Cover
Cover - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2023 | Feb. 27, 2024 | Jun. 30, 2023 | |
Entity Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Current Fiscal Year End Date | --12-31 | ||
Document Period End Date | Dec. 31, 2023 | ||
Document Transition Report | false | ||
Entity File Number | 001-38390 | ||
Entity Registrant Name | Cactus, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 35-2586106 | ||
Entity Address, Address Line One | 920 Memorial City Way | ||
Entity Address, Address Line Two | Suite 300 | ||
Entity Address, City or Town | Houston | ||
Entity Address, State or Province | TX | ||
Entity Address, Postal Zip Code | 77024 | ||
City Area Code | 713 | ||
Local Phone Number | 626-8800 | ||
Title of 12(b) Security | Class A Common Stock, par value $0.01 | ||
Trading Symbol | WHD | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 2.7 | ||
Documents Incorporated by Reference | Portions of Registrant’s Definitive Proxy Statement for the 2024 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K. Such Definitive Proxy Statement will be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year to which this Report relates. | ||
Entity Central Index Key | 0001699136 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Class A Common Stock | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 65,322,730 | ||
Class B Common Stock | |||
Entity Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 14,033,979 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2023 | |
Audit Information [Abstract] | |
Auditor Name | PricewaterhouseCoopers LLP |
Auditor Firm ID | 238 |
Auditor Location | Houston, Texas |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 133,792 | $ 344,527 |
Accounts receivable, net of allowance of $3,642 and $1,060, respectively | 205,381 | 138,268 |
Inventories | 205,625 | 161,283 |
Prepaid expenses and other current assets | 11,380 | 10,564 |
Total current assets | 556,178 | 654,642 |
Noncurrent assets | ||
Property and equipment, net | 345,502 | 129,998 |
Operating lease right-of-use assets, net | 23,496 | 23,183 |
Intangible assets, net | 179,978 | 0 |
Goodwill | 203,028 | 7,824 |
Deferred tax asset, net | 204,852 | 301,644 |
Other noncurrent assets | 9,527 | 1,605 |
Total assets | 1,522,561 | 1,118,896 |
Current liabilities | ||
Accounts payable | 71,841 | 47,776 |
Accrued expenses and other current liabilities | 50,654 | 30,619 |
Earn-out liability | 20,810 | 0 |
Current portion of liability related to tax receivable agreement | 20,855 | 27,544 |
Finance lease obligations, current portion | 7,280 | 5,933 |
Operating lease liabilities, current portion | 4,220 | 4,777 |
Total current liabilities | 175,660 | 116,649 |
Noncurrent liabilities | ||
Deferred tax liability, net | 3,589 | 1,966 |
Liability related to tax receivable agreement, net of current portion | 250,069 | 265,025 |
Finance lease obligations, net of current portion | 9,352 | 6,436 |
Operating lease liabilities, net of current portion | 19,121 | 18,375 |
Total liabilities | 457,791 | 408,451 |
Commitments and contingencies | ||
Stockholders’ equity | ||
Preferred stock, $0.01 par value, 10,000 shares authorized, none issued and outstanding | 0 | 0 |
Additional paid-in capital | 465,012 | 310,528 |
Retained earnings | 400,682 | 261,764 |
Accumulated other comprehensive income (loss) | (826) | (984) |
Total stockholders’ equity attributable to Cactus Inc. | 865,522 | 571,917 |
Non-controlling interest | 199,248 | 138,528 |
Total stockholders’ equity | 1,064,770 | 710,445 |
Total liabilities and equity | 1,522,561 | 1,118,896 |
Class A Common Stock | ||
Stockholders’ equity | ||
Common stock, $0.01 par value | 654 | 609 |
Class B Common Stock | ||
Stockholders’ equity | ||
Common stock, $0.01 par value | $ 0 | $ 0 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Allowance for doubtful accounts receivable | $ 3,642 | $ 1,060 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Class A Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 65,409,000 | 60,903,000 |
Common stock, shares outstanding (in shares) | 65,409,000 | 60,903,000 |
Class B Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 215,000,000 | 215,000,000 |
Common stock, shares issued (in shares) | 14,034,000 | 14,978,000 |
Common stock, shares outstanding (in shares) | 14,034,000 | 14,978,000 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues | |||
Total revenues | $ 1,096,960 | $ 688,369 | $ 438,589 |
Costs and expenses | |||
Selling, general and administrative expenses | 127,076 | 67,700 | 46,021 |
Change in fair value of earn-out liability | 14,850 | 0 | 0 |
Total costs and expenses | 832,594 | 513,621 | 363,162 |
Operating income | 264,366 | 174,748 | 75,427 |
Interest income (expense), net | (6,480) | 3,714 | (774) |
Other income (expense), net | 4,490 | (1,910) | 492 |
Income before income taxes | 262,376 | 176,552 | 75,145 |
Income tax expense | 47,536 | 31,430 | 7,675 |
Net income | 214,840 | 145,122 | 67,470 |
Less: net income attributable to non-controlling interest | 45,669 | 34,948 | 17,877 |
Net income attributable to Cactus Inc. | $ 169,171 | $ 110,174 | $ 49,593 |
Class A Common Stock | |||
Earnings per share and weighted average shares outstanding | |||
Earnings per Class A share - basic (in dollars per share) | $ 2.62 | $ 1.83 | $ 0.90 |
Earnings per Class A share - diluted (in dollars per share) | $ 2.57 | $ 1.80 | $ 0.83 |
Weighted average Class A shares outstanding - basic (in shares) | 64,641 | 60,323 | 55,398 |
Weighted average Class A shares outstanding - diluted (in shares) | 79,460 | 76,337 | 76,107 |
Product revenue | |||
Revenues | |||
Total revenues | $ 810,379 | $ 452,615 | $ 280,907 |
Costs and expenses | |||
Cost of revenue | 490,149 | 277,871 | 189,083 |
Rental revenue | |||
Revenues | |||
Total revenues | 113,631 | 100,453 | 61,629 |
Costs and expenses | |||
Cost of revenue | 61,983 | 62,037 | 54,377 |
Field service and other revenue | |||
Revenues | |||
Total revenues | 172,950 | 135,301 | 96,053 |
Costs and expenses | |||
Cost of revenue | $ 138,536 | $ 106,013 | $ 73,681 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 214,840 | $ 145,122 | $ 67,470 |
Foreign currency translation adjustments | 239 | (1,308) | (567) |
Comprehensive income | 215,079 | 143,814 | 66,903 |
Less: comprehensive income attributable to non-controlling interest | 45,750 | 34,632 | 17,632 |
Comprehensive income attributable to Cactus Inc. | $ 169,329 | $ 109,182 | $ 49,271 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Non-controlling Interest | Class A Common Stock Common Stock | Class B Common Stock Common Stock |
Balance at the beginning of the period (in shares) at Dec. 31, 2020 | 47,713 | 27,655 | |||||
Balance at the beginning of the period at Dec. 31, 2020 | $ 550,770 | $ 202,077 | $ 150,086 | $ 330 | $ 197,800 | $ 477 | $ 0 |
Statement of Stockholders'/Members' Equity | |||||||
Member distributions | (9,742) | (9,742) | |||||
Effect of CW Unit redemptions (in shares) | 10,981 | (10,981) | |||||
Effect of CW Unit redemptions | 0 | 79,276 | (79,386) | $ 110 | |||
Tax impact of equity transactions | 2,998 | 2,998 | |||||
Equity award vestings (in shares) | 341 | ||||||
Equity award vestings | (3,283) | (1,141) | (2,145) | $ 3 | |||
Other comprehensive income (loss) | (567) | (322) | (245) | ||||
Stock-based compensation | 8,620 | 6,390 | 2,230 | ||||
Cash dividends declared | (21,233) | (21,233) | |||||
Net income | 67,470 | 49,593 | 17,877 | ||||
Balance at the end of the period (shares) at Dec. 31, 2021 | 59,035 | 16,674 | |||||
Balance at the end of the period at Dec. 31, 2021 | 595,033 | 289,600 | 178,446 | 8 | 126,389 | $ 590 | $ 0 |
Statement of Stockholders'/Members' Equity | |||||||
Member distributions | (9,692) | (9,692) | |||||
Effect of CW Unit redemptions (in shares) | 1,696 | (1,696) | |||||
Effect of CW Unit redemptions | 0 | 13,690 | (13,707) | $ 17 | |||
Tax impact of equity transactions | 2,076 | 2,076 | |||||
Equity award vestings (in shares) | 172 | ||||||
Equity award vestings | (4,561) | (3,306) | (1,257) | $ 2 | |||
Other comprehensive income (loss) | (1,308) | (992) | (316) | ||||
Stock-based compensation | 10,631 | 8,468 | 2,163 | ||||
Cash dividends declared | (26,856) | (26,856) | |||||
Net income | 145,122 | 110,174 | 34,948 | ||||
Balance at the end of the period (shares) at Dec. 31, 2022 | 60,903 | 14,978 | |||||
Balance at the end of the period at Dec. 31, 2022 | 710,445 | 310,528 | 261,764 | (984) | 138,528 | $ 609 | $ 0 |
Statement of Stockholders'/Members' Equity | |||||||
Issuances of common stock (in shares) | 3,352 | ||||||
Issuances of common stock | 169,878 | 143,722 | 26,122 | $ 34 | |||
Member distributions | (16,644) | (16,644) | |||||
Effect of CW Unit redemptions (in shares) | 944 | (944) | |||||
Effect of CW Unit redemptions | 0 | 12,787 | (12,796) | $ 9 | |||
Tax impact of equity transactions | 3,409 | (13,099) | 16,508 | ||||
Equity award vestings (in shares) | 218 | ||||||
Equity award vestings | (4,921) | (3,422) | (1,501) | $ 2 | |||
Other comprehensive income (loss) | 239 | 158 | 81 | ||||
Share repurchases (in shares) | (8) | ||||||
Share repurchases | (327) | (286) | (41) | ||||
Stock-based compensation | 18,104 | 14,782 | 3,322 | ||||
Cash dividends declared | (30,253) | (30,253) | |||||
Net income | 214,840 | 169,171 | 45,669 | ||||
Balance at the end of the period (shares) at Dec. 31, 2023 | 65,409 | 14,034 | |||||
Balance at the end of the period at Dec. 31, 2023 | $ 1,064,770 | $ 465,012 | $ 400,682 | $ (826) | $ 199,248 | $ 654 | $ 0 |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Statement of Stockholders' Equity [Abstract] | |||
Cash dividend declared (in dollars per share) | $ 0.46 | $ 0.44 | $ 0.38 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities | |||
Net income | $ 214,840 | $ 145,122 | $ 67,470 |
Reconciliation of net income to net cash provided by operating activities: | |||
Depreciation and amortization | 65,045 | 34,124 | 36,308 |
Deferred financing cost amortization | 4,514 | 165 | 168 |
Stock-based compensation | 18,105 | 10,631 | 8,620 |
Provision for expected credit losses | 2,622 | 406 | 310 |
Inventory obsolescence | 5,337 | 2,739 | 3,490 |
Gain on disposal of assets | (3,156) | (1,391) | (1,386) |
Deferred income taxes | 17,343 | 25,299 | 4,829 |
Change in fair value of earn-out liability | 14,850 | 0 | 0 |
(Gain) loss from revaluation of liability related to tax receivable agreement | (4,490) | 1,910 | (898) |
Changes in operating assets and liabilities: | |||
Accounts receivable | (11,858) | (49,349) | (45,492) |
Inventories | 41,922 | (44,891) | (36,083) |
Prepaid expenses and other assets | 753 | (3,108) | (2,789) |
Accounts payable | 8,710 | 5,803 | 22,281 |
Accrued expenses and other liabilities | (7,367) | 2,090 | 16,628 |
Payments pursuant to tax receivable agreement | (26,890) | (11,666) | (9,697) |
Net cash provided by operating activities | 340,280 | 117,884 | 63,759 |
Cash flows from investing activities | |||
Acquisition of a business, net of cash and cash equivalents acquired | (616,189) | 0 | 0 |
Capital expenditures and other | (43,977) | (28,291) | (13,939) |
Proceeds from sale of assets | 5,373 | 2,755 | 2,306 |
Net cash used in investing activities | (654,793) | (25,536) | (11,633) |
Cash flows from financing activities | |||
Proceeds from the issuance of long-term debt | 155,000 | 0 | 0 |
Repayments of borrowings of long-term debt | (155,000) | 0 | 0 |
Net proceeds from the issuance of Class A common stock | 169,878 | 0 | 0 |
Payments of deferred financing costs | (6,934) | (353) | 0 |
Payments on finance leases | (7,652) | (6,055) | (5,205) |
Dividends paid to Class A common stock shareholders | (30,124) | (26,719) | (21,158) |
Distributions to members | (16,644) | (9,692) | (9,742) |
Repurchases of shares | (5,249) | (4,563) | (3,283) |
Net cash provided by (used in) financing activities | 103,275 | (47,382) | (39,388) |
Effect of exchange rate changes on cash and cash equivalents | 503 | (2,108) | 272 |
Net increase (decrease) in cash and cash equivalents | (210,735) | 42,858 | 13,010 |
Cash and cash equivalents | |||
Beginning of period | 344,527 | 301,669 | 288,659 |
End of period | $ 133,792 | $ 344,527 | $ 301,669 |
Organization and Nature of Oper
Organization and Nature of Operations | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Operations | Organization and Nature of Operations Cactus, Inc. (“Cactus Inc.”) and its consolidated subsidiaries (the “Company”), including Cactus Companies, LLC (“Cactus Companies”) are primarily engaged in the design, manufacture, sale and rental of highly engineered pressure control and spoolable pipe technologies. Our products are sold and rented principally for onshore unconventional oil and gas wells and are utilized during the drilling, completion and production phases of our customers’ wells. We also provide field services for all of our products and rental items to assist with the installation, maintenance and handling of the equipment. Additionally, we offer repair and refurbishment services for pressure control equipment. We operate through service centers and pipe yards located in the United States, Canada and Australia. We also provide rental and service operations in the Middle East and other select international markets. We have manufacturing and production facilities in Bossier City, Louisiana, Baytown, Texas and Suzhou, China. Our corporate headquarters are located in Houston, Texas. Cactus Inc. was incorporated on February 17, 2017 as a Delaware corporation for the purpose of completing an initial public offering of equity and related transactions, which was completed on February 12, 2018 (our “IPO”). Cactus Inc. is a holding company whose only material asset is an equity interest consisting of units representing limited liability company interests in Cactus Companies (“CC Units”). Cactus Inc. is the sole managing member of Cactus Companies and is responsible for all operational, management and administrative decisions relating to Cactus Companies’ business. Pursuant to the Amended and Restated Limited Liability Company Operating Agreement of Cactus Companies (the “Cactus Companies LLC Agreement”), owners of CC Units are entitled to redeem their CC Units for shares of Cactus Inc.’s Class A common stock, par value $0.01 per share (“Class A common stock”) on a one-for-one basis, which results in a corresponding increase in Cactus Inc.’s membership interest in Cactus Companies and an increase in the number of shares of Class A common stock outstanding. We refer to the owners of CC Units, other than Cactus Inc. (along with their permitted transferees), as “CC Unit Holders.” CC Unit Holders own one share of our Class B common stock, par value $0.01 per share (“Class B common stock”) for each CC Unit such CC Unit Holder owns. Except as otherwise indicated or required by the context, all references to “Cactus,” “we,” “us” and “our” refer to Cactus Inc. and its consolidated subsidiaries (including Cactus Companies). On February 28, 2023, Cactus Inc. through one of its subsidiaries, completed the acquisition of the FlexSteel business (the “Merger”) through a merger with HighRidge Resources, Inc. and its subsidiaries (“HighRidge”). On February 27, 2023, in order to facilitate the Merger with HighRidge, an internal reorganization was completed in which Cactus Companies acquired all of the outstanding units representing ownership interests in Cactus Wellhead, LLC (“Cactus LLC”), the operating subsidiary of Cactus Inc. (the “CC Reorganization”). The purpose of the Merger was to effect the acquisition of the operations of FlexSteel Holdings, Inc. and its subsidiaries. FlexSteel Holdings, Inc. was a wholly-owned subsidiary of HighRidge prior to the Merger and was converted into a limited liability company, contributed from HighRidge to Cactus Companies as part of the CC Reorganization and is now named FlexSteel Holdings, LLC (“FlexSteel”). The results of operations of FlexSteel have been reflected in our accompanying condensed consolidated financial statements from the closing date of the acquisition. See further discussion of the acquisition in Note 3. |
Summary of Significant Accounti
Summary of Significant Accounting Policies and Other Items | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies and Other Items | Summary of Significant Accounting Policies and Other Items Basis of Presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). These consolidated financial statements include the accounts of Cactus Inc. and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation. As the sole managing member of Cactus Companies, Cactus Inc. operates and controls all of the business and affairs of Cactus Companies and conducts its business through Cactus Companies and its subsidiaries. As a result, Cactus Inc. consolidates the financial results of Cactus Companies and its subsidiaries and reports a non-controlling interest related to the portion of CC Units not owned by Cactus Inc., which reduces net income attributable to holders of Cactus Inc.’s Class A common stock. Use of Estimates In preparing our consolidated financial statements in conformity with GAAP, we make numerous estimates and assumptions that affect the accounting for and recognition and disclosure of assets, liabilities, equity, revenues and expenses. We must make these estimates and assumptions because certain information that we use is dependent on future events, cannot be calculated with a high degree of precision from available data or is not otherwise capable of being readily calculated based on accepted methodologies. In some cases, these estimates are particularly difficult to determine, and we must exercise significant judgment. Actual results could differ materially from the estimates and assumptions that we use in the preparation of our consolidated financial statements. Concentrations of Credit Risk Our assets that are potentially subject to concentrations of credit risk are cash and cash equivalents and accounts receivable. We manage the credit risk associated with these financial instruments by transacting only with what management believes are financially secure counterparties, requiring credit approvals and credit limits and monitoring counterparties’ financial condition. Our receivables are spread over a number of customers, a majority of which are oil and natural gas exploration and production (“E&P”) companies representing private operators, publicly-traded independents, majors and other companies with operations in the key U.S. oil and gas producing basins as well as Australia, Canada and the Middle East. Our maximum exposure to credit loss in the event of non‑performance by the customer is limited to the receivable balance. We perform ongoing credit evaluations and monitoring as to the financial condition of our customers with respect to trade receivables. Generally, no collateral is required as a condition of sale. We also control our exposure associated with trade receivables by discontinuing sales and service to non-paying customers. For the year ended December 31, 2023, one customer represented approximately 10% of total revenues, with both operating segments reporting revenues with this customer. For the year ended December 31, 2022, no customers represented 10% or more of total revenues. One customer represented approximately 12% of total revenues for the year ended December 31, 2021. Significant Vendors The principal raw materials used in the manufacture of our pressure control products and rental equipment include forgings, castings, tube and bar stock. In addition, we require accessory items (such as elastomers, ring gaskets, studs and nuts) and machined components and assemblies. The principal raw materials used for our spoolable products include tube, bar stock, steel strip and high density polyethylene. We purchase a majority of these items from vendors primarily located in the United States, China, India, Australia and the United Kingdom. For the year ended December 31, 2023, one vendor represented approximately 10% of our total third-party vendor purchases of raw materials, finished products, equipment, machining and other services. For the years ended December 31, 2022 and 2021, no vendor represented 10% or more of our total third-party vendor purchases of raw materials, finished products, equipment, machining and other services. Tax Receivable Agreement (TRA) We account for amounts payable under the TRA in accordance with Accounting Standards Codification (“ASC”) Topic 450, Contingencies. As such, subsequent changes to the measurement of the TRA liability are recognized in the statements of income as a component of other income (expense), net. During the years ended December 31, 2023, 2022 and 2021, we recognized a $4.5 million gain, a $1.9 million loss and a $0.9 million gain on the change in the TRA liability, respectively. See Note 11 for further details on the TRA liability. Revenue Recognition The majority of our revenues are derived from short-term contracts for fixed consideration or in the case of equipment rentals, for a fixed charge per day while the equipment is in use by the customer. Product sales generally do not include right of return or other significant post-delivery obligations. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Revenues are recognized when we satisfy a performance obligation by transferring control of the promised goods or providing services to our customers at a point in time, in an amount specified in the contract with our customer and that reflects the consideration to which we expect to be entitled in exchange for those goods or services. The majority of our contracts with customers contain a single performance obligation to provide agreed upon products or services. For contracts with multiple performance obligations, we allocate revenue to each performance obligation based on its relative standalone selling price. We do not assess whether promised goods or services are performance obligations if they are immaterial in the context of the contract with the customer. We do not incur any material costs of obtaining contracts. We do not adjust the amount of consideration per the contract for the effects of a significant financing component when we expect, at contract inception, that the period between the transfer of a promised good or service to a customer and when the customer pays for that good or service will be one year or less, which is in substantially all cases. Payment terms and conditions vary, although terms generally include a requirement of payment within 30 to 45 days. Revenues are recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. We treat shipping and handling associated with outbound freight as a fulfillment cost instead of as a separate performance obligation. We recognize the cost for the associated shipping and handling when incurred as an expense in cost of sales. Our revenues are derived from three sources: products, rentals, and field service and other: Product revenue. Product revenues are primarily derived from the sale of wellhead systems, production trees, spoolable pipe and connections. Revenue is recognized when the products have shipped and the customer obtains control of the products. Rental revenue. Rental revenues are primarily derived from the rental of equipment, tools and products to customers used for well control as well as rental of equipment used for pipe installation. Our rental agreements are directly with our customers and provide for a rate based primarily on the period of time the equipment is used or made available to the customer. In addition, customers are charged for repair costs for our frac equipment, typically through an agreed upon rate for each rental job. Revenue is recognized ratably over the rental period, which tends to be short-term in nature with most equipment on site for less than 90 days. Field service and other revenue. We provide field services to our customers based on contractually agreed rates. Other revenues are derived from providing repair and reconditioning services to customers who have installed wellheads and production trees on their wellsite. Revenues are recognized as the services are performed or rendered. Foreign Currency Translation The financial position and results of operations of our foreign subsidiaries are measured using the local currency as the functional currency. Revenues and expenses of the subsidiaries have been translated into U.S. dollars at average exchange rates prevailing during the period. Assets and liabilities have been translated at the rates of exchange on the balance sheet dates. The resulting translation gain and loss adjustments have been recorded directly as a separate component of other comprehensive income in the consolidated statements of comprehensive income and stockholders’ equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in our consolidated statements of income as incurred. Derivative Financial Instruments We utilize a hedging program to reduce the risks associated with changes in the value of monetary assets and liabilities denominated in currencies other than the functional currency of our subsidiaries. Under this program, we utilize foreign currency forward contracts to offset gains or losses recorded upon remeasurement of assets and liabilities stated in the non-functional currencies of our subsidiaries. These forward contracts are not designated as hedges for accounting purposes. As such, we record changes in fair value of the forward contracts in our consolidated statements of income along with the gain or loss resulting from remeasurement of the U.S. dollar denominated financial assets and liabilities held by our foreign subsidiaries. The forward contracts are typically only 30 days in duration and are settled and renewed each month. As of December 31, 2023 and 2022, the fair value of our forward contracts was immaterial. Stock-based Compensation We measure the cost of equity‑based awards based on the grant date fair value and allocate the compensation expense over the requisite service period, which is usually the vesting period. The grant date fair value is determined by the closing price of our Class A common stock on the grant date. Income Taxes Deferred taxes are recorded using the asset and liability method, whereby tax assets and liabilities are determined based on the differences between the financial statement and tax basis of assets and liabilities using enacted tax laws and rates expected to apply to taxable income in the year in which the differences are expected to reverse. We regularly evaluate the valuation allowances established for deferred tax assets for which future realization is uncertain. In assessing the realizability of deferred tax assets, we consider both positive and negative evidence, including scheduled reversals of deferred tax assets and liabilities, projected future taxable income, tax planning strategies and results of recent operations. If, based on the weight of available evidence, it is more likely than not that the deferred tax assets will not be realized, a valuation allowance is recorded. Cactus Inc. is a corporation and is subject to U.S. federal as well as state income tax related to its ownership percentage in Cactus Companies. Cactus Companies is a Delaware limited liability company treated as a partnership for U.S. federal income tax purposes and files a U.S. Return of Partnership Income, which includes both our U.S. and foreign operations. Consequently, the members of Cactus Companies are taxed individually on their share of earnings for U.S. federal and state income tax purposes. Cactus Companies is subject to the Texas Margins Tax and our operations in China, Australia, Canada and the Middle East are subject to local country income taxes. See Note 7 for additional information regarding income taxes. Cash and Cash Equivalents Cash in excess of current operating requirements is invested in short-term interest-bearing investments with maturities of three months or less at the date of purchase and is stated at cost, which approximates fair value. Throughout the year we maintained cash balances that were not covered by federal deposit insurance. We have not experienced any losses in such accounts. Accounts Receivable and Allowance for Credit Losses We extend credit to customers in the normal course of business. Our customers are predominantly oil and gas E&P companies in the United States. Our receivables are short-term in nature and typically due in 30 to 60 days. We do not accrue interest on delinquent receivables. Accounts receivable includes amounts billed and currently due from customers and unbilled amounts for products delivered and services performed for which billings have not yet been submitted to the customers. Total unbilled revenue included in accounts receivable as of December 31, 2023 and 2022 was $26.8 million and $34.9 million, respectively. We maintain an allowance for credit losses to provide for the amount of billed receivables we believe to be at risk of loss. In our determination of the allowance for credit losses, we pool receivables with similar risk characteristics based on customer size, credit ratings, payment history, bankruptcy status and other factors known to us and apply an expected credit loss percentage. The expected credit loss percentage is determined using historical loss data adjusted for current conditions and forecasts of future economic conditions. Accounts deemed uncollectible are applied against the allowance for credit losses. The following is a rollforward of our allowance for credit losses: Balance at Beginning of Period Expense Write off Translation Adjustments Balance at End of Period Year Ended December 31, 2023 $ 1,060 $ 2,622 $ (36) $ (4) $ 3,642 Year Ended December 31, 2022 741 406 (86) (1) 1,060 Year Ended December 31, 2021 598 310 (167) — 741 Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined using standard cost (which approximates average cost). Costs include an application of related material, direct labor, duties, tariffs, freight and overhead costs. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Reserves are made for excess and obsolete items based on a range of factors, including age, usage and technological or market changes that may impact demand for those products. The inventory obsolescence reserve was $25.6 million and $20.5 million as of December 31, 2023 and 2022, respectively. The following is a rollforward of our inventory obsolescence reserve: Balance at Beginning of Period Expense Write off Translation Adjustments Balance at End of Period Year Ended December 31, 2023 $ 20,488 $ 5,337 $ (193) $ 6 $ 25,638 Year Ended December 31, 2022 18,012 2,739 (202) (61) 20,488 Year Ended December 31, 2021 14,637 3,490 (62) (53) 18,012 Property and Equipment Property and equipment are stated at cost. We manufacture or construct most of our pressure control rental assets and during the production of these assets, they are reflected as construction in progress until complete. We depreciate the cost of property and equipment using the straight‑line method over the estimated useful lives and depreciate our rental assets to their salvage value. Leasehold improvements are amortized over the shorter of the remaining lease term or economic life of the related assets. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss are reflected in income for the period. The cost of maintenance and repairs is charged to income as incurred while significant renewals and improvements are capitalized. Estimated useful lives are as follows: Land N/A Buildings and improvements 5 - 30 years Machinery and equipment 3 - 20 years Reels and skids 12 - 20 years Vehicles 3 - 5 years Rental equipment 2 - 11 years Furniture and fixtures 5 years Computers and software 3 - 5 years Property and equipment as of December 31, 2023 and 2022 consists of the following: December 31, 2023 2022 Land $ 16,442 $ 5,302 Buildings and improvements 131,974 25,480 Machinery and equipment 128,962 57,883 Reels and skids 16,181 — Vehicles 36,552 29,045 Rental equipment 218,340 194,088 Furniture and fixtures 1,913 1,759 Computers and software 3,951 3,068 Gross property and equipment 554,315 316,625 Less: Accumulated depreciation (231,594) (200,573) Net property and equipment 322,721 116,052 Construction in progress 22,781 13,946 Total property and equipment, net $ 345,502 $ 129,998 Depreciation and amortization was $65.0 million, $34.1 million and $36.3 million for 2023, 2022 and 2021, respectively. Depreciation and amortization expense is included in the consolidated statements of income as follows: Year Ended December 31, 2023 2022 2021 Cost of product revenue $ 13,762 $ 3,022 $ 3,176 Cost of rental revenue 20,191 23,663 25,812 Cost of field service and other revenue 9,786 6,986 6,863 Selling, general and administrative expenses 21,306 453 457 Total depreciation and amortization $ 65,045 $ 34,124 $ 36,308 Impairment of Long‑Lived Assets We review the recoverability of long‑lived assets, including finite-lived acquired intangible assets and property and equipment, when events or changes in circumstances occur that indicate the carrying value of the asset or asset group may not be recoverable. The assessment of possible impairment is based on our ability to recover the carrying value of the asset or asset group from the expected future pre‑tax cash flows (undiscounted) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. We concluded there were no indicators evident or other circumstances present that these assets were not recoverable and accordingly, no impairment charges of long‑lived assets were recognized for 2023, 2022 and 2021. Goodwill Goodwill represents the excess of purchase price paid over the fair value of the net assets of acquired businesses. Goodwill is not amortized, but we evaluate at least annually whether it is impaired. Goodwill is considered impaired if the carrying amount of the reporting unit exceeds its estimated fair value. We conduct our annual assessment of the recoverability of goodwill as of December 31 of each year. We first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the goodwill impairment test. If the qualitative assessment indicates that it is more likely than not that the fair value of the reporting unit is less than its carrying amount or we elect not to perform a qualitative assessment, the quantitative assessment of goodwill test is performed. The goodwill impairment test is also performed whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If it is necessary to perform the quantitative assessment to determine if our goodwill is impaired, we will utilize a discounted cash flow analysis using management’s projections that are subject to various risks and uncertainties of revenues, expenses and cash flows as well as assumptions regarding discount rates, terminal value and control premiums. Estimates of future cash flows and fair value are highly subjective and inherently imprecise. These estimates can change materially from period to period based on many factors. Accordingly, if conditions change in the future, we may record impairment losses, which could be material to any particular reporting period. Based on our annual impairment analysis using qualitative assessments, we concluded that there was no impairment of goodwill in each of the three years ended December 31, 2023. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities as of December 31, 2023 and 2022 are as follows: December 31, 2023 2022 Payroll, incentive compensation, payroll taxes and benefits $ 13,964 $ 9,484 Deferred revenue 8,105 1,450 Accrued professional fees and other 7,080 7,347 Customer deposits 5,927 — Accrued international freight and tariffs 5,198 5,887 Taxes other than income 4,566 2,728 Income based tax payable 4,274 2,537 Product warranties 731 126 Accrued dividends 612 484 Accrued workers’ compensation insurance 197 576 Total accrued expenses and other current liabilities $ 50,654 $ 30,619 Self-Insurance Accrued Expenses We maintain a partially self-insured health benefit plan which provides medical and prescription drug benefits to certain of our employees electing coverage under the plan. Our exposure is limited by individual and aggregate stop loss limits through third-party insurance carriers. Our self-insurance expense is accrued based upon the aggregate of the expected liability for reported claims and the estimated liability for claims incurred but not reported, based on historical claims experience provided by our third-party insurance advisors, adjusted as necessary based upon management’s reasoned judgment. Actual employee medical claims expense may differ from estimated loss provisions based on historical experience. The liabilities for these claims are included as a component of payroll, incentive compensation, payroll taxes and benefits in the table above and were $2.3 million and $1.4 million as of December 31, 2023 and 2022, respectively. Product Warranties We generally warrant our wellhead manufactured products for 12 months and our manufactured spoolable pipe and connections for up to 24 months from the date placed in service. The estimated liability for product warranties is based on historical and current claims experience. Employee Benefit Plans Our employees within the United States are eligible to participate in a 401(k) plan sponsored by us. These employees are eligible to participate on the first day of the month following 30 days of employment and if they are at least eighteen years of age. Eligible employees may contribute a percentage of their compensation subject to a maximum imposed by the Internal Revenue Code. Broadly similar benefit plans exist for employees of our foreign subsidiaries. We match 100% of the first 3% of gross pay contributed by each employee and 50% of the next 4% of gross pay contributed by each employee and we may also make additional non‑elective employer contributions at our discretion under the plan. During 2023, 2022 and 2021, employer matching contributions totaled $3.7 million, $4.2 million and $1.2 million, respectively. Recent Accounting Pronouncements Standards Not Yet Adopted In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, “Income Taxes (Topic 740).” The amendments in this ASU require entities to disclose on an annual basis specific categories in the income tax rate reconciliation and provide additional disclosures for reconciling items that meet a specified quantitative threshold. Entities will also be required to disclose annually income taxes paid disaggregated by federal, state and foreign taxes and the amount of income taxes paid by individual jurisdictions that meet a five percent or greater threshold of total income taxes paid net of refunds received. The ASU also adds certain disclosures in order to be consistent with U.S. Securities and Exchange Commission rules and removes certain disclosures that no longer are considered cost beneficial or relevant. The amendments in this ASU are to be applied on a prospective basis and will be effective for our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, with early adoption permitted. We are currently evaluating the impact the adoption of this new standard will have on our disclosures. In November 2023, the FASB issued ASU No. 2023-07, “Improvements to Reportable Segment Disclosures (Topic 280)” in order to require disclosure of incremental segment information on an annual and interim basis for all public entities. The ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items and interim disclosures of a reportable segment’s profit or loss and assets. The ASU is to be applied retrospectively to all prior periods presented in the financial statements and is effective for our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, with early adoption permitted. We are currently evaluating the impact the adoption of this new standard will have on our segment disclosures. |
FlexSteel Acquisition
FlexSteel Acquisition | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
FlexSteel Acquisition | FlexSteel Acquisition On February 28, 2023 (the “acquisition date”), we completed the acquisition of FlexSteel in accordance with the terms and conditions of the merger agreement dated December 30, 2022. Including final adjustments for closing working capital, cash on hand and indebtedness adjustments as set forth in the merger agreement, we paid total cash consideration of $621.5 million. There is also a potential future earn-out payment of up to $75.0 million to be paid no later than the third quarter of 2024, if certain revenue growth targets are met by FlexSteel. We funded the upfront purchase price using a combination of $165.6 million of net proceeds received from the public offering of shares of our Class A common stock completed in January 2023, borrowings under the Amended ABL Credit Facility (as defined in Note 6) totaling $155.0 million and available cash on hand at the time of closing. We believe this acquisition enhances Cactus’ position as a premier manufacturer and provider of highly engineered equipment to the oil and gas E&P industry and provides meaningful growth potential for Cactus. We also believe FlexSteel’s products are highly complementary to Cactus’ equipment as it expands our exposure to our customers’ operations from production trees to transportation of oil, gas and other liquids as well as to additional customers operating in the midstream area. The acquisition has been accounted for using the acquisition method of accounting, with Cactus being treated as the accounting acquirer. Under the acquisition method of accounting, the assets and liabilities are recorded at their respective fair values as of the acquisition date. The transaction was treated as a purchase of stock for United States federal income tax purposes. In connection with the acquisition, we incurred approximately $7.5 million and $8.4 million of transaction costs for the year ended December 31, 2023 and 2022, respectively, required to effect the transaction. We incurred an additional $4.7 million in costs during the year ended December 31, 2023 related to the reporting of and accounting for the transaction. These fees primarily related to legal, accounting and consulting fees and are included in selling, general and administrative (“SG&A”) expenses in the consolidated statements of income. Purchase Price Consideration The final purchase price consideration for the acquisition is $627.5 million and is summarized as follows: Purchase Price Consideration Cash consideration $ 621,505 Add: Contingent consideration (1) 5,960 Fair value of consideration transferred $ 627,465 (1) Represents the estimated fair value as of the acquisition date of the earn-out payment of up to $75 million of additional cash consideration if certain revenue growth targets are met by FlexSteel. The estimated fair value of the earn-out payment was determined using a Monte Carlo simulation valuation methodology based on probability-weighted performance projections and other inputs, including a discount rate. Changes in the fair value of the earn-out liability subsequent to the acquisition date are recognized in the consolidated statements of income. As of December 31, 2023, the estimated fair value of the earn-out payment increased to $20.8 million. The increase is based on the revised forecast for the period January 1, 2023 through June 30, 2024, reflecting improvements in FlexSteel’s revenues as compared to projections made at the time of the acquisition. See further discussion of the calculation of fair value of the earn-out liability in Note 14. Purchase Price Allocation The following table provides the allocation of the purchase price as of the acquisition date. The goodwill reflected below increased $1.7 million from the original preliminary purchase price allocation as a result of measurement period adjustments, primarily related to changes in cash consideration upon finalization of the closing net working capital, updates to deferred tax liabilities and valuation adjustments to property and equipment and inventories. Cash and cash equivalents $ 5,316 Receivables 58,002 Inventories 91,746 Prepaid expenses and other current assets 1,283 Property and equipment 206,928 Operating lease right-of-use assets 1,021 Identifiable intangible assets 200,300 Other noncurrent assets 5,666 Total assets acquired 570,262 Accounts payable (14,975) Accrued expenses and other current liabilities (26,827) Finance lease obligations (974) Operating lease liabilities (906) Deferred tax liabilities (94,319) Total liabilities assumed (138,001) Net assets acquired 432,261 Goodwill $ 195,204 Assets acquired and liabilities assumed in connection with the acquisition were recorded at their fair values as of the acquisition date. The fair values were determined by management, based in part on an independent valuation performed by third-party valuation specialists. The valuation methods used to determine the fair value of intangible assets included the multi-year excess earnings approach for customer relationships and backlog and the relief from royalty method for tradename and developed technology. These fair values were based on inputs that are not observable in the market and thus represent Level 3 inputs. Several significant assumptions and estimates were involved in the application of these valuation methods, including forecasted revenues, long-term growth rate, royalty rates, margins, tax rates, capital spending, discount rates, attrition rates and working capital changes. Identifiable intangible assets with finite lives are subject to amortization over their estimated useful lives. The fair values determined for accounts receivable, accounts payable and most other current assets and liabilities, other than inventory, were equivalent to the carrying value due to their short-term nature. Acquired inventories are comprised of raw materials, work-in-progress and finished goods. The fair value of finished goods was calculated as the estimated selling price, less costs of the selling effort and a reasonable profit allowance relating to the selling effort. The fair value of work-in-progress was calculated as the estimated selling price, less costs to complete, less costs of the selling effort and a reasonable profit allowance on completion and selling costs. The fair value of raw materials was determined based on replacement cost which approximates historical carrying value. The fair value of identifiable fixed assets was calculated using a combination of valuation approaches, but primarily consisted of the cost approach which adjusts estimates of replacement cost for the age, condition and utility of the associated assets. Goodwill is calculated as the excess of the purchase price over the estimated fair value of net assets acquired and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Among the factors that contributed to a purchase price in excess of the estimated fair value of the net tangible and intangible assets acquired were the acquisition of an assembled workforce, expansion opportunities and other benefits that we believe will result from combining the operations of FlexSteel with ours. Goodwill was further increased by the deferred tax liability associated with the fair market value in excess of the tax basis acquired. The goodwill associated with this transaction has been allocated to our Spoolable Technologies segment and is not deductible for tax purposes. Pro forma financial information From acquisition date through December 31, 2023, FlexSteel produced revenue of $340.2 million and net income of $61.7 million. The pro forma financial information below represents the combined results of operations for the years ended December 31, 2023 and 2022, as if the acquisition had occurred as of January 1, 2022. The unaudited pro forma combined financial information includes, where applicable, adjustments for additional amortization expense related to the fair value step-up of intangible assets, additional inventory fair value step-up expense, additional depreciation expense associated with adjusting property and equipment to fair value, decreases in interest expense due to modification of borrowings in conjunction with the acquisition and associated tax-related impacts of adjustments. These pro forma adjustments are based on available information as of the date hereof and upon assumptions that we believe are reasonable to reflect the impact of the FlexSteel acquisition on our historical financial information on a supplemental pro forma basis. Adjustments do not include the elimination of transaction-related costs incurred or any costs related to integration activities, cost savings or synergies that have been or may be achieved by the combined business. The unaudited pro forma financial information is presented for informational purposes only and is neither indicative of the results of operations that would have occurred if the acquisition had taken place at the beginning of the period presented nor indicative of future operating results. Year Ended 2023 2022 Revenues $ 1,150,339 $ 1,039,612 Net Income attributable to Cactus, Inc. 181,020 116,180 |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consist of the following: December 31, 2023 2022 Raw materials $ 22,373 $ 3,150 Work-in-progress 11,471 5,444 Finished goods 171,781 152,689 Total inventories $ 205,625 $ 161,283 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The change in carrying value of goodwill allocated to our reportable segments during the twelve months ended December 31, 2023 was as follows: Pressure Control Spoolable Technologies Total Balance at December 31, 2022 $ 7,824 $ — $ 7,824 FlexSteel acquisition — 195,204 195,204 Balance at December 31, 2023 $ 7,824 $ 195,204 $ 203,028 The following table presents the detail of acquired intangible assets other than goodwill as of December 31, 2023: Amortization Period Gross Cost Accumulated Amortization Net Book Value Customer relationships 15 years $ 100,300 $ (5,572) $ 94,728 Developed technology 10 years 77,000 (6,417) 70,583 Tradename 10 years 16,000 (1,333) 14,667 Backlog 3 months 7,000 (7,000) — Total $ 200,300 $ (20,322) $ 179,978 All intangible assets are amortized over their estimated useful lives. The weighted average remaining amortization period for identifiable intangible assets acquired is 12 years. Amortization expense recognized during the twelve months ended December 31, 2023 was $20.3 million and was recorded in SG&A expenses in the consolidated statements of income. Estimated future amortization expense is as follows: 2024 15,987 2025 15,987 2026 15,987 2027 15,987 2028 15,987 Thereafter 100,043 Total $ 179,978 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt We had no debt outstanding as of December 31, 2023 and 2022. We had $1.1 million in letters of credit outstanding and were in compliance with all covenants under the Amended ABL Credit Facility (as defined below) as of December 31, 2023. In August 2018, Cactus LLC entered into a five-year senior secured asset-based revolving credit facility with a syndicate of lenders and JPMorgan Chase Bank, N.A., as administrative agent for such lenders and as an issuing bank and swingline lender (the “ABL Credit Facility”). The ABL Credit Facility and its amendments provided for up to $80.0 million in revolving commitments, up to $15.0 million of which was available for the issuance of letters of credit. On February 28, 2023, in connection with the FlexSteel acquisition, Cactus Companies assumed the rights and obligations of Cactus LLC as Borrower under the ABL Credit Facility, and the ABL Credit Facility was amended and restated in its entirety (the “Amended ABL Credit Facility”). The Amended ABL Credit Facility provides for a term loan of $125.0 million and up to $225.0 million in revolving commitments, of which $20.0 million is available for the issuance of letters of credit. Subject to certain terms and conditions set forth in the Amended ABL Credit Facility, Cactus Companies may request additional revolving commitments in an amount not to exceed $50.0 million, for a total of up to $275.0 million in revolving commitments. The term loan under the Amended ABL Credit Facility was set to mature on February 27, 2026 and any revolving loans under the Amended ABL Credit Facility mature on July 26, 2027. The maximum amount that Cactus Companies may borrow under the Amended ABL Credit Facility is subject to a borrowing base, which is based on a percentage of eligible accounts receivable and eligible inventory, subject to reserves and other adjustments. We borrowed the full $125.0 million term loan amount and $30.0 million as a revolving loan at closing of the Amended ABL Credit Facility to fund a portion of the acquisition. The term loan was required to be repaid in regular set amounts starting July 1, 2023 as set forth in the amortization schedule in the Amended ABL Credit Facility and could be prepaid without the payment of any prepayment premium (other than customary breakage costs for Term Benchmark (as defined below) borrowings). The term loan and revolving loan were repaid in full in July 2023. Borrowings under the Amended ABL Credit Facility bear interest at Cactus Companies’ option at either (i) the Alternate Base Rate (as defined therein) (“ABR”), or (ii) the Adjusted Term SOFR Rate (as defined therein) (“Term Benchmark”), plus, in each case, an applicable margin. Letters of credit issued under the Amended ABL Credit Facility accrue fees at a rate equal to the applicable margin for Term Benchmark borrowings. The applicable margin for revolving loan borrowings ranges from 0.0% to 0.5% per annum for revolving loan ABR borrowings and 1.25% to 1.75% per annum for revolving loan Term Benchmark borrowings and, in each case, is based on the average quarterly availability of the revolving loan commitment under the Amended ABL Credit Facility for the immediately preceding fiscal quarter. The unused portion of the revolving commitment under the Amended ABL Credit Facility is subject to a commitment fee of 0.25% per annum. The Amended ABL Credit Facility contains various covenants and restrictive provisions that limit Cactus Companies’ and each of its subsidiaries’ ability to, among other things, incur additional indebtedness and create liens, make investments or loans, merge or consolidate with other companies, sell assets, make certain restricted payments and distributions and engage in transactions with affiliates. The obligations under the Amended ABL Credit Facility are guaranteed by certain subsidiaries of Cactus Companies and secured by a security interest in the accounts receivable, inventory and certain other real and personal property assets of Cactus Companies and the guarantors. Until the term loan was repaid in full, the Amended ABL Credit Facility required Cactus Companies to maintain a leverage ratio no greater than 2.50 to 1.00 based on the ratio of Total Indebtedness (as defined therein) to EBITDA (as defined therein). The Amended ABL Credit Facility requires Cactus Companies to maintain a minimum fixed charge coverage ratio of 1.00 to 1.00 based on the ratio of EBITDA (as defined therein) minus Unfinanced Capital Expenditures (as defined therein) to Fixed Charges (as defined therein) during certain periods, including when availability under the ABL Credit Facility is under certain levels. If Cactus Companies fails to perform its obligations under the Amended ABL Credit Facility, (i) the revolving commitments under the Amended ABL Credit Facility could be terminated, (ii) any outstanding borrowings under the Amended ABL Credit Facility may be declared immediately due and payable and (iii) the lenders may commence foreclosure or other actions against the collateral. The Amended ABL Credit Facility was amended in December 2023 to incorporate certain changes related to revised and new definitions associated with the satisfaction of payment conditions for restricted payments, investments, permitted acquisitions, periodic reporting and asset dispositions. The amendment did not change the ABR, applicable margin rates, commitment fees, the maturity date, borrowing availability or covenants under the Amended ABL Credit Facility other than timing of certain reporting requirements. At December 31, 2023 and 2022, although there were no borrowings outstanding, the applicable margin on our Term Benchmark borrowings was 1.25%, plus the base rate of one, three or six month SOFR plus 0.10%, subject to a floor rate. Interest (Income) Expense, net Interest (income) expense, net, including deferred financing cost amortization, was comprised of the following: Year Ended December 31, 2023 2022 2021 Interest under bank facilities $ 3,818 $ 268 $ 313 Deferred financing cost amortization 4,514 165 168 Finance lease interest 1,110 628 520 Other 794 167 126 Interest income (3,756) (4,942) (353) Interest (income) expense, net $ 6,480 $ (3,714) $ 774 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Domestic and foreign components of income before income taxes were as follows: Year Ended December 31, 2023 2022 2021 Domestic $ 241,084 $ 155,380 $ 64,139 Foreign 21,292 21,172 11,006 Income before income taxes $ 262,376 $ 176,552 $ 75,145 The provision for income taxes consisted of: Year Ended December 31, 2023 2022 2021 Current: Federal $ 18,354 $ — $ — State 4,040 1,231 348 Foreign 7,799 4,900 2,497 Total current income taxes 30,193 6,131 2,845 Deferred: Federal 12,925 23,945 2,658 State 4,249 514 1,516 Foreign 169 840 656 Total deferred income taxes 17,343 25,299 4,830 Total provision for income taxes $ 47,536 $ 31,430 $ 7,675 The effective income tax rate was different from the statutory U.S. federal income tax rate due to the following: Year Ended December 31, 2023 2022 2021 Income taxes at 21% statutory tax rate $ 55,094 $ 37,076 $ 15,780 Net difference resulting from: Profit of non-controlling interest not subject to U.S. federal tax (9,951) (7,339) (3,754) Foreign income taxes (net of foreign tax credit) 1,918 2,104 2,423 State income taxes (excluding rate change) 3,999 2,910 1,348 Impact of change in forecasted state income tax rate 4,906 (1,739) 1,347 Foreign withholding taxes 1,419 1,225 730 Change in valuation allowance (12,067) (1,381) (8,977) Adjustments of prior year taxes 480 (120) 79 Stock compensation (1,193) (1,743) (1,096) Nondeductible expenses associated with acquisition 3,951 — — Other (1,020) 437 (205) Total provision for income taxes $ 47,536 $ 31,430 $ 7,675 Our effective tax rate was 18.1%, 17.8% and 10.2% for the years ended December 31, 2023, 2022 and 2021, respectively. Our effective tax rate is typically lower than the federal statutory rate of 21% due to the fact that Cactus Inc. is only subject to federal and state income tax on its share of income from Cactus Companies (Cactus LLC prior to the CC Reorganization). Income allocated to the non-controlling interest is not subject to U.S. federal or state tax. The components of deferred tax assets and liabilities are as follows: December 31, 2023 2022 Investment in Cactus Companies (Cactus LLC prior to the CC Reorganization) $ 179,196 $ 299,253 Imputed interest 12,740 12,982 Tax credits 7,439 6,158 Net operating loss and other carryforwards 11,343 855 Other 359 — Deferred tax assets 211,077 319,248 Valuation allowance (6,225) (17,604) Deferred tax asset, net 204,852 301,644 Foreign withholding taxes 1,350 1,323 Other 2,239 643 Deferred tax liability, net $ 3,589 $ 1,966 As of December 31, 2023, our liability related to the TRA was $270.9 million, representing 85% of the calculated net cash savings in the United States federal, state and local and franchise tax that we anticipate realizing in future years from certain increases in tax basis and certain tax benefits attributed to imputed interest as a result of our acquisition of CC Units (CW Units prior to the CC Reorganization). We have determined it is more-likely-than-not that we will be able to utilize all of our tax basis subject to the TRA; therefore, we have recorded a liability related to the TRA for the tax savings we may realize from certain increases in tax basis and certain tax benefits attributable to imputed interest as a result of our acquisition (or deemed acquisition for United States federal income tax purposes) of CC Units (CW Units prior to the CC Reorganization). If we determine the utilization of this tax basis is not more-likely-than-not in the future, our estimate of amounts to be paid under the TRA would be reduced. In this scenario, the reduction of the liability under the TRA would result in a benefit to our pre-tax consolidated results of operations in conjunction with an increase to the valuation allowance and an offsetting adjustment to tax expense. We record a deferred tax asset for the differences between our tax and book basis in the investment in Cactus Companies (Cactus LLC prior to the CC Reorganization) and imputed interest on the TRA. Based upon our cumulative earnings history and forecasted future sources of taxable income, we believe that we will be able to realize the majority of our U.S. deferred tax assets in the future. Subsequent to completion of the FlexSteel acquisition, we determined that we expect to generate sufficient taxable income of the appropriate type to allow for the realization of the deferred tax asset associated with our investment in Cactus Companies and recognized a $12.1 million tax benefit associated with the release of our valuation allowance previously provided. As such, as of December 31, 2023, we no longer have a valuation allowance against the deferred tax asset for the investment in Cactus Companies. During the first quarter of 2023, we recognized $4.3 million of tax expense associated with the revaluation of our deferred tax asset as a result of a change in our forecasted state rate primarily due to state impacts of the FlexSteel acquisition. During the year ended December 31, 2022, as a result of redemptions of CW Units, we released $1.4 million of our valuation allowance and recorded a tax benefit of $1.4 million related to the realizable portion of the deferred tax asset. As of December 31, 2022, we had a valuation allowance of $12.2 million against the $299.3 million deferred tax asset. We also record deferred tax assets for imputed interest, certain tax credits and net operating loss and other carryforwards. As of December 31, 2023, we have a valuation allowance of $6.2 million against these deferred tax assets, primarily associated with our portion of Cactus Companies’ accrued foreign taxes and state tax credits, due to uncertainty of realization. As of December 31, 2023, we have deferred tax assets on U.S. federal and state net operating loss (“NOL”) carryforwards of approximately $8.3 million and $0.6 million, respectively, which can be used to offset U.S. federal and state taxes payable in future years. Additionally, we have a deferred tax asset on deferred interest of $2.5 million. The U.S. federal NOL and deferred interest carryforwards have no expiration date whereas the U.S. state NOL carryforwards generally will expire in periods beginning in 2040. As a result of the FlexSteel acquisition, we acquired certain carryforward tax attributes, of which, $5.7 million were accounted for as unrecognized tax benefits in the acquisition accounting. This remains the balance of our uncertain tax positions as of December 31, 2023. We had no uncertain tax positions as of December 31, 2022. The unrecognized tax benefits have been offset by an indemnification receivable from the seller of $5.7 million. One of our subsidiaries is in the process of finalizing an Internal Revenue Service (“IRS”) audit of its 2021 federal income tax return with the expectation that no changes will occur as a result of this examination. None of our state income tax returns are currently under examination by state taxing authorities. Our federal and state income tax returns for the years ended December 31, 2020 through December 31, 2022 remain open for all purposes of examination by the IRS and applicable state taxing jurisdictions. However, certain earlier tax years remain open for adjustment to the extent of their net operating loss and deferred interest carryforwards available for future utilization. The Organization for Economic Cooperation and Development (“OECD”) recently enacted rules (“Pillar Two”) for a new, global minimum tax of at least 15% on income arising in low-tax jurisdictions. The Pillar Two rules are expected to be enacted beginning January 1, 2024. We are currently evaluating the impact this new legislation will have on our consolidated financial statements. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation We have a long-term incentive plan (“LTIP”) that provides for the grant of various stock-based compensation awards at the discretion of our compensation committee of our board of directors. Employees and non-employee directors are eligible to receive awards under the LTIP. Stock-based awards granted pursuant to the LTIP are expected to be settled in shares of our Class A common stock if they vest. Our stock-based awards do not have voting rights prior to vesting. Dividends declared are accumulated and paid upon vesting. We account for forfeitures when they occur and recognize the impact to stock-based compensation expense at that time. We recorded $18.1 million, $10.6 million and $8.6 million of stock-based compensation expense for the years ended December 31, 2023, 2022 and 2021. Stock-based compensation expense is primarily recorded in selling, general and administrative expenses. We recognized $1.2 million, $1.7 million and $1.1 million in tax benefits for tax deductions from the vesting of stock-based awards benefits during the years ended December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023, 3.0 million stock awards were available for grant. Restricted Stock Units Restricted stock units (“RSUs”) granted to our key employees generally vest over a three-year period (vesting ratably in equal tranches over a three-year period); however, RSUs granted to our non-employee directors generally vest on the first anniversary of the grant date. We recognize compensation expense over the requisite service period using straight-line amortization. The following table summarizes our RSU activity during the year ended December 31, 2023 (RSUs in thousands): No. of RSUs Weighted Average Grant Date Fair Value ($) Nonvested as of December 31, 2022 350 $ 36.27 Granted 484 43.19 Vested (239) 31.57 Forfeited (31) 44.43 Nonvested as of December 31, 2023 564 $ 43.75 The weighted average grant date fair value of RSUs granted was $43.19 during 2023, $55.06 during 2022 and $32.92 during 2021. The total fair value of RSUs vested was $10.1 million during 2023, $14.1 million during 2022 and $13.9 million during 2021. There was approximately $16.7 million of unrecognized compensation expense relating to the unvested RSUs as of December 31, 2023. The unrecognized compensation expense will be recognized over the weighted average remaining vesting period of 2.3 years. Performance Stock Units Performance stock units (“PSUs”) are granted to our executive officers and in rare instances, other key employees. Under these awards, the number of shares vested and earned is typically determined at the end of a three-year performance period based on our Return on Capital Employed (“ROCE”). The number of shares earned may range from 0% to 200% of the target units set forth in the applicable award agreement and is determined at the end of the performance period conditioned upon continued service and on our achievement of certain predefined targets as defined in the underlying performance stock unit agreements. PSUs cliff vest upon conclusion of the three-year performance period. As the ROCE target represents a performance condition, we recognize compensation expense for the performance share units on a straight-line basis over three years based on the probable outcome of the ROCE performance. The following table summarizes our PSU activity during the year ended December 31, 2023 (PSUs in thousands at their target number of shares, which assumes achievement of 100% of target, unless otherwise noted): No. of PSUs Weighted Average Grant Date Fair Value ($) Nonvested as of December 31, 2022 128 $ 43.63 Granted 149 44.20 Vested (1) (131) 32.82 Forfeited (35) 45.78 Performance adjustment (2) 65 32.82 Nonvested as of December 31, 2023 176 $ 47.71 (1) Reflects shares vested at 200% of target based on actual ROCE performance upon conclusion of the three-year performance period. (2) Represents additional shares issued to participants upon vesting due to the ROCE performance metrics exceeding target upon conclusion of the three-year performance period. |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue We disaggregate revenue from contracts with customers into three revenue categories: (i) product revenues, (ii) rental revenues and (iii) field service and other revenues. We have predominately domestic operations, with a small amount of sales in Australia, Canada, the Middle East and other international markets. For the year ended December 31, 2023, we derived 74% of our total revenues from the sale of our products, 10% of our total revenues from rental and 16% of our total revenues from field service and other. This compares to 66% of our total revenues from the sale of our products, 14% of our total revenues from rental and 20% of our total revenues from field service and other for the year ended December 31, 2022. In 2021, we derived 64% of our total revenues from the sale of our products, 14% from rental and 22% from field service and other. The following table presents our revenues disaggregated by category: Year Ended December 31, 2023 2022 2021 Product revenue $ 810,379 $ 452,615 $ 280,907 Rental revenue 113,631 100,453 61,629 Field service and other revenue 172,950 135,301 96,053 Total revenue $ 1,096,960 $ 688,369 $ 438,589 At December 31, 2023, we had a deferred revenue balance of $8.1 million compared to the December 31, 2022 balance of $1.5 million included in accrued expenses and other current liabilities in the consolidated balance sheets. Deferred revenue represents our obligation to transfer products or perform services for a customer for which we have received cash or billed in advance. The revenue that has been deferred will be recognized upon product delivery or as services are performed. As of December 31, 2023, we did not have any contracts with an original length of greater than a year from which revenue is expected to be recognized in the future related to performance obligations that are unsatisfied. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Leases | Leases We lease real estate, apartments, forklifts, vehicles and other equipment under non-cancellable agreements. Certain of our leases include one or more options to renew, with renewal terms that can extend the lease term from one The following are the components of operating and finance lease costs: Year Ended December 31, 2023 2022 Finance lease cost: Amortization of right-of-use assets $ 7,307 $ 5,516 Interest expense 1,110 628 Operating lease cost 6,123 6,564 Short-term lease cost 4,175 1,515 Sublease income (396) (353) Total lease cost $ 18,319 $ 13,870 The following is supplemental cash flow information for our operating and finance leases: Year Ended December 31, 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 1,110 $ 628 Operating cash flows from operating leases 6,143 6,524 Financing cash flows from finance leases 7,652 6,055 Total $ 14,905 $ 13,207 Right-of-use assets obtained in exchange for new lease obligations: Operating leases $ 6,361 $ 6,565 Finance leases 11,159 7,941 Total $ 17,520 $ 14,506 The following is the aggregate future lease payments for operating and finance leases as of December 31, 2023: Operating Finance 2024 $ 5,133 $ 8,529 2025 4,709 5,615 2026 4,041 4,931 2027 3,666 60 2028 3,251 — Thereafter 5,941 — Total undiscounted lease payments 26,741 19,135 Less: effects of discounting (3,400) (2,503) Present value of lease payments $ 23,341 $ 16,632 The following represents the average lease terms and discount rates for our operating and finance leases: Year Ended December 31, 2023 2022 Weighted average remaining lease term: Finance leases 1.9 years 2.0 years Operating leases 6.1 years 6.5 years Weighted average discount rate Finance leases 16.28 % 11.97 % Operating leases 3.59 % 2.96 % As a lessor, we rent a fleet of frac valves and ancillary equipment and equipment used for pipe installation for short-term rental periods, typically one |
Leases | Leases We lease real estate, apartments, forklifts, vehicles and other equipment under non-cancellable agreements. Certain of our leases include one or more options to renew, with renewal terms that can extend the lease term from one The following are the components of operating and finance lease costs: Year Ended December 31, 2023 2022 Finance lease cost: Amortization of right-of-use assets $ 7,307 $ 5,516 Interest expense 1,110 628 Operating lease cost 6,123 6,564 Short-term lease cost 4,175 1,515 Sublease income (396) (353) Total lease cost $ 18,319 $ 13,870 The following is supplemental cash flow information for our operating and finance leases: Year Ended December 31, 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 1,110 $ 628 Operating cash flows from operating leases 6,143 6,524 Financing cash flows from finance leases 7,652 6,055 Total $ 14,905 $ 13,207 Right-of-use assets obtained in exchange for new lease obligations: Operating leases $ 6,361 $ 6,565 Finance leases 11,159 7,941 Total $ 17,520 $ 14,506 The following is the aggregate future lease payments for operating and finance leases as of December 31, 2023: Operating Finance 2024 $ 5,133 $ 8,529 2025 4,709 5,615 2026 4,041 4,931 2027 3,666 60 2028 3,251 — Thereafter 5,941 — Total undiscounted lease payments 26,741 19,135 Less: effects of discounting (3,400) (2,503) Present value of lease payments $ 23,341 $ 16,632 The following represents the average lease terms and discount rates for our operating and finance leases: Year Ended December 31, 2023 2022 Weighted average remaining lease term: Finance leases 1.9 years 2.0 years Operating leases 6.1 years 6.5 years Weighted average discount rate Finance leases 16.28 % 11.97 % Operating leases 3.59 % 2.96 % As a lessor, we rent a fleet of frac valves and ancillary equipment and equipment used for pipe installation for short-term rental periods, typically one |
Leases | Leases We lease real estate, apartments, forklifts, vehicles and other equipment under non-cancellable agreements. Certain of our leases include one or more options to renew, with renewal terms that can extend the lease term from one The following are the components of operating and finance lease costs: Year Ended December 31, 2023 2022 Finance lease cost: Amortization of right-of-use assets $ 7,307 $ 5,516 Interest expense 1,110 628 Operating lease cost 6,123 6,564 Short-term lease cost 4,175 1,515 Sublease income (396) (353) Total lease cost $ 18,319 $ 13,870 The following is supplemental cash flow information for our operating and finance leases: Year Ended December 31, 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 1,110 $ 628 Operating cash flows from operating leases 6,143 6,524 Financing cash flows from finance leases 7,652 6,055 Total $ 14,905 $ 13,207 Right-of-use assets obtained in exchange for new lease obligations: Operating leases $ 6,361 $ 6,565 Finance leases 11,159 7,941 Total $ 17,520 $ 14,506 The following is the aggregate future lease payments for operating and finance leases as of December 31, 2023: Operating Finance 2024 $ 5,133 $ 8,529 2025 4,709 5,615 2026 4,041 4,931 2027 3,666 60 2028 3,251 — Thereafter 5,941 — Total undiscounted lease payments 26,741 19,135 Less: effects of discounting (3,400) (2,503) Present value of lease payments $ 23,341 $ 16,632 The following represents the average lease terms and discount rates for our operating and finance leases: Year Ended December 31, 2023 2022 Weighted average remaining lease term: Finance leases 1.9 years 2.0 years Operating leases 6.1 years 6.5 years Weighted average discount rate Finance leases 16.28 % 11.97 % Operating leases 3.59 % 2.96 % As a lessor, we rent a fleet of frac valves and ancillary equipment and equipment used for pipe installation for short-term rental periods, typically one |
Tax Receivable Agreement
Tax Receivable Agreement | 12 Months Ended |
Dec. 31, 2023 | |
Tax Receivable Agreement | |
Tax Receivable Agreement | Tax Receivable Agreement In connection with our IPO, we entered into the TRA with certain direct and indirect owners of Cactus LLC (after the CC Reorganization, Cactus Companies). These owners are referred to as the “TRA Holders”. The TRA generally provides for payment by Cactus Inc. 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 that Cactus Inc. 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 Cactus Inc.’s acquisition (or deemed acquisition for U.S. federal income tax purposes) of all or a portion of such TRA Holder’s CW Units (or CC Units after the CC Reorganization) in connection with our IPO or any subsequent offering, or pursuant to any other exercise of the Redemption Right or the Call Right (each as defined below), (ii) certain increases in tax basis resulting from the repayment of borrowings outstanding under Cactus LLC’s term loan facility in connection with our IPO and (iii) imputed interest deemed to be paid by Cactus Inc. as a result of, and additional tax basis arising from, any payments Cactus Inc. makes under the TRA. We retain the remaining 15% of the cash savings. The TRA liability is calculated by determining the tax basis subject to the TRA (“tax basis”) and applying a blended tax rate to the basis differences and calculating the resulting iterative impact. The blended tax rate consists of the U.S. federal income tax rate and an assumed combined state and local income tax rate driven by the apportionment factors applicable to each state. As of December 31, 2023, the total liability from the TRA was $270.9 million with $20.9 million reflected in current liabilities based on the expected timing of our next payment. The payments under the TRA will not be conditional on a holder of rights under the TRA having a continued ownership interest in either Cactus Companies or Cactus Inc. The term of the TRA commenced upon completion of our IPO and will continue until all tax benefits that are subject to the TRA have been utilized or expired, unless we exercise our right to terminate the TRA. If we elect to terminate the TRA early (or it is terminated early due to certain mergers, asset sales, other forms of business combinations or other changes of control relating to Cactus Companies, our obligations under the TRA would accelerate and we would be required to make an immediate payment equal to the present value of the anticipated future payments to be made by us under the TRA and such payment is expected to be substantial. The calculation of anticipated future payments will be based upon certain assumptions and deemed events set forth in the TRA, including the assumptions that (i) we have sufficient taxable income to fully utilize the tax benefits covered by the TRA and (ii) any CC Units (other than those held by Cactus Inc.) outstanding on the termination date are deemed to be redeemed on the termination date. Any early termination payment may be made significantly in advance of the actual realization, if any, of the future tax benefits to which the termination payment relates. We may elect to defer payments due under the TRA if we do not have available cash to satisfy our payment obligations under the TRA. Any such deferred payments under the TRA generally will accrue interest from the due date for such payment until the payment date. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Equity | Equity As of December 31, 2023, Cactus Inc. owned 82.3% of Cactus Companies, as compared to 80.3% of Cactus LLC (prior to the CC Reorganization) as of December 31, 2022. As of December 31, 2023, Cactus Inc. had outstanding 65.4 million shares of Class A common stock (representing 82.3% of the total voting power) and 14.0 million shares of Class B common stock (representing 17.7% of the total voting power). Equity Offering In January 2023, Cactus Inc. completed an underwritten offering of 3,224,300 shares of Class A common stock at a price to the underwriters of $51.36 per share for net proceeds of $165.6 million (net of $6.9 million of underwriting discounts and commissions). In addition to the underwriting discounts and commissions, approximately $2.2 million of costs directly associated with the stock issuance were recorded as a reduction to additional paid-in capital. FlexSteel Acquisition In conjunction with the FlexSteel acquisition, a restricted stock award of 128,150 shares of Class A common stock was issued under the Company’s long-term incentive plan to a key employee in exchange for cash consideration of $6.5 million. The shares were restricted from sale or trading and were subject to vesting requirements for one year from grant date. The agreement included a guaranteed payment provision whereby if the fair market value of the restricted shares was below the purchase price upon vesting, Cactus would compensate the key employee for the difference in price plus a gross-up for taxes. The restricted stock award early vested in October 2023 when the employee separated from the Company. The guaranteed payment provision was not triggered when the shares vested; therefore, no cash payment was required or made in accordance with the terms of this agreement. CC Reorganization As part of the CC Reorganization in connection with the acquisition of FlexSteel, Cactus Companies acquired all of the outstanding units representing limited liability company interests of Cactus LLC ( “CW Units”) in exchange for an equal number of CC Units issued to each of the previous owners of CW Units other than Cactus Inc. (the “CW Unit Holders”). Upon the completion of the CC Reorganization, CW Unit Holders ceased to be holders of CW Units and, instead, became holders of a number of CC Units equal to the number of CW Units such CW Unit Holders held immediately prior to the completion of the CC Reorganization. After the CC Reorganization, we refer to the owners of CC Units, other than Cactus Inc. (along with their permitted transferees), as “CC Unit Holders.” Following the completion of the CC Reorganization, CC Unit Holders own one share of our Class B Common Stock for each CC Unit such CC Unit Holder owns. In connection with the CC Reorganization, Cactus Inc. and the owners of CC Units entered into the Amended and Restated Limited Liability Company Operating Agreement of Cactus Companies (the “Cactus Companies LLC Agreement”), which contains substantially the same terms and conditions as the Second Amended and Restated Limited Liability Company Operating Agreement of Cactus LLC (the “Cactus Wellhead LLC Agreement”), which was the limited liability company operating agreement of Cactus LLC prior to the CC Reorganization. Cactus Inc. was responsible for all operational, management and administrative decisions relating to Cactus LLC’s business for the period from completion of our IPO until the CC Reorganization and relating to Cactus Companies’ business for periods after the CC Reorganization. Redemptions of CC Units Pursuant to the Cactus Companies LLC Agreement, each holder of CC Units has, subject to certain limitations, the right (the “Redemption Right”) to cause Cactus Companies to acquire all or at least a minimum portion of its CC Units for, at Cactus Companies’ election, (x) shares of our Class A common stock at a redemption ratio of one share of Class A common stock for each CC Unit redeemed, subject to conversion rate adjustments for stock splits, stock dividends and reclassification and other similar transactions, or (y) an equivalent amount of cash. Alternatively, upon the exercise of such redemption right, Cactus Inc. (instead of Cactus Companies) has the right (the “Call Right”) to acquire each tendered CC Unit directly from the exchanging CC Unit Holder for, at its election, (x) one share of Class A common stock, subject to conversion rate adjustments for stock splits, stock dividends and reclassifications and other similar transactions, or (y) an equivalent amount of cash. In connection with any redemption of CC Units pursuant to such Redemption Right or our Call Right, the corresponding number of shares of Class B common stock will be canceled. Any exercise by Cactus Companies or Cactus Inc. of the right to acquire redeemed CC Units for cash must be approved by the board of directors of Cactus Inc. To date, neither Cactus Inc. nor Cactus Companies (Cactus LLC prior to the CC Reorganization) have elected to acquire CC Units (including CW Units prior to the CC Reorganization) for cash in connection with exchanges by CC Unit Holders (CW Unit Holders prior to the CC Reorganization). It is the policy of Cactus Inc. that any exercise by Cactus Inc. or Cactus Companies of the right to acquire redeemed CC Units for cash must be approved by a majority of those members of the board of directors of Cactus Inc. who have no interest in such transaction. Since our IPO in February 2018, an aggregate of 46.5 million CC Units (including CW Units prior to the CC Reorganization) and a corresponding number of shares of Class B common stock have been redeemed in exchange for shares of Class A common stock. The following is a rollforward of ownership of CC Units (including CW Units prior to the CC Reorganization) for the three years ended December 31, 2023 (in thousands): Units CW Units outstanding as of December 31, 2020 27,655 2021 Secondary Offering (6,273) Cadent redemption in June 2021 (3,292) Cadent redemption in September 2021 (715) Other CW Unit redemptions (701) CW Units outstanding as of December 31, 2021 16,674 CW Unit redemptions (1,696) CW Units outstanding as of December 31, 2022 14,978 CC Unit redemptions (944) CC Units outstanding as of December 31, 2023 14,034 In addition to the redemptions associated with the 2021 Secondary Offering (as defined below) and the 2021 redemptions by Cadent (as defined below) and its affiliates, certain CC Unit Holders (CW Unit Holders prior to the CC Reorganization) redeemed 0.9 million, 1.7 million and 0.7 million CC Units (CW Units prior to the CC Reorganization), together with a corresponding number of shares of Class B common stock, pursuant to the Redemption Right for the years ended December 31, 2023, 2022 and 2021, respectively. Cactus Inc. acquired the redeemed CC Units (CW Units prior to the CC Reorganization) and a corresponding number of shares of Class B common stock (which shares of Class B common stock were then canceled) and issued 0.9 million, 1.7 million and 0.7 million shares of Class A common stock to the redeeming CC Unit Holders (CW Unit Holders prior to the CC Reorganization) during the same respective time periods. As a result of all of the CC Unit (CW Units prior to the CC Reorganization) redemptions during the years ended December 31, 2023, 2022 and 2021, Cactus Inc. increased its ownership in Cactus Companies (Cactus LLC prior to the CC Reorganization) and accordingly, increased its equity by approximately $12.8 million, $13.7 million and $79.4 million, respectively, resulting from a reduction in the non-controlling interest. On March 9, 2021, Cactus Inc. entered into an underwriting agreement with Cactus LLC, certain selling stockholders of Cactus (the “Selling Stockholders”) and the underwriters named therein, providing for the offer and sale by the Selling Stockholders (the “2021 Secondary Offering”) of up to 6,325,000 shares of Class A common stock at a price to the underwriters of $30.555 per share. On March 12, 2021, in connection with the 2021 Secondary Offering, certain of the Selling Stockholders exercised their right to redeem 6,272,500 CW Units, together with a corresponding number of shares of Class B common stock, as provided in the Cactus Wellhead LLC Agreement. Upon the closing of the 2021 Secondary Offering, Cactus Inc. acquired the redeemed CW Units and a corresponding number of shares of Class B common stock (which shares of Class B common stock were then canceled) and issued 6,272,500 new shares of Class A common stock to the underwriters at the direction of the redeeming Selling Stockholders, as provided in the Cactus Wellhead LLC Agreement. In addition, certain other Selling Stockholders sold 52,500 shares of Class A common stock in the 2021 Secondary Offering, which shares were owned by them directly as of the time of the 2021 Secondary Offering. Cactus did not receive any of the proceeds from the sale of common stock in the 2021 Secondary Offering and incurred $0.4 million in expenses which were recorded in other expense, net, in the consolidated statements of income. There was no change in the combined number of Cactus Inc. voting shares outstanding as a result of the 2021 Secondary Offering. On June 17, 2021, Cadent Energy Partners II, L.P. (“Cadent”) transferred ownership of 944,093 CW Units, together with a corresponding number of shares of Class B common stock, to its general partner, Cadent Energy Partners II - GP, L.P., (“Cadent GP”), and its manager, Cadent Management Services, LLC (“Cadent Management”). Cadent then redeemed its remaining 3.3 million CW Units, together with a corresponding number of shares of Class B common stock, as provided in the Cactus Wellhead LLC Agreement. The redeemed CW Units (and the corresponding shares of Class B common stock) were canceled and Cactus Inc. issued 3.3 million new shares of Class A common stock to Cadent, which then distributed such shares to its limited partners. Cactus received no proceeds from these events, and there was no change in the combined number of Cactus Inc. voting shares outstanding. On September 13, 2021, Cadent GP and Cadent Management transferred their aggregate ownership of 228,878 CW Units, together with a corresponding number of shares of Class B common stock, to their respective owners, which included certain Cactus Inc. board members and executive management. The transfers were made at the discretion of Cadent GP and Cadent Management without the consent of the transferees. Additionally, Cadent GP and Cadent Management redeemed their remaining 715,215 CW Units held, together with a corresponding number of shares of Class B common stock, thus liquidating its ownership in Cactus Wellhead, LLC. These transactions were in accordance with the Cactus Wellhead LLC Agreement. The redeemed CW Units (and the corresponding shares of Class B common stock) were canceled and Cactus Inc. issued 715,215 new shares of Class A common stock. Cactus received no proceeds from these events, and there was no change in the combined number of Cactus Inc. voting shares outstanding. Dividends Aggregate cash dividends of $0.46, $0.44 and $0.38 per share of Class A common stock declared during the years ended December 31, 2023, 2022 and 2021 totaled $30.3 million, $26.9 million and $21.2 million, respectively. Cash dividends paid during the years ended December 31, 2023, 2022 and 2021 totaled $30.1 million, $26.7 million and $21.2 million, respectively. Dividends accrue on unvested stock-based awards on the date of record and are paid upon vesting. Dividends are not paid to our Class B common stockholders; however, a corresponding distribution up to the same amount per share as our Class A common stockholders is paid to our CC Unit Holders (CW Unit Holders prior to the CC Reorganization) for any dividends declared on our Class A common stock. See Note 16 for further discussion of distributions made by Cactus Companies. Share Repurchase Program On June 6, 2023, our board of directors authorized the Company to repurchase shares of its Class A common stock for an aggregate purchase price of up to $150 million. Under our share repurchase program, shares may be repurchased from time to time in open market transactions or block trades, in privately negotiated transactions or any other method permitted under U.S. securities laws, rules and regulations. The repurchase program does not obligate the Company to purchase any particular amount of shares, and the repurchase program may be suspended or discontinued at any time at the Company’s discretion. During the twelve months ended December 31, 2023, the Company purchased and retired 8,232 shares of Class A common stock for $0.3 million or $39.78 average price per share excluding commissions, under the share repurchase program. As of December 31, 2023, $149.7 million remained authorized for future repurchases of Class A common stock under the program. Limitation of Members’ Liability Under the terms of the Cactus Companies LLC Agreement, the members of Cactus Companies are not obligated for debt, liabilities, contracts or other obligations of Cactus Companies. Profits and losses are allocated to members as defined in the Cactus Companies LLC Agreement. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions When needed, we rent a plane under dry lease from a company owned by a member of Cactus Companies. These transactions are under short-term rental arrangements and the agreement governing these transactions does not qualify as a lease. Effective January 1, 2022, we pay a base hourly rent of $2,500 per flight hour of use (increased from $1,750 per flight hour) of the aircraft, payable monthly, for the hours of aircraft operation. During the year ended December 31, 2023, expense recognized in connection with these rentals totaled $0.3 million as compared to $0.2 million during each of the years ended December 31, 2022 and 2021. As of December 31, 2023 and 2022, we owed less than $0.1 million to the related party which are included in accounts payable in the consolidated balance sheets. We are also responsible for employing pilots and fuel expenses. Our Chief Executive Officer and President reimburse the Company up to $2,350 per day for their personal use of the pilots employed by the Company, depending on how many company pilots are utilized for the day. The TRA agreement is with certain direct and indirect holders of CC Units (CW Unit Holders prior to the CC Reorganization), including certain of our officers, directors and employees. These TRA Holders have the right in the future to receive 85% of the net cash savings, if any, in U.S. federal, state and local income tax and franchise tax that Cactus Inc. actually realizes or is deemed to realize in certain circumstances. The total liability from the TRA as of December 31, 2023 was $270.9 million. We pay professional fees to assist with maintenance of the TRA and composite tax payments in advance of the state tax return filings which are reimbursable from the TRA Holders. As of December 31, 2023 and 2022, amounts due from the TRA Holders for fees and estimated state tax payments made on their behalf totaled $0.3 million and $0.1 million, respectively. The balances are included in accounts receivable, net in the consolidated balance sheets. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies We are involved in various disputes arising in the ordinary course of business. Management does not believe the outcome of these disputes will have a material adverse effect on our consolidated financial position or consolidated results of operations. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Authoritative guidance on fair value measurements provides a framework for measuring fair value and establishes a fair value hierarchy that prioritizes the inputs used to measure fair value, giving the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs). The carrying value of cash and cash equivalents, receivables, accounts payable and accrued expenses approximates fair value based on the short-term nature of these accounts. The fair value of our foreign currency forwards was less than $0.1 million as of December 31, 2023 and 2022, determined using market observable inputs including forward and spot prices (Level 2 inputs). We had no long-term debt outstanding as of December 31, 2023 or 2022. The following table sets forth our liabilities that are measured at fair value on a recurring basis by level within the fair value hierarchy: Fair Value at December 31, 2023 Level 1 Level 2 Level 3 Total Liabilities: Earn-out liability $ — $ — $ 20,810 $ 20,810 The earn-out liability related to the FlexSteel acquisition (see Note 3) is measured at fair value using Level 3 unobservable inputs at the end of each reporting period with changes in its estimated fair value recorded in earnings until the liability is settled. The fair value is determined based on the evaluation of the probability and amount of earn-out that may be achieved based on expected future performance of FlexSteel using a Monte Carlo simulation model. The Monte Carlo simulation model uses assumptions including revenue volatilities, risk free rates, credit discount rates and revenue discount rates. The following table sets forth the range of inputs for the significant assumptions utilized to determine the fair value of the earn-out payment as of December 31, 2023: December 31, 2023 Risk-free interest rate 5.40% to 5.63% Expected revenue volatility 21.70% Revenue discount rate 10.02% to 10.23% Credit discount rate 9.85% The following table presents a summary of the changes in fair value of our earn-out liability measured using Level 3 inputs: Opening balance at February 28, 2023 $ 5,960 Changes in fair value 14,850 Balance at December 31, 2023 $ 20,810 |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting Prior to the acquisition of FlexSteel, we operated in a single operating segment which reflected how our business was managed and the nature of our products and services. Upon completion of the acquisition, we re-evaluated our reportable segments and now report two operating segments. The operating segments have been identified based on the Company’s management structure, the different products and services offered by each and the financial data utilized by the Company’s Chief Executive Officer (the chief operating decision maker or “CODM”) to assess segment performance and allocate resources among segments. Our reporting segments are: • Pressure Control – engaged in the design, manufacture, sale, installation and service of wellhead and pressure control equipment utilized during the drilling, completion and production phases of oil and gas wells. • Spoolable Technologies – engaged in the design, manufacture, sale, installation, service and associated rental of onshore spoolable pipe technologies utilized for production, gathering and takeaway transportation of oil, gas or other liquids. Financial information by segment for the years ended December 31, 2023, 2022, and 2021 is summarized below. Year Ended December 31, 2023 2022 2021 Revenue: Pressure Control $ 756,727 $ 688,369 $ 438,589 Spoolable Technologies 340,233 — — Total revenues 1,096,960 688,369 438,589 Operating income: Pressure Control 236,934 202,650 91,579 Spoolable Technologies (1) 62,172 — — Total segment operating income 299,106 202,650 91,579 Corporate and other expenses (2) (34,740) (27,902) (16,152) Total operating income 264,366 174,748 75,427 Interest income (expense), net (6,480) 3,714 (774) Other income (expense), net 4,490 (1,910) 492 Income before income taxes $ 262,376 $ 176,552 $ 75,145 (1) Includes approximately $23.5 million of inventory step-up expense as a result of purchase accounting and $14.9 million of expense related to the change in fair value of the earn-out liability. (2) Comprised primarily of expenses not allocated to our operating segments. Corporate and other expenses were previously included in our Pressure Control segment. The information for fiscal year 2022 and 2021 has been recast to align with the presentation for the year ended December 31, 2023. Additional financial information by operating segment for the years ended December 31, 2023, 2022, and 2021 is summarized below. Year Ended December 31, 2023 2022 2021 Depreciation and amortization: Pressure Control $ 30,898 $ 34,124 $ 36,308 Spoolable Technologies 34,147 — — Total depreciation and amortization $ 65,045 $ 34,124 $ 36,308 Capital expenditures: Pressure Control $ 40,940 $ 28,291 $ 13,939 Spoolable Technologies 3,037 — — Total capital expenditures $ 43,977 $ 28,291 $ 13,939 Segment Assets: (1) Pressure Control $ 437,887 $ 447,937 $ 353,757 Spoolable Technologies 713,007 — — Total segment assets 1,150,894 447,937 353,757 Corporate and other (2) 371,667 670,959 628,321 Total assets $ 1,522,561 $ 1,118,896 $ 982,078 (1) Segment assets consist of accounts receivables, inventories, prepaid expenses and other current assets, property and equipment, net, goodwill and other intangible assets, net. (2) Consists primarily of cash and cash equivalents and deferred tax assets. Based on the location where the sale originated, revenues in the United States exceeded 95% of total revenues during each of the three years ended December 31, 2023. Additionally, tangible long-lived assets in the United States exceeded 90% of total tangible long-lived assets as of December 31, 2023, 2022 and 2021. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share of Class A common stock is calculated by dividing the net income attributable to Cactus Inc. during the period by the weighted average number of shares of Class A common stock outstanding during the same period. Diluted earnings per share of Class A common stock is calculated by dividing the net income attributable to Cactus Inc. during that period by the weighted average number of common shares outstanding assuming all potentially dilutive shares were issued. We use the if-converted method to determine the potential dilutive effect of outstanding CC Units (CW Units prior to the CC Reorganization) and corresponding shares of outstanding Class B common stock. We use the treasury stock method to determine the potential dilutive effect of our unvested stock-based compensation awards assuming that the proceeds will be used to purchase shares of Class A common stock. For our unvested performance stock units, we first apply the criteria for contingently issuable shares before determining the potential dilutive effect using the treasury stock method. The following table summarizes the basic and diluted earnings per share calculations: Year Ended December 31, 2023 2022 2021 Numerator: Net income attributable to Cactus Inc.—basic $ 169,171 $ 110,174 $ 49,593 Net income attributable to non-controlling interest (1) 35,075 27,235 13,744 Net income attributable to Cactus Inc.—diluted (1) $ 204,246 $ 137,409 $ 63,337 Denominator: Weighted average Class A shares outstanding—basic 64,641 60,323 55,398 Effect of dilutive shares 14,819 16,014 20,709 Weighted average Class A shares outstanding—diluted 79,460 76,337 76,107 Earnings per Class A share—basic $ 2.62 $ 1.83 $ 0.90 Earnings per Class A share—diluted (1) $ 2.57 $ 1.80 $ 0.83 (1) |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Dec. 31, 2023 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | Supplemental Cash Flow Information Non-cash investing and financing activities were as follows: Year Ended December 31, 2023 2022 2021 Right-of-use assets obtained in exchange for new lease obligations $ 17,520 $ 14,506 $ 15,283 Property and equipment in accounts payable 1,997 1,369 405 Cash paid for interest and income taxes was as follows: Year Ended December 31, 2023 2022 2021 Cash paid for interest $ 5,629 $ 1,063 $ 959 Cash paid for income taxes, net 25,998 5,502 4,542 During the years ended December 31, 2023, 2022 and 2021, we issued 0.9 million, 1.7 million and 11.0 million shares of Class A common stock, respectively, pursuant to redemptions of CC Units (CW Units prior to the CC Reorganization) by holders thereof. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Pay vs Performance Disclosure | |||
Net income | $ 169,171 | $ 110,174 | $ 49,593 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies and Other Items (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). These consolidated financial statements include the accounts of Cactus Inc. and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated upon consolidation. |
Use of Estimates | Use of Estimates In preparing our consolidated financial statements in conformity with GAAP, we make numerous estimates and assumptions that affect the accounting for and recognition and disclosure of assets, liabilities, equity, revenues and expenses. |
Concentration of Credit Risk | Concentrations of Credit Risk Our assets that are potentially subject to concentrations of credit risk are cash and cash equivalents and accounts receivable. We manage the credit risk associated with these financial instruments by transacting only with what management believes are financially secure counterparties, requiring credit approvals and credit limits and monitoring counterparties’ financial condition. Our receivables are spread over a number of customers, a majority of which are oil and natural gas exploration and production (“E&P”) companies representing private operators, publicly-traded independents, majors and other companies with operations in the key U.S. oil and gas producing basins as well as Australia, Canada and the Middle East. Our maximum exposure to credit loss in the event of non‑performance by the customer is limited to the receivable balance. We perform ongoing credit evaluations and monitoring as to the financial condition of our customers with respect to trade receivables. Generally, no collateral is required as a condition of sale. We also control our exposure associated with trade receivables by discontinuing sales and service to non-paying customers. For the year ended December 31, 2023, one customer represented approximately 10% of total revenues, with both operating segments reporting revenues with this customer. For the year ended December 31, 2022, no customers represented 10% or more of total revenues. One customer represented approximately 12% of total revenues for the year ended December 31, 2021. |
Significant Vendors | Significant Vendors The principal raw materials used in the manufacture of our pressure control products and rental equipment include forgings, castings, tube and bar stock. In addition, we require accessory items (such as elastomers, ring gaskets, studs and nuts) and machined components and assemblies. The principal raw materials used for our spoolable products include tube, bar stock, steel strip and high density polyethylene. We purchase a majority of these items from vendors primarily located in the United States, China, India, Australia and the United Kingdom. For the year ended December 31, 2023, one vendor represented approximately 10% of our total third-party vendor purchases of raw materials, finished products, equipment, machining and other services. For the years ended December 31, 2022 and 2021, no vendor represented 10% or more of our total third-party vendor purchases of raw materials, finished products, equipment, machining and other services. |
Tax Receivable Agreement (TRA) | Tax Receivable Agreement (TRA) We account for amounts payable under the TRA in accordance with Accounting Standards Codification (“ASC”) Topic 450, Contingencies. As such, subsequent changes to the measurement of the TRA liability are recognized in the statements of income as a component of other income (expense), net. During the years ended December 31, 2023, 2022 and 2021, we recognized a $4.5 million gain, a $1.9 million loss and a $0.9 million gain on the change in the TRA liability, respectively. See Note 11 for further details on the TRA liability. |
Revenue Recognition | Revenue Recognition The majority of our revenues are derived from short-term contracts for fixed consideration or in the case of equipment rentals, for a fixed charge per day while the equipment is in use by the customer. Product sales generally do not include right of return or other significant post-delivery obligations. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Revenues are recognized when we satisfy a performance obligation by transferring control of the promised goods or providing services to our customers at a point in time, in an amount specified in the contract with our customer and that reflects the consideration to which we expect to be entitled in exchange for those goods or services. The majority of our contracts with customers contain a single performance obligation to provide agreed upon products or services. For contracts with multiple performance obligations, we allocate revenue to each performance obligation based on its relative standalone selling price. We do not assess whether promised goods or services are performance obligations if they are immaterial in the context of the contract with the customer. We do not incur any material costs of obtaining contracts. We do not adjust the amount of consideration per the contract for the effects of a significant financing component when we expect, at contract inception, that the period between the transfer of a promised good or service to a customer and when the customer pays for that good or service will be one year or less, which is in substantially all cases. Payment terms and conditions vary, although terms generally include a requirement of payment within 30 to 45 days. Revenues are recognized net of any taxes collected from customers, which are subsequently remitted to governmental authorities. We treat shipping and handling associated with outbound freight as a fulfillment cost instead of as a separate performance obligation. We recognize the cost for the associated shipping and handling when incurred as an expense in cost of sales. Our revenues are derived from three sources: products, rentals, and field service and other: Product revenue. Product revenues are primarily derived from the sale of wellhead systems, production trees, spoolable pipe and connections. Revenue is recognized when the products have shipped and the customer obtains control of the products. Rental revenue. Rental revenues are primarily derived from the rental of equipment, tools and products to customers used for well control as well as rental of equipment used for pipe installation. Our rental agreements are directly with our customers and provide for a rate based primarily on the period of time the equipment is used or made available to the customer. In addition, customers are charged for repair costs for our frac equipment, typically through an agreed upon rate for each rental job. Revenue is recognized ratably over the rental period, which tends to be short-term in nature with most equipment on site for less than 90 days. Field service and other revenue. |
Foreign Currency Translation | Foreign Currency Translation The financial position and results of operations of our foreign subsidiaries are measured using the local currency as the functional currency. Revenues and expenses of the subsidiaries have been translated into U.S. dollars at average exchange rates prevailing during the period. Assets and liabilities have been translated at the rates of exchange on the balance sheet dates. The resulting translation gain and loss adjustments have been recorded directly as a separate component of other comprehensive income in the consolidated statements of comprehensive income and stockholders’ equity. Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in our consolidated statements of income as incurred. |
Derivative Financial Instruments | Derivative Financial Instruments We utilize a hedging program to reduce the risks associated with changes in the value of monetary assets and liabilities denominated in currencies other than the functional currency of our subsidiaries. Under this program, we utilize foreign currency forward contracts to offset gains or losses recorded upon remeasurement of assets and liabilities stated in the non-functional currencies of our subsidiaries. These forward contracts are not designated as hedges for accounting purposes. As such, we record changes in fair value of the forward contracts in our consolidated statements of income along with the gain or loss resulting from remeasurement of the U.S. dollar denominated financial assets and liabilities held by our foreign subsidiaries. The forward contracts are typically only 30 days in duration and are settled and renewed each month. As of December 31, 2023 and 2022, the fair value of our forward contracts was immaterial. |
Stock-based Compensation | Stock-based Compensation We measure the cost of equity‑based awards based on the grant date fair value and allocate the compensation expense over the requisite service period, which is usually the vesting period. The grant date fair value is determined by the closing price of our Class A common stock on the grant date. |
Income Taxes | Income Taxes Deferred taxes are recorded using the asset and liability method, whereby tax assets and liabilities are determined based on the differences between the financial statement and tax basis of assets and liabilities using enacted tax laws and rates expected to apply to taxable income in the year in which the differences are expected to reverse. We regularly evaluate the valuation allowances established for deferred tax assets for which future realization is uncertain. In assessing the realizability of deferred tax assets, we consider both positive and negative evidence, including scheduled reversals of deferred tax assets and liabilities, projected future taxable income, tax planning strategies and results of recent operations. If, based on the weight of available evidence, it is more likely than not that the deferred tax assets will not be realized, a valuation allowance is recorded. Cactus Inc. is a corporation and is subject to U.S. federal as well as state income tax related to its ownership percentage in Cactus Companies. Cactus Companies is a Delaware limited liability company treated as a partnership for U.S. federal income tax purposes and files a U.S. Return of Partnership Income, which includes both our U.S. and foreign operations. Consequently, the members of Cactus Companies are taxed individually on their share of earnings for U.S. federal and state income tax purposes. Cactus Companies is subject to the Texas Margins Tax and our operations in China, Australia, Canada and the Middle East are subject to local country income taxes. See Note 7 for additional information regarding income taxes. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash in excess of current operating requirements is invested in short-term interest-bearing investments with maturities of three months or less at the date of purchase and is stated at cost, which approximates fair value. Throughout the year we maintained cash balances that were not covered by federal deposit insurance. We have not experienced any losses in such accounts. |
Accounts Receivable and Allowance for Credit Losses | Accounts Receivable and Allowance for Credit Losses We extend credit to customers in the normal course of business. Our customers are predominantly oil and gas E&P companies in the United States. Our receivables are short-term in nature and typically due in 30 to 60 days. We do not accrue interest on delinquent receivables. Accounts receivable includes amounts billed and currently due from customers and unbilled amounts for products delivered and services performed for which billings have not yet been submitted to the customers. Total unbilled revenue included in accounts receivable as of December 31, 2023 and 2022 was $26.8 million and $34.9 million, respectively. We maintain an allowance for credit losses to provide for the amount of billed receivables we believe to be at risk of loss. In our determination of the allowance for credit losses, we pool receivables with similar risk characteristics based on customer size, credit ratings, payment history, bankruptcy status and other factors known to us and apply an expected credit loss percentage. The expected credit loss percentage is determined using historical loss data adjusted for current conditions and forecasts of future economic conditions. Accounts deemed uncollectible are applied against the allowance for credit losses. The following is a rollforward of our allowance for credit losses: Balance at Beginning of Period Expense Write off Translation Adjustments Balance at End of Period Year Ended December 31, 2023 $ 1,060 $ 2,622 $ (36) $ (4) $ 3,642 Year Ended December 31, 2022 741 406 (86) (1) 1,060 Year Ended December 31, 2021 598 310 (167) — 741 |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value. Cost is determined using standard cost (which approximates average cost). Costs include an application of related material, direct labor, duties, tariffs, freight and overhead costs. Net realizable value is the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. Reserves are made for excess and obsolete items based on a range of factors, including age, usage and technological or market changes that may impact demand for those products. The inventory obsolescence reserve was $25.6 million and $20.5 million as of December 31, 2023 and 2022, respectively. The following is a rollforward of our inventory obsolescence reserve: Balance at Beginning of Period Expense Write off Translation Adjustments Balance at End of Period Year Ended December 31, 2023 $ 20,488 $ 5,337 $ (193) $ 6 $ 25,638 Year Ended December 31, 2022 18,012 2,739 (202) (61) 20,488 Year Ended December 31, 2021 14,637 3,490 (62) (53) 18,012 |
Property and Equipment | Property and Equipment Property and equipment are stated at cost. We manufacture or construct most of our pressure control rental assets and during the production of these assets, they are reflected as construction in progress until complete. We depreciate the cost of property and equipment using the straight‑line method over the estimated useful lives and depreciate our rental assets to their salvage value. Leasehold improvements are amortized over the shorter of the remaining lease term or economic life of the related assets. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss are reflected in income for the period. The cost of maintenance and repairs is charged to income as incurred while significant renewals and improvements are capitalized. Estimated useful lives are as follows: Land N/A Buildings and improvements 5 - 30 years Machinery and equipment 3 - 20 years Reels and skids 12 - 20 years Vehicles 3 - 5 years Rental equipment 2 - 11 years Furniture and fixtures 5 years Computers and software 3 - 5 years Property and equipment as of December 31, 2023 and 2022 consists of the following: December 31, 2023 2022 Land $ 16,442 $ 5,302 Buildings and improvements 131,974 25,480 Machinery and equipment 128,962 57,883 Reels and skids 16,181 — Vehicles 36,552 29,045 Rental equipment 218,340 194,088 Furniture and fixtures 1,913 1,759 Computers and software 3,951 3,068 Gross property and equipment 554,315 316,625 Less: Accumulated depreciation (231,594) (200,573) Net property and equipment 322,721 116,052 Construction in progress 22,781 13,946 Total property and equipment, net $ 345,502 $ 129,998 Depreciation and amortization was $65.0 million, $34.1 million and $36.3 million for 2023, 2022 and 2021, respectively. Depreciation and amortization expense is included in the consolidated statements of income as follows: Year Ended December 31, 2023 2022 2021 Cost of product revenue $ 13,762 $ 3,022 $ 3,176 Cost of rental revenue 20,191 23,663 25,812 Cost of field service and other revenue 9,786 6,986 6,863 Selling, general and administrative expenses 21,306 453 457 Total depreciation and amortization $ 65,045 $ 34,124 $ 36,308 |
Impairment of Long-Lived Assets | Impairment of Long‑Lived Assets We review the recoverability of long‑lived assets, including finite-lived acquired intangible assets and property and equipment, when events or changes in circumstances occur that indicate the carrying value of the asset or asset group may not be recoverable. The assessment of possible impairment is based on our ability to recover the carrying value of the asset or asset group from the expected future pre‑tax cash flows (undiscounted) of the related operations. If these cash flows are less than the carrying value of such asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. We concluded there were no indicators evident or other circumstances present that these assets were not recoverable and accordingly, no impairment charges of long‑lived assets were recognized for 2023, 2022 and 2021. |
Goodwill | Goodwill |
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities as of December 31, 2023 and 2022 are as follows: December 31, 2023 2022 Payroll, incentive compensation, payroll taxes and benefits $ 13,964 $ 9,484 Deferred revenue 8,105 1,450 Accrued professional fees and other 7,080 7,347 Customer deposits 5,927 — Accrued international freight and tariffs 5,198 5,887 Taxes other than income 4,566 2,728 Income based tax payable 4,274 2,537 Product warranties 731 126 Accrued dividends 612 484 Accrued workers’ compensation insurance 197 576 Total accrued expenses and other current liabilities $ 50,654 $ 30,619 Self-Insurance Accrued Expenses We maintain a partially self-insured health benefit plan which provides medical and prescription drug benefits to certain of our employees electing coverage under the plan. Our exposure is limited by individual and aggregate stop loss limits through third-party insurance carriers. Our self-insurance expense is accrued based upon the aggregate of the expected liability for reported claims and the estimated liability for claims incurred but not reported, based on historical claims experience provided by our third-party insurance advisors, adjusted as necessary based upon management’s reasoned judgment. Actual employee medical claims expense may differ from estimated loss provisions based on historical experience. The liabilities for these claims are included as a component of payroll, incentive compensation, payroll taxes and benefits in the table above and were $2.3 million and $1.4 million as of December 31, 2023 and 2022, respectively. Product Warranties We generally warrant our wellhead manufactured products for 12 months and our manufactured spoolable pipe and connections for up to 24 months from the date placed in service. The estimated liability for product warranties is based on historical and current claims experience. |
Employee Benefit Plans | Employee Benefit Plans |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Standards Not Yet Adopted In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, “Income Taxes (Topic 740).” The amendments in this ASU require entities to disclose on an annual basis specific categories in the income tax rate reconciliation and provide additional disclosures for reconciling items that meet a specified quantitative threshold. Entities will also be required to disclose annually income taxes paid disaggregated by federal, state and foreign taxes and the amount of income taxes paid by individual jurisdictions that meet a five percent or greater threshold of total income taxes paid net of refunds received. The ASU also adds certain disclosures in order to be consistent with U.S. Securities and Exchange Commission rules and removes certain disclosures that no longer are considered cost beneficial or relevant. The amendments in this ASU are to be applied on a prospective basis and will be effective for our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, with early adoption permitted. We are currently evaluating the impact the adoption of this new standard will have on our disclosures. In November 2023, the FASB issued ASU No. 2023-07, “Improvements to Reportable Segment Disclosures (Topic 280)” in order to require disclosure of incremental segment information on an annual and interim basis for all public entities. The ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items and interim disclosures of a reportable segment’s profit or loss and assets. The ASU is to be applied retrospectively to all prior periods presented in the financial statements and is effective for our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, with early adoption permitted. We are currently evaluating the impact the adoption of this new standard will have on our segment disclosures. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies and Other Items (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Allowance for Credit Losses | The following is a rollforward of our allowance for credit losses: Balance at Beginning of Period Expense Write off Translation Adjustments Balance at End of Period Year Ended December 31, 2023 $ 1,060 $ 2,622 $ (36) $ (4) $ 3,642 Year Ended December 31, 2022 741 406 (86) (1) 1,060 Year Ended December 31, 2021 598 310 (167) — 741 |
Schedule of Inventory Reserve | The following is a rollforward of our inventory obsolescence reserve: Balance at Beginning of Period Expense Write off Translation Adjustments Balance at End of Period Year Ended December 31, 2023 $ 20,488 $ 5,337 $ (193) $ 6 $ 25,638 Year Ended December 31, 2022 18,012 2,739 (202) (61) 20,488 Year Ended December 31, 2021 14,637 3,490 (62) (53) 18,012 |
Schedule of Estimated Useful Lives and Property and Equipment | Estimated useful lives are as follows: Land N/A Buildings and improvements 5 - 30 years Machinery and equipment 3 - 20 years Reels and skids 12 - 20 years Vehicles 3 - 5 years Rental equipment 2 - 11 years Furniture and fixtures 5 years Computers and software 3 - 5 years Property and equipment as of December 31, 2023 and 2022 consists of the following: December 31, 2023 2022 Land $ 16,442 $ 5,302 Buildings and improvements 131,974 25,480 Machinery and equipment 128,962 57,883 Reels and skids 16,181 — Vehicles 36,552 29,045 Rental equipment 218,340 194,088 Furniture and fixtures 1,913 1,759 Computers and software 3,951 3,068 Gross property and equipment 554,315 316,625 Less: Accumulated depreciation (231,594) (200,573) Net property and equipment 322,721 116,052 Construction in progress 22,781 13,946 Total property and equipment, net $ 345,502 $ 129,998 |
Schedule of Depreciation and Amortization Expense | Depreciation and amortization expense is included in the consolidated statements of income as follows: Year Ended December 31, 2023 2022 2021 Cost of product revenue $ 13,762 $ 3,022 $ 3,176 Cost of rental revenue 20,191 23,663 25,812 Cost of field service and other revenue 9,786 6,986 6,863 Selling, general and administrative expenses 21,306 453 457 Total depreciation and amortization $ 65,045 $ 34,124 $ 36,308 |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities as of December 31, 2023 and 2022 are as follows: December 31, 2023 2022 Payroll, incentive compensation, payroll taxes and benefits $ 13,964 $ 9,484 Deferred revenue 8,105 1,450 Accrued professional fees and other 7,080 7,347 Customer deposits 5,927 — Accrued international freight and tariffs 5,198 5,887 Taxes other than income 4,566 2,728 Income based tax payable 4,274 2,537 Product warranties 731 126 Accrued dividends 612 484 Accrued workers’ compensation insurance 197 576 Total accrued expenses and other current liabilities $ 50,654 $ 30,619 |
FlexSteel Acquisition (Tables)
FlexSteel Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Summary of Purchase Price Consideration | The final purchase price consideration for the acquisition is $627.5 million and is summarized as follows: Purchase Price Consideration Cash consideration $ 621,505 Add: Contingent consideration (1) 5,960 Fair value of consideration transferred $ 627,465 (1) Represents the estimated fair value as of the acquisition date of the earn-out payment of up to $75 million of additional cash consideration if certain revenue growth targets are met by FlexSteel. The estimated fair value of the earn-out payment was determined using a Monte Carlo simulation valuation methodology based on probability-weighted performance projections and other inputs, including a discount rate. |
Summary of Preliminary Purchase Price Allocation | The following table provides the allocation of the purchase price as of the acquisition date. The goodwill reflected below increased $1.7 million from the original preliminary purchase price allocation as a result of measurement period adjustments, primarily related to changes in cash consideration upon finalization of the closing net working capital, updates to deferred tax liabilities and valuation adjustments to property and equipment and inventories. Cash and cash equivalents $ 5,316 Receivables 58,002 Inventories 91,746 Prepaid expenses and other current assets 1,283 Property and equipment 206,928 Operating lease right-of-use assets 1,021 Identifiable intangible assets 200,300 Other noncurrent assets 5,666 Total assets acquired 570,262 Accounts payable (14,975) Accrued expenses and other current liabilities (26,827) Finance lease obligations (974) Operating lease liabilities (906) Deferred tax liabilities (94,319) Total liabilities assumed (138,001) Net assets acquired 432,261 Goodwill $ 195,204 |
Summary of Unaudited Proforma Results | The unaudited pro forma financial information is presented for informational purposes only and is neither indicative of the results of operations that would have occurred if the acquisition had taken place at the beginning of the period presented nor indicative of future operating results. Year Ended 2023 2022 Revenues $ 1,150,339 $ 1,039,612 Net Income attributable to Cactus, Inc. 181,020 116,180 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | Inventories consist of the following: December 31, 2023 2022 Raw materials $ 22,373 $ 3,150 Work-in-progress 11,471 5,444 Finished goods 171,781 152,689 Total inventories $ 205,625 $ 161,283 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The change in carrying value of goodwill allocated to our reportable segments during the twelve months ended December 31, 2023 was as follows: Pressure Control Spoolable Technologies Total Balance at December 31, 2022 $ 7,824 $ — $ 7,824 FlexSteel acquisition — 195,204 195,204 Balance at December 31, 2023 $ 7,824 $ 195,204 $ 203,028 |
Summary of Total Intangible Assets | The following table presents the detail of acquired intangible assets other than goodwill as of December 31, 2023: Amortization Period Gross Cost Accumulated Amortization Net Book Value Customer relationships 15 years $ 100,300 $ (5,572) $ 94,728 Developed technology 10 years 77,000 (6,417) 70,583 Tradename 10 years 16,000 (1,333) 14,667 Backlog 3 months 7,000 (7,000) — Total $ 200,300 $ (20,322) $ 179,978 |
Summary of Future Amortization | Estimated future amortization expense is as follows: 2024 15,987 2025 15,987 2026 15,987 2027 15,987 2028 15,987 Thereafter 100,043 Total $ 179,978 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Interest (Income) Expense, Net | Interest (income) expense, net, including deferred financing cost amortization, was comprised of the following: Year Ended December 31, 2023 2022 2021 Interest under bank facilities $ 3,818 $ 268 $ 313 Deferred financing cost amortization 4,514 165 168 Finance lease interest 1,110 628 520 Other 794 167 126 Interest income (3,756) (4,942) (353) Interest (income) expense, net $ 6,480 $ (3,714) $ 774 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income (Loss) Before Income Taxes | Domestic and foreign components of income before income taxes were as follows: Year Ended December 31, 2023 2022 2021 Domestic $ 241,084 $ 155,380 $ 64,139 Foreign 21,292 21,172 11,006 Income before income taxes $ 262,376 $ 176,552 $ 75,145 |
Schedule of Provision For Income Taxes | The provision for income taxes consisted of: Year Ended December 31, 2023 2022 2021 Current: Federal $ 18,354 $ — $ — State 4,040 1,231 348 Foreign 7,799 4,900 2,497 Total current income taxes 30,193 6,131 2,845 Deferred: Federal 12,925 23,945 2,658 State 4,249 514 1,516 Foreign 169 840 656 Total deferred income taxes 17,343 25,299 4,830 Total provision for income taxes $ 47,536 $ 31,430 $ 7,675 |
Schedule of Effective Income Tax Rate Reconciliation | The effective income tax rate was different from the statutory U.S. federal income tax rate due to the following: Year Ended December 31, 2023 2022 2021 Income taxes at 21% statutory tax rate $ 55,094 $ 37,076 $ 15,780 Net difference resulting from: Profit of non-controlling interest not subject to U.S. federal tax (9,951) (7,339) (3,754) Foreign income taxes (net of foreign tax credit) 1,918 2,104 2,423 State income taxes (excluding rate change) 3,999 2,910 1,348 Impact of change in forecasted state income tax rate 4,906 (1,739) 1,347 Foreign withholding taxes 1,419 1,225 730 Change in valuation allowance (12,067) (1,381) (8,977) Adjustments of prior year taxes 480 (120) 79 Stock compensation (1,193) (1,743) (1,096) Nondeductible expenses associated with acquisition 3,951 — — Other (1,020) 437 (205) Total provision for income taxes $ 47,536 $ 31,430 $ 7,675 |
Schedule of Components of Deferred Tax Assets and Liabilities | The components of deferred tax assets and liabilities are as follows: December 31, 2023 2022 Investment in Cactus Companies (Cactus LLC prior to the CC Reorganization) $ 179,196 $ 299,253 Imputed interest 12,740 12,982 Tax credits 7,439 6,158 Net operating loss and other carryforwards 11,343 855 Other 359 — Deferred tax assets 211,077 319,248 Valuation allowance (6,225) (17,604) Deferred tax asset, net 204,852 301,644 Foreign withholding taxes 1,350 1,323 Other 2,239 643 Deferred tax liability, net $ 3,589 $ 1,966 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Restricted Stock Units | The following table summarizes our RSU activity during the year ended December 31, 2023 (RSUs in thousands): No. of RSUs Weighted Average Grant Date Fair Value ($) Nonvested as of December 31, 2022 350 $ 36.27 Granted 484 43.19 Vested (239) 31.57 Forfeited (31) 44.43 Nonvested as of December 31, 2023 564 $ 43.75 |
Summary of Performance Stock Units | The following table summarizes our PSU activity during the year ended December 31, 2023 (PSUs in thousands at their target number of shares, which assumes achievement of 100% of target, unless otherwise noted): No. of PSUs Weighted Average Grant Date Fair Value ($) Nonvested as of December 31, 2022 128 $ 43.63 Granted 149 44.20 Vested (1) (131) 32.82 Forfeited (35) 45.78 Performance adjustment (2) 65 32.82 Nonvested as of December 31, 2023 176 $ 47.71 (1) Reflects shares vested at 200% of target based on actual ROCE performance upon conclusion of the three-year performance period. (2) Represents additional shares issued to participants upon vesting due to the ROCE performance metrics exceeding target upon conclusion of the three-year performance period. |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Revenues Disaggregated by Category | The following table presents our revenues disaggregated by category: Year Ended December 31, 2023 2022 2021 Product revenue $ 810,379 $ 452,615 $ 280,907 Rental revenue 113,631 100,453 61,629 Field service and other revenue 172,950 135,301 96,053 Total revenue $ 1,096,960 $ 688,369 $ 438,589 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Summary of Components of Operating and Finance Lease Costs | The following are the components of operating and finance lease costs: Year Ended December 31, 2023 2022 Finance lease cost: Amortization of right-of-use assets $ 7,307 $ 5,516 Interest expense 1,110 628 Operating lease cost 6,123 6,564 Short-term lease cost 4,175 1,515 Sublease income (396) (353) Total lease cost $ 18,319 $ 13,870 |
