Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 08, 2022 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2022 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | ACDC | |
Entity Registrant Name | ProFrac Holding Corp. | |
Entity Central Index Key | 0001881487 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Shell Company | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity File Number | 001-41388 | |
Entity Current Reporting Status | No | |
Entity Tax Identification Number | 87-2424964 | |
Entity Address, Address Line One | 333 Shops Boulevard | |
Entity Address, Address Line Two | Suite 301 | |
Entity Address, City or Town | Willow Park | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 76087 | |
City Area Code | 254 | |
Local Phone Number | 776-3722 | |
Entity Interactive Data Current | Yes | |
Title of 12(b) Security | Class A common stock, par value $0.01 per share | |
Security Exchange Name | NASDAQ | |
Entity Incorporation, State or Country Code | DE | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Class A Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 53,958,894 | |
Class B Common Stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 101,133,201 | |
Warrants | ||
Document Information [Line Items] | ||
Trading Symbol | ACDCW | |
Title of 12(b) Security | Warrants, each 124.777 warrants exercisable for one share of Class A common stock at an exercise price of $717.47 per share | |
Security Exchange Name | NASDAQ |
Consolidated balance sheets (Un
Consolidated balance sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 64,678 | $ 5,376 |
Accounts receivable, net | 501,337 | 161,632 |
Accounts receivable—related party | 4,510 | 4,515 |
Prepaid expenses, and other current assets | 25,065 | 6,213 |
Assets held for sale | 1,805 | |
Inventories | 238,794 | 73,942 |
Total current assets | 836,189 | 251,678 |
Property, plant, and equipment | 1,454,010 | 827,865 |
Accumulated depreciation and depletion | (632,801) | (464,178) |
Property, plant, and equipment, net | 821,209 | 363,687 |
Operating lease right-of-use assets | 78,569 | |
Deferred tax assets | 2,033 | |
Investments | 56,753 | 4,244 |
Intangible assets, net | 34,930 | 27,816 |
Goodwill | 97,573 | |
Other assets | 52,028 | 17,145 |
Total assets | 1,979,284 | 664,570 |
Current liabilities: | ||
Accounts payable | 209,537 | 121,070 |
Accounts payable—related party | 34,911 | 21,275 |
Current portion of operating lease liabilities | 9,532 | |
Accrued expenses | 194,321 | 38,149 |
Other current liabilities | 36,446 | 34,400 |
Current portion of long-term debt | 60,541 | 31,793 |
Total current liabilities | 545,288 | 246,687 |
Long-term debt | 484,228 | 235,128 |
Long-term debt—related party | 34,645 | |
Operating lease liabilities | 73,180 | |
Other liabilities | 17,320 | |
Total liabilities | 1,120,016 | 516,460 |
Commitments and contingencies (Note 17) | ||
Redeemable noncontrolling interest | 1,644,426 | |
Stockholders' and members' equity | ||
Members' equity | 147,015 | |
Preferred stock, $0.01 par value, 50,000,000 authorized, none issued and outstanding | ||
Accumulated deficit | (868,409) | |
Accumulated other comprehensive (loss) income | 9 | 56 |
Total stockholders' and members' (deficit) equity attributable to ProFrac Holding Corp. | (866,977) | 147,071 |
Noncontrolling interests | 81,819 | 1,039 |
Total stockholders' and members' (deficit) equity | (785,158) | 148,110 |
Total liabilities, redeemable noncontrollable interest, and stockholders' and members' (deficit) equity | 1,979,284 | $ 664,570 |
Common Class A | ||
Stockholders' and members' equity | ||
Common stock, value | 412 | |
Common Class B | ||
Stockholders' and members' equity | ||
Common stock, value | $ 1,011 |
Consolidated balance sheets (Pa
Consolidated balance sheets (Parenthetical) (Unaudited) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Preferred shares, par value | $ 0.01 | $ 0.01 |
Preferred shares, authorized | 50,000,000 | 50,000,000 |
Preferred shares, issued | 0 | 0 |
Preferred shares, outstanding | 0 | 0 |
Common Class A | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 600,000,000 | 600,000,000 |
Common stock, shares, issued | 41,239,957 | 0 |
Common stock, shares, outstanding | 41,239,957 | 0 |
Common Class B | ||
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 400,000,000 | 400,000,000 |
Common stock, shares, issued | 101,133,201 | 0 |
Common stock, shares, outstanding | 101,133,201 | 0 |
Consolidated statements of oper
Consolidated statements of operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Revenues | $ 696,730 | $ 195,931 | $ 1,631,554 | $ 520,336 |
Operating costs and expenses: | ||||
Cost of revenues, exclusive of depreciation, depletion and amortization | 388,068 | 144,163 | 961,267 | 389,177 |
Depreciation, depletion and amortization | 68,758 | 35,241 | 177,038 | 105,606 |
Loss on disposal of assets, net | 667 | 3,397 | 2,656 | 7,472 |
Selling, general, and administrative | 70,287 | 20,047 | 191,962 | 47,919 |
Total operating costs and expenses | 527,780 | 202,848 | 1,332,923 | 550,174 |
Operating income (loss) | 168,950 | (6,917) | 298,631 | (29,838) |
Other (expense) income: | ||||
Interest expense, net | (16,261) | (6,896) | (38,984) | (19,118) |
Loss on extinguishment of debt | (242) | (17,337) | ||
Other (expense) income, net | (928) | (92) | 8,292 | 148 |
Income (loss) before income tax provision | 151,519 | (13,905) | 250,602 | (48,808) |
Income tax (provision) benefit | (8,157) | (170) | (13,021) | 138 |
Net income (loss) | 143,362 | (14,075) | 237,581 | (48,670) |
Less: net (income) loss attributable to ProFrac Predecessor | 14,033 | (79,867) | 48,509 | |
Less: net loss attributable to noncontrolling interests | 11,751 | $ 42 | 20,039 | $ 161 |
Less: net income attributable to redeemable noncontrolling interests | (110,183) | (126,265) | ||
Net income attributable to ProFrac Holding Corp. | $ 44,930 | $ 51,488 | ||
Basic earnings per Class A share | $ 1.09 | $ 1.26 | ||
Diluted earnings per Class A share | $ 1.09 | $ 1.26 | ||
Weighted average shares used in computing basic earnings per Class A share | 41,239 | 40,846 | ||
Weighted average shares used in computing diluted earnings per Class A share | 41,349 | 40,927 |
Consolidated statements of comp
Consolidated statements of comprehensive income (loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 143,362 | $ (14,075) | $ 237,581 | $ (48,670) |
Foreign currency translation adjustments | 207 | 45 | 84 | 55 |
Comprehensive income (loss) | 143,569 | (14,030) | 237,665 | (48,615) |
Less: comprehensive (income) loss attributable to ProFrac Predecessor | 14,002 | (79,765) | 48,468 | |
Less: comprehensive loss attributable to noncontrolling interest | 11,699 | $ 28 | 20,018 | $ 147 |
Less: comprehensive income attributable to redeemable noncontrolling interest | (110,293) | (126,375) | ||
Comprehensive income attributable to ProFrac Holding Corp. | $ 44,975 | $ 51,543 |
Consolidated statements of chan
Consolidated statements of changes in equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | IPO | Common Stock Common Class A | Common Stock Common Class B | Common Stock IPO Common Class A | Additional Paid in Capital | Additional Paid in Capital IPO | Retained Earnings | Retained Earnings IPO | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interest | Members' Equity |
Beginning balance at Dec. 31, 2020 | $ 176,812 | $ 1,785 | $ 175,027 | |||||||||
Net income (loss) | (25,989) | 9 | (25,998) | |||||||||
Foreign currency translation | 6 | $ 6 | ||||||||||
Noncontrolling interest of acquired business | 1,228 | 1,228 | ||||||||||
Ending balance at Mar. 31, 2021 | 152,057 | 6 | 3,022 | 149,029 | ||||||||
Beginning balance at Dec. 31, 2020 | 176,812 | 1,785 | 175,027 | |||||||||
Net income (loss) | (48,670) | |||||||||||
Foreign currency translation | 55 | |||||||||||
Ending balance at Sep. 30, 2021 | 129,427 | 41 | 1,083 | 128,303 | ||||||||
Beginning balance at Mar. 31, 2021 | 152,057 | 6 | 3,022 | 149,029 | ||||||||
Net income (loss) | (8,606) | (128) | (8,478) | |||||||||
Foreign currency translation | 4 | 4 | ||||||||||
Ending balance at Jun. 30, 2021 | 143,455 | 10 | 2,894 | 140,551 | ||||||||
Net income (loss) | (14,075) | (42) | (14,033) | |||||||||
Foreign currency translation | 45 | 31 | 14 | |||||||||
Acquisition of Noncontrolling Interests | 2 | (1,783) | 1,785 | |||||||||
Ending balance at Sep. 30, 2021 | 129,427 | 41 | 1,083 | 128,303 | ||||||||
Beginning balance at Dec. 31, 2021 | 148,110 | 56 | 1,039 | 147,015 | ||||||||
Net income (loss) | 24,126 | 416 | 23,710 | |||||||||
Member contributions | 5,000 | 5,000 | ||||||||||
Deemed distribution | (3,664) | (3,664) | ||||||||||
THRC related equity | 72,931 | 72,931 | ||||||||||
Foreign currency translation | (136) | (102) | (34) | |||||||||
Ending balance at Mar. 31, 2022 | 246,367 | (46) | 1,421 | 244,992 | ||||||||
Beginning balance at Dec. 31, 2021 | 148,110 | 56 | 1,039 | 147,015 | ||||||||
Ending balance at Jun. 30, 2022 | (1,316,530) | $ 412 | $ 1,011 | $ (1,410,780) | (36) | 92,863 | ||||||
Ending balance, Shares at Jun. 30, 2022 | 41,237 | 101,133 | ||||||||||
Beginning balance at Dec. 31, 2021 | 148,110 | 56 | 1,039 | 147,015 | ||||||||
Net income (loss) | 237,581 | |||||||||||
Foreign currency translation | 84 | |||||||||||
Ending balance at Sep. 30, 2022 | (785,158) | $ 412 | $ 1,011 | (868,409) | 9 | 81,819 | ||||||
Ending balance, Shares at Sep. 30, 2022 | 41,240 | 101,133 | ||||||||||
Beginning balance at Mar. 31, 2022 | 246,367 | (46) | 1,421 | 244,992 | ||||||||
Net income prior to corporate reorganization | 56,111 | (46) | 56,157 | |||||||||
Issuance of shares, Value | 1,011 | $ 227,730 | $ 1,011 | $ 182 | $ 227,548 | |||||||
Issuance of shares, Shares | 101,133 | 18,228 | ||||||||||
Effect of corporate reorganization and reclassification to redeemable noncontrolling interest | (382,050) | $ 209 | $ (81,110) | $ (301,149) | ||||||||
Effect of corporate reorganization and reclassification to redeemable noncontrolling interest, Shares | 20,895 | |||||||||||
Class A shares issued to settle asset purchase | 16,696 | $ 21 | 16,675 | |||||||||
Class A shares issued to settle asset purchase liability, Shares | 2,114 | |||||||||||
Net income after corporate reorganization | (2,100) | 6,558 | (8,658) | |||||||||
Recognition of Flotek noncontrolling interest | 99,617 | 99,617 | ||||||||||
Stock-based compensation | 795 | 269 | 526 | |||||||||
Stock-based compensation related to deemed contribution | 11,252 | 11,252 | ||||||||||
Additional paid-in capital related to tax receivable agreement | 609 | 609 | ||||||||||
Foreign currency translation | 13 | 10 | 3 | |||||||||
Adjustment of redeemable noncontrolling interest to redemption amount | (154,233) | $ (1,438,348) | (28,805) | $ (146,438) | (125,428) | $ (1,291,910) | ||||||
Ending balance at Jun. 30, 2022 | (1,316,530) | $ 412 | $ 1,011 | (1,410,780) | (36) | 92,863 | ||||||
Ending balance, Shares at Jun. 30, 2022 | 41,237 | 101,133 | ||||||||||
Net income (loss) | 143,362 | 44,930 | (11,751) | |||||||||
Net (loss) income | 33,179 | |||||||||||
Stock-based compensation | 1,253 | 598 | 655 | |||||||||
Stock-based compensation related to deemed contribution | 2,957 | 2,957 | ||||||||||
Foreign currency translation | 97 | |||||||||||
Additional paid-in capital related to tax receivable agreement | 7 | 7 | ||||||||||
Foreign currency translation | 207 | 45 | 52 | |||||||||
Other | 79 | 79 | ||||||||||
Other , Shares | 3 | |||||||||||
Adjustment of redeemable noncontrolling interest to redemption amount | 493,800 | $ (3,641) | 497,441 | |||||||||
Ending balance at Sep. 30, 2022 | $ (785,158) | $ 412 | $ 1,011 | $ (868,409) | $ 9 | $ 81,819 | ||||||
Ending balance, Shares at Sep. 30, 2022 | 41,240 | 101,133 |
Consolidated statements of cash
Consolidated statements of cash flow (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 237,581 | $ (48,670) |
Adjustments to reconcile net income (loss) to cash provided by operating activities: | ||
Depreciation, depletion and amortization | 177,038 | 105,606 |
Stock-based compensation | 53,230 | |
Loss on disposal of assets, net | 2,656 | 7,472 |
Non-cash loss on extinguishment of debt | 10,472 | |
Amortization of debt issuance costs | 4,683 | 1,847 |
Bad debt expense, net of recoveries | 5 | 2,562 |
Deferred tax expense | 2,357 | |
Unrealized gain on investments, net | (8,526) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (220,467) | (31,396) |
Inventories | (107,150) | (14,525) |
Prepaid expenses and other assets | (18,551) | (1,223) |
Accounts payable | 6,332 | 4,823 |
Accrued expenses | 111,233 | 11,511 |
Deferred revenues and other liabilities | 5,770 | (317) |
Net cash provided by operating activities | 256,663 | 37,690 |
Cash flows from investing activities: | ||
Investment in property, plant & equipment | (239,477) | (70,585) |
Proceeds from sale of assets | 46,687 | 17,487 |
Acquisitions, net of cash acquired | (354,927) | (2,430) |
Investment in preferred shares of BPC | (47,202) | |
Initial investment in Flotek | (10,000) | |
Other investments | (24,839) | |
Net cash used in investing activities | (629,758) | (55,528) |
Cash flows from financing activities: | ||
Proceeds from issuance of long-term debt | 818,758 | 160,230 |
Repayments of long-term debt | (515,780) | (138,887) |
Borrowings from revolving credit agreements | 253,683 | 29,500 |
Repayments to revolving credit agreements | (322,683) | (18,500) |
Payment of debt issuance costs | (33,260) | (1,090) |
Member contribution | 5,000 | |
Proceeds from issuance of common stock | 329,118 | |
Payment of THRC related equity | (72,931) | |
Payment of common stock issuance costs | (27,444) | |
Net cash provided by financing activities | 434,461 | 31,253 |
Net increase in cash, cash equivalents, and restricted cash | 61,366 | 13,415 |
Cash, cash equivalents, and restricted cash beginning of period | 5,376 | 2,952 |
Cash, cash equivalents, and restricted cash end of period | 66,742 | 16,367 |
Supplemental cash flow information: | ||
Cash payments for interest | 22,239 | 17,311 |
Cash payments for taxes | 459 | 110 |
Non-cash investing and financing activities: | ||
Capital expenditures included in accounts payable | 26,478 | $ 7,837 |
Operating lease liabilities incurred from obtaining right-of-use-assets | $ 45,412 |
Organization and description of
Organization and description of business | 9 Months Ended |
Sep. 30, 2022 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and description of business | 1. Organization and description of business ProFrac Holding Corp. (“ProFrac Corp.”) and its consolidated subsidiaries, including ProFrac Holdings, LLC (“ProFrac LLC”), is a vertically integrated and innovation-driven energy services company providing hydraulic fracturing, completion services and other complementary products and services to leading upstream oil and gas companies engaged in the exploration and production (“E&P”) of North American unconventional oil and natural gas resources. The Company operates in three business segments: stimulation services, manufacturing, and proppant production. Company Formation ProFrac Corp. was incorporated as a Delaware corporation on August 17, 2021, to become a holding corporation for ProFrac LLC and its subsidiaries upon completion of a corporate reorganization in conjunction with a planned initial public offering (“IPO”). On May 12, 2022, ProFrac Corp. completed its IPO and corporate reorganization and became the managing member of ProFrac LLC. The unaudited consolidated financial statements presented herein are those of ProFrac Corp. subsequent to the corporate reorganization on May 12, 2022, and ProFrac LLC before that date. In these notes to the unaudited consolidated financial statements, ProFrac Corp. and ProFrac LLC together are also referred to as “we,” “us,” “our,” or the “Company” and ProFrac LLC is also referred to as “ProFrac Predecessor.” For all periods presented, the unaudited consolidated financial statements presented herein include the controlled subsidiaries of ProFrac LLC, which include Best Pump & Flow LP (“Best Flow”) and Alpine Silica, LLC (“Alpine”). Prior to December 21, 2021, Dan Wilks and Farris Wilks (or entities they control) (collectively, the “Wilks”) held a controlling interest in each of ProFrac LLC, Best Flow and Alpine. Historical periods for ProFrac Predecessor had been presented on a consolidated and combined basis given the common control ownership by the Wilks. On December 21, 2021, all of the then-outstanding membership interests in Best Flow and Alpine were contributed to ProFrac LLC in exchange for membership interests in ProFrac LLC. Accordingly, the results for the three and nine months ended September 30, 2021 have been retrospectively adjusted to present the operations of ProFrac LLC, Best Flow and Alpine on a combined basis. The acquisitions of Best Flow and Alpine have been accounted for in a manner consistent with the pooling of interest method of accounting, as the transaction was a combination of entities under common control. Under this method of accounting, the statements of operations, comprehensive income, equity and cash flows have been adjusted to include all activities of the commonly controlled groups for all periods in which common control existed. Initial Public Offering On May 12, 2022, ProFrac Corp. completed its IPO of 16,000,000 shares of its Class A common stock, par value $0.01 per share (the "Class A Common Stock") at a public offering price of $18.00 per share. generated combined net proceeds – The Company used the remaining proceeds (i) to pay down $143.8 million of the outstanding borrowings under the New Term Loan Credit Facility (as defined herein) (ii) to fully pay the $22.0 million of the outstanding borrowings of the Backstop Note (as defined herein) (iii) pay down $22.0 million of the outstanding borrowings of the Closing Date Note (as defined herein) (iv) to pay down $20.8 million of the outstanding borrowings of the Equify Bridge Note (as defined herein) and (v) with the remaining proceeds to be used for general corporate uses and additional repayment of debt. Redeemable Noncontrolling Interests ProFrac Corp’s only material asset is an equity interest consisting of units representing limited liability company interests in ProFrac LLC (“PFH Units”). As the sole managing member of ProFrac LLC, ProFrac Corp. operates and controls all of the business and affairs of ProFrac LLC and conducts its business through ProFrac LLC and its subsidiaries. As a result, ProFrac Corp. consolidates the financial results of ProFrac LLC and its subsidiaries and reports a noncontrolling interest related to the portion of PFH Units not owned by ProFrac Corp., which reduces net income attributable to holders of ProFrac Corp.’s Class A common stock. The holders of PFH Units not owned by ProFrac Corp. also hold shares of ProFrac Corp.’s Class B common stock, par value $0.01 per share (the “Class B Common Stock”) such that a single share of Class B Common Stock is issued for each PFH Unit not owned by ProFrac Corp. The holders of PFH Units not owned by ProFrac Corp. may redeem all or a portion of their PFH Units, together with a corresponding number of shares of Class B Common Stock, for either shares of Class A Common Stock or an approximately equivalent amount of cash, at the election of the Company. In connection with the exercise of such redemption, a corresponding number of shares of Class B Common Stock will be cancelled. The redemption election is not considered to be within the control of the Company because the holders of Class B Common Stock and their affiliates control the Company through direct representation on ProFrac Corp.’s Board of Directors. As a result, we present the noncontrolling interests in ProFrac LLC as redeemable noncontrolling interests outside of permanent equity. From January 1, 2022 through September 30, 2022, we recorded adjustments to the value of our redeemable noncontrolling interests as shown below: Redeemable Noncontrolling Interests (in thousands) 2022 Balance as of January 1, 2022 $ — Effect of corporate reorganization and reclassification to redeemable noncontrolling interest 382,050 Adjustment of redeemable noncontrolling interest to redemption amount at IPO (1) 1,438,348 Class A Common Stock issued to settle asset purchase 21,361 Net income after corporate reorganization 16,082 Stock-based compensation 660 Stock-based compensation related to deemed contribution 27,597 Accrued distribution related to income taxes (15,644 ) Adjustment of redeemable noncontrolling interest to redemption amount (2) 154,233 Balance as of June 30, 2022 $ 2,024,687 Net income 110,183 Stock-based compensation 1,465 Stock-based compensation related to deemed contribution 7,251 Foreign currency translation adjustments 110 Change in accrued distribution related to income taxes (5,470 ) Adjustment of redeemable noncontrolling interest to redemption amount (3) (493,800 ) Balance as of September 30, 2022 $ 1,644,426 (1) Based on 101,133,201 shares of Class B Common Stock outstanding and the $18.00 per share IPO price. (2) Based on 101,133,201 shares of Class B Common Stock outstanding and the 10-day VWAP of Class A Common Stock of $20.02 at June 30, 2022. (3) Based on 101,133,201 shares of Class B Common Stock outstanding and the 10-day VWAP of Class A Common Stock of $16.26 at September 30, 2022. As of September 30, 2022, ProFrac Corp. owned 29.0% of ProFrac LLC with the remaining 71.0% owned directly by other PFH Unit holders. As of September 30, 2022, ProFrac Corp. had outstanding 41.2 million shares of Class A Common Stock (representing approximately 29.0% of the total voting power) and 101.1 million shares of Class B Common Stock (representing approximately 71.0% of the total voting power). |
Summary of significant accounti
Summary of significant accounting policies | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of significant accounting policies | 2. Summary of significant accounting Basis of presentation The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial reporting and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2021 included within the Company’s final prospectus filed with the SEC on May 16, 2022, pursuant to Rule 424(b) under the Securities Act. The consolidated financial statements include the accounts of the Company and all majority-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. In our opinion, all adjustments considered necessary for a fair statement have been included in the accompanying unaudited financial statements. Operating results for the three and nine months ended September 30, 2022, are not necessarily indicative of the results that may be expected for the full year ending December 31, 2022. The December 31, 2021, balance sheet information has been derived from the 2021 audited financial statements of ProFrac Predecessor. Use of estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect (1) the reported amounts of assets and liabilities and (2) the reported amounts of revenue and expenses during the reporting period. We base these estimates on historical results and various other assumptions believed to be reasonable, all of which form the basis for making estimates concerning the carrying values of assets and liabilities that are not readily available from other sources. Leases The Company determines if an arrangement is a lease at inception of the arrangement. To the extent that we determine an arrangement represents a lease, we classify that lease as an operating lease or a finance lease. We capitalize operating and finance leases on our consolidated balance sheets through a right-of-use (“ROU”) asset and a corresponding lease liability. ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. See Note 12 – Leases for additional information. Operating and finance lease ROU assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term. Lease expense for operating leases is recognized on a straight-line basis over the lease term. Revenue recognition The Company’s products and services are sold based upon contracts with customers. The Company recognizes revenue as it satisfies performance obligations by transferring control over a service or product to a customer. Payment terms are specified in each customer agreement and are typically a specific number of days following satisfaction of the performance obligation. The following are descriptions of the principal activities of each reportable segment from which the Company generates its revenue. Stimulation services. We generate revenue through the provision of hydraulic fracturing services, which involves the injection of water, sand and chemicals under high pressure into formations to optimize hydrocarbon flow paths during the completion phase of wellbores. Our contracts with customers are short term in nature, typically less than four weeks, and have a single performance obligation, which is the contracted total stages, satisfied over time. Once a stage has been completed, a field ticket is created which includes charges for services performed and any inputs consumed during the service. The signing of the field ticket by a customer representative represents their acceptance of the service and agreement to the amounts to which the Company has the right to invoice and recognize as revenue. We believe that recognizing revenue based on actual stages completed, upon receipt of a signed field ticket, appropriately depicts how our hydraulic fracturing services are transferred to our customers over time. Manufacturing. We generate revenue through sales of equipment used to perform oilfield services. The performance obligation is satisfied and revenues are recognized at the point-in-time that control of goods are transferred to the customer, generally upon shipment from our manufacturing facility. Payment terms are specified in each customer agreement and are typically a specific number of days following satisfaction of the performance obligation. Proppant production. We generate revenue through the sale of frac sand to oilfield service providers and E&P companies. The performance obligation is satisfied and revenue is recognized at the point-in-time that control of the product is transferred to the customer, generally upon shipment from our facility. We charge our customers on a per-ton basis at current market prices. Payment terms are specified in each customer agreement and are typically a specific number of days following satisfaction of the performance obligation. Taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and are therefore excluded from revenues in the consolidated statements of operations . Business Combinations Business combinations are accounted for under the acquisition method of accounting. Under this method, the assets acquired and liabilities assumed are recognized at their respective fair values as of the date of acquisition. The excess, if any, of the acquisition price over the fair values of the assets acquired and liabilities assumed is recorded as goodwill. For significant acquisitions, we utilize third-party appraisal firms to assist us in determining the fair values for certain assets acquired and liabilities assumed. The measurement of these fair values requires us to make significant estimates and assumptions which are inherently uncertain. Adjustments to the fair values of assets acquired and liabilities assumed are made until we obtain all relevant information regarding the facts and circumstances that existed as of the acquisition date (the “measurement period”), not to exceed one year from the date of the acquisition. We recognize measurement-period adjustments in the period in which we determine the amounts, including the effect on earnings of any amounts we would have recorded in previous periods if the accounting had been completed at the acquisition date. See Note 14 — Acquisitions and investments for information on acquisitions completed during the historical period. Goodwill We have acquired goodwill related to business acquisitions. Goodwill represents the excess of the purchase price over the fair value of net assets acquired. We review our goodwill on an annual basis, at the beginning of the fourth quarter, and whenever events or changes in circumstances indicate the carrying value of goodwill may exceed its fair value. If the carrying value of goodwill exceeds its fair value, we recognize an impairment loss for this difference. Variable Interest Entities We evaluate our ownership, contractual and other interest in entities to determine if they are variable interest entities (“VIE”). We evaluate whether we have a variable interest in those entities and the nature and extent of those interests. Based on our evaluation, if we determine we are the primary beneficiary of a VIE, we consolidate the entity in our financial statements. Fair value measurements Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at a measurement date. We apply the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases of categorization within the hierarchy upon the lowest