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Expro Announces Fourth Quarter and Full Year 2023 Results

Strong operational performance and profitable growth driven by a rebound of NLA activity and acquisition of PRT Offshore.

Revenue of $407 million for the fourth quarter, up 10% sequentially. Revenue of $1,513 million for the full year, up 18% year-over-year.

Net loss of $12 million for the fourth quarter as compared to net loss of $14 million for the third quarter of 2023. Net loss of $23 million for the full year as compared to net loss of $20 million for 2022.

Adjusted EBITDA1 of $85 million for the fourth quarter, up 70% sequentially. Adjusted EBITDA margin1 of 21%, up sequentially from 14%. Adjusted EBITDA of $249 million for the full year as compared to $206 million for 2022. Adjusted EBITDA margin1 of approximately 16% for both 2023 and 2022.

Provides 2024 revenue and Adjusted EBITDA margin outlook

Expro Group Holdings N.V. (NYSE: XPRO) (the “Company” or “Expro”) today reported financial and operational results for the three months and year ended December 31, 2023.

Fourth Quarter 2023 Financial Highlights

 

Revenue was $407 million compared to revenue of $370 million in the third quarter of 2023, a sequential increase of $37 million, or 10%, primarily driven by a rebound of activity in North and Latin America (“NLA”) and the acquisition of PRT Offshore in the beginning of the fourth quarter.

 

Net loss for the fourth quarter of 2023 was $12 million, or $0.11 per diluted share, compared to a net loss of $14 million, or $0.13 per diluted share, for the third quarter of 2023. Adjusted net income1 for the fourth quarter of 2023 was $7 million, or $0.06 per diluted share, compared to an adjusted net loss for the third quarter of 2023 of $6 million, or $0.06 per diluted share. Results for the fourth and third quarter of 2023 include foreign exchange losses of $5 million and $4 million, respectively, or approximately $0.04 per diluted share, for both periods.

 

Adjusted EBITDA was $85 million, a sequential increase of $35 million, or 70%, driven by higher activity during the fourth quarter and lower unrecoverable costs within our light well intervention (“LWI”) business. Adjusted EBITDA margin for the fourth and third quarter of 2023 was 21% and 14%, respectively. Excluding $4 million and $15 million of unrecoverable LWI-related costs during the three months ended December 31, 2023 and September 30, 2023, respectively, Adjusted EBITDA would have been $89 million and $65 million and Adjusted EBITDA margin would have been 22% and 18%.

 

The Company suspended vessel-deployed LWI operations during the third quarter of 2023 following a wire failure on the main crane of a third-party owned vessel working with Expro while the crane was suspending the subsea module of Expro’s vessel-deployed LWI system. We are continuing to work with the relevant stakeholders and independent experts to assess the incident. The well control package and lubricator components of this vessel-deployed LWI system have been safely recovered, but we have determined not to participate in the recovery of the subsea module from the seabed. We are continuing to determine the path forward for our vessel-deployed LWI operations, including what alternative service delivery options and service partner options are available to the Company, and the timing and cost (including potential damage claims) of completing customer work scopes for which our vessel-deployed LWI system was integral. At this time, we are not able to assess the timing and potential cost of completing customer work scopes but do not expect such costs to be material to Expro’s financial results.

 

 

Net cash provided by operating activities for the fourth quarter of 2023 was $33 million compared to net cash provided by operating activities of $59 million for the third quarter of 2023. The decrease was primarily due to an increase in working capital of $60 million, partially offset by an increase in Adjusted EBITDA of $35 million. Adjusted cash flow from operations1 for the fourth quarter of 2023 was $43 million compared to $64 million for the third quarter of 2023.

1. A non-GAAP measure.

Full Year 2023 Financial Highlights

 

Revenue was $1,513 million for the year ended December 31, 2023, an increase of $234 million, or 18%, compared to $1,279 million for the year ended December 31, 2022. Activity and revenue across all geography-based operating segments increased during the year ended December 31, 2023, most notably in Europe and Sub-Saharan Africa (“ESSA”).

 

Net loss was $23 million for the year ended December 31, 2023, or $0.21 per diluted share, compared to a net loss of $20 million, or $0.18 per diluted share, for the year ended December 31, 2022. Adjusted net income for the year ended December 31, 2023 was $20 million, or $ 0.19 per diluted share, compared to adjusted net income for the year ended December 31, 2022 of $19 million, or $ 0.18 per diluted share.

 

Adjusted EBITDA increased by $43 million, or 21%, to $249 million for the year ended December 31, 2023 from $206 million for the prior year. The increase in Adjusted EBITDA is primarily attributable to higher revenue and a more favorable activity mix. Adjusted EBITDA margin was approximately 16% for both 2023 and 2022, respectively. Adjusted EBITDA for the year ended December 31, 2023 includes unrecoverable LWI-related costs in Asia Pacific (“APAC”) of $36 million. Adjusted EBITDA for the year ended December 31, 2022 includes unrecoverable LWI-related costs of $28 million. Excluding unrecoverable LWI-related costs, Adjusted EBITDA for the years ended December 31, 2023 and 2022 would have been $285 million and $234 million, and Adjusted EBITDA margin would have been 19% and 18%, respectively.

 

 

Net cash provided by operating activities for the year ended December 31, 2023 was $138 million compared to $80 million for year ended December 31, 2022, primarily due to an increase in Adjusted EBITDA (as referenced above) and favorable movement in working capital, partially offset by higher payments for income taxes. Adjusted cash flow from operations for the year ended December 31, 2023 was $170 million compared to $115 million for year ended December 31, 2022.

Michael Jardon, Chief Executive Officer, noted, “Expro has delivered strong fourth quarter financial results with revenue and Adjusted EBITDA exceeding our most recent guidance ranges. We begin 2024 in a strong position. As activity is strengthening, we are continuing to see a positive demand trend for our services and solutions and believe that the energy services sector and Expro's business are in the early phase of a multi-year growth cycle.

“Earlier this month we announced that Expro has entered into a definitive agreement to acquire Coretrax, a technology leader in performance drilling tools and wellbore cleanup, well integrity and production optimization solutions. Coretrax has a complementary offering to Expro with little overlap and will bolster the portfolio of technology-enabled services and solutions offered through our Well Construction and Well Intervention & Integrity product lines, adding significant value to our clients from innovative technologies that reduce risk and cost, optimize drilling efficiency, extend the life of existing well stock, and optimize production.

