e Laboratories (US:CLB)2024-02-14 16:00Financial Performance - Total revenue for the year ended December 31, 2023, was $509.8 million, a 4.1% increase compared to $489.7 million in 2022[71] - Service revenue accounted for $371.9 million, representing 73.0% of total revenue, with a 7.2% increase from $347.0 million in 2022[71] - Product sales revenue decreased by 3% to $137.9 million, primarily due to a 21% decline in the U.S. land rig count[74] - Operating income rose to $54.6 million, a significant increase of 31.6% from $41.5 million in 2022[71] - Net income attributable to Core Laboratories Inc. was $36.7 million, an 88.5% increase compared to $19.5 million in 2022[71] - Diluted earnings per share increased to $0.78, reflecting an 85.7% rise from $0.42 in 2022[71] - Operating income for 2023 was $54.64 million, representing a 31.6% increase from $41.52 million in 2022[1] - Revenue from the Reservoir Description operating segment for the year ended December 31, 2023 was $333.3 million, an increase of 8% compared to 2022[144] Expenses and Costs - General and administrative expenses increased by 5.6% to $40.3 million, up from $38.1 million in 2022[71] - Cost of product sales for 2023 was $117.8 million, a 1% decrease from $119.4 million in 2022, with costs as a percentage of product sales revenue increasing to approximately 86%[102] - General and administrative expenses for 2023 were $40.3 million, a 6% increase from $38.1 million in 2022, primarily due to higher stock compensation expenses[103] Cash Flow and Debt - Cash provided by operating activities for 2023 was $24.8 million, slightly down from $25.0 million in 2022[117] - Free cash flow for the year ended December 31, 2023 was $14.2 million, compared to $14.7 million in 2022[120] - As of December 31, 2023, total long-term debt was $166.0 million, with a leverage ratio of 1.76 and an interest coverage ratio of 6.37[122] - Cash used in financing activities in 2023 was $18.4 million, primarily due to a net reduction in debt of $9.0 million[150] Market Conditions - The U.S. land-based rig count decreased approximately 21% at the end of 2023 compared to the end of 2022[96] - The geopolitical conflict between Russia and Ukraine caused significant volatility in crude oil prices during 2022 and into 2023, with average prices elevated in 2022 but decreasing in 2023[158] - The company expects crude-oil supply lines to remain more stable, although recent conflicts in the Middle East have caused some disruptions[158] Investments and Future Outlook - The company maintained annual capital expenditures between $10.0 million and $13.5 million for 2021, 2022, and 2023, significantly lower than pre-pandemic levels[69] - The company expects to continue investing in capital expenditures aligned with client demand, although the specific investment level for 2024 has not yet been determined[125] - The International Energy Agency reports that global demand for crude oil and natural gas remains high, but growth is expected to slow down in 2024 due to a weakening macroeconomic climate[126] Shareholder Returns - The company repurchased 113,792 shares of common stock for $2.2 million at an average price of $19.35 per share during 2023[91] - The company maintained a quarterly dividend of $0.01 per share throughout 2023[89] Tax and Compliance - Uncertain tax positions accrued as of December 31, 2023 amount to $3.5 million, with the timing of payment being uncertain[124] - The company had tax net operating loss carry-forwards in various jurisdictions of $32.8 million as of December 31, 2023[156] - The company has not recorded any material impairment charges related to long-lived assets during the years ended December 31, 2023, 2022, and 2021[133] Operational Insights - The inventory of drilled but uncompleted wells (DUC) in the U.S. declined from 4,577 at the end of 2022 to 4,374 at the end of 2023[95] - The company is involved in large-scale core analyses and reservoir fluids characterization studies in major oil-producing regions, including projects in Guyana, Suriname, and the Gulf of Mexico[128] - Revenue from the Production Enhancement segment for the year ended December 31, 2023 was $176.4 million, a decrease of 3% compared to 2022, primarily due to reduced drilling and completion activities in the U.S. land market[114] - Free cash flow decreased slightly by $0.5 million for the year ended December 31, 2023, primarily due to a slightly higher level of capital spending in 2023[151] - Revenue associated with certain customer contracts denominated in foreign currencies was adversely impacted by the devaluation of major currencies against the U.S. Dollar[144]