Enhanced Investments - Financial Portal

Published: 2025-04-30 00:00:00 ET

<<< go to CHX company page

championx-20250331

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, 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: 001-38441

ChampionX Corporation

(Exact name of registrant as specified in its charter)


Delaware		82-3066826
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2445 Technology Forest Blvd,	Building 4, 12th Floor
The Woodlands,	Texas	77381
(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 class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.01 par value	CHX	The 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 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 Exchange Act). Yes ☐ No ☑

The registrant had 191.4 million shares of common stock, $0.01 par value, outstanding as of April 24, 2025.

CHAMPIONX CORPORATION

TABLE OF CONTENTS


PART I — FINANCIAL INFORMATION		Page
Item 1.	Financial Statements (unaudited)
	Condensed Consolidated Statements of Income	1
	Condensed Consolidated Statements of Comprehensive Income (Loss)	2
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Changes in Stockholders’ Equity	4
	Condensed Consolidated Statements of Cash Flows	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
	Executive Overview and Business Outlook	22
	C onsolidated Results of Operations	24
	Segment Results of Operations	25
	Capital Resources and Liquidity	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	28

PART II — OTHER INFORMATION
Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	1
Item 3.	Defaults Upon Senior Securities	30
Item 4.	Mine Safety Disclosures	30
Item 5.	Other Information	30
Item 6.	Exhibits	31
SIGNATURES		32

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 and assumptions (some of which are significant or beyond our control) 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, 2024 and in Part II, Item 1A, “Risk Factors,” in this Quarterly Report on Form 10-Q, and include the following:

•The impact of the Merger Agreement (as defined below), including the disruption of management’s attention from ongoing operations, an inability to complete the Merger (as defined below) due to failure to obtain required regulatory approvals or satisfy other closing conditions, the risk that if the Merger is not completed, the market price of our common stock could decline, the risk that we may not be able to retain key personnel, the impact on our relationships with our customers and suppliers, the impact on our operations, the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement.

•Demand for, and profitability of our products and services, is affected by changes in the price of, and demand for, crude oil and natural gas in domestic and international markets;

•Cost inflation and availability of raw materials;

•The impact of inflation on wholesale product costs, labor rates, transportation costs, and on our customers’ financial position and ability to purchase our products;

•Global economic conditions, geopolitical issues, supply chain disruptions, and availability and cost of credit, and the impact thereof on our operations and those of our customers and suppliers;

•Changes in the amount of or types of products and services our customers buy from us due to their decreased spending or demand changes that could reduce our revenues or profit margin;

•Our ability to successfully compete with other companies in our industry;

•Our ability to develop and implement or introduce new technologies, products, and services, as well as our ability to protect and maintain intellectual property assets;

•Our ability to successfully execute potential acquisitions and integrate acquired businesses;

•Potential liabilities arising out of the installation, use or manufacturing of our products or from a chemical spill, release or other hazard;

•Manufacturing disruptions, particularly with respect to our chemical products, including as a result of fires, explosions and chemical spills, releases or discharges;

•Continuing consolidation within our customers’ industry;

•Credit risks related to our customer base or the loss of significant customers;

•Risks relating to our existing international operations and expansion into new geographical markets;

•Risks relating to improper conduct by any of our employees, agents or business partners;

•Failure to attract, retain and develop personnel;

•The impact of natural disasters and other unusual weather conditions on our business;

•Investor sentiment towards companies in the oil and gas industry due to climate change, fossil fuels and other environmental, social and governance matters;

•Changes in domestic and foreign governmental public policies and actions of governments that impact oil and gas operations or favor renewable energy projects, risks associated with entry into emerging markets, changes in statutory tax rates and unanticipated outcomes with respect to tax audits;

•Disruptions in the political, regulatory, economic and social conditions of the countries in which we conduct business;

•Fluctuations in currency markets worldwide;

•The impact of our indebtedness on our financial position and operating flexibility;

•Disruptions in the capital and credit markets;

•The impact of war, terrorism and civil unrest;

•Risks relating to information technology and cybersecurity, including the potential for cyberattacks or security breaches that could disrupt our or our partners’ or suppliers’ operations, compromise confidential or otherwise protected information, damage our reputation, expose us to legal liability, or cause financial losses;

•Changes in federal, state and local legislation and regulations relating to oil and gas development and the potential for related litigation or restrictions on our customers;

•Changes in environmental and health and safety laws and regulations which may increase our costs, limit the demand for our products and services or restrict our operations; and

•The impact of tariffs and other trade measures on our business.

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

(Unaudited)


	Three Months Ended March 31,
(in thousands, except per share data)	2025		2024
Revenue:
Product revenue	$	731,086	$	807,827
Service revenue	101,653		87,179
Lease and other revenue	31,725		27,135
Total revenue	864,464		922,141
Cost of goods and services	572,938		622,937
Gross profit	291,526		299,204
Costs and expenses:
Selling, general and administrative expense	177,045		172,414

(Gain) loss on sale-leaseback transaction and disposal group	—		(29,883)
Interest expense, net	13,196		13,935
Foreign currency transaction losses, net	1,504		55
Other (income) expense, net	(4,631)		2,927
Income before income taxes	104,412		139,756
Provision for income taxes	15,384		26,596
Net income	89,028		113,160
Net income attributable to noncontrolling interest	3,231		237
Net income attributable to ChampionX	$	85,797	$	112,923

Earnings per share attributable to ChampionX:
Basic	$	0.45	$	0.59
Diluted	$	0.44	$	0.58
Weighted-average shares outstanding:
Basic	191,143		190,803
Diluted	193,709		193,964

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

CHAMPIONX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended March 31,
(in thousands)	2025		2024
Net income	$	89,028	$	113,160
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	9,914		(10,078)
Cash flow hedges	(2,178)		3,130
Defined pension and other post-retirement benefits adjustments, net	175		(37)
Other comprehensive income (loss)	7,911		(6,985)
Comprehensive income	96,939		106,175
Less: Comprehensive income attributable to noncontrolling interest	3,231		237
Comprehensive income attributable to ChampionX	$	93,708	$	105,938

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

CHAMPIONX CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


(in thousands, except share data)	March 31, 2025		December 31, 2024
ASSETS
Current Assets:
Cash and cash equivalents	$	526,559	$	507,681
Receivables, net of allowances of $4,321 in 2025 and $5,118 in 2024	417,639		466,782
Inventories, net	497,183		496,831
Assets held for sale	241,791		14,001
Prepaid expenses and other current assets	85,617		78,602
Total current assets	1,768,789		1,563,897
Property, plant, and equipment, net of accumulated depreciation of $746,333 in 2025 and $849,465 in 2024	729,931		755,422
Goodwill	619,505		718,944
Intangible assets, net	247,907		258,614
Operating lease right-of-use assets	60,995		100,427

Other non-current assets	73,263		72,948

Total assets	$	3,500,390	$	3,470,252
LIABILITIES AND EQUITY
Current Liabilities:
Current portion of long-term debt	$	6,203	$	6,203
Accounts payable	498,335		455,531
Accrued compensation and employee benefits	64,351		113,907
Current portion of operating lease liabilities	15,511		16,794

Liabilities held for sale	61,415		—
Accrued expenses and other current liabilities	139,081		193,437
Total current liabilities	784,896		785,872
Long-term debt	590,746		591,453
Deferred income taxes	51,907		62,373
Operating lease liabilities	42,424		81,340
Other long-term liabilities	125,723		118,036
Total liabilities	1,595,696		1,639,074
Stockholders’ equity:
Common stock (2.5 billion shares authorized, $0.01 par value) 191.4 million shares and 190.7 million shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively	1,914		1,907
Capital in excess of par value of common stock	2,158,660		2,164,098

Accumulated deficit	(171,239)		(239,048)
Accumulated other comprehensive loss	(72,609)		(80,520)
ChampionX stockholders’ equity	1,916,726		1,846,437
Noncontrolling interest	(12,032)		(15,259)
Total equity	1,904,694		1,831,178
Total liabilities and equity	$	3,500,390	$	3,470,252

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

CHAMPIONX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Unaudited)


	Common Stock
(in thousands)	Shares	Par Value		Capital in Excess of Par Value		Accum. Deficit		Accum. Other Comp. Loss		Non-controlling Interest		Total
December 31, 2024	190,717	$	1,907	$	2,164,098	$	(239,048)	$	(80,520)	$	(15,259)	$	1,831,178
Net income	—	—		—		85,797		—		3,231		89,028
Other comprehensive income	—	—		—		—		7,911		—		7,911
Stock-based compensation	660	6		6,715		—		—		—		6,721
Stock options exercised	54	1		344		—		—		—		345
Taxes withheld on issuance of stock-based awards	—	—		(12,497)		—		—		—		(12,497)
Dividends declared to common stockholders ($0.095 per share)	—	—		—		(18,330)		—		—		(18,330)


Cumulative translation adjustments and other	—	—		—		342		—		(4)		338

March 31, 2025	191,431	$	1,914	$	2,158,660	$	(171,239)	$	(72,609)	$	(12,032)	$	1,904,694


