Company: NINE
Filing Date: 2025-05-07
Form Type: 10-Q
Source: 0001532286-25-000011
Chunk: 69

Company: Nine Energy Service, Inc.
Filing Date: 2025-05-07
Form: 10-Q
Item: Part I, Item 8
Chunk 69
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 intangible asset, and/or property and equipment impairment charges, (ii) transaction and integration costs related to acquisitions, (iii) interest expense (income), (iv) restructuring charges, (v) loss (gain) on the sale of subsidiaries, (vi) loss (gain) on extinguishment of debt, and (vii) the provision (benefit) for deferred income taxes. We define total capital as book value of equity (deficit) plus the book value of debt less balance sheet cash and cash equivalents. We compute and use the average of the current and prior period-end total capital in determining Adjusted ROIC. For additional information, see “Non-GAAP Financial Measures” below.

•Safety: We measure safety by tracking the total recordable incident rate (“TRIR”), which is reviewed on a monthly basis. TRIR is a measure of the rate of recordable workplace injuries, defined below, normalized and stated on the basis of 100 workers for an annual period. The factor is derived by multiplying the number of recordable injuries in a calendar year by 200,000 (i.e., the total hours for 100 employees working 2,000 hours per year) and dividing this value by the total hours actually worked in the year. Recordable workplace injuries include occupational death, nonfatal occupational illness, and other occupational injuries that involve loss of consciousness, restriction of work or motion, transfer to another job, or medical treatment other than first aid.

Industry Trends and Outlook

Our business depends, to a significant extent, on the level of unconventional resource development activity and corresponding capital spending of oil and natural gas companies. These activity and spending levels are strongly influenced by current and expected oil and natural gas prices. In recent years, commodity prices have been extremely volatile and unpredictable. During 2024, natural gas prices were extremely depressed, averaging approximately $2.19 for the year. Through the first quarter of 2025, natural gas prices have recovered, averaging approximately $4.14 for the quarter. However, despite a more supportive natural gas price during the first quarter of 2025, we have yet to see increased activity levels in the natural gas-levered basins like the Haynesville and Northeast. For example, during the fourth quarter of 2024, the average rig count in the Haynesville was 32 rigs and in the first quarter of 2025, the average rig count was 30 rigs. Nonetheless, we remain positive on the long-term outlook of natural gas, even as prices