- Revenue of
$922.1 million, decreased 3% year-over-year - Net income attributable to
ChampionX of$112.9 million , increased 78% year-over-year - Adjusted net income of
$96.4 million , increased 17% year-over-year - Adjusted EBITDA of
$191.7 million , increased 4% year-over-year - Income before income taxes margin of 15.2%, increased 547 basis points year-over-year
- Adjusted EBITDA margin of 20.8%, increased 130 basis points year-over-year
- Cash from operating activities of
$173.5 million and free cash flow of$144.0 million - Returned 38% of cash from operating activities and 46% of free cash flow to shareholders
CEO Commentary
“The first quarter demonstrated the resiliency of our
“During the first quarter of 2024, we generated revenue of
“Cash flow from operating activities was
Agreement to be Acquired by SLB
On
Production Chemical Technologies
Production Chemical Technologies revenue in the first quarter of 2024 was
Segment operating profit was
Production & Automation Technologies
Production & Automation Technologies revenue in the first quarter of 2024 was
Revenue from digital products was
Segment operating profit was
Drilling Technologies
Drilling Technologies revenue in the first quarter of 2024 was
Segment operating profit was
Reservoir Chemical Technologies
Reservoir Chemical Technologies revenue in the first quarter 2024 was
Segment operating profit was
Other Business Highlights: Chemical Technologies
- Completed chemical recommendations and supplied first fill chemical volumes for a new startup tie-back project in deepwater
Gulf of Mexico . This project is expected to add valuable throughput to an existing producing facility through the use of a suite of ChampionX Surflo PlusTM registered subsea flow assurance chemistries. - Secured a contract extension with an
IOC in theGulf of Mexico . With this extension,ChampionX continues to deliver the products, services, and technology designed for an efficient and effective chemical management program. - The
U.S. Land sales team deployed approximately 1,500 tank level monitoring (TLM) units to heavily serviced accounts in remote areas ofthe United States . The deployment is designed to ensure continuous correct dosage requirements for customer operations, quicker resolution of pump-related issues, and improvements to accuracy of pump rates while reducing miles driven and fuel consumption. ChampionX was chosen by a midstream operator inCanada to provide corrosion and paraffin inhibition programs to a 575-kilometer pipeline network that transports natural gas liquids and condensate from theMontney andDuvernay shale plays to the company’s condensate hub in Ft.Saskatchewan .- ChampionX Brazil has been awarded a new contract by an
IOC inBrazil Offshore to provide topside and subsea certified production chemicals for the Bacalhau field development project. The contract covers the engineering support, design, manufacturing, and delivery of 19 specialty chemicals, which will be critical to produce 220,000 barrels of oil per day and its associated produced water from the Bacalhau field, located in theSantos Basin . The subsea chemicals are designed to ensure the continuous flow of oil into the wells, preventing scale, corrosion, and hydrate formation, and enhancing the recovery of oil and gas. The chemicals will be manufactured atChampionX's manufacturing facilities inLatin America and theU.S. ChampionX was awarded the first-fill contract to supply corrosion inhibitor solutions for the first subsurface gas storage in theKingdom of Saudi Arabia . The corrosion inhibitors are designed to ensure the integrity and reliability of the gas storage infrastructure by mitigating corrosion risks during both the injection and withdrawal phases of gas.
Other Business Highlights: Production & Automation Technologies
- In February,
ChampionX acquired Artificial Lift Performance (ALP), a provider of advanced analytics solutions for enhancing oil and gas production performance. This acquisition is a key enabler to deliver end-to-end digital solutions that enhance the productivity and profitability of our customers’ producing assets. Combining the capabilities of ALP’s flagship Pump Checker™ software with ChampionX’s XSPOC™ production optimization software offers a comprehensive suite of advanced analytics across all major artificial lift types and chemical applications, enabling operators to gain invaluable insights and make informed decisions to meet their business objectives. - In March,
ChampionX announced it plans to acquireRMSpumptools Limited , a business unit of the energy division ofUK -based James Fisher and Sons plc. The unit manufactures highly engineered mechanical and electrical solutions for complex artificial lift applications. The integration of RMSpumptools’ technology will enhanceChampionX's Production and Automation Technologies portfolio and will further strengthen the Company’s presence and participation in a broad range of international markets including theMiddle East ,Latin America , and global offshore developments. - UNBRIDLED® ESP Systems kicked off a strategic technology partnership with a US public company operator to offer an ESP autonomous control solution, with two projects currently under way in the Permian. Enhanced ESP artificial intelligence (AI) software will be hosted on ChampionX’s digital platform and UNBRIDLED® ESP Systems will provide the variable speed drive, valve control system, field resources, and LOOKOUTTM Plus optimization services. This solution provides AI-based ESP optimization recommendations, automates tubing / casing back pressure valve control, and enables cloud-based ESP control.
