false 00-0000000 0001000229 0001000229 2020-10-21 2020-10-21

 

 

 

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): October 21, 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 October 21, 2020, Core Laboratories N.V. (the “Company”) issued a press release announcing its financial results for the third 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 October 21, 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 October 21, 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:  October 21, 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 THIRD QUARTER 2020 RESULTS FROM CONTINUING OPERATIONS:

 

COMPANY REVENUE OF $105.4 MILLION; DOWN 9% SEQUENTIALLY

 

GAAP EPS OF $0.07; $0.16, EX-ITEMS

 

CORE GENERATES FCF FOR 76TH CONSECUTIVE QUARTER OF $18.5 MILLION

 

CORE REDUCES NET DEBT BY $16.2 MILLION

 

CORE ANNOUNCES $60 MILLION OF 5-YEAR & 7-YEAR PRIVATE PLACEMENT NOTES

AMSTERDAM (21 October 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 third quarter 2020 revenue of $105,400,000. Core’s operating income was $11,300,000, with earnings per diluted share (“EPS”) of $0.07, all in accordance with U.S. generally accepted accounting principles ("GAAP"). Operating income, ex-items, a non-GAAP financial measure, was $12,300,000, yielding operating margins of 12% and EPS, ex-items, of $0.16. A full reconciliation of non-GAAP financial measures is included in the attached financial tables.

The sequential decline in revenue was attributable to continued global industry disruptions associated with COVID-19, as well as four tropical weather systems impacting the Gulf of Mexico during the third quarter of 2020.  Geographically, the sequential revenue decline was primarily associated with a decrease in both international product sales, as well as lower activity on international projects.  Improved revenue from the U.S. land market was offset by Gulf Coast storm-related disruptions.

Previously announced Cost Reduction Plans (Phase 1 and Phase 2), totaling $61,000,000 of annualized cost savings, have now been fully implemented and were completed in the third quarter of 2020, in line with Core’s previously stated expectations.  Core’s management will continue to evaluate further options to align the Company’s cost structure with anticipated client activity as necessary.

Core’s CEO, Larry Bruno stated, “Core’s third quarter results display both the durability and adaptability of the business model, along with the benefit of our cost reduction plans, as Core continued to generate free cash flow despite the aforementioned industry disruptions.  Core’s global exposure, talented and dedicated staff, along with our expanding line of proprietary and patented products and services, have us well positioned to navigate today’s market and capitalize on future opportunities”.

Liquidity, Free Cash Flow, Private Placement Notes and Dividend

During the third quarter of 2020, Core continued to generate free cash flow (“FCF”), with cash from operations of $20,700,000 and incurred capital expenditures of $2,200,000, yielding FCF of $18,500,000. The third quarter of 2020 marks the 76th consecutive quarter that the Company generated positive FCF,


 

despite challenging market and industry conditions.  Free cash was almost entirely focused towards reducing the Company’s debt, with net debt reduced by $16,200,000 during the third quarter of 2020.  Core will continue applying its excess free cash flow towards debt reduction for the foreseeable future.  

As previously announced on 16 October 2020, Core Lab entered into an agreement to issue $60,000,000 of new fixed-rate long-term senior notes (“Notes”) through a private placement to extend the maturity for a portion of the Company’s long-term debt. The Note Purchase Agreement was signed on 16 October 2020, with funding to occur 12 January 2021.

The following table summarizes the terms of the new Notes:

Instrument

 

Face Value

($ Millions)

 

 

Term

 

Interest Coupon

 

 

Maturity Date

U.S. Private Placement Notes

 

$

45.0

 

 

5-Year

 

4.09%

 

 

12 January 2026

U.S. Private Placement Notes

 

 

15.0

 

 

7-Year

 

4.38%

 

 

12 January 2028

TOTAL

 

$

60.0

 

 

 

 

 

 

 

 

 

