10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-13439

DRIL-QUIP, INC.

(Exact name of registrant as specified in its charter)

    Delaware

    74-2162088

    (State or other jurisdiction of
incorporation or organization)

    (I.R.S. Employer
Identification No.)

2050 West Sam Houston Parkway S., Suite 1100

Houston, texas

77042

(Address of principal executive offices) (Zip Code)

(713) 939-7711

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading symbol(s)	Name of Each Exchange on Which Registered
Common Stock, $0.01 par value per share	DRQ	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☑	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of April 29, 2024, the number of shares outstanding of the registrant’s common stock, par value $0.01 per share, was 34,420,419.

TABLE OF CONTENTS




		Page
PART I
Item 1.	Condensed Consolidated Financial Statements	3
	Balance Sheets	3
	Statements of Income (Loss)	4
	Statements of Comprehensive Income (Loss)	5
	Statements of Cash Flows	6
	Statements of Stockholders’ Equity	7
	Notes to Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	28
PART II
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 5.	Other Information	33
Item 6.	Index to Exhibits	34
	Signatures	35

Table of Contents

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

DRIL-QUIP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)


	March 31, 2024		December 31, 2023
	(In thousands, except per share data)
ASSETS
Current assets:
Cash and cash equivalents	$	198,197	$	187,323
Restricted cash		4,103		4,077
Short-term investments		4,016		25,908
Trade receivables, net		137,135		135,569
Unbilled receivables		139,610		148,429
Inventories		209,160		194,593
Prepaid expenses		13,126		14,119
Other current assets		8,285		9,699
Assets held for sale		1,513		-
Total current assets		715,145		719,717
Operating lease right of use assets		16,356		16,343
Property, plant and equipment, net		215,264		217,631
Deferred income taxes		9,663		8,989
Goodwill		16,288		16,654
Intangible assets		40,247		41,941
Other assets		8,064		6,906
Total assets	$	1,021,027	$	1,028,181
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	62,907	$	60,160
Accrued income taxes		7,064		5,942
Contract liabilities		6,839		7,583
Accrued compensation		14,026		14,035
Operating lease liabilities		2,300		2,118
Other accrued liabilities		40,420		27,865
Total current liabilities		133,556		117,703
Deferred income taxes		10,330		10,564
Income tax payable		385		346
Operating lease liabilities, long-term		14,541		14,554
Other long-term liabilities		4,852		3,754
Total liabilities		163,664		146,921
Contingencies (Note 14)
Stockholders’ equity:
Preferred stock:

SEC Form 10-Q filed by Dril-Quip Inc.