AMSTERDAM, July 24, 2017
/PRNewswire/ -- Core Laboratories N.V. (NYSE: "CLB US" and Euronext
Amsterdam: "CLB NA") ("Core", "Core Lab", or the "Company")
reported second quarter 2017 revenue of $163,900,000, up 4% sequentially from its first
quarter 2017 revenue, with operating and net income of $29,400,000 and $22,700,000, respectively, and earnings per
diluted share ("EPS") of $0.51, all
in accordance with U.S. generally accepted accounting principles
("GAAP"). On a sequential quarterly basis, excluding foreign
currency translations ("ex-fx"), EPS increased 24% to $0.52, operating income increased over 20% to
$29,800,000 and net income increased
over 22% to $23,000,000.
Operating margins for the Company increased sequentially more
than 250 basis points to over 18%, ex-fx, with Company-wide
sequential incremental margins of 88%. The improving margins
were a result of higher-technology services and products being
requested by Core's technologically sophisticated client base.
Primarily, these higher margin services were related to production
maintenance projects and enhanced oil recovery ("EOR") studies in
unconventional reservoirs while higher-margin product sales were
driven by increased demand for Core's recently introduced
HERO®PerFRAC perforating systems. Revenue in the second
quarter was slightly lower compared to previous quarterly guidance
as a result of industry shortages of completion crews and equipment
which caused fewer than expected completions, however an
improvement in revenue mix generated higher operating margins.
During the quarter, Core continued the Company's Share
Repurchase Program and repurchased 55,000 shares during the quarter
at an average price of $103.48 per
share. Since the inception of the Company's Share Repurchase
Program in 2002, Core has lowered its outstanding share count by
over 39,000,000 shares, repurchasing shares at an average of
approximately $41.30 per share. Also,
over this period Core has returned over $2.4
billion to its shareholders via share repurchases, warrant
settlements, and special and quarterly dividend distributions.
As reported in previous quarters, the Board of Supervisory
Directors ("Board") of Core Laboratories N.V. has established an
internal performance metric of achieving a relative performance
return on invested capital ("ROIC") among the service companies
listed as Core's peers by Bloomberg Financial ("Comp Group"). Based
on Bloomberg's calculations for the latest comparable data
available, Core's ROIC is the highest of comparably sized companies
in its oilfield service Comp Group.
On 6 July 2017, Standard and Poors
("S&P") announced that Core Laboratories will be added to the
S&P MidCap 400® Index. Core officially entered
the S&P MidCap Global Industry Classification Standard ("GICS")
Oil & Gas Equipment and Services Sub-Industry index as of
12 July 2017.
Segment Highlights
Beginning in the first quarter of 2017, Core Laboratories has
realigned its operations and is reporting results under two
segments: Reservoir Description and Production Enhancement. The
financial statements that follow show the Company's results for the
first and second quarters of 2017 and 2016 for comparison of
sequential quarterly and year-over-year quarterly results. All
quarterly financial comparisons in this Segment Highlights section
are made to previously reported ex-items results.
Reservoir Description
Reservoir Description operations posted revenue of $104,300,000 derived principally from production
maintenance projects and operating ("opex") budgets primarily from
existing fields located internationally and offshore. Many of these
opex projects are to lessen crude-oil decline rates from the
existing worldwide base of approximately 85 million barrels of oil
production per day ("BOPD"). During the quarter, several final
investment decisions ("FIDs") were announced and while Core Lab is
involved in its clients' capital projects at varying stages of the
decision making process, second quarter revenue tied to these
announcements was immaterial as the operators are currently
developing their project plans that will in all likelihood be
implemented late in 2017 and the beginning of 2018. Operating
income, on a GAAP basis, was $18,700,000, yielding operating margins of 18%.
Ex-fx, operating income increased 9% sequentially to $19,000,000 while operating margins increased
more than 160 basis points to over 18% in response to client
requests for higher technology, higher margin services.
In the Gulf of Mexico ("GOM"),
Core continues to offer exclusive reservoir fluid, phase-behavior
studies at ultra-high temperatures and pressures in
full-visual-cell configuration. These deepwater phase-behavior
studies are primarily being conducted on producing fields,
requiring no new deepwater drilling for field developments. The
data sets are utilized to maximize daily crude oil production and,
more importantly, to maximize ultimate hydrocarbon recovery rates
from challenging ultra-deepwater reservoirs that have temperature
and pressure regimes similar to those in Lower Tertiary fields in
the GOM.
The Company continues to increase the number of major EOR
projects in various stages for unconventional reservoirs. Several
formations and different basins are under study with multiple
clients. Core has determined that the EOR techniques most effective
in unconventional reservoirs will differ greatly from EOR methods
used in conventional reservoirs worldwide. The injection of
miscible gases and the application of gas-adsorption techniques
developed in Core's laboratories at in-situ reservoir pressures and
temperatures have proved far superior to the pressurized physical
movement of hydrocarbons using flood fronts that are typically
employed in conventional fields.
Cycling of in-situ light hydrocarbon gases and the adsorption
and capture of longer-chained hydrocarbons in unconventional
reservoirs are leading to significant improvements in oil-recovery
factors in Company laboratory tests. On average, unconventional
reservoirs currently yield a recovery factor of approximately 9%.
Light hydrocarbon gas injections, cycling, and adsorption
efficiencies have yielded recoveries of up to 15% under
laboratory-based, reservoir-condition testing parameters. Increased
recovery factors applied to unconventional tight-oil reservoirs
could significantly raise client ROIC, free cash flow ("FCF"), and
the net present value of their producing assets by improving their
production type curve results. For example, if an operator
produces from one well, 1,000,000 barrels of crude oil over its
life achieving a 10% recovery, with unconventional EOR applied to
the same well, the type curve could potentially be improved to
achieve recoveries of 1,500,000 barrels of crude oil. In this
case, the recovery factor, as an example, would be increased to
15%.
During the quarter, Core received sufficient industry support to
initiate a Joint Industry Project ("JIP") entitled "Unconventional
EOR in the Eagle Ford Formation" (the "Eagle Ford EOR JIP"). The
JIP participants will furnish a large variety of reservoir cores
and reservoir fluids from the Eagle Ford formation to be studied to
determine the most effective techniques to boost ultimate recovery
rates. Core plans to follow the Eagle Ford EOR JIP with similar
JIPs in other applicable unconventional reservoirs in North and
South America.
Production Enhancement
Production Enhancement operations, largely focused on
unconventional reservoirs, posted significantly higher second
quarter 2017 revenue, operating income, operating margins and
incremental margins compared with the first quarter of the year.
Production Enhancement generated second quarter 2017 revenue of
$59,600,000, up 13% sequentially,
operating income of $10,800,000, up
more than 45% and operating margins that expanded more than 440
basis points to over 18%, creating sequential quarterly incremental
margins of over 50%. Core's clients, who are increasingly focused
on enhancing their stimulation programs, are helping to improve
Core's revenue mix, which led to higher operating margins.
The quarter-over-quarter increase in operating margins is evidence
of Production Enhancement's technological advantage and leverage to
the North American up-cycle.
Slightly lower second quarter revenue compared to previous
quarterly guidance was caused by fewer than expected completions as
a result of industry shortages of completion crews and equipment
causing some anticipated projects to be deferred as indicated by
the increasing number of drilled but uncompleted wells
("DUCs").
As Core sees unconventional EOR technology gaining acceptance, a
joint task force between Reservoir Description and Production
Enhancement operations was constructed to bridge laboratory and
field-scale tests. As clients look to upscale
laboratory-validated gas cycling methods to field level projects,
Core has been requested to conduct diagnostic services as a way to,
among other objectives, determine if the injection gases are being
contained within the target stratigraphic horizon(s). In the
second quarter, Core worked on field-scale programs in which
multiple oil and gas phase diagnostic tracers were deployed within
the injection gas, while produced hydrocarbons in adjacent
wellbores and stratigraphic horizons were tested for the presence
of these tracers. From this diagnostic testing, Core's
clients are gaining insight into the reservoir volume being
contacted by the engineered injection gases, as well as
breakthrough times and inter-well communication paths.
