NCS Multistage Holdings Inc (NCSM) Q3 2023 Earnings: Revenue Decreases by 22% Amid Market Headwinds
NCSM's total revenues for Q3 2023 were $38.3 million, a decrease of 22% compared to Q3 2022.
Net income for Q3 2023 was $4.4 million, slightly higher than the $3.9 million reported in Q3 2022.
The company's gross profit for Q3 2023 was $15.7 million, or 41% of total revenues.
As of September 30, 2023, NCSM had $11.4 million in cash and $8.3 million in total debt.
On October 30, 2023, NCS Multistage Holdings Inc (NASDAQ:NCSM), a leading provider of highly engineered products and support services for the optimization of oil and natural gas well construction, announced its Q3 2023 results. Despite facing market headwinds and lower activity levels compared to the prior year, the company demonstrated resilient financial performance.
Financial Performance
NCSM reported total revenues of $38.3 million for Q3 2023, marking a 22% decrease compared to the same period in 2022. This decrease was primarily due to lower Canadian and U.S. product sales and services revenues, and lower international services revenues. However, these were partially offset by an increase in international product sales.
Despite the decrease in revenue, the company's gross profit for Q3 2023 was $15.7 million, or 41% of total revenues, compared to $20.5 million, or 42% of total revenues, for Q3 2022. The company's net income for Q3 2023 was $4.4 million, slightly higher than the $3.9 million reported in Q3 2022.
Liquidity and Capital Expenditures
As of September 30, 2023, NCSM had $11.4 million in cash and $8.3 million in total debt, with a borrowing base under the undrawn asset-based revolving credit facility of $19.7 million. The company's net working capital was $60.6 million as of September 30, 2023, compared to $55.2 million as of December 31, 2022.
Outlook
NCSM's CEO, Ryan Hummer, commented on the company's performance, stating,
NCS demonstrated resilient financial performance in the third quarter, despite increasing market headwinds as the U.S. rig count continued to fall and the Canadian rig count unexpectedly turned lower in the third quarter of 2023 as compared to the same period in 2022."
He further added that the company continues to execute its strategy to build upon its leading market positions and capitalize on opportunities in international and offshore markets.
The company expects sequential improvements in revenue in its U.S. and international operations during the fourth quarter, with the most significant increase in the U.S. driven by increases in fracturing systems activity and increased sales at Repeat Precision.
Explore the complete 8-K earnings release (here) from NCS Multistage Holdings Inc for further details.
This article first appeared on GuruFocus.
