AMSTERDAM, April 19, 2017
/PRNewswire/ -- Core Laboratories N.V. (NYSE: "CLB US" and
Euronext Amsterdam: "CLB NA") ("Core", "Core Lab", or the
"Company") today reported first quarter 2017 results as summarized
in the discussion below, which highlights certain GAAP and non-GAAP
financial measures on a consolidated basis.
HIGHLIGHTS:
- REVENUE OF $158 MILLION, UP
MORE THAN 5% SEQUENTIALLY FROM 4Q 2016
- U.S. PRODUCTION ENHANCEMENT LAND REVENUE UP 32%
SEQUENTIALLY; U.S. WELL COMPLETIONS UP 23%
- GAAP EPS OF $0.40, EX-ITEMS
EPS OF $0.42
- FCF OF $23+ MILLION WAS 132% OF NET INCOME
- FCF/REVENUE CONVERSION RATE OF 15%
- COMPANY GUIDES CONTINUED GROWTH FOR 2Q REVENUE, OPERATING
EARNINGS AND EPS OF $0.48 TO
$0.52
Core Laboratories reported first quarter 2017 revenue of
$157,800,000, up more than 5%
sequentially from its fourth quarter 2016 revenue, with operating
income and net income of $23,200,000
and $17,700,000, respectively and
earnings per diluted share ("EPS") of $0.40, all in accordance with U.S. generally
accepted accounting principles ("GAAP").
Core's continuing efforts to streamline its business have led to
a simplification of its reporting segment structure, and the
Company will now present its operating results in two reporting
segments: Reservoir Description and Production Enhancement.
As part of the streamlining of its business, Core incurred a
one-time charge, which if excluded along with the impact of foreign
exchange ("ex-items"), would yield an EPS of $0.42. Operating income, ex-items, was
$24,400,000, yielding operating
margins of almost 16%. During the quarter, Core generated
$23,300,000 of free cash flow
("FCF"), defined as cash from operations less capital
expenditures.
The Company continues to benefit from increasing activity in the
U.S. as Core's land revenue in its Production Enhancement segment
increased 32% on a sequential quarterly basis which outpaced the
sequential increases in U.S. well completions and rig count, which
were up 23% and 25% respectively. This indicates increasing market
penetration by Core's newly introduced HERO®PerFRAC
technology and proprietary completions diagnostic services,
demonstrating Production Enhancement's strength as a technological
leader in the North American up-cycle.
As reported in previous quarters, the Board of Supervisory
Directors ("Board") of Core Laboratories N.V. has established an
internal performance metric of achieving a relative performance
return on invested capital ("ROIC") among the service companies
listed as Core's peers by Bloomberg Financial ("Comp Group"). Based
on Bloomberg's calculations for the latest comparable data
available, Core's ROIC is the highest of comparably sized companies
in its oilfield service Comp Group.
Segment Highlights
Core Laboratories has realigned its operations and will begin
reporting results under two segments: Reservoir Description and
Production Enhancement. The financial statements that follow show
the Company's results for the first quarters of 2017 and 2016 and
fourth quarter of 2016 for comparison of sequential quarterly and
year-over-year quarterly results.
Reservoir Description
Reservoir Description operations, which focus primarily on
producing fields in international and offshore markets and an
increasing number of reservoir fluid phase-behavior and crude oil
characterization projects, reported first quarter 2017 revenue of
$104,900,000, similar to prior
quarter levels. Operating income, on a GAAP basis, was $15,900,000 with 15% margins, while, ex-items, it
was $17,322,000, yielding operating
margins of 17%.
The Company continues to increase the number of major enhanced
oil recovery ("EOR") projects for unconventional reservoirs
underway in various stages. Several formations and different
basins are under study with multiple clients. Core has determined
that the EOR techniques most effective in unconventional reservoirs
will differ greatly from EOR methods used in conventional
reservoirs worldwide. The injection of miscible gases and the
application of gas-adsorption techniques developed in Core's
laboratories at in-situ reservoir pressures and temperatures have
proved far superior to the pressurized physical movement of
hydrocarbons using flood fronts that are typically employed in
conventional fields.
