false 00-0000000 0001000229 0001000229 2021-04-21 2021-04-21

 

 

 

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): April 21, 2021

 

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.)

 

 

 

Van Heuven Goedhartlaan 7 B
1181 LE Amstelveen
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 April 21, 2021, Core Laboratories N.V. (the “Company”) issued a press release announcing its financial results for the first quarter of 2021.

Item 7.01 Regulation FD Disclosure.

On April 21, 2021, Core Laboratories N.V. issued a press release announcing a quarterly cash dividend of $0.01 per share of common stock for shareholders of record on May 3, 2021 and payable May 18, 2021.

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 April 21, 2021 *

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 April 21, 2021 *

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:  April 21, 2021

 

By

 

/s/ Christopher S. Hill

 

 

 

 

 

 

Christopher S. Hill

 

 

 

 

 

 

Chief Financial Officer

 

 

 

 

 

 

clb-ex991_6.htm

Exhibit 99.1

 

 

 

FOR IMMEDIATE RELEASE

 

CORE LAB REPORTS FIRST QUARTER 2021 RESULTS FROM CONTINUING OPERATIONS:

 

COMPANY FIRST QUARTER REVENUE OF $108.4 MILLION; DOWN 4.7% SEQUENTIALLY

 

FIRST QUARTER GAAP EPS OF $0.18; $0.15, EX-ITEMS; DOWN 15.6% SEQUENTIALLY

 

COMPANY COMPLETES PREVIOUSLY ANNOUNCED AT-THE-MARKET PROGRAM

 

CORE REDUCES NET DEBT BY $65.0 MILLION

 

CORE GENERATES FCF OF $5.2 MILLION

 

CORE ANNOUNCES Q2 2021 QUARTERLY DIVIDEND

AMSTERDAM (21 April 2021) - Core Laboratories N.V. (NYSE: "CLB US" and Euronext Amsterdam: "CLB NA") ("Core", "Core Lab", or the "Company") reported continuing operations resulted in first quarter 2021 revenue of $108,400,000.  Core’s operating income was $11,600,000, with earnings per diluted share (“EPS”) of $0.18, all in accordance with U.S. generally accepted accounting principles ("GAAP").  Operating income, ex-items, a non-GAAP financial measure, was $12,000,000, yielding operating margins of 11.0% and EPS, ex-items, of $0.15.  A full reconciliation of non-GAAP financial measures and year-over-year comparisons are included in the attached financial tables.

Core’s CEO, Larry Bruno stated, “In addition to typical seasonality, during which client activity generally decreases from the fourth quarter to the first quarter of the new year, the severe winter storm in February 2021 in the mid-continent region of North America adversely impacted both Reservoir Description and Production Enhancement. On-going pandemic disruptions also posed continuing challenges in the first quarter of 2021, primarily across international operations. Despite the headwinds, Core generated positive earnings and free cash flow in the first quarter of 2021, and remains optimistic regarding the remainder of 2021, as activity in North America progresses and international activity builds momentum.”

Liquidity, Free Cash Flow and Dividend

On 17 December 2020, Core Lab announced an At-The-Market (“ATM”) equity offering program under which it could sell, from time to time, common shares of the Company up to an aggregate value of $60,000,000. The Company issued 1,658,012 shares at a weighted average share price of $36.19 under the program, which was completed on 10 March 2021. Net proceeds of $59,100,000, after fees and commissions, were used to reduce outstanding debt on the Company’s revolving credit facility.  

Core continues to focus on generating free cash flow (“FCF”), a non-GAAP financial measure defined as cash from operations less capital expenditures. For the first quarter of 2021, cash from operations was $8,000,000 and capital expenditures were $2,800,000, yielding FCF of $5,200,000, marking another quarter in the Company’s long history of generating positive FCF. The financial results of the first quarter


 

of 2021 include costs associated with disruptions and damage to facilities caused by the winter storm that impacted North America in February 2021. Core does not expect the winter storm to cause any residual negative operational effects in the second quarter of 2021.

