NINE

Nine Energy Service Announces Third Quarter 2024 Results

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      <h1 style="font-size: 2em; text-align: center; font-weight: bold;">Nine Energy Service Announces Third Quarter 2024 Results</h1>
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          <li>Increased revenue ~4% quarter over quarter, despite the average Q3 US rig count declining by ~3%</li>
          <li>Sequential quarterly net loss improved and decreased by ~28% for the third quarter of 2024</li>
          <li>Sequential quarterly adjusted EBITDA<sup>A</sup> increased by ~47% for the third quarter of 2024</li>
          <li>Revenue, net loss and adjusted EBITDA of $138.2 million, $(10.1) million and $14.3 million, respectively, for the third quarter of 2024</li>
          <li>Increased cementing revenue by ~12% quarter over quarter</li>
          <li>Total liquidity as of September 30, 2024 of $43.3 million</li>
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      <time datetime="2024-10-31T21:00:00Z" itemprop="dateModified">October 31, 2024 05:00 PM Eastern Daylight Time</time>
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      <p>HOUSTON--(<span itemprop="provider publisher copyrightHolder" itemscope="itemscope" itemtype="https://schema.org/Organization" itemid="https://www.businesswire.com">
          <span itemprop="name"><a referrerpolicy="unsafe-url" rel="nofollow" itemprop="url" href="https://www.businesswire.com/">BUSINESS WIRE</a></span></span>)--Nine Energy Service, Inc. ("Nine" or the "Company") (NYSE: NINE) reported third quarter 2024 revenues of $138.2 million, net loss of $(10.1) million, or $(0.26) per diluted share and $(0.26) per basic share, and adjusted EBITDA of $14.3 million. The Company had provided original third quarter 2024 revenue guidance between $127.0 and $137.0 million, with actual results coming in above the provided range.</p>
      <p>“Despite the average US rig count declining quarter over quarter, we increased our revenue by approximately 4%, with revenue coming in above the originally provided guidance,” said Ann Fox, President and Chief Executive Officer, Nine Energy Service.</p>
      <p>“Nine outperformed market drivers this quarter due in large part to market share gains across operating basins in our cementing division. Cementing revenue increased by approximately 12% over Q2, despite a declining rig count. Our cementing team has been able to differentiate itself in the market by offering what we believe to be the most advanced cementing slurries in the industry, coupled with excellent wellsite execution.”</p>
      <p>“Revenue across the remaining service lines was relatively flat, however better utilization across Nine, an increase in international tool sales and cost saving initiatives helped increase profitability this quarter.”</p>
      <p>“The market has mostly stabilized from an activity and pricing perspective, but commodity prices continue to fluctuate with global conflicts, weather and OPEC+ behavior. Natural gas prices remain challenging, keeping activity levels in basins like the Northeast and Haynesville low, impacting all of Nine’s service lines. Due to typical budget exhaustion, weather, and holiday slow-downs, as well as an expected decrease in international tool sales, we anticipate Q4 revenue and profitability to be down compared to Q3.”</p>
      <p>“We remain positive on demand and the outlook for oil and natural gas. It is too early to provide specifics on 2025 activity levels, but if we see supportive commodity prices, in conjunction with the resetting of customer budgets, we would anticipate a moderate activity pickup in 2025 over current levels.”</p>
      <p>“Nine is well-positioned in the natural gas basins, as well as throughout the US, to capitalize on an improving market. We have seen our earnings respond significantly and quickly with increased market activity. I believe our service and commodity diversity is critical and that we are differentiated through our technology and service offerings. Our strategy of providing an asset-light business with forward-leaning technology is unchanged and we will continue to focus on increasing profitability in whatever market we are faced with.”</p>
      <p><strong>Operating Results</strong></p>
      <p>During the third quarter of 2024, the Company reported revenues of $138.2 million, gross profit of $16.1 million and adjusted gross profit<sup>B</sup> of $24.7 million. During the third quarter, the Company generated ROIC of (14.7)% and adjusted ROIC<sup>C</sup> of 3.9%.</p>
      <p>During the third quarter of 2024, the Company reported general and administrative (“G&A”) expense of $12.4 million. Depreciation and amortization expense ("D&A") in the third quarter of 2024 was $9.0 million.</p>
      <p>The Company’s tax provision was approximately $0.4 million year to date. The provision for 2024 is the result of the Company’s tax position in state and non-U.S. tax jurisdictions.</p>
      <p><strong>Liquidity and Capital Expenditures</strong></p>
      <p>During the third quarter of 2024, the Company reported net cash used in operating activities of $(5.9) million. Capital expenditures totaled $3.6 million during the third quarter of 2024 and totaled $11.7 million for the full year through September 30, 2024. The Company’s full-year 2024 capex guidance is $10 to $15 million.</p>
      <p>As of September 30, 2024, Nine’s cash and cash equivalents were $15.7 million, and the Company had $27.6 million of availability under the revolving credit facility, resulting in a total liquidity position of $43.3 million as of September 30, 2024. On September 30, 2024, the Company had $50.0 million of borrowings under the revolving credit facility. On October 10, 2024, the Company repaid $3.0 million of outstanding borrowings under the revolving credit facility.</p>
      <p>As per the terms of the indenture governing Nine’s senior secured notes, the Company is required to periodically offer to repurchase such notes with a portion of any Excess Cash Flow. Nine did not generate any Excess Cash Flow, as defined in the indenture, in the most recently ended two fiscal quarters (the six-month period ended September 30, 2024). As a result, no Excess Cash Flow offer will be made to noteholders this month.</p>
      <p>During the third quarter of 2024, the Company sold approximately 1.2 million shares of common stock under its at-the-market equity offering program, which generated approximately $1.4 million in net proceeds. For the nine months ended September 30, 2024, a total of approximately 5.4 million shares have been sold, which generated net proceeds of $8.2 million.</p>
      <p><sup>A</sup>See end of press release for definitions of these non-GAAP measures. These measures are intended to provide additional information only and should not be considered as alternatives to, or more meaningful than, net income (loss), gross profit or any other measure determined in accordance with GAAP.</p>
      <p><strong>Conference Call Information</strong></p>
      <p>The call is scheduled for Friday, November 1, 2024, at 9:00 am Central Time. Participants may join the live conference call by dialing U.S. (Toll Free): (877) 524-8416 or International: (412) 902-1028 and asking for the “Nine Energy Service Earnings Call”. Participants are encouraged to dial into the conference call ten to fifteen minutes before the scheduled start time to avoid any delays entering the earnings call.</p>
      <p>For those who cannot listen to the live call, a telephonic replay of the call will be available through November 15, 2024 and may be accessed by dialing U.S. (Toll Free): (877) 660-6853 or International: (201) 612-7415 and entering the passcode of 13746652.</p>
      <p><strong>About Nine Energy Service</strong></p>
      <p>Nine Energy Service is an oilfield services company that offers completion solutions within North America and abroad. The Company brings years of experience with a deep commitment to serving clients with smarter, customized solutions and world-class resources that drive efficiencies. Serving the global oil and gas industry, Nine continues to differentiate itself through superior service quality, wellsite execution and cutting-edge technology. Nine is headquartered in Houston, Texas with operating facilities in the Permian, Eagle Ford, Haynesville, SCOOP/STACK, Niobrara, Barnett, Bakken, Marcellus, Utica and Canada.</p>
      <p>For more information on the Company, please visit Nine’s website at <a rel="nofollow" referrerpolicy="unsafe-url" href="https://cts.businesswire.com/ct/CT?id=smartlink&amp;url=http%3A%2F%2Fwww.nineenergyservice.com&amp;esheet=54144981&amp;newsitemid=20241031217756&amp;lan=en-US&amp;anchor=nineenergyservice.com&amp;index=1&amp;md5=22ed72aefd5e3f3f0f46aa1ab1fc4d52" target="_blank">nineenergyservice.com</a>.</p>
      <p><strong>Forward Looking Statements</strong></p>
      <p>The foregoing contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are those that do not state historical facts and are, therefore, inherently subject to risks and uncertainties. Forward-looking statements also include statements that refer to or are based on projections, uncertain events or assumptions.</p>
      
