CLB - Earnings call transcript Q2 2021

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Operator

Good morning and welcome to the Core Lab Q2 2021 Earnings Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Mr. Larry Bruno, Chairman and CEO of Core Lab. Please go ahead.

Larry Bruno

Ian. Thanks, you Middle good in East, to Africa in Asia-Pacific. the the and and in morning afternoon Americas, Europe, Good good evening and earnings call. We our to welcome to Laboratories most analysts, Core XXXX would employees importantly, quarter all second our like shareholders, of Schreffler, am Investor Gwen Relations. Senior morning, Officer I Core’s Financial and by joined This Vice Hill, President Chris Chief and Core’s of Head divided will be into call six The segments. remarks regarding forward-looking Gwen start by making will statements.

important including will Core’s factors then of have high-level We in comments, performance. a opening QX review some

In tenets will regarding will comments overview review shareholder to three addition, financial Core’s we additional Chris strategies that build shareholder the value. and then value. employs detailed have financial give a the company and long-term

and detailing will operating and Core’s Following as Core’s major as two progress guidance. our deployment review technologies well Chris, continued some will company’s highlighting I of some Gwen then successful segments, provide discussing comments and projects of the on Lab’s worldwide. introduction and Core outlook operations the

We the phone Gwen Q&A the forward-looking now a will then will statements. call to on remarks for open section. turn over I for

Gwen Schreffler

whether company’s factors, obligation projected or of business Before a we we statements. call business during in any as more otherwise. uncertainties conditions, this start in would or This that other results our markets, include events any that prove our I’ll discussion subject forward-looking in Should risks the respects affect include may other estimates outlook. international the to and materialize result information. of statements, are of one forward-looking incorrect, the assumptions risks make These and discussed number no vary Act projections, actual types and forward-looking material update this including statements new of the future any these industry, or the gas filings some or of of from political and may information, revise publicly our a undertake may to those to mention forward-looking statements of oil uncertainties relating conference international XX or that climate morning, should We those outcome.

some For Item a other the and XA as us registration and Annual well statements discussion recent Report foregoing more our risks Form detailed on uncertainties, with of filed reports the in please as the Risk of XX-K AFM. most Factors and see by SEC

most can Our be comments measures GAAP financial I said, the pass include that the found the is results. With will non-GAAP to release financial back included quarter measures directly non-GAAP to announcing also our website. on Reconciliation measures. discussion press second Larry. in comparable Those our

Larry Bruno

Gwen. Thanks,

our by those First, pandemic. thoughts global have affected that remain with of all been the

Brazil, While hit certainly the the levels particularly for Virus-related restrictions there vaccines of of and precautionary widely our highest complications and Indonesia, operating distributed as and causing for during case pandemic demand counts become QX. case network counts expanded measures, Malaysia, their throughout countries oil for logistical during reasons and issues optimism beginning services recover, second are XXXX to in number clients’ global outside are enacted, our and shipments, activities, more as XXXX. A and North the the since and of or unpredictable reenacted across increasing product continues schedules travel such countries travel field even saw gas as quarter still global maintained, India, Kuwait America. lockdowns many hurdles

Core these countries highest fully progress or they QX, at through the pandemic. service near our remains the needs. caseload some Despite experienced still hurdles, over we are clients’ to ready course of levels as have Even the

These deployed and were temporary at that none are the related permanent to in QX. did of have now QX to affected. temporary been last no measures As expected earnings discussed QX in throughout expenses however concluded repairs release, measures freeze our We be current impacts occurred. incur several and have operational facilities winter

expectations revenue, saw time, by Core company Core of pandemic-related Looking execute increased did face energetic to the company sequentially. on nicely XXXX the XXXX, The Core’s its sales leverage continued and financial activity the exceeded greater top having increased Enhancement momentum. to of Description, bottom flow, segment compared compared with show improvement net same performance North in Production Client improved during Lab’s Reservoir strategic activity in quarter project builds and improving international the in the second activity in as at free both reducing debt outpacing EBITDA, objectives and QX. continues the growth America to headwinds segments the EPS and exposure, cash first some to quarter. completions. remains remainder quarter. about continuing ratio line increased sequential delays At increased U.S. its optimistic business international

thank adaptability on, and we and the a also over management and our during them XX of dedication, their needs the financial hard work of review. detailed Before unprecedented and endured past move market. for I their many for thank to in the to to months. I Core’s loyalty all as for Chris prepare personal sacrifices want for team active moment I the more for employees navigate the meeting want now will challenges that we have clients’ turn it