Summary of Supplemental Cash Flow Information | The following is supplemental cash flow information for our operating and finance leases: Year Ended December 31, 2023 2022 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from finance leases $ 1,110 $ 628 Operating cash flows from operating leases 6,143 6,524 Financing cash flows from finance leases 7,652 6,055 Total $ 14,905 $ 13,207 Right-of-use assets obtained in exchange for new lease obligations: Operating leases $ 6,361 $ 6,565 Finance leases 11,159 7,941 Total $ 17,520 $ 14,506 |
Schedule of Operating Lease Future Lease Payments | The following is the aggregate future lease payments for operating and finance leases as of December 31, 2023: Operating Finance 2024 $ 5,133 $ 8,529 2025 4,709 5,615 2026 4,041 4,931 2027 3,666 60 2028 3,251 — Thereafter 5,941 — Total undiscounted lease payments 26,741 19,135 Less: effects of discounting (3,400) (2,503) Present value of lease payments $ 23,341 $ 16,632 |
Schedule of Finance Lease Future Lease Payments | The following is the aggregate future lease payments for operating and finance leases as of December 31, 2023: Operating Finance 2024 $ 5,133 $ 8,529 2025 4,709 5,615 2026 4,041 4,931 2027 3,666 60 2028 3,251 — Thereafter 5,941 — Total undiscounted lease payments 26,741 19,135 Less: effects of discounting (3,400) (2,503) Present value of lease payments $ 23,341 $ 16,632 |
Schedule of Weighted-Average Lease Terms and Weighted-Average Discount Rates | The following represents the average lease terms and discount rates for our operating and finance leases: Year Ended December 31, 2023 2022 Weighted average remaining lease term: Finance leases 1.9 years 2.0 years Operating leases 6.1 years 6.5 years Weighted average discount rate Finance leases 16.28 % 11.97 % Operating leases 3.59 % 2.96 % |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Schedule of CW Units Held by Legacy CW Unit Holders | The following is a rollforward of ownership of CC Units (including CW Units prior to the CC Reorganization) for the three years ended December 31, 2023 (in thousands): Units CW Units outstanding as of December 31, 2020 27,655 2021 Secondary Offering (6,273) Cadent redemption in June 2021 (3,292) Cadent redemption in September 2021 (715) Other CW Unit redemptions (701) CW Units outstanding as of December 31, 2021 16,674 CW Unit redemptions (1,696) CW Units outstanding as of December 31, 2022 14,978 CC Unit redemptions (944) CC Units outstanding as of December 31, 2023 14,034 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Summary of Liabilities Measured at Fair Value | The following table sets forth our liabilities that are measured at fair value on a recurring basis by level within the fair value hierarchy: Fair Value at December 31, 2023 Level 1 Level 2 Level 3 Total Liabilities: Earn-out liability $ — $ — $ 20,810 $ 20,810 |
Summary of Significant Assumptions to Determine Fair Value | The following table sets forth the range of inputs for the significant assumptions utilized to determine the fair value of the earn-out payment as of December 31, 2023: December 31, 2023 Risk-free interest rate 5.40% to 5.63% Expected revenue volatility 21.70% Revenue discount rate 10.02% to 10.23% Credit discount rate 9.85% |
Summary of Changes in Fair Value | The following table presents a summary of the changes in fair value of our earn-out liability measured using Level 3 inputs: Opening balance at February 28, 2023 $ 5,960 Changes in fair value 14,850 Balance at December 31, 2023 $ 20,810 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Summarized Financial Information by Segment | Financial information by segment for the years ended December 31, 2023, 2022, and 2021 is summarized below. Year Ended December 31, 2023 2022 2021 Revenue: Pressure Control $ 756,727 $ 688,369 $ 438,589 Spoolable Technologies 340,233 — — Total revenues 1,096,960 688,369 438,589 Operating income: Pressure Control 236,934 202,650 91,579 Spoolable Technologies (1) 62,172 — — Total segment operating income 299,106 202,650 91,579 Corporate and other expenses (2) (34,740) (27,902) (16,152) Total operating income 264,366 174,748 75,427 Interest income (expense), net (6,480) 3,714 (774) Other income (expense), net 4,490 (1,910) 492 Income before income taxes $ 262,376 $ 176,552 $ 75,145 (1) Includes approximately $23.5 million of inventory step-up expense as a result of purchase accounting and $14.9 million of expense related to the change in fair value of the earn-out liability. (2) Comprised primarily of expenses not allocated to our operating segments. Corporate and other expenses were previously included in our Pressure Control segment. The information for fiscal year 2022 and 2021 has been recast to align with the presentation for the year ended December 31, 2023. Additional financial information by operating segment for the years ended December 31, 2023, 2022, and 2021 is summarized below. Year Ended December 31, 2023 2022 2021 Depreciation and amortization: Pressure Control $ 30,898 $ 34,124 $ 36,308 Spoolable Technologies 34,147 — — Total depreciation and amortization $ 65,045 $ 34,124 $ 36,308 Capital expenditures: Pressure Control $ 40,940 $ 28,291 $ 13,939 Spoolable Technologies 3,037 — — Total capital expenditures $ 43,977 $ 28,291 $ 13,939 Segment Assets: (1) Pressure Control $ 437,887 $ 447,937 $ 353,757 Spoolable Technologies 713,007 — — Total segment assets 1,150,894 447,937 353,757 Corporate and other (2) 371,667 670,959 628,321 Total assets $ 1,522,561 $ 1,118,896 $ 982,078 (1) Segment assets consist of accounts receivables, inventories, prepaid expenses and other current assets, property and equipment, net, goodwill and other intangible assets, net. (2) Consists primarily of cash and cash equivalents and deferred tax assets. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Summary of Basic and Diluted Earnings Per Share | The following table summarizes the basic and diluted earnings per share calculations: Year Ended December 31, 2023 2022 2021 Numerator: Net income attributable to Cactus Inc.—basic $ 169,171 $ 110,174 $ 49,593 Net income attributable to non-controlling interest (1) 35,075 27,235 13,744 Net income attributable to Cactus Inc.—diluted (1) $ 204,246 $ 137,409 $ 63,337 Denominator: Weighted average Class A shares outstanding—basic 64,641 60,323 55,398 Effect of dilutive shares 14,819 16,014 20,709 Weighted average Class A shares outstanding—diluted 79,460 76,337 76,107 Earnings per Class A share—basic $ 2.62 $ 1.83 $ 0.90 Earnings per Class A share—diluted (1) $ 2.57 $ 1.80 $ 0.83 (1) |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Non Cash Activities | Non-cash investing and financing activities were as follows: Year Ended December 31, 2023 2022 2021 Right-of-use assets obtained in exchange for new lease obligations $ 17,520 $ 14,506 $ 15,283 Property and equipment in accounts payable 1,997 1,369 405 Cash paid for interest and income taxes was as follows: Year Ended December 31, 2023 2022 2021 Cash paid for interest $ 5,629 $ 1,063 $ 959 Cash paid for income taxes, net 25,998 5,502 4,542 |
Organization and Nature of Op_2
Organization and Nature of Operations (Details) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
Class A Common Stock | ||
Organization and Nature of Operations | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Class B Common Stock | ||
Organization and Nature of Operations | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies and Other Items - Narrative (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Concentration Risk [Line Items] | ||||
Gain (loss) on change in TRA liability | $ 4,500,000 | $ (1,900,000) | $ 900,000 | |
Unbilled revenue | 26,800,000 | 34,900,000 | ||
Inventory obsolescence reserve | 25,638,000 | 20,488,000 | 18,012,000 | $ 14,637,000 |
Depreciation and amortization | 65,045,000 | 34,124,000 | 36,308,000 | |
Impairment charges of long-lived assets | 0 | 0 | 0 | |
Impairment of goodwill | 0 | 0 | 0 | |
Self insurance accrued expenses | $ 2,300,000 | 1,400,000 | ||
Product warranty period | 12 months | |||
Pipe and connections warranty period | 24 months | |||
Long-term debt | $ 0 | 0 | ||
Employer match of first tier of employee contribution (as a percent) | 100 | |||
First tier percentage of compensation eligible for match | 3 | |||
Employer match of second tier of employee contribution (as a percent) | 50 | |||
Second tier percentage of compensation eligible for match | 4 | |||
Employer matching contributions | $ 3,700,000 | $ 4,200,000 | $ 1,200,000 | |
Supplier One | Purchases | Supplier concentration | ||||
Concentration Risk [Line Items] | ||||
Concentration of risk | 10% | |||
One customer | Total revenues | Customer | ||||
Concentration Risk [Line Items] | ||||
Concentration of risk | 10% | 12% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies and Other Items - Schedule of Allowance for Credit Losses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at Beginning of Period | $ 1,060 | $ 741 | $ 598 |
Expense | 2,622 | 406 | 310 |
Write off | (36) | (86) | (167) |
Translation Adjustments | (4) | (1) | 0 |
Balance at End of Period | $ 3,642 | $ 1,060 | $ 741 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies and Other Items - Schedule of Inventory Reserve (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Inventory Adjustments [Roll Forward] | |||
Balance at Beginning of Period | $ 20,488 | $ 18,012 | $ 14,637 |
Expense | 5,337 | 2,739 | 3,490 |
Write off | (193) | (202) | (62) |
Translation Adjustments | 6 | (61) | (53) |
Balance at End of Period | $ 25,638 | $ 20,488 | $ 18,012 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies and Other Items - Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Property and equipment | ||
Gross property and equipment | $ 554,315 | $ 316,625 |
Less: Accumulated depreciation | (231,594) | (200,573) |
Net property and equipment | 322,721 | 116,052 |
Property and equipment, net | 345,502 | 129,998 |
Land | ||
Property and equipment | ||
Gross property and equipment | 16,442 | 5,302 |
Buildings and improvements | ||
Property and equipment | ||
Gross property and equipment | $ 131,974 | 25,480 |
Buildings and improvements | Minimum | ||
Property and Equipment | ||
Estimated useful life | 5 years | |
Buildings and improvements | Maximum | ||
Property and Equipment | ||
Estimated useful life | 30 years | |
Machinery and equipment | ||
Property and equipment | ||
Gross property and equipment | $ 128,962 | 57,883 |
Machinery and equipment | Minimum | ||
Property and Equipment | ||
Estimated useful life | 3 years | |
Machinery and equipment | Maximum | ||
Property and Equipment | ||
Estimated useful life | 20 years | |
Reels and skids | ||
Property and equipment | ||
Gross property and equipment | $ 16,181 | 0 |
Reels and skids | Minimum | ||
Property and Equipment | ||
Estimated useful life | 12 years | |
Reels and skids | Maximum | ||
Property and Equipment | ||
Estimated useful life | 20 years | |
Vehicles | ||
Property and equipment | ||
Vehicles | $ 36,552 | 29,045 |
Vehicles | Minimum | ||
Property and Equipment | ||
Estimated useful life | 3 years | |
Vehicles | Maximum | ||
Property and Equipment | ||
Estimated useful life | 5 years | |
Rental equipment | ||
Property and equipment | ||
Gross property and equipment | $ 218,340 | 194,088 |
Rental equipment | Minimum | ||
Property and Equipment | ||
Estimated useful life | 2 years | |
Rental equipment | Maximum | ||
Property and Equipment | ||
Estimated useful life | 11 years | |
Furniture and fixtures | ||
Property and Equipment | ||
Estimated useful life | 5 years | |
Property and equipment | ||
Gross property and equipment | $ 1,913 | 1,759 |
Computers and software | ||
Property and equipment | ||
Gross property and equipment | $ 3,951 | 3,068 |
Computers and software | Minimum | ||
Property and Equipment | ||
Estimated useful life | 3 years | |
Computers and software | Maximum | ||
Property and Equipment | ||
Estimated useful life | 5 years | |
Construction in progress | ||
Property and equipment | ||
Gross property and equipment | $ 22,781 | $ 13,946 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies and Other Items - Schedule of Depreciation and Amortization Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Depreciation expense | |||
Selling, general and administrative expenses | $ 21,306 | $ 453 | $ 457 |
Total depreciation and amortization | 65,045 | 34,124 | 36,308 |
Product revenue | |||
Depreciation expense | |||
Cost of sales | 13,762 | 3,022 | 3,176 |
Rental revenue | |||
Depreciation expense | |||
Cost of sales | 20,191 | 23,663 | 25,812 |
Field service and other revenue | |||
Depreciation expense | |||
Cost of sales | $ 9,786 | $ 6,986 | $ 6,863 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies and Other Items - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Accrued expenses and other | ||
Payroll, incentive compensation, payroll taxes and benefits | $ 13,964 | $ 9,484 |
Deferred revenue | 8,105 | 1,450 |
Accrued professional fees and other | 7,080 | 7,347 |
Customer deposits | 5,927 | 0 |
Accrued international freight and tariffs | 5,198 | 5,887 |
Taxes other than income | 4,566 | 2,728 |
Income based tax payable | 4,274 | 2,537 |
Product warranties | 731 | 126 |
Accrued dividends | 612 | 484 |
Accrued workers’ compensation insurance | 197 | 576 |
Total accrued expenses and other current liabilities | $ 50,654 | $ 30,619 |
FlexSteel Acquisition - Narrati
FlexSteel Acquisition - Narrative (Details) - USD ($) $ in Thousands | 10 Months Ended | 12 Months Ended | |||
Feb. 28, 2023 | Dec. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | |||||
Earn-out liability | $ 20,810 | $ 20,810 | $ 0 | ||
Upfront purchase price funds | $ 165,600 | ||||
Additional costs related to reporting and accounting of the transaction | 4,700 | 4,700 | |||
Net income | 169,171 | 110,174 | $ 49,593 | ||
FlexSteel | |||||
Business Acquisition [Line Items] | |||||
Cash consideration | 621,505 | ||||
Earn-out liability | 75,000 | 20,800 | 20,800 | ||
Borrowings total | $ 155,000 | ||||
Transaction costs | 7,500 | $ 7,500 | $ 8,400 | ||
Revenue | 340,200 | ||||
Net income | $ 61,700 |
FlexSteel Acquisition - Summary
FlexSteel Acquisition - Summary of Purchase Price Consideration (Details) - USD ($) $ in Thousands | Feb. 28, 2023 | Dec. 31, 2023 | Dec. 31, 2022 |
Business Acquisition [Line Items] | |||
Earn-out liability | $ 20,810 | $ 0 | |
FlexSteel | |||
Business Acquisition [Line Items] | |||
Cash consideration | $ 621,505 | ||
Add: Contingent consideration | 5,960 | ||
Fair value of consideration transferred | 627,465 | ||
Earn-out liability | $ 75,000 | $ 20,800 |
FlexSteel Acquisition - Summa_2
FlexSteel Acquisition - Summary of Preliminary Purchase Price Allocation (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Dec. 31, 2023 | Feb. 28, 2023 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | |||
Goodwill | $ 203,028 | $ 7,824 | |
FlexSteel | |||
Business Acquisition [Line Items] | |||
Goodwill decrease | $ 1,700 | ||
Cash and cash equivalents | $ 5,316 | ||
Receivables | 58,002 | ||
Inventories | 91,746 | ||
Prepaid expenses and other current assets | 1,283 | ||
Property and equipment | 206,928 | ||
Operating lease right-of-use assets | 1,021 | ||
Identifiable intangible assets | 200,300 | ||
Other noncurrent assets | 5,666 | ||
Total assets acquired | 570,262 | ||
Accounts payable | (14,975) | ||
Accrued expenses and other current liabilities | (26,827) | ||
Finance lease obligations | (974) | ||
Operating lease liabilities | (906) | ||
Deferred tax liabilities | (94,319) | ||
Total liabilities assumed | (138,001) | ||
Net assets acquired | 432,261 | ||
Goodwill | $ 195,204 |
FlexSteel Acquisition - Summa_3
FlexSteel Acquisition - Summary of Unadited Proforma Results (Details) - FlexSteel - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | ||
Revenues | $ 1,150,339 | $ 1,039,612 |
Net Income attributable to Cactus, Inc. | $ 181,020 | $ 116,180 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Summary of Inventories | ||
Raw materials | $ 22,373 | $ 3,150 |
Work-in-progress | 11,471 | 5,444 |
Finished goods | 171,781 | 152,689 |
Total inventories | $ 205,625 | $ 161,283 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Schedule of Goodwill (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 7,824 |
FlexSteel acquisition | 195,204 |
Ending balance | 203,028 |
Pressure Control | |
Goodwill [Roll Forward] | |
Beginning balance | 7,824 |
FlexSteel acquisition | 0 |
Ending balance | 7,824 |
Spoolable Technologies | |
Goodwill [Roll Forward] | |
Beginning balance | 0 |
FlexSteel acquisition | 195,204 |
Ending balance | $ 195,204 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Summary of Total Intangible Assets (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Finite-Lived Intangible Assets, Net [Abstract] | |
Gross Cost | $ 200,300 |
Accumulated Amortization | (20,322) |
Net Book Value | $ 179,978 |
Customer relationships | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Amortization Period | 15 years |
Gross Cost | $ 100,300 |
Accumulated Amortization | (5,572) |
Net Book Value | $ 94,728 |
Developed technology | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Amortization Period | 10 years |
Gross Cost | $ 77,000 |
Accumulated Amortization | (6,417) |
Net Book Value | $ 70,583 |
Tradename | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Amortization Period | 10 years |
Gross Cost | $ 16,000 |
Accumulated Amortization | (1,333) |
Net Book Value | $ 14,667 |
Backlog | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Amortization Period | 3 months |
Gross Cost | $ 7,000 |
Accumulated Amortization | (7,000) |
Net Book Value | $ 0 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense | $ 127,076 | $ 67,700 | $ 46,021 |
Identifiable Intangible Assets Acquired | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization Period | 12 years | ||
Amortization expense | $ 20,300 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Summary of Future Amortization (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2024 | $ 15,987 |
2025 | 15,987 |
2026 | 15,987 |
2027 | 15,987 |
2028 | 15,987 |
Thereafter | 100,043 |
Net Book Value | $ 179,978 |
Debt - Narrative (Details)
Debt - Narrative (Details) | 1 Months Ended | 12 Months Ended | |||
Aug. 31, 2018 | Dec. 31, 2023 USD ($) | Feb. 28, 2023 USD ($) | Dec. 31, 2022 USD ($) | Jul. 25, 2022 USD ($) | |
Long-term Debt | |||||
Long-term debt | $ 0 | $ 0 | |||
Letters of credit outstanding | $ 1,100,000 | ||||
SOFR | |||||
Long-term Debt | |||||
Applicable margin rate | 1.25% | ||||
One-month SOFR | |||||
Long-term Debt | |||||
Applicable margin rate | 0.10% | ||||
Three-month SOFR | |||||
Long-term Debt | |||||
Applicable margin rate | 0.10% | ||||
Six-month SOFR | |||||
Long-term Debt | |||||
Applicable margin rate | 0.10% | ||||
Secured Debt | Amended ABL Credit Facility | |||||
Long-term Debt | |||||
Aggregate principal amount | $ 125,000,000 | ||||
ABL Credit Facility | |||||
Long-term Debt | |||||
Long-term debt | $ 0 | ||||
ABL Credit Facility | Line of Credit | Amended ABL Credit Facility | |||||
Long-term Debt | |||||
Maximum borrowing capacity | 225,000,000 | ||||
ABL Credit Facility | Line of Credit | The Credit Facility | |||||
Long-term Debt | |||||
Term loan | 30,000,000 | ||||
Letters of credit | Line of Credit | Amended ABL Credit Facility | |||||
Long-term Debt | |||||
Maximum borrowing capacity | 20,000,000 | ||||
Secured Debt | Line of Credit | The Credit Facility | |||||
Long-term Debt | |||||
Term loan | 125,000,000 | ||||
Subsidiaries | ABL Credit Facility | |||||
Long-term Debt | |||||
Debt term | 5 years | ||||
Fixed charge coverage ratio | 1 | ||||
Subsidiaries | ABL Credit Facility | Minimum | Alternate Base Rate | |||||
Long-term Debt | |||||
Applicable margin rate | 0% | ||||
Subsidiaries | ABL Credit Facility | Minimum | SOFR | |||||
Long-term Debt | |||||
Applicable margin rate | 1.25% | ||||
Subsidiaries | ABL Credit Facility | Maximum | |||||
Long-term Debt | |||||
Commitment fee, percent | 0.25% | ||||
Subsidiaries | ABL Credit Facility | Maximum | Alternate Base Rate | |||||
Long-term Debt | |||||
Applicable margin rate | 0.50% | ||||
Subsidiaries | ABL Credit Facility | Maximum | SOFR | |||||
Long-term Debt | |||||
Applicable margin rate | 1.75% | ||||
Subsidiaries | ABL Credit Facility | Line of Credit | Credit Agreement | |||||
Long-term Debt | |||||
Maximum leverage ratio | 2.50 | ||||
Cactus LLC and Subsidiaries | Line of Credit | |||||
Long-term Debt | |||||
Maximum borrowing capacity | $ 15,000,000 | ||||
Cactus LLC and Subsidiaries | ABL Credit Facility | Line of Credit | |||||
Long-term Debt | |||||
Maximum borrowing capacity | $ 80,000,000 | ||||
Additional possible maximum revolving commitment | 50,000,000 | ||||
Maximum possible borrowing capacity | $ 275,000,000 |
Debt - Schedule of Interest (In
Debt - Schedule of Interest (Income) Expense, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |||
Interest under bank facilities | $ 3,818 | $ 268 | $ 313 |
Deferred financing cost amortization | 4,514 | 165 | 168 |
Finance lease interest | 1,110 | 628 | 520 |
Other | 794 | 167 | 126 |
Interest income | (3,756) | (4,942) | (353) |
Interest (income) expense, net | $ 6,480 | $ (3,714) | $ 774 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income (Loss) Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ 241,084 | $ 155,380 | $ 64,139 |
Foreign | 21,292 | 21,172 | 11,006 |
Income before income taxes | $ 262,376 | $ 176,552 | $ 75,145 |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision For Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Current: | |||
Federal | $ 18,354 | $ 0 | $ 0 |
State | 4,040 | 1,231 | 348 |
Foreign | 7,799 | 4,900 | 2,497 |
Total current income taxes | 30,193 | 6,131 | 2,845 |
Deferred: | |||
Federal | 12,925 | 23,945 | 2,658 |
State | 4,249 | 514 | 1,516 |
Foreign | 169 | 840 | 656 |
Total deferred income taxes | 17,343 | 25,299 | 4,830 |
Total provision for income taxes | $ 47,536 | $ 31,430 | $ 7,675 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Income taxes at 21% statutory tax rate | $ 55,094 | $ 37,076 | $ 15,780 |
Net difference resulting from: | |||
Profit of non-controlling interest not subject to U.S. federal tax | (9,951) | (7,339) | (3,754) |
Foreign income taxes (net of foreign tax credit) | 1,918 | 2,104 | 2,423 |
State income taxes (excluding rate change) | 3,999 | 2,910 | 1,348 |
Impact of change in forecasted state income tax rate | 4,906 | (1,739) | 1,347 |
Foreign withholding taxes | 1,419 | 1,225 | 730 |
Change in valuation allowance | (12,067) | (1,381) | (8,977) |
Adjustments of prior year taxes | 480 | (120) | 79 |
Stock compensation | (1,193) | (1,743) | (1,096) |
Nondeductible expenses associated with acquisition | 3,951 | 0 | 0 |
Other | (1,020) | 437 | (205) |
Total provision for income taxes | $ 47,536 | $ 31,430 | $ 7,675 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 12 Months Ended | |||
Feb. 12, 2018 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Operating Loss | ||||
Effective tax rate | 18.10% | 17.80% | 10.20% | |
Liability related to TRA | $ 270,900,000 | |||
Tax savings payable to TRA holders, percent | 85% | 85% | ||
Tax benefit for release of valuation allowance | $ 12,067,000 | $ 1,381,000 | $ 8,977,000 | |
Tax expense associated with revaluation of deferred tax asset | 4,300,000 | |||
Tax benefit | (47,536,000) | (31,430,000) | $ (7,675,000) | |
Valuation allowance | 6,225,000 | 17,604,000 | ||
Deferred tax asset on deferred interest | 2,500,000 | |||
Uncertain tax positions | 0 | |||
Indemnification receivable from seller | 5,700,000 | |||
US Federal | ||||
Operating Loss | ||||
Net operating losses | 8,300,000 | |||
State | ||||
Operating Loss | ||||
Net operating losses | 600,000 | |||
FlexSteel | ||||
Operating Loss | ||||
Tax benefit for release of valuation allowance | 12,100,000 | |||
Indemnification asset | 5,700,000 | |||
Deferred Tax Asset Investment In Subsidiary | ||||
Operating Loss | ||||
Valuation allowance released | 1,400,000 | |||
Tax benefit | 1,400,000 | |||
Valuation allowance | 12,200,000 | |||
Deferred tax asset | $ 299,300,000 | |||
Deferred Tax Asset, Accrued Foreign taxes and State Credits | ||||
Operating Loss | ||||
Valuation allowance | $ 6,200,000 |
Income Taxes - Schedule of Co_2
Income Taxes - Schedule of Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Income Tax Disclosure [Abstract] | ||
Investment in Cactus Companies (Cactus LLC prior to the CC Reorganization) | $ 179,196 | $ 299,253 |
Imputed interest | 12,740 | 12,982 |
Tax credits | 7,439 | 6,158 |
Net operating loss and other carryforwards | 11,343 | 855 |
Other | 359 | 0 |
Deferred tax assets | 211,077 | 319,248 |
Valuation allowance | (6,225) | (17,604) |
Deferred tax asset, net | 204,852 | 301,644 |
Foreign withholding taxes | 1,350 | 1,323 |
Other | 2,239 | 643 |
Deferred tax liability, net | $ 3,589 | $ 1,966 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares available for grant (in shares) | 3 | ||
Employee Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Tax benefit from exercise of stock-based awards | $ 1.2 | $ 1.7 | $ 1.1 |
Employee Stock | LTIP | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 18.1 | $ 10.6 | $ 8.6 |
Restricted Stock Units (RSU) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 3 years | ||
Granted (in dollars per share) | $ 43.19 | $ 55.06 | $ 32.92 |
Fair value of vested | $ 10.1 | $ 14.1 | $ 13.9 |
Unrecognized compensation expense | $ 16.7 | ||
Weighted average period over which unrecognized compensation cost is expected to be recognized | 2 years 3 months 18 days | ||
Performance Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted (in dollars per share) | $ 44.20 | $ 55.02 | $ 32.82 |
Fair value of vested | $ 5.9 | $ 4.8 | $ 0 |
Unrecognized compensation expense | $ 3.5 | ||
Weighted average period over which unrecognized compensation cost is expected to be recognized | 1 year 8 months 12 days | ||
Payout percentage, actual | 200% | 80% | |
Performance Stock Units | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Payout percentage | 0% | ||
Performance Stock Units | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance period | 3 years | ||
Payout percentage | 200% | ||
Performance Shares, Three-Year Performance Period | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Performance period | 3 years |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Restricted Stock Units (Details) - Restricted Stock Units (RSU) - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
No. of RSUs | |||
Nonvested, beginning of period (in shares) | 350 | ||
Granted (in shares) | 484 | ||
Vested (in shares) | (239) | ||
Forfeited (in shares) | (31) | ||
Nonvested, end of period (in shares) | 564 | 350 | |
Weighted Average Grant Date Fair Value ($) | |||
Nonvested restricted stock units, beginning of period (in dollars per share) | $ 36.27 | ||
Granted (in dollars per share) | 43.19 | $ 55.06 | $ 32.92 |
Vested (in dollars per share) | 31.57 | ||
Forfeited (in dollars per share) | 44.43 | ||
Nonvested restricted stock units, end of period (in dollars per share) | $ 43.75 | $ 36.27 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Performance Stock Units (Details) - Performance Stock Units - $ / shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Payout percentage, assumption | 100% | ||
No. of PSUs | |||
Nonvested, beginning of period (in shares) | 128 | ||
Granted (in shares) | 149 | ||
Vested (in shares) | (131) | ||
Forfeited (in shares) | (35) | ||
Performance adjustment (in shares) | 65 | ||
Nonvested, end of period (in shares) | 176 | 128 | |
Weighted Average Grant Date Fair Value ($) | |||
Nonvested restricted stock units, beginning of period (in dollars per share) | $ 43.63 | ||
Granted (in dollars per share) | 44.20 | $ 55.02 | $ 32.82 |
Vested (in dollars per share) | 32.82 | ||
Forfeited (in dollars per share) | 45.78 | ||
Performance adjustment (in dollars per share) | 32.82 | ||
Nonvested restricted stock units, end of period (in dollars per share) | $ 47.71 | $ 43.63 | |
Performance target | 200% | ||
Performance period | 3 years |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | |||
Deferred revenue | $ 8.1 | $ 1.5 | |
Product revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue, percent | 74% | 66% | 64% |
Rental revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue, percent | 10% | 14% | 14% |
Field service and other revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue, percent | 16% | 20% | 22% |
Revenue - Summary of Revenues D
Revenue - Summary of Revenues Disaggregated by Category (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | |||
Total revenues | $ 1,096,960 | $ 688,369 | $ 438,589 |
Product revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 810,379 | 452,615 | 280,907 |
Rental revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 113,631 | 100,453 | 61,629 |
Field service and other revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | $ 172,950 | $ 135,301 | $ 96,053 |
Leases - Narrative (Details)
Leases - Narrative (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Length of potential lease renewal for operating leases | 1 year |
Short-term rental periods for equipment | 1 month |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Length of potential lease renewal for operating leases | 10 years |
Short-term rental periods for equipment | 3 months |
Lessor, term of contract | 3 months |
Leases - Summary of Components
Leases - Summary of Components of Operating and Finance Lease Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Operating and finance lease costs | |||
Amortization of right-of-use assets | $ 7,307 | $ 5,516 | |
Interest expense | 1,110 | 628 | $ 520 |
Operating lease cost | 6,123 | 6,564 | |
Short-term lease cost | 4,175 | 1,515 | |
Sublease income | (396) | (353) | |
Total lease cost | $ 18,319 | $ 13,870 |
Leases - Summary of Supplementa
Leases - Summary of Supplemental Cash Flow (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows from finance leases | $ 1,110 | $ 628 | |
Operating cash flows from operating leases | 6,143 | 6,524 | |
Financing cash flows from finance leases | 7,652 | 6,055 | $ 5,205 |
Total | 14,905 | 13,207 | |
Right-of-use assets obtained in exchange for new lease obligations: | |||
Operating leases | 6,361 | 6,565 | |
Finance leases | 11,159 | 7,941 | |
Total | $ 17,520 | $ 14,506 |
Leases - Summary of Future Leas
Leases - Summary of Future Lease Payments (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Operating | |
2024 | $ 5,133 |
2025 | 4,709 |
2026 | 4,041 |
2027 | 3,666 |
2028 | 3,251 |
Thereafter | 5,941 |
Total undiscounted lease payments | 26,741 |
Less: effects of discounting | (3,400) |
Present value of lease payments | 23,341 |
Finance | |
2024 | 8,529 |
2025 | 5,615 |
2026 | 4,931 |
2027 | 60 |
2028 | 0 |
Thereafter | 0 |
Total undiscounted lease payments | 19,135 |
Less: effects of discounting | (2,503) |
Present value of lease payments | $ 16,632 |
Leases - Quantitative Informati
Leases - Quantitative Information (Details) | Dec. 31, 2023 | Dec. 31, 2022 |
Weighted average remaining lease term: | ||
Finance leases | 1 year 10 months 24 days | 2 years |
Operating leases | 6 years 1 month 6 days | 6 years 6 months |
Weighted average discount rate | ||
Finance leases | 16.28% | 11.97% |
Operating leases | 3.59% | 2.96% |
Tax Receivable Agreement (Detai
Tax Receivable Agreement (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Feb. 12, 2018 | Dec. 31, 2023 | Dec. 31, 2022 | |
Tax Receivable Agreement | |||
Tax savings payable to TRA holders, percent | 85% | 85% | |
Tax savings benefit recorded as APIC percent | 15% | ||
Total TRA liability | $ 270,900 | ||
Current portion of liability related to tax receivable agreement | $ 20,855 | $ 27,544 |
Equity - Narrative (Details)
Equity - Narrative (Details) - USD ($) | 1 Months Ended | 12 Months Ended | 71 Months Ended | |||||||
Sep. 13, 2021 | Jun. 17, 2021 | Mar. 12, 2021 | Mar. 09, 2021 | Jan. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2023 | Jun. 06, 2023 | |
Equity | ||||||||||
Issuances of common stock | $ 169,878,000 | |||||||||
Net proceeds from the issuance of Class A common stock | $ 169,878,000 | $ 0 | $ 0 | |||||||
Cash dividend declared (in dollars per share) | $ 0.46 | $ 0.44 | $ 0.38 | |||||||
Share repurchases | $ 327,000 | |||||||||
Share Repurchase Program | ||||||||||
Equity | ||||||||||
Authorized amount of stock repurchase | $ 150,000,000 | |||||||||
Key Employee | FlexSteel | ||||||||||
Equity | ||||||||||
Issuances of common stock (in shares) | 128,150 | |||||||||
Issuances of common stock | $ 6,500,000 | |||||||||
Vesting period | 1 year | |||||||||
Additional Paid-In Capital | ||||||||||
Equity | ||||||||||
Costs associated with stock issuance | $ 2,200,000 | |||||||||
Issuances of common stock | $ 143,722,000 | |||||||||
Share repurchases | $ 286,000 | |||||||||
Common Stock | Share Repurchase Program | ||||||||||
Equity | ||||||||||
Common stock purchased and retired (in shares) | 8,232 | |||||||||
Share repurchases | $ 300,000 | |||||||||
Average stock repurchased price (in dollars per share) | $ 39.78 | |||||||||
Common stock authorized repurchase amount | $ 149,700,000 | $ 149,700,000 | ||||||||
2021 Secondary Offering | Other income (expense) | ||||||||||
Equity | ||||||||||
Net proceeds from the issuance of Class A common stock | $ 0 | |||||||||
Secondary Offering | Other income (expense) | ||||||||||
Equity | ||||||||||
Offering expense | $ 400,000 | |||||||||
Class A Common Stock | ||||||||||
Equity | ||||||||||
Common stock, shares outstanding (in shares) | 65,409,000 | 60,903,000 | 65,409,000 | |||||||
Voting power of shares outstanding as a percent of the total shares outstanding | 82.30% | |||||||||
Number of shares canceled (in shares) | 900,000 | 1,700,000 | 700,000 | |||||||
Dividends declared | $ 30,300,000 | $ 26,900,000 | $ 21,200,000 | |||||||
Dividend paid | $ 30,100,000 | $ 26,700,000 | $ 21,200,000 | |||||||
Class A Common Stock | Common Stock | ||||||||||
Equity | ||||||||||
Issuances of common stock (in shares) | 3,352,000 | |||||||||
Issuances of common stock | $ 34,000 | |||||||||
Class A Common Stock | Additional Offering | ||||||||||
Equity | ||||||||||
Effect of Follow-on Offering and CW Unit redemptions (in shares) | 3,224,300 | |||||||||
Price per share (in dollars per share) | $ 51.36 | |||||||||
Proceeds form issuance of stock | $ 165,600,000 | |||||||||
Underwriting discounts | $ 6,900,000 | |||||||||
Class A Common Stock | CC Units Redeemed For Class Common Stock | ||||||||||
Equity | ||||||||||
Redemption ratio per unit (in shares) | 1 | 1 | ||||||||
Shares subject to conversion rate adjustments (in shares) | 1 | 1 | ||||||||
Class A Common Stock | Cw Units Redeemed For Class Common Stock | ||||||||||
Equity | ||||||||||
CW redemptions (in shares) | 46,500,000 | |||||||||
Class A Common Stock | 2021 Secondary Offering | ||||||||||
Equity | ||||||||||
Price per share (in dollars per share) | $ 30.555 | |||||||||
Issuances of common stock (in shares) | 6,325,000 | |||||||||
CW redemptions (in shares) | 6,272,500 | |||||||||
Number of shares sold by certain other selling stockholders (in shares) | 52,500 | |||||||||
Class B Common Stock | ||||||||||
Equity | ||||||||||
Common stock, shares outstanding (in shares) | 14,034,000 | 14,978,000 | 14,034,000 | |||||||
Voting power of shares outstanding as a percent of the total shares outstanding | 17.70% | |||||||||
Class B Common Stock | CW Unit Holder Redemption | ||||||||||
Equity | ||||||||||
Issuances of common stock (in shares) | 900,000 | 1,700,000 | 700,000 | |||||||
Cactus LLC | ||||||||||
Equity | ||||||||||
Ownership percentage | 82.30% | 80.30% | ||||||||
Cactus Companies | Class B Common Stock | ||||||||||
Equity | ||||||||||
Shares owned per units held (in shares) | 1 | 1 | ||||||||
Cactus LLC and Subsidiaries | ||||||||||
Equity | ||||||||||
Increase to equity in non-controlling interest | $ 12,800,000 | $ 13,700,000 | $ 79,400,000 | |||||||
Cadent | Cw Unit Holders Other Than Cactus Inc | ||||||||||
Equity | ||||||||||
CW redemptions (in shares) | 715,215 | 3,300,000 | ||||||||
Net proceeds from the issuance of Class A common stock | $ 0 | |||||||||
Common units transferred (in shares) | 228,878 | 944,093 | ||||||||
Cadent | Class A Common Stock | Cw Unit Holders Other Than Cactus Inc | ||||||||||
Equity | ||||||||||
Issuances of common stock (in shares) | 715,215 | 3,300,000 |
Equity - Schedule of CW Units H
Equity - Schedule of CW Units Held by Legacy CW Unit Holders (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
CW Units held by legacy CW Unit Holders, beginning balance (in shares) | 14,978 | 16,674 | 27,655 |
CW Units held by legacy CW Unit Holders, ending balance (in shares) | 14,034 | 14,978 | 16,674 |
Other CW Unit redemptions | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
CW unit redemptions (in shares) | (944) | (1,696) | (701) |
2021 Secondary Offering | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
CW unit redemptions (in shares) | (6,273) | ||
Cadent redemption in June 2021 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
CW unit redemptions (in shares) | (3,292) | ||
Cadent redemption in September 2021 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
CW unit redemptions (in shares) | (715) |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 12 Months Ended | |||
Feb. 12, 2018 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | ||||
Accounts payable | $ 71,841,000 | $ 47,776,000 | ||
Tax savings payable to TRA holders, percent | 85% | 85% | ||
Total TRA liability | $ 270,900,000 | |||
Related Party | ||||
Related Party Transaction [Line Items] | ||||
Hourly base rental payment for aircraft | 2,500 | $ 1,750 | ||
Expenses under related party agreements | 300,000 | 200,000 | ||
Accounts payable | $ 100,000 | 100,000 | ||
Tax savings payable to TRA holders, percent | 85% | |||
Total TRA liability | $ 270,900,000 | |||
Due from TRA holders | 300,000 | 100,000 | ||
Related Party | Maximum | ||||
Related Party Transaction [Line Items] | ||||
Daily revenue from use of pilots | 2,350 | |||
Subsidiaries | ||||
Related Party Transaction [Line Items] | ||||
Distribution received from subsidiary | 75,800,000 | 38,600,000 | 30,600,000 | |
Distributions to LLC members made by subsidiary | $ 16,600,000 | $ 9,700,000 | $ 9,700,000 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Long-term debt | $ 0 | $ 0 |
Level 2 | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Foreign currency forwards | $ 100,000 | $ 100,000 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Liabilities Measured at Fair Value (Details) - Earn-out liability - Fair Value, Recurring $ in Thousands | Dec. 31, 2023 USD ($) |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Liabilities | $ 20,810 |
Level 1 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Liabilities | 0 |
Level 2 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Liabilities | 0 |
Level 3 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Liabilities | $ 20,810 |
Fair Value Measurements - Sum_2
Fair Value Measurements - Summary of Significant Assumptions to Determine Fair Value (Details) - Earn-out liability | Dec. 31, 2023 |
Risk-free interest rate | Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement inputs | 0.0540 |
Risk-free interest rate | Maximum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement inputs | 0.0563 |
Expected revenue volatility | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement inputs | 0.2170 |
Revenue discount rate | Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement inputs | 0.1002 |
Revenue discount rate | Maximum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement inputs | 0.1023 |
Credit discount rate | Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement inputs | 0.0985 |
Fair Value Measurements - Sum_3
Fair Value Measurements - Summary of Changes in Fair Value (Details) - Level 3 - Earn-out liability $ in Thousands | 10 Months Ended |
Dec. 31, 2023 USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Opening balance at February 28, 2023 | $ 5,960 |
Changes in fair value | 14,850 |
Balance at December 31, 2023 | $ 20,810 |
Segment Reporting - Narrative (
Segment Reporting - Narrative (Details) - segment | 2 Months Ended | 10 Months Ended | 12 Months Ended | ||
Feb. 27, 2023 | Dec. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | |||||
Number of operating segments | 1 | 2 | |||
Revenue Benchmark | Geographic Concentration Risk | United States | |||||
Segment Reporting Information [Line Items] | |||||
Concentration of risk | 95% | 95% | 95% | ||
Tangible Long Lived Assets | Geographic Concentration Risk | United States | |||||
Segment Reporting Information [Line Items] | |||||
Concentration of risk | 90% | 90% | 90% |
Segment Reporting - Summarized
Segment Reporting - Summarized Financial Information by Segment (Details) - USD ($) $ in Thousands | 10 Months Ended | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | ||||
Total revenues | $ 1,096,960 | $ 688,369 | $ 438,589 | |
Total operating income | 264,366 | 174,748 | 75,427 | |
Interest income (expense), net | (6,480) | 3,714 | (774) | |
Other income (expense), net | 4,490 | (1,910) | 492 | |
Income before income taxes | 262,376 | 176,552 | 75,145 | |
Level 3 | ||||
Segment Reporting Information [Line Items] | ||||
Inventory Step Up Expense | $ 23,500 | 23,500 | ||
Level 3 | Earn-out liability | ||||
Segment Reporting Information [Line Items] | ||||
Changes in fair value | $ 14,850 | |||
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total operating income | 299,106 | 202,650 | 91,579 | |
Corporate and other | ||||
Segment Reporting Information [Line Items] | ||||
Total operating income | (34,740) | (27,902) | (16,152) | |
Pressure Control | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 756,727 | 688,369 | 438,589 | |
Pressure Control | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total operating income | 236,934 | 202,650 | 91,579 | |
Spoolable Technologies | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 340,233 | 0 | 0 | |
Spoolable Technologies | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total operating income | $ 62,172 | $ 0 | $ 0 |
Segment Reporting - Summarize_2
Segment Reporting - Summarized Additional Financial Information by Segment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | $ 65,045 | $ 34,124 | $ 36,308 |
Total capital expenditures | 43,977 | 28,291 | 13,939 |
Total assets | 1,522,561 | 1,118,896 | 982,078 |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Total assets | 1,150,894 | 447,937 | 353,757 |
Corporate and other | |||
Segment Reporting Information [Line Items] | |||
Total assets | 371,667 | 670,959 | 628,321 |
Pressure Control | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | 30,898 | 34,124 | 36,308 |
Total capital expenditures | 40,940 | 28,291 | 13,939 |
Pressure Control | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Total assets | 437,887 | 447,937 | 353,757 |
Spoolable Technologies | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | 34,147 | 0 | 0 |
Total capital expenditures | 3,037 | 0 | 0 |
Spoolable Technologies | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Total assets | $ 713,007 | $ 0 | $ 0 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Numerator: | |||
Net income attributable to Cactus Inc. | $ 169,171 | $ 110,174 | $ 49,593 |
Net income attributable to non-controlling interest | 35,075 | 27,235 | 13,744 |
Net income attributable to Cactus Inc. - diluted | $ 204,246 | $ 137,409 | $ 63,337 |
Denominator: | |||
Effect of dilutive shares (in shares) | 14,819 | 16,014 | 20,709 |
Corporate effective interest rate, if-converted method | 26% | 25% | 27% |
Class A Common Stock | |||
Denominator: | |||
Weighted average Class A Shares Outstanding - basic (in shares) | 64,641 | 60,323 | 55,398 |
Weighted average Class A shares outstanding - diluted (in shares) | 79,460 | 76,337 | 76,107 |
Earnings per Class A share - basic (in dollars per share) | $ 2.62 | $ 1.83 | $ 0.90 |
Earnings per Class A share - diluted (in dollars per share) | $ 2.57 | $ 1.80 | $ 0.83 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information - Schedule of Non Cash Activities (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Supplemental Cash Flow Elements [Abstract] | |||
Right-of-use assets obtained in exchange for new lease obligations | $ 17,520 | $ 14,506 | $ 15,283 |
Property and equipment in accounts payable | 1,997 | 1,369 | 405 |
Cash paid for interest | 5,629 | 1,063 | 959 |
Cash paid for income taxes, net | $ 25,998 | $ 5,502 | $ 4,542 |
Supplemental Cash Flow Inform_4
Supplemental Cash Flow Information - Narrative (Details) - shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Class A Common Stock | |||
Class of Stock [Line Items] | |||
Shares issued in noncash transaction (in shares) | 0.9 | 1.7 | 11 |