NCS Multistage Holdings, Inc. Announces Third Quarter 2021 Results
NCS Multistage Holdings reported third-quarter revenues of $32.4 million, a 99% increase year-over-year and a 51% rise from the prior quarter. The company achieved a net income of $2.8 million, recovering from a net loss of $(5.9) million in Q3 2020. Adjusted EBITDA reached $4.2 million, showing substantial growth. As of September 30, 2021, NCS held $18.4 million in cash against $8.2 million in total debt, indicating strong liquidity. CEO Robert Nipper highlighted significant operational performance in Canada, contributing to overall results, and projected continued industry activity moving forward.
- Revenues increased by 99% year-over-year to $32.4 million.
- Net income improved to $2.8 million from a net loss of $(5.9) million in Q3 2020.
- Adjusted EBITDA rose to $4.2 million, showing a significant $6.3 million improvement.
- Cash reserves stood at $18.4 million with only $8.2 million in total debt.
- Strong performance in Canada with revenues increasing by approximately 500% year-over-year.
- Decreased U.S. product sales contributed to lower overall performance.
- Lower pricing for certain products and services impacted profitability.
Third Quarter Results
- Total revenues of
$32.4 million , a99% year-over-year increase and a51% increase compared to the second quarter of 2021 - Net income of
$2.8 million , a$8.7 million improvement compared to a net loss of$(5.9) million in the third quarter of 2020; earnings per diluted share of$1.14 - Adjusted EBITDA of
$4.2 million , a$6.3 million improvement compared to$(2.1) million in the third quarter of 2020 and a$5.8 million improvement compared to the second quarter of 2021 - Net cash provided by operating activities and free cash flow of
$6.7 million and$6.4 million , respectively, for the nine months ended September 30, 2021 $18.4 million in cash and$8.2 million of total debt as of September 30, 2021
HOUSTON, Nov. 01, 2021 (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 completions and field development strategies, today announced its results for the quarter ended September 30, 2021.
Financial Review
Total revenues were
Gross profit, which we define as total revenues less total cost of sales exclusive of depreciation and amortization, was
Selling, general and administrative (“SG&A”) expenses totaled
Net income was
Adjusted EBITDA was
Capital Expenditures and Liquidity
The Company incurred capital expenditures of
As of September 30, 2021, the Company had
Review and Outlook
NCS’s Chief Executive Officer, Robert Nipper commented, “NCS continued to demonstrate the benefits of the Company’s strategy during the third quarter, with significant increases in revenue and Adjusted EBITDA as compared to prior periods, positive year-to-date free cash flow and increases in our cash balance and total liquidity as compared to last quarter.
This strategy is rooted in our commitment to provide value and deliver innovative products to our customers and to create value for our shareholders. It is the talent, dedication and resolve of our exceptional team that allows us to accomplish this. I want to thank all the great people that have chosen to be a part of NCS and Repeat Precision.
Our revenue in the third quarter of
Our gross margin of
Our focus on cost and capital discipline continues, enabling us to further improve our financial position. Our Adjusted EBITDA of
We ended the third quarter with
For the fourth quarter, we expect a continuation of modest increases in drilling and completion activity in the U.S., primarily led by private exploration and production companies, partially offset by a potential decrease in activity in late December. Activity levels in Canada, which has had a stronger recovery than the U.S., continue to be above 2019 levels, which we expect to continue into the fourth quarter. The international rig count, and access to international markets, continues to improve gradually, with differences across regions. We expect the fourth quarter to be the strongest quarter of the year for us outside of North America.”
Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBITDA Less Share-Based Compensation, Adjusted Net (Loss) Income, Adjusted Net (Loss) Earnings per Diluted Share, 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 third quarter 2021 results and future financial expectations on Tuesday, November 2, 2021 at 7:30 a.m. Central Time (8:30 a.m. Eastern Time). To join the conference call from within the United States, participants may dial (844) 400-1696. To join the conference call from outside of the United States, participants may dial (703) 736-7385. The conference access code is 7059669. Participants are encouraged to log in to the webcast or dial in to the conference call approximately ten minutes prior to the start time. To listen via live webcast, please visit the Investors section of the Company’s website, www.ncsmultistage.com.
