Cactus Announces Second Quarter 2022 Results
HOUSTON–(BUSINESS WIRE)–Cactus, Inc. (NYSE: WHD) (“Cactus” or the “Company”) today announced financial and operating results for the second quarter of 2022.
Second Quarter Highlights
- Revenue of $170.2 million and income from operations of $44.2 million;
- Net income of $35.8 million(1) and diluted earnings per Class A share of $0.44(1);
- Adjusted net income(2) of $33.4 million and diluted earnings per share, as adjusted(2) of $0.44;
- Net income margin of 21.0% and adjusted net income margin(2) of 19.6%;
- Adjusted EBITDA(3) and Adjusted EBITDA margin(3) of $55.5 million and 32.6%, respectively;
- Cash flow from operations of $31.0 million; and
- Cash balance of $311.7 million and no bank debt outstanding as of June 30, 2022.
Financial Summary
|
|
Three Months Ended |
||||||||||
|
|
June 30, |
|
March 31, |
|
June 30, |
||||||
|
|
2022 |
|
2022 |
|
2021 |
||||||
|
|
(in thousands) |
||||||||||
|
Revenues |
$ |
170,215 |
|
|
$ |
145,899 |
|
|
$ |
108,893 |
|
|
Income from operations |
$ |
44,241 |
|
|
$ |
30,990 |
|
|
$ |
17,314 |
|
|
Net income(1) |
$ |
35,780 |
|
|
$ |
27,083 |
|
|
$ |
14,774 |
|
|
Net income margin |
|
21.0 |
% |
|
|
18.6 |
% |
|
|
13.6 |
% |
|
Adjusted net income(2) |
$ |
33,409 |
|
|
$ |
22,859 |
|
|
$ |
12,336 |
|
|
Adjusted net income margin(2) |
|
19.6 |
% |
|
|
15.7 |
% |
|
|
11.3 |
% |
|
Adjusted EBITDA(3) |
$ |
55,506 |
|
|
$ |
42,333 |
|
|
$ |
28,908 |
|
|
Adjusted EBITDA margin(3) |
|
32.6 |
% |
|
|
29.0 |
% |
|
|
26.5 |
% |
|
(1) |
Net income during the first quarter of 2022 is inclusive of $1.1 million in other expense related to the revaluation of the tax receivable agreement (“TRA”) liability, a $1.0 million tax benefit related to the revaluation of our deferred tax asset and a $1.7 million tax benefit related to equity compensation. Net income during the second quarter of 2021 is inclusive of a $3.0 million income tax benefit associated with a partial release of a valuation allowance in connection with the redemption of units in Cactus Wellhead, LLC (“Cactus LLC”) by Cadent and other members during the period, $0.6 million of income tax expense related to changes in our foreign tax credit position and $1.0 million in other expense related to the revaluation of the TRA liability. |
|
|
(2) |
Adjusted net income, Adjusted net income margin and diluted earnings per share, as adjusted are non-GAAP financial measures. These figures assume Cactus, Inc. held all units in Cactus LLC, its operating subsidiary, at the beginning of the period. Additional information regarding non-GAAP measures and the reconciliation of GAAP to non-GAAP financial measures are in the Supplemental Information tables. |
|
|
(3) |
Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. See definition of these measures and the reconciliation of GAAP to non-GAAP financial measures in the Supplemental Information tables. |
Scott Bender, President and CEO of Cactus, commented, “We were pleased with our strong performance during the second quarter. Revenue growth during the period outpaced the change in the domestic rig count while margin improvement was robust across all business lines. Product revenue generated per U.S. land rig followed(1) was up over ten percent sequentially. In our Rental business line, revenue and margins continued their upward trajectory. In Field Service, steps taken during the second quarter to offset inflationary pressures impacting labor and transportation contributed to significant margin improvement.
“For the third quarter, we anticipate further revenue growth across our various business lines. Of note, the Company’s first Product sales into South America and the Middle East are expected to be recognized in the third quarter. We remain well positioned in our Rental business, as customers continue to recognize the value of our products and execution.”
