NOV Reports Second Quarter 2021 Results
“Rising demand in oilfield and offshore wind markets led to stronger orders for NOV during the second quarter,” stated
“While our second quarter financial results continued to reflect 2020’s historic decline in oilfield activity and orders, we are encouraged by rising inquiries and activity, and we believe post-pandemic global economic recovery will spur further top-line growth. In the meantime, government-mandated shutdowns continue to disrupt global supply chains, limit raw material availability, and pose challenges for our workforce. NOV did a better job navigating these headwinds in the second quarter, while continuing to advance the Company’s leading-edge technology offerings for the oilfield and renewables markets. NOV’s portfolio of newly-developed technologies positions the Company well to take advantage of what we believe is the beginning of a multi-year growth market for both conventional and clean energy technologies.”
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
Other Corporate Items
During the second quarter, the Company recognized
Cash flow provided by operations for the second quarter was
Significant Achievements
NOV continued its expansion into the offshore wind energy market, utilizing the Company’s expertise in heavy lift and marine design to accelerate the evolution of the next generation of offshore wind equipment. During the quarter, NOV signed a contract for the design and jacking systems for a European client’s new wind installation vessel in addition to a contract for a heavy lift crane upgrade to an existing wind installation vessel that will give it the capability to install next-generation wind turbines. NOV also successfully tested its new in-line chain tensioner that facilitates the offloading of floating wind turbines as well as the mooring operations of FPSO systems, which led to a subsequent project award.
NOV continues to drive innovation in the managed pressure drilling (MPD) market and delivered its first project that integrates the NOVOS™ drilling system and the MPowerD™ MPD system, which enables the automation of multiple drilling sequences with precise pressure control, creating significant drilling time efficiencies while also fostering a safer drilling process. The success of this initial project, which utilized our single-choke 1500SE system, led to an award of three additional packages, for which NOV will provide field operations support, MPD planning advisory, and its 1500SE system.
NOV continued to expand its market with the Company’s growing portfolio of products that enable customers to reduce their
NOV received a contract award to supply a large submerged turret production (STP) system for a floating production storage and offloading (FPSO) vessel in the Barossa gas field offshore of
NOV secured a repeat order for our PowerBlade™ hybrid energy storage and regeneration system, which provides up to a 70% reduction in power consumption of the draw-works and significantly reduces drilling rig emissions. NOV also collaborated with a customer to design an interface for unique energy and
NOV delivered the industry’s first 3 million-pound, 20,000 psi-rated landing string. NOV worked closely with its customers for more than six years to develop a product that meets the offshore market’s most challenging needs. Designed to provide higher tensile capacity, increased elevator capacity, and greater slip-crushing resistance, Grant Prideco™ landing strings are optimized to provide the highest-possible tensile strength to enable running and landing casing and other heavy equipment on offshore wells, particularly in deep water.
NOV technology continued to enable geothermal operators to overcome some of the most challenging drilling conditions. An initial run using ReedHycalog’s™ PDC ION+™ 3D shaped cutters significantly exceeded a key customer’s expectations in an ultrahard rock formation, resulting in the customer’s decision to utilize NOV’s bits on all wells in their critical geothermal research project that will be drilled in the second half of 2021.
NOV won a large contract to supply 59,875 ft of TK-Liner for geothermal wells in
NOV has secured orders for seawater treatment, gas dehydration, and produced water treatment modules for two separate FPSOs to be operated offshore
NOV offered the most efficient bit selection for an important drilling campaign in
NOV’s Subsea Production Systems business unit was awarded two large contracts in
Second Quarter Earnings Conference Call
NOV will hold a conference call to discuss its second quarter 2021 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.
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 |
|
Six Months Ended |
||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||
|
|
2021 |
|
2020 |
|
2021 |
|
2021 |
|
2020 |
||||||||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Wellbore Technologies |
|
$ |
463 |
|
|
$ |
442 |
|
|
$ |
413 |
|
|
$ |
876 |
|
|
$ |
1,133 |
|
Completion & Production Solutions |
|
|
497 |
|
|
|
611 |
|
|
|
439 |
|
|
|
936 |
|
|
|
1,286 |
|
Rig Technologies |
|
|
487 |
|
|
|
476 |
|
|
|
431 |
|
|
|
918 |
|
|
|
1,033 |
|
Eliminations |
|
|
(30 |
) |
|
|
(33 |
) |
|
|
(34 |
) |
|
|
(64 |
) |
|
|
(73 |
) |
Total revenue |
|
|
1,417 |
|
|
|
1,496 |
|
|
|
1,249 |
|
|
|
2,666 |
|
|
|
3,379 |
|
Gross profit |
|
|
231 |
|
|
|
137 |
|
|
|
156 |
|
|
|
387 |
|
|
|
361 |
|
Gross profit % |
|
|
16.3 |
% |
|
|
9.2 |
% |
|
|
12.5 |
% |
|
|
14.5 |
% |
|
|
10.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general, and administrative |
|
|
219 |
|
|
|
237 |
|
|
|
244 |
|
|
|
463 |
|
|
|
520 |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,378 |
|
Long-lived asset impairment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
513 |
|
Operating profit (loss) |
|
|
12 |
|
|
|
(100 |
) |
|
|
(88 |
) |
|
|
(76 |
) |
|
|
(2,050 |
) |
Interest and financial costs |
|
|
(19 |
) |
|
|
(22 |
) |
|
|
(20 |
) |
|
|
(39 |
) |
|
|
(44 |
) |
Interest income |
|
|
2 |
|
|
|
2 |
|
|
|
2 |
|
|
|
4 |
|
|
|
5 |
|
Equity loss in unconsolidated affiliates |
|
|
— |
|
|
|
(6 |
) |
|
|
(4 |
) |
|
|
(4 |
) |
|
|
(239 |
) |
Other income (expense), net |
|
|
(16 |
) |
|
|
(8 |
) |
|
|
(10 |
) |
|
|
(26 |
) |
|
|
(11 |
) |
Loss before income taxes |
|
|
(21 |
) |
|
|
(134 |
) |
|
|
(120 |
) |
|
|
(141 |
) |
|
|
(2,339 |
) |
Provision (benefit) for income taxes |
|
|
2 |
|
|
|
(47 |
) |
|
|
(6 |
) |
|
|
(4 |
) |
|
|
(203 |
) |
Net loss |
|
|
(23 |
) |
|
|
(87 |
) |
|
|
(114 |
) |
|
|
(137 |
) |
|
|
(2,136 |
) |
Net loss attributable to noncontrolling interests |
|
|
3 |
|
|
|
6 |
|
|
|
1 |
|
|
|
4 |
|
|
|
4 |
|
Net loss attributable to Company |
|
$ |
(26 |
) |
|
$ |
(93 |
) |
|
$ |
(115 |
) |
|
$ |
(141 |
) |
|
$ |
(2,140 |
) |
Per share data: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic |
|
$ |
(0.07 |
) |
|
$ |
(0.24 |
) |
|
$ |
(0.30 |
) |
|
$ |
(0.37 |
) |
|
$ |
(5.57 |
) |
Diluted |
|
$ |
(0.07 |
) |
|
$ |
(0.24 |
) |
|
$ |
(0.30 |
) |
|
$ |
(0.37 |
) |
|
$ |
(5.57 |
) |
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic |
|
|
386 |
|
|
|
385 |
|
|
|
385 |
|
|
|
386 |
|
|
|
384 |
|
Diluted |
|
|
386 |
|
|
|
385 |
|
|
|
385 |
|
|
|
386 |
|
|
|
384 |
|
CONSOLIDATED BALANCE SHEETS (Unaudited) (In millions) |
||||||
|
|
|
|
|
||
|
|
2021 |
|
2020 |
||
ASSETS |
|
(Unaudited) |
|
|
||
Current assets: |
|
|
|
|
||
Cash and cash equivalents |
|
$ |
1,572 |
|
$ |
1,692 |
Receivables, net |
|
|
1,258 |
|
|
1,274 |
Inventories, net |
|
|
1,322 |
|
|
1,408 |
Contract assets |
|
|
534 |
|
|
611 |
Other current assets |
|
|
222 |
|
|
224 |
Total current assets |
|
|
4,908 |
|
|
5,209 |
|
|
|
|
|
||
Property, plant and equipment, net |
|
|
1,871 |
|
|
1,927 |
Lease right-of-use assets |
|
|
552 |
|
|
566 |
|
|
|
2,003 |
|
|
2,020 |
Other assets |
|
|
267 |
|
|
207 |
Total assets |
|
$ |
9,601 |
|
$ |
9,929 |
|
|
|
|
|
||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
||
Current liabilities: |
|
|
|
|
||
Accounts payable |
|
$ |
526 |
|
$ |
489 |
Accrued liabilities |
|
|
771 |
|
|
863 |
Contract liabilities |
|
|
392 |
|
|
354 |
Current portion of lease liabilities |
|
|
105 |
|
|
110 |
Accrued income taxes |
|
|
16 |
|
|
51 |
Total current liabilities |
|
|
1,810 |
|
|
1,867 |
|
|
|
|
|
||
Lease liabilities |
|
|
595 |
|
|
612 |
Long-term debt |
|
|
1,686 |
|
|
1,834 |
Other liabilities |
|
|
332 |
|
|
337 |
Total liabilities |
|
|
4,423 |
|
|
4,650 |
|
|
|
|
|
||
Total stockholders’ equity |
|
|
5,178 |
|
|
5,279 |
Total liabilities and stockholders’ equity |
|
$ |
9,601 |
|
$ |
9,929 |
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In millions) |
||||||||
|
|
Six Months Ended |
||||||
|
|
|
||||||
|
|
2021 |
|
2020 |
||||
Cash flows from operating activities: |
|
|
||||||
Net loss |
|
$ |
(137 |
) |
|
$ |
(2,136 |
) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|
||||
Depreciation and amortization |
|
|
156 |
|
|
|
187 |
|
|
|
|
— |
|
|
|
1,378 |
|
Long-lived asset impairment |
|
|
— |
|
|
|
513 |
|
Working capital and other operating items, net |
|
|
131 |
|
|
|
475 |
|
Net cash provided by operating activities |
|
|
150 |
|
|
|
417 |
|
|
|
|
|
|
||||
Cash flows from investing activities: |
|
|
|
|
||||
Purchases of property, plant and equipment |
|
|
(98 |
) |
|
|
(124 |
) |
Other |
|
|
9 |
|
|
|
13 |
|
Net cash used in investing activities |
|
|
(89 |
) |
|
|
(111 |
) |
|
|
|
|
|
||||
Cash flows from financing activities: |
|
|
|
|
||||
Borrowings against lines of credit and other debt |
|
|
34 |
|
|
|
25 |
|
Payments against lines of credit and other debt |
|
|
(183 |
) |
|
|
— |
|
Cash dividends paid |
|
|
— |
|
|
|
(19 |
) |
Other |
|
|
(33 |
) |
|
|
(33 |
) |
Net cash used in financing activities |
|
|
(182 |
) |
|
|
(27 |
) |
Effect of exchange rates on cash |
|
|
1 |
|
|
|
(3 |
) |
Increase (decrease) in cash and cash equivalents |
|
|
(120 |
) |
|
|
276 |
|
Cash and cash equivalents, beginning of period |
|
|
1,692 |
|
|
|
1,171 |
|
Cash and cash equivalents, end of period |
|
$ |
1,572 |
|
|
$ |
1,447 |
|
RECONCILIATION OF ADJUSTED EBITDA TO NET INCOME (LOSS) (Unaudited) (In millions) |
||||||||||||||||||||
The Company discloses Adjusted EBITDA (defined as Operating Profit excluding Depreciation, Amortization and, when applicable, Other Items) in its periodic earnings press releases and other public disclosures to provide investors additional information about the results of ongoing operations. The Company uses Adjusted EBITDA internally to evaluate and manage the business. Adjusted EBITDA is not intended to replace GAAP financial measures, such as Net Income. Other Items include impairment and restructure charges (severance, facility closure, and inventory write downs) net of related credits. |
||||||||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||
|
|
2021 |
|
2020 |
|
2021 |
|
2021 |
|
2020 |
||||||||||
Operating profit (loss): |
|
|
|
|
|
|
|
|
|
|
||||||||||
Wellbore Technologies |
|
$ |
6 |
|
|
$ |
(67 |
) |
|
$ |
(14 |
) |
|
$ |
(8 |
) |
|
$ |
(730 |
) |
Completion & Production Solutions |
|
|
(6 |
) |
|
|
42 |
|
|
|
(17 |
) |
|
|
(23 |
) |
|
|
(971 |
) |
Rig Technologies |
|
|
49 |
|
|
|
(25 |
) |
|
|
(8 |
) |
|
|
41 |
|
|
|
(227 |
) |
Eliminations and corporate costs |
|
|
(37 |
) |
|
|
(50 |
) |
|
|
(49 |
) |
|
|
(86 |
) |
|
|
(122 |
) |
Total operating loss |
|
$ |
12 |
|
|
$ |
(100 |
) |
|
$ |
(88 |
) |
|
$ |
(76 |
) |
|
$ |
(2,050 |
) |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other items: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Wellbore Technologies |
|
$ |
18 |
|
|
$ |
62 |
|
|
$ |
6 |
|
|
$ |
24 |
|
|
$ |
777 |
|
Completion & Production Solutions |
|
|
(6 |
) |
|
|
12 |
|
|
|
(2 |
) |
|
|
(8 |
) |
|
|
1,066 |
|
Rig Technologies |
|
|
8 |
|
|
|
20 |
|
|
|
3 |
|
|
|
11 |
|
|
|
258 |
|
Corporate |
|
|
(5 |
) |
|
|
8 |
|
|
|
2 |
|
|
|
(3 |
) |
|
|
24 |
|
Total other items |
|
$ |
15 |
|
|
$ |
102 |
|
|
$ |
9 |
|
|
$ |
24 |
|
|
$ |
2,125 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation & amortization: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Wellbore Technologies |
|
$ |
39 |
|
|
$ |
47 |
|
|
$ |
42 |
|
|
$ |
81 |
|
|
$ |
98 |
|
Completion & Production Solutions |
|
|
16 |
|
|
|
14 |
|
|
|
15 |
|
|
|
31 |
|
|
|
44 |
|
Rig Technologies |
|
|
18 |
|
|
|
19 |
|
|
|
18 |
|
|
|
36 |
|
|
|
39 |
|
Corporate |
|
|
4 |
|
|
|
2 |
|
|
|
4 |
|
|
|
8 |
|
|
|
6 |
|
Total depreciation & amortization |
|
$ |
77 |
|
|
$ |
82 |
|
|
$ |
79 |
|
|
$ |
156 |
|
|
$ |
187 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Wellbore Technologies |
|
$ |
63 |
|
|
$ |
42 |
|
|
$ |
34 |
|
|
$ |
97 |
|
|
$ |
145 |
|
Completion & Production Solutions |
|
|
4 |
|
|
|
68 |
|
|
|
(4 |
) |
|
|
— |
|
|
|
139 |
|
Rig Technologies |
|
|
75 |
|
|
|
14 |
|
|
|
13 |
|
|
|
88 |
|
|
|
70 |
|
Eliminations and corporate costs |
|
|
(38 |
) |
|
|
(40 |
) |
|
|
(43 |
) |
|
|
(81 |
) |
|
|
(92 |
) |
Total Adjusted EBITDA |
|
$ |
104 |
|
|
$ |
84 |
|
|
$ |
— |
|
|
$ |
104 |
|
|
$ |
262 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reconciliation of Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
||||||||||
GAAP net loss attributable to Company |
|
$ |
(26 |
) |
|
$ |
(93 |
) |
|
$ |
(115 |
) |
|
$ |
(141 |
) |
|
$ |
(2,140 |
) |
Noncontrolling interests |
|
|
3 |
|
|
|
6 |
|
|
|
1 |
|
|
|
4 |
|
|
|
4 |
|
Benefit for income taxes |
|
|
2 |
|
|
|
(47 |
) |
|
|
(6 |
) |
|
|
(4 |
) |
|
|
(203 |
) |
Interest expense |
|
|
19 |
|
|
|
22 |
|
|
|
20 |
|
|
|
39 |
|
|
|
44 |
|
Interest income |
|
|
(2 |
) |
|
|
(2 |
) |
|
|
(2 |
) |
|
|
(4 |
) |
|
|
(5 |
) |
Equity loss in unconsolidated affiliate |
|
|
— |
|
|
|
6 |
|
|
|
4 |
|
|
|
4 |
|
|
|
239 |
|
Other (income) expense, net |
|
|
16 |
|
|
|
8 |
|
|
|
10 |
|
|
|
26 |
|
|
|
11 |
|
Depreciation and amortization |
|
|
77 |
|
|
|
82 |
|
|
|
79 |
|
|
|
156 |
|
|
|
187 |
|
Other items |
|
|
15 |
|
|
|
102 |
|
|
|
9 |
|
|
|
24 |
|
|
|
2,125 |
|
Total Adjusted EBITDA |
|
$ |
104 |
|
|
$ |
84 |
|
|
$ |
— |
|
|
$ |
104 |
|
|
$ |
262 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20210727006178/en/
Vice President, Corporate Development and Investor Relations
(713) 815-3535
Blake.McCarthy@nov.com
Source: