Revenue of $339 million, down 3% sequentially
and up 21% year-over-year
Adjusted EBITDA1 of $42 million ($53 million,
excluding $11 million of mobilization costs, and start-up and
commissioning costs associated with the Company’s now operational
light well intervention, or LWI, system), down 40% sequentially and
up 14% year-over-year. Excluding such LWI-related costs, Adjusted
EBITDA was down 30% sequentially and up 36% year-over-year
Adjusted EBITDA margin1 of 12% (16% excluding
LWI-related costs), down sequentially from 20% (21% excluding
LWI-related costs) and down year-over-year from 13% (14% excluding
LWI-related costs)
Reaffirms positive business outlook and
full-year guidance range for revenue of $1,450 million to $1,550
million, Adjusted EBITDA of $275 million to $325 million, and
Adjusted EBITDA margin of 19% to 21%
Completed acquisition of DeltaTek, expanding
the Company's offering to include low-risk, open-water cementing
solutions, and repurchased approximately $10 million of outstanding
common stock
Expro Group Holdings N.V. (NYSE: XPRO) (the “Company” or
“Expro”) today reported financial and operational results for the
three months ended March 31, 2023.
First Quarter 2023 Highlights
•
Revenue was $339 million compared
to revenue of $351 million in the fourth quarter of 2022, a
decrease of $12 million, or 3%, consistent with historic seasonal
patterns, including the impact of the winter season in the Northern
Hemisphere and the budget cycles of our national oil company
customers. Revenue increased $59 million, or 21%, compared to the
first quarter of 2022.
•
Net loss for the first quarter of
2023 was $6 million, or $0.06 per diluted share, compared to net
income of $13 million, or $0.12 per diluted share, for the fourth
quarter of 2022 and net loss of $11 million, or $0.10 per diluted
share for the first quarter of 2022. Adjusted net income1 for the
first quarter of 2023 was $1 million, or $0.01 per diluted share,
compared to adjusted net income for the fourth quarter of 2022 of
$24 million, or $0.22 per diluted share, and adjusted net income
for the first quarter of 2022 of $1 million, or $0.01 per diluted
share. Results for the first quarter of 2023, fourth quarter of
2022 and first quarter of 2022 include foreign exchange gains of $1
million, $2 million and $3 million, respectively, or $0.01, $0.02
and $0.03 per diluted share, respectively.
•
Adjusted EBITDA was $42 million,
a sequential decrease of $28 million, or 40%, primarily
attributable to unrecoverable mobilization costs, and higher
start-up and commissioning costs incurred during the three months
ended March 31, 2023 on subsea projects in Asia Pacific ("APAC"),
as well as a combination of the decrease in revenue discussed above
and a less favorable activity mix. Adjusted EBITDA margin for the
first quarter of 2023 and fourth quarter of 2022 was 12% and 20%,
respectively. Excluding $11 million and $5 million of such
mobilization, start-up and commissioning costs that were recognized
during the first quarter of 2023 and the fourth quarter of 2022,
respectively, Adjusted EBITDA would have been $53 million and $75
million, and Adjusted EBITDA margin would have been 16% and 21%,
respectively. Adjusted EBITDA excluding such mobilization, start-up
and commissioning costs compared to the first quarter of 2022
increased by $14 million, or 36%. Start-up and commissioning costs
relate to the Company’s vessel-deployed, light well intervention
("LWI") system which commenced operations during the first quarter
of 2023.
•
Net cash provided by operating
activities for the first quarter of 2023 was $21 million compared
to net cash provided by operating activities of $93 million for the
fourth quarter of 2022, primarily driven by a decrease in Adjusted
EBITDA of $28 million in the first quarter of 2023 and a decrease
in working capital of $46 million during the fourth quarter of
2022, which was not repeated in the first quarter of 2023. Net cash
used by operating activities for the first quarter of 2022 was $14
million. Adjusted cash flow from operations1 and cash conversion1
for the first quarter of 2023 were $27 million and 65%,
respectively, compared to $99 million and 141%, respectively, for
the fourth quarter of 2022. Adjusted cash flow from operations and
cash conversion for the first quarter of 2022 was $(1) million and
(4)%, respectively.
1 A non-GAAP measure.
Michael Jardon, Expro Chief Executive Officer, noted, “Our first
quarter results reflect operating in a dynamic environment, with
revenue in line with expectations and Adjusted EBITDA margin below
expectations due to LWI-related mobilization, start-up and
commissioning costs. Despite some challenges, Expro delivered a
strong quarter, securing new business and developing partnerships
across our global operating footprint to accelerate continued
profitable growth.
“I am pleased to report that we have now successfully completed
the commissioning of our vessel-deployed, light well intervention,
or LWI, system. Operations have now been ongoing for a month with
an IOC client offshore Australia, with two well de-suspensions
completed to date. We have secured a further contract for our LWI
system on a well decommissioning project in the APAC region,
covering the plug and abandonment of nine wells and further
demonstrating Expro’s broad capabilities in vessel-deployed, light
well intervention.
“As we look ahead to the rest of 2023, we see a favorable
commodity price backdrop, positive trends in customer spending and
investment, good momentum building in the international and
offshore markets, and a healthy order book. This quarter we
captured more than $350 million in additional work globally, and we
continue to leverage legacy relationships and capitalize on myriad
opportunities across regional markets and Expro’s broad portfolio
of cost-effective, technology-enabled services and solutions.
“Our Well Construction product line continues to effectively
deliver value across our global footprint, securing significant
contract wins and delivering exceptional performance to an expanded
customer base and reinforcing our position as the premium provider
of tubular running services ("TRS") and well construction products.
Within Well Flow Management, our recently announced ENI Congo
project continues to progress on time and on budget. Our
traditional Subsea Well Access business is also well-positioned for
expected increases in drilling and completions activity, with
potential for net pricing gains in the second half of 2023 and
beyond because of global capacity constraints in subsea test tree
assemblies, which are mission critical safety systems.
“We also completed the acquisition of cementing specialists,
DeltaTek Global (“DeltaTek”) in the first quarter and are
generating significant market interest in the innovative
technologies that this acquisition brings to Expro. DeltaTek has
brought to Expro an experienced leadership team focused on
developing and deploying cementing technologies to the offshore
market, with operations across the UK and Norway. We intend to
globalize the business using our operational footprint and
award-wining cement head technologies. The disruptive range of
Cure® and ArticuLock® technologies directly addresses well
construction challenges and are a natural fit within Expro’s well
construction services and products.
“As the clean energy transition continues to gain momentum, we
appreciate that hydrocarbons will continue to play a vital role in
the transition towards more sustainable energy resources. The
existing expertise and future innovation within the energy services
sector, both to reduce emissions and increase efficiency, will be
critical.
“We are gaining momentum in the early-stage carbon capture and
storage segment and also continue to build on our expertise and
established operations within the geothermal and flare reduction
segments. We continue to develop technologies to enhance the
sustainability of our customers’ operations which, along with our
digital transformation initiatives, are supporting our customers’
commercial and environmental priorities. As the industry changes,
we continue to evolve our approach to adapt and help our customers
safely, responsibly, and cost-effectively address the energy
transition.
“We are proud to have published Expro’s 2022 Sustainability
Review at the end of March. This comprehensive publication
showcases the progress we continue to make in our journey to embed
our Environmental, Social and Governance strategies into everything
that we do, both within our business and in the communities in
which we operate.
“This is our second annual ESG report and we believe it is
important to highlight the cross-company efforts to progress our
own carbon-reduction capabilities and support our customers in
achieving their goals. At a time when organizations around the
world wrestle with their ESG commitments, it has never been more
important to report on sustainability progress with transparency
and integrity, and we are proud to demonstrate the headway we
continue to make in our journey. You can view the full report at
www.expro.com.
“Our geothermal business also continues to develop globally. We
are working to advance new strategic partnerships as we target, for
example, the European geothermal heating market. We completed the
integration of Expro’s facilities in Den Helder, providing
operational efficiencies across our product lines. This world class
facility will not only support our Netherlands operations but also
our expansion into the geothermal business across Europe.
“We look ahead with great excitement and know we are well
positioned to further capitalize on market opportunities in
strategically important areas. We have confidence that the
efficiency of our business model, combined with our broad portfolio
of services and solutions, global reach, and merger-related
efficiency gains, will allow us to achieve profitable growth
through 2023 and beyond.”
Notable Awards and
Achievements
Expro secured a major TRS contract with a key client in the
United Arab Emirates. This involved working closely with the client
in detailed discussions to secure this 20-month,
multi-million-dollar contract. We are delighted to further enhance
our relationship with this important customer.
We extended a key UK contract with an important client,
demonstrating the breadth of our portfolio and the value of Expro
technologies. This is a three-year extension to an existing
Wireline Services contract – with Well Test and TRS services now
added to the contract – and Expro is now the preferred supplier for
these services. Technology-enabled services, including CoilHose,
Distributed Fiber Optic Sensing (“DFOS”) and Octopoda™ annular
intervention services are also included. Service quality was a key
reason for securing this win, and we are proud to have captured
this extended scope.
We retained a multi-million-dollar wireline intervention
contract for a key client in Brazil. This is a three-year award for
provision of slickline offshore services that represents the
majority of Brazil's wireline operations.
In the Gulf of Mexico, we won a Subsea Well Access contract
extension for a further 24-months on a major client’s mature
assets. Service quality was the key driver in securing the
extension as Expro has been this client’s Subsea Large Bore
provider on these assets in the Gulf of Mexico since 2006.
Expro’s newly acquired well construction cementing specialists
DeltaTek was a finalist in three categories at the 2023 Offshore
Achievement Awards. Expro’s automated rig-floor technology, iTONG™
was a finalist in the Emerging Technology category in the same
competition.
We are delighted to report that DeltaTek has also been named a
winner in a prestigious UK business award, The King’s Award for
Enterprise, which recognizes outstanding achievement in the
category of innovation.
At Expro, we are proud of our safety reputation and are pleased
to have received several client commendations for safety through
the first quarter of 2023. Notably, our team in Takoradi, Ghana has
celebrated 14 years with zero recordable safety incidents. This
base is currently servicing a long-standing client’s Ghana value
maximization plan, which is a multi-year, multi-well campaign. This
major client also recently commended Expro for our strong
commitment to rig safety culture and ‘one team’ approach.
Segment Results
Unless otherwise noted, the following discussion compares the
quarterly results for the first quarter of 2023 to the results for
the fourth quarter of 2022.
North and Latin America (NLA)
NLA revenue totaled $126 million for the three months ended
March 31, 2023, a decrease of $6 million, or 5%, compared to $132
million for the three months ended December 31, 2022. The decrease
was primarily due to lower well construction product sales and well
construction services revenue in the U.S. due to decreased customer
activities, partially offset by higher well construction revenue in
Guyana.
NLA Segment EBITDA was $32 million, or 25% of revenues, during
the three months ended March 31, 2023, compared to $35 million, or
27% of revenues, during the three months ended December 31, 2022.
The decrease in Segment EBITDA and Segment EBITDA margin was
attributable to lower activity and less favorable activity mix
during the three months ended March 31, 2023.
Europe and Sub-Saharan Africa (ESSA)
ESSA revenue totaled $114 million for the three months ended
March 31, 2023, compared to $117 million for the fourth quarter of
2022, a decrease of $3 million. The sequential decrease of 3% was
primarily driven by lower well flow management revenue in the
United Kingdom, Norway and Nigeria and non-repeat of equipment
sales revenue in Central Europe. The decrease in revenues was
partially offset by higher well flow management revenue in
Congo.
ESSA Segment EBITDA during the three months ended March 31, 2023
was $21 million, or 18% of revenues, compared to $30 million, or
26% of revenues, for the three months ended December 31, 2022. The
decrease in Segment EBITDA and Segment EBITDA margin was primarily
attributable to seasonally lower activity levels and a less
favorable activity mix during the three months ended March 31,
2023, with a reduction in higher margin services activity in the UK
and Norway, partially offset by lower margin product sales revenue
in Sub-Saharan Africa.
Middle East and North Africa (MENA)
MENA revenue totaled $51 million for the three months ended
March 31, 2023, compared to $55 million for the three months ended
December 31, 2022. The sequential decrease in revenue of $4
million, or 8%, was primarily driven by sequentially lower well
flow management revenue in Saudi Arabia and Algeria, with a
non-repeat of fourth quarter product sales and intra-market
equipment re-locations both contributing to sequentially lower
revenue, partially offset by increased well flow management revenue
in the United Arab Emirates.
MENA Segment EBITDA for the three months ended March 31, 2023
was $15 million, or 29% of revenues, compared to $19 million, or
35% of revenues, in the prior quarter. The decrease in Segment
EBITDA and Segment EBITDA margin was primarily due to lower
activity and a less favorable activity and products mix during the
three months ended March 31, 2023.
Asia Pacific (APAC)
APAC revenue for the three months ended March 31, 2023, totaled
$49 million compared to $47 million for the fourth quarter of 2022,
an increase of $2 million. The 4% increase in revenue was primarily
due to higher subsea well access revenue and well intervention and
integrity revenue in Australia, as well as higher well construction
services revenue in Malaysia. The increase in revenue was partially
offset by lower well flow management revenue in Malaysia.
APAC Segment EBITDA for the three months ended March 31, 2023
totaled $(3) million, or (6)% of revenues, compared to $4 million,
or 8% of revenues, in the fourth quarter of 2022. The reduction in
Segment EBITDA despite the increase in revenues was primarily due
to $11 million of unrecoverable subsea mobilization costs, and
higher start-up and commissioning costs incurred during the three
months ended March 31, 2023, on subsea projects in APAC, as
compared to $5 million for the three months ended December 31,
2022. Excluding $11 million and $5 million, respectively, of such
start-up and commissioning costs during the three months ended
March 31, 2023, and December 31, 2022, Segment EBITDA would have
been $8 million and $9 million, respectively, and Segment EBITDA
margin would have been 16% and 18%, respectively. Start-up and
commissioning costs relate to the Company’s vessel-deployed LWI
system which commenced operations during the first quarter of
2023.
Other Financial
Information
The Company’s capital expenditures totaled $29 million in the
first quarter of 2023, of which approximately 90% were used for the
purchase and manufacture of equipment to directly support
customer-related activities and approximately 10% for other
property, plant and equipment, inclusive of software costs. In
addition, we used net cash of $8 million during the three months
ended March 31, 2023, for the acquisition of DeltaTek. Expro plans
for capital expenditures in the range of approximately $90 million
to $100 million for the remaining three quarters of 2023.
As of March 31, 2023, Expro’s consolidated cash and cash
equivalents, including restricted cash, totaled $186 million. The
Company had no outstanding debt as of March 31, 2023 and has no
outstanding debt today. The Company’s total liquidity as of March
31, 2023 was $316 million. Total liquidity includes $130 million
available for drawdowns as loans under the Company’s revolving
credit facility.
On June 16, 2022, the Company’s Board of Directors (the “Board”)
approved a new stock repurchase program, under which the Company is
authorized to acquire up to $50.0 million of its outstanding common
stock through November 24, 2023. Under the stock repurchase plan,
the Company has repurchased approximately 0.6 million shares at an
average price of $17.99 per share, for a total cost of
approximately $10.0 million during the three months ended March 31,
2023. Since the inception of the stock repurchase program, the
Company has repurchased total of approximately 1.7 million shares
at an average price of $13.89 per share, for a total cost of $23.0
million through March 31, 2023.
Expro’s provision for income taxes for the first quarter of 2023
was $5 million compared to $12 million in the fourth quarter of
2022. The sequential change in income taxes was primarily due to
changes in the mix of taxable profits between jurisdictions, and
non-recurring discrete items in the three months ended December 31,
2022, partially offset by discrete tax credits in the three months
ended March 31, 2023, arising from the acquisition of DeltaTek. The
Company’s effective tax rate on a U.S. generally accepted
accounting principles (“GAAP”) basis for the three months ended
March 31, 2023 also reflects liability for taxes in certain
jurisdictions that tax on an other than pre-tax profits basis,
including so-called “deemed profits” regimes.
The financial measures provided that are not presented in
accordance with GAAP are defined and reconciled to their most
directly comparable GAAP measures. Please see “Use of Non-GAAP
Financial Measures” and the reconciliations to the nearest
comparable GAAP measures.
Additionally, downloadable financials are available on the
Investor section of www.expro.com.
Conference Call
The Company will host a conference call to discuss first quarter
2023 results on Thursday, May 4, 2023, at 10:00 a.m. Central Time
(11:00 a.m. Eastern Time).
Participants may also join the conference call by dialing:
U.S.: +1 (833) 470-1428 International: +1
(929) 526-1599 Access ID: 588636
To listen via live webcast, please visit the Investor section of
www.expro.com.
The first quarter 2023 Investor Presentation is available on the
Investor section of www.expro.com.
An audio replay of the webcast will be available on the Investor
section of the Company’s website approximately three hours after
the conclusion of the call and will remain available for a period
of approximately 12 months.
To access the audio replay telephonically:
Dial-In: U.S. +1 (866) 813-9403 or +44 (204)
525-0658 Access ID: 163705 Start Date: May 4, 2023, 1:00 p.m. CT
End Date: May 11, 2023, 11:59 p.m. CT
A transcript of the conference call will be posted to the
Investor relations section of the Company’s website as soon as
practicable after the conclusion of the call.
ABOUT EXPRO
Working for clients across the entire well life cycle, Expro is
a leading provider of energy services, offering cost-effective,
innovative solutions and what the Company considers to be
best-in-class safety and service quality. The Company’s extensive
portfolio of capabilities spans well construction, well flow
management, subsea well access, and well intervention and integrity
solutions.
With roots dating to 1938, Expro has approximately 7,600
employees and provides services and solutions to leading
exploration and production companies in both onshore and offshore
environments in approximately 60 countries.
For more information, please visit: www.expro.com and connect
with Expro on Twitter @ExproGroup and LinkedIn @Expro.
Forward-Looking
Statements
This release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. All statements, other
than statements of historical facts, included in this release that
address activities, events or developments that the Company
expects, believes or anticipates will or may occur in the future
are forward-looking statements. Without limiting the generality of
the foregoing, forward-looking statements contained in this release
include statements, estimates and projections regarding the
Company’s future business strategy and prospects for growth, cash
flows and liquidity, financial strategy, budget, projections,
guidance, operating results and environmental, social and
governance goals, targets and initiatives. These statements are
based on certain assumptions made by the Company based on
management’s experience, expectations and perception of historical
trends, current conditions, anticipated future developments and
other factors believed to be appropriate. Forward-looking
statements are not guarantees of performance. Although the Company
believes the expectations reflected in its forward-looking
statements are reasonable and are based on reasonable assumptions,
no assurance can be given that these assumptions are accurate or
that any of these expectations will be achieved (in full or at all)
or will prove to have been correct. Moreover, such statements are
subject to a number of assumptions, risks and uncertainties, many
of which are beyond the control of the Company, which may cause
actual results to differ materially from those implied or expressed
by the forward-looking statements. Such assumptions, risks and
uncertainties include the outcome and results of the integration
process associated with the 2021 merger of Frank’s International
and Expro Group Holdings International Limited, the amount, nature
and timing of capital expenditures, the availability and terms of
capital, the level of activity in the oil and gas industry,
volatility of oil and gas prices, unique risks associated with
offshore operations, political, economic and regulatory
uncertainties in international operations, the ability to develop
new technologies and products, the ability to protect intellectual
property rights, the ability to employ and retain skilled and
qualified workers, the level of competition in the Company’s
industry, global or national health concerns, including health
epidemics, such as COVID-19 and any variants thereof, the
possibility of a swift and material decline in global crude oil
demand and crude oil prices for an uncertain period of time, future
actions of foreign oil producers such as Saudi Arabia and Russia,
the timing, pace and extent of an economic recovery in the United
States and elsewhere, inflationary pressures, volatility in the
banking sector, the impact of current and future laws, rulings,
governmental regulations, accounting standards and statements, and
related interpretations, and other guidance.
Such assumptions, risks and uncertainties also include the
factors discussed or referenced in the “Risk Factors” section of
the Company’s Annual Report on Form 10-K for the year ended
December 31, 2022 filed with the SEC, as well as other risks and
uncertainties set forth from time to time in the reports the
Company files with the SEC. Any forward-looking statement speaks
only as of the date on which such statement is made, and the
Company undertakes no obligation to correct or update any
forward-looking statement, whether as a result of new information,
future events, historical practice or otherwise, except as required
by applicable law, and we caution you not to rely on them
unduly.
Use of Non-GAAP Financial
Measures
This press release and the accompanying schedules include the
non-GAAP financial measures of Adjusted EBITDA, Adjusted EBITDA
margin, contribution, contribution margin, support costs, adjusted
cash flow from operations, cash conversion, adjusted net income
(loss), and adjusted net income (loss) per diluted share, which may
be used periodically by management when discussing financial
results with investors and analysts. The accompanying schedules of
this press release provide a reconciliation of these non-GAAP
financial measures to their most directly comparable financial
measure calculated and presented in accordance with GAAP. These
non-GAAP financial measures are presented because management
believes these metrics provide additional information relative to
the performance of the business. These metrics are commonly
employed by financial analysts and investors to evaluate the
operating and financial performance of Expro from period to period
and to compare such performance with the performance of other
publicly traded companies within the industry. You should not
consider Adjusted EBITDA, Adjusted EBITDA margin, contribution,
contribution margin, support costs, adjusted cash flow from
operations, cash conversion, adjusted net income (loss) and
adjusted net income (loss) per diluted share in isolation or as a
substitute for analysis of Expro’s results as reported under GAAP.
Because Adjusted EBITDA, Adjusted EBITDA margin, contribution,
contribution margin, support costs, adjusted cash flow from
operations, cash conversion, adjusted net income (loss) and
adjusted net income (loss) per diluted share may be defined
differently by other companies in the industry, the presentation of
these non-GAAP financial measures may not be comparable to
similarly titled measures of other companies, thereby diminishing
their utility.
Expro defines Adjusted EBITDA as net income (loss) adjusted for
(a) income tax expense, (b) depreciation and amortization expense,
(c) severance and other expense, (d) merger and integration
expense, (e) gain on disposal of assets, (f) other (income)
expense, net, (g) stock-based compensation expense, (h) foreign
exchange (gains) losses and (i) interest and finance (income)
expense, net. Adjusted EBITDA margin reflects Adjusted EBITDA
expressed as a percentage of total revenue.
Contribution is defined as total revenue less cost of revenue
excluding depreciation and amortization expense, adjusted for
indirect support costs and stock-based compensation expense
included in cost of revenue. Contribution margin is defined as
contribution divided by total revenue, expressed as a percentage.
Support costs is defined as indirect costs attributable to
supporting the activities of the operating segments, research and
engineering expenses and product line management costs included in
cost of revenue, excluding depreciation and amortization expense,
and general and administrative expense, excluding depreciation and
amortization expense, which represent costs of running the
corporate head office and other central functions, including
logistics, sales and marketing and health and safety, and does not
include foreign exchange gains or losses and other non-routine
expenses. Adjusted cash flow from operations is defined as net cash
(used in) provided by operating activities adjusted for cash paid
during the period for interest, net, severance and other expense
and merger and integration expense. Cash conversion is defined as
Adjusted cash flow from operations divided by Adjusted EBITDA,
expressed as a percentage.
The Company defines adjusted net income (loss) as net income
(loss) before merger and integration expense, severance and other
expense, stock-based compensation expense, and gain on disposal of
assets, adjusted for corresponding tax benefits of these items. The
Company defines adjusted net income (loss) per diluted share as net
income (loss) per diluted share before merger and integration
expense, severance and other expense, stock-based compensation
expense, and gain on disposal of assets, adjusted for corresponding
tax benefits of these items, divided by diluted weighted average
common shares
Please see the accompanying financial tables for a
reconciliation of these non-GAAP measures to their most directly
comparable GAAP measures.
EXPRO GROUP HOLDINGS
N.V.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except share
data)
(Unaudited)
Three Months Ended
March 31,
December 31,
March 31,
2023
2022
2022
Total revenue
$
339,279
$
350,966
$
280,477
Operating costs and expenses:
Cost of revenue, excluding depreciation
and amortization expense
(289,647
)
(277,548
)
(239,530
)
General and administrative expense,
excluding depreciation and amortization expense
(13,285
)
(10,444
)
(11,510
)
Depreciation and amortization expense
(34,737
)
(34,538
)
(35,012
)
Merger and integration expense
(2,138
)
(4,996
)
(4,725
)
Severance and other expense
(927
)
(2,411
)
(1,494
)
Total operating cost and expenses
(340,734
)
(329,937
)
(292,271
)
Operating (loss) income
(1,455
)
21,029
(11,794
)
Other (expense) income, net
(949
)
1,477
996
Interest and finance (expense) income,
net
(1,298
)
(3,468
)
13
(Loss) income before taxes and equity
in income of joint ventures
(3,702
)
19,038
(10,785
)
Equity in income of joint ventures
2,436
5,590
4,202
(Loss) income before income
taxes
(1,266
)
24,628
(6,583
)
Income tax expense
(5,085
)
(11,697
)
(4,549
)
Net (loss) income
$
(6,351
)
$
12,931
$
(11,132
)
Net (loss) income per common
share:
Basic
$
(0.06
)
$
0.12
$
(0.10
)
Diluted
$
(0.06
)
$
0.12
$
(0.10
)
Weighted average common shares
outstanding:
Basic
108,854,709
108,743,078
109,266,988
Diluted
108,854,709
109,348,871
109,266,988
EXPRO GROUP HOLDINGS
N.V.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands)
(Unaudited)
March 31,
December 31,
2023
2022
Assets
Current assets
Cash and cash equivalents
$
184,870
$
214,788
Restricted cash
1,428
3,672
Accounts receivable, net
425,410
419,237
Inventories
156,280
153,718
Assets held for sale
2,179
2,179
Income tax receivables
26,848
26,938
Other current assets
56,552
44,975
Total current assets
853,567
865,507
Property, plant and equipment, net
462,410
462,316
Investments in joint ventures
68,435
66,038
Intangible assets, net
231,529
229,504
Goodwill
228,137
220,980
Operating lease right-of-use assets
75,197
74,856
Non-current accounts receivable, net
9,177
9,688
Other non-current assets
8,045
8,263
Total assets
$
1,936,497
$
1,937,152
Liabilities and stockholders’
equity
Current liabilities
Accounts payable and accrued
liabilities
$
272,159
$
272,704
Income tax liabilities
40,911
37,151
Finance lease liabilities
1,051
1,047
Operating lease liabilities
18,369
19,057
Other current liabilities
120,021
107,750
Total current liabilities
452,511
437,709
Deferred tax liabilities, net
27,893
30,419
Post-retirement benefits
10,695
11,344
Non-current finance lease liabilities
13,465
13,773
Non-current operating lease
liabilities
58,554
60,847
Other non-current liabilities
102,694
97,165
Total liabilities
665,812
651,257
Total stockholders’ equity
1,270,685
1,285,895
Total liabilities and stockholders’
equity
$
1,936,497
$
1,937,152
EXPRO GROUP HOLDINGS
N.V.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended March
31,
2023
2022
Cash flows from operating
activities:
Net loss
$
(6,351
)
$
(11,132
)
Adjustments to reconcile net loss to net
cash (used in) provided by operating activities:
Depreciation and amortization expense
34,737
35,012
Equity in income of joint ventures
(2,436
)
(4,202
)
Stock-based compensation expense
4,171
6,018
Changes in fair value of investments
-
1,502
Elimination of unrealized profit on sales
to joint ventures
39
-
Deferred taxes
(5,225
)
(2,448
)
Unrealized foreign exchange gain
(1,753
)
(2,503
)
Changes in assets and liabilities:
Accounts receivable, net
(5,761
)
2,163
Inventories
(2,380
)
(6,232
)
Other assets
(11,320
)
(3,492
)
Accounts payable and accrued
liabilities
5,362
(13,194
)
Other liabilities
11,306
(11,501
)
Income taxes, net
3,929
(719
)
Other
(2,995
)
(3,434
)
Net cash provided by (used in)
operating activities
21,323
(14,162
)
Cash flows from investing
activities:
Capital expenditures
(28,776
)
(10,577
)
Payment for acquisition of business, net
of cash acquired
(7,536
)
-
Acquisition of technology
-
(7,973
)
Proceeds from disposal of assets
-
6,422
Proceeds from sale / maturity of
investments
-
7,120
Net cash used in investing
activities
(36,312
)
(5,008
)
Cash flows from financing
activities:
Cash pledged for collateral deposits
(10
)
(61
)
Payments of loan issuance and other
transaction costs
-
(95
)
Acquisition of Company common stock
(10,011
)
-
Payment of withholding taxes on
stock-based compensation plans
(2,954
)
(1,104
)
Repayment of financed insurance
premium
(2,899
)
(980
)
Repayments of finance leases
(499
)
(154
)
Net cash used in financing
activities
(16,373
)
(2,394
)
Effect of exchange rate changes on cash
and cash equivalents
(800
)
133
Net decrease to cash and cash
equivalents and restricted cash
(32,162
)
(21,431
)
Cash and cash equivalents and restricted
cash at beginning of period
218,460
239,847
Cash and cash equivalents and
restricted cash at end of period
$
186,298
$
218,416
Supplemental disclosure of cash flow
information:
Cash paid for income taxes, net of
refunds
$
6,381
$
7,716
Cash paid for interest, net
966
903
Change in accounts payable and accrued
expenses related to capital expenditures
3,551
5,583
EXPRO GROUP HOLDINGS
N.V.
SELECTED OPERATING SEGMENT
DATA
(In thousands)
(Unaudited)
Segment Revenue and Segment Revenue as
Percentage of Total Revenue:
Three Months Ended
March 31,
December 31,
March 31,
2023
2022
2022
NLA
$
126,228
37
%
$
131,684
38
%
$
103,861
37
%
ESSA
113,648
34
%
117,344
33
%
82,071
29
%
MENA
50,945
15
%
55,387
16
%
50,715
18
%
APAC
48,458
14
%
46,551
13
%
43,830
16
%
Total
$
339,279
100
%
$
350,966
100
%
$
280,477
100
%
Segment EBITDA (1), Segment EBITDA
Margin (2), Adjusted EBITDA and Adjusted EBITDA Margin (3):
Three Months Ended
March 31,
December 31,
March 31,
2023
2022
2022
NLA
$
31,874
25
%
$
35,153
27
%
$
21,827
21
%
ESSA
20,785
18
%
30,179
26
%
11,874
14
%
MENA
14,568
29
%
19,433
35
%
15,465
30
%
APAC (5)
(2,698
)
(6
)%
3,673
8
%
5,438
12
%
64,529
88,438
54,604
Corporate costs (4)
(25,081
)
(23,954
)
(21,965
)
Equity in income of joint ventures
2,436
5,590
4,202
Adjusted EBITDA (6)
$
41,884
12
%
$
70,074
20
%
$
36,841
13
%
(1)
Expro evaluates its business
segment operating performance using Segment Revenue, Segment EBITDA
and Segment EBITDA margin. Expro’s management believes Segment
EBITDA and Segment EBITDA margin are useful operating performance
measures as they exclude transactions not related to its core
operating activities, corporate costs and certain non-cash items
and allows Expro to meaningfully analyze the trends and performance
of its core operations by segment as well as to make decisions
regarding the allocation of resources to segments.
(2)
Expro defines Segment EBITDA
margin as Segment EBITDA divided by Segment Revenue, expressed as a
percentage.
(3)
Expro defines Adjusted EBITDA
margin as Adjusted EBITDA divided by total revenue, expressed as a
percentage.
(4)
Corporate costs include the costs
of running our corporate head office and other central functions
that support the operating segments, including research,
engineering and development, logistics, sales and marketing and
health and safety and are not attributable to a particular
operating segment.
(5)
Excluding $11 million, $5 million
and $2 million of mobilization, start-up and commissioning costs
during the three months ended March 31, 2023, December 31, 2022 and
March 31, 2022, respectively, Segment EBITDA would have been $8
million, $9 million and $8 million, respectively, and Segment
EBITDA margin would have been 16%, 18% and 17%, respectively.
(6)
Excluding $11 million, $5 million
and $2 million of mobilization, start-up and commissioning costs
during the three months ended March 31, 2023, December 31, 2022 and
March 31, 2022, respectively, Adjusted EBITDA would have been $53
million, $75 million and $39 million, respectively, and Adjusted
EBITDA margin would have been 16%, 21%, and 14%, respectively.
EXPRO GROUP HOLDINGS
N.V.
REVENUE BY AREAS OF
CAPABILITIES
(In thousands)
(Unaudited)
Three Months Ended
March 31,
December 31,
March 31,
2023
2022
2022
Well construction
$
128,265
38
%
$
137,754
39
%
$
111,435
40
%
Well management (1)
211,014
62
%
213,212
61
%
169,042
60
%
Total
$
339,279
100
%
$
350,966
100
%
$
280,477
100
%
(1)
Well management consists of well
flow management, subsea well access, and well intervention and
integrity.
EXPRO GROUP HOLDINGS
N.V.
CONTRIBUTION, CONTRIBUTION
MARGIN AND SUPPORT COSTS
(In thousands)
(Unaudited)
Contribution(1) and Contribution
Margin(2):
Three Months Ended
March 31,
December 31,
March 31,
2023
2022
2022
Total revenue
$
339,279
$
350,966
$
280,477
Cost of revenue, excluding depreciation
and amortization expense
(289,647
)
(277,548
)
(239,530
)
Indirect costs (included in cost of
revenue)
64,821
60,324
60,566
Stock-based compensation expense
1,374
1,466
1,840
Direct costs (excluding depreciation and
amortization expense) (3)
(223,452
)
(215,758
)
(177,124
)
Contribution (5)
$
115,827
$
135,208
$
103,353
Contribution margin (5)
34
%
39
%
37
%
Support Costs(4):
Three Months Ended
March 31,
December 31,
March 31,
2023
2022
2022
Cost of revenue, excluding depreciation
and amortization expense
$
289,647
$
277,548
$
239,530
Direct costs (excluding depreciation and
amortization expense)
(223,452
)
(215,758
)
(177,124
)
Stock-based compensation expense
(1,374
)
(1,466
)
(1,840
)
Indirect costs (included in cost of
revenue)
64,821
60,324
60,566
General and administrative expense
(excluding depreciation and amortization expense, foreign exchange,
and other non-routine costs)
11,500
10,333
10,189
Total support costs
$
76,321
$
70,657
$
70,755
Total support costs as a percentage of
revenue
22
%
20
%
25
%
(1)
Expro defines Contribution as
Total Revenue less Cost of Revenue, excluding depreciation and
amortization expense, adjusted for indirect support costs and
stock-based compensation expense included in Cost of Revenue.
(2)
Contribution margin is defined as
Contribution as a percentage of Revenue.
(3)
Direct costs include personnel
costs, sub-contractor costs, equipment costs, repairs and
maintenance, facilities, and other costs directly incurred to
generate revenue.
(4)
Support costs includes indirect
costs attributable to support the activities of the operating
segments, research and engineering expenses and product line
management costs included in Cost of revenue, excluding
depreciation and amortization expense, and General and
administrative expenses representing costs of running our corporate
head office and other central functions including logistics, sales
and marketing and health and safety and does not include foreign
exchange gains or losses and other non-routine expenses.
(5)
Excluding $11 million, $5 million
and $2 million of mobilization, start-up and commissioning costs
during the three months ended March 31, 2023, December 31, 2022 and
March 31, 2022, respectively, Contribution would have been $126
million, $140 million, and $105 million respectively, and
Contribution margin would have been 37%, 40% and 37%,
respectively.
EXPRO GROUP HOLDINGS
N.V.
NON-GAAP FINANCIAL MEASURES
AND RECONCILIATION
(In thousands)
(Unaudited)
Adjusted EBITDA Reconciliation and
Adjusted EBITDA Margin:
Three Months Ended
March 31,
December 31,
March 31,
2023
2022
2022
Total revenue
$
339,279
$
350,966
$
280,477
Net (loss) income
$
(6,351
)
$
12,931
$
(11,132
)
Income tax expense
5,085
11,697
4,549
Depreciation and amortization expense
34,737
34,538
35,012
Merger and integration expense
2,138
4,996
4,725
Severance and other expense
927
2,411
1,494
Other expense (income), net
949
(1,477
)
(996
)
Stock-based compensation expense
4,171
3,554
6,018
Foreign exchange gain
(1,070
)
(2,044
)
(2,816
)
Interest and finance (income) expense,
net
1,298
3,468
(13
)
Adjusted EBITDA (1)
$
41,884
$
70,074
$
36,841
Adjusted EBITDA margin (1)
12
%
20
%
13
%
(1)
Excluding $11 million, $5 million
and $2 million of mobilization, start-up and commissioning costs
during the three months ended March 31, 2023, December 31, 2022 and
March 31, 2022, respectively, Adjusted EBITDA would have been $53
million, $75 million and $39 million, respectively, and Adjusted
EBITDA margin would have been 16%, 21%, and 14%, respectively.
EXPRO GROUP HOLDINGS
N.V.
NON-GAAP FINANCIAL MEASURES
AND RECONCILIATION
(In thousands)
(Unaudited)
Adjusted Cash Flow from Operations
Reconciliation:
Three Months Ended
March 31,
December 31,
March 31,
2023
2022
2022
Net cash provided by (used in) operating
activities
$
21,323
$
92,943
$
(14,162
)
Cash paid for interest, net
966
961
903
Cash paid for merger and integration
expense
2,324
4,350
11,632
Cash paid for severance and other
expense
2,572
697
207
Adjusted Cash Flow from
Operations
$
27,185
$
98,951
$
(1,420
)
Adjusted EBITDA
$
41,884
$
70,074
$
36,841
Cash conversion (1)
65
%
141
%
(4
)%
(1)
Expro defines Cash Conversion as
Adjusted Cash Flow from Operations divided by Adjusted EBITDA,
expressed as a percentage.
EXPRO GROUP HOLDINGS
N.V.
NON-GAAP FINANCIAL MEASURES
AND RECONCILIATION
(In thousands, except per
share amounts)
(Unaudited)
Reconciliation of Adjusted Net Income
and Adjusted Net Income per Diluted Share:
Three Months Ended
March 31,
December 31,
March 31,
2023
2022
2022
Net (loss) income
$
(6,351
)
$
12,931
$
(11,132
)
Adjustments:
Merger and integration expense
2,138
4,996
4,725
Severance and other expense
927
2,411
1,494
Stock-based compensation expense
4,171
3,554
6,018
Total adjustments, before taxes
7,236
10,961
12,237
Tax benefit
(11
)
(70
)
(324
)
Total adjustments, net of taxes
7,225
10,891
11,913
Adjusted net income
$
874
$
23,822
$
781
As reported diluted weighted average
common shares outstanding
108,854,709
109,348,871
109,266,988
As reported net (loss) income per diluted
share
$
(0.06
)
$
0.12
$
(0.10
)
Adjusted net income per diluted share
$
0.01
$
0.22
$
0.01
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230504005318/en/
InvestorRelations@expro.com
Expro Group Holdings NV (NYSE:XPRO)
Gráfico Histórico do Ativo
De Mar 2024 até Abr 2024
Expro Group Holdings NV (NYSE:XPRO)
Gráfico Histórico do Ativo
De Abr 2023 até Abr 2024