NOV Reports Second Quarter 2022 Earnings
- Revenue of
$1.73 billion , up 12% sequentially and 22% year-over-year - Net Income of
$69 million , or$0.18 per fully diluted share - Operating profit of
$68 million , up$89 million sequentially and$56 million year-over-year - Adjusted EBITDA* of
$150 million , up$47 million sequentially and$46 million year-over-year - Orders of
$670 million with a book-to-bill of 117%
*Adjusted EBITDA is a non-GAAP measure, see “Non-GAAP Financial Measures” and “Reconciliation of Adjusted EBITDA to Net Income (Loss)” below.
“NOV’s second quarter results reflect improving execution, customer demand, and pricing,” stated
“Diminished global oil and gas inventories and productive capacity; rising energy security risks; and higher commodity prices are spurring increased oilfield activity. However, the industry is struggling to ramp up following years of downsizing and underinvestment. The urgent need to rebuild oilfield service capabilities remains constrained by the limited availability, of certain critical components; freight and logistics challenges; tightness in many labor markets; inflationary pressures; and higher costs-of-capital for oilfield enterprises.
“Nevertheless, NOV’s second quarter book-to-bill exceeded 100 percent for the fifth quarter in a row, a key indication that the industry is embracing its critical mission of restoring its capabilities to provide oil and gas supply to an energy-starved global economy. As the early phase of this up-cycle advances, the people of NOV are diligently working to assist our vital industry in its efforts to alleviate challenges in meeting the world’s need for affordable, secure, and clean energy supplies,” concluded Williams.
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 second quarter, the Company recognized
Cash flow used in operations was
As of
Significant Achievements
NOV’s Rig Technologies segment was awarded contracts to reactivate eleven idle jack-up rigs in
NOV’s Grant Prideco drill pipe business won several orders for its premium drill pipe in the
NOV‘s NOVOS™ process automation system continued to expand its presence in the key market of
NOV’s Managed Pressure Drilling (MPD) operation won a contract to deliver a dual drill string isolation tool (DSIT) package and Cyberbase™ upgrade for a major offshore drilling contractor’s ultra-deepwater drillship. The DSIT will enable the customer to quickly close the riser below the termination joint, allowing gas in the riser to be circulated out safely and efficiently. The super-major operator to which the drillship is contracted has approved the DSIT as a riser safety closing device for use with their enhanced controlled mud level system. The package is now under consideration to be the new operating standard for both the operator and the drilling contractor.
NOV was awarded an order to design and equip a special hybrid wind turbine and foundation installation vessel, which is a bespoke version of the GustoMSC™ NG-20000X. The NG-20000X is designed for use in harsh environments and water depths of up to 70 meters using a telescopic leg crane with a capacity of up to 2,500 tons. This unique vessel is the third award from this customer, who has come to view NOV as a key partner in their pursuit of opportunities in the growing offshore wind energy market.
