What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-08-01 compared with 2024-05-02 · 114 added, 68 removed, 508 unchanged (26% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data) March 31,

(in thousands, except per share data) June 30,

2024 December 31,

27 unchanged sentences

Current portion of liability related to tax receivable agreement

20,855 20,855

Finance lease obligations, current portion

32 unchanged sentences

Three Months Ended

June 30, Six Months Ended

(in thousands, except per share data) 2024 2023 2024 2023

20 unchanged sentences

Operating income 79,819 48,522 142,369 98,210

Interest income, net 689 1,002

Interest income (expense), net 1,405 ( 5,928 ) 2,094 ( 4,926 )

Other income, net — — — 3,538

4 unchanged sentences

net income attributable to non-controlling interest

13,231 7,709 24,081 17,103

Net income attributable to Cactus Inc.

11 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended

(in thousands) 2024 2023 2024 2023

1 unchanged sentence

Foreign currency translation adjustments

174 ( 445 ) ( 629 ) ( 142 )

Comprehensive income

1 unchanged sentence

comprehensive income attributable to non-controlling interest

13,289 7,596 23,966 17,073

Comprehensive income attributable to Cactus Inc.

10 unchanged sentences

(in thousands) Shares Amount Shares Amount

Balance at March 31, 2024 65,518 $ 655 14,034 $ — $ 462,464 $ 431,703 $ ( 1,456 ) $ 207,223 $ 1,100,589

Member distributions — — — — — — — ( 6,933 ) ( 6,933 )

Effect of CC Unit redemptions 952 10 ( 952 ) — 14,406 — — ( 14,416 ) —

Tax impact of equity transactions — — — — 299 — — — 299

Equity award vestings 10 — — — ( 178 ) — — ( 43 ) ( 221 )

Other comprehensive income — — — — — — 116 58 174

Stock-based compensation — — — — 4,969 — — 1,000 5,969

Cash dividends declared ($ 0.12 per share)

— — — — — ( 8,140 ) — — ( 8,140 )

Net income — — — — — 49,828 — 13,231 63,059

Balance at June 30, 2024 66,480 $ 665 13,082 $ — $ 481,960 $ 473,391 $ ( 1,340 ) $ 200,120 $ 1,154,796

Balance at March 31, 2023 64,448 $ 645 14,978 $ — $ 439,844 $ 297,528 $ ( 764 ) $ 188,583 $ 925,836

Member distributions — — — — — — — ( 3,068 ) ( 3,068 )

Effect of CC Unit redemptions 158 2 ( 158 ) — 2,020 — — ( 2,022 ) —

Tax impact of equity transactions — — — — 428 — — — 428

Equity award vestings 7 — — — ( 62 ) — — ( 35 ) ( 97 )

Other comprehensive loss — — — — — — ( 332 ) ( 113 ) ( 445 )

Share repurchases ( 4 ) ( 137 ) ( 22 ) ( 159 )

Stock-based compensation — — — — 4,113 — — 936 5,049

Cash dividends declared ($ 0.11 per share)

— — — — — ( 7,229 ) — — ( 7,229 )

Net income — — — — — 24,750 — 7,709 32,459

Balance at June 30, 2023 64,609 $ 647 14,820 $ — $ 446,206 $ 315,049 $ ( 1,096 ) $ 191,968 $ 952,774

The accompanying notes are an integral part of these condensed consolidated financial statements.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Class A Class B Additional

Capital Retained

Earnings Accumulated

Comprehensive Income (Loss) Non-controlling

Interest Total

Common Stock Common Stock

(in thousands) Shares Amount Shares Amount

Balance at December 31, 2023 65,409 $ 654 14,034 $ — $ 465,012 $ 400,682 $ ( 826 ) $ 199,248 $ 1,064,770

Member distributions — — — — — — — 0 ( 8,617 ) ( 8,617 )

