ChampionX Corporation (“ChampionX”) (NYSE: CHX) (“the
Company”) today announced second quarter of 2020 results. On
June 3, 2020, the Company completed the combination of its business
with the legacy ChampionX business. Actual results in the
second quarter of 2020 include the results of operations of the
legacy Apergy businesses for the entire period, and results from
legacy ChampionX for the month of June 2020.
For the second quarter of 2020, revenue was $298.9 million, net
loss attributable to ChampionX was $109.6 million, and adjusted
EBITDA was $34.5 million. Loss before income taxes margin was
(36.8)%, and adjusted EBITDA margin was 11.5%. Cash provided by
operating activities was $48.8 million, an increase of $19.6
million sequentially, and free cash flow was $37.0 million. Cash
flow figures include payment of $35.1 million in
transaction-related expenses in the quarter.
Results on a pro forma basis for ChampionX are provided
supplementary to the actual results of the Company and represent
results as if legacy ChampionX was combined with the Company for
the entire period.
For the second quarter of 2020, pro forma revenue was $614.7
million, pro forma net loss was $60.1 million attributable to
ChampionX, and pro forma adjusted EBITDA was $62.8 million,
including $6 million of estimated cost avoidance synergies. Pro
forma results are presented in the section titled “ChampionX Pro
Forma Results.” For additional information on the pro forma results
see note titled “Results on a Pro Forma Basis” below and the tables
included in this release. i
Reportable Segments
ChampionX reports its results under the following segments as
well as Corporate and Other:
- Production Chemical Technologies—manufactures,
supplies, and services a comprehensive suite of innovative
production chemical products to oil and natural gas producers and
midstream operators, including solutions to manage and control
corrosion, oil and water separation, flow assurance, sour gas
treatment and a host of water-related issues. Production
Chemical Technologies represents the Oilfield Performance segment
of legacy ChampionX.
- Production & Automation
Technologies—designs, manufactures, markets and services a
full range of artificial lift equipment, end-to-end digital
automation solutions, as well as other production equipment.
Production & Automation Technologies segment reporting is
unchanged from legacy Apergy.
- Drilling Technologies—designs, manufactures,
and markets polycrystalline diamond cutters and bearings for use in
oil and gas drilling. Drilling Technologies segment reporting is
unchanged from legacy Apergy.
- Reservoir Chemical Technologies—manufactures,
supplies, and services a broad range of drilling and completion
chemical products that support well stimulation, acidizing,
cementing, and remediation needs in the oil and natural gas
industry. Reservoir Chemical Technologies represents the
Specialty Performance segment of legacy ChampionX.
Business activities that do not meet the criteria of an
operating segment have been combined into Corporate and Other.
Corporate and Other includes (i) corporate and overhead expenses,
and (ii) revenue and costs for activities that are not operating
segments.
CEO Commentary
“As we continue to operate in the midst of a global pandemic,
the health and safety of our employees remains our highest
priority, and we are committed to taking all necessary steps to
protect them,” ChampionX’s President and Chief Executive Officer
Sivasankaran “Soma” Somasundaram said. “I want to thank all our
employees for their continued dedication through this challenging
period. They continue to demonstrate outstanding adaptability and
flexibility during these uncertain times. It is a privilege for me
to lead such a high-performing team.
“The second quarter saw an important and transformative
milestone in our Company’s history. With the closing of our merger
with legacy ChampionX we became a new company with a strengthened
portfolio and expanded global scale. We believe that the
execution of our merger with ChampionX was well timed and positions
the new company for stronger performance and enhanced stability in
the face of difficult near-term market conditions, and positions us
strongly for long-term success as the global energy transition
evolves. We believe the more resilient performance of our
Production Chemical Technologies segment, which experienced a 15%
sequential decline in pro forma revenue, demonstrates the
advantages of our strategy of focusing on relatively more stable
production-related businesses. In addition, with the merger we have
increased our international revenues by more than eight times on a
pro forma basis, increased our exposure to larger and more stable
customers, particularly national and international oil companies,
and on a pro forma basis immediately reduced the leverage on our
balance sheet.
“In the second quarter our team demonstrated exceptional
execution. During the quarter, we reacted swiftly as market
conditions deteriorated and proactively implemented our
comprehensive cost reduction plans to support positive adjusted
EBITDA and cash flow generation. For the legacy Apergy companies,
we exceeded our cost saving objectives for the second quarter with
some additional temporary cost savings actions, including furloughs
and salary reductions. At legacy ChampionX, cost reduction actions
were implemented prior to the merger, and combined with incremental
actions we are now taking, we expect to deliver approximately $50
million of annualized savings within legacy ChampionX. These
actions are distinct from our plan to capture the synergies
provided by the merger.
“Even in the depths of the current downturn, we continue to
maintain a strong balance sheet and generate positive free cash
flow. Excluding $35 million of cash transaction expenses, we
generated free cash flow of $72 million in the second
quarter. We also repaid in full the $125 million we borrowed
in April under our revolving credit facility. We ended the quarter
with $501 million of liquidity, including $142 million of cash on
the balance sheet and $359 million of available capacity on our
revolver. In addition, we remain focused on our free cash flow
generation and we fully intend to start repaying our debt as early
as third quarter of 2020.
“Additionally, our merger integration is on-track and we are
implementing our plans to capture the $75 million in cost synergies
within 24 months of closing, as well as drive additional revenue
growth opportunities. We expect to be at the higher end of
the previously announced $25 to $35 million of run rate cost
synergies exiting 2020.
“While visibility remains challenging due to the uncertainty
caused by the COVID pandemic, we are encouraged by the
stabilization in the price of oil. In the third quarter, within our
production-focused segments of Production Chemical Technologies and
Production & Automation Technologies, we expect to see a modest
sequential increase in our revenue due to operators bringing
production back on-line. Drilling Technologies revenue is expected
to decrease sequentially, driven by continued low drilling activity
in the third quarter. On a consolidated basis, in the third quarter
we expect a modest sequential increase in our revenue and adjusted
EBITDA, driven by our production-focused segments. As we move into
the fourth quarter, the seasonal impacts of holidays and E&P
capital budget exhaustion are unclear at this time.
“We are excited about the completion of the merger and the
possibilities for our combined company. Our disciplined operating
model, differentiated products and technology, strong free cash
flow, and enhanced production-focused portfolio will enable us to
be a long-term winner in the evolving global oil & gas
industry.”
ChampionX Actual Results
| |
|
Three Months Ended |
|
|
|
|
Variance |
|
(dollars in thousands, except per share
amounts) |
|
Jun. 30, 2020 |
|
|
Mar. 31, 2020 |
|
|
Jun. 30, 2019 |
|
|
Sequential |
|
|
Year-over-year |
|
Revenue |
$ |
298,914 |
|
|
$ |
261,434 |
|
|
$ |
306,170 |
|
|
|
14 |
% |
|
|
(2 |
)% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income
(loss) attributable to ChampionX |
$ |
(109,645 |
) |
|
$ |
(633,728 |
) |
|
$ |
22,937 |
|
|
|
N/M |
|
|
|
N/M |
|
| Diluted
earnings (loss) per share attributable to ChampionX |
$ |
(0.95 |
) |
|
$ |
(8.18 |
) |
|
$ |
0.30 |
|
|
|
N/M |
|
|
|
N/M |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted net
income (loss) attributable to ChampionX |
$ |
(49,234 |
) |
|
$ |
1,998 |
|
|
$ |
25,958 |
|
|
|
N/M |
|
|
|
N/M |
|
| Adjusted
diluted earnings (loss) per share attributable to ChampionX |
$ |
(0.43 |
) |
|
$ |
0.03 |
|
|
$ |
0.33 |
|
|
|
N/M |
|
|
|
N/M |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income
(loss) before income taxes |
$ |
(110,001 |
) |
|
$ |
(660,461 |
) |
|
$ |
29,288 |
|
|
|
N/M |
|
|
|
N/M |
|
| Income
(loss) before income taxes margin |
|
(36.8 |
)% |
|
|
(252.6 |
)% |
|
|
9.6 |
% |
|
|
N/M |
|
|
|
N/M |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted
EBITDA |
$ |
34,461 |
|
|
$ |
53,258 |
|
|
$ |
73,507 |
|
|
|
(35 |
)% |
|
|
(53 |
)% |
| Adjusted
EBITDA margin |
|
11.5 |
% |
|
|
20.4 |
% |
|
|
24.0 |
% |
|
|
(890) bps |
|
|
(1250) bps |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net cash
provided by operating activities |
$ |
48,811 |
|
|
$ |
29,222 |
|
|
$ |
39,391 |
|
|
$ |
19,589 |
|
|
$ |
9,420 |
|
| Capital
expenditures |
$ |
11,855 |
|
|
$ |
7,467 |
|
|
$ |
12,970 |
|
|
$ |
4,388 |
|
|
$ |
(1,115 |
) |
| |
|
|
|
|
|
|
| N/M – not
meaningful |
|
|
|
|
|
|
ChampionX Consolidated actual results in the second
quarter of 2020 include the results of operations of the legacy
Apergy businesses for the entire period, and results from legacy
ChampionX for June 2020.
Second quarter 2020 consolidated revenue includes $17.9 million
of chemical sales to Ecolab for the month of June. As part of the
Merger, the Company entered into a Cross Supply and Product
Transfer Agreement with Ecolab in which certain products will be
manufactured by one party for the other and sold at cost over a
period of no longer than 3 years from the merger date. Revenue
associated with these sales is reported in Corporate and Other
within our financial statements.
Production Chemical Technologies – Actual
Results
| |
Three Months Ended |
|
|
(dollars in thousands) |
Jun. 30, 2020 |
|
|
Revenue |
$ |
136,002 |
|
|
|
Operating profit |
$ |
9,922 |
|
|
|
Operating profit margin |
|
7.3 |
% |
|
|
Adjusted segment EBITDA |
$ |
22,431 |
|
|
|
Adjusted segment EBITDA margin |
|
16.5 |
% |
|
|
|
|
|
|
|
| N/M – not
meaningful |
|
|
|
|
Actual results for Production Chemical Technologies for the
second quarter of 2020 only includes the month of June.
Production & Automation Technologies – Actual
Results
| |
Three Months Ended |
|
Variance |
|
(dollars in thousands) |
|
Jun. 30, 2020 |
|
|
Mar. 31, 2020 |
|
|
Jun. 30, 2019 |
|
Sequential |
|
Year-over-year |
|
Revenue |
$ |
114,741 |
|
|
$ |
205,479 |
|
|
$ |
235,819 |
|
|
(44 |
)% |
|
(51 |
)% |
|
Operating profit (loss) |
$ |
(37,168 |
) |
|
$ |
(648,591 |
) |
|
$ |
19,868 |
|
|
N/M |
|
|
N/M |
|
|
Operating profit (loss) margin |
|
(32.4 |
)% |
|
|
(315.6 |
)% |
|
|
8.4 |
% |
|
N/M |
|
|
N/M |
|
|
Adjusted segment EBITDA |
$ |
14,492 |
|
|
$ |
40,031 |
|
|
$ |
50,700 |
|
|
(64 |
)% |
|
(71 |
)% |
|
Adjusted segment EBITDA margin |
|
12.6 |
% |
|
|
19.5 |
% |
|
|
21.5 |
% |
|
(690) bps |
|
(890) bps |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| N/M – not
meaningful |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
In the second quarter of 2020, Production & Automation
Technologies revenue decreased $90.7 million, or 44%, sequentially,
due to lower volumes driven by the rapid reduction in worldwide
E&P capital spending. Sequentially, North America revenue
declined 48% and international revenue declined 27%. On a
year-over-year basis, Production & Automation Technologies
revenue decreased $121.1 million, or 51%, driven by the same
factors as the sequential change, with North America revenue
declining 55% and international revenue declining 33%.
Revenue from digital products was $23.1 million in the second
quarter of 2020, a decrease of $10.8 million, or 32%, compared to
$33.9 million in the first quarter of 2020, and a decrease of $11.2
million, or 33%, compared to $34.3 million in the second quarter of
2019. The sequential and year-over-year decline in digital revenue
was driven by reduced hardware sales due to reductions in E&P
capital budgets. We expect that sales of digital hardware equipment
will continue to be impacted by reduced E&P capital
spending.
In the second quarter of 2020, segment operating loss was $37.2
million. Adjusted segment EBITDA was $14.5 million, which
decreased $25.5 million sequentially, or 64%, due to the
significantly lower volume, partially offset by the benefits of
cost reduction actions. On a year-over-year basis, adjusted
segment EBITDA decreased $36.2 million, or 71%, due to the lower
volume and product mix, partially offset by cost reduction
actions.
The sequential decrease in adjusted segment EBITDA of $25.5
million was 28% of the sequential decrease in revenue of $90.7
million, demonstrating the effectiveness of our cost reduction
actions.
Drilling Technologies – Actual Results
| |
Three Months Ended |
|
Variance |
|
(dollars in thousands) |
|
Jun. 30, 2020 |
|
|
Mar. 31, 2020 |
|
|
Jun. 30, 2019 |
|
Sequential |
|
Year-over-year |
|
Revenue |
$ |
20,948 |
|
|
$ |
55,955 |
|
|
$ |
70,351 |
|
|
(63 |
)% |
|
(70 |
)% |
|
Operating profit (loss) |
$ |
(3,811 |
) |
|
$ |
11,359 |
|
|
$ |
24,251 |
|
|
N/M |
|
|
N/M |
|
|
Operating profit (loss) margin |
|
(18.2 |
)% |
|
|
20.3 |
% |
|
|
34.5 |
% |
|
N/M |
|
|
N/M |
|
|
Adjusted segment EBITDA |
$ |
1,800 |
|
|
$ |
15,770 |
|
|
$ |
26,577 |
|
|
(89 |
)% |
|
(93 |
)% |
|
Adjusted segment EBITDA margin |
|
8.6 |
% |
|
|
28.2 |
% |
|
|
37.8 |
% |
|
(1960) bps |
|
(2920) bps |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| N/M – not
meaningful |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
In the second quarter of 2020, Drilling Technologies revenue
decreased by $35.0 million, or 63%, sequentially, driven by the
significant decline of worldwide drilling activity, customer
destocking of polycrystalline diamond cutter inventories, a product
shift mix toward lower price diamond cutters, and lower diamond
bearings revenue. On a year-over-year basis, Drilling Technologies
revenue decreased $49.4 million, or 70%, driven by the same factors
as the sequential change.
Diamond bearings revenue in the second quarter of 2020 was $2.3
million, down $3.8 million, or 62%, sequentially, and down $8.9
million, or 80%, year over year.
In the second quarter of 2020, segment operating loss was $3.8
million, and adjusted segment EBITDA was $1.8 million. Sequentially
adjusted segment EBITDA decreased by $14.0 million, or 89%, due to
the lower volumes and shift in product mix, partially offset by the
benefits of cost reduction actions. Year-over-year, adjusted
segment EBITDA decreased by $24.8 million, or 93%, as a result of
the lower volumes and shift in product mix, partially offset by
cost reduction actions.
The sequential decrease in adjusted segment EBITDA of $14.0
million was 40% of the sequential decrease in revenue of $35.0
million, demonstrating the effectiveness of our cost reduction
actions.
Sequentially, the average worldwide and U.S. rig counts declined
39% and 50%, respectively. On a year-over-year basis, the average
worldwide and U.S. rig counts declined 43% and 60%,
respectively.
Reservoir Chemical Technologies – Actual
Results
| |
Three Months Ended |
|
|
(dollars in thousands) |
Jun. 30, 2020 |
|
|
Revenue |
$ |
9,306 |
|
|
|
Operating profit |
$ |
(2,811 |
) |
|
|
Operating profit margin |
|
(30.2 |
)% |
|
|
Adjusted segment EBITDA |
$ |
(314 |
) |
|
|
Adjusted segment EBITDA margin |
|
(3.4 |
)% |
|
|
|
|
|
|
|
| N/M – not
meaningful |
|
|
|
|
Actual results for Reservoir Chemical Technologies for the
second quarter of 2020 only includes the month of June.
ChampionX Pro Forma Results
Results on a pro forma basis for ChampionX are provided
supplementary to the actual results of the Company and represent
results as if legacy ChampionX was combined with the Company for
the entire period.
| |
|
Three Months Ended |
|
|
|
|
Variance |
|
(dollars in thousands, except per share
amounts) |
|
Jun. 30, 2020 |
|
|
Mar. 31, 2020 |
|
|
Jun. 30, 2019 |
|
|
Sequential |
|
|
Year-over-year |
|
Pro forma revenue |
$ |
614,684 |
|
|
$ |
820,695 |
|
|
$ |
891,001 |
|
|
|
(25 |
)% |
|
|
(31 |
)% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Pro forma
net income (loss) attributable to ChampionX |
$ |
(60,100 |
) |
|
$ |
(734,425 |
) |
|
$ |
57,078 |
|
|
|
N/M |
|
|
|
N/M |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Pro forma
income (loss) before income taxes |
$ |
(45,089 |
) |
|
$ |
(741,383 |
) |
|
$ |
75,930 |
|
|
|
N/M |
|
|
|
N/M |
|
| Pro forma
income (loss) before income taxes margin |
|
(7.3 |
)% |
|
|
(90.3 |
)% |
|
|
8.5 |
% |
|
|
N/M |
|
|
|
N/M |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Pro forma
adjusted EBITDA |
$ |
62,754 |
|
|
$ |
146,217 |
|
|
$ |
163,006 |
|
|
|
(57 |
)% |
|
|
(62 |
)% |
| Pro forma
adjusted EBITDA margin |
|
10.2 |
% |
|
|
17.8 |
% |
|
|
18.3 |
% |
|
|
(760) bps |
|
|
(810) bps |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| N/M – not
meaningful |
|
|
|
|
|
|
| |
|
|
|
|
|
|
Second quarter of 2020 consolidated pro forma revenue includes
$17.9 million of chemical sales to Ecolab for the month of June
under the Cross Supply and Product Transfer Agreement with
Ecolab.
Pro forma revenue for the full second quarter of 2020 was $614.7
million, representing a sequential decrease of $206.0 million. Pro
forma loss before income taxes for the full second quarter was
$45.1 million. Pro forma adjusted EBITDA was $62.8 million,
representing an $83.5 million sequential decrease.
The sequential decrease in pro forma adjusted EBITDA of $83.5
million was 41% of the sequential decrease in pro forma revenue of
$206.0 million. Excluding the $17.9 million of revenue and cost
associated with sales to Ecolab as part of the Cross Supply and
Product Transfer Agreement, the sequential decrease in pro forma
adjusted EBITDA was $83.5 million, or 37% of the decrease in pro
forma revenue of $223.9 million.
Production Chemical Technologies – Pro Forma
Results
| |
Three Months Ended |
|
Variance |
|
(dollars in thousands) |
|
Jun. 30, 2020 |
|
|
Mar. 31, 2020 |
|
|
Jun. 30, 2019 |
|
Sequential |
|
Year-over-year |
|
Pro forma revenue |
$ |
433,128 |
|
|
$ |
510,244 |
|
|
$ |
502,307 |
|
|
(15 |
)% |
|
(14 |
)% |
|
Pro forma operating profit |
$ |
37,154 |
|
|
$ |
70,415 |
|
|
$ |
53,726 |
|
|
(47 |
)% |
|
(31 |
)% |
|
Pro forma operating profit margin |
|
8.6 |
% |
|
|
13.8 |
% |
|
|
10.7 |
% |
|
(520) bps |
|
(210) bps |
|
Pro forma adjusted segment EBITDA |
$ |
58,466 |
|
|
$ |
92,786 |
|
|
$ |
75,142 |
|
|
(37 |
)% |
|
(22 |
)% |
|
Pro forma adjusted segment EBITDA margin |
|
13.5 |
% |
|
|
18.2 |
% |
|
|
15.0 |
% |
|
(470) bps |
|
(150) bps |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| N/M – not
meaningful |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Results on a pro forma basis for the Production Chemical
Technologies segment are provided supplementary to the results of
the segment included in the actual results for the Company. See
note titled “Results on a Pro Forma Basis” below and the tables
included in this release.
Production Chemical Technologies pro forma revenue for the full
second quarter of 2020 decreased $77.1 million, or 15%,
sequentially, due to lower volumes driven by the significant
curtailment of global oil production and pricing concessions.
Sequentially, North America pro forma revenue declined 29% and
international pro forma revenue was approximately unchanged.
Compared to the prior year, Production Chemical Technologies pro
forma revenue decreased $69.2 million, or 14%, driven by the same
factors as the sequential change, with North America pro forma
revenue declining 26% and international pro forma revenue declining
1%.
Production Chemical Technologies pro forma operating profit for
the full second quarter of 2020 was $37.2 million. Pro forma
adjusted segment EBITDA for the full quarter was $58.5 million,
which decreased $34.3 million sequentially, or 37%, due to the
lower volume and pricing concessions. On a year-over-year
basis, pro forma adjusted segment EBITDA for the full quarter
decreased $16.7 million, or 22%, due to the lower volume and
pricing concessions.
The sequential decrease in pro forma adjusted segment EBITDA of
$34.3 million was 45% of the sequential decrease in pro forma
revenue of $77.1 million. The elevated percentage was due to
pricing concessions, volume related absorption, and unfavorable
product mix. We expect the cost reduction actions we are taking and
higher volumes to improve the sequential change in adjusted segment
EBITDA as a percentage of the sequential change in revenue in the
third quarter of 2020.
Reservoir Chemical Technologies – Pro Forma
Results
| |
Three Months Ended |
|
Variance |
|
(dollars in thousands) |
|
Jun. 30, 2020 |
|
|
Mar. 31, 2020 |
|
|
Jun. 30, 2019 |
|
Sequential |
|
Year-over-year |
|
Pro forma revenue |
$ |
27,950 |
|
|
$ |
49,017 |
|
|
$ |
82,450 |
|
|
(43 |
)% |
|
(66 |
)% |
|
Pro forma operating profit (loss) |
$ |
(16,072 |
) |
|
$ |
(155,464 |
) |
|
$ |
4,653 |
|
|
N/M |
|
|
N/M |
|
|
Pro forma operating profit (loss) margin |
|
(57.5 |
)% |
|
|
(317.2 |
)% |
|
|
5.6 |
% |
|
N/M |
|
|
N/M |
|
|
Pro forma adjusted segment EBITDA |
$ |
(9,573 |
) |
|
$ |
(2,142 |
) |
|
$ |
11,178 |
|
|
N/M |
|
|
N/M |
|
|
Pro forma adjusted segment EBITDA margin |
|
(34.3 |
)% |
|
|
(4.4 |
)% |
|
|
13.6 |
% |
|
N/M |
|
|
N/M |
|
| Note: pro forma
operating loss for the three months ended March 31, 2020 includes a
goodwill impairment charge of $147.8 million. |
| N/M – not
meaningful |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Results on a pro forma basis for the Reservoir Chemical
Technologies segment are provided supplementary to the results of
the segment included in the actual results for the Company. See
note titled “Results on a Pro Forma Basis” below and the tables
included in this release.
Reservoir Chemical Technologies pro forma revenue for the full
second quarter for 2020 decreased by $21.1 million, or 43%,
sequentially, driven by the significant decline of worldwide
drilling and completion activity. Compared to the prior year
period, Reservoir Chemical Technologies pro forma revenue decreased
$54.5 million, or 66%, driven by the same factor as the sequential
change.
For the full second quarter of 2020, pro forma segment operating
loss was $16.1 million, and pro forma adjusted segment EBITDA was a
negative $9.6 million, decreasing sequentially by $7.4 million, and
on a year-over-year basis by $20.8 million, as a result of the
lower activity.
2020 Capital Expenditure Guidance
For the second half of 2020, we expect our capital expenditures
combined with investment in leased assets in the net cash from
operating activities section of our consolidated statement of cash
flows to be between $30 to $35 million.
Other Business Highlights
- Secured a commitment from one of the International Oil
Companies (IOCs) to install our XSPOC production optimization
software on multiple artificial lift systems on all new global
unconventional applications displacing a large competitor.
- Artificial lift operations team in Australia received a Quality
Recognition Award from one of the IOCs.
- Conducted on-line training sessions with over 1,500 customer
engineers and field personnel in our Artificial Lift Academy.
- After commercial evaluation process, renewed Production
Chemical Technologies chemicals contract with one of the IOCs in
the Gulf of Mexico. ChampionX remains the sole supplier for
production chemical for this customer in the Gulf of Mexico.
- Reservoir Chemical Technologies successfully commercialized new
value-adding cementing technologies for offshore applications,
reducing cost of operations while increasing ease of logistical
deployment.
- Completed the first predictive failure artificial intelligence
model under our joint technology development agreement with DCP
Midstream. Continue to move toward product commercialization.
- Drilling Technologies continues to test diamond sciences
technology in pumps, motors, and hydrokinetic applications with
promising results.
- Seven patents were issued to Drilling Technologies in the
second quarter of 2020.
Conference Call Details
ChampionX Corporation will host a conference call on Thursday,
August 6, 2020, to discuss its second quarter 2020 financial
results. The call will begin at 10:00 a.m. Eastern Time.
Presentation materials that supplement the conference call are
available on ChampionX’s website at investors.championx.com.
To listen to the call via a live webcast, please visit
ChampionX’s website at investor.championx.com. The call will also
be available by dialing 1-888-424-8151 in the United States and
Canada or 1-847-585-4422 for international calls. Please call
approximately 15 minutes prior to the scheduled start time and
reference ChampionX conference call number 9818 224.
A replay of the conference call will be available on ChampionX’s
website or at
https://onlinexperiences.com/Launch/QReg/ShowUUID=958877E0-E8A5-49B7-B430-8F9099702DA6&LangLocaleID=1033.
Enter passcode 49819730.
Results on a Pro Forma Basis
On June 3, 2020, Apergy Corporation closed on the acquisition of
ChampionX Holding, Inc. (“the Transaction”) and assumed the name
ChampionX Corporation (“ChampionX”). Actual results reflect the
respective contributions from each company based on the close of
the Transaction. For comparative purposes, management has also
presented herein certain unaudited pro forma financial information
as if the Transaction was completed on January 1, 2019, including
results on a pro forma basis for revenue, income before income
taxes, income before income taxes margin, adjusted EBITDA, adjusted
EBITDA margin, segment revenue, segment operating profit (loss),
adjusted segment EBITDA, adjusted segment EBITDA margin for the
quarterly periods ended June 30, 2020, March 31, 2020, and June 30,
2019. The financial results on a pro forma basis are provided to
assist investors in assessing ChampionX’s performance on a basis
that includes the combined results of operations of both Apergy
Corporation and ChampionX Holding, Inc. for the full reporting
period. ChampionX management believes this unaudited pro
forma historical financial information helps investors understand
the long-term profitability trends of its newly combined business
giving effect to the Transaction and facilitates comparisons of our
profitability to prior and future periods and to our peers. The
historical financial results on a pro forma basis herein may not be
comparable to similarly titled measures reported by other
companies.
About Non-GAAP Measures
In addition to financial results determined in accordance with
generally accepted accounting principles in the United States
(“GAAP”), this news release presents non-GAAP financial measures.
Management believes that adjusted EBITDA, adjusted EBITDA margin,
adjusted segment EBITDA, adjusted segment EBITDA margin, adjusted
net income attributable to ChampionX, adjusted diluted earnings per
share attributable to ChampionX, pro forma adjusted EBITDA, pro
forma adjusted EBITDA margin, pro forma segment revenue, pro forma
segment operating profit (loss), and pro forma adjusted segment
EBITDA reflect the core operating results of our businesses and
help facilitate comparisons of operating performance across
periods. In addition, free cash flow and free cash flow to revenue
ratio are used by management to measure our ability to generate
positive cash flow for debt reduction and to support our strategic
objectives, while adjusted working capital provides a meaningful
measure of operational results by showing changes caused by revenue
or our operational initiatives. The foregoing non-GAAP financial
measures should be considered in addition to, not as a substitute
for or superior to, other measures of financial performance
prepared in accordance with GAAP. A reconciliation of these
non-GAAP measures to the comparable GAAP measures is included in
the accompanying financial tables.