level input that is available and significant to the fair value measurement: • Level 1: The use of quoted prices in active markets for identical assets or liabilities. • Level 2: Other than quoted prices included in Level 1, inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. At September 30, 2022, we had no Level 2 measurements. • Level 3: The use of significant unobservable inputs that typically require the use of management’s estimates of assumptions that market participants would use in pricing. See Note 16 — Fair Value of Financial Interests for more information on our investments using Level 3 measurements. Our current assets and liabilities contain financial instruments, the most significant of which are trade accounts receivable and payable. We believe the carrying value of our current assets and liabilities approximate fair value. Our fair value assessment incorporates a variety of considerations, including: (i) the short-term duration of the instruments and (ii) our historical incurrence of and expectations of future bad debt expense. The book value of our floating rate debt approximates fair value because of its floating rate structure. Income taxes Before May 12, 2022, the ProFrac Predecessor entities were organized as limited liability companies or a limited partnership and were treated as either a disregarded entity or a partnership for U.S. federal income tax purposes, whereby the ordinary business income or loss and certain deductions were passed-through and reported on the members’ income tax returns. As such, the Company was not required to account for U.S. federal income taxes in the consolidated financial statements. Certain state income-based taxes are imposed on the Company which are reflected as income tax expense or benefit in historical periods. In connection with the IPO in May 2022 , the Company reorganized and ProFrac LLC became partially owned by ProFrac Corp., a U.S. Internal Revenue Code Subchapter C corporation (“C-Corporation”). ProFrac Corp. is a taxable entity and is required to account for income taxes under the asset and liability method for periods subsequent to May 12, 2022. Under the asset and liability method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled pursuant to the provisions of Accounting Standards Codification (“ASC”) 740, Income Taxes. The effect on deferred tax assets and liabilities of a change in tax rate is recognized in earnings in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts more-likely-than-not to be realized. Recently adopted accounting standards On January 1, 2022, we adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) for “Leases,” which amended existing guidance to require lessees to recognize liabilities and ROU assets on the balance sheet for the rights and obligations created by long-term leases and to disclose additional quantitative and qualitative information about leasing arrangements. We adopted this guidance using the current period adjustment approach on January 1, 2022 using the transition method that allows a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. We have completed our process to implement this standard, and we have designed processes and internal controls necessary for adoption of this standard. We have made policy elections to (i) not capitalize short-term leases for all asset classes, (ii) not separate non-lease components from lease components for all of our existing asset classes, (iii) apply the package of practical expedients that allows us to not reassess: whether any expired or existing contracts contain leases, lease classification for any expired or existing leases and initial direct costs for existing leases and (iv) apply the practical expedient to apply hindsight in estimating lease term and impairment. The impact of applying this standard is not expected to significantly impact our results of operations or cash flows. As of January 1, 2022, we recognized ROU assets and liabilities of approximately $35.8 million from operating leases on our consolidated balance sheet. See Note 12 - Leases for additional disclosures related to our adoption this accounting standards update. New accounting standards to be adopted We have not yet implemented FASB ASU No. 2016-13, Financial Instruments – Credit Losses. The ASU introduces a new accounting model, the Current Expected Credit Losses model (“CECL”), which requires recognition of credit losses and additional disclosures related to credit risk. The CECL model utilizes a lifetime expected credit loss measurement objective for the recognition of credit losses for loans and other receivables at the time the financial asset is originated or acquired. The expected credit losses are adjusted each period for changes in expected lifetime credit losses. This model replaces the multiple existing impairment models previously used under GAAP, which generally require that a loss be incurred before it is recognized. The new standard also applies to financial assets arising from revenue transactions such as contract assets and accounts receivable. Implementation is currently required for fiscal years beginning after December 15, 2022. The Company does not believe implementation will have a material impact on its financial statements. We have not yet implemented FASB ASU No. 2019-12, Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes, which removes specific exceptions to the general principles in Topic 740 under GAAP. The new guidance also improves the application of income tax-related guidance and simplifies GAAP for franchise taxes that are partially based on income, transactions with a government that result in a step up in the tax basis of goodwill, separate financial statements of legal entities that are not subject to tax, and enacted changes in tax laws in interim periods. The new guidance will be effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022; however, early adoption is permitted. The Company is currently evaluating the impact of adopting the new guidance on its consolidated financial statements. |
Restricted cash
Restricted cash | 9 Months Ended |
Sep. 30, 2022 | |
Cash And Cash Equivalents [Abstract] | |
Restricted cash | 3. Restricted cash The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated statement of cash flows as of September 30, 2022, and December 31, 2021: (In thousands) September 30, 2022 December 31, 2021 Cash and cash equivalents $ 64,678 $ 5,376 Restricted cash included in prepaid expenses and other current assets 2,064 — Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows $ 66,742 $ 5,376 As of September 30, 2022, restricted cash included cash used as collateral for our credit card program. |
Supplemental balance sheet info
Supplemental balance sheet information | 9 Months Ended |
Sep. 30, 2022 | |
Balance Sheet Related Disclosures [Abstract] | |
Supplemental balance sheet information | 4. Supplemental balance sheet information Inventories The following table summarizes the components of our inventories as of September 30, 2022, and December 31, 2021: (In thousands) September 30, 2022 December 31, 2021 Raw materials and supplies $ 107,303 $ 13,911 Work in process 9,987 3,288 Finished products and parts 121,504 56,743 Total $ 238,794 $ 73,942 The increase in inventory from December 31, 2021, to September 30, 2022 was partially due to acquired inventory of $54.5 million related to our acquisitions of FTS International, Inc. (“FTSI”) and Flotek Industries, Inc. (“Flotek”). The remaining increase is related to our increased activity levels in 2022. Accrued Expenses The following table summarizes our accrued expenses as of September 30, 2022, and December 31, 2021: (In thousands) September 30, 2022 December 31, 2021 Accrual for purchased materials $ 71,286 $ 15,600 Employee compensation and benefits 29,860 8,107 Sales, use, and property taxes 21,082 5,974 Interest 13,130 879 Income taxes 10,665 — Tax receivable agreement 3,491 — Tax distribution to redeemable noncontrolling interests 21,114 — Other 23,693 7,589 Total $ 194,321 $ 38,149 |
Property, plant, and equipment
Property, plant, and equipment | 9 Months Ended |
Sep. 30, 2022 | |
Property Plant And Equipment [Abstract] | |
Property, plant, and equipment | 5. Property, plant, and equipment The following table summarizes the components of our property, plant, and equipment, net as of September 30, 2022, and December 31, 2021: (In thousands) September 30, 2022 December 31, 2021 Machinery and equipment $ 1,180,092 $ 760,829 Mining property and mine development 97,265 34,809 Office equipment, software and other 15,156 5,550 Land 950 — Buildings and leasehold improvements 27,373 15,947 Total 1,320,836 817,135 Less: accumulated depreciation and depletion (632,801 ) (464,178 ) Construction in progress 133,174 10,730 Property, plant, and equipment, net $ 821,209 $ 363,687 The increase in net property, plant, and equipment from December 31, 2021, to September 30, 2022, was due to acquired assets of $328.7 million related to our FTSI and Flotek acquisitions, and $103.7 million from the acquisition of Monahans (as defined herein). This increase was partially offset by $48.2 million of FTSI assets sold in the sale lease-back transaction immediately following the FTSI acquisition. Depreciation expense for the three months ended September 30, 2022 and 2021, was $68.1 million and $35.1 million, respectively. Depreciation expense for the nine months ended September 30, 2022 and 2021, was $175.6 million and $105.1 million, respectively. Major classifications of property, plant, and equipment and their respective useful lives are as follows: Machinery and equipment 2 years—10 years Office equipment, software, and other 3 years—7 years Buildings and leasehold improvements 2 years—40 years |
Intangible assets
Intangible assets | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible assets | 6. Intangible assets The following table summarizes the components of our finite-lived intangible assets as of September 30, 2022, and December 31, 2021: September 30, 2022 December 31, 2021 (In thousands) Gross Book Value Less: Accumulated Amortization Net Book Value Gross Book Value Less: Accumulated Amortization Net Book Value Electric frac licenses $ 22,500 $ — $ 22,500 $ 22,500 $ — $ 22,500 Acquired technology 14,644 (2,214 ) 12,430 5,905 (589 ) 5,316 Intangible assets, net $ 37,144 $ (2,214 ) $ 34,930 $ 28,405 $ (589 ) $ 27,816 Intangible assets are amortized over the period the Company expects the asset to generate cash flows. As such, we amortize each electric frac license through the remaining license period, beginning when the initial fleet built under each license is placed into service, a period we estimate to be 17 years. For technology acquired during 2021, we estimated this period to be seven years. For technology acquired in 2022 related to the acquisition of FTSI, we estimated the period to be three years. Amortization expense related to intangible assets was $0.7 million and $0.2 million for the three months ended September 30, 2022 and 2021, respectively. Amortization expense related to intangible assets was $1.4 million and $0.5 million for the nine months ended September 30, 2022 and 2021, respectively. |
Indebtedness
Indebtedness | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Indebtedness | 7. Indebtedness The following table summarizes the components of our debt as of September 30, 2022 and December 31, 2021: September 30, December 31, (In thousands) 2022 2021 Old ABL Credit Facility $ — $ 69,000 Old Term Loan — 171,355 First Financial Loan 19,080 30,000 New ABL Credit Facility — — New Term Loan Credit Facility 525,726 — Best Flow Credit Facility(1) — 7,101 Best Flow Note(1) — 10,827 Alpine Promissory Note(1) — 16,717 Flotek Convertible Notes 12,739 — Other 10,459 1,695 Total gross debt 568,004 306,695 Less: unamortized debt issuance costs (23,235 ) (5,129 ) Less: current portion of long-term debt (60,541 ) (31,793 ) Total long-term debt $ 484,228 $ 269,773 (1) Related party debt agreements Old ABL Credit Facility On March 14, 2018, ProFrac LLC entered into a senior secured asset-based revolving credit agreement (the “Old ABL Credit Facility”), with Barclays Bank PLC, as administrative agent and collateral agent, and the lenders party thereto. The Old ABL Credit Facility had a maturity date of March 14, 2023. LIBOR borrowings under the Old ABL Credit Facility bore interest at the greater of LIBOR or 0.00%, plus a margin of 1.50% to 2.00%, depending on facility utilization. The interest rate was 2.75% as of December 31, 2021. As of December 31, 2021, the borrowing base was $146.2 million, therefore maximum availability under the Old ABL Credit Facility was the facility maximum of $105.0 million. There were $69.0 million of borrowings outstanding and $3.1 million of letters of credit outstanding, resulting in $32.9 million of availability under the Old Credit Facility ABL. On March 4, 2022, the Old ABL Credit Facility was replaced by the New ABL Credit Facility (as described below). Old Term Loan On September 7, 2018, ProFrac LLC entered into a $180.0 million term loan agreement (“Old Term Loan”), which matures on September 15, 2023, with a group of lenders with Barclays Bank, PLC as administrative agent. Principal payments are due in quarterly installments, however due to prepayments made to date, there will be no required minimum amortization (other than excess cash flow prepayments) before termination of the Old Term Loan. Excess cash flow is calculated quarterly to determine any additional minimum prepayments. On June 24, 2021, ProFrac LLC and its Old Term Loan lenders reached an agreement to expand the facility by $40.0 million. The Old Term Loan, as amended, requires minimum excess cash flow prepayments as follows, each due approximately 55 days after period-end: $0.0 million for the fiscal quarters ended March 31, 2021 through and including December 31, 2021, and $5.0 million for the fiscal quarters ended March 31, 2022 through and including June 30, 2023. LIBOR borrowings under the Old Term Loan bear interest at the greater of LIBOR or 1.25%, plus a margin of 6.25% to 8.50%, depending on the total net leverage ratio as defined under the Old Term Loan. The interest rate was 9.75% as of December 31, 2021. The Old Term Loan contained certain restrictive covenants, including a financial covenant which required ProFrac LLC to maintain a total net leverage ratio, as defined in the credit agreement, of no greater than 2.25:1.00 for the fiscal quarters ended September 30, 2019 through and including March 31, 2020, 3.50:1.00 for the fiscal quarters ended June 30, 2020 through and including March 31, 2021, 3.00:1.00 for the fiscal quarter ended June 31, 2021, 2.75:1.00 for the fiscal quarter ended September 30, 2021, 2.50:1.00 for the fiscal quarter ended December 31, 2021, and 2.00 :1.00 for the fiscal quarter ended March 31, 2022 and thereafter. ProFrac LLC was in compliance with all required covenants as of December 31, 2021. In February 2022, ProFrac and its Old Term Loan lenders entered into an agreement to amend the Old Term Loan. The amendment expanded the facility by $48.0 million. On March 4, 2022, the Old Term Loan was replaced by the New Term Loan Credit Facility (as described below), resulting in loss on debt extinguishment of $3.9 million. First Financial Loan On July 22, 2020, ProFrac LLC entered into a $35.0 million loan agreement with First Financial Bank, N.A. which had a maturity of July 22, 2025 (“Main Street Loan”). In August 2021, the loan agreement was amended to remove the covenants in place prior to the amendment. As amended, the Main Street Loan contained certain restrictive covenants which required ProFrac LLC to maintain a Fixed Charge Coverage Ratio of at least 1.00:1.00, and a Maximum Leverage Ratio of 3.50:1.00. Additionally, the Main Street Loan restricted the payment of distributions or dividends, other than for the payment of taxes. On December 22, 2021, the Main Street Loan had a balance of $32.2 million. The Main Street Loan was extinguished with a cash payment of $2.2 million and the remainder refinanced with a $30.0 million loan with First Financial Bank, N.A. (“First Financial Loan”). The First Financial Loan has a maturity date of January 1, 2024 with an interest rate of LIBOR plus 3.5%, and the loan is to be repaid by equal payments of principal and interest beginning in February 2022. The First Financial Loan contains certain restricted covenants which require the Company to maintain a fixed charge ratio of at least 1.00:1.00 and a maximum net leverage ratio of 3.00:1.00. The Company was in compliance with all covenants as of September 30, 2022. New ABL Credit Facility On March 4, 2022, ProFrac LLC, ProFrac Holdings II, LLC (“ProFrac II LLC”), as borrower (in such capacity, the “ABL Borrower”), and certain of the ABL Borrower’s wholly owned subsidiaries as obligors, entered into a senior secured asset-based revolving credit agreement (as amended, the “New ABL Credit Facility”), with a group of lenders with JPMorgan Chase Bank N.A., as administrative agent and collateral agent. The New ABL Credit Facility initially provided for an asset-based revolving credit facility with a borrowing base and lender commitments of $100.0 million. On April 8, 2022, the New ABL Credit Facility was amended to increase the borrowing base and lender commitments to $200.0 million. The New ABL Credit Facility has a borrowing base composed of certain eligible accounts receivable and eligible inventory less customary reserves, as redetermined monthly. As of September 30, 2022, the maximum availability under the New ABL Credit Facility was the aggregate lender commitments of $200.0 million with no borrowings outstanding and $10.5 million of letters of credit outstanding, resulting in approximately $189.5 million of remaining availability. The New ABL Credit Facility matures on the earlier of (i) March 4, 2027 and (ii) 91 days prior to the stated maturity of any material indebtedness (other than the First Financial Loan). On July 25, 2022, the New ABL Credit Facility was amended to add an uncommitted $100.0 million incremental facility (the “Incremental Facility”), under the terms of which existing lenders can make additional loans (in their sole discretion) under, or new lenders can join, the Incremental Facility and increase the potential size of the New ABL Credit Facility from $200 million to $300 million, subject to satisfaction of certain conditions. All other terms and conditions of the New ABL Credit Facility remained substantially unchanged. See Note 19 – Subsequent events. Borrowings under the New ABL Credit Facility accrue interest based on a three-tier pricing grid tied to average historical availability, and the ABL Borrower may elect for loans to be based on either an Adjusted Term SOFR or a base rate, plus the applicable margin. The interest rate under the New ABL Credit Facility for (a) Adjusted Term SOFR is the applicable margin plus the fluctuating per annum rate equal to Adjusted Term SOFR (with an Adjusted Term SOFR Floor of 0.00%); and (b) Base Rate Loans are the applicable margin plus the fluctuating per annum rate equal to the greatest of the Prime Rate in effect on such day, or the NYFRB Rate in effect on such day plus ½% of 1% and the Adjusted Term SOFR for a one-month Interest Period as published two (2) U.S. Government Securities Business Days prior to such day (or if such day is not a Business Day, the immediately preceding Business Day), plus 1.0%. The applicable margin for Adjusted Term SOFR Loans ranges from 1.50% to 2.00% and for Base Rate Loans ranges from 0.50% to 1.00%, depending on the average daily availability over the last three months under the New ABL Credit Facility. The New ABL Credit Facility bears an unused line fee ranging from 0.250% to 0.375%, depending on the average daily availability over the last three months payable quarterly in arrears. The New ABL Credit Facility also bears customary letter of credit fees. The interest rate was 7.00% as of September 30, 2022. The New ABL Credit Facility is subject to customary mandatory prepayments, including a mandatory prepayment if the aggregate unpaid principal balance of revolving loans, agent advances, swingline borrowings, unreimbursed drawings under letters of credit and the undrawn amount of outstanding letters of credit exceeds at any time the lesser of (x) the then applicable borrowing base and (y) the then total effective commitments under the New ABL Credit Facility, in an amount equal to such excess. After the occurrence and during the continuance of a Cash Dominion Period (defined in the New ABL Credit Facility as (a) any period commencing upon the date that a vailability shall have been less than the greater of ( i) 12.5 % of the Maximum Credit (which is the lesser of the maximum revolver amount in effect at such time and the borrowing base at such time) and (ii) $ million for a period of five consecutive business days and continuing until the date on which availability shall have been at least the greater of (y) 12.5 % of the Maximum Credit and (z) $ million for 20 consecutive calendar days or (b) any period commencing on the occurrence of certain specified events of default, and continuing during the period that such specified event of default shall be continuing) . The New ABL Credit Facility contains certain customary representations and warranties and affirmative and negative covenants. The negative covenants include, subject to customary exceptions, limitations on indebtedness, dividends, distributions and certain other payments, investments, acquisitions, prepayments of specified junior indebtedness, amendments of specified junior indebtedness, transactions with affiliates, dispositions, mergers and consolidations, liens, restrictive agreements, sale and leaseback transactions, changes in fiscal periods and changes in line of business. We are required by the New ABL Credit Facility to maintain minimum liquidity of $5.0 million at all times. Additionally, when availability is less than the greater of (i) 12.5% of the maximum credit (which is the lesser of the maximum revolver amount in effect at such time and the borrowing base at such time) and (ii) $10.0 million and continuing until such time as availability has been in excess of such threshold for a period of 20 consecutive calendar days, we are required by the New ABL Credit Facility to maintain a springing Fixed Charge Coverage Ratio (as defined in the New ABL Credit Facility) of at least 1.0 to 1.0, which is tested quarterly during such period. The Company was in compliance with all covenants, and there were no existing defaults or events of default related to the New ABL Credit Facility as of September 30, 2022. New Term Loan Credit Facility On March 4, 2022, ProFrac LLC, ProFrac II, LLC, as borrower (in such capacity, the “Term Loan Borrower”), and certain of the Term Loan Borrower’s wholly owned subsidiaries as obligors, entered into a senior secured term loan credit agreement (the “New Term Loan Credit Facility”), with Piper Sandler Finance LLC, as administrative agent and collateral agent, and the lenders party thereto, providing for a term loan facility in an aggregate amount of $300 million. O n July 25, 2022, the New Term Loan Facility was amended to increase the size of the New Term Loan Facility by $150.0 million with an uncommitted option to obtain commitments for a potential additional $100.0 million of delayed draw loans before the earlier to occur of (i) the consummation of the Company’s acquisition of USWS (as defined herein) and (ii) March 31, 2023. The maturity date of the New Term Loan Facility remains the same at March 4, 2025. The Company used a portion of the proceeds from the increased New Term Loan Facility to fund the acquisitions of Monahans and USWS (see Note 14 – Acquisitions and investments and Note 19 – Subsequent events), and used the remainder of the proceeds to pay outstanding debt under the New ABL Credit Facility and/or for other general corporate purposes. On August 25, 2022, the Term Loan Borrower requested $80 million of delayed draw loans under the New Term Loan Credit Facility, which was funded by certain existing lenders under the New Term Loan Credit Facility on September 1, 2022. After giving effect to the funding of this delayed draw loan and solely to the extent that the Term Loan Borrower is able to obtain corresponding commitments from the existing lenders and/or new lenders, the Term Loan Borrower may request an additional $20 million of delayed draw loans under the New Term Loan Credit Facility, subject to the terms and conditions thereof. As of September 30, 2022, the Term Loan Borrower had approximately $525.7 million outstanding under the New Term Loan Credit Facility. The New Term Loan Credit Facility matures on March 4, 2025. Borrowings under the New Term Loan Credit Facility accrue interest at a percentage per annum equal to (a) until October 1, 2022, (i) for SOFR Rate Loans, 8.50%, and (ii) for Base Rate Loans, 7.50% and (b) thereafter, based on a two-tier pricing grid tied to Total Net Leverage Ratio (as defined in the New Term Loan Credit Facility), and the Term Loan Borrower may elect for loans to be based on either Adjusted Term SOFR or Base Rate, plus the applicable margin. The interest rate on the New Term Loan Credit Facility for (a) SOFR Rate Loans are the applicable margin plus the fluctuating per annum rate equal to Adjusted Term SOFR (as defined in the New Term Loan Credit Facility), with a SOFR floor of 1.00% and (b) Base Rate Loans are the applicable margin plus the fluctuating per annum rate equal to the highest of (i) the federal funds rate plus 1/2 of 1%, (ii) the interest rate quoted in the print edition of The Wall Street Journal Th e applicable margin for (a) SOFR Rate Loans ranges from % to 8.00 % and (b) Base Rate Loans ranges from % to 7.00 %, depending on the Total Net Leverage Ratio (as defined in the New Term Loan Credit Facility) as of the first day of the then-current fiscal quarter. The interest rate was % as of September 30 , 2022. The New Term Loan Credit Facility is guaranteed by ProFrac LLC and all of the Term Loan Borrower’s material existing subsidiaries and certain direct and indirect future U.S. restricted subsidiaries of the Term Loan Borrower. The New Term Loan Credit Facility is secured by a lien on, and security interest in, substantially all of each such guarantor’s assets. The New Term Loan Credit Facility is subject to quarterly amortization beginning in June 2022, though any excess cash flow payments, reduce the required amortization. Additionally, the New Term Loan Credit Facility is subject to a quarterly mandatory prepayment beginning for the calendar quarter ending on December 31, 2022, in an amount equal to the Applicable ECF Percentage (as defined in the New Term Loan Credit Facility). The Applicable ECF Percentage ranges from 50% of Excess Cash Flow (as defined in the New Term Loan Credit Facility) to 25% of Excess Cash Flow depending on the Total Net Leverage Ratio as of the last day of the applicable fiscal quarter. Voluntary prepayments of borrowings under the New Term Loan Credit Facility are permitted at any time, in specified minimum principal amounts, subject to reimbursement of the lenders’ redeployment costs actually incurred in the case of a prepayment of SOFR Rate Loans other than on the last day of the relevant interest period. Between March 4, 2022 and March 4, 2023, certain prepayments of the New Term Loan Credit Facility are subject to a prepayment premium of 3.00% (or, in the case of any IPO Prepayment (as defined in the New Term Loan Credit Facility), 2.00%). Between March 5, 2023 and March 4, 2024, certain prepayments of the New Term Loan Credit Facility are subject to a 2.00% prepayment premium. After March 4, 2024, but prior to the Stated Termination Date (as defined in the New Term Loan Credit Facility) certain prepayments of the New Term Loan Credit Facility are subject to a 1.00% prepayment premium. No payment or prepayment premium shall be due on account of any payments or prepayments made on the Stated Termination Date. The New Term Loan Credit Facility contains certain customary representations and warranties and affirmative and negative covenants. The negative covenants include, subject to customary exceptions, limitations on indebtedness, dividends, distributions and certain other payments, investments, capital expenditures, acquisitions, prepayments of specified junior indebtedness, amendments of specified junior indebtedness, transactions with affiliates, dispositions, mergers and consolidations, liens, restrictive agreements, changes in fiscal periods and changes in line of business. We are required by the New Term Loan Credit Facility to maintain a Total Net Leverage Ratio (as defined in the New Term Loan Credit Facility) (i) of no more than 2.00 to 1.00 for the fiscal quarter ending on June 30, 2022, (ii) of no more than 1.55 to 1.00 for the fiscal quarters ending on September 30, 2022 and December 31, 2022, and (iii) of