A conference call is scheduled for 8:00 AM
ET on February 17, 2026, to discuss the financial results. Investors, analysts and members of the media are invited to participate by
dialing in to the U.S. toll-free line at 1-877-407-0890 or the international line at 1-201-389-0918, approximately 10 minutes prior to
the start of the call. A live, listen-only earnings webcast will also be broadcast simultaneously under the “Investors” section
of the Company’s website at www.nesr.com. Following the end of the conference call, a replay will be available after the event
under the “Investors” section of the Company’s website.
In addition to financial results determined in accordance with Generally Accepted Accounting
Principles (“GAAP”) that were included in the news release, certain information discussed in the news release and to be discussed
on the conference call could be considered non-GAAP financial measures (as defined under the Securities and Exchange Commission’s
(“SEC”) Regulation G). Any non-GAAP financial measures should be considered in addition to, and not as an alternative for,
or superior to, net income (loss), cash flows or other measures of financial performance prepared in accordance with GAAP as more fully
discussed in the Company’s financial statements and filings with the SEC. Reconciliations of such non-GAAP information to the closest
GAAP measures are included in the news release.
Exhibit
99.1
National
Energy Services Reunited Corp. Reports Fourth Quarter 2025 Financial Results
| |
● |
Revenue
for the quarter ended December 31, 2025, is $398.3 million, up 34.9% sequentially and 15.9% year-over-year |
| |
● |
Net
income for the quarter ended December 31, 2025, is $7.8 million |
| |
● |
Adjusted
net income (a non-GAAP measure)** for the quarter ended December 31, 2025, is $31.9 million,
up 106.6% sequentially |
| |
● |
Adjusted
EBITDA (a non-GAAP measure)** for the quarter ended December 31, 2025, is $84.4 million, improving 32.0% sequentially |
| |
● |
Operating
cash flow for the year ended December 31, 2025, is $264.2 million, up 15.2% year-over-year |
| |
● |
Free
cash flow (a non-GAAP measure)** for the year ended December 31, 2025, is $120.8 million |
HOUSTON,
February 17, 2026 – National Energy Services Reunited Corp. (“NESR” or the “Company”), a leading
integrated energy services provider in the Middle East and North Africa (“MENA”), today announced its financial results for
the three-month period and year ended December 31, 2025. The Company delivered the following results for the periods presented:
| |
|
Three
Months Ended |
|
|
Variance |
|
| (in thousands
except per share amounts and percentages) |
|
December
31,
2025 |
|
|
September
30,
2025 |
|
|
December
31,
2024 |
|
|
Sequential |
|
|
Year-
over- year |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenue |
|
$ |
398,262 |
|
|
$ |
295,315 |
|
|
$ |
343,682 |
|
|
|
34.9 |
% |
|
|
15.9 |
% |
| Net income |
|
|
7,803 |
|
|
|
17,737 |
|
|
|
26,837 |
|
|
|
(56.0 |
)% |
|
|
(70.9 |
)% |
| Adjusted net income (non-GAAP)** |
|
|
31,879 |
|
|
|
15,434 |
|
|
|
28,140 |
|
|
|
106.6 |
% |
|
|
13.3 |
% |
| Adjusted EBITDA (non-GAAP)** |
|
|
84,414 |
|
|
|
63,957 |
|
|
|
87,219 |
|
|
|
32.0 |
% |
|
|
(3.2 |
)% |
| Diluted EPS |
|
|
0.08 |
|
|
|
0.18 |
|
|
|
0.28 |
|
|
|
(54.6 |
)% |
|
|
(71.4 |
)% |
| Adjusted Diluted EPS (non-GAAP)** |
|
|
0.32 |
|
|
|
0.16 |
|
|
|
0.30 |
|
|
|
105.0 |
% |
|
|
6.7 |
% |
**The
Company presents its financial results in accordance with generally accepted accounting principles in the United States of America (“GAAP”).
However, management believes that using additional non-GAAP measures will enhance the evaluation of the profitability of the Company
and its ongoing operations. Please see Tables 1, 2, 3, and 4 below for reconciliations of GAAP to non-GAAP financial measures. The Consolidated
Balance Sheets, Statements of Operations, and Statements of Cash Flows are derived from the financial statements that will be presented
in our Annual Report on Form 10-K for the year ended December 31, 2025.
Stefan
Angeli, Chief Financial Officer, commented, “Fourth quarter
2025 marked a strong finish to the year, highlighted by a sharp sequential acceleration in activity, disciplined cost execution, and
continued balance sheet strengthening. Revenue reached $398.3 million, reflecting a 34.9% sequential increase, driven by improved utilization
and the early stages of mobilization on recently awarded contracts. Adjusted EBITDA for the quarter increased 32% sequentially to $84.4
million. Adjusted EBITDA margins of 21.2% were substantially flat on a sequential quarter basis, underscoring the scalability of our
operating model and the effectiveness of our cost controls.