About ChampionX
ChampionX (formerly known as Apergy Corporation) is a global
leader in chemistry solutions and highly engineered equipment and
technologies that help companies drill for and produce oil and gas
safely and efficiently around the world. ChampionX’s products
provide efficient functioning throughout the lifecycle of a well
with a focus on the production phase of wells. Our Production
Chemical Technologies segment provides chemistry solutions to
maximize production from flowing oil and gas wells, and our
Reservoir Chemical Technologies segment provides chemistry
solutions used in drilling and completion activities. ChampionX’s
Production & Automation Technologies offerings consist of
artificial lift equipment and solutions, including rod pumping
systems, electric submersible pump systems, progressive cavity
pumps and drive systems and plunger lifts, as well as a full
automation and digital offering consisting of equipment and
software for Industrial Internet of Things (“IIoT”) solutions for
downhole monitoring, wellsite productivity enhancement, and asset
integrity management. ChampionX’s Drilling Technologies
offering provides market leading polycrystalline diamond cutters
and bearings that result in cost effective and efficient drilling.
To learn more about ChampionX, visit our website at
www.championX.com.
Forward-Looking Statements
This news release contains statements relating to future actions
and results, which are "forward-looking statements" within the
meaning of the Securities Exchange Act of 1934, as amended, and the
Private Securities Litigation Reform Act of 1995. Such statements
relate to, among other things, ChampionX's market position and
growth opportunities. Forward-looking statements include,
statements related to ChampionX’s expectations regarding the
performance of the business, financial results, liquidity and
capital resources of ChampionX. Forward-looking statements are
subject to inherent risks and uncertainties that could cause actual
results to differ materially from current expectations, including,
but not limited to, (1) demand for our products and services, which
is affected by the price and demand for crude oil and natural gas,
(2) our ability to successfully compete in our industry, (3) our
ability to develop and implement new products and technologies, and
protect and maintain critical intellectual property assets, (4)
cost inflation and availability of raw materials, (5) evolving
legal, regulatory, tax and tariff policies and regimes, (6)
potential liabilities arising out of the installation and use of
our products, (7) continuing consolidation within our customers’
industry, (8) a failure of our information technology
infrastructure or any significant breach of cyber security, (9)
risks relating to our international operations and expansion into
new geographic markets, including disruptions in the political,
regulatory, economic and social conditions of those countries, (10)
failure to attract, retain and develop key management, (11) credit
risks, including bankruptcies among our customer base or the loss
of significant customers, (12) dependence on joint venture and
other local partners, (13) deterioration in future expected
profitability or cash flows and its effect on our goodwill, (14)
risks relating to improper conduct by any of our employees, agents
or business partners, (15) fluctuations in currency markets, (16)
the impact of natural disasters and pandemics, (17) changes in
industry-specific conditions, including changes in production by
OPEC, (18) the level of our indebtedness, (19) our ability to
remediate the material weaknesses in internal control over
financial reporting, (20) our ability to realize the anticipated
cost synergies and growth opportunities from the Merger, (21)
challenges in integrating the businesses of legacy Apergy and
legacy ChampionX, (22) tax liabilities that could arise as a result
of the Merger, (23) our ability to successfully replace the
corporate services and financial strength legacy ChampionX received
from Ecolab, (24) limitations on our ability to engage in certain
transactions and certain activities competitive with Ecolab, and
(25) other risk factors detailed from time to time in ChampionX’s
reports filed with the Securities and Exchange Commission. Readers
are cautioned not to place undue reliance on ChampionX’s
forward-looking statements. Forward-looking statements speak only
as of the day they are made and ChampionX undertakes no
obligation to update any forward-looking statement, except as
required by applicable law.
Investor Contact: David
Skipperdavid.skipper@apergy.com 713-230-8031
Media Contact: John
Breedjohn.breed@apergy.com 281-403-5751
i Adjusted net income attributable to ChampionX, adjusted
EBITDA, adjusted EBITDA margin, adjusted segment EBITDA, adjusted
segment EBITDA margin, pro forma revenue, pro forma adjusted
EBITDA, pro forma adjusted EBITDA margin, pro forma adjusted
segment EBITDA pro forma adjusted segment EBITDA margin, free cash
flow, and free cash flow to revenue, are non-GAAP measures. See
section titled “About Non-GAAP Measures” for details on the
non-GAAP measures used in this release.
CHAMPIONX CORPORATIONCONDENSED
CONSOLIDATED STATEMENTS OF
INCOME(UNAUDITED)
| |
Three Months Ended |
|
Six Months Ended June 30, |
| |
June 30, |
|
March 31, |
|
June 30, |
|
| (in thousands, except
per share amounts) |
2020 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
Revenue |
$ |
298,914 |
|
|
$ |
261,434 |
|
|
$ |
306,170 |
|
|
$ |
560,348 |
|
|
$ |
606,664 |
|
| Cost of goods and services |
266,684 |
|
|
179,095 |
|
|
197,410 |
|
|
445,779 |
|
|
394,893 |
|
| Gross
profit |
32,230 |
|
|
82,339 |
|
|
108,760 |
|
|
114,569 |
|
|
211,771 |
|
| Selling, general and
administrative expense |
130,657 |
|
|
78,143 |
|
|
66,687 |
|
|
208,800 |
|
|
130,816 |
|
| Goodwill and long-lived asset
impairment |
— |
|
|
657,251 |
|
|
— |
|
|
657,251 |
|
|
1,746 |
|
| Interest expense, net |
11,262 |
|
|
9,039 |
|
|
10,109 |
|
|
20,301 |
|
|
20,636 |
|
| Other (income) expense, net |
312 |
|
|
(1,633 |
) |
|
2,676 |
|
|
(1,321 |
) |
|
3,778 |
|
| Income (loss) before
income taxes |
(110,001 |
) |
|
(660,461 |
) |
|
29,288 |
|
|
(770,462 |
) |
|
54,795 |
|
| Provision for (benefit from)
income taxes |
(954 |
) |
|
(27,006 |
) |
|
6,280 |
|
|
(27,960 |
) |
|
11,849 |
|
| Net income
(loss) |
(109,047 |
) |
|
(633,455 |
) |
|
23,008 |
|
|
(742,502 |
) |
|
42,946 |
|
| Net income attributable to
noncontrolling interest |
598 |
|
|
273 |
|
|
71 |
|
|
871 |
|
|
353 |
|
| Net income (loss)
attributable to ChampionX |
$ |
(109,645 |
) |
|
$ |
(633,728 |
) |
|
$ |
22,937 |
|
|
$ |
(743,373 |
) |
|
$ |
42,593 |
|
| |
|
|
|
|
|
|
|
|
|
| Earnings (loss) per share
attributable to ChampionX: |
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
(0.95 |
) |
|
$ |
(8.18 |
) |
|
$ |
0.30 |
|
|
$ |
(7.72 |
) |
|
$ |
0.55 |
|
|
Diluted |
$ |
(0.95 |
) |
|
$ |
(8.18 |
) |
|
$ |
0.30 |
|
|
$ |
(7.72 |
) |
|
$ |
0.55 |
|
| |
|
|
|
|
|
|
|
|
|
| Weighted-average shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
Basic |
115,149 |
|
|
77,477 |
|
|
77,425 |
|
|
96,313 |
|
|
77,394 |
|
|
Diluted |
115,149 |
|
|
77,477 |
|
|
77,632 |
|
|
96,313 |
|
|
77,636 |
|
CHAMPIONX CORPORATIONCONDENSED
CONSOLIDATED BALANCE
SHEETS(UNAUDITED)
| (in
thousands) |
June 30, 2020 |
|
December 31, 2019 |
| Assets |
|
|
|
|
Cash and cash equivalents |
$ |
141,895 |
|
|
$ |
35,290 |
|
| Receivables, net |
517,110 |
|
|
219,874 |
|
| Inventories, net |
527,642 |
|
|
211,342 |
|
| Prepaid expenses and other
current assets |
71,900 |
|
|
26,934 |
|
|
Total current assets |
1,258,547 |
|
|
493,440 |
|
| |
|
|
|
| Property, plant and equipment,
net |
944,745 |
|
|
248,181 |
|
| Goodwill |
644,381 |
|
|
911,113 |
|
| Intangible assets, net |
485,988 |
|
|
238,707 |
|
| Other non-current assets |
221,868 |
|
|
31,384 |
|
| Total
assets |
$ |
3,555,529 |
|
|
$ |
1,922,825 |
|
| |
|
|
|
| Liabilities |
|
|
|
| Current portion of long-term
debt |
$ |
31,656 |
|
|
$ |
4,845 |
|
| Accounts payable |
274,964 |
|
|
120,291 |
|
| Other current liabilities |
251,729 |
|
|
74,545 |
|
|
Total current liabilities |
558,349 |
|
|
199,681 |
|
| |
|
|
|
| Long-term debt |
1,071,727 |
|
|
559,821 |
|
| Other long-term liabilities |
340,857 |
|
|
127,109 |
|
| Equity |
|
|
|
| Stockholders’ equity |
1,598,698 |
|
|
1,032,960 |
|
| Noncontrolling interest |
(14,102 |
) |
|
3,254 |
|
| Total liabilities and
equity |
$ |
3,555,529 |
|
|
$ |
1,922,825 |
|
CHAMPIONX CORPORATIONCONDENSED
CONSOLIDATED STATEMENTS OF CASH
FLOWS(UNAUDITED)
| |
Six Months
Ended June 30, |
| (in
thousands) |
2020 |
|
2019 |
| Cash provided by (used
for) operating activities: |
|
|
|
|
Net income |
$ |
(742,502 |
) |
|
$ |
42,946 |
|
|
Depreciation |
58,139 |
|
|
34,190 |
|
|
Amortization |
26,274 |
|
|
25,873 |
|
|
Goodwill and long-lived asset impairment |
657,251 |
|
|
1,746 |
|
|
Receivables |
75,808 |
|
|
(5,161 |
) |
|
Inventories |
24,794 |
|
|
1,029 |
|
|
Accounts payable |
(28,362 |
) |
|
(3,088 |
) |
|
Leased assets |
(9,311 |
) |
|
(29,421 |
) |
|
Other |
15,942 |
|
|
(8,813 |
) |
| Net cash provided by
operating activities |
78,033 |
|
|
59,301 |
|
| |
|
|
|
| Cash provided by (used
for) investing activities: |
|
|
|
|
Capital expenditures |
(19,322 |
) |
|
(22,688 |
) |
|
Acquisitions, net of cash acquired |
57,588 |
|
|
— |
|
|
Proceeds from sale of fixed assets |
1,066 |
|
|
2,475 |
|
|
Payments on sale of business |
— |
|
|
(2,194 |
) |
| Net cash provided by
(used for) investing activities |
39,332 |
|
|
(22,407 |
) |
| |
|
|
|
| Cash used for
financing activities: |
|
|
|
|
Proceeds from long-term debt |
125,000 |
|
|
4,000 |
|
|
Repayment of long-term debt |
(125,000 |
) |
|
(54,000 |
) |
|
Debt issuance costs |
(4,356 |
) |
|
— |
|
|
Other |
(5,614 |
) |
|
(4,489 |
) |
| Net cash used for
financing activities |
(9,970 |
) |
|
(54,489 |
) |
| |
|
|
|
| Effect of exchange rate
changes on cash and cash equivalents |
(790 |
) |
|
99 |
|
| |
|
|
|
| Net increase
(decrease) in cash and cash equivalents |
106,605 |
|
|
(17,496 |
) |
| Cash and cash equivalents at
beginning of period |
35,290 |
|
|
41,832 |
|
| Cash and cash
equivalents at end of period |
$ |
141,895 |
|
|
$ |
24,336 |
|
CHAMPIONX CORPORATIONBUSINESS SEGMENT
DATA(UNAUDITED)
| |
Three Months Ended |
|
Six Months Ended June 30, |
| |
June 30, |
|
March 31, |
|
June 30, |
|
| (in
thousands) |
2020 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
| Segment
revenue: |
|
|
|
|
|
|
|
|
|
|
Production Chemical Technologies |
$ |
136,002 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
136,002 |
|
|
$ |
— |
|
| Production & Automation
Technologies |
114,741 |
|
|
205,479 |
|
|
235,819 |
|
|
320,220 |
|
|
458,778 |
|
| Drilling Technologies |
20,948 |
|
|
55,955 |
|
|
70,351 |
|
|
76,903 |
|
|
147,886 |
|
| Reservoir Chemical
Technologies |
9,306 |
|
|
— |
|
|
— |
|
|
9,306 |
|
|
— |
|
| Corporate |
17,917 |
|
|
— |
|
|
— |
|
|
17,917 |
|
|
— |
|
|
Total revenue |
$ |
298,914 |
|
|
$ |
261,434 |
|
|
$ |
306,170 |
|
|
$ |
560,348 |
|
|
$ |
606,664 |
|
| |
|
|
|
|
|
|
|
|
|
| Income
(loss) before income taxes: |
|
|
|
|
|
|
|
|
| Segment operating
profit: |
|
|
|
|
|
|
|
|
|
| Production Chemical
Technologies |
$ |
9,922 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
9,922 |
|
|
$ |
— |
|
| Production & Automation
Technologies |
(37,168 |
) |
|
(648,591 |
) |
|
19,868 |
|
|
(685,759 |
) |
|
32,932 |
|
| Drilling Technologies |
(3,811 |
) |
|
11,359 |
|
|
24,251 |
|
|
7,548 |
|
|
51,057 |
|
| Reservoir Chemical
Technologies |
(2,811 |
) |
|
— |
|
|
— |
|
|
(2,811 |
) |
|
— |
|
|
Total segment operating profit (loss) |
(33,868 |
) |
|
(637,232 |
) |
|
44,119 |
|
|
(671,100 |
) |
|
83,989 |
|
| Corporate expense and
other |
64,871 |
|
|
14,190 |
|
|
4,722 |
|
|
79,061 |
|
|
8,558 |
|
| Interest expense, net |
11,262 |
|
|
9,039 |
|
|
10,109 |
|
|
20,301 |
|
|
20,636 |
|
|
Income (loss) before income taxes |
$ |
(110,001 |
) |
|
$ |
(660,461 |
) |
|
$ |
29,288 |
|
|
$ |
(770,462 |
) |
|
$ |
54,795 |
|
|
|
|
|
|
|
|
|
|
|
|
| Operating profit
margin / income (loss) before income taxes margin: |
|
|
|
|
|
|
|
|
|
| Production Chemical
Technologies |
7.3 |
% |
|
— |
% |
|
— |
% |
|
7.3 |
% |
|
— |
% |
| Production & Automation
Technologies |
(32.4 |
)% |
|
(315.6 |
)% |
|
8.4 |
% |
|
(214.2 |
)% |
|
7.2 |
% |
| Drilling Technologies |
(18.2 |
)% |
|
20.3 |
% |
|
34.5 |
% |
|
9.8 |
% |
|
34.5 |
% |
| Reservoir Chemical
Technologies |
(30.2 |
)% |
|
— |
% |
|
— |
% |
|
(30.2 |
)% |
|
— |
% |
| ChampionX Consolidated |
(36.8 |
)% |
|
(252.6 |
)% |
|
9.6 |
% |
|
(137.5 |
)% |
|
9.0 |
% |
| |
|
|
|
|
|
|
|
|
|
| Adjusted
EBITDA |
|
|
|
|
|
|
|
|
|
| Production Chemical
Technologies |
$ |
22,431 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
22,431 |
|
|
$ |
— |
|
| Production & Automation
Technologies |
14,492 |
|
|
40,031 |
|
|
50,700 |
|
|
54,524 |
|
|
93,690 |
|
| Drilling Technologies |
1,800 |
|
|
15,770 |
|
|
26,577 |
|
|
17,570 |
|
|
55,892 |
|
| Reservoir Chemical
Technologies |
(314 |
) |
|
— |
|
|
— |
|
|
(314 |
) |
|
— |
|
| Corporate |
(3,948 |
) |
|
(2,543 |
) |
|
(3,770 |
) |
|
(6,492 |
) |
|
(6,704 |
) |
|
Adjusted EBITDA |
$ |
34,461 |
|
|
$ |
53,258 |
|
|
$ |
73,507 |
|
|
$ |
87,719 |
|
|
$ |
142,878 |
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted EBITDA
margin |
|
|
|
|
|
|
|
|
|
| Production Chemical
Technologies |
16.5 |
% |
|
— |
% |
|
— |
% |
|
16.5 |
% |
|
— |
% |
| Production & Automation
Technologies |
12.6 |
% |
|
19.5 |
% |
|
21.5 |
% |
|
17.0 |
% |
|
20.4 |
% |
| Drilling Technologies |
8.6 |
% |
|
28.2 |
% |
|
37.8 |
% |
|
22.8 |
% |
|
37.8 |
% |
| Reservoir Chemical
Technologies |
(3.4 |
)% |
|
— |
% |
|
— |
% |
|
(3.4 |
)% |
|
— |
% |
| ChampionX Consolidated |
11.5 |
% |
|
20.4 |
% |
|
24.0 |
% |
|
15.7 |
% |
|
23.6 |
% |
CHAMPIONX CORPORATIONRECONCILIATIONS OF
GAAP TO NON-GAAP FINANCIAL
MEASURES(UNAUDITED)
| |
Three Months Ended |
|
Six Months Ended June 30, |
| |
June 30, |
|
March 31, |
|
June 30, |
|
| (in
thousands) |
2020 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
Net income (loss) attributable to ChampionX |
$ |
(109,645 |
) |
|
$ |
(633,728 |
) |
|
$ |
22,937 |
|
|
$ |
(743,373 |
) |
|
$ |
42,593 |
|
| Pre-tax adjustments: |
|
|
|
|
|
|
|
|
|
|
Goodwill and long-lived asset impairment (1) |
— |
|
|
657,251 |
|
|
— |
|
|
657,251 |
|
|
1,746 |
|
|
Separation and supplemental benefit costs (2) |
(317 |
) |
|
368 |
|
|
827 |
|
|
51 |
|
|
1,607 |
|
|
Restructuring and other related charges |
12,128 |
|
|
2,766 |
|
|
3,135 |
|
|
14,894 |
|
|
4,031 |
|
|
Acquisition and integration related costs (3) |
58,752 |
|
|
11,508 |
|
|
— |
|
|
70,260 |
|
|
— |
|
|
Acquisition-related inventory step-up (4) |
5,831 |
|
|
— |
|
|
— |
|
|
5,831 |
|
|
— |
|
|
Professional fees related to material weakness remediation and
impairment analysis (5) |
2,044 |
|
|
2,744 |
|
|
— |
|
|
4,788 |
|
|
— |
|
|
Intellectual property defense |
181 |
|
|
211 |
|
|
— |
|
|
392 |
|
|
— |
|
| Tax impact of adjustments
(6) |
(18,208 |
) |
|
(39,122 |
) |
|
(941 |
) |
|
(57,330 |
) |
|
(1,754 |
) |
| Adjusted net income
(loss) attributable to ChampionX |
(49,234 |
) |
|
1,998 |
|
|
25,958 |
|
|
(47,236 |
) |
|
48,223 |
|
| Tax impact of adjustments
(6) |
18,208 |
|
|
39,122 |
|
|
941 |
|
|
57,330 |
|
|
1,754 |
|
| Net income attributable to
noncontrolling interest |
598 |
|
|
273 |
|
|
71 |
|
|
871 |
|
|
353 |
|
| Depreciation and
amortization |
54,581 |
|
|
29,832 |
|
|
30,148 |
|
|
84,413 |
|
|
60,063 |
|
| Provision for (benefit from)
income taxes |
(954 |
) |
|
(27,006 |
) |
|
6,280 |
|
|
(27,960 |
) |
|
11,849 |
|
| Interest expense, net |
11,262 |
|
|
9,039 |
|
|
10,109 |
|
|
20,301 |
|
|
20,636 |
|
| Adjusted
EBITDA |
$ |
34,461 |
|
|
$ |
53,258 |
|
|
$ |
73,507 |
|
|
$ |
87,719 |
|
|
$ |
142,878 |
|
| |
|
|
|
|
|
|
|
|
|
| Diluted earnings (loss)
per share attributable to ChampionX: |
|
|
|
|
|
|
|
|
|
|
Reported |
$ |
(0.95 |
) |
|
$ |
(8.18 |
) |
|
$ |
0.30 |
|
|
$ |
(7.72 |
) |
|
$ |
0.55 |
|
|
Adjusted |
$ |
(0.43 |
) |
|
$ |
0.03 |
|
|
$ |
0.33 |
|
|
$ |
(0.49 |
) |
|
$ |
0.62 |
|
_______________________
- Includes charges for goodwill and long-lived asset impairments
of $657.3 million in our Production & Automation Technologies
segment during the three months ended March 31, 2020. During the
six months ended June 30, 2019, we incurred an impairment loss of
$1.7 million related to the classification of our pressure vessel
manufacturing business as held for sale.
- Separation and supplemental benefit costs primarily relates to
separation costs, and to a lesser extent, enhanced or supplemental
benefits provided to employees no longer participating in Dover
Corporation benefit and compensation plans. Supplemental benefit
costs are expected to be incurred through the end of 2020. During
the three months ended June 30, 2020, we paid approximately $3.0
million related to a tax indemnification pursuant to the provisions
of the tax matters agreement with Dover Corporation. The benefit
for the period represents the true-up of our accrual pertaining to
this matter, which was accrued for in September 2019.
- Includes costs incurred in relation to business
combinations, primarily related to the Merger of legacy ChampionX
of $52.3 million and $7.9 million for the three months ended June
30, 2020 and March 31, 2020, respectively. Additionally, we
incurred professional fees related to the planned integration of
legacy ChampionX of $5.6 million and $3.3 million for the three
months ended June 30, 2020 and March 31, 2020, respectively.
- The purchase accounting entries associated with the Merger of
legacy ChampionX require us to record inventory at its fair value,
which is sometimes greater than the previous book value of the
inventory. Included in our GAAP presentation, the increase in
inventory value is amortized to cost of sales over the period that
the related product is sold.
- Includes professional fees related to the remediation of
material weaknesses identified during 2019 as well as professional
fees incurred in connection with the goodwill impairment charge
recognized during the three months ended March 31, 2020.
- We generally tax effect adjustments using a combined federal
and state statutory income tax rate of approximately 23 percent.
The impairment loss for the three and six months ended June 30,
2020 includes non-taxable goodwill of $560.1 million.
| |
Three Months Ended |
|
Six Months Ended June 30, |
| |
June 30, |
|
March 31, |
|
June 30, |
|
| (in
thousands) |
2020 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
Diluted earnings (loss) per share attributable to
ChampionX |
$ |
(0.95 |
) |
|
$ |
(8.18 |
) |
|
$ |
0.30 |
|
|
$ |
(7.72 |
) |
|
$ |
0.55 |
|
| Per share adjustments: |
|
|
|
|
|
|
|
|
|
|
Goodwill and long-lived asset impairment |
— |
|
|
8.49 |
|
|
— |
|
|
6.83 |
|
|
0.02 |
|
|
Separation and supplemental benefit costs |
— |
|
|
— |
|
|
0.01 |
|
|
— |
|
|
0.02 |
|
|
Restructuring and other related charges |
0.11 |
|
|
0.04 |
|
|
0.04 |
|
|
0.15 |
|
|
0.05 |
|
|
Acquisition and integration related costs |
0.51 |
|
|
0.14 |
|
|
— |
|
|
0.73 |
|
|
— |
|
|
Acquisition-related inventory step-up |
0.05 |
|
|
— |
|
|
— |
|
|
0.06 |
|
|
— |
|
|
Professional fees related to material weakness remediation and
impairment analysis |
0.01 |
|
|
0.04 |
|
|
— |
|
|
0.05 |
|
|
— |
|
| Tax impact of adjustments |
(0.16 |
) |
|
(0.50 |
) |
|
(0.02 |
) |
|
(0.59 |
) |
|
(0.02 |
) |
| Adjusted diluted earnings
(loss) per share attributable to ChampionX |
(0.43 |
) |
|
0.03 |
|
|
0.33 |
|
|
(0.49 |
) |
|
0.62 |
|
Adjusted Working Capital
| (in
thousands) |
June 30, 2020 |
|
December 31, 2019 |
|
Receivables, net |
$ |
517,110 |
|
|
$ |
219,874 |
|
| Inventories, net |
527,642 |
|
|
211,342 |
|
| Accounts payable |
(274,964 |
) |
|
(120,291 |
) |
|
Adjusted working capital |
$ |
769,788 |
|
|
$ |
310,925 |
|
Free Cash Flow
| |
Three Months Ended |
|
Six Months Ended June 30, |
| |
June 30, |
|
March 31, |
|
June 30, |
|
| (in
thousands) |
2020 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
| Free Cash
Flow |
|
|
|
|
|
|
|
|
|
|
Cash provided by operating activities |
$ |
48,811 |
|
|
$ |
29,222 |
|
|
$ |
39,391 |
|
|
$ |
78,033 |
|
|
$ |
59,301 |
|
| Less: Capital
expenditures |
(11,855 |
) |
|
(7,467 |
) |
|
(12,970 |
) |
|
(19,322 |
) |
|
(22,688 |
) |
|
Free cash flow |
$ |
36,956 |
|
|
$ |
21,755 |
|
|
$ |
26,421 |
|
|
$ |
58,711 |
|
|
$ |
36,613 |
|
| Cash transaction expenses |
35,057 |
|
|
7,715 |
|
|
— |
|
|
42,772 |
|
|
— |
|
|
Adjusted free cash flow |
$ |
72,013 |
|
|
$ |
29,470 |
|
|
$ |
26,421 |
|
|
$ |
101,483 |
|
|
$ |
36,613 |
|
| |
|
|
|
|
|
|
|
|
|
| Cash From
Operating Activities to Revenue Ratio |
|
|
|
|
|
|
| Cash provided by operating
activities |
$ |
48,811 |
|
|
$ |
29,222 |
|
|
$ |
39,391 |
|
|
$ |
78,033 |
|
|
$ |
59,301 |
|
| Revenue |
$ |
298,914 |
|
|
$ |
261,434 |
|
|
$ |
306,170 |
|
|
$ |
560,348 |
|
|
$ |
606,664 |
|
| |
|
|
|
|
|
|
|
|
|
| Cash from operating activities
to revenue ratio |
16 |
% |
|
11 |
% |
|
13 |
% |
|
14 |
% |
|
10 |
% |
| |
|
|
|
|
|
|
|
|
|
| Free Cash
Flow to Revenue Ratio |
|
|
|
|
|
|
|
|
| Free cash flow |
$ |
36,956 |
|
|
$ |
21,755 |
|
|
$ |
26,421 |
|
|
$ |
58,711 |
|
|
$ |
36,613 |
|
| Revenue |
$ |
298,914 |
|
|
$ |
261,434 |
|
|
$ |
306,170 |
|
|
$ |
560,348 |
|
|
$ |
606,664 |
|
|
|
|
|
|
|
|
|
|
|
|
| Free cash flow to revenue
ratio |
12 |
% |
|
8 |
% |
|
9 |
% |
|
10 |
% |
|
6 |
% |
ChampionX is providing the below unaudited supplemental
historical financial information of the Company on a non-GAAP
adjusted basis for the three month periods ended June 30, 2020,
March 31, 2020 and June 30, 2019 and the six month periods ended
June 30, 2020 and 2019 as if the Merger was completed on January 1,
2019, to assist investors in assessing ChampionX’s historical
performance on a basis that includes the combined results of
operations of both legacy Apergy Corporation and legacy ChampionX.
The unaudited pro forma historical financial information has been
prepared by ChampionX using assumptions that ChampionX believes
provide a reasonable basis for presenting the combination of the
historical financial information of legacy Apergy and legacy
ChampionX. As legacy ChampionX historically was unable to allocate
certain charges on a segment basis, we have determined an
allocation methodology for historical pro forma information to
provide additional comparability amongst the legacy ChampionX
segments. ChampionX management believes this unaudited supplemental
historical financial information helps investors understand the
long-term profitability trends of its newly combined business
giving effect to the Merger and facilitates comparisons of our
profitability to prior and future periods and to our peers. The
supplemental unaudited financial information herein may not be
comparable to similarly titled measures reported by other
companies. The supplemental unaudited pro forma combined financial
information does not purport to represent what the actual results
of operations or the financial position of the combined company
would have been had the Transactions occurred on the dates assumed,
nor are they indicative of future results of operations or
financial position of the combined company.
CHAMPIONX CORPORATIONPRO FORMA BUSINESS
SEGMENT DATA(UNAUDITED)
| |
Three Months Ended |
|
Six Months Ended June 30, |
| |
June 30, |
|
March 31, |
|
June 30, |
|
| (in
thousands) |
2020 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
| Segment
revenue: |
|
|
|
|
|
|
|
|
|
|
Production Chemical Technologies |
$ |
433,128 |
|
|
$ |
510,244 |
|
|
$ |
502,307 |
|
|
$ |
943,372 |
|
|
$ |
979,354 |
|
| Production & Automation
Technologies |
114,741 |
|
|
205,479 |
|
|
235,819 |
|
|
320,220 |
|
|
458,778 |
|
| Drilling Technologies |
20,948 |
|
|
55,955 |
|
|
70,351 |
|
|
76,903 |
|
|
147,886 |
|
| Reservoir Chemical
Technologies |
27,950 |
|
|
49,017 |
|
|
82,450 |
|
|
76,967 |
|
|
181,376 |
|
| Corporate |
17,917 |
|
|
— |
|
|
74 |
|
|
17,917 |
|
|
109 |
|
|
Total revenue |
$ |
614,684 |
|
|
$ |
820,695 |
|
|
$ |
891,001 |
|
|
$ |
1,435,379 |
|
|
$ |
1,767,503 |
|
| |
|
|
|
|
|
|
|
|
|
| Income
(loss) before income taxes: |
|
|
|
|
|
|
|
|
| Segment operating
profit: |
|
|
|
|
|
|
|
|
|
| Production Chemical
Technologies |
$ |
37,154 |
|
|
$ |
70,415 |
|
|
$ |
53,726 |
|
|
$ |
107,569 |
|
|
$ |
96,850 |
|
| Production & Automation
Technologies |
(37,142 |
) |
|
(648,591 |
) |
|
19,868 |
|
|
(685,733 |
) |
|
32,932 |
|
| Drilling Technologies |
(3,811 |
) |
|
11,359 |
|
|
24,251 |
|
|
7,548 |
|
|
51,057 |
|
| Reservoir Chemical
Technologies |
(16,072 |
) |
|
(155,464 |
) |
|
4,653 |
|
|
(171,536 |
) |
|
10,596 |
|
|
Total segment operating profit (loss) |
(19,871 |
) |
|
(722,281 |
) |
|
102,498 |
|
|
(742,152 |
) |
|
191,435 |
|
| Corporate expense and
other |
8,692 |
|
|
1,624 |
|
|
6,606 |
|
|
10,316 |
|
|
3,504 |
|
| Interest expense, net |
16,526 |
|
|
17,478 |
|
|
19,962 |
|
|
34,004 |
|
|
40,406 |
|
|
Income (loss) before income taxes |
$ |
(45,089 |
) |
|
$ |
(741,383 |
) |
|
$ |
75,930 |
|
|
$ |
(786,472 |
) |
|
$ |
147,525 |
|
|
|
|
|
|
|
|
|
|
|
|
| Operating profit
margin / income (loss) before income taxes margin: |
|
|
|
|
|
|
|
|
|
| Production Chemical
Technologies |
8.6 |
% |
|
13.8 |
% |
|
10.7 |
% |
|
11.4 |
% |
|
9.9 |
% |
| Production & Automation
Technologies |
(32.4 |
)% |
|
(315.6 |
)% |
|
8.4 |
% |
|
(214.1 |
)% |
|
7.2 |
% |
| Drilling Technologies |
(18.2 |
)% |
|
20.3 |
% |
|
34.5 |
% |
|
9.8 |
% |
|
34.5 |
% |
| Reservoir Chemical
Technologies |
(57.5 |
)% |
|
(317.2 |
)% |
|
5.6 |
% |
|
(222.9 |
)% |
|
5.8 |
% |
| ChampionX Consolidated |
(7.3 |
)% |
|
(90.3 |
)% |
|
8.5 |
% |
|
(54.8 |
)% |
|
8.3 |
% |
| |
|
|
|
|
|
|
|
|
|
| Adjusted
EBITDA |
|
|
|
|
|
|
|
|
|
| Production Chemical
Technologies |
$ |
58,466 |
|
|
$ |
92,786 |
|
|
$ |
75,142 |
|
|
$ |
151,252 |
|
|
$ |
144,512 |
|
| Production & Automation
Technologies |
14,493 |
|
|
40,031 |
|
|
50,700 |
|
|
54,524 |
|
|
93,690 |
|
| Drilling Technologies |
1,800 |
|
|
15,770 |
|
|
26,577 |
|
|
17,570 |
|
|
55,892 |
|
| Reservoir Chemical
Technologies |
(9,573 |
) |
|
(2,142 |
) |
|
11,178 |
|
|
$ |
(11,715 |
) |
|
24,452 |
|
| Corporate |
(2,432 |
) |
|
(228 |
) |
|
(591 |
) |
|
(2,660 |
) |
|
(383 |
) |
|
Adjusted EBITDA |
$ |
62,754 |
|
|
$ |
146,217 |
|
|
$ |
163,006 |
|
|
$ |
208,971 |
|
|
$ |
318,163 |
|
|
|
|
|
|
|
|
|
|
|
|
| Adjusted EBITDA
margin |
|
|
|
|
|
|
|
|
|
| Production Chemical
Technologies |
13.5 |
% |
|
18.2 |
% |
|
15.0 |
% |
|
16.0 |
% |
|
14.8 |
% |
| Production & Automation
Technologies |
12.6 |
% |
|
19.5 |
% |
|
21.5 |
% |
|
17.0 |
% |
|
20.4 |
% |
| Drilling Technologies |
8.6 |
% |
|
28.2 |
% |
|
37.8 |
% |
|
22.8 |
% |
|
37.8 |
% |
| Reservoir Chemical
Technologies |
(34.3 |
)% |
|
(4.4 |
)% |
|
13.6 |
% |
|
(15.2 |
)% |
|
13.5 |
% |
| ChampionX Consolidated |
10.2 |
% |
|
17.8 |
% |
|
18.3 |
% |
|
14.6 |
% |
|
18.0 |
% |
CHAMPIONX CORPORATIONPRO FORMA -
RECONCILIATION GAAP TO NON-GAAP FINANCIAL
MEASURES(UNAUDITED)
| |
Three Months Ended |
|
Six Months Ended June 30, |
| |
June 30, |
|
March 31, |
|
June 30, |
|
| (in
thousands) |
2020 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
Net income (loss) attributable to ChampionX |
$ |
(60,100 |
) |
|
$ |
(734,425 |
) |
|
$ |
57,078 |
|
|
$ |
(794,525 |
) |
|
$ |
109,879 |
|
| Pre-tax adjustments: |
|
|
|
|
|
|
|
|
|
|
Goodwill and long-lived asset impairment |
— |
|
|
805,011 |
|
|
— |
|
|
805,011 |
|
|
1,746 |
|
|
Separation and supplemental benefit costs |
(317 |
) |
|
368 |
|
|
827 |
|
|
51 |
|
|
1,607 |
|
|
Restructuring and other related charges |
15,950 |
|
|
3,632 |
|
|
8,198 |
|
|
19,582 |
|
|
10,934 |
|
|
Acquisition and integration related costs |
250 |
|
|
384 |
|
|
— |
|
|
634 |
|
|
— |
|
|
Professional fees related to material weakness remediation and
impairment analysis |
2,044 |
|
|
2,744 |
|
|
— |
|
|
4,788 |
|
|
— |
|
|
Intellectual property defense |
181 |
|
|
211 |
|
|
— |
|
|
392 |
|
|
— |
|
| Tax impact of adjustments |
(4,145 |
) |
|
(23,917 |
) |
|
(2,076 |
) |
|
(28,062 |
) |
|
(3,286 |
) |
| Adjusted net income
(loss) attributable to ChampionX |
(46,137 |
) |
|
54,008 |
|
|
64,027 |
|
|
7,871 |
|
|
120,880 |
|
| Tax impact of adjustments |
4,145 |
|
|
23,917 |
|
|
2,076 |
|
|
28,062 |
|
|
3,286 |
|
| Net income attributable to
noncontrolling interest |
(535 |
) |
|
2,727 |
|
|
144 |
|
|
2,192 |
|
|
2,445 |
|
| Depreciation and
amortization |
73,209 |
|
|
57,772 |
|
|
58,089 |
|
|
130,981 |
|
|
115,945 |
|
| Provision for (benefit from)
income taxes |
15,546 |
|
|
(9,685 |
) |
|
18,708 |
|
|
5,861 |
|
|
35,201 |
|
| Interest expense, net |
16,526 |
|
|
17,478 |
|
|
19,962 |
|
|
34,004 |
|
|
40,406 |
|
| Adjusted
EBITDA |
$ |
62,754 |
|
|
$ |
146,217 |
|
|
$ |
163,006 |
|
|
$ |
208,971 |
|
|
$ |
318,163 |
|
CHAMPIONX CORPORATIONRECONCILIATIONS OF
NON-GAAP FINANCIAL MEASURES TO PRO FORMA FINANCIAL
MEASURES(UNAUDITED)
| |
Three Months Ended June 30, 2020 |
| (in thousands, except
per share data) |
As Reported |
|
Adjustments (1) |
|
Pro Forma |
|
Revenue |
$ |
298,914 |
|
|
$ |
315,770 |
|
|
$ |
614,684 |
|
| |
|
|
|
|
|
| Net income (loss)
attributable to ChampionX |
$ |
(109,645 |
) |
|
$ |
49,545 |
|
|
$ |
(60,100 |
) |
| Pre-tax adjustments: |
|
|
|
|
|
|
Separation and supplemental benefit costs |
(317 |
) |
|
— |
|
|
(317 |
) |
|
Restructuring and other related charges |
12,128 |
|
|
3,822 |
|
|
15,950 |
|
|
Acquisition and integration related costs |
58,752 |
|
|
(58,502 |
) |
|
250 |
|
|
Acquisition-related inventory step-up |
5,831 |
|
|
(5,831 |
) |
|
— |
|
|
Professional fees related to material weakness remediation and
impairment analysis |
2,044 |
|
|
— |
|
|
2,044 |
|
|
Intellectual property defense |
181 |
|
|
— |
|
|
181 |
|
| Tax impact of adjustments |
(18,082 |
) |
|
13,937 |
|
