Revenue of $397 million, up 17% sequentially
and up 27% year-over-year.
Net income of $9 million, up sequentially from
net loss of $6 million and up year-over-year from net loss of $4
million.
Adjusted EBITDA1 of $72 million, up 71%
sequentially and up 40% year-over-year. Adjusted EBITDA margin1 of
18%, up sequentially from 12%.
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%
Expro Group Holdings N.V. (NYSE: XPRO) (the “Company” or
“Expro”) today reported financial and operational results for the
three and six months ended June 30, 2023.
Second Quarter 2023 Highlights
- Revenue was $397 million compared to revenue of $339 million in
the second quarter of 2023, an increase of $58 million, or 17%,
driven by higher activity across all of Expro’s segments, most
notably in Europe and Sub-Saharan Africa (ESSA) and Asia-Pacific
(APAC).
- Net income for the second quarter of 2023 was $9 million, or
$0.08 per diluted share, compared to net loss of ($6) million, or
($0.06) per diluted share, for the first quarter of 2023. Adjusted
net income1 for the second quarter of 2023 was $19 million, or
$0.17 per diluted share, compared to adjusted net income for the
first quarter of 2023 of $1 million, or $0.01 per diluted
share.
- Adjusted EBITDA was $72 million, a sequential increase of $30
million, or 71%, primarily attributable to higher revenue, better
business mix and the light well intervention (“LWI”) project
becoming operational towards the end of the first quarter of 2023.
Adjusted EBITDA margin for the second quarter of 2023 and first
quarter of 2023 was 18% and 12%, respectively. Adjusted EBITDA for
the three months ended March 31, 2023 includes unrecoverable
mobilization costs and start-up and commissioning costs on
LWI-related projects in APAC of $11 million. Adjusted EBITDA for
the three months ended June 30, 2023 includes LWI-related
non-reimbursable costs for NPT (“non-productive time”) of $6
million (these costs were incurred after the system became
operational and, therefore, are not considered start-up and
commissioning costs).
- Net cash provided by operating activities for the second
quarter of 2023 was $25 million compared to net cash provided by
operating activities of $21 million for the first quarter of 2023,
primarily driven by an increase in Adjusted EBITDA of $30 million,
partially offset by an unfavorable movement in net working capital
of $15 million, higher cash paid for income taxes, net of refunds,
of $9 million, and an $8 million payment to the Securities and
Exchange Commission to settle issues identified in the legacy
Frank's FCPA-related internal investigation during the three months
ended June 30, 2023. Adjusted cash flow from operations1 and cash
conversion1 for the second quarter of 2023 were $36 million and
50%, respectively, compared to $27 million and 65%, respectively,
for the first quarter of 2023.
1. A non-GAAP measure.
Michael Jardon, Expro Chief Executive Officer, noted, “I am
pleased to announce a strong quarter, with the Company delivering
excellent operational performance and robust financial results. As
activity continues to increase, the breadth of our portfolio and
depth of our expertise brings value to clients across the life of
their wells and enables us to compete and win on a global
basis.
“Momentum has continued throughout our second quarter, securing
$300 million of new work, leveraging global relationships,
continuing to provide a portfolio of technology-enabled services
and solutions with the ability to be flexible in adapting to our
customers’ evolving needs, and by capitalizing on a strong
resurgence of activity. Our increase in contract wins and backlogs
compared to previous years is testament to the depth of our
technical expertise, service quality performance, and breadth of
capabilities. I remain optimistic on the outlook for 2023 as we see
demand continue to grow this year and into 2024.
“New energy initiatives are ever increasing, and our geothermal
business continues to develop globally. I am pleased to report that
after construction, test rig up and deployment of geothermal
specific well test evaluation spread for a customer in Germany they
successfully achieved ‘first steam’. This demonstrates our enhanced
offering and capabilities in the geothermal sector and our
commitment to a more sustainable, lower carbon future.
