project capital spending in the range of $150 million to $200 million this year. Pursuing acquisitions to expand our business remains another key strategic priority, and we remain focused on targeting high cash flow, profitable operations with strong customer bases. Our debt-free balance sheet remains strong and liquid, with over $300 million in cash at year end to fund organic investments, potential acquisitions and capital returns to our investors,” concluded Palmer.
Selected Industry Data (Source: Baker Hughes, Inc., U.S. Energy Information Administration)
| | | | | | | | | | | | | | | | | | | | |
| | 4Q:24 | | 3Q:24 | | Change | | % Change | | 4Q:23 | | Change | | % Change | |
U.S. rig count (avg) | | | 586 | | | 586 | | | — | | — | % | | 622 | | | (36) | | (5.8) | % |
Oil price ($/barrel) | | $ | 70.59 | | $ | 76.57 | | $ | (5.98) | | (7.8) | % | $ | 78.52 | | $ | (7.93) | | (10.1) | % |
Natural gas ($/Mcf) | | $ | 2.43 | | $ | 2.10 | | $ | 0.33 | | 15.7 | % | $ | 2.74 | | $ | (0.31) | | (11.3) | % |
4Q:24 Consolidated Financial Results (Sequential Comparisons versus 3Q:24)
Revenues were $335.4 million, down 1%. Revenues for pressure pumping, the Company’s largest service line, increased 3%, while all other service lines combined decreased 3%. Within the Technical Services segment, pressure pumping revenues increased primarily due to higher asset utilization, while pricing remains highly competitive in the marketplace. Coiled tubing revenues also increased after a soft third quarter with growth across several large customers, including some new business gains. Service lines such as downhole tools (Technical Services segment) and rental tools (Support Services segment) were lower in the quarter due to seasonal slowdowns. New product launches in downhole tools continued to gain initial customer acceptance and are expected to contribute more meaningfully in 2025.
Cost of revenues, which excludes depreciation and amortization of $32.0 million, was $250.2 million, up from $247.5 million. These costs increased 1% during the quarter despite a modest revenue decline. The increase was primarily due to higher insurance costs. In addition, employee benefit costs increased but were offset by lower maintenance and repair (“M&R”) expenses. M&R decreased after a high third quarter as the Company performed maintenance activities during that lower utilization period.
Selling, general and administrative expenses were $41.2 million, up from $37.7 million; as a % of revenues, SG&A increased 110 basis points to 12.3% due primarily to the timing of incentive costs.
Interest income totaled $3.3 million, reflecting lower interest rates, partially offset by higher cash balances.
Income tax provision was $1.3 million, or 9.1% of income before income taxes, below the Company’s typical tax rate, primarily due to the implementation of certain tax planning strategies and interest received on tax refunds.
Net income and diluted EPS were $12.8 million and $0.06, respectively, down from $18.8 million and $0.09, respectively, in 3Q:24. Net income margin decreased 180 basis points sequentially to 3.8%.
Adjusted EBITDA was $46.1 million, down from $55.2 million, reflecting slightly lower revenues, associated negative operating leverage and fixed cost absorption, and the insurance costs referenced above. Adjusted EBITDA margin decreased 270 basis points sequentially to 13.7%.
Non-GAAP adjustments: there were no adjustments to GAAP performance measures in 4Q:24 other than those necessary to calculate EBITDA, Adjusted EBITDA and free cash flow (see Appendices A, B, C and D).
Balance Sheet, Cash Flow and Capital Allocation
