Revenue Performance - For the full year 2024, Drilling Tools International Corp. generated total consolidated revenue of $154.4 million, with tool rental revenue of approximately $117.9 million and product sales revenue totaling $36.5 million, representing a 1.6% increase in total revenue compared to 2023[3]. - In Q4 2024, total consolidated revenue was $39.8 million, with tool rental revenue of approximately $31.5 million and product sales revenue of $8.3 million, showing a 13.5% increase in total revenue compared to Q4 2023[4]. - The company expects consolidated revenue for 2025 to be between $163 million and $183 million, with adjusted EBITDA projected between $40 million and $50 million, reflecting anticipated growth in international revenue[6]. - Estimated revenue for the twelve months ending December 31, 2025, is projected to be between $163,000,000 and $183,000,000[38]. Profitability and Income - The company reported a net income of $3.0 million for 2024, down from $14.7 million in 2023, resulting in diluted EPS of $0.09 compared to $0.59 in the previous year[3]. - DTI's comprehensive income for 2024 was $1.4 million, significantly lower than the $14.6 million reported in 2023, reflecting the impact of foreign currency translation adjustments[13]. - Net income for 2024 was $3,014 million, a decrease of 79.6% compared to $14,748 million in 2023[19]. - For the three months ended December 31, 2024, net loss was $1,345,000 compared to a net income of $3,823,000 in the same period of 2023[30]. - Adjusted Net Income for the three months ended December 31, 2024, was $600,000, a decrease of 84.4% from $3,840,000 in 2023[36]. - Adjusted Basic earnings per share for the year ended December 31, 2024, was $0.32, down from $0.88 in 2023[36]. Operational Performance - Adjusted EBITDA for 2024 was $40.1 million, with an adjusted free cash flow of $17.2 million, indicating a strong operational performance despite market challenges[3]. - Adjusted EBITDA is utilized to evaluate operating performance, excluding non-recurring items and reflecting ongoing business performance[22]. - Adjusted EBITDA for the year ended December 31, 2024, was $40,101,000, down 21.5% from $51,042,000 in 2023[30]. - Adjusted Free Cash Flow for the year ended December 31, 2024, increased to $17,209,000 from $7,292,000 in 2023, representing a 135.5% increase[33]. - The adjusted EBITDA margin for 2025 is expected to be between 25% and 27%, demonstrating a focus on maintaining profitability amid revenue growth[6]. Assets and Liabilities - Total assets increased to $222,431 million in 2024 from $132,498 million in 2023, representing a 67.8% growth[17]. - Total liabilities rose to $102,472 million in 2024, up from $43,808 million in 2023, marking an increase of 133.5%[17]. - As of December 31, 2024, DTI had approximately $6.2 million in cash and cash equivalents and net debt of $47.6 million, indicating a manageable debt level relative to its cash position[3]. - Cash flows from operating activities decreased to $6,058 million in 2024 from $23,334 million in 2023, a decline of 74.0%[19]. - Total shareholders' equity increased to $119,959 million in 2024 from $88,690 million in 2023, reflecting a growth of 35.3%[17]. Strategic Initiatives - DTI's CEO highlighted the success of their acquisition strategy, which included companies like Superior Drilling Products and Deep Casing Tools, positioning the company for future growth despite a flat market forecast[5]. - The company is actively pursuing additional acquisition targets to enhance scale, talent, and technology, aiming for geographic expansion and increased market presence[5]. - The acquisition of a business resulted in a cash outflow of $47,258 million in 2024, indicating a strategic expansion effort[19]. Capital Expenditures and Expenses - Gross capital expenditures for the twelve months ending December 31, 2025, are estimated to be between $(23,000,000) and $(29,000,000)[39]. - Transaction expenses for the year ended December 31, 2024, were $7,036,000, an increase from $5,979,000 in 2023[30]. - The company incurred cash paid for interest of $2,673 million in 2024, compared to $1,174 million in 2023, an increase of 127.6%[19]. - Proceeds from the revolving line of credit amounted to $38,618 million in 2024, compared to $73,050 million in 2023, indicating a decrease of 47.2%[19].

Core Insights - Drilling Tools International Corp. (DTI) anticipates continued growth in consolidated revenue, adjusted EBITDA, and adjusted free cash flow for 2025, with significant international revenue growth projected [1][4][31]. Financial Performance - For the year 2024, DTI reported total consolidated revenue of $154.4 million, with tool rental revenue at approximately $117.9 million and product sales revenue totaling $36.5 million [2][11]. - Total operating expenses for 2024 were $141.0 million, resulting in an income from operations of $13.4 million. The net income for the year was $3.0 million, with an adjusted net income of $10.1 million [2][12]. - The diluted earnings per share (EPS) for 2024 were $0.09, while the adjusted diluted EPS was $0.31 [2][12]. Quarterly Performance - In the fourth quarter of 2024, DTI generated total consolidated revenue of $39.8 million, with tool rental revenue of approximately $31.5 million and product sales revenue of $8.3 million [3][13]. - The total operating expenses for the fourth quarter were $38.0 million, leading to an income from operations of $1.8 million. The net loss for the quarter was ($1.3) million, with an adjusted net income of $0.6 million [3][13]. Future Outlook - DTI's CEO expressed confidence in the company's acquisition growth strategy and its ability to navigate a challenging demand environment, expecting to build upon 2024 results and significantly grow international revenue in 2025 [4][31]. - The company projects full-year 2025 revenue between $163 million and $183 million, with adjusted EBITDA expected to range from $40 million to $50 million [5][31]. Cash Flow and Debt - DTI reported adjusted free cash flow of $17.2 million for 2024, with cash and cash equivalents of approximately $6.2 million and net debt of $47.6 million as of December 31, 2024 [2][12][15]. - The company plans to continue analyzing additional acquisition targets to enhance scale and geographic expansion, which is expected to strengthen demand for its products and services [4][31].

Core Insights - Drilling Tools International Corp. (DTI) is actively participating in three investor conferences in March 2025, showcasing its commitment to engaging with investors and stakeholders [1][2][3][4]. Conference Participation - DTI will attend the 5th Annual Thrive Energy Conference on March 5-6, 2025, in Houston, where CEO Wayne Prejean will participate in a panel discussion [2]. - The company will also be present at the 37th Annual Roth Conference from March 16-18, 2025, in Dana Point, California, with one-on-one meetings hosted by Prejean and VP Jameson Parker [3]. - Additionally, DTI will take part in the Piper Sandler 25th Annual Energy Conference from March 17-19, 2025, in Las Vegas, featuring meetings led by CFO David Johnson and VP Christian Middleton [4]. Company Overview - DTI is a leading oilfield services company based in Houston, Texas, specializing in the manufacturing and rental of downhole drilling tools for horizontal and directional drilling [6]. - The company has a significant operational footprint with 16 service and support centers in North America and 11 international centers across the EMEA and APAC regions [6].

Core Insights - The article compares Drilling Tools International Corp. (DTI) and Archrock Inc. (AROC) to determine which stock is more attractive to value investors [1] Valuation Metrics - DTI has a forward P/E ratio of 7.19, while AROC has a forward P/E of 19.22 [5] - DTI's PEG ratio is 0.80, indicating better value relative to its expected earnings growth compared to AROC's PEG ratio of 1.60 [5] - DTI's P/B ratio is 0.85, significantly lower than AROC's P/B of 3.45, suggesting DTI is undervalued relative to its book value [6] Investment Grades - Both DTI and AROC have a Zacks Rank of 2 (Buy), indicating positive earnings estimate revisions [3] - DTI has earned a Value grade of A, while AROC has a Value grade of C, highlighting DTI's superior valuation metrics [6][7]

Core Viewpoint - Drilling Tools International Corp. (DTI) has updated its financial outlook for the full year 2024, indicating strong performance despite a challenging market environment in the oilfield services industry [2][6]. Financial Outlook - The company expects 2024 revenue to be at the high end of previously disclosed guidance [6]. - Adjusted EBITDA for 2024 is anticipated to be near the midpoint of previously disclosed guidance [6]. - Adjusted Net Income for 2024 is projected to be above the high end of previously disclosed guidance [6]. - Adjusted Free Cash Flow for 2024 is expected to be more than double compared to the prior year period [6]. Company Operations - DTI specializes in designing, engineering, manufacturing, and renting tools for horizontal and directional drilling operations [1][4]. - The company has successfully integrated its latest acquisitions and is realizing synergies to position itself for future growth [2]. - DTI operates 16 service and support centers across North America and maintains 11 international service and support centers in the EMEA and APAC regions [4]. Upcoming Events - DTI plans to report its fourth quarter and full year 2024 financial results on March 14, 2025, at 10:00 a.m. Eastern Time [3][7]. - The conference call will be accessible via dial-in or webcast, with a replay available until March 21, 2025 [3].

Group 1: Acquisition Overview - Drilling Tools International Corporation (DTI) has completed the acquisition of Titan Tools Services Ltd., enhancing its capabilities in downhole tool rental services and positioning DTI to provide comprehensive solutions for drilling operations [1] - The acquisition aligns with DTI's technical expertise and customer relationships, expanding its international footprint in the U.K. North Sea, Europe, and Africa [2] - DTI aims to integrate Titan's operations seamlessly, focusing on business continuity and leveraging combined strengths to enhance technological capabilities [2] Group 2: Recent Developments - DTI has also completed two major acquisitions: European Drilling Projects and Superior Drilling Products, which have further enhanced its technological capabilities and global influence [3] - The company secured $105 million in financing to support growth initiatives and international expansion, reinforcing its position as a market leader in the oil and gas industry [3] Group 3: Company Profile and Market Position - DTI manufactures and rents downhole drilling tools for horizontal and directional drilling of oil and natural gas wells, currently holding a Zacks Rank 3 (Hold) [4] - Investors may consider other energy sector stocks with better rankings, such as GeoPark Limited (Zacks Rank 1), ARC Resources Ltd. (Zacks Rank 2), and Flotek Industries, Inc. (Zacks Rank 2) [5]

Financial Data and Key Metrics Changes - Total revenue for Q3 2024 was $40.1 million, with adjusted EBITDA at $11.1 million and adjusted free cash flow at $7.8 million, which is more than the entire adjusted free cash flow generated in 2023 [10][28] - Adjusted net income for the quarter was $4.6 million, representing an adjusted diluted EPS of $0.14 per share [28] - Operating expenses were reported at $35.8 million, with income from operations at $4.3 million [28] Business Line Data and Key Metrics Changes - Tool rental revenue was $28.1 million, while product sales revenue totaled $12 million [27] - Improved gross margins were noted in the tool rental segment, attributed to the vertical integration from the Superior Drilling acquisition and better utilization of pipe [42][43] Market Data and Key Metrics Changes - The company experienced rig count softness in U.S. land, U.S. Gulf of Mexico, and Middle Eastern markets [9] - The Eastern Hemisphere revenue mix is expected to grow from approximately 1% of total revenue in 2023 to 10% or more in 2024 [33][64] Company Strategy and Development Direction - The company aims to become the premier drilling tools rental solution provider, focusing on scale through active M&A, having acquired three companies in 2024 and announcing a fourth [11][12] - The "One DTI" strategy is being implemented to integrate multiple businesses and enhance operational efficiencies [17][21] - The company is pursuing additional consolidation opportunities in the oilfield services sector to supplement organic growth initiatives [22][40] Management Comments on Operating Environment and Future Outlook - Management noted a stable downturn in the market, with expectations of a flat rig count and potential softness before an uptick [53] - The medium to long-term natural gas demand outlook is strong, particularly with new LNG capacity expected to come online in 2025 and 2026 [25] - The company is revising its 2024 revenue guidance to a range of $145 million to $155 million, with adjusted EBITDA expected between $38 million and $43 million [31][32] Other Important Information - The company plans to transition to two reporting segments, Eastern Hemisphere and Western Hemisphere, starting in Q4 2024 [33][34] - A cost reduction program has been implemented for annualized savings of $2.4 million, with adjustments based on market conditions [24] Q&A Session Summary Question: Inquiry about tool rental revenue and gross margins - Management confirmed that improved margins were largely due to the vertical integration from the Superior Drilling acquisition and better utilization of pipe [42][43] Question: Update on the integration process of Superior Drilling - Integration in the Western Hemisphere is complete, and efforts are ongoing in the Eastern Hemisphere, with expectations for revenue synergies to materialize in Q4 and early 2025 [44][45] Question: Insights on M&A strategy and targets - The company is pursuing a range of M&A opportunities, from tuck-ins to transformational mergers, and is comfortable continuing to be active in the M&A space [46][48] Question: Discussion on the M&A market differences between North America and internationally - Management noted that while both markets present opportunities, the Eastern Hemisphere is less transparent and involves more complexities due to multiple countries [60][62]

Financial Performance - Total revenue for the three months ended September 30, 2024, was $40.1 million, a 5.1% increase from $38.1 million in the same period of 2023[184]. - Net income for the three months ended September 30, 2024, was $0.9 million, down 79.8% from $4.3 million in the same period of 2023[184]. - Adjusted EBITDA for the three months ended September 30, 2024, was $11,125, down from $12,729 in 2023, representing a decline of approximately 12.6%[235]. - For the nine months ended September 30, 2024, net cash provided by operating activities was $9.7 million, compared to $17.5 million in 2023, reflecting a decrease of 44.5%[242]. - Total cash and cash equivalents as of September 30, 2024, were $12.0 million, with expectations that existing cash and cash flows will be sufficient for at least the next 12 months[236]. Revenue Breakdown - Tool rental revenue for the three months ended September 30, 2024, was $28.1 million, a decrease of 4.2% from $29.4 million in the same period of 2023[201]. - Product sales revenue for the three months ended September 30, 2024, increased by 36.5% to $12.0 million from $8.8 million in the same period of 2023[201]. - Tool rental revenue decreased by $4.2 million, or 5%, to $86.4 million for the nine months ended September 30, 2024, compared to $90.6 million for the same period in 2023[222]. - Product sale revenue decreased by $2.0 million, or 8%, to $28.2 million for the nine months ended September 30, 2024, compared to $26.2 million for the same period in 2023[223]. Cost and Expenses - Total costs and expenses for the three months ended September 30, 2024, were $35.8 million, an increase of 15.5% from $31.0 million in the same period of 2023[201]. - Selling, general, and administrative expenses for the three months ended September 30, 2024, were $19.9 million, up 19.0% from $16.6 million in the same period of 2023[201]. - Cost of tool rental revenue decreased by $3.3 million, or 44%, to $4.1 million for the three months ended September 30, 2024, compared to $7.3 million for the same period in 2023[216]. - Cost of product sale revenue increased by $3.9 million, or 216%, to $5.7 million for the three months ended September 30, 2024, compared to $1.8 million for the same period in 2023[217]. - Interest expense increased by $965 thousand, or 1322%, to $1.0 million for the three months ended September 30, 2024, compared to $0.1 million for the same period in 2023[220]. - Depreciation and amortization for the nine months ended September 30, 2024, was $17,232, compared to $15,035 in 2023, indicating an increase of approximately 14.6%[236]. Cash Flow Activities - Net cash used in investing activities for the nine months ended September 30, 2024, was $46.1 million, significantly higher than $20.0 million in 2023[244]. - Net cash provided by financing activities for the nine months ended September 30, 2024, was $43.4 million, a substantial increase from $4.3 million in 2023[246]. Market Conditions - The WTI oil price as of September 30, 2024, was approximately $68.75 per barrel, reflecting ongoing volatility in the oil market[189]. - Henry Hub natural gas spot prices decreased from an average of $2.64 per MMBtu in September 2023 to $2.28 per MMBtu in September 2024, a decline of 13.6%[192]. - The average monthly rig count in the Western Hemisphere decreased to 947 rigs in the three months ended September 30, 2024, compared to 1,007 rigs in the same period of 2023, a decline of 5.9%[194]. - The average monthly rig count in the Eastern Hemisphere increased to 736 rigs in the three months ended September 30, 2024, compared to 739 rigs in the same period of 2023, a slight decrease of 0.4%[194]. - Concerns regarding a possible recession may negatively impact oil demand, affecting the demand for the company's goods and services[261]. Cybersecurity Measures - The company has implemented a suite of cybersecurity controls, including regular testing and training sessions[262]. - An incident response plan has been established to address potential cybersecurity incidents and associated risks[262]. Foreign Currency and Inflation Risks - The majority of sales are denominated in United States and Canadian dollars, exposing the company to foreign currency risk as it expands internationally[258]. - The company has not entered into any hedging arrangements to mitigate foreign currency fluctuations[260]. - Inflationary pressures on the cost structure are expected to continue, although raw material and component costs are moderating[261]. Capital Expenditures - The company incurred capital expenditures of $19.6 million for property, plant, and equipment during the nine months ended September 30, 2024[244]. - The company has available federal net operating loss carryforwards that are expected to substantially reduce cash tax payments over the next several years[240].

Core Viewpoint - Drilling Tools International Corp. (DTI) reported quarterly earnings of $0.14 per share, exceeding the Zacks Consensus Estimate of $0.06 per share, indicating a significant earnings surprise of 133.33% [1] Group 1: Earnings Performance - The company achieved earnings of $0.14 per share, consistent with the previous year's earnings [1] - Over the last four quarters, DTI has surpassed consensus EPS estimates only once [2] - The current consensus EPS estimate for the upcoming quarter is $0.09, with a projected revenue of $44.16 million [7] Group 2: Revenue Performance - DTI reported revenues of $40.09 million for the quarter ended September 2024, which fell short of the Zacks Consensus Estimate by 3.85% [2] - Year-over-year, revenues increased from $38.14 million [2] Group 3: Stock Performance and Outlook - DTI shares have increased by approximately 9.4% since the beginning of the year, while the S&P 500 has gained 25.5% [3] - The company's current Zacks Rank is 4 (Sell), indicating expectations of underperformance in the near future [6] - The outlook for the industry, specifically the Oil and Gas - Field Services sector, is currently in the top 32% of Zacks industries, suggesting a favorable environment for stocks in this sector [8]

Exhibit 99.1 NEWS RELEASE Drilling Tools International Corp. Reports 2024 Third Quarter Results HOUSTON — November 13, 2024 — Drilling Tools International Corp., (NASDAQ: DTI) ("DTI" or the "Company"), a global oilfield services company that designs, engineers, manufactures and provides a differentiated, rental-focused offering of tools for use in onshore and offshore horizontal and directional drilling operations, as well as other cutting-edge solutions across the well life cycle, today reported its 2024 t ...