Revenue of $423 million, down 10% sequentially
and up 14% year-over-year.
Net income of $16 million, as compared to net
income of $15 million for the second quarter of 2024 and net loss
of $14 million for the third quarter of 2023. Net income margin was
4% for the third quarter of 2024, compared to 3% for the second
quarter of 2024 and up compared to (4)% for the third quarter of
2023.
Adjusted EBITDA1 of $85 million, which includes
losses recognized on our Congo production solutions project of $7
million, down 10% sequentially and up 69% year-over-year. Adjusted
EBITDA margin1 was 20%, for the third and second quarters of 2024,
up six percentage points compared to 14% for the third quarter of
2023.
Refining full-year 2024 guidance range to $1.72
to $1.75 billion of revenue, $335 to $350 million of Adjusted
EBITDA and Adjusted EBITDA Margin of approximately 20%.
Expro Group Holdings N.V. (NYSE: XPRO) (the “Company” or
“Expro”) today reported financial and operational results for the
three and nine months ended September 30, 2024.
Third Quarter 2024 Highlights
- Revenue was $423 million compared to revenue of $470 million in
the second quarter of 2024, a decrease of $47 million, or 10%.
Consistent with expectations, the decrease in revenue was a result
of lower activity in the North and Latin America (“NLA”) and Europe
and Sub-Saharan Africa (“ESSA”) segments, offset by modestly higher
activity in the Middle East and North Africa (“MENA”) and Asia
Pacific (“APAC”) segments. Third and second quarter operating
results respectively include $33 million and $21 million of revenue
attributable to Coretrax.
- Net income for the third quarter of 2024 was $16 million, or
$0.14 per diluted share, compared to net income of $15 million, or
$0.13 per diluted share, for the second quarter of 2024. Net income
margin (defined as net income as a percentage of revenue) was 4%
for the three months ended September 30, 2024, up from 3% for the
three months ended June 30, 2024. Adjusted net income1 for the
third quarter of 2024 was $28 million, or $0.23 per diluted share,
compared to adjusted net income for the second quarter of 2024 of
$31 million, or $0.27 per diluted share.
- Adjusted EBITDA for the third quarter was $85 million, a
sequential decrease of $10 million, or 10%, primarily attributable
to lower well flow management activity related to changes in our
customers' drilling and completions programs in Mexico, and lower
activity and a change in activity mix in the U.S. Gulf of Mexico.
Additionally, the results for the three months ended September 30,
2024 and June 30, 2024 include losses on our Congo production
solutions project of $7 million and $12 million, respectively,
pending the resolution of several variation orders. Adjusted EBITDA
margin for both the third and second quarters of 2024 was 20%.
- Net cash provided by operating activities for the third quarter
of 2024 was $55 million, an increase as compared to net cash used
in operating activities of $13 million for the second quarter of
2024, primarily driven by a decrease in working capital. Consistent
with historical seasonal patterns, the decrease in working capital
is expected to continue in the fourth quarter of 2024, resulting in
an improvement in net cash provided by operating activities.
1. A non-GAAP measure.
Michael Jardon, Chief Executive Officer, noted “We are pleased
to report a solid quarter, with strong year-over-year growth,
driven by our team’s commitment to deliver excellence and
innovation.
“Expro is focused on delivering high quality services for our
customers, and we remain well positioned for what we expect will be
a multi-year growth phase for energy services and for companies
such as Expro with good leverage to long-cycle development
activity. Despite near-term headwinds, our longer-term outlook for
the international and offshore energy markets remains constructive,
and we are refining full-year 2024 guidance for expected revenues
of between $1,720 million and $1,750 million. Additionally, we are
revising full-year Adjusted EBITDA guidance to between $335 million
and $350 million, and Adjusted EBITDA margin to approximately
20%.
“Fourth quarter revenue is expected to be between $440 million
and $470 million, implying sequential and year-on-year revenue
growth (at the mid-point of guidance) of 8% and 12%, respectively,
with Adjusted EBITDA expected to be in a range of $90 million to
$105 million, and Adjusted EBITDA margin of between 21% and 22%.
Our expectation for the full-year assumes the favorable resolution
of several variation orders on our Congo production solutions
project, a modest Q4 rebound in activity in NLA, and the expected
start-up and completion of other projects.
“With commodity prices under pressure the last several months,
customers are being more cautious with discretionary spending,
increasing their focus on lowering the cost-of-service delivery,
and, in some cases, delaying the start-up of new projects. The
impact is expected to be most pronounced on short-cycle activity.
In 2025, we expect reduced activity and spending in North America
and the U.S. onshore market, in particular. We continue to expect
mid-single digit, year-over-year growth for the international and
offshore markets, with operators’ more cautious recent approach
likely resulting in a slow start to the new year, and activity then
gaining momentum as we progress through 2025. Longer-term, expected
demand and energy security concerns should support sustained
upstream investment and increasing demand for the cost-effective,
technology-enabled services and solutions that we provide. This is
reflected in contracting activity for third quarter of 2024, with
Expro capturing $354 million of contract wins (excluding Coretrax
and PRT Offshore), including well construction contracts of
approximately $80 million and $31 million in the Gulf of Mexico and
Angola, respectively. Related to Coretrax, integration efforts are
well underway, with teams across the world collaborating on tenders
to realize pull-through revenue synergies, an example of which
includes successfully executing five jobs for a new client in
Kuwait utilizing the Coretrax expandables solution. As of September
30, 2024, our backlog remains steady at approximately $2.3 billion,
including approximately $100 million of Coretrax and PRT
backlog.
“Overall, Expro is well positioned to capitalize on
international and offshore opportunities. We provide mission
critical services and solutions, and we believe secular trends will
provide positive momentum across our portfolio.”
Notable Awards and
Achievements
In the third quarter, Expro’s CENTRI-FI™ Consolidated Controls
solution technology has been selected by Hart E&P’s panel of
independent judges as winner of the 2024 Special Meritorious Awards
for Engineering Innovation (“MEA”) in the Digital Oilfield
Category. The CENTRI-FI™ Consolidated Control Console is one of a
suite of digitally intelligent well construction solutions in
development as part of Expro’s strategy to adapt and adopt
technologies to address today’s and tomorrow’s energy challenges.
CENTRI-FI™ is an intelligent digital command and control solution
that allows the tong makeup, elevator and slips function, and a
single joint elevator to be precisely controlled and operated via
wireless control tablet. The operations are performed by a single
operator, instead of three or four personnel.
In the NLA region, we have had further success in the expansion
of Expro’s Remote Boxing Device in deepwater Brazil, following
successful trial where the safety features were quickly recognized.
The solution’s consistent and reliable performance delivers value
on every connection, with the cumulative potential to reduce over
28 hours of Red Zone exposure per well.
Good business momentum is continuing in the ESSA region with
several contract awards and successful projects within the Well
Flow Management and Subsea Well Access product lines. In Kazakhstan
we progressed an important project where we delivered three well
test packages, allowing the client to achieve early production from
their gas condensate field. This facility is flowing at similar
production rates to the onshore pre-treatment (“OPT”) project in
Congo.
In the MENA region during the third quarter, Expro surpassed one
million hours of data transmission from our Data-to-Desk (“D2D”)
solution – an established capability used for transmitting and
presenting data from the well site in real time. Users access their
data from the well site to any web-enabled device, in any location
across the globe ensuring decisions on well performance are based
on the latest available data.
Lastly, in APAC, the cased hole team successfully executed the
client's first Distributed Fiber Optics Sensing (“DFOS”) job in two
wells, delivering unique insights compared to traditional methods.
DFOS data helped pinpoint the ideal injection pressure and rates,
prevent fracture extension, and minimize integrity risks. It also
enabled the client to isolate unproductive zones, optimize the
injection profile, and refine future well completions—transforming
their approach to well performance monitoring.
Segment Results
Unless otherwise noted, the following discussion compares the
quarterly results for the third quarter of 2024 to the results for
the second quarter of 2024.
North and Latin America (NLA)
Revenue for the NLA segment was $139 million for the three
months ended September 30, 2024, a decrease of $18 million, or 11%,
compared to $157 million for the three months ended June 30, 2024.
The decrease was primarily due to lower revenue from well flow
management, well construction and subsea well access activity in
the Gulf of Mexico and Mexico, and lower well intervention and
integrity activity in Argentina, partially offset by higher well
flow management revenue in Argentina. NLA revenue included $6
million and $5 million of revenue in the third and second quarter,
respectively, as a result of the Coretrax acquisition.
Segment EBITDA for the NLA segment was $33 million, or 24% of
revenues, during the three months ended September 30, 2024, a
decrease of $11 million, or 26%, compared to $44 million or 28% of
revenues during the three months ended June 30, 2024. The decrease
in Segment EBITDA and Segment EBITDA margin was primarily
attributable to lower well flow management activity related to a
change in our customers' drilling and completions programs in
Mexico, and lower activity and a less favorable activity mix in the
Gulf of Mexico during the three months ended September 30,
2024.
Europe and Sub-Saharan Africa (ESSA)
Revenue for the ESSA segment was $131 million for the three
months ended September 30, 2024, a decrease of $37 million, or 22%,
compared to $168 million for the three months ended June 30, 2024.
The decrease in revenues was primarily driven by an expected
decrease in subsea well access revenue in Angola due to project
timing and lower well flow management revenue in Congo, partially
offset by increased well flow management and well construction
activity in the United Kingdom. ESSA revenue included $7 million
and $4 million of revenue in the third and second quarter,
respectively, as a result of the Coretrax acquisition.
Segment EBITDA for the ESSA segment was $32 million, or 24% of
revenues, for the three months ended September 30, 2024, a decrease
of $3 million, or 8%, compared to $35 million, or 21% of revenues,
for the three months ended June 30, 2024. The decrease in Segment
EBITDA and Segment EBITDA margin was attributable to the above
referenced decrease of subsea well access activity in Angola,
partially offset by lower losses on our Congo production solutions
project during the three months ended September 30, 2024 as
compared to the three months ended June 30, 2024. For both the
third and second quarters, we recognized losses on the Congo
production solutions project pending resolution of several
variation orders.
Middle East and North Africa (MENA)
Revenue for the MENA segment was $87 million for the three
months ended September 30, 2024, an increase of $5 million, or 7%,
compared to $81 million for the three months ended June 30, 2024.
The increase in revenue was driven by three months of Coretrax
revenue in the third quarter compared to two months in the second
quarter, partially offset by a modest decrease in revenue across
other product lines. MENA revenue in the third and second quarter
included $16 million and $10 million of Coretrax revenue,
respectively.
Segment EBITDA for the MENA segment was $30 million, or 35% of
revenues, for the three months ended September 30, 2024, an
increase of $1 million, or 5%, compared to $29 million, or 35% of
revenues, for the three months ended June 30, 2024. The increase in
Segment EBITDA and Segment EBITDA margin was primarily due to
increased activity on higher-margin projects and more favorable
activity mix during the three months ended September 30, 2024,
including impacts of the Coretrax acquisition.
Asia Pacific (APAC)
Revenue for the APAC segment was $65 million for the three
months ended September 30, 2024, an increase of $2 million, or 4%,
compared to $63 million for the three months ended June 30, 2024.
The increase in revenue was primarily due to increased well flow
management activity in Thailand, higher subsea well access activity
in Australia and increased Coretrax revenue, partially offset by
lower subsea well access activity in China and lower well flow
management and well intervention and integrity activity in
Australia. APAC revenue included $4 million and $2 million of
Coretrax revenue in the third and second quarter, respectively.
Segment EBITDA for the APAC segment was $16 million, or 25% of
revenues, for the three months ended September 30, 2024, an
increase of $1 million compared to $15 million, or 24% of revenues,
for the three months ended June 30, 2024. The increase in Segment
EBITDA is attributable primarily due to the impact of the Coretrax
acquisition.
Other Financial
Information
The Company’s capital expenditures totaled $32 million in the
third quarter of 2024, 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 $30
million to $40 million for the fourth quarter of 2024.
As of September 30, 2024, Expro’s consolidated cash and cash
equivalents, including restricted cash, totaled $167 million. The
Company had outstanding long-term borrowings of $121 million as of
September 30, 2024. The Company’s total liquidity as of September
30, 2024 was $303 million. Total liquidity includes $136 million
available for drawdowns as loans under the Company’s revolving
credit facility.
Expro’s provision for income taxes for both the third quarter of
2024 and the second quarter of 2024 was approximately $10 million
and $14 million, respectively. The Company’s effective tax rate on
a U.S. generally accepted accounting principles (“GAAP”) basis for
the three months ended September 30, 2024 also reflects liability
for taxes in certain jurisdictions that tax on an other than
pre-tax profits basis, including so-called “deemed profits”
regimes.
On May 15, 2024, the Company established an incremental facility
under its Amended and Restated Facility Agreement to increase its
existing $250 million revolving credit facility by an additional
$90 million in commitments, to a total of $340 million. The
incremental facility has the same terms and conditions as the
existing facility provided under the Amended and Restated Facility
Agreement. The incremental facility is available for the same
general corporate purposes as the existing facility provided under
the Amended and Restated Facility Agreement, including
acquisitions. On May 15, 2024, the Company drew down on the new
facility in the amount of approximately $76 million to partially
finance the Coretrax acquisition.
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 third quarter
2024 results on Thursday, October 24, 2024, 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
(404) 975-4839 Access ID: 791796
To listen via live webcast, please visit the Investor section of
www.expro.com.
The third quarter 2024 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 two weeks.
To access the audio replay telephonically:
Dial-In: U.S. +1 (866) 813-9403 or +1 (929)
458-6194 Access ID: 392584 Start Date: October 24, 2024, 1:00 p.m.
CT End Date: November 7, 2024, 10:59 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 more than 8,500 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 X @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, environmental, social and governance
goals, targets and initiatives, estimates and projections regarding
the benefits of the Coretrax acquisition, and the Company’s ability
to achieve the anticipated synergies as a result of the Coretrax
acquisition. 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 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 (including the ability to recover, and to
the extent necessary, service and/or economically repair any
equipment located on the seabed), 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, 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, inflationary pressures, 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, 2023 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
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 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 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.
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
Nine Months Ended
September 30,
June 30,
September 30,
September 30,
September 30,
2024
2024
2023
2024
2023
Total revenue
$
422,828
$
469,642
$
369,818
$
1,275,959
$
1,106,014
Operating costs and expenses:
Cost of revenue, excluding depreciation
and amortization expense
(331,235
)
(366,520
)
(315,825
)
(1,006,242
)
(924,420
)
General and administrative expense,
excluding depreciation and amortization expense
(20,467
)
(26,225
)
(15,437
)
(65,905
)
(44,908
)
Depreciation and amortization expense
(40,391
)
(40,647
)
(37,414
)
(121,184
)
(109,386
)
Merger and integration expense
(1,437
)
(8,789
)
(817
)
(12,387
)
(4,332
)
Severance and other (expense) income
(3,181
)
236
(1,897
)
(8,007
)
(5,487
)
Total operating cost and expenses
(396,711
)
(441,945
)
(371,390
)
(1,213,725
)
(1,088,533
)
Operating income (loss)
26,117
27,697
(1,572
)
62,234
17,481
Other income (expense), net
262
334
(1,129
)
1,081
(3,540
)
Interest and finance expense, net
(3,895
)
(3,666
)
(373
)
(10,713
)
(1,688
)
Income (loss) before taxes and equity
in income of joint ventures
22,484
24,365
(3,074
)
52,602
12,253
Equity in income of joint ventures
4,241
4,856
2,495
12,955
7,736
Income (loss) before income
taxes
26,725
29,221
(579
)
65,557
19,989
Income tax expense
(10,450
)
(13,935
)
(13,307
)
(36,673
)
(30,931
)
Net income (loss)
$
16,275
$
15,286
$
(13,886
)
$
28,884
$
(10,942
)
Net income (loss) per common
share:
Basic
$
0.14
$
0.13
$
(0.13
)
$
0.25
$
(0.10
)
Diluted
$
0.14
$
0.13
$
(0.13
)
$
0.25
$
(0.10
)
Weighted average common shares
outstanding:
Basic
117,467,994
113,979,860
108,777,429
113,887,885
108,764,599
Diluted
118,293,677
114,923,702
108,777,429
115,605,215
108,764,599
EXPRO GROUP HOLDINGS
N.V.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands)
(Unaudited)
September 30,
December 31,
2024
2023
Assets
Current assets
Cash and cash equivalents
$
165,663
$
151,741
Restricted cash
1,322
1,425
Accounts receivable, net
532,469
469,119
Inventories
179,339
143,325
Income tax receivables
32,511
27,581
Other current assets
72,976
58,409
Total current assets
984,280
851,600
Property, plant and equipment, net
535,988
513,222
Investments in joint ventures
75,537
66,402
Intangible assets, net
308,453
239,716
Goodwill
343,885
247,687
Operating lease right-of-use assets
76,332
72,310
Non-current accounts receivable, net
8,008
9,768
Other non-current assets
11,137
12,302
Total assets
$
2,343,620
$
2,013,007
Liabilities and stockholders’
equity
Current liabilities
Accounts payable and accrued
liabilities
$
326,647
$
326,125
Income tax liabilities
52,830
45,084
Finance lease liabilities
2,282
1,967
Operating lease liabilities
17,990
17,531
Other current liabilities
97,699
98,144
Total current liabilities
497,448
488,851
Long-term borrowings
121,065
20,000
Deferred tax liabilities, net
47,196
22,706
Post-retirement benefits
5,675
10,445
Non-current finance lease liabilities
15,040
16,410
Non-current operating lease
liabilities
59,528
54,976
Uncertain tax positions
69,471
59,544
Other non-current liabilities
44,868
44,202
Total liabilities
860,291
717,134
Common stock
8,486
8,062
Treasury stock
(69,104
)
(64,697
)
Additional paid-in capital
2,072,061
1,909,323
Accumulated other comprehensive income
22,135
22,318
Accumulated deficit
(550,249
)
(579,133
)
Total stockholders’ equity
1,483,329
1,295,873
Total liabilities and stockholders’
equity
$
2,343,620
$
2,013,007
EXPRO GROUP HOLDINGS
N.V.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Nine Months Ended September
30,
2024
2023
Cash flows from operating
activities:
Net income (loss)
$
28,884
$
(10,942
)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization expense
121,184
109,386
Equity in income of joint ventures
(12,955
)
(7,736
)
Stock-based compensation expense
19,251
14,682
Elimination of unrealized (loss) gain on
sales to joint ventures
(312
)
3,520
Changes in fair value of contingent
consideration
(5,761
)
-
Deferred taxes
(1,126
)
(8,066
)
Unrealized foreign exchange losses
3,418
1,725
Changes in assets and liabilities:
Accounts receivable, net
(28,676
)
3,193
Inventories
(15,367
)
(587
)
Other assets
(11,471
)
(15,279
)
Accounts payable and accrued
liabilities
(19,617
)
29,269
Other liabilities
(8,463
)
(15,422
)
Income taxes, net
3,375
4,481
Dividends received from joint ventures
4,132
2,754
Other
(4,418
)
(5,450
)
Net cash provided by operating
activities
72,078
105,528
Cash flows from investing
activities:
Capital expenditures
(99,158
)
(84,623
)
Payment for acquisition of business, net
of cash acquired
(31,967
)
(8,477
)
Proceeds from settlement of contingent
consideration
7,500
-
Proceeds from disposal of assets
2,900
2,013
Proceeds from sale / maturity of
investments
-
288
Net cash used in investing
activities
(120,725
)
(90,799
)
Cash flows from financing
activities:
Release of collateral deposits, net
1,242
350
Proceeds from borrowings
117,269
50,000
Repayment of borrowings
(44,351
)
-
Repurchase of common stock
-
(10,011
)
Payment of withholding taxes on
stock-based compensation plans
(3,269
)
(2,436
)
Repayment of financed insurance
premium
(7,828
)
(6,733
)
Repayments of finance leases
(1,055
)
(1,296
)
Net cash provided by financing
activities
62,008
29,874
Effect of exchange rate changes on cash
and cash equivalents
458
(6,052
)
Net increase to cash and cash
equivalents and restricted cash
13,819
38,551
Cash and cash equivalents and restricted
cash at beginning of period
153,166
218,460
Cash and cash equivalents and
restricted cash at end of period
$
166,985
$
257,011
Supplemental disclosure of cash flow
information:
Cash paid for income taxes, net of
refunds
$
34,091
$
34,722
Cash paid for interest, net
8,070
1,456
Change in accounts payable and accrued
expenses related to capital expenditures
9,545
1,432
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
Nine Months Ended
September 30,
June 30,
September 30,
September 30,
September 30,
2024
2024
2023
2024
2023
NLA
$
139,397
33
%
$
156,990
34
%
$
105,252
28
%
$
426,776
33
%
$
366,310
33
%
ESSA
131,475
31
%
168,431
36
%
135,395
37
%
421,652
33
%
387,105
35
%
MENA
86,736
21
%
81,429
17
%
58,057
16
%
239,659
19
%
168,165
15
%
APAC
65,220
15
%
62,792
13
%
71,114
19
%
187,872
15
%
184,434
17
%
Total
$
422,828
100
%
$
469,642
100
%
$
369,818
100
%
$
1,275,959
100
%
$
1,106,014
100
%
Segment EBITDA(1), Segment EBITDA
Margin(2), Adjusted EBITDA and Adjusted EBITDA
Margin(3):
Three Months Ended
Nine Months Ended
September 30,
June 30,
September 30,
September 30,
September 30,
2024
2024
2023
2024
2023
NLA
$
33,064
24
%
$
44,474
28
%
$
19,967
19
%
$
111,915
26
%
$
88,544
24
%
ESSA
32,175
24
%
34,997
21
%
39,268
29
%
92,373
22
%
95,017
25
%
MENA
30,032
35
%
28,611
35
%
16,871
29
%
83,181
35
%
49,930
30
%
APAC
16,193
25
%
15,248
24
%
(4,286
)
(6
)%
42,227
22
%
(3,532
)
(2
)%
Total Segment EBITDA
111,464
123,330
71,820
329,696
229,959
Corporate costs(4)
(30,669
)
(33,636
)
(24,070
)
(95,605
)
(73,961
)
Equity in income of joint ventures
4,241
4,856
2,495
12,955
7,736
Adjusted EBITDA
$
85,036
20
%
$
94,550
20
%
$
50,245
14
%
$
247,046
19
%
$
163,734
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.
EXPRO GROUP HOLDINGS
N.V.
REVENUE BY AREAS OF
CAPABILITIES AND SELECTED CASH FLOW INFORMATION
(In thousands)
(Unaudited)
Revenue by areas of
capabilities:
Three Months Ended
Nine Months Ended
September 30,
June 30,
September 30,
September 30,
September 30,
2024
2024
2023
2024
2023
Well construction
$
159,268
38
%
$
148,476
32
%
$
116,293
31
%
$
427,775
34
%
$
388,277
35
%
Well management(1)
263,560
62
%
321,166
68
%
253,525
69
%
848,184
66
%
717,737
65
%
Total
$
422,828
100
%
$
469,642
100
%
$
369,818
100
%
$
1,275,959
100
%
$
1,106,014
100
%
Supplementary information on specific
amounts included in cash provided by operating activities:
Three Months Ended
Nine Months Ended
September 30,
June 30,
September 30,
September 30,
September 30,
2024
2024
2023
2024
2023
Net cash provided by (used in)
operating activities
$
55,313
$
(13,173
)
$
58,841
$
72,078
$
105,528
Cash paid for interest, net
2,441
2,719
910
8,070
1,456
Cash paid for merger and integration
expense
2,212
9,712
1,614
14,204
13,014
Cash paid for severance and other
expense
5,490
6,334
2,208
14,972
6,779
(1)
Well management consists of well
flow management, subsea well access, and well intervention and
integrity.
EXPRO GROUP HOLDINGS
N.V.
GROSS PROFIT, GROSS MARGIN,
CONTRIBUTION, CONTRIBUTION MARGIN AND SUPPORT COSTS
(In thousands)
(Unaudited)
Gross Profit, Contribution(1),
Gross Margin and Contribution Margin(2):
Three Months Ended
Nine Months Ended
September 30,
June 30,
September 30,
September 30,
September 30,
2024
2024
2023
2024
2023
Total revenue
$
422,828
$
469,642
$
369,818
$
1,275,959
$
1,106,014
Less: Cost of revenue, excluding
depreciation and amortization
(331,235
)
(366,520
)
(315,825
)
(1,006,242
)
(924,420
)
Less: Depreciation and amortization
related to cost of revenue
(40,315
)
(40,571
)
(37,334
)
(120,956
)
(109,165
)
Gross profit
51,278
62,551
16,659
148,761
72,429
Add: Indirect costs (included in cost of
revenue)
71,875
69,645
62,772
209,954
184,198
Add: Stock-based compensation expenses
2,266
2,785
1,789
6,697
5,212
Add: Depreciation and amortization related
to cost of revenue
40,315
40,571
37,334
120,956
109,165
Contribution
$
165,734
$
175,552
$
118,554
$
486,368
$
371,004
Gross margin
12
%
13
%
5
%
12
%
7
%
Contribution margin
39
%
37
%
32
%
38
%
34
%
Support Costs(4):
Three Months Ended
Nine Months Ended
September 30,
June 30,
September 30,
September 30,
September 30,
2024
2024
2023
2024
2023
Cost of revenue, excluding depreciation
and amortization expense
331,235
366,520
315,825
$
1,006,242
$
924,420
Direct costs (excluding depreciation and
amortization expense)(3)
(257,094
)
(294,090
)
(251,264
)
(789,591
)
(735,010
)
Stock-based compensation expense
(2,266
)
(2,785
)
(1,789
)
(6,697
)
(5,212
)
Indirect costs (included in cost of
revenue)
71,875
69,645
62,772
209,954
184,198
General and administrative expense
(excluding depreciation and amortization expense, foreign exchange,
and other non-routine costs)
13,123
16,034
7,961
42,203
30,749
Total support costs
$
84,998
$
85,679
$
70,733
$
252,157
$
214,947
Total support costs as a percentage of
revenue
20
%
18
%
19
%
20
%
19
%
(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.
EXPRO GROUP HOLDINGS
N.V.
NON-GAAP FINANCIAL MEASURES
AND RECONCILIATION
(In thousands)
(Unaudited)
Adjusted EBITDA Reconciliation and
Adjusted EBITDA Margin:
Three Months Ended
Nine Months Ended
September 30,
June 30,
September 30,
September 30,
September 30,
2024
2024
2023
2024
2023
Total revenue
$
422,828
$
469,642
$
369,818
$
1,275,959
$
1,106,014
Net income (loss)
$
16,275
$
15,286
$
(13,886
)
$
28,884
$
(10,942
)
Income tax expense
10,450
13,935
13,307
36,673
30,931
Depreciation and amortization expense
40,391
40,647
37,414
121,184
109,386
Severance and other expense (income)
3,181
(236
)
1,897
8,007
5,487
Merger and integration expense
1,437
8,789
817
12,387
4,332
Other (income) expense, net
(262
)
(334
)
1,129
(1,081
)
3,540
Stock-based compensation expense
6,831
7,350
4,934
19,251
14,682
Foreign exchange loss
2,838
5,447
4,260
11,028
4,630
Interest and finance expense, net
3,895
3,666
373
10,713
1,688
Adjusted EBITDA
$
85,036
$
94,550
$
50,245
$
247,046
$
163,734
Net income (loss) margin
4
%
3
%
(4
)%
2
%
(1
)%
Adjusted EBITDA margin
20
%
20
%
14
%
19
%
15
%
EXPRO GROUP HOLDINGS
N.V.
NON-GAAP FINANCIAL MEASURES
AND RECONCILIATION
(In thousands, except per
share amounts)
(Unaudited)
Reconciliation of Adjusted Net Income
(Loss):
Three Months Ended
Nine Months Ended
September 30,
June 30,
September 30,
September 30,
September 30,
2024
2024
2023
2024
2023
Net income (loss)
$
16,275
$
15,286
$
(13,886
)
$
28,884
$
(10,942
)
Adjustments:
Merger and integration expense
1,437
8,789
817
12,387
4,332
Severance and other expense (income)
3,181
(236
)
1,897
8,007
5,487
Stock-based compensation expense
6,831
7,350
4,934
19,251
14,682
Total adjustments, before taxes
11,449
15,903
7,648
39,645
24,501
Tax benefit
(27
)
(75
)
-
(111
)
(43
)
Total adjustments, net of taxes
11,422
15,828
7,648
39,534
24,458
Adjusted net income (loss)
$
27,697
$
31,114
$
(6,238
)
$
68,418
$
13,516
Reconciliation of Adjusted Net Income
(Loss) per Diluted Share:
Three Months Ended
Nine Months Ended
September 30,
June 30,
September 30,
September 30,
September 30,
2024
2024
2023
2024
2023
Net income (loss)
$
0.14
$
0.13
$
(0.13
)
$
0.25
$
(0.10
)
Adjustments:
Merger and integration expense
0.01
0.08
0.01
0.11
0.04
Severance and other expense (income)
0.03
(0.00
)
0.02
0.07
0.05
Stock-based compensation expense
0.06
0.06
0.05
0.17
0.13
Total adjustments, before taxes
0.10
0.14
0.07
0.34
0.23
Tax benefit
(0.00
)
(0.00
)
-
(0.00
)
(0.00
)
Total adjustments, net of taxes
0.10
0.14
0.07
0.34
0.22
Adjusted net income (loss)
$
0.23
$
0.27
$
(0.06
)
$
0.59
$
0.12
As reported diluted weighted average
common shares outstanding
118,293,677
114,923,702
108,777,429
115,605,215
108,764,599
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241024580934/en/
Chad Stephenson – Director Investor Relations +1 (713)
463-9776 InvestorRelations@expro.com
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