ChampionX Corporation (NASDAQ: CHX) (“ChampionX” or the
“Company”) today announced second quarter of 2023 results.
Revenue was $926.6 million, net income attributable to ChampionX
was $95.8 million, and adjusted EBITDA was $186.2 million. Income
before income taxes margin was 11.7% and adjusted EBITDA margin was
20.1%. Cash from operating activities was $115.9 million and free
cash flow was $88.8 million.
CEO Commentary
“We continued to demonstrate ChampionX’s strong execution
capabilities during the second quarter as we delivered adjusted
EBITDA growth and adjusted EBITDA margin expansion while continuing
our robust free cash flow generation. We have an unwavering focus
on shareholder value creation and our disciplined framework of
capital allocation, including high-return organic investment and
shareholder returns. I want to thank all our worldwide employees
for their continued dedication and commitment to serving our
customers and communities well. I am thankful and humbled to lead
such a talented and motivated team,” ChampionX’s President and
Chief Executive Officer Sivasankaran “Soma” Somasundaram said.
“During the second quarter of 2023, we generated revenue of $927
million, which decreased 1% year-over-year, and declined 2%
sequentially. Revenues in the quarter were impacted by shipment
delays in Latin America due to customer logistics, Canadian
wildfires, and extended production platform turnarounds in the Gulf
of Mexico. Strong revenue growth in Middle East, Africa, and Europe
was offset by declines in Latin America and Canada. Digital revenue
grew 4% sequentially and 21% year-over-year, driven by continued
strong customer adoption of our fit-for-purpose digital solutions.
We generated net income attributable to ChampionX of $96 million,
which increased 250% year-over-year and 51% sequentially, and
adjusted EBITDA of $186 million, which increased 35% year-over-year
and 6% sequentially. Our income before income taxes margin improved
by approximately 874 basis points year-over-year and 200 basis
points sequentially, and our adjusted EBITDA margin expanded by
approximately 527 basis points year-over-year and 158 basis points
sequentially in the second quarter, on productivity improvements
and increased pricing realization.
“Cash flow from operating activities was $116 million during the
second quarter, which represented 121% of net income attributable
to ChampionX, and we generated strong free cash flow of $89 million
during the period, which represented 48% of our adjusted EBITDA for
the period. Through our regular cash dividend of $17 million and
$51 million of ChampionX share repurchases, we returned 58% of cash
from operating activities and 76% of our free cash flow in the
second quarter to our shareholders. Our balance sheet and financial
position remain strong, ending the second quarter with $932 million
of liquidity, including $263 million of cash and $669 million of
available capacity on our revolving credit facility.
“As we look to the third quarter, we expect an increase in our
international businesses and continued positive momentum in our
North American production-oriented businesses. We are already
seeing good volume pick-up in the month of July as the factors
which impacted our second quarter volumes resolve. On a
consolidated basis, in the third quarter, we expect revenue to be
between $960 million and $990 million. We expect adjusted EBITDA of
$199 million to $207 million. We remain focused on driving margin
expansion and we now expect to deliver an exit rate of 21% in the
fourth quarter of this year. Our cash generation remains strong,
and for the full year, we still expect to convert at least 50% of
our adjusted EBITDA to free cash flow, and we remain committed to
returning at least 60% of our free cash flow to our shareholders
for the year.”
Production Chemical Technologies
Production Chemical Technologies revenue in the second quarter
of 2023 was $574.3 million, a decrease of $17.4 million, or 3%,
sequentially, due to no longer recognizing revenue or expenses in
Russia, and shipment delays due to customer logistics. Growth in
the Middle East, Africa, and Europe was offset by a decline in
Latin America.
Segment operating profit was $87.2 million and adjusted segment
EBITDA was $116.8 million. Segment operating profit margin was
15.2%, an increase of 397 basis points, sequentially, and adjusted
segment EBITDA margin was 20.3%, an increase of 258 basis points,
sequentially. The increase in segment operating profit margin and
adjusted segment EBITDA margin reflects positive impact from raw
materials and productivity initiatives.
Production & Automation Technologies
Production & Automation Technologies revenue in the second
quarter of 2023 was $254.2 million, an increase of $2.6 million, or
1%, sequentially, due to higher demand in our businesses in the
U.S. and internationally, offset by a decrease in Canada due to
wildfires.
