NOV Reports First Quarter 2022 Results
“NOV’s financial results continued to improve through the first quarter of 2022, as the Company benefited from better execution and improving pricing,” stated
“Nevertheless, global oilfield activity is slowly rising with growing urgency, and this helped drive another quarter of strong orders for the Company with book-to-bill once again exceeding 100 percent. While NOV has a ways to go to achieve our desired financial results, the first quarter demonstrated clear, continued progress. With our innovative portfolio of technology and products, global team of talented individuals and strong financial position, NOV stands ready to help the industry confront these challenges as we advance into the emerging oilfield up-cycle.”
Wellbore Technologies
Wellbore Technologies generated revenues of
Completion & Production Solutions
Completion & Production Solutions generated revenues of
New orders booked during the quarter totaled
Rig Technologies
Rig Technologies generated revenues of
New orders booked during the quarter totaled
Corporate Information
During the first quarter, the Company recognized
As of
Significant Achievements
NOV was awarded a large equipment package for a new wind power installation vessel. This award, which includes a jacking system, heavy-lift crane, and a special barge handling system, is part of an innovative concept that is expected to improve offshore wind farm economics by using a specially designed feeder barge system that will improve installation process efficiencies by up to 30% compared to conventional vessels. The Jones Act compliant solution is contracted to operate in
NOV conducted successful trials of surface automation technology with two major national oil company customers in the
NOV’s MPowerD™ managed pressure drilling (MPD) product line, augmented by the recent acquisition of AFGlobal’s Advanced Drilling Systems™ business, rapidly expanded its market presence during the first quarter. NOV installed and commissioned an MPD upgrade package integrated with the Company's NOVOS™ drilling system for a deepwater rig preparing to go back to work in
NOV partnered with a large Asian shipyard to secure a contract for a pre-Front End Engineering and Design (pre-FEED) study for a European energy major aiming to develop floating wind power projects in
NOV received a major order for Fiberspar™ 6-inch reinforced thermoplastic pipe 1500-series product from an engineering services provider for Phase B of the Northern Arabia unconventional gas field development in Turaif,
NOV received significant bookings for its recently launched Mach 1™ Horizontal Pumping System (HPS). Each Mach 1 HPS is designed to extend operational life, reduce maintenance, and offer flexible, easy deployment in unpredictable site conditions. Pre-wired with NOV's GoConnect™ equipment monitoring solution and Guardian™ automation and control, this pump gives operators the ability to capture, visualize, and analyze data in real-time, monitor conditions, and automate flow to enhance site safety and optimize production.
NOV received multiple orders for the Valkyrie™ abandonment system from an oil and gas production company in
First Quarter Earnings Conference Call
NOV will hold a conference call to discuss its first quarter 2022 results on
About NOV
NOV (NYSE: NOV) delivers technology-driven solutions to empower the global energy industry. For more than 150 years, NOV has pioneered innovations that enable its customers to safely produce abundant energy while minimizing environmental impact. The energy industry depends on NOV’s deep expertise and technology to continually improve oilfield operations and assist in efforts to advance the energy transition towards a more sustainable future. NOV powers the industry that powers the world.
Visit www.nov.com for more information.
Non-GAAP Financial Measures
This press release contains certain non-GAAP financial measures that management believes are useful tools for internal use and the investment community in evaluating NOV’s overall financial performance. These non-GAAP financial measures are broadly used to value and compare companies in the oilfield services and equipment industry. Not all companies define these measures in the same way. In addition, these non-GAAP financial measures are not a substitute for financial measures prepared in accordance with GAAP and should therefore be considered only as supplemental to such GAAP financial measures. Please see the attached schedules for reconciliations of the differences between the non-GAAP financial measures used in this press release and the most directly comparable GAAP financial measures.
Cautionary Statement for the Purpose of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995
Statements made in this press release that are forward-looking in nature are intended to be “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934 and may involve risks and uncertainties. These statements may differ materially from the actual future events or results. Readers are referred to documents filed by NOV with the
Certain prior period amounts have been reclassified in this press release to be consistent with current period presentation.
|
||||||||||||
CONSOLIDATED STATEMENTS OF INCOME (LOSS) (Unaudited) |
||||||||||||
(In millions, except per share data) |
||||||||||||
|
|
Three Months Ended |
||||||||||
|
|
|
|
|
||||||||
|
|
2022 |
|
2021 |
|
2021 |
||||||
Revenue: |
|
|
|
|
|
|
|
|
|
|||
Wellbore Technologies |
|
$ |
608 |
|
|
$ |
413 |
|
|
$ |
576 |
|
Completion & Production Solutions |
|
|
530 |
|
|
|
439 |
|
|
|
549 |
|
Rig Technologies |
|
|
441 |
|
|
|
431 |
|
|
|
431 |
|
Eliminations |
|
|
(31 |
) |
|
|
(34 |
) |
|
|
(39 |
) |
Total revenue |
|
|
1,548 |
|
|
|
1,249 |
|
|
|
1,517 |
|
Gross profit |
|
|
214 |
|
|
|
156 |
|
|
|
202 |
|
Gross profit % |
|
|
13.8 |
% |
|
|
12.5 |
% |
|
|
13.3 |
% |
|
|
|
|
|
|
|
|
|
|
|||
Selling, general, and administrative |
|
|
235 |
|
|
|
244 |
|
|
|
217 |
|
Operating loss |
|
|
(21 |
) |
|
|
(88 |
) |
|
|
(15 |
) |
Interest and financial costs |
|
|
(19 |
) |
|
|
(20 |
) |
|
|
(19 |
) |
Interest income |
|
|
1 |
|
|
|
2 |
|
|
|
2 |
|
Equity income (loss) in unconsolidated affiliates |
|
|
6 |
|
|
|
(4 |
) |
|
|
1 |
|
Other income (expense), net |
|
|
(2 |
) |
|
|
(10 |
) |
|
|
2 |
|
Loss before income taxes |
|
|
(35 |
) |
|
|
(120 |
) |
|
|
(29 |
) |
Provision (benefit) for income taxes |
|
|
14 |
|
|
|
(6 |
) |
|
|
14 |
|
Net loss |
|
|
(49 |
) |
|
|
(114 |
) |
|
|
(43 |
) |
Net income (loss) attributable to noncontrolling interests |
|
|
1 |
|
|
|
1 |
|
|
|
(3 |
) |
Net loss attributable to Company |
|
$ |
(50 |
) |
|
$ |
(115 |
) |
|
$ |
(40 |
) |
Per share data: |
|
|
|
|
|
|
|
|
|
|||
Basic |
|
$ |
(0.13 |
) |
|
$ |
(0.30 |
) |
|
$ |
(0.10 |
) |
Diluted |
|
$ |
(0.13 |
) |
|
$ |
(0.30 |
) |
|
$ |
(0.10 |
) |
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|||
Basic |
|
|
387 |
|
|
|
385 |
|
|
|
387 |
|
Diluted |
|
|
387 |
|
|
|
385 |
|
|
|
387 |
|
|
||||||
CONSOLIDATED BALANCE SHEETS |
||||||
(In millions) |
||||||
|
|
|
|
|
||
|
|
2022 |
|
2021 |
||
ASSETS |
|
(Unaudited) |
|
|
||
Current assets: |
|
|
|
|
||
Cash and cash equivalents |
|
$ |
1,406 |
|
$ |
1,591 |
Receivables, net |
|
|
1,465 |
|
|
1,321 |
Inventories, net |
|
|
1,440 |
|
|
1,331 |
Contract assets |
|
|
433 |
|
|
461 |
Prepaid and other current assets |
|
|
205 |
|
|
198 |
Total current assets |
|
|
4,949 |
|
|
4,902 |
|
|
|
|
|
||
Property, plant and equipment, net |
|
|
1,806 |
|
|
1,823 |
Lease right-of-use assets |
|
|
522 |
|
|
537 |
|
|
|
2,020 |
|
|
2,030 |
Other assets |
|
|
256 |
|
|
258 |
Total assets |
|
$ |
9,553 |
|
$ |
9,550 |
|
|
|
|
|
||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
||
Current liabilities: |
|
|
|
|
||
Accounts payable |
|
$ |
643 |
|
$ |
612 |
Accrued liabilities |
|
|
807 |
|
|
778 |
Contract liabilities |
|
|
403 |
|
|
392 |
Current portion of lease liabilities |
|
|
93 |
|
|
99 |
Current portion of long-term debt |
|
|
5 |
|
|
5 |
Accrued income taxes |
|
|
28 |
|
|
24 |
Total current liabilities |
|
|
1,979 |
|
|
1,910 |
|
|
|
|
|
||
Lease liabilities |
|
|
568 |
|
|
576 |
Long-term debt |
|
|
1,709 |
|
|
1,708 |
Other liabilities |
|
|
287 |
|
|
292 |
Total liabilities |
|
|
4,543 |
|
|
4,486 |
|
|
|
|
|
||
Total stockholders’ equity |
|
|
5,010 |
|
|
5,064 |
Total liabilities and stockholders’ equity |
|
$ |
9,553 |
|
$ |
9,550 |
|
||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
||||||||
(In millions) |
||||||||
|
|
Three Months Ended |
||||||
|
|
|
||||||
|
|
2022 |
|
2021 |
||||
Cash flows from operating activities: |
|
|
|
|||||
Net loss |
|
$ |
(49 |
) |
|
$ |
(114 |
) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
74 |
|
|
|
79 |
|
Working capital and other operating items, net |
|
|
(128 |
) |
|
|
8 |
|
Net cash used in operating activities |
|
|
(103 |
) |
|
|
(27 |
) |
|
|
|
|
|
|
|
||
Cash flows from investing activities: |
|
|
|
|
|
|
||
Purchases of property, plant and equipment |
|
|
(46 |
) |
|
|
(49 |
) |
Other |
|
|
(3 |
) |
|
|
(2 |
) |
Net cash used in investing activities |
|
|
(49 |
) |
|
|
(51 |
) |
|
|
|
|
|
|
|
||
Cash flows from financing activities: |
|
|
|
|
|
|
||
Borrowings against lines of credit and other debt |
|
|
1 |
|
|
|
17 |
|
Cash dividends paid |
|
|
(20 |
) |
|
|
— |
|
Other |
|
|
(17 |
) |
|
|
(20 |
) |
Net cash used in financing activities |
|
|
(36 |
) |
|
|
(3 |
) |
Effect of exchange rates on cash |
|
|
3 |
|
|
|
(4 |
) |
Decrease in cash and cash equivalents |
|
|
(185 |
) |
|
|
(85 |
) |
Cash and cash equivalents, beginning of period |
|
|
1,591 |
|
|
|
1,692 |
|
Cash and cash equivalents, end of period |
|
$ |
1,406 |
|
|
$ |
1,607 |
|
RECONCILIATION OF ADJUSTED EBITDA TO NET INCOME (LOSS) (Unaudited)
(In millions)
Presented below is a reconciliation of Net Income (Loss) to Adjusted EBITDA. The Company defines Adjusted EBITDA as Operating Profit excluding Depreciation, Amortization, Gains and Losses on Sales of Fixed Assets, and, when applicable, Other Items. Management believes this is important information to provide because it is used by management to evaluate the Company’s operational performance and trends between periods and manage the business. Management also believes this information may be useful to investors and analysts to gain a better understanding of the Company’s results of ongoing operations. Adjusted EBITDA is not intended to replace GAAP financial measures, such as Net Income. Other Items include impairment, restructure, severance, facility closure costs and inventory charges and credits.
|
|
Three Months Ended |
||||||||||
|
|
|
|
|
||||||||
|
|
2022 |
|
2021 |
|
2021 |
||||||
Operating profit (loss): |
|
|
|
|
|
|
|
|
|
|||
Wellbore Technologies |
|
$ |
39 |
|
|
$ |
(14 |
) |
|
$ |
50 |
|
Completion & Production Solutions |
|
|
(22 |
) |
|
|
(17 |
) |
|
|
(16 |
) |
Rig Technologies |
|
|
11 |
|
|
|
(8 |
) |
|
|
1 |
|
Eliminations and corporate costs |
|
|
(49 |
) |
|
|
(49 |
) |
|
|
(50 |
) |
Total operating profit (loss) |
|
$ |
(21 |
) |
|
$ |
(88 |
) |
|
$ |
(15 |
) |
|
|
|
|
|
|
|
|
|
|
|||
Other items, net: |
|
|
|
|
|
|
|
|
|
|||
Wellbore Technologies |
|
$ |
23 |
|
|
$ |
4 |
|
|
$ |
2 |
|
Completion & Production Solutions |
|
|
16 |
|
|
|
(2 |
) |
|
|
2 |
|
Rig Technologies |
|
|
6 |
|
|
|
3 |
|
|
|
3 |
|
Corporate |
|
|
— |
|
|
|
2 |
|
|
|
1 |
|
Total other items |
|
$ |
45 |
|
|
$ |
7 |
|
|
$ |
8 |
|
|
|
|
|
|
|
|
|
|
|
|||
(Gain)/Loss on Sales of Fixed Assets: |
|
|
|
|
|
|
|
|
|
|||
Wellbore Technologies |
|
$ |
2 |
|
|
$ |
2 |
|
|
$ |
(3 |
) |
Completion & Production Solutions |
|
|
— |
|
|
|
— |
|
|
|
— |
|
Rig Technologies |
|
|
1 |
|
|
|
— |
|
|
|
— |
|
Eliminations and corporate costs |
|
|
2 |
|
|
|
— |
|
|
|
4 |
|
Total (gain)/loss on sales of fixed assets |
|
$ |
5 |
|
|
$ |
2 |
|
|
$ |
1 |
|
|
|
|
|
|
|
|
|
|
|
|||
Depreciation & amortization: |
|
|
|
|
|
|
|
|
|
|||
Wellbore Technologies |
|
$ |
37 |
|
|
$ |
42 |
|
|
$ |
39 |
|
Completion & Production Solutions |
|
|
16 |
|
|
|
15 |
|
|
|
16 |
|
Rig Technologies |
|
|
18 |
|
|
|
18 |
|
|
|
17 |
|
Corporate |
|
|
3 |
|
|
|
4 |
|
|
|
3 |
|
Total depreciation & amortization |
|
$ |
74 |
|
|
$ |
79 |
|
|
$ |
75 |
|
|
|
|
|
|
|
|
|
|
|
|||
Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|||
Wellbore Technologies |
|
$ |
101 |
|
|
$ |
34 |
|
|
$ |
88 |
|
Completion & Production Solutions |
|
|
10 |
|
|
|
(4 |
) |
|
|
2 |
|
Rig Technologies |
|
|
36 |
|
|
|
13 |
|
|
|
21 |
|
Eliminations and corporate costs |
|
|
(44 |
) |
|
|
(43 |
) |
|
|
(42 |
) |
Total Adjusted EBITDA |
|
$ |
103 |
|
|
$ |
— |
|
|
$ |
69 |
|
|
|
|
|
|
|
|
|
|
|
|||
Reconciliation of Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|||
GAAP net loss attributable to Company |
|
$ |
(50 |
) |
|
$ |
(115 |
) |
|
$ |
(40 |
) |
Noncontrolling interests |
|
|
1 |
|
|
|
1 |
|
|
|
(3 |
) |
Provision (benefit) for income taxes |
|
|
14 |
|
|
|
(6 |
) |
|
|
14 |
|
Interest expense |
|
|
19 |
|
|
|
20 |
|
|
|
19 |
|
Interest income |
|
|
(1 |
) |
|
|
(2 |
) |
|
|
(2 |
) |
Equity (income) loss in unconsolidated affiliate |
|
|
(6 |
) |
|
|
4 |
|
|
|
(1 |
) |
Other (income) expense, net |
|
|
2 |
|
|
|
10 |
|
|
|
(2 |
) |
(Gain)/Loss on Sales of Fixed Assets |
|
|
5 |
|
|
|
2 |
|
|
|
1 |
|
Depreciation and amortization |
|
|
74 |
|
|
|
79 |
|
|
|
75 |
|
Other items, net |
|
|
45 |
|
|
|
7 |
|
|
|
8 |
|
Total Adjusted EBITDA |
|
$ |
103 |
|
|
$ |
— |
|
|
$ |
69 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20220428006153/en/
Vice President, Corporate Development and Investor Relations
(713) 815-3535
Blake.McCarthy@nov.com
Source: