Nine Energy Service (NINE) Q1 2025 Earnings Call May 08, 2025 10:00 AM ET Speaker0 Greetings, and welcome to Nine Energy Service First Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this call is being recorded. I would now like to turn the conference over to your host, Heather Schmidt, Vice President, Strategic Development and Investor Relations. Speaker1 Thank yo ...

Q1 2025 IR Presentation DISCLAIMER 2 Forward-Looking Statements & Non-GAAP Financial Measures Certain statements in this presentation are forward-looking statements 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 presentation, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are for ...

Nine Energy Service (NINE) came out with a quarterly loss of $0.18 per share versus the Zacks Consensus Estimate of a loss of $0.15. This compares to loss of $0.24 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -20%. A quarter ago, it was expected that this oilfield services company would post a loss of $0.24 per share when it actually produced a loss of $0.22, delivering a surprise of 8.33%.Over the last four quarters, the c ...

Toronto, Ontario--(Newsfile Corp. - April 9, 2025) - NINE MILE METALS LTD. (CSE: NINE) (OTC Pink: VMSXF) (FSE: KQ9) (the "Company" or "Nine Mile") announces completion of the second tranche of a private placement (the "Offering") announced on January 21, 2025. The Company issued 6,309,699 units (each, a "Unit") at a price of $0.021 per Unit, for proceeds of $132.503. The Company fully closes the original Offering of $157,500 and the debt conversion in the first tranche previously announced February 4th, 202 ...

Investors interested in Oils-Energy stocks should always be looking to find the best-performing companies in the group. Nine Energy Service (NINE) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? A quick glance at the company's year-to-date performance in comparison to the rest of the Oils-Energy sector should help us answer this question.Nine Energy Service is a member of the Oils-Energy sector. This group includes 247 ...

Momentum investing is essentially an exception to the idea of "buying low and selling high." Investors following this style of investing are usually not interested in betting on cheap stocks and waiting long for them to recover. Instead, they believe that "buying high and selling higher" is the way to make far more money in lesser time.Everyone likes betting on fast-moving trending stocks, but it isn't easy to determine the right entry point. These stocks often lose momentum when their future growth potenti ...

Nine Energy Service, Inc (NYSE:NINE) Q4 2024 Results Conference Call March 6, 2025 10:00 AM ET Company Participants Heather Schmidt - Vice President, Strategic Development, Investor Relations & Marketing Ann Fox - President & Chief Executive Officer Guy Sirkes - Senior Vice President & Chief Financial Officer Conference Call Participants John Daniel - Daniel Energy Partners Waqar Syed - ATB Capital Markets Operator Greetings, and welcome to Nine Energy Service Earnings Conference Call for the Fourth Quarter ...

Group 1: Earnings Performance - Nine Energy Service reported a quarterly loss of $0.22 per share, better than the Zacks Consensus Estimate of a loss of $0.24, and an improvement from a loss of $0.30 per share a year ago, representing an earnings surprise of 8.33% [1] - The company posted revenues of $141.43 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 4.76%, although this is a decrease from year-ago revenues of $144.07 million [2] - Over the last four quarters, Nine Energy has surpassed consensus EPS estimates three times [2] Group 2: Stock Performance and Outlook - Nine Energy shares have declined approximately 6.3% since the beginning of the year, compared to a decline of 1.8% for the S&P 500 [3] - The company's earnings outlook is mixed, with the current consensus EPS estimate for the coming quarter at -$0.24 on revenues of $136 million, and -$0.75 on revenues of $563 million for the current fiscal year [7] - The Zacks Rank for Nine Energy is currently 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Group 3: Industry Context - The Oil and Gas - Field Services industry, to which Nine Energy belongs, is currently ranked in the bottom 42% of over 250 Zacks industries, suggesting that the industry outlook may negatively impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Operational Performance - Nine Energy Service completed approximately 26,000 cementing jobs from January 2018 through December 2024, achieving an on-time rate of approximately 89%[29]. - The company deployed approximately 557,700 isolation, stage one, and casing flotation tools from January 2018 through December 2024[31]. - Nine Energy Service completed approximately 189,500 wireline stages with a success rate of over 99% from January 2018 through December 2024[33]. - The company performed approximately 8,300 coiled tubing jobs and deployed more than 218 million running feet of coiled tubing, also with a success rate of over 99% from January 2018 through December 2024[36]. - The company operates in all major onshore basins in the U.S. and has a strategic geographic diversity that helps mitigate basin and commodity risk[39]. - Nine Energy Service's engineering and technology efforts focus on providing efficient and cost-effective solutions to maximize production across major North American onshore basins and abroad[51]. - The company has invested in high-quality cementing equipment and customized design twin-pumping units to reduce downtime risks[28]. Customer Concentration and Revenue - For the year ended December 31, 2024, the top five customers collectively accounted for approximately 25% of Nine Energy Service's revenues[43]. - The five largest customers accounted for approximately 25% of total revenues in 2024, indicating significant customer concentration risk[134]. - The company generated approximately 0.3% of its revenue from operations in western Canada for both 2024 and 2023, highlighting a limited geographical revenue source[128]. Market Sensitivity and Economic Conditions - Demand for Nine Energy Service's services is highly sensitive to current and expected commodity prices, reflecting the cyclical nature of the oil and gas industry[44]. - The company’s operations may be adversely affected by a decline in general economic conditions or a weakening of the broader energy industry, particularly during economic slowdowns[94]. - The volatility in oil and natural gas prices significantly influences the capital spending patterns of customers, impacting the company's revenue[90]. - The company’s business is cyclical and heavily reliant on capital expenditures by oil and natural gas companies, which are subject to market conditions beyond its control[88]. Regulatory Environment - The company is subject to stringent environmental regulations, including the Clean Water Act, which imposes strict controls on pollutant discharges[67]. - In December 2023, the EPA issued a final rule to reduce methane emissions from new and existing oil and gas sources, making existing regulations more stringent[69]. - The Inflation Reduction Act of 2022 imposes a fee on GHG emissions from certain oil and gas facilities, starting at $900 per ton for 2024, increasing to $1,200 in 2025 and $1,500 in 2026[74]. - The EPA's final emissions guidelines require states to develop plans to reduce methane emissions from existing sources by March 2026, with compliance deadlines extending to 2029 for existing sources[70]. - The U.S. aims to reduce GHG emissions by 50-52% by 2030 compared to 2005 levels, as part of the rejoining of the Paris Agreement[73]. - California's legislation requires companies to publicly disclose their Scopes 1, 2, and 3 GHG emissions, with third-party assurance, starting in October 2023[76]. - The Waste Emissions Charge rule could increase operating costs in the oil and gas industry, potentially affecting business operations and financial performance[74]. - New regulations on hydraulic fracturing could lead to increased operational costs and compliance burdens for customers, potentially reducing demand for services[81]. - Increased regulatory oversight of hydraulic fracturing may lead to additional permit requirements and operational restrictions, adversely impacting financial conditions[81]. Financial Performance - Revenue for 2024 was $554,104, a decrease of $55,422 or 9% compared to $609,526 in 2023[221]. - Adjusted gross profit for 2024 was $97,375, down $21,401 or 18% from $118,776 in 2023[221]. - Net loss for 2024 was $41,082, an increase of $8,869 or 28% compared to a net loss of $32,213 in 2023[221]. - General and administrative expenses decreased by $8,519 or 14% from $59,817 in 2023 to $51,298 in 2024[221]. Risks and Challenges - The company faces substantial operational risks and expenses related to the implementation of its sustainability strategy, which may affect its financial condition and reputation[104]. - Unfavorable ESG ratings could lead to negative investor sentiment and impact the company's stock price and access to capital[106]. - The company may not be able to generate sufficient cash flow to service all of its indebtedness, which could force asset sales or restructuring[110]. - The company is exposed to interest rate risk due to variable rates on borrowings under the ABL Credit Facility, which could increase debt service obligations[109]. - The company faces risks related to customer creditworthiness, as many customers are concentrated in the volatile domestic and Canadian E&P industry[132]. - The company is subject to litigation risks related to personal injury and employment claims, which could adversely affect financial results[140]. Technology and Innovation - The company has a strong focus on research and technology, aiming to introduce new or improved products and services to the market[50]. - The company has developed proprietary downhole tools and techniques through internal resources and strategic partnerships, providing exclusive rights to market unique technology in designated regions[52]. - The company emphasizes technological capabilities and customer service over patents and licenses to distinguish itself from competitors[53]. - The company relies on a combination of patents and trade secret laws to protect its proprietary technology, but there are limitations to these protections[160]. Future Outlook - The company remains cautiously optimistic about the energy sector outlook, expecting potential upside in North American activity levels if natural gas prices remain supportive[218]. - The company anticipates revenue and profitability for Q1 2025 will be higher compared to Q4 2024 due to recent market share gains and supportive commodity prices[217].

Financial Performance - Fourth quarter 2024 revenues were $141.4 million, with a net loss of $(8.8) million, resulting in a loss of $(0.22) per diluted share[2] - Full year 2024 revenues totaled $554.1 million, with a net loss of $(41.1) million and adjusted EBITDA of $53.2 million[5] - Revenues for the year ended December 31, 2024, were $554,104 million, compared to $609,526 million in 2023, reflecting a decline of about 9.1%[33] - Adjusted EBITDA for the year ended December 31, 2024, was $53,204 million, down from $72,966 million in 2023, a decrease of approximately 27%[28] - Gross profit for the year ended December 31, 2024, was $61,097 million, down from $80,159 million in 2023, a decrease of approximately 23.7%[33] - Adjusted gross profit for the year ended December 31, 2024, was $97,375 million, down from $118,776 million in 2023, a decrease of approximately 18%[33] - Net loss for the year ended December 31, 2024, was $41,082 million, compared to a net loss of $32,213 million in 2023, representing an increase in losses of about 27.5%[26] Liquidity and Capital Structure - Total liquidity as of December 31, 2024, was $52.1 million, consisting of $27.9 million in cash and cash equivalents and $24.2 million available under the revolving credit facility[12] - Cash and cash equivalents decreased from $30,840 million at the beginning of the period to $27,880 million at the end of the period, a decline of about 6.3%[26] - Total assets decreased from $401,984 million in 2023 to $360,076 million in 2024, a decline of approximately 10.4%[24] - Total liabilities decreased from $437,614 million in 2023 to $426,140 million in 2024, a reduction of approximately 2.7%[24] - Stockholders' equity deficit increased from $(35,630) million in 2023 to $(66,064) million in 2024, indicating a worsening of the equity position[24] Operational Efficiency and Safety - The Total Recordable Incident Rate (TRIR) improved by approximately 22% from 2023 to 0.49, indicating enhanced operational safety[6] - The average US rig count remained flat in Q4 2024, yet the company achieved a ~2% revenue increase quarter over quarter[5] - Cementing revenue increased approximately 20% from Q2 to Q4 2024, with a Q4 cementing market share of approximately 19%, up 14% from Q4 2023[4] Future Outlook - The company expects 2025 US activity levels to be mostly stable, anticipating sequential revenue and profitability increases in Q1 compared to Q4 2024[6] Cost Management - General and administrative expenses for the year ended December 31, 2024, were $51.3 million, down from $59.8 million in 2023[9] Return on Invested Capital - The company generated a return on invested capital (ROIC) of (14.9)% for the full year 2024, with an adjusted ROIC of 3.7%[7] - ROIC for the year ended December 31, 2024, was -14.9%, compared to -10.8% in 2023, indicating a decline in return on invested capital[31] - Adjusted return on invested capital (adjusted ROIC) is defined as adjusted after-tax net operating profit (loss) divided by average total capital[36] - Management believes adjusted ROIC provides useful information regarding financial condition and operational results[36] - Adjusted ROIC quantifies the generation of operating income relative to the capital invested in the business[36] - The measure illustrates the profitability of a business or project considering the capital invested[36] - Management uses adjusted ROIC for capital resource allocation decisions and evaluating business performance[36] Innovation and Technology - New technologies, including the Pincer Hybrid Frac Plug, were introduced in 2024, with a focus on continued innovation in 2025[4]