The following is a summary of the Drilling Tools International Corporation (DTI) Q2 2024 Earnings Call Transcript:

Financial Performance:

• DTI generated total consolidated revenue of $37.5 million in Q2 2024.

• Operating income stood at $2.2 million, with adjusted net income at $3 million or $0.10 per share.

• Adjusted EBITDA was $9 million, while adjusted free cash flow improved by $3.2 million compared to the previous year, with guidance maintained at $20 million to $25 million for 2024 despite market softness.

• After implementing cost reduction measures, the company anticipates annualized savings of $2.4 million.

Business Progress:

• DTI completed the acquisition of SDP and highlighted significant integration and growth opportunities, especially in the Middle East.

• The company has focused on expanding product and service offerings, further synergizing operations post-acquisition, and capitalizing on a fully operational PDC bit and Drill-N-Ream repair facility in Dubai, UAE.

Opportunities:

• DTI anticipates enhanced growth driven by major acquisitions like SDP, aiming at expanding into international markets and increasing service capabilities in the Middle East.

• The acquisition is also expected to generate significant cost savings and additional revenue streams, lowering total costs and improving margins.

Risks:

• Market softness affects North America's operational environment leading to a decline in rig activity, which impacts demand for DTI's activities. Cost pressures and a slow market recovery pose potential financial risks.

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