ChampionX Corporation (NASDAQ: CHX) (“ChampionX” or the
“Company”) today announced third quarter of 2023 results.
Revenue was $939.8 million, net income attributable to ChampionX
was $77.7 million, and adjusted EBITDA was $189.5 million. Income
before income taxes margin was 11.7% and adjusted EBITDA margin was
20.2%. Cash from operating activities was $163.0 million and free
cash flow was $114.6 million.
CEO Commentary
“We delivered adjusted EBITDA growth and robust free cash flow
generation during the third quarter and once again demonstrated our
commitment to return excess cash to our shareholders through our
regular cash dividend and share repurchases. Our ongoing focus on
price realization and productivity contributed to strong
year-over-year profitability improvement. We remain focused on
shareholder value creation and our disciplined framework of capital
allocation. I am grateful to our employees around the world for
their tireless dedication to serving our customers and communities
well,” ChampionX’s President and Chief Executive Officer
Sivasankaran “Soma” Somasundaram said.
“During the third quarter of 2023, we generated revenue of $940
million, which decreased 8% year-over-year, and increased 1%
sequentially. Both North America and international revenue
increased sequentially, led by our Production Chemical Technologies
business. Strong sequential growth in international and offshore
markets was largely offset by lower than expected drilling and
completions activity in U.S. land, which impacted Production &
Automation Technologies and Drilling Technologies revenues during
the period. We generated net income attributable to ChampionX of
$78 million, which increased 237% year-over-year and decreased 19%
sequentially, and adjusted EBITDA of $190 million, which increased
14% year-over-year and 2% sequentially and included approximately
$7 million of foreign exchange loss related to the devaluation of
our peso exposure in Argentina during the period. Our income before
income taxes margin improved by approximately 802 basis points
year-over-year and was flat sequentially, and our adjusted EBITDA
margin expanded by approximately 391 basis points year-over-year
and 7 basis points sequentially in the third quarter.
“Cash flow from operating activities was $163 million during the
third quarter, which represented 210% of net income attributable to
ChampionX, and we generated strong free cash flow of $115 million
during the period, which represented 60% of our adjusted EBITDA for
the period. Through our regular cash dividend of $17 million and
$68 million of ChampionX share repurchases, we returned 52% of cash
from operating activities and 74% of our free cash flow in the
third quarter to our shareholders. Our balance sheet and financial
position remain strong, ending the third quarter with $954 million
of liquidity, including $285 million of cash and $669 million of
available capacity on our revolving credit facility.
“As we look to the fourth quarter, we expect continued positive
momentum in our international and offshore businesses, offset by
seasonal declines in our North American businesses into the
year-end holidays. We expect our Drilling Technologies business to
experience a sequential revenue decline similar to the fourth
quarter of 2022 as some of our customers act to manage their
working capital into year end. On a consolidated basis, in the
fourth quarter, we expect revenue to be between $930 million and
$970 million. We expect adjusted EBITDA of $187 million to $197
million. Our cash generation remains strong, and for the full year,
we still expect to convert at least 50% of our adjusted EBITDA to
free cash flow, and we remain committed to returning at least 60%
of our free cash flow to our shareholders for the year.
“As we look into 2024 and beyond, we remain excited about the
constructive market fundamentals as the oil and gas industry is
benefiting from a multi-year growth cycle. As the leading provider
of production optimization solutions for the industry, we are well
positioned to benefit from this trend as the growth cycle unfolds.
We expect continued revenue and adjusted EBITDA growth, margin
expansion, and strong capital returns consistent with our capital
allocation framework.”
Production Chemical Technologies
Production Chemical Technologies revenue in the third quarter of
2023 was $604.3 million, an increase of $30.0 million, or 5%,
sequentially, due to higher demand both in North America and
internationally.
Segment operating profit was $94.6 million and adjusted segment
EBITDA was $125.1 million. Segment operating profit margin was
15.6%, an increase of 47 basis points, sequentially, and adjusted
segment EBITDA margin was 20.7%, an increase of 37 basis points,
sequentially. The increase in segment operating profit margin and
adjusted segment EBITDA margin reflects higher sales volumes,
offset by $7.2 million of foreign exchange loss related to the
devaluation of our peso exposure in Argentina during the
period.
Production & Automation Technologies
Production & Automation Technologies revenue in the third
quarter of 2023 was $256.1 million, an increase of $2.0 million, or
1%, sequentially, due to higher demand in our businesses
internationally.
Revenue from digital products was $58.0 million in the third
quarter of 2023, down 4% sequentially, and up 17%
year-over-year.
