Expro(US:XPRO)2025-02-25 21:16PART I Business Expro is a global energy services provider offering comprehensive well life cycle solutions across four geographic segments, with FY2024 revenue of $1.71 billion - Expro is a leading provider of energy services with approximately 8,500 employees, providing solutions to exploration and production companies in over 50 countries16 Consolidated Revenue by Segment (2022-2024) | Segment | 2024 Revenue ($ thousands) | 2023 Revenue ($ thousands) | 2022 Revenue ($ thousands) | 2024 % of Total | 2023 % of Total | | :--- | :--- | :--- | :--- | :--- | :--- | | NLA | 566,048 | 511,800 | 499,813 | 33.0% | 33.8% | | ESSA | 564,440 | 520,951 | 389,342 | 33.0% | 34.4% | | MENA | 332,216 | 233,528 | 201,495 | 19.4% | 15.4% | | APAC | 250,098 | 246,485 | 188,768 | 14.6% | 16.3% | | Total | 1,712,802 | 1,512,764 | 1,279,418 | 100.0% | 100.0% | - The company's portfolio spans well construction, well flow management, subsea well access, and well intervention and integrity solutions161920 - One major customer accounted for approximately 10.5% of revenue in 2024 and 12.5% in 202343 Safety Performance Metrics (2022-2024) | Metric | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | LTIF (Lost Time Injury Frequency) | 0.00 | 0.06 | 0.36 | | TRCF (Total Recordable Case Frequency) | 1.05 | 0.61 | 1.07 | Risk Factors The company faces diverse operational, financial, legal, regulatory, and stock-related risks, including oil and gas industry volatility, physical hazards, and compliance challenges - Business depends on the level of activity in the oil and gas industry, which is significantly affected by volatile commodity prices, global economic conditions, and geopolitical events like the war in Ukraine and conflicts in the Middle East67 - Operations are subject to physical dangers and hazards inherent in the oil and gas industry, which can cause personal injury, loss of life, and significant financial losses not fully covered by insurance or indemnification707172 - The company is exposed to cybersecurity threats, and a successful attack could lead to disclosure of confidential information, damage to reputation, and other financial costs919293 - As a Dutch company, shareholder rights may differ from those in U.S. jurisdictions, and provisions in the articles of association and Dutch law may discourage takeover attempts114118 - Compliance with complex laws like the U.S. Foreign Corrupt Practices Act (FCPA) and trade sanctions is required, and violations can result in severe penalties107108 Unresolved Staff Comments The company reports no unresolved staff comments from the Securities and Exchange Commission - None128 Cybersecurity The company maintains a comprehensive cybersecurity risk management program overseen by the CIO and Board, with no material threats identified in the last fiscal year - The company has implemented processes to assess, identify, and manage cybersecurity risks, managed by a dedicated Cybersecurity and Infrastructure team led by the Chief Information Officer129130 - The Board of Directors, through its Nominating and Governance Committee, oversees cybersecurity risks and receives periodic updates from the CIO131 - In the last fiscal year, no identified risks from cybersecurity threats have materially affected the company, but ongoing threats are reasonably likely to pose a material risk in the future131 Properties Expro operates numerous global manufacturing and service facilities, including key corporate offices and major hubs in Houston, Reading, Aberdeen, and Lafayette - The company maintains several manufacturing and service facilities worldwide, with key corporate offices in Houston, TX (leased) and Reading, UK (leased)133134 - The largest manufacturing facilities are located in Aberdeen, Scotland (owned/leased) and Lafayette, Louisiana (owned), where a substantial portion of service equipment is designed and assembled134 Legal Proceedings The company settled an $8.0 million SEC investigation for FCPA violations in April 2023 and had no material loss contingencies as of December 31, 2024 - Information on legal proceedings is included in Note 18 to the consolidated financial statements135 - In April 2023, the company settled with the SEC regarding an investigation into possible FCPA violations in West Africa. The company paid $8.0 million in disgorgement, interest, and penalties in the second quarter of 2023489 - As of December 31, 2024, the company had no material accruals for loss contingencies490 Mine Safety Disclosures This item is not applicable to the company - Not applicable136 PART II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Expro's common stock trades on the NYSE, with 116.4 million shares outstanding and an active $100 million stock repurchase program - The company's common stock is traded on the New York Stock Exchange (NYSE) under the symbol 'XPRO'138 - The Board approved an extension to its stock repurchase program, authorizing up to $100.0 million in repurchases through November 24, 2025. During 2024, the company repurchased 1.2 million shares for a total cost of $14.2 million141 - As of December 31, 2024, approximately $75.8 million remained authorized for repurchases under the program143 Share Repurchases for Q4 2024 | Period | Total Number of Shares Purchased | Average Price Paid per Share | Maximum Dollar Value that may yet be Purchased | | :--- | :--- | :--- | :--- | | Oct 1 - Oct 31 | -- | $ -- | $ 89,987,162 | | Nov 1 - Nov 30 | -- | $ -- | $ 89,987,162 | | Dec 1 - Dec 31 | 1,200,000 | $ 11.80 | $ 75,831,912 | Reserved This item is reserved and contains no information Management's Discussion and Analysis of Financial Condition and Results of Operations In FY2024, Expro's revenue grew 13.2% to $1.71 billion, achieving $51.9 million net income and $347.4 million Adjusted EBITDA, with a stable 2025 market outlook Financial Highlights (FY 2024 vs. FY 2023) | Metric | FY 2024 | FY 2023 | Change | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $1,712.8 M | $1,512.8 M | +$200.0 M | +13.2% | | Net Income (Loss) | $51.9 M | ($23.4 M) | +$75.3 M | N/A | | Adjusted EBITDA | $347.4 M | $248.9 M | +$98.5 M | +39.6% | | Adjusted EBITDA Margin | 20.3% | 16.5% | +3.8 p.p. | N/A | | Net Cash from Operations | $169.5 M | $138.3 M | +$31.2 M | +22.6% | - The market outlook for 2025 remains stable, with commodity prices and energy security requirements supporting continued upstream investments. Declining onshore investment is expected to be offset by healthy growth in deepwater and offshore segments173 - Total available liquidity as of December 31, 2024, was $320.3 million, including $184.7 million in cash and $135.6 million available under the revolving credit facility224 - Capital expenditures for 2025 are estimated to be between $120.0 million and $130.0 million, compared to $143.6 million in 2024225 Reconciliation of Net Income (Loss) to Adjusted EBITDA (in thousands) | | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Net income (loss) | $ 51,918 | $ (23,360) | $ (20,145) | | Income tax expense | $ 46,048 | $ 44,307 | $ 41,247 | | Depreciation and amortization expense | 163,468 | 172,260 | 139,767 | | Severance and other expense | 17,048 | 14,388 | 7,825 | | Merger and integration expense | 16,334 | 9,764 | 13,620 | | Other expenses (income), net | 105 | (1,234) | (3,149) | | Stock-based compensation expense | 26,352 | 19,574 | 18,486 | | Foreign exchange losses | 13,613 | 9,238 | 8,341 | | Interest and finance expense, net | 12,517 | 3,943 | 241 | | Adjusted EBITDA | $ 347,403 | $ 248,880 | $ 206,233 | Quantitative and Qualitative Disclosures About Market Risk The company faces foreign currency, interest rate, and credit risks, with potential impacts of $0.9 million from USD fluctuations and $6.1 million from interest rate changes - The company's primary foreign currency cash flow exposures are to the British pound and Norwegian kroner. A hypothetical 5% appreciation/depreciation in the USD would result in a change in net income of approximately $0.9 million257258 - Borrowings under the credit facility bear variable interest rates based on SOFR. A 5% change in interest rates would have an approximate impact of $6.1 million on results of operations and cash flows259 - Credit risk is concentrated in the oil and gas industry. As of December 31, 2024, accounts receivable in Algeria and the KSA each represented approximately 12.8% of the net accounts receivable balance261 Financial Statements and Supplementary Data This section presents the company's audited consolidated financial statements for 2022-2024, including notes on accounting policies, acquisitions, and an unqualified audit opinion Consolidated Statement of Operations Highlights (in thousands) | | 2024 | 2023 | 2022 | | :--- | :--- | :--- | :--- | | Total revenue | $ 1,712,802 | $ 1,512,764 | $ 1,279,418 | | Operating income | $ 94,166 | $ 10,803 | $ 2,463 | | Net