On November 9, 2026, the Company issued a
press release announcing its financial results for the three-month and nine-month periods ended September 30, 2026, and the declaration
of a quarterly cash dividend. A copy of the press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated
herein by reference.
In accordance with General Instruction B.2
of Form 8-K, the information contained in this Item 7.01 and Exhibit 99.1, other than the information expressly identified as filed pursuant
to Item 8.01 and Item 9.01 of this Current Report on Form 8-K, is being furnished and shall not be deemed “filed” for purposes
of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities
of that section, nor shall such furnished information be incorporated by reference into any filing under the Securities Act of 1933,
as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.
On November 6, 2026, the Company’s Board
of Directors declared a quarterly cash dividend of $0.10 per ordinary share, payable on December 10, 2026, to shareholders of record
as of the close of business on December 3, 2026. The dividend declaration was announced in the Company’s November 9, 2026, press
release, attached as Exhibit 99.1 to this Current Report on Form 8-K. The information in Exhibit 99.1 relating specifically to the dividend
declaration is incorporated by reference into this Item 8.01 and is filed herewith.
Exhibit
99.1
National
Energy Services Reunited Corp. Reports Third Quarter 2026 Financial Results and Declares Cash Dividend of $0.10 Per Share
| |
● |
Revenue
for the quarter ended September 30, 2026, is $504.7 million, reflecting an increase of 70.9% year-over-year |
| |
● |
Net
income for the quarter ended September 30, 2026, is $34.3 million, improving 93.5% year-over-year |
| |
● |
Diluted
Earnings per Share (EPS) for the quarter ended September 30, 2026 is $0.33, representing an increase of 83.3% year-over-year |
| |
● |
Adjusted
EBITDA (a non-GAAP measure)** for the quarter ended September 30, 2026, is $95.9 million, improving 49.9% year-over-year |
| |
● |
Declares quarterly cash dividend of $0.10 per share
payable on December 10, 2026 |
HOUSTON,
November 9, 2026 – National Energy Services Reunited Corp. (“NESR” or the “Company”), a leading integrated
energy services provider in the Middle East and North Africa, today announced its financial results as of and for
the three-month and nine-month periods ended September 30, 2026. The Company delivered the following results for the periods presented:
| | |
Three Months Ended | | |
Variance | |
| (in thousands except per share amounts and percentages) | |
September 30, 2026 | | |
June 30, 2026 | | |
September 30, 2025 | | |
Sequential | | |
Year- over- year | |
| | |
| | |
| | |
| | |
| | |
| |
| Revenue | |
$ | 504,725 | | |
$ | 520,752 | | |
$ | 295,315 | | |
| (3.1 | )% | |
| 70.9 | % |
| Net income | |
| 34,328 | | |
| 44,017 | | |
| 17,737 | | |
| (22.0 | )% | |
| 93.5 | % |
| Adjusted net income (non-GAAP)** | |
| 39,641 | | |
| 45,469 | | |
| 15,434 | | |
| (12.8 | )% | |
| 156.8 | % |
| Adjusted EBITDA (non-GAAP)** | |
| 95,880 | | |
| 106,184 | | |
| 63,957 | | |
| (9.7 | )% | |
| 49.9 | % |
| Diluted EPS | |
| 0.33 | | |
| 0.43 | | |
| 0.18 | | |
| (22.6 | )% | |
| 83.3 | % |
| Adjusted Diluted EPS (non-GAAP)** | |
| 0.38 | | |
| 0.44 | | |
| 0.16 | | |
| (12.9 | )% | |
| 137.5 | % |
**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, Consolidated Statements of Operations, and Consolidated Statements of Cash Flows are derived from the consolidated financial
statements presented in our Quarterly Report on Form 10-Q as of and for the three-month and nine-month periods ended September 30, 2026.
Stefan
Angeli, Chief Financial Officer, commented, “NESR delivered another strong quarter of financial performance, reflecting the continued
momentum of our business despite an increasingly challenging operating environment. Third quarter revenue grew year-over-year to
$504.7 million, while Adjusted EBITDA increased 50% to $95.9 million and net income nearly doubled to $34.3 million. While sequential performance moderated from the record levels achieved in the second quarter, we remain encouraged by the underlying
fundamentals of our business and the continued expansion of our operations across the region.
During the first nine months of
2026, we generated over $200 million of operating cash flow, invested more than $150 million in capital expenditures to support our
growing contract portfolio, and reduced net debt by approximately $25 million. As separately disclosed last week, we are also
pleased to have entered into a comprehensive refinancing arrangement with a consortium of leading regional and international
financial institutions, representing another important milestone in strengthening NESR’s financial foundation. The new
facilities refinance our existing secured credit facilities, establish a multi-year maturity profile, and provide a combination of term
financing, revolving credit and working capital facilities to support our expanding operations. Importantly, the refinancing
reflects the continued confidence of our banking partners in NESR’s financial performance and long-term growth prospects,
while providing greater financial flexibility and liquidity to pursue strategic opportunities across our markets.
Finally, we are pleased to announce the declaration
of a $0.10 per share cash dividend, reflecting our confidence in NESR’s financial strength, continued cash flow generation, and
commitment to delivering value to our shareholders.”
Sherif Foda, Chairman and Chief Executive
Officer, commented, “Resilience has been the defining theme of this quarter. I would like to recognize and congratulate our
customers and the countries in which we operate for the exceptional resilience, reliability and flexibility they have demonstrated amid
the ongoing regional conflict. Throughout these challenging circumstances, NESR maintained a 100% operational presence across all our
operating units, standing firmly alongside our customers and the communities we serve. Our field teams demonstrated extraordinary dedication
and commitment, delivering revenue growth of more than 70% year-over-year while maintaining an unwavering focus on operational excellence,
service quality and meeting our customer commitments.
I am also particularly proud to have
celebrated with our valued customers in Riyadh the recent announcement of our agreement to deliver the region’s first direct lithium
extraction project. This landmark achievement represents a major milestone in our strategy to expand NESR Environmental & Decarbonization
Applications (NEDA) and is the culmination of years of collaboration, piloting and technology development alongside our customers. More
importantly, it underscores the enormous potential to unlock new growth opportunities while advancing our shared ambition to decarbonize
the energy industry.”
Net
Income and Adjusted Net Income Results
Net
income for the quarter ended September 30, 2026, is $34.3 million, an increase of $16.6 million year-over-year and a decrease of $9.7
million sequentially. The changes between periods were primarily attributable to fluctuations in revenue generated by activity levels
in the Company’s hydraulic fracturing, well testing, and wireline logging service lines.
Adjusted
Net Income (as defined below) for the quarter is $39.6 million and excludes $5.3 million of “Total Charges
and Credits impacting Adjusted Net Income and Adjusted Diluted EPS,” primarily attributable to a $2.9 million impairment recognized
during the third quarter of 2026 related to an investment accounted for under the measurement alternative prescribed by Accounting Standards
Codification 321, Investments—Equity Securities, and $1.1 million of current expected credit loss provisions. 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 (as defined below).”
The
Company reported $0.33 of diluted EPS for the quarter ended September 30, 2026, improving $0.15 year-over-year and declining $0.10 sequentially.
Adjusted diluted EPS, a non-GAAP measure, is $0.38 for the quarter, compared with $0.44 sequentially and $0.16 in the prior-year
quarter.
Adjusted
EBITDA Results
The
Company produced Adjusted EBITDA of $95.9 million during the quarter ended September 30, 2026, up 49.9% year-over-year and down 9.7%
sequentially. 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 September 30, 2026 | | |
Quarter ended June 30, 2026 | | |
Quarter ended September 30, 2025 | |
| Revenue | |
$ | 504,725 | | |
$ | 520,752 | | |
$ | 295,315 | |
| Adjusted EBITDA | |
$ | 95,880 | | |
$ | 106,184 | | |
$ | 63,957 | |
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 were $106.8 million as of September 30, 2026, compared to $124.8 million as of December 31, 2025, and $69.7 million
as of September 30, 2025.
Free
cash flow, a non-GAAP measure, for the quarter ended September 30, 2026, is negative $45.9 million, compared to negative $34.1 million
for the same period in 2025. Quarterly Free Cash Flow declined year-over-year, primarily due to increased working capital requirements
and modestly higher capital expenditures, partially offset by higher net income and noncash adjustments in the reconciliation of net
income to net cash provided by operating activities. A reconciliation of the applicable GAAP measures to Free Cash Flow is presented
in Table 3, titled “Reconciliation of Net cash provided by operating activities to Free Cash Flow.”
Total
debt as of September 30, 2026, is $267.3 million, of which $123.4 million is classified as short-term, compared to total
debt of $310.1 million, including $118.8 million classified as short-term, as of December 31, 2025. Net Debt, a non-GAAP measure defined
as current installments of long-term debt, short-term borrowings, and long-term debt, less cash and cash equivalents, is $160.5
million as of September 30, 2026, compared to $185.3 million as of December 31, 2025. The decrease in Net Debt is primarily attributable
to debt repayments during 2026 partially offset by a decrease in cash and cash equivalents over the same period. A reconciliation of
the applicable GAAP measures to Net Debt is presented in Table 4, “Reconciliation to Net Debt.”
Declaration of Cash Dividend of $0.10 Per
Share
On November 6, 2026, the Company’s Board of
Directors declared a cash dividend of $0.10 per ordinary share, payable on December 10, 2026, to shareholders of record as of December
3, 2026.
About
National Energy Services Reunited Corp.
Founded
in 2017, NESR is one of the largest national oilfield services providers in the Middle East and North Africa. 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 November 9, 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,
expectations regarding NEDA’s growth opportunities and potential, 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: changing commodity prices,
market volatility and other market trends affecting customer demand for our services, public health crises and other 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, which
may require significant capital expenditures that 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, conditions in the Middle
East, including uncertainty and instability resulting from the conflict between the United States, Israel and Iran and other regional
hostilities, and other risks and uncertainties set forth in the Company’s most recent Annual Report on Form 10-K, filed with the
Securities and Exchange Commission (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.
NATIONAL
ENERGY SERVICES REUNITED CORP. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In
US$ thousands, except share data)
| | |
September 30, 2026 | | |
December 31, 2025 | |
| | |
| | |
| |
| Assets | |
| | | |
| | |
| Current assets | |
| | | |
| | |
| Cash and cash equivalents | |
$ | 106,843 | | |
$ | 124,797 | |
| Accounts receivable, net | |
| 262,659 | | |
| 178,020 | |
| Unbilled revenue | |
| 221,279 | | |
| 121,186 | |
| Service inventories | |
| 148,228 | | |
| 94,834 | |
| Prepaid assets | |
| 26,177 | | |
| 13,237 | |
| Retention withholdings | |
| 41,658 | | |
| 33,125 | |
| Other receivables | |
| 53,572 | | |
| 54,511 | |
| Other current assets | |
| 13,105 | | |
| 10,664 | |
| Total current assets | |
| 873,521 | | |
| 630,374 | |
| Non-current assets | |
| | | |
| | |
| Property, plant and equipment, net | |
| 561,630 | | |
| 465,454 | |
| Intangible assets, net | |
| 34,178 | | |
| 47,086 | |
| Goodwill | |
| 645,095 | | |
| 645,095 | |
| Operating lease right-of-use assets | |
| 24,993 | | |
| 20,300 | |
| Other assets | |
| 44,201 | | |
| 43,210 | |
| Total assets | |
$ | 2,183,618 | | |
$ | 1,851,519 | |
| | |
| | | |
| | |
| Liabilities and equity | |
| | | |
| | |
| Liabilities | |
| | | |
| | |
| Accounts payable and accrued expenses | |
| 666,612 | | |
| 421,064 | |
| Current installments of long-term debt | |
| 64,500 | | |
| 64,500 | |
| Short-term borrowings | |
| 58,922 | | |
| 54,250 | |
| Income taxes payable | |
| 36,047 | | |
| 25,092 | |
| Other taxes payable | |
| 6,810 | | |
| 12,351 | |
| Operating lease liabilities | |
| 2,074 | | |
| 2,948 | |
| Other current liabilities | |
| 27,294 | | |
| 24,715 | |
| Total current liabilities | |
| 862,259 | | |
| 604,920 | |
| | |
| | | |
| | |
| Long-term debt | |
| 143,871 | | |
| 191,378 | |
| Deferred tax liabilities | |
| 660 | | |
| 1,691 | |
| Employee benefit liabilities | |
| 39,771 | | |
| 36,321 | |
| Non-current operating lease liabilities | |
| 22,670 | | |
| 18,447 | |
| Other liabilities | |
| 34,272 | | |
| 30,846 | |
| Total liabilities | |
| 1,103,503 | | |
| 883,603 | |
| | |
| | | |
| | |
| Commitments and contingencies | |
| | | |
| | |
| | |
| | | |
| | |
| Equity | |
| | | |
| | |
| Preferred shares, no par value; unlimited shares authorized; none issued and outstanding at September 30, 2026, and December 31, 2025, respectively | |
| - | | |
| - | |
| Ordinary shares and additional paid-in capital, no par value; unlimited shares authorized; 102,123,175, and 100,787,173 shares issued and outstanding at September 30, 2026, and December 31, 2025, respectively | |
| 912,872 | | |
| 902,845 | |
| Retained income | |
| 167,174 | | |
| 65,002 | |
| Accumulated other comprehensive income | |
| 69 | | |
| 69 | |
| Total equity | |
| 1,080,115 | | |
| 967,916 | |
| Total liabilities and equity | |
$ | 2,183,618 | | |
$ | 1,851,519 | |
NATIONAL
ENERGY SERVICES REUNITED CORP. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In
US$ thousands, except share data and per share amounts)
| | |
For the three-month period ended | | |
For the nine-month period ended | |
| Description | |
September 30, 2026 | | |
September 30, 2025 | | |
September 30, 2026 | | |
September 30, 2025 | |
| | |
| | |
| | |
| | |
| |
| Revenues | |
$ | 504,725 | | |
$ | 295,315 | | |
$ | 1,430,063 | | |
$ | 925,785 | |
| Cost of services | |
| (435,771 | ) | |
| (259,955 | ) | |
| (1,227,986 | ) | |
| (809,086 | ) |
| Gross profit | |
| 68,954 | | |
| 35,360 | | |
| 202,077 | | |
| 116,699 | |
| Selling, general and administrative expenses (excluding Amortization) | |
| (12,573 | ) | |
| (11,061 | ) | |
| (35,694 | ) | |
| (34,981 | ) |
| Amortization | |
| (3,872 | ) | |
| (4,693 | ) | |
| (12,998 | ) | |
| (14,080 | ) |
| Operating income | |
| 52,509 | | |
| 19,606 | | |
| 153,385 | | |
| 67,638 | |
| Interest expense, net | |
| (6,706 | ) | |
| (8,128 | ) | |
| (20,287 | ) | |
| (24,974 | ) |
| Other (expense) / income, net | |
| (2,761 | ) | |
| 759 | | |
| (197 | ) | |
| 2,758 | |
| Income before income tax | |
| 43,042 | | |
| 12,237 | | |
| 132,901 | | |
| 45,422 | |
| Income tax (expense) / benefit | |
| (8,714 | ) | |
| 5,500 | | |
| (30,729 | ) | |
| (2,093 | ) |
| Net income | |
$ | 34,328 | | |
$ | 17,737 | | |
$ | 102,172 | | |
$ | 43,329 | |
| | |
| | | |
| | | |
| | | |
| | |
| Weighted average shares outstanding: | |
| | | |
| | | |
| | | |
| | |
| Basic | |
| 101,490,792 | | |
| 100,356,020 | | |
| 101,050,794 | | |
| 97,656,777 | |
| Diluted | |
| 103,385,626 | | |
| 100,724,290 | | |
| 103,193,761 | | |
| 97,951,178 | |
| | |
| | | |
| | | |
| | | |
| | |
| Earnings per share: | |
| | | |
| | | |
| | | |
| | |
| Basic | |
$ | 0.34 | | |
$ | 0.18 | | |
$ | 1.01 | | |
$ | 0.44 | |
| Diluted | |
$ | 0.33 | | |
$ | 0.18 | | |
$ | 0.99 | | |
$ | 0.44 | |
NATIONAL
ENERGY SERVICES REUNITED CORP. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In
US$ thousands)
| | |
For the nine-month period ended | |
| Description | |
September 30, 2026 | | |
September 30, 2025 | |
| Cash flows from operating activities: | |
| | | |
| | |
| Net income | |
$ | 102,172 | | |
$ | 43,329 | |
| Adjustments to reconcile net income to net cash provided by operating activities: | |
| | | |
| | |
| Depreciation and amortization | |
| 106,966 | | |
| 106,480 | |
| Share-based compensation expense | |
| 8,910 | | |
| 5,747 | |
| (Gain) on disposal of assets | |
| (2,506 | ) | |
| (4,271 | ) |
| Non-cash interest expense | |
| 597 | | |
| 983 | |
| Deferred tax expense (benefit) | |
| 2,928 | | |
| (1,497 | ) |
| Allowance for doubtful receivables and unbilled revenue | |
| 2,945 | | |
| 694 | |
| Charges on obsolete service inventories | |
| 3,141 | | |
| 1,161 | |
| Impairments and other charges | |
| 2,850 | | |
| 1,492 | |
| Other operating activities, net | |
| 104 | | |
| 399 | |
| Changes in operating assets and liabilities: | |
| | | |
| | |
| (Increase) decrease in accounts receivable | |
| (87,207 | ) | |
| (56,198 | ) |
| (Increase) decrease in unbilled revenue | |
| (100,093 | ) | |
| (14,600 | ) |
| (Increase) decrease in retention withholdings | |
| (8,533 | ) | |
| 12,491 | |
| (Increase) decrease in inventories | |
| (56,536 | ) | |
| (2,161 | ) |
| (Increase) decrease in prepaid assets | |
| (12,940 | ) | |
| (6,532 | ) |
| (Increase) decrease in other current assets | |
| 5,077 | | |
| (17,771 | ) |
| (Increase) decrease in other long-term assets and liabilities | |
| 5,045 | | |
| (1,105 | ) |
| Increase (decrease) in accounts payable and accrued expenses | |
| 224,882 | | |
| 63,923 | |
| Increase (decrease) in other current liabilities | |
| 3,735 | | |
| (6,912 | ) |
| Net cash provided by operating activities | |
| 201,537 | | |
| 125,652 | |
| | |
| | | |
| | |
| Cash flows from investing activities: | |
| | | |
| | |
| Capital expenditures | |
| (152,819 | ) | |
| (100,620 | ) |
| IPM investments | |
| - | | |
| - | |
| Proceeds from disposal of assets | |
| 2,229 | | |
| 2,086 | |
| Other investing activities | |
| (4,333 | ) | |
| (8,250 | ) |
| Net cash used in investing activities | |
| (154,923 | ) | |
| (106,784 | ) |
| | |
| | | |
| | |
| Cash flows from financing activities: | |
| | | |
| | |
| Proceeds from long-term debt | |
| - | | |
| - | |
| Repayments of long-term debt | |
| (48,375 | ) | |
| (52,610 | ) |
| Proceeds from short-term borrowings | |
| 73,349 | | |
| 75,711 | |
| Repayments of short-term borrowings | |
| (68,626 | ) | |
| (74,217 | ) |
| Payments on capital leases | |
| (4,026 | ) | |
| (2,778 | ) |
| Payments on seller-provided financing for capital expenditures | |
| (5,228 | ) | |
| (1,650 | ) |
| Other financing activities, net | |
| - | | |
| (1,597 | ) |
| Net cash used in financing activities | |
| (52,906 | ) | |
| (57,141 | ) |
| | |
| | | |
| | |
| Effect of exchange rate changes on cash | |
| - | | |
| - | |
| Net increase (decrease) in cash, cash equivalents, and restricted cash | |
| (6,292 | ) | |
| (38,273 | ) |
| Cash, cash equivalents, and restricted cash, beginning
of period (1) | |
| 132,696 | | |
| 107,956 | |
| Cash, cash equivalents, and restricted cash, end of period(1) | |
$ | 126,404 | | |
$ | 69,683 | |
| |
(1) |
Totals differ from Cash
and cash equivalents on Condensed Consolidated Balance Sheets due to inclusion of restricted cash in Condensed Consolidated Statements
of Cash Flows. |
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/or non-core expenses (“Adjusted EBITDA”), net income and diluted
earnings per share (“EPS”) adjusted for certain non-recurring and/or 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 reflects total borrowings less cash and cash equivalents
and is used by management to assess 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 assess the Company’s ability to generate cash from operating activities after capital expenditures, which may be available to
service debt and fund other discretionary uses. 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 | |
| | |
September 30, 2026 | | |
June 30, 2026 | | |
September 30, 2025 | |
| | |
Net | | |
Diluted | | |
Net | | |
Diluted | | |
Net | | |
Diluted | |
| | |
Income | | |
EPS | | |
Income | | |
EPS | | |
Income | | |
EPS | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
| Net Income | |
$ | 34,328 | | |
$ | 0.33 | | |
$ | 44,017 | | |
$ | 0.43 | | |
$ | 17,737 | | |
$ | 0.18 | |
| 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 | |
| 22 | | |
| - | | |
| 123 | | |
| - | | |
| 787 | | |
| 0.01 | |
| Impairments | |
| 2,850 | | |
| 0.03 | | |
| - | | |
| - | | |
| - | | |
| - | |
| Current expected credit loss (releases) provisions | |
| 1,123 | | |
| 0.01 | | |
| 965 | | |
| 0.01 | | |
| 1,474 | | |
| 0.01 | |
| Litigation (releases) provisions | |
| 333 | | |
| - | | |
| 92 | | |
| - | | |
| 235 | | |
| - | |
| Restructuring projects | |
| 85 | | |
| - | | |
| 163 | | |
| - | | |
| 720 | | |
| 0.01 | |
| Loss of inventory in fire | |
| - | | |
| - | | |
| - | | |
| - | | |
| 1,980 | | |
| 0.02 | |
| Other write-offs (recoveries) and provisions (release of provisions) | |
| 900 | | |
| 0.01 | | |
| 109 | | |
| - | | |
| 1,659 | | |
| 0.02 | |
| Total Charges and Credits impacting Adjusted EBITDA (1) | |
| 5,313 | | |
| 0.05 | | |
| 1,452 | | |
| 0.01 | | |
| 6,855 | | |
| 0.07 | |
| 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 | ) |
| Total Charges and Credits impacting Adjusted Net Income and Adjusted Diluted EPS (2) | |
| 5,313 | | |
| 0.05 | | |
| 1,452 | | |
| 0.01 | | |
| (2,303 | ) | |
| (0.02 | ) |
| Total Adjusted Net Income and Adjusted Diluted EPS | |
$ | 39,641 | | |
$ | 0.38 | | |
$ | 45,469 | | |
$ | 0.44 | | |
$ | 15,434 | | |
$ | 0.16 | |
| |
(1) |
In
the quarter ended September 30, 2026, Total Charges and Credits impacting Adjusted EBITDA included $0.02 million (as rounded) of
costs associated with the restatement of our 2018-2020 financial statements, including the SEC inquiry and remediation, $2.9 million
of impairment charges, $1.1 million of current expected credit loss (releases) provisions, $0.3 million of litigation (releases)
provisions, $0.1 million of restructuring projects, and $0.9 million of other write-offs (recoveries) and provisions (release of
provisions). In the quarter ended June 30, 2026, Total Charges and Credits impacting Adjusted EBITDA included $0.1 million (as rounded)
of costs associated with the restatement of our 2018-2020 financial statements, including the SEC inquiry and remediation, $1.0 million
of current expected credit loss (releases) provisions, $0.1 million of litigation (releases) provisions, $0.2 million of restructuring
projects, and $0.1 million of other write-offs (recoveries) and provisions (release of provisions). 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). |
| |
(2) |
Total
Charges and Credits impacting Adjusted Net Income and Adjusted Diluted EPS for the quarter ended September 30, 2026, is $5.3
million inclusive of Total Charges and Credits impacting Adjusted EBITDA of $5.3 million. Total Charges and Credits impacting Adjusted
Net Income and Adjusted Diluted EPS for the quarter ended June 30, 2026, is $1.5 million inclusive of Total Charges and Credits
impacting Adjusted EBITDA of $1.5 million. Total Charges and Credits impacting Adjusted Net Income and Adjusted Diluted EPS for the
quarter ended September 30, 2025, is $(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. |
Table
2 - Reconciliation of Net Income to Adjusted EBITDA
| | |
Quarter ended September 30, 2026 | | |
Quarter ended June 30, 2026 | | |
Quarter ended September 30, 2025 | |
| | |
| | |
| | |
| |
| Net Income | |
$ | 34,328 | | |
$ | 44,017 | | |
$ | 17,737 | |
| Add: | |
| | | |
| | | |
| | |
| Income Taxes | |
| 8,714 | | |
| 14,901 | | |
| (5,500 | |
| Interest Expense, net | |
| 6,706 | | |
| 7,038 | | |
| 8,128 | |
| Depreciation and Amortization | |
| 40,819 | | |
| 38,776 | | |
| 36,737 | |
| Total Charges and Credits impacting Adjusted EBITDA (3) | |
| 5,313 | | |
| 1,452 | | |
| 6,855 | |
| Total Adjusted EBITDA | |
$ | 95,880 | | |
$ | 106,184 | | |
$ | 63,957 | |
| |
(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 operating activities to Free cash flow
| | |
9 months ended | | |
3 months ended | | |
3 months ended | | |
3 months ended | |
| | |
September 30, 2026 | | |
September 30, 2026 | | |
June 30, 2026 | | |
March 31, 2026 | |
| | |
| | |
| | |
| | |
| |
| Net cash provided by operating activities | |
| 201,537 | | |
$ | (3,221 | ) | |
$ | 174,013 | | |
| 30,745 | |
| Less: | |
| | | |
| | | |
| | | |
| | |
| Capital expenditures | |
| (152,819 | ) | |
| (42,711 | ) | |
| (74,104 | ) | |
| (36,004 | ) |
| Free Cash Flow | |
| 48,718 | | |
$ | (45,932 | ) | |
$ | 99,909 | | |
| (5,259 | ) |
| | |
12 months ended | | |
3 months ended | | |
3 months ended | | |
3 months ended | | |
3 months ended | |
| | |
December
31, 2025 | | |
December 31, 2025 | | |
September 30, 2025 | | |
June 30, 2025 | | |
March 31, 2025 | |
| | |
| | |
| | |
| | |
| | |
| |
| Net cash provided by operating activities | |
$ | 264,242 | | |
$ | 138,590 | | |
| 6,681 | | |
| 98,486 | | |
| 20,485 | |
| Less: | |
| | | |
| | | |
| | | |
| | | |
| | |
| Capital expenditures | |
| (143,454 | ) | |
| (42,834 | ) | |
| (40,753 | ) | |
| (29,743 | ) | |
| (30,124 | ) |
| Free Cash Flow | |
$ | 120,788 | | |
$ | 95,756 | | |
$ | (34,072 | ) | |
$ | 68,743 | | |
$ | (9,639 | ) |
Table
4 - Reconciliation to Net Debt
| | |
As of September 30, 2026 | | |
As of December 31, 2025 | | |
As of September 30, 2025 | |
| | |
| | |
| | |
| |
| Current installments of long-term debt | |
$ | 64,500 | | |
$ | 64,500 | | |
$ | 64,500 | |
| Short-term borrowings | |
| 58,922 | | |
| 54,250 | | |
| 61,269 | |
| Long-term debt | |
| 143,871 | | |
| 191,378 | | |
| 207,180 | |
| Less: | |
| | | |
| | | |
| | |
| Cash and cash equivalents | |
| (106,843 | ) | |
| (124,797 | ) | |
| (69,683 | ) |
| Net Debt | |
$ | 160,450 | | |
$ | 185,331 | | |
$ | 263,266 | |
For
inquiries regarding NESR, please contact:
Blake
Gendron or Stefan Angeli
National
Energy Services Reunited Corp.
832-925-3777
investors@nesr.com
