AMSTERDAM, July 23, 2014 /PRNewswire/ -- Core Laboratories
N.V. (NYSE: "CLB US" and Euronext Amsterdam: "CLB NA") reported
second quarter 2014 GAAP earnings per diluted share ("EPS") of
$1.42, and second quarter EPS of
$1.35, when excluding foreign
exchange translations ("ex-fx") and normalizing for a 24% effective
tax rate (both referred to as "ex-items"), both setting second
quarter records. Second quarter 2014 net income was
$60,468,000, ex-items.
Year-over-year and sequentially, quarterly revenue increased to
$267,562,000, a record for any second
quarter in Company history while operating income, was $82,834,000, ex-fx, yielding operating margins of
31%.
Free cash flow ("FCF"), defined as cash from operations less
capital expenditures, for the quarter topped $53,000,000, reflecting Core's first half 2014
weighted capital expenditure program. This first half 2014
weighted capital expenditure program is expected to produce record
levels of second half 2014 revenue, operating income and margins,
net income and FCF. Core used the cash generated during the
quarter to pay dividends of approximately $22,400,000 and to buy back approximately 455,000
shares, lowering the Company's outstanding diluted share count to a
new 16-year low of 44,707,000 at quarter's end.
On the Company's May 12, 2014
guidance conference call, several changes in anticipated customer
activity were discussed which would have a slight dampening effect
on second quarter revenues and operating income. These projected
changes in activity did occur and the Company now reports earnings
per diluted share to be at the top of this revised range and
revenues to be in the middle of the indicated range. To recap and
update from the May conference call:
- Deferred Major Coring Programs.
Revenue growth and operating margin expansion for Core's Reservoir
Description operations were projected to be affected as a result of
the deferral of major coring programs, especially in the deepwater
Gulf of Mexico (GOM). Due to
acute wellbore stabilization and mechanical issues that occurred
during the first half of 2014, several major deepwater coring
programs in the GOM were deferred and are now scheduled for the
second half of 2014. Core's GOM clients now have nine major
deepwater coring programs scheduled for the last six months of
2014; risk adjusting, Core has included revenue from five of these
projects in its second half revenue and earnings guidance.
Deepwater programs generate some of the highest revenue, operating
and incremental margin opportunities for Reservoir Description
operations. It is significant to note that Core continued to work
virtually all high pressure and high temperature reservoir fluid
phase-behavior projects in the deepwater GOM, aided by its
specialized mobile lab capabilities.
- Reduced Activity in Established Unconventional Plays.
Also impacting expected revenue growth and contribution to earnings
were client decisions to reduce the number and length of cores
being cut in established and maturing unconventional plays in the
Marcellus, Bakken, Niobrara, and Eagle Ford formations.
It is significant to note the moderation in coring activities in
established unconventional plays are substantially being offset by
new coring and reservoir fluids projects in emerging plays such as
the Tuscaloosa Marine Shale (TMS), the Woodford in the south central Oklahoma oil play (SCOOP), and the Spraberry,
Codell and Parkman formations, among others. Core also
projects the number of coring and reservoir fluid phase behavior
projects from the Permian Basin will continue to increase in the
second half of 2014.
- Basic Technology Perforating Charge Pricing
Production Enhancement saw pricing for its most basic perforating
charge technology stabilize late in the second quarter of
2014. Core continues to phase out basic perforating charge
technology which now represents less than 20% of Production
Enhancement revenue. Core expects to introduce additional new
high margin perforating systems in the second half of 2014 to
further reduce revenue levels from basic technology systems.
Segment Highlights
Core Laboratories reports results under three operating
segments: Reservoir Description, Production Enhancement, and
Reservoir Management. All operating results exclude foreign
currency translations from the second quarter of 2014 as referenced
in the non-GAAP reconciliation.
Reservoir Description
Reservoir Description operations posted second quarter 2014
revenue of $130,589,000 and operating
income of $35,567,000 yielding
operating margins of 27%. Although the revenue established a
second quarter record, lower relative amounts of higher-margin,
international and deepwater related revenue, as the Company has
previously announced, weighed on year-over-year revenue growth and
expansion of operating margins.
Reservoir Description operations continued to benefit from
increasing amounts of core and reservoir fluids samples from
emerging unconventional tight-oil plays and the evaluation of
potential unconventional oil plays in North America. Interest
levels in evaluating the potential of unconventional plays in
Europe, both oil and natural gas
related, increased throughout the quarter.
