What changed in this filing

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Item 1. Business

2025-02-27 compared with 2024-02-29 · 66 added, 59 removed, 214 unchanged (37% of the section changed)

7 unchanged sentences

We also provide rental and service operations in the Middle East and other select international markets.

We also have manufacturing and production facilities in Bossier City, Louisiana, Baytown, Texas and Suzhou, China.

Our primary manufacturing and production facilities are in Bossier City, Louisiana, Baytown, Texas and Suzhou, China.

Our corporate headquarters are located in Houston, Texas.

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and its subsidiaries.

We completed the acquisition on a cash-free, debt-free basis and paid total cash consideration of $621.5 million which included final adjustments for closing working capital, cash on hand and indebtedness adjustments as set forth in the related merger agreement (the “Merger Agreement”).

In addition to the upfront consideration, there is a potential future earn-out payment of up to $75 million to be paid no later than the third quarter of 2024, if certain revenue growth targets are met by the FlexSteel business.

We funded the upfront purchase price using a combination of $165.6 million of net proceeds received from a public offering of shares of our Class A common stock completed in January 2023, borrowings under the Amended ABL Credit Facility (as defined in Note 6 in the notes to the Consolidated Financial Statements) totaling $155.0 million and available cash on hand.

See Note 3 in the notes to the Consolidated Financial Statements for additional information related to the acquisition.

We completed the acquisition on a cash-free, debt-free basis and paid total cash consideration of $658.6 million which included the initial purchase consideration, final adjustments for closing working capital, cash on hand and indebtedness adjustments, and earn-out payments made in 2024 as set forth in the related merger agreement (the “Merger Agreement”).

CC Reorganization and Current Ownership Structure

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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.” From the completion of our IPO until the CC Reorganization, CW Unit Holders owned one share of our Class B common stock, par value $0.01 per share (“Class B common stock”) for each CW Unit such CW Unit Holder owned and, upon the completion of the CC Reorganization, such CW Unit Holders ceased to be holders of CW Units and, instead, became holders of a number of CC Units equal to the number of CW Units such CW Unit Holders held immediately prior to the completion of the CC Reorganization.

(along with their permitted transferees), as “CC Unit Holders.” From the completion of our IPO until the CC Reorganization, CW Unit Holders owned one share of our

Class B common stock, par value $0.01 per share (“Class B common stock”) for each CW Unit such CW Unit Holder owned and, upon the completion of the CC Reorganization, such CW Unit Holders ceased to be holders of CW Units and, instead, became holders of a number of CC Units equal to the number of CW Units such CW Unit Holders held immediately prior to the completion of the CC Reorganization.

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 and Cactus Companies is the sole member of Cactus LLC.

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Our Products and Services

Following the acquisition of FlexSteel, we have two operating segments consisting of Pressure Control and Spoolable Technologies.

We have two operating segments consisting of Pressure Control and Spoolable Technologies.

See discussion below of each operating segment.

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Our customers use these products primarily as production, gathering and takeaway pipelines to transport oil, gas or other liquids.

In addition, we also provide field services and rental items to assist our customers with the installation of these products.

In addition, we provide field services and rental items to assist our customers with the installation of these products.

We support our field service operations through service centers and pipe yards located in oil and gas regions throughout the United States and Western Canada.

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We have predominantly domestic operations and sales, but also generate revenues in Australia, Canada and other select international markets.

Most of our sales are made on a call out basis pursuant to agreements, wherein our clients provide delivery instructions for goods and/or services as their operations require.

Most of our sales are made on a call out basis pursuant to customer agreements, wherein our clients provide delivery instructions for goods and/or services as their operations require.

Such goods and services are most often priced in accordance with a preapproved price list.

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Suppliers and Raw Materials

Forgings, castings, tube and bar stock represent the principal raw materials used in the manufacture of our Pressure Control products and rental equipment.

Forgings, tube and bar stock represent the principal raw materials used in the manufacture of our Pressure Control products and rental equipment.

In addition, we require accessory items (such as elastomers, ring gaskets, studs and nuts) and machined components.

The principal raw materials used by our Spoolable Technologies segment include tube, bar stock, steel strip and high-density polyethylene.

We purchase a majority of our raw materials from vendors primarily located in the United States, China, India, Australia and the United Kingdom.

