championx-20210331
000172308912/312021Q1false00017230892021-01-012021-03-31xbrli:shares00017230892021-04-23iso4217:USD0001723089us-gaap:ProductMember2021-01-012021-03-310001723089us-gaap:ProductMember2020-01-012020-03-310001723089us-gaap:ServiceMember2021-01-012021-03-310001723089us-gaap:ServiceMember2020-01-012020-03-3100017230892020-01-012020-03-31iso4217:USDxbrli:shares00017230892021-03-3100017230892020-12-310001723089us-gaap:CommonStockMember2020-12-310001723089us-gaap:AdditionalPaidInCapitalMember2020-12-310001723089us-gaap:RetainedEarningsMember2020-12-310001723089us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001723089us-gaap:NoncontrollingInterestMember2020-12-310001723089us-gaap:RetainedEarningsMember2021-01-012021-03-310001723089us-gaap:NoncontrollingInterestMember2021-01-012021-03-310001723089us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310001723089us-gaap:CommonStockMember2021-01-012021-03-310001723089us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-310001723089us-gaap:CommonStockMember2021-03-310001723089us-gaap:AdditionalPaidInCapitalMember2021-03-310001723089us-gaap:RetainedEarningsMember2021-03-310001723089us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-310001723089us-gaap:NoncontrollingInterestMember2021-03-310001723089us-gaap:CommonStockMember2019-12-310001723089us-gaap:AdditionalPaidInCapitalMember2019-12-310001723089us-gaap:RetainedEarningsMember2019-12-310001723089us-gaap:AccumulatedOtherComprehensiveIncomeMember2019-12-310001723089us-gaap:NoncontrollingInterestMember2019-12-3100017230892019-12-310001723089us-gaap:RetainedEarningsMembersrt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2019-12-310001723089srt:CumulativeEffectPeriodOfAdoptionAdjustmentMember2019-12-310001723089us-gaap:RetainedEarningsMember2020-01-012020-03-310001723089us-gaap:NoncontrollingInterestMember2020-01-012020-03-310001723089us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-01-012020-03-310001723089us-gaap:CommonStockMember2020-01-012020-03-310001723089us-gaap:AdditionalPaidInCapitalMember2020-01-012020-03-310001723089us-gaap:CommonStockMember2020-03-310001723089us-gaap:AdditionalPaidInCapitalMember2020-03-310001723089us-gaap:RetainedEarningsMember2020-03-310001723089us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-03-310001723089us-gaap:NoncontrollingInterestMember2020-03-3100017230892020-03-310001723089championx:LegacyChampionXMember2020-06-032020-06-030001723089championx:LegacyChampionXMember2020-06-03xbrli:pure0001723089championx:LegacyChampionXMemberchampionx:FavorableSupplyAgreementMember2020-06-032020-06-030001723089championx:LegacyChampionXMember2020-01-012020-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:ProductionChemicalTechnologiesMember2021-01-012021-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:ProductionChemicalTechnologiesMember2020-01-012020-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:ProductionandAutomationTechnologiesMember2021-01-012021-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:ProductionandAutomationTechnologiesMember2020-01-012020-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:DrillingTechnologiesMember2021-01-012021-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:DrillingTechnologiesMember2020-01-012020-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:ReservoirChemicalTechnologiesMember2021-01-012021-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:ReservoirChemicalTechnologiesMember2020-01-012020-03-310001723089us-gaap:CorporateNonSegmentMember2021-01-012021-03-310001723089us-gaap:CorporateNonSegmentMember2020-01-012020-03-310001723089us-gaap:OperatingSegmentsMember2021-01-012021-03-310001723089us-gaap:OperatingSegmentsMember2020-01-012020-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:ProductionChemicalTechnologiesMembercountry:US2021-01-012021-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:ProductionandAutomationTechnologiesMembercountry:US2021-01-012021-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:DrillingTechnologiesMembercountry:US2021-01-012021-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:ReservoirChemicalTechnologiesMembercountry:US2021-01-012021-03-310001723089us-gaap:CorporateNonSegmentMembercountry:US2021-01-012021-03-310001723089country:US2021-01-012021-03-310001723089us-gaap:OperatingSegmentsMembercountry:CAchampionx:ProductionChemicalTechnologiesMember2021-01-012021-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:ProductionandAutomationTechnologiesMembercountry:CA2021-01-012021-03-310001723089us-gaap:OperatingSegmentsMembercountry:CAchampionx:DrillingTechnologiesMember2021-01-012021-03-310001723089us-gaap:OperatingSegmentsMembercountry:CAchampionx:ReservoirChemicalTechnologiesMember2021-01-012021-03-310001723089country:CAus-gaap:CorporateNonSegmentMember2021-01-012021-03-310001723089country:CA2021-01-012021-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:ProductionChemicalTechnologiesMemberchampionx:MiddleEaseAndAfricaMember2021-01-012021-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:ProductionandAutomationTechnologiesMemberchampionx:MiddleEaseAndAfricaMember2021-01-012021-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:MiddleEaseAndAfricaMemberchampionx:DrillingTechnologiesMember2021-01-012021-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:MiddleEaseAndAfricaMemberchampionx:ReservoirChemicalTechnologiesMember2021-01-012021-03-310001723089us-gaap:CorporateNonSegmentMemberchampionx:MiddleEaseAndAfricaMember2021-01-012021-03-310001723089championx:MiddleEaseAndAfricaMember2021-01-012021-03-310001723089us-gaap:OperatingSegmentsMembersrt:EuropeMemberchampionx:ProductionChemicalTechnologiesMember2021-01-012021-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:ProductionandAutomationTechnologiesMembersrt:EuropeMember2021-01-012021-03-310001723089us-gaap:OperatingSegmentsMembersrt:EuropeMemberchampionx:DrillingTechnologiesMember2021-01-012021-03-310001723089us-gaap:OperatingSegmentsMembersrt:EuropeMemberchampionx:ReservoirChemicalTechnologiesMember2021-01-012021-03-310001723089srt:EuropeMemberus-gaap:CorporateNonSegmentMember2021-01-012021-03-310001723089srt:EuropeMember2021-01-012021-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:ProductionChemicalTechnologiesMembercountry:AU2021-01-012021-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:ProductionandAutomationTechnologiesMembercountry:AU2021-01-012021-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:DrillingTechnologiesMembercountry:AU2021-01-012021-03-310001723089us-gaap:OperatingSegmentsMembercountry:AUchampionx:ReservoirChemicalTechnologiesMember2021-01-012021-03-310001723089us-gaap:CorporateNonSegmentMembercountry:AU2021-01-012021-03-310001723089country:AU2021-01-012021-03-310001723089us-gaap:OperatingSegmentsMembersrt:LatinAmericaMemberchampionx:ProductionChemicalTechnologiesMember2021-01-012021-