Drilling Tools International第二季收入3810萬美元 自由現金流顯著改善 重申全年指引

EX-99.1
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dti-ex99_1.htm
EX-99.1

 
 EX-99.1
 
 
 

 Exhibit 99.1 
 

 
 
 
 
 
 

 
 

 

 NEWS RELEASE  
 

 

  
Drilling Tools International Corp. Reports 2026 Second Quarter Results
 
Reaffirms 2026 Outlook
 
HOUSTON — August 6, 2026 — 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 results for the three months ended June 30, 2026.
 
For the second quarter of 2026, DTI generated total consolidated revenue of $38.1 million. Second quarter Tool Rental revenue was $29.6 million, and Product Sales revenue totaled approximately $8.5 million. Net Loss attributable to common stockholders for the second quarter was approximately $1.8 million, or a loss of $0.05 per share. Adjusted Net Loss(1) was $575,000 and Adjusted EPS(1) for the second quarter was a loss of $0.02 per share. Second quarter Adjusted EBITDA(1) was $8.4 million and Adjusted Free Cash Flow(1)(2) was $4.1 million. As of June 30, 2026, DTI had $2.5 million of cash and cash equivalents, and Net Debt(1) of $51.7 million.
 
Wayne Prejean, Chairman of the Board and Chief Executive Officer, stated, “I’m pleased with our performance in the second quarter, which reflects the resilience of our operations, the benefits of our geographic diversification and the durability of our unique platform. Despite softer North American land activity and disruption in the Middle East, we delivered strong results, most notably our Adjusted Free Cash Flow, which improved considerably on both a sequential and year-over-year basis. We are building solid momentum, and it’s evident that the strength of our differentiated business model and disciplined execution is creating earnings power that will only grow as activity improves. 
 
“As we look forward, we are encouraged by early signs of recovery in several of the key regions in which we operate. The U.S. land rig count built steadily through the second quarter, adding more than 20 rigs in June alone to finish above the prior-year June level, and added nearly 19 more in July, with additions of bottom-hole assembly rigs, the largest part of our business, outpacing that broader market growth. In Canada, the softness that weighed on activity early in the quarter has abated, with the rig count building through June to finish the quarter above prior-year levels and pointing to a firming market as the year progresses. In Europe and the Gulf of America, our ClearPath stabilizer technology is gaining real traction in offshore markets, where the highest-spec operators are placing a premium on its performance. New awards related to this cutting-edge technology are expected to drive a material step-up in our European contribution in the second half of the year, and we expect these awards to represent the first of many wins to come. In the Middle East, our targeted footprint and specialized product lines have kept demand for our tools steady through a disruptive period, leaving substantial opportunities still ahead of us. Given our confidence in a strong second half to 2026, we are reaffirming our full-year guidance ranges, which represent growth at the midpoint compared to our 2025 results.
 
"We are excited about the future and believe we are well positioned to benefit from recent activity trends. We have built a solid foundation, further strengthened by our recent acquisitions, as we continue to penetrate new markets and grow throughout the Eastern Hemisphere. Our differentiated technology portfolio is enabling us to win new business on improving commercial terms, and price-focused customers are returning to DTI as they come to appreciate the value we deliver in the field. As we have done successfully in the past, we will continue to strategically evaluate growth opportunities, including accretive acquisitions that meet our stringent return profile, but always with a disciplined focus on profitable growth and lasting value creation for our shareholders,” concluded Prejean.
 
2026 Full Year Outlook 
 

 
 
 
 
 
 
 
 
 
 

 
 Revenue

  

 $155 million

  

 –

  

 $170 million

 

 
 Adjusted EBITDA(1)

  

 $35 million

  

 –

  

 $45 million

 

 
 Adjusted EBITDA Margin(1)

  

 23%

  

 –

  

 26%

 

 
 Adjusted Free Cash Flow(1)(2)

  

 $17 million

  

 –

  

 $22 million

 

  

 1

 
 

  
 
(1)Adjusted Net Income (Loss), Adjusted Basic EPS, Adjusted Diluted EPS, Adjusted EBITDA, Adjusted EBITDA Margin, Net Debt, and Adjusted Free Cash Flow are non-GAAP financial measures. See “Non-GAAP Financial Measures” at the end of this release for a discussion of reconciliations to the most directly comparable financial measures calculated and presented in accordance with U.S. generally accepted accounting principles (“GAAP”). 

(2)Adjusted Free Cash Flow is defined as Adjusted EBITDA less Gross Capital Expenditures.

 
 
 
2026 Second Quarter Conference Call Information
 
DTI's 2026 second quarter conference call can be accessed live via dial-in or webcast on Friday, August 7, 2026 at 10:00 a.m. Eastern Time (9:00 a.m. Central Time) by dialing 201-389-0869 and asking for the DTI call at least 10 minutes prior to the start time, or via live webcast by logging onto the webcast at this URL address: https://investors.drillingtools.com/news-events/events. An audio replay will be available through August 14, 2026 by dialing 201-612-7415 and using passcode 13761577#. Also, an archive of the webcast will be available shortly after the call at https://investors.drillingtools.com/news-events/events for 90 days. Please submit any questions for management prior to the call via email to [email protected].
 