Revenue from digital products was $60.2 million in the second
quarter of 2023, up 4% sequentially, and up 21% year-over-year.
Segment operating profit was $33.2 million and adjusted segment
EBITDA was $60.7 million. Segment operating profit margin was
13.1%, a decrease of 77 basis points, sequentially, and adjusted
segment EBITDA margin was 23.9%, an increase of 11 basis points,
sequentially. Operating profit margin decreased due to depreciation
expense from additional capital invested in the segment while the
increase in adjusted EBITDA margin was driven by higher sales
volumes, and product mix.
Drilling Technologies
Drilling Technologies revenue in the second quarter of 2023 was
$57.3 million, an increase of $0.6 million, or 1%, sequentially,
driven by product mix.
Segment operating profit was $12.7 million and adjusted segment
EBITDA was $14.4 million. Segment operating profit margin was
22.1%, an increase of 112 basis points, sequentially, and adjusted
segment EBITDA margin was 25.1%, an increase of 134 basis points,
sequentially, in each case due to improved processing costs.
Reservoir Chemical Technologies
Reservoir Chemical Technologies revenue in the second quarter
2023 was $23.9 million, a decrease of $2.0 million, or 8%,
sequentially, driven by lower sales volumes.
Segment operating profit was $2.2 million and adjusted segment
EBITDA was $4.2 million. Segment operating profit margin was 9.2%,
an increase of 146 basis points, sequentially, and adjusted segment
EBITDA margin was 17.7%, an increase of 217 basis points,
sequentially, in each case driven by continued benefit from cost
reduction initiatives associated with the exit of certain product
lines.
Q2 2023 Other Business Highlights
- ChampionX ranked first in customer satisfaction in six specific
categories (Production Chemicals, Artificial Lift, Intelligent
Sensors & Controls, Downhole Completion Equipment, Completion
Fluids, and Surface Production Equipment) in a survey conducted by
EnergyPoint Research, Inc., an independent customer satisfaction
research firm.
- ChampionX was recognized in Norway by ConocoPhillips with the
2022 Supplier Recognition Award (Focus in Execution), acknowledging
our asset integrity program in the Greater Ekofisk area. The award
recognizes those suppliers that exhibit exceptional leadership in
observance of ConocoPhillips’ SPIRIT values.
- Chemical Technologies secured a multi-year contract extension
in offshore Western Australia with a global energy company, which
affords opportunities for further business growth with new asset
start-ups in the next several years.
- Chemical Technologies continues to experience growth in the
Gulf of Mexico with key oil and gas customers.
- Chemical Technologies won contracts in multiple countries in
the MENA region which will help support oil and gas field
development projects via our corrosion inhibition chemistries.
- Production & Automation Technologies continues to
experience strong customer demand for ESPs, in particular its HIGH
RISE™ series pumps and PowerFit motors.
- Digital revenue growth reflective of increasing customer focus
on implementing digital technologies to reduce emissions and drive
operational and cost improvements.
- Emissions Technologies has successfully completed field/plant
trials for its high-resolution, Optical Gas Imaging (OGI) camera,
AURA OGI™, which we expect to be available later this year.
- Drilling Technologies experienced robust demand for US
Synthetic diamond bearings and has strong bookings for delivery
through year-end 2023.
- ChampionX was recently named a winner in Hart Energy’s annual
ESG Awards program. The Energy ESG Awards recognize energy
companies making a significant impact on environmental, social or
governance objectives in the field, their communities and their
businesses. The awards honor excellence in six categories across
the industry for proven innovations in reducing environmental
impact, making social and community contributions, and showing
innovative leadership practices/directives within their company
cultures.
Conference Call Details
ChampionX Corporation will host a conference call on Tuesday,
July 25, 2023, to discuss its second quarter 2023 financial results
and outlook. The call will begin at 9:00 a.m. Eastern Time.
Presentation materials that supplement the conference call will be
available on ChampionX’s website at investors.championx.com.
To listen to the call via a live webcast, please visit
ChampionX’s website at investor.championx.com. The call will also
be available by dialing 1-888-886-7786 in the United States or
1-416-764-8658 for international calls. Please call approximately
15 minutes prior to the scheduled start time and reference
ChampionX conference call number 96181485.
A replay of the conference call will be available for 30 days on
ChampionX’s website.
About Non-GAAP Measures
In addition to financial results determined in accordance with
generally accepted accounting principles in the United States
(“GAAP”), this news release presents non-GAAP financial measures.
Management believes that adjusted EBITDA, adjusted EBITDA margin,
adjusted segment EBITDA, adjusted segment EBITDA margin, adjusted
net income attributable to ChampionX and adjusted diluted earnings
per share attributable to ChampionX, provide useful information to
investors regarding the Company’s financial condition and results
of operations because they reflect the core operating results of
our businesses and help facilitate comparisons of operating
performance across periods. In addition, free cash flow, free cash
flow to adjusted EBITDA ratio, and free cash flow to revenue ratio
provide useful information to investors because they reflect the
core operating results of our businesses and help facilitate
comparisons of operating performance across periods. In addition,
these measures are used by management to measure our ability to
generate positive cash flow for debt reduction and to support our
strategic objectives. Although management believes the
aforementioned non-GAAP financial measures are good tools for
internal use and the investment community in evaluating ChampionX’s
overall financial performance, the foregoing non-GAAP financial
measures should be considered in addition to, not as a substitute
for or superior to, other measures of financial performance
prepared in accordance with GAAP. A reconciliation of these
non-GAAP measures to the most directly comparable GAAP measures is
included in the accompanying financial tables.
This press release contains certain forward-looking non-GAAP
financial measures, including adjusted EBITDA. The Company has not
provided projected net income attributable to ChampionX or a
reconciliation of projected adjusted EBITDA. Management cannot
predict with a reasonable degree of accuracy certain of the
necessary components of net income attributable to ChampionX, such
as depreciation and amortization expense. As such, a reconciliation
of projected adjusted EBITDA to projected net income attributable
to ChampionX is not available without unreasonable effort. The
actual amount of depreciation and amortization, in particular, and
other amounts excluded from adjusted EBITDA will have a significant
impact on net income attributable to ChampionX.
About ChampionX
ChampionX is a global leader in chemistry solutions, artificial
lift systems, and highly engineered equipment and technologies that
help companies drill for and produce oil and gas safely,
efficiently, and sustainably around the world. ChampionX’s
expertise, innovative products, and digital technologies provide
enhanced oil and gas production, transportation, and real-time
emissions monitoring throughout the lifecycle of a well. To learn
more about ChampionX, visit our website at www.championX.com.
Forward-Looking Statements
This news release contains statements relating to future actions
and results, which are "forward-looking statements" within the
meaning of the Securities Exchange Act of 1934, as amended, and the
Private Securities Litigation Reform Act of 1995. Such statements
relate to, among other things, ChampionX's market position and
growth opportunities. Forward-looking statements include
statements related to ChampionX’s expectations regarding the
performance of the business, financial results, liquidity and
capital resources of ChampionX. Forward-looking statements are
subject to inherent risks and uncertainties that could cause actual
results to differ materially from current expectations, including,
but not limited to, changes in economic, competitive, strategic,
technological, tax, regulatory or other factors that affect the
operations of ChampionX’s businesses. You are encouraged to refer
to the documents that ChampionX files from time to time with the
Securities and Exchange Commission (“SEC”), including the “Risk
Factors” in ChampionX’s Annual Report on Form 10-K for the fiscal
year ended December 31, 2022, and in ChampionX’s other filings with
the SEC. Readers are cautioned not to place undue reliance on
ChampionX’s forward-looking statements. Forward-looking statements
speak only as of the day they are made and ChampionX
undertakes no obligation to update any forward-looking statement,
except as required by applicable law.
Investor Contact: Byron
Popebyron.pope@championx.com281-602-0094
Media Contact: John
Breedjohn.breed@championx.com281-403-5751
CHAMPIONX CORPORATIONCONDENSED
CONSOLIDATED STATEMENTS OF
INCOME(UNAUDITED)
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
(in thousands, except per share amounts) |
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
Revenue |
$ |
926,600 |
|
|
$ |
948,347 |
|
|
$ |
932,572 |
|
|
$ |
1,874,947 |
|
$ |
1,798,532 |
Cost of goods and services |
|
644,394 |
|
|
|
664,992 |
|
|
|
720,684 |
|
|
|
1,309,386 |
|
|
1,379,034 |
Gross
profit |
|
282,206 |
|
|
|
283,355 |
|
|
|
211,888 |
|
|
|
565,561 |
|
|
419,498 |
Costs and expenses: |
|
|
|
|
|
|
|
|
|
Selling, general and administrative expense |
|
162,484 |
|
|
|
160,816 |
|
|
|
141,351 |
|
|
|
323,300 |
|
|
291,711 |
Loss on disposal group |
|
— |
|
|
|
12,965 |
|
|
|
22,924 |
|
|
|
12,965 |
|
|
22,924 |
Interest expense, net |
|
14,544 |
|
|
|
12,466 |
|
|
|
10,765 |
|
|
|
27,010 |
|
|
22,128 |
Other expense (income), net |
|
(3,104 |
) |
|
|
5,295 |
|
|
|
9,357 |
|
|
|
2,191 |
|
|
10,677 |
Income before income
taxes |
|
108,282 |
|
|
|
91,813 |
|
|
|
27,491 |
|
|
|
200,095 |
|
|
72,058 |
Provision for (benefit from)
income taxes |
|
11,656 |
|
|
|
28,669 |
|
|
|
(1,405 |
) |
|
|
40,325 |
|
|
4,989 |
Net income |
|
96,626 |
|
|
|
63,144 |
|
|
|
28,896 |
|
|
|
159,770 |
|
|
67,069 |
Net income (loss) attributable to noncontrolling interest |
|
829 |
|
|
|
(388 |
) |
|
|
1,554 |
|
|
|
441 |
|
|
3,025 |
Net income attributable
to ChampionX |
$ |
95,797 |
|
|
$ |
63,532 |
|
|
$ |
27,342 |
|
|
$ |
159,329 |
|
$ |
64,044 |
|
|
|
|
|
|
|
|
|
|
Earnings per share attributable
to ChampionX: |
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.49 |
|
|
$ |
0.32 |
|
|
$ |
0.13 |
|
|
$ |
0.81 |
|
$ |
0.32 |
Diluted |
$ |
0.48 |
|
|
$ |
0.31 |
|
|
$ |
0.13 |
|
|
$ |
0.79 |
|
$ |
0.31 |
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
outstanding: |
|
|
|
|
|
|
|
|
|
Basic |
|
197,034 |
|
|
|
198,286 |
|
|
|
203,322 |
|
|
|
197,657 |
|
|
203,200 |
Diluted |
|
200,735 |
|
|
|
202,440 |
|
|
|
208,714 |
|
|
|
201,694 |
|
|
208,863 |
CHAMPIONX CORPORATIONCONDENSED
CONSOLIDATED BALANCE
SHEETS(UNAUDITED)
(in
thousands) |
June 30, 2023 |
|
December 31, 2022 |
ASSETS |
|
|
|
Current Assets: |
|
|
|
Cash and cash equivalents |
$ |
263,088 |
|
|
$ |
250,187 |
|
Receivables, net |
|
522,106 |
|
|
|
601,061 |
|
Inventories, net |
|
599,040 |
|
|
|
542,543 |
|
Prepaid expenses and other current assets |
|
100,597 |
|
|
|
104,790 |
|
Total current assets |
|
1,484,831 |
|
|
|
1,498,581 |
|
|
|
|
|
Property, plant and equipment,
net |
|
757,841 |
|
|
|
734,810 |
|
Goodwill |
|
669,067 |
|
|
|
679,488 |
|
Intangible assets, net |
|
270,599 |
|
|
|
305,010 |
|
Other non-current assets |
|
147,500 |
|
|
|
169,594 |
|
Total
assets |
$ |
3,329,838 |
|
|
$ |
3,387,483 |
|
|
|
|
|
LIABILITIES AND
EQUITY |
|
|
|
Current Liabilities: |
|
|
|
Current portion of long-term debt |
$ |
6,250 |
|
|
$ |
6,250 |
|
Accounts payable |
|
550,827 |
|
|
|
469,566 |
|
Other current liabilities |
|
257,378 |
|
|
|
383,160 |
|
Total current liabilities |
|
814,455 |
|
|
|
858,976 |
|
|
|
|
|
Long-term debt |
|
595,165 |
|
|
|
621,702 |
|
Other long-term
liabilities |
|
207,896 |
|
|
|
229,590 |
|
Stockholders’ equity: |
|
|
|
ChampionX stockholders’ equity |
|
1,730,031 |
|
|
|
1,694,550 |
|
Noncontrolling interest |
|
(17,709 |
) |
|
|
(17,335 |
) |
Total liabilities and
equity |
$ |
3,329,838 |
|
|
$ |
3,387,483 |
|
CHAMPIONX CORPORATIONCONDENSED
CONSOLIDATED STATEMENTS OF CASH
FLOWS(UNAUDITED)
|
Six Months Ended June 30, |
(in thousands) |
|
2023 |
|
|
|
2022 |
|
Cash flows from
operating activities: |
|
|
|
Net income |
$ |
159,770 |
|
|
$ |
67,069 |
|
Depreciation and amortization |
|
115,387 |
|
|
|
117,229 |
|
Loss on disposal group |
|
12,965 |
|
|
|
22,924 |
|
Deferred income taxes |
|
(22,187 |
) |
|
|
(34,386 |
) |
Gain on disposal of fixed assets |
|
(1,070 |
) |
|
|
(6,284 |
) |
Loss on debt extinguishment |
|
— |
|
|
|
4,043 |
|
Receivables |
|
83,589 |
|
|
|
(42,456 |
) |
Inventories |
|
(70,040 |
) |
|
|
(81,935 |
) |
Leased assets |
|
(22,125 |
) |
|
|
(13,949 |
) |
Other assets |
|
3,135 |
|
|
|
16,133 |
|
Accounts payable |
|
40,632 |
|
|
|
21,507 |
|
Other operating items, net |
|
(91,768 |
) |
|
|
(38,780 |
) |
Net cash flows
provided by operating activities |
|
208,288 |
|
|
|
31,115 |
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
Capital expenditures |
|
(57,277 |
) |
|
|
(53,555 |
) |
Proceeds from sale of fixed assets |
|
7,109 |
|
|
|
14,946 |
|
Acquisitions, net of cash acquired |
|
— |
|
|
|
(3,198 |
) |
Net cash used for
investing activities |
|
(50,168 |
) |
|
|
(41,807 |
) |
|
|
|
|
Cash flows from
financing activities: |
|
|
|
Proceeds from long-term debt |
|
15,500 |
|
|
|
844,838 |
|
Repayment of long-term debt |
|
(43,633 |
) |
|
|
(869,987 |
) |
Debt issuance costs |
|
— |
|
|
|
(8,008 |
) |
Repurchases of common stock |
|
(91,617 |
) |
|
|
(20,016 |
) |
Dividends paid |
|
(31,591 |
) |
|
|
(15,465 |
) |
Other |
|
6,100 |
|
|
|
(5,725 |
) |
Net cash used for
financing activities |
|
(145,241 |
) |
|
|
(74,363 |
) |
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents |
|
22 |
|
|
|
659 |
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents |
|
12,901 |
|
|
|
(84,396 |
) |
Cash and cash equivalents at
beginning of period |
|
250,187 |
|
|
|
255,178 |
|
Cash and cash
equivalents at end of period |
$ |
263,088 |
|
|
$ |
170,782 |
|
CHAMPIONX CORPORATIONBUSINESS SEGMENT
DATA(UNAUDITED)
|
Three Months Ended |
|
June 30, |
|
March 31, |
|
June 30, |
(in thousands) |
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
Segment
revenue: |
|
|
|
|
|
Production Chemical
Technologies |
$ |
574,302 |
|
|
$ |
591,684 |
|
|
$ |
552,411 |
|
Production & Automation
Technologies |
|
254,156 |
|
|
|
251,548 |
|
|
|
242,399 |
|
Drilling Technologies |
|
57,324 |
|
|
|
56,707 |
|
|
|
57,858 |
|
Reservoir Chemical
Technologies |
|
23,853 |
|
|
|
25,806 |
|
|
|
44,114 |
|
Corporate and other |
|
16,965 |
|
|
|
22,602 |
|
|
|
35,790 |
|
Total revenue |
$ |
926,600 |
|
|
$ |
948,347 |
|
|
$ |
932,572 |
|
|
|
|
|
|
|
Income
before income taxes: |
|
|
|
|
Segment operating
profit (loss): |
|
|
|
|
|
Production Chemical
Technologies |
$ |
87,163 |
|
|
$ |
66,314 |
|
|
$ |
25,606 |
|
Production & Automation
Technologies |
|
33,208 |
|
|
|
34,792 |
|
|
|
23,650 |
|
Drilling Technologies |
|
12,660 |
|
|
|
11,887 |
|
|
|
15,043 |
|
Reservoir Chemical
Technologies |
|
2,186 |
|
|
|
1,987 |
|
|
|
(8,147 |
) |
Total segment operating profit |
|
135,217 |
|
|
|
114,980 |
|
|
|
56,152 |
|
Corporate and other |
|
12,391 |
|
|
|
10,701 |
|
|
|
17,896 |
|
Interest expense, net |
|
14,544 |
|
|
|
12,466 |
|
|
|
10,765 |
|
Income before income taxes |
$ |
108,282 |
|
|
$ |
91,813 |
|
|
$ |
27,491 |
|
|
|
|
|
|
|
Operating profit
margin / income before income taxes margin: |
|
|
|
|
|
Production Chemical
Technologies |
|
15.2 |
% |
|
|
11.2 |
% |
|
|
4.6 |
% |
Production & Automation
Technologies |
|
13.1 |
% |
|
|
13.8 |
% |
|
|
9.8 |
% |
Drilling Technologies |
|
22.1 |
% |
|
|
21.0 |
% |
|
|
26.0 |
% |
Reservoir Chemical
Technologies |
|
9.2 |
% |
|
|
7.7 |
% |
|
|
(18.5 |
)% |
ChampionX Consolidated |
|
11.7 |
% |
|
|
9.7 |
% |
|
|
2.9 |
% |
|
|
|
|
|
|
Adjusted
EBITDA |
|
|
|
|
|
Production Chemical
Technologies |
$ |
116,790 |
|
|
$ |
105,060 |
|
|
$ |
78,238 |
|
Production & Automation
Technologies |
|
60,711 |
|
|
|
59,814 |
|
|
|
48,533 |
|
Drilling Technologies |
|
14,376 |
|
|
|
13,463 |
|
|
|
17,088 |
|
Reservoir Chemical
Technologies |
|
4,213 |
|
|
|
3,999 |
|
|
|
(305 |
) |
Corporate and other |
|
(9,848 |
) |
|
|
(6,729 |
) |
|
|
(5,286 |
) |
Adjusted EBITDA |
$ |
186,242 |
|
|
$ |
175,607 |
|
|
$ |
138,268 |
|
|
|
|
|
|
|
Adjusted EBITDA
margin |
|
|
|
|
|
Production Chemical
Technologies |
|
20.3 |
% |
|
|
17.8 |
% |
|
|
14.2 |
% |
Production & Automation
Technologies |
|
23.9 |
% |
|
|
23.8 |
% |
|
|
20.0 |
% |
Drilling Technologies |
|
25.1 |
% |
|
|
23.7 |
% |
|
|
29.5 |
% |
Reservoir Chemical
Technologies |
|
17.7 |
% |
|
|
15.5 |
% |
|
|
(0.7 |
)% |
ChampionX Consolidated |
|
20.1 |
% |
|
|
18.5 |
% |
|
|
14.8 |
% |
CHAMPIONX CORPORATIONRECONCILIATIONS OF
GAAP TO NON-GAAP FINANCIAL
MEASURES(UNAUDITED)
|
Three Months Ended |
|
June 30, |
|
March 31, |
|
June 30, |
(in thousands) |
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
Net income
attributable to ChampionX |
$ |
95,797 |
|
|
$ |
63,532 |
|
|
$ |
27,342 |
|
Pre-tax adjustments: |
|
|
|
|
|
Loss on disposal group (1) |
|
— |
|
|
|
12,965 |
|
|
|
22,924 |
|
Russia sanctions compliance and impacts (2) |
|
433 |
|
|
|
521 |
|
|
|
5,457 |
|
Loss on debt extinguishment and modification |
|
— |
|
|
|
— |
|
|
|
6,070 |
|
Restructuring and other related charges |
|
5,353 |
|
|
|
4,399 |
|
|
|
5,302 |
|
Merger integration costs |
|
— |
|
|
|
245 |
|
|
|
3,865 |
|
Acquisition costs and related adjustments (3) |
|
(2,341 |
) |
|
|
(3,512 |
) |
|
|
(3,512 |
) |
Intellectual property defense |
|
687 |
|
|
|
— |
|
|
|
376 |
|
Tulsa, Oklahoma storm damage |
|
607 |
|
|
|
— |
|
|
|
— |
|
Tax impact of adjustments |
|
(1,478 |
) |
|
|
(4,561 |
) |
|
|
(8,501 |
) |
Adjusted net income
attributable to ChampionX |
|
99,058 |
|
|
|
73,589 |
|
|
|
59,323 |
|
Tax impact of adjustments |
|
1,478 |
|
|
|
4,561 |
|
|
|
8,501 |
|
Net income (loss) attributable
to noncontrolling interest |
|
829 |
|
|
|
(388 |
) |
|
|
1,554 |
|
Depreciation and
amortization |
|
58,677 |
|
|
|
56,710 |
|
|
|
59,530 |
|
Provision for (benefit from)
income taxes |
|
11,656 |
|
|
|
28,669 |
|
|
|
(1,405 |
) |
Interest expense, net |
|
14,544 |
|
|
|
12,466 |
|
|
|
10,765 |
|
Adjusted
EBITDA |
$ |
186,242 |
|
|
$ |
175,607 |
|
|
$ |
138,268 |
|
_______________________
(1) Amounts represent the loss recorded to properly adjust the
carrying value of our CT Russia Business to the lower of carrying
value or fair value less costs to sell. (2) Includes charges
incurred related to legal and professional fees to comply with, as
well as additional foreign currency exchange losses associated
with, the sanctions imposed in Russia.(3) Includes
revenue associated with the amortization of a liability established
as part of the Merger, representing unfavorable terms under the
Cross Supply Agreement, as well as costs incurred for the
acquisition of businesses.
|
Three Months Ended |
|
June 30, |
|
March 31, |
|
June 30, |
(in thousands) |
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
Diluted earnings per
share attributable to ChampionX |
$ |
0.48 |
|
|
$ |
0.31 |
|
|
$ |
0.13 |
|
Per share adjustments: |
|
|
|
|
|
Loss on disposal group |
|
— |
|
|
|
0.06 |
|
|
|
0.11 |
|
Russia sanctions compliance and impacts |
|
— |
|
|
|
— |
|
|
|
0.03 |
|
Loss on debt extinguishment and modification |
|
— |
|
|
|
— |
|
|
|
0.03 |
|
Restructuring and other related charges |
|
0.03 |
|
|
|
0.03 |
|
|
|
0.03 |
|
Merger integration costs |
|
— |
|
|
|
— |
|
|
|
0.02 |
|
Acquisition costs and related adjustments |
|
(0.01 |
) |
|
|
(0.02 |
) |
|
|
(0.02 |
) |
Intellectual property defense |
|
— |
|
|
|
— |
|
|
|
— |
|
Tulsa, Oklahoma storm damage |
|
— |
|
|
|
— |
|
|
|
— |
|
Tax impact of adjustments |
|
(0.01 |
) |
|
|
(0.02 |
) |
|
|
(0.05 |
) |
Adjusted diluted
earnings per share attributable to ChampionX |
$ |
0.49 |
|
|
$ |
0.36 |
|
|
$ |
0.28 |
|
CHAMPIONX CORPORATIONRECONCILIATIONS OF
GAAP TO NON-GAAP FINANCIAL MEASURES BY
SEGMENT(UNAUDITED)
|
Three Months Ended |
|
June 30, |
|
March 31, |
|
June 30, |
(in thousands) |
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
Production Chemical
Technologies |
|
|
|
|
|
Segment operating profit |
$ |
87,163 |
|
|
$ |
66,314 |
|
|
$ |
25,606 |
|
Non-GAAP adjustments |
|
3,944 |
|
|
|
14,567 |
|
|
|
28,567 |
|
Depreciation and amortization |
|
25,683 |
|
|
|
24,179 |
|
|
|
24,065 |
|
Segment adjusted EBITDA |
$ |
116,790 |
|
|
$ |
105,060 |
|
|
$ |
78,238 |
|
|
|
|
|
|
|
Production &
Automation Technologies |
|
|
|
|
|
Segment operating profit |
$ |
33,208 |
|
|
$ |
34,792 |
|
|
$ |
23,650 |
|
Non-GAAP adjustments |
|
1,082 |
|
|
|
785 |
|
|
|
166 |
|
Depreciation and amortization |
|
26,421 |
|
|
|
24,237 |
|
|
|
24,717 |
|
Segment adjusted EBITDA |
$ |
60,711 |
|
|
$ |
59,814 |
|
|
$ |
48,533 |
|
|
|
|
|
|
|
Drilling
Technologies |
|
|
|
|
|
Segment operating profit |
$ |
12,660 |
|
|
$ |
11,887 |
|
|
$ |
15,043 |
|
Non-GAAP adjustments |
|
212 |
|
|
|
— |
|
|
|
376 |
|
Depreciation and amortization |
|
1,504 |
|
|
|
1,576 |
|
|
|
1,669 |
|
Segment adjusted EBITDA |
$ |
14,376 |
|
|
$ |
13,463 |
|
|
$ |
17,088 |
|
|
|
|
|
|
|
Reservoir Chemical
Technologies |
|
|
|
|
|
Segment operating profit |
$ |
2,186 |
|
|
$ |
1,987 |
|
|
$ |
(8,147 |
) |
Non-GAAP adjustments |
|
428 |
|
|
|
395 |
|
|
|
4,000 |
|
Depreciation and amortization |
|
1,599 |
|
|
|
1,617 |
|
|
|
3,842 |
|
Segment adjusted EBITDA |
$ |
4,213 |
|
|
$ |
3,999 |
|
|
$ |
(305 |
) |
|
|
|
|
|
|
Corporate and
other |
|
|
|
|
|
Segment operating profit |
$ |
(26,935 |
) |
|
$ |
(23,167 |
) |
|
$ |
(28,661 |
) |
Non-GAAP adjustments |
|
(927 |
) |
|
|
(1,129 |
) |
|
|
7,373 |
|
Depreciation and amortization |
|
3,470 |
|
|
|
5,101 |
|
|
|
5,237 |
|
Interest expense, net |
|
14,544 |
|
|
|
12,466 |
|
|
|
10,765 |
|
Segment adjusted EBITDA |
$ |
(9,848 |
) |
|
$ |
(6,729 |
) |
|
$ |
(5,286 |
) |
Free Cash Flow
|
Three Months Ended |
|
June 30, |
|
March 31, |
|
June 30, |
(in thousands) |
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
Free Cash
Flow |
|
|
|
|
|
Cash flows from operating
activities |
$ |
115,910 |
|
|
$ |
92,378 |
|
|
$ |
74,240 |
|
Less: Capital expenditures,
net of proceeds from sale of fixed assets |
|
(27,143 |
) |
|
|
(23,025 |
) |
|
|
(20,743 |
) |
Free cash flow |
$ |
88,767 |
|
|
$ |
69,353 |
|
|
$ |
53,497 |
|
|
|
|
|
|
|
Cash From Operating
Activities to Revenue Ratio |
|
|
|
|
|
Cash flows from operating
activities |
$ |
115,910 |
|
|
$ |
92,378 |
|
|
$ |
74,240 |
|
Revenue |
$ |
926,600 |
|
|
$ |
948,347 |
|
|
$ |
932,572 |
|
|
|
|
|
|
|
Cash from operating activities
to revenue ratio |
|
13 |
% |
|
|
10 |
% |
|
|
8 |
% |
|
|
|
|
|
|
Free Cash Flow to
Revenue Ratio |
|
|
|
|
|
Free cash flow |
$ |
88,767 |
|
|
$ |
69,353 |
|
|
$ |
53,497 |
|
Revenue |
$ |
926,600 |
|
|
$ |
948,347 |
|
|
$ |
932,572 |
|
|
|
|
|
|
|
Free cash flow to revenue
ratio |
|
10 |
% |
|
|
7 |
% |
|
|
6 |
% |
|
|
|
|
|
|
Free Cash Flow to
Adjusted EBITDA Ratio |
|
|
|
|
|
Free cash flow |
$ |
88,767 |
|
|
$ |
69,353 |
|
|
$ |
53,497 |
|
Adjusted EBITDA |
$ |
186,242 |
|
|
$ |
175,607 |
|
|
$ |
138,268 |
|
|
|
|
|
|
|
Free cash flow to adjusted
EBITDA ratio |
|
48 |
% |
|
|
39 |
% |
|
|
39 |
% |
ChampionX (NASDAQ:CHX)
Graphique Historique de l'Action
De Mai 2024 à Juin 2024
ChampionX (NASDAQ:CHX)
Graphique Historique de l'Action
De Juin 2023 à Juin 2024