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:ProductionandAutomationTechnologiesMembersrt:LatinAmericaMember2021-01-012021-03-310001723089us-gaap:OperatingSegmentsMembersrt:LatinAmericaMemberchampionx:DrillingTechnologiesMember2021-01-012021-03-310001723089us-gaap:OperatingSegmentsMembersrt:LatinAmericaMemberchampionx:ReservoirChemicalTechnologiesMember2021-01-012021-03-310001723089srt:LatinAmericaMemberus-gaap:CorporateNonSegmentMember2021-01-012021-03-310001723089srt:LatinAmericaMember2021-01-012021-03-310001723089us-gaap:OperatingSegmentsMembersrt:AsiaPacificMemberchampionx:ProductionChemicalTechnologiesMember2021-01-012021-03-310001723089us-gaap:OperatingSegmentsMembersrt:AsiaPacificMemberchampionx:ProductionandAutomationTechnologiesMember2021-01-012021-03-310001723089us-gaap:OperatingSegmentsMembersrt:AsiaPacificMemberchampionx:DrillingTechnologiesMember2021-01-012021-03-310001723089us-gaap:OperatingSegmentsMembersrt:AsiaPacificMemberchampionx:ReservoirChemicalTechnologiesMember2021-01-012021-03-310001723089srt:AsiaPacificMemberus-gaap:CorporateNonSegmentMember2021-01-012021-03-310001723089srt:AsiaPacificMember2021-01-012021-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:OtherMemberchampionx:ProductionChemicalTechnologiesMember2021-01-012021-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:ProductionandAutomationTechnologiesMemberchampionx:OtherMember2021-01-012021-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:OtherMemberchampionx:DrillingTechnologiesMember2021-01-012021-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:OtherMemberchampionx:ReservoirChemicalTechnologiesMember2021-01-012021-03-310001723089championx:OtherMemberus-gaap:CorporateNonSegmentMember2021-01-012021-03-310001723089championx:OtherMember2021-01-012021-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:ProductionChemicalTechnologiesMembercountry:US2020-01-012020-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:ProductionandAutomationTechnologiesMembercountry:US2020-01-012020-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:DrillingTechnologiesMembercountry:US2020-01-012020-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:ReservoirChemicalTechnologiesMembercountry:US2020-01-012020-03-310001723089us-gaap:CorporateNonSegmentMembercountry:US2020-01-012020-03-310001723089country:US2020-01-012020-03-310001723089us-gaap:OperatingSegmentsMembercountry:CAchampionx:ProductionChemicalTechnologiesMember2020-01-012020-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:ProductionandAutomationTechnologiesMembercountry:CA2020-01-012020-03-310001723089us-gaap:OperatingSegmentsMembercountry:CAchampionx:DrillingTechnologiesMember2020-01-012020-03-310001723089us-gaap:OperatingSegmentsMembercountry:CAchampionx:ReservoirChemicalTechnologiesMember2020-01-012020-03-310001723089country:CAus-gaap:CorporateNonSegmentMember2020-01-012020-03-310001723089country:CA2020-01-012020-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:ProductionChemicalTechnologiesMemberchampionx:MiddleEaseAndAfricaMember2020-01-012020-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:ProductionandAutomationTechnologiesMemberchampionx:MiddleEaseAndAfricaMember2020-01-012020-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:MiddleEaseAndAfricaMemberchampionx:DrillingTechnologiesMember2020-01-012020-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:MiddleEaseAndAfricaMemberchampionx:ReservoirChemicalTechnologiesMember2020-01-012020-03-310001723089us-gaap:CorporateNonSegmentMemberchampionx:MiddleEaseAndAfricaMember2020-01-012020-03-310001723089championx:MiddleEaseAndAfricaMember2020-01-012020-03-310001723089us-gaap:OperatingSegmentsMembersrt:EuropeMemberchampionx:ProductionChemicalTechnologiesMember2020-01-012020-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:ProductionandAutomationTechnologiesMembersrt:EuropeMember2020-01-012020-03-310001723089us-gaap:OperatingSegmentsMembersrt:EuropeMemberchampionx:DrillingTechnologiesMember2020-01-012020-03-310001723089us-gaap:OperatingSegmentsMembersrt:EuropeMemberchampionx:ReservoirChemicalTechnologiesMember2020-01-012020-03-310001723089srt:EuropeMemberus-gaap:CorporateNonSegmentMember2020-01-012020-03-310001723089srt:EuropeMember2020-01-012020-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:ProductionChemicalTechnologiesMembercountry:AU2020-01-012020-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:ProductionandAutomationTechnologiesMembercountry:AU2020-01-012020-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:DrillingTechnologiesMembercountry:AU2020-01-012020-03-310001723089us-gaap:OperatingSegmentsMembercountry:AUchampionx:ReservoirChemicalTechnologiesMember2020-01-012020-03-310001723089us-gaap:CorporateNonSegmentMembercountry:AU2020-01-012020-03-310001723089country:AU2020-01-012020-03-310001723089us-gaap:OperatingSegmentsMembersrt:LatinAmericaMemberchampionx:ProductionChemicalTechnologiesMember2020-01-012020-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:ProductionandAutomationTechnologiesMembersrt:LatinAmericaMember2020-01-012020-03-310001723089us-gaap:OperatingSegmentsMembersrt:LatinAmericaMemberchampionx:DrillingTechnologiesMember2020-01-012020-03-310001723089us-gaap:OperatingSegmentsMembersrt:LatinAmericaMemberchampionx:ReservoirChemicalTechnologiesMember2020-01-012020-03-310001723089srt:LatinAmericaMemberus-gaap:CorporateNonSegmentMember2020-01-012020-03-310001723089srt:LatinAmericaMember2020-01-012020-03-310001723089us-gaap:OperatingSegmentsMembersrt:AsiaPacificMemberchampionx:ProductionChemicalTechnologiesMember2020-01-012020-03-310001723089us-gaap:OperatingSegmentsMembersrt:AsiaPacificMemberchampionx:ProductionandAutomationTechnologiesMember2020-01-012020-03-310001723089us-gaap:OperatingSegmentsMembersrt:AsiaPacificMemberchampionx:DrillingTechnologiesMember2020-01-012020-03-310001723089us-gaap:OperatingSegmentsMembersrt:AsiaPacificMemberchampionx:ReservoirChemicalTechnologiesMember2020-01-012020-03-310001723089srt:AsiaPacificMemberus-gaap:CorporateNonSegmentMember2020-01-012020-03-310001723089srt:AsiaPacificMember2020-01-012020-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:OtherMemberchampionx:ProductionChemicalTechnologiesMember2020-01-012020-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:ProductionandAutomationTechnologiesMemberchampionx:OtherMember2020-01-012020-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:OtherMemberchampionx:DrillingTechnologiesMember2020-01-012020-03-310001723089us-gaap:OperatingSegmentsMemberchampionx:OtherMemberchampionx:ReservoirChemicalTechnologiesMember2020-01-012020-03-310001723089championx:OtherMemberus-gaap:CorporateNonSegmentMember2020-01-012020-03-310001723089championx:OtherMember2020-01-012020-03-310001723089us-gaap:CustomerRelationshipsMember2021-03-310001723089us-gaap:CustomerRelationshipsMember2020-12-310001723089us-gaap:TrademarksMember2021-03-310001723089us-gaap:TrademarksMember2020