“We also celebrated 40 years since the launch of our first subsea test tree system. Since then Expro has remained at the forefront of subsea landing string technology. Recognizing our dedication to subsea well access applications, Expro was named Intervention Champion of the Year at the OWI Global Awards 2023 that was held in November. Our capabilities in this space have also been bolstered with the recent acquisition of PRT Offshore at the beginning of the fourth quarter of 2023 and we are already making significant progress on our integration.

“We built a healthy order book in 2023, capturing strategically important contract wins. As we look ahead, we are well positioned to support our customers as activity ramps up across our regions and product lines. I am very proud of the team of experts throughout the company and what they have accomplished. We believe our business is well positioned to be a leading provider of services and solutions in the international and offshore markets while delivering on the financial and other objectives of the company in the years to follow.

“For 2024, we expect improving profitability to drive improved cash flow generation as we capitalize on tailwinds in our industry. Based on our strong performance in 2023 and a positive activity outlook, we currently anticipate generating revenues of between $1,600 million to $1,700 million in 2024. Adjusted EBITDA in 2024 is expected to be between $325 million and $375 million, and Adjusted EBITDA margin is expected to be between 20% and 22%. Full-year guidance assumes our proposed acquisition of Coretrax will be completed at the beginning of the third quarter. Consistent with historical patterns, revenue and profitability in the first quarter of 2024 are expected to be negatively impacted by the winter season in the Northern Hemisphere and the budget cycles of our national oil company customers. First quarter revenue is expected to be within a range of $365 million and $375 million. First quarter Adjusted EBITDA is expected to be within a range of $63 million and $73 million and Adjusted EBITDA margin is expected to be approximately 18%.”

Notable Awards and Achievements

Expro was named Energy Transition Pioneer of the Year at the OWI Global Awards 2023, recognizing its commitment to sustainable energy solutions. This recognition reflects Expro’s proactive efforts to contribute to a cleaner and more sustainable future. The company also won Intervention Champion of the Year recognizing Expro's commitment to Subsea Well Access. In 2023 we achieved over 40 years of Subsea Test Tree Assemblies (“SSTTA”) operations and more than 3,000 subsea deployments across exploration and appraisal, completion, and intervention applications, building a strong reputation and market share that is supported by the industry’s largest large-bore global SSTTA fleet.

Expro’s Tubular Running Services (“TRS”) business accomplished an industry milestone in the U.S. Gulf of Mexico by successfully completing an operator’s well using a fully non-marking completion running package – a significant achievement in the field.

This tubular running package provides the industry’s only truly non-marking tubular running solution, which helps preserve well integrity and extends the life cycle of the well. This was also the first deployment of the Collar Load Support (CLS™) System for Stands in the region, in which the performance of the system exceeded customer expectations. The success of this completion run was the culmination of extensive planning and testing and is another example of Expro’s ability to provide solutions and positive results for the industry’s most complex wells.

Expro has been awarded a Corporate Frame Agreement to deliver well testing services for Equinor in the Norwegian Continental Shelf. The four-year contract, with the potential of three two-year options, builds on Expro’s previous seven-year agreement. The scope of work includes well flow management and production optimization services to enhance Equinor’s assets across completion, intervention, production, and abandonment operations.

Building on the Corporate Frame Agreement, the work scope will see the delivery of hydraulic intervention well services using Expro’s innovative CoilHose™ Light Well Circulation System (“LWCS”) that is designed to provide a more efficient and lower operational carbon footprint approach to operations. A significant portion of the contract is directly linked to a demonstrable commitment to a low carbon plan, allowing Expro to implement its environmental capabilities with Equinor and further enhance the strength and depth of this partnership.

In the Middle East and North Africa, Expro’s Automated Bucking and Catwalk system delivered improved safety and record efficiency at one of its client’s challenging wells. Expro was contracted to provide a high quality, low risk tubular running services to its clients’ onshore fleet of drilling rigs. Marking an operational first for the triple catwalk in the United Arab Emirates, on the first deployment of its TRS system, Expro set a record for instantaneous tripping speed and the second-best performance overall tripping speed on 18 5/8” tubulars. The overall rate was more than twice that of the average run in the same field. The client extended their appreciation to the TRS crew along with the rig team for concluding a very challenging 18 5/8” job with reduced safety exposure to personnel and a green safety record.

Finally, in the Asia Pacific region, Expro completed the deepest deployment of MK VI CoilHose™, coupled with a successful N2 lifting application in a remote location offshore New Zealand. This marked the first-ever MK VI CoilHose™ deployment in APAC, reaching an impressive depth of 8,650 feet (2,637 meters), surpassing depths achieved globally by 25%. The CoilHose™ solution provided a swift rig-up time compared to traditional coil tubing, minimizing planning and operational duration. This streamlined approach not only reduces safety risks but also lessens the environmental impact during well interventions.

Segment Results

Unless otherwise noted, the following discussion compares the quarterly results for the fourth quarter of 2023 to the results for the third quarter of 2023.

North and Latin America (NLA)

Revenue for the NLA segment was $145 million for the three months ended December 31, 2023, an increase of $40 million, or 38%, compared to $105 million for the three months ended September 30, 2023. The increase was primarily due to additional subsea well access revenue following the acquisition of PRT Offshore at the beginning of the fourth quarter, higher well flow management revenue in Mexico, and higher well construction revenue in the U.S. due to increased customer activity.

Segment EBITDA for the NLA segment was $44 million, or 30% of revenues, during the three months ended December 31, 2023, compared to $20 million, or 19% of revenues, during the three months ended September 30, 2023. The increase of $24 million in Segment EBITDA was attributable to higher activity and the increase in Segment EBITDA margin was attributable to a more favorable activity mix during the three months ended December 31, 2023.

Europe and Sub-Saharan Africa (ESSA)

Revenue for the ESSA segment was $134 million for the three months ended December 31, 2023, a decrease of $1 million, or 1%, compared to $135 million for the three months ended September 30, 2023. The decrease in revenues was primarily driven by lower well flow management revenue in Congo, partially offset by higher well flow management and subsea well access revenue in Equatorial Guinea.

