Selected Industry Data (Source: Baker Hughes, Inc., U.S. Energy Information Administration)
| | | | | | | | | | | | | | | | | | | | |
| | 2Q:24 | | 1Q:24 | | Change | | % Change | | 2Q:23 | | Change | | % Change | |
U.S. rig count (avg) | | | 603 | | | 623 | | | (20) | | (3.2) | % | | 719 | | | (116) | | (16.1) | % |
Oil price ($/barrel) | | $ | 81.78 | | $ | 77.46 | | $ | 4.32 | | 5.6 | % | $ | 73.54 | | $ | 8.24 | | 11.2 | % |
Natural gas ($/Mcf) | | $ | 2.07 | | $ | 2.15 | | $ | (0.08) | | (3.7) | % | $ | 2.16 | | $ | (0.09) | | (4.2) | % |
2Q:24 Consolidated Financial Results (Sequential Comparisons versus 1Q:24)
Revenues were $364.2 million, down 4%. Revenues for pressure pumping, the Company’s largest service line, declined 17%, while all other service lines combined increased 8%. 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. The service lines with the largest increases were downhole tools and coiled tubing, which both benefited from innovative new products and services.
Cost of revenues, which excludes depreciation and amortization of $29.5 million, was $262.3 million, down from $276.6 million. These costs decreased during the quarter, with the largest decreases coming from lower costs of fuel and materials and supplies.
Selling, general and administrative expenses were $37.4 million, down from $40.1 million. The decrease in expenses is related primarily to employment costs due to reduced headcount and lower incentive compensation accruals.
Interest income totaled $3.3 million, reflecting a slightly higher average cash balance and higher investment yields.
Income tax provision was $7.0 million, or 17.8% of income before income taxes, down from 23.4% in 1Q:24. The decrease was primarily due to favorable adjustments, including additional interest on a tax refund received and release of tax reserves due to expiration of statute limitations.
Net income and diluted EPS were $32.4 million and $0.15, respectively, up from $27.5 million and $0.13, respectively, in 1Q:24. Net income margin increased 160 basis points sequentially to 8.9%.
Adjusted EBITDA was $68.5 million, up from $63.1 million, reflecting effective cost controls and other efficiencies despite the modest revenue decline; adjusted EBITDA margin increased 210 basis points sequentially to 18.8%.
Non-GAAP adjustments: there were no adjustments to GAAP performance measures in 2Q: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 $261.5 million at the end of 2Q:24, with no outstanding borrowings under the Company’s $100 million revolving credit facility. During the quarter, the Company received an IRS tax refund of $52.8 million related to prior years.
Net cash provided by operating activities and free cash flow were $184.5 million and $56.7 million, respectively, year-to-date through 2Q:24.