“We have over $220 million in cash on the balance sheet, are highly liquid, debt-free, and capable of navigating an uncertain environment. This solid financial position also supports targeted organic investments, as well as continued capital returns to our shareholders through both dividends and opportunistic share buybacks. With the Spinnaker integration essentially complete, we are actively assessing additional acquisition opportunities to bolster selected service lines, increase our scale, and enhance our growth outlook,” concluded Palmer.
Selected Industry Data (Source: Baker Hughes, Inc., U.S. Energy Information Administration)
| | | | | | | | | | | | | | | | | | | | |
| | 4Q:23 | | 3Q:23 | | Change | | % Change | | 4Q:22 | | Change | | % Change | |
U.S. rig count (avg) | | | 622 | | | 649 | | | (27) | | (4.2) | % | | 776 | | | (154) | | (19.8) | % |
Oil price ($/barrel) | | $ | 78.52 | | $ | 82.17 | | $ | (3.65) | | (4.4) | % | $ | 82.67 | | $ | (4.15) | | (5.0) | % |
Natural gas ($/Mcf) | | $ | 2.74 | | $ | 2.59 | | $ | 0.15 | | 5.8 | % | $ | 5.55 | | $ | (2.81) | | (50.6) | % |
4Q:23 Consolidated Financial Results (Sequential Comparisons versus 3Q:23)
Revenues were $394.5 million, up 19%. Revenues increased primarily due to a significant rebound in pressure pumping activity compared to 3Q:23. However, growth was constrained by lower-than-expected activity during the December holiday season, which may have been influenced by declining oil prices throughout the quarter.
Cost of revenues, which excludes depreciation and amortization, was $279.4 million, up from $239.1 million. These costs increased as a function of revenue growth during the quarter.
Selling, general and administrative expenses were $38.1 million, down from $42.0 million. The decrease in expenses is due in part to a reduction in incentive compensation and other cost control measures.
Gain on disposition of assets was $1.6 million, reflecting asset sales through the Company’s normal course of operations.
Interest income totaled $2.6 million, reflecting higher cash balances.
Income tax provision was $12.3 million, or 23.4% of income before income taxes.
Net income and diluted EPS were $40.3 million and $0.19, respectively, up from $18.3 million and $0.08, respectively, in 3Q:23. Net income margin increased 470 basis points sequentially to 10.2%.
Adjusted EBITDA (adjusted earnings before interest, taxes, depreciation, and amortization) was $79.5 million, up from $51.9 million; adjusted EBITDA margin increased 440 basis points sequentially to 20.1%.
Non-GAAP adjustments: there were no adjustments to GAAP performance measures in 4Q:23, other than those necessary to calculate EBITDA. However, in the first and second quarters of 2023, the Company reported pension settlement charges totaling $18.3 million, or $0.07 of diluted EPS, which were excluded when calculating adjusted financial measures (see Appendices A, B and C).