For the first quarter of 2021, after funding the quarterly dividend, free cash was used to reduce the Company’s outstanding debt.  Including the use of proceeds from the ATM program, net debt was decreased by $65,000,000 or 26%. Core will continue to use free cash to reduce debt for the foreseeable future.  As of 31 March 2021, Core Lab’s leverage ratio was 2.33, with $214,000,000 of available capacity under the Company’s revolving credit facility.  

The Company anticipates it will continue to generate free cash flow and reduce net debt, while maintaining ample liquidity and remaining in compliance with all debt covenants.

The following graph summarizes the maximum leverage ratio permitted through 31 March 2022:

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

On 15 January 2021, Core’s Board of Supervisory Directors ("Board") announced a quarterly cash dividend of $0.01 per share of common stock, which was paid on 16 February 2021 to shareholders of record on 25 January 2021.  Dutch withholding tax was deducted from the dividend at a rate of 15%.

On 21 April 2021, the Board approved a cash dividend of $0.01 per share of common stock payable in the second quarter of 2021. The second quarter dividend will be payable on Tuesday, 18 May 2021, to shareholders of record on Monday, 3 May 2021.  Dutch withholding tax will be deducted from the dividend at a rate of 15%.

Reservoir Description

Reservoir Description revenue in the first quarter of 2021 was $76,500,000, down nearly 9% sequentially due to i) anticipated seasonality in international regions, which historically slows client activity in the first quarter, and ii) the compounding effect of the North America mid-continent winter storm, which impacted lab operations from Canada to the U.S. Gulf coast.  Additionally, on-going disruptions associated with COVID-19 negatively impacted client activity and project advancement in parts of Europe, South America, and the Middle East. Operating income for the first quarter of 2021 on a GAAP basis was $10,100,000, while operating income, ex-items, was $10,200,000, down 17% sequentially, yielding operating margins, ex-items, of 13%. While operating margins were negatively impacted by workplace disruptions and additional costs caused by the winter storm, operations were restored in most locations

 


 

within ten days or less, helping to minimize impact to the quarter.  

New international projects for Reservoir Description are spooling up.  In the first quarter of 2021, Core Lab, under the direction of Türkiye Petrolleri Anonim Ortaklığı (“TPAO”), was engaged to provide laboratory analyses on conventional core recovered from the Türkali-2 well, located in the deepwater Sakarya Gas Field in the Black Sea. This multi-well analytical program is leveraging Core’s proprietary and patented laboratory technologies, as well as Core’s extensive global experience evaluating cores from unconsolidated strata.  The core analyses will evaluate key geologic, engineering and economic questions in this significant, deepwater, natural gas discovery. Upon arrival at the laboratory, conventional cores were immediately scanned using Core’s proprietary Non-Invasive Testing and Reservoir Optimization (“NITROSM”) technologies, including proprietary Dual-Energy Computed Tomography (“DECTSM”) and High Frequency Spectral Gamma surface logging. The results quickly provided TPAO scientists with lithologic information, as well as a wide range of critical petrophysical parameters for pay delineation.  NITROSM deliverables were presented within a week of receiving the core. These initial analyses are being utilized in conjunction with Core’s recently expanded, machine learning, artificial intelligence algorithms to refine sample selection for the traditional, time-honored physical measurements program.  Core samples are now progressing through the laboratory following consultations between TPAO’s and Core Lab’s technical teams. Core Lab is pleased to be assisting TPAO in this important natural gas discovery.

Also, in the first quarter of 2021, Core continued work on a large-scale, multi-well, integrated project for a national oil company in the Middle East. This study is evaluating an onshore unconventional reservoir.  Leveraging Core’s experience in the region and best practices learned from Core’s global portfolio of unconventional reservoir studies, a comprehensive laboratory analysis program is underway to evaluate rock types, fracture and deformation characteristics, petrophysical properties, organic content and maturity, as well as geomechanical properties. Core Lab will incorporate these laboratory measured data sets into a fully integrated petrophysical model that will include recommendations on completion strategies.

