KLX Energy Q3 guidance now calls for $180 million to $185 million of revenue and a 13% to 14% adjusted EBITDA margin, pointing to stronger sequential activity and acquisition contributions. KLX Energy Services (NASDAQ: KLXE) issued the update Friday.
At the midpoint, revenue would rise about 9% from the second quarter. Management also expects adjusted EBITDA to improve approximately 30% and the adjusted margin to expand about 200 basis points sequentially.
KLX Energy Q3 Guidance Points to Higher Utilization
The updated ranges cover the quarter ending September 30 and are based on internal results available so far, KLX said in an official filing with the SEC. The company plans to provide full financial and operating results in November.
Second-quarter revenue was $167 million. A 9% increase from that level would place the third-quarter result near the middle of the new range, while the margin improvement suggests better equipment utilization and overhead absorption as activity rises.
KLX also has a full quarter of contribution from its Wolf Pack acquisition, compared with one month in the second quarter. Management said the company remains on track for the $2.5 million annual synergy target announced in August.
Adjusted Figures Still Await Full Quarterly Results
Adjusted EBITDA excludes items that can include interest, taxes, depreciation, amortization, stock compensation and transaction costs. The forecast therefore does not establish net income or operating cash flow, and KLX has not provided a forward reconciliation to GAAP results.
The company also said the offering period for its $125 million equity rights transaction had ended. A separate preliminary update showed subscriptions for nearly 25 million shares at $1.49 each, implying gross proceeds of about $37.2 million rather than the full headline authorization.
KLX has said the capital action is intended to reduce leverage and support future growth. Its effect on debt, interest expense and per-share results will depend on final proceeds and the number of shares issued.
Quarter-end closing procedures are not complete, so actual results may differ from the ranges. The November earnings release will provide the next check on margins, Wolf Pack integration and whether the sequential improvement carried through the full quarter.
