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Q1 2025 IR Presentation
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DISCLAIMER 2 Forward-Looking Statements & Non-GAAP Financial Measures Certain statements in this presentation are forward-looking statements 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 presentation, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this presentation, the words “could,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “may,” “continue,” “predict,” “potential,” “project” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Forward-looking statements may include statements about our industry; our financial strategy, budget, projections, operating results, cash flows and liquidity; and our plans, business strategy and objectives, expectations and intentions that are not historical. Forward-looking statements entail various risks and uncertainties that could cause actual results to differ from those expressed, including, among other things, the volatility of future oil and natural gas prices; the level of capital spending and well completions by the onshore oil and natural gas industry, which may be affected by geopolitical and economic developments in the U.S. and globally, including conflicts, instability, acts of war or terrorism in oil producing countries or regions, as well as actions by members of OPEC+; general economic conditions and inflation, particularly cost inflation with labor or materials; the adequacy of our capital resources and liquidity, including the ability to meet our debt obligations; equipment and supply chain constraints; our ability to maintain existing prices or implement price increases on our products and services; pricing pressures, reduced sales, or reduced market share as a result of intense competition in the markets for our dissolvable plug products: availability of skilled and qualified labor and key management personnel; our ability to accurately predict customer demand; competition in our industry; governmental regulation and taxation of the oil and natural gas industry; environmental liabilities; our ability to implement new technologies and services; operating hazards inherent in our industry. Although we believe that our plans, intentions and expectations reflected in or suggested by the forward-looking statements contained herein are reasonable, we can give no assurance that these plans, intentions or expectations will be achieved. For additional information regarding known material factors that could affect our operating results and performance, please see our Current Reports on Form 8-K, Annual Report on Form 10-K and Quarterly Reports on Form 10-Q which are available at the SEC’s website, http://www.sec.gov. Should one or more of these known material risks occur, or should the underlying assumptions change or prove incorrect, our actual results, performance, achievements or plans could differ materially from those expressed or implied in any forward- looking statement. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. All subsequent written or oral forward- looking statements concerning us are expressly qualified in their entirety by the cautionary statements above. We undertake no obligation to publicly update or revise any forward- looking statements after the date they are made, whether as a result of new information, future events or otherwise, except as required by law. All information in this presentation is as of March 31, 2025 as indicated unless otherwise noted. In addition to reporting financial results in accordance with GAAP, the Company has presented Adjusted EBITDA, Adjusted EBITDA margin, free cash flow, adjusted gross profit and return on invested capital (ROIC). These are not recognized measures under, or an alternative to, GAAP. The Company’s management believes that this presentation provides useful information to management, analysts and investors regarding certain additional financial and business trends relating to its results of operations and financial condition. In addition, management uses these measures for reviewing the financial results of the Company. These non-GAAP measures are intended to provide additional information only and do not have any standard meaning prescribed by GAAP. Use of these terms may differ from similar measures reported by other companies. In particular, because of its limitations, Adjusted EBITDA and free cash flow should not be considered as a measure of discretionary cash available to use to reinvest in growth of the Company’s business, or as a measure of cash that will be available to meet the Company’s obligations. These non-GAAP measures have limitations as an analytical tool, and you should not consider them in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. Industry and Market Data This presentation includes market data and other statistical information from third party sources, including independent industry publications, government publications and other published independent sources. Although the Company believes these third party sources are reliable as of their respective dates, the Company has not independently verified the accuracy or completeness of this information.
