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Innovex International, Inc. (NYSE: INVX) (“Innovex,” the “Company” or “we”) today announced financial and operating results for the fourth quarter and full year of 2024. Fourth Quarter Highlights Revenue1 of $251 million, up 65% quarter over quarter Net Income of $32 million, net income margin of 13% Adjusted EBITDA2 of $49 million and Adjusted EBITDA margin2 of 20% Net Cash Provided by Operating Activities of $36 million Free Cash Flow2 of $29 million Income from Operations of $27 million Return on Capital Employed2 of 12% Announced intended divestiture of Dril-Quip’s 128 acre Eldridge facility, an important step to improve margins, efficiency, and returns on invested capital Acquired Downhole Well Solutions (“DWS”), the US market leader in proprietary drilling optimization tools, with untapped international market growth opportunities Key Subsequent Events Fully realized our targeted $30 million of annualized merger cost synergies just five months after closing of the merger between Innovex Downhole Solutions, Inc, and Dril-Quip, Inc. Acquired SCF Machining Corp (“SCF”) to further increase margins and supply chain flexibility Signed Master Service Agreement with OneSubsea to provide wellheads on Integrated / EPCI contracts Announcing $100 million share buyback authorization Adam Anderson, CEO commented, “This was an outstanding fourth quarter, in which we began to see the results of our operational transformation. While we are still in the early stages, we are encouraged by positive progress on our plans to increase margins, drive organic growth, and elevate the customer experience. Our “No-Barriers” culture, in conjunction with the execution of our proven playbook, is once again yielding positive results for both our customers and our shareholders.” Kendal Reed, CFO continued, “I am excited to share that we have met our total merger cost synergy target of $30 million in annualized savings much sooner than anticipated. We continue to identify opportunities for further margin enhancement and growth, while maintaining a strong and conservative balance sheet. Our capital-light business model has allowed us to convert a high proportion of our EBITDA to free cash flow.” Operational & Financial Results Kendal Reed, CFO commented, “We are pleased by the resilience of both our NAM Land and International and Offshore businesses despite the slowdown of activity. We continue to grow our addressable market by increasing our scope of products and entering new geographic regions. “Highly accretive acquisition targets, such as DWS and SCF, continue to provide high returning opportunities for reinvestment of our strong free cash flow. DWS was able to grow market share in the US Land market over the course of 2024, despite the US Land rig count decreasing by 13% compared to 2023. We remain highly selective and committed to only pursuing opportunities that fit our high-return, capital-light, small ticket/big impact business proposition while never exceeding one turn of EBITDA in leverage. While we continue to see many intriguing opportunities, our board has also authorized a $100 million share buyback program that will provide a competing use of capital to M&A as well as an additional lever to drive higher ROCE and return capital to shareholders.” Adam Anderson, CEO concluded, “We see numerous opportunities for organic growth through revenue synergies and untapped international markets. We have already begun seeing these opportunities materialize. We recently combined legacy Innovex and legacy Dril-Quip products on a well for a major IOC in the Gulf of Mexico. We have also begun to deploy DWS products in Canada, Latin America, and the Middle East, leveraging Innovex’s global distribution. We anticipate our newly formed partnership with OneSubsea will allow us to grow our market share in subsea wellheads by providing a collaborative EPCI solution that will benefit our customers with increased choice. We continue to focus on improving our margins, enhancing customer experience, and unlocking value for our shareholders.” Balance Sheet, Debt, Cash Flow & Other Net cash provided by operating activities was $36 million and capital expenditures were $8 million (approximately 3% of revenue) for the fourth quarter of 2024. Innovex generated free cash flow of $29 million during the fourth quarter of 2024 and ended the quarter with $73 million of cash and cash equivalents and $35 million of total debt. Innovex’s total debt balance at the end of the quarter represented 0.26x trailing twelve month Adjusted EBITDA, with $78 million of availability under its revolving credit facility. Innovex believes in maintaining conservative levels of leverage and ample liquidity in order to maximize strategic flexibility and allow the Company to capitalize on M&A opportunities with strong quantitative and qualitative characteristics. Return on Capital Employed (“ROCE”) Innovex’s dedication to efficient capital allocation and prudent investment, combined with our capital light business model, enable us to generate strong returns on our invested capital. Income from operations during the fourth quarter of 2024 was $27 million. Return on Capital Employed (“ROCE”) for the twelve months ended 12/31/2024 was 12%. We remain focused on capital efficiency, which we believe is a key driver of sustainable value creation for our shareholders. Q1 2025 Guidance Looking to the first quarter of 2025, Innovex expects to generate $245 - $255 million in total revenue, assuming a flat rig count environment in most markets, with weakness in the Mexican market and relatively low deliveries into the US Offshore market. Innovex expects to generate Adjusted EBITDA of $45 - $50 million in the first quarter of 2025. |
