KLX Energy Services(KLXE)2024-09-16 11:49Financial Performance - KLX Energy Services reported LTM revenue of 180 million, a 3% sequential increase despite a 3% decline in average rig count[28]. - Adjusted EBITDA increased 125% sequentially to 239.6 million, compared to (9.2) million, with a net loss margin of (3.8)%[40]. - Revenue for Q2 2023 was 239.6 million in Q1 2023[39]. - Adjusted EBITDA for KLX Energy Services was 149.2 million in Q4 2022[57]. - KLX Energy Services generated free cash flow of 11.8 million in Q1 2023[54]. Profitability and Margins - The company achieved an Adjusted EBITDA margin of 21% for the period ending June 30, 2024[9]. - Adjusted EBITDA margin for Q1 2023 was 16.6%, up from 3.2% in Q1 2022[36]. - Adjusted SG&A Margin for KLX Energy Services was 8.4% in Q1 2023, compared to 8.7% in Q4 2022[52]. - The Southwest segment reported an adjusted EBITDA of 198 million, reduced by 1% sequentially, with a net leverage ratio of 1.8x[28]. - Net Debt decreased to 198.0 million in Q2 2023[57]. - Net Leverage Ratio improved to 1.3 in Q2 2023, down from 1.9 in Q1 2023[57]. Cost Management and Synergies - The merger with QES is expected to generate over 50 million in annual recurring cost synergies, reducing SG&A as a percentage of revenue from 21% to 11%[11]. - The company enacted approximately 16 million in annualized cost reductions in Q2 2024, primarily from operational streamlining initiatives[28]. - One-time costs in Q2 2024 related to professional services and impairment were noted, impacting overall financial performance[41]. Market Presence and Customer Base - The company has a strong presence in key U.S. oil and gas basins, with 39% of revenue from the Southwest, 34% from the Rockies, and 27% from Northeast/Mid-Con[9]. - Unique customers serviced in 2023 totaled approximately 680, with no single customer accounting for more than 10% of 2023 revenue[18]. - 90% of 2023's top 10 customers were among the top 20 operators by rig count as of December 2023[19]. Product and Technology Development - KLX Energy Services has 38 patents supporting its proprietary products and services, enhancing its competitive edge[9]. - The company aims to expand its integrated suite of proprietary technology and products, focusing on margin-enhancing utilization and pricing strategies[10]. - KLX's proprietary technologies, such as the SHRIMPTM and Oracle SRT Extended Reach Tool, support operational efficiency and innovation[16]. - The company is focusing on market expansion and new product development to drive future growth[41]. Mergers and Acquisitions - The company has pursued two major M&A transactions in the last four years, focusing on strategic fit and financial returns[26]. - The recent acquisition of Greene's is expected to enhance KLX's frac rental and flowback offerings, broadening its market presence[12].