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Note 5 - Business Segment Reporting
 6 Months Ended
Jun. 30, 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 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 present 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 June 30, 2025

  
   

NLA

    

ESSA

    

MENA

    

APAC

    

Consolidated

  

Revenue

   $ 142,582     $ 132,367     $ 91,016     $ 56,775     $ 422,740  

Compensation and related cost

     (58,228 )     (48,261 )     (30,070 )     (21,961 )        

Cost of product, materials, and supplies

     (35,061 )     (31,460 )     (21,566 )     (14,624 )        

Other (1)

     (15,384 )     (13,011 )     (6,809 )     (5,396 )        

Total Segment EBITDA

   $ 33,909     $ 39,635     $ 32,571     $ 14,794     $ 120,909  

Corporate costs (2)

                                     (29,853 )

Equity in income of joint ventures

                                     3,395  

Depreciation and amortization expense

                                     (46,716 )

Merger and integration expense

                                     (2,267 )

Severance and other expense

                                     (6,711 )

Stock-based compensation expense

                                     (7,314 )

Foreign exchange gain

                             4,518  

Other income, net

                             280  

Interest and finance expense, net

                                     (4,279 )

Income before income taxes

                                   $ 31,962  

 

   

Three Months Ended June 30, 2024

  
   

NLA

    

ESSA

    

MENA

    

APAC

    

Consolidated

  

Revenue

   $ 156,990     $ 168,431     $ 81,429     $ 62,792     $ 469,642  

Compensation and related cost

     (54,963 )     (48,294 )     (29,650 )     (24,099 )        

Cost of product, materials, and supplies

     (45,198 )     (73,728 )     (17,411 )     (19,564 )        

Other (1)

     (12,355 )     (11,412 )     (5,757 )     (3,881 )        

Total Segment EBITDA

   $ 44,474     $ 34,997     $ 28,611     $ 15,248     $ 123,330  

Corporate costs (2)

                                     (33,636 )

Equity in income of joint ventures

                                     4,856  

Depreciation and amortization expense

                                     (40,647 )

Merger and integration expense

                                     (8,789 )

Severance and other income

                             236  

Stock-based compensation expense

                                     (7,350 )

Foreign exchange losses

                                     (5,447 )

Other income, net

                             334  

Interest and finance expense, net

                                     (3,666 )

Income before income taxes

                                   $ 29,221  

 

   

Six Months Ended June 30, 2025

  
   

NLA

    

ESSA

    

MENA

    

APAC

    

Consolidated

  

Revenue

   $ 276,860     $ 244,740     $ 184,570     $ 107,442     $ 813,612  

Compensation and related cost

     (112,542 )     (92,096 )     (62,862 )     (42,333 )        

Cost of product, materials, and supplies

     (70,672 )     (60,442 )     (41,555 )     (29,082 )        

Other (1)

     (29,352 )     (23,379 )     (13,414 )     (10,371 )        

Total Segment EBITDA

   $ 64,294     $ 68,823     $ 66,739     $ 25,656     $ 225,512  

Corporate costs (2)

                                     (61,934 )

Equity in income of joint ventures

                                     7,101  

Depreciation and amortization expense

                                     (92,137 )

Merger and integration expense

                                     (4,007 )

Severance and other expense

                                     (12,793 )

Stock-based compensation expense

                                     (14,282 )

Foreign exchange gain

                                     2,530  

Other income, net

                                     1,934  

Interest and finance expense, net

                                     (7,730 )

Income before income taxes

                                   $ 44,194  

 

   

Six Months Ended June 30, 2024

  
   

NLA

    

ESSA

    

MENA

    

APAC

    

Consolidated

  

Revenue

   $ 287,379     $ 290,177     $ 152,923     $ 122,652     $ 853,131  

Compensation and related cost

     (104,107 )     (94,020 )     (55,108 )     (47,006 )        

Cost of product, materials, and supplies

     (78,934 )     (115,154 )     (33,352 )     (42,736 )        

Other (1)

     (25,487 )     (20,805 )     (11,314 )     (6,876 )        

Total Segment EBITDA

   $ 78,851     $ 60,198     $ 53,149     $ 26,034     $ 218,232  

Corporate costs (2)

                                     (64,936 )

Equity in income of joint ventures

                                     8,714  

Depreciation and amortization expense

                                     (80,793 )

Merger and integration expense

                                     (10,950 )

Severance and other expense

                                     (4,826 )

Stock-based compensation expense

                                     (12,420 )

Foreign exchange losses

                                     (8,190 )

Other income, net

                                     819  

Interest and finance expense, net

                                     (6,818 )

Income before income taxes

                                   $ 38,832  

 

(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:

 

   

June 30,

    

December 31,

  
   

2025

    

2024

  

NLA

   $ 798,602     $ 793,666  

ESSA

     571,744       581,866  

MENA

     419,920       425,266  

APAC

     219,782       221,601  

Assets held centrally

     328,174       311,142  

Total

   $ 2,338,222     $ 2,333,541  

 

The following table presents our capital expenditures disaggregated by our operating segments (in thousands):

 

   

Six Months Ended June 30,

  
   

2025

    

2024

  

NLA

   $ 26,605     $ 29,730  

ESSA

     11,037       14,797  

MENA

     9,152       14,513  

APAC

     6,730       5,404  

Assets held centrally

     792       2,663  

Total

   $ 54,316     $ 67,107