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                <b>NINE ENERGY SERVICE, INC.</b>
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                <b>CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS)</b>
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                (In Thousands, Except Share and Per Share Amounts)
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                (Unaudited)
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              <td style="padding: 10px; border: 1px solid #ccc; text-align: center;" colspan="3">&nbsp;</td>
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              <td style="padding: 10px; border: 1px solid #ccc;">Revenues</td>
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              <td style="padding: 10px; border: 1px solid #ccc; text-align: right;">$</td>
              <td style="padding: 10px; border: 1px solid #ccc; text-align: right;">138,157</td>
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              <td style="padding: 10px; border: 1px solid #ccc; text-align: right;">$</td>
              <td style="padding: 10px; border: 1px solid #ccc; text-align: right;">132,401</td>
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              <td style="padding: 10px; border: 1px solid #ccc;">Cost and expenses</td>
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              <td style="padding: 10px; border: 1px solid #ccc;">Cost of revenues (exclusive of depreciation and amortization shown separately below)</td>
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              <td style="padding: 10px; border: 1px solid #ccc; text-align: right;">$</td>
              <td style="padding: 10px; border: 1px solid #ccc; text-align: right;">113,451</td>
              <td style="padding: 10px; border: 1px solid #ccc; text-align: right;">$</td>
              <td style="padding: 10px; border: 1px solid #ccc; text-align: right;">112,048</td>
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              <td style="padding: 10px; border: 1px solid #ccc;">Income (loss) from operations</td>
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              <td style="padding: 10px; border: 1px solid #ccc; text-align: right;">$</td>
              <td style="padding: 10px; border: 1px solid #ccc; text-align: right;">2,451</td>
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              <td style="padding: 10px; border: 1px solid #ccc; text-align: right;">$</td>
              <td style="padding: 10px; border: 1px solid #ccc; text-align: right;">(1,436)</td>
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              <td style="padding: 10px; border: 1px solid #ccc;">Net loss</td>
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              <td style="padding: 10px; border: 1px solid #ccc; text-align: right;">$</td>
              <td style="padding: 10px; border: 1px solid #ccc; text-align: right;">(10,143)</td>
              <td style="padding: 10px; border: 1px solid #ccc;"></td>
              <td style="padding: 10px; border: 1px solid #ccc; text-align: right;">$</td>
              <td style="padding: 10px; border: 1px solid #ccc; text-align: right;">(14,041)</td>
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        <h2>Contacts</h2>
        <p><b>Nine Energy Service Investor Contact:</b><br>Heather Schmidt<br>Vice President, Strategic Development, Investor Relations and Marketing<br>(281) 730-5113<br><a referrerpolicy="unsafe-url" target="_blank" href="mailto:investors@nineenergyservice.com" rel="nofollow">investors@nineenergyservice.com</a></p>
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NINE's Q3 revenue rose 4% despite a declining US rig count.
Net loss improved by 28%, with adjusted EBITDA up 47%.
Cementing revenue increased by 12%, enhancing profitability.
Forecasts for Q4 anticipate revenue and profitability declines.
Weak gas prices are affecting service lines, with cautious 2025 outlook.

Nine Energy Service Announces Third Quarter 2024 Results

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