Segment EBITDA for the ESSA segment was $41 million, or 31% of revenues, for the three months ended December 31, 2023, an increase of $2 million, or 5%, compared to $39, or 29% of revenues, for the three months ended September 30, 2023. The increase in Segment EBITDA and Segment EBITDA margin was primarily attributable to a more favorable activity mix during the three months ended December 31, 2023.

Middle East and North Africa (MENA)

Revenue for the MENA segment was $65 million for the three months ended December 31, 2023, an increase of $7 million, or 13%, compared to $58 million for the three months ended September 30, 2023. The increase in revenue was driven by higher well flow management services revenue in Algeria and the Kingdom of Saudi Arabia and by higher well construction revenue in Morocco.

Segment EBITDA for the MENA segment was $21 million, or 33% of revenues, for the three months ended December 31, 2023, an increase of $4 million, or 26%, compared to $17 million, or 29% of revenues, for the three months ended September 30, 2023. The increase in Segment EBITDA and Segment EBITDA margin was primarily due to higher activity and a more favorable activity mix during the three months ended December 31, 2023.

Asia Pacific (APAC)

Revenue for the APAC segment was $62 million for the three months ended December 31, 2023, a decrease of $9 million, or 13%, compared to $71 million for the three months ended September 30, 2023. The decrease in revenue was primarily due to lower subsea well access revenue in Australia, where we suspended vessel-deployed LWI operations, and China, partially offset by higher subsea well access revenue in Malaysia and well flow management revenue in Malaysia and Australia.

Segment EBITDA for the APAC segment was $5 million, or 9% of revenues, for the three months ended December 31, 2023, an increase of $9 million compared to ($4) million, or (6)% of revenues, for the three months ended September 30, 2023. The increase in Segment EBITDA (despite the decrease in revenues) was primarily due to lower costs within our LWI business during the three months ended December 31, 2023 compared to the three months ended September 30, 2023. For the three months ended December 31, 2023, APAC Segment EBITDA includes unrecoverable LWI-related costs of $4 million. Segment EBITDA for the three months ended September 31, 2023 includes unrecoverable LWI-related costs of $15 million. Excluding unrecoverable LWI-related costs, Segment EBITDA for the fourth and third quarter of 2023 would have been $9 million or 15% of revenue and $11 million or 15% of revenue, respectively.

Other Financial Information

The Company’s capital expenditures totaled $37 million in the fourth quarter of 2023 and approximately $122 million for the full year 2023. Expro plans for capital expenditures in the range of approximately $130 million to $140 million for 2024.

As of December 31, 2023, Expro’s consolidated cash and cash equivalents, including restricted cash, totaled $152 million. The Company had outstanding debt of $20 million as of December 31, 2023. The Company’s total liquidity as of December 31, 2023 was $299 million. Total liquidity includes $147 million available for drawdowns as loans under the Company’s revolving credit facility.

Depreciation and amortization expense was $63 million for the fourth quarter of 2023 compared to $37 million for the third quarter of 2023. The increase was primarily due to $19 million of accelerated depreciation expense related to the subsea module (“SSM”) of Expro’s vessel-deployed LWI system and related equipment.

On October 25, 2023, the Company’s Board of Directors (the “Board”) approved an extension to the stock repurchase program first approved on June 16, 2022. Pursuant to the extended stock repurchase program, the Company is authorized to acquire up to $100 million of its outstanding common stock from October 25, 2023 through November 24, 2024. During the year ended December 31, 2023, under the Stock Repurchase Program we repurchased approximately 1 million shares of our common stock at an average price of $16.70 for a total cost of approximately $20 million, including shares repurchased prior to the extension of the Stock Repurchase Program. During the year ended December 31, 2022, we repurchased 1 million shares at an average price of $11.81 per share, for a total cost of $13 million under the preceding program.

Expro’s provision for income taxes was $13 million for both the fourth quarter of 2023 and the prior quarter primarily due to a similar mix of taxable profits between jurisdictions. The Company’s effective tax rate on a U.S. generally accepted accounting principles (“GAAP”) basis for the three months and year ended December 31, 2022 also reflects liability for taxes in certain jurisdictions that tax on an other than pre-tax profits basis, including so-called “deemed profits” regimes.

The financial measures provided that are not presented in accordance with GAAP are defined and reconciled to their most directly comparable GAAP measures. Please see “Use of Non-GAAP Financial Measures” and the reconciliations to the nearest comparable GAAP measures.

Additionally, downloadable financials are available on the Investor section of www.expro.com.

Conference Call

The Company will host a conference call to discuss fourth quarter 2023 results on Wednesday, February 21, 2024, at 12:00 p.m. Central Time (1:00 p.m. Eastern Time).

Participants may also join the conference call by dialing:

US: +1 (833) 470-1428

International: +1 (929) 526-1599

Access ID: 108879

To listen via live webcast, please visit the Investor section of www.expro.com.

The fourth quarter 2023 Investor Presentation is available on the Investor section of www.expro.com.

An audio replay of the webcast will be available on the Investor section of the Company’s website approximately three hours after the conclusion of the call and will remain available for a period of approximately 12 months.

To access the audio replay telephonically:

Dial-In: US +1 (866) 813-9403 or +1 (929) 458-6194

Access ID: 849637

Start Date: February 21, 2024, 1:00 p.m. CT

End Date: March 6, 2024, 10:59 p.m. CT

A transcript of the conference call will be posted to the Investor relations section of the Company’s website after the conclusion of the call.

ABOUT EXPRO

Working for clients across the entire well life cycle, Expro is a leading provider of energy services, offering cost-effective, innovative solutions and best-in-class safety and service quality. The Company’s extensive portfolio of capabilities spans well construction, well flow management, subsea well access, and well intervention and integrity.

With roots dating to 1938, Expro has more than 8,000 employees and provides services and solutions to leading energy companies in both onshore and offshore environments in approximately 60 countries.

For more information, please visit: www.expro.com and connect with Expro on X (formerly Twitter) @ExproGroup and LinkedIn @Expro.

Forward Looking Statements

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this release include statements, estimates and projections regarding the Company’s future business strategy and prospects for growth, cash flows and liquidity, financial strategy, budget, projections, guidance, operating results, environmental, social and governance goals, targets and initiatives, estimates and projections regarding the outcome and benefits of the proposed Coretrax acquisition, the Company’s ability to achieve the anticipated synergies as a result of the proposed Coretrax acquisition and the timing of the closing of the proposed Coretrax acquisition. These statements are based on certain assumptions made by the Company based on management’s experience, expectations and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Forward-looking statements are not guarantees of performance. Although the Company believes the expectations reflected in its forward-looking statements are reasonable and are based on reasonable assumptions, no assurance can be given that these assumptions are accurate or that any of these expectations will be achieved (in full or at all) or will prove to have been correct. Moreover, such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. Such assumptions, risks and uncertainties include the amount, nature and timing of capital expenditures, the availability and terms of capital, the level of activity in the oil and gas industry, volatility of oil and gas prices, unique risks associated with offshore operations (including the ability to recover, and to the extent necessary, service and/or economically repair any equipment located on the seabed), political, economic and regulatory uncertainties in international operations, the ability to develop new technologies and products, the ability to protect intellectual property rights, the ability to employ and retain skilled and qualified workers, the level of competition in the Company’s industry, global or national health concerns, including health epidemics, the possibility of a swift and material decline in global crude oil demand and crude oil prices for an uncertain period of time, future actions of foreign oil producers such as Saudi Arabia and Russia, inflationary pressures, the impact of current and future laws, rulings, governmental regulations, accounting standards and statements, and related interpretations, and other guidance.

Such assumptions, risks and uncertainties also include the factors discussed or referenced in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 that will be filed with the SEC, as well as other risks and uncertainties set forth from time to time in the reports the Company files with the SEC. Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events, historical practice or otherwise, except as required by applicable law, and we caution you not to rely on them unduly.

Use of Non-GAAP Financial Measures

This press release and the accompanying schedules include the non-GAAP financial measures of Adjusted EBITDA, Adjusted EBITDA margin, contribution, contribution margin, support costs, adjusted cash flow from operations, cash conversion, adjusted net income (loss), and adjusted net income (loss) per diluted share, which may be used periodically by management when discussing financial results with investors and analysts. The accompanying schedules of this press release provide a reconciliation of these non-GAAP financial measures to their most directly comparable financial measure calculated and presented in accordance with GAAP. These non-GAAP financial measures are presented because management believes these metrics provide additional information relative to the performance of the business. These metrics are commonly employed by the management, financial analysts and investors to evaluate the operating and financial performance of Expro from period to period and to compare such performance with the performance of other publicly traded companies within the industry. You should not consider Adjusted EBITDA, Adjusted EBITDA margin, contribution, contribution margin, support costs, adjusted cash flow from operations, cash conversion, adjusted net income (loss) and adjusted net income (loss) per diluted share in isolation or as a substitute for analysis of Expro’s results as reported under GAAP. Because Adjusted EBITDA, Adjusted EBITDA margin, contribution, contribution margin, support costs, adjusted cash flow from operations, cash conversion, adjusted net income (loss) and adjusted net income (loss) per diluted share may be defined differently by other companies in the industry, the presentation of these non-GAAP financial measures may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.

Expro defines Adjusted EBITDA as net income (loss) adjusted for (a) income tax expense (benefit), (b) depreciation and amortization expense, (c) impairment expense, (d) severance and other expense, net, (e) stock-based compensation expense, (f) merger and integration expense, (g) (gain) loss on disposal of assets, (h) other (income) expense, net, (i) interest and finance (income) expense, net and (j) foreign exchange (gain) loss. Adjusted EBITDA margin reflects Adjusted EBITDA expressed as a percentage of revenue.

Contribution is defined as total revenue less cost of revenue excluding depreciation and amortization expense, adjusted for indirect support costs and stock-based compensation expense included in cost of revenue. Contribution margin is defined as contribution divided by total revenue, expressed as a percentage. Support costs is defined as indirect costs attributable to supporting the activities of the operating segments, research and engineering expenses and product line management costs included in cost of revenue, excluding depreciation and amortization expense, and general and administrative expense, excluding depreciation and amortization expense, which represent costs of running the corporate head office and other central functions, including logistics, sales and marketing and health and safety, and does not include foreign exchange gains or losses and other non-routine expenses. Adjusted cash flow from operations is defined as net cash provided by (used in) operating activities adjusted for cash paid during the period for interest, net, severance and other expense and merger and integration expense. Cash conversion is defined as Adjusted cash flow from operations divided by Adjusted EBITDA.

The Company defines adjusted net income (loss) as net income (loss) before merger and integration expense, severance and other expense, stock-based compensation expense, and gain (loss) on disposal of assets, adjusted for corresponding tax benefits of these items. The Company defines adjusted net income (loss) per diluted share as net income (loss) per diluted share before merger and integration expense, severance and other expense, stock-based compensation expense, and gain on disposal of assets, adjusted for corresponding tax benefits of these items, divided by diluted weighted average common shares.

Please see the accompanying financial tables for a reconciliation of these non-GAAP measures to their most directly comparable GAAP measures.

EXPRO GROUP HOLDINGS N.V.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

 

 

2023

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Total revenue

 

$

406,750

 

 

$

369,818

 

 

$

350,966

 

 

$

1,512,764

 

 

$

1,279,418

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue, excluding depreciation and amortization

 

 

(316,875

)

 

 

(315,825

)

 

 

(277,548

)

 

 

(1,241,295

)

 

 

(1,057,356

)

General and administrative expense, excluding depreciation and amortization

 

 

(19,346

)

 

 

(15,437

)

 

 

(10,444

)

 

 

(64,254

)

 

 

(58,387

)

Depreciation and amortization expense

 

 

(62,874

)

 

 

(37,414

)

 

 

(34,538

)

 

 

(172,260

)

 

 

(139,767

)

Merger and integration expense

 

 

(5,432

)

 

 

(817

)

 

 

(4,996

)

 

 

(9,764

)

 

 

(13,620

)

Severance and other expense

 

 

(8,901

)

 

 

(1,897

)

 

 

(2,411

)

 

 

(14,388

)

 

 

(7,825

)

Total operating cost and expenses

 

 

(413,428

)

 

 

(371,390

)

 

 

(329,937

)

 

 

(1,501,961

)

 

 

(1,276,955

)

Operating (loss) income

 

 

(6,678

)

 

 

(1,572

)

 

 

21,029

 

 

 

10,803

 

 

 

2,463

 

Other income (expense), net

 

 

4,774

 

 

 

(1,129

)

 

 

1,477

 

 

 

1,234

 

 

 

3,149

 

Interest and finance expense, net

 

 

(2,255

)

 

 

(373

)

 

 

(3,468

)

 

 

(3,943

)

 

 

(241

)

(Loss) income before taxes and equity in income of joint ventures

 

 

(4,159

)

 

 

(3,074

)

 

 

19,038

 

 

 

8,094

 

 

 

5,371

 

Equity in income of joint ventures

 

 

5,117

 

 

 

2,495

 

 

 

5,590

 

 

 

12,853

 

 

 

15,731

 

Income (loss) before income taxes

 

 

958

 

 

 

(579

)

 

 

24,628

 

 

 

20,947

 

 

 

21,102

 

Income tax expense

 

 

(13,376

)

 

 

(13,307

)

 

 

(11,697

)

 

 

(44,307

)

 

 

(41,247

)

Net (loss) income

 

$

(12,418

)

 

$

(13,886

)

 

$

12,931

 

 

$

(23,360

)

 

$

(20,145

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income per common share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.11

)

 

$

(0.13

)

 

$

0.12

 

 

$

(0.21

)

 

$

(0.18

)

Diluted

 

$

(0.11

)

 

$

(0.13

)

 

$

0.12

 

 

$

(0.21

)

 

$

(0.18

)

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

110,325,863

 

 

 

108,777,429

 

 

 

108,743,078

 

 

 

109,161,453

 

 

 

109,072,761

 

Diluted

 

 

110,325,863

 

 

 

108,777,429

 

 

 

109,348,871

 

 

 

109,161,453

 

 

 

109,072,761

 

EXPRO GROUP HOLDINGS N.V.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

 

 

 

December 31,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Assets

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

151,741

 

 

$

214,788

 

Restricted cash

 

 

1,425

 

 

 

3,672

 

Accounts receivable, net

 

 

469,119

 

 

 

419,237

 

Inventories

 

 

143,325

 

 

 

153,718

 

Assets held for sale

 

 

-

 

 

 

2,179

 

Income tax receivables

 

 

27,581

 

 

 

26,938

 

Other current assets

 

 

58,409

 

 

 

44,975

 

Total current assets

 

 

851,600

 

 

 

865,507

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment, net

 

 

513,222

 

 

 

462,316

 

Investments in joint ventures

 

 

66,402

 

 

 

66,038

 

Intangible assets, net

 

 

239,716

 

 

 

229,504

 

Goodwill

 

 

247,687

 

 

 

220,980

 

Operating lease right-of-use assets

 

 

72,310

 

 

 

74,856

 

Non-current accounts receivable, net

 

 

9,768

 

 

 

9,688

 

Other non-current assets

 

 

12,302

 

 

 

8,263

 

Total assets

 

$

2,013,007

 

 

$

1,937,152

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

326,125

 

 

$

272,704

 

Income tax liabilities

 

 

45,084

 

 

 

37,151

 

Finance lease liabilities

 

 

1,967

 

 

 

1,047

 

Operating lease liabilities

 

 

17,531

 

 

 

19,057

 

Other current liabilities

 

 

98,144

 

 

 

107,750

 

Total current liabilities

 

 

488,851

 

 

 

437,709

 

 

 

 

 

 

 

 

 

 

Long-term borrowings

 

$

20,000

 

 

 

-

 

Deferred tax liabilities, net

 

 

22,706

 

 

 

30,419

 

Post-retirement benefits

 

 

10,445

 

 

 

11,344

 

Finance lease liabilities

 

 

16,410

 

 

 

13,773

 

Operating lease liabilities

 

 

54,976

 

 

 

60,847

 

Uncertain tax positions

 

 

59,544

 

 

 

58,036

 

Other non-current liabilities

 

 

44,202

 

 

 

39,129

 

Total liabilities

 

 

717,134

 

 

 

651,257

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Common stock

 

 

8,062

 

 

 

7,911

 

Treasury Stock

 

 

(64,697

)

 

 

(40,870

)

Additional paid-in capital

 

 

1,909,323

 

 

 

1,847,078

 

Accumulated other comprehensive loss

 

 

22,318

 

 

 

27,549

 

Accumulated deficit

 

 

(579,133

)

 

 

(555,773

)

Total stockholders’ equity

 

 

1,295,873

 

 

 

1,285,895

 

Total liabilities and stockholders’ equity

 

$

2,013,007

 

 

$

1,937,152

 

EXPRO GROUP HOLDINGS N.V.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

Year Ended

 

 

 

December 31,

 

 

 

2023

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(23,360

)

 

$

(20,145

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization expense

 

 

172,260

 

 

 

139,767

 

Equity in income of joint ventures

 

 

(12,853

)

 

 

(15,731

)

Stock-based compensation expense

 

 

19,574

 

 

 

18,486

 

Changes in fair value of investments

 

 

-

 

 

 

1,199

 

Elimination of unrealized profit on sales to joint ventures

 

 

4,159

 

 

 

-

 

Deferred taxes

 

 

(10,478

)

 

 

(1,326

)

Unrealized foreign exchange losses

 

 

5,658

 

 

 

6,116

 

Changes in fair value of contingent consideration

 

 

576

 

 

 

-

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

(34,895

)

 

 

(97,758

)

Inventories

 

 

10,575

 

 

 

(26,037

)

Other assets

 

 

(16,745

)

 

 

4,365

 

Accounts payable and accrued liabilities

 

 

34,600

 

 

 

35,491

 

Other liabilities

 

 

(18,275

)

 

 

31,435

 

Income taxes, net

 

 

8,798

 

 

 

10,209

 

Dividends received from joint ventures

 

 

8,329

 

 

 

7,283

 

Other

 

 

(9,614

)

 

 

(13,185

)

Net cash provided by operating activities

 

 

138,309

 

 

 

80,169

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(122,110

)

 

 

(81,904

)

Payment for acquired businesses, net of cash acquired

 

 

(28,707

)

 

 

-

 

Acquisition of technology

 

 

-

 

 

 

(7,967

)

Proceeds from disposal of assets

 

 

2,013

 

 

 

7,279

 

Proceeds from sale / maturity of investments

 

 

572

 

 

 

11,386

 

Net cash used in investing activities

 

 

(148,232

)

 

 

(71,206

)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Cash pledged for collateral deposits

 

 

(217

)

 

 

(70

)

Payments of loan issuance and other transaction costs

 

 

-

 

 

 

(132

)

Proceeds from long-term borrowings

 

 

50,000

 

 

 

-

 

Repayment of long-term borrowings

 

 

(65,096

)

 

 

-

 

Repurchase of common stock

 

 

(20,024

)

 

 

(12,996

)

Payment of withholding taxes on stock-based compensation plans

 

 

(2,559

)

 

 

(4,168

)

Repayment of financed insurance premium

 

 

(9,317

)

 

 

(7,245

)

Repayments of finance leases

 

 

(2,126

)

 

 

(1,001

)

Net cash used in financing activities

 

 

(49,339

)

 

 

(25,612

)

Effect of exchange rate changes on cash and cash equivalents

 

 

(6,032

)

 

 

(4,738

)

Net decrease to cash and cash equivalents and restricted cash

 

 

(65,294

)

 

 

(21,387

)

Cash and cash equivalents and restricted cash at beginning of year

 

 

218,460

 

 

 

239,847

 

Cash and cash equivalents and restricted cash at end of year

 

$

153,166

 

 

$

218,460

 

 

 

 

 

 

 

 

 

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

Cash paid for income taxes net of refunds

 

$

(44,268

)

 

$

(33,171

)

Cash paid for interest, net

 

 

(2,177

)

 

 

(3,851

)

Change in accounts payable and accrued expenses related to capital expenditures

 

 

(7,926

)

 

 

(14,721

)

EXPRO GROUP HOLDINGS N.V.

SELECTED OPERATING SEGMENT DATA

(In thousands)

(Unaudited)

 

Segment Revenue and Segment Revenue as Percentage of Total Revenue:

 

 

Three Months Ended

 

 

Year Ended

 

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

 

 

2023

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

NLA

 

$

145,490

 

 

 

36

%

 

$

105,252

 

 

 

28

%

 

$

131,684

 

 

 

38

%

 

$

511,800

 

 

 

34

%

 

$

499,813

 

 

 

39

%

ESSA

 

 

133,846

 

 

 

33

%

 

 

135,395

 

 

 

37

%

 

 

117,344

 

 

 

33

%

 

 

520,951

 

 

 

34

%

 

 

389,342

 

 

 

30

%

MENA

 

 

65,363

 

 

 

16

%

 

 

58,057

 

 

 

16

%

 

 

55,387

 

 

 

16

%

 

 

233,528

 

 

 

15

%

 

 

201,495

 

 

 

16

%

APAC

 

 

62,051

 

 

 

15

%

 

 

71,114

 

 

 

19

%

 

 

46,551

 

 

 

13

%

 

 

246,485

 

 

 

16

%

 

 

188,768

 

 

 

15

%

Total

 

$

406,750

 

 

 

100

%

 

$

369,818

 

 

 

100

%

 

$

350,966

 

 

 

100

%

 

$

1,512,764

 

 

 

100

%

 

$

1,279,418

 

 

 

100

%

Segment EBITDA(1), Segment EBITDA Margin(2), Adjusted EBITDA and Adjusted EBITDA Margin(3):

 

 

Three Months Ended

 

 

Year Ended

 

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

 

 

2023

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

NLA

 

$

44,325

 

 

 

30

%

 

$

19,967

 

 

 

19

%

 

$

35,153

 

 

 

27

%

 

$

132,869

 

 

 

26

%

 

$

135,236

 

 

 

27

%

ESSA

 

 

40,990

 

 

 

31

%

 

 

39,268

 

 

 

29

%

 

 

30,179

 

 

 

26

%

 

 

136,007

 

 

 

26

%

 

 

74,681

 

 

 

19

%

MENA

 

 

21,271

 

 

 

33

%

 

 

16,871

 

 

 

29

%

 

 

19,433

 

 

 

35

%

 

 

71,201

 

 

 

30

%

 

 

63,315

 

 

 

31

%

APAC (5)

 

 

5,337

 

 

 

9

%

 

 

(4,286

)

 

 

(6

)%

 

 

3,673

 

 

 

8

%

 

 

1,805

 

 

 

1

%

 

 

4,850

 

 

 

3

%

 

 

 

111,923

 

 

 

 

 

 

 

71,820

 

 

 

 

 

 

 

88,438

 

 

 

 

 

 

 

341,882

 

 

 

 

 

 

 

278,082

 

 

 

 

 

Corporate costs (4)

 

 

(31,894

)

 

 

 

 

 

 

(24,070

)

 

 

 

 

 

 

(23,954

)

 

 

 

 

 

 

(105,855

)

 

 

 

 

 

 

(87,580

)

 

 

 

 

Equity in income of joint ventures

 

 

5,117

 

 

 

 

 

 

 

2,495

 

 

 

 

 

 

 

5,590

 

 

 

 

 

 

 

12,853

 

 

 

 

 

 

 

15,731

 

 

 

 

 

Adjusted EBITDA

 

$

85,146

 

 

 

21

%

 

$

50,245

 

 

 

14

%

 

$

70,074

 

 

 

20

%

 

$

248,880

 

 

 

16

%

 

$

206,233

 

 

 

16

%

(1)

 

Expro evaluates its business segment operating performance using Segment Revenue, Segment EBITDA and Segment EBITDA Margin. Expros management believes Segment EBITDA and Segment EBITDA Margin are useful operating performance measures as they exclude transactions not related to its core operating activities, corporate costs and certain non-cash items and allows Expro to meaningfully analyze the trends and performance of its core operations by segment as well as to make decisions regarding the allocation of resources to segments.

 

 

 

(2)

 

Expro defines Segment EBITDA Margin as Segment EBITDA divided by Segment Revenue, expressed as a percentage.

 

 

 

(3)

 

Expro defines Adjusted EBITDA Margin as Adjusted EBITDA divided by total revenue, expressed as a percentage.

 

 

 

(4)

 

Corporate costs include the costs of running our corporate head office and other central functions that support the operating segments, including research, engineering and development, logistics, sales and marketing and health and safety and are not attributable to a particular operating segment.

 

 

 

(5)

 

APAC Segment EBITDA, excluding $4 million, $15 million and $5 million, respectively, of unrecoverable LWI-related costs during the three months ended December 31, 2023, September 30, 2023 and December 31, 2022, would have been $9 million, $11 million, and $9 million, respectively, and APAC Segment EBITDA margin would have been 15%, 15% and 18%, respectively. APAC Segment EBITDA, excluding $36 million of unrecoverable LWI-related costs during the year ended December 31, 2023 and $28 million of unrecoverable LWI-related costs during the year ended December 31, 2022, would have been $38 million and $33 million, respectively, and APAC Segment EBITDA margin would have been 15% and 17%, respectively.

EXPRO GROUP HOLDINGS N.V.

REVENUE BY AREAS OF CAPABILITIES

(In thousands)

(Unaudited)

 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

 

 

2023

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Well construction

 

$

145,279

 

 

 

36

%

 

$

116,293

 

 

 

31

%

 

$

137,754

 

 

 

39

%

 

$

533,556

 

 

 

35

%

 

$

500,438

 

 

 

39

%

Well management (1)

 

 

261,471

 

 

 

64

%

 

 

253,525

 

 

 

69

%

 

 

213,212

 

 

 

61

%

 

 

979,208

 

 

 

65

%

 

 

778,980

 

 

 

61

%

Total

 

$

406,750

 

 

 

100

%

 

$

369,818

 

 

 

100

%

 

$

350,966

 

 

 

100

%

 

$

1,512,764

 

 

 

100

%

 

$

1,279,418

 

 

 

100

%

(1)

 

Well management consists of well flow management, subsea well access, and well intervention and integrity.

EXPRO GROUP HOLDINGS N.V.

CONTRIBUTION, CONTRIBUTION MARGIN AND SUPPORT COSTS

(In thousands)

(Unaudited)

 

Contribution(1) and Contribution Margin(2):

 

 

Three Months Ended

 

 

Year Ended

 

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

 

 

2023

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Total revenue

 

$

406,750

 

 

$

369,818

 

 

$

350,966

 

 

$

1,512,764

 

 

$

1,279,418

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue, excluding depreciation and amortization

 

 

(316,875

)

 

 

(315,825

)

 

 

(277,548

)

 

 

(1,241,295

)

 

 

(1,057,356

)

Indirect costs (included in cost of revenue)

 

 

67,175

 

 

 

62,772

 

 

 

60,324

 

 

 

251,373

 

 

 

238,846

 

Stock-based compensation expense

 

 

1,755

 

 

 

1,789

 

 

 

1,466

 

 

 

6,967

 

 

 

7,658

 

Direct costs (excluding depreciation and amortization) (3)

 

 

(247,945

)

 

 

(251,264

)

 

 

(215,758

)

 

 

(982,955

)

 

 

(810,852

)

Contribution (5)

 

$

158,805

 

 

$

118,554

 

 

$

135,208

 

 

$

529,809

 

 

$

468,566

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contribution margin

 

 

39

%

 

 

32

%

 

 

39

%

 

 

35

%

 

 

37

%

Support Costs(4):

 

 

 

Three Months Ended

 

 

Year Ended

 

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

 

 

2023

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Cost of revenue (excluding depreciation and amortization)

 

$

316,875

 

 

$

315,825

 

 

$

277,548

 

 

$

1,241,295

 

 

$

1,057,356

 

Direct costs (excluding depreciation and amortization)

 

 

(247,945

)

 

 

(251,264

)

 

 

(215,758

)

 

 

(982,955

)

 

 

(810,852

)

Stock-based compensation expense

 

 

(1,755

)

 

 

(1,789

)

 

 

(1,466

)

 

 

(6,967

)

 

 

(7,658

)

Indirect costs (included in cost of revenue)

 

 

67,175

 

 

 

62,772

 

 

 

60,324

 

 

 

251,373

 

 

 

238,846

 

General and administrative, (excluding depreciation and amortization expense, foreign exchange, and other non-routine costs)

 

 

11,782

 

 

 

7,961

 

 

 

10,333

 

 

 

42,531

 

 

 

39,030

 

Total support costs

 

$

78,957

 

 

$

70,733

 

 

$

70,657

 

 

$

293,904

 

 

$

277,876

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total support costs as a percentage of revenue

 

 

19

%

 

 

19

%

 

 

20

%

 

 

19

%

 

 

22

%

(1)

 

Expro defines Contribution as Total Revenue less Cost of Revenue, excluding depreciation and amortization expense, adjusted for indirect support costs and stock-based compensation expense included in Cost of Revenue.

 

 

 

(2)

 

Contribution margin is defined as Contribution as a percentage of Revenue.

 

 

 

(3)

 

Direct costs include personnel costs, sub-contractor costs, equipment costs, repairs and maintenance, facilities, and other costs directly incurred to generate revenue.

 

 

 

(4)

 

Support costs includes indirect costs attributable to support the activities of the operating segments, research and engineering expenses and product line management costs included in Cost of revenue, and General and administrative expenses representing costs of running our corporate head office and other central functions, including, logistics, sales and marketing and health and safety and does not include foreign exchange gains or losses and other non-routine expenses.

 

 

 

(5)

 

Contribution, excluding $4 million, $15 million and $5 million, respectively, of unrecoverable LWI-related costs during the three months ended December 31, 2023, September 30, 2023 and December 31, 2022, would have been $163 million, $134 million and $140 million respectively, and Contribution margin would have been 40%, 36% and 40%, respectively. Contribution, excluding $36 million of unrecoverable LWI-related costs during the year ended December 31, 2023 and $28 million of unrecoverable LWI-related costs during the year ended December 31, 2022, would have been $566 million and $496 million, respectively, and Contribution margin would have been 37% and 39%, respectively.

EXPRO GROUP HOLDINGS N.V.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATION

(In thousands)

(Unaudited)

 

Adjusted EBITDA Reconciliation and Adjusted EBITDA Margin:

 

 

Three Months Ended

 

 

Year Ended

 

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

 

 

2023

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Total revenue

 

$

406,750

 

 

$

369,818

 

 

$

350,966

 

 

$

1,512,764

 

 

$

1,279,418

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(12,418

)

 

$

(13,886

)

 

$

12,931

 

 

$

(23,360

)

 

$

(20,145

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

13,376

 

 

 

13,307

 

 

 

11,697

 

 

 

44,307

 

 

 

41,247

 

Depreciation and amortization expense

 

 

62,874

 

 

 

37,414

 

 

 

34,538

 

 

 

172,260

 

 

 

139,767

 

Severance and other expense

 

 

8,901

 

 

 

1,897

 

 

 

2,411

 

 

 

14,388

 

 

 

7,825

 

Merger and integration expense

 

 

5,432

 

 

 

817

 

 

 

4,996

 

 

 

9,764

 

 

 

13,620

 

Other (income) expense, net

 

 

(4,774

)

 

 

1,129

 

 

 

(1,477

)

 

 

(1,234

)

 

 

(3,149

)

Stock-based compensation expense

 

 

4,892

 

 

 

4,934

 

 

 

3,554

 

 

 

19,574

 

 

 

18,486

 

Foreign exchange loss (gain)

 

 

4,608

 

 

 

4,260

 

 

 

(2,044

)

 

 

9,238

 

 

 

8,341

 

Interest and finance expense, net

 

 

2,255

 

 

 

373

 

 

 

3,468

 

 

 

3,943

 

 

 

241

 

Adjusted EBITDA (1)

 

$

85,146

 

 

$

50,245

 

 

$

70,074

 

 

$

248,880

 

 

$

206,233

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA margin (1)

 

 

21

%

 

 

14

%

 

 

20

%

 

 

16

%

 

 

16

%

(1)

 

Excluding $4 million, $15 million and $5 million, respectively, of unrecoverable LWI-related costs during the three months ended December 31, 2023, September 30, 2023 and December 31, 2022, Adjusted EBITDA would have been $89 million, $65 million and $75 million, respectively, and Adjusted EBITDA margin would have been 22%, 18%, and 21%, respectively. Excluding $36 million of unrecoverable LWI-related costs during the year ended December 31, 2023 and ​​​​​​$28 million of unrecoverable LWI-related costs during the year ended December 31, 2022, Adjusted EBITDA Margin would have been $285 million and $234 million, respectively, and Adjusted EBITDA margin would have been 19% and 18%, respectively

EXPRO GROUP HOLDINGS N.V.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATION

(In thousands)

(Unaudited)

 

Adjusted Cash Flow from Operations Reconciliation:

 

 

Three Months Ended

 

 

Year Ended

 

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

 

 

2023

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net cash provided by (used in) operating activities

 

$

32,781

 

 

$

58,841

 

 

$

92,943

 

 

$

138,309

 

 

$

80,169

 

Cash paid during the period for interest, net

 

 

721

 

 

 

910

 

 

 

961

 

 

 

2,177

 

 

 

3,851

 

Cash paid during the period for severance and other expense

 

 

5,525

 

 

 

2,208

 

 

 

697

 

 

 

12,304

 

 

 

3,970

 

Cash paid during the period for merger and integration expense

 

 

4,389

 

 

 

1,614

 

 

 

4,350

 

 

 

17,403

 

 

 

27,344

 

Adjusted Cash Flow from Operations

 

$

43,416

 

 

$

63,573

 

 

$

98,951

 

 

$

170,193

 

 

$

115,334

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

85,146

 

 

$

50,245

 

 

$

70,074

 

 

$

248,880

 

 

$

206,233

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash conversion (1)

 

 

51

%

 

 

127

%

 

 

141

%

 

 

68

%

 

 

56

%

(1)

 

Expro defines Cash Conversion as Adjusted Cash Flow from Operations divided by Adjusted EBITDA, expressed as a percentage.

EXPRO GROUP HOLDINGS N.V.

NON-GAAP FINANCIAL MEASURES AND RECONCILIATION

(In thousands, except per share amounts)

(Unaudited)

 

Reconciliation of Adjusted Net Income (Loss) and Adjusted Net Income (Loss) per Diluted Share:

 

 

Three Months Ended

 

 

Year Ended

 

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

 

 

2023

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net (loss) income

 

$

(12,418

)

 

$

(13,886

)

 

$

12,931

 

 

$

(23,360

)

 

$

(20,145

)

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merger and integration expense

 

 

5,432

 

 

 

817

 

 

 

4,996

 

 

 

9,764

 

 

 

13,620

 

Severance and other expense

 

 

8,901

 

 

 

1,897

 

 

 

2,411

 

 

 

14,388

 

 

 

7,825

 

Stock-based compensation expense

 

 

4,892

 

 

 

4,934

 

 

 

3,554

 

 

 

19,574

 

 

 

18,486

 

Total adjustments, before taxes

 

 

19,225

 

 

 

7,648

 

 

 

10,961

 

 

 

43,726

 

 

 

39,931

 

Tax benefit

 

 

-

 

 

 

-

 

 

 

(70

)

 

 

(43

)

 

 

(524

)

Total adjustments, net of taxes

 

 

19,225

 

 

 

7,648

 

 

 

10,891

 

 

 

43,683

 

 

 

39,407

 

Adjusted net income (loss) attributable to company

 

$

6,807

 

 

$

(6,238

)

 

$

23,822

 

 

$

20,323

 

 

$

19,262

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As reported diluted weighted average common shares outstanding

 

 

110,325,863

 

 

 

108,777,429

 

 

 

109,348,871

 

 

 

109,161,453

 

 

 

109,072,761

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As reported net loss per diluted share

 

$

(0.11

)

 

$

(0.13

)

 

$

0.12

 

 

$

(0.21

)

 

$

(0.18

)

Adjusted net income (loss) per diluted share

 

$

0.06

 

 

$

(0.06

)

 

$

0.22

 

 

$

0.19

 

 

$

0.18

 

 

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