Segment operating profit was $28.3 million and adjusted segment
EBITDA was $59.3 million. Segment operating profit margin was
11.0%, a decrease of 202 basis points, sequentially, and adjusted
segment EBITDA margin was 23.2%, a decrease of 73 basis points,
sequentially. The decrease in segment operating profit margin and
adjusted segment EBITDA margin was driven by product mix.
Drilling Technologies
Drilling Technologies revenue in the third quarter of 2023 was
$54.9 million, a decrease of $2.5 million, or 4%, sequentially,
driven by lower U.S. rig count and customer activity.
Segment operating profit was $12.3 million and adjusted segment
EBITDA was $13.8 million. Segment operating profit margin was
22.3%, an increase of 25 basis points, sequentially, and adjusted
segment EBITDA margin was 25.1%, an increase of 5 basis points,
sequentially, in each case due to improved processing costs.
Reservoir Chemical Technologies
Reservoir Chemical Technologies revenue in the third quarter
2023 was $25.1 million, an increase of $1.2 million, or 5%,
sequentially, driven by higher sales volumes.
Segment operating profit was $2.5 million and adjusted segment
EBITDA was $4.2 million. Segment operating profit margin was 9.8%,
an increase of 64 bps basis points, sequentially, and adjusted
segment EBITDA margin was 16.6%, a decrease of 110 basis points,
sequentially. The decrease in adjusted segment EBITDA margin was
driven by product mix.
Q3 2023 Other Business Highlights
Chemical Technologies
- Secured a multi-year performance-based contract extension with
an Oil Major in U.S. land.
- Won a two-year contract extension with an independent E&P
operator in Colombia.
- Secured a multi-year contract extension with a global energy
company in Australia, which affords opportunities for additional
business growth in the next several years.
- Received safety performance and supplier quality recognition
from multiple customers in the Middle East and North Africa
region.
- Deployed its first nano-particle technology squeeze in
Europe.
- Converted production enhancement chemical treatment to
continual application for a customer in the UK North Sea.
- Gained a substantial win of a competitively held midstream
account in the Permian Basin, due to deep knowledge of the
customer’s operations and excellent technical capability and
service.
- Awarded the chemicals supply contract for a large independent
E&P operator’s second frac water reuse facility in the Permian
Basin as the customer expands its footprint and investment in the
area.
- Experienced a successful competitive gain of a scale squeeze in
the U.S. Gulf of Mexico, utilizing its XR portfolio of
products.
Production & Automation Technologies
- Achieved a net promoter score of 51% (versus industry average
of 41%) and garnered top-tier marks in every category in the most
recent Artificial Lift Market Survey by Kimberlite International
Oilfield Research.
- Won a large PurePower Pro™ order for harmonic filters with
a large independent producer in the Permian Basin. This technology
significantly reduces distortion, significantly reducing
power-generation costs and fees.
- Awarded a contract by an Integrated Oil Company in Latin
America to monitor 400 wells with our XSPOC™ production
optimization software, with the potential for an additional 600
wells.
- Awarded a project for an Oil Major in the Permian Basin to
install 150 full chemical injection skid solutions (including pumps
and automation technology) on newly drilled unconventional
wells.
- Secured a customer commitment in Australia for our newly
commercialized ultra-quiet progressing cavity pumping (PCP) system
drivehead, which addresses noise pollution concerns of land
holders.
- Received the Shell Quality Recognition Award from Shell’s QGC
business, one of the top natural gas producers in Australia.
Drilling Technologies
- 43% of third quarter revenue was generated from products that
were less than three years old.
Other
- ChampionX is honored to be nominated eight times across four
categories for the ALLY Energy GRIT Awards for making a positive
impact on energy, sustainability, and the climate.
- ChampionX published its second annual Sustainability Report
highlighting our initiatives that align with our purpose of
Improving Lives and the work we are doing to further our customers’
carbon-reduction efforts.
- ChampionX opened our newest technology center in Chennai,
India. The new ChampionX Global Technology Center - India
represents a further extension of our focus on developing and
delivering a wide range of cross-industry technology solutions and
expertise.
Conference Call Details
ChampionX Corporation will host a conference call on Wednesday,
October 25, 2023, to discuss its third quarter 2023 financial
results and outlook. The call will begin at 9:00 a.m. Eastern Time.
Presentation materials that supplement the conference call will be
available on ChampionX’s website at investors.championx.com.
To listen to the call via a live webcast, please visit
ChampionX’s website at investor.championx.com. The call will also
be available by dialing 1-888-259-6580 in the United States or
1-416-764-8624 for international calls. Please call approximately
15 minutes prior to the scheduled start time and reference
ChampionX conference call number 11375578.
A replay of the conference call will be available for 30 days on
ChampionX’s website.
About Non-GAAP Measures
In addition to financial results determined in accordance with
generally accepted accounting principles in the United States
(“GAAP”), this news release presents non-GAAP financial measures.
Management believes that adjusted EBITDA, adjusted EBITDA margin,
adjusted segment EBITDA, adjusted segment EBITDA margin, adjusted
net income attributable to ChampionX and adjusted diluted earnings
per share attributable to ChampionX, provide useful information to
investors regarding the Company’s financial condition and results
of operations because they reflect the core operating results of
our businesses and help facilitate comparisons of operating
performance across periods. In addition, free cash flow, free cash
flow to adjusted EBITDA ratio, and free cash flow to revenue ratio
provide useful information to investors because they reflect the
core operating results of our businesses and help facilitate
comparisons of operating performance across periods. In addition,
these measures are used by management to measure our ability to
generate positive cash flow for debt reduction and to support our
strategic objectives. Although management believes the
aforementioned non-GAAP financial measures are good tools for
internal use and the investment community in evaluating ChampionX’s
overall financial performance, the foregoing non-GAAP financial
measures should be considered in addition to, not as a substitute
for or superior to, other measures of financial performance
prepared in accordance with GAAP. A reconciliation of these
non-GAAP measures to the most directly comparable GAAP measures is
included in the accompanying financial tables.
This press release contains certain forward-looking non-GAAP
financial measures, including adjusted EBITDA. The Company has not
provided projected net income attributable to ChampionX or a
reconciliation of projected adjusted EBITDA. Management cannot
predict with a reasonable degree of accuracy certain of the
necessary components of net income attributable to ChampionX, such
as depreciation and amortization expense. As such, a reconciliation
of projected adjusted EBITDA to projected net income attributable
to ChampionX is not available without unreasonable effort. The
actual amount of depreciation and amortization, in particular, and
other amounts excluded from adjusted EBITDA will have a significant
impact on net income attributable to ChampionX.
About ChampionX
ChampionX is a global leader in chemistry solutions, artificial
lift systems, and highly engineered equipment and technologies that
help companies drill for and produce oil and gas safely,
efficiently, and sustainably around the world. ChampionX’s
expertise, innovative products, and digital technologies provide
enhanced oil and gas production, transportation, and real-time
emissions monitoring throughout the lifecycle of a well. To learn
more about ChampionX, visit our website at www.championX.com.
Forward-Looking Statements
This news release contains statements relating to future actions
and results, which are "forward-looking statements" within the
meaning of the Securities Exchange Act of 1934, as amended, and the
Private Securities Litigation Reform Act of 1995. Such statements
relate to, among other things, ChampionX's market position and
growth opportunities. Forward-looking statements include
statements related to ChampionX’s expectations regarding the
performance of the business, financial results, liquidity and
capital resources of ChampionX. Forward-looking statements are
subject to inherent risks and uncertainties that could cause actual
results to differ materially from current expectations, including,
but not limited to, changes in economic, competitive, strategic,
technological, tax, regulatory or other factors that affect the
operations of ChampionX’s businesses. You are encouraged to refer
to the documents that ChampionX files from time to time with the
Securities and Exchange Commission (“SEC”), including the “Risk
Factors” in ChampionX’s Annual Report on Form 10-K for the fiscal
year ended December 31, 2022, and in ChampionX’s other filings with
the SEC. Readers are cautioned not to place undue reliance on
ChampionX’s forward-looking statements. Forward-looking statements
speak only as of the day they are made and ChampionX
undertakes no obligation to update any forward-looking statement,
except as required by applicable law.
Investor Contact: Byron
Popebyron.pope@championx.com 281-602-0094
Media Contact: John
Breedjohn.breed@championx.com 281-403-5751
CHAMPIONX CORPORATIONCONDENSED
CONSOLIDATED STATEMENTS OF
INCOME(UNAUDITED)
| |
Three Months Ended |
|
Nine Months Ended |
| |
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
(in thousands, except per share amounts) |
|
2023 |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
2022 |
| Revenue |
$ |
939,783 |
|
$ |
926,600 |
|
|
$ |
1,021,561 |
|
|
$ |
2,814,730 |
|
$ |
2,820,093 |
| Cost of goods and services |
|
647,923 |
|
|
644,394 |
|
|
|
825,018 |
|
|
|
1,957,309 |
|
|
2,204,052 |
| Gross
profit |
|
291,860 |
|
|
282,206 |
|
|
|
196,543 |
|
|
|
857,421 |
|
|
616,041 |
| Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expense |
|
162,317 |
|
|
162,484 |
|
|
|
153,736 |
|
|
|
485,617 |
|
|
445,447 |
|
Loss (gain) on disposal group |
|
— |
|
|
— |
|
|
|
(6,409 |
) |
|
|
12,965 |
|
|
16,515 |
|
Interest expense, net |
|
13,744 |
|
|
14,544 |
|
|
|
11,454 |
|
|
|
40,754 |
|
|
33,582 |
|
Other expense (income), net |
|
5,998 |
|
|
(3,104 |
) |
|
|
291 |
|
|
|
8,189 |
|
|
10,968 |
| Income before income
taxes |
|
109,801 |
|
|
108,282 |
|
|
|
37,471 |
|
|
|
309,896 |
|
|
109,529 |
| Provision for income taxes |
|
29,009 |
|
|
11,656 |
|
|
|
14,246 |
|
|
|
69,334 |
|
|
19,235 |
| Net income |
|
80,792 |
|
|
96,626 |
|
|
|
23,225 |
|
|
|
240,562 |
|
|
90,294 |
|
Net income attributable to noncontrolling interest |
|
3,081 |
|
|
829 |
|
|
|
157 |
|
|
|
3,522 |
|
|
3,182 |
| Net income attributable
to ChampionX |
$ |
77,711 |
|
$ |
95,797 |
|
|
$ |
23,068 |
|
|
$ |
237,040 |
|
$ |
87,112 |
| |
|
|
|
|
|
|
|
|
|
| Earnings per share attributable
to ChampionX: |
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.40 |
|
$ |
0.49 |
|
|
$ |
0.11 |
|
|
$ |
1.20 |
|
$ |
0.43 |
|
Diluted |
$ |
0.39 |
|
$ |
0.48 |
|
|
$ |
0.11 |
|
|
$ |
1.18 |
|
$ |
0.42 |
| |
|
|
|
|
|
|
|
|
|
| Weighted-average shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
195,881 |
|
|
197,034 |
|
|
|
201,421 |
|
|
|
197,058 |
|
|
202,600 |
|
Diluted |
|
199,592 |
|
|
200,735 |
|
|
|
206,522 |
|
|
|
201,025 |
|
|
208,155 |
CHAMPIONX CORPORATIONCONDENSED
CONSOLIDATED BALANCE
SHEETS(UNAUDITED)
| (in
thousands) |
September 30, 2023 |
|
December 31, 2022 |
| ASSETS |
|
|
|
| Current Assets: |
|
|
|
|
Cash and cash equivalents |
$ |
285,006 |
|
|
$ |
250,187 |
|
|
Receivables, net |
|
520,106 |
|
|
|
601,061 |
|
|
Inventories, net |
|
588,800 |
|
|
|
542,543 |
|
|
Prepaid expenses and other current assets |
|
91,784 |
|
|
|
104,790 |
|
|
Total current assets |
|
1,485,696 |
|
|
|
1,498,581 |
|
| |
|
|
|
| Property, plant and equipment,
net |
|
763,559 |
|
|
|
734,810 |
|
| Goodwill |
|
666,108 |
|
|
|
679,488 |
|
| Intangible assets, net |
|
256,376 |
|
|
|
305,010 |
|
| Other non-current assets |
|
139,465 |
|
|
|
169,594 |
|
| Total
assets |
$ |
3,311,204 |
|
|
$ |
3,387,483 |
|
| |
|
|
|
| LIABILITIES AND
EQUITY |
|
|
|
| Current Liabilities: |
|
|
|
|
Current portion of long-term debt |
$ |
6,250 |
|
|
$ |
6,250 |
|
|
Accounts payable |
|
500,021 |
|
|
|
469,566 |
|
|
Other current liabilities |
|
287,605 |
|
|
|
383,160 |
|
|
Total current liabilities |
|
793,876 |
|
|
|
858,976 |
|
| |
|
|
|
| Long-term debt |
|
594,943 |
|
|
|
621,702 |
|
| Other long-term liabilities |
|
216,257 |
|
|
|
229,590 |
|
| Stockholders’ equity: |
|
|
|
|
ChampionX stockholders’ equity |
|
1,721,479 |
|
|
|
1,694,550 |
|
|
Noncontrolling interest |
|
(15,351 |
) |
|
|
(17,335 |
) |
| Total liabilities and
equity |
$ |
3,311,204 |
|
|
$ |
3,387,483 |
|
CHAMPIONX CORPORATIONCONDENSED
CONSOLIDATED STATEMENTS OF CASH
FLOWS(UNAUDITED)
| |
Nine Months Ended September 30, |
|
(in thousands) |
|
2023 |
|
|
|
2022 |
|
| Cash flows from
operating activities: |
|
|
|
| Net income |
$ |
240,562 |
|
|
$ |
90,294 |
|
|
Depreciation and amortization |
|
177,226 |
|
|
|
177,761 |
|
|
Loss on disposal group |
|
12,965 |
|
|
|
16,515 |
|
|
Deferred income taxes |
|
(15,380 |
) |
|
|
(37,505 |
) |
|
Gain on disposal of fixed assets |
|
(1,480 |
) |
|
|
(4,428 |
) |
|
Loss on debt extinguishment |
|
— |
|
|
|
4,043 |
|
|
Receivables |
|
85,181 |
|
|
|
(50,075 |
) |
|
Inventories |
|
(50,011 |
) |
|
|
(72,298 |
) |
|
Leased assets |
|
(38,597 |
) |
|
|
(20,947 |
) |
|
Other assets |
|
17,470 |
|
|
|
24,022 |
|
|
Accounts payable |
|
(7,018 |
) |
|
|
38,600 |
|
|
Other operating items, net |
|
(49,600 |
) |
|
|
52,285 |
|
| Net cash flows
provided by operating activities |
|
371,318 |
|
|
|
218,267 |
|
| |
|
|
|
| Cash flows from
investing activities: |
|
|
|
|
Capital expenditures |
|
(110,965 |
) |
|
|
(74,752 |
) |
|
Proceeds from sale of fixed assets |
|
12,328 |
|
|
|
16,424 |
|
|
Acquisitions, net of cash acquired |
|
— |
|
|
|
(3,198 |
) |
| Net cash used for
investing activities |
|
(98,637 |
) |
|
|
(61,526 |
) |
| |
|
|
|
| Cash flows from
financing activities: |
|
|
|
|
Proceeds from long-term debt |
|
15,500 |
|
|
|
995,038 |
|
|
Repayment of long-term debt |
|
(43,625 |
) |
|
|
(1,071,386 |
) |
|
Debt issuance costs |
|
(1,028 |
) |
|
|
(8,008 |
) |
|
Repurchases of common stock |
|
(159,730 |
) |
|
|
(100,090 |
) |
|
Dividends paid |
|
(48,309 |
) |
|
|
(30,480 |
) |
|
Other |
|
644 |
|
|
|
(275 |
) |
| Net cash used for
financing activities |
|
(236,548 |
) |
|
|
(215,201 |
) |
| |
|
|
|
| Effect of exchange rate
changes on cash and cash equivalents |
|
(1,314 |
) |
|
|
(5,746 |
) |
| |
|
|
|
| Net increase
(decrease) in cash and cash equivalents |
|
34,819 |
|
|
|
(64,206 |
) |
| Cash and cash equivalents at
beginning of period |
|
250,187 |
|
|
|
255,178 |
|
| Cash and cash
equivalents at end of period |
$ |
285,006 |
|
|
$ |
190,972 |
|
CHAMPIONX CORPORATIONBUSINESS SEGMENT
DATA(UNAUDITED)
| |
Three Months Ended |
| |
September 30, |
|
June 30, |
|
September 30, |
|
(in thousands) |
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
| Segment
revenue: |
|
|
|
|
|
| Production Chemical
Technologies |
$ |
604,254 |
|
|
$ |
574,302 |
|
|
$ |
643,604 |
|
| Production & Automation
Technologies |
|
256,148 |
|
|
|
254,156 |
|
|
|
247,717 |
|
| Drilling Technologies |
|
54,869 |
|
|
|
57,324 |
|
|
|
60,965 |
|
| Reservoir Chemical
Technologies |
|
25,093 |
|
|
|
23,853 |
|
|
|
35,485 |
|
| Corporate and other |
|
(581 |
) |
|
|
16,965 |
|
|
|
33,790 |
|
|
Total revenue |
$ |
939,783 |
|
|
$ |
926,600 |
|
|
$ |
1,021,561 |
|
| |
|
|
|
|
|
| Income
before income taxes: |
|
|
|
|
| Segment operating
profit (loss): |
|
|
|
|
|
| Production Chemical
Technologies |
$ |
94,560 |
|
|
$ |
87,163 |
|
|
$ |
86,649 |
|
| Production & Automation
Technologies |
|
28,299 |
|
|
|
33,208 |
|
|
|
22,485 |
|
| Drilling Technologies |
|
12,255 |
|
|
|
12,660 |
|
|
|
14,856 |
|
| Reservoir Chemical
Technologies |
|
2,461 |
|
|
|
2,186 |
|
|
|
(61,711 |
) |
|
Total segment operating profit |
|
137,575 |
|
|
|
135,217 |
|
|
|
62,279 |
|
| Corporate and other |
|
14,030 |
|
|
|
12,391 |
|
|
|
13,354 |
|
| Interest expense, net |
|
13,744 |
|
|
|
14,544 |
|
|
|
11,454 |
|
|
Income before income taxes |
$ |
109,801 |
|
|
$ |
108,282 |
|
|
$ |
37,471 |
|
| |
|
|
|
|
|
| Operating profit
margin / income before income taxes margin: |
|
|
|
|
|
| Production Chemical
Technologies |
|
15.6 |
% |
|
|
15.2 |
% |
|
|
13.5 |
% |
| Production & Automation
Technologies |
|
11.0 |
% |
|
|
13.1 |
% |
|
|
9.1 |
% |
| Drilling Technologies |
|
22.3 |
% |
|
|
22.1 |
% |
|
|
24.4 |
% |
| Reservoir Chemical
Technologies |
|
9.8 |
% |
|
|
9.2 |
% |
|
(173.9)% |
| ChampionX Consolidated |
|
11.7 |
% |
|
|
11.7 |
% |
|
|
3.7 |
% |
| |
|
|
|
|
|
| Adjusted
EBITDA |
|
|
|
|
|
| Production Chemical
Technologies |
$ |
125,095 |
|
|
$ |
116,790 |
|
|
$ |
102,848 |
|
| Production & Automation
Technologies |
|
59,322 |
|
|
|
60,711 |
|
|
|
52,101 |
|
| Drilling Technologies |
|
13,786 |
|
|
|
14,376 |
|
|
|
16,526 |
|
| Reservoir Chemical
Technologies |
|
4,157 |
|
|
|
4,213 |
|
|
|
2,635 |
|
| Corporate and other |
|
(12,816 |
) |
|
|
(9,848 |
) |
|
|
(7,994 |
) |
|
Adjusted EBITDA |
$ |
189,544 |
|
|
$ |
186,242 |
|
|
$ |
166,116 |
|
| |
|
|
|
|
|
| Adjusted EBITDA
margin |
|
|
|
|
|
| Production Chemical
Technologies |
|
20.7 |
% |
|
|
20.3 |
% |
|
|
16.0 |
% |
| Production & Automation
Technologies |
|
23.2 |
% |
|
|
23.9 |
% |
|
|
21.0 |
% |
| Drilling Technologies |
|
25.1 |
% |
|
|
25.1 |
% |
|
|
27.1 |
% |
| Reservoir Chemical
Technologies |
|
16.6 |
% |
|
|
17.7 |
% |
|
|
7.4 |
% |
| ChampionX Consolidated |
|
20.2 |
% |
|
|
20.1 |
% |
|
|
16.3 |
% |
CHAMPIONX CORPORATIONRECONCILIATIONS OF
GAAP TO NON-GAAP FINANCIAL
MEASURES(UNAUDITED)
| |
Three Months Ended |
| |
September 30, |
|
June 30, |
|
September 30, |
|
(in thousands) |
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
| Net income attributable
to ChampionX |
$ |
77,711 |
|
|
$ |
95,797 |
|
|
$ |
23,068 |
|
| Pre-tax adjustments: |
|
|
|
|
|
|
Loss (gain) on disposal group(1) |
|
— |
|
|
|
— |
|
|
|
(6,409 |
) |
|
Russia sanctions compliance and impacts(2) |
|
95 |
|
|
|
433 |
|
|
|
(1,620 |
) |
|
Restructuring and other related charges |
|
1,228 |
|
|
|
5,353 |
|
|
|
67,533 |
|
|
Merger integration costs |
|
— |
|
|
|
— |
|
|
|
652 |
|
|
Acquisition costs and related adjustments(3) |
|
— |
|
|
|
(2,341 |
) |
|
|
(3,512 |
) |
|
