e Laboratories (US:CLB)2022-07-28 15:46Financial Data and Key Metrics Changes - In Q2 2022, Core Lab's revenue from continuing operations was $120.9 million, up approximately 5% from $115.3 million in the prior quarter and up almost 2% year-over-year [19][31] - Full company sequential margins for Q2 were 43%, reflecting operational leverage as global activity improves [10] - Income from continuing operations ex-items for the quarter was $5.5 million, up from $3.6 million last quarter, with earnings per diluted share from continuing operations ex-items at $0.12, up from $0.08 last quarter [31] Business Line Data and Key Metrics Changes - Revenue from the Reservoir Description segment was $75.8 million, slightly up compared to Q1, with operating income ex-items at $5 million and operating margins at 7% [51][53] - Production Enhancement revenue was $45.1 million, up 11% sequentially and year-over-year, with operating income ex-items at $3.9 million and operating margins at 9% [58] Market Data and Key Metrics Changes - Revenue from operations in Russia decreased approximately $800,000 sequentially and $2.3 million year-over-year, with a total decline of about $3.2 million in the first half of 2022 compared to 2021 [22] - The sharp devaluation of the Euro and British Pound lowered revenue by about $1 million in Q2 2022 compared to Q1 and by about $2.6 million compared to Q2 2021 [23] Company Strategy and Development Direction - Core Lab continues to execute on key strategic objectives by introducing new product and service offerings, maintaining a lean organization, and focusing on deleveraging [13] - The company aims to maximize free cash flow, return on invested capital, and return excess free cash to shareholders [15] Management's Comments on Operating Environment and Future Outlook - Management anticipates continued improvement in both business segments across most international arenas and in the U.S., despite headwinds from the conflict in Ukraine [9] - The company expects Reservoir Description revenue to improve by low-to-mid single digits in Q3 2022, while Production Enhancement revenue is projected to increase sequentially by mid-to-high single digits [46][47] Other Important Information - Cash from operating activities was $600,000, with free cash flow for the quarter being negative $2.6 million due to various factors including the impact of the Ukraine-Russia conflict [36][38] - The company expects capital expenditures for the full year 2022 to be in the range of $12 million to $13 million, maintaining strict capital discipline [39] Q&A Session Summary Question: What is the market potential for lithium extraction? - Management indicated that lithium will play a significant role in creating efficient batteries, with potential growth to 5% or even 10% of Core Lab's revenue over time [68] Question: Is the Helios product designed for specific regions? - The Helios product is applicable to any offshore well plug-and-abandonment program, with significant economic opportunities for cost savings [70] Question: What indicators are being monitored for international operations? - Management highlighted the international offshore rig count and data from Wood Mackenzie regarding FIDs as key indicators for future activity [88]