AMSTERDAM, April 24, 2019 /PRNewswire/ -- Core
Laboratories N.V. (NYSE: "CLB US" and Euronext Amsterdam: "CLB NA")
("Core", "Core Lab", or the "Company") reported that continuing
operations resulted in first quarter 2019 revenue of $169,200,000, with operating income of
$16,400,000 and earnings per diluted
share ("EPS") of $0.90, all in
accordance with U.S. generally accepted accounting principles
("GAAP"); operating income, ex-items, a non-GAAP financial measure,
was $26,900,000, yielding operating
margins of 16%, and EPS, ex-items, was $0.44. As discussed in the fourth quarter
2018 earnings call, the company's ongoing corporate restructuring
resulted in a tax benefit, lowering the effective tax rate for
2019; the effects of this tax benefit have been recognized in the
first quarter of 2019. A full reconciliation of non-GAAP
financial measures is included in the attached financial
tables.
Core's Board of Supervisory Directors ("Board") and the
Company's Executive Management continue to focus on strategies that
maximize return on invested capital ("ROIC") and free cash flow
("FCF"), a non-GAAP financial measure defined as cash from
operations less capital expenditures, factors that have high
correlation with maximizing total shareholder return. Core's
asset-light business model and capital discipline promote capital
efficiency designed to produce more predictable and superior
long-term ROIC. Bloomberg's calculations using the latest
comparable data available indicate that Core's ROIC of 20.1% is the
highest for all major companies compared with the oilfield service
companies listed as Core's Comp Group by Bloomberg.
Also in the first quarter of 2019, Core's commitment to provide
a safe work environment was recognized, as the Company received the
prestigious 2019 Safety Practice Award from the NOIA in recognition
of its patented Iron CoreHandTM Lifting Assist
System. Since implementing the Iron CoreHandTM,
Core has seen zero recordable lifting and hand-related injuries
during offshore operations.
Segment Highlights
Reservoir Description
Reservoir Description operations are heavily exposed to
international and offshore activity levels. Over 80% of its
revenue is sourced outside the U.S., where core, reservoir fluid
and derived product samples originate from international
projects. Revenue in the first quarter of 2019 was
$103,300,000, up more than 2%
year-over-year, with operating income on a GAAP basis of
$6,200,000. Operating income,
ex-items, was $14,000,000, yielding
operating margins, ex-items, of 14%. Core continues to see
improvement in the future for international industry activity
directly related to technology and analytical services provided by
the Company's Reservoir Description segment. However, the
first quarter of 2019 was adversely impacted by typical first
quarter seasonal patterns. In addition, the volume of high-margin
crude-oil-assay laboratory testing was impacted by transitory
Houston Ship Channel closures,
further weighing on Reservoir Description margins by as much as 100
BPS.
During the first quarter of 2019, Core participated in highly
specialized core and reservoir fluids services in many
regions. These projects included both newly developed fields
and brownfield extensions in offshore areas of Alaska, Brazil, Guyana, the Gulf of
Mexico ("GOM"), the North Sea, the Middle East, Australia, and onshore U.S. In all of
these programs, accurate and comprehensive datasets of rock and
hydrocarbon properties, determined at reservoir conditions, are
critical for optimizing reservoir development, and thus, helping
Core's clients' maximize returns.
In South America, as robust
activity continues for Core in development programs offshore
Guyana, opportunities continue to
emerge in Brazil. Core completed a
fully integrated, multi-disciplinary study of Brazil's North Eastern Offshore Basin. This
comprehensive, multi-client, interpretive study and dataset
compilation incorporates stratigraphy, geochemistry, reservoir
geology and seal rock analysis across the Jequitinhonha, Almada,
Camamu and Sergipe-Alagoas Atlantic Margin basins. This study
provides the participating companies access to a rock-based,
subsurface dataset to evaluate new opportunities, including the
deepwater Late Cretaceous turbidite plays in the Sergipe-Alagoas
Basin.
In the first quarter 2019, Core Lab, under the direction of
Talos Energy, was engaged in wellsite processing, core
stabilization, and the initial stages of laboratory analyses on
over 700 feet of conventional core from the Zama-2DEL ST01
delineation well, located in Block 7 of the Sureste Basin,
GOM. High-quality, whole core was recovered from shallow,
oil-bearing sands for comprehensive laboratory evaluation.
Several proprietary core preservation and stabilization
technologies developed by Core Laboratories for a wide range of
sandstone reservoirs in the U.S. GOM have been successfully applied
to these cores cut offshore Mexico. These wellsite
technologies are critical for preserving intrinsic rock properties,
thus eliminating damage during handling and transportation to the
laboratory. Upon arrival at the laboratory, these cores were
immediately scanned using Core's proprietary, non-invasive, Dual
Energy Computed Tomography and high-resolution Spectral Gamma Ray
detectors. These surface logging tools provided Talos Energy with
lithology, as well as a wide range of critical physical parameters
for pay assessment, well in advance of results derived from
time-honored laboratory analyses.
The combined efforts of U.S.- and Mexico-based Talos Energy and Core Lab
employees were leveraged in fast tracking results to evaluate this
significant oil reservoir. Core is pleased to have been part
of this unprecedented wellsite achievement and looks forward to
completing the detailed geoscience and engineering studies.
Production Enhancement
Production Enhancement operations, largely focused on complex
completions in unconventional tight-oil reservoirs in the U.S. and
conventional offshore development projects, posted first quarter
2019 revenue of $65,900,000; GAAP
operating income was $9,900,000,
while operating income, ex-items, was $12,400,000, yielding operating margins,
ex-items, of 19%. Production Enhancement's sequential
operating margin improvement is directly correlated to Core's
clients' adoption of high-end perforating system energetics.
Since Core's third quarter 2018 announcement of the Ballistic
Delivery System (BDS)™ and the Select Fire Switch
(SFS)TM, Core's client adoption of both the advanced
wellbore communication system and the associated downhole
instrumentation has been positive. The Ballistic Delivery System
(BDS)™ and the Select Fire Switch (SFS)TM are key
differentiators of Core's pre-assembled GoGunTM Adaptive
Perforating System. In addition to these two technologies,
the GoGunTM Adaptive Perforating System provides an open
architecture design. This allows for optimal utilization of
perforating energetics and, importantly, the onsite flexibility of
altering completion designs for greater wellsite efficiency and
improved Stimulated Reservoir Volume ("SRV"). Core has partnered
with technologically sophisticated clients committed to
using the system. The primary objective of any pre-assembled
perforating system is to efficiently and reliably deliver the
energetic shaped charges that are the backbone of any perforating
event. Consequently, Core Lab's unique, best-in-class,
high-end energetics, such as the HERO® PerFRAC, will
differentiate the pre-assembled energetic system product from
others offered in the market.
Core's proprietary diagnostic services continue to provide
valuable data to operators in their efforts to optimize well
spacing and the design of well completions in unconventional
reservoirs. During the first quarter of 2019, Core
collaborated with an operating company in the Niobrara formation
located in the DJ Basin. The field program was designed to
optimize completions across multiple zones, within a stacked pay
zone environment. By utilizing Core's proprietary
FLOWPROFILER™ technology, along with drill cuttings analyses
expertise from Reservoir Description, Core provided data to
pinpoint geologic variability that was inhibiting production along
the lateral. The diagnostic analysis indicated certain
segments of the lateral possessed flow capacity, but had low
hydrocarbon yield. When the FLOWPROFILER™ data was
plotted using nSIGHT™, Core's proprietary, 3D, interactive
reservoir interpretation software, this signature repeated in other
boreholes of the multi-well pad. These results indicate that
the low yield intervals were influenced by geology rather than
completion factors. This comprehensive evaluation by
Core provided the operator with the knowledge and confidence to
focus future completion designs on the most cost effective pay
zones.
Core continues to see increasing utilization and increasing
market share for the SPECTRASTIMTM and
SPECTRASCAN® technologies in the Canadian market, as
operators evaluated the various options for their completion
designs. The results of these studies continue to highlight the
advantages of plug and perf completions, versus sliding sleeve
methods, for maximizing SRV.
Free Cash Flow, Dividends and Share Repurchases
During the first quarter of 2019, Core continued to generate
FCF, with cash from operations of $25,200,000 and capital expenditures of
$5,200,000, yielding FCF of
$20,000,000. This free cash was
returned to Core's shareholders via the Company's regular quarterly
dividend. The first quarter of 2019 also marks the
70th consecutive quarter that the Company generated
positive FCF. Core continues its commitment to investment for
growth and generating FCF that is returned to shareholders via the
Company's regular quarterly dividend and future opportunistic share
repurchases.
On 15 January 2019, the Board
announced a quarterly cash dividend of $0.55 per share of common stock, which was paid
on 15 February 2019 to shareholders
of record on 25 January 2019. Dutch
withholding tax was deducted from the dividend at a rate of
15%.
On 16 April 2019, the Board
announced a quarterly cash dividend of $0.55 per share of common stock, payable in the
second quarter of 2019. The quarterly cash dividend will be payable
on 21 May 2019 to shareholders of
record on 26 April 2019. Dutch
withholding tax will be deducted from the dividend at a rate of
15%.
Return On Invested Capital
Core Lab's ROIC of 20.1% is the highest of the peer group
compiled and reported by Bloomberg. The Company's Board has
established an internal performance metric of achieving a leading
relative ROIC performance compared with the oilfield service
companies listed as Core's Comp Group by Bloomberg. 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 relative to its Comp
Group.
According to the latest Comp Group financial information from
Bloomberg, Core's ROIC is the highest of any comparably-sized
oilfield service company (greater than $2
billion market capitalization). Comp Group companies listed
by Bloomberg include: Halliburton, Schlumberger, National
Oilwell Varco, RPC, TGS-Nopec Geophysical, and John Wood Group,
among others. Core Lab is one of only four of the 16
companies listed in the Comp Group posting ROIC that exceeded their
Weighted Average Cost of Capital ("WACC"). Core's ratio of
ROIC to WACC is the highest of any company in the Comp Group.
Second Quarter 2019 Revenue and EPS Guidance
During the first quarter of 2019, the worldwide crude-oil market
shifted into a supply correction, which increased crude oil prices
more than 30%, sequentially. Additionally, global crude-oil
inventories exited the first quarter of 2019 at approximately 39
days of consumption, consistent with a multi-year trend of
declining global crude-oil inventories relative to demand.
The International Energy Agency's most recent estimated worldwide
demand projections for 2019 remain strong, with demand anticipated
to increase by 1,400,000 barrels of oil per day.
The recent rebound in crude oil prices is underpinned by the
rebalancing of crude oil supply and demand, and continues to
support a broad-based, international oilfield recovery. The
emergence of this trend is reflected in the actions taken by
operators who have announced Final Investment Decisions ("FIDs")
since 2017. These projects are in the beginning phase of
development, as indicated by the increase in rigs and other heavy
oilfield equipment now coming under contract, particularly in the
Middle East, Asia Pacific, the North Sea and Russia regions. Additionally, the
international rig count continues to improve since bottoming in the
fourth quarter of 2016 and showing sluggish behavior during 2017
and 2018. The Company believes that 2019 international growth
is expected to reach mid to high single-digit levels.
As has been the case in past industry recoveries of worldwide
operating activities, Core's company-wide revenue growth and margin
expansion is not immediately correlated to increasing rig counts,
but to subsequent completion and stimulation events and large-scale
reservoir rock and reservoir fluid characterization projects. Wells
need to be drilled, rocks and reservoir fluid sampled, and wells
completed before Core realizes a revenue opportunity.
The average second quarter 2019 U.S. rig count is projected to
be down, but U.S. completion activity is expected to be flat,
sequentially. Capital conservatism by operators may limit activity
growth in the second quarter of 2019.
Therefore, Core expects consolidated second quarter 2019 revenue
of approximately $172,000,000 to
$175,000,000 and operating income of
approximately $28,500,000 to
$30,000,000, yielding operating
margins of 17%, with incremental margins, ex-items, exceeding 50%.
Using a comparable sequential effective tax rate of 15%, EPS for
the second quarter of 2019 is expected to be approximately
$0.47 to $0.50. The Company's second quarter 2019
guidance is based on projections for the underlying operations and
excludes gains and losses in foreign exchange.
Earnings Call Scheduled
The Company has scheduled a conference call to discuss Core's
first quarter 2019 earnings announcement. The call will begin at
7:30 a.m. CDT / 2:30 p.m. CEST on Thursday, 25 April 2019. 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 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 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 most recent Forms
10-K, 10-Q and 8-K filed with or furnished to the 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
N.V. & SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
(amounts in
thousands, except per share data)
|
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
|
%
Variance
|
|
|
|
|
March 31,
2019
|
|
|
December 31,
2018
|
|
|
March 31,
2018
|
|
|
vs.
Q4-18
|
|
|
vs.
Q1-18
|
|
|
REVENUE
|
|
$
|
169,194
|
|
|
$
|
173,207
|
|
|
$
|
170,018
|
|
|
(2.3)%
|
|
|
(0.5)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs of services and
sales
|
|
|
127,383
|
|
|
|
125,694
|
|
|
|
119,318
|
|
|
1.3%
|
|
|
6.8%
|
|
|
General and
administrative expenses
|
|
|
17,437
|
|
|
|
24,721
|
|
|
|
12,709
|
|
|
(29.5)%
|
|
|
37.2%
|
|
|
Depreciation and
amortization
|
|
|
5,587
|
|
|
|
5,721
|
|
|
|
5,818
|
|
|
(2.3)%
|
|
|
(4.0)%
|
|
|
Other (income)
expense, net
|
|
|
2,373
|
|
|
|
(907)
|
|
|
|
(143)
|
|
|
NM
|
|
|
NM
|
|
|
Total operating
expenses
|
|
|
152,780
|
|
|
|
155,229
|
|
|
|
137,702
|
|
|
(1.6)%
|
|
|
10.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
|
|
16,414
|
|
|
|
17,978
|
|
|
|
32,316
|
|
|
(8.7)%
|
|
|
(49.2)%
|
|
|
Interest
expense
|
|
|
3,726
|
|
|
|
3,634
|
|
|
|
3,120
|
|
|
2.5%
|
|
|
19.4%
|
|
|
Income from
continuing operations before income tax expense
|
|
|
12,688
|
|
|
|
14,344
|
|
|
|
29,196
|
|
|
(11.5)%
|
|
|
(56.5)%
|
|
|
Income tax expense
(benefit)
|
|
|
(27,610)
|
|
|
|
5,750
|
|
|
|
5,273
|
|
|
NM
|
|
|
NM
|
|
|
Income from
continuing operations
|
|
|
40,298
|
|
|
|
8,594
|
|
|
|
23,923
|
|
|
368.9%
|
|
|
68.4%
|
|
|
Income (loss) from
discontinued operations
|
|
|
259
|
|
|
|
408
|
|
|
|
(346)
|
|
|
NM
|
|
|
NM
|
|
|
Net income
|
|
|
40,557
|
|
|
|
9,002
|
|
|
|
23,577
|
|
|
350.5%
|
|
|
72.0%
|
|
|
Net income (loss)
attributable to non-controlling interest
|
|
|
47
|
|
|
|
167
|
|
|
|
50
|
|
|
NM
|
|
|
NM
|
|
|
Net income
attributable to Core Laboratories N.V.
|
|
$
|
40,510
|
|
|
$
|
8,835
|
|
|
$
|
23,527
|
|
|
358.5%
|
|
|
72.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings
Per Share from Continuing Operations
|
|
$
|
0.90
|
|
|
$
|
0.19
|
|
|
$
|
0.54
|
|
|
373.7%
|
|
|
66.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings
Per Share attributable to Core Laboratories N.V.
|
|
$
|
0.91
|
|
|
$
|
0.20
|
|
|
$
|
0.53
|
|
|
355.0%
|
|
|
71.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Diluted Common Shares Outstanding
|
|
|
44,734
|
|
|
|
44,401
|
|
|
|
44,463
|
|
|
0.7%
|
|
|
0.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax
Rate
|
|
|
(218)
|
%
|
|
|
40
|
%
|
|
|
18
|
%
|
|
NM
|
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT
INFORMATION:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reservoir
Description
|
|
$
|
103,292
|
|
|
$
|
106,557
|
|
|
$
|
100,809
|
|
|
(3.1)%
|
|
|
2.5%
|
|
|
Production
Enhancement
|
|
|
65,902
|
|
|
|
66,650
|
|
|
|
69,209
|
|
|
(1.1)%
|
|
|
(4.8)%
|
|
|
Total
|
|
$
|
169,194
|
|
|
$
|
173,207
|
|
|
$
|
170,018
|
|
|
(2.3)%
|
|
|
(0.5)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reservoir
Description
|
|
$
|
6,179
|
|
|
$
|
10,374
|
|
|
$
|
14,757
|
|
|
(40.4)%
|
|
|
(58.1)%
|
|
|
Production
Enhancement
|
|
|
9,912
|
|
|
|
7,682
|
|
|
|
17,687
|
|
|
29.0%
|
|
|
(44.0)%
|
|
|
Corporate and
Other
|
|
|
323
|
|
|
|
(78)
|
|
|
|
(128)
|
|
|
NM
|
|
|
NM
|
|
|
Total
|
|
$
|
16,414
|
|
|
$
|
17,978
|
|
|
$
|
32,316
|
|
|
(8.7)%
|
|
|
(49.2)%
|
|
|
|
"NM" means not
meaningful
|
CORE LABORATORIES
N.V. & SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEET
|
(amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
%
Variance
|
|
|
ASSETS:
|
|
March 31,
2019
|
|
|
December 31,
2018
|
|
|
March 31,
2018
|
|
|
vs.
Q4-18
|
|
|
vs.
Q1-18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash
Equivalents
|
|
$
|
13,206
|
|
|
$
|
13,116
|
|
|
$
|
13,244
|
|
|
0.7%
|
|
|
(0.3)%
|
|
|
Accounts Receivable,
net
|
|
|
132,859
|
|
|
|
129,157
|
|
|
|
137,661
|
|
|
2.9%
|
|
|
(3.5)%
|
|
|
Inventory
|
|
|
50,147
|
|
|
|
45,664
|
|
|
|
36,438
|
|
|
9.8%
|
|
|
37.6%
|
|
|
Other Current
Assets
|
|
|
40,211
|
|
|
|
43,040
|
|
|
|
32,842
|
|
|
(6.6)%
|
|
|
22.4%
|
|
|
Total Current
Assets
|
|
|
236,423
|
|
|
|
230,977
|
|
|
|
220,185
|
|
|
2.4%
|
|
|
7.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, Plant and
Equipment, net
|
|
|
124,758
|
|
|
|
122,917
|
|
|
|
122,333
|
|
|
1.5%
|
|
|
2.0%
|
|
|
Right-Of-Use
Assets
|
|
|
77,537
|
|
|
|
-
|
|
|
|
-
|
|
|
NM
|
|
|
NM
|
|
|
Intangibles, Goodwill
and Other Long Term Assets, net
|
|
|
353,042
|
|
|
|
294,933
|
|
|
|
254,622
|
|
|
19.7%
|
|
|
38.7%
|
|
|
Total
Assets
|
|
$
|
791,760
|
|
|
$
|
648,827
|
|
|
$
|
597,140
|
|
|
22.0%
|
|
|
32.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
Payable
|
|
$
|
44,467
|
|
|
$
|
41,155
|
|
|
$
|
45,541
|
|
|
8.0%
|
|
|
(2.4)%
|
|
|
Short-term Operating
Lease Obligations
|
|
|
13,003
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
NM
|
|
|
NM
|
|
|
Other Current
Liabilities
|
|
|
71,145
|
|
|
|
61,392
|
|
|
|
58,786
|
|
|
15.9%
|
|
|
21.0%
|
|
|
Total Current
Liabilities
|
|
|
128,615
|
|
|
|
102,547
|
|
|
|
104,327
|
|
|
25.4%
|
|
|
23.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-Term Debt &
Capital Lease Obligations
|
|
|
294,896
|
|
|
|
289,770
|
|
|
|
235,114
|
|
|
1.8%
|
|
|
25.4%
|
|
|
Long-term Operating
Lease Obligations
|
|
|
64,090
|
|
|
|
-
|
|
|
|
-
|
|
|
NM
|
|
|
NM
|
|
|
Other Long-Term
Liabilities
|
|
|
116,806
|
|
|
|
95,610
|
|
|
|
106,123
|
|
|
22.2%
|
|
|
10.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Equity
|
|
|
187,353
|
|
|
|
160,900
|
|
|
|
151,576
|
|
|
16.4%
|
|
|
23.6%
|
|
|
Total Liabilities and
Equity
|
|
$
|
791,760
|
|
|
$
|
648,827
|
|
|
$
|
597,140
|
|
|
22.0%
|
|
|
32.6%
|
|
|
CORE LABORATORIES
N.V. & SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOW
|
(amounts in
thousands)
|
(Unaudited)
|
|
|
|
Three
Months
|
|
|
|
|
March 31, 2019
|
|
|
March 31, 2018
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Income from continuing
operations
|
|
$
|
40,298
|
|
|
$
|
23,923
|
|
|
Income (loss) from
discontinued operations
|
|
|
259
|
|
|
|
(346)
|
|
|
Net Income
|
|
$
|
40,557
|
|
|
$
|
23,577
|
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
|
|
11,096
|
|
|
|
6,291
|
|
|
Depreciation and
amortization
|
|
|
5,587
|
|
|
|
5,818
|
|
|
Deferred income
tax
|
|
|
(31,760)
|
|
|
|
(256)
|
|
|
Accounts
receivable
|
|
|
(3,936)
|
|
|
|
(5,913)
|
|
|
Inventory
|
|
|
(4,407)
|
|
|
|
(3,686)
|
|
|
Accounts
payable
|
|
|
1,346
|
|
|
|
2,634
|
|
|
Other adjustments to
net income
|
|
|
6,673
|
|
|
|
(5,372)
|
|
|
Net cash provided
by operating activities
|
|
$
|
25,156
|
|
|
$
|
23,093
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
$
|
(5,183)
|
|
|
$
|
(4,443)
|
|
|
Other investing
activities
|
|
|
(22)
|
|
|
|
(173)
|
|
|
Net cash used in
investing activities
|
|
$
|
(5,205)
|
|
|
$
|
(4,616)
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Repayment of debt
borrowings
|
|
$
|
(32,000)
|
|
|
$
|
(29,000)
|
|
|
Proceeds from debt
borrowings
|
|
|
37,000
|
|
|
|
37,000
|
|
|
Dividends
paid
|
|
|
(24,374)
|
|
|
|
(24,323)
|
|
|
Repurchase of treasury
shares
|
|
|
(487)
|
|
|
|
(3,310)
|
|
|
Net cash used in
financing activities
|
|
$
|
(19,861)
|
|
|
$
|
(19,633)
|
|
|
|
|
|
|
|
|
|
|
|
|
NET CHANGE IN CASH
AND CASH EQUIVALENTS
|
|
|
90
|
|
|
|
(1,156)
|
|
|
CASH AND CASH
EQUIVALENTS, beginning of period
|
|
|
13,116
|
|
|
|
14,400
|
|
|
CASH AND CASH
EQUIVALENTS, end of period
|
|
$
|
13,206
|
|
|
$
|
13,244
|
|
|
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, we use certain non-GAAP measures that exclude these Items;
and we feel 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 statement
and filings with the Securities and Exchange Commission.
Reconciliation of
Operating Income, Income from Continuing Operations and Earnings
Per Diluted Share from Continuing Operations
|
(amounts in
thousands, except per share data)
|
(Unaudited)
|
|
|
|
Operating Income
from Continuing Operations
|
|
|
|
Three Months
Ended
|
|
|
|
March 31,
2019
|
|
|
December 31,
2018
|
|
|
March 31,
2018
|
|
GAAP
reported
|
|
$
|
16,414
|
|
|
$
|
17,978
|
|
|
$
|
32,316
|
|
Stock
compensation 1
|
|
|
7,203
|
|
|
|
10,012
|
|
|
|
—
|
|
Employment related
charges 2
|
|
|
3,200
|
|
|
|
—
|
|
|
|
—
|
|
Foreign exchange
losses
|
|
|
37
|
|
|
|
457
|
|
|
|
432
|
|
Excluding specific
items
|
|
$
|
26,854
|
|
|
$
|
28,447
|
|
|
$
|
32,748
|
|
|
|
|
|
Income from
Continuing Operations
|
|
|
|
Three Months
Ended
|
|
|
|
March 31,
2019
|
|
|
December 31,
2018
|
|
|
March 31,
2018
|
|
GAAP
reported
|
|
$
|
40,298
|
|
|
$
|
8,594
|
|
|
$
|
23,923
|
|
Stock
compensation 1
|
|
|
7,203
|
|
|
|
9,165
|
|
|
|
—
|
|
Employment related
charges 2
|
|
|
2,528
|
|
|
|
—
|
|
|
|
—
|
|
Foreign exchange
losses
|
|
|
31
|
|
|
|
274
|
|
|
|
354
|
|
Impact of
higher/lower tax rate 3
|
|
|
(30,402)
|
|
|
|
3,059
|
|
|
|
907
|
|
Excluding specific
items
|
|
$
|
19,658
|
|
|
$
|
21,092
|
|
|
$
|
25,184
|
|
|
|
|
|
Earnings Per
Diluted Share from Continuing Operations
|
|
|
|
Three Months
Ended
|
|
|
|
March 31,
2019
|
|
|
December 31,
2018
|
|
|
March 31,
2018
|
|
GAAP
reported
|
|
$
|
0.90
|
|
|
$
|
0.19
|
|
|
$
|
0.54
|
|
Stock
compensation 1
|
|
|
0.16
|
|
|
|
0.21
|
|
|
|
-
|
|
Employment related
charges 2
|
|
|
0.06
|
|
|
|
-
|
|
|
|
-
|
|
Foreign exchange
losses
|
|
|
-
|
|
|
|
0.01
|
|
|
|
0.01
|
|
Impact of
higher/lower tax rate 3
|
|
|
(0.68)
|
|
|
|
0.07
|
|
|
|
0.02
|
|
Excluding specific
items
|
|
$
|
0.44
|
|
|
$
|
0.48
|
|
|
$
|
0.57
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Stock compensation
expense recognized pursuant to FASB ASC 718 "Stock Compensation"
associated with executivesreaching eligible retirement
age.
|
(2)
|
Charge associated
with settlement of employment related claim.
|
(3)
|
2019 Quarter 1
includes a tax benefit resulting from a corporate restructuring,
net of withholding taxes on unremitted earnings from
subsidiaries and stock compensation expense which is
nondeductible in the U.S.; 2018 Quarter 4 includes a discrete
adjustment for stock compensation expense which is nondeductible
in the U.S.; All periods include further adjustments to
reflect tax expense at a normalized rate of 15%.
|
Segment
Information
|
(amounts in
thousands)
|
(Unaudited)
|
|
|
|
Operating Income
from Continuing Operations
|
|
|
|
Three Months Ended
March 31, 2019
|
|
|
|
Reservoir
Description
|
|
|
Production
Enhancement
|
|
|
Corporate and
Other
|
|
GAAP
reported
|
|
$
|
6,179
|
|
|
$
|
9,912
|
|
|
$
|
323
|
|
Foreign exchange
losses
|
|
|
6
|
|
|
|
(20)
|
|
|
|
51
|
|
Stock
compensation 1
|
|
|
4,656
|
|
|
|
2,547
|
|
|
|
—
|
|
Employment related
charges 2
|
|
|
3,200
|
|
|
|
-
|
|
|
|
—
|
|
Excluding specific
items
|
|
$
|
14,041
|
|
|
$
|
12,439
|
|
|
$
|
374
|
|
(1)
|
Stock compensation
expense recognized pursuant to FASB ASC 718 "Stock Compensation"
associated with executivesreaching eligible retirement
age.
|
(2)
|
Charge associated
with settlement of employment related claim.
|
Return on Invested Capital
Return on Invested Capital ("ROIC") is based on Bloomberg's
calculation on the trailing four quarters from the most recently
reported quarter and the balance sheet of the most recent reported
quarter, and is presented based on our belief that this non-GAAP
measure is useful information to investors and management when
comparing our profitability and the efficiency with which we have
employed capital over time relative to other companies. ROIC is not
a measure of financial performance under GAAP and should not be
considered as an alternative to net income.
ROIC of 20.1% is defined by Bloomberg as Net Operating Profit
("NOP") of $119 million less Cash
Operating Taxes ("COT") of $27
million divided by Total Invested Capital ("TIC") of
$460 million, where NOP is defined as
GAAP net income before minority interest plus the sum of income tax
expense, interest expense, and pension expense less pension service
cost and COT is defined as income tax expense plus the sum of the
change in net deferred taxes, and the tax effect on interest
expense and TIC is defined as GAAP stockholder's equity plus the
sum of net long-term debt, allowance for doubtful accounts, net
balance of deferred taxes, income tax payable, and other
charges.
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. 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
|
(amounts in
thousands)
|
(Unaudited)
|
|
|
|
Three
Months
|
|
|
|
|
March 31, 2019
|
|
|
Net cash provided by
operating activities
|
|
$
|
25,156
|
|
|
Capital
Expenditures
|
|
|
(5,183)
|
|
|
Free cash
flow
|
|
$
|
19,973
|
|
|
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SOURCE Core Laboratories N.V.