NCS Multistage(NCSM) - 2025 Q1 - Quarterly Results

NCS Multistage Holdings, Inc. First Quarter 2025 Results Financial & Operational Highlights NCS reported strong Q1 2025 results, with revenue reaching $50.0 million, net income $4.1 million, and Adjusted EBITDA $8.2 million Q1 2025 Key Financial Metrics (YoY, in millions) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenues | $50.0 | $43.9 | +14% | | Net Income | $4.1 | $2.1 | +95% | | Diluted EPS | $1.51 | $0.82 | +84% | | Adjusted EBITDA | $8.2 | $6.1 | +35% | | Adjusted Gross Margin | 44% | 40% | +400 bps | - The CEO noted that Q1 2025 total revenues and Adjusted EBITDA surpassed prior guidance, primarily led by strong performance in Canada[3] - The company's cash balance was $23.0 million with a total liquidity of $49.8 million as of March 31, 2025, an increase of $15.4 million from the previous year[8] - NCS has not experienced a significant impact from global trade tensions but acknowledges potential risks to commodity prices and activity levels for the second half of 2025 if tensions escalate[9] Detailed Financial Review Q1 2025 revenues increased 14% to $50.0 million, driven by Canadian and international sales, improving gross margin to 42% and net income to $4.1 million - YoY revenue growth was driven by increased Canadian product sales and higher services revenue across all geographic regions, partially offset by a decline in U.S. product sales due to project delays[12] - Sequentially, total revenues increased by 11% from Q4 2024, with a 26% rise in Canada offset by declines of 34% in international revenue and 13% in U.S. revenue[13] - Gross margin improved to 42% (Adjusted Gross Margin to 44%) due to higher-margin international work in the Middle East and North Sea, increased Canadian sales, and supply chain efficiencies[14] - SG&A expenses increased by $2.4 million YoY to $16.2 million, reflecting higher annual incentive bonus accruals, professional fees, and share-based compensation expense[15] Liquidity and Capital Position NCS maintained a strong balance sheet as of March 31, 2025, with $23.0 million cash, $49.8 million total liquidity, and $64.4 million net working capital Liquidity and Debt Profile (as of March 31, 2025, in millions) | Metric | Value | | :--- | :--- | | Cash | $23.0 | | Total Indebtedness | $7.6 | | ABL Facility Availability | $26.8 | | Total Liquidity | $49.8 | | Working Capital | $85.2 | - Net working capital increased to $64.4 million at the end of Q1 2025 from $56.4 million at year-end 2024, mainly due to higher accounts receivable and lower accrued expenses after paying 2024 incentive bonuses[21] - Cash flow from operating activities was a use of $(1.6) million, a $0.2 million improvement from Q1 2024 Free cash flow was a use of $(2.1) million[19] - Net capital expenditures were $0.5 million for the first quarter of 2025, compared to $0.1 million in the same period of 2024[22] Geographic Performance Canada led Q1 2025 performance with 19% revenue growth to $37.7 million, comprising 75% of total revenue, while U.S. revenue declined and international grew 34% Revenues by Geographic Area (in thousands) | Region | Q1 2025 | Q1 2024 | YoY Change | | :--- | :--- | :--- | :--- | | United States | $9,372 | $10,011 | -6.4% | | Canada | $37,718 | $31,669 | +19.1% | | Other Countries | $2,915 | $2,178 | +33.8% | | Total Revenues | $50,005 | $43,858 | +14.0% | - Canada's contribution to total revenue increased to 75.4% in Q1 2025 from 72.2% in Q1 2024[36] - The increase in international service revenues was driven by Middle East tracer diagnostics projects and North Sea fracturing systems sales and services[12] Financial Statements Q1 2025 financial statements detail 14% revenue growth to $50.0 million, net income of $4.5 million, total assets of $155.1 million, and total equity of $120.8 million Condensed Consolidated Statements of Operations Q1 2025 Statement of Operations Highlights (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Revenues | $50,005 | $43,858 | | Gross Profit | $21,140 | $16,955 | | Income from Operations | $4,289 | $2,501 | | Net Income | $4,454 | $2,553 | | Net Income Attributable to NCS | $4,056 | $2,070 | | Diluted EPS | $1.51 | $0.82 | Condensed Consolidated Balance Sheets Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $22,997 | $25,880 | | Total Current Assets | $109,041 | $105,570 | | Total Assets | $155,118 | $152,812 | | Total Current Liabilities | $23,865 | $25,419 | | Total Liabilities | $34,282 | $36,703 | | Total Equity | $120,836 | $116,109 | Condensed Consolidated Statements of Cash Flows Q1 2025 Cash Flow Highlights (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(1,645) | $(1,880) | | Net cash used in investing activities | $(451) | $(136) | | Net cash used in financing activities | $(790) | $(630) | | Net change in cash | $(2,883) | $(2,716) | | Cash at end of period | $22,997 | $14,004 | Non-GAAP Financial Measures NCS provides non-GAAP measures including Adjusted Gross Profit, Adjusted EBITDA, Free Cash Flow, and Net Working Capital to assess core business performance Reconciliation of Adjusted Gross Profit Adjusted Gross Profit Reconciliation (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Gross Profit (GAAP) | $21,140 | $16,955 | | Gross Margin (GAAP) | 42% | 39% | | Add: D&A in cost of sales | $715 | $616 | | Adjusted Gross Profit | $21,855 | $17,571 | | Adjusted Gross Margin | 44% | 40% | Reconciliation of Adjusted EBITDA Adjusted EBITDA Reconciliation (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Income (GAAP) | $4,454 | $2,553 | | D&A, Interest, Taxes | $1,884 | $1,827 | | EBITDA | $6,540 | $4,380 | | Adjustments (Share-based comp, etc.) | $1,674 | $1,697 | | Adjusted EBITDA | $8,214 | $6,077 | | Adjusted EBITDA Margin | 16% | 14% | Reconciliation of Free Cash Flow Free Cash Flow Reconciliation (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(1,645) | $(1,880) | | Less: Purchases of property & equipment | $(464) | $(312) | | Plus: Proceeds from sales of property & equipment | $13 | $176 | | Free Cash Flow | $(2,096) | $(2,016) | Reconciliation of Net Working Capital Net Working Capital Reconciliation (in thousands) | Line Item | March 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Working capital (GAAP) | $85,176 | $80,151 | | Less: Cash and cash equivalents | $(22,997) | $(25,880) | | Add: Current maturities of long term debt | $2,250 | $2,141 | | Net working capital | $64,429 | $56,412 |