GlobeNewswire Inc | Feb 23, 2021 05:30PM EST

February 23, 2021

-- Revenue of $706.1 million in Q420 -- Net income attributable to ChampionX of $7.4 million in Q420; adjusted net income of $14.3 million -- Adjusted EBITDA of $108.6 million in Q420 -- Cash from operating activities of $120.6 million and free cash flow of $107.6 million (15% of revenue) in Q420; free cash flow of $115.5 million (16% of revenue) excluding acquisition-related expenses -- Repaid $79.8 million of debt in Q420

THE WOODLANDS, Texas, Feb. 23, 2021 (GLOBE NEWSWIRE) -- ChampionX Corporation (ChampionX) (NASDAQ: CHX) (the Company)today announced fourth quarter of 2020 results, our second full quarter following the June 3, 2020 combination of the Company with the legacy ChampionX business, and our full year 2020 results.

For the fourth quarter of 2020, revenue was $706.1 million, net income attributable to ChampionX was $7.4 million, and adjusted EBITDA was $108.6 million. Income before income taxes margin was 2.7%, and adjusted EBITDA margin was 15.4%. Cash provided by operating activities was $120.6 million, an increase of $9.2 million sequentially, and free cash flow was $107.6 million.

Results on a pro forma basis for ChampionX for prior periods are provided supplementary to the actual results of the Company and represent results on a full-year basis as if legacy ChampionX was combined with the Company for the entire period. For additional information on the pro forma results see the tables included in this release.i

CEO Commentary

We are proud of how remarkably well our organization performed in the fourth quarter and during the course of 2020 as we completed our successful transformational merger with ChampionX and demonstrated the resiliency of our portfolio against the backdrop of the global pandemic and one of the most challenging periods in the history of the energy industry. I am grateful to all of our employees for their dedication and commitment to improving the lives of our customers and communities, and we remain committed to taking all necessary steps to protect the health and safety of our employees, ChampionXs President and Chief Executive Officer Sivasankaran Soma Somasundaram said.

During the fourth quarter, which marked just our second full quarter as a new company, we delivered adjusted EBITDA of $109 million, which represented a sequential increase of 25%. Benefiting both from the recovery of the 2020 downturn and seasonal tailwinds, we generated fourth quarter revenue of $706 million, which increased 11% sequentially, with both our North American and international revenues posting double-digit sequential growth during the period.

We once again demonstrated the strong positive free cash flow profile of our Company as we generated free cash flow of $108 million in the fourth quarter and we further strengthened our balance sheet by repaying $80 million of debt during the quarter. We ended the quarter with $551 million of liquidity, including $201 million of cash and $350 million of available capacity on our revolver. We remain focused on our free cash flow generation and we intend to continue paying down debt this year.

Our team continues to execute well on our merger integration plans and we still anticipate fully capturing our increased targeted cost synergies of $125 million within 24 months of the merger closing.

As we look to the first quarter, we expect seasonal declines in our international operations, partially offset by anticipated continued positive momentum in our shorter-cycle North American land-oriented businesses. We anticipate some near-term cost pressures as oilfield activity levels normalize versus the pandemic-induced trough levels of last year, but we expect year-over-year margin improvement as we exit 2021. We are currently assessing the first quarter impact of the severe winter storms in major oil producing basins, so our guidance does not include the impact of extreme weather challenges experienced in February. Excluding winter storm impacts, on a consolidated basis, in the first quarter we expect revenue to be between $650 million and $700 million, and we expect adjusted EBITDA of $90 million to $100 million.

We are excited about the prospects for our Company as this year unfolds and we believe that our disciplined operating model, differentiated products and technology, robust free cash flow, and production-oriented portfolio, combined with our strong and motivated team, will enable us to be a long-term winner in the energy transition.

ChampionX Actual Results

Three Months Ended Variance(dollars inthousands, Dec 31, Sep 30, Dec 31,except per 2020 2020 2019 Sequential Year-over-yearshareamounts)Revenue $ 706,122 $ 633,526 $ 247,748 11% N/M Net income(loss) $ 7,357 $ (7,914 ) $ (1,823 ) N/M N/Mattributableto ChampionXDilutedearnings(loss) per $ 0.04 $ (0.04 ) $ (0.02 ) N/M N/Mshareattributableto ChampionX Adjusted netincome (loss) $ 14,329 $ 5,451 $ 10,287 N/M 39%attributableto ChampionXAdjusteddilutedearnings(loss) per $ 0.07 $ 0.03 $ 0.13 N/M (46)%shareattributableto ChampionX Income (loss)before income $ 19,007 $ (11,294 ) $ (10,622 ) N/M N/MtaxesIncome (loss)before income 2.7 % (1.8 ) % (4.3 ) % N/M N/Mtaxes margin Adjusted $ 108,645 $ 86,822 $ 44,643 25% N/MEBITDAAdjusted 15.4 % 13.7 % 18.0 % 170 bps (260) bpsEBITDA margin Net cashprovided by $ 120,608 $ 111,399 $ 32,509 $9,209 $88,099operatingactivitiesCapital $ 12,994 $ 12,847 $ 8,191 $147 $4,803expenditures[N/M - not meaningful]

ChampionX consolidated actual results in the fourth quarter and third quarter of 2020 include results of operations of the legacy Apergy businesses and results from legacy ChampionX for the entire period. Fourth quarter 2019 results represent results of operations of the legacy Apergy businesses.

