Cactus, Inc. (NYSE: WHD) reported Q3 EPS of $0.13, $0.12 better than the analyst estimate of $0.01. Revenue for the quarter came in at $59.8 million versus the consensus estimate of $55.41 million.

Third Quarter Highlights

• Revenue of $59.8 million;
• Income from operations of $12.6 million;
• Net income of $10.9 million(1) and diluted earnings per Class A share of $0.13(1);
• Net income, as adjusted(2) of $9.5 million and diluted earnings per share, as adjusted(2) of $0.13;
• Adjusted EBITDA(3) and related margin(4) of $24.6 million and 41.1%, respectively;
• Cash flow from operations of $18.9 million;
• Reduced 2020 net capital expenditure guidance to between $17.5 and $22.5 million;
• Cash balance of $273.9 million and no bank debt outstanding as of September 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, “The third quarter once again showcased our ability to outperform the U.S. rig count while maintaining strong margins during what we believe was the bottom of the current U.S. industry cycle. Cactus achieved record Product market share(1) of approximately 38% during the third quarter, highlighting the resiliency of our customer base and our track record of winning new customers. I am also pleased to report that Cactus has now generated positive free cash flow in all eleven quarters since going public in early 2018.

“Looking to the fourth quarter, we expect further gains in rigs followed and associated market share will benefit our Product business. While the near-term focus for our Rental business will continue to be on returns and margins, we are encouraged by the recent improvement in industry completion activity. We believe that total Company quarterly revenues have bottomed and expect an improvement going forward.”

Mr. Bender concluded, “Cactus has proven its ability to generate significant free cash flow and income through the downcycle. In the same vein, management has also further reduced its full year 2020 net capital expenditure budget. We believe the industry's most pronounced activity decline in decades is behind us and we are now turning our attention to the recovery. This team is excited to see the potential benefits that greater operating leverage provides our business as activity levels increase, both in the U.S. and internationally.”

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