Cycling of in-situ light hydrocarbon gases and the adsorption
and capture of longer-chained hydrocarbons in unconventional
reservoirs are leading to significant improvements in oil-recovery
factors in Company laboratory tests. On average, unconventional
reservoirs currently yield a recovery factor of approximately 9%.
Light hydrocarbon gas injections, cycling, and adsorption
efficiencies have yielded recoveries of up to 15% under
laboratory-based, reservoir-condition testing parameters. Increased
recovery factors applied to unconventional tight-oil reservoirs
significantly raise client ROIC, FCF, and the net present value of
their producing assets.
Crude oil characterization, distillation, and fractionation
studies increased during the first quarter of 2017, as oil company
clients continued to investigate ways to maximize yields through
the refining process. And the Company continues to invest in
technologies to improve yields and product blends for its clients,
most recently through direct client access to real-time data from
mobile devices.
During the quarter, the Company received sufficient support and
industry commitments to initiate the Deepwater Gulf of Mexico II
("GOM II") joint industry project ("JIP"). The study will
characterize Lower Tertiary reservoirs in the Alaminos Canyon,
Keathley Canyon, and Walker Ridge
areas of the deepwater GOM, among other areas. In the study,
the Company will utilize recently developed expert-guided machine
learning technology to describe thousands of feet of core that will
form the basis of the project. As has been the case for Core's JIPs
over the past decade, the Company will reduce massive
petrophysical, mineralogical, geochemical, and geomechanical data
sets ("Big Data") via data analytics to quantify reservoir quality
throughout the study area.
Production Enhancement
Production Enhancement operations, largely focused on
unconventional reservoirs, benefited from increased U.S. land
activity levels and posted significantly higher first quarter 2017
revenue, operating income, operating margins, and incremental
margins compared with the fourth quarter of 2016. Production
Enhancement posted first quarter 2017 revenue of $52,900,000, up almost 20% sequentially,
operating margins that increased 800 basis points to 14%, more than
doubling the prior quarter, which created sequential quarterly
incremental margins of more than 50%. With U.S. land-based
revenue for this segment up 32% on a sequential quarterly basis,
Core's incremental growth outpaced the corresponding increased
number of well completions and rig additions during the
quarter. The increase in sequential incremental margins
provides evidence of Production Enhancement's technological
advantage and leverage to the North American up-cycle while the
Company continues to maintain strict cost control.
Core Lab's clients are using the Company's more technologically
advanced products and services to further enhance their completion
programs. Key examples are HERO®PerFRAC and
FLOWPROFILERTM completion diagnostics. The Company's
recently released HERO®PerFRAC perforating system
provides consistent hole sizes throughout the perforating cluster,
thereby maximizing frac efficiency and increasing Stimulated
Reservoir Volume ("SRV"). This system equalizes the perforating
friction and allows all perforations to contribute to the fracing
operation. Also, tortuosity is reduced, enhancing proppant
deployment at lower hydraulic pumping pressures. The
HERO®PerFRAC system is specifically designed to provide
100% contribution of perforating clusters, require minimal
hydraulic horsepower to efficiently place fracture treatments,
maximize SRV, and increase ultimate recovery from the
reservoir. The HERO®PerFRAC system is proving to
be far superior to conventional perforating systems, decades old
sand-jet perforating techniques, and sliding sleeves which have
limited applications to some tight-oil reservoirs. Core's
HERO®PerFRAC is the Company's best perforating
technology introduction for unconventional natural gas and tight
oil reservoirs since Core's launch of its industry leading HERO-HR
perforating product line.
