Aptiv PLC
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Consumer Discretionary : Auto Components | Mid Cap Blend
Based in United Kingdom
Company profile

Aptiv PLC is a technology and mobility architecture company. The Company is primarily serving the automotive sector. The Company’s segments include Advanced Safety and User Experience and Signal and Power Solutions. The Advanced Safety and User Experience segment is focused on providing the necessary software and advanced computing platforms. The Signal and Power Solutions segment is focused on providing the requisite networking architecture required to support the integrated systems in vehicles. It delivers mobility solutions enabling its customers’ transition to electrified, software-defined vehicles. The Company designs and manufactures vehicle components and provides electrical, electronic and active safety technology solutions to the global automotive and commercial vehicle markets, creating the software and hardware foundation for vehicle features and functionality. It operates over 127 manufacturing facilities and over 12 technical centers utilizing a regional service model.

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Cactus Announces Second Quarter 2022 Results

6:45 am ET August 4, 2022 (BusinessWire) Print

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  
(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. 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.                                                                                                                                                                                                                                     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.

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. 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  

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  

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  

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                                                                                                   Six Months Ended
                                                                                                           June 30,                                                                                                                               June 30,
                                                          -----------------------------------------------------------------------------------------------------                           ------------------------------------------------------------------------------------------------------------------
                                                       2022                                         2021                                                2022                                                2021
                                                          ----------------------------------                       -----------------------------------------------                        -----------------------------------------------                        -----------------------------------------------
                                                                                                                                                 (in thousands, except per share data)
Revenues                                                                                                                                        
                                                                             $        112,232                      $  70,345                        $ 206,272                        $ 122,301  
   Product revenue
                                                                    23,695      14,644        46,038        27,133  
   Rental revenue
                                                                    34,288      23,904        63,804        43,876  
   Field service and other revenue
                                                          -------------------- --------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------
                                                                   170,215     108,893       316,114       193,310  
      Total revenues
                                                          -------------------- --------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------
                                                                                                                             
Costs and expenses                                                                                                                              
                                                                    69,172      48,100       130,092        84,621  
   Cost of product revenue
                                                                    15,328      14,403        30,417        26,574  
   Cost of rental revenue
                                                                    26,734      17,692        51,540        32,155  
   Cost of field service and other revenue
                                                                    14,740      11,384        28,834        21,011  
   Selling, general and administrative expenses
                                                          -------------------- --------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------
                                                                   125,974      91,579       240,883       164,361  
      Total costs and expenses
                                                          -------------------- --------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------
Income from operations                                              44,241      17,314        75,231        28,949  
                                                          -------------------- --------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------
                                                                                                                                                          
                                                                       304        (181 )                            204          (333 )
   Interest income (expense), net
                                                            --      (1,004 )                         (1,115 )                         (1,410 )
   Other expense, net
                                                          -------------------- --------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------
Income before income taxes                                          44,545      16,129        74,320        27,206  
                                                                     8,765       1,355        11,457        (2,704 )
   Income tax expense (benefit)
                                                          -------------------- --------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------                      -------------------- ------- --------------------
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  
(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. 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                                                                        
                                                                                         $    311,684                      $    301,669
   Cash and cash equivalents
                                                                           125,821         89,205
   Accounts receivable, net
                                                                           149,037        119,817
   Inventories
                                                                             7,985          7,794
   Prepaid expenses and other current assets
                                                                      -------------------- ----------                      -------------------- ----------
                                                                           594,527        518,485
      Total current assets
                                                                              
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
                                                                      -------------------- ----------                      -------------------- ----------
                                                                                         $  1,070,124                      $    982,078
      Total assets
                                                                      ==================== ==========                      ==================== ==========
                                                                   
Liabilities and Equity                                                                
Current liabilities                                                                   
                                                                                         $     57,366                      $     42,818
   Accounts payable
                                                                            33,620         28,240
   Accrued expenses and other current liabilities
                                                                            11,769         11,769
   Current portion of liability related to tax receivable agreement
                                                                             5,630          4,867
   Finance lease obligations, current portion
                                                                             5,253          4,880
   Operating lease liabilities, current portion
                                                                      -------------------- ----------                      -------------------- ----------
                                                                           113,638         92,574
      Total current liabilities
                                                                              
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
                                                                      -------------------- ----------                      -------------------- ----------
                                                                           426,316        387,045
      Total liabilities
                                                                   
