UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(MARK ONE)
| | | | | |
☑ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 20212022
or
| | | | | |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from _____ to _____
Commission File Number: 001-38390
Cactus, Inc.
(Exact name of registrant as specified in its charter)
| | | | | | | | |
Delaware | 35-2586106 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
| | |
920 Memorial City Way, Suite 300 | 77024 |
Houston, | Texas | (Zip Code) |
(Address of principal executive offices) | |
(713) 626-8800
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | | | | | | | |
Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
Class A Common Stock, par value $0.01 | | WHD | | New York Stock Exchange |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| | | | | | | | | | | |
Large accelerated filer | ☑ | Accelerated filer | ☐ |
Non-accelerated filer | ☐ | Smaller reporting company | ☐ |
| | Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
As of May 3, 2021,2022, the registrant had 54,448,35260,451,746 shares of Class A common stock, $0.01 par value per share, and 21,251,81415,420,660 shares of Class B common stock, $0.01 par value per share, outstanding.
TABLE OF CONTENTS
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (the “Quarterly Report”) contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). When used in this Quarterly Report, the words “could,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on our current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. When considering forward‑looking statements, you should keep in mind the risk factors and other cautionary statements described under “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021 (our “2021 Annual Report”) and other cautionary statements contained herein. These forward‑looking statements are based on management’s current belief, based on currently available information, as to the outcome and timing of future events.
Forward-lookingImportant factors that could cause actual results to differ materially from those contained in the forward-looking statements may include, statements about:but are not limited to:
•demand for our products and services, which is affected by, among other things, changes in the price of crude oil and natural gas in domestic and international markets;
•the number of active rigs, pad sizes, drilling and completion efficiencies, lateral lengths, well spacings and associated well countcounts and the availability of takeaway and storage capacity;
•disparities in activity levels between private operators and large publicly-traded exploration and production (“E&P”) companies;
•the number of active workover rigs;
•availability of capital and the associated capital spending discipline exercised by customers;
•overall oilfield service cost inflation;
•our success in cost recovery efforts;
•the financial health of our customers and our credit risk of customer non-payment;
•changes in the number of drilled but uncompleted wells (DUCs) and the level of well completion activity;
•the size and timing of orders;
•availability and cost of raw materials, components and imported items;
•increased inland and ocean shipping costs, andthe availability of ocean freightcontainers and vessels from China;Asia as well as port congestion and domestic trucking capacity;
•transportation differentials associated with reduced capacity in and out of the storage hub in Cushing, Oklahoma;
•expectations regarding overhead and operating costs and margins;
•availability and cost of skilled and qualified workers and our ability to hire and retain such workers;
•potential liabilities such as warranty and product liability claims arising out of the installation, use or misuse of our products;
•the possibility of cancellation of orders;
•our business strategy;
•our financial strategy, operating cash flows, liquidity and capital required for our business;
•our future revenue, income and operating performance;
•our ability to pay dividends and the amounts of any such dividends;
•corporate consolidation activity involving our customers;
•the addition or termination of relationships with major customers or suppliers;
•laws and regulations, including environmental regulations, that may increase our costs, limit the demand for our products and services or restrict our operations;
•disruptions in political, regulatory, economic and social conditions domestically or internationally;
•the severity and duration of the ongoing outbreak of coronavirus (“COVID-19”COVID”) and the extent of its impact on our business;business, including employee absenteeism;
•outbreaks of other pandemic or contagious diseases that may disrupt our operations, suppliers or facilities or impact demand for oil and natural gas;
•the impact of actions taken by the Organization of Petroleum Exporting Countries (“OPEC”)(OPEC) and other oil and gas producing countries affecting the supply of oil and gas;
•the impact of planned and possible future releases from the Strategic Petroleum Reserve;
•the impact of potential disruptions in Russian oil and gas deliveries resulting from the conflict in Ukraine;
•increases in import tariffs or duties assessed on products and imported raw materials used in the production and assembly of our goods which could negatively impact margins and our working capital;
•the significance of future liabilities under the Tax Receivable Agreement (the “TRA”) we entered into with certain current or past direct and indirect owners of Cactus Wellhead, LLC (the “TRA Holders”) in connection with our 2018 initial public offering;
•the impact of shipping delays on our operations and level of working capital;
•a failure of our information technology infrastructure or any significant breach of security;
•potential uninsured claims and litigation against us;
•competition and capacity within the oilfield services industry;
•our dependence on the continuing services of certain of our key managers and employees;
•currency exchange rate fluctuations associated with our international operations; and
•plans, objectives, expectations and intentions contained in this Quarterly Report that are not historical.
AlthoughWe caution you that these forward-looking statements reflectare subject to all of the risks and uncertainties, most of which are difficult to predict and many of which are beyond our good faith beliefs atcontrol, incident to the time theyoperation of our business. These risks include, but are made, forward-looking statements involve known and unknownnot limited to the risks uncertainties and other factors, including the factors described in our 2021 Annual Report under Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020 (our “2020 Annual Report”), this Quarterly Report and in our other filings with the SEC, which may cause our actual results, performance or achievements to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements.
Factors.” Should one or more of the risks or uncertainties described in this Quarterly Report occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements.
All forward-looking statements, expressed or implied, included in this Quarterly Report are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue.
Except as otherwise required by applicable law, we disclaim any duty 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 Quarterly Report.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
CACTUS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
| | | March 31, 2021 | | December 31, 2020 | | March 31, 2022 | | December 31, 2021 |
| | (in thousands, except per share data) | | (in thousands, except per share data) |
Assets | Assets | | | | Assets | | | |
Current assets | Current assets | | Current assets | |
Cash and cash equivalents | Cash and cash equivalents | $ | 291,970 | | | $ | 288,659 | | Cash and cash equivalents | $ | 297,741 | | | $ | 301,669 | |
Accounts receivable, net of allowance of $630 and $598, respectively | 57,633 | | | 44,068 | | |
Accounts receivable, net of allowance of $616 and $741, respectively | | Accounts receivable, net of allowance of $616 and $741, respectively | 104,211 | | | 89,205 | |
Inventories | Inventories | 84,857 | | | 87,480 | | Inventories | 136,201 | | | 119,817 | |
Prepaid expenses and other current assets | Prepaid expenses and other current assets | 4,947 | | | 4,935 | | Prepaid expenses and other current assets | 8,212 | | | 7,794 | |
Total current assets | Total current assets | 439,407 | | | 425,142 | | Total current assets | 546,365 | | | 518,485 | |
Property and equipment, net | Property and equipment, net | 139,497 | | | 142,825 | | Property and equipment, net | 132,746 | | | 129,117 | |
Operating lease right-of-use assets, net | Operating lease right-of-use assets, net | 21,316 | | | 21,994 | | Operating lease right-of-use assets, net | 21,678 | | | 22,538 | |
Goodwill | Goodwill | 7,824 | | | 7,824 | | Goodwill | 7,824 | | | 7,824 | |
Deferred tax asset, net | Deferred tax asset, net | 268,625 | | | 216,603 | | Deferred tax asset, net | 316,526 | | | 303,074 | |
Other noncurrent assets | Other noncurrent assets | 1,196 | | | 1,206 | | Other noncurrent assets | 1,052 | | | 1,040 | |
Total assets | Total assets | $ | 877,865 | | | $ | 815,594 | | Total assets | $ | 1,026,191 | | | $ | 982,078 | |
Liabilities and Equity | Liabilities and Equity | | | | Liabilities and Equity | | | |
Current liabilities | Current liabilities | | Current liabilities | |
Accounts payable | Accounts payable | $ | 21,053 | | | $ | 20,163 | | Accounts payable | $ | 51,168 | | | $ | 42,818 | |
Accrued expenses and other current liabilities | Accrued expenses and other current liabilities | 15,794 | | | 11,392 | | Accrued expenses and other current liabilities | 28,746 | | | 28,240 | |
Current portion of liability related to tax receivable agreement | Current portion of liability related to tax receivable agreement | 9,290 | | | 9,290 | | Current portion of liability related to tax receivable agreement | 11,769 | | | 11,769 | |
Finance lease obligations, current portion | Finance lease obligations, current portion | 4,340 | | | 3,823 | | Finance lease obligations, current portion | 5,593 | | | 4,867 | |
Operating lease liabilities, current portion | Operating lease liabilities, current portion | 4,579 | | | 4,247 | | Operating lease liabilities, current portion | 5,181 | | | 4,880 | |
Total current liabilities | Total current liabilities | 55,056 | | | 48,915 | | Total current liabilities | 102,457 | | | 92,574 | |
Deferred tax liability, net | Deferred tax liability, net | 864 | | | 786 | | Deferred tax liability, net | 1,432 | | | 1,172 | |
Liability related to tax receivable agreement, net of current portion | Liability related to tax receivable agreement, net of current portion | 241,792 | | | 195,061 | | Liability related to tax receivable agreement, net of current portion | 283,620 | | | 269,838 | |
Finance lease obligations, net of current portion | Finance lease obligations, net of current portion | 4,197 | | | 2,240 | | Finance lease obligations, net of current portion | 7,009 | | | 5,811 | |
Operating lease liabilities, net of current portion | Operating lease liabilities, net of current portion | 16,906 | | | 17,822 | | Operating lease liabilities, net of current portion | 16,571 | | | 17,650 | |
Total liabilities | Total liabilities | 318,815 | | | 264,824 | | Total liabilities | 411,089 | | | 387,045 | |
Commitments and contingencies | Commitments and contingencies |
| |
0 | Commitments and contingencies |
| |
0 |
0Stockholders’ equity | 0Stockholders’ equity | | 0Stockholders’ equity | |
Preferred stock, $0.01 par value, 10,000 shares authorized, NaN issued and outstanding | 0 | | | 0 | | |
Class A common stock, $0.01 par value, 300,000 shares authorized, 54,317 and 47,713 shares issued and outstanding | 543 | | | 477 | | |
Class B common stock, $0.01 par value, 215,000 shares authorized, 21,383 and 27,655 shares issued and outstanding | 0 | | | 0 | | |
Preferred stock, $0.01 par value, 10,000 shares authorized, none issued and outstanding | | Preferred stock, $0.01 par value, 10,000 shares authorized, none issued and outstanding | — | | | — | |
Class A common stock, $0.01 par value, 300,000 shares authorized, 60,197 and 59,035 shares issued and outstanding | | Class A common stock, $0.01 par value, 300,000 shares authorized, 60,197 and 59,035 shares issued and outstanding | 602 | | | 590 | |
Class B common stock, $0.01 par value, 215,000 shares authorized, 15,674 and 16,674 shares issued and outstanding | | Class B common stock, $0.01 par value, 215,000 shares authorized, 15,674 and 16,674 shares issued and outstanding | — | | | — | |
Additional paid-in capital | Additional paid-in capital | 247,875 | | | 202,077 | | Additional paid-in capital | 298,893 | | | 289,600 | |
Retained earnings | Retained earnings | 157,286 | | | 150,086 | | Retained earnings | 192,493 | | | 178,446 | |
Accumulated other comprehensive income | Accumulated other comprehensive income | 255 | | | 330 | | Accumulated other comprehensive income | 335 | | | 8 | |
Total stockholders’ equity attributable to Cactus Inc. | Total stockholders’ equity attributable to Cactus Inc. | 405,959 | | | 352,970 | | Total stockholders’ equity attributable to Cactus Inc. | 492,323 | | | 468,644 | |
Non-controlling interest | Non-controlling interest | 153,091 | | | 197,800 | | Non-controlling interest | 122,779 | | | 126,389 | |
Total stockholders’ equity | Total stockholders’ equity | 559,050 | | | 550,770 | | Total stockholders’ equity | 615,102 | | | 595,033 | |
Total liabilities and equity | Total liabilities and equity | $ | 877,865 | | | $ | 815,594 | | Total liabilities and equity | $ | 1,026,191 | | | $ | 982,078 | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
CACTUS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
| | | Three Months Ended March 31, | | Three Months Ended March 31, | |
| | 2021 | | 2020 | | 2022 | | 2021 | |
| | (in thousands, except per share data) | | (in thousands, except per share data) | |
Revenues | Revenues | | | | Revenues | | | | |
Product revenue | Product revenue | $ | 51,956 | | | $ | 87,031 | | Product revenue | $ | 94,040 | | | $ | 51,956 | | |
Rental revenue | Rental revenue | 12,489 | | | 36,163 | | Rental revenue | 22,343 | | | 12,489 | | |
Field service and other revenue | Field service and other revenue | 19,972 | | | 30,945 | | Field service and other revenue | 29,516 | | | 19,972 | | |
Total revenues | Total revenues | 84,417 | | | 154,139 | | Total revenues | 145,899 | | | 84,417 | | |
Costs and expenses | Costs and expenses | | | | Costs and expenses | | | | |
Cost of product revenue | Cost of product revenue | 36,521 | | | 56,135 | | Cost of product revenue | 60,920 | | | 36,521 | | |
Cost of rental revenue | Cost of rental revenue | 12,171 | | | 19,339 | | Cost of rental revenue | 15,089 | | | 12,171 | | |
Cost of field service and other revenue | Cost of field service and other revenue | 14,463 | | | 23,811 | | Cost of field service and other revenue | 24,806 | | | 14,463 | | |
Selling, general and administrative expenses | Selling, general and administrative expenses | 9,627 | | | 13,662 | | Selling, general and administrative expenses | 14,094 | | | 9,627 | | |
Severance expenses | 0 | | | 1,007 | | |
Total costs and expenses | Total costs and expenses | 72,782 | | | 113,954 | | Total costs and expenses | 114,909 | | | 72,782 | | |
Income from operations | Income from operations | 11,635 | | | 40,185 | | Income from operations | 30,990 | | | 11,635 | | |
| Interest income (expense), net | (152) | | | 410 | | |
Interest expense, net | | Interest expense, net | (100) | | | (152) | | |
Other expense, net | Other expense, net | (406) | | | 0 | | Other expense, net | (1,115) | | | (406) | | |
Income before income taxes | Income before income taxes | 11,077 | | | 40,595 | | Income before income taxes | 29,775 | | | 11,077 | | |
Income tax expense (benefit) | Income tax expense (benefit) | (4,059) | | | 7,497 | | Income tax expense (benefit) | 2,692 | | | (4,059) | | |
Net income | Net income | $ | 15,136 | | | $ | 33,098 | | Net income | $ | 27,083 | | | $ | 15,136 | | |
Less: net income attributable to non-controlling interest | Less: net income attributable to non-controlling interest | 3,577 | | | 14,115 | | Less: net income attributable to non-controlling interest | 6,467 | | | 3,577 | | |
Net income attributable to Cactus Inc. | Net income attributable to Cactus Inc. | $ | 11,559 | | | $ | 18,983 | | Net income attributable to Cactus Inc. | $ | 20,616 | | | $ | 11,559 | | |
| Earnings per Class A share - basic | Earnings per Class A share - basic | $ | 0.24 | | | $ | 0.40 | | Earnings per Class A share - basic | $ | 0.35 | | | $ | 0.24 | | |
Earnings per Class A share - diluted | Earnings per Class A share - diluted | $ | 0.19 | | | $ | 0.40 | | Earnings per Class A share - diluted | $ | 0.34 | | | $ | 0.19 | | |
| Weighted average Class A shares outstanding - basic | Weighted average Class A shares outstanding - basic | 49,166 | | | 47,270 | | Weighted average Class A shares outstanding - basic | 59,288 | | | 49,166 | | |
Weighted average Class A shares outstanding - diluted | Weighted average Class A shares outstanding - diluted | 75,774 | | | 75,395 | | Weighted average Class A shares outstanding - diluted | 76,162 | | | 75,774 | | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
CACTUS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)
| | | Three Months Ended March 31, | | Three Months Ended March 31, | |
| | 2021 | | 2020 | | 2022 | | 2021 | |
| | (in thousands) | | (in thousands) | |
Net income | Net income | $ | 15,136 | | | $ | 33,098 | | Net income | $ | 27,083 | | | $ | 15,136 | | |
Foreign currency translation adjustments | Foreign currency translation adjustments | (193) | | | (1,083) | | Foreign currency translation adjustments | 436 | | | (193) | | |
Comprehensive income | Comprehensive income | $ | 14,943 | | | $ | 32,015 | | Comprehensive income | $ | 27,519 | | | $ | 14,943 | | |
Less: comprehensive income attributable to non-controlling interest | Less: comprehensive income attributable to non-controlling interest | 3,459 | | | 13,647 | | Less: comprehensive income attributable to non-controlling interest | 6,576 | | | 3,459 | | |
Comprehensive income attributable to Cactus Inc. | Comprehensive income attributable to Cactus Inc. | $ | 11,484 | | | $ | 18,368 | | Comprehensive income attributable to Cactus Inc. | $ | 20,943 | | | $ | 11,484 | | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
CACTUS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(unaudited)
| | | Class A | | Class B | | Additional Paid-In Capital | | Retained Earnings | | Accumulated Other Comprehensive Income (Loss) | | Non-controlling Interest | | Total Equity | | Class A | | Class B | | Additional Paid-In Capital | | Retained Earnings | | Accumulated Other Comprehensive Income (Loss) | | Non-controlling Interest | | Total Equity |
| | Common Stock | | Common Stock | | | Common Stock | | Common Stock | |
(in thousands) | (in thousands) | Shares | | Amount | | Shares | | Amount | | (in thousands) | Shares | | Amount | | Shares | | Amount | |
Balance at December 31, 2021 | | Balance at December 31, 2021 | 59,035 | | | $ | 590 | | | 16,674 | | | $ | — | | | $ | 289,600 | | | $ | 178,446 | | | $ | 8 | | | $ | 126,389 | | | $ | 595,033 | |
Member distributions | | Member distributions | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (1,654) | | | (1,654) | |
Effect of CW Unit redemptions | | Effect of CW Unit redemptions | 1,000 | | | 10 | | | (1,000) | | | — | | | 7,878 | | | — | | | — | | | (7,888) | | | — | |
Tax impact of equity transactions | | Tax impact of equity transactions | — | | | — | | | — | | | — | | | 2,531 | | | — | | | — | | | — | | | 2,531 | |
Equity award vestings | | Equity award vestings | 162 | | | 2 | | | — | | | — | | | (3,212) | | | — | | | — | | | (1,214) | | | (4,424) | |
Other comprehensive income | | Other comprehensive income | — | | | — | | | — | | | — | | | — | | | — | | | 327 | | | 109 | | | 436 | |
Stock-based compensation | | Stock-based compensation | — | | | — | | | — | | | — | | | 2,096 | | | — | | | — | | | 570 | | | 2,666 | |
Cash dividends declared ($0.11 per share) | | Cash dividends declared ($0.11 per share) | — | | | — | | | — | | | — | | | — | | | (6,569) | | | — | | | — | | | (6,569) | |
Net income | | Net income | — | | | — | | | — | | | — | | | — | | | 20,616 | | | — | | | 6,467 | | | 27,083 | |
Balance at March 31, 2022 | | Balance at March 31, 2022 | 60,197 | | | $ | 602 | | | 15,674 | | | $ | — | | | $ | 298,893 | | | $ | 192,493 | | | $ | 335 | | | $ | 122,779 | | | $ | 615,102 | |
| Balance at December 31, 2020 | Balance at December 31, 2020 | 47,713 | | | $ | 477 | | | 27,655 | | | $ | 0 | | | $ | 202,077 | | | $ | 150,086 | | | $ | 330 | | | $ | 197,800 | | | $ | 550,770 | | Balance at December 31, 2020 | 47,713 | | | $ | 477 | | | 27,655 | | | $ | — | | | $ | 202,077 | | | $ | 150,086 | | | $ | 330 | | | $ | 197,800 | | | $ | 550,770 | |
Member distributions | Member distributions | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (1,674) | | | (1,674) | | Member distributions | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (1,674) | | | (1,674) | |
Effect of CW Unit redemptions | Effect of CW Unit redemptions | 6,272 | | | 63 | | | (6,272) | | | — | | | 44,999 | | | — | | | 0 | | | (45,062) | | | — | | Effect of CW Unit redemptions | 6,272 | | | 63 | | | (6,272) | | | — | | | 44,999 | | | — | | | — | | | (45,062) | | | — | |
Tax impact of equity transactions | Tax impact of equity transactions | — | | | — | | | — | | | — | | | 505 | | | — | | | — | | | — | | | 505 | | Tax impact of equity transactions | — | | | — | | | — | | | — | | | 505 | | | — | | | — | | | — | | | 505 | |
Equity award vestings | Equity award vestings | 332 | | | 3 | | | — | | | — | | | (1,048) | | | — | | | — | | | (2,093) | | | (3,138) | | Equity award vestings | 332 | | | 3 | | | — | | | — | | | (1,048) | | | — | | | — | | | (2,093) | | | (3,138) | |
Other comprehensive loss | Other comprehensive loss | — | | | — | | | — | | | — | | | — | | | — | | | (75) | | | (118) | | | (193) | | Other comprehensive loss | — | | | — | | | — | | | — | | | — | | | — | | | (75) | | | (118) | | | (193) | |
Stock-based compensation | Stock-based compensation | — | | | — | | | — | | | — | | | 1,342 | | | — | | | — | | | 661 | | | 2,003 | | Stock-based compensation | — | | | — | | | — | | | — | | | 1,342 | | | — | | | — | | | 661 | | | 2,003 | |
Cash dividends declared ($0.09 per share) | Cash dividends declared ($0.09 per share) | — | | | — | | | — | | | — | | | — | | | (4,359) | | | — | | | — | | | (4,359) | | Cash dividends declared ($0.09 per share) | — | | | — | | | — | | | — | | | — | | | (4,359) | | | — | | | — | | | (4,359) | |
Net income | Net income | — | | | — | | | — | | | — | | | — | | | 11,559 | | | — | | | 3,577 | | | 15,136 | | Net income | — | | | — | | | — | | | — | | | — | | | 11,559 | | | — | | | 3,577 | | | 15,136 | |
Balance at March 31, 2021 | Balance at March 31, 2021 | 54,317 | | | $ | 543 | | | 21,383 | | | $ | 0 | | | $ | 247,875 | | | $ | 157,286 | | | $ | 255 | | | $ | 153,091 | | | $ | 559,050 | | Balance at March 31, 2021 | 54,317 | | | $ | 543 | | | 21,383 | | | $ | — | | | $ | 247,875 | | | $ | 157,286 | | | $ | 255 | | | $ | 153,091 | | | $ | 559,050 | |
| Balance at December 31, 2019 | 47,159 | | | $ | 472 | | | 27,958 | | | $ | 0 | | | $ | 194,456 | | | $ | 132,990 | | | $ | (452) | | | $ | 188,929 | | | $ | 516,395 | | |
Member distributions | — | | | — | | | — | | | — | | | — | | | — | | | — | | | (2,203) | | | (2,203) | | |
Tax impact of equity transactions | — | | | — | | | — | | | — | | | (94) | | | — | | | — | | | — | | | (94) | | |
Equity award vestings | 239 | | | 2 | | | — | | | — | | | (221) | | | — | | | — | | | (1,138) | | | (1,357) | | |
Other comprehensive loss | — | | | — | | | — | | | — | | | — | | | — | | | (615) | | | (468) | | | (1,083) | | |
Stock-based compensation | — | | | — | | | — | | | — | | | 1,240 | | | — | | | — | | | 733 | | | 1,973 | | |
Cash dividends declared ($0.09 per share) | — | | | — | | | — | | | — | | | — | | | (4,303) | | | — | | | — | | | (4,303) | | |
