ncsm20250331

ncsm20250331_10q.htm

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑ Quarterly Report Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2025

☐ 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: 001-38071

NCS Multistage Holdings, Inc.

(Exact name of registrant as specified in its charter)

	Delaware		46-1527455
	(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification number)

	19350 State Highway 249, Suite 600
	Houston, Texas		77070
	(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (281) 453-2222

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	NCSM	Nasdaq Capital Market

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 filer	☐	Accelerated filer	☐
Non-accelerated filer	☑	Smaller 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 Act). Yes ☐ No ☑

As of April 29, 2025, there were 2,540,849 shares of common stock outstanding.

Table of Contents

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations	4
	Condensed Consolidated Statements of Comprehensive Income	5
	Condensed Consolidated Statements of Stockholders’ Equity	6
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Unaudited Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29

Item 4.	Controls and Procedures	29

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	30

Item 1A.	Risk Factors	30

Item 5.	Other Information	30

Item 6.	Exhibits	31

Signatures		32

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PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

NCS MULTISTAGE HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)

	*March 31,*			*December 31,*
	*2025*			*2024*
Assets
Current assets
Cash and cash equivalents	$	22,997		$	25,880
Accounts receivable—trade, net		38,403			31,513
Inventories, net		40,756			40,971
Prepaid expenses and other current assets		1,852			2,063
Other current receivables		5,033			5,143
Total current assets		109,041			105,570
Noncurrent assets
Property and equipment, net		20,477			21,283
Goodwill		15,222			15,222
Identifiable intangibles, net		3,523			3,690
Operating lease assets		5,773			5,911
Deposits and other assets		660			712
Deferred income taxes, net		422			424
Total noncurrent assets		46,077			47,242
Total assets	$	155,118		$	152,812
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable—trade	$	11,751		$	8,970
Accrued expenses		5,348			8,351
Income taxes payable		1,103			683
Operating lease liabilities		1,676			1,602
Current maturities of long-term debt		2,250			2,141
Other current liabilities		1,737			3,672
Total current liabilities		23,865			25,419
Noncurrent liabilities
Long-term debt, less current maturities		5,370			6,001
Operating lease liabilities, long-term		4,662			4,891
Other long-term liabilities		207			206
Deferred income taxes, net		178			186
Total noncurrent liabilities		10,417			11,284
Total liabilities		34,282			36,703
Commitments and contingencies (Note 10)
Stockholders’ equity
Preferred stock, $0.01 par value, 10,000,000 shares authorized, no shares issued and outstanding at March 31, 2025 and December 31, 2024		—			—
Common stock, $0.01 par value, 11,250,000 shares authorized, 2,607,362 shares issued and 2,540,849 shares outstanding at March 31, 2025 and 2,563,979 shares issued and 2,507,430 shares outstanding at December 31, 2024		26			26
Additional paid-in capital		447,936			447,384
Accumulated other comprehensive loss		(87,615	)		(87,604	)
Retained deficit		(254,968	)		(259,024	)
Treasury stock, at cost, 66,513 shares at March 31, 2025 and 56,549 shares at December 31, 2024		(2,211	)		(1,943	)
Total stockholders' equity		103,168			98,839
Non-controlling interest		17,668			17,270
Total equity		120,836			116,109
Total liabilities and stockholders' equity	$	155,118		$	152,812

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

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NCS MULTISTAGE HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

	*Three Months Ended*
	*March 31,*
	*2025*			*2024*
Revenues
Product sales	$	35,066		$	31,758
Services		14,939			12,100
Total revenues		50,005			43,858
Cost of sales
Cost of product sales, exclusive of depreciation and amortization expense shown below		20,352			19,692
Cost of services, exclusive of depreciation and amortization expense shown below		7,798			6,595
Total cost of sales, exclusive of depreciation and amortization expense shown below		28,150			26,287
Selling, general and administrative expenses		16,195			13,830
Depreciation		1,204			1,073
Amortization		167			167
Income from operations		4,289			2,501
Other income (expense)
Interest expense, net		(42	)		(100	)
Other income, net		883			1,137
Foreign currency exchange loss, net		(3	)		(498	)
Total other income		838			539
Income before income tax		5,127			3,040
Income tax expense		673			487
Net income		4,454			2,553
Net income attributable to non-controlling interest		398			483
Net income attributable to NCS Multistage Holdings, Inc.	$	4,056		$	2,070
Earnings per common share
Basic earnings per common share attributable to NCS Multistage Holdings, Inc.	$	1.58		$	0.83
Diluted earnings per common share attributable to NCS Multistage Holdings, Inc.	$	1.51		$	0.82
Weighted average common shares outstanding
Basic		2,568			2,508
Diluted		2,686			2,539

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

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NCS MULTISTAGE HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

	*Three Months Ended*
	*March 31,*
	*2025*			*2024*
Net income	$	4,454		$	2,553
Foreign currency translation adjustments, net of tax of $0		(11	)		(496	)
Comprehensive income		4,443			2,057
Less: Comprehensive income attributable to non-controlling interest		398			483
Comprehensive income attributable to NCS Multistage Holdings, Inc.	$	4,045		$	1,574

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

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NCS MULTISTAGE HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except share data)

(Unaudited)

	Three Months Ended March 31, 2025
	Preferred Stock				Common Stock				Additional Paid-In		Accumulated Other Comprehensive			Retained			Treasury Stock						Non-controlling		Total Stockholders'
	Shares		Amount		Shares		Amount		Capital		Loss			Deficit			Shares			Amount			Interest		Equity
Balances as of December 31, 2024		—	$	—		2,563,979	$	26	$	447,384	$	(87,604	)	$	(259,024	)		(56,549	)	$	(1,943	)	$	17,270	$	116,109
Share-based compensation		—		—		—		—		552		—			—			—			—			—		552
Net income		—		—		—		—		—		—			4,056			—			—			398		4,454
Vesting of restricted stock		—		—		43,383		—		—		—			—			—			—			—		—
Shares withheld		—		—		—		—		—		—			—			(9,964	)		(268	)		—		(268	)
Currency translation adjustment		—		—		—		—		—		(11	)		—			—			—			—		(11	)
Balances as of March 31, 2025		—	$	—		2,607,362	$	26	$	447,936	$	(87,615	)	$	(254,968	)		(66,513	)	$	(2,211	)	$	17,668	$	120,836

	Three Months Ended March 31, 2024
	Preferred Stock				Common Stock				Additional Paid-In		Accumulated Other Comprehensive			Retained			Treasury Stock						Non-controlling			Total Stockholders'
	Shares		Amount		Shares		Amount		Capital		Loss			Deficit			Shares			Amount			Interest			Equity
Balances as of December 31, 2023		—	$	—		2,482,796	$	25	$	444,638	$	(85,752	)	$	(265,617	)		(39,052	)	$	(1,676	)	$	17,775		$	109,393
Share-based compensation		—		—		—		—		766		—			—			—			—			—			766
Net income		—		—		—		—		—		—			2,070			—			—			483			2,553
Distribution to noncontrolling interest		—		—		—		—		—		—			—			—			—			(500	)		(500	)
Vesting of restricted stock		—		—		57,830		—		—		—			—			—			—			—			—
Shares withheld		—		—		—		—		—		—			—			(15,866	)		(237	)		—			(237	)
Currency translation adjustment		—		—		—		—		—		(496	)		—			—			—			—			(496	)
Balances as of March 31, 2024		—	$	—		2,540,626	$	25	$	445,404	$	(86,248	)	$	(263,547	)		(54,918	)	$	(1,913	)	$	17,758		$	111,479

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

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NCS MULTISTAGE HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	*Three Months Ended*
	*March 31,*
	*2025*			*2024*
Cash flows from operating activities
Net income	$	4,454		$	2,553
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization		1,371			1,240
Amortization of deferred loan costs		52			51
Share-based compensation		1,445			902
Provision for inventory obsolescence		(35	)		316
Deferred income tax expense		1			5
Gain on sale of property and equipment		(36	)		(172	)
Provision for credit losses		42			—
Net foreign currency unrealized loss (gain)		(849	)		373
Proceeds from note receivable		—			61
Changes in operating assets and liabilities:
Accounts receivable—trade		(6,978	)		(10,282	)
Inventories, net		200			1,521
Prepaid expenses and other assets		890			29
Accounts payable—trade		3,742			2,355
Accrued expenses		(3,003	)		130
Other liabilities		(3,273	)		(1,339	)
Income taxes receivable/payable		332			377
Net cash used in operating activities		(1,645	)		(1,880	)
Cash flows from investing activities
Purchases of property and equipment		(464	)		(299	)
Purchase and development of software and technology		—			(13	)
Proceeds from sales of property and equipment		13			176
Net cash used in investing activities		(451	)		(136	)
Cash flows from financing activities
Payments on finance leases		(522	)		(449	)
Line of credit borrowings		1,963			1,158
Payments of line of credit borrowings		(1,963	)		(602	)
Treasury shares withheld		(268	)		(237	)
Distribution to noncontrolling interest		—			(500	)
Net cash used in financing activities		(790	)		(630	)
Effect of exchange rate changes on cash and cash equivalents		3			(70	)
Net change in cash and cash equivalents		(2,883	)		(2,716	)
Cash and cash equivalents beginning of period		25,880			16,720
Cash and cash equivalents end of period	$	22,997		$	14,004
Noncash investing and financing activities
Assets obtained in exchange for new finance lease liabilities	$	—		$	696
Assets obtained in exchange for new operating lease liabilities	$	244		$	—

