*Adjusted EBITDA is a non-GAAP measure. Please refer to the comments on the use of non-GAAP measures and the reconciliation of GAAP and non-GAAP measures in this press release form

WINNER, Utah--(BUSINESS WIRE)--Superior Drilling Products, Inc. (NYSE: SDPI), designer and manufacturer of drilling tool technology ("SDP" or "Company") today announced its second financial results for the 2021 quarter ending June 30, 2021.

Chairman and CEO Troy Meier commented: "We believe that our strong growth this quarter clearly demonstrates the value of our Drill-N-Ream® ("DNR") wellbore dressing tool and the continued growth in our manufacturing capabilities DNR is driving innovation in drilling. We believe that by including our tools in their drill string, producers can drill more complex well profiles and increase the total flow area of ​​their wells, while at the same time in a shorter time In addition, we are expanding the quantity and products produced for our long-term traditional customers to support their efforts to provide quality products while advancing technology."

He continued: “Although we have not returned to pre-pandemic levels, we continue to gain market share as the market recovers. We expect that we will continue to grow in 2021 and be back on track in 2022 to recover Our expected growth plan at the end of 2019."

Review for the second quarter of 2021 (in thousands of U.S. dollars, excluding per share amounts) (see "defining" the composition of product/service revenue categories.)

With the improvement of market share and market conditions, revenue in the first quarter increased by US$974,000, or 40%. As the oil and gas production market improves and the company gains a larger market share, the year-on-year and month-on-month improvement represents an improvement in demand. Due to increased tool sales and increased royalties and maintenance costs, North America's revenue increased by 74% year-on-year. As oilfield service companies increasingly recognize the value of DNR, and the company has acquired a new international customer, international revenue has increased by 37% over the same period last year. Contract service revenue also increased by 65%, reflecting the increase in drill refurbishment. Subsequently, due to increased market penetration and improved market conditions, North American and international revenue increased.

(1) Adjusted EBITDA is a non-GAAP measurement standard, defined as earnings before interest, taxes, depreciation and amortization, non-cash stock compensation expenses, and abnormal items. For important disclosures regarding the use of adjusted EBITDA by SDP and the reconciliation of net losses with adjusted EBITDA, please refer to the attached table.

Higher revenue and lower operating expenses resulted in operating income of US$116,000. Due to the reduction in the cost schedule and amortization expenses related to the end of the year, total operating expenses dropped by 3% compared to the previous first quarter.

The net loss for the quarter actually reached US$67,000, while the net loss for the first quarter was US$1.1 million. The significantly improved operating income offset other expenses, including an asset disposal loss of $11,000. Compared with the first quarter, adjusted EBITDA(1) improved significantly to US$1 million due to increased sales and increased operating leverage, while the adjusted EBITDA margin expanded to 28.2%.

The company believes that when combined with measures prepared in accordance with US Generally Accepted Accounting Principles ("GAAP"), adjusted EBITDA (a non-GAAP measure) helps to understand its operating performance.

Cash at the end of the quarter was US$2.7 million, up from US$2 million at the end of 2020. Cash provided by operations for the six months ended June 30, 2021 was US$400,000. Long-term debt, including the current portion as of June 30, 2021, is $3.2 million. At the end of the quarter, the company paid the Hard Rock bill's next maturity principal of $750,000. The remaining $750,000 in principal on the note will be paid on October 5, 2022.

Definition and composition of product/service revenue:

Contract service income includes maintenance and manufacturing services for drill bits and other tools or products provided to customers.

Other related tool income includes royalties and fleet maintenance fees.

Tool sales/lease income includes income from selling or renting tools to customers.

Tool revenue is the sum of other related tool revenue and tool sales/lease revenue.

The company will host a conference call and webcast at 10:00 am (12:00 pm Eastern Time) this morning to review its quarterly and full-year performance and discuss its corporate strategy and prospects. The discussion will be accompanied by a slide presentation, which will be available on the SDP website www.sdpi.com/events prior to the conference call. After the formal speech, there will be a question and answer session.

The conference call can be accessed by dialing (201) 689-8470. Alternatively, you can monitor webcasts at www.sdpi.com/events. From 1:00 pm on the day of the conference call (3:00 pm EST) to Friday, August 20, 2021, a call replay will be available. To listen to the archived call, please call (412) 317-6671 and enter the conference ID number 13721241, or visit the webcast replay on www.sdpi.com, and the transcript will be posted here as soon as it becomes available.

About Superior Drilling Products, Inc.

Superior Drilling Products, Inc. is an innovative cutting-edge drilling tool technology company that provides cost-saving solutions to improve production efficiency in the oil and gas drilling industry. The company designs, manufactures, repairs and sells drilling tools. SDP drilling solutions include the patented Drill-N-Ream® wellbore dressing tool and the patented Strider™ oscillation system technology. In addition, SDP is a leading oilfield service company's PDC (polycrystalline diamond composite) drill bit manufacturer and refurbishment company. SDP operates the most advanced drilling tool manufacturing facilities, manufacturing solutions and customized products for the drilling industry. The company's growth strategy is to use its expertise in drilling tool technology and innovative precision machining to expand its product supply and solutions in the oil and gas industry.

For more information about the company, please visit: www.sdpi.com.

A safe harbor for forward-looking statements

This press release contains forward-looking statements and information that are subject to many risks and uncertainties, many of which are beyond our control. All statements other than the statements of historical facts contained in this press release, including but not limited to the continued impact of COVID-19 on the business, the company's strategy, future operations, the success of developing future tools, the company's effective strategy and plans for executing the business , Financial conditions, estimated income and losses, estimated costs, prospects, management plans and goals, and ability to exceed performance are all forward-looking statements. Use "may", "believe", "expect", "intend", "estimate", "expect", "may", "continue", "forecast", "potential", "project", "forecast", " "Should" or "plan" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These statements reflect the company's beliefs and expectations, and are subject to risks and uncertainties that may cause actual results to differ materially. These risks and uncertainties include the duration of the COVID-19 pandemic and the related impact on the oil and gas industry, the effectiveness of the successful expansion in the Middle East, the available options for the North American market, the delay in the commercialization of Strider technology, and the company’s business strategy. Success and growth prospects; market success of the company's professional tools, effectiveness of sales work, cash flow and liquidity; financial forecasts and actual operating results; the amount, nature and timing of capital expenditures; availability and conditions of capital; competition and government regulations ; And general economic conditions. These and other factors may adversely affect the company's plans and the results and financial impact described in this article. The company assumes no obligation to modify or update any forward-looking statements to reflect events or circumstances after the date of this agreement.

(1) Adjusted EBITDA refers to the adjusted net income based on income tax, interest, depreciation and amortization and other items indicated in the reconciliation table. The company believes that adjusted EBITDA is an important supplementary measure of operating performance, and uses it to evaluate performance and provide information for operating decisions. However, adjusted EBITDA is not a GAAP financial measure. The company's calculation of adjusted EBITDA should not be used as a substitute for GAAP performance indicators, including net cash provided by operations, operating income and net income. The company's method of calculating adjusted EBITDA may be quite different from that used by other companies. Investors should be careful not to rely on it too much.

Investor relations: Deborah K. Pawlowski, Kei Advisors LLC (716) 843-3908, dpawlowski@keiadvisors.com

Superior Drilling Products, Inc. (NYSE: SDPI) revenue in the second quarter of 2021 increased by 40% to 3.4 million U.S. dollars

Investor relations: Deborah K. Pawlowski, Kei Advisors LLC (716) 843-3908, dpawlowski@keiadvisors.com