Cactus Announces Fourth Quarter and Full Year 2019 Results

HOUSTON–(BUSINESS WIRE)–Cactus, Inc. (NYSE: WHD) (“Cactus” or the “Company”) today announced financial and operating results for the fourth quarter and full year 2019.

Fourth Quarter 2019 Highlights

  • Reported revenue of $140.2 million;
  • Generated income from operations of $36.1 million;
  • Reported net income of $31.3 million(1) and diluted earnings per Class A share of $0.38(1);
  • Generated net income, as adjusted(2) of $27.7 million and diluted earnings per share, as adjusted(2) of $0.37;
  • Reported Adjusted EBITDA(3) and related margin(4) of $48.4 million and 34.5%, respectively; and
  • Generated cash flow from operations during the fourth quarter of 2019 of $61.4 million.

Financial Summary

 

 

Three Months Ended

 

Twelve Months Ended

 

 

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

 

 

 

2019

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

(in thousands)

 

(in thousands)

 

Revenues

 

$

140,238

 

$

160,808

 

$

139,824

 

$

628,414

 

$

544,135

 

Income from operations

 

$

36,085

 

$

47,123

 

$

43,864

 

$

183,150

 

$

177,701

 

Operating income margin

 

 

25.7

%

 

29.3

%

 

31.4

%

 

29.1

%

 

32.7

%

Net income (1)

 

$

31,274

 

$

35,833

 

$

38,683

 

$

156,303

 

$

150,281

 

Net income, as adjusted (2)

 

$

27,721

 

$

36,097

 

$

33,827

 

$

139,862

 

$

133,739

 

Adjusted EBITDA (3)

 

$

48,413

 

$

58,819

 

$

53,508

 

$

228,999

 

$

212,558

 

Adjusted EBITDA margin (4)

 

 

34.5

%

 

36.6

%

 

38.3

%

 

36.4

%

 

39.1

%

(1)

Net income during the fourth quarter of 2019 is inclusive of $4.8 million in additional income related to the revaluation of the tax receivable agreement liability and $2.7 million of net additional tax expenses associated with various non-routine items. Net income during the third quarter of 2019 is inclusive of $0.6 million in additional income related to the revaluation of the tax receivable agreement liability and $4.1 million in additional tax expenses related to the write-off of foreign tax credits and the reduction in expected future state tax benefits. Net income for the full year 2019 is inclusive of $5.3 million in additional income related to the revaluation of the tax receivable agreement liability, $1.0 million in offering related expenses and $2.6 million of net additional tax expenses associated with various non-routine items.

(2)

Net income, as adjusted and diluted earnings per share, as adjusted are non-GAAP financial measures. These figures assume Cactus, Inc. held all units in Cactus Wellhead, LLC (“Cactus LLC”), its operating subsidiary, at the beginning of the period. Additional information regarding net income, as adjusted and diluted earnings per share, as adjusted and the reconciliation of GAAP to non-GAAP financial measures are in the Supplemental Information tables.

(3)

Adjusted EBITDA is a non-GAAP financial measure. See definition of Adjusted EBITDA and the reconciliation of GAAP to non-GAAP financial measures in the Supplemental Information tables.

(4)

The percentage of Adjusted EBITDA to Revenues.

Scott Bender, President and CEO of Cactus, commented, “2019 was a record year for Cactus. Despite a larger than anticipated decline in the overall U.S. onshore rig count during the fourth quarter, our results were generally consistent with our expectations. The overall margin profile of the business remained strong, notwithstanding the typical seasonal slowdown in Field Service due in part to lower completions activity driven by E&P budget exhaustion. The quarter highlighted the Company’s ability to generate significant free cash flow, with cash growing by over $35 million during the period, net of nearly $7 million in dividend payments and associated distributions.

Looking to the first quarter of 2020, customers have again shown a willingness to quickly increase completion activity following the reset of budgets in January. We currently anticipate that revenue across all our business lines will increase relative to the fourth quarter of 2019. Additionally, the adoption of our new frac innovations has continued to progress during the first quarter.”

Mr. Bender concluded, “During our time as a public entity, Cactus has demonstrated its ability to perform well in the face of a challenging market environment. Going forward, we believe the capital-light nature of the business will further separate us from our peers, and we expect 2020 to highlight our ability to gain market share at attractive margins and generate substantial free cash flow.”

Revenue Categories

Product

 

 

Three Months Ended

 

 

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

 

 

2019

 

 

2019

 

 

2018

 

 

 

(in thousands)

 

Product revenue

 

$

83,371

 

$

92,582

 

$

78,901

 

Gross profit

 

$

31,059

 

$

34,814

 

$

33,123

 

Gross margin

 

 

37.3

%

 

37.6

%

 

42.0

%

Fourth quarter 2019 product revenue decreased $9.2 million, or 9.9%, sequentially, as sales of wellhead equipment and production related equipment decreased due to reduced activity from our customers. Gross profit decreased $3.8 million, or 10.8%, sequentially, with margins declining 30 basis points. Cactus’ estimated market share(1) increased to 30.9% in the fourth quarter of 2019 versus 28.6% during the third quarter of 2019 and 27.8% during the fourth quarter of 2018.

(1)

Additional information regarding market share is located in the Supplemental Information tables.

Rental

 

 

Three Months Ended

 

 

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

 

 

2019

 

 

2019

 

 

2018

 

 

 

(in thousands)

 

Rental revenue

 

$

28,215

 

$

35,528

 

$

31,194

 

Gross profit

 

$

12,821

 

$

18,334

 

$

17,656

 

Gross margin

 

 

45.4

%

 

51.6

%

 

56.6

%

Fourth quarter 2019 rental revenue decreased $7.3 million, or 20.6%, sequentially, as budget exhaustion led to reduced completion activity from the Company’s customers. Gross profit decreased $5.5 million, or 30.1%, sequentially and margins decreased 620 basis points due to lower revenue and an increase in depreciation expense.

Field Service and Other

 

 

Three Months Ended

 

 

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

 

 

2019

 

 

2019

 

 

2018

 

 

 

(in thousands)

 

Field service and other revenue

 

$

28,652

 

$

32,698

 

$

29,729

 

Gross profit

 

$

4,594

 

$

7,323

 

$

3,598

 

Gross margin

 

 

16.0

%

 

22.4

%

 

12.1

%

Fourth quarter 2019 field service and other revenue decreased $4.0 million, or 12.4%, sequentially, as lower customer activity drove a decline in associated billable hours and ancillary services. Gross profit decreased $2.7 million with margins declining by 640 basis points sequentially due to lower labor utilization during the quarter, largely due to the impacts of holidays and lower customer activity.

Selling, General and Administrative Expenses (“SG&A”)

SG&A for the fourth quarter of 2019 was $12.4 million (8.8% of revenues), compared to $13.3 million (8.3% of revenues) for the third quarter of 2019 and $10.5 million (7.5% of revenues) for the fourth quarter of 2018. The sequential decrease was due to reduced incentive compensation expense, professional fees and other costs.

Liquidity, Capital Expenditures and Supply Chain

As of December 31, 2019, the Company had $202.6 million of cash, no bank debt outstanding and the full $75.0 million of capacity available under its revolving credit facility. Operating cash flow was $61.4 million for the fourth quarter of 2019, attributable to strong operating results and a reduction in working capital. During the fourth quarter, the Company made its first regular dividend payment.

Net capital expenditures for the fourth quarter of 2019 were $18.2 million, driven largely by additions to the Company’s fleet of rental equipment, including recent innovations. Net capital expenditures for the full year 2019 were $55.9 million. For the full year 2020, the Company expects net capital expenditures to be in the range of $30 to $40 million.

Although travel restrictions, quarantines and other measures being taken by the Chinese government in response to the recent coronavirus outbreak affected our Chinese supply chain in February, we do not expect a material impact to first quarter results. Should there be additional measures taken by the Chinese government in response to negative developments in the outbreak, it could impact our future operating results. Based on events to date, Cactus believes it has sufficient inventory to meet customer demand in the near term. The Company is monitoring conditions closely and believes progress is being made toward returning our supply chain to full capacity.

Conference Call Details

The Company will host a conference call to discuss financial and operational results tomorrow, Thursday, February 27, 2020 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. Institutional investors and analysts may participate by dialing (866) 670-2203. International parties may dial (630) 489-9861. The access code is 2489677. Please access the webcast or dial in for the call at least 10 minutes ahead of start time to ensure a proper connection.

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, Eagle Ford and Bakken, among other areas, and in Eastern Australia.

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

 

Twelve Months Ended

 

 

December 31,

 

December 31,

 

 

 

2019

 

 

2018

 

 

 

2019

 

 

2018

 

 

 

(in thousands, except per share data)

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Product revenue

 

$

83,371

 

$

78,901

 

 

$

357,087

 

$

290,496

 

Rental revenue

 

 

28,215

 

 

31,194

 

 

 

141,816

 

 

133,418

 

Field service and other revenue

 

 

28,652

 

 

29,729

 

 

 

129,511

 

 

120,221

 

Total revenues

 

 

140,238

 

 

139,824

 

 

 

628,414

 

 

544,135

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses

 

 

 

 

 

 

 

 

 

 

 

 

Cost of product revenue

 

 

52,312

 

 

45,778

 

 

 

220,615

 

 

174,675

 

Cost of rental revenue

 

 

15,394

 

 

13,538

 

 

 

69,829

 

 

55,015

 

Cost of field service and other revenue

 

 

24,058

 

 

26,131

 

 

 

103,163

 

 

96,215

 

Selling, general and administrative expenses

 

 

12,389

 

 

10,513

 

 

 

51,657

 

 

40,529

 

Total costs and expenses

 

 

104,153

 

 

95,960

 

 

 

445,264

 

 

366,434

 

Income from operations

 

 

36,085

 

 

43,864

 

 

 

183,150

 

 

177,701

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income (expense), net

 

 

390

 

 

(225

)

 

 

879

 

 

(3,595

)

Other income (expense), net

 

 

4,778

 

 

 

 

 

4,294

 

 

(4,305

)

Income before income taxes

 

 

41,253

 

 

43,639

 

 

 

188,323

 

 

169,801

 

Income tax expense

 

 

9,979

 

 

4,956

 

 

 

32,020

 

 

19,520

 

Net income

 

$

31,274

 

$

38,683

 

 

$

156,303

 

$

150,281

 

Less: pre-IPO net income attributable to Cactus LLC

 

 

 

 

 

 

 

 

 

13,648

 

Less: net income attributable to non-controlling interest

 

 

13,216

 

 

21,759

 

 

 

70,691

 

 

84,950

 

Net income attributable to Cactus Inc.

 

$

18,058

 

$

16,924

 

 

$

85,612

 

$

51,683

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per Class A share – basic

 

$

0.38

 

$

0.45

 

 

$

1.90

 

$

1.60

 

Earnings per Class A share – diluted (a)

 

$

0.38

 

$

0.44

 

 

$

1.88

 

$

1.58

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding – basic

 

 

47,128

 

 

37,650

 

 

 

44,983

 

 

32,329

 

Weighted average shares outstanding – diluted (a)

 

 

75,405

 

 

38,081

 

 

 

75,353

 

 

32,695

 

(a)

Dilution for the three and twelve months ended December 31, 2019 includes an additional $13.6 million and $73.7 million of pre-tax income attributable to non-controlling interest adjusted for a corporate effective tax rate of 24% and 28.0 million and 30.1 million weighted average shares of Class B common stock, respectively, plus the effect of dilutive securities. Dilution for the three and twelve months ended December 31, 2018 excludes 37.2 million and 42.6 million weighted average shares of Class B common stock, respectively, as the effect would be anti-dilutive.

Cactus, Inc.

Condensed Consolidated Balance Sheets

(unaudited)

 

 

 

 

 

 

 

 

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

(in thousands)

Assets

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

202,603

 

$

70,841

Accounts receivable, net

 

 

87,865

 

 

92,269

Inventories

 

 

113,371

 

 

99,837

Prepaid expenses and other current assets

 

 

11,044

 

 

11,558

Total current assets

 

 

414,883

 

 

274,505

 

 

 

 

 

 

 

Property and equipment, net

 

 

161,748

 

 

142,054

Operating lease right-of-use assets, net

 

 

26,561

 

 

Goodwill

 

 

7,824

 

 

7,824

Deferred tax asset, net

 

 

222,545

 

 

159,053

Other noncurrent assets

 

 

1,403

 

 

1,308

Total assets

 

$

834,964

 

$

584,744

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

$

40,957

 

$

42,047

Accrued expenses and other current liabilities

 

 

22,067

 

 

15,650

Current portion of liability related to tax receivable agreement

 

 

14,630

 

 

9,574

Finance lease obligations, current portion

 

 

6,735

 

 

7,353

Operating lease liabilities, current portion

 

 

6,737

 

 

Total current liabilities

 

 

91,126

 

 

74,624

 

 

 

 

 

 

 

Deferred tax liability, net

 

 

1,348

 

 

1,036

Liability related to tax receivable agreement, net of current portion

 

 

201,902

 

 

138,015

Finance lease obligations, net of current portion

 

 

3,910

 

 

8,741

Operating lease liabilities, net of current portion

 

 

20,283

 

 

Total liabilities

 

 

318,569

 

 

222,416

 

 

 

 

 

 

 

Equity

 

 

516,395

 

 

362,328

Total liabilities and equity

 

$

834,964

 

$

584,744

Cactus, Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)

 

 

 

 

 

 

 

 

 

 

Twelve Months Ended December 31,

 

 

 

2019

 

 

 

2018

 

 

 

(in thousands)

Cash flows from operating activities

 

 

 

 

 

 

Net income

 

$

156,303

 

 

$

150,281

 

Reconciliation of net income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

38,854

 

 

 

30,153

 

Debt discount and deferred financing cost amortization

 

 

168

 

 

 

275

 

Stock-based compensation

 

 

6,995

 

 

 

4,704

 

Provision for bad debts

 

 

355

 

 

 

 

Inventory obsolescence

 

 

2,552

 

 

 

1,451

 

Loss on disposal of assets

 

 

236

 

 

 

886

 

Deferred income taxes

 

 

25,403

 

 

 

15,201

 

Loss on debt extinguishment

 

 

 

 

 

4,305

 

Gain from revaluation of liability related to tax receivable agreement

 

 

(5,336

)

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

4,204

 

 

 

(8,105

)

Inventories

 

 

(17,592

)

 

 

(38,227

)

Prepaid expenses and other assets

 

 

438

 

 

 

(6,509

)

Accounts payable

 

 

(607

)

 

 

7,651

 

Accrued expenses and other liabilities

 

 

6,994

 

 

 

5,114

 

Payments pursuant to tax receivable agreement

 

 

(9,335

)

 

 

 

Net cash provided by operating activities

 

 

209,632

 

 

 

167,180

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

Capital expenditures and other

 

 

(59,703

)

 

 

(70,053

)

Proceeds from sale of assets

 

 

3,755

 

 

 

1,899

 

Net cash used in investing activities

 

 

(55,948

)

 

 

(68,154

)

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

Principal payments on long-term debt

 

 

 

 

 

(248,529

)

Payment of deferred financing costs

 

 

 

 

 

(840

)

Payments on finance leases

 

 

(7,484

)

 

 

(6,274

)

Net proceeds from equity offerings

 

 

 

 

 

828,168

 

Dividends paid to Class A common stock shareholders

 

 

(4,244

)

 

 

 

Distributions to members

 

 

(8,392

)

 

 

(31,848

)

Redemptions of CW Units

 

 

 

 

 

(575,681

)

Repurchase of shares

 

 

(1,549

)

 

 

 

Net cash used in financing activities

 

 

(21,669

)

 

 

(35,004

)

 

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

 

(253

)

 

 

(755

)

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

 

131,762

 

 

 

63,267

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

Beginning of period

 

 

70,841

 

 

 

7,574

 

End of period

 

$

202,603

 

 

$

70,841

 

Cactus, Inc. – Supplemental Information

Reconciliation of GAAP to non-GAAP Financial Measures

Net income, as adjusted and diluted earnings per share, as adjusted(1)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

 

2019

 

 

 

2019

 

 

 

2018

 

 

 

(in thousands, except per share data)

Net income

 

$

31,274

 

 

$

35,833

 

 

$

38,683

 

Adjustments:

 

 

 

 

 

 

 

 

 

Other non-operating income, pre-tax (2)

 

 

(4,778

)

 

 

(558

)

 

 

 

Income tax expense differential (3)

 

 

1,225

 

 

 

822

 

 

 

(4,856

)

Net income, as adjusted (1)

 

$

27,721

 

 

$

36,097

 

 

$

33,827

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share, as adjusted (1)

 

$

0.37

 

 

$

0.48

 

 

$

0.45

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding, as adjusted (4)

 

 

75,405

 

 

 

75,340

 

 

 

75,321

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Twelve Months Ended

 

 

 

December 31,

 

 

 

 

 

December 31,

 

 

 

2019

 

 

 

 

 

 

2018

 

 

 

(in thousands, except per share data)

Net income

 

$

156,303

 

 

 

 

 

$

150,281

 

Adjustments:

 

 

 

 

 

 

 

 

 

Other non-operating income, pre-tax (2)

 

 

(5,336

)

 

 

 

 

 

 

Secondary offering related expenses, pre-tax (5)

 

 

1,042

 

 

 

 

 

 

 

Term loan interest, pre-tax (6)

 

 

 

 

 

 

 

 

2,284

 

Loss on debt extinguishment, pre-tax (7)

 

 

 

 

 

 

 

 

4,305

 

Stock-based compensation, pre-tax (8)

 

 

 

 

 

 

 

 

(417

)

Income tax expense differential (3)

 

 

(12,147

)

 

 

 

 

 

(22,714

)

Net income, as adjusted (1)

 

$

139,862

 

 

 

 

 

$

133,739

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share, as adjusted (1)

 

$

1.86

 

 

 

 

 

$

1.78

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding, as adjusted (4)

 

 

75,353

 

 

 

 

 

 

75,256

 

(1)

Net income, as adjusted and diluted earnings per share, as adjusted are not measures of net income as determined by GAAP. Net income, as adjusted and diluted earnings per share, as adjusted are supplemental non-GAAP financial measures that are used by management and external users of the Company’s consolidated financial statements. Cactus defines net income, as adjusted 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. Net income, as adjusted, also includes certain other adjustments described below. Cactus defines diluted earnings per share, as adjusted as net income, as adjusted divided by weighted average shares outstanding, as adjusted. The Company believes this supplemental information is useful for evaluating performance period over period.

(2)

Represents non-cash adjustments for the revaluation of the liability related to the tax receivable agreement.

(3)

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 24.0% on income before income taxes for the three and twelve months ended December 31, 2019 and twelve months ended December 31, 2018 and 22.5% for the three months ended December 31, 2018.

(4)

Reflects 47.1, 47.1, and 37.7 million weighted average shares of basic Class A common stock and 28.0, 28.0 and 37.2 million of additional shares for the three months ended December 31, 2019, September 30, 2019, and December 31, 2018, respectively, and 45.0 and 32.3 million weighted average shares of basic Class A common stock and 30.1 and 42.6 million of additional shares for the twelve months ended December 31, 2019 and December 31, 2018, respectively, as if the weighted average shares of Class B common stock were exchanged and canceled for Class A common stock at the beginning of the period, plus the effect of dilutive securities.

(5)

Reflects fees and expenses recorded in first quarter 2019 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.

(6)

Reflects the removal of the term loan interest expense recorded during first quarter 2018 as the term loan was repaid in full in conjunction with the IPO.

(7)

Reflects the removal of the loss on debt extinguishment recorded in first quarter 2018.

(8)

Represents the additional stock-based compensation expense that would have been recorded during the first quarter assuming the restricted stock unit awards were issued as of January 1, 2018.

Cactus, Inc. – Supplemental Information

Reconciliation of GAAP to non-GAAP Financial Measures

EBITDA and Adjusted EBITDA(1)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

December 31,

 

 

September 30,

 

 

December 31,

 

 

 

2019

 

 

 

2019

 

 

 

2018

 

 

(in thousands)

Net income

 

$

31,274

 

 

$

35,833

 

 

$

38,683

Interest (income) expense, net

 

 

(390

)

 

 

(373

)

 

 

225

Income tax expense

 

 

9,979

 

 

 

12,221

 

 

 

4,956

Depreciation and amortization

 

 

10,590

 

 

 

10,007

 

 

 

8,324

EBITDA (1)

 

 

51,453

 

 

 

57,688

 

 

 

52,188

Other non-operating income (2)

 

 

(4,778

)

 

 

(558

)

 

 

Stock-based compensation

 

 

1,738

 

 

 

1,689

 

 

 

1,320

Adjusted EBITDA (1)

 

$

48,413

 

 

$

58,819

 

 

$

53,508

 

 

 

 

 

 

 

 

 

 

 

 

 

Twelve Months Ended

 

 

 

December 31,

 

 

 

 

 

December 31,

 

 

 

2019

 

 

 

 

 

 

2018

 

 

(in thousands)

Net income

 

$

156,303

 

 

 

 

 

$

150,281

Interest (income) expense, net

 

 

(879

)

 

 

 

 

 

3,595

Income tax expense

 

 

32,020

 

 

 

 

 

 

19,520

Depreciation and amortization

 

 

38,854

 

 

 

 

 

 

30,153

EBITDA (1)

 

 

226,298

 

 

 

 

 

 

203,549

Other non-operating income (2)

 

 

(5,336

)

 

 

 

 

 

Secondary offering related expenses

 

 

1,042

 

 

 

 

 

 

Loss on debt extinguishment

 

 

 

 

 

 

 

 

4,305

Stock-based compensation

 

 

6,995

 

 

 

 

 

 

4,704

Adjusted EBITDA (1)

 

$

228,999

 

 

 

 

 

$

212,558

(1)

EBITDA and Adjusted EBITDA are not measures of net income as determined by GAAP. EBITDA and Adjusted EBITDA 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 above.

 

 

 

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 presents EBITDA and Adjusted EBITDA because it believes they provide useful information regarding the factors and trends affecting the Company’s business.

(2)

Represents non-cash adjustments for the revaluation of the liability related to the tax receivable agreement.

Contacts

Cactus, Inc.
John Fitzgerald, 713-904-4655

Director of Corporate Development and Investor Relations

IR@CactusWHD.com

 

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