Core continues to expand its high-pressure, high-temperature
reservoir fluids phase behavior service base in the deepwater GOM,
where Core essentially works all projects outsourced by the major
operators. Core is commissioning a new ultra-high-pressure
phase behavior system with a pressure-measurement capability to
30,000 psi, giving the Company the highest-rated pressure system in
the industry.
Core is studying the effects of using low-salinity water in
floods to increase estimated ultimate recovery rates in an oilfield
that has employed other enhanced oil recovery techniques in the
past. The Company also is determining the effectiveness of
straight CO2 injections versus water-alternating-gas
("WAG") injections, and WAG processes are showing excellent results
in one field. Core believes that combinations of low-salinity
and miscible-gas floods will significantly impact future ultimate
recovery rates.
Several large-scale Middle East
projects are ongoing to improve the production of natural gas from
unconventional reservoirs. Core has been requested to expand
its analytical capabilities in the Middle
East to meet increased demand from numerous clients who are
evaluating multiple, unconventional natural gas plays in the
region.
Also in the Middle East, Core
signed its largest Reservoir Description contract ever with the
Kuwait Oil Company. The multi-year contract for tens of
millions of dollars is for furnishing cutting-edge,
reservoir-condition reservoir rock properties and reservoir fluids
phase behavior technologies. This contract replaces a smaller
contract that recently expired.
Production Enhancement
Production Enhancement operations posted records for both second
quarter revenue of $110,993,000 and
operating income of $37,345,000,
yielding margins of 34%. Year-over-year growth in
North America was offset by
declining sales in Latin America,
particularly in Venezuela and
Argentina where Core no longer
serves those markets through a local presence. Although
results were up only marginally compared with the year-ago quarter,
as guided earlier, Production Enhancement revenue, and especially
operating income, ramped up late in the quarter to yield Production
Enhancement's most profitable month ever in June. This
portends well for the third quarter because these trends continued
into the first three weeks of July.
The Company continued to increase market penetration with its
FlowProfiler™ technology in the second quarter of
2014. This technology is helping operators in liquid-rich
plays to evaluate and optimize the effectiveness of their
completion and development strategies. FlowProfiler
diagnostic tracers are also being used to identify communication
between frac stages from the treatment well to surrounding offset
wells, enabling the operator to make informed decisions on lateral
spacing and, of increasing importance, on the vertical spacing of
horizontal wells. FlowProfiler technology is being combined
with Core's other diagnostic services to provide a comprehensive
understanding of the completion and to identify opportunities to
increase hydrocarbon production and ultimate recovery.
The introduction of FlowProfiler oil-soluble tracers in July
will increase the number of unique tracers from 12 to 32, which
should begin to impact Production Enhancement revenues in the third
and fourth quarters. The introduction of several new
SpectraChem® diagnostic tracers in the second quarter of
2014 has already started having an impact on activity levels.
The additional tracers are allowing operators to more discretely
evaluate the effectiveness of the growing number of frac stages in
horizontal wells.
The strategic move over the last year to add Regional
Engineering Advisors is helping to grow Core's business by shifting
from sales on a single well basis to larger, longer-term,
multi-well projects. The engineering advisors were placed
regionally to meet client demand for access to Core's industry
recognized experts. This approach has been successful in
helping clients across North
America increase production through changes in completion
designs and development strategies.
There was also increased market penetration during the second
quarter of 2014 by Core's KODIAK Enhanced Perforating
Systems™ energetic technology, which combines the
Company's HERO® High Efficiency Reservoir Optimization
perforating charges (now API-certified as the industry's deepest
penetrating perforating charges) with proprietary accelerator
propellant pellets to boost the effectiveness of the
perforating/stimulating event. The detonation of the
perforating charge initiates a complex, sequentially oxidizing
reaction of the solid rocket fuel pellets, thereby generating a
high-pressure pulse of gases. This pulse then initiates and
propagates fractures ("mini-fracs") into the unconventional
reservoir sequence, creating cleaner perforating tunnels, improving
stimulant/proppant injection, and increasing hydrocarbon
production. Moreover, the propellant-activated mini-frac can
potentially reduce the frac breakdown pressure of the reservoir by
as much as 15%. Lowering the formation frac breakdown
pressure will, in turn, reduce the amount of compressive horsepower
needed at the surface, thereby lowering frac stimulation
costs. Core's suite of perforating technology products and
services will produce systems that maximize cluster efficiencies
and significantly increase the volume of stimulated reservoir
rock.
Reservoir Management
Reservoir Management operations posted second quarter 2014
revenue of $25,980,000 and operating
income of $9,568,000, its most
profitable second quarter ever. Operating margins reached
37%.
Reservoir Management continued to expand its geo-engineering
projects in the Permian Basin that are focused on improving oil
recovery factors from the multiple horizons being exploited by
operators. The Delaware
Basin project has focused on the Avalon Shale, Bone Spring Sands
and Wolfcamp formations with the play expanding into the Southern
Delaware Basin. Twenty-four companies are currently
participating in the project and have contributed core, well logs,
and completion and production data for 38 wells, which are being
analyzed and evaluated by Core's project team. The project is
on target to include over 72 wells.
The Midland Basin project has focused on the Wolfcamp, Cline,
Spraberry, and Dean formations, and it has recently been expanded
to include the Barnett and Woodford sections. Forty-eight companies
are now participating with membership continuing to increase.
Reservoir core samples have been contributed from over 80 wells,
with some wells represented by over a thousand feet of core.
The project will eventually have over 130 cored pilot wells.
Similar to the Delaware Basin
project, the scope of the project includes reservoir
characterization, fracture stimulation optimization, and production
best practices for oil recovery.
During the quarter, Reservoir Management also initiated a new
project directed at expanding the Woodford oil play in Oklahoma. Recent
successes in the SCOOP areas of the Anadarko Basin are driving possible expansion
of the play to include other areas. A total of nine operators
have joined the project to date.
Internationally, Reservoir Management has continued to increase
its portfolio of West Africa and
East Africa deepwater
projects. Regional petroleum systems studies are being
performed in cooperation with national oil and gas ministries in
Cote d'Ivoire, Senegal, Tanzania and Mozambique.
Free Cash Flow, Share Repurchases, Dividends, Capital
Returned To Shareholders
During the second quarter of 2014, Core Laboratories generated
$65,609,000 of cash from operating
activities and had capital expenditures of $12,119,000, yielding $53,490,000 in FCF. The lower
year-over-year FCF reflects a heavily weighted capital expenditure
program for the first half 2014, as necessitated by the increased
activities of Core's clients. The first half weighting of
capital expenditures should yield record levels of revenue,
operating income and FCF during the second half of 2014. In
spite of the heavily weighted capital expenditure program in the
first half of 2014, Core converted over 20
cents of every revenue dollar into FCF, one of the highest
conversion rates for the oilfield services sector.
Core's FCF in the second quarter 2014, along with borrowings
from the Company's revolving credit facility, was used to pay
$22,400,000 in cash dividends and to
repurchase approximately 455,000 shares. Core's outstanding
diluted share count of 44,707,000 shares stands at its lowest level
in 16 years. In all, Core has reduced its diluted share count
approaching 39,000,000 shares and has returned over $1.83 billion to its shareholders, -- equaling
over $40 per diluted share-- through
diluted share count reductions, special dividends, and quarterly
dividends since implementing its Shareholder Capital Return Program
over 11 years ago.
On 14 April 2014, the Company's
Board announced a quarterly cash dividend of $0.50 per share of common stock that was paid on
23 May 2014 to shareholders of record
on 25 April 2014. This amount, if
paid each quarter of 2014, would equal a payout of $2.00 per share of common stock. Dutch
withholding tax was deducted from the dividend at the rate of
15%.
On 8 July 2014, the Board
announced a quarterly cash dividend of $0.50 per share of common stock payable in the
third quarter of 2014. The third quarter cash dividend will be
payable on 18 August 2014 to
shareholders of record on 18 July 2014. Dutch withholding tax
will be deducted from the dividend at a rate of 15%.
Return On Invested Capital
As reported in previous quarters, the Company's Board has
established an internal performance metric of achieving a return on
invested capital ("ROIC") in the top decile of the oilfield service
companies listed as Core's peers by Bloomberg Financial. The
Company and its Board believe that ROIC is a leading performance
metric used by shareholders to determine the relative investment
value of publicly traded companies. Further, the Company and
its Board believe shareholders will benefit if Core consistently
performs in the highest ROIC decile among its Bloomberg
peers. According to the latest financial information from
Bloomberg, Core Laboratories' ROIC was the highest of any of the
oilfield service companies listed in its Comp Group. Comp
Group companies listed by Bloomberg include Halliburton,
Schlumberger, Carbo Ceramics, FMC Technologies, Baker Hughes,
Cameron International, Oceaneering, National Oilwell Varco, and Oil
States International, among others.
Several of the peer companies failed to post ROIC that exceeded
their WACC, thereby eroding capital and shareholder value.
Core's ratio of ROIC to WACC is the highest of any company in the
Comp Group. Core will update its ROIC compared with the
oilfield services sector for the second quarter of 2014 in its
third quarter 2014 earnings release.
Third and Fourth Quarter 2014 Revenue and EPS
Guidance
Core anticipates that North American activity will continue to
increase for emerging unconventional oil plays while activity will
remain at reduced, yet stable, levels in established unconventional
tight-oil and gas plays. The Company also anticipates higher
numbers of deepwater coring programs, especially in the deepwater
Gulf of Mexico. The volume of high-pressure, high-temperature
reservoir fluid phase behavior projects is also expected to remain
at high levels. Internationally, in response to very
supportive Brent crude prices, the Company projects modest growth
through the end of 2014, and expects higher levels of activity
entering 2015.
Therefore, for the third quarter of 2014, Core expects revenue
of approximately $280,000,000 to
$290,000,000 and EPS to range between $1.49 and $1.52, up sequentially by approximately
11%. Within those ranges, operating margins are expected to
be approximately 32%, with year-over-year incremental margins as
high as 60%. A 23% effective tax rate is assumed for the
third quarter of 2014. FCF is expected to be between
$77,000,000 and $81,000,000.
For the fourth quarter of 2014, Core expects revenue of
$285,000,000 to $295,000,000, with
EPS ranging between $1.56 and
$1.61. Within those ranges, operating margins in the
quarter are expected to be approximately 33% while exiting the year
at 34% with year-over-year incremental margins as high as
60%. A 24% effective tax rate is assumed for the fourth
quarter of 2014 as a result of operational activity expected in
higher tax rate jurisdictions. FCF for the final quarter of
2014 is expected to range between $81,000,000 and $85,000,000.
All operational guidance excludes any foreign currency
translations and any shares that may be repurchased other than
already disclosed.
The Company has scheduled a conference call to discuss Core's
second quarter 2014 earnings announcement. The call will
begin at 7:30 a.m. CDT/2:30 p.m. CEST on Thursday, 24 July 2014. To listen to the call, please go to
Core's website at www.corelab.com.
Core Laboratories N.V. (www.corelab.com) is a leading provider
of proprietary and patented reservoir description, production
enhancement, and reservoir management services used to optimize
petroleum reservoir performance. The Company has over 70
offices in more than 50 countries and is located in every major
oil-producing province in the world.
This release includes forward-looking statements regarding the
future revenue, profitability, business strategies and developments
of the Company made in reliance upon the safe harbor provisions of
Federal securities law. The Company's outlook is subject to
various important cautionary factors, including risks and
uncertainties related to the oil and natural gas industry, business
conditions, international markets, international political climates
and other factors as more fully described in the Company's 2013
Form 10-K filed on 13 February 2014,
and in other securities filings. These important factors could
cause the Company's actual results to differ materially from those
described in these forward-looking statements. Such statements are
based on current expectations of the Company's performance and are
subject to a variety of factors, some of which are not under the
control of the Company. Because the information herein is based
solely on data currently available, and because it is subject to
change as a result of changes in conditions over which the Company
has no control or influence, such forward-looking statements should
not be viewed as assurance regarding the Company's future
performance. The Company undertakes no obligation to publicly
update any forward looking statement to reflect events or
circumstances that may arise after the date of this press release,
except as required by law.
CORE LABORATORIES
N.V. & SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
(amounts in
thousands, except per share data)
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
30 June
2014
|
|
30 June
2013
|
|
30 June
2014
|
|
30 June
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REVENUE
|
$
|
267,562
|
|
|
$
|
263,139
|
|
|
$
|
530,465
|
|
|
$
|
524,066
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs of services and
sales
|
168,158
|
|
|
163,503
|
|
|
329,827
|
|
|
327,148
|
|
|
General and
administrative expenses
|
11,148
|
|
|
11,173
|
|
|
21,667
|
|
|
23,982
|
|
|
Depreciation and
amortization
|
6,318
|
|
|
5,964
|
|
|
12,951
|
|
|
11,989
|
|
|
Other (income)
expense, net
|
(2,196)
|
|
|
630
|
|
|
(941)
|
|
|
41
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
INCOME
|
84,134
|
|
|
81,869
|
|
|
166,961
|
|
|
160,906
|
|
Interest
expense
|
2,794
|
|
|
2,263
|
|
|
5,157
|
|
|
4,532
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE INCOME
TAX EXPENSE
|
81,340
|
|
|
79,606
|
|
|
161,804
|
|
|
156,374
|
|
INCOME TAX
EXPENSE
|
17,244
|
|
|
19,664
|
|
|
36,555
|
|
|
39,700
|
|
NET INCOME
|
64,096
|
|
|
59,942
|
|
|
125,249
|
|
|
116,674
|
|
NET INCOME
ATTRIBUTABLE TO NON-CONTROLLING
INTEREST
|
362
|
|
|
266
|
|
|
451
|
|
|
482
|
|
NET INCOME
ATTRIBUTABLE TO CORE LABORATORIES
N.V.
|
$
|
63,734
|
|
|
$
|
59,676
|
|
|
$
|
124,798
|
|
|
$
|
116,192
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings
Per Share:
|
$
|
1.42
|
|
|
$
|
1.29
|
|
|
$
|
2.77
|
|
|
$
|
2.51
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE
DILUTED COMMON SHARES OUTSTANDING
|
44,910
|
|
|
46,128
|
|
|
45,045
|
|
|
46,313
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT
INFORMATION:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
Reservoir
Description
|
$
|
130,589
|
|
|
$
|
129,222
|
|
|
$
|
255,845
|
|
|
$
|
254,467
|
|
Production
Enhancement
|
110,993
|
|
|
110,199
|
|
|
221,273
|
|
|
217,630
|
|
Reservoir
Management
|
25,980
|
|
|
23,718
|
|
|
53,347
|
|
|
51,969
|
|
|
Total
|
$
|
267,562
|
|
|
$
|
263,139
|
|
|
$
|
530,465
|
|
|
$
|
524,066
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income:
|
|
|
|
|
|
|
|
|
|
|
|
Reservoir
Description
|
$
|
36,341
|
|
|
$
|
36,918
|
|
|
$
|
71,194
|
|
|
$
|
71,769
|
|
Production
Enhancement
|
37,660
|
|
|
37,239
|
|
|
74,862
|
|
|
71,477
|
|
Reservoir
Management
|
9,794
|
|
|
7,475
|
|
|
20,268
|
|
|
17,321
|
|
Corporate and
other
|
339
|
|
|
237
|
|
|
637
|
|
|
339
|
|
|
Total
|
$
|
84,134
|
|
|
$
|
81,869
|
|
|
$
|
166,961
|
|
|
$
|
160,906
|
|
CORE LABORATORIES
N.V. & SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEET
(amounts in
thousands)
|
|
ASSETS:
|
30 June
2014
|
|
31 December
2013
|
|
|
(Unaudited)
|
|
|
|
Cash and Cash
Equivalents
|
$
|
29,548
|
|
|
$
|
25,088
|
|
Accounts Receivable,
net
|
200,990
|
|
|
201,322
|
|
Inventory
|
51,392
|
|
|
46,821
|
|
Other Current
Assets
|
40,312
|
|
|
30,637
|
|
|
Total Current
Assets
|
322,242
|
|
|
303,868
|
|
|
|
|
|
|
|
|
Property, Plant and
Equipment, net
|
143,926
|
|
|
138,824
|
|
Intangibles, Goodwill
and Other Long Term Assets, net
|
222,960
|
|
|
218,318
|
|
|
Total
Assets
|
$
|
689,128
|
|
|
$
|
661,010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY:
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
Payable
|
51,292
|
|
|
50,821
|
|
Other Current
Liabilities
|
82,632
|
|
|
84,954
|
|
|
Total Current
Liabilities
|
133,924
|
|
|
135,775
|
|
|
|
|
|
|
|
|
Long-Term Debt &
Lease Obligations
|
333,000
|
|
|
267,002
|
|
Other Long-Term
Liabilities
|
85,923
|
|
|
88,844
|
|
|
|
|
|
|
|
Total
Equity
|
136,281
|
|
|
169,389
|
|
|
Total Liabilities and
Equity
|
$
|
689,128
|
|
|
$
|
661,010
|
|
|
|
|
|
|
|
|
CORE LABORATORIES
N.V. & SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOW
(amounts in
thousands)
(Unaudited)
|
|
|
|
|
Six Months
Ended
|
|
|
|
30 June
2014
|
|
|
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES
|
$
|
131,233
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES
|
(23,553)
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES
|
(103,220)
|
|
|
|
|
|
|
NET CHANGE IN CASH
AND CASH EQUIVALENTS
|
4,460
|
|
CASH AND CASH
EQUIVALENTS, beginning of period
|
25,088
|
|
CASH AND CASH
EQUIVALENTS, end of period
|
$
|
29,548
|
|
|
|
|
|
|
Non-GAAP Information
Management believes that the exclusion of certain income and
expenses enables it to evaluate more effectively the Company's
operations period-over-period and to identify operating trends that
could otherwise be masked by the excluded Items. For this
reason, we used certain non-GAAP measures that exclude these Items;
and we feel that this presentation provides the public a clearer
comparison with the numbers reported in prior periods.
Reconciliation of
Operating Income
(amounts in
thousands)
(Unaudited)
|
|
|
Three Months
Ended
|
|
|
30 June
2014
|
|
Operating
income
|
$
|
84,134
|
|
|
Foreign exchange
(gains) losses
|
(1,300)
|
|
|
Operating income
excluding foreign exchange
|
$
|
82,834
|
|
|
|
Three Months Ended
30 June 2014
|
|
|
Reservoir
Description
|
|
Production
Enhancement
|
|
Reservoir
Management
|
|
Operating
income
|
$
|
36,341
|
|
|
$
|
37,660
|
|
|
$
|
9,794
|
|
|
Foreign exchange
(gains) losses
|
(774)
|
|
|
(315)
|
|
|
(226)
|
|
|
Operating income
excluding foreign exchange
|
$
|
35,567
|
|
|
$
|
37,345
|
|
|
$
|
9,568
|
|
|
Reconciliation of
Net Income
(amounts in
thousands)
(Unaudited)
|
|
|
Three Months
Ended
|
|
|
30 June
2014
|
|
Net income
|
$
|
63,734
|
|
|
Foreign exchange
(gains) losses (net of tax)
|
(1,024)
|
|
|
Impact of lower
effective tax rate
|
(2,242)
|
|
|
Net income excluding
specific items
|
$
|
60,468
|
|
|
Reconciliation of
Earnings Per Diluted Share
(Unaudited)
|
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
|
30 June
2014
|
|
30 June
2013
|
|
Earnings per diluted
share
|
$
|
1.42
|
|
|
$
|
1.29
|
|
|
Foreign exchange
(gains) losses (net of tax)
|
(0.02)
|
|
|
0.03
|
|
|
Impact of lower
effective tax rate
|
(0.05)
|
|
|
—
|
|
|
Pro-Forma earnings
per diluted share
|
$
|
1.35
|
|
|
$
|
1.32
|
|
|
Free Cash Flow
Core uses the non-GAAP measure of free cash flow to evaluate its
cash flows and results of operations. Free cash flow is an
important measurement because it represents the cash from
operations, in excess of capital expenditures, available to operate
the business and fund non-discretionary obligations. Free cash flow
is not a measure of operating performance under GAAP, and should
not be considered in isolation nor construed as an alternative
consideration to operating income, net income, earnings per share,
or cash flows from operating, investing, or financing activities,
each as determined in accordance with GAAP. You should also not
consider free cash flow as a measure of liquidity. Moreover, since
free cash flow is not a measure determined in accordance with GAAP
and thus is susceptible to varying interpretations and
calculations, free cash flow as presented may not be comparable to
similarly titled measures presented by other companies.
Computation of
Free Cash Flow
(amounts in
thousands)
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
30 June
2014
|
|
30 June
2014
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
|
65,609
|
|
|
$
|
131,233
|
|
Capital
expenditures
|
|
(12,119)
|
|
|
(19,787)
|
|
Free cash
flow
|
|
$
|
53,490
|
|
|
$
|
111,446
|
|
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SOURCE Core Laboratories N.V.