Financial and Operational Overview Q1 2025 Key Highlights In Q1 2025, KLX Energy Services reported revenue of $154 million and a net loss of $(28) million, while increasing Adjusted EBITDA by 15% to $14 million and improving its Adjusted EBITDA margin by 208 basis points due to effective cost controls, with total liquidity at $58 million Q1 2025 Key Financial Highlights | Financial Metric | Q1 2025 | Change vs Q1 2024 | | :--- | :--- | :--- | | Revenue | $154 million | -12% (YoY) | | Net Loss | $(28) million | - | | Diluted Loss per Share | $(1.62) | - | | Adjusted EBITDA | $14 million | +15% (YoY) | | Adjusted EBITDA Margin | 9% | +30% (YoY) | | Total Liquidity | $58 million | - | - The company successfully increased its Adjusted EBITDA margin by 208 basis points compared to Q1 2024, primarily due to a company-wide focus on cost controls, which offset the impact of lower revenue and rig count4 Management Commentary and Outlook Management highlighted the successful completion of refinancing in March, enhancing financial flexibility and reactivating a share repurchase program with approximately $49 million remaining, while cautiously targeting a modest low to mid-single-digit sequential revenue increase and margin expansion for the remainder of 2025, prudently evaluating share and debt buybacks - The company is targeting a modest sequential revenue increase in the low to mid-single digits on a percentage basis, accompanied by margin expansion, based on current schedules5 - Following a March refinancing, the company has access to its 2019 share repurchase program, which has approximately $49 million of availability remaining, with both share and debt buybacks being considered as capital deployment opportunities7 - Management believes the company's strategic positioning, operational excellence, and improved financial flexibility position it to manage market volatility effectively8 Detailed Financial Results Consolidated Financial Performance Q1 2025 revenue was $154.0 million, a 6.9% decrease from Q4 2024, primarily due to a seasonal market slowdown and reduced activity in Mid-Con completions and directional drilling, resulting in a net loss of $(27.9) million and an Adjusted EBITDA of $13.8 million, with completion services contributing 51% of revenue Consolidated Financial Performance Metrics | Metric | Q1 2025 | Q4 2024 | Change (QoQ) | | :--- | :--- | :--- | :--- | | Revenue | $154.0 M | $165.5 M | -6.9% | | Net Loss | $(27.9) M | $(14.7) M | Increased Loss | | Adjusted Net Loss | $(21.9) M | $(13.1) M | Increased Loss | | Adjusted EBITDA | $13.8 M | $22.7 M | -39.2% | | Adjusted EBITDA Margin | 9.0% | 13.7% | -470 bps | - Revenue contribution by product line for Q1 2025 was approximately: drilling (20%), completion (51%), production (18%), and intervention (11%)9 Segment Performance Analysis The Southwest segment showed sequential growth in revenue (6.2%) and Adjusted EBITDA (21.9%), achieving a record-high margin, while the Rocky Mountains segment experienced a seasonal sequential decline but improved year-over-year, and the Northeast/Mid-Con segment saw a significant drop in both revenue (-18.2%) and Adjusted EBITDA (-72.4%) due to reduced activity and a non-recurring operational issue Q1 2025 Segment Performance Summary | Segment | Revenue (Q1 2025) | Adjusted EBITDA (Q1 2025) | | :--- | :--- | :--- | | Rocky Mountains | $47.8 M | $6.7 M | | Southwest | $65.2 M | $11.7 M | | Northeast/Mid-Con | $41.0 M | $2.7 M | | Segment Total | $154.0 M | $21.1 M | Rocky Mountains The Rocky Mountains segment reported Q1 revenue of $47.8 million, a seasonal 11.5% decrease sequentially but a 5% increase year-over-year, with Adjusted EBITDA at $6.7 million, down 43.2% sequentially but up 24% from Q1 2024, driven by increased activity in directional drilling and wireline services Rocky Mountains Segment Financials | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Revenue | $47.8 M | $54.0 M | $45.6 M | | Operating Loss | $(0.2) M | $4.7 M | $(1.2) M | | Adjusted EBITDA | $6.7 M | $11.8 M | $5.4 M | - Year-over-year revenue improved by 5% due to increased activity in directional drilling and wireline product offerings11 Southwest The Southwest segment delivered strong results with revenue of $65.2 million, a 6.2% sequential increase driven by market share gains in the Permian, and Adjusted EBITDA grew 21.9% sequentially to $11.7 million, with its margin reaching the highest level since the 2020 merger, expected to be the "new normal" for the segment Southwest Segment Financials | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Revenue | $65.2 M | $61.4 M | $69.4 M | | Operating Income | $3.0 M | $1.1 M | $(0.7) M | | Adjusted EBITDA | $11.7 M | $9.6 M | $6.7 M | - The Q1 2025 Adjusted EBITDA margin was the highest in the company's recent history (post-2020 merger), driven by a shifting revenue mix12 Northeast/Mid-Con The Northeast/Mid-Con segment's performance declined significantly, with revenue falling 18.2% sequentially to $41.0 million and Adjusted EBITDA plummeting 72.4% to $2.7 million, primarily caused by reduced gas-focused activity