Superior Drilling Products, Inc. Delivered 7% Revenue Growth and Generated $1.9 Million in Cash for Third Quarter 2018 VERNAL, Utah
-
Royalty and fleet maintenance revenue increased 46%
-
Contract services increased 11%
-
Year-to-date revenue grew 24% and net income increased to $1.3
million from $0.5 million
-
Generated $4.0 million in cash from operations year-to-date
Superior Drilling Products, Inc. (NYSE American: SDPI) (“SDP” or the
“Company”), a designer and manufacturer of drilling tool technologies,
today reported financial results for the third quarter ended September
30, 2018.
Troy Meier, Chairman and CEO, noted, “We made measurable progress on
several fronts this last quarter. Some of our accomplishments included
the following:
-
Opened our Abilene, Texas facility. We are processing tool repairs
there, improving tool turnaround time and reducing transportation
costs for our distributor by localizing our presence where demand is
strong.
-
Finalizing a new, mutually beneficial distribution agreement with our
exclusive U.S. distributor.
-
Engaged a servicing partner in the Middle East and expect them to be
fully up and running by January 2019.
-
Expanding market channels in the Middle East. In final stages of
negotiations with a sophisticated, global oilfield service company to
represent the Drill-N-Ream® well bore conditioning tool (“DnR”) in the
Middle East, while also addressing additional inquiries by others.
-
Refinancing our debt to recapitalize our balance sheet.”
He added, “The DnR’s operating performance is continuing to garner
strong acceptance in the Middle East. In one country, the DnR is
approved for use and is the preferred wellbore conditioning tool and, in
a second country, the tool is advancing through that country’s
stage-gate approval process. Tool revenue improved in the quarter even
as tool sales in the U.S. were softer. As final terms of the
distribution agreement were being developed, this delayed purchases by
our distributor. Tool revenue in the Middle East was light due to
logistics inefficiencies. We believe this reinforces the importance of
an additional sales channel partners for that region as well as the need
for our servicing partner.”
He concluded, “Our first nine months of 2018 have been very strong and,
while we expect that a typical seasonal slowdown combined with the
finalization of channel partner relationships will somewhat dampen the
fourth quarter, we believe this sets us up for a very strong start in
2019.”
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter 2018 Financial Summary ($ in thousands,
except per share amounts)
|
|
|
|
|
Q3 2018
|
|
|
Q3 2017
|
|
|
$Y/Y Change
|
|
|
% Y/Y Change
|
|
|
Q2 2018
|
|
|
$ Seq. Change
|
|
|
% Seq. Change
|
Tool sales/rental
|
|
|
|
$1,655
|
|
|
$ 2,012
|
|
|
$ (357)
|
|
|
(17.8)%
|
|
|
$2,506
|
|
|
$ (851)
|
|
|
(34.0) %
|
Other related tool revenue
|
|
|
|
1,706
|
|
|
1,170
|
|
|
536
|
|
|
45.8%
|
|
|
1,547
|
|
|
160
|
|
|
10.3 %
|
Tool Revenue
|
|
|
|
3,361
|
|
|
3,182
|
|
|
179
|
|
|
5.6%
|
|
|
4,053
|
|
|
(692)
|
|
|
(17.1) %
|
Contract Services
|
|
|
|
1,404
|
|
|
1,265
|
|
|
140
|
|
|
11.1%
|
|
|
1,346
|
|
|
58
|
|
|
4.3 %
|
Total Revenue
|
|
|
|
$4,765
|
|
|
$ 4,447
|
|
|
$ 319
|
|
|
7.2%
|
|
|
$5.399
|
|
|
$ (634)
|
|
|
(11.7) %
|
Operating income (loss)
|
|
|
|
290
|
|
|
720
|
|
|
(429)
|
|
|
(59.7)%
|
|
|
1,088
|
|
|
(797)
|
|
|
(73.3)%
|
As a % of sales
|
|
|
|
6.1%
|
|
|
16.2%
|
|
|
|
|
|
|
|
|
20.1%
|
|
|
|
|
|
|
Net income (loss)
|
|
|
|
$ 225
|
|
|
$ 586
|
|
|
$ (361)
|
|
|
(61.6)%
|
|
|
$ 1,005
|
|
|
$ (780)
|
|
|
(77.6)%
|
Diluted earnings (loss) per share
|
|
|
|
$ 0.01
|
|
|
$ 0.02
|
|
|
$ (0.02)
|
|
|
(62.9)%
|
|
|
$ 0.04
|
|
|
$ (0.03)
|
|
|
(77.6)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue growth was driven by the increase in deployed tools resulting in
higher royalty and fleet maintenance revenue as well as higher contract
services revenue that improved with more drill bit refurbishment
activity. These improvements more than offset lower tool sales/rental
revenue. The decline in tool sales/rental revenue was the result of both
distributor contract negotiations and the durability of the DnR tools.