Mr. Bender concluded, “Second quarter results demonstrated the emphasis we place on margins and returns. Management will continue to run the business with these values in mind. Additionally, we continue to focus on increasing the quality of our customer base in an industry where availability of resources, particularly labor, is tight. Looking forward, a continued focus on our supply chain leaves us well positioned to support additional activity gains. Finally, we are witnessing encouraging signs that the overall rate of cost inflation may be moderating.”
|
(1) |
Additional information regarding market share and rigs followed is located in the Supplemental Information tables. |
Revenue Categories
Product
|
|
Three Months Ended |
||||||||||
|
|
June 30, |
|
March 31, |
|
June 30, |
||||||
|
|
2022 |
|
2022 |
|
2021 |
||||||
|
|
(in thousands) |
||||||||||
|
Product revenue |
$ |
112,232 |
|
|
$ |
94,040 |
|
|
$ |
70,345 |
|
|
Gross profit |
$ |
43,060 |
|
|
$ |
33,120 |
|
|
$ |
22,245 |
|
|
Gross margin |
|
38.4 |
% |
|
|
35.2 |
% |
|
|
31.6 |
% |
Second quarter 2022 product revenue increased $18.2 million, or 19.3%, sequentially, as sales of wellhead and production related equipment increased due to higher drilling activity and cost recovery efforts. Gross profit increased $9.9 million, or 30.0%, sequentially, with margins increasing 320 basis points due to operating leverage and cost recovery.
Rental
|
|
Three Months Ended |
||||||||||
|
|
June 30, |
|
March 31, |
|
June 30, |
||||||
|
|
2022 |
|
2022 |
|
2021 |
||||||
|
|
(in thousands) |
||||||||||
|
Rental revenue |
$ |
23,695 |
|
|
$ |
22,343 |
|
|
$ |
14,644 |
|
|
Gross profit |
$ |
8,367 |
|
|
$ |
7,254 |
|
|
$ |
241 |
|
|
Gross margin |
|
35.3 |
% |
|
|
32.5 |
% |
|
1.6 |
% |
|
Second quarter 2022 rental revenue increased $1.4 million, or 6.1%, sequentially, due to higher customer activity. Gross profit increased $1.1 million sequentially and margins increased 280 basis points due to depreciation expense representing a lower percentage of revenue and lower equipment repair costs during the period.
Field Service and Other
|
|
Three Months Ended |
||||||||||
|
|
June 30, |
|
March 31, |
|
June 30, |
||||||
|
|
2022 |
|
2022 |
|
2021 |
||||||
|
|
(in thousands) |
||||||||||
|
Field service and other revenue |
$ |
34,288 |
|
|
$ |
29,516 |
|
|
$ |
23,904 |
|
|
Gross profit |
$ |
7,554 |
|
|
$ |
4,710 |
|
|
$ |
6,212 |
|
|
Gross margin |
|
22.0 |
% |
|
|
16.0 |
% |
|
26.0 |
% |
|
Second quarter 2022 field service and other revenue increased $4.8 million, or 16.2%, sequentially, as higher customer activity drove an increase in associated billable hours. The Company also took measures to address inflation in fuel and labor costs experienced this year. Gross profit increased $2.8 million, or 60.4%, sequentially, with margins increasing by 600 basis points sequentially.
Selling, General and Administrative Expenses (“SG&A”)
SG&A expense for the second quarter of 2022 was $14.7 million (8.7% of revenues), compared to $14.1 million (9.7% of revenues) for the first quarter of 2022 and $11.4 million (10.5% of revenues) for the second quarter of 2021. The sequential increase was primarily due to increased bonus accruals due to stronger than expected financial performance.
Liquidity, Capital Expenditures and Other
As of June 30, 2022, the Company had $311.7 million of cash and no bank debt outstanding. Operating cash flow was $31.0 million for the second quarter of 2022. During the second quarter, the Company made dividend payments and associated distributions of $8.3 million.
Net cash used in investing activities was $5.6 million during the second quarter of 2022, driven largely by additions to the Company’s fleet of rental equipment. For the full year 2022, the Company expects net capital expenditures to be in the range of $20 million to $30 million.
As of June 30, 2022, Cactus had 60,612,784 shares of Class A common stock outstanding (representing 79.9% of the total voting power) and 15,262,826 shares of Class B common stock outstanding (representing 20.1% of the total voting power).
Quarterly Dividend
The Board of Directors has approved a quarterly cash dividend of $0.11 per share of Class A common stock with payment to occur on September 15, 2022 to holders of record of Class A common stock at the close of business on August 29, 2022. A corresponding distribution of up to $0.11 per CW Unit has also been approved for holders of CW Units of Cactus Wellhead, LLC.
