Cactus, Inc. (NYSE: WHD) (“Cactus” or the “Company”) today
announced financial and operating results for the first quarter of
2023.
First Quarter Highlights
- Closed the acquisition of HighRidge Resources, Inc.
(“FlexSteel”) on February 28, 2023(1);
- Revenue of $228.4 million and operating income of $49.7
million;
- Net income of $52.3 million and diluted earnings per Class A
share of $0.63;
- Adjusted net income(2) of $50.7 million and diluted earnings
per share, as adjusted(2) of $0.64;
- Net income margin of 22.9% and adjusted net income margin(2) of
22.2%;
- Adjusted EBITDA(3) and Adjusted EBITDA margin(3) of $79.4
million and 34.8%, respectively;
- Cash flow from operations of $60.5 million;
- In January 2023, Cactus closed an underwritten offering of
Class A common stock for net proceeds of $165.6 million; and
- Subsequent to the end of the first quarter, the Company paid
down the Term Loan debt balance by $60 million.
Financial Summary
Three Months Ended
March 31,
December 31,
March 31,
2023(1)
2022
2022
($ in thousands)
Revenues
$
228,405
$
187,774
$
145,899
Operating income
$
49,688
$
48,221
$
30,990
Operating income margin
21.8
%
25.7
%
21.2
%
Net income
$
52,288
$
40,739
$
27,083
Net income margin
22.9
%
21.7
%
18.6
%
Adjusted net income(2)
$
50,682
$
43,525
$
22,859
Adjusted net income margin(2)
22.2
%
23.2
%
15.7
%
Adjusted EBITDA(3)
$
79,411
$
66,393
$
42,333
Adjusted EBITDA margin(3)
34.8
%
35.4
%
29.0
%
(1)
First quarter 2023 results throughout
include one month of FlexSteel operating results.
(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 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, “I am very
pleased with our performance in the first quarter. The strength of
our customer base and our continued focus on execution allowed us
to achieve record Cactus Product market share(1) of over 43% during
the period. Cactus’ rigs followed increased by approximately 6%
despite the average U.S. land rig count declining by approximately
2%. Additionally, we are pleased to include one month of FlexSteel
results in our first quarter following the close of the acquisition
on February 28, 2023. FlexSteel revenue exceeded expectations due
to increased shipments of its equipment.
“Looking ahead to the second quarter, we anticipate revenue to
be up over 25% sequentially due to a full quarter's contribution
from FlexSteel. While the recent movement in commodity prices is
likely to pressure U.S. land activity, Cactus remains
well-positioned to outpace the market given our unique product
portfolio and customer relationships.”
Mr. Bender concluded, “We have been pleased with early efforts
to integrate the FlexSteel business, and the opportunities between
the two businesses are even more apparent post-closing. Both
businesses manufacture highly differentiated products, have modest
capital requirements, and have attractive growth potential. We
expect that free cash flow over the coming quarters should enable
Cactus to meaningfully reduce leverage following the acquisition.
As always, management intends to operate with a focus on margins,
returns and generating value for shareholders.”
(1)
Additional information regarding market
share and rigs followed is located in the Supplemental Information
tables.
Segment Performance
Upon completion of the FlexSteel acquisition, we re-evaluated
our reportable segments and now report two business segments,
Pressure Control (legacy Cactus) and Spoolable Technologies
(FlexSteel). For the first quarter of 2023, we have included our
Pressure Control results in historical detail as supplemental
information in this release. Starting with the second quarter of
2023, we intend to only report our Pressure Control results and
Spoolable Technologies results as presented below. For the first
quarter of 2023, all corporate and other costs not directly
attributable to either segment have been included in Pressure
Control results.
Pressure Control
Three Months Ended
March 31,
December 31,
March 31,
2023
2022
2022
(in thousands)
Pressure Control
Revenue
$
194,655
$
187,774
$
145,899
Operating income
$
49,439
$
48,221
$
30,990
Other non-operating income
(expense)(1)
3,417
(1,920
)
(1,115
)
Depreciation and amortization expense
7,992
8,133
8,677
Segment EBITDA(2)
60,848
54,434
38,552
Stock-based compensation
3,091
2,597
2,666
Other non-operating (income)
expense(1)
(3,417
)
1,920
1,115
Transaction related expenses(3)
8,581
7,442
—
Adjusted Segment EBITDA(2)
$
69,103
$
66,393
$
42,333
Operating income margin
25.4
%
25.7
%
21.2
%
Adjusted Segment EBITDA margin(2)
35.5
%
35.4
%
29.0
%
(1)
Represents non-cash adjustments for the
revaluation of the liability related to the TRA.
(2)
Segment EBITDA, Adjusted Segment EBITDA
and Adjusted Segment 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.
(3)
Reflects fees and expenses recorded in
connection with the FlexSteel Acquisition and related
financing.
First quarter 2023 Pressure Control revenue increased $6.9
million, or 3.7%, sequentially, as sales of wellhead and production
related equipment along with associated services improved primarily
due to higher customer drilling activity. Operating income
increased $1.2 million, or 2.5%, sequentially, with margins
decreasing 30 basis points due to higher transaction expenses and
rental equipment redeployment costs. Adjusted Segment EBITDA
increased $2.7 million, or 4.1%, sequentially, with Adjusted
Segment EBITDA margins increasing 10 basis points due to higher
operating leverage.
Spoolable Technologies
Three Months Ended
March 31,
December 31,
March 31,
2023
2022
2022
(in
thousands)
Spoolable Technologies
Revenue
$
33,750
$
—
$
—
Operating income
249
—
—
Other non-operating income
(expense)(1)
121
—
—
Depreciation and amortization expense
5,118
—
—
Segment EBITDA(2)
5,488
—
—
Stock-based compensation
750
—
—
Other non-operating (income)
expense(1)
(121
)
—
—
Inventory step-up expense(3)
4,191
—
—
Adjusted Segment EBITDA(2)
$
10,308
$
—
$
—
Operating income margin
0.7
%
n/a
n/a
Adjusted Segment EBITDA margin(2)
30.5
%
n/a
n/a
(1)
Represents a $0.1 million gain for the
revaluation of the earn-out liability associated with the FlexSteel
Acquisition.
(2)
Segment EBITDA, Adjusted Segment EBITDA
and Adjusted Segment 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.
(3)
Represents amortization of the FlexSteel
inventory step-up adjustment due to purchase price accounting.
In the last month of the first quarter of 2023 (acquisition date
through March 31, 2023), Spoolable Technologies generated revenue
of $33.8 million and segment operating income of $0.2 million.
Segment operating margin was 0.7%. Operating income was inclusive
of $4.2 million of inventory step-up costs associated with the
step-up in value of inventory on hand at acquisition and $3.7
million of intangible amortization expense.
Liquidity, Capital Expenditures and Other
As of March 31, 2023, the Company had $155.0 million gross bank
debt, $75.4 million of cash, and $193.3 million availability on our
revolving credit facility. Operating cash flow was $60.5 million
for the first quarter of 2023. During the first quarter, the
Company made dividend payments and associated distributions of $9.0
million.
Net cash used in investing activities represented $633.2 million
during the first quarter of 2023 due primarily to the FlexSteel
acquisition. Net capital expenditures were $14.3 million, inclusive
of the $7.0 million purchase of a previously leased facility. For
the full year 2023, the Company expects net capital expenditures to
be in the range of $45 million to $55 million, inclusive of capital
directed toward planned international expansion and the FlexSteel
business.
On January 13, 2023, Cactus closed an underwritten offering of
3,224,300 shares of its Class A common stock for total net proceeds
of approximately $165.6 million, net of underwriting discounts and
selling commissions. The net proceeds from the sale of the Class A
common stock in the offering were utilized to fund a portion of the
initial closing price for the FlexSteel Acquisition.
As of March 31, 2023, Cactus had 64,448,377 shares of Class A
common stock outstanding (representing 81.1% of the total voting
power) and 14,978,225 shares of Class B common stock outstanding
(representing 18.9% of the total voting power).
Quarterly Dividend
In May 2023 the Board approved a quarterly cash dividend of
$0.11 per share of Class A common stock with payment to occur on
June 15, 2023 to holders of record of Class A common stock at the
close of business on May 30, 2023. A corresponding distribution of
up to $0.11 per CC Unit has also been approved for holders of CC
Units of Cactus Companies, LLC.
Conference Call Details
The Company will host a conference call to discuss financial and
operational results today, Tuesday, May 9, 2023 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 or rents a range of highly
engineered wellhead, pressure control and spoolable pipe
technologies. 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 its products and
rental items to assist with the installation, maintenance and
handling of the equipment. Cactus operates service centers
throughout North America and Australia, while also providing
equipment and services in select international markets.
Cautionary Statement Concerning Forward-Looking
Statements
Certain statements contained in this press release and oral
statements made regarding the matters addressed in this 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,” “plan,” “should,” “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 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 disclaims any duty to update
and does not intend to update any forward-looking statements, all
of which are expressly qualified by the statements in this section,
to reflect events or circumstances after the date of this press
release.
Cactus, Inc.
Condensed Consolidated
Statements of Income
(unaudited)
Three Months Ended
March 31,
2023
2022
(in thousands, except per
share data)
Revenues
Pressure Control revenue
$
194,655
$
145,899
Spoolable Technologies revenue
33,750
—
Total revenues
228,405
145,899
Operating income
Pressure Control operating income
49,439
30,990
Spoolable Technologies operating
income
249
—
Total operating income
49,688
30,990
Interest income (expense), net
1,002
(100
)
Other income (expense), net
3,538
(1,115
)
Income before income taxes
54,228
29,775
Income tax expense
1,940
2,692
Net income
$
52,288
$
27,083
Less: net income attributable to
non-controlling interest
9,394
6,467
Net income attributable to Cactus,
Inc.
$
42,894
$
20,616
Earnings per Class A share - basic
$
0.67
$
0.35
Earnings per Class A share - diluted
(a)
$
0.63
$
0.34
Weighted average shares outstanding -
basic
63,740
59,288
Weighted average shares outstanding -
diluted (a)
79,155
76,162
(a)
Dilution for the three months ended March
31, 2023 includes $9.7 million of additional pre-tax income
attributable to non-controlling interest adjusted for a corporate
effective tax rate of 24.5% and 15.0 million weighted average
shares of Class B common stock outstanding plus the effect of
dilutive securities. Dilution for the three months ended March 31,
2022 includes $6.7 million of additional pre-tax income
attributable to non-controlling interest adjusted for a corporate
effective tax rate of 26.0% and 16.5 million weighted average
shares of Class B common stock outstanding plus the effect of
dilutive securities.
Cactus, Inc.
Condensed Consolidated Balance
Sheets
(unaudited)
March 31,
December 31,
2023
2022
(in thousands)
Assets
Current assets
Cash and cash equivalents
$
75,422
$
344,527
Accounts receivable, net
209,442
138,268
Inventories
232,598
161,283
Prepaid expenses and other current
assets
9,993
10,564
Total current assets
527,455
654,642
Property and equipment, net
351,302
129,998
Operating lease right-of-use assets,
net
22,028
23,183
Intangible assets, net
196,634
—
Goodwill
201,302
7,824
Deferred tax asset, net
211,460
301,644
Other noncurrent assets
10,086
1,605
Total assets
$
1,520,267
$
1,118,896
Liabilities and Equity
Current liabilities
Accounts payable
$
56,743
$
47,776
Accrued expenses and other current
liabilities
50,766
30,619
Current portion of liability related to
tax receivable agreement
27,544
27,544
Finance lease obligations, current
portion
7,242
5,933
Operating lease liabilities, current
portion
4,521
4,777
Long-term debt, current portion
39,750
—
Total current liabilities
186,566
116,649
Deferred tax liability, net
2,123
1,966
Liability related to tax receivable
agreement, net of current portion
261,607
265,025
Finance lease obligations, net of current
portion
8,900
6,436
Operating lease liabilities, net of
current portion
17,429
18,375
Long-term debt, net of current portion
111,967
—
Other noncurrent liabilities
5,839
—
Total liabilities
594,431
408,451
Equity
925,836
710,445
Total liabilities and equity
$
1,520,267
$
1,118,896
Cactus, Inc.