-12-310001723089us-gaap:PatentsMember2021-03-310001723089us-gaap:PatentsMember2020-12-310001723089us-gaap:UnpatentedTechnologyMember2021-03-310001723089us-gaap:UnpatentedTechnologyMember2020-12-310001723089championx:FavorableSupplyAgreementMember2021-03-310001723089championx:FavorableSupplyAgreementMember2020-12-310001723089championx:DrawingsAndManualsMember2021-03-310001723089championx:DrawingsAndManualsMember2020-12-310001723089us-gaap:OtherIntangibleAssetsMember2021-03-310001723089us-gaap:OtherIntangibleAssetsMember2020-12-310001723089us-gaap:TrademarksMember2021-03-310001723089us-gaap:TrademarksMember2020-12-310001723089us-gaap:LineOfCreditMember2021-03-310001723089us-gaap:LineOfCreditMember2020-12-310001723089championx:TermLoanFacilityMemberchampionx:A2018TermLoanFacilityMember2021-03-310001723089championx:TermLoanFacilityMemberchampionx:A2018TermLoanFacilityMember2020-12-310001723089championx:TermLoanFacilityMemberchampionx:A2020TermLoanFacilityMember2021-03-310001723089championx:TermLoanFacilityMemberchampionx:A2020TermLoanFacilityMember2020-12-310001723089us-gaap:SeniorNotesMemberchampionx:A6.375SeniorNotesDueMay2026Member2021-03-310001723089us-gaap:SeniorNotesMemberchampionx:A6.375SeniorNotesDueMay2026Member2020-12-310001723089championx:A2020TermLoanFacilityMember2020-06-032020-06-030001723089championx:A2018TermLoanFacilityMember2021-03-310001723089championx:A2020TermLoanFacilityMember2021-03-31championx:locationchampionx:case0001723089championx:ProductionChemicalTechnologiesMember2021-01-012021-03-310001723089championx:ProductionChemicalTechnologiesMember2020-01-012020-03-310001723089championx:ProductionandAutomationTechnologiesMember2021-01-012021-03-310001723089championx:ProductionandAutomationTechnologiesMember2020-01-012020-03-310001723089championx:DrillingTechnologiesMember2021-01-012021-03-310001723089championx:DrillingTechnologiesMember2020-01-012020-03-310001723089championx:ReservoirChemicalTechnologiesMember2021-01-012021-03-310001723089championx:ReservoirChemicalTechnologiesMember2020-01-012020-03-310001723089us-gaap:CostOfSalesMember2021-01-012021-03-310001723089us-gaap:CostOfSalesMember2020-01-012020-03-310001723089us-gaap:SellingGeneralAndAdministrativeExpensesMember2021-01-012021-03-310001723089us-gaap:SellingGeneralAndAdministrativeExpensesMember2020-01-012020-03-310001723089us-gaap:StockAppreciationRightsSARSMember2020-12-310001723089us-gaap:PerformanceSharesMember2020-12-310001723089us-gaap:RestrictedStockUnitsRSUMember2020-12-310001723089championx:NonQualifiedStockOptionsMember2020-12-310001723089us-gaap:StockAppreciationRightsSARSMember2021-01-012021-03-310001723089us-gaap:PerformanceSharesMember2021-01-012021-03-310001723089us-gaap:RestrictedStockUnitsRSUMember2021-01-012021-03-310001723089championx:NonQualifiedStockOptionsMember2021-01-012021-03-310001723089us-gaap:StockAppreciationRightsSARSMember2021-03-310001723089us-gaap:PerformanceSharesMember2021-03-310001723089us-gaap:RestrictedStockUnitsRSUMember2021-03-310001723089championx:NonQualifiedStockOptionsMember2021-03-310001723089us-gaap:AccumulatedTranslationAdjustmentMember2019-12-310001723089us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2019-12-310001723089us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2019-12-310001723089us-gaap:AccumulatedTranslationAdjustmentMember2020-01-012020-03-310001723089us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-01-012020-03-310001723089us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2020-01-012020-03-310001723089us-gaap:AccumulatedTranslationAdjustmentMember2020-03-310001723089us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-03-310001723089us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2020-03-310001723089us-gaap:AccumulatedTranslationAdjustmentMember2020-12-310001723089us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2020-12-310001723089us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2020-12-310001723089us-gaap:AccumulatedTranslationAdjustmentMember2021-01-012021-03-310001723089us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-01-012021-03-310001723089us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-01-012021-03-310001723089us-gaap:AccumulatedTranslationAdjustmentMember2021-03-310001723089us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-03-310001723089us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-03-310001723089us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberchampionx:AccumulatedDefinedBenefitPlansAdjustmentNetGainLossAndNetTransitionIncludingPortionAttributabletoNoncontrollingInterestMemberMember2021-01-012021-03-310001723089us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberchampionx:AccumulatedDefinedBenefitPlansAdjustmentNetGainLossAndNetTransitionIncludingPortionAttributabletoNoncontrollingInterestMemberMember2020-01-012020-03-310001723089us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedDefinedBenefitPlansAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember2021-01-012021-03-310001723089us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMemberus-gaap:AccumulatedDefinedBenefitPlansAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember2020-01-012020-03-310001723089us-gaap:ForeignExchangeForwardMemberus-gaap:FairValueMeasurementsRecurringMember2021-03-310001723089us-gaap:ForeignExchangeForwardMemberus-gaap:FairValueMeasurementsRecurringMember2020-12-310001723089championx:TermLoanFacilityMemberchampionx:A2018TermLoanFacilityMemberus-gaap:FairValueInputsLevel2Member2021-03-310001723089championx:TermLoanFacilityMemberchampionx:A2018TermLoanFacilityMemberus-gaap:FairValueInputsLevel2Member2020-12-310001723089championx:TermLoanFacilityMemberchampionx:A2020TermLoanFacilityMemberus-gaap:FairValueInputsLevel2Member2021-03-310001723089championx:TermLoanFacilityMemberchampionx:A2020TermLoanFacilityMemberus-gaap:FairValueInputsLevel2Member2020-12-310001723089us-gaap:SeniorNotesMemberchampionx:A6.375SeniorNotesDueMay2026Memberus-gaap:FairValueInputsLevel1Member2021-03-310001723089us-gaap:SeniorNotesMemberchampionx:A6.375SeniorNotesDueMay2026Memberus-gaap:FairValueInputsLevel1Member2020-12-310001723089us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2021-03-310001723089us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember2020-12-310001723089us-gaap:OtherCurrentLiabilitiesMember2021-03-310001723089us-gaap:OtherCurrentLiabilitiesMember2020-12-310001723089us-gaap:ForeignExchangeForwardMember2021-03-310001723089us-gaap:ForeignExchangeForwardMember2020-12-310001723089us-gaap:CostOfSalesMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-01-012021-03-310001723089us-gaap:CostOfSalesMemberus-gaap:DesignatedAsHedgingInstrumentMember2020-01-012020-03-310001723089us-gaap:NondesignatedMemberus-gaap:OtherOperatingIncomeExpenseMember2021-01-012021-03-310001723089us-gaap:NondesignatedMemberus-gaap:OtherOperatingIncomeExpenseMember2020-01-012020-03-31