About Drilling Tools International Corp. 
 
DTI is a Houston, Texas based leading oilfield services company that manufactures and rents downhole drilling tools used in horizontal and directional drilling of oil and natural gas wells. With roots dating back to 1984, DTI operates from 15 service and support centers across North America and maintains 11 international service and support centers across the EMEA and APAC regions. To learn more about DTI, please visit: www.drillingtools.com. 
 
Contact: 
DTI Investor Relations 
Ken Dennard / Natalie Hairston
[email protected] 
Forward-Looking Statements 
 
This press release may include, and oral statements made from time to time by representatives of the Company may include, “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Statements other than statements of historical fact included in this press release are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward looking. These forward-looking statements include, but are not limited to, statements regarding DTI and its management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Forward-looking statements in this press release may include, for example, statements about: (1) the demand for DTI’s products and services, which is influenced by the general level activity in the oil and gas industry; (2) DTI’s ability to retain its customers, particularly those that contribute to a large portion of its revenue; (3) DTI’s ability to employ and retain a sufficient number of skilled and qualified workers, including its key personnel; (4) DTI’s ability to source tools and raw materials at a reasonable cost; (5) DTI’s ability to market its services in a competitive industry; (6) DTI’s ability to execute, integrate and realize the benefits of acquisitions, and manage the resulting growth of its business; (7) potential liability for claims arising from damage or harm caused by the operation of DTI’s tools, or otherwise arising from the dangerous activities that are inherent in the oil and gas industry; (8) DTI’s ability to obtain additional capital; (9) potential political, regulatory, economic and social disruptions in the countries in which DTI conducts business, including changes in tax laws or tax rates; (10) DTI’s dependence on its information technology systems, in particular Customer Order Management Portal and Support System, for the efficient operation of DTI’s business; (11) DTI’s ability to comply with applicable laws, regulations and rules, including those related to the environment, greenhouse gases and climate change; (12) DTI’s ability to maintain an effective system of disclosure controls and internal control over financial reporting; (13) the potential for volatility in the market price of DTI’s common stock; (14) the impact of increased legal, accounting, administrative and other costs incurred as a public company, including the impact of possible shareholder litigation; (15) the potential 

 2

 
 

 for issuance of additional shares of DTI’s common stock or other equity securities; (16) DTI’s ability to maintain the listing of its common stock on Nasdaq; and (17) other risks and uncertainties described from time to time in DTI’s most recent Forms 10-K, 10-Q and 8-K filed with or furnished to the Securities and Exchange Commission (the “SEC”). You should carefully consider the risks and uncertainties including those described in Part I, Item 1A – “Risk Factors” of our Annual Report on Form 10-K filed on March 6, 2026 and in comparable “Risk Factor” sections of our Quarterly Reports on Form 10-Q filed after such Form 10-K. Such forward-looking statements are based on the beliefs of management of DTI, as well as assumptions made by, and information currently available to DTI’s management and are subject to numerous conditions, many of which are beyond the control of DTI. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed in DTI’s most recent Forms 10-K, 10-Q and 8-K filed with or furnished to the SEC. All subsequent written or oral forward-looking statements attributable to the Company or persons acting on its behalf are qualified in their entirety by this paragraph. The Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law. 

 3

 
 

  
 

 
 
 
 
 
 
 
 
 
 
 
 

 
 Drilling Tools International Corp.

  

 

 
 Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

  

 

 
 (In thousands of U.S. dollars and rounded)

  

 

 
  

  

  

  

  

  

  

 

 
 

  

 Three Months Ended June 30,

  

 

 
  

  

 2026

  

  

 2025

  

 

 
 Revenue, net:

  

  

  

  

  

  

 

 
 Tool rental

  

 $

 29,572

  

  

 $

 32,756

  

 

 
 Product sale

  

  

 8,500

  

  

  

 6,665

  

 

 
 Total revenue, net

  

  

 38,072

  

  

  

 39,421

  

 

 
 Costs and other deductions:

  

  

  

  

  

  

 

 
 Cost of tool rental revenue

  

  

 7,655

  

  

  

 7,402

  

 

 
 Cost of product sale revenue

  

  

 3,258

  

  

  

 2,494

  

 

 
 Selling, general, and administrative expense

  

  

 19,896

  

  

  

 21,023

  

 

 
 Depreciation and amortization expense

  

  

 6,916

  

  

  

 6,830

  

 

 
 Interest expense, net

  

  

 1,111

  

  

  

 1,336

  

 

 
 Loss (gain) on asset disposal

  

  

 (2

 )

  

  

 85

  

 

 
 Goodwill impairment

  

  

 —

  

  

  

 —

  

 

 
 Other operating and non-operating expense, net

  

  

 1,106

  

  

  

 1,912

  

 

 
 Total costs and other deductions

  

  

 39,940

  

  