We purchase a majority of our raw materials from vendors primarily located in the United States, China, India, Australia and Vietnam.

We do not believe that we are overly dependent on any individual vendor to supply our required materials or services.

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Once registered, our trademarks can be renewed every 10 years as long as we are using them in commerce.

We also seek to protect our technology through the use of patents, which affords us 20 years of protection of our proprietary inventions and technology, although we do not deem patents to be critical to our success.

We also seek to protect our technology through the use of patents, which affords us 20 years of protection of our proprietary inventions and technology.

We have been awarded U.S.

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There can be no assurance, however, that others will not independently obtain similar information or otherwise gain access to our trade secrets.

We are substantially dependent on conditions in the oil and gas industry, including the level of exploration, development and production activity of, and the corresponding capital spending by, oil and natural gas companies.

The level of exploration, development and production activity is directly affected by trends in oil and natural gas prices, which have historically been volatile, and by the availability of capital and the associated capital spending discipline exercised by customers.

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Our business is not significantly impacted by seasonality, although our fourth quarter has historically been impacted by holidays and our customers’ budget cycles.

This can lead to lower activity in our three revenue categories as well as lower margins, particularly in field services due to reduced labor utilization.

These factors can lead to lower activity in our three revenue categories as well as lower margins, particularly in field services due to reduced labor utilization.

We serve over 300 customers representing private operators, publicly-traded independents, majors and other companies with operations in the key U.S.

oil and gas producing basins as well as in Australia, Canada, the Middle East and other international locations.

One customer represented approximately 10% of total revenues during the year ended December 31, 2023.

No customer represented 10% or more of our total revenues during the year ended December 31, 2022, whereas one customer represented 12% of total revenues during the year ended December 31, 2021.

For the years ended December 31, 2024 and 2023, one customer represented 15% and 10%, respectively, of total Company revenues, with both operating segments reporting revenues with this customer.

No customer represented more than 10% of total Company revenues for the year ended December 31, 2022.

The markets in which we operate are highly competitive.

1 unchanged sentence

We compete with Vault, divisions of SLB and TechnipFMC, and a large number of other companies.

We believe the rental market for frac stacks and related flow control equipment is more fragmented than the wellhead product market and do not believe any individual company represents more than 20% of the U.S.

In the Spoolable Technologies segment, we compete with companies who offer spoolable products, including Baker Hughes, Mattr, NOV and select other companies, and also companies who offer traditional steel line pipe, including Tenaris, Vallourec, and a large number of other line pipe manufacturers and distributors.

We believe the rental market for frac stacks and related flow control equipment is more fragmented than the wellhead product market, and we do not believe any individual company represents more than 20% of the U.S.

In the Spoolable Technologies segment, we compete with companies who offer spoolable products, including Baker Hughes, Mattr, NOV and select other companies, and companies who offer traditional steel line pipe, including Tenaris, Vallourec, and a large number of other line pipe manufacturers and distributors.

We believe the competitive factors in the markets we serve include technical features, equipment availability, work force competency, efficiency, safety record, reputation, continuity of management, and price.

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• national and local environmental protection laws in Australia, China, Canada and the Middle East.

New, modified or stricter enforcement of environmental laws and regulations could be adopted or implemented that significantly increase our compliance costs, pollution mitigation costs, or the cost of any remediation of environmental contamination that may become necessary, and these costs could be material.

New, modified or stricter enforcement of environmental laws and regulations could be adopted or implemented that may significantly increase our compliance costs, pollution mitigation costs, or the cost of any remediation of environmental contamination that may become necessary, and these costs could be material.

Our customers are also subject to most, if not all, of the same laws and regulations relating to environmental protection and occupational safety and health in the United States and in foreign countries where we operate.

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Climate Change.

State, national and foreign governments and agencies continue to evaluate, and in some instances adopt, climate-related legislation and other regulatory initiatives that would restrict emissions of greenhouse gases.

Local, state, national and foreign governments and agencies continue to evaluate, and in some instances adopt, climate-related legislation and other regulatory initiatives that would restrict emissions of greenhouse gases.

Changes in environmental requirements related to greenhouse gases, climate change and alternative energy sources may negatively impact demand for our services.

For example, oil and natural gas exploration and production may decline as a result of environmental requirements, including land use policies responsive to environmental concerns.