	Common Stock
(in thousands)	Shares	Par Value		Capital in Excess of Par Value		Accum. Deficit		Accum. Other Comp. Loss		Non-controlling Interest		Total
December 31, 2023	191,135	$	1,913	$	2,166,911	$	(455,676)	$	(36,526)	$	(15,591)	$	1,661,031
Net income	—	—		—		112,923		—		237		113,160
Other comprehensive loss	—	—		—		—		(6,985)		—		(6,985)
Stock-based compensation	677	7		6,166		—		—		—		6,173
Stock options exercised	168	2		915		—		—		—		917
Taxes withheld on issuance of stock-based awards	—	—		(11,821)		—		—		—		(11,821)
Dividends declared to common stockholders ($0.095 per share)	—	—		—		(17,967)		—		—		(17,967)
Repurchase and cancellation of common stock	(1,611)	(18)		(18,288)		(31,093)		—		—		(49,399)

Cumulative translation adjustments	—	—		—		—		—		65		65

March 31, 2024	190,369	$	1,904	$	2,143,883	$	(391,813)	$	(43,511)	$	(15,289)	$	1,695,174

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

CHAMPIONX CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Three Months Ended March 31,
(in thousands)	2025		2024
Cash flows from operating activities:
Net income	$	89,028	$	113,160
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization	60,056		59,580
(Gain) loss on sale-leaseback transaction and disposal group	—		(29,883)

Loss on Argentina Blue Chip Swap transaction	—		4,092
Stock-based compensation	6,721		6,173
Provision for inventory obsolescence and write-downs	1,744		2,621

Deferred income taxes	(10,941)		(12,903)
Loss (gain) on disposal of fixed assets	1,616		1,107

Amortization of deferred loan costs and accretion of discount	1,059		1,059

Other	1,429		1,863
Changes in operating assets and liabilities (net of effects of foreign exchange):
Receivables	13,937		62,915
Inventories	(25,569)		(39,873)
Leased assets	(6,665)		(4,254)
Other assets	(19,955)		(602)
Accounts payable	40,675		68,248
Other liabilities	(86,333)		(59,795)






Net cash flows provided by operating activities	66,802		173,508

Cash flows from investing activities:
Capital expenditures	(31,250)		(31,912)
Proceeds from sale of fixed assets	3,004		2,390
Proceeds from sale-leaseback transaction	—		44,292
Purchase of investments	—		(17,162)
Sale of investments	—		13,070
Acquisitions, net of cash acquired	—		(21,472)


Net cash used for investing activities	(28,246)		(10,794)

Cash flows from financing activities:

Repayment of long-term debt	(1,551)		(1,551)

Repurchases of common stock	—		(49,399)
Dividends paid	(18,110)		(16,247)
Payments related to taxes withheld on stock-based compensation	(12,491)		(11,821)
Payment of finance lease obligations	(3,826)		(3,138)
Proceeds expected to be remitted under the Accounts Receivable Facility	17,190		17,083
Other	(1,361)		980
Net cash used for financing activities	(20,149)		(64,093)






Effect of exchange rate changes on cash and cash equivalents	471		(1,161)

Net increase in cash and cash equivalents	18,878		97,460
Cash and cash equivalents at beginning of period	507,681		288,557
Cash and cash equivalents at end of period	$	526,559	$	386,017

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

CHAMPIONX CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1—BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of the Business

ChampionX Corporation 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. Our expertise, innovative products, and digital technologies provide enhanced oil and gas production, transportation, and real-time emissions monitoring throughout the lifecycle of a well.

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

Merger Agreement

On April 2, 2024, ChampionX entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Schlumberger Limited, a Curaçao corporation (“SLB”), Sodium Holdco, Inc., a Delaware corporation and indirect wholly owned subsidiary of SLB (“Holdco”), and Sodium Merger Sub, Inc., a Delaware corporation and a wholly owned subsidiary of SLB and Holdco (“Merger Sub”), pursuant to which, and subject to the terms and conditions therein, Merger Sub will be merged with and into ChampionX (the “Merger”, together with the other transactions contemplated by the Merger Agreement, the “Transactions”), with ChampionX surviving the Merger as an indirect wholly owned subsidiary of SLB.

Pursuant to the Merger Agreement, at the effective time of the Merger (the “Effective Time”) and by virtue of the Merger, each share of common stock, par value $0.01 per share, of ChampionX issued and outstanding immediately prior to the Effective Time (other than any shares of ChampionX common stock held in the treasury of ChampionX or held by SLB, Holdco or any direct or indirect wholly owned subsidiary of SLB, in each case except for any such shares held on behalf of third parties) will be converted, without any action on the part of the holder thereof, into the right to receive 0.735 shares of common stock, par value $0.01 per share, of SLB (“SLB Common Stock”), which shares will be duly authorized and validly issued in accordance with applicable laws (the “Equity Consideration”) and, if applicable, cash in lieu of fractional shares.

The Merger Agreement contains certain termination rights for each of ChampionX and SLB. Upon termination of the Merger Agreement under specified circumstances, including the termination by either party if certain Mutual Legal Restraints (as defined in the Merger Agreement) exist, specified regulatory approvals have not been obtained or if the consummation of the Merger does not occur on or prior to October 2, 2025 and, subject to certain exceptions, the parties will have satisfied the conditions to the Merger, SLB would be required to pay ChampionX a termination fee of $326.6 million.

During the three months ended March 31, 2025, we recorded third party legal and professional fees of $10.2 million in connection with the pending Merger with SLB. These costs are reflected in selling, general and administrative expense within our condensed consolidated statement of income.

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, 2024.

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, 2025.

Significant Accounting Policies

Please refer to “Note 1–Basis of Presentation and Summary of Significant Accounting Policies” to our consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 for the discussion of our significant accounting policies.

New Accounting Standards Issued

In November 2024, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2024-03, “Disaggregation of Income Statement Expenses (DISE)” which requires a public business entity to disclose the nature of certain expenses within the footnotes of the financial statements, including purchases of inventory, employee compensation, depreciation, intangible asset amortization and the total amount of selling expenses. The guidance is effective for annual periods beginning after December 15, 2026, with early adoption permitted.

In December 2023, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) 2023-09, “Improvements to Income Tax Disclosure” which requires a public business entity to disclose disaggregated information about a reporting entity’s effective tax rate reconciliation, using both percentages and reporting currency amounts for specific standardized categories. Separate disclosures will be required for any reconciling items that are equal to or greater than a specified quantitative threshold. The guidance is effective for annual periods beginning after December 15, 2024, with early adoption permitted.

NOTE 2—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, and end-to-end digital automation solutions, as well as other production equipment and asset monitoring technologies. 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, Windrock, Artificial Lift Performance and RMSpumptools.

•Drilling Technologies—designs, manufactures and markets polycrystalline diamond cutters and bearings for use in oil and gas drill bits under the US Synthetic brand. On February 24, 2025, the Company entered into a definitive agreement to sell all of its equity interests in US Synthetic Corporation (“US Synthetic”) to a controlled affiliate of LongRange Capital, L.P. See Note 3—Assets Held For Sale

•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.

We refer to our Production Chemical Technologies segment and our Reservoir Chemical Technologies segment collectively as our Chemical Technologies business. Although Reservoir Chemical Technologies is not required to be disclosed separately as a reportable segment based on materiality, management believes the additional information contributes to a better understanding of the business. Other 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


Three Months Ended March 31, 2025
(in thousands)	Production Chemical Technologies		Production & Automation Technologies		Drilling Technologies		Reservoir Chemical Technologies		Total Reportable Segments		Corporate and other(1)		Total
Segment revenue	$	523,390	$	264,377	$	50,530	$	26,926	$	865,223	$	(759)	$	864,464
Cost of goods and services	345,139		177,228		31,990		18,572		572,929		9		572,938
Selling, general and administrative expense	96,974		49,876		10,386		3,104		160,340		16,705		177,045
Other segment items	(895)		(281)		(20)		(279)		(1,475)		(1,652)		(3,127)
Segment operating profit	82,172		37,554		8,174		5,529		133,429		(15,821)		117,608
Interest expense, net	—		—		—		—		—		13,196		13,196
Income before income taxes	82,172		37,554		8,174		5,529		133,429		(29,017)		104,412


Three Months Ended March 31, 2024
(in thousands)	Production Chemical Technologies		Production & Automation Technologies		Drilling Technologies		Reservoir Chemical Technologies		Total Reportable Segments		Corporate and other(1)		Total
Segment revenue	$	590,108	$	252,614	$	55,206	$	24,705	$	922,633	$	(492)	$	922,141
Cost of goods and services	403,072		171,057		30,957		17,832		622,918		19		622,937
Selling, general and administrative expense	96,899		53,759		9,717		3,114		163,489		8,925		172,414
Other segment items	2,305		(672)		(29,870)		13		(28,224)		1,323		(26,901)
Segment operating profit	87,832		28,470		44,402		3,746		164,450		(10,759)		153,691
Interest expense, net	—		—		—		—		—		13,935		13,935
Income before income taxes	$	87,832	$	28,470	$	44,402	$	3,746	$	164,450	$	(24,694)	$	139,756

_______________________

(1) Corporate and other includes costs not directly attributable or allocated to our reportable segments such as overhead and other costs pertaining to corporate executive management and other administrative functions, and the results attributable to our noncontrolling interest.

Geographic information


(in thousands)	March 31, 2025		December 31, 2024
Property, plant, and equipment, net:
United States	$	498,314	$	522,850
Singapore	70,376		72,085
Canada	63,982		64,649
Other Countries	97,259		95,838
Total property, plant, and equipment, net	$	729,931	$	755,422

See Note 4—Revenue for information related to revenue by geography and end markets.