The net proceeds from the new Notes are intended to be used exclusively to reduce outstanding debt on the Company’s revolving credit facility (“Credit Facility”), thus increasing the available borrowing capacity by $60,000,000. The Company’s Credit Facility has an aggregate borrowing capacity of $225,000,000, of which $116,000,000 was outstanding as of 30 September 2020.  The Company’s CFO, Chris Hill, had the following statement, “This transaction accomplishes two goals as we manage the Company’s corporate debt structure through the disruptions associated with the COVID-19 pandemic.  First, it provides additional liquidity under the Company’s Credit Facility to address the outstanding $75 million senior notes maturing 30 September 2021, and second, issuing $60 million in new Notes and retiring $75 million of existing notes next year is an additional step toward our long-term strategy of reducing debt and Core Lab’s debt leverage ratio”. The new Notes include certain financial covenants that align with the financial covenants under the Company’s Credit Facility, limiting total Company net debt to a maximum leverage ratio and requiring a minimum interest coverage ratio.

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 September 2020, the Company’s leverage ratio was 2.49 to 1, with $96,000,000 of excess capacity under the Credit Facility.  As stated earlier, the proceeds from the new Notes on 12 January 2021 are intended to reduce outstanding debt on the Company’s Credit Facility and provide an additional $60,000,000

 


 

of borrowing capacity and liquidity.  The Company anticipates it will continue to generate positive cash flow and reduce net debt, while maintaining ample liquidity.  

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

On 15 October 2020, the Board announced a quarterly cash dividend of $0.01 per share of common stock, payable on 17 November 2020 to shareholders of record on 26 October 2020. Dutch withholding tax will be deducted from the dividend at a rate of 15%.

Reservoir Description

Reservoir Description revenue in the third quarter of 2020 was $80,100,000, down 9% sequentially. Operating income for the third quarter of 2020 on a GAAP basis was $11,000,000, while operating income, ex-items, was $11,700,000, yielding operating margins, ex-items, of 15%, down slightly more than 200 BPS sequentially. Revenue, operating income, and margins were all affected by both continued COVID-19 project disruptions and weather events in the Gulf of Mexico during the third quarter of 2020.  Implemented cost controls in the segment helped mitigate the impact to operating margins.

Core’s clients continue to be heavily focused on digital transformation technologies to pursue operational excellence.  Core Lab has been at the forefront of this movement for more than two decades.  Core’s extensive, proprietary databases and analog technologies, coupled with artificial intelligence (“AI”) and machine learning, help the Company’s clients improve efficiencies and lower operating costs throughout the upstream value chain. In the third quarter of 2020, Core Lab’s Digital Innovation Group worked collaboratively with multiple international and national oil companies on projects that utilize several of Core’s proprietary digital technologies and services.  Core’s proprietary Advanced Rock Typing technology combines Core’s vast, comprehensive database of physical measurements, and Rock CatalogsTM with its proprietary image acquisition technology and the latest in AI image recognition.  These technologies provide clients with analog data sets in situations where acquisition of new conventional core may not be possible.  High-resolution images of wellbore cuttings and sidewall cores are quickly and efficiently matched with analogs from Core’s proprietary database of samples from around the world.  Physically measured data sets from the matching analogs are delivered to Core’s clients in time to make appraisal and development decisions.

During the third quarter of 2020, Core Laboratories, under the direction of The CarbonNet Project (“CarbonNet”) engaged in laboratory analysis of 300 feet of conventional core from the Gular-1 appraisal well in the offshore Gippsland Basin, in the Bass Strait, off the southeast coast of Australia. CarbonNet is funded by the Victorian and Commonwealth governments of Australia.  In a recent press release the CarbonNet team mentioned, “The CarbonNet Project is advancing the science and viability for establishing a commercial-scale carbon capture and storage (“CCS”) network. The network would bring together multiple carbon dioxide (“CO2”) capture projects in Victoria's Latrobe Valley, transporting CO2 via a shared pipeline and injecting it into deep, underground, offshore storage sites in the Bass Strait. CCS is being investigated as part of a suite of solutions with the potential to mitigate greenhouse gas emissions.” The cores are progressing through physical laboratory measurements, in an iterative analytical program.  The data generated by Core Lab will provide insight into seal capacity, storage capacity, geomechanical properties and the pore system properties of the rock.  Core Laboratories is pleased to be playing a role in evaluating this important CCS project, which is among the most promising CO2 storage opportunities in the region.  

 


 

Production Enhancement

Production Enhancement operations, which are focused on complex completions in unconventional, tight-oil reservoirs in the U.S., as well as conventional offshore projects across the globe, posted third quarter 2020 revenue of $25,300,000, declining 7% sequentially.  The revenue decline was primarily associated with decreased international product shipments due to COVID-19 disruptions and weather events in the Gulf of Mexico.  More positively, U.S. land revenue increased 23% sequentially, partially mitigating the sequential decline in international sales, and correlating favorably with the improved U.S. land well completion activity during the quarter. Operating loss on a GAAP basis was $300,000, and approximately break-even, ex-items.   Although revenue sequentially declined in the third quarter as compared to the second quarter of 2020, the operating loss was minimized, and improved significantly, as a result of cost-control measures completed during the second and third quarters of 2020.  

During the third quarter of 2020, Core Lab introduced its next generation, best-in-class, HERO®PerFRAC energetic technology, which is now available in combination with the new, patent pending Oriented GoGun™. This new technology provides Core’s clients with a technological solution for achieving: 1) extreme limited entry perforating capability, 2) precisely aligned perforations, and 3) minimized connections and completion string length.  Casing erosion around perforations can occur when stimulating unconventional reservoirs. Larger perforating holes preferentially increase in size and take more frac fluid, robbing stimulation from smaller perforating holes, which results in inconsistent breakdown of the formation. The consistent-sized holes generated by the latest HERO®PerFRAC charges reduce this problem. Core Lab partnered with major U.S. operators to design custom, consistent-hole-size charges that can be aligned in a specific orientation in order to achieve uniform breakdown across each stage. Core Lab’s Production Enhancement development team designed a patent pending method to orient the GoGunTM, with both very high accuracy and wellsite efficiency. By eliminating the need for reusable orientation subassemblies, the Oriented GoGunTM minimizes the number of connections and saves time at the wellsite by not having to recapture and redress the orienting subs.  

Also during the third quarter of 2020, Core Lab’s Production Enhancement engineers developed and introduced a new application for its proprietary SpectraChem® chemical frac water tracer to determine whether horizontal wells are unobstructed and flowing through the entire length of the lateral.  Leveraged by operators in the Permian, Eagle Ford, and Haynesville, this technology can identify wellbore obstructions, often caused by inter-well communication or dissolvable plug remnants.  By applying this technology, Core’s clients can identify and remediate well obstructions that can negatively impact well performance, reserve calculations and reserve-based lending.

Return On Invested Capital

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 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 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.

Events associated with the COVID-19 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 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.  In the first half of 2020, Core Lab recorded $133 million in non-cash charges associated with the impairments and inventory write-down.  Excluding these non-cash asset impairments and write-down, Bloomberg’s calculation of Core’s ROIC was 4.3%.  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

Conversations with Core’s clients broadly reaffirm the Company’s expectation that international projects already underway will continue; however, the pace and breadth of recovery from COVID-19 restrictions remains uncertain, making it difficult to forecast both the level and timing of such activity.  Core Lab projects international activity in the fourth quarter of 2020 may slightly to modestly improve sequentially for both operating segments, if COVID-19 travel restrictions and supply chain disruptions begin to ease.  

Within Reservoir Description, Core expects reservoir fluid analysis, which accounts for more than 65% of the segment’s revenue, to be more resilient as this work is diversified across the life of reservoir and less reliant on drilling and completion of new wells.

U.S. land activity improved from the lows experienced during the middle of the second quarter as the third quarter of 2020 unfolded.  This trend of gradual improvement in U.S. land activity is expected to continue into the fourth quarter of 2020.  As a result, Core Lab projects overall fourth quarter 2020 U.S. land activity to modestly improve sequentially, and expects Production Enhancement to continue to track or outperform activity levels in U.S. land completions.

Collectively, these trends point toward slightly to modestly improved sequential operational performance for Core Lab, barring any COVID-19-related retrenchments in client activity.  Additionally, Core expects to generate positive FCF in the fourth quarter of 2020 as Core’s aggressive adjustments to its cost structure further align with client activity, with continued focus on free cash generation and strategic debt reduction.  

Earnings Call Scheduled

The Company has scheduled a conference call to discuss Core's third quarter 2020 earnings announcement. The call will begin at 7:30 a.m. CDT / 2:30 p.m. CEST on Thursday, 22 October 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

 

 

 

 

September 30, 2020

 

 

June 30, 2020

 

 

September 30, 2019

 

 

vs. Q2-20

 

 

vs. Q3-19

 

 

REVENUE

 

$

105,382

 

 

$

115,736

 

 

$

173,200

 

 

(8.9)%

 

 

(39.2)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs of services and sales

 

 

81,038

 

 

 

90,680

 

 

 

125,996

 

 

(10.6)%

 

 

(35.7)%

 

 

General and administrative expense

 

 

8,937

 

 

 

9,221

 

 

 

11,012

 

 

(3.1)%

 

 

(18.8)%

 

 

Depreciation and amortization

 

 

5,164

 

 

 

5,425

 

 

 

5,697

 

 

(4.8)%

 

 

(9.4)%

 

 

Inventory write-down

 

 

 

 

 

9,932

 

 

 

 

 

NM

 

 

NM

 

 

Other (income) expense, net

 

 

(1,088

)

 

 

3,045

 

 

 

(712

)

 

NM

 

 

NM

 

 

Total operating expenses

 

 

94,051

 

 

 

118,303

 

 

 

141,993

 

 

(20.5)%

 

 

(33.8)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME (LOSS)

 

 

11,331

 

 

 

(2,567

)

 

 

31,207

 

 

NM

 

 

(63.7)%

 

 

Interest expense

 

 

4,672

 

 

 

3,369

 

 

 

3,662

 

 

38.7%

 

 

27.6%

 

 

Income (loss) from continuing operations

   before income tax expense

 

 

6,659

 

 

 

(5,936

)

 

 

27,545

 

 

NM

 

 

(75.8)%

 

 

Income tax expense (benefit)

 

 

3,663

 

 

 

(261

)

 

 

3,335

 

 

NM

 

 

9.8%

 

 

Income (loss) from continuing operations

 

 

2,996

 

 

 

(5,675

)

 

 

24,210

 

 

NM

 

 

(87.6)%

 

 

Income (loss) from discontinued

   operations, net of income taxes

 

 

 

 

 

 

 

 

(397

)

 

NM

 

 

NM

 

 

Net income (loss)

 

 

2,996

 

 

 

(5,675

)

 

 

23,813

 

 

NM

 

 

(87.4)%

 

 

Net income (loss) attributable to non-

   controlling interest

 

 

33

 

 

 

41

 

 

 

84

 

 

(19.5)%

 

 

(60.7)%

 

 

Net income (loss) attributable to Core

   Laboratories N.V.

 

$

2,963

 

 

$

(5,716

)

 

$

23,729

 

 

NM

 

 

(87.5)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted EPS (loss per share) from continuing operations

 

$

0.07

 

 

$

(0.13

)

 

$

0.54

 

 

NM

 

 

(87.0)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted EPS (loss per share) attributable to Core

   Laboratories N.V.

 

$

0.07

 

 

$

(0.13

)

 

$

0.53

 

 

NM

 

 

(86.8)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average diluted common

   shares outstanding

 

 

44,899

 

 

 

44,470

 

 

 

44,716

 

 

1.0%

 

 

0.4%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effective tax rate

 

 

55

%

 

 

4

%

 

 

12

%

 

NM

 

 

NM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SEGMENT INFORMATION:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reservoir Description

 

$

80,060

 

 

$

88,442

 

 

$

109,339

 

 

(9.5)%

 

 

(26.8)%

 

 

Production Enhancement

 

 

25,322

 

 

 

27,294

 

 

 

63,861

 

 

(7.2)%

 

 

(60.3)%

 

 

Total

 

$

105,382

 

 

$

115,736

 

 

$

173,200

 

 

(8.9)%

 

 

(39.2)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reservoir Description

 

$

11,022

 

 

$

13,534

 

 

$

18,835

 

 

(18.6)%

 

 

(41.5)%

 

 

Production Enhancement

 

 

(321

)

 

 

(16,324

)

 

 

11,456

 

 

NM

 

 

NM

 

 

Corporate and Other

 

 

630

 

 

 

223

 

 

 

916

 

 

NM

 

 

NM

 

 

Total

 

$

11,331

 

 

$

(2,567

)

 

$

31,207

 

 

NM

 

 

(63.7)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

"NM" means not meaningful

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 


 

CORE LABORATORIES N.V. & SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(amounts in thousands, except per share data)

(Unaudited)

 

 

Nine Months Ended

 

 

% Variance

 

 

 

 

September 30, 2020

 

 

September 30, 2019

 

 

 

 

 

 

REVENUE

 

$

373,518

 

 

$

511,432

 

 

(27.0)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs of services and sales

 

 

286,849

 

 

 

377,830

 

 

(24.1)%

 

 

General and administrative expense

 

 

37,725

 

 

 

38,250

 

 

(1.4)%

 

 

Depreciation and amortization

 

 

16,030

 

 

 

17,070

 

 

(6.1)%

 

 

Inventory write-down and impairments

 

 

132,136

 

 

 

 

 

NM

 

 

Other (income) expense, net

 

 

987

 

 

 

2,653

 

 

(62.8)%

 

 

Total operating expenses

 

 

473,727

 

 

 

435,803

 

 

8.7%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME (LOSS)

 

 

(100,209

)

 

 

75,629

 

 

NM

 

 

Interest expense

 

 

11,452

 

 

 

11,102

 

 

3.2%

 

 

Income (loss) from continuing operations before income tax expense

 

 

(111,661

)

 

 

64,527

 

 

NM

 

 

Income tax expense (benefit)

 

 

(644

)

 

 

(19,467

)

 

NM

 

 

Income (loss) from continuing operations

 

 

(111,017

)

 

 

83,994

 

 

NM

 

 

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

 

 

 

 

 

7,833

 

 

NM

 

 

Net income (loss)

 

 

(111,017

)

 

 

91,827

 

 

NM

 

 

Net income (loss) attributable to non-controlling interest

 

 

157

 

 

 

174

 

 

(9.8)%

 

 

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

 

$

(111,174

)

 

$

91,653

 

 

NM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted EPS (loss per share) from continuing operations

 

$

(2.50

)

 

$

1.87

 

 

NM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

(2.50

)

 

$

2.04

 

 

NM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average diluted common shares outstanding

 

 

44,470

 

 

 

44,854

 

 

(0.9)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effective tax rate

 

 

1

%

 

 

(30

)%

 

NM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SEGMENT INFORMATION:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

Reservoir Description

 

$

271,203

 

 

$

318,280

 

 

(14.8)%

 

 

Production Enhancement

 

 

102,315

 

 

 

193,152

 

 

(47.0)%

 

 

Total

 

$

373,518

 

 

$

511,432

 

 

(27.0)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

Reservoir Description

 

$

35,618

 

 

$

40,892

 

 

(12.9)%

 

 

Production Enhancement

 

 

(137,944

)

 

 

31,792

 

 

NM

 

 

Corporate and Other

 

 

2,117

 

 

 

2,945

 

 

NM

 

 

Total

 

$

(100,209

)

 

$

75,629

 

 

NM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

"NM" means not meaningful

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 


 

 

CORE LABORATORIES N.V. & SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET

(amounts in thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% Variance

 

 

ASSETS:

 

September 30, 2020

 

 

June 30, 2020

 

 

December 31, 2019

 

 

vs. Q2-20

 

 

vs. Q4-19

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

15,146

 

 

$

20,958

 

 

$

11,092

 

 

(27.7)%

 

 

36.5%

 

 

Accounts receivable, net

 

 

85,366

 

 

 

101,464

 

 

 

131,579

 

 

(15.9)%

 

 

(35.1)%

 

 

Inventory

 

 

42,908

 

 

 

41,528

 

 

 

50,163

 

 

3.3%

 

 

(14.5)%

 

 

Other current assets

 

 

26,469

 

 

 

27,443

 

 

 

28,403

 

 

(3.5)%

 

 

(6.8)%

 

 

Total Current Assets

 

 

169,889

 

 

 

191,393

 

 

 

221,237

 

 

(11.2)%

 

 

(23.2)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment, net

 

 

117,123

 

 

 

119,866

 

 

 

123,506

 

 

(2.3)%

 

 

(5.2)%

 

 

Right-of-use assets

 

 

69,228

 

 

 

70,147

 

 

 

75,697

 

 

(1.3)%

 

 

(8.5)%

 

 

Intangibles, goodwill and other long-term assets, net

 

 

234,574

 

 

 

233,035

 

 

 

354,233

 

 

0.7%

 

 

(33.8)%

 

 

Total assets

 

$

590,814

 

 

$

614,441

 

 

$

774,673

 

 

(3.8)%

 

 

(23.7)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

22,806

 

 

$

23,693

 

 

$

35,611

 

 

(3.7)%

 

 

(36.0)%

 

 

Short-term operating lease obligations

 

 

11,807

 

 

 

12,028

 

 

 

11,841

 

 

(1.8)%

 

 

(0.3)%

 

 

Current maturities of long-term debt

 

 

75,000

 

 

 

 

 

 

 

 

NM

 

 

NM

 

 

Other current liabilities

 

 

62,523

 

 

 

63,563

 

 

 

64,142

 

 

(1.6)%

 

 

(2.5)%

 

 

Total current liabilities

 

 

172,136

 

 

 

99,284

 

 

 

111,594

 

 

73.4%

 

 

54.3%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term debt, net

 

 

189,566

 

 

 

286,610

 

 

 

305,283

 

 

(33.9)%

 

 

(37.9)%

 

 

Long-term operating lease obligations

 

 

56,649

 

 

 

57,449

 

 

 

64,660

 

 

(1.4)%

 

 

(12.4)%

 

 

Other long-term liabilities

 

 

100,754

 

 

 

104,951

 

 

 

110,996

 

 

(4.0)%

 

 

(9.2)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total equity

 

 

71,709

 

 

 

66,147

 

 

 

182,140

 

 

8.4%

 

 

(60.6)%

 

 

Total liabilities and equity

 

$

590,814

 

 

$

614,441

 

 

$

774,673

 

 

(3.8)%

 

 

(23.7)%

 

 

 

“NM” means not meaningful


 


 

CORE LABORATORIES N.V. & SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(amounts in thousands)

(Unaudited)

 

Three Months Ended

 

 

 

 

September 30, 2020

 

 

June 30, 2020

 

 

September 30, 2019

 

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations

 

$

2,996

 

 

$

(5,675

)

 

$

24,210

 

 

Income (loss) from discontinued operations

 

 

 

 

 

 

 

 

(397

)

 

Net Income (loss)

 

$

2,996

 

 

$

(5,675

)

 

$

23,813

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

2,859

 

 

 

2,865

 

 

 

3,311

 

 

Depreciation and amortization

 

 

5,164

 

 

 

5,425

 

 

 

5,697

 

 

Deferred income tax

 

 

(5,460

)

 

 

(180

)

 

 

(3,353

)