Optimizing these parameters is essential to increasing adsorption
efficiency on the target formation and, ultimately, oil recovery
factors.
Dividends
On 18 April 2017, the Board
announced a quarterly cash dividend of $0.55 per share of common stock, which was paid
on 23 May 2017 to shareholders of
record on 28 April 2017. Dutch
withholding tax was deducted from the dividend at a rate of
15%.
On 6 July 2017, the Board
announced a quarterly cash dividend of $0.55 per share of common stock, payable in the
third quarter of 2017. The quarterly cash dividend will be payable
14 August 2017 to shareholders of
record on 17 July 2017. Dutch
withholding tax will be deducted from the dividend at a rate of
15%.
Return On Invested Capital
As reported in previous quarters, the Company's Board has
established an internal performance metric of achieving a relative
ROIC performance compared with the oilfield service companies
listed as Core's Comp Group by Bloomberg Financial. 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.
According to the latest Comp Group financial information from
Bloomberg, Core's ROIC is the highest of any comparably sized
oilfield service company (greater than $2
billion market capitalization). Comp Group companies listed
by Bloomberg include Halliburton, Schlumberger, Baker Hughes,
Oceaneering, National Oilwell Varco, RPC, and the Wood Group,
amongst others. A total of 9 of the 14 companies listed in the Comp
Group failed to post ROIC that exceeded their weighted average cost
of capital ("WACC"). Core's ratio of ROIC to WACC is the highest of
any comparably sized company in the Comp Group.
Third Quarter 2017 Revenue and EPS Guidance
Internationally, several FIDs have been recently announced by
oil and gas companies; however, activities for Core Lab relating to
those FIDs are not expected to materially increase in 2017 as the
operators are currently developing their project plans and should
begin to implement those plans early in 2018. Further, the
international rig count remains flat due to limited capital
projects underway by international operators. However, opex is
continuing to be spent by operators to maximize recovery from their
existing producing fields.
According to Baker Hughes, the land-based rig count in the U.S.
increased 15% during the second quarter and 44% during the first
half of 2017. The Company believes this increase is in response to
the improved pricing of crude oil in the first quarter, when the
average oil price per barrel was $53.92. However, in the second quarter, crude
prices were more volatile as prices trended down as the quarter
progressed and ultimately ended the quarter at $46.29. Core believes if the crude oil price
continues at the current level for a protracted period of time,
then the U.S. land-based rig count will begin to flatten in the
second half of 2017. If crude persists below $50 per barrel, the U.S. land-based rig count may
actually contract in 2H17 as operators cannot continue to outspend
FCF with debt and equity markets likely closed for additional
capital. This observation is not withstanding the continual
decline in global crude oil inventories and the impact this will
have once the decline falls below the five-year average inventory
level.
Further, in the U.S., Core is experiencing the impact of the
prevailing market and transitory industry shortages of U.S. labor
and completion equipment, which is expected to continue through
year-end. The increasing number of DUCs, as reported by the EIA
throughout 2017, is evidence that completions have not been able to
keep up with the pace of drilling. Core's U.S. revenue is
correlated with completion and stimulation events and large-scale
reservoir rock and reservoir fluid characterization studies, rather
than with immediate increases in rig count. Wells need to be
drilled and subsequently completed, stimulated, and cored -- or
have reservoir fluid samples collected -- before Core can realize a
revenue event.
Taking these transitory market conditions into consideration,
Core projects third quarter 2017 revenue of approximately
$165,500,000 to $170,000,000.
As discussed in prior quarterly earnings releases, Core expects
to generate incremental operating income margins of up to
approximately 60% early in the activity recovery phase, followed by
historical incremental operating income margins of approximately
35% to 45% well into the recovery phase. The Company projects
that its operating income in the third quarter is expected to range
between $30,900,000 and $33,500,000
yielding operating margins of approximately 19%. EPS for the
third quarter is expected to range between $0.54 and $0.56.
Third quarter 2017 FCF is expected to exceed net income and Core
anticipates continuing its share repurchase program during the
quarter.