The tools durability has extended its useful life and reduced near term
replacement tool sales, although in the long term, the durability
improves life-of-tool economics.
Net income declined $0.4 million compared with the prior year period as
a result of increased investments in research and development, as well
as domestic and Middle East expansion efforts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter 2018 Operational Review
|
($ in thousands)
|
|
|
|
|
Q3 2018
|
|
|
Q3 2017
|
|
|
$ Y/Y Change
|
|
|
% Y/Y Change
|
|
|
Q2 2018
|
|
|
$ Seq. Change
|
|
|
% Seq. Change
|
Cost of revenue
|
|
|
|
$1,666
|
|
|
$1,717
|
|
|
$ (51)
|
|
|
(3.0) %
|
|
|
$1,943
|
|
|
(277)
|
|
|
(14.3) %
|
As a percent of sales
|
|
|
|
35.0%
|
|
|
38.6%
|
|
|
|
|
|
|
|
|
36.0%
|
|
|
|
|
|
|
Selling, general & administrative
|
|
|
|
$1,867
|
|
|
$1,102
|
|
|
$ 764
|
|
|
69.3 %
|
|
|
$1,427
|
|
|
440
|
|
|
30.8 %
|
As a percent of sales
|
|
|
|
39.2%
|
|
|
24.8%
|
|
|
|
|
|
|
|
|
26.4%
|
|
|
|
|
|
|
Depreciation & amortization
|
|
|
|
$ 942
|
|
|
$ 908
|
|
|
$ 35
|
|
|
3.8 %
|
|
|
$ 942
|
|
|
1
|
|
|
0.1 %
|
Total operating expenses
|
|
|
|
$4,475
|
|
|
$3,727
|
|
|
$ 748
|
|
|
20.1 %
|
|
|
$4,311
|
|
|
164
|
|
|
3.8 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The cost of revenue as a percentage of sales improved 360 basis points
due to the change in mix, primarily reflecting increased contract
services revenue and royalty income.
The $0.8 million increase in selling, general and administrative expense
(SG&A) over the prior-year period primarily reflects investments in
research and development, expansion into Abilene, Texas with a new
repair facility and international market expansion. As a percentage of
sales, SG&A increased 14.4 points compared with the prior-year period
and 12.8 points over the sequential second quarter.
The decline in third quarter 2018 Adjusted EBITDA, a non-GAAP measure
defined as earnings before interest, taxes, depreciation and
amortization, non-cash stock compensation expense and unusual items,
reflects the investments in R&D and domestic and international expansion
efforts. Adjusted EBITDA in the quarter was $1.4 million, or 28.6% of
revenue, down $0.4 million and $0.8 million compared with the 2017 third
quarter and trailing 2018 second quarter, respectively.