Net
income for the quarter was $7.8 million and was impacted by non-cash impairment charges on two small technology investments,
additional current expected credit loss provisions, mobilization-related restructuring costs in Oman, and other write-offs and
provisions, largely related to a vendor bankruptcy and resulting provision for a construction-in-process prepayment previously made in
Saudi Arabia. Excluding these items, Adjusted Net Income was $31.9 million, more than doubling sequentially, with Adjusted Diluted
EPS of $0.32. These results reflect strong underlying operating performance despite the impact of discrete items recorded during the
quarter.
During
2025, we continued to prioritize cash generation and debt reduction, ending the year with Net Debt of $185.3 million, down nearly $90
million year-over-year, and a significantly strengthened liquidity position. As we enter 2026, our focus remains on executing our growing
backlog efficiently, maintaining strong margins, improving working capital performance, and further enhancing returns on capital. We
believe NESR is uniquely positioned to enter its next phase of growth with record revenues, strong operational momentum, and a clear
focus on delivering durable, long-term value to shareholders.”
Sherif
Foda, Chairman and Chief Executive Officer, commented, “We are very pleased with our fourth quarter results, which cap another
year of disciplined execution and strategic progress for NESR. The quarter follows the announcement of several significant contract awards,
most notably our integrated unconventional completions scope in Saudi Arabia’s Jafurah development, which further reinforces
our long-standing partnership with Aramco and our role in enabling world-class unconventional operations in the Kingdom. Our countercyclical
investments over the past couple of years have positioned the Company with unmatched readiness across infrastructure, equipment,
digital capabilities, and people, to mobilize and execute at scale with confidence and efficiency. Importantly, we continue to see strong
momentum beyond Saudi Arabia, with new awards across the broader MENA region supporting a multi-year growth trajectory. As we enter
2026, NESR is shifting to a totally different gear and scale, operating from a position of strength, with multiple opportunities spanning
across different countries, and a highly committed team. We remain focused on delivering consistent value to our customers, shareholders,
and partners, and I am extremely proud of what our people have accomplished.”
Net
Income and Adjusted Net Income Results
Net
income for the quarter ended December 31, 2025, was $7.8 million, representing a decline from the prior quarter, primarily driven by
non-cash impairment charges on two immaterial technology investments, higher current expected credit loss provisions mainly in Oman,
mobilization-related restructuring costs in Oman, and other write-offs and provisions, largely related to a Saudi Arabia provision for
construction-in-process prepayment following a vendor bankruptcy. These impacts were partially offset by strong fall-through from higher sequential
revenues during the quarter. Adjusted net income for the quarter was $31.9 million and included $24.1 million of “Total
Charges and Credits impacting Adjusted Net Income and Adjusted Diluted EPS,” primarily attributable to the aforementioned
impairment charges totaling $8.1 million, $4.7 million of mobilization-related restructuring costs incurred in Oman, $7.1 million of
credit loss provisions mostly in Oman, and $3.7 million of other write-offs and provisions, largely related to the Saudi Arabia
construction-in-process prepayment provision, described above. A detailed
reconciliation of net income and diluted EPS to Adjusted Net Income and Adjusted Diluted EPS, including a complete list of adjusting
items, is presented in Table 1 below under “Reconciliation of Net Income and Diluted EPS to Adjusted Net Income and Adjusted
Diluted EPS.”
The
Company reported $0.08 of diluted EPS for the quarter ended December 31, 2025. Adjusted for the impact of Total Charges and Credits impacting
Adjusted Net Income and Adjusted Diluted EPS, Adjusted Diluted EPS, a non-GAAP measure described in Table 1 below, for the quarter ended
December 31, 2025, is $0.32, doubling from the $0.16 reported in the third quarter of 2025.
Adjusted
EBITDA Results
The
Company produced Adjusted EBITDA of $84.4 million during the quarter ended December 31, 2025, up 32.0% on a sequential quarter
basis. Adjusted EBITDA includes adjustments for certain Total Charges and Credits impacting Adjusted EBITDA (those not related to
interest, taxes, and/or depreciation and amortization). The Company posted the following results for the periods presented:
| (in thousands) | |
Quarter
ended December
31,
2025 | | |
Quarter
ended September
30,
2025 | | |
Quarter
ended December
31,
2024 | |
| Revenue | |
$ | 398,262 | | |
$ | 295,315 | | |
$ | 343,682 | |
| Adjusted EBITDA | |
$ | 84,414 | | |
$ | 63,957 | | |
$ | 87,219 | |
A
detailed reconciliation of net income to Adjusted EBITDA, including a complete list of adjusting items, is presented in Table 2 below
under “Reconciliation of Net Income to Adjusted EBITDA.”
Balance
Sheet
Cash
and cash equivalents are $124.8 million as of December 31, 2025, compared to $108.0 million as of December 31, 2024.
Free
cash flow, a non-GAAP measure, for the year ended December 31, 2025, was $120.8 million, compared to $124.2 million
for the same period in 2024. The decrease was primarily attributable to higher growth capital expenditures in 2025 as
compared to 2024, as offset in part by improved working capital management. A reconciliation of the applicable GAAP measures to free cash flow is presented in Table 3, titled
“Reconciliation of Net cash provided by (used in) operating activities to Free Cash Flow.”
Total
debt as of December 31, 2025, was $310.1 million, of which $118.8 million was classified as short-term, compared to $382.8 million and
$128.5 million, respectively, as of December 31, 2024. Net Debt, a non-GAAP measure defined as the sum of current installments of long-term
debt, short-term borrowings, and long-term debt less cash and cash equivalents, totaled $185.3 million as of December 31, 2025, compared
to $274.9 million at December 31, 2024. The decrease in Net Debt reflects scheduled long-term debt repayments made during 2025, more
than offset by a larger magnitude of free cash flow generation. A reconciliation of the applicable GAAP measures to Net Debt is presented
in Table 4, titled “Reconciliation to Net Debt.”
About
National Energy Services Reunited Corp.
Founded
in 2017, NESR is one of the largest national oilfield services providers in the MENA and Asia Pacific regions. With over
7,000 employees, representing more than 60 nationalities in 16 countries, the Company helps its customers unlock the full potential
of their reservoirs by providing Production Services such as Hydraulic Fracturing, Cementing, Coiled Tubing, Filtration, Completions,
Stimulation, Pumping and Nitrogen Services. The Company also helps its customers to access their reservoirs in a smarter and faster manner
by providing Drilling and Evaluation Services such as Drilling Downhole Tools, Directional Drilling, Fishing Tools, Testing Services,
Wireline, Slickline, Drilling Fluids and Rig Services.
Conference
Call
A
conference call is scheduled for 8:00 AM ET on February 17, 2026, to discuss the financial results. Investors, analysts and
members of the media are invited to participate by dialing in to the U.S. toll-free line at 1-877-407-0890 or the international line
at 1-201-389-0918, approximately 10 minutes prior to the start of the call.
A
live, listen-only earnings webcast will also be broadcast simultaneously under the “Investors” section of the Company’s
website at www.nesr.com. Following the end of the conference call, a replay will be available after the event under the “Investors”
section of the Company’s website.
Forward-Looking
Statements
This
communication contains forward-looking statements (as such term is defined in Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended). Any and all statements contained in this communication that are
not statements of historical fact, may be deemed forward-looking statements. Terms such as “may,” “might,” “would,”
“should,” “could,” “project,” “estimate,” “predict,” “potential,”
“strategy,” “anticipate,” “attempt,” “develop,” “plan,” “help,”
“believe,” “continue,” “intend,” “expect,” “future,” and terms of similar
import (including the negative of any of these terms) may identify forward-looking statements. However, not all forward-looking statements
may contain one or more of these identifying terms. Forward-looking statements in this communication may include, without limitation,
the plans and objectives of management for future operations, projections of income or loss, earnings or loss per share, capital expenditures,
dividends, capital structure or other financial items, the Company’s future financial performance, expansion plans and opportunities,
completion and integration of acquisitions, and the assumptions underlying or relating to any such statement.
The
forward-looking statements are not meant to predict or guarantee actual results, performance, events or circumstances and may not be
realized because they are based upon the Company’s current projections, plans, objectives, beliefs, expectations, estimates and
assumptions and are subject to a number of risks and uncertainties and other influences, many of which the Company has no control over.
Actual results and the timing of certain events and circumstances may differ materially from those described by the forward-looking statements
as a result of these risks and uncertainties. Factors that may influence or contribute to the accuracy of the forward-looking statements
or cause actual results to differ materially from expected or desired results may include, without limitation: catastrophic events, the
level of capital spending by our customers, political, market, financial and regulatory risks, including those related to the geographic
concentration of our operations and customers, our operations, including maintenance, upgrades and refurbishment of our assets, may require
significant capital expenditures, which may or may not be available to us, operating hazards inherent in our industry and the ability
to secure sufficient indemnities and insurance, our ability to successfully integrate acquisitions, competition, including for capital
and technological advances, and other risks and uncertainties set forth in the Company’s most recent Annual Report on Form 20-F
filed with the SEC.
You
are cautioned not to place undue reliance on forward-looking statements because of the risks and uncertainties related to them and to
the risk factors. The Company disclaims any obligation to update the forward-looking statements contained in this communication to reflect
any new information or future events or circumstances or otherwise, except as required by law. You should read this communication in
conjunction with other documents which the Company may file or furnish from time to time with the SEC.
The
preliminary financial results for the Company as of and for the three- and twelve-month periods ended December 31, 2025, included in
this press release, represent the most current information available to management. The Company’s actual results when disclosed
in its subsequent Annual Report on Form 10-K may differ from these preliminary results as a result of the completion of the Company’s
financial statement closing procedures, final adjustments, completion of the independent registered public accounting firm’s audit
procedures, and other developments that may arise between now and the disclosure of the final results.
NATIONAL
ENERGY SERVICES REUNITED CORP. AND SUBSIDIARIES
UNAUDITED
CONSOLIDATED BALANCE SHEETS
(In
US$ thousands, except share data)
| |
|
December
31,
2025 |
|
|
December
31,
2024 |
|
| |
|
|
|
|
|
|
| Assets |
|
|
|
|
|
|
|
|
| Current assets |
|
|
|
|
|
|
|
|
| Cash and cash equivalents |
|
$ |
124,797 |
|
|
$ |
107,956 |
|
| Accounts receivable, net |
|
|
178,020 |
|
|
|
137,265 |
|
| Unbilled revenue |
|
|
121,186 |
|
|
|
111,734 |
|
| Service inventories |
|
|
94,834 |
|
|
|
96,772 |
|
| Prepaid assets |
|
|
13,237 |
|
|
|
10,146 |
|
| Retention withholdings |
|
|
33,125 |
|
|
|
31,072 |
|
| Other receivables |
|
|
54,511 |
|
|
|
38,476 |
|
| Other current assets |
|
|
10,664 |
|
|
|
7,095 |
|
| Total current assets |
|
|
630,374 |
|
|
|
540,516 |
|
| Non-current assets |
|
|
|
|
|
|
|
|
| Property, plant and equipment, net |
|
|
465,454 |
|
|
|
438,146 |
|
| Intangible assets, net |
|
|
47,086 |
|
|
|
65,696 |
|
| Goodwill |
|
|
645,095 |
|
|
|
645,095 |
|
| Operating lease right-of-use assets |
|
|
20,300 |
|
|
|
26,042 |
|
| Other assets |
|
|
43,210 |
|
|
|
58,183 |
|
| Total assets |
|
$ |
1,851,519 |
|
|
$ |
1,773,678 |
|
| |
|
|
|
|
|
|
|
|
| Liabilities and equity |
|
|
|
|
|
|
|
|
| Liabilities |
|
|
|
|
|
|
|
|
| Accounts payable and accrued expenses |
|
|
421,064 |
|
|
|
305,308 |
|
| Current installments of long-term debt |
|
|
64,500 |
|
|
|
68,735 |
|
| Short-term borrowings |
|
|
54,250 |
|
|
|
59,720 |
|
| Income taxes payable |
|
|
25,092 |
|
|
|
7,728 |
|
| Other taxes payable |
|
|
12,351 |
|
|
|
27,482 |
|
| Operating lease liabilities |
|
|
2,948 |
|
|
|
5,449 |
|
| Other current liabilities |
|
|
24,715 |
|
|
|
29,090 |
|
| Total current liabilities |
|
|
604,920 |
|
|
|
503,512 |
|
| |
|
|
|
|
|
|
|
|
| Long-term debt |
|
|
191,378 |
|
|
|
254,387 |
|
| Deferred tax liabilities |
|
|
1,691 |
|
|
|
5,632 |
|
| Employee benefit liabilities |
|
|
36,321 |
|
|
|
31,806 |
|
| Non-current operating lease liabilities |
|
|
18,447 |
|
|
|
20,843 |
|
| Other liabilities |
|
|
30,846 |
|
|
|
49,266 |
|
| Total liabilities |
|
|
883,603 |
|
|
|
865,446 |
|
| |
|
|
|
|
|
|
|
|
| Equity |
|
|
|
|
|
|
|
|
| Preferred shares, no par value; unlimited shares authorized;
none issued and outstanding at December 31, 2025, and 2024, respectively |
|
|
- |
|
|
|
- |
|
| Common stock and additional paid in capital, no par
value; unlimited shares authorized; 100,787,173 and 96,045,856 shares issued and outstanding at December 31, 2025, and 2024, respectively |
|
|
902,845 |
|
|
|
894,293 |
|
| Retained income |
|
|
65,002 |
|
|
|
13,870 |
|
| Accumulated other comprehensive income |
|
|
69 |
|
|
|
69 |
|
| Total equity |
|
|
967,916 |
|
|
|
908,232 |
|
| Total liabilities and equity |
|
$ |
1,851,519 |
|
|
$ |
1,773,678 |
|
NATIONAL
ENERGY SERVICES REUNITED CORP. AND SUBSIDIARIES
UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS
(In
US$ thousands, except share data and per share amounts)