Conference Call Details
The Company will host a conference call to discuss financial and operational results on August 4, 2022 at 9:00 a.m. Central Time (10:00 a.m. Eastern Time).
The call will be webcast on Cactus’ website at www.CactusWHD.com. Please access the webcast for the call at least 10 minutes ahead of the start time to ensure a proper connection. Analysts and institutional investors may click here to pre-register for the conference call and obtain a dial-in number and passcode. An archived webcast of the conference call will be available on the Company’s website shortly after the end of the call.
About Cactus, Inc.
Cactus designs, manufactures, sells and rents a range of highly engineered wellhead and pressure control equipment. Its products are sold and rented principally for onshore unconventional oil and gas wells and are utilized during the drilling, completion and production phases of its customers’ wells. In addition, it provides field services for all its products and rental items to assist with the installation, maintenance and handling of the wellhead and pressure control equipment. Cactus operates service centers in the United States, which are strategically located in the key oil and gas producing regions, including the Permian, SCOOP/STACK, Marcellus, Utica, Haynesville, Eagle Ford and Bakken, among other areas, and in Eastern Australia. Cactus also conducts rental and service operations in the Kingdom of Saudi Arabia.
Cautionary Statement Concerning Forward-Looking Statements
Certain statements contained in this press release constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Cactus’ control, that could cause actual results to differ materially from the results discussed in the forward-looking statements.
Forward-looking statements can be identified by the use of forward-looking terminology including “may,” “believe,” “expect,” “intend,” “anticipate,” “estimate,” “continue,” “potential,” “will,” “hope” or other similar words and include the Company’s expectation of future performance contained herein. These statements discuss future expectations, contain projections of results of operations or of financial condition, or state other “forward-looking” information. You are cautioned not to place undue reliance on any forward-looking statements, which can be affected by assumptions used or by known risks or uncertainties. Consequently, no forward-looking statements can be guaranteed. When considering these forward-looking statements, you should keep in mind the risk factors and other factors noted in the Company’s Annual Report on Form 10-K, any Quarterly Reports on Form 10-Q and the other documents that the Company files with the Securities and Exchange Commission. The risk factors and other factors noted therein could cause actual results to differ materially from those contained in any forward-looking statement.
|
Cactus, Inc. Condensed Consolidated Statements of Income (unaudited) |
||||||||||||||
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|||||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|||||||
|
|
(in thousands, except per share data) |
|||||||||||||
|
Revenues |
|
|
|
|
|
|
|
|||||||
|
Product revenue |
$ |
112,232 |
|
$ |
70,345 |
|
|
$ |
206,272 |
|
|
$ |
122,301 |
|
|
Rental revenue |
|
23,695 |
|
|
14,644 |
|
|
|
46,038 |
|
|
|
27,133 |
|
|
Field service and other revenue |
|
34,288 |
|
|
23,904 |
|
|
|
63,804 |
|
|
|
43,876 |
|
|
Total revenues |
|
170,215 |
|
|
108,893 |
|
|
|
316,114 |
|
|
|
193,310 |
|
|
|
|
|
|
|
|
|
|
|||||||
|
Costs and expenses |
|
|
|
|
|
|
|
|||||||
|
Cost of product revenue |
|
69,172 |
|
|
48,100 |
|
|
|
130,092 |
|
|
|
84,621 |
|
|
Cost of rental revenue |
|
15,328 |
|
|
14,403 |
|
|
|
30,417 |
|
|
|
26,574 |
|
|
Cost of field service and other revenue |
|
26,734 |
|
|
17,692 |
|
|
|
51,540 |
|
|
|
32,155 |
|
|
Selling, general and administrative expenses |
|
14,740 |
|
|
11,384 |
|
|
|
28,834 |
|
|
|
21,011 |
|
|
Total costs and expenses |
|
125,974 |
|
|
91,579 |
|
|
|
240,883 |
|
|
|
164,361 |
|
|
Income from operations |
|
44,241 |
|
|
17,314 |
|
|
|
75,231 |
|
|
|
28,949 |
|
|
|
|
|
|
|
|
|
|
|||||||
|
Interest income (expense), net |
|
304 |
|
|
(181 |
) |
|
|
204 |
|
|
|
(333 |
) |
|
Other expense, net |
|
— |
|
|
(1,004 |
) |
|
|
(1,115 |
) |
|
|
(1,410 |
) |
