false CORE LABORATORIES N V 00-0000000 0001000229 0001000229 2020-07-22 2020-07-22

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 22, 2020

 

CORE LABORATORIES N.V.

(Exact name of registrant as specified in its charter)

 

 

The Netherlands

001-14273

Not Applicable

(State or Other Jurisdiction

of Incorporation)

(Commission File Number)

(IRS Employer

Identification No.)

 

 

 

Strawinskylaan 913
Tower A, Level 9

1077 XX Amsterdam
The Netherlands

 

Not Applicable

(Address of Principal Executive Offices)

 

(Zip Code)

Registrant’s Telephone Number, Including Area Code: (31-20) 420-3191

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Common Stock (Par Value EUR 0.02)

 

CLB

 

New York Stock Exchange

Common Stock (Par Value EUR 0.02)

 

CLB

 

Euronext Amsterdam Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 


 

 

 

 

Item 2.02 Results of Operations and Financial Condition.

On July 22, 2020, Core Laboratories N.V. (the “Company”) issued a press release announcing its financial results for the second quarter of 2020. The full text of the press release is set forth in Exhibit 99.1 attached hereto.

The information in this Report and the exhibit attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly stated by specific reference in such filing.

 

Item 9.01 Financial Statements and Exhibits.

 

(d)

 

Exhibits

99.1Press release issued on July 22, 2020 *

104Cover Page Interactive Data File (embedded within the Inline XBRL document).

* This exhibit is intended to be furnished and shall not be deemed "filed" for purposes of the Exchange Act.


 


 

CORE LABORATORIES N.V.

EXHIBIT INDEX TO FORM 8-K

 

 

 

EXHIBIT NO.

 

ITEM

 

 

 

99.1

 

Press release issued on July 22, 2020 *

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document).

* This exhibit is intended to be furnished and shall not be deemed "filed" for purposes of the Exchange Act.

 


 


 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

 

 

 

 

 

 

 

 

Core Laboratories N.V.

 

 

 

 

 

 

 

Dated:  July 22, 2020

 

By

 

/s/ Christopher S. Hill

 

 

 

 

 

 

Christopher S. Hill

 

 

 

 

 

 

Chief Financial Officer

 

 

 

 

 

 

clb-ex991_6.htm

Exhibit 99.1

 

 

FOR IMMEDIATE RELEASE

 

CORE LAB REPORTS SECOND QUARTER 2020 RESULTS FROM CONTINUING OPERATIONS:

 

COMPANY REVENUE OF $116 MILLION

 

GAAP EPS OF $(0.13); $0.14, EX-ITEMS

 

CORE GENERATES FCF FOR 75TH CONSECUTIVE QUARTER OF $24 MILLION

 

CORE REDUCES NET DEBT BY $23 MILLION

 

CORE AMENDS CREDIT FACILITY

AMSTERDAM (22 July 2020) - Core Laboratories N.V. (NYSE: "CLB US" and Euronext Amsterdam: "CLB NA") ("Core", "Core Lab", or the "Company") reported that continuing operations resulted in second quarter 2020 revenue of $115,700,000. The financial results for the second quarter of 2020 include a charge of $13,300,000 associated with: 1) severance in connection with on-going cost reduction initiatives, 2) a non-cash inventory write-down, and 3) other non-cash charges. Core’s operating loss was $2,600,000, with a loss per diluted share of $0.13, all in accordance with U.S. generally accepted accounting principles ("GAAP"). Operating income, ex-items, a non-GAAP financial measure, was $10,700,000, yielding operating margins of 9.2% and earnings per diluted share (“EPS”), ex-items, of $0.14. A full reconciliation of non-GAAP financial measures is included in the attached financial tables.

Core’s Board of Supervisory Directors ("Board") and the Company’s Executive Management continue to focus on strategies that maximize return on invested capital ("ROIC") and free cash flow ("FCF"), a non-GAAP financial measure defined as cash from operations less capital expenditures, factors that have high correlation to total shareholder return. Core’s asset-light business model and capital discipline promote capital efficiency and are designed to produce more predictable and superior long-term ROIC.  

Cost Reduction Initiatives and Company Response to COVID-19 Pandemic

On 23 June 2020, the Company announced Phase 2 of cost reduction measures in response to market conditions and operational disruptions associated with COVID-19. Combined, the Phase 1 and Phase 2 cost reduction initiatives amount to reduced cash outflows of approximately $61,000,000, on an annualized basis, and in excess of $15,000,000 on a quarterly basis. Although substantially implemented throughout the second quarter of 2020, the now expanded cost reduction plan will be completed in the third quarter of 2020, further aligning Core Lab’s operations with client activity levels.  As previously announced, annual capital expenditures are expected to be reduced by approximately 50%, as compared to 2019.  The Company will continue to monitor the outlook for the industry and evaluate Core’s cost structure accordingly.  

 

The following table summarizes the projected impact to cash flow associated with the actions described


 

above. Compared to 2019, the forecast for 2020 shows reduced cash outflows totaling $142,600,000.

 

(in $ millions)

 

2019

 

 

Forecast 2020

 

 

Reduced Cash Outflows vs 2019

 

 

Annualized Reduced Cash Outflows

 

Dividend Payout1

 

$

97.7

 

 

$

12.4

 

 

$

(85.3

)

 

$

(95.9

)

Capital Expenditures1

 

 

22.3

 

 

 

11.0

 

 

 

(11.3

)

 

 

(11.3

)

Cost Reduction Initiatives1

 

 

 

 

 

(46.0

)

 

 

(46.0

)

 

 

(61.0

)

Reduced Cash Outflows

 

$

120.0

 

 

$

(22.6

)

 

$

(142.6

)

 

$

(168.2

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Reduced dividend policy and reduced 2020 capital expenditure plan announced 16 March 2020. Cost reduction initiatives - Phase 1, announced 22 April 2020, Phase 2, announced 23 June 2020.

 

The Company continues to operate as an essential business with timely delivery of products and services to its clients during the COVID-19 global pandemic. The risks and uncertainties associated with COVID-19 continue to potentially have a material impact to both the Company’s and its clients’ operations.  

Liquidity, Free Cash Flow, Dividends and Share Repurchases

During the second quarter of 2020, Core continued to generate FCF, with cash from operations of $27,000,000 and capital expenditures of $3,100,000, yielding FCF of $23,900,000. The second quarter of 2020 marks the 75th consecutive quarter that the Company generated positive FCF, despite the challenging market and industry conditions. Free cash was almost entirely focused towards reducing the Company’s debt, as net debt was reduced by $23,000,000 during the second quarter 2020, and by $29,000,000 during the first half of 2020. Core will continue applying its excess free cash flow towards debt reduction for the foreseeable future.  

As previously announced on 23 June 2020, in response to the economic events associated with COVID-19 and the related downturn in oil and gas industry activity, Core Lab successfully negotiated an amendment to the Company’s Credit Facility (the “Amendment”). The Amendment provides an increase to the maximum leverage ratio (calculated as total net debt divided by trailing twelve months adjusted EBITDA) permitted under the Credit Facility, among other things.

The following graph summarizes the maximum leverage ratio permitted over the relevant period:

Quarter Ending 2020 2021 Jun. 30 Sept. 30 Dec. 31 Mar. 31 Jun. 30 Sept. 30 Dec. 31 Maximum Leverage Ratio 3.00 2.75 2.50 2.00 1.50 1.00 Core Lab’s leverage ratio of 2.21 at 30 June 2020

As of 30 June 2020, the Company has $73,000,000 of excess capacity under its $225,000,000 Credit Facility,

 


 

and anticipates it will continue to generate positive cash flow and reduce net debt, while maintaining ample liquidity.

On 28 April 2020, the Board announced a quarterly cash dividend of $0.01 per share of common stock, which was paid on 19 May 2020 to shareholders of record on 8 May 2020. Dutch withholding tax was deducted from the dividend at a rate of 15%.

On 17 July 2020, the Board announced a quarterly cash dividend of $0.01 per share of common stock, payable on 10 August 2020 to shareholders of record on 27 July 2020. Dutch withholding tax will be deducted from the dividend at a rate of 15%.

Reservoir Description

Reservoir Description revenue in the second quarter of 2020 was $88,400,000, down 14% sequentially. Operating income for the second quarter of 2020 on a GAAP basis was $13,500,000, while operating income, ex-items, was $15,100,000, yielding operating margins, ex-items, of 17%, up 200 BPS sequentially. The decline in revenue on a sequential basis was attributable to continued industry disruptions associated with COVID-19.  On-going efforts to align the Reservoir Description segment with client activity levels helped to mitigate the impact to operating margins.

Reservoir Description operations are heavily exposed to international and offshore activity, with approximately 80% of its revenue sourced from projects outside the U.S., where core, reservoir fluid and derived product samples originate from international project activity.  For example, during the second quarter of 2020, Core’s Middle East operations continued to receive new work on highly specialized core and reservoir fluid projects throughout the region. Core’s network of laboratories in the Middle East include strategic locations in Kuwait, United Arab Emirates, Kingdom of Saudi Arabia and Qatar. Earlier this year Core completed the commissioning of a comprehensive reservoir fluids laboratory in Doha, Qatar, adding to its existing reservoir rock laboratory capabilities. This new fluids laboratory includes Core’s proprietary, full visualization, high-pressure, high-temperature, pressure-volume-temperature (“PVT”) cell instrumentation. These highly automated systems are uniquely designed to measure phase behavior of reservoir fluids with high concentrations of H2S and CO2 gases commonly found in the region.  Core expects continued demand for its proprietary laboratory services in the Middle East as a result of several factors, including the resumption of production from the Wafra oilfield, located within the Partitioned Neutral Zone in southern Kuwait, as well as the expansion of the North gas field in Qatar.  Core continues to evaluate additional opportunities for laboratory expansion in the region to meet client requests.

Also in the second quarter of 2020, industry adoption of Core’s proprietary, web-enabled data management system, Reservoir Applied Petrophysical Integrated Data service (“RAPID™”), continued to increase, as the RAPID™ platform was adopted by a national oil company (“NOC”) in the Middle East. RAPID™ provides this NOC with centralized, consistent, and easily accessible data in a secure format. RAPID™ enables the client to quickly and efficiently organize, archive, retrieve and analyze large quantities of geological, petrophysical, reservoir engineering, and reservoir fluids data, and will serve as the NOC’s primary repository for this reservoir data. The RAPID™ platform also allows sophisticated database queries from a user-friendly interface. Coupled with Core Lab's Worldwide Rock Catalog, Core’s Relative Permeability Toolkit, and other proprietary data tools, RAPID™ can be used to search for reservoir analogs, predict petrophysical and engineering parameters, and to integrate new laboratory data being acquired as part of on-going analytical programs. Core Lab continues its leadership role in the digitization of the oilfield, connecting data analytics tools, data lakes, and data mesh technologies. As the industry’s pioneering database for subsurface reservoir

 


 

data, RAPID™ has evolved and expanded over decades of commercial application, and has become the primary data platform for a suite of independent, national and international oil companies.

Production Enhancement

Production Enhancement operations, which are largely focused on complex completions in unconventional, tight-oil reservoirs in the U.S., as well as conventional offshore projects across the globe, posted second quarter 2020 revenue of $27,300,000, falling 45% sequentially. By comparison, the second quarter 2020 North American rig count and U.S. land completion activity fell over 60% on a sequential basis. Operating loss on a GAAP basis was $16,300,000, which includes non-cash charges of $11,600,000, associated with inventory write-downs, asset impairments and severance costs. Operating loss, ex-items, was $4,600,000. These results were partially mitigated by cost-control actions during the second quarter of 2020, limiting sequential quarterly decremental margins to 37%.  

During the second quarter of 2020, Core’s Plug-and-Abandonment (“PAC™”) energetic technology continued to gain market acceptance in the North Sea and Gulf of Mexico (“GOM”) regions. When a well reaches the end of its economic life, an operator will determine a plug-and-abandonment strategy. Core’s PAC™ energetic system technology penetrates a single casing string, or as many as four casing strings, without penetrating the outer casing. This technique enables the operator to establish circulation in the annular space between casing strings, and set functional cement barriers prior to abandoning the well. Compared with conventional section milling, Core Lab’s PAC™ perforating methodology enables significant cost savings by reducing the number of rig days, saving the operator $6,000,000 to $8,000,000 per abandoned well. PAC™ provides Core’s clients with an effective and efficient solution when executing multimillion-dollar plug-and-abandonment programs and demonstrates Core’s Production Enhancement ballistic engineers’ ability to adapt downhole technological advances to diverse industry needs.

As a result of the client’s success with the PAC™ energetic system technology, Core Lab has been enlisted by additional NOC’s to design plug-and-abandonment energetic systems for use in high cost, offshore environments. The Core Lab Engineering Testing Solutions team is receiving upfront funding from its client to design systems specific to each such operator’s well design and casing requirements.

During the second quarter of 2020, Core’s SpectraStim™, SpectraScan®, and PackScan® downhole imaging technologies were utilized in a client’s deepwater GOM well after a screen-out did not occur during the well completion. Prior to Core’s client attempting a remediation program, Core’s downhole imaging diagnostics were utilized to determine if an effective formation frac and annular pack, with ample proppant reserve above the top of the downhole sand control screen, had been achieved.  Sufficient proppant placement in the annulus is required to restrict the migration of formation fines during production, and to keep mobile sand particles from cutting screens, damaging surface facilities, and filling the wellbore.  To reduce operator rig time, Core’s engineering team processed the diagnostic analysis within two hours of receiving downhole images from the rig site. 

Core’s conclusion from the diagnostic analysis was that the well did not require a top-off treatment.  After discussions between the Production Enhancement engineering team and client, it was unanimously agreed that an effective frac and competent annular pack with ample proppant reserve had been obtained.  Thus, a remedial top-off treatment costing more than $1,000,000 was not required, nor would it have been operationally successful if attempted. The client acknowledged the quality of Core’s diagnostic analysis and the timeliness of execution.

 


 

Return On Invested Capital

The Company and its Board believe that ROIC is a leading long-term performance metric used by shareholders to determine the relative investment value of publicly traded companies. Further, the Company and its Board believe that shareholders will benefit if Core consistently performs at high levels of ROIC relative to its Comp Group. Core Lab’s commitment to capital stewardship is driven in part by the Company’s continuing philosophy of having a low capital-intensive business.

Events associated with the COVID-19 global pandemic have caused significant disruptions in global markets and economies, with adverse effects throughout the energy sector.  These adverse effects have triggered significant asset impairments for goodwill, intangible assets, inventory and other fixed assets, which further distort underlying financial performance and performance metrics, such as ROIC.    

The Company's Board has established an internal performance metric of demonstrating superior ROIC performance relative to the oilfield service companies listed as Core's Comp Group by Bloomberg.  Core Lab recorded $122 million in non-cash charges associated with the impairment of goodwill and intangible assets.  Excluding these non-cash asset impairments, Bloomberg’s calculation of Core’s ROIC was 8.5%, which continues to be higher than the Company’s Weighted Average Cost of Capital (“WACC”). Under the current circumstances and considering the magnitude of the asset and goodwill impairment charges incurred across the energy industry, it is difficult to appropriately determine the underlying relative performance across the Bloomberg Comp Group as compared with Core Lab.

Industry and Core Lab Outlook

Although crude-oil prices improved from the lows seen in May, E&P companies further reduced their 2020 capital expenditure plans, especially in the U.S., as witnessed by a steep decline in the frac spread index and an over 60% decline in completion activity.  As the third quarter of 2020 began, U.S. land activity improved slightly from the lows experienced during the middle of the second quarter.  In addition, travel restrictions and supply chain disruptions associated with COVID-19 continue to delay international project activity.

Core continues to project international activity to be down approximately 10 – 15% year-over-year. The pace and breadth of recovery from COVID-19 restrictions remains highly uncertain, making it difficult to forecast the level and timing of client activity.  Therefore, Core is unable to provide meaningful quantitative quarterly guidance.  From a qualitative perspective, the Company expects project work and international shipment of products to improve somewhat during the second half of 2020 from the lows experienced mid-second quarter 2020.  

For Reservoir Description, we expect reservoir fluids analysis, which accounts for more than 65% of this segment’s revenue, to be more resilient given this work is not solely tied to drilling and completion of new wells.

Production Enhancement has a wide range of innovative product offerings with on-going projects unrelated to drilling and completion, including a large international plug and abandonment and well remediation program.  Production Enhancement should track or outperform future improvements in U.S. land completions.

 

 

 

 


 

Earnings Call Scheduled

The Company has scheduled a conference call to discuss Core's second quarter 2020 earnings announcement.  The call will begin at 7:30 a.m. CDT / 2:30 p.m. CEST on Thursday, 23 July 2020.  To listen to the call, please go to Core's website at www.corelab.com.

Core Laboratories N.V. is a leading provider of proprietary and patented reservoir description and production enhancement services and products used to optimize petroleum reservoir performance.  The Company has over 70 offices in more than 50 countries and is located in every major oil-producing province in the world. This release, as well as other statements we make, includes forward-looking statements regarding the future revenue, profitability, business strategies and developments of the Company made in reliance upon the safe harbor provisions of Federal securities law.  The Company's outlook is subject to various important cautionary factors, including risks and uncertainties related to the oil and natural gas industry, business conditions, international markets, international political climates, public health crises, such as the COVID-19 pandemic, and any related actions taken by businesses and governments, and other factors as more fully described in the Company's most recent Forms 10-K, 10-Q and 8-K filed with or furnished to the U.S. Securities and Exchange Commission.  These important factors could cause the Company's actual results to differ materially from those described in these forward-looking statements.  Such statements are based on current expectations of the Company's performance and are subject to a variety of factors, some of which are not under the control of the Company.  Because the information herein is based solely on data currently available, and because it is subject to change as a result of changes in conditions over which the Company has no control or influence, such forward-looking statements should not be viewed as assurance regarding the Company's future performance.  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 Lab on Facebook, LinkedIn and YouTube.

 

For more information, contact:

Gwen Schreffler - SVP Corporate Development and Investor Relations, +1 713 328 6210

 

 


 

CORE LABORATORIES N.V. & SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands, except per share data)

(Unaudited)

 

Three Months Ended

 

 

% Variance

 

 

 

 

June 30, 2020

 

 

March 31, 2020

 

 

June 30, 2019

 

 

vs. Q1-20

 

 

vs. Q2-19

 

 

REVENUE

 

$

115,736

 

 

$

152,400

 

 

$

169,038

 

 

(24.1)%

 

 

(31.5)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs of services and sales

 

 

90,680

 

 

 

115,131

 

 

 

124,451

 

 

(21.2)%

 

 

(27.1)%

 

 

General and administrative expense

 

 

9,221

 

 

 

19,567

 

 

 

9,801

 

 

(52.9)%

 

 

(5.9)%

 

 

Depreciation and amortization

 

 

5,425

 

 

 

5,441

 

 

 

5,786

 

 

(0.3)%

 

 

(6.2)%

 

 

Inventory write-down and impairments

 

 

9,932

 

 

 

122,204

 

 

 

 

 

(91.9)%

 

 

NM

 

 

Other (income) expense, net

 

 

3,045

 

 

 

(970

)

 

 

992

 

 

NM

 

 

207.0%

 

 

Total operating expenses

 

 

118,303

 

 

 

261,373

 

 

 

141,030

 

 

(54.7)%

 

 

(16.1)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME (LOSS)

 

 

(2,567

)

 

 

(108,973

)

 

 

28,008

 

 

NM

 

 

NM

 

 

Interest expense

 

 

3,369

 

 

 

3,411

 

 

 

3,714

 

 

(1.2)%

 

 

(9.3)%

 

 

Income (loss) from continuing operations

   before income tax expense

 

 

(5,936

)

 

 

(112,384

)

 

 

24,294

 

 

NM

 

 

NM

 

 

Income tax expense (benefit)

 

 

(261

)

 

 

(4,046

)

 

 

4,808

 

 

NM

 

 

NM

 

 

Income (loss) from continuing operations

 

 

(5,675

)

 

 

(108,338

)

 

 

19,486

 

 

NM

 

 

NM

 

 

Income (loss) from discontinued

   operations, net of income taxes

 

 

 

 

 

 

 

 

7,971

 

 

NM

 

 

NM

 

 

Net income (loss)

 

 

(5,675

)

 

 

(108,338

)

 

 

27,457

 

 

NM

 

 

NM

 

 

Net income (loss) attributable to non-

   controlling interest

 

 

41

 

 

 

83

 

 

 

43

 

 

(50.6)%

 

 

(4.7)%

 

 

Net income (loss) attributable to Core

   Laboratories N.V.

 

$

(5,716

)

 

$

(108,421

)

 

$

27,414

 

 

NM

 

 

NM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted EPS (loss per share) from continuing

   operations

 

$

(0.13

)

 

$

(2.44

)

 

$

0.43

 

 

NM

 

 

NM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted EPS (loss per share) attributable to Core

   Laboratories N.V.

 

$

(0.13

)

 

$

(2.44

)

 

$

0.61

 

 

NM

 

 

NM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average diluted common

   shares outstanding

 

 

44,470

 

 

 

44,447

 

 

 

44,815

 

 

0.1%

 

 

(0.8)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effective tax rate

 

 

(4

)%

 

 

(4

)%

 

 

20

%

 

NM

 

 

NM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SEGMENT INFORMATION:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reservoir Description

 

$

88,442

 

 

$

102,702

 

 

$

105,649

 

 

(13.9)%

 

 

(16.3)%

 

 

Production Enhancement

 

 

27,294

 

 

 

49,698

 

 

 

63,389

 

 

(45.1)%

 

 

(56.9)%

 

 

Total

 

$

115,736

 

 

$

152,400

 

 

$

169,038

 

 

(24.1)%

 

 

(31.5)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reservoir Description

 

$

13,534

 

 

$

11,062

 

 

$

15,878

 

 

22.3%

 

 

(14.8)%

 

 

Production Enhancement

 

 

(16,324

)

 

 

(121,299

)

 

 

10,424

 

 

NM

 

 

NM

 

 

Corporate and Other

 

 

223

 

 

 

1,264

 

 

 

1,706

 

 

NM

 

 

NM

 

 

Total

 

$

(2,567

)

 

$

(108,973

)

 

$

28,008

 

 

NM

 

 

NM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

"NM" means not meaningful

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 


 

CORE LABORATORIES N.V. & SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands, except per share data)

(Unaudited)

 

 

Six Months Ended

 

 

% Variance

 

 

 

 

June 30, 2020

 

 

June 30, 2019

 

 

 

 

 

 

REVENUE

 

$

268,136

 

 

$

338,232

 

 

(20.7)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs of services and sales

 

 

205,811

 

 

 

251,834

 

 

(18.3)%

 

 

General and administrative expense

 

 

28,788

 

 

 

27,238

 

 

5.7%

 

 

Depreciation and amortization

 

 

10,866

 

 

 

11,373

 

 

(4.5)%

 

 

Inventory write-down and impairments

 

 

132,136

 

 

 

 

 

NM

 

 

Other (income) expense, net

 

 

2,075

 

 

 

3,365

 

 

(38.3)%

 

 

Total operating expenses

 

 

379,676

 

 

 

293,810

 

 

29.2%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME (LOSS)

 

 

(111,540

)

 

 

44,422

 

 

NM

 

 

Interest expense

 

 

6,780

 

 

 

7,440

 

 

(8.9)%

 

 

Income (loss) from continuing operations before income tax expense

 

 

(118,320

)

 

 

36,982

 

 

NM

 

 

Income tax expense (benefit)

 

 

(4,307

)

 

 

(22,802

)

 

NM

 

 

Income (loss) from continuing operations

 

 

(114,013

)

 

 

59,784

 

 

NM

 

 

Income (loss) from discontinued operations, net of income taxes

 

 

 

 

 

8,230

 

 

NM

 

 

Net income (loss)

 

 

(114,013

)

 

 

68,014

 

 

NM

 

 

Net income (loss) attributable to non-controlling interest

 

 

124

 

 

 

90

 

 

37.8%

 

 

Net income (loss) attributable to Core Laboratories N.V.

 

$

(114,137

)

 

$

67,924

 

 

NM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted EPS (loss per share) from continuing operations

 

$

(2.57

)

 

$

1.33

 

 

NM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted EPS (loss per share) attributable to Core Laboratories N.V.

 

$

(2.57

)

 

$

1.51

 

 

NM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average diluted common shares outstanding

 

 

44,459

 

 

 

44,848

 

 

(0.9)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effective tax rate

 

 

(4

)%

 

 

(62

)%

 

NM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SEGMENT INFORMATION:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

Reservoir Description

 

$

191,144

 

 

$

208,941

 

 

(8.5)%

 

 

Production Enhancement

 

 

76,992

 

 

 

129,291

 

 

(40.5)%

 

 

Total

 

$

268,136

 

 

$

338,232

 

 

(20.7)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

Reservoir Description

 

$

24,596

 

 

$

22,057

 

 

11.5%

 

 

Production Enhancement

 

 

(137,623

)

 

 

20,336

 

 

NM

 

 

Corporate and Other

 

 

1,487

 

 

 

2,029

 

 

NM

 

 

Total

 

$

(111,540

)

 

$

44,422

 

 

NM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

"NM" means not meaningful

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 


 

 

CORE LABORATORIES N.V. & SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET

(amounts in thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

% Variance

 

 

ASSETS:

 

June 30, 2020

 

 

March 31, 2020

 

 

June 30, 2019

 

 

vs. Q1-20

 

 

vs. Q2-19

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

20,958

 

 

$

13,890

 

 

$

12,546

 

 

50.9%

 

 

67.0%

 

 

Accounts receivable, net

 

 

101,464

 

 

 

126,872

 

 

 

134,900

 

 

(20.0)%

 

 

(24.8)%

 

 

Inventory

 

 

41,528

 

 

 

52,263

 

 

 

49,311

 

 

(20.5)%

 

 

(15.8)%

 

 

Other current assets

 

 

27,443

 

 

 

26,682

 

 

 

28,476

 

 

2.9%

 

 

(3.6)%

 

 

Total Current Assets

 

 

191,393

 

 

 

219,707

 

 

 

225,233

 

 

(12.9)%

 

 

(15.0)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment, net

 

 

119,866

 

 

 

123,112

 

 

 

125,699

 

 

(2.6)%

 

 

(4.6)%

 

 

Right-of-use assets

 

 

70,147

 

 

 

74,943

 

 

 

76,290

 

 

(6.4)%

 

 

(8.1)%

 

 

Intangibles, goodwill and other long-term assets, net

 

 

233,035

 

 

 

228,847

 

 

 

354,296

 

 

1.8%

 

 

(34.2)%

 

 

Total assets

 

$

614,441

 

 

$

646,609

 

 

$

781,518

 

 

(5.0)%

 

 

(21.4)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

23,693

 

 

$

37,054

 

 

$

41,995

 

 

(36.1)%

 

 

(43.6)%

 

 

Short-term operating lease obligations

 

 

12,028

 

 

 

12,583

 

 

 

12,968

 

 

(4.4)%

 

 

(7.2)%

 

 

Other current liabilities

 

 

63,563

 

 

 

58,810

 

 

 

69,863

 

 

8.1%

 

 

(9.0)%

 

 

Total current liabilities

 

 

99,284

 

 

 

108,447

 

 

 

124,826

 

 

(8.4)%

 

 

(20.5)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term debt, net

 

 

286,610

 

 

 

302,420

 

 

 

290,022

 

 

(5.2)%

 

 

(1.2)%

 

 

Long-term operating lease obligations

 

 

57,449

 

 

 

60,162

 

 

 

62,737

 

 

(4.5)%

 

 

(8.4)%

 

 

Other long-term liabilities

 

 

104,951

 

 

 

105,506

 

 

 

111,441

 

 

(0.5)%

 

 

(5.8)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total equity

 

 

66,147

 

 

 

70,074

 

 

 

192,492

 

 

(5.6)%

 

 

(65.6)%

 

 

Total liabilities and equity

 

$

614,441

 

 

$

646,609

 

 

$

781,518

 

 

(5.0)%

 

 

(21.4)%

 

 

 

“NM” means not meaningful


 


 

CORE LABORATORIES N.V. & SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(amounts in thousands)

(Unaudited)

 

Three Months Ended

 

 

 

 

June 30, 2020

 

 

March 31, 2020

 

 

June 30, 2019

 

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations

 

$

(5,675

)

 

$

(108,338

)

 

$

19,486

 

 

Income (loss) from discontinued operations

 

 

 

 

 

 

 

 

7,971

 

 

Net Income (loss)

 

$

(5,675

)

 

$

(108,338

)

 

$

27,457

 

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

2,865

 

 

 

10,530

 

 

 

3,245

 

 

Depreciation and amortization

 

 

5,425