  

 41,082

  

 

 
 Income (loss) before income tax expense

  

  

 (1,868

 )

  

  

 (1,661

 )

 

 
 Income tax benefit (expense)

  

  

 76

  

  

  

 (746

 )

 

 
 Net income (loss)

  

 $

 (1,792

 )

  

 $

 (2,407

 )

 

 
 Less: Net income (loss) attributable to non-controlling interest

  

  

 (4

 )

  

  

 —

  

 

 
 Net income (loss) attributable to Drilling Tools International shareholders

  

 $

 (1,788

 )

  

 $

 (2,407

 )

 

 
 Basic earnings (loss) per share

  

 $

 (0.05

 )

  

 $

 (0.07

 )

 

 
 Diluted earnings (loss) per share

  

 $

 (0.05

 )

  

 $

 (0.07

 )

 

 
 Basic weighted-average common shares outstanding

  

  

 35,276,155

  

  

  

 35,573,749

  

 

 
 Diluted weighted-average common shares outstanding

  

  

 35,276,155

  

  

  

 35,573,749

  

 

 
 Comprehensive income (loss):

  

  

  

  

  

  

 

 
 Net income (loss)

  

 $

 (1,792

 )

  

 $

 (2,407

 )

 

 
 Foreign currency translation adjustment, net of tax

  

  

 131

  

  

  

 2,199

  

 

 
 Comprehensive income (loss):

  

  

 (1,661

 )

  

  

 (208

 )

 

 
 Less: comprehensive income (loss) attributable to non-controlling interest

  

  

 (4

 )

  

  

 —

  

 

 
 Comprehensive income (loss) attributable to Drilling Tools International shareholders

  

 $

 (1,657

 )

  

 $

 (208

 )

 

  
 

 4

 
 

 
 
 
 
 
 
 
 
 
 
 
 
 

 
 Drilling Tools International Corp.

  

 

 
 Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

  

 

 
 (In thousands of U.S. dollars and rounded)

  

 

 
  

  

  

  

  

  

  

 

 
 

  

 Six months ended June 30,

  

 

 
  

  

 2026

  

  

 2025

  

 

 
 Revenue, net:

  

  

  

  

  

  

 

 
 Tool rental

  

 $

 58,482

  

  

 $

 67,289

  

 

 
 Product sale

  

  

 17,549

  

  

  

 15,012

  

 

 
 Total revenue, net

  

  

 76,031

  

  

  

 82,301

  

 

 
 Costs and other deductions:

  

  

  

  

  

  

 

 
 Cost of tool rental revenue

  

  

 15,405

  

  

  

 15,090

  

 

 
 Cost of product sale revenue

  

  

 6,620

  

  

  

 6,051

  

 

 
 Selling, general, and administrative expense

  

  

 40,122

  

  

  

 42,633

  

 

 
 Depreciation and amortization expense

  

  

 13,843

  

  

  

 13,552

  

 

 
 Interest expense, net

  

  

 2,124

  

  

  

 2,645

  

 

 
 Loss (gain) on asset disposal

  

  

 (2

 )

  

  

 72

  

 

 
 Goodwill impairment

  

  

 —

  

  

  

 1,901

  

 

 
 Other operating and non-operating expense, net

  

  

 1,882

  

  

  

 3,846

  

 

 
 Total costs and other deductions

  

  

 79,994

  

  

  

 85,790

  

 

 
 Income (loss) before income tax expense

  

  

 (3,963

 )

  

  

 (3,489

 )

 

 
 Income tax benefit (expense)

  

  

 633

  

  

  

 (587

 )

 

 
 Net income (loss)

  

 $

 (3,330

 )

  

 $

 (4,076

 )

 

 
 Less: Net income (loss) attributable to non-controlling interest

  

  

 (2

 )

  

  

 —

  

 

 
 Net income (loss) attributable to Drilling Tools International shareholders

  

 $

 (3,328

 )

  

 $

 (4,076

 )

 

 
 Basic earnings (loss) per share

  

 $

 (0.09

 )

  

 $

 (0.11

 )

 

 
 Diluted earnings (loss) per share

  

 $

 (0.09

 )

  

 $

 (0.11

 )

 

 
 Basic weighted-average common shares outstanding

  

  

 35,202,327

  

  

  

 35,583,139

  

 

 
 Diluted weighted-average common shares outstanding

  

  

 35,202,327

  

  

  

 35,583,139

  

 

 
 Comprehensive income (loss):

  

  

  

  

  

  

 

 
 Net income (loss)

  

 $

 (3,330

 )

  

 $

 (4,076

 )

 

 
 Foreign currency translation adjustment, net of tax

  

  

 (623

 )

  

  

 3,141

  

 

 
 Comprehensive income (loss):

  

  

 (3,953

 )

  

  

 (935

 )

 

 
 Less: comprehensive income (loss) attributable to non-controlling interest

  

  

 (2

 )

  

  

 —

  

 

  
 

 5

 
 

 
 
 
 
 
 
 
 
 
 
 
 
 

 
 Drilling Tools International Corp.

