e Laboratories (US:CLB)2024-07-25 21:03Financial Performance - For the three months ended June 30, 2024, total revenue was $130,577,000, a 2% increase from $127,881,000 in the same period of 2023[101] - Operating income decreased by 15% to $16,008,000, compared to $18,906,000 in the prior year[101] - Net income attributable to Core Laboratories Inc. was $9,032,000, reflecting a significant decline of 60% from $22,846,000 in the same quarter of 2023[101] - For the three months ended June 30, 2024, service revenue was $96.3 million, an increase of 3% year-over-year and relatively flat sequentially[108] - For the three months ended June 30, 2024, product sales revenue was $34.2 million, remaining relatively flat year-over-year and increasing 3% sequentially[111] - Consolidated revenue for Q2 2024 was $130.6 million, a 2% increase from $127.9 million in Q2 2023[130] Revenue Breakdown - Service revenue accounted for 74% of total revenue at $96,337,000, while product sales contributed 26% at $34,240,000[101] - Revenue from the Reservoir Description segment for Q2 2024 was $86.3 million, a 3% increase year-over-year and a 2% increase sequentially, driven by growth in reservoir rock and fluid analysis[132] - Revenue from the Production Enhancement segment for Q2 2024 was $44.3 million, remaining stable with a 0% change year-over-year[130] - Revenue from the Production Enhancement segment for the three months ended June 30, 2024, was $44.3 million, remaining flat year-over-year and decreasing 2% sequentially[137] - For the six months ended June 30, 2024, service revenue was $192.8 million, an increase of 5% compared to the same period in the prior year[110] - For the six months ended June 30, 2024, product sales revenue was $67.4 million, a decrease of 6% compared to the same period in the prior year[113] - Revenue from the Production Enhancement segment for the six months ended June 30, 2024, was $89.7 million, a decrease of 3% from the same period in 2023[141] Expenses and Income - Cost of services for the three months ended June 30, 2024, was $74.8 million, an increase of 5% year-over-year[114] - General and administrative expense for the three months ended June 30, 2024, was $10.3 million, an increase of $4.4 million compared to $5.8 million in the prior year[122] - Operating income for the Reservoir Description segment was $11.4 million in Q2 2024, a decrease of 14% year-over-year[130] - Operating income for the three months ended June 30, 2024, was $11.4 million, a decrease of $1.9 million year-over-year and an increase of $4.6 million sequentially, with operating margins at 13% compared to 16% year-over-year[135] - For the six months ended June 30, 2024, operating income was $18.3 million, an increase of $2.5 million year-over-year, driven by incremental revenue of $6.9 million[135] Cash Flow and Debt - Cash flows from operating activities improved to $22.7 million for the six months ended June 30, 2024, compared to $5.6 million in the same period in 2023, marking a 307% increase[146] - Free cash flow for the six months ended June 30, 2024, was $16.8 million, compared to $1.2 million for the same period in 2023, representing a 1308% increase[152] - As of June 30, 2024, the company had a total long-term debt of $150 million, down from $166 million as of December 31, 2023[155] - The leverage ratio as of June 30, 2024, was 1.66, and the interest coverage ratio was 5.94, indicating compliance with all covenants[157] Market and Operational Insights - Global demand for crude oil and natural gas is expected to increase in 2024 and 2025, with capital spending in exploration reaching its highest level in over a decade in 2023[96] - Core Laboratories is focusing on large-scale core analyses and reservoir fluid characterization studies in major oil-producing regions, including projects in Guyana and Suriname[98] - The company anticipates continued expansion in CO2 capture and sequestration projects, with increased client investment expected in 2024 and beyond[98] - Ongoing geopolitical conflicts are causing disruptions in traditional maritime supply chains, but supply lines are expected to stabilize, reducing volatility in crude oil prices[97] - The average rig count in the U.S. land market for the three months ended June 30, 2024, was down by 17% year-over-year and 3% sequentially[136] Ratios and Financial Health - The current ratio was reported at 2.39:1, slightly down from 2.45:1 in the previous year[101] - Current ratio as of June 30, 2024, was 2.39:1, compared to 2.68:1 in the prior quarter[1] - The debt to EBITDA ratio improved to 1.86:1 from 2.18:1 year-over-year[101] - Interest expense for Q2 2024 was $3.2 million, relatively flat year-over-year, with a total debt reduction but a higher blended interest rate due to refinancing[128] - Income tax expense for Q2 2024 was $3.6 million, compared to an income tax benefit of $7.3 million in Q2 2023, with an effective tax rate of 28.2%[129]