AMSTERDAM, Jan. 31, 2018
/PRNewswire/ -- Core Laboratories N.V. (NYSE: "CLB US" and
Euronext Amsterdam: "CLB NA") ("Core", "Core Lab", or the
"Company") reported fourth quarter 2017 revenue of $171,900,000, up 15% year-over-year and 3%
sequentially from its third quarter 2017 revenue, with operating
income of $32,400,000, up 18% from
third quarter 2017 levels, and earnings per diluted share ("EPS")
of $0.49, all in accordance with U.S.
generally accepted accounting principles ("GAAP"). EPS, ex-items, a
non-GAAP financial measure, increased 42% year-over-year and 21% to
$0.58 on a sequential quarterly
basis. Reconciliations of non-GAAP financial measures are included
in the attached financial tables.
Operating margins for the Company increased 400 basis points
("BPS") year-over-year and sequentially 200 BPS to 19%, ex-items,
with Company-wide sequential incremental margins of more than 90%
and year-over-year 2017 of almost 50%. The improving margins were a
result of higher-technology services and products being requested
by Core's technologically sophisticated client base and improved
utilization of our facilities.
Core generated $41,400,000 in free
cash flow ("FCF"), a non-GAAP financial measure defined as cash
from operations less capital expenditures. This FCF exceeded
the amount paid for the Company's quarterly dividend and stock
repurchases and allowed Core to also reduce its long-term
debt. Core converted over 24
cents of every revenue dollar in the fourth quarter of 2017
into FCF, the highest reported by all major oil field service
companies.
In the fourth quarter 2017, Core's effective tax rate was 27%
which reflected (1) the customary impact of income taxes on
operational earnings and (2) the impact of the changes to the U.S.
statutory tax rules on corporate earnings caused by the U.S. Tax
Cuts and Jobs Act. The effective tax rate in the quarter was above
our guided tax rate of 15% primarily due to a revaluation of the
carrying value of the net deferred tax asset position in the United
States. The Company views the reduction in the U.S. corporate
income tax rate to be a long-term positive development for the
increased after-tax profitability of Core.
Core's Board of Supervisory Directors ("Board") and the
Company's Executive Management will continue to focus on strategies
that maximize the return on invested capital ("ROIC") and FCF,
while exercising capital discipline, all of which hold high
correlation with total shareholder return, rewarding all
shareholders. Core's asset-lite business model promotes asset
efficiency designed to produce predictable, superior long-term, and
sustainable ROIC. Bloomberg's calculations using the latest
comparable data available indicates that Core's ROIC is the highest
of comparably-sized companies in oilfield services. Core also
had the highest ratio of ROIC-to-Weighted Average Cost of Capital
("WACC") for all major oilfield service companies. Even
though 2017 was another challenging year for oilfield service
companies, Core's total shareholder return outperformed 12 of the
other 14 oilfield service stocks in the Philadelphia Oil Service
Sector Index.
Segment Highlights
In the first quarter of 2017, Core Laboratories realigned its
operations and began reporting results under two segments:
Reservoir Description and Production Enhancement. All quarterly
financial comparisons in this Segment Highlights section are made
relative to previously reported ex-items results.
Reservoir Description
Reservoir Description operations, primarily focused on projects
funded by operating budgets from internationally-based fields,
offshore provinces and from the development of U.S. tight-oil
(shale) reservoirs, posted revenue of $104,600,000 in the fourth quarter of 2017.
Operating income on a GAAP basis was $17,300,000. Ex-items, operating income was
$17,500,000, yielding operating
margins of 17%. On a GAAP basis, revenue, operating income
and operating margins all increased sequentially, by 3%, 18% and
200 BPS, respectively.
The number of pressure-volume-temperature ("PVT") related
projects has been increasing for the last several years, and
reservoir fluid analyses now contribute approximately 60% of
Reservoir Description revenue. PVT data sets are used to determine
estimated ultimate recoveries ("EURs") of hydrocarbons and predict
reservoir performance over time. Measured fluid properties include
bubble point pressures, compositional make-up of the crude oil and
natural gases, formation volume factors, viscosity, and natural
gas-to-crude oil ratios. Core's clients use this data to optimize
production streams, predict reservoir performance and maximize
returns on their invested capital.