Other business segment information


	Segment Assets
(in thousands)	March 31, 2025		December 31, 2024
Chemical Technologies (1)	$	518,698	$	535,033
Production & Automation Technologies	393,258		375,492
Drilling Technologies	61,247		49,998

Total segment assets (2)	973,203		960,523
Other current assets	795,586		603,374
Noncurrent assets	1,731,601		1,906,355
Total assets	$	3,500,390	$	3,470,252

_______________________

(1) Our Chemical Technologies business has an integrated supply chain function that serves the Production Chemical Technologies and Reservoir Chemical Technologies reportable segments. As such, segment assets by each reportable segment has not been provided and is not available, since the Company does not produce or utilize such information.

(2) The significant asset categories that is regularly provided to the chief operating decision maker (“CODM”) includes total accounts receivable and inventory. The amounts align with segment level information provided in the CODM package.


	Capital Expenditures Three Months Ended March 31,
(in thousands)	2025		2024
Chemical Technologies (1)	$	5,539	$	14,734
Production & Automation Technologies	24,099		16,291
Drilling Technologies	1,589		795
Corporate and other	23		92
Total	$	31,250	$	31,912

_______________________

(1) Our Chemical Technologies business has an integrated supply chain function that serves the Production Chemical Technologies and Reservoir Chemical Technologies reportable segments. As such, capital expenditure information by each reportable segment has not been provided and is not available, since the Company does not produce or utilize such information.


	Depreciation & Amortization Three Months Ended March 31,
(in thousands)	2025		2024
Production Chemical Technologies	$	25,235	$	26,266
Production & Automation Technologies	31,951		29,794
Drilling Technologies	1,297		1,555
Reservoir Chemical Technologies	1,096		1,584
Corporate and other	477		381
Total	$	60,056	$	59,580

NOTE 3—ASSETS HELD FOR SALE

US Synthetic Corporation

On February 24, 2025, the Company entered into a definitive agreement to sell all of its equity interests in US Synthetic Corporation (“US Synthetic”) to a controlled affiliate of LongRange Capital, L.P. (the “USS Purchase Agreement,” and the transactions contemplated thereby, the “USS Divestiture”). US Synthetic designs, manufactures and markets polycrystalline diamond cutters and bearings for use in oil and gas drill bits and is the only operating entity in our Drilling Technologies segment.

Pursuant to the purchase agreement, ChampionX will receive cash consideration of approximately $300 million, subject to customary adjustments.

The closing of the USS Purchase Agreement is subject to customary closing conditions, including: (i) the absence of certain legal restraints that enjoin, prohibit, prevent or make illegal the consummation of the USS Divestiture; (ii) the expiration or termination of all waiting periods applicable to the USS Divestiture under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (which expired on February 24, 2025) and any commitment to, or agreement with, any governmental entity to delay the consummation of, or not to consummate before a certain date, the USS Divestiture and the receipt of all clearances, consents and approvals under applicable regulatory laws; (iii) the closing of the Merger with SLB; and (iv) certain other customary conditions relating to the parties’ representations and warranties in the USS Purchase Agreement and the performance of their respective obligations. As of March 31, 2025, we had assets of $226.6 million, (including goodwill of $101.1 million) and liabilities of $61.4 million for this business classified as held for sale. The results of US Synthetic will continue to be reported in continuing operations in our condensed consolidated income statement until the sale of US Synthetic is completed.

We classify long-lived assets, or disposal groups as held for sale in the period in which all the held for sale criteria in accordance with Accounting Standard Codification (“ASC”) 360, Property, Plant and Equipment, are met. The long-lived asset (disposal group) is reported at the lower of its carrying value or fair value less cost to sell.

The following table presents information related to the major classes of assets and liabilities that were held for sale in our condensed consolidated balance sheet:


	US Synthetic Corporation
(in thousands)	March 31, 2025
Receivables, net of allowances of $199	$	38,937
Inventories, net	22,310
Prepaid expenses and other current assets	1,172
Property, plant, and equipment, net of accumulated depreciation of $128,190	18,590
Goodwill	101,136
Intangible assets, net of accumulated amortization of $52,243	3,600
Operating lease right-of-use assets	37,075
Other non-current assets	3,764

Total assets held for sale	$	226,584
Accounts payable	$	19,399
Accrued compensation and employee benefits	3,729
Accrued expenses and other current liabilities	282
Operating lease liabilities	38,005

Total liabilities held for sale	$	61,415

Other

We have certain other assets, primarily property, plant and equipment, that aggregate to $15.2 million held for sale as of March 31, 2025 that are reflected in our condensed consolidated balance sheet.

NOTE 4—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, emissions detection and monitoring, and other field services. Lease revenue is derived from rental income of leased production equipment. As our costs are shared across the various revenue categories, cost of goods sold is not tracked separately and is not discretely identifiable.

In certain geographical areas, the Company utilizes joint ventures and independent third-party distributors and sales agents to sell and market products and services. Amounts payable to independent third-party distributors and sales agents may fluctuate based on sales and timing of distributor fee payments. For services rendered by such independent third-party distributors and sales agents, the Company records the consideration received on a net basis within product revenue in our condensed consolidated statements of income. Additionally, amounts owed to distributors and sales agents are reported within accrued distributor fees within our condensed consolidated balance sheets.

Revenue disaggregated by geography was as follows:


	Three Months Ended March 31, 2025
(in thousands)	Production Chemical Technologies		Production & Automation Technologies		Drilling Technologies		Reservoir Chemical Technologies		Corporate and other		Total
United States	$	248,289	$	193,542	$	40,581	$	15,907	$	—	$	498,319
Latin America	57,540		8,649		—		2,754		—		68,943
Middle East & Africa	73,987		21,314		1,541		5,763		(759)		101,846
Canada	77,282		18,376		3,923		636		—		100,217
Europe	41,105		6,113		2,796		1,311		—		51,325
Asia-Pacific	13,177		2,743		1,663		552		—		18,135
Australia	12,010		13,640		26		3		—		25,679

Total revenue	$	523,390	$	264,377	$	50,530	$	26,926	$	(759)	$	864,464

	Three Months Ended March 31, 2024
(in thousands)	Production Chemical Technologies		Production & Automation Technologies		Drilling Technologies		Reservoir Chemical Technologies		Corporate and other		Total
United States	$	242,484	$	195,667	$	43,620	$	13,845	$	—	$	495,616
Latin America	122,313		4,325		97		3,284		—		130,019
Middle East & Africa	79,367		14,662		2,248		5,563		(492)		101,348
Canada	77,880		18,315		4,323		514		—		101,032
Europe	47,653		4,939		4,387		1,137		—		58,116
Asia-Pacific	15,325		2,339		531		362		—		18,557
Australia	5,086		12,367		—		—		—		17,453

Total revenue	$	590,108	$	252,614	$	55,206	$	24,705	$	(492)	$	922,141

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

The beginning and ending contract asset and contract liability balances from contracts with customers were as follows:


(in thousands)	March 31, 2025		December 31, 2024
Contract assets	$	—	$	—
Contract liabilities - current	$	16,702	$	16,517

NOTE 5—INTANGIBLE ASSETS AND GOODWILL

Intangible Assets

The components of our definite- and indefinite-lived intangible assets were as follows:


	March 31, 2025						December 31, 2024
(in thousands)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Definite-lived intangible assets:
Customer relationships (1)	$	286,899	$	143,974	$	142,925	$	324,893	$	177,831	$	147,062
Unpatented technologies (1)	164,521		93,243		71,278		173,333		96,984		76,349
Software	4,285		864		3,421		—		—		—
Trademarks (1)	31,641		12,905		18,736		31,575		12,335		19,240
Patents(1)	32,720		27,555		5,165		35,722		30,323		5,399
Other	5,182		—		5,182		6,980		1,216		5,764
	525,248		278,541		246,707		572,503		318,689		253,814
Indefinite-lived intangible assets:
Trademarks (1)	—		—		—		3,600		—		3,600
In-process research and development	1,200		—		1,200		1,200		—		1,200
	1,200		—		1,200		4,800		—		4,800
Total	$	526,448	$	278,541	$	247,907	$	577,303	$	318,689	$	258,614

(1) See Note 3—Assets Held For Sale for additional information related to the US Synthetic intangible assets held for sale. The gross carrying amount of US Synthetic intangible assets (including indefinite-lived intangible assets) reclassified to assets held for sale as of March 31, 2025 is $55.8 million with associated accumulated amortization of $52.2 million.

Goodwill

The carrying amount of goodwill, including changes therein, by reportable segment is below:


(in thousands)	Production Chemical Technologies		Production & Automation Technologies		Drilling Technologies		Reservoir Chemical Technologies		Total
December 31, 2024	$	347,560	$	270,248	$	101,136	$	—	$	718,944
Reclassified to assets held for sale (1)	—		—		(101,136)		—		(101,136)


Foreign currency translation	(21)		1,718		—		—		1,697
March 31, 2025	$	347,539	$	271,966	$	—	$	—	$	619,505

______________________

(1) See See Note 3—Assets Held For Sale for additional information related to the US Synthetic Assets Held for Sale.

Goodwill is not subject to amortization but is tested for impairment on an annual basis or more frequently if impairment indicators arise.

NOTE 6—DEBT

Long-term debt consisted of the following:


(in thousands)	March 31, 2025		December 31, 2024
2022 Revolving Credit Facility	$	—	$	—
2022 Term Loan Facility	611,007		612,559
Total	611,007		612,559
Net unamortized discounts and issuance costs	(14,058)		(14,903)
Total long-term debt	596,949		597,656
Current portion of long-term debt (1)	(6,203)		(6,203)
Long-term debt, less current portion	$	590,746	$	591,453

_______________________

(1) Includes the mandatory amortization payments due within twelve months related to the 2022 Term Loan Facility as of March 31, 2025.

On June 7, 2022, we entered into a restated credit agreement (the “Restated Credit Agreement”), which amends and restates the prior credit agreement. The Restated Credit Agreement provides for (i) a $625.0 million seven-year senior secured term loan B facility (the “2022 Term Loan Facility”) and (ii) a five-year senior secured revolving credit facility in an aggregate principal amount of $700.0 million, of which $100.0 million is available for the issuance of letters of credit (the “2022 Revolving Credit Facility,” and, together with the 2022 Term Loan Facility, the “Senior Secured Credit Facility”). Proceeds from future borrowings under the 2022 Revolving Credit Facility are expected to be used for working capital and general corporate purposes. The initial amount drawn under the 2022 Revolving Credit Facility has been repaid. As of March 31, 2025, we had no amounts outstanding under the 2022 Revolving Credit Facility.

The 2022 Term Loan Facility matures June 7, 2029 and the 2022 Revolving Credit Facility matures June 7, 2027. The 2022 Term Loan Facility is subject to mandatory amortization payments of 1% per annum of the initial commitment paid quarterly, which began on December 30, 2022. The Senior Secured Credit Facility 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, 2025.

On September 29, 2023, we amended the Restated Credit Agreement to, among other things, reprice the Company’s $620.3 million of existing term loans under the 2022 Term Loan Facility, in connection with which new term loans in the same amount were issued. The new term loans bear interest at a per annum rate of (i) an adjusted SOFR Rate plus 2.75% per annum or (ii) a base rate plus 1.75%. The new term loans may be prepaid at any time without penalty, subject to the payment of customary breakage costs in the case of the SOFR rate loans. No other material terms of the Senior Secured Credit Facility were changed as part of the September 2023 amendment.

On June 29, 2022, the Company executed a five-year amortizing floating-to-fixed interest rate swap to hedge our exposure to increases in variable interest rates on the 2022 Term Loan Facility. This interest rate swap agreement is based on a $300.0 million notional amount for the first three years, reducing to $150.0 million for years four and five. See Note 11—Fair Value Measurements and Note 12—Derivatives and Hedging Transactions for additional information on interest rate swaps.

NOTE 7—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 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 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.

As of March 31, 2025 and December 31, 2024, we had $76.6 million and $70.3 million, respectively, of outstanding letters of credit, surety bonds and guarantees, which expire at various dates through 2039. 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, surety bonds, and guarantees in the event of default in the performance of our obligations, the probability of which we believe is remote.

Litigation and Environmental Matters

The Company is party to various proceedings and claims incidental to its business, including matters arising under provisions relating to the protection of the environment. 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. While many of these matters involve inherent uncertainty, we believe that the amount of the liability, if any, ultimately incurred with respect to these proceedings and claims will not have a material adverse effect on our condensed consolidated financial position, results of operations or cash flows.

Environmental Matters

The Company is currently participating in environmental assessments and remediation at approximately eight locations, the majority of which are in the United States (“U.S.”). Environmental liabilities have been accrued to reflect our best estimate of future costs. Potential insurance reimbursements are not anticipated in the Company’s accruals for environmental liabilities. As of March 31, 2025 and December 31, 2024, environmental liability accruals related to these locations were $5.7 million and $5.7 million, respectively.

Prior to the commencement of our operations as an independent publicly traded company in 2018, groundwater contamination was discovered at the Norris Sucker Rods plant site located in Tulsa, Oklahoma. Initial remedial efforts were undertaken at the time of discovery of the contamination and we have since coordinated monitoring and remediation with the Oklahoma Department of Environmental Quality (“ODEQ”). ODEQ approved our long-term remediation plan, prepared in connection with an engineering and consulting firm engaged for this purpose and we have accrued liabilities of approximately

$1.2 million for this remediation plan. We are now in discussion with ODEQ to finalize a consent order and we cannot fully anticipate the timing, outcome or possible impact of further remedial activities that may be required in a final order, financial or otherwise. Liabilities could increase in the future until such time as we ultimately reach agreement with ODEQ on our remediation plan in a final consent order and such liabilities become probable and can be reasonably estimated; however, there have been no changes to our estimated liability as of March 31, 2025.

NOTE 8—STOCKHOLDERS' EQUITY

Dividends

Our first quarter cash dividend of $0.095 per share was declared on February 19, 2025 and is payable on April 25, 2025, to shareholders of record on April 4, 2025. As a result, we recorded a dividend payable of $18.7 million on our condensed consolidated balance sheet as of March 31, 2025. Subsequent dividend declarations, if any, including the amounts and timing of future dividends, are subject to approval by our Board of Directors (the “Board”) and will depend on future business conditions, financial conditions, results of operations and other factors.

Repurchases

On March 7, 2022, the Company announced that our Board authorized the Company to repurchase up to $250 million of its common stock which was increased by our Board to $750 million on October 24, 2022. On January 31, 2024, our Board authorized a further increase in the aggregate value of shares that may be repurchased under the share repurchase program to $1.5 billion. This program has no time limit and does not obligate the Company to acquire any particular amount of shares of its common stock. During the three months ended March 31, 2025, we did not repurchase any shares under the share repurchase program.

NOTE 9—EARNINGS PER SHARE

A reconciliation of the number of shares used for the basic and diluted earnings per share calculation was as follows:


	Three Months Ended March 31,
(in thousands, except per share data)	2025		2024
Net income attributable to ChampionX	$	85,797	$	112,923

Weighted-average number of shares outstanding	191,143		190,803
Dilutive effect of stock-based compensation	2,566		3,161
Total shares and dilutive securities	193,709		193,964

Earnings per share attributable to ChampionX:
Basic	$	0.45	$	0.59
Diluted	$	0.44	$	0.58

For all periods presented, the computation of diluted earnings per share excludes awards with an anti-dilutive impact. For the three months ended March 31, 2025 and March 31, 2024, the diluted shares include the dilutive impact of equity awards except for approximately 0.1 million and 0.5 million shares, respectively, that were excluded because their inclusion would be anti-dilutive.

NOTE 10—ACQUISITIONS, DIVESTITURES AND SALE-LEASEBACK

Acquisitions

OTS Consulting Services LLP

On January 5, 2024 we completed an agreement with OTS Consulting Services LLP (“OTS”), a privately held engineering services company based in Pune, India, to acquire the assets and liabilities relating solely to the services performed by OTS for us prior to the acquisition. OTS specializes in digital transformation and advanced IT solutions. The acquired assets and liabilities are included in our Production & Automation Technologies segment. Under the terms of the agreement, we paid $8.7 million, inclusive of working capital adjustments. As part of our purchase price allocation, we recorded goodwill of $6.4 million. The pro forma effect of this acquisition on revenue and net income has been determined to be immaterial to our financial statements.

Artificial Lift Performance Limited

On February 26, 2024, we acquired Artificial Lift Performance Limited (“ALP”), a provider of advanced analytics solutions for enhancing oil and gas production performance based in Edinburgh, Scotland. These assets and liabilities have been included in

our Production & Automation Technologies segment. Under the terms of the agreements, we paid $13.4 million, inclusive of working capital adjustments, with an additional $1.7 million paid on the first anniversary of the closing date, and a maximum earn out potential of $3.0 million over the next year. As part of our purchase price allocation, we recorded definite-lived intangible assets of $10.4 million which consists of assumed software, trademarks and customer relationships and recorded $9.4 million of goodwill, which is inclusive of purchase price accounting adjustments. In addition, we assumed liabilities of $7.6 million, which includes the holdback payment and earn-out consideration. The pro forma effect of this acquisition on revenue and net income has been determined to be immaterial to our financial statements.

RMSpumptools Limited

On July 8, 2024, we completed the acquisition of RMSpumptools Limited, a UK-based company that designs and manufactures highly engineered mechanical and electrical solutions for complex artificial lift applications. The purpose of the acquisition is to create growth opportunities in the artificial lift business internationally and this business is included in our Production & Automation Technologies segment. We paid $106.1 million, and as part of our purchase price allocation, we recorded definite-lived intangible assets of $53.0 million, which consists of customer relationships, unpatented technology and trade names and recorded $45.0 million of goodwill, which is inclusive of purchase price accounting adjustments. In addition, we assumed liabilities of $29.0 million, which includes a $13.8 million deferred tax liability. The pro forma effect of this acquisition on revenue and net income has been determined to be immaterial to our financial statements.

The following table provides the initial allocation of the purchase price as of the acquisition date.


(in thousands)
Cash and cash equivalents	$	4,262
Receivables	14,466
Inventories	15,168
Prepaid expenses and other current assets	484
Property, plant, and equipment	1,335
Identifiable intangible assets	53,000
Operating leases right-of-use asset	1,162
Other noncurrent assets	192
Total identifiable assets acquired	90,069
Accounts payable	6,342



Accrued compensation and employee benefits	3,261
Accrued expenses and other current liabilities	4,296
Deferred income taxes	13,849
Operating lease liabilities	1,267
Total liabilities assumed	29,015
Net identifiable assets acquired	61,054
Goodwill	45,005
Total net assets acquired	$	106,059

The purchase price was allocated to the tangible and intangible assets acquired and liabilities assumed based on their preliminary fair value estimates as of the acquisition date. The measurements of assets acquired and liabilities assumed are based on inputs that are not observable in the market and thus represent Level 3 inputs. The excess of the purchase price over such fair values was recorded as goodwill.

Divestitures

Russia

Due to the deteriorating business conditions in Russia following the Ukraine invasion and the resultant sanctions imposed by the United States, European Union, and United Kingdom, we initiated a plan to dispose of our operations in Russia (the “CT Russia Business”), which is included in our Production Chemical Technologies segment. As a result, the CT Russia Business met the criteria to be classified as held for sale during the second quarter of 2022 and we measured the carrying value of the disposal group to the lower of its carrying value or fair value less costs to sell, resulting in net charges of $16.5 million for the year ended December 31, 2022.

We assess the fair value of the CT Russia Business (less any costs to sell) each reporting period that it remains classified as held for sale and report any subsequent changes as an adjustment to the carrying value of the asset or disposal group, as long as the new carrying value does not exceed the carrying value of the asset at the time it was initially classified as held for sale.

Due to the continued deterioration of the business environment, increasing trade regulations and sanctions and Russia’s imposition of an exit tax on divestments to facilitate exit from in-country operations, we assessed the fair value less cost to sell the business as of March 31, 2023 to be zero, resulting in a $13.0 million pre-tax impairment expense recorded during the three months ended March 31, 2023, which is reflected in loss (gain) on disposal group and sale-leaseback transaction within our consolidated statements of income. There were no charges during the period ended March 31, 2025.

Sale-Leaseback

Orem, Utah

On March 29, 2024, we entered into a sale-leaseback agreement with an unrelated party involving three buildings in Orem, Utah. Under the arrangement, the property (land and buildings) with a net book value of $14.1 million was sold for $45.5 million and leased back under a twenty year lease agreement. We received cash of $44.3 million, net of closing costs and other fees related to the sale of the property. The lease provides for annual base payments of $3.3 million and expires in March 2044 with an option to extend the term of the lease for one additional seven-year period. The transaction qualifies as a sale-leaseback, and as a result, we recorded a $29.8 million net gain on sale for the year ended December 31, 2024. Additionally, we established a $37.7 million right of use asset and $37.7 million operating lease liability.

NOTE 11—FAIR VALUE MEASUREMENTS

Fair value is defined as the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. A hierarchy has been established for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring the most observable inputs be used when available. The hierarchy is broken down into three levels:

Level 1- Inputs are quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities.

Level 2- Inputs include observable inputs other than quoted prices in active markets.

Level 3- Inputs are unobservable inputs for which there is little or no market data available.

The carrying amount and the estimated fair value for assets and liabilities measured on a recurring basis are as follows:


		Carrying Amount
(in thousands)	Measurement Level	March 31, 2025		December 31, 2024
Assets
Foreign currency forward contracts	Level 2	$	6,983	$	10,078
Interest rate swaps	Level 2	2,330		4,199
Total		$	9,313	$	14,277

Liabilities
Foreign currency forward contracts	Level 2	$	4,265	$	13,430
Interest rate swaps	Level 2	—		13
Total		$	4,265	$	13,443

The carrying value of foreign currency forward contracts is at fair value, which is determined based on foreign currency exchange rates as of the balance sheet date and is classified within Level 2. For purposes of fair value disclosure above, derivative values are presented gross. See Note 12—Derivatives and Hedging Transactions for further discussion of gross versus net presentation of the Company’s derivatives.

The fair value of our term loan facility is based on Level 2 quoted market prices for the same or similar debt instruments. The fair value of the revolving line of credit approximates carrying value due to the variable interest rates charged on the borrowings, which reprice frequently (Level 2). The carrying amount and the estimated fair value of long-term debt, including current maturities, held by the Company were:


	March 31, 2025				December 31, 2024
(in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
2022 Revolving Credit Facility	$	—	$	—	$	—	$	—
2022 Term Loan Facility	$	611,007	$	612,535	$	612,559	$	613,324

NOTE 12—DERIVATIVES AND HEDGING TRANSACTIONS

The Company uses foreign currency forward contracts to manage risks associated with foreign currency exchange rates. The Company also utilizes floating-to-fixed interest rate swap agreements as cash flow hedges on certain debt to mitigate interest rate risk. The Company does not hold derivative financial instruments of a speculative nature or for trading purposes. Derivative contracts are recorded as assets and liabilities on the balance sheet at fair value. We evaluated the interest rate swap hedge effectiveness and determined it to be perfectly effective. We evaluate foreign currency forward contracts’ hedge effectiveness at contract inception and thereafter on a quarterly basis. If a derivative is no longer expected to be effective, hedge accounting is discontinued. Changes in fair value are recognized immediately in earnings unless the derivative qualifies and is designated as a hedge. Changes in fair value attributable to changes in spot exchange rates for derivative contracts that have been designated as cash flow hedges are recognized in accumulated other comprehensive income (“AOCI”) and reclassified into earnings in the same period the hedged transaction affects earnings and are presented in the same income statement line as the earnings effect of the hedged item. The Company accounts for the interest rate swap agreements as a cash flow hedge, thus the effective portion of gains and losses resulting from changes in fair value are recognized in AOCI and are amortized to interest expense over the term of the respective debt. Cash flows from derivatives are classified in the statement of cash flows in the same category as the cash flows from the items subject to designated hedge or undesignated (economic) hedge relationships.

The Company is exposed to credit risk in the event of nonperformance of counterparties for foreign currency forward exchange contracts and interest rate swaps. We monitor our exposure to credit risk by using major banks and financial institutions as counterparties and monitoring their financial condition and credit profile. The Company does not anticipate nonperformance by any of these counterparties, and therefore, recording a valuation allowance against the Company’s derivative balance is not considered necessary.

Derivative Positions Summary

Certain of the Company’s derivative transactions are subject to master netting arrangements that allow the Company to settle with the same counterparties. These arrangements generally do not call for collateral and as of the applicable dates presented in

the following table, no cash collateral had been received or pledged related to the underlying derivatives. We have elected to present our derivative balances on a gross basis on the condensed consolidated balance sheet.

The following table summarizes the gross fair value of the Company’s outstanding derivatives and the lines in which they are presented on the condensed consolidated balance sheet.


	Derivative Assets				Derivative Liabilities
(in thousands)	March 31, 2025		December 31, 2024		March 31, 2025		December 31, 2024
Prepaid expenses and other current assets	$	8,672	$	12,455	$	—	$	—
Other non-current assets	641		1,822		—		—
Accrued expenses and other current liabilities	—		—		4,265		13,443
Other long-term liabilities	—		—		—		—
	$	9,313	$	14,277	$	4,265	$	13,443

The following table summarizes the notional values of the Company’s outstanding derivatives:


(in thousands)	March 31, 2025		December 31, 2024
Notional value of foreign currency forward contracts and interest rate swaps	$	1,042,380	$	941,784

Cash Flow Hedges

The Company utilizes foreign currency forward contracts to hedge the effect of foreign currency exchange rate fluctuations on forecasted foreign currency transactions, primarily related to business combinations and inventory purchases. These forward contracts are designated as cash flow hedges. The changes in fair value of these contracts attributable to changes in spot exchange rates are recorded in AOCI until the hedged items affect earnings, at which time the gain or loss is reclassified into the same line item in the condensed consolidated statements of income as the underlying exposure being hedged. The forward points are marked-to-market monthly and recognized in the same line item in the condensed consolidated statements of income as the underlying exposure being hedged.

Under interest rate swaps, we agree with other parties to exchange, at specified intervals, the difference between fixed-rate and floating-rate interest amounts calculated by reference to an agreed notional principal amount. Any unrealized gain or loss at the time of settlement will be reclassified to interest expense, where we record the interest expense on the associated debt.

Derivatives Not Designated as Hedging Instruments

The Company also uses foreign currency forward contracts to offset its exposure to the change in value of certain foreign currency denominated assets and liabilities, primarily receivables and payables, which are remeasured at the end of each period. Although the contracts are effective economic hedges, they are not designated as accounting hedges. Therefore, changes in the value of these derivatives are recognized immediately in earnings, thereby offsetting the current earnings effect of the related foreign currency denominated assets and liabilities.

Effect of Derivative Instruments on Income

The loss (gain) of all derivative instruments recognized is summarized below:


	Three Months Ended March 31,
(in thousands)	2025		2024
Loss (gain) reclassified from AOCI to income on cash flow hedges:
Cost of goods and services	$	(899)	$	(438)
Interest expense	(946)		(1,714)
Loss (gain) on derivatives not designated as hedging instruments:
Other (income) expense, net	(784)		953
Total loss (gain) of derivative instruments	$	(2,629)	$	(1,199)

NOTE 13—INVENTORIES

Inventories consisted of the following:


(in thousands)	March 31, 2025		December 31, 2024
Raw materials	$	117,647	$	131,605
Work in progress	9,912		24,431
Finished goods	443,793		420,282
	571,352		576,318
Inventory reserve	(26,976)		(27,997)
LIFO adjustments (1)	(47,193)		(51,490)
Inventories, net	$	497,183	$	496,831

_______________________

(1) Represents the amount by which the current cost of LIFO inventories exceeded their carrying value.

NOTE 14—ACCOUNTS RECEIVABLE FACILITIES

On June 28, 2022, we entered into an uncommitted accounts receivable purchase agreement (the “JPM Accounts Receivable Facility”) with JPMorgan Chase Bank, N.A. as the purchaser. The amount available for sale under the JPM Accounts Receivable Facility fluctuates over time based on the total amount of eligible receivables generated during the normal course of business. A maximum of $160.0 million in receivables may be sold and remain unpaid under the JPM Accounts Receivable Facility at any time.

On March 28, 2024, we entered into an uncommitted accounts receivable purchase agreement (the “HSBC Accounts Receivable Facility” and, together with the JPM Accounts Receivable Facility, the “Accounts Receivable Facilities”) with HSBC Bank USA, National Association, as the purchaser. The amount available for sale under the HSBC Accounts Receivable Facility fluctuates over time based on the total amount of eligible receivables generated during the normal course of business. A maximum of CAD $40.0 million or approximately $30.0 million in receivables may be sold and remain unpaid under the HSBC Accounts Receivable Facility at any time.

Accounts receivable sold under the JPM Accounts Receivable Facility were $120.4 million for the three months ended March 31, 2025. The accounts receivable sold that remained outstanding under the JPM Accounts Receivable Facility as of March 31, 2025 was $101.5 million. Accounts receivable sold under the HSBC Accounts Receivable Facility were $42.9 million for the three months ended March 31, 2025. The accounts receivable sold that remained outstanding under the HSBC Accounts Receivable Facility as of March 31, 2025 was $26.9 million.

During this period, cash receipts from the purchaser at the time of the sale were classified as operating activities in our condensed consolidated statement of cash flows. The difference between the carrying amount of the accounts receivables sold and the sum of the cash received is recorded as a loss on sale of receivables in other income (expense), net in our condensed consolidated statements of income. The loss on sale of accounts receivable was $1.1 million and $1.9 million for the three months ended March 31, 2025 and 2024, respectively, under the JPM Accounts Receivable Facility. The loss on sale of accounts receivable was $0.3 million for the three months ended March 31, 2025, under the HSBC Accounts Receivable Facility. During the three months ended March 31, 2024, no accounts receivable related to the HSBC Accounts Receivable Facility were sold.

Transfers under the Accounts Receivable Facilities are accounted for as sales of receivables, resulting in the receivables being derecognized from our condensed consolidated balance sheet. The purchaser assumes the credit risk at the time of sale and has the right at any time to assign or transfer (including as a participation interest) any of its rights under the purchased receivables to another bank or financial institution.

NOTE 15—SUPPLY CHAIN FINANCE

We use a supply chain finance program in connection with the purchase of goods, which allows our suppliers to work directly with a third party to provide financing by purchasing their receivables earlier in the payment cycle. We maintain the same contractually agreed upon invoice terms prior to each supplier entering into the program. As of March 31, 2025, we had approximately $38.3 million outstanding under the program, which is included in accounts payable on our condensed consolidated balance sheet.

NOTE 16—CASH FLOW INFORMATION

Leased Asset Program

Our electrical submersible pumping leased asset program is reported in our Production & Automation Technologies segment. At the time of purchase, assets are recorded to inventory and are transferred to property, plant, and equipment when a customer contracts for an asset under our leased asset program. During the three months ended March 31, 2025 and 2024, we transferred $28.9 million and $29.5 million, respectively, of inventory into property, plant, and equipment as a result of assets entering our leased asset program.

Expenditures for assets that are placed into our leased asset program expected to be recovered through sale are reported in leased assets in the operating section of our condensed consolidated statements of cash flows. All other capitalizable expenditures for assets that are placed into our leased asset program are classified as capital expenditures in the investing section of our condensed consolidated statements of cash flows.

Argentina Blue Chip Swap

The Central Bank of Argentina maintained currency controls that limited our ability to access U.S. dollars in Argentina and remit cash from our Argentine operations. The execution of certain trades known as Blue Chip Swaps, effectively resulted in the use of a parallel U.S. dollar exchange rate to convert available Argentine pesos to U.S. dollars. This parallel rate, which cannot be used as the basis to remeasure our net monetary assets in U.S. dollars under GAAP, was 31% higher than Argentina's official exchange when the swaps occurred. The Blue Chip Swap transactions resulted in $4.1 million pre-tax loss on investment during the three months ended March 31, 2024. These losses are reflected in other expense (income), net, within our condensed consolidated statements of income. We did not enter into any Blue Chip Swaps during the first quarter of 2025.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This section provides our analysis of our financial performance, financial condition and significant trends that may affect our future performance. It should be read in conjunction with the condensed consolidated financial statements, and notes thereto, included elsewhere in this report. It contains forward-looking statements including, without limitation, statements relating to ChampionX’s plans, strategies, objectives, expectations and intentions that are made pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. 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. 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. Readers are cautioned that such forward-looking statements should be read in conjunction with the disclosures under the heading “CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS.”

EXECUTIVE OVERVIEW AND BUSINESS OUTLOOK

We are 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. Our expertise, innovative products, and digital technologies provide enhanced oil and gas production, transportation, and real-time emissions monitoring throughout the lifecycle of a well. Our business is organized into four reportable segments: Production Chemical Technologies, Production & Automation Technologies, Drilling Technologies, and Reservoir Chemical Technologies and we refer to the Production Chemical Technologies segment and Reservoir Chemical Technologies segment together as the Chemical Technologies business.

Business Environment

We monitor macro-economic conditions and industry-specific drivers and key risk factors affecting our business segments as we formulate our strategic plans and make decisions related to allocating capital and human resources. Our business segments provide a broad range of technologies and products to support oil and gas production, exploration and development, and the midstream sector. As a result, we are substantially dependent upon global oil production levels, as well as new investment activity levels in the oil and gas and midstream sectors. Demand for our products, technologies and services is impacted by overall global demand for oil and gas, ongoing depletion rates of existing oil and gas wells, and our customers’ willingness to invest in the exploration for and development of new oil and gas resources. Our customers determine their operating and capital budgets based on current and expected future crude oil and natural gas prices, U.S. and worldwide rig count, U.S. well completions, as well as expected industry cost levels, among other factors. Crude oil and natural gas prices are impacted by supply and demand, which are influenced by macroeconomic, geopolitical, and other events, and have historically been subject to substantial volatility and cyclicality. Rig count, footage drilled and completed, and exploration and production investment by oil and gas operators have often been used as leading indicators for the level of drilling and development activity and future production levels in the oil and gas sector.

Market Conditions and Outlook

Historically, oil prices have been cyclical and volatile, driven by fundamental supply and demand considerations as well as other factors including global and regional geopolitical developments. Oil prices decreased slightly from approximately $70 per barrel as of December 31, 2024 to $68 per barrel as of March 31, 2025 and have since then declined further. The voluntary production cuts of the Organization of the Petroleum Exporting Countries and other major international producers (collectively, “OPEC+”) extends through April 2025 and will be followed by announced production increases beginning May 2025. OPEC+ has stated that they do not expect the increased production to have a substantial effect on global oil supply. However, as a result, oil prices are likely to remain under pressure for the remainder of 2025. Longer term, we continue to expect oil prices to remain cyclical, driven by both supply and demand as well as geopolitical factors, including recently announced tariffs and other trade measures.

We continue to monitor the effects of the recent tariffs imposed by the U.S. administration during the second quarter of 2025, the reciprocal tariffs and retaliatory tariffs imposed by other countries, and the impact on our global supply chain. Tariffs increase our material input costs, and further trade restrictions, retaliatory trade measures or additional tariffs implemented could result in higher input costs for our products. We target to increase customer selling prices to offset cost increases and inflation. We also attempt to control such costs and volatility through commercial contract discipline, supply chain adjustments

and productivity programs. Tariffs and other retaliatory trade measures imposed by the U.S. and other nations have not yet had a significant impact on our business or results of operations.

Inflation rates continued to moderate during the first quarter of 2025. Nonetheless, we continue to actively monitor market trends specifically related to the sourcing of raw materials and other cost components. Inflation trends are likely to be impacted by tariffs and other trade measures imposed by the U.S. and other nations. We will continue to work diligently to ensure selling prices offset the impact of any raw material, labor, and tariff and logistics-related inflation on our businesses. Our productivity and continuous improvement initiatives are focused on delivering expanding profit margins in all our businesses.

Merger Agreement

On April 2, 2024, ChampionX entered into the Merger Agreement with SLB, Holdco, and Merger Sub, pursuant to which, and subject to the terms and conditions therein, Merger Sub will be merged with and into ChampionX (the “Merger,” together with the other transactions contemplated by the Merger Agreement, the “Transactions”), with ChampionX surviving the Merger as an indirect wholly owned subsidiary of SLB.

Pursuant to the Merger Agreement, at the Effective Time and by virtue of the Merger, each share of ChampionX common stock issued and outstanding immediately prior to the Effective Time (other than any shares of ChampionX common stock held in the treasury of ChampionX or held by SLB, Holdco or any direct or indirect wholly owned subsidiary of SLB, in each case except for any such shares held on behalf of third parties) will be converted, without any action on the part of the holder thereof, into the right to receive 0.735 shares of (“SLB Common Stock”), which shares will be duly authorized and validly issued in accordance with applicable laws and, if applicable, cash in lieu of fractional shares.