Chris Hill

Thanks, Larry.

our the effective the or last losses gains specifically of the the financial we XX%. assumed quarter, rate and impact gave excluded tax performance call FX any past of calls Before review on and we guidance for an

today for excludes our current gain prior exchange and foreign discussion or periods. any loss accordingly, So,

The land the associated and with income both markets. international products million the $XXX.X U.S. the million prior continuing for from in at looking was quarter. Now, for operations up demand our quarter, energetic primarily strong revenue from is second $XXX.X the XX% increase statement, in almost

in revenue, U.S. winter activity in first momentum quarter. service more Of $XX.X revenue is to land this storm remainder current increase revenue, about the While the of we moderate, The quarter, international the is $XX up for was service disruption million expect the growth the building continue the we expect to the with which quarter. sequentially activity international, for million partially in from for associated caused by X% last XXXX.

activity, tempered increase quarter. quarter to Product strong products from disruptions quarter, the regions and which were North a additional the energetic $XX.X was to Larry America restrictions in for international growth XX% even as land sales, U.S. for demand previous pandemic million growth U.S. tied in stronger in Nice many due However, the perforating the is in outside equally stated resulted and U.S. in the ongoing earlier, the activity and our

were international were orders strong larger quarter. completed the as product Additionally sales some also in

cost for compared services, company services quarter measures in the restoring ex during prior Moving the for put on of to below The just reduction of increase the negatively quarter. is in impacted of XX% was some the in as previously pandemic. items, was XX% cost to of service cost place revenue process temporary the

our we Cost utilization As fully consecutive and of was laboratory improving of four costs progress last restored, and second the into our XX% employee items, last improved further the with XX% in margins has service revenue operational for the and historical improve revenues quarter are recovery and sales, will on ex quarters. quarter, incremental activity norms. from towards trend and

G&A, same to continue period for ex costs compared compared last fixed efficiency $XX.X million grow, quarter sales improve. year. also product $X.X of to to million continue will Year-to-date, As to $X.X quarter $XX the and last G&A of the million was million. items, absorption for the is manufacturing

XX% $X.X to last compared million quarter to XX%. G&A million quarter and for and XXXX, restored employee $XX was have EBIT As has restore our from quarter the Depreciation of also the and we continue timing compensation for items, the amortization progress we for an million, pretty up future to through extent the flat $XX.X representing quarters. which $X.X margin EBIT, levels last ex million quarter. and impact over expense and was

tax of The continue the earnings the the last a rate of effective $X.X operating $X.X tax sensitive Income XX%. quarter, items at and effective of and was on for $XX.X across reflecting expense million. somewhat quarter. income to of be end GAAP in Interest $X.X our debt globe the Our of the ex to million million rate last items, the an quarter expense each for mix from quarter million geographic discrete tax down the long-term quarter. basis decrease at will was to impact the was

continue items, quarter, last continuing $X.XX earnings was to approximately be XX%. approximately $X.X from company’s income the $X.XX from continuing share sequentially XX% we quarter. the million per the Earnings second million quarter. operations, the GAAP XX% the from was rate from to which continuing also quarter ex for operations, is items, effective quarter $X project million, for quarter. last comparable up for of operations, was ex last for tax share Income However, $X.X operations XXXX, continuing per was to quarter. from GAAP up diluted from

receivables the the quarter. to $XX.X million approximately $X on Moving balance and sheet, million were from increased prior

days second the quarter. Inventory XX last quarter product Inventory down for sales. days, to slightly improved from which DSOs million million, continue the have with are quarter. XX $XX.X to last our $XX.X second at approximately increased However, improve turns quarter from ended down

materials lead to less an are remainder to carry longer as of than raw increase mitigate to times however, continue XXXX, we larger previously of and For materials. cost raw help of slightly, we the levels chain the inventories anticipate supply quantities in expected, now decrease to in projecting

reduced cash end. of On $XXX balance debt long-term end the quarter prior sheet, the And our debt quarter. was or from side of was of to decrease $XXX million, a million $X.X considering the net of $XX.X at liability million second the million

of is also and is decreasing. continue X.XX was last leverage anticipated XX, June as X.XX to Our quarter which from ratio down

$XX Currently, the coming capacity retired no due cash million X of borrowing and facility. notes, capacity in XX, comprised excess now our there million $XXX on of will Of is debt and is senior excess on million are using and credit borrowings $XXX these notes. under Our September series facility. over be XXXX

with longer delever continue will to strategy company. We our the term

comparing discipline growth for levels from million, to strict remain the of aligned for flow when cash company’s historical the shareholders will and increase, and quarter the company’s and was levels results, and quarter we capital flow, ability expenditures The beyond. at primarily activity capital generating an to it asset-light initiatives. Looking generated I and Lab cash after of We for to the targeted yield flow expect the on flow free second company $X.X And XXXX in XXXX our models paying capital from its cash with growth free look opportunities marks to assess another flow in particularly million over are generate million to continue cash line will $X.X free $X.X we levels with CapEx to the quarter. expenditures activity $X.X believe free first also to projecting in an activities positive those financial cash ahead XXXX but evaluating our and we and free half This at positive business Core guidance operating be shareholders discounted flow Gwen Core million. to as in anticipate would and a of cash growth model, cash remainder up CapEx turn metric outlook. cash utilize our continue continues while will for important now is period. who of improve was valuations. second with continue quarter, update opportunities. also XXXX, will for for where

Gwen Schreffler

you, Thank Chris.

XXXX, a and company invested maximizing generating while focus capital. For cash execute with to debt the of on strategic will flow net free the remainder continue plan return our reducing on

that to and invest of and needs innovation The on include of our growth the in the capabilities with technologies solve well as These the expanding meet capabilities. company’s liquidity clients in opportunities. intelligence we foundation Additionally, continue its machine to company strategic in targeted, Core’s to invest our with transformation proprietary learning, problems client-driven to positioned capitalize part technologies. digital ample focus, are which databases, artificial along will global Core’s of remains aim XXXX both

With onset of the variants market continued COVID-XX the and slowed. of economic rapid reopening has pace disruptions,

However, throughout our optimistic we of remainder opportunities about the remain growth XXXX.

and development U.S. industry build progress, of to As and offshore oil strong continues recovery crude continue international to remain in of leading oil which investment the long the crude having commodity oil of growing support crude momentum the prices, moderately demand an more crude international the lack heavy our oil markets to and circumstances international term. international activity over contract, mid- continues the of to indicators With for projects. increasing a in than to These active in are international rig count equipment under resulting crude revenue we oil oilfield increase international a exposed are on coming cycle. XX% and activity, market energy

revenue fluid with growth and the in reservoir As second be $XXX opportunities margins South on million into to Middle half and a land particular items, realizes emerge, field focus opportunity. second need East. operating from market XXXX quarter activity Reservoir additional of provides a the Mexico of to million, projects modestly ex Description rock development Expansion to and and margin, of level, to beyond Considering $XX quarter revenue the the activity international sample third improvement international the range drilled from company the approximately project for and incremental wells we U.S. Atlantic projected before margins, and operating to of the income of with $XXX yielding XX% million million XX%, to grow XX%. the $XX

and in to will in As to growth be international are directly existing we double-digit our quarter cost the returning outlook related reinstated expanding projects temporarily into activity revenue. costs based and stated workflows and activity incremental of are opportunities restored, Once for XXXX as costs operations we third quarter third employee compared third normal company XXXX improving during in quarter impacted. $X.XX these is guidance, levels second The the losses XXXX, third gains market quarter throughout expected our will margins April remainder improve projections to margin growth financial expect to historical company’s the as excludes internationally. structure, fully modestly the XXXX represents and better. foreign and Core’s are $X.XX. to performance for Core’s well new client penetration, to see XXXX. when XXXX particularly exchange. performance, as performance summary, incremental approximately EPS long-term or quarter In underlying guidance company’s on is

guidance XXXX an assumes Third tax of XX%. quarter also effective rate

turn will I Now Larry. it back to

Larry Bruno

Thanks, Gwen.

integrity clients very success challenges. foundation been to our Lab’s current global Core the The superior First, solutions, visible of has to the and like I’d our thank is team our servicing for employees clients. collective service dedication innovative team’s providing and of during to

for to X.X% sequentially. first the Turning Reservoir million, revenue up came in quarter, Description, at $XX.X

to impacted in income have slower Description’s operating far. at linear directional were temporary pandemic-related is continue of historically reinstating as thus and on efficiencies. negatively operational changes weigh nature the However, measures pace client projects of By progressed Reservoir control less margins activity. company performance than and anticipated and has process the International lagged the delays the in a cost project business,

contracted time many struggled when time for many Looking the back industry full to maintain to XXXX, at sharply over averaged year and Reservoir oilfield companies at profitability. a – Description XX% margins a when service industry activity

early industry direct recovers, say, As Reservoir slowly Description more well activity will than, and to exposure respond oilfield client spending. service other with construction cycle companies

see ahead, next harbinger will – Reservoir several we landscape play count throughout look we a As Description, over and growing international that the we rig for project the that will an of improving XXXX. as trend quarters a out

highlights. operational Now to some

rock laboratory Namibia. proprietary Lab, allows as such assess this to reservoir see for experts predominantly Core to and to of technologies, quarter, thick are Kavango of structure targets continued proprietary prospective Lab’s sedimentary service, in capture in samples high RAPIDZoom expansive scientists Also assisting immediate involved all from project be and marine of for electric while cores program the is very relationships, onshore on opportunities in engaged Kavango under During systems. these conventional analytical oil a quarter ReconAfrica for improved was electrical properties of working XXXX, properties the laboratory also Core’s Core analysis downhole Africa second storage. remote allows includes of in potential Core sedimentary both Lab storage Reconnaissance which related at expedited Core in lithology, their opportunities the the Lab and core at area pleased The evaluation project strata. The is locations. program Basin number reservoirs interval wells second of to the of collaboratively basin. on growing patented cores leveraging resolution, native-state a Northeastern the assessment the details examine the evaluating in direction in ReconAfrica in Core’s testing, logs and provide place. revealing from technical stratigraphic identify Energy and this laboratory over and the Ltd, RAPIDZoom exploratory to this to Basin calibration carbon

geologic container that reactions between the form determining rocks with occur storage rock. form systems that passes Core these flow COX tasked also the as and stratigraphic Specifically, the the the the injected the the pore the as the the seal evaluating attributes COX well or rock is of include well on lid as the that efficiencies rocks container. as as of it through of

evaluated present in Using for COX interaction hydrocarbons and are injection reservoirs, opportunities client of oil needs between COX miscibility in the In of storage are the Lab to In depleted physical technologies, be fluid production place needed between crude opportunities. with injection pores is where and the identify the rock, or assess and an Core depleted the emerging This and that tests Western that remaining properties will in determine by laboratory be example on measurements Core the opportunity. Core project potential the impact direct the fluid oil economic EOR perhaps testing hydrocarbons that a storage for resulting will subsurface impairment. capture to part are the will laboratory of of if hydrocarbon an Lab. positively this rock capture brines all and oil present of in COX opportunity, and carbon causing storage the programs, is precipitation any is just EOR in reactivity testing. proprietary opportunities injected determining addition, COX Canada. laboratory in one system evaluating essential or This enhanced assessing carbon of oil the in flooding COX formation as production core reservoir and/or such injected COX on and negatively order to recovery crude asphaltene is the currently feasibility present a are the oil impact permeability partially rocks, impact

company’s Moving Production help for XXX% in their diagnostics quarter $XX.X up customers basis where Lab’s Revenue now up over X.X% completion was the projections. Production Operating energetic to up Enhancement and XXXX, sequentially. XX% income Enhancement in margins both Operating sequentially, quarter over points sequentially. exceeding second optimize Core well over completions. systems XXX strengths at for million, of million, were $X.X second ‘XX came

lower a can time-intensive process predetermined, need XXXX, of expressed horizontal of This a quarter to new a failure system. saving second is a was a Wave injection the cost uses Utilizing downhole trigger space a consumables, hardwired Pulse Wave to operators client of trips. injection our of of XX to The Wave multiple the thus and experts. trigger making existing communication unevenly effectiveness types By and one the of multiple configurations guns internal a market guns, using of hydrocarbon was Core create plans perforating have live rig XXXX, offerings technologies During in would of with reliability. lead the the perforating currently stream. aim the Lab continuous the Pulse complex resulted The expand perforations well. efficiencies. between requiring extended energetic need of to reduced use inert downhole varying for to is Pulse and The to client lower system future trip. technology. was times the system client the to with annular are cornerstone rig of used new, is of tuned the unique gun. Wave packs second innovative energy log, density Core Stay the acceptance being the quarter that assess entry second Lab client-driven for in In multiple diagnostic company’s may to the stages appreciate proprietary approach, was producing very Pulse the the to potentially traditional on pack, Also interval. Core’s Core’s just gun system, minor space to pipeline wells. quarter by using for expanding series more the even gravel by XXXX, decided using is screen of well from pack. log, risk quality a details of and, success. rate, of completion reserve gravel well’s detect the a above team. would production. in Lab expensive a that on filled which to client have formation energetic minimizing identified a services slowly, developed PACKSCAN After the during which competence high-resolution in anomalies. engineers operational development erosion method the diagnostic now wells of across order offshore of the bring void project recommended the The concludes used PACKSCAN the your an and a live team was control its time. complete horizontal will very up tool our are for led Core failure as planned technology injection void of standard loaded in proprietary were often that Pulse feet maximize formation pack deployed with with gravel place that South PACKSCAN the participation, Wave data-driven charges in live gravel call failure. open-hole saw performed technology gravel display. Pulse assess Pulse the annular in questions. The were We generate ultimately, production measures transfer goal Traditionally, Core’s PACKSCAN would and Core’s producing better is developed guns a Core’s place completion offshore plus bring a the Based fines reviewing by to wells were sequentially production and to To In density the perforating open a annular for to eliminated guns its pack gravel operators on many pack. to complete the onto stabilize completion. between Core well on at an gravel the of spaced Wave pack. guns Atlantic tool for pack from enable XX% per single the points. recommendation Wave of in satisfied the to relative unevenly These the on That reperforating the XXX Pulse the cost-efficient Wave technology each reliability They that and potential operation operator the intervals environments, screen be effectiveness margin assessing XXX the to an Ian The high internal review. solutions ample perforation this gravel connections over the gun-to-gun in with

Operator

looks [Operator your of question Please Connor Stanley. Instructions] first like from It comes Lynagh proceed. Morgan

Connor Lynagh

about more a but – say activity this well about you going a this structural guidance cycle? for rate fairly providers you bit like you’re should think things you’re to I Thanks. good because growth people some explicit maybe talk should at about at a Would basis? of on that a long-term wanted of a is driver bit at high-level there. you a of Do the grow higher out lag, side large-cap Reservoir think gotten wanted or think curious, growth the Description. to talk it’s is I’m the some Yes. framework to construction from Just muted big to? morning. there. of that. how similar alluding think least investors how I We’ve international Obviously, estimates about service

Larry Bruno

industry try macro of look It’s sort some the that out. hey, we and bat. to kind gets in to often guys at get should trends into same be from segment of And that question. at heavy say, to good of the of easy bellwethers pace. message everybody Reservoir just get have in its Connor, to our Yes. play And metal before it’s just business moving Description the turn the the

try rate to Description Core – say way saw the tend lag of be will then would points, And comes we to back saw And of a the you we on cycle. when we then like will when way construction hopefully the inevitably what many, would out goes side further few industry we will will say years is or a eventually go basis downturn, at hundred even last which I many growth business. it Lab did to So above, to of we year, the by historically, that up. catch the the – into lag industry clarify last Reservoir as Then and will down from I we the is just will year. tend now, well the to

So the I behind us think well well well cycle. will we to lag up carry perspective then the in rate is catch we’re eventually construction, the should that growth going exceed and construction, and next of the into

Connor Lynagh

production related Got it. One is guys producing That’s being you of context. have different bit portion offline around, fields. producing to I helpful about thing large previously time that, a fields. R&D of And this in guess, bit talked is historically a obviously, there a fair

revenue a curious, of to sort I’m that the significant point producing lead fields those portion of fine there maybe seen is guess, too downdraft putting you’ve So on that or a related should is that’s I it? that

Larry Bruno

No.

And it going seeing was it’s in of next. the still that’s the hard Asia where right where I for had shut to predict mean weeks office. country I mean out into are of think that because clients the Pacific have basically lockdown. up a way. put we to couple large we clients situations pop their you’re I office

– that’s to unpredictable. going that’s been so And

to next. to where the us would – from into like. or that And As going operation as lands – pop slip linear much trying pandemic industry it’s the to or sector, section covering the up as next hard it’s not part think we where linear are is oil recovery quarter. And for may manage any an we in whether unpredictability not the next us following the as week have you’re as of financial is the of a going nearly the manager month projects a happen

unevenness expansion project an put it’s is guess, I the – of to best So or just progression, progression. way it,

Connor Lynagh

Okay, will back. very I much. thank it turn you

Larry Bruno

Connor. Thanks,

Operator

from proceed. Your next John, please John Daniel of question Simmons. comes

John Daniel

Simmons. longer No you. Thank at

oil Africa I’m always are you about on on some quick opportunity just question gas Basin was – because would the remember, helpful? the color that ago, there Kavango curious, you opportunity? I’m we in would very North So, new be elaborate Years just America. to and if and introduce Dave if not could on you offshore a excitement for this when current or shale well development, just any see but on versed

Larry Bruno

Yes.

to details. good of So to is the – for for John, What of opportunity this horizons sedimentary talk is this at or productive answer the is a normal our the that onshore the it’s best and any variety on though lot going I details is I’m has it’s a to play for a good Core Lab’s can prospect, to friends this go – ReconAfrica prospective – intriguing on traps. friends basin of got very say default

as lot I thick a to with go on them. that’s through will far sedimentary, things mostly So, big be and And glad helping it’s But section of a you direct of to that ReconAfrica. and as pick are we a big, marine strata, basin there. to

John Daniel

existing the is what’s And set? for it the it two Was first have just recently? your got cannibalize more quick run of of it products? potentially I Pulse it? you, Wave. on any And then product? Is this the widespread just opportunity this ones sort does of Okay. was How –

Larry Bruno

releases last No. couple we talked in of the about have prior It’s years. – over it back going

live to people inert guns of bunch them. sections is I between a than rather of of advantage of starting having guns a think tubing we what connections between with are the are series recognize seeing

that assembly much occur where real in recompletion, there uneven is put time so in together advantage And we that a as see particularly that might that all is a better. the spacing to

is we get high the, it, links rig many so call consumable of potential perforating the all the lower, the having the downhole and weak time efficiency in costs without are lower, strength. So, very connections

So, we as is anything don’t for big all a missing – the guns, not us. of cannibalizing is system inert see out this that deal that’s in

guns. live of to to connection components between are you allows going The do buy buy And need so all work. guns, have unreliable still Pulse to with charges, that just still have system other Wave make to all that still the you the to sort that

I lot big is growth a of rather And story happened would think of than ahead part But there already. for what’s say so opportunities the us of still I that is us.

John Daniel

picture an that one thus Are early, you you. QX last the people your just late year a American And normal but the Thank North see we know big for question. you potentially more just I dip do is thoughts? it’s see Okay. in prepare of or this seasonality, next year, a this And – relates acceleration camp towards operations. sort just your as then

Larry Bruno

Yes.

is the getting there for a technology. I right clients frac from different a we Having by clients extra is is year from What the line pay X for been technologically years, XX, a have end a answering Christmas tend are holiday. XX maybe different our brand seeing be the think okay, are XX mixes, for bit start I that the willing are So, now, recognizing of would to our of, client which some to frac a we name that not time. up feedback more the of – holiday, and focused, that it’s at that always bit clients, but point players around for are X tendency this

We over many of has like there let’s year, of that the a many, or happen rig, there at that year. weeks the last years. over to any reason part delay would again. wouldn’t it or something next is just expect don’t to why is play I think are missing the I this kick a couple out

depending there, weather in bit news growth you You continuing. are. think here, of see modest where we sometimes from the good throw I a on But is, little too,

it year I overall November quarter really brakes activity. holidays stable up, on time it, fourth put in and the showed unlikely. a – call have QX frac when not the the we I had more the But quarter do be rollovers, little October, than in a will think think late

John Daniel

Okay. much. very Thank you

Larry Bruno

John. Okay,

Operator

from Mike [Operator proceed. Bank next Instructions] Our Sabella, America. question Please of comes

Mike Sabella

Hey, good morning everyone.

Gwen Schreffler

Mike. Hi

Mike Sabella

segment this XQ the level corporate it goes expecting if like XX% of some just assumes, can to some what quoted as area beyond in sort and pretty of in So, costs start up it second assume would the we these to commentary noise Are we you came looks kind – in has or that has levels. the the decent I the all know we year back we looks normal XX% in at been back the just of other And incrementals the could alluded half see to implied you strong first pick that incrementals to segment that where back guide an of some the at the still incrementals half. here level now near-term?

Chris Hill

that’s of typically was some quarter not observation. of yes, forecast the come through. underlying directly in Mike, that usually operations. And to Those that is a a tied good did Chris. second And not We income. other have do are Yes. are the benefit this that to things sort Hi we handful

level at which these at the the zero good So, at we temporary will in and we in. right respect segment pace talked of a what with kind I dictate in costs, you other employee so cost are up the what sort those take that. in the coming that the pace quarter that was to And going and were to to which the little of in for comes picks a would incrementals start income several sort on at higher than we are assuming With the company quarter, restore of kind activity level, do forecast back sort of us incrementally. to about saying, G&A bit net timing, that’s that the a roll but other think it line of the had that observation can total sort last of comment quarters second measures your

is employees start a for third to pressure of we as That of in is quarter. get costs bring loaded. incrementals cost these fully kind that on to and back So, of little downward still some and other putting the the play of bit sort

the talked XX% that get see further turn sort back plus. be to you we normal, we XX% us more And As to traditional recovery, will that, about can a have of little incremental. into

to more would later. that say see little start a that’s will It in you bit could start really So, XXXX. pick I up in to QX, but

Mike Sabella

I not. and they really in-house you or – was if Description. kind do looking I And update the said pattern Have in what Thanks. that could it. in case? know maybe your of back kind and they past, an #X noticed customer Got Is maybe this competitor give like hoping you is on Reservoir any have landscape are own the the just the competitive keep of us step work you down? we their looks it’s then still cost change to in customer as

Larry Bruno

just it. decades that been during farm eliminate capabilities to for has need the testing would – over here, I change. major when laboratory No and reiterate progression they down cycles to companies out internal it

landscape anything, time. has work through changes projects our no And having think less trend that if for direction the And has so that been It’s see continuing. us continued are with this has don’t into that our of downsized change that in-housing the that manage cycle. laboratories sets more We next major a progression are nicely activity very and internal It’s at an just of our simply Description. there. to have way move we conversations clients but on their is times, Reservoir in in as And any companies in-housing we work some No over frustrating cycle. pace with there toward up whatsoever. been. through of There historically

Mike Sabella

everyone. Thanks Understood.

Larry Bruno

Thanks Mike.

Gwen Schreffler

Mike. Thanks

Larry Bruno

here, Okay. second into levels pretty to can Core’s for we operational position I activity company of and guess here. XXXX. throughout improving it’s client wrap the I up summary, I XXXX half so busy think guess, a earnings leadership the release continues In morning

are still to the operational opportunities uncertainties there While many ahead. in mid-term, are near there

to technologically been our their and reservoir The and returns client-focused free optimization capital. invested never focused optimize oilfield in remain client focused company company reservoirs on to global have needs. technologically We and address positioned operationally sector. uniquely advanced, will generating better We remain the most on service evolving or help base their are cash the

In shareholders near-term, will value introduction driven technologies free Core via to growth the addition to market cash its dividends, In penetration. opportunities, of to bring quarterly new strengthen by use and continue problem-solving balance our we will to sheet. our the both

of analysts the team and thank and in give made Board of that a shareholders Core So results have Lab. possible. all appreciate that we management the Laboratories executive to these The our employees special Core closing, worldwide our thanks cover and

are continuing with We be to the achievements. proud associated

our So, spending us, now. for thanks Goodbye and time update. for forward look next we with to

Operator

you for attending has presentation. today’s now concluded. conference The Thank

You may now disconnect.

Core Laboratories (CLB) 29 Jul 212021 Q2 Earnings call transcript