Condensed Consolidated
Statements of Cash Flows
(unaudited)
Three Months Ended
March 31,
2023
2022
(in thousands)
Cash flows from operating
activities
Net income
$
52,288
$
27,083
Reconciliation of net income to net cash
provided by operating activities
Depreciation and amortization
13,110
8,677
Deferred financing cost amortization
291
42
Stock-based compensation
3,841
2,666
Provision for expected credit losses
(376
)
(110
)
Inventory obsolescence
576
480
Gain on disposal of assets
(1,033
)
(293
)
Deferred income taxes
(1,406
)
1,919
Change in fair value of earn-out
liability
(121
)
—
(Gain) loss from revaluation of liability
related to tax receivable agreement
(3,417
)
1,115
Changes in operating assets and
liabilities:
Accounts receivable
(12,883
)
(14,681
)
Inventories
20,565
(16,648
)
Prepaid expenses and other assets
2,151
(463
)
Accounts payable
(6,282
)
6,934
Accrued expenses and other liabilities
(6,842
)
488
Net cash provided by operating
activities
60,462
17,209
Cash flows from investing
activities
Acquisition of a business, net of cash and
cash equivalents acquired
(618,857
)
—
Capital expenditures and other
(15,928
)
(7,652
)
Proceeds from sales of assets
1,633
358
Net cash used in investing activities
(633,152
)
(7,294
)
Cash flows from financing
activities
Proceeds from issuance of long-term
debt
155,000
—
Net proceeds from the issuance of Class A
common stock
169,878
—
Payments of deferred financing costs
(6,665
)
—
Payments on finance leases
(1,709
)
(1,438
)
Dividends paid to Class A common stock
shareholders
(7,353
)
(6,664
)
Distributions to members
(1,645
)
(1,654
)
Repurchase of shares
(4,343
)
(4,424
)
Net cash provided by (used in) financing
activities
303,163
(14,180
)
Effect of exchange rate changes on cash
and cash equivalents
422
337
Net decrease in cash and cash
equivalents
(269,105
)
(3,928
)
Cash and cash equivalents
Beginning of period
344,527
301,669
End of period
$
75,422
$
297,741
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 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.
Three Months Ended
March 31,
December 31,
March 31,
2023
2022
2022
(in thousands, except per
share data)
Net income
$
52,288
$
40,739
$
27,083
Adjustments:
Other non-operating (income) expense,
pre-tax(1)
(3,538
)
1,920
1,115
Transaction related expenses,
pre-tax(2)
8,581
7,442
—
Intangible amortization expense(3)
3,666
—
—
Inventory step-up expense(4)
4,191
—
—
Income tax expense differential(5)
(14,506
)
(6,576
)
(5,339
)
Adjusted net income
$
50,682
$
43,525
$
22,859
Diluted earnings per share, as
adjusted
$
0.64
$
0.57
$
0.30
Weighted average shares outstanding, as
adjusted(6)
79,155
76,410
76,162
Revenue
$
228,405
$
187,774
$
145,899
Net income margin
22.9
%
21.7
%
18.6
%
Adjusted net income margin
22.2
%
23.2
%
15.7
%
(1)
Primarily represents non-cash adjustments
for the revaluation of the liability related to the TRA.
