Group 1 - The article confirms a "Buy" recommendation for Schlumberger (NYSE: SLB) shares with a target price of $39, indicating a potential upside of approximately 15% from current levels [1] - The investment idea is based on the author's extensive experience in the investment world, focusing on uncovering hidden value in emerging markets [1] Group 2 - The author has a background in equity analysis across various sectors, which contributes to the depth of the research presented [1] - The article emphasizes the importance of understanding the real story behind financial statements to identify investment opportunities [1]

Core Points - AeroVironment Inc. will replace ChampionX Corp. in the S&P MidCap 400, while Victory Capital Holdings Inc. will replace AeroVironment in the S&P SmallCap 600, effective July 18, 2025 [1] - Schlumberger Ltd. is acquiring ChampionX in a deal expected to close on July 16, 2025, pending final conditions [1] Summary by Category Index Changes - Effective Date: July 18, 2025 - S&P MidCap 400: Addition of AeroVironment (Ticker: AVAV, Sector: Industrials) and Deletion of ChampionX (Ticker: CHX, Sector: Energy) [2] - S&P SmallCap 600: Addition of Victory Capital Holdings (Ticker: VCTR, Sector: Financials) and Deletion of AeroVironment (Ticker: AVAV, Sector: Industrials) [2]

Core Insights - The article emphasizes the importance of efficiency ratios in evaluating a company's potential for profitability and stock performance [1] Efficiency Ratios - **Receivables Turnover**: This ratio measures a company's ability to extend credit and collect debts, with a high ratio indicating effective collection practices and quality customers [2] - **Asset Utilization**: This ratio assesses how well a company converts its assets into sales, with higher values suggesting greater efficiency [3] - **Inventory Turnover**: This ratio indicates a company's ability to manage inventory relative to its cost of goods sold, where a high value reflects efficient inventory management [4] - **Operating Margin**: This ratio measures the efficiency of a company in controlling operating expenses, with higher values indicating better expense management compared to peers [5] Screening Criteria - The screening process identified stocks with efficiency ratios above industry averages, narrowing down from over 7,906 stocks to eight candidates [7] - A favorable Zacks Rank of 1 (Strong Buy) was also included in the screening criteria to enhance profitability [6] Selected Stocks - **Quad Graphics (QUAD)**: Specializes in print and multichannel solutions, with an average four-quarter earnings surprise of 71.8% [7] - **ONESPAN (OSPN)**: Develops security software and e-signature solutions, achieving an average four-quarter earnings surprise of 38.6% [8] - **ChampionX (CHX)**: Provides chemistry solutions and technologies for oil and gas production, with an average four-quarter earnings surprise of 9% [9] - **BancFirst (BANF)**: A bank holding company offering commercial banking services, with an average four-quarter earnings surprise of 7% [10]

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This section warns readers about the inherent uncertainties and risks associated with forward-looking statements in the report - This section warns readers that forward-looking statements in the report, identified by words like "believe," "anticipate," and "expect," are based on current expectations and assumptions about future events, revenues, earnings, and cash flows[6](index=6&type=chunk) - Actual results may differ materially from projections due to various risks, uncertainties, and assumptions, some of which are significant or beyond the company's control, as detailed in the "Risk Factors" sections of the Annual Report on Form 10-K and this Quarterly Report[7](index=7&type=chunk) - Known material factors that could cause actual results to differ include the impact of the pending Merger Agreement with SLB, fluctuations in crude oil and natural gas prices affecting demand and profitability, cost inflation, global economic conditions, supply chain disruptions, and changes in governmental policies[7](index=7&type=chunk) - The company explicitly states it undertakes no obligation to publicly update, revise, or correct any forward-looking statements after their initial publication date, except as required by federal securities laws[8](index=8&type=chunk) PART I — FINANCIAL INFORMATION This part presents ChampionX Corporation's unaudited condensed consolidated financial statements and related disclosures [ITEM 1. FINANCIAL STATEMENTS (unaudited)](index=6&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS%20(unaudited)) This section presents ChampionX Corporation's unaudited condensed consolidated financial statements and detailed notes [Condensed Consolidated Statements of Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) This statement details ChampionX's revenues, expenses, and net income for the reporting period (in thousands, except per share data) | (in thousands, except per share data) | 2025 | 2024 | | :---------------------------------- | :--- | :--- | | Revenue: | | | | Product revenue | $731,086 | $807,827 | | Service revenue | $101,653 | $87,179 | | Lease and other revenue | $31,725 | $27,135 | | **Total revenue** | **$864,464** | **$922,141** | | Cost of goods and services | $572,938 | $622,937 | | **Gross profit** | **$291,526** | **$299,204** | | Selling, general and administrative expense | $177,045 | $172,414 | | (Gain) loss on sale-leaseback transaction and disposal group | — | $(29,883) | | Interest expense, net | $13,196 | $13,935 | | Foreign currency transaction losses, net | $1,504 | $55 | | Other (income) expense, net | $(4,631) | $2,927 | | **Income before income taxes** | **$104,412** | **$139,756** | | Provision for income taxes | $15,384 | $26,596 | | **Net income** | **$89,028** | **$113,160** | | Net income attributable to noncontrolling interest | $3,231 | $237 | | **Net income attributable to ChampionX** | **$85,797** | **$112,923** | | Earnings per share attributable to ChampionX: | | | | Basic | $0.45 | $0.59 | | Diluted | $0.44 | $0.58 | | Weighted-average shares outstanding: | | | | Basic | 191,143 | 190,803 | | Diluted | 193,709 | 193,964 | - Total revenue decreased by **$57.677 million** (6.25%) from $922.141 million in Q1 2024 to **$864.464 million** in Q1 2025[11](index=11&type=chunk) - Net income attributable to ChampionX decreased by **$27.126 million** (24.02%) from $112.923 million in Q1 2024 to **$85.797 million** in Q1 2025[11](index=11&type=chunk) - Diluted Earnings Per Share (EPS) decreased by **$0.14** (24.14%) from $0.58 in Q1 2024 to **$0.44** in Q1 2025[11](index=11&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) This statement presents ChampionX's net income and other comprehensive income (loss) components (in thousands) | (in thousands) | 2025 | 2024 | | :------------- | :--- | :--- | | Net income | $89,028 | $113,160 | | Other comprehensive income (loss), net of tax: | | | | Foreign currency translation adjustments | $9,914 | $(10,078) | | Cash flow hedges | $(2,178) | $3,130 | | Defined pension and other post-retirement benefits adjustments, net | $175 | $(37) | | **Other comprehensive income (loss)** | **$7,911** | **$(6,985)** | | **Comprehensive income** | **$96,939** | **$106,175** | | Less: Comprehensive income attributable to noncontrolling interest | $3,231 | $237 | | **Comprehensive income attributable to ChampionX** | **$93,708** | **$105,938** | - Comprehensive income attributable to ChampionX decreased by **$12.23 million** (11.54%) from $105.938 million in Q1 2024 to **$93.708 million** in Q1 2025[13](index=13&type=chunk) - Foreign currency translation adjustments shifted from a loss of **$10.078 million** in Q1 2024 to an income of **$9.914 million** in Q1 2025[13](index=13&type=chunk) [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement provides a snapshot of ChampionX's assets, liabilities, and equity at specific dates (in thousands, except share data) | (in thousands, except share data) | March 31, 2025 | December 31, 2024 | | :-------------------------------- | :------------- | :---------------- | | **ASSETS** | | | | Cash and cash equivalents | $526,559 | $507,681 | | Receivables, net | $417,639 | $466,782 | | Inventories, net | $497,183 | $496,831 | | Assets held for sale | $241,791 | $14,001 | | Prepaid expenses and other current assets | $85,617 | $78,602 | | **Total current assets** | **$1,768,789** | **$1,563,897** | | Property, plant, and equipment, net | $729,931 | $755,422 | | Goodwill | $619,505 | $718,944 | | Intangible assets, net | $247,907 | $258,614 | | Operating lease right-of-use assets | $60,995 | $100,427 | | Other non-current assets | $73,263 | $72,948 | | **Total assets** | **$3,500,390** | **$3,470,252** | | **LIABILITIES AND EQUITY** | | | | Current portion of long-term debt | $6,203 | $6,203 | | Accounts payable | $498,335 | $455,531 | | Accrued compensation and employee benefits | $64,351 | $113,907 | | Current portion of operating lease liabilities | $15,511 | $16,794 | | Liabilities held for sale | $61,415 | — | | Accrued expenses and other current liabilities | $139,081 | $193,437 | | **Total current liabilities** | **$784,896** | **$785,872** | | Long-term debt | $590,746 | $591,453 | | Deferred income taxes | $51,907 | $62,373 | | Operating lease liabilities | $42,424 | $81,340 | | Other long-term liabilities | $125,723 | $118,036 | | **Total liabilities** | **$1,595,696** | **$1,639,074** | | **Total equity** | **$1,904,694** | **$1,831,178** | | **Total liabilities and equity** | **$3,500,390** | **$3,470,252** | - Total assets increased by **$30.138 million** (0.87%) from $3,470.252 million at December 31, 2024, to **$3,500.390 million** at March 31, 2025[15](index=15&type=chunk) - Assets held for sale significantly increased from **$14.001 million** at December 31, 2024, to **$241.791 million** at March 31, 2025, primarily due to the reclassification of US Synthetic Corporation assets[15](index=15&type=chunk)[43](index=43&type=chunk) - Total equity increased by **$73.516 million** (4.01%) from $1,831.178 million at December 31, 2024, to **$1,904.694 million** at March 31, 2025[15](index=15&type=chunk) [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This statement outlines changes in ChampionX's equity, including net income, dividends, and stock transactions (in thousands) | (in thousands) | Dec 31, 2024 | Net Income | Other Comp. Income | Stock-based Comp. | Stock Options Exercised | Taxes withheld on issuance of stock-based awards | Dividends Declared | Cumulative Translation Adjustments and Other | Mar 31, 2025 | | :------------- | :----------- | :--------- | :----------------- | :---------------- | :---------------------- | :--------------------------------------------- | :----------------- | :------------------------------------------- | :----------- | | Total | $1,831,178 | $89,028 | $7,911 | $6,721 | $345 | $(12,497) | $(18,330) | $338 | $1,904,694 | | (in thousands) | Dec 31, 2023 | Net Income | Other Comp. Loss | Stock-based Comp. | Stock Options Exercised | Taxes withheld on issuance of stock-based awards | Dividends Declared | Repurchase and Cancellation of Common Stock | Cumulative Translation Adjustments | Mar 31, 2024 | | :------------- | :----------- | :--------- | :----------------- | :---------------- | :---------------------- | :--------------------------------------------- | :----------------- | :------------------------------------------ | :--------------------------------- | :----------- | | Total | $1,661,031 | $113,160 | $(6,985) | $6,173 | $917 | $(11,821) | $(17,967) | $(49,399) | $65 | $1,695,174 | - Total equity increased by **$73.516 million** from December 31, 2024, to March 31, 2025, primarily driven by net income and other comprehensive income, partially offset by dividends and taxes withheld on stock-based awards[16](index=16&type=chunk) - In Q1 2024, the company repurchased and canceled **$49.399 million** of common stock, an activity not present in Q1 2025[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement summarizes ChampionX's cash inflows and outflows from operating, investing, and financing activities (in thousands) | (in thousands) | 2025 | 2024 | | :------------------------------------------ | :--- | :--- | | **Cash flows from operating activities:** | | | | Net cash flows provided by operating activities | $66,802 | $173,508 | | **Cash flows from investing activities:** | | | | Net cash used for investing activities | $(28,246) | $(10,794) | | **Cash flows from financing activities:** | | | | Net cash used for financing activities | $(20,149) | $(64,093) | | Effect of exchange rate changes on cash and cash equivalents | $471 | $(1,161) | | **Net increase in cash and cash equivalents** | **$18,878** | **$97,460** | | Cash and cash equivalents at beginning of period | $507,681 | $288,557 | | **Cash and cash equivalents at end of period** | **$526,559** | **$386,017** | - Net cash provided by operating activities significantly decreased from **$173.508 million** in Q1 2024 to **$66.802 million** in Q1 2025, primarily due to lower net income and increased use of cash for working capital[17](index=17&type=chunk)[133](index=133&type=chunk) - Net cash used for investing activities increased from **$10.794 million** in Q1 2024 to **$28.246 million** in Q1 2025, mainly driven by capital expenditures[17](index=17&type=chunk)[135](index=135&type=chunk) - Net cash used for financing activities decreased from **$64.093 million** in Q1 2024 to **$20.149 million** in Q1 2025, largely due to the absence of common stock repurchases in Q1 2025 compared to **$49.4 million** in Q1 2024[17](index=17&type=chunk)[137](index=137&type=chunk)[138](index=138&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [NOTE 1—BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=11&type=section&id=NOTE%201%E2%80%94BASIS%20OF%20PRESENTATION%20AND%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note describes ChampionX Corporation's business as a global leader in chemistry solutions, artificial lift systems, and engineered equipment for oil and gas production. It details the pending merger agreement with Schlumberger Limited (SLB), where ChampionX will become an indirect wholly-owned subsidiary of SLB, with ChampionX shareholders receiving 0.735 shares of SLB Common Stock per share. The note also outlines the basis of presentation for the unaudited financial statements, significant accounting policies, and recently issued accounting standards - ChampionX is a global leader in chemistry solutions, artificial lift systems, and highly engineered equipment and technologies that aid in safe, efficient, and sustainable oil and gas drilling and production worldwide[19](index=19&type=chunk) - On April 2, 2024, ChampionX entered into a Merger Agreement with Schlumberger Limited (SLB), under which ChampionX will merge into SLB, surviving as an indirect wholly-owned subsidiary[21](index=21&type=chunk) - At the effective time of the Merger, each share of ChampionX common stock will be converted into the right to receive **0.735 shares of SLB Common Stock**[22](index=22&type=chunk) - The Merger Agreement includes termination rights, under which SLB would be required to pay ChampionX a termination fee of **$326.6 million** under specified circumstances[23](index=23&type=chunk) - During the three months ended March 31, 2025, ChampionX recorded **$10.2 million** in third-party legal and professional fees related to the pending Merger, reflected in selling, general and administrative expense[24](index=24&type=chunk) - New accounting standards include ASU 2024-03 (Disaggregation of Income Statement Expenses) effective after December 15, 2026, and ASU 2023-09 (Improvements to Income Tax Disclosure) effective after December 15, 2024[29](index=29&type=chunk)[30](index=30&type=chunk) [NOTE 2—SEGMENT INFORMATION](index=13&type=section&id=NOTE%202%E2%80%94SEGMENT%20INFORMATION) This note provides detailed financial information for ChampionX's four reportable segments: Production Chemical Technologies, Production & Automation Technologies, Drilling Technologies, and Reservoir Chemical Technologies. It presents segment revenue, operating profit, assets, capital expenditures, and depreciation & amortization for the three months ended March 31, 2025, and 2024, along with geographic revenue distribution - ChampionX operates through four reportable segments: Production Chemical Technologies, Production & Automation Technologies, Drilling Technologies, and Reservoir Chemical Technologies[31](index=31&type=chunk)[32](index=32&type=chunk) Segment Revenue and Operating Profit (Three Months Ended March 31) | (in thousands) | 2025 Revenue | 2024 Revenue | 2025 Operating Profit | 2024 Operating Profit | | :-------------------------------- | :----------- | :----------- | :-------------------- | :-------------------- | | Production Chemical Technologies | $523,390 | $590,108 | $82,172 | $87,832 | | Production & Automation Technologies | $264,377 | $252,614 | $37,554 | $28,470 | | Drilling Technologies | $50,530 | $55,206 | $8,174 | $44,402 | | Reservoir Chemical Technologies | $26,926 | $24,705 | $5,529 | $3,746 | | **Total Reportable Segments** | **$865,223** | **$922,633** | **$133,429** | **$164,450** | - Production Chemical Technologies revenue decreased by **$66.718 million** (11.31%) year-over-year, while its operating profit decreased by **$5.66 million** (6.44%) year-over-year[33](index=33&type=chunk) - Production & Automation Technologies revenue increased by **$11.763 million** (4.66%) year-over-year, and its operating profit increased by **$9.084 million** (31.91%) year-over-year[33](index=33&type=chunk) - Drilling Technologies revenue decreased by **$4.676 million** (8.47%) year-over-year, and its operating profit significantly decreased by **$36.228 million** (81.59%) year-over-year[33](index=33&type=chunk) - Reservoir Chemical Technologies revenue increased by **$2.221 million** (8.99%) year-over-year, and its operating profit increased by **$1.783 million** (47.60%) year-over-year[33](index=33&type=chunk) Capital Expenditures (Three Months Ended March 31) | (in thousands) | 2025 | 2024 | | :------------- | :--- | :--- | | Chemical Technologies | $5,539 | $14,734 | | Production & Automation Technologies | $24,099 | $16,291 | | Drilling Technologies | $1,589 | $795 | | Corporate and other | $23 | $92 | | **Total** | **$31,250** | **$31,912** | [NOTE 3—ASSETS HELD FOR SALE](index=16&type=section&id=NOTE%203%E2%80%94ASSETS%20HELD%20FOR%20SALE) This note details the classification of US Synthetic Corporation (Drilling Technologies segment) as assets held for sale following a definitive agreement to sell all equity interests to a controlled affiliate of LongRange Capital, L.P. The sale is for approximately $300 million cash, subject to customary closing conditions, including the closing of the merger with SLB. As of March 31, 2025, US Synthetic's assets held for sale totaled $226.6 million and liabilities held for sale totaled $61.4 million - On February 24, 2025, ChampionX entered into a definitive agreement to sell all equity interests in US Synthetic Corporation (the only operating entity in its Drilling Technologies segment) to a controlled affiliate of LongRange Capital, L.P. for