|
(4,145 |
) |
| Adjusted net income
(loss) attributable to ChampionX |
(49,108 |
) |
|
2,971 |
|
|
(46,137 |
) |
| Tax impact of adjustments |
18,082 |
|
|
(13,937 |
) |
|
4,145 |
|
| Net income attributable to
noncontrolling interest |
598 |
|
|
(1,133 |
) |
|
(535 |
) |
| Depreciation and
amortization |
54,581 |
|
|
18,628 |
|
|
73,209 |
|
| Provision for (benefit from)
income taxes |
(954 |
) |
|
16,500 |
|
|
15,546 |
|
| Interest expense, net |
11,262 |
|
|
5,264 |
|
|
16,526 |
|
| Adjusted
EBITDA |
$ |
34,461 |
|
|
$ |
28,293 |
|
|
$ |
62,754 |
|
| |
Three Months Ended March 31, 2020 |
| (in thousands, except
per share data) |
As Reported |
|
Adjustments (1) |
|
Pro Forma |
|
Revenue |
$ |
261,434 |
|
|
$ |
559,261 |
|
|
$ |
820,695 |
|
| |
|
|
|
|
|
| Net loss attributable to
ChampionX |
$ |
(633,728 |
) |
|
$ |
(100,697 |
) |
|
$ |
(734,425 |
) |
| Pre-tax adjustments: |
|
|
|
|
|
|
Goodwill and long-lived asset impairment |
657,251 |
|
|
147,760 |
|
|
805,011 |
|
|
Separation and supplemental benefit costs |
368 |
|
|
— |
|
|
368 |
|
|
Restructuring and other related charges |
2,766 |
|
|
866 |
|
|
3,632 |
|
|
Acquisition and integration related costs |
11,508 |
|
|
(11,124 |
) |
|
384 |
|
|
Professional fees related to material weakness remediation and
impairment analysis |
2,744 |
|
|
— |
|
|
2,744 |
|
|
Intellectual property defense |
211 |
|
|
— |
|
|
211 |
|
| Tax impact of adjustments |
(39,122 |
) |
|
15,205 |
|
|
(23,917 |
) |
| Adjusted net income
attributable to ChampionX |
1,998 |
|
|
52,010 |
|
|
54,008 |
|
| Tax impact of adjustments |
39,122 |
|
|
(15,205 |
) |
|
23,917 |
|
| Net income attributable to
noncontrolling interest |
273 |
|
|
2,454 |
|
|
2,727 |
|
| Depreciation and
amortization |
29,832 |
|
|
27,940 |
|
|
57,772 |
|
| Provision for (benefit from)
income taxes |
(27,006 |
) |
|
17,321 |
|
|
(9,685 |
) |
| Interest expense, net |
9,039 |
|
|
8,439 |
|
|
17,478 |
|
| Adjusted
EBITDA |
$ |
53,258 |
|
|
$ |
92,959 |
|
|
$ |
146,217 |
|
| |
Three Months Ended June 30, 2019 |
| (in thousands, except
per share data) |
As Reported |
|
Adjustments (1) |
|
Pro Forma |
|
Revenue |
$ |
306,170 |
|
|
$ |
584,831 |
|
|
$ |
891,001 |
|
| |
|
|
|
|
|
| Net income attributable
to ChampionX |
$ |
22,937 |
|
|
$ |
34,141 |
|
|
$ |
57,078 |
|
| Pre-tax adjustments: |
|
|
|
|
|
|
Separation and supplemental benefit costs |
827 |
|
|
— |
|
|
827 |
|
|
Restructuring and other related charges |
3,135 |
|
|
5,063 |
|
|
8,198 |
|
| Tax impact of adjustments |
(941 |
) |
|
(1,135 |
) |
|
(2,076 |
) |
| Adjusted net income
attributable to ChampionX |
25,958 |
|
|
38,069 |
|
|
64,027 |
|
| Tax impact of adjustments |
941 |
|
|
1,135 |
|
|
2,076 |
|
| Net income attributable to
noncontrolling interest |
71 |
|
|
73 |
|
|
144 |
|
| Depreciation and
amortization |
30,148 |
|
|
27,941 |
|
|
58,089 |
|
| Provision for income taxes |
6,280 |
|
|
12,428 |
|
|
18,708 |
|
| Interest expense, net |
10,109 |
|
|
9,853 |
|
|
19,962 |
|
| Adjusted
EBITDA |
$ |
73,507 |
|
|
$ |
89,499 |
|
|
$ |
163,006 |
|
| |
Six Months Ended June 30, 2020 |
| (in thousands, except
per share data) |
As Reported |
|
Adjustments (1) |
|
Pro Forma |
|
Revenue |
$ |
560,348 |
|
|
$ |
875,031 |
|
|
$ |
1,435,379 |
|
| |
|
|
|
|
|
| Net loss attributable to
ChampionX |
$ |
(743,373 |
) |
|
$ |
(51,152 |
) |
|
$ |
(794,525 |
) |
| Pre-tax adjustments: |
|
|
|
|
|
|
Goodwill and long-lived asset impairment |
657,251 |
|
|
147,760 |
|
|
805,011 |
|
|
Separation and supplemental benefit costs |
51 |
|
|
— |
|
|
51 |
|
|
Restructuring and other related charges |
14,894 |
|
|
4,688 |
|
|
19,582 |
|
|
Acquisition and integration related costs |
70,260 |
|
|
(69,626 |
) |
|
634 |
|
|
Acquisition-related inventory step-up |
5,831 |
|
|
(5,831 |
) |
|
— |
|
|
Professional fees related to material weakness remediation and
impairment analysis |
4,788 |
|
|
— |
|
|
4,788 |
|
|
Intellectual property defense |
392 |
|
|
— |
|
|
392 |
|
| Tax impact of adjustments |
(57,330 |
) |
|
29,268 |
|
|
(28,062 |
) |
| Adjusted net income
(loss) attributable to ChampionX |
(47,236 |
) |
|
55,107 |
|
|
7,871 |
|
| Tax impact of adjustments |
57,330 |
|
|
(29,268 |
) |
|
28,062 |
|
| Net income attributable to
noncontrolling interest |
871 |
|
|
1,321 |
|
|
2,192 |
|
| Depreciation and
amortization |
84,413 |
|
|
46,568 |
|
|
130,981 |
|
| Provision for (benefit from)
income taxes |
(27,960 |
) |
|
33,821 |
|
|
5,861 |
|
| Interest expense, net |
20,301 |
|
|
13,703 |
|
|
34,004 |
|
| Adjusted
EBITDA |
$ |
87,719 |
|
|
$ |
121,252 |
|
|
$ |
208,971 |
|
| |
Six Months Ended June 30, 2019 |
| (in thousands, except
per share data) |
As Reported |
|
Adjustments (1) |
|
Pro Forma |
|
Revenue |
$ |
606,664 |
|
|
$ |
1,160,839 |
|
|
$ |
1,767,503 |
|
| |
|
|
|
|
|
| Net income attributable
to ChampionX |
$ |
42,593 |
|
|
$ |
67,286 |
|
|
$ |
109,879 |
|
| Pre-tax adjustments: |
|
|
|
|
|
|
Goodwill and long-lived asset impairment |
1,746 |
|
|
— |
|
|
1,746 |
|
|
Separation and supplemental benefit costs |
1,607 |
|
|
— |
|
|
1,607 |
|
|
Restructuring and other related charges |
4,031 |
|
|
6,903 |
|
|
10,934 |
|
| Tax impact of adjustments |
(1,754 |
) |
|
(1,532 |
) |
|
(3,286 |
) |
| Adjusted net income
attributable to ChampionX |
48,223 |
|
|
72,657 |
|
|
120,880 |
|
| Tax impact of adjustments |
1,754 |
|
|
1,532 |
|
|
3,286 |
|
| Net income attributable to
noncontrolling interest |
353 |
|
|
2,092 |
|
|
2,445 |
|
| Depreciation and
amortization |
60,063 |
|
|
55,882 |
|
|
115,945 |
|
| Provision for income taxes |
11,849 |
|
|
23,352 |
|
|
35,201 |
|
| Interest expense, net |
20,636 |
|
|
19,770 |
|
|
40,406 |
|
| Adjusted
EBITDA |
$ |
142,878 |
|
|
$ |
175,285 |
|
|
$ |
318,163 |
|
_______________________
(1) Includes the impact of the historical legacy ChampionX
business on a stand-alone basis adjusted to give effect to the
Merger under the acquisition method of accounting in accordance
with Accounting Standards Codification 805, Business
Combinations (“ASC 805”). The adjustments were prepared on the
same basis as the adjustments included in our Registration
Statement on Form S-4 (File No. 333-236379) and include a decrease
in amortization and depreciation resulting from the preliminary
purchase price adjustments, an increase in interest expense
associated with the new term loan facility, removal of acquisition
and integration related costs attributable to the Merger as well as
the tax impact of those adjustments.
ChampionX (NYSE:CHX)
과거 데이터 주식 차트
부터 12월(12) 2024 으로 1월(1) 2025
ChampionX (NYSE:CHX)
과거 데이터 주식 차트
부터 1월(1) 2024 으로 1월(1) 2025