Net income | — | | | — | | | — | | | — | | | — | | | 18,983 | | | — | | | 14,115 | | | 33,098 | | |
Balance at March 31, 2020 | 47,398 | | | $ | 474 | | | 27,958 | | | $ | 0 | | | $ | 195,381 | | | $ | 147,670 | | | $ | (1,067) | | | $ | 199,968 | | | $ | 542,426 | | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
CACTUS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
| | | Three Months Ended March 31, | | Three Months Ended March 31, |
| | 2021 | | 2020 | | 2022 | | 2021 |
| | (in thousands) | | (in thousands) |
Cash flows from operating activities | Cash flows from operating activities | | | | Cash flows from operating activities | | | |
Net income | Net income | $ | 15,136 | | | $ | 33,098 | | Net income | $ | 27,083 | | | $ | 15,136 | |
Reconciliation of net income to net cash provided by operating activities: | Reconciliation of net income to net cash provided by operating activities: | | Reconciliation of net income to net cash provided by operating activities: | |
Depreciation and amortization | Depreciation and amortization | 9,193 | | | 10,980 | | Depreciation and amortization | 8,677 | | | 9,193 | |
Deferred financing cost amortization | Deferred financing cost amortization | 42 | | | 42 | | Deferred financing cost amortization | 42 | | | 42 | |
Stock-based compensation | Stock-based compensation | 2,003 | | | 1,973 | | Stock-based compensation | 2,666 | | | 2,003 | |
Provision for expected credit losses | Provision for expected credit losses | 66 | | | 625 | | Provision for expected credit losses | (110) | | | 66 | |
Inventory obsolescence | Inventory obsolescence | 1,308 | | | 1,353 | | Inventory obsolescence | 480 | | | 1,308 | |
Loss on disposal of assets | 4 | | | 961 | | |
(Gain) loss on disposal of assets | | (Gain) loss on disposal of assets | (293) | | | 4 | |
Deferred income taxes | Deferred income taxes | (4,691) | | | 4,848 | | Deferred income taxes | 1,919 | | | (4,691) | |
| Loss from revaluation of liability related to tax receivable agreement | | Loss from revaluation of liability related to tax receivable agreement | 1,115 | | | — | |
Changes in operating assets and liabilities: | Changes in operating assets and liabilities: | | Changes in operating assets and liabilities: | |
Accounts receivable | Accounts receivable | (13,575) | | | (8,244) | | Accounts receivable | (14,681) | | | (13,575) | |
Inventories | Inventories | 1,012 | | | 8,306 | | Inventories | (16,648) | | | 1,012 | |
Prepaid expenses and other assets | Prepaid expenses and other assets | (17) | | | 1,497 | | Prepaid expenses and other assets | (463) | | | (17) | |
Accounts payable | Accounts payable | 791 | | | (8,142) | | Accounts payable | 6,934 | | | 791 | |
Accrued expenses and other liabilities | Accrued expenses and other liabilities | 4,475 | | | (2,136) | | Accrued expenses and other liabilities | 488 | | | 4,475 | |
| Net cash provided by operating activities | Net cash provided by operating activities | 15,747 | | | 45,161 | | Net cash provided by operating activities | 17,209 | | | 15,747 | |
| Cash flows from investing activities | Cash flows from investing activities | | Cash flows from investing activities | |
Capital expenditures and other | Capital expenditures and other | (2,428) | | | (9,441) | | Capital expenditures and other | (7,652) | | | (2,428) | |
Proceeds from sale of assets | Proceeds from sale of assets | 400 | | | 1,103 | | Proceeds from sale of assets | 358 | | | 400 | |
Net cash used in investing activities | Net cash used in investing activities | (2,028) | | | (8,338) | | Net cash used in investing activities | (7,294) | | | (2,028) | |
| Cash flows from financing activities | Cash flows from financing activities | | Cash flows from financing activities | |
Payments on finance leases | Payments on finance leases | (1,174) | | | (1,764) | | Payments on finance leases | (1,438) | | | (1,174) | |
Dividends paid to Class A common stock shareholders | Dividends paid to Class A common stock shareholders | (4,497) | | | (4,281) | | Dividends paid to Class A common stock shareholders | (6,664) | | | (4,497) | |
Distributions to members | Distributions to members | (1,674) | | | (2,203) | | Distributions to members | (1,654) | | | (1,674) | |
Repurchases of shares | Repurchases of shares | (3,138) | | | (1,356) | | Repurchases of shares | (4,424) | | | (3,138) | |
Net cash used in financing activities | Net cash used in financing activities | (10,483) | | | (9,604) | | Net cash used in financing activities | (14,180) | | | (10,483) | |
| Effect of exchange rate changes on cash and cash equivalents | Effect of exchange rate changes on cash and cash equivalents | 75 | | | 380 | | Effect of exchange rate changes on cash and cash equivalents | 337 | | | 75 | |
| Net increase in cash and cash equivalents | 3,311 | | | 27,599 | | |
Net increase (decrease) in cash and cash equivalents | | Net increase (decrease) in cash and cash equivalents | (3,928) | | | 3,311 | |
| Cash and cash equivalents | Cash and cash equivalents | | Cash and cash equivalents | |
Beginning of period | Beginning of period | 288,659 | | | 202,603 | | Beginning of period | 301,669 | | | 288,659 | |
End of period | End of period | $ | 291,970 | | | $ | 230,202 | | End of period | $ | 297,741 | | | $ | 291,970 | |
| Supplemental disclosure of cash flow information | Supplemental disclosure of cash flow information | | Supplemental disclosure of cash flow information | |
Non-cash investing and financing activities: | Non-cash investing and financing activities: | | Non-cash investing and financing activities: | |
Property and equipment acquired under finance leases | $ | 3,671 | | | $ | 1,896 | | |
Property and equipment in payables | $ | 362 | | | $ | 3,767 | | |
Right-of-use assets obtained in exchange for new lease obligations | | Right-of-use assets obtained in exchange for new lease obligations | $ | 3,984 | | | $ | 4,274 | |
Property and equipment in accounts payable | | Property and equipment in accounts payable | $ | 1,574 | | | $ | 362 | |
The accompanying notes are an integral part of these condensed consolidated financial statements.
CACTUS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
(in thousands, except per share data, or as otherwise indicated)
1.Preparation of Interim Financial Statements and Other Items
Basis of Presentation
The financial statements presented in this report represent the consolidation of Cactus, Inc. (“Cactus Inc.”) and its subsidiaries (“the Company”(the “Company”), including Cactus Wellhead, LLC (“Cactus LLC”). Cactus Inc. is a holding company whose only material asset is an equity interest consisting of units representing limited liability company interests in Cactus LLC (“CW Units”). Cactus Inc. is the sole managing member of Cactus LLC and operates and controls all of the business and affairs of Cactus LLC and conducts its business through Cactus LLC and its subsidiaries. As a result, Cactus Inc. consolidates the financial results of Cactus LLC and its subsidiaries and reports a non-controlling interest related to the portion of CW Units not owned by Cactus Inc., which reduces net income attributable to holders of Cactus Inc.’s Class A common stock, par value $0.01 per share (“Class A common stock”). Except as otherwise indicated or required by the context, all references to “Cactus,” “we,” “us” and “our” refer to Cactus Inc. and its consolidated subsidiaries.
The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information. Accordingly, these consolidated financial statements do not include all information or notes required by generally accepted accounting principles for annual financial statements and should be read together with our Annual Report on Form 10-K for the year ended December 31, 2020.2021.
The consolidated financial statements include all adjustments, which are of a normal recurring nature, unless otherwise disclosed, necessary for a fair statement of the consolidated financial statements for the interim periods. The results of operations for any interim period are not necessarily indicative of the results to be expected for the full year.
Use of Estimates
In preparing our consolidated financial statements in conformity with GAAP, we make numerous estimates and assumptions that affect the accounting for and recognition and disclosure of assets, liabilities, equity, revenues and expenses. We must make these estimates and assumptions because certain information that we use is dependent on future events, cannot be calculated with a high degree of precision from available data or is not otherwise capable of being readily calculated based on accepted methodologies. In some cases, these estimates are particularly difficult to determine, and we must exercise significant judgment. Actual results could differ materially from the estimates and assumptions that we use in the preparation of our consolidated financial statements.
Reclassifications
Certain prior period amounts have been reclassified to conform to the current period presentation.
2.Concentrations, Risks and Uncertainties
Significant Customers
Our customers are primarily oil and natural gas explorationE&P companies representing private operators, publicly-traded independents, majors and productionother companies located primarilywith operations in the key U.S. oil and gas producing basins as well as Australia.Australia and the Kingdom of Saudi Arabia. For the three months ended March 31, 20212022 and 2020,2021, one customer represented 12%approximately 10% and 10%12%, respectively, of our consolidated revenue.revenues.
Significant Vendors
The principal raw materials used in the manufacture of our products and rental equipment include forgings and plate, castings, tube and bar stock. In addition, we require accessory items (such as elastomers, ring gaskets, studs and nuts) and machined components.components and assemblies. We purchase these items from vendors primarily located in the United States, China, India and Australia. For the three months ended March 31, 2022 and 2021, one vendor represented approximately 10% and 2020, we purchased approximately $3.0 million and $4.3 million, respectively, from a single vendor, representing approximately 12% and 10%, respectively, of our total third-party vendor purchases of raw materials, finished products, components, equipment, machining and other services. Amounts due to this vendor included in accounts payable in the consolidated balance sheets as of March 31, 2021 and December 31, 2020 totaled $0.8 million and $1.5 million, respectively.
COVID-19
The ongoing COVID-19 pandemic negatively impacted our business and revenues beginning in 2020, contributing to an approximately 45% decrease in revenues from the year ended December 31, 2019 to the year ended December 31, 2020. OPEC production cuts as well as increased oil demand primarily related to increasing vehicle and airline travel has led to higher oil prices, which ultimately drives our customers’ level of spending. As we have realized increased levels of demand for our products and services, we have begun to roll back some of the cost cutting measures that were implemented throughout 2020. Specifically, we have started adding back to our workforce population and added over 100 associates in the first three months of 2021. Additionally, in January 2021, we reinstated approximately 50% of the 2020 salary and wage reductions implemented in the U.S. and restored the remainder effective April 2021.
3.Accounts Receivable and Allowance for Credit Losses
We extend credit to customers in the normal course of business. Our customers are predominantly oil and gas E&P companies located predominately in the U.S. Our receivables are short-term in nature and typically due in 30 to 45 days. We do not accrue interest on delinquent receivables. Accounts receivable includes amounts billed and currently due from customers and unbilled amounts for products delivered and services performed for which billings have not yet been submitted to the customers. Total unbilled revenue included in accounts receivable as of March 31, 20212022 and December 31, 20202021 was $10.9$22.8 million and $8.7$24.1 million, respectively.
