NCS Multistage Holdings, Inc. Announces Fourth Quarter and Full Year 2024 Results
NCS Multistage Holdings (NCSM) reported strong financial results for Q4 and full year 2024. Fourth quarter highlights include revenues of $45.0 million (up 28% year-over-year), net income of $3.5 million, and Adjusted EBITDA of $8.2 million.
Full year 2024 performance showed:
- Total revenues of $162.6 million, increasing 14% from 2023
- Gross margin improved to 40% from 37%
- Net income of $6.6 million ($2.55 per diluted share)
- Record international revenues of $16.5 million (10% of total revenue)
- Cash flows from operating activities of $12.7 million
The company ended 2024 with strong liquidity, reporting $25.9 million in cash and $8.1 million in total debt. For 2025, NCS expects stable or increased activity in Canada, modest decline in U.S. market, and potential growth in international markets including North Sea, Middle East, and Argentina.
NCS Multistage Holdings (NCSM) ha riportato risultati finanziari solidi per il quarto trimestre e per l'intero anno 2024. Le principali novità del quarto trimestre includono ricavi di 45,0 milioni di dollari (in aumento del 28% rispetto all'anno precedente), un utile netto di 3,5 milioni di dollari e un EBITDA rettificato di 8,2 milioni di dollari.
Le performance dell'intero anno 2024 hanno mostrato:
- Ricavi totali di 162,6 milioni di dollari, con un aumento del 14% rispetto al 2023
- Margine lordo migliorato al 40% rispetto al 37%
- Utile netto di 6,6 milioni di dollari (2,55 dollari per azione diluita)
- Ricavi internazionali record di 16,5 milioni di dollari (10% dei ricavi totali)
- Flussi di cassa dalle attività operative di 12,7 milioni di dollari
L'azienda ha chiuso il 2024 con liquidità forte, riportando 25,9 milioni di dollari in contante e 8,1 milioni di dollari in debito totale. Per il 2025, NCS prevede un'attività stabile o in aumento in Canada, un lieve calo nel mercato statunitense e una potenziale crescita nei mercati internazionali, inclusi il Mare del Nord, il Medio Oriente e l'Argentina.
NCS Multistage Holdings (NCSM) reportó resultados financieros sólidos para el cuarto trimestre y para todo el año 2024. Los aspectos destacados del cuarto trimestre incluyen ingresos de 45,0 millones de dólares (un aumento del 28% interanual), un ingreso neto de 3,5 millones de dólares y un EBITDA ajustado de 8,2 millones de dólares.
El rendimiento del año completo 2024 mostró:
- Ingresos totales de 162,6 millones de dólares, un aumento del 14% respecto a 2023
- El margen bruto mejoró al 40% desde el 37%
- Ingreso neto de 6,6 millones de dólares (2,55 dólares por acción diluida)
- Ingresos internacionales récord de 16,5 millones de dólares (10% de los ingresos totales)
- Flujos de efectivo de actividades operativas de 12,7 millones de dólares
La empresa terminó 2024 con liquidez sólida, reportando 25,9 millones de dólares en efectivo y 8,1 millones de dólares en deuda total. Para 2025, NCS espera una actividad estable o en aumento en Canadá, un leve descenso en el mercado estadounidense, y un crecimiento potencial en mercados internacionales, incluidos el Mar del Norte, Medio Oriente y Argentina.
NCS 멀티스테이지 홀딩스(NCSM)는 2024년 4분기 및 전체 연도에 대한 강력한 재무 결과를 보고했습니다. 4분기 하이라이트에는 4,500만 달러의 수익(전년 대비 28% 증가), 350만 달러의 순이익, 820만 달러의 조정 EBITDA가 포함됩니다.
2024년 전체 성과는 다음과 같습니다:
- 2023년 대비 14% 증가한 총 수익 1억 6,260만 달러
- 총 마진이 37%에서 40%로 개선됨
- 순이익 660만 달러(희석 주당 2.55달러)
- 총 수익의 10%인 1,650만 달러의 국제 수익 기록
- 운영 활동으로부터의 현금 흐름 1,270만 달러
회사는 2024년을 강력한 유동성으로 마감하며, 2,590만 달러의 현금과 810만 달러의 총 부채를 보고했습니다. 2025년에는 NCS가 캐나다에서 안정적이거나 증가된 활동을 기대하고, 미국 시장에서의 소폭 감소와 북해, 중동 및 아르헨티나를 포함한 국제 시장에서의 잠재적 성장을 예상하고 있습니다.
NCS Multistage Holdings (NCSM) a annoncé des résultats financiers solides pour le quatrième trimestre et pour l'année entière 2024. Les faits marquants du quatrième trimestre incluent des revenus de 45,0 millions de dollars (en hausse de 28 % par rapport à l'année précédente), un bénéfice net de 3,5 millions de dollars et un EBITDA ajusté de 8,2 millions de dollars.