|
Income before income taxes |
|
44,545 |
|
|
16,129 |
|
|
|
74,320 |
|
|
|
27,206 |
|
|
Income tax expense (benefit) |
|
8,765 |
|
|
1,355 |
|
|
|
11,457 |
|
|
|
(2,704 |
) |
|
Net income |
$ |
35,780 |
|
$ |
14,774 |
|
|
$ |
62,863 |
|
|
$ |
29,910 |
|
|
Less: net income attributable to non-controlling interest |
|
8,636 |
|
|
4,381 |
|
|
|
15,103 |
|
|
|
7,958 |
|
|
Net income attributable to Cactus, Inc. |
$ |
27,144 |
|
$ |
10,393 |
|
|
$ |
47,760 |
|
|
$ |
21,952 |
|
|
|
|
|
|
|
|
|
|
|||||||
|
Earnings per Class A share – basic |
$ |
0.45 |
|
$ |
0.19 |
|
|
$ |
0.80 |
|
|
$ |
0.42 |
|
|
Earnings per Class A share – diluted (a) |
$ |
0.44 |
|
$ |
0.18 |
|
|
$ |
0.78 |
|
|
$ |
0.37 |
|
|
|
|
|
|
|
|
|
|
|||||||
|
Weighted average shares outstanding – basic |
|
60,523 |
|
|
55,048 |
|
|
|
59,909 |
|
|
|
52,124 |
|
|
Weighted average shares outstanding – diluted (a) |
|
76,322 |
|
|
75,997 |
|
|
|
76,262 |
|
|
|
75,955 |
|
|
(a) |
Dilution for the three and six months ended June 30, 2022 includes $9.0 million and $15.7 million, respectively, of additional pre-tax income attributable to non-controlling interest adjusted for a corporate effective tax rate of 25.0% and 15.4 million and 15.9 million weighted average shares of Class B common stock outstanding, plus the effect of dilutive securities. Dilution for the three and six months ended June 30, 2021 includes $4.6 million and $8.5 million, respectively, of additional pre-tax income attributable to non-controlling interest adjusted for a corporate effective tax rate of 28% and 20.7 and 23.5 million weighted average shares of Class B common stock outstanding, respectively, plus the effect of dilutive securities. |
|
Cactus, Inc. Condensed Consolidated Balance Sheets (unaudited) |
|||||
|
|
June 30, |
|
December 31, |
||
|
|
2022 |
|
2021 |
||
|
|
(in thousands) |
||||
|
Assets |
|
|
|
||
|
Current assets |
|
|
|
||
|
Cash and cash equivalents |
$ |
311,684 |
|
$ |
301,669 |
|
Accounts receivable, net |
|
125,821 |
|
|
89,205 |
|
Inventories |
|
149,037 |
|
|
119,817 |
|
Prepaid expenses and other current assets |
|
7,985 |
|
|
7,794 |
|
Total current assets |
|
594,527 |
|
|
518,485 |
|
|
|
|
|
||
|
Property and equipment, net |
|
130,376 |
|
|
129,117 |
|
Operating lease right-of-use assets, net |
|
20,910 |
|
|
22,538 |
|
Goodwill |
|
7,824 |
|
|
7,824 |
|
Deferred tax asset, net |
|
315,495 |
|
|
303,074 |
|
Other noncurrent assets |
|
992 |
|
|
1,040 |
|
Total assets |
$ |
1,070,124 |
|
$ |
982,078 |
|
|
|
|
|
||
|
Liabilities and Equity |
|
|
|
||
|
Current liabilities |
|
|
|
||
|
Accounts payable |
$ |
57,366 |
|
$ |
42,818 |
|
Accrued expenses and other current liabilities |
|
33,620 |
|
|
28,240 |
|
Current portion of liability related to tax receivable agreement |
|
11,769 |
|
|
11,769 |
|
Finance lease obligations, current portion |
|
5,630 |
|
|
4,867 |
|
Operating lease liabilities, current portion |
|
5,253 |
|
|
4,880 |
|
Total current liabilities |
|
113,638 |
|
|
92,574 |
|
|
|
|
|
||
|
Deferred tax liability, net |
|
1,247 |
|
|
1,172 |
|
Liability related to tax receivable agreement, net of current portion |
|
288,659 |
|
|
269,838 |
|
Finance lease obligations, net of current portion |
|
6,912 |
|
|
5,811 |
|
Operating lease liabilities, net of current portion |
|
15,860 |
|
|
17,650 |
|
Total liabilities |
|
426,316 |
|
|
387,045 |
|
|
|
|
|
||
|
Equity |
|
643,808 |
|
|
595,033 |
|
Total liabilities and equity |
$ |
1,070,124 |
|
$ |
982,078 |
|
Cactus, Inc. Condensed Consolidated Statements of Cash Flows (unaudited) |
|||||||
|
|
Six Months Ended |
||||||
|
|
2022 |
|
2021 |
||||
|
|
(in thousands) |
||||||
|
Cash flows from operating activities |
|
|
|
||||
|
Net income |
$ |
62,863 |
|
|
$ |
29,910 |
|
|
Reconciliation of net income to net cash provided by operating activities |
|
|
|
||||
|
Depreciation and amortization |
|
17,592 |
|
|
|
18,352 |
|
|
Deferred financing cost amortization |
|
84 |
|
|
|
84 |
|
|
Stock-based compensation |
|
5,016 |
|
|
|
4,438 |
|
|
Provision for expected credit losses |
|
240 |
|
|
|
149 |
|
|
Inventory obsolescence |
|
959 |
|
|
|
1,566 |
|
|
Gain on disposal of assets |
|
(518 |
) |
|
|
(613 |
) |
|
Deferred income taxes |
|
8,504 |
|
|
|
(4,506 |
) |
|
Loss from revaluation of liability related to tax receivable agreement |
|
1,115 |
|
|
|