approximately **$300 million** cash[41](index=41&type=chunk)[42](index=42&type=chunk) - The USS Divestiture is subject to customary closing conditions, including regulatory approvals and the closing of the Merger with SLB[43](index=43&type=chunk) US Synthetic Corporation Assets and Liabilities Held for Sale (as of March 31, 2025) | (in thousands) | March 31, 2025 | | :------------- | :------------- | | **Total assets held for sale** | **$226,584** | | Receivables, net | $38,937 | | Inventories, net | $22,310 | | Property, plant, and equipment, net | $18,590 | | Goodwill | $101,136 | | Intangible assets, net | $3,600 | | Operating lease right-of-use assets | $37,075 | | **Total liabilities held for sale** | **$61,415** | | Accounts payable | $19,399 | | Accrued compensation and employee benefits | $3,729 | | Operating lease liabilities | $38,005 | - The results of US Synthetic will continue to be reported in continuing operations in the condensed consolidated income statement until the sale is completed[43](index=43&type=chunk) [NOTE 4—REVENUE](index=17&type=section&id=NOTE%204%E2%80%94REVENUE) This note details ChampionX's revenue sources, primarily from product sales, with service and lease revenue also contributing. It explains the use of joint ventures and third-party distributors for sales and marketing, and how consideration is recorded. The note also provides a disaggregation of revenue by geographic region and segment for the three months ended March 31, 2025, and 2024, and contract balances - Revenue is primarily generated from product sales, supplemented by service revenue (e.g., installation, repair, chemical management) and lease revenue from rental production equipment[46](index=46&type=chunk) - The company utilizes joint ventures and independent third-party distributors and sales agents, recording consideration received on a net basis within product revenue[47](index=47&type=chunk) Revenue Disaggregated by Geography and Segment (Three Months Ended March 31, 2025) | (in thousands) | Production Chemical Technologies | Production & Automation Technologies | Drilling Technologies | Reservoir Chemical Technologies | Corporate and other | Total | | :------------- | :------------------------------- | :----------------------------------- | :-------------------- | :------------------------------ | :------------------ | :---- | | United States | $248,289 | $193,542 | $40,581 | $15,907 | $0 | $498,319 | | Latin America | $57,540 | $8,649 | $0 | $2,754 | $0 | $68,943 | | Middle East & Africa | $73,987 | $21,314 | $1,541 | $5,763 | $(759) | $101,846 | | Canada | $77,282 | $18,376 | $3,923 | $636 | $0 | $100,217 | | Europe | $41,105 | $6,113 | $2,796 | $1,311 | $0 | $51,325 | | Asia-Pacific | $13,177 | $2,743 | $1,663 | $552 | $0 | $18,135 | | Australia | $12,010 | $13,640 | $26 | $3 | $0 | $25,679 | | **Total revenue** | **$523,390** | **$264,377** | **$50,530** | **$26,926** | **$(759)** | **$864,464** | Revenue Disaggregated by Geography and Segment (Three Months Ended March 31, 2024) | (in thousands) | Production Chemical Technologies | Production & Automation Technologies | Drilling Technologies | Reservoir Chemical Technologies | Corporate and other | Total | | :------------- | :------------------------------- | :----------------------------------- | :-------------------- | :------------------------------ | :------------------ | :---- | | United States | $242,484 | $195,667 | $43,620 | $13,845 | $0 | $495,616 | | Latin America | $122,313 | $4,325 | $97 | $3,284 | $0 | $130,019 | | Middle East & Africa | $79,367 | $14,662 | $2,248 | $5,563 | $(492) | $101,348 | | Canada | $77,880 | $18,315 | $4,323 | $514 | $0 | $101,032 | | Europe | $47,653 | $4,939 | $4,387 | $1,137 | $0 | $58,116 | | Asia-Pacific | $15,325 | $2,339 | $531 | $362 | $0 | $18,557 | | Australia | $5,086 | $12,367 | $0 | $0 | $0 | $17,453 | | **Total revenue** | **$590,108** | **$252,614** | **$55,206** | **$24,705** | **$(492)** | **$922,141** | - Total revenue decreased by **$57.677 million** (6.25%) year-over-year, with notable declines in Latin America (from **$130.019 million** to **$68.943 million**) and Europe (from **$58.116 million** to **$51.325 million**)[48](index=48&type=chunk) [NOTE 5—INTANGIBLE ASSETS AND GOODWILL](index=18&type=section&id=NOTE%205%E2%80%94INTANGIBLE%20ASSETS%20AND%20GOODWILL) This note provides a breakdown of ChampionX's definite- and indefinite-lived intangible assets and goodwill. As of March 31, 2025, total intangible assets were $247.907 million, and goodwill was $619.505 million. The note highlights the reclassification of US Synthetic's intangible assets and goodwill to assets held for sale, impacting the reported amounts Intangible Assets (as of March 31, 2025 and December 31, 2024) | (in thousands) | March 31, 2025 Net Carrying Amount | December 31, 2024 Net Carrying Amount | | :------------- | :--------------------------------- | :------------------------------------ | | Customer relationships | $142,925 | $147,062 | | Unpatented technologies | $71,278 | $76,349 | | Software | $3,421 | $0 | | Trademarks (definite-lived) | $18,736 | $19,240 | | Patents | $5,165 | $5,399 | | Other | $5,182 | $5,764 | | Trademarks (indefinite-lived) | $0 | $3,600 | | In-process research and development | $1,200 | $1,200 | | **Total** | **$247,907** | **$258,614** | Goodwill by Reportable Segment (as of March 31, 2025 and December 31, 2024) | (in thousands) | December 31, 2024 | Reclassified to assets held for sale | Foreign currency translation | March 31, 2025 | | :------------- | :---------------- | :--------------------------------- | :--------------------------- | :------------- | | Production Chemical Technologies | $347,560 | $0 | $(21) | $347,539 | | Production & Automation Technologies | $270,248 | $0 | $1,718 | $271,966 | | Drilling Technologies | $101,136 | $(101,136) | $0 | $0 | | Reservoir Chemical Technologies | $0 | $0 | $0 | $0 | | **Total** | **$718,944** | **$(101,136)** | **$1,697** | **$619,505** | - Goodwill decreased by **$99.439 million** from December 31, 2024, to March 31, 2025, primarily due to the reclassification of **$101.136 million** of Drilling Technologies goodwill to assets held for sale[51](index=51&type=chunk) [NOTE 6—DEBT](index=19&type=section&id=NOTE%206%E2%80%94DEBT) This note details ChampionX's long-term debt, primarily consisting of the 2022 Term Loan Facility. As of March 31, 2025, total long-term debt was $596.949 million, with a current portion of $6.203 million. The company has a $700.0 million 2022 Revolving Credit Facility, with no amounts outstanding as of March 31, 2025. The note also mentions the repricing of term loans in September 2023 and an interest rate swap to hedge variable interest rate exposure Long-term Debt (as of March 31, 2025 and December 31, 2024) | (in thousands) | March 31, 2025 | December 31, 2024 | | :------------- | :------------- | :---------------- | | 2022 Term Loan Facility | $611,007 | $612,559 | | Net unamortized discounts and issuance costs | $(14,058) | $(14,903) | | **Total long-term debt** | **$596,949** | **$597,656** | | Current portion of long-term debt | $(6,203) | $(6,203) | | **Long-term debt, less current portion** | **$590,746** | **$591,453** | - The 2022 Term Loan Facility has a principal amount of **$611.007 million** as of March 31, 2025, matures on June 7, 2029, and is subject to mandatory quarterly amortization payments of **1% per annum**[53](index=53&type=chunk)[55](index=55&type=chunk) - The 2022 Revolving Credit Facility has an aggregate principal amount of **$700.0 million**, matures on June 7, 2027, and had no amounts outstanding as of March 31, 2025[54](index=54&type=chunk)[55](index=55&type=chunk) - ChampionX was in compliance with all debt covenants as of March 31, 2025[55](index=55&type=chunk) - A five-year amortizing floating-to-fixed interest rate swap was executed on June 29, 2022, to hedge exposure to increases in variable interest rates on the 2022 Term Loan Facility, based on a **$300.0 million** notional amount for the first three years[57](index=57&type=chunk) [NOTE 7—COMMITMENTS AND CONTINGENCIES](index=20&type=section&id=NOTE%207%E2%80%94COMMITMENTS%20AND%20CONTINGENCIES) This note outlines ChampionX's various claims and contingencies, including workers' compensation, general liability, environmental matters, and lawsuits. The company accrues liabilities for probable and reasonably estimable losses. As of March 31, 2025, outstanding letters of credit, surety bonds, and guarantees totaled $76.6 million. Environmental liability accruals were $5.7 million, with a specific $1.2 million accrued for remediation at the Norris Sucker Rods plant in Tulsa, Oklahoma - ChampionX is subject to various claims and contingencies, including legal actions, environmental matters, and product liability, accruing liabilities when a contingent loss is probable and reasonably estimable[58](index=58&type=chunk)[61](index=61&type=chunk) - As of March 31, 2025, outstanding letters of credit, surety bonds, and guarantees totaled **$76.6 million**, primarily maintained as security for insurance, warranty, and other performance obligations[60](index=60&type=chunk) - Environmental liability accruals were **$5.7 million** as of March 31, 2025, consistent with December 31, 2024[62](index=62&type=chunk) - A specific liability of approximately **$1.2 million** is accrued for groundwater remediation at the Norris Sucker Rods plant in Tulsa, Oklahoma, with ongoing discussions with the Oklahoma Department of Environmental Quality (ODEQ) to finalize a consent order[63](index=63&type=chunk) [NOTE 8—STOCKHOLDERS' EQUITY](index=21&type=section&id=NOTE%208%E2%80%94STOCKHOLDERS'%20EQUITY) This note details ChampionX's dividend declarations and share repurchase program. A quarterly cash dividend of $0.095 per share was declared on February 19, 2025, resulting in an $18.7 million dividend payable. The Board authorized an increase in the share repurchase program to $1.5 billion on January 31, 2024, but no shares were repurchased during the three months ended March 31, 2025 - A cash dividend of **$0.095 per share** was declared on February 19, 2025, payable on April 25, 2025, resulting in an **$18.7 million** dividend payable as of March 31, 2025[64](index=64&type=chunk) - The Board authorized an increase in the share repurchase program to **$1.5 billion** on January 31, 2024[65](index=65&type=chunk) - No shares were repurchased under the share repurchase program during the three months ended March 31, 2025[65](index=65&type=chunk) [NOTE 9—EARNINGS PER SHARE](index=21&type=section&id=NOTE%209%E2%80%94EARNINGS%20PER%20SHARE) This note provides the reconciliation of shares used for basic and diluted earnings per share calculations. For the three months ended March 31, 2025, basic EPS was $0.45 and diluted EPS was $0.44, based on 191.143 million basic weighted-average shares and 193.709 million diluted shares Earnings Per Share Reconciliation (Three Months Ended March 31) | (in thousands, except per share data) | 2025 | 2024 | | :---------------------------------- | :--- | :--- | | Net income attributable to ChampionX | $85,797 | $112,923 | | Weighted-average number of shares outstanding | 191,143 | 190,803 | | Dilutive effect of stock-based compensation | 2,566 | 3,161 | | **Total shares and dilutive securities** | **193,709** | **193,964** | | **Earnings per share attributable to ChampionX:** | | | | Basic | $0.45 | $0.59 | | Diluted | $0.44 | $0.58 | - Diluted EPS decreased from **$0.58** in Q1 2024 to **$0.44** in Q1 2025[66](index=66&type=chunk) - Approximately **0.1 million shares** in 2025 and **0.5 million shares** in 2024 were excluded from diluted EPS calculation due to their anti-dilutive impact[66](index=66&type=chunk) [NOTE 10—ACQUISITIONS, DIVESTITURES AND SALE-LEASEBACK](index=21&type=section&id=NOTE%2010%E2%80%94ACQUISITIONS,%20DIVESTITURES%20AND%20SALE-LEASEBACK) This note details ChampionX's acquisition and divestiture activities. In 2024, the company completed three acquisitions: OTS Consulting Services LLP ($8.7 million), Artificial Lift Performance Limited ($13.4 million), and RMSpumptools Limited ($106.1 million), all enhancing the Production & Automation Technologies segment. For divestitures, the CT Russia Business was classified as held for sale in 2022 due to deteriorating conditions, resulting in a $13.0 million impairment in Q1 2023. The note also covers a sale-leaseback transaction in March 2024 for three buildings in Orem, Utah, generating a $29.8 million net gain - In 2024, ChampionX completed three acquisitions for its Production & Automation Technologies segment: OTS Consulting Services LLP (**$8.7 million**), Artificial Lift Performance Limited (**$13.4 million**), and RMSpumptools Limited (**$106.1 million**)[67](index=67&type=chunk)[68](index=68&type=chunk)[70](index=70&type=chunk) - The acquisition of RMSpumptools Limited on July 8, 2024, aimed to create growth opportunities in the artificial lift business internationally, recording **$53.0 million** in definite-lived intangible assets and **$45.0 million** in goodwill[70](index=70&type=chunk)[72](index=72&type=chunk) - The CT Russia Business (Production Chemical Technologies segment) was classified as held for sale in Q2 2022 due to deteriorating business conditions and sanctions, leading to a **$13.0 million** pre-tax impairment expense recorded during the three months ended March 31, 2023[73](index=73&type=chunk)[75](index=75&type=chunk) - A sale-leaseback agreement for three buildings in Orem, Utah, was completed on March 29, 2024, for **$45.5 million**, resulting in a **$29.8 million** net gain on sale[76](index=76&type=chunk) [NOTE 11—FAIR VALUE MEASUREMENTS](index=23&type=section&id=NOTE%2011%E2%80%94FAIR%20VALUE%20MEASUREMENTS) This note defines fair value and outlines the three-level hierarchy for inputs used in fair value measurements. It presents the carrying amount and estimated fair value for assets and liabilities measured on a recurring basis, including foreign currency forward contracts and interest rate swaps, which are classified as Level 2 inputs. The fair value of the term loan facility is also based on Level 2 quoted market prices - Fair value is defined as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date[77](index=77&type=chunk) - The fair value hierarchy consists of three levels: Level 1 (quoted prices in active markets), Level 2 (observable inputs other than quoted prices), and Level 3 (unobservable inputs)[77](index=77&type=chunk)[78](index=78&type=chunk) Fair Value of Assets and Liabilities (as of March 31, 2025 and December 31, 2024) | (in thousands) | Measurement Level | March 31, 2025 | December 31, 2024 | | :------------- | :---------------- | :------------- | :---------------- | | **Assets** | | | | | Foreign currency forward contracts | Level 2 | $6,983 | $10,078 | | Interest rate swaps | Level 2 | $2,330 | $4,199 | | **Total Assets** | | **$9,313** | **$14,277** | | **Liabilities** | | | | | Foreign currency forward contracts | Level 2 | $4,265 | $13,430 | | Interest rate swaps | Level 2 | $0 | $13 | | **Total Liabilities** | | **$4,265** | **$13,443** | Fair Value of Long-term Debt (as of March 31, 2025 and December 31, 2024) | (in thousands) | Carrying Amount (March 31, 2025) | Fair Value (March 31, 2025) | Carrying Amount (December 31, 2024) | Fair Value (December 31, 2024) | | :------------- | :------------------------------- | :-------------------------- | :---------------------------------- | :----------------------------- | | 2022 Term Loan Facility | $611,007 | $612,535 | $612,559 | $613,324 | [NOTE 12—DERIVATIVES AND HEDGING TRANSACTIONS](index=24&type=section&id=NOTE%2012%E2%80%94DERIVATIVES%20AND%20HEDGING%20TRANSACTIONS) This note describes ChampionX's use of derivative financial instruments, specifically foreign currency forward contracts and floating-to-fixed interest rate swap agreements, to manage foreign currency exchange rate and interest rate risks. These derivatives are not for speculative purposes. Cash flow hedges are used for forecasted foreign currency transactions and debt interest rates, with changes in fair value recognized in AOCI. Derivatives not designated as hedging instruments are used to offset foreign currency denominated assets and liabilities, with changes recognized immediately in earnings - ChampionX uses foreign currency forward contracts to manage foreign currency exchange rate risks and floating-to-fixed interest rate swap agreements as cash flow hedges to mitigate interest rate risk on certain debt[81](index=81&type=chunk) - Derivative contracts are recorded as assets and liabilities on the balance sheet at fair value; the company does not hold derivative financial instruments of a speculative nature or for trading purposes[81](index=81&type=chunk) - For cash flow hedges, changes in fair value attributable to changes in spot exchange rates are recognized in accumulated other comprehensive income (AOCI) and reclassified into earnings when the hedged transaction affects earnings[81](index=81&type=chunk)[86](index=86&type=chunk) - Derivatives not designated as hedging instruments, used to offset exposure to foreign currency denominated assets and liabilities, have changes in value recognized immediately in earnings[88](index=88&type=chunk) Effect of Derivative Instruments on Income (Three Months Ended March 31) | (in thousands) | 2025 | 2024 | | :------------- | :--- | :--- | | Loss (gain) reclassified from AOCI to income on cash flow hedges: | | | | Cost of goods and services | $(899) | $(438) | | Interest expense | $(946) | $(1,714) | | Loss (gain) on derivatives not designated as hedging instruments: | | | | Other (income) expense, net | $(784) | $953 | | **Total loss (gain) of derivative instruments** | **$(2,629)** | **$(1,199)** | [NOTE 13—INVENTORIES](index=27&type=section&id=NOTE%2013%E2%80%94INVENTORIES) This note provides a breakdown of ChampionX's inventories, which include raw materials, work in progress, and finished goods. As of March 31, 2025, net inventories totaled $497.183 million, slightly up from $496.831 million at December 31, 2024. The inventory balance includes a reserve for obsolescence and LIFO adjustments Inventories (as of March 31, 2025 and December 31, 2024) | (in thousands) | March 31, 2025 | December 31, 2024 | | :------------- | :------------- | :---------------- | | Raw materials | $117,647 | $131,605 | | Work in progress | $9,912 | $24,431 | | Finished goods | $443,793 | $420,282 | | Subtotal | $571,352 | $576,318 | | Inventory reserve | $(26,976) | $(27,997) | | LIFO adjustments | $(47,193) | $(51,490) | | **Inventories, net** | **$497,183** | **$496,831** | - Finished goods inventory increased by **$23.511 million** from December 31, 2024, to March 31, 2025[90](index=90&type=chunk) - Raw materials and work in progress decreased, while finished goods increased, contributing to a slight overall net inventory increase[90](index=90&type=chunk) [NOTE 14—ACCOUNTS RECEIVABLE FACILITIES](index=27&type=section&id=NOTE%2014%E2%80%94ACCOUNTS%20RECEIVABLE%20FACILITIES) This note describes ChampionX's uncommitted accounts receivable purchase agreements with JPMorgan Chase Bank, N.A. (JPM Accounts Receivable Facility) and HSBC Bank USA, National Association (HSBC Accounts Receivable Facility). These facilities allow the company to sell eligible receivables, with maximum outstanding amounts of $160.0 million for JPM and CAD $40.0 million (approx. $30.0 million) for HSBC. Transfers are accounted for as sales, with the purchaser assuming credit risk. Losses on sale of receivables were $1.1 million for JPM and $0.3 million for HSBC in Q1 2025 - ChampionX utilizes uncommitted accounts receivable purchase agreements (JPM and HSBC Accounts Receivable Facilities) to sell eligible receivables[91](index=91&type=chunk)[92](index=92&type=chunk) - The maximum amount of receivables that may be sold and remain unpaid is **$160.0 million** for the JPM facility and **CAD $40.0 million** (approximately **$30.0 million**) for the HSBC facility[91](index=91&type=chunk)[92](index=92&type=chunk) - Accounts receivable sold in Q1 2025 were **$120.4 million** for JPM and **$42.9 million** for HSBC[93](index=93&type=chunk) - Losses on the sale of accounts receivable for Q1 2025 were **$1.1 million** under the JPM facility and **$0.3 million** under the HSBC facility[94](index=94&type=chunk) - Transfers are accounted for as sales, resulting in derecognition of receivables from the balance sheet, with the purchaser assuming credit risk[95](index=95&type=chunk) [NOTE 15—SUPPLY CHAIN FINANCE](index=27&type=section&id=NOTE%2015%E2%80%94SUPPLY%20CHAIN%20FINANCE) This note states that ChampionX utilizes a supply chain finance program, allowing suppliers to obtain financing by selling their receivables to a third party earlier in the payment cycle. As of March 31, 2025, approximately $38.3 million was outstanding under this program, recorded in accounts payable - ChampionX uses a supply chain finance program that enables suppliers to work with a third party to provide financing by purchasing their receivables earlier in the payment cycle[96](index=96&type=chunk) - As of March 31, 2025, approximately **$38.3 million** was outstanding under the program, which is included in accounts payable on the condensed consolidated balance sheet[96](index=96&type=chunk) [NOTE 16—CASH FLOW INFORMATION](index=28&type=section&id=NOTE%2016%E2%80%94CASH%20FLOW%20INFORMATION) This note provides additional cash flow details, including the leased asset program within the Production & Automation Technologies segment, where inventory is transferred to property, plant, and equipment upon customer contract. In Q1 2025, $28.9 million of inventory was transferred. It also mentions the Argentina Blue Chip Swap transactions from Q1 2024, which resulted in a $4.1 million pre-tax loss due to currency controls, but no such swaps occurred in Q1 2025 - The electrical submersible pumping leased asset program, reported in the Production & Automation Technologies segment, involves transferring assets from inventory to property, plant, and equipment when a customer contracts for an asset[97](index=97&type=chunk) - During the three months ended March 31, 2025, **$28.9 million** of inventory was transferred into property, plant, and equipment for the leased asset program, compared to **$29.5 million** in Q1 2024[97](index=97&type=chunk) - In Q1 2024, Argentina Blue Chip Swap transactions resulted in a **$4.1 million** pre-tax loss due to currency controls and the use of a parallel U.S. dollar exchange rate[99](index=99&type=chunk) - No Blue Chip Swaps were entered into during the first quarter of 2025[99](index=99&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=29&type=section&id=ITEM%202.%20MANAGEMENT'S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's analysis of ChampionX's financial performance, condition, and significant trends. It covers the business environment, market conditions, the pending merger with SLB, and a detailed analysis of consolidated and segment results of operations, as well as capital resources and liquidity. The company is a global leader in oil and gas solutions, heavily influenced by global oil production and investment levels [Executive Overview and Business Outlook](index=29&type=section&id=Executive%20Overview%20and%20Business%20Outlook) This overview reiterates ChampionX's core business in oil and gas solutions and its four segments. it discusses the business environment, highlighting dependence on global oil production and prices, which have seen a slight decline. The section also addresses the impact of tariffs and inflation, and provides an update on the pending merger with SLB, including key conditions and approvals - ChampionX is a global leader in chemistry solutions, artificial lift systems, and highly engineered equipment and technologies that support oil and gas production, transportation, and real-time emissions monitoring[102](index=102&type=chunk) - The company's business is substantially dependent on global oil production levels and new investment activity in the oil and gas and midstream sectors, influenced by crude oil and natural gas prices, rig count, and well completions[103](index=103&type=chunk) - Oil prices decreased slightly from approximately **$70 per barrel** at December 31, 2024, to **$68 per barrel** at March 31, 2025, and are expected to remain under pressure for the remainder of 2025 due to announced OPEC+ production increases[104](index=104&type=chunk) - ChampionX actively monitors tariffs and inflation, aiming to offset increased material input costs, labor rates, and transportation costs through customer selling price increases, supply chain adjustments, and productivity programs[105](index=105&type=chunk)[107](index=107&type=chunk) - The pending merger with SLB, announced April 2, 2024, is progressing, with ChampionX stockholders adopting the Merger Agreement on June 18, 2024, and regulatory clearances ongoing[108](index=108&type=chunk)[110](index=110&type=chunk) [Consolidated Results of Operations](index=31&type=section&id=Consolidated%20Results%20of%20Operations) This section analyzes ChampionX's consolidated financial performance for the three months ended March 31, 2025, compared to December 31, 2024. Total revenue decreased by 5% sequentially to $864.464 million, primarily due to a slowdown in market activity. Gross profit decreased by 7%, and net income attributable to ChampionX increased by $3.031 million, despite lower revenue, largely due to a significant decrease in the provision for income taxes (from 28.1% to 14.7% ETR) driven by discrete tax benefits Consolidated Results of Operations (Three Months Ended March 31, 2025 vs. December 31, 2024) | (in thousands) | March 31, 2025 | December 31, 2024 | Variance ($) | | :------------- | :------------- | :---------------- | :----------- | | Revenue | $864,464 | $912,037 | $(47,573) | | Cost of goods and services | $572,938 | $600,154 | $(27,216) | | Gross profit | $291,526 | $311,883 | $(20,357) | | Selling, general and administrative expense | $177,045 | $184,722 | $(7,677) | | Interest expense, net | $13,196 | $12,375 | $821 | | Foreign currency transaction losses (gains), net | $1,504 | $1,697 | $(193) | | Other (income) expense, net | $(4,631) | $(5,026) | $395 | | Income before income taxes | $104,412 | $118,115 | $(13,703) | | Provision for income taxes | $15,384 | $33,204 | $(17,820) | | Net income | $89,028 | $84,911 | $4,117 | | Net income attributable to ChampionX | $85,797 | $82,766 | $3,031 | - Revenue decreased by **$47.6 million** (5%) sequentially, primarily due to a slowdown in market activity[113](index=113&type=chunk) - Gross profit decreased by **$20.4 million** (7%) sequentially, mainly due to decreased volumes[114](index=114&type=chunk) - Selling, general and administrative expense decreased by **$7.7 million** (4%) sequentially, primarily due to a reduction in third-party legal and professional fees related to the Merger transaction with SLB[114](index=114&type=chunk) - The effective tax rate decreased significantly from **28.1%** in Q4 2024 to **14.7%** in Q1 2025, primarily due to discrete tax benefits related to stock compensation and changes in uncertain tax positions[116](index=116&type=chunk) [Segment Results of Operations](index=32&type=section&id=Segment%20Results%20of%20Operations) This section details the sequential performance of ChampionX's four segments for Q1 2025 compared to Q4 2024. Production Chemical Technologies saw an 8% revenue decrease and a 21% operating profit decrease due to lower international sales. Production & Automation Technologies revenue decreased by 2%, with operating profit remaining flat. Drilling Technologies experienced a 3% revenue decrease and a 24% operating profit decrease due to lower sales volumes, bonuses, and increased production costs. Reservoir Chemical Technologies was the only segment to grow, with revenue up 23% and operating profit up 141%, driven by higher sales volumes and favorable product/regional mix Segment Revenue and Operating Profit (Three Months Ended March 31, 2025 vs. December 31, 2024) | (in thousands) | March 31, 2025 Revenue | December 31, 2024 Revenue | Revenue Variance ($) | March 31, 2025 Operating Profit | December 31, 2024 Operating Profit | Operating Profit Variance ($) | | :------------- | :--------------------- | :------------------------ | :------------------- | :------------------------------ | :-------------------------------- | :---------------------------- | | Production Chemical Technologies | $523,390 | $569,662 | $(46,272) | $82,172 | $103,567 | $(21,395) | | Production & Automation Technologies | $264,377 | $269,568 | $(5,191) | $37,554 | $39,027 | $(1,473) | | Drilling Technologies | $50,530 | $51,942 | $(1,412) | $8,174 | $10,703 | $(2,529) | | Reservoir Chemical Technologies | $26,926 | $21,937 | $4,989 | $5,529 | $2,294 | $3,235 | | **Total Reportable Segments** | **$865,223** | **$913,109** | **$(47,886)** | **$133,429** | **$155,591** | **$(22,162)** | - Production Chemical Technologies revenue decreased by **$46.3 million** (8%) sequentially, mainly due to lower international sales volumes, leading to a **$21.4 million** (21%) decrease in operating profit[118](index=118&type=chunk) - Production & Automation Technologies revenue decreased by **$5.2 million** (2%) sequentially, primarily due to seasonally lower international sales volumes, with operating profit remaining flat[119](index=119&type=chunk)[120](index=120&type=chunk) - Drilling Technologies revenue decreased by **$1.4 million** (3%) sequentially, and operating profit decreased by **$2.5 million** (24%) due to lower sales volume in the inserts product line, one-time bonuses, and increased production costs[121](index=121&type=chunk) - Reservoir Chemical Technologies revenue increased by **$5.0 million** (23%) sequentially, and operating profit increased by **$3.2 million** (141%) due to higher sales volumes in the U.S. and internationally, and favorable product and regional mix[122](index=122&type=chunk) [Capital Resources and Liquidity](index=33&type=section&id=Capital%20Resources%20and%20Liquidity) This section discusses ChampionX's capital resources and liquidity, primarily driven by operating activities. As of March 31, 2025, the company had $526.6 million in cash and cash equivalents and total liquidity of $1.2 billion, including $673.6 million available under its $700.0 million revolving credit facility. Long-term debt stood at $590.7 million. Cash from operating activities decreased significantly in Q1 2025 compared to Q1 2024, while cash used in investing activities increased, and cash used in financing activities decreased due to the absence of common stock repurchases. The company expects to meet future needs through cash from operations and the revolving credit facility - ChampionX's primary source of cash is from operating activities, which is allocated to working capital, investments, acquisitions, share repurchases, dividend payments, and debt repayments[123](index=123&type=chunk) Liquidity Position (as of March 31, 2025) | (in millions) | Amount | | :------------ | :----- | | Cash and cash equivalents | $526.6 | | Available capacity under 2022 Revolving Credit Facility | $673.6 | | **Total liquidity** | **$1,200.2** | - As of March 31, 2025, long-term debt was **$590.7 million**, net of the current portion, consisting of the 2022 Term Loan Facility with a principal amount of **$611.0 million**, and no amounts outstanding on the 2022 Revolving Credit Facility[126](index=126&type=chunk) - Net cash provided by operating activities decreased from **$173.5 million** in Q1 2024 to **$66.8 million** in Q1 2025, primarily due to lower net income and increased use of cash for working capital items[132](index=132&type=chunk)[133](index=133&type=chunk) - Net cash used in investing activities increased from **$10.8 million** in Q1 2024 to **$28.2 million** in Q1 2025, primarily comprised of capital expenditures[132](index=132&type=chunk)[135](index=135&type=chunk) - Net cash used in financing activities decreased from **$64.1 million** in Q1 2024 to **$20.1 million** in Q1 2025, largely due to the absence of common stock repurchases in Q1 2025[132](index=132&type=chunk)[137](index=137&type=chunk)[138](index=138&type=chunk) - Capital spending for 2025 is projected to be approximately **4.0% of revenue**, inclusive of capital investments for electric submersible pump leased assets[130](index=130&type=chunk) Revolving Credit Facility Summary (as of March 31, 2025) | (in millions) | Amount | Debt Outstanding | Letters of Credit | Unused Capacity | Maturity | | :------------ | :----- | :--------------- | :---------------- | :-------------- | :------- | | Five-year revolving credit facility | $700.0 | $0 | $26.4 | $673.6 | June 2027 | - Accounts receivable sold under the JPM facility were **$120.4 million** in Q1 2025, with **$101.5 million** remaining outstanding. Under the HSBC facility, **$42.9 million** were sold, with **$26.9 million** remaining outstanding[142](index=142&type=chunk)[143](index=143&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=35&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section states that ChampionX is exposed to certain market risks from financial instruments in its ordinary course of business. It refers to the Annual Report on Form 10-K for the year ended December 31, 2024, for detailed disclosures, noting that the company's exposure to market risk has not materially changed since that date - ChampionX is exposed to certain market risks arising from the use of financial instruments in the ordinary course of business[144](index=144&type=chunk) - The company's exposure to market risk has not materially changed since December 31, 2024[144](index=144&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=35&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) This section confirms that ChampionX's management, including the principal executive and financial officers, evaluated the effectiveness of its disclosure controls and procedures as of March 31, 2025, and concluded they were effective. It also states that there were no material changes in internal control over financial reporting during the quarter - Management, with the participation of the principal executive officer and principal financial officer, concluded that ChampionX's disclosure controls and procedures were effective as of March 31, 2025[145](index=145&type=chunk) - There were no changes in internal control over financial reporting that occurred during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting[146](index=146&type=chunk) PART II — OTHER INFORMATION This part includes disclosures on legal proceedings, risk factors, equity sales, and other relevant information [ITEM 1. LEGAL PROCEEDINGS](index=37&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) ChampionX is involved in various legal actions incidental to its business. Management believes the ultimate resolution of these matters will not have a material adverse effect on the company's financial position, results of operations, or cash flows. Further details are referenced in Note 7 - ChampionX is involved in various pending or potential legal actions incidental to its business[149](index=149&type=chunk) - Management believes the most probable, ultimate resolution of these matters will not have a material adverse effect on the company's condensed consolidated financial position, results of operations, or cash flows[149](index=149&type=chunk) [ITEM 1A. RISK FACTORS](index=37&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section states that there have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - There have been no material changes from the risk factors previously disclosed in Part I, Item 1A of ChampionX's Annual Report on Form 10-K for the year ended December 31, 2024[150](index=150&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=37&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) ChampionX did not repurchase any equity securities during the first quarter of 2025. The Board authorized an increase in the share repurchase program to $1.5 billion on January 31, 2024, with approximately $996.7 million remaining available under the program as of March 31, 2025 - ChampionX did not repurchase any equity securities registered under Section 12 of the Exchange Act during the first quarter of 2025[151](index=151&type=chunk) - On January 31, 2024, the Board authorized a further increase in the aggregate value of shares that may be repurchased under the Share Repurchase Program to **$1.5 billion**[152](index=152&type=chunk) - As of March 31, 2025, the approximate dollar value of shares that may yet be purchased under the Share Repurchase Program is **$996.7 million**[152](index=152&type=chunk) [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=37&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) This section states that there were no defaults upon senior securities - There were no defaults upon senior securities[153](index=153&type=chunk) [ITEM 4. MINE SAFETY DISCLOSURES](index=37&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This section states that mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable to ChampionX Corporation[154](index=154&type=chunk) [ITEM 5. OTHER INFORMATION](index=37&type=section&id=ITEM%205.%20OTHER%20INFORMATION) This section reports that no directors or officers informed the company of the adoption or termination of Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended March 31, 2025 - During the three months ended March 31, 2025, none of the company's directors or officers informed the company of the adoption or termination of a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement"[155](index=155&type=chunk) [ITEM 6. EXHIBITS](index=38&type=section&id=ITEM%206.%20EXHIBITS) This section lists all exhibits filed with the Form 10-Q, including the Merger Agreement, Equity Purchase Agreement, corporate organizational documents, executive severance plan, and various certifications (CEO, CFO) and XBRL documents - Key exhibits filed include the Agreement and Plan of Merger (dated April 2, 2024), the Equity Purchase Agreement for US Synthetic Corporation (dated February 24, 2025), and certifications from the Chief Executive Officer and Chief Financial Officer[157](index=157&type=chunk) SIGNATURES This section contains the official signatures certifying the accuracy and completeness of the report - The report was duly signed on behalf of ChampionX Corporation by Antoine Marcos, Vice President, Corporate Controller and Chief Accounting Officer, on April 30, 2025[161](index=161&type=chunk)

Group 1: Earnings Performance - ChampionX reported quarterly earnings of $0.50 per share, exceeding the Zacks Consensus Estimate of $0.41 per share, representing an earnings surprise of 21.95% [1] - The company has surpassed consensus EPS estimates three times over the last four quarters [2] - The revenues for the quarter ended March 2025 were $864.46 million, missing the Zacks Consensus Estimate by 0.52%, and down from $922.14 million year-over-year [2] Group 2: Stock Performance and Outlook - ChampionX shares have declined approximately 9.1% since the beginning of the year, compared to a 6% decline in the S&P 500 [3] - The company's earnings outlook is crucial for assessing future stock performance, with current consensus EPS estimates at $0.43 for the coming quarter and $1.74 for the current fiscal year [4][7] - The Zacks Rank for ChampionX is currently 2 (Buy), indicating expectations for the stock to outperform the market in the near future [6] Group 3: Industry Context - The Engineering - R and D Services industry, to which ChampionX belongs, is currently ranked in the top 14% of over 250 Zacks industries, suggesting a favorable industry outlook [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

[Financial & Operational Highlights](index=1&type=section&id=Financial%20%26%20Operational%20Highlights) ChampionX reported Q1 2025 results, including a sequential revenue decrease, strong adjusted EBITDA margin, and announced its acquisition by SLB [Q1 2025 Performance Summary](index=1&type=section&id=Q1%202025%20Performance%20Summary) ChampionX reported Q1 2025 revenue of $864.5 million, a 5% sequential decrease, alongside $85.8 million net income, $190.9 million adjusted EBITDA, and $38.6 million positive free cash flow Q1 2025 Key Financial Metrics | Metric | Value | | :--- | :--- | | Revenue | $864.5 million | | Net Income Attributable to ChampionX | $85.8 million | | Adjusted EBITDA | $190.9 million | | Adjusted EBITDA Margin | 22.1% | | Diluted EPS | $0.44 | | Adjusted Diluted EPS | $0.50 | | Cash from Operating Activities | $66.8 million | | Free Cash Flow | $38.6 million | - The sequential revenue decrease of **5% to $864 million** was in line with company expectations, primarily driven by a typical seasonal decline in international operations[4](index=4&type=chunk) - The company maintained a strong financial position, ending the quarter with approximately **$1.2 billion of liquidity**, including **$527 million in cash**[5](index=5&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Soma Somasundaram highlighted the portfolio's resilience, strong adjusted EBITDA margin, consistent positive free cash flow, and strategic positioning to aid operators while mitigating tariff impacts - The first quarter demonstrated portfolio resilience, delivering strong adjusted EBITDA and margin, and positive free cash flow[3](index=3&type=chunk) - ChampionX is well-positioned to assist operators in maximizing producing asset value, especially as the industry shifts towards capital discipline and moderating spending[6](index=6&type=chunk) - The company is leveraging its global supply chain, supplier partnerships, pricing adjustments, and productivity initiatives to mitigate the impact of tariffs[7](index=7&type=chunk) [Agreement to be Acquired by SLB](index=1&type=section&id=Agreement%20to%20be%20Acquired%20by%20SLB) ChampionX entered a definitive agreement to be acquired by SLB in an all-stock transaction, approved by stockholders and pending regulatory review, leading to discontinued quarterly guidance - SLB and ChampionX announced a definitive merger agreement for SLB to acquire ChampionX in an all-stock transaction[8](index=8&type=chunk) - The transaction was approved by ChampionX stockholders on June 18, 2024, and is subject to regulatory approvals and other customary closing conditions[8](index=8&type=chunk) - Due to the pending acquisition, ChampionX has discontinued providing quarterly guidance and will not host a conference call to discuss its Q1 2025 results[9](index=9&type=chunk) [Business Segment Performance](index=2&type=section&id=Business%20Segment%20Performance) This section details the Q1 2025 financial performance and key operational highlights for each of ChampionX's four business segments [Production Chemical Technologies](index=2&type=section&id=Production%20Chemical%20Technologies) Production Chemical Technologies reported $523.4 million revenue, an 8% sequential decrease due to lower international sales, resulting in a reduced adjusted EBITDA margin of 20.8% Production Chemical Technologies Q1 2025 Performance | Metric | Q1 2025 | Q4 2024 | Sequential Change | | :--- | :--- | :--- | :--- | | Revenue | $523.4M | $569.7M | -8% | | Operating Profit Margin | 15.7% | 18.2% | -248 bps | | Adjusted EBITDA Margin | 20.8% | 23.4% | -259 bps | - The sequential decrease in revenue, operating profit margin, and adjusted EBITDA margin was primarily driven by lower sales volumes[10](index=10&type=chunk)[11](index=11&type=chunk) - Key business wins include first fill contracts in the Middle East, a major capital project in the Gulf of America, and hydrate inhibitor deliveries for a new FPSO in Australia[17](index=17&type=chunk) [Production & Automation Technologies](index=2&type=section&id=Production%20%26%20Automation%20Technologies) Production & Automation Technologies saw a slight 2% sequential revenue decrease to $264.4 million, but improved its adjusted EBITDA margin to 26.6% through productivity gains and strong digital solution adoption Production & Automation Technologies Q1 2025 Performance | Metric | Q1 2025 | Q4 2024 | Sequential Change | | :--- | :--- | :--- | :--- | | Revenue | $264.4M | $269.6M | -2% | | Operating Profit Margin | 14.2% | 14.5% | -27 bps | | Adjusted EBITDA Margin | 26.6% | 26.2% | +34 bps | - Revenue from digital products was **$57.8 million**, a sequential decrease of **7%**, driven by seasonally lower customer activity in North America[12](index=12&type=chunk) - Awarded a multi-year contract for production optimization software in Indonesia, successfully migrating over **4,000 wells** to the XSPOC® platform[20](index=20&type=chunk) - The segment continues to see strong market adoption of new digital technologies, including SmartSpin® wireless sensors and SMARTEN™ Lite rod pump controllers[20](index=20&type=chunk) [Drilling Technologies](index=2&type=section&id=Drilling%20Technologies) Drilling Technologies experienced a 3% sequential revenue decrease to $50.5 million, primarily due to lower North American sales volumes, significantly impacting its adjusted EBITDA margin to 20.3% Drilling Technologies Q1 2025 Performance | Metric | Q1 2025 | Q4 2024 | Sequential Change | | :--- | :--- | :--- | :--- | | Revenue | $50.5M | $51.9M | -3% | | Operating Profit Margin | 16.2% | 20.6% | -440 bps | | Adjusted EBITDA Margin | 20.3% | 23.7% | -346 bps | - The sequential revenue decline was driven primarily by lower North America sales volumes, which also caused the decrease in margins[14](index=14&type=chunk) [Reservoir Chemical Technologies](index=2&type=section&id=Reservoir%20Chemical%20Technologies) Reservoir Chemical Technologies achieved strong 23% sequential revenue growth to $26.9 million, driven by higher sales and a favorable product mix, significantly boosting its adjusted EBITDA margin to 23.6% Reservoir Chemical Technologies Q1 2025 Performance | Metric | Q1 2025 | Q4 2024 | Sequential Change | | :--- | :--- | :--- | :--- | | Revenue | $26.9M | $21.9M | +23% | | Operating Profit Margin | 20.5% | 10.5% | +1008 bps | | Adjusted EBITDA Margin | 23.6% | 17.1% | +647 bps | - The significant increase in margins was driven by higher sales volumes and a more favorable product mix[16](index=16&type=chunk) - The segment completed its second RENEWIQ® joint offering for frac treating and was awarded work for its PROE® completion chemistry to enhance production in the Permian Basin[17](index=17&type=chunk) [Financial Statements](index=6&type=section&id=Financial%20Statements) This section provides detailed consolidated financial statements, including income, balance sheets, and cash flows, along with segment-specific financial data [Condensed Consolidated Statements of Income](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) ChampionX reported Q1 2025 revenue of $864.5 million and net income attributable to ChampionX of $85.8 million, or $0.44 per diluted share Q1 2025 Income Statement Highlights (in thousands) | Account | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Revenue | $864,464 | $912,037 | $922,141 | | Gross Profit | $291,526 | $311,883 | $299,204 | | Income Before Income Taxes | $104,412 | $118,115 | $139,756 | | Net Income Attributable to ChampionX | $85,797 | $82,766 | $112,923 | | Diluted EPS | $0.44 | $0.43 | $0.58 | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, ChampionX reported total assets of $3.50 billion, with cash and cash equivalents at $526.6 million, and stockholders' equity at $1.92 billion Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $526,559 | $507,681 | | Total current assets | $1,768,789 | $1,563,897 | | Total assets | $3,500,390 | $3,470,252 | | Total current liabilities | $784,896 | $785,872 | | Long-term debt | $590,746 | $591,453 | | ChampionX stockholders' equity | $1,916,726 | $1,846,437 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For Q1 2025, net cash provided by operating activities was $66.8 million, with a net increase in cash and cash equivalents of $18.9 million for the period Cash Flow Highlights (in thousands) | Account | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash flows provided by operating activities | $66,802 | $173,508 | | Net cash used for investing activities | $(28,246) | $(10,794) | | Net cash used for financing activities | $(20,149) | $(64,093) | | Net increase in cash and cash equivalents | $18,878 | $97,460 | [Business Segment Data](index=9&type=section&id=Business%20Segment%20Data) This section provides detailed quarterly revenue and adjusted EBITDA data for each of ChampionX's four business segments, highlighting their individual contributions Q1 2025 Segment Revenue (in thousands) | Segment | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Production Chemical Technologies | $523,390 | $569,662 | $590,108 | | Production & Automation Technologies | $264,377 | $269,568 | $252,614 | | Drilling Technologies | $50,530 | $51,942 | $55,206 | | Reservoir Chemical Technologies | $26,926 | $21,937 | $24,705 | Q1 2025 Segment Adjusted EBITDA (in thousands) | Segment | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Production Chemical Technologies | $109,065 | $133,475 | $118,031 | | Production & Automation Technologies | $70,269 | $70,739 | $60,340 | | Drilling Technologies | $10,237 | $12,321 | $16,074 | | Reservoir Chemical Technologies | $6,347 | $3,751 | $5,346 | [Non-GAAP Financial Measures & Reconciliations](index=10&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) This section provides reconciliations of GAAP financial measures to non-GAAP measures, including adjusted net income, adjusted EBITDA, and free cash flow [Reconciliation of GAAP to Non-GAAP Measures](index=10&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Measures) This section reconciles GAAP net income to non-GAAP adjusted net income of $96.0 million and adjusted EBITDA of $190.9 million for Q1 2025, detailing key adjustments Reconciliation of Net Income to Adjusted EBITDA (Q1 2025, in thousands) | Description | Amount | | :--- | :--- | | Net income attributable to ChampionX | $85,797 | | Pre-tax adjustments (Merger costs, restructuring, etc.) | $13,205 | | Tax impact of adjustments | $(2,971) | | **Adjusted net income attributable to ChampionX** | **$96,031** | | Add back: Tax impact, Noncontrolling interest, D&A, Taxes, Interest | $94,838 | | **Adjusted EBITDA** | **$190,869** | - Adjusted diluted EPS for Q1 2025 was **$0.50**, compared to the GAAP diluted EPS of **$0.44** The largest adjustment was for merger transaction costs, which added **$0.05 per share**[33](index=33&type=chunk) [Free Cash Flow Reconciliation](index=13&type=section&id=Free%20Cash%20Flow%20Reconciliation) Free cash flow for Q1 2025 was $38.6 million, derived from operating cash flow less capital expenditures, resulting in a 4% free cash flow to revenue ratio Free Cash Flow Calculation (Q1 2025, in thousands) | Description | Amount | | :--- | :--- | | Cash flows from operating activities | $66,802 | | Less: Capital expenditures, net of proceeds | $(28,246) | | **Free cash flow** | **$38,556** | Free Cash Flow Ratios (Q1 2025) | Ratio | Value | | :--- | :--- | | Free cash flow to revenue ratio | 4% | | Free cash flow to adjusted EBITDA ratio | 20% | [Other Information](index=3&type=section&id=Other%20Information) This section includes important disclosures regarding forward-looking statements, outlining associated risks and the company's policy on updates [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This section outlines forward-looking statements regarding the proposed SLB transaction, business outlook, and market trends, emphasizing inherent risks and uncertainties - The report contains forward-looking statements related to the SLB transaction, company objectives, operating trends, and financial projections[22](index=22&type=chunk) - Key risks include the ultimate outcome of the SLB transaction, business disruptions, difficulties in retaining employees, and the ability to achieve anticipated synergies[22](index=22&type=chunk) - The company does not undertake any obligation to update forward-looking statements, except as required by law[24](index=24&type=chunk)

Financial Performance - ChampionX Corporation reported first quarter 2025 revenue of $864.5 million, a decrease of 5% sequentially, primarily due to seasonal declines in international operations [3][4] - Net income attributable to ChampionX was $85.8 million, with an income before income taxes margin of 12.1% and adjusted EBITDA of $190.9 million, reflecting a 22.1% adjusted EBITDA margin, the second-highest level for the company [3][4][29] - Cash from operating activities was $66.8 million, representing 78% of net income, and free cash flow was $38.6 million, marking the 12th consecutive quarter of positive free cash flow [4][37] Segment Performance - Production Chemical Technologies revenue was $523.4 million, down 8% sequentially, with segment operating profit of $82.2 million and an adjusted segment EBITDA margin of 20.8% [9][10][29] - Production & Automation Technologies revenue was $264.4 million, a decrease of 2% sequentially, with segment operating profit of $37.6 million and an adjusted segment EBITDA margin of 26.6% [11][12][29] - Drilling Technologies revenue was $50.5 million, down 3% sequentially, with segment operating profit of $8.2 million and an adjusted segment EBITDA margin of 20.3% [13][29] - Reservoir Chemical Technologies revenue increased by 23% sequentially to $26.9 million, with segment operating profit margin rising to 20.5% [14][15][29] Business Highlights - ChampionX secured several contracts in the Middle East and North America, including a major capital project in the Gulf of America and a significant volume of hydrate inhibitor for an Australian operator [16] - The company continues to expand its digital technologies, with strong market adoption of new solutions such as XSPOC production optimization software and SMARTEN™ Lite rod pump controllers [19] - ChampionX's Integrated Production Optimization (IPO) business is expanding, delivering measurable production uplift and optimizing chemical spend for operators [19] Acquisition Update - On April 2, 2024, SLB and ChampionX announced a definitive Agreement and Plan of Merger for SLB to acquire ChampionX in an all-stock transaction, which has received board and stockholder approval [7][8]

Core Insights - ChampionX (CHX) has consistently surpassed earnings estimates, making it a strong candidate for potential investment opportunities in the Zacks Engineering - R and D Services industry [1][2] - The company has achieved an average earnings surprise of 15.98% over the last two quarters, indicating robust performance [1] Earnings Performance - For the last reported quarter, ChampionX reported earnings of $0.50 per share, exceeding the Zacks Consensus Estimate of $0.41 per share by 21.95% [2] - In the previous quarter, the company posted earnings of $0.44 per share against an expected $0.40 per share, resulting in a surprise of 10% [2] Earnings Estimates and Predictions - Recent estimates for ChampionX have been trending upward, with a positive Earnings ESP (Expected Surprise Prediction) indicating a strong likelihood of an earnings beat [5][8] - The current Earnings ESP for ChampionX stands at +11.11%, reflecting increased analyst optimism regarding the company's earnings prospects [8] Zacks Rank and Success Rate - ChampionX holds a Zacks Rank of 2 (Buy), which, when combined with a positive Earnings ESP, suggests a high probability of another earnings beat [8] - Research indicates that stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% success rate in beating consensus estimates [6]

Company Overview - ChampionX (CHX) shares increased by 12.6% to $25.35 in the last trading session, following a significant volume of trading, contrasting with a 21.1% loss over the past four weeks [1] - The company is expected to report quarterly earnings of $0.41 per share, reflecting an 18% decrease year-over-year, with revenues projected at $869 million, down 5.8% from the previous year [2] - The consensus EPS estimate for ChampionX has remained unchanged over the last 30 days, indicating that stock price movements may not sustain without earnings estimate revisions [3] Industry Context - ChampionX operates within the Zacks Engineering - R and D Services industry, where Aecom Technology (ACM) also resides, with ACM shares closing 9% higher at $94.99, despite a -7.6% return over the past month [3] - Aecom's consensus EPS estimate is $1.15, showing a 10.6% increase from the previous year, and it currently holds a Zacks Rank of 3 (Hold) [4]

Group 1 - ChampionX (CHX) is a notable stock in the Construction sector, currently ranked 16 in the Zacks Sector Rank, which evaluates 16 different sector groups [2] - The Zacks Rank system indicates that ChampionX has a Zacks Rank of 2 (Buy), with a 3% increase in the consensus estimate for its full-year earnings over the past 90 days, reflecting improved analyst sentiment [3] - Year-to-date, ChampionX has returned approximately 9.9%, significantly outperforming the average return of -9.9% for the Construction sector [4] Group 2 - ChampionX is part of the Engineering - R and D Services industry, which includes 16 stocks and is currently ranked 39 in the Zacks Industry Rank; this industry has seen a loss of about 18.3% year-to-date, indicating that CHX is performing better than its peers [5] - Another stock in the Construction sector, Cavco (CVCO), has a year-to-date return of 15.2% and a Zacks Rank of 1 (Strong Buy), with a 21.8% increase in its consensus EPS estimate over the past three months [4][5] - The Building Products - Mobile Homes and RV Builders industry, to which Cavco belongs, is ranked 44 and has experienced a -2.6% return since the beginning of the year [6]