La performance de l'année complète 2024 a montré :
- Des revenus totaux de 162,6 millions de dollars, en hausse de 14 % par rapport à 2023
- La marge brute s'est améliorée à 40 % contre 37 %
- Bénéfice net de 6,6 millions de dollars (2,55 dollars par action diluée)
- Des revenus internationaux record de 16,5 millions de dollars (10 % des revenus totaux)
- Des flux de trésorerie provenant des activités opérationnelles de 12,7 millions de dollars
L'entreprise a terminé 2024 avec une liquidité solide, rapportant 25,9 millions de dollars en espèces et 8,1 millions de dollars de dette totale. Pour 2025, NCS s'attend à une activité stable ou en augmentation au Canada, à un léger déclin sur le marché américain et à une croissance potentielle sur les marchés internationaux, y compris la mer du Nord, le Moyen-Orient et l'Argentine.
NCS Multistage Holdings (NCSM) hat starke finanzielle Ergebnisse für das vierte Quartal und das gesamte Jahr 2024 gemeldet. Die Höhepunkte des vierten Quartals umfassen Einnahmen von 45,0 Millionen Dollar (ein Anstieg von 28% im Vergleich zum Vorjahr), einen Nettogewinn von 3,5 Millionen Dollar und ein bereinigtes EBITDA von 8,2 Millionen Dollar.
Die Leistung im gesamten Jahr 2024 zeigte:
- Gesamteinnahmen von 162,6 Millionen Dollar, was einem Anstieg von 14% im Vergleich zu 2023 entspricht
- Bruttomarge verbesserte sich von 37% auf 40%
- Nettogewinn von 6,6 Millionen Dollar (2,55 Dollar pro verwässerter Aktie)
- Rekordeinnahmen aus dem Ausland von 16,5 Millionen Dollar (10% der Gesamteinnahmen)
- Cashflows aus der operativen Tätigkeit von 12,7 Millionen Dollar
Das Unternehmen beendete 2024 mit starker Liquidität und berichtete über 25,9 Millionen Dollar in bar und 8,1 Millionen Dollar an Gesamtverschuldung. Für 2025 erwartet NCS stabile oder steigende Aktivitäten in Kanada, einen moderaten Rückgang im US-Markt und potenzielles Wachstum in internationalen Märkten, einschließlich der Nordsee, des Nahen Ostens und Argentiniens.
- Revenue increased 28% YoY in Q4 2024 to $45.0 million
- Full year revenue grew 14% to $162.6 million
- Adjusted EBITDA margin improved to 18% in Q4 2024 from 7% in Q4 2023
- Record international revenues reaching 10% of total revenue
- Net cash position increased by $9.2 million to $17.7 million
- Free cash flow improved by $7.3 million to $9.9 million
- Gross margin improved to 40% from 37% in 2023
- Expected modest decline in U.S. market activity for 2025
- Potential negative impact on 2025 revenue due to strengthening U.S. dollar vs Canadian dollar
- Increased SG&A expenses due to higher annual incentive bonus accrual
Insights
NCS Multistage Holdings delivered exceptional financial performance in Q4 and full-year 2024, substantially outperforming 2023 results across all key metrics. Q4 revenues surged
The company's profitability metrics show remarkable improvement: Q4 Adjusted EBITDA jumped to
NCS's international expansion strategy is delivering tangible results, with international revenues reaching a record
The company's balance sheet strength is evident with
While management expects regional variations in 2025 activity levels, they anticipate outperforming underlying industry growth across all markets, though potential currency headwinds from a stronger USD could impact reported results given that
NCS Multistage's results demonstrate a successful execution of their strategic initiatives to expand internationally while enhancing profitability. The
The company's gross margin expansion to
Their ability to generate
NCS's net cash position of
While management's cautious outlook regarding currency headwinds and regional activity variations warrants attention, their projected outperformance relative to underlying market growth indicates confidence in their competitive positioning and ability to continue gaining market share through innovative product offerings.
Fourth Quarter Results
- Total revenues of
$45.0 million , a28% year-over-year improvement - Net income of
$3.5 million and earnings per diluted share of$1.32 , an improvement to the prior year period after adjusting for the non-cash benefit of legal settlement from one year ago - Adjusted EBITDA of
$8.2 million , compared to$2.5 million in the fourth quarter of 2023 $25.9 million in cash and$8.1 million in debt as of December 31, 2024
Full Year Results
- Total revenues of
$162.6 million , a14% improvement over 2023 - Gross margin improved to
40% from37% in 2023; Adjusted gross margin improved to41% from39% in 2023 - Net income of
$6.6 million and earnings per diluted share of$2.55 , an improvement to the net loss of$(3.2) million and loss per share of$(1.27) in 2023 - Adjusted EBITDA of
$22.3 million , compared to$11.9 million in 2023 - Cash flows from operating activities of
$12.7 million , an increase of$7.9 million compared to 2023; Free cash flow after distributions to non-controlling interest of$9.9 million , an increase of$7.3 million compared to 2023
HOUSTON, March 10, 2025 (GLOBE NEWSWIRE) -- NCS Multistage Holdings, Inc. (Nasdaq: NCSM) (the “Company,” “NCS,” “we” or “us”), a leading provider of highly engineered products and support services that facilitate the optimization of oil and natural gas well construction, well completions and field development strategies, today announced its results for the quarter and year ended December 31, 2024.
