Cactus, Inc. (NYSE: WHD) reported Q2 EPS of $0.10, $0.11 better than the analyst estimate of ($0.01). Revenue for the quarter came in at $66.5 million versus the consensus estimate of $60.8 million.

Second Quarter Highlights

• Revenue of $66.5 million;
• Income from operations of $8.9 million;
• Net income of $9.1 million(1) and diluted earnings per Class A share of $0.11(1);
• Net income, as adjusted(2) of $7.4 million and diluted earnings per share, as adjusted(2) of $0.10;
• Adjusted EBITDA(3) and related margin(4) of $22.5 million and 33.8%, respectively;
• Cash flow from operations of $57.4 million;
• Cash balance of $270.7 million and no debt outstanding as of June 30, 2020; and
• The Board of Directors declared a quarterly cash dividend of $0.09 per share.

Scott Bender, President and CEO of Cactus, commented, “Given the unprecedented decline in oilfield activity, I am pleased with our results for the second quarter. The quarter highlighted the variable cost nature of the Company, which has now effected total payroll-related savings of an estimated $85 million on an annualized basis. Importantly, the second quarter highlighted the Company’s ability to generate significant free cash flow, with cash growing by over $40 million during the period, net of nearly $7 million in dividends and associated distributions. Although market share(1) was volatile during the period, we recorded approximately 33% share as of June with a further expansion achieved by mid-July.

“While the overall U.S. rig count may trend lower in the near term, we believe that Cactus’ rigs followed bottomed around mid-year assuming commodity prices hold near current levels. I am encouraged by the swift rebound in oil prices from April lows, which provides optimism for a potential improvement in completion activity versus late second quarter levels. Nonetheless, as total Company revenues for the third quarter are likely to be down sequentially, we will continue to manage our costs as appropriate.”

Mr. Bender concluded, “Our cost structure is highly variable, our capital requirements are modest, and our management team is well aligned with our shareholders. Accordingly, returns and free cash flow remain our top priorities. This downturn provides us with the opportunity to further streamline our cost structure and emerge as a stronger company in a more favorable competitive environment.”

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