The Company believes that when used in conjunction with measures
prepared in accordance with U.S. generally accepted accounting
principles (“GAAP”), Adjusted EBITDA, which is a non-GAAP measure, helps
in the understanding of its operating performance. (1)See
the attached tables for important disclosures regarding SDP’s use of
adjusted EBITDA, as well as a reconciliation of net loss to adjusted
EBITDA.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-to-Date Review
|
($ in thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
YTD 2018
|
|
|
YTD 2017
|
|
|
$ Change
|
|
|
% Change
|
Revenue
|
|
|
|
$ 14,765
|
|
|
$11,866
|
|
|
2,899
|
|
|
24.4 %
|
Operating expenses
|
|
|
|
13,219
|
|
|
10,971
|
|
|
2,248
|
|
|
20.5 %
|
Operating income (loss)
|
|
|
|
1,546
|
|
|
894
|
|
|
651
|
|
|
72.8 %
|
Net income (loss)
|
|
|
|
$ 1,299
|
|
|
$ 507
|
|
|
792
|
|
|
156.2 %
|
Diluted income (loss) per share
|
|
|
|
$ 0.05
|
|
|
$ 0.02
|
|
|
0.03
|
|
|
146.6 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue in the first nine months of 2018 increased 24% when compared
with the same period last year. The growth reflects higher tool revenue
supported by increasing market share, U.S. drilling activity and
contributions from penetration into the Middle East. Strong operating
leverage from higher volume enabled the measurable improvement in
operating income and margin.
Net income for the first nine months of 2018 increased 2.5 times to $1.3
million compared with
$0.5 million for the same period in the prior-year. Adjusted EBITDA(1)
for the nine-month period was $4.7 million, or 32.1% of sales, compared
with $4.2 million, or 35.2% of sales, for the first nine months of 2017.
Balance Sheet and Liquidity
Cash and cash equivalents was $4.3 million at September 30, 2018, up
from $2.4 million at the end of 2017 and $3.1 million at the end of the
trailing second quarter. Cash generated from operations in the quarter
was $1.9 million, compared with $1.7 million in the prior-year period.
In the third quarter of 2018, the Company had capital expenditures of
$52 thousand.
Total debt at the end of the quarter was $11.0 million, down $1.8
million, or 14.4%, compared with $12.8 million at December 31, 2017.
At September 30, 2018, SDP had a working capital deficit of
approximately $1.2 million. The Company’s manufacturing facility is
financed by a commercial bank loan with principal of $4.2 million due
February 15, 2019. The debt was reclassified to short-term and results
in a working capital deficit at September 30, 2018.
Chris Cashion, Chief Financial Officer, noted, “We are currently in the
process of refinancing our mortgage and Hard Rock seller’s note, which
combined total approximately $10 million. We expect the refinancing to
be completed before the end of the year after which our current ratio
will revert to a much improved 2 to 1. Also, the term for our debt will
be extended over several years with debt maturities more evenly matching
our operating cash flow.”
Outlook:
Given the delays with contract negotiations for tool sales in the U.S.
and the timing related to plans to add another channel partner in the
Middle East, the Company has slightly lowered its revenue and operating
margin guidance for 2018. In addition, investments in service facilities
ahead of expected revenue is anticipated to impact gross margin in the
fourth quarter with an approximate $150 thousand increase in costs
related to the Texas facility start up and Middle East expansion efforts:
Revenue:
|
|
|
|
$18 million to $21 million
|
|
|
|
Represents 15% to 35% growth
|
Operating Margin:
|
|
|
|
5% to 8%
|
|
|
|
Reflects investments in facilities expansion in
Texas and servicing in the Middle East, as well as
staffing and professional fees for Middle East
expansion
|
Interest Expense:
|
|
|
|
Unchanged from approximately $750 thousand
|
|
|
|
Down from $906 thousand in 2017 on lower debt
balances
|
Depreciation and Amortization:
|
|
|
|
Unchanged at slightly under $4.0 million
|
|
|
|
Compares with $3.7 million in 2017
|
Capital Expenditures:
|
|
|
|
Unchanged at approximately $1 million
|
|
|
|
Similar to 2017
|
|
|
|
|
|
|
|
|
|
Webcast and Conference Call
The Company will host a conference call and live webcast today at 10:00
am MT (12:00 pm ET) to review the financial and operating results for
the quarter and discuss its corporate strategy and outlook. The
discussion will be accompanied by a slide presentation that will be made
available immediately prior to the conference call on SDP’s website at www.sdpi.com/events.
A question-and-answer session will follow the formal presentation.
The conference call can be accessed by calling (201) 689-8470.
Alternatively, the webcast can be monitored at www.sdpi.com/events.
A telephonic replay will be available from 1:00 p.m. MT (3:00 p.m. ET)
the day of the teleconference until Thursday, November 15, 2018. To
listen to the archived call, dial (412) 317-6671 and enter conference ID
number 13683889, or access the webcast replay at www.sdpi.com,
where a transcript will be posted once available.
About Superior Drilling Products, Inc.
Superior Drilling Products, Inc. is an innovative, cutting-edge drilling
tool technology company providing cost saving solutions that drive
production efficiencies for the oil and natural gas drilling industry.
The Company designs, manufactures, repairs and sells drilling tools. SDP
drilling solutions include the patented Drill-N-Ream® well
bore conditioning tool and the patented StriderTM oscillation
system technology. In addition, SDP is a manufacturer and refurbisher of
PDC (polycrystalline diamond compact) drill bits for a leading oil field
service company. SDP operates a state-of-the-art drill tool fabrication
facility, where it manufactures its solutions for the drilling industry,
as well as customers’ custom products. The Company’s strategy for growth
is to leverage its expertise in drill tool technology and innovative,
precision machining in order to broaden its product offerings and
solutions for the oil and gas industry.
Additional information about the Company can be found at: www.sdpi.com.
Safe Harbor Regarding Forward Looking Statements
This news release contains forward-looking statements and information
that are subject to a number of risks and uncertainties, many of which
are beyond our control. All statements, other than statements of
historical fact included in this release, regarding our strategy, future
operations, financial position, estimated revenue and losses, projected
costs, prospects, plans and objectives of management, are
forward-looking statements. The use of words “could,” “believe,”
“anticipate,” “intend,” “estimate,” “expect,” “may,” “continue,”
“predict,” “potential,” “project”, “forecast,” “should” or “plan, and
similar expressions are intended to identify forward-looking statements,
although not all forward -looking statements contain such identifying
words. Certain statements in this release may constitute forward-looking
statements, including statements regarding the Company’s financial
position, market success with specialized tools, effectiveness of its
sales efforts, success at developing future tools, and the Company’s
effectiveness at executing its business strategy and plans. These
statements reflect the beliefs and expectations of the Company and are
subject to risks and uncertainties that may cause actual results to
differ materially. These risks and uncertainties include, among other
factors, our business strategy and prospects for growth; our cash flows
and liquidity; our financial strategy, budget, projections and operating
results; the amount, nature and timing of capital expenditures; the
availability and terms of capital; competition and government
regulations; and general economic conditions. These and other factors
could adversely affect the outcome and financial effects of the
Company’s plans and described herein.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Superior Drilling Products, Inc.
|
Consolidated Condensed Statements Of Operations
|
For the Nine Months Ended September, 2018 and 2017
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
|
|
|
For the Nine Months
|
|
|
|
|
Ended September 30,
|
|
|
Ended September 30,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018
|
|
|
2017
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
$
|
4,765,361
|
|
|
|
$
|
4,446,540
|
|
|
|
$
|
14,764,577
|
|
|
|
$
|
11,865,648
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating cost and expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
|
|
|
|
|
1,665,774
|
|
|
|
|
1,716,740
|
|
|
|
|
5,407,389
|
|
|
|
|
4,388,860
|
|
Selling, general, and administrative expenses
|
|
|
|
|
1,866,833
|
|
|
|
|
1,102,373
|
|
|
|
|
4,991,481
|
|
|
|
|
3,837,218
|
|
Depreciation and amortization expense
|
|
|
|
|
942,473
|
|
|
|
|
907,837
|
|
|
|
|
2,820,183
|
|
|
|
|
2,745,232
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating costs and expenses
|
|
|
|
|
4,475,080
|
|
|
|
|
3,726,950
|
|
|
|
|
13,219,053
|
|
|
|
|
10,971,310
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income (loss)
|
|
|
|
|
290,281
|
|
|
|
|
719,590
|
|
|
|
|
1,545,524
|
|
|
|
|
894,338
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
|
|
113,555
|
|
|
|
|
90,959
|
|
|
|
|
305,694
|
|
|
|
|
255,327
|
|
Interest expense
|
|
|
|
|
(178,642
|
)
|
|
|
|
(224,510
|
)
|
|
|
|
(552,692
|
)
|
|
|
|
(698,638
|
)
|
Other income
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
43,669
|
|
Gain on sale of assets
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
12,167
|
|
Total other expense
|
|
|
|
|
(65,087
|
)
|
|
|
|
(133,551
|
)
|
|
|
|
(246,998
|
)
|
|
|
|
(387,475
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
|
$
|
225,194
|
|
|
|
$
|
586,039
|
|
|
|
$
|
1,298,526
|
|
|
|
$
|
506,863
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
Net income
|
|
|
|
$
|
225,194
|
|
|
|
$
|
586,039
|
|
|
|
$
|
1,298,526
|
|
|
|
$
|
506,863
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic income (loss) earnings per common share
|
|
|
|
$
|
0.01
|
|
|
|
$
|
0.02
|
|
|
|
$
|
0.05
|
|
|
|
$
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average common shares outstanding
|
|
|
|
|
24,542,551
|
|
|
|
|
24,261,272
|
|
|
|
|
24,537,647
|
|
|
|
|
24,218,477
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income (loss) per common Share
|
|
|
|
$
|
0.01
|
|
|
|
$
|
0.02
|
|
|
|
$
|
0.05
|
|
|
|
$
|
0.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average common shares outstanding
|
|
|
|
|
25,162,445
|
|
|
|
|
24,261,272
|
|
|
|
|
25,156,629
|
|
|
|
|
24,218,477
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Superior Drilling Products, Inc.
|
Consolidated Condensed Balance Sheets
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2018
|
|
|
December 31, 2017
|
Assets
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
Cash
|
|
|
|
$
|
4,275,063
|
|
|
$
|
2,375,179
|
Accounts receivable, net
|
|
|
|
|
2,628,892
|
|
|
|
2,667,042
|
Prepaid expenses
|
|
|
|
|
224,833
|
|
|
|
111,530
|
Interest Receivable
|
|
|
|
|
275,614
|
|
|
|
-
|
Inventories
|
|
|
|
|
1,034,899
|
|
|
|
1,196,813
|
Other current assets
|
|
|
|
|
161,996
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
|
|
8,601,297
|
|
|
|
6,350,564
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
|
|
8,006,462
|
|
|
|
8,809,348
|
Intangible assets, net
|
|
|
|
|
4,297,778
|
|
|
|
6,132,778
|
Related party note receivable
|
|
|
|
|
7,367,212
|
|
|
|
7,367,212
|
Other noncurrent assets
|
|
|
|
|
48,727
|
|
|
|
15,954
|
Total assets
|
|
|
|
$
|
28,321,476
|
|
|
$
|
28,675,856
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
$
|
658,561
|
|
|
$
|
1,021,469
|
Accrued expenses
|
|
|
|
|
725,151
|
|
|
|
543,758
|
Current portion of long-term debt, net of discounts
|
|
|
|
|
8,443,430
|
|
|
|
6,101,678
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
|
$
|
9,827,142
|
|
|
$
|
7,666,905
|
|
|
|
|
|
|
|
|
|
|
Long-term debt, less current portion, net of discounts
|
|
|
|
|
2,521,021
|
|
|
|
6,706,375
|
Total liabilities
|
|
|
|
$
|
12,348,163
|
|
|
$
|
14,373,280
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity
|
|
|
|
|
|
|
|
|
|
Common stock (24,550,979 and 24,535,155)
|
|
|
|
|
24,551
|
|
|
|
24,535
|
Additional paid-in-capital
|
|
|
|
|
39,280,059
|
|
|
|
38,907,864
|
Accumulated deficit
|
|
|
|
|
(23,331,297)
|
|
|
|
(24,629,823)
|
Total stockholders' equity
|
|
|
|
$
|
15,973,313
|
|
|
$
|
14,302,576
|
Total liabilities and shareholders' equity
|
|
|
|
$
|
28,321,476
|
|
|
$
|
28,675,856
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Superior Drilling Products, Inc.
