Cactus(US:WHD)2023-03-01 22:23Revenue Growth - Product revenue for 2022 was $452.6 million, a 61.1% increase from $280.9 million in 2021, driven by higher sales of wellhead and production-related equipment [167]. - Rental revenue increased to $100.5 million in 2022, up 63.0% from $61.6 million in 2021, primarily due to higher drilling and completion activity [169]. - Field service and other revenue rose to $135.3 million, a 40.9% increase from $96.1 million in 2021, attributed to increased customer activity and higher billable hours [169]. - Total revenues for 2022 reached $688.4 million, reflecting a 57.0% increase from $438.6 million in 2021 [167]. - Total revenues for 2022 reached $688.369 million, a 56.9% increase from $438.589 million in 2021 [225]. - Product revenue increased to $452.615 million in 2022, up 60.9% from $280.907 million in 2021 [225]. - Net income attributable to Cactus Inc. for 2022 was $110.174 million, representing a 121.4% increase from $49.593 million in 2021 [225]. - Earnings per Class A share - diluted rose to $1.80 in 2022, compared to $0.83 in 2021 [225]. Expenses and Costs - Cost of product revenue was $277.9 million in 2022, a 47.0% increase from $189.1 million in 2021, mainly due to increased sales and higher material costs [170]. - Selling, general and administrative expenses increased to $67.7 million, a 47.1% rise from $46.0 million in 2021, largely due to higher personnel costs and transaction costs associated with the Merger [173]. - In 2022, the United States experienced the highest inflation in decades, impacting costs related to freight, materials, vehicle-related expenses, and personnel [198]. - Stock-based compensation increased to $10,631,000 in 2022 from $8,620,000 in 2021, reflecting a rise of 23.3% [233]. - Cactus recognized approximately $8.4 million in transaction costs related to the merger for the year ended December 31, 2022 [323]. Cash Flow and Capital Expenditures - Net cash provided by operating activities increased to $117.9 million in 2022 from $63.8 million in 2021, primarily due to higher income and increased working capital [187]. - Net cash used in investing activities rose to $25.5 million in 2022 from $11.6 million in 2021, mainly due to investments in the rental fleet and expansion of the Bossier City location [188]. - Net cash used in financing activities increased to $47.4 million in 2022 from $39.4 million in 2021, driven by higher dividend payments and share repurchases [189]. - Estimated net capital expenditures for 2023 are projected to be between $35 million and $45 million, focusing on rental fleet investments and international expansion [181]. - Cash and cash equivalents at year-end 2022 were $344.527 million, compared to $301.669 million at the end of 2021, marking a 14.2% increase [223]. Tax and Liabilities - Income tax expense for 2022 was $31.4 million, with an effective tax rate of 17.8%, compared to $7.7 million and 10.2% in 2021 [176]. - The total liability from the Tax Receivable Agreement (TRA) was $292.6 million as of December 31, 2022, with $27.5 million reflected in current liabilities [299]. - The TRA provides for the payment of 85% of net cash savings in income tax realized by the company, retaining 15% for itself [183]. - The blended tax rate used for calculating the TRA liability consists of the U.S. federal income tax rate and an assumed combined state and local income tax rate [218]. Market Conditions - Oil prices peaked at over $123 per barrel in March 2022, but dropped below $80 per barrel by late November 2022, averaging approximately $78 per barrel through February 2023 [160]. - Natural gas prices increased from an average of $3.76 per MMBtu in December 2021 to a high of $8.14 per MMBtu in May 2022, before declining to $2.07 per MMBtu by February 24, 2023 [161]. - The U.S. onshore rig count increased to 762 rigs at the end of 2022, up from 570 at the end of 2021, representing a 33.6% increase [163]. Acquisitions and Mergers - The acquisition of FlexSteel was completed on February 28, 2023, enhancing the company's capabilities in engineered spoolable pipe technologies [159]. - Cactus Inc. entered into a definitive agreement to acquire HighRidge Resources, Inc. and its subsidiary FlexSteel, enhancing its capabilities in onshore spoolable pipe technologies [320]. - The merger with HighRidge closed on February 28, 2023, with a purchase price of approximately $621.2 million, subject to adjustments [322]. Financial Position - Total assets increased to $1,118.896 million in 2022, up from $982.078 million in 2021, reflecting a growth of 13.9% [223]. - Total stockholders' equity attributable to Cactus Inc. grew to $571.917 million in 2022, a 22.1% increase from $468.644 million in 2021 [223]. - The company had no outstanding debt as of December 31, 2022, and maintained compliance with all covenants under the ABL Credit Facility [271]. Stock and Dividends - The company declared cash dividends of $0.44 per share in 2022, up from $0.36 per share in 2021 [229]. - Basic earnings per share for Class A common stock increased to $1.83 in 2022 from $0.90 in 2021, while diluted earnings per share rose to $1.80 from $0.83 [318]. - Cash dividends declared per share of Class A common stock were $0.44, $0.38, and $0.36 for the years ended December 31, 2022, 2021, and 2020, totaling $26.9 million, $21.2 million, and $17.4 million respectively [310].