During the fourth quarter 2017, Core continued its involvement
in large, petrophysical, geologic and fluid studies on conventional
core and reservoir fluids acquired from offshore South America. These projects are utilizing
Core's newest proprietary well-site petrophysical measurement
technologies, which provide clients with early-time data, prior to
the core leaving the field site and in advance of laboratory-based
reservoir-condition testing. These wellsite measurements are
enabling Core's clients to assess core recovery and core quality
while on the rig floor. Core's data sets are also being used
to calibrate down-hole logging data in order to accurately assess
both the hydrocarbon storage capacity and reservoir incremental and
ultimate recovery.
Core continues to expand its presence in the Middle East region to support client demand
for reservoir rock and fluid laboratory services. Core
remains a key partner in helping clients by providing critical data
sets on their reservoir rocks and fluids to evaluate opportunities
in both developing and mature fields. During the fourth
quarter of 2017, multiple Middle
East clients employed Core on several long-term projects
conducting comprehensive studies involving the integration of data
from laboratory and geological analyses to assess reserve potential
and benchmark reservoir performance. Consequently, Core is
expanding its lab network with a new facility in Qatar. This laboratory will now provide a
range of technologies, including Core's proprietary full
visualization high-pressure, high-temperature PVT cell
instrumentation. These highly automated systems are specially
designed to measure the phase behavior of reservoir fluids
containing the high concentrations of H2S and
CO2 gases commonly found in the region. The analytical
work on these challenging reservoirs will help Core's national oil
company and international oil company clients in their appraisal,
production and enhanced recovery efforts.
Production Enhancement
Production Enhancement operations, largely focused on complex
completions in unconventional tight-oil reservoirs and offshore
developments, posted fourth quarter 2017 revenue which increased
51% year-over-year and 4% sequentially to $67,300,000. Operating income, on a GAAP basis,
was $15,300,000, up 494%
year-over-year and 18% sequentially. Operating income, ex-items,
was $15,400,000, up 480%
year-over-year and 21% sequentially, while operating margins
expanded almost 1700 BPS year-over-year and sequentially by 300 BPS
to 23%. While U.S. fourth quarter completions activity
increased year-over-year by 49% according to the U.S. Energy
Information Administration, Production Enhancement U.S. land
revenue increased more than 70% year-over-year and product sales
increased more than 60%.
Core's clients continue to seek new and higher technology
solutions for increasing daily production and EURs which are
driving Production Enhancement segment operating and incremental
operating margins higher. Incremental operating margins
sequentially were 95%, which are in excess of the previously
discussed 60% incrementals expected during the early recovery phase
of this business cycle.
The continued revenue growth for Production Enhancement was
bolstered by increased demand for Core's recently introduced
HERO®PerFRAC perforating charge and gun systems.
Client acceptance of HEROPerFRAC technology is among the highest of
all new product lines introduced by Core over the past five-plus
years. The rapid market acceptance is evidence of the
Company's technological advantage in shale plays where the
HEROPerFRAC technology has been used in the completion
design. By eliminating uncertainty created by perforation
entry hole-size heterogeneity, clients gain operational
efficiencies by reducing the amount of surface horsepower required
to break down the formation, more effective proppant placement
during fracture operations, and increased hydrocarbon flow across
all stimulated zones. Client acceptance of Core's
HEROPerFRAC technology even during the most recent downturn is
confirmation that if a company develops value-added services which
increase incremental recovery rates and EURs, clients are more than
willing to evaluate and ultimately use that new technology.
Core's clients also are using SpectraStimTM,
SpectraScanTM, and FLOWPROFILERTM completion
diagnostics to optimize vertical and horizontal spacing between
primary and secondary wells thus identifying fracture
communication, increasing cluster efficiency and eliminating the
need for diverters. This results in lower well costs
while yielding significant improvement to the reservoir EURs.
Core's PACKSCAN® technology was recently used in an
offshore international development during the quarter to assess the
effectiveness of an open-hole horizontal gravel pack. To better
assess the quality of the gravel pack, Core's engineering team
developed a gravel pack density metric that enables operators to
distinguish between minor pack anomalies, but, more importantly,
recognize substantial anomalies, such as pack voids that could
require immediate remediation before bringing the well onto
production.
Core's engineers developed a statistically-based approach to
apply to the new PACKSCAN density metric data that enables
interpretive distinctions between the various pack quality
classifications. Clients can now ramp-up production more
aggressively in wells in which PACKSCAN indicates minor to no
anomalies in the packs.
Free Cash Flow and Dividends
During the fourth quarter of 2017, Core continued to generate
free cash flow, with cash from operations of $45,900,000 and capital expenditures of
$4,500,000, yielding $41,400,000 of FCF. This free cash was returned
to Core's shareholders via the Company's regular quarterly dividend
and share repurchases, with the remainder being used to reduce
long-term debt. The average share price for the 80,737
Core Lab shares repurchased during the quarter was $107.90.