To further support Core's clients who are increasingly focused
on enhancing their stimulation programs, the Company is expanding
its industry-wide consortia to evaluate the use of multiple
proppants and proppant sizes to improve the effectiveness of
hydraulic fracing programs. Core's proppant consortia is composed
of more than 40 technologically sophisticated clients, including
Anadarko, Apache, Aramco, BHP, BP, Conoco Phillips, Devon, EOG,
Newfield Energy, Oxy, Pioneer Natural Resources, Shell and YPF,
amongst others. Oilfield service companies in the consortia include
Baker Hughes, Halliburton and Schlumberger, amongst others. Core
will increase its evaluation of 100-mesh sand and will add 200- and
400-mesh sand micro proppants to its dynamic flow models and
conductivity testing. Finer mesh sands are thought to prop
secondary and tertiary fracture networks, significantly expanding
SRV, and therefore increasing hydrocarbon flow rates and estimated
ultimate recovery from tight-oil reservoirs. Core's proppant
consortia also have been asked to investigate the effectiveness of
higher density proppant loading pumped at higher flow rates via
larger wellbore tubulars.
Free Cash Flow and Dividends
During the first quarter of 2017, Core's operations generated
$29,700,000 in cash from operating
activities and had capital expenditures of $6,400,000, yielding $23,300,000 of FCF, representing 132% of net
income and 15% of revenue. Core's FCF has exceeded net income in 11
of the last 15 years.
On 10 January 2017, the Board
announced a quarterly cash dividend of $0.55 per share of common stock, which was paid
on 17 February 2017 to shareholders
of record on 20 January 2017. Dutch withholding tax was
deducted from the dividend at a rate of 15%.
On 18 April 2017, the Board
announced a quarterly cash dividend of $0.55 per share of common stock, payable in the
second quarter of 2017. The quarterly cash dividend will be payable
23 May 2017 to shareholders of record
on 28 April 2017. Dutch withholding
tax will be deducted from the dividend at a rate of 15%.
Return On Invested Capital
As reported in previous quarters, the Company's Board has
established an internal performance metric of achieving a relative
ROIC performance compared with the oilfield service companies
listed as Core's Comp Group by Bloomberg Financial. The Company and
its Board believe that ROIC is a leading long-term performance
metric used by shareholders to determine the relative investment
value of publicly traded companies. Further, the Company and its
Board believe that shareholders will benefit if Core consistently
performs at high levels of ROIC among its Comp Group.
According to the latest financial information from Bloomberg,
Core's ROIC is the highest of any comparably sized oilfield service
company in its Comp Group. Comp Group companies listed by Bloomberg
include Halliburton, Schlumberger, Baker Hughes, Oceaneering,
National Oilwell Varco, and Oil States International, amongst
others. A total of 24 of the 26 companies listed in the Comp Group
failed to post ROIC that exceeded their weighted average cost of
capital ("WACC"). Core's ratio of ROIC to WACC is the highest of
any comparably sized company in the Comp Group.
Second Quarter 2017 Revenue and EPS Guidance
As has been the case for past recoveries, Core expects its
revenue growth to ultimately outperform the increase in industry
activity rates by 200 to 400 basis points. Core expects to
generate incremental operating income margins of up to
approximately 60% early in the activity recovery phase, followed by
historical incremental operating income margins of approximately
35% to 45% well into the recovery phase.
Core's North America revenue is
correlated with completion and stimulation events and large-scale
reservoir rock and reservoir fluid characterization studies, rather
than with immediate increases in rig count. Wells need to be
drilled and subsequently completed, stimulated, and cored -- or
have reservoir fluid samples collected -- before Core can realize a
revenue event.
Core is benefiting from increased U.S. onshore activity and
expects revenue and operating income to increase further in 2017 as
international and offshore markets improve with additional major
capital project announcements. Core expects its deepwater revenues,
which are currently 15% of the total Company revenue, to bottom in
the second half of 2017. Activities relating to new project
announcements that should drive Core's revenue higher in
consecutive quarters throughout 2017, further expanding incremental
operating margins.
As Core projected, the Company's third quarter 2016 results
established the bottom of the expected "V-shaped" recovery that the
Company expects to continue in 2017. Core believes that the global
crude oil market is currently under-supplied. This is indicated by
recent International Energy Agency data showing that worldwide
crude oil inventory has declined over six of the last seven
months.
From July to December 2016,
worldwide crude inventories fell by an average of approximately
770,000 BOPD. In addition, considering the January 2017 OPEC cuts of approximately 1,344,000
BOPD, plus cuts from cooperating non-OPEC producers, including
Russia, the world market could be
under-supplied by more than 2,000,000 BOPD. The continued
under-supply of crude oil should lead to extended worldwide
inventory declines and a continuing rally in energy prices
throughout 2017.
For the second quarter of 2017, Core projects its business to
improve further, primarily from increasing activity levels in the
U.S. and stable-to-up international, offshore and deepwater
markets, offsetting lower Canadian activities due to spring
break-up. International rig counts increased 3% in the first
quarter, a second consecutive quarterly increase after eight
consecutive quarters of decline and in the U.S. offshore, new well
permits in the GOM increased 13% over year-ago March levels.
Core projects second quarter 2017 revenue of approximately
$165,000,000 to $170,000,000 and EPS
of $0.48 to $0.52. Operating
income is expected to range between $27,600,000 and $29,900,000 yielding operating
margins of approximately 17%, and, Company-wide sequential
quarterly incremental margins to increase sequentially to
approximately 45%. Second quarter 2017 FCF, once again, is expected
to exceed net income and Core anticipates reactivating its share
repurchase program during the quarter. Core expects the effective
tax rate for the second quarter to be approximately 15%.
Earnings Call Scheduled
The Company has scheduled a conference call to discuss Core's
first quarter 2017 earnings announcement. The call will begin at
7:30 a.m. CDT / 2:30 p.m. CEST on Thursday, 20 April 2017. To listen to the call, please go
to Core's website at www.corelab.com.
Core Laboratories N.V. (www.corelab.com) is a leading provider
of proprietary and patented reservoir description, production
enhancement, and reservoir management services 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 includes
forward-looking statements regarding the future revenue,
profitability, business strategies and developments of the Company
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 conditions,
international markets, international political climates and other
factors as more fully described in the Company's 2016 Form 10-K
filed on 10 February 2017 and in
other securities filings. 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 any forward
looking statement to reflect events or circumstances that may arise
after the date of this press release, except as required by
law.
CORE LABORATORIES
N.V. & SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
(amounts in
thousands, except per share data)
(Unaudited)
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
%
Variance
|
|
|
31 Mar
2017
|
|
31 Dec
2016
|
|
31 Mar
2016
|
|
vs
Q4-16
|
|
vs
Q1-16
|
REVENUE
|
$
|
157,807
|
|
|
$
|
149,542
|
|
|
$
|
153,647
|
|
|
5.5%
|
|
2.7%
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
Costs of services and
sales
|
114,572
|
|
|
112,678
|
|
|
112,814
|
|
|
1.7%
|
|
1.6%
|
|
General and
administrative expenses
|
12,756
|
|
|
8,795
|
|
|
11,050
|
|
|
45.0%
|
|
15.4%
|
|
Depreciation and
amortization
|
6,427
|
|
|
6,550
|
|
|
6,847
|
|
|
(1.9)%
|
|
(6.1)%
|
|
Other (income)
expense, net
|
873
|
|
|
(5)
|
|
|
(4)
|
|
|
NM
|
|
NM
|
|
Total operating
expenses
|
134,628
|
|
|
128,018
|
|
|
130,707
|
|
|
5.2%
|
|
3.0%
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
23,179
|
|
|
21,524
|
|
|
22,940
|
|
|
7.7%
|
|
1.0%
|
Interest
expense
|
2,618
|
|
|
2,548
|
|
|
3,434
|
|
|
2.7%
|
|
(23.8)%
|
Income before income
tax expense
|
20,561
|
|
|
18,976
|
|
|
19,506
|
|
|
8.4%
|
|
5.4%
|
Income tax
expense
|
2,879
|
|
|
3,607
|
|
|
4,389
|
|
|
(20.2)%
|
|
(34.4)%
|
Net income
|
17,682
|
|
|
15,369
|
|
|
15,117
|
|
|
15.0%
|
|
17.0%
|
Net income
attributable to non-controlling interest
|
24
|
|
|
(90)
|
|
|
35
|
|
|
NM
|
|
NM
|
Net income
attributable to Core Laboratories N.V.
|
$
|
17,658
|
|
|
$
|
15,459
|
|
|
$
|
15,082
|
|
|
14.2%
|
|
17.1%
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings
Per Share:
|
$
|
0.40
|
|
|
$
|
0.35
|
|
|
$
|
0.35
|
|
|
14.3%
|
|
14.3%
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Avg Diluted
Common Shares Outstanding
|
44,347
|
|
|
44,326
|
|
|
42,520
|
|
|
—%
|
|
4.3%
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax
Rate
|
14
|
%
|
|
19
|
%
|
|
23
|
%
|
|
(26.3)%
|
|
(39.1)%
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT
INFORMATION:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
Reservoir
Description
|
$
|
104,895
|
|
|
$
|
105,076
|
|
|
$
|
107,425
|
|
|
(0.2)%
|
|
(2.4)%
|
Production
Enhancement
|
52,912
|
|
|
44,466
|
|
|
46,222
|
|
|
19.0%
|
|
14.5%
|
|
Total
|
$
|
157,807
|
|
|
$
|
149,542
|
|
|
$
|
153,647
|
|
|
5.5%
|
|
2.7%
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income:
|
|
|
|
|
|
|
|
|
|
Reservoir
Description
|
$
|
15,940
|
|
|
$
|
18,871
|
|
|
$
|
18,598
|
|
|
(15.5)%
|
|
(14.3)%
|
Production
Enhancement
|
7,395
|
|
|
2,583
|
|
|
4,250
|
|
|
186.3%
|
|
74.0%
|
Corporate and
other
|
(156)
|
|
|
70
|
|
|
92
|
|
|
NM
|
|
NM
|
|
Total
|
$
|
23,179
|
|
|
$
|
21,524
|
|
|
$
|
22,940
|
|
|
7.7%
|
|
1.0%
|
|
|
|
|
|
|
|
|
|
|
|
CORE LABORATORIES
N.V. & SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS
(amounts in
thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
%
Variance
|
ASSETS:
|
31 Mar
2017
|
|
31 Dec
2016
|
|
vs
Q4-16
|
|
|
|
|
|
|
|
Cash and Cash
Equivalents
|
$
|
14,342
|
|
|
$
|
14,764
|
|
|
(2.9)%
|
Accounts Receivable,
net
|
121,810
|
|
|
114,329
|
|
|
6.5%
|
Inventory
|
37,537
|
|
|
33,720
|
|
|
11.3%
|
Other Current
Assets
|
27,292
|
|
|
23,648
|
|
|
15.4%
|
|
Total Current
Assets
|
200,981
|
|
|
186,461
|
|
|
7.8%
|
|
|
|
|
|
|
|
Property, Plant and
Equipment, net
|
127,728
|
|
|
129,882
|
|
|
(1.7)%
|
Intangibles, Goodwill
and Other Long Term Assets, net
|
251,707
|
|
|
256,709
|
|
|
(1.9)%
|
|
Total
Assets
|
$
|
580,416
|
|
|
$
|
573,052
|
|
|
1.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY:
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
Payable
|
$
|
36,477
|
|
|
$
|
33,720
|
|
|
8.2%
|
Other Current
Liabilities
|
72,320
|
|
|
70,303
|
|
|
2.9%
|
|
Total Current
Liabilities
|
108,797
|
|
|
104,023
|
|
|
4.6%
|
|
|
|
|
|
|
|
Long-Term Debt &
Lease Obligations
|
218,613
|
|
|
216,488
|
|
|
1.0%
|
Other Long-Term
Liabilities
|
99,659
|
|
|
97,244
|
|
|
2.5%
|
|
|
|
|
|
|
Total
Equity
|
153,347
|
|
|
155,297
|
|
|
(1.3)%
|
|
Total Liabilities and
Equity
|
$
|
580,416
|
|
|
$
|
573,052
|
|
|
1.3%
|
CORE LABORATORIES
N.V. & SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOW
(amounts in
thousands)
(Unaudited)
|
|
|
|
|
Three Months
Ended
|
|
|
|
31 Mar
2017
|
|
31 Dec
2016
|
|
31 Mar
2016
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
|
|
Net Income
|
$
|
17,682
|
|
|
$
|
15,369
|
|
|
$
|
15,117
|
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
Stock-based
compensation
|
5,723
|
|
|
5,317
|
|
|
5,462
|
|
|
Depreciation and
amortization
|
6,427
|
|
|
6,550
|
|
|
6,847
|
|
|
Deferred income
taxes
|
6,603
|
|
|
(10,475)
|
|
|
(923)
|
|
|
Accounts
Receivable
|
(7,525)
|
|
|
(6,026)
|
|
|
23,895
|
|
|
Inventory
|
(3,898)
|
|
|
3,224
|
|
|
(916)
|
|
|
Other working
capital
|
(661)
|
|
|
6,894
|
|
|
(1,657)
|
|
|
Other operating
activities
|
5,410
|
|
|
2,350
|
|
|
(1,727)
|
|
|
|
Net cash provided
by operating activities
|
$
|
29,761
|
|
|
$
|
23,203
|
|
|
$
|
46,098
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
|
|
Capital
expenditures
|
$
|
(6,449)
|
|
|
$
|
(3,616)
|
|
|
$
|
(2,858)
|
|
|
Other investing
activities
|
(177)
|
|
|
(608)
|
|
|
(160)
|
|
|
|
Net cash used in
investing activities
|
$
|
(6,626)
|
|
|
$
|
(4,224)
|
|
|
$
|
(3,018)
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
|
Repayment of debt
borrowings
|
$
|
(49,000)
|
|
|
$
|
(26,018)
|
|
|
$
|
(37,838)
|
|
|
Proceeds from debt
borrowings
|
51,000
|
|
|
36,000
|
|
|
13,000
|
|
|
Dividends
paid
|
(24,284)
|
|
|
(24,262)
|
|
|
(23,307)
|
|
|
Repurchase of
treasury shares
|
(1,273)
|
|
|
(5,004)
|
|
|
(696)
|
|
|
Other financing
activities
|
—
|
|
|
(2,150)
|
|
|
(68)
|
|
|
|
Net cash used in
financing activities
|
$
|
(23,557)
|
|
|
$
|
(21,434)
|
|
|
$
|
(48,909)
|
|
|
|
|
|
|
|
|
|
NET CHANGE IN CASH
AND CASH EQUIVALENTS
|
(422)
|
|
|
(2,455)
|
|
|
(5,829)
|
|
CASH AND CASH
EQUIVALENTS, beginning of period
|
14,764
|
|
|
17,219
|
|
|
22,494
|
|
CASH AND CASH
EQUIVALENTS, end of period
|
$
|
14,342
|
|
|
$
|
14,764
|
|
|
$
|
16,665
|
|
Non-GAAP Information
Management believes that the exclusion of certain income and
expenses enables management, our investors and the public to more
effectively evaluate the Company's operations period-over-period
and to identify operating trends that could otherwise be masked by
the excluded items. For this reason, we used certain non-GAAP
measures that exclude these items; and we feel that this
presentation provides the public a better understanding of the
underlying operations' current period financial results on a more
comparable basis to those 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 Core Lab's financial statements
and filings with the Securities and Exchange Commission.
Reconciliation of
Net Income, Operating Income and Earnings Per Diluted
Share
(amounts in
thousands, except per share data)
(Unaudited)
|
|
|
|
|
Operating
Income
|
|
|
Three Months
Ended
|
|
|
31 March
2017
|
|
31 December
2016
|
|
31 Mar
2016
|
|
GAAP
reported
|
$
|
23,179
|
|
|
$
|
21,524
|
|
|
$
|
22,940
|
|
|
Foreign exchange
losses
|
97
|
|
|
400
|
|
|
780
|
|
|
Severance,
compensation and other charges
|
1,146
|
|
|
—
|
|
|
—
|
|
|
Excluding specific
items
|
$
|
24,422
|
|
|
$
|
21,924
|
|
|
$
|
23,720
|
|
|
|
|
|
|
Net Income
attributable to Core Laboratories N.V.
|
|
|
Three Months
Ended
|
|
|
31 March
2017
|
|
31 December
2016
|
|
31 Mar
2016
|
|
GAAP
reported
|
$
|
17,658
|
|
|
$
|
15,459
|
|
|
$
|
15,082
|
|
|
Foreign exchange
losses
|
83
|
|
|
324
|
|
|
604
|
|
|
Impact of higher tax
rate 1
|
—
|
|
|
2,519
|
|
|
—
|
|
|
Severance,
compensation and other charges
|
986
|
|
|
—
|
|
|
—
|
|
|
Excluding specific
items
|
$
|
18,727
|
|
|
$
|
18,302
|
|
|
$
|
15,686
|
|
|
|
|
|
|
|
|
|
(1) Quarter tax
rate of 19%; guidance given at 6%
|
|
|
|
|
|
Earnings Per
Diluted Share
|
|
|
Three Months
Ended
|
|
|
31 March
2017
|
|
31 December
2016
|
|
31 Mar
2016
|
|
GAAP
reported
|
$
|
0.40
|
|
|
$
|
0.35
|
|
|
$
|
0.35
|
|
|
Foreign exchange
losses
|
—
|
|
|
0.01
|
|
|
0.02
|
|
|
Impact of higher tax
rate 1
|
—
|
|
|
0.05
|
|
|
—
|
|
|
Severance,
compensation and other charges
|
0.02
|
|
|
—
|
|
|
—
|
|
|
Excluding specific
items
|
$
|
0.42
|
|
|
$
|
0.41
|
|
|
$
|
0.37
|
|
|
|
|
|
|
|
|
|
(1) Quarter tax
rate of 19%; guidance given at 6%
|
|
Segment
Information
(amounts in
thousands)
(Unaudited)
|
|
|
Three Months Ended
31 March 2017
|
|
|
Reservoir
Description
|
|
Production
Enhancement
|
|
Corporate
and Other
|
|
Operating
income
|
$
|
15,940
|
|
|
$
|
7,395
|
|
|
$
|
(156)
|
|
|
Foreign exchange
losses
|
237
|
|
|
(189)
|
|
|
49
|
|
|
Severance,
compensation and other charges
|
1,146
|
|
|
$
|
—
|
|
|
—
|
|
|
Operating income
excluding specific items
|
$
|
17,323
|
|
|
$
|
7,206
|
|
|
$
|
(107)
|
|
|
|
|
|
|
|
|
|
Free Cash Flow
Core uses the non-GAAP 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, earnings per share,
or cash flows from operating, investing, or financing activities,
each as determined in accordance with GAAP. You should also not
consider free cash flow as 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
(amounts in
thousands)
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
|
31 March
2017
|
Net cash provided by
operating activities
|
|
$
|
29,761
|
|
Capital
expenditures
|
|
(6,449)
|
|
Free cash
flow
|
|
$
|
23,312
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/core-lab-reports-first-quarter-2017-results-300442231.html
SOURCE Core Laboratories N.V.