive equipment companies in the
oilfield services sector, our rental tools are easily deployable to
various locations to serve our clients' needs. We believe the
ability to scale our operations as needed across our extensive
footprint allows us to better support customers in the field, and,
with over 65,000 rental tools in our fleet, we are well positioned
to support our customers' activity.
"Additionally, we have established an M&A framework and
robust M&A pipeline that will allow us to selectively
consolidate the oilfield service rental tool industry. Our pending
acquisition of Superior Drilling Products, Inc. (NYSE American:
SDPI) is an outstanding example of how we are expanding DTI's
growth opportunities, both domestically and internationally, with a
particular focus on our presence in the Middle East. We are confident that this and
future acquisitions will drive innovation, enhance our product
offerings, and, as a result, increase shareholder value. We look
forward to discussing our fourth quarter and full year 2023 results
and our 2024 outlook on our conference call March 28th," concluded
Prejean.
2023 Fourth Quarter and Full Year Conference Call
Information
DTI also announced today that it plans to report actual 2023
fourth quarter and full year financial results prior to the
Company's live conference call, which can be accessed via dial-in
or webcast, on Thursday, March 28,
2024 at 11:00 a.m. Eastern Time (10:00 a.m. Central Time).
What:
|
Drilling Tools
International 2023 Fourth Quarter and Full Year Conference
Call
|
When:
|
Thursday, March 28,
2024 at 11:00 a.m. Eastern Time / 10:00 a.m. Central
Time
|
How:
|
Live via phone – By
dialing 1- 201-389-0869 and asking for the DTI call at least 10
minutes prior to the start time, or Live Webcast – By logging onto
the webcast at the address below
|
Where:
|
https://investors.drillingtools.com/news-events/events
|
For those who cannot listen to the live call, a replay will be
available through April 4, 2024, and
may be accessed by dialing 1-201-612-7415 and using passcode
13744642#. Also, an archive of the webcast will be available
shortly after the call at
https://investors.drillingtools.com/news-events/events for 90 days.
Please submit any questions for management prior to the call
via email to DTI@dennardlascar.com.
About Drilling Tools International Corp.
DTI, with roots dating back to 1984, 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.
DTI operates from 16 locations across North America and has 4 International stocking
points across Europe and the
Middle East. To learn more
about DTI, please visit: www.drillingtools.com.
Contact:
DTI Investor Relations
Ken Dennard / Rick Black
InvestorRelations@drillingtools.com
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 remain the sole North American
distributor of the Drill-N-Ream; (4) DTI's ability to employ and
retain a sufficient number of skilled and qualified workers,
including its key personnel; (5) DTI's ability to source tools and
raw materials at a reasonable cost; (6) DTI's ability to market its
services in a competitive industry; (7) DTI's ability to execute,
integrate and realize the benefits of acquisitions, and manage the
resulting growth of its business; (8) 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; (9) DTI's ability to obtain
additional capital; (10) 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; (12) DTI's ability to comply
with applicable laws, regulations and rules, including those
related to the environment, greenhouse gases and climate change;
(13) DTI's ability to maintain an effective system of disclosure
controls and internal control over financial reporting; (14) the
potential for volatility in the market price of DTI's common stock;
(15) the impact of increased legal, accounting, administrative and
other costs incurred as a public company, including the impact of
possible shareholder litigation; (16) the potential for issuance of
additional shares of DTI's common stock or other equity securities;
(17) DTI's ability to maintain the listing of its common stock on
Nasdaq; and (18) other risks and uncertainties separately provided
to you and indicated from time to time described in filings and
potential filings by DTI with the Securities and Exchange
Commission (the "SEC"). You should carefully consider the risks and
uncertainties described in the definitive proxy
statement/prospectus/consent solicitation statement with the SEC by
the Company on May 12, 2023 (the
"Proxy Statement"), and the information presented in DTI's current
report on Form 8-K filed June 27,
2023 (the "8-K") and the quarterly report on Form 10-Q filed
November 14, 2023 (the "10-Q"). 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. Actual results could differ
materially from those contemplated by the forward-looking
statements as a result of certain factors detailed in the Proxy
Statement, the 8-K or the 10-Q. 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. Forward-looking statements are subject to numerous
conditions, many of which are beyond the control of each of DTI,
including those set forth in the Risk Factors section of the Proxy
Statement, and described in the 8-K and the 10-Q. The Company
undertakes no obligation to update these statements for revisions
or changes after the date of this release, except as required by
law.
Information Regarding Preliminary Results
The preliminary estimated financial information contained in
this news release reflects management's estimates based solely upon
information available to it as of the date of this news release and
is not a comprehensive statement of the Company's financial results
for twelve months ended December 31,
2023. The information presented herein should not be
considered a substitute for full unaudited financial statements for
the twelve months ended December 31,
2023, or audited financial statements for the fiscal year
ended December 31, 2023, once they
become available and should not be regarded as a representation by
the Company or its management as to its actual financial results
for the twelve months ended December 31,
2023. The ranges for the preliminary estimated financial
results described above constitute forward-looking statements. The
preliminary estimated financial information presented herein is
subject to change, and the Company's actual financial results may
differ from such preliminary estimates and such differences could
be material. Accordingly, you should not place undue reliance upon
these preliminary estimates.
Non-GAAP Financial Measures
This release includes Adjusted EBITDA and Adjusted Free Cash
Flow 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).
The following tables present a reconciliation of the non-GAAP
financial measures of Adjusted EBITDA and Adjusted Free Cash Flow
to the most directly comparable GAAP financial measures for the
periods indicated:
Drilling Tools
International Corp.
|
Reconciliation of
Estimated Consolidated Net Income to Adjusted EBITDA
|
(In thousands of
U.S. dollars and rounded)
|
(Unaudited)
|
|
|
|
|
Twelve Months Ended
December 31, 2023
|
|
|
|
Low
|
|
High
|
Net Income
|
|
|
$
14,600
|
|
$
14,900
|
Add (deduct)
|
|
|
|
|
|
Interest expense,
net
|
|
|
900
|
|
1,150
|
Income tax
expense
|
|
|
4,800
|
|
5,100
|
Depreciation and
amortization
|
|
20,100
|
|
20,700
|
Management
fees
|
|
|
1,100
|
|
1,200
|
Other
expense
|
|
|
1,000
|
|
1,050
|
Stock option
expense
|
|
|
1,600
|
|
1,700
|
Transaction
expense
|
|
|
5,900
|
|
6,200
|
Adjusted
EBITDA
|
|
|
$
50,000
|
|
$
52,000
|
Revenue
|
|
|
150,000
|
|
154,000
|
Adjusted EBITDA
Margin
|
|
|
33 %
|
|
34 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drilling Tools
International Corp.
|
Reconciliation of
Estimated Consolidated Net Income to Adjusted Free Cash
Flow
|
(In thousands of
U.S. dollars and rounded)
|
(Unaudited)
|
|
|
|
|
Twelve Months Ended
December 31, 2023
|
|
|
|
Low
|
|
High
|
Net Income
|
|
|
$
14,600
|
|
$
14,900
|
Add (deduct)
|
|
|
|
|
|
Interest expense,
net
|
|
|
900
|
|
1,150
|
Income tax
expense
|
|
|
4,800
|
|
5,100
|
Depreciation and
amortization
|
|
20,100
|
|
20,700
|
Management
fees
|
|
|
1,100
|
|
1,200
|
Other
expense
|
|
|
1,000
|
|
1,050
|
Stock option
expense
|
|
|
1,600
|
|
1,700
|
Transaction
expense
|
|
|
5,900
|
|
6,200
|
Gross capital
expenditures
|
|
|
(43,000)
|
|
(44,000)
|
Adjusted Free Cash
Flow
|
|
|
$
7,000
|
|
$
8,000
|
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SOURCE Drilling Tools International Corp.