UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported):
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation) |
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(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
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(Zip Code) |
Registrant’s telephone number, including area code:
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2):
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On November 7, 2024, Innovex International, Inc. (the “Company”) issued a press release announcing its results for the quarter ended September 30, 2024. A copy of the press release is furnished as Exhibit 99.1 hereto and is incorporated herein by reference.
The information in this Item 2.02, including Exhibit 99.1, is being furnished and shall not be deemed "filed" for the purpose 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 information be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act.
Item 7.01 Regulation FD Disclosure.
On November 7, 2024, the Company posted the Q3 2024 Earnings Presentation (the “Presentation”) to the “Investors” section of its website at www.innovex-inc.com. A copy of the Presentation is furnished as Exhibit 99.2 hereto and is incorporated herein by reference.
The information in this Item 7.01, including Exhibit 99.2, is being furnished and shall not be deemed "filed" for the purpose of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.
The Company announces material information to the public through a variety of means, including filings with the Securities and Exchange Commission, press releases, public conference calls, and on the Company’s investor relations website (https://investors.innovex-inc.com) as means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. |
Description |
99.1 |
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99.2 |
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104 |
Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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INNOVEX INTERNATIONAL, INC. |
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By: |
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/s/ Kendal Reed |
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Kendal Reed |
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Chief Financial Officer |
Date: November 7, 2024
Exhibit 99.1
Innovex Announces Third-Quarter 2024 Results
HOUSTON, November 7, 2024 – Innovex International, Inc. (NYSE: INVX) (“Innovex,” “we” or the “Company”) today announced financial and operating results for the third quarter of 2024.
Third Quarter Highlights
Adam Anderson, Chief Executive Officer, commented, “I am excited to introduce Innovex International to the public equity markets. Our vision is to create a unique energy industrial platform focused on driving exceptional value and service to our customers, and exceptional absolute returns for our shareholders.Since inception, legacy Innovex has done just that: delivering a revenue per share CAGR of 22% and a return on capital employed (“ROCE”) of 17%. These results are well ahead of both our peers and the S&P 500, which is our ultimate benchmark. This outcome is the product of our vision and our culture. Our culture, which we call ‘No Barriers,’ drives customer focus and relentless innovation while maintaining flexibility through a capital light business model. We believe the combination with Dril-Quip unlocks transformational opportunities to grow our market share, expand our margins, delight our customers, and deliver value to our shareholders.
We are thrilled to merge Dril-Quip’s portfolio and capabilities into our existing platform of small-ticket, big-impact consumable products and technologies. The merger with Dril-Quip is our largest transaction to date, and the franchise is among the best in our portfolio. Since closing, I have spent a significant amount of time learning about our employees, technologies, customers and processes and couldn’t be more pleased about the capability of our people and our technologies. Dril-Quip has a well-deserved reputation for delivering the most reliable and high-performance products in their space. That said, it is increasingly clear, in my opinion, that the legacy Dril-Quip operating model was not delivering exceptional service to our customers and could not generate high margins and free cash conversion. We are immediately making the changes necessary to address both. The foremost issue we will resolve is our on-time delivery of products. This has been an impediment to profitability and customer satisfaction. We will also work to leverage the depth of our combined distribution footprint; we have already seen early success cross-selling products in U.S. Gulf of Mexico, Brazil and U.S. Land. I am pleased to report that we are ahead of schedule on our stated goal of $30 million in cost synergies and have
already realized 100% of our year-one synergy target of $15 million. Furthermore, we have increased conviction that there is significant potential above this figure, as well as an opportunity to grow the market share of the combined portfolios through improved delivery time, improved customer experience, and continued investment in innovation. While it is early days, and progress against this aspiration will take time, we are more confident than ever about the potential of the combined platform to generate margins and returns on par with our historic results.”
Kendal Reed, Chief Financial Officer, remarked, “We are pleased with our consistent margin performance despite a weak operating environment. Our contra-cyclical cash flow profile provided strong free cash flow in the quarter, which helped us reduce our debt and maintain a strong balance sheet, providing optionality should we find investment opportunities that meet our stringent standards of consistent margins, customer driven innovation, and high returns on our invested capital.”
Financial Summary
(in thousands)
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Three Months Ended |
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September 30, |
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June 30, |
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September 30, |
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Revenue |
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$ |
151,817 |
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$ |
130,302 |
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$ |
139,086 |
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Net Income |
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$ |
82,586 |
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$ |
9,534 |
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$ |
15,366 |
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Net Income Margin |
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54 |
% |
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7 |
% |
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11 |
% |
Adjusted EBITDA (1) |
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$ |
27,411 |
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$ |
29,516 |
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$ |
33,294 |
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Adjusted EBITDA Margin (1) |
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18 |
% |
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23 |
% |
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24 |
% |
Free Cash Flow (1) |
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$ |
20,051 |
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$ |
20,893 |
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$ |
26,432 |
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ROCE (1) |
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9 |
% |
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17 |
% |
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22 |
% |
Operational & Financial Results
Innovex’s North America Onshore (“NAM”) revenue increased 24% quarter over quarter while International & Offshore revenue grew 4% quarter over quarter, both primarily as a result of the Dril-Quip merger.
Kendal Reed, Chief Financial Officer, continued, “I was pleased with the resilience of our NAM revenue in spite of the ongoing pullback in US Land focused activity, and we are very excited about our opportunities in the International & Offshore space. The Dril-Quip merger enhances our growth opportunities in these markets, and, as Adam noted, we have already seen early successes.
Another bright spot in the third quarter was the strong free cash flow we generated despite significant acquisition costs. As a result of our capital light business model, we can convert a high proportion of our EBITDA to free cash flow. We are already deploying our plans to apply this business model to the legacy Dril-Quip businesses. Importantly, we can reinvest this free cash flow into both high-return organic and inorganic opportunities. In fact, we continue to monitor a robust pipeline of investment opportunities in businesses that fit within our existing portfolio and platform at a time when capital has largely fled the industry.”
Adam Anderson, Chief Executive Officer, concluded. “Our business is built on the foundation of our ‘No Barriers’ culture. We remove the barriers between ourselves and our customers that slow the pace of innovation. We empower our employees to be highly responsive to our customers’ needs and we prioritize direct and transparent interaction between our employees and the end users of our products. As a result, we have a consistent track record of creating value for both our customers and our shareholders. The achievement of our year-one targeted
synergies within just eight weeks is a testament to our focus on value creation for our stakeholders. We are pleased, but not satisfied, and will continue to look for ways to increase margins, market share, and customer satisfaction.”
Balance Sheet, Debt, Cash Flow and Other
Net cash provided by operating activities was $22 million and capital expenditures were $2 million (approximately 1.1% of revenue) for the third quarter of 2024.
Innovex generated free cash flow of $20 million during the third quarter of 2024 and ended the quarter with $100 million of cash and cash equivalents and $23 million of total debt (net of financing fees). Innovex’s total debt balance at the end of the quarter represented 0.2x trailing twelve month Adjusted EBITDA, with $91 million of availability on its revolving credit facility.
Innovex believes in maintaining conservative levels of leverage and ample liquidity to maximize strategic flexibility and allow the Company to capitalize on acquisition opportunities with strong quantitative and qualitative characteristics.
Return on Capital Employed (“ROCE”)
Innovex’s dedication to efficient capital allocation and prudent investment, combined with its capital light business model, enables the Company to generate strong returns on its invested capital. Loss from operations during the third quarter was $13 million. Return on Capital Employed (“ROCE”) during the third quarter of 2024 was 9% due to the increase in capital employed related to the Dril-Quip merger. We are focused on optimizing the post-merger business and balance sheet to enable us to meet our long-term returns targets.
Q4 2024 Guidance
Looking to the fourth quarter of 2024, Innovex expects to generate approximately $220 - $230 million in total revenue and Adjusted EBITDA of approximately $35 – 40 million, assuming a flat rig count environment.
Conference Call and Webcast Details
The Company will host a conference call to discuss the Company’s third quarter 2024 financial and operational results tomorrow, Friday, November 8, 2024, at 9:00 a.m. Central Time (10:00 a.m. Eastern Time). The presentation is open to all interested parties and may include forward-looking information. To access the call, please dial in approximately ten minutes before the start of the call.
Webcast: |
https://www.webcaster4.com/Webcast/Page/2968/51431 |
U.S. Toll-Free Dial-In: |
877-545-0523 |
International Dial-In: |
973-528-0016 |
Conference ID: |
946398 |
For those unable to participate in the live call, an audio replay will be available following the call through midnight Friday, November 22, 2024. To access the replay, please call 877-481-4010 or 919-882-2331 (International) and enter confirmation code 51431. A replay of the webcast will also be archived shortly after the call and can be accessed on the Company’s website.
About Innovex International, Inc.
Innovex International, Inc (NYSE: INVX) is a Houston-based company established in 2024 following the merger of Dril-Quip, Inc. and Innovex Downhole Solutions, Inc.
Our comprehensive portfolio extends throughout the lifecycle of the well, and innovative product integration ensures seamless transitions from one well phase to the next, driving efficiency, lowering cost, and reducing the rig site service footprint for the customer.
With locations throughout North America, Latin America, Europe, the Middle East and Asia, no matter where you need us, our team is readily available with technical expertise, conventional and innovative technologies, and ever-present customer service.
Forward-Looking Statements
Certain statements contained in this press release and oral statements made regarding the matters addressed in this release constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Innovex’s control, that could cause actual results to differ materially from the results discussed in the forward-looking statements.
Forward-looking statements can be identified by the use of forward-looking terminology, including “may,” “believe,” “expect,” “intend,” “anticipate,” “plan,” “should,” “estimate,” “continue,” “potential,” “will,” “hope” or other similar words and include the Company’s expectation of future performance contained herein. These statements discuss future expectations, contain projections of results of operations or of financial condition, or state other “forward-looking” information. You are cautioned not to place undue reliance on any forward-looking statements, which can be affected by assumptions used or by risks or uncertainties. The inclusion of forward-looking statements should not be regarded as a representation by Innovex that any of its plans will be achieved. When considering these forward-looking statements, you should keep in mind the risks related to the merger between Innovex Downhole Solutions, Inc. and Dril-Quip, Inc. (the “Merger”), including the ultimate outcome and results of integrating operations, the effects of the Merger (including the Company’s future financial condition, results of operations, strategy and plans), potential adverse reactions or changes to business relationships resulting from the announcement or completion of the Merger, expected benefits from the Merger and the ability of the
Company to realize those benefits, the significant costs required to integrate operations, whether Merger-related litigation will occur and, if so, the results of any litigation, settlements and investigations, and the risk factors and other factors noted in the Company’s Registration Statement on Form S-4 (File No. 333-279048), Annual Report on Form 10-K, any Quarterly Reports on Form 10-Q and the other documents that the Company files with the Securities and Exchange Commission. The risk factors and other factors noted therein could cause actual results to differ materially from those contained in any forward-looking statement. Innovex disclaims any duty to update and does not intend to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this press release, except as may be required by law.
Investor Relations Contact
Erin Fazio
investors@innovex-inc.com
(346) 398-0000
Innovex International, Inc. |
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Condensed Consolidated Statements of Operations and Comprehensive Income |
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(in thousands, except share and per share amounts) |
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(Unaudited) |
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Three Months Ended |
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September 30, |
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June 30, |
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September 30, |
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Revenues |
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$ |
151,817 |
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$ |
130,302 |
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$ |
139,086 |
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Cost of sales, exclusive of depreciation and amortization |
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99,138 |
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84,310 |
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89,187 |
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Selling, general and administrative expenses |
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37,984 |
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18,582 |
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19,226 |
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(Gain)/loss on sale of assets |
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(169 |
) |
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(194 |
) |
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(102 |
) |
Depreciation and amortization |
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7,786 |
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|
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6,589 |
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|
|
5,768 |
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Impairment of long-lived assets |
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- |
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3,522 |
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266 |
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Acquisition costs |
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20,296 |
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4,423 |
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|
760 |
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Income from operations |
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$ |
(13,218 |
) |
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$ |
13,070 |
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$ |
23,981 |
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Interest expense |
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729 |
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|
607 |
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1,516 |
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Other (income) expense, net |
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(269 |
) |
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(653 |
) |
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62 |
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Equity method earnings |
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1,018 |
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|
744 |
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|
|
844 |
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Gain on bargain purchase |
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92,659 |
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|
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- |
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- |
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Income before income taxes |
|
$ |
79,999 |
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$ |
13,860 |
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$ |
23,247 |
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Income tax expense |
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(2,587 |
) |
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4,326 |
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|
7,881 |
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Net income |
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$ |
82,586 |
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$ |
9,534 |
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$ |
15,366 |
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Foreign currency translation adjustment |
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2,457 |
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(1,789 |
) |
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(795 |
) |
Comprehensive income |
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$ |
85,043 |
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$ |
7,745 |
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$ |
14,571 |
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Earnings per common share |
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Basic |
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$ |
2.03 |
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$ |
0.31 |
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$ |
0.50 |
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Diluted |
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$ |
1.99 |
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$ |
0.30 |
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$ |
0.48 |
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Weighted average common shares outstanding |
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Basic |
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40,728,902 |
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30,978,880 |
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30,928,647 |
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Diluted |
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41,530,978 |
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32,316,502 |
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32,080,960 |
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Innovex International, Inc. |
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Condensed Consolidated Balance Sheets |
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(in thousands) |
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(Unaudited) |
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Three Months Ended |
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September 30, |
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June 30, |
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September 30, |
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Assets |
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Current assets |
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Cash and cash equivalents |
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$ |
99,895 |
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$ |
10,356 |
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$ |
8,307 |
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Trade receivable, net |
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225,067 |
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119,637 |
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128,085 |
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Inventories, net |
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297,519 |
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146,690 |
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140,155 |
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Other current assets |
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54,851 |
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18,299 |
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|
|
19,139 |
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Total current assets |
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677,332 |
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294,982 |
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295,686 |
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Noncurrent assets |
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Property and equipment, net |
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182,230 |
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51,808 |
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52,391 |
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Equity method investment |
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19,923 |
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19,615 |
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|
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19,449 |
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Goodwill and net intangibles |
|
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59,719 |
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61,726 |
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|
|
67,746 |
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Right of use leases - operating, net |
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47,352 |
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26,214 |
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|
|
32,110 |
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Deferred tax asset, net |
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|
138,523 |
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|
|
15,116 |
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|
17,115 |
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Other long-term assets |
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|
7,704 |
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|
2,168 |
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|
|
2,483 |
|
Total noncurrent assets |
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455,451 |
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176,647 |
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191,294 |
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|
|||
Total assets |
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$ |
1,132,783 |
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$ |
471,629 |
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$ |
486,980 |
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|
|||
Liabilities and stockholders’ equity |
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|
|||
Current liabilities |
|
|
|
|
|
|
|
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|
|||
Accounts payable |
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$ |
83,613 |
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|
$ |
36,708 |
|
|
$ |
39,718 |
|
Accrued expenses |
|
|
55,884 |
|
|
|
25,486 |
|
|
|
28,734 |
|
Operating lease liabilities |
|
|
9,093 |
|
|
|
6,942 |
|
|
|
7,058 |
|
Other current liabilities |
|
|
15,520 |
|
|
|
1,261 |
|
|
|
6,634 |
|
Current portion of long-term debt and finance lease obligations |
|
|
10,695 |
|
|
|
10,301 |
|
|
|
20,999 |
|
Total current liabilities |
|
|
174,805 |
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|
|
80,698 |
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|
|
103,143 |
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|
|
|
|
|
|
|
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|
|||
Noncurrent liabilities |
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|
|
|
|
|
|
|
|
|||
Long-term debt and finance lease obligations |
|
|
12,351 |
|
|
|
14,451 |
|
|
|
48,998 |
|
Operating lease liabilities |
|
|
39,314 |
|
|
|
23,954 |
|
|
|
26,867 |
|
Other long-term liabilities |
|
|
1,962 |
|
|
|
28 |
|
|
|
26 |
|
Total noncurrent liabilities |
|
|
53,627 |
|
|
|
38,433 |
|
|
|
75,891 |
|
Total Liabilities |
|
$ |
228,432 |
|
|
$ |
119,131 |
|
|
$ |
179,034 |
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|
|
|
|
|
|
|
|
|
|
|||
Total stockholders’ equity |
|
$ |
904,351 |
|
|
$ |
352,498 |
|
|
$ |
307,946 |
|
|
|
|
|
|
|
|
|
|
|
|||
Total liabilities and stockholders’ equity |
|
$ |
1,132,783 |
|
|
$ |
471,629 |
|
|
$ |
486,980 |
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|
|
|
|
|
|
|
|
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|
|||
Innovex International, Inc. |
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Condensed Consolidated Statement of Cash Flows |
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(in thousands, except share and per share amounts) |
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(Unaudited) |
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|||||||||||
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|
|
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|
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|
|||
|
|
Three Months Ended |
|
|||||||||
|
|
September 30, |
|
|
June 30, |
|
|
September 30, |
|
|||
Cash flows from operating activities |
|
|
|
|
|
|
|
|
|
|||
Net Income |
|
$ |
82,586 |
|
|
$ |
9,534 |
|
|
$ |
15,366 |
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities |
|
|
(71,311 |
) |
|
|
11,777 |
|
|
|
(3,432 |
) |
Changes in operating assets and liabilities, net of amounts related to acquisitions |
|
|
10,447 |
|
|
|
1,456 |
|
|
|
20,020 |
|
Net cash provided by (used in) operating activities |
|
$ |
21,722 |
|
|
$ |
22,767 |
|
|
$ |
31,954 |
|
|
|
|
|
|
|
|
|
|
|
|||
Cash flows used in investing activities |
|
|
|
|
|
|
|
|
|
|||
Capital expenditures |
|
$ |
(1,671 |
) |
|
$ |
(1,874 |
) |
|
$ |
(5,522 |
) |
Proceeds from sale of property and equipment |
|
|
1,074 |
|
|
|
785 |
|
|
|
167 |
|
Equity method investment |
|
|
- |
|
|
|
- |
|
|
|
- |
|
Cash acquired in stock based business combination |
|
|
154,312 |
|
|
|
- |
|
|
|
- |
|
Net cash provided by (used in) investing activities |
|
$ |
153,715 |
|
|
$ |
(1,089 |
) |
|
$ |
(5,355 |
) |
|
|
|
|
|
|
|
|
|
|
|||
Cash flows provided by financing activities |
|
|
|
|
|
|
|
|
|
|||
Net Borrowings on line of credit |
|
$ |
- |
|
|
$ |
(16,000 |
) |
|
$ |
(23,250 |
) |
Net Borrowings on term loan |
|
|
(2,533 |
) |
|
|
(1,250 |
) |
|
|
(1,250 |
) |
Payments on Finance Leases |
|
|
(1,386 |
) |
|
|
(1,415 |
) |
|
|
(977 |
) |
Dividend payment |
|
|
(74,983 |
) |
|
|
- |
|
|
|
- |
|
Other Financing |
|
|
(6,388 |
) |
|
|
- |
|
|
|
(31 |
) |
Net cash provided by (used in) financing activities |
|
$ |
(85,290 |
) |
|
$ |
(18,665 |
) |
|
$ |
(25,508 |
) |
|
|
|
|
|
|
|
|
|
|
|||
Effect of exchange rate changes on cash and cash equivalents |
|
|
(608 |
) |
|
|
(292 |
) |
|
|
(103 |
) |
|
|
|
|
|
|
|
|
|
|
|||
Net change in cash and cash equivalents |
|
$ |
89,539 |
|
|
$ |
2,721 |
|
|
$ |
988 |
|
Non-GAAP Measures
Adjusted EBITDA and Adjusted EBITDA Margin
We define Adjusted EBITDA (a non-GAAP measure) as net income before interest expense, income tax expense, depreciation and amortization, (gain)/loss on sale of assets and other expense, net, further adjusted to exclude certain items which we believe are not reflective of our ongoing performance or which are non-cash in nature. Management uses Adjusted EBITDA to assess the profitability of our business operations and to compare our operating performance to our competitors without regard to the impact of financing methods and capital structure and excluding costs that management believes do not reflect our ongoing operating performance. We track Adjusted EBITDA on an absolute dollar basis and as a percentage of revenue, which we refer to as Adjusted EBITDA Margin.
Free Cash Flow
We also utilize Free Cash Flow (a non-GAAP measure) to evaluate the cash generated by our operations and results of operations. We define Free Cash Flow as net cash provided by operating activities less capital expenditures, as presented in our condensed consolidated statements of cash flows. Management believes Free Cash Flow is useful because it demonstrates the cash that was available in the period that was in excess of our needs to fund our capital expenditures. We track Free Cash Flow both on an absolute dollar basis and as a percentage of revenue. Free Cash Flow does not represent our residual cash flow available for discretionary expenditures, as we have non-discretionary expenditures, including, but not limited to, principal payments required under the terms of our Credit Facility, which are not deducted in calculating Free Cash Flow.
Return on Capital Employed (ROCE)
We utilize Return on Capital Employed ("ROCE") (a non-GAAP measure) to assess the effectiveness of our capital allocation over time and to compare our capital efficiency to our competitors. We define ROCE as Income from Operations, before acquisition costs and after tax (resulting in Adjusted Income from Operations, after tax) divided by average capital employed. Capital employed is defined as the combined values of debt and stockholders’ equity.
Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow and ROCE do not represent and should not be considered alternatives to, or more meaningful than, net income and net cash provided by operating activities, or any other measure of financial performance presented in accordance with GAAP as measures of our financial performance. Our computation of Adjusted EBITDA, Free Cash Flow and ROCE may differ from computations of similarly titled measures of other companies. For a reconciliation of these non-GAAP measures to the most directly comparable GAAP measure, see tables below.
Management has provided outlook regarding Adjusted EBITDA, which is a non-GAAP financial measure and excludes certain charges. A reconciliation of this non-GAAP financial measure to the corresponding GAAP financial measure has not been provided because guidance for the various reconciling items is not provided. The Company is unable to provide guidance for these reconciling items because they cannot determine their probable significance, as certain items are outside of the Company's control and cannot be reasonably predicted since these items could vary significantly from period to period. Accordingly, reconciliations to the corresponding GAAP financial measures are not available without unreasonable effort.
Innovex International, Inc. |
|
|||||||||||
Reconciliation of Net Income to Adjusted EBITDA |
|
|||||||||||
(in thousands) |
|
|||||||||||
(Unaudited) |
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|||
|
|
Three Months Ended |
|
|||||||||
|
|
September 30, |
|
|
June 30, |
|
|
September 30, |
|
|||
Revenue |
|
$ |
151,817 |
|
|
$ |
130,302 |
|
|
$ |
139,086 |
|
|
|
|
|
|
|
|
|
|
|
|||
Net Income |
|
$ |
82,586 |
|
|
$ |
9,534 |
|
|
$ |
15,366 |
|
Interest expense |
|
|
729 |
|
|
|
607 |
|
|
|
1,516 |
|
Income tax expense |
|
|
(2,587 |
) |
|
|
4,326 |
|
|
|
7,881 |
|
Depreciation and amortization |
|
|
7,786 |
|
|
|
6,589 |
|
|
|
5,768 |
|
EBITDA |
|
$ |
88,514 |
|
|
$ |
21,056 |
|
|
$ |
30,531 |
|
|
|
|
|
|
|
|
|
|
|
|||
Other non-operating (income) expense, net (1) |
|
|
(269 |
) |
|
|
(653 |
) |
|
|
62 |
|
(Gain)/Loss on sale of assets |
|
|
(169 |
) |
|
|
(194 |
) |
|
|
(102 |
) |
Impairment of long-lived assets |
|
|
- |
|
|
|
3,522 |
|
|
|
266 |
|
Acquisition Costs (2) |
|
|
20,296 |
|
|
|
4,423 |
|
|
|
760 |
|
Equity Method Adjustment (3) |
|
|
790 |
|
|
|
914 |
|
|
|
939 |
|
Gain on Bargain Purchase |
|
|
(92,659 |
) |
|
|
- |
|
|
|
- |
|
Stock based compensation |
|
|
10,908 |
|
|
|
448 |
|
|
|
460 |
|
IPO Preparation Expenses (4) |
|
|
- |
|
|
|
- |
|
|
|
378 |
|
Adjusted EBITDA |
|
$ |
27,411 |
|
|
$ |
29,516 |
|
|
$ |
33,294 |
|
|
|
|
|
|
|
|
|
|
|
|||
Net Income (Loss) % Revenue |
|
|
54 |
% |
|
|
7 |
% |
|
|
11 |
% |
Adjusted EBITDA Margin |
|
|
18 |
% |
|
|
23 |
% |
|
|
24 |
% |
Innovex International, Inc. |
|
|||||||||||
Reconciliation of Income from Operations to ROCE |
|
|||||||||||
(in thousands) |
|
|||||||||||
(Unaudited) |
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|||
|
|
Twelve Months Ended |
|
|||||||||
|
|
September 30, |
|
|
June 30, |
|
|
September 30, |
|
|||
Income from operations |
|
$ |
45,465 |
|
|
$ |
82,664 |
|
|
$ |
93,192 |
|
Plus: Acquisition Costs |
|
|
25,834 |
|
|
|
6,298 |
|
|
|
2,350 |
|
Less: Income tax expense |
|
|
(11,901 |
) |
|
|
(22,369 |
) |
|
|
(18,946 |
) |
Adjusted income from operations, after tax |
|
$ |
59,398 |
|
|
$ |
66,593 |
|
|
$ |
76,596 |
|
|
|
|
|
|
|
|
|
|
|
|||
Beginning debt |
|
$ |
69,997 |
|
|
$ |
93,042 |
|
|
$ |
88,493 |
|
Beginning equity |
|
|
307,946 |
|
|
|
292,915 |
|
|
|
232,950 |
|
Ending debt |
|
|
23,046 |
|
|
|
24,752 |
|
|
|
69,997 |
|
Ending equity |
|
|
904,351 |
|
|
|
352,498 |
|
|
|
307,946 |
|
Average capital employed |
|
$ |
652,670 |
|
|
$ |
381,604 |
|
|
$ |
349,693 |
|
|
|
|
|
|
|
|
|
|
|
|||
ROCE |
|
|
9 |
% |
|
|
17 |
% |
|
|
22 |
% |
Innovex International, Inc. |
|
|||||||||||
Reconciliation of Net Cash from Operations to Free Cash Flow |
|
|||||||||||
(in thousands) |
|
|||||||||||
(Unaudited) |
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|||
|
|
Three Months Ended |
|
|||||||||
|
|
September 30, |
|
|
June 30, |
|
|
September 30, |
|
|||
Net cash provided by (used in) operating activities |
|
$ |
21,722 |
|
|
$ |
22,767 |
|
|
$ |
31,954 |
|
Capital expenditures |
|
|
(1,671 |
) |
|
|
(1,874 |
) |
|
|
(5,522 |
) |
Free Cash Flow |
|
$ |
20,051 |
|
|
$ |
20,893 |
|
|
$ |
26,432 |
|
Innovex International, Inc. |
|
|||||||||||
Geographic Revenue Details |
|
|||||||||||
(in thousands) |
|
|||||||||||
(Unaudited) |
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|||
|
|
Three Months Ended |
|
|||||||||
|
|
September 30, |
|
|
June 30, |
|
|
September 30, |
|
|||
North America Onshore ("NAM") |
|
|
|
|
|
|
|
|
|
|||
Product revenues |
|
$ |
79,668 |
|
|
$ |
65,073 |
|
|
$ |
76,050 |
|
Rental revenues |
|
|
5,228 |
|
|
|
1,848 |
|
|
|
2,389 |
|
Service revenues |
|
|
13,411 |
|
|
|
12,161 |
|
|
|
13,891 |
|
Revenue - North America Onshore |
|
$ |
98,307 |
|
|
$ |
79,082 |
|
|
$ |
92,330 |
|
|
|
|
|
|
|
|
|
|
|
|||
International & Offshore |
|
|
|
|
|
|
|
|
|
|||
Product revenues |
|
$ |
46,975 |
|
|
$ |
44,655 |
|
|
$ |
39,751 |
|
Rental revenues |
|
|
4,172 |
|
|
|
4,796 |
|
|
|
5,896 |
|
Service revenues |
|
|
2,363 |
|
|
|
1,769 |
|
|
|
1,109 |
|
Revenue - International & Offshore |
|
$ |
53,510 |
|
|
$ |
51,220 |
|
|
$ |
46,756 |
|
|
|
|
|
|
|
|
|
|
|
|||
Total Revenue |
|
$ |
151,817 |
|
|
$ |
130,302 |
|
|
$ |
139,086 |
|
Exhibit 99.2