NCS Multistage Holdings, Inc. (NASDAQ: NCSM) (the “Company,” “NCS,”
“we” or “us”), a leading provider of highly engineered products and
support services that facilitate the optimization of oil and
natural gas well completions and field development strategies,
today announced its results for the quarter ended
September 30, 2021.
Financial Review
Total revenues were $32.4 million for the quarter ended
September 30, 2021, which was an increase of 99% compared to
the third quarter of 2020. This increase reflected higher
product sales and services volumes in Canada and higher services
volumes in the U.S., which was partially offset by reduced
international product sales and services volumes and decreased U.S.
product sales, especially at Repeat Precision, LLC (“Repeat
Precision”), as well as lower pricing for certain products and
services, including at Repeat Precision. We believe the overall
increase resulted from higher industry drilling and completion
activity in the third quarter of 2021 as compared to 2020,
particularly in North America, as oil demand and commodity
prices in the third quarter of 2021 were higher than the third
quarter of 2020, which was more significantly impacted by the
Coronavirus disease 2019 (“COVID-19”) pandemic. Total
revenues increased by 51% as compared to the second
quarter of 2021 with an increase of 140% in Canada partially
offset by decreases of 13% in the U.S. and 25% in international
markets.
Gross profit, which we define as total revenues less total cost
of sales exclusive of depreciation and amortization, was $14.8
million, or 46% of total revenues, in the third quarter of 2021,
compared to $6.1 million, or 37% of total revenues, in the third
quarter of 2020. Cost of sales as a percentage of total revenues
declined due to an increase in revenue and higher utilization of
manufacturing capacity and field service personnel as well as a
reduction in payroll taxes due to the U.S. employee retention
credit (“ERC”). This improvement was partially offset by lower
pricing for certain products and services.
Selling, general and administrative (“SG&A”) expenses
totaled $11.0 million for the third quarter of 2021, a decrease of
$1.5 million compared to the same period in 2020. This overall
decrease in expense reflects a benefit of $2.3 million in 2021
associated with the ERC. In addition, severance charges
declined due to the timing of workforce reductions, which were
incurred primarily during 2020. Share-based compensation, bad
debt expense and professional fees, primarily related to litigation
matters, were also lower. The overall SG&A decrease was
partially offset by the reinstatement of certain salaries that were
reduced in 2020 and bonus accruals.
Net income was $2.8 million, or $1.14 per diluted share, for the
quarter ended September 30, 2021, which included a net impact
of $1.7 million (after tax effect of $3.7 million, or $1.54
per diluted share) related to the ERC, less the effect of bonus
accruals and associated payroll burdens, and a net foreign currency
exchange loss, less the related tax effects primarily associated
with changes in valuation allowances. Adjusted net loss, which
excludes these items, was $(1.0) million, or $(0.40) per diluted
share, for the quarter ended September 30, 2021. This compares
to a net loss of $(5.9) million, or $(2.48) per diluted share,
in the third quarter of 2020, which included a net impact of $(0.8)
million (after tax effect of $(1.2) million, or $(0.52) per diluted
share) related to the write-off of deferred loan costs and a net
foreign currency exchange loss as well as a benefit related to a
reduction in foreign tax expense and tax effects due to valuation
allowances. Adjusted net loss, which excludes these items, was
$(4.6) million, or $(1.96) per diluted share, for the quarter ended
September 30, 2020.
Adjusted EBITDA was $4.2 million for the quarter ended
September 30, 2021, a $6.3 million improvement as compared to
the third quarter of 2020 and a $5.8 million improvement as
compared to the second quarter of 2021.
Capital Expenditures and Liquidity
The Company incurred capital expenditures of $0.3 million, net
of proceeds from the sale of property and equipment, for the nine
months ended September 30, 2021 as compared to $1.2 million
for the nine months ended September 30, 2020.
As of September 30, 2021, the Company had $18.4 million in
cash and $8.2 million in total debt, with our senior secured credit
facility remaining undrawn, utilizing letter of credit commitments
of less than $0.1 million. The borrowing base under our senior
secured credit facility as of September 30, 2021 was $13.7
million. The Company’s net working capital, which we define as our
current assets, excluding cash and cash equivalents, minus our
current liabilities, excluding current maturities of long-term
debt, was $48.7 million as of September 30, 2021.
Review and Outlook
NCS’s Chief Executive Officer, Robert Nipper commented, “NCS
continued to demonstrate the benefits of the Company’s strategy
during the third quarter, with significant increases in revenue and
Adjusted EBITDA as compared to prior periods, positive year-to-date
free cash flow and increases in our cash balance and total
liquidity as compared to last quarter.
This strategy is rooted in our commitment to provide value and
deliver innovative products to our customers and to create value
for our shareholders. It is the talent, dedication and resolve of
our exceptional team that allows us to accomplish this. I want to
thank all the great people that have chosen to be a part of NCS and
Repeat Precision.
Our revenue in the third quarter of $32.4 million was higher by
99% and 51% as compared to the third quarter of 2020 and the second
quarter of 2021, respectively. The standout for NCS was our strong
performance in Canada, where revenue increased by approximately
500% and 140% as compared to the third quarter of 2020 and the
second quarter of 2021, respectively, which outperformed comparable
increases in the Canadian land rig count of 228% and 111%,
respectively. Canada continues to be a bright spot for us with the
Canadian rig count having surpassed 2019 levels earlier this year,
and the performance of our Canadian operations has offset
lower-than-expected activity at Repeat Precision, which negatively
impacted our U.S. results during the third quarter of 2021. With
our strong third quarter, our year-to-date total revenues of $82.4
million are 4% above our revenue from the same period last
year.
Our gross margin of 46% during the quarter is our highest since
the fourth quarter of 2019 and compares to 37% and 35% in the third
quarter of 2020 and the second quarter of 2021, respectively. The
margin performance reflects the operating leverage we have with
higher activity levels and includes approximately $0.8 million in
ERC benefits, net of related incremental bonus accruals. We
continue to deliver excellent operational performance with zero
recordable incidents in 2021.
Our focus on cost and capital discipline continues, enabling us
to further improve our financial position. Our Adjusted EBITDA of
$4.2 million during the third quarter is an increase of $6.3
million as compared to the third quarter of 2020 and an increase of
$5.8 million as compared to the second quarter of 2021. With only
$0.3 million in net capital expenditures through the first nine
months of 2021, our free cash flow over the same period is $6.4
million.
We ended the third quarter with $18.4 million in cash and only
$8.2 million in debt, which is comprised entirely of capital
leases. Our revolving credit facility remains undrawn with a
borrowing base of $13.7 million as of September 30, 2021.
For the fourth quarter, we expect a continuation of modest
increases in drilling and completion activity in the U.S.,
primarily led by private exploration and production companies,
partially offset by a potential decrease in activity in late
December. Activity levels in Canada, which has had a stronger
recovery than the U.S., continue to be above 2019 levels, which we
expect to continue into the fourth quarter. The international rig
count, and access to international markets, continues to improve
gradually, with differences across regions. We expect the fourth
quarter to be the strongest quarter of the year for us outside of
North America.”
Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBITDA Less
Share-Based Compensation, Adjusted Net (Loss) Income, Adjusted Net
(Loss) Earnings per Diluted Share, Free Cash Flow, Free Cash Flow
Less Distributions to Non-Controlling Interest and net working
capital are non-GAAP financial measures. For an explanation of
these measures and a reconciliation, refer to “Non-GAAP Financial
Measures” below.
Conference Call
The Company will host a conference call to discuss its third
quarter 2021 results and future financial expectations on Tuesday,
November 2, 2021 at 7:30 a.m. Central Time
(8:30 a.m. Eastern Time). To join the conference call from
within the United States, participants may dial (844) 400-1696. To
join the conference call from outside of the United States,
participants may dial (703) 736-7385. The conference access
code is 7059669. Participants are encouraged to log in to the
webcast or dial in to the conference call approximately ten minutes
prior to the start time. To listen via live webcast, please visit
the Investors section of the Company’s website,
www.ncsmultistage.com.
An audio replay of the conference call will be available shortly
after the conclusion of the call and will remain available for
approximately seven days. It can be accessed by dialing (855)
859-2056 within the United States or (404) 537-3406 outside of the
United States. The conference call replay access code is 7059669.
The replay will also be available in the Investors section of the
Company’s website shortly after the conclusion of the call and will
remain available for approximately seven days.
About NCS Multistage Holdings, Inc.
NCS Multistage Holdings, Inc. is a leading provider of highly
engineered products and support services that facilitate the
optimization of oil and natural gas well completions and field
development strategies. NCS provides products and services to
exploration and production companies for use in horizontal wells in
unconventional oil and natural gas formations throughout North
America and in selected international markets, including Argentina,
China, the Middle East and the North Sea. NCS’s common stock is
traded on the NASDAQ Capital Market under the symbol “NCSM.”
Additional information is available on the website,
www.ncsmultistage.com.
Forward Looking Statements
This press release contains forward-looking statements within
the meaning of the “safe harbor” provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements can be identified by words such as “anticipates,”
“intends,” “plans,” “seeks,” “believes,” “estimates,” “expects” and
similar references to future periods, or by the inclusion of
forecasts or projections. Examples of forward-looking statements
include, but are not limited to, statements we make regarding the
outlook for our future business and financial performance.
Forward-looking statements are based on our current expectations
and assumptions regarding our business, the economy and other
future conditions. Because forward-looking statements relate to the
future, by their nature, they are subject to inherent
uncertainties, risks and changes in circumstances that are
difficult to predict. As a result, our actual results may differ
materially from those contemplated by the forward-looking
statements. Important factors that could cause our actual results
to differ materially from those in the forward-looking statements
include regional, national or global political, economic, business,
competitive, market and regulatory conditions and the following:
the risks and uncertainties relating to public health crises,
including the COVID-19 pandemic and its continuing impact on market
conditions and our business, financial condition, results of
operations, cash flows and stock price; declines in the level of
oil and natural gas exploration and production activity within
Canada and the United States; oil and natural gas price
fluctuations; the financial health of our customers including their
ability to pay for products or services provided; inability to
successfully implement our strategy of increasing sales of products
and services into the United States; significant competition for
our products and services that results in pricing pressures,
reduced sales, or reduced market share; loss of significant
customers; our inability to successfully develop and implement new
technologies, products and services; our inability to protect and
maintain critical intellectual property assets; losses and
liabilities from uninsured or underinsured business activities; our
failure to identify and consummate potential acquisitions; our
inability to integrate or realize the expected benefits from
acquisitions; currency exchange rate fluctuations; impact of severe
weather conditions; risks resulting from the operations of a joint
venture arrangement; restrictions on the availability of our
customers to obtain water essential to the drilling and hydraulic
fracturing processes; changes in legislation or regulation
governing the oil and natural gas industry, including restrictions
on emissions of greenhouse gases; our inability to meet regulatory
requirements for use of certain chemicals by our tracer diagnostics
business; change in trade policy, including the impact of
additional tariffs; our inability to accurately predict customer
demand, which may result in us holding excess or obsolete
inventory; failure to comply with or changes to federal, state and
local and non-U.S. laws and other regulations, including
anti-corruption and environmental regulations, guidelines and
regulations for the use of explosives, the Coronavirus Aid, Relief,
and Economic Security Act and the U.S. Tax Cuts and Jobs Act of
2017; loss of our information and computer systems; system
interruptions or failures, including complications with our
enterprise resource planning system, cyber-security breaches,
identity theft or other disruptions that could compromise our
information; impairment in the carrying value of long-lived assets
and goodwill; our failure to establish and maintain effective
internal control over financial reporting; risks in attracting and
retaining qualified employees and key personnel or labor cost
inflation; loss of any of our key suppliers or significant
disruptions negatively impacting our supply chain; risks and
uncertainties relating to cost reduction efforts or savings we may
realize from such cost reduction efforts; the reduction in our
senior secured credit facility borrowing base or our inability to
comply with the covenants in our debt agreements; and our inability
to obtain sufficient liquidity on reasonable terms, or at all and
other factors discussed or referenced in our filings made from time
to time with the Securities and Exchange Commission. Any
forward-looking statement made by us in this press release speaks
only as of the date on which we make it. Factors or events that
could cause our actual results to differ may emerge from time to
time, and it is not possible for us to predict all of them. We
undertake no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information,
future developments or otherwise, except as may be required by
law.
Contact
Ryan HummerChief Financial Officer(281)
453-2222IR@ncsmultistage.com
NCS MULTISTAGE HOLDINGS,
INC.CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(In thousands, except per share
data)(Unaudited)
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
Product sales |
|
$ |
21,229 |
|
|
$ |
11,660 |
|
|
$ |
57,167 |
|
|
$ |
55,948 |
|
Services |
|
|
11,182 |
|
|
|
4,652 |
|
|
|
25,219 |
|
|
|
23,646 |
|
Total revenues |
|
|
32,411 |
|
|
|
16,312 |
|
|
|
82,386 |
|
|
|
79,594 |
|
Cost of
sales |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product sales,
exclusive of depreciation and amortization
expense shown below |
|
|
12,898 |
|
|
|
7,874 |
|
|
|
37,487 |
|
|
|
35,191 |
|
Cost of services, exclusive of
depreciation and amortization expense shown
below |
|
|
4,738 |
|
|
|
2,334 |
|
|
|
12,354 |
|
|
|
12,024 |
|
Total cost of sales, exclusive of depreciation
and amortization expense shown below |
|
|
17,636 |
|
|
|
10,208 |
|
|
|
49,841 |
|
|
|
47,215 |
|
Selling, general and
administrative expenses |
|
|
10,982 |
|
|
|
12,474 |
|
|
|
35,589 |
|
|
|
48,782 |
|
Depreciation |
|
|
985 |
|
|
|
1,000 |
|
|
|
2,857 |
|
|
|
3,446 |
|
Amortization |
|
|
168 |
|
|
|
103 |
|
|
|
502 |
|
|
|
1,340 |
|
Impairment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
50,194 |
|
Income (loss) from operations |
|
|
2,640 |
|
|
|
(7,473 |
) |
|
|
(6,403 |
) |
|
|
(71,383 |
) |
Other (expense)
income |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
(163 |
) |
|
|
(876 |
) |
|
|
(529 |
) |
|
|
(1,622 |
) |
Other income, net |
|
|
176 |
|
|
|
414 |
|
|
|
1,046 |
|
|
|
580 |
|
Foreign currency exchange
(loss) gain |
|
|
(236 |
) |
|
|
(260 |
) |
|
|
156 |
|
|
|
(467 |
) |
Total other (expense) income |
|
|
(223 |
) |
|
|
(722 |
) |
|
|
673 |
|
|
|
(1,509 |
) |
Income (loss) before income tax |
|
|
2,417 |
|
|
|
(8,195 |
) |
|
|
(5,730 |
) |
|
|
(72,892 |
) |
Income tax (benefit) expense |
|
|
(809 |
) |
|
|
(3,058 |
) |
|
|
45 |
|
|
|
(9,956 |
) |
Net income (loss) |
|
|
3,226 |
|
|
|
(5,137 |
) |
|
|
(5,775 |
) |
|
|
(62,936 |
) |
Net income attributable to
non-controlling interest |
|
|
430 |
|
|
|
726 |
|
|
|
621 |
|
|
|
3,233 |
|
Net income (loss)
attributable to NCS
Multistage Holdings, Inc. |
|
$ |
2,796 |
|
|
$ |
(5,863 |
) |
|
$ |
(6,396 |
) |
|
$ |
(66,169 |
) |
Earnings (loss) per
common share |
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per common share attributable to
NCS Multistage Holdings, Inc. |
|
$ |
1.16 |
|
|
$ |
(2.48 |
) |
|
$ |
(2.67 |
) |
|
$ |
(28.01 |
) |
Diluted earnings (loss) per common share attributable to
NCS Multistage Holdings, Inc. |
|
$ |
1.14 |
|
|
$ |
(2.48 |
) |
|
$ |
(2.67 |
) |
|
$ |
(28.01 |
) |
Weighted average
common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
2,401 |
|
|
|
2,368 |
|
|
|
2,394 |
|
|
|
2,362 |
|
Diluted |
|
|
2,445 |
|
|
|
2,368 |
|
|
|
2,394 |
|
|
|
2,362 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NCS MULTISTAGE HOLDINGS,
INC.CONDENSED CONSOLIDATED BALANCE
SHEETS*(In thousands, except share
data)(Unaudited)
|
|
September 30, |
|
December 31, |
|
|
2021 |
|
|
2020 |
|
Assets |
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
18,444 |
|
|
$ |
15,545 |
|
Accounts receivable—trade, net |
|
|
22,617 |
|
|
|
21,925 |
|
Inventories, net |
|
|
33,668 |
|
|
|
34,871 |
|
Prepaid expenses and other current assets |
|
|
3,128 |
|
|
|
2,975 |
|
Other current receivables |
|
|
5,405 |
|
|
|
8,358 |
|
Total current assets |
|
|
83,262 |
|
|
|
83,674 |
|
Noncurrent assets |
|
|
|
|
|
|
Property and equipment, net |
|
|
25,592 |
|
|
|
24,435 |
|
Goodwill |
|
|
15,222 |
|
|
|
15,222 |
|
Identifiable intangibles, net |
|
|
5,911 |
|
|
|
6,413 |
|
Operating lease assets |
|
|
5,041 |
|
|
|
5,170 |
|
Deposits and other assets |
|
|
3,201 |
|
|
|
3,559 |
|
Deferred income taxes, net |
|
|
272 |
|
|
|
205 |
|
Total noncurrent assets |
|
|
55,239 |
|
|
|
55,004 |
|
Total assets |
|
$ |
138,501 |
|
|
$ |
138,678 |
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
Accounts payable—trade |
|
$ |
5,571 |
|
|
$ |
4,943 |
|
Accrued expenses |
|
|
5,935 |
|
|
|
3,347 |
|
Income taxes payable |
|
|
636 |
|
|
|
653 |
|
Operating lease liabilities |
|
|
1,738 |
|
|
|
1,826 |
|
Current maturities of long-term debt |
|
|
1,653 |
|
|
|
1,347 |
|
Other current liabilities |
|
|
2,218 |
|
|
|
2,768 |
|
Total current liabilities |
|
|
17,751 |
|
|
|
14,884 |
|
Noncurrent liabilities |
|
|
|
|
|
|
Long-term debt, less current maturities |
|
|
6,578 |
|
|
|
4,442 |
|
Operating lease liabilities, long-term |
|
|
3,862 |
|
|
|
3,989 |
|
Other long-term liabilities |
|
|
1,836 |
|
|
|
1,864 |
|
Deferred income taxes, net |
|
|
155 |
|
|
|
13 |
|
Total noncurrent liabilities |
|
|
12,431 |
|
|
|
10,308 |
|
Total liabilities |
|
|
30,182 |
|
|
|
25,192 |
|
Commitments and
contingencies |
|
|
|
|
|
|
Stockholders’ equity |
|
|
|
|
|
|
Preferred stock, $0.01 par value, 10,000,000 shares authorized, no
shares issued and outstanding at |
|
|
|
|
|
|
September 30, 2021 and December 31, 2020 |
|
|
— |
|
|
|
— |
|
Common stock, $0.01 par value, 11,250,000 shares authorized,
2,397,735 shares issued |
|
|
|
|
|
|
and 2,380,353 shares outstanding at September 30, 2021 and
2,371,992 shares issued |
|
|
|
|
|
|
and 2,359,918 shares outstanding at December 31, 2020 |
|
|
24 |
|
|
|
24 |
|
Additional paid-in capital |
|
|
436,040 |
|
|
|
432,801 |
|
Accumulated other comprehensive loss |
|
|
(81,964 |
) |
|
|
(81,780 |
) |
Retained deficit |
|
|
(263,024 |
) |
|
|
(256,628 |
) |
Treasury stock, at cost; 17,382 shares at September 30, 2021
and 12,074 shares |
|
|
|
|
|
|
at December 31, 2020 |
|
|
(1,006 |
) |
|
|
(809 |
) |
Total stockholders’ equity |
|
|
90,070 |
|
|
|
93,608 |
|
Non-controlling interest |
|
|
18,249 |
|
|
|
19,878 |
|
Total equity |
|
|
108,319 |
|
|
|
113,486 |
|
Total liabilities and stockholders' equity |
|
$ |
138,501 |
|
|
$ |
138,678 |
|
|
|
|
|
|
|
|
|
|
_____________________
* Preliminary
NCS MULTISTAGE HOLDINGS,
INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS(In
thousands)(Unaudited)
|
|
Nine Months Ended |
|
|
September 30, |
|
|
2021 |
|
|
2020 |
|
Cash flows from operating activities |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(5,775 |
) |
|
$ |
(62,936 |
) |
Adjustments to reconcile net
loss to net cash provided by operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
3,359 |
|
|
|
4,786 |
|
Impairment |
|
|
— |
|
|
|
50,194 |
|
Amortization of deferred loan costs |
|
|
211 |
|
|
|
226 |
|
Write-off of deferred loan costs |
|
|
— |
|
|
|
606 |
|
Share-based compensation |
|
|
5,208 |
|
|
|
6,477 |
|
Provision for inventory obsolescence |
|
|
1,715 |
|
|
|
1,198 |
|
Deferred income tax expense (benefit) |
|
|
79 |
|
|
|
(2,069 |
) |
Gain on sale of property and equipment |
|
|
(310 |
) |
|
|
(514 |
) |
Provision for doubtful accounts |
|
|
(129 |
) |
|
|
895 |
|
Proceeds from note receivable |
|
|
223 |
|
|
|
300 |
|
Changes in operating assets
and liabilities: |
|
|
|
|
|
|
Accounts receivable—trade |
|
|
(761 |
) |
|
|
25,814 |
|
Inventories, net |
|
|
(613 |
) |
|
|
1,386 |
|
Prepaid expenses and other assets |
|
|
39 |
|
|
|
(2,754 |
) |
Accounts payable—trade |
|
|
902 |
|
|
|
(4,555 |
) |
Accrued expenses |
|
|
2,606 |
|
|
|
131 |
|
Other liabilities |
|
|
(2,706 |
) |
|
|
1,421 |
|
Income taxes receivable/payable |
|
|
2,673 |
|
|
|
(6,098 |
) |
Net cash provided by operating activities |
|
|
6,721 |
|
|
|
14,508 |
|
Cash flows from
investing activities |
|
|
|
|
|
|
Purchases of property and
equipment |
|
|
(342 |
) |
|
|
(1,882 |
) |
Purchase and development of
software and technology |
|
|
(324 |
) |
|
|
— |
|
Proceeds from sales of
property and equipment |
|
|
369 |
|
|
|
704 |
|
Net cash used in investing activities |
|
|
(297 |
) |
|
|
(1,178 |
) |
Cash flows from
financing activities |
|
|
|
|
|
|
Payments on equipment note and
finance leases |
|
|
(958 |
) |
|
|
(1,268 |
) |
Line of credit borrowings |
|
|
360 |
|
|
|
5,000 |
|
Payments on revolver |
|
|
(360 |
) |
|
|
(15,000 |
) |
Treasury shares withheld |
|
|
(197 |
) |
|
|
(157 |
) |
Distribution to noncontrolling
interest |
|
|
(2,250 |
) |
|
|
(3,800 |
) |
Payment of deferred loan cost
related to senior secured credit facility |
|
|
— |
|
|
|
(482 |
) |
Net cash used in financing activities |
|
|
(3,405 |
) |
|
|
(15,707 |
) |
Effect of exchange rate
changes on cash and cash equivalents |
|
|
(120 |
) |
|
|
(231 |
) |
Net change in cash and cash equivalents |
|
|
2,899 |
|
|
|
(2,608 |
) |
Cash and cash equivalents
beginning of period |
|
|
15,545 |
|
|
|
11,243 |
|
Cash and cash equivalents end
of period |
|
$ |
18,444 |
|
|
$ |
8,635 |
|
Noncash investing and
financing activities |
|
|
|
|
|
|
Leased assets obtained in
exchange for new finance lease liabilities |
|
$ |
3,711 |
|
|
$ |
5,102 |
|
Leased assets obtained in
exchange for new operating lease liabilities |
|
$ |
1,736 |
|
|
$ |
2,573 |
|
Return of vehicles under
finance lease |
|
$ |
(187 |
) |
|
$ |
(722 |
) |
NCS MULTISTAGE HOLDINGS,
INC.RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL
INFORMATION(In thousands, except per share
data) (Unaudited)
Non-GAAP Financial Measures
EBITDA is defined as net income (loss) before interest expense,
net, income tax expense and depreciation and amortization. Adjusted
EBITDA is defined as EBITDA adjusted to exclude certain items which
we believe are not reflective of ongoing operating performance or
which, in the case of an impairment and share-based compensation,
are non-cash in nature. Adjusted EBITDA margin represents Adjusted
EBITDA as a percentage of total revenues. Adjusted EBITDA Less
Share-Based Compensation is defined as Adjusted EBITDA minus
share-based compensation expense. Adjusted Net (Loss) Income is
defined as net income (loss) attributable to NCS Multistage
Holdings, Inc. adjusted to exclude certain items which we believe
are not reflective of ongoing performance. Adjusted Net (Loss)
Earnings per Diluted Share is defined as Adjusted Net (Loss) Income
divided by our diluted weighted average common shares outstanding
during the relevant period. Free cash flow is defined as net cash
provided by (used in) operating activities less purchases of
property and equipment (inclusive of the purchase and development
of software and technology) plus proceeds from sales of property
and equipment, as presented in our consolidated statement of cash
flows. We define free cash flow less distributions to
non-controlling interest as free cash flow less distributions to
non-controlling interest, as presented in the net cash used in
financing activities section of our consolidated statements of cash
flows. Net working capital is defined as total current assets,
excluding cash and cash equivalents, minus total current
liabilities, excluding current maturities of long-term debt.
Net working capital excludes cash and cash equivalents and current
maturities of long-term debt to evaluate the investment in working
capital required to support our business. We believe that
Adjusted EBITDA, Adjusted Net (Loss) Income and Adjusted Net (Loss)
Earnings per Diluted Share are important measures that exclude
costs that management believes do not reflect our ongoing operating
performance and, in the case of Adjusted EBITDA, certain costs
associated with our capital structure. We believe that Adjusted
EBITDA Less Share-Based Compensation presents our financial
performance in a manner that is comparable to the presentation
provided by many of our peers. We believe free cash flow is useful
because it provides information to investors regarding the cash
that was available in the period that was in excess of our needs to
fund our capital expenditures and other investment needs. We
believe that free cash flow less distributions to non-controlling
interest is useful because it provides information to investors
regarding the cash that was available in the period that was in
excess of our needs to fund our capital expenditures, other
investment needs, and cash distributions to our joint venture
partner. We believe that net working capital is useful in analyzing
the cash flow and working capital needs of the Company, including
determining the efficiencies of our operations and our ability to
readily convert assets into cash. Accordingly, Adjusted EBITDA,
Adjusted EBITDA margin, Adjusted EBITDA Less Share-Based
Compensation, Adjusted Net (Loss) Income, Adjusted Net (Loss)
Earnings per Diluted Share, Free Cash Flow, Free Cash Flow Less
Distributions to Non-Controlling Interest and net working capital
are key metrics that management uses to assess the period-to-period
performance of our core business operations. We believe that
presenting Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBITDA
Less Share-Based Compensation, Adjusted Net (Loss) Income, Adjusted
Net (Loss) Earnings per Diluted Share, Free Cash Flow and Free Cash
Flow Less Distributions to Non-Controlling Interest enables
investors to assess our performance from period to period using the
same metrics utilized by management and that Adjusted EBITDA,
Adjusted EBITDA margin, Adjusted EBITDA Less Share-Based
Compensation, Adjusted Net (Loss) Income and Adjusted Net (Loss)
Earnings per Diluted Share enable investors to evaluate our
performance relative to other companies that are not subject to
such factors.
EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBITDA
Less Share-Based Compensation, Adjusted Net (Loss) Income, Adjusted
Net (Loss) Earnings per Diluted Share, Free Cash Flow, Free Cash
Flow Less Distributions to Non-Controlling Interest and net working
capital (our “non-GAAP financial measures”) are not defined under
generally accepted accounting principles (“GAAP”), are not measures
of net income, income from operations, cash provided by operating
activities, working capital or any other performance measure
derived in accordance with GAAP, and are subject to important
limitations. Our non-GAAP financial measures may not be comparable
to similarly titled measures of other companies in our industry and
are not measures of performance calculated in accordance with GAAP.
Our non-GAAP financial measures have important limitations as
analytical tools and you should not consider them in isolation or
as substitutes for analysis of our financial performance as
reported under GAAP, and they should not be considered as
alternatives to net income (loss), cash provided by operating
activities, working capital or any other performance measures
derived in accordance with GAAP as measures of operating
performance or as alternatives to cash flow from operating
activities as measures of our liquidity.
The tables below set forth reconciliations of our non-GAAP
financial measures to the most directly comparable measures of
financial performance calculated under GAAP:
NET WORKING CAPITAL*
|
|
September 30, |
|
December 31, |
|
|
2021 |
|
|
2020 |
|
Working capital |
|
$ |
65,511 |
|
|
$ |
68,790 |
|
Cash and cash equivalents |
|
|
(18,444 |
) |
|
|
(15,545 |
) |
Current maturities of long
term debt |
|
|
1,653 |
|
|
|
1,347 |
|
Net working capital |
|
$ |
48,720 |
|
|
$ |
54,592 |
|
|
|
|
|
|
|
|
|
|
_____________________
* Preliminary
NCS MULTISTAGE HOLDINGS,
INC.RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL
INFORMATION(In thousands, except per share
data) (Unaudited)
ADJUSTED NET LOSS AND ADJUSTED NET LOSS
PER DILUTED SHARE
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, 2021 |
|
September 30, 2020 |
|
September 30, 2021 |
|
September 30, 2020 |
|
|
Effect onNet Income (Loss) |
|
Impact on Diluted Income (Loss) Per Share |
|
Effect onNet Loss |
|
Impact on Diluted Loss Per Share |
|
Effect onNet Loss |
|
Impact on Diluted Loss Per Share |
|
Effect onNet Loss |
|
Impact on Diluted Loss Per Share |
Net income (loss) attributable to NCS Multistage Holdings,
Inc. |
|
$ |
2,796 |
|
|
$ |
1.14 |
|
|
$ |
(5,863 |
) |
|
$ |
(2.48 |
) |
|
$ |
(6,396 |
) |
|
$ |
(2.67 |
) |
|
$ |
(66,169 |
) |
|
$ |
(28.01 |
) |
Adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment (a) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
50,194 |
|
|
|
21.24 |
|
Foreign currency exchange loss (gain) (b) |
|
|
204 |
|
|
|
0.08 |
|
|
|
216 |
|
|
|
0.09 |
|
|
|
(184 |
) |
|
|
(0.08 |
) |
|
|
427 |
|
|
|
0.18 |
|
Write-off of deferred loan costs (c) |
|
|
— |
|
|
|
— |
|
|
|
606 |
|
|
|
0.26 |
|
|
|
— |
|
|
|
— |
|
|
|
606 |
|
|
|
0.26 |
|
Net benefit of ERC (d) |
|
|
(1,907 |
) |
|
|
(0.78 |
) |
|
|
— |
|
|
|
— |
|
|
|
(1,907 |
) |
|
|
(0.80 |
) |
|
|
— |
|
|
|
— |
|
Income tax impact from adjustments (e) |
|
|
(2,045 |
) |
|
|
(0.84 |
) |
|
|
394 |
|
|
|
0.17 |
|
|
|
445 |
|
|
|
0.19 |
|
|
|
616 |
|
|
|
0.26 |
|
Adjusted net loss
attributable to NCS Multistage Holdings, Inc. |
|
$ |
(952 |
) |
|
$ |
(0.40 |
) |
|
$ |
(4,647 |
) |
|
$ |
(1.96 |
) |
|
$ |
(8,042 |
) |
|
$ |
(3.36 |
) |
|
$ |
(14,326 |
) |
|
$ |
(6.07 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
_____________________(a) Represents non-cash impairment charges
for property and equipment and intangible assets during 2020 as the
fair values were lower than the carrying values.(b) Represents
realized and unrealized foreign currency translation gains and
losses primarily due to movement in the foreign currency exchange
rates during the applicable periods.(c) Represents deferred loan
costs that were expensed during the third quarter of 2020 in
connection with the amendment to our senior secured credit facility
in August 2020. The reduction in deferred loan costs were in
proportion to the reduction in its potential capacity.(d)
Represents ERC benefits recorded during the period less the effect
on bonus and associated payroll burden accruals.(e) Represents the
income tax adjustments including the valuation allowance recorded
to reduce the carrying value of both our U.S. and Canadian deferred
tax assets in addition to a reduction in foreign income tax in
2020.
NCS MULTISTAGE HOLDINGS,
INC.RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL
INFORMATION(In thousands)
(Unaudited)
ADJUSTED EBITDA, ADJUSTED EBITDA MARGIN,
AND ADJUSTED EBITDA LESS SHARE-BASED COMPENSATION
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
Net income (loss) |
|
$ |
3,226 |
|
|
$ |
(5,137 |
) |
|
$ |
(5,775 |
) |
|
$ |
(62,936 |
) |
Income tax (benefit)
expense |
|
|
(809 |
) |
|
|
(3,058 |
) |
|
|
45 |
|
|
|
(9,956 |
) |
Interest expense, net |
|
|
163 |
|
|
|
876 |
|
|
|
529 |
|
|
|
1,622 |
|
Depreciation |
|
|
985 |
|
|
|
1,000 |
|
|
|
2,857 |
|
|
|
3,446 |
|
Amortization |
|
|
168 |
|
|
|
103 |
|
|
|
502 |
|
|
|
1,340 |
|
EBITDA |
|
|
3,733 |
|
|
|
(6,216 |
) |
|
|
(1,842 |
) |
|
|
(66,484 |
) |
Impairment (a) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
50,194 |
|
Share-based compensation
(b) |
|
|
1,018 |
|
|
|
1,602 |
|
|
|
3,239 |
|
|
|
6,274 |
|
Professional fees (c) |
|
|
928 |
|
|
|
1,249 |
|
|
|
2,823 |
|
|
|
2,211 |
|
Net benefit of ERC (d) |
|
|
(1,907 |
) |
|
|
— |
|
|
|
(1,907 |
) |
|
|
— |
|
Foreign currency exchange loss
(gain) (e) |
|
|
236 |
|
|
|
260 |
|
|
|
(156 |
) |
|
|
467 |
|
Severance and other
termination benefits (f) |
|
|
— |
|
|
|
844 |
|
|
|
— |
|
|
|
5,618 |
|
Other (g) |
|
|
153 |
|
|
|
151 |
|
|
|
446 |
|
|
|
927 |
|
Adjusted EBITDA |
|
$ |
4,161 |
|
|
$ |
(2,110 |
) |
|
$ |
2,603 |
|
|
$ |
(793 |
) |
Adjusted EBITDA Margin |
|
|
13% |
|
|
|
(13% |
) |
|
|
3% |
|
|
|
(1% |
) |
Adjusted EBITDA Less Share-Based Compensation |
|
$ |
3,143 |
|
|
$ |
(3,712 |
) |
|
$ |
(636 |
) |
|
$ |
(7,067 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
_____________________(a) Represents non-cash impairment charges
for property and equipment and intangible assets during 2020 as the
fair values were lower than the carrying values.(b) Represents
non-cash compensation charges related to share-based compensation
granted to our officers, employees and directors.(c) Represents
non-capitalizable costs of professional services incurred in
connection with legal proceedings and the evaluation of potential
acquisitions. During the second quarter of 2020, we received
proceeds from our directors and officers liability insurance
related to the reimbursement of legal expenses that we incurred to
defend a director and officer in the litigation with Diamondback
Industries, Inc.(d) Represents ERC benefits recorded during the
period less the effect on bonus and associated payroll burden
accruals. (e) Represents realized and unrealized foreign currency
translation gains and losses primarily due to movement in the
foreign currency exchange rates during the applicable periods.(f)
Reflects charges incurred in connection with the reductions in
workforce implemented in 2020.(g) Represents the impact of a
research and development subsidy that is included in income tax
expense (benefit) in accordance with GAAP along with other charges
and credits.
