Nine(NINE) - 2024 Q3 - Quarterly Report

Financial Performance - Revenues for Q3 2024 were $138,157, a decrease of 2$140,617 in Q3 2023[111] - Adjusted gross profit for Q3 2024 was $24,706, an increase of 8$22,941 in Q3 2023[111] - Net loss for Q3 2024 was $10,143, a 24$13,262 in Q3 2023[111] - Revenues decreased by $2.5 million, or 2$138.2 million for Q3 2024, primarily due to pricing decreases and a 10% drop in the average U.S. rig count compared to Q3 2023[112] - Adjusted gross profit increased by approximately $1.8 million to$24.7 million for Q3 2024, influenced by revenue and cost changes[114] - Net loss decreased by $3.1 million, or 24$10.1 million for Q3 2024, while Adjusted EBITDA increased by $2.7 million, or 23$14.3 million[121] - For the first nine months of 2024, revenues decreased by $52.8 million, or 11$412.7 million, attributed to pricing decreases and a 15% decline in the average U.S. rig count[124] - Adjusted gross profit for the first nine months of 2024 decreased by $22.0 million to$71.2 million due to revenue and cost factors[126] - Net loss increased by $10.3 million, or 47$32.2 million for the first nine months of 2024, with Adjusted EBITDA decreasing by $19.3 million, or 33$39.1 million[134] Expenses and Cost Management - General and administrative expenses decreased by 5% to $12,366 in Q3 2024 from$13,060 in Q3 2023[111] - General and administrative expenses decreased by $9.9 million to$37.1 million for the first nine months of 2024, primarily due to non-recurring costs from the previous year[126] - Cost of revenues for Q3 2024 decreased by $4.2 million, or 4$113.5 million, primarily due to reduced activity in certain service lines[113] - Depreciation expense decreased by $1.1 million to$6.2 million for Q3 2024, attributed to lower capital expenditures over the past twelve months[115] - The company has implemented cost reduction and supply chain initiatives, which began to positively impact profitability starting at the end of Q2 2024[148] Market Conditions and Outlook - The U.S. rig count has declined by approximately 6% since the end of 2023, impacting market conditions[107] - Average natural gas prices for the first nine months of 2024 were $2.11, 17$276,787 thousand, a decrease from $318,725 thousand as of the same date in 2023[144] - The company’s total debt as of September 30, 2024, was$350,000 thousand, a slight decrease from $357,000 thousand as of the same date in 2023[144] - As of September 30, 2024, the company had a total liquidity position of$43.3 million, consisting of $15.7 million in cash and cash equivalents and$27.6 million available under the ABL Credit Facility[151] - The company continues to monitor potential capital sources, including equity and debt financing, to meet investment and liquidity requirements[150] - The company is required to make an Excess Cash Flow Offer on May 15 and November 14, with the Excess Cash Flow Amount for November 14, 2024, projected to be $0, resulting in no offer being made[157] - The ABL Credit Facility was amended to decrease its size from$200.0 million to $150.0 million and extend the maturity date to January 29, 2027[160] - The company was in compliance with all covenants contained in the 2028 Notes Indenture and the ABL Credit Agreement as of September 30, 2024[162] Shareholder Activities - During the three months ended September 30, 2024, the company sold 1,181,090 shares under the Equity Distribution Agreement, generating net proceeds of$1.4 million after commissions[153] - The company completed a public offering of 300,000 units on January 30, 2023, raising $279.8 million after underwriting discounts, which was used to redeem$307.3 million of 2023 Notes[154] Cash Flow Activities - Net cash used in operating activities was $1.8 million for the first nine months of 2024, a significant decrease from$21.2 million in net cash provided in the same period of 2023[168] - Net cash used in investing activities was $11.2 million in the first nine months of 2024, compared to$14.7 million in the same period of 2023, reflecting a decrease in cash purchases of property and equipment[169] - The company reported net cash used in financing activities of $2.1 million for the first nine months of 2024, a decrease from$11.6 million in the same period of 2023, primarily due to the absence of significant debt redemption costs[170] - As of September 30, 2024, the company had $50.0 million in borrowings under the ABL Credit Facility, with approximately$27.6 million available after accounting for outstanding letters of credit[164]