Review and Outlook
NCS’s Chief Executive Officer, Ryan Hummer commented, “2024 was an important year for NCS, as we began to truly deliver on our core strategies to build upon our leading market positions, capitalize on international and offshore opportunities and commercialize innovative solutions to complex customer challenges.
Our success in this challenging market reflects the value that we bring to our customers across our product and service portfolio. By delivering on our core strategies, we are providing extraordinary outcomes to our customers, driving innovation in the industry and creating value for our shareholders.
I’m very proud of what our team accomplished in 2024. Our full year revenue of
We demonstrated improved operating leverage through higher gross margins and a consistent focus on managing operating expenses. As a result, our 2024 Adjusted EBITDA of
With a strong close to 2024, our full-year free cash flow after distributions to non-controlling interest reached
Looking ahead to 2025, industry forecasts and announced capital budgets from E&P companies indicate varying regional trends in drilling and completion activity. In Canada, we anticipate activity levels to remain stable or increase marginally compared to 2024, while the U.S. market is expected to experience a modest decline in activity. While overall industry spending in international markets may be relatively flat, certain markets that NCS participates in, including the North Sea, the Middle East and Argentina, could experience increases in activity and spending.
We expect our revenue to outperform underlying industry growth in each of Canada, the United States and international markets in 2025 when measured in local currencies. As our Canadian business represents over
I am excited for 2025 as we build upon the meaningful progress made during 2024. I want to express my continued thanks to our team at NCS and Repeat Precision. Our achievements and the opportunities in front of us are reflective of the talent, effort and dedication of our outstanding teams.”
Financial Review
Fourth Quarter 2024 Financial Results
Total revenues were
Sequentially, total revenues increased by
Gross profit was
Selling, general and administrative (“SG&A”) expenses totaled
Other income was
Net income was
Adjusted EBITDA was
Full Year 2024 Financial Results
For the year ended December 31, 2024, total revenues were
SG&A expenses totaled
Net income was
Cash flows from operating activities for the year ended December 31, 2024 was
Liquidity and Capital Expenditures
As of December 31, 2024, NCS had
Our working capital, defined as current assets minus current liabilities, was
NCS incurred capital expenditures, net of proceeds from the sale of property and equipment, of
EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EBITDA Less Share-Based Compensation, Adjusted Net Income (Loss), Adjusted Earnings (Loss) per Diluted Share, Adjusted Gross Profit, Adjusted Gross Margin, Free Cash Flow, Free Cash Flow Less Distributions to Non-Controlling Interest and Net Working Capital are non-GAAP financial measures. For an explanation of these measures and a reconciliation, refer to “Non-GAAP Financial Measures” below.
Conference Call
The Company will host a conference call to discuss its fourth quarter and full year 2024 results and updated guidance on Tuesday, March 11, 2025 at 7:30 a.m. Central Time (8:30 a.m. Eastern Time). The conference call will be available via a live audio webcast. Participants who wish to ask questions may register for the call here to receive the dial-in numbers and unique PIN. If you wish to join the conference call but do not plan to ask questions, you may join the listen-only webcast here. The live webcast can also be accessed by visiting the Investors section of the Company’s website at ir.ncsmultistage.com. It is recommended that participants join at least 10 minutes prior to the event start.
The replay will be available in the Investors section of the Company’s website shortly after the conclusion of the call and will remain available for approximately seven days.
About NCS Multistage Holdings, Inc.
NCS Multistage Holdings, Inc. is a leading provider of highly engineered products and support services that facilitate the optimization of oil and natural gas well construction, well completions and field development strategies. NCS provides products and services primarily to exploration and production companies for use in onshore and offshore wells, predominantly wells that have been drilled with horizontal laterals in both unconventional and conventional oil and natural gas formations. NCS’s products and services are utilized in oil and natural gas basins throughout North America and in selected international markets, including the North Sea, the Middle East, Argentina and China. NCS’s common stock is traded on the Nasdaq Capital Market under the symbol “NCSM.” Additional information is available on the website, www.ncsmultistage.com.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects” and similar references to future periods, or by the inclusion of forecasts or projections. Examples of forward-looking statements include, but are not limited to, statements we make regarding the outlook for our future business and financial performance. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, our actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause our actual results to differ materially from those in the forward-looking statements include regional, national or global political, economic, business, competitive, market and regulatory conditions and the following: declines in the level of oil and natural gas exploration and production activity in Canada, the United States and internationally; oil and natural gas price fluctuations; significant competition for our products and services that results in pricing pressures, reduced sales, or reduced market share; inability to successfully implement our strategy of increasing sales of products and services into the U.S. and international markets; loss of significant customers; losses and liabilities from uninsured or underinsured business activities and litigation; change in trade policy, including the impact of tariffs; our failure to identify and consummate potential acquisitions; the financial health of our customers including their ability to pay for products or services provided; our inability to integrate or realize the expected benefits from acquisitions; our inability to achieve suitable price increases to offset the impacts of cost inflation; loss of any of our key suppliers or significant disruptions negatively impacting our supply chain; risks in attracting and retaining qualified employees and key personnel; risks resulting from the operations of our joint venture arrangement; currency exchange rate fluctuations; impact of severe weather conditions; our inability to accurately predict customer demand, which may result in us holding excess or obsolete inventory; failure to comply with or changes to federal, state and local and non-U.S. laws and other regulations, including anti-corruption and environmental regulations, guidelines and regulations for the use of explosives; impairment in the carrying value of long-lived assets including goodwill; system interruptions or failures, including complications with our enterprise resource planning system, cybersecurity breaches, identity theft or other disruptions that could compromise our information; our inability to successfully develop and implement new technologies, products and services that align with the needs of our customers, including addressing the shift to more non-traditional energy markets as part of the energy transition and the adoption of artificial intelligence and machine learning; our inability to protect and maintain critical intellectual property assets, the inability to protect our current royalty income, or the losses and liabilities from adverse decisions in intellectual property disputes; loss of, or interruption to, our information and computer systems; our failure to establish and maintain effective internal control over financial reporting; restrictions on the availability of our customers to obtain water essential to the drilling and hydraulic fracturing processes; changes in legislation or regulation governing the oil and natural gas industry, including restrictions on emissions of greenhouse gases; our inability to meet regulatory requirements for use of certain chemicals by our tracer diagnostics business; the reduction in our ABL Facility borrowing base or our inability to comply with the covenants in our debt agreements; and our inability to obtain sufficient liquidity on reasonable terms, or at all and other factors discussed or referenced in our filings made from time to time with the Securities and Exchange Commission. Any forward-looking statement made by us in this press release speaks only as of the date on which we make it. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
Contact
Mike Morrison
Chief Financial Officer and Treasurer
(281) 453-2222
IR@ncsmultistage.com
| NCS MULTISTAGE HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) | ||||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||
| Revenues | ||||||||||||||||
| Product sales | $ | 30,591 | $ | 24,298 | $ | 113,046 | $ | 100,447 | ||||||||
| Services | 14,412 | 10,949 | 49,511 | 42,024 | ||||||||||||
| Total revenues | 45,003 | 35,247 | 162,557 | 142,471 | ||||||||||||
| Cost of sales | ||||||||||||||||
| Cost of product sales, exclusive of depreciation and amortization expense shown below | 19,137 | 16,297 | 70,446 | 64,242 | ||||||||||||
| Cost of services, exclusive of depreciation and amortization expense shown below | 6,479 | 6,062 | 24,650 | 22,626 | ||||||||||||
| Total cost of sales, exclusive of depreciation and amortization expense shown below | 25,616 | 22,359 | 95,096 | 86,868 | ||||||||||||
| Selling, general and administrative expenses | 15,031 | 13,221 | 57,820 | 56,518 | ||||||||||||
| Depreciation | 1,205 | 1,055 | 4,600 | 3,947 | ||||||||||||
| Amortization | 214 | 167 | 716 | 669 | ||||||||||||
| Income (loss) from operations | 2,937 | (1,555 | ) | 4,325 | (5,531 | ) | ||||||||||
| Other income (expense) | ||||||||||||||||
| Interest expense, net | (91 | ) | (139 | ) | (414 | ) | (586 | ) | ||||||||
| Provision for litigation, net of recoveries | — | 40,696 | — | (1,802 | ) | |||||||||||
| Other income, net | 2,443 | 361 | 7,306 | 4,114 | ||||||||||||
| Foreign currency exchange (loss) gain | (2,175 | ) | 541 | (2,963 | ) | 462 | ||||||||||
| Total other income | 177 | 41,459 | 3,929 | 2,188 | ||||||||||||
| Income (loss) before income tax | 3,114 | 39,904 | 8,254 | (3,343 | ) | |||||||||||
| Income tax (benefit) expense | (606 | ) | 55 | 116 | (232 | ) | ||||||||||
| Net income (loss) | 3,720 | 39,849 | 8,138 | (3,111 | ) | |||||||||||
| Net income attributable to non-controlling interest | 249 | 210 | 1,545 | 42 | ||||||||||||
| Net income (loss) attributable to NCS Multistage Holdings, Inc. | $ | 3,471 | $ | 39,639 | $ | 6,593 | $ | (3,153 | ) | |||||||
| Earnings (loss) per common share | ||||||||||||||||
| Basic earnings (loss) per common share attributable to NCS Multistage Holdings, Inc. | $ | 1.36 | $ | 15.96 | $ | 2.60 | $ | (1.27 | ) | |||||||
| Diluted earnings (loss) per common share attributable to NCS Multistage Holdings, Inc. | $ | 1.32 | $ | 15.80 | $ | 2.55 | $ | (1.27 | ) | |||||||
| Weighted average common shares outstanding | ||||||||||||||||
| Basic | 2,551 | 2,484 | 2,539 | 2,473 | ||||||||||||
| Diluted | 2,628 | 2,509 | 2,590 | 2,473 | ||||||||||||
| NCS MULTISTAGE HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share data) | ||||||||
| December 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 25,880 | $ | 16,720 | ||||
| Accounts receivable—trade, net | 31,513 | 23,981 | ||||||
| Inventories, net | 40,971 | 41,612 | ||||||
| Prepaid expenses and other current assets | 2,063 | 1,862 | ||||||
| Other current receivables | 5,143 | 4,042 | ||||||
| Insurance receivable | — | 15,000 | ||||||
| Total current assets | 105,570 | 103,217 | ||||||
| Noncurrent assets | ||||||||
| Property and equipment, net | 21,283 | 23,336 | ||||||
| Goodwill | 15,222 | 15,222 | ||||||
| Identifiable intangibles, net | 3,690 | 4,407 | ||||||
| Operating lease assets | 5,911 | 4,847 | ||||||
| Deposits and other assets | 712 | 937 | ||||||
| Deferred income taxes, net | 424 | 66 | ||||||
| Total noncurrent assets | 47,242 | 48,815 | ||||||
| Total assets | $ | 152,812 | $ | 152,032 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable—trade | $ | 8,970 | $ | 6,227 | ||||
| Accrued expenses | 8,351 | 3,702 | ||||||
| Income taxes payable | 683 | 364 | ||||||
| Operating lease liabilities | 1,602 | 1,583 | ||||||
| Accrual for legal contingencies | — | 15,000 | ||||||
| Current maturities of long-term debt | 2,141 | 1,812 | ||||||
| Other current liabilities | 3,672 | 3,370 | ||||||
| Total current liabilities | 25,419 | 32,058 | ||||||
| Noncurrent liabilities | ||||||||
| Long-term debt, less current maturities | 6,001 | 6,344 | ||||||
| Operating lease liabilities, long-term | 4,891 | 3,775 | ||||||
| Other long-term liabilities | 206 | 213 | ||||||
| Deferred income taxes, net | 186 | 249 | ||||||
| Total noncurrent liabilities | 11,284 | 10,581 | ||||||
| Total liabilities | 36,703 | 42,639 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity | ||||||||
| Preferred stock, | — | — | ||||||
| Common stock, | 26 | 25 | ||||||
| Additional paid-in capital | 447,384 | 444,638 | ||||||
| Accumulated other comprehensive loss | (87,604 | ) | (85,752 | ) | ||||
| Retained deficit | (259,024 | ) | (265,617 | ) | ||||
| Treasury stock, at cost; 56,549 shares at December 31, 2024 and 39,052 shares at December 31, 2023 | (1,943 | ) | (1,676 | ) | ||||
| Total stockholders’ equity | 98,839 | 91,618 | ||||||
| Non-controlling interest | 17,270 | 17,775 | ||||||
| Total equity | 116,109 | 109,393 | ||||||
| Total liabilities and stockholders' equity | $ | 152,812 | $ | 152,032 | ||||
| NCS MULTISTAGE HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) | ||||||||
| Year Ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| (Unaudited) | ||||||||
| Cash flows from operating activities | ||||||||
| Net income (loss) | $ | 8,138 | $ | (3,111 | ) | |||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 5,316 | 4,616 | ||||||
| Amortization of deferred loan cost | 208 | 204 | ||||||
| Share-based compensation | 5,213 | 5,365 | ||||||
| Provision for inventory obsolescence | 1,136 | 1,235 | ||||||
| Deferred income tax (benefit) expense | (380 | ) | 152 | |||||
| (Gain) loss on sale of property and equipment | (506 | ) | 258 | |||||
| Provision for credit losses | 41 | 162 | ||||||
| Net foreign currency unrealized loss (gain) | 2,365 | (485 | ) | |||||
| Proceeds from note receivable | 61 | 546 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable—trade | (9,154 | ) | 3,856 | |||||
| Inventories, net | (2,806 | ) | (5,763 | ) | ||||
| Prepaid expenses and other assets | (1,087 | ) | 2,563 | |||||
| Accounts payable—trade | 2,706 | (1,203 | ) | |||||
| Accrued expenses | 4,841 | (649 | ) | |||||
| Other liabilities | (3,401 | ) | (2,763 | ) | ||||
| Income taxes receivable/payable | 34 | (209 | ) | |||||
| Net cash provided by operating activities | 12,725 | 4,774 | ||||||
| Cash flows from investing activities | ||||||||
| Purchases of property and equipment | (1,309 | ) | (1,882 | ) | ||||
| Purchase and development of software and technology | (70 | ) | (310 | ) | ||||
| Proceeds from sales of property and equipment | 592 | 509 | ||||||
| Proceeds from company-owned life insurance policy | 1,266 | — | ||||||
| Net cash provided by (used in) investing activities | 479 | (1,683 | ) | |||||
| Cash flows from financing activities | ||||||||
| Payments on finance leases | (1,952 | ) | (1,598 | ) | ||||
| Line of credit borrowings | 3,062 | 11,702 | ||||||
| Payments of line of credit borrowings | (3,062 | ) | (11,758 | ) | ||||
| Treasury shares withheld | (267 | ) | (287 | ) | ||||
| Distribution to non-controlling interest | (2,050 | ) | (500 | ) | ||||
| Net cash used in financing activities | (4,269 | ) | (2,441 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | 225 | (164 | ) | |||||
| Net change in cash and cash equivalents | 9,160 | 486 | ||||||
| Cash and cash equivalents beginning of period | 16,720 | 16,234 | ||||||
| Cash and cash equivalents end of period | $ | 25,880 | $ | 16,720 | ||||
| Noncash investing and financing activities | ||||||||
| Assets obtained in exchange for new finance lease liabilities | 2,263 | 1,972 | ||||||
| Assets obtained in exchange for new operating lease liabilities | 3,056 | 1,780 | ||||||
| NCS MULTISTAGE HOLDINGS, INC. REVENUES BY GEOGRAPHIC AREA (In thousands) (Unaudited) | ||||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| United States | ||||||||||||||||
| Product sales | $ | 8,276 | $ | 6,411 | $ | 34,082 | $ | 26,613 | ||||||||
| Services | 2,440 | 2,695 | 9,570 | 11,206 | ||||||||||||
| Total United States | 10,716 | 9,106 | 43,652 | 37,819 | ||||||||||||
| Canada | ||||||||||||||||
| Product sales | 21,576 | 17,884 | 74,654 | 71,946 | ||||||||||||
| Services | 8,267 | 7,087 | 27,781 | 26,161 | ||||||||||||
| Total Canada | 29,843 | 24,971 | 102,435 | 98,107 | ||||||||||||
| Other Countries | ||||||||||||||||
| Product sales | 739 | 3 | 4,310 | 1,888 | ||||||||||||
| Services | 3,705 | 1,167 | 12,160 | 4,657 | ||||||||||||
| Total other countries | 4,444 | 1,170 | 16,470 | 6,545 | ||||||||||||
| Total | ||||||||||||||||
| Product sales | 30,591 | 24,298 | 113,046 | 100,447 | ||||||||||||
| Services | 14,412 | 10,949 | 49,511 | 42,024 | ||||||||||||
| Total revenues | $ | 45,003 | $ | 35,247 | $ | 162,557 | $ | 142,471 | ||||||||
NCS MULTISTAGE HOLDINGS, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
(In thousands, except per share data)
(Unaudited)
Non-GAAP Financial Measures
EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EBITDA Less Share-Based Compensation, Adjusted Net Income (Loss), Adjusted Earnings (Loss) per Diluted Share, Adjusted Gross Profit, Adjusted Gross Margin, Free Cash Flow, Free Cash Flow Less Distributions to Non-Controlling Interest and Net Working Capital (our “non-GAAP financial measures”) are not defined under generally accepted accounting principles (“GAAP”), are not measures of net income (loss), income (loss) from operations, gross profit and gross margin (inclusive of DD&A), cash provided by (used in) operating activities, working capital or any other performance measure derived in accordance with GAAP, and are subject to important limitations. Our non-GAAP financial measures may not be comparable to similarly titled measures of other companies in our industry and are not measures of performance calculated in accordance with GAAP. Our non-GAAP financial measures have important limitations as analytical tools and you should not consider them in isolation or as substitutes for analysis of our financial performance as reported under GAAP, and they should not be considered as alternatives to net income (loss), income (loss) from operations, gross profit, gross margin, cash provided by (used in) operating activities, working capital or any other performance measures derived in accordance with GAAP as measures of operating performance or as alternatives to cash flow from operating activities as measures of our liquidity.
However, EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EBITDA Less Share-Based Compensation, Adjusted Net Income (Loss), Adjusted Earnings (Loss) per Diluted Share, Adjusted Gross Profit, Adjusted Gross Margin, Free Cash Flow, Free Cash Flow Less Distributions to Non-Controlling Interest and Net Working Capital are key metrics that management uses to assess the period-to-period performance of our core business operations or metrics that enable investors to assess our performance from period to period relative to the performance of other companies that are not subject to such factors, or who may provide similar non-GAAP measures in their public disclosures.
The tables below set forth reconciliations of our non-GAAP financial measures to the most directly comparable measures of financial performance calculated under GAAP:
NET WORKING CAPITAL
Net working capital is defined as total current assets, excluding cash and cash equivalents, minus total current liabilities, excluding current maturities of long-term debt. Net working capital excludes cash and cash equivalents and current maturities of long-term debt in order to evaluate the investments in working capital that we believe are required to support our business. We believe that net working capital is useful in analyzing the cash flow and working capital needs of the Company, including determining the efficiencies of our operations and our ability to readily convert assets into cash.
| December 31, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Working capital | $ | 80,151 | $ | 71,159 | ||||
| Cash and cash equivalents | (25,880 | ) | (16,720 | ) | ||||
| Current maturities of long-term debt | 2,141 | 1,812 | ||||||
| Net working capital | $ | 56,412 | $ | 56,251 | ||||
NCS MULTISTAGE HOLDINGS, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
(In thousands, except per share data)
(Unaudited)
ADJUSTED GROSS PROFIT AND ADJUSTED GROSS MARGIN
Adjusted gross profit is defined as total revenues minus cost of sales, exclusive of depreciation and amortization expense, which we present as a separate line item in our statement of operations. Adjusted gross margin represents adjusted gross profit as a percentage of total revenues.
| Three Months Ended | Year Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Total revenues | $ | 45,003 | $ | 35,247 | $ | 162,557 | $ | 142,471 | ||||||||
| Total cost of sales, exclusive of depreciation and amortization expense | 25,616 | 22,359 | 95,096 | 86,868 | ||||||||||||
| Total depreciation and amortization associated with cost of sales | 709 | 604 | 2,677 | 2,205 | ||||||||||||
| Gross Profit | $ | 18,678 | $ | 12,284 | $ | 64,784 | $ | 53,398 | ||||||||
| Gross Margin | 42 | % | 35 | % | 40 | % | 37 | % | ||||||||
| Exclude total depreciation and amortization associated with cost of sales | (709 | ) | (604 | ) | (2,677 | ) | (2,205 | ) | ||||||||
| Adjusted Gross Profit | $ | 19,387 | $ | 12,888 | $ | 67,461 | $ | 55,603 | ||||||||
| Adjusted Gross Margin | 43 | % | 37 | % | 41 | % | 39 | % | ||||||||
ADJUSTED NET INCOME (LOSS) AND ADJUSTED EARNINGS (LOSS) PER DILUTED SHARE
Adjusted net income (loss) is defined as net income (loss) attributable to NCS Multistage Holdings, Inc. adjusted to exclude certain items which we believe are not reflective of ongoing performance. Adjusted earnings (loss) per diluted share is defined as adjusted net income (loss) divided by our diluted weighted average common shares outstanding during the relevant period.
| Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||
| December 31, 2024 | December 31, 2023 | December 31, 2024 | December 31, 2023 | |||||||||||||||||||||||||||||
| Effect on Net Income | Impact on Diluted Earnings Per Share | Effect on Net Income (Loss) | Impact on Diluted Earnings (Loss) Per Share | Effect on Net Income | Impact on Diluted Earnings Per Share | Effect on Net Loss | Impact on Diluted Loss Per Share | |||||||||||||||||||||||||
| Net income (loss) attributable to NCS Multistage Holdings, Inc. | $ | 3,471 | $ | 1.32 | $ | 39,639 | $ | 15.80 | $ | 6,593 | $ | 2.55 | $ | (3,153 | ) | $ | (1.27 | ) | ||||||||||||||
| Adjustments | ||||||||||||||||||||||||||||||||
| Provision for litigation, net of recoveries (a) | — | — | (40,696 | ) | (16.22 | ) | — | — | 1,802 | 0.73 | ||||||||||||||||||||||
| Write-off of constructed asset (b) | — | — | 652 | 0.26 | — | — | 652 | 0.26 | ||||||||||||||||||||||||
| Realized and unrealized foreign currency (gain) loss (c) | 2,095 | 0.80 | (546 | ) | (0.22 | ) | 2,774 | 1.07 | (414 | ) | (0.17 | ) | ||||||||||||||||||||
| Income tax impact from adjustments (d) | 408 | 0.15 | 57 | 0.02 | (39 | ) | (0.02 | ) | (141 | ) | (0.06 | ) | ||||||||||||||||||||
| Adjusted net income (loss) attributable to NCS Multistage Holdings, Inc. | $ | 5,974 | $ | 2.27 | $ | (894 | ) | $ | (0.36 | ) | $ | 9,328 | $ | 3.60 | $ | (1,254 | ) | $ | (0.51 | ) | ||||||||||||
__________________
| (a) | Represents litigation provision primarily associated with legal matters in Texas and Canada. In the fourth quarter of 2023, we settled a matter in Texas that resulted in the reversal of an accrual from earlier in the year of |
| (b) | Represents write-off of a constructed asset which was deemed to have no further service potential in December 2023. |
| (c) | Represents realized and unrealized foreign currency exchange gains and losses attributable to NCS Multistage Holdings, Inc. primarily due to movement in the foreign currency exchange rates during the applicable periods. |
| (d) | Represents income tax impacts based on applicable effective tax rates. |
NCS MULTISTAGE HOLDINGS, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
(In thousands)
(Unaudited)
EBITDA, ADJUSTED EBITDA, ADJUSTED EBITDA MARGIN, AND ADJUSTED EBITDA LESS SHARE-BASED COMPENSATION
EBITDA is defined as net income (loss) before interest expense, net, income tax expense and depreciation and amortization. Adjusted EBITDA is defined as EBITDA adjusted to exclude certain items which we believe are not reflective of ongoing operating performance or which, in the case of share-based compensation, is non-cash in nature. Adjusted EBITDA Margin represents Adjusted EBITDA as a percentage of total revenues. Adjusted EBITDA Less Share-Based Compensation is defined as Adjusted EBITDA minus share-based compensation expense. We believe that Adjusted EBITDA is an important measure that excludes costs that management believes do not reflect our ongoing operating performance, legal proceedings for intellectual property as further described below, and certain costs associated with our capital structure. We believe that Adjusted EBITDA Less Share-Based Compensation presents our financial performance in a manner that is comparable to the presentation provided by many of our peers.
