ProFrac Holding Corp. Reports 2022 Third Quarter Financial and Operational Results
WILLOW PARK, Texas, Nov. 10, 2022 /PRNewswire/ -- ProFrac Holding Corp. (NASDAQ: ACDC) ("ProFrac", "ACDC," or the "Company") today announced financial and operational results for its third quarter ended September 30, 2022.
Third Quarter 2022 Results and Recent Highlights
- Total revenue grew approximately 18% sequentially to $696.7 million over 2022 second quarter revenue,
- Net income rose approximately 105% sequentially to $143.4 million
- Adjusted EBITDA(1) excluding Flotek increased approximately 23% sequentially to $267.2 million
- Annualized Adjusted EBITDA per fleet(2) excluding Flotek was $34.5 million on 31 average active fleets during the quarter
- Third quarter results include the consolidation of Flotek results which contributed $46.9 million in revenue and ($11.1) million in Adjusted EBITDA
- Subsequent to the third quarter, the Company closed on its acquisition of U.S. Well Services ("USWS") on November 1, 2022
Matt Wilks, ProFrac's Executive Chairman, stated, "We are proud to report that we grew sequential revenue by 18% and drove sequential Adjusted EBITDA up 23% in the third quarter. Our annualized Adjusted EBITDA per fleet continued to grow, supporting the ongoing investment in our equipment and developing next generation equipment. These third quarter results demonstrate our Company's commitment and hard work that have produced strong operational efficiencies and financial growth as we continue to scale the business. We are bullish on the future of our industry and even more so, on ProFrac, as we continue to execute our Acquire-Retire-Replace(TM) and vertical integration strategies."
Ladd Wilks, Chief Executive Officer, added, "I am excited to welcome the U.S. Well Services team onboard as ProFrac continues to lead our industry in reducing emissions and reducing our customers' carbon footprints in support of their ESG initiatives. We believe our employees and assets are the best in the industry, and we are laser-focused on three critical factors that are driving our industry leading results: pricing, utilization, and our ability to control the supply chain. Constructive market dynamics are supporting pricing and utilization. In addition, our unique ability to manage the complicated supply chain as a single provider represents the greatest opportunity for us to enhance profitability through more efficiently providing sand, chemicals, storage and logistics for our customers. During the third quarter, we made great progress expanding the number of fleets that are bundling materials."
Third Quarter 2022 Financial Results
For the third quarter of 2022, consolidated revenues totaled $696.7 million, or approximately $90 million per fleet on an annualized basis. The increase was driven by higher average pricing, higher material sales, and higher activity levels achieved with our fleets.
Selling, general, and administrative costs were $70.3 million, including $12.9 million of stock-based compensation, $9.7 million related to Flotek, and $5.8 million in transaction related expenses.
Net income for the third quarter totaled $143.4 million, or $1.09 per Class A share. Excluding the operating results attributable to Flotek, Net income totaled $155.9 million.
Adjusted EBITDA totaled $256.1 million in the third quarter, or $33.0 million per fleet on an annualized basis. Excluding the operating results attributable to Flotek, Adjusted EBITDA totaled $267.2 million, or $34.5 million per fleet on an annualized basis.
Operating cash flow was $172.2 million, which included approximately $57.0 million in working capital build during the quarter from the increased activity and profitability levels.
The Company's average active fleet count for the second quarter was 31 fleets.
Outlook
The Company fully deployed its first electric fleet during the fourth quarter and added 7 active fleets from the USWS acquisition. The Company expects to finish the year with approximately 39 active fleets, with additional fleets under construction expected to be activated in early 2023.
Adjusted EBITDA per fleet is likely to fluctuate while we work to improve profitability on the newly acquired fleets, however the Company expects improvement in revenue for the fourth quarter as compared to the third quarter, driven by the USWS acquisition.
Business Segment Information
The Stimulation Services segment generated revenues in the third quarter of 2022 of $668.6 million, which resulted in $249.6 million of Adjusted EBITDA.
The Manufacturing segment generated revenues of $48.7 million in the third quarter of 2022, which resulted in $8.4 million of Adjusted EBITDA. Approximately 95% of the Manufacturing segment's revenue was intercompany.
The Proppant Production segment generated revenues of $24.6 million in the third quarter of 2022, which resulted in $9.2 million of Adjusted EBITDA. Approximately 56% of the Proppant Production segment's revenue was intercompany.
Our other business activities generated revenues of $46.9 million in the third quarter of 2022, which resulted in $(11.1) million of Adjusted EBITDA. The other business activities solely relate to the results of Flotek Industries, Inc. ("Flotek").
Capital Expenditures and Capital Allocation
Capital expenditures were $123.4 million for the third quarter excluding acquisition related expenditures. Approximately 75% of the third quarter capital expenditures related to growth initiatives.
The Company expects full year capex to range between $330 million to $350 million, of which approximately 30% is considered maintenance. The increase to our capital budget primarily represents an acceleration of a number of growth-related initiatives to improve our pumping hours and our profit generating potential. We continued accelerating our engine upgrade program as the year progressed converting more Tier 2 engines to Tier 4 DGB engines and expect the full year cost for this initiative to be approximately $50 million. We expect the construction of our three electric fleets to cost approximately $75 million and the construction of our Lamesa sand plant to cost approximately $45 million. We are also investing approximately $30 million in reducing the number of fleets waiting for maintenance and establishing a robust swing program to allow for equipment to be returned to service quicker and ensure our equipment continues to pump more hours per month.
Balance Sheet and Liquidity
Total gross debt outstanding as of September 30, 2022 was $568.0 million, $18.6 million of which was attributable to Flotek. Gross debt outstanding excluding amounts attributable to Flotek was $549.4 million, compared to $477.5 million as of June 30, 2022.
Total cash and cash equivalents as of September 30, 2022, was $64.7 million, $8.5 million of which was attributable to Flotek. Cash and cash equivalents excluding amounts attributable to Flotek was $56.2 million, compared to $40.6 million as of June 30, 2022.
As of September 30, 2022, and excluding amounts attributable to Flotek, the Company had $245.7 million of liquidity, including $56.2 million in cash and cash equivalents and net availability of $189.5 million under its asset-based credit facility.
In connection with the USWS acquisition, we issued 12.9 million shares of Class A common stock and used approximately $210 million of cash (net of cash acquired) for the retirement of $170 million in USWS debt and other transaction related fees. This cash was primarily funded through our previously undrawn ABL facility, which had an outstanding balance of $163 million on October 31, 2022.
Footnotes
(1) Adjusted EBITDA is a financial measure not presented in accordance with generally accepted accounting principles ("GAAP") (a "Non-GAAP Financial Measure"). Please see "Non-GAAP Financial Measures" at the end of this news release.
(2) Adjusted EBITDA per fleet is a Non-GAAP Financial Measure. Please see "Non-GAAP Financial Measures" at the end of this news release.
Conference Call
ProFrac has scheduled a conference call on Friday, November 11, 2022 at 11:00 a.m. Eastern time / 10:00 a.m. Central time. Please dial 412-902-0030 and ask for the ProFrac Holding Corp. call at least 10 minutes prior to the start time of the call, or listen to the call live over the Internet by logging on to the website at the address https://ir.pfholdingscorp.com/news-events/ir-calendar. A telephonic replay of the conference call will be available through November 18, 2022 and may be accessed by calling 201-612-7415 using passcode 13733023#. A webcast archive will also be available at the link above shortly after the call and will be accessible for approximately 90 days.
About ProFrac Holding Corp.
ProFrac Holding Corp. is a growth-oriented, vertically integrated and innovation-driven energy services company providing hydraulic fracturing, completion services and other complementary products and services to leading upstream oil and gas companies engaged in the exploration and production ("E&P") of North American unconventional oil and natural gas resources. Founded in 2016, The Company was built to be the go-to service provider for E&P companies' most demanding hydraulic fracturing needs. ProFrac is focused on employing new technologies to significantly reduce "greenhouse gas" emissions and increase efficiency in what has historically been an emissions-intensive component of the unconventional E&P development process. For more information, please visit the Company's website, https://www.pfholdingscorp.com.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements in this press release may be considered "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. In some cases, the reader can identify forward-looking statements by words such as "may," "should," "expect," "intend," "will," "estimate," "anticipate," "believe," "predict," or similar words. Forward-looking statements relate to future events or the Company's future financial or operating performance. These forward-looking statements include, among other things, statements regarding: the Company's strategies and plans for growth; the Company's positioning, resources, capabilities, and expectations for future performance; market and industry expectations; the anticipated benefits of the Company's July 2022 acquisition of SPS Monahans and November 2022 acquisition of U.S. Well Services, Inc.; the Company's estimates with respect to the profitability and utilization of its electric, conventional and dual fleets; the Company's currently expected guidance regarding its fourth quarter 2022 results of operations; the Company's currently expected guidance regarding its full year 2022 capital expenditures and capital allocation; statements regarding the availability of funds under the Company's credit facilities; the Company's anticipated timing for operationalizing its new electric fleets and its West Munger sand plant; the amount of capital available to the Company in future periods; any financial or other information based upon or otherwise incorporating judgments or estimates relating to future performance, events or expectations; any estimates and forecasts of financial and other performance metrics; and the Company's outlook and financial and other guidance. Such forward-looking statements are based upon assumptions made by the Company as of the date hereof and are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: the ability to achieve the anticipated benefits of the acquisitions of U.S. Well Services, Inc. and SPS Monahans, including risks relating to integrating acquired companies and personnel; the failure to operationalize the Company's new electric fleets and West Munger sand plant in a timely manner or at all; the Company's ability to deploy capital in a manner that furthers the Company's growth strategy, as well as the Company's general ability to execute its business plans; industry conditions, including fluctuations in supply, demand and prices for the Company's products and services; global and regional economic and financial conditions; the effectiveness of the Company's risk management strategies; the transition to becoming a public company; and other risks and uncertainties set forth in the sections entitled "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements" in the Company's filings with the Securities and Exchange Commission ("SEC"), which are available on the SEC's website at www.sec.gov.
Forward-looking statements are also subject to the risks and other issues described below under "Non-GAAP Financial Measures," which could cause actual results to differ materially from current expectations included in the Company's forward-looking statements included in this press release. Nothing in this press release should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward looking statements will be achieved, including without limitation any expectations about the Company's operational and financial performance or achievements through and including 2022. There may be additional risks about which the Company is presently unaware or that the Company currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. The reader should not place undue reliance on forward-looking statements, which speak only as of the date they are made. The Company anticipates that subsequent events and developments will cause its assessments to change. However, while the Company may elect to update these forward-looking statements at some point in the future, it expressly disclaims any duty to update these forward-looking statements, except as otherwise required by law.
Non-GAAP Financial Measures
Adjusted EBITDA and Adjusted EBITDA per fleet are non-GAAP financial measures and should not be considered as substitutes for net income (loss) or any other performance measure derived in accordance with GAAP or as an alternative to net cash provided by operating activities as a measure of our profitability or liquidity. Adjusted EBITDA and Adjusted EBITDA per fleet are supplemental measures utilized by our management and other users of our financial statements such as investors, commercial banks, research analysts and others, to assess our financial performance because they allow us to compare our operating performance on a consistent basis across periods by removing the effects of our capital structure (such as varying levels of interest expense), asset base (such as depreciation and amortization) and items outside the control of our management team (such as income tax rates).
We view Adjusted EBITDA and Adjusted EBITDA per fleet as important indicators of performance. We define Adjusted EBITDA as our net income (loss), before (i) interest expense, net, (ii) income tax provision, (iii) depreciation, depletion and amortization, (iv) loss on disposal of assets and (v) other unusual or non-recurring charges, such as costs and stock compensation expense related to our initial public offering, non-recurring supply commitment charges, certain bad debt expense and gain on extinguishment of debt. We define Adjusted EBITDA per fleet for a particular period as Adjusted EBITDA calculated as a daily average of active fleets during period.
We believe that our presentation of Adjusted EBITDA and Adjusted EBITDA per fleet will provide useful information to investors in assessing our financial condition and results of operations. In particular, we believe Adjusted EBITDA per fleet allows investors to compare the performance of our fleets across comparable periods and against the fleets of our competitors who may have different capital structures, which may make a fleet-for-fleet comparison more difficult. Net income (loss) is the GAAP measure most directly comparable to Adjusted EBITDA, and net income (loss) per fleet is the GAAP measure most directly comparable to Adjusted EBITDA per fleet. Adjusted EBITDA should not be considered as an alternative to net income (loss), and Adjusted EBITDA per fleet should not be considered as an alternative to net income (loss) per fleet. Adjusted EBITDA and Adjusted EBITDA per fleet have important limitations as analytical tools because they exclude some but not all items that affect the most directly comparable GAAP financial measure. Because Adjusted EBITDA and Adjusted EBITDA per fleet may be defined differently by other companies in our industry, our definition of these non-GAAP financial measures may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.
The presentation of non-GAAP financial measures is not intended to be a substitute for, and should not be considered in isolation from, the financial measures reported in accordance with GAAP. The following tables present a reconciliation of the non-GAAP financial measures of Adjusted EBITDA and Adjusted EBITDA per fleet to the most directly comparable GAAP financial measure for the periods indicated.
-Tables to Follow-
ProFrac Holding Corp. (NasdaqGS: ACDC)
Consolidated Statements of Operations
Three Months Ended
Nine Months Ended
Sep. 30
Jun. 30
Sep. 30
Jun. 30
Sep. 30
Sep. 30
(In thousands)
2022
2022
2021
2021
2022
2021
Revenues
$
696,730
$
589,844
$
195,931
$
174,819
$
1,631,554
$
520,336
Operating costs and expenses:
Costs of revenues, exclusive of depreciation, depletion and amortization
388,068
340,600
144,163
126,708
961,267
389,177
Depreciation, depletion and amortization
68,758
64,064
35,241
34,904
177,038
105,606
Loss on disposal of assets, net
667
2,143
3,397
1,868
2,656
7,472
Selling, general and administrative
70,287
87,548
20,047
14,094
191,962
47,919
Total operating costs and expenses
527,780
494,355
202,848
177,574
1,332,923
550,174
Operating income (loss)
168,950
95,489
(6,917)
(2,755)
298,631
(29,838)
Other (expense) income:
Interest expense, net
(16,261)
(13,451)
(6,896)
(6,187)
(38,984)
(19,118)
Loss on extinguishment of debt
(242)
(8,822)
-
-
(17,337)
-
Other expense (income), net
(928)
989
(92)
53
8,292
148
Total other expense
(17,431)
(21,284)
(6,988)
(6,134)
(48,029)
(18,970)
Income (loss) before income tax provision
151,519
74,205
(13,905)
(8,889)
250,602
(48,808)
Income tax (provision) benefit
(8,157)
(4,112)
(170)
283
(13,021)
138
Net income (loss)
$
143,362
$
70,093
$
(14,075)
$
(8,606)
$
237,581
$
(48,670)
Less: net (income) loss attributable to ProFrac Predecessor
-
(56,157)
14,033
8,478
(79,867)
48,509
Less: net loss attributable to noncontrolling interests
11,751
8,704
42
128
20,039
161
Less: net income attributable to redeemable noncontrolling interests
(110,183)
(16,082)
-
-
(126,265)
-
Net income attributable to ProFrac Holding Corp.
$
44,930
$
6,558
$
-
$
-
$
51,488
$
-
ProFrac Holding Corp. (NasdaqGS: ACDC)
Consolidated Balance Sheet
Sep. 30
Dec. 31
(In thousands)
2022
2021
Assets
Current assets:
Cash and cash equivalents
$
64,678
$
5,376
Accounts receivable, net
501,337
161,632
Accounts receivable - related party
4,510
4,515
Prepaid expenses, and other current assets
25,065
6,213
Assets held for sale
1,805
-
Inventories
238,794
73,942
Total current assets
836,189
251,678
Property, plant, and equipment
1,454,010
827,865
Accumulated depreciation and depletion
(632,801)
(464,178)
Property, plant, and equipment, net
821,209
363,687
Operating lease right-of-use assets
78,569
-
Deferred tax assets
2,033
-
Investments
56,753
4,244
Intangible assets, net
34,930
27,816
Goodwill
97,573
-
Other assets
52,028
17,145
Total assets
1,979,284
664,570
Liabilities, redeemable noncontrolling interest, and stockholders' and members' equity (deficit)
Current liabilities:
Accounts payable
209,537
121,070
Accounts payable - related party
34,911
21,275
Current portion of operating lease liabilities
9,532
-
Accrued expenses
194,321
38,149
Other current liabilities
36,446
34,400
Current portion of long-term debt
60,541
31,793
Total current liabilities
545,288
246,687
Long-term debt
484,228
235,128
Long-term debt - related party
-
34,645
Operating lease liabilities
73,180
-
Other liabilities
17,320
-
Total liabilities
1,120,016
516,460
Redeemable noncontrolling interest
1,644,426
-
Stockholders' and members' equity
-
147,015
Preferred stock
-
-
Class A common stock
412
-
Class B common stock
1,011
-
Additional paid-in capital
-
-
Accumulated deficit
(868,409)
-
Accumulated other comprehensive (loss) income
9
56
Total stockholders' and members' (deficit) equity attributable to ProFrac Holding Corp.
(866,977)
147,071
Noncontrolling interests
81,819
1,039
Total stockholders' and members' (deficit) equity
(785,158)
148,110
Total liabilities, redeemable noncontrolling interest, and stockholders' and members' (deficit) equity
$
1,979,284
$
664,570
ProFrac Holding Corp. (NasdaqGS: ACDC)
Consolidated Statements of Cash Flow
Three Months Ended
Nine Months Ended
Sep. 30
Jun. 30
Sep. 30
Sep. 30
(In thousands)
2022
2022
2022
2021
Cash flows from operating activities:
Net income (loss)
$
143,362
$
70,093
$
237,581
$
(48,670)
Adjustments to reconcile net income to net (loss) cash provided by operating activities:
Depreciation, depletion and amortization
68,758
64,064
177,038
105,606
Stock-based compensation
12,926
40,304
53,230
-
Loss on disposal of assets, net
667
2,143
2,656
7,472
Non-cash loss on extinguishment of debt
242
5,946
10,472
-
Amortization of debt issuance costs
1,954
1,358
4,683
1,847
Bad debt expense, net of recoveries
-
-
5
2,562
Deferred tax expense
1,333
1,024
2,357
-
Unrealized gain on investments, net
-
(426)
(8,526)
-
Changes in operating assets and liabilities:
Accounts receivable
(46,096)
(127,515)
(220,467)
(31,396)
Inventories
(43,269)
(41,024)
(107,150)
(14,525)
Prepaid expenses and other assets
(11,443)
1,545
(18,551)
(1,223)
Accounts payable
19,082
(42,574)
6,332
4,823
Accrued expenses
28,604
60,007
111,233
11,511
Deferred revenues and other liabilities
(3,921)
4,545
5,770
(317)
Net cash provided by operating activities
172,199
39,490
256,663
37,690
Cash flows from investing activities:
Investment in property, plant & equipment
(123,408)
(74,577)
(239,477)
(70,585)
Proceeds from sale of assets
586
479
46,687
17,487
Acquisitions, net of cash acquired
(97,660)
21,723
(354,927)
(2,430)
Investment in preferred shares of BPC
-
-
(47,202)
-
Initial investment in Flotek
-
-
(10,000)
-
Other Investments
(20,946)
-
(24,839)
-
Net cash used in investing activities
(241,428)
(52,375)
(629,758)
(55,528)
Cash flows from financing activities:
Proceeds from issuance of long-term debt
231,198
27,214
818,758
160,230
Repayments of long-term debt
(17,955)
(270,005)
(515,780)
(138,887)
Borrowings from revolving credit agreements
56,450
99,313
253,683
29,500
Repayments to revolving credit agreements
(199,800)
(26,669)
(322,683)
(18,500)
Payment of debt issuance costs
(9,676)
(671)
(33,260)
(1,090)
Member contribution
-
-
5,000
-
Proceeds from issuance of common stock
-
329,118
329,118
-
Payment of THRC related equity
-
(72,931)
(72,931)
-
Payment of common stock issuance costs
-
(27,444)
(27,444)
-
Net cash provided by financing activities
60,217
57,925
434,461
31,253
Net increase in cash, cash equivalents, and restricted cash
$
(9,012)
$
45,040
$
61,366
$
13,415
Cash, cash equivalents, and restricted cash beginning of period
75,754
30,714
5,376
2,952
Cash, cash equivalents, and restricted cash end of period
$
66,742
$
75,754
$
66,742
$
16,367
ProFrac Holding Corp. (NasdaqGS: ACDC)
Reconciliation of Net Income (Loss) to Adjusted Net Income
Three Months Ended
Nine Months Ended
Sep. 30
Jun. 30
Sep. 30
Jun. 30
Sep. 30
Sep. 30
(In thousands)
2022
2022
2021
2021
2022
2021
Net income (loss)
$
143,362
$
70,093
$
(14,075)
$
(8,606)
$
237,581
$
(48,670)
Loss on disposal of assets, net
667
2,143
3,397
1,868
2,656
7,472
Loss on extinguishment of debt
242
8,822
-
-
17,337
-
Litigation
-
4,000
-
-
4,000
-
Stock-based compensation related to deemed contributions
10,207
38,849
-
-
49,056
-
Bad debt expense, net of recoveries
-
-
2,562
-
5
2,562
(Gain) loss on foreign currency transactions
(80)
(58)
116
-
(126)
116
Reorganization costs
-
-
211
-
55
211
Acquisition related expenses
5,806
4,063
-
-
22,888
-
Unrealized gain on investments, net
-
(426)
-
-
(8,526)
-
Adjusted Net Income (loss)
$
160,204
$
127,486
$
(7,789)
$
(6,738)
$
324,926
$
(38,309)
ProFrac Holding Corp. (NasdaqGS: ACDC)
Reconciliation of Net Income (Loss) to Adjusted Net Income excluding Flotek
Three Months Ended
Nine Months Ended
Sep. 30
Jun. 30
Sep. 30
Jun. 30
Sep. 30
Sep. 30
(In thousands)
2022
2022
2021
2021
2022
2021
Net income (loss)
$
143,362
$
70,093
$
(14,075)
$
(8,606)
$
237,581
$
(48,670)
Loss on disposal of assets, net
667
2,143
3,397
1,868
2,656
7,472
Loss on extinguishment of debt
242
8,822
-
-
17,337
-
Litigation
-
4,000
-
-
4,000
-
Stock-based compensation related to deemed contributions
10,207
38,849
-
-
49,056
-
Bad debt expense, net of recoveries
-
-
2,562
-
5
2,562
(Gain) loss on foreign currency transactions
(80)
(58)
116
-
(126)
116
Reorganization costs
-
-
211
-
55
211
Acquisition related expenses
5,806
4,063
-
-
22,888
-
Unrealized gain on investments, net
-
(426)
-
-
(8,526)
-
Adjusted Net Income (loss)
$
160,204
$
127,486
$
(7,789)
$
(6,738)
$
324,926
$
(38,309)
Less: net (income) loss from other business activities
12,497
8,604
-
-
21,101
-
Adjusted Net Income (loss) excluding other business activities
172,701
136,090
(7,789)
(6,738)
346,027
(38,309)
ProFrac Holding Corp. (NasdaqGS: ACDC)
Reconciliation of Net Income (Loss) to Adjusted EBITDA
Three Months Ended
Nine Months Ended
Sep. 30
Jun. 30
Sep. 30
Jun. 30
Sep. 30
Sep. 30
(In thousands)
2022
2022
2021
2021
2022
2021
Net income (loss)
$
143,362
$
70,093
$
(14,075)
$
(8,606)
$
237,581
$
(48,670)
Interest expense, net
16,261
13,451
6,896
6,187
38,984
19,118
Depreciation, depletion and amortization
68,758
64,064
35,241
34,904
177,038
105,606
Income tax provision (benefit)
8,157
4,112
170
(283)
13,021
(138)
Loss on disposal of assets, net
667
2,143
3,397
1,868
2,656
7,472
Loss on extinguishment of debt
242
8,822
-
-
17,337
-
Litigation
-
4,000
-
-
4,000
-
Stock-based compensation
2,719
1,455
-
-
4,174
-
Stock-based compensation related to deemed contributions
10,207
38,849
-
-
49,056
-
Bad debt expense, net of recoveries
-
-
2,562
-
5
2,562
(Gain) loss on foreign currency transactions
(80)
(58)
116
-
(126)
116
Reorganization costs
-
-
211
-
55
211
Acquisition related expenses
5,806
4,063
-
-
22,888
-
Unrealized gain on investments, net
-
(426)
-
-
(8,526)
-
Adjusted EBITDA
$
256,099
$
210,568
$
34,518
$
34,070
$
558,143
$
86,277
ProFrac Holding Corp. (NasdaqGS: ACDC)
Reconciliation of Net Income (Loss) to Pro Forma Adjusted EBITDA excluding Flotek
Three Months Ended
Nine Months Ended
Sep. 30
Jun. 30
Sep. 30
Jun. 30
Sep. 30
Sep. 30
(In thousands except average active fleets and annualization factor)
2022
2022
2021
2021
2022
2021
Net income (loss)
$
143,362
$
70,093
$
(14,075)
$
(8,606)
$
237,581
$
(48,670)
Interest expense, net
16,261
13,451
6,896
6,187
38,984
19,118
Depreciation, depletion and amortization
68,758
64,064
35,241
34,904
177,038
105,606
Income tax provision
8,157
4,112
170
(283)
13,021
(138)
Loss on disposal of assets, net
667
2,143
3,397
1,868
2,656
7,472
Loss on extinguishment of debt
242
8,822
-
-
17,337
-
Litigation
-
4,000
-
-
4,000
-
Stock-based compensation
2,719
1,455
-
-
4,174
-
Stock-based compensation related to deemed contributions
10,207
38,849
-
-
49,056
-
Bad debt expense, net of recoveries
-
-
2,562
-
5
2,562
(Gain) loss on foreign currency transactions
(80)
(58)
116
-
(126)
116
Reorganization costs
-
-
211
-
55
211
Acquisition related expenses
5,806
4,063
-
-
22,888
-
Unrealized gain on investments, net
-
(426)
-
-
(8,526)
-
Total adjusted EBITDA for reportable segments
$
256,099
$
210,568
$
34,518
$
34,070
$
558,143
$
86,277
Less: other business activities operating results
11,072
7,454
-
-
18,526
-
Adjusted EBITDA excluding other business activities
267,171
218,022
34,518
34,070
576,669
86,277
Average active fleets
31.0
31.0
14.7
20.0
27.9
14.9
Adjusted EBITDA excluding other business activities per average active fleet
8,618
7,033
2,348
1,704
20,669
5,790
Annualization factor
4.0
4.0
4.0
4.0
1.3
1.3
Annualized adjusted EBITDA excluding other business activities per average active fleet
$
34,474
$
28,132
$
9,393
$
6,814
$
27,559
$
7,721
ProFrac Holding Corp. (NasdaqGS: ACDC)
Segment Information
Three Months Ended
Nine Months Ended
Sep. 30
Jun. 30
Sep. 30
Jun. 30
Sep. 30
Sep. 30
(In thousands)
2022
2022
2021
2021
2022
2021
Revenues
Stimulation services
$
668,578
$
576,556
$
190,723
$
168,506
$
1,581,289
$
502,932
Manufacturing
48,742
34,854
19,861
16,223
115,602
50,741
Proppant production
24,642
17,531
6,399
7,781
54,581
19,769
Other
46,872
15,359
-
-
62,231
-
Total segments
788,834
644,300
216,983
192,510
1,813,703
573,442
Eliminations
(92,104)
(54,456)
(21,052)
(17,691)
(182,149)
(53,106)
Total revenues
$
696,730
$
589,844
$
195,931
$
174,819
$
1,631,554
$
520,336
Adjusted EBITDA
Stimulation services
$
249,557
$
196,088
$
31,599
$
30,475
$
519,214
$
75,027
Manufacturing
8,416
9,360
502
349
27,798
3,181
Proppant production
9,198
12,574
2,417
3,246
29,657
8,069
Other
(11,072)
(7,454)
-
-
(18,526)
-
Adjusted EBITDA for reportable segments
$
256,099
$
210,568
$
34,518
$
34,070
$
558,143
$
86,277
ProFrac Holding Corp. (NasdaqGS: ACDC)
Net Debt
Sep. 30
Jun. 30
(In thousands)
2022
2022
Current portion of long-term debt
$
60,541
$
51,329
Long-term debt
484,228
427,961
Long-term debt - related party
-
-
Total debt
544,769
479,290
Plus: Unamortized debt issuance costs
23,235
15,755
Total gross debt
568,004
495,045
Less: Cash and cash equivalents
(64,678)
(73,653)
Net debt
$
503,326
$
421,392
ProFrac Holding Corp. (NasdaqGS: ACDC)
Net Debt excluding Other Business Activities
Sep. 30
Jun. 30
(In thousands)
2022
2022
Current portion of long-term debt
$
44,917
$
36,938
Long-term debt
481,265
424,825
Long-term debt - related party
-
-
Total debt
526,182
461,763
Plus: Unamortized debt issuance costs
23,235
15,755
Total gross debt
549,417
477,518
Less: Cash and cash equivalents
(56,170)
(40,569)
Net debt
$
493,247
$
436,949
Contacts:
ProFrac Holding Corp.
Lance Turner – Chief Financial Officer
Dennard Lascar Investor Relations
Ken Dennard / Rick Black
View original content:https://www.prnewswire.com/news-releases/profrac-holding-corp-reports-2022-third-quarter-financial-and-operational-results-301675057.html
SOURCE ProFrac Holding Corp.
WILLOW PARK, Texas, Nov. 10, 2022 /PRNewswire/ -- ProFrac Holding Corp. (NASDAQ: ACDC) ("ProFrac", "ACDC," or the "Company") today announced financial and operational results for its third quarter ended September 30, 2022.
Third Quarter 2022 Results and Recent Highlights
- Total revenue grew approximately 18% sequentially to $696.7 million over 2022 second quarter revenue,
- Net income rose approximately 105% sequentially to $143.4 million
- Adjusted EBITDA(1) excluding Flotek increased approximately 23% sequentially to $267.2 million
- Annualized Adjusted EBITDA per fleet(2) excluding Flotek was $34.5 million on 31 average active fleets during the quarter
- Third quarter results include the consolidation of Flotek results which contributed $46.9 million in revenue and ($11.1) million in Adjusted EBITDA
- Subsequent to the third quarter, the Company closed on its acquisition of U.S. Well Services ("USWS") on November 1, 2022
Matt Wilks, ProFrac's Executive Chairman, stated, "We are proud to report that we grew sequential revenue by 18% and drove sequential Adjusted EBITDA up 23% in the third quarter. Our annualized Adjusted EBITDA per fleet continued to grow, supporting the ongoing investment in our equipment and developing next generation equipment. These third quarter results demonstrate our Company's commitment and hard work that have produced strong operational efficiencies and financial growth as we continue to scale the business. We are bullish on the future of our industry and even more so, on ProFrac, as we continue to execute our Acquire-Retire-Replace(TM) and vertical integration strategies."
Ladd Wilks, Chief Executive Officer, added, "I am excited to welcome the U.S. Well Services team onboard as ProFrac continues to lead our industry in reducing emissions and reducing our customers' carbon footprints in support of their ESG initiatives. We believe our employees and assets are the best in the industry, and we are laser-focused on three critical factors that are driving our industry leading results: pricing, utilization, and our ability to control the supply chain. Constructive market dynamics are supporting pricing and utilization. In addition, our unique ability to manage the complicated supply chain as a single provider represents the greatest opportunity for us to enhance profitability through more efficiently providing sand, chemicals, storage and logistics for our customers. During the third quarter, we made great progress expanding the number of fleets that are bundling materials."
Third Quarter 2022 Financial Results
For the third quarter of 2022, consolidated revenues totaled $696.7 million, or approximately $90 million per fleet on an annualized basis. The increase was driven by higher average pricing, higher material sales, and higher activity levels achieved with our fleets.
Selling, general, and administrative costs were $70.3 million, including $12.9 million of stock-based compensation, $9.7 million related to Flotek, and $5.8 million in transaction related expenses.
Net income for the third quarter totaled $143.4 million, or $1.09 per Class A share. Excluding the operating results attributable to Flotek, Net income totaled $155.9 million.
Adjusted EBITDA totaled $256.1 million in the third quarter, or $33.0 million per fleet on an annualized basis. Excluding the operating results attributable to Flotek, Adjusted EBITDA totaled $267.2 million, or $34.5 million per fleet on an annualized basis.
Operating cash flow was $172.2 million, which included approximately $57.0 million in working capital build during the quarter from the increased activity and profitability levels.
The Company's average active fleet count for the second quarter was 31 fleets.
Outlook
The Company fully deployed its first electric fleet during the fourth quarter and added 7 active fleets from the USWS acquisition. The Company expects to finish the year with approximately 39 active fleets, with additional fleets under construction expected to be activated in early 2023.
Adjusted EBITDA per fleet is likely to fluctuate while we work to improve profitability on the newly acquired fleets, however the Company expects improvement in revenue for the fourth quarter as compared to the third quarter, driven by the USWS acquisition.
Business Segment Information
The Stimulation Services segment generated revenues in the third quarter of 2022 of $668.6 million, which resulted in $249.6 million of Adjusted EBITDA.
The Manufacturing segment generated revenues of $48.7 million in the third quarter of 2022, which resulted in $8.4 million of Adjusted EBITDA. Approximately 95% of the Manufacturing segment's revenue was intercompany.
The Proppant Production segment generated revenues of $24.6 million in the third quarter of 2022, which resulted in $9.2 million of Adjusted EBITDA. Approximately 56% of the Proppant Production segment's revenue was intercompany.
Our other business activities generated revenues of $46.9 million in the third quarter of 2022, which resulted in $(11.1) million of Adjusted EBITDA. The other business activities solely relate to the results of Flotek Industries, Inc. ("Flotek").
Capital Expenditures and Capital Allocation
Capital expenditures were $123.4 million for the third quarter excluding acquisition related expenditures. Approximately 75% of the third quarter capital expenditures related to growth initiatives.
The Company expects full year capex to range between $330 million to $350 million, of which approximately 30% is considered maintenance. The increase to our capital budget primarily represents an acceleration of a number of growth-related initiatives to improve our pumping hours and our profit generating potential. We continued accelerating our engine upgrade program as the year progressed converting more Tier 2 engines to Tier 4 DGB engines and expect the full year cost for this initiative to be approximately $50 million. We expect the construction of our three electric fleets to cost approximately $75 million and the construction of our Lamesa sand plant to cost approximately $45 million. We are also investing approximately $30 million in reducing the number of fleets waiting for maintenance and establishing a robust swing program to allow for equipment to be returned to service quicker and ensure our equipment continues to pump more hours per month.
Balance Sheet and Liquidity
Total gross debt outstanding as of September 30, 2022 was $568.0 million, $18.6 million of which was attributable to Flotek. Gross debt outstanding excluding amounts attributable to Flotek was $549.4 million, compared to $477.5 million as of June 30, 2022.
Total cash and cash equivalents as of September 30, 2022, was $64.7 million, $8.5 million of which was attributable to Flotek. Cash and cash equivalents excluding amounts attributable to Flotek was $56.2 million, compared to $40.6 million as of June 30, 2022.
As of September 30, 2022, and excluding amounts attributable to Flotek, the Company had $245.7 million of liquidity, including $56.2 million in cash and cash equivalents and net availability of $189.5 million under its asset-based credit facility.
In connection with the USWS acquisition, we issued 12.9 million shares of Class A common stock and used approximately $210 million of cash (net of cash acquired) for the retirement of $170 million in USWS debt and other transaction related fees. This cash was primarily funded through our previously undrawn ABL facility, which had an outstanding balance of $163 million on October 31, 2022.
Footnotes
|
(1) Adjusted EBITDA is a financial measure not presented in accordance with generally accepted accounting principles ("GAAP") (a "Non-GAAP Financial Measure"). Please see "Non-GAAP Financial Measures" at the end of this news release. |
|
(2) Adjusted EBITDA per fleet is a Non-GAAP Financial Measure. Please see "Non-GAAP Financial Measures" at the end of this news release. |
Conference Call
ProFrac has scheduled a conference call on Friday, November 11, 2022 at 11:00 a.m. Eastern time / 10:00 a.m. Central time. Please dial 412-902-0030 and ask for the ProFrac Holding Corp. call at least 10 minutes prior to the start time of the call, or listen to the call live over the Internet by logging on to the website at the address https://ir.pfholdingscorp.com/news-events/ir-calendar. A telephonic replay of the conference call will be available through November 18, 2022 and may be accessed by calling 201-612-7415 using passcode 13733023#. A webcast archive will also be available at the link above shortly after the call and will be accessible for approximately 90 days.
About ProFrac Holding Corp.
ProFrac Holding Corp. is a growth-oriented, vertically integrated and innovation-driven energy services company providing hydraulic fracturing, completion services and other complementary products and services to leading upstream oil and gas companies engaged in the exploration and production ("E&P") of North American unconventional oil and natural gas resources. Founded in 2016, The Company was built to be the go-to service provider for E&P companies' most demanding hydraulic fracturing needs. ProFrac is focused on employing new technologies to significantly reduce "greenhouse gas" emissions and increase efficiency in what has historically been an emissions-intensive component of the unconventional E&P development process. For more information, please visit the Company's website, https://www.pfholdingscorp.com.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements in this press release may be considered "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. In some cases, the reader can identify forward-looking statements by words such as "may," "should," "expect," "intend," "will," "estimate," "anticipate," "believe," "predict," or similar words. Forward-looking statements relate to future events or the Company's future financial or operating performance. These forward-looking statements include, among other things, statements regarding: the Company's strategies and plans for growth; the Company's positioning, resources, capabilities, and expectations for future performance; market and industry expectations; the anticipated benefits of the Company's July 2022 acquisition of SPS Monahans and November 2022 acquisition of U.S. Well Services, Inc.; the Company's estimates with respect to the profitability and utilization of its electric, conventional and dual fleets; the Company's currently expected guidance regarding its fourth quarter 2022 results of operations; the Company's currently expected guidance regarding its full year 2022 capital expenditures and capital allocation; statements regarding the availability of funds under the Company's credit facilities; the Company's anticipated timing for operationalizing its new electric fleets and its West Munger sand plant; the amount of capital available to the Company in future periods; any financial or other information based upon or otherwise incorporating judgments or estimates relating to future performance, events or expectations; any estimates and forecasts of financial and other performance metrics; and the Company's outlook and financial and other guidance. Such forward-looking statements are based upon assumptions made by the Company as of the date hereof and are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: the ability to achieve the anticipated benefits of the acquisitions of U.S. Well Services, Inc. and SPS Monahans, including risks relating to integrating acquired companies and personnel; the failure to operationalize the Company's new electric fleets and West Munger sand plant in a timely manner or at all; the Company's ability to deploy capital in a manner that furthers the Company's growth strategy, as well as the Company's general ability to execute its business plans; industry conditions, including fluctuations in supply, demand and prices for the Company's products and services; global and regional economic and financial conditions; the effectiveness of the Company's risk management strategies; the transition to becoming a public company; and other risks and uncertainties set forth in the sections entitled "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements" in the Company's filings with the Securities and Exchange Commission ("SEC"), which are available on the SEC's website at www.sec.gov.
Forward-looking statements are also subject to the risks and other issues described below under "Non-GAAP Financial Measures," which could cause actual results to differ materially from current expectations included in the Company's forward-looking statements included in this press release. Nothing in this press release should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward looking statements will be achieved, including without limitation any expectations about the Company's operational and financial performance or achievements through and including 2022. There may be additional risks about which the Company is presently unaware or that the Company currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. The reader should not place undue reliance on forward-looking statements, which speak only as of the date they are made. The Company anticipates that subsequent events and developments will cause its assessments to change. However, while the Company may elect to update these forward-looking statements at some point in the future, it expressly disclaims any duty to update these forward-looking statements, except as otherwise required by law.
Non-GAAP Financial Measures
Adjusted EBITDA and Adjusted EBITDA per fleet are non-GAAP financial measures and should not be considered as substitutes for net income (loss) or any other performance measure derived in accordance with GAAP or as an alternative to net cash provided by operating activities as a measure of our profitability or liquidity. Adjusted EBITDA and Adjusted EBITDA per fleet are supplemental measures utilized by our management and other users of our financial statements such as investors, commercial banks, research analysts and others, to assess our financial performance because they allow us to compare our operating performance on a consistent basis across periods by removing the effects of our capital structure (such as varying levels of interest expense), asset base (such as depreciation and amortization) and items outside the control of our management team (such as income tax rates).
We view Adjusted EBITDA and Adjusted EBITDA per fleet as important indicators of performance. We define Adjusted EBITDA as our net income (loss), before (i) interest expense, net, (ii) income tax provision, (iii) depreciation, depletion and amortization, (iv) loss on disposal of assets and (v) other unusual or non-recurring charges, such as costs and stock compensation expense related to our initial public offering, non-recurring supply commitment charges, certain bad debt expense and gain on extinguishment of debt. We define Adjusted EBITDA per fleet for a particular period as Adjusted EBITDA calculated as a daily average of active fleets during period.
We believe that our presentation of Adjusted EBITDA and Adjusted EBITDA per fleet will provide useful information to investors in assessing our financial condition and results of operations. In particular, we believe Adjusted EBITDA per fleet allows investors to compare the performance of our fleets across comparable periods and against the fleets of our competitors who may have different capital structures, which may make a fleet-for-fleet comparison more difficult. Net income (loss) is the GAAP measure most directly comparable to Adjusted EBITDA, and net income (loss) per fleet is the GAAP measure most directly comparable to Adjusted EBITDA per fleet. Adjusted EBITDA should not be considered as an alternative to net income (loss), and Adjusted EBITDA per fleet should not be considered as an alternative to net income (loss) per fleet. Adjusted EBITDA and Adjusted EBITDA per fleet have important limitations as analytical tools because they exclude some but not all items that affect the most directly comparable GAAP financial measure. Because Adjusted EBITDA and Adjusted EBITDA per fleet may be defined differently by other companies in our industry, our definition of these non-GAAP financial measures may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.
The presentation of non-GAAP financial measures is not intended to be a substitute for, and should not be considered in isolation from, the financial measures reported in accordance with GAAP. The following tables present a reconciliation of the non-GAAP financial measures of Adjusted EBITDA and Adjusted EBITDA per fleet to the most directly comparable GAAP financial measure for the periods indicated.
-Tables to Follow-
|
ProFrac Holding Corp. (NasdaqGS: ACDC) |
|||||||||||||||||||
|
Consolidated Statements of Operations |
|||||||||||||||||||
|
Three Months Ended |
Nine Months Ended |
||||||||||||||||||
|
Sep. 30 |
Jun. 30 |
Sep. 30 |
Jun. 30 |
Sep. 30 |
Sep. 30 |
||||||||||||||
|
(In thousands) |
2022 |
2022 |
2021 |
2021 |
2022 |
2021 |
|||||||||||||
|
Revenues |
$ |
696,730 |
$ |
589,844 |
$ |
195,931 |
$ |
174,819 |
$ |
1,631,554 |
$ |
520,336 |
|||||||
|
Operating costs and expenses: |
|||||||||||||||||||
|
Costs of revenues, exclusive of depreciation, depletion and amortization |
388,068 |
340,600 |
144,163 |
126,708 |
961,267 |
389,177 |
|||||||||||||
|
Depreciation, depletion and amortization |
68,758 |
64,064 |
35,241 |
34,904 |
177,038 |
105,606 |
|||||||||||||
|
Loss on disposal of assets, net |
667 |
2,143 |
3,397 |
1,868 |
2,656 |
7,472 |
|||||||||||||
|
Selling, general and administrative |
70,287 |
87,548 |
20,047 |
14,094 |
191,962 |
47,919 |
|||||||||||||
|
Total operating costs and expenses |
527,780 |
494,355 |
202,848 |
177,574 |
1,332,923 |
550,174 |
|||||||||||||
|
Operating income (loss) |
168,950 |
95,489 |
(6,917) |
(2,755) |
298,631 |
(29,838) |
|||||||||||||
|
Other (expense) income: |
|||||||||||||||||||
|
Interest expense, net |
(16,261) |
(13,451) |
(6,896) |
(6,187) |
(38,984) |
(19,118) |
|||||||||||||
|
Loss on extinguishment of debt |
(242) |
(8,822) |
- |
- |
(17,337) |
- |
|||||||||||||
|
Other expense (income), net |
(928) |
989 |
(92) |
53 |
8,292 |
148 |
|||||||||||||
|
Total other expense |
(17,431) |
(21,284) |
(6,988) |
(6,134) |
(48,029) |
(18,970) |
|||||||||||||
|
Income (loss) before income tax provision |
151,519 |
74,205 |
(13,905) |
(8,889) |
250,602 |
(48,808) |
|||||||||||||
|
Income tax (provision) benefit |
(8,157) |
(4,112) |
(170) |
283 |
(13,021) |
138 |
|||||||||||||
|
Net income (loss) |
$ |
143,362 |
$ |
70,093 |
$ |
(14,075) |
$ |
(8,606) |
$ |
237,581 |
$ |
(48,670) |
|||||||
|
Less: net (income) loss attributable to ProFrac Predecessor |
- |
(56,157) |
14,033 |
8,478 |
(79,867) |
48,509 |
|||||||||||||
|
Less: net loss attributable to noncontrolling interests |
11,751 |
8,704 |
42 |
128 |
20,039 |
161 |
|||||||||||||
|
Less: net income attributable to redeemable noncontrolling interests |
(110,183) |
(16,082) |
- |
- |
(126,265) |
- |
|||||||||||||
|
Net income attributable to ProFrac Holding Corp. |
$ |
44,930 |
$ |
6,558 |
$ |
- |
$ |
- |
$ |
51,488 |
$ |
- |
|||||||
|
ProFrac Holding Corp. (NasdaqGS: ACDC) |
||||||||
|
Consolidated Balance Sheet |
||||||||
|
Sep. 30 |
Dec. 31 |
|||||||
|
(In thousands) |
2022 |
2021 |
||||||
|
Assets |
||||||||
|
Current assets: |
||||||||
|
Cash and cash equivalents |
$ |
64,678 |
$ |
5,376 |
||||
|
Accounts receivable, net |
501,337 |
161,632 |
||||||
|
Accounts receivable - related party |
4,510 |
4,515 |
||||||
|
Prepaid expenses, and other current assets |
25,065 |
6,213 |
||||||
|
Assets held for sale |
1,805 |
- |
||||||
|
Inventories |
238,794 |
73,942 |
||||||
|
Total current assets |
836,189 |
251,678 |
||||||
|
Property, plant, and equipment |
1,454,010 |
827,865 |
||||||
|
Accumulated depreciation and depletion |
(632,801) |
(464,178) |
||||||
|
Property, plant, and equipment, net |
821,209 |
363,687 |
||||||
|
Operating lease right-of-use assets |
78,569 |
- |
||||||
|
Deferred tax assets |
2,033 |
- |
||||||
|
Investments |
56,753 |
4,244 |
||||||
|
Intangible assets, net |
34,930 |
27,816 |
||||||
|
Goodwill |
97,573 |
- |
||||||
|
Other assets |
52,028 |
17,145 |
||||||
|
Total assets |
1,979,284 |
664,570 |
||||||
|
Liabilities, redeemable noncontrolling interest, and stockholders' and members' equity (deficit) |
||||||||
|
Current liabilities: |
||||||||
|
Accounts payable |
209,537 |
121,070 |
||||||
|
Accounts payable - related party |
34,911 |
21,275 |
||||||
|
Current portion of operating lease liabilities |
9,532 |
- |
||||||
|
Accrued expenses |
194,321 |
38,149 |
||||||
|
Other current liabilities |
36,446 |
34,400 |
||||||
|
Current portion of long-term debt |
60,541 |
31,793 |
||||||
|
Total current liabilities |
545,288 |
246,687 |
||||||
|
Long-term debt |
484,228 |
235,128 |
||||||
|
Long-term debt - related party |
- |
34,645 |
||||||
|
Operating lease liabilities |
73,180 |
- |
||||||
|
Other liabilities |
17,320 |
- |
||||||
|
Total liabilities |
1,120,016 |
516,460 |
||||||
|
Redeemable noncontrolling interest |
1,644,426 |
- |
||||||
|
Stockholders' and members' equity |
- |
147,015 |
||||||
|
Preferred stock |
- |
- |
||||||
|
Class A common stock |
412 |
- |
||||||
|
Class B common stock |
1,011 |
- |
||||||
|
Additional paid-in capital |
- |
- |
||||||
|
Accumulated deficit |
(868,409) |
- |
||||||
|
Accumulated other comprehensive (loss) income |
9 |
56 |
||||||
|
Total stockholders' and members' (deficit) equity attributable to ProFrac Holding Corp. |
(866,977) |
147,071 |
||||||
|
Noncontrolling interests |
81,819 |
1,039 |
||||||
|
Total stockholders' and members' (deficit) equity |
(785,158) |
148,110 |
||||||
|
Total liabilities, redeemable noncontrolling interest, and stockholders' and members' (deficit) equity |
$ |
1,979,284 |
$ |
664,570 |
||||
|
ProFrac Holding Corp. (NasdaqGS: ACDC) |
|||||||||||||
|
Consolidated Statements of Cash Flow |
|||||||||||||
|
Three Months Ended |
Nine Months Ended |
||||||||||||
|
Sep. 30 |
Jun. 30 |
Sep. 30 |
Sep. 30 |
||||||||||
|
(In thousands) |
2022 |
2022 |
2022 |
2021 |
|||||||||
|
Cash flows from operating activities: |
|||||||||||||
|
Net income (loss) |
$ |
143,362 |
$ |
70,093 |
$ |
237,581 |
$ |
(48,670) |
|||||
|
Adjustments to reconcile net income to net (loss) cash provided by operating activities: |
|||||||||||||
|
Depreciation, depletion and amortization |
68,758 |
64,064 |
177,038 |
105,606 |
|||||||||
|
Stock-based compensation |
12,926 |
40,304 |
53,230 |
- |
|||||||||
|
Loss on disposal of assets, net |
667 |
2,143 |
2,656 |
7,472 |
|||||||||
|
Non-cash loss on extinguishment of debt |
242 |
5,946 |
10,472 |
- |
|||||||||
|
Amortization of debt issuance costs |
1,954 |
1,358 |
4,683 |
1,847 |
|||||||||
|
Bad debt expense, net of recoveries |
- |
- |
5 |
2,562 |
|||||||||
|
Deferred tax expense |
1,333 |
1,024 |
2,357 |
- |
|||||||||
|
Unrealized gain on investments, net |
- |
(426) |
(8,526) |
- |
|||||||||
|
Changes in operating assets and liabilities: |
|||||||||||||
|
Accounts receivable |
(46,096) |
(127,515) |
(220,467) |
(31,396) |
|||||||||
|
Inventories |
(43,269) |
(41,024) |
(107,150) |
(14,525) |
|||||||||
|
Prepaid expenses and other assets |
(11,443) |
1,545 |
(18,551) |
(1,223) |
|||||||||
|
Accounts payable |
19,082 |
(42,574) |
6,332 |
4,823 |
|||||||||
|
Accrued expenses |
28,604 |
60,007 |
111,233 |
11,511 |
|||||||||
|
Deferred revenues and other liabilities |
(3,921) |
4,545 |
5,770 |
(317) |
|||||||||
|
Net cash provided by operating activities |
172,199 |
39,490 |
256,663 |
37,690 |
|||||||||
|
Cash flows from investing activities: |
|||||||||||||
|
Investment in property, plant & equipment |
(123,408) |
(74,577) |
(239,477) |
(70,585) |
|||||||||
|
Proceeds from sale of assets |
586 |
479 |
46,687 |
17,487 |
|||||||||
|
Acquisitions, net of cash acquired |
(97,660) |
21,723 |
(354,927) |
(2,430) |
|||||||||
|
Investment in preferred shares of BPC |
- |
- |
(47,202) |
- |
|||||||||
|
Initial investment in Flotek |
- |
- |
(10,000) |
- |
|||||||||
|
Other Investments |
(20,946) |
- |
(24,839) |
- |
|||||||||
|
Net cash used in investing activities |
(241,428) |
(52,375) |
(629,758) |
(55,528) |
|||||||||
|
Cash flows from financing activities: |
|||||||||||||
|
Proceeds from issuance of long-term debt |
231,198 |
27,214 |
818,758 |
160,230 |
|||||||||
|
Repayments of long-term debt |
(17,955) |
(270,005) |
(515,780) |
(138,887) |
|||||||||
|
Borrowings from revolving credit agreements |
56,450 |
99,313 |
253,683 |
29,500 |
|||||||||
|
Repayments to revolving credit agreements |
(199,800) |
(26,669) |
(322,683) |
(18,500) |
|||||||||
|
Payment of debt issuance costs |
(9,676) |
(671) |
(33,260) |
(1,090) |
|||||||||
|
Member contribution |
- |
- |
5,000 |
- |
|||||||||
|
Proceeds from issuance of common stock |
- |
329,118 |
329,118 |
- |
|||||||||
|
Payment of THRC related equity |
- |
(72,931) |
(72,931) |
- |
|||||||||
|
Payment of common stock issuance costs |
- |
(27,444) |
(27,444) |
- |
|||||||||
|
Net cash provided by financing activities |
60,217 |
57,925 |
434,461 |
31,253 |
|||||||||
|
Net increase in cash, cash equivalents, and restricted cash |
$ |
(9,012) |
$ |
45,040 |
$ |
61,366 |
$ |
13,415 |
|||||
|
Cash, cash equivalents, and restricted cash beginning of period |
75,754 |
30,714 |
5,376 |
2,952 |
|||||||||
|
Cash, cash equivalents, and restricted cash end of period |
$ |
66,742 |
$ |
75,754 |
$ |
66,742 |
$ |
16,367 |
|||||
|
ProFrac Holding Corp. (NasdaqGS: ACDC) |
||||||||||||||||||||
|
Reconciliation of Net Income (Loss) to Adjusted Net Income |
||||||||||||||||||||
|
Three Months Ended |
Nine Months Ended |
|||||||||||||||||||
|
Sep. 30 |
Jun. 30 |
Sep. 30 |
Jun. 30 |
Sep. 30 |
Sep. 30 |
|||||||||||||||
|
(In thousands) |
2022 |
2022 |
2021 |
2021 |
2022 |
2021 |
||||||||||||||
|
Net income (loss) |
$ |
143,362 |
$ |
70,093 |
$ |
(14,075) |
$ |
(8,606) |
$ |
237,581 |
$ |
(48,670) |
||||||||
|
Loss on disposal of assets, net |
667 |
2,143 |
3,397 |
1,868 |
2,656 |
7,472 |
||||||||||||||
|
Loss on extinguishment of debt |
242 |
8,822 |
- |
- |
17,337 |
- |
||||||||||||||
|
Litigation |
- |
4,000 |
- |
- |
4,000 |
- |
||||||||||||||
|
Stock-based compensation related to deemed contributions |
10,207 |
38,849 |
- |
- |
49,056 |
- |
||||||||||||||
|
Bad debt expense, net of recoveries |
- |
- |
2,562 |
- |
5 |
2,562 |
||||||||||||||
|
(Gain) loss on foreign currency transactions |
(80) |
(58) |
116 |
- |
(126) |
116 |
||||||||||||||
|
Reorganization costs |
- |
- |
211 |
- |
55 |
211 |
||||||||||||||
|
Acquisition related expenses |
5,806 |
4,063 |
- |
- |
22,888 |
- |
||||||||||||||
|
Unrealized gain on investments, net |
- |
(426) |
- |
- |
(8,526) |
- |
||||||||||||||
|
Adjusted Net Income (loss) |
$ |
160,204 |
$ |
127,486 |
$ |
(7,789) |
$ |
(6,738) |
$ |
324,926 |
$ |
(38,309) |
||||||||
|
ProFrac Holding Corp. (NasdaqGS: ACDC) |
||||||||||||||||||||
|
Reconciliation of Net Income (Loss) to Adjusted Net Income excluding Flotek |
||||||||||||||||||||
|
Three Months Ended |
Nine Months Ended |
|||||||||||||||||||
|
Sep. 30 |
Jun. 30 |
Sep. 30 |
Jun. 30 |
Sep. 30 |
Sep. 30 |
|||||||||||||||
|
(In thousands) |
2022 |
2022 |
2021 |
2021 |
2022 |
2021 |
||||||||||||||
|
Net income (loss) |
$ |
143,362 |
$ |
70,093 |
$ |
(14,075) |
$ |
(8,606) |
$ |
237,581 |
$ |
(48,670) |
||||||||
|
Loss on disposal of assets, net |
667 |
2,143 |
3,397 |
1,868 |
2,656 |
7,472 |
||||||||||||||
|
Loss on extinguishment of debt |
242 |
8,822 |
- |
- |
17,337 |
- |
||||||||||||||
|
Litigation |
- |
4,000 |
- |
- |
4,000 |
- |
||||||||||||||
|
Stock-based compensation related to deemed contributions |
10,207 |
38,849 |
- |
- |
49,056 |
- |
||||||||||||||
|
Bad debt expense, net of recoveries |
- |
- |
2,562 |
- |
5 |
2,562 |
||||||||||||||
|
(Gain) loss on foreign currency transactions |
(80) |
(58) |
116 |
- |
(126) |
116 |
||||||||||||||
|
Reorganization costs |
- |
- |
211 |
- |
55 |
211 |
||||||||||||||
|
Acquisition related expenses |
5,806 |
4,063 |
- |
- |
22,888 |
- |
||||||||||||||
|
Unrealized gain on investments, net |
- |
(426) |
- |
- |
(8,526) |
- |
||||||||||||||
|
Adjusted Net Income (loss) |
$ |
160,204 |
$ |
127,486 |
$ |
(7,789) |
$ |
(6,738) |
$ |
324,926 |
$ |
(38,309) |
||||||||
|
Less: net (income) loss from other business activities |
12,497 |
8,604 |
- |
- |
21,101 |
- |
||||||||||||||
|
Adjusted Net Income (loss) excluding other business activities |
172,701 |
136,090 |
(7,789) |
(6,738) |
346,027 |
(38,309) |
||||||||||||||
|
ProFrac Holding Corp. (NasdaqGS: ACDC) |
||||||||||||||||||||
|
Reconciliation of Net Income (Loss) to Adjusted EBITDA |
||||||||||||||||||||
|
Three Months Ended |
Nine Months Ended |
|||||||||||||||||||
|
Sep. 30 |
Jun. 30 |
Sep. 30 |
Jun. 30 |
Sep. 30 |
Sep. 30 |
|||||||||||||||
|
(In thousands) |
2022 |
2022 |
2021 |
2021 |
2022 |
2021 |
||||||||||||||
|
Net income (loss) |
$ |
143,362 |
$ |
70,093 |
$ |
(14,075) |
$ |
(8,606) |
$ |
237,581 |
$ |
(48,670) |
||||||||
|
Interest expense, net |
16,261 |
13,451 |
6,896 |
6,187 |
38,984 |
19,118 |
||||||||||||||
|
Depreciation, depletion and amortization |
68,758 |
64,064 |
35,241 |
34,904 |
177,038 |
105,606 |
||||||||||||||
|
Income tax provision (benefit) |
8,157 |
4,112 |
170 |
(283) |
13,021 |
(138) |
||||||||||||||
|
Loss on disposal of assets, net |
667 |
2,143 |
3,397 |
1,868 |
2,656 |
7,472 |
||||||||||||||
|
Loss on extinguishment of debt |
242 |
8,822 |
- |
- |
17,337 |
- |
||||||||||||||
|
Litigation |
- |
4,000 |
- |
- |
4,000 |
- |
||||||||||||||
|
Stock-based compensation |
2,719 |
1,455 |
- |
- |
4,174 |
- |
||||||||||||||
|
Stock-based compensation related to deemed contributions |
10,207 |
38,849 |
- |
- |
49,056 |
- |
||||||||||||||
|
Bad debt expense, net of recoveries |
- |
- |
2,562 |
- |
5 |
2,562 |
||||||||||||||
|
(Gain) loss on foreign currency transactions |
(80) |
(58) |
116 |
- |
(126) |
116 |
||||||||||||||
|
Reorganization costs |
- |
- |
211 |
- |
55 |
211 |
||||||||||||||
|
Acquisition related expenses |
5,806 |
4,063 |
- |
- |
22,888 |
- |
||||||||||||||
|
Unrealized gain on investments, net |
- |
(426) |
- |
- |
(8,526) |
- |
||||||||||||||
|
Adjusted EBITDA |
$ |
256,099 |
$ |
210,568 |
$ |
34,518 |
$ |
34,070 |
$ |
558,143 |
$ |
86,277 |
||||||||
|
ProFrac Holding Corp. (NasdaqGS: ACDC) |
||||||||||||||||||||
|
Reconciliation of Net Income (Loss) to Pro Forma Adjusted EBITDA excluding Flotek |
||||||||||||||||||||
|
Three Months Ended |
Nine Months Ended |
|||||||||||||||||||
|
Sep. 30 |
Jun. 30 |
Sep. 30 |
Jun. 30 |
Sep. 30 |
Sep. 30 |
|||||||||||||||
|
(In thousands except average active fleets and annualization factor) |
2022 |
2022 |
2021 |
2021 |
2022 |
2021 |
||||||||||||||
|
Net income (loss) |
$ |
143,362 |
$ |
70,093 |
$ |
(14,075) |
$ |
(8,606) |
$ |
237,581 |
$ |
(48,670) |
||||||||
|
Interest expense, net |
16,261 |
13,451 |
6,896 |
6,187 |
38,984 |
19,118 |
||||||||||||||
|
Depreciation, depletion and amortization |
68,758 |
64,064 |
35,241 |
34,904 |
177,038 |
105,606 |
||||||||||||||
|
Income tax provision |
8,157 |
4,112 |
170 |
(283) |
13,021 |
(138) |
||||||||||||||
|
Loss on disposal of assets, net |
667 |
2,143 |
3,397 |
1,868 |
2,656 |
7,472 |
||||||||||||||
|
Loss on extinguishment of debt |
242 |
8,822 |
- |
- |
17,337 |
- |
||||||||||||||
|
Litigation |
- |
4,000 |
- |
- |
4,000 |
- |
||||||||||||||
|
Stock-based compensation |
2,719 |
1,455 |
- |
- |
4,174 |
- |
||||||||||||||
|
Stock-based compensation related to deemed contributions |
10,207 |
38,849 |
- |
- |
49,056 |
- |
||||||||||||||
|
Bad debt expense, net of recoveries |
- |
- |
2,562 |
- |
5 |
2,562 |
||||||||||||||
|
(Gain) loss on foreign currency transactions |
(80) |
(58) |
116 |
- |
(126) |
116 |
||||||||||||||
|
Reorganization costs |
- |
- |
211 |
- |
55 |
211 |
||||||||||||||
|
Acquisition related expenses |
5,806 |
4,063 |
- |
- |
22,888 |
- |
||||||||||||||
|
Unrealized gain on investments, net |
- |
(426) |
- |
- |
(8,526) |
- |
||||||||||||||
|
Total adjusted EBITDA for reportable segments |
$ |
256,099 |
$ |
210,568 |
$ |
34,518 |
$ |
34,070 |
$ |
558,143 |
$ |
86,277 |
||||||||
|
Less: other business activities operating results |
11,072 |
7,454 |
- |
- |
18,526 |
- |
||||||||||||||
|
Adjusted EBITDA excluding other business activities |
267,171 |
218,022 |
34,518 |
34,070 |
576,669 |
86,277 |
||||||||||||||
|
Average active fleets |
31.0 |
31.0 |
14.7 |
20.0 |
27.9 |
14.9 |
||||||||||||||
|
Adjusted EBITDA excluding other business activities per average active fleet |
8,618 |
7,033 |
2,348 |
1,704 |
20,669 |
5,790 |
||||||||||||||
|
Annualization factor |
4.0 |
4.0 |
4.0 |
4.0 |
1.3 |
1.3 |
||||||||||||||
|
Annualized adjusted EBITDA excluding other business activities per average active fleet |
$ |
34,474 |
$ |
28,132 |
$ |
9,393 |
$ |
6,814 |
$ |
27,559 |
$ |
7,721 |
||||||||
|
ProFrac Holding Corp. (NasdaqGS: ACDC) |
|||||||||||||||||||||||
|
Segment Information |
|||||||||||||||||||||||
|
Three Months Ended |
Nine Months Ended |
||||||||||||||||||||||
|
Sep. 30 |
Jun. 30 |
Sep. 30 |
Jun. 30 |
Sep. 30 |
Sep. 30 |
||||||||||||||||||
|
(In thousands) |
2022 |
2022 |
2021 |
2021 |
2022 |
2021 |
|||||||||||||||||
|
Revenues |
|||||||||||||||||||||||
|
Stimulation services |
$ |
668,578 |
$ |
576,556 |
$ |
190,723 |
$ |
168,506 |
$ |
1,581,289 |
$ |
502,932 |
|||||||||||
|
Manufacturing |
48,742 |
34,854 |
19,861 |
16,223 |
115,602 |
50,741 |
|||||||||||||||||
|
Proppant production |
24,642 |
17,531 |
6,399 |
7,781 |
54,581 |
19,769 |
|||||||||||||||||
|
Other |
46,872 |
15,359 |
- |
- |
62,231 |
- |
|||||||||||||||||
|
Total segments |
788,834 |
644,300 |
216,983 |
192,510 |
1,813,703 |
573,442 |
|||||||||||||||||
|
Eliminations |
(92,104) |
(54,456) |
(21,052) |
(17,691) |
(182,149) |
(53,106) |
|||||||||||||||||
|
Total revenues |
$ |
696,730 |
$ |
589,844 |
$ |
195,931 |
$ |
174,819 |
$ |
1,631,554 |
$ |
520,336 |
|||||||||||
|
Adjusted EBITDA |
|||||||||||||||||||||||
|
Stimulation services |
$ |
249,557 |
$ |
196,088 |
$ |
31,599 |
$ |
30,475 |
$ |
519,214 |
$ |
75,027 |
|||||||||||
|
Manufacturing |
8,416 |
9,360 |
502 |
349 |
27,798 |
3,181 |
|||||||||||||||||
|
Proppant production |
9,198 |
12,574 |
2,417 |
3,246 |
29,657 |
8,069 |
|||||||||||||||||
|
Other |
(11,072) |
(7,454) |
- |
- |
(18,526) |
- |
|||||||||||||||||
|
Adjusted EBITDA for reportable segments |
$ |
256,099 |
$ |
210,568 |
$ |
34,518 |
$ |
34,070 |
$ |
558,143 |
$ |
86,277 |
|||||||||||
|
ProFrac Holding Corp. (NasdaqGS: ACDC) |
||||||||
|
Net Debt |
||||||||
|
Sep. 30 |
Jun. 30 |
|||||||
|
(In thousands) |
2022 |
2022 |
||||||
|
Current portion of long-term debt |
$ |
60,541 |
$ |
51,329 |
||||
|
Long-term debt |
484,228 |
427,961 |
||||||
|
Long-term debt - related party |
- |
- |
||||||
|
Total debt |
544,769 |
479,290 |
||||||
|
Plus: Unamortized debt issuance costs |
23,235 |
15,755 |
||||||
|
Total gross debt |
568,004 |
495,045 |
||||||
|
Less: Cash and cash equivalents |
(64,678) |
(73,653) |
||||||
|
Net debt |
$ |
503,326 |
$ |
421,392 |
||||
|
ProFrac Holding Corp. (NasdaqGS: ACDC) |
||||||||
|
Net Debt excluding Other Business Activities |
||||||||
|
Sep. 30 |
Jun. 30 |
|||||||
|
(In thousands) |
2022 |
2022 |
||||||
|
Current portion of long-term debt |
$ |
44,917 |
$ |
36,938 |
||||
|
Long-term debt |
481,265 |
424,825 |
||||||
|
Long-term debt - related party |
- |
- |
||||||
|
Total debt |
526,182 |
461,763 |
||||||
|
Plus: Unamortized debt issuance costs |
23,235 |
15,755 |
||||||
|
Total gross debt |
549,417 |
477,518 |
||||||
|
Less: Cash and cash equivalents |
(56,170) |
(40,569) |
||||||
|
Net debt |
$ |
493,247 |
$ |
436,949 |
||||
|
Contacts: |
ProFrac Holding Corp. |
|
Lance Turner – Chief Financial Officer |
|
|
Dennard Lascar Investor Relations |
|
|
Ken Dennard / Rick Black |
|
View original content:https://www.prnewswire.com/news-releases/profrac-holding-corp-reports-2022-third-quarter-financial-and-operational-results-301675057.html
SOURCE ProFrac Holding Corp.