FREE CASH FLOW
|
|
Nine Months Ended |
|
|
September 30, |
|
|
2021 |
|
|
2020 |
|
Net cash provided by operating activities |
|
$ |
6,721 |
|
|
$ |
14,508 |
|
Purchases of property and
equipment |
|
|
(342 |
) |
|
|
(1,882 |
) |
Purchase and development of
software and technology |
|
|
(324 |
) |
|
|
— |
|
Proceeds from sales of
property and equipment |
|
|
369 |
|
|
|
704 |
|
Free cash flow |
|
$ |
6,424 |
|
|
$ |
13,330 |
|
|
|
|
|
|
|
|
|
|
FREE CASH FLOW LESS DISTRIBUTIONS TO
NON-CONTROLLING INTEREST
|
|
Nine Months Ended |
|
|
September 30, |
|
|
2021 |
|
|
2020 |
|
Net cash provided by operating activities |
|
$ |
6,721 |
|
|
$ |
14,508 |
|
Purchases of property and
equipment |
|
|
(342 |
) |
|
|
(1,882 |
) |
Purchase and development of
software and technology |
|
|
(324 |
) |
|
|
— |
|
Proceeds from sales of
property and equipment |
|
|
369 |
|
|
|
704 |
|
Distributions to
non-controlling interest |
|
|
(2,250 |
) |
|
|
(3,800 |
) |
Free cash flow less
distributions to non-controlling interest |
|
$ |
4,174 |
|
|
$ |
9,530 |
|
|
|
|
|
|
|
|
|
|
NCS MULTISTAGE HOLDINGS,
INC.REVENUES BY GEOGRAPHIC
AREA(In thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
United
States |
|
|
|
|
|
|
|
|
|
|
|
|
Product sales |
|
$ |
5,324 |
|
$ |
8,192 |
|
$ |
18,762 |
|
$ |
29,319 |
Services |
|
|
2,715 |
|
|
1,143 |
|
|
6,328 |
|
|
5,588 |
Total United States |
|
|
8,039 |
|
|
9,335 |
|
|
25,090 |
|
|
34,907 |
Canada |
|
|
|
|
|
|
|
|
|
|
|
|
Product sales |
|
|
15,678 |
|
|
2,762 |
|
|
36,877 |
|
|
24,740 |
Services |
|
|
6,423 |
|
|
931 |
|
|
14,653 |
|
|
9,819 |
Total Canada |
|
|
22,101 |
|
|
3,693 |
|
|
51,530 |
|
|
34,559 |
Other
Countries |
|
|
|
|
|
|
|
|
|
|
|
|
Product sales |
|
|
227 |
|
|
706 |
|
|
1,528 |
|
|
1,889 |
Services |
|
|
2,044 |
|
|
2,578 |
|
|
4,238 |
|
|
8,239 |
Total Other Countries |
|
|
2,271 |
|
|
3,284 |
|
|
5,766 |
|
|
10,128 |
Total |
|
|
|
|
|
|
|
|
|
|
|
|
Product sales |
|
|
21,229 |
|
|
11,660 |
|
|
57,167 |
|
|
55,948 |
Services |
|
|
11,182 |
|
|
4,652 |
|
|
25,219 |
|
|
23,646 |
Total revenues |
|
$ |
32,411 |
|
$ |
16,312 |
|
$ |
82,386 |
|
$ |
79,594 |
|
|
|
|
|
|
|
|
|
|
|
|
|
NCS Multistage (NASDAQ:NCSM)
과거 데이터 주식 차트
부터 6월(6) 2024 으로 7월(7) 2024
NCS Multistage (NASDAQ:NCSM)
과거 데이터 주식 차트
부터 7월(7) 2023 으로 7월(7) 2024