HOUSTON, April 23, 2024 (GLOBE NEWSWIRE) -- NCS Multistage Holdings, Inc. ("NCS" or the "Company") (NASDAQ:NCSM) will host a conference call to discuss its first quarter 2024 results on Thursday, May 2, 2024 at 7:30 a.m. Central Time (8:30 a.m. Eastern Time). NCS will issue its first quarter 2024 earnings release the evening prior to the conference call. The conference call will be available via a live audio webcast. Participants who wish to ask questions may register for the call here to receive the dial-i ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ______ Commission file number: 001-38071 NCS Multistage Holdings, Inc. (Exact name of registrant as specified in its charter) Delaware ...

[Press Release Overview](index=1&type=section&id=Press%20Release%20Overview) [Company Information](index=1&type=section&id=Company%20Information) NCS Multistage Holdings, Inc. is a leading provider of engineered products and support services optimizing oil and gas well construction, completion, and field development strategies - NCS Multistage Holdings, Inc. (Nasdaq: NCSM) is a leading provider of engineered products and support services focused on optimizing oil and gas well construction, completion, and field development strategies[2](index=2&type=chunk) [Announcement Highlights](index=1&type=section&id=Announcement%20Highlights) The company reported Q4 and full-year 2023 results, showing revenue declines but a significant Q4 net income increase due to a legal settlement 2023 Fourth Quarter and Full-Year Key Financial Data | Metric | Q4 2023 (Millions USD) | Q4 2022 (Millions USD) | Full-Year 2023 (Millions USD) | Full-Year 2022 (Millions USD) | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $35.2 | $40.2 | $142.5 | $155.6 | | Net Income (Loss) | $39.6 | $2.0 | $(3.2) | $(1.1) | | Diluted EPS (Loss) | $15.80 | $0.81 | $(1.27) | $(0.45) | | Adjusted Net Loss | $(0.9) | $1.8 | $(1.3) | $(0.2) | | Adjusted Diluted EPS (Loss) | $(0.36) | $0.75 | $(0.51) | $(0.09) | | Adjusted EBITDA | $2.5 | $6.4 | $11.9 | $15.1 | | Free Cash Flow (after non-controlling interest distributions) | - | - | $2.6 | $(2.1) | [Financial Review](index=1&type=section&id=Financial%20Review) [Fourth Quarter 2023 Results](index=1&type=section&id=Fourth%20Quarter%202023%20Results) Q4 2023 total revenue decreased by 12% to $35.2 million, driven by lower sales across regions, while net income surged due to a $40.8 million legal settlement reversal 2023 Fourth Quarter Key Financial Metrics | Metric | Q4 2023 (Millions USD) | Q4 2022 (Millions USD) | Year-over-Year Change | | :--- | :--- | :--- | :--- | | Total Revenue | $35.2 | $40.2 | -12% | | Gross Profit | $12.3 | $15.6 | -21.2% | | Gross Margin | 35% | 39% | -4.0 pp | | Adjusted Gross Profit | $12.9 | $16.1 | -19.9% | | Adjusted Gross Margin | 37% | 40% | -3.0 pp | | Selling, General and Administrative Expenses (SG&A) | $13.2 | $13.2 | 0% | | Other Income | $0.4 | $1.4 | -71.4% | | Net Income (Loss) | $39.6 | $2.0 | +1880% | | Diluted EPS | $15.80 | $0.81 | +1850.6% | | Adjusted Net Loss | $(0.9) | $1.8 | Loss Widened | | Adjusted Diluted EPS (Loss) | $(0.36) | $0.75 | Loss Widened | | Adjusted EBITDA | $2.5 | $6.4 | -60.9% | - Total revenue decline primarily resulted from decreased product sales and services in the US and international markets, and reduced Canadian service revenue, partially offset by increased Canadian product sales[3](index=3&type=chunk) - Net income significantly increased due to the Texas legal settlement, with the company reversing a previously recorded **$40.8 million** litigation accrual without cash payment[8](index=8&type=chunk)[9](index=9&type=chunk) - Adjusted EBITDA decreased by **$3.9 million**, primarily due to lower revenue[10](index=10&type=chunk) [Full Year 2023 Results](index=2&type=section&id=Full%20Year%202023%20Results) Full-year 2023 total revenue decreased by 8% to $142.5 million, with expanded net losses, but significant improvements in operating and free cash flow 2023 Full-Year Key Financial Metrics | Metric | Full-Year 2023 (Millions USD) | Full-Year 2022 (Millions USD) | Year-over-Year Change | | :--- | :--- | :--- | :--- | | Total Revenue | $142.5 | $155.6 | -8% | | Gross Profit | $53.4 | $58.4 | -8.6% | | Gross Margin | 37% | 38% | -1.0 pp | | Adjusted Gross Profit | $55.6 | $60.4 | -7.9% | | Adjusted Gross Margin | 39% | 39% | 0.0 pp | | Net Income (Loss) | $(3.2) | $(1.1) | Loss Widened | | Adjusted Net Loss | $(1.3) | $(0.2) | Loss Widened | | Adjusted EBITDA | $11.9 | $15.1 | -21.2% | | Cash Flow from Operating Activities | $4.8 | $(1.4) | Improved by $6.2 Million | | Free Cash Flow (after non-controlling interest distributions) | $2.6 | $(2.1) | Improved by $4.7 Million | - Full-year revenue decline primarily reflects reduced US product sales and decreased service activities across the US, Canada, and international markets, partially offset by increased Canadian and international product sales[11](index=11&type=chunk) - Cash flow improvement is mainly attributed to a smaller increase in net working capital in 2023 compared to 2022, partially offset by a higher net loss[13](index=13&type=chunk) [Liquidity and Capital Expenditures](index=2&type=section&id=Liquidity%20and%20Capital%20Expenditures) As of December 31, 2023, the company maintained $16.7 million in cash, $8.2 million in total debt, and $16.4 million in available credit, with stable working capital 2023 Year-End Liquidity and Capital Expenditures | Metric | December 31, 2023 (Millions USD) | December 31, 2022 (Millions USD) | | :--- | :--- | :--- | | Cash | $16.7 | $16.2 | | Total Debt | $8.2 | - | | Available ABL Revolving Credit Facility | $16.4 | - | | Working Capital | $71.2 | $70.0 | | Capital Expenditures (Net) | $1.7 | $0.7 | - The company maintained a strong balance sheet and liquidity position[23](index=23&type=chunk) [Legal Matters](index=2&type=section&id=Legal%20Matters) [Texas Litigation Settlement](index=2&type=section&id=Texas%20Litigation%20Settlement) In December 2023, the company settled Texas litigation with insurers paying the settlement, resulting in a $40.8 million litigation accrual reversal - The Texas legal litigation has been settled, with insurance companies paying the settlement and NCS incurring no cash payment[16](index=16&type=chunk)[24](index=24&type=chunk) - The company reversed a previously recorded **$40.8 million** litigation accrual in Q4 2023[8](index=8&type=chunk)[16](index=16&type=chunk) [Canada Patent Infringement Case](index=2&type=section&id=Canada%20Patent%20Infringement%20Case) Mediation for the Canadian patent infringement case in late February 2024 did not result in an agreement, with the company planning an appeal - Mediation for the Canadian patent infringement case did not result in an agreement, but parties intend to continue discussions[17](index=17&type=chunk) - The company has paid approximately **$1.8 million** in fees and expenses and believes there are strong grounds to appeal the court's decision to significantly reduce the cost award[17](index=17&type=chunk) [Management Review and Outlook](index=3&type=section&id=Management%20Review%20and%20Outlook) [2023 Performance Summary](index=3&type=section&id=2023%20Performance%20Summary) Despite challenging market conditions in 2023 leading to reduced revenue, the company achieved growth in Canadian PurpleSeal composite frac plugs and secured new North Sea clients - Total revenue for 2023 was **$142.5 million**, an **8% year-over-year decrease**, with Canadian, US, and international market revenues declining by **3%**, **18%**, and **23%** respectively[21](index=21&type=chunk) - Despite revenue decline, the company achieved significant growth in Canadian PurpleSeal composite frac plug revenue and customer base, and added new frac system clients in the North Sea[21](index=21&type=chunk) - Through streamlined operations and cost reductions, the company maintained an adjusted gross margin of **39%** and reduced SG&A expenses by **$1.8 million**[22](index=22&type=chunk) [2024 Outlook and Strategy](index=3&type=section&id=2024%20Outlook%20and%20Strategy) For 2024, the company anticipates varied regional activity, aiming to outperform industry trends through customer expansion, new projects, and product innovation 2024 Industry Activity Outlook | Region | 2024 Activity Outlook (vs. 2023) | | :--- | :--- | | Canada | Flat to Slightly Down | | United States | Down 5% to 10% (expected to rebound by year-end) | | International | Up 5% to 10% | - The company believes its product and service portfolio value and ongoing innovation will enable it to outperform industry activity changes in 2024, particularly achieving revenue growth in the US and international markets[26](index=26&type=chunk) - 2024 strategic priorities include: i) solidifying leading market positions; ii) capturing international and offshore opportunities; and iii) commercializing innovative solutions for complex client challenges[28](index=28&type=chunk) [Additional Information](index=4&type=section&id=Additional%20Information) [Conference Call Details](index=4&type=section&id=Conference%20Call%20Details) A conference call on March 8, 2024, will discuss Q4 and full-year 2023 results and updated guidance, with live webcast and replay available - The conference call will be held on **March 8, 2024**, at 7:30 AM Central Time (8:30 AM Eastern Time), with a live webcast and approximately seven-day replay available[31](index=31&type=chunk)[32](index=32&type=chunk) [About NCS Multistage Holdings, Inc.](index=4&type=section&id=About%20NCS%20Multistage%20Holdings,%20Inc.) NCS Multistage Holdings, Inc. is a leading provider of engineered products and support services for optimizing oil and gas well construction and field development - The company provides products and services primarily for onshore and offshore oil and gas wells, especially horizontal wells, in North America and selected international markets like the North Sea, Middle East, Argentina, and China[33](index=33&type=chunk) [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) This press release contains forward-looking statements subject to inherent uncertainties and risks that may cause actual results to differ materially from expectations - Forward-looking statements are based on current expectations and assumptions but are subject to inherent uncertainties, risks, and changing circumstances that may cause actual results to differ materially from expectations[36](index=36&type=chunk) - Key risk factors include decreased oil and gas exploration and production activity, volatile oil and gas prices, intense competition, inability to successfully execute strategies, customer loss, litigation losses, and supply chain disruptions[36](index=36&type=chunk) [Contact Information](index=5&type=section&id=Contact%20Information) Contact information for Mike Morrison, Chief Financial Officer and Treasurer, is provided for investor inquiries - Contact: Mike Morrison, Chief Financial Officer and Treasurer, Phone: **(281) 453-2222**, Email: **IR@ncsmultistage.com**[37](index=37&type=chunk) [Condensed Consolidated Financial Statements](index=6&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Statements%20of%20Operations) Q4 2023 net income surged to $39.8 million due to a legal settlement reversal, while full-year 2023 saw a $3.1 million net loss, with total revenue declining Condensed Consolidated Statements of Operations Summary (Thousands USD) | Metric | Q4 2023 (Thousands USD) | Q4 2022 (Thousands USD) | Full-Year 2023 (Thousands USD) | Full-Year 2022 (Thousands USD) | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | 35,247 | 40,186 | 142,471 | 155,632 | | Cost of Sales (excluding D&A) | 22,359 | 24,108 | 86,868 | 95,228 | | Selling, General and Administrative Expenses | 13,221 | 13,190 | 56,518 | 58,338 | | Operating Income (Loss) | (1,555) | 1,813 | (5,531) | (2,253) | | Litigation Accrual (Reversal), Net | 40,696 | — | (1,802) | — | | Net Income (Loss) | 39,849 | 2,291 | (3,111) | (952) | | Net Income (Loss) Attributable to NCS Multistage Holdings, Inc. | 39,639 | 1,979 | (3,153) | (1,102) | | Diluted EPS (Loss) | 15.80 | 0.81 | (1.27) | (0.45) | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Balance%20Sheets) As of December 31, 2023, total assets increased to $152.0 million, driven by higher current assets, while total liabilities also rose due to legal accruals Condensed Consolidated Balance Sheets Summary (Thousands USD) | Metric | December 31, 2023 (Thousands USD) | December 31, 2022 (Thousands USD) | | :--- | :--- | :--- | | Cash and Cash Equivalents | 16,720 | 16,234 | | Accounts Receivable, Net | 23,981 | 27,846 | | Inventory, Net | 41,612 | 37,042 | | Insurance Receivable | 15,000 | — | | Total Current Assets | 103,217 | 87,663 | | Total Assets | 152,032 | 138,599 | | Accounts Payable | 6,227 | 7,549 | | Accrued Legal Contingencies | 15,000 | — | | Total Current Liabilities | 32,058 | 17,693 | | Total Liabilities | 42,639 | 29,337 | | Total Stockholders' Equity | 91,618 | 91,029 | | Total Equity | 109,393 | 109,262 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Statements%20of%20Cash%20Flows) Full-year 2023 operating cash flow turned positive to $4.8 million, a significant improvement from 2022, with increased investing outflows and decreased financing outflows Condensed Consolidated Statements of Cash Flows Summary (Thousands USD) | Metric | Full-Year 2023 (Thousands USD) | Full-Year 2022 (Thousands USD) | | :--- | :--- | :--- | | Cash Flow from Operating Activities | 4,774 | (1,423) | | Cash Flow Used in Investing Activities | (1,683) | (698) | | Cash Flow Used in Financing Activities | (2,441) | (2,742) | | Net Change in Cash and Cash Equivalents | 486 | (5,934) | | Cash and Cash Equivalents, End of Period | 16,720 | 16,234 | [Revenues by Geographic Area](index=9&type=section&id=Revenues%20by%20Geographic%20Area) Total revenue declined in Q4 and full-year 2023, with decreases in US and international markets, while Canadian product sales grew in Q4 but overall Canadian revenue slightly fell Revenues by Geographic Area (Thousands USD) | Region | Q4 2023 (Thousands USD) | Q4 2022 (Thousands USD) | Full-Year 2023 (Thousands USD) | Full-Year 2022 (Thousands USD) | | :--- | :--- | :--- | :--- | :--- | | **United States** | | | | | | Product Sales | 6,411 | 9,458 | 26,613 | 34,009 | | Services | 2,695 | 4,057 | 11,206 | 12,228 | | **Total United States** | **9,106** | **13,515** | **37,819** | **46,237** | | **Canada** | | | | | | Product Sales | 17,884 | 16,721 | 71,946 | 71,176 | | Services | 7,087 | 8,014 | 26,161 | 29,695 | | **Total Canada** | **24,971** | **24,735** | **98,107** | **100,871** | | **Other Countries** | | | | | | Product Sales | 3 | 131 | 1,888 | 674 | | Services | 1,167 | 1,805 | 4,657 | 7,850 | | **Total Other Countries** | **1,170** | **1,936** | **6,545** | **8,524** | | **Total Revenue** | **35,247** | **40,186** | **142,471** | **155,632** | - Compared to Q3 2023, total revenue decreased by **8%**, with Canadian revenue down **11%**, international revenue down **45%**, and US revenue up **14%**, driven by increased sales of sliding sleeves and composite plugs[4](index=4&type=chunk) [Non-GAAP Financial Measures Reconciliations](index=10&type=section&id=Non-GAAP%20Financial%20Measures%20Reconciliations) [Overview of Non-GAAP Measures](index=10&type=section&id=Overview%20of%20Non-GAAP%20Measures) The company utilizes non-GAAP financial measures like Adjusted EBITDA and Free Cash Flow to assess core business performance and enable comparative investor evaluation - Non-GAAP financial measures are not defined by GAAP and should not be considered in isolation or as a substitute for GAAP-reported financial performance analysis[47](index=47&type=chunk) - Management uses these metrics to evaluate period performance of core business operations and enable investors to assess the company's performance relative to other companies unaffected by specific factors[48](index=48&type=chunk) [Net Working Capital](index=10&type=section&id=Net%20Working%20Capital) Net working capital, defined as total current assets excluding cash minus total current liabilities excluding current portion of long-term debt, was $56.3 million as of December 31, 2023 - Net working capital is used to assess working capital investment required to support operations, analyze cash flow and working capital needs, including operational efficiency and asset liquidity[50](index=50&type=chunk) Net Working Capital Reconciliation (Thousands USD) | Metric | December 31, 2023 (Thousands USD) | December 31, 2022 (Thousands USD) | | :--- | :--- | :--- | | Working Capital | 71,159 | 69,970 | | Cash and Cash Equivalents | (16,720) | (16,234) | | Current Portion of Long-Term Debt | 1,812 | 1,489 | | **Net Working Capital** | **56,251** | **55,225** | [Adjusted Gross Profit and Margin](index=11&type=section&id=Adjusted%20Gross%20Profit%20and%20Margin) Adjusted gross profit, defined as total revenue less cost of sales excluding depreciation and amortization, was $12.9 million in Q4 2023, with a 36.6% margin Adjusted Gross Profit and Margin Reconciliation (Thousands USD) | Metric | Q4 2023 (Thousands USD) | Q4 2022 (Thousands USD) | Full-Year 2023 (Thousands USD) | Full-Year 2022 (Thousands USD) | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | 35,247 | 40,186 | 142,471 | 155,632 | | Cost of Sales (excluding D&A) | 22,359 | 24,108 | 86,868 | 95,228 | | Gross Profit | 12,284 | 15,588 | 53,398 | 58,432 | | Gross Margin | 34.9% | 38.8% | 37.5% | 37.5% | | Adjusted Gross Profit | 12,888 | 16,078 | 55,603 | 60,404 | | Adjusted Gross Margin | 36.6% | 40.0% | 39.0% | 38.8% | [Adjusted Net Income (Loss) and EPS](index=11&type=section&id=Adjusted%20Net%20Income%20(Loss)%20and%20EPS) Adjusted net income (loss) is defined as net income (loss) attributable to NCS Multistage Holdings, Inc., adjusted for specific non-recurring items Adjusted Net Income (Loss) and EPS Reconciliation (Thousands USD) | Metric | Q4 2023 (Thousands USD) | Q4 2022 (Thousands USD) | Full-Year 2023 (Thousands USD) | Full-Year 2022 (Thousands USD) | | :--- | :--- | :--- | :--- | :--- | | Net Income (Loss) Attributable to NCS Multistage Holdings, Inc. | 39,639 | 1,979 | (3,153) | (1,102) | | Litigation Accrual (Reversal), Net | (40,696) | — | 1,802 | — | | Constructed Asset Write-off | 652 | — | 652 | — | | Adjusted Net Income (Loss) | (894) | 1,841 | (1,254) | (214) | | Adjusted Diluted EPS (Loss) | (0.36) | 0.75 | (0.51) | (0.09) | [Adjusted EBITDA and Margin](index=12&type=section&id=Adjusted%20EBITDA%20and%20Margin) Adjusted EBITDA, defined as EBITDA adjusted for non-recurring or non-cash items, was $2.5 million in Q4 2023 with a 7% margin, significantly lower than 2022 - Adjusted EBITDA excludes costs not reflecting ongoing operating performance, intellectual property litigation, and certain capital structure-related costs[62](index=62&type=chunk) Adjusted EBITDA and Margin Reconciliation (Thousands USD) | Metric | Q4 2023 (Thousands USD) | Q4 2022 (Thousands USD) | Full-Year 2023 (Thousands USD) | Full-Year 2022 (Thousands USD) | | :--- | :--- | :--- | :--- | :--- | | Net Income (Loss) | 39,849 | 2,291 | (3,111) | (952) | | EBITDA | 41,265 | 4,561 | 1,859 | 4,733 | | Litigation Accrual (Reversal), Net | (40,696) | — | 1,802 | — | | Constructed Asset Write-off | 652 | — | 652 | — | | Share-based Compensation Expense | 879 | 953 | 4,164 | 3,453 | | Professional Service Fees | 262 | 846 | 1,548 | 5,665 | | Adjusted EBITDA | 2,529 | 6,398 | 11,949 | 15,110 | | Adjusted EBITDA Margin | 7% | 16% | 8% | 10% | | Adjusted EBITDA less Share-based Compensation Expense | 1,650 | 5,445 | 7,785 | 11,657 | [Free Cash Flow](index=13&type=section&id=Free%20Cash%20Flow) Free cash flow, defined as operating cash flow less capital expenditures plus asset sales, was $3.1 million for full-year 2023, a significant improvement - Free cash flow provides investors with information on cash available during the period beyond capital expenditures and other investment needs[69](index=69&type=chunk) Free Cash Flow Reconciliation (Thousands USD) | Metric | Full-Year 2023 (Thousands USD) | Full-Year 2022 (Thousands USD) | | :--- | :--- | :--- | | Cash Flow from Operating Activities | 4,774 | (1,423) | | Purchases of Property and Equipment | (1,882) | (1,035) | | Purchases and Development of Software and Technology | (310) | (96) | | Proceeds from Sales of Property and Equipment | 509 | 433 | | **Free Cash Flow** | **3,091** | **(2,121)** | | Distributions to Non-Controlling Interests | (500) | — | | **Free Cash Flow after Non-Controlling Interest Distributions** | **2,591** | **(2,121)** |

Market Conditions - The average WTI crude oil price was $82.25 per barrel in Q3 2023, compared to approximately $83 per barrel in Q4 2022, reflecting a decrease in the first half of 2023[87]. - Natural gas prices averaged $2.59 per MMBtu in Q3 2023, down from $5.55 per MMBtu in Q4 2022, due to warm winter conditions and reduced demand[88]. - The average U.S. land rig count declined by 17% to 630 in Q3 2023 compared to Q4 2022, and by 15% compared to the same period in 2022[92]. - The average rig counts in Canada and the United States decreased by 6% and 15%, respectively, in Q3 2023 compared to Q3 2022, impacting sales[105]. - International industry activity is expected to improve by over 10% in 2023 compared to the prior year[81]. Revenue and Sales Performance - Total revenues for the three months ended September 30, 2023, were $38.3 million, a decrease of 21.7% compared to $48.9 million for the same period in 2022[105]. - Product sales accounted for 71% of revenues for the three months ended September 30, 2023, compared to 70% for the same period in 2022[95]. - Product sales decreased by 19.7% to $27.3 million, while services revenues fell by 26.2% to $11.0 million for the three months ended September 30, 2023[104]. - For the nine months ended September 30, 2023, total revenues were $107.2 million, a decrease of 7.1% from $115.4 million in the same period of 2022[114]. - Revenues for the nine months ended September 30, 2023, were $107.2 million, a decrease from $115.4 million in the same period of 2022, primarily due to lower U.S. product sales and decreased Canadian and international services activity[115]. - Product sales decreased to $76.1 million for the nine months ended September 30, 2023, compared to $79.5 million for the same period in 2022, while services revenues totaled $31.1 million, down from $35.9 million[115]. Cost and Expenses - Cost of sales was $22.6 million, representing 59.0% of revenues, compared to $28.4 million or 58.1% of revenues in the prior year[106]. - Cost of sales was $64.5 million, or 60.2% of revenues, for the nine months ended September 30, 2023, down from $71.1 million, or 61.6% of revenues, in the same period of 2022[116]. - Selling, general and administrative expenses decreased to $12.7 million, down 17.6% from $15.4 million in the same quarter of 2022[108]. - Selling, general and administrative expenses decreased to $43.3 million for the nine months ended September 30, 2023, compared to $45.1 million in 2022, reflecting lower professional fees and incentive bonus accruals[118]. Income and Financial Position - Net income for the three months ended September 30, 2023, was $4.1 million, a slight increase of 3.7% from $4.0 million in the prior year[104]. - Other income, net for the three months ended September 30, 2023, was $2.0 million, significantly up from $0.6 million in the same period of 2022[110]. - Other income, net increased to $3.8 million for the nine months ended September 30, 2023, compared to $1.6 million in the same period of 2022, driven by recovery of unpaid invoices and increased royalty income[120]. - Cash and cash equivalents as of September 30, 2023, were $11.4 million, with total outstanding indebtedness of $8.3 million related to finance lease obligations[123]. - Net cash used in operating activities improved to $1.4 million for the nine months ended September 30, 2023, from $9.0 million in the same period of 2022[131]. Litigation and Legal Matters - The provision for litigation resulted in a net expense of $42.5 million for the nine months ended September 30, 2023, compared to no expense in the same period of 2022[114]. - The provision for litigation, net of recoveries, totaled $42.5 million for the nine months ended September 30, 2023, primarily related to a judgment in the Texas Matter[119]. - The company intends to appeal the judgment related to the Texas Matter and believes it has strong arguments for a potential reversal of damages awarded[126]. Operational Challenges and Risks - The company has experienced supply chain disruptions and higher raw material costs, impacting both cost of sales and SG&A expenses[85]. - Competitive pressures have intensified, potentially impacting market share and operating margins for certain product lines[83]. - The company faces significant competition for its products and services, leading to pricing pressures and potential loss of market share[141]. - There is a risk of not successfully developing new technologies and products that meet customer needs, particularly in non-traditional energy markets[141]. - The company aims to increase sales in U.S. and international markets but may encounter challenges in implementation[141]. - Potential losses could arise from the inability to protect intellectual property and adverse outcomes in related disputes[141]. - The company is exposed to risks from uninsured business activities and litigation, which could impact financial stability[141]. - There are concerns regarding the ability to achieve price increases to counteract cost inflation[141]. - The company may face difficulties in attracting and retaining qualified employees, which could affect operational efficiency[141]. - Currency exchange rate fluctuations pose a risk to financial performance[141]. - The company must navigate regulatory changes in the oil and natural gas industry, including emissions restrictions[141]. - There is a risk of not accurately predicting customer demand, potentially leading to excess or obsolete inventory[141].

Financial Data and Key Metrics Changes - The third quarter revenues were $38.3 million, a 22% decrease compared to the same quarter last year [19] - Gross profit percentage was maintained at 41%, slightly below the previous year's percentage [43] - Adjusted EBITDA for the third quarter was $6.8 million, with an adjusted EBITDA margin of 18%, an improvement from 17% year-over-year [44] Business Line Data and Key Metrics Changes - Canadian revenues decreased by 19%, US revenues were down 30%, and international revenues decreased by 18% [19] - The company reported a net income of $4.4 million for the third quarter, an increase from $3.9 million in the same period last year [44] - Selling, general and administrative costs were $12.7 million, down by $2.7 million compared to the third quarter of last year [69] Market Data and Key Metrics Changes - Canadian revenues were impacted by a declining rig count due to commodity price volatility and Canadian wildfires [68] - US sales continued to be affected by lower natural gas prices, negatively impacting customer activity levels [68] - Sequentially, revenues in the third quarter increased by 51%, with Canada up almost 100% and international up by 26% [68] Company Strategy and Development Direction - The company aims to build upon its leading market positions and capitalize on international and offshore opportunities [5][10] - A multiyear project is underway with a leading international oil company to develop technology for deepwater offshore applications [8] - The company is focused on commercializing innovative solutions to complex customer challenges, with several new products available for field trials [35] Management's Comments on Operating Environment and Future Outlook - Management believes the company is in a multiyear cycle of improved growth and earnings prospects for the industry globally [73] - There is optimism about modest growth in rig activity in the US in the fourth quarter, with potential for further growth in 2024 [73] - Continuous improvement efforts are being made to enhance efficiency and support gross margin percentage [74] Other Important Information - The company settled one outstanding legal matter and expects both matters to be settled within insurance coverage limits [15] - An inaugural ESG report was released, highlighting the company's commitments to various stakeholders [16] - The company maintains a net cash position with an undrawn revolver and generated higher adjusted EBITDA compared to the same period in 2022 [38] Q&A Session All Questions and Answers Question: Commentary on product development for deepwater - Management discussed the transition from shallow water offshore to deepwater applications, highlighting the potential for multi-well opportunities in the future [52] Question: Drivers of strong EBITDA despite revenue decline - Management attributed the strong EBITDA to continuous improvement efforts, facility rationalizations, and efficient cost management [60] Question: Bidding environment in the Middle East compared to Canada - Management explained the long process of qualification in the Middle East, particularly with Saudi Aramco, and the progress made in cataloging multiple product lines [84]

NCS Multistage Holdings, Inc. (NASDAQ:NCSM) Q2 2023 Earnings Conference Call August 1, 2023 8:30 AM ET Company Participants Mike Morrison - Chief Financial Officer Ryan Hummer - Chief Executive Officer Conference Call Participants John Daniel - Daniel Energy Partners Dave Storms - Stonegate Jeff Robertson - Water Tower Research Operator Good day and thank you for standing by. Welcome to the Q2 2023 NCS Multistage Earnings Conference Call. [Operator Instructions] Please be advised that today’s conference is ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended June 30, 2023 OR Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission file number: 001-38071 NCS Multistage Holdings, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organiza ...

Financial Data and Key Metrics Changes - The company reported first-quarter revenues of $43.6 million, an 11% increase compared to the same period last year [47] - Gross profit was $18.5 million, with a gross margin of 43%, up from 38% year-over-year [7][45] - The net loss for the first quarter was $15 million, translating to a loss per share of $6.10, impacted by a $17.5 million charge related to a jury verdict [8][25] Business Line Data and Key Metrics Changes - Perforating gun sales were lower than expected, but there was increased momentum in PurpleSeal composite plug sales [3] - Canadian revenue was $30.7 million, near the midpoint of guidance, with strong increases compared to previous quarters [20] - U.S. revenue was $11.3 million, below guidance, reflecting reduced activity in natural gas production [43] Market Data and Key Metrics Changes - International operations generated $1.6 million in revenue, slightly above the midpoint of guidance [21] - The company expects industry activity growth of up to 10% in both Canada and the U.S. for 2023 [28][40] - The company anticipates a seasonal slowdown in Canadian operations due to spring breakup, with recovery expected in June [4] Company Strategy and Development Direction - The company is focused on leveraging new technologies to meet customer needs and expand its addressable market [30] - There is an emphasis on maintaining a strong balance sheet and generating positive free cash flow in 2023 [13][11] - The company plans to appeal a recent jury verdict, expecting insurance to cover most of the awarded damages [6][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of Canadian business activity in the third quarter [4] - The company expects to achieve annual adjusted EBITDA guidance weighted towards the second half of the year [12] - Management highlighted the potential for a multi-year cycle of improved growth prospects in the industry [32] Other Important Information - The company maintains a cash balance of over $13 million and a positive net cash position of $5.2 million [13][36] - Selling, general, and administrative costs were $16.2 million, slightly up from the previous year [24] - Adjusted net income for the first quarter was $1.2 million, an improvement from a net loss in the same period last year [25] Q&A Session Summary Question: What is the outlook for U.S. revenue growth? - Management expects modest sequential revenue growth in the U.S. in the second quarter despite recent reductions in activity [43] Question: How is the company addressing the recent jury verdict? - The company plans to appeal the verdict and believes that most of the damages will be covered by insurance [6][12] Question: What are the expectations for international market growth? - Management anticipates growth in international markets, particularly in the North Sea and the Middle East, as service activity increases [45][40]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 2023 OR Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from ______ to ______ Commission file number: 001-38071 NCS Multistage Holdings, Inc. (Exact name of registrant as specified in its charter) | Delawa ...

FORM 10-K (Mark One) ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 or Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Portions of the definitive proxy statement for the registrant's 2023 Annual Meeting of Stockholders are incorporated by reference in Part III of this Form 10-K. Such proxy statement will be filed with the Securities and Exchange Commission not later than 120 days aft ...