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NCS Multistage Holdings, Inc. Announces Third Quarter 2019 Results
Third Quarter Results
Gross profit, which we define as total revenues less total cost of sales exclusive of depreciation and amortization, was
Selling, general and administrative (“SG&A”) expenses of
Net income was
Adjusted EBITDA was
Capital Expenditures and Liquidity
The Company incurred capital expenditures of
As of September 30, 2019, the Company had
Review and Outlook
NCS’s Chief Executive Officer, Robert Nipper, commented, “I’m very proud of the tremendous team we have at NCS and the results we were able to deliver during the third quarter. Despite a difficult market environment which, for example, saw the average U.S. land rig count fall by 7% on a sequential basis, we achieved 7% sequential total U.S. revenue growth and our eighth consecutive quarter of sequential U.S. product sales growth. Market conditions in
As we look forward to the fourth quarter, we expect a continued decline in rig count and completion activity in the U.S., as customers constrain activity to stay within their capital budgets. In
We made good progress during the third quarter in advancing initiatives undertaken to address the items that pressured our gross margin during the second quarter. There is still room to improve, and we continue to work to enhance the efficiency of our supply chain and commercialize new products that we believe will benefit our gross margin in the future. This is especially important in an environment with declining customer activity, as we face today, which creates significant competitive pricing pressure among oilfield services companies.
We made the difficult decision to reduce our workforce by 6% in July. We are highly focused on managing our spending as a company, and were able to reduce our SG&A by over 10% in the third quarter, as compared to the second quarter. We are again reducing our expected full year gross capital spending to between
As always, I want to thank each and every one of our employees for their efforts, actions, support and ideas. It is through this team, which delivers excellent operational performance and customer service every single day, that we are able to earn the right to work for our customers and drive continued innovation in our industry.”
Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBITDA Less Share-Based Compensation, Adjusted Net (Loss) Income, Adjusted Net (Loss) Earnings per Diluted Share and Free Cash Flow are non-GAAP financial measures. For an explanation of these measures and a reconciliation, refer to “Non-GAAP Financial Measures” below.
The Company will host a conference call to discuss its third quarter 2019 results on
An audio replay of the conference call will be available shortly after the conclusion of the call and will remain available for approximately seven days. It can be accessed by dialing (855) 859-2056 within
Forward Looking Statements
This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects” and similar references to future periods, or by the inclusion of forecasts or projections. Examples of forward-looking statements include, but are not limited to, statements we make regarding the outlook for our future business and financial performance. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, our actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause our actual results to differ materially from those in the forward-looking statements include regional, national or global political, economic, business, competitive, market and regulatory conditions and the following: declines in the level of oil and natural gas exploration and production activity within
Non-GAAP Financial Measures
EBITDA is defined as net (loss) income before interest expense, net, income tax expense and depreciation and amortization. Adjusted EBITDA is defined as EBITDA adjusted to exclude certain items which we believe are not reflective of ongoing operating performance or which, in the case of an impairment and share-based compensation, are non-cash in nature. Adjusted EBITDA margin represents Adjusted EBITDA as a percentage of total revenues. Adjusted EBITDA Less Share-Based Compensation is defined as Adjusted EBITDA minus share-based compensation expense. Adjusted Net (Loss) Income is defined as net (loss) income attributable to
EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted EBITDA Less Share-Based Compensation, Adjusted Net (Loss) Income, Adjusted Net (Loss) Earnings per Diluted Share and Free Cash Flow (our “non-GAAP financial measures”) are not defined under generally accepted accounting principles (“GAAP”), are not measures of net income, income from operations, cash provided by operating activities or any other performance measure derived in accordance with GAAP, and are subject to important limitations. Our non-GAAP financial measures may not be comparable to similarly titled measures of other companies in our industry and are not measures of performance calculated in accordance with GAAP. Our non-GAAP financial measures have important limitations as analytical tools and you should not consider them in isolation or as substitutes for analysis of our financial performance as reported under GAAP and they should not be considered as alternatives to net income (loss), cash provided by operating activities or any other performance measures derived in accordance with GAAP as measures of operating performance or as alternatives to cash flow from operating activities as measures of our liquidity.
The tables below set forth reconciliations of our non-GAAP financial measures to the most directly comparable measure of financial performance calculated under GAAP:
ADJUSTED NET (LOSS) INCOME AND ADJUSTED NET (LOSS) EARNINGS PER DILUTED SHARE
ADJUSTED EBITDA, ADJUSTED EBITDA MARGIN, AND ADJUSTED EBITDA LESS SHARE-BASED COMPENSATION
Source: NCS Multistage Holdings, Inc.