(2)
Reflects fees and expenses recorded in
connection with the FlexSteel Acquisition and related
financing.
(3)
Reflects amortization expense associated
with the step-up in intangible value due to purchase price
accounting.
(4)
Represents amortization of the FlexSteel
inventory step-up adjustment due to purchase price accounting.
(5)
Represents the increase or decrease in tax
expense as though Cactus, Inc. owned 100% of its operating
subsidiary 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 24.5% on income before
income taxes for the three months ended March 31, 2023, 25.0% for
the three months ended December 31, 2022 and 26.0% for the three
months ended March 31, 2022.
(6)
Reflects 63.7, 60.8, and 59.3 million
weighted average shares of basic Class A common stock outstanding
and 15.0, 15.1 and 16.5 million of additional shares for the three
months ended March 31, 2023, December 31, 2022 and March 31, 2022,
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.
Cactus, Inc. – Supplemental Information
Reconciliation of GAAP to non-GAAP Financial Measures
EBITDA, Adjusted EBITDA and Adjusted EBITDA margin
(unaudited)
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.
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.
Three Months Ended
March 31,
December 31,
March 31,
2023
2022
2022
(in thousands)
Net income
$
52,288
$
40,739
$
27,083
Interest (income) expense, net
(1,002
)
(2,370
)
100
Income tax expense (benefit)
1,940
7,932
2,692
Depreciation and amortization
13,110
8,133
8,677
EBITDA
66,336
54,434
38,552
Other non-operating (income)
expense(1)
(3,538
)
1,920
1,115
Transaction related expenses(2)
8,581
7,442
—
Inventory step-up expense(3)
4,191
—
—
Stock-based compensation
3,841
2,597
2,666
Adjusted EBITDA
$
79,411
$
66,393
$
42,333
Revenue
$
228,405
$
187,774
$
145,899
Net income margin
22.9
%
21.7
%
18.6
%
Adjusted EBITDA margin
34.8
%
35.4
%
29.0
%
(1)
Primarily represents non-cash adjustments
for the revaluation of the liability related to the TRA.
(2)
Reflects fees and expenses recorded in
connection with the FlexSteel Acquisition and related
financing.
(3)
Represents amortization of the FlexSteel
inventory step-up adjustment due to purchase price accounting.
Cactus, Inc. – Supplemental Information
Reconciliation of GAAP to non-GAAP Financial Measures
Segment EBITDA, Adjusted Segment EBITDA and Adjusted Segment
EBITDA margin (unaudited)
Segment EBITDA, Adjusted Segment EBITDA and Adjusted Segment
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 Segment EBITDA as operating
income including other non-operating income and excluding
depreciation and amortization. Cactus defines Adjusted Segment
EBITDA as Segment EBITDA excluding the other items outlined
below.
Cactus management believes Segment EBITDA and Adjusted Segment
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. Segment
EBITDA and Adjusted Segment 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 Segment EBITDA and Adjusted Segment EBITDA may not
be comparable to other similarly titled measures of other
companies. Cactus defines Adjusted Segment EBITDA margin as
Adjusted Segment 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.
Three Months Ended
March 31,
December 31,
March 31,
2023
2022
2022
(in thousands)
Pressure Control
Revenue
$
194,655
$
187,774
$
145,899
Operating income
$
49,439
$
48,221
$
30,990
Other non-operating income
(expense)(1)
3,417
(1,920
)
(1,115
)
Depreciation and amortization expense
7,992
8,133
8,677
Segment EBITDA
60,848
54,434
38,552
Stock-based compensation
3,091
2,597
2,666
Other non-operating (income)
expense(1)
(3,417
)
1,920
1,115
Transaction related expenses(2)
8,581
7,442
—
Adjusted Segment EBITDA
$
69,103
$
66,393
$
42,333
Operating income margin
25.4
%
25.7
%
21.2
%
Adjusted Segment EBITDA margin
35.5
%
35.4
%
29.0
%
(1)
Represents non-cash adjustments for the revaluation of the
liability related to the TRA.
(2)
Reflects fees and expenses recorded in connection with the
FlexSteel Acquisition and related financing.
Cactus, Inc. – Supplemental Information
Reconciliation of GAAP to non-GAAP Financial Measures
Segment EBITDA, Adjusted Segment EBITDA and Adjusted Segment
EBITDA margin (continued) (unaudited)
Three Months Ended
March 31,
December 31,
March 31,
2023
2022
2022
(in thousands)
Spoolable Technologies
Revenue
$
33,750
$
—
$
—
Operating income
249
—
—
Other non-operating income
(expense)(1)
121
—
—
Depreciation and amortization expense
5,118
—
—
Segment EBITDA
5,488
—
—
Stock-based compensation
750
—
—
Other non-operating (income)
expense(1)
(121
)
—
—
Inventory step-up expense(2)
4,191
—
—
Adjusted Segment EBITDA
$
10,308
$
—
$
—
Operating income margin
0.7
%
n/a
n/a
Adjusted Segment EBITDA margin
30.5
%
n/a
n/a
(1)
Represents a $0.1 million gain for the
revaluation of the earn-out liability associated with the FlexSteel
Acquisition.
(2)
Represents amortization of the FlexSteel inventory step-up
adjustment due to purchase price accounting
A reconciliation of segment operating income to net income is
shown below.
Three Months Ended
March 31,
December 31,
March 31,
2023
2022
2022
(in thousands)
Consolidated
Pressure Control operating income
$
49,439
$
48,221
$
30,990
Spoolable Technologies operating
income
249
—
—
Total operating income
49,688
48,221
30,990
Interest income (expense), net
1,002
2,370
(100
)
Other income (expense), net
3,538
(1,920
)
(1,115
)
Income before income taxes
54,228
48,671
29,775
Income tax expense
1,940
7,932
2,692
Net income
$
52,288
$
40,739
$
27,083
Cactus, Inc. – Supplemental Information
Pressure Control Results Historical Presentation
(unaudited)
Three Months Ended
March 31,
December 31,
March 31,
2023
2022
2022
(in thousands)
Revenues
Product
$
129,779
$
124,561
$
94,040
Rental
26,709
27,310
22,343
Field service and other
38,167
35,903
29,516
Total revenues
194,655
187,774
145,899
Gross profit
Product
$
52,109
$
50,529
$
33,120
Rental
11,207
12,013
7,254
Field service and other
8,813
8,575
4,710
Total gross profit
72,129
71,117
45,084
Gross margin
Product
40.2
%
40.6
%
35.2
%
Rental
42.0
%
44.0
%
32.5
%
Field service and other
23.1
%
23.9
%
16.0
%
Total gross margin
37.1
%
37.9
%
30.9
%
Operating income
$
49,439
$
48,221
$
30,990
Operating margin
25.4
%
25.7
%
21.2
%
Depreciation and amortization
Cost of product revenue
$
839
$
783
$
748
Cost of rental revenue
5,109
5,442
6,167
Cost of field service and other
revenue
1,902
1,773
1,673
Selling, general and administrative
expenses
142
135
89
Total depreciation and amortization
7,992
8,133
8,677
Cactus, Inc. – Supplemental Information
Estimated Market Share (unaudited)
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.
Three Months Ended
March 31,
December 31,
March 31,
2023
2022
2022
Cactus U.S. onshore rigs followed
321
304
254
Baker Hughes U.S. onshore rig count
quarterly average
742
757
616
Market share
43.3
%
40.2
%
41.2
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230508005790/en/
Cactus, Inc. Alan Boyd, 713-904-4669 Director of
Corporate Development and Investor Relations IR@CactusWHD.com
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