Drilling Tools International Corporation (DTIC) reported its financial results for the third quarter and nine months ended September 30, 2024, highlighting a mixed performance amid strategic acquisitions and market challenges. The company generated total revenue of $40.1 million for the third quarter, an increase from $38.1 million in the same period of 2023. However, for the nine months ended September 30, 2024, total revenue decreased to $114.6 million from $116.8 million year-over-year.
Net income for the third quarter was $867,000, significantly lower than $4.3 million reported in the same quarter of 2023. For the nine-month period, net income fell to $4.4 million from $10.9 million in the prior year. The decline in profitability was attributed to increased costs associated with recent acquisitions, including the merger with Superior Drilling Products, Inc. and the acquisition of Casing Technologies Group Limited, which added operational expenses and integration costs.
The company’s tool rental revenue for the third quarter decreased by 4% to $28.1 million, while product sales surged by 36% to $12.0 million, driven by the contributions from the newly acquired businesses. For the nine months, tool rental revenue decreased by 5% to $86.4 million, reflecting reduced market activity, particularly in the DTR division.
Total costs and expenses for the third quarter rose to $35.8 million from $31.0 million in the prior year, with selling, general, and administrative expenses increasing by 20% to $19.9 million, primarily due to higher personnel-related costs and expenses related to the transition to a public company. Interest expense surged to $1.0 million, a 1322% increase compared to the previous year, largely due to new debt incurred from the term loan and credit facility.
As of September 30, 2024, DTIC reported total assets of $218.8 million, up from $132.5 million at the end of 2023, driven by the acquisitions. Cash and cash equivalents increased to $12.0 million from $6.0 million at the end of 2023. The company’s total liabilities also rose significantly to $95.7 million from $43.8 million, reflecting the financial impact of the acquisitions.
Looking ahead, DTIC is focused on integrating its recent acquisitions and managing rising operational costs due to inflation. The company has also announced plans for further expansion, including the acquisition of European Drilling Projects B.V. and Titan Tools Services Ltd., which are expected to enhance its technological capabilities and market presence.
About Drilling Tools International Corp
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