While the United States Department of the Interior (“DOI”) announced in April 2022 that it would resume oil and gas leasing on public lands, there was an 80% reduction in the number of acres offered and an increase in the royalties companies must pay.

In August 2023, the DOI proposed a scaled back offshore lease sale for certain areas in the Gulf of Mexico due to concerns related to an endangered whale population in the area.

The exclusion of certain lease blocks from the sale was successfully challenged in court, and the DOI was ordered to hold the lease sale at its original scale.

This decision was upheld by the U.S.

Court of Appeals for the Fifth Circuit on November 14, 2023, and the sale went forward as scheduled on December 20, 2023.

Oil and natural gas exploration and production may decline as a result of environmental requirements, including land use policies responsive to environmental concerns.

For example, in January 2025, President Biden issued a Memorandum of Withdrawal that could have had the effect of preventing future leasing by the federal government (and therefore oil and gas exploration) of the lands underlying federal waters offshore the U.S.

East Coast, the eastern Gulf of Mexico, the Pacific Ocean off the coasts of Washington, Oregon, and California, and additional portions of the Northern Bering Sea in Alaska.

The Trump Administration, however, overturned President Biden’s Memorandum of Withdrawal and issued a series of executive orders that signal a shift in the United States’ energy and climate change policies.

Future administrations may, however, pursue executive orders similar to, or more restrictive than, those put in place by President Biden.

The topic of oil and gas leasing on public land remains politically fraught.

In addition, the Biden administration has indicated that it is delaying consideration of new natural gas export terminals in the United States and to the extent that these developments or other initiatives to reform federal leasing practices result in the development of additional restrictions on drilling, limitations on the availability of leases, or restrictions on the ability to obtain required permits, it could impact our customers’ opportunities and reduce demand for our products and services in the aforementioned areas.

Because our business depends on the level of activity in the oil and natural gas industry, existing or future laws, regulations, treaties or international agreements related to greenhouse gases and climate change, may reduce demand for oil and natural gas and could have a negative impact on our business.

Likewise, such restrictions may result in additional compliance obligations that could have a material adverse effect on our business, consolidated results of operations and consolidated financial position.

In addition, our business could be impacted by initiatives to address greenhouse gases and climate change and incentives to conserve energy or use alternative energy sources.

In addition, our business could be negatively impacted by initiatives to address greenhouse gases and climate change and incentives to conserve energy or use alternative energy sources.

For example, the Inflation Reduction Act of 2022 (the “Inflation Reduction Act”) appropriates significant federal funding for the development of renewable energy, clean hydrogen, clean fuels, electric vehicles and supporting infrastructure and carbon capture and sequestration, amongst other provisions.

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The Inflation Reduction Act amends the federal Clean Air Act to impose a fee on the emission of methane from sources required to report their GHG emissions to the EPA, including those sources in the onshore petroleum and natural gas production categories.

The final rule implementing the waste emissions charge was published in November 2024.

These developments could further accelerate the transition of the U.S.

economy away from the use of fossil fuels towards lower- or zero-carbon emissions alternatives, which could reduce demand for our products and services and negatively impact our business.

In January 2025, however, the United States submitted formal notification to the United Nations that it intends to withdraw from the Paris Agreement and the President Trump signed executive orders that, among other things, direct federal executive departments and agencies to initiate a regulatory freeze for certain rules that have not taken effect, pending review by the newly appointed agency head, call upon the EPA to submit a report on the continuing applicability of its endangerment finding for GHGs under the Clean Air Act and issue guidance on the “social cost of carbon” to consider whether such metric should be eliminated, and pause the disbursement of funds appropriated through the Inflation Reduction Act and the Infrastructure Investments and Jobs Act.

Insurance and Risk Management

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Historically, insurance rates have been subject to various market fluctuations that may result in less coverage, increased premium costs, or higher deductibles or self‑insured retentions.

Our insurance includes coverage for commercial general liability, damage to our real and personal property, damage to our mobile equipment, pollution liability, workers’ compensation and employer’s liability, auto liability, foreign package policy, commercial crime, fiduciary liability employment practices, cargo, excess liability, and directors and officers’ insurance.

We also maintain a partially self-insured medical plan that utilizes specific and aggregate stop loss limits.

1 unchanged sentence

Human Capital Management

As of December 31, 2023, we employed almost 1,600 people worldwide, of which over 100 were employed outside of the United States, mainly in Australia and China.

As of December 31, 2024, we employed approximately 1,600 people worldwide, of which over 100 were employed outside of the United States, mainly in Australia and China.

We are not a party to any collective bargaining agreements and have not experienced any strikes or work stoppages.

We consider our relations with our workforce to be good.

Our success is highly dependent on our ability to attract, retain and motivate a diverse population of talented employees at all levels of our organization, including the individuals who comprise our global workforce, executive officers and other key personnel.

To thrive in a highly competitive industry, we have formulated essential strategies, objectives, and metrics for recruitment and retention.

These factors play a significant role in our comprehensive business management approach and our high levels of retention of key managers and associates.

Our talent strategy prioritizes the attraction, recognition, development, and retention of high-performing individuals.

To find qualified candidates, we encourage and reward employee referrals, utilize several social media platforms, participate in regional job fairs and establish partnerships with educational organizations throughout the United States.

Furthermore, we collaborate with local workforce commissions to ensure that we attract a diverse and highly capable pool of candidates in all regions where we operate.

We consider our relations with our workforce to be strong.

Our success is intrinsically tied to our ability to attract, retain, and inspire a diverse and talented team across all levels of our organization.

This includes our global workforce, executive leadership, and other key personnel.

Operating in a highly competitive industry, we have developed and implemented targeted strategies, objectives, and metrics for recruitment and retention.

These initiatives are integral to our overall business management approach, contributing to our ability to maintain high retention rates among key managers and associates while fostering a dynamic and motivated workforce.

Our talent strategy focuses on attracting, recognizing, developing, and retaining top-performing individuals.

To identify and secure exceptional talent, we actively encourage and reward employee referrals, leverage multiple social media platforms, and participate in regional job fairs.

Additionally, we build strategic partnerships with educational institutions across the United States and collaborate with local workforce commissions.

These efforts ensure we maintain a diverse and highly skilled candidate pool in every region where we operate.

Training and Development.

We are dedicated to our employees’ training and development, especially those in field, plant and branch operations.

We offer extensive internal training programs that prioritize and monitor their technical and safety skills.

Our internal training focuses on safety, corporate and personal responsibility, product knowledge, behavioral development and ethical conduct.

Our career development plans are designed to enable individuals to acquire the necessary technical knowledge to perform their jobs with utmost safety and precision.

External training courses are attended by employees with specialized skills, knowledge or certifications as needed for their ongoing success and professional development.

We believe our continued focus on training and development translates into a safer work environment, opportunities to promote within the organization, improved employee morale and increased employee retention.

Diversity and Inclusion.

We believe that diversity and inclusion are integral to our success and essential to fostering innovation and sustainable growth.

We are dedicated to cultivating a workplace that embraces differences and ensures everyone feels valued, respected and empowered to contribute their unique perspectives.

We are committed to creating and maintaining a workplace culture that is diverse, inclusive, and free from discrimination.

This commitment extends across all aspects of our business, from hiring and promotion practices to employee development and supplier relationships.

We are deeply committed to the training and development of our employees, with a special emphasis on those in field, plant, and branch operations.

Our comprehensive internal training programs are designed to enhance and monitor technical and safety skills while fostering growth in key areas such as safety practices, corporate and personal responsibility, product knowledge, behavioral development, and ethical conduct.

To support career advancement, our development plans equip individuals with the technical expertise needed to perform their roles with the highest levels of safety and precision.

For employees requiring specialized skills, knowledge, or certifications, we provide access to external training opportunities tailored to their professional growth.

We believe that our unwavering focus on training and development not only fosters a safer work environment but also creates pathways for internal promotions, boosts employee morale, and strengthens retention across the organization.

Workplace Culture.

We believe our workplace culture is fundamental to our success, driving innovation, creativity, and sustainable growth.

Our commitment is to nurture a workplace culture that values every individual, and empowers everyone to contribute their unique perspectives.

We are dedicated to fostering an environment where discrimination has no place.

This commitment is reflected in every aspect of our business—from recruitment and promotion practices to employee development initiatives and supplier partnerships.

