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Jun 30, 2020
ChampionX Q2 2020 Earnings Report
ChampionX's second quarter was marked by revenue of $298.9 million and a net loss attributable to ChampionX of $109.6 million.
Key Takeaways
ChampionX Corporation reported second-quarter results, which included revenue of $298.9 million and a net loss attributable to ChampionX of $109.6 million. Adjusted EBITDA was $34.5 million. The company highlighted the integration of legacy Apergy and legacy ChampionX is on track, expecting annualized run-rate synergies towards the high-end of the previously announced $25 to $35 million exiting 2020.
Revenue of $298.9 million in Q2-20
Net loss attributable to ChampionX of $109.6 million in Q2-20
Adjusted EBITDA of $34.5 million in Q2-20
Cash from operating activities of $48.8 million and free cash flow of $37.0 million, or 12% of revenue in Q2-20
ChampionX
ChampionX
ChampionX Revenue by Segment
Revenue by Segment
Production Chemical Tech Revenue
CapyFin.comProduction & Automation Tech Revenue
CapyFin.comDrilling Technologies Revenue
CapyFin.comReservoir Chemical Tech Revenue
CapyFin.com Forward Guidance
ChampionX anticipates a modest sequential increase in revenue and adjusted EBITDA, driven by production-focused segments. Drilling Technologies revenue is expected to decrease sequentially.
Positive Outlook
- Expect to see a modest sequential increase in revenue due to operators bringing production back on-line within production-focused segments.
- Expect a modest sequential increase in revenue and adjusted EBITDA on a consolidated basis.
- Integration is on-track and implementing plans to capture the $75 million in cost synergies within 24 months of closing, as well as drive additional revenue growth opportunities.
- Expect to be at the higher end of the previously announced $25 to $35 million of run rate cost synergies exiting 2020.
- Continue to maintain a strong balance sheet and generate positive free cash flow.
Challenges Ahead
- Visibility remains challenging due to the uncertainty caused by the COVID pandemic
- Drilling Technologies revenue is expected to decrease sequentially, driven by continued low drilling activity in the third quarter.
- Seasonal impacts of holidays and E&P capital budget exhaustion are unclear at this time for the fourth quarter.
- Rapid reduction in worldwide E&P capital spending.
- Expect that sales of digital hardware equipment will continue to be impacted by reduced E&P capital spending.
Revenue & Expenses
Visualization of income flow from segment revenue to net income