  

 

 
 Condensed Consolidated Balance Sheets (Unaudited)

  

 

 
 (In thousands of U.S. dollars and rounded)

  

 

 
  

  

 

 
 

  

 June 30,

  

  

 December 31,

  

 

 
  

  

 2026

  

  

 2025

  

 

 
 ASSETS

  

  

  

  

  

  

 

 
 Current assets

  

  

  

  

  

  

 

 
 Cash

  

 $

 2,520

  

  

 $

 3,648

  

 

 
 Accounts receivable, net

  

  

 43,494

  

  

  

 37,683

  

 

 
 Related party note receivable, current

  

  

 1,541

  

  

  

 1,541

  

 

 
 Inventories

  

  

 20,160

  

  

  

 18,149

  

 

 
 Prepaid expenses and other current assets

  

  

 6,073

  

  

  

 3,866

  

 

 
 Total current assets

  

  

 73,788

  

  

  

 64,887

  

 

 
 Property, plant and equipment, net

  

  

 71,815

  

  

  

 72,602

  

 

 
 Operating lease right-of-use asset

  

  

 24,458

  

  

  

 25,181

  

 

 
 Intangible assets, net

  

  

 38,143

  

  

  

 39,674

  

 

 
 Goodwill, net

  

  

 14,543

  

  

  

 14,616

  

 

 
 Deferred financing costs, net

  

  

 512

  

  

  

 468

  

 

 
 Related party note receivable, less current portion

  

  

 4,019

  

  

  

 3,836

  

 

 
 Deposits and other long-term assets

  

  

 1,313

  

  

  

 917

  

 

 
 Total assets

  

 $

 228,591

  

  

 $

 222,181

  

 

 
 LIABILITIES AND SHAREHOLDERS' EQUITY

  

  

  

  

  

  

 

 
 Current liabilities

  

  

  

  

  

  

 

 
 Accounts payable

  

 $

 14,544

  

  

 $

 9,785

  

 

 
 Accrued expenses and other current liabilities

  

  

 8,759

  

  

  

 10,711

  

 

 
 Current portion of operating lease liabilities

  

  

 4,639

  

  

  

 4,335

  

 

 
 Current maturities of long-term debt

  

  

 5,932

  

  

  

 5,989

  

 

 
 Total current liabilities

  

  

 33,874

  

  

  

 30,820

  

 

 
 Operating lease liabilities, less current portion

  

  

 20,552

  

  

  

 21,494

  

 

 
 Revolving line of credit

  

  

 39,330

  

  

  

 25,000

  

 

 
 Long-term debt, less current portion

  

  

 8,957

  

  

  

 14,827

  

 

 
 Deferred tax liabilities, net

  

  

 6,157

  

  

  

 7,167

  

 

 
 Total liabilities

  

  

 108,870

  

  

  

 99,308

  

 

 
 Commitments and contingencies

  

  

  

  

  

  

 

 
 Shareholders' equity

  

  

  

  

  

  

 

 
 Common stock, $0.0001 par value, shares authorized 125,000,000; issued 36,057,592 and 35,661,297, respectively; outstanding 35,282,224 and 35,156,128, respectively

  

  

 4

  

  

  

 4

  

 

 
 Less: Treasury stock at cost, 775,368 and 505,169 shares, respectively

  

  

 (2,192

 )

  

  

 (1,265

 )

 

 
 Additional paid-in-capital

  

  

 132,528

  

  

  

 130,801

  

 

 
 Accumulated deficit

  

  

 (10,670

 )

  

  

 (7,343

 )

 

 
 Accumulated other comprehensive income (loss)

  

  

 41

  

  

  

 664

  

 

 
 Total Drilling Tools International shareholder's equity

  

  

 119,711

  

  

  

 122,861

  

 

 
 Non-controlling interest

  

  

 10

  

  

  

 12

  

 

 
 Total Equity

  

  

 119,721

  

  

  

 122,873

  

 

 
 Total liabilities and shareholders' equity

  

 $

 228,591

  

  

 $

 222,181

  

 

  
 

 6

 
 

 
 
 
 
 
 
 
 
 
 
 
 
 

 
 Drilling Tools International Corp.

  

 

 
 Condensed Consolidated Statements of Cash Flows (Unaudited)

  

 

 
 (In thousands of U.S. dollars and rounded)

  

 

 
  

  

  

  

  

  

  

 

 
 

  

 For the six months ended June 30,

  

 

 
  

  

 2026

  

  

 2025

  

 

 
 Cash flows provided (used in) by operating activities:

  

  

  

  

  

  

 

 
 Net income (loss)

  

 $

 (3,330

 )

  

 $

 (4,076

 )

 

 
 Adjustments to reconcile net income (loss) to net cash from operating activities:

  

  

  

  

  

  

 

 
 Depreciation and amortization

  

  

 13,843

  

  

  

 13,552

  

 

 
 Amortization of deferred financing costs

  

  

 85

  

  

  

 174

  

 

