The following is a summary of the Drilling Tools International Corporation (DTI) Q3 2024 Earnings Call Transcript:

Financial Performance:

• DTI reported Q3 2024 revenue of $40.1 million, with tool rental revenue at $28.1 million and product sales revenue at $12 million.

• Adjusted EBITDA was reported at $11.1 million for Q3.

• Adjusted free cash flow for Q3 was $7.8 million, surpassing the total for all of 2023.

• Operating expenses were $35.8 million with income from operations at $4.3 million.

• Adjusted net income was $4.6 million, resulting in an adjusted diluted EPS of $0.14.

• For FY 2024, revenue is expected to be between $145 million to $155 million with an adjusted EBITDA forecast of $38 million to $43 million.

Business Progress:

• DTI has been active in mergers and acquisitions, having acquired three companies in 2024 and announced a fourth set to close in Q1 2025.

• The acquisition of European Drilling Projects enhances DTI's technology portfolio with cutting-edge drilling tools.

• The forthcoming acquisition of Titan Tool Services will expand DTI's geographic footprint in the North Sea, Europe, and Africa.

• DTI's integration process of acquired companies into a unified 'One DTI' strategy involves adopting best practices and common systems to optimize operations.

• The company has implemented new segment reporting, dividing operations into Eastern and Western Hemispheres to align with growth objectives.

Opportunities:

• DTI aims to capitalize on international expansion through acquisitions and enhance its market presence in the Eastern Hemisphere where the revenue mix is projected to grow from 1% in 2023 to over 10% by the end of 2024.

• DTI also targets increasing demand in the global energy sector, especially with new LNG capacity and rising electricity demands.

Risks:

• The company faces challenges with market softness and the rig count variability, which impacts near-term synergy realization and financial projections.

• Ongoing macroeconomic conditions and budget constraints from customers may pose further challenges.

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