10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2022

OR

 Transition Report Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

For the transition period from   ______  to  ______

Commission file number: 001-38071

NCS Multistage Holdings, Inc.

(Exact name of registrant as specified in its charter)

Delaware	46-1527455
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification number)
19350 State Highway 249, Suite 600
Houston, Texas	77070
(Address of principal executive offices)	(Zip Code)

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

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

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

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

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

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

Large accelerated filer		Accelerated filer	
Non-accelerated filer		Smaller reporting company	
		Emerging growth company	

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

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

As of October 28, 2022, there were 2,408,474 shares of common stock outstanding.

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations	4
	Condensed Consolidated Statements of Comprehensive Income (Loss)	5
	Condensed Consolidated Statements of Stockholders’ Equity	6
	Condensed Consolidated Statements of Cash Flows	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30
Item 4.	Controls and Procedures	30
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	31
Item 1A.	Risk Factors	31
Item 6.	Exhibits	33
Signatures		34

2

PART I. FINANCIAL INFORMATION

ITEM 1.  Financial Statements

NCS MULTISTAGE HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)

	September 30,		December 31,
	2022		2021
Assets
Current assets
Cash and cash equivalents	$	9,877	$	22,168
Accounts receivable—trade, net		34,393		24,392
Inventories, net		34,115		33,917
Prepaid expenses and other current assets		2,749		3,290
Other current receivables		4,304		4,726
Total current assets		85,438		88,493
Noncurrent assets
Property and equipment, net		23,363		24,708
Goodwill		15,222		15,222
Identifiable intangibles, net		5,243		5,744
Operating lease assets		4,617		4,809
Deposits and other assets		2,833		3,113
Deferred income taxes, net		432		236
Total noncurrent assets		51,710		53,832
Total assets	$	137,148	$	142,325
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable—trade	$	8,641	$	7,502
Accrued expenses		5,965		6,323
Income taxes payable		369		294
Operating lease liabilities		1,295		1,556
Current maturities of long-term debt		1,438		1,483
Other current liabilities		2,355		2,660
Total current liabilities		20,063		19,818
Noncurrent liabilities
Long-term debt, less current maturities		6,391		6,335
Operating lease liabilities, long-term		3,780		3,779
Other long-term liabilities		1,193		1,612
Deferred income taxes, net		297		114
Total noncurrent liabilities		11,661		11,840
Total liabilities		31,724		31,658
Commitments and contingencies (Note 9)
Stockholders’ equity
Preferred stock, $0.01 par value, 10,000,000 shares authorized, no shares issued and outstanding at
September 30, 2022 and December 31, 2021		—		—
Common stock, $0.01 par value, 11,250,000 shares authorized, 2,434,722 shares issued
and 2,408,413 shares outstanding at September 30, 2022 and 2,397,766 shares issued
and 2,380,374 shares outstanding at December 31, 2021		24		24
Additional paid-in capital		439,522		437,022
Accumulated other comprehensive loss		(86,212)		(82,094)
Retained deficit		(264,443)		(261,362)
Treasury stock, at cost, 26,309 shares at September 30, 2022 and 17,392 shares
at December 31, 2021		(1,388)		(1,006)
Total stockholders’ equity		87,503		92,584
Non-controlling interest		17,921		18,083
Total equity		105,424		110,667
Total liabilities and stockholders' equity	$	137,148	$	142,325

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

3

NCS MULTISTAGE HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Revenues
Product sales	$	33,965	$	21,229	$	79,549	$	57,167
Services		14,905		11,182		35,897		25,219
Total revenues		48,870		32,411		115,446		82,386
Cost of sales
Cost of product sales, exclusive of depreciation ‎    and amortization expense shown below		20,754		12,898		51,910		37,487
Cost of services, exclusive of depreciation ‎    and amortization expense shown below		7,640		4,738		19,210		12,354
Total cost of sales, exclusive of depreciation ‎    and amortization expense shown below		28,394		17,636		71,120		49,841
Selling, general and administrative expenses		15,379		10,982		45,148		35,589
Depreciation		882		985		2,742		2,857
Amortization		168		168		502		502
Income (loss) from operations		4,047		2,640		(4,066)		(6,403)
Other income (expense)
Interest expense, net		(204)		(163)		(794)		(529)
Other income, net		564		176		1,556		1,046
Foreign currency exchange (loss) gain		(563)		(236)		(562)		156
Total other (expense) income		(203)		(223)		200		673
Income (loss) before income tax		3,844		2,417		(3,866)		(5,730)
Income tax (benefit) expense		(120)		(809)		(623)		45
Net income (loss)		3,964		3,226		(3,243)		(5,775)
Net income (loss) attributable to non-controlling interest		29		430		(162)		621
Net income (loss) attributable to ‎    NCS Multistage Holdings, Inc.	$	3,935	$	2,796	$	(3,081)	$	(6,396)
Earnings (loss) per common share
Basic earnings (loss) per common share attributable to ‎    NCS Multistage Holdings, Inc.	$	1.61	$	1.16	$	(1.27)	$	(2.67)
Diluted earnings (loss) per common share attributable to ‎    NCS Multistage Holdings, Inc.	$	1.58	$	1.14	$	(1.27)	$	(2.67)
Weighted average common shares outstanding
Basic		2,438		2,401		2,430		2,394
Diluted		2,488		2,445		2,430		2,394

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

4

NCS MULTISTAGE HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

(Unaudited)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Net income (loss)	$	3,964	$	3,226	$	(3,243)	$	(5,775)
Foreign currency translation adjustments, net of tax of $0		(3,359)		(1,007)		(4,118)		(184)
Comprehensive income (loss)		605		2,219		(7,361)		(5,959)
Less: Comprehensive income (loss) attributable to non-controlling interest		29		430		(162)		621
Comprehensive income (loss) attributable to NCS Multistage Holdings, Inc.	$	576	$	1,789	$	(7,199)	$	(6,580)

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

5

NCS MULTISTAGE HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except share data)

(Unaudited)

	Three and Nine Months Ended September 30, 2022
	Preferred Stock			Common Stock			Additional ‎Paid-In		Accumulated ‎Other ‎Comprehensive		Retained		Treasury Stock			Non-controlling		Total Stockholders'
	Shares	Amount		Shares	Amount		Capital		Loss		Deficit		Shares	Amount		Interest		Equity
Balances as of December 31, 2021	—	$	—	2,397,766	$	24	$	437,022	$	(82,094)	$	(261,362)	(17,392)	$	(1,006)	$	18,083	$	110,667
Share-based compensation	—		—	—		—		805		—		—	—		—		—		805
Net loss	—		—	—		—		—		—		(1,535)	—		—		(194)		(1,729)
Vesting of restricted stock	—		—	34,066		—		—		—		—	—		—		—		—
Shares withheld	—		—	—		—		—		—		—	(8,694)		(372)		—		(372)
Currency translation adjustment	—		—	—		—		—		541		—	—		—		—		541
Balances as of March 31, 2022	—	$	—	2,431,832	$	24	$	437,827	$	(81,553)	$	(262,897)	(26,086)	$	(1,378)	$	17,889	$	109,912
Share-based compensation	—		—	—		—		841		—		—	—		—		—		841
Net (loss) income	—		—	—		—		—		—		(5,481)	—		—		3		(5,478)
Vesting of restricted stock	—		—	2,723		—		—		—		—	—		—		—		—
Shares withheld	—		—	—		—		—		—		—	(173)		(8)		—		(8)
Currency translation adjustment	—		—	—		—		—		(1,300)		—	—		—		—		(1,300)
Balances as of June 30, 2022	—	$	—	2,434,555	$	24	$	438,668	$	(82,853)	$	(268,378)	(26,259)	$	(1,386)	$	17,892	$	103,967
Share-based compensation	—		—	—		—		854		—		—	—		—		—		854
Net income	—		—	—		—		—		—		3,935	—		—		29		3,964
Vesting of restricted stock	—		—	167		—		—		—		—	—		—		—		—
Shares withheld	—		—	—		—		—		—		—	(50)		(2)		—		(2)
Currency translation adjustment	—		—	—		—		—		(3,359)		—	—		—		—		(3,359)
Balances as of September 30, 2022	—	$	—	2,434,722	$	24	$	439,522	$	(86,212)	$	(264,443)	(26,309)	$	(1,388)	$	17,921	$	105,424

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

6

NCS MULTISTAGE HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except share data)

(Unaudited)

	Three and Nine Months Ended September 30, 2021
	Preferred Stock			Common Stock			Additional ‎Paid-In		Accumulated ‎Other ‎Comprehensive		Retained		Treasury Stock			Non-controlling		Total Stockholders'
	Shares	Amount		Shares	Amount		Capital		Loss		Deficit		Shares	Amount		Interest		Equity
Balances as of December 31, 2020	—	$	—	2,371,992	$	24	$	432,801	$	(81,780)	$	(256,628)	(12,074)	$	(809)	$	19,878	$	113,486
Share-based compensation	—		—	—		—		1,170		—		—	—		—		—		1,170
Net loss	—		—	—		—		—		—		(3,397)	—		—		(60)		(3,457)
Distribution to noncontrolling interest	—		—	—		—		—		—		—	—		—		(1,250)		(1,250)
Vesting of restricted stock	—		—	24,050		—		—		—		—	—		—		—		—
Shares withheld	—		—	—		—		—		—		—	(5,089)		(191)		—		(191)
Currency translation adjustment	—		—	—		—		—		293		—	—		—		—		293
Balances as of March 31, 2021	—	$	—	2,396,042	$	24	$	433,971	$	(81,487)	$	(260,025)	(17,163)	$	(1,000)	$	18,568	$	110,051
Share-based compensation	—		—	—		—		1,051		—		—	—		—		—		1,051
Net (loss) income	—		—	—		—		—		—		(5,795)	—		—		251		(5,544)
Distribution to noncontrolling interest	—		—	—		—		—		—		—	—		—		(500)		(500)
Vesting of restricted stock	—		—	1,693		—		—		—		—	—		—		—		—
Shares withheld	—		—	—		—		—		—		—	(219)		(6)		—		(6)
Currency translation adjustment	—		—	—		—		—		530		—	—		—		—		530
Balances as of June 30, 2021	—	$	—	2,397,735	$	24	$	435,022	$	(80,957)	$	(265,820)	(17,382)	$	(1,006)	$	18,319	$	105,582
Share-based compensation	—		—	—		—		1,018		—		—	—		—		—		1,018
Net income	—		—	—		—		—		—		2,796	—		—		430		3,226
Distribution to noncontrolling interest	—		—	—		—		—		—		—	—		—		(500)		(500)
Currency translation adjustment	—		—	—		—		—		(1,007)		—	—		—		—		(1,007)
Balances as of September 30, 2021	—	$	—	2,397,735	$	24	$	436,040	$	(81,964)	$	(263,024)	(17,382)	$	(1,006)	$	18,249	$	108,319

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

7

NCS MULTISTAGE HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Nine Months Ended
	September 30,
	2022		2021
Cash flows from operating activities
Net loss	$	(3,243)	$	(5,775)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization		3,244		3,359
Amortization of deferred loan costs		180		211
Write-off of deferred loan costs		196		—
Share-based compensation		4,490		5,208
Provision for inventory obsolescence		1,885		1,715
Deferred income tax expense		109		79
Gain on sale of property and equipment		(339)		(310)
Provision for doubtful accounts		(60)		(129)
Proceeds from note receivable		474		223
Changes in operating assets and liabilities:
Accounts receivable—trade		(12,534)		(761)
Inventories, net		(4,013)		(613)
Prepaid expenses and other assets		1,868		39
Accounts payable—trade		2,274		902
Accrued expenses		(161)		2,606
Other liabilities		(2,509)		(2,706)
Income taxes receivable/payable		(897)		2,673
Net cash (used in) provided by operating activities		(9,036)		6,721
Cash flows from investing activities
Purchases of property and equipment		(768)		(342)
Purchase and development of software and technology		(78)		(324)
Proceeds from sales of property and equipment		406		369
Net cash used in investing activities		(440)		(297)
Cash flows from financing activities
Payments on finance leases		(1,090)		(958)
Line of credit borrowings		10,214		360
Payments of line of credit borrowings		(10,189)		(360)
Treasury shares withheld		(382)		(197)
Distribution to noncontrolling interest		—		(2,250)
Payment of deferred loan cost related to ABL facility		(940)		—
Net cash used in financing activities		(2,387)		(3,405)
Effect of exchange rate changes on cash and cash equivalents		(428)		(120)
Net change in cash and cash equivalents		(12,291)		2,899
Cash and cash equivalents beginning of period		22,168		15,545
Cash and cash equivalents end of period	$	9,877	$	18,444
Noncash investing and financing activities
Leased assets obtained in exchange for new finance lease liabilities	$	1,477	$	3,711
Leased assets obtained in exchange for new operating lease liabilities	$	1,205	$	1,736

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

8

NCS MULTISTAGE HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1.  Basis of Presentation

Nature of Business

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

Basis of Presentation

Our accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities Exchange Act of 1934, as amended, issued by the Securities Exchange Commission (“SEC”) and have not been audited by our independent registered public accounting firm. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with our financial statements and related notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021 (“Annual Report”). We consolidate Repeat Precision, LLC (“Repeat Precision”), a 50% owned entity, because NCS has a controlling voting interest. The other party’s ownership is presented separately as a non-controlling interest. In the opinion of management, these condensed consolidated financial statements reflect all normal, recurring adjustments necessary for a fair statement of the interim periods presented. The results of operations for interim periods are not necessarily indicative of those for a full year. All intercompany accounts and transactions have been eliminated for purposes of preparing these condensed consolidated financial statements.

Significant Accounting Policies

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

Recent Accounting Pronouncements

Pronouncement Adopted in 2022

In November 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance, to increase transparency of disclosure regarding government assistance including the types of assistance, an entity’s method of accounting for the assistance, and the effect of the assistance on an entity’s financial statements. This standard became effective for fiscal years beginning after December 15, 2021. We adopted ASU No. 2021-10 on a prospective basis on January 1, 2022, with no material impact on our condensed consolidated financial statements.

Pronouncement Not Yet Effective

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU introduces a new impairment model that is based on expected credit losses rather than incurred credit losses for financial instruments, including trade accounts receivable. It requires an entity to measure expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. The new standard was to become effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. In November 2019, the FASB issued ASU No. 2019-10, which deferred the effective dates for certain accounting guidance. The effective date for ASU No. 2016-13 remained the same for public business entities that are SEC filers, except for entities who are deemed smaller reporting companies (“SRC”). The effective date for all other entities, including SRCs, begins during the first interim period of fiscal years beginning after December 15, 2022. NCS qualifies as an SRC. We are currently evaluating the impact of the adoption of this guidance.

9

NCS MULTISTAGE HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 2.  Revenues

Disaggregation of Revenue

We sell our products and services primarily in North America and in selected international markets. Revenue by geography is attributed based on the current billing address of the customer. The following table depicts the disaggregation of revenue by geographic region (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
United States
Product sales	$	8,217	$	5,324	$	24,551	$	18,762
Services		3,294		2,715		8,171		6,328
Total United States		11,511		8,039		32,722		25,090
Canada
Product sales		25,748		15,678		54,455		36,877
Services		9,011		6,423		21,681		14,653
Total Canada		34,759		22,101		76,136		51,530
Other Countries
Product sales		—		227		543		1,528
Services		2,600		2,044		6,045		4,238
Total Other Countries		2,600		2,271		6,588		5,766
Total
Product sales		33,965		21,229		79,549		57,167
Services		14,905		11,182		35,897		25,219
Total revenues	$	48,870	$	32,411	$	115,446	$	82,386

Contract Balances

If the timing of the delivery of products and provision of services is different from the timing of the customer payments, we recognize either a contract asset (performance precedes contractual due date in connection with estimates of variable consideration) or a contract liability (customer payment precedes performance) on our condensed consolidated balance sheet.

The following table includes the current contract liabilities as of September 30, 2022 and December 31, 2021 (in thousands):

Balance at December 31, 2021	$	71
Additions		1,963
Revenue recognized		(1,983)
Balance at September 30, 2022	$	51

We currently do not have any contract assets or non-current contract liabilities. Our contract liability as of September 30, 2022 and December 31, 2021 is included in current liabilities on our condensed consolidated balance sheets. Our performance obligations for our product and services revenues are satisfied before the customer’s payment; however, prepayments may occasionally be required. Revenue recognized from the contract liability balance was $0.4 million for the three months ended September 30, 2022, with no such revenue recognized for the three months ended September 30, 2021, and $2.0 million and $0.8 million for the nine months ended September 30, 2022 and 2021, respectively.

Practical Expedient

We do not disclose the value of unsatisfied performance obligations when the related contract has a duration of one year or less. We recognize revenue equal to what we have the right to invoice when that amount corresponds directly with the value to the customer of our performance to date.

10

NCS MULTISTAGE HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 3.  Inventories, net

Inventories consist of the following as of September 30, 2022 and December 31, 2021 (in thousands):

	September 30,		December 31,
	2022		2021
Raw materials	$	1,923	$	1,844
Work in process		280		14
Finished goods		31,912		32,059
Total inventories, net	$	34,115	$	33,917

Note 4.  Other Current Receivables

Other current receivables consist of the following as of September 30, 2022 and December 31, 2021 (in thousands):

	September 30,		December 31,
	2022		2021
Current income tax receivables	$	2,937	$	2,226
Employee receivables		284		238
Other receivables		1,083		2,262
Total other receivables, net	$	4,304	$	4,726

Employee receivables relate primarily to amounts paid by us for foreign withholding tax paid on behalf of employees working on international assignments, which is expected to be reimbursed to us by the employees when refunded as foreign tax credits on home-country tax returns. The other receivables balance as of September 30, 2022 and December 31, 2021 includes the U.S. employee retention credit (“ERC”) claims we have filed but for which we have not yet received renumeration. See “Note 9. Commitments and Contingencies” for additional information. The other receivables balance at December 31, 2021 includes $0.7 million associated with our technical services and assistance agreement with Special Oilfield Services Co., LLC, which is more fully described in our Annual Report. This receivable was collected in May 2022.

Note 5.  Property and Equipment

Property and equipment by major asset class consist of the following as of September 30, 2022 and December 31, 2021 (in thousands):

	September 30,		December 31,
	2022		2021
Land	$	1,562	$	1,701
Building and improvements		7,203		8,099
Machinery and equipment		17,864		18,152
Computers and software		2,026		2,256
Furniture and fixtures		706		1,037
Vehicles		257		313
Right of use assets - finance leases		10,978		10,228
Service equipment		57		244
		40,653		42,030
Less: Accumulated depreciation and amortization		(17,884)		(17,752)
		22,769		24,278
Construction in progress		594		430
Property and equipment, net	$	23,363	$	24,708

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NCS MULTISTAGE HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the depreciation expense associated with the following income statement line items for the three and nine months ended September 30, 2022 and 2021 (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Cost of sales
Cost of product sales	$	344	$	349	$	1,068	$	1,050
Cost of services		118		168		414		540
Selling, general and administrative expenses		420		468		1,260		1,267
Total depreciation	$	882	$	985	$	2,742	$	2,857

We evaluate our property and equipment for impairment whenever changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Despite general volatility of the U.S. equities markets, we determined there were no triggering events that indicated potential impairment of our property and equipment for the three and nine months ended September 30, 2022 and 2021, respectively, and accordingly no impairment loss was recorded.