In the fourth quarter of 2020, consolidated revenue increased $72.6 million, or 11%, sequentially, due to the continued recovery from the pandemic-induced downturn, as well as seasonal improvements internationally. Sequentially, international revenue increased 12% and North America revenue increased 11%. Fourth quarter 2020 consolidated revenue includes $46.2 million of chemical sales to Ecolab Inc. as compared to $49.5 million in the third quarter. As part of the Merger, the Company entered into a Cross Supply and Product Transfer Agreement with Ecolab in which certain products will be manufactured by one party for the other and sold at cost over a period of no longer than three years from the merger date. Revenue associated with these sales is reported in Corporate and Other within our financial statements.

In the fourth quarter of 2020, consolidated net income attributable to ChampionX was $7.4 million, and adjusted net income was $14.3 million. Consolidated adjusted EBITDA was $108.6 million, which increased $21.8 million, sequentially, or 25%, due to higher volumes.

Production Chemical Technologies - Actual Results

Three Months Ended Variance(dollars in thousands) Dec 31, Sep 30, Sequential 2020 2020Revenue $ 446,652 $ 410,151 9%Operating profit $ 49,200 $ 35,172 40%Operating profit margin 11.0 % 8.6 % 240 bpsAdjusted segment EBITDA $ 77,872 $ 71,505 9%Adjusted segment EBITDA margin 17.4 % 17.4 % ? bps

In the fourth quarter of 2020, Production Chemical Technologies revenue increased $36.5 million, or 9%, sequentially, due to strong Latin America orders, continued recovery in our North America business, and higher seasonal international volumes. Sequentially, international revenue increased 12% and North America revenue increased 5%.

In the fourth quarter of 2020, segment operating profit was $49.2 million. Segment adjusted EBITDA was $77.9 million, which increased $6.4 million, sequentially, or 9%, primarily due to higher volume.

Production & Automation Technologies - Actual Results

Three Months Ended Variance(dollars Dec 31, Sep 30, Dec 31,in 2020 2020 2019 Sequential Year-over-yearthousands)Revenue $ 158,777 $ 136,921 $ 203,625 16% (22)%Operatingprofit $ (4,724 ) $ (7,454 ) $ 2,175 (37)% N/M(loss)Operatingprofit (3.0 ) % (5.4 ) % 1.1 % 240 bps (410) bps(loss)marginAdjustedsegment $ 29,345 $ 24,995 $ 35,668 17% (18)%EBITDAAdjustedsegment 18.5 % 18.3 % 17.5 % 20 bps 100 bpsEBITDAmargin[N/M - not meaningful]

In the fourth quarter of 2020, Production & Automation Technologies revenue increased $21.9 million, or 16%, sequentially, due to higher volumes as E&P capital spending continued to recover from the rapid reduction experienced earlier in 2020. Sequentially, North America revenue increased 21% and international revenue decreased 3%. Production & Automation Technologies revenue decreased $44.8 million, or 22%, year-over-year, due to lower volumes driven by the decline in worldwide E&P capital spending.

Revenue from digital products was $21.8 million in the fourth quarter of 2020, an increase of $3.0 million, or 16%, compared to $18.9 million in the third quarter of 2020.

In the fourth quarter of 2020, segment operating loss was $4.7 million. Segment adjusted EBITDA was $29.3 million, which increased $4.4 million sequentially, or 17%, primarily due to higher volume. Segment adjusted EBITDA decreased $6.3 million, or 18%, year-over-year, due to lower volumes, partially offset by cost reduction actions.

Drilling Technologies - Actual Results

Three Months Ended Variance(dollars Dec 31, Sep 30, Dec 31,in 2020 2020 2019 Sequential Year-over-yearthousands)Revenue $ 23,568 $ 15,715 $ 44,123 50% (47)%Operatingprofit $ 153 $ (5,127 ) $ 8,644 N/M (98)%(loss)Operatingprofit 0.6 % (32.6 ) % 19.6 % 3320 bps (1900) bps(loss)marginAdjustedsegment $ 2,525 $ (2,782 ) $ 11,412 N/M (78)%EBITDAAdjustedsegment 10.7 % (17.7 ) % 25.9 % 2840 bps (1520) bpsEBITDAmargin[N/M - not meaningful]

In the fourth quarter of 2020, Drilling Technologies revenue increased by $7.9 million, or 50%, sequentially, driven primarily by the increase in U.S. land drilling activity and customer restocking of polycrystalline diamond cutter inventories. Drilling Technologies revenue decreased $20.6 million, or 47%, year-over-year, driven by the significant decline in worldwide drilling activity and customer destocking of polycrystalline diamond cutter inventories.

Diamond bearings revenue in the fourth quarter of 2020 was $2.2 million, up $0.2 million, or 10%, sequentially.

In the fourth quarter of 2020, segment operating profit was $0.2 million, and segment adjusted EBITDA was $2.5 million. Sequentially, segment adjusted EBITDA increased by $5.3 million, due to higher volumes. Year-over-year, segment adjusted EBITDA decreased by $8.9 million, or 78%, as a result of lower volumes, partially offset by cost reduction actions.

Sequentially, the average worldwide and U.S. rig counts increased 3% and 22%, respectively. On a year-over-year basis, the average worldwide and U.S. rig counts declined 49% and 62%, respectively.

Reservoir Chemical Technologies - Actual Results

Three Months Ended Variance(dollars in thousands) Dec 31, Sep 30, Sequential 2020 2020Revenue $ 30,937 $ 21,264 45%Operating profit (loss) $ 432 $ (3,819 ) N/MOperating profit (loss) margin 1.4 % (18.0 ) % 1940 bpsAdjusted segment EBITDA $ 2,204 $ (1,432 ) N/MAdjusted segment EBITDA margin 7.1 % (6.7 ) % 1380 bps

In the fourth quarter of 2020, Reservoir Chemical Technologies revenue increased by $9.7 million, or 45%, sequentially, driven by the increase in global land well construction and completion activity.

