ProPetro Holding Corp. ("ProPetro" or "the Company") (NYSE:
PUMP) today announced financial and operational results for the
second quarter of 2024.
Second Quarter 2024 Results and Highlights
- Total revenue of $357 million decreased 12% compared to the
prior quarter.
- Net loss was $4 million ($0.03 loss per diluted share) as
compared to net income of $20 million in the prior quarter ($0.18
income per diluted share).
- Adjusted EBITDA(1) of $66 million was 19% of revenue and
decreased 29% compared to the prior quarter.
- Net cash provided by operating activities was $105 million with
Free Cash Flow(2) of $48 million.
- Year-to-date net cash provided by operating activities, Free
Cash Flow and Free Cash Flow adjusted for Acquisition
Consideration(2) were $180 million, $89 million, and $110 million,
respectively.
- Four FORCESM electric hydraulic fracturing fleets are
now under contract to leading customers with three FORCESM
electric fleets currently operating.
- Placed an order for our fifth FORCESM electric fleet to
be delivered and deployed in 2024.
- Effective frac fleet utilization was 15.5 fleets compared to
15.0 fleets in the prior quarter.
- Acquired Aqua Prop LLC ("AquaPropSM"), an innovative
provider of cost-effective wet sand solutions.
- Repurchased and retired 2.5 million shares during the quarter
with total repurchases of 11.3 million shares representing
approximately 10% of outstanding shares since plan inception in May
2023.
(1)
Adjusted EBITDA is a non-GAAP financial
measure and is described and reconciled to net income (loss) in the
table under “Non-GAAP Financial Measures.”
(2)
Free Cash Flow and Free Cash Flow adjusted
for Acquisition Consideration are non-GAAP financial measures and
are described and reconciled to net cash from operating activities
in the table under “Non-GAAP Financial Measures."
Management Comments
Sam Sledge, Chief Executive Officer, commented, "In the second
quarter of 2024, despite industry challenges, ProPetro's strategic
focus on industrializing our business and creating long term value
remains strong. We continue to generate strong free cash flow,
showcasing the effectiveness of our strategy. Our ongoing
transition from diesel equipment to FORCESM electric
equipment remains on track, bolstering our competitive edge both
commercially and operationally. Our recent acquisitions, including
AquaPropSM, highlight our disciplined approach to value
accretive M&A and in the face of a challenging energy services
landscape, ProPetro's strategic initiatives are delivering. Our
transformational efforts, including fleet optimization, share
repurchases, and opportunistic acquisitions, have bolstered our
financial resilience and positioned us favorably amidst industry
headwinds. Demand for our bifurcated services remains strong,
underscored by our commitment to operational excellence and the
deployment of innovative technologies like our FORCESM
electric equipment. With a clear focus on industrialization and
disciplined capital allocation, we are confident in our ability to
sustain strong free cash flow and drive long-term value for our
stakeholders."
David Schorlemer, Chief Financial Officer, said, "Our second
quarter results reflect a remarkable turnaround unfolding at
ProPetro, one of reliable free cash flow generation. While revenues
and profitability were impacted by some customer delays and pricing
pressures predominantly on our Tier II diesel frac fleets, capital
spending remained low driving a fifth consecutive quarter of strong
free cash flow. Another key aspect of our strategy has been
selective M&A to complement our existing businesses and drive
incremental free cash flow per share. Since acquiring Silvertip, we
have repurchased and retired more than 100% of the number of shares
issued to Silvertip shareholders during the acquisition.
Additionally, we are continuing to benefit from the high EBITDA to
free cash flow conversion of this segment. We expect our
disciplined investments and consistent operations to continue to
drive more durable free cash flow today and in the future."
Second Quarter 2024 Financial Summary
Revenue was $357 million, compared to $406 million for the first
quarter of 2024. The 12% decrease in revenue was largely
attributable to customer delays, pricing pressures particularly on
our Tier II diesel assets, and weather impact in our hydraulic
fracturing and wireline businesses during the quarter.
Cost of services, excluding depreciation and amortization of
approximately $56 million relating to cost of services, decreased
to $266 million from $289 million during the first quarter of
2024.
General and administrative expense of $31 million increased from
$28 million in the first quarter of 2024. G&A expense excluding
nonrecurring and noncash items (stock-based compensation,
transaction expense, and other items) of $6 million, was $25
million, or 7% of revenue.
Net loss totaled $4 million, or $0.03 per diluted share,
compared to net income of $20 million, or $0.18 per diluted share,
for the first quarter of 2024.
Adjusted EBITDA decreased to $66 million from $93 million in the
first quarter of 2024 primarily related to decreased revenues noted
above.
Net cash provided by operating activities was $105 million as
compared to $75 million in the prior quarter. Free Cash Flow was
approximately $48 million as compared to Free Cash Flow of
approximately $41 million in the prior quarter.
Share Repurchase Program
On April 24, 2024, the Company announced a $100 million increase
to its share repurchase program increasing it to a total of $200
million while extending the plan to May 2025. During the quarter,
the Company repurchased and retired 2.5 million shares for $23
million. Since inception, the Company has acquired and retired 11.3
million shares representing approximately 10% of its outstanding
shares as of the date of plan inception.
Liquidity and Capital Spending
As of June 30, 2024, total cash was $67 million and our
borrowings under the ABL Credit Facility were $45 million. Total
liquidity at the end of the second quarter of 2024 was $145 million
including cash and $78 million of available capacity under the ABL
Credit Facility.