no more than 1.25 for each fiscal quarter ending on March 31, 2023 and thereafter. We are required by the New Term Loan Credit Facility to maintain minimum liquidity of $30.0 million at all times. The New Term Loan Credit Facility contains customary events of default. If an event of default occurs and is continuing, the lenders may declare all loans to be immediately due and payable. Some events of default require an automatic termination of the loans and become immediately due and payable. The Company was in compliance with all covenants, and there were no defaults or events of default related to the New Term Loan Credit Facility, as of September 30, 2022. Backstop Note On March 4, 2022, ProFrac LLC borrowed $22.0 million pursuant to a subordinated promissory note with THRC Holdings, LP (“THRC Holdings”) with a stated maturity date of March 4, 2027 (the “Backstop Note”). The Backstop Note bears interest at a percentage per annum equal to 1.74%. Interest under the Backstop Note is paid on a quarterly basis and is solely payable in kind, with such interest amounts being added to the outstanding principal amount of the Backstop Note, until the date that both the New ABL Credit Facility and the New Term Loan Credit Facility shall have been terminated, after which date quarterly interest payments may be paid in kind or in cash. The Backstop Note is unsecured and subordinated to the indebtedness owing under the New ABL Credit Facility and the New Term Loan Credit Facility. In June 2022, the Backstop Note was fully paid with net proceeds from the IPO. Closing Date Note On March 4, 2022, ProFrac LLC borrowed $22.0 million pursuant to a subordinated promissory note with THRC Holdings with a stated maturity date of March 4, 2027 (the “Closing Date Note”). The Closing Date Note bears interest at a percentage per annum equal to 1.74%. Interest under the Closing Date Note is paid on a quarterly basis and is solely payable in kind, with such interest amounts being added to the outstanding principal amount of the Closing Date Note, until the date that both the New ABL Credit Facility and the New Term Loan Credit Facility shall have been terminated, after which date quarterly interest payments may be paid in kind or in cash. The Closing Date Note is unsecured and subordinated to the indebtedness owing under the New ABL Credit Facility and the New Term Loan Credit Facility. In June 2022, the Closing Date Note was fully paid with net proceeds from the IPO. Equify Bridge Note On March 4, 2022, ProFrac II LLC entered into a $45.8 million subordinated promissory note with Equify Financial with a stated maturity date of March 4, 2027 (the “Equify Bridge Note”). The Equify Bridge Note bears interest at a percentage per annum equal to 1.0%. Interest under the Equify Bridge Note is paid on a quarterly basis and is solely payable in kind, with such interest amounts being added to the outstanding principal amount of the Equify Bridge Note, until the date that both the New ABL Credit Facility and the New Term Loan Credit Facility shall have been terminated, after which date quarterly interest payments may be paid in kind or in cash. In April 2022, the Company repaid $25.0 million in principal under the Equify Bridge Note. The Equify Bridge Note is unsecured and subordinated to the indebtedness owing under the New ABL Credit Facility and the New Term Loan Credit Facility. In April 2022, the Company repaid $25.0 million in principal under the Equify Bridge Note, resulting in an outstanding balance of $20.8 million. In June 2022, the Equify Bridge Note was fully paid with net proceeds from the IPO. Best Flow Credit Facility On February 4, 2019, Best Flow entered into a revolving loan credit agreement (the “Best Flow Credit Facility”), with Equify Financial, LLC (“Equify Financial”) as lender. Equify Financial is a related party. The Best Flow Credit Facility provided for a revolving credit facility in an aggregate principal amount at any time outstanding up to $9.0 million, subject to borrowing base availability. The Best Flow Credit Facility had a maturity date of February 4, 2026. The interest rate under the Best Flow Credit Facility was the lesser of (i) the Prime Rate (as defined in the Best Flow Credit Facility) plus the applicable margin (3.50%) and (ii) the Maximum Rate (as defined in the Best Flow Credit Facility). All accrued but unpaid interest on the outstanding principal balance is due and payable monthly on the first day of each calendar month. The Best Flow Credit Facility was secured by a first lien on substantially all of the assets of Best Flow. On March 4, 2022, the Best Flow Credit Facility was extinguished resulting in loss of extinguishment of debt of $0.3 million. Best Flow Note On January 28, 2021, Best Flow issued a promissory note (the “Best Flow Note”), with Equify Financial, as holder. Equify Financial is a related party. The Best Flow Note provided for a term loan in an initial aggregate principal amount equal to $13.0 million. Proceeds from the Best Flow Note were utilized to pay down $7.6 million of outstanding balances on the Best Flow Credit Facility and to pay down other equipment financing agreements for $5.4 million. The Best Flow Note matures on February 1, 2026, with a fixed interest rate of 8.0%. The principal and interest are paid in equal monthly amortizing amounts through maturity. Prepaid amounts are subject to a 0.19% prepayment premium. On March 4, 2022, the Best Flow Note was extinguished resulting in loss of extinguishment of debt of $1.4 million. Alpine Promissory Note In January 2021, Alpine entered into a $21.4 million promissory note with Equify Financial (“Alpine Note”). Equify Financial is a related party. The Alpine Note amortizes monthly, had an interest rate of 8.0% and had a stated maturity date in February 2027. On March 4, 2022, the Alpine Note was extinguished resulting in loss on extinguishment of debt of $1.8 million. Flotek Convertible Notes On February 2, 2022, Flotek entered into a private investment in public equity transaction (the “PIPE Transaction”) with a consortium of investors to secure growth capital. Pursuant to the PIPE Transaction, Flotek issued $11.2 million in aggregate initial principal amount of convertible notes payable (“Flotek Convertible Notes”). The Flotek Convertible Notes accrue paid-in-kind interest at a rate of 10% per annum, have a maturity of one year, and are convertible into common stock of Flotek (a) at Flotek’s option if Flotek’s common stock equals or exceeds $2.50 for 20 trading days during a 30 consecutive trading day period, (b) at the holder’s option at any time prior to maturity, at a price of $1.088125 per share or (c) at maturity, at a price of $1.088125 per share. On March 21, 2022, $3.0 million of Flotek Convertible Notes were converted at a holder’s option into approximately 2.8 million shares of Flotek common stock. The Flotek Convertible Notes are obligations of Flotek and have no recourse or claim against the assets of ProFrac Corp. or its other consolidated subsidiaries. At September 30, 2022, there was $8.2 million principal amount of Flotek Convertible Notes outstanding, which were included in the Company’s consolidated financial statements at a carrying value of $12.7 million. Other indebtedness As of September 30, 2022 and December 31, 2021, the Company had other debt agreements outstanding with unpaid principal balances of $10.5 million and $1.7 million, respectively. At September 30, 2022, other indebtedness included various equipment financing agreements of $3.4 million. In October 2022, we repaid the remaining $3.4 million under these agreements. At September 30, 2022, other indebtedness also included a $4.8 million loan under the Paycheck Protection Program established under the Coronavirus Aid, Relief, and Economic Securities Act held by Flotek. The following table summarizes the principal maturity schedule for our long-term debt outstanding as of September 30, 2022: 2022 2023 2024 2025 2026 Thereafter Total First Financial loan $ 3,789 $ 15,291 $ — $ — $ — $ — $ 19,080 New ABL Credit Facility — — — — — — — New Term Loan Credit Facility 6,571 26,286 26,286 466,583 — — 525,726 Flotek Convertible Notes — 12,739 — — — — 12,739 Other. 4,506 3,038 1,907 543 79 386 10,459 Total $ 14,866 $ 57,354 $ 28,193 $ 467,126 $ 79 $ 386 $ 568,004 |
Income taxes
Income taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income taxes | 8. Income taxes Before May 12, 2022, the ProFrac Predecessor entities were organized as limited liability companies or a limited partnership and were treated as either a disregarded entity or a partnership for U.S. federal income tax purposes, whereby the ordinary business income or loss and certain deductions were passed-through and reported on the members’ income tax returns. As such, the Company was not required to account for U.S. federal income taxes in the consolidated financial statements. Certain state income-based taxes are imposed on the Company which are reflected as income tax expense or benefit in historical periods. In connection with the IPO in May 2022, the Company reorganized and ProFrac LLC became partially owned by ProFrac Corp., a C-Corporation. ProFrac Corp. is a taxable entity and is required to account for income taxes under the asset and liability method for periods subsequent to May 12, 2022. During the first nine months of 2022, ProFrac LLC and its members completed the acquisition of FTSI, a C-Corporation. Through a series of transactions, ProFrac LLC obtained ownership of all of the assets and liabilities of FTSI, but the FTSI C-Corporation legal entity was owned by the ProFrac LLC members. In connection with the IPO, the FTSI C-Corporation legal entity merged with a subsidiary of ProFrac Corp., which inherited the tax attributes of the FTSI legal entity. As of September 30, 2022, the Company had approximately $161.2 million of net deferred tax assets. The deferred tax assets are driven by the outside basis difference between tax and GAAP in the Company’s outside basis in ProFrac LLC (including $23.8 million subject to the Tax Receivable Agreement), generated by both the FTSI transaction and the IPO. We have recorded a valuation allowance on the Company’s net deferred tax assets based on our assessment that it is more likely than not that the deferred tax assets will not be realized, with the exception of certain deferred tax assets that are expected to be utilized in the 2022 tax year of approximately $4.1 million. This valuation allowance assessment is based on the cumulative losses incurred by the Company in recent years. A change in our assessment could cause a decrease to the valuation allowance, which could materially impact our results of operations. The Company’s effective tax rate (“ETR”) from continuing operations is expected to be 5.0% for tax year 2022. After consideration of a 2.4% net state tax rate (inclusive of the Texas Margin tax), the majority of the remaining difference between the federal corporate income tax rate of 21% and our effective tax rate is related to the income that is earned within the financial statement consolidated group that is not subject to tax within the financial statement consolidated group. This is due to the Company not being subject to tax prior to IPO, as well as the amount of post-IPO income that is attributable to the Class B shareholders. As such, the Company’s income tax expense for the nine months ended September 30, 2022 is $13.0 million. ProFrac LLC is obligated to make cash distributions to PFH Unit holders to fund their respective income tax liabilities relating to their share of the income of ProFrac LLC. At September 30, 2022, the Company recorded a liability for accrued distributions of $21.1 million to be made to redeemable noncontrolling interest holders to fund their estimated tax payments |
Tax receivable agreement
Tax receivable agreement | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Tax receivable agreement | 9. Tax receivable agreement In connection with our IPO, ProFrac Corp. entered into a tax receivable agreement (the “TRA”) with certain PFH Unit holders (the “TRA Holders”). The TRA generally provides for payment by ProFrac Corp. 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 (computed using simplifying assumptions to address the impact of state and local taxes) that ProFrac Corp. actually realizes (or is deemed to realize in certain circumstances) as a result of (i) certain increases in tax basis that occur as a result of ProFrac Corp.’s acquisition (or deemed acquisition for U.S. federal income tax purposes) of all or a portion of such TRA Holder’s PFH Units in connection with the IPO or the exercise of the Redemption Right (as defined in the TRA) or the Call Right (as defined in the TRA), and (ii) imputed interest deemed to be paid by ProFrac Corp. as a result of, and additional tax basis arising from, any payments ProFrac Corp. makes under the TRA. ProFrac Corp. will be dependent on ProFrac LLC to make distributions to ProFrac Corp. in an amount sufficient to cover ProFrac Corp.’s obligations under the TRA. ProFrac Corp. will retain the benefit of the remaining 15% of any actual net cash tax savings. The payment obligations under the TRA are ProFrac Corp.’s obligations and not obligations of ProFrac LLC, and we expect that the payments required to be made under the TRA could be substantial. The term of the TRA commenced upon the completion of the IPO and will continue until all tax benefits that are subject to the TRA have been utilized or expired, unless we experience a Change of Control (as defined in the TRA, which includes certain mergers, asset sales, or other forms of business combinations) or the TRA otherwise terminates early (at our election or as a result of our breach or the commencement of bankruptcy or similar proceedings by or against us) and ProFrac Corp. makes the termination payments specified in the TRA in connection with such Change of Control or other early termination. In the event that the TRA is not terminated, the payments under the TRA could commence in 2023 and will continue for 15 years after the date of the last redemption of the PFH Units. Payments will generally be made under the TRA as we realize actual cash tax savings from the tax benefits covered by the TRA. However, if we experience a Change of Control or the TRA otherwise terminates early, ProFrac Corp.’s obligations under the TRA would accelerate and ProFrac Corp. would be required to make an immediate payment equal to the present value of the anticipated future payments to be made by it under the TRA. We estimate that such an immediate payment could range up to more the $500 million. There can be no assurance that we will be able to satisfy our obligations under the TRA. Estimating the amount and timing of payments that may become due under the TRA is by its nature imprecise. For purposes of the TRA, net cash tax savings generally are calculated by comparing ProFrac Corp.’s actual tax liability (determined by using the actual applicable U.S. federal income tax rate and an assumed combined state and local income and franchise tax rate) to the amount ProFrac Corp. would have been required to pay had it not been able to utilize any of the tax benefits subject to the TRA. The actual increases in tax basis covered by the TRA, as well as the amount and timing of any payments under the TRA, will vary depending on a number of factors, including the timing of any redemption of PFH Units, the price of ProFrac Corp.’s Class A Common Stock at the time of each redemption, the extent to which such redemptions are taxable transactions, the amount of the redeeming PFH Unit holder’s tax basis in its PFH Units at the time of the relevant redemption, the depreciation and amortization periods that apply to the increase in tax basis, the amount and timing of taxable income we generate in the future, the U.S. federal income tax rates then applicable, and the portion of ProFrac Corp.’s payments under the TRA that constitute imputed interest or give rise to depreciable or amortizable tax basis. We account for amounts payable under the TRA when we determine that a liability is probable and the amount is reasonably estimable. At September 30, 2022, the liability from the TRA was $3.5 million. |
Earnings per Share
Earnings per Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings per share | 10. Earnings per share The numerators and denominators of the basic and diluted earnings per share (“EPS”) computations for our Class A Common Stock are calculated as follows: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2022 2021 2022 2021 Numerator: Net income attributable to ProFrac Holding Corp. $ 44,930 $ — $ 51,488 $ — Net income reallocated to dilutive Class A shares 85 — 72 — Net income attributable to ProFrac Holding Corp. used for diluted earnings per Class A share 45,015 — 51,560 — Denominator: Weighted-average Class A shares used for basic EPS computation 41,239 40,846 Dilutive potential of employee restricted stock units 110 81 Weighted-average Class A shares used for diluted EPS computation 41,349 40,927 Basic and diluted EPS - Class A Common Stock $ 1.09 $ 1.26 |
Stock-based compensation
Stock-based compensation | 9 Months Ended |
Sep. 30, 2022 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-based compensation | 11. Stock-based compensation Stock-based Compensation Related to Deemed Contributions In connection with the Company’s IPO, our majority shareholders, Farris Wilks (“Farris”) and Dan Wilks (“Dan”) (together with certain family members or entities they control), sold PFH Units representing approximately 1% of the equity interest in ProFrac LLC to an entity controlled by our Chief Executive Officer, Ladd Wilks (“Ladd”), and our Executive Chairman, Matt Wilks (“Matt”), respectively. These equity interests in ProFrac LLC entitled each of Ladd and Matt to 1,220,978 shares of Class B common stock in ProFrac Corp. These units were sold in exchange for promissory notes. While some of the documentation relating to these transfers was subject to completion, we concluded that both transactions were consummated in connection with the Company’s IPO and, for accounting purposes, should be treated in accordance with ASC Topic 718, Compensation — Stock Compensation Also in connection with the IPO, Farris engaged in estate planning that may result, subject to other terms and conditions, in additional shares being transferred by Farris to Ladd if the Company’s total market capitalization increases to certain target levels within the next five years, which resulted in a performance award being deemed granted by the Company to Ladd. We concluded that this arrangement should be treated, for accounting purposes, in accordance with ASC Topic 718, Compensation — Stock Compensation The grant date fair value of this award was estimated to be $45.2 million and will be recognized over the estimated derived service period of approximately one year. The grant date fair value and the derived service period of this award was determined using a Monte Carlo simulation method, which incorporates the possibility that the market capitalization targets may not be satisfied. The Monte Carlo simulation is affected by a number of variables, including the fair value of our underlying common shares ($18.00 at grant date), the expected common share price volatility over the expected term (79.2%), the expected dividend yield of our common shares over the expected term (0.0%), the risk-free interest rates over the expected term (2.86%), and the performance period of the award (five years). The derived service period for the award was determined based on the median vesting time for the simulations that achieved the vesting hurdle. Stock-based compensation expense associated with this award will be recognized over the earlier of (i) the derived service period and (ii) the date on which the market condition is satisfied. Stock-based compensation expense of $10.2 million and $15.3 million was recognized in the third quarter and first nine months of 2022, respectively. At September 30, 2022, there was $29.9 million of total unrecognized compensation cost related to this award, which is expected to be recognized over a weighted average period of 0.8 years. 2022 Equity and Incentive Compensation Plan In May 2022, the Company adopted the ProFrac Holding Corp. 2022 Long Term Incentive Plan (“2022 Plan”) to attract and retain officers, employees, directors, and other key personnel and to provide those persons incentives and awards for performance. The 2022 Plan originally allocated 3,121 thousand shares of our Class A Common Stock in the form of incentive stock options, non-qualified stock options, restricted stock, restricted stock units (“RSUs”), stock appreciation rights, or other stock-based awards. As of September 30, 2022, up to approximately 2,543 thousand shares were available for future grants under the 2022 Plan. On May 24, 2022, the Company issued 509 thousand RSUs, which had a grant date fair value of $9.1 million. The RSUs were valued at $17.90 per share, the market price of our Class A Common Stock on the date of grant. In August 2022, the Company issued 69 thousand RSUs, which had a grant date fair value of $1.2 million. The RSUs were valued at $17.85 per share, the market price of our Class A Common Stock on the date of grant. Awards granted vest from one to three years from the date of grant. Stock-based compensation expense for the Company in the third quarter and first nine months of 2022 for these RSUs was $2.1 million and $3.0 million, respectively. The weighted-average grant-date fair value per share of RSUs granted was $17.89. The fair value of RSUs vested in the third quarter of 2022 was zero. At September 30, 2022, there was $7.4 million of total unrecognized compensation cost related to unvested RSUs, which is expected to be recognized over a weighted average period of 1.0 years. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Leases | 12. Leases Effective January 1, 2022, we adopted the new lease accounting guidance under ASC Topic 842, Leases. The details of the significant changes to our accounting policies resulting from the adoption of the new lease standard are set out below. We adopted the standard using the current period adjustment approach; accordingly, the comparative information as of December 31, 2021, has not been adjusted and continues to be reported under the previous lease standard. Under the new standard, assets and liabilities that arise from all leases are required to be recognized on the balance sheet for lessees. Previously, only capital leases, which are now referred to as finance leases, were recorded on the balance sheet. The adoption of this standard resulted in the recognition of approximately $35.8 million of operating lease right-of-use assets and operating lease liabilities on our consolidated balance sheet as of January 1, 2022. The adoption of this standard did not materially impact our consolidated results of operations for the three and nine months ended September 30, 2022. Beginning January 1, 2022, for all leases with a term in excess of 12 months, we recognized a lease liability equal to the present value of the lease payments and right-of-use asset representing our right to use the underlying asset for the lease term. For operating leases, lease expense for lease payments is recognized on a straight-line basis over the lease term and accretion of the lease liability, while finance leases include both an operating expense and an interest expense component. For all leases with a term of 12 months or less, we elected the practical expedient to not recognize lease assets and liabilities. We recognize lease expense for these short-term leases on a straight-line basis over the lease term. We are a lessee for several operating leases, related primarily to real estate and light duty vehicles. The majority of our operating leases have remaining lease terms of 10 years or less. None of our leases include options to extend the leases, nor do any include options to terminate the leases. The accounting for leases may require judgment, which includes determining the incremental borrowing rates to utilize in our net present value calculation of lease payments for lease agreements which do not provide an implicit rate. In connection with the completion of the FTSI acquisition, FTSI conveyed to Wilks Development, LLC, an affiliate of ProFrac LLC, substantially all of FTSI’s owned real property, consisting primarily of FTSI’s hydraulic fracturing equipment manufacturing facilities, in exchange for cash consideration of approximately $44.4 million (the “FTSI Sale Leaseback”). We will lease such real property from Wilks Development, LLC in exchange for aggregate monthly lease payments of $51.6 million through March 2032. The cash consideration received was $3.7 million less than the carrying value of these assets. Because this sale was to an affiliate under common control, we accounted for the $3.7 million as an equity transaction recorded as a deemed distribution within our consolidated statements of changes in equity. Our leasing activities primarily consist of operating leases for administrative offices, manufacturing and maintenance facilities along with some light duty vehicles. We do not lease any equipment on a long-term basis. The following table summarizes the components of our lease costs: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2022 2022 Operating lease costs $ 3,429 $ 9,030 Short-term lease costs 843 2,199 Total lease costs $ 4,272 $ 11,229 The following table includes other supplemental information for our operating leases: Nine Months Ended September 30, (Dollars in thousands) 2022 Cash paid for amounts included in the measurement of our lease obligations $ 8,691 Right-of-use assets obtained in exchange for lease obligations $ 45,412 Right-of-use assets recognized upon adoption of the leasing standard $ 35,817 Weighted-average remaining lease term 8.1 years Weighted-average discount rate 5.0 % The following table summarizes the maturity of our operating leases as of September 30, 2022: (In thousands) Remainder of 2022 $ 3,667 2023 13,378 2024 12,642 2025 11,496 2026 11,537 2027 11,812 2028 and thereafter 38,465 Total lease payments 102,997 Less imputed interest (20,285 ) Total lease liabilities $ 82,712 |
Related party transactions
Related party transactions | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related party transactions | 13. Related party transactions In the normal course of business, the Company has entered into transactions with related parties where the Wilks (or entities they control) hold a controlling financial interest. During the three and nine months ended September 30, 2022 and 2021, the Company had related party transactions with the following related party entities: Automatize, LLC (“Automatize”) is a logistics broker that facilitates the last-mile delivery of proppants on behalf of its customers, including the Company. Amounts paid to Automatize include costs passed through to third-party trucking companies and a commission retained by Automatize. These payments are recorded in cost of revenues, exclusive of depreciation and depletion on our consolidated statements of operations. Cisco Logistics, LLC (“Cisco Logistics”) is a logistics company that delivers sand and equipment on behalf of its customers, including the Company. Amounts paid to Cisco Logistics are recorded in cost of revenues, exclusive of depreciation and depletion on our consolidated statements of operations. Equify Risk Services, LLC (“Equify Risk”) is an insurance broker that negotiates and secures insurance policies on behalf of its customers, including the Company. Amounts paid to Equify Risk are recorded in selling, general and administrative expenses on our consolidated statements of operations. Equify Financial, LLC (“Equify Financial”) is a finance company that provides equipment and other financing to its customers, including the Company. Amounts paid to Equify Financial are recorded in interest expenses on our consolidated statements of operations, and repayments of long-term debt on our consolidated statements of cash flows. See Note 7—Indebtedness for additional disclosures related to related party credit agreements. Wilks Brothers, LLC (“Wilks Brothers”) is a management company which provides administrative support to various businesses within its portfolio. Wilks Brothers and certain entities under its control will at times incur expenses on behalf of the Company , billing the Company for these expenses at cost as well as certain management fees. Amounts paid to Wilks Brothers are generally recorded in selling, general and administrative expenses on our consolidated statements of operations . Interstate Explorations, LLC (“Interstate”) is an exploration and development company for which the Company performs pressure pumping services, and from which the Company has a short-term lease for certain office space. Flying A Pump Services, LLC (“Flying A”) is an oilfield services company which provides pump down and acid services, to which the Company rents and sells equipment and frac fleet components. MC Estates, LLC, The Shops at Willow Park, and FTSI Industrial, LLC (collectively, the “Related Lessors”) own various industrial parks and office space leased by the Company. Amounts paid to the Related Lessors are recorded in selling, general and administrative expenses on our consolidated statements of operations. Wilks Construction Company, LLC (“Wilks Construction”) is a construction company that has built and made renovations to several buildings for the Company, including construction of a new sand plant. Amounts paid to Wilks Construction are recorded in capital expenditures on our consolidated statements of cash flows. 3 Twenty-Three, LLC (“3 Twenty-Three”) is a payroll administrator which performs payroll services on behalf of its customers, including the Company. Amounts paid to 3 Twenty-Three are recorded in cost of revenues, exclusive of depreciation and depletion and selling, general and administrative expenses on our consolidated statements of operations. Carbo Ceramics Inc. (“Carbo”) is a provider of ceramic proppant which will at times purchase conventional proppant from the Company to act as a broker for its customers. Additionally, the Company will at times purchase manufactured proppant from Carbo for the stimulation services segment. FHE USA LLC (“FHE”) is a provider of production and well completion equipment used at the wellsite. Its RigLock and FracLock systems remotely connect surface equipment to the wellhead that keeps crews safer and speeds up operations while also reducing the volume of high-pressure iron. Amounts paid to FHE are recorded in capital expenditures on our consolidated statements of cash flows. The following table summarizes expenditures with related parties for the three and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2022 2021 2022 2021 Automatize $ 22,428 $ 25,228 $ 72,279 $ 56,496 FHE 4,025 — 11,302 — Wilks Brothers 5,503 4,419 14,302 8,926 Related Lessors 1,821 1,604 6,469 4,719 Wilks Construction 9,327 — 22,716 — Equify Financial — 1,853 986 1,853 3 Twenty-Three — 974 247 974 Carbo 863 160 941 513 Cisco Logistics — 85 — 509 Interstate — 24 20 56 Equify Risk — — — 3 Other 29 29 149 81 Total $ 43,996 $ 34,376 $ 129,411 $ 74,130 The following table summarizes related party accounts payable as of September 30, 2022 and December 31, 2021: September 30, December 31, (In thousands) 2022 2021 Automatize $ 15,184 $ 11,198 Wilks Brothers 15,049 9,990 Wilks Construction 4,640 57 Cisco Logistics 1 — Carbo 0 10 Related Lessors 37 1 Other 0 19 Total $ 34,911 $ 21,275 The following table summarizes revenue from related parties for the three and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2022 2021 2022 2021 Flying A $ 1,273 $ 573 $ 3,193 $ 2,701 Carbo 31 395 784 574 Wilks Brothers 1 — 4 5 Interstate 4 2 4 113 Other 6 1 7 35 Total $ 1,315 $ 971 $ 3,992 $ 3,428 The following table summarizes related party accounts receivable as of September 30, 2022 and December 31, 2021: September 30, December 31, (In thousands) 2022 2021 Flying A $ 2,603 $ 2,412 Cisco Logistics 1,493 1,489 Carbo 96 591 Interstate 316 — Other 2 23 Total $ 4,510 $ 4,515 Additionally, in January and February of 2021, ProFrac LLC executed two agreements with one of ProFrac LLC’s members for the sale of certain lots of equipment, in exchange for $8.7 million in cash, an amount that approximates the net book value of the assets. Under these agreements, for any assets subsequently resold by the member, ProFrac LLC will reimburse the member for a certain percentage of the net loss, or conversely be entitled to a certain percentage of the net gain, at rates established in the agreements. As of September 30, 2022, substantially all of the assets have been sold by the member. On February 4, 2022, THRC Holdings entered into a Rights Agreement with Encantor Properties LP, one of the sellers from whom the Company purchased the Munger Ranch property, under which the related party was assigned rights to $8.1 million of the $30.0 million in consideration related to the Munger purchase. As part of the IPO completed in May 2022, the sellers of Munger Ranch were issued 2,114,273 shares of Class A Common Stock in exchange for the $30.0 million consideration related to the Munger Ranch purchase. |
Acquisitions and investments
Acquisitions and investments | 9 Months Ended |
Sep. 30, 2022 | |
Business Combinations [Abstract] | |
Acquisitions and investments | 14. Acquisitions and investments FTS International, Inc. On March 4, 2022, the Company acquired the outstanding stock of FTSI for a purchase price of $405.7 million, consisting of cash consideration of $332.8 million, and THRC Holdings’ equity interest of $72.9 million (“THRC FTSI Related Equity”). Immediately following the closing of the cash acquisition pursuant to the Agreement and Plan of Merger, dated as of October 21, 2021, by and among FTSI, ProFrac LLC and ProFrac Acquisitions, Inc. (the “FTSI Merger Agreement”), ProFrac LLC distributed the 80.5% of the FTSI equity it acquired in such merger to Farris Wilks and THRC Holdings in a manner that resulted in each of them owning 50 % of FTSI (the “FTSI Distribution”), with THRC Holdings receiving a smaller share of the FTSI Distribution and instead retaining certain preferred equity in ProFrac LLC in lieu of its redemption in connection with such distribution. The THRC FTSI Related Equity was the result of a transaction whereby THRC Holdings, which owned approximately 19.5 % of FTSI, agreed to retain that interest in FTSI in lieu of receiving cash pursuant to the FTSI Merger Agreement. We have accounted for the acquisition of FTSI using the acquisition method of accounting. We used our best estimates and assumptions to assign fair value to the tangible and intangible assets expected to be acquired and liabilities expected to be assumed at the acquisition date. The majority of the measurements of assets acquired and liabilities assumed are based on inputs that are not observable in the market and thus represent Level 3 inputs. The following table summarizes the preliminary allocation of the purchase price: (In thousands) Assets acquired: Cash and cash equivalents $ 53,771 Accounts receivable 89,268 Prepaid expense and other assets 4,037 Inventories 42,344 Property, plant and equipment 307,113 Operating lease ROU asset 2,748 Intangible assets 1,239 Other assets 1,583 Total assets acquired 502,103 Liabilities assumed: Accounts payable 62,985 Accrued expenses 19,308 Operating lease liability current 1,235 Current portion of debt 10,136 Other current liabilities 309 Operating lease liability non-current 1,512 Other non-current liabilities 928 Total liabilities assumed 96,413 Net assets acquired $ 405,690 The allocation of the purchase price to FTSI’s net tangible assets and liabilities and identifiable intangible assets as of March 4, 2022, is preliminary and subject to revisions to the fair value calculations for the identifiable assets and liabilities. The determination and allocation of the purchase consideration are subject to change during the measurement period, up to one year from the date the acquisition closed. For the three months ended March 31, 2022, our revenues and pretax earnings included $48.6 million and $0.1 million loss, respectively, associated with the FTSI acquired operations after the closing on March 4, 2022. In addition, FTSI acquisition-related costs of approximately $3.7 million were incurred during the three months ended March 31, 2022, consisting of external legal and consulting fees. These costs are classified in selling, general and administrative expense in the consolidated statements of operations. Additionally, we incurred $9.3 million in severance costs in connection with the FTSI acquisition, which are classified in selling, general and administrative expense in the consolidated statements of operations. Throughout the second quarter of 2022, we integrated FTSI’s operations. As a result, we track all stimulation services assets as one group and it would be impracticable to separately report FTSI revenues or pretax earnings subsequent to March 31, 2022. Flotek Industries, Inc. On February 2, 2022, we entered into an agreement with Flotek Industries, Inc. (“Flotek”), pursuant to which Flotek will provide full downhole chemistry solutions for a minimum of ten hydraulic fleets for three years starting on April 1, 2022, at a price of cost plus 7% (“Flotek Supply Agreement”). In exchange for entry into the Flotek Supply Agreement, we received $10 million in initial principal amount of Flotek Convertible Notes and acquired an additional $10 million in principal amount of Flotek Convertible Notes in the PIPE Transaction. Our equity ownership in Flotek on a fully diluted basis as a result of this investment is approximately 17%. In addition, we received the right to designate up to two directors to Flotek’s board of directors. On February 16, 2022, we and Flotek agreed to amend the Flotek Supply Agreement to increase the term to ten years and increase the scope to 30 fleets. In exchange for our entry into the amendment to the Flotek Supply Agreement (the “Flotek Supply Agreement Amendment”), Flotek agreed to issue us $50 million in initial principal amount of Flotek Convertible Notes that will be convertible into Flotek common stock. The Flotek Supply Agreement Amendment and issuance to us of additional Flotek Convertible Notes were conditioned upon customary closing conditions including the approval of Flotek’s shareholders. In May 2022, the Flotek shareholders approved the Convertible Notes issuance and the Flotek Supply Agreement Amendment. Our equity ownership in Flotek on a fully diluted basis after the consummation of these transactions is approximately 43%, and we are permitted to designate two additional directors, or up to four directors to Flotek’s board of directors. Because of our power to appoint directors to the board of directors without a direct equity interest in Flotek, we determined that Flotek is a VIE. We further determined that the Company is the primary beneficiary of the VIE, primarily due to our ability to appoint four of seven directors to Flotek’s board of directors. As a result, subsequent to May 17, 2022, we have accounted for this transaction as a business combination using the acquisition method of accounting and Flotek’s financial statements have been included in our consolidated financial statements from May 17, 2022. As we had no direct equity interest in Flotek during 2022, we allocated 100% of Flotek’s loss to noncontrolling interests in our consolidated financial statements. The Flotek Supply Agreement Amendment includes a minimum annual volume commitment whereby we will be obligated to pay Flotek liquidated damages equal to 25% of the shortfall for such year, should we fail to meet the minimum purchase amount. At May 17, 2022, we had a supply agreement contract liability of $9.9 million, which was included as purchase consideration for Flotek as a settlement of a pre-existing relationship. All effects of the Supply Agreement have been eliminated from our consolidated financial statements subsequent to May 17, 2022. The notes issued to ProFrac accrue paid-in-kind interest at a rate of 10% per annum, have a maturity of one year, and convert into common stock of Flotek (a) at the holder’s option at any time prior to maturity, at a price of $1.088125 per share, (b) at Flotek’s option, if the volume-weighted average trading price of Flotek’s common stock equals or exceeds $2.50 for 20 trading days during a 30 consecutive trading day period, or (c) at maturity, at a price of $0.8705 (the “Convertible Notes”). We initially recognized the Convertible Notes with an initial principal balance of $20 million at $20 million. At May 17, 2022, we estimated the fair value of these Convertible Notes to be $30.2 million, which was included as purchase consideration for Flotek as a settlement of a pre-existing relationship. All effects of the Flotek Convertible Notes have been eliminated from our consolidated financial statements subsequent to May 17, 2022. Before May 17, 2022, we designated our investment in the Flotek Convertible Notes as trading securities. Securities designated as trading securities are reported at fair value, with gains or losses resulting from changes in fair value recognized in net investment income on the consolidated statements of operations. For the period from February 2, 2022 through May 17, 2022 we recognized noncash income of $10.2 million as other (expense) income on our consolidated statements of operations related to the change in fair value of the Flotek Convertible Notes. In June 2022, Flotek issued and sold to ProFrac II LLC, a wholly-owned subsidiary of ProFrac LLC, pre-funded warrants to purchase from Flotek up to approximately 13.1 million shares of Flotek common stock at any time and at an exercise price equal to $0.0001 per share, in exchange for $19.5 million in cash. ProFrac II LLC and its affiliates may not receive any voting or consent rights in respect of these warrants or the underlying shares unless and until (i) Flotek has obtained approval from a majority of its shareholders excluding ProFrac II LLC and its affiliates and (ii) ProFrac II LLC has paid an additional $4.5 million to Flotek. We entered into this transaction to provide additional working capital to Flotek to enable it to perform under the Flotek Supply Agreement Amendment. The following table summarizes the preliminary allocation of the fair value of Flotek’s assets, liabilities and noncontrolling interest: (In thousands) Settlement of pre-existing relationships Accounts payable $ (2,713 ) Supply Agreement contract liability (9,874 ) Fair value of previously held interest in 10% Convertible PIK Notes 30,220 Settlement of pre-existing relationships $ 17,633 Assets acquired Cash and cash equivalents $ 21,725 Restricted cash 40 Accounts receivable 18,853 Inventories 12,210 Assets held for sale 1,805 Other current assets 3,405 Property and equipment 21,551 Operating lease right-of-use assets 3,884 Deferred tax assets 282 Goodwill 82,340 Other long-term assets 17 Total assets acquired 166,112 Liabilities assumed: Accounts payable and accrued liabilities 24,203 Operating lease liabilities 7,394 Finance lease liabilities 79 Long-term debt 17,101 Other liabilities 85 Total liabilities assumed 48,862 Noncontrolling interests 99,617 Assets acquired less liabilities assumed and noncontrolling interests $ 17,633 We used our best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. The majority of the measurements of assets acquired and liabilities assumed are based on inputs that are not observable in the market and thus represent Level 3 inputs. The fair value of the noncontrolling interest was based on the Flotek common stock price reported by the New York Stock Exchange at the date of the acquisition, which represented Level 1 inputs. No portion of the recorded goodwill is tax deductible. For the nine month period ended September 30, 2022, our revenues and pretax earnings included $21.2 million and $21.1 million loss, respectively, associated with the Flotek acquired operations after May 17, 2022. The entire pretax loss was allocated to noncontrolling interests. The allocation of the purchase price to Flotek’s net tangible assets and liabilities and identifiable intangible assets as of May 17, 2022, is preliminary and subject to revisions to the fair value calculations for the identifiable assets and liabilities. The determination and allocation of the purchase consideration are subject to change during the measurement period, up to one year from the date the acquisition closed. SP Silica of Monahans, LLC On July 25, 2022, the Company acquired 100% of the issued and outstanding membership interests of each of SP Silica of Monahans, LLC and SP Silica Sales, LLC (collectively “Monahans”), the West Texas subsidiaries of Signal Peak Silica, for a purchase price of $97.7 million in cash. This purchase price is subject to a working capital adjustment that will be finalized in the fourth quarter of 2022. We have accounted for the acquisition of Monahans using the acquisition method of accounting. We used our best estimates and assumptions to assign fair value to the tangible and intangible assets acquired and liabilities assumed at the acquisition date. The majority of the measurements of assets acquired and liabilities assumed are based on inputs that are not observable in the market and thus represent Level 3 inputs. The following table summarizes the preliminary allocation of the purchase price: (In thousands) Assets acquired: Cash and cash equivalents $ 61 Accounts receivable 11,117 Prepaid expense and other assets 596 Inventories 3,148 Property, plant and equipment 103,665 Intangible assets 7,500 Goodwill 15,233 Other assets 8,916 Total assets acquired 150,236 Liabilities assumed: Accounts payable 9,783 Accrued expenses 1,035 Deferred revenue 4,335 Current portion of debt 45 Other current liabilities 15,757 Long-term debt 25 Other non-current liabilities 21,596 Total liabilities assumed 52,576 Net assets acquired $ 97,660 Throughout the third quarter of 2022, we integrated Monahans operations. As a result, we track all proppant production assets as one group and it would be impracticable to separately report Monahans revenues or pretax earnings subsequent to the acquisition date. The allocation of the purchase price to Monahans net tangible assets and liabilities and identifiable intangible assets as of July 25, 2022, is preliminary and subject to revisions to the fair value calculations for the identifiable assets and liabilities. The determination and allocation of the purchase consideration are subject to change during the measurement period, up to one year from the date the acquisition closed. The following unaudited pro forma results of operations have been prepared as though the FTSI, Flotek, and Monahans acquisitions had been completed on January 1, 2021. Pro forma amounts are based on the purchase price allocation of the significant acquisition and are not necessarily indicative of the results that may be reported in the future. Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2022 2021 2022 2021 Revenue $ 705,900 $ 303,267 $ 1,763,830 $ 852,069 Net income (loss) $ 144,895 $ (40,763 ) $ 195,268 $ (136,403 ) Basin Production and Completion LLC During the year ended December 31, 2021, the Company purchased Series B-1 Preferred Units of Basin Production and Completion LLC (“BPC”), a manufacturer of equipment used in hydraulic fracturing for $4.2 million. This comprises approximately 20% of the BPC Series B Preferred Units. As of December 31, 2021, we did not exercise significant influence over this entity. As we determined this to be an equity security, we initially recorded our investment at cost, presented as “Investments” in our consolidated balance sheets as of December 31, 2021. On February 9, 2022, the Company entered into an agreement to purchase all the series A-1 and B-1 preferred units of BPC for $46.0 million (“Basin Units Acquisition”), consisting of $40.0 million to BPC for series A-1 and B-1 preferred units and $6.0 million to selling holders of BPC series B-1 preferred units. Additionally, on February 14, 2022, the Company made a loan to FHE, a subsidiary of BPC for $1.25 million. The loan bears interest at the rate of 5% per annum. Interest is either paid at each calendar quarter end or added to the principal balance at the election of BPC. The loan matures on February 14, 2027. Subsequent to February 9, 2022, our investments in BPC provide the Company the ability to have significant influence, but not control over BPC’s operations. BPC's business and affairs are managed under the direction of its board of directors, which the Company does not control. Based on our evaluation, we determined that BPC is a VIE, but the Company is not the primary beneficiary of the VIE. We have elected the fair value option to account for our equity method investment in BPC. See Note 16 — Fair Value of Financial Interests for more information on our investments using Level 3 measurements. At September 30, 2022, the estimated fair value of these investments in BPC was $49.8 million. EKU On December 22, 2020, the Company purchased a 25% stake in EKU, an equipment manufacturer based in Germany, for $1.2 million. For the year ended December 31, 2020, we accounted for this investment using the equity method as we had significant influence over EKU, and held a voting interest of 20% or greater, but less than 50%. In January 2021, the Company obtained a controlling interest in EKU, the results of which are consolidated thereafter. The Company obtained a 75% controlling interest in EKU in January 2021 and performed a purchase price allocation in conjunction with the consolidation of this subsidiary. We recognized net working capital of $2.5 million, property, plant and equipment of $0.4 million, intangible assets of $3.5 million and debt of $1.4 million at estimated fair value. In consolidation, we eliminated our investment in associate, recognized equity of $3.7 million for the value of our 75% interest, and noncontrolling interest of $1.2 million for the value of the minority shareholder positions. See Note 6 – Intangible Assets for additional information related to the recognized intangible assets. Munger Ranch The Company entered into an agreement to acquire property in West Texas (“Munger Right Agreement”) in November 2021 for a purchase price of $30.0 million. Under the Munger Right Agreement, the sellers were given the option to receive the consideration in cash, or in the event of an IPO prior to November 17, 2022, in equity, at the sellers’ election. Under the equity option, in the event the Company completes an IPO, the sellers would be entitled to 1.5% of the outstanding shares of common stock immediately following the IPO. Each seller ultimately elected the equity option, as such this was a non-cash transaction for the Company for the year ended December 31, 2021. The Munger Right Agreement includes a ‘Make Whole’ provision. Under the Make Whole provision, if any seller liquidates 100% of the shares of our Class A Common Stock they are issued prior to the one-year anniversary of the IPO and the value of the shares sold does not equal such seller’s share of the $30.0 million purchase price, then the Company will pay the difference between the amount of cash the seller would have received had they elected the cash option and the amount they ultimately received upon the sale of the Class A shares issued under the equity option. This Make Whole provision is accounted for as a written put option with a fair value of $5.0 million as of September 30, 2022 and is presented within Other Current Liabilities in our Balance Sheet. The acquired property was treated as an asset acquisition and not an acquisition of a business, and is presented within Property, plant, and equipment in our consolidated balance sheets. On February 4, 2022, THRC Holdings entered into a Rights Agreement with Encantor Properties LP, one of the sellers from whom the Company purchased the Munger Ranch property, under which the related party was assigned rights to $8.1 million of the $30.0 million in consideration related to the Munger Ranch purchase. As part of the IPO completed in May 2022, the Company issued 2,114,273 shares of Class A Common Stock worth $38.1 million as consideration for the Munger Ranch purchase. iO-TEQ, LLC The Company acquired iO-TEQ, LLC (“IOT”) in October 2021 for $2.2 million and performed a purchase price allocation at the acquisition date. We recognized net working capital of $0.2 million, property, plant and equipment of $0.1 million, intangible assets of $2.4 million and debt of $0.4 million at estimated fair value. See Note 6 – Intangible Assets for additional information related to the recognized intangible assets. Best Flow minority interests In December 2021, the Company entered into an agreement with Eagleton Venture, Inc. (“Eagleton”) to purchase Eagleton’s 15.172% interest in Best Flow for a purchase price of $3.9 million, which the company paid in cash, during the three months ended March 31, 2022. |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill | 15. Goodwill The changes in the carrying amount of goodwill by reportable segment were as follows for the nine months ended September 30, 2022. Stimulation services Manufacturing Proppant production Other Total Balances at December 31, 2021 $ — $ — $ — $ — $ — Acquisition of Flotek — — — 82,340 82,340 Acquisition of Monahans — — 15,233 — 15,233 Balances at September 30, 2022 $ — $ — $ 15,233 $ 82,340 $ 97,573 |
Fair value of financial instrum
Fair value of financial instruments | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair value of financial instruments | 16. Fair value of financial instruments Assets and liabilities recorded on a recurring basis in the balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair values. The Company’s financial instruments and investments that are carried at fair value consist mainly of Level 3 assets. Level 3 assets that have been measured on a recurring basis during 2022 relate to the Company’s investments in (i) Convertible Notes of Flotek, designated as trading securities up to the acquisition date of Flotek and (ii) the equity method investment in BPC, for which we elected the fair value option, as described in Note 14 – Acquisitions and investments. The Company did not have any assets or liabilities measured at fair value using Level 2 of the fair value hierarchy at September 30, 2022. We had no Level 2 or Level 3 assets or liabilities as of December 31, 2021. The estimated fair value of the BPC investment as of September 30, 2022 was determined using a combination of the market and income approaches. The following table sets forth the fair value of the Company’s financial instruments within Level 3 of the fair value hierarchy. (In thousands) September 30, 2022 Level 3 BPC Investment 49,752 Total $ 49,752 The following is a reconciliation of the beginning and ending balances for assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) from inception to September 30, 2022: (In thousands) Level 3 Fair value as of January 1, 2022 $ — Acquisition of Flotek Convertible Notes 20,000 Acquisition of investment in BPC 47,202 Transfer of cost method investment to Level 3 fair value measurement 4,244 Change in fair value of Level 3 fair value measurements 8,100 Fair value as of March 31, 2022 $ 79,546 Change in Flotek fair value up to acquisition date 2,120 Elimination of Flotek convertible notes at acquisition date (30,220 ) Change in BPC fair value (1,694 ) Fair value as of September 30, 2022 $ 49,752 The estimated fair value of the Flotek Convertible Notes prior to our consolidation of Flotek on May 17, 2022 was valued using a Monte Carlo simulation with inputs such as the market trading price of Flotek’s common stock, the expected volatility of the Flotek’s stock price based on historical trends, a risk-free rate of interest based on US Treasury note rates and the term of the debt, the time to liquidation based on the maturity date of the notes, and a discount rate adjusted based on the credit risk of Flotek. The key inputs into the Monte Carlo simulation used to estimate the fair value the Convertible Notes were as follows: May 17, 2022 March 31, 2022 Risk-free interest rate 1.82 % 1.63 % Expected volatility 90.0 % 90.0 % Term until liquidation (years) 0.72 0.84 Stock price $ 1.29 $ 1.26 |
Commitments and contingencies
Commitments and contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and contingencies | 17. Commitments and contingencies Litigation In the ordinary course of business, we are the subject of, or party to a number of pending or threatened legal actions and administrative proceedings arising in the ordinary course of our business. While many of these matters involve inherent uncertainty, we believe that, other than as described below, the amount of the liability, if any, ultimately incurred with respect to proceedings or claims will not have a material adverse effect on our consolidated financial position as a whole or on our liquidity, capital resources or future annual results of operations. Patterson v. FTS International Manufacturing, LLC and FTS International Services, LLC : On June 24, 2015, Joshua Patterson filed a lawsuit against the Company in the 115th Judicial District Court of Upshur County, Texas, alleging, among other things, that the Company was negligent with respect to an automobile accident in 2013. Mr. Patterson sought monetary relief of more than $1 million. On July 19, 2018, a jury returned a verdict of approximately $100 million, including punitive damages, against the Company. The trial court reduced the judgment on November 12, 2018, to approximately $33 million. The Company’s insurance carriers appealed and the Twelfth Court of Appeals reversed the verdict in its entirety on August 26, 2020, remanding the case for a new trial. The Company’s insurance carriers are currently appealing one of the appellate findings with the Texas Supreme Court. No new trial date has been set. While the outcome of this case is uncertain, the Company has met its insurance deductible for this matter and we do not expect the ultimate resolution of this case to have a material adverse effect on our consolidated financial statements. Lonestar Prospects, Ltd. d/b/a Vista Sand v. ProFrac Services, LLC : ProFrac Services, LLC (“ProFrac Services”) entered into a Master Purchase Agreement For Products And/Or Services with Lonestar Prospects, Ltd. d/b/a Vista Sand (“Vista”), dated November 27, 2017 (the “Vista MSA”), as amended by the First Addendum to Vista MSA and the First Amendment to Vista MSA, both of which are dated June 10, 2018 (collectively, the “Vista Agreement”). Under the terms of the Vista Agreement, ProFrac Services agreed to purchase certain quantities of sand from Vista. Vista filed a complaint against ProFrac Services in the United States Bankruptcy Court for the Northern District of Texas on March 15, 2021, in which it alleges that ProFrac Services breached the terms of the Vista Agreement by failing to purchase the required amount of sand or pay for the underpurchased amounts as required by the Vista Agreement. Vista is seeking damages of approximately $8.3 million. Vista and ProFrac Services have entered into a mutually agreed upon Scheduling Order signed by the Court on February 12, 2022. Trial docket call for this matter is currently scheduled for December 5 , 2022. We estimate and provide for potential losses that may arise out of legal proceedings and claims to the extent that such losses are probable and can be reasonably estimated. Significant judgment is required in making these estimates and our final liabilities may ultimately be materially different from these estimates. When preparing our estimates, we consider, among other factors, the progress of each legal proceeding and claim, our experience and the experience of others in similar legal proceedings and claims, and the opinions and views of legal counsel. Legal costs related to litigation contingencies are expensed as incurred. |
Segment information
Segment information | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Segment information | 18. Segment information Our business has three reportable segments: Stimulation services, Manufacturing and Proppant production. Each reportable segment represents a separate business unit that operated as a standalone company prior to the reorganization of the Company in December 2021. Following the reorganization, each reportable segment continues to have distinct management and prepares discrete financial information for the segment (consistent with when each operated as a standalone business). FTSI is part of our stimulation services segment and Monahans is part of our proppant production segment. Amounts in the other category reflect our business activities that are not separately reportable, which primarily included Flotek for the periods presented. Our chief operating decision makers review the discrete segment financial information, including Adjusted EBITDA as the measure of profitability, to evaluate the performance of our segments and make resource allocation decisions. We account for intersegment transactions as if the transactions were with third parties, that is, at estimated current market prices. For the three and nine months ended September 30, 2022 and 2021, intersegment revenues for the manufacturing segment were 95% and 91% and 91% and 88%, respectively. For the three and nine months ended September 30, 2022 and 2021, intersegment revenues for the proppant production segment were 56% and 46% and 61% and 40%, respectively. The performance of our segments is evaluated primarily on Adjusted EBITDA. We define Adjusted EBITDA as our net income (loss), before (i) interest expense, net, (ii) income tax provision, (iii) depreciation, depletion and amortization, (iv) loss on disposal of assets, and (v) stock-based compensation, and (vi) other unusual or non-recurring charges, such as costs related to our initial public offering, non-recurring supply commitment charges, certain bad debt expense, loss on extinguishment of debt and gain on investments. Segment information, and a reconciliation of Adjusted EBITDA, for the three and nine months ended September 30, 2022 and 2021 is as follows: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2022 2021 2022 2021 Revenues Stimulation services $ 668,578 $ 190,723 $ 1,581,289 $ 502,932 Manufacturing 48,742 19,861 115,602 50,741 Proppant production 24,642 6,399 54,581 19,769 Other 46,872 — 62,231 — Total segments 788,834 216,983 1,813,703 573,442 Eliminations (92,104 ) (21,052 ) (182,149 ) (53,106 ) Total $ 696,730 $ 195,931 $ 1,631,554 $ 520,336 Adjusted EBITDA Stimulation services $ 249,557 $ 31,599 $ 519,214 $ 75,027 Manufacturing 8,416 502 27,798 3,181 Proppant production 9,198 2,417 29,657 8,069 Other (11,072 ) — (18,526 ) — Adjusted EBITDA for reportable segments 256,099 34,518 558,143 86,277 Interest expense, net (16,261 ) (6,896 ) (38,984 ) (19,118 ) Depreciation, depletion and amortization (68,758 ) (35,241 ) (177,038 ) (105,606 ) Income tax benefit (provision) (8,157 ) (170 ) (13,021 ) 138 Loss on disposal of assets, net (667 ) (3,397 ) (2,656 ) (7,472 ) Loss on extinguishment of debt (242 ) — (17,337 ) — Litigation accrual — — (4,000 ) — Stock compensation expense (2,719 ) — (4,174 ) — Stock compensation expense related to deemed contributions (10,207 ) — (49,056 ) — Bad debt expense, net of recoveries — (2,562 ) (5 ) (2,562 ) Loss on foreign currency transactions 80 (116 ) 126 (116 ) Reorganization costs — (211 ) (55 ) (211 ) Acquisition related expenses (5,806 ) — (22,888 ) — Unrealized gain on investments, net — — 8,526 — Net income (loss) $ 143,362 $ (14,075 ) $ 237,581 $ (48,670 ) Segment information as of September 30, 2022 and December 31, 2021 is as follows: (In thousands) September 30, 2022 December 31, 2021 Total assets Stimulation services $ 1,663,989 $ 510,579 Manufacturing 140,396 77,968 Proppant production 298,138 100,294 Other 196,946 — Total segment assets 2,299,469 688,841 Eliminations (320,185 ) (24,271 ) Total $ 1,979,284 $ 664,570 |
Subsequent events
Subsequent events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent events | 19. Subsequent events Acquisition of U.S. Well Services, Inc. On November 1, 2022, the Company acquired U.S. Well Services, Inc. (NASDAQ: USWS) (“USWS”) in a stock-for-stock merger transaction pursuant to the Agreement and Plan of Merger (the “USWS Merger Agreement”), dated as of June 21, 2022, by and among the Company, USWS and Thunderclap Merger Sub I, Inc., a Delaware corporation and an indirect subsidiary of the Company (“Merger Sub”). Pursuant to the terms and conditions of the USWS Merger Agreement, on November 1, 2022, Merger Sub merged with and into USWS, with USWS surviving the merger as the surviving corporation and an indirect subsidiary of the Company. At the effective time of the merger, each share of USWS Class A Common Stock was converted automatically into the right to receive 0.3366 shares of the Company’s Class A Common Stock. As a result of this transaction, the Company issued an aggregate of approximately 12.9 million shares of its Class A Common Stock to holders of USWS Class A Common Stock, USWS Series A Preferred Stock, USWS Equity Linked Convertible Notes (as such terms are defined in the USWS Merger Agreement), and USWS equity awards. The equity issued, based on the Company’s Class A Common Stock 10-day VWAP as of October 31, 2022, was approximately $270 million. In addition, the Company used cash to retire approximately $170 million of USWS debt, leaving approximately $35 million of various forms of equipment related financing outstanding. Pursuant to the terms of the USWS Merger Agreement, the Company assumed the obligations of USWS under certain of its public and private warrants, including those that traded on NASDAQ. These warrants now represent the right to receive, upon valid exercise thereof, shares of the Company’s Class A Common Stock in an amount equal to the product of (i) the number of shares of USWS Class A Common Stock subject to such warrant immediately prior to the effective time of the merger and (ii) 0.3366. The assumed public warrants are traded on NASDAQ under the symbol “ACDCW.” In addition, pursuant to a warrant purchase agreement entered into concurrently with the execution of the USWS Merger Agreement, the Company purchased all of the outstanding February Term C Loan Warrants and March Term C Loan Warrants (as such terms are defined in the USWS Merger Agreement) of USWS from their holders for total aggregate consideration of approximately $2.6 million, which warrants were automatically canceled and ceased to exist as of the effective time of the merger. In connection with the Company’s acquisition of USWS, the ABL Borrower borrowed approximately $164 million under the Amended ABL Credit Facility (as defined herein). See below for additional discussion regarding the Amended ABL Credit Facility. Dan Wilks and Farris Wilks, together with certain of their affiliates, (collectively, the “Wilks Parties”) collectively hold a controlling interest in the Company. Certain Wilks Parties also owned certain securities of USWS. Upon the consummation of the merger, the Wilks Parties received approximately 4.1 million shares of ProFrac Class A Common Stock as merger consideration. The accounting for this acquisition is in process and will be completed in the fourth quarter. Amendment to New Term Loan Credit Facility. On November 1, 2022, the Company entered into a second amendment to the New Term Loan Credit Facility (as amended, the “Amended New Term Loan Credit Facility”), pursuant to which the Agent and the Required Lenders have agreed to: (a) consent to (i) the Amended ABL Credit Facility; (ii) certain existing debt of U.S. Well Services Holdings, LLC (successor by conversion to USWS), a Delaware limited liability company (“U.S. Well LLC”), and each of its subsidiaries (collectively, the “U.S. Well Entities”), remaining outstanding (the “U.S. Well Debt”) following the Company’s acquisition of USWS; (iii) the corresponding liens on the assets of the U.S. Well Entities securing such U.S. Well Debt (the “U.S. Well Liens”) remaining outstanding following the acquisition; and (iv) any restrictions existing under the agreements evidencing the U.S. Well Debt, which would otherwise be prohibited under the Amended Term Loan Credit Facility and (b) waive any defaults and/or events of default arising as a result of the defaults and/or events of default existing under the agreements evidencing the U.S. Wells Debt, including without limitation, as a result of the consummation of the First Amendment Acquisition (as defined in the Amended Term Loan Credit Facility) with respect to the U.S. Well Entities, subject to the terms and conditions set forth in the Amended Term Loan Agreement. Immediately following consummation of the Company’s acquisition of USWS, the U.S. Well Debt was repaid in full and the U.S. Well Liens were all released. Amendment to New ABL Credit Facility. On November 1, 2022, the Company entered into a second amendment to the New ABL Credit Facility (as amended, the “Amended ABL Credit Facility”), pursuant to which the Agent and the Lenders have agreed to: (a) consent to U.S. Well LLC and its subsidiaries becoming Restricted Subsidiaries (as defined in the Amended Term Loan Credit Facility) of ProFrac LLC immediately prior the payment in full of certain U.S. Well Debt and the termination and release of certain U.S. Well Liens and agree that the existence of such debt or liens any restrictions in the applicable documents will not trigger a default or event of default under the Amended ABL Credit Facility and (b) waive any defaults and/or events of default under the ABL Credit Facility and the other applicable loan documents solely relating to or arising from (i) U.S. Well and its subsidiaries becoming Restricted Subsidiaries of ProFrac LLC immediately prior the payment in full of the certain of the U.S. Well Debt and the termination and release of certain U.S. Well Liens and (ii) any defaults and/or events of default existing under the applicable documents which govern the U.S. Well Debt, including without limitation, as a result of the consummation of the Merger, subject to the terms and conditions set forth in the Amended ABL Credit Facility. Under the Amended ABL Credit Facility, (i) the aggregate Maximum Revolver Amount (as defined in the Amended ABL Credit Facility) was increased from $200.0 million to $280.0 million as of the Second Amendment Effective Date (as defined in the Amended ABL Credit Facility) and (ii) the Borrower is entitled to request up to $120.0 million of additional Revolving Credit Commitment Increases (as defined in the Amended ABL Credit Facility) after the Second Amendment Effective Date subject to certain terms and conditions provided that, as of the Second Amendment Effective Date, such additional Revolving Credit Commitment Increases are uncommitted. In connection with the Company’s acquisition of USWS, the ABL Borrower borrowed approximately $164 million under the Amended Credit Facility. Immediately prior to this draw down, there were no amounts outstanding under the Amended ABL Credit Facility. |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial reporting and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2021 included within the Company’s final prospectus filed with the SEC on May 16, 2022, pursuant to Rule 424(b) under the Securities Act. The consolidated financial statements include the accounts of the Company and all majority-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. In our opinion, all adjustments considered necessary for a fair statement have been included in the accompanying unaudited financial statements. Operating results for the three and nine months ended September 30, 2022, are not necessarily indicative of the results that may be expected for the full year ending December 31, 2022. The December 31, 2021, balance sheet information has been derived from the 2021 audited financial statements of ProFrac Predecessor. |
Use of estimates | Use of estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect (1) the reported amounts of assets and liabilities and (2) the reported amounts of revenue and expenses during the reporting period. We base these estimates on historical results and various other assumptions believed to be reasonable, all of which form the basis for making estimates concerning the carrying values of assets and liabilities that are not readily available from other sources. |
Leases | Leases The Company determines if an arrangement is a lease at inception of the arrangement. To the extent that we determine an arrangement represents a lease, we classify that lease as an operating lease or a finance lease. We capitalize operating and finance leases on our consolidated balance sheets through a right-of-use (“ROU”) asset and a corresponding lease liability. ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. See Note 12 – Leases for additional information. Operating and finance lease ROU assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term. Lease expense for operating leases is recognized on a straight-line basis over the lease term. |
Revenue recognition | Revenue recognition The Company’s products and services are sold based upon contracts with customers. The Company recognizes revenue as it satisfies performance obligations by transferring control over a service or product to a customer. Payment terms are specified in each customer agreement and are typically a specific number of days following satisfaction of the performance obligation. The following are descriptions of the principal activities of each reportable segment from which the Company generates its revenue. Stimulation services. We generate revenue through the provision of hydraulic fracturing services, which involves the injection of water, sand and chemicals under high pressure into formations to optimize hydrocarbon flow paths during the completion phase of wellbores. Our contracts with customers are short term in nature, typically less than four weeks, and have a single performance obligation, which is the contracted total stages, satisfied over time. Once a stage has been completed, a field ticket is created which includes charges for services performed and any inputs consumed during the service. The signing of the field ticket by a customer representative represents their acceptance of the service and agreement to the amounts to which the Company has the right to invoice and recognize as revenue. We believe that recognizing revenue based on actual stages completed, upon receipt of a signed field ticket, appropriately depicts how our hydraulic fracturing services are transferred to our customers over time. Manufacturing. We generate revenue through sales of equipment used to perform oilfield services. The performance obligation is satisfied and revenues are recognized at the point-in-time that control of goods are transferred to the customer, generally upon shipment from our manufacturing facility. Payment terms are specified in each customer agreement and are typically a specific number of days following satisfaction of the performance obligation. Proppant production. We generate revenue through the sale of frac sand to oilfield service providers and E&P companies. The performance obligation is satisfied and revenue is recognized at the point-in-time that control of the product is transferred to the customer, generally upon shipment from our facility. We charge our customers on a per-ton basis at current market prices. Payment terms are specified in each customer agreement and are typically a specific number of days following satisfaction of the performance obligation. Taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and are therefore excluded from revenues in the consolidated statements of operations . |
Business Combinations | Business Combinations Business combinations are accounted for under the acquisition method of accounting. Under this method, the assets acquired and liabilities assumed are recognized at their respective fair values as of the date of acquisition. The excess, if any, of the acquisition price over the fair values of the assets acquired and liabilities assumed is recorded as goodwill. For significant acquisitions, we utilize third-party appraisal firms to assist us in determining the fair values for certain assets acquired and liabilities assumed. The measurement of these fair values requires us to make significant estimates and assumptions which are inherently uncertain. Adjustments to the fair values of assets acquired and liabilities assumed are made until we obtain all relevant information regarding the facts and circumstances that existed as of the acquisition date (the “measurement period”), not to exceed one year from the date of the acquisition. We recognize measurement-period adjustments in the period in which we determine the amounts, including the effect on earnings of any amounts we would have recorded in previous periods if the accounting had been completed at the acquisition date. See Note 14 — Acquisitions and investments for information on acquisitions completed during the historical period. |
Goodwill | Goodwill We have acquired goodwill related to business acquisitions. Goodwill represents the excess of the purchase price over the fair value of net assets acquired. We review our goodwill on an annual basis, at the beginning of the fourth quarter, and whenever events or changes in circumstances indicate the carrying value of goodwill may exceed its fair value. If the carrying value of goodwill exceeds its fair value, we recognize an impairment loss for this difference. |
Variable Interest Entities | Variable Interest Entities We evaluate our ownership, contractual and other interest in entities to determine if they are variable interest entities (“VIE”). We evaluate whether we have a variable interest in those entities and the nature and extent of those interests. Based on our evaluation, if we determine we are the primary beneficiary of a VIE, we consolidate the entity in our financial statements. |
Fair value measurements | Fair value measurements Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at a measurement date. We apply the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases of categorization within the hierarchy upon the lowest level input that is available and significant to the fair value measurement: • Level 1: The use of quoted prices in active markets for identical assets or liabilities. • Level 2: Other than quoted prices included in Level 1, inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. At September 30, 2022, we had no Level 2 measurements. • Level 3: The use of significant unobservable inputs that typically require the use of management’s estimates of assumptions that market participants would use in pricing. See Note 16 — Fair Value of Financial Interests for more information on our investments using Level 3 measurements. Our current assets and liabilities contain financial instruments, the most significant of which are trade accounts receivable and payable. We believe the carrying value of our current assets and liabilities approximate fair value. Our fair value assessment incorporates a variety of considerations, including: (i) the short-term duration of the instruments and (ii) our historical incurrence of and expectations of future bad debt expense. The book value of our floating rate debt approximates fair value because of its floating rate structure. |
Income taxes | Income taxes Before May 12, 2022, the ProFrac Predecessor entities were organized as limited liability companies or a limited partnership and were treated as either a disregarded entity or a partnership for U.S. federal income tax purposes, whereby the ordinary business income or loss and certain deductions were passed-through and reported on the members’ income tax returns. As such, the Company was not required to account for U.S. federal income taxes in the consolidated financial statements. Certain state income-based taxes are imposed on the Company which are reflected as income tax expense or benefit in historical periods. In connection with the IPO in May 2022 , the Company reorganized and ProFrac LLC became partially owned by ProFrac Corp., a U.S. Internal Revenue Code Subchapter C corporation (“C-Corporation”). ProFrac Corp. is a taxable entity and is required to account for income taxes under the asset and liability method for periods subsequent to May 12, 2022. Under the asset and liability method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled pursuant to the provisions of Accounting Standards Codification (“ASC”) 740, Income Taxes. The effect on deferred tax assets and liabilities of a change in tax rate is recognized in earnings in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts more-likely-than-not to be realized. |
Recently adopted accounting standards | Recently adopted accounting standards On January 1, 2022, we adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) for “Leases,” which amended existing guidance to require lessees to recognize liabilities and ROU assets on the balance sheet for the rights and obligations created by long-term leases and to disclose additional quantitative and qualitative information about leasing arrangements. We adopted this guidance using the current period adjustment approach on January 1, 2022 using the transition method that allows a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. We have completed our process to implement this standard, and we have designed processes and internal controls necessary for adoption of this standard. We have made policy elections to (i) not capitalize short-term leases for all asset classes, (ii) not separate non-lease components from lease components for all of our existing asset classes, (iii) apply the package of practical expedients that allows us to not reassess: whether any expired or existing contracts contain leases, lease classification for any expired or existing leases and initial direct costs for existing leases and (iv) apply the practical expedient to apply hindsight in estimating lease term and impairment. The impact of applying this standard is not expected to significantly impact our results of operations or cash flows. As of January 1, 2022, we recognized ROU assets and liabilities of approximately $35.8 million from operating leases on our consolidated balance sheet. See Note 12 - Leases for additional disclosures related to our adoption this accounting standards update. New accounting standards to be adopted We have not yet implemented FASB ASU No. 2016-13, Financial Instruments – Credit Losses. The ASU introduces a new accounting model, the Current Expected Credit Losses model (“CECL”), which requires recognition of credit losses and additional disclosures related to credit risk. The CECL model utilizes a lifetime expected credit loss measurement objective for the recognition of credit losses for loans and other receivables at the time the financial asset is originated or acquired. The expected credit losses are adjusted each period for changes in expected lifetime credit losses. This model replaces the multiple existing impairment models previously used under GAAP, which generally require that a loss be incurred before it is recognized. The new standard also applies to financial assets arising from revenue transactions such as contract assets and accounts receivable. Implementation is currently required for fiscal years beginning after December 15, 2022. The Company does not believe implementation will have a material impact on its financial statements. We have not yet implemented FASB ASU No. 2019-12, Income Taxes (Topic 740) – Simplifying the Accounting for Income Taxes, which removes specific exceptions to the general principles in Topic 740 under GAAP. The new guidance also improves the application of income tax-related guidance and simplifies GAAP for franchise taxes that are partially based on income, transactions with a government that result in a step up in the tax basis of goodwill, separate financial statements of legal entities that are not subject to tax, and enacted changes in tax laws in interim periods. The new guidance will be effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022; however, early adoption is permitted. The Company is currently evaluating the impact of adopting the new guidance on its consolidated financial statements. |
Organization and description _2
Organization and description of business (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Schedule of Redeemable Noncontrolling Interests | From January 1, 2022 through September 30, 2022, we recorded adjustments to the value of our redeemable noncontrolling interests as shown below: Redeemable Noncontrolling Interests (in thousands) 2022 Balance as of January 1, 2022 $ — Effect of corporate reorganization and reclassification to redeemable noncontrolling interest 382,050 Adjustment of redeemable noncontrolling interest to redemption amount at IPO (1) 1,438,348 Class A Common Stock issued to settle asset purchase 21,361 Net income after corporate reorganization 16,082 Stock-based compensation 660 Stock-based compensation related to deemed contribution 27,597 Accrued distribution related to income taxes (15,644 ) Adjustment of redeemable noncontrolling interest to redemption amount (2) 154,233 Balance as of June 30, 2022 $ 2,024,687 Net income 110,183 Stock-based compensation 1,465 Stock-based compensation related to deemed contribution 7,251 Foreign currency translation adjustments 110 Change in accrued distribution related to income taxes (5,470 ) Adjustment of redeemable noncontrolling interest to redemption amount (3) (493,800 ) Balance as of September 30, 2022 $ 1,644,426 (1) Based on 101,133,201 shares of Class B Common Stock outstanding and the $18.00 per share IPO price. (2) Based on 101,133,201 shares of Class B Common Stock outstanding and the 10-day VWAP of Class A Common Stock of $20.02 at June 30, 2022. (3) Based on 101,133,201 shares of Class B Common Stock outstanding and the 10-day VWAP of Class A Common Stock of $16.26 at September 30, 2022. |
Restricted cash (Tables)
Restricted cash (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Cash And Cash Equivalents [Abstract] | |
Reconciliation of Cash, Cash Equivalents, and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated statement of cash flows as of September 30, 2022, and December 31, 2021: (In thousands) September 30, 2022 December 31, 2021 Cash and cash equivalents $ 64,678 $ 5,376 Restricted cash included in prepaid expenses and other current assets 2,064 — Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows $ 66,742 $ 5,376 |