In the fourth quarter of 2020, segment operating profit was $0.4 million, and segment adjusted EBITDA was $2.2 million. Sequentially, segment adjusted EBITDA increased by $3.6 million, due to higher volumes.

Other Business Highlights

-- ChampionX improved lives in 2020, as we achieved our best safety performance ever in both number of injuries (50% reduction) and severity (30% reduction in lost time injury rate). -- In our recently concluded global employee engagement survey, ChampionX had a 71% global participation rate from our employees. -- Production Chemical Technologies was awarded two significant contracts in West Africa with two different global energy companies. -- Production & Automation Technologies experienced increased customer adoption of our PowerFit motors for ESP applications. -- Within our Production & Automation Technologies segment, we are seeing early momentum and revenue uplift from Better Together joint sales efforts, including recent wins in the Permian and Latin America regions. -- Our Digital team signed a global software agreement with an integrated energy company for the use of our XSPOC artificial lift optimization software. -- During the fourth quarter of 2020, more than 70% of Drilling Technologies revenue was generated from products that were less than three years old. -- Reservoir Chemical Technologies won incremental work with leading U.S. E&P operators, advancing our direct sales model. -- ChampionX is on plan to complete remediation of 2019 material weaknesses in internal controls as of December 31, 2020. -- In developing its Environmental, Social and Governance (ESG) framework and roadmap, ChampionX initiated an ESG priorities assessment project.

Conference Call Details

ChampionX will host a conference call on Wednesday, February 24, 2021, to discuss its fourth quarter 2020 financial results. The call will begin at 10:00 a.m. Eastern Time. Presentation materials that supplement the conference call are available on ChampionXs website at investors.championx.com.

To listen to the call via a live webcast, please visit ChampionXs website at investor.championx.com. The call will also be available by dialing 1-888-424-8151 in the United States and Canada or 1-847-585-4422 for international calls. Please call approximately 15 minutes prior to the scheduled start time and reference ChampionX conference call number 9069100.

A replay of the conference call will be available on ChampionXs website or at https://onlineexperiences.com/Launch/QReg/ShowUUID=3A0F2ACA-3289-48AB-A8E5-87CAB1888BF68&LangLocaleID=1033. Enter passcode 50078440.

Results on a Pro Forma Basis

On June 3, 2020, Apergy Corporation closed on the acquisition of ChampionX Holding, Inc. (the Transaction) and assumed the name ChampionX Corporation (ChampionX). Actual results reflect the respective contributions from each company based on the close of the Transaction. For comparative purposes, management has also presented herein certain unaudited pro forma financial information as if the Transaction was completed on January 1, 2019, including results on a pro forma basis for revenue, income (loss) before income taxes, income (loss) before income taxes margin, adjusted EBITDA, adjusted EBITDA margin, segment revenue, segment operating profit (loss), adjusted segment EBITDA, and adjusted segment EBITDA margin for the quarterly periods ended December31, 2020, September 30, 2020, and December31, 2019, and for the full year periods ended December 31, 2020 and December 31, 2019. The financial results on a pro forma basis are provided to assist investors in assessing ChampionXs performance on a basis that includes the combined results of operations of both Apergy Corporation and ChampionX Holding, Inc. for the full reporting period. ChampionX management believes this unaudited pro forma historical financial information helps investors understand the long-term profitability trends of its newly combined business giving effect to the Transaction and facilitates comparisons of our profitability to prior and future periods and to our peers. The historical financial results on a pro forma basis herein may not be comparable to similarly titled measures reported by other companies.

About Non-GAAP Measures

In addition to financial results determined in accordance with generally accepted accounting principles in the United States (GAAP), this news release presents non-GAAP financial measures. Management believes that adjusted EBITDA, adjusted EBITDA margin, adjusted segment EBITDA, adjusted segment EBITDA margin, adjusted net income attributable to ChampionX, adjusted diluted earnings per share attributable to ChampionX, pro forma adjusted EBITDA, pro forma adjusted EBITDA margin, pro forma segment revenue, pro forma segment operating profit (loss), and pro forma adjusted segment EBITDA reflect the core operating results of our businesses and help facilitate comparisons of operating performance across periods. In addition, free cash flow and free cash flow to revenue ratio are used by management to measure our ability to generate positive cash flow for debt reduction and to support our strategic objectives, while adjusted working capital provides a meaningful measure of operational results by showing changes caused by revenue or our operational initiatives. The foregoing non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, other measures of financial performance prepared in accordance with GAAP. A reconciliation of these non-GAAP measures to the comparable GAAP measures is included in the accompanying financial tables.

This press release also contains certain forward-looking non-GAAP financial measures, including adjusted EBITDA. Due to the forward-looking nature of the aforementioned non-GAAP financial measure, management cannot reliably or reasonably predict certain of the necessary components of the most directly comparable forward-looking GAAP measures, such as net income. Accordingly, we are unable to present a quantitative reconciliation of such forward looking non-GAAP financial measures to their most directly comparable forward-looking GAAP financial measures. Amounts excluded from these non-GAAP measures in future periods could be significant. Management believes the aforementioned non-GAAP financial measures are good tools for internal use and the investment community in evaluating ChampionXs overall financial performance.

About ChampionX

ChampionX (formerly known as Apergy Corporation) is a global leader in chemistry solutions and highly engineered equipment and technologies that help companies drill for and produce oil and gas safely and efficiently around the world. ChampionXs products provide efficient functioning throughout the lifecycle of a well with a focus on the production phase of wells.To learn more about ChampionX, visit our website at www.championX.com.

Forward-Looking Statements

This news release contains statements relating to future actions and results, which are "forward-looking statements" within the meaning of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such statements relate to, among other things,ChampionX's market position and growth opportunities. Forward-looking statements include, statements related to ChampionXs expectations regarding the performance of the business, financial results, liquidity and capital resources of ChampionX. Forward-looking statements are subject to inherent risks and uncertainties that could cause actual results to differ materially from current expectations, including, but not limited to, changes in economic, competitive, strategic, technological, tax, regulatory or other factors that affect the operation of ChampionXs businesses. You are encouraged to refer to the documents that ChampionX files from time to time with the Securities and Exchange Commission (SEC), including the Risk Factors in ChampionXs Quarterly Report on Form 10-Q for the period ended June 30, 2020, and in ChampionXs other filings with the SEC. Readers are cautioned not to place undue reliance on ChampionXs forward-looking statements. Forward-looking statements speak only as of the day they are made andChampionX undertakes no obligation to update any forward-looking statement, except as required by applicable law.

Investor Contact: Byron Popebyron.pope@championx.com281-602-0094

Media Contact: John Breedjohn.breed@championx.com281-403-5751

i Adjusted net income (loss) attributable to ChampionX, adjusted EBITDA, adjusted EBITDA margin, adjusted segment EBITDA, adjusted segment EBITDA margin, pro forma revenue, pro forma adjusted EBITDA, pro forma adjusted EBITDA margin, pro forma adjusted segment EBITDA, pro forma adjusted segment EBITDA margin, free cash flow, and free cash flow to revenue are non-GAAP measures. See section titled About Non-GAAP Measures included herein for details on the non-GAAP measures used in this release.

CHAMPIONX CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)(UNAUDITED)

Three Months Ended Years Ended Dec 31, Sep 30, Dec 31, December 31,(in thousands,except per share 2020 2020 2019 2020 2019amounts)Revenue $ 706,122 $ 633,526 $ 247,748 $ 1,899,996 $ 1,131,251 Cost of goods 539,979 505,066 175,114 1,490,824 754,147 and servicesGross profit 166,143 128,460 72,634 409,172 377,104 Selling, generaland 132,811 122,156 75,047 463,767 274,268 administrativeexpenseGoodwill andlong-lived asset ? ? ? 657,251 1,746 impairmentInterest 15,495 15,935 9,075 51,731 39,301 expense, netOther (income) (1,170 ) 1,663 (866 ) (828 ) 2,603 expense, netIncome (loss)before income 19,007 (11,294 ) (10,622 ) (762,749 ) 59,186 taxesProvision for(benefit from) 11,526 (3,962 ) (9,048 ) (20,396 ) 6,226 income taxesNet income 7,481 (7,332 ) (1,574 ) (742,353 ) 52,960 (loss)Less: Net incomeattributable to 124 582 249 1,577 796 noncontrollinginterestNet income(loss) $ 7,357 $ (7,914 ) $ (1,823 ) $ (743,930 ) $ 52,164 attributable toChampionX Earnings (loss)per share attributable toChampionX:Basic $ 0.04 $ (0.04 ) $ (0.02 ) $ (5.01 ) $ 0.67 Diluted $ 0.04 $ (0.04 ) $ (0.02 ) $ (5.01 ) $ 0.67 Weighted-averageshares outstanding:Basic 199,913 199,809 77,460 148,370 77,427 Diluted 204,825 199,809 77,460 148,370 77,624

CHAMPIONX CORPORATIONCONDENSED CONSOLIDATED BALANCE SHEETS(UNAUDITED)

December 31,(in thousands) 2020 2019Assets Cash and cash equivalents $ 201,421 $ 35,290 Receivables, net 559,545 219,874 Inventories, net 430,112 211,342 Prepaid expenses and other current assets 74,767 26,934 Total current assets 1,265,845 493,440 Property, plant and equipment, net 854,536 248,181 Goodwill 680,594 911,113 Intangible assets, net 479,009 238,707 Other non-current assets 195,792 31,384 Total assets $ 3,475,776 $ 1,922,825 Liabilities Current portion of long-term debt $ 26,850 $ ? Accounts payable 299,666 120,291 Other current liabilities 296,044 79,390 Total current liabilities 622,560 199,681 Long-term debt 905,764 555,291 Other long-term liabilities 334,877 131,639 Equity ChampionX stockholders? equity 1,625,971 1,032,960 Noncontrolling interest (13,396 ) 3,254 Total liabilities and equity $ 3,475,776 $ 1,922,825

CHAMPIONX CORPORATIONCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(UNAUDITED)

Years Ended December 31,(in thousands) 2020 2019Cash provided by (used for) operating activities: Net income (loss) $ (742,353 ) $ 52,960 Depreciation 142,647 68,557 Amortization 71,715 51,381 Goodwill and long-lived asset impairment 657,251 1,746 Receivables 58,210 25,948 Inventories 85,893 19,065 Accounts payable (18,389 ) (20,526 ) Leased assets (4,606 ) (40,700 ) Other 59,672 (2,532 ) Net cash provided by operating activities 310,040 155,899 Cash provided by (used for) investing activities: Capital expenditures (45,163 ) (39,780 ) Acquisitions, net of cash acquired 57,588 (12,500 ) Proceeds from sale of fixed assets 9,705 4,598 Payments on sale of business ? (2,194 ) Net cash provided by (used for) investing 22,130 (49,876 ) activities Cash used for financing activities: Proceeds from long-term debt 125,000 36,500 Repayment of long-term debt (286,493 ) (141,500 ) Debt issuance costs (4,356 ) ? Other (9,517 ) (7,403 ) Net cash used for financing activities (175,366 ) (112,403 ) Effect of exchange rate changes on cash and cash 9,327 (162 ) equivalents Net increase (decrease) in cash and cash 166,131 (6,542 ) equivalentsCash and cash equivalents at beginning of period 35,290 41,832 Cash and cash equivalents at end of period $ 201,421 $ 35,290

