Cactus(US:WHD)2025-02-27 21:55Financial Data and Key Metrics Changes - Total Q4 revenue was $272 million, down 7.2% sequentially, with adjusted EBITDA of $93 million, also down 7.6% sequentially, resulting in adjusted EBITDA margins of 34.1% [9][12][16] - GAAP net income for the quarter was $57 million, compared to $62 million in the previous quarter, with adjusted net income and earnings per share at $57 million and $0.71 per share, respectively, down from $63 million and $0.79 per share [17][18] Business Line Data and Key Metrics Changes - Pressure control segment revenues were $177 million, down 4.5% sequentially, with operating income decreasing by $1.7 million or 3.3% [13] - Spoolable technology segment revenues were $96 million, down 11.2% sequentially, with operating income decreasing by $7.4 million or 22.4% [14] Market Data and Key Metrics Changes - The company ended the year with a cash balance of $343 million, an increase of approximately $39 million from the previous quarter [20] - The average public ownership of the company was 85% and ended the quarter at 86% [17] Company Strategy and Development Direction - The company is focused on ramping up production at its new facility in Vietnam and introducing new products to enhance value in both segments [29][37] - The strategy includes managing manufacturing costs and expanding internationally, with a long-term goal of achieving 40% of revenue from international markets [34][37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in outperforming underlying activity levels in the US market despite trade policy uncertainties [43][44] - The company anticipates a rebound in customer activity in the second and third quarters of 2025, with expectations for increased international orders [31][37] Other Important Information - The company paid a quarterly dividend of $0.13 per share, resulting in a cash outflow of approximately $10 million [19] - Capital expenditures for Q4 were approximately $11 million, with full-year CapEx at around $35 million [21][23] Q&A Session Summary Question: Outlook for US activity in the next few quarters - Management is confident in their ability to outgrow underlying activity levels, anticipating a US rig count in the 550 to 560 range [43][44] Question: Margin headwind from Bossier City facility versus China - The cost comparison indicates that Bossier's costs are at least 35% higher than the Far East supply chain, with increasing tariffs impacting both [46][47] Question: Game plan for mitigating tariff impacts - The company has flexibility between its facilities in Vietnam and Bossier City to mitigate tariff impacts, with a focus on vertical manufacturing capabilities [58][61] Question: Commercialization of H2S solutions - The H2S product is commercialized, with shipments expected to begin in March or April, targeting the Middle East market [70][71] Question: International growth opportunities in pressure control - Management acknowledged progress in international growth but refrained from providing specific details due to ongoing developments [96][97]