附錄99.1
ChampionX公佈2024年第三季度業績
•營業收入為90650萬美元
•凈利潤歸屬於championx為7200萬美元
•調整後的凈利潤為8590萬美元
•經調整後的EBITDA為19750萬美元
•稅前收入佔11.2%的毛利率
•調整後的EBITDA利潤率為21.8%
•營運活動現金流量為14130萬美元，自由現金流為10810萬美元
2024年10月23日，德克薩斯州伍德蘭茲 - championx公司（納斯達克代號：CHX）（「championx」或「公司」）今天宣布了2024年第三季度的業績。營業收入為$90650萬，歸屬於championx的凈利潤為$7200萬，調整後的EBITDA為$19750萬。所得稅前收入率為11.2%，調整後的EBITDA率為21.8%。營運活動現金為$14130萬，自由現金流為$10810萬。
首席執行官意見
第三季度展示了我們championx投資組合的抗打擊能力，我們實現了強勁的調整後息稅折舊及攤銷前利潤（EBITDA）和調整後EBITDA利潤率，並產生了強勁的自由現金流。這些結果直接來自我們全球員工的努力，他們一直專注於為客戶提供優質服務，我對他們為實現我們的企業宗旨改善生活而付出的奉獻心存感激。championx總裁兼首席執行官Sivasankaran“Soma” Somasundaram表示。
在2024年第三季，我們實現了總收入為$90700萬，較去年同期下降4％，北美、中東及非洲、歐洲和亞太地區的增長被拉丁美洲所抵銷，而拉丁美洲受墨西哥銷售下降的影響。除墨西哥外，所有地區的收入同比增長6％。我們的收入按季度增長1％，北美和國際收入均略微超過第二季。北美收入按季度增長2%，主要由我們的人工抽油業務銷售量增加推動。國際收入按季度增長1%，部分促使因RMSpumptools的貢獻，該公司於該季收購。我們實現了$7200萬歸屬於championx的淨利潤，稅前利潤率為11.2％，並交付了$19800萬調整後的EBITDA，代表21.8％的調整後EBITDA率，是作為championx時的最高水平，這證明了我們團隊對生產力和盈利能力的重視。
營運活動產生的現金流量在第三季度為14100萬美元，相當於ChampionX歸屬於股東的凈利潤的196％，我們產生了強勁的自由現金流10800萬美元，相當於該期調整後EBITDA的55％。我們仍然有信心在2024年實現至少50％的調整後EBITDA轉為自由現金流。我們的資產負債表和財務狀況保持堅強，在第三季度結束時，我們的流動資產約為11億美元。 流動性方面，我們以約39億美元現金和約67億美元可用額度結束第三季度，包括透過循環信貸機構提供的額度。
同意被SLB收購
2024年4月2日，SLb（紐交所：SLB）和championx共同宣布簽署了一份明確的《合併協議和計畫書》（“合併協議”），SLb 將以全股票交易方式收購championx。 該交易獲得了championx董事會的全票一致批准，該交易於 2024年6月18日舉行的特別股東大會上獲得了championx股東的批准。 該交易需經監管機構和其他慣例收購條件的批准。 目前預計該交易將於 2025年第一季度結束。
ChampionX可能會繼續按照慣例的記錄和支付日期支付其定期季度現金分紅派息，但須遵守併購協議下的某些限制。鑑於SLb對ChampionX的即將完成收購，ChampionX已停止提供每季度的指引，不會舉行電話會議或網絡研討會，討論其2024年第三季度的業績。
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製造化工科技
2024年第三季度生產化學技術的營業收入為55950萬美元，較上期減少1000萬美元，累計下降2%，主要是因為國際銷售量下降。
分部營業利潤為8,730萬美元，調整後的分部EBITDA為12,060萬美元。分部營業利潤率為15.6％，較上季度增加60個基點，而調整後的分部EBITDA利潤率為21.6％，較上季度增加94個基點。分部營業利潤率和調整後的分部EBITDA利潤率的季度增加源於優秀的成本管理、提高生產力和有利產品組合。
生產和自動化技術
2024年第三季度Production & Automation Technologies的營業收入為27570萬美元，按照順序增加了3120萬美元，或13％，主要是由於北美對人工揚升系統的需求增加，以及在該季度完成的對RMSpumptools的收購。2024年第三季度數位產品的營業收入為5790萬美元，按照順序增加了7％，主要受北美客戶活動增加的推動。
分部營業利潤為$3410萬，調整後的分部EBITDA為$6960萬。分部營業利潤率為12.4%，按季度計增加330個基點，而調整後的分部EBITDA率為25.2%，按季度計增加118個基點。分部營業利潤率和調整後的分部EBITDA率的提高，主要源自較高的銷售量、生產力提高以及有利的產品組合。
鑽探技術
2024年第三季度鑽探技術的營業收入為5180萬美元，按季減少110萬美元，降幅為2%，主要由於軸承產品線銷售量較低，與客戶庫存水平管理相關。
分部營業利潤為1150萬美元，調整後的分部EBITDA為1290萬美元。分部營業利潤率為22.2%，較上一季的22.4%略低，而調整後的分部EBITDA率為24.8%，較上一季下降2個基點，主要因成交量減少。
儲備化學技術
2024年第三季度Reservoir Chemical Technologies的營業收入為2050萬美元，較上季減少660萬美元，環比下降24%，主要由於美國和國際銷售量降低。
分部營業利潤為170萬美元，調整後的分部EBITDA為330萬美元。分部營業利潤率為8.2%，較上期下降793個基點，而調整後的分部EBITDA利潤率為16.0%，較上期下降592個基點。分部營業利潤率和調整後的分部EBITDA利潤率的下降是由於較低的交易量引起的。
其他業務亮點
•championx憑其AnX盤管產品線在最佳塗層/腐蝕先進科技方面贏得海灣能源資訊卓越獎。該公司還入圍其他四個類別：SMARTEN™ XE ESP控制系統入圍最佳控制、儀器、自動化科技類別；Pump Checker™氣體升力分析模組入圍最佳數位轉型-上游類別；化學技術減碳計畫入圍最佳HSE貢獻類別；以及ChampionX多元、平等和包容性計畫入圍能源DE&I類別。
