Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2024 | Apr. 30, 2024 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
Document Transition Report | false | |
Entity File Number | 001-38390 | |
Entity Registrant Name | Cactus, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 35-2586106 | |
Entity Address, Address Line One | 920 Memorial City Way, Suite 300 | |
Entity Address, City or Town | Houston, | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77024 | |
City Area Code | 713 | |
Local Phone Number | 626-8800 | |
Title of 12(b) Security | Class A Common Stock, par value $0.01 | |
Trading Symbol | WHD | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001699136 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Class A Common Stock | ||
Entity Common Stock, Shares Outstanding | 65,706,197 | |
Class B Common Stock | ||
Entity Common Stock, Shares Outstanding | 13,848,630 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets | ||
Cash and cash equivalents | $ 194,257 | $ 133,792 |
Accounts receivable, net of allowance of $3,803 and $3,642, respectively | 207,624 | 205,381 |
Inventories | 204,049 | 205,625 |
Prepaid expenses and other current assets | 11,027 | 11,380 |
Total current assets | 616,957 | 556,178 |
Noncurrent assets | ||
Property and equipment, net | 344,973 | 345,502 |
Operating lease right-of-use assets, net | 24,429 | 23,496 |
Intangible assets, net | 175,981 | 179,978 |
Goodwill | 203,028 | 203,028 |
Deferred tax asset, net | 201,037 | 204,852 |
Other noncurrent assets | 9,482 | 9,527 |
Total assets | 1,575,887 | 1,522,561 |
Current liabilities | ||
Accounts payable | 66,142 | 71,841 |
Accrued expenses and other current liabilities | 58,284 | 50,654 |
Earn-out liability | 34,114 | 20,810 |
Current portion of liability related to tax receivable agreement | 20,855 | 20,855 |
Finance lease obligations, current portion | 7,181 | 7,280 |
Operating lease liabilities, current portion | 4,094 | 4,220 |
Total current liabilities | 190,670 | 175,660 |
Noncurrent liabilities | ||
Deferred tax liability, net | 3,743 | 3,589 |
Liability related to tax receivable agreement, net of current portion | 250,069 | 250,069 |
Finance lease obligations, net of current portion | 9,529 | 9,352 |
Operating lease liabilities, net of current portion | 20,283 | 19,121 |
Other noncurrent liabilities | 1,004 | 0 |
Total liabilities | 475,298 | 457,791 |
Commitments and contingencies | ||
Stockholders’ equity | ||
Preferred stock, $0.01 par value, 10,000 shares authorized, none issued and outstanding | 0 | 0 |
Additional paid-in capital | 462,464 | 465,012 |
Retained earnings | 431,703 | 400,682 |
Accumulated other comprehensive loss | (1,456) | (826) |
Total stockholders’ equity attributable to Cactus Inc. | 893,366 | 865,522 |
Non-controlling interest | 207,223 | 199,248 |
Total stockholders’ equity | 1,100,589 | 1,064,770 |
Total liabilities and equity | 1,575,887 | 1,522,561 |
Class A Common Stock | ||
Stockholders’ equity | ||
Common stock, $0.01 par value | 655 | 654 |
Class B Common Stock | ||
Stockholders’ equity | ||
Common stock, $0.01 par value | $ 0 | $ 0 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Allowance for accounts receivable | $ 3,803 | $ 3,642 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000 | 10,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Class A Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 300,000 | 300,000 |
Common stock, shares issued (in shares) | 65,518 | 65,409 |
Common stock, shares outstanding (in shares) | 65,518 | 65,409 |
Class B Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 215,000 | 215,000 |
Common stock, shares issued (in shares) | 14,034 | 14,034 |
Common stock, shares outstanding (in shares) | 14,034 | 14,034 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Revenues | ||
Total revenues | $ 274,123 | $ 228,405 |
Costs and expenses | ||
Selling, general and administrative expenses | 29,422 | 29,901 |
Change in fair value of earn-out liability | 13,304 | 0 |
Total costs and expenses | 211,573 | 178,717 |
Operating income | 62,550 | 49,688 |
Interest income, net | 689 | 1,002 |
Other income, net | 0 | 3,538 |
Income before income taxes | 63,239 | 54,228 |
Income tax expense | 13,424 | 1,940 |
Net income | 49,815 | 52,288 |
Less: net income attributable to non-controlling interest | 10,850 | 9,394 |
Net income attributable to Cactus Inc. | $ 38,965 | $ 42,894 |
Class A Common Stock | ||
Earnings per share and weighted average shares outstanding | ||
Earnings per Class A share - basic (in dollars per share) | $ 0.60 | $ 0.67 |
Earnings per Class A share - diluted (in dollars per share) | $ 0.59 | $ 0.63 |
Weighted average Class A shares outstanding - basic (in shares) | 65,378 | 63,740 |
Weighted average Class A shares outstanding - diluted (in shares) | 79,556 | 79,155 |
Product revenue | ||
Revenues | ||
Total revenues | $ 207,511 | $ 159,510 |
Costs and expenses | ||
Cost of revenue | 120,666 | 100,815 |
Rental revenue | ||
Revenues | ||
Total revenues | 23,943 | 27,817 |
Costs and expenses | ||
Cost of revenue | 12,946 | 16,084 |
Field service and other revenue | ||
Revenues | ||
Total revenues | 42,669 | 41,078 |
Costs and expenses | ||
Cost of revenue | $ 35,235 | $ 31,917 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 49,815 | $ 52,288 |
Foreign currency translation adjustments | (803) | 303 |
Comprehensive income | 49,012 | 52,591 |
Less: comprehensive income attributable to non-controlling interest | 10,677 | 9,477 |
Comprehensive income attributable to Cactus Inc. | $ 38,335 | $ 43,114 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Non-controlling Interest | Class A Common Stock Common stock | Class B Common Stock Common stock |
Balance at the beginning of the period (in shares) at Dec. 31, 2022 | 60,903 | 14,978 | |||||
Balance at the beginning of the period at Dec. 31, 2022 | $ 710,445 | $ 310,528 | $ 261,764 | $ (984) | $ 138,528 | $ 609 | $ 0 |
Statement of Stockholders'/Members' Equity | |||||||
Issuance of common stock (in shares) | 3,352 | ||||||
Issuances of common stock | 169,369 | 143,302 | 26,033 | $ 34 | |||
Member distributions | (1,644) | (1,644) | |||||
Tax impact of equity transactions | 2,845 | (13,981) | 16,826 | ||||
Equity award vestings (in shares) | 193 | ||||||
Equity award vestings | (4,343) | (3,009) | (1,336) | $ 2 | |||
Other comprehensive income (loss) | 303 | 220 | 83 | ||||
Stock-based compensation | 3,703 | 3,004 | 699 | ||||
Cash dividends declared | (7,130) | (7,130) | |||||
Net income | 52,288 | 42,894 | 9,394 | ||||
Balance at the end of the period (in shares) at Mar. 31, 2023 | 64,448 | 14,978 | |||||
Balance at the end of the period at Mar. 31, 2023 | 925,836 | 439,844 | 297,528 | (764) | 188,583 | $ 645 | $ 0 |
Balance at the beginning of the period (in shares) at Dec. 31, 2023 | 65,409 | 14,034 | |||||
Balance at the beginning of the period at Dec. 31, 2023 | 1,064,770 | 465,012 | 400,682 | (826) | 199,248 | $ 654 | $ 0 |
Statement of Stockholders'/Members' Equity | |||||||
Member distributions | (1,684) | (1,684) | |||||
Tax impact of equity transactions | 234 | 234 | 0 | ||||
Equity award vestings (in shares) | 196 | ||||||
Equity award vestings | (4,896) | (3,466) | (1,432) | $ 2 | |||
Other comprehensive income (loss) | (803) | (630) | (173) | ||||
Share repurchases (in shares) | (87) | ||||||
Share repurchases | (3,372) | (2,996) | (375) | $ (1) | |||
Stock-based compensation | 4,469 | 3,680 | 789 | ||||
Cash dividends declared | (7,944) | (7,944) | |||||
Net income | 49,815 | 38,965 | 10,850 | ||||
Balance at the end of the period (in shares) at Mar. 31, 2024 | 65,518 | 14,034 | |||||
Balance at the end of the period at Mar. 31, 2024 | $ 1,100,589 | $ 462,464 | $ 431,703 | $ (1,456) | $ 207,223 | $ 655 | $ 0 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Statement of Stockholders' Equity [Abstract] | ||
Cash dividend declared (in dollars per share) | $ 0.12 | $ 0.11 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Cash flows from operating activities | ||
Net income | $ 49,815 | $ 52,288 |
Reconciliation of net income to net cash provided by operating activities: | ||
Depreciation and amortization | 15,046 | 13,110 |
Deferred financing cost amortization | 280 | 291 |
Stock-based compensation | 4,432 | 3,841 |
Provision for expected credit losses | 162 | (376) |
Inventory obsolescence | 1,062 | 576 |
Gain on disposal of assets | (208) | (1,033) |
Deferred income taxes | 4,403 | (1,406) |
Change in fair value of earn-out liability | 13,304 | (121) |
Gain from revaluation of liability related to tax receivable agreement | 0 | (3,417) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (3,011) | (12,883) |