Earnings Call Scheduled
The Company has scheduled a conference call to discuss Core's
second quarter 2017 earnings announcement. The call will begin at
7:30 a.m. CDT / 2:30 p.m. CEST on Tuesday, 25 July 2017. To listen to the call, please go to
Core's website at www.corelab.com.
Core Laboratories N.V. (www.corelab.com) is a leading provider
of proprietary and patented reservoir description and production
enhancement services 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 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 and other factors as more fully described in the Company's
2016 Form 10-K filed on 10 February
2017 and in other securities filings. 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 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.
CORE LABORATORIES
N.V. & SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
(amounts in
thousands, except per share data)
|
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
%
Variance
|
|
|
30 Jun
2017
|
|
31 Mar
2017
|
|
30 Jun
2016
|
|
vs
Q1-17
|
|
vs
Q2-16
|
REVENUE
|
$
|
163,903
|
|
|
$
|
157,807
|
|
|
$
|
148,069
|
|
|
3.9%
|
|
10.7%
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
Costs of services and
sales
|
117,118
|
|
|
114,572
|
|
|
109,999
|
|
|
2.2%
|
|
6.5%
|
|
General and
administrative expenses
|
11,100
|
|
|
12,756
|
|
|
11,139
|
|
|
(13.0)%
|
|
(0.4)%
|
|
Depreciation and
amortization
|
6,302
|
|
|
6,427
|
|
|
6,751
|
|
|
(1.9)%
|
|
(6.7)%
|
|
Other (income)
expense, net
|
(24)
|
|
|
873
|
|
|
(47)
|
|
|
NM
|
|
NM
|
|
Total operating
expenses
|
134,496
|
|
|
134,628
|
|
|
127,842
|
|
|
(0.1)%
|
|
5.2%
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
29,407
|
|
|
23,179
|
|
|
20,227
|
|
|
26.9%
|
|
45.4%
|
Interest
expense
|
2,692
|
|
|
2,618
|
|
|
3,021
|
|
|
2.8%
|
|
(10.9)%
|
Income before income
tax expense
|
26,715
|
|
|
20,561
|
|
|
17,206
|
|
|
29.9%
|
|
55.3%
|
Income tax
expense
|
4,006
|
|
|
2,879
|
|
|
671
|
|
|
39.1%
|
|
497.0%
|
Net income
|
22,709
|
|
|
17,682
|
|
|
16,535
|
|
|
28.4%
|
|
37.3%
|
Net income
attributable to non-controlling interest
|
19
|
|
|
24
|
|
|
(89)
|
|
|
NM
|
|
NM
|
Net income
attributable to Core Laboratories N.V.
|
$
|
22,690
|
|
|
$
|
17,658
|
|
|
$
|
16,624
|
|
|
28.5%
|
|
36.5%
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings
Per Share:
|
$
|
0.51
|
|
|
$
|
0.40
|
|
|
$
|
0.38
|
|
|
27.5%
|
|
34.2%
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Avg Diluted
Common Shares Outstanding
|
44,374
|
|
|
44,347
|
|
|
43,505
|
|
|
0.1%
|
|
2.0%
|
|
|
|
|
|
|
|
|
|
|
|
Effective Tax
Rate
|
15%
|
|
|
14%
|
|
|
4%
|
|
|
NM
|
|
NM
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT
INFORMATION:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
Reservoir
Description
|
$
|
104,313
|
|
|
$
|
104,895
|
|
|
$
|
108,278
|
|
|
(0.6)%
|
|
(3.7)%
|
Production
Enhancement
|
59,590
|
|
|
52,912
|
|
|
39,791
|
|
|
12.6%
|
|
49.8%
|
|
Total
|
$
|
163,903
|
|
|
$
|
157,807
|
|
|
$
|
148,069
|
|
|
3.9%
|
|
10.7%
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income:
|
|
|
|
|
|
|
|
|
|
Reservoir
Description
|
$
|
18,670
|
|
|
$
|
15,940
|
|
|
$
|
20,139
|
|
|
17.1%
|
|
(7.3)%
|
Production
Enhancement
|
10,765
|
|
|
7,395
|
|
|
247
|
|
|
45.6%
|
|
4,258.3%
|
Corporate and
other
|
(28)
|
|
|
(156)
|
|
|
(159)
|
|
|
NM
|
|
NM
|
|
Total
|
$
|
29,407
|
|
|
$
|
23,179
|
|
|
$
|
20,227
|
|
|
26.9%
|
|
45.4%
|
|
"NM" means
not meaningful
|
CORE LABORATORIES
N.V. & SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
|
(amounts in
thousands, except per share data)
|
(Unaudited)
|
|
|
|
Six Months
Ended
|
|
|
30 Jun
2017
|
|
30 Jun
2016
|
|
%
Variance
|
|
|
|
|
|
|
|
REVENUE
|
$
|
321,710
|
|
|
$
|
301,716
|
|
|
6.6%
|
|
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
|
|
|
Costs of services and
sales
|
231,690
|
|
|
222,813
|
|
|
4.0%
|
|
General and
administrative expenses
|
23,856
|
|
|
22,189
|
|
|
7.5%
|
|
Depreciation and
amortization
|
12,729
|
|
|
13,598
|
|
|
(6.4)%
|
|
Other (income)
expense, net
|
849
|
|
|
(51)
|
|
|
NM
|
|
Total operating
expenses
|
269,124
|
|
|
258,549
|
|
|
4.1%
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
52,586
|
|
|
43,167
|
|
|
21.8%
|
Interest
expense
|
5,310
|
|
|
6,455
|
|
|
(17.7)%
|
|
|
|
|
|
|
|
INCOME BEFORE INCOME
TAX EXPENSE
|
47,276
|
|
|
36,712
|
|
|
28.8%
|
INCOME TAX
EXPENSE
|
6,885
|
|
|
5,060
|
|
|
36.1%
|
NET INCOME
|
40,391
|
|
|
31,652
|
|
|
27.6%
|
NET INCOME
ATTRIBUTABLE TO NON-CONTROLLING
INTEREST
|
43
|
|
|
(54)
|
|
|
NM
|
NET INCOME
ATTRIBUTABLE TO CORE LABORATORIES
N.V.
|
$
|
40,348
|
|
|
$
|
31,706
|
|
|
27.3%
|
|
|
|
|
|
|
|
Diluted Earnings
Per Share:
|
$
|
0.91
|
|
|
$
|
0.74
|
|
|
23.0%
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE
DILUTED COMMON SHARES OUTSTANDING
|
44,360
|
|
|
43,008
|
|
|
3.1%
|
|
|
|
|
|
|
|
Effective Tax
Rate
|
15%
|
|
|
14%
|
|
|
NM
|
|
|
|
|
|
|
|
SEGMENT
INFORMATION:
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
Reservoir
Description
|
$
|
209,208
|
|
|
$
|
215,702
|
|
|
(3.0)%
|
Production
Enhancement
|
112,502
|
|
|
86,014
|
|
|
30.8%
|
|
Total
|
$
|
321,710
|
|
|
$
|
301,716
|
|
|
6.6%
|
|
|
|
|
|
|
|
Operating
income:
|
|
|
|
|
|
Reservoir
Description
|
$
|
34,610
|
|
|
$
|
38,737
|
|
|
(10.7)%
|
Production
Enhancement
|
18,160
|
|
|
4,497
|
|
|
303.8%
|
Corporate and
other
|
(184)
|
|
|
(67)
|
|
|
NM
|
|
Total
|
$
|
52,586
|
|
|
$
|
43,167
|
|
|
21.8%
|
|
"NM" means
not meaningful
|
CORE LABORATORIES
N.V. & SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(amounts in
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
%
Variance
|
ASSETS:
|
30 Jun
2017
|
|
31 Mar
2017
|
|
31 Dec
2016
|
|
vs
Q1-17
|
vs
Q4-16
|
|
|
|
|
|
|
|
|
|
|
Cash and Cash
Equivalents
|
$
|
14,318
|
|
|
$
|
14,342
|
|
|
$
|
14,764
|
|
|
(0.2)%
|
(3.0)%
|
Accounts Receivable,
net
|
128,983
|
|
|
121,810
|
|
|
114,329
|
|
|
5.9%
|
12.8%
|
Inventory
|
35,598
|
|
|
37,537
|
|
|
33,720
|
|
|
(5.2)%
|
5.6%
|
Other Current
Assets
|
27,323
|
|
|
27,292
|
|
|
23,648
|
|
|
0.1%
|
15.5%
|
|
Total Current
Assets
|
206,222
|
|
|
200,981
|
|
|
186,461
|
|
|
2.6%
|
10.6%
|
|
|
|
|
|
|
|
|
|
|
Property, Plant and
Equipment, net
|
125,746
|
|
|
127,728
|
|
|
129,882
|
|
|
(1.6)%
|
(3.2)%
|
Intangibles, Goodwill
and Other Long Term Assets, net
|
251,790
|
|
|
251,707
|
|
|
256,709
|
|
|
—%
|
(1.9)%
|
|
Total
Assets
|
$
|
583,758
|
|
|
$
|
580,416
|
|
|
$
|
573,052
|
|
|
0.6%
|
1.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
Payable
|
$
|
41,607
|
|
|
$
|
36,477
|
|
|
$
|
33,720
|
|
|
14.1%
|
23.4%
|
Other Current
Liabilities
|
59,199
|
|
|
72,320
|
|
|
70,303
|
|
|
(18.1)%
|
(15.8)%
|
|
Total Current
Liabilities
|
100,806
|
|
|
108,797
|
|
|
104,023
|
|
|
(7.3)%
|
(3.1)%
|
|
|
|
|
|
|
|
|
|
|
Long-Term Debt &
Lease Obligations
|
233,739
|
|
|
218,613
|
|
|
216,488
|
|
|
6.9%
|
8.0%
|
Other Long-Term
Liabilities
|
97,761
|
|
|
99,659
|
|
|
97,244
|
|
|
(1.9)%
|
0.5%
|
|
|
|
|
|
|
|
|
|
Total
Equity
|
151,452
|
|
|
153,347
|
|
|
155,297
|
|
|
(1.2)%
|
(2.5)%
|
|
Total Liabilities and
Equity
|
$
|
583,758
|
|
|
$
|
580,416
|
|
|
$
|
573,052
|
|
|
0.6%
|
1.9%
|
CORE LABORATORIES
N.V. & SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOW
|
(amounts in
thousands)
|
(Unaudited)
|
|
|
|
|
Three Months
Ended
|
|
|
|
30 Jun
2017
|
|
31 Mar
2017
|
|
30 Jun
2016
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
|
|
Net Income
|
$
|
22,709
|
|
|
$
|
17,682
|
|
|
$
|
16,535
|
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
Stock-based
compensation
|
5,840
|
|
|
5,723
|
|
|
5,625
|
|
|
Depreciation and
amortization
|
6,302
|
|
|
6,427
|
|
|
6,751
|
|
|
Accounts
Receivable
|
(7,002)
|
|
|
(7,525)
|
|
|
10,805
|
|
|
Inventory
|
1,972
|
|
|
(3,898)
|
|
|
1,721
|
|
|
Accounts
Payable
|
3,867
|
|
|
4,576
|
|
|
(5,645)
|
|
|
Other adjustments to
net income
|
(14,973)
|
|
|
6,776
|
|
|
(8,076)
|
|
|
|
Net cash provided
by operating activities
|
$
|
18,715
|
|
|
$
|
29,761
|
|
|
$
|
27,716
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
|
|
Capital
expenditures
|
$
|
(2,913)
|
|
|
$
|
(6,449)
|
|
|
$
|
(2,444)
|
|
|
Other investing
activities
|
(378)
|
|
|
(177)
|
|
|
(370)
|
|
|
|
Net cash used in
investing activities
|
$
|
(3,291)
|
|
|
$
|
(6,626)
|
|
|
$
|
(2,814)
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
|
|
Repayment of debt
borrowings
|
$
|
(18,000)
|
|
|
$
|
(49,000)
|
|
|
$
|
(220,838)
|
|
|
Proceeds from debt
borrowings
|
33,000
|
|
|
51,000
|
|
|
21,000
|
|
|
Dividends
paid
|
(24,306)
|
|
|
(24,284)
|
|
|
(23,319)
|
|
|
Issuance of common
shares
|
—
|
|
|
—
|
|
|
197,211
|
|
|
Repurchase of
treasury shares
|
(6,115)
|
|
|
(1,273)
|
|
|
(416)
|
|
|
Other financing
activities
|
(27)
|
|
|
—
|
|
|
(427)
|
|
|
|
Net cash used in
financing activities
|
$
|
(15,448)
|
|
|
$
|
(23,557)
|
|
|
$
|
(26,789)
|
|
|
|
|
|
|
|
|
|
NET CHANGE IN CASH
AND CASH EQUIVALENTS
|
(24)
|
|
|
(422)
|
|
|
(1,887)
|
|
CASH AND CASH
EQUIVALENTS, beginning of period
|
14,342
|
|
|
14,764
|
|
|
16,665
|
|
CASH AND CASH
EQUIVALENTS, end of period
|
$
|
14,318
|
|
|
$
|
14,342
|
|
|
$
|
14,778
|
|
CORE LABORATORIES
N.V. & SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOW
|
(amounts in
thousands)
|
(Unaudited)
|
|
|
|
|
Six Months
Ended
|
|
|
|
30 Jun
2017
|
|
30 Jun
2016
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
|
|
|
|
Net Income
|
$
|
40,391
|
|
|
$
|
31,652
|
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
Stock-based
compensation
|
11,563
|
|
|
11,087
|
|
|
Depreciation and
amortization
|
12,729
|
|
|
13,598
|
|
|
Accounts
Receivable
|
(14,527)
|
|
|
34,700
|
|
|
Inventory
|
(1,926)
|
|
|
805
|
|
|
Accounts
Payable
|
8,443
|
|
|
(3,826)
|
|
|
Other adjustments to
net income
|
(8,197)
|
|
|
(14,202)
|
|
|
|
Net cash provided
by operating activities
|
$
|
48,476
|
|
|
$
|
73,814
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
|
|
|
|
Capital
expenditures
|
$
|
(9,362)
|
|
|
$
|
(5,302)
|
|
|
Other investing
activities
|
(555)
|
|
|
(530)
|
|
|
|
Net cash used in
investing activities
|
$
|
(9,917)
|
|
|
$
|
(5,832)
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
|
|
|
|
Repayment of debt
borrowings
|
$
|
(67,000)
|
|
|
$
|
(258,676)
|
|
|
Proceeds from debt
borrowings
|
84,000
|
|
|
34,000
|
|
|
Dividends
paid
|
(48,590)
|
|
|
(46,626)
|
|
|
Issuance of common
shares
|
—
|
|
|
197,211
|
|
|
Repurchase of
treasury shares
|
(7,388)
|
|
|
(1,112)
|
|
|
Other financing
activities
|
(27)
|
|
|
(495)
|
|
|
|
Net cash used in
financing activities
|
$
|
(39,005)
|
|
|
$
|
(75,698)
|
|
|
|
|
|
|
|
NET CHANGE IN CASH
AND CASH EQUIVALENTS
|
(446)
|
|
|
(7,716)
|
|
CASH AND CASH
EQUIVALENTS, beginning of period
|
14,764
|
|
|
22,494
|
|
CASH AND CASH
EQUIVALENTS, end of period
|
$
|
14,318
|
|
|
$
|
14,778
|
|
Non-GAAP Information
Management believes that the exclusion of certain income and
expenses enables management, our investors and the public to more
effectively evaluate 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 used certain non-GAAP
measures that exclude these items; and we feel that this
presentation provides the public a better understanding of the
underlying operations' current period financial results on a more
comparable basis to those 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 Core Lab's financial statements
and filings with the Securities and Exchange Commission.
Reconciliation of
Net Income, Operating Income and Earnings Per Diluted
Share
|
(amounts in
thousands, except per share data)
|
(Unaudited)
|
|
|
Operating
Income
|
|
Three Months
Ended
|
|
30 Jun
2017
|
|
31 Mar
2017
|
GAAP
reported
|
$
|
29,407
|
|
|
$
|
23,179
|
|
Foreign exchange
losses
|
358
|
|
|
97
|
|
Severance,
compensation and other charges
|
—
|
|
|
1,146
|
|
Excluding specific
items
|
$
|
29,765
|
|
|
$
|
24,422
|
|
|
|
|
Net Income
attributable to Core
Laboratories N.V.
|
|
Three Months
Ended
|
|
30 Jun
2017
|
|
31 Mar
2017
|
GAAP
reported
|
$
|
22,690
|
|
|
$
|
17,658
|
|
Foreign exchange
losses
|
304
|
|
|
83
|
|
Severance,
compensation and other charges
|
—
|
|
|
986
|
|
Excluding specific
items
|
$
|
22,994
|
|
|
$
|
18,727
|
|
|
|
|
|
(1) Quarter tax
rate of 4%; guidance given at 14%
|
|
|
|
Earnings Per
Diluted Share
|
|
Three Months
Ended
|
|
30 Jun
2017
|
|
31 Mar
2017
|
GAAP
reported
|
$
|
0.51
|
|
|
$
|
0.40
|
|
Foreign exchange
losses
|
0.01
|
|
|
—
|
|
Severance,
compensation and other charges
|
—
|
|
|
0.02
|
|
Excluding specific
items
|
$
|
0.52
|
|
|
$
|
0.42
|
|
|
|
|
|
(1) Quarter tax
rate of 4%; guidance given at 14%
|
Segment
Information
|
(amounts in
thousands)
|
(Unaudited)
|
|
|
Three Months Ended
June 30, 2017
|
|
|
Reservoir Description
|
|
Production
Enhancement
|
|
Corporate
and Other
|
|
Operating
income
|
$
|
18,670
|
|
|
$
|
10,765
|
|
|
$
|
(28)
|
|
|
Foreign exchange
losses
|
295
|
|
|
24
|
|
|
39
|
|
|
Operating income
excluding specific items
|
$
|
18,965
|
|
|
$
|
10,789
|
|
|
$
|
11
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
31 March 2017
|
|
|
Reservoir Description
|
|
Production
Enhancement
|
|
Corporate
and Other
|
|
Operating
income
|
$
|
15,940
|
|
|
$
|
7,395
|
|
|
$
|
(156)
|
|
|
Foreign exchange
losses
|
237
|
|
|
(189)
|
|
|
49
|
|
|
Severance,
compensation and other charges
|
1,146
|
|
|
—
|
|
|
—
|
|
|
Operating income
excluding specific items
|
$
|
17,323
|
|
|
$
|
7,206
|
|
|
$
|
(107)
|
|
|
|
|
|
|
|
|
|
Free Cash Flow
Core uses the non-GAAP measure of free cash flow to evaluate its
cash flows and results of operations. Free cash flow is an
important measurement because it represents the cash from
operations, in excess of capital expenditures, available to operate
the business and fund non-discretionary obligations. Free cash flow
is not a measure of operating performance under GAAP, and should
not be considered in isolation nor construed as an alternative
consideration to operating income, net income, earnings per share,
or cash flows from operating, investing, or financing activities,
each as determined in accordance with GAAP. You should also not
consider free cash flow as a measure of liquidity. Moreover, since
free cash flow is not a measure determined in accordance with GAAP
and thus is susceptible to varying interpretations and
calculations, free cash flow as presented may not be comparable to
similarly titled measures presented by other companies.
Computation of
Free Cash Flow
|
(amounts in
thousands)
|
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
30 Jun
2017
|
|
30 Jun
2017
|
Net cash provided by
operating activities
|
|
$
|
18,715
|
|
|
$
|
48,476
|
|
Capital
expenditures
|
|
(2,913)
|
|
|
(9,362)
|
|
Free cash
flow
|
|
$
|
15,802
|
|
|
$
|
39,114
|
|
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SOURCE Core Laboratories N.V.