1,004 |
|
|
Changes in operating assets and liabilities: |
|
|
|
||||
|
Accounts receivable |
|
(36,484 |
) |
|
|
(27,858 |
) |
|
Inventories |
|
(30,670 |
) |
|
|
(2,569 |
) |
|
Prepaid expenses and other assets |
|
(210 |
) |
|
|
499 |
|
|
Accounts payable |
|
14,238 |
|
|
|
12,774 |
|
|
Accrued expenses and other liabilities |
|
5,494 |
|
|
|
9,999 |
|
|
Net cash provided by operating activities |
|
48,223 |
|
|
|
43,229 |
|
|
|
|
|
|
||||
|
Cash flows from investing activities |
|
|
|
||||
|
Capital expenditures and other |
|
(13,752 |
) |
|
|
(5,461 |
) |
|
Proceeds from sale of assets |
|
876 |
|
|
|
1,108 |
|
|
Net cash used in investing activities |
|
(12,876 |
) |
|
|
(4,353 |
) |
|
|
|
|
|
||||
|
Cash flows from financing activities |
|
|
|
||||
|
Payments on finance leases |
|
(2,987 |
) |
|
|
(2,479 |
) |
|
Dividends paid to Class A common stock shareholders |
|
(13,335 |
) |
|
|
(9,426 |
) |
|
Distributions to members |
|
(3,348 |
) |
|
|
(3,560 |
) |
|
Repurchase of shares |
|
(4,495 |
) |
|
|
(3,174 |
) |
|
Net cash used in financing activities |
|
(24,165 |
) |
|
|
(18,639 |
) |
|
|
|
|
|
||||
|
Effect of exchange rate changes on cash and cash equivalents |
|
(1,167 |
) |
|
|
186 |
|
|
|
|
|
|
||||
|
Net increase in cash and cash equivalents |
|
10,015 |
|
|
|
20,423 |
|
|
|
|
|
|
||||
|
Cash and cash equivalents |
|
|
|
||||
|
Beginning of period |
|
301,669 |
|
|
|
288,659 |
|
|
End of period |
$ |
311,684 |
|
|
$ |
309,082 |
|
|
Cactus, Inc. – Supplemental Information Reconciliation of GAAP to non-GAAP Financial Measures Adjusted net income, diluted earnings per share, as adjusted and adjusted net income margin (unaudited) |
|||||||||||
| Adjusted net income, diluted earnings per share, as adjusted and adjusted net income margin are not measures of net income as determined by GAAP but they are supplemental non-GAAP financial measures that are used by management and external users of the Company’s consolidated financial statements. Cactus defines adjusted net income as net income assuming Cactus, Inc. held all units in Cactus LLC, its operating subsidiary, at the beginning of the period, with the resulting additional income tax expense related to the incremental income attributable to Cactus, Inc. Adjusted net income also includes certain other adjustments described below. Cactus defines diluted earnings per share, as adjusted as Adjusted net income divided by weighted average shares outstanding, as adjusted. Cactus defines Adjusted net income margin as Adjusted net income divided by total revenue. The Company believes this supplemental information is useful for evaluating performance period over period. | |||||||||||
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Three Months Ended |
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June 30, |
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March 31, |
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June 30, |
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2022 |
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2022 |
|
2021 |
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|
(in thousands, except per share data) |
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Net income |
$ |
35,780 |
|
|
$ |
27,083 |
|
|
$ |
14,774 |
|
|
Adjustments: |
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|
|
|
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Other non-operating expense, pre-tax(1) |
|
— |
|
|
|
1,115 |
|
|
|
1,004 |
|
|
Income tax expense differential(2) |
|
(2,371 |
) |
|
|
(5,339 |
) |
|
|
(3,442 |
) |
|
Adjusted net income |
$ |
33,409 |
|
|
$ |
22,859 |
|
|
$ |
12,336 |
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|
|
|
|
|
|
|
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Diluted earnings per share, as adjusted |
$ |
0.44 |
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|
$ |
0.30 |
|
|
$ |
0.16 |
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|
|
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|
|
|
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Weighted average shares outstanding, as adjusted(3) |
|
76,322 |
|
|
|
76,162 |
|
|
|
75,997 |
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|
|
|
|
|
|
|
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Revenue |
$ |
170,215 |
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|
$ |
145,899 |
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|
$ |
108,893 |
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|
Net income margin(4) |
|
21.0 |
% |
|
|
18.6 |
% |
|
|
13.6 |
% |
|
Adjusted net income margin |
|
19.6 |
% |
|
|
15.7 |
% |
|
|
11.3 |
% |
|
(1) |
Represents non-cash adjustments for the revaluation of the liability related to the TRA. |
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|
(2) |
Represents the increase or decrease in tax expense as though Cactus, Inc. owned 100% of Cactus LLC at the beginning of the period, calculated as the difference in tax expense recorded during each period and what would have been recorded, adjusted for pre-tax items listed above, based on a corporate effective tax rate of 25% on income before income taxes for the three months ended June 30, 2022, 26% for the three months ended March 31, 2022, and 28% for the three months ended June 30, 2021. |
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(3) |
Reflects 60.5, 59.3, and 55.0 million weighted average shares of basic Class A common stock outstanding and 15.4, 16.5 and 20.7 million of additional shares for the three months ended June 30, 2022, March 31, 2022 and June 30, 2021, respectively, as if the weighted average shares of Class B common stock were exchanged and cancelled for Class A common stock at the beginning of the period, plus the effect of dilutive securities. |
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(4) |
Net income margin represents net income divided by total revenue. |
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Cactus, Inc. – Supplemental Information Reconciliation of GAAP to non-GAAP Financial Measures EBITDA, Adjusted EBITDA and Adjusted EBITDA margin (unaudited) |
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EBITDA, Adjusted EBITDA and Adjusted EBITDA margin are not measures of net income as determined by GAAP but are supplemental non-GAAP financial measures that are used by management and external users of the Company’s consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. Cactus defines EBITDA as net income excluding net interest, income tax and depreciation and amortization. Cactus defines Adjusted EBITDA as EBITDA excluding the other items outlined below. |
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Cactus management believes EBITDA and Adjusted EBITDA are useful because they allow management to more effectively evaluate the Company’s operating performance and compare the results of its operations from period to period without regard to financing methods or capital structure, or other items that impact comparability of financial results from period to period. EBITDA and Adjusted EBITDA should not be considered as alternatives to, or more meaningful than, net income or any other measure as determined in accordance with GAAP. The Company’s computations of EBITDA and Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. Cactus defines Adjusted EBITDA margin as Adjusted EBITDA divided by total revenue. Cactus presents this supplemental information because it believes it provides useful information regarding the factors and trends affecting the Company’s business. |
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Three Months Ended |
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Six Months Ended |
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June 30, |
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March 31, |
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June 30, |
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June 30, |
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2022 |
|
2022 |
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2021 |
|
2022 |
|
2021 |
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|
(in thousands) |
|
(in thousands) |
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|
Net income |
$ |
35,780 |
|
|
$ |
27,083 |
|
|
$ |
14,774 |
|
|
$ |
62,863 |
|
|
$ |
29,910 |
|
|
Interest (income) expense, net |
|
(304 |
) |
|
|
100 |
|
|
|
181 |
|
|
|
(204 |
) |
|
|
333 |
|
|
Income tax expense (benefit) |
|
8,765 |
|
|
|
2,692 |
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|
|
1,355 |
|
|
|
11,457 |
|
|
|
(2,704 |
) |