Inventories | 234 | 20,565 |
Prepaid expenses and other assets | 128 | 2,151 |
Accounts payable | (8,132) | (6,282) |
Accrued expenses and other liabilities | 8,748 | (6,842) |
Net cash provided by operating activities | 86,263 | 60,462 |
Cash flows from investing activities | ||
Acquisition of a business, net of cash and cash equivalents acquired | 0 | (618,857) |
Capital expenditures and other | (7,902) | (15,928) |
Proceeds from sales of assets | 1,094 | 1,633 |
Net cash used in investing activities | (6,808) | (633,152) |
Cash flows from financing activities | ||
Proceeds from the issuance of long-term debt | 0 | 155,000 |
Net proceeds from the issuance of Class A common stock | 0 | 169,878 |
Payments of deferred financing costs | 0 | (6,665) |
Payments on finance leases | (2,031) | (1,709) |
Dividends paid to Class A common stock shareholders | (8,144) | (7,353) |
Distributions to members | (1,684) | (1,645) |
Repurchases of shares | (8,268) | (4,343) |
Net cash provided by (used in) financing activities | (20,127) | 303,163 |
Effect of exchange rate changes on cash and cash equivalents | 1,137 | 422 |
Net increase (decrease) in cash and cash equivalents | 60,465 | (269,105) |
Cash and Cash Equivalents, at Carrying Value [Abstract] | ||
Cash and cash equivalents, beginning of period | 133,792 | 344,527 |
Cash and cash equivalents, end of period | 194,257 | 75,422 |
Supplemental disclosure of cash flow information | ||
Net cash paid for income taxes | 1,611 | 556 |
Cash paid for interest | 535 | 327 |
Non-cash investing and financing activities: | ||
Right-of-use assets obtained in exchange for new lease obligations | 4,515 | 4,874 |
Property and equipment in accounts payable | $ 2,637 | $ 1,249 |
Preparation of Interim Financia
Preparation of Interim Financial Statements and Other Items | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Preparation of Interim Financial Statements and Other Items | 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”), including Cactus Companies, LLC (“Cactus Companies”). Cactus Inc. is a holding company whose only material asset is an equity interest consisting of units representing limited liability company interests in Cactus Companies (“CC Units”). Cactus Inc. is the sole managing member of Cactus Companies and operates and controls all of the business and affairs of Cactus Companies and conducts its business through Cactus Companies and its subsidiaries. As a result, Cactus Inc. consolidates the financial results of Cactus Companies and its subsidiaries and reports a non-controlling interest related to the portion of CC 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. On February 28, 2023, Cactus Inc. through one of its subsidiaries, completed the acquisition of the FlexSteel business through a merger (the “Merger”) with HighRidge Resources, Inc. and its subsidiaries (“HighRidge”). On February 27, 2023, in order to facilitate the Merger with HighRidge, an internal reorganization was completed in which Cactus Companies acquired all of the outstanding units representing ownership interests in Cactus Wellhead, LLC (“Cactus LLC”), the operating subsidiary of Cactus Inc. (the “CC Reorganization”). The purpose of the Merger was to effect the acquisition of the operations of FlexSteel Holdings, Inc. and its subsidiaries. FlexSteel Holdings, Inc. was a wholly-owned subsidiary of HighRidge prior to the Merger and was converted into a limited liability company, contributed from HighRidge to Cactus Companies as part of the CC Reorganization and is now named FlexSteel Holdings, LLC (“FlexSteel”). The results of operations of FlexSteel have been reflected in our accompanying condensed consolidated financial statements from the closing date of the acquisition. See Note 2 for additional information related to the acquisition. Following the acquisition of FlexSteel, we now operate in two business segments: Pressure Control and Spoolable Technologies. 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, 2023. 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. Recent Accounting Pronouncements Standards Not Yet Adopted In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, “Income Taxes (Topic 740).” The amendments in this ASU require entities to disclose on an annual basis specific categories in the income tax rate reconciliation and provide additional disclosures for reconciling items that meet a specified quantitative threshold. Entities will also be required to disclose annually income taxes paid disaggregated by federal, state and foreign taxes and the amount of income taxes paid by individual jurisdictions that meet a five percent or greater threshold of total income taxes paid net of refunds received. The ASU also adds certain disclosures in order to be consistent with U.S. Securities and Exchange Commission rules and removes certain disclosures that no longer are considered cost beneficial or relevant. The amendments in this ASU are to be applied on a prospective basis and will be effective for our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, with early adoption permitted. We are currently evaluating the impact the adoption of this new standard will have on our disclosures. In November 2023, the FASB issued ASU No. 2023-07, “Improvements to Reportable Segment Disclosures (Topic 280)” in order to require disclosure of incremental segment information on an annual and interim basis for all public entities. The ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items and interim disclosures of a reportable segment’s profit or loss and assets. The ASU is to be applied retrospectively to all prior periods presented in the financial statements and is effective for our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, with early adoption permitted. We are currently evaluating the impact the adoption of this new standard will have on our segment disclosures. |
FlexSteel Acquisition
FlexSteel Acquisition | 3 Months Ended |
Mar. 31, 2024 | |
Business Combination and Asset Acquisition [Abstract] | |
FlexSteel Acquisition | FlexSteel Acquisition On February 28, 2023 we completed the acquisition of FlexSteel. Including final adjustments for closing working capital, cash on hand and indebtedness adjustments as set forth in the merger agreement, we paid total cash consideration of $621.5 million. There is also a future earn-out payment of up to $75.0 million to be paid no later than the third quarter of 2024, if certain revenue targets are met by FlexSteel. Purchase Price Consideration The final purchase price consideration for the acquisition was $627.5 million and is summarized as follows: Purchase Price Consideration Cash consideration $ 621,505 Add: Contingent consideration (1) 5,960 Fair value of consideration transferred $ 627,465 (1) Represents the estimated fair value as of the acquisition date of the earn-out payment of up to $75.0 million of additional cash consideration if certain revenue targets are met by FlexSteel. The estimated fair value of the earn-out payment was determined using a Monte Carlo simulation valuation methodology based on probability-weighted performance projections and other inputs, including a discount rate. Changes in the fair value of the earn-out liability subsequent to the acquisition date are recognized in the consolidated statements of income. As of March 31, 2024, the estimated earn-out payment is $34.1 million. The increase is based on the improvements in FlexSteel's expected revenues for the period January 1, 2023 through June 30, 2024, compared to projections made at the time of the acquisition. See further discussion of the calculation of fair value of the earn-out liability in Note 12. Purchase Price Allocation The following table provides the final allocation of the purchase price as of the acquisition date: Cash and cash equivalents $ 5,316 Receivables 58,002 Inventories 91,746 Prepaid expenses and other current assets 1,283 Property and equipment 206,928 Operating lease right-of-use assets 1,021 Identifiable intangible assets 200,300 Other noncurrent assets 5,666 Total assets acquired 570,262 Accounts payable (14,975) Accrued expenses and other current liabilities (26,827) Finance lease obligations (974) Operating lease liabilities (906) Deferred tax liabilities (94,319) Total liabilities assumed (138,001) Net assets acquired 432,261 Goodwill $ 195,204 The acquisition was accounted for using the acquisition method of accounting, with Cactus being treated as the accounting acquirer. Under the acquisition method of accounting, the assets and liabilities were recorded at their respective fair values as of the acquisition date. Fair values were determined by management, based in part on independent valuations performed by third-party valuation specialists. The valuation methods used to determine the fair value of intangible assets included the excess earnings approach for customer relationships and backlog using customer inputs and contributory charges and the relief from royalty method for tradename and developed technology. The fair values determined for accounts receivable, accounts payable and most other current assets and liabilities, other than inventory, were equivalent to the carrying value due to their short-term nature. Acquired inventories were comprised of raw materials, work-in-progress and finished goods. The fair value of finished goods was calculated as the estimated selling price, less costs of the selling effort and a reasonable profit allowance relating to the selling effort. The fair value of identifiable fixed assets was calculated using a combination of valuation approaches, but primarily consisted of the cost approach which adjusts estimates of replacement cost for the age, condition and utility of the associated assets. Goodwill is calculated as the excess of the purchase price over the estimated fair value of net assets acquired. Pro forma financial information The pro forma financial information below represents the combined results of operations as if the acquisition had occurred as of January 1, 2022. The unaudited pro forma financial information is presented for informational purposes only and is neither indicative of the results of operations that would have occurred if the acquisition had taken place at the beginning of the period presented nor indicative of future operating results. Three Months Ended 2023 Revenues $ 281,784 Net Income attributable to Cactus, Inc. 40,803 |
Accounts Receivable and Allowan
Accounts Receivable and Allowance for Credit Losses | 3 Months Ended |
Mar. 31, 2024 | |
Receivables [Abstract] | |
Accounts Receivable and Allowance for Credit Losses | 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 exploration and production companies located in the U.S. Our receivables are short-term in nature and typically due in 30 to 60 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, 2024 and December 31, 2023 was $31.7 million and $26.8 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 Expense Write off Translation Adjustments Balance at Three Months Ended March 31, 2024 $ 3,642 $ 162 $ (1) $ — $ 3,803 Three Months Ended March 31, 2023 1,060 (376) (19) 2 667 |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2024 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined using standard cost (which approximates average cost). Costs include an application of related material, direct labor, duties, tariffs, freight and overhead 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, December 31, Raw materials $ 18,941 $ 22,373 Work-in-progress 13,330 11,471 Finished goods 171,778 171,781 $ 204,049 $ 205,625 |
Property and Equipment, net
Property and Equipment, net | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Property and Equipment, net Property and equipment are stated at cost. We manufacture or construct most of our Pressure Control rental equipment 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, December 31, Land $ 16,442 $ 16,442 Buildings and improvements 132,091 131,974 Machinery and equipment 130,082 128,962 Reels and skids 16,124 16,181 Vehicles 37,657 36,552 Rental equipment 219,692 218,340 Furniture and fixtures 1,908 1,913 Computers and software 4,112 3,951 Gross property and equipment 558,108 554,315 Less: Accumulated depreciation (239,984) (231,594) Net property and equipment 318,124 322,721 Construction in progress 26,849 22,781 Total property and equipment, net $ 344,973 $ 345,502 |
Other Intangible Assets
Other Intangible Assets | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Other Intangible Assets | Other Intangible Assets The following table presents the detail of acquired intangible assets: March 31, 2024 December 31, 2023 Gross Cost Accumulated Amortization Net Cost Gross Cost Accumulated Amortization Net Cost Customer relationships $ 100,300 $ (7,244) $ 93,056 $ 100,300 $ (5,572) $ 94,728 Developed technology 77,000 (8,342) 68,658 77,000 (6,417) 70,583 Tradename 16,000 (1,733) 14,267 16,000 (1,333) 14,667 Backlog 7,000 (7,000) — 7,000 (7,000) — Total $ 200,300 $ (24,319) $ 175,981 $ 200,300 $ (20,322) $ 179,978 All intangible assets are amortized over their estimated useful lives. The weighted average amortization period for identifiable intangible assets acquired as of March 31, 2024 is 12 years. Amortization expense recognized during the three months ended March 31, 2024 was $4.0 million and was recorded in selling, general and administrative expenses in the consolidated statements of income. Estimated future amortization expense is as follows: Remainder of 2024 $ 11,990 2025 15,987 2026 15,987 2027 15,987 2028 15,987 2029 15,987 Thereafter 84,056 Total $ 175,981 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Debt | Debt We had no debt outstanding as of March 31, 2024 and December 31, 2023. We had $1.1 million in letters of credit outstanding and were in compliance with all covenants under the Amended ABL Credit Facility (as defined below) as of March 31, 2024. In August 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 first amended in September 2020 and provided for up to $75.0 million in revolving commitments. On July 25, 2022, the ABL Credit Facility was amended again for up to $80.0 million in revolving commitments, up to $15.0 million of which was available for the issuance of letters of credit. On February 28, 2023, in connection with the Merger, Cactus Companies assumed the rights and obligations of Cactus LLC as Borrower under the ABL Credit Facility, and the ABL Credit Facility was amended and restated in its entirety (the “Amended ABL Credit Facility”). The Amended ABL Credit Facility provides for a term loan of $125.0 million and up to $225.0 million in revolving commitments, of which $20.0 million is available for the issuance of letters of credit. Subject to certain terms and conditions set forth in the Amended ABL Credit Facility, Cactus Companies may request additional revolving commitments in an amount not to exceed $50.0 million, for a total of up to $275.0 million in revolving commitments. The term loan under the Amended ABL Credit Facility was set to mature on February 27, 2026 and any revolving loans under the Amended ABL Credit Facility mature on July 26, 2027. The maximum amount that Cactus Companies may borrow under the Amended 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 borrowed the full $125.0 million term loan amount and $30.0 million as a revolving loan at closing of the Amended ABL Credit Facility to fund a portion of the Merger. The term loan was required to be repaid in regular set amounts starting July 1, 2023 as set forth in the amortization schedule in the Amended ABL Credit Facility and could be prepaid without the payment of any prepayment premium (other than customary breakage costs for Term Benchmark (as defined below) borrowings). The term loan and revolving loan were repaid in full in July 2023. Borrowings under the Amended ABL Credit Facility bear interest at Cactus Companies’ option at either (i) the Alternate Base Rate (as defined therein) (“ABR”), or (ii) the Adjusted Term SOFR Rate (as defined therein) (“Term Benchmark”), plus, in each case, an applicable margin. Letters of credit issued under the Amended ABL Credit Facility accrue fees at a rate equal to the applicable margin for Term Benchmark borrowings. The applicable margin is 2.50% per annum for term loan ABR borrowings and 3.50% per annum for term loan Term Benchmark borrowings. The applicable margin for revolving loan borrowings ranges from 0.0% to 0.5% per annum for revolving loan ABR borrowings and 1.25% to 1.75% per annum for revolving loan Term Benchmark borrowings and, in each case, is based on the average quarterly availability of the revolving loan commitment under the Amended ABL Credit Facility for the immediately preceding fiscal quarter. The unused portion of revolving commitment under the Amended ABL Credit Facility is subject to a commitment fee of 0.25% per annum. The Amended ABL Credit Facility contains various covenants and restrictive provisions that limit Cactus Companies’ and each of its subsidiaries’ ability to, among other things, incur additional indebtedness and create liens, make investments