Effect of CC Unit redemptions 952 10 ( 952 ) — 14,406 — — ( 14,416 ) —

Tax impact of equity transactions — — — — 533 — — — 533

6 unchanged sentences

Net income — — — — — 88,793 — 24,081 112,874

Balance at March 31, 2024 65,518 $ 655 14,034 $ — $ 462,464 $ 431,703 $ ( 1,456 ) $ 207,223 $ 1,100,589

Balance at June 30, 2024 66,480 $ 665 13,082 $ — $ 481,960 $ 473,391 $ ( 1,340 ) $ 200,120 $ 1,154,796

Balance at December 31, 2022 60,903 $ 609 14,978 $ — $ 310,528 $ 261,764 $ ( 984 ) $ 138,528 $ 710,445

1 unchanged sentence

Member distributions — — — — — — — ( 4,712 ) ( 4,712 )

Effect of CC Unit redemptions 158 2 ( 158 ) — 2,020 — — ( 2,022 ) —

Tax impact of equity transactions — — — — ( 13,553 ) — — 16,826 3,273

Equity award vestings 200 2 — — ( 3,071 ) — — ( 1,371 ) ( 4,440 )

Other comprehensive income — — — — — — 220 83 303

Other comprehensive loss — — — — — — ( 112 ) ( 30 ) ( 142 )

Share repurchases ( 4 ) — — — ( 137 ) — — ( 22 ) ( 159 )

Stock-based compensation — — — — 7,117 — — 1,635 8,752

2 unchanged sentences

Net income — — — — — 67,644 — 17,103 84,747

Balance at March 31, 2023 64,448 $ 645 14,978 $ — $ 439,844 $ 297,528 $ ( 764 ) $ 188,583 $ 925,836

Balance at June 30, 2023 64,609 $ 647 14,820 $ — $ 446,206 $ 315,049 $ ( 1,096 ) $ 191,968 $ 952,774

The accompanying notes are an integral part of these condensed consolidated financial statements.

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

Six Months Ended

(in thousands) 2024 2023

10 unchanged sentences

Deferred income taxes

4,403 ( 1,406 )

Change in fair value of earn-out liability 16,180 18,023

3 unchanged sentences

( 358 ) ( 20,107 )

( 4,340 ) 41,185

Prepaid expenses and other assets

3 unchanged sentences

12,442 ( 4,789 )

Payments pursuant to tax receivable agreement ( 15,277 ) —

Net cash provided by operating activities

9 unchanged sentences

Proceeds from the issuance of long-term debt — 155,000

Repayments of borrowings of long-term debt — ( 100,000 )

Net proceeds from the issuance of Class A common stock — 169,878

8 unchanged sentences

( 8,489 ) ( 4,599 )

Net cash provided by (used in) financing activities ( 20,127 ) 303,163

Net cash (used in) provided by financing activities ( 37,195 ) 190,687

Effect of exchange rate changes on cash and cash equivalents

( 258 ) ( 303 )

Net increase (decrease) in cash and cash equivalents 112,711 ( 280,617 )

60 unchanged sentences

On February 28, 2023 we completed the acquisition of FlexSteel.

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 future earn-out payment of up to $ 75.0 million to be paid no later than the third quarter of 2024, if certain revenue targets are met by FlexSteel.

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 with a potential future earn-out payment of up to $ 75.0 million, if certain revenue targets were met by FlexSteel through the period ending June 30, 2024.

Purchase Price Consideration

4 unchanged sentences

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 $ 75.0 million of additional cash consideration if certain revenue targets are met by FlexSteel.

(1) Represents the estimated fair value as of the acquisition date of the earn-out payment of up to $ 75.0 million of additional cash consideration if certain revenue targets were 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 March 31, 2024, the estimated earn-out payment is $ 34.1 million.

The increase is based on the improvements in FlexSteel's expected revenues for the period January 1, 2023 through June 30, 2024, 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 12.

Changes in the fair value of the earn-out liability subsequent to the acquisition date have been recognized in the consolidated statements of income.

The contingent consideration earn-out period ended on June 30, 2024 and resulted in a final earn-out liability of $ 37.0 million, which is expected to be paid in August 2024.