                                                                      ------------------------------                       ------------------------------
Equity                                                                     643,808        595,033
                                                                      -------------------- ----------                      -------------------- ----------
                                                                                           Cactus, Inc.
                                                                          Condensed Consolidated Statements of Cash Flows
                                                                                            (unaudited)
                                                        
                                                                                                           Six Months Ended
                                                                                                                                  June 30,
                                                                          ------------------------------------------------------------------------------------------------------------------
                                                                              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                                   
                                                                             17,592        18,352  
   Depreciation and amortization
                                                                                 84            84  
   Deferred financing cost amortization
                                                                              5,016         4,438  
   Stock-based compensation
                                                                                240           149  
   Provision for expected credit losses
                                                                                959         1,566  
   Inventory obsolescence
                                                                               (518 )                           (613 )
   Gain on disposal of assets
                                                                              8,504        (4,506 )
   Deferred income taxes
                                                                              1,115         1,004  
   Loss from revaluation of liability related to tax receivable agreement
                                                                                                            
   Changes in operating assets and liabilities:
                                                                            (36,484 )                        (27,858 )
      Accounts receivable
                                                                            (30,670 )                         (2,569 )
      Inventories
                                                                               (210 )                            499  
      Prepaid expenses and other assets
                                                                             14,238        12,774  
      Accounts payable
                                                                              5,494         9,999  
      Accrued expenses and other liabilities
                                                                          -------------------- ------- --------------------                      -------------------- ------- --------------------
                                                                             48,223        43,229  
         Net cash provided by operating activities
                                                                          -------------------- ------- --------------------                      -------------------- ------- --------------------
                                                                                         
Cash flows from investing activities                                                                        
Capital expenditures and other                                              (13,752 )                         (5,461 )
Proceeds from sale of assets                                                    876         1,108  
                                                                          -------------------- ------- --------------------                      -------------------- ------- --------------------
                                                                            (12,876 )                         (4,353 )
         Net cash used in investing activities
                                                                          -------------------- ------- --------------------                      -------------------- ------- --------------------
                                                                                         
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 )
                                                                          -------------------- ------- --------------------                      -------------------- ------- --------------------
                                                                            (24,165 )                        (18,639 )
         Net cash used in financing activities
                                                                          -------------------- ------- --------------------                      -------------------- ------- --------------------
                                                                                                                      
Effect of exchange rate changes on cash and cash equivalents                 (1,167 )                            186  
                                                                          -------------------- ------- --------------------                      -------------------- ------- --------------------
                                                                                                                      
                                                                             10,015        20,423  
         Net increase in cash and cash equivalents
                                                                                         
Cash and cash equivalents                                                                                   
Beginning of period                                                         301,669       288,659  
                                                                          -------------------- ------- --------------------                      -------------------- ------- --------------------
                                                                                                                                                                                                                                     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.
                                                                                                                                                                                                                                                                                                        
                                                                                                                                                                                                                                                                                                       Three Months Ended
                                                                                     ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                          June 30,                                                                                                                                                                                                                                                March 31,                                                                                                                                                                                                                                                                                                                                                      June 30,
                                                                                                                                                            2022                                                                                                                                                                                                                                                    2022                                                                                                                                                                                                                                                                                                                                                           2021
                                                                                     --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                                                                        -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                                                                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                       (in thousands, except per share data)
Net income                                                                                                                                                              $         35,780                                                                                                                                                                                                                        $  27,083                                                                                                                                                                                                                        $  14,774  
Adjustments:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
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  
                                                                                     ==================================================================================== ============== ====================================================================================                                                                                      ==================================================================================== ======= ====================================================================================                                                                                      ==================================================================================== ======= ====================================================================================================================================================================================================================================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
Diluted earnings per share, as adjusted                                                                                                                                 $           0.44                                                                                                                                                                                                                        $    0.30                                                                                                                                                                                                                        $    0.16  
                                                                                     ------------------------------------------------------------------------------------ -------------- ------------------------------------------------------------------------------------                                                                                      ------------------------------------------------------------------------------------ ------- ------------------------------------------------------------------------------------                                                                                      ------------------------------------------------------------------------------------ ------- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
Weighted average shares outstanding, as adjusted(3)                                                                                                            76,322                                                                                                                                                                                                        76,162                                                                                                                                                                                                        75,997  
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
Revenue                                                                                                                                                                 $        170,215                                                                                                                                                                                                                        $ 145,899                                                                                                                                                                                                                        $ 108,893  
Net income margin(4)                                                                                                                                             21.0 %                                                                                                                                                                                                                           18.6 %                                                                                                                                                                                                                           13.6 %
(1) Represents non-cash adjustments for the revaluation of the liability related to the TRA.                                                                                                                                                                                                                                     Represents non-cash adjustments for the revaluation of the liability related to the TRA.
(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. 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.
(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.                                                                 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.
                                                                                                                                                                                                                                     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                                                                                                                                                                                                                                                                                                                                                                                                                                              Six Months Ended
                                                  ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      June 30,                                                                                                                                                                             March 31,                                                                                                                                                                            June 30,                                                                                                                                                                                                                                                                               June 30,
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                        2022                                                                                                                                                                                 2022                                                                                                                                                                                 2021                                                                                                                                                                                 2022                                                                                                                                                                               2021
                                                  ---------------------------------------------------------------------------------------------------------------------------------------------------                                                     ---------------------------------------------------------------------------------------------------------------------------------------------------                                                     ---------------------------------------------------------------------------------------------------------------------------------------------------                                                     ---------------------------------------------------------------------------------------------------------------------------------------------------                                                     ------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                    (in thousands)                                                                                                                                                                                                                                                                                                                                                                                                                                               (in thousands)
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                                                                                                                                          1,355                                                                                                                                         11,457                                                                                               (2,704 )
Depreciation and amortization                                                                                                8,915                                                                                                                                          8,677                                                                                                                                          9,159                                                                                                                                         17,592                                                                                               18,352  
                                                  ------------------------------------------------- ------------------------------------------------- -------------------------------------------------                                                   ------------------------------------------------- ------------------------------------------------- -------------------------------------------------                                                   ------------------------------------------------- ------------------------------------------------- -------------------------------------------------                                                   ------------------------------------------------- ------------------------------------------------- -------------------------------------------------                                                   ------------------------------------------------- ------- ----------------------------------------------------------------------------------------
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  
                                                  ------------------------------------------------- ------------------------------------------------- -------------------------------------------------                                                   ------------------------------------------------- ------------------------------------------------- -------------------------------------------------                                                   ------------------------------------------------- ------------------------------------------------- -------------------------------------------------                                                   ------------------------------------------------- ------------------------------------------------- -------------------------------------------------                                                   ------------------------------------------------- ------- ----------------------------------------------------------------------------------------
Adjusted EBITDA                                                                                   $                                            55,506                                                                                                               $                                            42,333                                                                                                               $                                            28,908                                                                                                               $                                            97,839                                                                                                               $  51,739  
                                                  ================================================= ================================================= =================================================                                                   ================================================= ================================================= =================================================                                                   ================================================= ================================================= =================================================                                                   ================================================= ================================================= =================================================                                                   ================================================= ======= ========================================================================================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
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 %
(1) Represents non-cash adjustments for the revaluation of the liability related to the TRA.                                                                                                                                                                 Represents non-cash adjustments for the revaluation of the liability related to the TRA.
(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. 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.
                                                                                                           Cactus, Inc. - Supplemental Information
                                                                                                                 Depreciation and Amortization by Category
                                                                                                                                (unaudited)
                                                                                                                                     
                                                                              Three Months Ended                                                                                     Six Months Ended
                                             -------------------------------------------------------------------------------------------------------------------
                                   June 30,                     March 31,                    June 30,                                              June 30,
                                                                                                                                                                                             ------------------------------------------------------------------------
                                     2022                         2022                         2021                          2022                          2021
                                             -------------------------                       -------------------------                       -------------------------                       --------------------------                       --------------------------
                                                                                (in thousands)                                                                                        (in thousands)
Cost of product revenue                                         $   751                      $   748                      $   814                      $  1,499                      $  1,620
Cost of rental revenue                         6,252     6,167     6,491     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
                                             -------------------- -----                      -------------------- -----                      -------------------- -----                      -------------------- ------                      -------------------- ------
                                                                                                                                                                                                                                     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
                                                                                     ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                   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  

View source version on businesswire.com: https://www.businesswire.com/news/home/20220804005177/en/

SOURCE: Cactus, Inc.

Cactus, Inc. 
John Fitzgerald, 713-904-4655
Director of Corporate Development and Investor Relations
IR@CactusWHD.com
comtex tracking

COMTEX_411568819/1006/2022-08-04T06:45:02

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