or loans, merge or consolidate with other companies, sell assets, make certain restricted payments and distributions, and engage in transactions with affiliates. The obligations under the Amended ABL Credit Facility are guaranteed by certain subsidiaries of Cactus Companies and secured by a security interest in accounts receivable, inventory, equipment and certain other real and personal property assets of Cactus Companies and the guarantors. Until the term loan was paid in full, the Amended ABL Credit Facility required Cactus Companies to maintain a leverage ratio no greater than 2.50 to 1.00 based on the ratio of Total Indebtedness (as defined therein) to EBITDA (as defined therein). The Amended ABL Credit Facility requires Cactus Companies to maintain a minimum fixed charge coverage ratio of 1.00 to 1.00 based on the ratio of EBITDA (as defined therein) minus Unfinanced Capital Expenditures (as defined therein) to Fixed Charges (as defined therein) during certain periods, including when availability under the Amended ABL Credit Facility is under certain levels. If Cactus Companies fails to perform its obligations under the Amended ABL Credit Facility, (i) the revolving commitments under the Amended ABL Credit Facility could be terminated, (ii) any outstanding borrowings under the Amended ABL Credit Facility may be declared immediately due and payable, and (iii) the lenders may commence foreclosure or other actions against the collateral. The Amended ABL Credit Facility was amended in December 2023 to incorporate certain changes related to revised and new definitions associated with the satisfaction of payment conditions for restricted payments, investments, permitted acquisitions, periodic reporting and asset dispositions. The amendment did not change the ABR, applicable margin rates, commitment fees, the maturity date, borrowing availability or covenants under the Amended ABL Credit Facility other than timing of certain reporting requirements. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue The majority of our revenues are derived from short-term contracts for fixed consideration or in the case of rentals, for a fixed charge per day, plus repairs 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 60 days of invoicing. 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, Canada, the Middle East and other international markets. The following table presents our revenues disaggregated by category: Three Months Ended 2024 2023 Product revenue $ 207,511 76 % $ 159,510 70 % Rental revenue 23,943 8 % 27,817 12 % Field service and other revenue 42,669 16 % 41,078 18 % Total revenues $ 274,123 100 % $ 228,405 100 % At March 31, 2024, we had a deferred revenue balance of $7.9 million compared to the December 31, 2023 balance of $8.1 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, 2024, 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. |
Tax Receivable Agreement ("TRA"
Tax Receivable Agreement ("TRA") | 3 Months Ended |
Mar. 31, 2024 | |
Tax Receivable Agreement | |
Tax Receivable Agreement ("TRA") | 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 certain direct and indirect owners of Cactus LLC (after the CC Reorganization, Cactus Companies) 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 expense, net. As of March 31, 2024, the total liability from the TRA was $270.9 million with $20.9 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 Companies 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 CC 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. In March of 2024, the TRA was amended to replace all references to one year LIBOR with references to the 12-month term SOFR published by CME Group Benchmark Administration Limited plus 71.513 basis points. Additionally, all references to Cactus LLC were replaced with references to Cactus Companies as described in the CC Reorganization. The foregoing description of the TRA Amendment is a summary of the material terms of the TRA Amendment, does not purport to be complete and is qualified in its entirety by reference to the complete text of the TRA Amendment, a copy of which is filed as an Exhibit to this Quarterly Report and is incorporated herein by reference. |
Equity
Equity | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
Equity | Equity As of March 31, 2024, Cactus Inc. owned 82.4% of Cactus Companies as compared to 82.3% of Cactus Companies as of December 31, 2023. As of March 31, 2024, Cactus Inc. had outstanding 65.5 million shares of Class A common stock (representing 82.4% of the total voting power) and 14.0 million shares of Class B common stock (representing 17.6% of the total voting power). Equity Offering In January 2023, Cactus Inc. completed an underwritten offering of 3,224,300 shares of Class A common stock at a price to the underwriters of $51.36 per share for net proceeds of $165.6 million (net of $6.9 million of underwriting discounts and commissions). In addition to the underwriting discounts and commissions, approximately $2.2 million of costs directly associated with the stock issuance were recorded as a reduction to additional paid-in capital. FlexSteel Acquisition In conjunction with the FlexSteel acquisition, a restricted stock award of 128,150 shares of Class A common stock was issued under the Company’s long-term incentive plan to a key employee in exchange for cash consideration of $6.5 million. The shares were restricted from sale or trading and were subject to vesting requirements for one year from grant date. The agreement included a guaranteed provision whereby if the fair market value of the restricted shares was below the purchase price upon vesting, Cactus would compensate the key employee for the difference in price plus a gross-up for taxes. The restricted stock award early vested in October 2023 when the employee separated from the Company. The guaranteed payment provision was not triggered when the shares vested; therefore no cash payment was required or made in accordance with the terms of this award. CC Reorganization As part of the CC Reorganization in connection with the acquisition of FlexSteel, Cactus Companies acquired all of the outstanding units representing limited liability company interests of Cactus LLC (“CW Units”) in exchange for an equal number of CC Units issued to each of the previous owners of CW Units other than Cactus Inc. (the “CW Unit Holders”). Upon the completion of the CC Reorganization, CW Unit Holders ceased to be holders of CW Units and, instead, became holders of a number of CC Units equal to the number of CW Units such CW Unit Holders held immediately prior to the completion of the CC Reorganization. After the CC Reorganization, we refer to the owners of CC Units, other than Cactus Inc. (along with their permitted transferees), as “CC Unit Holders.” Following the completion of the CC Reorganization, CC Unit Holders own one share of our Class B Common Stock for each CC Unit such CC Unit Holder owns. In connection with the CC Reorganization, Cactus Inc. and the owners of CC Units entered into the Amended and Restated Limited Liability Company Operating Agreement of Cactus Companies (the “Cactus Companies LLC Agreement”), which contains substantially the same terms and conditions as the Second Amended and Restated Limited Liability Company Operating Agreement of Cactus LLC (the “Cactus Wellhead LLC Agreement”), which was the limited liability company operating agreement of Cactus LLC prior to the CC Reorganization. Cactus Inc. was responsible for all operational, management and administrative decisions relating to Cactus LLC’s business for the period from completion of our IPO until the CC Reorganization and relating to Cactus Companies’ business for periods after the CC Reorganization. Redemptions of CC Units Pursuant to the Cactus Companies LLC Agreement, holders of CC Units are entitled to redeem their CC Units, which results in additional Class A common stock outstanding. Since our IPO in February 2018, an aggregate of 46.5 million CC Units (including CW Units prior to the CC Reorganization) 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, 2024 and 2023, there were no redemptions of CC Units (or CW Units prior to the CC Reorganization). Dividends Aggregate cash dividends of $0.12 and $0.11 per share of Class A common stock were declared during the three months ended March 31, 2024 and 2023 totaling $8.0 million and $7.1 million, respectively. Cash dividends paid during the three months ended March 31, 2024 and 2023 totaled $8.1 million and $7.4 million, respectively. Dividends accrue on unvested equity-based awards on the date of record and are paid 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 CC 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.” Share Repurchase Program On June 6, 2023, our board of directors authorized the Company to repurchase shares of its Class A common stock for an aggregate purchase price of up to $150 million. Under our share repurchase program, shares may be repurchased from time to time in open market transactions or block trades, in privately negotiated transactions or any other method permitted under U.S. securities laws, rules and regulations. The repurchase program does not obligate the Company to purchase any particular amount of shares, and the repurchase program may be suspended or discontinued at any time at the Company’s discretion. During the three months ended March 31, 2024, the Company purchased and retired 86,599 shares of Class A common stock for $3.4 million, or $38.92 average price per share excluding commissions, under the share repurchase program. As of March 31, 2024, $146.3 million remained authorized for future repurchases of Class A common stock under the program. Member Distributions Distributions made by Cactus Companies are generally required to be made pro rata among all its members. For the three months ended March 31, 2024, Cactus Companies distributed $7.8 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, 2023, Cactus Companies distributed $7.1 million to Cactus Inc. to fund its dividend payments and made pro rata distributions to the other members totaling $1.6 million. Limitation of Members’ Liability Under the terms of the Cactus Companies LLC Agreement, the members of Cactus Companies are not obligated for debt, liabilities, contracts or other obligations of Cactus Companies. Profits and losses are allocated to members as defined in the Cactus Companies LLC Agreement. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 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. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Authoritative guidance on fair value measurements provides a framework for measuring fair value and establishes a fair value hierarchy that prioritizes the inputs used to measure fair value, giving the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 inputs), observable inputs other than quoted prices in active markets (Level 2 inputs) and the lowest priority to unobservable inputs (Level 3 inputs). The carrying value of cash and cash equivalents, receivables, accounts payable and accrued expenses approximates fair value based on the short-term nature of these accounts. At March 31, 2024, due to the short-term nature of this account, the earn-out liability related to the FlexSteel acquisition (see Note 2) was determined based on the estimated future payments, utilizing projections for the second quarter of 2024. At December 31, 2023, the earn-out liability was measured at a fair value of $20.8 million using Level 3 unobservable inputs. The fair value at December 31, 2023 was determined based on the evaluation of the probability and amount of earn-out that may be achieved based on expected future performance of FlexSteel using a Monte Carlo simulation model. The Monte Carlo simulation model uses assumptions including revenue volatilities, risk free rates, credit discount rates and revenue discount rates. The following table sets forth the range of inputs for the significant assumptions utilized to determine the fair value as of December 31, 2023: December 31, 2023 Risk-free interest rate 5.40% to 5.63% Expected revenue volatility 21.70% Revenue discount rate 10.02% to 10.23% Credit discount rate 9.85% The following table presents a summary of the changes in fair value of our liabilities measured using Level 3 inputs: Earn-out Opening Balance $ 5,960 Changes in fair value 14,850 Balance at December 31, 2023 $ 20,810 The fair value of our foreign currency forwards was less than $0.1 million as of March 31, 2024 and was determined using market observable inputs including forward and spot prices (Level 2 inputs). |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting We operate in two business segments that offer different products and services and correspond to the manner in which our chief operating decision maker reviews and evaluates operating performance to make decisions about resources to be allocated to each segment. Our reporting segments are: • Pressure Control – engaged in the design, manufacture, sale, installation and service of wellhead and pressure control equipment utilized during the drilling, completion and production phases of oil and gas wells. • Spoolable Technologies – engaged in the design, manufacture, sale, installation, service and associated rental of onshore spoolable pipe technologies utilized for production, gathering and takeaway transportation of oil, gas or other liquids. Financial information by business segment for three months ended March 31, 2024 and 2023 is summarized below. Three Months Ended 2024 2023 Revenue: Pressure Control $ 175,028 $ 194,655 Spoolable Technologies 99,095 33,750 Total revenues 274,123 228,405 Operating income: Pressure Control 51,675 63,171 Spoolable Technologies 16,393 249 Total segment operating income 68,068 63,420 Corporate and other expenses (1) (5,518) (13,732) Total operating income 62,550 49,688 Interest income, net 689 1,002 Other income, net — 3,538 Income before income taxes $ 63,239 $ 54,228 (1) Includes corporate and other costs not directly attributable to our reporting segments, such as corporate executive management and other administrative functions. These costs were previously included in the Pressure Control segment. The information for the three months ended March 31, 2023 has been recast to align with the presentation for the three months ended March 31, 2024. |
Earnings per Share
Earnings per Share | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Earnings per Share | 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 CC Units and corresponding shares of outstanding Class B common stock. We use the treasury stock method to determine the potential dilutive effect of unvested stock-based compensation awards assuming that the proceeds will be used to purchase shares of Class A common stock. For our unvested performance stock units, we first apply the criteria for contingently issuable shares before determining the potential dilutive effect using the treasury stock method. The following table summarizes the basic and diluted earnings per share calculations: Three Months Ended 2024 2023 Numerator: Net income attributable to Cactus Inc.—basic $ 38,965 $ 42,894 Net income attributable to non-controlling interest (1) 8,241 7,312 Net income attributable to Cactus Inc.—diluted (1) $ 47,206 $ 50,206 Denominator: Weighted average Class A shares outstanding—basic 65,378 63,740 Effect of dilutive shares 14,178 15,415 Weighted average Class A shares outstanding—diluted 79,556 79,155 Earnings per Class A share—basic $ 0.60 $ 0.67 Earnings per Class A share—diluted (1) $ 0.59 $ 0.63 (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 26.0% for the three months ended March 31, 2024 and 24.5% for the three months ended March 31, 2023. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ 38,965 | $ 42,894 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Preparation of Interim Financ_2
