Mon, Jul 8, 8:22 PM (105 days ago)
Dril-Quip, Inc. filed an amendment to its Q1 2024 10-Q, restating certain items due to a material weakness in internal controls. The amendment corrects the classification of $67 million in inventory write-downs from 2021, which were misclassified as "Restructuring and other charges" instead of "Cost of sales." Key points include: 1. **Financial Performance**: Q1 2024 revenues increased by 21.4% YoY to $110.3 million, driven by a significant rise in Well Construction revenues, partly due to the acquisition of Great North. However, the company reported a net loss of $20 million, down from a net income of $2.3 million in Q1 2023, primarily due to increased operating expenses and acquisition costs. 2. **Internal Controls**: The company identified a material weakness in its internal controls over financial reporting, specifically regarding the classification of inventory write-downs. This weakness was present as of March 31, 2024. 3. **Future Outlook**: The company is focused on remediation efforts to address the internal control weaknesses and anticipates future benefits from recent acquisitions and ongoing strategic initiatives. The amendment highlights the importance of accurate financial reporting and the company's commitment to improving its internal controls.