First Quarter Results Total revenues of $43.9 million, a 1% year-over-year increase and a 24% increase compared to the fourth quarter of 2023 Net income of $2.1 million and earnings per diluted share of $0.82, compared to net loss of $(15.0) million and loss per share of $(6.10) in the same quarter of 2023 Adjusted net income of $2.5 million and adjusted earnings per diluted share of $0.99, compared to adjusted net income of $1.2 million and adjusted earnings per diluted share of $0.50 in the first quarter of 2023 Adjusted EBITDA of $6.1 million, an increase of $1.2 million from the first quarter of 2023   Adjusted EBITDA margin of 14%, compared to 11% in the first quarter of 2023 $14.0 million in cash and $8.9 million of total debt as of March 31, 2024 HOUSTON, May 01, 2024 (GLOBE NEWSWIRE) -- NCS Multistage Holdings, Inc. (NASDAQ:NCSM) (the "Company," "NCS," "we" or "us"), a leading provider of highly engineered products and support services that facilitate the optimization of oil and natural gas well construction, well completions and field development strategies, today announced its results for the quarter ended March 31, 2024. Financial Review Total revenues were $43.9 million for the quarter ended March 31, 2024 as compared to $43.6 million for the first quarter of 2023. This increase reflects higher Canadian and international product sales and services revenues, partially offset by a decrease in U.S. product sales and services revenues. The overall increase was primarily related to higher frac service revenues in Canada and product sales in the North Sea. These results were partially offset by lower activity levels, particularly in the United States, compared to the prior period. The average rig count in the United States decreased in the first quarter of 2024 by 19%, compared to the same period in 2023, while the average rig count in Canada decreased by only 6%. Sales of our products in the United States continue to be affected by lower natural gas prices, which had a negative impact on customer activity levels.  Compared to the fourth quarter of 2023, total revenues increased by 24%, with increases of 27% in Canada, 10% in the United States and 86% in the international market, with the total sequential increase primarily related to favorable customer activity levels in Canada, which is subject to seasonality, and frac systems sales to a customer in the North Sea. Gross profit was $17.0 million, or a gross margin of 39%, for the first quarter of 2024, compared to $18.0 million, or 41%, for the first quarter of 2023. Gross margin for 2024 reflects increases in product costs driven by historical increases in the cost of steel and continued labor wage inflation. Adjusted gross profit, which we define as total revenues less total cost of sales, exclusive of depreciation and amortization ("DD&A"), was $17.6 million, or an adjusted gross margin of 40%, for the first quarter of 2024, compared to $18.5 million, or 43%, for the first quarter of 2023. Selling, general and administrative ("SG&A") expenses totaled $13.8 million for the first quarter of 2024, a decrease of $2.3 million compared to the same period in 2023. This decrease in expense reflects the benefit of cost-saving measures implemented through our restructuring efforts in 2023, as well as a decline in relative annual incentive bonus accruals year-over-year of $0.6 million and lower professional fees, share-based compensation and insurance expense of $0.7 million, $0.4 million, and $0.2 million, respectively. Other income was $1.1 million for the first quarter of 2024 compared to $0.3 million for the first quarter of 2023. This change in other income primarily relates to an increase in royalty income from licenses and the benefit from a profit share associated with our technical services and assistance agreement with our local Oman partner.  Net income was $2.1 million, or $0.82 per diluted share, for the quarter ended March 31, 2024 compared to net loss of $(15.0) million, or $(6.10) per share for the quarter ended March 31, 2023. Our net loss for the first quarter of 2023 was impacted by a $17.5 million litigation provision associated with a jury verdict in Texas issued against us in early May 2023. In December 2023, we settled the matter where the insurance carrier agreed to pay the mutually-agreed settlement amounts to the plaintiff in an amount within insurance coverage limits, with no cash impact to NCS. The settlement was paid in January 2024.  Adjusted EBITDA was $6.1 million for the quarter ended March 31, 2024, an increase of $1.2 million compared to the same period a year ago. This improvement is primarily the result of lower SG&A expenses and an increase in other income partially offset by lower gross profit. Our resulting Adjusted EBITDA margin of 14% for the quarter ended March 31, 2024 improved from 11% in the same period a year ago. Cash flow from operating activities for the three months ended March 31, 2024 was a use of $(1.9) million, a $0.3 million change compared to cash used for the same period in 2023. For the three months ended March 31, 2024, free cash flow, less distributions to non-controlling interest, was a use of cash of $(2.5) million compared to a use of cash of $(2.0) million for the same period in 2023. The overall decline in free cash flow was largely attributed to a distribution to our non-controlling interest and an increase in our net working capital. The increase in our net working capital was primarily related to an increase in our accounts receivable, partially offset by a decline in our inventory balances and an increase in our accounts payable. Liquidity and Capital Expenditures As of March 31, 2024, NCS had $14.0 million in cash and $8.9 million in total debt, and a borrowing base under the undrawn asset-based revolving credit facility ("ABL Facility") of $20.4 million. Our working capital, defined as current assets minus current liabilities, was $73.7 million and $71.2 million as of March 31, 2024 and December 31, 2023, respectively. NCS incurred capital expenditures, net of proceeds from the sale of property and equipment, of $0.1 million and $0.5 million for the three months ended March 31, 2024 and 2023, respectively. Review and Outlook NCS's Chief Executive Officer, Ryan Hummer commented, "NCS has had a strong start to 2024, with total revenues and Adjusted EBITDA for the first quarter exceeding our expectations as provided in the last earnings call, led by outperformance in Canada and international markets. Our total revenues increased by 1% year-over-year and 24% sequentially. Importantly, our revenues outperformed industry benchmarks in each of the United States and Canada. U.S. revenue fell by 12% year-over-year but increased by 10% sequentially. This compares favorably to changes in U.S. well completions per the EIA Drilling Productivity Report of (15%) and (11%), respectively. Canadian revenue increased by 3% year-over-year and by 27% sequentially. This compares favorably to changes in the Canadian land rig count of (6%) and 16% respectively.       Our net income for the first quarter of 2024 was $2.1 million, or $0.82 per diluted share. Our Adjusted EBITDA for the first quarter of 2024 was $6.1 million, an improvement of $1.2 million year-over-year and $3.5 million sequentially. This year-over-year improvement stems from a reduction in SG&A expense and an increase in other income, primarily royalty income generated from licensing certain intellectual property. We continue to believe that average 2024 industry drilling and completion activity in Canada will be flat to slightly lower compared to 2023 and activity in the United States will decline on average by 5% to 10% compared to 2023, although such activity may increase modestly throughout the remainder of 2024 from recent levels. We expect international industry activity to improve on average between 5% to 10% in 2024 compared to 2023. For the second quarter, we expect revenues to improve sequentially in our U.S. and international operations, but decline for our Canadian operations, reflecting normal seasonal patterns in that market. The anticipated increases in revenue in the U.S. and international markets is driven by increased frac systems activity in the United States, and increased customer activity in the North Sea and in the Middle East.  We continue to believe the value that we bring to our customers across our product and service portfolio, together with continued product and service innovation, positions us to outperform the anticipated changes in industry drilling and completion activity, and to increase revenue and Adjusted EBITDA in 2024 compared to 2023. I am excited about our business and the opportunities for NCS in 2024 and beyond as we deliver on our core strategies to build upon our leading market positions, capitalize on opportunities in international and offshore markets and as we bring new and innovative solutions to our customers around the world. I extend my gratitude to our team at NCS and at Repeat Precision. I appreciate the hard work and dedication of our outstanding people. We have the right team, the right technology, and the right strategies in place to deliver extraordinary outcomes to our customers, drive innovation in the industry and to create value for our shareholders." EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EBITDA Less Share-Based Compensation, Adjusted Net Income (Loss), Adjusted Earnings (Loss) per Diluted Share, Adjusted Gross Profit, Adjusted Gross Margin, Free Cash Flow, Free Cash Flow Less Distributions to Non-Controlling Interest and Net Working Capital are non-GAAP financial measures. For an explanation of these measures and a reconciliation, refer to "Non-GAAP Financial Measures" below. Conference Call The Company will host a conference call to discuss its first quarter 2024 results and updated guidance on Thursday, May 2, 2024 at 7:30 a.m. Central Time (8:30 a.m. Eastern Time). The conference call will be available via a live audio webcast. Participants who wish to ask questions may register for the call here to receive the dial-in numbers and unique PIN. If you wish to join the conference call but do not plan to ask questions, you may join the listen-only webcast here. The live webcast can also be accessed by visiting the Investors section of the Company's website at ir.ncsmultistage.com. It is recommended that participants join at least 10 minutes prior to the event start. The replay will be available in the Investors section of the Company's website shortly after the conclusion of the call and will remain available for approximately seven days. About NCS Multistage Holdings, Inc. NCS Multistage Holdings, Inc. is a leading provider of highly engineered products and support services that facilitate the optimization of oil and natural gas well construction, well completions and field development strategies. NCS provides products and services primarily to exploration and production companies for use in onshore and offshore wells, predominantly wells that have been drilled with horizontal laterals in both unconventional and conventional oil and natural gas formations. NCS's products and services are utilized in oil and natural gas basins throughout North America and in selected international markets, including the North Sea, the Middle East, Argentina and China. NCS's common stock is traded on the Nasdaq Capital Market under the symbol "NCSM." Additional information is available on the website, www.ncsmultistage.com. Forward Looking Statements This press release contains forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as "anticipates," "intends," "plans," "seeks," "believes," "estimates," "expects" and similar references to future periods, or by the inclusion of forecasts or projections. Examples of forward-looking statements include, but are not limited to, statements we make regarding the outlook for our future business and financial performance. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, our actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause our actual results to differ materially from those in the forward-looking statements include regional, national or global political, economic, business, competitive, market and regulatory conditions and the following: declines in the level of oil and natural gas exploration and production activity in Canada, the United States and internationally; oil and natural gas price fluctuations; significant competition for our products and services that results in pricing pressures, reduced sales, or reduced market share; inability to successfully implement our strategy of increasing sales of products and services into the U.S. and international markets; loss of significant customers; losses and liabilities from uninsured or underinsured business activities and litigation; our failure to identify and consummate potential acquisitions; the financial health of our customers including their ability to pay for products or services provided; our inability to integrate or realize the expected benefits from acquisitions; our inability to achieve suitable price increases to offset the impacts of cost inflation; loss of any of our key suppliers or significant disruptions negatively impacting our supply chain; risks in attracting and retaining qualified employees and key personnel; risks resulting from the operations of our joint venture arrangement; currency exchange rate fluctuations; impact of severe weather conditions; our inability to accurately predict customer demand, which may result in us holding excess or obsolete inventory; impairment in the carrying value of long-lived assets including goodwill; failure to comply with or changes to federal, state and local and non-U.S. laws and other regulations, including anti-corruption and environmental regulations, guidelines and regulations for the use of explosives; change in trade policy, including the impact of tariffs; our inability to successfully develop and implement new technologies, products and services that align with the needs of our customers, including addressing the shift to more non-traditional energy markets as part of the energy transition; our inability to protect and maintain critical intellectual property assets or losses and liabilities from adverse decisions in intellectual property disputes; loss of, or interruption to, our information and computer systems; system interruptions or failures, including complications with our enterprise resource planning system, cybersecurity breaches, identity theft or other disruptions that could compromise our information; our failure to establish and maintain effective internal control over financial reporting; restrictions on the availability of our customers to obtain water essential to the drilling and hydraulic fracturing processes; changes in legislation or regulation governing the oil and natural gas industry, including restrictions on emissions of greenhouse gases; our inability to meet regulatory requirements for use of certain chemicals by our tracer diagnostics business; the reduction in our ABL Facility borrowing base or our inability to comply with the covenants in our debt agreements; and our inability to obtain sufficient liquidity on reasonable terms, or at all and other factors discussed or referenced in our filings made from time to time with the Securities and Exchange Commission. Any forward-looking statement made by us in this press release speaks only as of the date on which we make it. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law. Contact Mike MorrisonChief Financial Officer and Treasurer(281) NCS MULTISTAGE HOLDINGS, INC.CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except per share data)(Unaudited)       Three Months Ended       March 31,       2024     2023   Revenues                 Product sales   $ 31,758     $ 31,430   Services     12,100       12,124   Total revenues     43,858       43,554   Cost of sales                 Cost of product sales, exclusive of depreciation and amortization expense shown below     19,692       18,833   Cost of services, exclusive of depreciation and amortization expense shown below     6,595       6,180   Total cost of sales, exclusive of depreciation and amortization expense shown below     26,287       25,013   Selling, general and administrative expenses     13,830       16,151   Depreciation     1,073       943   Amortization     167       167   Income from operations     2,501       1,280   Other income (expense)                 Interest expense, net     (100 )     (209 ) Provision for litigation, net of recoveries     —       (17,514 ) Other income, net     1,137       292   Foreign currency exchange (loss) gain     (498 )     55   Total other income (expense)     539       (17,376 ) Income (loss) before income tax     3,040       (16,096 ) Income tax expense (benefit)     487       (1,100 ) Net income (loss)     2,553       (14,996 ) Net income (loss) attributable to non-controlling interest     483       (27 ) Net income (loss) attributable to NCS Multistage Holdings, Inc.   $ 2,070     $ (14,969 ) Earnings (loss) per common share                 Basic earnings (loss) per common share attributable to NCS Multistage Holdings, Inc.   $ 0.83     $ (6.10 ) Diluted earnings (loss) per common share attributable to NCS Multistage Holdings, Inc.   $ 0.82     $ (6.10 ) Weighted average common shares outstanding                 Basic     2,508       2,452   Diluted     2,539       2,452     NCS MULTISTAGE HOLDINGS, INC.CONDENSED CONSOLIDATED BALANCE SHEETS*(In thousands, except share data)(Unaudited)       March 31,     December 31,       2024     2023   Assets                 Current assets                 Cash and cash equivalents   $ 14,004     $ 16,720   Accounts receivable—trade, net     33,919       23,981   Inventories, net     39,237       41,612   Prepaid expenses and other current assets     1,695