Core Lab Reports Q3 2012 EPS Of $1.14, $1.13 Ex-Items; Q3 2012 Ops Margins At 30% Ex-Items; YTD FCF Reaches $128 Million

Core Lab Reports Q3 2012 EPS Of $1.14, $1.13 Ex-Items; Q3 2012 Ops Margins At
                  30% Ex-Items; YTD FCF Reaches $128 Million

PR Newswire

AMSTERDAM, Oct. 17, 2012

AMSTERDAM, Oct. 17,2012 /PRNewswire/ --Core Laboratories N.V. (NYSE: "CLB
US" and NYSE Euronext: "CLB NA") reported third quarter 2012 net income of
$54,403,000 and earnings per diluted share ("EPS") of $1.14. Excluding the
settlement of a business interruption claim, the Company's operations earned
$1.13, an increase of 13% over year-earlier EPS totals, ex-items. Third
quarter 2012 revenue increased 6% over third quarter 2011 levels to
$245,428,000, despite the U.S. rig count decreasing approximately 6% since the
end of the second quarter 2012 and an international rig count that has been
flat from year end 2011. Third quarter 2012 operating income increased to
$73,747,000, 6% over year-ago quarterly levels, ex-items, yielding operating
margins of 30%.

(Logo: http://photos.prnewswire.com/prnh/20100712/DA33898LOGO)

Free cash flow ("FCF"), defined as cash from operations in excess of capital
expenditures, reached $41,996,000 for the quarter. During the quarter, Core
returned over $46,443,000 to its shareholders by repurchasing 283,513 shares
for $33,191,000 and paying dividends of $13,252,000. Since 2 October 2012,
the Company has repurchased an additional 422,600 shares at an average price
of $101.87.

The improved year-over-year third quarter results reflect the Company's
continued focus on international crude-oil related developments and
unconventional oil plays in North America. Increased demand for Core's
proprietary and patented fracture and field-flood diagnostics technology and
for the Company's HTD Blast^™ and HTD Blast XL^™ perforating system technology
also bolstered results. Additional clients were added to Core's joint
industry projects in Eagle Ford, Niobrara, and Utica formations and
unconventional reservoirs in the Midland Basin. Internationally, the
Company's newest joint industry project, Equatorial Basins of Eastern South
America, makes six such studies available for reservoirs offshore Brazil.

Compared with the first nine months of 2011, Core's revenue increased 9% to
$726,625,000; net income increased 23% to $161,270,000; and EPS was up 25% to
$3.38. Operating margins for the first nine months of 2012 were 30%, up 370
basis points from year-earlier levels, while FCF reached $128,000,000.

As reported the previous twelve quarters, the Board of Supervisory Directors
(the "Board") of Core Laboratories N.V. has established an internal
performance metric of achieving a return on invested capital ("ROIC") in the
top decile of the service companies listed as Core's peers by Bloomberg
Financial. Based on Bloomberg's calculations for the latest comparable data
available, Core's ROIC was the highest in its oilfield services Comp Group.
Moreover, the Company had the highest ROIC to Weighted Average Cost of Capital
("WACC") ratio in the Comp Group.

Segment Highlights

Core Laboratories reports results under three operating segments: Reservoir
Description, Production Enhancement, and Reservoir Management.

Reservoir Description

In the third quarter 2012, Core's Reservoir Description operations posted
record revenue for any third quarter of $124,156,000, an increase of 4% over
year-earlier quarterly totals. As has been the case in four of the past five
years, third quarter Reservoir Description revenue was down sequentially from
second quarter totals because of the large amount of revenue the Company
generates from Canadian oil sand projects, which peaks in the second calendar
quarter. Operating income increased 15% to $36,780,000, while operating
margins expanded to 30%, more than 300 basis points over year-ago levels
ex-items. The segment's revenue growth and margin expansion occurred in an
operating environment of a flat international rig count. Increasing market
penetration and improved utilization of higher technology services drove this
market place outperformance.

The Company continued to receive thousands of feet of reservoir core and
hundreds of reservoir fluid samples from some of the largest oil field
development projects worldwide. These include deepwater developments offshore
Brazil, Angola, Gabon, Nigeria, and Ghana. The rock and fluids data sets will
be integrated to ensure that operators can maximize daily production and
ultimate hydrocarbon recoveries.

In the Middle East, Core continues to work in fields in both southern and
northern Iraq, Kuwait, Saudi Arabia, Qatar, and the United Arab Emirates.
Many of these projects are phase behavior studies of reservoir oils and
natural gases for enhanced oil recovery operations.

In the deepwater Gulf of Mexico, Core continues to pioneer technologies
related to ever-increasing reservoir pressures and temperatures in ultra-deep
field developments. Currently, the Company is able to sample reservoir fluids
at 25,000 psi and 335 degrees Fahrenheit (168 degrees Celsius). Core Lab is
the first company to have these capabilities and is working on technologies to
conduct fluid phase behavior studies at 30,000 psi and 400 degrees Fahrenheit
(204 degrees Celsius).

In addition, the Company continues to lead the industry in mercury-free
Pressure-Volume-Temperature (PVT) capabilities. As directed by major clients
including Total and BP, among others, Core continues to install
state-of-the-art, automated mercury-free PVT cells in its major reservoir
fluids facilities around the globe. Currently with ten cells operational in
Aberdeen, Abu Dhabi, Kuwait, Houston, and Broussard, the Company has three
more cells to be delivered in the fourth quarter of 2012 and an additional
three cells on order for early 2013 deployment.

During the quarter, the Company completed the 100,000 plus square foot
expansion of its core analysis facilities in Houston to accommodate the high
volume of work received from the deepwater Gulf of Mexico and other deepwater
reservoirs around the globe. The expansion increased the Company's capacity
to perform reservoir-condition testing and added thirteen additional core
layout and viewing rooms.

Production Enhancement

Production Enhancement operations reported third quarter 2012 revenue of
$100,871,000, up 4% year over year, and operating income of $31,316,000,
excluding the business interruption payment. Operating margins were 31%.
Moreover, and more importantly, these results were sequentially better than
second quarter 2012 results, despite the U.S. rig count decreasing
approximately 6% sequentially from second quarter 2012 levels, reflecting the
positive impact of the increasing market penetration of Core's technology,
especially applied to unconventional reservoir development.

The third quarter results reflected increased demand for the Company's
proprietary and patented hydraulic fracture and field-flood diagnostic
technologies. SpectraChem^® and Zero Wash^® tracers were employed by clients
stimulating long, multi stage horizontal wellbores in unconventional plays in
North America, as well as in China, Poland, and Australia. Similar projects
were conducted in conventional reservoirs offshore Africa, Oman, and the
eastern Mediterranean. Internationally, several field-flood projects
continued to use SpectraFlood^™ tracers to determine the effectiveness of
injected fluids, including recently developed fields in deepwater offshore
West Africa, the North Sea, and onshore Colombia.

Core's recently introduced HTD Blast^™ and new HTD Blast XL^™ technologies,
used to more effectively and efficiently perforate unconventional shale
reservoirs, remained in high demand. In one wellbore, the HTD Blast XL^™
system was used to complete 27 different zones, which ultimately led to higher
production rates while decreasing completion costs.

Reservoir Management

Reservoir Management operations posted third quarter 2012 revenue of
$20,401,000, up 45% over year-earlier quarterly totals, and operating income
of $6,029,000. Operating margins were 30%.

Core's Eagle Ford Shale Study continues to add industry participants as the
Company analyzes thousands of feet of core, primarily from the oil-prone areas
in southwestern Texas. Industry interest remains strong in unconventional oil
reservoirs in the Permian basin, and the Company has received dozens of cores,
including cores from the Wolfcamp section whose results will be included in
the Company's Midland Basin Study. The Midland Basin Study now has 28
industry participants.

Internationally, Reservoir Management, in its continuing cooperation with
Petrobras, now has six studies detailing the petroleum geology and reservoir
potential of onshore and offshore Brazil. Core's newest study, Equatorial
Basins of Eastern South America, contains cores and cutting samples from
multiple sedimentary basins in shallow and deepwater areas.

In addition, Core's Deepwater Campos Basin, Santos Basin, Cretaceous
Carbonates of the Southeastern Margin, and Pre-Salt Phase II Brazil studies
now have over 30 industry participants. The combination of these studies
contains the most comprehensive data sets available of the Cretaceous-aged
carbonate sequences that make up the reservoir complex of deepwater pre-salt
giant and super-giant field developments. Petrobras remains Core's largest
and most important national oil company client.

Free Cash Flow, Share Repurchases, Dividends, Capital Returned To Shareholders

During the third quarter of 2012, Core Laboratories generated $51,256,000 of
cash from operating activities and had capital expenditures of $9,260,000,
yielding $41,996,000 in FCF. For the quarter, Core returned $46,443,000 to its
shareholders in the forms of share repurchases and dividends. The FCF was
used to pay $13,252,000 in cash dividends and to repurchase 283,513 shares at
a cost of $33,191,000. The average price paid per share since the inception
of the repurchase program is approximately $25.77. Year-over-year, Core
decreased its average diluted quarterly share count by approximately 1%, from
48,030,000 to 47,528,000.

On 10 July 2012, the Company's Board announced a quarterly cash dividend of
$0.28 per share that was paid in the third quarter of 2012. This amount
represented a 12% increase over the quarterly dividends of $0.25 per share
that were paid in 2011, and when paid each quarter of 2012, will equal a
payout of $1.12 per share of common stock. The quarterly $0.28 per share cash
dividend was paid on 20 August 2012 to shareholders of record on 20 July
2012. Dutch withholding tax was deducted from the dividend at the rate of
15%.

On 9 October 2012, the Board announced a cash dividend of $0.28 per share of
common stock to be paid on 20 November 2012 to the shareholders of record on
19 October 2012. Dutch withholding tax will be deducted from the dividend at
the rate of 15%.

Return On Invested Capital

As reported in the previous twelve quarters, the Company's Board has
established an internal performance metric of achieving an ROIC in the top
decile of the oilfield service companies listed as Core's peers by Bloomberg
Financial. The Company and its Board believe that ROIC is a leading
performance metric used by shareholders to determine the relative investment
value of publicly traded companies. Further, the Company and its Board
believe shareholders will benefit if Core consistently performs in the highest
ROIC decile among its Bloomberg peers. According to the latest financial
information from Bloomberg, Core Laboratories' ROIC was the highest of any of
the oilfield service companies listed in its Comp Group. Several of the peer
companies failed to post ROIC that exceeded their WACC, thereby eroding
capital and shareholder value. Core's ratio of ROIC to WACC is the highest of
any company in the Comp Group.

Comp Group companies listed by Bloomberg include Halliburton, Schlumberger,
Carbo Ceramics, FMC Technologies, Baker Hughes, Cameron International,
Oceaneering, National Oilwell Varco, and Oil States International, among
others. Core will update the ROIC for the oilfield services sector for the
third quarter 2012 in its fourth quarter 2012 earnings release.

Fourth Quarter 2012 Earnings Guidance, 2013 Outlook

Core Lab anticipates that North American activity levels will remain similar
to third quarter levels, while international activity will continue with
moderate increases. Therefore, Core expects fourth quarter 2012 revenue to
range between $245,000,000 to $250,000,000, with EPS in the $1.10 to $1.17
range. This operational guidance excludes any foreign currency translations
or any shares that may be repurchased in the fourth quarter, other than
previously disclosed. A 25% effective tax rate is assumed for the fourth
quarter.

This fourth quarter guidance reflects Core's ability to continue to grow
year-over-year revenues above the increase in worldwide activity levels. For
the third quarter of 2012, all three of the Company's operating segments
increased year-over-year quarterly revenue totals.

The Company's outlook for 2013 remains positive. With continued support from
robust Brent crude pricing and the expected delivery of additional deepwater
drilling rigs, Core believes that it will continue to work in increasingly
more established fields and new field development projects. In addition, as
it has consistently done in the past decade, the Company plans to enter new
fields where it currently does not have operations and to offer new
technologies and additional services in 2013. These new technologies and
services will be targeted at increasing the daily productivity and ultimate
hydrocarbon recovery rates from liquids-related unconventional reservoir
developments worldwide. Therefore, Core believes its business model to
achieve a revenue growth rate of 200 to 400 basis points above the increase in
worldwide activity level directed towards producing fields remains intact with
incremental margins positively impacting operating margins.

Core expects FCF totals to remain at elevated levels in 2013 with the
Company's client directed capex program to equal that of 2012. The Company
expects to increase its quarterly dividend in 2013 while continuing its share
buyback program.

The Company has scheduled a conference call to discuss Core's third quarter
2012 earnings announcement. The call will begin at 2:30 p.m. CET / 7:30 a.m.
CDT on Thursday, 18 October 2012. To listen to the call, please go to Core's
website at www.corelab.com.

Core Laboratories N.V. (www.corelab.com) is a leading provider of proprietary
and patented reservoir description, production enhancement, and reservoir
management services used to optimize petroleum reservoir performance. The
Company has over 70 offices in more than 50 countries and is located in every
major oil-producing province in the world.

This release includes forward-looking statements regarding the future revenue,
profitability, business strategies and developments of the Company made in
reliance upon the safe harbor provisions of Federal securities law. The
Company's outlook is subject to various important cautionary factors,
including risks and uncertainties related to the oil and natural gas industry,
business conditions, international markets, international political climates
and other factors as more fully described in the Company's 2011 Form 10-K
filed on 15 February 2012, and in other securities filings. These important
factors could cause the Company's actual results to differ materially from
those described in these forward-looking statements. Such statements are based
on current expectations of the Company's performance and are subject to a
variety of factors, some of which are not under the control of the Company.
Because the information herein is based solely on data currently available,
and because it is subject to change as a result of changes in conditions over
which the Company has no control or influence, such forward-looking statements
should not be viewed as assurance regarding the Company's future performance.
The Company undertakes no obligation to publicly update any forward looking
statement to reflect events or circumstances that may arise after the date of
this press release.



CORE LABORATORIES N.V. & SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(amounts in thousands, except per share data)
(Unaudited)
                          Three Months Ended          Nine Months Ended
                          30 September  30 September  30 September  30
                          2012          2011          2012          September
                                                                    2011
REVENUE                   $  245,428    $  231,344    $  726,625    $ 663,862
OPERATING EXPENSES:
   Costs of services and  155,341       150,312       460,861       439,335
   sales
   General and
   administrative         10,504        11,182        30,883        30,463
   expenses
   Depreciation and       6,459         5,738         17,419        17,374
   amortization
   Other (income)         (2,256)       548           (3,950)       (1,176)
   expense, net
OPERATING INCOME          75,380        63,564        221,412       177,866
Loss on exchange of
Senior Exchangeable     —             31            —             870
Notes
Interest expense          2,160         3,825         6,528         8,684
INCOME BEFORE INCOME TAX  73,220        59,708        214,884       168,312
EXPENSE
INCOME TAX EXPENSE        18,671        14,599        53,454        36,827
NET INCOME                54,549        45,109        161,430       131,485
NET INCOME (LOSS)
ATTRIBUTABLE              146           242           160           (123)
TONON-CONTROLLING
INTEREST
NET INCOME ATTRIBUTABLE
TO CORE LABORATORIES      $  54,403     $  44,867     $  161,270    $ 131,608
N.V.
Diluted Earnings Per      $  1.14       $  0.93       $  3.38       $ 2.71
Share:
WEIGHTED AVERAGE DILUTED  47,528        48,030        47,754        48,634
COMMON SHARES OUTSTANDING
SEGMENT INFORMATION:
Revenue:
Reservoir Description     $  124,156    $  119,853    $  366,724    $ 346,232
Production Enhancement    100,871       97,407        297,151       268,292
Reservoir Management      20,401        14,084        62,750        49,338
   Total                  $  245,428    $  231,344    $  726,625    $ 663,862
Operating income (loss):
Reservoir Description     $  36,780     $  28,780     $  107,271    $ 81,847
Production Enhancement    32,339        30,728        95,434        78,490
Reservoir Management      6,029         3,502         21,057        17,473
Corporate and other       232           554           (2,350)       56
   Total                  $  75,380     $  63,564     $  221,412    $ 177,866





CORE LABORATORIES N.V. & SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(amounts in thousands)
ASSETS:                                    30 September 2012  31 December 2011
                                           (Unaudited)
Cash and Cash Equivalents                  $    24,658        $   29,332
Accounts Receivable, net                   180,398            170,805
Inventory                                  53,807             53,214
Other Current Assets                       42,267             33,197
        Total Current Assets               301,130            286,548
Property, Plant and Equipment, net         125,697            115,295
Intangibles, Goodwill and Other Long Term  211,705            209,030
Assets, net
        Total Assets                       $    638,532       $   610,873
LIABILITIES AND EQUITY:
Short-Term Debt & Lease Obligations        $    45            $   2,344
Accounts Payable                           45,778             57,639
Other Current Liabilities                  73,059             83,212
        Total Current Liabilities          118,882            143,195
Long-Term Debt & Lease Obligations         213,044            223,075
Other Long-Term Liabilities                69,774             62,948
Total Equity                               236,832            181,655
        Total Liabilities and Equity       $    638,532       $   610,873





CORE LABORATORIES N.V. & SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW
(amounts in thousands)
(Unaudited)
                                               Nine Months Ended
                                               30 September 2012
CASH FLOWS FROM OPERATING ACTIVITIES           $    152,150
CASH FLOWS FROM INVESTING ACTIVITIES           (24,745)
CASH FLOWS FROM FINANCING ACTIVITIES           (132,079)
NET CHANGE IN CASH AND CASH EQUIVALENTS        (4,674)
CASH AND CASH EQUIVALENTS, beginning of period 29,332
CASH AND CASH EQUIVALENTS, end of period       $    24,658

Non-GAAP Information

Management believes that the exclusion of certain income and expenses enables
it to evaluate more effectively the Company's operations period-over-period
and to identify operating trends that could otherwise be masked by the
excluded Items. For this reason, we used certain non-GAAP measures that
exclude these Items; and we feel that this presentation provides the public a
clearer comparison with the numbers reported in prior periods.



Reconciliation of Operating Income
(amounts in thousands)
(Unaudited)
                                        Three Months Ended  Three Months Ended
                                        30 September 2012   30 September 2011
Operating income                        $    75,380         $    63,564
Insurance settlement                    (1,023)             —
Foreign exchange (gains) losses         (610)               1,522
Employee retention stock award costs    —                   4,431
Operating income excluding specific     $    73,747         $    69,517
items



                                          Production Enhancement
                                          Three Months Ended
                                          30 September 2012
Operating income                          $      32,339
Insurance settlement                      (1,023)
Operating income excluding specific items $      31,316



Reconciliation of Net Income
(amounts in thousands)
(Unaudited)
                                       Three Months Ended  Three Months Ended
                                       30 September 2012   30 September 2011
Net income                             $    54,403         $    44,867
Insurance settlement (net of tax)      (762)               —
Foreign exchange (gains) losses (net   (454)               1,148
of tax)
Employee retention stock award costs   —                   4,431
Financing costs (net of tax)           —                   1,012
Impact of higher (lower) effective tax 358                 (3,462)
rate
Net income excluding specific items    $    53,545         $    47,996





Reconciliation of Earnings Per Diluted Share
(Unaudited)
                                       Three Months Ended  Three Months Ended
                                       30 September 2012   30 September 2011
Earnings per diluted share             $     1.14          $     0.93
Insurance settlement (net of tax)      (0.01)              —
Foreign exchange (gains) losses (net   (0.01)              0.02
of tax)
Employee retention stock award costs   —                   0.09
Financing costs (net of tax)           —                   0.02
Impact of higher (lower) effective tax 0.01                (0.06)
rate
Earnings per diluted share excluding   $     1.13          $     1.00
specific items



Free Cash Flow

Core uses the non-GAAP measure of free cash flow to evaluate its cash flows
and results of operations. Free cash flow is an important measurement because
it represents the cash from operations, in excess of capital expenditures,
available to operate the business and fund non-discretionary obligations. Free
cash flow is not a measure of operating performance under GAAP, and should not
be considered in isolation nor construed as an alternative consideration to
operating income, net income, earnings per share, or cash flows from
operating, investing, or financing activities, each as determined in
accordance with GAAP. You should also not consider free cash flow as a measure
of liquidity. Moreover, since free cash flow is not a measure determined in
accordance with GAAP and thus is susceptible to varying interpretations and
calculations, free cash flow as presented may not be comparable to similarly
titled measures presented by other companies.



Computation of Free Cash Flow
(amounts in thousands)
(Unaudited)
                                         Three Months Ended  Nine Months Ended
                                         30 September 2012   30 September 2012
Net cash provided by operating           $    51,256         $    152,150
activities
Capital expenditures                     (9,260)             (24,154)
Free cash flow                           $    41,996         $    127,996



SOURCE Core Laboratories N.V.

Website: http://www.corelab.com
Contact: Richard L. Bergmark, + 1-713-328-2101, Fax, +1-713-328-2151
 
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