CHAMPIONX CORPORATIONBUSINESS SEGMENT DATA(UNAUDITED)

Three Months Ended Years Ended Dec 31, Sep 30, Dec 31, December 31,(in 2020 2020 2019 2020 2019thousands)Segment revenue:ProductionChemical $ 446,652 $ 410,151 $ ? $ 992,805 $ ? TechnologiesProduction &Automation 158,777 136,921 203,625 615,918 884,364 TechnologiesDrilling 23,568 15,715 44,123 116,186 246,887 TechnologiesReservoirChemical 30,937 21,264 ? 61,507 ? TechnologiesCorporate 46,188 49,475 ? 113,580 ? and otherTotal $ 706,122 $ 633,526 $ 247,748 $ 1,899,996 $ 1,131,251 revenue Income (loss) before income taxes:Segmentoperating profit:ProductionChemical $ 49,200 $ 35,172 $ ? $ 94,294 $ ? TechnologiesProduction &Automation (4,724 ) (7,454 ) 2,175 (697,937 ) 54,024 TechnologiesDrilling 153 (5,127 ) 8,644 2,574 73,497 TechnologiesReservoirChemical 432 (3,819 ) ? (6,198 ) ? TechnologiesTotalsegmentoperating 45,061 18,772 10,819 (607,267 ) 127,521 profit(loss)Corporate 10,559 14,131 12,366 103,751 29,034 and otherInterest 15,495 15,935 9,075 51,731 39,301 expense, netIncome(loss) $ 19,007 $ (11,294 ) $ (10,622 ) $ (762,749 ) $ 59,186 beforeincome taxes Operatingprofitmargin /income (loss)beforeincome taxesmargin:ProductionChemical 11.0 % 8.6 % ? % 9.5 % ? %TechnologiesProduction &Automation (3.0 ) % (5.4 ) % 1.1 % (113.3 ) % 6.1 %TechnologiesDrilling 0.6 % (32.6 ) % 19.6 % 2.2 % 29.8 %TechnologiesReservoirChemical 1.4 % (18.0 ) % ? % (10.1 ) % ? %TechnologiesChampionX 2.7 % (1.8 ) % (4.3 ) % (40.1 ) % 5.2 %Consolidated Adjusted EBITDAProductionChemical $ 77,872 $ 71,505 $ ? $ 171,808 $ ? TechnologiesProduction &Automation 29,345 24,995 35,668 108,863 179,820 TechnologiesDrilling 2,525 (2,782 ) 11,412 17,312 83,870 TechnologiesReservoirChemical 2,204 (1,432 ) ? 459 ? TechnologiesCorporate (3,301 ) (5,464 ) (2,437 ) (15,257 ) (12,522 ) and otherAdjusted $ 108,645 $ 86,822 $ 44,643 $ 283,185 $ 251,168 EBITDA AdjustedEBITDA marginProductionChemical 17.4 % 17.4 % ? % 17.3 % ? %TechnologiesProduction &Automation 18.5 % 18.3 % 17.5 % 17.7 % 20.3 %TechnologiesDrilling 10.7 % (17.7 ) % 25.9 % 14.9 % 34.0 %TechnologiesReservoirChemical 7.1 % (6.7 ) % ? % 0.7 % ? %TechnologiesChampionX 15.4 % 13.7 % 18.0 % 14.9 % 22.2 %Consolidated

CHAMPIONX CORPORATIONRECONCILIATIONS OF GAAP TO NON-GAAP FINANCIAL MEASURES(UNAUDITED)

Three Months Ended Years Ended Dec 31, Sep 30, Dec 31, December 31,(in thousands) 2020 2020 2019 2020 2019Net income (loss)attributable to $ 7,357 $ (7,914 ) $ (1,823 ) $ (743,930 ) $ 52,164 ChampionXPre-tax adjustments:Goodwill andlong-lived asset ? ? ? 657,251 1,746 impairment ^(1)Separation andsupplemental 105 383 331 539 6,377 benefit costs ^(2)Restructuring andother related 4,971 3,426 2,556 23,291 9,307 chargesEnvironmental costs ? ? ? ? 1,988 Acquisition andintegration related 5,854 8,665 9,815 84,779 10,145 costs ^(3)Acquisition-related (2,878 ) 3,511 ? 6,463 ? adjustments ^(4)Professional feesrelated to materialweakness 512 940 2,780 6,240 2,780 remediation andimpairment analysis^(5)Intellectual 478 408 400 1,278 400 property defenseTax impact of (2,070 ) (3,968 ) (3,772 ) (63,368 ) (7,777 ) adjustments ^(6)Adjusted net income(loss) attributable 14,329 5,451 10,287 (27,457 ) 77,130 to ChampionXTax impact of 2,070 3,968 3,772 63,368 7,777 adjustments ^(6)Net incomeattributable to 124 582 249 1,577 796 noncontrollinginterestDepreciation and 65,101 64,848 30,308 214,362 119,938 amortizationProvision for(benefit from) 11,526 (3,962 ) (9,048 ) (20,396 ) 6,226 income taxesInterest expense, 15,495 15,935 9,075 51,731 39,301 netAdjusted EBITDA $ 108,645 $ 86,822 $ 44,643 $ 283,185 $ 251,168 Diluted earnings(loss) per share attributable toChampionX:Reported $ 0.04 $ (0.04 ) $ (0.02 ) $ (5.01 ) $ 0.67 Adjusted $ 0.07 $ 0.03 $ 0.13 $ (0.19 ) $ 0.99

