Nine(US:NINE)2025-10-30 21:21Revenue Performance - Revenues for Q3 2025 decreased by $6.1 million, or 4%, to $132.0 million compared to Q3 2024, primarily due to a 15% decrease in coiled tubing revenue [96]. - Revenues for the first nine months of 2025 increased by $17.1 million, or 4%, to $429.7 million, primarily driven by a $13.4 million increase in cementing revenue, which rose by 9% [108]. Profitability - Adjusted gross profit for Q3 2025 was $20.3 million, down approximately $4.4 million from the previous year, reflecting declines in revenue and increased costs [99]. - Adjusted gross profit for the first nine months of 2025 rose by approximately $2.9 million to $74.1 million, reflecting the revenue and cost changes [110]. - Adjusted gross profit for the three months ended September 30, 2025, was $20.3 million, down from $24.7 million in 2024, reflecting a decrease of approximately 17.5% [127]. Expenses - Cost of revenues decreased by $1.7 million, or 2%, to $111.7 million in Q3 2025, driven by a $2.2 million decrease in materials and a $1.3 million decrease in employee-related costs [98]. - General and administrative expenses increased by $0.4 million to $12.8 million in Q3 2025, mainly due to higher professional fees and employee-related costs [99]. - General and administrative expenses increased by $2.8 million to $39.9 million for the first nine months of 2025, mainly due to a $2.4 million rise in employee-related costs [110]. - Non-operating expenses rose by $906,000 to $13.4 million in Q3 2025 compared to the same period in 2024 [95]. - Non-operating expenses increased by $2.9 million to $40.2 million for the first nine months of 2025, primarily due to a $1.5 million write-off of deferred financing costs [114]. Net Loss - Net loss for Q3 2025 was $14.6 million, an increase of 44% compared to a net loss of $10.1 million in Q3 2024 [95]. - Net loss increased by $4.5 million, or 44%, to $14.6 million for Q3 2025, while Adjusted EBITDA decreased by $4.6 million, or 33%, to $9.6 million [106]. - Net loss for the first nine months of 2025 decreased by $0.1 million, or less than 1%, to $32.1 million, while Adjusted EBITDA increased by $1.2 million, or 3%, to $40.3 million [116]. - For the three months ended September 30, 2025, the company reported a net loss of $14.6 million compared to a net loss of $10.1 million for the same period in 2024 [124]. Cash Flow and Liquidity - Net cash used in operating activities for the first nine months of 2025 was $5.1 million, an increase of $3.3 million compared to $1.8 million in the same period of 2024 [148]. - Net cash used in investing activities increased to $13.2 million in the first nine months of 2025 from $11.2 million in 2024, primarily due to a $1.8 million increase in cash purchases of property and equipment [149]. - Net cash provided by financing activities was $6.6 million in the first nine months of 2025, compared to a net cash outflow of $2.1 million in the same period of 2024, reflecting a $62.9 million increase in proceeds from revolving credit facilities [150]. - The company had a total liquidity position of $40.3 million as of September 30, 2025, which includes $14.4 million in cash and cash equivalents [130]. Debt and Financing - Total debt as of September 30, 2025, was $363.3 million, an increase from $350.0 million at the end of the previous period [132]. - The company has outstanding borrowings of $63.3 million under the 2025 ABL Credit Facility as of September 30, 2025 [132]. - The company expects a reduction in its borrowing base under the 2025 ABL Credit Facility by approximately $2.2 million on October 31, 2025, and further reductions in subsequent months [130]. - The company refinanced and replaced the 2018 ABL Credit Facility with the 2025 ABL Credit Facility, which has a maximum revolving facility amount of $125.0 million [143]. - The 2025 ABL Credit Agreement includes a financial covenant requiring a minimum fixed charge coverage ratio of 1.10 to 1.00, tested quarterly when availability is below $10.0 million [145]. - The company was in compliance with all covenants in the 2025 ABL Credit Agreement as of September 30, 2025 [145]. Market Conditions - The average WTI oil price fell to $65.82 per barrel in Q3 2025, a decline of approximately 8% from $71.78 per barrel in Q1 2025, contributing to decreased activity levels [90]. - Natural gas prices averaged approximately $3.45 per MMBtu for the first nine months of 2025, an improvement from $2.19 per MMBtu in 2024, yet activity in natural gas-levered basins remained low [89]. - The average rig count in the Haynesville increased from 31 rigs in Q4 2024 to 39 rigs by the end of Q3 2025, indicating a slight recovery in activity [89]. - The company anticipates revenue and earnings to decline in Q4 2025 due to seasonal slowdowns and ongoing market challenges [93]. Capital Expenditures - The planned capital expenditure budget for 2025 is expected to be between $15 million and $25 million, focusing on supporting current operations and growth initiatives [129].