Intellectual property defense |
|
220 |
|
|
|
687 |
|
|
|
15 |
|
|
Merger-related indemnification responsibility |
|
722 |
|
|
|
— |
|
|
|
— |
|
|
Tulsa, Oklahoma storm damage |
|
1,895 |
|
|
|
607 |
|
|
|
— |
|
| Tax impact of adjustments |
|
(925 |
) |
|
|
(1,478 |
) |
|
|
(11,898 |
) |
| Adjusted net income
attributable to ChampionX |
|
80,946 |
|
|
|
99,058 |
|
|
|
67,829 |
|
| Tax impact of adjustments |
|
925 |
|
|
|
1,478 |
|
|
|
11,898 |
|
| Net income attributable to
noncontrolling interest |
|
3,081 |
|
|
|
829 |
|
|
|
157 |
|
| Depreciation and
amortization |
|
61,839 |
|
|
|
58,677 |
|
|
|
60,532 |
|
| Provision for income taxes |
|
29,009 |
|
|
|
11,656 |
|
|
|
14,246 |
|
| Interest expense, net |
|
13,744 |
|
|
|
14,544 |
|
|
|
11,454 |
|
| Adjusted
EBITDA |
$ |
189,544 |
|
|
$ |
186,242 |
|
|
$ |
166,116 |
|
_______________________
(1) Amounts represent the loss recorded to properly adjust the
carrying value of our Chemical Technologies operations in Russia to
the lower of carrying value or fair value less costs to sell. (2)
Includes charges incurred related to legal and professional fees to
comply with, as well as additional foreign currency exchange losses
associated with, the sanctions imposed in
Russia.(3) Includes revenue associated with the
amortization of a liability established as part of the merger
transaction with Ecolab Inc. to acquire the Chemical Technologies
business, representing unfavorable terms under the Cross Supply
Agreement, as well as costs incurred for the acquisition of
businesses.
| |
Three Months Ended |
| |
September 30, |
|
June 30, |
|
September 30, |
|
(in thousands) |
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
| Diluted earnings per
share attributable to ChampionX |
$ |
0.39 |
|
|
$ |
0.48 |
|
|
$ |
0.11 |
|
| Per share adjustments: |
|
|
|
|
|
|
Loss (gain) on disposal group |
|
— |
|
|
|
— |
|
|
|
(0.03 |
) |
|
Russia sanctions compliance and impacts |
|
— |
|
|
|
— |
|
|
|
(0.01 |
) |
|
Restructuring and other related charges |
|
0.01 |
|
|
|
0.03 |
|
|
|
0.34 |
|
|
Merger integration costs |
|
— |
|
|
|
— |
|
|
|
— |
|
|
Acquisition costs and related adjustments |
|
— |
|
|
|
(0.01 |
) |
|
|
(0.02 |
) |
|
Intellectual property defense |
|
— |
|
|
|
— |
|
|
|
— |
|
|
Merger-related indemnification responsibility |
|
0.01 |
|
|
|
— |
|
|
|
— |
|
|
Tulsa, Oklahoma storm damage |
|
0.01 |
|
|
|
— |
|
|
|
— |
|
| Tax impact of adjustments |
|
(0.01 |
) |
|
|
(0.01 |
) |
|
|
(0.06 |
) |
| Adjusted diluted earnings
per share attributable to ChampionX |
$ |
0.41 |
|
|
$ |
0.49 |
|
|
$ |
0.33 |
|
CHAMPIONX CORPORATIONRECONCILIATIONS OF
GAAP TO NON-GAAP FINANCIAL MEASURES BY
SEGMENT(UNAUDITED)
| |
Three Months Ended |
| |
September 30, |
|
June 30, |
|
September 30, |
|
(in thousands) |
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
| Production Chemical
Technologies |
|
|
|
|
|
|
Segment operating profit |
$ |
94,560 |
|
|
$ |
87,163 |
|
|
$ |
86,649 |
|
|
Non-GAAP adjustments |
|
1,073 |
|
|
|
3,944 |
|
|
|
(4,551 |
) |
|
Depreciation and amortization |
|
29,462 |
|
|
|
25,683 |
|
|
|
20,750 |
|
| Segment adjusted EBITDA |
$ |
125,095 |
|
|
$ |
116,790 |
|
|
$ |
102,848 |
|
| |
|
|
|
|
|
| Production &
Automation Technologies |
|
|
|
|
|
|
Segment operating profit |
$ |
28,299 |
|
|
$ |
33,208 |
|
|
$ |
22,485 |
|
|
Non-GAAP adjustments |
|
2,123 |
|
|
|
1,082 |
|
|
|
4,281 |
|
|
Depreciation and amortization |
|
28,900 |
|
|
|
26,421 |
|
|
|
25,335 |
|
| Segment adjusted EBITDA |
$ |
59,322 |
|
|
$ |
60,711 |
|
|
$ |
52,101 |
|
| |
|
|
|
|
|
| Drilling
Technologies |
|
|
|
|
|
|
Segment operating profit |
$ |
12,255 |
|
|
$ |
12,660 |
|
|
$ |
14,856 |
|
|
Non-GAAP adjustments |
|
(8 |
) |
|
|
212 |
|
|
|
15 |
|
|
Depreciation and amortization |
|
1,539 |
|
|
|
1,504 |
|
|
|
1,655 |
|
| Segment adjusted EBITDA |
$ |
13,786 |
|
|
$ |
14,376 |
|
|
$ |
16,526 |
|
| |
|
|
|
|
|
| Reservoir Chemical
Technologies |
|
|
|
|
|
|
Segment operating profit |
$ |
2,461 |
|
|
$ |
2,186 |
|
|
$ |
(61,711 |
) |
|
Non-GAAP adjustments |
|
31 |
|
|
|
428 |
|
|
|
60,756 |
|
|
Depreciation and amortization |
|
1,665 |
|
|
|
1,599 |
|
|
|
3,590 |
|
| Segment adjusted EBITDA |
$ |
4,157 |
|
|
$ |
4,213 |
|
|
$ |
2,635 |
|
| |
|
|
|
|
|
| Corporate and
other |
|
|
|
|
|
|
Segment operating profit |
$ |
(27,774 |
) |
|
$ |
(26,935 |
) |
|
$ |
(24,808 |
) |
|
Non-GAAP adjustments |
|
941 |
|
|
|
(927 |
) |
|
|
(3,842 |
) |
|
Depreciation and amortization |
|
273 |
|
|
|
3,470 |
|
|
|
9,202 |
|
|
Interest expense, net |
|
13,744 |
|
|
|
14,544 |
|
|
|
11,454 |
|
| Segment adjusted EBITDA |
$ |
(12,816 |
) |
|
$ |
(9,848 |
) |
|
$ |
(7,994 |
) |
Free Cash Flow
| |
Three Months Ended |
| |
September 30, |
|
June 30, |
|
September 30, |
|
(in thousands) |
|
2023 |
|
|
|
2023 |
|
|
|
2022 |
|
| Free Cash
Flow |
|
|
|
|
|
| Cash flows from operating
activities |
$ |
163,030 |
|
|
$ |
115,910 |
|
|
$ |
187,152 |
|
| Less: Capital expenditures,
net of proceeds from sale of fixed assets |
|
(48,469 |
) |
|
|
(27,143 |
) |
|
|
(19,719 |
) |
|
Free cash flow |
$ |
114,561 |
|
|
$ |
88,767 |
|
|
$ |
167,433 |
|
| |
|
|
|
|
|
| Cash From Operating
Activities to Revenue Ratio |
|
|
|
|
|
| Cash flows from operating
activities |
$ |
163,030 |
|
|
$ |
115,910 |
|
|
$ |
187,152 |
|
| Revenue |
$ |
939,783 |
|
|
$ |
926,600 |
|
|
$ |
1,021,561 |
|
| |
|
|
|
|
|
| Cash from operating activities
to revenue ratio |
|
17 |
% |
|
|
13 |
% |
|
|
18 |
% |
| |
|
|
|
|
|
| Free Cash Flow to
Revenue Ratio |
|
|
|
|
|
| Free cash flow |
$ |
114,561 |
|
|
$ |
88,767 |
|
|
$ |
167,433 |
|
| Revenue |
$ |
939,783 |
|
|
$ |
926,600 |
|
|
$ |
1,021,561 |
|
| |
|
|
|
|
|
| Free cash flow to revenue
ratio |
|
12 |
% |
|
|
10 |
% |
|
|
16 |
% |
| |
|
|
|
|
|
| Free Cash Flow to
Adjusted EBITDA Ratio |
|
|
|
|
|
| Free cash flow |
$ |
114,561 |
|
|
$ |
88,767 |
|
|
$ |
167,433 |
|
| Adjusted EBITDA |
$ |
189,544 |
|
|
$ |
186,242 |
|
|
$ |
166,116 |
|
| |
|
|
|
|
|
| Free cash flow to adjusted
EBITDA ratio |
|
60 |
% |
|
|
48 |
% |
|
|
101 |
% |
ChampionX (NASDAQ:CHX)
Historical Stock Chart
From Apr 2024 to May 2024
ChampionX (NASDAQ:CHX)
Historical Stock Chart
From May 2023 to May 2024