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2021
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

Commission File Number: 001-38441
ChampionX Corporation
(Exact name of registrant as specified in its charter)
Delaware82-3066826
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
2445 Technology Forest Blvd,Building 4, 12th Floor
The Woodlands,Texas77381
(Address of principal executive offices)(Zip Code)
(281) 403-5772
(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, $0.01 par valueCHXThe Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes   No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes   No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No 

The registrant had 201,339,489 shares of common stock, $0.01 par value, outstanding as of April 23, 2021.



CHAMPIONX CORPORATION

TABLE OF CONTENTS

Page
 
 
 
 
 
  
 






CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, contained in this report are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements usually relate to future events and anticipated revenues, earnings, cash flows or other aspects of our operations or operating results. Forward-looking statements are often identified by the words “believe,” “anticipate,” “expect,” “may,” “intend,” “foresee,” “guidance,” “estimate,” “potential,” “outlook,” “plan,” “should,” “would,” “could,” “target,” “forecast” and similar expressions, including the negative thereof. The absence of these words, however, does not mean that the statements are not forward-looking statements. Forward-looking statements are based on our current expectations, beliefs and assumptions concerning future developments and business conditions and their potential effect on us. While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate.

All of our forward-looking statements involve risks, uncertainties (some of which are significant or beyond our control) and assumptions that could cause actual results to materially differ from our historical experience and our present expectations or projections. Known material factors that could cause actual results to materially differ from those contemplated in the forward-looking statements are those set forth in Part I, Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

We wish to caution you not to place undue reliance on any forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update, revise or correct any of our forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise, except to the extent required under the federal securities laws.



PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CHAMPIONX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(Unaudited)
Three Months Ended
March 31,
(in thousands, except per share data)20212020
Product revenue$585,357 $224,445 
Service revenue80,626 24,925 
Lease and other revenue18,905 12,064 
Total revenue684,888 261,434 
Cost of goods and services522,556 179,095 
Gross profit162,332 82,339 
Selling, general and administrative expense143,478 78,143 
Goodwill impairment 616,271 
Long-lived asset impairment 40,980 
Interest expense, net13,971 9,039 
Other (income) expense, net(1,936)(1,633)
Income (loss) before income taxes6,819 (660,461)
Provision for (benefit from) income taxes2,782 (27,006)
Net income (loss)4,037 (633,455)
Less: Net income (loss) attributable to noncontrolling interest(1,735)273 
Net income (loss) attributable to ChampionX$5,772 $(633,728)
Earnings (losses) per share attributable to ChampionX: *
Basic$0.03 $(8.18)
Diluted$0.03 $(8.18)
Weighted-average shares outstanding: *
Basic200,580 77,477 
Diluted207,271 77,477 
_______________________
* See Note 12 — Earnings Per Share

The accompanying notes are an integral part of the condensed consolidated financial statements.
1


CHAMPIONX CORPORATION 
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
 Three Months Ended
March 31,
(in thousands)20212020
Net income (loss)$4,037 $(633,455)
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments (1)
3,213 (11,052)
Cash flow hedges (2)
413  
Defined pension and other post-retirement benefits adjustments, net (3)
167 99 
Other comprehensive income (loss)3,793 (10,953)
Comprehensive income (loss)7,830 (644,408)
Comprehensive income (loss) attributable to noncontrolling interest(1,735)273 
Comprehensive income (loss) attributable to ChampionX$9,565 $(644,681)
_______________________
(1) Net of income tax (expense) benefit of $0 for the three months ended March 31, 2021 and 2020.
(2) Net of income tax (expense) benefit of $(72) for the three months ended March 31, 2021.
(3) Net of income tax (expense) benefit of $47 and $33 for the three months ended March 31, 2021 and 2020, respectively.

The accompanying notes are an integral part of the condensed consolidated financial statements.
2


CHAMPIONX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)March 31, 2021December 31, 2020
Assets
Cash and cash equivalents$259,821 $201,421 
Receivables, net528,142 559,545 
Inventories, net435,272 430,112 
Prepaid expenses and other current assets78,019 74,767 
Total current assets1,301,254 1,265,845 
Property, plant and equipment, net of accumulated depreciation of $504,702 in 2021 and $494,490 in 2020
833,256 854,536 
Operating lease right-of-use assets125,328 122,481 
Goodwill686,455 680,594 
Intangible assets, net457,275 479,009 
Other non-current assets72,221 73,311 
Total assets$3,475,789 $3,475,776 
Liabilities and Equity
Current portion of long-term debt$26,850 $26,850 
Accounts payable333,765 299,666 
Accrued compensation and employee benefits61,380 70,303 
Current portion of operating lease liabilities36,375 33,234 
Accrued distributor fees22,044 37,465 
Accrued expenses and other current liabilities152,021 155,042 
Total current liabilities632,435 622,560 
Long-term debt899,469 905,764 
Deferred income taxes139,715 156,283 
Operating lease liabilities82,863 83,553 
Other long-term liabilities92,201 95,041 
Total liabilities1,846,683 1,863,201 
Stockholders’ equity: 
Common stock (2.5 billion shares authorized, $0.01 par value)
201.0 million shares and 200.4 million shares issued and outstanding in 2021 and 2020, respectively
2,010 2,004 
Capital in excess of par value of common stock2,302,406 2,293,179 
Accumulated deficit(632,685)(638,457)
Accumulated other comprehensive loss(26,962)(30,755)
ChampionX stockholders’ equity1,644,769 1,625,971 
Noncontrolling interest(15,663)(13,396)
Total equity1,629,106 1,612,575 
Total liabilities and equity$3,475,789 $3,475,776 

The accompanying notes are an integral part of the condensed consolidated financial statements.
3


CHAMPIONX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
(Unaudited)

Common stock
(in thousands)SharesPar
Value
Capital in Excess of Par ValueAccum. DeficitAccum.
Other
Comp.
Loss
Non-controlling InterestTotal
December 31, 2020200,380 $2,004 $2,293,179 $(638,457)$(30,755)$(13,396)$1,612,575 
Net income (loss)— — — 5,772 — (1,735)4,037 
Other comprehensive income— — — — 3,793 — 3,793 
Stock-based compensation64 — 6,442 — — — 6,442 
Stock options exercised577 6 3,341 — — — 3,347 
Taxes withheld on issuance of stock-based awards— — (556)— — — (556)
Cumulative translation adjustments— — — — — 268 268 
Distributions to noncontrolling interest— — — — — (800)(800)
March 31, 2021201,021 $2,010 $2,302,406 $(632,685)$(26,962)$(15,663)$1,629,106 

Common Stock
(in thousands)SharesPar
Value
Capital in Excess of Par ValueRetained Earnings (Accum. Deficit)Accum.
Other
Comp.
Loss
Non-controlling InterestTotal
December 31, 201977,460 $775 $969,174 $107,048 $(44,037)$3,254 $1,036,214 
Cumulative effect of accounting changes— — — (1,573)— — (1,573)
Net income (loss)— — — (633,728)— 273 (633,455)
Other comprehensive loss— — — — (10,953)— (10,953)
Stock-based compensation44 — 2,429 — — — 2,429 
Taxes withheld on issuance of stock-based awards— — (368)— — — (368)
March 31, 202077,504 $775 $971,235 $(528,253)$(54,990)$3,527 $392,294 

The accompanying notes are an integral part of the condensed consolidated financial statements.


4


CHAMPIONX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Three Months Ended
March 31,
(in thousands)20212020
Cash provided by (used for) operating activities:  
Net income (loss)$4,037 $(633,455)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation39,150 16,970 
Amortization21,851 12,862 
Stock-based compensation6,442 2,429 
Loss (gain) on disposal of fixed assets1,954 (386)
Loss on goodwill and long-lived asset impairment 657,251 
Provision (recovery) of bad debt(1,413)2,427 
Provision for inventory obsolescence and write-downs 4,856  
Amortization of deferred loan costs and accretion of discount948 708 
Deferred income taxes(2,450)(28,417)
Employee benefit plan expense718 383 
Other103 349 
Changes in operating assets and liabilities (net of effects of foreign exchange):
Receivables30,019 (6,740)
Inventories(6,511)6,587 
Prepaid expenses and other current assets(1,247)4,129 
Accounts payable36,227 3,068 
Accrued compensation and employee benefits(8,467)(9,799)
Accrued expenses and other liabilities(34,399)12,153 
Leased assets(1,138)(7,972)
Other(466)(3,325)
Net cash provided by operating activities90,214 29,222 
Cash provided by (used for) investing activities:  
Capital expenditures(25,579)(7,467)
Proceeds from sale of fixed assets912 721 
Net cash used for investing activities(24,667)(6,746)
Cash provided by (used for) financing activities:  
Payment of debt issue costs (1,284)
Repayment of long-term debt(6,712) 
Distributions to noncontrolling interest(800) 
Payment of finance lease obligations(1,215)(1,492)
Proceeds from exercise of stock options3,347  
Payments related to taxes withheld on stock-based compensation(556)(368)
Net cash used for financing activities(5,936)(3,144)
Effect of exchange rate changes on cash and cash equivalents(1,211)(986)
Net increase (decrease) in cash and cash equivalents58,400 18,346 
Cash and cash equivalents at beginning of period201,421 35,290 
Cash and cash equivalents at end of period$259,821 $53,636 
The accompanying notes are an integral part of the condensed consolidated financial statements.
5


CHAMPIONX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 1—BASIS OF PRESENTATION

ChampionX Corporation is a global leader in chemistry solutions and highly engineered equipment and technologies that help companies drill for and produce oil and gas safely and efficiently around the world. Our products provide efficient functioning throughout the lifecycle of a well with a focus on the production phase of wells.

Unless the context requires otherwise, references in this report to “we,” “us,” “our,” “the Company,” or “ChampionX” mean ChampionX Corporation, together with our subsidiaries where the context requires.

On June 3, 2020, the Company and Ecolab Inc. (“Ecolab”) completed a Reverse Morris Trust transaction in which we acquired the Chemical Technologies business (“the Merger”). In association with the completion of the Merger, the Company changed its name from Apergy Corporation (“Apergy”) to ChampionX Corporation.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of ChampionX have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission pertaining to interim financial information. As permitted under those rules, certain footnotes or other financial information that are normally required by GAAP have been condensed or omitted. Therefore, these financial statements should be read in conjunction with the audited consolidated financial statements, and notes thereto, which are included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Although these estimates are based on management’s best knowledge of current events and actions that we may undertake in the future, actual results may differ from our estimates. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments unless otherwise specified) necessary for a fair statement of our financial condition and results of operations as of and for the periods presented. Revenue, expenses, assets and liabilities can vary during each quarter of the year. Therefore, the results and trends in these financial statements may not be representative of the results that may be expected for the year ending December 31, 2021.

6


NOTE 2—MERGER TRANSACTION

On June 3, 2020 we completed the acquisition of the Chemical Technologies business. To complete the acquisition, we issued 122.2 million shares of common stock, at a share price of $10.34 per share, in exchange for 100% equity ownership of Chemical Technologies.

Preliminary Purchase Price Allocation

The acquisition-date fair value of the consideration transferred consisted of the following:
(in thousands)
Equity consideration$1,263,931 
Replacement awards attributable to pre-combination services(1)
43,964 
Unfavorable supply agreement(2)
46,000 
Favorable supply agreement(2)
(59,000)
Fair value of consideration transferred$1,294,895 
_______________________
(1) Represents the fair value of the replacement equity awards to the extent services were provided by employees of Chemical Technologies prior to closing.
(2) As part of the Merger, the Company entered into a Cross Supply and Product Transfer Agreement with Ecolab in which over a period of approximately three years from the merger date, certain products will be manufactured by one party for the other. The cross selling prices in which each party will transfer their products, and include a take-or-pay element, have been set forth within this agreement and are not reflective of market terms. As a result, we recognized an intangible asset recorded at fair value for the favorable terms and a liability recorded at fair value for the unfavorable terms. The intangible asset will be amortized on a straight-line basis over a three-year period into cost of goods and services and the liability will be amortized as a component of product revenue.

As of March 31, 2021, we have substantially completed the allocation of the consideration. The primary areas in which the preliminary purchase price allocation is not yet finalized relate to filing of income tax returns that provide taxes payable and receivable from tax authorities as well as under the Tax Matters Agreement with Ecolab, deferred income taxes and residual goodwill. We will complete the purchase price allocation and valuation during the second quarter of 2021.

The following table provides the preliminary allocation of the purchase price as of the acquisition date.
(in thousands)
Cash and cash equivalents$57,588 
Receivables394,432 
Inventories340,000 
Prepaid expenses and other current assets63,576 
Property, plant, and equipment687,085 
Identifiable intangible assets(1)
290,000 
Other non-current assets156,427 
Total identifiable assets acquired1,989,108 
Accounts payable184,028 
Other current liabilities(1)
172,997 
Long-term debt (2)
537,000 
Deferred tax liabilities103,956 
Other liabilities(1)
98,970 
Total liabilities assumed1,096,951 
Net identifiable assets acquired892,157 
Add: Negative fair value of non-controlling interests16,052 
Goodwill386,686 
Total net assets acquired$1,294,895 
_______________________
(1) The fair value of the consideration transferred related to the favorable and unfavorable terms of the cross supply agreement has been excluded.
(2) In connection with the Merger, we assumed a term loan from Chemical Technologies, of which approximately $26.9 million has been classified as short-term representing the mandatory amortization payments due within the next twelve months. See Note 7—Debt for further information.

7


Pro forma financial information

The following unaudited pro forma results of operations have been prepared as though the Merger was completed on January 1, 2019. Pro forma amounts are based on the preliminary purchase price allocation of the acquisition and are not necessarily indicative of results that may be reported in the future. Non-recurring pro forma adjustments including acquisition-related costs directly attributable to the Merger are included within the reported pro forma revenue and net income (loss).
Three Months Ended March 31,
(in thousands, except per share data)2020
Revenues$820,695 
Net income (loss) attributable to ChampionX(734,425)

Included in the net income (loss) attributable to ChampionX on a pro forma basis were goodwill and long-lived asset impairment charges of $805.0 million during the three months ended March 31, 2020.

NOTE 3—NEW ACCOUNTING STANDARDS

All new accounting pronouncements that have been issued but not yet effective are currently being evaluated and at this time are not expected to have a material impact on our financial position or results of operations.
8


NOTE 4 — SEGMENT INFORMATION

Our reporting segments are:

Production Chemical Technologies—provides oil and natural gas production and midstream markets with solutions to manage and control corrosion, oil and water separation, flow assurance, sour gas treatment and a host of water-related issues.

Production & Automation Technologies—designs, manufactures, markets and services a full range of artificial lift equipment, end-to-end digital automation solutions, as well as other production equipment. Production & Automation Technologies’ products are sold under a collection of brands including Harbison-Fischer, Norris, Alberta Oil Tool, Oil Lift Technology, PCS Ferguson, Pro-Rod, Upco, Unbridled ESP, Norriseal-Wellmark, Quartzdyne, Spirit, Theta, Timberline and Windrock.

Drilling Technologies—designs, manufactures and markets polycrystalline diamond cutters and bearings for use in oil and gas drill bits under the US Synthetic brand.

Reservoir Chemical Technologies—manufactures specialty products that support well stimulation, construction (including drilling and cementing) and remediation needs in the oil and natural gas industry.

Business activities that do not meet the criteria of an operating segment have been combined into Corporate and other. Corporate and other includes (i) corporate and overhead expenses, and (ii) revenue and costs for activities that are not operating segments.

Segment revenue and segment operating profit were as follows:
Three Months Ended March 31,
(in thousands)20212020
Segment revenue:
Production Chemical Technologies$412,371 $ 
Production & Automation Technologies166,845 205,479 
Drilling Technologies34,994 55,955 
Reservoir Chemical Technologies29,891  
Corporate and other (1)
40,787  
Total revenue$684,888 $261,434 
Segment operating profit (loss):
Production Chemical Technologies$30,357 $ 
Production & Automation Technologies5,362 (648,591)
Drilling Technologies6,386 11,359 
Reservoir Chemical Technologies(3,228) 
Total segment operating profit (loss)38,877 (637,232)
Corporate and other (1)
18,087 14,190 
Interest expense, net13,971 9,039 
Income (loss) before income taxes$6,819 $(660,461)
_______________________
(1)    Corporate and other includes costs not directly attributable or allocated to our reporting segments such as corporate executive management and other administrative functions, and the results attributable to our noncontrolling interest. Additionally, the sales and expenses related to the Cross Supply Agreement with Ecolab are included within Corporate and other. See Note 2—Merger Transaction for further information.



9


NOTE 5—REVENUE

Our revenue is generated primarily from product sales. Service revenue is generated from providing services to our customers. These services include installation, repair and maintenance, laboratory and logistics services, chemical management services, troubleshooting, reporting, water treatment services, technical advisory assistance and other field services. Lease revenue is derived from rental income of leased production equipment. These lease arrangements generally allow customers to rent equipment on a daily basis with no stated end date. Management accounts for these arrangements as a daily renewal option beginning on the lease commencement date, with the lease term determined as the period in which it is reasonably certain the option will be exercised. As our costs are shared across the various revenue categories, cost of goods sold is not tracked separately and is not discretely identifiable.

Revenue disaggregated by geography was as follows:
Three Months Ended March 31, 2021
(in thousands)Production Chemical TechnologiesProduction & Automation TechnologiesDrilling TechnologiesReservoir Chemical TechnologiesCorporateTotal
United States$149,864 $126,374 $25,407 $15,609 $25,556 $342,810 
Canada61,292 12,528 3,827 729 158 78,534 
Middle East & Africa58,370 10,272 716 6,062 5,583 81,003 
Europe42,608 1,983 2,499 1,389 2,257 50,736 
Australia6,395 9,576 117 54  16,142 
Latin America71,616 4,642  3,019 1,431 80,708 
Asia-Pacific10,492 1,463 1,553 1,120 5,802 20,430 
Other11,734 7 875 1,909  14,525 
Total revenue$412,371 $166,845 $34,994 $29,891 $40,787 $684,888 
Three Months Ended March 31, 2020
(in thousands)Production Chemical TechnologiesProduction & Automation TechnologiesDrilling TechnologiesReservoir Chemical TechnologiesCorporateTotal
United States$ $154,430 $40,940 $ $ $195,370 
Canada 13,124 4,828   17,952 
Middle East & Africa 11,905 458   12,363 
Europe 6,339 5,691   12,030 
Australia 9,222 46   9,268 
Latin America 7,560 22   7,582 
Asia-Pacific 1,978 3,508   5,486 
Other 921 462   1,383 
Total revenue$ $205,479 $55,955 $ $ $261,434 
Revenue is attributed to regions based on the location of our direct customer, which in some instances is an intermediary and not necessarily the end user.