“We are working to develop new strategic partnerships and have
recently become members of the Solent Cluster and Carbon Capture
and Storage Association, which is important as we enhance our
business in the carbon capture, usage and storage sector. As a
citizen of the world, we remain totally committed to our
responsibilities to our planet and further strengthening our
Sustainable Energy Solutions. We believe our industry is part of
the solution to address a lower carbon future and as we advance our
strategy through 2023 and beyond.
“Looking ahead, Expro is well positioned for growth as we
capitalize on market opportunities delivering maximum value to our
customers, shareholders and other stakeholders. I am confident of
our delivery as we progress into the second half of the year and
look forward to the opportunities ahead for our business.”
Notable Awards and
Achievements
Expro has commenced a five-year, $30 million, Well Intervention
and Integrity contract with TotalEnergies EP Uganda for the
multi-well Tilenga project. A key component in Expro securing the
contract was its ability to provide an innovative environmental
solution in support of the client’s carbon reduction objectives, as
well as Expro’s commitment to national recruitment in line with a
local development plan, working in collaboration with TotalEnergies
and the Petroleum Authority of Uganda.
Our Subsea Well Access product line has safely and efficiently
completed a four well de-suspension and manifold de-isolation using
our subsea Riserless Well Intervention (“RWI”) solution off Western
Australia.
As operations continue to ramp up in Brazil, our team has
achieved another record-breaking operation to install a 14” casing
string – one of the fastest and most efficient 14” jobs in the NLA
region to date. During this operation, our Well Construction team
utilized Expro's proprietary command and control solution,
Centri-Fi™, to rack back 67 stands of pipe offline, all the while
reducing the risk of injuries on the rig floor, by reducing the
number of personnel required and eliminating the need for personnel
in the redzone.
Expro also recently announced a new $20 million contract with
Harbour Energy for a well abandonment campaign as part of the
decommissioning project for the Balmoral area in the UK Continental
Shelf. Reinforcing our position as a key enabler within the plug
and abandonment market, this multi-year contract will utilize
Expro’s Subsea Well Access technology with a combination of
open-water and in-riser applications.
The Company continues to see customers looking to secure subsea
landing string capacity as the backlog of offshore deepwater and
ultradeep water projects continue to build. In Ghana, we have
received a contract extension worth more than $50 million to
provide subsea packages. We have held this contract since 2012 and
securing the extension is testament to the excellent service
quality of our subsea landing strings and our team delivery.
We have also deployed an electric powered slickline unit for a
customer in Qatar. This is the first deployment of this unit type
within Expro, where the electric powerpack replaces the diesel with
no additional deck space required and ultimately supporting our
customer on their journey to reducing their greenhouse gas
emissions. This is another great example of Expro working together
with our customers to develop and deploy the right solutions to
help contribute to a lower-carbon world.
Segment Results
Unless otherwise noted, the following discussion compares the
quarterly results for the second quarter of 2023 to the results for
the first quarter of 2023.
North and Latin America (NLA)
Revenue for the NLA segment was $135 million for the three
months ended June 30, 2023, an increase of $9 million, or 7%,
compared to $126 million for the three months ended March 31, 2023.
The increase was primarily due to higher Well Construction revenue
in the U.S. offshore, Canada and Brazil, higher Well Flow
Management revenue in U.S., as well as higher Well Intervention and
Integrity activity in Argentina, offset by lower Well Construction
activity in Guyana and U.S. land and lower Well Flow Management
activity in Brazil and Mexico.
Segment EBITDA for the NLA segment was $37 million, or 27% of
revenues, during the three months ended June 30, 2023, an increase
of $5 million, or 16%, compared to $32 million, or 25% of revenues,
during the three months ended March 31, 2023. The increase in
Segment EBITDA and Segment EBITDA margin was attributable to higher
activity and more favorable product mix during the three months
ended June 30, 2023.
Europe and Sub-Saharan Africa (ESSA)
Revenue for the ESSA segment was $138 million for the three
months ended June 30, 2023, an increase of $24 million, or 21%,
compared to $114 million for the three months ended March 31, 2023.
The increase in revenues was primarily driven by higher Well Flow
Management revenue, particularly in Congo, higher Well Construction
revenue in UK and western Europe and higher Subsea Well Access
activity resulting from increased customer activities.
Segment EBITDA for the ESSA segment was $35 million, or 25% of
revenues, for the three months ended June 30, 2023, an increase of
$14 million, or 67%, compared to $21 million, or 18% of revenues
for the three months ended March 31, 2023. The increase in segment
EBITDA was attributable to higher revenue and activity levels. The
increase in Segment EBITDA margin was attributable to a combination
of a more favorable activity mix and increased activities on higher
margin jobs during the three months ended June 30, 2023.
Middle East and North Africa (MENA)
Revenue for the MENA segment was $59 million for the three
months ended June 30, 2023, an increase of $8 million, or 16%,
compared to $51 million for the three months ended March 31, 2023.
The increase in revenue was driven by higher Well Flow Management
activity primarily in Saudi Arabia, offset by lower activity in
United Arab Emirates and Egypt.
Segment EBITDA for the MENA segment was $19 million, or 31% of
revenues, for the three months ended June 30, 2023, an increase of
$4 million, or 27%, compared to $15 million, or 29% of revenues,
for the three months ended March 31, 2023. The increase in Segment
EBITDA and Segment EBITDA margin was primarily due to higher
activity during the three months ended June 30, 2023.
Asia Pacific (APAC)
Revenue for the APAC segment was $65 million for the three
months ended June 30, 2023, an increase of $16 million, or 33%,
compared to $49 million for the three months ended March 31, 2023.
The increase in revenue was primarily due to higher activity across
all product lines, in particular, higher Subsea Well Access revenue
in Australia and China.
Segment EBITDA for the APAC segment was $3 million, or 5% of
revenues, for the three months ended June 30, 2023, an increase of
$6 million compared to $(3) million, or (6%) of revenues, for the
three months ended March 31, 2023. The increase in Segment EBITDA
is attributable primarily to the LWI project becoming operational
at the end of the first quarter, as well as increased activity on
other projects.
Other Financial
Information
The Company’s capital expenditures totaled $29 million in the
second 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. Expro
plans for capital expenditures in the range of approximately $60
million to $70 million for the remaining two quarters of 2023.
As of June 30, 2023, Expro’s consolidated cash and cash
equivalents, including restricted cash, totaled $181 million. The
Company had no outstanding debt as of June 30, 2023 and has no
outstanding debt today. The Company’s total liquidity as of June
30, 2023 was $311 million. Total liquidity includes $130 million
available for drawdowns as loans under the Company’s revolving
credit facility.
Expro’s provision for income taxes for the second quarter of
2023 was $13 million compared to $5 million in the first quarter of
2023. 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 March 31,
2023, including the recognition of a deferred tax liability related
to the acquisition of DeltaTek. The Company’s effective tax rate on
a U.S. generally accepted accounting principles (“GAAP”) basis for
the three and six months ended June 30, 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 second
quarter 2023 results on Thursday, July 27, 2023, at 12:00 p.m.
Central Time (1:00 p.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: 375034
To listen via live webcast, please visit the Investor section of
www.expro.com.
The second 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: 596531 Start Date: July 27, 2023, 3:00
p.m. CT End Date: August 3, 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
Six Months Ended
June 30,
March 31,
June 30,
June 30,
June 30,
2023
2023
2022
2023
2022
Total revenue
$
396,917
$
339,279
$
313,624
$
736,196
$
594,101
Operating costs and expenses:
Cost of revenue, excluding depreciation
and amortization expense
(318,948
)
(289,647
)
(256,583
)
(608,595
)
(496,113
)
General and administrative expense,
excluding depreciation and amortization expense
(16,186
)
(13,285
)
(17,840
)
(29,471
)
(29,350
)
Depreciation and amortization expense
(37,235
)
(34,737
)
(35,392
)
(71,972
)
(70,404
)
Merger and integration expense
(1,377
)
(2,138
)
(2,270
)
(3,515
)
(6,995
)
Severance and other expense
(2,663
)
(927
)
(678
)
(3,590
)
(2,172
)
Total operating cost and expenses
(376,409
)
(340,734
)
(312,763
)
(717,143
)
(605,034
)
Operating income (loss)
20,508
(1,455
)
861
19,053
(10,933
)
Other (expense) income, net
(1,462
)
(949
)
244
(2,411
)
1,240
Interest and finance (expense) income,
net
(17
)
(1,298
)
1,712
(1,315
)
1,725
Income (loss) before taxes and equity
in income of joint ventures
19,029
(3,702
)
2,817
15,327
(7,968
)
Equity in income of joint ventures
2,805
2,436
2,429
5,241
6,631
Income (loss) before income
taxes
21,834
(1,266
)
5,246
20,568
(1,337
)
Income tax expense
(12,539
)
(5,085
)
(9,596
)
(17,624
)
(14,145
)
Net income (loss)
$
9,295
$
(6,351
)
$
(4,350
)
$2,944
$(15,482
)
Net income (loss) per common
share:
Basic
$
0.09
$
(0.06
)
$
(0.04
)
$0.03
$(0.14
)
Diluted
$
0.08
$
(0.06
)
$
(0.04
)
$0.03
$(0.14
)
Weighted average common shares
outstanding:
Basic
108,662,509
108,854,709
109,582,086
108,758,078
109,425,407
Diluted
109,381,977
108,854,709
109,582,086
109,975,739
109,425,407
EXPRO GROUP HOLDINGS
N.V.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands)
(Unaudited)
June 30,
December 31,
2023
2022
Assets
Current assets
Cash and cash equivalents
$
178,908
$
214,788
Restricted cash
1,963
3,672
Accounts receivable, net
435,619
419,237
Inventories
155,341
153,718
Assets held for sale
-
2,179
Income tax receivables
26,878
26,938
Other current assets
59,665
44,975
Total current assets
858,374
865,507
Property, plant and equipment, net
464,521
462,316
Investments in joint ventures
68,075
66,038
Intangible assets, net
222,313
229,504
Goodwill
228,137
220,980
Operating lease right-of-use assets
72,671
74,856
Non-current accounts receivable, net
10,933
9,688
Other non-current assets
8,003
8,263
Total assets
$
1,933,027
$
1,937,152
Liabilities and stockholders’
equity
Current liabilities
Accounts payable and accrued
liabilities
$
298,308
$
272,704
Income tax liabilities
41,552
37,151
Finance lease liabilities
1,053
1,047
Operating lease liabilities
17,824
19,057
Other current liabilities
82,160
107,750
Total current liabilities
440,897
437,709
Deferred tax liabilities, net
26,296
30,419
Post-retirement benefits
10,187
11,344
Non-current finance lease liabilities
13,042
13,773
Non-current operating lease
liabilities
56,395
60,847
Other non-current liabilities
100,595
97,165
Total liabilities
647,412
651,257
Total stockholders’ equity
1,285,615
1,285,895
Total liabilities and stockholders’
equity
$
1,933,027
$
1,937,152
EXPRO GROUP HOLDINGS
N.V.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended June
30,
2023
2022
Cash flows from operating
activities:
Net income (loss)
$
2,944
$
(15,482
)
Adjustments to reconcile net income (loss)
to net cash (used in) provided by operating activities:
Depreciation and amortization expense
71,972
70,404
Equity in income of joint ventures
(5,241
)
(6,631
)
Stock-based compensation expense
9,748
10,248
Changes in fair value of investments
-
1,538
Elimination of unrealized profit on sales
to joint ventures
450
-
Deferred taxes
(6,823
)
(1,929
)
Unrealized foreign exchange losses
(gains)
(1,820
)
2,647
Changes in assets and liabilities:
Accounts receivable, net
(17,004
)
(52,971
)
Inventories
(1,440
)
(15,441
)
Other assets
(14,878
)
1,012
Accounts payable and accrued
liabilities
31,919
11,217
Other liabilities
(25,722
)
(12,840
)
Income taxes, net
2,994
568
Dividends from joint ventures
2,754
2,985
Other
(3,172
)
(7,432
)
Net cash provided by (used in)
operating activities
46,681
(12,107
)
Cash flows from investing
activities:
Capital expenditures
(57,968
)
(31,526
)
Payment for acquisition of business, net
of cash acquired
(7,536
)
-
Acquisition of technology
-
(7,967
)
Proceeds from disposal of assets
2,013
6,579
Proceeds from sale / maturity of
investments
-
8,169
Net cash used in investing
activities
(63,491
)
(24,745
)
Cash flows from financing
activities:
Release of (Cash pledged for) collateral
deposits, net
494
(256
)
Payments of loan issuance and other
transaction costs
-
(132
)
Acquisition of Company common stock
(10,011
)
(12,309
)
Payment of withholding taxes on
stock-based compensation plans
(2,835
)
(4,291
)
Repayment of financed insurance
premium
(4,277
)
(2,805
)
Repayment of finance leases
(1,164
)
(409
)
Net cash used in financing
activities
(17,793
)
(20,202
)
Effect of exchange rate changes on cash
and cash equivalents
(2,986
)
(3,382
)
Net decrease to cash and cash
equivalents and restricted cash
(37,589
)
(60,436
)
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
$
180,871
$
179,411
Supplemental disclosure of cash flow
information:
Cash paid for income taxes, net of
refunds
$
21,644
$
15,505
Cash paid for interest, net
546
1,999
Change in accounts payable and accrued
expenses related to capital expenditures
2,809
3,924
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
Six Months Ended
June 30,
March 31,
June 30,
June 30,
June 30,
2023
2023
2022
2023
2022
NLA
$
134,830
34
%
$
126,228
37
%
$
129,694
41
%
$
261,058
36
%
$
233,555
39
%
ESSA
138,062
35
%
113,648
34
%
90,118
29
%
251,710
34
%
172,189
29
%
MENA
59,163
15
%
50,945
15
%
45,363
14
%
110,108
15
%
96,078
16
%
APAC
64,862
16
%
48,458
14
%
48,449
16
%
113,320
15
%
92,279
16
%
Total
$
396,917
100
%
$
339,279
100
%
$
313,624
100
%
$
736,196
100
%
$
594,101
100
%
Segment EBITDA(1), Segment EBITDA
Margin(2), Adjusted EBITDA and Adjusted EBITDA Margin(3):
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
June 30,
June 30,
2023
2023
2022
2023
2022
NLA
$
36,703
27
%
$
31,874
25
%
$
38,513
30
%
$
68,577
26
%
$
60,340
26
%
ESSA
34,964
25
%
20,785
18
%
14,868
16
%
55,749
22
%
26,742
16
%
MENA
18,491
31
%
14,568
29
%
13,750
30
%
33,059
30
%
29,215
30
%
APAC (5)(6)
3,452
5
%
(2,698
)
(6
)%
4,356
9
%
754
1
%
9,794
11
%
93,610
64,529
71,487
158,139
126,091
Corporate costs(4)
(24,810
)
(25,081
)
(22,812
)
(49,891
)
(44,777
)
Equity in income of joint ventures
2,805
2,436
2,429
5,241
6,631
Adjusted EBITDA (5)(7)
$
71,605
18
%
$
41,884
12
%
$
51,104
16
%
$
113,489
15
%
$
87,945
15
%
(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)
APAC Segment EBITDA and Adjusted EBITDA
for the three months ended June 30, 2023 includes LWI-related
non-reimbursable costs for NPT (“non-productive time”) of $6
million (these costs were incurred after the system became
operational and, therefore, are not considered start-up and
commissioning costs).
(6)
Excluding $11 million and $4 million of
mobilization, start-up and commissioning costs during the three
months ended March 31, 2023 and June 30, 2022, respectively,
Segment EBITDA would have been $8 million and $8 million,
respectively, and Segment EBITDA margin would have been 16% and
17%, respectively.
(7)
Excluding $11 million and $4 million of
mobilization, start-up and commissioning costs during the three
months ended March 31, 2023 and June 30, 2022, respectively,
Adjusted EBITDA would have been $53 million and $55 million,
respectively, and Adjusted EBITDA margin would have been 16% and
18%, respectively.
EXPRO GROUP HOLDINGS
N.V.
REVENUE BY AREAS OF
CAPABILITIES
(In thousands)
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
June 30,
June 30,
2023
2023
2022
2023
2022
Well construction
$
143,719
36
%
$
128,265
38
%
$
121,794
39
%
$
271,984
37
%
$
233,229
39
%
Well management(1)
253,198
64
%
211,014
62
%
191,830
61
%
464,212
63
%
360,872
61
%
Total
$
396,917
100
%
$
339,279
100
%
$
313,624
100
%
$
736,196
100
%
$
594,101
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
Six Months Ended
June 30,
March 31,
June 30,
June 30,
June 30,
2023
2023
2022
2023
2022
Total revenue
$
396,917
$
339,279
$
313,624
$
736,196
$
594,101
Cost of revenue, excluding depreciation
and amortization expense
(318,948
)
(289,647
)
(256,583
)
(608,595
)
(496,113
)
Indirect costs (included in cost of
revenue)
56,605
64,821
59,859
121,426
120,425
Stock-based compensation expense
2,049
1,374
1,969
3,423
3,809
Direct costs (excluding depreciation and
amortization expense) (3)
(260,294
)
(223,452
)
(194,755
)
(483,746
)
(371,879
)
Contribution (5)(6)
$
136,623
$
115,827
$
118,869
$
252,450
$
222,222
Contribution margin (6)
34
%
34
%
38
%
34
%
37
%
Support Costs(4):
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
June 30,
June 30,
2023
2023
2022
2023
2022
Cost of revenue, excluding depreciation
and amortization expense
$
318,948
$
289,647
$
256,583
$
608,595
$
496,113
Direct costs (excluding depreciation and
amortization expense)
(260,294
)
(223,452
)
(194,755
)
(483,746
)
(371,879
)
Stock-based compensation expense
(2,049
)
(1,374
)
(1,969
)
(3,423
)
(3,809
)
Indirect costs (included in cost of
revenue)
56,605
64,821
59,859
121,426
120,425
General and administrative expense
(excluding depreciation and amortization expense, foreign exchange,
and other non-routine costs)
11,288
11,500
10,187
22,788
20,376
Total support costs
$
67,893
$
76,321
$
70,046
$
144,214
$
140,801
Total support costs as a percentage of
revenue
17
%
22
%
22
%
20
%
24
%
(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)
Contribution for the three months ended
June 30, 2023 includes LWI-related non-reimbursable costs for NPT
(“non-productive time”) of $6 million (these costs were incurred
after the system became operational and, therefore, are not
considered start-up and commissioning costs).
