NOV Reports Third Quarter 2021 Results
“Rising oil and gas prices continue to drive higher demand for NOV, as our orders again exceeded our shipments in the third quarter,” stated
“We continue investing in technologies to both improve our offerings to oil and gas operators and grow our portfolio of renewable energy technologies. We were particularly pleased to again see offshore wind power related projects drive more than half of our Rig Technology segment’s orders in the third quarter, and we made steady progress in other low-carbon solutions under development. As global economies emerge from pandemic lockdowns, supply chains normalize, and energy demand grows, NOV is well positioned to generate much stronger financial returns from the coming multi-year up-cycle in both the conventional and renewable energy markets.”
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 third quarter, the Company recognized
As of
Significant Achievements
NOV received an award from Cadeler A/S to design and equip two GustoMSC™ NG-20000X self-propelled wind turbine installation jackup vessels. Each vessel will have 5,600 m2 of deck space, an industry-leading carrying capacity of more than 17,600 tons and the ability to transport and install multiple sets of 15- to 20-plus MW turbines. The jacking systems will incorporate NOV’s proprietary advanced regenerative power system technology that enables significant fuel savings and reduced emissions. In parallel, NOV will upgrade Cadeler’s existing O-Class vessels with new heavy-lift cranes to handle the next generation of wind turbines.
NOV secured a front-end engineering design (FEED) study to decarbonize a floating production storage and offloading (FPSO) vessel operating offshore
NOV secured an order for a 20,000-psi (20K) blowout preventer (BOP) stack for a new development project in the
NOV gained additional recognition for its leading ESG practices when the
NOV’s technologies continued supporting efforts to decarbonize the energy industry and new industry verticals that are aligned with addressing key societal needs. During the quarter, NOV provided a major pharmaceutical company with turbine agitators and mixers that will be used to manufacture a new pill to treat COVID-19. The operation also provided an integrated package of pumps, mixers and screens used to process and treat cooling water at a nuclear power facility in the
NOV’s condition-based monitoring (CBM) systems continue to gain broader market adoption with a large drilling contractor entrusting the maintenance of all its subsea assets to the business. Our CBM systems drive savings and efficiencies for our customers by optimizing maintenance, maximizing equipment availability, and reducing total cost of ownership. The tangible value of NOV’s CBM program was demonstrated during the quarter when an impending bearing failure signature was detected on a customer’s draw-works motor, a potential cliff event that would have resulted in significant downtime and, potentially, critical safety issues. The early detection allowed for the part to be replaced with minimal operation impact, resulting in improved economics for both the operator and our drilling contractor customer.