Note 6.  Goodwill and Identifiable Intangibles

The carrying amount of goodwill is summarized as follows (in thousands):

	September 30,		December 31,
	2022		2021
Gross value	$	177,162	$	177,162
Accumulated impairment		(161,940)		(161,940)
Net	$	15,222	$	15,222

We perform an annual impairment analysis of goodwill as of December 31, or whenever there is a triggering event that indicates an impairment loss may have been incurred. As of September 30, 2022 and 2021, we did not identify any triggering events that would indicate potential impairment of goodwill at Repeat Precision, our only reportable unit with goodwill, which totaled $15.2 million. Therefore, no impairment has been recorded for the three and nine months ended September 30, 2022 and 2021, respectively.

Identifiable intangibles by major asset class consist of the following (in thousands):

		September 30, 2022
	Estimated	Gross
	Useful	Carrying		Accumulated		Net
	Lives (Years)	Amount		Amortization		Balance
Technology	1 - 20	$	3,958	$	(540)	$	3,418
Customer relationships	10		4,100		(2,323)		1,777
Total amortizable intangible assets		$	8,058	$	(2,863)	$	5,195
Technology - not subject to amortization	Indefinite		48		—		48
Total identifiable intangibles		$	8,106	$	(2,863)	$	5,243

		December 31, 2021
	Estimated	Gross
	Useful	Carrying		Accumulated		Net
	Lives (Years)	Amount		Amortization		Balance
Technology	1 - 20	$	3,958	$	(346)	$	3,612
Customer relationships	10		4,100		(2,016)		2,084
Total amortizable intangible assets		$	8,058	$	(2,362)	$	5,696
Technology - not subject to amortization	Indefinite		48		—		48
Total identifiable intangibles		$	8,106	$	(2,362)	$	5,744

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NCS MULTISTAGE HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Total amortization expense, which is associated with selling, general and administrative expenses on the condensed consolidated statements of operations, was $0.2 million for each of the three months ended September 30, 2022 and 2021 and $0.5 million for each of the nine months ended September 30, 2022 and 2021, respectively.

Identifiable intangibles are tested for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. There were no indicators of impairment identified during the three and nine months ended September 30, 2022 or 2021. Therefore, we did not record any impairment charges related to our identifiable intangibles for the three or nine months ended September 30, 2022 and 2021.

Note 7.  Accrued Expenses

Accrued expenses consist of the following as of September 30, 2022 and December 31, 2021 (in thousands):

	September 30,		December 31,
	2022		2021
Accrued payroll and bonus	$	3,905	$	4,208
Property and franchise taxes accrual		421		550
Accrued other miscellaneous liabilities		1,639		1,565
Total accrued expenses	$	5,965	$	6,323

We paid our annual incentive bonus totaling $3.2 million during the first quarter of 2022.

Note 8.  Debt

Our long-term debt consists of the following as of September 30, 2022 and December 31, 2021 (in thousands):

	September 30,		December 31,
	2022		2021
Prior Senior Secured Credit Facility	$	—	$	—
ABL Facility		—		—
Repeat Precision Promissory Note		25		—
Finance leases		7,804		7,818
Total debt		7,829		7,818
Less: current portion		(1,438)		(1,483)
Long-term debt	$	6,391	$	6,335

The estimated fair value of total debt as of September 30, 2022 and December 31, 2021 was $7.1 million and $7.5 million, respectively. At September 30, 2022, the fair value of the Repeat Precision Promissory Note (as defined below) approximated the carrying value due to a variable interest rate and the ability to repay the note at any time. The fair value of the finance leases was estimated using Level 2 inputs by calculating the sum of the discounted future interest and principal payments at our incremental borrowing rate through the date of maturity.

Below is a description of our financing arrangements.

Prior Senior Secured Credit Facility

On May 1, 2019, we entered into a Second Amended and Restated Credit Agreement (the “2019 Credit Agreement”) by and among NCS Multistage Holdings, Inc. (“NCSH”) with Pioneer Investment, Inc., as U.S. borrower (“Pioneer”), NCS Multistage Inc., as Canadian borrower (“NCS Canada”; together with Pioneer, the “Borrowers”), Pioneer Intermediate, Inc. (together with NCSH, the “Parent Guarantors”), the lenders party thereto, Wells Fargo Bank, National Association as administrative agent (the “Prior U.S. Agent”) in respect of the U.S. facility provided therein and Wells Fargo Bank, National Association, Canadian Branch, as administrative agent (the “Prior Canadian Agent”) in respect of the Canadian Facility provided therein. The 2019 Credit Agreement amended and restated our then-existing credit agreement in its entirety.

On August 6, 2020, we entered into Amendment No. 1 to the Second Amended and Restated Credit Agreement (the “the 2020 Amendment”; the 2019 Credit Agreement, as amended by the 2020 Amendment, the “Prior Amended Credit Agreement”) with the Borrowers, Pioneer Intermediate, Inc., certain subsidiaries of the Borrowers, the lenders party thereto, the Prior U.S. Agent and the

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NCS MULTISTAGE HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Prior Canadian Agent. The facility provided pursuant to the Prior Amended Credit Agreement is referred to herein as the “Prior Senior Secured Credit Facility”.

The Prior Senior Secured Credit Facility consisted of a senior secured revolving credit facility in an aggregate principal amount of $25.0 million made available to Pioneer, of which up to $2.5 million was available for letters of credit and up to $2.5 million was available for swingline loans. NCS Canada could borrow under the Prior Senior Secured Credit Facility, subject to a $15.0 million sublimit. Total borrowings available to the Borrowers under the Prior Senior Secured Credit Facility were limited subject to a borrowing base calculated on eligible receivables, which did not include receivables at Repeat Precision. As of December 31, 2021, we had no outstanding indebtedness under the Prior Senior Secured Credit Facility, and we utilized letter of credit commitments of less than $0.1 million.

Borrowings under the Prior Senior Secured Credit Facility could be made in U.S. dollars for Adjusted Base Rate Advances, and in U.S. dollars, Canadian dollars or Euros for Eurocurrency Rate Advances (each as defined in the Prior Amended Credit Agreement). Such advances bore interest at the Adjusted Base Rate or at the Eurocurrency Rate (each as defined in the Prior Amended Credit Agreement) plus an applicable interest margin between 2.75% and 3.75%, depending on our leverage ratio. We incurred interest expense related to the Prior Senior Secured Credit Facility, including commitment fees, of $28 thousand for the three months ended September 30, 2021 and $47 thousand and $0.1 million for the nine months ended September 30, 2022 and 2021, respectively. We incurred no interest expense, including commitment fees, pursuant to the Prior Senior Secured Credit Facility for the three months ended September 30, 2022.

The obligations of the Borrowers under the Prior Senior Secured Credit Facility were guaranteed by the Parent Guarantors, as well as each of the other existing and future direct and indirect restricted subsidiaries of NCS organized under the laws of the United States and Canada (subject to certain exceptions), and were secured by substantially all of the assets of the Parent Guarantors, the Borrowers and such other subsidiary guarantors, in each case, subject to certain exceptions and permitted liens.

We capitalized direct costs of $1.2 million in connection with the Prior Amended Credit Agreement, which were being amortized over the term of the Prior Senior Secured Credit Facility using the straight-line method.

Concurrent with our entry on May 3, 2022, into a replacement asset-based revolving credit facility discussed below, the Prior Senior Secured Credit Facility and the Prior Amended Credit Agreement were terminated. Of the unamortized remaining deferred loan costs associated with the Prior Senior Secured Credit Facility totaling $0.3 million, we charged $0.2 million to interest expense, net during the second quarter of 2022, associated with the members of the lender group who did not continue with the new facility, and deferred $0.1 million, along with new deferred loan costs associated with the replacement facility, to be amortized over the term of the new facility.

ABL Facility

On May 3, 2022, we entered into a new secured asset-based revolving credit facility (the “ABL Facility”) under which credit availability is subject to a borrowing base calculation. The ABL Facility is governed by the Credit Agreement dated as of May 3, 2022, by and between NCSH, Pioneer, NCS Multistage, LLC, NCS Canada, the other loan parties thereto, the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent and as a lender under the facility provided therein (the “Credit Agreement”).

The ABL Facility consists of a revolving credit facility in an aggregate principal amount of $35.0 million made available to borrowers, of which up to $10.0 million may be made in Canadian dollars and $7.5 million may be made available for letters of credit. Total borrowings available to the borrowers under the ABL Facility may be limited subject to a borrowing base calculated on the sum of cash in a specified pledged account, eligible accounts receivable and eligible inventory, provided it does not include credit for the assets of Repeat Precision. Our borrowing base under the ABL Facility at September 30, 2022 was $23.8 million. The ABL Facility will mature on May 3, 2027. As of September 30, 2022, we had no outstanding indebtedness under the ABL Facility.

Borrowings under the ABL Facility may be made in U.S. dollars with interest calculated using either the “ABR”, the “Adjusted Daily Simple SOFR” or the “Adjusted Term SOFR Rate”, and in Canadian dollars with interest calculated using the “Canadian Prime Rate” or the “CDOR Rate” (each as defined in the Credit Agreement). Borrowings bear interest plus a margin that varies depending on our leverage ratio as follows: (i) for ABR based loans, between 1.40% and 2.40%, and (ii) for Adjusted Daily Simple SOFR, Adjusted Term SOFR Rate, Canadian Prime Rate, and CDOR Rate, between 2.40% and 3.40%. We must also pay a monthly commitment fee of 0.25% to 0.50% per year, based on unused commitments. The applicable interest rate at September 30, 2022 was 5.4%. We incurred

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NCS MULTISTAGE HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

interest expense related to the ABL Facility, including commitment fees, of $44 thousand and $0.1 million for the three and nine months ended September 30, 2022.

The obligations of the borrowers under the ABL Facility are guaranteed by NCSH and each of our U.S. and Canada subsidiaries (other than Repeat Precision), as well as each of our future direct and indirect subsidiaries organized under the laws of the United States or Canada (subject to certain exceptions), and are secured by substantially all of the assets of NCSH and its subsidiaries, in each case, subject to certain exceptions and permitted liens.

The Credit Agreement requires, as a condition to borrowing, that available cash on hand after borrowings does not exceed $10.0 million. The Credit Agreement also requires us to (i) maintain, for quarters during which liquidity is less than 20% of the aggregate revolving commitments, a fixed charge coverage ratio of at least 1.0 to 1.0 and (ii) to prepay advances to the extent that the outstanding loans and letter of credit amounts exceed the most recently calculated borrowing base. As of September 30, 2022, we were in compliance with these financial covenants. The Credit Agreement also contains customary affirmative and negative covenants, including, among other things, restrictions on the creation of liens, the incurrence of indebtedness, investments, dividends and other restricted payments, dispositions and transactions with affiliates.

The Credit Agreement includes customary events of default for facilities of this type (with customary materiality thresholds and grace periods, as applicable). If an event of default occurs, the lenders party to the Credit Agreement may elect (after the expiration of any applicable notice or grace periods) to declare all outstanding borrowings under such facility, together with accrued and unpaid interest and other amounts payable thereunder, to be immediately due and payable. The lenders party to the Credit Agreement also have the right upon an event of default thereunder to terminate any commitments to provide further borrowings, or to provide additional financing in excess of the borrowing base limit, or to proceed against the collateral securing the ABL Facility.

We capitalized direct costs of $1.0 million in connection with the Credit Agreement, which are being amortized over the term of the ABL Facility using the straight-line method. Amortization of the deferred financing charges of $0.1 million was included in interest expense, net for the three and nine months ended September 30, 2022.

Repeat Precision Promissory Note

On February 27, 2017, Repeat Precision entered into a promissory note with Security State Bank & Trust, Fredericksburg (the “Repeat Precision Promissory Note”). The note bears interest at a variable interest rate based on prime plus 1.00%. The Repeat Precision Promissory Note is collateralized by certain equipment, inventory and receivables. The Repeat Precision Promissory Note was renewed on February 16, 2018 for an aggregate borrowing capacity of $4.3 million and continues to be renewed on an annual basis. The note is currently scheduled to mature on February 11, 2023. Total borrowings may be limited subject to a borrowing base calculation which includes a portion of Repeat Precision’s eligible receivables, inventory and equipment. As of September 30, 2022, Repeat Precision had $25 thousand of outstanding indebtedness under the note. There was no outstanding indebtedness under the Repeat Precision Promissory Note at December 31, 2021. Repeat Precision’s indebtedness is not guaranteed by the other NCS entities.

Finance Leases

Finance leases cover buildings including an office and laboratory in Tulsa, Oklahoma, as well as facilities in Odessa, Texas. We also maintain a vehicle leasing arrangement with a fleet management company through which we lease light vehicles and trucks that meet the finance lease criteria.

Note 9.  Commitments and Contingencies

Litigation

In the ordinary course of our business, from time to time, we have various claims, lawsuits and administrative proceedings that are pending or threatened with respect to commercial, intellectual property and employee matters.

In accordance with GAAP, we accrue for contingencies where the occurrence of a material loss is probable and can be reasonably estimated, based on our estimate of the expected liability. If we have any outstanding legal accruals, we may increase or decrease these in the future, on a matter-by-matter basis, to account for developments. Our assessment of the likely outcome of litigation matters is based on our judgment of a number of factors, including experience with similar matters, past history, precedents, relevant financial information and other evidence and facts specific to the matter. While the outcome of any legal proceeding cannot be predicted with any certainty, based on a consideration of relevant facts and circumstances, our management currently does not expect that the results of these legal proceedings will have a material adverse effect on our financial position, results of operations or cash flows.

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NCS MULTISTAGE HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Employee Retention Credit

As disclosed in our Annual Report, we evaluated our eligibility for the ERC and determined that we were eligible for refundable tax credits totaling $3.2 million for the year ended December 31, 2021, which included $0.5 million pertaining to Repeat Precision, of which $0.1 million is associated with credits earned for activity in 2020. Of the aggregate credits claimed during 2021, we received $2.1 million in 2021 and $0.2 million during the nine months ended September 30, 2022. We have included $0.9 million and $1.1 million, respectively, in other current receivables on our condensed consolidated balance sheets as of September 30, 2022 and December 31, 2021. See “Note 4. Other Current Receivables.”

Operating Leases

During the nine months ended September 30, 2022, we entered into two operating leases and renewed four others for our facilities in various locations. We recorded long-term right-of-use assets totaling approximately $1.2 million and corresponding operating lease liabilities. The leases have renewal terms from three to five years.

Note 10.  Share-Based Compensation

During the nine months ended September 30, 2022, we granted 70,938 equity-classified restricted stock units (“RSUs”) with a weighted average grant date fair value of $42.16. We account for RSUs granted to employees at fair value on the date of grant, which we measure as the closing price of our common stock on the date of grant, and we recognize the compensation expense in the financial statements over the requisite service period. The RSUs granted to our employees generally vest over a period of three equal annual installments beginning on February 28, 2023. The RSUs granted to the members of our Board of Directors will vest on February 28, 2023 or on the one year anniversary of the grant date and will either settle at vesting or, if the director has elected to defer the RSUs, within thirty days following the earlier of the termination of the director’s service for any reason or a change of control.

During the nine months ended September 30, 2022, we granted 48,565 equivalent stock units, or cash-settled, liability-classified RSUs (“ESUs”), with a weighted average grant date fair value of $42.90. When the ESUs are originally granted to employees, they are valued at fair value, which we measure as the closing price of our common stock on the date of grant. Since the ESUs will be settled in cash, we record a liability, which is remeasured each reporting period at fair value based upon the closing price of our common stock until the awards are settled. The ESUs will vest and settle ratably in three equal annual installments beginning on February 28, 2023. The cash settled for any ESU will not exceed the maximum payout established by our Compensation, Nominating and Governance Committee of the Board of Directors.

In addition, during the nine months ended September 30, 2022, we granted 17,454 performance stock unit awards (“PSUs”), which have a performance period from January 1, 2022 to December 31, 2024. The PSUs grant date fair value of $71.28 was measured using a Monte Carlo simulation. The number of PSUs ultimately issued under the program is dependent upon our total shareholder return relative to a performance peer group (“relative TSR”) over the three year performance period. Each PSU will settle for between zero and two shares of our common stock in the first quarter of 2025. The threshold performance level (25th percentile relative TSR) starts to earn PSUs, the mid-point performance level (50th percentile relative TSR) earns 100% of the target PSUs and the maximum performance level (90th percentile relative TSR) or greater earns 200% of the target PSUs.

Total share-based compensation expense for all awards was $1.0 million and $1.4 million for the three months ended September 30, 2022 and 2021, respectively, and $4.5 million and $5.2 million for the nine months ended September 30, 2022 and 2021, respectively.

Note 11.  Income Taxes

The computation of the annual estimated effective tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the expected operating income (or loss) for the year, projections of the proportion of income (or loss) earned and taxed in foreign jurisdictions, permanent and temporary differences and the likelihood of recovering deferred tax assets generated in the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur, more experience is acquired or additional information is obtained. The computation of the annual estimated effective tax rate includes applicable modifications, which were projected for the year, such as certain book expenses not deductible for tax, tax credits and foreign deemed dividends.

Our effective tax rate (“ETR”) from continuing operations was (3.1)% and (33.5)% for the three months ended September 30, 2022 and 2021, respectively, and 16.1% and (0.8)% for the nine months ended September 30, 2022 and 2021, respectively. During the

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NCS MULTISTAGE HOLDINGS, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

three and nine months ended September 30, 2022, our ETR differed from the statutory federal income tax rate primarily due to the tax benefit recorded related to changes in valuation allowance on deferred tax assets not expected to be realized, the expense recorded for foreign taxes, and the tax expense recorded related to stock awards. During the three and nine months ended September 30, 2021, our ETR differed from the statutory federal tax rate primarily due to the amount recorded related to changes in the valuation allowance on deferred tax assets not expected to be realized and the tax expense recorded related to stock awards.

Note 12.  Earnings (Loss) Per Common Share

The following table presents the reconciliation of the numerator and denominator for calculating earnings (loss) per common share from net income (loss) (in thousands, except per share data):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Numerator
Net income (loss)	$	3,964	$	3,226	$	(3,243)	$	(5,775)
Less: income (loss) attributable to non-controlling interest		29		430		(162)		621
Net income (loss) attributable to NCS Multistage Holdings, Inc.	$	3,935	$	2,796	$	(3,081)	$	(6,396)
Denominator
Basic weighted average number of shares		2,438		2,401		2,430		2,394
Dilutive effect of stock options, RSUs and PSUs		50		44		—		—
Diluted weighted average number of shares		2,488		2,445		2,430		2,394
Earnings (loss) per common share
Basic	$	1.61	$	1.16	$	(1.27)	$	(2.67)
Diluted	$	1.58	$	1.14	$	(1.27)	$	(2.67)
Potentially dilutive securities excluded as anti-dilutive		210		173		275		255

Note 13.  Segment and Geographic Information

We have determined that we operate in one reportable segment that has been identified based on how our chief operating decision maker manages our business. See “Note 2. Revenues” for our disaggregated revenue by geographic area. 