The parties’ obligations to consummate the Merger are subject to satisfaction or waiver of customary closing conditions set forth in the Merger Agreement, including, among others: (a) adoption by ChampionX stockholders of the Merger Agreement; (b) the receipt of approval for listing of the shares of SLB Common Stock which will comprise Equity Consideration on the New York Stock Exchange, subject to official notice of issuance; (c) the absence of certain legal restraints that enjoin, prohibit, prevent or make illegal the consummation of the Transactions; (d) the expiration or termination of all waiting periods applicable to the Transactions under (the “HSR Act”), and any commitment to, or agreement with, any governmental entity to delay the consummation of, or not to consummate before a certain date, the Transactions and the receipt of all clearances, consents and approvals under certain specified regulatory laws; (e) the effectiveness of the registration statement on Form S-4 to be filed by SLB in connection with the issuance of the Equity Consideration, which will include a proxy statement of ChampionX (the “Form S-4”); (f) with respect to closing conditions for the benefit of SLB, (i) the absence of certain specified legal restraints that enjoin, prohibit, prevent or make illegal the consummation of the Transactions, (ii) the absence of investigations of the Transaction under specified regulatory laws, (iii) the expiration of all waiting periods applicable under specified regulatory filings following SLB’s determination to submit such filings (“Specified Regulatory Filings”), (iv) receipt of all clearances, consents and approvals under the Specified Regulatory Filings and (v) the absence of certain other regulatory laws prohibiting or making illegal the consummation of the Transactions or otherwise as set forth in the Merger Agreement and (g) certain other customary conditions relating to the parties’ representations and warranties in the Merger Agreement and the performance of their respective obligations. On May 15, 2024, the Form S-4 and proxy statement/prospectus that was filed with the Securities and Exchange Commission (the “SEC”) in connection with the Transactions was declared effective by the SEC. On June 18, 2024, ChampionX’s stockholders adopted the Merger Agreement at a special meeting of the stockholders. SLB and ChampionX are continuing to pursue clearances, consents and approvals under certain specified regulatory laws.

Additional information about the Merger is set forth in our Current Report on Form 8-K/A filed with the SEC on April 3, 2024 and the Definitive Proxy on Schedule 14A filed with the SEC on May 15, 2024.

CRITICAL ACCOUNTING ESTIMATES

Refer to our “Critical Accounting Estimates” included in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024 for a discussion of our critical accounting estimates.

CONSOLIDATED RESULTS OF OPERATIONS


	Three Months Ended
	March 31,		December 31,		Variance
(in thousands)	2025		2024		$
Revenue	$	864,464	$	912,037	$	(47,573)
Cost of goods and services	572,938		600,154		(27,216)
Gross profit	291,526		311,883		(20,357)
Selling, general and administrative expense	177,045		184,722		(7,677)


Interest expense, net	13,196		12,375		821
Foreign currency transaction losses (gains), net	1,504		1,697		(193)
Other (income) expense, net	(4,631)		(5,026)		395
Income before income taxes	104,412		118,115		(13,703)
Provision for income taxes	15,384		33,204		(17,820)
Net income	89,028		84,911		4,117
Net income attributable to noncontrolling interest	3,231		2,145		1,086
Net income attributable to ChampionX	$	85,797	$	82,766	$	3,031

Revenue. Revenue decreased $47.6 million, or 5%, sequentially primarily due to a slowdown in market activity.

Gross profit. Gross profit decreased $20.4 million, or 7%, sequentially mainly due to decreased volumes.

Selling, general and administrative expense. Selling, general and administrative expense decreased $7.7 million, or 4%, sequentially, primarily due to a reduction in third party legal and professional fees incurred related to the Merger transaction with SLB.

Foreign currency transaction losses (gains), net. Foreign currency transaction losses, net was relatively flat, sequentially.

Other (income) expense, net. Other income, net was relatively flat, sequentially.

Provision for income taxes. Our provision for income taxes reflected effective tax rates (“ETR”) of 14.7% and 28.1% for the three months ended March 31, 2025 and December 31, 2024, respectively. The decrease to the ETR for the quarter ended March 31, 2025 was primarily due to discrete tax benefits related to stock compensation and changes in uncertain tax positions.

SEGMENT RESULTS OF OPERATIONS


	Three Months Ended
	March 31,		December 31,		Variance
(in thousands)	2025		2024		$
Segment revenue:
Production Chemical Technologies	$	523,390	$	569,662	$	(46,272)
Production & Automation Technologies	264,377		269,568		(5,191)
Drilling Technologies	50,530		51,942		(1,412)
Reservoir Chemical Technologies	26,926		21,937		4,989
Corporate and other	(759)		(1,072)		313
Total revenue	$	864,464	$	912,037	$	(47,573)

Segment operating profit (loss):
Production Chemical Technologies	$	82,172	$	103,567	$	(21,395)
Production & Automation Technologies	37,554		39,027		(1,473)
Drilling Technologies	8,174		10,703		(2,529)
Reservoir Chemical Technologies	5,529		2,294		3,235
Total segment operating profit	133,429		155,591		(22,162)
Corporate expense and other(1)	15,821		25,101		(9,280)
Interest expense, net	13,196		12,375		821
Income before income taxes	$	104,412	$	118,115	$	(13,703)

Production Chemical Technologies

Revenue. Production Chemical Technologies revenue decreased $46.3 million, or 8%, in the first quarter of 2025 compared to the prior quarter, mainly due to lower international sales volumes.

Operating profit. Production Chemical Technologies operating profit decreased $21.4 million, or 21%, in the first quarter of 2025 compared to the prior quarter mainly due to seasonally lower international sales volumes.

Production & Automation Technologies

Revenue. Production & Automation Technologies revenue decreased $5.2 million, or 2%, in the first quarter of 2025 compared to the prior quarter primarily due to seasonally lower international sales volumes.

Operating profit. Production & Automation Technologies operating profit is flat compared to the prior quarter.

Drilling Technologies

Revenue. Drilling Technologies revenue decreased $1.4 million, or 3%, in the first quarter of 2025 compared to the prior quarter primarily due to lower sales volumes in the inserts product line.

Operating profit. Drilling Technologies first quarter operating profit decreased $2.5 million or 24% in the first quarter of 2025 compared to the prior quarter primarily due to lower sales volume, as mentioned above, one-time bonuses and some increased production costs.

Reservoir Chemical Technologies

Revenue. Reservoir Chemical Technologies revenue increased $5.0 million, or 23%, in the first quarter of 2025 compared to the prior quarter primarily due to higher sales volumes in the U.S. and internationally.

Operating profit. Reservoir Chemical Technologies operating profit increased $3.2 million or 141% in the first quarter of 2025 compared to the prior quarter primarily due to higher sales volume, as mentioned above, and favorable product and regional mix.

CAPITAL RESOURCES AND LIQUIDITY

Overview

Our primary source of cash is from operating activities. We have historically generated, and expect to continue to generate, positive cash flow from operations. Cash generated from operations is generally allocated to working capital requirements, investments to support profitable revenue growth and maintain our facilities and systems, acquisitions that create value through add-on capabilities that broaden our existing businesses and support our growth strategy, as well as share repurchases, dividend payments to stockholders, and debt repayments to reduce our leverage.

At March 31, 2025, we had cash and cash equivalents of $526.6 million compared to $507.7 million at December 31, 2024, primarily for working capital and operational purposes. At March 31, 2025, we had total liquidity of $1.2 billion, comprised of $526.6 million of cash and cash equivalents and $673.6 million of available capacity under the 2022 Revolving Credit Facility (as defined below).

The Company maintains a restated credit agreement (the “Restated Credit Agreement”) that provides for (i) a $625.0 million seven-year senior secured term loan B facility (the “2022 Term Loan Facility”) and (ii) a five-year senior secured revolving credit facility in an aggregate principal amount of $700.0 million, of which $100.0 million is available for the issuance of letters of credit (the “2022 Revolving Credit Facility” together with the 2022 Term Loan Facility, the “Senior Secured Credit Facility”). On September 29, 2023, we amended the Restated Credit Agreement to, among other things, reprice the Company’s $620.3 million of existing term loans under the 2022 Term Loan Facility, in connection with which new term loans in the same amount were issued. The new term loans bear interest at a per annum rate of (i) an adjusted SOFR Rate plus 2.75% per annum or (ii) a base rate plus 1.75%. The new term loans may be prepaid at any time without penalty, subject to the payment of customary breakage costs in the case of the SOFR rate loans. No other material terms of the Senior Secured Credit Facility were changed as part of the September 2023 amendment.

At March 31, 2025, we had a long-term debt balance of $590.7 million, net of the current portion of long-term debt of $6.2 million, consisting of the 2022 Term Loan Facility with a principal amount of $611.0 million and no amounts outstanding on the 2022 Revolving Credit Facility.

Outlook

We expect to generate cash from operations to support our business requirements and, if necessary, through the use of the 2022 Revolving Credit Facility. Volatility in credit, equity and commodity markets can create uncertainty for our businesses. However, the Company believes, based on our current financial condition and current expectations of future market conditions, that we will meet our short- and long-term needs with a combination of cash on hand, cash generated from operations, the 2022 Revolving Credit Facility and access to capital markets.

On January 31, 2024, our Board of Directors (“Board”) approved an increase of our regular quarterly cash dividend to $0.095 per share of the Company’s common stock. Our first quarter cash dividend of $0.095 per share was declared on February 19, 2025 and is payable on April 25, 2025, to shareholders of record on April 4, 2025. As a result, we recorded a dividend payable of $18.7 million on our condensed consolidated balance sheet as of March 31, 2025. Subsequent dividend declarations, if any, including the amounts and timing of future dividends, are subject to approval by the Board and will depend on future business conditions, financial conditions, results of operations and other factors.

On March 7, 2022, the Company announced that our Board approved a $250 million share repurchase program (“Share

Repurchase Program”) which was increased to $750 million by the Board on October 24, 2022. On January 31, 2024, our Board authorized a further increase in the aggregate value of shares that may be repurchased under the Share Repurchase Program to $1.5 billion. Under the Share Repurchase Program, shares of the Company’s common stock may be repurchased periodically, including in the open market or privately negotiated transactions. We expect to fund share repurchases from cash generated from operations. During the three months ended March 31, 2025, we did not repurchase any shares under the Share Repurchase Program. The actual timing, manner, number, and value of shares repurchased under the program will depend on a number of factors, including the availability of excess free cash, the market price of the Company’s common stock, general market and economic conditions, applicable requirements, and other business considerations.

Over the next year, we expect to fund our capital expenditures and reduce outstanding debt through earnings and working capital improvements. We project capital spending for 2025 to be approximately 4.0% of revenue inclusive of capital investments for our electric submersible pump leased assets.

Information related to guarantees is incorporated herein by reference from Note 7—Commitments and Contingencies to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Cash Flows


	Three Months Ended March 31,
(in thousands)	2025		2024
Cash from operating activities	$	66,802	$	173,508
Cash used in investing activities	(28,246)		(10,794)
Cash used in financing activities	(20,149)		(64,093)
Effect of exchange rate changes on cash and cash equivalents and restricted cash	471		(1,161)
Net increase (decrease) in cash and cash equivalents and restricted cash	$	18,878	$	97,460

Operating Activities

Cash provided by operating activities during the three months ended March 31, 2025 was $66.8 million as compared to $173.5 million for the three months ended March 31, 2024. The change was primarily driven by the decrease in net income of $24.1 million, and increased use of cash for working capital items. Changes in working capital items used cash of $83.9 million during the three months ended March 31, 2025 compared to cash generated of $26.6 million during the three months ended March 31, 2024. The change in working capital items primarily related to a decrease in accounts payable as compared to the prior year period and a $47.6 million tax payment that was deferred and paid in the first quarter of 2025.

Investing Activities

Cash used in investing activities was $28.2 million for the three months ended March 31, 2025, and was primarily comprised of capital expenditures of $31.3 million, partially offset by $3.0 million from the sale of fixed assets.

Cash used in investing activities was $10.8 million for the three months ended March 31, 2024, and was primarily comprised of capital expenditures of $31.9 million and acquisitions net of cash acquired of $21.5 million, partially offset by $46.7 million of cash proceeds from the sale of fixed assets.

Financing Activities

Cash used in financing activities of $20.1 million for the three months ended March 31, 2025 was primarily the result of dividends paid of $18.1 million, payments related to taxes withheld on stock-based compensation of $12.5 million, payment of finance lease obligations of $3.8 million and net repayments totaling $1.6 million on long-term debt. This was partially offset by $17.2 million of proceeds expected to be remitted under the Accounts Receivable Facility (as defined below).

Cash used in financing activities of $64.1 million for the three months ended March 31, 2024 was primarily the result of repurchases of our common stock of $49.4 million, dividends paid of $16.2 million, net repayments totaling $1.6 million on long-term debt and payments related to taxes withheld on stock-based compensation of $11.8 million. This was partially offset by $17.1 million of proceeds expected to be remitted under the Accounts Receivable Facility.

Revolving Credit Facility

A summary of the 2022 Revolving Credit Facility at March 31, 2025 was as follows:


(in millions) Description	Amount		Debt Outstanding		Letters of Credit		Unused Capacity		Maturity
Five-year revolving credit facility	$	700.0	$	—	$	26.4	$	673.6	June 2027

Additionally, we have letters of credit outside of the 2022 Revolving Credit Facility totaling approximately $1.3 million. As of March 31, 2025, we were in compliance with all restrictive covenants under the 2022 Revolving Credit Facility.

Accounts Receivable Facilities

Accounts receivable sold under the JPM Accounts Receivable were $120.4 million for the three months ended March 31, 2025. The accounts receivables sold that remained outstanding under the JPM Accounts Receivable Facility as of March 31, 2025 was $101.5 million. During this period, cash receipts from the purchaser at the time of the sale were classified as operating activities in our condensed consolidated statement of cash flows. The difference between the carrying amount of the accounts receivables sold and the sum of the cash received is recorded as a loss on sale of receivables in other income (expense), net in our condensed consolidated statements of income. The loss on sale of accounts receivable was $1.1 million and $1.9 million for the three months ended March 31, 2025 and 2024, respectively.

Accounts receivable sold under the HSBC Accounts Receivable Facility were $42.9 million for the three months ended March 31, 2025. The accounts receivables sold that remained outstanding under the HSBC Accounts Receivable Facility as of March 31, 2025 was $26.9 million. The loss on sale of accounts receivable was $0.3 million for the three months ended March 31, 2025 under the HSBC Accounts Receivable Facility. As of March 31, 2024, no accounts receivable related to the HSBC agreement were sold.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We may be exposed to certain market risks arising from the use of financial instruments in the ordinary course of business. For quantitative and qualitative disclosures about market risk, see Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” in our Annual Report on Form 10-K for the year ended December 31, 2024. Our exposure to market risk has not materially changed since December 31, 2024.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer and principal financial officer, carried out an evaluation, pursuant to Rule 13a-15(b) of the Exchange Act, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of March 31, 2025.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are involved in various pending or potential legal actions in the ordinary course of our business. Management is unable to predict the ultimate outcome of these actions because of the inherent uncertainty of litigation. However, management believes the most probable, ultimate resolution of these matters will not have a material adverse effect on our condensed consolidated financial position, results of operations or cash flows. See Note 7—Commitments and Contingencies to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

ITEM 1A. RISK FACTORS

There have not been material changes from the risk factors previously disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

We did not repurchase any equity securities registered under Section 12 of the Exchange Act during the first quarter of 2025.

On March 7, 2022, the Company announced that our Board authorized the Company to repurchase up to $250 million of its common stock. On October 24, 2022, our Board increased the authorization under this program to $750 million. On January 31, 2024, our Board authorized an increase in the aggregate value of shares that may be repurchased under the Share Repurchase Program to $1.5 billion. This program has no time limit and does not obligate the Company to acquire any particular amount of shares of its common stock. As of March 31, 2025, the approximate dollar value of shares that may yet be purchased under the Share Repurchase Program is $996.7 million.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Insider Trading Arrangements and Policies

During the three months ended March 31, 2025, none of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) informed us of the adoption or termination of a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

ITEM 6. EXHIBITS

Incorporated by Reference

Exhibit
No.

Exhibit Description

Form

Exhibit No.

Filing Date

2.1

Agreement and Plan of Merger, dated as of April 2, 2024, by and among ChampionX Corporation, Sodium Holdco, Inc., Schlumberger Limited and Sodium Merger Sub, Inc.

8-K/A

2.1

April 3, 2024

2.2†

Equity Purchase Agreement, dated February 24, 2025, by and among ChampionX Corporation, USS HardTech, LLC and, solely for purposes set forth therein, Schlumberger Limited and Sodium Merger Sub, Inc.

8-K

2.1

February 25, 2025

3.1

Second Amended and Restated Certificate of Incorporation of the Company

8-K

3.1

May 11, 2023

3.2

Amended and Restated By-Laws of the Company

8-K

3.2

May 11, 2023

10.1††

ChampionX Corporation Amended and Restated Senior Executive Change-in-Control Severance Plan

8-K

10.1

February 21, 2024

10.2*†

Sixth Amendment to Master Receivables Purchase Agreement, dated as of March 6, 2025 among ChampionX LLC and US Synthetic Corporation as Sellers, ChampionX Corporation, and JPMorgan Chase Bank, N.A., as Purchaser

31.1*

Certification of Chief Executive Officer Pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended

31.2*

Certification of Chief Financial Officer Pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended

32.1**

Certification of Chief Executive Officer Under Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. 1350

32.2**

Certification of Chief Financial Officer Under Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. 1350

101.INS*

XBRL Instance Document

101.SCH*

XBRL Taxonomy Extension Schema Document

101.CAL*

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*

XBRL Taxonomy Extension Label Linkbase Document

101.PRE*

XBRL Taxonomy Extension Presentation Linkbase Document

104*

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Filed herewith

** Furnished herewith

† Schedules (or similar attachments) have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The registrant hereby undertakes to furnish supplemental copies of any of the omitted schedules (or similar attachments) upon request by the Securities and Exchange Commission.

†† Denotes management contract or compensatory plan or arrangement

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


CHAMPIONX CORPORATION
(Registrant)

/s/ ANTOINE MARCOS
Antoine Marcos
Vice President, Corporate Controller and Chief Accounting Officer
(Principal Accounting Officer and a Duly Authorized Officer)

Date:			April 30, 2025