ChampionX Reports Second Quarter 2024 Results
ChampionX (NASDAQ: CHX) reported its Q2 2024 results with revenue of $893.3 million, a 4% year-over-year and 3% sequential decrease. Net income attributable to ChampionX was $52.6 million, with an adjusted EBITDA of $183.2 million and a 20.5% adjusted EBITDA margin. The company generated positive free cash flow of $38.3 million, marking the ninth consecutive quarter of positive free cash flow.
Key highlights include:
- Income before income taxes margin of 9.3%
- Cash from operating activities of $67.6 million
- Completed acquisition of RMSpumptools
- Pending all-stock acquisition by SLB, expected to close in Q4 2024 or Q1 2025
The company's performance was impacted by lower revenue in Mexico, but offset by growth in other regions. ChampionX maintains a strong financial position with $1.1 billion in liquidity.
ChampionX (NASDAQ: CHX) ha riportato i risultati del Q2 2024 con entrate di 893,3 milioni di dollari, una diminuzione del 4% su base annuale e del 3% rispetto al trimestre precedente. Il reddito netto attribuibile a ChampionX è stato di 52,6 milioni di dollari, con un EBITDA rettificato di 183,2 milioni di dollari e un margine EBITDA rettificato del 20,5%. L'azienda ha generato un flusso di cassa libero positivo di 38,3 milioni di dollari, segnando il nono trimestre consecutivo di flusso di cassa libero positivo.
I principali punti salienti includono:
- Margine di reddito prima delle imposte del 9,3%
- Flusso di cassa dalle attività operative di 67,6 milioni di dollari
- Acquisizione completata di RMSpumptools
- Acquisizione in attesa da SLB, prevista per chiudere nel Q4 2024 o nel Q1 2025
Le prestazioni dell'azienda sono state influenzate da entrate più basse in Messico, ma compensate dalla crescita in altre regioni. ChampionX mantiene una solida posizione finanziaria con 1,1 miliardi di dollari di liquidità.
ChampionX (NASDAQ: CHX) reportó sus resultados del Q2 2024 con ingresos de 893,3 millones de dólares, una disminución del 4% en comparación con el año anterior y del 3% secuencial. Los ingresos netos atribuibles a ChampionX fueron de 52,6 millones de dólares, con un EBITDA ajustado de 183,2 millones de dólares y un margen EBITDA ajustado del 20,5%. La compañía generó un flujo de caja libre positivo de 38,3 millones de dólares, marcando el noveno trimestre consecutivo de flujo de caja libre positivo.
Los puntos destacados incluyen:
- Margen de ingreso antes de impuestos del 9,3%
- Flujo de efectivo de las actividades operativas de 67,6 millones de dólares
- Adquisición completada de RMSpumptools
- Adquisición pendiente en acciones por parte de SLB, prevista para cerrar en el Q4 2024 o Q1 2025
El desempeño de la compañía se vio afectado por menores ingresos en México, pero compensado por el crecimiento en otras regiones. ChampionX mantiene una sólida posición financiera con 1,1 mil millones de dólares en liquidez.
ChampionX (NASDAQ: CHX)는 Q2 2024 결과를 보고하며 매출이 8억 9330만 달러로 전년 대비 4%, 직전 분기 대비 3% 감소했다고 발표했습니다. ChampionX에 귀속된 순이익은 5260만 달러였으며, 조정 EBITDA는 1억 8320만 달러, 조정 EBITDA 마진은 20.5%입니다. 회사는 3천830만 달러의 긍정적인 잉여 현금을 생성하여 아홉 분기 연속 긍정적인 잉여 현금을 달성했습니다.
주요 하이라이트는 다음과 같습니다:
- 세전 소득 마진 9.3%
- 운영 활동으로부터의 현금 6천760만 달러
- RMSpumptools 인수 완료
- SLB의 주식 전량 인수 대기 중, Q4 2024 또는 Q1 2025에 종료될 것으로 예상됨
회사의 성장은 멕시코에서의 낮은 매출로 인해 영향을 받았지만, 다른 지역에서의 성장으로 상쇄되었습니다. ChampionX는 11억 달러의 유동성으로 강력한 재무 상태를 유지하고 있습니다.
ChampionX (NASDAQ: CHX) a annoncé ses résultats pour le Q2 2024 avec un chiffre d'affaires de 893,3 millions de dollars, soit une diminution de 4% par rapport à l'année précédente et de 3% par rapport au trimestre précédent. Le bénéfice net attribuable à ChampionX s'élevait à 52,6 millions de dollars, avec un EBITDA ajusté de 183,2 millions de dollars et une marge EBITDA ajustée de 20,5%. L'entreprise a généré un flux de trésorerie libre positif de 38,3 millions de dollars, marquant le neuvième trimestre consécutif de flux de trésorerie libre positif.
Les points clés incluent :
- Marges de revenu avant impôts de 9,3%
- Trésorerie provenant des activités d'exploitation de 67,6 millions de dollars
- Acquisition de RMSpumptools achevée
- Acquisition d'actions par SLB en attente, prévue pour clôturer au Q4 2024 ou au Q1 2025
Les performances de l'entreprise ont été impactées par une baisse des revenus au Mexique, mais compensées par une croissance dans d'autres régions. ChampionX maintient une solide position financière avec 1,1 milliard de dollars de liquidités.
ChampionX (NASDAQ: CHX) hat seine Ergebnisse für das Q2 2024 mit Umsatz von 893,3 Millionen Dollar gemeldet, was einem Rückgang von 4% im Jahresvergleich und 3% im Vergleich zum vorherigen Quartal entspricht. Der Nettogewinn, der ChampionX zuzurechnen ist, betrug 52,6 Millionen Dollar, mit einem bereinigten EBITDA von 183,2 Millionen Dollar und einer bereinigten EBITDA-Marge von 20,5%. Das Unternehmen erzielte einen positiven freien Cashflow von 38,3 Millionen Dollar und markiert das neunte aufeinanderfolgende Quartal mit positivem Cashflow.
Wichtige Highlights umfassen:
- Ertrag vor Steuern von 9,3%
- Cashflow aus operativen Aktivitäten von 67,6 Millionen Dollar
- Erfolgreicher Abschluss der Übernahme von RMSpumptools
- Ausstehende Aktientransaktion mit SLB, erwartet für Q4 2024 oder Q1 2025
Die Leistung des Unternehmens wurde durch geringere Umsätze in Mexiko beeinträchtigt, jedoch durch das Wachstum in anderen Regionen ausgeglichen. ChampionX hält eine starke finanzielle Position mit 1,1 Milliarden Dollar Liquidität.
- Positive free cash flow for the ninth consecutive quarter, reaching $38.3 million
- Strong adjusted EBITDA margin of 20.5%, demonstrating operational efficiency
- Completed strategic acquisition of RMSpumptools , enhancing product portfolio
- Strong liquidity position of $1.1 billion, including $393 million in cash
- Revenue growth in North America, Middle East & Africa, and Asia Pacific regions
- Overall revenue decreased by 4% year-over-year and 3% sequentially to $893.3 million
- Significant revenue decline in Mexico, down $54 million sequentially and $61 million year-over-year
- Lower activity in Drilling Technologies and Production & Automation Technologies due to decreased rig count and well completions
ChampionX's Q2 2024 results present a mixed picture. While revenue declined
Key financial highlights include:
- Net income of
$52.6 million - Adjusted EBITDA of
$183.2 million - Free cash flow of
$38.3 million
The company's cash flow generation remains robust, with cash from operating activities representing
The
The pending acquisition by SLB adds an interesting dynamic to ChampionX's future. While this creates uncertainty in the short term, it could potentially lead to synergies and expanded market opportunities in the long run.
ChampionX's Q2 results reflect the current state of the oil and gas industry, with regional variations impacting performance. The company's diversified portfolio has helped mitigate some market challenges:
- North America revenues grew
1% sequentially, driven by a6% growth in Production Chemical Technologies - International revenues (excluding Mexico) increased
6% sequentially - Digital products revenue declined
5% sequentially due to lower North American activity
The acquisition of RMSpumptools is strategically significant, enhancing ChampionX's artificial lift capabilities and strengthening its presence in key international markets. This move aligns with industry trends towards more efficient and technologically advanced production solutions.
The company's focus on emissions monitoring technology, with SOOFIE installations increasing
Looking ahead, the resumption of order activity in Mexico towards the end of the year could provide a boost to revenues. However, the pending acquisition by SLB introduces uncertainty and may impact ChampionX's standalone market positioning in the near term.
- Revenue of
$893.3 million - Net income attributable to ChampionX of
$52.6 million - Adjusted net income of
$71.2 million - Adjusted EBITDA of
$183.2 million - Income before income taxes margin of
9.3% - Adjusted EBITDA margin of
20.5% - Cash from operating activities of
$67.6 million and free cash flow of$38.3 million
THE WOODLANDS, Texas, July 24, 2024 (GLOBE NEWSWIRE) -- ChampionX Corporation (NASDAQ: CHX) (“ChampionX” or the “Company”) today announced second quarter of 2024 results. Revenue was
CEO Commentary
“We continued to demonstrate the unique nature of ChampionX’s cash flow resiliency driven by the strength of our high-margin operating model and capital-light portfolio of businesses as we generated positive free cash flow for the ninth consecutive quarter. Our strong results in what is a variable environment reflects the ethos of our 7,100 ChampionX employees around the world who have an unwavering focus on delivering value-added solutions for our customers’ most important challenges. I am thankful and humbled to lead such a talented and dedicated team,” ChampionX’s President and Chief Executive Officer Sivasankaran “Soma” Somasundaram said.
“During the second quarter of 2024, we generated revenue of
“Earlier this month, we completed the acquisition of RMSpumptools Limited, a UK-based company that designs and manufactures highly engineered mechanical and electrical solutions for complex artificial lift applications. The integration of RMSpumptools’ technology will enhance ChampionX’s Production and Automation Technologies portfolio and will further strengthen the Company’s presence and participation in a broad range of international markets including the Middle East, Latin America, and global offshore developments.
“Cash flow from operating activities was
Agreement to be Acquired by SLB
On April 2, 2024, SLB (NYSE: SLB) and ChampionX jointly announced a definitive Agreement and Plan of Merger (the “Merger Agreement”) for SLB to purchase ChampionX in an all-stock transaction. The transaction was unanimously approved by the ChampionX board of directors and the transaction received the approval of the ChampionX stockholders at a special meeting held on June 18, 2024. The transaction is subject to regulatory approvals and other customary closing conditions. It is currently anticipated that the closing of the transaction will occur in the fourth quarter of 2024 or the first quarter of 2025.
ChampionX may continue to pay its regular quarterly cash dividends with customary record and payment dates, subject to certain limitations under the Merger Agreement. Given the pending acquisition of ChampionX by SLB, ChampionX has discontinued providing quarterly guidance and will not host a conference call or webcast to discuss its second quarter 2024 results.
Production Chemical Technologies
Production Chemical Technologies revenue in the second quarter of 2024 was
Segment operating profit was
Production & Automation Technologies
Production & Automation Technologies revenue in the second quarter of 2024 was
Segment operating profit was
Drilling Technologies
Drilling Technologies revenue in the second quarter of 2024 was
Segment operating profit was
Reservoir Chemical Technologies
Reservoir Chemical Technologies revenue in the second quarter 2024 was
Segment operating profit was
Other Business Highlights: Better Together
- An independent operator has awarded ChampionX an Integrated Production project for three well pads comprising 16 wells in the Permian basin. The performance-based contract includes ESP systems, chemicals, chemical injection pumping systems, and capillary services, as well as automation, controls, data management, and optimization services. ChampionX secured the project based on a bespoke project plan designed to solve the operator’s production challenges.
Other Business Highlights: Chemical Technologies
- Successfully executed first fill delivery of product for a new hydrocarbon field development in Mauritania. Project underscored Chemical Technologies’ effective project management and collaboration capabilities, and positions ChampionX well for follow-on chemicals opportunities for this long-lived producing asset.
- Awarded a new five-year contract covering production chemicals for multiple offshore oil and gas platforms in the South China Sea. This award further develops the scope of ChampionX’s relationship with this global oil major customer and includes planned expansion of new fields.
- Awarded preferred status to supply asset integrity chemicals for a major North American midstream operator’s crude oil assets.
- Reached agreement to supply packer fluid applications for a national oil company in the Middle East.
- Renewed multi-year contract with an international operator in the North Sea, under which ChampionX will provide full chemical management services, as well as specialty and commodity chemical supply for all assets operated by the customer on the UK Continental Shelf.
- Achieved joint Reservoir Chemical Technologies and Production Chemical Technologies win with a Permian operator to supply fracturing additives, including specialized surfactant, scale and biocide chemistries and services.
Other Business Highlights: Production & Automation Technologies
- ChampionX completed the first rod lift system installation for a Middle East national oil company in an important new unconventional field and the well has been producing from a depth of 10,000 feet since mid-May. The successful completion of this project opens attractive future opportunities with this customer, which is planning a long-term drilling campaign that will leverage rod lift and plunger lift systems. Under the terms of the contract, ChampionX managed the entire project lifecycle and supplied the complete surface and downhole rod system.
- In Oman, ChampionX was recognized by national oil company, PDO, with In-country Value (ICV) awards, which celebrate local companies’ contributions to Oman’s economy. Our team secured second place awards for manufacturing and local hiring as well as best local manufacturing facility.
- ChampionX secured a four-year contract to provide XSPOCTM production optimization software to a major oil and gas company in Indonesia, initially covering 2,000 wells and scaling to over 4,000. This strategic win strengthens our digital presence in Asia Pacific.
- A super major performed a pilot of Pump CheckerTM software (developed by recently acquired Artificial Lift Performance) on a selection of their Permian ESP and gas lift wells. The pilot reduced the time to act on the wells to drive measurable performance improvement and the client has moved forward with a full implementation on all their Midland and Delaware basin wells. Separately, a private operator in the Permian performed a Pump CheckerTM pilot on 150 gas lift wells. Based on the success of the pilot, the customer is now using Pump CheckerTM on their gas lift wells, replacing a competitor’s production optimization software solution.
- Lease and subscription-based revenue accounted for approximately
39% of Emissions Technologies revenues during the second quarter, and installations of SOOFIE (continuous methane monitor) units increased7% sequentially and21% year-over-year, reflecting growing adoption and demand in the market.
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 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 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.
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 forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include statements relating to the proposed transaction between SLB and ChampionX, including statements regarding the benefits of the transaction and the anticipated timing of the transaction, and information regarding the businesses of SLB and ChampionX, including expectations regarding outlook and all underlying assumptions, SLB’s and ChampionX’s objectives, plans and strategies, information relating to operating trends in markets where SLB and ChampionX operate, statements that contain projections of results of operations or of financial condition and all other statements other than statements of historical fact that address activities, events or developments that SLB or ChampionX intends, expects, projects, believes or anticipates will or may occur in the future. Such statements are based on management’s beliefs and assumptions made based on information currently available to management. All statements in this communication, other than statements of historical fact, are forward-looking statements that may be identified by the use of the words “outlook,” “guidance,” “expects,” “believes,” “anticipates,” “should,” “estimates,” “intends,” “plans,” “seeks,” “targets,” “may,” “can,” “believe,” “predict,” “potential,” “projected,” “projections,” “precursor,” “forecast,” “ambition,” “goal,” “scheduled,” “think,” “could,” “would,” “will,” “see,” “likely,” and other similar expressions or variations, but not all forward-looking statements include such words. These forward-looking statements involve known and unknown risks and uncertainties, and which may cause SLB’s or ChampionX’s actual results and performance to be materially different from those expressed or implied in the forward-looking statements. Factors and risks that may impact future results and performance include, but are not limited to those factors and risks described in Part I, “Item 1. Business”, “Item 1A. Risk Factors”, and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in SLB’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the Securities and Exchange Commission (the “SEC”) on January 24, 2024 and Part 1, Item 1A, “Risk Factors” in ChampionX’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 6, 2024, and each of their respective, subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. These include, but are not limited to, and in each case as a possible result of the proposed transaction on each of SLB and ChampionX: the ultimate outcome of the proposed transaction between SLB and ChampionX, including the effect of the announcement of the proposed transaction; the ability to operate the SLB and ChampionX respective businesses, including business disruptions; difficulties in retaining and hiring key personnel and employees; the ability to maintain favorable business relationships with customers, suppliers and other business partners; the terms and timing of the proposed transaction; the occurrence of any event, change or other circumstance that could give rise to the termination of the proposed transaction; the anticipated or actual tax treatment of the proposed transaction; the ability to satisfy closing conditions to the completion of the proposed transaction (including the adoption of the merger agreement in respect of the proposed transaction by ChampionX stockholders); other risks related to the completion of the proposed transaction and actions related thereto; the ability of SLB and ChampionX to integrate the business successfully and to achieve anticipated synergies and value creation from the proposed transaction; changes in demand for SLB’s or ChampionX’s products and services; global market, political and economic conditions, including in the countries in which SLB and ChampionX operate; the ability to secure government regulatory approvals on the terms expected, at all or in a timely manner; the extent of growth of the oilfield services market generally, including for chemical solutions in production and midstream operations; the global macro-economic environment, including headwinds caused by inflation, rising interest rates, unfavorable currency exchange rates, and potential recessionary or depressionary conditions; the impact of shifts in prices or margins of the products that SLB or ChampionX sells or services that SLB or ChampionX provides, including due to a shift towards lower margin products or services; cyber-attacks, information security and data privacy; the impact of public health crises, such as pandemics (including COVID-19) and epidemics and any related company or government policies and actions to protect the health and safety of individuals or government policies or actions to maintain the functioning of national or global economies and markets; trends in crude oil and natural gas prices, including trends in chemical solutions across the oil and natural gas industries, that may affect the drilling and production activity, profitability and financial stability of SLB’s and ChampionX’s customers and therefore the demand for, and profitability of, their products and services; litigation and regulatory proceedings, including any proceedings that may be instituted against SLB or ChampionX related to the proposed transaction; failure to effectively and timely address energy transitions that could adversely affect the businesses of SLB or ChampionX, results of operations, and cash flows of SLB or ChampionX; and disruptions of SLB’s or ChampionX’s information technology systems.
These risks, as well as other risks related to the proposed transaction, are included in the Form S-4 and proxy statement/prospectus that was filed with the SEC in connection with the proposed transaction. While the list of factors presented here is, and the list of factors presented in the registration statement on Form S-4 are, considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. For additional information about other factors that could cause actual results to differ materially from those described in the forward-looking statements, please refer to SLB’s and ChampionX’s respective periodic reports and other filings with the SEC, including the risk factors identified in SLB’s and ChampionX’s Annual Reports on Form 10-K, respectively, and SLB’s and ChampionX’s subsequent Quarterly Reports on Form 10-Q. The forward-looking statements included in this communication are made only as of the date hereof. Neither SLB nor ChampionX undertakes any obligation to update any forward-looking statements to reflect subsequent events or circumstances, except as required by law.
Investor Contact: Byron Pope
byron.pope@championx.com
281-602-0094
Media Contact: John Breed
john.breed@championx.com
281-403-5751
CHAMPIONX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended | Six Months Ended | ||||||||||||||||||
June 30, | March 31, | June 30, | June 30, | ||||||||||||||||
(in thousands, except per share amounts) | 2024 | 2024 | 2023 | 2024 | 2023 | ||||||||||||||
Revenue | $ | 893,272 | $ | 922,141 | $ | 926,600 | $ | 1,815,413 | $ | 1,874,947 | |||||||||
Cost of goods and services | 613,426 | 622,937 | 644,394 | 1,236,363 | 1,309,386 | ||||||||||||||
Gross profit | 279,846 | 299,204 | 282,206 | 579,050 | 565,561 | ||||||||||||||
Costs and expenses: | |||||||||||||||||||
Selling, general and administrative expense | 182,995 | 172,414 | 162,484 | 355,409 | 323,300 | ||||||||||||||
(Gain) loss on disposal group and sale-leaseback transaction | — | (29,883 | ) | — | (29,883 | ) | 12,965 | ||||||||||||
Interest expense, net | 15,421 | 13,935 | 14,544 | 29,356 | 27,010 | ||||||||||||||
Foreign currency transaction (gains) losses, net | (2,767 | ) | 55 | 4,439 | (2,712 | ) | 13,691 | ||||||||||||
Other expense (income), net | 938 | 2,927 | (7,543 | ) | 3,865 | (11,500 | ) | ||||||||||||
Income before income taxes | 83,259 | 139,756 | 108,282 | 223,015 | 200,095 | ||||||||||||||
Provision for income taxes | 27,868 | 26,596 | 11,656 | 54,464 | 40,325 | ||||||||||||||
Net income | 55,391 | 113,160 | 96,626 | 168,551 | 159,770 | ||||||||||||||
Net income attributable to noncontrolling interest | 2,822 | 237 | 829 | 3,059 | 441 | ||||||||||||||
Net income attributable to ChampionX | $ | 52,569 | $ | 112,923 | $ | 95,797 | $ | 165,492 | $ | 159,329 | |||||||||
Earnings per share attributable to ChampionX: | |||||||||||||||||||
Basic | $ | 0.28 | $ | 0.59 | $ | 0.49 | $ | 0.87 | $ | 0.81 | |||||||||
Diluted | $ | 0.27 | $ | 0.58 | $ | 0.48 | $ | 0.85 | $ | 0.79 | |||||||||
Weighted-average shares outstanding: | |||||||||||||||||||
Basic | 190,426 | 190,803 | 197,034 | 190,615 | 197,657 | ||||||||||||||
Diluted | 193,257 | 193,964 | 200,735 | 193,740 | 201,694 | ||||||||||||||
CHAMPIONX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands) | June 30, 2024 | December 31, 2023 | |||||
ASSETS | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 393,297 | $ | 288,557 | |||
Receivables, net | 441,401 | 534,534 | |||||
Inventories, net | 538,999 | 521,549 | |||||
Prepaid expenses and other current assets | 71,489 | 80,777 | |||||
Total current assets | 1,445,186 | 1,425,417 | |||||
Property, plant and equipment, net | 752,553 | 773,552 | |||||
Goodwill | 684,567 | 669,064 | |||||
Intangible assets, net | 229,562 | 243,553 | |||||
Other non-current assets | 177,472 | 130,116 | |||||
Total assets | $ | 3,289,340 | $ | 3,241,702 | |||
LIABILITIES AND EQUITY | |||||||
Current Liabilities: | |||||||
Current portion of long-term debt | $ | 6,203 | $ | 6,203 | |||
Accounts payable | 484,472 | 451,680 | |||||
Other current liabilities | 237,030 | 324,866 | |||||
Total current liabilities | 727,705 | 782,749 | |||||
Long-term debt | 592,868 | 594,283 | |||||
Other long-term liabilities | 239,534 | 203,639 | |||||
Stockholders’ equity: | |||||||
ChampionX stockholders’ equity | 1,745,155 | 1,676,622 | |||||
Noncontrolling interest | (15,922 | ) | (15,591 | ) | |||
Total liabilities and equity | $ | 3,289,340 | $ | 3,241,702 | |||
CHAMPIONX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended June 30, | |||||||
(in thousands) | 2024 | 2023 | |||||
Cash flows from operating activities: | |||||||
Net income | $ | 168,551 | $ | 159,770 | |||
Depreciation and amortization | 119,783 | 115,387 | |||||
(Gain) loss on sale-leaseback transaction and disposal group | (29,883 | ) | 12,965 | ||||
Loss on Argentina Blue Chip Swap transaction | 7,168 | — | |||||
Deferred income taxes | (15,092 | ) | (22,187 | ) | |||
Loss (gain) on disposal of fixed assets | 217 | (1,070 | ) | ||||
Receivables | 90,912 | 83,589 | |||||
Inventories | (40,897 | ) | (70,040 | ) | |||
Accounts payable | 20,919 | 40,632 | |||||
Other assets | 1,016 | 3,135 | |||||
Leased assets | (15,770 | ) | (22,125 | ) | |||
Other operating items, net | (65,791 | ) | (91,768 | ) | |||
Net cash flows provided by operating activities | 241,133 | 208,288 | |||||
Cash flows from investing activities: | |||||||
Capital expenditures | (65,314 | ) | (57,277 | ) | |||
Proceeds from sale of fixed assets | 6,482 | 7,109 | |||||
Proceeds from sale-leaseback transaction | 44,292 | — | |||||
Purchase of investments | (31,526 | ) | — | ||||
Sale of investments | 24,358 | — | |||||
Acquisitions, net of cash acquired | (21,472 | ) | — | ||||
Net cash used for investing activities | (43,180 | ) | (50,168 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from long-term debt | — | 15,500 | |||||
Repayment of long-term debt | (3,102 | ) | (43,633 | ) | |||
Repurchases of common stock | (49,399 | ) | (91,617 | ) | |||
Dividends paid | (34,336 | ) | (31,591 | ) | |||
Other | (4,557 | ) | 6,100 | ||||
Net cash used for financing activities | (91,394 | ) | (145,241 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | (1,819 | ) | 22 | ||||
Net increase in cash and cash equivalents | 104,740 | 12,901 | |||||
Cash and cash equivalents at beginning of period | 288,557 | 250,187 | |||||
Cash and cash equivalents at end of period | $ | 393,297 | $ | 263,088 | |||
CHAMPIONX CORPORATION
BUSINESS SEGMENT DATA
(UNAUDITED)
Three Months Ended | |||||||||||
June 30, | March 31, | June 30, | |||||||||
(in thousands) | 2024 | 2024 | 2023 | ||||||||
Segment revenue: | |||||||||||
Production Chemical Technologies | $ | 569,577 | $ | 590,108 | $ | 574,302 | |||||
Production & Automation Technologies | 244,487 | 252,614 | 254,156 | ||||||||
Drilling Technologies | 52,888 | 55,206 | 57,324 | ||||||||
Reservoir Chemical Technologies | 27,123 | 24,705 | 23,853 | ||||||||
Corporate and other | (803 | ) | (492 | ) | 16,965 | ||||||
Total revenue | $ | 893,272 | $ | 922,141 | $ | 926,600 | |||||
Income before income taxes: | |||||||||||
Segment operating profit (loss): | |||||||||||
Production Chemical Technologies | $ | 85,388 | $ | 87,832 | $ | 87,163 | |||||
Production & Automation Technologies | 22,207 | 28,470 | 33,208 | ||||||||
Drilling Technologies | 11,863 | 44,402 | 12,660 | ||||||||
Reservoir Chemical Technologies | 4,363 | 3,746 | 2,186 | ||||||||
Total segment operating profit | 123,821 | 164,450 | 135,217 | ||||||||
Corporate and other | 25,141 | 10,759 | 12,391 | ||||||||
Interest expense, net | 15,421 | 13,935 | 14,544 | ||||||||
Income before income taxes | $ | 83,259 | $ | 139,756 | $ | 108,282 | |||||
Operating profit margin / income before income taxes margin: | |||||||||||
Production Chemical Technologies | 15.0 | % | 14.9 | % | 15.2 | % | |||||
Production & Automation Technologies | 9.1 | % | 11.3 | % | 13.1 | % | |||||
Drilling Technologies | 22.4 | % | 80.4 | % | 22.1 | % | |||||
Reservoir Chemical Technologies | 16.1 | % | 15.2 | % | 9.2 | % | |||||
ChampionX Consolidated | 9.3 | % | 15.2 | % | 11.7 | % | |||||
Adjusted EBITDA | |||||||||||
Production Chemical Technologies | $ | 117,421 | $ | 118,031 | $ | 121,175 | |||||
Production & Automation Technologies | 58,848 | 60,340 | 60,641 | ||||||||
Drilling Technologies | 13,149 | 16,074 | 14,376 | ||||||||
Reservoir Chemical Technologies | 5,954 | 5,346 | 4,385 | ||||||||
Corporate and other | (12,139 | ) | (8,079 | ) | (9,896 | ) | |||||
Adjusted EBITDA | $ | 183,233 | $ | 191,712 | $ | 190,681 | |||||
Adjusted EBITDA margin | |||||||||||
Production Chemical Technologies | 20.6 | % | 20.0 | % | 21.1 | % | |||||
Production & Automation Technologies | 24.1 | % | 23.9 | % | 23.9 | % | |||||
Drilling Technologies | 24.9 | % | 29.1 | % | 25.1 | % | |||||
Reservoir Chemical Technologies | 22.0 | % | 21.6 | % | 18.4 | % | |||||
ChampionX Consolidated | 20.5 | % | 20.8 | % | 20.6 | % | |||||
CHAMPIONX CORPORATION
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
Three Months Ended | |||||||||||
June 30, | March 31, | June 30, | |||||||||
(in thousands) | 2024 | 2024 | 2023 | ||||||||
Net income attributable to ChampionX | $ | 52,569 | $ | 112,923 | $ | 95,797 | |||||
Pre-tax adjustments: | |||||||||||
(Gain) loss on sale leaseback transaction and disposal group (1) | — | (29,883 | ) | — | |||||||
Russia sanctions compliance and impacts (2) | 32 | 152 | 433 | ||||||||
Restructuring and other related charges | 7,927 | 1,709 | 5,353 | ||||||||
Merger transaction costs (3) | 15,059 | — | — | ||||||||
Acquisition costs and related adjustments (4) | 574 | 1,232 | (2,341 | ) | |||||||
Intellectual property defense | 531 | 779 | 687 | ||||||||
Tulsa, Oklahoma storm damage | — | 305 | 607 | ||||||||
Foreign currency transaction (gains) losses, net | (2,767 | ) | 55 | 4,439 | |||||||
Loss on Argentina Blue Chip Swap transaction | 2,994 | 4,092 | — | ||||||||
Tax impact of adjustments | (5,722 | ) | 5,066 | (2,041 | ) | ||||||
Adjusted net income attributable to ChampionX | 71,197 | 96,430 | 102,934 | ||||||||
Tax impact of adjustments | 5,722 | (5,066 | ) | 2,041 | |||||||
Net income attributable to noncontrolling interest | 2,822 | 237 | 829 | ||||||||
Depreciation and amortization | 60,203 | 59,580 | 58,677 | ||||||||
Provision for income taxes | 27,868 | 26,596 | 11,656 | ||||||||
Interest expense, net | 15,421 | 13,935 | 14,544 | ||||||||
Adjusted EBITDA | $ | 183,233 | $ | 191,712 | $ | 190,681 | |||||
(1) Amount represents the gain on the sale and leaseback of certain buildings and land for the three months ended March 31, 2024. | |||||||||||
(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 costs incurred in relation to the Merger Agreement with Schlumberger Limited, including third party legal and professional fees. | |||||||||||
(4) Includes costs incurred for the acquisition of businesses. For the historical period ended June 30, 2023, amounts represent revenue associated with the amortization of a liability established as part of the merger transaction with Ecolab Inc. (“Ecolab”) to acquire the Chemical Technologies business, representing unfavorable terms under the Cross Supply Agreement. | |||||||||||
Three Months Ended | |||||||||||
June 30, | March 31, | June 30, | |||||||||
(in thousands) | 2024 | 2024 | 2023 | ||||||||
Diluted earnings per share attributable to ChampionX | $ | 0.27 | $ | 0.58 | $ | 0.48 | |||||
Per share adjustments: | |||||||||||
(Gain) loss on sale leaseback transaction and disposal group | — | (0.15 | ) | — | |||||||
Russia sanctions compliance and impacts | — | — | — | ||||||||
Restructuring and other related charges | 0.04 | 0.01 | 0.03 | ||||||||
Merger transaction costs | 0.08 | — | — | ||||||||
Acquisition costs and related adjustments | — | 0.01 | (0.01 | ) | |||||||
Intellectual property defense | — | — | — | ||||||||
Tulsa, Oklahoma storm damage | — | — | — | ||||||||
Foreign currency transaction (gains) losses, net | (0.01 | ) | — | 0.02 | |||||||
Loss on Argentina Blue Chip Swap transaction | 0.02 | 0.02 | — | ||||||||
Tax impact of adjustments | (0.03 | ) | 0.03 | (0.01 | ) | ||||||
Adjusted diluted earnings per share attributable to ChampionX | $ | 0.37 | $ | 0.50 | $ | 0.51 | |||||
CHAMPIONX CORPORATION
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES BY SEGMENT
(UNAUDITED)
Three Months Ended | |||||||||||
June 30, | March 31, | June 30, | |||||||||
(in thousands) | 2024 | 2024 | 2023 | ||||||||
Production Chemical Technologies | |||||||||||
Segment operating profit | $ | 85,388 | $ | 87,832 | $ | 87,163 | |||||
Non-GAAP adjustments | 5,851 | 3,933 | 8,329 | ||||||||
Depreciation and amortization | 26,182 | 26,266 | 25,683 | ||||||||
Segment adjusted EBITDA | $ | 117,421 | $ | 118,031 | $ | 121,175 | |||||
Production & Automation Technologies | |||||||||||
Segment operating profit | $ | 22,207 | $ | 28,470 | $ | 33,208 | |||||
Non-GAAP adjustments | 6,000 | 2,076 | 1,012 | ||||||||
Depreciation and amortization | 30,641 | 29,794 | 26,421 | ||||||||
Segment adjusted EBITDA | $ | 58,848 | $ | 60,340 | $ | 60,641 | |||||
Drilling Technologies | |||||||||||
Segment operating profit | $ | 11,863 | $ | 44,402 | $ | 12,660 | |||||
Non-GAAP adjustments | — | (29,883 | ) | 212 | |||||||
Depreciation and amortization | 1,286 | 1,555 | 1,504 | ||||||||
Segment adjusted EBITDA | $ | 13,149 | $ | 16,074 | $ | 14,376 | |||||
Reservoir Chemical Technologies | |||||||||||
Segment operating profit | $ | 4,363 | $ | 3,746 | $ | 2,186 | |||||
Non-GAAP adjustments | 11 | 16 | 600 | ||||||||
Depreciation and amortization | 1,580 | 1,584 | 1,599 | ||||||||
Segment adjusted EBITDA | $ | 5,954 | $ | 5,346 | $ | 4,385 | |||||
Corporate and other | |||||||||||
Segment operating profit | $ | (40,562 | ) | $ | (24,694 | ) | $ | (26,935 | ) | ||
Non-GAAP adjustments | 12,488 | 2,299 | (975 | ) | |||||||
Depreciation and amortization | 514 | 381 | 3,470 | ||||||||
Interest expense, net | 15,421 | 13,935 | 14,544 | ||||||||
Segment adjusted EBITDA | $ | (12,139 | ) | $ | (8,079 | ) | $ | (9,896 | ) | ||
Free Cash Flow
Three Months Ended | |||||||||||
June 30, | March 31, | June 30, | |||||||||
(in thousands) | 2024 | 2024 | 2023 | ||||||||
Free Cash Flow | |||||||||||
Cash flows from operating activities | $ | 67,625 | $ | 173,508 | $ | 115,910 | |||||
Less: Capital expenditures, net of proceeds from sale of fixed assets | (29,310 | ) | (29,522 | ) | (27,143 | ) | |||||
Free cash flow | $ | 38,315 | $ | 143,986 | $ | 88,767 | |||||
Cash From Operating Activities to Revenue Ratio | |||||||||||
Cash flows from operating activities | $ | 67,625 | $ | 173,508 | $ | 115,910 | |||||
Revenue | $ | 893,272 | $ | 922,141 | $ | 926,600 | |||||
Cash from operating activities to revenue ratio | 8 | % | 19 | % | 13 | % | |||||
Free Cash Flow to Revenue Ratio | |||||||||||
Free cash flow | $ | 38,315 | $ | 143,986 | $ | 88,767 | |||||
Revenue | $ | 893,272 | $ | 922,141 | $ | 926,600 | |||||
Free cash flow to revenue ratio | 4 | % | 16 | % | 10 | % | |||||
Free Cash Flow to Adjusted EBITDA Ratio | |||||||||||
Free cash flow | $ | 38,315 | $ | 143,986 | $ | 88,767 | |||||
Adjusted EBITDA | $ | 183,233 | $ | 191,712 | $ | 190,681 | |||||
Free cash flow to adjusted EBITDA ratio | 21 | % | 75 | % | 47 | % | |||||
![](https://ml.globenewswire.com/media/YTZkMTNiZTYtZTY5ZS00NTg4LThmZWMtYjBmNTkwYTAyYmU4LTExMTE2ODI=/tiny/ChampionX-Corporation.png)
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