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Depreciation and amortization |
|
8,915 |
|
|
|
8,677 |
|
|
|
9,159 |
|
|
|
17,592 |
|
|
|
18,352 |
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EBITDA |
|
53,156 |
|
|
|
38,552 |
|
|
|
25,469 |
|
|
|
91,708 |
|
|
|
45,891 |
|
|
Other non-operating expense(1) |
|
— |
|
|
|
1,115 |
|
|
|
1,004 |
|
|
|
1,115 |
|
|
|
1,004 |
|
|
Secondary offering related expenses(2) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
406 |
|
|
Stock-based compensation |
|
2,350 |
|
|
|
2,666 |
|
|
|
2,435 |
|
|
|
5,016 |
|
|
|
4,438 |
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|
Adjusted EBITDA |
$ |
55,506 |
|
|
$ |
42,333 |
|
|
$ |
28,908 |
|
|
$ |
97,839 |
|
|
$ |
51,739 |
|
|
|
|
|
|
|
|
|
|
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Revenue |
$ |
170,215 |
|
|
$ |
145,899 |
|
|
$ |
108,893 |
|
|
$ |
316,114 |
|
|
$ |
193,310 |
|
|
Net income margin(3) |
|
21.0 |
% |
|
|
18.6 |
% |
|
|
13.6 |
% |
|
|
19.9 |
% |
|
|
15.5 |
% |
|
Adjusted EBITDA margin |
|
32.6 |
% |
|
|
29.0 |
% |
|
|
26.5 |
% |
|
|
31.0 |
% |
|
|
26.8 |
% |
|
(1) |
Represents non-cash adjustments for the revaluation of the liability related to the TRA. |
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|
(2) |
Reflects fees and expenses recorded in the first quarter of 2021 in connection with the offering of Class A common stock by certain selling stockholders, excluding underwriting discounts and selling commissions incurred by the selling stockholders. |
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(3) |
Net income margin represents net income divided by total revenue. |
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Cactus, Inc. – Supplemental Information Depreciation and Amortization by Category (unaudited) |
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Three Months Ended |
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Six Months Ended |
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|
June 30, |
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March 31, |
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June 30, |
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June 30, |
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|
2022 |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
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(in thousands) |
|
(in thousands) |
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|
Cost of product revenue |
$ |
751 |
|
$ |
748 |
|
$ |
814 |
|
$ |
1,499 |
|
$ |
1,620 |
|
Cost of rental revenue |
|
6,252 |
|
|
6,167 |
|
|
6,491 |
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|
12,419 |
|
|
13,116 |
|
Cost of field service and other revenue |
|
1,802 |
|
|
1,673 |
|
|
1,753 |
|
|
3,475 |
|
|
3,408 |
|
Selling, general and administrative expenses |
|
110 |
|
|
89 |
|
|
101 |
|
|
199 |
|
|
208 |
|
Total depreciation and amortization |
$ |
8,915 |
|
$ |
8,677 |
|
$ |
9,159 |
|
$ |
17,592 |
|
$ |
18,352 |
|
Cactus, Inc. – Supplemental Information Estimated Market Share (unaudited) |
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Market share represents the average number of active U.S. onshore rigs Cactus followed (which Cactus defines as the number of active U.S. onshore drilling rigs to which it was the primary provider of wellhead products and corresponding services during drilling) as of mid-month for each of the three months in the applicable quarter divided by the Baker Hughes U.S. onshore rig count quarterly average. Cactus believes that comparing the total number of active U.S. onshore rigs to which it was providing its products and services at a given time to the number of active U.S. onshore rigs during the same period provides Cactus with a reasonable approximation of its market share with respect to wellhead products sold and the corresponding services it provides. |
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Three Months Ended |
|||||||
|
|
June 30, |
|
March 31, |
|
June 30, |
|||
|
|
2022 |
|
2022 |
|
2021 |
|||
|
Cactus U.S. onshore rigs followed |
275 |
|
|
254 |
|
|
182 |
|
|
Baker Hughes U.S. onshore rig count quarterly average |
697 |
|
|
616 |
|
|
436 |
|
|
Market share |
39.5 |
% |
|
41.2 |
% |
|
41.7 |
% |
Contacts
Cactus, Inc.
John Fitzgerald, 713-904-4655
Director of Corporate Development and Investor Relations