NOV was awarded a large gas dehydration system for the Berri field in
Combining multiple leading-edge NOV drilling technologies in bottom hole assemblies (BHAs) resulted in meaningful operational improvements for customers around the globe. In
NOV’s SelectShift™ downhole adjustable motor with Impulse technology enabled a major operator in the
NOV was awarded a three-year Wired Drill Pipe Optimization project with a major operator in the
NOV commenced operations of a quayside thermal desorption treatment facility in
Third Quarter Earnings Conference Call
NOV will hold a conference call to discuss its third 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 |
|
Nine Months Ended |
||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||
|
|
2021 |
|
2020 |
|
2021 |
|
2021 |
|
2020 |
||||||||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Wellbore Technologies |
|
$ |
507 |
|
|
$ |
361 |
|
|
$ |
463 |
|
|
$ |
1,383 |
|
|
$ |
1,494 |
|
Completion & Production Solutions |
|
|
478 |
|
|
|
601 |
|
|
|
497 |
|
|
|
1,414 |
|
|
|
1,887 |
|
Rig Technologies |
|
|
390 |
|
|
|
449 |
|
|
|
487 |
|
|
|
1,308 |
|
|
|
1,482 |
|
Eliminations |
|
|
(34 |
) |
|
|
(27 |
) |
|
|
(30 |
) |
|
|
(98 |
) |
|
|
(100 |
) |
Total revenue |
|
|
1,341 |
|
|
|
1,384 |
|
|
|
1,417 |
|
|
|
4,007 |
|
|
|
4,763 |
|
Gross profit |
|
|
185 |
|
|
|
139 |
|
|
|
231 |
|
|
|
572 |
|
|
|
500 |
|
Gross profit % |
|
|
13.8 |
% |
|
|
10.0 |
% |
|
|
16.3 |
% |
|
|
14.3 |
% |
|
|
10.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Selling, general, and administrative |
|
|
228 |
|
|
|
213 |
|
|
|
219 |
|
|
|
691 |
|
|
|
733 |
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,378 |
|
Long-lived asset impairment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
513 |
|
Operating profit (loss) |
|
|
(43 |
) |
|
|
(74 |
) |
|
|
12 |
|
|
|
(119 |
) |
|
|
(2,124 |
) |
Interest and financial costs |
|
|
(19 |
) |
|
|
(21 |
) |
|
|
(19 |
) |
|
|
(58 |
) |
|
|
(65 |
) |
Interest income |
|
|
3 |
|
|
|
— |
|
|
|
2 |
|
|
|
7 |
|
|
|
5 |
|
Equity loss in unconsolidated affiliates |
|
|
(2 |
) |
|
|
(11 |
) |
|
|
— |
|
|
|
(6 |
) |
|
|
(250 |
) |
Other income (expense), net |
|
|
1 |
|
|
|
(8 |
) |
|
|
(16 |
) |
|
|
(25 |
) |
|
|
(19 |
) |
Loss before income taxes |
|
|
(60 |
) |
|
|
(114 |
) |
|
|
(21 |
) |
|
|
(201 |
) |
|
|
(2,453 |
) |
Provision (benefit) for income taxes |
|
|
5 |
|
|
|
(61 |
) |
|
|
2 |
|
|
|
1 |
|
|
|
(264 |
) |
Net loss |
|
|
(65 |
) |
|
|
(53 |
) |
|
|
(23 |
) |
|
|
(202 |
) |
|
|
(2,189 |
) |
Net loss attributable to noncontrolling interests |
|
|
4 |
|
|
|
2 |
|
|
|
3 |
|
|
|
8 |
|
|
|
6 |
|
Net loss attributable to Company |
|
$ |
(69 |
) |
|
$ |
(55 |
) |
|
$ |
(26 |
) |
|
$ |
(210 |
) |
|
$ |
(2,195 |
) |
Per share data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic |
|
$ |
(0.18 |
) |
|
$ |
(0.14 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.54 |
) |
|
$ |
(5.72 |
) |
Diluted |
|
$ |
(0.18 |
) |
|
$ |
(0.14 |
) |
|
$ |
(0.07 |
) |
|
$ |
(0.54 |
) |
|
$ |
(5.72 |
) |
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic |
|
|
387 |
|
|
|
385 |
|
|
|
386 |
|
|
|
386 |
|
|
|
384 |
|
Diluted |
|
|
387 |
|
|
|
385 |
|
|
|
386 |
|
|
|
386 |
|
|
|
384 |
|
CONSOLIDATED BALANCE SHEETS (Unaudited) (In millions) |
||||||
|
|
|
|
|
||
|
|
2021 |
|
2020 |
||
ASSETS |
|
(Unaudited) |
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
1,668 |
|
$ |
1,692 |
Receivables, net |
|
|
1,280 |
|
|
1,274 |
Inventories, net |
|
|
1,325 |
|
|
1,408 |
Contract assets |
|
|
466 |
|
|
611 |
Other current assets |
|
|
200 |
|
|
224 |
Total current assets |
|
|
4,939 |
|
|
5,209 |
|
|
|
|
|
|
|
Property, plant and equipment, net |
|
|
1,825 |
|
|
1,927 |
Lease right-of-use assets |
|
|
553 |
|
|
566 |
|
|
|
1,992 |
|
|
2,020 |
Other assets |
|
|
258 |
|
|
207 |
Total assets |
|
$ |
9,567 |
|
$ |
9,929 |
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
|
$ |
519 |
|
$ |
489 |
Accrued liabilities |
|
|
785 |
|
|
863 |
Contract liabilities |
|
|
425 |
|
|
354 |
Current portion of lease liabilities |
|
|
102 |
|
|
110 |
Accrued income taxes |
|
|
22 |
|
|
51 |
Total current liabilities |
|
|
1,853 |
|
|
1,867 |
|
|
|
|
|
|
|
Lease liabilities |
|
|
593 |
|
|
612 |
Long-term debt |
|
|
1,704 |
|
|
1,834 |
Other liabilities |
|
|
339 |
|
|
337 |
Total liabilities |
|
|
4,489 |
|
|
4,650 |
|
|
|
|
|
|
|
Total stockholders’ equity |
|
|
5,078 |
|
|
5,279 |
Total liabilities and stockholders’ equity |
|
$ |
9,567 |
|
$ |
9,929 |
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In millions) |
||||||||
|
|
Nine Months Ended |
||||||
|
|
|
||||||
|
|
2021 |
|
2020 |
||||
Cash flows from operating activities: |
|
|
||||||
Net loss |
|
$ |
(202 |
) |
|
$ |
(2,189 |
) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
231 |
|
|
|
270 |
|
|
|
|
— |
|
|
|
1,378 |
|
Long-lived asset impairment |
|
|
— |
|
|
|
513 |
|
Working capital and other operating items, net |
|
|
226 |
|
|
|
768 |
|
Net cash provided by operating activities |
|
|
255 |
|
|
|
740 |
|
|
|
|
|
|
|
|
||
Cash flows from investing activities: |
|
|
|
|
|
|
||
Purchases of property, plant and equipment |
|
|
(137 |
) |
|
|
(173 |
) |
Other |
|
|
35 |
|
|
|
13 |
|
Net cash used in investing activities |
|
|
(102 |
) |
|
|
(160 |
) |
|
|
|
|
|
|
|
||
Cash flows from financing activities: |
|
|
|
|
|
|
||
Borrowings against lines of credit and other debt |
|
|
51 |
|
|
|
36 |
|
Payments against lines of credit and other debt |
|
|
(183 |
) |
|
|
(217 |
) |
Cash dividends paid |
|
|
— |
|
|
|
(19 |
) |
Other |
|
|
(40 |
) |
|
|
(56 |
) |
Net cash used in financing activities |
|
|
(172 |
) |
|
|
(256 |
) |
Effect of exchange rates on cash |
|
|
(5 |
) |
|
|
(10 |
) |
Increase (decrease) in cash and cash equivalents |
|
|
(24 |
) |
|
|
314 |
|
Cash and cash equivalents, beginning of period |
|
|
1,692 |
|
|
|
1,171 |
|
Cash and cash equivalents, end of period |
|
$ |
1,668 |
|
|
$ |
1,485 |
|
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, restructure, severance, and facility closure costs and inventory charges and credits, and a post-warranty product modification. |
||||||||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||
|
|
2021 |
|
2020 |
|
2021 |
|
2021 |
|
2020 |
||||||||||
Operating profit (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Wellbore Technologies |
|
$ |
32 |
|
|
$ |
(50 |
) |
|
$ |
6 |
|
|
$ |
24 |
|
|
$ |
(780 |
) |
Completion & Production Solutions |
|
|
(26 |
) |
|
|
25 |
|
|
|
(6 |
) |
|
|
(49 |
) |
|
|
(946 |
) |
Rig Technologies |
|
|
1 |
|
|
|
(3 |
) |
|
|
49 |
|
|
|
42 |
|
|
|
(230 |
) |
Eliminations and corporate costs |
|
|
(50 |
) |
|
|
(46 |
) |
|
|
(37 |
) |
|
|
(136 |
) |
|
|
(168 |
) |
Total operating loss |
|
$ |
(43 |
) |
|
$ |
(74 |
) |
|
$ |
12 |
|
|
$ |
(119 |
) |
|
$ |
(2,124 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Other items, net: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Wellbore Technologies |
|
$ |
7 |
|
|
$ |
26 |
|
|
$ |
18 |
|
|
$ |
31 |
|
|
$ |
803 |
|
Completion & Production Solutions |
|
|
6 |
|
|
|
23 |
|
|
|
(6 |
) |
|
|
(2 |
) |
|
|
1,089 |
|
Rig Technologies |
|
|
6 |
|
|
|
12 |
|
|
|
8 |
|
|
|
17 |
|
|
|
270 |
|
Corporate |
|
|
5 |
|
|
|
1 |
|
|
|
(5 |
) |
|
|
2 |
|
|
|
25 |
|
Total other items |
|
$ |
24 |
|
|
$ |
62 |
|
|
$ |
15 |
|
|
$ |
48 |
|
|
$ |
2,187 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Depreciation & amortization: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Wellbore Technologies |
|
$ |
38 |
|
|
$ |
45 |
|
|
$ |
39 |
|
|
$ |
119 |
|
|
$ |
143 |
|
Completion & Production Solutions |
|
|
15 |
|
|
|
15 |
|
|
|
16 |
|
|
|
46 |
|
|
|
59 |
|
Rig Technologies |
|
|
18 |
|
|
|
19 |
|
|
|
18 |
|
|
|
54 |
|
|
|
58 |
|
Corporate |
|
|
4 |
|
|
|
4 |
|
|
|
4 |
|
|
|
12 |
|
|
|
10 |
|
Total depreciation & amortization |
|
$ |
75 |
|
|
$ |
83 |
|
|
$ |
77 |
|
|
$ |
231 |
|
|
$ |
270 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Wellbore Technologies |
|
$ |
77 |
|
|
$ |
21 |
|
|
$ |
63 |
|
|
$ |
174 |
|
|
$ |
166 |
|
Completion & Production Solutions |
|
|
(5 |
) |
|
|
63 |
|
|
|
4 |
|
|
|
(5 |
) |
|
|
202 |
|
Rig Technologies |
|
|
25 |
|
|
|
28 |
|
|
|
75 |
|
|
|
113 |
|
|
|
98 |
|
Eliminations and corporate costs |
|
|
(41 |
) |
|
|
(41 |
) |
|
|
(38 |
) |
|
|
(122 |
) |
|
|
(133 |
) |
Total Adjusted EBITDA |
|
$ |
56 |
|
|
$ |
71 |
|
|
$ |
104 |
|
|
$ |
160 |
|
|
$ |
333 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Reconciliation of Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
GAAP net loss attributable to Company |
|
$ |
(69 |
) |
|
$ |
(55 |
) |
|
$ |
(26 |
) |
|
$ |
(210 |
) |
|
$ |
(2,195 |
) |
Noncontrolling interests |
|
|
4 |
|
|
|
2 |
|
|
|
3 |
|
|
|
8 |
|
|
|
6 |
|
Benefit for income taxes |
|
|
5 |
|
|
|
(61 |
) |
|
|
2 |
|
|
|
1 |
|
|
|
(264 |
) |
Interest expense |
|
|
19 |
|
|
|
21 |
|
|
|
19 |
|
|
|
58 |
|
|
|
65 |
|
Interest income |
|
|
(3 |
) |
|
|
— |
|
|
|
(2 |
) |
|
|
(7 |
) |
|
|
(5 |
) |
Equity loss in unconsolidated affiliate |
|
|
2 |
|
|
|
11 |
|
|
|
— |
|
|
|
6 |
|
|
|
250 |
|
Other (income) expense, net |
|
|
(1 |
) |
|
|
8 |
|
|
|
16 |
|
|
|
25 |
|
|
|
19 |
|
Depreciation and amortization |
|
|
75 |
|
|
|
83 |
|
|
|
77 |
|
|
|
231 |
|
|
|
270 |
|
Other items, net |
|
|
24 |
|
|
|
62 |
|
|
|
15 |
|
|
|
48 |
|
|
|
2,187 |
|
Total Adjusted EBITDA |
|
$ |
56 |
|
|
$ |
71 |
|
|
$ |
104 |
|
|
$ |
160 |
|
|
$ |
333 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20211026006292/en/
Vice President, Corporate Development and Investor Relations
(713) 815-3535
Blake.McCarthy@nov.com
Source: