ChampionX Reports Second Quarter 2023 Results

  • Revenue of $926.6 million, decreased 1% year-over-year
  • Net income attributable to ChampionX of $95.8 million, increased 250% year-over-year
  • Adjusted net income of $99.1 million, increased 67% year-over-year
  • Adjusted EBITDA of $186.2 million, increased 35% year-over-year
  • Income before income taxes margin of 11.7%, increased 874 basis points year-over-year
  • Adjusted EBITDA margin of 20.1%, increased 527 basis points year-over-year
  • Cash from operating activities of $115.9 million and free cash flow of $88.8 million
  • Repurchased $51.2 million of common stock; returned 76% of free cash flow to shareholders

THE WOODLANDS, Texas, July 24, 2023 (GLOBE NEWSWIRE) -- ChampionX Corporation (NASDAQ: CHX) (“ChampionX” or the “Company”) today announced second quarter of 2023 results. Revenue was $926.6 million, net income attributable to ChampionX was $95.8 million, and adjusted EBITDA was $186.2 million. Income before income taxes margin was 11.7% and adjusted EBITDA margin was 20.1%. Cash from operating activities was $115.9 million and free cash flow was $88.8 million.

CEO Commentary

“We continued to demonstrate ChampionX’s strong execution capabilities during the second quarter as we delivered adjusted EBITDA growth and adjusted EBITDA margin expansion while continuing our robust free cash flow generation. We have an unwavering focus on shareholder value creation and our disciplined framework of capital allocation, including high-return organic investment and shareholder returns. I want to thank all our worldwide employees for their continued dedication and commitment to serving our customers and communities well. I am thankful and humbled to lead such a talented and motivated team,” ChampionX’s President and Chief Executive Officer Sivasankaran “Soma” Somasundaram said.

“During the second quarter of 2023, we generated revenue of $927 million, which decreased 1% year-over-year, and declined 2% sequentially. Revenues in the quarter were impacted by shipment delays in Latin America due to customer logistics, Canadian wildfires, and extended production platform turnarounds in the Gulf of Mexico. Strong revenue growth in Middle East, Africa, and Europe was offset by declines in Latin America and Canada. Digital revenue grew 4% sequentially and 21% year-over-year, driven by continued strong customer adoption of our fit-for-purpose digital solutions. We generated net income attributable to ChampionX of $96 million, which increased 250% year-over-year and 51% sequentially, and adjusted EBITDA of $186 million, which increased 35% year-over-year and 6% sequentially. Our income before income taxes margin improved by approximately 874 basis points year-over-year and 200 basis points sequentially, and our adjusted EBITDA margin expanded by approximately 527 basis points year-over-year and 158 basis points sequentially in the second quarter, on productivity improvements and increased pricing realization.

“Cash flow from operating activities was $116 million during the second quarter, which represented 121% of net income attributable to ChampionX, and we generated strong free cash flow of $89 million during the period, which represented 48% of our adjusted EBITDA for the period. Through our regular cash dividend of $17 million and $51 million of ChampionX share repurchases, we returned 58% of cash from operating activities and 76% of our free cash flow in the second quarter to our shareholders. Our balance sheet and financial position remain strong, ending the second quarter with $932 million of liquidity, including $263 million of cash and $669 million of available capacity on our revolving credit facility.

“As we look to the third quarter, we expect an increase in our international businesses and continued positive momentum in our North American production-oriented businesses. We are already seeing good volume pick-up in the month of July as the factors which impacted our second quarter volumes resolve. On a consolidated basis, in the third quarter, we expect revenue to be between $960 million and $990 million. We expect adjusted EBITDA of $199 million to $207 million. We remain focused on driving margin expansion and we now expect to deliver an exit rate of 21% in the fourth quarter of this year. Our cash generation remains strong, and for the full year, we still expect to convert 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 for the year.”

Production Chemical Technologies

Production Chemical Technologies revenue in the second quarter of 2023 was $574.3 million, a decrease of $17.4 million, or 3%, sequentially, due to no longer recognizing revenue or expenses in Russia, and shipment delays due to customer logistics. Growth in the Middle East, Africa, and Europe was offset by a decline in Latin America.