NOV’s Tuboscope operations won several key project awards for its TK™-Liner systems based on its ability to provide cost-effective alternatives to corrosion-resistant alloys (CRAs) and provide a proven solution for internal and external corrosion mitigation. These qualities facilitated the award of three new contracts for NOV’s TK-Liner technology supporting geothermal operations in
NOV’s XL Systems wedge thread technology was chosen for use in a key geothermal project in
NOV received an order to provide its BondstrandTM fiberglass glass-reinforced epoxy (GRE) piping for two X-Class Wind Turbine Installation Vessels. The first X-Class vessel will be delivered in the third quarter of 2024 and has already been contracted by a renewable energy company to transport and install 100 14MW wind turbines at the
Second Quarter Earnings Conference Call
NOV will hold a conference call to discuss its second 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 |
|
Six Months Ended |
||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2022 |
|
2021 |
||||||||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Wellbore Technologies |
|
$ |
666 |
|
|
$ |
463 |
|
|
$ |
608 |
|
|
$ |
1,274 |
|
|
$ |
876 |
|
Completion & Production Solutions |
|
|
639 |
|
|
|
497 |
|
|
|
530 |
|
|
|
1,169 |
|
|
|
936 |
|
Rig Technologies |
|
|
462 |
|
|
|
487 |
|
|
|
441 |
|
|
|
903 |
|
|
|
918 |
|
Eliminations |
|
|
(40 |
) |
|
|
(30 |
) |
|
|
(31 |
) |
|
|
(71 |
) |
|
|
(64 |
) |
Total revenue |
|
|
1,727 |
|
|
|
1,417 |
|
|
|
1,548 |
|
|
|
3,275 |
|
|
|
2,666 |
|
Gross profit |
|
|
309 |
|
|
|
231 |
|
|
|
214 |
|
|
|
523 |
|
|
|
387 |
|
Gross profit % |
|
|
17.9 |
% |
|
|
16.3 |
% |
|
|
13.8 |
% |
|
|
16.0 |
% |
|
|
14.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general, and administrative |
|
|
241 |
|
|
|
219 |
|
|
|
235 |
|
|
|
476 |
|
|
|
463 |
|
Operating profit (loss) |
|
|
68 |
|
|
|
12 |
|
|
|
(21 |
) |
|
|
47 |
|
|
|
(76 |
) |
Interest Expense, net |
|
|
(14 |
) |
|
|
(17 |
) |
|
|
(18 |
) |
|
|
(32 |
) |
|
|
(35 |
) |
Equity income (loss) in unconsolidated affiliates |
|
|
14 |
|
|
|
— |
|
|
|
6 |
|
|
|
20 |
|
|
|
(4 |
) |
Other income (expense), net |
|
|
— |
|
|
|
(16 |
) |
|
|
(2 |
) |
|
|
(2 |
) |
|
|
(26 |
) |
Net income (loss) before income taxes |
|
|
68 |
|
|
|
(21 |
) |
|
|
(35 |
) |
|
|
33 |
|
|
|
(141 |
) |
Provision (benefit) for income taxes |
|
|
(2 |
) |
|
|
2 |
|
|
|
14 |
|
|
|
12 |
|
|
|
(4 |
) |
Net income (loss) |
|
|
70 |
|
|
|
(23 |
) |
|
|
(49 |
) |
|
|
21 |
|
|
|
(137 |
) |
Net income attributable to noncontrolling interests |
|
|
1 |
|
|
|
3 |
|
|
|
1 |
|
|
|
2 |
|
|
|
4 |
|
Net income (loss) attributable to Company |
|
$ |
69 |
|
|
$ |
(26 |
) |
|
$ |
(50 |
) |
|
$ |
19 |
|
|
$ |
(141 |
) |
Per share data: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic |
|
$ |
0.18 |
|
|
$ |
(0.07 |
) |
|
$ |
(0.13 |
) |
|
$ |
0.05 |
|
|
$ |
(0.37 |
) |
Diluted |
|
$ |
0.18 |
|
|
$ |
(0.07 |
) |
|
$ |
(0.13 |
) |
|
$ |
0.05 |
|
|
$ |
(0.37 |
) |
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic |
|
|
390 |
|
|
|
386 |
|
|
|
387 |
|
|
|
389 |
|
|
|
386 |
|
Diluted |
|
|
393 |
|
|
|
386 |
|
|
|
387 |
|
|
|
392 |
|
|
|
386 |
|
|
||||||||
CONSOLIDATED BALANCE SHEETS |
||||||||
(In millions) |
||||||||
|
||||||||
|
|
|
|
|
|
|
||
|
|
2022 |
|
|
2021 |
|
||
ASSETS |
|
(Unaudited) |
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
1,218 |
|
|
$ |
1,591 |
|
Receivables, net |
|
|
1,582 |
|
|
|
1,321 |
|
Inventories, net |
|
|
1,591 |
|
|
|
1,331 |
|
Contract assets |
|
|
476 |
|
|
|
461 |
|
Prepaid and other current assets |
|
|
226 |
|
|
|
198 |
|
Total current assets |
|
|
5,093 |
|
|
|
4,902 |
|
|
|
|
|
|
|
|
||
Property, plant and equipment, net |
|
|
1,761 |
|
|
|
1,823 |
|
Lease right-of-use assets |
|
|
521 |
|
|
|
537 |
|
|
|
|
2,014 |
|
|
|
2,030 |
|
Other assets |
|
|
311 |
|
|
|
258 |
|
Total assets |
|
$ |
9,700 |
|
|
$ |
9,550 |
|
|
|
|
|
|
|
|
||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
754 |
|
|
$ |
612 |
|
Accrued liabilities |
|
|
831 |
|
|
|
778 |
|
Contract liabilities |
|
|
455 |
|
|
|
392 |
|
Current portion of lease liabilities |
|
|
92 |
|
|
|
99 |
|
Current portion of long-term debt |
|
|
10 |
|
|
|
5 |
|
Accrued income taxes |
|
|
29 |
|
|
|
24 |
|
Total current liabilities |
|
|
2,171 |
|
|
|
1,910 |
|
|
|
|
|
|
|
|
||
Lease liabilities |
|
|
563 |
|
|
|
576 |
|
Long-term debt |
|
|
1,714 |
|
|
|
1,708 |
|
Other liabilities |
|
|
280 |
|
|
|
292 |
|
Total liabilities |
|
|
4,728 |
|
|
|
4,486 |
|
|
|
|
|
|
|
|
||
Total stockholders’ equity |
|
|
4,972 |
|
|
|
5,064 |
|
Total liabilities and stockholders’ equity |
|
$ |
9,700 |
|
|
$ |
9,550 |
|
|
||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
||||||||||||
(In millions) |
||||||||||||
|
|
Three Months |
|
Six Months Ended |
||||||||
|
|
|
|
|
||||||||
|
|
2022 |
|
2022 |
|
2021 |
||||||
Cash flows from operating activities: |
|
|
|
|
||||||||
Net income (loss) |
|
$ |
70 |
|
|
$ |
21 |
|
|
$ |
(137 |
) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
||||||
Depreciation and amortization |
|
|
75 |
|
|
|
149 |
|
|
|
156 |
|
Working capital and other operating items, net |
|
|
(269 |
) |
|
|
(397 |
) |
|
|
131 |
|
Net cash provided (used) in operating activities |
|
|
(124 |
) |
|
|
(227 |
) |
|
|
150 |
|
|
|
|
|
|
|
|
||||||
Cash flows from investing activities: |
|
|
|
|
|
|
||||||
Purchases of property, plant and equipment |
|
|
(43 |
) |
|
|
(89 |
) |
|
|
(98 |
) |
Other |
|
|
3 |
|
|
|
— |
|
|
|
9 |
|
Net cash used in investing activities |
|
|
(40 |
) |
|
|
(89 |
) |
|
|
(89 |
) |
|
|
|
|
|
|
|
||||||
Cash flows from financing activities: |
|
|
|
|
|
|
||||||
Borrowings against lines of credit and other debt |
|
|
9 |
|
|
|
10 |
|
|
|
34 |
|
Payments against lines of credit and other debt |
|
|
— |
|
|
|
— |
|
|
|
(183 |
) |
Cash dividends paid |
|
|
(19 |
) |
|
|
(39 |
) |
|
|
— |
|
Other |
|
|
(6 |
) |
|
|
(23 |
) |
|
|
(33 |
) |
Net cash used in financing activities |
|
|
(16 |
) |
|
|
(52 |
) |
|
|
(182 |
) |
Effect of exchange rates on cash |
|
|
(8 |
) |
|
|
(5 |
) |
|
|
1 |
|
Decrease in cash and cash equivalents |
|
|
(188 |
) |
|
|
(373 |
) |
|
|
(120 |
) |
Cash and cash equivalents, beginning of period |
|
|
1,406 |
|
|
|
1,591 |
|
|
|
1,692 |
|
Cash and cash equivalents, end of period |
|
$ |
1,218 |
|
|
$ |
1,218 |
|
|
$ |
1,572 |
|
|
||||||||||||||||||||
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 |
|
Six Months Ended |
||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2022 |
|
2021 |
||||||||||
Operating profit (loss): |
|
|
|
|
|
|
|
|
|
|
||||||||||
Wellbore Technologies |
|
$ |
81 |
|
|
$ |
6 |
|
|
$ |
39 |
|
|
$ |
120 |
|
|
$ |
(8 |
) |
Completion & Production Solutions |
|
|
20 |
|
|
|
(6 |
) |
|
|
(22 |
) |
|
|
(2 |
) |
|
|
(23 |
) |
Rig Technologies |
|
|
31 |
|
|
|
49 |
|
|
|
11 |
|
|
|
42 |
|
|
|
41 |
|
Eliminations and corporate costs |
|
|
(64 |
) |
|
|
(37 |
) |
|
|
(49 |
) |
|
|
(113 |
) |
|
|
(86 |
) |
Total operating profit (loss) |
|
$ |
68 |
|
|
$ |
12 |
|
|
$ |
(21 |
) |
|
$ |
47 |
|
|
$ |
(76 |
) |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other items, net: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Wellbore Technologies |
|
$ |
7 |
|
|
$ |
18 |
|
|
$ |
23 |
|
|
$ |
30 |
|
|
$ |
22 |
|
Completion & Production Solutions |
|
|
1 |
|
|
|
(6 |
) |
|
|
16 |
|
|
|
17 |
|
|
|
(8 |
) |
Rig Technologies |
|
|
(8 |
) |
|
|
8 |
|
|
|
6 |
|
|
|
(2 |
) |
|
|
10 |
|
Corporate |
|
|
14 |
|
|
|
— |
|
|
|
— |
|
|
|
14 |
|
|
|
— |
|
Total other items |
|
$ |
14 |
|
|
$ |
20 |
|
|
$ |
45 |
|
|
$ |
59 |
|
|
$ |
24 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(Gain)/Loss on Sales of Fixed Assets: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Wellbore Technologies |
|
$ |
(3 |
) |
|
$ |
— |
|
|
$ |
2 |
|
|
$ |
(1 |
) |
|
$ |
2 |
|
Completion & Production Solutions |
|
|
(4 |
) |
|
|
— |
|
|
|
— |
|
|
|
(4 |
) |
|
|
— |
|
Rig Technologies |
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
1 |
|
|
|
1 |
|
Eliminations and corporate costs |
|
|
— |
|
|
|
(5 |
) |
|
|
2 |
|
|
|
2 |
|
|
|
(3 |
) |
Total (gain)/loss on sales of fixed assets |
|
$ |
(7 |
) |
|
$ |
(5 |
) |
|
$ |
5 |
|
|
$ |
(2 |
) |
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Depreciation & amortization: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Wellbore Technologies |
|
$ |
37 |
|
|
$ |
39 |
|
|
$ |
37 |
|
|
$ |
74 |
|
|
$ |
81 |
|
Completion & Production Solutions |
|
|
15 |
|
|
|
16 |
|
|
|
16 |
|
|
|
31 |
|
|
|
31 |
|
Rig Technologies |
|
|
18 |
|
|
|
18 |
|
|
|
18 |
|
|
|
36 |
|
|
|
36 |
|
Corporate |
|
|
5 |
|
|
|
4 |
|
|
|
3 |
|
|
|
8 |
|
|
|
8 |
|
Total depreciation & amortization |
|
$ |
75 |
|
|
$ |
77 |
|
|
$ |
74 |
|
|
$ |
149 |
|
|
$ |
156 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
||||||||||
Wellbore Technologies |
|
$ |
122 |
|
|
$ |
63 |
|
|
$ |
101 |
|
|
$ |
223 |
|
|
$ |
97 |
|
Completion & Production Solutions |
|
|
32 |
|
|
|
4 |
|
|
|
10 |
|
|
|
42 |
|
|
|
— |
|
Rig Technologies |
|
|
41 |
|
|
|
75 |
|
|
|
36 |
|
|
|
77 |
|
|
|
88 |
|
Eliminations and corporate costs |
|
|
(45 |
) |
|
|
(38 |
) |
|
|
(44 |
) |
|
|
(89 |
) |
|
|
(81 |
) |
Total Adjusted EBITDA |
|
$ |
150 |
|
|
$ |
104 |
|
|
$ |
103 |
|
|
$ |
253 |
|
|
$ |
104 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reconciliation of Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
||||||||||
GAAP net income (loss) attributable to Company |
|
$ |
69 |
|
|
$ |
(26 |
) |
|
$ |
(50 |
) |
|
$ |
19 |
|
|
$ |
(141 |
) |
Noncontrolling interests |
|
|
1 |
|
|
|
3 |
|
|
|
1 |
|
|
|
2 |
|
|
|
4 |
|
Provision (benefit) for income taxes |
|
|
(2 |
) |
|
|
2 |
|
|
|
14 |
|
|
|
12 |
|
|
|
(4 |
) |
Interest expense |
|
|
19 |
|
|
|
19 |
|
|
|
19 |
|
|
|
38 |
|
|
|
39 |
|
Interest income |
|
|
(5 |
) |
|
|
(2 |
) |
|
|
(1 |
) |
|
|
(6 |
) |
|
|
(4 |
) |
Equity (income) loss in unconsolidated affiliate |
|
|
(14 |
) |
|
|
— |
|
|
|
(6 |
) |
|
|
(20 |
) |
|
|
4 |
|
Other (income) expense, net |
|
|
— |
|
|
|
16 |
|
|
|
2 |
|
|
|
2 |
|
|
|
26 |
|
(Gain)/Loss on Sales of Fixed Assets |
|
|
(7 |
) |
|
|
(5 |
) |
|
|
5 |
|
|
|
(2 |
) |
|
|
— |
|
Depreciation and amortization |
|
|
75 |
|
|
|
77 |
|
|
|
74 |
|
|
|
149 |
|
|
|
156 |
|
Other items, net |
|
|
14 |
|
|
|
20 |
|
|
|
45 |
|
|
|
59 |
|
|
|
24 |
|
Total Adjusted EBITDA |
|
$ |
150 |
|
|
$ |
104 |
|
|
$ |
103 |
|
|
$ |
253 |
|
|
$ |
104 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20220727005986/en/
Vice President, Corporate Development and Investor Relations
(713) 815-3535
Blake.McCarthy@nov.com
Source: