Increased revenue reported in 2Q by Nine Energy

Houston’s Nine Energy Service, Inc. reported second quarter 2019 revenues of $237.5 million, net income of $6.1 million and adjusted EBITDA of $38.0 million. Second quarter basic earnings per share was $0.21.

Heavily involved in STACK and SCOOP drilling activity in Oklahoma, the company’s second quarter 2019 adjusted net income was $8.8 million, or $0.30 adjusted basic earnings per share. The Company reported second quarter 2019 adjusted EBITDA of $38.0 million and a second quarter adjusted EBITDA margin of approximately 16%. During the second quarter of 2019, the Company generated ROIC of 7%. During the second quarter of 2019, the Company reported net cash provided by operating activities of $11.5 million compared to $5.9 million during the first quarter, an increase of approximately 95%.

The Company had provided original second quarter 2019 revenue guidance between $230.0 and $240.0 million and adjusted EBITDA guidance between $38.0 and $42.0 million, with actual results for both falling within Management’s original guidance range.

“The first quarter was in-line with what we anticipated, with both revenue and adjusted EBITDA falling within the range of Management’s original guidance,” said Ann Fox, President and Chief Executive Officer, Nine Energy Service. “Despite a challenging environment, we were able to increase cash flow from operations by approximately 95% and anticipate this trend continuing throughout the rest of the year. Since June 30, 2019, our cash balance has increased significantly to approximately $59.0 million as of August 9, 2019, and our revolving credit facility is undrawn.”

Fox stated that the company’s operations team is outpacing market activity.  Cementing increased revenue by nearly 7% quarter over quarter despite U.S. new wells drilled declining by 4% quarter over quarter.

“At Nine, we never forecasted a back-half recovery, which continues to be our view. With so much volatility in the market, in conjunction with operators unwavering commitment to staying within capital budgets, we do anticipate significant activity declines throughout the rest of the year, especially in the Northeast, which will adversely affect both our U.S. Wireline and Completion Tools divisions. Nonetheless, we remain extremely excited about our ability to generate strong cash flow in a volatile market and about the tools and technology we are developing.”

 

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