We maintain an allowance for credit losses to provide for the amount of billed receivables we believe to be at risk of loss. In our determination of the allowance for credit losses, we pool receivables with similar risk characteristics based on customer size, credit ratings, payment history, bankruptcy status and other factors known to us and apply an expected credit loss percentage. The expected credit loss percentage is determined using historical loss data adjusted for current conditions and forecasts of future economic conditions. Accounts deemed uncollectible are applied against the allowance for credit losses. The following is a rollforward of our allowance for credit losses.
| | | Balance at Beginning of Period | | Expense | | Write off | | | Balance at End of Period | | Balance at Beginning of Period | | Expense (Credit) | | Write off | | | Balance at End of Period |
Three Months Ended March 31, 2022 | | Three Months Ended March 31, 2022 | $ | 741 | | | $ | (110) | | | $ | (15) | | | | $ | 616 | |
Three Months Ended March 31, 2021 | Three Months Ended March 31, 2021 | $ | 598 | | | $ | 66 | | | $ | (34) | | | | $ | 630 | | Three Months Ended March 31, 2021 | 598 | | | 66 | | | (34) | | | | 630 | |
Three Months Ended March 31, 2020 | 837 | | | 625 | | | (32) | | | | 1,430 | | |
4.Inventories
Inventories are stated at the lower of cost or net realizable value. Cost is determined using standard cost (which approximates average cost) and weighted average methods. Costs include an application of related material, direct labor, tariff,duties, tariffs, freight and overhead cost.costs. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Reserves are made for excess and obsolete items based on a range of factors, including age, usage and technological or market changes that may impact demand for those products. Inventories consist of the following:
| | | March 31, 2021 | | December 31, 2020 | | March 31, 2022 | | December 31, 2021 |
Raw materials | Raw materials | $ | 1,729 | | | $ | 2,003 | | Raw materials | $ | 2,148 | | | $ | 1,870 | |
Work-in-progress | Work-in-progress | 4,139 | | | 3,598 | | Work-in-progress | 5,465 | | | 4,288 | |
Finished goods | Finished goods | 78,989 | | | 81,879 | | Finished goods | 128,588 | | | 113,659 | |
| | $ | 84,857 | | | $ | 87,480 | | | $ | 136,201 | | | $ | 119,817 | |
5.Property and Equipment, net
Property and equipment are stated at cost. We manufacture or construct most of our own rental assets. During the manufacture of these assets, they are reflected as construction in progress until complete. Property and equipment consists of the following:
| | | March 31, 2021 | | December 31, 2020 | | March 31, 2022 | | December 31, 2021 |
Land | Land | $ | 3,203 | | | $ | 3,203 | | Land | $ | 5,590 | | | $ | 3,203 | |
Buildings and improvements | Buildings and improvements | 21,971 | | | 21,935 | | Buildings and improvements | 23,927 | | | 22,532 | |
Machinery and equipment | Machinery and equipment | 57,881 | | | 57,726 | | Machinery and equipment | 57,467 | | | 56,937 | |
Vehicles under finance lease | Vehicles under finance lease | 17,931 | | | 14,371 | | Vehicles under finance lease | 26,425 | | | 23,450 | |
Rental equipment | Rental equipment | 175,283 | | | 172,012 | | Rental equipment | 186,418 | | | 180,704 | |
Furniture and fixtures | Furniture and fixtures | 1,779 | | | 1,780 | | Furniture and fixtures | 1,757 | | | 1,755 | |
Computers and software | Computers and software | 3,528 | | | 3,530 | | Computers and software | 3,520 | | | 3,495 | |
Gross property and equipment | Gross property and equipment | 281,576 | | | 274,557 | | Gross property and equipment | 305,104 | | | 292,076 | |
Less: Accumulated depreciation | Less: Accumulated depreciation | (156,014) | | | (147,221) | | Less: Accumulated depreciation | (184,128) | | | (175,992) | |
Net property and equipment | Net property and equipment | 125,562 | | | 127,336 | | Net property and equipment | 120,976 | | | 116,084 | |
Construction in progress | Construction in progress | 13,935 | | | 15,489 | | Construction in progress | 11,770 | | | 13,033 | |
Total property and equipment, net | Total property and equipment, net | $ | 139,497 | | | $ | 142,825 | | Total property and equipment, net | $ | 132,746 | | | $ | 129,117 | |
6.Debt
We had 0no debt outstanding as of March 31, 20212022 and December 31, 2020.2021.
On August 21, 2018, Cactus LLC entered into a five-year senior secured asset-based revolving credit facility with a syndicate of lenders and JPMorgan Chase Bank, N.A., as administrative agent for such lenders and as an issuing bank and swingline lender (the “ABL Credit Facility”). The ABL Credit Facility was amended in September 2020 and provides for up to $75.0 million in revolving commitments, up to $15.0 million of which is available for the issuance of letters of credit. The maximum amount that Cactus LLC may borrow under the ABL Credit Facility is subject to a borrowing base, which is based on a percentage of eligible accounts receivable and eligible inventory, subject to reserves and other adjustments. We were in compliance with all covenants under the ABL Credit Facility as of March 31, 2021.2022.
7.Revenue
The majority of our revenues are derived from short-term contracts for fixed consideration.consideration or in the case of rentals, for a fixed charge per day while the equipment is in use by the customer. Product sales generally do not include right of return or other significant post-delivery obligations. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Revenues are recognized when we satisfy a performance obligation by transferring control of the promised goods or providing services to our customers at a point in time, in an amount specified in the contract with our customer and that reflects the consideration to which we expect to be entitled in exchange for those goods or services. The majority of our contracts with customers contain a single performance obligation to provide agreed upon products or services. For contracts with multiple performance obligations, we allocate revenue to each performance obligation based on its relative standalone selling price. We do not assess whether promised goods or services are performance obligations if they are immaterial in the context of the contract with the customer. We do not incur any material costs of obtaining contracts.
We do not adjust the amount of consideration per the contract for the effects of a significant financing component when we expect, at contract inception, that the period between the transfer of a promised good or service to a customer and when the customer pays for that good or service will be one year or less, which is in substantially all cases. Payment terms and conditions vary, although terms generally include a requirement of payment within 30 to 45 days. Revenues are recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. We treat shipping and handling associated with outbound freight as a fulfillment cost instead of as a separate performance obligation. We recognize the cost for the associated shipping and handling when incurred as an expense in cost of sales.
We disaggregate revenue into three categories: product revenues, rental revenues and field service and other revenues. We have predominately domestic operations with a small amount of sales in Australia.Australia and the Kingdom of Saudi Arabia. The following table presents our revenues disaggregated by category:
| | | Three Months Ended March 31, | | Three Months Ended March 31, | |
| | 2021 | | 2020 | | 2022 | | 2021 | |
Product revenue | Product revenue | $ | 51,956 | | | 61 | % | | $ | 87,031 | | | 57 | % | Product revenue | $ | 94,040 | | | 65 | % | | $ | 51,956 | | | 61 | % | |
Rental revenue | Rental revenue | 12,489 | | | 15 | % | | 36,163 | | | 23 | % | Rental revenue | 22,343 | | | 15 | % | | 12,489 | | | 15 | % | |
Field service and other revenue | Field service and other revenue | 19,972 | | | 24 | % | | 30,945 | | | 20 | % | Field service and other revenue | 29,516 | | | 20 | % | | 19,972 | | | 24 | % | |
Total revenue | $ | 84,417 | | | 100 | % | | $ | 154,139 | | | 100 | % | |
Total revenues | | Total revenues | $ | 145,899 | | | 100 | % | | $ | 84,417 | | | 100 | % | |
At March 31, 2021,2022, we had a deferred revenue balance of $0.9$1.2 million compared to the December 31, 20202021 balance of $1.1$1.8 million. Deferred revenue represents our obligation to transfer products to or perform services for a customer for which we have received cash or billed in advance. The revenue that has been deferred will be recognized upon product delivery or as services are performed. As of March 31, 2021,2022, we did not have any contracts with an original length of greater than a year from which revenue is expected to be recognized in the future related to performance obligations that are unsatisfied.
8.Tax Receivable Agreement (TRA)
In connection with our initial public offering (“IPO”) in February 2018, we entered into the TRA which generally provides for payment by Cactus Inc. to the TRA Holders of 85% of the net cash savings, if any, in U.S. federal, state and local income tax and franchise tax that Cactus Inc. actually realizes or is deemed to realize in certain circumstances. Cactus Inc. will retain the benefit of the remaining 15% of these net cash savings.
The TRA liability is calculated by determining the tax basis subject to the TRA (“tax basis”) and applying a blended tax rate to the basis differences and calculating the resulting iterative impact. The blended tax rate consists of the U.S. federal income tax rate and an assumed combined state and local income tax rate driven by the apportionment factors applicable to each state. Subsequent changes to the measurement of the TRA liability are recognized in the statements of income as a component of other income (expense),expense, net. As of March 31, 2021,2022, the total liability from the TRA was $251.1$295.4 million with $9.3$11.8 million reflected in current liabilities based on the expected timing of our next payment. The payments under the TRA will not be conditional on a holder of rights under the TRA having a continued ownership interest in either Cactus LLC or Cactus Inc.
The term of the TRA commenced upon completion of our IPO and will continue until all tax benefits that are subject to the TRA have been utilized or expired, unless we exercise our right to terminate the TRA. If we elect to terminate the TRA early (or it is terminated early due to certain mergers, asset sales, other forms of business combinations or other changes of control), our obligations under the TRA would accelerate and we would be required to make an immediate payment equal to the present value of the anticipated future payments to be made by us under the TRA and such payment is expected to be substantial. The calculation of anticipated future payments will be based upon certain assumptions and deemed events set forth in the TRA, including the assumptions that (i) we have sufficient taxable income to fully utilize the tax benefits covered by the TRA and (ii) any CW Units (other than those held by Cactus Inc.) outstanding on the termination date are deemed to be redeemed on the termination date. Any early termination payment may be made significantly in advance of the actual realization, if any, of the future tax benefits to which the termination payment relates.
We may elect to defer payments due under the TRA if we do not have available cash to satisfy our payment obligations under the TRA. Any such deferred payments under the TRA generally will accrue interest from the due date for such payment until the payment date.
9.Equity
As of March 31, 2021,2022, Cactus Inc. owned 71.8%79.3% of Cactus LLC as compared to 63.3%78.0% as of December 31, 2020.2021. As of March 31, 2021,2022, Cactus Inc. had outstanding 54.360.2 million shares of Class A common stock (representing 71.8%79.3% of the total voting power) and 21.415.7 million shares of Class B common stock (representing 28.2%20.7% of the total voting power).
Redemptions of CW Units
Pursuant to the First Amended and Restated Limited Liability Company Operating Agreement of Cactus Wellhead, LLC (the “Cactus Wellhead LLC Agreement”), holders of CW Units are entitled to redeem their CW Units, which results in additional
Class A common stock outstanding. Since our IPO in February 2018, 39.244.9 million CW Units and a corresponding number of shares of Class B common stock have been redeemed in exchange for shares of Class A common stock.
During the three months ended March 31, 2022, 1 million CW Units, together with a corresponding number of shares of Class B common stock, were redeemed in exchange for Class A common stock in accordance with the Cactus Wellhead LLC Agreement. There was no change in the combined number of Cactus Inc. voting shares outstanding as a result of the redemptions.
On March 9, 2021, Cactus Inc. entered into an underwriting agreement with Cactus LLC, certain selling stockholders of Cactus (the “Selling Stockholders”) and the underwriters named therein, providing for the offer and sale by the Selling Stockholders (the “2021 Secondary Offering”) of up to 6,325,000 shares of Class A common stock including up to 825,000 shares of Class A common stock that may be issued and sold to cover overallotments, if any, at a price to the underwriters of $30.555 per share. On March 12, 2021, in connection with the 2021 Secondary Offering, certain of the Selling Stockholders exercised their right to redeem 6,272,500 CW Units, together with a corresponding number of shares of Class B common stock, as provided in the Cactus Wellhead LLC Agreement. Upon the closing of the 2021 Secondary Offering, Cactus Inc. acquired the redeemed CW Units and a corresponding number of shares of Class B common stock (which shares of Class B common stock were then cancelled) and issued 6,272,500 new shares of Class A common stock to the underwriters at the direction of the redeeming Selling Stockholders, as provided in the Cactus Wellhead LLC Agreement. In addition, certain other Selling Stockholders sold 52,500 shares of Class A common stock in the 2021 Secondary Offering, which shares were owned by them directly as of the time of the 2021 Secondary Offering. Cactus did not receive any of the proceeds from the sale of common stock in the 2021 Secondary Offering and incurred $0.4 million in expenses which were recorded in other expense, net, in the consolidated statementstatements of income. There was no change in the combined number of Cactus Inc. voting shares outstanding as a result of the 2021 Secondary Offering. We recorded an increase in additional paid-in capital with a corresponding decrease in the non-controlling interest in equity of approximately $45.0 million and an increase in the TRA liability of $46.7 million resulting from the redemption of CW Units pursuant to the 2021 Secondary Offering. Additionally, we recognized a $5.1 million tax benefit for a partial valuation allowance release related to the realizable portion of the deferred tax asset resulting from the redemption of CW Units pursuant to the 2021 Secondary Offering. No CW Unit redemptions occurred during the three months ended March 31, 2020.asset.
