Latest news with #ScottBender
Reuters
4 days ago
- Business
- Reuters
Oilfield equipment maker Cactus to buy controlling interest in Baker Hughes' unit
June 2 (Reuters) - Oilfield equipment maker Cactus (WHD.N), opens new tab said on Monday it would purchase a 65% interest in Baker Hughes' (BKR.O), opens new tab surface pressure control business for $344.5 million. The companies have agreed to form a joint venture to hold the SPC business, where Baker Hughes will retain a 35% stake post-closing. SPC designs, manufactures and services specialized wellheads and production tree equipment for international markets. "Its geographic footprint is highly complementary to Cactus' existing business, and this combination enables us to expand our reach as a capital-light manufacturer of highly-engineered products sold directly to end users," said Cactus CEO Scott Bender. Shares of Cactus rose 4.4% in premarket trading. The transaction is expected to close in the second half of 2025.
Yahoo
4 days ago
- Business
- Yahoo
Cactus Announces Agreement to Acquire 65% Controlling Interest in Baker Hughes' Surface Pressure Control Business
HOUSTON, June 02, 2025--(BUSINESS WIRE)--Cactus, Inc. (NYSE: WHD) ("Cactus" or the "Company") announced today that its subsidiary Cactus Companies, LLC has entered into a definitive agreement with certain subsidiaries of Baker Hughes Company ("Baker Hughes") to acquire 65% and assume operational control of the Baker Hughes Surface Pressure Control Business ("SPC" or the "Business"). SPC designs, manufactures and services specialized surface pressure control solutions, primarily wellheads and production tree equipment, for international markets. Business Highlights Acquisition establishes Cactus' position as a premier, capital-light and geographically diversified oilfield equipment manufacturer Transforms Cactus' geographic footprint, with ~85% of SPC revenues generated in the Middle East and no material U.S. external sales, providing for a more diverse and stable consolidated Cactus Pressure Control revenue profile through market cycles Greater revenue, earnings and cash flow visibility from the acquisition resulting from SPC's $600+ million product and aftermarket service backlog as of December 31, 2024 Highly accretive to financial metrics while maintaining a conservative balance sheet A Joint Venture will be formed to hold SPC, and Baker Hughes will retain 35% ownership in the Joint Venture post-closing Scott Bender, Chairman and CEO of Cactus, commented, "I am extremely pleased to announce this acquisition today, which is the result of a long, exhaustive process to responsibly enter several of the most important oil and gas markets in the world. The SPC Business meets all of our acquisition criteria. Its geographic footprint is highly complementary to Cactus' existing business, and this combination enables us to expand our reach as a capital-light manufacturer of highly-engineered products sold directly to end users. Additionally, our leadership team's familiarity with the Business, which operates former Wood Group Pressure Control assets that members of our team previously managed, provides increased confidence in operating the business efficiently. We are excited to partner with Baker Hughes in the Joint Venture operating SPC, as their partnership will be instrumental to transition key administrative services and will assist in a smooth transition of critical customer relationships and long-term contracts. The current SPC leadership team has substantially improved the operating and financial performance of the Business in the past several years through service facility and manufacturing footprint rationalizations, and we look forward to continuing optimization work with the leadership team to further progress SPC's capabilities. Over time, we expect to enhance the supply chain given our specialized knowledge of these products and our expanding global low-cost manufacturing footprint, driving improved financial returns. In conclusion, we have been evaluating alternatives to expand our operational capabilities and geographic footprint, and we believe that the acquisition of our interest in SPC represents the most attractive expansion opportunity available. This transaction provides us with improved access to important new non-tariff impacted markets for both Pressure Control and Spoolable Technologies products to continue the growth trajectory we have demonstrated since our founding and should diversify and stabilize our revenue streams through cycles. I am pleased that we have structured the transaction to enable us to acquire a controlling share of the business while maintaining financial flexibility in this market environment, and we expect to close the transaction later this year with little-to-no net debt. We look forward to operating this business with the same focus on margins, returns and customer execution that you have come to expect of Cactus, with the goal of increasing long-term value for shareholders." Transaction & Financing Details Cactus will purchase a 65% interest in SPC for $344.5 million ($530 million total enterprise value on a cash-free, debt-free basis) subject to customary purchase price adjustments. Cactus also plans to capitalize the JV balance sheet with $70 million of operating cash at close, and Baker Hughes will contribute 35% of that cash which will be paid back to them over time. Any time after the second anniversary of closing, Cactus has the right to purchase, and Baker Hughes has the right to require Cactus to purchase, the remaining 35% interest. Cactus expects to utilize cash on hand (approx. $348 million as of March 31, 2025) and funds from its undrawn $225 million revolving credit facility to fund the up-front consideration. The Company may elect to pursue one or more debt financing transactions prior to closing to preserve revolving credit facility liquidity. Closing is expected to occur in the second half of 2025. Advisors Piper Sandler & Co. is serving as the exclusive financial advisor to Cactus and Bracewell LLP is serving as legal counsel in association with the transaction. Conference Call & Webcast Information Cactus will host a conference call to discuss the acquisition on Monday, June 2, 2025 at 10:00 a.m. Central Time (11:00 a.m. Eastern Time). The call will be webcast on Cactus' website at Please access the webcast for the call at least 10 minutes ahead of start time to ensure a proper connection. In addition, a presentation with additional information relating to the SPC acquisition is available on the Company's website at About Cactus, Inc. Cactus designs, manufactures, sells or rents a range of highly engineered 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," "opportunity," "maintaining," "provide," "providing for" 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, including unanticipated challenges related to the proposed acquisition. 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, its 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. View source version on Contacts Cactus, Inc. Alan Boyd, 713-904-4669Director of Corporate Development and Investor RelationsIR@
Business Wire
4 days ago
- Business
- Business Wire
Cactus Announces Agreement to Acquire 65% Controlling Interest in Baker Hughes' Surface Pressure Control Business
HOUSTON--(BUSINESS WIRE)--Cactus, Inc. (NYSE: WHD) ('Cactus' or the 'Company') announced today that its subsidiary Cactus Companies, LLC has entered into a definitive agreement with certain subsidiaries of Baker Hughes Company ('Baker Hughes') to acquire 65% and assume operational control of the Baker Hughes Surface Pressure Control Business ('SPC' or the 'Business'). SPC designs, manufactures and services specialized surface pressure control solutions, primarily wellheads and production tree equipment, for international markets. Business Highlights Acquisition establishes Cactus' position as a premier, capital-light and geographically diversified oilfield equipment manufacturer Transforms Cactus' geographic footprint, with ~85% of SPC revenues generated in the Middle East and no material U.S. external sales, providing for a more diverse and stable consolidated Cactus Pressure Control revenue profile through market cycles Greater revenue, earnings and cash flow visibility from the acquisition resulting from SPC's $600+ million product and aftermarket service backlog as of December 31, 2024 Highly accretive to financial metrics while maintaining a conservative balance sheet A Joint Venture will be formed to hold SPC, and Baker Hughes will retain 35% ownership in the Joint Venture post-closing Scott Bender, Chairman and CEO of Cactus, commented, 'I am extremely pleased to announce this acquisition today, which is the result of a long, exhaustive process to responsibly enter several of the most important oil and gas markets in the world. The SPC Business meets all of our acquisition criteria. Its geographic footprint is highly complementary to Cactus' existing business, and this combination enables us to expand our reach as a capital-light manufacturer of highly-engineered products sold directly to end users. Additionally, our leadership team's familiarity with the Business, which operates former Wood Group Pressure Control assets that members of our team previously managed, provides increased confidence in operating the business efficiently. We are excited to partner with Baker Hughes in the Joint Venture operating SPC, as their partnership will be instrumental to transition key administrative services and will assist in a smooth transition of critical customer relationships and long-term contracts. The current SPC leadership team has substantially improved the operating and financial performance of the Business in the past several years through service facility and manufacturing footprint rationalizations, and we look forward to continuing optimization work with the leadership team to further progress SPC's capabilities. Over time, we expect to enhance the supply chain given our specialized knowledge of these products and our expanding global low-cost manufacturing footprint, driving improved financial returns. In conclusion, we have been evaluating alternatives to expand our operational capabilities and geographic footprint, and we believe that the acquisition of our interest in SPC represents the most attractive expansion opportunity available. This transaction provides us with improved access to important new non-tariff impacted markets for both Pressure Control and Spoolable Technologies products to continue the growth trajectory we have demonstrated since our founding and should diversify and stabilize our revenue streams through cycles. I am pleased that we have structured the transaction to enable us to acquire a controlling share of the business while maintaining financial flexibility in this market environment, and we expect to close the transaction later this year with little-to-no net debt. We look forward to operating this business with the same focus on margins, returns and customer execution that you have come to expect of Cactus, with the goal of increasing long-term value for shareholders.' Transaction & Financing Details Cactus will purchase a 65% interest in SPC for $344.5 million ($530 million total enterprise value on a cash-free, debt-free basis) subject to customary purchase price adjustments. Cactus also plans to capitalize the JV balance sheet with $70 million of operating cash at close, and Baker Hughes will contribute 35% of that cash which will be paid back to them over time. Any time after the second anniversary of closing, Cactus has the right to purchase, and Baker Hughes has the right to require Cactus to purchase, the remaining 35% interest. Cactus expects to utilize cash on hand (approx. $348 million as of March 31, 2025) and funds from its undrawn $225 million revolving credit facility to fund the up-front consideration. The Company may elect to pursue one or more debt financing transactions prior to closing to preserve revolving credit facility liquidity. Closing is expected to occur in the second half of 2025. Advisors Piper Sandler & Co. is serving as the exclusive financial advisor to Cactus and Bracewell LLP is serving as legal counsel in association with the transaction. Conference Call & Webcast Information Cactus will host a conference call to discuss the acquisition on Monday, June 2, 2025 at 10:00 a.m. Central Time (11:00 a.m. Eastern Time). The call will be webcast on Cactus' website at Please access the webcast for the call at least 10 minutes ahead of start time to ensure a proper connection. In addition, a presentation with additional information relating to the SPC acquisition is available on the Company's website at About Cactus, Inc. Cactus designs, manufactures, sells or rents a range of highly engineered 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,' 'opportunity,' 'maintaining,' 'provide,' 'providing for' 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, including unanticipated challenges related to the proposed acquisition. 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, its 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.
Business Wire
30-04-2025
- Business
- Business Wire
Cactus Announces First Quarter 2025 Results
HOUSTON--(BUSINESS WIRE)--Cactus, Inc. (NYSE: WHD) ('Cactus' or the 'Company') today announced financial and operating results for the first quarter of 2025. First Quarter Highlights Revenue of $280.3 million and operating income of $68.6 million; Net income of $54.1 million and diluted earnings per Class A share of $0.64; Adjusted net income (1) of $58.8 million and diluted earnings per share, as adjusted (1) of $0.73; Net income margin of 19.3% and adjusted net income margin (1) of 21.0%; Adjusted EBITDA (2) and Adjusted EBITDA margin (2) of $93.8 million and 33.5%, respectively; Cash and cash equivalents of $347.7 million, with no bank debt outstanding as of March 31, 2025; and In April 2025, the Board of Directors declared a quarterly cash dividend of $0.13 per Class A share. Financial Summary Three Months Ended March 31, December 31, March 31, 2025 2024 2024 (in thousands) Revenues $ 280,319 $ 272,121 $ 274,123 Operating income (3) $ 68,612 $ 70,452 $ 62,550 Operating income margin 24.5 % 25.9 % 22.8 % Net income $ 54,105 $ 57,447 $ 49,815 Net income margin 19.3 % 21.1 % 18.2 % Adjusted net income (1) $ 58,816 $ 56,796 $ 59,600 Adjusted net income margin (1) 21.0 % 20.9 % 21.7 % Adjusted EBITDA (2) $ 93,841 $ 92,711 $ 95,332 Adjusted EBITDA margin (2) 33.5 % 34.1 % 34.8 % Expand (1) 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. (2) 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. (3) Operating income reflects certain expenses related to the FlexSteel acquisition, including expenses related to the remeasurement of the earn-out liability associated with the FlexSteel acquisition and intangible amortization expenses related to purchase price accounting. See the reconciliation of GAAP to non-GAAP financial measures in the Supplemental Information tables for further details. Expand Scott Bender, CEO and Chairman of the Board of Cactus, commented, 'First quarter 2025 revenues in both segments exceeded our expectations. Strength in Spoolable Technologies was driven by non-U.S. product sales, which increased sequentially, while the outperformance in Pressure Control was driven by record levels of product sold per rig followed. Margins in both segments remained resilient. Cash flow conversion was lower than our usual cadence in the first quarter as working capital increased on particularly strong revenue performance in March in both segments. Additionally, as mentioned last quarter, we made a deferred cash tax payment in January and incurred elevated capex and investments largely due to a Vietnam supply chain investment.' 'In the second quarter of 2025, we anticipate that the U.S. land rig count will decline from today's levels as customers reset their operating budgets given lower commodity pricing and an increasingly uncertain global economic outlook. We anticipate exiting Q2 with the U.S. land rig count below today's levels, with potential for further activity reductions to continue as the year progresses. In Pressure Control, we expect revenues to be down modestly. In Spoolable Technologies, we expect a typical seasonal sales expansion in the second quarter, despite industry activity headwinds, as a result of record first quarter orders achieved during the period.' Mr. Bender concluded, 'Tariff policies and the associated uncertainty have led to a rapidly deteriorating global economic outlook, impacting our whole industry. We anticipate our results will face headwinds in the near-term as our input costs increase in both segments due to elevated tariff rates, though to a lesser degree in our Spoolable Technologies business. We are taking several actions to mitigate the current impacts of increased tariff rates, such as accelerating production from Vietnam, and we expect these actions to be largely complete within 12 months. We believe our strong balance sheet, diversifying supply chain, historically supportive customer base, and the capital-light nature of our business will enable us to successfully navigate this market, as we have proven in previous downcycles. As always, we intend to take appropriate and timely actions to protect margins, returns and cash flows.' Segment Performance We report two business segments, Pressure Control and Spoolable Technologies. Corporate and other expenses not directly attributable to either segment are presented separately as Corporate and Other expenses. Pressure Control First quarter 2025 Pressure Control revenue increased $13.6 million, or 7.7%, sequentially, primarily due to increased sales of wellhead and production related equipment resulting from increased customer drilling efficiencies. Operating income increased $3.5 million, or 6.9%, sequentially, on the higher volume, with margins decreasing 20 basis points due to reserves taken in connection with litigation claims. Adjusted Segment EBITDA increased $3.3 million, or 5.3%, sequentially, with Adjusted Segment EBITDA margins decreasing 80 basis points. Spoolable Technologies First quarter 2025 Spoolable Technologies revenues decreased $3.5 million, or 3.6%, sequentially, due to reduced customer activity levels in the seasonally slow first quarter. Operating income decreased $1.6 million, or 6.5%, sequentially, on lower volume, while margins decreased 80 basis points on lower operating leverage. Adjusted Segment EBITDA decreased $1.8 million, or 5.0%, sequentially, with Adjusted Segment EBITDA margins decreasing 50 basis points. Corporate and Other Expenses First quarter 2025 Corporate and Other expenses increased $3.7 million, or 62.7%, sequentially, primarily due to professional fees associated with growth initiatives. Liquidity, Capital Expenditures and Other As of March 31, 2025, the Company had $347.7 million of cash and cash equivalents, no bank debt outstanding, and $222.6 million of availability on our revolving credit facility. Operating cash flow was $41.5 million for the first quarter of 2025. During the first quarter, the Company made dividend payments and associated distributions of $10.7 million. Net capital expenditures were $15.5 million during the first quarter of 2025, inclusive of a meaningful supply chain equity investment into a Vietnam manufacturing facility to enable more rapid expansion of our local manufacturing capacity. For the full year 2025, the Company now expects net capital expenditures to be in the range of $40 to $50 million, inclusive of capital directed towards supply chain diversification efforts and efficiency improvements in the Baytown manufacturing facility, a reduction of $5 million from prior guidance considering the revised market outlook. We are continuing to evaluate further reductions to our capital spending program for the year. As of March 31, 2025, Cactus had 68,390,114 shares of Class A common stock outstanding (representing 85.7% of the total voting power) and 11,432,545 shares of Class B common stock outstanding (representing 14.3% of the total voting power). Quarterly Dividend The Board of Directors has approved a quarterly cash dividend of $0.13 per share of Class A common stock with payment to occur on June 20, 2025 to holders of record of Class A common stock at the close of business on June 2, 2025. A corresponding distribution of up to $0.13 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 tomorrow, Thursday, May 1, 2025 at 9:00 a.m. Central Time (10:00 a.m. Eastern Time). The call will be webcast on Cactus' website at 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. 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 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,' 'opportunity,' 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. (1) Represents the elimination of inter-segment revenue for sales from our Pressure Control segment to our Spoolable Technologies segment. (2) Dilution for the three months ended March 31, 2025 excludes 11.4 million shares of Class B common stock as the effect would be antidilutive. Dilution for the three months ended March 31, 2024 includes an additional $11.1 million of pre-tax income attributable to non-controlling interest adjusted for a corporate effective tax rate of 26.0% and 14.0 million weighted average shares of Class B common stock plus the effect of dilutive securities. Expand Cactus, Inc. Condensed Consolidated Balance Sheets (unaudited) March 31, December 31, 2025 2024 (in thousands) Assets Current assets Cash and cash equivalents $ 347,661 $ 342,843 Accounts receivable, net 219,694 191,627 Inventories 230,264 226,796 Prepaid expenses and other current assets 11,387 13,422 Total current assets 809,006 774,688 Property and equipment, net 347,634 346,008 Operating lease right-of-use assets, net 23,248 24,094 Intangible assets, net 159,994 163,991 Goodwill 203,028 203,028 Deferred tax asset, net 211,938 219,003 Investment in unconsolidated affiliates 6,000 — Other noncurrent assets 8,219 8,516 Total assets $ 1,769,067 $ 1,739,328 Liabilities and Equity Current liabilities Accounts payable $ 64,419 $ 72,001 Accrued expenses and other current liabilities 69,933 75,416 Current portion of liability related to tax receivable agreement 20,297 20,297 Finance lease obligations, current portion 7,273 7,024 Operating lease liabilities, current portion 5,052 4,086 Total current liabilities 166,974 178,824 Deferred tax liability, net 3,038 2,868 Liability related to tax receivable agreement, net of current portion 258,376 258,376 Finance lease obligations, net of current portion 11,809 10,528 Operating lease liabilities, net of current portion 19,025 20,078 Other noncurrent liabilities 4,475 4,475 Total liabilities 463,697 475,149 Equity 1,305,370 1,264,179 Total liabilities and equity $ 1,769,067 $ 1,739,328 Expand Cactus, Inc. Condensed Consolidated Statements of Cash Flows (unaudited) Three Months Ended March 31, 2025 2024 (in thousands) Cash flows from operating activities Net income $ 54,105 $ 49,815 Reconciliation of net income to net cash provided by operating activities Depreciation and amortization 15,678 15,046 Deferred financing cost amortization 280 280 Stock-based compensation 6,064 4,432 Provision for expected credit losses 133 162 Inventory obsolescence (296 ) 1,062 Gain on disposal of assets (79 ) (208 ) Deferred income taxes 7,623 4,403 Change in fair value of earn-out liability — 13,304 Changes in operating assets and liabilities: Accounts receivable (28,087 ) (3,011 ) Inventories (3,112 ) 234 Prepaid expenses and other assets 2,080 128 Accounts payable (7,923 ) (8,132 ) Accrued expenses and other liabilities (4,921 ) 8,748 Net cash provided by operating activities 41,545 86,263 Cash flows from investing activities Investment in unconsolidated affiliate (6,000 ) — Capital expenditures and other (10,230 ) (7,902 ) Proceeds from sales of assets 779 1,094 Net cash used in investing activities (15,451 ) (6,808 ) Cash flows from financing activities Payments on finance leases (1,988 ) (2,031 ) Dividends paid to Class A common stock shareholders (9,216 ) (8,144 ) Distributions to members (5,089 ) (1,684 ) Repurchases of shares (5,498 ) (8,268 ) Net cash used in financing activities (21,791 ) (20,127 ) Effect of exchange rate changes on cash and cash equivalents 515 1,137 Net increase in cash and cash equivalents 4,818 60,465 Cash and cash equivalents Beginning of period 342,843 133,792 End of period $ 347,661 $ 194,257 Expand 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. (1) Represents non-cash adjustments for the revaluation of the liability related to the TRA. (2) Reflects transaction fees and expenses recorded in connection with growth initiatives. (3) Reflects amortization expense associated with the step-up in intangible value due to purchase price accounting. (4) Represents adjustments for the remeasurement of the earn-out liability associated with the FlexSteel acquisition. (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 25% on income before income taxes for the three months ended March 31, 2025 and 26.0% for the three months ended December 31, 2024 and March 31, 2024 . (6) Reflects 68.2, 67.5, and 65.4 million weighted average shares of basic Class A common stock outstanding and 11.4, 12.1 and 14.0 million additional shares for the three months ended March 31, 2025, December 31, 2024, and March 31, 2024, 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. Expand 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, 2025 2024 2024 (in thousands) Net income $ 54,105 $ 57,447 $ 49,815 Interest income, net (2,325 ) (2,303 ) (689 ) Income tax expense 16,832 18,512 13,424 Depreciation and amortization 15,678 15,314 15,046 EBITDA 84,290 88,970 77,596 Revaluation gain on TRA liability (1) — (3,204 ) — Transaction related expenses (2) 3,487 — — Remeasurement loss on earn-out liability (3) — — 13,304 Stock-based compensation 6,064 6,945 4,432 Adjusted EBITDA $ 93,841 $ 92,711 $ 95,332 Revenue $ 280,319 $ 272,121 $ 274,123 Net income margin 19.3 % 21.1 % 18.2 % Adjusted EBITDA margin 33.5 % 34.1 % 34.8 % Expand (1) Represents non-cash adjustments for the revaluation of the liability related to the TRA. (2) Reflects transaction fees and expenses recorded in connection with growth initiatives. (3) Represents adjustments for the remeasurement of the earn-out liability associated with the FlexSteel acquisition. Expand Cactus, Inc. – Supplemental Information Reconciliation of GAAP to non-GAAP Financial Measures Adjusted Segment EBITDA and Adjusted Segment EBITDA margin (unaudited) 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 Adjusted Segment EBITDA as segment operating income excluding depreciation and amortization and the other items outlined below, in each case, that are attributable to the segment. Cactus management believes Adjusted Segment EBITDA is useful because it allows management to more effectively evaluate the Company's segment operating performance and compare the results of its segment 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. Adjusted Segment EBITDA should not be considered as an alternative to, or more meaningful than, net income or any other measure as determined in accordance with GAAP. The Company's computations of 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 segment revenue. Cactus presents this supplemental information because it believes it provides useful information regarding the factors and trends affecting the Company's business. (1) Represents adjustments for the remeasurement of the earn-out liability associated with the FlexSteel acquisition. (2) Represents the elimination of inter-segment revenue for sales from our Pressure Control segment to our Spoolable Technologies segment. Expand