Purchase Price Allocation

28 unchanged sentences

The pro forma financial information below represents the combined results of operations as if the acquisition had occurred as of January 1, 2022.

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.

Three Months Ended

The unaudited pro forma financial information is presented for informational purposes only.

Six Months Ended

Revenues $ 587,603

5 unchanged sentences

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 March 31, 2024 and December 31, 2023 was $ 31.7 million and $ 26.8 million, respectively.

Accounts receivable includes amounts billed and currently due from customers and unbilled amounts resulting from accrued revenue associated with 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 June 30, 2024 and December 31, 2023 was $ 35.6 million and $ 26.8 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.

4 unchanged sentences

Period Expense

(Recovery) Write off Translation Adjustments Balance at

Three Months Ended March 31, 2024 $ 3,642 $ 162 $ ( 1 ) $ — $ 3,803

Three Months Ended March 31, 2023 1,060 ( 376 ) ( 19 ) 2 667

(Recovery) Write off Other Balance at

Six Months Ended June 30, 2024 $ 3,642 $ 589 $ ( 1 ) $ 47 $ 4,277

Six Months Ended June 30, 2023 1,060 1,515 ( 24 ) ( 1 ) 2,550

Inventories are stated at the lower of cost or net realizable value.

37 unchanged sentences

The following table presents the detail of acquired intangible assets:

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Gross Cost Accumulated Amortization Net Cost Gross Cost Accumulated Amortization Net Cost

5 unchanged sentences

All intangible assets are amortized over their estimated useful lives.

The weighted average amortization period for identifiable intangible assets acquired as of March 31, 2024 is 12 years.

Amortization expense recognized during the three months ended March 31, 2024 was $ 4.0 million and was recorded in selling, general and administrative expenses in the consolidated statements of income.

The weighted average amortization period for identifiable intangible assets acquired as of June 30, 2024 is 11.3 years.

Amortization expense recognized during the three and six months ended June 30, 2024 was $ 4.0 million and $ 8.0 million, respectively, and was recorded in selling, general and administrative expenses in the consolidated statements of income.

Estimated future amortization expense is as follows:

2 unchanged sentences

Total $ 171,984

We had no debt outstanding as of March 31, 2024 and December 31, 2023.

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 March 31, 2024.

We had no bank debt outstanding as of June 30, 2024 and December 31, 2023.

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 June 30, 2024.

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 was first amended in September 2020 and provided for up to $ 75.0 million in revolving commitments.

On July 25, 2022, the ABL Credit Facility was amended again 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.

The ABL Credit Facility was amended in September 2020 and July 2022.

On February 28, 2023, in connection with the Merger, 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.

The Amended ABL Credit Facility provided 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.

12 unchanged sentences

Until the term loan was paid 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 Amended ABL Credit Facility is under certain levels.

The Amended ABL Credit Facility requires Cactus Companies to maintain a minimum fixed charge coverage ratio of 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 Amended 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.

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.

The majority of our revenues are derived from short-term contracts for fixed consideration, or in the case of rentals, for a fixed charge per day, plus repairs while the equipment is in use by the customer.

16 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Product revenue

5 unchanged sentences

Total revenues $ 290,389 100 % $ 305,819 100 % $ 564,512 100 % $ 534,224 100 %

At March 31, 2024, we had a deferred revenue balance of $ 7.9 million compared to the December 31, 2023 balance of $ 8.1 million.

Deferred revenue represents our obligation to transfer products to or perform services for a customer for which we have received cash or billed in advance.

At June 30, 2024, we had a deferred revenue balance of $ 8.6 million compared to the December 31, 2023 balance of $ 8.1 million.

Deferred revenue represents our obligation to transfer products to or perform services for a customer for which we have received cash or billed in advance of delivering products or services.

The revenue that has been deferred will be recognized upon product delivery or as services are performed.

As of March 31, 2024, 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.

As of June 30, 2024, 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.

Tax Receivable Agreement ( “ TRA ” )

8 unchanged sentences

Subsequent changes to the measurement of the TRA liability are recognized in the statements of income as a component of other expense, net.

As of March 31, 2024, 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.

As of June 30, 2024, the total liability from the TRA was $ 265.1 million with $ 5.6 million reflected in current liabilities based on the expected timing of our next payment.

The current liability of $ 5.6 million is reflective of a $ 15.3 million payment during the second quarter of 2024.

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.

1 unchanged sentence

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), 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.

The calculation of anticipated future payments is 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.

2 unchanged sentences

In March of 2024, the TRA was amended to replace all references to one year LIBOR with references to the 12-month term SOFR published by CME Group Benchmark Administration Limited, plus 71.513 basis points.

Additionally, all references to Cactus LLC were replaced with references to Cactus Companies as described in the CC Reorganization.

The foregoing description of the TRA Amendment is a summary of the material terms of the TRA Amendment, does not purport to be complete and is qualified in its entirety by reference to the complete text of the TRA Amendment, a copy of which is filed as an Exhibit to this Quarterly Report and is incorporated herein by reference.

As of March 31, 2024, Cactus Inc.

Additionally, all references to Cactus LLC were replaced with references to Cactus Companies in relation to the CC Reorganization.

As of June 30, 2024, Cactus Inc.

owned 83.6 % of Cactus Companies as compared to 82.3 % of Cactus Companies as of December 31, 2023.

As of March 31, 2024, Cactus Inc.

As of June 30, 2024, Cactus Inc.

had outstanding 66.5 million shares of Class A common stock (representing 83.6 % of the total voting power) and 13.1 million shares of Class B common stock (representing 16.4 % of the total voting power).

6 unchanged sentences

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 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 award.

CC Reorganization

3 unchanged sentences

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.

(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.

4 unchanged sentences

Since our IPO in February 2018, an aggregate of 47.5 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.

During the three months ended March 31, 2024 and 2023, there were no redemptions of CC Units (or CW Units prior to the CC Reorganization).

Aggregate cash dividends of $ 0.12 and $ 0.11 per share of Class A common stock were declared during the three months ended March 31, 2024 and 2023 totaling $ 8.0 million and $ 7.1 million, respectively.

Cash dividends paid during the three months ended March 31, 2024 and 2023 totaled $ 8.1 million and $ 7.4 million, respectively.

During the six months ended June 30, 2024 and 2023, 1.0 million and 0.2 million CC Units, respectively, together with a corresponding number of shares of Class B common stock, were redeemed in exchange for Class A common stock in accordance with the Cactus Companies LLC Agreement.

Aggregate cash dividends of $ 0.24 and $ 0.22 per share of Class A common stock were declared during the six months ended June 30, 2024 and 2023 totaling $ 16.1 million and $ 14.4 million, respectively.

Cash dividends paid during the six months ended June 30, 2024 and 2023 totaled $ 16.1 million and $ 14.5 million, respectively.

Dividends accrue on unvested equity-based awards on the date of record and are paid upon vesting.

8 unchanged sentences

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 three months ended March 31, 2024, the Company purchased and retired 86,599 shares of Class A common stock for $ 3.4 million, or $ 38.92 average price per share excluding commissions, under the share repurchase program.

As of March 31, 2024, $ 146.3 million remained authorized for future repurchases of Class A common stock under the program.

During the six months ended June 30, 2024, the Company purchased and retired 86,599 shares of Class A common stock for $ 3.4 million, or $ 38.92 average price per share excluding commissions, under the share repurchase program.

As of June 30, 2024, $ 146.3 million remained authorized for future repurchases of Class A common stock under the program.

Member Distributions

Distributions made by Cactus Companies are generally required to be made pro rata among all its members.

For the three months ended March 31, 2024, Cactus Companies distributed $ 7.8 million to Cactus Inc.

to fund its dividend payments and made pro rata distributions to the other members totaling $ 1.7 million over the same period.

During the three months ended March 31, 2023, Cactus Companies distributed $ 7.1 million to Cactus Inc.

to fund its dividend payments and made pro rata distributions to the other members totaling $ 1.6 million.