Asia Pacific team continued to strengthen its leading Artificial Lift business inAustralia by re-signing a new multi-year, multi-product supply contract for a majorIOC . The contract covers surface and subsurface technologies for coalbed methane applications.- A
Middle East national oil company awardedChampionX 70% of a three-year contract for plunger lift products and services. The contract includes equipment, digital automation hardware and software, as well as turnkey services. - Installed two new chemical injection skids for a national oil company in the
Middle East . The packages include an automated controller with a patented measurement system, and the ongoing provision of scale inhibitor.
About Non-GAAP Measures
In addition to financial results determined in accordance with generally accepted accounting principles in
This press release contains certain forward-looking non-GAAP financial measures, including adjusted EBITDA. The Company has not provided projected net income attributable to
About
Forward-Looking Statements
This news release contains statements relating to future actions and results, which are "forward-looking statements" within the meaning of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such statements relate to, among other things, ChampionX's market position and growth opportunities. Forward-looking statements include statements related to ChampionX’s expectations regarding the performance of the business, financial results, liquidity and capital resources of
Additional Information about the Transaction and Where to Find It
In connection with the proposed transaction, SLB intends to file with the
Participants in the Solicitation
SLB,
Investor Contact:
byron.pope@championx.com
281-602-0094
Media Contact:
john.breed@championx.com
281-403-5751
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended | |||||||||||
(in thousands, except per share amounts) | 2024 | 2023 | 2023 | ||||||||
Revenue | $ | 922,141 | $ | 943,555 | $ | 948,347 | |||||
Cost of goods and services | 622,937 | 661,337 | 664,992 | ||||||||
Gross profit | 299,204 | 282,218 | 283,355 | ||||||||
Costs and expenses: | |||||||||||
Selling, general and administrative expense | 172,414 | 147,415 | 160,816 | ||||||||
Loss (gain) on disposal group and sale-leaseback transaction | (29,883 | ) | — | 12,965 | |||||||
Interest expense, net | 13,935 | 13,808 | 12,466 | ||||||||
Foreign currency transaction losses, net | 55 | 14,651 | 9,252 | ||||||||
Other expense (income), net | 2,927 | (7,584 | ) | (3,957 | ) | ||||||
Income before income taxes | 139,756 | 113,928 | 91,813 | ||||||||
Provision for income taxes | 26,596 | 35,771 | 28,669 | ||||||||
Net income | 113,160 | 78,157 | 63,144 | ||||||||
Net income (loss) attributable to noncontrolling interest | 237 | 959 | (388 | ) | |||||||
Net income attributable to | $ | 112,923 | $ | 77,198 | $ | 63,532 | |||||
Earnings per share attributable to | |||||||||||
Basic | $ | 0.59 | $ | 0.40 | $ | 0.32 | |||||
Diluted | $ | 0.58 | $ | 0.39 | $ | 0.31 | |||||
Weighted-average shares outstanding: | |||||||||||
Basic | 190,803 | 193,191 | 198,286 | ||||||||
Diluted | 193,964 | 196,649 | 202,440 | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands) | |||||||
ASSETS | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 386,017 | $ | 288,557 | |||
Receivables, net | 471,813 | 534,534 | |||||
Inventories, net | 543,224 | 521,549 | |||||
Prepaid expenses and other current assets | 75,110 | 80,777 | |||||
Total current assets | 1,476,164 | 1,425,417 | |||||
Property, plant and equipment, net | 759,038 | 773,552 | |||||
679,704 | 669,064 | ||||||
Intangible assets, net | 240,459 | 243,553 | |||||
Other non-current assets | 167,584 | 130,116 | |||||
Total assets | $ | 3,322,949 | $ | 3,241,702 | |||
LIABILITIES AND EQUITY | |||||||
Current Liabilities: | |||||||
Current portion of long-term debt | $ | 6,203 | $ | 6,203 | |||
Accounts payable | 532,205 | 451,680 | |||||
Other current liabilities | 268,785 | 324,866 | |||||
Total current liabilities | 807,193 | 782,749 | |||||
Long-term debt | 593,575 | 594,283 | |||||
Other long-term liabilities | 227,007 | 203,639 | |||||
Stockholders’ equity: | |||||||
1,710,463 | 1,676,622 | ||||||
Noncontrolling interest | (15,289 | ) | (15,591 | ) | |||
Total liabilities and equity | $ | 3,322,949 | $ | 3,241,702 | |||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended | |||||||
(in thousands) | 2024 | 2023 | |||||
Cash flows from operating activities: | |||||||
Net income | $ | 113,160 | $ | 63,144 | |||
Depreciation and amortization | 59,580 | 56,710 | |||||
(Gain) loss on sale-leaseback transaction and disposal group | (29,883 | ) | 12,965 | ||||
Loss on | 4,092 | — | |||||
Deferred income taxes | (12,903 | ) | (8,441 | ) | |||
Loss (gain) on disposal of fixed assets | 1,107 | (534 | ) | ||||
Receivables | 62,915 | 62,673 | |||||
Inventories | (39,873 | ) | (63,139 | ) | |||
Accounts payable | 68,248 | 40,708 | |||||
Other assets | (602 | ) | 1,472 | ||||
Leased assets | (4,254 | ) | (9,830 | ) | |||
Other operating items, net | (48,079 | ) | (63,350 | ) | |||
Net cash flows provided by operating activities | 173,508 | 92,378 | |||||
Cash flows from investing activities: | |||||||
Capital expenditures | (31,912 | ) | (26,530 | ) | |||
Proceeds from sale-leaseback transaction | 44,292 | — | |||||
Proceeds from sale of fixed assets | 2,390 | 3,505 | |||||
Purchase of investments | (17,162 | ) | — | ||||
Sale of investments | 13,070 | — | |||||
Acquisitions, net of cash acquired | (21,472 | ) | — | ||||
Net cash used for investing activities | (10,794 | ) | (23,025 | ) | |||
Cash flows from financing activities: | |||||||
Repayment of long-term debt | (1,551 | ) | (26,563 | ) | |||
Repurchases of common stock | (49,399 | ) | (40,428 | ) | |||
Dividends paid | (16,247 | ) | (15,011 | ) | |||
Other | 3,104 | 10,895 | |||||
Net cash used for financing activities | (64,093 | ) | (71,107 | ) | |||
Effect of exchange rate changes on cash and cash equivalents | (1,161 | ) | (437 | ) | |||
Net increase (decrease) in cash and cash equivalents | 97,460 | (2,191 | ) | ||||
Cash and cash equivalents at beginning of period | 288,557 | 250,187 | |||||
Cash and cash equivalents at end of period | $ | 386,017 | $ | 247,996 | |||
BUSINESS SEGMENT DATA
(UNAUDITED)
Three Months Ended | |||||||||||
(in thousands) | 2024 | 2023 | 2023 | ||||||||
Segment revenue: | |||||||||||
Production Chemical Technologies | $ | 590,108 | $ | 634,137 | $ | 591,684 | |||||
Production & Automation Technologies | 252,614 | 241,294 | 251,548 | ||||||||
Drilling Technologies | 55,206 | 46,821 | 56,707 | ||||||||
Reservoir Chemical Technologies | 24,705 | 21,402 | 25,806 | ||||||||
Corporate and other | (492 | ) | (99 | ) | 22,602 | ||||||
Total revenue | $ | 922,141 | $ | 943,555 | $ | 948,347 | |||||
Income before income taxes: | |||||||||||
Segment operating profit (loss): | |||||||||||
Production Chemical Technologies | $ | 87,832 | $ | 102,179 | $ | 66,314 | |||||
Production & Automation Technologies | 28,470 | 22,110 | 34,792 | ||||||||
Drilling Technologies | 44,402 | 8,679 | 11,887 | ||||||||
Reservoir Chemical Technologies | 3,746 | 3,907 | 1,987 | ||||||||
Total segment operating profit | 164,450 | 136,875 | 114,980 | ||||||||
Corporate and other | 10,759 | 9,139 | 10,701 | ||||||||
Interest expense, net | 13,935 | 13,808 | 12,466 | ||||||||
Income before income taxes | $ | 139,756 | $ | 113,928 | $ | 91,813 | |||||
Operating profit margin / income before income taxes margin: | |||||||||||
Production Chemical Technologies | 14.9 | % | 16.1 | % | 11.2 | % | |||||
Production & Automation Technologies | 11.3 | % | 9.2 | % | 13.8 | % | |||||
Drilling Technologies | 80.4 | % | 18.5 | % | 21.0 | % | |||||
Reservoir Chemical Technologies | 15.2 | % | 18.3 | % | 7.7 | % | |||||
ChampionX Consolidated | 15.2 | % | 12.1 | % | 9.7 | % | |||||
Adjusted EBITDA | |||||||||||
Production Chemical Technologies | $ | 118,031 | $ | 139,107 | $ | 113,608 | |||||
Production & Automation Technologies | 60,340 | 52,800 | 59,943 | ||||||||
Drilling Technologies | 16,074 | 10,361 | 13,463 | ||||||||
Reservoir Chemical Technologies | 5,346 | 5,501 | 4,414 | ||||||||
Corporate and other | (8,079 | ) | (9,624 | ) | (6,569 | ) | |||||
Adjusted EBITDA | $ | 191,712 | $ | 198,145 | $ | 184,859 | |||||
Adjusted EBITDA margin | |||||||||||
Production Chemical Technologies | 20.0 | % | 21.9 | % | 19.2 | % | |||||
Production & Automation Technologies | 23.9 | % | 21.9 | % | 23.8 | % | |||||
Drilling Technologies | 29.1 | % | 22.1 | % | 23.7 | % | |||||
Reservoir Chemical Technologies | 21.6 | % | 25.7 | % | 17.1 | % | |||||
ChampionX Consolidated | 20.8 | % | 21.0 | % | 19.5 | % | |||||
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
Three Months Ended | |||||||||||
(in thousands) | 2024 | 2023 | 2023 | ||||||||
Net income attributable to | $ | 112,923 | $ | 77,198 | $ | 63,532 | |||||
Pre-tax adjustments: | |||||||||||
(Gain) loss on sale leaseback transaction and disposal group(1) | (29,883 | ) | — | 12,965 | |||||||
152 | 160 | 521 | |||||||||
Restructuring and other related charges | 1,709 | 2,407 | 4,399 | ||||||||
Merger integration costs | — | — | 245 | ||||||||
Acquisition costs and related adjustments(3) | 1,232 | (6,817 | ) | (3,512 | ) | ||||||
Intellectual property defense | 779 | 638 | — | ||||||||
305 | 660 | — | |||||||||
Foreign currency transaction losses, net | 55 | 14,651 | 9,252 | ||||||||
Loss on | 4,092 | — | — | ||||||||
Tax impact of adjustments | 5,066 | (2,600 | ) | (5,307 | ) | ||||||
Adjusted net income attributable to | 96,430 | 86,297 | 82,095 | ||||||||
Tax impact of adjustments | (5,066 | ) | 2,600 | 5,307 | |||||||
Net income (loss) attributable to noncontrolling interest | 237 | 959 | (388 | ) | |||||||
Depreciation and amortization | 59,580 | 58,710 | 56,710 | ||||||||
Provision for income taxes | 26,596 | 35,771 | 28,669 | ||||||||
Interest expense, net | 13,935 | 13,808 | 12,466 | ||||||||
Adjusted EBITDA | $ | 191,712 | $ | 198,145 | $ | 184,859 |
_______________________
(1) Amount represents the gain on the sale and leaseback of certain buildings and land for the three months ended
(2) Includes charges incurred related to legal and professional fees to comply with, as well as additional foreign currency exchange losses associated with, the sanctions imposed in
(3) Includes revenue associated with the amortization of a liability established as part of the merger transaction with Ecolab Inc. (“Ecolab”) to acquire the Chemical Technologies business, representing unfavorable terms under the Cross Supply Agreement, as well as costs incurred for the acquisition of businesses. During the fourth quarter of 2023, we recorded a fair value adjustment to contingent consideration on a prior acquisition as well as the settlement of an item pursuant to the tax matters agreement with Ecolab.
Three Months Ended | |||||||||||
(in thousands) | 2024 | 2023 | 2023 | ||||||||
Diluted earnings per share attributable to | $ | 0.58 | $ | 0.39 | $ | 0.31 | |||||
Per share adjustments: | |||||||||||
(Gain) loss on sale leaseback transaction and disposal group | (0.15 | ) | — | 0.06 | |||||||
— | — | — | |||||||||
Restructuring and other related charges | 0.01 | 0.01 | 0.03 | ||||||||
Merger integration costs | — | — | — | ||||||||
Acquisition costs and related adjustments | 0.01 | (0.03 | ) | (0.02 | ) | ||||||
Intellectual property defense | — | — | — | ||||||||
— | 0.01 | — | |||||||||
Foreign currency transaction losses, net | — | 0.07 | 0.05 | ||||||||
Loss on | 0.02 | — | — | ||||||||
Tax impact of adjustments | 0.03 | (0.01 | ) | (0.02 | ) | ||||||
Adjusted diluted earnings per share attributable to | $ | 0.50 | $ | 0.44 | $ | 0.41 | |||||
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES BY SEGMENT
(UNAUDITED)
Three Months Ended | |||||||||||
(in thousands) | 2024 | 2023 | 2023 | ||||||||
Production Chemical Technologies | |||||||||||
Segment operating profit | $ | 87,832 | $ | 102,179 | $ | 66,314 | |||||
Non-GAAP adjustments | 3,933 | 11,194 | 23,115 | ||||||||
Depreciation and amortization | 26,266 | 25,734 | 24,179 | ||||||||
Segment adjusted EBITDA | $ | 118,031 | $ | 139,107 | $ | 113,608 | |||||
Production & Automation Technologies | |||||||||||
Segment operating profit | $ | 28,470 | $ | 22,110 | $ | 34,792 | |||||
Non-GAAP adjustments | 2,076 | 1,231 | 914 | ||||||||
Depreciation and amortization | 29,794 | 29,459 | 24,237 | ||||||||
Segment adjusted EBITDA | $ | 60,340 | $ | 52,800 | $ | 59,943 | |||||
Drilling Technologies | |||||||||||
Segment operating profit | $ | 44,402 | $ | 8,679 | $ | 11,887 | |||||
Non-GAAP adjustments | (29,883 | ) | 109 | — | |||||||
Depreciation and amortization | 1,555 | 1,573 | 1,576 | ||||||||
Segment adjusted EBITDA | $ | 16,074 | $ | 10,361 | $ | 13,463 | |||||
Reservoir Chemical Technologies | |||||||||||
Segment operating profit | $ | 3,746 | $ | 3,907 | $ | 1,987 | |||||
Non-GAAP adjustments | 16 | 4 | 810 | ||||||||
Depreciation and amortization | 1,584 | 1,590 | 1,617 | ||||||||
Segment adjusted EBITDA | $ | 5,346 | $ | 5,501 | $ | 4,414 | |||||
Corporate and other | |||||||||||
Segment operating profit | $ | (24,694 | ) | $ | (22,947 | ) | $ | (23,167 | ) | ||
Non-GAAP adjustments | 2,299 | (839 | ) | (969 | ) | ||||||
Depreciation and amortization | 381 | 354 | 5,101 | ||||||||
Interest expense, net | 13,935 | 13,808 | 12,466 | ||||||||
Segment adjusted EBITDA | $ | (8,079 | ) | $ | (9,624 | ) | $ | (6,569 | ) | ||
Free Cash Flow
Three Months Ended | |||||||||||
(in thousands) | 2024 | 2023 | 2023 | ||||||||
Free Cash Flow | |||||||||||
Cash flows from operating activities | $ | 173,508 | $ | 168,953 | $ | 92,378 | |||||
Less: Capital expenditures, net of proceeds from sale of fixed assets | (29,522 | ) | (29,142 | ) | (23,025 | ) | |||||
Free cash flow | $ | 143,986 | $ | 139,811 | $ | 69,353 | |||||
Cash From Operating Activities to Revenue Ratio | |||||||||||
Cash flows from operating activities | $ | 173,508 | $ | 168,953 | $ | 92,378 | |||||
Revenue | $ | 922,141 | $ | 943,555 | $ | 948,347 | |||||
Cash from operating activities to revenue ratio | 19 | % | 18 | % | 10 | % | |||||
Free Cash Flow to Revenue Ratio | |||||||||||
Free cash flow | $ | 143,986 | $ | 139,811 | $ | 69,353 | |||||
Revenue | $ | 922,141 | $ | 943,555 | $ | 948,347 | |||||
Free cash flow to revenue ratio | 16 | % | 15 | % | 7 | % | |||||
Free Cash Flow to Adjusted EBITDA Ratio | |||||||||||
Free cash flow | $ | 143,986 | $ | 139,811 | $ | 69,353 | |||||
Adjusted EBITDA | $ | 191,712 | $ | 198,145 | $ | 184,859 | |||||
Free cash flow to adjusted EBITDA ratio | 75 | % | 71 | % | 38 | % |
Source:
2024 GlobeNewswire, Inc., source