An audio replay of the conference call will be available shortly after the conclusion of the call and will remain available for approximately seven days. It can be accessed by dialing (855) 859-2056 within the United States or (404) 537-3406 outside of the United States. The conference call replay access code is 7059669. The replay will also 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 completions and field development strategies. NCS provides products and services to exploration and production companies for use in horizontal wells in unconventional oil and natural gas formations throughout North America and in selected international markets, including Argentina, China, the Middle East and the North Sea. 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: the risks and uncertainties relating to public health crises, including the COVID-19 pandemic and its continuing impact on market conditions and our business, financial condition, results of operations, cash flows and stock price; declines in the level of oil and natural gas exploration and production activity within Canada and the United States; oil and natural gas price fluctuations; the financial health of our customers including their ability to pay for products or services provided; inability to successfully implement our strategy of increasing sales of products and services into the United States; significant competition for our products and services that results in pricing pressures, reduced sales, or reduced market share; loss of significant customers; our inability to successfully develop and implement new technologies, products and services; our inability to protect and maintain critical intellectual property assets; losses and liabilities from uninsured or underinsured business activities; our failure to identify and consummate potential acquisitions; our inability to integrate or realize the expected benefits from acquisitions; currency exchange rate fluctuations; impact of severe weather conditions; risks resulting from the operations of a joint venture arrangement; 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; change in trade policy, including the impact of additional tariffs; 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, the Coronavirus Aid, Relief, and Economic Security Act and the U.S. Tax Cuts and Jobs Act of 2017; loss of our information and computer systems; system interruptions or failures, including complications with our enterprise resource planning system, cyber-security breaches, identity theft or other disruptions that could compromise our information; impairment in the carrying value of long-lived assets and goodwill; our failure to establish and maintain effective internal control over financial reporting; risks in attracting and retaining qualified employees and key personnel or labor cost inflation; loss of any of our key suppliers or significant disruptions negatively impacting our supply chain; risks and uncertainties relating to cost reduction efforts or savings we may realize from such cost reduction efforts; the reduction in our senior secured credit 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
Ryan Hummer
Chief Financial Officer
(281) 453-2222
IR@ncsmultistage.com
NCS MULTISTAGE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Revenues | ||||||||||||||||
| Product sales | $ | 21,229 | $ | 11,660 | $ | 57,167 | $ | 55,948 | ||||||||
| Services | 11,182 | 4,652 | 25,219 | 23,646 | ||||||||||||
| Total revenues | 32,411 | 16,312 | 82,386 | 79,594 | ||||||||||||
| Cost of sales | ||||||||||||||||
| Cost of product sales, exclusive of depreciation and amortization expense shown below | 12,898 | 7,874 | 37,487 | 35,191 | ||||||||||||
| Cost of services, exclusive of depreciation and amortization expense shown below | 4,738 | 2,334 | 12,354 | 12,024 | ||||||||||||
| Total cost of sales, exclusive of depreciation and amortization expense shown below | 17,636 | 10,208 | 49,841 | 47,215 | ||||||||||||
| Selling, general and administrative expenses | 10,982 | 12,474 | 35,589 | 48,782 | ||||||||||||
| Depreciation | 985 | 1,000 | 2,857 | 3,446 | ||||||||||||
| Amortization | 168 | 103 | 502 | 1,340 | ||||||||||||
| Impairment | — | — | — | 50,194 | ||||||||||||
| Income (loss) from operations | 2,640 | (7,473 | ) | (6,403 | ) | (71,383 | ) | |||||||||
| Other (expense) income | ||||||||||||||||
| Interest expense, net | (163 | ) | (876 | ) | (529 | ) | (1,622 | ) | ||||||||
| Other income, net | 176 | 414 | 1,046 | 580 | ||||||||||||
| Foreign currency exchange (loss) gain | (236 | ) | (260 | ) | 156 | (467 | ) | |||||||||
| Total other (expense) income | (223 | ) | (722 | ) | 673 | (1,509 | ) | |||||||||
| Income (loss) before income tax | 2,417 | (8,195 | ) | (5,730 | ) | (72,892 | ) | |||||||||
| Income tax (benefit) expense | (809 | ) | (3,058 | ) | 45 | (9,956 | ) | |||||||||
| Net income (loss) | 3,226 | (5,137 | ) | (5,775 | ) | (62,936 | ) | |||||||||
| Net income attributable to non-controlling interest | 430 | 726 | 621 | 3,233 | ||||||||||||
| Net income (loss) attributable to NCS Multistage Holdings, Inc. | $ | 2,796 | $ | (5,863 | ) | $ | (6,396 | ) | $ | (66,169 | ) | |||||
| Earnings (loss) per common share | ||||||||||||||||
| Basic earnings (loss) per common share attributable to NCS Multistage Holdings, Inc. | $ | 1.16 | $ | (2.48 | ) | $ | (2.67 | ) | $ | (28.01 | ) | |||||
| Diluted earnings (loss) per common share attributable to NCS Multistage Holdings, Inc. | $ | 1.14 | $ | (2.48 | ) | $ | (2.67 | ) | $ | (28.01 | ) | |||||
| Weighted average common shares outstanding | ||||||||||||||||
| Basic | 2,401 | 2,368 | 2,394 | 2,362 | ||||||||||||
| Diluted | 2,445 | 2,368 | 2,394 | 2,362 | ||||||||||||
NCS MULTISTAGE HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS*
(In thousands, except share data)
(Unaudited)
| September 30, | December 31, | |||||||
| 2021 | 2020 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 18,444 | $ | 15,545 | ||||
| Accounts receivable—trade, net | 22,617 | 21,925 | ||||||
| Inventories, net | 33,668 | 34,871 | ||||||
| Prepaid expenses and other current assets | 3,128 | 2,975 | ||||||
| Other current receivables | 5,405 | 8,358 | ||||||
| Total current assets | 83,262 | 83,674 | ||||||
| Noncurrent assets | ||||||||
| Property and equipment, net | 25,592 | 24,435 | ||||||
| Goodwill | 15,222 | 15,222 | ||||||
| Identifiable intangibles, net | 5,911 | 6,413 | ||||||
| Operating lease assets | 5,041 | 5,170 | ||||||
| Deposits and other assets | 3,201 | 3,559 | ||||||
| Deferred income taxes, net | 272 | 205 | ||||||
| Total noncurrent assets | 55,239 | 55,004 | ||||||
| Total assets | $ | 138,501 | $ | 138,678 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable—trade | $ | 5,571 | $ | 4,943 | ||||
| Accrued expenses | 5,935 | 3,347 | ||||||
| Income taxes payable | 636 | 653 | ||||||
| Operating lease liabilities | 1,738 | 1,826 | ||||||
| Current maturities of long-term debt | 1,653 | 1,347 | ||||||
| Other current liabilities | 2,218 | 2,768 | ||||||
| Total current liabilities | 17,751 | 14,884 | ||||||
| Noncurrent liabilities | ||||||||
| Long-term debt, less current maturities | 6,578 | 4,442 | ||||||
| Operating lease liabilities, long-term | 3,862 | 3,989 | ||||||
| Other long-term liabilities | 1,836 | 1,864 | ||||||
| Deferred income taxes, net | 155 | 13 | ||||||
| Total noncurrent liabilities | 12,431 | 10,308 | ||||||
| Total liabilities | 30,182 | 25,192 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity | ||||||||
| Preferred stock, | ||||||||
| September 30, 2021 and December 31, 2020 | — | — | ||||||
| Common stock, | ||||||||
| and 2,380,353 shares outstanding at September 30, 2021 and 2,371,992 shares issued | ||||||||
| and 2,359,918 shares outstanding at December 31, 2020 | 24 | 24 | ||||||
| Additional paid-in capital | 436,040 | 432,801 | ||||||
| Accumulated other comprehensive loss | (81,964 | ) | (81,780 | ) | ||||
| Retained deficit | (263,024 | ) | (256,628 | ) | ||||
| Treasury stock, at cost; 17,382 shares at September 30, 2021 and 12,074 shares | ||||||||
| at December 31, 2020 | (1,006 | ) | (809 | ) | ||||
| Total stockholders’ equity | 90,070 | 93,608 | ||||||
| Non-controlling interest | 18,249 | 19,878 | ||||||
| Total equity | 108,319 | 113,486 | ||||||
| Total liabilities and stockholders' equity | $ | 138,501 | $ | 138,678 | ||||
_____________________
* Preliminary
NCS MULTISTAGE HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
| Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2021 | 2020 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | (5,775 | ) | $ | (62,936 | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 3,359 | 4,786 | ||||||
| Impairment | — | 50,194 | ||||||
| Amortization of deferred loan costs | 211 | 226 | ||||||
| Write-off of deferred loan costs | — | 606 | ||||||
| Share-based compensation | 5,208 | 6,477 | ||||||
| Provision for inventory obsolescence | 1,715 | 1,198 | ||||||
| Deferred income tax expense (benefit) | 79 | (2,069 | ) | |||||
| Gain on sale of property and equipment | (310 | ) | (514 | ) | ||||
| Provision for doubtful accounts | (129 | ) | 895 | |||||
| Proceeds from note receivable | 223 | 300 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable—trade | (761 | ) | 25,814 | |||||
| Inventories, net | (613 | ) | 1,386 | |||||
| Prepaid expenses and other assets | 39 | (2,754 | ) | |||||
| Accounts payable—trade | 902 | (4,555 | ) | |||||
| Accrued expenses | 2,606 | 131 | ||||||
| Other liabilities | (2,706 | ) | 1,421 | |||||
| Income taxes receivable/payable | 2,673 | (6,098 | ) | |||||
| Net cash provided by operating activities | 6,721 | 14,508 | ||||||
| Cash flows from investing activities | ||||||||
| Purchases of property and equipment | (342 | ) | (1,882 | ) | ||||
| Purchase and development of software and technology | (324 | ) | — | |||||
| Proceeds from sales of property and equipment | 369 | 704 | ||||||
| Net cash used in investing activities | (297 | ) | (1,178 | ) | ||||
| Cash flows from financing activities | ||||||||
| Payments on equipment note and finance leases | (958 | ) | (1,268 | ) | ||||
| Line of credit borrowings | 360 | 5,000 | ||||||
| Payments on revolver | (360 | ) | (15,000 | ) | ||||
| Treasury shares withheld | (197 | ) | (157 | ) | ||||
| Distribution to noncontrolling interest | (2,250 | ) | (3,800 | ) | ||||
| Payment of deferred loan cost related to senior secured credit facility | — | (482 | ) | |||||
| Net cash used in financing activities | (3,405 | ) | (15,707 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | (120 | ) | (231 | ) | ||||
| Net change in cash and cash equivalents | 2,899 | (2,608 | ) | |||||
| Cash and cash equivalents beginning of period | 15,545 | 11,243 | ||||||
| Cash and cash equivalents end of period | $ | 18,444 | $ | 8,635 | ||||
| Noncash investing and financing activities | ||||||||
| Leased assets obtained in exchange for new finance lease liabilities | $ | 3,711 | $ | 5,102 | ||||
| Leased assets obtained in exchange for new operating lease liabilities | $ | 1,736 | $ | 2,573 | ||||
| Return of vehicles under finance lease | $ | (187 | ) | $ | (722 | ) | ||
NCS MULTISTAGE HOLDINGS, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
(In thousands, except per share data)
(Unaudited)
Non-GAAP Financial Measures
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 an impairment and share-based compensation, are 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. Adjusted Net (Loss) Income 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 Net (Loss) Earnings per Diluted Share is defined as Adjusted Net (Loss) Income divided by our diluted weighted average common shares outstanding during the relevant period. 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 distributions to non-controlling interest, as presented in the net cash used in financing activities section of our consolidated statements of cash flows. 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 to evaluate the investment in working capital required to support our business. We believe that Adjusted EBITDA, Adjusted Net (Loss) Income and Adjusted Net (Loss) Earnings per Diluted Share are important measures that exclude costs that management believes do not reflect our ongoing operating performance and, in the case of Adjusted EBITDA, 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 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. 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. Accordingly, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBITDA Less Share-Based Compensation, Adjusted Net (Loss) Income, Adjusted Net (Loss) Earnings per Diluted Share, 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. We believe that presenting Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBITDA Less Share-Based Compensation, Adjusted Net (Loss) Income, Adjusted Net (Loss) Earnings per Diluted Share, Free Cash Flow and Free Cash Flow Less Distributions to Non-Controlling Interest enables investors to assess our performance from period to period using the same metrics utilized by management and that Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBITDA Less Share-Based Compensation, Adjusted Net (Loss) Income and Adjusted Net (Loss) Earnings per Diluted Share enable investors to evaluate our performance relative to other companies that are not subject to such factors.
EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBITDA Less Share-Based Compensation, Adjusted Net (Loss) Income, Adjusted Net (Loss) Earnings per Diluted Share, 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, income from operations, cash provided by 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), cash provided by 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.