For the six months ended June 30, 2024, Cactus Companies distributed $ 42.5 million to Cactus Inc.

to fund its dividend, TRA and estimated tax payments and made pro rata distributions to the other members totaling $ 8.6 million over the same period.

During the six months ended June 30, 2023, Cactus Companies distributed $ 20.4 million to Cactus Inc.

to fund its dividend and estimated tax payments and made pro rata distributions to the other members totaling $ 4.7 million.

Limitation of Members’ Liability

7 unchanged sentences

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.

At March 31, 2024, due to the short-term nature of this account, the earn-out liability related to the FlexSteel acquisition (see Note 2) was determined based on the estimated future payments, utilizing projections for the second quarter of 2024.

At December 31, 2023, the earn-out liability was measured at a fair value of $ 20.8 million using Level 3 unobservable inputs.

The fair value at December 31, 2023 was 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 Monte Carlo simulation model used 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 as of December 31, 2023:

8 unchanged sentences

Balance at December 31, 2023 $ 20,810

The fair value of our foreign currency forwards was less than $ 0.1 million as of March 31, 2024 and was determined using market observable inputs including forward and spot prices (Level 2 inputs).

The FlexSteel acquisition contingent consideration earn-out period ended June 30, 2024.

The earn-out payment is expected to be paid in August 2024 and represents the achievement of certain revenue targets met by FlexSteel.

The fair value of our foreign currency forwards was less than $ 0.1 million as of June 30, 2024 and was determined using market observable inputs including forward and spot prices (Level 2 inputs).

Segment Reporting

1 unchanged sentence

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.

• Pressure Control – engaged in the design, manufacture, sale, installation, service and associated rental 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 business segment for three months ended March 31, 2024 and 2023 is summarized below.

Financial information by business segment for the three and six months ended June 30, 2024 and 2023 is summarized below.

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Pressure Control $ 187,192 $ 199,134 $ 362,220 $ 393,789

Spoolable Technologies 103,716 106,685 202,811 140,435

Corporate and other (1)

( 519 ) — ( 519 ) —

Total revenues 290,389 305,819 564,512 534,224

3 unchanged sentences

Total segment operating income 85,710 56,870 153,778 120,290

Corporate and other expenses (1)

Corporate and other (2)

( 5,891 ) ( 8,348 ) ( 11,409 ) ( 22,080 )

3 unchanged sentences

Income before income taxes $ 81,224 $ 42,594 $ 144,463 $ 96,822

(1) Represents the elimination of inter-segment revenue for sales from our Pressure Control segment to our Spoolable Technologies segment.

(2) Includes corporate and other costs not directly attributable to our reporting segments, such as corporate executive management and other administrative functions.

These costs were previously included in the Pressure Control segment.

The information for the three months ended March 31, 2023 has been recast to align with the presentation for the three months ended March 31, 2024.

Prior to January 1, 2024, these costs were previously included in the Pressure Control segment.

The information for the six months ended June 30, 2023 has been recast to align with the presentation for the six months ended June 30, 2024.

Earnings per Share

8 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2024 2023 2024 2023

Net income attributable to Cactus Inc.—basic

1 unchanged sentence

Net income attributable to non-controlling interest (1)

— — 18,432 13,114

Net income attributable to Cactus Inc.—diluted (1)

3 unchanged sentences

Effect of dilutive shares (2)

437 437 13,926 15,357

Weighted average Class A shares outstanding—diluted (2)

66,579 65,003 79,686 79,512

Earnings per Class A share—basic

2 unchanged sentences

$ 0.75 $ 0.38 $ 1.35 $ 1.02

(1) The numerator is adjusted in the calculation of diluted earnings per share under the if-converted method to include net income attributable to the non-controlling interest calculated as its pre-tax income adjusted for a corporate effective tax rate of 26.0 % for the three months ended March 31, 2024 and 24.5 % for the three months ended March 31, 2023.

(2) Diluted earnings per share for the three months ended June 30, 2024 and 2023 excludes 13.4 million and 14.9 million weighted average shares of Class B common stock, respectively, as the effect would be anti-dilutive.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements