HOUSTON, July 24, 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 plans to report 2025 second quarter financial results prior to the Company's live confer ...

Summary of Drilling Tools International (DTI) Conference Call Company Overview - **Company Name**: Drilling Tools International (DTI) - **Ticker Symbol**: DTI - **CEO**: Wayne Prejean - **Industry**: Oil and Gas Equipment Rental Key Financial Highlights - **Q1 Revenue**: Approximately $42.9 million, representing a 16% quarter-to-quarter increase [6] - **Geographic Revenue Distribution**: 89% from the Western Hemisphere and 11% from the Eastern Hemisphere [6] - **2025 Financial Outlook**: Expected adjusted free cash flow between $14 million and $19 million [28] Business Model and Operations - **Primary Business**: Rental tools for drilling, completion, and production in the oil and gas sector [8] - **Customer Base**: Focus on oil and gas companies and service companies, with minimal rentals to drilling contractors [9] - **Product Offerings**: Includes downhole tools, drill pipe, BHA components, and completion tools [11][12] - **Manufacturing Locations**: Facilities in Brewster, Louisiana; Vernal, Utah; and NISQ Canada, with partnerships in Asia, Europe, and the Middle East [13] Technology and Innovation - **Asset Management System**: Introduction of the Compass system for order management and transparency [14] - **Acquisitions**: Four acquisitions in nine months, expanding product offerings from 2 to 16 patented products [15] Market Dynamics and Strategy - **Market Conditions**: Acknowledgment of market volatility due to tariffs and OPEC+ actions, leading to a cautious capital spending environment among oil companies [38][39] - **Growth Strategy**: Focus on mergers and acquisitions (M&A) to consolidate and grow in a fragmented industry [20][29] - **Geographic Expansion**: Plans to increase Eastern Hemisphere revenue contribution from 1% in 2023 to an expected 16% in 2025 [27] Financial Management and Capital Allocation - **Capital Allocation Priorities**: Balancing debt reduction, share buybacks, and M&A opportunities based on market conditions [46] - **Share Repurchase Program**: Authorized a $10 million share repurchase program to enhance shareholder value [16][17] Competitive Landscape - **Market Position**: DTI leads in several downhole tool categories, with a competitive landscape consisting of a few substantial players and many smaller suppliers [50][51] - **Differentiation**: Emphasis on technology deployment and customer-centric focus to maintain competitive advantage [14][29] Conclusion - **Resilience and Future Outlook**: Despite current market challenges, DTI remains committed to growth through strategic initiatives and maintaining a strong balance sheet [54]

Company Overview - Drilling Tools International Corp. (DTI) is a global oilfield services company specializing in the design, engineering, manufacturing, and rental of tools for onshore and offshore horizontal and directional drilling operations [1][4] - The company has a history dating back to 1984 and operates 15 service and support centers in North America, along with 11 international centers across the EMEA and APAC regions [4] Conference Participation - DTI will participate in the Sidoti & Company June 2025 Small-Cap Virtual Conference on June 11-12, 2025 [1] - The company will webcast its investor presentation on June 12th at 12:15 PM EDT, with free registration available [2] - Management will also conduct virtual one-on-one meetings with investors during the conference [2] Investor Relations - A copy of the investor presentation will be available on the Investor Relations section of DTI's website [3] - A replay of the webcast will be archived on the company's Events and Presentations page following the event [3]

Revenue Performance - Total revenue for the three months ended March 31, 2025, was $42.88 million, a 16% increase from $36.97 million in the same period of 2024[190] - Tool rental revenues accounted for 81% of total revenues, while product sales contributed 19%, consistent with the previous year[180] - Western Hemisphere revenue increased by $2.89 million, or 8%, to $41.2 million, driven by the addition of the Diamond Products Division[191] - Eastern Hemisphere revenue surged by $3.8 million, or 305%, to $5.1 million, primarily due to acquisitions in the rental business[192] - 29.0% of total revenue in Q1 2025 was generated from two customers, slightly down from 30.0% in Q1 2024[216] Operating Income and Expenses - Total operating income decreased by 36% to $3.3 million, impacted by rising corporate expenses and interest costs[190] - Interest expense rose significantly by 619% to $1.3 million, attributed to new loans and credit facility draws[194] - Adjusted EBITDA for the three months ended March 31, 2025, was $10.75 million, slightly down from $10.89 million in the prior year[199] Cash Flow and Liquidity - Cash and cash equivalents stood at $2.8 million as of March 31, 2025, with sufficient liquidity expected for the next 12 months[200] - Net cash provided by operating activities for Q1 2025 was $2.4 million, down from $3.3 million in Q1 2024, driven by a net loss of $1.7 million[206] - Net cash used in investing activities for Q1 2025 was $7.3 million, including $5.0 million for property, plant, and equipment purchases and $5.6 million for the acquisition of Titan[207] - Net cash provided by financing activities for Q1 2025 was $1.4 million, compared to a net cash outflow of $24.6 million in Q1 2024[209] Market Conditions - The average U.S. rig count in the Western Hemisphere decreased to 930 from 995 year-over-year, while the Eastern Hemisphere count increased to 757 from 725[187] - U.S. oil production reached a record high of 13.5 million barrels per day, but crude oil prices fell from $78.41 to $71.84 per barrel[186] Risks and Challenges - Cash and cash equivalents may exceed insurance limits, posing a concentration risk[215] - The company has not entered into hedging arrangements to mitigate foreign currency exchange rate fluctuations, which may impact future cash flows[217] - Rising international tariffs could adversely affect the company's business and results of operations[219] - The company has established a cybersecurity incident response plan, but there is no assurance that it will fully mitigate cybersecurity risks[222]

Financial Data and Key Metrics Changes - The company reported a 16% year-over-year revenue growth and an 8% increase compared to the fourth quarter of 2024 [6][12] - Adjusted EBITDA grew nearly 18% year-over-year and remained flat sequentially [7] - Total consolidated revenue for the first quarter was $42.9 million, with tool rental revenue of approximately $34.5 million and product sales revenue of $8.3 million [12] - Adjusted free cash flow for the first quarter was $5.7 million, with net debt of $52.1 million [12][13] - The company recorded a noncash goodwill impairment of approximately $1.9 million, which does not affect day-to-day operations or liquidity [13] Business Line Data and Key Metrics Changes - The Western Hemisphere segment, which includes directional tool rentals and wellbore optimization tools, remained steady [14] - The Eastern Hemisphere segment, which includes deep casing tools and European drilling projects, showed some volatility, but tool rental revenue increased significantly compared to Q1 of 2024 [15] - The decline in product sales was primarily attributed to deep casing tools, which are expected to see increased demand in 2025 as customer-owned inventory depletes [15] Market Data and Key Metrics Changes - Despite a 6% global rig count decline, the company managed to increase revenue, validating its M&A strategy to strengthen its business model [12] - The Eastern Hemisphere accounted for 11% of total revenue in Q1, with expectations for growth as the year progresses [16] Company Strategy and Development Direction - The company is executing a two-phase strategy to manage potential disruptions in order flow due to market volatility [7] - A share buyback authorization of up to $10 million has been approved, reflecting confidence in the stock's value [11] - The company is focused on cost reduction measures, anticipating $6 million in annual savings [18] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about increased volatility and uncertainty in the marketplace due to tariffs and potential recession impacts [7] - The company has adjusted its 2025 revenue guidance to a range of $145 million to $165 million, with adjusted EBITDA expected between $32 million and $42 million [19] - Management remains optimistic about the demand for complex wellbore solutions and believes that their differentiated technology will provide value to clients [22] Other Important Information - The company is maintaining its planned capital expenditures to support growth in its RotoShear product line and international expansion [16] - Maintenance capital expenditures were approximately 10% of total revenue, reflecting a trend of lower investment due to declining rig counts [17] Q&A Session Summary Question: How is the company maintaining free cash flow in a challenging environment? - Management highlighted cost reductions and strategic CapEx management to preserve EBITDA margins [26][29] Question: What is the outlook for the Eastern Hemisphere, particularly in Saudi Arabia? - Management noted flat conditions in the Middle East but mentioned that they are gaining traction in other areas despite rig count softness [30][32] Question: How does the company view the North American market for the back half of the year? - Management anticipates some softness in the U.S. market but noted that Canadian operations may be more resilient [40][42] Question: Can you elaborate on the CapEx program and growth focus? - The focus will be on new technology and tools with growth potential, while sustaining the existing rental fleet [53]

Financial Data and Key Metrics Changes - The company reported a 16% year-over-year revenue growth, reaching $42.9 million, and an 8% increase compared to the fourth quarter of 2024 [5][12] - Adjusted EBITDA grew nearly 18% year-over-year, remaining flat sequentially at $10.8 million [6][12] - Adjusted free cash flow for the first quarter was $5.7 million, with net debt reported at $52.1 million [12][13] Business Line Data and Key Metrics Changes - Tool rental revenue was approximately $34.5 million, while product sales revenue was $8.3 million [12] - The Western Hemisphere segment remains steady, while the Eastern Hemisphere, which includes deep casing tools and European drilling projects, showed some volatility [14][15] - The Eastern Hemisphere accounted for 11% of total revenue in Q1, with expectations for growth as the year progresses [16] Market Data and Key Metrics Changes - Despite a 6% global rig count decline, the company managed to increase revenue, indicating resilience in its business model [12][19] - The company anticipates a further decline in North American land rig counts, adjusting its revenue and EBITDA guidance accordingly [18][19] Company Strategy and Development Direction - The company is executing a two-phase strategy to mitigate potential disruptions, including negotiating with suppliers and implementing a cost reduction program expected to save $6 million annually [6][11] - A share buyback authorization of up to $10 million has been approved, reflecting confidence in the company's stock valuation [11][12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged increased volatility and uncertainty in the marketplace due to tariffs, potential recession, and OPEC+ production decisions [6][19] - The company has adjusted its 2025 revenue guidance to a range of $145 million to $165 million, with adjusted EBITDA expected between $32 million and $42 million [19] Other Important Information - A noncash goodwill impairment of approximately $1.9 million was recorded, which does not affect day-to-day operations or liquidity [13] - The company is focused on maintaining operational agility and identifying future cost reduction opportunities to enhance shareholder value [11][20] Q&A Session Summary Question: Insights on maintaining free cash flow amidst challenges - Management emphasized cost reductions and aligning CapEx with projected activity to preserve EBITDA margins [24][26] Question: Growth expectations in the Eastern Hemisphere - Management noted flat conditions in the Middle East but highlighted emerging technologies gaining traction, which could offset declines [27][28] Question: North American market outlook - Management indicated a slow downturn in the U.S. market, with regional variances based on oil prices and economic conditions [45][46] Question: Capital allocation and guidance - Management acknowledged the wide range in interest expense guidance due to potential debt reduction and share buyback considerations [39][40]

NASDAQ: DTI INVESTOR PRESENTATION SUMMER 2025 DRILLINGTOOLS.COM FORWARD LOOKING STATEMENTS General: Drilling Tools International Corporation ("DTI") is making this presentation available in connection with the release of its financial results for the three months and full year ended December 31, 2024. The information contained in this presentation does not purport to be all-inclusive or to contain all information that prospective investors may require. Prospective investors are encouraged to conduct their o ...

Group 1 - Drilling Tools International Corp. (DTI) reported quarterly earnings of $0.02 per share, missing the Zacks Consensus Estimate of $0.04 per share, and down from $0.13 per share a year ago, representing an earnings surprise of -50% [1] - The company posted revenues of $42.88 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 6.76%, compared to year-ago revenues of $36.97 million [2] - DTI shares have lost about 19.9% since the beginning of the year, while the S&P 500 has declined by -0.6% [3] Group 2 - The current consensus EPS estimate for the coming quarter is $0.04 on revenues of $41.22 million, and for the current fiscal year, it is $0.20 on revenues of $166.22 million [7] - The Zacks Industry Rank for Oil and Gas - Field Services is currently in the bottom 27% of over 250 Zacks industries, indicating potential underperformance compared to the top 50% of ranked industries [8]

Executive Summary [First Quarter 2025 Financial Highlights](index=1&type=section&id=First%20Quarter%202025%20Financial%20Highlights) Drilling Tools International Corp. (DTI) reported total consolidated revenue of $42.9 million for the first quarter of 2025, marking a 16% increase year-over-year. Despite this growth, the company recorded a net loss of $1.7 million, or ($0.05) per diluted share. On an adjusted basis, net income was $0.7 million, or $0.02 per diluted share, with Adjusted EBITDA holding steady at $10.8 million Q1 2025 Financial Performance | Metric | Value (in millions, except per share data) | | :--- | :--- | | Total Consolidated Revenue | $42.9 | | Tool Rental Revenue | $34.5 | | Product Sales Revenue | $8.3 | | Operating Income | $3.3 | | Net Loss | $(1.7) | | Adjusted Net Income | $0.7 | | Diluted EPS | $(0.05) | | Adjusted Diluted EPS | $0.02 | | Adjusted EBITDA | $10.8 | | Adjusted Free Cash Flow | $5.7 | - Revenue demonstrated strong growth, increasing **7.6%** sequentially and **16%** compared to the first quarter of the previous year. Adjusted EBITDA was nearly flat sequentially but grew almost **18%** year-over-year[3](index=3&type=chunk) [Management Commentary and Outlook](index=1&type=section&id=Management%20Commentary%20and%20Outlook) Management acknowledged increased market volatility due to potential tariffs, recession fears, and OPEC+ decisions. In response, the company has initiated a $6 million expense reduction program for the year. Citing this uncertainty, DTI has adjusted its full-year 2025 guidance, now forecasting revenue between $145 million and $165 million and Adjusted EBITDA between $32 million and $42 million - The company is facing market uncertainty from potential tariffs, recession fears, and OPEC+ production decisions[4](index=4&type=chunk) - To mitigate risks, DTI has implemented a **$6 million** cost-cutting program and believes its strong US manufacturing base and diverse supply chain provide insulation from tariff impacts[4](index=4&type=chunk)[5](index=5&type=chunk) Updated 2025 Full Year Outlook | Metric | Low Range | High Range | | :--- | :--- | :--- | | Revenue | $145 million | $165 million | | Adjusted EBITDA | $32 million | $42 million | | Adjusted EBITDA Margin | 22% | 25% | | Adjusted Free Cash Flow | $14 million | $19 million | [Share Repurchase Program](index=2&type=section&id=Board%20Authorizes%20a%20%2410%20Million%20Repurchase%20Program) The Board of Directors has authorized a share repurchase program of up to $10 million of the company's outstanding common stock. Management stated this decision reflects confidence in DTI's long-term strategy and financial health, viewing the company's stock as an undervalued investment opportunity. The program is intended to enhance shareholder value by optimizing the capital structure - The Board of Directors authorized a program to repurchase up to **$10 million** of the company's common stock[8](index=8&type=chunk) - The repurchase program is part of a disciplined capital allocation strategy and is intended to enhance shareholder value, reflecting the belief that the stock is currently undervalued[8](index=8&type=chunk) - Repurchases may occur through open-market transactions, privately negotiated purchases, or other methods in accordance with securities laws[9](index=9&type=chunk) Financial Statements [Consolidated Statement of Operations](index=4&type=section&id=Consolidated%20Statement%20of%20Operations%20and%20Comprehensive%20Income%20%28Loss%29%20%28Unaudited%29) For the first quarter of 2025, total revenue grew 16.0% year-over-year to $42.9 million. However, operating income fell to $3.3 million from $5.1 million in the prior year, largely due to increased operating expenses and a $1.9 million goodwill impairment charge. This resulted in a net loss of $1.7 million, a significant downturn from the $3.1 million net income reported in Q1 2024 Q1 Statement of Operations Highlights (in thousands) | Metric | Q1 2025 | Q1 2024 | Change (YoY) | | :--- | :--- | :--- | :--- | | Total Revenue, net | $42,880 | $36,974 | +16.0% | | Operating Income | $3,303 | $5,130 | -35.6% | | Net Income (Loss) | $(1,669) | $3,126 | N/A | | Diluted EPS | $(0.05) | $0.11 | N/A | - The company recorded a goodwill impairment charge of **$1.9 million** in Q1 2025, which was not present in the prior-year period and significantly impacted profitability[15](index=15&type=chunk) - Selling, general, and administrative (SG&A) expenses increased by **20.4%** YoY to **$21.6 million**[15](index=15&type=chunk) [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets%20%28Unaudited%29) As of March 31, 2025, DTI's total assets were $233.2 million, an increase from $222.4 million at the end of 2024. Total liabilities rose to $110.5 million from $102.5 million over the same period, driven by increases in accounts payable and the revolving line of credit. Cash and cash equivalents decreased from $6.2 million to $2.8 million during the quarter Balance Sheet Summary (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash | $2,789 | $6,185 | | Total Current Assets | $67,374 | $68,076 | | Total Assets | $233,169 | $222,431 | | Total Current Liabilities | $34,801 | $30,963 | | Total Liabilities | $110,473 | $102,472 | | Total Shareholders' Equity | $122,696 | $119,959 | - The revolving line of credit increased to **$30.0 million** from **$27.1 million** at the end of the previous year[17](index=17&type=chunk) [Consolidated Statement of Cash Flows](index=6&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows%20%28Unaudited%29) In Q1 2025, the company generated $2.4 million in cash from operating activities, a decrease from $3.3 million in Q1 2024. Cash used in investing activities was $7.3 million, mainly for a business acquisition ($5.6 million) and equipment purchases ($5.0 million). Cash from financing activities was a net inflow of $1.4 million. Overall, cash decreased by $3.4 million during the quarter Q1 Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash from operating activities | $2,431 | $3,311 | | Net cash from investing activities | $(7,280) | $(19,585) | | Net cash from financing activities | $1,392 | $24,611 | | **Net Change in Cash** | **$(3,396)** | **$8,046** | - Investing activities were significant, with **$5.6 million** used for a business acquisition and **$5.0 million** for the purchase of property, plant, and equipment[19](index=19&type=chunk) Non-GAAP Financial Measures and Reconciliations [Definition of Non-GAAP Measures](index=7&type=section&id=Definition%20of%20Non-GAAP%20Measures) The company utilizes non-GAAP financial measures such as Adjusted EBITDA, Adjusted Free Cash Flow, Net Debt, and Adjusted Net Income to supplement its GAAP results. These metrics are intended to provide a clearer view of ongoing operational performance by excluding items that management believes are not reflective of the core business, such as impairment charges, transaction costs, and stock-based compensation - Adjusted EBITDA is defined as net earnings adjusted for interest, taxes, depreciation, amortization, goodwill impairment, stock-based compensation, and other non-recurring items[21](index=21&type=chunk) - Adjusted Free Cash Flow is calculated as Adjusted EBITDA less Gross Capital Expenditures[23](index=23&type=chunk) - Adjusted Net Income and Adjusted Diluted EPS exclude non-recurring items like goodwill impairment and transaction costs to better evaluate operating performance[25](index=25&type=chunk)[26](index=26&type=chunk) [Reconciliation of GAAP to Non-GAAP Measures](index=8&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) For Q1 2025, DTI reconciled its GAAP net loss of $1.7 million to a non-GAAP Adjusted EBITDA of $10.8 million. Key adjustments included adding back $6.7 million for depreciation and amortization and a $1.9 million goodwill impairment. The GAAP net loss was also reconciled to an Adjusted Net Income of $0.7 million, or $0.02 per adjusted diluted share. Adjusted Free Cash Flow for the quarter was $5.7 million Reconciliation of Net Loss to Adjusted EBITDA (Q1 2025, in thousands) | Line Item | Amount | | :--- | :--- | | **Net loss** | **$(1,669)** | | Depreciation and amortization | $6,722 | | Interest expense, net | $1,309 | | Goodwill impairment | $1,901 | | Other adjustments | $2,491 | | **Adjusted EBITDA** | **$10,754** | Reconciliation of Net Loss to Adjusted Net Income (Q1 2025, in thousands) | Line Item | Amount | | :--- | :--- | | **Net loss** | **$(1,669)** | | Transaction expense | $732 | | Goodwill impairment | $1,901 | | Income tax expense (benefit) | $(159) | | **Adjusted Income Before Tax** | **$805** | | Adjusted Income tax expense | $(70) | | **Adjusted Net Income** | **$735** | - Adjusted Free Cash Flow for Q1 2025 was **$5.7 million**, compared to **$4.7 million** in Q1 2024[31](index=31&type=chunk)

Core Insights - Drilling Tools International Corp. (DTI) reported a total consolidated revenue of $42.9 million for Q1 2025, with a 7.6% sequential growth and a 16% year-over-year increase [2][3] - The company has authorized a $10 million share repurchase program to enhance shareholder value, reflecting confidence in its long-term strategy and financial health [8][9] Financial Performance - Tool Rental revenue was approximately $34.5 million, while Product Sales revenue totaled $8.3 million [2] - Total Operating Expenses were $39.6 million, resulting in an Operating Income of $3.3 million and a Net Loss of approximately $1.7 million for the quarter [2][15] - Adjusted EBITDA for the quarter was $10.8 million, with an Adjusted Free Cash Flow of $5.7 million [2][29] Guidance and Market Outlook - The company has adjusted its annual guidance for 2025, projecting Revenue between $145 million and $165 million, Adjusted EBITDA between $32 million and $42 million, and Adjusted Free Cash Flow between $14 million and $19 million [6][31] - DTI anticipates potential market volatility due to factors such as tariffs, recession fears, and OPEC+'s production decisions, prompting a $6 million expense reduction program [4][6] Strategic Initiatives - The share repurchase program is part of DTI's disciplined capital allocation strategy, which also includes investments in maintenance, organic growth, and strategic acquisitions [8][9] - The company aims to optimize its capital structure and demonstrate a commitment to returning excess capital to shareholders through this program [9][10]