AMSTERDAM, Feb. 2, 2022
/PRNewswire/ -- Core Laboratories N.V. (NYSE: "CLB US" and
Euronext Amsterdam: "CLB NA") ("Core", "Core Lab", or the
"Company") reported fourth quarter 2021 revenue of $125,100,000. Core's operating income was
$14,200,000, yielding operating
margins of 11%, with earnings per diluted share ("EPS") of
$0.06, all in accordance with U.S.
generally accepted accounting principles ("GAAP"). EPS,
ex-items, a non-GAAP financial measure, was $0.20. Income tax expense in the fourth
quarter of 2021 was elevated primarily due to significant
fluctuations in foreign currency exchange rates. A full
reconciliation of non-GAAP financial measures and year-over-year
comparisons are included in the attached financial tables.
Core's CEO, Larry Bruno stated,
"The fourth quarter of 2021 reflected the improvement in business
landscape for Core Lab, led by year-over-year international revenue
growth of over 14%. The Company recorded its highest revenue
and EPS since the first quarter of 2020. At the same time,
Core further strengthened its balance sheet, with the Company's
leverage ratio improving to the lowest level in seven quarters and
approaching pre-pandemic levels. For 2022, we expect to see
continued improvement in global market dynamics, particularly for
Reservoir Description which takes longer to respond to inflections
in market conditions compared to our Production Enhancement
segment. Over the course of 2021, Core continued to roll out
new products and services in key strategic geographic regions,
positioning the Company for improving opportunities in both the
U.S. and international markets. However, we anticipate
typical seasonal declines in activity as we start the new year, and
there are still short-term pandemic-related headwinds, as the sharp
increase in virus cases in late 2021 has continued into early
2022. This has impacted operations through a combination of
government-imposed lockdowns, delays in client projects and
overtime costs to cover quarantine requirements among Core Lab
staff. Fortunately, the recent COVID-19 illnesses experienced
by our staff have largely been mild and of short duration, and we
anticipate fewer COVID-related impacts as the year
unfolds."
Reservoir Description
Reservoir Description operations are closely correlated with
trends in international and offshore activity levels, with
approximately 80% of revenue sourced from outside the U.S.
Reservoir Description revenue in the fourth quarter of 2021 was
$80,100,000, up 2%
sequentially. Operating income for the fourth quarter of 2021
on a GAAP basis was $7,200,000, while
operating income, ex-items, was $7,100,000, down 17% sequentially, yielding
operating margins, ex-items, of 9%. Cost of operations in
the fourth quarter of 2021 increased due to restoration of
employee salary costs and continued operational inefficiencies
associated with the global pandemic.
During the fourth quarter of 2021, Core began the initial work
on a large, long-planned, reservoir evaluation project in the
Middle East. This significant
project had been delayed by local government-imposed shutdowns
related to the COVID-19 pandemic. In 2019 and early 2020,
Core Lab invested to expand analytical capabilities in the host
country to service this extensive coring program and other emerging
opportunities. The analytical program on this multi-well,
conventional reservoir project will employ the full range of basic
and advanced rock properties capabilities, including Core Lab
proprietary methods and technologies. Work on this project
will grow over the next few quarters and continue throughout 2022
and into 2023.
Also, during the fourth quarter of 2021, demand for subsurface
evaluation services to support the oil and gas industry's energy
transition and decarbonization efforts continued to grow. As
the quarter unfolded, Core Lab launched several client-directed
laboratory analytical projects relating to Carbon Capture and
Storage ("CCS"). Coordination and planning efforts are
underway with a number of U.S. and international companies on
projects aimed at evaluating potential sites for CO2
sequestration. Core Lab's role in these projects is to
evaluate the geologic, petrophysical and engineering aspects of the
rocks and formation fluids, all critical inputs into modeling and
identifying the subsurface risks unique to each potential
sequestration site. During the quarter, Core Lab initiated a
core evaluation program for an applied technology company on 180
feet of conventional core and associated sidewall cores from a
potential sequestration site in Illinois, U.S. Core's initial laboratory
analytical program is needed to assess the reservoir and seal rock
properties, and will also be used to form the foundation for
determining the storage capacity of the stratigraphic target.
As the project progresses, Core will utilize its advanced rock and
fluid analytical technologies to refine the client's understanding
of this carbon sequestration opportunity and how to optimize
CO2 injection methodologies.
Another emerging opportunity associated with energy transition
involves leveraging Core's proprietary, legacy portfolio of
geological studies and fluid property datasets on conventional
reservoirs and seal rock. Datasets, accessible through Core's
proprietary database platform, RAPIDTM, are proving
invaluable to operators evaluating potential CCS sites in onshore
and offshore Miocene and Oligocene reservoirs along the U.S. Gulf
Coast. These legacy studies, originally conducted to evaluate
hydrocarbon reservoirs, provide critical data for reconnaissance,
benchmarking, and risk reduction ahead of new coring projects for
CCS site assessment.
Production Enhancement
Production Enhancement operations, which are focused on complex
completions in unconventional, tight-oil reservoirs in the U.S., as
well as conventional offshore projects across the globe, posted
fourth quarter 2021 revenue of $45,000,000, up 15% sequentially. While
sequential financial performance was strong, growth opportunities
were somewhat constrained during the quarter due to longer lead
times in the supply chain and short supply of certain raw
materials. Operating income on a GAAP basis was $7,000,000, while operating income, ex-items, was
$7,100,000, up 43%
sequentially. The improvement of fourth quarter 2021
operating margins to 16%, expanding 310 basis points sequentially,
was underpinned by gains in manufacturing efficiencies, strong
international sales, and continued market penetration of the
Company's pre-assembled GoGun® and Oriented GoGun®.
During the fourth quarter of 2021, Core Lab was approached by an
operator conducting business in the Austin Chalk and Eagle Ford
Formations to provide expertise when performing completions in
smart wells. Smart wells, also referred to as "intelligent
wells", utilize fiber optic cables attached to the outer wall of
the casing, along with downhole sensors and valves which are run
and cemented in place during the well completion. These
sensors relay real time data through the fiber optic cable to the
surface, allowing the operator to optimize production rates and
make critical decisions on fracking, well spacing, and artificial
lift programs. Following installation of the fiber optics,
the well must still be perforated to create communication between
the wellbore and the formation. These perforations are
required for both frac stimulation and subsequent production.
Precise alignment of the perforating system is critical to ensure
that the fiber optic cables are not cut when the energetics are
triggered. Cutting the cables would lead to a loss of
communication with the down-hole sensors and valves. The operator
selected Core's proprietary Zero180™ Oriented Perforating System
with Core's HERO® PerFRAC charges for these smart wells. This
perforating system and energetic design provides the most accurate
oriented system available in the industry, yielding an advantage
over competitive products whenever smart wells are being
constructed. Core's expertise supported the completion of
over 50 stages without damage to the downhole smart well
components.
Core continues to innovate solutions for evaluating well
completions and reducing well costs. During the fourth
quarter of 2021, Core's completion diagnostic services were called
upon by multiple operators in the deepwater Gulf of Mexico to provide a more efficient
approach in identifying the top of cement on intermediate depth
casing strings. Traditionally, the top of cement is
determined by running cement bond logs, a time-consuming and costly
process. Core's completion diagnostic engineers, in
conjunction with two major deepwater operators, developed a
technique by which the top of the cement is marked with Core's
proprietary SpectraStim™ tracers. These tracers allow the
operators to log the interval with their Logging While Drilling
tools, thus eliminating the rig time and expense of running a
separate cement bond log. The total cost savings realized by
the operators were in excess of $150,000 per casing string. This
application has now extended from two intermediate casing strings
for the two original operators, to tracing three, and potentially
four, intermediate casing strings. To date, this technology
and resulting operational efficiency has been adopted by six
deepwater operators.
Free Cash Flow and Dividend
During the fourth quarter of 2021, Core continued to generate
free cash flow ("FCF"), with cash from operations of $7,200,000 and capital expenditures of
$4,800,000, yielding FCF of
$2,400,000. As revenue and
business activities increase, Core's investment in working capital
is also expected to increase. Capital expenditures for the
fourth quarter of 2021 also include $1,000,000 associated with repairs of damaged
facilities which are covered by insurance. Core's free cash
will continue to be returned to its shareholders via the Company's
regular quarterly dividend and opportunistic share repurchases, as
well as being applied towards reducing long-term
debt.
On 27 October 2021, Core's Board
of Supervisory Directors ("Board") announced a quarterly cash
dividend of $0.01 per share of common
stock, which was paid on 29 November
2021 to shareholders of record on 8 November 2021.
Dutch withholding tax was deducted from the dividend at a rate of
15%.
On 2 February 2022, the Board
approved a cash dividend of $0.01 per
share of common stock payable in the first quarter of 2022.
The first quarter dividend will be payable on 7 March 2022, to shareholders of record on 14
February 2022. Dutch withholding tax will be deducted from
the dividend at a rate of 15%.
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 performance metric of
demonstrating superior 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 return to shareholders. Bloomberg's calculations using the
latest comparable data available indicate that Core Lab's ROIC of
9.8% is one of the highest for all major companies in the oilfield
service Comp Group.
Industry and Core Lab Outlook and Guidance
The global crude-oil market continues to tighten, as demand for
crude oil continues to approach pre-COVID levels, resulting in
noticeable increases to crude-oil commodity prices. Current
crude-oil commodity prices may also drive a higher level of
investment, and urgency, in international offshore crude-oil
development projects in 2022 and beyond. These crude-oil
market fundamentals are reflected in the gradual increase in the
international rig count, with more oilfield equipment coming under
contract and expanded capital spending plans for 2022. Core
sees this as a leading indicator of a growing international
cycle.
With Core Lab having more than 70% of its revenue exposed to
international activity, both business segments remain active on
international projects. As additional field development
projects emerge, wells need to be drilled and reservoir rock and
fluid sampled before Reservoir Description more fully participates
in the cycle. As pandemic disruptions abate, the expansion of
international developments provides growth opportunities for both
segments into 2022 and beyond, with a particular focus on the South
Atlantic Margin, Latin America,
and the Middle East.
For the first quarter of 2022, Core Lab expects lower client
activity due to seasonality. The seasonal pattern typically
results in a decline in first quarter revenue by mid-single
digits. The projected decline in first quarter revenue is
slightly less pronounced, compared to historical trends, as the
Company expects momentum in U.S. land activity to continue.
As such, Core anticipates typical seasonal effects to impact the
first quarter of 2022, with first quarter revenue down low to
mid-single digits,
sequentially.
Core projects first quarter 2022 revenue to range from
$117,000,000 to $122,000,000 and operating income of $11,900,000 to $14,000,000, yielding operating margins of
approximately 11%. EPS for the first quarter of 2022 is
expected to be approximately $0.16 to
$0.20.
The Company's first quarter 2022 guidance is based on
projections for underlying operations and excludes gains and losses
in foreign exchange. First quarter 2022 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 2021 earnings announcement. The call will begin at
7:30 a.m. CST / 2:30 p.m. CET on Thursday, 3 February 2022.
To listen to the call, please go to Core's website at
www.corelab.com.
Core Laboratories N.V. is a leading provider of proprietary and
patented reservoir description and production enhancement services
and products used to optimize petroleum reservoir
performance. The Company has over 70 offices in more than 50
countries and is located in every major oil-producing province in
the world. This release, as well as other statements we make,
includes forward-looking statements regarding the future revenue,
profitability, business strategies and developments of the Company
made in reliance upon the safe harbor provisions of Federal
securities law. The Company's outlook is subject to various
important cautionary factors, including risks and uncertainties
related to the oil and natural gas industry, business conditions,
international markets, international political climates, public
health crises, such as the COVID-19 pandemic, 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
N.V. & SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS (amounts in thousands, except per share
data)
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
|
%
Variance
|
|
|
|
December 31,
2021
|
|
|
September 30,
2021
|
|
|
December 31,
2020
|
|
|
vs.
Q3-21
|
|
vs.
Q4-20
|
|
REVENUE
|
|
$
|
125,139
|
|
|
$
|
117,985
|
|
|
$
|
113,749
|
|
|
6.1%
|
|
10.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs of services and
sales
|
|
|
96,987
|
|
|
|
92,918
|
|
|
|
87,918
|
|
|
4.4%
|
|
10.3%
|
|
General and
administrative expenses 1
|
|
|
10,927
|
|
|
|
15,115
|
|
|
|
(3,692)
|
|
|
(27.7)%
|
|
NM
|
|
Depreciation and
amortization
|
|
|
4,398
|
|
|
|
4,496
|
|
|
|
4,837
|
|
|
(2.2)%
|
|
(9.1)%
|
|
Inventory
write-down
|
|
|
—
|
|
|
|
—
|
|
|
|
443
|
|
|
NM
|
|
NM
|
|
Other (income) expense,
net
|
|
|
(1,373)
|
|
|
|
(1,184)
|
|
|
|
839
|
|
|
NM
|
|
NM
|
|
Total operating
expenses
|
|
|
110,939
|
|
|
|
111,345
|
|
|
|
90,345
|
|
|
(0.4)%
|
|
22.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
|
|
14,200
|
|
|
|
6,640
|
|
|
|
23,404
|
|
|
113.9%
|
|
(39.3)%
|
|
Interest
expense
|
|
|
2,590
|
|
|
|
2,669
|
|
|
|
2,920
|
|
|
(3.0)%
|
|
(11.3)%
|
|
Income from
continuing operations
before income tax expense
|
|
|
11,610
|
|
|
|
3,971
|
|
|
|
20,484
|
|
|
192.4%
|
|
(43.3)%
|
|
Income tax
expense
|
|
|
8,823
|
|
|
|
2,962
|
|
|
|
6,540
|
|
|
197.9%
|
|
34.9%
|
|
Income from
continuing operations
|
|
|
2,787
|
|
|
|
1,009
|
|
|
|
13,944
|
|
|
176.2%
|
|
(80.0)%
|
|
Income (loss) from
discontinued
operations, net of income taxes
|
|
|
—
|
|
|
|
—
|
|
|
|
(424)
|
|
|
NM
|
|
NM
|
|
Net income
|
|
|
2,787
|
|
|
|
1,009
|
|
|
|
13,520
|
|
|
176.2%
|
|
(79.4)%
|
|
Net income (loss)
attributable to non-
controlling interest
|
|
|
99
|
|
|
|
135
|
|
|
|
(17)
|
|
|
NM
|
|
NM
|
|
Net income
attributable to Core
Laboratories N.V.
|
|
$
|
2,688
|
|
|
$
|
874
|
|
|
$
|
13,537
|
|
|
207.6%
|
|
(80.1)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS from
continuing
operations
|
|
$
|
0.06
|
|
|
$
|
0.02
|
|
|
$
|
0.31
|
|
|
200.0%
|
|
(80.6)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS
attributable to Core
Laboratories N.V.
|
|
$
|
0.06
|
|
|
$
|
0.02
|
|
|
$
|
0.30
|
|
|
200.0%
|
|
(80.0)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted common
shares outstanding
|
|
|
46,927
|
|
|
|
47,125
|
|
|
|
44,958
|
|
|
(0.4)%
|
|
4.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax
rate
|
|
|
76
|
%
|
|
|
75
|
%
|
|
|
32
|
%
|
|
NM
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT
INFORMATION:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reservoir
Description
|
|
$
|
80,097
|
|
|
$
|
78,775
|
|
|
$
|
83,838
|
|
|
1.7%
|
|
(4.5)%
|
|
Production
Enhancement
|
|
|
45,042
|
|
|
|
39,210
|
|
|
|
29,911
|
|
|
14.9%
|
|
50.6%
|
|
Total
|
|
$
|
125,139
|
|
|
$
|
117,985
|
|
|
$
|
113,749
|
|
|
6.1%
|
|
10.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reservoir
Description
|
|
$
|
7,216
|
|
|
$
|
4,425
|
|
|
$
|
19,426
|
|
|
63.1%
|
|
(62.9)%
|
|
Production
Enhancement
|
|
|
6,993
|
|
|
|
2,779
|
|
|
|
4,495
|
|
|
151.6%
|
|
55.6%
|
|
Corporate and
Other
|
|
|
(9)
|
|
|
|
(564)
|
|
|
|
(517)
|
|
|
NM
|
|
NM
|
|
Total
|
|
$
|
14,200
|
|
|
$
|
6,640
|
|
|
$
|
23,404
|
|
|
113.9%
|
|
(39.3)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
"NM" means not
meaningful
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) For the quarter
ended December 31, 2020, General and administrative expenses
include an adjustment to reverse $11.3
million of stock
compensation that had been previously recognized.
|
|
CORE LABORATORIES
N.V. & SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS
OF OPERATIONS (amounts in thousands, except per share
data)
(Unaudited)
|
|
|
|
Twelve Months
ended
|
|
|
%
Variance
|
|
|
|
December 31,
2021
|
|
|
December 31,
2020
|
|
|
|
|
REVENUE
|
|
$
|
470,252
|
|
|
$
|
487,267
|
|
|
(3.5)%
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
|
|
|
|
|
|
Costs of services and
sales
|
|
|
367,896
|
|
|
|
374,767
|
|
|
(1.8)%
|
|
General and
administrative expenses
|
|
|
44,173
|
|
|
|
34,033
|
|
|
29.8%
|
|
Depreciation and
amortization
|
|
|
18,516
|
|
|
|
20,867
|
|
|
(11.3)%
|
|
Impairments and other
charges
|
|
|
—
|
|
|
|
122,204
|
|
|
NM
|
|
Inventory
write-down
|
|
|
—
|
|
|
|
10,375
|
|
|
NM
|
|
Other (income) expense,
net
|
|
|
(5,595)
|
|
|
|
1,826
|
|
|
NM
|
|
Total operating
expenses
|
|
|
424,990
|
|
|
|
564,072
|
|
|
(24.7)%
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING INCOME
(LOSS)
|
|
|
45,262
|
|
|
|
(76,805)
|
|
|
NM
|
|
Interest
expense
|
|
|
9,152
|
|
|
|
14,372
|
|
|
(36.3)%
|
|
Income (loss) from
continuing operations before income tax expense
|
|
|
36,110
|
|
|
|
(91,177)
|
|
|
NM
|
|
Income tax
expense
|
|
|
15,891
|
|
|
|
5,896
|
|
|
169.5%
|
|
Income (loss) from
continuing operations
|
|
|
20,219
|
|
|
|
(97,073)
|
|
|
NM
|
|
Income (loss) from
discontinued operations, net of income taxes
|
|
|
—
|
|
|
|
(424)
|
|
|
NM
|
|
Net income
(loss)
|
|
|
20,219
|
|
|
|
(97,497)
|
|
|
NM
|
|
Net income
attributable to non-controlling interest
|
|
|
492
|
|
|
|
140
|
|
|
NM
|
|
Net income (loss)
attributable to Core Laboratories N.V.
|
|
$
|
19,727
|
|
|
$
|
(97,637)
|
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS from
continuing operations
|
|
$
|
0.43
|
|
|
$
|
(2.18)
|
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS
attributable to Core Laboratories N.V.
|
|
$
|
0.42
|
|
|
$
|
(2.20)
|
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted common shares outstanding
|
|
|
46,690
|
|
|
|
44,477
|
|
|
5.0%
|
|
|
|
|
|
|
|
|
|
|
|
Effective tax
rate
|
|
|
44
|
%
|
|
|
(6)
|
%
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT
INFORMATION:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
Reservoir
Description
|
|
$
|
313,609
|
|
|
$
|
355,041
|
|
|
(11.7)%
|
|
Production
Enhancement
|
|
|
156,643
|
|
|
|
132,226
|
|
|
18.5%
|
|
Total
|
|
$
|
470,252
|
|
|
$
|
487,267
|
|
|
(3.5)%
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss):
|
|
|
|
|
|
|
|
|
|
Reservoir
Description
|
|
$
|
28,958
|
|
|
$
|
55,044
|
|
|
(47.4)%
|
|
Production
Enhancement
|
|
|
15,163
|
|
|
|
(133,449)
|
|
|
NM
|
|
Corporate and
Other
|
|
|
1,141
|
|
|
|
1,600
|
|
|
NM
|
|
Total
|
|
$
|
45,262
|
|
|
$
|
(76,805)
|
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
"NM" means not
meaningful
|
|
|
|
|
|
|
|
|
|
CORE LABORATORIES
N.V. & SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE
SHEET (amounts in thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
%
Variance
|
|
ASSETS:
|
|
December 31,
2021
|
|
|
September 30,
2021
|
|
|
December 31,
2020
|
|
|
vs.
Q3-21
|
|
vs.
Q4-20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
17,703
|
|
|
$
|
19,050
|
|
|
$
|
13,806
|
|
|
(7.1)%
|
|
28.2%
|
|
Accounts receivable,
net
|
|
|
96,830
|
|
|
|
95,297
|
|
|
|
83,192
|
|
|
1.6%
|
|
16.4%
|
|
Inventories
|
|
|
45,443
|
|
|
|
44,056
|
|
|
|
38,151
|
|
|
3.1%
|
|
19.1%
|
|
Other current
assets
|
|
|
29,079
|
|
|
|
28,842
|
|
|
|
30,699
|
|
|
0.8%
|
|
(5.3)%
|
|
Total Current
Assets
|
|
|
189,055
|
|
|
|
187,245
|
|
|
|
165,848
|
|
|
1.0%
|
|
14.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
|
110,952
|
|
|
|
112,736
|
|
|
|
115,293
|
|
|
(1.6)%
|
|
(3.8)%
|
|
Right-of-use
assets
|
|
|
61,387
|
|
|
|
65,379
|
|
|
|
66,385
|
|
|
(6.1)%
|
|
(7.5)%
|
|
Intangibles, goodwill
and other long-term assets, net
|
|
|
219,459
|
|
|
|
220,919
|
|
|
|
221,053
|
|
|
(0.7)%
|
|
(0.7)%
|
|
Total assets
|
|
$
|
580,853
|
|
|
$
|
586,279
|
|
|
$
|
568,579
|
|
|
(0.9)%
|
|
2.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
29,726
|
|
|
$
|
35,015
|
|
|
$
|
23,028
|
|
|
(15.1)%
|
|
29.1%
|
|
Short-term operating
lease obligations
|
|
|
12,342
|
|
|
|
12,191
|
|
|
|
11,437
|
|
|
1.2%
|
|
7.9%
|
|
Other current
liabilities
|
|
|
48,714
|
|
|
|
45,747
|
|
|
|
55,285
|
|
|
6.5%
|
|
(11.9)%
|
|
Total current
liabilities
|
|
|
90,782
|
|
|
|
92,953
|
|
|
|
89,750
|
|
|
(2.3)%
|
|
1.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt,
net
|
|
|
188,636
|
|
|
|
188,463
|
|
|
|
259,433
|
|
|
0.1%
|
|
(27.3)%
|
|
Long-term operating
lease obligations
|
|
|
49,286
|
|
|
|
53,831
|
|
|
|
56,108
|
|
|
(8.4)%
|
|
(12.2)%
|
|
Other long-term
liabilities
|
|
|
91,148
|
|
|
|
90,018
|
|
|
|
87,715
|
|
|
1.3%
|
|
3.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
equity
|
|
|
161,001
|
|
|
|
161,014
|
|
|
|
75,573
|
|
|
—%
|
|
113.0%
|
|
Total liabilities and
equity
|
|
$
|
580,853
|
|
|
$
|
586,279
|
|
|
$
|
568,579
|
|
|
(0.9)%
|
|
2.2%
|
|
|
"NM" means not
meaningful
|
CORE LABORATORIES
N.V. & SUBSIDIARIES CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (amounts in thousands)
(Unaudited)
|
|
|
|
Twelve Months
ended
|
|
|
|
December 31,
2021
|
|
|
December 31,
2020
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
|
|
Income (loss) from
continuing operations
|
|
$
|
20,219
|
|
|
$
|
(97,073)
|
|
Income (loss) from
discontinued operations
|
|
|
—
|
|
|
|
(424)
|
|
Net income
(loss)
|
|
$
|
20,219
|
|
|
$
|
(97,497)
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
Stock-based
compensation
|
|
|
19,093
|
|
|
|
7,394
|
|
Depreciation and
amortization
|
|
|
18,516
|
|
|
|
20,867
|
|
Impairments, inventory
write-down and other charges
|
|
|
—
|
|
|
|
132,579
|
|
Deferred income
tax
|
|
|
6,012
|
|
|
|
(12,216)
|
|
Gain on sale of
business
|
|
|
(1,012)
|
|
|
|
—
|
|
Loss on sale of
discontinued operations
|
|
|
—
|
|
|
|
573
|
|
Accounts
receivable
|
|
|
(13,522)
|
|
|
|
46,421
|
|
Inventories
|
|
|
(4,547)
|
|
|
|
1,471
|
|
Accounts
payable
|
|
|
6,568
|
|
|
|
(12,838)
|
|
Other adjustments to
net income
|
|
|
(14,748)
|
|
|
|
(28,886)
|
|
Net cash provided by
operating activities
|
|
$
|
36,579
|
|
|
$
|
57,868
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
|
|
Capital
expenditures
|
|
$
|
(13,539)
|
|
|
$
|
(11,880)
|
|
Proceeds from sale of
business, net of cash sold
|
|
|
873
|
|
|
|
—
|
|
Proceeds from cash
surrender value of company owned life insurance
|
|
|
—
|
|
|
|
20,443
|
|
Proceeds (payments)
from sale of discontinued operations
|
|
|
—
|
|
|
|
(225)
|
|
Other investing
activities
|
|
|
2,443
|
|
|
|
(487)
|
|
Net cash provided by
(used in) investing activities
|
|
$
|
(10,223)
|
|
|
$
|
7,851
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
|
Repayment of debt
borrowings
|
|
$
|
(226,000)
|
|
|
$
|
(102,000)
|
|
Proceeds from debt
borrowings
|
|
|
155,000
|
|
|
|
56,000
|
|
Proceeds from issuance
of common stock
|
|
|
60,000
|
|
|
|
—
|
|
Transaction costs
related to issuance of common shares
|
|
|
(861)
|
|
|
|
—
|
|
Dividends
paid
|
|
|
(1,834)
|
|
|
|
(12,446)
|
|
Repurchase of treasury
shares
|
|
|
(8,256)
|
|
|
|
(2,793)
|
|
Other financing
activities
|
|
|
(508)
|
|
|
|
(1,766)
|
|
Net cash used in
financing activities
|
|
$
|
(22,459)
|
|
|
$
|
(63,005)
|
|
|
|
|
|
|
|
|
NET CHANGE IN CASH
AND CASH EQUIVALENTS
|
|
|
3,897
|
|
|
|
2,714
|
|
CASH AND CASH
EQUIVALENTS, beginning of period
|
|
|
13,806
|
|
|
|
11,092
|
|
CASH AND CASH
EQUIVALENTS, end of period
|
|
$
|
17,703
|
|
|
$
|
13,806
|
|
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 (Loss), Income (Loss) from Continuing Operations
and Diluted Earnings (Loss) Per Share from Continuing
Operations (amounts in thousands, except per share data)
(Unaudited)
|
|
|
|
Operating Income
from Continuing Operations
|
|
|
|
Three Months
Ended
|
|
|
|
December 31,
2021
|
|
|
September 30,
2021
|
|
|
December 31,
2020
|
|
GAAP
reported
|
|
$
|
14,200
|
|
|
$
|
6,640
|
|
|
$
|
23,404
|
|
Stock compensation
1, 2
|
|
|
—
|
|
|
|
6,506
|
|
|
|
(11,934)
|
|
Inventory
write-down
|
|
|
—
|
|
|
|
—
|
|
|
|
443
|
|
Facility exit
cost
|
|
|
—
|
|
|
|
—
|
|
|
|
256
|
|
Foreign exchange
losses (gains)
|
|
|
(32)
|
|
|
|
(140)
|
|
|
|
852
|
|
Excluding specific
items
|
|
$
|
14,168
|
|
|
$
|
13,006
|
|
|
$
|
13,021
|
|
|
|
|
|
Income from
Continuing Operations
|
|
|
|
Three Months
Ended
|
|
|
|
December 31,
2021
|
|
|
September 30,
2021
|
|
|
December 31,
2020
|
|
GAAP
reported
|
|
$
|
2,787
|
|
|
$
|
1,009
|
|
|
$
|
13,944
|
|
Stock compensation
1, 2
|
|
|
—
|
|
|
|
6,506
|
|
|
|
(11,934)
|
|
Inventory
write-down
|
|
|
—
|
|
|
|
—
|
|
|
|
301
|
|
Facility exit
cost
|
|
|
—
|
|
|
|
—
|
|
|
|
174
|
|
Impact of higher
(lower) tax rate 3
|
|
|
6,501
|
|
|
|
867
|
|
|
|
5,018
|
|
Foreign exchange
losses (gains)
|
|
|
(26)
|
|
|
|
(111)
|
|
|
|
578
|
|
Excluding specific
items
|
|
$
|
9,262
|
|
|
$
|
8,271
|
|
|
$
|
8,081
|
|
|
|
|
|
Earnings Per
Diluted Share from Continuing Operations
|
|
|
|
Three Months
Ended
|
|
|
Twelve months
ended
|
|
|
|
December 31,
2021
|
|
|
September 30,
2021
|
|
|
December 31,
2020
|
|
|
December 31,
2021
|
|
GAAP
reported
|
|
$
|
0.06
|
|
|
$
|
0.02
|
|
|
$
|
0.31
|
|
|
$
|
0.43
|
|
Stock compensation
1, 2
|
|
|
—
|
|
|
|
0.14
|
|
|
|
(0.27)
|
|
|
|
0.15
|
|
Inventory
write-down
|
|
|
—
|
|
|
|
—
|
|
|
|
0.01
|
|
|
|
—
|
|
Impact of higher
(lower) tax rate 3
|
|
|
0.14
|
|
|
|
0.02
|
|
|
|
0.11
|
|
|
|
0.17
|
|
Interest rate swap
settlement 4
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.04)
|
|
Foreign exchange
losses (gains)
|
|
|
—
|
|
|
|
—
|
|
|
|
0.02
|
|
|
|
—
|
|
Excluding specific
items
|
|
$
|
0.20
|
|
|
$
|
0.18
|
|
|
$
|
0.18
|
|
|
$
|
0.71
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes stock
compensation expense recognized pursuant to FASB ASC 718 "Stock
Compensation" associated with employees reaching eligible
retirement age, which is nondeductible for tax
purposes.
|
|
(2) The quarter
ended December 31, 2020 included an adjustment to reverse
previously recognized stock compensation expense for shares that
were granted but did not vest and were revalued. This adjustment is
non-taxable.
|
|
(3) Includes
adjustments to reflect tax expense at a normalized rate of 20%.
Income tax expense for the fourth quarter of 2021 includes taxable
gains in local jurisdictions associated with foreign currency
translation of U.S. dollar denominated receivables, primarily in
Turkey.
|
|
(4) The year ended
December 31, 2021 included a credit to interest expense associated
with the settlement and restructuring of interest rate
hedges.
|
|
Segment
Information (amounts in thousands)
(Unaudited)
|
|
|
|
Operating Income
from Continuing Operations
|
|
|
|
Three Months Ended
December 31, 2021
|
|
|
|
Reservoir
Description
|
|
|
Production
Enhancement
|
|
|
Corporate and
Other
|
|
GAAP
reported
|
|
$
|
7,216
|
|
|
$
|
6,993
|
|
|
$
|
(9)
|
|
Foreign exchange
losses
|
|
|
(123)
|
|
|
|
98
|
|
|
|
(7)
|
|
Excluding specific
items
|
|
$
|
7,093
|
|
|
$
|
7,091
|
|
|
$
|
(16)
|
|
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 performance metric of demonstrating
superior 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 9.8% is defined by Bloomberg as Net Operating Profit
After Tax ("NOPAT") of $36.1 million
divided by Average Total Invested Capital ("Average TIC") of
$368.5 million where NOPAT is defined
as GAAP net income before minority interest plus the sum of income
tax expense, interest expense, and pension expense less pension
service cost and tax effect on income before interest and tax
expense. Average TIC is defined as average of beginning and ending
periods' GAAP stockholder's equity plus the sum of net long-term
debt, lease liabilities, allowance for doubtful accounts, net
balance of deferred taxes, and income tax payable.
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
|
|
|
|
December 31,
2021
|
|
|
December 31,
2021
|
|
Net cash provided by
operating activities
|
|
$
|
7,155
|
|
|
$
|
36,579
|
|
Capital
expenditures
|
|
|
(4,750)
|
|
|
|
(13,539)
|
|
Free cash
flow
|
|
$
|
2,405
|
|
|
$
|
23,040
|
|
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SOURCE Core Laboratories N.V.