Supplemental balance sheet in_2
Supplemental balance sheet information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Balance Sheet Related Disclosures [Abstract] | |
Summary of Inventories | Inventories The following table summarizes the components of our inventories as of September 30, 2022, and December 31, 2021: (In thousands) September 30, 2022 December 31, 2021 Raw materials and supplies $ 107,303 $ 13,911 Work in process 9,987 3,288 Finished products and parts 121,504 56,743 Total $ 238,794 $ 73,942 |
Summary of Accrued Expenses | The following table summarizes our accrued expenses as of September 30, 2022, and December 31, 2021: (In thousands) September 30, 2022 December 31, 2021 Accrual for purchased materials $ 71,286 $ 15,600 Employee compensation and benefits 29,860 8,107 Sales, use, and property taxes 21,082 5,974 Interest 13,130 879 Income taxes 10,665 — Tax receivable agreement 3,491 — Tax distribution to redeemable noncontrolling interests 21,114 — Other 23,693 7,589 Total $ 194,321 $ 38,149 |
Property, plant, and equipment
Property, plant, and equipment (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property Plant And Equipment [Abstract] | |
Summary of Components of Property Plant and Equipment Net | The following table summarizes the components of our property, plant, and equipment, net as of September 30, 2022, and December 31, 2021: (In thousands) September 30, 2022 December 31, 2021 Machinery and equipment $ 1,180,092 $ 760,829 Mining property and mine development 97,265 34,809 Office equipment, software and other 15,156 5,550 Land 950 — Buildings and leasehold improvements 27,373 15,947 Total 1,320,836 817,135 Less: accumulated depreciation and depletion (632,801 ) (464,178 ) Construction in progress 133,174 10,730 Property, plant, and equipment, net $ 821,209 $ 363,687 |
Major Classifications of Property Plant and Equipment and Respective Useful Lives | Machinery and equipment 2 years—10 years Office equipment, software, and other 3 years—7 years Buildings and leasehold improvements 2 years—40 years |
Intangible assets (Tables)
Intangible assets (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Components of Finite-Lived Intangible Assets | The following table summarizes the components of our finite-lived intangible assets as of September 30, 2022, and December 31, 2021: September 30, 2022 December 31, 2021 (In thousands) Gross Book Value Less: Accumulated Amortization Net Book Value Gross Book Value Less: Accumulated Amortization Net Book Value Electric frac licenses $ 22,500 $ — $ 22,500 $ 22,500 $ — $ 22,500 Acquired technology 14,644 (2,214 ) 12,430 5,905 (589 ) 5,316 Intangible assets, net $ 37,144 $ (2,214 ) $ 34,930 $ 28,405 $ (589 ) $ 27,816 |
Indebtedness (Tables)
Indebtedness (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Components of Debt | The following table summarizes the components of our debt as of September 30, 2022 and December 31, 2021: September 30, December 31, (In thousands) 2022 2021 Old ABL Credit Facility $ — $ 69,000 Old Term Loan — 171,355 First Financial Loan 19,080 30,000 New ABL Credit Facility — — New Term Loan Credit Facility 525,726 — Best Flow Credit Facility(1) — 7,101 Best Flow Note(1) — 10,827 Alpine Promissory Note(1) — 16,717 Flotek Convertible Notes 12,739 — Other 10,459 1,695 Total gross debt 568,004 306,695 Less: unamortized debt issuance costs (23,235 ) (5,129 ) Less: current portion of long-term debt (60,541 ) (31,793 ) Total long-term debt $ 484,228 $ 269,773 (1) Related party debt agreements |
Summary of Principal Maturity Schedule | The following table summarizes the principal maturity schedule for our long-term debt outstanding as of September 30, 2022: 2022 2023 2024 2025 2026 Thereafter Total First Financial loan $ 3,789 $ 15,291 $ — $ — $ — $ — $ 19,080 New ABL Credit Facility — — — — — — — New Term Loan Credit Facility 6,571 26,286 26,286 466,583 — — 525,726 Flotek Convertible Notes — 12,739 — — — — 12,739 Other. 4,506 3,038 1,907 543 79 386 10,459 Total $ 14,866 $ 57,354 $ 28,193 $ 467,126 $ 79 $ 386 $ 568,004 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Earnings per Share | The numerators and denominators of the basic and diluted earnings per share (“EPS”) computations for our Class A Common Stock are calculated as follows: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2022 2021 2022 2021 Numerator: Net income attributable to ProFrac Holding Corp. $ 44,930 $ — $ 51,488 $ — Net income reallocated to dilutive Class A shares 85 — 72 — Net income attributable to ProFrac Holding Corp. used for diluted earnings per Class A share 45,015 — 51,560 — Denominator: Weighted-average Class A shares used for basic EPS computation 41,239 40,846 Dilutive potential of employee restricted stock units 110 81 Weighted-average Class A shares used for diluted EPS computation 41,349 40,927 Basic and diluted EPS - Class A Common Stock $ 1.09 $ 1.26 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Summary of Components of Lease Costs | The following table summarizes the components of our lease costs: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2022 2022 Operating lease costs $ 3,429 $ 9,030 Short-term lease costs 843 2,199 Total lease costs $ 4,272 $ 11,229 |
Summary of Other Supplemental Information for Operating Leases | The following table includes other supplemental information for our operating leases: Nine Months Ended September 30, (Dollars in thousands) 2022 Cash paid for amounts included in the measurement of our lease obligations $ 8,691 Right-of-use assets obtained in exchange for lease obligations $ 45,412 Right-of-use assets recognized upon adoption of the leasing standard $ 35,817 Weighted-average remaining lease term 8.1 years Weighted-average discount rate 5.0 % |
Summary of Maturity of Operating Leases | The following table summarizes the maturity of our operating leases as of September 30, 2022: (In thousands) Remainder of 2022 $ 3,667 2023 13,378 2024 12,642 2025 11,496 2026 11,537 2027 11,812 2028 and thereafter 38,465 Total lease payments 102,997 Less imputed interest (20,285 ) Total lease liabilities $ 82,712 |
Related party transactions (Tab
Related party transactions (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Summary of Related Party Transactions | The following table summarizes expenditures with related parties for the three and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2022 2021 2022 2021 Automatize $ 22,428 $ 25,228 $ 72,279 $ 56,496 FHE 4,025 — 11,302 — Wilks Brothers 5,503 4,419 14,302 8,926 Related Lessors 1,821 1,604 6,469 4,719 Wilks Construction 9,327 — 22,716 — Equify Financial — 1,853 986 1,853 3 Twenty-Three — 974 247 974 Carbo 863 160 941 513 Cisco Logistics — 85 — 509 Interstate — 24 20 56 Equify Risk — — — 3 Other 29 29 149 81 Total $ 43,996 $ 34,376 $ 129,411 $ 74,130 The following table summarizes related party accounts payable as of September 30, 2022 and December 31, 2021: September 30, December 31, (In thousands) 2022 2021 Automatize $ 15,184 $ 11,198 Wilks Brothers 15,049 9,990 Wilks Construction 4,640 57 Cisco Logistics 1 — Carbo 0 10 Related Lessors 37 1 Other 0 19 Total $ 34,911 $ 21,275 The following table summarizes revenue from related parties for the three and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2022 2021 2022 2021 Flying A $ 1,273 $ 573 $ 3,193 $ 2,701 Carbo 31 395 784 574 Wilks Brothers 1 — 4 5 Interstate 4 2 4 113 Other 6 1 7 35 Total $ 1,315 $ 971 $ 3,992 $ 3,428 The following table summarizes related party accounts receivable as of September 30, 2022 and December 31, 2021: September 30, December 31, (In thousands) 2022 2021 Flying A $ 2,603 $ 2,412 Cisco Logistics 1,493 1,489 Carbo 96 591 Interstate 316 — Other 2 23 Total $ 4,510 $ 4,515 |
Acquisitions and investments (T
Acquisitions and investments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Business Acquisition [Line Items] | |
Summary of Unaudited Pro Forma Results of Operations | The following unaudited pro forma results of operations have been prepared as though the FTSI, Flotek, and Monahans acquisitions had been completed on January 1, 2021. Pro forma amounts are based on the purchase price allocation of the significant acquisition and are not necessarily indicative of the results that may be reported in the future. Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2022 2021 2022 2021 Revenue $ 705,900 $ 303,267 $ 1,763,830 $ 852,069 Net income (loss) $ 144,895 $ (40,763 ) $ 195,268 $ (136,403 ) |
FTS International, Inc | |
Business Acquisition [Line Items] | |
Summary of Preliminary Allocation of Purchase Price | The following table summarizes the preliminary allocation of the purchase price: (In thousands) Assets acquired: Cash and cash equivalents $ 53,771 Accounts receivable 89,268 Prepaid expense and other assets 4,037 Inventories 42,344 Property, plant and equipment 307,113 Operating lease ROU asset 2,748 Intangible assets 1,239 Other assets 1,583 Total assets acquired 502,103 Liabilities assumed: Accounts payable 62,985 Accrued expenses 19,308 Operating lease liability current 1,235 Current portion of debt 10,136 Other current liabilities 309 Operating lease liability non-current 1,512 Other non-current liabilities 928 Total liabilities assumed 96,413 Net assets acquired $ 405,690 |
Flotek Industries, Inc. | |
Business Acquisition [Line Items] | |
Summary of Preliminary Allocation of Purchase Price | The following table summarizes the preliminary allocation of the fair value of Flotek’s assets, liabilities and noncontrolling interest: (In thousands) Settlement of pre-existing relationships Accounts payable $ (2,713 ) Supply Agreement contract liability (9,874 ) Fair value of previously held interest in 10% Convertible PIK Notes 30,220 Settlement of pre-existing relationships $ 17,633 Assets acquired Cash and cash equivalents $ 21,725 Restricted cash 40 Accounts receivable 18,853 Inventories 12,210 Assets held for sale 1,805 Other current assets 3,405 Property and equipment 21,551 Operating lease right-of-use assets 3,884 Deferred tax assets 282 Goodwill 82,340 Other long-term assets 17 Total assets acquired 166,112 Liabilities assumed: Accounts payable and accrued liabilities 24,203 Operating lease liabilities 7,394 Finance lease liabilities 79 Long-term debt 17,101 Other liabilities 85 Total liabilities assumed 48,862 Noncontrolling interests 99,617 Assets acquired less liabilities assumed and noncontrolling interests $ 17,633 |
Monahans | |
Business Acquisition [Line Items] | |
Summary of Preliminary Allocation of Purchase Price | (In thousands) Assets acquired: Cash and cash equivalents $ 61 Accounts receivable 11,117 Prepaid expense and other assets 596 Inventories 3,148 Property, plant and equipment 103,665 Intangible assets 7,500 Goodwill 15,233 Other assets 8,916 Total assets acquired 150,236 Liabilities assumed: Accounts payable 9,783 Accrued expenses 1,035 Deferred revenue 4,335 Current portion of debt 45 Other current liabilities 15,757 Long-term debt 25 Other non-current liabilities 21,596 Total liabilities assumed 52,576 Net assets acquired $ 97,660 |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Changes in Carrying Amount of Goodwill by Reportable Segment | The changes in the carrying amount of goodwill by reportable segment were as follows for the nine months ended September 30, 2022. Stimulation services Manufacturing Proppant production Other Total Balances at December 31, 2021 $ — $ — $ — $ — $ — Acquisition of Flotek — — — 82,340 82,340 Acquisition of Monahans — — 15,233 — 15,233 Balances at September 30, 2022 $ — $ — $ 15,233 $ 82,340 $ 97,573 |
Fair value of financial instr_2
Fair value of financial instruments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments within Level 3 of Fair Value Hierarchy | The following table sets forth the fair value of the Company’s financial instruments within Level 3 of the fair value hierarchy. (In thousands) September 30, 2022 Level 3 BPC Investment 49,752 Total $ 49,752 |
Reconciliation of Beginning and Ending Balances for assets Measures at Fair Value on a Recurring Basis | The following is a reconciliation of the beginning and ending balances for assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) from inception to September 30, 2022: (In thousands) Level 3 Fair value as of January 1, 2022 $ — Acquisition of Flotek Convertible Notes 20,000 Acquisition of investment in BPC 47,202 Transfer of cost method investment to Level 3 fair value measurement 4,244 Change in fair value of Level 3 fair value measurements 8,100 Fair value as of March 31, 2022 $ 79,546 Change in Flotek fair value up to acquisition date 2,120 Elimination of Flotek convertible notes at acquisition date (30,220 ) Change in BPC fair value (1,694 ) Fair value as of September 30, 2022 $ 49,752 |
Fair Value Measurement Key Inputs | The key inputs into the Monte Carlo simulation used to estimate the fair value the Convertible Notes were as follows: May 17, 2022 March 31, 2022 Risk-free interest rate 1.82 % 1.63 % Expected volatility 90.0 % 90.0 % Term until liquidation (years) 0.72 0.84 Stock price $ 1.29 $ 1.26 |
Segment information (Table)
Segment information (Table) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Summary of Segment Information and Reconciliation of Adjusted EBITDA | Segment information, and a reconciliation of Adjusted EBITDA, for the three and nine months ended September 30, 2022 and 2021 is as follows: Three Months Ended September 30, Nine Months Ended September 30, (In thousands) 2022 2021 2022 2021 Revenues Stimulation services $ 668,578 $ 190,723 $ 1,581,289 $ 502,932 Manufacturing 48,742 19,861 115,602 50,741 Proppant production 24,642 6,399 54,581 19,769 Other 46,872 — 62,231 — Total segments 788,834 216,983 1,813,703 573,442 Eliminations (92,104 ) (21,052 ) (182,149 ) (53,106 ) Total $ 696,730 $ 195,931 $ 1,631,554 $ 520,336 Adjusted EBITDA Stimulation services $ 249,557 $ 31,599 $ 519,214 $ 75,027 Manufacturing 8,416 502 27,798 3,181 Proppant production 9,198 2,417 29,657 8,069 Other (11,072 ) — (18,526 ) — Adjusted EBITDA for reportable segments 256,099 34,518 558,143 86,277 Interest expense, net (16,261 ) (6,896 ) (38,984 ) (19,118 ) Depreciation, depletion and amortization (68,758 ) (35,241 ) (177,038 ) (105,606 ) Income tax benefit (provision) (8,157 ) (170 ) (13,021 ) 138 Loss on disposal of assets, net (667 ) (3,397 ) (2,656 ) (7,472 ) Loss on extinguishment of debt (242 ) — (17,337 ) — Litigation accrual — — (4,000 ) — Stock compensation expense (2,719 ) — (4,174 ) — Stock compensation expense related to deemed contributions (10,207 ) — (49,056 ) — Bad debt expense, net of recoveries — (2,562 ) (5 ) (2,562 ) Loss on foreign currency transactions 80 (116 ) 126 (116 ) Reorganization costs — (211 ) (55 ) (211 ) Acquisition related expenses (5,806 ) — (22,888 ) — Unrealized gain on investments, net — — 8,526 — Net income (loss) $ 143,362 $ (14,075 ) $ 237,581 $ (48,670 ) Segment information as of September 30, 2022 and December 31, 2021 is as follows: (In thousands) September 30, 2022 December 31, 2021 Total assets Stimulation services $ 1,663,989 $ 510,579 Manufacturing 140,396 77,968 Proppant production 298,138 100,294 Other 196,946 — Total segment assets 2,299,469 688,841 Eliminations (320,185 ) (24,271 ) Total $ 1,979,284 $ 664,570 |
Organization and Description _3
Organization and Description of Business - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions | Jun. 06, 2022 | May 12, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
Pro Frac L L C | |||||
Subsidiary Sale Of Stock [Line Items] | |||||
Ownership percentage by ProFrac Corp. | 29% | ||||
Ownership percentage by PFH Unit holders | 71% | ||||
Common Class A | |||||
Subsidiary Sale Of Stock [Line Items] | |||||
Common stock, par value | $ 0.01 | $ 0.01 | |||
Sale of stock, net proceeds | $ 301.7 | ||||
Redemption of membership ownership interests | 72.9 | ||||
Common stock, shares, outstanding | 41,239,957 | 0 | |||
Common Class A | Pro Frac L L C | |||||
Subsidiary Sale Of Stock [Line Items] | |||||
Common stock, shares, outstanding | 41,200,000 | ||||
Common Class A | Pro Frac L L C | |||||
Subsidiary Sale Of Stock [Line Items] | |||||
Ownership percentage by ProFrac Corp. | 29% | ||||
Common Class B | |||||
Subsidiary Sale Of Stock [Line Items] | |||||
Common stock, par value | $ 0.01 | $ 0.01 | |||
Sale of stock, offering price per share | $ 18 | ||||
Common stock, shares, outstanding | 101,133,201 | 101,133,201 | 0 | ||
Common Class B | Pro Frac L L C | |||||
Subsidiary Sale Of Stock [Line Items] | |||||
Common stock, shares, outstanding | 101,100,000 | ||||
Common Class B | Pro Frac L L C | |||||
Subsidiary Sale Of Stock [Line Items] | |||||
Ownership percentage by PFH Unit holders | 71% | ||||
New Term Loan Credit Facility | Common Class A | |||||
Subsidiary Sale Of Stock [Line Items] | |||||
Outstanding borrowings paid down | 143.8 | ||||
Back Stop Note | Common Class A | |||||
Subsidiary Sale Of Stock [Line Items] | |||||
Outstanding borrowings paid down | 22 | ||||
Closing Date Note | Common Class A | |||||
Subsidiary Sale Of Stock [Line Items] | |||||
Outstanding borrowings paid down | 22 | ||||
Equify Bridge Note | Common Class A | |||||
Subsidiary Sale Of Stock [Line Items] | |||||
Outstanding borrowings paid down | $ 20.8 | ||||
IPO | Common Class A | |||||
Subsidiary Sale Of Stock [Line Items] | |||||
Sale of stock, number of shares sold | 16,000,000 | ||||
Common stock, par value | $ 0.01 | ||||
Sale of stock, offering price per share | $ 18 | ||||
Over-Allotment Option | Common Class A | |||||
Subsidiary Sale Of Stock [Line Items] | |||||
Sale of stock, number of shares sold | 2,228,153 | ||||
Sale of stock, offering price per share | $ 18 |
Organization and Description _4
Organization and Description of Business - Schedule of Redeemable Noncontrolling Interests (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | |
Class Of Stock [Line Items] | |||||||||
Beginning balance | $ (1,316,530) | $ 246,367 | $ 148,110 | $ 143,455 | $ 152,057 | $ 176,812 | $ 148,110 | $ 148,110 | $ 176,812 |
Effect of corporate reorganization and reclassification to redeemable noncontrolling interest | (382,050) | ||||||||
Adjustment of redeemable noncontrolling interest to redemption amount | (493,800) | 154,233 | |||||||
Class A Common Stock issued to settle asset purchase | 16,696 | ||||||||
Net income (loss) | 143,362 | 24,126 | (14,075) | (8,606) | (25,989) | 237,581 | (48,670) | ||
Stock-based compensation | 1,253 | 795 | |||||||
Stock-based compensation related to deemed contribution | 2,957 | 11,252 | |||||||
Foreign currency translation adjustments | 207 | 13 | (136) | 45 | 4 | 6 | 84 | 55 | |
Ending balance | (785,158) | (1,316,530) | $ 246,367 | $ 129,427 | $ 143,455 | $ 152,057 | (1,316,530) | (785,158) | $ 129,427 |
IPO | |||||||||
Class Of Stock [Line Items] | |||||||||
Adjustment of redeemable noncontrolling interest to redemption amount | 1,438,348 | ||||||||
Redeemable Noncontrolling Interests | |||||||||
Class Of Stock [Line Items] | |||||||||
Beginning balance | 2,024,687 | ||||||||
Effect of corporate reorganization and reclassification to redeemable noncontrolling interest | 382,050 | ||||||||
Adjustment of redeemable noncontrolling interest to redemption amount | (493,800) | 154,233 | |||||||
Class A Common Stock issued to settle asset purchase | 21,361 | ||||||||
Net income (loss) | 110,183 | 16,082 | |||||||
Stock-based compensation | 1,465 | 660 | |||||||
Stock-based compensation related to deemed contribution | 7,251 | 27,597 | |||||||
Foreign currency translation adjustments | 110 | ||||||||
Change in accrued distribution related to income taxes | (5,470) | ||||||||
Accrued distribution related to income taxes | (15,644) | ||||||||
Ending balance | $ 1,644,426 | $ 2,024,687 | 2,024,687 | $ 1,644,426 | |||||
Redeemable Noncontrolling Interests | IPO | |||||||||
Class Of Stock [Line Items] | |||||||||
Adjustment of redeemable noncontrolling interest to redemption amount | $ 1,438,348 |
Organization and Description _5
Organization and Description of Business - Schedule of Redeemable Noncontrolling Interests (Parenthetical) (Details) - $ / shares | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
Common Class B | |||
Class Of Stock [Line Items] | |||
Common stock, shares, outstanding | 101,133,201 | 101,133,201 | 0 |
Sale of stock, offering price per share | $ 18 | ||
Common Class A | |||
Class Of Stock [Line Items] | |||
Common stock, shares, outstanding | 41,239,957 | 0 | |
VWAP of common stock | $ 16.26 | $ 20.02 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jan. 01, 2022 |
Accounting Policies [Abstract] | ||
Operating lease right-of-use assets | $ 78,569 | $ 35,800 |
Operating lease liabilities | $ 82,712 | $ 35,800 |
Restricted Cash - Reconciliatio
Restricted Cash - Reconciliation of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 64,678 | $ 5,376 | ||
Restricted cash included in prepaid expenses and other current assets | 2,064 | |||
Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows | $ 66,742 | $ 5,376 | $ 16,367 | $ 2,952 |
Supplemental Balance Sheet In_3
Supplemental Balance Sheet Information - Summary of Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Balance Sheet Related Disclosures [Abstract] | ||
Raw materials and supplies | $ 107,303 | $ 13,911 |
Work in process | 9,987 | 3,288 |
Finished products and parts | 121,504 | 56,743 |
Total | $ 238,794 | $ 73,942 |
Supplemental Balance Sheet In_4
Supplemental Balance Sheet Information - Additional Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Increase in inventory | $ 107,150 | $ 14,525 |
FTSI and Flotek Acquisitions | ||
Increase in inventory | $ 54,500 |
Supplemental Balance Sheet In_5
Supplemental Balance Sheet Information - Summary of Accrued Expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Balance Sheet Related Disclosures [Abstract] | ||
Accrual for purchased materials | $ 71,286 | $ 15,600 |
Employee compensation and benefits | 29,860 | 8,107 |
Sales, use, and property taxes | 21,082 | 5,974 |
Interest | 13,130 | 879 |
Income taxes | 10,665 | |
Tax receivable agreement | 3,491 | |
Tax distribution to redeemable noncontrolling interests | 21,114 | |
Other | 23,693 | 7,589 |
Total | $ 194,321 | $ 38,149 |
Property, Plant and Equipment -
Property, Plant and Equipment - Summary of Components of Property Plant and Equipment Net (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Property Plant And Equipment [Line Items] | ||
Property plant and equipment, Gross | $ 1,320,836 | $ 817,135 |
Accumulated depreciation and depletion | (632,801) | (464,178) |
Construction in progress | 133,174 | 10,730 |
Property, plant, and equipment, net | 821,209 | 363,687 |
Machinery and Equipment | ||
Property Plant And Equipment [Line Items] | ||
Property plant and equipment, Gross | 1,180,092 | 760,829 |
Mining Property and Mine Development | ||
Property Plant And Equipment [Line Items] | ||
Property plant and equipment, Gross | 97,265 | 34,809 |
Office Equipment Software and Other | ||
Property Plant And Equipment [Line Items] | ||
Property plant and equipment, Gross | 15,156 | 5,550 |
Land | ||
Property Plant And Equipment [Line Items] | ||
Property plant and equipment, Gross | 950 | |
Buildings and Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property plant and equipment, Gross | $ 27,373 | $ 15,947 |
Property, Plant and Equipment_2
Property, Plant and Equipment - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Property Plant And Equipment [Line Items] | ||||
Depreciation expense | $ 68.1 | $ 35.1 | $ 175.6 | $ 105.1 |
FTS International, Inc | ||||
Property Plant And Equipment [Line Items] | ||||
Acquired assets | 328.7 | |||
Sale leaseback transaction, net book value | $ 48.2 | 48.2 | ||
Monahans | ||||
Property Plant And Equipment [Line Items] | ||||
Acquired assets | $ 103.7 |
Property, Plant and Equipment_3
Property, Plant and Equipment - Major Classifications of Property Plant and Equipment and Respective Useful Lives (Details) | 9 Months Ended |
Sep. 30, 2022 | |
Machinery and Equipment | Minimum | |
Property Plant And Equipment [Line Items] | |
Useful life | 2 years |
Machinery and Equipment | Maximum | |
Property Plant And Equipment [Line Items] | |
Useful life | 10 years |
Office Equipment Software and Other | Minimum | |
Property Plant And Equipment [Line Items] | |
Useful life | 3 years |
Office Equipment Software and Other | Maximum | |
Property Plant And Equipment [Line Items] | |
Useful life | 7 years |
Buildings and Leasehold Improvements | Minimum | |
Property Plant And Equipment [Line Items] | |
Useful life | 2 years |
Buildings and Leasehold Improvements | Maximum | |
Property Plant And Equipment [Line Items] | |
Useful life | 40 years |
Intangible Assets - Summary of
Intangible Assets - Summary of Components of Finite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Finite Lived Intangible Assets [Line Items] | ||
Gross Book Value | $ 37,144 | $ 28,405 |
Less: Accumulated Amortization | (2,214) | (589) |
Net Book Value | 34,930 | 27,816 |
Electric Frac Licenses | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Book Value | 22,500 | 22,500 |
Net Book Value | 22,500 | 22,500 |
Acquired Technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Book Value | 14,644 | 5,905 |
Less: Accumulated Amortization | (2,214) | (589) |
Net Book Value | $ 12,430 | $ 5,316 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
FTS International, Inc | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Amortization expense related to intangible assets | $ 0.7 | $ 0.2 | $ 1.4 | $ 0.5 | |
Electric Frac Licenses | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Estimated intangible assets amortized over period | 17 years | ||||
Acquired Technology | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Estimated intangible assets amortized over period | 7 years | ||||
Acquired Technology | FTS International, Inc | |||||
Finite Lived Intangible Assets [Line Items] | |||||
Estimated intangible assets amortized over period | 3 years |
Indebtedness - Additional Infor
Indebtedness - Additional Information (Details) $ / shares in Units, shares in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||||||
Mar. 05, 2024 USD ($) | Nov. 01, 2022 USD ($) | Jul. 25, 2022 USD ($) | Mar. 04, 2022 USD ($) d | Feb. 16, 2022 USD ($) d $ / shares | Feb. 02, 2022 USD ($) d $ / shares shares | Dec. 22, 2021 USD ($) | Jun. 24, 2021 USD ($) | Jan. 28, 2021 USD ($) | Feb. 04, 2019 USD ($) | Sep. 07, 2018 USD ($) | Mar. 14, 2018 | Jul. 31, 2022 USD ($) | Apr. 30, 2022 USD ($) | Feb. 28, 2022 USD ($) | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 USD ($) | Jun. 30, 2022 | Mar. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 USD ($) | Jun. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2022 USD ($) | Mar. 04, 2024 | Mar. 04, 2023 | Dec. 31, 2021 USD ($) | Oct. 31, 2022 USD ($) | Aug. 25, 2022 USD ($) | Jul. 24, 2022 USD ($) | Apr. 08, 2022 USD ($) | Mar. 21, 2022 USD ($) | Jan. 01, 2021 USD ($) | Jul. 22, 2020 USD ($) | |
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Maximum borrowing capacity | $ 146,200,000 | $ 146,200,000 | |||||||||||||||||||||||||||||||||||
Total gross debt | $ 568,004,000 | 306,695,000 | $ 568,004,000 | 306,695,000 | |||||||||||||||||||||||||||||||||
Letters of credit outstanding amount | 3,100,000 | 3,100,000 | |||||||||||||||||||||||||||||||||||
Long-term debt | 484,228,000 | 235,128,000 | 484,228,000 | 235,128,000 | |||||||||||||||||||||||||||||||||
Loss on extinguishment of debt | $ (242,000) | (17,337,000) | |||||||||||||||||||||||||||||||||||
Outstanding balances on the best flow credit facility | $ 7,600,000 | ||||||||||||||||||||||||||||||||||||
Other equipment financing agreements amounts | 5,400,000 | ||||||||||||||||||||||||||||||||||||
Recourse or claim against assets of parent company | $ 0 | ||||||||||||||||||||||||||||||||||||
Flotek Industries, Inc. | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Debt instrument, face amount | $ 20,000,000 | ||||||||||||||||||||||||||||||||||||
Percentage of accrued paid-in-kind interest rate | 10% | ||||||||||||||||||||||||||||||||||||
Debt instrument, term | 1 year | ||||||||||||||||||||||||||||||||||||
Weighted average trading price | $ / shares | $ 2.50 | ||||||||||||||||||||||||||||||||||||
Scenario Forecast | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Prepayment premium percentage | 1% | 2% | 3% | ||||||||||||||||||||||||||||||||||
Payment or prepayment premium due on stated termination date | $ 0 | ||||||||||||||||||||||||||||||||||||
New Term Loan Credit Facility | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Maximum borrowing capacity | $ 300,000,000 | ||||||||||||||||||||||||||||||||||||
Increase in borrowing capacity | $ 150,000,000 | ||||||||||||||||||||||||||||||||||||
Debt instrument maturity date | Mar. 04, 2025 | ||||||||||||||||||||||||||||||||||||
Interest rate stated percentage | 11.10% | 11.10% | |||||||||||||||||||||||||||||||||||
Basis spread on variable rate | 2% | ||||||||||||||||||||||||||||||||||||