(6)
Excluding $11 million and $4 million of
mobilization, start-up and commissioning costs during the three
months ended March 31, 2023 and June 30, 2022, respectively,
Contribution would have been $126 million and $123 million
respectively, and Contribution margin would have been 37% and 39%,
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
Six Months Ended
June 30,
March 31,
June 30,
June 30,
June 30,
2023
2023
2022
2023
2022
Total revenue
$
396,917
$
339,279
$
313,624
$
736,196
$
594,101
Net income (loss)
$
9,295
$
(6,351
)
$
(4,350
)
$
2,944
$
(15,482
)
Income tax expense
12,539
5,085
9,596
17,624
14,145
Depreciation and amortization expense
37,235
34,737
35,392
71,972
70,404
Merger and integration expense
1,377
2,138
2,270
3,515
6,995
Severance and other expense
2,663
927
678
3,590
2,172
Other expense (income), net
1,462
949
(244
)
2,411
(1,240
)
Stock-based compensation expense
5,577
4,171
4,230
9,748
10,248
Foreign exchange gain
1,440
(1,070
)
5,244
370
2,428
Interest and finance (income) expense,
net
17
1,298
(1,712
)
1,315
(1,725
)
Adjusted EBITDA (1)(2)
$
71,605
$
41,884
$
51,104
$
113,489
$
87,945
Adjusted EBITDA margin (2)
18
%
12
%
16
%
15
%
15
%
(1)
Adjusted EBITDA for the three months ended
June 30, 2023 includes LWI-related non-reimbursable costs for NPT
(“non-productive time”) of $6 million (these costs were incurred
after the system became operational and, therefore, are not
considered start-up and commissioning costs).
(2)
Excluding $11 million and $4 million of
mobilization, start-up and commissioning costs during the three
months ended March 31, 2023 and June 30, 2022, respectively,
Adjusted EBITDA would have been $53 million and $55 million,
respectively, and Adjusted EBITDA margin would have been 16% and
18%, respectively.
EXPRO GROUP HOLDINGS
N.V.
NON-GAAP FINANCIAL MEASURES
AND RECONCILIATION
(In thousands)
(Unaudited)
Adjusted Cash Flow from Operations
Reconciliation:
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
June 30,
June 30,
2023
2023
2022
2023
2022
Net cash provided by (used in) operating
activities
$
25,358
$
21,323
$
2,055
$
46,681
$
(12,107
)
Cash (received) paid for interest, net
(420
)
966
1,096
546
1,999
Cash paid for merger and integration
expense
9,076
2,324
5,837
11,400
17,469
Cash paid for severance and other
expense
1,999
2,572
565
4,571
772
Adjusted Cash Flow from
Operations
$
36,013
$
27,185
$
9,553
$
63,198
$
8,133
Adjusted EBITDA
$
71,605
$
41,884
$
51,104
$
113,489
$
87,945
Cash conversion (1)
50
%
65
%
19
%
56
%
9
%
(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
Six Months Ended
June 30,
March 31,
June 30,
June 30,
June 30,
2023
2023
2022
2023
2022
Net income (loss)
$
9,295
$
(6,351
)
$
(4,350
)
$
2,944
$
(15,482
)
Adjustments:
Merger and integration expense
1,377
2,138
2,270
3,515
6,995
Severance and other expense
2,663
927
678
3,590
2,172
Stock-based compensation expense
5,577
4,171
4,230
9,748
10,248
Total adjustments, before taxes
9,617
7,236
7,178
16,853
19,415
Tax benefit
(32
)
(11
)
(109
)
(43
)
(433
)
Total adjustments, net of taxes
9,585
7,225
7,069
16,810
18,982
Adjusted net income
$
18,880
$
874
$
2,719
$
19,754
$
3,500
As reported diluted weighted average
common shares outstanding
109,381,977
108,854,709
109,582,086
109,975,739
109,425,407
As reported net income (loss) per diluted
share
$
0.08
$
(0.06
)
$
(0.04
)
$
0.03
$
(0.14
)
Adjusted net income per diluted share
$
0.17
$
0.01
$
0.02
$
0.18
$
0.03
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230727717183/en/
InvestorRelations@expro.com
Expro Group Holdings NV (NYSE:XPRO)
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