| |
|
For
the three-month
period ended |
|
|
For
the year ended |
|
| Description |
|
December
31,
2025 |
|
|
December
31,
2024 |
|
|
December
31,
2025 |
|
|
December
31,
2024 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Revenues |
|
$ |
398,262 |
|
|
$ |
343,682 |
|
|
$ |
1,324,047 |
|
|
$ |
1,301,704 |
|
| Cost of services |
|
|
(350,231 |
) |
|
|
(284,501 |
) |
|
|
(1,159,317 |
) |
|
|
(1,093,031 |
) |
| Gross profit |
|
|
48,031 |
|
|
|
59,181 |
|
|
|
164,730 |
|
|
|
208,673 |
|
| Selling, general and administrative expenses (excluding
Amortization) |
|
|
(12,655 |
) |
|
|
(10,905 |
) |
|
|
(47,636 |
) |
|
|
(52,195 |
) |
| Amortization |
|
|
(4,694 |
) |
|
|
(4,694 |
) |
|
|
(18,774 |
) |
|
|
(18,774 |
) |
| Operating income |
|
|
30,682 |
|
|
|
43,582 |
|
|
|
98,320 |
|
|
|
137,704 |
|
| Interest expense, net |
|
|
(7,539 |
) |
|
|
(9,905 |
) |
|
|
(32,513 |
) |
|
|
(39,881 |
) |
| Other expense, net |
|
|
(8,167 |
) |
|
|
(3,524 |
) |
|
|
(5,409 |
) |
|
|
(2,325 |
) |
| Income before income tax |
|
|
14,976 |
|
|
|
30,153 |
|
|
|
60,398 |
|
|
|
95,498 |
|
| Income tax expense |
|
|
(7,173 |
) |
|
|
(3,316 |
) |
|
|
(9,266 |
) |
|
|
(19,188 |
) |
| Net income |
|
$ |
7,803 |
|
|
$ |
26,837 |
|
|
$ |
51,132 |
|
|
$ |
76,310 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
|
|
100,782,309 |
|
|
|
95,955,545 |
|
|
|
98,444,582 |
|
|
|
95,472,527 |
|
| Diluted |
|
|
102,209,983 |
|
|
|
96,378,194 |
|
|
|
99,105,484 |
|
|
|
95,735,924 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Earnings per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic |
|
$ |
0.08 |
|
|
$ |
0.28 |
|
|
$ |
0.52 |
|
|
$ |
0.80 |
|
| Diluted |
|
$ |
0.08 |
|
|
$ |
0.28 |
|
|
$ |
0.52 |
|
|
$ |
0.80 |
|
NATIONAL
ENERGY SERVICES REUNITED CORP. AND SUBSIDIARIES
UNAUDITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In
US$ thousands)
| | |
Year
ended | |
| | |
December
31, 2025 | | |
December
31, 2024 | | |
December
31, 2023 | |
| | |
| | |
| | |
| |
| Cash flows from operating
activities: | |
| | | |
| | | |
| | |
| Net income / (loss) | |
$ | 51,132 | | |
$ | 76,310 | | |
$ | 12,580 | |
| Adjustments to reconcile
net income / (loss) to net cash provided by operating activities: | |
| | | |
| | | |
| | |
| Depreciation and amortization | |
| 141,729 | | |
| 142,784 | | |
| 142,230 | |
| Share-based compensation expense | |
| 8,321 | | |
| 6,032 | | |
| 6,763 | |
| Loss (Gain) on disposal of assets | |
| (3,568 | ) | |
| 467 | | |
| 487 | |
| Non-cash interest (income) expense | |
| 1,024 | | |
| (1,171 | ) | |
| 1,549 | |
| Deferred tax expense / (benefit) | |
| (5,198 | ) | |
| (2,719 | ) | |
| (3,753 | ) |
| Allowance for (reversal of) doubtful receivables
and unbilled revenue | |
| 8,727 | | |
| 8,844 | | |
| 410 | |
| Charges on obsolete service inventories | |
| 1,513 | | |
| 2,294 | | |
| 137 | |
| Impairments and other charges | |
| 9,568 | | |
| 5,324 | | |
| 7,917 | |
| Other operating activities, net | |
| 2,744 | | |
| 327 | | |
| 933 | |
| Changes in operating assets
and liabilities: | |
| | | |
| | | |
| | |
| (Increase) decrease in accounts receivable | |
| (49,482 | ) | |
| 25,159 | | |
| (22,971 | ) |
| (Increase) decrease in unbilled revenue | |
| (9,452 | ) | |
| (15,737 | ) | |
| 14,189 | |
| (Increase) decrease in retention withholdings | |
| (2,053 | ) | |
| 17,347 | | |
| (14,151 | ) |
| (Increase) decrease in inventories | |
| 425 | | |
| (633 | ) | |
| 11,951 | |
| (Increase) decrease in prepaid expenses | |
| (3,091 | ) | |
| (909 | ) | |
| (8,901 | ) |
| (Increase) decrease in other current assets | |
| (1,653 | ) | |
| 4,967 | | |
| 2,817 | |
| (Increase) decrease in other long-term assets
and liabilities | |
| (1,579 | ) | |
| (6,959 | ) | |
| 16,259 | |
| Increase (decrease) in accounts payable and
accrued expenses | |
| 116,160 | | |
| (38,517 | ) | |
| (3,365 | ) |
| Increase (decrease) in
other current liabilities | |
| (1,025 | ) | |
| 6,119 | | |
| 11,878 | |
| Net
cash provided by operating activities | |
| 264,242 | | |
| 229,329 | | |
| 176,959 | |
| | |
| | | |
| | | |
| | |
| Cash flows from investing
activities: | |
| | | |
| | | |
| | |
| Capital expenditures | |
| (143,454 | ) | |
| (105,105 | ) | |
| (68,190 | ) |
| IPM investments | |
| - | | |
| - | | |
| (16,031 | ) |
| Proceeds from disposal of assets | |
| 4,905 | | |
| 3,058 | | |
| 1,758 | |
| Other investing activities | |
| (13,689 | ) | |
| (9,087 | ) | |
| (1,000 | ) |
| Net
cash used in investing activities | |
| (152,238 | ) | |
| (111,134 | ) | |
| (83,463 | ) |
| | |
| | | |
| | | |
| | |
| Cash flows from financing
activities: | |
| | | |
| | | |
| | |
| Proceeds from long-term debt | |
| - | | |
| 4,063 | | |
| 11,300 | |
| Repayments of long-term debt | |
| (68,735 | ) | |
| (85,806 | ) | |
| (54,763 | ) |
| Proceeds from short-term borrowings | |
| 98,578 | | |
| 83,434 | | |
| 94,506 | |
| Repayments of short-term borrowings | |
| (104,197 | ) | |
| (72,614 | ) | |
| (137,402 | ) |
| Payments on capital leases | |
| (3,905 | ) | |
| (3,193 | ) | |
| (2,403 | ) |
| Payments on seller-provided financing for capital
expenditures | |
| (7,408 | ) | |
| (3,781 | ) | |
| (15,569 | ) |
| Other financing activities,
net | |
| (1,597 | ) | |
| (163 | ) | |
| (197 | ) |
| Net
cash provided by (used in) financing activities | |
| (87,264 | ) | |
| (78,060 | ) | |
| (104,528 | ) |
| | |
| | | |
| | | |
| | |
| Effect of exchange rate
changes on cash | |
| - | | |
| - | | |
| - | |
| Net increase (decrease)
in cash | |
| 24,740 | | |
| 40,135 | | |
| (11,032 | ) |
| Cash and cash equivalents,
beginning of period | |
| 107,956 | | |
| 67,821 | | |
| 78,853 | |
| Cash,
cash equivalents, and restricted cash, end of period | |
$ | 132,696 | | |
$ | 107,956 | | |
$ | 67,821 | |
NATIONAL
ENERGY SERVICES REUNITED CORP. AND SUBSIDIARIES
RECONCILIATION
OF NON-GAAP FINANCIAL MEASURES
(Unaudited)
(In
US$ thousands except per share amounts)
The
Company uses and presents certain key non-GAAP financial measures to evaluate its business and trends, measure performance, prepare financial
projections and make strategic decisions. Included in this release are discussions of earnings before interest, income tax and depreciation
and amortization adjusted for certain non-recurring and non-core expenses (“Adjusted EBITDA”), net income and diluted earnings
per share (“EPS”) adjusted for certain non-recurring and non-core expenses (“Adjusted Net Income” and “Adjusted
Diluted EPS,” respectively), as well as a reconciliation of these non-GAAP measures to net income and diluted EPS, respectively,
in accordance with GAAP. The Company also discusses the non-GAAP balance sheet measure of the sum of our recorded current installments
of long-term debt, short-term borrowings, and long-term debt less cash and cash equivalents (“Net Debt”) in this release
and provides a reconciliation to the GAAP measures of cash and cash equivalents, current installments of long-term debt, short-term borrowings,
and long-term debt to Net Debt. The Company also discusses Free Cash Flow reconciled to Operating Cash Flow.
The
Company believes that the presentation of Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted EPS provides useful information
to investors in assessing its financial performance and results of operations as the Company’s board of directors, management and
investors use Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted EPS to compare the Company’s operating performance on
a consistent basis across periods by removing the effects of changes in capital structure (such as varying levels of interest expense),
asset base (such as depreciation and amortization), items that do not impact the ongoing operations (transaction, integration, and startup
costs) and items outside the control of its management team. Similarly, Net Debt is used by management as a liquidity measure used to
illustrate the Company’s debt level absent variability in cash and cash equivalents, and the Company believes that the presentation
of Net Debt provides useful information to investors in assessing its financial leverage. Adjusted EBITDA, Adjusted Net Income, and Adjusted
Diluted EPS should not be considered as an alternative to operating income, net income, or diluted EPS, respectively, the most directly
comparable GAAP financial measures. Net Debt also should not be considered as an alternative to GAAP measures of cash and cash equivalents,
current installments of long-term debt, short-term borrowings, and long-term debt. Finally, Free Cash Flow is used by management as a
liquidity measure to illustrate the Company’s ability to produce cash that is available to be distributed in a discretionary manner,
after excluding investments in capital assets. Free Cash Flow should not be considered as an alternative to Net cash provided by (used
in) operations or Net cash provided by (used in) investing activities, respectively, the most directly comparable GAAP financial measures.
Non-GAAP financial measures have important limitations as analytical tools because they exclude some but not all items that affect the
most directly comparable GAAP financial measure. You should not consider non-GAAP measures in isolation or as a substitute for an analysis
of the Company’s results as reported under GAAP.
Table
1 - Reconciliation of Net Income and Diluted EPS to Adjusted Net Income and Adjusted Diluted EPS
| | |
Quarter ended | | |
Quarter ended | | |
Quarter ended | |
| | |
December
31,
2025 | | |
September
30,
2025 | | |
December
31,
2024 | |
| | |
Net | | |
Diluted | | |
Net | | |
Diluted | | |
Net | | |
Diluted | |
| | |
Income | | |
EPS | | |
Income | | |
EPS | | |
Income | | |
EPS | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
| Net Income | |
$ | 7,803 | | |
$ | 0.08 | | |
$ | 17,737 | | |
$ | 0.18 | | |
$ | 26,837 | | |
$ | 0.28 | |
| Add/(Subtract): Charges
and Credits impacting Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted EPS: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Costs associated with the
restatement of our 2018-2020 financial statements, including the SEC inquiry and remediation | |
| 258 | | |
| - | | |
| 787 | | |
| 0.01 | | |
| 1,480 | | |
| 0.02 | |
| Impairments | |
| 8,076 | | |
| 0.08 | | |
| - | | |
| - | | |
| 3,741 | | |
| 0.04 | |
| Current expected credit
loss (releases) provisions | |
| 7,112 | | |
| 0.07 | | |
| 1,474 | | |
| 0.01 | | |
| 486 | | |
| 0.01 | |
| Litigation (releases) provisions | |
| 248 | | |
| - | | |
| 235 | | |
| - | | |
| 340 | | |
| - | |
| Restructuring projects | |
| 4,712 | | |
| 0.05 | | |
| 720 | | |
| 0.01 | | |
| - | | |
| - | |
| Loss of inventory in fire | |
| - | | |
| - | | |
| 1,980 | | |
| 0.02 | | |
| - | | |
| - | |
| Other
write-offs (recoveries) and provisions (release of provisions) | |
| 3,670 | | |
| 0.04 | | |
| 1,659 | | |
| 0.02 | | |
| (958 | ) | |
| (0.01 | ) |
| Total
Charges and Credits impacting Adjusted EBITDA (1) | |
| 24,076 | | |
| 0.24 | | |
| 6,855 | | |
| 0.07 | | |
| 5,089 | | |
| 0.06 | |
| Add/(Subtract): Charges
and Credits impacting only Adjusted Net Income and Adjusted Diluted EPS: | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Adjustments
to uncertain tax positions and unrecognized tax benefits | |
| - | | |
| - | | |
| (9,158 | ) | |
| (0.09 | ) | |
| (3,786 | ) | |
| (0.04 | ) |
| Total
Charges and Credits impacting Adjusted Net Income and Adjusted Diluted EPS (2) | |
| 24,076 | | |
| 0.24 | | |
| (2,303 | ) | |
| (0.02 | ) | |
| 1,303 | | |
| 0.02 | |
| Total
Adjusted Net Income and Adjusted Diluted EPS | |
$ | 31,879 | | |
$ | 0.32 | | |
$ | 15,434 | | |
$ | 0.16 | | |
$ | 28,140 | | |
$ | 0.30 | |
| |
(1) |
In
the quarter ended December 31, 2025, Total Charges and Credits impacting Adjusted EBITDA included $0.3 million of costs associated
with the restatement of our 2018-2020 financial statements, including the SEC inquiry and remediation, $8.1 million of technology
impairments, $7.1 million of current expected credit loss (releases) provisions mainly in Oman, $0.2 million of litigation
(releases) provisions, $4.7 million of restructuring projects, and $3.7 million of other write-offs (recoveries) and provisions (release
of provisions) primarily related to a Saudi Arabia construction-in-progress prepayment described above. In the quarter ended
September 30, 2025, Total Charges and Credits impacting Adjusted EBITDA included $0.8 million of costs associated with the restatement
of our 2018-2020 financial statements, including the SEC inquiry and remediation, $1.5 million of current expected credit loss (releases)
provisions, $0.2 million of litigation (releases) provisions, $0.7 million of restructuring projects, $2.0 million due to loss of
inventory in fire, and $1.7 million of other write-offs (recoveries) and provisions (release of provisions). In the quarter ended
December 31, 2024, Total Charges and Credits impacting Adjusted EBITDA included $1.5 million of costs associated with the restatement
of our 2018-2020 financial statements, including the SEC inquiry and remediation, $3.7 million of impairments, $0.5 million of current
expected credit loss (releases) provisions, $0.3 million of litigation (releases) provisions, and $(1.0) million of other write-offs
(recoveries) and provisions (release of provisions). |
| |
(2) |
Total
Charges and Credits impacting Adjusted Net Income and Adjusted Diluted EPS for the quarter ended September 30, 2025, was $(2.3)
million inclusive of Total Charges and Credits impacting Adjusted EBITDA of $6.9 million, less $9.2 million related to a net release
of uncertain tax positions and unrecognized tax benefits. Total Charges and Credits impacting Adjusted Net Income and Adjusted
Diluted EPS for the quarter ended December 31, 2024, was $1.3 million inclusive of Total Charges and Credits impacting Adjusted
EBITDA of $5.1 million, less $(3.8) million related to the release of an uncertain tax position. |
Table
2 - Reconciliation of Net Income to Adjusted EBITDA
| |
|
Quarter
ended
December
31,
2025 |
|
|
Quarter
ended
September
30,
2025 |
|
|
Quarter
ended
December
31,
2024 |
|
| |
|
|
|
|
|
|
|
|
|
| Net Income |
|
$ |
7,803 |
|
|
$ |
17,737 |
|
|
$ |
26,837 |
|
| Add: |
|
|
|
|
|
|
|
|
|
|
|
|
| Income Taxes |
|
|
7,173 |
|
|
|
(5,500 |
) |
|
|
3,316 |
|
| Interest Expense, net |
|
|
7,539 |
|
|
|
8,128 |
|
|
|
9,905 |
|
| Depreciation and Amortization |
|
|
37,823 |
|
|
|
36,737 |
|
|
|
42,072 |
|
| Total
Charges and Credits impacting Adjusted EBITDA (3) |
|
|
24,076 |
|
|
|
6,855 |
|
|
|
5,089 |
|
| Total Adjusted EBITDA |
|
$ |
84,414 |
|
|
$ |
63,957 |
|
|
$ |
87,219 |
|
| |
(3) |
Total
Charges and Credits impacting Adjusted EBITDA are described in Table 1 above. Total Charges and Credits impacting Adjusted EBITDA
exclude items related to interest, income tax and depreciation and amortization. |
Table
3 - Reconciliation of Net cash provided by (used in) operating activities to Free Cash Flow
| |
|
Twelve
months ended
December
31,
2025 |
|
|
Twelve
months ended
December
31,
2024 |
|
| |
|
|
|
|
|
|
| Net cash provided by operating activities |
|
$ |
264,242 |
|
|
$ |
229,329 |
|
| Less: |
|
|
|
|
|
|
|
|
| Capital expenditures |
|
|
(143,454 |
) |
|
|
(105,105 |
) |
| Free cash flow |
|
$ |
120,788 |
|
|
$ |
124,224 |
|
Table
4 - Reconciliation to Net Debt
| | |
As
of December
31,
2025 | | |
As
of December
31,
2024 | | |
As
of September
30,
2025 | |
| | |
| | |
| | |
| |
| Current installments of long-term
debt | |
$ | 64,500 | | |
$ | 68,735 | | |
$ | 64,500 | |
| Short-term borrowings | |
| 54,250 | | |
| 59,720 | | |
| 61,269 | |
| Long-term debt | |
| 191,378 | | |
| 254,387 | | |
| 207,180 | |
| Less: | |
| | | |
| | | |
| | |
| Cash
and cash equivalents | |
| (124,797 | ) | |
| (107,956 | ) | |
| (69,683 | ) |
| Net
Debt | |
$ | 185,331 | | |
$ | 274,886 | | |
$ | 263,266 | |
For
inquiries regarding NESR, please contact:
Blake
Gendron or Stefan Angeli
National
Energy Services Reunited Corp.
832-925-3777
investors@nesr.com
