UNITED STATES | ||||
SECURITIES AND EXCHANGE COMMISSION | ||||
Washington, D.C. 20549 | ||||
FORM 10-Q | ||||
(Mark One) | ||||
Q | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||
For the quarterly period ended March 31, 2018 | ||||
OR | ||||
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||
For the transition period from ________________ to ______________ | ||||
Commission File Number: 001-14273 | ||||
CORE LABORATORIES N.V. | ||||
(Exact name of registrant as specified in its charter) | ||||
The Netherlands | Not Applicable | |||
(State or other jurisdiction of | (I.R.S. Employer Identification No.) | |||
incorporation or organization) | ||||
Strawinskylaan 913 | ||||
Tower A, Level 9 | ||||
1077 XX Amsterdam | ||||
The Netherlands | Not Applicable | |||
(Address of principal executive offices) | (Zip Code) | |||
(31-20) 420-3191 | ||||
(Registrant's telephone number, including area code) | ||||
None | ||||
(Former name, former address and former fiscal year, if changed since last report) |
Large accelerated filer Q | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o | Emerging growth company o |
(Do not check if a smaller reporting company) |
CORE LABORATORIES N.V. | ||
FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2018 | ||
INDEX | ||
PART I - FINANCIAL INFORMATION | ||
Page | ||
PART II - OTHER INFORMATION | ||
March 31, 2018 | December 31, 2017 | ||||||
ASSETS | (Unaudited) | ||||||
CURRENT ASSETS: | |||||||
Cash and cash equivalents | $ | 13,244 | $ | 14,400 | |||
Accounts receivable, net of allowance for doubtful accounts of $2,644 and $2,590 at 2018 and 2017, respectively | 137,661 | 133,097 | |||||
Inventories | 36,438 | 33,317 | |||||
Prepaid expenses | 14,150 | 12,592 | |||||
Income taxes receivable | 8,783 | 7,508 | |||||
Other current assets | 9,909 | 6,513 | |||||
TOTAL CURRENT ASSETS | 220,185 | 207,427 | |||||
PROPERTY, PLANT AND EQUIPMENT, net | 122,333 | 123,098 | |||||
INTANGIBLES, net | 9,221 | 9,396 | |||||
GOODWILL | 179,044 | 179,044 | |||||
DEFERRED TAX ASSETS | 11,563 | 10,719 | |||||
OTHER ASSETS | 54,794 | 55,128 | |||||
TOTAL ASSETS | $ | 597,140 | $ | 584,812 | |||
LIABILITIES AND EQUITY | |||||||
CURRENT LIABILITIES: | |||||||
Accounts payable | $ | 45,541 | $ | 41,697 | |||
Accrued payroll and related costs | 27,509 | 28,887 | |||||
Taxes other than payroll and income | 6,383 | 7,313 | |||||
Unearned revenue | 11,783 | 12,627 | |||||
Income taxes payable | 3,832 | 825 | |||||
Other current liabilities | 9,279 | 9,227 | |||||
TOTAL CURRENT LIABILITIES | 104,327 | 100,576 | |||||
LONG-TERM DEBT, net | 235,114 | 226,989 | |||||
CONTRACT LIABILITIES | 5,474 | 4,442 | |||||
DEFERRED COMPENSATION | 52,755 | 52,786 | |||||
DEFERRED TAX LIABILITIES | 5,897 | 5,323 | |||||
OTHER LONG-TERM LIABILITIES | 41,997 | 45,964 | |||||
COMMITMENTS AND CONTINGENCIES (Note 8) | |||||||
EQUITY: | |||||||
Preference shares, EUR 0.02 par value; 6,000,000 shares authorized, none issued or outstanding | — | — | |||||
Common shares, EUR 0.02 par value; 200,000,000 shares authorized, 44,796,252 issued and 44,189,593 outstanding at 2018 and 44,796,252 issued and 44,184,205 outstanding at 2017 | 1,148 | 1,148 | |||||
Additional paid-in capital | 55,670 | 54,463 | |||||
Retained earnings | 173,060 | 173,855 | |||||
Accumulated other comprehensive income (loss) | (7,745 | ) | (8,353 | ) | |||
Treasury shares (at cost), 606,659 at 2018 and 612,047 at 2017 | (74,495 | ) | (76,269 | ) | |||
Total Core Laboratories N.V. shareholders' equity | 147,638 | 144,844 | |||||
Non-controlling interest | 3,938 | 3,888 | |||||
TOTAL EQUITY | 151,576 | 148,732 | |||||
TOTAL LIABILITIES AND EQUITY | $ | 597,140 | $ | 584,812 |
Three Months Ended | |||||||
March 31, | |||||||
2018 | 2017 | ||||||
(Unaudited) | |||||||
REVENUE: | |||||||
Services | $ | 119,786 | $ | 120,602 | |||
Product sales | 50,232 | 36,007 | |||||
Total revenue | 170,018 | 156,609 | |||||
OPERATING EXPENSES: | |||||||
Cost of services, exclusive of depreciation expense shown below | 83,288 | 83,050 | |||||
Cost of product sales, exclusive of depreciation expense shown below | 36,030 | 29,971 | |||||
General and administrative expense, exclusive of depreciation expense shown below | 12,709 | 12,756 | |||||
Depreciation | 5,582 | 6,079 | |||||
Amortization | 236 | 225 | |||||
Other (income) expense, net | (143 | ) | 989 | ||||
OPERATING INCOME | 32,316 | 23,539 | |||||
Interest expense | 3,120 | 2,618 | |||||
Income from continuing operations before income tax expense | 29,196 | 20,921 | |||||
Income tax expense | 5,273 | 2,929 | |||||
Income from continuing operations | 23,923 | 17,992 | |||||
Loss from discontinued operations, net of income taxes | (346 | ) | (310 | ) | |||
Net Income | 23,577 | 17,682 | |||||
Net income attributable to non-controlling interest | 50 | 24 | |||||
Net income attributable to Core Laboratories N.V. | $ | 23,527 | $ | 17,658 | |||
EARNINGS (LOSS) PER SHARE INFORMATION: | |||||||
Basic earnings per share from continuing operations | $ | 0.54 | $ | 0.41 | |||
Basic loss per share from discontinued operations | $ | (0.01 | ) | $ | (0.01 | ) | |
Basic earnings per share attributable to Core Laboratories N.V. | $ | 0.53 | $ | 0.40 | |||
Diluted earnings per share from continuing operations | $ | 0.54 | $ | 0.41 | |||
Diluted loss per share from discontinued operations | $ | (0.01 | ) | $ | (0.01 | ) | |
Diluted earnings per share attributable to Core Laboratories N.V. | $ | 0.53 | $ | 0.40 | |||
Cash dividends per share | $ | 0.55 | $ | 0.55 | |||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | |||||||
Basic | 44,179 | 44,159 | |||||
Diluted | 44,463 | 44,347 |
Three Months Ended | |||||||
March 31, | |||||||
2018 | 2017 | ||||||
(Unaudited) | |||||||
Net income | $ | 23,577 | $ | 17,682 | |||
Other comprehensive income: | |||||||
Derivatives | |||||||
Gain (loss) in fair value of interest rate swaps | 646 | 81 | |||||
Interest rate swap amounts reclassified to interest expense | 64 | 167 | |||||
Income taxes on derivatives | (150 | ) | (87 | ) | |||
Total derivatives | 560 | 161 | |||||
Pension and other postretirement benefit plans | |||||||
Prior service cost | |||||||
Amortization to net income of prior service cost | (21 | ) | (19 | ) | |||
Amortization to net income of actuarial loss | 84 | 111 | |||||
Income taxes on pension and other postretirement benefit plans | (15 | ) | (24 | ) | |||
Total pension and other postretirement benefit plans | 48 | 68 | |||||
Total other comprehensive income | 608 | 229 | |||||
Comprehensive income | 24,185 | 17,911 | |||||
Comprehensive income attributable to non-controlling interest | 50 | 24 | |||||
Comprehensive income attributable to Core Laboratories N.V. | $ | 24,135 | $ | 17,887 |
Three Months Ended | |||||||
March 31, | |||||||
2018 | 2017 | ||||||
(Unaudited) | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Income from continuing operations | $ | 23,923 | $ | 17,992 | |||
Loss from discontinued operations, net of tax | (346 | ) | (310 | ) | |||
Net income | 23,577 | 17,682 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Stock-based compensation | 6,291 | 5,723 | |||||
Depreciation and amortization | 5,818 | 6,304 | |||||
Changes to value of life insurance policies | 29 | 946 | |||||
Deferred income taxes | (256 | ) | 6,603 | ||||
Other non-cash items | 98 | 571 | |||||
Changes in assets and liabilities: | |||||||
Accounts receivable | (5,913 | ) | (7,525 | ) | |||
Inventories | (3,686 | ) | (3,898 | ) | |||
Prepaid expenses and other current assets | (901 | ) | (1,647 | ) | |||
Other assets | 742 | (1,001 | ) | ||||
Accounts payable | 2,634 | 4,576 | |||||
Accrued expenses | (2,281 | ) | (3,590 | ) | |||
Unearned revenues | 188 | 3,609 | |||||
Other long-term liabilities | (3,247 | ) | 1,408 | ||||
Net cash provided by operating activities | 23,093 | 29,761 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Capital expenditures | (4,443 | ) | (6,449 | ) | |||
Patents and other intangibles | (72 | ) | (102 | ) | |||
Proceeds from sale of assets | 280 | 324 | |||||
Premiums on life insurance | (382 | ) | (399 | ) | |||
Net cash used in investing activities | (4,617 | ) | (6,626 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Repayment of debt borrowings | (29,000 | ) | (49,000 | ) | |||
Proceeds from debt borrowings | 37,000 | 51,000 | |||||
Dividends paid | (24,322 | ) | (24,284 | ) | |||
Repurchase of common shares | (3,310 | ) | (1,273 | ) | |||
Net cash used in financing activities | (19,632 | ) | (23,557 | ) | |||
NET CHANGE IN CASH AND CASH EQUIVALENTS | (1,156 | ) | (422 | ) | |||
CASH AND CASH EQUIVALENTS, beginning of period | 14,400 | 14,764 | |||||
CASH AND CASH EQUIVALENTS, end of period | $ | 13,244 | $ | 14,342 |
• | Reservoir Description: Encompasses the characterization of petroleum reservoir rock, fluid and gas samples to increase production and improve recovery of oil and gas from our clients' reservoirs. We provide laboratory based analytical and field services to characterize properties of crude oil and petroleum products to the oil and gas industry. We also provide proprietary and joint industry studies based on these types of analysis. |
• | Production Enhancement: Includes services and products relating to reservoir well completions, perforations, stimulations and production. We provide integrated diagnostic services to evaluate and monitor the effectiveness of well completions and to develop solutions aimed at increasing the effectiveness of enhanced oil recovery projects. |
March 31, 2018 | December 31, 2017 | ||||||
Finished goods | $ | 23,736 | $ | 21,668 | |||
Parts and materials | 10,966 | 10,613 | |||||
Work in progress | 1,736 | 1,036 | |||||
Total inventories | $ | 36,438 | $ | 33,317 |
March 31, 2018 | December 31, 2017 | ||||||
Contract assets | |||||||
Current | $ | 414 | $ | 325 | |||
Contract Liabilities | |||||||
Current | $ | 3,923 | $ | 2,252 | |||
Non-current | 5,474 | 4,442 |
March 31, 2018 | ||||
Estimate of when contract liabilities will be recognized | ||||
within 12 months | $ | 3,923 | ||
within 12 to 24 months | 4,509 | |||
greater than 24 months | 965 |
Three Months Ended | |||||||
March 31, 2018 | March 31, 2017 | ||||||
Service revenue | $ | 476 | $ | 334 | |||
Sales revenue | 530 | 864 | |||||
Total revenue | 1,006 | 1,198 | |||||
Cost of services, exclusive of depreciation expense shown below | 561 | 551 | |||||
Cost of product sales, exclusive of depreciation expense shown below | 822 | 1,000 | |||||
Depreciation and Amortization | 58 | 123 | |||||
Other Expense (Income) | 8 | (116 | ) | ||||
Operating Income | (443 | ) | (360 | ) | |||
Income tax expense | (97 | ) | (50 | ) | |||
Income (loss) from discontinued operations, net of income taxes | $ | (346 | ) | $ | (310 | ) | |
March 31, 2018 | December 31, 2017 | ||||||
Current assets | $ | 1,748 | $ | 2,549 | |||
Non-current assets | 990 | 1,048 | |||||
Total assets | $ | 2,738 | $ | 3,597 | |||
Current liabilities | $ | 500 | $ | 221 | |||
Non-current liabilities | 79 | 75 | |||||
Total liabilities | $ | 579 | $ | 296 |
March 31, 2018 | December 31, 2017 | ||||||
Senior notes | $ | 150,000 | $ | 150,000 | |||
Credit facility | 86,000 | 78,000 | |||||
Total long-term debt | 236,000 | 228,000 | |||||
Less: Debt issuance costs | (886 | ) | (1,011 | ) | |||
Long-term debt, net | $ | 235,114 | $ | 226,989 |
Three Months Ended | |||||||
March 31, | |||||||
2018 | 2017 | ||||||
Service cost | $ | 349 | $ | 375 | |||
Interest cost | 300 | 275 | |||||
Expected return on plan assets | (259 | ) | (233 | ) | |||
Amortization of prior service cost | (21 | ) | (19 | ) | |||
Amortization of actuarial loss | 84 | 111 | |||||
Net periodic pension cost | $ | 453 | $ | 509 |
Common Shares | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Non-Controlling Interest | Total Equity | |||||||||||||||||||||
December 31, 2017 | $ | 1,148 | $ | 54,463 | $ | 173,855 | $ | (8,353 | ) | $ | (76,269 | ) | $ | 3,888 | $ | 148,732 | |||||||||||
Stock based-awards | — | 1,207 | — | — | 5,084 | — | 6,291 | ||||||||||||||||||||
Repurchase of common shares | — | — | — | — | (3,310 | ) | — | (3,310 | ) | ||||||||||||||||||
Dividends paid | — | — | (24,322 | ) | — | — | — | (24,322 | ) | ||||||||||||||||||
Amortization of deferred pension costs, net of tax | — | — | — | 48 | — | — | 48 | ||||||||||||||||||||
Interest rate swaps, net of tax | — | — | — | 560 | — | — | 560 | ||||||||||||||||||||
Net income | — | — | 23,527 | — | — | 50 | 23,577 | ||||||||||||||||||||
March 31, 2018 | $ | 1,148 | $ | 55,670 | $ | 173,060 | $ | (7,745 | ) | $ | (74,495 | ) | $ | 3,938 | $ | 151,576 |
March 31, 2018 | December 31, 2017 | ||||||
Prior service cost | $ | 525 | $ | 541 | |||
Unrecognized net actuarial loss | (8,639 | ) | (8,703 | ) | |||
Fair value of derivatives, net of tax | 369 | (191 | ) | ||||
Total accumulated other comprehensive income (loss) | $ | (7,745 | ) | $ | (8,353 | ) |
Three Months Ended | |||||
March 31, | |||||
2018 | 2017 | ||||
Weighted average basic common shares outstanding | 44,179 | 44,159 | |||
Effect of dilutive securities: | |||||
Performance shares | 231 | 138 | |||
Restricted stock | 53 | 50 | |||
Weighted average diluted common and potential common shares outstanding | 44,463 | 44,347 |
Three Months Ended | |||||||
March 31, | |||||||
2018 | 2017 | ||||||
Sale of assets | $ | (152 | ) | $ | (179 | ) | |
Results of non-consolidated subsidiaries | (58 | ) | (79 | ) | |||
Foreign exchange | 432 | 97 | |||||
Rents and royalties | (94 | ) | (122 | ) | |||
Severance, compensation and other charges | — | 1,145 | |||||
Other, net | (271 | ) | 127 | ||||
Total other (income) expense, net | $ | (143 | ) | $ | 989 |
Three Months Ended | |||||||
March 31, | |||||||
(Gains) losses by currency | 2018 | 2017 | |||||
British Pound | $ | (128 | ) | $ | 19 | ||
Canadian Dollar | 115 | (19 | ) | ||||
Euro | 246 | 103 | |||||
Other currencies, net | 199 | (6 | ) | ||||
Total (gain) loss, net | $ | 432 | $ | 97 |
Fair Value of Derivatives | |||||||||
March 31, 2018 | December 31, 2017 | Balance Sheet Classification | |||||||
Derivatives designated as hedges: | |||||||||
5 year interest rate swap | $ | 180 | $ | 70 | Other long-term assets | ||||
10 year interest rate swap | 108 | (492 | ) | Other long-term assets (liabilities) | |||||
$ | 288 | $ | (422 | ) |
Three Months Ended March 31, | |||||||||
2018 | 2017 | Income Statement Classification | |||||||
Derivatives designated as hedges: | |||||||||
5 year interest rate swap | $ | 8 | $ | 59 | Increase to interest expense | ||||
10 year interest rate swap | 56 | 108 | Increase to interest expense | ||||||
$ | 64 | $ | 167 |
Fair Value Measurement at | |||||||||||||||
March 31, 2018 | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Assets: | |||||||||||||||
Deferred compensation assets (1) | $ | 45,527 | $ | — | $ | 45,527 | $ | — | |||||||
5 year interest rate swap | 180 | — | 180 | — | |||||||||||
10 year interest rate swap | 108 | — | 108 | — | |||||||||||
45,815 | — | 45,815 | — | ||||||||||||
Liabilities: | |||||||||||||||
Deferred compensation plan | $ | 36,975 | $ | — | $ | 36,975 | $ | — | |||||||
$ | 36,975 | $ | — | $ | 36,975 | $ | — |
Fair Value Measurement at | |||||||||||||||
December 31, 2017 | |||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||
Assets: | |||||||||||||||
Deferred compensation assets (1) | $ | 46,145 | $ | — | $ | 46,145 | $ | — | |||||||
Liabilities: | |||||||||||||||
Deferred compensation plan | $ | 37,280 | $ | — | $ | 37,280 | $ | — | |||||||
5 year interest rate swap | (70 | ) | — | (70 | ) | — | |||||||||
10 year interest rate swap | 492 | — | 492 | — | |||||||||||
$ | 37,702 | $ | — | $ | 37,702 | $ | — | ||||||||
(1) Deferred compensation assets consist of the cash surrender value of life insurance policies and are intended to assist in the funding of the deferred compensation agreements. |
• | Reservoir Description: Encompasses the characterization of petroleum reservoir rock, fluid and gas samples to increase production and improve recovery of oil and gas from our clients' reservoirs. We provide laboratory based analytical and field services to characterize properties of crude oil and petroleum products to the oil and gas industry. We also provide proprietary and joint industry studies based on these types of analysis. |
• | Production Enhancement: Includes services and products relating to reservoir well completions, perforations, stimulations and production. We provide integrated diagnostic services to evaluate and monitor the effectiveness of well completions and to develop solutions aimed at increasing the effectiveness of enhanced oil recovery projects. |
Reservoir Description | Production Enhancement | Corporate & Other 1 | Consolidated | ||||||||||||
Three Months Ended March 31, 2018 | |||||||||||||||
Revenue from unaffiliated clients | $ | 100,809 | $ | 69,209 | $ | — | $ | 170,018 | |||||||
Inter-segment revenue | 47 | 51 | (98 | ) | — | ||||||||||
Segment operating income (loss) | 14,757 | 17,687 | (128 | ) | 32,316 | ||||||||||
Total assets (at end of period) | 319,830 | 217,935 | 59,375 | 597,140 | |||||||||||
Capital expenditures | 2,181 | 1,847 | 415 | 4,443 | |||||||||||
Depreciation and amortization | 4,248 | 1,002 | 568 | 5,818 | |||||||||||
Three Months Ended March 31, 2017 | |||||||||||||||
Revenue from unaffiliated clients | $ | 104,895 | $ | 51,714 | $ | — | $ | 156,609 | |||||||
