株探米国株
日本語 英語
エドガーで原本を確認する
FALSE000169913600016991362024-10-302024-10-30

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________________________________________________________
FORM 8-K
______________________________________________________________________________
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 30, 2024
______________________________________________________________________________
Cactus, Inc.
(Exact name of registrant as specified in its charter)
______________________________________________________________________________

Delaware 001-38390 35-2586106
(State or other jurisdiction of incorporation) (Commission File Number) (I.R.S. Employer Identification No.)


920 Memorial City Way, Suite 300
Houston, Texas 77024
(Address of principal executive offices)
(Zip Code)

(713) 626-8800
(Registrant’s telephone number, including area code)
______________________________________________________________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Class A Common Stock, par value $0.01 WHD New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company    ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

1



Item 2.02 Results of Operations and Financial Condition.

The following information is furnished pursuant to Item 2.02.

On October 30, 2024, Cactus, Inc. (the “Company”) issued a press release announcing its results for the third quarter ended September 30, 2024. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated in this Item 2.02 by reference.

The information being furnished pursuant to this Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit
No.
Description
99.1
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)

2



Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Cactus, Inc.
October 30, 2024 By: /s/ Jay A. Nutt
Date Name: Jay A. Nutt
Title: Executive Vice President, Chief Financial Officer and Treasurer

3

EX-99.1 2 whd-2024093024xexhibit991.htm EX-99.1 Document

Exhibit 99.1
whd-20200429xex99d1g001a.jpg

Cactus Announces Third Quarter 2024 Results

HOUSTON – October 30, 2024 – Cactus, Inc. (NYSE: WHD) (“Cactus” or the “Company”) today announced financial and operating results for the third quarter of 2024.
Third Quarter Highlights
•Revenue of $293.2 million and operating income of $76.8 million;
•Net income of $62.4 million and diluted earnings per Class A share of $0.74;
•Adjusted net income(1) of $63.5 million and diluted earnings per share, as adjusted(1) of $0.79;
•Net income margin of 21.3% and adjusted net income margin(1) of 21.7%;
•Adjusted EBITDA(2) and Adjusted EBITDA margin(2) of $100.4 million and 34.2%, respectively;
•Cash flow from operations of $85.3 million;
•Cash and cash equivalents of $303.4 million, with no bank debt outstanding as of September 30, 2024; and
•In October 2024, the Board of Directors declared a quarterly cash dividend of $0.13 per Class A share.
Financial Summary
Three Months Ended
September 30, June 30, September 30,
2024 2024 2023
(in thousands)
Revenues $ 293,181  $ 290,389  $ 287,870 
Operating income(3)
$ 76,792  $ 79,819  $ 87,603 
Operating income margin 26.2  % 27.5  % 30.4  %
Net income $ 62,437  $ 63,059  $ 68,019 
Net income margin 21.3  % 21.7  % 23.6  %
Adjusted net income(1)
$ 63,479  $ 65,192  $ 63,804 
Adjusted net income margin(1)
21.7  % 22.4  % 22.2  %
Adjusted EBITDA(2)
$ 100,370  $ 103,637  $ 103,114 
Adjusted EBITDA margin(2)
34.2  % 35.7  % 35.8  %
(1)    Adjusted net income, Adjusted net income margin and diluted earnings per share, as adjusted are non-GAAP financial measures. These figures assume Cactus, Inc. held all units in its operating subsidiary at the beginning of the period. Additional information regarding non-GAAP measures and the reconciliation of GAAP to non-GAAP financial measures are in the Supplemental Information tables.
(2)    Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP financial measures. See definition of these measures and the reconciliation of GAAP to non-GAAP financial measures in the Supplemental Information tables.
(3)    Operating income reflects certain expenses related to the FlexSteel acquisition, including expenses related to the remeasurement of the earn-out liability associated with the FlexSteel acquisition and intangible amortization expenses related to purchase price accounting. See the reconciliation of GAAP to non-GAAP financial measures in the Supplemental Information tables for further details.


1


Scott Bender, CEO and Chairman of the Board of Cactus, commented, “Revenues in both segments surpassed our expectations for the third quarter. I am particularly proud of our Spoolable Technologies associates who have driven continued segment revenue out performance against softer year-to-date U.S. land activity trends. In addition, we generated substantial free cash flow in the third quarter with improved working capital performance, and increased our cash balance by $57 million despite making the final earn-out payment of $37 million to the sellers of FlexSteel.”
“In the fourth quarter of 2024, we anticipate that the U.S. land rig count will remain stable from today's levels, with some potential for reductions in customer activity late in the quarter due to the holidays, weather, consolidations and the possibility of some customer budget exhaustion. In Pressure Control, we achieved high levels of sales per rig followed in the second and third quarters and anticipate modest reversion in the fourth quarter. In Spoolable Technologies, we expect a typical seasonal contraction in the fourth quarter, partially offset by sustained international activity.”

Mr. Bender concluded, “Although the outlook for U.S. land drilling activity remains subdued, our business continues to outperform, generating industry-leading returns and substantial free cash flow. In the third quarter, we pursued a growth opportunity and incurred non-routine Corporate expenses as a result of this effort. We are no longer pursuing this specific opportunity. Our leadership team remains substantial equity owners, we will continue to be highly disciplined stewards of our capital and resources, and we will continue to pursue opportunities that enhance the Cactus value proposition and build long-term value for our shareholders.”

Segment Performance
We report two business segments, Pressure Control and Spoolable Technologies, and starting with the fourth quarter of 2023, corporate and other expenses not directly attributable to either segment are presented separately as Corporate and Other Expenses. These expenses were previously included within the Pressure Control segment. Prior periods presented have been recast to conform to the new presentation.

Pressure Control

Third quarter 2024 Pressure Control revenue decreased $2.1 million, or 1.1%, sequentially, primarily due to decreased sales of wellhead and production related equipment resulting from lower drilling and completions activity. Operating income decreased $3.1 million, or 5.6%, sequentially, on the lower volume, with margins decreasing 130 basis points due to miscellaneous charges incurred in the quarter, including reserves taken in connection with customer bankruptcies and other litigation claims. Adjusted Segment EBITDA decreased $3.3 million, or 5.1%, sequentially, with Adjusted Segment EBITDA margins decreasing 140 basis points.

Spoolable Technologies

Third quarter 2024 Spoolable Technologies revenues increased $4.4 million, or 4.3%, sequentially, due to increased customer activity levels. Operating income increased $2.9 million, or 9.5%, sequentially, primarily due to a lower expense booked as a result of the remeasurement of the earn-out liability associated with the FlexSteel acquisition, which was $0.1 million in the third quarter compared to $2.9 million in the second quarter. Adjusted Segment EBITDA increased $0.1 million, or 0.2%, sequentially, with Adjusted Segment EBITDA margins decreasing 160 basis points due to higher input costs.

2


Corporate and Other Expenses

Third quarter 2024 Corporate and Other expenses increased $2.8 million, or 46.9%, sequentially, primarily due to professional fees associated with growth initiatives.

Liquidity, Capital Expenditures and Other
As of September 30, 2024, the Company had $303.4 million of cash and cash equivalents, no bank debt outstanding, and $220.7 million of availability on our revolving credit facility. Operating cash flow was $85.3 million for the third quarter of 2024. During the third quarter, the Company made dividend payments and associated distributions of $10.4 million, and also settled the FlexSteel earnout of $37.1 million.

Net capital expenditures were $10.0 million during the third quarter of 2024. For the full year 2024, the Company has reduced its expected net capital expenditures to a range of $32 million to $37 million due to timing of planned investments.

As of September 30, 2024, Cactus had 66,655,755 shares of Class A common stock outstanding (representing 83.8% of the total voting power) and 12,927,927 shares of Class B common stock outstanding (representing 16.2% of the total voting power).
Quarterly Dividend
The Board of Directors approved a quarterly cash dividend of $0.13 per share of Class A common stock with payment to occur on December 19, 2024 to holders of record of Class A common stock at the close of business on December 2, 2024. 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 October 31, 2024 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.

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.

3


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,” “hope,” “opportunity,” 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.
Alan Boyd, 713-904-4669
Director of Corporate Development and Investor Relations
IR@CactusWHD.com
Source: Cactus, Inc.
4


Cactus, Inc.
Condensed Consolidated Statements of Income
(unaudited)
 
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024 2023 2024 2023
(in thousands, except per share data)
Revenues
Pressure Control $ 185,099  $ 182,484  $ 547,319  $ 576,273 
Spoolable Technologies 108,155  105,386  310,966  245,821 
Corporate and other(1)
(73) —  (592) — 
Total revenues 293,181  287,870  857,693  822,094 
Operating income (loss)
Pressure Control 52,537  54,822  159,881  180,881 
Spoolable Technologies 32,907  39,773  79,341  34,004 
Total segment operating income 85,444  94,595  239,222  214,885 
Corporate and other expenses (8,652) (6,992) (20,061) (29,072)
  Total operating income 76,792  87,603  219,161  185,813 
Interest income (expense), net 2,062  (1,372) 4,156  (6,298)
Other income, net —  266  —  3,804 
Income before income taxes 78,854  86,497  223,317  183,319 
Income tax expense 16,417  18,478  48,006  30,553 
Net income $ 62,437  $ 68,019  $ 175,311  $ 152,766 
Less: net income attributable to non-controlling interest 12,510  15,439  36,591  32,542 
Net income attributable to Cactus, Inc. $ 49,927  $ 52,580  $ 138,720  $ 120,224 
Earnings per Class A share - basic $ 0.75  $ 0.81  $ 2.10  $ 1.87 
Earnings per Class A share - diluted(2)
$ 0.74  $ 0.80  $ 2.09  $ 1.82 
Weighted average shares outstanding - basic 66,563  64,879  66,030  64,399 
Weighted average shares outstanding - diluted(2)
80,190  65,486  79,777  79,632 

(1)Represents the elimination of inter-segment revenue for sales from our Pressure Control segment to our Spoolable Technologies segment.
(2)Dilution for the three and nine months ended September 30, 2024 and for the nine months ended September 30, 2023 includes an additional $12.9 million, $37.8 million and $33.6 million, respectively, of pre-tax income attributable to non-controlling interest adjusted for a corporate effective tax rate of 26.0% and 13.0 million, 13.5 million and 14.8 million weighted average shares of Class B common stock outstanding, respectively, plus the effect of dilutive securities. Dilution for the three months ended September 30, 2023 excludes 14.6 million shares of Class B common stock as the effect would be antidilutive.
5


Cactus, Inc.
Condensed Consolidated Balance Sheets
(unaudited)
September 30, December 31,
2024 2023
(in thousands)
Assets
Current assets
Cash and cash equivalents $ 303,376  $ 133,792 
Accounts receivable, net 196,874  205,381 
Inventories 219,799  205,625 
Prepaid expenses and other current assets 10,152  11,380 
Total current assets 730,201  556,178 
Property and equipment, net 344,183  345,502 
Operating lease right-of-use assets, net 23,589  23,496 
Intangible assets, net 167,988  179,978 
Goodwill 203,028  203,028 
Deferred tax asset, net 203,778  204,852 
Other noncurrent assets 8,956  9,527 
Total assets $ 1,681,723  $ 1,522,561 
Liabilities and Equity
Current liabilities
Accounts payable $ 74,897  $ 71,841 
Accrued expenses and other current liabilities 79,347  50,654 
Earn-out liability —  20,810 
Current portion of liability related to tax receivable agreement 25,485  20,855 
Finance lease obligations, current portion 7,121  7,280 
Operating lease liabilities, current portion 4,451  4,220 
Total current liabilities 191,301  175,660 
Deferred tax liability, net 3,160  3,589 
Liability related to tax receivable agreement, net of current portion 241,542  250,069 
Finance lease obligations, net of current portion 10,620  9,352 
Operating lease liabilities, net of current portion 19,414  19,121 
Other noncurrent liabilities 3,406  — 
Total liabilities 469,443  457,791 
Equity 1,212,280  1,064,770 
Total liabilities and equity $ 1,681,723  $ 1,522,561 
6


Cactus, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
 
Nine Months Ended September 30,
2024 2023
(in thousands)
Cash flows from operating activities
Net income $ 175,311  $ 152,766 
Reconciliation of net income to net cash provided by operating activities
Depreciation and amortization 45,124  50,180 
Deferred financing cost amortization 840  4,187 
Stock-based compensation 15,943  13,526 
Provision for expected credit losses 378  2,153 
Inventory obsolescence 2,738  3,569 
Gain on disposal of assets (824) (1,999)
Deferred income taxes 12,606  10,723 
Change in fair value of earn-out liability 16,318  12,932 
Gain from revaluation of liability related to tax receivable agreement —  (3,683)
Changes in operating assets and liabilities:
Accounts receivable 8,324  (12,637)
Inventories (16,781) 45,377 
Prepaid expenses and other assets 1,065  (7,321)
Accounts payable 2,871  2,733 
Accrued expenses and other liabilities 32,050  2,986 
Payments pursuant to tax receivable agreement (15,277) (26,890)
Payment of earn-out liability (31,168) — 
Net cash provided by operating activities 249,518  248,602 
Cash flows from investing activities
Acquisition of a business, net of cash and cash equivalents acquired —  (616,189)
Capital expenditures and other (27,042) (33,400)
Proceeds from sales of assets 2,991  4,347 
Net cash used in investing activities (24,051) (645,242)
Cash flows from financing activities
Proceeds from the issuance of long-term debt —  155,000 
Repayments of borrowings of long-term debt —  (155,000)
Net proceeds from the issuance of Class A common stock —  169,878 
Payments of deferred financing costs —  (6,857)
Payment of contingent consideration (5,960) — 
Payments on finance leases (5,881) (5,579)
Dividends paid to Class A common stock shareholders (24,821) (22,266)
Distributions to members (10,444) (13,926)
Repurchases of shares (9,321) (4,599)
Net cash (used in) provided by financing activities (56,427) 116,651 
Effect of exchange rate changes on cash and cash equivalents 544  (800)
Net increase (decrease) in cash and cash equivalents 169,584  (280,789)
Cash and cash equivalents
Beginning of period 133,792  344,527 
End of period $ 303,376  $ 63,738 
7



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.
Three Months Ended
September 30, June 30, September 30,
2024 2024 2023
(in thousands, except per share data)
Net income $ 62,437  $ 63,059  $ 68,019 
Adjustments:
Revaluation gain on TRA liability(1)
—  —  (266)
Transaction related expenses(2)
2,793  —  1,084 
Intangible amortization expense(3)
3,997  3,997  3,997 
Remeasurement (gain) loss on earn-out liability(4)
138  2,876  (5,091)
Income tax expense differential(5)
(5,886) (4,740) (3,939)
Adjusted net income $ 63,479  $ 65,192  $ 63,804 
Diluted earnings per share, as adjusted $ 0.79  $ 0.81  $ 0.80 
Weighted average shares outstanding, as adjusted(6)
80,190  79,994  80,037 
Revenue $ 293,181  $ 290,389  $ 287,870 
Net income margin 21.3  % 21.7  % 23.6  %
Adjusted net income margin 21.7  % 22.4  % 22.2  %

(1)Represents non-cash adjustments for the revaluation of the liability related to the TRA.
(2)Reflects fees and expenses recorded in connection with the FlexSteel acquisition and related financing during 2023 and growth initiatives during 2024.
(3)Reflects amortization expense associated with the step-up in intangible value due to purchase price accounting.
(4)Represents non-cash adjustments for the remeasurement of the earn-out liability associated with the FlexSteel acquisition.
(5)Represents the increase or decrease in tax expense as though Cactus, Inc. owned 100% of its operating subsidiary at the beginning of the period, calculated as the difference in tax expense recorded during each period and what would have been recorded, adjusted for pre-tax items listed above, based on a corporate effective tax rate of 26.0% on income before income taxes.
(6)Reflects 66.6, 66.1, and 64.9 million weighted average shares of basic Class A common stock outstanding and 13.0, 13.4 and 14.6 million additional shares for the three months ended September 30, 2024, June 30, 2024, and September 30, 2023, respectively, as if the weighted average shares of Class B common stock were exchanged and cancelled for Class A common stock at the beginning of the period, plus the effect of dilutive securities.
8


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.

Three Months Ended Nine Months Ended
September 30, June 30, September 30, September 30,
2024 2024 2023 2024 2023
(in thousands)
Net income $ 62,437  $ 63,059  $ 68,019  $ 175,311  $ 152,766 
Interest (income) expense, net (2,062) (1,405) 1,372  (4,156) 6,298 
Income tax expense 16,417  18,165  18,478  48,006  30,553 
Depreciation and amortization 15,077  15,001  15,156  45,124  50,180 
EBITDA 91,869  94,820  103,025  264,285  239,797 
Revaluation gain on TRA liability(1)
—  —  (266) —  (3,683)
Transaction related expenses(2)
2,793  —  1,084  2,793  11,856 
Remeasurement (gain) loss on earn-out liability(3)
138  2,876  (5,091) 16,318  12,932 
Inventory step-up expense(4)
—  —  —  —  23,516 
Stock-based compensation 5,570  5,941  4,362  15,943  13,526 
Adjusted EBITDA $ 100,370  $ 103,637  $ 103,114  $ 299,339  $ 297,944 
Revenue $ 293,181  $ 290,389  $ 287,870  $ 857,693  $ 822,094 
Net income margin 21.3  % 21.7  % 23.6  % 20.4  % 18.6  %
Adjusted EBITDA margin 34.2  % 35.7  % 35.8  % 34.9  % 36.2  %
(1)    Represents non-cash adjustments for the revaluation of the liability related to the TRA.
(2)Reflects fees and expenses recorded in connection with the FlexSteel acquisition and related financing.
(3)Represents non-cash adjustments for the remeasurement of the earn-out liability associated with the FlexSteel acquisition.
(4)Represents amortization of the FlexSteel inventory step-up adjustment due to purchase price accounting.


9


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.

10


Three Months Ended Nine Months Ended
September 30, June 30, September 30, September 30,
2024 2024 2023 2024 2023
(in thousands)
Pressure Control
Revenue $ 185,099  $ 187,192  $ 182,484  $ 547,319  $ 576,273 
Operating income 52,537  55,669  54,822  159,881  180,881 
Depreciation and amortization expense 6,592  6,662  6,868  20,065  23,987 
Stock-based compensation 2,837  2,978  1,491  7,963  5,185 
Adjusted Segment EBITDA $ 61,966  $ 65,309  $ 63,181  $ 187,909  $ 210,053 
Operating income margin 28.4  % 29.7  % 30.0  % 29.2  % 31.4  %
Adjusted Segment EBITDA margin 33.5  % 34.9  % 34.6  % 34.3  % 36.5  %
Spoolable Technologies
Revenue $ 108,155  $ 103,716  $ 105,386  $ 310,966  $ 245,821 
Operating income 32,907  30,041  39,773  79,341  34,004 
Other non-operating income —  —  —  —  121 
Depreciation and amortization expense 8,485  8,339  8,288  25,059  26,193 
Stock-based compensation 1,015  1,200  716  3,089  2,703 
Remeasurement (gain) loss on earn-out liability(1)
138  2,876  (5,091) 16,318  12,932 
Inventory step-up expense(2)
—  —  —  —  23,516 
Adjusted Segment EBITDA $ 42,545  $ 42,456  $ 43,686  $ 123,807  $ 99,469 
Operating income margin 30.4  % 29.0  % 37.7  % 25.5  % 13.8  %
Adjusted Segment EBITDA margin 39.3  % 40.9  % 41.5  % 39.8  % 40.5  %
Corporate and Other
Revenue(3)
$ (73) $ (519) $ —  $ (592) $ — 
Corporate and other expenses (8,652) (5,891) (6,992) (20,061) (29,072)
Stock-based compensation 1,718  1,763  2,155  4,891  5,638 
Transaction related expenses(4)
2,793  —  1,084  2,793  11,856 
Adjusted Corporate EBITDA $ (4,141) $ (4,128) $ (3,753) $ (12,377) $ (11,578)
Total revenue $ 293,181  $ 290,389  $ 287,870  $ 857,693  $ 822,094 
Total operating income $ 76,792  $ 79,819  $ 87,603  $ 219,161  $ 185,813 
Total operating income margin 26.2  % 27.5  % 30.4  % 25.6  % 22.6  %
Total Adjusted EBITDA $ 100,370  $ 103,637  $ 103,114  $ 299,339  $ 297,944 
Total Adjusted EBITDA margin 34.2  % 35.7  % 35.8  % 34.9  % 36.2  %
(1)Represents non-cash adjustments for the remeasurement of the earn-out liability associated with the FlexSteel acquisition.
(2)Represents amortization of the FlexSteel inventory step-up adjustment due to purchase price accounting.
(3)Represents the elimination of inter-segment revenue for sales from our Pressure Control segment to our Spoolable Technologies segment.
(4)Reflects fees and expenses recorded in connection with the FlexSteel acquisition and related financing and growth initiatives during 2024.





11