Patterson-UTI Energy Q1 2024 Financial Results Q1 2024 Financial Highlights The company reported strong Q1 2024 results with $1.5 billion in revenue and significant shareholder returns Q1 2024 Key Financial Metrics | Metric | Value (USD) | | :--- | :--- | | Total Revenue | $1.5 billion | | Net Income (attributable to common stockholders) | $51 million ($0.13/share) | | Adjusted Net Income | $61 million ($0.15/share) | | Adjusted EBITDA | $375 million | | Cash from Operations | $366 million | | Free Cash Flow | $139 million | - Achieved the annualized synergy target of $200 million from the NexTier merger5 - Returned $130 million to shareholders in Q1 and confirmed its plan to return at least $400 million in 20245 Management Commentary Management noted strong Q1 performance despite market headwinds and reaffirmed its commitment to shareholder returns - The near-term outlook is cautious due to low natural gas prices, but oil basin activity is expected to improve in Q33 - The company is ahead of its goal to return at least $400 million to shareholders in 20243 - Since recent mergers, the company has retired 4% of its post-transaction outstanding shares3 - The company expects to convert at least 40% of its adjusted EBITDA to free cash flow in 20243 Segment Performance Drilling Services The Drilling Services segment reported stable Q1 results with $458 million in revenue and holds $527 million in future contracts Drilling Services Q1 2024 Performance | Metric | Q1 2024 | Q4 2023 | | :--- | :--- | :--- | | Total Revenue | $458 million | $464 million | | Adjusted Gross Profit | $186 million | $187 million | | U.S. Contract Drilling Revenue | $393 million | $393 million | | U.S. Operating Days | 11,024 | 10,841 | | Avg. Rig Revenue per Day (U.S.) | $35,680 | $36,280 | | Avg. Adj. Gross Profit per Day (U.S.) | $16,170 | $16,330 | - Future dayrate drilling revenue from U.S. term contracts was approximately $527 million as of March 31, 20247 - The company expects an average of 70 rigs operating under term contracts in Q2 2024, and an average of 41 rigs for the four quarters ending March 31, 20257 Completion Services The segment generated $945 million in revenue, with strong cost controls offsetting lower natural gas basin activity Completion Services Q1 2024 Performance | Metric | Value (USD) | | :--- | :--- | | Revenue | $945 million | | Adjusted Gross Profit | $199 million | - The sequential decline in revenue was driven by lower activity, especially in natural gas basins like the Haynesville910 - Financial performance has been relatively steady, reflecting progress in capturing synergy value from the NexTier merger10 Drilling Products The segment reported revenue of $90 million, driven by international growth and strong U.S. market penetration Drilling Products Q1 2024 Performance | Metric | Value (USD) | | :--- | :--- | | Revenue | $90 million | | Adjusted Gross Profit | $41 million | - Revenue increased 2% sequentially, driven by Ulterra's International operations12 - Purchase price accounting for the Ulterra acquisition temporarily increased reported segment direct operating costs by $2 million and depreciation by $6 million in Q113 Other The 'Other' segment recorded revenue of $18 million and an adjusted gross profit of $7 million during Q1 2024 Other Segment Q1 2024 Performance | Metric | Value (USD) | | :--- | :--- | | Revenue | $18 million | | Adjusted Gross Profit | $7 million | Outlook The company anticipates steady oil basin activity and projects key financial metrics for Q2 across its segments - Drilling Services (Q2 Outlook): Expects to operate an average of 114 U.S. rigs, with adjusted gross profit per operating day down roughly $300 from Q117 - Completion Services (Q2 Outlook): Revenue expected to be approximately $860 million with an adjusted gross profit of around $170 million, with an improvement in activity expected in Q318 - Drilling Products (Q2 Outlook): Results are expected to be relatively in line with Q119 - Corporate (Q2 Outlook): SG&A expense is expected to be approximately $65 million, and D&A expense is expected to be approximately $265 million20 Financial Statements Condensed Consolidated Statements of Operations The company reported Q1 2024 total revenues of $1.51 billion and net income of $51.2 million, or $0.13 per share Statement of Operations Highlights (in thousands, except per share data) | Metric | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | Revenues | $1,510,360 | $1,584,317 | $791,802 | | Operating Income | $86,999 | $111,705 | $125,963 | | Net Income Attributable to Common Stockholders | $51,235 | $61,950 | $99,678 | | Diluted EPS | $0.13 | $0.15 | $0.46 | Condensed Consolidated Statements of Cash Flows The company generated $365.9 million in cash from operations, resulting in a net cash decrease of $22.4 million Cash Flow Summary (in thousands) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $365,891 | $234,349 | | Net cash used in investing activities | ($227,485) | ($116,345) | | Net cash used in financing activities | ($161,589) | ($98,339) | | Net (decrease) increase in cash | ($22,433) | $19,665 | Additional Financial and Operating Data This section details segment performance and key balance sheet items, including $1.22 billion in long-term debt Segment Revenue and Adjusted Gross Profit - Q1 2024 (in thousands) | Segment | Revenues | Adjusted Gross Profit | | :--- | :--- | :--- | | Drilling Services | $457,573 | $185,836 | | Completion Services | $944,997 | $199,403 | | Drilling Products | $89,973 | $41,343 | | Other | $17,817 | $6,639 | Selected Balance Sheet Data (in thousands) | Metric | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash, cash equivalents and restricted cash | $170,247 | $192,680 | | Working capital | $437,801 | $435,263 | | Long-term debt | $1,221,058 | $1,224,941 | Non-GAAP Financial Measures Adjusted EBITDA Q1 2024 Adjusted EBITDA was $375.0 million, calculated by adjusting net income for interest, taxes, D&A, and merger costs Adjusted EBITDA Reconciliation (in thousands) | Metric | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | Net income | $51,706 | $61,938 | $99,678 | | Income tax expense | $19,997 | $31,332 | $20,185 | | Net interest expense | $16,146 | $17,142 | $7,586 | | D&A and impairment | $274,956 | $278,787 | $128,180 | | Merger and integration expense | $12,233 | $19,949 | — | | Adjusted EBITDA | $375,038 | $409,148 | $255,629 | Free Cash Flow The company generated $139.0 million in free cash flow in Q1 2024, an increase from $116.7 million year-over-year Free Cash Flow Calculation (in thousands) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $365,891 | $234,349 | | Less capital expenditures | ($226,941) | ($117,601) | | Free cash flow | $138,950 | $116,748 | Adjusted Gross Profit This section reconciles GAAP gross profit to adjusted gross profit by adding back D&A for each operating segment Adjusted Gross Profit by Segment - Q1 2024 (in thousands) | Segment | GAAP Gross Profit | D&A Add-back | Adjusted Gross Profit | | :--- | :--- | :--- | :--- | | Drilling Services | $93,491 | $92,345 | $185,836 | | Completion Services | $50,723 | $148,680 | $199,403 | | Drilling Products | $14,161 | $27,182 | $41,343 | | Other | $1,228 | $5,411 | $6,639 | Adjusted Net Income and Adjusted Earnings Per Share Q1 2024 adjusted net income was $60.9 million, or $0.15 per share, after excluding merger and integration expenses Adjusted Net Income Reconciliation - Q1 2024 (in thousands, except per share) | Metric | Total | Per Share | | :--- | :--- | :--- | | Net income as reported | $51,235 | $0.13 | | Merger and integration expense | $12,233 | | | Income tax benefit | ($2,569) | | | Adjusted net income | $60,899 | $0.15 |
Patterson-UTI Energy(PTEN) - 2024 Q1 - Quarterly Results