Industry adoption of Core’s proprietary D-CodeSM formation modeling application continued to accelerate during the quarter. This new methodology converts drilling data into calculated geomechanical information. The ability to gain insight into geologic variability along both vertical and horizontal wellbores allows Core’s clients to make effective, time-sensitive decisions related to wellbore stability and the identification of completion target intervals. During the first quarter, projects were initiated on conventional and unconventional reservoirs, located in both the U.S. and the Middle East. D-CodeSM identifies key parameters for effective completion strategies, such as the location of fractures and faults, as well as formation pressure and rock variability between stages. This physics-based model is made possible because of Core Lab’s unique, proprietary database of rock, fluid and pressure data.

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 first quarter 2021 revenue of $31,900,000, up 7% sequentially. Although the North America winter storm negatively impacted February’s U.S. land completion activity, the segment’s positive sequential performance was the result of continued strength in energetic product sales during the quarter.  Operating income on a GAAP basis was $1,600,000, while operating income, ex-items, was $1,800,000, up 53% sequentially. This generated incremental margins of just over 30%, despite inefficiencies caused

 


 

by the winter storm.  Operating margins were 6% for the first quarter of 2021, which improved sequentially by approximately 170 bps.  

Recently, Production Enhancement introduced a new, innovative well intervention technology, Core’s proprietary Rapid Deployment System (“RDSTM”). RDSTM offers a cost-effective solution for remediating wells with down hole production pumps that may become plugged or inoperable.  Compromised subsurface pumps often require the operator to pull a wet, fluid-filled tubing string, which may cause environmental hazards at the wellsite. Conventional remediation methods require mobilizing a wireline unit to the wellsite to perforate and drain the tubing, resulting in lost time and increased cost to the operator.  RDSTM achieves the same results without the need for a wireline unit. The highly robust RDSTM can be deployed in wells with high levels of H2S, or in wells that have stimulation acid trapped in the tubing. In both of these scenarios, RDSTM helps to minimize corrosion to the tubulars, downhole tools and wireline cables.

During the first quarter of 2021, a U.S. land-based operator utilized RDSTM to remedy a tubing string filled with fluid containing 15% hydrochloric acid by volume.  The fluid became trapped in the tubing when an acid squeeze job failed to break down. RDSTM was deployed and triggered within minutes of being introduced into the wellbore. The acid was displaced through the new perforations, saving the operator the expense of a wireline unit, as well as service charges for acid damage to a wireline cable.  

Also, during the first quarter of 2021, Core's completion diagnostics expertise was utilized by a client completing multiple wells in the Spraberry Formation of the Permian Basin.  The goal was to assess whether the target interval in the producing well, and a superjacent water-bearing San Andres zone, had been properly isolated by the cement job.  The operator had been experiencing losses of both drilling mud and cement when completing these Spraberry producers, along with higher than expected water cut when the wells were brought on production.  At the client’s request, Core utilized its proprietary SPECTRASTIM™ diagnostic technology to evaluate cement coverage across the two zones of interest. In the same completion operation, SPECTRASTIM™ was also used to trace the drilling mud cement spacer to help identify thief zones in three wells. Core's completion diagnostics engineers were able to confirm the location of the thief zones, along with incomplete cement isolation of the water-bearing San Andres interval. The findings led the operator to change the design of their two-stage cementing program, resulting in more effective zone isolation, decreased water production and reduced water disposal costs.

Return On Invested Capital

The Board and the Company’s Executive Management continue to focus on strategies that maximize return on invested capital ("ROIC") and FCF, factors that have high correlation to total shareholder return. Core’s commitment to an asset-light business model and disciplined capital stewardship promote capital efficiency and are designed to produce more predictable and superior long-term ROIC.

Global events in 2020 created adverse effects which 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, as we continue to believe superior ROIC will result in higher total return to shareholders.  See Bloomberg ROIC and adjusted ROIC in attached financial tables.

 


 

Industry and Core Lab Outlook

For 2021, Core will continue to execute its strategic plan with a focus on generating free cash flow and reducing net debt, while maximizing ROIC. Additionally, as part of Core’s 2021 strategic focus, the Company will continue to invest in targeted, client-driven technologies that aim to both solve problems and capitalize on Core’s growth opportunities. The Company remains well-positioned, with ample liquidity to invest in its global capabilities, to meet the needs of its clients. These capabilities include Core’s expanding proprietary databases, along with innovations in artificial intelligence and machine learning, which are the foundation of Core’s digital technology transformation.

Core is optimistic about its international growth opportunities throughout the remainder of 2021 as crude oil markets rebound.  With Core Lab having more than 70% of its revenue exposed to international activity, the Company remains active on international projects already underway. Core sees momentum building in the international market, which will drive growth opportunities for the Company throughout the remainder of 2021 and beyond; some of these geographic areas include: Turkey, the South Atlantic Margin, Mexico, Qatar and various other areas of the Middle East.  While unpredictable disruptions related to COVID-19 are expected to persist in the near to mid-term, Core remains optimistic there will be gradual improvement over the remainder of 2021. Considering the continuing improvement in international activity, Core projects Reservoir Description revenue to be up mid to high single digits, sequentially, for the second quarter of 2021.

Core also expects sequential improvement in U.S. land activity, based in part on a strong recovery in the U.S. frac spread following the winter storm; this positive trend continued into April 2021. As a result, Core Lab projects Production Enhancement revenue to grow by mid to high teens, sequentially, in the second quarter of 2021.  Core expects Production Enhancement to continue to track or outperform U.S. land activity levels.

In summary, excluding near-term international challenges related to travel restrictions, Core Lab sees activity levels and financial performance improving throughout the remainder of 2021. Core’s growth opportunities are directly related to existing long-term projects returning to normal workflows, as well as expanding client activity and new market penetration, particularly internationally.  

The Company’s second quarter 2021 guidance is based on projections for underlying operations and excludes gains and losses in foreign exchange. Second quarter 2021 guidance also assumes an effective tax rate of 20%. After fully executing the ATM program, the Company’s ordinary share count outstanding was 46,240,481 as of 1 April 2021.

Earnings Call Scheduled

The Company has scheduled a conference call to discuss Core's first quarter 2021 earnings announcement. The call will begin at 7:30 a.m. CDT / 2:30 p.m. CEST on Thursday, 22 April 2021. 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

 

 

 

 

March 31, 2021

 

 

December 31, 2020

 

 

March 31, 2020

 

 

vs. Q4-20

 

 

vs. Q1-20

 

 

REVENUE

 

$

108,383

 

 

$

113,749

 

 

$

152,400

 

 

(4.7)%

 

 

(28.9)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs of services and sales

 

 

84,150

 

 

 

87,918

 

 

 

115,131

 

 

(4.3)%

 

 

(26.9)%

 

 

General and administrative expense

 

 

8,461

 

 

 

(3,692

)

 

 

19,567

 

 

NM

 

 

(56.8)%

 

 

Depreciation and amortization

 

 

4,871

 

 

 

4,837

 

 

 

5,441

 

 

0.7%

 

 

(10.5)%

 

 

Impairments, inventory write-down and other charges

 

 

 

 

 

443

 

 

 

122,204

 

 

NM

 

 

NM

 

 

Other (income) expense, net

 

 

(721

)

 

 

839

 

 

 

(970

)

 

NM

 

 

NM

 

 

Total operating expenses

 

 

96,761

 

 

 

90,345

 

 

 

261,373

 

 

7.1%

 

 

(63.0)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME (LOSS)

 

 

11,622

 

 

 

23,404

 

 

 

(108,973

)

 

(50.3)%

 

 

NM

 

 

Interest expense

 

 

1,363

 

 

 

2,920

 

 

 

3,411

 

 

(53.3)%

 

 

(60.0)%

 

 

Income (loss) from continuing operations

   before income tax expense

 

 

10,259

 

 

 

20,484

 

 

 

(112,384

)

 

(49.9)%

 

 

NM

 

 

Income tax expense (benefit)

 

 

2,052

 

 

 

6,540

 

 

 

(4,046

)

 

(68.6)%

 

 

NM

 

 

Income (loss) from continuing operations

 

 

8,207

 

 

 

13,944

 

 

 

(108,338

)

 

(41.1)%

 

 

NM

 

 

Income (loss) from discontinued

   operations, net of income taxes

 

 

 

 

 

(424

)

 

 

 

 

NM

 

 

NM

 

 

Net income (loss)

 

 

8,207

 

 

 

13,520

 

 

 

(108,338

)

 

(39.3)%

 

 

NM

 

 

Net income (loss) attributable to non-

   controlling interest

 

 

102

 

 

 

(17

)

 

 

83

 

 

NM

 

 

22.9%

 

 

Net income (loss) attributable to Core

   Laboratories N.V.

 

$

8,105

 

 

$

13,537

 

 

$

(108,421

)

 

(40.1)%

 

 

NM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted EPS (loss per share) from continuing operations

 

$

0.18

 

 

$

0.31

 

 

$

(2.44

)

 

(41.9)%

 

 

NM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

0.18

 

 

$

0.30

 

 

$

(2.44

)

 

(40.0)%

 

 

NM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average diluted common

   shares outstanding

 

 

45,964

 

 

 

44,958

 

 

 

44,447

 

 

2.2%

 

 

3.4%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effective tax rate

 

 

20

%

 

 

32

%

 

 

4

%

 

NM

 

 

NM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SEGMENT INFORMATION:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reservoir Description

 

$

76,486

 

 

$

83,838

 

 

$

102,702

 

 

(8.8)%

 

 

(25.5)%

 

 

Production Enhancement

 

 

31,897

 

 

 

29,911

 

 

 

49,698

 

 

6.6%

 

 

(35.8)%

 

 

Total

 

$

108,383

 

 

$

113,749

 

 

$

152,400

 

 

(4.7)%

 

 

(28.9)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reservoir Description

 

$

10,051

 

 

$

19,426

 

 

$

11,062

 

 

(48.3)%

 

 

(9.1)%

 

 

Production Enhancement

 

 

1,560

 

 

 

4,495

 

 

 

(121,299

)

 

(65.3)%

 

 

NM

 

 

Corporate and Other

 

 

11

 

 

 

(517

)

 

 

1,264

 

 

NM

 

 

NM

 

 

Total

 

$

11,622

 

 

$

23,404

 

 

$

(108,973

)

 

(50.3)%

 

 

NM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

"NM" means not meaningful

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 


 

 

CORE LABORATORIES N.V. & SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEET

(amounts in thousands)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

% Variance

 

 

ASSETS:

 

March 31, 2021

 

 

December 31, 2020

 

 

vs. Q4-20

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

27,806

 

 

$

13,806

 

 

101.4%

 

 

Accounts receivable, net

 

 

86,567

 

 

 

83,192

 

 

4.1%

 

 

Inventory

 

 

39,117

 

 

 

38,151

 

 

2.5%

 

 

Other current assets

 

 

32,327

 

 

 

30,699

 

 

5.3%

 

 

Total Current Assets

 

 

185,817

 

 

 

165,848

 

 

12.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment, net

 

 

113,491

 

 

 

115,293

 

 

(1.6)%

 

 

Right-of-use assets

 

 

70,295

 

 

 

66,385

 

 

5.9%

 

 

Intangibles, goodwill and other long-term assets, net

 

 

214,843

 

 

 

221,053

 

 

(2.8)%

 

 

Total assets

 

$

584,446

 

 

$

568,579

 

 

2.8%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

25,500

 

 

$

23,028

 

 

10.7%

 

 

Short-term operating lease liabilities

 

 

12,357

 

 

 

11,437

 

 

8.0%

 

 

Other current liabilities

 

 

47,676

 

 

 

55,285

 

 

(13.8)%

 

 

Total current liabilities

 

 

85,533

 

 

 

89,750

 

 

(4.7)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Long-term debt, net

 

 

208,166

 

 

 

259,433

 

 

(19.8)%

 

 

Long-term operating lease liabilities

 

 

58,635

 

 

 

56,108

 

 

4.5%

 

 

Other long-term liabilities

 

 

86,066

 

 

 

87,715

 

 

(1.9)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total equity

 

 

146,046

 

 

 

75,573

 

 

93.3%

 

 

