Drilling Tools International Corporation · NASDAQ:DTI
Drilling Tools International — FY2024 Earnings Presentation
48 slides from Drilling Tools International's earnings presentation, Mar 17, 2025
Slide 1: Investor Presentation Spring 2025
INVESTOR PRESENTATION SPRING 2025 DRILLINGTOOLS.COM NASDAQ: DTI Exhibit 99.1
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS General: Drilling Tools International Corporation (“DTI”) is making this presentation available in connection with the release of its financial results for the three months and full year ended December 31, 2024. The information contained in this presentation does not purpo
Slide 3: Overview by the CEO: Built for Outperformance
OVERVIEW BY THE CEO BUILT FOR OUTPERFORMANCE At DTI, we're not just adapting to the future of drilling – we're shaping it. We continue to have success in integrating our latest acquisitions, realizing synergies and positioning DTI for the future. Our strategic consolidation of the oilfield service r
Slide 4: The Lifecycle to Provide Mission Critical Drilling Tools
THE LIFECYCLE TO PROVIDE MISSION CRITICAL DRILLING TOOLS Extensive Tool Inventory Active rental and market participation on 60% of drilling rigs in North America and growing in the Eastern Hemisphere. Efficient In House Manufacturing & Repair Facilities Building and Maintaining existing fleet and fu
Slide 5: Blue Chip Customer Base Across E&P and OFS Companies
BLUE CHIP CUSTOMER BASE ACROSS E&P AND OFS COMPANIES 5
Slide 6: DTI Leadership Team Experience Matters
DTI LEADERSHIP TEAM EXPERIENCE MATTERS 6
Slide 7: Our Customers & Why They Rent Tools
OUR CUSTOMERS & WHY THEY RENT TOOLS Outsources Logistics, Inspection, Storage & Maintenance Fill Equipment Supply Gaps Immediate Equipment Availability Focus Capex On Core Operations Eliminates Equipment Redeployment Risk Control Expenses & Inventory Access To the Right Equpment for Any Job Benefits
Slide 8: Comprehensive Offering to Supply Downhole Technology
COMPREHENSIVE OFFERING TO SUPPLY DOWNHOLE TECHNOLOGY ACROSS WELL CONSTRUCTION AND ABANDONMENT OPERATIONS Differentiated and extensive inventory of tools to address the wide-ranging needs of Oil & Gas customers across all regions Heavy Weight Drill Pipe Stabilizer Drill-N-Ream RotoSteer Non-Magnetic
Slide 9: Modern Manufacturing and Repair Services
MODERN MANUFACTURING &AND REPAIR SERVICES Nisku, CANADA Relocated to a new facility in 2024 Poised to better serve DTI’s client base through a fit for purpose facility Supports Canada and other International locations Responsive, Scalable and Low Cost Vernal, UT Bit repair and manufacture Drill N Re
Slide 10: COMPASS Order Management System
COMPASS provides the customer traceability and transparency in the rental tool process. Customers can order their own tools online through Compass with an “Amazon style” experience. KEY OPERATIONAL DIFFERENTIATORS Proprietary COMPASS Order Management System Unique, Proprietary Software and Support S
Slide 11: Executing Our Strategic Plan Delivering Improved Results
EXECUTING OUR STRATEGIC PLAN DELIVERING IMPROVED RESULTS DTI ACHIEVEMENTS SINCE BECOMING A PUBLIC COMPANY IN JUNE 2023 REPORTED 2024 GROWTH 1.6% Y/Y Revenue136% Y/Y Adj. Free Cash Flow(1) Four acquisitions in 9 months Deep Casing Tools / Superior Drilling Products / European Drilling Projects / Tita
Slide 12: Organic Growth Drivers
ORGANIC GROWTH DRIVERS 2025 results will include a full year of contributions from all acquisitions announced in 2024 Leverage our global footprint of distribution and sales channel to market Expand scope of tools & services through technological advancements Leading edge downhole technology for ext
Slide 13: M&A Growth Strategy: Significant Consolidation Upside
M&A GROWTH STRATEGY: SIGNIFICANT CONSOLIDATION UPSIDE DTI has established a framework and robust pipeline to strategically consolidate the oilfield service rental tool industry through accretive acquisitions Large Fragmented Industry Large universe of potential targets – primarily smaller, specializ
Slide 14: M&A Growth Strategy: M&A Pipeline
M&A GROWTH STRATEGY: SIGNIFICANT CONSOLIDATION UPSIDE M&A Pipeline Large universe of potential targets Current M&A Targets Active Targets in the pipeline Near-Term Priority Targets Identified 500+ 100+ ~25 ~5 Unlock Business Potential and Profit with Acquired Companies 10 14
Slide 15: Synergies
SYNERGIES Clear path to margin enhancement and free cash flow optimization Adjusted Free Cash Flow(1) Growth Adjusted FCF Margin(2) Outlook Adjusted Free Cash Flow is a non-GAAP financial measures. See “Non-GAAP Financial Measures” in the appendix for reconciliations to the most directly comparable
Slide 16: Sustainable Growth Executing the Plan
Adjusted EBITDA and Adjusted Free Cash Flow are non-GAAP financial measures. See “Non-GAAP Financial Measures” in the appendix for reconciliations to the most directly comparable financial measures calculated and presented in accordance with U.S. generally accepted accounting principles (“GAAP”). 20
Slide 17: Components of Adjusted EBITDA: Smart Capital Expenditures
Source: Company financials and management estimates. 2025E represents the Company’s outlook as of March 13, 2025 as shown on page 24 1) Adjusted Free Cash Flow defined as Adjusted EBITDA less Gross Capital Expenditures 2) Maintenance and Growth percentages for FY 2025 represent the current forecaste
Slide 18: Peer Adjusted Free Cash Flow Margin Comparisons
1) Adjusted Free Cash Flow Margin is defined as Adjusted EBITDA less Gross Capital Expenditures divided by Total Revenue 2) Uses midpoint of DTI's 2025 guidance and FY25 consensus estimates for peer group PEER ADJ. FREE CASH FLOW MARGIN(1) COMPARISONS 2024 Actual Tool recovery revenue Lost or damage
Slide 19: Valuation vs. Peer Returns
1) ROCE is defined as EBIT divided by Capital Employed (Total Assets - Total Current Liabilities) 2) EV/EBITDA multiples based on the Enterprise Value as of 3/13/2025 and FY 2024 reported EBITDA Valuation vs. Peer Returns 2024 Actual EV/EBITDA Multiple 8.97x 9.54x 4.40x 4.68x 3.33x 3.69x 7.16x 6.13x
Slide 20: New Geographic Segments
(RILLING TOOLS* INTERNATIONAL NEW GEOGRAPHIC SEGMENTS
Slide 21: Western Hemisphere Overview
Product Sales (Y/Y) 16% Product Sales (Q/Q) 10% Tool Rental (Y/Y) 6% Tool Rental (Q/Q) 16% WESTERN HEMISPHERE OVERVIEW Sustainable rental activity with major market share Over 60% of all drilling rigs in NA utilize DTI tools and equipment Presence across all major basins in North America A market le
Slide 22: Eastern Hemisphere Overview
Product Sales (Y/Y) 2,163% Product Sales (Q/Q) 495% Tool Rental (Y/Y) 413% Tool Rental (Q/Q) 446% Revenue Contribution YTD 2024 Sales(1) Product Rental Western $ 27.1M $ 116.5M Eastern $ 9.7M $ 3.5M 8% Product Service Lines Deployed Rental tools used in bottom hole assemblies (“BHA”) Subs, Stabilize
Slide 23: Eastern Hemisphere Expansion for a Global Footprint
EASTERN HEMISPHERE EXPANSION FOR A GLOBAL FOOTPRINT GLOBAL REVENUE SPLIT WESTERN | EASTERN HEMISPHERE ~1% ~8% ~18% ‘23 ‘24 ‘25 “Our global footprint creates powerful synergies in terms of tool deployment efficiencies, sales potential and technological development.” Aldo Rodriquez VP of Sales 23
Slide 24: 2025 Financial Outlook
1) Adjusted EBITDA and Adjusted Free Cash Flow are non-GAAP financial measures. See “Non-GAAP Financial Measures” in the appendix for reconciliations to the most directly comparable financial measures calculated and presented in accordance with U.S. generally accepted accounting principles (“GAAP”).