Dividends
CashAggregate cash dividends of $0.11 and $0.09 per share of Class A common stock were declared during the three months ended March 31, 2022 and 2021 totaling $6.6 million and $4.4 million, respectively. Cash dividends paid during the three months ended March 31, 2022 and 2021 totaled $4.4$6.7 million and $4.5 million, respectively, compared to $4.3 million for the three months ended March 31, 2020.respectively. Dividends accrue on unvested equity-based awards on the date of record and are paid upon vesting. During the three months ended March 31, 2021, $0.2 million of previously accrued dividends was paid to holders of restricted stock units that vested during the period as compared to only a de minimis amount of dividends paid during the three months ended March 31, 2020 upon vesting. Dividends are not paid to our Class B common stockholders; however, a corresponding distribution up to the same amount per share as our Class A common stockholders is paid to the owners of CW Units other than Cactus Inc. for any dividends declared on our Class A common stock. See further discussion of the distributions below under “Member Distributions.”
Member Distributions
Distributions made by Cactus LLC are generally required to be made pro rata among all its members. For the three months ended March 31, 2021,2022, Cactus LLC distributed $4.2$6.3 million to Cactus Inc. to fund its dividend payments and made pro rata distributions to the other members totaling $1.7 million over the same period. During the three months ended March 31, 2020,2021, Cactus LLC distributed $3.7$4.2 million to Cactus Inc. to fund its dividend payments and made pro rata distributions to the other members totaling $2.2$1.7 million.
Limitation of Members’ Liability
Under the terms of the Cactus Wellhead LLC Agreement, the members of Cactus LLC are not obligated for debt, liabilities, contracts or other obligations of Cactus LLC. Profits and losses are allocated to members as defined in the Cactus Wellhead LLC Agreement.
10.Commitments and Contingencies
We are involved in various disputes arising in the ordinary course of business. Management does not believe the outcome of these disputes will have a material adverse effect on our consolidated financial position or consolidated results of operations.
11.Earnings per Share
Basic earnings per share of Class A common stock is calculated by dividing the net income attributable to Cactus Inc. during the period by the weighted average number of shares of Class A common stock outstanding during the same period. Diluted earnings per share of Class A common stock is calculated by dividing the net income attributable to Cactus Inc. during that period by the weighted average number of common shares outstanding assuming all potentially dilutive shares were issued.
We use the if-converted method to determine the potential dilutive effect of outstanding CW Units (and corresponding shares of outstanding Class B common stock), the treasury stock method to determine the potential dilutive effect of unvested restricted stock units assuming that the proceeds will be used to purchase shares of Class A common stock and the contingently issuable share method to determine the potential dilutive effect of unvested performance sharestock units.
The following table summarizes the basic and diluted earnings per share calculations:
| | | Three Months Ended March 31, | | Three Months Ended March 31, | |
| | 2021 | | 2020 | | 2022 | | 2021 | |
Numerator: | Numerator: | | | | Numerator: | | | | |
Net income attributable to Cactus Inc.—basic | Net income attributable to Cactus Inc.—basic | $ | 11,559 | | | $ | 18,983 | | Net income attributable to Cactus Inc.—basic | $ | 20,616 | | | $ | 11,559 | | |
Net income attributable to non-controlling interest (1) | Net income attributable to non-controlling interest (1) | 2,874 | | | 11,166 | | Net income attributable to non-controlling interest (1) | 4,953 | | | 2,874 | | |
Net income attributable to Cactus Inc.—diluted (1) | Net income attributable to Cactus Inc.—diluted (1) | $ | 14,433 | | | $ | 30,149 | | Net income attributable to Cactus Inc.—diluted (1) | $ | 25,569 | | | $ | 14,433 | | |
Denominator: | Denominator: | | | | Denominator: | | | | |
Weighted average Class A shares outstanding—basic | Weighted average Class A shares outstanding—basic | 49,166 | | | 47,270 | | Weighted average Class A shares outstanding—basic | 59,288 | | | 49,166 | | |
Effect of dilutive shares (2) | Effect of dilutive shares (2) | 26,608 | | | 28,125 | | Effect of dilutive shares (2) | 16,874 | | | 26,608 | | |
Weighted average Class A shares outstanding—diluted (2) | Weighted average Class A shares outstanding—diluted (2) | 75,774 | | | 75,395 | | Weighted average Class A shares outstanding—diluted (2) | 76,162 | | | 75,774 | | |
| Earnings per Class A share—basic | Earnings per Class A share—basic | $ | 0.24 | | | $ | 0.40 | | Earnings per Class A share—basic | $ | 0.35 | | | $ | 0.24 | | |
Earnings per Class A share—diluted (1) (2) | $ | 0.19 | | | $ | 0.40 | | |
Earnings per Class A share—diluted (1) | | Earnings per Class A share—diluted (1) | $ | 0.34 | | | $ | 0.19 | | |
(1)The numerator is adjusted in the calculation of diluted earnings per share under the if-converted method to include net income attributable to the non-controlling interest calculated as its pre-tax income adjusted for a corporate effective tax rate of 25%26.0% for the three months ended March 31, 20212022 and 26%25.0% for the three months ended March 31, 2020.
(2)Diluted earnings per share for the three months ended March 31, 2021 includes 26.3 million of weighted average shares of Class B common stock outstanding assuming conversion and the dilutive effect of restricted stock unit and performance share unit awards. Diluted earnings per share for the three months ended March 31, 2020 includes 28.0 million weighted average shares of Class B common stock outstanding assuming conversion and the dilutive effect of restricted stock unit awards.2021.
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Except as otherwise indicated or required by the context, all references in this Quarterly Report to the “Company,” “Cactus,” “we,” “us” and “our” refer to Cactus, Inc. (“Cactus Inc.”) and its consolidated subsidiaries, unless we state otherwise or the context otherwise requires. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and related notes. The following discussion contains “forward-looking statements” that reflect our plans, estimates, beliefs and expected performance. Our actual results may differ materially from those anticipated as discussed in these forward-looking statements as a result of a variety of risks and uncertainties, including those described above in “Cautionary Note Regarding Forward-Looking Statements” and included elsewhere in this Quarterly Report, all of which are difficult to predict. In light of these risks, uncertainties and assumptions, the forward-looking events discussed may not occur. We assume no obligation to update any of these forward-looking statements except as otherwise required by law.
Executive Summary
We design, manufacture, sell and rent a range of highly engineered wellhead and pressure control equipment. Our products are sold and rented principally for onshore unconventional oil and gas wells and are utilized during the drilling, completion and production phases of our customers’ wells. In addition, we provide field services for all of our products and rental items to assist with the installation, maintenance and handling of the wellhead and pressure control equipment.
We operate through service centers in the United States, which are strategically located in the key oil and gas producing regions, including the Permian, Marcellus, Utica, Haynesville, Eagle Ford, Bakken and SCOOP/STACK, among other active oil and gas regions in the United States, and in Eastern Australia. These service centers support our field services and provide equipment assembly and repair services. We also provide rental and service operations in the Kingdom of Saudi Arabia. Our manufacturing and production facilities are located in Bossier City, Louisiana and Suzhou, China.
We operate in one business segment. Our revenues are derived from three sources: products, rentals, and field service and other. Product revenues are primarily derived from the sale of wellhead systems and production trees. Rental revenues are primarily derived from the rental and associated repair of equipment used for well control during the completion process, as well asthe repair of such equipment and the rental of tools used during drilling tools.operations. Field service and other revenues are primarily earned when we provide installation and other field services for both product sales and equipment rental. Additionally, other revenues are derived from providing repair and reconditioning services to customers that have previously installed wellheads or production trees on their wellsite.trees. Items sold or rented generally have an associated service component. As a result, there is a close correlation between field service and other revenues and revenues from product sales and rentals.
During the three months ended March 31, 2022, we derived 65% of total revenues from the sale of our products, 15% of total revenues from rental and 20% of total revenues from field service and other. During the three months ended March 31, 2021, we derived 61% of total revenues from the sale of our products, 15% of total revenues from rental and 24% of total revenues from field service and other. During the three months ended March 31, 2020, we derived 57% of total revenues from the sale of our products, 23% of total revenues from rental and 20% of total revenues from field service and other. We have predominantly domestic operations with a small amount of salesactivity in Australia.Australia and the Kingdom of Saudi Arabia.
Market Factors
Demand for our products and services depends primarily upon the general level of activity in the oil and gas industry, including the number of active drilling rigs, in operation, the number of oil and gas wells being drilled, the depth and drilling conditionsworking pressure of these wells, the number of well completions, the level of well remediation activity, the volume of production and the corresponding capital spending by oil and natural gas companies. Oil and gas activity is in turn heavily influenced by, among other factors, investor sentiment, availability of capital and oil and gas prices locally and worldwide, which have historically been volatile.
The key market factors impacting our product sales are the number of wells drilled and placed on production, as each well requires an individual wellhead assembly and, at some time after completion, the installation of an associated production tree. We measure our product sales activity levels against our competitors by the number of rigs that we are supporting on a monthly basis as it is correlated to wells drilled. Each active drilling rig produces different levels of revenue based on the customer’s drilling plan,program and efficiencies, which includes factors such as the number of wells drilled per pad, the timing of rig moves, the time taken to drill each well, the number and size of casing strings, the working pressure, material selection, and the complexity of the wellhead system chosen by the customer and the rate at which production trees are eventually deployed. All of these factors may be influenced by the oil and gas region in which the customer isour customers are operating. While these factors may lead to differing revenues per rig, we have historicallygenerally been able to broadly forecast our product needs and anticipated revenue levels based on generalhistoric trends in a given region and with a specific customer. Increases in horizontal wells drilled as a percentage of total wells drilled, the shift towards pad drilling, and an increase in the
given region and with a specific customer. An increase in the number of wells drilled per rig are allis a favorable trendstrend that we believe enhanceenhances the demand for our products relative to the active rig count. However, such a favorable trend might be adversely affected by overall supply chain-related disruptions.
Our rental revenues are primarily dependent on the number of wells completed (i.e., hydraulically fractured), the number of wells on a well pad, the number of fracture stages per well and the number of fracture stages completed per well.day. Well completion activity generally follows the level of drilling activity over time but can be delayed or accelerated due to such factors as pressure pumping availability, takeaway capacity, storage capacity, spot prices, overall service cost inflation and budget constraints.considerations.
Field service and other revenues are closely correlated to revenues from product sales and rentals, as items sold or rented almost always have an associated service component. Therefore, the market factors and trends of product sales and rental revenues similarly impact the associated levels of field service and other revenues generated.
Recent Developments and Trends
Oil prices rose in early 2022 due to concerns over supply constraints with West Texas Intermediate (“WTI”) prices surpassing $90 per barrel in February. Since Russia invaded Ukraine on February 24, 2022, oil prices have increased further and price volatility is high, with WTI prices reaching almost $115 per barrel in March and dropping to approximately $94 per barrel in April, only to reach $108 per barrel in early May. The volatility can mainly be attributed to the global response to the conflict in Ukraine. In the U.S., President Joe Biden announced on March 8, 2022 that the U.S. was banning imports of oil from Russia, along with refined petroleum products, natural gas and coal. Then, in an attempt to ease higher gasoline prices, the Biden administration announced on March 31, 2022 that it would release 180 million barrels of oil from the Strategic Petroleum Reserve (“SPR”) over six months. The announcement of the SPR release sent oil prices lower for several days in early April until April 18, 2022 when Libya’s National Oil Corp announced a wave of closures had begun hitting its facilities forcing it to shut down production at its largest oilfield (El Sharara). Although this announcement was unrelated to the conflict in Ukraine, it further increased concerns surrounding supply. Additionally, there are reports that the European Union (EU) may enact a phased import ban on Russian oil. However, potential reduced consumption from sustained COVID-related lockdowns in China and looming concerns regarding a possible recession have weighed on the outlook for oil demand.