Our workforce comprises a diverse associate group, with approximately 10% women and approximately 46% of our workforce representing a minority population.

By cultivating a diverse environment, we strengthen our organization, enrich our workplace culture, and ensure long-term success.

Compensation and Benefits.

We offer comprehensive compensation and benefits programs designed to address the needs of our employees and their families.

Along with competitive salaries and wages, our benefits programs (which may vary by country) include annual bonuses, retirement plans such as a 401(k) plan, healthcare and insurance benefits, health savings accounts partially funded by the Company, standard flexible spending accounts, personal legal services insurance, company-sponsored long and short term disability, accident and critical illness, paid time off, family leave, partially paid maternity and paternity leave, family care resources and employee assistance programs, among others.

We also offer tuition reimbursement in certain circumstances to support our employees’ continued growth and development.

Additionally, we use targeted equity-based grants with vesting conditions to facilitate the retention of key personnel.

We provide comprehensive compensation and benefits programs thoughtfully designed to address the diverse needs of our employees and their families.

Our approach goes beyond offering competitive salaries and wages, incorporating a wide range of benefits to promote financial security, health, wellness, and professional growth.

Our financial benefits include annual bonuses and retirement plans, such as a 401(k), to help employees build long-term financial stability.

We also utilize targeted equity-based grants with vesting conditions to support the retention of key personnel, aligning their success with the Company's growth.

To promote health and wellness, we offer competitive healthcare and insurance options, including health savings accounts partially funded by the Company and standard flexible spending accounts.

Employees also have access to company-sponsored long- and short-term disability coverage, accident and critical illness insurance, and resources to support overall well-being.

Recognizing the importance of work-life balance, we provide paid time off, family leave, and paid maternity and paternity leave.

Our commitment to supporting families extends further with access to family care resources and personal legal services insurance.

Additionally, employee assistance programs are available to help navigate personal and professional challenges.

We also invest in our employees’ professional development by offering tuition reimbursement in certain circumstances, enabling continued growth and skill development.

Through this holistic approach to compensation and benefits, we aim to create a supportive and empowering environment that fosters employee satisfaction, enhances retention, and ensures the long-term success of both our employees and the organization.

Health and Safety.

Our health and safety programs are designed around global standards with appropriate variations addressing the multiple jurisdictions and regulations, specific hazards and unique working environments of our manufacturing and production facilities, service centers and headquarters.

and production facilities, service centers and headquarters.

We require each location to conduct regular safety evaluations to verify that expectations for safety program procedures and training are being met.

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During fiscal year 2024, our Pressure Control segment reported a TRIR of 0.81, which compares to 1.19 in 2023, with no work-related fatalities in either year.

Our Spoolable Technologies segment reported a TRIR of 0.98 for fiscal year 2023 with no work-related fatalities.

Our Spoolable Technologies segment reported a TRIR of 1.26 for fiscal year 2024, compared to 0.98 in 2023, with no work-related fatalities.

Based on the most recent statistics available from the International Association of Drilling Contractors, our TRIR statistics are in line with the industry average.

10 unchanged sentences

Steven Bender Chief Operating Officer

Stephen Tadlock Executive Vice President, Chief Executive Officer of the Spoolable Technologies segment and Treasurer

Alan Keifer Interim Chief Financial Officer

Stephen Tadlock Executive Vice President, Chief Executive Officer of the Spoolable Technologies segment

Executive Vice President, Chief Financial Officer, and Treasurer

William Marsh Executive Vice President, General Counsel and Corporate Secretary

Donna Anderson Vice President and Chief Accounting Officer

Information About Our Board of Directors

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Melissa Law President of Global Operations for Tate & Lyle

Michael McGovern Executive Chairman of the board of directors of Superior Energy Services, Inc.

Michael McGovern Former Executive Chairman of the board of directors of Superior Energy Services, Inc.

John (Andy) O’Donnell Former Vice President and executive officer of Baker Hughes Incorporated

1 unchanged sentence

Bruce Rothstein Former Member and co-founder of Cadent Energy Partners LLC

Alan Semple Director of Teekay Corporation

Alan Semple Director of Teekay Tankers Ltd

Tym Tombar Managing Director and Co-Founder of Arcadius Capital Partners

5 unchanged sentences

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-K

Item 1. Business