HOUSTON - Nine Energy Service, Inc. (NYSE:NINE), a Houston-based oilfield services company, announced on Monday that it has been notified by the New York Stock Exchange (NYSE) of its non-compliance with the exchange's continued listing standards. The notice, dated October 21, 2024, specifies that the company's average global market capitalization and its stockholders’ equity were both under the threshold of $50 million over a consecutive 30 trading-day period.
The company is required to submit a business plan within 45 days from the receipt of the notice to demonstrate how it intends to regain compliance with the NYSE's standards within 18 months. Following the submission, the NYSE's Listings Operations Committee will review the business plan to decide on the company's future on the exchange.
If the Committee approves the plan, Nine Energy Service will be subject to quarterly reviews to ensure adherence to the plan. Conversely, if the Committee rejects the plan, the company may face delisting and suspension procedures. Despite the notice, the company's common stock will continue to trade on the NYSE, and there will be no immediate impact on its business operations or SEC reporting requirements. The notice also does not trigger any default under the company's material debt or other agreements.
Nine Energy Service specializes in completion solutions for the oil and gas industry in North America and other regions, emphasizing service quality, wellsite execution, and advanced technology. The company operates in key North American shale regions and maintains a presence in Canada.
The information regarding Nine Energy Service's notice from the NYSE and its potential implications is based on a press release statement from the company.
In other recent news, Nine Energy Service reported its Q2 2024 earnings, achieving a revenue of $132.4 million, which aligns with its forecasted range of $130 million to $140 million. However, it faced challenges with a decrease in rig counts and lower pricing in its cementing business, leading to a diluted EPS of -$0.40. The company's adjusted EBITDA was reported at $9.7 million for the quarter.
In further developments, Nine Energy Service projects Q3 revenue to be between $127 million and $137 million. The company continues to maintain a positive medium and long-term outlook on the gas market, which constitutes 30-35% of its total revenue. Despite market volatility, the company is prepared for a potential increase in exploration and production activity in the latter half of 2025.
Analysts have highlighted the company's successful projects in the Eagle Ford (NYSE:F) and Bakken regions, contributing to the growth of the refrac market. Nine Energy Service is also considering expanding services to include consulting in the refrac market. The company's efficiency in equipment maintenance has led to reduced capital expenditure needs, a factor that has been appreciated by industry observers.
InvestingPro Insights
The recent NYSE notification to Nine Energy Service regarding its non-compliance with continued listing standards aligns with several key financial metrics and trends observed in the company's performance. According to InvestingPro data, Nine Energy Service's market capitalization stands at a modest $41.99 million, corroborating the NYSE's concerns about the company falling below the $50 million threshold.
The company's financial challenges are further highlighted by its negative P/E ratio of -0.93 over the last twelve months, indicating ongoing profitability issues. This is consistent with an InvestingPro Tip that suggests the company has not been profitable over the last twelve months. Additionally, Nine Energy Service has experienced a significant revenue decline, with a 15.13% decrease in the last twelve months and a more pronounced 17.98% drop in the most recent quarter.
The stock's performance has been particularly concerning, with InvestingPro data showing a staggering 72.21% decline in the one-year price total return. This aligns with another InvestingPro Tip indicating that the stock price has fallen significantly over the last year and is currently trading near its 52-week low.
These financial indicators provide context to Nine Energy Service's current predicament with the NYSE and underscore the challenges the company faces in its efforts to regain compliance. Investors considering this stock may want to review additional insights available on InvestingPro, which offers 11 more tips that could provide a more comprehensive view of the company's financial health and prospects.
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