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

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NCS MULTISTAGE HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Basis of Presentation

Nature of Business

NCS Multistage Holdings, Inc., a Delaware corporation, through its wholly owned subsidiaries and subsidiaries for which it has a controlling voting interest (collectively referred to as the “Company,” “NCS,” “we,” “our” and “us”), is primarily engaged in providing engineered products and support services for oil and natural gas well construction, well completions and field development strategies. We offer our products and services primarily to exploration and production (“E&P”) companies for use both in onshore and offshore wells. We operate through service facilities principally located in Houston and Odessa, Texas; Tulsa and Oklahoma City, Oklahoma; Calgary, Red Deer, Grande Prairie and Estevan, Canada; Neuquén, Argentina and Stavanger, Norway.

Basis of Presentation

Our accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities Exchange Act of 1934, as amended, issued by the Securities Exchange Commission (“SEC”) and have not been audited by our independent registered public accounting firm. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with our financial statements and related notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024 (“Annual Report”). We consolidate Repeat Precision, LLC and its subsidiary (“Repeat Precision”), an entity in which we own a 50% interest and have a controlling voting interest, operating in the United States and Mexico. The other party’s 50% ownership interest is presented separately as a non-controlling interest. In the opinion of management, these condensed consolidated financial statements reflect all normal, recurring adjustments necessary for a fair statement of the interim periods presented. The results of operations for interim periods are not necessarily indicative of those for a full year. All intercompany accounts and transactions have been eliminated for purposes of preparing these condensed consolidated financial statements.

Significant Accounting Policies

Our significant accounting policies are described in “Note 2. Summary of Significant Accounting Policies” in our Annual Report.

Recent Accounting Pronouncements

In November 2024, the FASB issued ASU No. 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This ASU requires additional disclosure of certain costs and expenses within the notes to the financial statements. The new standard is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. We are currently evaluating the impact of the adoption of this guidance.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This ASU improves income tax disclosures including a requirement to present specific categories in the effective tax rate reconciliation, additional information for reconciling items that meet a quantitative threshold, certain disclosures pertaining to income taxes paid (net of refunds received) and amendments to other disclosure requirements. The new standard is effective for annual periods beginning after December 15, 2024 and should be applied prospectively although retrospective application is permitted. Early adoption is permitted. We are currently evaluating the impact of the adoption of this guidance.

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NCS MULTISTAGE HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 2. Segment and Geographic Information

We sell complementary products and services largely to E&P customers in the oil and gas industry, through one reportable segment. See “Note 3. Segment and Geographic Information” to our consolidated financial statements of our Annual Report for a more detailed description. We manage our activities on a consolidated basis applying qualitative factors including the nature of the products and services, the nature and commonality of production processes, a shared customer base primarily in North America, the scope of geographic operations and a common industry and regulatory environment. Our chief operating decision maker (“CODM”) is the Chief Executive Officer.

We evaluate our performance on a consolidated basis by reviewing key income statement items such as revenue, gross margin, and net income, as well as other specific balance sheet and cash flow items; comparing certain key financial figures to financial guidance; and evaluating our share price performance and estimated trading multiple relative to selected peers.

Our CODM utilizes the GAAP measures of net income and cash flow from operations as primary measures of profitability and cash flow, respectively, as well as secondary non-GAAP measures of Adjusted EBITDA and free cash flow. The CODM assesses segment performance using these measures, and he decides how to allocate resources, which may include evaluating the budget, current forecast and our consolidated cash position, with periodic review of our market share and our common stock performance relative to peers. The CODM assesses business performance consistent with the presentation on our consolidated financial statements, supplemented with a review of certain significant selling, general and administrative (“SG&A”) expense categories.

The following table summarizes significant SG&A expenses that are not separately presented on our consolidated statements of operations (in thousands):

	*Three Months Ended*
	*March 31,*
	*2025*		*2024*
Payroll and employee benefits	$	9,952	$	8,595
Share-based compensation		1,445		902
Professional services		2,202		1,727
Insurance		491		524
Software and hardware		575		511
Other		1,530		1,571
Total SG&A		16,195		13,830

The following table summarizes revenue by geographic area attributed based on the current billing address of the customer (in thousands):

	*Three Months Ended*
	*March 31,*
	*2025*		*2024*
United States
Product sales	$	6,867	$	7,767
Services		2,505		2,244
Total United States		9,372		10,011
Canada
Product sales		26,843		22,675
Services		10,875		8,994
Total Canada		37,718		31,669
Other Countries
Product sales		1,356		1,316
Services		1,559		862
Total other countries		2,915

SEC Form 10-Q filed by NCS Multistage Holdings Inc.