Inter-segment revenue | 174 | 201 | (375 | ) | — | ||||||||||
Segment operating income (loss) | 15,940 | 7,755 | (156 | ) | 23,539 | ||||||||||
Total assets (at end of period) | 320,543 | 196,298 | 63,575 | 580,416 | |||||||||||
Capital expenditures | 2,577 | 3,020 | 852 | 6,449 | |||||||||||
Depreciation and amortization | 4,620 | 1,164 | 520 | 6,304 |
• | Reservoir Description: Encompasses the characterization of petroleum reservoir rock, fluid and gas samples to increase production and improve recovery of oil and gas from our clients' reservoirs. We provide laboratory based analytical and field services to characterize properties of crude oil and petroleum products to the oil and gas industry. We also provide proprietary and joint industry studies based on these types of analysis. |
• | Production Enhancement: Includes services and products relating to reservoir well completions, perforations, stimulations and production. We provide integrated diagnostic services to evaluate and monitor the effectiveness of well completions and to develop solutions aimed at increasing the effectiveness of enhanced oil recovery projects. |
Three Months Ended March 31, | Change | |||||||||||||||||||
2018 | 2017 | $ | % | |||||||||||||||||
REVENUE: | ||||||||||||||||||||
Services | $ | 119,786 | 70 | % | $ | 120,602 | 77 | % | $ | (816 | ) | (1 | )% | |||||||
Product sales | 50,232 | 30 | % | 36,007 | 23 | % | 14,225 | 40 | % | |||||||||||
Total revenue | 170,018 | 100 | % | 156,609 | 100 | % | 13,409 | 9 | % | |||||||||||
OPERATING EXPENSES: | ||||||||||||||||||||
Cost of services, exclusive of depreciation expense shown below* | 83,288 | 70 | % | 83,050 | 69 | % | 238 | — | % | |||||||||||
Cost of product sales, exclusive of depreciation expense shown below* | 36,030 | 72 | % | 29,971 | 83 | % | 6,059 | 20 | % | |||||||||||
Total cost of services and product sales | 119,318 | 70 | % | 113,021 | 72 | % | 6,297 | 6 | % | |||||||||||
General and administrative expense | 12,709 | 7 | % | 12,756 | 8 | % | (47 | ) | — | % | ||||||||||
Depreciation and amortization | 5,818 | 3 | % | 6,304 | 4 | % | (486 | ) | (8 | )% | ||||||||||
Other (income) expense, net | (143 | ) | — | % | 989 | 1 | % | (1,132 | ) | NM | ||||||||||
Operating income | 32,316 | 19 | % | 23,539 | 15 | % | 8,777 | 37 | % | |||||||||||
Interest expense | 3,120 | 2 | % | 2,618 | 2 | % | 502 | 19 | % | |||||||||||
Income before income tax expense | 29,196 | 17 | % | 20,921 | 13 | % | 8,275 | 40 | % | |||||||||||
Income tax expense | 5,273 | 3 | % | 2,929 | 1 | % | 2,344 | 80 | % | |||||||||||
Income from continuing operations | 23,923 | 14 | % | 17,992 | 11 | % | 5,931 | 33 | % | |||||||||||
Income (loss) from discontinued operations, net of tax | (346 | ) | — | % | (310 | ) | — | % | (36 | ) | (12 | )% | ||||||||
Net Income | 23,577 | 14 | % | 17,682 | 11 | % | 5,895 | 33 | % | |||||||||||
Net income (loss) attributable to non-controlling interest | 50 | — | % | 24 | — | % | 26 | NM | ||||||||||||
Net income attributable to Core Laboratories N.V. | $ | 23,527 | 14 | % | $ | 17,658 | 11 | % | $ | 5,869 | 33 | % | ||||||||
"NM" means not meaningful | ||||||||||||||||||||
* Percentage based on applicable revenue rather than total revenue. |
Three Months Ended | Change | |||||||||||||||||||
Mar 31, 2018 | Dec 31, 2017 | $ | % | |||||||||||||||||
REVENUE: | ||||||||||||||||||||
Services | $ | 119,786 | 70 | % | $ | 125,437 | 74 | % | $ | (5,651 | ) | (5 | )% | |||||||
Product sales | 50,232 | 30 | % | 44,674 | 26 | % | 5,558 | 12 | % | |||||||||||
Total revenue | 170,018 | 100 | % | 170,111 | 100 | % | (93 | ) | — | % | ||||||||||
OPERATING EXPENSES: | ||||||||||||||||||||
Cost of services, exclusive of depreciation expense shown below* | 83,288 | 70 | % | 85,713 | 68 | % | (2,425 | ) | (3 | )% | ||||||||||
Cost of product sales, exclusive of depreciation expense shown below* | 36,030 | 72 | % | 34,229 | 77 | % | 1,801 | 5 | % | |||||||||||
Total cost of services and product sales | 119,318 | 70 | % | 119,942 | 71 | % | (624 | ) | (1 | )% | ||||||||||
General and administrative expense | 12,709 | 7 | % | 11,994 | 7 | % | 715 | 6 | % | |||||||||||
Depreciation and amortization | 5,818 | 3 | % | 6,038 | 4 | % | (220 | ) | (4 | )% | ||||||||||
Other (income) expense, net | (143 | ) | — | % | (269 | ) | — | % | 126 | NM | ||||||||||
Operating income | 32,316 | 19 | % | 32,406 | 19 | % | (90 | ) | — | % | ||||||||||
Interest expense | 3,120 | 2 | % | 2,717 | 2 | % | 403 | 15 | % | |||||||||||
Income before income tax expense | 29,196 | 17 | % | 29,689 | 17 | % | (493 | ) | (2 | )% | ||||||||||
Income tax expense | 5,273 | 3 | % | 8,017 | 5 | % | (2,744 | ) | (34 | )% | ||||||||||
Income from continuing operations | 23,923 | 14 | % | 21,672 | 13 | % | 2,251 | 10 | % | |||||||||||
Income (loss) from discontinued operations | (346 | ) | — | % | (20 | ) | — | % | (326 | ) | NM | |||||||||
Net income | 23,577 | 14 | % | 21,652 | 13 | % | 1,925 | 9 | % | |||||||||||
Net income (loss) attributable to non-controlling interest | 50 | — | % | (39 | ) | — | % | 89 | NM | |||||||||||
Net income attributable to Core Laboratories N.V. | $ | 23,527 | 14 | % | $ | 21,691 | 13 | % | $ | 1,836 | 8 | % | ||||||||
"NM" means not meaningful | ||||||||||||||||||||
* Percentage based on applicable revenue rather than total revenue. |
Three Months Ended | |||||||
March 31, | |||||||
2018 | 2017 | ||||||
Sale of assets | $ | (152 | ) | $ | (179 | ) | |
Results of non-consolidated subsidiaries | (58 | ) | (79 | ) | |||
Foreign exchange | 432 | 97 | |||||
Rents and royalties | (94 | ) | (122 | ) | |||
Severance, compensation and other charges | — | 1,145 | |||||
Other, net | (271 | ) | 127 | ||||
Total other (income) expense, net | $ | (143 | ) | $ | 989 |
Three Months Ended | |||||||
March 31, | |||||||
2018 | 2017 | ||||||
British Pound | $ | (128 | ) | $ | 19 | ||
Canadian Dollar | 115 | (19 | ) | ||||
Euro | 246 | 103 | |||||
Other currencies, net | 199 | (6 | ) | ||||
Total (gain) loss, net | $ | 432 | $ | 97 |
Three Months Ended March 31, | 2018 / 2017 | Three Months Ended December 31, | Q1 / Q4 | ||||||||||||||||||||||
2018 | 2017 | $ Change | % Change | 2017 | $ Change | % Change | |||||||||||||||||||
Revenue: | |||||||||||||||||||||||||
Reservoir Description | $ | 100,809 | $ | 104,895 | $ | (4,086 | ) | (4 | )% | $ | 104,571 | $ | (3,762 | ) | (4 | )% | |||||||||
Production Enhancement | 69,209 | 51,714 | 17,495 | 34 | % | 65,540 | 3,669 | 6 | % | ||||||||||||||||
Consolidated | $ | 170,018 | $ | 156,609 | $ | 13,409 | 9 | % | $ | 170,111 | $ | (93 | ) | — | % | ||||||||||
Operating income (loss): | |||||||||||||||||||||||||
Reservoir Description | $ | 14,757 | $ | 15,940 | $ | (1,183 | ) | (7 | )% | $ | 17,269 | $ | (2,512 | ) | (15 | )% | |||||||||
Production Enhancement | 17,687 | 7,755 | 9,932 | 128 | % | 15,357 | 2,330 | 15 | % | ||||||||||||||||
Corporate and Other1 | (128 | ) | (156 | ) | 28 | NM | (220 | ) | 92 | NM | |||||||||||||||
Consolidated | $ | 32,316 | $ | 23,539 | $ | 8,777 | 37 | % | $ | 32,406 | $ | (90 | ) | — | % | ||||||||||
(1) "Corporate and Other" represents those items that are not directly related to a particular segment | |||||||||||||||||||||||||
"NM" means not meaningful |
Three Months Ended March 31, | 2018 / 2017 | |||||||||
2018 | 2017 | % Change | ||||||||
Cash flows provided by/(used in): | ||||||||||
Operating activities | $ | 23,093 | $ | 29,761 | (22 | )% | ||||
Investing activities | (4,617 | ) | (6,626 | ) | (30 | )% | ||||
Financing activities | (19,632 | ) | (23,557 | ) | (17 | )% | ||||
Net change in cash and cash equivalents | $ | (1,156 | ) | $ | (422 | ) | 174 | % |
Three Months Ended March 31, | 2018 / 2017 | |||||||||
2018 | 2017 | % Change | ||||||||
Free cash flow calculation: | ||||||||||
Net cash provided by operating activities | $ | 23,093 | $ | 29,761 | (22 | )% | ||||
Less: cash paid for capital expenditures | 4,443 | 6,449 | (31 | )% | ||||||
Free cash flow | $ | 18,650 | $ | 23,312 | (20 | )% |
Period | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of a Publicly Announced Program | Maximum Number of Shares That May Yet be Purchased Under the Program (2)(3) | |||||||
January 1 - 31, 2018 (1) | — | $ | — | — | 3,867,578 | ||||||
February 1 - 28, 2018 (1) | 20,032 | 111.88 | 20,000 | 3,847,676 | |||||||
March 1 - 31, 2018 (1) | 10,266 | 104.14 | — | 3,872,966 | |||||||
Total | 30,298 | $ | 109.26 | 20,000 |
Exhibit No. | Exhibit Title | Incorporated by reference from the following documents | |
31.1 | - | Filed herewith | |
31.2 | - | Filed herewith | |
32.1 | - | Furnished herewith | |
32.2 | - | Furnished herewith | |
