e Laboratories (US:CLB)2023-11-01 16:00Financial Performance - Total revenue for Q3 2023 was $125.3 million, a decrease of 2% from $127.9 million in Q2 2023[115] - Net income for Q3 2023 was $9.2 million, down 60% from $22.9 million in Q2 2023[115] - Operating income for Q3 2023 was $14.7 million, a decline of 22% compared to $18.9 million in Q2 2023[115] - For the nine months ended September 30, 2023, total revenue was $381.6 million, a 5% increase from $362.2 million in the same period of 2022[116] - Net income attributable to Core Laboratories Inc. for the nine months ended September 30, 2023, was $34.5 million, a significant increase of 171% from $12.7 million in the same period of 2022[116] - For the three months ended September 30, 2023, service revenue was $92.9 million, an increase of 6% year-over-year[139] - Total revenue for the same period was $125.3 million, showing a slight decrease of 0% compared to $125.9 million in the previous year[134] - Operating income for the three months ended September 30, 2023, was $14.7 million, remaining relatively flat compared to $14.6 million in the previous year[134] - Net income attributable to Core Laboratories Inc. for the three months ended September 30, 2023, was $9.3 million, representing a 23% increase from $7.5 million in the prior year[134] Revenue Breakdown - Services revenue accounted for 74% of total revenue in Q3 2023, while product sales made up 26%[115] - Cost of product sales was $27.6 million for the three months ended September 30, 2023, a decrease of 12% year-over-year[142] - Revenue from the Reservoir Description segment was $85.1 million for the three months ended September 30, 2023, an increase of 8% year-over-year[178] - Revenue from the Production Enhancement segment was $40.2 million for the three months ended September 30, 2023, a decrease of 14% year-over-year[181] - For the nine months ended September 30, 2023, product sales revenue totaled $104.4 million, remaining relatively flat compared to the same period in the prior year[166] Expenses and Margins - Cost of services for Q3 2023 was $69.0 million, representing 74% of service revenue, an improvement from 77% in the same period last year[119] - General and administrative expenses for Q3 2023 were $9.5 million, an increase of 63% sequentially from $5.8 million in Q2 2023[120] - General and Administrative (G&A) expense for the nine months ended September 30, 2023, was $31.6 million, an increase of $2.2 million from $29.4 million in the same period in 2022, mainly due to higher stock compensation expenses[169] - Operating margins improved to 12% for the nine months ended September 30, 2023, up from 7% in the same period of 2022[151] - Operating margins for the three months ended September 30, 2023, were 4%, down from 9% in the same period last year[183] Cash Flow and Financing - Cash flows provided by operating activities for the three months ended September 30, 2023, were $5.4 million, a decrease of 54% from $11.7 million in the same period in 2022[187] - Free cash flow for the nine months ended September 30, 2023, was $(2.5) million, compared to $3.6 million in the same period in 2022[190] - Cash flows used in financing activities for the nine months ended September 30, 2023, were nominal, driven by a $6.0 million net increase in long-term debt[188] Ratios and Financial Health - The current ratio improved to 2.71:1 in Q3 2023 from 2.23:1 in the previous quarter[114] - The debt to EBITDA ratio decreased to 2.26:1 in Q3 2023 from 2.81:1 in Q2 2023[114] - The current ratio improved to 2.71:1 from 2.45:1 year-over-year[136] - The debt to EBITDA ratio increased slightly to 2.26:1 from 2.18:1 year-over-year[136] Tax and Interest - The effective tax rate for the three months ended September 30, 2023, was 20%, compared to 33.5% for the same period in 2022[147] - Interest expense for the nine months ended September 30, 2023, was $9.8 million, up from $8.5 million in the same period of 2022, primarily due to rising interest rates[146] Market Conditions and Outlook - The geopolitical conflict between Russia and Ukraine has caused significant volatility in crude oil prices, impacting trading patterns and supply chains[130] - The company anticipates that crude oil commodity prices will remain stable or increase due to high global demand for crude oil and natural gas[129] - The company expects client activities related to increasing oil and gas reserves and production levels to continue to rise in the coming years[131] Shareholder Actions - The company repurchased 17,041 shares of common stock for an aggregate purchase price of $0.4 million during the nine months ended September 30, 2023[159] - The company continues to maintain a quarterly dividend of $0.01 per share[157]