_______________________(1)Includes charges for goodwill and long-lived asset impairments of $657.3 million in our Production & Automation Technologies segment during the year ended December 31, 2020. During the year ended December 31, 2019, we incurred an impairment loss of $1.7 million related to the classification of our pressure vessel manufacturing business as held for sale. (2) Dover Separation and supplemental benefit costs primarily relates to separation costs, and to a lesser extent, enhanced or supplemental benefits provided to employees no longer participating in Dover Corporation benefit and compensation plans. During the year ended December 31, 2019, pursuant to the provisions of the tax matters agreement with Dover Corporation, we recognized approximately $3.4 million of tax indemnification expense. This was settled and paid during the three months ended June 30, 2020.(3)Includes costs incurred in relation to business combinations, primarily related to the Merger of legacy ChampionX of $0.9 million and $61.8 million for the three months and year ended December 31, 2020, respectively. Additionally, we incurred professional fees related to the integration of legacy ChampionX of $4.9 million and $23.0 million for the three months and year ended December 31, 2020, respectively. (4)Includes revenue associated with the amortization of a liability established as part of the Merger, representing unfavorable terms under the Cross Supply Agreement with Ecolab. This is partially offset by incremental expense related to the step-up of inventory value resulting from the purchase accounting entries. (5)Includes professional fees related to the remediation of material weaknesses identified during 2019 as well as professional fees incurred in connection with the goodwill impairment charge recognized during the three months ended March 31, 2020.(6) We generally tax effect adjustments using a combined federal and state statutory income tax rate of approximately 23 percent.

Three Months Ended Years Ended Dec 31, Sep 30, Dec 31, December 31,(in thousands) 2020 2020 2019 2020 2019Diluted earnings(loss) per share $ 0.04 $ (0.04 ) $ (0.02 ) $ (5.01 ) $ 0.67 attributable toChampionXPer share adjustments:Goodwill andlong-lived asset ? ? ? 4.43 0.02 impairmentSeparation andsupplemental ? ? ? ? 0.08 benefit costsRestructuring andother related 0.02 0.02 0.03 0.16 0.12 chargesEnvironmental costs ? ? ? ? 0.02 Acquisition andintegration related 0.03 0.04 0.13 0.57 0.13 costsAcquisition-related (0.01 ) 0.02 ? 0.04 ? adjustmentsProfessional feesrelated to materialweakness ? ? 0.04 0.04 0.04 remediation andimpairment analysisIntellectual ? ? ? 0.01 0.01 property defenseTax impact of (0.01 ) (0.01 ) (0.05 ) (0.43 ) (0.10 ) adjustmentsAdjusted dilutedearnings (loss) per 0.07 0.03 0.13 (0.19 ) 0.99 share attributableto ChampionX

Free Cash Flow

Three Months Ended Years Ended Dec 31, Sep 30, Dec 31, December 31,(in 2020 2020 2019 2020 2019thousands)Free Cash FlowCashprovided by $ 120,608 $ 111,399 $ 32,509 $ 310,040 $ 155,899 operatingactivitiesLess:Capital (12,994 ) (12,847 ) (8,191 ) (45,163 ) (39,780 ) expendituresFree cash $ 107,614 $ 98,552 $ 24,318 $ 264,877 $ 116,119 flowCashtransaction 7,892 33,428 1,059 84,136 1,059 expensesAdjustedfree cash $ 115,506 $ 131,980 $ 25,377 $ 349,013 $ 117,178 flow Cash From Operating Activities to Revenue Ratio Cashprovided by $ 120,608 $ 111,399 $ 32,509 $ 310,040 $ 155,899 operatingactivitiesRevenue 706,122 633,526 247,748 1,899,996 1,131,251 Cash fromoperatingactivities 17 % 18 % 13 % 16 % 14 %to revenueratio Free Cash Flow to Revenue RatioFree cash $ 107,614 $ 98,552 $ 24,318 $ 264,877 $ 116,119 flowRevenue $ 706,122 $ 633,526 $ 247,748 $ 1,899,996 $ 1,131,251 Free cashflow to 15 % 16 % 10 % 14 % 10 %revenueratio

ChampionX is providing the below unaudited supplemental historical financial information of the Company on a non-GAAP adjusted basis for the three months ended December 31, 2020, September 30, 2020 and December31, 2019 and the years ended December31, 2020 and 2019 as if the Merger was completed on January 1, 2019, to assist investors in assessing ChampionXs historical performance on a basis that includes the combined results of operations of both legacy Apergy Corporation and legacy ChampionX. The unaudited pro forma historical financial information has been prepared by ChampionX using assumptions that ChampionX believes provide a reasonable basis for presenting the combination of the historical financial information of legacy Apergy and legacy ChampionX. As legacy ChampionX historically was unable to allocate certain charges on a segment basis, we have determined an allocation methodology for historical pro forma information to provide additional comparability amongst the legacy ChampionX segments. ChampionX management believes this unaudited supplemental historical financial information helps investors understand the long-term profitability trends of its newly combined business giving effect to the Merger and facilitates comparisons of our profitability to prior and future periods and to our peers. The supplemental unaudited financial information herein may not be comparable to similarly titled measures reported by other companies. The supplemental unaudited pro forma combined financial information does not purport to represent what the actual results of operations or the financial position of the combined company would have been had the Transactions occurred on the dates assumed, nor are they indicative of future results of operations or financial position of the combined company.

