Nine Energy Service Announces First Quarter 2018 Results

• Revenue, Net Income and Adjusted EBITDAA of $173.8 million,
  $1.7 million and $24.1 million, respectively for the first quarter of
  2018
• First quarter 2018 Revenue and Adjusted EBITDA increased approximately
  13% and 29%, respectively over the fourth quarter 2017
• First quarter 2018 ROICB of 3%

HOUSTON–(BUSINESS WIRE)–Nine Energy Service, Inc. ("Nine" or the "Company") (NYSE: NINE)
reported first quarter 2018 revenues of $173.8 million, net income of
$1.7 million and adjusted EBITDA of $24.1 million. First quarter 2018
revenues increased approximately 13% as compared to the fourth quarter
2017 revenues of $154.3 million. For the first quarter of 2018, the
Company reported net income of $1.7 million, or $0.08 per diluted share.
This compares to a net loss of $(29.8) million, or $(1.89) per diluted
share in the fourth quarter of 2017, which included a $35.5 million
goodwill and intangible impairment. The Company reported first quarter
2018 adjusted EBITDA of $24.1 million, an increase of approximately 29%
compared to fourth quarter 2017 adjusted EBITDA of $18.7 million, and
represented the fifth sequential quarterly increase. The Company had
provided first quarter 2018 revenue guidance between $166.0 and $168.0
million and adjusted EBITDA guidance between $22.0 and $24.0 million,
with actual results outperforming the midpoint of first quarter 2018
revenue guidance by approximately 4% and the midpoint of first quarter
adjusted EBITDA guidance by approximately 5%. For the first quarter of
2018, the Company generated an ROIC of 3%.

NineÔÇÖs President and Chief Executive Officer, Ann Fox, commented, ÔÇ£Nine
continues to capitalize and execute on the improving macro backdrop,
increasing adjusted EBITDA by 29% quarter over quarter and generating
$17.3 million in cash flow from operations despite a use of net working
capital due to growing revenue by 13%. North American land activity and
completion complexity continue to increase, allowing the Company to
differentiate through wellsite execution and a comprehensive technology
portfolio. By having both the conveyance and the tools, we provide a
differentiated and sustainable value proposition to our customers by
driving efficiencies and increasing production.ÔÇØ

ÔÇ£The Completion Solutions Segment continues to drive growth for Nine.
Completion Solutions revenue grew approximately 15% quarter over quarter
despite no additional equipment coming online during the first quarter
of 2018, but rather was driven by a significant increase in utilization
and profitability across all service lines. We anticipate this trend
will continue into the second quarter. NineÔÇÖs Scorpion Plugs continue to
gain market share and we are still running field trials for the EON XLR
frac sleeve and casing flotation tools.ÔÇØ

ÔÇ£We remain very optimistic on North American shale as macro fundamentals
continue to improve. Our disciplined approach to deploying capital has
allowed us to navigate the labor and supply chain constraints within the
industry and maintain our service execution at the wellsite, while still
delivering substantial financial growth. ROIC remains at the forefront
for measuring Company performance and guiding Management
decision-making. Our 8% ROIC target for 2018 is on track. We are
anticipating our sixth sequential quarter of revenue and adjusted EBITDA
growth into the second quarter of 2018 and remain focused on
supplementing our completions technology portfolio through our
three-pronged strategy.ÔÇØ

Business Segment Results

Completion Solutions

During the first quarter of 2018, the CompanyÔÇÖs Completion Solutions
segment, which includes the CompanyÔÇÖs cementing, completion tools,
wireline and coiled tubing services reported revenues of $154.6 million
compared to fourth quarter 2017 revenues of $134.7 million, representing
an approximate 15% increase. For the first quarter 2018, Completion
Solutions reported adjusted gross profitc of $33.2 million
compared to fourth quarter 2017 adjusted gross profit of $25.8 million,
representing an approximate 29% increase.

Production Solutions

During the first quarter of 2018, the CompanyÔÇÖs Production Solutions
segment, which includes well services, generated revenues of
$19.2 million compared to fourth quarter 2017 revenues of $19.6 million,
representing an approximate 2% decrease. For the first quarter 2018,
Production Solutions reported adjusted gross profit of $2.4 million
compared to fourth quarter 2017 adjusted gross profit of $2.9 million,
representing an approximate 19% decrease.

Other Financial Information

During the first quarter of 2018, the Company reported selling, general
and administrative expense of $15.4 million, compared to $11.9 million
for the fourth quarter of 2017. Depreciation and amortization expense
("D&A") in the first quarter of 2018 was $15.0 million, compared to
$15.3 million for the fourth quarter of 2017.

During the first quarter of 2018, the CompanyÔÇÖs effective tax rate was
5%. The effective income tax rate for the quarter was primarily
attributable to changes in pre-tax book income and valuation allowance
positions as well as tax liability in states where income is expected to
exceed available net operating losses.

Liquidity

During the first quarter of 2018, the Company reported net cash provided
by operating activities of $17.3 million, compared to $1.9 million for
the fourth quarter of 2017.

As of March 31, 2018, NineÔÇÖs cash and cash equivalents were $72.9
million with $50.0 million of revolver capacity, $49.4 million of which
is currently available, resulting in a total liquidity position of
$122.3 million as of March 31, 2018.

ABCSee end of press release for definitions

Conference Call Information

The call is scheduled for Monday, May 14, 2018 at 10:00 am Central Time.
Participants may join the live conference call by dialing U.S. (Toll
Free): (877) 524-8416 or International: (412) 902-1028 and asking for
the ÔÇ£Nine Energy Service Earnings CallÔÇØ. Participants are encouraged to
dial into the conference call ten to fifteen minutes before the
scheduled start time to avoid any delays entering the earnings call.

For those who cannot listen to the live call, a telephonic replay of the
call will be available through May 28, 2018 and may be accessed by
dialing U.S. (Toll Free): (877) 660-6853 or International: (201)
612-7415 and entering the passcode of 13679364.

About Nine Energy Service

Nine Energy Service is an oilfield services company that offers
completion and production solutions throughout North America. The
Company brings years of experience with a deep commitment to serving
clients with smarter, customized solutions and world-class resources
that drive efficiencies. Strategically located throughout the U.S. and
Canada, Nine continues to differentiate itself through superior service
quality, wellsite execution and cutting-edge technology. Nine is
headquartered in Houston, Texas with operating facilities in the
Permian, Eagle Ford, SCOOP/STACK, Niobrara, Barnett, Bakken, Marcellus,
Utica and throughout Canada.

For more information on the Company, please visit NineÔÇÖs website at nineenergyservice.com.

Forward Looking Statements

• The foregoing contains forward-looking statements within the meaning
  of Section 27A of the Securities Act of 1933 and Section 21E of the
  Securities Exchange Act of 1934. Forward-looking statements are those
  that do not state historical facts and are, therefore, inherently
  subject to risks and uncertainties. The forward-looking statements
  included herein are based on current expectations and entail various
  risks and uncertainties that could cause actual results to differ
  materially from those forward-looking statements. Such risks and
  uncertainties include, among other things, the general nature of the
  energy service industry risks related to economic conditions;
  volatility of crude oil and natural gas commodity prices; a decline in
  demand for our services, including due to declining commodity
  prices; our ability to implement price increases or maintain pricing
  of our core services; the loss of, or interruption or delay in
  operations by, one or more significant customers; the loss of or
  interruption in operations of one or more key suppliers; the adequacy
  of our capital resources and liquidity; our ability to implement new
  technologies and services; the incurrence of significant costs and
  liabilities resulting from litigation; the loss of, or inability to
  attract, key personnel; and other factors to be discussed in the
  ÔÇ£BusinessÔÇØ and ÔÇ£Risk FactorsÔÇØ sections of the CompanyÔÇÖs Annual Report
  on Form 10-K for the year ended December 31, 2017 and the subsequently
  filed Quarterly Reports on Form 10-Q and Periodic Reports on Form 8-K.
  Readers are cautioned not to place undue reliance on forward-looking
  statements, which speak only as of the date hereof, and, except as
  required by law, the Company undertakes no obligation to update those
  statements or to publicly announce the results of any revisions to any
  of those statements to reflect future events or developments.

AAdjusted EBITDA is defined as EBITDA further adjusted for
(i) impairment of goodwill and other intangible assets, (ii) transaction
expenses related to acquisitions or the Combination, (iii) loss from
discontinued operations, (iv) loss or gains from the revaluation of
contingent liabilities, (v) non-cash stock-based compensation expense,
(vi) loss or gains on sale of assets, (vii) inventory write-down and
(viii) adjustment for other expenses or charges, to exclude certain
items which we believe are not reflective of ongoing performance of our
business, such as transaction expenses associated with our IPO, legal
expenses and settlement costs related to litigation outside the ordinary
course of business, and restructuring costs. Management believes
Adjusted EBITDA is useful because it allows us to more effectively
evaluate our operating performance and compare the results of our
operations from period to period without regard to our financing methods
or capital structure.

BROIC is defined as after-tax net operating profit, divided
by average total capital. We define after-tax net operating profit as
income (loss) from continuing operations (net of tax) plus interest
expense, less taxes on interest. We define total capital as book value
of equity plus the book value of debt less balance sheet cash and cash
equivalents. We then take the average of the current and prior year-end
total capital for use in this analysis. Management believes ROIC is a
meaningful measure because it quantifies how well we generate operating
income relative to the capital we have invested in our business and
illustrates the profitability of a business or project taking into
account the capital invested. Management uses ROIC to assist them in
capital resource allocation decisions and in evaluating business
performance.

CAdjusted gross profit is defined as revenues less cost of
revenues excluding depreciation and amortization. This measure differs
from the GAAP definition of gross profit because we do not include the
impact of depreciation and amortization, which represent non-cash
expenses. Our management uses adjusted gross profit to evaluate
operating performance and to determine resource allocation between
segments. We prepare adjusted gross profit (excluding depreciation and
amortization) to eliminate the impact of depreciation and amortization
because we do not consider depreciation and amortization indicative of
our core operating performance.

Contacts

Nine Energy Service, Inc.
Heather Schmidt, 281-730-5113
Director,
Investor Relations and Marketing
[email protected]