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COMPANY OVERVIEW
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COMPANY OVERVIEW 4 24% 36% 20% 20% Completion Tools Cementing Coiled Tubing Wireline Investment Highlights Asset, emissions and labor-light business model with strong barriers to entry driving greater cash generation ~60% of business driven by technology- based businesses (completion tools & cementing) Growing ESG technology offering Experienced management team that has led through up and down cycles Diversified completion portfolio and geography Strategy focused on growing completion tool revenue through growth in both domestic and international markets $827 $833 $311 $349 $593 $610 $554 $602 $141 $113 $(26) $5 $94 $73 $53 $66 2018A 2019A 2020A 2021A 2022A 2023A 2024A Q1 2025 Ann Revenue Adj. EBITDA Revenue by service line1 Financial overview ($MM) 1 Financials based on 2024 Actuals See appendix for Adjusted EBITDA reconciliation
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STRATEGY 5 Asset, emissions and labor- light business model drives greater cash generation, while reducing capital allocation risk. Establishing our company as a technology leader places a moat between Nine and potential competitors. "Stickier" depreciation- based service lines mitigate financial risk while providing customer intelligence to facilitate new R&D. Asset Light Cash flow generation Returns (ROIC) Defensibility Sustainability Legitimacy Mitigation of financial risk Service/R&D excellence Barriers to Entry Service Execution Differentiation
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TECHNOLOGY-BASED SERVICE OFFERING 6 Nine’s wide range of advanced technologies will accommodate any type of completion for 100% of wells drilled in the United States and Canada. Performance Delivered.
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ASSET LIGHT MODEL 7 Pressure Pumping Wireline
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ASSET-LIGHT MODEL REDUCES CAPEX NEEDS 8 $10 $45 $53 $62 $10 $15 $32 $22 $15 2016 2017 2018 2019 2020 2021 2022 2023 2024 Nine has fundamentally reduced the capex needs to run the business Following 2016, Nine’s average 3-year capex from 2017 - 2019 was ~$53mm, versus coming out of 2020, where the 4-year average from 2021 - 2024 is ~$21mm, a reduction of ~60% Nine Annual Capex Spend ($mm) Revenue ($MM) $282 $544 $827 $833 $311 $349 $593 $610 $554 CapEx as a % of rev 4% 8% 6% 7% 3% 4% 5% 4% 3%
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MARKET SHARE OVERVIEW 9 Nine US Wireline & Completion Tools % of stage completed1 US Completions Market Share Source: 1 Management estimates of Nine frac stages relative to industry frac stages based on Spears & Associates, Q4 2024 2 Management estimates based on Nine rigs followed in the Permian, Eagle Ford and Haynesville Nine U.S. Cementing Market Share in the Eagle Ford, Permian & Haynesville 2 US Cementing Market Share 14% 15% 14% 17% 19% 16% 19% 2018 2019 2020 2021 2022 2023 YE 2024 17% 21% 20% 18% 20% 17% 14% 2018 2019 2020 2021 2022 2023 2024
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GEOGRAPHIC AND COMMODITY DIVERSITY 10 EAGLE FORD – 15% MARCELLUS/UTICA – 19% BARNETT – 3%PERMIAN – 40% MIDCON – <1% HAYNESVILLE – 11% DJ/NIOBRARA – 2% BAKKEN – 5% CANADA – <1% Completion Tools Cementing Coiled Tubing Wireline R&D Facility in Norway Service Coverage Area and Revenue by Region1 Major Unconventional Basins ~4% of overall revenue comes from outside NAM 1 Revenue contributions reflect full year 2024 revenue Our Services
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CONTINUED EXCELLENCE IN SAFETY 11 2.47 1.5 1.26 1.44 0.88 0.77 0.30 0.48 0.41 0.63 0.49 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 TRIR
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Diverse, Blue-chip customer base with minimal concentration CUSTOMERS WHO TRUST US 12
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TECHNOLOGY OVERVIEW
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NEW GENERATION OF DISSOLVABLE PLUGS 14 Nine Stinger Dissolvable Plug PLUG OVERVIEW Shorter Design, decreasing plug size by over 70% Predictable and reliable dissolution for entire addressable isolation tool market Completely dissolvable, eliminating plug drill-out MARKET & FINANCIAL OVERVIEW High-volume product with the ability to address entire addressable plug market in both NAM land and abroad (1 stage = 1 plug) Almost 100% free cash flow conversion ($1 of EBITDA = $1 Cash) and requires minimal capex to generate significant growth Margin accretive to Nine Strong patents and exclusive arrangements in place to protect IP design and material science
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NINE DISSOLVABLE PLUG BENEFITS 15 Neutral or Reduced AFE Increased IRR Increased SAFETYwith Fewer Humans at Surface Reduced EMISSIONS
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DISSOLVABLE PLUG ADOPTION INCREASING 16 15 – 25% Dissolvables & Composites -13% -40% 16% 22% 29% 4% Dissolvable Plug Market Share2 ~75% of the US Dissolvable Plug Market share is concentrated among four competitors, including Nine ~75% Nine Competitor A Competitor B Competitor C Remaining Competitors Source: 1 Based on the total number of Nine composite and dissolvable plugs sold for FY24 divided by Q4 2024 Spears U.S. stag e count; 2 Management Estimates 2024 Total US Plug Market Share1 % Increase of Dissolvable Plug Units Sold vs. 2018 2019 2020 2021 2022 2023 2024 20 – 25% 20 – 25% 13 – 17% 13 – 17% 16 – 34%
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PINCER HYBRID PLUG 17 An innovative hybrid design integrating composite and dissolvable materials, the Pincer is a considerable advancement in completion tool technology, eliminating geographical constraints and delivering optimal downhole efficiency PLUG OVERVIEW 47% less material than Scorpion frac plugs 12.1” in length ~2-3 minutes average millout time of per plug Molded and filament wound composite material for optimized performance Significantly reduces bit wear, allowing for multiple plug millings in a single trip Dissolvable components predictably dissolve in variable downhole temperatures and wellbore environments
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SCORPION COMPOSITE PLUG 18 SCORPION Manufactured almost entirely of composite material, this tool is significantly shorter than most plugs of its kind, allowing for a much faster millout. SCORPION EXTENDED RANGE Featuring a small diameter, it’s designed to get through narrow restrictions, expanding to securely fit 4-inch, 4.5-inch, or 5.5-inch casing. Over 440,000+ plugs run LONG RANGE BRIDGE (GEN1) Designed to pass through damaged casing, restricted internal casing diameters and existing casing patches in the wellbore. LONG RANGE (GEN 2) Engineered with 75% less aluminum, it improves efficiency with faster drill-out times. Delivering secure and dramatically faster mill-out times, Nine offers a wide range of composite frac plugs for the longest and most complex laterals.
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EXP ANDING INTO NEW MARKETS THROUGH TECHNOLOGY19 Refrac market – enables customers to get product to market in 10-14 days versus traditional completions of ~6 months International Market Restrictive or Compromised Completion Market Nine has partnered with NewGen Systems on a Refrac Liner system A refrac boosts total reserves recovery while giving the operator the ability to capture today’s higher commodity prices without having to direct large amounts of capital to new drilling. With a refrac liner, a customer can reduce the upfront capital needed (i.e., drilling rig, infrastructure and surface equipment), as well as reduce overall cycle time to drill and complete a new well, helping operators stay within budgets, while still taking advantage of supportive commodity prices. Nine’s StingerTM Extended Range Dissolvable Frac Plug is designed specifically for wellbores with casing restrictions or casing patches Often used in long lateral, high stage count wellbores where casing can become compromised, Nine’s Extended Range Dissolvable Frac Plug is shorter than any other on the market, which makes it easier to pass through restriction. Nine’s patented Multi-Cycle Barrier Valves are helping expand the Company’s tool portfolio in the international markets Allows for completion of the well to begin and offers full flexibility with up to 15 pressure cycles and this interventionless, pressure-actuated, API-Q1 certified well barrier cost-effectively isolates wellbore reservoir pressure.