CHAMPIONX CORPORATIONPRO FORMA BUSINESS SEGMENT DATA(UNAUDITED)

Three Months Ended Years Ended Dec 31, Sep 30, Dec 31, December 31,(in 2020 2020 2019 2020 2019thousands)Segment revenue:ProductionChemical $ 446,652 $ 410,151 $ 518,181 $ 1,800,175 $ 2,011,724 TechnologiesProduction &Automation 158,777 136,921 203,625 615,918 884,364 TechnologiesDrilling 23,568 15,715 44,123 116,186 246,887 TechnologiesReservoirChemical 30,937 21,264 56,340 129,168 313,157 TechnologiesCorporate 46,188 49,475 76 113,580 222 and otherTotal $ 706,122 $ 633,526 $ 822,345 $ 2,775,027 $ 3,456,354 revenue Income (loss) before income taxes:Segmentoperating profit:ProductionChemical $ 49,973 $ 42,793 $ 80,527 $ 200,335 $ 246,913 TechnologiesProduction &Automation (4,711 ) (7,454 ) 2,175 (697,899 ) 54,024 TechnologiesDrilling 153 (5,127 ) 8,644 2,574 73,497 TechnologiesReservoirChemical 464 (3,562 ) (4,050 ) (174,635 ) 9,676 TechnologiesTotalsegmentoperating 45,879 26,650 87,296 (669,625 ) 384,110 profit(loss)Corporate 4,968 5,717 5,386 21,000 17,880 and otherInterest 15,495 15,935 18,144 65,433 77,741 expense, netIncome(loss) $ 25,416 $ 4,998 $ 63,766 $ (756,058 ) $ 288,489 beforeincome taxes Operatingprofitmargin /income (loss)beforeincome taxesmargin:ProductionChemical 11.2 % 10.4 % 15.5 % 11.1 % 12.3 %TechnologiesProduction &Automation (3.0 ) % (5.4 ) % 1.1 % (113.3 ) % 6.1 %TechnologiesDrilling 0.6 % (32.6 ) % 19.6 % 2.2 % 29.8 %TechnologiesReservoirChemical 1.5 % (16.8 ) % (7.2 ) % (135.2 ) % 3.1 %TechnologiesChampionX 3.6 % 0.8 % 7.8 % (27.2 ) % 8.3 %Consolidated Adjusted EBITDAProductionChemical 77,872 71,505 101,968 300,629 337,432 TechnologiesProduction &Automation 29,345 24,995 35,667 108,863 179,818 TechnologiesDrilling 2,525 (2,782 ) 11,412 17,312 83,871 TechnologiesReservoirChemical 2,204 (1,432 ) 2,450 (10,942 ) 36,560 TechnologiesCorporate (3,301 ) (5,464 ) (984 ) (11,424 ) (1,662 ) and otherAdjusted $ 108,645 $ 86,822 $ 150,513 $ 404,438 $ 636,019 EBITDA AdjustedEBITDA marginProductionChemical 17.4 % 17.4 % 19.7 % 16.7 % 16.8 %TechnologiesProduction &Automation 18.5 % 18.3 % 17.5 % 17.7 % 20.3 %TechnologiesDrilling 10.7 % (17.7 ) % 25.9 % 14.9 % 34.0 %TechnologiesReservoirChemical 7.1 % (6.7 ) % 4.3 % (8.5 ) % 11.7 %TechnologiesChampionX 15.4 % 13.7 % 18.3 % 14.6 % 18.4 %Consolidated

CHAMPIONX CORPORATIONPRO FORMA - RECONCILIATION GAAP TO NON-GAAP FINANCIAL MEASURES(UNAUDITED)

Three Months Ended Years Ended Dec 31, Sep 30, Dec 31, December 31,(in thousands) 2020 2020 2019 2020 2019Net income (loss)attributable to $ 12,305 $ 4,667 $ 65,996 $ (777,553 ) $ 229,126 ChampionXPre-tax adjustments:Goodwill andlong-lived asset ? ? ? 805,011 1,746 impairmentSeparation andsupplemental 105 383 331 539 6,377 benefit costsRestructuring andother related 4,971 3,426 6,351 27,979 23,974 chargesEnvironmental costs ? ? ? ? 1,988 Acquisition andintegration related 250 250 492 1,134 822 costsAcquisition-related (3,683 ) (4,367 ) ? (8,050 ) ? adjustmentsProfessional feesrelated to materialweakness 512 940 2,780 6,240 2,780 remediation andimpairment analysisIntellectual 478 408 400 1,278 400 property defenseTax impact of (603 ) (238 ) (2,370 ) (28,903 ) (8,718 ) adjustmentsAdjusted net income(loss) attributable 14,335 5,469 73,980 27,675 258,495 to ChampionXTax impact of 603 238 2,370 28,903 8,718 adjustmentsNet incomeattributable to 124 582 2,215 2,898 8,216 noncontrollinginterestDepreciation and 65,101 64,848 58,249 260,930 231,702 amortizationProvision for(benefit from) 12,987 (250 ) (4,445 ) 18,598 51,147 income taxesInterest expense, 15,495 15,935 18,144 65,434 77,741 netAdjusted EBITDA $ 108,645 $ 86,822 $ 150,513 $ 404,438 $ 636,019

CHAMPIONX CORPORATIONRECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES TO PRO FORMA FINANCIAL MEASURES(UNAUDITED)

Three Months Ended December 31, 2020(in thousands, except per share As Reported Adjustments Pro Formadata) ^(1)Revenue $ 706,122 $ ? $ 706,122 Net income (loss) attributable to $ 7,357 $ 4,948 $ 12,305 ChampionXPre-tax adjustments: Separation and supplemental benefit 105 ? 105 costsRestructuring and other related 4,971 ? 4,971 chargesAcquisition and integration related 5,854 (5,604 ) 250 costsAcquisition-related adjustments (2,878 ) (805 ) (3,683 ) Professional fees related tomaterial weakness remediation and 512 ? 512 impairment analysisIntellectual property defense 478 ? 478 Tax impact of adjustments (2,070 ) 1,467 (603 ) Adjusted net income (loss) 14,329 6 14,335 attributable to ChampionXTax impact of adjustments 2,070 (1,467 ) 603 Net income attributable to 124 ? 124 noncontrolling interestDepreciation and amortization 65,101 ? 65,101 Provision for (benefit from) income 11,526 1,461 12,987 taxesInterest expense, net 15,495 ? 15,495 Adjusted EBITDA $ 108,645 $ ? $ 108,645

