ABL Amendment Provides Additional Financial
Flexibility, Extends Maturity to 2029 and Modifies Certain
Financial Covenants
New Term Loan Adds $25 Million of Increased Borrowing
Capacity
HOUSTON, March 18,
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
announced that it has completed an amendment (the "ABL Amendment")
to its existing Amended and Restated Senior Secured Asset-Based
Revolving Credit, Security And Guaranty Agreement, with PNC
Business Credit, a division of PNC
Bank, National Association (the "ABL Credit
Facility").
The ABL Amendment, among other things, increases the borrowing
capacity from $60 million to $80 million, improves
pricing to SOFR + 2.50%, and removes certain negative financial
covenants. Additionally, the maturity date of the ABL Credit
Facility has been extended to March 2029.
DTI also announced it has entered into a new $25 million Term Loan ("Term Loan"), also with
PNC, to further support its growth strategy. The Term Loan is
secured by a mix of rental fleet assets and machinery and
equipment. Pricing on the Term Loan is SOFR + 4.00% The Term Loan
matures in March 2029.
"Since 2015, we have valued our partnership with and the
continued support of PNC, which demonstrates their confidence in
our management team, business model and outlook," said David Johnson, DTI's Chief Financial Officer.
"The completion of this refinancing is an important step in DTI's
trajectory and provides us with more favorable terms under which we
can continue to invest in the growth and evolution of the Company,
including further expanding our footprint internationally.
This influx of capital also gives us additional financial
flexibility to execute on our M&A initiatives while we continue
to deliver best-in-class products and services to our clients."
The ABL Amendment and new Term Loan were entered into with PNC
Bank acting as the sole lender and PNC Business Credit served as
Administrative Agent. Winston & Strawn served as legal
counsel for DTI and Holland &
Knight represented PNC Business Credit.
Additional details on the Company's refinancing will be included
in today's Form 8-K filing with the Securities and Exchange
Commission, which investors are encouraged to read in its
entirety.
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 visit: www.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 the proposed
transaction, including any statements regarding the expected
timetable for completing the proposed transaction, benefits of the
proposed transaction, 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 market
its services in a competitive industry; (9) DTI's ability to
execute, integrate and realize the benefits of acquisitions, and
manage the resulting growth of its business; (6) 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; (7) DTI's
ability to obtain additional capital; (8) potential political,
regulatory, economic and social disruptions in the countries in
which DTI conducts business, including changes in tax laws or tax
rates; (9) 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; (10) DTI's ability
to comply with applicable laws, regulations and rules, including
those related to the environment, greenhouse gases and climate
change; (11) DTI's ability to maintain an effective system of
disclosure controls and internal control over financial reporting;
(12) the potential for volatility in the market price of DTI's
common stock; (13) the impact of increased legal, accounting,
administrative and other costs incurred as a public company,
including the impact of possible shareholder litigation; (14) the
potential for issuance of additional shares of DTI's common stock
or other equity securities; (15) DTI's ability to maintain the
listing of its common stock on Nasdaq. You should carefully
consider the risks and uncertainties described in 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
above and in the proxy statement, the 8-K or the 10-Q. All
subsequent written or oral forward-looking statements attributable
to DTI 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 DTI
and described in the 8-K and the 10-Q. DTI undertakes no obligation
to update these statements for revisions or changes after the date
of this release, except as required by law.
Contacts:
DTI Investor Relations
Ken Dennard / Rick Black
InvestorRelations@drillingtools.com
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SOURCE Drilling Tools International Corp.