Prices for natural gas have also surged in 2022. Higher demand for heating due to a colder winter and record-high U.S. liquefied natural gas (“LNG”) exports at the end of winter left natural gas in storage at its lowest level in three years. Henry Hub natural gas spot prices increased from an average of $3.76 per one million British Thermal Units (“MMBtu”) in December 2021 to $6.60 per MMBtu in April 2022. In early May 2022, spot prices were over $8 per MMBtu and front-month futures at Henry Hub surged to the highest level in over 10 years due to below normal temperatures and strong LNG exports, resulting in lower than usual natural gas inventory in storage. The U.S. is exporting record volumes of LNG to Europe which is contributing to rising Henry Hub prices. This trend is expected to continue with the desire to reduce European energy dependency on Russian natural gas exports and Russia’s recent announcement to cease gas shipments to Poland and Bulgaria.
The ongoing conflict in Ukraine has had repercussions globally and in the U.S. by continuing to cause uncertainty, not only in the oil and natural gas markets, but also in the stock market. Such uncertainty could continue to result in stock price volatility and supply chain disruptions as well as higher oil and natural gas prices which could result in higher inflation worldwide and negatively impact demand for our goods and services. Moreover, further actions by the U.S. Federal Reserve to combat inflation could increase the possibility of a recession.
The significant increase in commodity prices since late 2020 has also led to meaningful increases in the level of U.S. onshore drilling activity, particularly among private operators. During the three months ended March 31, 2021,2022, the weekly average U.S. onshore rig count as reported by Baker Hughes was
377 616 rigs compared to 295543 rigs for the three months ended December 31, 20202021 and 763377 rigs for the three months ended March 31, 2020. The increase2021. Although these gains are encouraging, current rig activity is still significantly reduced from the levels in commodity prices beginning late in 2020 and into 2021 has led to meaningful increases in2019 when the levelweekly average rig count for the three months ended March 31, 2019 was 1,021. However, improved rig efficiencies have partially offset the impact of U.S. onshore drilling activity since bottoming in August of 2020 at 230 rigs.this reduction. As of April 30, 2021,29, 2022, the U.S. onshore rig count was 426.684.
The ongoing COVID-19 pandemic negatively impacted our business and revenues beginning in March 2020 and has continued toPrivate E&P companies have an adverse impact. The inability to controlbeen responsible for the spreadmajority of the virus, the emergence of variants and another resurgence of casesrig additions in the U.S. and worldwide has prolonged travel restrictions, school closures, reduced businesses operations and stay-at-home orders. As vaccines have begun to be administered allonshore market over the world, oil priceslast year. We have shown significant improvement, trading above $60 per barrelsignificantly increased our revenues and rigs followed since the low in April 2021. Even with these recent increases in commodity prices, our customers’ activity continues to be significantly lower than 2019 and early 2020 levels, resulting in reduced demand for our products and services. However, we are cautiously optimistic regarding signs of recovery and have seen growth and improvement in our business and revenues in the firstthird quarter of 2021.
In response to the drop2020 despite a greater portion of Cactus’ revenues having historically resulted from publicly traded E&P companies. During this time, Cactus has meaningfully increased its business with private E&P companies. Disproportionate changes in demand and customer activity in 2020, we had implemented certain workforce, wage and capital expenditure reductions throughout last year. Given the significant service component of our business, we adjusted our headcount to reflect activity levels and by mid-year 2020, we had reduced our global workforce by almost half. As demand and activity started showing signs of recovery in late 2020, we began rehiring our associates and have added over 100 associates during the first three months of 2021 with plans to continue adding more as demand dictates. In January 2021, we reinstated approximately 50% of the wage and salary reductions that were implemented in 2020 with the remainder reinstated effective April 2021. As we add field service and other branch personnel, we have been adding fleet vehicles accordingly. We continue to actively review all opportunities to manage costs and efficiently deploy capital relative to market conditions. Our required capital expenditures have historically tended to be lower than most other oilfield service providers due to the asset-lite nature of our business model.
Over the past year, there has been an increase in large-scale merger and acquisition activity among exploration and production (“E&P”) companies that operate in the United States. These transactions may be driven in part by an effort to reduce the cost of hydrocarbon production per barrel equivalent and increase overall company efficiencies. These transactions generally increase the size and scale of the counterparties involved, which may provide better access to capital and lead to a healthier overall industry. We have historically focused on providing our products and services to large and well capitalized customers. Consolidation offrom private or publicly traded E&P companies presentspresent both risks and opportunities for Cactus, depending on a number of factors, primarily whether the companies involved are existing customers.
Increased Raw Material and Freight Costs
Our ability to source low cost raw materials and components, such as steel plate, tubewhich customers add or drop rigs and bar stock, forgings and machined components is critical to our ability to successfully compete. Due to a shortage of steel caused primarily by production disruptions during the pandemic, steel prices have recently escalated. Additionally, freight costs, specifically ocean freight costs, have risen due to a number of factors including, but not limited to, a shortage of shipping containers, congested seaports, capacity constraints on vessels and lockdownstheir relative efficiency in certain markets. We believe many of these cost increases are temporary and as supply catches up with the pent-up demand created by the pandemic and the resulting economic slowdown in 2020, prices should normalize. However, we cannot be certain if this will occur before the end of the year or at all, nor can we be confident that prices will return to their historic lows. As such, our results of operations may be adversely affected by these rising costs to the extent we are unable to recoup them from our customers.drilling wells.
Increased Costs
While our revenues have benefited from increased demand for our products and services and activity levels primarily due to higher commodity prices, we continue to experience substantial inflation throughout all aspects of our business. Supply chain disruptions, geopolitical issues and significantly increased demand for goods and services worldwide have resulted in substantial increases in fuel, raw materials, component parts, ocean freight charges as well as increased labor costs. Salaries and wages have increased significantly as a result of competitive labor markets, especially in certain key oil and gas producing areas, but also due to broader inflation trends and labor shortages. Due to heightened demand and a shortage of steel caused primarily by production disruptions during the pandemic and more recently due to the conflict in Ukraine, steel and assembled component prices have been and remain elevated. Freight costs, specifically ocean freight costs, remain elevated due to a number of factors including, but not limited to, a scarcity of shipping containers, congested seaports, a shortage of commercial drivers, capacity constraints on vessels and lockdowns in certain markets. In addition to dealing with these unprecedented cost increases, we continue to be impacted by global supply chain issues which have resulted in shipping delays and, in some cases, resulted in increased costs when we are required to use other more expensive modes of transportation or substitute more costly products in order to meet customer demand. Although we believe certain cost increases are temporary, we do not believe that commodity and freight prices will normalize this year. Additionally, we cannot be confident that input prices will return to the lower levels experienced in prior years. These cost increases have already had, and could continue to have, a negative impact on our margins and results of operations absent further successful cost recovery efforts.
Critical Accounting Policies and Estimates
A discussion of our critical accounting policies and estimates is contained in our 20202021 Annual Report on Form 10-K. There have not been any changes in our critical accounting policies since December 31, 2020.2021.
Consolidated Results of Operations
The following discussions relating to significant line items from our condensed consolidated statements of income are based on available information and represent our analysis of significant changes or events that impact the comparability of reported amounts. Where appropriate, we have identified specific events and changes that affect comparability or trends and, where reasonably practicable, have quantified the impact of such items.
Three Months Ended March 31, 20212022 Compared to Three Months Ended December 31, 20202021
The following table presents summary consolidated operating results for the periods indicated:
| | | Three Months Ended | | | Three Months Ended | |
| | March 31, 2021 | | December 31, 2020 | | $ Change | | % Change | | March 31, 2022 | | December 31, 2021 | | $ Change | | % Change |
| | (in thousands) | | | | (in thousands) | | |
Revenues | Revenues | | Revenues | |
Product revenue | Product revenue | $ | 51,956 | | | $ | 43,020 | | | $ | 8,936 | | | 20.8 | % | Product revenue | $ | 94,040 | | | $ | 83,771 | | | $ | 10,269 | | | 12.3 | % |
Rental revenue | Rental revenue | 12,489 | | | 8,590 | | | 3,899 | | | 45.4 | | Rental revenue | 22,343 | | | 19,225 | | | 3,118 | | | 16.2 | |
Field service and other revenue | Field service and other revenue | 19,972 | | | 16,480 | | | 3,492 | | | 21.2 | | Field service and other revenue | 29,516 | | | 26,920 | | | 2,596 | | | 9.6 | |
Total revenues | Total revenues | 84,417 | | | 68,090 | | | 16,327 | | | 24.0 | | Total revenues | 145,899 | | | 129,916 | | | 15,983 | | | 12.3 | |
Costs and expenses | Costs and expenses | | | | | | | Costs and expenses | | | | | | |
Cost of product revenue | Cost of product revenue | 36,521 | | | 29,752 | | | 6,769 | | | 22.8 | | Cost of product revenue | 60,920 | | | 54,754 | | | 6,166 | | | 11.3 | |
Cost of rental revenue | Cost of rental revenue | 12,171 | | | 9,416 | | | 2,755 | | | 29.3 | | Cost of rental revenue | 15,089 | | | 14,553 | | | 536 | | | 3.7 | |
Cost of field service and other revenue | Cost of field service and other revenue | 14,463 | | | 11,523 | | | 2,940 | | | 25.5 | | Cost of field service and other revenue | 24,806 | | | 22,036 | | | 2,770 | | | 12.6 | |
Selling, general and administrative expenses | Selling, general and administrative expenses | 9,627 | | | 8,976 | | | 651 | | | 7.3 | | Selling, general and administrative expenses | 14,094 | | | 12,861 | | | 1,233 | | | 9.6 | |
| Total costs and expenses | Total costs and expenses | 72,782 | | | 59,667 | | | 13,115 | | | 22.0 | | Total costs and expenses | 114,909 | | | 104,204 | | | 10,705 | | | 10.3 | |
Income from operations | Income from operations | 11,635 | | | 8,423 | | | 3,212 | | | 38.1 | | Income from operations | 30,990 | | | 25,712 | | | 5,278 | | | 20.5 | |
| Interest expense, net | Interest expense, net | (152) | | | (150) | | | (2) | | | 1.3 | | Interest expense, net | (100) | | | (142) | | | 42 | | | (29.6) | |
Other expense, net | (406) | | | — | | | (406) | | | nm | |
Other income (expense), net | | Other income (expense), net | (1,115) | | | 1,902 | | | (3,017) | | | nm |
Income before income taxes | Income before income taxes | 11,077 | | | 8,273 | | | 2,804 | | | 33.9 | | Income before income taxes | 29,775 | | | 27,472 | | | 2,303 | | | 8.4 | |
Income tax expense (benefit) | (4,059) | | | 2,137 | | | (6,196) | | | nm | |
Income tax expense | | Income tax expense | 2,692 | | | 7,089 | | | (4,397) | | | (62.0) | |
Net income | Net income | $ | 15,136 | | | $ | 6,136 | | | $ | 9,000 | | | nm | Net income | 27,083 | | | 20,383 | | | 6,700 | | | 32.9 | |
Less: net income attributable to non-controlling interest | Less: net income attributable to non-controlling interest | 3,577 | | | 2,934 | | | 643 | | | 21.9 | % | Less: net income attributable to non-controlling interest | 6,467 | | | 5,359 | | | 1,108 | | | 20.7 | |
Net income attributable to Cactus Inc. | Net income attributable to Cactus Inc. | $ | 11,559 | | | $ | 3,202 | | | $ | 8,357 | | | nm | Net income attributable to Cactus Inc. | $ | 20,616 | | | $ | 15,024 | | | $ | 5,592 | | | 37.2 | % |
nm = not meaningful | nm = not meaningful | | | | | | | nm = not meaningful | | | | | | |
Revenues
Product revenue for the three months ended March 31, 2021first quarter of 2022 was $52.0$94.0 million, an increase of $8.9$10.3 million, or 21%12%, from $43.0$83.8 million for the three months ended December 31, 2020. The increase wasfourth quarter of 2021 primarily relateddue to increased sales of wellhead and production related equipment resulting from higher drilling and completion activity by our customers in response to increasing oil prices.as well as the impact of cost recovery efforts.
Rental revenue for the three months ended March 31, 2021first quarter of 2022 was $12.5$22.3 million, an increase of $3.9$3.1 million, or 45%16%, from $8.6$19.2 million for the three months ended December 31, 2020.fourth quarter of 2021. The increase was primarily attributable to greaterhigher customer completion activityactivity.
Field service and other revenue for the first quarter of 2022 was $29.5 million, an increase of $2.6 million, or 10%, from $26.9 million for the fourth quarter of 2021. The increase was mainly due to increased customer activity, resulting in their usehigher billable hours.
Costs and expenses
Cost of our innovative technologies.product revenue for the first quarter of 2022 was $60.9 million, an increase of $6.2 million, or 11%, from $54.8 million for the fourth quarter of 2021. The increase was primarily attributable to the increase in product sales as well as increased costs associated with materials, freight and overhead.
Field service and other revenue for the three months ended March 31, 2021 was $20.0 million, an increase of $3.5 million, or 21%, from $16.5 million for the three months ended December 31, 2020. The increase was mainly due to increased billable hours and ancillary services as a result of the rise in overall customer activity during the quarter despite adverse weather conditions experienced in February 2021.
Costs and expenses
Cost of product revenue for the three months ended March 31, 2021 was $36.5 million, an increase of $6.8 million, or 23%, from $29.8 million for the three months ended December 31, 2020. The increase was primarily attributable to the increase in product sales but also due to increased costs associated with tariffs, materials, freight and wages.
Cost of rental revenue for the three months ended March 31, 2021 was $12.2first quarter of 2022 of $15.1 million an increase of $2.8increased $0.5 million, or 29%4%, from $9.4$14.6 million for the three months ended December 31, 2020. Thefourth quarter of 2021 mainly due to an increase was mainly the result of higherin repair and equipment reactivation costs as well as higher branch expenses resulting from significant growthpartially offset by a decrease in our rental activities.ancillary costs and depreciation.
Cost of field service and other revenue for the three months ended March 31, 2021first quarter of 2022 was $14.5$24.8 million, an increase of $2.9$2.8 million, or 26%13%, from $11.5$22.0 million for the three months ended December 31, 2020.fourth quarter of 2021. The increase was primarily related to increased personnel costs associated with higher wages and an increase in the additionnumber of field and branch personnel aspersonnel. Additional increases were related to higher fuel, third-party service costs and other costs associated with higher field service activity recovers as well as a partial reinstatement of the 2020 wage reductions.levels.
Selling, general and administrative expenses for the three months ended March 31, 2021first quarter of 2022 were $9.6$14.1 million, an increase of $0.7$1.2 million, or 7%10%, from $9.0$12.9 million for the three months ended December 31, 2020.fourth quarter of 2021. The increase was primarily due to higherincreased personnel costs primarily related toassociated with higher salaries payroll taxes and accrual for annual incentive bonuses based on current year targets. The first quarter of 2021 included a partial rollback of the 2020 wagewages, benefits and salary reductionsstock-based compensation expense as well as increased professional fees. These increases were slightly offset by lower bad debt expense and a modest increasereduction in personnel.annual incentive bonus accruals due to the fourth quarter including a true-up in expense based on actual 2021 performance.
Other expense,income (expense), net. Other expense, for the three months ended March 31, 2021 of $0.4 million related to professional fees and other expenses associated with the 2021 Secondary Offering. There were no such expenses in the fourth quarter of 2020.
Income tax expense (benefit). Income tax benefit for the three months ended March 31, 2021 was $4.1 million compared to income tax expense of $2.1 million for the three months ended December 31, 2020. The income tax benefitnet for the first quarter of 2022 of $1.1 million and other income, net of $1.9 million for the fourth quarter of 2021 represented non-cash adjustments for the revaluation of the liability related to the tax receivable agreement as a result of changes to the state tax rate.
Income tax expense. Income tax expense for the first quarter of 2022 was $2.7 million compared to $7.1 million for the fourth quarter of 2021. Income tax expense for the first quarter of 2022 included a $5.1approximately $6.2 million benefitexpense associated with current income offset by a partial valuation allowance release and a $1.1$1.7 million benefit associated with permanent differences related to equity compensation. The partial valuation allowance release was recorded in conjunctioncompensation, a $1.0 million benefit associated with the redemption of CW Units as part of the 2021 Secondary Offering, allowing a portionrevaluation of our deferred tax asset as a result of a change in our forecasted state tax rate and a $0.8 million tax benefit associated with the partial valuation allowance release in conjunction with first quarter 2022 redemptions of CW Units. Partial valuation releases occur in conjunction with redemptions of CW Units as a portion of Cactus Inc.’s deferred tax assets from ourits investment in Cactus LLC becomes realizable. Income tax expense for the fourth quarter of 2021 primarily included approximately $6.0 million expense associated with current income and a $1.3 million tax expense related to become realizable.the revaluation of our deferred tax asset as a result of a change in our forecasted state tax rate.
Cactus Inc. is only subject to federal and state income tax on its share of income from Cactus LLC. Income allocated to the non-controlling interest is not subject to U.S. federal or state tax.
Three Months Ended March 31, 20212022 Compared to Three Months Ended March 31, 20202021
The following table presents summary consolidated operating results for the periods indicated:
| | | Three Months Ended March 31, | | | Three Months Ended March 31, | |
| | 2021 | | 2020 | | $ Change | | % Change | | 2022 | | 2021 | | $ Change | | % Change |
| | (in thousands) | | | | (in thousands) | | |
Revenues | Revenues | | Revenues | |
Product revenue | Product revenue | $ | 51,956 | | | $ | 87,031 | | | $ | (35,075) | | | (40.3) | % | Product revenue | $ | 94,040 | | | $ | 51,956 | | | $ | 42,084 | | | 81.0 | % |
Rental revenue | Rental revenue | 12,489 | | | 36,163 | | | (23,674) | | | (65.5) | | Rental revenue | 22,343 | | | 12,489 | | | 9,854 | | | 78.9 | |
Field service and other revenue | Field service and other revenue | 19,972 | | | 30,945 | | | (10,973) | | | (35.5) | | Field service and other revenue | 29,516 | | | 19,972 | | | 9,544 | | | 47.8 | |
Total revenues | Total revenues | 84,417 | | | 154,139 | | | (69,722) | | | (45.2) | | Total revenues | 145,899 | | | 84,417 | | | 61,482 | | | 72.8 | |
Costs and expenses | Costs and expenses | | | | | | | Costs and expenses | | | | | | |
Cost of product revenue | Cost of product revenue | 36,521 | | | 56,135 | | | (19,614) | | | (34.9) | | Cost of product revenue | 60,920 | | | 36,521 | | | 24,399 | | | 66.8 | |
Cost of rental revenue | Cost of rental revenue | 12,171 | | | 19,339 | | | (7,168) | | | (37.1) | | Cost of rental revenue | 15,089 | | | 12,171 | | | 2,918 | | | 24.0 | |
Cost of field service and other revenue | Cost of field service and other revenue | 14,463 | | | 23,811 | | | (9,348) | | | (39.3) | | Cost of field service and other revenue | 24,806 | | | 14,463 | | | 10,343 | | | 71.5 | |
Selling, general and administrative expenses | Selling, general and administrative expenses | 9,627 | | | 13,662 | | | (4,035) | | | (29.5) | | Selling, general and administrative expenses | 14,094 | | | 9,627 | | | 4,467 | | | 46.4 | |
Severance expenses | — | | | 1,007 | | | (1,007) | | | nm | |
Total costs and expenses | Total costs and expenses | 72,782 | | | 113,954 | | | (41,172) | | | (36.1) | | Total costs and expenses | 114,909 | | | 72,782 | | | 42,127 | | | 57.9 | |
Income from operations | Income from operations | 11,635 | | | 40,185 | | | (28,550) | | | (71.0) | | Income from operations | 30,990 | | | 11,635 | | | 19,355 | | | nm |
| Interest income (expense), net | (152) | | | 410 | | | (562) | | | nm | |
Interest expense, net | | Interest expense, net | (100) | | | (152) | | | 52 | | | (34.2) | |
Other expense, net | Other expense, net | (406) | | | — | | | (406) | | | nm | Other expense, net | (1,115) | | | (406) | | | (709) | | | nm |
Income before income taxes | Income before income taxes | 11,077 | | | 40,595 | | | (29,518) | | | (72.7) | | Income before income taxes | 29,775 | | | 11,077 | | | 18,698 | | | nm |
Income tax expense | (4,059) | | | 7,497 | | | (11,556) | | | nm | |
Income tax expense (benefit) | | Income tax expense (benefit) | 2,692 | | | (4,059) | | | 6,751 | | | nm |
Net income | Net income | $ | 15,136 | | | $ | 33,098 | | | $ | (17,962) | | | (54.3) | | Net income | 27,083 | | | 15,136 | | | 11,947 | | | 78.9 | |
Less: net income attributable to non-controlling interest | Less: net income attributable to non-controlling interest | 3,577 | | | 14,115 | | | (10,538) | | | (74.7) | | Less: net income attributable to non-controlling interest | 6,467 | | | 3,577 | | | 2,890 | | | 80.8 | |
Net income attributable to Cactus Inc. | Net income attributable to Cactus Inc. | $ | 11,559 | | | $ | 18,983 | | | $ | (7,424) | | | (39.1) | % | Net income attributable to Cactus Inc. | $ | 20,616 | | | $ | 11,559 | | | $ | 9,057 | | | 78.4 | % |
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Revenues
Product revenue was $94.0 million in the first quarter of 2022 compared to $52.0 million in the first quarter 2021. The increase of 2021 compared to $87.0 million in the first quarter of 2020. The decrease of $35.1$42.1 million, representing a 40% reductionan 81% increase from the prior year,2021, was the result of lowerprimarily due to higher sales of wellhead and production related equipment resulting from lowerhigher drilling and completion activity in 2021 by our customers. Our first quarter 2020 results were only partially impacted bycustomers as well as the industry downturn resulting from depressed commodity prices exacerbated by the COVID-19 pandemic.impact of cost recovery efforts.
Rental revenue of $22.3 million in the first quarter of 2022 increased $9.9 million, or 79%, from $12.5 million in the first quarter of 2021 decreased $23.7 million, or 65%, from $36.2 million in the first quarter of 2020.2021. The decreaseincrease was primarily dueattributable to reduced drillinghigher customer completion rental and completion activity by our customers resulting from depressed energy demand.repair activity.
Field service and other revenue in the first quarter of 2022 was $29.5 million, an increase of $9.5 million, or 48%, from $20.0 million in the first quarter of 2021, a decrease of $11.0 million, or 35%, from $30.9 million in the first quarter of 2020.2021. The decreaseincrease was attributable to lowerincreased customer activity, compared to the prior year, resulting in lowerhigher billable hours and ancillary services.
Costs and expenses
Cost of product revenue forin the first quarter of 20212022 was $60.9 million, an increase of $24.4 million, or 67%, from $36.5 million a decrease of $19.6 million, or 35%, from $56.1 million forin the first quarter of 2020.2021. The decreaseincrease was largely attributable to the reductionan increase in product sales.sales and costs associated with materials, freight and overhead.
Cost of rental revenue of $15.1 million in the first quarter of 2022 increased $2.9 million from $12.2 million in the first quarter of 2021. The increase was primarily due to higher repair and equipment reactivation costs, increased ancillary costs and higher branch expenses, partially offset by lower depreciation expense on our rental fleet.
Cost of rental revenue of $12.2 million for the first quarter of 2021 decreased $7.2 million, or 37%, from $19.3 million for the first quarter of 2020. The decrease was primarily attributable to lower repair costs, decreased scrap and rework expense and lower depreciation expenses on our rental fleet as well as other savings resulting from lower activity.
Cost of field service and other revenue was $14.5$24.8 million forin the first quarter of 2021, a decrease2022, an increase of $9.3$10.3 million, or 39%72%, from $23.8$14.5 million forin the first quarter of 2020.2021. The decreaseincrease was mainly related to lower payrollhigher personnel costs associated with fewerhigher wages and an increase in the number of field and branch personnel compared to 2020 as well as lower depreciation,higher fuel and repairother remobilization expenses on a reduced fleet of vehicles.associated with increased field service activity levels compared to the prior year.
Selling, general and administrative expenses forin the first quarter of 20212022 were $9.6$14.1 million compared to $13.7$9.6 million forin the first quarter of 2020.2021. The $4.0$4.5 million decreaseincrease was largely attributable to lowerincreased personnel costs primarily related to headcounthigher salaries and wagewages, benefits and salary reductions effective after the first quarter of 2020 as well as a reduction in foreign currency lossesaccruals for annual incentive bonuses. Additional increases related to higher stock-based compensation expense and credit loss reserves.
Severance expenses in the first quarter of 2020 of $1.0 million were due to severance benefits associated with headcount reductions announced during the quarter.
Interest income (expense), net. Interest expense, net for the first quarter of 2021 was $0.2 million compared to interest income, net of $0.4 million for the first quarter of 2020. The increase in expense from 2020 was primarily due to lower interest income on cash invested as a result of lower interest rates in 2021.professional fees.
Other expense, net. Other expense, net in the first quarter of 2022 of $1.1 million related to a non-cash adjustment for the revaluation of the liability related to the tax receivable agreement. Other expense, net in the first quarter of 2021 of $0.4 million related torepresented professional fees and other expenses associated with the 2021 Secondary Offering. There were no such expenses in the first quarter of 2020.
Income tax expense (benefit). Income tax expense in the first quarter of 2022 was $2.7 million compared to an income tax benefit of $4.1 million in the first quarter of 2021. Income tax expense for the first quarter of 2021 was $4.12022 included approximately $6.2 million comparedexpense associated with current income offset by a $1.7 million benefit associated with permanent differences related to incomeequity compensation, a $1.0 million benefit associated with the revaluation of our deferred tax expenseasset as a result of $7.5a change in our forecasted state tax rate and a $0.8 million fortax benefit associated with the partial valuation allowance release in conjunction with first quarter 2022 redemptions of 2020.CW Units. The income tax benefit for the first quarter of 2021 primarily included a $5.1 million benefit associated with a partial valuation allowance release and a $1.1 million benefit associated with permanent differences related to equity compensation. The partial valuation allowance release was recorded in conjunction with the redemption of CW Units as part of the 2021 Secondary Offering, allowing a portion of our deferred tax asset from our investment in Cactus LLC to become realizable.
Liquidity and Capital Resources
At March 31, 2021,2022, we had $292.0$297.7 million of cash and cash equivalents. Our primary sources of liquidity and capital resources are cash on hand, cash flows generated by operating activities and, if necessary, borrowings under our ABL Credit Facility. Depending upon market conditions and other factors, we may also have the ability to issue additional equity and debt if needed. As of March 31, 2021,2022, we had no borrowings outstanding under our ABL Credit Facility and $63.7$75.0 million of available borrowing capacity. Additionally, we were in compliance with the covenants of the ABL Credit Facility as of March 31, 2021.2022.
We believe that our existing cash on hand, cash generated from operations and available borrowings under our ABL Credit Facility will be sufficient for at least the next 12 months to meet working capital requirements, anticipated capital expenditures, expected payments related to the TRA, anticipated tax liabilities and dividends to holders of our Class A common stock as well as pro rata cash distributions to the holders of CW Units other than Cactus Inc.
For the three months ended March 31, 2021,2022, net capital expenditures totaled $2.0$7.3 million, which were primarily related to additions to the Company’s fleet of rental fleet investments, particularly upgrades associated withequipment, including drilling-related tools, and additional investment in and expansion of our innovative technologies.Bossier City location. We currently estimate our net capital expenditures for the year ending December 31, 20212022 will range from $10$20 million to $15$30 million. We continuously evaluate our capital expenditures and the amount we ultimately spend will depend on a number of factors, including, among other things, demand for rental assets, available capacity in existing locations, prevailing economic conditions, market conditions in the E&P industry, customers’ forecasts, volatility and company initiatives.
Our ability to satisfy our long-term liquidity requirements, including cash distributions to CW Unit Holders to fund their respective income tax liabilities relating to their share of the income of Cactus LLC and to fund liabilities related to the TRA, depends on our future operating performance, which is affected by, and subject to, prevailing economic conditions, market conditions in the E&P industry, availability and cost of raw materials, and financial, business and other factors, many of which are beyond our control. We will not be able to predict or control many of these factors, such as economic conditions in the markets where we operate and competitive pressures. If necessary, we could choose to further reduce our spending on capital projects and operating expenses to ensure we operate within the cash flow generated from our operations.
Cash Flows
Three Months Ended March 31, 20212022 Compared to Three Months Ended March 31, 20202021
The following table summarizes our cash flows for the periods indicated:
| | | Three Months Ended March 31, | | Three Months Ended March 31, |
| | 2021 | | 2020 | | 2022 | | 2021 |
| | (in thousands) | | (in thousands) |
Net cash provided by operating activities | Net cash provided by operating activities | $ | 15,747 | | | $ | 45,161 | | Net cash provided by operating activities | $ | 17,209 | | | $ | 15,747 | |
Net cash used in investing activities | Net cash used in investing activities | (2,028) | | | (8,338) | | Net cash used in investing activities | (7,294) | | | (2,028) | |
Net cash used in financing activities | Net cash used in financing activities | (10,483) | | | (9,604) | | Net cash used in financing activities | (14,180) | | | (10,483) | |
Net cash provided by operating activities was $15.7$17.2 million and $45.2$15.7 million for the three months ended March 31, 20212022 and 2020,2021, respectively. Operating cash flows for 2021 decreased from 20202022 increased primarily due to a decreasean increase in net income adjusted for certain noncash items.offset by an increase in working capital, largely related to the increase in inventories exacerbated by extended in-transit volumes.
Net cash used in investing activities was $2.0$7.3 million and $8.3$2.0 million for the three months ended March 31, 20212022 and 2020,2021, respectively. The decreaseincrease was primarily due to lower capital expendituresincreased investments associated with our rental fleet and additional investment in 2021 due to reductions in planned purchases announced earlier this year.and expansion of our Bossier City location.
Net cash used in financing activities was $10.5$14.2 million and $9.6$10.5 million for the three months ended March 31, 20212022 and 2020,2021, respectively. The increase was attributable tocomprised of a $1.8$2.1 million increase in dividend payments, a $1.3 million increase in share repurchases from employees to satisfy tax withholding obligations related to restricted stock units that vested during the period and a $0.2$0.3 million increase in dividend payments offset by a $0.6 million reduction in payments on finance leases and a $0.5 million decrease in Cactus LLC member distributions.leases.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
For quantitative and qualitative disclosures about market risk, see Part II, Item 7A., “Quantitative and Qualitative Disclosures about Market Risk,” in our 20202021 Annual Report. Our exposure to market risk has not changed materially since December 31, 2020.2021.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
In accordance with Exchange Act Rules 13a-15 and 15d-15, we have evaluated, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the period covered by this report. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of March 31, 20212022 at the reasonable assurance level.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the first quarter of 20212022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
We are party to lawsuits arising in the ordinary course of our business. We cannot predict the outcome of any such lawsuits with certainty, but management believes it is unlikely that pending or threatened legal matters will have a material adverse impact on our financial condition.
Due to the nature of our business, we are, from time to time, involved in other routine litigation or subject to disputes or claims related to our business activities, including workers’ compensation claims and employment related disputes. In the opinion of our management, none of these, whether pending litigation, disputes or claims against us, if decided adversely, will have a material adverse effect on our results of operations, financial condition or cash flows.
Item 1A. Risk Factors.
In addition to the information set forth in this Quarterly Report, you should carefully consider the risk factors and other cautionary statements described under the heading “Item 1A. Risk Factors” included in our 20202021 Annual Report and the risk factors and other cautionary statements contained in our other filings with the Securities and Exchange Commission, which could materially affect our business, results of operations, financial condition or cash flows. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, results of operations, financial condition or cash flows. There have been no material changes in our risk factors from those described in our 20202021 Annual Report or our other Securities and Exchange Commission filings other than the addition of the risk factor as set forth below:
The ongoing conflict in Ukraine may adversely affect our business and results of operations.
The ongoing conflict in Ukraine could have adverse effects on global macroeconomic conditions which could negatively impact our business and results of operations. The conflict is highly unpredictable and has already resulted in significant volatility with oil and natural gas prices worldwide. Elevated oil and natural gas prices could result in higher inflation worldwide, causing economic uncertainty in the oil and natural gas markets as well as the stock market, resulting in stock price volatility, foreign currency fluctuations and supply chain disruptions. These conditions could ultimately dampen demand for our goods and services by increasing the possibility of a recession. In addition, the conflict could lead to increased cyberattacks or could aggravate other risk factors that we identify in our public filings.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Issuer Purchases of Equity Securities
The following sets forth information with respect to our repurchase of Class A common stock during the three months ended March 31, 20212022 (in whole shares).
| | | | | | | | | | | |
Period | Total number of shares purchased (1) | | Average price paid per share (2) |
January 1-31, 2021 | — | | | $ | — | |
February 1-28, 2021 | 38,916 | | | 29.03 | |
March 1-31, 2021 | 61,185 | | | 32.82 | |
Total | 100,101 | | | $ | 31.35 | |
| | | | | | | | | | | |
Period | Total number of shares purchased (1) | | Average price paid per share (2) |
January 1-31, 2022 | — | | | $ | — | |
February 1-28, 2022 | — | | | — | |
March 1-31, 2022 | 79,431 | | | 55.70 | |
Total | 79,431 | | | $ | 55.70 | |
(1)Consists of shares of Class A common stock repurchased from employees to satisfy tax withholding obligations related to restricted stock units that vested during the period.
(2)Average price paid for Class A common stock purchased from employees to satisfy tax withholding obligations related to restricted stock units that vested during the period.
Item 6. Exhibits.
The following exhibits are required by Item 601 of Regulation S-K and are filed as part of this report.
| | | | | | | | |
Exhibit No. | | Description |
3.1 | | |
3.2 | | |
10.1 | | |
31.1* | | |
31.2* | | |
32.1** | | |
32.2** | | |
101.INS* | | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document |
101.SCH* | | Inline XBRL Taxonomy Extension Schema Document |
101.CAL* | | Inline XBRL Taxonomy Calculation Linkbase Document |
101.LAB* | | Inline XBRL Taxonomy Label Linkbase Document |
101.PRE* | | Inline XBRL Taxonomy Presentation Linkbase Document |
101.DEF* | | Inline XBRL Taxonomy Definition Document |
104 | | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* Filed herewith.
** Furnished herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| | | | | | | | | | | |
| | | Cactus, Inc. |
| | | |
May 6, 20215, 2022 | | By: | /s/ Scott Bender |
Date | | | Scott Bender President, Chief Executive Officer and Director (Principal Executive Officer) |
| | | |
May 6, 20215, 2022 | | By: | /s/ Stephen Tadlock |
Date | | | Stephen Tadlock Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer) |