17

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

The following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and the related notes thereto included in this Quarterly Report on Form 10-Q (“Quarterly Report”) and with our audited financial statements and the related notes thereto included in our Annual Report on Form 10-K (“Annual Report”), filed with the Securities and Exchange Commission (the “SEC”). This discussion and analysis contains forward-looking statements regarding the industry outlook, estimates and assumptions concerning events and financial and industry trends that may affect our future results of operations or financial condition and other non-historical statements. These forward-looking statements are subject to numerous risks and uncertainties, including but not limited to the risks and uncertainties described in “—Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors.” Our actual results may differ materially from those contained in or implied by these forward-looking statements. As used in this Quarterly Report, except where the context otherwise requires or where otherwise indicated, the terms “Company,” “NCS,” “we,” “our” and “us” refer to NCS Multistage Holdings, Inc.

Overview

We are a leading provider of highly engineered products and support services that facilitate the optimization of oil and natural gas well construction, well completions and field development strategies. We provide our products and services primarily to exploration and production (“E&P”) companies for use in onshore and offshore wells, predominantly wells that have been drilled with horizontal laterals in both unconventional and conventional oil and natural gas formations. Our products and services are utilized in oil and natural gas basins throughout North America and in selected international markets, including Argentina, China, the Middle East and the North Sea. We provide our products and services to various customers, including leading large independent oil and natural gas companies and major oil companies.

Our primary offering is our fracturing systems products and services, which enable efficient pinpoint stimulation: the process of individually stimulating each entry point into a formation targeted by an oil or natural gas well. Our fracturing systems products and services are typically utilized in cemented wellbores and enable our customers to precisely place stimulation treatments in a more controlled and repeatable manner as compared with traditional completion techniques. Our fracturing systems products and services are utilized in conjunction with third-party providers of pressure pumping, coiled tubing and other services.

We own a 50% interest in Repeat Precision, LLC (“Repeat Precision”), which sells composite frac plugs, perforating guns and related products. We provide tracer diagnostics services for well completion and reservoir characterization that utilize downhole chemical and radioactive tracers. We sell products for well construction, including casing buoyancy systems, liner hanger systems and toe initiation sleeves. We offer enhanced recovery systems, which enable our customers to inject water, other fluids, or gases in a controlled manner with the objective of increasing the amount of hydrocarbons produced from their assets. We operate in one reportable segment that has been identified based on how our chief operating decision maker manages our business.

Outlook

Our products and services are primarily sold to North American E&P companies and our ability to generate revenues from our products and services depends upon oil and natural gas drilling and completion activity in North America. Oil and natural gas drilling and completion activity is directly influenced by oil and natural gas prices.

Drilling and completion activity in the United States and Canada has increased steadily since falling to multi-decade lows in late 2020, as the global economy and oil and natural gas demand have recovered from the impact of the Coronavirus disease 2019 (“COVID-19”) pandemic. While U.S. drilling and completion activity remains slightly lower than it was prior to the COVID-19 pandemic, the Canadian rig count surpassed comparable 2019 levels in the third quarter of 2021 and has remained above comparable 2019 levels since that time, indicating a stronger industry recovery in Canada than in the United States. Customer activity has continued to increase in 2022, with the U.S. and Canadian rig counts in the third quarter of 2022 higher by 54% and 32%, respectively, compared to the same period as 2021.

Based on E&P company activity to date and expected capital budgets for the remainder of 2022, we believe that industry drilling and completion activity in the United States will be higher in 2022 than in 2021, with drilling activity increasing over 30%, a faster rate than completion activity, which we expect to increase by over 10%. We expect drilling and completion activity to increase by 20% to 25% in Canada in 2022. We currently expect international industry activity to improve by over 10% in 2022 as compared to 2021. Many of our customers in North America continue to be committed to generating free cash flow while maintaining production at year-end 2021 levels, though privately-owned operators have increased activity in response to improved commodity prices, contributing most of the activity increases since late 2020. Oil and natural gas prices have risen in 2022, with spot pricing increasing further following Russia’s invasion of Ukraine in late February. We have no material direct exposure to Russia or Ukraine, though we are monitoring economic impacts resulting from the conflict, especially on raw material pricing and availability, as noted below.

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Despite the recent and expected improvements in industry activity levels, we continue to face intense competitive pressure across all of our product and services offerings, which may negatively impact our market share as well as our margins.

During the second half of 2021, we began to experience increased prices for certain raw materials, including steel and chemicals and for purchased components and outsourced services, with such increases continuing into 2022, and exacerbated by the impacts resulting from Russia’s continuing invasion of Ukraine. While we have increased customer prices because of our higher raw material and component costs, the increase in customer prices have not always offset our higher input costs and there has been a time lag in our ability to do so. If we experience even higher costs, we will strive to achieve price increases to pass through to our customers, however, we are not always able to do so and, if we can, the impact of such price increases may lag the timing of cost increases. During this time, we also began to experience tight labor conditions which has led to increased employee turnover, delays in filling open positions and labor cost inflation, which impacts both our cost of sales and selling, general and administrative (“SG&A”) expenses. This labor cost inflation, which has continued into 2022, has resulted in higher salaries, hourly pay rates and benefit costs.

In an effort to reduce inflationary pressures on the economy, central banks, including the U.S. Federal Reserve, have begun to increase reference interest rates, an action which typically has the effect of increasing borrowing costs and restraining economic activity. There is a possibility that these actions could not only reduce the rate of global economic growth, but could lead to a recessionary environment in certain economies, including Europe and the United States. Any reduction in economic activity resulting from such actions could result in moderating or declining demand for oil and natural gas. In addition, in 2022 the U.S. dollar has strengthened relative to other currencies, including the Canadian dollar. Over 60% of our revenue is generated in Canada, and reductions in the value of the Canadian dollar as compared to the U.S. dollar, our reporting currency, result in lower reported revenue and gross profit, partially offset by lower reported SG&A expense.

COVID-19 Impacts on the Oil & Natural Gas Market and NCS Multistage

In 2020, the COVID-19 pandemic and associated actions taken around the world to mitigate the spread of COVID-19 caused unprecedented declines in economic activity, energy demand and oil and natural gas prices. As a result of the COVID-19 pandemic, there was a significant reduction in global gross domestic product (“GDP”) in 2020, which began to recover in 2021 as vaccines became available and mitigation measures eased. This resulted in a reduction in the demand for crude oil, which is not expected to recover to 2019 levels until late 2022 or 2023. In response to these economic factors, members of OPEC and certain other countries, including Russia (informally known as “OPEC+”), collectively reduced oil production through August 2022 and E&P companies in North America reduced their capital spending budgets, with 2022 capital budgets expected to remain below 2019 levels in the United States. This also led to consolidation amongst E&P companies, especially large, independent publicly-traded E&P companies, and this included customers for which we have provided products and services.

The COVID-19 pandemic has also caused ongoing supply chain disruptions and cost inflation, including labor cost inflation, the effects of which have continued into 2022. Restrictive mitigation measures imposed in China that began in April 2022 have extended the duration of these supply chain disruptions.

In response to the reduction in demand for our products and services resulting from these economic factors, we implemented initiatives in 2020 to reduce our cost structure, limit capital expenditures and enhance our liquidity and access to capital, some of which continue into 2022, including:

Reductions in force and temporary reductions in compensation and certain benefits for substantially all employees, with such compensation and benefits having since been substantially restored or increased;

Cost reduction efforts targeting non-essential travel, vendor pricing, and reductions in third-party spend, including information technology, financial services and third-party research and development; 

Application for, and receipt of benefits related to U.S. employer payroll taxes and refundable employee retention tax credits and the Canada Emergency Wage Subsidy (“CEWS”) and Canada Emergency Rent Subsidy (“CERS”) programs;

Reduction of planned capital expenditures and the sale of excess vehicles;

Closure of our district operational facilities in Corpus Christi and Oklahoma City and relocating our U.S. assembly operations; subsequently opening a new operational facility in Oklahoma City; and

Amendment of our prior revolving credit facility and replacement of this facility with an asset-based facility to provide us with enhanced financial flexibility (as described in more detail in “Note 8. Debt” in our unaudited condensed consolidated financial statements).

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Market Conditions

Oil and Natural Gas Drilling and Completion Activity

Oil and natural gas prices remain volatile, with WTI crude oil pricing rising throughout 2021 to approximately $75/BBL at the end of December 2021. WTI crude oil pricing continued to rise in 2022 reaching approximately $90/BBL by mid-February, then rising to over $100/BBL following Russia’s invasion of Ukraine. WTI crude oil pricing averaged approximately $93/BBL in the third quarter of 2022 and continues to be supported by voluntary oil production reductions by members of OPEC +, including a collective reduction in oil production of 2 MMBBL/D beginning in November 2022 through December 2023 to address uncertain outlook in the global economic and oil markets. The improvement in oil demand from 2020 lows, combined with OPEC+ production curtailments has led to global oil and refined products storage levels being below long-term averages, which has also supported oil pricing.

Natural gas pricing also increased throughout 2021 and increased to an average level of $8.03 per MMBtu during the third quarter of 2022. Realized natural gas prices for Canadian E&P customers are typically at a discount to U.S. Henry Hub pricing. Natural gas pricing in the United States has been supported by increased demand for exports of liquified natural gas (“LNG”) in late 2021 and early 2022, especially for power generation in Europe and Asia, reflecting European demand for LNG sourced from the United States and other regions to diversify supply historically provided by Russia.

While the current outlook for oil and natural gas prices is favorable, sustained meaningful declines in commodity prices from current levels, or sustained periods when the local pricing received in regional markets is below benchmark pricing, known in the industry as high differentials, would be expected to lead North American E&P companies to reduce drilling and completion activity, which could negatively impact our business.

Listed and depicted below are recent crude oil and natural gas pricing trends, as provided by the Energy Information Administration (“EIA”) of the U.S. Department of Energy:

	Average Price
Quarter Ended	WTI Crude (per Bbl)		Brent Crude ‎(per Bbl)		Henry Hub Natural Gas ‎(per MMBtu)
9/30/2021	$	70.58	$	73.51	$	4.35
12/31/2021		77.33		79.61		4.75
3/31/2022		95.18		100.87		4.67
6/30/2022		108.83		113.84		7.50
9/30/2022		93.06		100.71		8.03

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Listed and depicted below are the average number of operating onshore rigs in the United States and in Canada per quarter since the third quarter of 2021, as provided by Baker Hughes Company. The quarterly changes in the Canadian land rig count can be partially attributed to seasonality of activity in that market:

	Average Drilling Rig Count
Quarter Ended	U.S. Land	Canada Land	North America Land
9/30/2021	484	150	634
12/31/2021	545	159	704
3/31/2022	618	198	816
6/30/2022	698	112	810
9/30/2022	744	198	942

Over the past several years, North American E&P companies have been able to reduce their cost structures and utilize technologies, including ours, to increase efficiency and improve well performance. The average U.S. land rig count and completion activity have continued to increase from lows reached in late 2020, with the U.S. land rig count averaging 744 during the third quarter of 2022, a 54% increase compared to the third quarter of 2021. The average land rig count in Canada for the third quarter of 2022 was 32% higher than in the same period in 2021. We expect U.S. and Canadian rig counts and completion activity to continue to exceed prior year levels during the fourth quarter of 2022.

A substantial portion of our business is subject to quarterly variability. In Canada, we typically experience higher activity levels in the first quarter of each year, as our customers take advantage of the winter freeze to gain access to remote drilling and production areas. In the past, our revenue in Canada has declined during the second quarter due to warming weather conditions that result in thawing, softer ground, difficulty accessing well sites and road bans that curtail drilling and completion activity. Access to well sites typically improves throughout the third and fourth quarters in Canada, leading to activity levels that are higher than in the second quarter, but usually lower than activity in the first quarter. Our business can also be impacted by a reduction in customer activity

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during the winter holidays in late December and early January. In recent years, many customers in the United States exhausted their capital budgets prior to the end of the year, leading to reductions in drilling and completion activity during the fourth quarter.

Adoption of Pinpoint Stimulation

Traditional well completion techniques, including plug and perf and ball drop, currently account for the majority of unconventional well completions in North America and over 90% of unconventional well completions in the United States. We believe that pinpoint stimulation provides benefits compared to these traditional well completion techniques. Our ability to grow our market share, as evidenced by the percentage of horizontal wells in North America completed using our products and services, will depend in large part on the industry’s further adoption of pinpoint stimulation to complete wells, our ability to continue to innovate our technology to compete against technological advances in traditional well completion techniques, and our ability to successfully compete with other providers of pinpoint stimulation products and services, including adjusting our pricing in certain markets to respond to customer demands and to competitors that may provide discounted pricing to our customers.

Increasing Well Complexity and Focus on Completion Optimization

In recent years, E&P companies have drilled longer horizontal wells and completed more hydraulic fracturing stages per well to maximize the volume of hydrocarbon recoveries per well. This trend towards longer and more complex wells has resulted in us selling more sliding sleeves or composite frac plugs per well on average, which increases our revenue opportunity per well completion and has supported sales of our casing buoyancy systems. Additionally, E&P companies have become increasingly focused on well productivity through optimization of completion designs and we believe this trend may further the adoption of pinpoint stimulation, and in turn, increase the opportunity for sales of our products and services if our customers observe operational benefits and long-term production results from the application of pinpoint stimulation. This trend towards more complex well completions provides opportunities for tracer diagnostics services, which can be utilized to assess the effectiveness of various well completion techniques and well spacing strategies in support of completion and field development optimization efforts.

How We Generate Revenues

We derive our revenues from the sale of our fracturing systems and enhanced recovery systems products and the provision of related services, the sale of composite frac plugs and related products through Repeat Precision and from sales of our tracer diagnostics services, casing buoyancy systems, liner hanger systems and toe initiation sleeves products.

Product sales represented 70% and 65% of our revenues for the three months ended September 30, 2022 and 2021, respectively, and 69% and 69% for the nine months ended September 30, 2022 and 2021, respectively. Most of our sales are on a just-in-time basis, as specified in individual purchase orders, with a fixed price for our products. We occasionally supply our customers with large orders that may be filled on negotiated terms. Services represented 30% and 35% of our revenues for the three months ended September 30, 2022 and 2021, respectively, and 31% and 31% for the nine months ended September 30, 2022 and 2021, respectively. Services include our tool charges and associated services related to our fracturing systems and tracer diagnostics services (which are classified together as “services” in our financial results). Services are provided at agreed upon rates to customers for the provision of our downhole frac isolation assembly, our personnel and for the provision of tracer diagnostics services.

During periods of low drilling and well completion activity or as may be needed to compete in certain markets, we will, in some instances, lower the prices of our products and services. Our revenues are also impacted by well complexity, with wells with more stages resulting in longer jobs and increased revenue attributable to selling more sliding sleeves or composite frac plugs and the provision of our services.

The percentages of our revenues derived from sales in Canada and denominated in Canadian dollars were approximately 71% and 68% for the three months ended September 30, 2022 and 2021, respectively, and approximately 66% and 63% for the nine months ended September 30, 2022 and 2021, respectively. Our Canadian contracts are typically invoiced in Canadian dollars; therefore, the effects of foreign currency fluctuations impact our revenues and are regularly monitored.

Although most of our sales are to North American E&P companies, we also have sales to customers outside of North America, and we expect sales to international customers to increase over time. These international sales are made through local NCS entities or to our local operating partners on a free on board or free carrier basis with a point of sale in the United States. Some of the locations in which we have operating partners or sales representatives include China and the Middle East. Our operating partners and representatives do not have authority to contractually bind NCS but market our products in their respective territories as part of their product or services offering.

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Costs of Conducting our Business

Our cost of sales is comprised of expenses relating to the manufacture of our products in addition to the costs of our support services. Manufacturing cost of sales includes payments made to our suppliers for raw materials and payments made to machine shops for the manufacture of product components and finished assemblies and costs related to our employees that perform quality control analysis, assemble and test our products. In addition, Repeat Precision operates manufacturing facilities with supporting personnel in Mexico, which has allowed us to reduce our costs for certain product categories. We review forecasted activity levels in our business and either directly procure or support our vendors in procuring the required raw materials with sufficient lead time to meet our business requirements. We obtain certain chemicals utilized in our tracer diagnostics services business from suppliers in China, which are subject to a 25% tariff, which increases our cost of sales. During the second half of 2021, we began to experience increased prices for certain raw materials, including steel and chemicals and for purchased components and outsourced services, with such increases continuing into 2022, and exacerbated by the impacts resulting from Russia’s continuing invasion of Ukraine. Cost of sales for support services includes compensation and benefit-related expenses for employees who provide direct revenue generating services to customers in addition to the costs incurred by these employees for travel and subsistence while on site. Cost of sales includes other variable manufacturing costs, such as shrinkage, obsolescence, revaluation and scrap related to our existing inventory and costs related to the chemicals and laboratory analysis associated with our tracer diagnostics services.

Our SG&A expenses are comprised of compensation expense, which includes compensation and benefit-related expenses for our employees who are not directly involved in revenue generating activities, including those involved in our research and development activities, as well as our general operating costs. These general operating costs include, but are not limited to: rent and occupancy for our facilities, information technology infrastructure services, software licensing, advertising and marketing, third party research and development, risk insurance and professional service fees for audit, legal and other consulting services. Our SG&A expenses also include litigation expenses and provisions for doubtful accounts.

During 2021, we began to experience tight labor conditions which has led to increased employee turnover, delays in filling open positions and labor cost inflation, which impacts both our cost of sales and our SG&A expenses. This labor cost inflation, which has continued into 2022, has resulted in increased salaries, hourly pay rates and benefit costs.

The percentage of our operating costs denominated in Canadian dollars (including cost of sales and SG&A expenses but excluding depreciation and amortization expense) approximated 39% and 22% for the three months ended September 30, 2022 and 2021, respectively, and approximated 26% and 24% for the nine months ended September 30, 2022 and 2021, respectively.

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Results of Operations

Three Months Ended September 30, 2022 Compared to Three Months Ended September 30, 2021

The following table summarizes our revenues and expenses for the periods presented (dollars in thousands):

	Three Months Ended
	September 30,				Variance
	2022		2021		$		%
Revenues
Product sales	$	33,965	$	21,229	$	12,736	60.0	%
Services		14,905		11,182		3,723	33.3	%
Total revenues		48,870		32,411		16,459	50.8	%
Cost of sales
Cost of product sales, exclusive of depreciation and amortization expense shown below		20,754		12,898		7,856	60.9	%
Cost of services, exclusive of depreciation and amortization expense shown below		7,640		4,738		2,902	61.2	%
Total cost of sales, exclusive of depreciation and amortization expense shown below		28,394		17,636		10,758	61.0	%
Selling, general and administrative expenses		15,379		10,982		4,397	40.0	%
Depreciation		882		985		(103)	(10.5)	%
Amortization		168		168		—	—	%
Income from operations		4,047		2,640		1,407	53.3	%
Other income (expense)
Interest expense, net		(204)		(163)		(41)	(25.2)	%
Other income, net		564		176		388	220.5	%
Foreign currency exchange loss, net		(563)		(236)		(327)	(138.6)	%
Total other expense		(203)		(223)		20	9.0	%
Income before income tax		3,844		2,417		1,427	59.0	%
Income tax benefit		(120)		(809)		689	85.2	%
Net income		3,964		3,226		738	22.9	%
Net income attributable to noncontrolling interest		29		430		(401)	(93.3)	%
Net income attributable to NCS Multistage Holdings, Inc.	$	3,935	$	2,796	$	1,139	40.7	%

Revenues

Revenues were $48.9 million for the three months ended September 30, 2022 as compared to $32.4 million for the three months ended September 30, 2021. This increase reflected higher product sales and services volumes in Canada and the United States as well as higher international services volumes, partially offset by no international product sales, for which individual orders can be larger and less frequent. We believe the overall increase in revenues largely resulted from higher industry drilling and completion activity in the third quarter of 2022 as compared to 2021, particularly in North America, attributable primarily to higher demand for oil and natural gas and more favorable commodity prices. Product sales for the three months ended September 30, 2022 were $34.0 million as compared to $21.2 million for the three months ended September 30, 2021. Services revenue totaled $14.9 million compared to $11.2 million for the same periods.

Cost of sales

Cost of sales was $28.4 million, or 58.1% of revenues, for the three months ended September 30, 2022 as compared to $17.6 million, or 54.4% of revenues, for the three months ended September 30, 2021. Cost of sales as a percentage of total revenues was higher due to increased costs impacting our supply chain, including raw materials, purchased materials, labor costs and outsourced service activity as well as a decrease in international revenue as a percentage of total revenue. Also, in 2021 labor costs were reduced due to the U.S. employee retention credit (“ERC”), which did not recur in 2022. See “Note 9. Commitments and Contingencies” of our unaudited condensed consolidated financial statements for additional detail. The decline was partially offset by increased revenues and higher utilization of manufacturing capacity and field service personnel. Cost of product sales was $20.8 million, or 61.1% of product sales revenue, and cost of services was $7.6 million, or 51.3% of services revenue, for the three months ended September 30, 2022. For the three months ended September 30, 2021, cost of product sales was $12.9 million, or 60.8% of product sales revenue, and cost of services was $4.7 million, or 42.4% of services revenue.

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Selling, general and administrative expenses

Selling, general and administrative expenses were $15.4 million for the three months ended September 30, 2022 as compared to $11.0 million for the three months ended September 30, 2021. This overall increase in expense reflects higher compensation and benefit costs of $3.2 million primarily associated with increased headcount, salary increases implemented during the first quarter of 2022, the restoration of employer matching contributions in January 2022 and a benefit of $2.3 million received in 2021 associated with the ERC, which did not recur in 2022. See “Note 9. Commitments and Contingencies” of our unaudited condensed consolidated financial statements. In addition, professional fees, travel and entertainment and research and development expenses increased by $0.9 million, $0.3 million and $0.2 million, respectively, partially offset by lower share-based compensation expense of $0.4 million.

Income tax benefit

Income tax benefit was $(0.1) million for the three months ended September 30, 2022 as compared to $(0.8) million for the three months ended September 30, 2021. Included in the amount for the three months ended September 30, 2022 was a tax benefit of $(1.0) million related to a decrease in the valuation allowance on deferred tax assets not expected to be realized and a tax benefit of $(0.4) million for foreign taxes. Included in the amount for the three months ended September 30, 2021 was a tax benefit of $(1.5) million related to a decrease in the valuation allowance on deferred tax assets not expected to be realized and a tax benefit of $(0.3) million for foreign taxes.

Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021

The following table summarizes our revenues and expenses for the periods presented (dollars in thousands):

	Nine Months Ended
	September 30,				Variance
	2022		2021		$		% (1)
Revenues
Product sales	$	79,549	$	57,167	$	22,382	39.2	%
Services		35,897		25,219		10,678	42.3	%
Total revenues		115,446		82,386		33,060	40.1	%
Cost of sales
Cost of product sales, exclusive of depreciation and amortization expense shown below		51,910		37,487		14,423	38.5	%
Cost of services, exclusive of depreciation and amortization expense shown below		19,210		12,354		6,856	55.5	%
Total cost of sales, exclusive of depreciation and amortization expense shown below		71,120		49,841		21,279	42.7	%
Selling, general and administrative expenses		45,148		35,589		9,559	26.9	%
Depreciation		2,742		2,857		(115)	(4.0)	%
Amortization		502		502		—	—	%
Loss from operations		(4,066)		(6,403)		2,337	36.5	%
Other income (expense)
Interest expense, net		(794)		(529)		(265)	(50.1)	%
Other income, net		1,556		1,046		510	48.8	%
Foreign currency exchange (loss) gain, net		(562)		156		(718)	(460.3)	%
Total other income		200		673		(473)	(70.3)	%
Loss before income tax		(3,866)		(5,730)		1,864	32.5	%
Income tax (benefit) expense		(623)		45		(668)	NM
Net loss		(3,243)		(5,775)		2,532	43.8	%
Net (loss) income attributable to noncontrolling interest		(162)		621		(783)	(126.1)	%
Net loss attributable to ‎    NCS Multistage Holdings, Inc.	$	(3,081)	$	(6,396)	$	3,315	51.8	%

_______________

(1)NM – Percentage not meaningful

Revenues

Revenues were $115.4 million for the nine months ended September 30, 2022 as compared to $82.4 million for the nine months ended September 30, 2021. This increase reflected higher product sales and services volumes in Canada and the United States as well as higher international services volumes, partially offset by a decrease in international product sales, for which individual orders can

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be larger and less frequent. We believe the overall increase in revenues largely resulted from higher industry drilling and completion activity in the first nine months of 2022 as compared to 2021, particularly in North America, attributable primarily to higher oil and natural gas demand and more favorable commodity prices. Product sales for the nine months ended September 30, 2022 were $79.5 million as compared to $57.2 million for the nine months ended September 30, 2021. Services revenue totaled $35.9 million compared to $25.2 million for the same periods.

Cost of sales

Cost of sales was $71.1 million, or 61.6% of revenues, for the nine months ended September 30, 2022 as compared to $49.8 million, or 60.5% of revenues, for the nine months ended September 30, 2021. Cost of sales as a percentage of total revenues was higher between these periods due to increased costs impacting our supply chain, including raw materials, purchased materials, labor costs and outsourced service activity as well as a decrease in international revenue as a percentage of our total revenue. Labor costs for 2021 were reduced due to the ERC, which did not recur in 2022. See “Note 9. Commitments and Contingencies” of our unaudited condensed consolidated financial statements. The decline was partially offset by increased revenues and higher utilization of manufacturing capacity and field service personnel. Cost of product sales was $51.9 million, or 65.3% of product sales revenue, and cost of services was $19.2 million, or 53.5% of services revenue, for the nine months ended September 30, 2022. For the nine months ended September 30, 2021, cost of product sales was $37.5 million, or 65.6% of product sales revenue, and cost of services was $12.4 million, or 49.0% of services revenue.

Selling, general and administrative expenses

Selling, general and administrative expenses were $45.1 million for the nine months ended September 30, 2022 as compared to $35.6 million for the nine months ended September 30, 2021. This overall increase in expense reflects increased compensation and benefit costs of $6.0 million primarily associated with reinstatement of certain salaries in mid-2021, increased headcount, salary increases implemented during the first quarter of 2022, the restoration of employer matching contributions in January 2022 and a benefit of $2.3 million in 2021 associated with the ERC, which did not recur in 2022. See “Note 9. Commitments and Contingencies” of our unaudited condensed consolidated financial statements. In addition, professional fees, primarily related to litigation matters, increased by $2.7 million and travel and entertainment and research and development expenses increased by $0.8 million and $0.4 million, respectively, partially offset by lower share-based compensation of $0.7 million.

Foreign currency exchange (loss) gain, net

Foreign currency exchange (loss) gain, net was ($0.6) million for the nine months ended September 30, 2022 as compared to $0.2 million for the nine months ended September 30, 2021. The change was due to the movement in the foreign currency exchange rates between the periods, primarily the Canadian dollar relative to the U.S. dollar.

Income tax (benefit) expense

Income tax (benefit) expense was $(0.6) million for the nine months ended September 30, 2022 as compared to $45 thousand for the nine months ended September 30, 2021. Included in the amount for the nine months ended September 30, 2022 was a tax benefit of $(0.4) million related to an increase in the valuation allowance on deferred tax assets not expected to be realized, tax expense of $0.7 million related to stock awards, and a tax benefit of $(0.3) million for foreign taxes. Included in the amount for the nine months ended September 30, 2021 was a tax expense of $0.4 million for an increase in a valuation allowance on deferred tax assets not expected to be realized, tax expense of $0.5 million related to stock awards, and a tax expense of $0.2 million for foreign taxes.

Liquidity and Capital Resources

Our primary sources of liquidity are our existing cash and cash equivalents, cash flows from operations and potential borrowings under our ABL Facility and the Repeat Precision Promissory Note (as defined below). As of September 30, 2022, we had cash and cash equivalents of $9.9 million, and total outstanding indebtedness of $7.8 million primarily related to capital lease obligations. Our secured asset-based revolving credit facility (the “ABL Facility”) consists of an asset-based revolving credit facility in an aggregate principal amount of $35.0 million. Total borrowings are limited to a borrowing base calculated on the sum of cash in a specified pledged account, eligible accounts receivable and eligible inventory, provided it does not include credit for the assets of Repeat Precision. At September 30, 2022, our borrowing base under the ABL Facility was $23.8 million, with no outstanding borrowings. We have cash-collateralized less than $0.1 million in letter of credit commitments. The amount available to be drawn under the ABL Facility may decline from current levels due to reductions in our borrowing base or a springing financial covenant if our business were to be adversely impacted by a decline in market conditions. We were in compliance with our debt covenants at September 30, 2022. In addition, Repeat Precision’s promissory note with Security State Bank & Trust, Fredericksburg (the “Repeat Precision Promissory Note”) has total aggregate borrowing capacity of $4.3 million. As of September 30, 2022, Repeat Precision has $25 thousand of outstanding indebtedness under its promissory note. We believe that our cash on hand, cash flows from operations and potential

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borrowings under our ABL Facility and the Repeat Precision Promissory Note will be sufficient to fund our capital expenditure and liquidity requirements for the next twelve months and after. Our principal liquidity needs have been, and are expected to continue to be, capital expenditures, working capital, debt service and potential mergers and acquisitions.

Our capital expenditures for the nine months ended September 30, 2022 and 2021 were $0.8 million and $0.7 million, respectively. We plan to incur approximately $1.0 million to $1.5 million in capital expenditures during 2022, which includes (i) upgrades to our tracer diagnostics deployment and sampling equipment, (ii) machining equipment and molds to increase manufacturing capacity at Repeat Precision, (iii) new computers and engineering workstations and (iv) equipment to support growth in our Canadian liner hanger operations.

To the extent we require additional liquidity to fund our capital requirements, including our capital lease obligations, or repay existing indebtedness, we would expect to obtain it through the incurrence of additional indebtedness, the proceeds of equity issuances, or a combination thereof. We cannot provide assurance that we will be able to obtain this additional liquidity on reasonable terms, or at all. Our liquidity and our ability to meet our obligations and fund our capital requirements are also dependent on our future financial performance and ability to manage costs, which is subject to general economic, financial and other factors that are beyond our control, including the COVID-19 pandemic. Accordingly, we cannot provide assurance that our business will generate sufficient cash flow from operations or that funds will be available from additional indebtedness, the capital markets or otherwise to meet our liquidity needs. If we decide to pursue one or more significant acquisitions, we may incur additional debt or sell equity to finance such acquisitions, which could result in incremental expenses or dilution.

Cash Flows

The following table provides a summary of cash flows from operating, investing and financing activities for the periods presented (in thousands):

	Nine Months Ended
	September 30,
	2022		2021
Net cash (used in) provided by operating activities	$	(9,036)	$	6,721
Net cash used in investing activities		(440)		(297)
Net cash used in financing activities		(2,387)		(3,405)
Effect of exchange rate changes on cash and cash equivalents		(428)		(120)
Net change in cash and cash equivalents	$	(12,291)	$	2,899

Operating Activities

Net cash (used in) provided by operating activities was $(9.0) million and $6.7 million for the nine months ended September 30, 2022 and 2021, respectively. The decrease in cash flow was primarily driven by increases in accounts receivable and inventory, the payment of the annual incentive bonus of $3.2 million, receipt of income tax refunds in 2021, which did not recur in 2022, and payments related to cash-settled share-based compensation. The decrease was partially offset by lower net loss in 2022 as compared to 2021 and reductions in prepaid expenses and other assets.

Investing Activities

Net cash used in investing activities was $0.4 million and $0.3 million for the nine months ended September 30, 2022 and 2021, respectively, with an increase in purchases of property and equipment partially offset by a decrease in the purchase and development of software and technology.

Financing Activities

Net cash used in financing activities was $2.4 million and $3.4 million for the nine months ended September 30, 2022 and 2021, respectively. Our primary uses of funds for the nine months ended September 30, 2022 included total principal payments of $11.3 million on our line of credit borrowings and finance leases, payments of $0.4 million for treasury shares withheld to settle withholding tax requirements for equity-settled share-based compensation, and payments of $0.9 million for deferred costs related to our ABL Facility. Our primary source of funds for the nine months ended September 30, 2022 was line of credit borrowings of $10.2 million. For the nine months ended September 30, 2021, the primary use of funds was $2.3 million of distributions to our joint venture partner and principal payments under finance leases of $1.0 million.

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Material Cash Requirements

Except for the new ABL Facility as discussed in “Note 8. Debt” and operating leases as discussed in “Note 9. Commitments and Contingencies” to our unaudited condensed consolidated financial statements, there have been no significant changes in our material cash requirements from those disclosed in the Annual Report for the year ended December 31, 2021.

Critical Accounting Estimates

There are no material changes to our critical accounting estimates from those included in the Annual Report for the year ended December 31, 2021.

Recently Issued Accounting Pronouncements

See “Note 1. Basis of Presentation” to our unaudited condensed consolidated financial statements for a discussion of the accounting pronouncements we recently adopted and the accounting pronouncements recently issued by the Financial Accounting Standards Board.

Emerging Growth Company and Smaller Reporting Company Status

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). We will remain an emerging growth company until the earlier of (i) the last day of our fiscal year (a) following the fifth anniversary of the completion of our initial public offering, (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700.0 million as of the last business day of our most recently completed second fiscal quarter, and (ii) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. Additionally, we are also a “smaller reporting company” as defined by Section 12b-2 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), meaning that we are not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent company that is not a smaller reporting company and have a public float of less than $250 million. As an emerging growth company and a smaller reporting company, we may take advantage of specified reduced reporting and other burdens that are otherwise applicable generally to public companies that do not qualify for those classifications.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects” and similar references to future periods, or by the inclusion of forecasts or projections. Examples of forward-looking statements include, but are not limited to, statements we make regarding the outlook for our future business and financial performance, including the effects of the COVID-19 pandemic thereon, such as those contained in this Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, our actual results may differ materially from those contemplated by the forward-looking statements. Important factors that could cause our actual results to differ materially from those in the forward-looking statements include regional, national or global political, economic, business, competitive, market and regulatory conditions and the following:

the risks and uncertainties relating to public health crises, including the COVID-19 pandemic and its continuing impact on market conditions and our business, financial condition, results of operations, cash flows and stock price;

declines in the level of oil and natural gas E&P activity in Canada, the United States and internationally;

oil and natural gas price fluctuations;

significant competition for our products and services that results in pricing pressures, reduced sales, or reduced market share;

inability to successfully implement our strategy of increasing sales of products and services into the United States;

loss of significant customers;

our inability to successfully develop and implement new technologies, products and services;

our inability to protect and maintain critical intellectual property assets;

losses and liabilities from uninsured or underinsured business activities;

28

the financial health of our customers including their ability to pay for products or services provided;

our failure to identify and consummate potential acquisitions;

our inability to integrate or realize the expected benefits from acquisitions;

loss of any of our key suppliers or significant disruptions negatively impacting our supply chain;

risks in attracting and retaining qualified employees and key personnel or related to labor cost inflation;

risks resulting from the operations of our joint venture arrangement;

currency exchange rate fluctuations;

impact of severe weather conditions;

restrictions on the availability of our customers to obtain water essential to the drilling and hydraulic fracturing processes;

changes in legislation or regulation governing the oil and natural gas industry, including restrictions on emissions of greenhouse gases;

our inability to meet regulatory requirements for use of certain chemicals by our tracer diagnostics business; 

change in trade policy, including the impact of additional tariffs;

our inability to accurately predict customer demand, which may result in us holding excess or obsolete inventory;

failure to comply with or changes to federal, state and local and non-U.S. laws and other regulations, including anti-corruption and environmental regulations, guidelines and regulations for the use of explosives, the CARES Act and the U.S. Tax Cuts and Jobs Act of 2017;

loss of our information and computer systems;

system interruptions or failures, including complications with our enterprise resource planning system, cyber security breaches, identity theft or other disruptions that could compromise our information;

impairment in the carrying value of long-lived assets and goodwill;

our failure to establish and maintain effective internal control over financial reporting;

risks and uncertainties relating to cost reduction efforts or savings we may realize from such cost reduction efforts;

the reduction in our ABL Facility borrowing base or our inability to comply with the covenants in our debt agreements; and

our inability to obtain sufficient liquidity on reasonable terms, or at all.

For the reasons described above, as well as factors identified in “Item 1A. Risk Factors” in this Quarterly Report and the section of the Annual Report entitled “Risk Factors,” we caution you against relying on any forward-looking statements. Any forward-looking statement made by us in this Quarterly Report speaks only as of the date on which we make it. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

29

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

For our quantitative and qualitative disclosures about market risk, see Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” in our Annual Report for the year ended December 31, 2021. Except as set forth below, our exposure to market risk has not changed materially since December 31, 2021.

Interest Rate Risk

We were primarily exposed to interest rate risk through our Prior Senior Secured Credit Facility and the Prior Amended Credit Agreement, which were terminated concurrent with our entry on May 3, 2022 into the replacement ABL Facility. As of December 31, 2021, we had no outstanding indebtedness under our Prior Senior Secured Credit Facility.

Borrowings under the ABL Facility may be made in U.S. dollars with interest calculated using either the “ABR”, the “Adjusted Daily Simple SOFR” or the “Adjusted Term SOFR Rate”, and in Canadian dollars with interest calculated using the “Canadian Prime Rate” or the “CDOR Rate” (each as defined in the Credit Agreement). Borrowings bear interest at such benchmarks plus a margin that varies depending on our leverage ratio as follows: (i) for ABR based loans, between 1.40% and 2.40%, and (ii) for Adjusted Daily Simple SOFR, Adjusted Term SOFR Rate, Canadian Prime Rate, and CDOR Rate, between 2.40% and 3.40%. We must also pay a monthly commitment fee of 0.25% to 0.50% per year, depending on unused commitments. At September 30, 2022, we had no outstanding indebtedness under our ABL Facility.

Item 4.  Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, including our Chief Executive Officer and Chief Financial Officer, which positions are held by the same person as of the filing of this Form 10-Q, conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2022. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer, concluded that, as of September 30, 2022, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes to our internal control over financial reporting that occurred during the quarter ended September 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

30

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

See “Note 9. Commitments and Contingencies” of our unaudited condensed consolidated financial statements for further information regarding our legal proceedings.

Item 1A.  Risk Factors

There have been no material changes from the risk factors disclosed in our Annual Report for the year ended December 31, 2021, except as set forth below.

Our outstanding indebtedness could adversely affect our financial condition and our ability to operate our business, and we may not be able to generate sufficient cash flows to meet our debt service obligations.

As of April 30, 2022, our total outstanding indebtedness was $8.7 million, of which no amount was outstanding under our Prior Senior Secured Credit Facility. Our Prior Senior Secured Credit Facility was terminated on May 3, 2022 and replaced with our ABL Facility. As of September 30, 2022, our total outstanding indebtedness was $7.8 million, of which no amount was outstanding under our ABL Facility. Under our ABL Facility, which is secured by substantially all of our assets, we may borrow up to the lesser of a borrowing base and $35.0 million, with sublimits for loans in Canadian dollars, letters of credit and swingline loans. The borrowing base is determined based on 85% of eligible accounts receivable, 85% of the net orderly liquidation value of eligible inventory, and 100% of cash in a specified pledged account, subject to change in the administrative agent’s permitted discretion, and does not include assets of Repeat Precision. The ABL Facility authorizes, but does not require, the administrative agent to make over-advances, notwithstanding a borrowing base deficiency, of up to 10% of aggregate commitments (but never to exceed the lenders’ aggregate commitments). Our ABL Facility is subject to interest rate fallback provisions applicable in the event that the SOFR-based or other interest rate benchmarks provided thereunder become unavailable or unrepresentative of lenders’ cost of funds. There can be no assurance that our ABL Facility will be adequate in size to satisfy our liquidity needs, or that adverse energy market developments impacting our customers will not constrain our liquidity by reducing the size of our borrowing base.

Our outstanding indebtedness, and any additional indebtedness we incur, may have important consequences for us, including, without limitation, that: we may be required to use a substantial portion of our cash flow to pay the principal of and interest on our indebtedness; our indebtedness and leverage may increase our vulnerability to adverse changes in general economic and industry conditions, as well as to competitive pressures; our ability to obtain additional financing for working capital, capital expenditures, acquisitions and for general corporate and other purposes may be limited; our indebtedness may expose us to the risk of increased interest rates because our borrowings are at variable rates of interest (including SOFR); our indebtedness may prevent us from taking advantage of business opportunities as they arise or successfully carrying out our plans to expand our business; and our flexibility in planning for, or reacting to, changes in our business and our industry may be limited by covenants in our indebtedness documents.

Under the terms of the credit agreement governing our ABL Facility, we are required to comply with specified financial and operating covenants, which may limit our ability to operate our business as we otherwise might operate it. The obligations under our ABL Facility may be accelerated upon the occurrence of an event of default, which includes customary events of default including, without limitation, payment defaults, cross-defaults to certain material indebtedness, covenant defaults, material inaccuracy of representations and warranties, bankruptcy events, material judgments, certain ERISA-related events, material defects with respect to guarantees and collateral, invalidity of subordination provisions and change of control. If not cured, an event of default could result in any amounts outstanding, including any accrued interest and unpaid fees, becoming immediately due and payable, which would require us to, among other things: seek additional financing in the debt or equity markets, refinance or restructure all or a portion of our indebtedness, sell selected assets and/or reduce or delay planned capital or operating expenditures. Such measures might not be sufficient to enable us to service our debt and any such financing or refinancing might not be available on economically favorable terms or at all. If we are not able to generate sufficient cash flows to meet our debt service obligations or are forced to take additional measures to be able to service our indebtedness, it could have a material adverse effect on our business, financial condition and results of operations.

We and our subsidiaries may be able to incur substantial indebtedness.

We may incur substantial additional indebtedness in the future. Although the terms of the agreement governing our ABL Facility contains restrictions on our ability to incur additional indebtedness, these restrictions are subject to a number of important exceptions, and indebtedness incurred in compliance with these restrictions could be substantial. If we and our subsidiaries incur substantial additional indebtedness, the related risks to our financial condition could increase.

31

Restrictive covenants in the agreement governing our ABL Facility may restrict our ability to pursue our business strategies.

The agreement governing our ABL Facility contains a number of restrictive covenants that impose significant operating and financial restrictions on us and may limit our ability to engage in acts that may be in our long-term best interests. These include covenants restricting, among other things, our ability to: incur additional indebtedness; grant liens; enter into burdensome agreements with negative pledge clauses or restrictions on subsidiary distributions; make certain investments; pay dividends; make payments in respect of junior lien or subordinated debt; make acquisitions; consolidate, amalgamate, merge, liquidate, divide or dissolve; sell, transfer or otherwise dispose of assets; make certain organizational changes (including with respect to organizational documents and changes in fiscal year); engage in sale-leaseback transactions; engage in transactions with affiliates; enter into operating leases; enter into hedging arrangements; enter into certain leasehold arrangements and arrangements with respect to inventory and equipment; and materially alter our business.

Our ABL Facility requires, as a condition to borrowing, that our available cash on hand after borrowings does not exceed $10.0 million. The ABL Facility also contains a financial covenant requiring us to maintain a fixed charge coverage ratio of at least 1.0 to 1.0 for the applicable 12 month period whenever liquidity under our ABL Facility is less than 20% of revolving commitments. Our ability to satisfy the fixed charge coverage ratio can be affected by events beyond our control and we cannot assure you that we will be able to satisfy these covenants. Our inability to satisfy the fixed charge coverage ratio could render us unable to borrow under the ABL Facility at the time when liquidity is most needed.

A breach of any covenant or restriction contained in the agreement governing our ABL Facility could result in an event of default thereunder. If any such event of default occurs, the lenders under the facility may elect (after the expiration of any applicable notice or grace periods) to declare all outstanding borrowings, together with accrued and unpaid interest and other amounts payable thereunder, to be immediately due and payable. The lenders under our ABL Facility also have the right, upon an event of default thereunder, to terminate any commitments they have to provide further borrowings. Further, following an event of default under the agreement governing our ABL Facility, the lenders under the facility will have the right to proceed against the collateral granted to them to secure that debt. If the debt under our ABL Facility was to be accelerated, our assets may not be sufficient to repay in full that debt or any other debt that may become due as a result of that acceleration.

Volatility and weakness in bank and capital markets may adversely affect credit availability and related financing costs for us.

The indebtedness under our ABL Facility matures on May 3, 2027. Our ability to refinance this indebtedness on acceptable terms will be dependent upon a number of factors, including our degree of leverage, the value of our assets, borrowing restrictions which may be imposed by lenders and conditions in the credit markets at the time we refinance. Furthermore, bank and capital markets can experience periods of volatility and disruption. If the disruption in these markets is prolonged, our ability to refinance, and the related cost of refinancing, some or all of our debt could be adversely affected. There is also a risk, during periods of volatile credit markets, that lenders, even those with strong balance sheets and sound lending practices, could fail or refuse to honor their legal commitments and obligations under existing credit commitments, including our ABL Facility. Although we currently can access the bank and capital markets, there is no assurance that such markets will continue to be a reliable source of financing for us. These factors, including the tightening of credit markets, could adversely affect our ability to obtain cost-effective financing. Increased volatility and disruptions in the financial markets also could make it more difficult and more expensive for us to refinance outstanding indebtedness and obtain financing. In addition, the adoption of new statutes and regulations, the implementation of recently enacted laws or new interpretations or the enforcement of older laws and regulations applicable to the financial markets or the financial services industry could result in a reduction in the amount of available credit or an increase in the cost of credit. Disruptions in the financial markets can also adversely affect our lenders, insurers, customers and other counterparties. Perceptions of us and the industries in which we or our customers operate, including perceptions of our environmental, social and governance attributes may result in pressure on banks and other financial institutions to reduce or avoid lending, which could further reduce the available pool of financing for us and increase the cost of financing to us. Any of these results could have a material adverse effect on our business, financial condition and results of operations.

‎

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Item 6.  Exhibits

Exhibit
No.		Description
	10.1	Amended and Restated Employment Agreement between NCS Multistage Holdings, Inc. and Ryan Hummer, dated as of July 27, 2022 (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on August 1, 2022).
	10.2	Employment Agreement between NCS Multistage Holdings, Inc. and Michael Morrison, dated as of October 6, 2022 (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on October 13, 2022).
*	31.1	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
**	32.1	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
***	101.INS	XBRL Instance Document
***	101.SCH	XBRL Taxonomy Extension Schema
***	101.CAL	XBRL Taxonomy Extension Calculation Linkbase
***	101.DEF	XBRL Taxonomy Extension Definition Linkbase
***	101.LAB	XBRL Taxonomy Extension Label Linkbase
***	101.PRE	XBRL Taxonomy Extension Presentation Linkbase
***	104	Cover Page Interactive Data File (formatted in iXBRL and contained in Exhibit 101)
*	Filed herewith.
**	Furnished herewith.
***	Submitted electronically with this Report.

 
‎

33

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.

Date: November 1, 2022	NCS Multistage Holdings, Inc.
	By:	/s/ Ryan Hummer
		Ryan Hummer
		Chief Executive Officer
		(Principal Financial Officer and Authorized
		Signatory)

34

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
PURSUANT TO RULE 13A-14(A) AND RULE 15D-14(A)  
OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Ryan Hummer, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q (this “report”) of NCS Multistage Holdings, Inc. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. I  am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)  and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  November1, 2022

/s/ Ryan Hummer

Ryan Hummer

Chief Executive Officer and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION OFCHIEF EXECUTIVE OFFICER AND

CHIEF FINANCIAL OFFICER UNDER SECTION 906 OF THE  
SARBANES OXLEY ACT OF 2002, 18 U.S.C. § 1350

In connection with the Quarterly Report of NCS Multistage Holdings, Inc. (the “Company”) on Form 10-Q for the period endedSeptember 30, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ryan Hummer, Chief Executive Officer, Chief Financial Officer and Director of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002, that, to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

November1, 2022	/s/Ryan Hummer
	Ryan Hummer
	ChiefExecutiveOfficerand Chief Financial Officer

XML

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2022	Oct. 28, 2022
Document And Entity Information [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2022
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Document Transition Report	false
Entity File Number	001-38071
Entity Registrant Name	NCS Multistage Holdings, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	46-1527455
Entity Address, Address Line One	19350 State Highway 249
Entity Address, Address Line Two	Suite 600
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77070
City Area Code	281
Local Phone Number	453-2222
Title of 12(b) Security	Common Stock, $0.01 par value
Trading Symbol	NCSM
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Shell Company	false
Entity Central Index Key	0001692427
Amendment Flag	false
Entity Common Stock, Shares Outstanding (in shares)		2,408,474

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Current assets
Cash and cash equivalents	$ 9,877	$ 22,168
Accounts receivable—trade, net	34,393	24,392
Inventories, net	34,115	33,917
Prepaid expenses and other current assets	2,749	3,290
Other current receivables	4,304	4,726
Total current assets	85,438	88,493
Noncurrent assets
Property and equipment, net	23,363	24,708
Goodwill	15,222	15,222
Identifiable intangibles, net	5,243	5,744
Operating lease assets	4,617	4,809
Deposits and other assets	2,833	3,113
Deferred income taxes, net	432	236
Total noncurrent assets	51,710	53,832
Total assets	137,148	142,325
Current liabilities
Accounts payable—trade	8,641	7,502
Accrued expenses	5,965	6,323
Income taxes payable	369	294
Operating lease liabilities	1,295	1,556
Current maturities of long-term debt	1,438	1,483
Other current liabilities	2,355	2,660
Total current liabilities	20,063	19,818
Noncurrent liabilities
Long-term debt, less current maturities	6,391	6,335
Operating lease liabilities, long-term	3,780	3,779
Other long-term liabilities	1,193	1,612
Deferred income taxes, net	297	114
Total noncurrent liabilities	11,661	11,840
Total liabilities	31,724	31,658
Commitments and contingencies (Note 9)
Stockholders' equity
Preferred stock, $0.01 par value, 10,000,000 shares authorized, no shares issued and outstanding at September 30, 2022 and December 31, 2021
Common stock, $0.01 par value, 11,250,000 shares authorized, 2,434,722 shares issued and 2,408,413 shares outstanding at September 30, 2022 and 2,397,766 shares issued and 2,380,374 shares outstanding at December 31, 2021	24	24
Additional paid-in capital	439,522	437,022
Accumulated other comprehensive loss	(86,212)	(82,094)
Retained deficit	(264,443)	(261,362)
Treasury stock, at cost, 26,309 shares at September 30, 2022 and 17,392 shares at December 31, 2021	(1,388)	(1,006)
Total stockholders’ equity	87,503	92,584
Non-controlling interest	17,921	18,083
Total equity	105,424	110,667
Total liabilities and stockholders' equity	$ 137,148	$ 142,325

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares	Sep. 30, 2022	Dec. 31, 2021
CONDENSED CONSOLIDATED BALANCE SHEETS [Abstract]
Preferred stock par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	11,250,000	11,250,000
Common stock, shares issued (in shares)	2,434,722	2,397,766
Common stock, shares outstanding (in shares)	2,408,413	2,380,374
Treasury stock, shares (in shares)	26,309	17,392

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Revenues
Revenues	$ 48,870	$ 32,411	$ 115,446	$ 82,386
Cost of sales
Cost of sales, exclusive of depreciation	28,394	17,636	71,120	49,841
Selling, general and administrative expenses	15,379	10,982	45,148	35,589
Depreciation	882	985	2,742	2,857
Amortization	168	168	502	502
Income (loss) from operations	4,047	2,640	(4,066)	(6,403)
Other income (expense)
Interest expense, net	(204)	(163)	(794)	(529)
Other income, net	564	176	1,556	1,046
Foreign currency exchange (loss) gain	(563)	(236)	(562)	156
Total other (expense) income	(203)	(223)	200	673
Income (loss) before income tax	3,844	2,417	(3,866)	(5,730)
Income tax (benefit) expense	(120)	(809)	(623)	45
Net income (loss)	3,964	3,226	(3,243)	(5,775)
Net income (loss) attributable to non-controlling interest	29	430	(162)	621
Net income (loss) attributable to NCS Multistage Holdings, Inc.	$ 3,935	$ 2,796	$ (3,081)	$ (6,396)
Earnings (loss) per common share
Basic earnings (loss) per common share attributable to NCS Multistage Holdings, Inc.	$ 1.61	$ 1.16	$ (1.27)	$ (2.67)
Diluted earnings (loss) per common share attributable to NCS Multistage Holdings, Inc.	$ 1.58	$ 1.14	$ (1.27)	$ (2.67)
Weighted average common shares outstanding
Basic	2,438	2,401	2,430	2,394
Diluted	2,488	2,445	2,430	2,394
Product sales [Member]
Revenues
Revenues	$ 33,965	$ 21,229	$ 79,549	$ 57,167
Cost of sales
Cost of sales, exclusive of depreciation	20,754	12,898	51,910	37,487
Services [Member]
Revenues
Revenues	14,905	11,182	35,897	25,219
Cost of sales
Cost of sales, exclusive of depreciation	$ 7,640	$ 4,738	$ 19,210	$ 12,354

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) [Abstract]
Net income (loss)	$ 3,964	$ 3,226	$ (3,243)	$ (5,775)
Foreign currency translation adjustments, net of tax of $0	(3,359)	(1,007)	(4,118)	(184)
Comprehensive income (loss)	605	2,219	(7,361)	(5,959)
Less: Comprehensive income (loss) attributable to non-controlling interest	29	430	(162)	621
Comprehensive income (loss) attributable to NCS Multistage Holdings, Inc.	$ 576	$ 1,789	$ (7,199)	$ (6,580)

XML

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parentheticals) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) [Abstract]
Foreign currency translation adjustments, tax	$ 0	$ 0	$ 0	$ 0

