Drilling Tools Q3 shareholder loss widens to $2.64M
The revised 2026 Adjusted Free Cash Flow outlook is $13 million-$22 million, with DTI expecting results near the low end.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Filing Summary
Drilling Tools International Corp. (DTI) reported third-quarter 2026 revenue of $40.645 million, including $31.969 million from tool rentals and $8.676 million from product sales. Net loss attributable to DTI shareholders was $2.637 million, compared with $0.903 million a year earlier; Adjusted EBITDA was $9.503 million, versus $9.115 million.
CEO Wayne Prejean said revenue and Adjusted EBITDA rose 7% and 14% sequentially, respectively, with Adjusted EBITDA margin at approximately 23%. As of September 30, 2026, cash and cash equivalents were $2.965 million and Net Debt was $47.4 million. DTI kept 2026 revenue guidance at $155 million-$170 million and Adjusted EBITDA at $35 million-$45 million, expecting both toward the lower ends. Capital expenditure outlook rose to $22 million-$23 million; Adjusted Free Cash Flow guidance was revised to $13 million-$22 million from $17 million-$22 million, with results expected near the low end.
DTI said its proposed acquisition of Saltire Energy Limited and Foxley Energy Limited is expected to close in the first quarter of 2027, subject to stockholder approval, required regulatory approvals and other customary closing conditions. If completed, the transaction is expected to bring its Eastern Hemisphere business to approximately 40% of pro forma revenue. DTI expects to fund the cash portion with new debt financing and borrowings under its existing credit facility.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Hollow bars mark forward-looking points. How the balance works
Positive
- Moderate pointManagement reported sequential revenue up 7% and Adjusted EBITDA up 14%.
Negative
- Major point. Forward-looking: it has not happened yet and may not happen.Adjusted Free Cash Flow outlook low end fell to $13 million from $17 million.
- Moderate pointQuarterly shareholder net loss widened to $2.637 million from $0.903 million.
- Moderate pointNine-month Adjusted EBITDA fell to $25.389 million from $29.202 million.
Filing Explained
Nine-month adjusted free cash flow was positive.
DTI's 8-K reports completed third-quarter results; for the nine months ended
DTI defines adjusted free cash flow as adjusted EBITDA less gross capital expenditures and identifies it as a performance measure, not a liquidity measure; operating activities used
8-K Event Classification
Key Figures
Key Terms
Adjusted EBITDA financial
non-GAAP financial measure financial
Adjusted Free Cash Flow financial
Net Debt financial
Earnings Snapshot
For 2026, revenue of $155 million to $170 million and Adjusted EBITDA of $35 million to $45 million, with both expected toward the lower ends of their ranges; capital expenditures of $22 million to $23 million; Adjusted Free Cash Flow of $13 million to $22 million, with results expected near the low end.
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were DTI's third-quarter 2026 results?
What is DTI's 2026 financial outlook?
What does DTI expect from the proposed Saltire acquisition?
Why did DTI raise its capital expenditure outlook?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (date of earliest event reported):
(Exact name of registrant as specified in its charter)
(State or other |
(Commission File Number) |
(I.R.S. Employer |
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||
(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code:
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class: |
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Trading Symbol(s) |
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Name of each exchange on which registered: |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
1
Item 2.02. Results of Operations and Financial Condition
On November 5, 2026, Drilling Tools International Corporation (the “Company”) issued a press release announcing the Company’s financial and operating results for the third quarter ended September 30, 2026. A copy of the press release is furnished as Exhibit 99.1 hereto and incorporated herein by reference.
The information in this report and the exhibits attached hereto shall not be deemed to be “filed” for purposes of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, regardless of any general incorporation language in such filing.
Additional Information and Where to Find It
In connection with the proposed acquisition of Saltire Energy Limited and Foxley Energy Limited (together, “Saltire”), the Company has filed with the Securities and Exchange Commission (the “SEC”) a registration statement on Form S-4 that includes a preliminary proxy statement of the Company that also constitutes a prospectus of the Company. After the registration statement is declared effective, the Company will mail a definitive proxy statement/prospectus to its stockholders. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT, THE PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING ANY AMENDMENTS OR SUPPLEMENTS, CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY, SALTIRE AND THE PROPOSED TRANSACTION. Investors and security holders may obtain free copies of these documents through the SEC’s website at www.sec.gov and on the Company’s investor relations website at https://investors.dti.inc.
Participants in the Solicitation
The Company, Saltire and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the Company’s stockholders in connection with the proposed transaction. Information about the Company’s directors and executive officers is set forth in the Company’s most recent Annual Report on Form 10-K and proxy statement for its 2026 annual meeting of stockholders, filed with the SEC on March 6, 2026 and March 13, 2026, respectively, and in the proxy statement/prospectus. Additional information regarding the interests of such participants, by security holdings or otherwise, is or will be contained in the proxy statement/prospectus and other relevant materials filed with the SEC.
No Offer or Solicitation
This Current Report on Form 8-K is for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to buy any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act.
Forward-Looking Statements
This Current Report on Form 8-K, including Exhibit 99.1, contains forward-looking statements, including statements regarding the proposed acquisition of Saltire. Please refer to the “Forward-Looking Statements” section of Exhibit 99.1 for a discussion of the risks and uncertainties that could cause actual results to differ materially from those contemplated by such forward-looking statements.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
99.1 |
Press Release, dated November 5, 2026 |
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104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document). |
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: November 5, 2026
DRILLING TOOLS INTERNATIONAL CORPORATION |
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By: |
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/s/ David R. Johnson |
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David R. Johnson |
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Chief Financial Officer |
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(Principal Financial and Accounting Officer) |
3
Exhibit 99.1
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NEWS RELEASE
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Drilling Tools International Corporation Reports 2026 Third Quarter Results
HOUSTON — November 5, 2026 — Drilling Tools International Corporation (NASDAQ: DTI) (“DTI” or the “Company”), a global oilfield services company that designs, engineers, manufactures and provides a differentiated, rental-focused offering of tools for use in onshore and offshore horizontal and directional drilling operations, as well as other cutting-edge solutions across the well life cycle, today reported its results for the three months ended September 30, 2026.
For the third quarter of 2026, DTI generated total consolidated revenue of $40.6 million. Third quarter Tool Rental revenue was $32.0 million, and Product Sales revenue totaled approximately $8.7 million. Net Loss attributable to DTI shareholders for the third quarter was approximately $2.6 million, or a loss of $0.07 per share. Adjusted Net Loss(1) was $433,000 and Adjusted Diluted EPS(1) for the third quarter was a loss of $0.01 per share. Third quarter Adjusted EBITDA(1) was $9.5 million and Adjusted Free Cash Flow(1)(2) was approximately $3.8 million. As of September 30, 2026, DTI had approximately $3.0 million of cash and cash equivalents, and Net Debt(1) of $47.4 million.
Wayne Prejean, Chairman of the Board and Chief Executive Officer, stated, “We are pleased with our third quarter performance. As we anticipated, the second half improvement is underway, with Revenue up 7% and Adjusted EBITDA up 14% sequentially, and Adjusted EBITDA margin expanding to approximately 23%. We delivered sequential growth across North America and key Eastern Hemisphere markets, and our results strengthened each month of the quarter. September was our strongest month, with Adjusted EBITDA reaching approximately $4 million for the first time this year, providing a healthy exit rate and strong momentum as we close out 2026.
“In North America, rising U.S. rig counts and a sharp post-breakup rebound in Canada drove higher tool utilization, and commercial terms held firm as customers finalize their 2027 budgets. Offshore, demand for our ClearPath technology continues to build in both hemispheres. In Europe, significant new ClearPath contract awards, which drove the bulk of our growth investments this year, began contributing full run-rate revenue in September and are supported by long-term rental agreements. In the Gulf of America, ClearPath continues to gain traction as operators place a premium on performance in the most technically demanding wells. In the Middle East, overall activity was relatively flat as the regional conflict persists, but operators have largely adapted, and we remain encouraged by the region’s longer-term outlook.
“Shortly after quarter end, we announced our agreement to acquire Saltire Energy Limited and Foxley Energy Limited (together, “Saltire”). This is a transformative step that is expected to take our Eastern Hemisphere business to approximately 40% of pro forma revenue, giving DTI a more balanced and appropriately hedged position across the global drilling market. We expect the transaction, if completed, to be accretive to Adjusted EBITDA margin and Adjusted Free Cash Flow per share in the first year following closing before any synergies, with the opportunity to bring our technologies to Saltire’s customers representing meaningful upside. We continue to expect to fund the cash portion of the transaction through new debt financing together with borrowings under our existing credit facility, and we remain on track to close in the first quarter of 2027, subject to DTI stockholder approval, any required regulatory approvals and other customary closing conditions. We also recently rolled out our new DTI brand, uniting every business we have acquired under a single identity as we prepare to welcome the Saltire team. Upon the completion of the Saltire acquisition, we expect to be a larger, more diversified company, and we look forward to building on that foundation in 2027 and beyond,” concluded Prejean.
DTI continues to expect full-year 2026 Revenue and Adjusted EBITDA within its previously disclosed guidance ranges, and the Company expects to finish the year toward the lower end of both ranges, consistent with what has been communicated throughout the year. As a result of approximately $4 million of targeted growth investments made during the second and third quarters of 2026 to support contract awards offshore Norway, together with continued investment to keep pace with rising U.S. land activity, the Company has raised its full-year capital expenditure outlook to $22 million to $23 million and revised its full-year Adjusted Free Cash Flow outlook to $13 million to $22 million, from $17 million to $22 million previously, and expects Adjusted Free Cash Flow near the low end of the revised range.
2026 Full Year Outlook
Revenue |
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$155 million |
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– |
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$170 million |
Adjusted EBITDA(1) |
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$35 million |
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– |
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$45 million |
Adjusted EBITDA Margin(1) |
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23% |
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– |
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26% |
Capital Expenditures |
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$22 million |
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– |
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$23 million |
Adjusted Free Cash Flow(1)(2) |
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$13 million |
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– |
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$22 million |
1
2026 Third Quarter Conference Call Information
DTI's 2026 third quarter conference call can be accessed live via dial-in or webcast on Friday, November 6, 2026 at 10:00 a.m. Eastern Time (9:00 a.m. Central Time) by dialing 201-389-0869 and asking for the DTI call at least 10 minutes prior to the start time, or via live webcast by logging onto the webcast at this URL address: https://investors.dti.inc/news-events/events. An audio replay will be available through November 13, 2026 by dialing 201-612-7415 and using passcode 13762424#. Also, an archive of the webcast will be available shortly after the call at https://investors.dti.inc/news-events/events for 90 days. Please submit any questions for management prior to the call via email to DTI@dennardlascar.com.
About Drilling Tools International Corporation
DTI is a Houston, Texas based leading oilfield services company that manufactures and rents downhole drilling tools used in horizontal and directional drilling of oil and natural gas wells. With roots dating back to 1984, DTI operates from 15 service and support centers across North America and maintains 11 international service and support centers across the EMEA and APAC regions. To learn more about DTI, please visit: www.dti.inc.
Contact:
DTI Investor Relations
Ken Dennard / Natalie Hairston
investorrelations@dti.inc
Forward-Looking Statements
This press release may include, and oral statements made from time to time by representatives of the Company may include, “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements other than statements of historical fact included in this press release are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward looking. These forward-looking statements include, but are not limited to, statements regarding DTI and its management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Forward-looking statements in this press release may include, for example, statements about: (1) the demand for DTI’s products and services, which is influenced by the general level activity in the oil and gas industry; (2) DTI’s ability to retain its customers, particularly those that contribute to a large portion of its revenue; (3) DTI’s ability to employ and retain a sufficient number of skilled and qualified workers, including its key personnel; (4) DTI’s ability to source tools and raw materials at a reasonable cost; (5) DTI’s ability to market its services in a competitive industry; (6) DTI’s ability to execute, integrate and realize the benefits of acquisitions, and manage the resulting growth of its business; (7) potential liability for claims arising from damage or harm caused by the operation of DTI’s tools, or otherwise arising from the dangerous activities that are inherent in the oil and gas industry; (8) DTI’s ability to obtain additional capital; (9) potential political, regulatory, economic and social disruptions in the countries in which DTI conducts business, including changes in tax laws or tax rates; (10) DTI’s dependence on its information technology systems, in particular Customer Order Management Portal and Support System, for the efficient operation of DTI’s business; (11) DTI’s ability to comply with applicable laws, regulations and rules, including those related to the environment, greenhouse gases and climate change; (12) DTI’s ability to maintain an effective system of disclosure controls and internal control over financial reporting; (13) the potential for volatility in the market price of DTI’s common stock; (14) the impact of increased legal, accounting, administrative and other costs incurred as a public company, including the impact of possible shareholder litigation; (15) the potential for issuance of additional shares of DTI’s common stock or other equity securities; (16) DTI’s ability to maintain the listing of its common stock on Nasdaq; (17) the occurrence of any event, change or other circumstance that could give rise to the termination of the agreement to acquire Saltire; (18) the risk that the Saltire acquisition may not be completed on the anticipated terms or timing, or at all, including the failure to obtain DTI stockholder approval or any required regulatory approvals, the failure of the registration statement on Form S-4 to become effective, the failure to obtain Nasdaq approval of the listing of the shares to be issued as equity consideration, or the failure to satisfy other closing conditions; (19) the risk that the anticipated benefits of the Saltire acquisition, including accretion to Adjusted EBITDA margin and Adjusted Free Cash Flow per share, are not realized or take longer than expected, and risks relating to the integration of Saltire; (20) the dilution to existing DTI stockholders from the issuance of the fixed number of shares to be issued as equity consideration, the fluctuation in the value of the stock consideration, and potential sales by the sellers following expiration of applicable lock-up restrictions; (21) DTI’s increased indebtedness following the transaction, including under the Nordic bonds and its existing credit facility, the terms and covenants thereof, and DTI’s ability to comply with such terms and to reduce leverage as anticipated; (22) the outcome of any
2
legal proceedings relating to the transaction; (23) volatility in oil and natural gas prices and rig counts, the impact of the ongoing conflict in the Middle East and other geopolitical events, tariffs and trade policy, and fluctuations in foreign currency exchange rates, including between the U.S. dollar and the British pound sterling; (24) changes in laws and regulations affecting our customers’ drilling and completion activities, including permitting, environmental, offshore and climate-related regulation in the United States, the United Kingdom, Norway and other jurisdictions in which DTI or Saltire operates; and (25) other risks and uncertainties described from time to time in DTI’s most recent Forms 10-K, 10-Q and 8-K filed with or furnished to the Securities and Exchange Commission (the “SEC”). You should carefully consider the risks and uncertainties including those described in Part I, Item 1A – “Risk Factors” of our Annual Report on Form 10-K filed on March 6, 2026 and in comparable “Risk Factor” sections of our Quarterly Reports on Form 10-Q filed after such Form 10-K, and in the registration statement on Form S-4 filed by DTI in connection with the proposed Saltire acquisition, including the section entitled “Risk Factors” therein. Such forward-looking statements are based on the beliefs of management of DTI, as well as assumptions made by, and information currently available to DTI’s management and are subject to numerous conditions, many of which are beyond the control of DTI. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed in DTI’s most recent Forms 10-K, 10-Q and 8-K filed with or furnished to the SEC. All subsequent written or oral forward-looking statements attributable to the Company or persons acting on its behalf are qualified in their entirety by this paragraph. The Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.
Additional Information and Where to Find It
In connection with the proposed acquisition of Saltire Energy Limited and Foxley Energy Limited (together, “Saltire”), DTI has filed with the SEC a registration statement on Form S-4 that includes a preliminary proxy statement of DTI that also constitutes a prospectus of DTI. After the registration statement is declared effective, DTI will mail a definitive proxy statement/prospectus to its stockholders. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT, THE PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING ANY AMENDMENTS OR SUPPLEMENTS, CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT DTI, SALTIRE AND THE PROPOSED TRANSACTION. Investors and security holders may obtain free copies of these documents through the SEC’s website at www.sec.gov and on DTI’s investor relations website at https://investors.dti.inc.
Participants in the Solicitation
DTI, Saltire and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from DTI’s stockholders in connection with the proposed transaction. Information about DTI’s directors and executive officers is set forth in DTI’s most recent Annual Report on Form 10-K and proxy statement for its 2026 annual meeting of stockholders, filed with the SEC on March 6, 2026 and March 13, 2026, respectively, and in the proxy statement/prospectus. Additional information regarding the interests of such participants, by security holdings or otherwise, is or will be contained in the proxy statement/prospectus and other relevant materials filed with the SEC.
No Offer or Solicitation
This press release is for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to buy any securities, including the Nordic bonds, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended. The Nordic bonds have not been and will not be registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
3
Drilling Tools International Corporation |
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Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) |
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(In thousands of U.S. dollars and rounded) |
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Three months ended September 30, |
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2026 |
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2025 |
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Revenue, net: |
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Tool rental |
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$ |
31,969 |
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$ |
31,859 |
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Product sale |
|
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8,676 |
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|
|
6,958 |
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Total revenue, net |
|
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40,645 |
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|
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38,817 |
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Costs and other deductions: |
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|
|
|
|
|
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Cost of tool rental revenue |
|
|
7,316 |
|
|
|
7,086 |
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Cost of product sale revenue |
|
|
3,541 |
|
|
|
3,027 |
|
Selling, general, and administrative expense |
|
|
21,401 |
|
|
|
20,414 |
|
Depreciation and amortization expense |
|
|
6,974 |
|
|
|
6,834 |
|
Interest expense, net |
|
|
1,143 |
|
|
|
1,336 |
|
Loss (gain) on asset disposal |
|
|
382 |
|
|
|
(1 |
) |
Goodwill impairment |
|
|
— |
|
|
|
— |
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Other operating and non-operating expense, net |
|
|
3,007 |
|
|
|
588 |
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Total costs and other deductions |
|
|
43,764 |
|
|
|
39,284 |
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Income (loss) before income tax expense |
|
|
(3,119 |
) |
|
|
(467 |
) |
Income tax benefit (expense) |
|
|
487 |
|
|
|
(437 |
) |
Net income (loss) |
|
$ |
(2,632 |
) |
|
$ |
(904 |
) |
Less: Net income (loss) attributable to non-controlling interest |
|
|
5 |
|
|
|
(1 |
) |
Net income (loss) attributable to Drilling Tools International shareholders |
|
$ |
(2,637 |
) |
|
$ |
(903 |
) |
Basic earnings (loss) per share |
|
$ |
(0.07 |
) |
|
$ |
(0.03 |
) |
Diluted earnings (loss) per share |
|
$ |
(0.07 |
) |
|
$ |
(0.03 |
) |
Basic weighted-average common shares outstanding |
|
|
35,282,224 |
|
|
|
35,386,122 |
|
Diluted weighted-average common shares outstanding |
|
|
35,282,224 |
|
|
|
35,386,122 |
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Comprehensive income (loss): |
|
|
|
|
|
|
||
Net income (loss) |
|
$ |
(2,632 |
) |
|
$ |
(904 |
) |
Foreign currency translation adjustment, net of tax |
|
|
19 |
|
|
|
(605 |
) |
Comprehensive income (loss) |
|
|
(2,613 |
) |
|
|
(1,509 |
) |
Less: comprehensive income (loss) attributable to non-controlling interest |
|
|
5 |
|
|
|
(1 |
) |
Comprehensive income (loss) attributable to Drilling Tools International shareholders |
|
$ |
(2,618 |
) |
|
$ |
(1,508 |
) |
4
Drilling Tools International Corporation |
|
|||||||
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) |
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(In thousands of U.S. dollars and rounded) |
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|||||||
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|
|
||
|
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Nine months ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Revenue, net: |
|
|
|
|
|
|
||
Tool rental |
|
$ |
90,451 |
|
|
$ |
99,148 |
|
Product sale |
|
|
26,225 |
|
|
|
21,970 |
|
Total revenue, net |
|
|
116,676 |
|
|
|
121,118 |
|
Costs and other deductions: |
|
|
|
|
|
|
||
Cost of tool rental revenue |
|
|
22,721 |
|
|
|
22,176 |
|
Cost of product sale revenue |
|
|
10,161 |
|
|
|
9,078 |
|
Selling, general, and administrative expense |
|
|
61,523 |
|
|
|
63,046 |
|
Depreciation and amortization expense |
|
|
20,817 |
|
|
|
20,386 |
|
Interest expense, net |
|
|
3,267 |
|
|
|
3,981 |
|
Loss (gain) on asset disposal |
|
|
380 |
|
|
|
70 |
|
Goodwill impairment |
|
|
— |
|
|
|
1,901 |
|
Other operating and non-operating expense, net |
|
|
4,889 |
|
|
|
4,434 |
|
Total costs and other deductions |
|
|
123,758 |
|
|
|
125,072 |
|
Income (loss) before income tax expense |
|
|
(7,082 |
) |
|
|
(3,954 |
) |
Income tax benefit (expense) |
|
|
1,120 |
|
|
|
(1,024 |
) |
Net income (loss) |
|
$ |
(5,962 |
) |
|
$ |
(4,978 |
) |
Less: Net income (loss) attributable to non-controlling interest |
|
|
3 |
|
|
|
(1 |
) |
Net income (loss) attributable to Drilling Tools International shareholders |
|
$ |
(5,965 |
) |
|
$ |
(4,977 |
) |
Basic earnings (loss) per share |
|
$ |
(0.17 |
) |
|
$ |
(0.14 |
) |
Diluted earnings (loss) per share |
|
$ |
(0.17 |
) |
|
$ |
(0.14 |
) |
Basic weighted-average common shares outstanding |
|
|
35,200,688 |
|
|
|
35,516,692 |
|
Diluted weighted-average common shares outstanding |
|
|
35,200,688 |
|
|
|
35,516,692 |
|
Comprehensive income (loss): |
|
|
|
|
|
|
||
Net income (loss) |
|
$ |
(5,962 |
) |
|
$ |
(4,978 |
) |
Foreign currency translation adjustment, net of tax |
|
|
(604 |
) |
|
|
2,536 |
|
Comprehensive income (loss) |
|
|
(6,566 |
) |
|
|
(2,442 |
) |
Less: comprehensive income (loss) attributable to non-controlling interest |
|
|
3 |
|
|
|
(1 |
) |
Comprehensive income (loss) attributable to Drilling Tools International shareholders |
|
$ |
(6,569 |
) |
|
$ |
(2,441 |
) |
5
Drilling Tools International Corporation |
|
|||||||
Condensed Consolidated Balance Sheets (Unaudited) |
|
|||||||
(In thousands of U.S. dollars and rounded) |
|
|||||||
|
|
|||||||
|
|
September 30, |
|
|
December 31, |
|
||
|
|
2026 |
|
|
2025 |
|
||
ASSETS |
|
|
|
|
|
|
||
Current assets |
|
|
|
|
|
|
||
Cash |
|
$ |
2,965 |
|
|
$ |
3,648 |
|
Accounts receivable, net |
|
|
44,607 |
|
|
|
37,683 |
|
Related party note receivable, current |
|
|
2,054 |
|
|
|
1,541 |
|
Inventories |
|
|
16,334 |
|
|
|
18,149 |
|
Prepaid expenses and other current assets |
|
|
6,051 |
|
|
|
3,866 |
|
Total current assets |
|
|
72,011 |
|
|
|
64,887 |
|
Property, plant and equipment, net |
|
|
69,247 |
|
|
|
72,602 |
|
Operating lease right-of-use asset |
|
|
23,416 |
|
|
|
25,181 |
|
Intangible assets, net |
|
|
37,578 |
|
|
|
39,674 |
|
Goodwill, net |
|
|
14,542 |
|
|
|
14,616 |
|
Deferred financing costs, net |
|
|
463 |
|
|
|
468 |
|
Related party note receivable, less current portion |
|
|
3,406 |
|
|
|
3,836 |
|
Deposits and other long-term assets |
|
|
1,387 |
|
|
|
917 |
|
Total assets |
|
$ |
222,050 |
|
|
$ |
222,181 |
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
||
Current liabilities |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
15,246 |
|
|
$ |
9,785 |
|
Accrued expenses and other current liabilities |
|
|
8,695 |
|
|
|
10,711 |
|
Current portion of operating lease liabilities |
|
|
4,423 |
|
|
|
4,335 |
|
Current maturities of long-term debt |
|
|
6,188 |
|
|
|
5,989 |
|
Total current liabilities |
|
|
34,552 |
|
|
|
30,820 |
|
Operating lease liabilities, less current portion |
|
|
19,762 |
|
|
|
21,494 |
|
Revolving line of credit |
|
|
37,017 |
|
|
|
25,000 |
|
Long-term debt, less current portion |
|
|
7,207 |
|
|
|
14,827 |
|
Deferred tax liabilities, net |
|
|
5,476 |
|
|
|
7,167 |
|
Total liabilities |
|
|
104,014 |
|
|
|
99,308 |
|
Commitments and contingencies |
|
|
|
|
|
|
||
Shareholders' equity |
|
|
|
|
|
|
||
Common stock, $0.0001 par value, shares authorized 125,000,000; issued 36,057,592 and 35,661,297, respectively; outstanding 35,282,224 and 35,156,128, respectively |
|
|
4 |
|
|
|
4 |
|
Less: Treasury stock at cost, 775,368 and 505,169 shares, respectively |
|
|
(2,192 |
) |
|
|
(1,265 |
) |
Additional paid-in-capital |
|
|
133,457 |
|
|
|
130,801 |
|
Accumulated deficit |
|
|
(13,308 |
) |
|
|
(7,343 |
) |
Accumulated other comprehensive income (loss) |
|
|
60 |
|
|
|
664 |
|
Total Drilling Tools International shareholders' equity |
|
|
118,021 |
|
|
|
122,861 |
|
Non-controlling interest |
|
|
15 |
|
|
|
12 |
|
Total equity |
|
|
118,036 |
|
|
|
122,873 |
|
Total liabilities and shareholders' equity |
|
$ |
222,050 |
|
|
$ |
222,181 |
|
6
Drilling Tools International Corporation |
|
|||||||
Condensed Consolidated Statements of Cash Flows (Unaudited) |
|
|||||||
(In thousands of U.S. dollars and rounded) |
|
|||||||
|
|
|
|
|
|
|
||
|
|
For the nine months ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Cash flows provided by (used in) operating activities: |
|
|
|
|
|
|
||
Net income (loss) |
|
$ |
(5,962 |
) |
|
$ |
(4,978 |
) |
Adjustments to reconcile net income (loss) to net cash from operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
20,817 |
|
|
|
20,386 |
|
Amortization of deferred financing costs |
|
|
131 |
|
|
|
261 |
|
Non-cash lease expense |
|
|
3,919 |
|
|
|
4,014 |
|
Unrealized loss (gain) on currency translation |
|
|
(406 |
) |
|
|
740 |
|
Write off of excess and obsolete inventory |
|
|
51 |
|
|
|
718 |
|
Write off of property and equipment |
|
|
333 |
|
|
|
251 |
|
Provision (recovery) for credit losses |
|
|
315 |
|
|
|
619 |
|
Deferred tax expense (benefit) |
|
|
(1,875 |
) |
|
|
(893 |
) |
Loss on asset disposal |
|
|
380 |
|
|
|
70 |
|
Gain on sale of lost-in-hole equipment |
|
|
(11,424 |
) |
|
|
(8,380 |
) |
Stock-based compensation expense |
|
|
2,556 |
|
|
|
1,820 |
|
Interest income on related party note receivable |
|
|
(83 |
) |
|
|
(117 |
) |
Goodwill impairment |
|
|
— |
|
|
|
1,901 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable, net |
|
|
(7,357 |
) |
|
|
4,018 |
|
Prepaid expenses and other current assets |
|
|
(3,178 |
) |
|
|
1,629 |
|
Inventories |
|
|
(917 |
) |
|
|
358 |
|
Operating lease liabilities |
|
|
(3,717 |
) |
|
|
(3,854 |
) |
Accounts payable |
|
|
4,634 |
|
|
|
(4,592 |
) |
Accrued expenses and other current liabilities |
|
|
(2,233 |
) |
|
|
617 |
|
Net cash flows provided by (used in) operating activities |
|
|
(4,016 |
) |
|
|
14,588 |
|
Cash flows provided by (used in) investing activities: |
|
|
|
|
|
|
||
Acquisition of a business, net of cash acquired |
|
|
— |
|
|
|
(5,622 |
) |
Purchase of intangible assets |
|
|
(975 |
) |
|
|
(1,430 |
) |
Proceeds from sale of property, plant, and equipment |
|
|
4,000 |
|
|
|
35 |
|
Purchase of property, plant, and equipment |
|
|
(17,643 |
) |
|
|
(16,136 |
) |
Proceeds from sale of lost-in-hole equipment |
|
|
13,707 |
|
|
|
10,408 |
|
Net cash flows provided by (used in) investing activities |
|
|
(911 |
) |
|
|
(12,745 |
) |
Cash flows provided by (used in) financing activities: |
|
|
|
|
|
|
||
Investment from non-controlling interest into VIE |
|
|
— |
|
|
|
12 |
|
Proceeds from exercise of stock options |
|
|
100 |
|
|
|
— |
|
Payment of deferred financing costs |
|
|
(128 |
) |
|
|
— |
|
Purchase of treasury stock |
|
|
(706 |
) |
|
|
(1,152 |
) |
Repayment of term loan |
|
|
(6,413 |
) |
|
|
(3,750 |
) |
Repayment of promissory note |
|
|
(691 |
) |
|
|
(673 |
) |
Proceeds from revolving line of credit |
|
|
50,221 |
|
|
|
42,752 |
|
Repayment on revolving line of credit |
|
|
(38,204 |
) |
|
|
(40,894 |
) |
Net cash flows provided by (used in) financing activities |
|
|
4,179 |
|
|
|
(3,705 |
) |
Effect of changes in foreign exchange rates |
|
|
65 |
|
|
|
50 |
|
Net change in cash |
|
|
(683 |
) |
|
|
(1,812 |
) |
Cash at beginning of period |
|
|
3,648 |
|
|
|
6,185 |
|
Cash at end of period |
|
$ |
2,965 |
|
|
$ |
4,373 |
|
7
Non-GAAP Financial Measures
This release includes Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Free Cash Flow, Adjusted Free Cash Flow Margin, Net Debt, Adjusted Basic Earnings (Loss) Per Share, Adjusted Diluted Earnings (Loss) Per Share and Adjusted Net Income (Loss) measures. Each of these metrics is a “non-GAAP financial measure” as defined in Regulation G of the Securities Exchange Act of 1934.
Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies. Adjusted EBITDA is not a measure of net earnings or cash flows as determined by GAAP. We define Adjusted EBITDA as net earnings (loss) before interest, taxes, depreciation and amortization, further adjusted for (i) goodwill and/or long-lived asset impairment charges, (ii) stock-based compensation expense, (iii) restructuring charges, (iv) transaction and integration costs related to acquisitions and (v) other expenses or charges to exclude certain items that we believe are not reflective of ongoing performance of our business.
We believe Adjusted EBITDA and Adjusted EBITDA Margin are useful because they allow us to supplement the GAAP measures in order to more effectively evaluate our operating performance and compare the results of our operations from period to period without regard to our financing methods or capital structure. We exclude the items listed above in arriving at Adjusted EBITDA because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP, or as an indicator of our operating performance or liquidity. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDA. Our computations of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies.
Adjusted Free Cash Flow is a supplemental non-GAAP financial measure, and we define Adjusted Free Cash Flow as Adjusted EBITDA less Gross Capital Expenditures. We use Adjusted Free Cash Flow as a financial performance measure for planning, forecasting, and evaluating our performance. We believe that Adjusted Free Cash Flow is useful to enable investors and others to perform comparisons of current and historical performance of the Company. As a performance measure, rather than a liquidity measure, the most closely comparable GAAP measure is net income (loss).
Net Debt is a supplemental non-GAAP financial measure, and we define Net Debt as total debt less cash and cash equivalents. We use Net Debt to determine our outstanding debt obligations that would not be readily satisfied by our cash and cash equivalents on hand. We believe this metric is useful to analysts and investors in determining our leverage position since we have the ability to, and may decide to, use a portion of our cash and cash equivalents to reduce debt. As of September 30, 2026, Net Debt was $47.4 million, calculated as current maturities of long-term debt of approximately $6.2 million, revolving line of credit of $37.0 million and long-term debt, less current portion of $7.2 million, less cash and cash equivalents of $3.0 million.
We define Adjusted Net Income (Loss) as consolidated net income (loss) adjusted for (i) goodwill and/or long-lived asset impairment charges, (ii) restructuring charges, (iii) transaction and integration costs related to acquisitions, (iv) income tax expense (or loss) which is calculated by applying a 25% effective tax rate to adjusted pre-tax income (or loss), and (v) other expenses or charges to exclude certain items that we believe are not reflective of the ongoing performance of our business. We believe Adjusted Net Income (Loss) is useful because it allows us to exclude certain items in evaluating our operating performance.
We define Adjusted Basic Earnings (Loss) and Adjusted Diluted Earnings (Loss) per share as the quotient of adjusted net income (loss) and diluted weighted average common shares. We believe that Adjusted Diluted Earnings (Loss) per share provides useful information to investors because it allows us to exclude non-recurring items in evaluating our operating performance on a diluted per share basis.
This release also includes certain projections of non-GAAP financial measures. The reconciliations of estimated Adjusted EBITDA and estimated Adjusted Free Cash Flow to estimated net income (loss) include estimates of interest expense, income tax expense, depreciation and amortization, management fees, other expense, stock option exercise, goodwill impairment, transaction expense, and capital expenditures, which are difficult to predict and estimate and are primarily dependent on future events.
The following tables and narrative reconciliations of the non-GAAP financial measures of Adjusted EBITDA, Adjusted Free Cash Flow, Net Debt, and Adjusted Net Income to the most directly comparable GAAP financial measures for the periods indicated:
8
Drilling Tools International Corporation |
|
|||||||
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) |
|
|||||||
(In thousands of U.S. dollars and rounded) |
|
|||||||
|
|
|||||||
|
|
Three months ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Net income (loss) |
|
$ |
(2,632 |
) |
|
$ |
(904 |
) |
Add (deduct): |
|
|
|
|
|
|
||
Income tax expense (benefit) |
|
|
(487 |
) |
|
|
437 |
|
Depreciation and amortization |
|
|
6,974 |
|
|
|
6,834 |
|
Interest expense, net |
|
|
1,143 |
|
|
|
1,336 |
|
Stock-based compensation |
|
|
929 |
|
|
|
637 |
|
Management fees |
|
|
188 |
|
|
|
188 |
|
Loss (gain) on asset disposal |
|
|
382 |
|
|
|
(1 |
) |
Transaction expense |
|
|
2,153 |
|
|
|
171 |
|
Other operating and non-operating expense, net |
|
|
853 |
|
|
|
417 |
|
Adjusted EBITDA |
|
$ |
9,503 |
|
|
$ |
9,115 |
|
|
|
|
|
|
|
|
||
|
|
Nine months ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Net income (loss) |
|
$ |
(5,962 |
) |
|
$ |
(4,978 |
) |
Add (deduct): |
|
|
|
|
|
|
||
Income tax expense (benefit) |
|
|
(1,120 |
) |
|
|
1,024 |
|
Depreciation and amortization |
|
|
20,817 |
|
|
|
20,386 |
|
Interest expense, net |
|
|
3,267 |
|
|
|
3,981 |
|
Stock-based compensation |
|
|
2,556 |
|
|
|
1,820 |
|
Management fees |
|
|
563 |
|
|
|
563 |
|
Loss (gain) on asset disposal |
|
|
380 |
|
|
|
70 |
|
Goodwill impairment |
|
|
— |
|
|
|
1,901 |
|
Transaction expense |
|
|
3,387 |
|
|
|
1,118 |
|
Other operating and non-operating expense, net |
|
|
1,501 |
|
|
|
3,317 |
|
Adjusted EBITDA |
|
$ |
25,389 |
|
|
$ |
29,202 |
|
9
Drilling Tools International Corporation |
|
|||||||
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) |
|
|||||||
(In thousands of U.S. dollars and rounded) |
|
|||||||
|
|
|
|
|
|
|
||
|
|
Three months ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Net income (loss) |
|
$ |
(2,632 |
) |
|
$ |
(904 |
) |
Add (deduct): |
|
|
|
|
|
|
||
Income tax expense (benefit) |
|
|
(487 |
) |
|
|
437 |
|
Depreciation and amortization |
|
|
6,974 |
|
|
|
6,834 |
|
Interest expense, net |
|
|
1,143 |
|
|
|
1,336 |
|
Stock-based compensation |
|
|
929 |
|
|
|
637 |
|
Management fees |
|
|
188 |
|
|
|
188 |
|
Loss (gain) on asset disposal |
|
|
382 |
|
|
|
(1 |
) |
Transaction expense |
|
|
2,153 |
|
|
|
171 |
|
Other operating and non-operating expense, net |
|
|
853 |
|
|
|
417 |
|
Capital expenditures |
|
|
(5,727 |
) |
|
|
(3,542 |
) |
Adjusted Free Cash Flow |
|
$ |
3,776 |
|
|
$ |
5,573 |
|
|
|
|
|
|
|
|
||
|
|
Nine months ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Net income (loss) |
|
$ |
(5,962 |
) |
|
$ |
(4,978 |
) |
Add (deduct): |
|
|
|
|
|
|
||
Income tax expense (benefit) |
|
|
(1,120 |
) |
|
|
1,024 |
|
Depreciation and amortization |
|
|
20,817 |
|
|
|
20,386 |
|
Interest expense, net |
|
|
3,267 |
|
|
|
3,981 |
|
Stock-based compensation |
|
|
2,556 |
|
|
|
1,820 |
|
Management fees |
|
|
563 |
|
|
|
563 |
|
Loss (gain) on asset disposal |
|
|
380 |
|
|
|
70 |
|
Goodwill impairment |
|
|
— |
|
|
|
1,901 |
|
Transaction expense |
|
|
3,387 |
|
|
|
1,118 |
|
Other operating and non-operating expense, net |
|
|
1,501 |
|
|
|
3,317 |
|
Capital expenditures |
|
|
(17,643 |
) |
|
|
(16,136 |
) |
Adjusted Free Cash Flow |
|
$ |
7,746 |
|
|
$ |
13,066 |
|
10
Drilling Tools International Corporation |
|
|||||||
Reconciliation of GAAP to Non-GAAP Measures (Unaudited) |
|
|||||||
(In thousands of U.S. dollars and rounded) |
|
|||||||
|
|
|||||||
|
|
Three months ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Net income (loss) |
|
$ |
(2,632 |
) |
|
$ |
(904 |
) |
Add (deduct): |
|
|
|
|
|
|
||
Transaction expense |
|
|
2,153 |
|
|
|
171 |
|
Restructuring charges |
|
|
235 |
|
|
|
491 |
|
Software implementation |
|
|
154 |
|
|
|
193 |
|
Income tax expense (benefit) |
|
|
(487 |
) |
|
|
437 |
|
Adjusted Income Before Tax |
|
$ |
(577 |
) |
|
$ |
388 |
|
Adjusted Income tax expense (benefit) |
|
|
(144 |
) |
|
|
97 |
|
Adjusted Net Income (loss) |
|
$ |
(433 |
) |
|
$ |
291 |
|
Adjusted Basic earnings (loss) per share |
|
$ |
(0.01 |
) |
|
$ |
0.01 |
|
Adjusted Diluted earnings (loss) per share |
|
$ |
(0.01 |
) |
|
$ |
0.01 |
|
Basic weighted-average common shares outstanding |
|
|
35,282,224 |
|
|
|
35,386,122 |
|
Diluted weighted-average common shares outstanding |
|
|
35,282,224 |
|
|
|
35,396,579 |
|
|
|
|
|
|
|
|
||
|
|
Nine months ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Net income (loss) |
|
$ |
(5,962 |
) |
|
$ |
(4,978 |
) |
Add (deduct): |
|
|
|
|
|
|
||
Transaction expense |
|
|
3,387 |
|
|
|
1,118 |
|
Goodwill impairment |
|
|
— |
|
|
|
1,901 |
|
Restructuring charges |
|
|
496 |
|
|
|
1,489 |
|
Software implementation |
|
|
508 |
|
|
|
641 |
|
Income tax expense (benefit) |
|
|
(1,120 |
) |
|
|
1,024 |
|
Adjusted Income Before Tax |
|
$ |
(2,691 |
) |
|
$ |
1,195 |
|
Adjusted Income tax expense (benefit) |
|
|
(673 |
) |
|
|
299 |
|
Adjusted Net Income (loss) |
|
$ |
(2,018 |
) |
|
$ |
896 |
|
Adjusted Basic earnings (loss) per share |
|
$ |
(0.06 |
) |
|
$ |
0.03 |
|
Adjusted Diluted earnings (loss) per share |
|
$ |
(0.06 |
) |
|
$ |
0.03 |
|
Basic weighted-average common shares outstanding |
|
|
35,200,688 |
|
|
|
35,516,692 |
|
Diluted weighted-average common shares outstanding |
|
|
35,200,688 |
|
|
|
35,608,629 |
|
11
Drilling Tools International Corporation |
|
|||||||
Reconciliation of Estimated Consolidated Net Income (Loss) to Adjusted EBITDA |
|
|||||||
(In thousands of U.S. dollars and rounded) |
|
|||||||
(Unaudited) |
|
|||||||
|
|
|
|
|
|
|
||
|
|
Twelve Months Ended December 31, 2026 |
|
|||||
|
|
Low |
|
|
High |
|
||
Net income (loss) |
|
$ |
(5,800 |
) |
|
$ |
1,500 |
|
Add (deduct): |
|
|
|
|
|
|
||
Interest expense, net |
|
|
4,100 |
|
|
|
4,400 |
|
Income tax expense (benefit) |
|
|
(500 |
) |
|
|
(400 |
) |
Depreciation and amortization |
|
|
27,500 |
|
|
|
28,000 |
|
Management fees |
|
|
700 |
|
|
|
800 |
|
Other expense |
|
|
2,100 |
|
|
|
2,400 |
|
Stock-based compensation |
|
|
3,400 |
|
|
|
3,600 |
|
Goodwill impairment |
|
|
— |
|
|
|
— |
|
Transaction expense |
|
|
3,500 |
|
|
|
4,700 |
|
Adjusted EBITDA |
|
$ |
35,000 |
|
|
$ |
45,000 |
|
Revenue |
|
|
155,000 |
|
|
|
170,000 |
|
Adjusted EBITDA Margin |
|
|
23 |
% |
|
|
26 |
% |
Drilling Tools International Corporation |
|
|||||||
Reconciliation of Estimated Consolidated Net Income (Loss) to Adjusted Free Cash Flow |
|
|||||||
(In thousands of U.S. dollars and rounded) |
|
|||||||
(Unaudited) |
|
|||||||
|
|
|
|
|
|
|
||
|
|
Twelve Months Ended December 31, 2026 |
|
|||||
|
|
Low |
|
|
High |
|
||
Net income (loss) |
|
$ |
(5,800 |
) |
|
$ |
1,500 |
|
Add (deduct): |
|
|
|
|
|
|
||
Interest expense, net |
|
|
4,100 |
|
|
|
4,400 |
|
Income tax expense (benefit) |
|
|
(500 |
) |
|
|
(400 |
) |
Depreciation and amortization |
|
|
27,500 |
|
|
|
28,000 |
|
Management fees |
|
|
700 |
|
|
|
800 |
|
Other expense |
|
|
2,100 |
|
|
|
2,400 |
|
Stock-based compensation |
|
|
3,400 |
|
|
|
3,600 |
|
Goodwill impairment |
|
|
— |
|
|
|
— |
|
Transaction expense |
|
|
3,500 |
|
|
|
4,700 |
|
Capital expenditures |
|
|
(22,000 |
) |
|
|
(23,000 |
) |
Adjusted Free Cash Flow |
|
$ |
13,000 |
|
|
$ |
22,000 |
|
Adjusted Free Cash Flow Margin |
|
|
8 |
% |
|
|
13 |
% |
12