Preparation of Interim Financial Statements and Other Items (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The financial statements presented in this report represent the consolidation of Cactus, Inc. (“Cactus Inc.”) and its subsidiaries (the “Company”), including Cactus Companies, LLC (“Cactus Companies”). Cactus Inc. is a holding company whose only material asset is an equity interest consisting of units representing limited liability company interests in Cactus Companies (“CC Units”). Cactus Inc. is the sole managing member of Cactus Companies and operates and controls all of the business and affairs of Cactus Companies and conducts its business through Cactus Companies and its subsidiaries. As a result, Cactus Inc. consolidates the financial results of Cactus Companies and its subsidiaries and reports a non-controlling interest related to the portion of CC 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. On February 28, 2023, Cactus Inc. through one of its subsidiaries, completed the acquisition of the FlexSteel business through a merger (the “Merger”) with HighRidge Resources, Inc. and its subsidiaries (“HighRidge”). On February 27, 2023, in order to facilitate the Merger with HighRidge, an internal reorganization was completed in which Cactus Companies acquired all of the outstanding units representing ownership interests in Cactus Wellhead, LLC (“Cactus LLC”), the operating subsidiary of Cactus Inc. (the “CC Reorganization”). The purpose of the Merger was to effect the acquisition of the operations of FlexSteel Holdings, Inc. and its subsidiaries. FlexSteel Holdings, Inc. was a wholly-owned subsidiary of HighRidge prior to the Merger and was converted into a limited liability company, contributed from HighRidge to Cactus Companies as part of the CC Reorganization and is now named FlexSteel Holdings, LLC (“FlexSteel”). The results of operations of FlexSteel have been reflected in our accompanying condensed consolidated financial statements from the closing date of the acquisition. See Note 2 for additional information related to the acquisition. Following the acquisition of FlexSteel, we now operate in two business segments: Pressure Control and Spoolable Technologies. 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, 2023. 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 | 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Standards Not Yet Adopted In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, “Income Taxes (Topic 740).” The amendments in this ASU require entities to disclose on an annual basis specific categories in the income tax rate reconciliation and provide additional disclosures for reconciling items that meet a specified quantitative threshold. Entities will also be required to disclose annually income taxes paid disaggregated by federal, state and foreign taxes and the amount of income taxes paid by individual jurisdictions that meet a five percent or greater threshold of total income taxes paid net of refunds received. The ASU also adds certain disclosures in order to be consistent with U.S. Securities and Exchange Commission rules and removes certain disclosures that no longer are considered cost beneficial or relevant. The amendments in this ASU are to be applied on a prospective basis and will be effective for our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, with early adoption permitted. We are currently evaluating the impact the adoption of this new standard will have on our disclosures. In November 2023, the FASB issued ASU No. 2023-07, “Improvements to Reportable Segment Disclosures (Topic 280)” in order to require disclosure of incremental segment information on an annual and interim basis for all public entities. The ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items and interim disclosures of a reportable segment’s profit or loss and assets. The ASU is to be applied retrospectively to all prior periods presented in the financial statements and is effective for our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, with early adoption permitted. We are currently evaluating the impact the adoption of this new standard will have on our segment disclosures. |
FlexSteel Acquisition (Tables)
FlexSteel Acquisition (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Business Combination and Asset Acquisition [Abstract] | |
Summary of Purchase Price Consideration | The final purchase price consideration for the acquisition was $627.5 million and is summarized as follows: Purchase Price Consideration Cash consideration $ 621,505 Add: Contingent consideration (1) 5,960 Fair value of consideration transferred $ 627,465 (1) Represents the estimated fair value as of the acquisition date of the earn-out payment of up to $75.0 million of additional cash consideration if certain revenue targets are met by FlexSteel. The estimated fair value of the earn-out payment was determined using a Monte Carlo simulation valuation methodology based on probability-weighted performance projections and other inputs, including a discount rate. |
Summary of Preliminary Purchase Price Allocation | The following table provides the final allocation of the purchase price as of the acquisition date: Cash and cash equivalents $ 5,316 Receivables 58,002 Inventories 91,746 Prepaid expenses and other current assets 1,283 Property and equipment 206,928 Operating lease right-of-use assets 1,021 Identifiable intangible assets 200,300 Other noncurrent assets 5,666 Total assets acquired 570,262 Accounts payable (14,975) Accrued expenses and other current liabilities (26,827) Finance lease obligations (974) Operating lease liabilities (906) Deferred tax liabilities (94,319) Total liabilities assumed (138,001) Net assets acquired 432,261 Goodwill $ 195,204 |
Summary of Unaudited Proforma Results | The unaudited pro forma financial information is presented for informational purposes only and is neither indicative of the results of operations that would have occurred if the acquisition had taken place at the beginning of the period presented nor indicative of future operating results. Three Months Ended 2023 Revenues $ 281,784 Net Income attributable to Cactus, Inc. 40,803 |
Accounts Receivable and Allow_2
Accounts Receivable and Allowance for Credit Losses (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Receivables [Abstract] | |
Schedule of Rollforward of Allowance for Credit Losses | The following is a rollforward of our allowance for credit losses. Balance at Expense Write off Translation Adjustments Balance at Three Months Ended March 31, 2024 $ 3,642 $ 162 $ (1) $ — $ 3,803 Three Months Ended March 31, 2023 1,060 (376) (19) 2 667 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consist of the following: March 31, December 31, Raw materials $ 18,941 $ 22,373 Work-in-progress 13,330 11,471 Finished goods 171,778 171,781 $ 204,049 $ 205,625 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment Net | Property and equipment consists of the following: March 31, December 31, Land $ 16,442 $ 16,442 Buildings and improvements 132,091 131,974 Machinery and equipment 130,082 128,962 Reels and skids 16,124 16,181 Vehicles 37,657 36,552 Rental equipment 219,692 218,340 Furniture and fixtures 1,908 1,913 Computers and software 4,112 3,951 Gross property and equipment 558,108 554,315 Less: Accumulated depreciation (239,984) (231,594) Net property and equipment 318,124 322,721 Construction in progress 26,849 22,781 Total property and equipment, net $ 344,973 $ 345,502 |
Other Intangible Assets (Tables
Other Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Total Intangible Assets | The following table presents the detail of acquired intangible assets: March 31, 2024 December 31, 2023 Gross Cost Accumulated Amortization Net Cost Gross Cost Accumulated Amortization Net Cost Customer relationships $ 100,300 $ (7,244) $ 93,056 $ 100,300 $ (5,572) $ 94,728 Developed technology 77,000 (8,342) 68,658 77,000 (6,417) 70,583 Tradename 16,000 (1,733) 14,267 16,000 (1,333) 14,667 Backlog 7,000 (7,000) — 7,000 (7,000) — Total $ 200,300 $ (24,319) $ 175,981 $ 200,300 $ (20,322) $ 179,978 |
Summary of Future Amortization | Estimated future amortization expense is as follows: Remainder of 2024 $ 11,990 2025 15,987 2026 15,987 2027 15,987 2028 15,987 2029 15,987 Thereafter 84,056 Total $ 175,981 |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenues Disaggregated by Category | The following table presents our revenues disaggregated by category: Three Months Ended 2024 2023 Product revenue $ 207,511 76 % $ 159,510 70 % Rental revenue 23,943 8 % 27,817 12 % Field service and other revenue 42,669 16 % 41,078 18 % Total revenues $ 274,123 100 % $ 228,405 100 % |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Summary of Significant Assumptions to Determine Fair Value | The following table sets forth the range of inputs for the significant assumptions utilized to determine the fair value as of December 31, 2023: December 31, 2023 Risk-free interest rate 5.40% to 5.63% Expected revenue volatility 21.70% Revenue discount rate 10.02% to 10.23% Credit discount rate 9.85% |
Summary of Changes in Fair Value | The following table presents a summary of the changes in fair value of our liabilities measured using Level 3 inputs: Earn-out Opening Balance $ 5,960 Changes in fair value 14,850 Balance at December 31, 2023 $ 20,810 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