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Other Comprehensive Loss [Member]	Retained Deficit [Member]	Treasury Stock [Member]	Non-controlling Interest [Member]	Total
Beginning balance at Dec. 31, 2020		$ 24	$ 432,801	$ (81,780)	$ (256,628)	$ (809)	$ 19,878	$ 113,486
Beginning balance, shares at Dec. 31, 2020		2,371,992				(12,074)
Share-based compensation			1,170					1,170
Net income (loss)					(3,397)		(60)	(3,457)
Distribution to noncontrolling interest							(1,250)	(1,250)
Vesting of restricted stock
Vesting of restricted stock, shares		24,050
Shares withheld						$ (191)		(191)
Shares withheld, shares						(5,089)
Currency translation adjustment				293				293
Ending balance at Mar. 31, 2021		$ 24	433,971	(81,487)	(260,025)	$ (1,000)	18,568	110,051
Ending balance, shares at Mar. 31, 2021		2,396,042				(17,163)
Beginning balance at Dec. 31, 2020		$ 24	432,801	(81,780)	(256,628)	$ (809)	19,878	113,486
Beginning balance, shares at Dec. 31, 2020		2,371,992				(12,074)
Net income (loss)								(5,775)
Currency translation adjustment								(184)
Ending balance at Sep. 30, 2021		$ 24	436,040	(81,964)	(263,024)	$ (1,006)	18,249	108,319
Ending balance, shares at Sep. 30, 2021		2,397,735				(17,382)
Beginning balance at Mar. 31, 2021		$ 24	433,971	(81,487)	(260,025)	$ (1,000)	18,568	110,051
Beginning balance, shares at Mar. 31, 2021		2,396,042				(17,163)
Share-based compensation			1,051					1,051
Net income (loss)					(5,795)		251	(5,544)
Distribution to noncontrolling interest							(500)	(500)
Vesting of restricted stock
Vesting of restricted stock, shares		1,693
Shares withheld						$ (6)		(6)
Shares withheld, shares						(219)
Currency translation adjustment				530				530
Ending balance at Jun. 30, 2021		$ 24	435,022	(80,957)	(265,820)	$ (1,006)	18,319	105,582
Ending balance, shares at Jun. 30, 2021		2,397,735				(17,382)
Share-based compensation			1,018					1,018
Net income (loss)					2,796		430	3,226
Distribution to noncontrolling interest							(500)	(500)
Currency translation adjustment				(1,007)				(1,007)
Ending balance at Sep. 30, 2021		$ 24	436,040	(81,964)	(263,024)	$ (1,006)	18,249	108,319
Ending balance, shares at Sep. 30, 2021		2,397,735				(17,382)
Beginning balance at Dec. 31, 2021		$ 24	437,022	(82,094)	(261,362)	$ (1,006)	18,083	110,667
Beginning balance, shares at Dec. 31, 2021		2,397,766				(17,392)
Share-based compensation			805					805
Net income (loss)					(1,535)		(194)	(1,729)
Vesting of restricted stock
Vesting of restricted stock, shares		34,066
Shares withheld						$ (372)		(372)
Shares withheld, shares						(8,694)
Currency translation adjustment				541				541
Ending balance at Mar. 31, 2022		$ 24	437,827	(81,553)	(262,897)	$ (1,378)	17,889	109,912
Ending balance, shares at Mar. 31, 2022		2,431,832				(26,086)
Beginning balance at Dec. 31, 2021		$ 24	437,022	(82,094)	(261,362)	$ (1,006)	18,083	110,667
Beginning balance, shares at Dec. 31, 2021		2,397,766				(17,392)
Net income (loss)								(3,243)
Currency translation adjustment								(4,118)
Ending balance at Sep. 30, 2022		$ 24	439,522	(86,212)	(264,443)	$ (1,388)	17,921	105,424
Ending balance, shares at Sep. 30, 2022		2,434,722				(26,309)
Beginning balance at Mar. 31, 2022		$ 24	437,827	(81,553)	(262,897)	$ (1,378)	17,889	109,912
Beginning balance, shares at Mar. 31, 2022		2,431,832				(26,086)
Share-based compensation			841					841
Net income (loss)					(5,481)		3	(5,478)
Vesting of restricted stock
Vesting of restricted stock, shares		2,723
Shares withheld						$ (8)		(8)
Shares withheld, shares						(173)
Currency translation adjustment				(1,300)				(1,300)
Ending balance at Jun. 30, 2022		$ 24	438,668	(82,853)	(268,378)	$ (1,386)	17,892	103,967
Ending balance, shares at Jun. 30, 2022		2,434,555				(26,259)
Share-based compensation			854					854
Net income (loss)					3,935		29	3,964
Vesting of restricted stock
Vesting of restricted stock, shares		167
Shares withheld						$ (2)		(2)
Shares withheld, shares						(50)
Currency translation adjustment				(3,359)				(3,359)
Ending balance at Sep. 30, 2022		$ 24	$ 439,522	$ (86,212)	$ (264,443)	$ (1,388)	$ 17,921	$ 105,424
Ending balance, shares at Sep. 30, 2022		2,434,722				(26,309)

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Cash flows from operating activities
Net loss	$ (3,243)	$ (5,775)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization	3,244	3,359
Amortization of deferred loan costs	180	211
Write-off of deferred loan costs	196
Share-based compensation	4,490	5,208
Provision for inventory obsolescence	1,885	1,715
Deferred income tax expense	109	79
Gain on sale of property and equipment	(339)	(310)
Provision for doubtful accounts	(60)	(129)
Proceeds from note receivable	474	223
Changes in operating assets and liabilities:
Accounts receivable—trade	(12,534)	(761)
Inventories, net	(4,013)	(613)
Prepaid expenses and other assets	1,868	39
Accounts payable—trade	2,274	902
Accrued expenses	(161)	2,606
Other liabilities	(2,509)	(2,706)
Income taxes receivable/payable	(897)	2,673
Net cash (used in) provided by operating activities	(9,036)	6,721
Cash flows from investing activities
Purchases of property and equipment	(768)	(342)
Purchase and development of software and technology	(78)	(324)
Proceeds from sales of property and equipment	406	369
Net cash used in investing activities	(440)	(297)
Cash flows from financing activities
Payments on finance leases	(1,090)	(958)
Line of credit borrowings	10,214	360
Payments of line of credit borrowings	(10,189)	(360)
Treasury shares withheld	(382)	(197)
Distribution to noncontrolling interest		(2,250)
Payment of deferred loan cost related to ABL facility	(940)
Net cash used in financing activities	(2,387)	(3,405)
Effect of exchange rate changes on cash and cash equivalents	(428)	(120)
Net change in cash and cash equivalents	(12,291)	2,899
Cash and cash equivalents beginning of period	22,168	15,545
Cash and cash equivalents end of period	9,877	18,444
Noncash investing and financing activities
Leased assets obtained in exchange for new finance lease liabilities	1,477	3,711
Leased assets obtained in exchange for new operating lease liabilities	$ 1,205	$ 1,736

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Basis of Presentation	9 Months Ended
	Sep. 30, 2022
Basis of Presentation [Abstract]
Basis of Presentation	Note 1.  Basis of Presentation Nature of Business NCS Multistage Holdings, Inc., a Delaware corporation, through its wholly owned subsidiaries and subsidiaries for which it has a controlling voting interest (collectively referred to as the “Company,” “NCS,” “we,” “our” and “us”), is primarily engaged in providing engineered products and support services for oil and natural gas well construction, well completions and field development strategies. We offer our products and services primarily to exploration and production companies for use in onshore and offshore wells. We operate through service facilities principally located in Houston and Odessa, Texas; Tulsa, Oklahoma; Billings, Montana; Morgantown, West Virginia; Calgary, Red Deer, Grande Prairie and Estevan, Canada; Neuquén, Argentina and Stavanger, Norway. Basis of Presentation Our accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities Exchange Act of 1934, as amended, issued by the Securities Exchange Commission (“SEC”) and have not been audited by our independent registered public accounting firm. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with our financial statements and related notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021 (“Annual Report”). We consolidate Repeat Precision, LLC (“Repeat Precision”), a 50% owned entity, because NCS has a controlling voting interest. The other party’s ownership is presented separately as a non-controlling interest. In the opinion of management, these condensed consolidated financial statements reflect all normal, recurring adjustments necessary for a fair statement of the interim periods presented. The results of operations for interim periods are not necessarily indicative of those for a full year. All intercompany accounts and transactions have been eliminated for purposes of preparing these condensed consolidated financial statements. Significant Accounting Policies Our significant accounting policies are described in “Note 2. Summary of Significant Accounting Policies” in our Annual Report. Recent Accounting Pronouncements Pronouncement Adopted in 2022 In November 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance, to increase transparency of disclosure regarding government assistance including the types of assistance, an entity’s method of accounting for the assistance, and the effect of the assistance on an entity’s financial statements. This standard became effective for fiscal years beginning after December 15, 2021. We adopted ASU No. 2021-10 on a prospective basis on January 1, 2022, with no material impact on our condensed consolidated financial statements. Pronouncement Not Yet Effective In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU introduces a new impairment model that is based on expected credit losses rather than incurred credit losses for financial instruments, including trade accounts receivable. It requires an entity to measure expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. The new standard was to become effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. In November 2019, the FASB issued ASU No. 2019-10, which deferred the effective dates for certain accounting guidance. The effective date for ASU No. 2016-13 remained the same for public business entities that are SEC filers, except for entities who are deemed smaller reporting companies (“SRC”). The effective date for all other entities, including SRCs, begins during the first interim period of fiscal years beginning after December 15, 2022. NCS qualifies as an SRC. We are currently evaluating the impact of the adoption of this guidance.

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Revenues

9 Months Ended

Sep. 30, 2022

Revenues [Abstract]

Revenues

Note 2.  Revenues

Disaggregation of Revenue

We sell our products and services primarily in North America and in selected international markets. Revenue by geography is attributed based on the current billing address of the customer. The following table depicts the disaggregation of revenue by geographic region (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
United States
Product sales	$	8,217	$	5,324	$	24,551	$	18,762
Services		3,294		2,715		8,171		6,328
Total United States		11,511		8,039		32,722		25,090
Canada
Product sales		25,748		15,678		54,455		36,877
Services		9,011		6,423		21,681		14,653
Total Canada		34,759		22,101		76,136		51,530
Other Countries
Product sales		—		227		543		1,528
Services		2,600		2,044		6,045		4,238
Total Other Countries		2,600		2,271		6,588		5,766
Total
Product sales		33,965		21,229		79,549		57,167
Services		14,905		11,182		35,897		25,219
Total revenues	$	48,870	$	32,411	$	115,446	$	82,386

Contract Balances

If the timing of the delivery of products and provision of services is different from the timing of the customer payments, we recognize either a contract asset (performance precedes contractual due date in connection with estimates of variable consideration) or a contract liability (customer payment precedes performance) on our condensed consolidated balance sheet.

The following table includes the current contract liabilities as of September 30, 2022 and December 31, 2021 (in thousands):

Balance at December 31, 2021	$	71
Additions		1,963
Revenue recognized		(1,983)
Balance at September 30, 2022	$	51

We currently do not have any contract assets or non-current contract liabilities. Our contract liability as of September 30, 2022 and December 31, 2021 is included in current liabilities on our condensed consolidated balance sheets. Our performance obligations for our product and services revenues are satisfied before the customer’s payment; however, prepayments may occasionally be required. Revenue recognized from the contract liability balance was $0.4 million for the three months ended September 30, 2022, with no such revenue recognized for the three months ended September 30, 2021, and $2.0 million and $0.8 million for the nine months ended September 30, 2022 and 2021, respectively.

Practical Expedient

We do not disclose the value of unsatisfied performance obligations when the related contract has a duration of one year or less. We recognize revenue equal to what we have the right to invoice when that amount corresponds directly with the value to the customer of our performance to date.

 

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Inventories, Net

9 Months Ended

Sep. 30, 2022

Inventories, Net [Abstract]

Inventories, Net

Note 3.  Inventories, net

Inventories consist of the following as of September 30, 2022 and December 31, 2021 (in thousands):

	September 30,		December 31,
	2022		2021
Raw materials	$	1,923	$	1,844
Work in process		280		14
Finished goods		31,912		32,059
Total inventories, net	$	34,115	$	33,917

 

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Other Current Receivables

9 Months Ended

Sep. 30, 2022

Other Current Receivables [Abstract]

Other Current Receivables

Note 4.  Other Current Receivables

Other current receivables consist of the following as of September 30, 2022 and December 31, 2021 (in thousands):

	September 30,		December 31,
	2022		2021
Current income tax receivables	$	2,937	$	2,226
Employee receivables		284		238
Other receivables		1,083		2,262
Total other receivables, net	$	4,304	$	4,726

Employee receivables relate primarily to amounts paid by us for foreign withholding tax paid on behalf of employees working on international assignments, which is expected to be reimbursed to us by the employees when refunded as foreign tax credits on home-country tax returns. The other receivables balance as of September 30, 2022 and December 31, 2021 includes the U.S. employee retention credit (“ERC”) claims we have filed but for which we have not yet received renumeration. See “Note 9. Commitments and Contingencies” for additional information. The other receivables balance at December 31, 2021 includes $0.7 million associated with our technical services and assistance agreement with Special Oilfield Services Co., LLC, which is more fully described in our Annual Report. This receivable was collected in May 2022.

 

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Property and Equipment

9 Months Ended

Sep. 30, 2022

Property and Equipment [Abstract]

Property and Equipment

Note 5.  Property and Equipment

Property and equipment by major asset class consist of the following as of September 30, 2022 and December 31, 2021 (in thousands):

	September 30,		December 31,
	2022		2021
Land	$	1,562	$	1,701
Building and improvements		7,203		8,099
Machinery and equipment		17,864		18,152
Computers and software		2,026		2,256
Furniture and fixtures		706		1,037
Vehicles		257		313
Right of use assets - finance leases		10,978		10,228
Service equipment		57		244
		40,653		42,030
Less: Accumulated depreciation and amortization		(17,884)		(17,752)
		22,769		24,278
Construction in progress		594		430
Property and equipment, net	$	23,363	$	24,708

The following table presents the depreciation expense associated with the following income statement line items for the three and nine months ended September 30, 2022 and 2021 (in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Cost of sales
Cost of product sales	$	344	$	349	$	1,068	$	1,050
Cost of services		118		168		414		540
Selling, general and administrative expenses		420		468		1,260		1,267
Total depreciation	$	882	$	985	$	2,742	$	2,857

We evaluate our property and equipment for impairment whenever changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Despite general volatility of the U.S. equities markets, we determined there were no triggering events that indicated potential impairment of our property and equipment for the three and nine months ended September 30, 2022 and 2021, respectively, and accordingly no impairment loss was recorded.

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Goodwill and Identifiable Intangibles

9 Months Ended

Sep. 30, 2022

Goodwill and Identifiable Intangibles [Abstract]

Goodwill and Identifiable Intangibles

Note 6.  Goodwill and Identifiable Intangibles

The carrying amount of goodwill is summarized as follows (in thousands):

	September 30,		December 31,
	2022		2021
Gross value	$	177,162	$	177,162
Accumulated impairment		(161,940)		(161,940)
Net	$	15,222	$	15,222

We perform an annual impairment analysis of goodwill as of December 31, or whenever there is a triggering event that indicates an impairment loss may have been incurred. As of September 30, 2022 and 2021, we did not identify any triggering events that would indicate potential impairment of goodwill at Repeat Precision, our only reportable unit with goodwill, which totaled $15.2 million. Therefore, no impairment has been recorded for the three and nine months ended September 30, 2022 and 2021, respectively.

Identifiable intangibles by major asset class consist of the following (in thousands):

		September 30, 2022
	Estimated	Gross
	Useful	Carrying		Accumulated		Net
	Lives (Years)	Amount		Amortization		Balance
Technology	1 - 20	$	3,958	$	(540)	$	3,418
Customer relationships	10		4,100		(2,323)		1,777
Total amortizable intangible assets		$	8,058	$	(2,863)	$	5,195
Technology - not subject to amortization	Indefinite		48		—		48
Total identifiable intangibles		$	8,106	$	(2,863)	$	5,243

		December 31, 2021
	Estimated	Gross
	Useful	Carrying		Accumulated		Net
	Lives (Years)	Amount		Amortization		Balance
Technology	1 - 20	$	3,958	$	(346)	$	3,612
Customer relationships	10		4,100		(2,016)		2,084
Total amortizable intangible assets		$	8,058	$	(2,362)	$	5,696
Technology - not subject to amortization	Indefinite		48		—		48
Total identifiable intangibles		$	8,106	$	(2,362)	$	5,744

Total amortization expense, which is associated with selling, general and administrative expenses on the condensed consolidated statements of operations, was $0.2 million for each of the three months ended September 30, 2022 and 2021 and $0.5 million for each of the nine months ended September 30, 2022 and 2021, respectively.

Identifiable intangibles are tested for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. There were no indicators of impairment identified during the three and nine months ended September 30, 2022 or 2021. Therefore, we did not record any impairment charges related to our identifiable intangibles for the three or nine months ended September 30, 2022 and 2021.

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Accrued Expenses

9 Months Ended

Sep. 30, 2022

Accrued Expenses [Abstract]

Accrued Expenses

Note 7.  Accrued Expenses

Accrued expenses consist of the following as of September 30, 2022 and December 31, 2021 (in thousands):

	September 30,		December 31,
	2022		2021
Accrued payroll and bonus	$	3,905	$	4,208
Property and franchise taxes accrual		421		550
Accrued other miscellaneous liabilities		1,639		1,565
Total accrued expenses	$	5,965	$	6,323

We paid our annual incentive bonus totaling $3.2 million during the first quarter of 2022.

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Debt

9 Months Ended

Sep. 30, 2022

Debt [Abstract]

Debt

Note 8.  Debt

Our long-term debt consists of the following as of September 30, 2022 and December 31, 2021 (in thousands):

	September 30,		December 31,
	2022		2021
Prior Senior Secured Credit Facility	$	—	$	—
ABL Facility		—		—
Repeat Precision Promissory Note		25		—
Finance leases		7,804		7,818
Total debt		7,829		7,818
Less: current portion		(1,438)		(1,483)
Long-term debt	$	6,391	$	6,335

The estimated fair value of total debt as of September 30, 2022 and December 31, 2021 was $7.1 million and $7.5 million, respectively. At September 30, 2022, the fair value of the Repeat Precision Promissory Note (as defined below) approximated the carrying value due to a variable interest rate and the ability to repay the note at any time. The fair value of the finance leases was estimated using Level 2 inputs by calculating the sum of the discounted future interest and principal payments at our incremental borrowing rate through the date of maturity.

Below is a description of our financing arrangements.

Prior Senior Secured Credit Facility

On May 1, 2019, we entered into a Second Amended and Restated Credit Agreement (the “2019 Credit Agreement”) by and among NCS Multistage Holdings, Inc. (“NCSH”) with Pioneer Investment, Inc., as U.S. borrower (“Pioneer”), NCS Multistage Inc., as Canadian borrower (“NCS Canada”; together with Pioneer, the “Borrowers”), Pioneer Intermediate, Inc. (together with NCSH, the “Parent Guarantors”), the lenders party thereto, Wells Fargo Bank, National Association as administrative agent (the “Prior U.S. Agent”) in respect of the U.S. facility provided therein and Wells Fargo Bank, National Association, Canadian Branch, as administrative agent (the “Prior Canadian Agent”) in respect of the Canadian Facility provided therein. The 2019 Credit Agreement amended and restated our then-existing credit agreement in its entirety.

On August 6, 2020, we entered into Amendment No. 1 to the Second Amended and Restated Credit Agreement (the “the 2020 Amendment”; the 2019 Credit Agreement, as amended by the 2020 Amendment, the “Prior Amended Credit Agreement”) with the Borrowers, Pioneer Intermediate, Inc., certain subsidiaries of the Borrowers, the lenders party thereto, the Prior U.S. Agent and the

Prior Canadian Agent. The facility provided pursuant to the Prior Amended Credit Agreement is referred to herein as the “Prior Senior Secured Credit Facility”.

The Prior Senior Secured Credit Facility consisted of a senior secured revolving credit facility in an aggregate principal amount of $25.0 million made available to Pioneer, of which up to $2.5 million was available for letters of credit and up to $2.5 million was available for swingline loans. NCS Canada could borrow under the Prior Senior Secured Credit Facility, subject to a $15.0 million sublimit. Total borrowings available to the Borrowers under the Prior Senior Secured Credit Facility were limited subject to a borrowing base calculated on eligible receivables, which did not include receivables at Repeat Precision. As of December 31, 2021, we had no outstanding indebtedness under the Prior Senior Secured Credit Facility, and we utilized letter of credit commitments of less than $0.1 million.

