KLX Energy Services(US:KLXE)2024-10-31 20:34Revenue Performance - For the three months ended September 30, 2024, total revenue was $188.9 million, a decrease of $31.7 million or 14.4% compared to $220.6 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 $9.2 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 $543.8 million, a decrease of $150.4 million or 21.7% compared to $694.2 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 $1.1 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 $10.6 million, compared to operating income of $54.9 million in the prior year[110]. Net Income and Loss - Net loss for the quarter was $8.2 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 $142.3 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 $18.6 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 $126.3 million[114]. - Cash on hand at September 30, 2024, was $82.7 million, down by $29.8 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 $77.0 million for the same period in 2023[135]. Debt and Financing - Total outstanding long-term indebtedness was $285.2 million, including $50.0 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 $235.2 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 $44.3 million in the same period of 2023, with expectations to incur between $55.0 million and $60.0 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 $76.43 per barrel during the three months ended September 30, 2024, compared to $78.53 per barrel in the previous quarter[85].