- FIRST QUARTER REVENUE OF $129.6
MILLION, UP MODESTLY SEQUENTIALLY AND
YEAR-OVER-YEAR
- FIRST QUARTER OPERATING INCOME OF $8.6 MILLION; EX-ITEMS, $14.9 MILLION, FLAT SEQUENTIALLY, UP 3%
YEAR-OVER-YEAR
- FIRST QUARTER OPERATING MARGINS, EX-ITEMS, OF 12%
- FIRST QUARTER GAAP EPS OF $0.07; EX-ITEMS, $0.19, FLAT SEQUENTIALLY AND
YEAR-OVER-YEAR
- FIRST QUARTER FREE CASH FLOW OF $2.5
MILLION
- COMPANY ANNOUNCES Q2 2024 QUARTERLY DIVIDEND
HOUSTON, April 24,
2024 /PRNewswire/ -- Core Laboratories Inc. (NYSE:
"CLB") ("Core", "Core Lab", or the "Company") reported first
quarter 2024 revenue of $129,600,000. Core's operating income was
$8,600,000, with diluted earnings per
share ("EPS") of $0.07, all in
accordance with U.S. generally accepted accounting principles
("GAAP"). Operating income, ex-items, a non-GAAP financial
measure, was $14,900,000, yielding
operating margins of 12%, and EPS, ex-items, of $0.19. During the first quarter of 2024,
the Company recorded: 1) approximately $3,500,000 of non-cash stock compensation expense
associated with full recognition of unvested awards for employees
who have reached their eligible retirement age, and 2) employee
severance, facility exit and consolidation expenses of $2,600,000. A full reconciliation of
non-GAAP financial measures is included in the attached financial
tables.
Core's CEO, Larry Bruno stated,
"Core Lab delivered modest revenue growth and overcame the typical
sequential seasonal decline in client activity that we often
experience between the fourth and first quarters. Strong
demand for both our Reservoir Description laboratory services and
Production Enhancement's completion diagnostic services drove the
quarter. Core's investments to expand laboratory capabilities in
the Middle East and other
international markets prior to and during the global pandemic are
now delivering results, as long-delayed client analytical projects
progress into the early stages of execution. We expect that
these prior investments in international growth opportunities will
generate superior, long-term returns. Production Enhancement's
sequential financial performance was driven by higher demand for
both U.S. and international completion diagnostics, as Core's
clients seek to evaluate new completion designs for optimizing
hydrocarbon production. Despite quarter-over-quarter softness
in U.S. completion activity, U.S. product sales also improved
sequentially. Core Lab used excess free cash to reduce debt
by $3,000,000 in the first quarter of
2024, and will continue to remain focused on executing strategic
business initiatives while reducing our leverage ratio."
Reservoir Description
Reservoir Description operations are closely correlated with
trends in international and offshore activity levels, with
approximately 80% of revenue sourced from projects originating
outside the U.S. Revenue in the first quarter of 2024 was
$84,200,000, flat sequentially and an
increase of 5% from last year. Operating income on a GAAP
basis was $6,900,000, while operating
income, ex-items, was $11,400,000,
yielding operating margins of 14%. The segment's financial
performance in the first quarter of 2024 reflects a year-over-year
increase in demand for reservoir rock and fluid analysis in both
international and U.S. markets. This growth helped offset
both the typical seasonal decline in client activity that occurs
between the fourth and first quarters, as well as on-going
disruptions to hydrocarbon transportation and trading patterns
caused by the Middle East and
Russia-Ukraine conflicts. While operating
margins remained strong at 14%, sequential margins were somewhat
impacted by the mix of services delivered to Core's clients
compared to the fourth quarter of 2023.
During the first quarter of 2024, Core Laboratories continued to
experience increased industry adoption of its proprietary
web-enabled data management system, RAPID™. A significant
milestone was achieved with the successful installation of RAPID™
by a prominent Middle Eastern National Oil Company ("NOC").
The installation, as part of a platform demonstration, rigorously
tested the system's functionality and is providing the NOC with
centralized, consistent, and easily accessible subsurface data in a
secure format. RAPID™ empowers clients to efficiently
organize, retrieve, archive and analyze vast amounts of geological,
petrophysical, reservoir engineering and reservoir fluid
data. The database facilitates sophisticated queries through
a user-friendly interface, enhancing various predictive and
Artificial Intelligence ("AI") innovations. Utilizing RAPID™
as the primary platform for subsurface data management within this
NOC allows for a more robust digital environment for future AI
projects. Core Lab continues its leadership position in the
digitization of the oil field, bridging data analytical tools with
digitally delivered and archived data.
Also during the first quarter of 2024, Core Lab was engaged to
evaluate conventional cores from the North Slope region of
Alaska. This project brought together Core's proprietary and
patented technologies to help the client optimize their
reservoir. By using a combination of drilling mud tracers
from Core's Production Enhancement segment, along with proprietary
laboratory technologies from Reservoir Description, Core's
InvasionProfiler™ technology package allowed the operator to
quantify the invasion of drilling mud filtrate. The client
will use this data to refine their reservoir model with
tracer-corrected fluid saturation data. A laboratory program
is also under way on the recovered reservoir fluids from this
project to determine the chemical and physical properties of the
hydrocarbons. This comprehensive rock and fluid analytical
program provides the hard data points required to define pay zones,
build and de-risk reservoir models, and predict reservoir
performance.
Production Enhancement
Production Enhancement operations, which are focused on complex
completions in unconventional oil and gas reservoirs in the U.S.,
as well as conventional projects across the globe, posted first
quarter 2024 revenue of $45,400,000,
up over 4% sequentially. The sequential financial performance
reflects both higher demand for completion diagnostic services as
well as improved penetration of completion products in the U.S.,
despite a quarter-over-quarter decline in completion
activity. Operating income on a GAAP basis was $1,600,000, while operating income, ex-items, was
$3,400,000, yielding operating
margins of 8%, an improvement of 200 basis points sequentially,
with incremental margins exceeding 55%.
In the first quarter of 2024, Core Lab's Production Enhancement
engineers introduced new capabilities for its proprietary downhole
Metal Anomaly Tool technology. The Metal Anomaly Tool ("MAT")
is used when preferential alignment of perforating guns are
required to ensure that casing clamps, data cables and control
lines are not cut during the perforating process. The MAT
technology measures magnetic fields induced during fluid flow
around protrusions that surround the casing, such as those caused
by clamps and lines. However, certain reservoir applications
require the use of high-chromium-content well casing to mitigate
corrosion, such as where CO2 or H2S are
present in high concentrations. High-chromium-content casing has
historically created limitations for the MAT technology, as the
metallurgy attenuates the magnetic field peripheral to the
casing. Core's engineers developed a proprietary solution
that allows the MAT technology to identify clamps, cables and lines
behind high-chromium-content casing, reducing operational risks in
real time.
Also during the first quarter of 2024, Core's diagnostic
technologies were employed in two mature U. S. basins to assess
high-profile well completions. In the Eagle Ford, an operator
needed to confirm the performance of refrac treatments in
horizontal wells. The operator enlisted Core Lab to run its
SpectraChem® water tracers to confirm frac fluid placement and
fluid flowback from each of the twenty-one treatment stages.
After the frac job, produced water samples indicated effective
treatment placement and flowback from each refrac stage with one
exception. The outermost toe stage demonstrated a steep production
drop compared to the remainder of the re-completed lateral.
Further analysis indicated there was an obstruction in the toe of
the well. The operator performed a remedial procedure to
remove the obstruction, and production from the toe stage reached a
level of contribution commensurate with the remainder of the
well. In the Permian Basin, Core's proprietary technologies
were utilized to evaluate the effectiveness of a surfactant
additive in horizontal well frac treatments. The objective
was to determine if the surfactant would improve oil recovery in
this very tight shale strata. The operator wanted to
determine the efficacy of the product without having to perform
long-term, multi-well, post-frac comparisons. The operator
enlisted Core to run its proprietary Flow Profiler™ oil tracer
diagnostics across the length of the well to compare production
from treated and untreated stages. The produced oil samples
indicated higher oil contributions from the surfactant-treated
stages. This enabled the operator to quickly take advantage
of this beneficial, and environmentally friendly, surfactant in
upcoming wells.
Liquidity, Free Cash Flow and Dividend
Core continues to focus on maximizing free cash flow ("FCF"), a
non-GAAP financial measure defined as cash from operations less
capital expenditures. For the first quarter of 2024, cash
from operations was approximately $5,500,000 and capital expenditures were
$3,000,000, yielding FCF of
$2,500,000. Cash from
operations was impacted by an increase in working capital, as
accounts receivable grew by $5,700,000 during the quarter. The growth
in accounts receivable occurred in March, reflecting strong sales
in the U.S. market as we exited the quarter.
Core expects the Company to continue generating positive free
cash flow in future quarters. As of March 31, 2024, Core
reduced debt by $3,000,000 from prior
quarter-end to $163,000,000. The
Company's leverage ratio of 1.76 was unchanged compared to prior
quarter-end. The Company will continue applying future free
cash towards reducing debt until the Company reaches its target
leverage ratio (calculated as total net debt divided by trailing
twelve months adjusted EBITDA) of 1.5 times or lower.
On January 31, 2024, Core's Board
of Directors ("Board") announced a quarterly cash dividend of
$0.01 per share of common stock,
which was paid on March 4, 2024 to
shareholders of record on February
12, 2024.
On April 24, 2024, the Board
approved a cash dividend of $0.01 per
share of common stock payable on May 28,
2024 to shareholders of record on May
6, 2024.
Return On Invested Capital
The Board and the Company's Executive Management continue to
focus on strategies that maximize return on invested capital
("ROIC") and FCF, factors that have high correlation to total
shareholder return. Core's commitment to an asset-light
business model and disciplined capital stewardship promote capital
efficiency and are designed to produce more predictable and
superior long-term ROIC.
The Board has established an internal metric to demonstrate ROIC
performance relative to the oilfield service companies listed as
Core's Comp Group by Bloomberg, as the Company continues to believe
superior ROIC will result in higher total shareholder return.
Using Bloomberg's formula, the Company's ROIC for the first quarter
of 2024 was 11.6% and remained relatively flat compared to
prior quarter-end.
Industry and Core Lab Outlook and Guidance
As 2024 unfolds, Core will continue to execute its strategic
plan of technology investments targeted to both solve client
problems and capitalize on Core's growth opportunities. The
Company will also remain focused on maximizing ROIC, generating
free cash and reducing debt. Core Lab maintains its
constructive outlook on international upstream projects for 2024
and anticipates sustainable activity growth in the years ahead to
support crude-oil demand and energy security concerns. Year
to date, crude-oil demand is performing as expected, with an
increase in demand during the first three months of the year.
For the short and long term, increased investment in the
development of onshore and offshore crude-oil fields will be
required to maintain and grow hydrocarbon production. In the
near-term, crude-oil markets remain volatile due to global
recession fears and the uncertainties related to on-going conflicts
in Russia-Ukraine and the Middle
East.
As international activity continues to expand, committed
long-term upstream projects from the Middle East, South Atlantic Margin, certain
areas of Asia Pacific and
West Africa support year-over-year
growth for Core Lab. As such, Core anticipates Reservoir
Description's second quarter 2024 revenue to continue growing;
however, the geopolitical situations in Russia-Ukraine and the Middle East continue to create volatility with
respect to trading patterns and maritime transportation of crude
oil and derived products, potentially impacting demand for the lab
services Core provides to these markets. Turning to the U.S.,
frac spread activity peaked in the fall of 2022; however, the
declines experienced in completion activity during 2023 appear to
have stabilized. Core Lab continues to project completion
activity in 2024 to remain relatively flat compared to 2023.
However, market penetration of Core's proprietary energetic system
and completion diagnostic service technologies are projected to
outperform activity levels.
Reservoir Description's second quarter 2024 revenue is projected
to range from $85,500,000 to
$88,500,000, with operating income of
$12,700,000 to $14,400,000. Core's Production Enhancement
segment's second quarter 2024 revenue is estimated to range from
$44,500,000 to $47,500,000, with operating income of
$1,600,000 to $2,600,000.
The Company's second quarter 2024 revenue is projected to range
from $130,000,000 to $136,000,000, with operating income of
$14,500,000 to $17,300,000, yielding operating margins of
approximately 12%. EPS for the second quarter of 2024 is expected
to be $0.19 to $0.23.
The Company's second quarter 2024 guidance is based on
projections for underlying operations and excludes gains and losses
in foreign exchange. Second quarter 2024 guidance also
assumes an effective tax rate of 20%.
Earnings Call Scheduled
The Company has scheduled a conference call to discuss Core's
first quarter 2024 earnings announcement. The call will begin
at 7:30 a.m. CDT / 8:30 a.m. EDT on Thursday, April 25, 2024. To
listen to the call, please go to Core's website at
www.corelab.com.
Core Laboratories Inc. is a leading provider of proprietary and
patented reservoir description and production enhancement services
and products used to optimize petroleum reservoir
performance. The Company has over 70 offices in more than 50
countries and is located in every major oil-producing province in
the world. This release, as well as other statements we make,
includes forward-looking statements regarding the Company's future
revenue, profitability, business strategies and developments,
demand for the Company's products and services and for products and
services of the oil and gas industry generally, made in reliance
upon the safe harbor provisions of Federal securities law. The
Company's outlook is subject to various important cautionary
factors, including risks and uncertainties related to the oil and
natural gas industry, business and general economic conditions,
including inflationary pressures, the ability to achieve the
benefits of the redomestication of the parent company from
the Netherlands to the United States, international markets,
international political climates, including the Russia-Ukraine and the Middle East geopolitical conflicts, public
health crises, and any related actions taken by businesses and
governments, and other factors as more fully described in the
Company's most recent Forms 10-K, 10-Q and 8-K filed with or
furnished to the U.S. Securities and Exchange Commission. These
important factors could cause the Company's actual results to
differ materially from those described in these forward-looking
statements. Such statements are based on current expectations of
the Company's performance and are subject to a variety of factors,
some of which are not under the control of the Company. Because the
information herein is based solely on data currently available, and
because it is subject to change as a result of changes in
conditions over which the Company has no control or influence, such
forward-looking statements should not be viewed as assurance
regarding the Company's future performance.
The Company undertakes no obligation to publicly update or
revise any forward-looking statement to reflect events or
circumstances that may arise after the date of this press release,
except as required by law.
Visit the Company's website at www.corelab.com. Connect with
Core Lab on Facebook, LinkedIn and YouTube.
CORE LABORATORIES
INC. & SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except
per share data)
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
|
%
Variance
|
|
|
March 31,
2024
|
|
|
December 31,
2023
|
|
|
March 31,
2023
|
|
|
vs.
Q4-23
|
|
vs.
Q1-23
|
REVENUE
|
|
$
|
129,637
|
|
|
$
|
128,210
|
|
|
$
|
128,356
|
|
|
1.1 %
|
|
1.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs of services and
product sales
|
|
|
104,588
|
|
|
|
101,517
|
|
|
|
101,528
|
|
|
3.0 %
|
|
3.0 %
|
General and
administrative expense
|
|
|
11,789
|
|
|
|
8,665
|
|
|
|
16,331
|
|
|
36.1 %
|
|
(27.8) %
|
Depreciation and
amortization
|
|
|
3,843
|
|
|
|
3,874
|
|
|
|
4,044
|
|
|
(0.8) %
|
|
(5.0) %
|
Other (income) expense,
net
|
|
|
846
|
|
|
|
(427)
|
|
|
|
(28)
|
|
|
NM
|
|
NM
|
Total operating
expenses
|
|
|
121,066
|
|
|
|
113,629
|
|
|
|
121,875
|
|
|
6.5 %
|
|
(0.7) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
|
|
8,571
|
|
|
|
14,581
|
|
|
|
6,481
|
|
|
(41.2) %
|
|
32.2 %
|
Interest
expense
|
|
|
3,423
|
|
|
|
3,618
|
|
|
|
3,429
|
|
|
(5.4) %
|
|
(0.2) %
|
Income before income
taxes
|
|
|
5,148
|
|
|
|
10,963
|
|
|
|
3,052
|
|
|
(53.0) %
|
|
68.7 %
|
Income tax
expense
|
|
|
1,658
|
|
|
|
8,529
|
|
|
|
610
|
|
|
(80.6) %
|
|
171.8 %
|
Net income
|
|
|
3,490
|
|
|
|
2,434
|
|
|
|
2,442
|
|
|
43.4 %
|
|
42.9 %
|
Net income attributable
to non-controlling interest
|
|
|
270
|
|
|
|
235
|
|
|
|
69
|
|
|
NM
|
|
NM
|
Net income attributable
to Core Laboratories Inc.
|
|
$
|
3,220
|
|
|
$
|
2,199
|
|
|
$
|
2,373
|
|
|
46.4 %
|
|
35.7 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
|
$
|
0.07
|
|
|
$
|
0.05
|
|
|
$
|
0.05
|
|
|
40.0 %
|
|
40.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share attributable to Core Laboratories Inc.
|
|
$
|
0.07
|
|
|
$
|
0.05
|
|
|
$
|
0.05
|
|
|
40.0 %
|
|
40.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average common shares outstanding
|
|
|
47,703
|
|
|
|
47,557
|
|
|
|
47,481
|
|
|
0.3 %
|
|
0.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax
rate
|
|
|
32
|
%
|
|
|
78
|
%
|
|
|
20
|
%
|
|
NM
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT
INFORMATION:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reservoir
Description
|
|
$
|
84,236
|
|
|
$
|
84,628
|
|
|
$
|
80,188
|
|
|
(0.5) %
|
|
5.0 %
|
Production
Enhancement
|
|
|
45,401
|
|
|
|
43,582
|
|
|
|
48,168
|
|
|
4.2 %
|
|
(5.7) %
|
Consolidated
|
|
$
|
129,637
|
|
|
$
|
128,210
|
|
|
$
|
128,356
|
|
|
1.1 %
|
|
1.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reservoir
Description
|
|
$
|
6,892
|
|
|
$
|
12,259
|
|
|
$
|
2,471
|
|
|
(43.8) %
|
|
178.9 %
|
Production
Enhancement
|
|
|
1,576
|
|
|
|
2,195
|
|
|
|
3,281
|
|
|
(28.2) %
|
|
(52.0) %
|
Corporate and
Other
|
|
|
103
|
|
|
|
127
|
|
|
|
729
|
|
|
NM
|
|
NM
|
Consolidated
|
|
$
|
8,571
|
|
|
$
|
14,581
|
|
|
$
|
6,481
|
|
|
(41.2) %
|
|
32.2 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
"NM" means not
meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CORE LABORATORIES
INC. & SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS
(In
thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
%
Variance
|
ASSETS:
|
|
March 31,
2024
|
|
|
December 31,
2023
|
|
|
vs.
Q4-23
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
14,913
|
|
|
$
|
15,120
|
|
|
(1.4) %
|
Accounts receivable,
net
|
|
|
115,092
|
|
|
|
109,352
|
|
|
5.2 %
|
Inventories
|
|
|
70,711
|
|
|
|
71,702
|
|
|
(1.4) %
|
Other current
assets
|
|
|
28,331
|
|
|
|
26,962
|
|
|
5.1 %
|
Total current
assets
|
|
|
229,047
|
|
|
|
223,136
|
|
|
2.6 %
|
|
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
|
98,521
|
|
|
|
99,626
|
|
|
(1.1) %
|
Right of use
assets
|
|
|
53,636
|
|
|
|
53,842
|
|
|
(0.4) %
|
Intangibles, goodwill
and other long-term assets, net
|
|
|
206,746
|
|
|
|
209,791
|
|
|
(1.5) %
|
Total assets
|
|
$
|
587,950
|
|
|
$
|
586,395
|
|
|
0.3 %
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
32,486
|
|
|
$
|
33,506
|
|
|
(3.0) %
|
Short-term operating
lease liabilities
|
|
|
10,430
|
|
|
|
10,175
|
|
|
2.5 %
|
Other current
liabilities
|
|
|
42,552
|
|
|
|
44,416
|
|
|
(4.2) %
|
Total current
liabilities
|
|
|
85,468
|
|
|
|
88,097
|
|
|
(3.0) %
|
|
|
|
|
|
|
|
|
|
Long-term debt,
net
|
|
|
160,370
|
|
|
|
163,134
|
|
|
(1.7) %
|
Long-term operating
lease liabilities
|
|
|
41,481
|
|
|
|
42,076
|
|
|
(1.4) %
|
Other long-term
liabilities
|
|
|
63,214
|
|
|
|
63,281
|
|
|
(0.1) %
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
237,417
|
|
|
|
229,807
|
|
|
3.3 %
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
equity
|
|
$
|
587,950
|
|
|
$
|
586,395
|
|
|
0.3 %
|
CORE LABORATORIES
INC. & SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In
thousands)
(Unaudited)
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
2024
|
|
|
2023
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
Net income
|
|
$
|
3,490
|
|
|
$
|
2,442
|
|
Adjustments to
reconcile net income to net cash provided by (used in) operating
activities:
|
|
|
|
|
|
|
Stock-based
compensation
|
|
|
4,820
|
|
|
|
8,984
|
|
Depreciation and
amortization
|
|
|
3,843
|
|
|
|
4,044
|
|
Deferred income
taxes
|
|
|
2,827
|
|
|
|
936
|
|
Accounts
receivable
|
|
|
(6,290)
|
|
|
|
(4,024)
|
|
Inventories
|
|
|
991
|
|
|
|
(6,897)
|
|
Accounts
payable
|
|
|
(551)
|
|
|
|
(7,078)
|
|
Other adjustments to
net income
|
|
|
(3,600)
|
|
|
|
(1,576)
|
|
Net cash provided
by (used in) operating activities
|
|
|
5,530
|
|
|
|
(3,169)
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
(3,052)
|
|
|
|
(2,208)
|
|
Net proceeds on life
insurance policies
|
|
|
805
|
|
|
|
—
|
|
Other investing
activities
|
|
|
590
|
|
|
|
170
|
|
Net cash provided
by (used in) investing activities
|
|
|
(1,657)
|
|
|
|
(2,038)
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
Repayment of long-term
debt
|
|
|
(17,000)
|
|
|
|
(16,000)
|
|
Proceeds from long-term
debt
|
|
|
14,000
|
|
|
|
24,000
|
|
Dividends
paid
|
|
|
(468)
|
|
|
|
(466)
|
|
Repurchase of common
stock
|
|
|
(44)
|
|
|
|
(1)
|
|
Equity related
transaction costs
|
|
|
(549)
|
|
|
|
(1,285)
|
|
Other financing
activities
|
|
|
(19)
|
|
|
|
(184)
|
|
Net cash provided
by (used in) financing activities
|
|
|
(4,080)
|
|
|
|
6,064
|
|
|
|
|
|
|
|
|
NET CHANGE IN CASH AND
CASH EQUIVALENTS
|
|
|
(207)
|
|
|
|
857
|
|
CASH AND CASH
EQUIVALENTS, beginning of period
|
|
|
15,120
|
|
|
|
15,428
|
|
CASH AND CASH
EQUIVALENTS, end of period
|
|
$
|
14,913
|
|
|
$
|
16,285
|
|
Non-GAAP Information
Management believes that the exclusion of certain income and
expenses enables it to evaluate more effectively the Company's
operations period-over-period and to identify operating trends that
could otherwise be masked by the excluded Items. For this
reason, management uses certain non-GAAP measures that exclude
these Items and believes that this presentation provides a clearer
comparison with the results reported in prior periods. The non-GAAP
financial measures should be considered in addition to, and not as
a substitute for, the financial results prepared in accordance with
GAAP, as more fully discussed in the Company's financial statements
and filings with the Securities and Exchange Commission.
Reconciliation of
Operating Income, Net Income and Diluted Earnings Per Share
Attributable to Core Laboratories Inc.
(In thousands, except
per share data)
(Unaudited)
|
|
|
|
Operating
Income
|
|
|
|
Three Months
Ended
|
|
|
|
March 31,
2024
|
|
|
December 31,
2023
|
|
|
March 31,
2023
|
|
GAAP
reported
|
|
$
|
8,571
|
|
|
$
|
14,581
|
|
|
$
|
6,481
|
|
Stock compensation
(1)
|
|
|
3,458
|
|
|
|
—
|
|
|
|
6,515
|
|
Loss on lease
abandonment and assets write-down (2)
|
|
|
1,809
|
|
|
|
—
|
|
|
|
1,656
|
|
Severance
costs
|
|
|
824
|
|
|
|
—
|
|
|
|
—
|
|
Foreign exchange losses
(gains)
|
|
|
285
|
|
|
|
468
|
|
|
|
(144)
|
|
Excluding specific
items
|
|
$
|
14,947
|
|
|
$
|
15,049
|
|
|
$
|
14,508
|
|
|
|
|
|
Net Income
Attributable to Core Laboratories Inc.
|
|
|
|
Three Months
Ended
|
|
|
|
March 31,
2024
|
|
|
December 31,
2023
|
|
|
March 31,
2023
|
|
GAAP
reported
|
|
$
|
3,220
|
|
|
$
|
2,199
|
|
|
$
|
2,373
|
|
Stock compensation
(1)
|
|
|
2,766
|
|
|
|
—
|
|
|
|
5,212
|
|
Loss on lease
abandonment and assets write-down (2)
|
|
|
1,447
|
|
|
|
—
|
|
|
|
1,325
|
|
Severance
costs
|
|
|
659
|
|
|
|
—
|
|
|
|
—
|
|
Foreign exchange losses
(gains)
|
|
|
229
|
|
|
|
374
|
|
|
|
(114)
|
|
Reversal of net
deferred tax liabilities and effect of higher (lower) tax rate
(3)
|
|
|
628
|
|
|
|
6,336
|
|
|
|
—
|
|
Excluding specific
items
|
|
$
|
8,949
|
|
|
$
|
8,909
|
|
|
$
|
8,796
|
|
|
|
|
|
Diluted Earnings Per
Share Attributable to Core Laboratories Inc.
|
|
|
|
Three Months
Ended
|
|
|
|
March 31,
2024
|
|
|
December 31,
2023
|
|
|
March 31,
2023
|
|
GAAP
reported
|
|
$
|
0.07
|
|
|
$
|
0.05
|
|
|
$
|
0.05
|
|
Stock compensation
(1)
|
|
|
0.06
|
|
|
|
—
|
|
|
|
0.11
|
|
Loss on lease
abandonment and assets write-down (2)
|
|
|
0.03
|
|
|
|
—
|
|
|
|
0.03
|
|
Severance
costs
|
|
|
0.01
|
|
|
|
—
|
|
|
|
—
|
|
Foreign exchange losses
(gains)
|
|
|
0.01
|
|
|
|
0.01
|
|
|
|
—
|
|
Reversal of net
deferred tax liabilities and effect of higher (lower) tax rate
(3)
|
|
|
0.01
|
|
|
|
0.13
|
|
|
|
—
|
|
Excluding specific
items
|
|
$
|
0.19
|
|
|
$
|
0.19
|
|
|
$
|
0.19
|
|
|
|
|
|
|
|
|
|
|
|
(1) Three months ended March 31, 2024 and 2023
includes the acceleration of stock compensation expense associated
with employees reaching eligible retirement
age.
|
(2) Three months ended March 31, 2024 and 2023
include the write-down of leasehold improvements, right of use
assets and/or other assets and exit costs associated with
consolidation of certain facilities.
|
(3) Three months ended March 31, 2024 includes the
effect to reflect tax expense at a normalized rate of 20%. Three
months ended December 31, 2023 includes the reversal of certain
deferred tax assets and liabilities which will not be realized as a
result of the Redomsestication Transaction and the effect to
reflect tax expense at a normalized rate of
20%.
|
Segment
Information
(In
thousands)
(Unaudited)
|
|
|
|
Operating
Income
|
|
|
|
Three Months Ended
March 31, 2024
|
|
|
|
Reservoir
Description
|
|
|
Production
Enhancement
|
|
|
Corporate and
Other
|
|
GAAP
reported
|
|
$
|
6,892
|
|
|
$
|
1,576
|
|
|
$
|
103
|
|
Stock compensation
(1)
|
|
|
2,258
|
|
|
|
1,200
|
|
|
|
—
|
|
Loss on lease
abandonment and assets write-down (2)
|
|
|
1,566
|
|
|
|
243
|
|
|
|
—
|
|
Severance
costs
|
|
|
467
|
|
|
|
357
|
|
|
|
—
|
|
Foreign exchange losses
(gains)
|
|
|
246
|
|
|
|
38
|
|
|
|
1
|
|
Excluding specific
items
|
|
$
|
11,429
|
|
|
$
|
3,414
|
|
|
$
|
104
|
|
(1) Includes the
acceleration of stock compensation expense associated with
employees reaching eligible retirement age.
|
|
(2) Includes the
write-down of leasehold improvements, right of use assets and/or
other assets and exit costs associated with consolidation of
certain facilities.
|
|
Return on Invested Capital
Return on Invested Capital ("ROIC") is presented based on
management's belief that this non-GAAP measure is useful
information to investors and management when comparing
profitability and the efficiency with which capital has been
employed over time relative to other companies. The Board has
established an internal metric to demonstrate ROIC performance
relative to the oilfield service companies listed as Core's Comp
Group by Bloomberg. ROIC is not a measure of financial performance
under GAAP and should not be considered as an alternative to net
income.
ROIC of 11.6% is defined by Bloomberg as Net Operating Profit
After Tax ("NOPAT") of $46.9 million
divided by Average Total Invested Capital ("Average TIC") of
$403.0 million where NOPAT is defined
as GAAP net income before non-controlling interest plus the sum of
income tax expense, interest expense, and pension expense less
pension service cost and tax effect on income before interest and
tax expense for the last four quarters. Average TIC is defined as
the average of beginning and ending periods' GAAP stockholders'
equity plus the sum of net long-term debt, lease liabilities,
allowance for credit losses, net of deferred taxes, and income
taxes payable.
Free Cash Flow
Core uses the non-GAAP financial measure of free cash flow to
evaluate its cash flows and results of operations. Free cash flow
is an important measurement because it represents the cash from
operations, in excess of capital expenditures, available to operate
the business and fund non-discretionary obligations. Free cash flow
is not a measure of operating performance under GAAP and should not
be considered in isolation nor construed as an alternative
consideration to operating income, net income, or cash flows from
operating, investing, or financing activities, each as determined
in accordance with GAAP. Free cash flow should not be considered a
measure of liquidity. Moreover, since free cash flow is not a
measure determined in accordance with GAAP and thus is susceptible
to varying interpretations and calculations, free cash flow as
presented may not be comparable to similarly titled measures
presented by other companies.
Computation of Free
Cash Flow
(In
thousands)
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
|
|
|
March 31,
2024
|
|
|
Net cash provided by
operating activities
|
|
$
|
5,530
|
|
|
Capital
expenditures
|
|
|
(3,052)
|
|
|
Free cash
flow
|
|
$
|
2,478
|
|
|
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SOURCE Core Laboratories Inc