Borrowings under the Prior Senior Secured Credit Facility could be made in U.S. dollars for Adjusted Base Rate Advances, and in U.S. dollars, Canadian dollars or Euros for Eurocurrency Rate Advances (each as defined in the Prior Amended Credit Agreement). Such advances bore interest at the Adjusted Base Rate or at the Eurocurrency Rate (each as defined in the Prior Amended Credit Agreement) plus an applicable interest margin between 2.75% and 3.75%, depending on our leverage ratio. We incurred interest expense related to the Prior Senior Secured Credit Facility, including commitment fees, of $28 thousand for the three months ended September 30, 2021 and $47 thousand and $0.1 million for the nine months ended September 30, 2022 and 2021, respectively. We incurred no interest expense, including commitment fees, pursuant to the Prior Senior Secured Credit Facility for the three months ended September 30, 2022.

The obligations of the Borrowers under the Prior Senior Secured Credit Facility were guaranteed by the Parent Guarantors, as well as each of the other existing and future direct and indirect restricted subsidiaries of NCS organized under the laws of the United States and Canada (subject to certain exceptions), and were secured by substantially all of the assets of the Parent Guarantors, the Borrowers and such other subsidiary guarantors, in each case, subject to certain exceptions and permitted liens.

We capitalized direct costs of $1.2 million in connection with the Prior Amended Credit Agreement, which were being amortized over the term of the Prior Senior Secured Credit Facility using the straight-line method.

Concurrent with our entry on May 3, 2022, into a replacement asset-based revolving credit facility discussed below, the Prior Senior Secured Credit Facility and the Prior Amended Credit Agreement were terminated. Of the unamortized remaining deferred loan costs associated with the Prior Senior Secured Credit Facility totaling $0.3 million, we charged $0.2 million to interest expense, net during the second quarter of 2022, associated with the members of the lender group who did not continue with the new facility, and deferred $0.1 million, along with new deferred loan costs associated with the replacement facility, to be amortized over the term of the new facility.

ABL Facility

On May 3, 2022, we entered into a new secured asset-based revolving credit facility (the “ABL Facility”) under which credit availability is subject to a borrowing base calculation. The ABL Facility is governed by the Credit Agreement dated as of May 3, 2022, by and between NCSH, Pioneer, NCS Multistage, LLC, NCS Canada, the other loan parties thereto, the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent and as a lender under the facility provided therein (the “Credit Agreement”).

The ABL Facility consists of a revolving credit facility in an aggregate principal amount of $35.0 million made available to borrowers, of which up to $10.0 million may be made in Canadian dollars and $7.5 million may be made available for letters of credit. Total borrowings available to the borrowers under the ABL Facility may be limited subject to a borrowing base calculated on the sum of cash in a specified pledged account, eligible accounts receivable and eligible inventory, provided it does not include credit for the assets of Repeat Precision. Our borrowing base under the ABL Facility at September 30, 2022 was $23.8 million. The ABL Facility will mature on May 3, 2027. As of September 30, 2022, we had no outstanding indebtedness under the ABL Facility.

Borrowings under the ABL Facility may be made in U.S. dollars with interest calculated using either the “ABR”, the “Adjusted Daily Simple SOFR” or the “Adjusted Term SOFR Rate”, and in Canadian dollars with interest calculated using the “Canadian Prime Rate” or the “CDOR Rate” (each as defined in the Credit Agreement). Borrowings bear interest plus a margin that varies depending on our leverage ratio as follows: (i) for ABR based loans, between 1.40% and 2.40%, and (ii) for Adjusted Daily Simple SOFR, Adjusted Term SOFR Rate, Canadian Prime Rate, and CDOR Rate, between 2.40% and 3.40%. We must also pay a monthly commitment fee of 0.25% to 0.50% per year, based on unused commitments. The applicable interest rate at September 30, 2022 was 5.4%. We incurred

interest expense related to the ABL Facility, including commitment fees, of $44 thousand and $0.1 million for the three and nine months ended September 30, 2022.

The obligations of the borrowers under the ABL Facility are guaranteed by NCSH and each of our U.S. and Canada subsidiaries (other than Repeat Precision), as well as each of our future direct and indirect subsidiaries organized under the laws of the United States or Canada (subject to certain exceptions), and are secured by substantially all of the assets of NCSH and its subsidiaries, in each case, subject to certain exceptions and permitted liens.

The Credit Agreement requires, as a condition to borrowing, that available cash on hand after borrowings does not exceed $10.0 million. The Credit Agreement also requires us to (i) maintain, for quarters during which liquidity is less than 20% of the aggregate revolving commitments, a fixed charge coverage ratio of at least 1.0 to 1.0 and (ii) to prepay advances to the extent that the outstanding loans and letter of credit amounts exceed the most recently calculated borrowing base. As of September 30, 2022, we were in compliance with these financial covenants. The Credit Agreement also contains customary affirmative and negative covenants, including, among other things, restrictions on the creation of liens, the incurrence of indebtedness, investments, dividends and other restricted payments, dispositions and transactions with affiliates.

The Credit Agreement includes customary events of default for facilities of this type (with customary materiality thresholds and grace periods, as applicable). If an event of default occurs, the lenders party to the Credit Agreement may elect (after the expiration of any applicable notice or grace periods) to declare all outstanding borrowings under such facility, together with accrued and unpaid interest and other amounts payable thereunder, to be immediately due and payable. The lenders party to the Credit Agreement also have the right upon an event of default thereunder to terminate any commitments to provide further borrowings, or to provide additional financing in excess of the borrowing base limit, or to proceed against the collateral securing the ABL Facility.

We capitalized direct costs of $1.0 million in connection with the Credit Agreement, which are being amortized over the term of the ABL Facility using the straight-line method. Amortization of the deferred financing charges of $0.1 million was included in interest expense, net for the three and nine months ended September 30, 2022.

Repeat Precision Promissory Note

On February 27, 2017, Repeat Precision entered into a promissory note with Security State Bank & Trust, Fredericksburg (the “Repeat Precision Promissory Note”). The note bears interest at a variable interest rate based on prime plus 1.00%. The Repeat Precision Promissory Note is collateralized by certain equipment, inventory and receivables. The Repeat Precision Promissory Note was renewed on February 16, 2018 for an aggregate borrowing capacity of $4.3 million and continues to be renewed on an annual basis. The note is currently scheduled to mature on February 11, 2023. Total borrowings may be limited subject to a borrowing base calculation which includes a portion of Repeat Precision’s eligible receivables, inventory and equipment. As of September 30, 2022, Repeat Precision had $25 thousand of outstanding indebtedness under the note. There was no outstanding indebtedness under the Repeat Precision Promissory Note at December 31, 2021. Repeat Precision’s indebtedness is not guaranteed by the other NCS entities.

Finance Leases

Finance leases cover buildings including an office and laboratory in Tulsa, Oklahoma, as well as facilities in Odessa, Texas. We also maintain a vehicle leasing arrangement with a fleet management company through which we lease light vehicles and trucks that meet the finance lease criteria.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2022

Commitments and Contingencies [Abstract]

Commitments and Contingencies

Note 9.  Commitments and Contingencies

Litigation

In the ordinary course of our business, from time to time, we have various claims, lawsuits and administrative proceedings that are pending or threatened with respect to commercial, intellectual property and employee matters.

In accordance with GAAP, we accrue for contingencies where the occurrence of a material loss is probable and can be reasonably estimated, based on our estimate of the expected liability. If we have any outstanding legal accruals, we may increase or decrease these in the future, on a matter-by-matter basis, to account for developments. Our assessment of the likely outcome of litigation matters is based on our judgment of a number of factors, including experience with similar matters, past history, precedents, relevant financial information and other evidence and facts specific to the matter. While the outcome of any legal proceeding cannot be predicted with any certainty, based on a consideration of relevant facts and circumstances, our management currently does not expect that the results of these legal proceedings will have a material adverse effect on our financial position, results of operations or cash flows.

Employee Retention Credit

As disclosed in our Annual Report, we evaluated our eligibility for the ERC and determined that we were eligible for refundable tax credits totaling $3.2 million for the year ended December 31, 2021, which included $0.5 million pertaining to Repeat Precision, of which $0.1 million is associated with credits earned for activity in 2020. Of the aggregate credits claimed during 2021, we received $2.1 million in 2021 and $0.2 million during the nine months ended September 30, 2022. We have included $0.9 million and $1.1 million, respectively, in other current receivables on our condensed consolidated balance sheets as of September 30, 2022 and December 31, 2021. See “Note 4. Other Current Receivables.”

Operating Leases

During the nine months ended September 30, 2022, we entered into two operating leases and renewed four others for our facilities in various locations. We recorded long-term right-of-use assets totaling approximately $1.2 million and corresponding operating lease liabilities. The leases have renewal terms from three to five years.

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Share-Based Compensation

9 Months Ended

Sep. 30, 2022

Share-Based Compensation [Abstract]

Share-Based Compensation

Note 10.  Share-Based Compensation

During the nine months ended September 30, 2022, we granted 70,938 equity-classified restricted stock units (“RSUs”) with a weighted average grant date fair value of $42.16. We account for RSUs granted to employees at fair value on the date of grant, which we measure as the closing price of our common stock on the date of grant, and we recognize the compensation expense in the financial statements over the requisite service period. The RSUs granted to our employees generally vest over a period of three equal annual installments beginning on February 28, 2023. The RSUs granted to the members of our Board of Directors will vest on February 28, 2023 or on the one year anniversary of the grant date and will either settle at vesting or, if the director has elected to defer the RSUs, within thirty days following the earlier of the termination of the director’s service for any reason or a change of control.

During the nine months ended September 30, 2022, we granted 48,565 equivalent stock units, or cash-settled, liability-classified RSUs (“ESUs”), with a weighted average grant date fair value of $42.90. When the ESUs are originally granted to employees, they are valued at fair value, which we measure as the closing price of our common stock on the date of grant. Since the ESUs will be settled in cash, we record a liability, which is remeasured each reporting period at fair value based upon the closing price of our common stock until the awards are settled. The ESUs will vest and settle ratably in three equal annual installments beginning on February 28, 2023. The cash settled for any ESU will not exceed the maximum payout established by our Compensation, Nominating and Governance Committee of the Board of Directors.

In addition, during the nine months ended September 30, 2022, we granted 17,454 performance stock unit awards (“PSUs”), which have a performance period from January 1, 2022 to December 31, 2024. The PSUs grant date fair value of $71.28 was measured using a Monte Carlo simulation. The number of PSUs ultimately issued under the program is dependent upon our total shareholder return relative to a performance peer group (“relative TSR”) over the three year performance period. Each PSU will settle for between zero and two shares of our common stock in the first quarter of 2025. The threshold performance level (25th percentile relative TSR) starts to earn PSUs, the mid-point performance level (50th percentile relative TSR) earns 100% of the target PSUs and the maximum performance level (90th percentile relative TSR) or greater earns 200% of the target PSUs.

Total share-based compensation expense for all awards was $1.0 million and $1.4 million for the three months ended September 30, 2022 and 2021, respectively, and $4.5 million and $5.2 million for the nine months ended September 30, 2022 and 2021, respectively.

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Income Taxes

9 Months Ended

Sep. 30, 2022

Income Taxes [Abstract]

Income Taxes

Note 11.  Income Taxes

The computation of the annual estimated effective tax rate at each interim period requires certain estimates and assumptions including, but not limited to, the expected operating income (or loss) for the year, projections of the proportion of income (or loss) earned and taxed in foreign jurisdictions, permanent and temporary differences and the likelihood of recovering deferred tax assets generated in the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur, more experience is acquired or additional information is obtained. The computation of the annual estimated effective tax rate includes applicable modifications, which were projected for the year, such as certain book expenses not deductible for tax, tax credits and foreign deemed dividends.

Our effective tax rate (“ETR”) from continuing operations was (3.1)% and (33.5)% for the three months ended September 30, 2022 and 2021, respectively, and 16.1% and (0.8)% for the nine months ended September 30, 2022 and 2021, respectively. During the

three and nine months ended September 30, 2022, our ETR differed from the statutory federal income tax rate primarily due to the tax benefit recorded related to changes in valuation allowance on deferred tax assets not expected to be realized, the expense recorded for foreign taxes, and the tax expense recorded related to stock awards. During the three and nine months ended September 30, 2021, our ETR differed from the statutory federal tax rate primarily due to the amount recorded related to changes in the valuation allowance on deferred tax assets not expected to be realized and the tax expense recorded related to stock awards.

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Earnings (Loss) Per Common Share

9 Months Ended

Sep. 30, 2022

Earnings (Loss) Per Common Share [Abstract]

Earnings (Loss) Per Common Share

Note 12.  Earnings (Loss) Per Common Share

The following table presents the reconciliation of the numerator and denominator for calculating earnings (loss) per common share from net income (loss) (in thousands, except per share data):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Numerator
Net income (loss)	$	3,964	$	3,226	$	(3,243)	$	(5,775)
Less: income (loss) attributable to non-controlling interest		29		430		(162)		621
Net income (loss) attributable to NCS Multistage Holdings, Inc.	$	3,935	$	2,796	$	(3,081)	$	(6,396)
Denominator
Basic weighted average number of shares		2,438		2,401		2,430		2,394
Dilutive effect of stock options, RSUs and PSUs		50		44		—		—
Diluted weighted average number of shares		2,488		2,445		2,430		2,394
Earnings (loss) per common share
Basic	$	1.61	$	1.16	$	(1.27)	$	(2.67)
Diluted	$	1.58	$	1.14	$	(1.27)	$	(2.67)
Potentially dilutive securities excluded as anti-dilutive		210		173		275		255

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Segment and Geographic Information

9 Months Ended

Sep. 30, 2022

Segment and Geographic Information [Abstract]

Segment and Geographic Information

Note 13.  Segment and Geographic Information

We have determined that we operate in one reportable segment that has been identified based on how our chief operating decision maker manages our business. See “Note 2. Revenues” for our disaggregated revenue by geographic area. 

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Basis of Presentation (Policy)

9 Months Ended

Sep. 30, 2022

Basis of Presentation [Abstract]

Nature of Business

Nature of Business

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

Basis of Presentation

Basis of Presentation

Our accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities Exchange Act of 1934, as amended, issued by the Securities Exchange Commission (“SEC”) and have not been audited by our independent registered public accounting firm. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with our financial statements and related notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021 (“Annual Report”). We consolidate Repeat Precision, LLC (“Repeat Precision”), a 50% owned entity, because NCS has a controlling voting interest. The other party’s ownership is presented separately as a non-controlling interest. In the opinion of management, these condensed consolidated financial statements reflect all normal, recurring adjustments necessary for a fair statement of the interim periods presented. The results of operations for interim periods are not necessarily indicative of those for a full year. All intercompany accounts and transactions have been eliminated for purposes of preparing these condensed consolidated financial statements.

Significant Accounting Policies

Significant Accounting Policies

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

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Pronouncement Adopted in 2022

In November 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance, to increase transparency of disclosure regarding government assistance including the types of assistance, an entity’s method of accounting for the assistance, and the effect of the assistance on an entity’s financial statements. This standard became effective for fiscal years beginning after December 15, 2021. We adopted ASU No. 2021-10 on a prospective basis on January 1, 2022, with no material impact on our condensed consolidated financial statements.

Pronouncement Not Yet Effective

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This ASU introduces a new impairment model that is based on expected credit losses rather than incurred credit losses for financial instruments, including trade accounts receivable. It requires an entity to measure expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. The new standard was to become effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. In November 2019, the FASB issued ASU No. 2019-10, which deferred the effective dates for certain accounting guidance. The effective date for ASU No. 2016-13 remained the same for public business entities that are SEC filers, except for entities who are deemed smaller reporting companies (“SRC”). The effective date for all other entities, including SRCs, begins during the first interim period of fiscal years beginning after December 15, 2022. NCS qualifies as an SRC. We are currently evaluating the impact of the adoption of this guidance.

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Revenues (Tables)

9 Months Ended

Sep. 30, 2022

Revenues [Abstract]

Disaggregation of Revenue by Geographic Region

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
United States
Product sales	$	8,217	$	5,324	$	24,551	$	18,762
Services		3,294		2,715		8,171		6,328
Total United States		11,511		8,039		32,722		25,090
Canada
Product sales		25,748		15,678		54,455		36,877
Services		9,011		6,423		21,681		14,653
Total Canada		34,759		22,101		76,136		51,530
Other Countries
Product sales		—		227		543		1,528
Services		2,600		2,044		6,045		4,238
Total Other Countries		2,600		2,271		6,588		5,766
Total
Product sales		33,965		21,229		79,549		57,167
Services		14,905		11,182		35,897		25,219
Total revenues	$	48,870	$	32,411	$	115,446	$	82,386

Schedule of Contract Liabilities

Balance at December 31, 2021	$	71
Additions		1,963
Revenue recognized		(1,983)
Balance at September 30, 2022	$	51

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Inventories, Net (Tables)

9 Months Ended

Sep. 30, 2022

Inventories, Net [Abstract]

Schedule of Inventories

	September 30,		December 31,
	2022		2021
Raw materials	$	1,923	$	1,844
Work in process		280		14
Finished goods		31,912		32,059
Total inventories, net	$	34,115	$	33,917

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Other Current Receivables (Tables)

9 Months Ended

Sep. 30, 2022

Other Current Receivables [Abstract]

Schedule of Other Current Receivables

	September 30,		December 31,
	2022		2021
Current income tax receivables	$	2,937	$	2,226
Employee receivables		284		238
Other receivables		1,083		2,262
Total other receivables, net	$	4,304	$	4,726

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Property and Equipment (Tables)

9 Months Ended

Sep. 30, 2022

Property and Equipment [Abstract]

Schedule of Property and Equipment by Major Asset Class

	September 30,		December 31,
	2022		2021
Land	$	1,562	$	1,701
Building and improvements		7,203		8,099
Machinery and equipment		17,864		18,152
Computers and software		2,026		2,256
Furniture and fixtures		706		1,037
Vehicles		257		313
Right of use assets - finance leases		10,978		10,228
Service equipment		57		244
		40,653		42,030
Less: Accumulated depreciation and amortization		(17,884)		(17,752)
		22,769		24,278
Construction in progress		594		430
Property and equipment, net	$	23,363	$	24,708

Schedule of Depreciation Expense Associated Income Statement Line Items

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Cost of sales
Cost of product sales	$	344	$	349	$	1,068	$	1,050
Cost of services		118		168		414		540
Selling, general and administrative expenses		420		468		1,260		1,267
Total depreciation	$	882	$	985	$	2,742	$	2,857

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Goodwill and Identifiable Intangibles (Tables)

9 Months Ended

Sep. 30, 2022

Goodwill and Identifiable Intangibles [Abstract]

Changes in Carrying Amount of Goodwill

	September 30,		December 31,
	2022		2021
Gross value	$	177,162	$	177,162
Accumulated impairment		(161,940)		(161,940)
Net	$	15,222	$	15,222

Schedule of Identifiable Intangibles

		September 30, 2022
	Estimated	Gross
	Useful	Carrying		Accumulated		Net
	Lives (Years)	Amount		Amortization		Balance
Technology	1 - 20	$	3,958	$	(540)	$	3,418
Customer relationships	10		4,100		(2,323)		1,777
Total amortizable intangible assets		$	8,058	$	(2,863)	$	5,195
Technology - not subject to amortization	Indefinite		48		—		48
Total identifiable intangibles		$	8,106	$	(2,863)	$	5,243