Other Business Highlights: Production Chemical Technologies and Reservoir Chemical Technologies
•在亞太地區，ChampionX獲得了一份重要的新合同，將為一個新的浮動生產儲存和卸載（FPSO）單元提供工程服務和初始化學品供應，該單元將部署在澳大利亞大型氣凝析田。 操作計劃於2025年上半年開始，將大幅貢獻該地區的液化天然氣（LNG）生產能力。 這一戰略勝利進一步加強了我們在該地區的存在，並強化了我們對為上游客戶提供創新、高質量解決方案的承諾。
•championx被授予一份大型首次填充合同，供應多種產品化學品，包括對抗腐蝕劑、防垢劑和生物殺菌劑，用於沙特阿拉伯一個重要的陸地石油和燃料幣增量項目。
•ChampionX has secured a first-fill contract to supply production chemicals for a significant gas development program in Qatar.
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•ChampionX secured a multi-million-dollar order for a novel application of UltraFab in Carbon Capture, Utilization, and Storage (CCUS) for delivery in 2025.
•ChampionX recently completed the pre-commission cleaning, chemical treatment, and readiness work for the 303-mile natural gas Mountain Valley Pipeline connecting Marcellus and Utica shale production to markets in the Mid- and South-Atlantic regions.
•In the Canadian oil sands, ChampionX completed a steam additive first-fill program for a major technology development trial, leading to additional market interest.
•ChampionX was awarded a three-year contract extension from a major producer in the San Juan Basin in California, recognizing our service, people, and commitment to helping the producer achieve their strategic goals as reasons for the extension.
•As part of an initiative to expand our technology into adjacent markets, ChampionX Reservoir Chemical Technologies was awarded business with a premier supplier of local sand used for hydraulic fracturing in the Permian Basin. Our solution affords the supplier a significant savings on sand drying costs and is designed to increase operational throughput.
Other Business Highlights: Production & Automation Technologies
•In the third quarter, ChampionX completed the acquisition of RMSpumptools, a provider of advanced mechanical and electrical solutions for complex ESP systems. The acquisition expands ChampionX’s international footprint while providing greater opportunities for RMSpumptools in North America. Soon after the acquisition close, our Permian ESP team collaborated with RMSpumptools to deliver a sand control solution to a major oil company operating in the Permian basin.
•ChampionX Artificial Lift expanded its Latin America footprint into Ecuador with a contract award for two 400HP multiplex surface pump systems for jet lift applications. This accomplishment is the result of a strengthening partnership with a Latin America independent operator that is expanding its operations from Colombia to Ecuador. Unlike typical systems, the surface pump and oil vessel required for jet lifted wells will be built on one skid with all the necessary piping, which reduces assembly time at the wellsite.
•Building on the combined strengths of our XSPOC artificial lift software and the acquisition of Artificial Lift Performance Limited Pump Checker software, ChampionX introduced ALLY™ production optimization digital solutions, debuting a modern interface with user-friendly dashboards and intuitive workflows, paired with powerful performance—ingesting, processing, and displaying more data than ever before. It is a one-stop-shop for production teams to manage and optimize their producing assets, regardless of lift type or equipment provider. Building on the launch of this new digital solution, in the third quarter ChampionX secured seven new clients for our production optimization software solution.
•ChampionX launched the PCS Ferguson new generation SMARTEN™ Unify control system, which is engineered to deliver sophisticated digital automation and optimization capabilities at a cost of ownership that fits within the narrow economic profile of plunger lifted wells. SMARTEN Unify provides enhanced visibility to what is happening “live” at any second in a plunger lift system, eliminating the need for operating based on calculated guesses.
Other Business Highlights: Drilling Technologies
•Drilling Technologies’ diamond bearings products continue to see positive test results in additional downhole drilling and completion tools applications.
•Drilling Technologies’ diamond inserts business had significant new products launches with four major customers.
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About Non-GAAP Measures
In addition to financial results determined in accordance with generally accepted accounting principles in the United States (“GAAP”), this news release presents non-GAAP financial measures. Management believes that adjusted EBITDA, adjusted EBITDA margin, adjusted net income attributable to ChampionX and adjusted diluted earnings per share attributable to ChampionX, provide useful information to investors regarding the Company’s financial condition and results of operations because they reflect the core operating results of our businesses and help facilitate comparisons of operating performance across periods. In addition, free cash flow, free cash flow to adjusted EBITDA ratio, and free cash flow to revenue ratio are used by management to measure our ability to generate positive cash flow for debt reduction and to support our strategic objectives. Although management believes the aforementioned non-GAAP financial measures are good tools for internal use and the investment community in evaluating ChampionX’s overall financial performance, the foregoing non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, other measures of financial performance prepared in accordance with GAAP. A reconciliation of these non-GAAP measures to the most directly comparable GAAP measures is included in the accompanying financial tables.
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About ChampionX
ChampionX is a global leader in chemistry solutions, artificial lift systems, and highly engineered equipment and technologies that help companies drill for and produce oil and gas safely, efficiently, and sustainably around the world. ChampionX’s expertise, innovative products, and digital technologies provide enhanced oil and gas production, transportation, and real-time emissions monitoring throughout the lifecycle of a well. To learn more about ChampionX, visit our website at www.ChampionX.com.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include statements relating to the proposed transaction between SLB and ChampionX, including statements regarding the benefits of the transaction and the anticipated timing of the transaction, and information regarding the businesses of SLB and ChampionX, including expectations regarding outlook and all underlying assumptions, SLB’s and ChampionX’s objectives, plans and strategies, information relating to operating trends in markets where SLB and ChampionX operate, statements that contain projections of results of operations or of financial condition and all other statements other than statements of historical fact that address activities, events or developments that SLB or ChampionX intends, expects, projects, believes or anticipates will or may occur in the future. Such statements are based on management’s beliefs and assumptions made based on information currently available to management. All statements in this communication, other than statements of historical fact, are forward-looking statements that may be identified by the use of the words “outlook,” “guidance,” “expects,” “believes,” “anticipates,” “should,” “estimates,” “intends,” “plans,” “seeks,” “targets,” “may,” “can,” “believe,” “predict,” “potential,” “projected,” “projections,” “precursor,” “forecast,” “ambition,” “goal,” “scheduled,” “think,” “could,” “would,” “will,” “see,” “likely,” and other similar expressions or variations, but not all forward-looking statements include such words. These forward-looking statements involve known and unknown risks and uncertainties, and which may cause SLB’s or ChampionX’s actual results and performance to be materially different from those expressed or implied in the forward-looking statements. Factors and risks that may impact future results and performance include, but are not limited to those factors and risks described in Part I, “Item 1. Business”, “Item 1A. Risk Factors”, and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in SLB’s Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the Securities and Exchange Commission (the “SEC”) on January 24, 2024 and Part 1, Item 1A, “Risk Factors” in ChampionX’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 6, 2024, and each of their respective, subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. These include, but are not limited to, and in each case as a possible result of the proposed transaction on each of SLB and ChampionX: the ultimate outcome of the proposed transaction between SLB and ChampionX, including the effect of the announcement of the proposed transaction; the ability to operate the SLB and ChampionX respective businesses, including business disruptions; difficulties in retaining and hiring key personnel and employees; the ability to maintain favorable business relationships with customers, suppliers and other business partners; the terms and timing of the proposed transaction; the occurrence of any event, change or other circumstance that could give rise to the termination of the proposed transaction; the anticipated or actual tax treatment of the proposed transaction; the ability to satisfy closing conditions to the completion of the proposed transaction (including the adoption of the merger agreement in respect of the proposed transaction by ChampionX stockholders); other risks related to the completion of the proposed transaction and actions related thereto; the ability of SLB and ChampionX to integrate the business successfully and to achieve anticipated synergies and value creation from the proposed transaction; changes in demand for SLB’s or ChampionX’s products and services; global market, political and economic conditions, including in the countries in which SLB and ChampionX operate; the ability to secure government regulatory approvals on the terms expected, at all or in a timely manner; the extent of growth of the oilfield services market generally, including for chemical solutions in production and midstream operations; the global macro-economic environment, including headwinds caused by inflation, rising interest rates, unfavorable currency exchange rates, and potential recessionary or depressionary conditions; the impact of shifts in prices or margins of the products that SLB or ChampionX sells or services that SLB or ChampionX provides, including due to a shift towards lower margin products or services; cyber-attacks, information security and data privacy; the impact of public health crises, such as pandemics (including COVID-19) and epidemics and any related company or government policies and actions to protect the health and safety of individuals or government policies or actions to maintain the functioning of national or global economies and markets; trends in crude oil and natural gas prices, including trends in chemical solutions across the oil and natural gas industries, that may affect the drilling and production activity, profitability and financial stability of SLB’s and ChampionX’s customers and therefore the demand for, and profitability of, their products and services; litigation and regulatory proceedings, including any proceedings that may be instituted against SLB or ChampionX related to the proposed transaction; failure to effectively and timely address energy transitions that could adversely affect the businesses of SLB or ChampionX, results of operations, and cash flows of SLB or ChampionX; and disruptions of SLB’s or ChampionX’s information technology systems.
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These risks, as well as other risks related to the proposed transaction, are included in the Form S-4 and proxy statement/prospectus that was filed with the SEC in connection with the proposed transaction. While the list of factors presented here is, and the list of factors presented in the registration statement on Form S-4 are, considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties. For additional information about other factors that could cause actual results to differ materially from those described in the forward-looking statements, please refer to SLB’s and ChampionX’s respective periodic reports and other filings with the SEC, including the risk factors identified in SLB’s and ChampionX’s Annual Reports on Form 10-K, respectively, and SLB’s and ChampionX’s subsequent Quarterly Reports on Form 10-Q. The forward-looking statements included in this communication are made only as of the date hereof. Neither SLB nor ChampionX undertakes any obligation to update any forward-looking statements to reflect subsequent events or circumstances, except as required by law.
Investor Contact: Byron Pope
byron.pope@championx.com
281-602-0094
Media Contact: John Breed
john.breed@championx.com
281-403-5751
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CHAMPIONX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||
| September 30, | June 30, | September 30, | September 30, | ||||||||||||||||||||||||||
| (in thousands, except per share amounts) | 2024 | 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||||||
| Revenue | $ | 906,533 | $ | 893,272 | $ | 939,783 | $ | 2,721,946 | $ | 2,814,730 | |||||||||||||||||||
| Cost of goods and services | 608,764 | 613,426 | 647,923 | 1,845,127 | 1,957,309 | ||||||||||||||||||||||||
| Gross profit | 297,769 | 279,846 | 291,860 | 876,819 | 857,421 | ||||||||||||||||||||||||
| Costs and expenses: | |||||||||||||||||||||||||||||
| Selling, general and administrative expense | 180,501 | 182,995 | 162,317 | 535,910 | 485,617 | ||||||||||||||||||||||||
| (Gain) loss on sale-leaseback transaction and disposal group | 57 | — | — | (29,826) | 12,965 | ||||||||||||||||||||||||
| Interest expense, net | 14,137 | 15,421 | 13,744 | 43,493 | 40,754 | ||||||||||||||||||||||||
| Foreign currency transaction (gains) losses, net | 3,505 | (2,767) | 7,992 | 793 | 21,683 | ||||||||||||||||||||||||
| Other expense (income), net | (2,176) | 938 | (1,994) | 1,689 | (13,494) | ||||||||||||||||||||||||
| Income before income taxes | 101,745 | 83,259 | 109,801 | 324,760 | 309,896 | ||||||||||||||||||||||||
| Provision for income taxes | 28,078 | 27,868 | 29,009 | 82,542 | 69,334 | ||||||||||||||||||||||||
| Net income | 73,667 | 55,391 | 80,792 | 242,218 | 240,562 | ||||||||||||||||||||||||
| Net income attributable to noncontrolling interest | 1,659 | 2,822 | 3,081 | 4,718 | 3,522 | ||||||||||||||||||||||||
| Net income attributable to ChampionX | $ | 72,008 | $ | 52,569 | $ | 77,711 | $ | 237,500 | $ | 237,040 | |||||||||||||||||||
| Earnings per share attributable to ChampionX: | |||||||||||||||||||||||||||||
| Basic | $ | 0.38 | $ | 0.28 | $ | 0.40 | $ | 1.25 | $ | 1.20 | |||||||||||||||||||
| Diluted | $ | 0.37 | $ | 0.27 | $ | 0.39 | $ | 1.23 | $ | 1.18 | |||||||||||||||||||
| Weighted-average shares outstanding: | |||||||||||||||||||||||||||||
| Basic | 190,496 | 190,426 | 195,881 | 190,575 | 197,058 | ||||||||||||||||||||||||
| Diluted | 193,362 | 193,257 | 199,592 | 193,655 | 201,025 | ||||||||||||||||||||||||
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CHAMPIONX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
| (in thousands) | September 30, 2024 | December 31, 2023 | |||||||||
| ASSETS | |||||||||||
| Current Assets: | |||||||||||
| Cash and cash equivalents | $ | 389,109 | $ | 288,557 | |||||||
| Receivables, net | 434,107 | 534,534 | |||||||||
| Inventories, net | 546,817 | 521,549 | |||||||||
| Prepaid expenses and other current assets | 68,218 | 80,777 | |||||||||
| Total current assets | 1,438,251 | 1,425,417 | |||||||||
| Property, plant and equipment, net | 760,775 | 773,552 | |||||||||
| Goodwill | 729,783 | 669,064 | |||||||||
| Intangible assets, net | 270,361 | 243,553 | |||||||||
| Other non-current assets | 178,490 | 130,116 | |||||||||
| Total assets | $ | 3,377,660 | $ | 3,241,702 | |||||||
| LIABILITIES AND EQUITY | |||||||||||
| Current Liabilities: | |||||||||||
| Current portion of long-term debt | $ | 6,203 | $ | 6,203 | |||||||
| Accounts payable | 455,485 | 451,680 | |||||||||
| Other current liabilities | 278,498 | 324,866 | |||||||||
| Total current liabilities | 740,186 | 782,749 | |||||||||
| Long-term debt | 592,161 | 594,283 | |||||||||
| Other long-term liabilities | 246,296 | 203,639 | |||||||||
| Stockholders’ equity: | |||||||||||
| ChampionX stockholders’ equity | 1,814,310 | 1,676,622 | |||||||||
| Noncontrolling interest | (15,293) | (15,591) | |||||||||
| Total liabilities and equity | $ | 3,377,660 | $ | 3,241,702 | |||||||
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CHAMPIONX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| Nine Months Ended September 30, | |||||||||||
| (in thousands) | 2024 | 2023 | |||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $ | 242,218 | $ | 240,562 | |||||||
| Depreciation and amortization | 183,291 | 177,226 | |||||||||
| (Gain) loss on sale-leaseback transaction and disposal group | (29,826) | 12,965 | |||||||||
| Loss on Argentina Blue Chip Swap transaction | 7,086 | — | |||||||||
| Deferred income taxes | (16,810) | (15,380) | |||||||||
| Loss (gain) on disposal of fixed assets | 868 | (1,480) | |||||||||
| Receivables | 115,269 | 85,181 | |||||||||
| Inventories | (40,118) | (50,011) | |||||||||
| Accounts payable | (30,577) | (7,018) | |||||||||
| Other assets | 6,665 | 17,470 | |||||||||
| Leased assets | (24,193) | (38,597) | |||||||||
| Other operating items, net | (31,442) | (49,600) | |||||||||
| Net cash flows provided by operating activities | 382,431 | 371,318 | |||||||||
| Cash flows from investing activities: | |||||||||||
| Capital expenditures | (101,403) | (110,965) | |||||||||
| Proceeds from sale of fixed assets | 9,323 | 12,328 | |||||||||
| Proceeds from sale-leaseback transaction | 44,292 | — | |||||||||
| Purchase of investments | (31,526) | — | |||||||||
| Sale of investments | 24,358 | — | |||||||||
| Acquisitions, net of cash acquired | (123,269) | — | |||||||||
| Net cash used for investing activities | (178,225) | (98,637) | |||||||||
| Cash flows from financing activities: | |||||||||||
| Proceeds from long-term debt | — | 15,500 | |||||||||
| Repayment of long-term debt | (4,652) | (43,625) | |||||||||
| Repurchases of common stock | (49,399) | (159,730) | |||||||||
| Dividends paid | (52,430) | (48,309) | |||||||||
| Other | 3,854 | (384) | |||||||||
| Net cash used for financing activities | (102,627) | (236,548) | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | (1,027) | (1,314) | |||||||||
| Net increase in cash and cash equivalents | 100,552 | 34,819 | |||||||||
| Cash and cash equivalents at beginning of period | 288,557 | 250,187 | |||||||||
| Cash and cash equivalents at end of period | $ | 389,109 | $ | 285,006 | |||||||
8
CHAMPIONX CORPORATION
BUSINESS SEGMENT DATA
(UNAUDITED)
| Three Months Ended | |||||||||||||||||
| September 30, | June 30, | September 30, | |||||||||||||||
| (in thousands) | 2024 | 2024 | 2023 | ||||||||||||||
| Segment revenue: | |||||||||||||||||
| Production Chemical Technologies | $ | 559,539 | $ | 569,577 | $ | 604,254 | |||||||||||
| Production & Automation Technologies | 275,700 | 244,487 | 256,148 | ||||||||||||||
| Drilling Technologies | 51,792 | 52,888 | 54,869 | ||||||||||||||
| Reservoir Chemical Technologies | 20,531 | 27,123 | 25,093 | ||||||||||||||
| Corporate and other | (1,029) | (803) | (581) | ||||||||||||||
| Total revenue | $ | 906,533 | $ | 893,272 | $ | 939,783 | |||||||||||
| Income before income taxes: | |||||||||||||||||
| Segment operating profit (loss): | |||||||||||||||||
| Production Chemical Technologies | $ | 87,260 | $ | 85,388 | $ | 94,560 | |||||||||||
| Production & Automation Technologies | 34,136 | 22,207 | 28,299 | ||||||||||||||
| Drilling Technologies | 11,501 | 11,863 | 12,255 | ||||||||||||||
| Reservoir Chemical Technologies | 1,675 | 4,363 | 2,461 | ||||||||||||||
| Total segment operating profit | 134,572 | 123,821 | 137,575 | ||||||||||||||
| Corporate and other | 18,690 | 25,141 | 14,030 | ||||||||||||||
| Interest expense, net | 14,137 | 15,421 | 13,744 | ||||||||||||||
| Income before income taxes | $ | 101,745 | $ | 83,259 | $ | 109,801 | |||||||||||
| Operating profit margin / income before income taxes margin: | |||||||||||||||||
| Production Chemical Technologies | 15.6 | % | 15.0 | % | 15.6 | % | |||||||||||
| Production & Automation Technologies | 12.4 | % | 9.1 | % | 11.0 | % | |||||||||||
| Drilling Technologies | 22.2 | % | 22.4 | % | 22.3 | % | |||||||||||
| Reservoir Chemical Technologies | 8.2 | % | 16.1 | % | 9.8 | % | |||||||||||
| ChampionX Consolidated | 11.2 | % | 9.3 | % | 11.7 | % | |||||||||||
| Adjusted EBITDA | |||||||||||||||||
| Production Chemical Technologies | $ | 120,622 | $ | 117,421 | $ | 133,101 | |||||||||||
| Production & Automation Technologies | 69,604 | 58,848 | 59,288 | ||||||||||||||
| Drilling Technologies | 12,867 | 13,149 | 13,786 | ||||||||||||||
| Reservoir Chemical Technologies | 3,292 | 5,954 | 4,198 | ||||||||||||||
| Corporate and other | (8,873) | (12,139) | (12,837) | ||||||||||||||
| Adjusted EBITDA | $ | 197,512 | $ | 183,233 | $ | 197,536 | |||||||||||
| Adjusted EBITDA margin | |||||||||||||||||
| Production Chemical Technologies | 21.6 | % | 20.6 | % | 22.0 | % | |||||||||||
| Production & Automation Technologies | 25.2 | % | 24.1 | % | 23.1 | % | |||||||||||
| Drilling Technologies | 24.8 | % | 24.9 | % | 25.1 | % | |||||||||||
| Reservoir Chemical Technologies | 16.0 | % | 22.0 | % | 16.7 | % | |||||||||||
| ChampionX Consolidated | 21.8 | % | 20.5 | % | 21.0 | % | |||||||||||
9
CHAMPIONX CORPORATION
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
| Three Months Ended | |||||||||||||||||
| September 30, | June 30, | September 30, | |||||||||||||||
| (in thousands) | 2024 | 2024 | 2023 | ||||||||||||||
| Net income attributable to ChampionX | $ | 72,008 | $ | 52,569 | $ | 77,711 | |||||||||||
| Pre-tax adjustments: | |||||||||||||||||
(Gain) loss on sale leaseback transaction and disposal group (1) | 57 | — | — | ||||||||||||||
Russia sanctions compliance and impacts (2) | 109 | 32 | 95 | ||||||||||||||
| Restructuring and other related charges | 5,317 | 7,927 | 1,228 | ||||||||||||||
Merger transaction costs (3) | 8,312 | 15,059 | — | ||||||||||||||
Acquisition costs and related adjustments (4) | 753 | 574 | — | ||||||||||||||
| Intellectual property defense | 69 | 531 | 220 | ||||||||||||||
| Merger-related indemnification responsibility | — | — | 722 | ||||||||||||||
| Tulsa, Oklahoma storm damage | — | — | 1,895 | ||||||||||||||
| Foreign currency transaction (gains) losses, net | 3,505 | (2,767) | 7,992 | ||||||||||||||
| Loss on Argentina Blue Chip Swap transaction | — | 2,994 | — | ||||||||||||||
| Tax impact of adjustments | (4,259) | (5,722) | (2,702) | ||||||||||||||
| Adjusted net income attributable to ChampionX | 85,871 | 71,197 | 87,161 | ||||||||||||||
| Tax impact of adjustments | 4,259 | 5,722 | 2,702 | ||||||||||||||
| Net income attributable to noncontrolling interest | 1,659 | 2,822 | 3,081 | ||||||||||||||
| Depreciation and amortization | 63,508 | 60,203 | 61,839 | ||||||||||||||
| Provision for income taxes | 28,078 | 27,868 | 29,009 | ||||||||||||||
| Interest expense, net | 14,137 | 15,421 | 13,744 | ||||||||||||||
| Adjusted EBITDA | $ | 197,512 | $ | 183,233 | $ | 197,536 | |||||||||||
_______________________
(1) Amount represents the gain on the sale and leaseback of certain buildings and land.
(2) Includes charges incurred related to legal and professional fees to comply with, as well as additional foreign currency exchange losses associated with, the sanctions imposed in Russia.
(3) Includes costs incurred in relation to the Merger Agreement with Schlumberger Limited, including third party legal and professional fees.
(4) Includes costs incurred for the acquisition of businesses.
10
| Three Months Ended | |||||||||||||||||
| September 30, | June 30, | September 30, | |||||||||||||||
| (in thousands) | 2024 | 2024 | 2023 | ||||||||||||||
| Diluted earnings per share attributable to ChampionX | $ | 0.37 | $ | 0.27 | $ | 0.39 | |||||||||||
| Per share adjustments: | |||||||||||||||||
| (Gain) loss on sale leaseback transaction and disposal group | — | — | — | ||||||||||||||
| Russia sanctions compliance and impacts | — | — | — | ||||||||||||||
| Restructuring and other related charges | 0.03 | 0.04 | 0.01 | ||||||||||||||
| Merger transaction costs | 0.04 | 0.08 | — | ||||||||||||||
| Acquisition costs and related adjustments | — | — | — | ||||||||||||||
| Intellectual property defense | — | — | — | ||||||||||||||
| Merger-related indemnification responsibility | — | — | 0.01 | ||||||||||||||
| Tulsa, Oklahoma storm damage | — | — | 0.01 | ||||||||||||||
| Foreign currency transaction (gains) losses, net | 0.02 | (0.01) | 0.04 | ||||||||||||||
| Loss on Argentina Blue Chip Swap transaction | — | 0.02 | — | ||||||||||||||
| Tax impact of adjustments | (0.02) | (0.03) | (0.02) | ||||||||||||||
| Adjusted diluted earnings per share attributable to ChampionX | $ | 0.44 | $ | 0.37 | $ | 0.44 | |||||||||||
11
CHAMPIONX CORPORATION
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES BY SEGMENT
(UNAUDITED)
| Three Months Ended | |||||||||||||||||
| September 30, | June 30, | September 30, | |||||||||||||||
| (in thousands) | 2024 | 2024 | 2023 | ||||||||||||||
| Production Chemical Technologies | |||||||||||||||||
| Segment operating profit | $ | 87,260 | $ | 85,388 | $ | 94,560 | |||||||||||
| Non-GAAP adjustments | 7,073 | 5,851 | 9,079 | ||||||||||||||
| Depreciation and amortization | 26,289 | 26,182 | 29,462 | ||||||||||||||
| Segment adjusted EBITDA | $ | 120,622 | $ | 117,421 | $ | 133,101 | |||||||||||
| Production & Automation Technologies | |||||||||||||||||
| Segment operating profit | $ | 34,136 | $ | 22,207 | $ | 28,299 | |||||||||||
| Non-GAAP adjustments | 1,656 | 6,000 | 2,089 | ||||||||||||||
| Depreciation and amortization | 33,812 | 30,641 | 28,900 | ||||||||||||||
| Segment adjusted EBITDA | $ | 69,604 | $ | 58,848 | $ | 59,288 | |||||||||||
| Drilling Technologies | |||||||||||||||||
| Segment operating profit | $ | 11,501 | $ | 11,863 | $ | 12,255 | |||||||||||
| Non-GAAP adjustments | 54 | — | (8) | ||||||||||||||
| Depreciation and amortization | 1,312 | 1,286 | 1,539 | ||||||||||||||
| Segment adjusted EBITDA | $ | 12,867 | $ | 13,149 | $ | 13,786 | |||||||||||
| Reservoir Chemical Technologies | |||||||||||||||||
| Segment operating profit | $ | 1,675 | $ | 4,363 | $ | 2,461 | |||||||||||
| Non-GAAP adjustments | 3 | 11 | 72 | ||||||||||||||
| Depreciation and amortization | 1,614 | 1,580 | 1,665 | ||||||||||||||
| Segment adjusted EBITDA | $ | 3,292 | $ | 5,954 | $ | 4,198 | |||||||||||
| Corporate and other | |||||||||||||||||
| Segment operating profit | $ | (32,827) | $ | (40,562) | $ | (27,774) | |||||||||||
| Non-GAAP adjustments | 9,336 | 12,488 | 920 | ||||||||||||||
| Depreciation and amortization | 481 | 514 | 273 | ||||||||||||||
| Interest expense, net | 14,137 | 15,421 | 13,744 | ||||||||||||||
| Segment adjusted EBITDA | $ | (8,873) | $ | (12,139) | $ | (12,837) | |||||||||||
12
Free Cash Flow
| Three Months Ended | |||||||||||||||||
| September 30, | June 30, | September 30, | |||||||||||||||
| (in thousands) | 2024 | 2024 | 2023 | ||||||||||||||
| Free Cash Flow | |||||||||||||||||
| Cash flows from operating activities | $ | 141,298 | $ | 67,625 | $ | 163,030 | |||||||||||
| Less: Capital expenditures, net of proceeds from sale of fixed assets | (33,248) | (29,310) | (48,469) | ||||||||||||||
| Free cash flow | $ | 108,050 | $ | 38,315 | $ | 114,561 | |||||||||||
| Cash From Operating Activities to Revenue Ratio | |||||||||||||||||
| Cash flows from operating activities | $ | 141,298 | $ | 67,625 | $ | 163,030 | |||||||||||
| Revenue | $ | 906,533 | $ | 893,272 | $ | 939,783 | |||||||||||
| Cash from operating activities to revenue ratio | 16 | % | 8 | % | 17 | % | |||||||||||
| Free Cash Flow to Revenue Ratio | |||||||||||||||||
| Free cash flow | $ | 108,050 | $ | 38,315 | $ | 114,561 | |||||||||||
| Revenue | $ | 906,533 | $ | 893,272 | $ | 939,783 | |||||||||||
| Free cash flow to revenue ratio | 12 | % | 4 | % | 12 | % | |||||||||||
| Free Cash Flow to Adjusted EBITDA Ratio | |||||||||||||||||
| Free cash flow | $ | 108,050 | $ | 38,315 | $ | 114,561 | |||||||||||
| Adjusted EBITDA | $ | 197,512 | $ | 183,233 | $ | 197,536 | |||||||||||
| Free cash flow to adjusted EBITDA ratio | 55 | % | 21 | % | 58 | % | |||||||||||
13