Financial Performance - Innovex reported a strong financial performance with a net cash position supporting long-term growth[10]. - Q3 2024 revenue reached $152 million, representing a 17% increase quarter over quarter[16]. - Adjusted EBITDA for Q3 2024 was $27 million, with an adjusted EBITDA margin of 18%[16]. - Free cash flow for Q3 2024 amounted to $20 million[16]. - Total cash on the balance sheet is $100 million, with total debt of $23 million, resulting in net cash of $77 million[18]. - Revenue for Legacy Innovex in 2023 is projected at $556 million, an increase from $467 million in 2022[32]. - Free cash flow for Q3 2023 was $26 million, with cash flow from operating activities at $32 million[29]. - Legacy Dril-Quip's revenue for 2023 is projected at $478 million, up from $362 million in 2022[34]. - The combined net income for 2023 is projected at $98 million, with adjusted EBITDA totaling $221 million[35]. Growth Strategy - The company aims to create a unique energy industrial platform focused on delivering exceptional value and returns for shareholders[10]. - The company emphasizes disciplined acquisitions and divestitures as part of its growth strategy[12]. - The merger with Dril-Quip closed on September 6, 2024, with Legacy Dril-Quip stockholders owning approximately 52% of the combined entity[14]. - The company has been renamed Innovex International, Inc., with the ticker changed from DRQ to INVX[14]. - Expected annual cost synergies of at least $30 million, with 50% anticipated to be realized within 12 months and 100% within 24 months[20]. - Achieved the first $15 million of cost synergies in year 1, with a clear path to achieving the full $30 million within the projected timeframe[20]. - The company aims to leverage combined infrastructure to expand product offerings in growing markets such as Saudi Arabia, Mexico, and Asia Pacific[20]. Operational Model - Innovex's Return on Capital Employed (ROCE) model emphasizes capital light, high return operations, defined as income from operations before acquisition costs divided by average capital employed[11]. - The company maintains a diversified presence across attractive global markets, enhancing its competitive position[11]. - Innovex's culture promotes innovation and rapid response to market needs, fostering a customer-centric approach[12]. - Innovex's operational model is characterized by a flat, lean organization that minimizes bureaucracy[12]. - The company focuses on a curated portfolio of complementary, mission-critical products to drive growth[11]. Financial Guidance - The management provided an outlook regarding Adjusted EBITDA, a non-GAAP financial measure, but did not provide specific guidance due to uncertainties[8]. - Q4 2024 revenue guidance is projected between $220 million and $230 million[16]. - Q4 2024 adjusted EBITDA is expected to be between $35 million and $40 million[16]. - The market assumption for Q4 2024 indicates flat activity compared to Q3 2024[16]. - Legacy Innovex is the accounting acquirer in the merger, affecting the presentation of financials going forward[15]. Synergy and Margin Improvement - Combined company expected to have an implied $58 million adjusted EBITDA opportunity if legacy Dril-Quip margins improve to legacy Innovex levels[20]. - 2023 adjusted EBITDA margin for the combined company projected to be 24%, up from 22% in 2022[32]. - Adjusted EBITDA for Legacy Dril-Quip in 2023 is projected at $59 million, with a margin of 12%[34].
Innovex International, Inc.(INVX) - 2024 Q3 - Quarterly Results