CORE LAB REPORTS FIRST QUARTER 2024 RESULTS
-
FIRST QUARTER REVENUE OF
$129.6 MILLION , UP MODESTLY SEQUENTIALLY AND YEAR-OVER-YEAR -
FIRST QUARTER OPERATING INCOME OF
$8.6 MILLION ; EX-ITEMS,$14.9 MILLION , FLAT SEQUENTIALLY, UP 3% YEAR-OVER-YEAR - FIRST QUARTER OPERATING MARGINS, EX-ITEMS, OF 12%
-
FIRST QUARTER GAAP EPS OF
$0.07 ; EX-ITEMS,$0.19 , FLAT SEQUENTIALLY AND YEAR-OVER-YEAR -
FIRST QUARTER FREE CASH FLOW OF
$2.5 MILLION - COMPANY ANNOUNCES Q2 2024 QUARTERLY DIVIDEND
Core's CEO,
Reservoir Description
Reservoir Description operations are closely correlated with trends in international and offshore activity levels, with approximately 80% of revenue sourced from projects originating outside the U.S. Revenue in the first quarter of 2024 was
During the first quarter of 2024,
Also during the first quarter of 2024,
Production Enhancement
Production Enhancement operations, which are focused on complex completions in unconventional oil and gas reservoirs in the
In the first quarter of 2024,
Also during the first quarter of 2024, Core's diagnostic technologies were employed in two mature U. S. basins to assess high-profile well completions. In the Eagle Ford, an operator needed to confirm the performance of refrac treatments in horizontal wells. The operator enlisted
Liquidity, Free Cash Flow and Dividend
Core continues to focus on maximizing free cash flow ("FCF"), a non-GAAP financial measure defined as cash from operations less capital expenditures. For the first quarter of 2024, cash from operations was approximately
Core expects the Company to continue generating positive free cash flow in future quarters. As of
On
On
The Board and the Company's Executive Management continue to focus on strategies that maximize return on invested capital ("ROIC") and FCF, factors that have high correlation to total shareholder return. Core's commitment to an asset-light business model and disciplined capital stewardship promote capital efficiency and are designed to produce more predictable and superior long-term ROIC.
The Board has established an internal metric to demonstrate ROIC performance relative to the oilfield service companies listed as Core's
Industry and Core Lab Outlook and Guidance
As 2024 unfolds, Core will continue to execute its strategic plan of technology investments targeted to both solve client problems and capitalize on Core's growth opportunities. The Company will also remain focused on maximizing ROIC, generating free cash and reducing debt.
As international activity continues to expand, committed long-term upstream projects from the
Reservoir Description's second quarter 2024 revenue is projected to range from
The Company's second quarter 2024 revenue is projected to range from
The Company's second quarter 2024 guidance is based on projections for underlying operations and excludes gains and losses in foreign exchange. Second quarter 2024 guidance also assumes an effective tax rate of 20%.
Earnings Call Scheduled
The Company has scheduled a conference call to discuss Core's first quarter 2024 earnings announcement. The call will begin at
The Company undertakes no obligation to publicly update or revise any forward-looking statement to reflect events or circumstances that may arise after the date of this press release, except as required by law.
Visit the Company's website at www.corelab.com. Connect with
CORE LABORATORIES INC. & SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) |
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Three Months Ended |
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% Variance |
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vs. Q4-23 |
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vs. Q1-23 |
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REVENUE |
|
$ |
129,637 |
|
|
$ |
128,210 |
|
|
$ |
128,356 |
|
|
1.1 % |
|
1.0 % |
|
|
|
|
|
|
|
|
|
|
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|
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OPERATING EXPENSES: |
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|
|
|
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|
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|
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|
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|||
Costs of services and product sales |
|
|
104,588 |
|
|
|
101,517 |
|
|
|
101,528 |
|
|
3.0 % |
|
3.0 % |
General and administrative expense |
|
|
11,789 |
|
|
|
8,665 |
|
|
|
16,331 |
|
|
36.1 % |
|
(27.8) % |
Depreciation and amortization |
|
|
3,843 |
|
|
|
3,874 |
|
|
|
4,044 |
|
|
(0.8) % |
|
(5.0) % |
Other (income) expense, net |
|
|
846 |
|
|
|
(427) |
|
|
|
(28) |
|
|
NM |
|
NM |
Total operating expenses |
|
|
121,066 |
|
|
|
113,629 |
|
|
|
121,875 |
|
|
6.5 % |
|
(0.7) % |
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|
|
|
|
|
|
|
|
|
|
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OPERATING INCOME |
|
|
8,571 |
|
|
|
14,581 |
|
|
|
6,481 |
|
|
(41.2) % |
|
32.2 % |
Interest expense |
|
|
3,423 |
|
|
|
3,618 |
|
|
|
3,429 |
|
|
(5.4) % |
|
(0.2) % |
Income before income taxes |
|
|
5,148 |
|
|
|
10,963 |
|
|
|
3,052 |
|
|
(53.0) % |
|
68.7 % |
Income tax expense |
|
|
1,658 |
|
|
|
8,529 |
|
|
|
610 |
|
|
(80.6) % |
|
171.8 % |
Net income |
|
|
3,490 |
|
|
|
2,434 |
|
|
|
2,442 |
|
|
43.4 % |
|
42.9 % |
Net income attributable to non-controlling interest |
|
|
270 |
|
|
|
235 |
|
|
|
69 |
|
|
NM |
|
NM |
Net income attributable to |
|
$ |
3,220 |
|
|
$ |
2,199 |
|
|
$ |
2,373 |
|
|
46.4 % |
|
35.7 % |
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|
|
|
|
|
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Diluted earnings per share |
|
$ |
0.07 |
|
|
$ |
0.05 |
|
|
$ |
0.05 |
|
|
40.0 % |
|
40.0 % |
|
|
|
|
|
|
|
|
|
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Diluted earnings per share attributable to |
|
$ |
0.07 |
|
|
$ |
0.05 |
|
|
$ |
0.05 |
|
|
40.0 % |
|
40.0 % |
|
|
|
|
|
|
|
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|
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Diluted weighted average common shares outstanding |
|
|
47,703 |
|
|
|
47,557 |
|
|
|
47,481 |
|
|
0.3 % |
|
0.5 % |
|
|
|
|
|
|
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|
|
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|||
Effective tax rate |
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|
32 |
% |
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|
78 |
% |
|
|
20 |
% |
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NM |
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NM |
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SEGMENT INFORMATION: |
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Revenue: |
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Reservoir Description |
|
$ |
84,236 |
|
|
$ |
84,628 |
|
|
$ |
80,188 |
|
|
(0.5) % |
|
5.0 % |
Production Enhancement |
|
|
45,401 |
|
|
|
43,582 |
|
|
|
48,168 |
|
|
4.2 % |
|
(5.7) % |
Consolidated |
|
$ |
129,637 |
|
|
$ |
128,210 |
|
|
$ |
128,356 |
|
|
1.1 % |
|
1.0 % |
|
|
|
|
|
|
|
|
|
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|
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Operating income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Reservoir Description |
|
$ |
6,892 |
|
|
$ |
12,259 |
|
|
$ |
2,471 |
|
|
(43.8) % |
|
178.9 % |
Production Enhancement |
|
|
1,576 |
|
|
|
2,195 |
|
|
|
3,281 |
|
|
(28.2) % |
|
(52.0) % |
Corporate and Other |
|
|
103 |
|
|
|
127 |
|
|
|
729 |
|
|
NM |
|
NM |
Consolidated |
|
$ |
8,571 |
|
|
$ |
14,581 |
|
|
$ |
6,481 |
|
|
(41.2) % |
|
32.2 % |
|
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|
|
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"NM" means not meaningful |
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CORE LABORATORIES INC. & SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) |
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% Variance |
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ASSETS: |
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vs. Q4-23 |
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Cash and cash equivalents |
|
$ |
14,913 |
|
|
$ |
15,120 |
|
|
(1.4) % |
Accounts receivable, net |
|
|
115,092 |
|
|
|
109,352 |
|
|
5.2 % |
Inventories |
|
|
70,711 |
|
|
|
71,702 |
|
|
(1.4) % |
Other current assets |
|
|
28,331 |
|
|
|
26,962 |
|
|
5.1 % |
Total current assets |
|
|
229,047 |
|
|
|
223,136 |
|
|
2.6 % |
|
|
|
|
|
|
|
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Property, plant and equipment, net |
|
|
98,521 |
|
|
|
99,626 |
|
|
(1.1) % |
Right of use assets |
|
|
53,636 |
|
|
|
53,842 |
|
|
(0.4) % |
Intangibles, goodwill and other long-term assets, net |
|
|
206,746 |
|
|
|
209,791 |
|
|
(1.5) % |
Total assets |
|
$ |
587,950 |
|
|
$ |
586,395 |
|
|
0.3 % |
|
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|
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LIABILITIES AND EQUITY: |
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Accounts payable |
|
$ |
32,486 |
|
|
$ |
33,506 |
|
|
(3.0) % |
Short-term operating lease liabilities |
|
|
10,430 |
|
|
|
10,175 |
|
|
2.5 % |
Other current liabilities |
|
|
42,552 |
|
|
|
44,416 |
|
|
(4.2) % |
Total current liabilities |
|
|
85,468 |
|
|
|
88,097 |
|
|
(3.0) % |
|
|
|
|
|
|
|
|
|
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Long-term debt, net |
|
|
160,370 |
|
|
|
163,134 |
|
|
(1.7) % |
Long-term operating lease liabilities |
|
|
41,481 |
|
|
|
42,076 |
|
|
(1.4) % |
Other long-term liabilities |
|
|
63,214 |
|
|
|
63,281 |
|
|
(0.1) % |
|
|
|
|
|
|
|
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Total equity |
|
|
237,417 |
|
|
|
229,807 |
|
|
3.3 % |
|
|
|
|
|
|
|
|
|
|
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Total liabilities and equity |
|
$ |
587,950 |
|
|
$ |
586,395 |
|
|
0.3 % |
CORE LABORATORIES INC. & SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) |
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Three Months Ended |
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|
2024 |
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|
2023 |
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CASH FLOWS FROM OPERATING ACTIVITIES: |
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|
|
|
|
|
||
Net income |
|
$ |
3,490 |
|
|
$ |
2,442 |
|
Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
||
Stock-based compensation |
|
|
4,820 |
|
|
|
8,984 |
|
Depreciation and amortization |
|
|
3,843 |
|
|
|
4,044 |
|
Deferred income taxes |
|
|
2,827 |
|
|
|
936 |
|
Accounts receivable |
|
|
(6,290) |
|
|
|
(4,024) |
|
Inventories |
|
|
991 |
|
|
|
(6,897) |
|
Accounts payable |
|
|
(551) |
|
|
|
(7,078) |
|
Other adjustments to net income |
|
|
(3,600) |
|
|
|
(1,576) |
|
Net cash provided by (used in) operating activities |
|
|
5,530 |
|
|
|
(3,169) |
|
|
|
|
|
|
|
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CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
||
Capital expenditures |
|
|
(3,052) |
|
|
|
(2,208) |
|
Net proceeds on life insurance policies |
|
|
805 |
|
|
|
— |
|
Other investing activities |
|
|
590 |
|
|
|
170 |
|
Net cash provided by (used in) investing activities |
|
|
(1,657) |
|
|
|
(2,038) |
|
|
|
|
|
|
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CASH FLOWS FROM FINANCING ACTIVITIES: |
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|
|
|
|
|
||
Repayment of long-term debt |
|
|
(17,000) |
|
|
|
(16,000) |
|
Proceeds from long-term debt |
|
|
14,000 |
|
|
|
24,000 |
|
Dividends paid |
|
|
(468) |
|
|
|
(466) |
|
Repurchase of common stock |
|
|
(44) |
|
|
|
(1) |
|
Equity related transaction costs |
|
|
(549) |
|
|
|
(1,285) |
|
Other financing activities |
|
|
(19) |
|
|
|
(184) |
|
Net cash provided by (used in) financing activities |
|
|
(4,080) |
|
|
|
6,064 |
|
|
|
|
|
|
|
|
||
NET CHANGE IN CASH AND CASH EQUIVALENTS |
|
|
(207) |
|
|
|
857 |
|
CASH AND CASH EQUIVALENTS, beginning of period |
|
|
15,120 |
|
|
|
15,428 |
|
CASH AND CASH EQUIVALENTS, end of period |
|
$ |
14,913 |
|
|
$ |
16,285 |
|
Non-GAAP Information
Management believes that the exclusion of certain income and expenses enables it to evaluate more effectively the Company's operations period-over-period and to identify operating trends that could otherwise be masked by the excluded Items. For this reason, management uses certain non-GAAP measures that exclude these Items and believes that this presentation provides a clearer comparison with the results reported in prior periods. The non-GAAP financial measures should be considered in addition to, and not as a substitute for, the financial results prepared in accordance with GAAP, as more fully discussed in the Company's financial statements and filings with the
Reconciliation of Operating Income, Net Income and Diluted Earnings Per Share Attributable to (In thousands, except per share data) (Unaudited) |
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Operating Income |
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Three Months Ended |
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GAAP reported |
|
$ |
8,571 |
|
|
$ |
14,581 |
|
|
$ |
6,481 |
|
Stock compensation (1) |
|
|
3,458 |
|
|
|
— |
|
|
|
6,515 |
|
Loss on lease abandonment and assets write-down (2) |
|
|
1,809 |
|
|
|
— |
|
|
|
1,656 |
|
Severance costs |
|
|
824 |
|
|
|
— |
|
|
|
— |
|
Foreign exchange losses (gains) |
|
|
285 |
|
|
|
468 |
|
|
|
(144) |
|
Excluding specific items |
|
$ |
14,947 |
|
|
$ |
15,049 |
|
|
$ |
14,508 |
|
|
|
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Net Income Attributable to |
|
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|
|
Three Months Ended |
|
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|
|
|
|
|
|
|
|
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GAAP reported |
|
$ |
3,220 |
|
|
$ |
2,199 |
|
|
$ |
2,373 |
|
Stock compensation (1) |
|
|
2,766 |
|
|
|
— |
|
|
|
5,212 |
|
Loss on lease abandonment and assets write-down (2) |
|
|
1,447 |
|
|
|
— |
|
|
|
1,325 |
|
Severance costs |
|
|
659 |
|
|
|
— |
|
|
|
— |
|
Foreign exchange losses (gains) |
|
|
229 |
|
|
|
374 |
|
|
|
(114) |
|
Reversal of net deferred tax liabilities and effect of higher (lower) tax rate (3) |
|
|
628 |
|
|
|
6,336 |
|
|
|
— |
|
Excluding specific items |
|
$ |
8,949 |
|
|
$ |
8,909 |
|
|
$ |
8,796 |
|
|
|
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Diluted Earnings Per Share Attributable to |
|
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|
|
Three Months Ended |
|
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|
|
|
|
|
|
|
|
|
|||
GAAP reported |
|
$ |
0.07 |
|
|
$ |
0.05 |
|
|
$ |
0.05 |
|
Stock compensation (1) |
|
|
0.06 |
|
|
|
— |
|
|
|
0.11 |
|
Loss on lease abandonment and assets write-down (2) |
|
|
0.03 |
|
|
|
— |
|
|
|
0.03 |
|
Severance costs |
|
|
0.01 |
|
|
|
— |
|
|
|
— |
|
Foreign exchange losses (gains) |
|
|
0.01 |
|
|
|
0.01 |
|
|
|
— |
|
Reversal of net deferred tax liabilities and effect of higher (lower) tax rate (3) |
|
|
0.01 |
|
|
|
0.13 |
|
|
|
— |
|
Excluding specific items |
|
$ |
0.19 |
|
|
$ |
0.19 |
|
|
$ |
0.19 |
|
|
|
|
|
|
|
|
|
|
|
(1) Three months ended |
(2) Three months ended |
(3) Three months ended |
Segment Information (In thousands) (Unaudited) |
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||||||||||||
|
|
Operating Income |
|
|||||||||
|
|
Three Months Ended |
|
|||||||||
|
|
Reservoir |
|
|
Production |
|
|
Corporate and |
|
|||
GAAP reported |
|
$ |
6,892 |
|
|
$ |
1,576 |
|
|
$ |
103 |
|
Stock compensation (1) |
|
|
2,258 |
|
|
|
1,200 |
|
|
|
— |
|
Loss on lease abandonment and assets write-down (2) |
|
|
1,566 |
|
|
|
243 |
|
|
|
— |
|
Severance costs |
|
|
467 |
|
|
|
357 |
|
|
|
— |
|
Foreign exchange losses (gains) |
|
|
246 |
|
|
|
38 |
|
|
|
1 |
|
Excluding specific items |
|
$ |
11,429 |
|
|
$ |
3,414 |
|
|
$ |
104 |
|
(1) Includes the acceleration of stock compensation expense associated with employees reaching eligible retirement age. |
|
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(2) Includes the write-down of leasehold improvements, right of use assets and/or other assets and exit costs associated with consolidation of certain facilities. |
|
Return on
Return on
ROIC of 11.6% is defined by Bloomberg as Net Operating Profit After Tax ("NOPAT") of
Free Cash Flow
Core uses the non-GAAP financial measure of free cash flow to evaluate its cash flows and results of operations. Free cash flow is an important measurement because it represents the cash from operations, in excess of capital expenditures, available to operate the business and fund non-discretionary obligations. Free cash flow is not a measure of operating performance under GAAP and should not be considered in isolation nor construed as an alternative consideration to operating income, net income, or cash flows from operating, investing, or financing activities, each as determined in accordance with GAAP. Free cash flow should not be considered a measure of liquidity. Moreover, since free cash flow is not a measure determined in accordance with GAAP and thus is susceptible to varying interpretations and calculations, free cash flow as presented may not be comparable to similarly titled measures presented by other companies.
Computation of Free Cash Flow (In thousands) (Unaudited) |
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Three Months Ended |
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Net cash provided by operating activities |
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$ |
5,530 |
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Capital expenditures |
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(3,052) |
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Free cash flow |
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$ |
2,478 |
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SOURCE