Debt instrument, face amount | $ 525,700,000 | $ 525,700,000 | |||||||||||||||||||||||||||||||||||
Delayed draw loans | 100,000,000 | $ 80,000,000 | |||||||||||||||||||||||||||||||||||
Minimum liquidity | $ 30,000,000 | ||||||||||||||||||||||||||||||||||||
IPO Prepayment | Scenario Forecast | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Prepayment premium percentage | 2% | ||||||||||||||||||||||||||||||||||||
Debt Instrument, Redemption, Period One | Flotek Industries, Inc. | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Debt instrument, convertible, threshold trading days | d | 20 | ||||||||||||||||||||||||||||||||||||
Debt instrument, convertible, threshold consecutive trading days | d | 30 | ||||||||||||||||||||||||||||||||||||
Debt instrument, convertible, conversion price | $ / shares | $ 1.088125 | $ 1.088125 | |||||||||||||||||||||||||||||||||||
Debt Instrument, Redemption, Period Two | Flotek Industries, Inc. | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Weighted average trading price | $ / shares | $ 2.50 | ||||||||||||||||||||||||||||||||||||
Debt instrument, convertible, threshold trading days | d | 20 | ||||||||||||||||||||||||||||||||||||
Debt instrument, convertible, threshold consecutive trading days | d | 30 | ||||||||||||||||||||||||||||||||||||
Debt instrument, convertible, conversion price | $ / shares | $ 1.088125 | ||||||||||||||||||||||||||||||||||||
Old Term Loan | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Total gross debt | $ 171,355,000 | 171,355,000 | |||||||||||||||||||||||||||||||||||
Long-term debt | $ 180,000,000 | ||||||||||||||||||||||||||||||||||||
Loan agreement maturity date | Sep. 15, 2023 | ||||||||||||||||||||||||||||||||||||
Minimum amortization required | $ 0 | ||||||||||||||||||||||||||||||||||||
Term loan agreement expand facility | $ 40,000,000 | $ 48,000,000 | |||||||||||||||||||||||||||||||||||
Term loan amended description | The Old Term Loan, as amended, requires minimum excess cash flow prepayments as follows, each due approximately 55 days after period-end | ||||||||||||||||||||||||||||||||||||
Minimum excess cash flow prepayment in term loan | $ 5,000,000 | $ 0 | |||||||||||||||||||||||||||||||||||
Debt instrument, leverage ratio | 2% | 2.50% | 2.75% | 3% | 3.50% | 2.25% | |||||||||||||||||||||||||||||||
Term loan extinguish date | Mar. 04, 2022 | ||||||||||||||||||||||||||||||||||||
Loss on extinguishment of debt | $ (3,900,000) | ||||||||||||||||||||||||||||||||||||
Main Street Loan | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Debt instrument, face amount | $ 35,000,000 | ||||||||||||||||||||||||||||||||||||
Debt instrument, maturity date | Jul. 22, 2025 | ||||||||||||||||||||||||||||||||||||
Debt instrument, covenant description | Main Street Loan contained certain restrictive covenants which required ProFrac LLC to maintain a Fixed Charge Coverage Ratio of at least 1.00:1.00, and a Maximum Leverage Ratio of 3.50:1.00. Additionally, the Main Street Loan restricted the payment of distributions or dividends, other than for the payment of taxes. | ||||||||||||||||||||||||||||||||||||
Debt instrument, unused borrowing capacity, amount | $ 32,200,000 | ||||||||||||||||||||||||||||||||||||
Extinguishment of debt, amount | 2,200,000 | ||||||||||||||||||||||||||||||||||||
Long-term debt, refinanced, amount | $ 30,000,000 | ||||||||||||||||||||||||||||||||||||
First Financial Loan | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Total gross debt | $ 19,080,000 | $ 30,000,000 | $ 19,080,000 | 30,000,000 | |||||||||||||||||||||||||||||||||
Debt instrument, maturity date | Jan. 01, 2024 | Jan. 01, 2024 | |||||||||||||||||||||||||||||||||||
Debt instrument, covenant description | The First Financial Loan contains certain restricted covenants which require the Company to maintain a fixed charge ratio of at least 1.00:1.00 and a maximum net leverage ratio of 3.00:1.00. The Company was in compliance with all covenants as of September 30, 2022. | ||||||||||||||||||||||||||||||||||||
Debt instrument, period of first required payment | 2022-02 | ||||||||||||||||||||||||||||||||||||
Backstop Note | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Interest rate stated percentage | 1.74% | ||||||||||||||||||||||||||||||||||||
Debt instrument, face amount | $ 22,000,000 | ||||||||||||||||||||||||||||||||||||
Debt instrument, maturity date | Mar. 04, 2027 | ||||||||||||||||||||||||||||||||||||
Closing Date Note | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Interest rate stated percentage | 1.74% | ||||||||||||||||||||||||||||||||||||
Debt instrument, face amount | $ 22,000,000 | ||||||||||||||||||||||||||||||||||||
Debt instrument, maturity date | Mar. 04, 2027 | ||||||||||||||||||||||||||||||||||||
Equify Bridge Note | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Interest rate stated percentage | 1% | ||||||||||||||||||||||||||||||||||||
Debt instrument, face amount | $ 45,800,000 | ||||||||||||||||||||||||||||||||||||
Debt instrument, maturity date | Mar. 04, 2027 | ||||||||||||||||||||||||||||||||||||
Repayment of term loan | $ 25,000,000 | ||||||||||||||||||||||||||||||||||||
Debt instrument outstanding | $ 20,800,000 | ||||||||||||||||||||||||||||||||||||
Best Flow Credit Facility | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Total gross debt | 7,101,000 | 7,101,000 | |||||||||||||||||||||||||||||||||||
Loss on extinguishment of debt | $ (300,000) | ||||||||||||||||||||||||||||||||||||
Best Flow Notes Payable | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Debt instrument, frequency of periodic payment | monthly | ||||||||||||||||||||||||||||||||||||
Best Flow Notes Payable | Wilks Brothers LLC | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Debt instrument maturity date | Feb. 01, 2026 | ||||||||||||||||||||||||||||||||||||
Debt instrument, face amount | $ 13,000,000 | ||||||||||||||||||||||||||||||||||||
Prepayment premium percentage | 0.19% | ||||||||||||||||||||||||||||||||||||
Long-term debt, percentage bearing fixed interest, percentage rate | 8% | ||||||||||||||||||||||||||||||||||||
Best Flow Note | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Total gross debt | 10,827,000 | 10,827,000 | |||||||||||||||||||||||||||||||||||
Loss on extinguishment of debt | (1,400,000) | ||||||||||||||||||||||||||||||||||||
Line of credit facility extinguishment date | Mar. 04, 2022 | ||||||||||||||||||||||||||||||||||||
Alpine Promissory Note | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Total gross debt | 16,717,000 | 16,717,000 | |||||||||||||||||||||||||||||||||||
Loss on extinguishment of debt | $ (1,800,000) | ||||||||||||||||||||||||||||||||||||
Alpine Promissory Note | Equify Financial LLC | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Interest rate stated percentage | 8% | ||||||||||||||||||||||||||||||||||||
Debt instrument, face amount | $ 21,400,000 | ||||||||||||||||||||||||||||||||||||
Long-term debt, maturity period | 2027-02 | ||||||||||||||||||||||||||||||||||||
Debt instrument, extinguishment date | Mar. 04, 2022 | ||||||||||||||||||||||||||||||||||||
Flotek Convertible Notes | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Total gross debt | $ 12,739,000 | $ 12,739,000 | |||||||||||||||||||||||||||||||||||
Convertible notes payable | $ 11,200,000 | ||||||||||||||||||||||||||||||||||||
Percentage of accrued paid-in-kind interest rate | 10% | ||||||||||||||||||||||||||||||||||||
Debt instrument, term | 1 year | ||||||||||||||||||||||||||||||||||||
Convertible notes | 8,200,000 | 8,200,000 | $ 3,000,000 | ||||||||||||||||||||||||||||||||||
Convertible notes were converted into common stock | shares | 2.8 | ||||||||||||||||||||||||||||||||||||
Convertible notes, carrying value | 12,700,000 | 12,700,000 | |||||||||||||||||||||||||||||||||||
Other Indebtedness | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Total gross debt | 10,459,000 | 10,459,000 | |||||||||||||||||||||||||||||||||||
Other Long-Term Debt | 10,500,000 | 1,700,000 | 10,500,000 | $ 1,700,000 | |||||||||||||||||||||||||||||||||
Other indebtedness due | 3,400,000 | 3,400,000 | |||||||||||||||||||||||||||||||||||
Repayment of other debt | $ 3,400,000 | ||||||||||||||||||||||||||||||||||||
Other Indebtedness | Paycheck Protection Program | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Other Long-Term Debt | $ 4,800,000 | 4,800,000 | |||||||||||||||||||||||||||||||||||
London Interbank Offered Rate (LIBOR) | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Basis spread on variable rate | 1.25% | 9.75% | |||||||||||||||||||||||||||||||||||
London Interbank Offered Rate (LIBOR) | First Financial Loan | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Interest rate stated percentage | 3.50% | ||||||||||||||||||||||||||||||||||||
Base Rate Loans [Member] | New Term Loan Credit Facility | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Accrue interest | 7.50% | ||||||||||||||||||||||||||||||||||||
SOFR Rate | New Term Loan Credit Facility | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Basis spread on variable rate | 1% | ||||||||||||||||||||||||||||||||||||
Accrue interest | 8.50% | ||||||||||||||||||||||||||||||||||||
Federal Funds Rate Plus 1/2 | New Term Loan Credit Facility | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Basis spread on variable rate | 1% | ||||||||||||||||||||||||||||||||||||
SOFR for One-month Interest Period | New Term Loan Credit Facility | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Basis spread on variable rate | 1% | ||||||||||||||||||||||||||||||||||||
Minimum | New Term Loan Credit Facility | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Debt instrument, excess cash flow repayment percentage | 50% | ||||||||||||||||||||||||||||||||||||
Minimum | Main Street Loan | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Fixed charge coverage ratio | 1% | ||||||||||||||||||||||||||||||||||||
Minimum | First Financial Loan | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Fixed charge coverage ratio | 1% | ||||||||||||||||||||||||||||||||||||
Minimum | London Interbank Offered Rate (LIBOR) | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Basis spread on variable rate | 6.25% | ||||||||||||||||||||||||||||||||||||
Minimum | Base Rate Loans [Member] | New Term Loan Credit Facility | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Basis spread on variable rate | 6.25% | ||||||||||||||||||||||||||||||||||||
Minimum | SOFR Rate | New Term Loan Credit Facility | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Basis spread on variable rate | 7.25% | ||||||||||||||||||||||||||||||||||||
Maximum | New Term Loan Credit Facility | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Debt instrument, leverage ratio | 1.55% | 2% | |||||||||||||||||||||||||||||||||||
Debt instrument, excess cash flow repayment percentage | 25% | ||||||||||||||||||||||||||||||||||||
Maximum | New Term Loan Credit Facility | Subsequent Event | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Debt instrument, leverage ratio | 1.55% | ||||||||||||||||||||||||||||||||||||
Maximum | New Term Loan Credit Facility | Scenario Forecast | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Debt instrument, leverage ratio | 1.25% | ||||||||||||||||||||||||||||||||||||
Maximum | Main Street Loan | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Fixed charge coverage ratio | 3.50% | ||||||||||||||||||||||||||||||||||||
Maximum | First Financial Loan | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Fixed charge coverage ratio | 3% | ||||||||||||||||||||||||||||||||||||
Maximum | London Interbank Offered Rate (LIBOR) | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Basis spread on variable rate | 8.50% | ||||||||||||||||||||||||||||||||||||
Maximum | Base Rate Loans [Member] | New Term Loan Credit Facility | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Basis spread on variable rate | 7% | ||||||||||||||||||||||||||||||||||||
Maximum | SOFR Rate | New Term Loan Credit Facility | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Basis spread on variable rate | 8% | ||||||||||||||||||||||||||||||||||||
New Term Loan Credit Facility | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Maximum borrowing capacity | 100,000,000 | ||||||||||||||||||||||||||||||||||||
Increase in borrowing capacity | 150,000,000 | ||||||||||||||||||||||||||||||||||||
Old ABL Credit Facility | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Maximum borrowing capacity | 105,000,000 | $ 105,000,000 | |||||||||||||||||||||||||||||||||||
Debt instrument maturity date | Mar. 14, 2023 | ||||||||||||||||||||||||||||||||||||
Total gross debt | 69,000,000 | 69,000,000 | |||||||||||||||||||||||||||||||||||
Letters of credit outstanding amount | $ 32,900,000 | $ 32,900,000 | |||||||||||||||||||||||||||||||||||
Old ABL Credit Facility | London Interbank Offered Rate (LIBOR) | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Interest rate stated percentage | 0% | ||||||||||||||||||||||||||||||||||||
Interest rate effective percentage | 2.75% | 2.75% | |||||||||||||||||||||||||||||||||||
Old ABL Credit Facility | Minimum | London Interbank Offered Rate (LIBOR) | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Basis spread on variable rate | 1.50% | ||||||||||||||||||||||||||||||||||||
Old ABL Credit Facility | Maximum | London Interbank Offered Rate (LIBOR) | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Basis spread on variable rate | 2% | ||||||||||||||||||||||||||||||||||||
New ABL Credit Facility | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Maximum borrowing capacity | 300,000,000 | $ 100,000,000 | $ 200,000,000 | $ 200,000,000 | $ 200,000,000 | $ 200,000,000 | |||||||||||||||||||||||||||||||
Increase in borrowing capacity | $ 100,000,000 | ||||||||||||||||||||||||||||||||||||
Interest rate stated percentage | 7% | 7% | |||||||||||||||||||||||||||||||||||
Total gross debt | $ 0 | $ 0 | |||||||||||||||||||||||||||||||||||
Letters of credit outstanding amount | 10,500,000 | 10,500,000 | |||||||||||||||||||||||||||||||||||
Fixed charge coverage ratio | 1% | ||||||||||||||||||||||||||||||||||||
Debt instrument, unused borrowing capacity, amount | $ 5,000,000 | ||||||||||||||||||||||||||||||||||||
Remaining credit facility | $ 189,500,000 | $ 189,500,000 | |||||||||||||||||||||||||||||||||||
Credit facility, expiration date | Mar. 04, 2027 | ||||||||||||||||||||||||||||||||||||
Percentage of maximum credit available lesser of the maximum revolver amount | 12.50% | ||||||||||||||||||||||||||||||||||||
Percentage of maximum credit available | 12.50% | ||||||||||||||||||||||||||||||||||||
Debt instrument, threshold consecutive calendar days | d | 20 | ||||||||||||||||||||||||||||||||||||
Debt instrument, threshold consecutive business days | d | 5 | ||||||||||||||||||||||||||||||||||||
New ABL Credit Facility | Subsequent Event | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Maximum borrowing capacity | $ 280,000,000 | $ 200,000,000 | |||||||||||||||||||||||||||||||||||
New ABL Credit Facility | 5 Consecutive Business Days | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Line of credit facility, current borrowing capacity | $ 13,300,000 | ||||||||||||||||||||||||||||||||||||
Line of credit facility, covenant specified amount | 10,000,000 | ||||||||||||||||||||||||||||||||||||
New ABL Credit Facility | 20 Consecutive Calendar Days | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Line of credit facility, current borrowing capacity | $ 13,300,000 | ||||||||||||||||||||||||||||||||||||
New ABL Credit Facility | SOFR [Member] | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Basis spread on variable rate | 0% | ||||||||||||||||||||||||||||||||||||
Percentage of debt instrument on adjusted term SOFR | Adjusted Term SOFR for a one-month Interest Period as published two (2) U.S. Government Securities Business Days prior to such day (or if such day is not a Business Day, the immediately preceding Business Day), plus 1.0% | ||||||||||||||||||||||||||||||||||||
New ABL Credit Facility | Base Rate Loans [Member] | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Percentage of debt instrument on NYFRB Rate | NYFRB Rate in effect on such day plus ½% of 1% | ||||||||||||||||||||||||||||||||||||
New ABL Credit Facility | Minimum | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Quarterly unused line fee percentage | 0.25% | ||||||||||||||||||||||||||||||||||||
New ABL Credit Facility | Minimum | SOFR [Member] | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Basis spread on variable rate | 1.50% | ||||||||||||||||||||||||||||||||||||
New ABL Credit Facility | Minimum | Base Rate Loans [Member] | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Basis spread on variable rate | 0.50% | ||||||||||||||||||||||||||||||||||||
New ABL Credit Facility | Maximum | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Quarterly unused line fee percentage | 0.375% | ||||||||||||||||||||||||||||||||||||
New ABL Credit Facility | Maximum | Subsequent Event | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Increase in borrowing capacity | $ 120,000,000 | ||||||||||||||||||||||||||||||||||||
New ABL Credit Facility | Maximum | SOFR [Member] | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Basis spread on variable rate | 2% | ||||||||||||||||||||||||||||||||||||
New ABL Credit Facility | Maximum | Base Rate Loans [Member] | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Basis spread on variable rate | 1% | ||||||||||||||||||||||||||||||||||||
Revolving Credit Facility | Best Flow Credit Facility | |||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||
Maximum borrowing capacity | $ 9,000,000 | ||||||||||||||||||||||||||||||||||||
Credit facility, expiration date | Feb. 04, 2026 | ||||||||||||||||||||||||||||||||||||
Line of credit facility, interest rate during period | 3.50% | ||||||||||||||||||||||||||||||||||||
Line of credit facility, interest rate description | The interest rate under the Best Flow Credit Facility was the lesser of (i) the Prime Rate (as defined in the Best Flow Credit Facility) plus the applicable margin (3.50%) and (ii) the Maximum Rate (as defined in the Best Flow Credit Facility). All accrued but unpaid interest on the outstanding principal balance is due and payable monthly on the first day of each calendar month. | ||||||||||||||||||||||||||||||||||||
Line of credit facility extinguishment date | Mar. 04, 2022 |
Indebtedness - Components of De
Indebtedness - Components of Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Total gross debt | $ 568,004 | $ 306,695 |
Less: unamortized debt issuance costs | (23,235) | (5,129) |
Less: current portion of long-term debt | (60,541) | (31,793) |
Total long-term debt | 484,228 | 269,773 |
Old ABL Credit Facility | ||
Debt Instrument [Line Items] | ||
Total gross debt | 69,000 | |
Old Term Loan | ||
Debt Instrument [Line Items] | ||
Total gross debt | 171,355 | |
First Financial Loan | ||
Debt Instrument [Line Items] | ||
Total gross debt | 19,080 | 30,000 |
New Term Loan Credit Facility | ||
Debt Instrument [Line Items] | ||
Total gross debt | 525,726 | |
Best Flow Credit Facility | ||
Debt Instrument [Line Items] | ||
Total gross debt | 7,101 | |
Best Flow Note | ||
Debt Instrument [Line Items] | ||
Total gross debt | 10,827 | |
Alpine Promissory Note | ||
Debt Instrument [Line Items] | ||
Total gross debt | 16,717 | |
Flotek Convertible Notes | ||
Debt Instrument [Line Items] | ||
Total gross debt | 12,739 | |
Other | ||
Debt Instrument [Line Items] | ||
Total gross debt | $ 10,459 | $ 1,695 |
Indebtedness - Summary of Princ
Indebtedness - Summary of Principal Maturity Schedule (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
2022 | $ 14,866 | |
2023 | 57,354 | |
2024 | 28,193 | |
2025 | 467,126 | |
2026 | 79 | |
Thereafter | 386 | |
Total | 568,004 | $ 306,695 |
First Financial Loan | ||
Debt Instrument [Line Items] | ||
2022 | 3,789 | |
2023 | 15,291 | |
Total | 19,080 | $ 30,000 |
New Term Loan Credit Facility | ||
Debt Instrument [Line Items] | ||
2022 | 6,571 | |
2023 | 26,286 | |
2024 | 26,286 | |
2025 | 466,583 | |
Total | 525,726 | |
Flotek Convertible Notes | ||
Debt Instrument [Line Items] | ||
2023 | 12,739 | |
Total | 12,739 | |
Other | ||
Debt Instrument [Line Items] | ||
2022 | 4,506 | |
2023 | 3,038 | |
2024 | 1,907 | |
2025 | 543 | |
2026 | 79 | |
Thereafter | 386 | |
Total | $ 10,459 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Deferred tax assets | $ 161,200 | $ 161,200 | ||
Deferred tax assets subject to tax receivable agreement | 23,800 | 23,800 | ||
Exception of deferred tax assets | 4,100 | $ 4,100 | ||
Effective income tax rate reconciliation, Percent | 5% | |||
State tax rate, net | 2.40% | |||
Federal corporate income tax rate | 21% | |||
Income tax expense (benefit) | 8,157 | $ 170 | $ 13,021 | $ (138) |
Accrued distribution to redeemable noncontrolling interest holders for tax payments | $ 21,100 | $ 21,100 |
Tax Receivable Agreement - Addi
Tax Receivable Agreement - Additional Information (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Income Tax Disclosure [Abstract] | |
Percentage to TRA Holders | 85% |
Retention percentage | 15% |
Term under TRA | 15 years |
Estimated payment under tax receivable agreement, Maximum | $ 500 |
Tax receivable agreement liabilities | $ 3.5 |
Earnings per Share - Schedule o
Earnings per Share - Schedule of Basic and Diluted Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | |
Numerator: | ||
Net income attributable to ProFrac Holding Corp. | $ 44,930 | $ 51,488 |
Denominator: | ||
Weighted average shares used in computing basic earnings per Class A share | 41,239 | 40,846 |
Weighted-average Class A shares used for diluted EPS computation | 41,349 | 40,927 |
Basic EPS - Class A Common Stock | $ 1.09 | $ 1.26 |
Diluted EPS - Class A Common Stock | $ 1.09 | $ 1.26 |
Class A Common Stock | ||
Numerator: | ||
Net income attributable to ProFrac Holding Corp. | $ 44,930 | $ 51,488 |
Net income reallocated to dilutive Class A shares | 85 | 72 |
Net income attributable to ProFrac Holding Corp. used for diluted earnings per Class A share | $ 45,015 | $ 51,560 |
Denominator: | ||
Weighted average shares used in computing basic earnings per Class A share | 41,239 | 40,846 |
Dilutive potential of employee restricted stock units | 110 | 81 |
Weighted-average Class A shares used for diluted EPS computation | 41,349 | 40,927 |
Basic EPS - Class A Common Stock | $ 1.09 | $ 1.26 |
Diluted EPS - Class A Common Stock | $ 1.09 | $ 1.26 |
Stock-based compensation - Addi
Stock-based compensation - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
May 24, 2022 | Aug. 31, 2022 | May 31, 2022 | Sep. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Stock based compensation expense | $ 2,719,000 | $ 4,174,000 | ||||
Stock based compensation, grant date fair value | $ 45,200,000 | |||||
Stock based compensation, estimated derived service period | 1 year | |||||
Unrecognized compensation cost | 29,900,000 | $ 29,900,000 | ||||
Weighted average period expected to be recognized | 9 months 18 days | |||||
Restricted Stock Units | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Stock based compensation expense | $ 2,100,000 | $ 3,000,000 | ||||
Stock based compensation, grant date fair value | $ 9,100,000 | $ 1,200,000 | ||||
Weighted average per share | $ 17,890 | |||||
Unrecognized compensation cost | $ 7,400,000 | $ 7,400,000 | ||||
Weighted average period expected to be recognized | 1 year | |||||
Stock based compensation shares granted | 509,000 | 69,000 | ||||
Fair value of RSUs vested | 0 | |||||
Minimum | Restricted Stock Units | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Awards granted vest period | 1 year | |||||
Maximum | Restricted Stock Units | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Awards granted vest period | 3 years | |||||
Monte Carlo Simulation Method | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Stock based compensation expense | $ 10,200,000 | $ 15,300,000 | ||||
Stock based compensation, volatility rate | 79.20% | |||||
Stock based compensation, dividend yield | 0% | |||||
Weighted average per share | $ 18 | |||||
Stock based compensation, risk-free interest rates | 2.86% | |||||
Stock based compensation, performance period of awards | 5 years | |||||
Stock-based compensation expense, description | Stock-based compensation expense associated with this award will be recognized over the earlier of (i) the derived service period and (ii) the date on which the market condition is satisfied. | |||||
Common Class B | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Number of shares issued | 101,133,201 | 101,133,201 | 0 | |||
Common Class A | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Number of shares issued | 41,239,957 | 41,239,957 | 0 | |||
Common Class A | Restricted Stock Units | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Weighted average per share | $ 17,900 | $ 17,850 | ||||
Common Class A | 2022 Long Term Incentive Plan [Member] | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Stock based compensation shares allocated | 3,121,000 | |||||
Stock based compensation shares available for grant | 2,543,000 | |||||
Ladd Wilks and Matt Wilks | Pro Frac L L C | Black Scholes Merton Option Pricing Model | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Stock based compensation expense | $ 33,700,000 | |||||
Stock based compensation, contractual term | 16 years 6 months | |||||
Stock based compensation, volatility rate | 64% | |||||
Stock based compensation, dividend yield | 0% | |||||
Pro Frac L L C | Ladd Wilks and Matt Wilks | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Percentage of equity interest | 1% | 1% | ||||
Pro Frac L L C | Ladd Wilks and Matt Wilks | Common Class B | ||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||
Number of shares issued | 1,220,978 | 1,220,978 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Mar. 31, 2022 | Sep. 30, 2022 | Jan. 01, 2022 | |
Lessee Lease Description [Line Items] | |||
Operating lease right-of-use assets | $ 78,569 | $ 35,800 | |
Operating lease liabilities | $ 82,712 | $ 35,800 | |
Lessee, operating lease, existence of option to extend | false | ||
Lessee, operating lease, existence of option to terminate | false | ||
Operating lease payments | $ 8,691 | ||
Deemed equity distribution | $ 3,664 | ||
Wilks Development, LLC | |||
Lessee Lease Description [Line Items] | |||
Cash consideration | 44,400 | ||
Operating lease payments | 51,600 | ||
Changes in cash consideration received | 3,700 | ||
Deemed equity distribution | $ 3,700 | ||
Maximum | |||
Lessee Lease Description [Line Items] | |||
Lessee, operating lease, remaining lease term | 10 years |
Leases - Summary of Components
Leases - Summary of Components of Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | |
Lease Cost [Abstract] | ||
Operating lease costs | $ 3,429 | $ 9,030 |
Short-term lease costs | 843 | 2,199 |
Total lease costs | $ 4,272 | $ 11,229 |
Leases - Summary of Other Suppl
Leases - Summary of Other Supplemental Information for Operating Leases (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Lessee Disclosure [Abstract] | |
Cash paid for amounts included in the measurement of our lease obligations | $ 8,691 |
Right-of-use assets obtained in exchange for lease obligations | 45,412 |
Right-of-use assets recognized upon adoption of the leasing standard | $ 35,817 |
Weighted-average remaining lease term | 8 years 1 month 6 days |
Weighted-average discount rate | 5% |
Leases - Summary of Maturity of
Leases - Summary of Maturity of Operating Leases (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jan. 01, 2022 |
Operating Lease Liabilities Payments Due [Abstract] | ||
Remainder of 2022 | $ 3,667 | |
2023 | 13,378 | |
2024 | 12,642 | |
2025 | 11,496 | |
2026 | 11,537 | |
2027 | 11,812 | |
2028 and thereafter | 38,465 | |
Total lease payments | 102,997 | |
Less imputed interest | (20,285) | |
Operating lease liabilities | $ 82,712 | $ 35,800 |
Related Party Transactions - Su
Related Party Transactions - Summary of Expenditures with Related Parties (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Related Party Transaction [Line Items] | ||||
Expenditures with related parties | $ 43,996 | $ 34,376 | $ 129,411 | $ 74,130 |
Automatize | ||||
Related Party Transaction [Line Items] | ||||
Expenditures with related parties | 22,428 | 25,228 | 72,279 | 56,496 |
FHE | ||||
Related Party Transaction [Line Items] | ||||
Expenditures with related parties | 4,025 | 11,302 | ||
Wilks Brothers | ||||
Related Party Transaction [Line Items] | ||||
Expenditures with related parties | 5,503 | 4,419 | 14,302 | 8,926 |
Related Lessors | ||||
Related Party Transaction [Line Items] | ||||
Expenditures with related parties | 1,821 | 1,604 | 6,469 | 4,719 |
Wilks Construction | ||||
Related Party Transaction [Line Items] | ||||
Expenditures with related parties | 9,327 | 22,716 | ||
Equify Financial | ||||
Related Party Transaction [Line Items] | ||||
Expenditures with related parties | 1,853 | 986 | 1,853 | |
Carbo | ||||
Related Party Transaction [Line Items] | ||||
Expenditures with related parties | 863 | 160 | 941 | 513 |
3 Twenty-Three | ||||
Related Party Transaction [Line Items] | ||||
Expenditures with related parties | 974 | 247 | 974 | |
Cisco Logistics | ||||
Related Party Transaction [Line Items] | ||||
Expenditures with related parties | 85 | 509 | ||
Interstate | ||||
Related Party Transaction [Line Items] | ||||
Expenditures with related parties | 24 | 20 | 56 | |
Equify Risk | ||||
Related Party Transaction [Line Items] | ||||
Expenditures with related parties | 3 | |||
Other | ||||
Related Party Transaction [Line Items] | ||||
Expenditures with related parties | $ 29 | $ 29 | $ 149 | $ 81 |
Related Party Transactions - _2
Related Party Transactions - Summary of Related Party Accounts Payable (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Related Party Transaction [Line Items] | ||
Related party accounts payable | $ 34,911 | $ 21,275 |
Automatize | ||
Related Party Transaction [Line Items] | ||
Related party accounts payable | 15,184 | 11,198 |
Wilks Brothers | ||
Related Party Transaction [Line Items] | ||
Related party accounts payable | 15,049 | 9,990 |
Wilks Construction | ||
Related Party Transaction [Line Items] | ||
Related party accounts payable | 4,640 | 57 |
Cisco Logistics | ||
Related Party Transaction [Line Items] | ||
Related party accounts payable | 1 | |
Carbo | ||
Related Party Transaction [Line Items] | ||
Related party accounts payable | 0 | 10 |
Related Lessors | ||
Related Party Transaction [Line Items] | ||
Related party accounts payable | 37 | 1 |
Other | ||
Related Party Transaction [Line Items] | ||
Related party accounts payable | $ 0 | $ 19 |
Related Party Transactions - _3
Related Party Transactions - Summary of Revenue from Related Parties (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Related Party Transaction [Line Items] | ||||
Revenue from related parties | $ 1,315 | $ 971 | $ 3,992 | $ 3,428 |
Flying A | ||||
Related Party Transaction [Line Items] | ||||
Revenue from related parties | 1,273 | 573 | 3,193 | 2,701 |
Carbo | ||||
Related Party Transaction [Line Items] | ||||
Revenue from related parties | 31 | 395 | 784 | 574 |
Wilks Brothers | ||||
Related Party Transaction [Line Items] | ||||
Revenue from related parties | 1 | 4 | 5 | |
Interstate | ||||
Related Party Transaction [Line Items] | ||||
Revenue from related parties | 4 | 2 | 4 | 113 |
Other | ||||
Related Party Transaction [Line Items] | ||||
Revenue from related parties | $ 6 | $ 1 | $ 7 | $ 35 |
Related Party Transactions - _4
Related Party Transactions - Summary of Related Party Accounts Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Related Party Transaction [Line Items] | ||
Related party accounts receivable | $ 4,510 | $ 4,515 |
Flying A | ||
Related Party Transaction [Line Items] | ||
Related party accounts receivable | 2,603 | 2,412 |
Cisco Logistics | ||
Related Party Transaction [Line Items] | ||
Related party accounts receivable | 1,493 | 1,489 |
Carbo | ||
Related Party Transaction [Line Items] | ||
Related party accounts receivable | 96 | 591 |
Interstate | ||
Related Party Transaction [Line Items] | ||
Related party accounts receivable | 316 | |
Other | ||
Related Party Transaction [Line Items] | ||
Related party accounts receivable | $ 2 | $ 23 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) $ in Millions | 1 Months Ended | 9 Months Ended | ||
Feb. 04, 2022 | May 31, 2022 | Jan. 31, 2021 | Sep. 30, 2022 | |
Munger Ranch | ||||
Related Party Transaction [Line Items] | ||||
Cash consideration | $ 30 | $ 30 | ||
Munger Ranch | IPO | ||||
Related Party Transaction [Line Items] | ||||
Cash consideration | $ 38.1 | |||
Munger Ranch | Common Class A | IPO | ||||
Related Party Transaction [Line Items] | ||||
Cash consideration | $ 30 | |||
Issuance of shares, Shares | 2,114,273 | |||
Agreement With ProFrac LLC?s member | ||||
Related Party Transaction [Line Items] | ||||
Proceeds from sale of equipment | $ 8.7 | |||
THRC Holdings | ||||
Related Party Transaction [Line Items] | ||||
Rights agreement amount | $ 8.1 | |||
Cash consideration | 30 | |||
THRC Holdings | Munger Ranch | ||||
Related Party Transaction [Line Items] | ||||
Rights agreement amount | 8.1 | |||
Cash consideration | $ 30 |
Acquisitions and Investments -
Acquisitions and Investments - Additional Information (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 3 Months Ended | 4 Months Ended | 9 Months Ended | ||||||||||||||||||
Jul. 25, 2022 USD ($) | Mar. 04, 2022 USD ($) | Feb. 16, 2022 USD ($) d Fleet $ / shares | Feb. 14, 2022 USD ($) | Feb. 04, 2022 USD ($) | Feb. 02, 2022 USD ($) d Fleet Director $ / shares | Dec. 22, 2020 USD ($) | Jun. 30, 2022 USD ($) $ / shares shares | May 31, 2022 USD ($) Director shares | Dec. 31, 2021 USD ($) $ / shares shares | Oct. 31, 2021 USD ($) | Jan. 31, 2021 USD ($) | Sep. 30, 2022 USD ($) $ / shares shares | Jun. 30, 2022 $ / shares shares | Mar. 31, 2022 USD ($) | Dec. 23, 2021 USD ($) | Sep. 30, 2021 USD ($) | May 17, 2022 USD ($) | Sep. 30, 2022 USD ($) $ / shares shares | Sep. 30, 2021 USD ($) | May 12, 2022 $ / shares | Feb. 09, 2022 USD ($) | |
Business Acquisition [Line Items] | ||||||||||||||||||||||
Revenues | $ 696,730 | $ 195,931 | $ 1,631,554 | $ 520,336 | ||||||||||||||||||
Pretax earnings | (151,519) | 13,905 | (250,602) | 48,808 | ||||||||||||||||||
Noncash income | (928) | $ (92) | 8,292 | $ 148 | ||||||||||||||||||
Preferred units purchased | ||||||||||||||||||||||
Noncontrolling interests | 1,039 | 81,819 | 81,819 | |||||||||||||||||||
Property, plant and equipment | $ 363,687 | $ 821,209 | $ 821,209 | |||||||||||||||||||
Common Class A | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Common stock, shares authorized | shares | 600,000,000 | 600,000,000 | 600,000,000 | |||||||||||||||||||
Common stock, par value | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||||||||||||||||||
IPO | Common Class A | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Common stock, par value | $ / shares | $ 0.01 | |||||||||||||||||||||
Common Stock | IPO | Common Class A | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Issuance of shares, Shares | shares | 18,228,000 | |||||||||||||||||||||
THRC Holdings | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Cash consideration | $ 30,000 | |||||||||||||||||||||
Rights agreement amount | 8,100 | |||||||||||||||||||||
FTS International, Inc | THRC Holdings | FTSI Merger Agreement | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Ownership percentage | 19.50% | |||||||||||||||||||||
Percentage of distributed equity owned by related parties | 50% | |||||||||||||||||||||
FTS International, Inc | Farris Wilks | FTSI Merger Agreement | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Percentage of distributed equity owned by related parties | 50% | |||||||||||||||||||||
Eagleton Venture Inc | Eagleton Right Agreement | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Cash consideration | $ 3,900 | |||||||||||||||||||||
Ownership percentage | 15.172% | |||||||||||||||||||||
FTS International, Inc | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Purchase price | $ 405,700 | |||||||||||||||||||||
Cash consideration | 332,800 | |||||||||||||||||||||
Equity interest | $ 72,900 | |||||||||||||||||||||
Revenues | $ 48,600 | |||||||||||||||||||||
Pretax earnings | 100 | |||||||||||||||||||||
FTS International, Inc | Selling, General, and Administrative | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Acquisition related costs | 3,700 | |||||||||||||||||||||
Severance costs | $ 9,300 | |||||||||||||||||||||
FTS International, Inc | FTSI Merger Agreement | Pro Frac L L C | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Percentage of acquired equity distributed by subsidiaries | 80.50% | |||||||||||||||||||||
Flotek Industries, Inc. | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Revenues | $ 21,200 | |||||||||||||||||||||
Pretax earnings | $ 21,100 | |||||||||||||||||||||
Minimum number of hydraulic fleets | Fleet | 10 | |||||||||||||||||||||
Term of agreement on hydraulic fleets | 3 years | |||||||||||||||||||||
Percentage of margin for agreement | 7% | |||||||||||||||||||||
Number of new directors | Director | 2 | |||||||||||||||||||||
Term of agreement increased on hydraulic fleets | 10 years | |||||||||||||||||||||
Number of hydraulic fleets increased | Fleet | 30 | |||||||||||||||||||||
Number of additional directors | Director | 2 | |||||||||||||||||||||
Percentage of loss allocated noncontrolling interests | 100% | |||||||||||||||||||||
Sale of Stock, Description of Transaction | The Flotek Supply Agreement Amendment includes a minimum annual volume commitment whereby we will be obligated to pay Flotek liquidated damages equal to 25% of the shortfall for such year, should we fail to meet the minimum purchase amount. At May 17, 2022, we had a supply agreement contract liability of $9.9 million, which was included as purchase consideration for Flotek as a settlement of a pre-existing relationship. All effects of the Supply Agreement have been eliminated from our consolidated financial statements subsequent to May 17, 2022. | |||||||||||||||||||||
Supply agreement contract liability | $ 9,874 | $ 9,900 | ||||||||||||||||||||
Percentage of accrued paid-in-kind interest rate | 10% | |||||||||||||||||||||
Debt instrument, term | 1 year | |||||||||||||||||||||
Weighted average trading price | $ / shares | $ 2.50 | |||||||||||||||||||||
Debt instrument, face amount | $ 20,000 | |||||||||||||||||||||
Noncash income | 10,200 | |||||||||||||||||||||
Common stock, shares authorized | shares | 13,100,000 | 13,100,000 | ||||||||||||||||||||
Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | ||||||||||||||||||||
Payments for repurchase of common stock | $ 19,500 | |||||||||||||||||||||
Stock consideration payable | $ 4,500 | |||||||||||||||||||||
Estimated fair value of convertible notes | $ 30,220 | $ 30,200 | ||||||||||||||||||||
Flotek Industries, Inc. | Debt Instrument, Redemption, Period One | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Debt instrument, convertible, conversion price | $ / shares | $ 1.088125 | $ 1.088125 | ||||||||||||||||||||
Debt instrument, convertible, threshold trading days | d | 20 | |||||||||||||||||||||
Debt instrument, convertible, threshold consecutive trading days | d | 30 | |||||||||||||||||||||
Flotek Industries, Inc. | Debt Instrument, Redemption, Period Two | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Debt instrument, convertible, conversion price | $ / shares | $ 1.088125 | |||||||||||||||||||||
Weighted average trading price | $ / shares | $ 2.50 | |||||||||||||||||||||
Debt instrument, convertible, threshold trading days | d | 20 | |||||||||||||||||||||
Debt instrument, convertible, threshold consecutive trading days | d | 30 | |||||||||||||||||||||
Flotek Industries, Inc. | Debt Instrument, Redemption, Period Three | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Debt instrument, convertible, conversion price | $ / shares | $ 0.8705 | |||||||||||||||||||||
Flotek Industries, Inc. | Maximum | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Number of new directors | Director | 4 | |||||||||||||||||||||
Flotek Industries, Inc. | Pro Frac L L C | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Percentage of equity interest | 17% | 43% | ||||||||||||||||||||
Flotek Industries, Inc. | Private Offering | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Convertible notes payable | $ 10,000 | |||||||||||||||||||||
Flotek Industries, Inc. | Common Stock | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Convertible notes payable | $ 50,000 | $ 10,000 | ||||||||||||||||||||
Monahans | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Purchase price | $ 97,700 | |||||||||||||||||||||
Percentage of outstanding shares of common stock | 100% | |||||||||||||||||||||
Basin Production and Completion LLC | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Preferred units purchased | $ 4,200 | $ 46,000 | ||||||||||||||||||||
Percentage of preferred unit purchased | 20% | |||||||||||||||||||||
Investment | $ 49,800 | $ 49,800 | ||||||||||||||||||||
Basin Production and Completion LLC | A-1 and B-1 Preferred Units | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Preferred units purchased | 40,000 | |||||||||||||||||||||
Basin Production and Completion LLC | Selling Holders of B-1 Preferred Units | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Preferred units purchased | $ 6,000 | |||||||||||||||||||||
Basin Production and Completion LLC | FHE USA LLC | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Loan made | $ 1,250 | |||||||||||||||||||||
Interest rate effective percentage | 5% | |||||||||||||||||||||
Debt instrument maturity date | Feb. 14, 2027 | |||||||||||||||||||||
EKU | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Noncontrolling interests | $ 1,200 | $ 1,200 | ||||||||||||||||||||
Percentage of equity purchased | 25% | |||||||||||||||||||||
Net working capital | 2,500 | |||||||||||||||||||||
Property, plant and equipment | 400 | |||||||||||||||||||||
Intangible assets | 3,500 | |||||||||||||||||||||
Debt | 1,400 | |||||||||||||||||||||
Investment in associate eliminated | $ 3,700 | |||||||||||||||||||||
EKU | Pro Frac L L C | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Percentage of equity interest | 75% | |||||||||||||||||||||
EKU | Pro Frac L L C | Maximum | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Percentage of equity interest | 50% | |||||||||||||||||||||
EKU | Pro Frac L L C | Minimum | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Percentage of equity interest | 20% | |||||||||||||||||||||
Munger Ranch | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Cash consideration | $ 30,000 | 30,000 | ||||||||||||||||||||
Percentage of outstanding shares of common stock | 1.50% | |||||||||||||||||||||
Liquidation percentage | 100% | |||||||||||||||||||||
Business combination, Fair value | $ 5,000 | |||||||||||||||||||||
Munger Ranch | IPO | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Cash consideration | $ 38,100 | |||||||||||||||||||||
Munger Ranch | IPO | Common Class A | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Cash consideration | $ 30,000 | |||||||||||||||||||||
Issuance of shares, Shares | shares | 2,114,273 | |||||||||||||||||||||
Munger Ranch | THRC Holdings | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Cash consideration | 30,000 | |||||||||||||||||||||
Rights agreement amount | $ 8,100 | |||||||||||||||||||||
iQ-TEQ, LLC | ||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||
Cash consideration | $ 2,200 | |||||||||||||||||||||
Net working capital | 200 | |||||||||||||||||||||
Property, plant and equipment | 100 | |||||||||||||||||||||
Intangible assets | 2,400 | |||||||||||||||||||||
Debt | $ 400 |
Acquisitions and Investments _2
Acquisitions and Investments - Summary of Preliminary Allocation of Purchase Price (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jul. 25, 2022 | Mar. 31, 2022 |
Assets acquired: | |||
Goodwill | $ 97,573 | ||
FTS International, Inc | |||
Assets acquired: | |||
Cash and cash equivalents | $ 53,771 | ||
Accounts receivable | 89,268 | ||
Prepaid expense and other assets | 4,037 | ||
Inventories | 42,344 | ||
Property, plant and equipment | 307,113 | ||
Operating lease ROU asset | 2,748 | ||
Intangible assets | 1,239 | ||
Other long-term assets | 1,583 | ||
Total assets acquired | 502,103 | ||
Other assets | 1,583 | ||
Liabilities assumed: | |||
Accounts payable | 62,985 | ||
Accrued expenses | 19,308 | ||
Operating lease liability current | 1,235 | ||
Current portion of debt | 10,136 | ||
Other current liabilities | 309 | ||
Operating lease liability non-current | 1,512 | ||
Other non-current liabilities | 928 | ||
Total liabilities assumed | 96,413 | ||
Net assets acquired | $ 405,690 | ||
Monahans | |||
Assets acquired: | |||
Cash and cash equivalents | $ 61 | ||
Accounts receivable | 11,117 | ||
Prepaid expense and other assets | 596 | ||
Inventories | 3,148 | ||
Property, plant and equipment | 103,665 | ||
Intangible assets | 7,500 | ||
Goodwill | 15,233 | ||
Other long-term assets | 8,916 | ||
Total assets acquired | 150,236 | ||
Other assets | 8,916 | ||
Liabilities assumed: | |||
Accounts payable | 9,783 | ||
Accrued expenses | 1,035 | ||
Current portion of debt | 45 | ||
Other current liabilities | 15,757 | ||
Long-term debt | 25 | ||
Long-term debt | 25 | ||
Other non-current liabilities | 21,596 | ||
Total liabilities assumed | 52,576 | ||
Deferred revenue | 4,335 | ||
Net assets acquired | $ 97,660 |
Acquisitions and Investments _3
Acquisitions and Investments - Summary of Preliminary Allocation of Fair Value of Flotek's Assets, Liabilities and Noncontrolling Interest (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | May 17, 2022 | Feb. 02, 2022 |
Assets acquired: | |||
Goodwill | $ 97,573 | ||
Flotek Industries, Inc. | |||
Settlement of pre-existing relationships | |||
Accounts payable | $ (2,713) | ||
Supply Agreement contract | $ (9,900) | (9,874) | |
Fair value of previously held interest in 10% Convertible PIK Notes | $ 30,200 | 30,220 | |
Settlement of pre-existing relationships | 17,633 | ||
Assets acquired: | |||
Cash and cash equivalents | 21,725 | ||
Restricted cash | 40 | ||
Accounts receivable | 18,853 | ||
Inventories | 12,210 | ||
Assets held for sale | 1,805 | ||
Other current assets | 3,405 | ||
Property, plant and equipment | 21,551 | ||
Operating lease ROU asset | 3,884 | ||
Deferred tax assets | 282 | ||
Goodwill | 82,340 | ||
Other long-term assets | 17 | ||
Total assets acquired | 166,112 | ||
Liabilities assumed: | |||
Accounts payable and accrued liabilities | 24,203 | ||
Operating lease liabilities | 7,394 | ||
Finance lease liabilities | 79 | ||
Long-term debt | 17,101 | ||
Other non-current liabilities | 85 | ||
Total liabilities assumed | 48,862 | ||
Noncontrolling interests | 99,617 | ||
Assets acquired less liabilities assumed and noncontrolling interests | $ 17,633 |
Acquisitions and Investments _4
Acquisitions and Investments - Summary of Unaudited Pro Forma Results of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Business Acquisition Pro Forma Information [Abstract] | ||||
Revenue | $ 705,900 | $ 303,267 | $ 1,763,830 | $ 852,069 |
Net income (loss) | $ 144,895 | $ (40,763) | $ 195,268 | $ (136,403) |
Goodwill - Summary of Changes i
Goodwill - Summary of Changes in Carrying Amount of Goodwill by Reportable Segment (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Goodwill [Line Items] | |
Balances at September 30, 2022 | $ 97,573 |
Flotek | |
Goodwill [Line Items] | |
Acquisition | 82,340 |
Monahans | |
Goodwill [Line Items] | |
Acquisition | 15,233 |
Proppant Production | |
Goodwill [Line Items] | |
Balances at September 30, 2022 | 15,233 |
Proppant Production | Monahans | |
Goodwill [Line Items] | |
Acquisition | 15,233 |
Other | |
Goodwill [Line Items] | |
Balances at September 30, 2022 | 82,340 |
Other | Flotek | |
Goodwill [Line Items] | |
Acquisition | $ 82,340 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Additional Information (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | $ 0 | $ 0 |
Liabilities measured at fair value | $ 0 | 0 |
Level 3 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | 0 | |
Liabilities measured at fair value | $ 0 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Fair Value of Financial Instruments within Level 3 of Fair Value Hierarchy (Details) - Level 3 $ in Thousands | Sep. 30, 2022 USD ($) |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Total | $ 49,752 |
BPC Investment | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Total | $ 49,752 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Reconciliation of Beginning and Ending Balances for assets Measures at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Mar. 31, 2022 | Sep. 30, 2022 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Fair value, beginning of period | $ 79,546 | |
Transfer of cost method investment to Level 3 fair value measurement | $ 4,244 | |
Change in fair value of Level 3 fair value measurements | 8,100 | |
Fair value, end of period | 79,546 | 49,752 |
Flotek Industries, Inc. | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Acquisition | 20,000 | |
Change in fair value | 2,120 | |
Elimination of Flotek convertible notes at acquisition date | (30,220) | |
Basin Production and Completion LLC | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Acquisition | $ 47,202 | |
Change in fair value | $ (1,694) |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments - Fair Value Measurement Key Inputs (Details) | May 17, 2022 | Mar. 31, 2022 |
Risk-free Interest Rate | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||
Measurement inputs | 1.82 | 1.63 |
Expected Volatility | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||
Measurement inputs | 90 | 90 |
Term Until Liquidation (Years) | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||
Measurement inputs | 0.72 | 0.84 |
Stock Price | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis Valuation Techniques [Line Items] | ||
Measurement inputs | 1.29 | 1.26 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - Pending Litigation - USD ($) $ in Millions | 9 Months Ended | |||
Nov. 12, 2018 | Jul. 19, 2018 | Jun. 24, 2015 | Sep. 30, 2022 | |
Automobile Accident | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency, damages awarded initially | $ 33 | $ 100 | ||
Master Purchase Agreement For Products And/Or Services | ProFrac Services, LLC | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency, monetary relief sought by plaintiff | $ 8.3 | |||
Minimum | Automobile Accident | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency, monetary relief sought by plaintiff | $ 1 |
Segment Information - Additiona
Segment Information - Additional Information (Details) - Segment | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting Information [Line Items] | ||||
Number of reportable segment | 3 | |||
Revenue | Customer Concentration Risk | Manufacturing | ||||
Segment Reporting Information [Line Items] | ||||
Percentage of revenue | 95% | 91% | 91% | 88% |
Revenue | Customer Concentration Risk | Proppant Production | ||||
Segment Reporting Information [Line Items] | ||||
Percentage of revenue | 56% | 61% | 46% | 40% |
Segment Information - Summary o
Segment Information - Summary of Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Reporting Information [Line Items] | |||||||
Cost of revenues, excluding depreciation, depletion and amortization | $ 696,730 | $ 195,931 | $ 1,631,554 | $ 520,336 | |||
Adjusted EBITDA for reportable segments | 256,099 | 34,518 | 558,143 | 86,277 | |||
Interest expense, net | (16,261) | (6,896) | (38,984) | (19,118) | |||
Depreciation, depletion and amortization | (68,758) | (35,241) | (177,038) | (105,606) | |||
Income tax (provision) benefit | (8,157) | (170) | (13,021) | 138 | |||
Loss on disposal of assets, net | (667) | (3,397) | (2,656) | (7,472) | |||
Loss on extinguishment of debt | (242) | (17,337) | |||||
Litigation accrual | (4,000) | ||||||
Stock compensation expense | (2,719) | (4,174) | |||||
Stock compensation expense related to deemed contributions | (10,207) | (49,056) | |||||
Bad debt expense, net of recoveries | (2,562) | (5) | (2,562) | ||||
Loss on foreign currency transactions | 80 | (116) | 126 | (116) | |||
Reorganization costs | (211) | (55) | (211) | ||||
Acquisition related expenses | (5,806) | (22,888) | |||||
Unrealized gain on investments, net | 8,526 | ||||||
Net income (loss) | 143,362 | $ 24,126 | (14,075) | $ (8,606) | $ (25,989) | 237,581 | (48,670) |
Reportable Segments | |||||||
Segment Reporting Information [Line Items] | |||||||
Cost of revenues, excluding depreciation, depletion and amortization | 788,834 | 216,983 | 1,813,703 | 573,442 | |||
Reportable Segments | Stimulation Services | |||||||
Segment Reporting Information [Line Items] | |||||||
Cost of revenues, excluding depreciation, depletion and amortization | 668,578 | 190,723 | 1,581,289 | 502,932 | |||
Adjusted EBITDA for reportable segments | 249,557 | 31,599 | 519,214 | 75,027 | |||
Reportable Segments | Manufacturing | |||||||
Segment Reporting Information [Line Items] | |||||||
Cost of revenues, excluding depreciation, depletion and amortization | 48,742 | 19,861 | 115,602 | 50,741 | |||
Adjusted EBITDA for reportable segments | 8,416 | 502 | 27,798 | 3,181 | |||
Reportable Segments | Proppant Production | |||||||
Segment Reporting Information [Line Items] | |||||||
Cost of revenues, excluding depreciation, depletion and amortization | 24,642 | 6,399 | 54,581 | 19,769 | |||
Adjusted EBITDA for reportable segments | 9,198 | 2,417 | 29,657 | 8,069 | |||
Reportable Segments | Other | |||||||
Segment Reporting Information [Line Items] | |||||||
Cost of revenues, excluding depreciation, depletion and amortization | 46,872 | 62,231 | |||||
Adjusted EBITDA for reportable segments | (11,072) | (18,526) | |||||
Eliminations | |||||||
Segment Reporting Information [Line Items] | |||||||
Cost of revenues, excluding depreciation, depletion and amortization | $ (92,104) | $ (21,052) | $ (182,149) | $ (53,106) |
Segment Information - Summary_2
Segment Information - Summary of Reconciliation of Segment Adjusted EBITDA to Net Loss (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Segment Reporting Information [Line Items] | ||
Total assets | $ 1,979,284 | $ 664,570 |
Reportable Segments | ||
Segment Reporting Information [Line Items] | ||
Total assets | 2,299,469 | 688,841 |
Eliminations | ||
Segment Reporting Information [Line Items] | ||
Total assets | (320,185) | (24,271) |
Stimulation Services | Reportable Segments | ||
Segment Reporting Information [Line Items] | ||
Total assets | 1,663,989 | 510,579 |
Manufacturing | Reportable Segments | ||
Segment Reporting Information [Line Items] | ||
Total assets | 140,396 | 77,968 |
Proppant Production | Reportable Segments | ||
Segment Reporting Information [Line Items] | ||
Total assets | 298,138 | $ 100,294 |
Other | Reportable Segments | ||
Segment Reporting Information [Line Items] | ||
Total assets | $ 196,946 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - USD ($) | Nov. 01, 2022 | Oct. 31, 2022 | Sep. 30, 2022 | Jul. 25, 2022 | Jun. 30, 2022 | Jul. 24, 2022 | Apr. 08, 2022 | Mar. 04, 2022 | Dec. 31, 2021 |
Subsequent Event [Line Items] | |||||||||
Borrowings | $ 568,004,000 | $ 306,695,000 | |||||||
Aggregate maximum revolver amount | $ 146,200,000 | ||||||||
New ABL Credit Facility | |||||||||
Subsequent Event [Line Items] | |||||||||
Borrowings | 0 | ||||||||
Aggregate maximum revolver amount | $ 200,000,000 | $ 300,000,000 | $ 200,000,000 | $ 200,000,000 | $ 100,000,000 | ||||
Increase in borrowing capacity | $ 100,000,000 | ||||||||
Common Class A | |||||||||
Subsequent Event [Line Items] | |||||||||
VWAP of common stock | $ 16.26 | $ 20.02 | |||||||
Subsequent Event | New ABL Credit Facility | |||||||||
Subsequent Event [Line Items] | |||||||||
Aggregate maximum revolver amount | $ 280,000,000 | $ 200,000,000 | |||||||
Outstanding amount | 0 | ||||||||
Subsequent Event | New ABL Credit Facility | Maximum | |||||||||
Subsequent Event [Line Items] | |||||||||
Increase in borrowing capacity | $ 120,000,000 | ||||||||
Subsequent Event | U.S. Well Services, Inc. | |||||||||
Subsequent Event [Line Items] | |||||||||
Acquisition date | Nov. 01, 2022 | ||||||||
Debt Securities | 170,000,000 | ||||||||
Equipment related finance outstanding | $ 35,000,000 | ||||||||
Subsequent Event | U.S. Well Services, Inc. | New ABL Credit Facility | |||||||||
Subsequent Event [Line Items] | |||||||||
Borrowings | $ 164,000,000 | ||||||||
Subsequent Event | U.S. Well Services, Inc. | February Term C Loan Warrants and March Term C Loan Warrants | |||||||||
Subsequent Event [Line Items] | |||||||||
Aggregate consideration | 2,600,000 | ||||||||
Subsequent Event | Common Class A | U.S. Well Services, Inc. | |||||||||
Subsequent Event [Line Items] | |||||||||
VWAP of common stock | $ 270,000,000 | ||||||||
Conversion of common stock | 0.3366 | ||||||||
Subsequent Event | Common Class A | U.S. Well Services, Inc. | Wilks Parties | |||||||||
Subsequent Event [Line Items] | |||||||||
Number of shares received as merger consideration | 4,100,000 | ||||||||
Subsequent Event | USWS Class A Common Stock | U.S. Well Services, Inc. | |||||||||
Subsequent Event [Line Items] | |||||||||
Aggregate principal amount | 12,900,000 | ||||||||
Subsequent Event | USWS Series A Preferred Stock | U.S. Well Services, Inc. | |||||||||
Subsequent Event [Line Items] | |||||||||
Aggregate principal amount | 12,900,000 | ||||||||
Subsequent Event | USWS Equity Linked Convertible Notes | U.S. Well Services, Inc. | |||||||||
Subsequent Event [Line Items] | |||||||||
Aggregate principal amount | 12,900,000 | ||||||||
Subsequent Event | USWS Equity Awards | U.S. Well Services, Inc. | |||||||||
Subsequent Event [Line Items] | |||||||||
Aggregate principal amount | 12,900,000 |