On 10 October 2017, the Board
announced a quarterly cash dividend of $0.55 per share of common stock, which was paid
on 21 November 2017 to shareholders
of record on 20 October 2017. Dutch
withholding tax was deducted from the dividend at a rate of
15%.
On 16 January 2018, the Board
announced a quarterly cash dividend of $0.55 per share of common stock, payable in the
first quarter of 2018. The quarterly cash dividend will be payable
16 February 2018 to shareholders of
record on 26 January 2018. Dutch
withholding tax will be deducted from the dividend at a rate of
15%.
Return On Invested Capital
As reported in previous quarters, the Company's Board has
established an internal performance metric of achieving a leading
relative ROIC performance compared with the oilfield service
companies listed as Core's Comp Group by Bloomberg Financial. The
Company and its Board believe that ROIC is a leading long-term
performance metric used by shareholders to determine the relative
investment value of publicly traded companies. Further, the Company
and its Board believe that shareholders will benefit if Core
consistently performs at high levels of ROIC 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, Oceaneering,
National Oilwell Varco, RPC, TGS, and the Wood Group, among
others. Only Core Lab and three of the other fourteen
companies listed in the Comp Group posted ROIC that exceeded their
WACC. Core's ratio of ROIC to WACC is the highest of any company in
the Comp Group.
Initiating First Quarter 2018 Revenue and EPS
Guidance
The Company believes first quarter 2018 international E&P
activity levels will be flat from the preceding fourth quarter
levels with most ongoing international development projects to be
funded largely from the operating budgets. Core Lab expects the
average first quarter 2018 U.S. rig count to be similar to fourth
quarter of 2017 levels with completion activity levels to continue
at the current improving pace. Therefore, Core Lab does not see a
change in its typical seasonal pattern of Q1 revenue and earnings
being sequentially flat-to-slightly lower than the preceding Q4
level, as has been the case in five out of the last seven years,
and similar to Q1 guidance recently provided by other major
international oilfield service companies.
As a result of this typical seasonal pattern, Core projects
first quarter 2018 revenue of approximately $168,000,000 to $172,000,000 and operating income of
approximately $32,000,000 to
$32,700,000, yielding operating
margins of approximately 19%. EPS for the first quarter 2018
is expected to be approximately $0.56
to $0.58. This first quarter midpoint
guidance by the Company represents a year-over-year improvement in
revenue by 8%, operating income by 33% and EPS by 36%. This
initial first quarter 2018 guidance by Core Lab excludes gains or
losses in foreign exchange and assumes an effective tax rate of
15%.
First quarter 2018 FCF is expected to exceed net income and Core
expects that it will continue to return all excess capital to its
shareholders during the quarter via dividends and continuing share
repurchases.
Several consecutive years of significant international
under-investment will lead to steepening legacy declines in
non-North American, non-Middle
East and non-Former Soviet Union crude oil production
levels. Therefore, Core has an optimistic view for 2018's
industry activity and Core's financial performance for the
following reasons: crude oil industry fundamentals continue to
improve with falling global crude oil inventories; a tightening in
the number of days of consumption held in global crude oil
inventory to meet demand; and the impact these fundamentals may
have on increasing the price of crude oil.
Core is also encouraged by the increased focus its major clients
have regarding capital management, ROIC, FCF and returning capital
back to their shareholders, as opposed to just production growth at
any cost. The companies adopting these metrics tend to be the
more technologically sophisticated operators and form the
foundation of Core's worldwide client base. International and
offshore markets are in the early stages of recovery, which will
benefit Core's leverage to both markets, especially in the
second-half of 2018.
Additionally, as part of the industry's recovery, there have
been positive actions taken by oil companies to reinvest in
developed and new crude oil projects. The reinvestment at a
global level is critical in order to meet future supply
needs. The oil companies' ability to reinvest is due to their
successful efforts in increasing their EURs along with reducing
capital project costs to align with today's crude oil price per
barrel. This is enabling clients to make final investment
decisions ("FIDs") on new projects and/or revamp previously
announced projects. Recent project announcements include
Exxon's Liza field offshore Guyana, Shell's Appomattox field and LLOG's
Buckskin development in deepwater Gulf of
Mexico and Chevron's Tengiz field in Kazakhstan, among others.
Succession Planning Announcements
Bergmark to Retire at End of 2018
Richard Bergmark, Core Lab's
Executive Vice President and Chief Financial Officer, notified the
Company that after 30 years of service, he intends to retire at the
end of 2018 which is the year he will reach 65 years of age.
Additionally, he will not seek re-nomination to the Company's
Supervisory Board of Directors when his current three-year term
expires at Core Lab's annual shareholders meeting to be held on
May 24, 2018. Mr. Demshur and
Mr. Bergmark were part of the management-led buyout of Core
Laboratories in 1994 and the Company's IPO in 1995 and are the
longest standing CEO/CFO Team in the energy space. Since the
IPO, Core Lab's total shareholder return has outperformed every
member of the OSX. The driver for the outsized performance
has been their strategic and strict adherence to the Company's
three financial tenets and three growth strategies since Core Lab
became a public company.
Larry Bruno Named President
Effective February 1, 2018, the
role of the Company's President, currently held by Chairman, Chief
Executive Officer and President, David
Demshur, will be separated from Mr. Demshur's other roles
and filled by Lawrence Bruno,
currently Vice President, Reservoir Description. Mr. Demshur
will remain as the Company's Chairman and Chief Executive
Officer. Mr. Bruno is an innovative technologist with a
Master's degree in geology, has been in the industry for more than
30 years, and has been with Core Lab for 20 years. In
addition to his duties leading the Company's global reservoir-based
laboratories, for the past 10 years, Mr. Bruno has been a technical
spokesperson for the Company by leading technical presentations and
panels for industry and shareholder conferences.
Chris Hill Named to Succeed Bergmark as Chief Financial
Officer in May 2018
Effective May 24, 2018, when Mr.
Bergmark's term as a Supervisory Director of Core Lab comes to an
end, Mr. Hill will assume the role of Senior Vice President, Chief
Financial Officer and will report to Mr. Bruno, the Company's
President. Mr. Hill has been with the Company for 12 years,
most recently as Vice President, Chief Accounting Officer.
Prior to his current position, Mr. Hill had been leading the
Company's Investor Relations effort, was Corporate Group Controller
based in Amsterdam, and had been
Controller of Financial Reporting. Mr. Hill is a CPA and is
on schedule to receive his Executive MBA degree from Rice University in May
2018.
Gwen Schreffler to Report to
Mr. Bruno Effective May 2018
Also effective May 24, 2018, when
Mr. Bergmark's term as a Supervisory Director of Core Lab comes to
an end, Ms. Schreffler, the Company's Senior Vice President,
Corporate Development and Investor Relations will report to Mr.
Bruno, the Company's President. Ms. Schreffler has been with
the Company for 12 years, most recently for the last two years as
Vice President, Corporate Development and Investor Relations.
Prior to her current position, Ms. Schreffler was Vice President,
Human Resources based in Amsterdam, and before that had been Director
of U.S. Human Resources. She has a BS degree in
Organizational Behavior as well as an MBA.
Earnings Call Scheduled
The Company has scheduled a conference call to discuss Core's
fourth quarter 2017 earnings announcement. The call will begin at
7:30 a.m. CST / 2:30 p.m. CET on Thursday, 1 February 2018. 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 used to optimize petroleum reservoir
performance. The Company has over 70 offices in more than 50
countries and is located in every major oil-producing province in
the world. This release includes forward-looking statements
regarding the future revenue, profitability, business strategies
and developments of the Company made in reliance upon the safe
harbor provisions of Federal securities law. The Company's outlook
is subject to various important cautionary factors, including risks
and uncertainties related to the oil and natural gas industry,
business conditions, international markets, international political
climates and other factors as more fully described in the Company's
2016 Form 10-K filed on 10 February
2017 and in other securities filings. These important
factors could cause the Company's actual results to differ
materially from those described in these forward-looking
statements. Such statements are based on current expectations of
the Company's performance and are subject to a variety of factors,
some of which are not under the control of the Company. Because the
information herein is based solely on data currently available, and
because it is subject to change as a result of changes in
conditions over which the Company has no control or influence, such
forward-looking statements should not be viewed as assurance
regarding the Company's future performance. The Company undertakes
no obligation to publicly update any forward looking statement to
reflect events or circumstances that may arise after the date of
this press release, except as required by law.
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
|
|
|
31 Dec
2017
|
|
30 Sep
2017
|
|
31 Dec
2016
|
|
vs
Q3-17
|
|
vs
Q4-16
|
REVENUE
|
$
|
171,852
|
|
|
$
|
166,247
|
|
|
$
|
149,542
|
|
|
3.4%
|
|
14.9%
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
Costs of services and
sales
|
121,660
|
|
|
120,890
|
|
|
112,678
|
|
|
0.6%
|
|
8.0%
|
|
General and
administrative expenses
|
11,994
|
|
|
11,887
|
|
|
8,795
|
|
|
0.9%
|
|
36.4%
|
|
Depreciation and
amortization
|
6,120
|
|
|
6,091
|
|
|
6,550
|
|
|
0.5%
|
|
(6.6)%
|
|
Other (income)
expense, net
|
(300)
|
|
|
(97)
|
|
|
(5)
|
|
|
NM
|
|
NM
|
|
Total operating
expenses
|
139,474
|
|
|
138,771
|
|
|
128,018
|
|
|
0.5%
|
|
8.9%
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
32,378
|
|
|
27,476
|
|
|
21,524
|
|
|
17.8%
|
|
50.4%
|
Interest
expense
|
2,717
|
|
|
2,707
|
|
|
2,548
|
|
|
0.4%
|
|
6.6%
|
Income before income
tax expense
|
29,661
|
|
|
24,769
|
|
|
18,976
|
|
|
19.8%
|
|
56.3%
|
Income tax
expense
|
8,009
|
|
|
3,716
|
|
|
3,607
|
|
|
115.5%
|
|
122.0%
|
Net income
|
21,652
|
|
|
21,053
|
|
|
15,369
|
|
|
2.8%
|
|
40.9%
|
Net income
attributable to non-controlling interest
|
(39)
|
|
|
(33)
|
|
|
(90)
|
|
|
NM
|
|
NM
|
Net income
attributable to Core Laboratories N.V.
|
$
|
21,691
|
|
|
$
|
21,086
|
|
|
$
|
15,459
|
|
|
2.9%
|
|
40.3%
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings
Per Share:
|
$
|
0.49
|
|
|
$
|
0.48
|
|
|
$
|
0.35
|
|
|
2.1%
|
|
40.0%
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Avg Diluted
Common Shares Outstanding
|
44,276
|
|
|
44,332
|
|
|
44,326
|
|
|
(0.1)%
|
|
(0.1)%
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax
Rate
|
27
|
%
|
|
15
|
%
|
|
19
|
%
|
|
80.0%
|
|
42.1%
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT
INFORMATION:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
Reservoir
Description
|
$
|
104,570
|
|
|
$
|
101,442
|
|
|
$
|
105,076
|
|
|
3.1%
|
|
(0.5)%
|
Production
Enhancement
|
67,282
|
|
|
64,805
|
|
|
44,466
|
|
|
3.8%
|
|
51.3%
|
|
Total
|
$
|
171,852
|
|
|
$
|
166,247
|
|
|
$
|
149,542
|
|
|
3.4%
|
|
14.9%
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income:
|
|
|
|
|
|
|
|
|
|
Reservoir
Description
|
$
|
17,269
|
|
|
$
|
14,621
|
|
|
$
|
18,872
|
|
|
18.1%
|
|
(8.5)%
|
Production
Enhancement
|
15,329
|
|
|
12,972
|
|
|
2,583
|
|
|
18.2%
|
|
493.5%
|
Corporate and
other
|
(220)
|
|
|
(117)
|
|
|
69
|
|
|
NM
|
|
NM
|
|
Total
|
$
|
32,378
|
|
|
$
|
27,476
|
|
|
$
|
21,524
|
|
|
17.8%
|
|
50.4%
|
|
|
|
|
|
|
|
|
|
|
|
CORE LABORATORIES
N.V. & SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
(amounts in
thousands, except per share data)
|
(Unaudited)
|
|
|
|
Twelve Months
ended
|
|
%
Variance
|
|
|
31 Dec
2017
|
|
31 Dec
2016
|
|
vs
2016
|
|
|
|
|
|
|
|
REVENUE
|
$
|
659,809
|
|
|
$
|
594,741
|
|
|
10.9%
|
|
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
|
|
|
Costs of services and
sales
|
474,240
|
|
|
442,644
|
|
|
7.1%
|
|
General and
administrative expenses
|
47,737
|
|
|
39,390
|
|
|
21.2%
|
|
Depreciation and
amortization
|
24,940
|
|
|
26,872
|
|
|
(7.2)%
|
|
Other (income)
expense, net
|
452
|
|
|
(344)
|
|
|
NM
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
112,440
|
|
|
86,179
|
|
|
30.5%
|
Interest
expense
|
10,734
|
|
|
11,572
|
|
|
(7.2)%
|
|
|
|
|
|
|
|
INCOME BEFORE INCOME
TAX EXPENSE
|
101,706
|
|
|
74,607
|
|
|
36.3%
|
INCOME TAX
EXPENSE
|
18,610
|
|
|
10,748
|
|
|
73.1%
|
NET INCOME
|
83,096
|
|
|
63,859
|
|
|
30.1%
|
NET INCOME
ATTRIBUTABLE TO
NON-CONTROLLING
INTEREST
|
(29)
|
|
|
(36)
|
|
|
NM
|
NET INCOME
ATTRIBUTABLE TO
CORE LABORATORIES
N.V.
|
$
|
83,125
|
|
|
$
|
63,895
|
|
|
30.1%
|
|
|
|
|
|
|
|
Diluted Earnings
Per Share:
|
$
|
1.88
|
|
|
$
|
1.46
|
|
|
28.8%
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE
DILUTED COMMON SHARES OUTSTANDING
|
44,264
|
|
|
43,670
|
|
|
1.4%
|
|
|
|
|
|
|
|
Effective Tax
Rate
|
18
|
%
|
|
14
|
%
|
|
28.6%
|
|
|
|
|
|
|
|
SEGMENT
INFORMATION:
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
Reservoir
Description
|
$
|
415,220
|
|
|
$
|
426,205
|
|
|
(2.6)%
|
Production
Enhancement
|
244,589
|
|
|
168,536
|
|
|
45.1%
|
|
Total
|
$
|
659,809
|
|
|
$
|
594,741
|
|
|
10.9%
|
|
|
|
|
|
|
|
Operating
income:
|
|
|
|
|
|
Reservoir
Description
|
$
|
66,500
|
|
|
$
|
78,881
|
|
|
(15.7)%
|
Production
Enhancement
|
46,459
|
|
|
7,198
|
|
|
545.4%
|
Corporate and
other
|
(519)
|
|
|
100
|
|
|
NM
|
|
Total
|
$
|
112,440
|
|
|
$
|
86,179
|
|
|
30.5%
|
CORE LABORATORIES
N.V. & SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEET
|
(amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
%
Variance
|
ASSETS:
|
31 Dec
2017
|
|
30 Sep
2017
|
|
31 Dec
2016
|
|
vs
Q3-17
|
|
vs
Q4-16
|
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash
Equivalents
|
$
|
14,400
|
|
|
$
|
13,780
|
|
|
$
|
14,764
|
|
|
4.5%
|
|
(2.5)%
|
Accounts Receivable,
net
|
133,097
|
|
|
129,656
|
|
|
114,329
|
|
|
2.7%
|
|
16.4%
|
Inventory
|
33,317
|
|
|
34,499
|
|
|
33,720
|
|
|
(3.4)%
|
|
(1.2)%
|
Other Current
Assets
|
26,613
|
|
|
25,194
|
|
|
23,648
|
|
|
5.6%
|
|
12.5%
|
|
Total Current
Assets
|
207,427
|
|
|
203,129
|
|
|
186,461
|
|
|
2.1%
|
|
11.2%
|
|
|
|
|
|
|
|
|
|
|
|
Property, Plant and
Equipment, net
|
123,098
|
|
|
124,120
|
|
|
129,882
|
|
|
(0.8)%
|
|
(5.2)%
|
Intangibles, Goodwill
and Other Long Term Assets, net
|
254,287
|
|
|
255,495
|
|
|
256,709
|
|
|
(0.5)%
|
|
(0.9)%
|
|
Total
Assets
|
$
|
584,812
|
|
|
$
|
582,744
|
|
|
$
|
573,052
|
|
|
0.4%
|
|
2.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
Payable
|
$
|
41,697
|
|
|
$
|
34,904
|
|
|
$
|
33,720
|
|
|
19.5%
|
|
23.7%
|
Other Current
Liabilities
|
63,321
|
|
|
58,234
|
|
|
70,303
|
|
|
8.7%
|
|
(9.9)%
|
|
Total Current
Liabilities
|
105,018
|
|
|
93,138
|
|
|
104,023
|
|
|
12.8%
|
|
1.0%
|
|
|
|
|
|
|
|
|
|
|
|
Long-Term Debt &
Lease Obligations
|
226,989
|
|
|
233,864
|
|
|
216,488
|
|
|
(2.9)%
|
|
4.9%
|
Other Long-Term
Liabilities
|
104,073
|
|
|
102,445
|
|
|
97,244
|
|
|
1.6%
|
|
7.0%
|
|
|
|
|
|
|
|
|
|
|
Total
Equity
|
148,732
|
|
|
153,297
|
|
|
155,297
|
|
|
NM
|
|
NM
|
|
Total Liabilities and
Equity
|
$
|
584,812
|
|
|
$
|
582,744
|
|
|
$
|
573,052
|
|
|
0.4%
|
|
2.1%
|
CORE LABORATORIES
N.V. & SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOW
|
(amounts in
thousands)
|
(Unaudited)
|
|
|
|
|
Three Months
Ended
|
|
|
|
31 Dec
2017
|
|
30 Sep
2017
|
|
31 Dec
2016
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
|
|
Net Income
|
$
|
21,652
|
|
|
$
|
21,053
|
|
|
$
|
15,369
|
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
Stock-based
compensation
|
5,619
|
|
|
5,760
|
|
|
5,317
|
|
|
Depreciation and
amortization
|
6,120
|
|
|
6,091
|
|
|
6,550
|
|
|
Accounts
Receivable
|
(3,077)
|
|
|
(961)
|
|
|
(6,026)
|
|
|
Inventory
|
1,242
|
|
|
1,130
|
|
|
3,224
|
|
|
Accounts
Payable
|
6,414
|
|
|
(6,136)
|
|
|
1,987
|
|
|
Other adjustments to
net income
|
7,947
|
|
|
2,942
|
|
|
(3,218)
|
|
|
|
Net cash provided
by operating activities
|
$
|
45,917
|
|
|
$
|
29,879
|
|
|
$
|
23,203
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
|
|
Capital
expenditures
|
$
|
(4,511)
|
|
|
$
|
(4,902)
|
|
|
$
|
(3,616)
|
|
|
Other investing
activities
|
(792)
|
|
|
(435)
|
|
|
(608)
|
|
|
|
Net cash used in
investing activities
|
$
|
(5,303)
|
|
|
$
|
(5,337)
|
|
|
$
|
(4,224)
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
|
Repayment of debt
borrowings
|
$
|
(41,000)
|
|
|
$
|
(22,000)
|
|
|
$
|
(26,018)
|
|
|
Proceeds from debt
borrowings
|
34,000
|
|
|
22,000
|
|
|
36,000
|
|
|
Dividends
paid
|
(24,282)
|
|
|
(24,271)
|
|
|
(24,262)
|
|
|
Repurchase of
treasury shares
|
(8,712)
|
|
|
(809)
|
|
|
(5,004)
|
|
|
Other financing
activities
|
—
|
|
|
—
|
|
|
(2,150)
|
|
|
|
Net cash used in
financing activities
|
$
|
(39,994)
|
|
|
$
|
(25,080)
|
|
|
$
|
(21,434)
|
|
|
|
|
|
|
|
|
|
NET CHANGE IN CASH
AND CASH EQUIVALENTS
|
620
|
|
|
(538)
|
|
|
(2,455)
|
|
CASH AND CASH
EQUIVALENTS, beginning of period
|
13,780
|
|
|
14,318
|
|
|
17,219
|
|
CASH AND CASH
EQUIVALENTS, end of period
|
$
|
14,400
|
|
|
$
|
13,780
|
|
|
$
|
14,764
|
|
CORE LABORATORIES
N.V. & SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOW
|
(amounts in
thousands)
|
(Unaudited)
|
|
|
|
|
Twelve Months
ended
|
|
|
|
31 Dec
2017
|
|
31 Dec
2016
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
Net Income
|
$
|
83,096
|
|
|
$
|
63,859
|
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Stock-based
compensation
|
22,942
|
|
|
22,079
|
|
|
Depreciation and
amortization
|
24,940
|
|
|
26,872
|
|
|
Accounts
Receivable
|
(18,565)
|
|
|
31,584
|
|
|
Inventory
|
446
|
|
|
6,219
|
|
|
Accounts
Payable
|
8,721
|
|
|
(1,036)
|
|
|
Other adjustments to
net income
|
2,691
|
|
|
(17,690)
|
|
|
|
Net cash provided
by operating activities
|
$
|
124,271
|
|
|
$
|
131,887
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
Capital
expenditures
|
$
|
(18,775)
|
|
|
$
|
(11,356)
|
|
|
Other investing
activities
|
(1,782)
|
|
|
(3,365)
|
|
|
|
Net cash used in
investing activities
|
$
|
(20,557)
|
|
|
$
|
(14,721)
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
Repayment of debt
borrowings
|
$
|
(130,000)
|
|
|
$
|
(316,244)
|
|
|
Proceeds from debt
borrowings
|
140,000
|
|
|
99,000
|
|
|
Dividends
paid
|
(97,143)
|
|
|
(95,145)
|
|
|
Issuance of common
shares
|
—
|
|
|
197,202
|
|
|
Repurchase of
treasury shares
|
(16,909)
|
|
|
(7,161)
|
|
|
Other financing
activities
|
(26)
|
|
|
(2,548)
|
|
|
|
Net cash used in
financing activities
|
$
|
(104,078)
|
|
|
$
|
(124,896)
|
|
|
|
|
|
|
|
NET CHANGE IN CASH
AND CASH EQUIVALENTS
|
(364)
|
|
|
(7,730)
|
|
CASH AND CASH
EQUIVALENTS, beginning of period
|
14,764
|
|
|
22,494
|
|
CASH AND CASH
EQUIVALENTS, end of period
|
$
|
14,400
|
|
|
$
|
14,764
|
|
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 used 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 fillings with the Securities and Exchange Commission.
Reconciliation of
Net Income, Operating Income and Earnings Per Diluted
Share
|
(amounts in
thousands, except per share data)
|
(Unaudited)
|
|
|
Operating
Income
|
|
|
Three Months
Ended
|
|
|
31 December
2017
|
|
30 September
2017
|
|
31 December
2016
|
|
GAAP
reported
|
$
|
32,378
|
|
|
$
|
27,476
|
|
|
$
|
21,524
|
|
|
Foreign exchange
losses
|
357
|
|
|
105
|
|
|
400
|
|
|
Excluding specific
items
|
$
|
32,735
|
|
|
$
|
27,581
|
|
|
$
|
21,924
|
|
|
|
|
|
|
Net Income
attributable to Core Laboratories N.V.
|
|
|
Three Months
Ended
|
|
|
31 December
2017
|
|
30 September
2017
|
|
31 December
2016
|
|
GAAP
reported
|
$
|
21,691
|
|
|
$
|
21,086
|
|
|
$
|
15,459
|
|
|
Foreign exchange
losses
|
260
|
|
|
89
|
|
|
325
|
|
|
Impact of higher tax
rate 1
|
3,602
|
|
|
—
|
|
|
2,518
|
|
|
Excluding specific
items
|
$
|
25,553
|
|
|
$
|
21,175
|
|
|
$
|
18,302
|
|
|
|
|
|
|
|
|
|
(1) 2017 Quarter
tax rate of 27%; guidance given at 15%
2016 Quarter tax rate of
19%; guidance given at 6%
|
|
|
|
|
|
Earnings Per
Diluted Share
|
|
|
Three Months
Ended
|
|
|
31 December
2017
|
|
30 September
2017
|
|
31 December
2016
|
|
GAAP
reported
|
$
|
0.49
|
|
|
$
|
0.48
|
|
|
$
|
0.35
|
|
|
Foreign exchange
losses
|
0.01
|
|
|
—
|
|
|
0.01
|
|
|
Impact of higher tax
rate 1
|
0.08
|
|
|
—
|
|
|
0.05
|
|
|
Excluding specific
items
|
$
|
0.58
|
|
|
$
|
0.48
|
|
|
$
|
0.41
|
|
|
|
|
|
|
|
|
|
(1) 2017 Quarter tax
rate of 27%; guidance given at 15%
2016 Quarter tax rate of
19%; guidance given at 6%
|
|
Segment
Information
|
(amounts in
thousands)
|
(Unaudited)
|
|
|
Three Months Ended
31 December 2017
|
|
|
Reservoir
Description
|
|
Production
Enhancement
|
|
Corporate
and Other
|
|
Operating
income
|
$
|
17,269
|
|
|
$
|
15,329
|
|
|
$
|
(220)
|
|
|
Foreign exchange
losses
|
184
|
|
|
76
|
|
|
97
|
|
|
Operating income
excluding specific items
|
$
|
17,453
|
|
|
$
|
15,405
|
|
|
$
|
(123)
|
|
|
|
|
|
|
|
|
|
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
Ended
|
|
Twelve Months
ended
|
|
|
31 Dec
2017
|
|
31 Dec
2017
|
Net cash provided by
operating activities
|
|
$
|
45,917
|
|
|
$
|
124,271
|
|
Capital
expenditures
|
|
(4,511)
|
|
|
(18,775)
|
|
Free cash
flow
|
|
$
|
41,406
|
|
|
$
|
105,496
|
|
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SOURCE Core Laboratories N.V.