The **sharp increase in Q1 2024 Net Income** was driven by several key factors. Firstly, ChampionX recorded a **$29.9 million net gain from a sale-leaseback transaction**, which significantly boosted its income. Additionally, improved operating profit in multiple segments—most notably a **$35.7 million increase in Drilling Technologies** and a **$6.4 million increase in Production & Automation Technologies**—played an important role. The company also benefited from **reduced foreign currency transaction losses** and a **lower effective tax rate**, which further contributed to the overall gain in net income.  **[0001723089-24-000084_exhibit991-q12024earningsr.htm:10]** **[0001723089-24-000091_championx-20240331.htm:29]** **[0001723089-24-000091_championx-20240331.htm:30]** 

What drove the sharp increase in Q1 2024 Net Income?

The significant drop in **Income Before Income Taxes** in Q2 2024 was primarily due to several factors. First, there was no **gain on the sale-leaseback transaction** in Q2, unlike Q1 2024 where a **$29.9 million gain** had bolstered income. Additionally, **SG&A expenses increased by $10.6 million**, driven by **$15.1 million in transaction costs** related to the merger and **$2.5 million in restructuring charges**. There was also a decline in **gross profit by $19.4 million** due to lower sales volumes in key markets, with only a minor offset from a **$2.8 million foreign currency gain**. These combined factors led to the significant drop in Q2 2024 compared to the previous quarter.  **[0001723089-24-000111_championx-20240630.htm:30]** **[0001723089-24-000106_exhibit991-q22024earningsr.htm:10]** 

Why did Income Before Taxes drop so significantly in Q2 2024?

In Q2 2024, the **net income decline** was primarily driven by several factors: **lower revenue** by **28,869 thousand USD** (a 3% reduction) due to decreased orders, especially in Latin America; **increased SG&A expenses** by **10,581 thousand USD**, which included **15.1 million USD in transaction costs** associated with the merger agreement and **2.5 million USD in restructuring charges**; the **absence of a one-time gain** of **29,883 thousand USD** from a prior sale-leaseback transaction recorded in Q1 2024; and a significant **rise in the effective tax rate** from **19.0% to 33.5%**.  **[0001723089-24-000111_championx-20240630.htm:30]** **[0001723089-24-000106_exhibit991-q22024earningsr.htm:11]** 

What factors contributed to the notable decline in Q2 2024 Net Income?

The increase in SG&A expense in Q2 2024 was primarily driven by **transaction costs of $15.1 million** related to the merger agreement with SLB and **restructuring charges of $2.5 million** associated with headcount reductions within the Production & Automation Technologies segment and Chemical Technologies business.  **[0001723089-24-000111_championx-20240630.htm:30]** **[0001723089-24-000106_exhibit991-q22024earningsr.htm:8]** 

What drove the increase in SG&A expense in Q2 2024?

In Q4 2024, **ChampionX's gross profit improved** despite lower revenue because the company implemented **productivity initiatives** that enhanced operational efficiency and cost management, and it exercised **tighter control over discretionary spending**. These measures helped bolster gross margins even as revenue declined.  **[0001723089-25-000006_exhibit991-q42024earningsr.htm:9]** **[0001723089-25-000025_championx-20241231.htm:49]** 

Why did Gross Profit improve in Q4 2024 despite lower revenue?

ee0a5799da47eafbf269fa287afe2b9d7b2d67f89fdec90bf13d722c83307587

The significant increase in cash in Q1 2024 was primarily driven by **net cash flows from operating activities**, which contributed **$173,508 thousand** from operations. This positive impact was partially offset by cash outflows from **investing activities** of **$10,794 thousand**, **financing activities** of **$64,093 thousand**, and a negative **exchange rate impact** of **$1,161 thousand**—resulting in a net cash increase of **$97,460 thousand** during the quarter.  **[0001723089-24-000091_championx-20240331.htm:5]** **[0001723089-24-000091_championx-20240331.htm:7]** **[0001723089-24-000084_exhibit991-q12024earningsr.htm:8]** 

What drove the significant jump in cash in Q1 2024?

ChampionX’s surge in cash in Q4 2024 was driven primarily by robust operating performance. The company generated **$207.3 million** from operating activities and reported **$170.1 million** in free cash flow during the quarter, which directly boosted the cash balance.  **[0001723089-25-000006_exhibit991-q42024earningsr.htm:0]**  In addition, broader factors contributed to this improvement, such as a deferred tax payment of **$47.6 million** (moved to Q1 2025) and enhancements in working capital, which improved by **$13.5 million** during the year.  **[0001723089-25-000025_championx-20241231.htm:54]** 

What factors contributed to the surge in cash in Q4 2024?

The **rise in total assets in Q4 2024** was driven by several factors. **Firstly**, there was a significant increase in **cash and cash equivalents** from **$288,557 thousand** in 2023 to **$507,681 thousand** in 2024, fueled by strong operating cash flow.  **[0001723089-25-000025_championx-20241231.htm:66]**  **Secondly**, the company experienced **goodwill growth** due to acquisitions such as **Artificial Lift Performance** and **RMSpumptools**, which contributed an additional **$60.8 million** in goodwill.  **[0001723089-25-000025_championx-20241231.htm:66]** **[0001723089-25-000025_championx-20241231.htm:84]**  **Additionally**, there were increases in both **operating lease right-of-use assets** (rising from **$69,561 thousand** to **$100,427 thousand**) and **other non-current assets** (increasing from **$60,555 thousand** to **$72,948 thousand**), which further contributed to the overall rise in total assets. These increases were partially offset by a decline in **property, plant, and equipment, net** due to higher depreciation relative to new capital expenditures.  **[0001723089-25-000025_championx-20241231.htm:66]** **[0001723089-25-000025_championx-20241231.htm:78]** 

What has led to the rise in total assets in Q4 2024?

The slight decrease in long-term debt in Q4 2024 was primarily due to **mandatory amortization payments** on the 2022 Term Loan Facility, which requires a **1% annual amortization** of the initial commitment, paid quarterly.  **[0001723089-25-000025_championx-20241231.htm:85]** **[0001723089-25-000025_championx-20241231.htm:66]** **[0001723089-25-000025_championx-20241231.htm:51]** 

Why did long-term debt slightly decrease in Q4 2024?

e2a60941d0530184cb4cc3d4c4d60d11bf2523c5ae86a7cd644050ac11b17e32

The documents appear to offer conflicting information. One set of figures shows that net cash provided by operating activities dropped from **115,910 thousand USD in Q2 2023** to **67,625 thousand USD in Q2 2024**.  **[0001723089-23-000133_championx-20230630.htm:7]** **[0001723089-24-000111_championx-20240630.htm:7]**  However, another document explains the change as an increase—from **208,288 thousand USD in Q2 2023** to **241,133 thousand USD in Q2 2024**—attributing the change to an increase in net income and a reduced use of cash for working capital items (including lower inventory purchases and a decrease in accounts payable).  **[0001723089-24-000111_championx-20240630.htm:36]**  Because the documents do not clearly reconcile these differences, there is no definitive explanation provided for a steep drop in operating cash flow in Q2 2024.

What drove the steep drop in Operating Cash Flow in Q2 2024?

The **higher net increase in cash** in Q4 2024 is primarily driven by a significant improvement in operating cash flows and a substantial reduction in financing outflows. **Operating activities** contributed **$589,681 thousand**, boosted by factors such as deferred tax payments and improved profit margins and working capital management. Additionally, **lower cash used in financing activities**—especially due to reduced stock repurchases—played an important role, even though there were higher outflows in investing activities and some adverse effects from exchange rate changes. These combined factors led to the pronounced increase in cash for Q4 2024.  **[0001723089-25-000025_championx-20241231.htm:54]** 

Why is the Net Increase in Cash so high in Q4 2024?

e9aec249690a5cf9ca166d64102456d2207104bcebbb2c95938e6e630398414d

Total Revenue (USD, thousands)

Cost of Goods and Services (USD, thousands)

Gross Profit (USD, thousands)

Selling, General and Administrative Expense (USD, thousands)

Goodwill Impairment (USD, thousands)

(Gain)/Loss on Sale-Leaseback Transaction and Disposal Group (USD, thousands)

Interest Expense, Net (USD, thousands)

Other Income, Net / Other Expense (Income), Net (USD, thousands)

Income Before Income Taxes (USD, thousands)

Provision for Income Taxes (USD, thousands)

Net Income (USD, thousands)

Net Income Attributable to Noncontrolling Interest (USD, thousands)

Net Income Attributable to ChampionX (USD, thousands)

e7574f292e3e756f1df09f7be892dc2278143b976571bd4f6070738718321c3c

Cash and cash equivalents (USD, thousands)

Receivables, net (USD, thousands)

Inventories, net (USD, thousands)

Prepaid expenses and other current assets (USD, thousands)

Total current assets (USD, thousands)

Property, plant and equipment, net (USD, thousands)

Goodwill (USD, thousands)

Intangible assets, net (USD, thousands)

Operating lease right-of-use assets (USD, thousands)

Other non-current assets (USD, thousands)

Total assets (USD, thousands)

Current portion of long-term debt (USD, thousands)

Accounts payable (USD, thousands)

Accrued compensation and employee benefits (USD, thousands)

Current portion of operating lease liabilities (USD, thousands)

Accrued distributor fees (USD, thousands)

Accrued expenses and other current liabilities (USD, thousands)

Total current liabilities (USD, thousands)

Long-term debt (USD, thousands)

Deferred income taxes (USD, thousands)

Operating lease liabilities (USD, thousands)

Other long-term liabilities (USD, thousands)

Total liabilities (USD, thousands)

Common stock (USD, thousands)

Capital in excess of par value of common stock (USD, thousands)

Accumulated deficit (USD, thousands)

Accumulated other comprehensive loss (USD, thousands)

ChampionX stockholders’ equity (USD, thousands)

Noncontrolling interest (USD, thousands)

Total equity (USD, thousands)

Total liabilities and equity (USD, thousands)

Assets held for sale (USD, thousands)

9e78f6c10dbf350c1a9483a1ecb2ce680bf7f50966c3510bb91ab292528d0352

9ada318bad5f037fb22197866eaf25d7664a15d15dd933729ba0eecf7d17afc3

Current Assets (USD, thousands)

Cash and Cash Equivalents (USD, thousands)

Accounts Receivable (USD, thousands)

Inventory (USD, thousands)

Non-Current Assets (USD, thousands)

Property, Plant, and Equipment (PP&E) (USD, thousands)

Intangible Assets (USD, thousands)

Current Liabilities (USD, thousands)

Accounts Payable (USD, thousands)

Short-term Debt (USD, thousands)

Accrued Expenses (USD, thousands)

Non-Current Liabilities (USD, thousands)

Long-term Debt (USD, thousands)

Lease Liabilities (USD, thousands)

Deferred Tax Liabilities (USD, thousands)

Shareholders' Equity (USD, thousands)

Retained Earnings (USD, thousands)

Common Stock (USD, thousands)

Additional Paid-in Capital (USD, thousands)

eb4e92584fa914d87b7f03e5cbff0760e2f9d15700c15c05308e4a4ca538533d

United States

Latin America

Middle East & Africa

Canada

Europe

Asia-Pacific

Australia

Other

Total Revenue

3b55d8d253289bd1af5be6b3cc652222aa9a03622cad0a59a520619e7281199f

Cost of Goods Sold (COGS) (USD, thousands)

SG&A (USD, thousands)

R&D (USD, thousands)

Depreciation and Amortization (USD, thousands)

Interest Expense (USD, thousands)

Operating Income (EBIT) (USD, thousands)

EPS - Basic (USD)

EPS - Diluted (USD)

d00c037c80613382a18669c9faf97f33c530d8b0bd9fa5397ae5ad2f5d509fc2

Production Chemical Technologies

- Product Revenue

- Service Revenue

- Lease and Other Revenue

Production & Automation Technologies

Drilling Technologies

Reservoir Chemical Technologies

Corporate and Other

71bd350067366a7cf4ad47f6c273f13ce858fdc080457485b1948230d3f51a7a

Adjustments for Non-Cash Items (USD, thousands)

Stock-Based Compensation (USD, thousands)

Changes in Working Capital (USD, thousands)

Capital Expenditures (USD, thousands)

Proceeds from / Repayments of Debt (USD, thousands)

Share Repurchases (USD, thousands)

Dividend Payments (USD, thousands)

Net Change in Cash (USD, thousands)

94657b73290db0d14eb11311b2e78ac112b8f19b937c5521dacfa8c6cff06dd5

ChampionX (CHX)

Financials