Business
NCS Multistage Holdings, Inc. Announces First Quarter 2020 Operational Update
HOUSTON, April 02, 2020 (GLOBE NEWSWIRE) -- NCS Multistage Holdings, Inc. (the “Company,” “NCS,” “we” or “us”) (NASDAQ:NCSM) today announced immediate actions
About this update from Ncs Multistage Holdings, Inc.
[{"type":"text","content":"HOUSTON, April 02, 2020 (GLOBE NEWSWIRE) -- NCS Multistage Holdings, Inc. (the “Company,” “NCS,” “we” or “us”) (NASDAQ:NCSM) today announced immediate actions taken in response to current global market conditions which have been impacted by the effect of COVID-19 on economic activity, reduced demand for crude oil, refined products and natural gas and recently-announced reductions in drilling and completion activity by E&P companies. We expect our operational and financial results for the first quarter and full year 2020 to be negatively impacted by a reduction in demand for our products and services and potential disruptions to field operations in certain geographies. As a result, the Company is withdrawing guidance related to the first quarter and full year 2020 provided in our earnings call on March 3, 2020, and as such, investors should no longer rely on that guidance. The Company is not providing an updated outlook at this time.\n In response to these market circumstances, the Company has initiated further cost reductions which include: 1) a reduction in force of over 80 employees, or approximately 20% of our U.S. and Canadian workforce, 2) furloughs for certain operationally-focused employees and engineers, and 3) salary reductions for substantially all remaining U.S. and Canadian employees not participating in furloughs, including reductions in base salaries for our executive officers averaging approximately 20%. We expect these actions to result in an annualized cost savings of over $12 million, approximately 75% of which is related to our S,G&A expense. In connection with the workforce reduction, we expect to incur approximately $3.5 - $4.0 million in severance costs in the first and second quarters of 2020. We expect that approximately 45% of the severance cost will be paid immediately, with remainder paid in installments over a 12-month period. In addition to the actions discussed above, the Company has reduced its planned bonus accrual for 2020 and is implementing other cost mitigation strategies to further reduce S,G&A expense and capital expenditures. NCS’s Chief Executive Officer, Robert Nipper, commented, “We are taking decisive and immediate action to adjust to the current environment facing our industry and our Company. We continue to closely monitor the impact of COVID-19 with a focus on the safety and well-bei...