v3.26.1
Note 5 - Business Segment Reporting
 3 Months Ended
Mar. 31, 2026
Notes to Financial Statements  
Segment Reporting [Text Block]

5.

Business segment reporting

 

Operating segments are defined as components of an enterprise for which separate financial information is available that is regularly evaluated by the Company’s Chief Operating Decision Maker (“CODM”), which is our chief executive officer (“CEO”), in deciding how to allocate resources and assess performance. Our operations are comprised of four operating segments which also represent our reportable segments and are aligned with our geographic regions as below:

 

 

•

North and Latin America (“NLA”),

 

•

Europe and Sub-Saharan Africa (“ESSA”),

 

•

Middle East and North Africa (“MENA”), and

 

•

Asia-Pacific (“APAC”).

 

Each reportable segment provides products and services in well construction, well flow management, subsea well access and well intervention and integrity to operators within their respective geographic regions. The reportable segments are separately managed business units consistent with the way our CODM manages the business. Activity in each region may vary and may not be responsive to changes in the broader global oil and gas market, and demand for our various offerings will generally benefit all product lines in that region. Assets used in support of our operations can in many instances be moved from country to country within a region, with relative ease as compared to moving between regions, in order to address demand.

 

The accounting policies of the segments are the same as those described in Note 2 “Basis of presentation and significant accounting policies.” 

 

Our CODM regularly evaluates the performance of our operating segments using Segment EBITDA, which we define as income (loss) before income taxes adjusted for corporate costs, equity in income of joint ventures, depreciation and amortization expense, impairment expense, severance and other expense, gain (loss) on disposal of assets, foreign exchange (gains) losses, merger and integration expense, other income (expenses), net, interest and finance expense, net and stock-based compensation expense.

 

The CODM uses Segment EBITDA to allocate resources (including employees, property and capital resources) to each segment predominantly in the annual budget and forecasting process. Our CODM assesses the performance using Segment EBITDA to compare the results of each segment with one another and considers budget-to-actual variances on a monthly basis. Our CODM also uses Segment EBITDA to evaluate product pricing and determine the compensation of certain employees.

 

The following tables present our revenue, significant segment expenses and Segment EBITDA disaggregated by our operating segments and reconciliation to income before income taxes (in thousands):

 

  

Three Months Ended March 31, 2026

 
  

NLA

  

ESSA

  

MENA

  

APAC

  

Consolidated

 

Revenue

 $128,183  $113,919  $81,663  $43,808  $367,573 

Compensation and related cost

  (55,257)  (47,033)  (30,407)  (19,953)    

Cost of product, materials, and supplies

  (32,439)  (23,889)  (20,290)  (12,568)    

Other (1)

  (14,550)  (11,492)  (7,399)  (4,091)    

Total Segment EBITDA

 $25,937  $31,505  $23,567  $7,196  $88,205 

Corporate costs (2)

                  (28,527)

Equity in income of joint ventures

                  3,231 

Depreciation and amortization expense

                  (45,395)

Merger and integration expense

                  (288)

Severance and other expense

                  (3,226)

Stock-based compensation expense

                  (7,274)

Foreign exchange loss

                  (339)

Other income, net

                  347 

Interest and finance expense, net

                  (1,551)

Income before income taxes

                 $5,183 

 

  

Three Months Ended March 31, 2025

 
  

NLA

  

ESSA

  

MENA

  

APAC

  

Consolidated

 

Revenue

 $134,278  $112,373  $93,554  $50,667  $390,872 

Compensation and related cost

  (54,314)  (43,835)  (32,792)  (20,372)    

Cost of product, materials, and supplies

  (35,610)  (28,982)  (19,989)  (14,458)    

Other (1)

  (13,968)  (10,368)  (6,605)  (4,975)    

Total Segment EBITDA

 $30,386  $29,188  $34,168  $10,862  $104,604 

Corporate costs (2)

                  (32,082)

Equity in income of joint ventures

                  3,706 

Depreciation and amortization expense

                  (45,421)

Merger and integration expense

                  (1,740)

Severance and other expense

                  (6,082)

Stock-based compensation expense

                  (6,968)

Foreign exchange loss

                  (1,988)

Other expense, net

                  1,654 

Interest and finance expense, net

                  (3,451)

Income before income taxes

                 $12,232 

(1)

Other segment expenses consists primarily of facilities, sales and purchase tax, motor vehicles, insurance, professional and other costs.

(2)

Corporate costs include the costs of running our corporate head office and other central functions that support the operating segments but are not attributable to a particular operating segment, including central product line management, research, engineering and development, logistics, sales and marketing and health and safety.

 

The following table presents total assets by geographic region and assets held centrally. Assets held centrally includes certain property plant and equipment, investments in joint ventures, collateral deposits, income tax related balances, corporate cash and cash equivalents, accounts receivable and other current and non-current assets, which are not included in the measure of segment assets reviewed by the CODM:

 

  

March 31,

  

December 31,

 
  

2026

  

2025

 

NLA

 $788,483  $801,318 

ESSA

  560,720   569,518 

MENA

  381,139   391,038 

APAC

  197,303   200,786 

Assets held centrally

  317,257   296,775 

Total

 $2,244,902  $2,259,435 

 

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

 

  

Three Months Ended March 31,

 
  

2026

  

2025

 

NLA

 $5,929  $16,163 

ESSA

  3,488   7,090 

MENA

  8,023   5,717 

APAC

  2,976   3,357 

Assets held centrally

  5,348   785 

Total

 $25,764  $33,112