Cactus Announces Fourth Quarter and Full Year 2024 Results

Business Wire 26-Feb-2025 5:30 PM

Cactus, Inc. (NYSE:WHD) ("Cactus" or the "Company") today announced financial and operating results for the fourth quarter and full year of 2024.

Fourth Quarter Highlights

• Revenue of $272.1 million and operating income of $70.5 million;
• Net income of $57.4 million and diluted earnings per Class A share of $0.68;
• Adjusted net income⁽¹⁾ of $56.8 million and diluted earnings per share, as adjusted⁽¹⁾ of $0.71;
• Net income margin of 21.1% and adjusted net income margin⁽¹⁾ of 20.9%;
• Adjusted EBITDA⁽²⁾ and Adjusted EBITDA margin⁽²⁾ of $92.7 million and 34.1%, respectively;
• Cash flow from operations of $66.6 million;
• Cash and cash equivalents balance of $342.8 million with no bank debt outstanding as of December 31, 2024; and
• In January 2025, the Board of Directors declared a quarterly cash dividend of $0.13 per Class A share.

Financial Summary

Scott Bender, CEO and Chairman of the Board of Cactus, commented, "Full year results for 2024 reflect solid performance in both of our business segments. In the fourth quarter, adjusted EBITDA margins remained strong, although revenues were softer than anticipated in our Spoolable Technologies segment due to elevated seasonal industry slowdowns."

"In the first quarter of 2025, we anticipate that U.S. land activity levels will be unchanged from the fourth quarter of 2024. In Pressure Control, we expect revenues to be flat to up sequentially. In Spoolable Technologies, we anticipate revenues to be softer than the fourth quarter. Activity in the first quarter has been slow to recover from deeper than anticipated seasonal declines at the end of the fourth quarter. Similar to prior years, we expect that Spoolable Technologies revenues will increase in the seasonally stronger second quarter."

Mr. Bender concluded, "I remain immensely proud of the business our team has established, with two segments that outperformed the lower year-over-year average industry activity levels in 2024. Our focus on offering our customers differentiated, highly engineered products and services that provide safety and efficiency benefits continues to be the driver of this out performance. Although expectations for 2025 U.S. land activity levels remain soft, we have several initiatives underway that are intended to grow our customer base and mitigate potential tariff impacts, including further international sales growth, diversifying our supply chain, and introducing new products."

Segment Performance

We report two business segments, Pressure Control and Spoolable Technologies. Corporate and other expenses not directly attributable to either segment are presented separately as Corporate and Other Expenses.

Pressure Control

Fourth quarter 2024 Pressure Control revenue decreased $8.4 million, or 4.5%, sequentially, as sales of wellhead and production related equipment declined primarily due to lower customer activity. Operating income was $1.7 million lower, or 3.3%, sequentially, with margins increasing 40 basis points due to the non-recurrence of reserves taken in the third quarter, partly offset by lower operating leverage. Adjusted Segment EBITDA decreased 0.8%, sequentially, with Adjusted Segment EBITDA margins increasing 130 basis points.

Spoolable Technologies

Fourth quarter 2024 Spoolable Technologies revenues decreased $12.1 million, or 11.2%, sequentially, due to reduced customer activity levels in the seasonally slow quarter. Operating income was $7.4 million lower, or 22.4%, sequentially, with operating income margins decreasing 380 basis points due to higher input costs and reduced operating leverage. Adjusted Segment EBITDA was $7.3 million lower, or 17.1%, sequentially, with Adjusted Segment EBITDA margins decreasing 260 basis points.

Corporate and Other Expenses

Fourth quarter 2024 Corporate and Other expenses decreased $2.8 million, or 31.8%, sequentially, primarily due to the non-recurrence of professional fees incurred during the third quarter related to growth initiatives.

Liquidity, Capital Expenditures and Other

As of December 31, 2024, the Company had $342.8 million of cash and cash equivalents, no bank debt outstanding, and $222.6 million of availability on our revolving credit facility. Operating cash flow was $66.6 million for the fourth quarter of 2024. During the fourth quarter, the Company made dividend payments and associated distributions of $10.3 million. The Company also made TRA payments and associated distributions of $6.3 million related to 2023 tax savings provided by the TRA.

Net capital expenditures were $11.3 million during the fourth quarter of 2024. Net capital expenditures for the full year of 2024 were $35.4 million. For the full year 2025, the Company expects net capital expenditures to be in the range of $45 million to $55 million, inclusive of capital directed towards supply chain diversification efforts and efficiency improvements in the Baytown manufacturing facility.

As of December 31, 2024, Cactus had 68,151,542 shares of Class A common stock outstanding (representing 85.6% of the total voting power) and 11,432,545 shares of Class B common stock outstanding (representing 14.4% of the total voting power).

Quarterly Dividend

In January 2025, the Board approved a quarterly cash dividend of $0.13 per share of Class A common stock, with payment to occur on March 20, 2025 to holders of record of Class A common stock at the close of business on March 3, 2025. A corresponding distribution of up to $0.13 per CC Unit has also been approved for holders of CC Units of Cactus Companies, LLC.

Conference Call Details

The Company will host a conference call to discuss financial and operational results tomorrow, Thursday February 27, 2025 at 9:00 a.m. Central Time (10:00 a.m. Eastern Time).

The call will be webcast on Cactus' website at www.CactusWHD.com. Please access the webcast for the call at least 10 minutes ahead of the start time to ensure a proper connection. Analysts and institutional investors may click here to pre-register for the conference call and obtain a dial-in number and passcode.

An archived webcast of the conference call will be available on the Company's website shortly after the end of the call.

About Cactus, Inc.

Cactus designs, manufactures, sells or rents a range of highly engineered pressure control and spoolable pipe technologies. Its products are sold and rented principally for onshore unconventional oil and gas wells and are utilized during the drilling, completion and production phases of its customers' wells. In addition, it provides field services for its products and rental items to assist with the installation, maintenance and handling of the equipment. Cactus operates service centers throughout North America and Australia, while also providing equipment and services in select international markets.

Cautionary Statement Concerning Forward-Looking Statements

Certain statements contained in this press release and oral statements made regarding the matters addressed in this release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of Cactus' control, that could cause actual results to differ materially from the results discussed in the forward-looking statements.

Forward-looking statements can be identified by the use of forward-looking terminology including "may," "believe," "expect," "intend," "anticipate," "plan," "should," "estimate," "continue," "potential," "will," "when," "once," "hope" or other similar words and include the Company's expectation of future performance contained herein. These statements discuss future expectations, contain projections of results of operations or of financial condition, or state other "forward-looking" information. You are cautioned not to place undue reliance on any forward-looking statements, which can be affected by assumptions used or by risks or uncertainties. Consequently, no forward-looking statements can be guaranteed. When considering these forward-looking statements, you should keep in mind the risk factors and other factors noted in the Company's Annual Report on Form 10-K, any Quarterly Reports on Form 10-Q and the other documents that the Company files with the Securities and Exchange Commission. The risk factors and other factors noted therein could cause actual results to differ materially from those contained in any forward-looking statement. Cactus disclaims any duty to update and does not intend to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this press release.

Cactus, Inc. – Supplemental Information Reconciliation of GAAP to non-GAAP Financial Measures Adjusted net income, diluted earnings per share, as adjusted and adjusted net income margin (unaudited)

Adjusted net income, diluted earnings per share, as adjusted and adjusted net income margin are not measures of net income as determined by GAAP but they are supplemental non-GAAP financial measures that are used by management and external users of the Company's consolidated financial statements. Cactus defines adjusted net income as net income assuming Cactus, Inc. held all units in its operating subsidiary at the beginning of the period, with the resulting additional income tax expense related to the incremental income attributable to Cactus, Inc. Adjusted net income also includes certain other adjustments described below. Cactus defines diluted earnings per share, as adjusted as Adjusted net income divided by weighted average shares outstanding, as adjusted. Cactus defines Adjusted net income margin as Adjusted net income divided by total revenue. The Company believes this supplemental information is useful for evaluating performance period over period.

Cactus, Inc. – Supplemental Information Reconciliation of GAAP to non-GAAP Financial Measures EBITDA, Adjusted EBITDA and Adjusted EBITDA margin (unaudited)

EBITDA, Adjusted EBITDA and Adjusted EBITDA margin are not measures of net income as determined by GAAP but are supplemental non-GAAP financial measures that are used by management and external users of the Company's consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. Cactus defines EBITDA as net income excluding net interest, income tax and depreciation and amortization. Cactus defines Adjusted EBITDA as EBITDA excluding the other items outlined below.

Cactus management believes EBITDA and Adjusted EBITDA are useful because they allow management to more effectively evaluate the Company's operating performance and compare the results of its operations from period to period without regard to financing methods or capital structure, or other items that impact comparability of financial results from period to period. EBITDA and Adjusted EBITDA should not be considered as alternatives to, or more meaningful than, net income or any other measure as determined in accordance with GAAP. The Company's computations of EBITDA and Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. Cactus defines Adjusted EBITDA margin as Adjusted EBITDA divided by total revenue. Cactus presents this supplemental information because it believes it provides useful information regarding the factors and trends affecting the Company's business.

Cactus, Inc. – Supplemental Information Reconciliation of GAAP to non-GAAP Financial Measures Adjusted Segment EBITDA and Adjusted Segment EBITDA margin (unaudited)

Adjusted Segment EBITDA and Adjusted Segment EBITDA margin are not measures of net income as determined by GAAP but are supplemental non-GAAP financial measures that are used by management and external users of the Company's consolidated financial statements, such as industry analysts, investors, lenders and rating agencies. Cactus defines Adjusted Segment EBITDA as segment operating income excluding depreciation and amortization and the other items outlined below, in each case, that are attributable to the segment.

Cactus management believes Adjusted Segment EBITDA is useful because it allows management to more effectively evaluate the Company's segment operating performance and compare the results of its segment operations from period to period without regard to financing methods or capital structure, or other items that impact comparability of financial results from period to period. Adjusted Segment EBITDA should not be considered as an alternative to, or more meaningful than, net income or any other measure as determined in accordance with GAAP. The Company's computations of Adjusted Segment EBITDA may not be comparable to other similarly titled measures of other companies. Cactus defines Adjusted Segment EBITDA margin as Adjusted Segment EBITDA divided by total segment revenue. Cactus presents this supplemental information because it believes it provides useful information regarding the factors and trends affecting the Company's business.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250225592981/en/

Cactus, Inc. Alan Boyd, 713-904-4669 Director of Corporate Development and Investor Relations IR@CactusWHD.com