101.INS | - | XBRL Instance Document | Filed herewith |
101.SCH | - | XBRL Schema Document | Filed herewith |
101.CAL | - | XBRL Calculation Linkbase Document | Filed herewith |
101.LAB | - | XBRL Label Linkbase Document | Filed herewith |
101.PRE | - | XBRL Presentation Linkbase Document | Filed herewith |
101.DEF | - | XBRL Definition Linkbase Document | Filed herewith |
CORE LABORATORIES N.V. | |||
Date: | April 27, 2018 | By: | /s/ Richard L. Bergmark |
Richard L. Bergmark | |||
Chief Financial Officer | |||
(Duly Authorized Officer and | |||
Principal Financial Officer) |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting. |
Date: | April 27, 2018 | By: | /s/ David M. Demshur |
David M. Demshur | |||
Chief Executive Officer |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the Registrant's most recent fiscal quarter (the Registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting. |
Date: | April 27, 2018 | By: | /s/ Richard L. Bergmark |
Richard L. Bergmark | |||
Chief Financial Officer |
Date: | April 27, 2018 | /s/ David M. Demshur |
Name: David M. Demshur | ||
Title: Chief Executive Officer |
Date: | April 27, 2018 | /s/ Richard L. Bergmark |
Name: Richard L. Bergmark | ||
Title: Chief Financial Officer |
Document and Entity Information - shares |
3 Months Ended | |
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Mar. 31, 2018 |
Apr. 25, 2018 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | CORE LABORATORIES N V | |
Entity Central Index Key | 0001000229 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 44,202,824 |
Consolidated Balance Sheets Balance Sheet Parenthetical $ in Thousands |
Mar. 31, 2018
€ / shares
|
Mar. 31, 2018
USD ($)
shares
|
Dec. 31, 2017
€ / shares
|
Dec. 31, 2017
USD ($)
shares
|
---|---|---|---|---|
Allowance for doubtful accounts | $ | $ 2,644 | $ 2,590 | ||
Common stock, par value (euro per share) | € / shares | € 0.02 | € 0.02 | ||
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 | ||
Common stock, shares issued (in shares) | 44,796,252.000 | 44,796,252 | ||
Common stock, shares outstanding (in shares) | 44,189,593.000 | 44,184,205 | ||
Treasury Stock (euro per share) | 606,659.000 | 612,047 | ||
Preferred stock, par value (in shares) | € / shares | € 0.02 | € 0.02 | ||
Preferred stock, shares authorized (in shares) | 6,000,000 | 6,000,000 | ||
Preferred stock, shares issued (in shares) | 0 | 0 | ||
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Consolidated Statement of Other Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Net income | $ 23,577 | $ 17,682 |
Gain (loss) in fair value of interest rate swaps | 646 | 81 |
Interest rate swap amounts reclassified to interest expense | 64 | 167 |
Income taxes on derivatives | (150) | (87) |
Total derivatives | 560 | 161 |
Amortization to net income of prior service cost | (21) | (19) |
Amortization to net income of actuarial loss | 84 | 111 |
Income taxes on pension and other postretirement benefit plans | (15) | (24) |
Other Comprehensive (Income) Loss, Defined Benefit Plan, after Reclassification Adjustment, after Tax | 48 | 68 |
Total other comprehensive income | 608 | 229 |
Comprehensive income | 24,185 | 17,911 |
Comprehensive Income (Loss), Net of Tax, Attributable to Noncontrolling Interest | 50 | 24 |
Comprehensive income attributable to Core Laboratories N.V. | $ 24,135 | $ 17,887 |
Basis of Presentation |
3 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||
Basis of Presentation | BASIS OF PRESENTATION The accompanying unaudited consolidated financial statements include the accounts of Core Laboratories N.V. and its subsidiaries for which we have a controlling voting interest and/or a controlling financial interest. These financial statements have been prepared in accordance with United States ("U.S.") generally accepted accounting principles ("GAAP") for interim financial information using the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, these financial statements do not include all of the information and footnote disclosures required by U.S. GAAP and should be read in conjunction with the audited financial statements and the summary of significant accounting policies and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2017 (the "2017 Annual Report"). Core Laboratories N.V. uses the equity method of accounting for investments in which it has less than a majority interest and over which it does not exercise control but does exert significant influence. We use the cost method to record certain other investments in which we own less than 20% of the outstanding equity and do not exercise control or exert significant influence. Non-controlling interests have been recorded to reflect outside ownership attributable to consolidated subsidiaries that are less than 100% owned. In the opinion of management, all adjustments considered necessary for a fair statement of the results for the interim periods presented have been included in these financial statements. Furthermore, the operating results presented for the three months ended March 31, 2018 may not necessarily be indicative of the results that may be expected for the year ending December 31, 2018. Core Laboratories N.V.'s balance sheet information for the year ended December 31, 2017 was derived from the 2017 audited consolidated financial statements but does not include all disclosures in accordance with U.S. GAAP. References to "Core Lab", the "Company", "we", "our" and similar phrases are used throughout this Quarterly Report on Form 10-Q and relate collectively to Core Laboratories N.V. and its consolidated subsidiaries. We operate our business in two reportable segments. These complementary segments provide different services and products and utilize different technologies for improving reservoir performance and increasing oil and gas recovery from new and existing fields.
Certain reclassifications were made to prior period amounts in order to conform to the current period presentation. These reclassifications had no impact on the reported net income or cash flows for the three months ended March 31, 2017. |
Inventories |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | INVENTORIES Inventories consisted of the following (in thousands):
We include freight costs incurred for shipping inventory to our clients in the Cost of product sales caption in the accompanying Consolidated Statements of Operations. |
Significant Accounting Policies Update |
3 Months Ended |
---|---|
Mar. 31, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Significant Accounting Policies Update | SIGNIFICANT ACCOUNTING POLICIES UPDATE Our significant accounting policies are detailed in "Note 1: Summary of Significant Accounting Policies" of our Annual Report on Form 10-K for the year ended December 31, 2017. Significant changes to our accounting policies as a result of adopting Topic 606 are discussed below: Revenue Recognition All of our revenue is derived from contracts with clients and is reported as revenue in the Consolidated Statement of Operations. Our contracts generally include standard commercial payment terms generally acceptable in each region, and do not include financing with extended payment terms. We have no significant obligations for refunds, warranties, or similar obligations. Our revenue does not include taxes collected from our customers. In certain circumstances we apply the guidance in Accounting Standards Codification Topic 606 - Revenue From Contracts with Customers ("Topic 606") to a portfolio of contracts with similar characteristics. We use estimates and assumptions when accounting for a portfolio that reflect the size and composition of the portfolio of contracts. A performance obligation is a promise in a contract to transfer a distinct service or good to a client, and is the unit of account under ASC Topic 606. We have contracts with two general groups of performance obligations; those that require us to perform analysis and/or diagnostic tests in our laboratory or at the client's wellsite and those from the sale of tools, diagnostic and equipment products and related services. We recognize revenue at an amount that reflects the consideration expected to be received in exchange for such services or goods as described below by applying the five-step method to: (1) identify the contract(s) with clients; (2) identify the performance obligation(s) in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligation(s) in the contract; and (5) recognize revenue when (or as) we satisfy the performance obligation(s). Services Revenue: We provide a variety of services to clients in the oil and gas industry. Where services are provided related to the testing and analysis of rock and fluids, we recognize revenue upon the provision of the test results or analysis to the client. For our design, field engineering and completion diagnostic services, we recognize revenue upon the delivery of those services at the well site or delivery of diagnostic data. In the case of our consortia studies, we have multiple performance obligations and revenue is recognized at the point in time when the testing and analysis results on each contributed core are made available to our consortia members. We conduct testing and provide analysis services in support of our consortia studies recognizing revenue as the testing and analysis results are made available to our consortia members. Product Sales Revenue: We manufacture equipment that we sell to our clients in the oil and gas industry. Revenue is recognized when title to that equipment passes to the client, which is typically when the product is shipped to the client or picked up by the client at our facilities, as set out in the contract. For arrangements that include multiple performance obligations, we allocate revenue to each performance obligation based on estimates of the price that we would charge the client for each promised service or product if it were sold on a standalone basis. To a lesser extent in all of our business segments, we enter into other types of contracts including service arrangements and non-subscription software and licensing agreements. We recognize revenue for these arrangements over time or at a point in time depending on our evaluation of when the client obtains control of the promised services or products. Contract Assets and Liabilities Contract assets and liabilities result due to the timing of revenue recognition, billings and cash collections. Contract assets include our right to payment for goods and services already transferred to a customer when the right to payment is conditional on something other than the passage of time, for example contracts where we recognize revenue over time but do not have a contractual right to payment until we complete the performance obligations. Contract assets are included in our accounts receivable and are not material as of March 31, 2018. Contract liabilities consist of advance payments received and billings in excess of revenue recognized. We generally receive up-front payments relating to our consortia studies; we recognize revenue over the life of the study as the testing and analysis results are made available to our consortia members. We record billings in excess of revenue recognized for contracts with a duration less than twelve months as unearned revenue. We classify contract liabilities for contracts with a duration greater than twelve months as current or non-current based on the timing of when we expect to recognize revenue. The current portion of contract liabilities is included in unearned revenue and the non-current portion of contract liabilities is included in long-term contract liabilities in our consolidated balance sheet. The total balance of our contract liabilities at March 31, 2018 and December 31, 2017 were $9.4 million and $6.7 million, respectively. Disaggregation of Revenue We contract with clients for service revenue and/or product sales revenue. We present revenue disaggregated by services and product sales in our Consolidated Statements of Operations. For revenue disaggregated by reportable segment, please see Note 15, Segment Reporting. |
Contract Assets and Contract Liabilities |
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Mar. 31, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Contract Assets and Contract Liabilities | CONTRACT ASSETS AND CONTRACT LIABILITIES The balance of contract assets and contract liabilities consisted of the following (in thousands):
We did not recognize any impairment losses on our receivables and contract assets for the three months ended March 31, 2018. |
Discontinued Operations |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations | DISCONTINUED OPERATIONS In the first quarter of 2018, in a continuing effort to streamline our business and align our business strategy for further integration of services and products, the Company committed to divest the business of our full range of permanent downhole monitoring systems and related services, which have been part of our Production Enhancement segment. We anticipate the sale of this business line will occur within the next twelve months. The associated results of operations are separately reported as Discontinued Operations for all periods presented on the Consolidated Statement of Operations. Balance sheet items for this discontinued business have been reclassed to Other current assets and Other current liabilities in the Consolidated Balance Sheet. Cash flows from this discontinued business are shown in the table below. As such, the results from continuing operations for the Company and segment highlights for Production Enhancement, exclude these discontinued operations. Selected data for this discontinued business consisted of the following (in thousands):
Net cash provided by operating activities of discontinued operations for the three months ended March 31, 2018 was $0.5 million. |
Long-Term Debt |
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt and Capital Lease Obligations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt | LONG-TERM DEBT We have no capital lease obligations. Long-term debt is as follows (in thousands):
We have two series of senior notes outstanding with an aggregate principal amount of $150 million ("Senior Notes") issued in a private placement transaction. Series A consists of $75 million in aggregate principal amount of notes that bear interest at a fixed rate of 4.01% and are due in full on September 30, 2021. Series B consists of $75 million in aggregate principal amount of notes that bear interest at a fixed rate of 4.11% and are due in full on September 30, 2023. Interest on each series of the Senior Notes is payable semi-annually on March 30 and September 30. We maintain a revolving credit facility ("Credit Facility") that allows for an aggregate borrowing capacity of $400 million. The Credit Facility also provides an option to increase the commitment under the Credit Facility by an additional $50 million to bring the total borrowings available to $450 million if certain prescribed conditions are met by the Company. The Credit Facility bears interest at variable rates from LIBOR plus 1.25% to a maximum of LIBOR plus 2.00%. Any outstanding balance under the Credit Facility is due August 29, 2019, when the Credit Facility matures. Our available capacity at any point in time is reduced by borrowings outstanding at the time and outstanding letters of credit which totaled $12.3 million at March 31, 2018, resulting in an available borrowing capacity under the Credit Facility of $301.7 million. In addition to those items under the Credit Facility, we had $13.4 million of outstanding letters of credit and performance guarantees and bonds from other sources as of March 31, 2018. The terms of the Credit Facility and Senior Notes require us to meet certain covenants, including, but not limited to, an interest coverage ratio (consolidated EBITDA divided by interest expense) and a leverage ratio (consolidated net indebtedness divided by consolidated EBITDA), where consolidated EBITDA (as defined in each agreement) and interest expense are calculated using the most recent four fiscal quarters. The Credit Facility has the more restrictive covenants with a minimum interest coverage ratio of 3.0 to 1.0 and a maximum leverage ratio of 2.5 to 1.0. We believe that we are in compliance with all such covenants contained in our credit agreements. Certain of our material, wholly-owned subsidiaries are guarantors or co-borrowers under the Credit Facility and Senior Notes. In 2014, we entered into two interest rate swap agreements for a total notional amount of $50 million. See Note 13 - Derivative Instruments and Hedging Activities. The estimated fair value of total debt at March 31, 2018 and December 31, 2017 approximated the book value of total debt. The fair value was estimated using Level 2 inputs by calculating the sum of the discounted future interest and principal payments through the date of maturity. |
Pensions |
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Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pensions | PENSION Defined Benefit Plan We provide a noncontributory defined benefit pension plan covering substantially all of our Dutch employees ("Dutch Plan") who were hired prior to 2007. The pension benefit is based on years of service and final pay or career average pay, depending on when the employee began participating. The benefits earned by the employees are immediately vested. The following table summarizes the components of net periodic pension cost under the Dutch Plan (in thousands):
Upon adoption of ASU 2017-07 ("Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost") on January 1, 2018, the components of net periodic benefit cost other than the service cost component are included in the line item "other (income) expense, net" in the income statement. During the three months ended March 31, 2018, we contributed $1.2 million to fund the estimated 2018 premiums on investment contracts held by the Dutch Plan. |
Commitments and Contingencies |
3 Months Ended |
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Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES We have been and may from time to time be named as a defendant in legal actions that arise in the ordinary course of business. These include, but are not limited to, employment-related claims and contractual disputes or claims for personal injury or property damage which occur in connection with the provision of our services and products. Management does not currently believe that any of our pending contractual, employment-related, personal injury or property damage claims and disputes will have a material effect on our future results of operations, financial position or cash flow. |
Equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity | EQUITY During the three months ended March 31, 2018, we repurchased 30,298 of our common shares for $3.3 million. These included rights to 10,298 shares valued at $1.1 million that were surrendered to us pursuant to the terms of a stock-based compensation plan in consideration of the participants' tax burdens that may result from the issuance of common shares under that plan. Such common shares, unless canceled, may be reissued for a variety of purposes such as future acquisitions, non-employee director stock awards or employee stock awards. We distributed 35,686 treasury shares upon vesting of stock-based awards during the three months ended March 31, 2018. In February 2018, we paid a quarterly dividend of $0.55 per share of common stock. In addition, on April 17, 2018, we declared a quarterly dividend of $0.55 per share of common stock for shareholders of record on April 27, 2018 and payable on May 22, 2018. The following table summarizes our changes in equity for the three months ended March 31, 2018 (in thousands):
Accumulated other comprehensive income (loss) consisted of the following (in thousands):
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Earnings per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per Share | EARNINGS PER SHARE We compute basic earnings per common share by dividing net income attributable to Core Laboratories N.V. by the weighted average number of common shares outstanding during the period. Diluted earnings per common and potential common shares include additional shares in the weighted average share calculations associated with the incremental effect of dilutive restricted stock awards and contingently issuable shares, as determined using the treasury stock method. The following table summarizes the calculation of weighted average common shares outstanding used in the computation of diluted earnings per share (in thousands):
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Other (Income) Expense, Net |
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Other (Income) Expense, Net | OTHER (INCOME) EXPENSE, NET The components of Other (income) expense, net, were as follows (in thousands):
Foreign exchange gains and losses are summarized in the following table (in thousands):
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Income Tax Expense |
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Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Tax Expense | INCOME TAX EXPENSE The effective tax rates for the three months ended March 31, 2018 and 2017 were 18% and 14%, respectively. Income tax expense of $5.3 million in the first quarter of 2018 increased by $2.4 million compared to $2.9 million in the same period in 2017, due to the result of several items discrete to each quarter, along with changes in activity levels in jurisdictions with differing tax rates. |
Derivative Instruments and Hedging Activities |
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Derivative Instruments and Hedging Activities | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES We are exposed to market risks related to fluctuations in interest rates. To mitigate these risks, we utilize derivative instruments in the form of interest rate swaps. We do not enter into derivative transactions for speculative purposes. Interest Rate Risk Our Credit Facility bears interest at variable rates from LIBOR plus 1.25% to a maximum of LIBOR plus 2.00%. As a result of two interest rate swap agreements, we are subject to interest rate risk on debt in excess of $50 million drawn on our Credit Facility. In 2014, we entered into two interest rate swap agreements for a total notional amount of $50 million to hedge changes in the variable rate interest expense on $50 million of our existing or replacement LIBOR-priced debt. Under the first swap agreement of $25 million, we have fixed the LIBOR portion of the interest rate at 1.73% through August 29, 2019, and under the second swap agreement of $25 million, we have fixed the LIBOR portion of the interest rate at 2.5% through August 29, 2024. Each swap is measured at fair value and recorded in our Consolidated Balance Sheet as an asset or liability. They are designated and qualify as cash flow hedging instruments and are highly effective. Unrealized losses are deferred to shareholders' equity as a component of accumulated other comprehensive loss and are recognized in income as an increase to interest expense in the period in which the related cash flows being hedged are recognized in expense. At March 31, 2018, we had fixed rate long-term debt aggregating $200 million and variable rate long-term debt aggregating $36 million, after taking into account the effect of the swaps. The fair values of outstanding derivative instruments are as follows (in thousands):
The fair value of all outstanding derivatives was determined using a model with inputs that are observable in the market (Level 2) or can be derived from or corroborated by observable data. The effect of the interest rate swaps on the Consolidated Statement of Operations was as follows (in thousands):
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Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments | FINANCIAL INSTRUMENTS The Company's only financial assets and liabilities which are measured at fair value on a recurring basis relate to certain aspects of the Company's benefit plans and our derivative instruments. We use the market approach to value certain assets and liabilities at fair value using significant other observable inputs (Level 2) with the assistance of a third-party specialist. We do not have any assets or liabilities measured at fair value on a recurring basis using quoted prices in an active market (Level 1) or significant unobservable inputs (Level 3). Gains and losses related to the fair value changes in the deferred compensation assets and liabilities are recorded in General and administrative expense in the Consolidated Statements of Operations. Gains and losses related to the fair value of the interest rate swaps are recorded in Other comprehensive income. The following table summarizes the fair value balances (in thousands):
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Segment Reporting |
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Segment Reporting | SEGMENT REPORTING We operate our business in two reportable segments. These complementary segments provide different services and products and utilize different technologies for improving reservoir performance and increasing oil and gas recovery from new and existing fields.
Results for these segments are presented below. We use the same accounting policies to prepare our segment results as are used to prepare our Consolidated Financial Statements. All interest and other non-operating income (expense) is attributable to Corporate & Other and is not allocated to specific segments. Summarized financial information concerning our segments is shown in the following table (in thousands):
(1) "Corporate & Other" represents those items that are not directly related to a particular segment, eliminations and the assets and liabilities of discontinued operations. |
Recent Accounting Pronouncements |
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Mar. 31, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | RECENT ACCOUNTING PRONOUNCEMENTS Pronouncements Adopted in 2018 In May 2014, the FASB issued ASU 2014-09 ("Revenue from Contracts with Customers"), which provides guidance on revenue recognition. The core principle of this guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance requires entities to apply a five-step method to (1) identify the contract(s) with customers; (2) identify the performance obligation(s) in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligation(s) in the contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. We adopted this standard and all related amendments on January 1, 2018. The adoption of this standard did not result in any material changes to our revenue recognition policies and procedures nor to our financial statements. Upon adoption we used the modified retrospective approach; this approach resulted in no cumulative adjustment to retained earnings or net income and no adjustments to prior periods. In March 2017, the FASB issued ASU 2017-07 ("Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost"), which requires that an employer report the service cost component of net periodic pension cost in the same line item as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations. We adopted this standard on January 1, 2018. We used the practical expedient method which allows us to use the amounts disclosed in our pension footnote for the three month period ended March 31, 2017 as the estimation basis for applying the retrospective presentation requirements. The adoption of this standard did not result in any material changes to our consolidated financial statements. Pronouncements Not Yet Effective In February 2016, the FASB issued ASU 2016-02 ("Leases"), which introduces the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous guidance. The new standard establishes a right-of-use ("ROU") model that requires a lessee to record an ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. The new standard is effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years with early adoption permitted. We anticipate the adoption of this standard will have a material impact on our Consolidated Balance Sheets, increasing both asset balances and liability balances; however, there should not be a material impact to our Consolidated Statement of Operations. In June 2016, the FASB issued ASU 2016-13 ("Measurement of Credit Losses on Financial Instruments") which replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The new standard is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years with early adoption permitted in fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are evaluating the impact that the adoption of this standard will have on our consolidated financial statements. In February 2018, the FASB issued ASU 2018-02 ("Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income"), which provides companies with an option to reclassify stranded tax effects resulting from enactment of the Tax Cuts and Jobs Act ("TCJA") from accumulated other comprehensive income to retained earnings. The new standard is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years with early adoption permitted, and would be applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the tax rate as a result of TCJA is recognized. We do not expect the adoption of this standard to have a material impact on our consolidated financial statements. |
Significant Accounting Policies Update (Policies) |
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Mar. 31, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Pronouncements | Revenue Recognition All of our revenue is derived from contracts with clients and is reported as revenue in the Consolidated Statement of Operations. Our contracts generally include standard commercial payment terms generally acceptable in each region, and do not include financing with extended payment terms. We have no significant obligations for refunds, warranties, or similar obligations. Our revenue does not include taxes collected from our customers. In certain circumstances we apply the guidance in Accounting Standards Codification Topic 606 - Revenue From Contracts with Customers ("Topic 606") to a portfolio of contracts with similar characteristics. We use estimates and assumptions when accounting for a portfolio that reflect the size and composition of the portfolio of contracts. A performance obligation is a promise in a contract to transfer a distinct service or good to a client, and is the unit of account under ASC Topic 606. We have contracts with two general groups of performance obligations; those that require us to perform analysis and/or diagnostic tests in our laboratory or at the client's wellsite and those from the sale of tools, diagnostic and equipment products and related services. We recognize revenue at an amount that reflects the consideration expected to be received in exchange for such services or goods as described below by applying the five-step method to: (1) identify the contract(s) with clients; (2) identify the performance obligation(s) in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligation(s) in the contract; and (5) recognize revenue when (or as) we satisfy the performance obligation(s). Services Revenue: We provide a variety of services to clients in the oil and gas industry. Where services are provided related to the testing and analysis of rock and fluids, we recognize revenue upon the provision of the test results or analysis to the client. For our design, field engineering and completion diagnostic services, we recognize revenue upon the delivery of those services at the well site or delivery of diagnostic data. In the case of our consortia studies, we have multiple performance obligations and revenue is recognized at the point in time when the testing and analysis results on each contributed core are made available to our consortia members. We conduct testing and provide analysis services in support of our consortia studies recognizing revenue as the testing and analysis results are made available to our consortia members. Product Sales Revenue: We manufacture equipment that we sell to our clients in the oil and gas industry. Revenue is recognized when title to that equipment passes to the client, which is typically when the product is shipped to the client or picked up by the client at our facilities, as set out in the contract. For arrangements that include multiple performance obligations, we allocate revenue to each performance obligation based on estimates of the price that we would charge the client for each promised service or product if it were sold on a standalone basis. To a lesser extent in all of our business segments, we enter into other types of contracts including service arrangements and non-subscription software and licensing agreements. We recognize revenue for these arrangements over time or at a point in time depending on our evaluation of when the client obtains control of the promised services or products. Contract Assets and Liabilities Contract assets and liabilities result due to the timing of revenue recognition, billings and cash collections. Contract assets include our right to payment for goods and services already transferred to a customer when the right to payment is conditional on something other than the passage of time, for example contracts where we recognize revenue over time but do not have a contractual right to payment until we complete the performance obligations. Contract assets are included in our accounts receivable and are not material as of March 31, 2018. Contract liabilities consist of advance payments received and billings in excess of revenue recognized. We generally receive up-front payments relating to our consortia studies; we recognize revenue over the life of the study as the testing and analysis results are made available to our consortia members. We record billings in excess of revenue recognized for contracts with a duration less than twelve months as unearned revenue. We classify contract liabilities for contracts with a duration greater than twelve months as current or non-current based on the timing of when we expect to recognize revenue. The current portion of contract liabilities is included in unearned revenue and the non-current portion of contract liabilities is included in long-term contract liabilities in our consolidated balance sheet. The total balance of our contract liabilities at March 31, 2018 and December 31, 2017 were $9.4 million and $6.7 million, respectively. |
Inventories (Tables) |
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Schedule of Inventory, Current | Inventories consisted of the following (in thousands):
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Contract Assets and Contract Liabilities (Tables) |
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Contract with Customer, Asset and Liability | contract assets and contract liabilities consisted of the following (in thousands):
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Discontinued Operations (Tables) |
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disposal Groups, Including Discontinued Operations | Selected data for this discontinued business consisted of the following (in thousands):
|
Long-Term Debt (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt and Capital Lease Obligations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt Instruments | We have no capital lease obligations. Long-term debt is as follows (in thousands):
|
Pensions (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Benefit Costs | The following table summarizes the components of net periodic pension cost under the Dutch Plan (in thousands):
|
Equity (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stockholders Equity | The following table summarizes our changes in equity for the three months ended March 31, 2018 (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | Accumulated other comprehensive income (loss) consisted of the following (in thousands):
|
Earnings per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Weighted Average Number of Shares | The following table summarizes the calculation of weighted average common shares outstanding used in the computation of diluted earnings per share (in thousands):
|
Other (Income) Expense, Net (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Foreign Currency Gains Losses By Currency | Foreign exchange gains and losses are summarized in the following table (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Operating Cost and Expense, by Component | The components of Other (income) expense, net, were as follows (in thousands):
|
Derivative Instruments and Hedging Activities (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Liabilities at Fair Value | The fair values of outstanding derivative instruments are as follows (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments, Gain (Loss) | The effect of the interest rate swaps on the Consolidated Statement of Operations was as follows (in thousands):
|
Financial Instruments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | The following table summarizes the fair value balances (in thousands):
|
Segment Reporting (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | Summarized financial information concerning our segments is shown in the following table (in thousands):
|
Inventories (Details) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Finished goods | $ 23,736 | $ 21,668 |
Parts and materials | 10,966 | 10,613 |
Work in progress | 1,736 | 1,036 |
Total inventories | $ 36,438 | $ 33,317 |
Significant Accounting Policies Update (Details) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Accounting Changes and Error Corrections [Abstract] | ||
Contract with Customer, Asset, Net, Current | $ 414 | $ 325 |
Contract with Customer, Liability, Current | 3,923 | 2,252 |
CONTRACT LIABILITIES | $ 5,474 | $ 4,442 |
Contract Assets and Contract Liabilities - Changes in Net Contract Assets (Liabilities) (Details) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Revenue from Contract with Customer [Abstract] | ||
CONTRACT LIABILITIES | $ 5,474 | $ 4,442 |
Contract Assets and Contract Liabilities - Current and Long-term Contract Liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Contract with Customer, Asset, Gross | $ 9,397 | $ 6,694 |
Contract with Customer, Liability, Current | (3,923) | $ (2,252) |
within 12 to 24 months | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Contract liabilities | 4,509 | |
greater than 24 months | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Contract liabilities | $ 965 |
Discontinued Operations (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Discontinued Operations and Disposal Groups [Abstract] | ||
Service revenue | $ 476 | $ 334 |
Sales revenue | 530 | 864 |
Total revenue | 1,006 | 1,198 |
Cost of services, exclusive of depreciation expense shown below | 561 | 551 |
Cost of product sales, exclusive of depreciation expense shown below | 822 | 1,000 |
Depreciation and Amortization | 58 | 123 |
Other Expense (Income) | 8 | (116) |
Operating Income | (443) | (360) |
Income tax expense | (97) | (50) |
Income (loss) from discontinued operations, net of income taxes | (346) | (310) |
Current assets | 1,748 | 2,549 |
Non-current assets | 990 | 1,048 |
Total assets | 2,738 | 3,597 |
Current liabilities | 500 | 221 |
Non-current liabilities | 79 | 75 |
Total liabilities | 579 | $ 296 |
Cash provided by (used in) operating activities, discontinued operations | $ 500 |
Pensions (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Retirement Benefits [Abstract] | ||
Service cost | $ 349 | $ 375 |
Interest cost | 300 | 275 |
Expected return on plan assets | (259) | (233) |
Amortization of prior service cost | 21 | 19 |
Amortization of actuarial loss | 84 | 111 |
Net periodic pension cost | 453 | $ 509 |
Contributions by employer | $ 1,200 |
Equity (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Equity [Abstract] | ||
Treasury stock, shares, acquired | 30,298 | |
Treasury stock, value | $ 3.3 | |
Treasury shares, acquired, tax burden | 10,298 | |
Treasury shares, acquired, value, tax burden | $ 1.1 | |
Treasury stock reissued | 35,686 | |
Cash dividends per share (in dollars per share) | $ 0.55 | $ 0.55 |
Dividends declared (in dollars per share) | $ 0.55 |
Equity (Comprehensive Income) (Details) - USD ($) $ in Thousands |
Mar. 31, 2018 |
Dec. 31, 2017 |
---|---|---|
Equity [Abstract] | ||
Prior service cost | $ 525 | $ 541 |
Unrecognized net actuarial loss | (8,639) | (8,703) |
Fair value of derivatives, net of tax | 369 | (191) |
Total accumulated other comprehensive income (loss) | $ (7,745) | $ (8,353) |
Earnings per Share (Details) - shares shares in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Earnings Per Share [Abstract] | ||
Weighted average basic common shares outstanding | 44,179 | 44,159 |
Performance shares (in shares) | 231 | 138 |
Restricted stock (in shares) | 53 | 50 |
Weighted average diluted common and potential common shares outstanding | 44,463 | 44,347 |
Other (Income) Expense, Net (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Income Statement Location [Line Items] | ||
Total other (income) expense, net | $ (143) | $ 989 |
Sale of assets | ||
Income Statement Location [Line Items] | ||
Total other (income) expense, net | (152) | (179) |
Other, net | ||
Income Statement Location [Line Items] | ||
Total other (income) expense, net | (271) | 127 |
Foreign exchange | ||
Income Statement Location [Line Items] | ||
Total other (income) expense, net | 432 | 97 |
Rents and royalties | ||
Income Statement Location [Line Items] | ||
Total other (income) expense, net | (94) | (122) |
Severance, compensation and other charges | ||
Income Statement Location [Line Items] | ||
Total other (income) expense, net | 0 | 1,145 |
Investment Income [Member] | ||
Income Statement Location [Line Items] | ||
Total other (income) expense, net | $ (58) | $ (79) |
Other (Income) Expense, Net (Foreign Currency (Gain) Loss by Currency) (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Foreign exchange | $ 432 | $ 97 |
British Pound | ||
Foreign exchange | (128) | 19 |
Canadian Dollar | ||
Foreign exchange | 115 | (19) |
Euro | ||
Foreign exchange | 246 | 103 |
Other Currencies Net [Member] | ||
Foreign exchange | $ 199 | $ (6) |
Income Tax Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | 18.00% | 14.00% |
Change in income tax expense | $ 2,400 | |
Income tax expense | $ 5,273 | $ 2,929 |
Derivative Instruments and Hedging Activities - Effect of Interest Rate Swaps on Statement of Operations (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2018 |
Mar. 31, 2017 |
|
5 year interest rate swap | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Interest rate swaps reclassified to earnings | $ 56 | $ 108 |
10 year interest rate swap | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Interest rate swaps reclassified to earnings | 8 | 59 |
Interest Rate Swap | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Interest rate swaps reclassified to earnings | $ 64 | $ 167 |
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