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EXP ANDING THROUGH ESG TECHNOLOGY 20 Dissolvable Pumpdown Rings Electric Wireline Used in conjunction with Nine’s composite or dissolvable plugs, by adding a dissolvable pumpdown ring, the bypass around the plug is greatly reduced while maintaining the needed line tension. Using a dissolvable pumpdown ring has been shown to reduce horsepower requirements by ~48%, water required to pump the plug to set at depth by ~28% and diesel fuel usage by ~42% Nine has recently invested in transitioning traditional hydraulic wireline units into electric units Driven by one of the most advanced battery- based power packs in the industry, the E-Wireline truck delivers 4x the power of traditional wireline. Plus, the hydraulic system has been replaced with an all-electric platform which eliminates the risk associated with traditional elements that can bring operations to a standstill.
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SIGNIFICANT & SCALABLE EMISSION REDUCTIONS 21 Source: ERM; Details and assumptions can be found on Nine’s website at: nineenergyservice.com/assets/files/Environmental-Study-Results_v1.3.pdf Nine Stinger Dissolvable Frac Plug Dissolvable frac plugs on a 6-well pad take 84 cars off the road: ~404 METRIC TONS OF CO2E
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CEMENTING & DRILLING SOLUTIONS 22 BLEND 27 Builds strength 60% faster FLOWLOK Resists gas and water invasion FAST-ACTING RESIN TECHNOLOGY Reduces up to 75% wait time Cement Slurries and Additives FLEX 50H 16X more acid resistance MS SPACER Reduces cement loss NINE LITE HOLLOW GLASS SPHERES (HGS) Crush strengths up to 8,000 PSI Deep expertise in North America’s most active shale plays, innovative slurry R&D, modern technology and steadfast service. Succeed in the Most Complex Formations
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FINANCIAL OVERVIEW
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Q1 2025 FINANCIAL SNAPSHOT Q1 Highlights Q1 revenue came in the upper end of Management’s original guidance and increased by ~6% q/q, despite the average US rig count remaining flat Adjusted EBITDA increased by ~17% q/q Outperformed market drivers as we continued to execute our strategy of market share gains and cost reductions SERVICE LINES: • All service lines generated sequential quarterly revenue growth • Cementing revenue increased by ~4% q/q with jobs completed increasing by ~11% • Completion tool revenue increased by ~2% q/q due to market share gains in the Permian • US Wireline revenue increased by ~7% q/q due to more efficient operations in the Northeast • Coiled Tubing revenue increased by ~16% q/q due to higher utilization 24 Q1 2025 ($mm) $141 $150 Q4 24 Q1 25 $14 $17 Q4 24 Q1 25 10% 11% Q4 24 Q1 25 REVENUE ADJ. EBITDA ADJ. EBITDA MARGIN
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3/31/2025 CAPITALIZATION 25 AS OF 3/31/25 ($MM) CAPITALIZATION Cash 17.3 Debt ABL Credit Facility 47.0 2028 Senior Secured Notes 300.0 Other Debt - Total Debt 347.0 Net Debt 329.7 Total Cash 17.3 ABL Availability 36.5 Total Liquidity 53.8 Commentary Total capex for Q1 of $4.3 million Did not utilize ATM program during Q1 2025 On May 1, 2025, closed on a new revolving credit facility with White Oak Commercial Finance, which replaced the Company’s previous revolving credit facility The new revolving credit facility has lender commitments of $125mm and an uncommitted accordion of up to $50mm
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• On May 1, 2025, Nine closed on a new revolving credit facility with White Oak Commercial Finance, which replaced the Company’s previous revolving credit facility • The new revolving credit facility has lender commitments of $125 million and an uncommitted accordion of up to $50 million • The new revolving credit facility provides Nine with ~$21.9 million of incremental covenant - compliant availability1 based on the March 2025 borrowing base • Extends the revolving credit facility maturity by ~9 months to November 2027, assuming senior secured notes outstanding • Increases covenant-compliant liquidity through higher advance rates on eligible accounts receivable, as well as by lowering Nine’s excess availability requirements by ~$7.5 million • Pricing for new revolving credit facility ranges from SOFR + 4.00% to 4.50%, based on the then - applicable fixed charge coverage ratio, and is estimated to increase Nine’s annual cash interest expense by ~$1 million NEW REVOLVING CREDIT FACILITY 26 1Covenant-compliant availability does not include current amount drawn on the facility and does not include estimated closing fees of ~$5mm associated with transaction
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NEW FACILITY PROVIDES INCREASED FLEXIBILITY New Credit Facility (White Oak) Previous Credit Facility Facility Size ▪ $125mm facility ▪ $50mm uncommitted accordion ▪ $150mm facility Maturity ▪ 11/2/27 assuming senior secured notes outstanding; 5/1/28 otherwise ▪ 1/29/2027 Pricing ▪ SOFR + 4.00% - 4.50%, based on fixed charge coverage ratio ▪ SOFR Floor: 1.50% ▪ SOFR + 2.00% - 2.50%, based on consolidated leverage ratio ▪ SOFR Floor: 0.00% Borrowing Base ▪ 92.5% of Eligible U.S. and Canadian Billed A/R; plus ▪ 85% of Eligible Unbilled A/R; plus ▪ 50% of Eligible Foreign A/R; plus ▪ 70% of Eligible Inventory at the lower of cost or market value(capped at 85% of NOLV of Eligible Inventory); plus ▪ 5% “stretch” of the borrowing base (capped at $5mm) ▪ 85% of Eligible A/R ▪ 80% of Eligible Unbilled A/R (not to exceed $10mm) ▪ 85% of the NOLV of Eligible Inventory (not to exceed 25% of the Borrowing Base) Financial Covenants ▪ Fixed charge coverage ratio: Excess Availability < $10mm, 1.1x ▪ Fixed charge coverage ratio: 1.0x when Availability < the greater of (i) $17.5mm and (ii) 12.5% of the Loan Limit Cash Dominion ▪ Cash dominion period: Excess Availability < $15mm ▪ Cash dominion period: Availability < the greater of (i) $17.5mm and (ii) 12.5% of the Loan limit Estimated Annual Cash Interest Expense1 ▪ ~$4.6mm ▪ ~$3.6mm Incremental Covenant- Compliant ABL Availability2 ▪ ~21.9mm ▪ $0mm 1Based on amount outstanding as of March 2025 Borrowing Base Certificate and SOFR of 4.3%. 2Based on March 2025 Borrowing Base Certificate; covenant-compliant availability does not include current amount drawn on the facility and does not include estimated closing fees of ~$5mm associated with transaction
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New revolving credit facility expected to provide incremental covenant-compliant liquidity2 of ~$21.9mm based on the March 2025 borrowing base INCREASED LIQUIDITY FOR NINE $68.4 $90.3 $7.4 $0.3 $4.8 $1.9 $7.5 Previous Net Covenant- Compliant Availability Available Billed A/R Available Unbilled A/R Stretch Reserves Covenant Threshold White Oak Net Covenant-Compliant Availability Incremental Availability Bridge based on the March 2025 borrowing base2 1 1 5% Stretch equal to 5% of borrowing base collateral, subject to a sublimit of $5mm. 2Covenant-compliant availability does not include current amount drawn on the facility and does not include estimated closing fees of ~$5mm associated with transaction 2
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APPENDIX
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NINE ADJ. EBITDA RECONCILIATION 31 ($ MM UNLESS OTHERWISE NOTED) 31 – Mar 25 31 – Dec 24 2024 2023 2022 2021 2020 2019 2018 EBITDA Reconciliation Net income (loss) (7.1) (8.8) (41.1) (32.2) 14.4 (64.6) (378.9) (217.8) (53.0) Interest expense (12.9) 12.9 51.3 51.1 32.5 32.5 36.8 39.8 22.3 Interest Income (0.1) (0.2) (0.8) (1.3) (0.3) (0.03) (.6) (.9) (0.6) Depreciation 5.8 6.0 25.6 29.1 26.8 28.9 32.4 50.5 54.3 Amortization of intangibles 2.8 2.8 11.2 11.5 13.5 16.1 16.5 18.4 9.6 Provision (benefit) from income taxes 0.1 (0.2) 0.2 0.6 0.5 (0.03) (2.5) (3.9) 2.4 EBITDA 14.4 12.5 46.4 58.9 87.4 12.9 (296.4) (113.8) 35.5 Adjusted EBITDA Reconciliation EBITDA 14.4 12.5 46.4 58.9 87.4 $12.9 (296.4) (113.8) 35.5 Impairment of property and equipment - - - - - - - 66.2 45.7 Impairment of goodwill and other intangible assets - - - - - - 296.2 135.7 32.1 Transaction and integration costs - - - - - - 0.1 13.0 10.3 Loss on sale of subsidiary - - - - - - - 15.9 - (Gain) loss from the revaluation of contingent liabilities 0.03 (0.09) 0.1 0.4 0.5 0.5 0.3 (21.2) 3.3 Gain on extinguishment of debt - - - - (2.8) (17.6) (37.8) - - Loss on equity investment - - - - - - - - 0.3 Stock-based compensation and cash award expense 0.8 0.7 2.9 4.9 4.9 5.4 9.7 14.1 13.2 Gain (loss) on sale of property and equipment 0.4 (0.2) 0.3 0.3 0.4 0.7 (2.9) (.5) (1.7) Legal fees and settlements - - - 0.07 0.09 1.8 .03 .3 2.4 Restructuring charges - (0.2) 0.7 2.0 3.4 1.6 4.9 4.0 - Certain refinancing costs - - - 6.4 Cash award expense 0.9 1.1 2.8 - - - - - Adjusted EBITDA 16.5 14.1 53.2 73.0 93.7 $5.2 ($25.8) $113.0 $141.1 Revenue 150.5 141.1 554.1 609.5 593.4 349.4 310.9 832.9 827.2 % Adj. EBITDA margin 11% 10% 10% 12% 16% 1% -8% 14% 17%
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ADJUSTED ROIC RECONCILIATION 32 ($ MM UNLESS OTHERWISE NOTED) 31 – Mar 25 31 – Dec 24 2024 2023 2022 After-tax net operating profit reconciliation: Net income (loss) (7.1) (8.8) (41.1) (32.2) 14.4 Add back: Interest expense 12.9 12.9 51.3 51.1 32.5 Interest Income (0.1) (0.2) (0.8) (1.3) (0.3) Certain refinancing costs - - - 6.4 - Restructuring charges - 0.2 0.7 2.0 3.4 Gain on extinguishment of debt - - - - (2.8) Adjusted after-tax net operating income (loss) 5.7 4.0 10.1 26.1 47.1 Total capital as of prior period-end: Total stockholders' equity (deficit) (66.1) (57.6) (35.6) (23.5) (39.3) Total debt 350.6 350.0 359.9 341.6 337.4 Less: Cash and cash equivalents (27.9) (15.7) (30.8) (17.4) (21.5) Total capital as of prior period-end 256.6 276.8 293.4 300.7 276.7 Total capital as of prior period-end: Total stockholders' equity (deficit) (72.1) (66.1) (66.1) (35.6) (23.5) Total debt 349.3 350.6 350.6 359.9 341.6 Less: Cash and cash equivalents (17.3) (27.9) (27.9) (30.8) (17.4) Total capital as of prior period-end 259.9 256.6 256.6 293.4 300.7 Average total capital 258.3 266.7 275.0 297.0 288.7 ROIC -10.9% -13.3% -14.9% -10.8% 5.0% Adjusted ROIC 8.8% 6.0% 3.7% 8.8% 16.3%