Summarized Financial Information by Segment | Financial information by business segment for three months ended March 31, 2024 and 2023 is summarized below. Three Months Ended 2024 2023 Revenue: Pressure Control $ 175,028 $ 194,655 Spoolable Technologies 99,095 33,750 Total revenues 274,123 228,405 Operating income: Pressure Control 51,675 63,171 Spoolable Technologies 16,393 249 Total segment operating income 68,068 63,420 Corporate and other expenses (1) (5,518) (13,732) Total operating income 62,550 49,688 Interest income, net 689 1,002 Other income, net — 3,538 Income before income taxes $ 63,239 $ 54,228 (1) Includes corporate and other costs not directly attributable to our reporting segments, such as corporate executive management and other administrative functions. These costs were previously included in the Pressure Control segment. The information for the three months ended March 31, 2023 has been recast to align with the presentation for the three months ended March 31, 2024. |
Earnings per Share (Tables)
Earnings per Share (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings per Share | The following table summarizes the basic and diluted earnings per share calculations: Three Months Ended 2024 2023 Numerator: Net income attributable to Cactus Inc.—basic $ 38,965 $ 42,894 Net income attributable to non-controlling interest (1) 8,241 7,312 Net income attributable to Cactus Inc.—diluted (1) $ 47,206 $ 50,206 Denominator: Weighted average Class A shares outstanding—basic 65,378 63,740 Effect of dilutive shares 14,178 15,415 Weighted average Class A shares outstanding—diluted 79,556 79,155 Earnings per Class A share—basic $ 0.60 $ 0.67 Earnings per Class A share—diluted (1) $ 0.59 $ 0.63 (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 26.0% for the three months ended March 31, 2024 and 24.5% for the three months ended March 31, 2023. |
Preparation of Interim Financ_3
Preparation of Interim Financial Statements and Other Items (Details) | 3 Months Ended | |
Mar. 31, 2024 segment $ / shares | Dec. 31, 2023 $ / shares | |
Organization and Nature of Operations | ||
Number of business segments | segment | 2 | |
Class A Common Stock | ||
Organization and Nature of Operations | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 |
FlexSteel Acquisition - Narrati
FlexSteel Acquisition - Narrative (Details) - USD ($) $ in Thousands | Feb. 28, 2023 | Mar. 31, 2024 | Dec. 31, 2023 |
Business Acquisition [Line Items] | |||
Earn-out liability | $ 34,114 | $ 20,810 | |
FlexSteel | |||
Business Acquisition [Line Items] | |||
Cash consideration | $ 621,505 | ||
Earn-out liability | $ 75,000 |
FlexSteel Acquisition - Summary
FlexSteel Acquisition - Summary of Purchase Price Consideration (Details) - USD ($) $ in Thousands | Feb. 28, 2023 | Mar. 31, 2024 | Dec. 31, 2023 |
Business Acquisition [Line Items] | |||
Earn-out liability | $ 34,114 | $ 20,810 | |
FlexSteel | |||
Business Acquisition [Line Items] | |||
Cash consideration | $ 621,505 | ||
Add: Contingent consideration | 5,960 | ||
Fair value of consideration transferred | 627,465 | ||
Earn-out liability | $ 75,000 |
FlexSteel Acquisition - Summa_2
FlexSteel Acquisition - Summary of Preliminary Purchase Price Allocation (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | Feb. 28, 2023 |
Business Acquisition [Line Items] | |||
Goodwill | $ 203,028 | $ 203,028 | |
FlexSteel | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 5,316 | ||
Receivables | 58,002 | ||
Inventories | 91,746 | ||
Prepaid expenses and other current assets | 1,283 | ||
Property and equipment | 206,928 | ||
Operating lease right-of-use assets | 1,021 | ||
Identifiable intangible assets | 200,300 | ||
Other noncurrent assets | 5,666 | ||
Total assets acquired | 570,262 | ||
Accounts payable | (14,975) | ||
Accrued expenses and other current liabilities | (26,827) | ||
Finance lease obligations | (974) | ||
Operating lease liabilities | (906) | ||
Deferred tax liabilities | (94,319) | ||
Total liabilities assumed | (138,001) | ||
Net assets acquired | 432,261 | ||
Goodwill | $ 195,204 |
FlexSteel Acquisition - Summa_3
FlexSteel Acquisition - Summary of Unadited Proforma Results (Details) - FlexSteel $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Business Acquisition [Line Items] | |
Revenues | $ 281,784 |
Net Income attributable to Cactus, Inc. | $ 40,803 |
Accounts Receivable and Allow_3
Accounts Receivable and Allowance for Credit Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Accounts Receivable | |||
Unbilled revenue | $ 31,700 | $ 26,800 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at Beginning of Period | 3,642 | $ 1,060 | |
Expense (Recovery) | 162 | (376) | |
Write off | (1) | (19) | |
Translation Adjustments | 0 | 2 | |
Balance at End of Period | $ 3,803 | $ 667 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Summary of inventories | ||
Raw materials | $ 18,941 | $ 22,373 |
Work-in-progress | 13,330 | 11,471 |
Finished goods | 171,778 | 171,781 |
Total inventory | $ 204,049 | $ 205,625 |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | $ 558,108 | $ 554,315 |
Less: Accumulated depreciation | (239,984) | (231,594) |
Net property and equipment | 318,124 | 322,721 |
Total property and equipment, net | 344,973 | 345,502 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | 16,442 | 16,442 |
Buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | 132,091 | 131,974 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | 130,082 | 128,962 |
Reels and skids | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | 16,124 | 16,181 |
Vehicles | ||
Property, Plant and Equipment [Line Items] | ||
Vehicles | 37,657 | 36,552 |
Rental equipment | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | 219,692 | 218,340 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | 1,908 | 1,913 |
Computers and software | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | 4,112 | 3,951 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Gross property and equipment | $ 26,849 | $ 22,781 |
Other Intangible Assets - Summa
Other Intangible Assets - Summary of Total Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Cost | $ 200,300 | $ 200,300 |
Accumulated Amortization | (24,319) | (20,322) |
Net Cost | 175,981 | 179,978 |
Customer relationships | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Cost | 100,300 | 100,300 |
Accumulated Amortization | (7,244) | (5,572) |
Net Cost | 93,056 | 94,728 |
Developed technology | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Cost | 77,000 | 77,000 |
Accumulated Amortization | (8,342) | (6,417) |
Net Cost | 68,658 | 70,583 |
Tradename | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Cost | 16,000 | 16,000 |
Accumulated Amortization | (1,733) | (1,333) |
Net Cost | 14,267 | 14,667 |
Backlog | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Cost | 7,000 | 7,000 |
Accumulated Amortization | (7,000) | (7,000) |
Net Cost | $ 0 | $ 0 |
Other Intangible Assets - Narra
Other Intangible Assets - Narrative (Details) - Identifiable Intangible Assets Acquired $ in Millions | 3 Months Ended |
Mar. 31, 2024 USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |
Amortization period | 12 years |
Amortization of intangible assets | $ 4 |
Other Intangible Assets - Sum_2
Other Intangible Assets - Summary of Future Amortization (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2024 | $ 11,990 | |
2025 | 15,987 | |
2026 | 15,987 | |
2027 | 15,987 | |
2028 | 15,987 | |
2029 | 15,987 | |
Thereafter | 84,056 | |
Net Cost | $ 175,981 | $ 179,978 |
Debt - Narrative (Details)
Debt - Narrative (Details) | 1 Months Ended | 3 Months Ended | ||||
Mar. 31, 2024 USD ($) | Mar. 31, 2024 USD ($) | Dec. 31, 2023 USD ($) | Feb. 28, 2023 USD ($) | Jul. 25, 2022 USD ($) | Aug. 21, 2018 USD ($) | |
Long-term Debt | ||||||
Debt outstanding | $ 0 | $ 0 | $ 0 | |||
Letters of credit outstanding | $ 1,100,000 | $ 1,100,000 | ||||
Applicable margin rate | 0.71513% | |||||
Secured Debt | Amended ABL Credit Facility | ||||||
Long-term Debt | ||||||
Face amount | $ 125,000,000 | |||||
ABL Credit Facility | Line of Credit | Amended ABL Credit Facility | ||||||
Long-term Debt | ||||||
Borrowing capacity | 225,000,000 | |||||
ABL Credit Facility | Line of Credit | The Credit Facility | ||||||
Long-term Debt | ||||||
Debt gross | 30,000,000 | |||||
Secured Debt | Line of Credit | The Credit Facility | ||||||
Long-term Debt | ||||||
Debt gross | 125,000,000 | |||||
Letters of credit | Line of Credit | Amended ABL Credit Facility | ||||||
Long-term Debt | ||||||
Borrowing capacity | 20,000,000 | |||||
Cactus LLC | Line of Credit | ||||||
Long-term Debt | ||||||
Borrowing capacity | $ 15,000,000 | |||||
Cactus LLC | ABL Credit Facility | Line of Credit | ||||||
Long-term Debt | ||||||
Term | 5 years | |||||
Borrowing capacity | $ 80,000,000 | $ 75,000,000 | ||||
Additional commitments | 50,000,000 | |||||
Maximum borrowing capacity | $ 275,000,000 | |||||
Subsidiaries | ABL Credit Facility | ||||||
Long-term Debt | ||||||
Fixed charge coverage ratio | 1 | |||||
Subsidiaries | ABL Credit Facility | Base Rate | ||||||
Long-term Debt | ||||||
Applicable margin rate | 2.50% | |||||
Subsidiaries | ABL Credit Facility | Secured Overnight Financing Rate | ||||||
Long-term Debt | ||||||
Applicable margin rate | 3.50% | |||||
Subsidiaries | ABL Credit Facility | Minimum | ||||||
Long-term Debt | ||||||
Commitment fee | 0.25% | |||||
Subsidiaries | ABL Credit Facility | Minimum | Base Rate | ||||||
Long-term Debt | ||||||
Applicable margin rate | 0% | |||||
Subsidiaries | ABL Credit Facility | Minimum | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | ||||||
Long-term Debt | ||||||
Applicable margin rate | 1.25% | |||||
Subsidiaries | ABL Credit Facility | Maximum | Base Rate | ||||||
Long-term Debt | ||||||
Applicable margin rate | 0.50% | |||||
Subsidiaries | ABL Credit Facility | Maximum | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | ||||||
Long-term Debt | ||||||
Applicable margin rate | 1.75% | |||||
Subsidiaries | ABL Credit Facility | Line of Credit | Credit Agreement | ||||||
Long-term Debt | ||||||
Leverage ratio | 2.50 | 2.50 |
Revenue - Schedule of Revenues
Revenue - Schedule of Revenues Disaggregated by Category (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 274,123 | $ 228,405 |
Revenue as a percentage | 100% | 100% |
Product revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 207,511 | $ 159,510 |
Revenue as a percentage | 76% | 70% |
Rental revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 23,943 | $ 27,817 |
Revenue as a percentage | 8% | 12% |
Field service and other revenue | ||
Disaggregation of Revenue [Line Items] | ||
Total revenues | $ 42,669 | $ 41,078 |
Revenue as a percentage | 16% | 18% |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Contract Balances | ||
Deferred revenue | $ 7.9 | $ 8.1 |
Tax Receivable Agreement ("TR_2
Tax Receivable Agreement ("TRA") (Details) - USD ($) $ in Thousands | 1 Months Ended | ||
Mar. 31, 2024 | Feb. 28, 2018 | Dec. 31, 2023 | |
Tax Receivable Agreement | |||
Tax savings payable to TRA Holders | 85% | ||
Tax savings benefit retained by Cactus Inc | 15% | ||
Total TRA liability | $ 270,900 | ||
Current portion of liability related to tax receivable agreement | $ 20,855 | $ 20,855 | |
Applicable margin rate | 0.71513% |
Equity (Details)
Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | 74 Months Ended | ||
Jan. 31, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | Mar. 31, 2024 | Jun. 06, 2023 | |
Equity | ||||||
Issuances of common stock | $ 169,369 | |||||
CW Unit redemptions (in shares) | 0 | 0 | ||||
Cash dividend declared (in dollars per share) | $ 0.12 | $ 0.11 | ||||
Share repurchases | $ 3,372 | |||||
Pro rata distributions made to other members | 1,684 | $ 1,645 | ||||
Share Repurchase Program | ||||||
Equity | ||||||
Authorized amount of stock repurchase | $ 150,000 | |||||
Additional Paid-In Capital | ||||||
Equity | ||||||
Costs associated with stock issuance | $ 2,200 | |||||
Issuances of common stock | $ 143,302 | |||||
Share repurchases | $ 2,996 | |||||
Common stock | Share Repurchase Program | ||||||
Equity | ||||||
Common stock purchased and retired (in shares) | 86,599 | |||||
Share repurchases | $ 3,400 | |||||
Average stock repurchased price (in dollars per share) | $ 38.92 | |||||
Common stock authorized repurchase amount | $ 146,300 | $ 146,300 | ||||
FlexSteel | Key Employee | ||||||
Equity | ||||||
Issuance of common stock (in shares) | 128,150 | |||||
Issuances of common stock | $ 6,500 | |||||
Vesting period | 1 year | |||||
Cactus Companies | ||||||
Equity | ||||||
Ownership interest | 82.40% | |||||
Cactus LLC | ||||||
Equity | ||||||
Ownership interest | 82.30% | |||||
Cactus Inc | ||||||
Equity | ||||||
Cash distributions to unit holders | $ 7,800 | $ 7,100 | ||||
CC Unit Holders other than Cactus, Inc. | ||||||
Equity | ||||||
Pro rata distributions made to other members | $ 1,700 | $ 1,600 | ||||
Class A Common Stock | ||||||
Equity | ||||||
Common stock, shares outstanding (in shares) | 65,518,000 | 65,409,000 | 65,518,000 | |||
Shares outstanding, percentage of total voting power | 82.40% | 82.40% | ||||
Cash dividend declared (in dollars per share) | $ 0.12 | $ 0.11 | ||||
Dividends declared | $ 8,000 | $ 7,100 | ||||
Dividends paid | 8,100 | $ 7,400 | ||||
Class A Common Stock | Common stock | ||||||
Equity | ||||||
Issuance of common stock (in shares) | 3,352,000 | |||||
Issuances of common stock | $ 34 | |||||
Share repurchases | $ 1 | |||||
Class A Common Stock | Additional Offering | ||||||
Equity | ||||||
Shares sold (in shares) | 3,224,300 | |||||
Price of stock (in dollars per share) | $ 51.36 | |||||
Cash consideration | $ 165,600 | |||||
Underwriting discounts | $ 6,900 | |||||
Class A Common Stock | Cactus Companies LLC Agreement | ||||||
Equity | ||||||
CW Unit redemptions (in shares) | 46,500,000 | |||||
Class B Common Stock | ||||||
Equity | ||||||
Common stock, shares outstanding (in shares) | 14,034,000 | 14,034,000 | 14,034,000 | |||
Shares outstanding, percentage of total voting power | 17.60% | 17.60% | ||||
Class B Common Stock | Cactus Companies | ||||||
Equity | ||||||
Shares owned per units held (in shares) | 1 | 1 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | Feb. 28, 2023 |
Fair Value, Inputs, Level 3 | Earn Out Liability | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Liability value | $ 20,800 | $ 20,810 | $ 5,960 |
Fair Value, Inputs, Level 2 | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Foreign currency forwards | $ 100 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Significant Assumptions to Determine Fair Value (Details) - Earn Out Liability | Dec. 31, 2023 |
Risk-free interest rate | Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement inputs | 0.0540 |
Risk-free interest rate | Maximum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement inputs | 0.0563 |
Expected revenue volatility | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement inputs | 0.2170 |
Revenue discount rate | Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement inputs | 0.1002 |
Revenue discount rate | Maximum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement inputs | 0.1023 |
Credit discount rate | Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement inputs | 0.0985 |
Fair Value Measurements - Sum_2
Fair Value Measurements - Summary of Changes in Fair Value (Details) - Fair Value, Inputs, Level 3 - Earn Out Liability $ in Thousands | 10 Months Ended |
Dec. 31, 2023 USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Changes in fair value | $ 14,850 |
Balance at December 31, 2023 | $ 20,810 |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Details) | 3 Months Ended |
Mar. 31, 2024 segment | |
Segment Reporting [Abstract] | |
Number of reporting segments | 2 |
Segment Reporting - Summarized
Segment Reporting - Summarized Financial Information by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Segment Reporting Information [Line Items] | ||
Total revenues | $ 274,123 | $ 228,405 |
Total segment operating income | 62,550 | 49,688 |
Interest income, net | 689 | 1,002 |
Other income, net | 0 | 3,538 |
Income before income taxes | 63,239 | 54,228 |
Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total segment operating income | 68,068 | 63,420 |
Corporate, Non-Segment | ||
Segment Reporting Information [Line Items] | ||
Total segment operating income | (5,518) | (13,732) |
Pressure Control | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 175,028 | 194,655 |
Pressure Control | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total segment operating income | 51,675 | 63,171 |
Spoolable Technologies | ||
Segment Reporting Information [Line Items] | ||
Total revenues | 99,095 | 33,750 |
Spoolable Technologies | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Total segment operating income | $ 16,393 | $ 249 |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Numerator: | ||
Net income attributable to Cactus Inc. | $ 38,965 | $ 42,894 |
Net income attributable to non-controlling interest | 8,241 | 7,312 |
Net income attributable to Cactus Inc. - diluted | $ 47,206 | $ 50,206 |
Denominator: | ||
Effect of dilutive shares (in shares) | 14,178 | 15,415 |
Corporate effective income tax rate, if-converted method | 26% | 24.50% |
Class A Common Stock | ||
Denominator: | ||
Weighted average Class A Shares Outstanding - basic (in shares) | 65,378 | 63,740 |
Weighted average Class A shares outstanding - diluted (in shares) | 79,556 | 79,155 |
Earnings per Class A share - basic (in dollars per share) | $ 0.60 | $ 0.67 |
Earnings per Class A share - diluted (in dollars per share) | $ 0.59 | $ 0.63 |