Cover Page
Cover Page - shares shares in Millions | 6 Months Ended | |
Jun. 30, 2024 | Jul. 18, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-38441 | |
Entity Registrant Name | ChampionX Corp | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 82-3066826 | |
Entity Address, Address Line One | 2445 Technology Forest Blvd, | |
Entity Address, Address Line Two | Building 4, 12th Floor | |
Entity Address, City or Town | The Woodlands, | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77381 | |
City Area Code | (281) | |
Local Phone Number | 403-5772 | |
Security 12b Title | Common stock, $0.01 par value | |
Trading Symbol | CHX | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 190.5 | |
Entity Central Index Key | 0001723089 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Revenue: | ||||
Lease and other revenue | $ 26,179 | $ 24,539 | $ 53,314 | $ 46,618 |
Total revenue | 893,272 | 926,600 | 1,815,413 | 1,874,947 |
Cost of goods and services | 613,426 | 644,394 | 1,236,363 | 1,309,386 |
Gross profit | 279,846 | 282,206 | 579,050 | 565,561 |
Costs and expenses: | ||||
Selling, general and administrative expense | 182,995 | 162,484 | 355,409 | 323,300 |
(Gain) loss on sale-leaseback transaction and disposal group | 0 | 0 | (29,883) | 12,965 |
Interest expense, net | 15,421 | 14,544 | 29,356 | 27,010 |
Foreign currency transaction losses (gains), net | (2,767) | 4,439 | (2,712) | 13,691 |
Other expense (income), net | 938 | (7,543) | 3,865 | (11,500) |
Income before income taxes | 83,259 | 108,282 | 223,015 | 200,095 |
Provision for income taxes | 27,868 | 11,656 | 54,464 | 40,325 |
Net income | 55,391 | 96,626 | 168,551 | 159,770 |
Net income attributable to noncontrolling interest | 2,822 | 829 | 3,059 | 441 |
Net income attributable to ChampionX | $ 52,569 | $ 95,797 | $ 165,492 | $ 159,329 |
Earnings per share attributable to ChampionX: | ||||
Basic (in dollars per share) | $ 0.28 | $ 0.49 | $ 0.87 | $ 0.81 |
Diluted (in dollars per share) | $ 0.27 | $ 0.48 | $ 0.85 | $ 0.79 |
Weighted-average shares outstanding: | ||||
Basic (in shares) | 190,426 | 197,034 | 190,615 | 197,657 |
Diluted (in shares) | 193,257 | 200,735 | 193,740 | 201,694 |
Product revenue | ||||
Revenue: | ||||
Revenue | $ 763,212 | $ 813,416 | $ 1,571,039 | $ 1,646,439 |
Service revenue | ||||
Revenue: | ||||
Revenue | $ 103,881 | $ 88,645 | $ 191,060 | $ 181,890 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 55,391 | $ 96,626 | $ 168,551 | $ 159,770 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments | (7,460) | 9,020 | (17,538) | (1,656) |
Cash flow hedges | 579 | 231 | 3,709 | (4,458) |
Defined pension and other post-retirement benefits adjustments, net | 240 | (102) | 203 | (49) |
Other comprehensive income (loss) | (6,641) | 9,149 | (13,626) | (6,163) |
Comprehensive income | 48,750 | 105,775 | 154,925 | 153,607 |
Less: Comprehensive income attributable to noncontrolling interest | 2,822 | 829 | 3,059 | 441 |
Comprehensive income attributable to ChampionX | $ 45,928 | $ 104,946 | $ 151,866 | $ 153,166 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Current Assets: | ||
Cash and cash equivalents | $ 393,297 | $ 288,557 |
Receivables, net of allowances of $5,540 in 2024 and $5,734 in 2023 | 441,401 | 534,534 |
Inventories, net | 538,999 | 521,549 |
Assets held for sale | 15,192 | 15,565 |
Prepaid expenses and other current assets | 56,297 | 65,212 |
Total current assets | 1,445,186 | 1,425,417 |
Property, plant, and equipment, net of accumulated depreciation of $806,304 in 2024 and $781,367 in 2023 | 752,553 | 773,552 |
Goodwill | 684,567 | 669,064 |
Intangible assets, net | 229,562 | 243,553 |
Operating lease right-of-use assets | 107,329 | 69,561 |
Other non-current assets | 70,143 | 60,555 |
Total assets | 3,289,340 | 3,241,702 |
Current Liabilities: | ||
Current portion of long-term debt | 6,203 | 6,203 |
Accounts payable | 484,472 | 451,680 |
Accrued compensation and employee benefits | 76,560 | 109,626 |
Current portion of operating lease liabilities | 21,924 | 23,292 |
Accrued distributor fees | 11 | 56,443 |
Accrued expenses and other current liabilities | 138,535 | 135,505 |
Total current liabilities | 727,705 | 782,749 |
Long-term debt | 592,868 | 594,283 |
Deferred income taxes | 62,101 | 71,497 |
Operating lease liabilities | 81,951 | 41,975 |
Other long-term liabilities | 95,482 | 90,167 |
Total liabilities | 1,560,107 | 1,580,671 |
Stockholders’ equity: | ||
Common stock (2.5 billion shares authorized, $0.01 par value) 190.5 million shares and 191.3 million shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively | 1,905 | 1,913 |
Capital in excess of par value of common stock | 2,150,847 | 2,166,911 |
Accumulated deficit | (357,445) | (455,676) |
Accumulated other comprehensive loss | (50,152) | (36,526) |
ChampionX stockholders’ equity | 1,745,155 | 1,676,622 |
Noncontrolling interest | (15,922) | (15,591) |
Total equity | 1,729,233 | 1,661,031 |
Total liabilities and equity | $ 3,289,340 | $ 3,241,702 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands, shares in Millions | Jun. 30, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Receivables, allowances | $ 5,540 | $ 5,734 |
Accumulated depreciation on property, plant and equipment | $ 806,304 | $ 781,367 |
Common stock, shares authorized (in shares) | 2,500 | 2,500 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares issued (in shares) | 190.5 | 191.3 |
Common stock, shares outstanding (in shares) | 190.5 | 191.3 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Capital in Excess of Par Value | Accum. Deficit | Accum. Other Comp. Loss | Non-controlling Interest |
Beginning balance (in shares) at Dec. 31, 2022 | 198,466,000 | |||||
Beginning balance at Dec. 31, 2022 | $ 1,677,215 | $ 1,985 | $ 2,249,698 | $ (527,603) | $ (29,530) | $ (17,335) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 63,144 | 63,532 | (388) | |||
Other comprehensive income (loss) | (15,312) | (15,312) | ||||
Stock-based compensation (in shares) | 327,000 | |||||
Stock-based compensation | 5,234 | $ 3 | 5,231 | |||
Stock options exercised (in shares) | 481,000 | |||||
Stock options exercised | 3,014 | $ 5 | 3,009 | |||
Taxes withheld on issuance of stock-based awards | (5,100) | (5,100) | ||||
Dividends declared to common stockholders | (16,784) | (16,784) | ||||
Repurchase and cancellation of common stock (in shares) | (1,302,000) | |||||
Repurchase and cancellation of common stock | (40,427) | $ (13) | (14,811) | (25,603) | ||
Distributions to noncontrolling interest | (823) | (823) | ||||
Cumulative translation adjustments | 8 | 8 | ||||
Ending balance (in shares) at Mar. 31, 2023 | 197,972,000 | |||||
Ending balance at Mar. 31, 2023 | 1,670,169 | $ 1,980 | 2,238,027 | (506,458) | (44,842) | (18,538) |
Beginning balance (in shares) at Dec. 31, 2022 | 198,466,000 | |||||
Beginning balance at Dec. 31, 2022 | 1,677,215 | $ 1,985 | 2,249,698 | (527,603) | (29,530) | (17,335) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 159,770 | |||||
Other comprehensive income (loss) | (6,163) | |||||
Ending balance (in shares) at Jun. 30, 2023 | 196,296,000 | |||||
Ending balance at Jun. 30, 2023 | 1,712,322 | $ 1,963 | 2,220,909 | (457,148) | (35,693) | (17,709) |
Beginning balance (in shares) at Mar. 31, 2023 | 197,972,000 | |||||
Beginning balance at Mar. 31, 2023 | 1,670,169 | $ 1,980 | 2,238,027 | (506,458) | (44,842) | (18,538) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 96,626 | 95,797 | 829 | |||
Other comprehensive income (loss) | 9,149 | 9,149 | ||||
Stock-based compensation (in shares) | 180,000 | |||||
Stock-based compensation | 6,341 | $ 2 | 6,339 | |||
Stock options exercised (in shares) | 27,000 | |||||
Stock options exercised | 24 | 24 | ||||
Taxes withheld on issuance of stock-based awards | (2,039) | (2,039) | ||||
Dividends declared to common stockholders | (16,758) | (16,758) | ||||
Repurchase and cancellation of common stock (in shares) | (1,883,000) | |||||
Repurchase and cancellation of common stock | (51,190) | $ (19) | (21,442) | (29,729) | ||
Ending balance (in shares) at Jun. 30, 2023 | 196,296,000 | |||||
Ending balance at Jun. 30, 2023 | $ 1,712,322 | $ 1,963 | 2,220,909 | (457,148) | (35,693) | (17,709) |
Beginning balance (in shares) at Dec. 31, 2023 | 191,300,000 | 191,135,000 | ||||
Beginning balance at Dec. 31, 2023 | $ 1,661,031 | $ 1,913 | 2,166,911 | (455,676) | (36,526) | (15,591) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 113,160 | 112,923 | 237 | |||
Other comprehensive income (loss) | (6,985) | (6,985) | ||||
Stock-based compensation (in shares) | 677,000 | |||||
Stock-based compensation | 6,173 | $ 7 | 6,166 | |||
Stock options exercised (in shares) | 168,000 | |||||
Stock options exercised | 917 | $ 2 | 915 | |||
Taxes withheld on issuance of stock-based awards | (11,821) | (11,821) | ||||
Dividends declared to common stockholders | (17,967) | (17,967) | ||||
Repurchase and cancellation of common stock (in shares) | (1,611,000) | |||||
Repurchase and cancellation of common stock | (49,399) | $ (18) | (18,288) | (31,093) | ||
Distributions to noncontrolling interest | 0 | 0 | ||||
Cumulative translation adjustments | 65 | 65 | ||||
Ending balance (in shares) at Mar. 31, 2024 | 190,369,000 | |||||
Ending balance at Mar. 31, 2024 | $ 1,695,174 | $ 1,904 | 2,143,883 | (391,813) | (43,511) | (15,289) |
Beginning balance (in shares) at Dec. 31, 2023 | 191,300,000 | 191,135,000 | ||||
Beginning balance at Dec. 31, 2023 | $ 1,661,031 | $ 1,913 | 2,166,911 | (455,676) | (36,526) | (15,591) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 168,551 | |||||
Other comprehensive income (loss) | $ (13,626) | |||||
Repurchase and cancellation of common stock (in shares) | (1,611,055) | |||||
Repurchase and cancellation of common stock | $ (49,400) | |||||
Ending balance (in shares) at Jun. 30, 2024 | 190,500,000 | 190,459,000 | ||||
Ending balance at Jun. 30, 2024 | $ 1,729,233 | $ 1,905 | 2,150,847 | (357,445) | (50,152) | (15,922) |
Beginning balance (in shares) at Mar. 31, 2024 | 190,369,000 | |||||
Beginning balance at Mar. 31, 2024 | 1,695,174 | $ 1,904 | 2,143,883 | (391,813) | (43,511) | (15,289) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 55,391 | 52,569 | 2,822 | |||
Other comprehensive income (loss) | (6,641) | (6,641) | ||||
Stock-based compensation (in shares) | 9,000 | |||||
Stock-based compensation | 6,505 | $ 0 | 6,505 | |||
Stock options exercised (in shares) | 81,000 | |||||
Stock options exercised | 596 | $ 1 | 595 | |||
Taxes withheld on issuance of stock-based awards | (136) | (136) | ||||
Dividends declared to common stockholders | (18,201) | (18,201) | ||||
Repurchase and cancellation of common stock (in shares) | 0 | |||||
Repurchase and cancellation of common stock | 0 | $ 0 | 0 | 0 | ||
Distributions to noncontrolling interest | (3,417) | (3,417) | ||||
Cumulative translation adjustments | $ (38) | (38) | ||||
Ending balance (in shares) at Jun. 30, 2024 | 190,500,000 | 190,459,000 | ||||
Ending balance at Jun. 30, 2024 | $ 1,729,233 | $ 1,905 | $ 2,150,847 | $ (357,445) | $ (50,152) | $ (15,922) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | ||||
May 16, 2024 | Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2023 | Mar. 31, 2023 | |
Statement of Stockholders' Equity [Abstract] | |||||
Dividends declared to common shareholders (in dollars per share) | $ 0.095 | $ 0.095 | $ 0.095 | $ 0.085 | $ 0.085 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2023 | |
Cash flows from operating activities: | ||
Net income | $ 168,551 | $ 159,770 |
Adjustments to reconcile net income to net cash flows from operating activities: | ||
Depreciation and amortization | 119,783 | 115,387 |
(Gain) loss on sale-leaseback transaction and disposal group | (29,883) | 12,965 |
Loss on Argentina Blue Chip Swap transaction | 7,168 | 0 |
Stock-based compensation | 12,678 | 11,575 |
Provision for inventory obsolescence and write-downs | 9,908 | 12,344 |
Deferred income taxes | (15,092) | (22,187) |
Loss (gain) on disposal of fixed assets | 217 | (1,070) |
Amortization of deferred loan costs and accretion of discount | 2,120 | 2,029 |
Other | 2,805 | 3,185 |
Changes in operating assets and liabilities (net of effects of foreign exchange): | ||
Receivables | 90,912 | 83,589 |
Inventories | (40,897) | (70,040) |
Leased assets | (15,770) | (22,125) |
Other assets | 1,016 | 3,135 |
Accounts payable | 20,919 | 40,632 |
Other liabilities | (93,302) | (120,901) |
Net cash flows provided by operating activities | 241,133 | 208,288 |
Cash flows from investing activities: | ||
Capital expenditures | (65,314) | (57,277) |
Proceeds from sale of fixed assets | 6,482 | 7,109 |
Proceeds from sale-leaseback transaction | 44,292 | 0 |
Purchase of investments | (31,526) | 0 |
Sale of investments | 24,358 | 0 |
Acquisitions, net of cash acquired | (21,472) | 0 |
Net cash used for investing activities | (43,180) | (50,168) |
Cash flows from financing activities: | ||
Proceeds from long-term debt | 0 | 15,500 |
Repayment of long-term debt | (3,102) | (43,633) |
Repurchases of common stock | (49,399) | (91,617) |
Dividends paid | (34,336) | (31,591) |
Payments related to taxes withheld on stock-based compensation | (11,596) | (7,139) |
Proceeds expected to be remitted under the Accounts Receivable Facility | 15,352 | 15,400 |
Other | (8,313) | (2,161) |
Net cash used for financing activities | (91,394) | (145,241) |
Effect of exchange rate changes on cash and cash equivalents | (1,819) | 22 |
Net increase in cash and cash equivalents | 104,740 | 12,901 |
Cash and cash equivalents at beginning of period | 288,557 | 250,187 |
Cash and cash equivalents at end of period | $ 393,297 | $ 263,088 |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of the Business ChampionX Corporation is a global leader in chemistry solutions, artificial lift systems, and highly engineered equipment and technologies that help companies drill for and produce oil and gas safely, efficiently, and sustainably around the world. Our expertise, innovative products, and digital technologies provide enhanced oil and gas production, transportation, and real-time emissions monitoring throughout the lifecycle of a well. Unless the context requires otherwise, references in this report to “we,” “us,” “our,” “the Company,” or “ChampionX” mean ChampionX Corporation, together with its subsidiaries where the context requires. Merger Agreement On April 2, 2024, ChampionX entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Schlumberger Limited, a Curaçao corporation (“SLB”), Sodium Holdco, Inc., a Delaware corporation and indirect wholly owned subsidiary of SLB, (“Holdco”), and Sodium Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of SLB and Holdco (“Merger Sub”), pursuant to which, and subject to the terms and conditions therein, Merger Sub will be merged with and into ChampionX (the “Merger,” together with the other transactions contemplated by the Merger Agreement, the “Transactions”), with ChampionX surviving the Merger as an indirect wholly owned subsidiary of SLB. Pursuant to the Merger Agreement, at the effective time of the Merger (the “Effective Time”) and by virtue of the Merger, each share of common stock, par value $0.01 per share, of ChampionX issued and outstanding immediately prior to the Effective Time (other than any shares of ChampionX common stock held in the treasury of ChampionX or held by SLB, Holdco or any direct or indirect wholly owned subsidiary of SLB, in each case except for any such shares held on behalf of third parties) will be converted, without any action on the part of the holder thereof, into the right to receive 0.735 shares of common stock, par value $0.01 per share, of SLB (“SLB Common Stock”), which shares will be duly authorized and validly issued in accordance with applicable laws (the “Equity Consideration”) and, if applicable, cash in lieu of fractional shares. The Merger Agreement contains certain termination rights for each of ChampionX and SLB. In connection with the termination of the Merger Agreement under specified circumstances, including the consummation of a competing acquisition proposal within 12 months of the termination of the Merger Agreement for certain specified reasons, ChampionX would be required to pay SLB a termination fee of $265.4 million. Upon termination of the Merger Agreement under specified circumstances, including the termination (1) by either party if certain Mutual Legal Restraints (as defined below) exist, specified regulatory approvals have not been obtained or if the consummation of the Merger does not occur on or prior to April 2, 2025 (subject to an automatic extension to October 2, 2025 under specified circumstances) and the parties will have satisfied conditions to the Merger (subject to certain exceptions) or (2) by SLB under specified circumstances, SLB would be required to pay ChampionX a termination fee of $326.6 million. Basis of Presentation The accompanying unaudited condensed consolidated financial statements of ChampionX have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission pertaining to interim financial information. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP have been condensed or omitted. Therefore, these financial statements should be read in conjunction with the audited consolidated financial statements, and notes thereto, which are included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Although these estimates are based on management’s best knowledge of current events and actions that we may undertake in the future, actual results may differ from our estimates. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments unless otherwise specified) necessary for a fair statement of our financial condition and results of operations as of and for the periods presented. Revenue, expenses, assets and liabilities can vary during each quarter of the year. Therefore, the results and trends in these financial statements may not be representative of the results that may be expected for the year ending December 31, 2024. Significant Accounting Policies Please refer to “Note 1 – Basis of Presentation and Summary of Significant Accounting Policies” to our consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 for the discussion of our significant accounting policies. New Accounting Standards Issued In November 2023, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2023-07, “Segment Reporting - Improvements to Reportable Segment Disclosures” which requires a public business entity to disclose its significant segment expense categories and amounts for each reportable segment. A significant segment expense is an expense that is significant to the segment, regularly provided to or easily computed from information regularly provided to the chief operating decision maker, and included in the reported measure of segment profit or loss. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods in fiscal years beginning after December 15, 2024, with early adoption permitted. In December 2023, the Financial Accounting Standards Board issued ASU 2023-09, “Improvements to Income Tax Disclosure” |
SEGMENT INFORMATION
SEGMENT INFORMATION | 6 Months Ended |
Jun. 30, 2024 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION Our reporting segments are: • Production Chemical Technologies—provides oil and natural gas production and midstream markets with solutions to manage and control corrosion, oil and water separation, flow assurance, sour gas treatment and a host of water-related issues. • Production & Automation Technologies—designs, manufactures, markets and services a full range of artificial lift equipment, end-to-end digital automation solutions, as well as other production equipment and asset monitoring technologies. Production & Automation Technologies’ products are sold under a collection of brands including Harbison-Fischer, Norris, Alberta Oil Tool, Oil Lift Technology, PCS Ferguson, Pro-Rod, Upco, Unbridled ESP, Norriseal-Wellmark, Quartzdyne, Spirit, Theta, Timberline, Windrock and AL Perform. • Drilling Technologies—designs, manufactures and markets polycrystalline diamond cutters and bearings for use in oil and gas drill bits under the US Synthetic brand. • Reservoir Chemical Technologies—manufactures specialty products that support well stimulation, construction (including drilling and cementing) and remediation needs in the oil and natural gas industry. We refer to our Production Chemical Technologies segment and our Reservoir Chemical Technologies segment collectively as our Chemical Technologies business. Although Reservoir Chemical Technologies is not required to be disclosed separately as a reportable segment based on materiality, management believes the additional information may contribute to a better understanding of the business. Other business activities that do not meet the criteria of an operating segment have been combined into Corporate and other. Corporate and other includes (i) corporate and overhead expenses, and (ii) revenue and costs for activities that are not operating segments. Segment revenue and segment operating profit Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2024 2023 2024 2023 Segment revenue: Production Chemical Technologies $ 569,577 $ 574,302 $ 1,159,685 $ 1,165,986 Production & Automation Technologies 244,487 254,156 497,101 505,704 Drilling Technologies 52,888 57,324 108,094 114,031 Reservoir Chemical Technologies 27,123 23,853 51,828 49,659 Corporate and other (1) (803) 16,965 (1,295) 39,567 Total revenue $ 893,272 $ 926,600 $ 1,815,413 $ 1,874,947 Segment operating profit (loss): Production Chemical Technologies $ 85,388 $ 87,163 $ 173,220 $ 153,477 Production & Automation Technologies 22,207 33,208 50,677 68,000 Drilling Technologies 11,863 12,660 56,265 24,547 Reservoir Chemical Technologies 4,363 2,186 8,109 4,173 Total segment operating profit 123,821 135,217 288,271 250,197 Corporate and other (1) 25,141 12,391 35,900 23,092 Interest expense, net 15,421 14,544 29,356 27,010 Income before income taxes $ 83,259 $ 108,282 $ 223,015 $ 200,095 _______________________ (1) Corporate and other includes costs not directly attributable or allocated to our reportable segments such as overhead and other costs pertaining to corporate executive management and other administrative functions, and the results attributable to our noncontrolling interest. Additionally, the sales and expenses related to the Cross Supply and Product Transfer Agreement with Ecolab, Inc. (“Ecolab”) were included within Corporate and other from June 3, 2020, the date of the merger in which we acquired the Chemical Technologies business, through June 30, 2023. Beginning, July 1, 2023, these sales and expenses are recognized in the Production Chemical Technologies segment. |
REVENUE
REVENUE | 6 Months Ended |
Jun. 30, 2024 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE Our revenue is generated primarily from product sales. Service revenue is generated from providing services to our customers. These services include installation, repair and maintenance, laboratory and logistics services, chemical management services, troubleshooting, reporting, water treatment services, technical advisory assistance, emissions detection and monitoring, and other field services. Lease revenue is derived from rental income of leased production equipment. As our costs are shared across the various revenue categories, cost of goods sold is not tracked separately and is not discretely identifiable. In certain geographical areas, the Company utilizes joint ventures and independent third-party distributors and sales agents to sell and market products and services. Amounts payable to independent third-party distributors and sales agents may fluctuate based on sales and timing of distributor fee payments. For services rendered by such independent third-party distributors and sales agents, the Company records the consideration received on a net basis within product revenue in our condensed consolidated statements of income. Additionally, amounts owed to distributors and sales agents are reported within accrued distributor fees within our condensed consolidated balance sheets. Revenue disaggregated by geography was as follows: Three Months Ended June 30, 2024 (in thousands) Production Chemical Technologies Production & Automation Technologies Drilling Technologies Reservoir Chemical Technologies Corporate and other (1) Total United States $ 261,141 $ 190,953 $ 40,321 $ 12,818 $ — $ 505,233 Latin America 64,263 6,751 124 4,681 — 75,819 Middle East & Africa 93,967 14,715 2,031 7,521 (803) 117,431 Canada 79,374 15,187 4,083 467 — 99,111 Europe 45,985 3,123 5,373 1,173 — 55,654 Asia-Pacific 20,620 1,972 956 459 — 24,007 Australia 4,227 11,786 — 4 — 16,017 Other — — — — — — Total revenue $ 569,577 $ 244,487 $ 52,888 $ 27,123 $ (803) $ 893,272 Three Months Ended June 30, 2023 (in thousands) Production Chemical Technologies Production & Automation Technologies Drilling Technologies Reservoir Chemical Technologies Corporate and other (1) Total United States $ 236,917 $ 197,655 $ 44,233 $ 11,677 $ 7,014 $ 497,496 Latin America 116,083 5,457 — 3,044 752 125,336 Middle East & Africa 81,776 14,756 2,967 7,123 (53) 106,569 Canada 72,403 15,648 2,922 540 7 91,520 Europe 53,415 4,980 6,544 775 2,494 68,208 Asia-Pacific 8,572 3,527 658 692 6,751 20,200 Australia 5,136 12,133 — 2 — 17,271 Other — — — — — — Total revenue $ 574,302 $ 254,156 $ 57,324 $ 23,853 $ 16,965 $ 926,600 ______________________ (1) The sales related to the Cross Supply and Product Transfer Agreement with Ecolab were included within Corporate and other from June 3, 2020 through June 30, 2023. Beginning July 1, 2023, these sales and expenses are recognized in the Production Chemical Technologies segment. Six Months Ended June 30, 2024 (in thousands) Production Chemical Technologies Production & Automation Technologies Drilling Technologies Reservoir Chemical Technologies Corporate and other (1) Total United States $ 503,625 $ 386,620 $ 83,941 $ 26,663 $ — $ 1,000,849 Latin America 186,576 11,076 221 7,965 — 205,838 Middle East & Africa 173,334 29,377 4,279 13,084 (1,295) 218,779 Canada 157,254 33,502 8,406 981 — 200,143 Europe 93,638 8,062 9,760 2,310 — 113,770 Asia-Pacific 35,945 4,311 1,487 821 — 42,564 Australia 9,313 24,153 — 4 — 33,470 Other — — — — — — Total revenue $ 1,159,685 $ 497,101 $ 108,094 $ 51,828 $ (1,295) $ 1,815,413 Six Months Ended June 30, 2023 (in thousands) Production Chemical Technologies Production & Automation Technologies Drilling Technologies Reservoir Chemical Technologies Corporate and other (1) Total United States $ 478,678 $ 390,196 $ 87,193 $ 24,250 $ 20,604 $ 1,000,921 Latin America 240,554 10,145 — 7,012 1,719 259,430 Middle East & Africa 158,763 30,177 5,448 13,860 (438) 207,810 Canada 146,567 36,185 6,689 958 18 190,417 Europe 103,218 9,939 12,704 1,143 5,125 132,129 Asia-Pacific 17,791 5,605 1,995 1,871 12,539 39,801 Australia 11,085 23,457 — 2 — 34,544 Other 9,330 — 2 563 — 9,895 Total revenue $ 1,165,986 $ 505,704 $ 114,031 $ 49,659 $ 39,567 $ 1,874,947 Revenue is attributed to regions based on the location of our direct customer, which in some instances is an intermediary and not necessarily the end user. Contract Balances The beginning and ending contract asset and contract liability balances from contracts with customers were as follows: (in thousands) June 30, 2024 December 31, 2023 Contract assets $ — $ — Contract liabilities - current $ 21,653 $ 27,406 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 6 Months Ended |
Jun. 30, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | INTANGIBLE ASSETS AND GOODWILL Intangible Assets The components of our definite- and indefinite-lived intangible assets were as follows: June 30, 2024 December 31, 2023 (in thousands) Gross Accumulated Net Gross Accumulated Net Definite-lived Customer relationships $ 585,057 $ 451,594 $ 133,463 $ 583,326 $ 438,181 $ 145,145 Unpatented technologies 152,487 85,280 67,207 142,760 75,224 67,536 Trademarks 59,954 41,176 18,778 59,862 39,564 20,298 Patents 35,510 30,196 5,314 36,438 30,664 5,774 833,008 608,246 224,762 822,386 583,633 238,753 Indefinite-lived Trademarks 3,600 — 3,600 3,600 — 3,600 In-process research and development 1,200 — 1,200 1,200 — 1,200 4,800 — 4,800 4,800 — 4,800 Total $ 837,808 $ 608,246 $ 229,562 $ 827,186 $ 583,633 $ 243,553 Goodwill The carrying amount of goodwill, including changes therein, by reportable segment is below: (in thousands) Production Chemical Technologies Production & Automation Technologies Drilling Technologies Reservoir Chemical Technologies Total December 31, 2023 $ 356,558 $ 211,370 $ 101,136 $ — $ 669,064 Acquisitions (1) — 19,056 — — 19,056 Foreign currency translation (3,616) 63 — — (3,553) June 30, 2024 $ 352,942 $ 230,489 $ 101,136 $ — $ 684,567 ______________________ (1) See Note 10—Acquisitions, Divestitures and Sale Leaseback for additional information related to the acquisitions completed during the first quarter of 2024. Goodwill is not subject to amortization but is tested for impairment on an annual basis or more frequently if impairment indicators arise. |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Long-term debt consisted of the following: (in thousands) June 30, 2024 December 31, 2023 2022 Revolving Credit Facility $ — $ — 2022 Term Loan Facility 615,660 618,762 Total 615,660 618,762 Net unamortized discounts and issuance costs (16,589) (18,276) Total long-term debt 599,071 600,486 Current portion of long-term debt (1) (6,203) (6,203) Long-term debt, less current portion $ 592,868 $ 594,283 _______________________ (1) Includes the mandatory amortization payments due within twelve months related to the 2022 Term Loan Facility as of June 30, 2024. On June 7, 2022, we entered into a restated credit agreement (the “Restated Credit Agreement”), which amends and restates the prior credit agreement. The Restated Credit Agreement provides for (i) a $625.0 million seven-year senior secured term loan B facility (the “2022 Term Loan Facility”) and (ii) a five-year senior secured revolving credit facility in an aggregate principal amount of $700.0 million, of which $100.0 million is available for the issuance of letters of credit (the “2022 Revolving Credit Facility,” and, together with the 2022 Term Loan Facility, the “Senior Secured Credit Facility”). Proceeds from future borrowings under the 2022 Revolving Credit Facility are expected to be used for working capital and general corporate purposes. The initial amount drawn under the 2022 Revolving Credit Facility has been repaid. As of June 30, 2024, we had no amounts outstanding under the 2022 Revolving Credit Facility. The 2022 Term Loan Facility matures June 7, 2029 and the 2022 Revolving Credit Facility matures June 7, 2027. The 2022 Term Loan Facility is subject to mandatory amortization payments of 1% per annum of the initial commitment paid quarterly, which began on December 30, 2022. The Senior Secured Credit Facility contains customary representations and warranties, covenants, and events of default for loan facilities of this type. We were in compliance with all covenants as of June 30, 2024. On September 29, 2023, we amended the Restated Credit Agreement to, among other things, reprice the Company’s $620.3 million of existing term loans under the 2022 Term Loan Facility, in connection with which new term loans in the same amount were issued. The new term loans bear interest at a per annum rate of (i) an adjusted SOFR Rate plus 2.75% per annum or (ii) a base rate plus 1.75%. The new term loans may be prepaid at any time without penalty, subject to the payment of customary breakage costs in the case of the SOFR rate loans. On June 29, 2022, the Company executed a five-year amortizing floating-to-fixed interest rate swap to hedge our exposure to increases in variable interest rates on the 2022 Term Loan Facility. This interest rate swap agreement is based on a $300.0 million notional amount for the first three years, reducing to $150.0 million for years four and five. See Note 11—Fair Value Measurements and Note 12—Derivatives and Hedging Transactions for additional information on interest rate swaps. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES The Company is subject to various claims and contingencies related to, among other things, workers’ compensation, general liability (including product liability), automobile claims, health care claims, environmental matters, and lawsuits. We record liabilities where a contingent loss is probable and can be reasonably estimated. If the reasonable estimate of a probable loss is a range, the Company records the most probable estimate of the loss or the minimum amount when no amount within the range is a better estimate than any other amount. In accordance with applicable GAAP, the Company discloses a contingent liability even if the liability is not probable or the amount is not estimable, or both, if there is a reasonable possibility that a material loss may have been incurred. Guarantees and Indemnifications We have provided indemnities in connection with sales of certain businesses and assets, including indemnities for environmental health and safety, tax, and employment matters. We do not have any material liabilities recorded for these indemnifications and are not aware of any claims or other information that would give rise to material payments under such indemnities. As of June 30, 2024 and December 31, 2023, we had $75.5 million and $70.7 million, respectively, of outstanding letters of credit, surety bonds and guarantees, which expire at various dates through 2039. These financial instruments are primarily maintained as security for insurance, warranty, and other performance obligations. Generally, we would only be liable for the amount of these letters of credit, surety bonds, and guarantees in the event of default in the performance of our obligations, the probability of which we believe is remote. Litigation and Environmental Matters The Company is party to various proceedings and claims incidental to its business, including matters arising under provisions relating to the protection of the environment. We review the probable outcome of such proceedings, the costs and expenses reasonably expected to be incurred and accrued to date, and the availability and extent of insurance coverage. We accrue a liability for legal matters that are probable and can be reasonably estimated. If the reasonable estimate of a probable loss is a range, the Company records the most probable estimate of the loss or the minimum amount when no amount within the range is a better estimate than any other amount. While many of these matters involve inherent uncertainty, we believe that the amount of the liability, if any, ultimately incurred with respect to these proceedings and claims will not have a material adverse effect on our consolidated financial position, results of operations or cash flows. Environmental Matters The Company is currently participating in environmental assessments and remediation at approximately 8 locations, the majority of which are in the United States (“U.S.”). Environmental liabilities have been accrued to reflect our best estimate of future costs. Potential insurance reimbursements are not anticipated in the Company’s accruals for environmental liabilities. As of June 30, 2024 and December 31, 2023, environmental liability accruals related to these locations were $5.8 million and $5.9 million, respectively. Prior to the commencement of our operations as an independent publicly traded company in 2018, groundwater contamination was discovered at the Norris Sucker Rods plant site located in Tulsa, Oklahoma. Initial remedial efforts were undertaken at the time of discovery of the contamination and we have since coordinated monitoring and remediation with the Oklahoma Department of Environmental Quality (“ODEQ”). As part of the ongoing long-term remediation process, we contracted an engineering and consulting firm to develop a range of possible additional remedial alternatives in order to accelerate the remediation process and associated cost estimates for the work. In October 2019, we received the firm’s preliminary remedial alternatives for consideration. We have submitted our long-term remediation plan and it was approved by ODEQ. We are now in discussion with ODEQ to finalize a consent order. Because we have not yet finalized the consent order for further remediation at the site and discussions with ODEQ remain ongoing, we cannot fully anticipate the timing, outcome or possible impact of such further remedial activities, financial or otherwise. As a result of the recommendations in the report, we accrued liabilities for these remediation efforts of approximately $2.0 million as of December 31, 2019. Liabilities could increase in the future at such time as we ultimately reach agreement with ODEQ on our remediation plan and such liabilities become probable and can be reasonably estimated; however, there have been no changes to our estimated liability as of June 30, 2024. Matters Related to Deepwater Horizon Incident Response On April 22, 2010, the deepwater drilling platform, the Deepwater Horizon, operated by a subsidiary of BP plc, sank in the Gulf of Mexico after an explosion and fire, resulting in a massive oil spill. Certain entities that are now subsidiaries of ChampionX as a result of the acquisition of the Chemical Technologies business in 2020 (collectively the “COREXIT Defendants”) supplied COREXIT™ 9500, an oil dispersant product listed on the U.S. EPA National Contingency Plan Product Schedule, which was used in the response to the spill. In connection with the provision of COREXIT™ 9500, the COREXIT Defendants were named in several lawsuits. Cases arising out of the Deepwater Horizon accident were administratively transferred and consolidated for pre-trial purposes under In Re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010, Case No. 10-md-02179 in the United States District Court in the Eastern District of Louisiana (E.D. La.) (“MDL 2179”). Claims related to the response to the oil spill were consolidated in a master complaint captioned the “B3 Master Complaint.” In 2011, Transocean Deepwater Drilling, Inc. and its affiliates (the “Transocean Entities”) named the COREXIT Defendants and other unaffiliated companies as first party defendants (In re the Complaint and Petition of Triton Asset Leasing GmbH, et al, MDL No. 2179, Civil Action 10-2771). In April and May 2011, the Transocean Entities, Cameron International Corporation, Halliburton Energy Services, Inc., M-I L.L.C., Weatherford U.S., L.P. and Weatherford International, Inc. (collectively, the “Cross Claimants”) filed cross claims in MDL 2179 against the COREXIT Defendants and other unaffiliated cross defendants. In April and June 2011, in support of its defense of the claims against it, the COREXIT Defendants filed counterclaims against the Cross Claimants. On May 18, 2012, the COREXIT Defendants filed a motion for summary judgment as to the claims in the B3 Master Complaint. On November 28, 2012, the Court granted the COREXIT Defendants’ motion and dismissed with prejudice the claims in the B3 Master Complaint asserted against the COREXIT Defendants. In February 2024, the remaining claims against other defendants in the one pending “B3” case that had asserted claims against the COREXIT Defendants were dismissed and a final judgment was entered. The deadline for that plaintiff to appeal any rulings in that case, including the MDL 2179 Court’s order granting Nalco’s motion for summary judgment, expired on March 11, 2024. The Company intends to vigorously defend these lawsuits and also believes that it has rights to contribution and/or indemnification (including legal expenses) from third parties. However, we cannot predict the outcome of these lawsuits, the involvement it might have in these matters in the future, or the potential for future litigation. |
RESTRUCTURING EXPENSE
RESTRUCTURING EXPENSE | 6 Months Ended |
Jun. 30, 2024 | |
Restructuring and Related Activities [Abstract] | |
RESTRUCTURING EXPENSE | RESTRUCTURING EXPENSE During the second quarter of 2024, management approved a restructuring plan within our Production & Automation Technologies segment and Production Chemical Technologies segment to optimize profitability, which includes the exit of certain products, facility closures, and reducing headcount across the organization to support the remaining business. We expect the completion of all actions under the plan by the third quarter of 2024. Management also approved various restructuring plans in the prior year, which we expect to be completed during 2024. The following table presents the restructuring expense by segment as classified in our condensed consolidated statements of income. Three Months Ended Six Months Ended (in thousands) 2024 2023 2024 2023 Segment restructuring expense (income): Production Chemical Technologies $ 1,947 $ 3,434 $ 1,592 $ 4,578 Production & Automation Technologies 4,984 — 4,984 785 Drilling Technologies — — — — Reservoir Chemical Technologies — 427 — 823 Corporate and other — 99 — 4 Total $ 6,931 $ 3,960 $ 6,576 $ 6,190 Statements of Income classification: Cost of goods and services $ 4,385 $ 1,013 $ 4,385 $ 2,544 Selling, general and administrative expense 2,546 2,947 2,191 3,646 Total $ 6,931 $ 3,960 $ 6,576 $ 6,190 Our liability balance for restructuring expense at June 30, 2024 reflects contract termination costs, employee severance and related benefits initiated during prior periods. The following table details our restructuring accrual activities during the six months ended June 30, 2024: (in thousands) Restructuring Accrual Balance December 31, 2023 $ 13,974 Restructuring charges 6,576 Asset sales and write-offs (3,844) Payments (3,064) June 30, 2024 $ 13,642 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended |
Jun. 30, 2024 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | STOCKHOLDERS' EQUITY Dividends On January 31, 2024, our Board of Directors (“Board”) approved an increase of our regular quarterly cash dividend to $0.095 per share of the Company’s common stock. Our second quarter cash dividend of $0.095 per share was declared on May 16, 2024 and is payable on July 26, 2024, to shareholders of record on July 5, 2024. As a result, we recorded a dividend payable of $18.9 million on our condensed consolidated balance sheet as of June 30, 2024. Subsequent dividend declarations, if any, including the amounts and timing of future dividends, are subject to approval by the Board and will depend on future business conditions, financial conditions, results of operations and other factors. Repurchases |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE A reconciliation of the number of shares used for the basic and diluted earnings per share calculation was as follows: Three Months Ended June 30, Six Months Ended June 30, (in thousands, except per share data) 2024 2023 2024 2023 Net income attributable to ChampionX $ 52,569 $ 95,797 $ 165,492 $ 159,329 Weighted-average number of shares outstanding 190,426 197,034 190,615 197,657 Dilutive effect of stock-based compensation 2,831 3,701 3,125 4,037 Total shares and dilutive securities 193,257 200,735 193,740 201,694 Earnings per share attributable to ChampionX: Basic $ 0.28 $ 0.49 $ 0.87 $ 0.81 Diluted $ 0.27 $ 0.48 $ 0.85 $ 0.79 For all periods presented, the computation of diluted earnings per share excludes awards with an anti-dilutive impact. For the three and six months ended June 30, 2024, the diluted shares include the dilutive impact of equity awards except for approximately nil and 0.1 million shares, respectively, that were excluded because their inclusion would be anti-dilutive. For the three and six months ended June 30, 2023, the diluted shares include the dilutive impact of equity awards except for approximately 1.0 million shares and 0.8 million shares, respectively, that were excluded because their inclusion would be anti-dilutive. |
ACQUISITIONS, DIVESTITURES AND
ACQUISITIONS, DIVESTITURES AND SALE LEASEBACK | 6 Months Ended |
Jun. 30, 2024 | |
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] | |
ACQUISITIONS, DIVESTITURES AND SALE LEASEBACK | ACQUISITIONS, DIVESTITURES AND SALE LEASEBACK Acquisitions OTS Consulting Services LLP (OTS) On January 5, 2024, pursuant to an agreement with OTS Consulting Services LLP (“OTS”), a privately held engineering services company based in Pune, India, we acquired the assets and liabilities relating solely to the services performed by OTS for us prior to the acquisition. OTS specializes in digital transformation and advanced IT solutions. The acquired assets and liabilities are included in our Production & Automation Technologies segment. Under the terms of the agreement, we paid $8.7 million, inclusive of working capital adjustments. As part of our purchase price allocation, we recorded goodwill of $6.4 million. The pro forma effect of this acquisition on revenue and net income has been determined to be immaterial to our financial statements. Artificial Lift Performance Limited (ALP) On February 26, 2024, we acquired Artificial Lift Performance Limited (“ALP”), a provider of advanced analytics solutions for enhancing oil and gas production performance based in Edinburgh, Scotland. These assets and liabilities have been included in our Production & Automation Technologies segment. Under the terms of the agreements, we paid $13.4 million, inclusive of working capital adjustments, with an additional $1.7 million payable on the first anniversary of the closing date, and a maximum earn out potential of $3.0 million over the next two years. As part of our purchase price allocation, we recorded definite-lived intangible assets of $10.4 million which consists of assumed software, trademarks a nd customer relationships and recorded $12.7 million of goodwill, which is inclusive of purchase price accounting adjustments. In addition, we assumed liabilities of $10.9 million, which includes the holdback payment and earn-out consideration. The pro forma effect of this acquisition on revenue and net income has been determined to be immaterial to our financial statements. RMSpumptools Limited (RMS) On July 8, 2024, we completed the acquisition of RMSpumptools Limited, a UK-based company that designs and manufactures highly engineered mechanical and electrical solutions for complex artificial lift applications. The purpose of the acquisition is to create growth opportunities in the artificial lift business internationally. We paid $106.0 million for the acquired assets and liabilities, which will be included in our Production & Automation Technologies segment. Divestitures Russia Due to the deteriorating business conditions in Russia following the Ukraine invasion and the resultant sanctions imposed by the United States, European Union, and United Kingdom, we initiated a plan to dispose of our operations in Russia (the “CT Russia Business”), which is included in our Production Chemical Technologies segment. As a result, the CT Russia Business met the criteria to be classified as held for sale during the second quarter of 2022 and we measured the carrying value of the disposal group to the lower of its carrying value or fair value less costs to sell. We assess the fair value of the CT Russia Business (less any costs to sell) each reporting period that it remains classified as held for sale and report any subsequent changes as an adjustment to the carrying value of the asset or disposal group, as long as the new carrying value does not exceed the carrying value of the asset at the time it was initially classified as held for sale. During the first quarter of 2023, we assessed the fair value less cost to sell the business to be zero, resulting in a $13.0 million pre-tax impairment expense recorded during the three months ended March 31, 2023, which is reflected in loss (gain) on disposal group and sale-leaseback transaction within our condensed consolidated statements of income. There were no charges in the three and six month periods ended June 30, 2024. Sale Leaseback Orem, Utah On March 29, 2024, we entered into a sale-leaseback agreement with an unrelated party involving three buildings in Orem, Utah. Under the arrangement, the property (land and buildings) with a net book value of $14.1 million was sold for $45.5 million and leased back under a twenty year lease agreement. We received cash of $44.3 million, net of closing costs and other fees related to the sale of the property. The lease provides for annual base payments of $3.3 million and expires in March 2044 with an option to extend the term of the lease for one additional seven-year period. The transaction qualifies as a sale |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2024 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair value is defined as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. A hierarchy has been established for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring the most observable inputs be used when available. The hierarchy is broken down into three levels: Level 1 - Inputs are quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities. Level 2 - Inputs include observable inputs other than quoted prices in active markets. Level 3 - Inputs are unobservable inputs for which there is little or no market data available. The carrying amount and the estimated fair value for assets and liabilities measured on a recurring basis are as follows: Carrying Amount (in thousands) Measurement Level June 30, 2024 December 31, 2023 Assets Foreign currency forward contracts Level 2 $ 4,067 $ 6,231 Interest rate swaps Level 2 7,883 5,599 Total $ 11,950 $ 11,830 Liabilities Foreign currency forward contracts Level 2 $ 2,741 $ 5,354 Interest rate swaps Level 2 — — Total $ 2,741 $ 5,354 The carrying value of foreign currency forward contracts is at fair value, which is determined based on foreign currency exchange rates as of the balance sheet date and is classified within Level 2. The primary inputs into the valuation of interest rate swaps are interest yield curves, interest rate volatility, and credit spreads. Our interest rate swaps are classified within Level 2 of the fair value hierarchy, as these significant inputs are corroborated by observable market data. For purposes of fair value disclosure above, derivative values are presented gross. See Note 12—Derivatives and Hedging Transactions for further discussion of gross versus net presentation of the Company’s derivatives. The carrying amounts of cash and cash equivalents, trade receivables, and accounts payable approximate their fair value due to their short-term nature. The fair value of our term loan facility is based on Level 2 quoted market prices for the same or similar debt instruments. The fair value of the revolving line of credit approximates carrying value due to the variable interest rates charged on the borrowings, which reprice frequently (Level 2). The carrying amount and the estimated fair value of long-term debt, including current maturities, held by the Company were: June 30, 2024 December 31, 2023 (in thousands) Carrying Amount Fair Value Carrying Amount Fair Value 2022 Revolving Credit Facility $ — $ — $ — $ — 2022 Term Loan Facility $ 615,660 $ 619,508 $ 618,762 $ 623,402 |
DERIVATIVES AND HEDGING TRANSAC
DERIVATIVES AND HEDGING TRANSACTIONS | 6 Months Ended |
Jun. 30, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES AND HEDGING TRANSACTIONS | DERIVATIVES AND HEDGING TRANSACTIONS The Company uses foreign currency forward contracts to manage risks associated with foreign currency exchange rates. The Company also utilizes floating-to-fixed interest rate swap agreements as cash flow hedges on certain debt to mitigate interest rate risk. The Company does not hold derivative financial instruments of a speculative nature or for trading purposes. Derivative contracts are recorded as assets and liabilities on the balance sheet at fair value. We evaluated the interest rate swap hedge effectiveness and determined it to be perfectly effective. We evaluate foreign currency forward contracts’ hedge effectiveness at contract inception and thereafter on a quarterly basis. If a derivative is no longer expected to be effective, hedge accounting is discontinued. Changes in fair value are recognized immediately in earnings unless the derivative qualifies and is designated as a hedge. Changes in fair value attributable to changes in spot exchange rates for derivative contracts that have been designated as cash flow hedges are recognized in accumulated other comprehensive income (“AOCI”) and reclassified into earnings in the same period the hedged transaction affects earnings and are presented in the same income statement line as the earnings effect of the hedged item. The Company accounts for the interest rate swap agreements as a cash flow hedge, thus the effective portion of gains and losses resulting from changes in fair value are recognized in AOCI and are amortized to interest expense over the term of the respective debt. Cash flows from derivatives are classified in the statement of cash flows in the same category as the cash flows from the items subject to designated hedge or undesignated (economic) hedge relationships. The Company is exposed to credit risk in the event of nonperformance of counterparties for foreign currency forward exchange contracts and interest rate swaps. We monitor our exposure to credit risk by using major banks and financial institutions as counterparties and monitoring their financial condition and credit profile. The Company does not anticipate nonperformance by any of these counterparties, and therefore, recording a valuation allowance against the Company’s derivative balance is not considered necessary. Derivative Positions Summary Certain of the Company’s derivative transactions are subject to master netting arrangements that allow the Company to settle with the same counterparties. These arrangements generally do not call for collateral and as of the applicable dates presented in the following table, no cash collateral had been received or pledged related to the underlying derivatives. We have elected to present our derivative balances on a gross basis on the condensed consolidated balance sheet. The following table summarizes the gross fair value of the Company’s outstanding derivatives and the lines in which they are presented on the condensed consolidated balance sheet. Derivative Assets Derivative Liabilities (in thousands) June 30, 2024 December 31, 2023 June 30, 2024 December 31, 2023 Prepaid expenses and other current assets $ 9,612 $ 11,004 $ — $ — Other non-current assets 2,338 826 — — Accrued expenses and other current liabilities — — 2,741 5,354 $ 11,950 $ 11,830 $ 2,741 $ 5,354 The following table summarizes the notional values of the Company’s outstanding derivatives: (in thousands) June 30, 2024 December 31, 2023 Notional value of foreign currency forward contracts and interest rate swaps $ 1,777,751 $ 892,711 Cash Flow Hedges The Company utilizes foreign currency forward contracts to hedge the effect of foreign currency exchange rate fluctuations on forecasted foreign currency transactions, primarily related to business combinations and inventory purchases. These forward contracts are designated as cash flow hedges. The changes in fair value of these contracts attributable to changes in spot exchange rates are recorded in AOCI until the hedged items affect earnings, at which time the gain or loss is reclassified into the same line item in the condensed consolidated statements of income as the underlying exposure being hedged. The forward points are marked-to-market monthly and recognized in the same line item in the condensed consolidated statements of income as the underlying exposure being hedged. Under interest rate swaps, we agree with other parties to exchange, at specified intervals, the difference between fixed-rate and floating-rate interest amounts calculated by reference to an agreed notional principal amount. Any unrealized gain or loss at the time of settlement will be reclassified to interest expense, where we record the interest expense on the associated debt. Derivatives Not Designated as Hedging Instruments The Company also uses foreign currency forward contracts to offset its exposure to the change in value of certain foreign currency denominated assets and liabilities, primarily receivables and payables, which are remeasured at the end of each period. Although the contracts are effective economic hedges, they are not designated as accounting hedges. Therefore, changes in the value of these derivatives are recognized immediately in earnings, thereby offsetting the current earnings effect of the related foreign currency denominated assets and liabilities. Effect of Derivative Instruments on Income The loss of all derivative instruments recognized is summarized below: Three Months Ended Six Months Ended (in thousands) 2024 2023 2024 2023 Loss (gain) reclassified from AOCI to income on cash flow hedges: Cost of goods and services $ 125 $ (966) $ (313) $ (1,923) Interest expense (1,703) (1,322) (3,417) (2,259) Loss (gain) on derivatives not designated as hedging instruments: Other (income) expense, net (3,824) 906 (2,871) 2,347 Total loss (gain) of derivative instruments $ (5,402) $ (1,382) $ (6,601) $ (1,835) |
INVENTORIES
INVENTORIES | 6 Months Ended |
Jun. 30, 2024 | |
Inventory, Net [Abstract] | |
INVENTORIES | INVENTORIES Inventories consisted of the following: (in thousands) June 30, 2024 December 31, 2023 Raw materials $ 138,941 $ 137,402 Work in progress 19,236 16,915 Finished goods 473,966 445,437 632,143 599,754 Inventory reserve (33,119) (29,081) LIFO adjustments (1) (60,025) (49,124) Inventories, net $ 538,999 $ 521,549 _______________________ (1) Represents the amount by which the current cost of LIFO inventories exceeded their carrying value. |
ACCOUNTS RECEIVABLE FACILITIES
ACCOUNTS RECEIVABLE FACILITIES | 6 Months Ended |
Jun. 30, 2024 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE FACILITIES | ACCOUNTS RECEIVABLE FACILITIES On June 28, 2022, we entered into an uncommitted accounts receivable purchase agreement (the “JPM Accounts Receivable Facility”) with JPMorgan Chase Bank, N.A. as the purchaser. The amount available for sale under the JPM Accounts Receivable Facility fluctuates over time based on the total amount of eligible receivables generated during the normal course of business. A maximum of $160.0 million in receivables may be sold and remain unpaid under the JPM Accounts Receivable Facility at any time. On March 28, 2024, we entered into an uncommitted accounts receivable purchase agreement (the “HSBC Accounts Receivable Facility” and, together with the JPM Accounts Receivable Facility, the “Accounts Receivable Facilities”) with HSBC Bank USA, National Association, as the purchaser. The amount available for sale under the HSBC Accounts Receivable Facility fluctuates over time based on the total amount of eligible receivables generated during the normal course of business. A maximum of CAD $40.0 million or approximately $30.0 million in receivables may be sold and remain unpaid under the HSBC Accounts Receivable Facility at any time. Accounts receivable sold under the JPM Accounts Receivable Facility were $343.3 million for the six months ended June 30, 2024. The accounts receivables sold that remained outstanding under the JPM Accounts Receivable Facility as of June 30, 2024 was $102.4 million. Accounts receivable sold under the HSBC Accounts Receivable Facility were $19.0 million for the six months ended June 30, 2024. The accounts receivables sold that remained outstanding under the HSBC Accounts Receivable Facility as of June 30, 2024 was $18.7 million. During this period, cash receipts from the purchaser at the time of the sale were classified as operating activities in our condensed consolidated statement of cash flows. The difference between the carrying amount of the accounts receivables sold and the sum of the cash received is recorded as a loss on sale of receivables in other income (expense), net in our condensed consolidated statements of income. The loss on sale of accounts receivable was $1.9 million and $3.8 million for the three and six months ended June 30, 2024, respectively, under the JPM Accounts Receivable Facility. The loss on sale of accounts receivable was $0.2 million for the three and six months ended June 30, 2024, respectively, under the HSBC Accounts Receivable Facility. |
SUPPLY CHAIN FINANCE
SUPPLY CHAIN FINANCE | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
SUPPLY CHAIN FINANCE | SUPPLY CHAIN FINANCE We use a supply chain finance program in connection with the purchase of goods, which allows our suppliers to work directly with a third party to provide financing by purchasing their receivables earlier in the payment cycle. We maintain the same contractually agreed upon invoice terms prior to each supplier entering into the program. As of June 30, 2024, we had approximately $36.2 million outstanding under the program, which is included in accounts payable |
CASH FLOW INFORMATION
CASH FLOW INFORMATION | 6 Months Ended |
Jun. 30, 2024 | |
Supplemental Cash Flow Elements [Abstract] | |
CASH FLOW INFORMATION | CASH FLOW INFORMATION Leased Asset Program Our electrical submersible pumping leased asset program is reported in our Production & Automation Technologies segment. At the time of purchase, assets are recorded to inventory and are transferred to property, plant, and equipment when a customer contracts for an asset under our leased asset program. During the six months ended June 30, 2024 and 2023, we transferred $51.8 million and $54.8 million, respectively, of inventory into property, plant, and equipment as a result of assets entering our leased asset program. Expenditures for assets that are placed into our leased asset program expected to be recovered through sale are reported in leased assets in the operating section of our condensed consolidated statements of cash flows. All other capitalizable expenditures for assets that are placed into our leased asset program are classified as capital expenditures in the investing section of our condensed consolidated statements of cash flows. Argentina Blue Chip Swap |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Pay vs Performance Disclosure | ||||
Net income attributable to ChampionX | $ 52,569 | $ 95,797 | $ 165,492 | $ 159,329 |
Insider Trading Arrangements
Insider Trading Arrangements shares in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2024 shares | Jun. 30, 2024 shares | |
Trading Arrangements, by Individual | ||
Material Terms of Trading Arrangement | During the three months ended June 30, 2024, none of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) informed us of the adoption or termination of a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K, except as described in the table below: Name & Title Date Adopted Character of Trading Arrangement (1) Aggregate Number of Shares of Common Stock to be Purchased or Sold Pursuant to Trading Arrangement Duration (2) Other Material Terms Date Terminated Antoine Marcos, Vice President, Corporate Controller and Chief Accounting Officer March 6, 2024 Rule 10b5-1 Trading Arrangement Up to 7,580 shares to be sold December 4, 2024 N/A May 15, 2024 _______________________ (1) Each trading arrangement marked as a “Rule 10b5-1 Trading Arrangement” is intended to satisfy the affirmative defense of Rule 10b5-1(c) of the Exchange Act, (the “Rule”). (2) Each trading arrangement permits transactions through and including the earlier to occur of (i) the completion of all sales of shares subject to the arrangement, (ii) the date listed in the “Duration” column, or (iii) the occurrence of such other termination event as specified in the arrangement. Each trading arrangement marked as a “Rule 10b5-1 Trading Arrangement” only permits transactions upon expiration of the applicable mandatory cooling-off period under the Rule. | |
Rule 10b5-1 Arrangement Adopted | false | |
Non-Rule 10b5-1 Arrangement Adopted | false | |
Non-Rule 10b5-1 Arrangement Terminated | false | |
Antoine Marcos [Member] | ||
Trading Arrangements, by Individual | ||
Name | Antoine Marcos | |
Title | Vice President, Corporate Controller and Chief Accounting Officer | |
Rule 10b5-1 Arrangement Terminated | true | |
Termination Date | May 15, 2024 | |
Aggregate Available | 7,580 | 7,580 |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements of ChampionX have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission pertaining to interim financial information. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP have been condensed or omitted. Therefore, these financial statements should be read in conjunction with the audited consolidated financial statements, and notes thereto, which are included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Although these estimates are based on management’s best knowledge of current events and actions that we may undertake in the future, actual results may differ from our estimates. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments unless otherwise specified) necessary for a fair statement of our financial condition and results of operations as of and for the periods presented. Revenue, expenses, assets and liabilities can vary during each quarter of the year. Therefore, the results and trends in these financial statements may not be representative of the results that may be expected for the year ending December 31, 2024. |
New Accounting Standards Issued | New Accounting Standards Issued In November 2023, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2023-07, “Segment Reporting - Improvements to Reportable Segment Disclosures” which requires a public business entity to disclose its significant segment expense categories and amounts for each reportable segment. A significant segment expense is an expense that is significant to the segment, regularly provided to or easily computed from information regularly provided to the chief operating decision maker, and included in the reported measure of segment profit or loss. The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods in fiscal years beginning after December 15, 2024, with early adoption permitted. In December 2023, the Financial Accounting Standards Board issued ASU 2023-09, “Improvements to Income Tax Disclosure” |
Fair Value Measurements | Fair value is defined as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. A hierarchy has been established for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring the most observable inputs be used when available. The hierarchy is broken down into three levels: Level 1 - Inputs are quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities. Level 2 - Inputs include observable inputs other than quoted prices in active markets. Level 3 - Inputs are unobservable inputs for which there is little or no market data available. |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Segment Reporting [Abstract] | |
Schedule of Segment Revenue and Operating Profit | Segment revenue and segment operating profit Three Months Ended June 30, Six Months Ended June 30, (in thousands) 2024 2023 2024 2023 Segment revenue: Production Chemical Technologies $ 569,577 $ 574,302 $ 1,159,685 $ 1,165,986 Production & Automation Technologies 244,487 254,156 497,101 505,704 Drilling Technologies 52,888 57,324 108,094 114,031 Reservoir Chemical Technologies 27,123 23,853 51,828 49,659 Corporate and other (1) (803) 16,965 (1,295) 39,567 Total revenue $ 893,272 $ 926,600 $ 1,815,413 $ 1,874,947 Segment operating profit (loss): Production Chemical Technologies $ 85,388 $ 87,163 $ 173,220 $ 153,477 Production & Automation Technologies 22,207 33,208 50,677 68,000 Drilling Technologies 11,863 12,660 56,265 24,547 Reservoir Chemical Technologies 4,363 2,186 8,109 4,173 Total segment operating profit 123,821 135,217 288,271 250,197 Corporate and other (1) 25,141 12,391 35,900 23,092 Interest expense, net 15,421 14,544 29,356 27,010 Income before income taxes $ 83,259 $ 108,282 $ 223,015 $ 200,095 _______________________ (1) Corporate and other includes costs not directly attributable or allocated to our reportable segments such as overhead and other costs pertaining to corporate executive management and other administrative functions, and the results attributable to our noncontrolling interest. Additionally, the sales and expenses related to the Cross Supply and Product Transfer Agreement with Ecolab, Inc. (“Ecolab”) were included within Corporate and other from June 3, 2020, the date of the merger in which we acquired the Chemical Technologies business, through June 30, 2023. Beginning, July 1, 2023, these sales and expenses are recognized in the Production Chemical Technologies segment. |
REVENUE (Tables)
REVENUE (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | Revenue disaggregated by geography was as follows: Three Months Ended June 30, 2024 (in thousands) Production Chemical Technologies Production & Automation Technologies Drilling Technologies Reservoir Chemical Technologies Corporate and other (1) Total United States $ 261,141 $ 190,953 $ 40,321 $ 12,818 $ — $ 505,233 Latin America 64,263 6,751 124 4,681 — 75,819 Middle East & Africa 93,967 14,715 2,031 7,521 (803) 117,431 Canada 79,374 15,187 4,083 467 — 99,111 Europe 45,985 3,123 5,373 1,173 — 55,654 Asia-Pacific 20,620 1,972 956 459 — 24,007 Australia 4,227 11,786 — 4 — 16,017 Other — — — — — — Total revenue $ 569,577 $ 244,487 $ 52,888 $ 27,123 $ (803) $ 893,272 Three Months Ended June 30, 2023 (in thousands) Production Chemical Technologies Production & Automation Technologies Drilling Technologies Reservoir Chemical Technologies Corporate and other (1) Total United States $ 236,917 $ 197,655 $ 44,233 $ 11,677 $ 7,014 $ 497,496 Latin America 116,083 5,457 — 3,044 752 125,336 Middle East & Africa 81,776 14,756 2,967 7,123 (53) 106,569 Canada 72,403 15,648 2,922 540 7 91,520 Europe 53,415 4,980 6,544 775 2,494 68,208 Asia-Pacific 8,572 3,527 658 692 6,751 20,200 Australia 5,136 12,133 — 2 — 17,271 Other — — — — — — Total revenue $ 574,302 $ 254,156 $ 57,324 $ 23,853 $ 16,965 $ 926,600 ______________________ (1) The sales related to the Cross Supply and Product Transfer Agreement with Ecolab were included within Corporate and other from June 3, 2020 through June 30, 2023. Beginning July 1, 2023, these sales and expenses are recognized in the Production Chemical Technologies segment. Six Months Ended June 30, 2024 (in thousands) Production Chemical Technologies Production & Automation Technologies Drilling Technologies Reservoir Chemical Technologies Corporate and other (1) Total United States $ 503,625 $ 386,620 $ 83,941 $ 26,663 $ — $ 1,000,849 Latin America 186,576 11,076 221 7,965 — 205,838 Middle East & Africa 173,334 29,377 4,279 13,084 (1,295) 218,779 Canada 157,254 33,502 8,406 981 — 200,143 Europe 93,638 8,062 9,760 2,310 — 113,770 Asia-Pacific 35,945 4,311 1,487 821 — 42,564 Australia 9,313 24,153 — 4 — 33,470 Other — — — — — — Total revenue $ 1,159,685 $ 497,101 $ 108,094 $ 51,828 $ (1,295) $ 1,815,413 Six Months Ended June 30, 2023 (in thousands) Production Chemical Technologies Production & Automation Technologies Drilling Technologies Reservoir Chemical Technologies Corporate and other (1) Total United States $ 478,678 $ 390,196 $ 87,193 $ 24,250 $ 20,604 $ 1,000,921 Latin America 240,554 10,145 — 7,012 1,719 259,430 Middle East & Africa 158,763 30,177 5,448 13,860 (438) 207,810 Canada 146,567 36,185 6,689 958 18 190,417 Europe 103,218 9,939 12,704 1,143 5,125 132,129 Asia-Pacific 17,791 5,605 1,995 1,871 12,539 39,801 Australia 11,085 23,457 — 2 — 34,544 Other 9,330 — 2 563 — 9,895 Total revenue $ 1,165,986 $ 505,704 $ 114,031 $ 49,659 $ 39,567 $ 1,874,947 |
Schedule of Contract Balances | The beginning and ending contract asset and contract liability balances from contracts with customers were as follows: (in thousands) June 30, 2024 December 31, 2023 Contract assets $ — $ — Contract liabilities - current $ 21,653 $ 27,406 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | The components of our definite- and indefinite-lived intangible assets were as follows: June 30, 2024 December 31, 2023 (in thousands) Gross Accumulated Net Gross Accumulated Net Definite-lived Customer relationships $ 585,057 $ 451,594 $ 133,463 $ 583,326 $ 438,181 $ 145,145 Unpatented technologies 152,487 85,280 67,207 142,760 75,224 67,536 Trademarks 59,954 41,176 18,778 59,862 39,564 20,298 Patents 35,510 30,196 5,314 36,438 30,664 5,774 833,008 608,246 224,762 822,386 583,633 238,753 Indefinite-lived Trademarks 3,600 — 3,600 3,600 — 3,600 In-process research and development 1,200 — 1,200 1,200 — 1,200 4,800 — 4,800 4,800 — 4,800 Total $ 837,808 $ 608,246 $ 229,562 $ 827,186 $ 583,633 $ 243,553 |
Schedule of Indefinite-Lived Intangible Assets | The components of our definite- and indefinite-lived intangible assets were as follows: June 30, 2024 December 31, 2023 (in thousands) Gross Accumulated Net Gross Accumulated Net Definite-lived Customer relationships $ 585,057 $ 451,594 $ 133,463 $ 583,326 $ 438,181 $ 145,145 Unpatented technologies 152,487 85,280 67,207 142,760 75,224 67,536 Trademarks 59,954 41,176 18,778 59,862 39,564 20,298 Patents 35,510 30,196 5,314 36,438 30,664 5,774 833,008 608,246 224,762 822,386 583,633 238,753 Indefinite-lived Trademarks 3,600 — 3,600 3,600 — 3,600 In-process research and development 1,200 — 1,200 1,200 — 1,200 4,800 — 4,800 4,800 — 4,800 Total $ 837,808 $ 608,246 $ 229,562 $ 827,186 $ 583,633 $ 243,553 |
Schedule of Goodwill | The carrying amount of goodwill, including changes therein, by reportable segment is below: (in thousands) Production Chemical Technologies Production & Automation Technologies Drilling Technologies Reservoir Chemical Technologies Total December 31, 2023 $ 356,558 $ 211,370 $ 101,136 $ — $ 669,064 Acquisitions (1) — 19,056 — — 19,056 Foreign currency translation (3,616) 63 — — (3,553) June 30, 2024 $ 352,942 $ 230,489 $ 101,136 $ — $ 684,567 ______________________ (1) See Note 10—Acquisitions, Divestitures and Sale Leaseback for additional information related to the acquisitions completed during the first quarter of 2024. |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term debt | Long-term debt consisted of the following: (in thousands) June 30, 2024 December 31, 2023 2022 Revolving Credit Facility $ — $ — 2022 Term Loan Facility 615,660 618,762 Total 615,660 618,762 Net unamortized discounts and issuance costs (16,589) (18,276) Total long-term debt 599,071 600,486 Current portion of long-term debt (1) (6,203) (6,203) Long-term debt, less current portion $ 592,868 $ 594,283 _______________________ (1) Includes the mandatory amortization payments due within twelve months related to the 2022 Term Loan Facility as of June 30, 2024. |
RESTRUCTURING EXPENSE (Tables)
RESTRUCTURING EXPENSE (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring and Other Related Charges | The following table presents the restructuring expense by segment as classified in our condensed consolidated statements of income. Three Months Ended Six Months Ended (in thousands) 2024 2023 2024 2023 Segment restructuring expense (income): Production Chemical Technologies $ 1,947 $ 3,434 $ 1,592 $ 4,578 Production & Automation Technologies 4,984 — 4,984 785 Drilling Technologies — — — — Reservoir Chemical Technologies — 427 — 823 Corporate and other — 99 — 4 Total $ 6,931 $ 3,960 $ 6,576 $ 6,190 Statements of Income classification: Cost of goods and services $ 4,385 $ 1,013 $ 4,385 $ 2,544 Selling, general and administrative expense 2,546 2,947 2,191 3,646 Total $ 6,931 $ 3,960 $ 6,576 $ 6,190 The following table details our restructuring accrual activities during the six months ended June 30, 2024: (in thousands) Restructuring Accrual Balance December 31, 2023 $ 13,974 Restructuring charges 6,576 Asset sales and write-offs (3,844) Payments (3,064) June 30, 2024 $ 13,642 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings (Loss) Per Share, Basic and Diluted | A reconciliation of the number of shares used for the basic and diluted earnings per share calculation was as follows: Three Months Ended June 30, Six Months Ended June 30, (in thousands, except per share data) 2024 2023 2024 2023 Net income attributable to ChampionX $ 52,569 $ 95,797 $ 165,492 $ 159,329 Weighted-average number of shares outstanding 190,426 197,034 190,615 197,657 Dilutive effect of stock-based compensation 2,831 3,701 3,125 4,037 Total shares and dilutive securities 193,257 200,735 193,740 201,694 Earnings per share attributable to ChampionX: Basic $ 0.28 $ 0.49 $ 0.87 $ 0.81 Diluted $ 0.27 $ 0.48 $ 0.85 $ 0.79 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured on Recurring Basis | The carrying amount and the estimated fair value for assets and liabilities measured on a recurring basis are as follows: Carrying Amount (in thousands) Measurement Level June 30, 2024 December 31, 2023 Assets Foreign currency forward contracts Level 2 $ 4,067 $ 6,231 Interest rate swaps Level 2 7,883 5,599 Total $ 11,950 $ 11,830 Liabilities Foreign currency forward contracts Level 2 $ 2,741 $ 5,354 Interest rate swaps Level 2 — — Total $ 2,741 $ 5,354 |
Schedule of Fair Value of Long-Term Debt | The carrying amount and the estimated fair value of long-term debt, including current maturities, held by the Company were: June 30, 2024 December 31, 2023 (in thousands) Carrying Amount Fair Value Carrying Amount Fair Value 2022 Revolving Credit Facility $ — $ — $ — $ — 2022 Term Loan Facility $ 615,660 $ 619,508 $ 618,762 $ 623,402 |
DERIVATIVES AND HEDGING TRANS_2
DERIVATIVES AND HEDGING TRANSACTIONS (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Notional Values of Outstanding Derivatives | The following table summarizes the gross fair value of the Company’s outstanding derivatives and the lines in which they are presented on the condensed consolidated balance sheet. Derivative Assets Derivative Liabilities (in thousands) June 30, 2024 December 31, 2023 June 30, 2024 December 31, 2023 Prepaid expenses and other current assets $ 9,612 $ 11,004 $ — $ — Other non-current assets 2,338 826 — — Accrued expenses and other current liabilities — — 2,741 5,354 $ 11,950 $ 11,830 $ 2,741 $ 5,354 The following table summarizes the notional values of the Company’s outstanding derivatives: (in thousands) June 30, 2024 December 31, 2023 Notional value of foreign currency forward contracts and interest rate swaps $ 1,777,751 $ 892,711 |
Schedule of Loss on Derivative Instruments | The loss of all derivative instruments recognized is summarized below: Three Months Ended Six Months Ended (in thousands) 2024 2023 2024 2023 Loss (gain) reclassified from AOCI to income on cash flow hedges: Cost of goods and services $ 125 $ (966) $ (313) $ (1,923) Interest expense (1,703) (1,322) (3,417) (2,259) Loss (gain) on derivatives not designated as hedging instruments: Other (income) expense, net (3,824) 906 (2,871) 2,347 Total loss (gain) of derivative instruments $ (5,402) $ (1,382) $ (6,601) $ (1,835) |
INVENTORIES (Tables)
INVENTORIES (Tables) | 6 Months Ended |
Jun. 30, 2024 | |
Inventory, Net [Abstract] | |
Components of Inventory | Inventories consisted of the following: (in thousands) June 30, 2024 December 31, 2023 Raw materials $ 138,941 $ 137,402 Work in progress 19,236 16,915 Finished goods 473,966 445,437 632,143 599,754 Inventory reserve (33,119) (29,081) LIFO adjustments (1) (60,025) (49,124) Inventories, net $ 538,999 $ 521,549 _______________________ (1) Represents the amount by which the current cost of LIFO inventories exceeded their carrying value. |
BASIS OF PRESENTATION AND SUM_3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ / shares in Units, $ in Millions | Apr. 02, 2024 | Jun. 30, 2024 | Apr. 03, 2024 | Dec. 31, 2023 |
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||
Merger Agreement | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.01 | |||
Conversion ratio | $ 0.735 | |||
Period for termination fees payable | 12 months | |||
Possible termination fee | $ 265.4 | |||
Merger Agreement | Schlumberger Limited | ||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.01 | |||
Possible termination fee | $ 326.6 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Segment Reporting Information [Line Items] | ||||
Total revenue | $ 893,272 | $ 926,600 | $ 1,815,413 | $ 1,874,947 |
Interest expense, net | 15,421 | 14,544 | 29,356 | 27,010 |
Income before income taxes | 83,259 | 108,282 | 223,015 | 200,095 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Income before income taxes | 123,821 | 135,217 | 288,271 | 250,197 |
Operating Segments | Production Chemical Technologies | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 569,577 | 574,302 | 1,159,685 | 1,165,986 |
Income before income taxes | 85,388 | 87,163 | 173,220 | 153,477 |
Operating Segments | Production & Automation Technologies | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 244,487 | 254,156 | 497,101 | 505,704 |
Income before income taxes | 22,207 | 33,208 | 50,677 | 68,000 |
Operating Segments | Drilling Technologies | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 52,888 | 57,324 | 108,094 | 114,031 |
Income before income taxes | 11,863 | 12,660 | 56,265 | 24,547 |
Operating Segments | Reservoir Chemical Technologies | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | 27,123 | 23,853 | 51,828 | 49,659 |
Income before income taxes | 4,363 | 2,186 | 8,109 | 4,173 |
Corporate and other | ||||
Segment Reporting Information [Line Items] | ||||
Total revenue | (803) | 16,965 | (1,295) | 39,567 |
Income before income taxes | $ 25,141 | $ 12,391 | $ 35,900 | $ 23,092 |
REVENUE - Disaggregation of Rev
REVENUE - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 893,272 | $ 926,600 | $ 1,815,413 | $ 1,874,947 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 505,233 | 497,496 | 1,000,849 | 1,000,921 |
Latin America | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 75,819 | 125,336 | 205,838 | 259,430 |
Middle East & Africa | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 117,431 | 106,569 | 218,779 | 207,810 |
Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 99,111 | 91,520 | 200,143 | 190,417 |
Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 55,654 | 68,208 | 113,770 | 132,129 |
Asia-Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 24,007 | 20,200 | 42,564 | 39,801 |
Australia | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 16,017 | 17,271 | 33,470 | 34,544 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 0 | 0 | 9,895 |
Operating Segments | Production Chemical Technologies | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 569,577 | 574,302 | 1,159,685 | 1,165,986 |
Operating Segments | Production Chemical Technologies | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 261,141 | 236,917 | 503,625 | 478,678 |
Operating Segments | Production Chemical Technologies | Latin America | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 64,263 | 116,083 | 186,576 | 240,554 |
Operating Segments | Production Chemical Technologies | Middle East & Africa | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 93,967 | 81,776 | 173,334 | 158,763 |
Operating Segments | Production Chemical Technologies | Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 79,374 | 72,403 | 157,254 | 146,567 |
Operating Segments | Production Chemical Technologies | Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 45,985 | 53,415 | 93,638 | 103,218 |
Operating Segments | Production Chemical Technologies | Asia-Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 20,620 | 8,572 | 35,945 | 17,791 |
Operating Segments | Production Chemical Technologies | Australia | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 4,227 | 5,136 | 9,313 | 11,085 |
Operating Segments | Production Chemical Technologies | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 0 | 0 | 9,330 |
Operating Segments | Production & Automation Technologies | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 244,487 | 254,156 | 497,101 | 505,704 |
Operating Segments | Production & Automation Technologies | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 190,953 | 197,655 | 386,620 | 390,196 |
Operating Segments | Production & Automation Technologies | Latin America | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 6,751 | 5,457 | 11,076 | 10,145 |
Operating Segments | Production & Automation Technologies | Middle East & Africa | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 14,715 | 14,756 | 29,377 | 30,177 |
Operating Segments | Production & Automation Technologies | Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 15,187 | 15,648 | 33,502 | 36,185 |
Operating Segments | Production & Automation Technologies | Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 3,123 | 4,980 | 8,062 | 9,939 |
Operating Segments | Production & Automation Technologies | Asia-Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 1,972 | 3,527 | 4,311 | 5,605 |
Operating Segments | Production & Automation Technologies | Australia | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 11,786 | 12,133 | 24,153 | 23,457 |
Operating Segments | Production & Automation Technologies | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 0 | 0 | 0 |
Operating Segments | Drilling Technologies | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 52,888 | 57,324 | 108,094 | 114,031 |
Operating Segments | Drilling Technologies | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 40,321 | 44,233 | 83,941 | 87,193 |
Operating Segments | Drilling Technologies | Latin America | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 124 | 0 | 221 | 0 |
Operating Segments | Drilling Technologies | Middle East & Africa | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 2,031 | 2,967 | 4,279 | 5,448 |
Operating Segments | Drilling Technologies | Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 4,083 | 2,922 | 8,406 | 6,689 |
Operating Segments | Drilling Technologies | Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 5,373 | 6,544 | 9,760 | 12,704 |
Operating Segments | Drilling Technologies | Asia-Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 956 | 658 | 1,487 | 1,995 |
Operating Segments | Drilling Technologies | Australia | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 0 | 0 | 0 |
Operating Segments | Drilling Technologies | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 0 | 0 | 2 |
Operating Segments | Reservoir Chemical Technologies | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 27,123 | 23,853 | 51,828 | 49,659 |
Operating Segments | Reservoir Chemical Technologies | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 12,818 | 11,677 | 26,663 | 24,250 |
Operating Segments | Reservoir Chemical Technologies | Latin America | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 4,681 | 3,044 | 7,965 | 7,012 |
Operating Segments | Reservoir Chemical Technologies | Middle East & Africa | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 7,521 | 7,123 | 13,084 | 13,860 |
Operating Segments | Reservoir Chemical Technologies | Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 467 | 540 | 981 | 958 |
Operating Segments | Reservoir Chemical Technologies | Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 1,173 | 775 | 2,310 | 1,143 |
Operating Segments | Reservoir Chemical Technologies | Asia-Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 459 | 692 | 821 | 1,871 |
Operating Segments | Reservoir Chemical Technologies | Australia | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 4 | 2 | 4 | 2 |
Operating Segments | Reservoir Chemical Technologies | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 0 | 0 | 563 |
Corporate and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | (803) | 16,965 | (1,295) | 39,567 |
Corporate and other | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 7,014 | 0 | 20,604 |
Corporate and other | Latin America | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 752 | 0 | 1,719 |
Corporate and other | Middle East & Africa | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | (803) | (53) | (1,295) | (438) |
Corporate and other | Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 7 | 0 | 18 |
Corporate and other | Europe | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 2,494 | 0 | 5,125 |
Corporate and other | Asia-Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 6,751 | 0 | 12,539 |
Corporate and other | Australia | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 0 | 0 | 0 | 0 |
Corporate and other | Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 0 | $ 0 | $ 0 | $ 0 |
REVENUE - Contract Balances (De
REVENUE - Contract Balances (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Revenue from Contract with Customer [Abstract] | ||
Contract assets | $ 0 | $ 0 |
Contract liabilities - current | $ 21,653 | $ 27,406 |
INTANGIBLE ASSETS AND GOODWIL_2
INTANGIBLE ASSETS AND GOODWILL - Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 833,008 | $ 822,386 |
Accumulated Amortization | 608,246 | 583,633 |
Net Carrying Amount | 224,762 | 238,753 |
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 4,800 | 4,800 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Gross Carrying Amount | 837,808 | 827,186 |
Accumulated Amortization | 608,246 | 583,633 |
Net Carrying Amount | 229,562 | 243,553 |
Trademarks | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 3,600 | 3,600 |
In-process research and development | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 1,200 | 1,200 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 585,057 | 583,326 |
Accumulated Amortization | 451,594 | 438,181 |
Net Carrying Amount | 133,463 | 145,145 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Accumulated Amortization | 451,594 | 438,181 |
Unpatented technologies | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 152,487 | 142,760 |
Accumulated Amortization | 85,280 | 75,224 |
Net Carrying Amount | 67,207 | 67,536 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Accumulated Amortization | 85,280 | 75,224 |
Trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 59,954 | 59,862 |
Accumulated Amortization | 41,176 | 39,564 |
Net Carrying Amount | 18,778 | 20,298 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Accumulated Amortization | 41,176 | 39,564 |
Patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 35,510 | 36,438 |
Accumulated Amortization | 30,196 | 30,664 |
Net Carrying Amount | 5,314 | 5,774 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Accumulated Amortization | $ 30,196 | $ 30,664 |
INTANGIBLE ASSETS AND GOODWIL_3
INTANGIBLE ASSETS AND GOODWILL - Goodwill (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2024 USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, beginning of period | $ 669,064 |
Acquisitions | 19,056 |
Foreign currency translation | (3,553) |
Goodwill, end of period | 684,567 |
Production Chemical Technologies | |
Goodwill [Roll Forward] | |
Goodwill, beginning of period | 356,558 |
Acquisitions | 0 |
Foreign currency translation | (3,616) |
Goodwill, end of period | 352,942 |
Production & Automation Technologies | |
Goodwill [Roll Forward] | |
Goodwill, beginning of period | 211,370 |
Acquisitions | 19,056 |
Foreign currency translation | 63 |
Goodwill, end of period | 230,489 |
Drilling Technologies | |
Goodwill [Roll Forward] | |
Goodwill, beginning of period | 101,136 |
Acquisitions | 0 |
Foreign currency translation | 0 |
Goodwill, end of period | 101,136 |
Reservoir Chemical Technologies | |
Goodwill [Roll Forward] | |
Goodwill, beginning of period | 0 |
Acquisitions | 0 |
Foreign currency translation | 0 |
Goodwill, end of period | $ 0 |
DEBT - Long-term Debt (Details)
DEBT - Long-term Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 | Sep. 29, 2023 |
Debt Instrument [Line Items] | |||
Total | $ 615,660 | $ 618,762 | |
Net unamortized discounts and issuance costs | (16,589) | (18,276) | |
Total long-term debt | 599,071 | 600,486 | |
Current portion of long-term debt | (6,203) | (6,203) | |
Long-term debt, less current portion | 592,868 | 594,283 | |
2022 Revolving Credit Facility | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Total | 0 | 0 | |
2022 Term Loan Facility | 2022 Term Loan Facility | |||
Debt Instrument [Line Items] | |||
Total | $ 615,660 | $ 618,762 | $ 620,300 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) - USD ($) | Sep. 29, 2023 | Jun. 29, 2022 | Jun. 07, 2022 | Jun. 30, 2024 | Dec. 31, 2023 |
Debt Instrument [Line Items] | |||||
Carrying amount | $ 615,660,000 | $ 618,762,000 | |||
Interest rate swaps | Designated as Hedging Instrument | |||||
Debt Instrument [Line Items] | |||||
Derivative, term of contract (in years) | 5 years | ||||
Interest Rate Swap, First Three Years | Designated as Hedging Instrument | |||||
Debt Instrument [Line Items] | |||||
Notional value of foreign currency forward contracts and interest rate swaps | $ 300,000,000 | ||||
Interest Rate Swap, Years Four And Five | Designated as Hedging Instrument | |||||
Debt Instrument [Line Items] | |||||
Notional value of foreign currency forward contracts and interest rate swaps | $ 150,000,000 | ||||
2022 Term Loan Facility | 2022 Term Loan Facility | |||||
Debt Instrument [Line Items] | |||||
Principal amount of debt issued | $ 625,000,000 | ||||
Debt instrument, term (in years) | 7 years | ||||
Carrying amount | $ 620,300,000 | 615,660,000 | $ 618,762,000 | ||
Mandatory amortization payment, percent per annum | 1% | ||||
2022 Term Loan Facility | 2022 Term Loan Facility | Secured Overnight Financing Rate (SOFR) | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 2.75% | ||||
2022 Term Loan Facility | 2022 Term Loan Facility | Base Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate | 1.75% | ||||
2022 Revolving Credit Facility | 2022 Revolving Credit Facility | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, term (in years) | 5 years | ||||
Maximum borrowing capacity | $ 700,000,000 | ||||
Carrying amount | $ 0 | ||||
2022 Revolving Credit Facility | 2022 Revolving Credit Facility | Letter of Credit | |||||
Debt Instrument [Line Items] | |||||
Maximum borrowing capacity | $ 100,000,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2024 USD ($) location | Dec. 31, 2023 USD ($) | Feb. 29, 2024 case | Dec. 31, 2019 USD ($) | |
Loss Contingencies [Line Items] | ||||
Outstanding letters of credit | $ 75.5 | $ 70.7 | ||
Environmental loss contingency, noncurrent, statement of financial position, extensible enumeration, not disclosed flag | true | true | ||
Accrued liabilities for remediation | $ 5.8 | $ 5.9 | ||
Environmental Assessments and Remediation | ||||
Loss Contingencies [Line Items] | ||||
Number of locations with environmental matters (in locations) | location | 8 | |||
Oklahoma Department of Environmental Quality | ||||
Loss Contingencies [Line Items] | ||||
Accrued liabilities for remediation | $ 2 | |||
Deepwater Horizon Incident Response | ||||
Loss Contingencies [Line Items] | ||||
Number of pending cases | case | 1 |
RESTRUCTURING EXPENSE - Restruc
RESTRUCTURING EXPENSE - Restructuring and Other Related Charges (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 6,931 | $ 3,960 | $ 6,576 | $ 6,190 |
Cost of goods and services | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 4,385 | 1,013 | 4,385 | 2,544 |
Selling, general and administrative expense | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 2,546 | 2,947 | 2,191 | 3,646 |
Operating Segments | Production Chemical Technologies | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 1,947 | 3,434 | 1,592 | 4,578 |
Operating Segments | Production & Automation Technologies | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 4,984 | 0 | 4,984 | 785 |
Operating Segments | Drilling Technologies | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 0 | 0 | 0 | 0 |
Operating Segments | Reservoir Chemical Technologies | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | 0 | 427 | 0 | 823 |
Corporate and other | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring charges | $ 0 | $ 99 | $ 0 | $ 4 |
RESTRUCTURING EXPENSE - Restr_2
RESTRUCTURING EXPENSE - Restructuring Reserve Rollforward (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2024 USD ($) | |
Restructuring Accrual Balance | |
Beginning balance | $ 13,974 |
Restructuring charges | 6,576 |
Asset sales and write-offs | (3,844) |
Payments | (3,064) |
Ending balance | $ 13,642 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||||||
May 16, 2024 | Jan. 31, 2024 | Jun. 30, 2024 | Mar. 31, 2024 | Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2024 | Oct. 24, 2022 | Mar. 07, 2022 | |
Stockholders' Equity Note [Abstract] | |||||||||
Increase in quarterly cash dividend (in dollars per share) | $ 0.095 | ||||||||
Dividends declared to common shareholders (in dollars per share) | $ 0.095 | $ 0.095 | $ 0.095 | $ 0.085 | $ 0.085 | ||||
Dividends payable | $ 18,900,000 | $ 18,900,000 | |||||||
Authorized amount of stock repurchase | $ 1,500,000,000 | $ 750,000,000 | $ 250,000,000 | ||||||
Common stock repurchased in period (in shares) | 0 | ||||||||
Repurchase and cancellation of common stock (in shares) | 1,611,055 | ||||||||
Repurchase and cancellation of common stock | $ 0 | $ 49,399,000 | $ 51,190,000 | $ 40,427,000 | $ 49,400,000 |
EARNINGS PER SHARE - Reconcilia
EARNINGS PER SHARE - Reconciliation of the Shares Used in EPS Calculation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Earnings Per Share [Abstract] | ||||
Net income attributable to ChampionX | $ 52,569 | $ 95,797 | $ 165,492 | $ 159,329 |
Weighted-average number of shares outstanding (in shares) | 190,426 | 197,034 | 190,615 | 197,657 |
Dilutive effect of stock-based compensation (in shares) | 2,831 | 3,701 | 3,125 | 4,037 |
Total shares and dilutive securities (in shares) | 193,257 | 200,735 | 193,740 | 201,694 |
Earnings per share attributable to ChampionX: | ||||
Basic (in dollars per share) | $ 0.28 | $ 0.49 | $ 0.87 | $ 0.81 |
Diluted (in dollars per share) | $ 0.27 | $ 0.48 | $ 0.85 | $ 0.79 |
EARNINGS PER SHARE - Narrative
EARNINGS PER SHARE - Narrative (Details) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Earnings Per Share [Abstract] | ||||
Potentially diluted securities excluded as anti-dilutive (in shares) | 0 | 1 | 0.1 | 0.8 |
ACQUISITIONS, DIVESTITURES AN_2
ACQUISITIONS, DIVESTITURES AND SALE LEASEBACK (Details) | 3 Months Ended | 6 Months Ended | |||||||
Jul. 08, 2024 USD ($) | Mar. 29, 2024 USD ($) property | Feb. 26, 2024 USD ($) | Jan. 05, 2024 USD ($) | Jun. 30, 2024 USD ($) | Mar. 31, 2023 USD ($) | Jun. 30, 2024 USD ($) | Jun. 30, 2023 USD ($) | Dec. 31, 2023 USD ($) | |
Business Acquisition [Line Items] | |||||||||
Goodwill | $ 684,567,000 | $ 684,567,000 | $ 669,064,000 | ||||||
Number of buildings in sale-leaseback agreement | property | 3 | ||||||||
Sale leaseback transaction, net book value | $ 14,100,000 | ||||||||
Sale leaseback transaction, gross proceeds | $ 45,500,000 | ||||||||
Sale leaseback transaction, lease term | 20 years | ||||||||
Proceeds from sale-leaseback transaction | $ 44,300,000 | 44,292,000 | $ 0 | ||||||
Sale leaseback, annual base payments | $ 3,300,000 | ||||||||
Sale leaseback, term extended | 7 years | ||||||||
Sale leaseback transaction, gain on sale | $ 29,900,000 | ||||||||
Operating lease right-of-use assets | 37,700,000 | 107,329,000 | 107,329,000 | $ 69,561,000 | |||||
Operating lease liabilities | $ 37,700,000 | ||||||||
Disposal Group, Not Discontinued Operations | CT Russia Business | |||||||||
Business Acquisition [Line Items] | |||||||||
Recoverable value on divestiture | $ 0 | ||||||||
Gain (charge) on divestiture | $ 13,000,000 | ||||||||
Asset impairment charges | $ 0 | $ 0 | |||||||
OTS Consulting Services LLP | |||||||||
Business Acquisition [Line Items] | |||||||||
Consideration transferred | $ 8,700,000 | ||||||||
Goodwill | $ 6,400,000 | ||||||||
Artificial Lift Performance Limited | |||||||||
Business Acquisition [Line Items] | |||||||||
Consideration transferred | $ 13,400,000 | ||||||||
Goodwill | 12,700,000 | ||||||||
Earn out | $ 3,000,000 | ||||||||
Earn out term | 2 years | ||||||||
Identifiable intangible assets | $ 10,400,000 | ||||||||
Artificial Lift Performance Limited | Payable on First Anniversary of Closing Date | |||||||||
Business Acquisition [Line Items] | |||||||||
Future payments contingent upon performance | 1,700,000 | ||||||||
Artificial Lift Performance Limited | Holdback Payment and Earn-Out Consideration | |||||||||
Business Acquisition [Line Items] | |||||||||
Future payments contingent upon performance | $ 10,900,000 | ||||||||
RMSpumptools Limited | Subsequent Event | |||||||||
Business Acquisition [Line Items] | |||||||||
Consideration transferred | $ 106,000,000 |
FAIR VALUE MEASUREMENTS - Asset
FAIR VALUE MEASUREMENTS - Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Assets | ||
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Assets | |
Derivative assets | $ 11,950 | $ 11,830 |
Liabilities | ||
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Liabilities | |
Derivative liabilities | $ 2,741 | 5,354 |
Fair Value, Recurring | Level 2 | ||
Assets | ||
Derivative assets | 11,950 | 11,830 |
Liabilities | ||
Derivative liabilities | 2,741 | 5,354 |
Fair Value, Recurring | Foreign currency forward contracts | Level 2 | ||
Assets | ||
Derivative assets | 4,067 | 6,231 |
Liabilities | ||
Derivative liabilities | 2,741 | 5,354 |
Fair Value, Recurring | Interest rate swaps | Level 2 | ||
Assets | ||
Derivative assets | 7,883 | 5,599 |
Liabilities | ||
Derivative liabilities | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - Fair
FAIR VALUE MEASUREMENTS - Fair Value of Long-term Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying Amount | $ 615,660 | $ 618,762 |
Level 2 | 2022 Revolving Credit Facility | 2022 Revolving Credit Facility | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying Amount | 0 | 0 |
Fair Value | 0 | 0 |
Level 2 | Term Loan | 2022 Term Loan Facility | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying Amount | 615,660 | 618,762 |
Fair Value | $ 619,508 | $ 623,402 |
DERIVATIVES AND HEDGING TRANS_3
DERIVATIVES AND HEDGING TRANSACTIONS - Fair Value of Derivative Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Derivative Assets | ||
Derivative Asset, Current, Statement of Financial Position [Extensible Enumeration] | Prepaid expenses and other current assets | Prepaid expenses and other current assets |
Derivative Asset, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other Assets, Noncurrent | Other Assets, Noncurrent |
Derivative asset, current | $ 9,612 | $ 11,004 |
Derivative asset, noncurrent | 2,338 | 826 |
Derivative assets | $ 11,950 | $ 11,830 |
Derivative Liabilities | ||
Derivative Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued expenses and other current liabilities | Accrued expenses and other current liabilities |
Derivative liability, current | $ 2,741 | $ 5,354 |
Derivative liabilities | $ 2,741 | $ 5,354 |
DERIVATIVES AND HEDGING TRANS_4
DERIVATIVES AND HEDGING TRANSACTIONS - Derivative Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Foreign Exchange Forward Contracts and Interest Rate Swap | ||
Derivative [Line Items] | ||
Notional value of foreign currency forward contracts and interest rate swaps | $ 1,777,751 | $ 892,711 |
DERIVATIVES AND HEDGING TRANS_5
DERIVATIVES AND HEDGING TRANSACTIONS - Loss on Derivative Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2024 | Jun. 30, 2023 | Jun. 30, 2024 | Jun. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Total loss (gain) of derivative instruments | $ (5,402) | $ (1,382) | $ (6,601) | $ (1,835) |
Cost of goods and services | Designated as Hedging Instrument | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Total loss (gain) of derivative instruments | 125 | (966) | (313) | (1,923) |
Interest expense | Designated as Hedging Instrument | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Total loss (gain) of derivative instruments | (1,703) | (1,322) | (3,417) | (2,259) |
Other (income) expense, net | Not Designated as Hedging Instrument | ||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||
Total loss (gain) of derivative instruments | $ (3,824) | $ 906 | $ (2,871) | $ 2,347 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | Jun. 30, 2024 | Dec. 31, 2023 |
Inventory, Net [Abstract] | ||
Raw materials | $ 138,941 | $ 137,402 |
Work in progress | 19,236 | 16,915 |
Finished goods | 473,966 | 445,437 |
Subtotal | 632,143 | 599,754 |
Inventory reserve | (33,119) | (29,081) |
LIFO adjustments | (60,025) | (49,124) |
Inventories, net | $ 538,999 | $ 521,549 |
ACCOUNTS RECEIVABLE FACILITIES
ACCOUNTS RECEIVABLE FACILITIES (Details) - Accounts Receivable Held For Sale Under Accounts Receivable Facility $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2024 USD ($) | Jun. 30, 2024 USD ($) | Mar. 28, 2024 USD ($) | Mar. 28, 2024 CAD ($) | Jun. 28, 2022 USD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Maximum accounts receivable that can be sold | $ 30 | $ 40,000,000 | $ 160 | ||
JPMorgan Chase Bank | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Accounts receivable sold | $ 343.3 | ||||
Accounts receivable outstanding | $ 102.4 | 102.4 | |||
Loss on sale of trade receivable | 1.9 | 3.8 | |||
HSBC | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Accounts receivable sold | 19 | ||||
Accounts receivable outstanding | 18.7 | 18.7 | |||
Loss on sale of trade receivable | $ 0.2 | $ 0.2 |
SUPPLY CHAIN FINANCE (Details)
SUPPLY CHAIN FINANCE (Details) $ in Millions | Jun. 30, 2024 USD ($) |
Debt Disclosure [Abstract] | |
Supply chain finance outstanding | $ 36.2 |
Supplier Finance Program, Obligation, Statement of Financial Position [Extensible Enumeration] | Accounts Payable, Current |
CASH FLOW INFORMATION (Details)
CASH FLOW INFORMATION (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2024 | Jun. 30, 2024 | Jun. 30, 2023 | |
Property, Plant and Equipment [Line Items] | |||
Inventory transferred into property, plant, and equipment | $ 51,800 | $ 54,800 | |
Loss on investments | $ 7,168 | $ 0 | |
ARGENTINA | |||
Property, Plant and Equipment [Line Items] | |||
Foreign currency exchange rate, period remeasurement | 27% | 29% | |
Loss on investments | $ 3,100 | $ 7,200 |