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KLX Energy Services(KLXE) - 2024 Q3 - Quarterly Report
KLXEKLX Energy Services(KLXE)2024-10-31 20:34
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Revenue Performance - For the three months ended September 30, 2024, total revenue was 188.9million,adecreaseof188.9 million, a decrease of 31.7 million or 14.4% compared to 220.6millioninthesameperiodof2023[95].−RevenuefromtheRockyMountainssegmentdecreasedby220.6 million in the same period of 2023[95]. - Revenue from the Rocky Mountains segment decreased by 9.1 million or 11.8%, while the Southwest segment also saw a decrease of 9.2millionor11.89.2 million or 11.8%[95]. - The Northeast/Mid-Con segment experienced a revenue decline of 13.4 million or 20.4%, driven entirely by a decrease in weighted average price[95]. - For the quarter ended September 30, 2024, total revenue was 543.8million,adecreaseof543.8 million, a decrease of 150.4 million or 21.7% compared to 694.2millionintheprioryearperiod[105].−FortheninemonthsendedSeptember30,2024,totalrevenuewas694.2 million in the prior year period[105]. - For the nine months ended September 30, 2024, total revenue was 543.8 million, a decrease of 21.7% compared to the prior year[105]. Operating Performance - Operating income for the quarter was 1.1million,down93.31.1 million, down 93.3% from 16.4 million in the prior year, primarily due to reduced activity and pricing[100]. - Operating loss for the nine months was 10.6million,comparedtooperatingincomeof10.6 million, compared to operating income of 54.9 million in the prior year[110]. Net Income and Loss - Net loss for the quarter was 8.2million,comparedtonetincomeof8.2 million, compared to net income of 7.6 million in the prior year period, driven by lower revenues[103]. Costs and Expenses - Cost of sales for the quarter was 142.3million,maintaining75.3142.3 million, maintaining 75.3% of sales, with labor costs per employee decreasing by 2.4%[97]. - Selling, general and administrative expenses (SG&A) were 21.2 million, or 11.2% of revenues, up from 18.6millionor8.418.6 million or 8.4% in the prior year[98]. Cash and Liquidity - As of September 30, 2024, the company had 82.7 million in cash and cash equivalents, with a total liquidity position of 126.3million[114].−CashonhandatSeptember30,2024,was126.3 million[114]. - Cash on hand at September 30, 2024, was 82.7 million, down by 29.8millionfromthepreviousperiod[137].−CashflowsprovidedbyoperatingactivitiesfortheninemonthsendedSeptember30,2024,wereapproximately29.8 million from the previous period[137]. - Cash flows provided by operating activities for the nine months ended September 30, 2024, were approximately 28.2 million, a decrease from 77.0millionforthesameperiodin2023[135].DebtandFinancing−Totaloutstandinglong−termindebtednesswas77.0 million for the same period in 2023[135]. Debt and Financing - Total outstanding long-term indebtedness was 285.2 million, including 50.0millionclassifiedascurrentliability[117].−Thecompanyplanstorefinanceits50.0 million classified as current liability[117]. - The company plans to refinance its 237.3 million Senior Secured Notes due November 1, 2025, as it does not have enough cash on hand to redeem them[118]. - The total debt related to the Senior Secured Notes as of September 30, 2024, was 235.2million,withanannualinterestrateof11.5235.2 million, with an annual interest rate of 11.5%[124]. Capital Expenditures - Capital expenditures for the nine months ended September 30, 2024, were 49.8 million, an increase from 44.3millioninthesameperiodof2023,withexpectationstoincurbetween44.3 million in the same period of 2023, with expectations to incur between 55.0 million and 60.0millionforthefullyear[130].MarketOutlook−Thecompanyanticipatesthatoildemandwillincreaseby1.78millionbarrelsnextyearaccordingtoOPECanditsallies,indicatingpotentialgrowthopportunities[87].−Thecompanyexpectsdemandforoilandgasproductstoholdandexpand,drivenbyincreasedenergyneedsacrosstheUnitedStates[88].StrategicInitiatives−Thecompanyhasdevelopedtoolscoveredby38patentsand9pendingpatentapplications,enhancingitscompetitiveedgeinthemarket[81].−Thecompanyplanstocontinuepursuingstrategicacquisitionstostrengthenitscompetitivepositioninganddriveefficiencies[76].−Thecompanyisfocusedonmaintainingasolidbalancesheetandsufficientoperatingliquiditywhilemanagingcapitalexpendituresprudently[92].LegalandCompliance−Thecompanyincurredlegalandadministrativefeesof60.0 million for the full year[130]. Market Outlook - The company anticipates that oil demand will increase by 1.78 million barrels next year according to OPEC and its allies, indicating potential growth opportunities[87]. - The company expects demand for oil and gas products to hold and expand, driven by increased energy needs across the United States[88]. Strategic Initiatives - The company has developed tools covered by 38 patents and 9 pending patent applications, enhancing its competitive edge in the market[81]. - The company plans to continue pursuing strategic acquisitions to strengthen its competitive positioning and drive efficiencies[76]. - The company is focused on maintaining a solid balance sheet and sufficient operating liquidity while managing capital expenditures prudently[92]. Legal and Compliance - The company incurred legal and administrative fees of 0.2 million for the nine months ended September 30, 2024[133]. - The company has established effective disclosure controls and procedures as of September 30, 2024[148]. Rig Count - As of September 30, 2024, the U.S. land rig count stood at 567, a decrease of 5.8% from 602 at the end of 2023[85]. Price Trends - The average daily price of West Texas Intermediate (WTI) decreased by approximately 2.7% to 76.43perbarrelduringthethreemonthsendedSeptember30,2024,comparedto76.43 per barrel during the three months ended September 30, 2024, compared to 78.53 per barrel in the previous quarter[85].