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*
| September 30, | December 31, | |||||||
| 2021 | 2020 | |||||||
| Working capital | $ | 65,511 | $ | 68,790 | ||||
| Cash and cash equivalents | (18,444 | ) | (15,545 | ) | ||||
| Current maturities of long term debt | 1,653 | 1,347 | ||||||
| Net working capital | $ | 48,720 | $ | 54,592 | ||||
_____________________
* Preliminary
NCS MULTISTAGE HOLDINGS, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
(In thousands, except per share data)
(Unaudited)
ADJUSTED NET LOSS AND ADJUSTED NET LOSS PER DILUTED SHARE
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||
| September 30, 2021 | September 30, 2020 | September 30, 2021 | September 30, 2020 | |||||||||||||||||||||||||||||
| Effect on Net Income (Loss) | Impact on Diluted Income (Loss) Per Share | Effect on Net Loss | Impact on Diluted Loss Per Share | Effect on Net Loss | Impact on Diluted Loss Per Share | Effect on Net Loss | Impact on Diluted Loss Per Share | |||||||||||||||||||||||||
| Net income (loss) attributable to NCS Multistage Holdings, Inc. | $ | 2,796 | $ | 1.14 | $ | (5,863 | ) | $ | (2.48 | ) | $ | (6,396 | ) | $ | (2.67 | ) | $ | (66,169 | ) | $ | (28.01 | ) | ||||||||||
| Adjustments | ||||||||||||||||||||||||||||||||
| Impairment (a) | — | — | — | — | — | — | 50,194 | 21.24 | ||||||||||||||||||||||||
| Foreign currency exchange loss (gain) (b) | 204 | 0.08 | 216 | 0.09 | (184 | ) | (0.08 | ) | 427 | 0.18 | ||||||||||||||||||||||
| Write-off of deferred loan costs (c) | — | — | 606 | 0.26 | — | — | 606 | 0.26 | ||||||||||||||||||||||||
| Net benefit of ERC (d) | (1,907 | ) | (0.78 | ) | — | — | (1,907 | ) | (0.80 | ) | — | — | ||||||||||||||||||||
| Income tax impact from adjustments (e) | (2,045 | ) | (0.84 | ) | 394 | 0.17 | 445 | 0.19 | 616 | 0.26 | ||||||||||||||||||||||
| Adjusted net loss attributable to NCS Multistage Holdings, Inc. | $ | (952 | ) | $ | (0.40 | ) | $ | (4,647 | ) | $ | (1.96 | ) | $ | (8,042 | ) | $ | (3.36 | ) | $ | (14,326 | ) | $ | (6.07 | ) | ||||||||
_____________________
(a) Represents non-cash impairment charges for property and equipment and intangible assets during 2020 as the fair values were lower than the carrying values.
(b) Represents realized and unrealized foreign currency translation gains and losses primarily due to movement in the foreign currency exchange rates during the applicable periods.
(c) Represents deferred loan costs that were expensed during the third quarter of 2020 in connection with the amendment to our senior secured credit facility in August 2020. The reduction in deferred loan costs were in proportion to the reduction in its potential capacity.
(d) Represents ERC benefits recorded during the period less the effect on bonus and associated payroll burden accruals.
(e) Represents the income tax adjustments including the valuation allowance recorded to reduce the carrying value of both our U.S. and Canadian deferred tax assets in addition to a reduction in foreign income tax in 2020.
NCS MULTISTAGE HOLDINGS, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL INFORMATION
(In thousands)
(Unaudited)
ADJUSTED EBITDA, ADJUSTED EBITDA MARGIN, AND ADJUSTED EBITDA LESS SHARE-BASED COMPENSATION
| Three Months Ended | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Net income (loss) | $ | 3,226 | $ | (5,137 | ) | $ | (5,775 | ) | $ | (62,936 | ) | |||||
| Income tax (benefit) expense | (809 | ) | (3,058 | ) | 45 | (9,956 | ) | |||||||||
| Interest expense, net | 163 | 876 | 529 | 1,622 | ||||||||||||
| Depreciation | 985 | 1,000 | 2,857 | 3,446 | ||||||||||||
| Amortization | 168 | 103 | 502 | 1,340 | ||||||||||||
| EBITDA | 3,733 | (6,216 | ) | (1,842 | ) | (66,484 | ) | |||||||||
| Impairment (a) | — | — | — | 50,194 | ||||||||||||
| Share-based compensation (b) | 1,018 | 1,602 | 3,239 | 6,274 | ||||||||||||
| Professional fees (c) | 928 | 1,249 | 2,823 | 2,211 | ||||||||||||
| Net benefit of ERC (d) | (1,907 | ) | — | (1,907 | ) | — | ||||||||||
| Foreign currency exchange loss (gain) (e) | 236 | 260 | (156 | ) | 467 | |||||||||||
| Severance and other termination benefits (f) | — | 844 | — | 5,618 | ||||||||||||
| Other (g) | 153 | 151 | 446 | 927 | ||||||||||||
| Adjusted EBITDA | $ | 4,161 | $ | (2,110 | ) | $ | 2,603 | $ | (793 | ) | ||||||
| Adjusted EBITDA Margin | ( | ) | ( | ) | ||||||||||||
| Adjusted EBITDA Less Share-Based Compensation | $ | 3,143 | $ | (3,712 | ) | $ | (636 | ) | $ | (7,067 | ) | |||||
_____________________
(a) Represents non-cash impairment charges for property and equipment and intangible assets during 2020 as the fair values were lower than the carrying values.
(b) Represents non-cash compensation charges related to share-based compensation granted to our officers, employees and directors.
(c) Represents non-capitalizable costs of professional services incurred in connection with legal proceedings and the evaluation of potential acquisitions. During the second quarter of 2020, we received proceeds from our directors and officers liability insurance related to the reimbursement of legal expenses that we incurred to defend a director and officer in the litigation with Diamondback Industries, Inc.
(d) Represents ERC benefits recorded during the period less the effect on bonus and associated payroll burden accruals.
(e) Represents realized and unrealized foreign currency translation gains and losses primarily due to movement in the foreign currency exchange rates during the applicable periods.
(f) Reflects charges incurred in connection with the reductions in workforce implemented in 2020.
(g) Represents the impact of a research and development subsidy that is included in income tax expense (benefit) in accordance with GAAP along with other charges and credits.
FREE CASH FLOW
| Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2021 | 2020 | |||||||
| Net cash provided by operating activities | $ | 6,721 | $ | 14,508 | ||||
| Purchases of property and equipment | (342 | ) | (1,882 | ) | ||||
| Purchase and development of software and technology | (324 | ) | — | |||||
| Proceeds from sales of property and equipment | 369 | 704 | ||||||
| Free cash flow | $ | 6,424 | $ | 13,330 | ||||
FREE CASH FLOW LESS DISTRIBUTIONS TO NON-CONTROLLING INTEREST
| Nine Months Ended | ||||||||
| September 30, | ||||||||
| 2021 | 2020 | |||||||
| Net cash provided by operating activities | $ | 6,721 | $ | 14,508 | ||||
| Purchases of property and equipment | (342 | ) | (1,882 | ) | ||||
| Purchase and development of software and technology | (324 | ) | — | |||||
| Proceeds from sales of property and equipment | 369 | 704 | ||||||
| Distributions to non-controlling interest | (2,250 | ) | (3,800 | ) | ||||
| Free cash flow less distributions to non-controlling interest | $ | 4,174 | $ | 9,530 | ||||
NCS MULTISTAGE HOLDINGS, INC.
REVENUES BY GEOGRAPHIC AREA
(In thousands)
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||
| September 30, | September 30, | |||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||
| United States | ||||||||||||
| Product sales | $ | 5,324 | $ | 8,192 | $ | 18,762 | $ | 29,319 | ||||
| Services | 2,715 | 1,143 | 6,328 | 5,588 | ||||||||
| Total United States | 8,039 | 9,335 | 25,090 | 34,907 | ||||||||
| Canada | ||||||||||||
| Product sales | 15,678 | 2,762 | 36,877 | 24,740 | ||||||||
| Services | 6,423 | 931 | 14,653 | 9,819 | ||||||||
| Total Canada | 22,101 | 3,693 | 51,530 | 34,559 | ||||||||
| Other Countries | ||||||||||||
| Product sales | 227 | 706 | 1,528 | 1,889 | ||||||||
| Services | 2,044 | 2,578 | 4,238 | 8,239 | ||||||||
| Total Other Countries | 2,271 | 3,284 | 5,766 | 10,128 | ||||||||
| Total | ||||||||||||
| Product sales | 21,229 | 11,660 | 57,167 | 55,948 | ||||||||
| Services | 11,182 | 4,652 | 25,219 | 23,646 | ||||||||
| Total revenues | $ | 32,411 | $ | 16,312 | $ | 82,386 | $ | 79,594 | ||||
FAQ
What were NCS Multistage Holdings' Q3 2021 total revenues?
How much did NCSM report in net income for Q3 2021?
What is the Adjusted EBITDA for NCSM in Q3 2021?
What are the cash and debt figures for NCSM as of September 30, 2021?
What was the year-over-year revenue growth for NCSM in Q3 2021?
