ChampionX Reports Fourth Quarter and Full Year 2023

ChampionX Reports Fourth Quarter and Full Year 2023

  • Fourth-quarter revenue of $943.6 million decreased 4% year-over-year, flat sequentially
  • Fourth-quarter net income attributable to ChampionX of $77.2 million increased 14% year-over-year, and decreased 1% sequentially
  • Fourth-quarter adjusted EBITDA of $198.1 million increased 10% year-over-year, flat sequentially
  • Fourth-quarter cash from operating activities of $169.0 million and free cash flow of $139.8 million
  • Full-year net income attributable to ChampionX of $314.2 million increased 103% year-over-year
  • Full-year adjusted EBITDA of $771.2 million increased 25% year-over-year
  • Full-year cash from operating activities of $540.3 million and free cash flow of $412.5 million
  • Repurchased $118 million of common stock in Q4’23 and $277 million in full-year 2023
  • Returned $343 million of cash to our shareholders in 2023, representing 63% of cash flow from operating activities and 83% of free cash flow
  • Board approved increase in share repurchase program authorization to $1.5 billion
  • Board approved a 12% increase in regular quarterly dividend to $0.095 per share

THE WOODLANDS, Texas, Feb. 05, 2024 (GLOBE NEWSWIRE) — ChampionX Corporation (NASDAQ: CHX) (“ChampionX” or the “Company”) today announced fourth quarter of 2023 and full year 2023 results. For the fourth quarter of 2023, revenue was $943.6 million, net income attributable to ChampionX was $77.2 million, and adjusted EBITDA was $198.1 million. Income before income taxes margin was 12.1%, and adjusted EBITDA margin was 21.0%. Cash provided by operating activities was $169.0 million, and free cash flow was $139.8 million.

CEO Commentary

“2023 was a year of continued strong earnings momentum for ChampionX as we delivered extremely robust adjusted EBITDA growth with differentiated adjusted EBITDA margin expansion, strong free cash flow generation, and increased capital returns to our shareholders. I want to thank all our worldwide employees for their continued dedication and commitment to serving our customers and communities well,” ChampionX’s President and Chief Executive Officer Sivasankaran “Soma” Somasundaram said.

“During the fourth quarter of 2023, we generated revenue of $944 million, up slightly sequentially and down 4% year-over-year. International revenue increased 6% sequentially, driven by seasonal strength in our Production Chemical Technologies business which grew 8% in international markets during the quarter. In North America, 2% sequential growth in Production Chemical Technologies was offset by typical seasonal declines in our Production & Automation Technologies and Drilling Technologies businesses into the year-end holidays. We generated net income attributable to ChampionX of $77 million, which increased 14% year-over-year and decreased 1% sequentially, and adjusted EBITDA of $198 million, which increased 10% year-over-year, and was flat sequentially. Our income before income taxes margin improved by 39 basis point sequentially, and our adjusted EBITDA margin was 21%, flat sequentially, and representing our highest adjusted EBITDA margin level since the ChampionX merger.

“We once again demonstrated our strong cash flow profile. Cash flow from operating activities was $169 million during the fourth quarter, which represented 219% of net income attributable to ChampionX. We generated free cash flow of $140 million during the fourth quarter, converting 71% of our adjusted EBITDA for the period. We returned $135 million of cash to our shareholders in the fourth quarter, through our regular cash dividend of $17 million and approximately $118 million of ChampionX share repurchases. For the full year 2023, we returned $343 million of cash to our shareholders, representing 63% of cash flow from operating activities and 83% of our free cash flow.

“We remain committed to return at least 60% of free cash flow to shareholders through-the-cycle. Consistent with this commitment, we announced today that our Board of Directors approved an increase to our share repurchase program, which authorizes ChampionX to repurchase up to $1.5 billion of its outstanding common stock, which is an increase of $750 million to the program previously increased in the fourth quarter of 2022. In addition, I am pleased to announce that we are increasing our regular cash dividend by 12%, which reflects confidence in our demonstrated strong and consistent free cash flow generation capability. Our balance sheet remains strong and we ended the year with $959 million of liquidity, including $289 million of cash and approximately $670 million of available capacity on our revolving credit facility.

We expect 2024 to be a positive growth year, driven by the constructive market environment, particularly for our international businesses, and expect our adjusted EBITDA and adjusted EBITDA margin to progressively improve through the year. As we look to the first quarter, we expect typical seasonal declines in our international operations, partially offset by sequential improvement in our North American businesses. On a consolidated basis, in the first quarter, we expect revenue to be between $908 million and $938 million. We expect adjusted EBITDA of $179 million to $189 million. We expect our 2024 cash generation to be strong, converting at least 50% of our adjusted EBITDA to free cash flow, and we remain committed to returning at least 60% of our free cash flow to our shareholders during the year.

We are excited about the positive revenue outlook driven by multi-year healthy fundamentals for our sector. This, combined with our productivity efforts, drives our confidence in delivering continued earnings growth, adjusted EBITDA margin expansion and strong cash generation. Our high adjusted margin, production-focused equipment, technology and chemicals portfolio is built to deliver attractive earnings and robust free cash flow reliably through the cycle.   This, in turn, supports value creation for our shareholders through a disciplined capital allocation framework, with clear priorities for capital deployment, including high-return investment and returning cash to shareholders.   ChampionX is well positioned for profitable growth by helping our customers maximize the value of their producing assets in sustainable and cost-effective ways leveraging our technology, digital and emissions capabilities and first-class customer service.   I am excited about the year ahead given the resiliency of the cycle as well as increasing needs for ChampionX solutions and I remain honored to lead our remarkable team”

Fourth Quarter Highlights

Production Chemical Technologies

Production Chemical Technologies revenue in the fourth quarter of 2023 was $634.1 million, an increase of $29.9 million, or 5%, sequentially, due to seasonally higher volumes in certain international markets and higher volumes in North America.

Segment operating profit was $102.2 million and adjusted segment EBITDA was $139.1 million. Segment operating profit margin was 16.1%, an increase of 46 basis points, sequentially, and adjusted segment EBITDA margin was 21.9%, essentially flat, sequentially, in each case due to volumes and product mix.

Production & Automation Technologies

Production & Automation Technologies revenue in the fourth quarter of 2023 was $241.3 million, a decrease of $14.9 million, or 6%, sequentially, due primarily to seasonality in our North American businesses into the year-end holidays.

Revenue from digital products was $52.7 million in the fourth quarter of 2023, a decrease of $5.4 million, or 9%, compared to $58.0 million in the third quarter of 2023, due primarily to seasonality into the year-end holidays.

Segment operating profit was $22.1 million, and adjusted segment EBITDA was $52.8 million. Segment operating profit margin was 9.2%, a decrease of 188 basis points, sequentially, and adjusted segment EBITDA margin was 21.9%, a decrease of 126 basis points, sequentially, in each case due to lower volumes seasonally and product mix.

Drilling Technologies

Drilling Technologies revenue in the fourth quarter of 2023 was $46.8 million, a decrease of $8.0 million, or 15%, sequentially, due to lower rig count in U.S. land and end of year inventory destocking.

Segment operating profit was $8.7 million, and adjusted segment EBITDA was $10.4 million. Segment operating profit margin was 18.5%, a decrease of 380 basis points, sequentially, and adjusted segment EBITDA margin was 22.1%, a decrease of 300 basis points, sequentially, in each case due to lower volumes.

Reservoir Chemical Technologies

Reservoir Chemical Technologies revenue in the fourth quarter of 2022 was $21.4 million, a decrease of $3.7 million, or 15%, sequentially, due primarily to lower product volumes into the year-end holidays.

Segment operating profit was $3.9 million, and adjusted segment EBITDA was $5.5 million. Segment operating profit margin was 18.3%, as compared to 9.8% in the prior quarter, and adjusted segment EBITDA margin was 25.7%, an increase of 897 basis points, sequentially, in each case due to favorable product mix.

Share Repurchase Program

ChampionX announces that our Board of Directors approved an increase to our share repurchase program (the “Share Repurchase Program”).   Pursuant to such increase, ChampionX is authorized to repurchase up to $1.5 billion of its outstanding common stock, representing an increase of $750 million to the Share Repurchase Program previously increased on October 24, 2022.   The increased share repurchase authority is effective immediately.   ChampionX repurchased $118 million of its outstanding common stock during the fourth quarter of 2023, with a total of $457 million repurchased under the Share Repurchase Program since its inception, implying a remaining authorization of over $1 billion, incorporating today’s announcement.

Repurchases under the Share Repurchase Program may be made, from time to time, in amounts and at prices ChampionX deems appropriate and will be subject to a variety of factors, including the availability of excess free cash, the market price of the Company’s common stock, general market and economic conditions, applicable requirements, and other business conditions. The Share Repurchase Program may be suspended, modified or discontinued at any time without prior notice.

Dividend

ChampionX also announces that our Board of Directors has declared an increased regular quarterly dividend of $0.095 per share on the Company’s common stock, par value $0.01 per share, to be paid on April 26, 2024 to shareholders of record on April 5, 2024.

Other Business Highlights

Chemical Technologies

  • Continued to strengthen its market-leading production chemicals position in deepwater through the award of various flow assurance chemistries to treat three new U.S. Gulf of Mexico subsea tiebacks, each connecting back to a different host platform.
  • Significantly strengthened its market position with an independent Canadian producer looking for consistent technical support across its asset base. The customer’s positive experience with ChampionX, coupled with our disciplined customer account management process, resulted in Chemical Technologies being awarded a sole supply agreement.
  • Awarded an additional three-year contract extension with a customer in Australia which Chemical Technologies has served for approximately four decades. The contract extension award was as a result of detailed account management and strong customer value delivery.

Production & Automation Technologies

  • Installed its Pro-Rod breakthrough product, AnXTM corrosion-resistant coiled rod, in multiple wells in Oman operated by a large NOC, demonstrating the effectiveness and reliability of the technology in some of the world’s most extreme and corrosive environments. Pro-Rod is a leader in anti-corrosion technology, and AnXTM is a step-change in sucker rod corrosion control, allowing for meaningful improvements in mean time to failure in rod-driven wells.
  • Secured the adoption by a large IOC of our UNBRIDLED ESP Systems’ HIGH RISE™ Kronos technology as their primary gas-handling pump for high gas-to-oil ESP applications in unconventional wells. Kronos is a specialized rotodynamic ESP gas handling pump that compresses gas slugs more effectively by increasing fluid pressure and priming the fluid stream. By preventing gas from breaking out of solution, the production pump can handle more gas. Kronos handles up to 75% gas volume fraction (GVF) before gas locking, providing 50% greater system gas handling capability, on average. Kronos also provides better pump efficiency at higher GVF, which reduces power consumption.
  • Closed the first commercial sale of the new Autonomous Chemical Injection Optimization feature within Theta Production Optimization’s XSPOC™ production optimization software, which allows producers to adjust automatically their chemical injection rates to dynamic parameters being tracked in the software, such as production volumes or temperature. This solution was instrumental in providing a Permian-based operator with intelligent dosing, rather than fixed dosage rates, ensuring that the correct amount of chemicals was delivered proportionately to the well’s dynamic productivity. Initial implementation has shown promising results of improving chemical assurance while effectively managing cost efficiency.
  • Secured commitment from an IOC for a large order of 10,000-psi radial flow lubricators for use in the customer’s South Texas operations, for which the majority have been installed on both new well completions and gas lift conversions. Engineered for maximum operational adaptability and durability, the “drop-in” design helps operators manage production from post-completion flowback through gas lift, to plunger-assisted gas lift (PAGL), and finally to plunger lift without having to modify the wellhead or activate a workover rig. The units are fast and easy to install on new wells, which minimizes well down time and reduces on-site welding, pipe make-up requirements, and roustabout time by 50%. The lubricators also contain internal adjustment sleeves to easily increase or decrease the flow area to adapt to changing well production profiles.
  • Awarded a significant customer commitment with a large operator for supply and service of our high-pressure Rod-Lock BOPs in Argentina’s Vaca Muerta field. This industry-leading technology enhances safety and protects adjacent wells from frac breakthrough, and this customer commitment demonstrates our strong partnership and ability to offer innovative and reliable solutions to customers in both domestic and international unconventional resource plays.
  • Won a contract expansion with an IOC in the Delaware Basin for use of our Phantom single-point chemical injection systems on nearly 100 wells. ChampionX has an exclusive distribution agreement for the FlowCoreTM Phantom technology, which features 99% injection accuracy and a dual communications system that allows for autonomously adjusting injection rates in real time based on production data from the customer’s Scada system. This capability is especially important for the dynamic well conditions in unconventional wells. The injection system also uses a cloud-based platform where the chemical provider can monitor chemical tank levels, injection variances, and potential injection system reliability issues.
  • Exited 2023 with our Emissions Technologies business serving 60 operators worldwide, illustrating our extensive market presence and strong customer engagement.

Drilling Technologies

  • Full-year 2023 diamond bearing sales increased by more than 40% year-over-year.

Other

  • ChampionX Middle East was awarded the OPAL Award for best practices in 2023 in the “Omanisation” Category for the Large Contractor sector. The award recognizes the most innovative policies and procedures implemented towards recruiting, developing and retaining Omani workforce.
  • ChampionX was named a winner of the Frost & Sullivan 2023 Enlightened Growth Leadership Award for its leadership in chemical solutions, artificial lift systems, and engineering solutions. The award recognizes organizations that have embraced emerging technologies, and generated opportunities for all while demonstrating best practices for sustainable growth.

Conference Call Details

ChampionX Corporation will host a conference call on Tuesday, February 6, 2024, to discuss its fourth quarter and full year 2023 financial results and outlook. The call will begin at 9:00 a.m. Eastern Time. Presentation materials that supplement the conference call will be available on ChampionX’s website at investors.championx.com. 

To listen to the call via a live webcast, please visit ChampionX’s website at investor.championx.com. The call will also be available by dialing 1-888-259-6580 in the United States and Canada or 1-416-764-8624 for international calls. Please call approximately 15 minutes prior to the scheduled start time and reference ChampionX conference call number 83686329.

A replay of the conference call will be available for 30 days on ChampionX’s website.

About Non-GAAP Measures

In addition to financial results determined in accordance with generally accepted accounting principles in the United States (“GAAP”), this news release presents non-GAAP financial measures. Management believes that adjusted EBITDA, adjusted EBITDA margin, adjusted net income attributable to ChampionX and adjusted diluted earnings per share attributable to ChampionX, provide useful information to investors regarding the Company’s financial condition and results of operations because they reflect the core operating results of our businesses and help facilitate comparisons of operating performance across periods. In addition, free cash flow, free cash flow to adjusted EBITDA ratio, and free cash flow to revenue ratio are used by management to measure our ability to generate positive cash flow for debt reduction and to support our strategic objectives. Although management believes the aforementioned non-GAAP financial measures are good tools for internal use and the investment community in evaluating ChampionX’s overall financial performance, the foregoing non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, other measures of financial performance prepared in accordance with GAAP. A reconciliation of these non-GAAP measures to the most directly comparable GAAP measures is included in the accompanying financial tables.

This press release contains certain forward-looking non-GAAP financial measures, including adjusted EBITDA. The Company has not provided projected net income attributable to ChampionX or a reconciliation of projected adjusted EBITDA. Management cannot predict with a reasonable degree of accuracy certain of the necessary components of net income attributable to ChampionX, such as depreciation and amortization expense. As such, a reconciliation of projected adjusted EBITDA to projected net income attributable to ChampionX is not available without unreasonable effort. The actual amount of depreciation and amortization, highly inflationary currency changes, and other amounts excluded from adjusted EBITDA could have a significant impact on net income attributable to ChampionX.

About ChampionX

ChampionX is a global leader in chemistry solutions, artificial lift systems, and highly engineered equipment and technologies that help companies drill for and produce oil and gas safely, efficiently, and sustainably around the world. ChampionX’s expertise, innovative products, and digital technologies provide enhanced oil and gas production, transportation, and real-time emissions monitoring throughout the lifecycle of a well. To learn more about ChampionX, visit our website at www.ChampionX.com

Forward-Looking Statements

This news release contains statements relating to future actions and results, which are “forward-looking statements” within the meaning of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such statements relate to, among other things, ChampionX’s market position and growth opportunities.  Forward-looking statements include statements related to ChampionX’s expectations regarding the performance of the business, financial results, liquidity and capital resources of ChampionX. Forward-looking statements are subject to inherent risks and uncertainties that could cause actual results to differ materially from current expectations, including, but not limited to, changes in economic, competitive, strategic, technological, tax, regulatory or other factors that affect the operations of ChampionX’s businesses. You are encouraged to refer to the documents that ChampionX files from time to time with the Securities and Exchange Commission (“SEC”), including the “Risk Factors” in ChampionX’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, and in ChampionX’s other filings with the SEC. Readers are cautioned not to place undue reliance on ChampionX’s forward-looking statements. Forward-looking statements speak only as of the day they are made and ChampionX undertakes no obligation to update any forward-looking statement, except as required by applicable law.        

Investor Contact: Byron Pope
[email protected] 
281-602-0094

Media Contact: John Breed
[email protected] 
281-403-5751

 
CHAMPIONX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(UNAUDITED)
 
  Three Months Ended   Years Ended
  Dec 31,   Sep 30,   Dec 31,   December 31,
(in thousands, except per share amounts)   2023       2023       2022       2023       2022  
Revenue $ 943,555     $ 939,783     $ 985,855     $ 3,758,285     $ 3,805,948  
Cost of goods and services   661,337       647,923       703,232       2,618,646       2,907,284  
Gross profit   282,218       291,860       282,623       1,139,639       898,664  
Selling, general and administrative expense   147,415       162,317       146,835       633,032       592,282  
Goodwill impairment               39,617             39,617  
Long-lived asset impairments and loss on disposal groups               1,978       12,965       18,493  
Interest expense, net   13,808       13,744       11,622       54,562       45,204  
Foreign currency transaction losses (gains), net   14,651       7,992       (2,687 )     36,334       8,555  
Other income, net   (7,584 )     (1,994 )     (2,019 )     (21,078 )     (2,293 )
Income before income taxes   113,928       109,801       87,277       423,824       196,806  
Provision for income taxes   35,771       29,009       21,008       105,105       40,243  
Net income   78,157       80,792       66,269       318,719       156,563  
Net income (loss) attributable to noncontrolling interest   959       3,081       (1,588 )     4,481       1,594  
Net income attributable to ChampionX $ 77,198     $ 77,711     $ 67,857     $ 314,238     $ 154,969  
                   
Earnings per share attributable to ChampionX:                  
Basic $ 0.40     $ 0.40     $ 0.34     $ 1.60     $ 0.77  
Diluted $ 0.39     $ 0.39     $ 0.33     $ 1.57     $ 0.75  
                   
Weighted-average shares outstanding:                  
Basic   193,191       195,881       199,232       196,083       201,740  
Diluted   196,649       199,592       204,389       199,906       207,259  
 
CHAMPIONX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
 
  December 31,
(in thousands)   2023       2022  
Assets      
Current Assets:      
Cash and cash equivalents $ 288,557     $ 250,187  
Receivables, net   534,534       601,061  
Inventories, net   521,549       542,543  
Prepaid expenses and other current assets   80,777       104,790  
Total current assets   1,425,417       1,498,581  
       
Property, plant and equipment, net   773,552       734,810  
Goodwill   669,064       679,488  
Intangible assets, net   243,553       305,010  
Other non-current assets   130,116       169,594  
Total assets $ 3,241,702     $ 3,387,483  
       
Liabilities      
Current portion of long-term debt $ 6,203     $ 6,250  
Accounts payable   451,680       469,566  
Other current liabilities   324,866       383,160  
Total current liabilities   782,749       858,976  
       
Long-term debt   594,283       621,702  
Other long-term liabilities   203,639       229,590  
Stockholders’ equity:      
ChampionX stockholders’ equity   1,676,622       1,694,550  
Noncontrolling interest   (15,591 )     (17,335 )
Total liabilities and equity $ 3,241,702     $ 3,387,483  
 
CHAMPIONX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 
  Years Ended December 31,
(in thousands)   2023       2022  
Cash flows from operating activities:      
Net income $ 318,719     $ 156,563  
Depreciation and amortization   235,936       241,880  
Loss on disposal groups   12,965       16,515  
Goodwill impairment         39,617  
Loss on debt extinguishment and modification         4,043  
Gain on disposal of fixed assets   (1,046 )     (1,683 )
Deferred income taxes   (22,272 )     (45,282 )
Receivables   70,021       (23,988 )
Inventories   18,753       (52,426 )
Accounts payable   (53,891 )     (13,366 )
Other assets   20,395       (1,838 )
Leased assets   (51,247 )     (25,275 )
Other operating items, net   (8,062 )     118,600  
Net cash provided by operating activities   540,271       413,360  
       
Cash flows from investing activities:      
Capital expenditures   (142,324 )     (102,808 )
Proceeds from sale of fixed assets   14,545       18,017  
Acquisitions, net of cash acquired         (3,198 )
Net cash used for investing activities   (127,779 )     (87,989 )
       
Cash flows from financing activities:      
Proceeds from long-term debt   15,500       995,038  
Repayment of long-term debt   (45,176 )     (1,092,950 )
Payment of debt issuance costs   (1,028 )     (8,008 )
Repurchases of common stock   (277,575 )     (180,142 )
Dividends paid   (64,980 )     (45,594 )
Other   94       6,851  
Net cash used for financing activities   (373,165 )     (324,805 )
       
Effect of exchange rate changes on cash and cash equivalents   (957 )     (5,557 )
       
Net increase (decrease) in cash and cash equivalents   38,370       (4,991 )
Cash and cash equivalents at beginning of period   250,187       255,178  
Cash and cash equivalents at end of period $ 288,557     $ 250,187  
 
CHAMPIONX CORPORATION
BUSINESS SEGMENT DATA
(UNAUDITED)
 
  Three Months Ended   Years Ended
  Dec 31,   Sep 30,   Dec 31,   December 31,
(in thousands)   2023       2023       2022       2023       2022  
Segment revenue:                  
Production Chemical Technologies $ 634,137     $ 604,254     $ 636,539     $ 2,404,377     $ 2,347,526  
Production & Automation Technologies   241,294       256,148       244,181       1,003,146       954,646  
Drilling Technologies   46,821       54,869       53,797       215,721       229,479  
Reservoir Chemical Technologies   21,402       25,093       25,698       96,154       145,197  
Corporate and other   (99 )     (581 )     25,640       38,887       129,100  
Total revenue $ 943,555     $ 939,783     $ 985,855     $ 3,758,285     $ 3,805,948  
                   
Income (loss) before income taxes:                
Segment operating profit (loss):                  
Production Chemical Technologies $ 102,179     $ 94,560     $ 96,418     $ 350,216     $ 239,936  
Production & Automation Technologies   22,110       28,299       18,104       118,409       89,133  
Drilling Technologies   8,679       12,255       9,426       45,481       54,512  
Reservoir Chemical Technologies   3,907       2,461       (16,884 )     10,541       (90,212 )
Total segment operating profit   136,875       137,575       107,064       524,647       293,369  
Corporate and other   9,139       14,030       8,165       46,261       51,359  
Interest expense, net   13,808       13,744       11,622       54,562       45,204  
Income before income taxes $ 113,928     $ 109,801     $ 87,277     $ 423,824     $ 196,806  
                   
Operating profit margin / income (loss) before income taxes margin:                  
Production Chemical Technologies   16.1 %     15.6 %     15.1 %     14.6 %     10.2 %
Production & Automation Technologies   9.2 %     11.0 %     7.4 %     11.8 %     9.3 %
Drilling Technologies   18.5 %     22.3 %     17.5 %     21.1 %     23.8 %
Reservoir Chemical Technologies   18.3 %     9.8 %     (65.7 )%     11.0 %     (62.1 )%
ChampionX Consolidated   12.1 %     11.7 %     8.9 %     11.3 %     5.2 %
                   
Adjusted EBITDA                  
Production Chemical Technologies $ 139,107     $ 133,101     $ 121,204     $ 506,991     $ 377,489  
Production & Automation Technologies   52,800       59,288       51,137       232,672       197,453  
Drilling Technologies   10,361       13,786       10,999       51,986       61,932  
Reservoir Chemical Technologies   5,501       4,198       3,460       18,498       6,000  
Corporate and other   (9,624 )     (12,837 )     (7,390 )     (38,926 )     (25,716 )
Adjusted EBITDA $ 198,145     $ 197,536     $ 179,410     $ 771,221     $ 617,158  
                   
Adjusted EBITDA margin                  
Production Chemical Technologies   21.9 %     22.0 %     19.0 %     21.1 %     16.1 %
Production & Automation Technologies   21.9 %     23.1 %     20.9 %     23.2 %     20.7 %
Drilling Technologies   22.1 %     25.1 %     20.4 %     24.1 %     27.0 %
Reservoir Chemical Technologies   25.7 %     16.7 %     13.5 %     19.2 %     4.1 %
ChampionX Consolidated   21.0 %     21.0 %     18.2 %     20.5 %     16.2 %

        

CHAMPIONX CORPORATION
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES
(UNAUDITED)

The Company defines adjusted EBITDA as net income (loss) plus (i) depreciation and amortization, (ii) interest expense, net, (iii) foreign currency transaction losses (gains), net, (iv) provision for income taxes, and (v) other material items that management believes do not reflect our core operating performance.

Previously, the Company defined adjusted EBITDA inclusive of the impact of foreign currency transaction gains and losses. However, beginning with the fourth quarter of 2023, the Company revised the definition in order to remove the impact related to foreign currency fluctuations as we believe it provides a more consistent basis for comparing underlying operating performance on a currency neutral basis across periods. The comparative periods were also adjusted based on the revised definition. See the following tables for the reconciliation of adjusted EBITDA for the current and historical periods using the revised definition.

  Three Months Ended   Years Ended
  Dec 31,   Sep 30,   Dec 31,   December 31,
(in thousands)   2023       2023       2022       2023       2022  
Net income attributable to ChampionX $ 77,198     $ 77,711     $ 67,857     $ 314,238     $ 154,969  
Pre-tax adjustments:                  
Loss on disposal groups (1)               1,978       12,965       18,493  
Russia sanctions compliance and impacts (2)   160       95       (2,909 )     1,209       928  
Goodwill impairment               39,617             39,617  
Loss on debt extinguishment and modification                           6,070  
Restructuring and other related charges   2,407       1,228       (16,784 )     13,387       65,158  
Merger integration costs               1,001       245       10,759  
Acquisition costs and related adjustments (3)   (6,817 )           (7,112 )     (12,670 )     (17,648 )
Intellectual property defense   638       220       27       1,545       781  
Merger-related indemnification responsibility         722             722        
Tulsa, Oklahoma storm damage   660       1,895             3,162        
Foreign currency transaction losses, net   14,651       7,992       574       36,334       9,110  
Tax impact of adjustments   (2,600 )     (2,702 )     3,604       (12,650 )     (20,940 )
Adjusted net income attributable to ChampionX   86,297       87,161       87,853       358,487       267,297  
Tax impact of adjustments   2,600       2,702       (3,604 )     12,650       20,940  
Net income (loss) attributable to noncontrolling interest   959       3,081       (1,588 )     4,481       1,594  
Depreciation and amortization   58,710       61,839       64,119       235,936       241,880  
Provision for income taxes   35,771       29,009       21,008       105,105       40,243  
Interest expense, net   13,808       13,744       11,622       54,562       45,204  
Adjusted EBITDA $ 198,145     $ 197,536     $ 179,410     $ 771,221     $ 617,158  

_______________________

(1)   Amounts represent the loss recorded to properly adjust the carrying value of our Chemical Technologies operations in Russia to the lower of carrying value or fair value less costs to sell.
(2)   Includes charges incurred related to legal and professional fees to comply with, as well as additional foreign currency exchange losses associated with, the sanctions imposed in Russia.
(3)   Includes revenue associated with the amortization of a liability established as part of the merger transaction with Ecolab Inc. (“Ecolab”) to acquire the Chemical Technologies business, representing unfavorable terms under the Cross Supply Agreement, as well as costs incurred for the acquisition of businesses. During the fourth quarter of 2023, we recorded a fair value adjustment to contingent consideration on a prior acquisition as well as the settlement of an item pursuant to the tax matters agreement with Ecolab.
  Three Months Ended   Years Ended
  Dec 31,   Sep 30,   Dec 31,   December 31,
(in thousands)   2023       2023       2022       2023       2022  
Diluted earnings per share attributable to ChampionX $ 0.39     $ 0.39     $ 0.33     $ 1.57     $ 0.75  
Per share adjustments:                  
Loss on disposal groups               0.01       0.06       0.09  
Russia sanctions compliance and impacts               (0.01 )            
Goodwill impairment               0.19             0.19  
Loss on debt extinguishment and modification                           0.03  
Restructuring and other related charges   0.01       0.01       (0.08 )     0.07       0.31  
Merger integration costs                           0.05  
Acquisition costs and related adjustments   (0.03 )           (0.03 )     (0.06 )     (0.09 )
Intellectual property defense                     0.01        
Merger-related indemnification responsibility         0.01                    
Tulsa, Oklahoma storm damage   0.01       0.01             0.02        
Foreign currency transaction losses   0.07       0.04             0.18       0.04  
Tax impact of adjustments   (0.01 )     (0.02 )     0.02       (0.06 )     (0.08 )
Adjusted diluted earnings per share attributable to ChampionX $ 0.44     $ 0.44     $ 0.43     $ 1.79     $ 1.29  
 
CHAMPIONX CORPORATION
RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
 
  Three Months Ended   Years Ended
  Dec 31,   Sep 30,   Dec 31,   December 31,
(in thousands)   2023       2023       2022       2023       2022  
Production Chemical Technologies                  
Segment operating profit $ 102,179     $ 94,560     $ 96,418     $ 350,216     $ 239,936  
Non-GAAP adjustments   11,194       9,079       1,703       51,717       45,678  
Depreciation and amortization   25,734       29,462       23,083       105,058       91,875  
Segment adjusted EBITDA $ 139,107     $ 133,101     $ 121,204     $ 506,991     $ 377,489  
                   
Production & Automation Technologies                  
Segment operating profit $ 22,110     $ 28,299     $ 18,104     $ 118,409     $ 89,133  
Non-GAAP adjustments   1,231       2,089       3,978       5,246       4,728  
Depreciation and amortization   29,459       28,900       29,055       109,017       103,592  
Segment adjusted EBITDA $ 52,800     $ 59,288     $ 51,137     $ 232,672     $ 197,453  
                   
Drilling Technologies                  
Segment operating profit $ 8,679     $ 12,255     $ 9,426     $ 45,481     $ 54,512  
Non-GAAP adjustments   109       (8 )     (6 )     313       781  
Depreciation and amortization   1,573       1,539       1,579       6,192       6,639  
Segment adjusted EBITDA $ 10,361     $ 13,786     $ 10,999     $ 51,986     $ 61,932  
                   
Reservoir Chemical Technologies                  
Segment operating profit $ 3,907     $ 2,461     $ (16,884 )   $ 10,541     $ (90,212 )
Non-GAAP adjustments   4       72       15,590       1,486       81,550  
Depreciation and amortization   1,590       1,665       4,754       6,471       14,662  
Segment adjusted EBITDA $ 5,501     $ 4,198     $ 3,460     $ 18,498     $ 6,000  
                   
Corporate and other                  
Segment operating profit $ (22,947 )   $ (27,774 )   $ (19,787 )   $ (100,823 )   $ (96,563 )
Non-GAAP adjustments   (839 )     920       (4,873 )     (1,863 )     531  
Depreciation and amortization   354       273       5,648       9,198       25,112  
Interest expense, net   13,808       13,744       11,622       54,562       45,204  
Segment adjusted EBITDA $ (9,624 )   $ (12,837 )   $ (7,390 )   $ (38,926 )   $ (25,716 )
 
Free Cash Flow
 
  Three Months Ended   Years Ended
  Dec 31,   Sep 30,   Dec 31,   December 31,
(in thousands)   2023       2023       2022       2023       2022  
Free Cash Flow                  
Cash provided by operating activities $ 168,953     $ 163,030     $ 195,093     $ 540,271     $ 413,360  
Less: Capital expenditures, net of proceeds from sale of fixed assets   (29,142 )     (48,469 )     (26,463 )     (127,779 )     (84,791 )
Free cash flow $ 139,811     $ 114,561     $ 168,630     $ 412,492     $ 328,569  
                   
Cash From Operating Activities to Revenue Ratio                  
Cash provided by operating activities $ 168,953     $ 163,030     $ 195,093     $ 540,271     $ 413,360  
Revenue $ 943,555     $ 939,783     $ 985,855     $ 3,758,285     $ 3,805,948  
                   
Cash from operating activities to revenue ratio   18 %     17 %     20 %     14 %     11 %
                   
Free Cash Flow to Revenue Ratio                  
Free cash flow $ 139,811     $ 114,561     $ 168,630     $ 412,492     $ 328,569  
Revenue $ 943,555     $ 939,783     $ 985,855     $ 3,758,285     $ 3,805,948  
                   
Free cash flow to revenue ratio   15 %     12 %     17 %     11 %     9 %
                   
Free Cash Flow to Adjusted EBITDA Ratio                  
Free cash flow $ 139,811     $ 114,561     $ 168,630     $ 412,492     $ 328,569  
Adjusted EBITDA $ 198,145     $ 197,536     $ 179,410     $ 771,221     $ 617,158  
                   
Free cash flow to adjusted EBITDA ratio   71 %     58 %     94 %     53 %     53 %
 
CHAMPIONX CORPORATION
HISTORICAL BUSINESS SEGMENT DATA
(UNAUDITED)
 
  Three Months Ended   Year Ended
  Mar 31,   Jun 30,   Sep 30,   Dec 31,   Dec 31,
(in thousands)   2023       2023       2023       2023       2023  
Segment revenue:                  
Production Chemical Technologies   591,684       574,302       604,254       634,137     $ 2,404,377  
Production & Automation Technologies   251,548       254,156       256,148       241,294       1,003,146  
Drilling Technologies   56,707       57,324       54,869       46,821       215,721  
Reservoir Chemical Technologies   25,806       23,853       25,093       21,402       96,154  
Corporate and other   22,602       16,965       (581 )     (99 )     38,887  
Total revenue $ 948,347     $ 926,600     $ 939,783     $ 943,555     $ 3,758,285  
                   
Income (loss) before income taxes:                
Segment operating profit (loss):                  
Production Chemical Technologies   66,314       87,163       94,560       102,179     $ 350,216  
Production & Automation Technologies   34,792       33,208       28,299       22,110       118,409  
Drilling Technologies   11,887       12,660       12,255       8,679       45,481  
Reservoir Chemical Technologies   1,987       2,186       2,461       3,907       10,541  
Total segment operating profit   114,980       135,217       137,575       136,875       524,647  
Corporate and other   10,701       12,391       14,030       9,139       46,261  
Interest expense, net   12,466       14,544       13,744       13,808       54,562  
Income before income taxes $ 91,813     $ 108,282     $ 109,801     $ 113,928     $ 423,824  
                   
Operating profit margin / income (loss) before income taxes margin:                  
Production Chemical Technologies   11.2 %     15.2 %     15.6 %     16.1 %     14.6 %
Production & Automation Technologies   13.8 %     13.1 %     11.0 %     9.2 %     11.8 %
Drilling Technologies   21.0 %     22.1 %     22.3 %     18.5 %     21.1 %
Reservoir Chemical Technologies   7.7 %     9.2 %     9.8 %     18.3 %     11.0 %
ChampionX Consolidated   9.7 %     11.7 %     11.7 %     12.1 %     11.3 %
                   
Adjusted EBITDA                  
Production Chemical Technologies $ 113,608     $ 121,175     $ 133,101     $ 139,107     $ 506,991  
Production & Automation Technologies   59,943       60,641       59,288       52,800       232,672  
Drilling Technologies   13,463       14,376       13,786       10,361       51,986  
Reservoir Chemical Technologies   4,414       4,385       4,198       5,501       18,498  
Corporate and other   (6,569 )     (9,896 )     (12,837 )     (9,624 )     (38,926 )
Adjusted EBITDA $ 184,859     $ 190,681     $ 197,536     $ 198,145     $ 771,221  
                   
Adjusted EBITDA margin                  
Production Chemical Technologies   19.2 %     21.1 %     22.0 %     21.9 %     21.1 %
Production & Automation Technologies   23.8 %     23.9 %     23.1 %     21.9 %     23.2 %
Drilling Technologies   23.7 %     25.1 %     25.1 %     22.1 %     24.1 %
Reservoir Chemical Technologies   17.1 %     18.4 %     16.7 %     25.7 %     19.2 %
ChampionX Consolidated   19.5 %     20.6 %     21.0 %     21.0 %     20.5 %

        

  Three Months Ended   Year Ended
  Mar 31,   Jun 30,   Sep 30,   Dec 31,   Dec 31,
(in thousands)   2022       2022       2022       2022       2022  
Segment revenue:                  
Production Chemical Technologies   514,972       552,411       643,604       636,539     $ 2,347,526  
Production & Automation Technologies   220,349       242,399       247,717       244,181       954,646  
Drilling Technologies   56,859       57,858       60,965       53,797       229,479  
Reservoir Chemical Technologies   39,900       44,114       35,485       25,698       145,197  
Corporate and other   33,880       35,790       33,790       25,640       129,100  
Total revenue $ 865,960     $ 932,572     $ 1,021,561     $ 985,855     $ 3,805,948  
                   
Income (loss) before income taxes:                
Segment operating profit (loss):                  
Production Chemical Technologies $ 31,263     $ 25,606     $ 86,649     $ 96,418     $ 239,936  
Production & Automation Technologies   24,710       23,650       22,485       18,104       89,133  
Drilling Technologies   15,220       15,043       14,856       9,426       54,512  
Reservoir Chemical Technologies   (3,469 )     (8,147 )     (61,711 )     (16,884 )     (90,212 )
Total segment operating profit   67,724       56,152       62,279       107,064       293,369  
Corporate and other   11,794       17,896       13,354       8,165       51,359  
Interest expense, net   11,363       10,765       11,454       11,622       45,204  
Income before income taxes $ 44,567     $ 27,491     $ 37,471     $ 87,277     $ 196,806  
                   
Operating profit margin / income (loss) before income taxes margin:                  
Production Chemical Technologies   6.1 %     4.6 %     13.5 %     15.1 %     10.2 %
Production & Automation Technologies   11.2 %     9.8 %     9.1 %     7.4 %     9.3 %
Drilling Technologies   26.8 %     26.0 %     24.4 %     17.5 %     23.8 %
Reservoir Chemical Technologies   (8.7 )%     (18.5 )%     (173.9 )%     (65.7 )%     (62.1 )%
ChampionX Consolidated   5.1 %     2.9 %     3.7 %     8.9 %     5.2 %
                   
Adjusted EBITDA                  
Production Chemical Technologies $ 69,340     $ 80,743     $ 106,202     $ 121,204     $ 377,489  
Production & Automation Technologies   45,257       48,797       52,262       51,137       197,453  
Drilling Technologies   17,319       17,088       16,526       10,999       61,932  
Reservoir Chemical Technologies   (191 )     (300 )     3,031       3,460       6,000  
Corporate and other   (4,124 )     (5,809 )     (8,393 )     (7,390 )     (25,716 )
Adjusted EBITDA $ 127,601     $ 140,519     $ 169,628     $ 179,410     $ 617,158  
                   
Adjusted EBITDA margin                  
Production Chemical Technologies   13.5 %     14.6 %     16.5 %     19.0 %     16.1 %
Production & Automation Technologies   20.5 %     20.1 %     21.1 %     20.9 %     20.7 %
Drilling Technologies   30.5 %     29.5 %     27.1 %     20.4 %     27.0 %
Reservoir Chemical Technologies   (0.5 )%     (0.7 )%     8.5 %     13.5 %     4.1 %
ChampionX Consolidated   14.7 %     15.1 %     16.6 %     18.2 %     16.2 %

        

 
CHAMPIONX CORPORATION
HISTORICAL RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
 
  Three Months Ended   Year Ended
  Mar 31,   Jun 30,   Sep 30,   Dec 31,   Dec 31,
(in thousands)   2023       2023       2023       2023       2023  
Net income attributable to ChampionX $ 63,532     $ 95,797     $ 77,711     $ 77,198     $ 314,238  
Pre-tax adjustments:                  
Loss on disposal groups (1)   12,965                         12,965  
Russia sanctions compliance and impacts (2)   521       433       95       160       1,209  
Restructuring and other related charges   4,399       5,353       1,228       2,407       13,387  
Merger integration costs   245                         245  
Acquisition costs and related adjustments (3)   (3,512 )     (2,341 )           (6,817 )     (12,670 )
Intellectual property defense         687       220       638       1,545  
Merger-related indemnification responsibility               722             722  
Tulsa, Oklahoma storm damage         607       1,895       660       3,162  
Foreign currency transaction losses, net   9,252       4,439       7,992       14,651       36,334  
Tax impact of adjustments   (5,307 )     (2,041 )     (2,702 )     (2,600 )     (12,650 )
Adjusted net income attributable to ChampionX   82,095       102,934       87,161       86,297       358,487  
Tax impact of adjustments   5,307       2,041       2,702       2,600       12,650  
Net income (loss) attributable to noncontrolling interest   (388 )     829       3,081       959       4,481  
Depreciation and amortization   56,710       58,677       61,839       58,710       235,936  
Provision for income taxes   28,669       11,656       29,009       35,771       105,105  
Interest expense, net   12,466       14,544       13,744       13,808       54,562  
Adjusted EBITDA $ 184,859     $ 190,681     $ 197,536     $ 198,145     $ 771,221  
  Three Months Ended   Year Ended
  Mar 31,   Jun 30,   Sep 30,   Dec 31,   Dec 31,
(in thousands)   2022       2022       2022       2022       2022  
Net income attributable to ChampionX $ 36,702     $ 27,342     $ 23,068     $ 67,857     $ 154,969  
Pre-tax adjustments:                  
Loss on disposal groups (1)         22,924       (6,409 )     1,978       18,493  
Russia sanctions compliance and impacts (2)         5,457       (1,620 )     (2,909 )     928  
Goodwill impairment                     39,617       39,617  
Loss on debt extinguishment and modification         6,070                   6,070  
Restructuring and other related charges   9,107       5,302       67,533       (16,784 )     65,158  
Merger integration costs   5,241       3,865       652       1,001       10,759  
Acquisition costs and related adjustments (3)   (3,512 )     (3,512 )     (3,512 )     (7,112 )     (17,648 )
Intellectual property defense   363       376       15       27       781  
Foreign currency transaction losses, net   2,773       2,251       3,512       574       9,110  
Tax impact of adjustments   (2,934 )     (8,974 )     (12,636 )     3,604       (20,940 )
Adjusted net income attributable to ChampionX   47,740       61,101       70,603       87,853       267,297  
Tax impact of adjustments   2,934       8,974       12,636       (3,604 )     20,940  
Net income (loss) attributable to noncontrolling interest   1,471       1,554       157       (1,588 )     1,594  
Depreciation and amortization   57,699       59,530       60,532       64,119       241,880  
Provision for (benefit from) income taxes   6,394       (1,405 )     14,246       21,008       40,243  
Interest expense, net   11,363       10,765       11,454       11,622       45,204  
Adjusted EBITDA $ 127,601     $ 140,519     $ 169,628     $ 179,410     $ 617,158  
 
CHAMPIONX CORPORATION
HISTORICAL RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
 
  Three Months Ended   Year Ended
  Mar 31,   Jun 30,   Sep 30,   Dec 31,   Dec 31,
(in thousands)   2023       2023       2023       2023       2023  
Production Chemical Technologies                  
Segment operating profit $ 66,314     $ 87,163     $ 94,560     $ 102,179     $ 350,216  
Non-GAAP adjustments   23,115       8,329       9,079       11,194       51,717  
Depreciation and amortization   24,179       25,683       29,462       25,734       105,058  
Segment adjusted EBITDA $ 113,608     $ 121,175     $ 133,101     $ 139,107     $ 506,991  
                   
Production & Automation Technologies                  
Segment operating profit $ 34,792     $ 33,208     $ 28,299     $ 22,110     $ 118,409  
Non-GAAP adjustments   914       1,012       2,089       1,231       5,246  
Depreciation and amortization   24,237       26,421       28,900       29,459       109,017  
Segment adjusted EBITDA $ 59,943     $ 60,641     $ 59,288     $ 52,800     $ 232,672  
                   
Drilling Technologies                  
Segment operating profit $ 11,887     $ 12,660     $ 12,255     $ 8,679     $ 45,481  
Non-GAAP adjustments         212       (8 )     109       313  
Depreciation and amortization   1,576       1,504       1,539       1,573       6,192  
Segment adjusted EBITDA $ 13,463     $ 14,376     $ 13,786     $ 10,361     $ 51,986  
                   
Reservoir Chemical Technologies                  
Segment operating profit $ 1,987     $ 2,186     $ 2,461     $ 3,907     $ 10,541  
Non-GAAP adjustments   810       600       72       4       1,486  
Depreciation and amortization   1,617       1,599       1,665       1,590       6,471  
Segment adjusted EBITDA $ 4,414     $ 4,385     $ 4,198     $ 5,501     $ 18,498  
                   
Corporate and other                  
Segment operating profit $ (23,167 )   $ (26,935 )   $ (27,774 )   $ (22,947 )   $ (100,823 )
Non-GAAP adjustments   (969 )     (975 )     920       (839 )     (1,863 )
Depreciation and amortization   5,101       3,470       273       354       9,198  
Interest expense, net   12,466       14,544       13,744       13,808       54,562  
Segment adjusted EBITDA $ (6,569 )   $ (9,896 )   $ (12,837 )   $ (9,624 )   $ (38,926 )
 
CHAMPIONX CORPORATION
HISTORICAL RECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
 
  Three Months Ended   Year Ended
  Mar 31,   Jun 30,   Sep 30,   Dec 31,   Dec 31,
(in thousands)   2022       2022       2022       2022       2022  
Production Chemical Technologies                  
Segment operating profit $ 31,263     $ 25,606     $ 86,649     $ 96,418     $ 239,936  
Non-GAAP adjustments   14,100       31,072       (1,197 )     1,703       45,678  
Depreciation and amortization   23,977       24,065       20,750       23,083       91,875  
Segment adjusted EBITDA $ 69,340     $ 80,743     $ 106,202     $ 121,204     $ 377,489  
                   
Production & Automation Technologies                  
Segment operating profit $ 24,710     $ 23,650     $ 22,485     $ 18,104     $ 89,133  
Non-GAAP adjustments   (3,938 )     430       4,442       3,977       4,728  
Depreciation and amortization   24,485       24,717       25,335       29,055       103,592  
Segment adjusted EBITDA $ 45,257     $ 48,797     $ 52,262     $ 51,137     $ 197,453  
                   
Drilling Technologies                  
Segment operating profit $ 15,220     $ 15,043     $ 14,856     $ 9,426     $ 54,512  
Non-GAAP adjustments   363       376       15       (6 )     781  
Depreciation and amortization   1,736       1,669       1,655       1,579       6,639  
Segment adjusted EBITDA $ 17,319     $ 17,088     $ 16,526     $ 10,999     $ 61,932  
                   
Reservoir Chemical Technologies                  
Segment operating profit $ (3,469 )   $ (8,147 )   $ (61,711 )   $ (16,884 )   $ (90,212 )
Non-GAAP adjustments   802       4,005       61,152       15,589       81,550  
Depreciation and amortization   2,476       3,842       3,590       4,754       14,662  
Segment adjusted EBITDA $ (191 )   $ (300 )   $ 3,031     $ 3,460     $ 6,000  
                   
Corporate and other                  
Segment operating profit $ (23,157 )   $ (28,661 )   $ (24,808 )   $ (19,787 )   $ (96,563 )
Non-GAAP adjustments   2,645       6,850       (4,241 )     (4,870 )     531  
Depreciation and amortization   5,025       5,237       9,202       5,648       25,112  
Interest expense, net   11,363       10,765       11,454       11,622       45,204  
Segment adjusted EBITDA $ (4,124 )   $ (5,809 )   $ (8,393 )   $ (7,390 )   $ (25,716 )
 
Free Cash Flow
 
  Three Months Ended   Year Ended
  Mar 31,   Jun 30,   Sep 30,   Dec 31,   Dec 31,
(in thousands)   2023       2023       2023       2023       2023  
Free Cash Flow                  
Cash provided by operating activities $ 92,378     $ 115,910     $ 163,030     $ 168,953     $ 540,271  
Less: Capital expenditures, net of proceeds from sale of fixed assets   (23,025 )     (27,143 )     (48,469 )     (29,142 )     (127,779 )
Free cash flow $ 69,353     $ 88,767     $ 114,561     $ 139,811     $ 412,492  
                   
Free Cash Flow to Adjusted EBITDA Ratio                  
Free cash flow $ 69,353     $ 88,767     $ 114,561     $ 139,811     $ 412,492  
Adjusted EBITDA $ 184,859     $ 190,681     $ 197,536     $ 198,145     $ 771,221  
                   
Free cash flow to adjusted EBITDA ratio   38 %     47 %     58 %     71 %     53 %
  Three Months Ended   Year Ended
  Mar 31,   Jun 30,   Sep 30,   Dec 31,   Dec 31,
(in thousands)   2022       2022       2022       2022       2022  
Free Cash Flow                  
Cash provided by operating activities $ (43,125 )   $ 74,240     $ 187,152     $ 195,093     $ 413,360  
Less: Capital expenditures, net of proceeds from sale of fixed assets   (17,866 )     (20,743 )     (19,719 )     (26,463 )     (84,791 )
Free cash flow $ (60,991 )   $ 53,497     $ 167,433     $ 168,630     $ 328,569  
                   
Free Cash Flow to Adjusted EBITDA Ratio                  
Free cash flow $ (60,991 )   $ 53,497     $ 167,433     $ 168,630     $ 328,569  
Adjusted EBITDA $ 184,859     $ 190,681     $ 197,536     $ 198,145     $ 771,221  
                   
Free cash flow to adjusted EBITDA ratio   (33 )%     28 %     85 %     85 %     43 %

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