		December 31, 2021
	Estimated	Gross
	Useful	Carrying		Accumulated		Net
	Lives (Years)	Amount		Amortization		Balance
Technology	1 - 20	$	3,958	$	(346)	$	3,612
Customer relationships	10		4,100		(2,016)		2,084
Total amortizable intangible assets		$	8,058	$	(2,362)	$	5,696
Technology - not subject to amortization	Indefinite		48		—		48
Total identifiable intangibles		$	8,106	$	(2,362)	$	5,744

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Accrued Expenses (Tables)

9 Months Ended

Sep. 30, 2022

Accrued Expenses [Abstract]

Schedule of Accrued Expenses

	September 30,		December 31,
	2022		2021
Accrued payroll and bonus	$	3,905	$	4,208
Property and franchise taxes accrual		421		550
Accrued other miscellaneous liabilities		1,639		1,565
Total accrued expenses	$	5,965	$	6,323

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Debt (Tables)

9 Months Ended

Sep. 30, 2022

Debt [Abstract]

Schedule of Long-term Debt

	September 30,		December 31,
	2022		2021
Prior Senior Secured Credit Facility	$	—	$	—
ABL Facility		—		—
Repeat Precision Promissory Note		25		—
Finance leases		7,804		7,818
Total debt		7,829		7,818
Less: current portion		(1,438)		(1,483)
Long-term debt	$	6,391	$	6,335

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Earnings (Loss) Per Common Share (Tables)

9 Months Ended

Sep. 30, 2022

Earnings (Loss) Per Common Share [Abstract]

Reconciliation of Numerator and Denominator for Calculating Earnings (Loss) Per Common Share from Net Income (Loss)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Numerator
Net income (loss)	$	3,964	$	3,226	$	(3,243)	$	(5,775)
Less: income (loss) attributable to non-controlling interest		29		430		(162)		621
Net income (loss) attributable to NCS Multistage Holdings, Inc.	$	3,935	$	2,796	$	(3,081)	$	(6,396)
Denominator
Basic weighted average number of shares		2,438		2,401		2,430		2,394
Dilutive effect of stock options, RSUs and PSUs		50		44		—		—
Diluted weighted average number of shares		2,488		2,445		2,430		2,394
Earnings (loss) per common share
Basic	$	1.61	$	1.16	$	(1.27)	$	(2.67)
Diluted	$	1.58	$	1.14	$	(1.27)	$	(2.67)
Potentially dilutive securities excluded as anti-dilutive		210		173		275		255

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Basis of Presentation (Narrative) (Details)	Sep. 30, 2022
Repeat Precision [Member]
Equity ownership interest, percent	50.00%

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Revenues (Narrative) (Details) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2022	Sep. 30, 2021
Revenues [Abstract]
Contract assets	$ 0	$ 0
Non-current contract liabilities	0	0
Revenue recognized from the contract liability balance	$ 400,000	$ 1,983,000	$ 800,000

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Revenues (Disaggregation of Revenue by Geographic Region) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Disaggregation of Revenue [Line Items]
Revenues	$ 48,870	$ 32,411	$ 115,446	$ 82,386
Product sales [Member]
Disaggregation of Revenue [Line Items]
Revenues	33,965	21,229	79,549	57,167
Services [Member]
Disaggregation of Revenue [Line Items]
Revenues	14,905	11,182	35,897	25,219
United States [Member]
Disaggregation of Revenue [Line Items]
Revenues	11,511	8,039	32,722	25,090
United States [Member] | Product sales [Member]
Disaggregation of Revenue [Line Items]
Revenues	8,217	5,324	24,551	18,762
United States [Member] | Services [Member]
Disaggregation of Revenue [Line Items]
Revenues	3,294	2,715	8,171	6,328
Canada [Member]
Disaggregation of Revenue [Line Items]
Revenues	34,759	22,101	76,136	51,530
Canada [Member] | Product sales [Member]
Disaggregation of Revenue [Line Items]
Revenues	25,748	15,678	54,455	36,877
Canada [Member] | Services [Member]
Disaggregation of Revenue [Line Items]
Revenues	9,011	6,423	21,681	14,653
Other Countries [Member]
Disaggregation of Revenue [Line Items]
Revenues	2,600	2,271	6,588	5,766
Other Countries [Member] | Product sales [Member]
Disaggregation of Revenue [Line Items]
Revenues		227	543	1,528
Other Countries [Member] | Services [Member]
Disaggregation of Revenue [Line Items]
Revenues	$ 2,600	$ 2,044	$ 6,045	$ 4,238

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Revenues (Schedule of Contract Liabilities) (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2022	Sep. 30, 2021
Current Contract Liabilities [Abstract]
Current contract liabilities: Beginning balance		$ 71
Additions		1,963
Revenue recognized	$ (400)	(1,983)	$ (800)
Current contract liabilities: Ending balance	$ 51	$ 51

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Inventories, Net (Schedule of Inventories) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Inventories, Net [Abstract]
Raw materials	$ 1,923	$ 1,844
Work in process	280	14
Finished goods	31,912	32,059
Total inventories, net	$ 34,115	$ 33,917

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Other Current Receivables (Narrative) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Other current receivables	$ 4,304	$ 4,726
Special Oilfield Services Co. LLC [Member] | Technical Services And Assistance Agreement [Member]
Other current receivables		$ 700

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Other Current Receivables (Schedule Of Other Current Receivables) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Other Current Receivables [Abstract]
Current income tax receivables	$ 2,937	$ 2,226
Employee receivables	284	238
Other receivables	1,083	2,262
Total other receivables, net	$ 4,304	$ 4,726

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Property and Equipment (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Property and Equipment [Abstract]
Impairment charge of property and equipment	$ 0	$ 0	$ 0	$ 0

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Property and Equipment (Schedule of Property and Equipment by Major Asset Class) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Property, Plant and Equipment [Line Items]
Property and equipment	$ 40,653	$ 42,030
Less: Accumulated depreciation and amortization	(17,884)	(17,752)
Property and equipment, net, excluding construction in progress	22,769	24,278
Construction in progress	594	430
Property and equipment, net	23,363	24,708
Land [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	1,562	1,701
Building and Improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	7,203	8,099
Machinery and Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	17,864	18,152
Computer and software [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	2,026	2,256
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	706	1,037
Vehicles [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	257	313
Right Of Use Assets - Finance Leases [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	10,978	10,228
Service Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	$ 57	$ 244

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Property and Equipment (Schedule of Depreciation Expense Associated Income Statement Line Items) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Depreciation expense	$ 882	$ 985	$ 2,742	$ 2,857
Cost of product sales [Member]
Depreciation expense	344	349	1,068	1,050
Cost of services [Member]
Depreciation expense	118	168	414	540
Selling, general and administrative expenses [Member]
Depreciation expense	$ 420	$ 468	$ 1,260	$ 1,267

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Goodwill and Identifiable Intangibles (Narrative) (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Goodwill [Line Items]
Goodwill	$ 15,222,000		$ 15,222,000		$ 15,222,000
Finite-lived intangible assets impairment charge	0	$ 0	0	$ 0
Amortization expense	168,000	168,000	502,000	502,000
Repeat Precision [Member]
Goodwill [Line Items]
Goodwill impairment charge	0	0	0	0
Goodwill	15,200,000	15,200,000	15,200,000	15,200,000
Customer Relationships And Technology [Member]
Goodwill [Line Items]
Amortization expense	$ 200,000	$ 200,000	$ 500,000	$ 500,000

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Goodwill and Identifiable Intangibles (Changes in Carrying Amount of Goodwill) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Goodwill and Identifiable Intangibles [Abstract]
Gross value	$ 177,162	$ 177,162
Accumulated impairment	(161,940)	(161,940)
Net	$ 15,222	$ 15,222

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Goodwill and Identifiable Intangibles (Schedule of Identifiable Intangibles) (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, Gross Carrying Amount	$ 8,058	$ 8,058
Finite-lived intangible assets, Accumulated Amortization	(2,863)	(2,362)
Finite-lived intangible assets, Net Balance	5,195	5,696
Intangible Assets, Gross (Excluding Goodwill), Total	8,106	8,106
Intangible Assets, Net (Excluding Goodwill), Total	5,243	5,744
Technology Not Subject To Amortization [Member]
Finite-Lived Intangible Assets [Line Items]
Indefinite-Lived Intangible Assets (Excluding Goodwill)	48	48
Technology [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, Gross Carrying Amount	3,958	3,958
Finite-lived intangible assets, Accumulated Amortization	(540)	(346)
Finite-lived intangible assets, Net Balance	$ 3,418	$ 3,612
Technology [Member] | Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible asset, useful life	1 year	1 year
Technology [Member] | Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible asset, useful life	20 years	20 years
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible asset, useful life	10 years	10 years
Finite-lived intangible assets, Gross Carrying Amount	$ 4,100	$ 4,100
Finite-lived intangible assets, Accumulated Amortization	(2,323)	(2,016)
Finite-lived intangible assets, Net Balance	$ 1,777	$ 2,084

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Accrued Expenses (Narrative) (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2022 USD ($)
Accrued Expenses [Abstract]
Annual incentive bonus, paid	$ 3,200

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Accrued Expenses (Schedule of Accrued Expenses) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Accrued Expenses [Abstract]
Accrued payroll and bonus	$ 3,905	$ 4,208
Property and franchise taxes accrual	421	550
Accrued other miscellaneous liabilities	1,639	1,565
Total accrued expenses	$ 5,965	$ 6,323

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Debt (Narrative) (Details)			3 Months Ended		9 Months Ended
	May 03, 2022 USD ($) item	Feb. 27, 2017	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Dec. 31, 2021 USD ($)	Aug. 06, 2020 USD ($)	Feb. 16, 2018 USD ($)
Debt Instrument [Line Items]
Amortization expense of deferred financing charges					$ 180,000	$ 211,000
Fair Value, Inputs, Level 2 [Member]
Debt Instrument [Line Items]
Debt instrument, fair value			$ 7,100,000		7,100,000		$ 7,500,000
Prior Senior Secured Credit Facility [Member]
Debt Instrument [Line Items]
Deferred loan costs			1,200,000		1,200,000
Interest expense on debt			200,000
Unamortized deferred	$ 300,000
Prior Senior Secured Credit Facility [Member] | Maximum [Member] | Letter of Credit [Member]
Debt Instrument [Line Items]
Line of credit outstanding							100,000
Repeat Precision Promissory Note [Member] | Repeat Precision [Member] | February 2017 Note [Member]
Debt Instrument [Line Items]
Line of credit outstanding			25,000,000		$ 25,000,000
Debt maturity date					Feb. 11, 2023
Debt instrument, maximum borrowing capacity									$ 4,300,000
Repeat Precision Promissory Note [Member] | Repeat Precision [Member] | February 2017 Note [Member] | Prime Rate [Member]
Debt Instrument [Line Items]
Debt instrument variable interest rate		1.00%
Amended And Restated Credit Agreement [Member] | Prior Senior Secured Credit Facility [Member]
Debt Instrument [Line Items]
Interest expense including commitment fees			0	$ 28,000,000	$ 47,000	$ 100,000
Amended And Restated Credit Agreement [Member] | Prior Senior Secured Credit Facility [Member] | U.S. Borrower [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity								$ 25,000,000.0
Line of credit outstanding							$ 0
Amended And Restated Credit Agreement [Member] | Prior Senior Secured Credit Facility [Member] | Letter of Credit [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity								2,500,000
Amended And Restated Credit Agreement [Member] | Prior Senior Secured Credit Facility [Member] | Swingline Loans [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity								2,500,000
Amended And Restated Credit Agreement [Member] | Prior Senior Secured Credit Facility [Member] | Credit Facility Subject To Sublimit [Member] | Canadian Borrower [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity								$ 15,000,000.0
Amended And Restated Credit Agreement [Member] | Prior Senior Secured Credit Facility [Member] | Minimum [Member] | Eurocurrency Rate [Member]
Debt Instrument [Line Items]
Debt instrument variable interest rate					2.75%
Amended And Restated Credit Agreement [Member] | Prior Senior Secured Credit Facility [Member] | Maximum [Member] | Eurocurrency Rate [Member]
Debt Instrument [Line Items]
Debt instrument variable interest rate					3.75%
ABL Facility [Member]
Debt Instrument [Line Items]
Line of credit outstanding			0		$ 0
Interest expense on debt			44,000		100,000
Unamortized deferred			1,000,000.0		1,000,000.0
Debt instrument, borrowing base			$ 23,800,000		$ 23,800,000
Debt maturity date					May 03, 2027
Interest rate, effective percentage			5.40%		5.40%
Condition to borrow, maximum cash on hand after borrowings			$ 10,000,000.0		$ 10,000,000.0
Fixed charge coverage ratio | item	1.0
Amortization expense of deferred financing charges			100,000		100,000
ABL Facility [Member] | Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 35,000,000.0
ABL Facility [Member] | Letter of Credit [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity	7,500,000
ABL Facility [Member] | Borrowing Allowed in Canadian Dollars [Member] | Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 10,000,000.0
ABL Facility [Member] | Minimum [Member]
Debt Instrument [Line Items]
Commitment fee, percentage	0.25%
ABL Facility [Member] | Minimum [Member] | Base Rate [Member]
Debt Instrument [Line Items]
Debt instrument variable interest rate	1.40%
ABL Facility [Member] | Minimum [Member] | Adjusted Daily Simple SOFR, Adjusted Term SOFR Rate, Canadian Prime Rate, and CDOR Rate [Member]
Debt Instrument [Line Items]
Debt instrument variable interest rate	2.40%
ABL Facility [Member] | Maximum [Member]
Debt Instrument [Line Items]
Commitment fee, percentage	0.50%
Minimum liquidity percentage required under new financial covenants	20.00%
ABL Facility [Member] | Maximum [Member] | Base Rate [Member]
Debt Instrument [Line Items]
Debt instrument variable interest rate	2.40%
ABL Facility [Member] | Maximum [Member] | Adjusted Daily Simple SOFR, Adjusted Term SOFR Rate, Canadian Prime Rate, and CDOR Rate [Member]
Debt Instrument [Line Items]
Debt instrument variable interest rate	3.40%
ABL Facility [Member] | Prior Senior Secured Credit Facility [Member]
Debt Instrument [Line Items]
Deferred loan costs			$ 100,000		$ 100,000

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Debt (Schedule of Long-term Debt) (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Debt Instrument [Line Items]
Finance leases	$ 7,804	$ 7,818
Total debt	7,829	7,818
Less: current portion	(1,438)	(1,483)
Long-term debt, less current maturities	6,391	6,335
Repeat Precision Promissory Note [Member]
Debt Instrument [Line Items]
Debt	$ 25

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Commitments and Contingencies (Narrative) (Details) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2022 USD ($) item	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
Loss Contingencies [Line Items]
Other current receivables	$ 4,304	$ 4,726
Number of new operating leases | item	2
Operating lease assets	$ 4,617	4,809
Operating lease liabilities	3,780	3,779
CARES Act [Member]
Loss Contingencies [Line Items]
Refundable tax credits amount under employee retention credit		3,200	$ 100
Proceeds from refundable tax credits	200	2,100
Other current receivables	$ 900	1,100
Various Locations [Member]
Loss Contingencies [Line Items]
Number of leases renewed | item	4
Operating lease assets	$ 1,200
Various Locations [Member] | Minimum [Member]
Loss Contingencies [Line Items]
Operating lease, term of contract	3 years
Various Locations [Member] | Maximum [Member]
Loss Contingencies [Line Items]
Operating lease, term of contract	5 years
Repeat Precision [Member] | CARES Act [Member]
Loss Contingencies [Line Items]
Refundable tax credits amount under employee retention credit		$ 500

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Share-Based Compensation (Narrative) (Details) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($) item $ / shares shares	Sep. 30, 2021 USD ($)
Share-based compensation | $	$ 1,000	$ 1,400	$ 4,500	$ 5,200
Restricted Stock Units (RSUs) [Member]
Share-based compensation shares granted			70,938
Weighted average grant date fair value | $ / shares			$ 42.16
Number of vesting equal annual installments | item			3
Equivalent Stock Units (ESUs) [Member]
Share-based compensation shares granted			48,565
Weighted average grant date fair value | $ / shares			$ 42.90
Number of vesting equal annual installments | item			3
Performance Stock Unit Awards (PSUs) [Member]
Share-based compensation award vesting period			3 years
Performance Stock Unit Awards (PSUs) [Member] | Minimum [Member]
Number of common stock shares issued for each PSU			0
Performance Stock Unit Awards (PSUs) [Member] | Maximum [Member]
Number of common stock shares issued for each PSU			2
Performance Stock Unit Awards (PSUs) [Member] | 50th percentile relative TSR [Member]
Share-based compensation arrangement performance obligations, percentage			100.00%
Performance Stock Unit Awards (PSUs) [Member] | 90th percentile relative TSR [Member]
Share-based compensation arrangement performance obligations, percentage			200.00%
Performance Stock Unit Awards (PSUs) [Member] | Performance Period from January 1, 2020 to December 31, 2023 [Member]
Share-based compensation shares granted			17,454
Weighted average grant date fair value | $ / shares			$ 71.28

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Income Taxes (Narrative) (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income Taxes [Abstract]
Effective tax rate	(3.10%)	(33.50%)	16.10%	(0.80%)

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Earnings (Loss) Per Common Share (Reconciliation of Numerator and Denominator for Calculating Earnings (Loss) Per Common Share from Net Income (Loss)) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2022	Jun. 30, 2022	Mar. 31, 2022	Sep. 30, 2021	Jun. 30, 2021	Mar. 31, 2021	Sep. 30, 2022	Sep. 30, 2021
Numerator
Net income (loss)	$ 3,964	$ (5,478)	$ (1,729)	$ 3,226	$ (5,544)	$ (3,457)	$ (3,243)	$ (5,775)
Less: income (loss) attributable to non-controlling interest	29			430			(162)	621
Net income (loss) attributable to NCS Multistage Holdings, Inc.	$ 3,935			$ 2,796			$ (3,081)	$ (6,396)
Denominator
Basic weighted average number of shares (in shares)	2,438			2,401			2,430	2,394
Dilutive effect of stock options, RSUs and PSUs	50			44
Diluted weighted average number of shares (in shares)	2,488			2,445			2,430	2,394
Earnings (loss) per common share
Basic (in dollars per share)	$ 1.61			$ 1.16			$ (1.27)	$ (2.67)
Diluted (in dollars per share)	$ 1.58			$ 1.14			$ (1.27)	$ (2.67)
Potentially dilutive securities excluded as anti-dilutive	210			173			275	255

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Segment and Geographic Information (Narrative) (Details)	9 Months Ended
	Sep. 30, 2022 segment
Segment and Geographic Information [Abstract]
Number of reportable segments	1