|
Consolidated Condensed Statement of Cash Flows
|
For The Nine Months Ended September 30, 2018 and 2017
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2018
|
|
|
|
|
September 30, 2017
|
Cash Flows From Operating Activities
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
|
|
$
|
1,298,526
|
|
|
|
$
|
506,863
|
Adjustments to reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization expense
|
|
|
|
|
2,820,183
|
|
|
|
|
2,745,232
|
Amortization of debt discount
|
|
|
|
|
43,459
|
|
|
|
|
59,766
|
Share - based compensation expense
|
|
|
|
|
372,211
|
|
|
|
|
498,384
|
Impairment of inventories
|
|
|
|
|
41,396
|
|
|
|
|
-
|
Gain on sale of assets
|
|
|
|
|
-
|
|
|
|
|
(12,167)
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
|
38,150
|
|
|
|
|
(1,493,995)
|
Interest receivable
|
|
|
|
|
(275,614)
|
|
|
|
|
(251,600)
|
Inventories
|
|
|
|
|
121,484
|
|
|
|
|
(9,220)
|
Prepaid expenses and other noncurrent assets
|
|
|
|
|
(308,072)
|
|
|
|
|
(64,245)
|
Accounts payable and accrued expenses
|
|
|
|
|
(181,515)
|
|
|
|
|
(610,936)
|
Other long-term liabilities
|
|
|
|
|
-
|
|
|
|
|
(17,490)
|
Net Cash Provided By Operating Activities
|
|
|
|
$
|
3,970,208
|
|
|
|
$
|
1,350,592
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows From Investing Activities
|
|
|
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment
|
|
|
|
|
(183,263)
|
|
|
|
|
(220,101)
|
Proceeds from sale of fixed assets
|
|
|
|
|
-
|
|
|
|
|
2,483,921
|
Net Cash Provided By (Used In) Investing Activities
|
|
|
|
|
(183,263)
|
|
|
|
|
2,263,820
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows From Financing Activities
|
|
|
|
|
|
|
|
|
|
|
Principal payments on debt
|
|
|
|
|
(1,887,061)
|
|
|
|
|
(2,858,882)
|
Principal payments on related party debt
|
|
|
|
|
-
|
|
|
|
|
(74,293)
|
Principal payments on capital lease obligations
|
|
|
|
|
-
|
|
|
|
|
(217,302)
|
Net Cash Used In Financing Activities
|
|
|
|
#
|
(1,887,061)
|
|
|
|
|
(3,150,477)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Increase in Cash
|
|
|
|
|
1,899,884
|
|
|
|
|
463,935
|
Cash at Beginning of Period
|
|
|
|
|
2,375,179
|
|
|
|
|
2,241,902
|
Cash at End of Period
|
|
|
|
$
|
4,275,063
|
|
|
|
$
|
2,705,837
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental information:
|
|
|
|
|
|
|
|
|
|
|
Cash paid for interest
|
|
|
|
$
|
488,112
|
|
|
|
$
|
617,565
|
Non-cash payment of other long-term liability by offsetting related
party note receivable
|
|
|
|
$
|
-
|
|
|
|
$
|
550,000
|
Acquisition of equipment by issuance of note payable
|
|
|
|
$
|
-
|
|
|
|
$
|
16,557
|
Lease equipment renewal
|
|
|
|
$
|
-
|
|
|
|
$
|
626,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Superior Drilling Products, Inc.
Adjusted EBITDA(1) Reconciliation
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
September 30, 2018
|
|
|
|
September 30, 2017
|
|
|
|
June 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
|
|
|
|
$
|
225,194
|
|
|
|
|
$
|
586,039
|
|
|
|
|
$
|
1,004,798
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
942,473
|
|
|
|
|
|
907,837
|
|
|
|
|
|
941,683
|
|
Interest expense, net
|
|
|
|
|
65,087
|
|
|
|
|
|
133,551
|
|
|
|
|
|
82,786
|
|
Share-based compensation
|
|
|
|
|
131,867
|
|
|
|
|
|
147,643
|
|
|
|
|
|
103,327
|
|
(Gain) loss on sale of assets
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
Non-GAAP adjusted EBITDA(1)
|
|
|
|
$
|
1,364,621
|
|
|
|
|
$
|
1,775,070
|
|
|
|
|
$
|
2,132,594
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Revenue
|
|
|
|
$
|
4,765,361
|
|
|
|
|
$
|
4,446,540
|
|
|
|
|
$
|
5,398,923
|
|
Non-GAAP EBITDA Margin
|
|
|
|
|
28.6
|
%
|
|
|
|
|
39.9
|
%
|
|
|
|
|
39.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
|
|
|
|
|
|
|
|
|
September 30, 2018
|
|
|
|
September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
|
|
|
|
$
|
1,298,526
|
|
|
|
|
$
|
506,863
|
|
|
|
|
|
Add back:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
2,820,183
|
|
|
|
|
|
2,745,232
|
|
|
|
|
|
Share-based compensation
|
|
|
|
|
372,211
|
|
|
|
|
|
498,384
|
|
|
|
|
|
Interest expense, net
|
|
|
|
|
246,998
|
|
|
|
|
|
443,311
|
|
|
|
|
|
(Gain) loss on sale of assets
|
|
|
|
|
-
|
|
|
|
|
|
(12,167
|
)
|
|
|
|
|
Non-GAAP Adjusted EBITDA(1)
|
|
|
|
$
|
4,737,918
|
|
|
|
|
$
|
4,181,623
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP Revenue
|
|
|
|
$
|
14,764,577
|
|
|
|
|
$
|
11,865,648
|
|
|
|
|
|
Non-GAAP EBITDA Margin
|
|
|
|
|
32.1
|
%
|
|
|
|
|
35.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Adjusted EBITDA represents net income adjusted for income
taxes, interest, depreciation and amortization and other items as noted
in the reconciliation table. The Company believes Adjusted EBITDA is an
important supplemental measure of operating performance and uses it to
assess performance and inform operating decisions. However, Adjusted
EBITDA is not a GAAP financial measure. The Company’s calculation of
Adjusted EBITDA should not be used as a substitute for GAAP measures of
performance, including net cash provided by operations, operating income
and net income. The Company’s method of calculating Adjusted EBITDA may
vary substantially from the methods used by other companies and
investors are cautioned not to rely unduly on it.
View source version on businesswire.com: https://www.businesswire.com/news/home/20181108005104/en/ Copyright Business Wire 2018
Source: Business Wire
(November 8, 2018 - 6:30 AM EST)
News by QuoteMedia
www.quotemedia.com
|