Segment operating profit was $87.2 million and adjusted segment EBITDA was $116.8 million. Segment operating profit margin was 15.2%, an increase of 397 basis points, sequentially, and adjusted segment EBITDA margin was 20.3%, an increase of 258 basis points, sequentially. The increase in segment operating profit margin and adjusted segment EBITDA margin reflects positive impact from raw materials and productivity initiatives.

Production & Automation Technologies

Production & Automation Technologies revenue in the second quarter of 2023 was $254.2 million, an increase of $2.6 million, or 1%, sequentially, due to higher demand in our businesses in the U.S. and internationally, offset by a decrease in Canada due to wildfires.

Revenue from digital products was $60.2 million in the second quarter of 2023, up 4% sequentially, and up 21% year-over-year.

Segment operating profit was $33.2 million and adjusted segment EBITDA was $60.7 million. Segment operating profit margin was 13.1%, a decrease of 77 basis points, sequentially, and adjusted segment EBITDA margin was 23.9%, an increase of 11 basis points, sequentially. Operating profit margin decreased due to depreciation expense from additional capital invested in the segment while the increase in adjusted EBITDA margin was driven by higher sales volumes, and product mix.

Drilling Technologies

Drilling Technologies revenue in the second quarter of 2023 was $57.3 million, an increase of $0.6 million, or 1%, sequentially, driven by product mix.

Segment operating profit was $12.7 million and adjusted segment EBITDA was $14.4 million. Segment operating profit margin was 22.1%, an increase of 112 basis points, sequentially, and adjusted segment EBITDA margin was 25.1%, an increase of 134 basis points, sequentially, in each case due to improved processing costs.

Reservoir Chemical Technologies

Reservoir Chemical Technologies revenue in the second quarter 2023 was $23.9 million, a decrease of $2.0 million, or 8%, sequentially, driven by lower sales volumes.

Segment operating profit was $2.2 million and adjusted segment EBITDA was $4.2 million. Segment operating profit margin was 9.2%, an increase of 146 basis points, sequentially, and adjusted segment EBITDA margin was 17.7%, an increase of 217 basis points, sequentially, in each case driven by continued benefit from cost reduction initiatives associated with the exit of certain product lines.

Q2 2023 Other Business Highlights

  • ChampionX ranked first in customer satisfaction in six specific categories (Production Chemicals, Artificial Lift, Intelligent Sensors & Controls, Downhole Completion Equipment, Completion Fluids, and Surface Production Equipment) in a survey conducted by EnergyPoint Research, Inc., an independent customer satisfaction research firm.
  • ChampionX was recognized in Norway by ConocoPhillips with the 2022 Supplier Recognition Award (Focus in Execution), acknowledging our asset integrity program in the Greater Ekofisk area. The award recognizes those suppliers that exhibit exceptional leadership in observance of ConocoPhillips’ SPIRIT values.
  • Chemical Technologies secured a multi-year contract extension in offshore Western Australia with a global energy company, which affords opportunities for further business growth with new asset start-ups in the next several years.
  • Chemical Technologies continues to experience growth in the Gulf of Mexico with key oil and gas customers.
  • Chemical Technologies won contracts in multiple countries in the MENA region which will help support oil and gas field development projects via our corrosion inhibition chemistries.
  • Production & Automation Technologies continues to experience strong customer demand for ESPs, in particular its HIGH RISE™ series pumps and PowerFit motors. 
  • Digital revenue growth reflective of increasing customer focus on implementing digital technologies to reduce emissions and drive operational and cost improvements.
  • Emissions Technologies has successfully completed field/plant trials for its high-resolution, Optical Gas Imaging (OGI) camera, AURA OGI™, which we expect to be available later this year.
  • Drilling Technologies experienced robust demand for US Synthetic diamond bearings and has strong bookings for delivery through year-end 2023.
  • ChampionX was recently named a winner in Hart Energy’s annual ESG Awards program. The Energy ESG Awards recognize energy companies making a significant impact on environmental, social or governance objectives in the field, their communities and their businesses. The awards honor excellence in six categories across the industry for proven innovations in reducing environmental impact, making social and community contributions, and showing innovative leadership practices/directives within their company cultures.

Conference Call Details

ChampionX Corporation will host a conference call on Tuesday, July 25, 2023, to discuss its second quarter 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

To listen to the call via a live webcast, please visit ChampionX’s website at The call will also be available by dialing 1-888-886-7786 in the United States or 1-416-764-8658 for international calls. Please call approximately 15 minutes prior to the scheduled start time and reference ChampionX conference call number 96181485.

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 segment EBITDA, adjusted segment 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 provide useful information to investors because they reflect the core operating results of our businesses and help facilitate comparisons of operating performance across periods. In addition, these measures 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, in particular, and other amounts excluded from adjusted EBITDA will 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

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

Media Contact: John Breed


 Three Months Ended Six Months Ended
 June 30, March 31,  June 30, June 30,
(in thousands, except per share amounts) 2023   2023   2022   2023  2022
Revenue$926,600  $948,347  $932,572  $1,874,947 $1,798,532
Cost of goods and services 644,394   664,992   720,684   1,309,386  1,379,034
Gross profit 282,206   283,355   211,888   565,561  419,498
Costs and expenses:         
Selling, general and administrative expense 162,484   160,816   141,351   323,300  291,711
Loss on disposal group    12,965   22,924   12,965  22,924
Interest expense, net 14,544   12,466   10,765   27,010  22,128
Other expense (income), net (3,104)  5,295   9,357   2,191  10,677
Income before income taxes 108,282   91,813   27,491   200,095  72,058
Provision for (benefit from) income taxes 11,656   28,669   (1,405)  40,325  4,989
Net income 96,626   63,144   28,896   159,770  67,069
Net income (loss) attributable to noncontrolling interest 829   (388)  1,554   441  3,025
Net income attributable to ChampionX$95,797  $63,532  $27,342  $159,329 $64,044
Earnings per share attributable to ChampionX:         
Basic$0.49  $0.32  $0.13  $0.81 $0.32
Diluted$0.48  $0.31  $0.13  $0.79 $0.31
Weighted-average shares outstanding:         
Basic 197,034   198,286   203,322   197,657  203,200
Diluted 200,735   202,440   208,714   201,694  208,863


(in thousands)June 30, 2023 December 31, 2022
Current Assets:   
Cash and cash equivalents$263,088  $250,187 
Receivables, net 522,106   601,061 
Inventories, net 599,040   542,543 
Prepaid expenses and other current assets 100,597   104,790 
Total current assets 1,484,831   1,498,581 
Property, plant and equipment, net 757,841   734,810 
Goodwill 669,067   679,488 
Intangible assets, net 270,599   305,010 
Other non-current assets 147,500   169,594 
Total assets$3,329,838  $3,387,483 
Current Liabilities:   
Current portion of long-term debt$6,250  $6,250 
Accounts payable 550,827   469,566 
Other current liabilities 257,378   383,160 
Total current liabilities 814,455   858,976 
Long-term debt 595,165   621,702 
Other long-term liabilities 207,896   229,590 
Stockholders’ equity:   
ChampionX stockholders’ equity 1,730,031   1,694,550 
Noncontrolling interest (17,709)  (17,335)
Total liabilities and equity$3,329,838  $3,387,483 


 Six Months Ended June 30,
(in thousands) 2023   2022 
Cash flows from operating activities:   
Net income$159,770  $67,069 
Depreciation and amortization 115,387   117,229 
Loss on disposal group 12,965   22,924 
Deferred income taxes (22,187)  (34,386)
Gain on disposal of fixed assets (1,070)  (6,284)
Loss on debt extinguishment    4,043 
Receivables 83,589   (42,456)
Inventories (70,040)  (81,935)
Leased assets (22,125)  (13,949)
Other assets 3,135   16,133 
Accounts payable 40,632   21,507 
Other operating items, net (91,768)  (38,780)
Net cash flows provided by operating activities 208,288   31,115 
Cash flows from investing activities:   
Capital expenditures (57,277)  (53,555)
Proceeds from sale of fixed assets 7,109   14,946 
Acquisitions, net of cash acquired    (3,198)
Net cash used for investing activities (50,168)  (41,807)
Cash flows from financing activities:   
Proceeds from long-term debt 15,500   844,838 
Repayment of long-term debt (43,633)  (869,987)
Debt issuance costs    (8,008)
Repurchases of common stock (91,617)  (20,016)
Dividends paid (31,591)  (15,465)
Other 6,100   (5,725)
Net cash used for financing activities (145,241)  (74,363)
Effect of exchange rate changes on cash and cash equivalents 22   659 
Net increase (decrease) in cash and cash equivalents 12,901   (84,396)
Cash and cash equivalents at beginning of period 250,187   255,178 
Cash and cash equivalents at end of period$263,088  $170,782 


 Three Months Ended
 June 30, March 31,  June 30,
(in thousands) 2023   2023   2022 
Segment revenue:     
Production Chemical Technologies$574,302  $591,684  $552,411 
Production & Automation Technologies 254,156   251,548   242,399 
Drilling Technologies 57,324   56,707   57,858 
Reservoir Chemical Technologies 23,853   25,806   44,114 
Corporate and other 16,965   22,602   35,790 
Total revenue$926,600  $948,347  $932,572 
Income before income taxes:    
Segment operating profit (loss):     
Production Chemical Technologies$87,163  $66,314  $25,606 
Production & Automation Technologies 33,208   34,792   23,650 
Drilling Technologies 12,660   11,887   15,043 
Reservoir Chemical Technologies 2,186   1,987   (8,147)
Total segment operating profit 135,217   114,980   56,152 
Corporate and other 12,391   10,701   17,896 
Interest expense, net 14,544   12,466   10,765 
Income before income taxes$108,282  $91,813  $27,491 
Operating profit margin / income before income taxes margin:     
Production Chemical Technologies 15.2%  11.2%  4.6%
Production & Automation Technologies 13.1%  13.8%  9.8%
Drilling Technologies 22.1%  21.0%  26.0%
Reservoir Chemical Technologies 9.2%  7.7%  (18.5)%
ChampionX Consolidated 11.7%  9.7%  2.9%
Adjusted EBITDA     
Production Chemical Technologies$116,790  $105,060  $78,238 
Production & Automation Technologies 60,711   59,814   48,533 
Drilling Technologies 14,376   13,463   17,088 
Reservoir Chemical Technologies 4,213   3,999   (305)
Corporate and other (9,848)  (6,729)  (5,286)
Adjusted EBITDA$186,242  $175,607  $138,268 
Adjusted EBITDA margin     
Production Chemical Technologies 20.3%  17.8%  14.2%
Production & Automation Technologies 23.9%  23.8%  20.0%
Drilling Technologies 25.1%  23.7%  29.5%
Reservoir Chemical Technologies 17.7%  15.5%  (0.7)%
ChampionX Consolidated 20.1%  18.5%  14.8%


 Three Months Ended
 June 30, March 31, June 30,
(in thousands) 2023   2023   2022 
Net income attributable to ChampionX$95,797  $63,532  $27,342 
Pre-tax adjustments:     
Loss on disposal group (1)    12,965   22,924 
Russia sanctions compliance and impacts (2) 433   521   5,457 
Loss on debt extinguishment and modification       6,070 
Restructuring and other related charges 5,353   4,399   5,302 
Merger integration costs    245   3,865 
Acquisition costs and related adjustments (3) (2,341)  (3,512)  (3,512)
Intellectual property defense 687      376 
Tulsa, Oklahoma storm damage 607       
Tax impact of adjustments (1,478)  (4,561)  (8,501)
Adjusted net income attributable to ChampionX 99,058   73,589   59,323 
Tax impact of adjustments 1,478   4,561   8,501 
Net income (loss) attributable to noncontrolling interest 829   (388)  1,554 
Depreciation and amortization 58,677   56,710   59,530 
Provision for (benefit from) income taxes 11,656   28,669   (1,405)
Interest expense, net 14,544   12,466   10,765 
Adjusted EBITDA$186,242  $175,607  $138,268 


(1) Amounts represent the loss recorded to properly adjust the carrying value of our CT Russia Business 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, representing unfavorable terms under the Cross Supply Agreement, as well as costs incurred for the acquisition of businesses.

 Three Months Ended
 June 30, March 31, June 30,
(in thousands) 2023   2023   2022 
Diluted earnings per share attributable to ChampionX$0.48  $0.31  $0.13 
Per share adjustments:     
Loss on disposal group    0.06   0.11 
Russia sanctions compliance and impacts       0.03 
Loss on debt extinguishment and modification       0.03 
Restructuring and other related charges 0.03   0.03   0.03 
Merger integration costs       0.02 
Acquisition costs and related adjustments (0.01)  (0.02)  (0.02)
Intellectual property defense        
Tulsa, Oklahoma storm damage        
Tax impact of adjustments (0.01)  (0.02)  (0.05)
Adjusted diluted earnings per share attributable to ChampionX$0.49  $0.36  $0.28 


 Three Months Ended
 June 30, March 31,  June 30,
(in thousands) 2023   2023   2022 
Production Chemical Technologies     
Segment operating profit$87,163  $66,314  $25,606 
Non-GAAP adjustments 3,944   14,567   28,567 
Depreciation and amortization 25,683   24,179   24,065 
Segment adjusted EBITDA$116,790  $105,060  $78,238 
Production & Automation Technologies     
Segment operating profit$33,208  $34,792  $23,650 
Non-GAAP adjustments 1,082   785   166 
Depreciation and amortization 26,421   24,237   24,717 
Segment adjusted EBITDA$60,711  $59,814  $48,533 
Drilling Technologies     
Segment operating profit$12,660  $11,887  $15,043 
Non-GAAP adjustments 212      376 
Depreciation and amortization 1,504   1,576   1,669 
Segment adjusted EBITDA$14,376  $13,463  $17,088 
Reservoir Chemical Technologies     
Segment operating profit$2,186  $1,987  $(8,147)
Non-GAAP adjustments 428   395   4,000 
Depreciation and amortization 1,599   1,617   3,842 
Segment adjusted EBITDA$4,213  $3,999  $(305)
Corporate and other     
Segment operating profit$(26,935) $(23,167) $(28,661)
Non-GAAP adjustments (927)  (1,129)  7,373 
Depreciation and amortization 3,470   5,101   5,237 
Interest expense, net 14,544   12,466   10,765 
Segment adjusted EBITDA$(9,848) $(6,729) $(5,286)

Free Cash Flow

 Three Months Ended
 June 30, March 31, June 30,
(in thousands) 2023   2023   2022 
Free Cash Flow     
Cash flows from operating activities$115,910  $92,378  $74,240 
Less: Capital expenditures, net of proceeds from sale of fixed assets (27,143)  (23,025)  (20,743)
Free cash flow$88,767  $69,353  $53,497 
Cash From Operating Activities to Revenue Ratio     
Cash flows from operating activities$115,910  $92,378  $74,240 
Revenue$926,600  $948,347  $932,572 
Cash from operating activities to revenue ratio 13%  10%  8%
Free Cash Flow to Revenue Ratio     
Free cash flow$88,767  $69,353  $53,497 
Revenue$926,600  $948,347  $932,572 
Free cash flow to revenue ratio 10%  7%  6%
Free Cash Flow to Adjusted EBITDA Ratio     
Free cash flow$88,767  $69,353  $53,497 
Adjusted EBITDA$186,242  $175,607  $138,268 
Free cash flow to adjusted EBITDA ratio 48%  39%  39%