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Note 5 - Business Segment Reporting | 3 Months Ended
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Mar. 31, 2025
Notes to Financial Statements |
Segment Reporting Disclosure [Text Block] |
5. | Business segment reporting
Operating segments are defined as components of an enterprise for which separate financial information is available that is regularly evaluated by the Company’s Chief Operating Decision Maker (“CODM”), which is our chief executive officer (“CEO”), in deciding how to allocate resources and assess performance. Our operations are comprised of four operating segments which also represent our reportable segments and are aligned with our geographic regions as below:
| • | North and Latin America (“NLA”),
| • | Europe and Sub-Saharan Africa (“ESSA”),
| • | Middle East and North Africa (“MENA”), and
| • | Asia-Pacific (“APAC”).
Each reportable segment provides products and services in well construction, well flow management, subsea well access and well intervention and integrity to operators within their respective geographic regions. The reportable segments are separately managed business units consistent with the way our CODM manages the business. Activity in each region may vary and may not be responsive to changes in the broader global oil and gas market, and demand for our various offerings will generally benefit all product lines in that region. Assets used in support of our operations can in many instances be moved from country to country within a region, with relative ease as compared to moving between regions, in order to address demand. The accounting policies of the segments are the same as those described in Note 2 “Basis of presentation and significant accounting policies.” Our CODM regularly evaluates the performance of our operating segments using Segment EBITDA, which we define as income (loss) before income taxes adjusted for corporate costs, equity in income of joint ventures, depreciation and amortization expense, impairment expense, severance and other expense, gain (loss) on disposal of assets, foreign exchange (gains) losses, merger and integration expense, other income (expenses), net, interest and finance expense, net and stock-based compensation expense. The CODM uses Segment EBITDA to allocate resources (including employees, property and capital resources) to each segment predominantly in the annual budget and forecasting process. Our CODM assesses the performance using Segment EBITDA to compare the results of each segment with one another and considers budget-to-actual variances on a monthly basis. Our CODM also uses segment EBITDA to evaluate product pricing and determine the compensation of certain employees. The following tables presents our revenue, significant segment expenses and Segment EBITDA disaggregated by our operating segments and reconciliation to income before income taxes (in thousands):
|  | Three Months Ended March 31, 2025 |
|  | NLA |  |  | ESSA |  |  | MENA |  |  | APAC |  |  | Consolidated |
Revenue |  | $ | 134,278 |  |  | $ | 112,373 |  |  | $ | 93,554 |  |  | $ | 50,667 |  |  | $ | 390,872 |
Compensation and related cost |  |  | (54,314 | ) |  |  | (43,835 | ) |  |  | (32,792 | ) |  |  | (20,372 | ) |  |  |  |
Cost of product, materials, and supplies |  |  | (35,610 | ) |  |  | (28,982 | ) |  |  | (19,989 | ) |  |  | (14,458 | ) |  |  |  |
Other (1) |  |  | (13,968 | ) |  |  | (10,368 | ) |  |  | (6,605 | ) |  |  | (4,975 | ) |  |  |  |
Total Segment EBITDA |  | $ | 30,386 |  |  | $ | 29,188 |  |  | $ | 34,168 |  |  | $ | 10,862 |  |  | $ | 104,604 |
Corporate costs (2) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (32,082 | )
Equity in income of joint ventures |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 3,706 |
Depreciation and amortization expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (45,421 | )
Merger and integration expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (1,740 | )
Severance and other expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (6,082 | )
Stock-based compensation expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (6,968 | )
Foreign exchange losses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (1,988 | )
Other expenses, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1,654 |
Interest and finance expense, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (3,451 | )
Income before income taxes |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 12,232 |
|  | Three Months Ended March 31, 2024 |
|  | NLA |  |  | ESSA |  |  | MENA |  |  | APAC |  |  | Consolidated |
Revenue |  | $ | 130,389 |  |  | $ | 121,746 |  |  | $ | 71,494 |  |  | $ | 59,860 |  |  | $ | 383,489 |
Compensation and related cost |  |  | (49,144 | ) |  |  | (45,726 | ) |  |  | (25,458 | ) |  |  | (22,907 | ) |  |  |  |
Cost of product, materials, and supplies |  |  | (33,736 | ) |  |  | (41,426 | ) |  |  | (15,941 | ) |  |  | (23,172 | ) |  |  |  |
Other (1) |  |  | (13,132 | ) |  |  | (9,393 | ) |  |  | (5,557 | ) |  |  | (2,995 | ) |  |  |  |
Total Segment EBITDA |  | $ | 34,377 |  |  | $ | 25,201 |  |  | $ | 24,538 |  |  | $ | 10,786 |  |  | $ | 94,902 |
Corporate costs (2) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (31,300 | )
Equity in income of joint ventures |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 3,858 |
Depreciation and amortization expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (40,146 | )
Merger and integration expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (2,161 | )
Severance and other expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (5,062 | )
Stock-based compensation expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (5,070 | )
Foreign exchange losses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (2,743 | )
Other expenses, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 485 |
Interest and finance expense, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (3,152 | )
Income before income taxes |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 9,611 |
(1) | Other segment expenses consists primarily of facilities, sales and purchase tax, motor vehicles, insurance, professional and other costs.
(2) | Corporate costs include the costs of running our corporate head office and other central functions that support the operating segments but are not attributable to a particular operating segment, including central product line management, research, engineering and development, logistics, sales and marketing and health and safety.
The following table presents total assets by geographic region and assets held centrally. Assets held centrally includes certain property plant and equipment, investments in joint ventures, collateral deposits, income tax related balances, corporate cash and cash equivalents, accounts receivable and other current and non-current assets, which are not included in the measure of segment assets reviewed by the CODM:
|  | March 31, |  |  | December 31, |
|  | 2025 |  |  | 2024 |
NLA |  | $ | 787,578 |  |  | $ | 793,666 |
ESSA |  |  | 546,367 |  |  |  | 581,866 |
MENA |  |  | 426,792 |  |  |  | 425,266 |
APAC |  |  | 202,656 |  |  |  | 221,601 |
Assets held centrally |  |  | 329,693 |  |  |  | 311,142 |
Total |  | $ | 2,293,086 |  |  | $ | 2,333,541 |
The following table presents our capital expenditures disaggregated by our operating segments (in thousands):
|  | Three Months Ended March 31, |
|  | 2025 |  |  | 2024 |
NLA |  | $ | 16,163 |  |  | $ | 9,878 |
ESSA |  |  | 7,090 |  |  |  | 5,774 |
MENA |  |  | 5,717 |  |  |  | 9,233 |
APAC |  |  | 3,357 |  |  |  | 3,431 |
Assets held centrally |  |  | 785 |  |  |  | 2,423 |
Total |  | $ | 33,112 |  |  | $ | 30,739 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482810/280-10-50-21 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name 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