We periodically incur legal costs associated with the assertion of, or defense of, intellectual property, which we exclude from our definition of Adjusted EBITDA and Adjusted EBITDA Less Share-Based Compensation, unless we believe that settlement will occur prior to any material legal spend (included in the table below as “Professional Fees”). Although these costs may recur between periods, depending on legal matters then outstanding or in process, we believe the timing of when these costs are incurred does not typically match the settlement or recoveries associated with such matters, and therefore, can distort our operating results. Similarly, we exclude from Adjusted EBITDA and Adjusted EBITDA Less Share-Based Compensation the one-time settlement or recovery payment associated with these excluded legal matters when realized but would not exclude any go forward royalties or payments, if applicable. We expect to continue to incur these legal costs for current matters under appeal and for any future cases that may go to trial, provided that the amount will vary by period.
| Three Months Ended | Year Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Net income (loss) | $ | 3,720 | $ | 39,849 | $ | 8,138 | $ | (3,111 | ) | |||||||
| Income tax (benefit) expense | (606 | ) | 55 | 116 | (232 | ) | ||||||||||
| Interest expense, net | 91 | 139 | 414 | 586 | ||||||||||||
| Depreciation | 1,205 | 1,055 | 4,600 | 3,947 | ||||||||||||
| Amortization | 214 | 167 | 716 | 669 | ||||||||||||
| EBITDA | 4,624 | 41,265 | 13,984 | 1,859 | ||||||||||||
| Provision for litigation, net of recoveries (a) | — | (40,696 | ) | — | 1,802 | |||||||||||
| Write-off of constructed asset (b) | — | 652 | — | 652 | ||||||||||||
| Share-based compensation (c) | 663 | 879 | 2,747 | 4,164 | ||||||||||||
| Professional fees (d) | 574 | 262 | 1,837 | 1,548 | ||||||||||||
| Foreign currency loss (gain) (e) | 2,175 | (541 | ) | 2,963 | (462 | ) | ||||||||||
| Severance and other termination benefits (f) | — | 465 | — | 1,445 | ||||||||||||
| Other (g) | 175 | 243 | 748 | 941 | ||||||||||||
| Adjusted EBITDA | $ | 8,211 | $ | 2,529 | $ | 22,279 | $ | 11,949 | ||||||||
| Adjusted EBITDA Margin | 18 | % | 7 | % | 14 | % | 8 | % | ||||||||
| Adjusted EBITDA Less Share-Based Compensation | $ | 7,548 | $ | 1,650 | $ | 19,532 | $ | 7,785 | ||||||||
__________________
| (a) | Represents litigation provision primarily associated with legal matters in Texas and Canada. See footnote (a) in the “Adjusted Net Income (Loss) and Adjusted Earnings (Loss) per Diluted Share” table above for more information. |
| (b) | Represents write-off of a constructed asset which was deemed to have no further service potential in December 2023. |
| (c) | Represents non-cash compensation charges related to share-based compensation granted to our officers, employees and directors. |
| (d) | Represents non-capitalizable costs of professional services incurred or reversed in connection with our legal proceedings associated with the assertion of, or defense of, intellectual property as further described above, and transaction costs totaling |
| (e) | Represents realized and unrealized foreign currency exchange gains and losses primarily due to movement in the foreign currency exchange rates during the applicable periods. |
| (f) | Represents certain expenses associated with consolidations of our tracer diagnostics business operations and Repeat Precision, LLC’s manufacturing operations in Mexico, restructuring of certain U.S. and international operations management and support functions, and the departure of a former executive officer. |
| (g) | Represents the impact of a research and development subsidy that is included in income tax expense in accordance with GAAP along with other charges and credits. |
NCS MULTISTAGE HOLDINGS, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
(In thousands)
(Unaudited)
FREE CASH FLOW AND FREE CASH FLOW LESS DISTRIBUTIONS TO NON-CONTROLLING INTEREST
Free cash flow is defined as net cash provided by (used in) operating activities less purchases of property and equipment (inclusive of the purchase and development of software and technology) plus proceeds from sales of property and equipment, as presented in our consolidated statement of cash flows. We define free cash flow less distributions to non-controlling interest as free cash flow less amounts reported in the financing activities section of the statement of cash flows as distributions to non-controlling interest. We believe free cash flow is useful because it provides information to investors regarding the cash that was available in the period that was in excess of our needs to fund our capital expenditures and other investment needs. We believe that free cash flow less distributions to non-controlling interest is useful because it provides information to investors regarding the cash that was available in the period that was in excess of our needs to fund our capital expenditures, other investment needs, and cash distributions to our joint venture partner.
| Year Ended December 31, | ||||||||
| 2024 | 2023 | |||||||
| Net cash provided by operating activities | $ | 12,725 | $ | 4,774 | ||||
| Purchases of property and equipment | (1,309 | ) | (1,882 | ) | ||||
| Purchase and development of software and technology | (70 | ) | (310 | ) | ||||
| Proceeds from sales of property and equipment | 592 | 509 | ||||||
| Free cash flow | $ | 11,938 | $ | 3,091 | ||||
| Distributions to non-controlling interest | (2,050 | ) | (500 | ) | ||||
| Free cash flow less distributions to non-controlling interest | $ | 9,888 | $ | 2,591 | ||||
FAQ
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