Selected Industry Data (Source: Baker Hughes, Inc., U.S. Energy Information Administration)
| | | | | | | | | | | | | | | | | | | | |
| | 3Q:24 | | 2Q:24 | | Change | | % Change | | 3Q:23 | | Change | | % Change | |
U.S. rig count (avg) | | | 586 | | | 603 | | | (17) | | (2.8) | % | | 649 | | | (63) | | (9.7) | % |
Oil price ($/barrel) | | $ | 76.57 | | $ | 81.78 | | $ | (5.21) | | (6.4) | % | $ | 82.17 | | $ | (5.60) | | (6.8) | % |
Natural gas ($/Mcf) | | $ | 2.10 | | $ | 2.07 | | $ | 0.03 | | 1.4 | % | $ | 2.59 | | $ | (0.49) | | (18.9) | % |
3Q:24 Consolidated Financial Results (Sequential Comparisons versus 2Q:24)
Revenues were $337.7 million, down 7%. Revenues for pressure pumping, the Company’s largest service line, declined 12%, while all other service lines combined decreased 4%. Pressure pumping revenues decreased primarily due to lower asset utilization in a highly competitive marketplace, with softness in the Company’s spot and semi-dedicated customer base. We experienced lower overall activity as well as the negative impact of customer consolidation and associated acquisition of certain customers. Coiled tubing revenues also decreased as specialized plug and abandonment work from the second quarter did not repeat in the third quarter; however, the Company does expect revenues for this unique service to be a meaningful opportunity in 2025. Service lines such as cementing, downhole tools and rental tools were flat-to-slightly lower in the quarter.
Cost of revenues, which excludes depreciation and amortization of $31.8 million, was $247.5 million, down from $262.3 million. These costs decreased during the quarter generally in line with revenues, with the largest decreases coming from lower employment costs as a result of headcount reductions, as well as maintenance and repairs, and materials and supplies.
Selling, general and administrative expenses were $37.7 million, up slightly from $37.4 million.
Interest income totaled $3.5 million, reflecting a higher average cash balance.
Income tax provision was $4.7 million, or 19.9% of income before income taxes.
Net income and diluted EPS were $18.8 million and $0.09, respectively, down from $32.4 million and $0.15, respectively, in 2Q:24. Net income margin decreased 330 basis points sequentially to 5.6%.
Adjusted EBITDA was $55.2 million, down from $68.5 million, reflecting lower revenues, particularly in pressure pumping, and the associated negative operating leverage and fixed cost absorption; Adjusted EBITDA margin decreased 240 basis points sequentially to 16.4%.
Non-GAAP adjustments: there were no adjustments to GAAP performance measures in 3Q:24 other than those necessary to calculate EBITDA and Adjusted EBITDA (see Appendices A, B and C).
Balance Sheet, Cash Flow and Capital Allocation
Cash and cash equivalents were $276.9 million at the end of 3Q:24, with no outstanding borrowings under the Company’s $100 million revolving credit facility, with $16.5 million subject to outstanding letters of credit.
Net cash provided by operating activities and free cash flow were $255.2 million and $75.8 million, respectively, year-to-date through 3Q:24.
Payment of dividends totaled $25.8 million year-to-date through 3Q:24. The Board of Directors declared a regular quarterly cash dividend of $0.04 per share, payable on December 10, 2024, to common stockholders of record at the close of business on November 11, 2024.
Share repurchases totaled $9.9 million year-to-date through 3Q:24.
