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Jun 30, 2021
ChampionX Q2 2021 Earnings Report
ChampionX's second quarter results were announced, demonstrating sequential growth and strong performance across its portfolio.
Key Takeaways
ChampionX reported a solid second quarter in 2021, marked by a 9% sequential increase in revenue to $749.2 million and adjusted EBITDA of $105.4 million. The company highlighted strong topline growth across its portfolio, driven by robust demand in both North American and international markets. ChampionX also strengthened its balance sheet by repaying $62 million of debt during the quarter and generated free cash flow of $40.8 million.
Revenue increased 9% sequentially to $749.2 million, driven by strong demand growth in North American and international markets.
Adjusted EBITDA increased 12% sequentially to $105.4 million, showcasing effective navigation of raw material and logistics inflation.
Free cash flow was $40.8 million, and $62 million of debt was repaid, strengthening the balance sheet.
The company is on track to deliver full targeted cost synergies of $125 million within 24 months of the merger closing, exiting Q2 at a $103 million run rate.
Revenue by Segment
Forward Guidance
ChampionX expects topline momentum to continue into the third quarter, driven by demand growth in international operations and North American businesses. The company anticipates healthy margin improvement in the second half of the year due to volume improvements, price increase realization, and cost synergy delivery offsetting raw material cost inflation. ChampionX is confident in exiting the year with a higher margin rate than the 2020 exit rate.
Positive Outlook
- Revenue is expected to be between $765 million and $805 million in the third quarter, with contributions from all businesses.
- Adjusted EBITDA is projected to be between $119 million and $125 million in the third quarter.
- Continued topline momentum is anticipated, driven by demand growth in international operations and North American businesses.
- Healthy margin improvement is expected in the second half of the year.
- Anticipated benefits from volume improvements, price increase realization, and cost synergy delivery.
Challenges Ahead
- Raw material cost inflation may offset some margin improvements.
- The company is exposed to changes in economic, competitive, strategic, technological, tax, regulatory or other factors that affect the operations of ChampionX’s businesses.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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