Superior Drilling Products, Inc. (SDPI) an innovative, cutting-edge drilling tool technology company providing cost-saving solutions, announced that on May 20, 2021, SDPI obtained a letter from the NYSE American LLC notifying that it did not meet compliance regulations of Section 1003(a)(ii) as a result of stockholders’ equity falling lower than $4.0 million and having announced losses in its five most recent fiscal years completed on December 31, 2020.
At last check-in premarket trading, shares of Superior Drilling Products Inc. (SDPI) were down -2.16% at $0.7699. SDPI stock closed the last session at $0.79, increasing 0.19%. Shares of the company fluctuated between $0.75 and $0.81 throughout the day.SDPI shares have fallen by -7.63% over the last 12 months, and they have moved up by 1.65% in the past week.
First Quarter Financial Result
Total operating expenses saw an increment of 13% over the trailing fourth quarter, while revenue surged 57% depicting the effect of cost reduction efforts and the operating leverage produced from increased volume.
Net loss for the quarter was $1.1 million versus $0.7 million in the previous quarter which was inclusive of a $0.9 million benefit from the government forgiveness of SBA loan. In comparison with the previous quarter, Adjusted EBITDA enhanced sequentially primarily due to an increment in sales and operating leverage generated from higher volume.
Cash generated the end of the quarter was $2.3 million, depicting an increase from $2.0 million at the end of the prior year. Cash produced by operations in the first quarter of 2021 was $139 thousand. Long-term debt, inclusive of the current portion at March 31, 2021, was $3.0 million. The $4.2 million long-term financial obligation is linked to the future least lease payments in accordance to the 15-year lease of the SDPI’s Vernal, Utah property.
Revenue saw an increment sequentially of $884 thousand, or 57%, over the previous quarter as market share and market conditions got better. The year-over-year comparison depicts the impact of the global pandemic on the oil & gas production industry.
Revenue in North America surged 74% from increased tool sales and produced higher royalty and repair fees. Contract Services revenue also improved sequentially depicting higher drill bit refurbishment. Global revenue was relatively unchanged from the previous quarter as the market recovery is similar to the lag in decline the market had across 2020.
Superior Drilling Products, Inc. not being able to meet the compliance standards combined with the global pandemic adversely affecting the drilling market has reduced investor interest, with SDPI stock price declining at pre-market.