and a non-recurring operational challenge within its completions business Northeast/Mid-Con Segment Financials | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Revenue | $41.0 M | $50.1 M | $59.7 M | | Operating Loss | $(8.1) M | $0.3 M | $2.4 M | | Adjusted EBITDA | $2.7 M | $9.8 M | $10.2 M | - The sharp decline was attributed to reduced regional gas-focused activity and a non-recurring operational issue that created excessive white space during the quarter15 Corporate and Other The Corporate and other segment reported an operating loss of $(12.4) million and an Adjusted EBITDA loss of $(7.3) million for Q1 2025, with the Adjusted EBITDA loss showing sequential improvement from $(8.5) million in Q4 2024 Corporate and Other Segment Financials | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Operating Loss | $(12.4) M | $(11.1) M | $(13.6) M | | Adjusted EBITDA Loss | $(7.3) M | $(8.5) M | $(10.3) M | Balance Sheet and Liquidity As of March 31, 2025, KLX had total liquidity of $58.1 million, comprising $14.6 million in cash and $43.5 million in available credit facilities, while Net Working Capital increased substantially by 131% to $59.4 million from the prior quarter, and the company raised approximately $0.5 million in gross proceeds from its at-the-market stock offering program - Total liquidity as of March 31, 2025 was $58.1 million, composed of $14.6 million in cash, $38.6 million available on the ABL Facility, and $4.9 million on an undrawn FILO facility16 - Net Working Capital increased by 131% to $59.4 million from December 31, 2024, driven by changes in days sales outstanding, days payable outstanding, and accrued liabilities17 - In Q1 2025, the company sold 142,769 shares of common stock for gross proceeds of approximately $0.5 million under its at-the-market offering program18 Capital Expenditures and Other Financials Capital expenditures for Q1 2025 were $15.0 million, a slight decrease from the previous quarter, primarily directed towards maintenance, with net capital expenditures after asset sales totaling $10.2 million, and the company held $2.3 million in assets for sale at quarter-end - Capital expenditures were $15.0 million in Q1 2025, down 2% from Q4 2024, with net capital expenditures after asset sales at $10.2 million19 - As of March 31, 2025, the company had $2.3 million of assets held for sale, related to a facility and equipment in the Rocky Mountains and Southwest segments20 Financial Statements and Non-GAAP Reconciliations Condensed Consolidated Statements of Operations The company reported revenues of $154.0 million for Q1 2025, down from $174.7 million in Q1 2024, resulting in an operating loss of $(17.7) million and a net loss of $(27.9) million, or $(1.62) per diluted share, compared to a net loss of $(22.2) million, or $(1.38) per diluted share, in the same period last year Condensed Consolidated Statements of Operations | (In millions, except per share data) | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Revenues | $154.0 | $165.5 | $174.7 | | Operating loss | $(17.7) | $(5.0) | $(13.1) | | Net loss | $(27.9) | $(14.7) | $(22.2) | | Diluted loss per share | $(1.62) | $(0.90) | $(1.38) | Condensed Consolidated Balance Sheets As of March 31, 2025, the company's balance sheet showed total assets of $379.1 million, a decrease from $456.3 million at year-end 2024, with cash and cash equivalents decreasing to $14.6 million from $91.6 million, total liabilities at $405.7 million, and a total stockholders' deficit of $(26.6) million Condensed Consolidated Balance Sheets | (In millions) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $14.6 | $91.6 | | Total current assets | $167.9 | $233.0 | | Total assets | $379.1 | $456.3 | | Liabilities & Equity | | | | Total current liabilities | $111.3 | $140.1 | | Long-term debt | $256.7 | $285.1 | | Total stockholders' deficit | $(26.6) | $(10.5) | Non-GAAP Financial Measures and Reconciliations This section provides reconciliations for key non-GAAP metrics used by management, showing Q1 2025 Adjusted EBITDA reconciled to $13.8 million from a consolidated net loss of $(27.9) million, Levered Free Cash Flow as a usage of $(47.8) million, and Net Debt increasing to $238.3 million from $193.5 million at the end of 2024 Reconciliation of Net Loss to Adjusted EBITDA (Q1 2025) | (In millions) | Amount | | :--- | :--- | | Consolidated net loss | $(27.9) | | Interest expense, net | $10.0 | | Income tax expense | $0.2 | | Depreciation and amortization | $24.7 | | One-time net costs | $6.0 | | Non-cash compensation | $0.8 | | Adjusted EBITDA | $13.8 | Free Cash Flow Reconciliation (Q1 2025) | (In millions) | Amount | | :--- | :--- | | Net cash flow used in operating activities | $(37.6) | | Capital expenditures | $(15.0) | | Proceeds from sale of property | $4.8 | | Levered Free Cash Flow | $(47.8) | Net Debt Reconciliation | (In millions) | March 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Debt | $261.0 | $285.1 | | Less: Cash & restricted cash | $22.7 | $91.6 | | Net Debt | $238.3 | $193.5 |
KLX Energy Services(KLXE) - 2025 Q1 - Quarterly Results