NCS Multistage Holdings, Inc. Announces Second Quarter 2025 Results

2025-07-31

TSX - Toronto Stock Exchange · Oil · Natural Gas · Natural Gas Liquids · Potash · Canada

Second Quarter Results

Total revenues of $36.5 million, a 23% year-over-year improvement Net income of $0.9 million and diluted earnings per share of $0.34, which includes a positive impact of $1.4 million related to the release of our deferred tax valuation allowance in Canada Adjusted EBITDA of $2.2 million, a $1.3 million year-over-year improvement $25.4 million in cash and $7.7 million of total debt as of June 30, 2025

HOUSTON, July 31, 2025 (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 June 30, 2025.

Review and Outlook

NCS’s Chief Executive Officer, Ryan Hummer commented, “Our team at NCS has continued to enable strong operational and financial performance in an industry and market environment marked by uncertainty. Our revenue and Adjusted EBITDA for the second quarter exceeded the high end of the expectations we provided in our last earnings call and our year-over-year revenue improvement for the quarter of 23% outperformed industry activity levels, demonstrating the value we bring to our customers.

Furthermore, our revenue and Adjusted EBITDA for the first six months of 2025 have improved by $12.9 million, or 18%, and $3.4 million, or 49%, respectively, as compared to 2024, as we continue to benefit from our core strategies of building upon our leading market positions, capitalizing on international and offshore opportunities and commercializing innovative solutions to complex customer challenges.

We have maintained our strong balance sheet, ending the second quarter with over $25 million in cash and over $17 million in availability under our undrawn credit facility and only $8 million in debt, comprised entirely of capital leases.

We’re also excited to announce today’s acquisition of Reservoir Metrics, LLC, and its related entities (“ResMetrics”). ResMetrics, a leader in reservoir analysis utilizing chemical tracer technology, is a profitable and rapidly growing business serving a high-quality customer base in the U.S. and internationally. For the trailing twelve months ended June 30, 2025, ResMetrics’ unaudited revenue was over $10 million with an EBITDA margin of over 30%. We believe that ResMetrics’ business is highly complementary with NCS’s tracer diagnostics service line, and we look forward to working with the ResMetrics team to deliver valuable and actionable reservoir insights to our customers. This all-cash transaction represents a strategic fit for NCS operationally, a strategic use of our balance sheet, and adds to our talented team.

This has been a strong start to 2025 for NCS and we remain cautiously optimistic about the second half of the year. That optimism is tempered by market conditions that have continued to deteriorate, with continued U.S. rig count declines, a slower than normal rig count recovery in Canada following spring break-up, the potential for an oversupplied oil market in late 2025 as announced OPEC+ oil supply increases materialize, and ongoing uncertainties related to tariffs and trade.

I want to extend my continued appreciation to the outstanding teams at NCS and Repeat Precision and welcome the ResMetrics team to NCS. Our results, and the opportunities ahead, reflect the vision, ability and commitment of our people and our aligned pursuit of NCS's strategic priorities. We have the right people, the right technology, and the right strategies in place to deliver tangible benefits to our customers, develop industry solutions, and create shareholder value.”

Financial Review

Total revenues were $36.5 million for the quarter ended June 30, 2025 compared to $29.7 million for the second quarter of 2024. Revenue growth was driven primarily by increased fracturing systems activity and frac plug sales in Canada and the United States. The increase for Canada occurred despite a decline in Canadian rig counts during 2025, reflecting more activity with customers that remained active during spring break-up. Our international revenues decreased primarily due to reduced tracer diagnostics activity in the Middle East, partially offset by higher sales of well construction products in the Middle East and fracturing systems equipment in the North Sea.

Compared to the first quarter of 2025, total revenues decreased by 27%, primarily due to a decrease in Canada of 52%, attributable to the normal seasonal decline associated with spring break-up, partially offset by an increase of 67% in international revenues and a 45% increase in U.S. revenues.

Gross profit was $12.3 million, or a gross margin of 34%, for the second quarter of 2025, compared to $11.3 million, or a gross margin of 38%, for the second quarter of 2024. Gross margin for 2025 declined, reflecting the mix of products sold and services provided during the respective periods. Adjusted gross profit, which we define as total revenues less total cost of sales, exclusive of depreciation and amortization ("DD&A"), was $13.0 million, or an adjusted gross margin of 36%, for the second quarter of 2025, compared to $12.0 million, or 40%, for the second quarter of 2024.

Selling, general and administrative (“SG&A”) expenses totaled $13.6 million for the second quarter of 2025, a decrease of $1.2 million compared to the same period in 2024, with a decrease in professional fees, lower payroll and employee benefit expenses, and a decrease in research and development expense, partially offset by higher share-based compensation expense attributable to cash settled awards remeasured at the balance sheet date based on the price of our common stock.

Other income was $1.6 million for the second quarter of 2025 compared to $2.2 million for the second quarter of 2024. The decline in other income reflects a reduction in the amount attributable to the technical services and assistance agreement with our local partner in Oman, as the program ended in November 2024, with no contribution associated with this agreement in the second quarter of 2025. In addition, there was a year-over-year decrease in royalty income earned from licensees for these periods, as the second quarter of 2024 included an initial payment from a new licensee reflecting both current and certain historical volumes.

Income tax benefit was $1.0 million for the second quarter of 2025 compared to an expense of $0.3 million for the second quarter of 2024. As of June 30, 2025, we reversed a portion of the valuation allowance previously recorded against the deferred tax assets of our Canadian operating subsidiary due to sustained improvements in operating results, including a return to profitability and forecasts of future taxable income that are sufficient to realize the remaining deferred tax assets. The reversal of the valuation allowance resulted in a deferred income tax benefit of $1.4 million during the period ended June 30, 2025.

Net income was $0.9 million, or $0.34 per diluted share, for the quarter ended June 30, 2025 compared to a net loss of $(3.1) million, or $(1.21) per share for the quarter ended June 30, 2024.

Adjusted EBITDA was $2.2 million for the quarter ended June 30, 2025, an increase of $1.3 million compared to the same period a year ago. This improvement is primarily the result of an increase in revenues and lower SG&A expenses. Adjusted EBITDA margin of 6% for the quarter ended June 30, 2025, compared to 3% for the same period a year ago.

Cash flow from operating activities for the six months ended June 30, 2025 was a source of cash of $1.9 million, a $2.2 million decrease compared to the same period in 2024. For the six months ended June 30, 2025, free cash flow less distributions to non-controlling interest was a source of cash of $0.5 million compared to $3.2 million for the same period in 2024. The overall change in free cash flow was largely attributed to our change in net working capital including payment of incentive bonuses and cash-settled awards in the first quarter of 2025 and an increase in the amount distributed to our non-controlling interest in 2025, partially offset by an increase in net income in 2025.

Liquidity and Capital Expenditures

As of June 30, 2025, NCS had $25.4 million in cash, $7.7 million in total indebtedness related to finance lease obligations, and a borrowing base under the undrawn asset-based revolving credit facility (“ABL Facility”) of $17.2 million. Our working capital, defined as current assets minus current liabilities, was $87.2 million and $80.2 million as of June 30, 2025 and December 31, 2024, respectively.

Net working capital, calculated as working capital, less cash and excluding the current maturities of long-term debt, was $64.0 million and $56.4 million as of June 30, 2025 and December 31, 2024, respectively. The increase in net working capital was primarily attributable to an increase in accounts receivable and inventory and a decrease in accrued expenses and other current liabilities due in part to payment of our 2024 incentive bonus and cash-settled awards in the first quarter of 2025, partially offset by an increase in accounts payable.

NCS incurred capital expenditures, net of proceeds from the sale of property and equipment, of $0.5 million and $0.4 million for the six months ended June 30, 2025 and 2024, respectively.

_EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EBITDA Less Share-Based Compensation, 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.

Strategic Acquisition of Reservoir Metrics, LLC

On July 31, 2025, we acquired 100% of the equity interests of ResMetrics, a provider of tracer diagnostics services, for $5.9 million, on a cash-free, debt-free basis, in cash and assumed debt, subject to a working capital adjustment, with an additional earn-out of up to $1.3 million to be paid in early 2026, depending solely on changes in international trade tariff rates for certain chemical imports during 2025. We believe the purchase of ResMetrics will further expand and complement our existing tracer diagnostics offerings.

Conference Call

The Company will host a conference call to discuss its second quarter 2025 results and latest earnings guidance on Friday, August 1, 2025 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; change in trade policy, including the impact of tariffs; 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; failure to comply with or changes to federal, state and local and non-U.S. laws and other regulations, including tax policies, anti-corruption and environmental regulations, guidelines and regulations for the use of explosives; impairment in the carrying value of long-lived assets including goodwill; 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 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 and the adoption of artificial intelligence and machine learning; our inability to protect and maintain critical intellectual property assets, the inability to protect our current royalty income, or the losses and liabilities from adverse decisions in intellectual property disputes; loss of, or interruption to, our information and computer systems; 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 Morrison Chief Financial Officer and Treasurer (281) 453-2222 IR@ncsmultistage.com

| NCS MULTISTAGE HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended | | | Six Months Ended | | | | | | | | | | | | | | | June 30, | | | June 30, | | | | | | | | | | | | | | | 2025 | | | 2024 | | | 2025 | | | 2024 | | | | | | | Revenues | | | | | | | | | | | | | | | | | | Product sales | | $ | 27,776 | | | $ | 19,022 | | | $ | 62,842 | | | $ | 50,780 | | | Services | | | 8,678 | | | | 10,668 | | | | 23,617 | | | | 22,768 | | | Total revenues | | | 36,454 | | | | 29,690 | | | | 86,459 | | | | 73,548 | | | Cost of sales | | | | | | | | | | | | | | | | | | Cost of product sales, exclusive of depreciation and amortization expense shown below | | | 18,214 | | | | 12,209 | | | | 38,566 | | | | 31,901 | | | Cost of services, exclusive of depreciation and amortization expense shown below | | | 5,242 | | | | 5,510 | | | | 13,040 | | | | 12,105 | | | Total cost of sales, exclusive of depreciation and amortization expense shown below | | | 23,456 | | | | 17,719 | | | | 51,606 | | | | 44,006 | | | Selling, general and administrative expenses | | | 13,626 | | | | 14,820 | | | | 29,821 | | | | 28,650 | | | Depreciation | | | 1,235 | | | | 1,134 | | | | 2,439 | | | | 2,207 | | | Amortization | | | 167 | | | | 167 | | | | 334 | | | | 334 | | | (Loss) income from operations | | | (2,030 | ) | | | (4,150 | ) | | | 2,259 | | | | (1,649 | ) | | Other income (expense) | | | | | | | | | | | | | | | | | | Interest expense, net | | | (68 | ) | | | (115 | ) | | | (110 | ) | | | (215 | ) | | Other income, net | | | 1,563 | | | | 2,203 | | | | 2,446 | | | | 3,340 | | | Foreign currency exchange gain (loss), net | | | 1,201 | | | | (507 | ) | | | 1,198 | | | | (1,005 | ) | | Total other income | | | 2,696 | | | | 1,581 | | | | 3,534 | | | | 2,120 | | | Income (loss) before income tax | | | 666 | | | | (2,569 | ) | | | 5,793 | | | | 471 | | | Income tax (benefit) expense | | | (1,032 | ) | | | 270 | | | | (359 | ) | | | 757 | | | Net income (loss) | | | 1,698 | | | | (2,839 | ) | | | 6,152 | | | | (286 | ) | | Net income attributable to non-controlling interest | | | 774 | | | | 256 | | | | 1,172 | | | | 739 | | | Net income (loss) attributable to NCS Multistage Holdings, Inc. | | $ | 924 | | | $ | (3,095 | ) | | $ | 4,980 | | | $ | (1,025 | ) | | Earnings (loss) per common share | | | | | | | | | | | | | | | | | | Basic earnings (loss) per common share attributable to NCS Multistage Holdings, Inc. | | $ | 0.36 | | | $ | (1.21 | ) | | $ | 1.93 | | | $ | (0.41 | ) | | Diluted earnings (loss) per common share attributable to NCS Multistage Holdings, Inc. | | $ | 0.34 | | | $ | (1.21 | ) | | $ | 1.84 | | | $ | (0.41 | ) | | Weighted average common shares outstanding | | | | | | | | | | | | | | | | | | Basic | | | 2,594 | | | | 2,548 | | | | 2,581 | | | | 2,528 | | | Diluted | | | 2,734 | | | | 2,548 | | | | 2,704 | | | | 2,528 | | | | | | | | | | | | | | | | | | | |