Contract balances

Contract assets and contract liabilities from contracts with customers were as follows:
(in thousands)March 31, 2021December 31, 2020
Contract liabilities - current$16,993 $16,668 

10


NOTE 6—INTANGIBLE ASSETS

The components of our definite- and indefinite-lived intangible assets were as follows:
March 31, 2021December 31, 2020
(in thousands)Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Definite-lived
intangible assets:
Customer relationships$593,566 $332,497 $261,069 $593,068 $321,298 $271,770 
Trademarks59,875 28,927 30,948 59,881 27,565 32,316 
Patents38,749 29,827 8,922 38,635 29,289 9,346 
Unpatented technologies133,697 24,290 109,407 133,700 19,958 113,742 
Favorable supply agreements59,000 16,118 42,882 59,000 11,308 47,692 
Drawings and manuals1,797 1,797  1,783 1,783  
Other5,398 4,951 447 5,374 4,831 543 
892,082 438,407 453,675 891,441 416,032 475,409 
Indefinite-lived
intangible assets:
Trademarks3,600 — 3,600 3,600 — 3,600 
Total$895,682 $438,407 $457,275 $895,041 $416,032 $479,009 

NOTE 7—DEBT

Long-term debt consisted of the following:
(in thousands)March 31, 2021December 31, 2020
2018 Credit Facility$ $ 
2018 Term Loan Facility140,000 140,000 
2020 Term Loan Facility516,863 523,575 
6.375% Senior Notes due 2026
277,041 277,041 
Total933,904 940,616 
Net unamortized discounts and issuance costs(7,585)(8,002)
Total long-term debt$926,319 $932,614 
Current portion of long-term debt (1)
(26,850)(26,850)
Long-term debt, less current portion$899,469 $905,764 
_______________________
(1) Represents the mandatory amortization payments due within twelve months related to the 2020 Term Loan Facility.

The 2020 Term Loan Facility is subject to mandatory amortization payments of $6.7 million paid quarterly, which began on September 30, 2020, and contains customary representations and warranties, covenants, and events of default for loan facilities of this type. We were in compliance with all covenants as of March 31, 2021. The weighted average interest rate on borrowings during the period was 2.64% and 6.00% for the 2018 Term Loan Facility and 2020 Term Loan Facility, respectively.

NOTE 8—COMMITMENTS AND CONTINGENCIES

The Company is subject to various claims and contingencies related to, among other things, workers’ compensation, general liability (including product liability), automobile claims, health care claims, environmental matters, and lawsuits. We record liabilities where a contingent loss is probable and can be reasonably estimated. If the reasonable estimate of a probable loss is a range, the Company records the most probable estimate of the loss or the minimum amount when no amount within the range is a better estimate than any other amount. In accordance with applicable GAAP, the Company discloses a contingent liability
11




even if the liability is not probable or the amount is not estimable, or both, if there is a reasonable possibility that a material loss may have been incurred.

Guarantees and Indemnifications

We have provided indemnities in connection with sales of certain businesses and assets, including representations and warranties, covenants and related indemnities for environmental health and safety, tax, and employment matters. We do not have any material liabilities recorded for these indemnifications and are not aware of any claims or other information that would give rise to material payments under such indemnities.

In connection with the Company’s separation from Dover Corporation (“Dover”) in 2018, we entered into agreements with Dover that govern the treatment between Dover and us for certain indemnification matters and litigation responsibility. Generally, the separation and distribution agreement provides for cross-indemnities principally designed to place financial responsibility for the obligations and liabilities of our business with us and to place financial responsibility for the obligations and liabilities of Dover’s business with Dover. The separation and distribution agreement also establishes procedures for handling claims subject to indemnification and related matters. In addition, pursuant to the tax matters agreement, we have agreed to indemnify Dover and its affiliates against any and all tax-related liabilities incurred by them relating to the separation and/or certain related transactions to the extent caused by an acquisition of ChampionX stock or assets or by any other action or failure to act undertaken by ChampionX or its affiliates.

In connection with the Merger, we entered into agreements with Ecolab that govern the treatment between Ecolab and us for certain indemnification matters and litigation responsibility. Generally, the separation and distribution agreement provides for cross-indemnities principally designed to place financial responsibility for the obligations and liabilities of our business with us and to place financial responsibility for the obligations and liabilities of Ecolab’s business with Ecolab. The separation and distribution agreement also establishes procedures for handling claims subject to indemnification and related matters. In addition, pursuant to the Tax Matters Agreement, we have agreed to indemnify Ecolab and its affiliates for (i) all taxes for which ChampionX is responsible as defined within the Tax Matters Agreement, (ii) all taxes resulting from a breach by ChampionX of any of its representations (but only to the extent relating to a breach occurring after the consummation of the Merger) or any of its covenants under the Tax Matters Agreement, (iii) all taxes resulting from an acquisition after the Merger of any of the stock or assets of ChampionX, other than as a result of the Merger or a repayment of the ChampionX Credit Facilities and (iv) reasonable costs and expenses (including reasonable attorneys’ fees and expenses) related to the foregoing.

As of March 31, 2021 and December 31, 2020, we had $88.0 million and $88.8 million, respectively, of outstanding letters of credit, surety bonds and guarantees which expire at various dates through 2027. These financial instruments are primarily maintained as security for insurance, warranty and other performance obligations. Generally, we would only be liable for the amount of these letters of credit and surety bonds in the event of default in the performance of our obligations, the probability of which we believe is remote.

Litigation and Environmental Matters

We are involved in various pending or potential lawsuits, claims and environmental actions that have arisen in the ordinary course of our business. These proceedings primarily involve claims by private parties alleging injury arising out of use of our products, patent infringement, employment matters, and commercial disputes, as well as possible obligations to investigate and mitigate the effects on the environment of the disposal or release of certain chemical substances at various sites, such as Superfund sites and either operating or owned facilities. We review the probable outcome of such proceedings, the costs and expenses reasonably expected to be incurred and accrued to date, and the availability and extent of insurance coverage. We accrue a liability for legal matters that are probable and can be reasonably estimated. If the reasonable estimate of a probable loss is a range, the Company records the most probable estimate of the loss or the minimum amount when no amount within the range is a better estimate than any other amount. We are unable to predict the ultimate outcome of these actions because of the inherent uncertainty of litigation and unfavorable rulings or developments could occur, and there can be no certainty that the Company may not ultimately incur changes in excess of recorded liabilities. However, we believe the most probable, ultimate resolution of these matters will not have a material adverse effect on our consolidated financial position, results of operations or cash flows.

12




Environmental Matters

The Company is currently participating in environmental assessments and remediation at approximately 11 locations, the majority of which are in the U.S., and environmental liabilities have been accrued reflecting our best estimate of future costs. Potential insurance reimbursements are not anticipated in the Company’s accruals for environmental liabilities. As of March 31, 2021 environmental liability accruals related to these locations were $7.7 million.

Prior to the separation from Dover in 2018, groundwater contamination was discovered at the Norris Sucker Rods plant site located in Tulsa, Oklahoma ("Norris"). Initial remedial efforts were undertaken at the time of discovery of the contamination and Norris has since coordinated monitoring and remediation with the Oklahoma Department of Environmental Quality ("ODEQ"). As part of the ongoing long-term remediation process, Norris contracted an engineering and consulting firm to develop a range of possible additional remedial alternatives in order to accelerate the remediation process and associated cost estimates for the work. In October 2019, we received the firm’s preliminary remedial alternatives for consideration. We have submitted our long-term remediation plan and it was approved by ODEQ. We are now in discussion with ODEQ to finalize a consent order. Because we have not yet finalized the consent order for further remediation at the site and discussions with ODEQ remain ongoing, we cannot fully anticipate the timing, outcome or possible impact of such further remedial activities, financial or otherwise. As a result of the recommendations in the report, we accrued liabilities for these remediation efforts of approximately $2.0 million as of December 31, 2020. Liabilities could increase in the future at such time as we ultimately reach agreement with ODEQ on our remediation plan and such liabilities become probable and can be reasonably estimated, however, there have been no changes to our estimated liability as of March 31, 2021.

Matters Related to Deepwater Horizon Incident Response

On April 22, 2010, the deepwater drilling platform, the Deepwater Horizon, operated by a subsidiary of BP plc, sank in the Gulf of Mexico after an explosion and fire, resulting in a massive oil spill. Certain entities that are now subsidiaries of ChampionX as a result of the Merger (collectively the “COREXIT Defendants”) supplied COREXIT™ 9500, an oil dispersant product listed on the U.S. EPA National Contingency Plan Product Schedule, which was used in the response to the spill. In connection with the provision of COREXIT™, the COREXIT Defendants were named in several lawsuits. Cases arising out of the Deepwater Horizon accident were administratively transferred and consolidated for pre-trial purposes under In Re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010, Case No. 10-md-02179 in the United States District Court in the Eastern District of Louisiana (E.D. La.) (“MDL 2179”). Claims related to the response to the oil spill were consolidated in a master complaint captioned the “B3 Master Complaint.” In 2011, Transocean Deepwater Drilling, Inc. and its affiliates (the “Transocean Entities”) named the COREXIT Defendants and other unaffiliated companies as first party defendants (In re the Complaint and Petition of Triton Asset Leasing GmbH, et al, MDL No. 2179, Civil Action 10-2771). In April and May 2011, the Transocean Entities, Cameron International Corporation, Halliburton Energy Services, Inc., M-I L.L.C., Weatherford U.S., L.P. and Weatherford International, Inc. (collectively, the “Cross Claimants”) filed cross claims in MDL 2179 against the COREXIT Defendants and other unaffiliated cross defendants. In April and June 2011, in support of its defense of the claims against it, the COREXIT Defendants filed counterclaims against the Cross Claimants. On May 18, 2012, the COREXIT Defendants filed a motion for summary judgment as to the claims in the B3 Master Complaint. On November 28, 2012, the Court granted the COREXIT Defendants’ motion and dismissed with prejudice the claims in the B3 Master Complaint asserted against the COREXIT Defendants. There currently remain three “B3” cases that had asserted claims against Nalco and that remain pending against other defendants. Because the Court’s decision was not a “final judgment” for purposes of appeal with respect to those claims, under Federal Rule of Appellate Procedure 4(a), plaintiffs will have 30 days after entry of final judgment in each case to appeal the Court’s summary judgment decision.

The Company believes the claims asserted against the COREXIT Defendants are without merit and intends to defend these lawsuits vigorously. The Company also believes that it has rights to contribution and/or indemnification (including legal expenses) from third parties. However, we cannot predict the outcome of these lawsuits, the involvement it might have in these matters in the future, or the potential for future litigation.

13




NOTE 9—RESTRUCTURING AND OTHER RELATED CHARGES

During 2021, we approved a restructuring plan (the 2021 Plan) related to the consolidation of product lines and associated facility closures and workforce reductions. As a result, we recognized charges of $4.3 million during the three months ended March 31, 2021 consisting of employee severance and related benefits. During the three months ended March 31, 2020, we recorded restructuring and other charges of $2.8 million.

The following table presents the restructuring and other related charges by segment as classified in our condensed consolidated statements of income (loss).
 Three Months Ended March 31,
(in thousands)20212020
Segment restructuring charges:
Production Chemical Technologies$688 $ 
Production & Automation Technologies3,524 671 
Drilling Technologies 2,095 
Reservoir Chemical Technologies44  
Total$4,256 $2,766 
Statements of Income (Loss) classification:
Cost of goods and services$3,484 $2,039 
Selling, general and administrative expense772 727 
Total$4,256 $2,766 

Our liability balance for restructuring and other related charges at March 31, 2021, reflects employee severance and related benefits initiated during the period as well as liabilities assumed in the Merger. Additional programs may be initiated during 2021 with related restructuring charges.

The following table details our restructuring accrual activities during the three months ended March 31, 2021:
(in thousands)Restructuring Accrual Balance
December 31, 2020$2,951 
Restructuring charges and asset write downs2,448 
Payments(2,409)
Other, including foreign currency translation(6)
March 31, 2021$2,984 

14




NOTE 10—EQUITY AND CASH INCENTIVE PROGRAMS

Stock-based compensation expense is reported within selling, general and administrative expense in the condensed consolidated statements of income (loss). Stock-based compensation expense relating to all stock-based incentive plans was as follows:
 Three Months Ended March 31,
(in thousands)20212020
Stock-based compensation expense$6,442 $2,429 
Tax benefit(1,353)(599)
Stock-based compensation expense, net of tax$5,089 $1,830 

A summary of activity relating to our share-based awards for the three months ended March 31, 2021, was as follows:
(in shares)Stock-Settled Appreciation RightsPerformance Share AwardsRestricted Stock UnitsNon-Qualified Stock Options
Outstanding at January 1, 2021415,331 278,763 2,669,779 7,175,040 
Granted 333,037 838,399  
Forfeited(2,134) (61,057)(29,981)
Exercised / vested  (94,680)(577,276)
Outstanding at March 31, 2021413,197 611,800 3,352,441 6,567,783 
NOTE 11 — ACCUMULATED OTHER COMPREHENSIVE LOSS

Accumulated other comprehensive lossAccumulated other comprehensive loss consisted of the following:
(in thousands)Foreign Currency TranslationDefined Pension and Other Post-Retirement BenefitsCash Flow HedgesAccumulated Other Comprehensive Loss
December 31, 2019$(35,210)$(8,827)$ $(44,037)
Other comprehensive income (loss) before reclassifications, net of tax(11,052)  (11,052)
Reclassification adjustment for net losses included in net income, net of tax 99  99 
Other comprehensive income, net of tax(11,052)99  (10,953)
March 31, 2020$(46,262)$(8,728)$ $(54,990)

<
(in thousands)Foreign Currency TranslationDefined Pension and Other Post-Retirement Benefits