Three Months Ended September 30, 2020(in thousands, except per share As Reported Adjustments Pro Formadata) ^(1)Revenue $ 633,526 $ ? $ 633,526 Net income (loss) attributable to $ (7,914 ) $ 12,581 $ 4,667 ChampionXPre-tax adjustments: Separation and supplemental 383 ? 383 benefit costsRestructuring and other related 3,426 ? 3,426 chargesAcquisition and integration 8,665 (8,415 ) 250 related costsAcquisition-related adjustments 3,511 (7,878 ) (4,367 ) Professional fees related tomaterial weakness remediation and 940 ? 940 impairment analysisIntellectual property defense 408 ? 408 Tax impact of adjustments (3,968 ) 3,730 (238 ) Adjusted net income attributable 5,451 18 5,469 to ChampionXTax impact of adjustments 3,968 (3,730 ) 238 Net income attributable to 582 ? 582 noncontrolling interestDepreciation and amortization 64,848 ? 64,848 Provision for (benefit from) (3,962 ) 3,712 (250 ) income taxesInterest expense, net 15,935 ? 15,935 Adjusted EBITDA $ 86,822 $ ? $ 86,822

Three Months Ended December 31, 2019(in thousands, except per share As Reported Adjustments ^ Pro Formadata) (1)Revenue $ 247,748 $ 574,597 $ 822,345 Net income (loss) attributable to $ (1,823 ) $ 67,819 $ 65,996 ChampionXPre-tax adjustments: Separation and supplemental 331 ? 331 benefit costsRestructuring and other related 2,556 3,795 6,351 chargesAcquisition and integration 9,815 (9,323 ) 492 related costsProfessional fees related tomaterial weakness remediation and 2,780 ? 2,780 impairment analysisIntellectual property defense 400 ? 400 Tax impact of adjustments (3,772 ) 1,402 (2,370 ) Adjusted net income attributable 10,287 63,693 73,980 to ChampionXTax impact of adjustments 3,772 (1,402 ) 2,370 Net income attributable to 249 1,966 2,215 noncontrolling interestDepreciation and amortization 30,308 27,941 58,249 Provision for income taxes (9,048 ) 4,603 (4,445 ) Interest expense, net 9,075 9,069 18,144 Adjusted EBITDA $ 44,643 $ 105,870 $ 150,513

Years Ended December 31, 2020(in thousands, except per As Reported Adjustments ^ Pro Formashare data) (1)Revenue $ 1,899,996 $ 875,031 $ 2,775,027 Net loss attributable to $ (743,930 ) $ (33,623 ) $ (777,553 ) ChampionXPre-tax adjustments: Goodwill and long-lived asset 657,251 147,760 805,011 impairmentSeparation and supplemental 539 ? 539 benefit costsRestructuring and other 23,291 4,688 27,979 related chargesAcquisition and integration 84,779 (83,645 ) 1,134 related costsAcquisition-related inventory 6,463 (14,513 ) (8,050 ) step-upProfessional fees related tomaterial weakness remediation 6,240 ? 6,240 and impairment analysisIntellectual property defense 1,278 ? 1,278 Tax impact of adjustments (63,368 ) 34,465 (28,903 ) Adjusted net income (loss) (27,457 ) 55,132 27,675 attributable to ChampionXTax impact of adjustments 63,368 (34,465 ) 28,903 Net income attributable to 1,577 1,321 2,898 noncontrolling interestDepreciation and amortization 214,362 46,568 260,930 Provision for (benefit from) (20,396 ) 38,994 18,598 income taxesInterest expense, net 51,731 13,703 65,434 Adjusted EBITDA $ 283,185 $ 121,253 $ 404,438

Years Ended December 31, 2019(in thousands, except per As Reported Adjustments ^ Pro Formashare data) (1)Revenue $ 1,131,251 $ 2,325,103 $ 3,456,354 Net income attributable to $ 52,164 $ 176,962 $ 229,126 ChampionXPre-tax adjustments: Goodwill and long-lived 1,746 ? 1,746 asset impairmentSeparation and supplemental 6,377 ? 6,377 benefit costsRestructuring and other 9,307 14,667 23,974 related chargesEnvironmental costs 1,988 ? 1,988 Acquisition and integration 10,145 (9,323 ) 822 related costsProfessional fees relatedto material weakness 2,780 ? 2,780 remediation and impairmentanalysisIntellectual property 400 ? 400 defenseTax impact of adjustments (7,777 ) (941 ) (8,718 ) Adjusted net income 77,130 181,365 258,495 attributable to ChampionXTax impact of adjustments 7,777 941 8,718 Net income attributable to 796 7,420 8,216 noncontrolling interestDepreciation and 119,938 111,764 231,702 amortizationProvision for income taxes 6,226 44,921 51,147 Interest expense, net 39,301 38,440 77,741 Adjusted EBITDA $ 251,168 $ 384,851 $ 636,019

_______________________(1)Includes the impact of the historical legacy ChampionX business on a stand-alone basis adjusted to give effect to the Merger under the acquisition method of accounting in accordance with Accounting Standards Codification 805,Business Combinations(ASC 805). The adjustments were prepared on the same basis as the adjustments included in our Registration Statement on Form S-4 (File No. 333-236379) and include a decrease in amortization and depreciation resulting from the preliminary purchase price adjustments, an increase in interest expense associated with the new term loan facility, removal of acquisition and integration related costs attributable to the Merger as well as the tax impact of those adjustments.