Slide 25: DTI's Differentiated Growth Strategy Creates a Compelling Investment Profile
DTI’S DIFFERENTIATED GROWTH STRATEGY Creates A Compelling Investment Profile 1 A Market Leader in Downhole Tools for the Oil & Gas Industry 2 Blue Chip Customers 3 Strategic Model Delivering Through-Cycle Outperformance 4 Proven Growth: Organic & M&A in Fragmented Industry 5 Strong Balance Sheet / L
Slide 26: Additional Information
(RILLING TOOLS* INTERNATIONAL ADDITIONAL INFORMATION
Slide 27: Organizational Structure and Insider Ownership
ORGANIZATIONAL STRUCTURE INSIDER OWNERSHIP Company Profile Ownership Profile as of 6/21/2023(1) Ticker: DTI (NASDAQ) Current Change Shares Outstanding 35,592,737 19.6% Market Capitalization $113 M 19.1% Shareholders’ Equity $222.4 M 35.3% Private Equity (PE) Ownership 42.4% (12.0)% Ownership Profile
Slide 28: Strategic Rationale: Deep Casing Tools
1) Deep Casing Tools merger closed on March 18, 2024 STRATEGIC RATIONALE DEEP CASING TOOLS(1) Adds to DTI’s technology platform Expands intellectual property portfolio by over 60 patents Accretive to DTI’s earnings and Adj. Free Cash Flow profile Adds strong international customer relationships ADNO
Slide 29: Strategic Rationale: Superior Drilling Products
1) Superior Drilling Products merger closed on August 1, 2024 STRATEGIC RATIONALE SUPERIOR DRILLING PRODUCTS(1) Enhances vertical integration of differentiated technology Cost savings on Drill-N-Ream® tool Synergies – eliminates duplicative public company costs Adds significant precision manufacturi
Slide 30: Strategic Rationale: European Drilling Projects and Titan Tools
1) European Drilling Projects merger closed on October 1, 2024 2) Titan Tools Services merger closed on January 2, 2025 STRATEGIC RATIONALE EUROPEAN DRILLING PROJECTS(1) DTI Enhances Technological Advancement & Global Expansion Efforts Adds key personnel, industry expertise and customer relationship
Slide 31: ESG & Safety Are Integral to Our Success
Governance Social (+Safety) Continuous evaluations and control measures to ensure minimization of waste Pursuing highest levels of operational proficiency to reduce rework, and use of chemicals and waste Actively promoting recycling including extensive rental tool recycling and refurbishment program
Slide 32: Overview of Directional Tool Rentals
Reduces drill string vibration and torque… Stabilizers Drill collars Adds weight to the BHA to increase rate of penetration (“ROP”) and reduce vibration… Subs & other equipment Variety of subs, crossovers and handling tools used in the drill string OVERVIEW OF DIRECTIONAL TOOL RENTALS KEY EQUIPMENT
Slide 33: Overview of Wellbore Optimization Tools
OVERVIEW OF WELLBORE OPTIMIZATION TOOLS PRODUCTS OFFERED Drill-N-Ream® (DNR) Wellbore Conditioning Tool 2023: Commercially launched Specialty tools division with focused field sales and service professionals providing rig site visits and customer service, enabling consistent product performance and
Slide 34: Overview of Premium Tools
OVERVIEW OF PREMIUM TOOLS KEY EQUIPMENT DTI offers a wide array of premium tubulars for drilling, workover and completion operations, API blowout preventers and pressure control accessories as well as a comprehensive suite of related handling tools Tubulars Drill Pipe – 2 to 5 inch API bottleneck, s
Slide 35: Other Products & Services
OTHER PRODUCTS & SERVICES Downhole Inspection Services Independent inspection services equipment of all DTI divisions and select external customers Critical to efficient operations Services across North America including network of six domestic and one Canadian inspection facilities Product Sales Ma
Slide 36: Financial Information
(RILLING TOOLS* INTERNATIONAL FINANCIAL INFORMATION
Slide 37: Full Year 2024 Income Statement
FULL YEAR 2024 INCOME STATEMENT 37
Slide 38: Fourth Quarter 2024 Income Statement
FOURTH QUARTER 2024 INCOME STATEMENT 38
Slide 39: Year End 2024 Balance Sheet
YEAR END 2024 BALANCE SHEET 39
Slide 40: Full Year 2024 Cash Flow Statement
FULL YEAR 2024 CASH FLOW STATEMENT 40
Slide 41: Reconciliation of Full Year 2024 Adjusted EBITDA
RECONCILIATION OF FULL YEAR 2024 ADJUSTED EBITDA 41
Slide 42: Reconciliation of Fourth Quarter 2024 Adjusted EBITDA
RECONCILIATION OF FOURTH QUARTER 2024 ADJUSTED EBITDA 42
Slide 43: Reconciliation of Full Year 2024 Adjusted Free Cash Flow
RECONCILIATION OF FULL YEAR 2024 ADJUSTED FREE CASH FLOW 43
Slide 44: Reconciliation of Fourth Quarter 2024 Adjusted Free Cash Flow
RECONCILIATION OF FOURTH QUARTER 2024 ADJUSTED FREE CASH FLOW 44
Slide 45: Reconciliation of Full Year 2024 Adjusted Net Income
RECONCILIATION OF FULL YEAR 2024 ADJUSTED NET INCOME 45
Slide 46: Reconciliation of Fourth Quarter 2024 Adjusted Net Income
RECONCILIATION OF FOURTH QUARTER 2024 ADJUSTED NET INCOME 46
Slide 47: Reconciliation of 2025 Outlook
RECONCILIATION OF 2025 OUTLOOK 47
Slide 48: Reconciliation of 2025 Outlook
RECONCILIATION OF 2025 OUTLOOK 48
Drilling Tools International — FY2024 Earnings Presentation on 6ix