income (loss) | $ 51,918 | $ (23,360) | $ (20,145) | | Diluted earnings (loss) per share | $ 0.45 | $ (0.21) | $ (0.18) | Consolidated Balance Sheet Highlights (in thousands) | | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total Current Assets | $ 964,046 | $ 851,600 | | Total Assets | $ 2,333,541 | $ 2,013,007 | | Total Current Liabilities | $ 484,430 | $ 488,851 | | Total Liabilities | $ 842,057 | $ 717,134 | | Total Stockholders' Equity | $ 1,491,484 | $ 1,295,873 | - On May 15, 2024, the company acquired Coretrax for an estimated consideration of $186.7 million, consisting of cash, equity, and contingent consideration. The acquisition expands the company's Well Construction and Well Intervention & Integrity solutions384385 - The company increased its revolving credit facility to a total of $340.0 million in May 2024 to partially finance the Coretrax acquisition. As of Dec 31, 2024, $121.1 million was outstanding473474 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure The company reports no changes in or disagreements with its accountants regarding accounting principles or financial disclosure - None555 Controls and Procedures Management concluded disclosure controls and internal controls over financial reporting were effective as of December 31, 2024, excluding the Coretrax acquisition - The CEO and CFO concluded that disclosure controls and procedures were effective as of December 31, 2024556 - Management concluded that internal control over financial reporting was effective as of December 31, 2024. The assessment excluded the internal controls of Coretrax, acquired on May 15, 2024558559 - No changes in internal control over financial reporting occurred during the fourth quarter of 2024 that have materially affected, or are reasonably likely to materially affect, these controls561 Other Information No director or officer adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements in Q4 2024 - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended December 31, 2024563 Disclosure Regarding Foreign Jurisdictions that Prevent Inspections This item is not applicable to the company - None564 PART III Directors, Executive Officers and Corporate Governance Information on directors, executive officers, and corporate governance is incorporated by reference from the 2025 proxy statement - Information required by this item is incorporated by reference from the company's definitive proxy statement to be filed within 120 days after December 31, 2024566 Executive Compensation Executive compensation details are incorporated by reference from the company's definitive proxy statement - Information required by this item is incorporated by reference from the company's definitive proxy statement to be filed within 120 days after December 31, 2024567 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Beneficial ownership and equity compensation plan information is incorporated by reference from the company's definitive proxy statement - Information required by this item is incorporated by reference from the company's definitive proxy statement to be filed within 120 days after December 31, 2024568 Certain Relationships and Related Transactions, and Director Independence Information on related party transactions and director independence is incorporated by reference from the company's definitive proxy statement - Information required by this item is incorporated by reference from the company's definitive proxy statement to be filed within 120 days after December 31, 2024569 Principal Accounting Fees and Services Details on principal accounting fees and services are incorporated by reference from the company's definitive proxy statement - Information required by this item is incorporated by reference from the company's definitive proxy statement to be filed within 120 days after December 31, 2024570 PART IV Exhibits and Financial Statement Schedules This section lists all financial statements, schedules, and exhibits filed with the Form 10-K, including various agreements and certifications - This section provides an index of all exhibits filed or furnished with the report, including agreements related to acquisitions, debt facilities, and executive compensation plans573574 - Certifications by the CEO and CFO pursuant to the Securities Exchange Act of 1934 and Sarbanes-Oxley Act are filed as exhibits579 Form 10–K Summary The company has not provided a summary for this item in the Form 10-K - None580