 
 Non-cash lease expense

  

  

 2,611

  

  

  

 2,466

  

 

 
 Unrealized loss (gain) on currency translation

  

  

 (389

 )

  

  

 567

  

 

 
 Write off of excess and obsolete inventory

  

  

 11

  

  

  

 510

  

 

 
 Write off of excess and obsolete property and equipment

  

  

 —

  

  

  

 195

  

 

 
 Provision (recovery) for credit losses

  

  

 241

  

  

  

 356

  

 

 
 Deferred tax expense (benefit)

  

  

 (1,195

 )

  

  

 (1,766

 )

 

 
 Loss (gain) on sale of property

  

  

 (2

 )

  

  

 72

  

 

 
 Gain on sale of lost-in-hole equipment

  

  

 (7,249

 )

  

  

 (5,454

 )

 

 
 Stock-based compensation expense

  

  

 1,627

  

  

  

 1,183

  

 

 
 Interest income on related party note receivable

  

  

 (184

 )

  

  

 (182

 )

 

 
 Goodwill impairment

  

  

 —

  

  

  

 1,901

  

 

 
 Changes in operating assets and liabilities:

  

  

  

  

  

  

 

 
 Accounts receivable, net

  

  

 (6,159

 )

  

  

 453

  

 

 
 Prepaid expenses and other current assets

  

  

 (3,128

 )

  

  

 670

  

 

 
 Inventories

  

  

 (797

 )

  

  

 1,291

  

 

 
 Operating lease liabilities

  

  

 (2,446

 )

  

  

 (2,250

 )

 

 
 Accounts payable

  

  

 3,485

  

  

  

 (3,963

 )

 

 
 Accrued expenses and other current liabilities

  

  

 (2,490

 )

  

  

 (1,073

 )

 

 
 Net cash flows provided by (used in) operating activities

  

  

 (5,466

 )

  

  

 4,626

  

 

 
 Cash flows provided by (used in) investing activities:

  

  

  

  

  

  

 

 
 Acquisition of a business, net of cash acquired

  

  

 —

  

  

  

 (5,622

 )

 

 
 Purchase of intangible assets

  

  

 (762

 )

  

  

 (1,095

 )

 

 
 Proceeds from sale of property, plant, and equipment

  

  

 —

  

  

  

 38

  

 

 
 Purchase of property, plant, and equipment

  

  

 (11,916

 )

  

  

 (12,594

 )

 

 
 Proceeds from sale of lost-in-hole equipment

  

  

 8,992

  

  

  

 7,132

  

 

 
 Net cash flows provided by (used in) investing activities

  

  

 (3,686

 )

  

  

 (12,141

 )

 

 
 Cash flows provided by (used in) financing activities:

  

  

  

  

  

  

 

 
 Proceeds from exercise of stock options

  

  

 101

  

  

  

 —

  

 

 
 Payment of deferred financing costs

  

  

 (129

 )

  

  

 —

  

 

 
 Purchase of treasury stock

  

  

 (706

 )

  

  

 (608

 )

 

 
 Repayment of term loan

  

  

 (5,163

 )

  

  

 (2,500

 )

 

 
 Repayment of promissory note

  

  

 (462

 )

  

  

 (442

 )

 

 
 Proceeds from revolving line of credit

  

  

 35,789

  

  

  

 33,789

  

 

 
 Repayment on revolving line of credit

  

  

 (21,459

 )

  

  

 (27,791

 )

 

 
 Net cash flows provided by financing activities

  

  

 7,971

  

  

  

 2,448

  

 

 
 Effect of changes in foreign exchange rates

  

  

 53

  

  

  

 27

  

 

 
 Net change in cash

  

  

 (1,128

 )

  

  

 (5,040

 )

 

 
 Cash at beginning of period

  

  

 3,648

  

  

  

 6,185

  

 

 
 Cash at end of period

  

 $

 2,520

  

  

 $

 1,145

  

 

  
 

 7

 
 

 Non-GAAP Financial Measures 
 
This release includes Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Free Cash Flow, Adjusted Free Cash Flow Margin, Net Debt, Adjusted Basic Earnings (Loss) Per Share, Adjusted Diluted Earnings (Loss) Per Share and Adjusted Net Income (Loss) measures. Each of these metrics is a “non-GAAP financial measure” as defined in Regulation G of the Securities Exchange Act of 1934. 
 
Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies. Adjusted EBITDA is not a measure of net earnings or cash flows as determined by GAAP. We define Adjusted EBITDA as net earnings (loss) before interest, taxes, depreciation and amortization, further adjusted for (i) goodwill and/or long-lived asset impairment charges, (ii) stock-based compensation expense, (iii) restructuring charges, (iv) transaction and integration costs related to acquisitions and (v) other expenses or charges to exclude certain items that we believe are not reflective of ongoing performance of our business. 
 
We believe Adjusted EBITDA and Adjusted EBITDA Margin are useful because they allow us to supplement the GAAP measures in order to more effectively evaluate our operating performance and compare the results of our operations from period to period without regard to our financing methods or capital structure. We exclude the items listed above in arriving at Adjusted EBITDA because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income as determined in accordance with GAAP, or as an indicator of our operating performance or liquidity. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are components of Adjusted EBITDA. Our computations of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. 
 
Adjusted Free Cash Flow is a supplemental non-GAAP financial measure, and we define Adjusted Free Cash Flow as Adjusted EBITDA less Gross Capital Expenditures. We use Adjusted Free Cash Flow as a financial performance measure for planning, forecasting, and evaluating our performance. We believe that Adjusted Free Cash Flow is useful to enable investors and others to perform comparisons of current and historical performance of the Company. As a performance measure, rather than a liquidity measure, the most closely comparable GAAP measure is net income (loss). 
 
Net Debt is a supplemental non-GAAP financial measure, and we define Net Debt as total debt less cash and cash equivalents. We use Net Debt to determine our outstanding debt obligations that would not be readily satisfied by our cash and cash equivalents on hand. We believe this metric is useful to analysts and investors in determining our leverage position since we have the ability to, and may decide to, use a portion of our cash and cash equivalents to reduce debt. As of June 30, 2026, Net Debt was $51.7 million, calculated as current maturities of long-term debt of $5.9 million, revolving line of credit of $39.3 million and long-term debt, less current portion of $9.0 million, less cash and cash equivalents of $2.5 million.
 
We define Adjusted Net Income (Loss) as consolidated net income (loss) adjusted for (i) goodwill and/or long-lived asset impairment charges, (ii) restructuring charges, (iii) transaction and integration costs related to acquisitions, (iv) income tax expense (or loss) which is calculated by applying a 25% effective tax rate to adjusted pre-tax income (or loss), and (v) other expenses or charges to exclude certain items that we believe are not reflective of the ongoing performance of our business. We believe Adjusted Net Income (Loss) is useful because it allows us to exclude certain items in evaluating our operating performance. 
We define Adjusted Basic Earnings (Loss) and Adjusted Diluted Earnings (Loss) per share as the quotient of adjusted net income (loss) and diluted weighted average common shares. We believe that Adjusted Diluted Earnings (Loss) per share provides useful information to investors because it allows us to exclude non-recurring items in evaluating our operating performance on a diluted per share basis. 
 
This release also includes certain projections of non-GAAP financial measures. The reconciliations of estimated Adjusted EBITDA and estimated Adjusted Free Cash Flow to estimated net income (loss) include estimates of interest expense, income tax expense, depreciation and amortization, management fees, other expense, stock option exercise, goodwill impairment, transaction expense, and capital expenditures, which are difficult to predict and estimate and are primarily dependent on future events. 
 
The following tables and narrative reconciliations of the non-GAAP financial measures of Adjusted EBITDA, Adjusted Free Cash Flow, Net Debt, and Adjusted Net Income to the most directly comparable GAAP financial measures for the periods indicated: 
 

 8

 
 

 
 
 
 
 
 
 
 
 
 
 
 
 

 
 Drilling Tools International Corp.

  

 

 
 Reconciliation of GAAP to Non-GAAP Measures (Unaudited)

  

 

 
 (In thousands of U.S. dollars and rounded)

  

 

 
  

  

 

 
 

  

 Three months ended June 30,

  

 

 
  

  

 2026

  

  

 2025

  

 

 
 Net income (loss)

  

 $

 (1,792

 )

  

 $

 (2,407

 )

 

 
 Add (deduct):

  

  

  

  

  

  

 

 
 Income tax expense (benefit)

  

  

 (76

 )

  

  

 746

  

 

 
 Depreciation and amortization

  

  

 6,916

  

  

  

 6,830

  

 

 
 Interest expense, net

  

  

 1,111

  

  

  

 1,336

  

 

 
 Stock option expense

  

  

 908

  

  

  

 642

  

 

 
 Management fees

  

  

 188

  

  

  

 188

  

 

 
 Loss (gain) on sale of property

  

  

 (1

 )

  

  

 85

  

 

 
 Goodwill impairment

  

  

 —

  

  

  

 —

  

 

 
 Transaction expense

  

  

 832

  

  

  

 215

  

 

 
 Other operating and non-operating expense, net

  

  

 272

  

  

  

 1,697

  

 

 
 Adjusted EBITDA

  

 $

 8,358

  

  

 $

 9,332

  

 

 
  

  

  

  

  

  

  

 

 
 

  

 Six months ended June 30,

  

 

 
  

  

 2026

  

  

 2025

  

 

 
 Net income (loss)

  

 $

 (3,330

 )

  

 $

 (4,076

 )

 

 
 Add (deduct):

  

  

  

  

  

  

 

 
 Income tax expense (benefit)

  

  

 (633

 )

  

  

 587

  

 

 
 Depreciation and amortization

  

  

 13,843

  

  

  

 13,552

  

 

 
 Interest expense, net

  

  

 2,124

  

  

  

 2,645

  

 

 
 Stock option expense

  

  

 1,627

  

  

  

 1,183

  

 

 
 Management fees

  

  

 375

  

  

  

 375

  

 

 
 Loss (gain) on sale of property

  

  

 (2

 )

  

  

 71

  

 

 
 Goodwill impairment

  

  

 —

  

  

  

 1,901

  

 

 
 Transaction expense

  

  

 1,234

  

  

  

 947

  

 

 
 Other operating and non-operating expense, net

  

  

 647

  

  

  

 2,900

  

 

 
 Adjusted EBITDA

  

 $

 15,885

  

  

 $

 20,085

  

 

  
 
 

 9

 
 

 
 
 
 
 
 
 
 
 
 
 
 
 

 
 Drilling Tools International Corp.

  

 

 
 Reconciliation of GAAP to Non-GAAP Measures (Unaudited)

  

 

 
 (In thousands of U.S. dollars and rounded)

  

 

 
  

  

  

  

  

  

  

 

 
 

  

 Three months ended June 30,

  

 

 
  

  

 2026

  

  

 2025

  

 

 
 Net income (loss)

  

 $

 (1,792

 )

  

 $

 (2,407

 )

 

 
 Add (deduct):

  

  

  

  

  

  

 

 
 Income tax expense (benefit)

  

  

 (76

 )

  

  

 746

  

 

 
 Depreciation and amortization

  

  

 6,916

  

  

  

 6,830

  

 

 
 Interest expense, net

  

  

 1,111

  

  

  

 1,336

  

 

 
 Stock option expense

  

  

 908

  

  

  

 642

  

 

 
 Management fees

  

  

 188

  

  

  

 188

  

 

 
 Loss (gain) on sale of property

  

  

 (1

 )

  

  

 85

  

 

 
 Goodwill impairment

  

  

 —

  

  

  

 —

  

 

 
 Transaction expense

  

  

 832

  

  

  

 215

  

 

 
 Other operating and non-operating expense, net

  

  

 272

  

  

  

 1,697

  

 

 
 Capital expenditures

  

  

 (4,229

 )

  

  

 (7,551

 )

 

 
 Adjusted Free Cash Flow

  

 $

 4,129

  

  

 $

 1,781

  

 

 
  

  

  

  

  

  

  

 

 
 

  

 Six months ended June 30,

  

 

 
  

  

 2026

  

  

 2025

  

 

 
 Net income (loss)

  

 $

 (3,330

 )

  

 $

 (4,076

 )

 

 
 Add (deduct):

  

  

  

  

  

  

 

 
 Income tax expense (benefit)

  

  

 (633

 )

  

  

 587

  

 

 
 Depreciation and amortization

  

  

 13,843

  

  

  

 13,552

  

 

 
 Interest expense, net

  

  

 2,124

  

  

  

 2,645

  

 

 
 Stock option expense

  

  

 1,627

  

  

  

 1,183

  

 

 
 Management fees

  

  

 375

  

  

  

 375

  

 

 
 Loss (gain) on sale of property

  

  

 (2

 )

  

  

 71

  

 

 
 Goodwill impairment

  

  

 —

  

  

  

 1,901

  

 

 
 Transaction expense

  

  

 1,234

  

  

  

 947

  

 

 
 Other operating and non-operating expense, net

  

  

 647

  

  

  

 2,900

  

 

 
 Capital expenditures

  

  

 (11,916

 )

  

  

 (12,594

 )

 

 
 Adjusted Free Cash Flow

  

 $

 3,969

  

  

 $

 7,491

  

 

  
 

 10

 
 

 
 
 
 
 
 
 
 
 
 
 
 
 

 
 Drilling Tools International Corp.

  

 

 
 Reconciliation of GAAP to Non-GAAP Measures (Unaudited)

  

 

 
 (In thousands of U.S. dollars and rounded)

  

 

 
  

  

 

 
 

  

 Three months ended June 30,

  

 

 
  

  

 2026

  

  

 2025

  

 

 
 Net income (loss)

  

 $

 (1,792

 )

  

 $

 (2,407

 )

 

 
 Add (deduct):

  

  

  

  

  

  

 

 
 Transaction expense

  

  

 832

  

  

  

 215

  

 

 
 Goodwill impairment

  

  

 —

  

  

  

 —

  

 

 
 Restructuring charges

  

  

 48

  

  

  

 629

  

 

 
 Software implementation

  

  

 222

  

  

  

 316

  

 

 
 Income tax expense (benefit)

  

  

 (76

 )

  

  

 746

  

 

 
 Adjusted Income Before Tax

  

 $

 (766

 )

  

 $

 (501

 )

 

 
 Adjusted Income tax expense (benefit)

  

  

 (192

 )

  

  

 125

  

 

 
 Adjusted Net Income (loss)

  

 $

 (575

 )

  

 $

 (626

 )

 

 
 Adjusted Basic earnings (loss) per share

  

 $

 (0.02

 )

  

 $

 (0.02

 )

 

 
 Adjusted Diluted earnings (loss) per share

  

 $

 (0.02

 )

  

 $

 (0.02

 )

 

 
 Basic weighted-average common shares outstanding

  

  

 35,276,155

  

  

  

 35,573,749

  

 

 
 Diluted weighted-average common shares outstanding

  

  

 35,276,155

  

  

  

 35,573,749

  

 

 
  

  

  

  

  

  

  

 

 
 

  

 Six months ended June 30,

  

 

 
  

  

 2026

  

  

 2025

  

 

 
 Net income (loss)

  

 $

 (3,330

 )

  

 $

 (4,076

 )

 

 
 Transaction expense

  

  

 1,234

  

  

  

 947

  

 

 
 Goodwill impairment

  

  

 —

  

  

  

 1,901

  

 

 
 Restructuring charges

  

  

 262

  

  

  

 998

  

 

 
 Software implementation

  

  

 353

  

  

  

 448

  

 

 
 Income tax expense (benefit)

  

  

 (633

 )

  

  

 587

  

 

 
 Adjusted Income Before Tax

  

 $

 (2,114

 )

  

 $

 805

  

 

 
 Adjusted Income tax expense (benefit)

  

  

 (529

 )

  

  

 201

  

 

 
 Adjusted Net Income (loss)

  

 $

 (1,586

 )

  

 $

 604

  

 

 
 Adjusted Basic earnings (loss) per share

  

 $

 (0.05

 )

  

 $

 0.02

  

 

 
 Adjusted Diluted earnings (loss) per share

  

 $

 (0.05

 )

  

 $

 0.02

  

 

 
 Basic weighted-average common shares outstanding

  

  

 35,202,327

  

  

  

 35,583,139

  

 

 
 Diluted weighted-average common shares outstanding

  

  

 35,202,327

  

  

  

 35,622,914

  

 

  
 

 11

 
 

 
 
 
 
 
 
 
 
 
 
 
 
 

 
 Drilling Tools International Corp.

  

 

 
 Reconciliation of Estimated Consolidated Net Income (Loss) to Adjusted EBITDA

  

 

 
 (In thousands of U.S. dollars and rounded)

  

 

 
 (Unaudited)

  

 

 
  

  

  

  

  

  

  

 

 
 

  

 Twelve Months Ended December 31, 2026

  

 

 
 

  

 Low

  

  

 High

  

 

 
 Net income (loss)

  

 $

 (500

 )

  

 $

 1,000

  

 

 
 Add (deduct):

  

  

  

  

  

  

 

 
 Interest expense, net

  

  

 3,500

  

  

  

 4,500

  

 

 
 Income tax expense (benefit)

  

  

 —

  

  

  

 1,200

  

 

 
 Depreciation and amortization

  

  

 27,500

  

  

  

 30,000

  

 

 
 Management fees

  

  

 700

  

  

  

 800

  

 

 
 Other expense

  

  

 800

  

  

  

 1,500

  

 

 
 Stock option expense

  

  

 3,000

  

  

  

 4,000

  

 

 
 Goodwill impairment

  

  

 —

  

  

  

 —

  

 

 
 Transaction expense

  

  

 —

  

  

  

 2,000

  

 

 
 Adjusted EBITDA

  

 $

 35,000

  

  

 $

 45,000

  

 

 
 Revenue

  

  

 155,000

  

  

  

 170,000

  

 

 
 Adjusted EBITDA Margin

  

  

 23

 %

  

  

 26

 %

 

  
 

 
 
 
 
 
 
 
 
 
 
 
 

 
 Drilling Tools International Corp.

  

 

 
 Reconciliation of Estimated Consolidated Net Income (Loss) to Adjusted Free Cash Flow

  

 

 
 (In thousands of U.S. dollars and rounded)

  

 

 
 (Unaudited)

  

 

 
  

  

  

  

  

  

  

 

 
 

  

 Twelve Months Ended December 31, 2026

  

 

 
 

  

 Low

  

  

 High

  

 

 
 Net income (loss)

  

 $

 (500

 )

  

 $

 1,000

  

 

 
 Add (deduct):

  

  

  

  

  

  

 

 
 Interest expense, net

  

  

 3,500

  

  

  

 4,500

  

 

 
 Income tax expense (benefit)

  

  

 —

  

  

  

 1,200

  

 

 
 Depreciation and amortization

  

  

 27,500

  

  

  

 30,000

  

 

 
 Management fees

  

  

 700

  

  

  

 800

  

 

 
 Other expense

  

  

 800

  

  

  

 1,500

  

 

 
 Stock option expense

  

  

 3,000

  

  

  

 4,000

  

 

 
 Goodwill impairment

  

  

 —

  

  

  

 —

  

 

 
 Transaction expense

  

  

 —

  

  

  

 2,000

  

 

 
 Capital expenditures

  

  

 (18,000

 )

  

  

 (23,000

 )

 

 
 Adjusted Free Cash Flow

  

 $

 17,000

  

  

 $

 22,000

  

 

 
 Adjusted Free Cash Flow Margin

  

  

 11

 %

  

  

 13

 %

 

  

 12