Total liabilities and equity

 

$

584,446

 

 

$

568,579

 

 

2.8%

 

 

 

“NM” means not meaningful


 


 

 

CORE LABORATORIES N.V. & SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(amounts in thousands)

(Unaudited)

 

 

 

Three Months Ended

 

 

 

March 31, 2021

 

 

December 31, 2020

 

 

March 31, 2020

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations

 

$

8,207

 

 

$

13,944

 

 

$

(108,338

)

Income (loss) from discontinued operations

 

 

 

 

 

(424

)

 

 

 

Net Income (loss)

 

$

8,207

 

 

$

13,520

 

 

$

(108,338

)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

4,405

 

 

 

(8,860

)

 

 

10,530

 

Depreciation and amortization

 

 

4,871

 

 

 

4,837

 

 

 

5,441

 

Deferred income tax

 

 

4,704

 

 

 

798

 

 

 

(7,374

)

Impairments, inventory write-down and other charges

 

 

 

 

 

443

 

 

 

122,204

 

Adjustments on sale of discontinued operations

 

 

 

 

 

573

 

 

 

 

Accounts receivable

 

 

(3,180

)

 

 

1,192

 

 

 

4,784

 

Inventory

 

 

(400

)

 

 

4,351

 

 

 

(2,285

)

Accounts payable

 

 

2,265

 

 

 

424

 

 

 

132

 

Other adjustments to net income (loss)

 

 

(12,885

)

 

 

(20,190

)

 

 

(3,069

)

Net cash provided by (used in) operating activities

 

$

7,987

 

 

$

(2,912

)

 

$

22,025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

$

(2,772

)

 

$

(3,302

)

 

$

(3,340

)

Proceeds from cash surrender value of company-owned life insurance

 

 

 

 

 

11,509

 

 

 

 

Proceeds (adjustments) from sale of discontinued operations

 

 

 

 

 

(225

)

 

 

 

Other investing activities

 

 

1,702

 

 

 

465

 

 

 

(544

)

Net cash provided by (used in) investing activities

 

$

(1,070

)

 

$

8,447

 

 

$

(3,884

)

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

 

Repayment of debt borrowings

 

$

(119,000

)

 

$

(31,000

)

 

$

(20,000

)

Proceeds from debt borrowings

 

 

68,000

 

 

 

26,000

 

 

 

17,000

 

Proceeds from issuance of common stock

 

 

59,139

 

 

 

 

 

 

 

Dividends paid

 

 

(446

)

 

 

(445

)

 

 

(11,111

)

Repurchase of treasury shares

 

 

(171

)

 

 

(1,201

)

 

 

(1,238

)

Other financing activities

 

 

(439

)

 

 

(229

)

 

 

6

 

Net cash provided by (used in) financing activities

 

$

7,083

 

 

$

(6,875

)

 

$

(15,343

)

 

 

 

 

 

 

 

 

 

 

 

 

 

NET CHANGE IN CASH AND CASH EQUIVALENTS

 

 

14,000

 

 

 

(1,340

)

 

 

2,798

 

CASH AND CASH EQUIVALENTS, beginning of period

 

 

13,806

 

 

 

15,146

 

 

 

11,092

 

CASH AND CASH EQUIVALENTS, end of period

 

$

27,806

 

 

$

13,806

 

 

$

13,890

 

 


 


 

 

Non-GAAP Information

 

Management believes that the exclusion of certain income and expenses enables it to evaluate more effectively the Company's operations period-over-period and to identify operating trends that could otherwise be masked by the excluded Items.  For this reason, we use certain non-GAAP measures that exclude these Items; and we feel that this presentation provides a clearer comparison with the results reported in prior periods. The non-GAAP financial measures should be considered in addition to, and not as a substitute for, the financial results prepared in accordance with GAAP, as more fully discussed in the Company's financial statement and filings with the Securities and Exchange Commission.

 

Reconciliation of Operating Income, Income from Continuing Operations and Earnings Per Diluted Share from Continuing Operations

(amounts in thousands, except per share data)

(Unaudited)

 

 

 

Operating Income (loss) from Continuing Operations

 

 

 

Three Months Ended

 

 

 

March 31, 2021

 

 

December 31, 2020

 

 

March 31, 2020

 

GAAP reported

 

$

11,622

 

 

$

23,404

 

 

$

(108,973

)

Stock compensation 1

 

 

752

 

 

 

(11,934

)

 

 

6,750

 

Inventory write-down

 

 

 

 

 

443

 

 

 

 

Cost reduction and other charges

 

 

 

 

 

 

 

 

1,155

 

Impairments 3

 

 

 

 

 

 

 

 

122,204

 

Facility exit cost

 

 

 

 

 

256

 

 

 

 

Foreign exchange losses (gains)

 

 

(408

)

 

 

852

 

 

 

(576

)

Excluding specific items

 

$

11,966

 

 

$

13,021

 

 

$

20,560

 

 

 

 

 

 

 

Income (loss) from Continuing Operations

 

 

 

Three Months Ended

 

 

 

March 31, 2021

 

 

December 31, 2020

 

 

March 31, 2020

 

GAAP reported

 

$

8,207

 

 

$

13,944

 

 

$

(108,338

)

Stock compensation 1

 

 

602

 

 

 

(11,934

)

 

 

6,750

 

Inventory write-down

 

 

 

 

 

301

 

 

 

 

Interest rate hedge settlement and restructuring 2

 

 

(1,506

)

 

 

 

 

 

 

Cost reduction and other charges

 

 

 

 

 

 

 

 

924

 

Impairments 3

 

 

 

 

 

 

 

 

113,181

 

Facility exit cost

 

 

 

 

 

174

 

 

 

 

Impact of higher (lower) tax rate

 

 

 

 

 

5,018

 

 

 

1,663

 

Foreign exchange losses (gains)

 

 

(326

)

 

 

578

 

 

 

(461

)

Excluding specific items

 

$

6,977

 

 

$

8,081

 

 

$

13,719

 

 

 

 

 


 

 

 

 

Earnings (Loss) Per Diluted Share from Continuing Operations

 

 

 

Three Months Ended

 

 

 

March 31, 2021

 

 

December 31, 2020

 

 

March 31, 2020

 

GAAP reported

 

$

0.18

 

 

$

0.31

 

 

$

(2.44

)

Stock compensation 1

 

 

0.01

 

 

 

(0.27

)

 

 

0.15

 

Inventory write-down

 

 

 

 

 

0.01

 

 

 

 

Cost reduction and other charges

 

 

 

 

 

 

 

 

0.02

 

Interest rate hedge settlement and restructuring 2

 

 

(0.03

)

 

 

 

 

 

 

Impact on assuming dilution

 

 

 

 

 

 

 

 

0.02

 

Impairments 3

 

 

 

 

 

 

 

 

2.53

 

Impact of higher (lower) tax rate

 

 

 

 

 

0.11

 

 

 

0.04

 

Foreign exchange losses (gains)

 

 

(0.01

)

 

 

0.02

 

 

 

(0.01

)

Excluding specific items

 

$

0.15

 

 

$

0.18

 

 

$

0.31

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Three months ended December 31, 2020 includes an adjustment to reverse previously recognized stock compensation expense for

       shares that were granted but did not vest and were revalued.

(2) Three months ended March 31, 2021 includes a credit to interest expense associated with the settlement and restructuring of interest

       rate hedges.

(3) Three months ended March 31, 2020 includes impairment charge for goodwill and intangible assets.

 

 

 

Segment Information

(amounts in thousands)

(Unaudited)

 

 

 

Operating Income (Loss) from Continuing Operations

 

 

 

Three Months Ended March 31, 2021

 

 

 

Reservoir Description

 

 

Production Enhancement

 

 

Corporate and Other

 

GAAP reported

 

$

10,051

 

 

$

1,560

 

 

$

11

 

Foreign exchange losses

 

 

(345

)

 

 

1

 

 

 

(64

)

Stock compensation

 

 

516

 

 

 

236

 

 

 

 

Excluding specific items

 

$

10,222

 

 

$

1,797

 

 

$

(53