- FOURTH QUARTER REVENUE OF $128.2
MILLION, UP 2% SEQUENTIALLY
- FOURTH QUARTER OPERATING INCOME OF $14.6 MILLION; EX-ITEMS, $15.0 MILLION, DOWN 6% SEQUENTIALLY
- FOURTH QUARTER OPERATING MARGINS, EX-ITEMS, OF 12%
- FOURTH QUARTER GAAP EPS OF $0.14; EX-ITEMS, $0.19, DOWN 14% SEQUENTIALLY
- FOURTH QUARTER FREE CASH FLOW OF $16.7 MILLION
- FOURTH QUARTER DEBT REDUCED BY $15.0
MILLION OR OVER 8%
- COMPANY ANNOUNCES Q1 2024 QUARTERLY DIVIDEND
- FULL YEAR REVENUE OF $510.0
MILLION, UP 4%
- FULL YEAR OPERATING INCOME OF $54.6
MILLION; EX-ITEMS, $61.2
MILLION, UP 36%
- FULL YEAR GAAP EPS OF $0.86;
EX-ITEMS, EPS OF $0.80, UP
40%
HOUSTON, Jan. 31,
2024 /PRNewswire/ -- Core Laboratories Inc. (NYSE:
"CLB") ("Core", "Core Lab", or the "Company") reported fourth
quarter 2023 revenue of $128,200,000.
Core's operating income was $14,600,000, with diluted earnings per share
("EPS") of $0.14, all in accordance
with U.S. generally accepted accounting principles ("GAAP").
Operating income, ex-items, a non-GAAP financial measure, was
$15,000,000, yielding operating
margins of 12%, and EPS, ex-items, of $0.19. The Company's fourth quarter 2023
effective tax rate was negatively impacted by adjustments primarily
associated with non-cash adjustments of deferred taxes in
connection with the domestication of the parent company to the
U.S. For the full year 2023, revenue was up 4% compared to
2022, with incremental margins, ex-items, over 80%, driven by
continued execution of the Company's strategic operational
efficiency priorities. The Company's full year EPS, ex-items,
was $0.80, representing year on year
growth of 40%. A full reconciliation of non-GAAP financial
measures is included in the attached financial tables.
Core's CEO, Larry Bruno stated,
"Our fourth quarter and full year financial results delivered
modest revenue growth, highlighted by continued strong global
demand for our Reservoir Description laboratory services.
Additionally, demand for international energetic system product
sales and completion diagnostics improved
quarter-over-quarter. Reservoir Description experienced
sequential growth in several geographic regions; however, that was
partially offset by geopolitical events in the Middle East, as hydrocarbon trading patterns
and the associated demand for crude oil and derived product assay
work were disrupted. In 2023, we experienced growth in
committed work volumes across our Reservoir Description laboratory
network. In particular, Core's investments to expand
capabilities in the Middle East
and Latin American markets prior to the global pandemic are now
coming to fruition, 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 incremental margins. Aligned
with our stated strategy, Core Lab reduced debt by $15 million in the fourth quarter of 2023,
amounting to the elimination of more than 8% of the Company's total
outstanding debt as of September 30,
2023. Core remains diligently focused on its strategic
business priorities which include further reduction of debt and
strengthening the balance sheet, while at the same time working to
increase our return on invested capital, which improved for the
sixth consecutive quarter."
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 fourth quarter of 2023 was
$84,600,000, flat sequentially.
Operating income was $12,300,000,
yielding operating margins, ex-items, of 15%. The segment's
financial performance in the fourth quarter of 2023 reflects
increased demand for reservoir rock and fluid analysis in
international markets. This was somewhat offset by
disruptions to hydrocarbon trading patterns and associated
laboratory assay work in response to the Middle East conflict that emerged early in the
fourth quarter of 2023. While operating margins remained
strong, sequential margins were negatively impacted by higher labor
costs. For the full year 2023, the segment's revenue
increased 8%, and incremental margins, ex-items, were over 85%.
During the fourth quarter of 2023, Core Laboratories Middle East
Advanced Technology Center was selected by a prominent regional
operator to quantify and de-risk their assessment of in-situ fluid
saturations in a challenging carbonate reservoir. The
operator recognized discrepancies between reserve estimates derived
from down-hole log calculations and actual production outcomes from
the targeted zones. Core Lab was asked to harness the
collective expertise of both Reservoir Description and Production
Enhancement to employ its proprietary, highly effective,
InvasionProfiler™ drilling mud tracer technologies to address
this problem. For this program, cores were cut in the target
intervals to determine the fluid saturations in the rock.
However, the coring process can alter saturations due to fluid
exchange between the drilling mud and the pore space in the
rock. 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 allowed the operator to
accurately account for and quantify any fluid exchange that might
have occurred. The fluids extracted from the core samples
underwent thorough analysis using state-of-the-art gas
chromatography-mass spectrometry to measure tracer
concentrations. This meticulous analytical process corrected
for any invasion of drilling mud filtrate, delivering very accurate
determination of in-situ fluid saturations. The operator will use
this core-based, tracer-corrected fluid saturation data to
recalibrate their reservoir model.
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 fourth
quarter 2023 revenue of $43,600,000,
up over 8% sequentially. The sequential financial performance
reflects higher demand for U.S. and international completion
diagnostics, along with a rebound in international product
sales. Operating income on a GAAP basis was $2,200,000, while operating income, ex-items, was
$2,400,000, yielding operating
margins of 6% and incremental margins exceeding 20%.
Production Enhancement's full year 2023 revenue decreased 3%,
primarily due to lower activity associated with drilling and
completing onshore wells in the U.S.
During the fourth quarter of 2023 Core Lab expanded its
proprietary HELIOS™ product line of plug and abandonment
perforating technologies, designed for oil and gas well
decommissioning programs. When decommissioning a well in the
North Sea, local regulations require a new, dedicated cement
barrier be emplaced to fully isolate the wellbore. Core's
engineering team was engaged to deploy HELIOS™ to increase
efficiency for a plug and abandonment "perf-wash" operation.
Existing competitive plug and abandonment technologies were unable
to create the needed annular circulation patterns required to
efficiently remove the old cement. HELIOS™ provides a
higher shot density, optimizing flow between perforations with 360°
annular coverage. This technology generates an array of
perforations that minimizes fluid flow tortuosity, yielding faster
and more efficient perf-wash operations. The
HELIOS™ family now consists of multiple configurations,
offering clients higher perforation coverage compared to
competitive technologies. Core's clients confirmed that the
HELIOS™ technology provided a more effective flow path to the
existing cement barrier in the annulus, resulting in a superior
well abandonment solution. The expanded HELIOS™ product
line demonstrates Core's commitment to developing new technologies
for its clients throughout the lifecycle of a well.
Also during the fourth quarter of 2023, Core's diagnostic
technologies were employed in both the U. S. and international
markets to assess high-profile well completions. In the
Gulf of Mexico, where an operator
needed to confirm the competency of their frac pack completion,
Core's proprietary SpectraStim™ proppant tracing,
SpectraScan® gamma ray logging and PackScan® density logging
technologies were employed. After processing the logs, Core's
engineering team determined that there was an effective annular
pack. However, there was insufficient proppant placement
across the zone to ensure long-term stability of the frac
pack. The operator executed a cost-effective remedial
treatment, averting a costly, time-consuming recompletion. In
the international arena, Core's proprietary technologies were used
to determine the competency of an openhole gravel pack offshore
Trinidad. Core's PackScan® log revealed an annular void in
the lower portion of the sand control screen, but also showed that
there was a sufficient proppant reserve above the top of the screen
to fill in this void. Core's technical team recommended that
the operator slowly bring the well on production, allowing for the
gradual in-filling of this void. The operator followed Core's
recommendation, and the well generated sand-free hydrocarbon
production. The operator shared that had it not been for
Core's recommendation, they would have initially flowed the well at
a high rate, as per their standard practice, and the completion
would have likely failed, leading to an expensive
remediation.
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 fourth quarter of 2023, cash
from operations was approximately $19,400,000 and capital expenditures were
$2,700,000, yielding FCF of
$16,700,000.
Core expects the Company to continue generating positive free
cash in future quarters. As of December 31, 2023, Core reduced net debt by
$13,500,000 from prior quarter-end to
$150,900,000, and the Company's
leverage ratio improved from 1.92 to 1.76. 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 November 1, 2023, Core's Board
of Directors ("Board") announced a quarterly cash dividend of
$0.01 per share of common stock,
which was paid on December 4, 2023 to
shareholders of record on November
13, 2023.
On January 31, 2024, the Board
approved a cash dividend of $0.01 per
share of common stock payable on March 4,
2024 to shareholders of record on February 12, 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 recently updated formula, the Company's ROIC for
the fourth quarter of 2023 improved to 13.4%.
Industry and Core Lab Outlook and Guidance
For 2024, Core will continue to execute its strategic plan of
technology investments targeted to both solve client problems and
capitalize on Core's growth opportunities. As part of the
strategic plan, the Company will remain focused on generating free
cash, reducing debt and maximizing ROIC. 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. Crude-oil
demand increased in 2023 and is anticipated to continue growing in
2024. Consequently, 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,
global crude-oil markets may remain volatile due to global
recession fears and the uncertainties related to on-going conflicts
in Russia-Ukraine and the Middle
East.
As the international recovery continues, 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 customary, Core expects typical sequential
seasonal industry patterns will cause activity in the first quarter
of 2024 to decline in some regions. As such, Core anticipates
Reservoir Description's first quarter 2024 revenue to be down low
to mid-single digits. Increased client activity in some
regions may help mitigate the typical seasonal decline. 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, along with the associated laboratory
assay services that Core Lab provides. Turning to the U.S.,
onshore drilling and completion activity in 2024 is anticipated to
be flat compared to 2023. However, market penetration of
Core's proprietary energetic system and completion diagnostic
service technologies are projected to outperform activity
levels. For the first quarter of 2024, onshore U.S. drilling
and completion activity was adversely impacted by extreme freezing
conditions in January; however, activity is expected to improve as
the quarter progresses.
Reservoir Description's first quarter 2024 revenue is projected
to range from $80,000,000 to
$84,000,000 and operating income of
$10,100,000 to $11,900,000. Core's Production Enhancement
segment's first quarter 2024 revenue is estimated to range from
$42,000,000 to $44,000,000 and operating income of $1,500,000 to $2,200,000.
The Company's first quarter 2024 revenue is projected to range
from $122,000,000 to $128,000,000 and operating income of $11,800,000 to $14,300,000, yielding operating margins of
approximately 10%. EPS for the first quarter of 2024 is
expected to be $0.14 to $0.18.
The Company's first quarter 2024 guidance is based on
projections for underlying operations and excludes gains and losses
in foreign exchange. First 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
fourth quarter 2023 earnings announcement. The call will
begin at 7:30 a.m. CDT / 8:30 a.m. EDT on Thursday, February 1,
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)
|
|
|
|
Quarter
Ended
|
|
|
%
Variance
|
|
|
|
December 31,
2023
|
|
|
September 30,
2023
|
|
|
December 31,
2022
|
|
|
vs.
Q3-2023
|
|
vs.
Q4-2022
|
|
REVENUE
|
|
$
|
128,210
|
|
|
$
|
125,343
|
|
|
$
|
127,571
|
|
|
2.3 %
|
|
0.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs of services and
product sales
|
|
|
101,517
|
|
|
|
96,617
|
|
|
|
99,816
|
|
|
5.1 %
|
|
1.7 %
|
|
General and
administrative expense
|
|
|
8,665
|
|
|
|
9,452
|
|
|
|
8,724
|
|
|
(8.3) %
|
|
(0.7) %
|
|
Depreciation and
amortization
|
|
|
3,874
|
|
|
|
3,929
|
|
|
|
4,073
|
|
|
(1.4) %
|
|
(4.9) %
|
|
Other (income) expense,
net
|
|
|
(427)
|
|
|
|
673
|
|
|
|
(660)
|
|
|
NM
|
|
NM
|
|
Total operating
expenses
|
|
|
113,629
|
|
|
|
110,671
|
|
|
|
111,953
|
|
|
2.7 %
|
|
1.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
|
|
14,581
|
|
|
|
14,672
|
|
|
|
15,618
|
|
|
(0.6) %
|
|
(6.6) %
|
|
Interest
expense
|
|
|
3,618
|
|
|
|
3,147
|
|
|
|
3,081
|
|
|
15.0 %
|
|
17.4 %
|
|
Income before income
taxes
|
|
|
10,963
|
|
|
|
11,525
|
|
|
|
12,537
|
|
|
(4.9) %
|
|
(12.6) %
|
|
Income tax expense
(benefit)
|
|
|
4,265
|
|
|
|
2,305
|
|
|
|
5,847
|
|
|
85.0 %
|
|
(27.1) %
|
|
Net income
|
|
|
6,698
|
|
|
|
9,220
|
|
|
|
6,690
|
|
|
(27.4) %
|
|
0.1 %
|
|
Net income (loss)
attributable to non-
controlling interest
|
|
|
235
|
|
|
|
(37)
|
|
|
|
(61)
|
|
|
NM
|
|
NM
|
|
Net income attributable
to Core
Laboratories Inc.
|
|
$
|
6,463
|
|
|
$
|
9,257
|
|
|
$
|
6,751
|
|
|
(30.2) %
|
|
(4.3) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
|
$
|
0.14
|
|
|
$
|
0.19
|
|
|
$
|
0.14
|
|
|
(26.3) %
|
|
— %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share attributable to Core Laboratories Inc.
|
|
$
|
0.14
|
|
|
$
|
0.19
|
|
|
$
|
0.14
|
|
|
(26.3) %
|
|
— %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average common shares outstanding
|
|
|
47,557
|
|
|
|
47,604
|
|
|
|
46,826
|
|
|
(0.1) %
|
|
1.6 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax
rate
|
|
|
39
|
%
|
|
|
20
|
%
|
|
|
47
|
%
|
|
NM
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT
INFORMATION:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reservoir
Description
|
|
$
|
84,628
|
|
|
$
|
85,145
|
|
|
$
|
78,124
|
|
|
(0.6) %
|
|
8.3 %
|
|
Production
Enhancement
|
|
|
43,582
|
|
|
|
40,198
|
|
|
|
49,447
|
|
|
8.4 %
|
|
(11.9) %
|
|
Total
|
|
$
|
128,210
|
|
|
$
|
125,343
|
|
|
$
|
127,571
|
|
|
2.3 %
|
|
0.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reservoir
Description
|
|
$
|
12,259
|
|
|
$
|
12,992
|
|
|
$
|
6,817
|
|
|
(5.6) %
|
|
79.8 %
|
|
Production
Enhancement
|
|
|
2,195
|
|
|
|
1,544
|
|
|
|
7,904
|
|
|
42.2 %
|
|
(72.2) %
|
|
Corporate and
Other
|
|
|
127
|
|
|
|
136
|
|
|
|
897
|
|
|
NM
|
|
NM
|
|
Total
|
|
$
|
14,581
|
|
|
$
|
14,672
|
|
|
$
|
15,618
|
|
|
(0.6) %
|
|
(6.6) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
"NM" means not
meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CORE LABORATORIES
INC. & SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except
per share data)
(Unaudited)
|
|
|
|
|
|
Year Ended December
31,
|
|
%
Variance
|
|
|
|
2023
|
|
2022
|
|
|
|
REVENUE
|
|
$509,790
|
|
$489,735
|
|
4.1 %
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
|
|
|
|
Costs of services and
product sales
|
|
399,957
|
|
393,655
|
|
1.6 %
|
|
General and
administrative expense
|
|
40,259
|
|
38,117
|
|
5.6 %
|
|
Depreciation and
amortization
|
|
15,784
|
|
17,161
|
|
(8.0) %
|
|
Other (income) expense,
net
|
|
(850)
|
|
(722)
|
|
NM
|
|
Total operating
expenses
|
|
455,150
|
|
448,211
|
|
1.5 %
|
|
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
|
54,640
|
|
41,524
|
|
31.6 %
|
|
Interest
expense
|
|
13,430
|
|
11,570
|
|
16.1 %
|
|
Income before income
taxes
|
|
41,210
|
|
29,954
|
|
37.6 %
|
|
Income tax expense
(benefit)
|
|
(79)
|
|
10,296
|
|
(100.8) %
|
|
Net income
|
|
41,289
|
|
19,658
|
|
110.0 %
|
|
Net income attributable
to non-controlling interest
|
|
350
|
|
205
|
|
NM
|
|
Net income attributable
to Core Laboratories Inc.
|
|
$40,939
|
|
$19,453
|
|
110.5 %
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
|
$0.87
|
|
$0.42
|
|
107.1 %
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share attributable to Core Laboratories Inc.
|
|
$0.86
|
|
$0.42
|
|
104.8 %
|
|
|
|
|
|
|
|
|
|
Diluted weighted
average common shares outstanding
|
|
47,523
|
|
46,813
|
|
1.5 %
|
|
|
|
|
|
|
|
|
|
Effective tax
rate
|
|
(0) %
|
|
34 %
|
|
NM
|
|
|
|
|
|
|
|
|
|
SEGMENT
INFORMATION:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
Reservoir
Description
|
|
$333,345
|
|
$307,691
|
|
8.3 %
|
|
Production
Enhancement
|
|
176,445
|
|
182,044
|
|
(3.1) %
|
|
Total
|
|
$509,790
|
|
$489,735
|
|
4.1 %
|
|
|
|
|
|
|
|
|
|
Operating
income:
|
|
|
|
|
|
|
|
Reservoir
Description
|
|
$41,039
|
|
$22,902
|
|
79.2 %
|
|
Production
Enhancement
|
|
12,519
|
|
16,351
|
|
(23.4) %
|
|
Corporate and
Other
|
|
1,082
|
|
2,271
|
|
(52.4) %
|
|
Total
|
|
$54,640
|
|
$41,524
|
|
31.6 %
|
|
|
|
|
|
|
|
|
|
"NM" means not
meaningful
|
|
|
|
|
|
|
|
CORE LABORATORIES
INC. & SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS
(In
thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
%
Variance
|
|
ASSETS:
|
|
December 31,
2023
|
|
|
September 30,
2023
|
|
|
December 31,
2022
|
|
|
vs.
Q3-2023
|
|
vs.
Q4-2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
15,120
|
|
|
$
|
16,616
|
|
|
$
|
15,428
|
|
|
(9.0) %
|
|
(2.0) %
|
|
Accounts receivable,
net
|
|
|
109,352
|
|
|
|
104,053
|
|
|
|
106,913
|
|
|
5.1 %
|
|
2.3 %
|
|
Inventories
|
|
|
71,702
|
|
|
|
75,060
|
|
|
|
60,445
|
|
|
(4.5) %
|
|
18.6 %
|
|
Other current
assets
|
|
|
26,791
|
|
|
|
32,815
|
|
|
|
28,916
|
|
|
(18.4) %
|
|
(7.3) %
|
|
Total current
assets
|
|
|
222,965
|
|
|
|
228,544
|
|
|
|
211,702
|
|
|
(2.4) %
|
|
5.3 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
|
99,626
|
|
|
|
99,499
|
|
|
|
105,028
|
|
|
0.1 %
|
|
(5.1) %
|
|
Right of use
assets
|
|
|
53,842
|
|
|
|
53,101
|
|
|
|
52,379
|
|
|
1.4 %
|
|
2.8 %
|
|
Intangibles, goodwill
and other long-term assets, net
|
|
|
216,165
|
|
|
|
211,270
|
|
|
|
209,245
|
|
|
2.3 %
|
|
3.3 %
|
|
Total assets
|
|
$
|
592,598
|
|
|
$
|
592,414
|
|
|
$
|
578,354
|
|
|
— %
|
|
2.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
33,506
|
|
|
$
|
34,097
|
|
|
$
|
45,847
|
|
|
(1.7) %
|
|
(26.9) %
|
|
Operating lease
liabilities
|
|
|
10,175
|
|
|
|
9,794
|
|
|
|
11,699
|
|
|
3.9 %
|
|
(13.0) %
|
|
Other current
liabilities
|
|
|
43,791
|
|
|
|
40,359
|
|
|
|
45,589
|
|
|
8.5 %
|
|
(3.9) %
|
|
Total current
liabilities
|
|
|
87,472
|
|
|
|
84,250
|
|
|
|
103,135
|
|
|
3.8 %
|
|
(15.2) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt,
net
|
|
|
163,134
|
|
|
|
177,863
|
|
|
|
172,386
|
|
|
(8.3) %
|
|
(5.4) %
|
|
Long-term operating
lease liabilities
|
|
|
42,076
|
|
|
|
40,903
|
|
|
|
38,305
|
|
|
2.9 %
|
|
9.8 %
|
|
Other long-term
liabilities
|
|
|
65,845
|
|
|
|
59,948
|
|
|
|
75,574
|
|
|
9.8 %
|
|
(12.9) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total equity
|
|
|
234,071
|
|
|
|
229,450
|
|
|
|
188,954
|
|
|
2.0 %
|
|
23.9 %
|
|
Total liabilities and
equity
|
|
$
|
592,598
|
|
|
$
|
592,414
|
|
|
$
|
578,354
|
|
|
— %
|
|
2.5 %
|
|
CORE LABORATORIES
INC. & SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In
thousands)
(Unaudited)
|
|
|
|
|
|
Year Ended December
31,
|
|
|
|
2023
|
|
|
2022
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
Net income
|
|
$
|
41,289
|
|
|
$
|
19,658
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
Stock-based
compensation
|
|
|
13,971
|
|
|
|
7,756
|
|
Depreciation and
amortization
|
|
|
15,784
|
|
|
|
17,161
|
|
Deferred income
taxes
|
|
|
(14,623)
|
|
|
|
433
|
|
Accounts
receivable
|
|
|
(2,618)
|
|
|
|
(10,078)
|
|
Inventories
|
|
|
(12,976)
|
|
|
|
(14,860)
|
|
Accounts
payable
|
|
|
(12,878)
|
|
|
|
15,374
|
|
Other adjustments to
net income
|
|
|
(3,160)
|
|
|
|
(10,488)
|
|
Net cash provided by
operating activities
|
|
|
24,789
|
|
|
|
24,956
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
(10,579)
|
|
|
|
(10,216)
|
|
Net proceeds from life
insurance policies and from insurance recovery
|
|
|
3,375
|
|
|
|
4,260
|
|
Other investing
activities
|
|
|
552
|
|
|
|
2,100
|
|
Net cash used in
investing activities
|
|
|
(6,652)
|
|
|
|
(3,856)
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
Repayment of long-term
debt
|
|
|
(211,000)
|
|
|
|
(131,000)
|
|
Proceeds from long-term
debt
|
|
|
202,000
|
|
|
|
116,000
|
|
Equity related
transaction costs
|
|
|
(4,068)
|
|
|
|
(411)
|
|
Dividends
paid
|
|
|
(1,868)
|
|
|
|
(1,853)
|
|
Repurchase of common
stock
|
|
|
(2,202)
|
|
|
|
(3,903)
|
|
Other financing
activities
|
|
|
(1,307)
|
|
|
|
(2,208)
|
|
Net cash used in
financing activities
|
|
|
(18,445)
|
|
|
|
(23,375)
|
|
|
|
|
|
|
|
|
NET CHANGE IN CASH AND
CASH EQUIVALENTS
|
|
|
(308)
|
|
|
|
(2,275)
|
|
CASH AND CASH
EQUIVALENTS, beginning of year
|
|
|
15,428
|
|
|
|
17,703
|
|
CASH AND CASH
EQUIVALENTS, end of year
|
|
$
|
15,120
|
|
|
$
|
15,428
|
|
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
|
|
|
|
Quarter
Ended
|
|
|
|
December 31,
2023
|
|
|
September 30,
2023
|
|
|
December 31,
2022
|
|
GAAP
reported
|
|
$
|
14,581
|
|
|
$
|
14,672
|
|
|
$
|
15,618
|
|
Stock compensation
(1)
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,868)
|
|
Loss on lease
abandonment and assets write-down (2)
|
|
|
—
|
|
|
|
633
|
|
|
|
—
|
|
ATM termination costs
(3)
|
|
|
—
|
|
|
|
455
|
|
|
|
—
|
|
Redomestication
costs
|
|
|
—
|
|
|
|
—
|
|
|
|
246
|
|
Foreign exchange losses
(gains)
|
|
|
468
|
|
|
|
238
|
|
|
|
691
|
|
Excluding specific
items
|
|
$
|
15,049
|
|
|
$
|
15,998
|
|
|
$
|
14,687
|
|
|
|
|
|
Net Income
Attributable to Core Laboratories Inc.
|
|
|
|
Quarter
Ended
|
|
|
|
December 31,
2023
|
|
|
September 30,
2023
|
|
|
December 31,
2022
|
|
GAAP
reported
|
|
$
|
6,463
|
|
|
$
|
9,257
|
|
|
$
|
6,751
|
|
Stock compensation
(1)
|
|
|
—
|
|
|
|
—
|
|
|
|
(1,494)
|
|
Loss on lease
abandonment and assets write-down (2)
|
|
|
—
|
|
|
|
505
|
|
|
|
—
|
|
ATM termination costs
(3)
|
|
|
—
|
|
|
|
364
|
|
|
|
—
|
|
Redomestication
costs
|
|
|
—
|
|
|
|
—
|
|
|
|
197
|
|
Foreign exchange losses
(gains)
|
|
|
374
|
|
|
|
190
|
|
|
|
552
|
|
Reversal of net
deferred tax liabilities and effect of higher (lower) tax rate
(5)
|
|
|
2,072
|
|
|
|
—
|
|
|
|
3,341
|
|
Excluding specific
items
|
|
$
|
8,909
|
|
|
$
|
10,316
|
|
|
$
|
9,347
|
|
|
|
Diluted Earnings Per
Share Attributable to Core Laboratories Inc.
|
|
|
|
Quarter
Ended
|
|
|
Year
ended
|
|
|
|
December 31,
2023
|
|
|
September 30,
2023
|
|
|
December 31,
2022
|
|
|
December 31,
2023
|
|
GAAP
reported
|
|
$
|
0.14
|
|
|
$
|
0.19
|
|
|
$
|
0.14
|
|
|
$
|
0.86
|
|
Stock compensation
(1)
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.03)
|
|
|
|
0.09
|
|
Loss on lease
abandonment and assets write-down (2)
|
|
|
—
|
|
|
|
0.01
|
|
|
|
—
|
|
|
|
0.04
|
|
ATM termination costs
(3)
|
|
|
—
|
|
|
|
0.01
|
|
|
|
—
|
|
|
|
0.01
|
|
Gain on life insurance
policies (4)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.03)
|
|
Redomestication
costs
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Foreign exchange losses
(gains)
|
|
|
0.01
|
|
|
|
0.01
|
|
|
|
0.02
|
|
|
|
—
|
|
Reversal of net
deferred tax liabilities and effect of higher (lower) tax rate
(5)
|
|
|
0.04
|
|
|
|
—
|
|
|
|
0.07
|
|
|
|
(0.17)
|
|
Excluding specific
items
|
|
$
|
0.19
|
|
|
$
|
0.22
|
|
|
$
|
0.20
|
|
|
$
|
0.80
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The year ended
December 31, 2023 includes reversals of stock compensation expense
previously recognized due to a change in probability of performance
condition for
certain executive's share awards and the acceleration of stock
compensation expense associated with employees reaching eligible
retirement age. The quarter ended
December 31, 2022 includes adjustments associated with certain
performance share awards that vested during the
quarter.
|
|
(2) Includes the
write-down of right of use assets and leasehold improvements and
other exit costs associated with consolidation of certain
facilities.
|
|
(3) Includes the
write off of previously deferred costs upon termination of our
"at-the-market offering" program ("ATM Program").
|
|
(4) Includes gain
on life insurance policies death benefit proceeds.
|
|
(5) The quarter and
year ended December 31, 2023 includes the reversal of certain net
deferred tax liabilities which will not be realized as a result of
the Redomestication
Transaction and the effect to reflect tax expense at a normalized
rate of 20%. The quarter ended December 31, 2022 includes the
effect to reflect tax expense at a
normalized rate of 20%.
|
|
Segment
Information
(In
thousands)
(Unaudited)
|
|
|
|
Operating
Income
|
|
|
|
Quarter Ended
December 31, 2023
|
|
|
|
Reservoir
Description
|
|
|
Production
Enhancement
|
|
|
Corporate and
Other
|
|
GAAP
reported
|
|
$
|
12,259
|
|
|
$
|
2,195
|
|
|
$
|
127
|
|
Foreign exchange losses
(gains)
|
|
|
71
|
|
|
|
209
|
|
|
|
188
|
|
Excluding specific
items
|
|
$
|
12,330
|
|
|
$
|
2,404
|
|
|
$
|
315
|
|
|
|
|
|
|
|
|
|
|
|
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 13.4% is defined by Bloomberg as Net Operating Profit
After Tax ("NOPAT") of $51.9 million
divided by Average Total Invested Capital ("Average TIC") of
$387.0 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)
|
|
|
|
|
|
Quarter
Ended
|
|
|
Year
Ended
|
|
|
|
December 31,
2023
|
|
|
December 31,
2023
|
|
Net cash provided by
operating activities
|
|
$
|
19,429
|
|
|
$
|
24,789
|
|
Capital
expenditures
|
|
|
(2,736)
|
|
|
|
(10,579)
|
|
Free cash
flow
|
|
$
|
16,693
|
|
|
$
|
14,210
|
|
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SOURCE Core Laboratories Inc