Capital expenditures during the second quarter of 2024 were
primarily related to maintenance and support equipment for our
FORCESM electric hydraulic fracturing fleet deployments. Net
cash used in investing activities during the second quarter of 2024
was $57 million of which $21 million was related to the acquisition
of AquaPropSM.
Guidance
The Company is now reducing our full-year 2024 capital
expenditure guidance to be between $175 million to $200 million,
down from our prior guidance of $200 million to $250 million.
Our effective frac fleet utilization for the second quarter was
15.5 fleets, which was above the guidance range we had provided.
Thanks to efficiencies exceeding our expectations from previous
years, we are shifting away from reporting on fleet utilization
based on days worked. Instead, we'll focus on guiding and reporting
the number of active frac fleets, which we believe better
represents asset utilization in our hydraulic fracturing business.
During the second quarter, 14 hydraulic fracturing fleets were
active and we expect to run approximately 14 active frac fleets in
the third quarter of 2024.
Outlook
Mr. Sledge added, “Looking ahead, we expect the second half of
the year to play out similarly to the first half. Our bifurcated
fleet offering paired with a first class operating team is
contributing to industry-leading efficiencies and high customer
satisfaction. The demand for our FORCESM electric equipment
continues to outstrip our current supply and that demand coupled
with the continued integration of our recent acquisitions should
support even more resilient earnings as we progress through the
balance of this year and beyond. Additionally, with our strong
balance sheet and steady free cash flow generation, we continue to
make excellent progress on all our strategic priorities, and we
will continue to evaluate opportunities to further enhance
financial returns and the overall competitiveness of our
offering.”
Mr. Sledge concluded, “Our strategy is designed to navigate the
current market environment and drive long-term value. With a focus
on operational excellence, advanced technology adoption, and a
sound financial footing, ProPetro has minimized the volatility
present in past cycles and is well-prepared to capitalize on the
opportunities ahead.”
Conference Call Information
The Company will host a conference call at 8:00 AM Central Time
on Wednesday, July 31, 2024, to discuss financial and operating
results for the second quarter of 2024. The call will also be
webcast on ProPetro’s website at www.propetroservices.com. To
access the conference call, U.S. callers may dial toll free
1-844-340-9046 and international callers may dial 1-412-858-5205.
Please call ten minutes ahead of the scheduled start time to ensure
a proper connection. A replay of the conference call will be
available for one week following the call and can be accessed toll
free by dialing 1-877-344-7529 for U.S. callers, 1-855-669-9658 for
Canadian callers, as well as 1-412-317-0088 for international
callers. The access code for the replay is 9918646. The Company has
also posted the scripted remarks on its website.
About ProPetro
ProPetro Holding Corp. is a Midland, Texas-based provider of
premium completion services to leading upstream oil and gas
companies engaged in the exploration and production of North
American unconventional oil and natural gas resources. We help
bring reliable energy to the world. For more information visit
www.propetroservices.com.
Forward-Looking Statements
Except for historical information contained herein, the
statements and information in this news release and discussion in
the scripted remarks described above are forward-looking statements
that are made pursuant to the Safe Harbor Provisions of the Private
Securities Litigation Reform Act of 1995. Statements that are
predictive in nature, that depend upon or refer to future events or
conditions or that include the words “may,” “could,” "confident,"
“plan,” “project,” “budget,” "design," “predict,” “pursue,”
“target,” “seek,” “objective,” “believe,” “expect,” “anticipate,”
“intend,” “estimate,” “will,” “should,” and other expressions that
are predictions of, or indicate, future events and trends or that
do not relate to historical matters generally identify
forward‑looking statements. Our forward‑looking statements include,
among other matters, statements about the supply of and demand for
hydrocarbons, industry trends and activity levels, our business
strategy, projected financial results and future financial
performance, expected fleet utilization, sustainability efforts,
the future performance of newly improved technology, expected
capital expenditures, the impact of such expenditures on our
performance and capital programs, our fleet conversion strategy and
our share repurchase program. A forward‑looking statement may
include a statement of the assumptions or bases underlying the
forward‑looking statement. We believe that we have chosen these
assumptions or bases in good faith and that they are
reasonable.
Although forward‑looking statements reflect our good faith
beliefs at the time they are made, forward-looking statements are
subject to a number of risks and uncertainties that may cause
actual events and results to differ materially from the
forward-looking statements. Such risks and uncertainties include
the volatility of oil prices, the global macroeconomic uncertainty
related to the conflict in the Israel-Gaza region and continued
hostilities in the Middle East, including rising tensions with
Iran, and the Russia-Ukraine war, general economic conditions,
including the impact of continued inflation, central bank policy
actions, bank failures, and the risk of a global recession, and
other factors described in the Company's Annual Report on Form 10-K
and Quarterly Reports on Form 10-Q, particularly the “Risk Factors”
sections of such filings, and other filings with the Securities and
Exchange Commission (the “SEC”). In addition, the Company may be
subject to currently unforeseen risks that may have a materially
adverse impact on it. Accordingly, no assurances can be given that
the actual events and results will not be materially different than
the anticipated results described in the forward-looking
statements. Readers are cautioned not to place undue reliance on
such forward-looking statements and are urged to carefully review
and consider the various disclosures made in the Company’s Annual
Report on Form 10-K, Quarterly Reports on Form 10-Q and other
filings made with the SEC from time to time that disclose risks and
uncertainties that may affect the Company’s business. The
forward-looking statements in this news release are made as of the
date of this news release. ProPetro does not undertake, and
expressly disclaims, any duty to publicly update these statements,
whether as a result of new information, new developments or
otherwise, except to the extent that disclosure is required by
law.
PROPETRO HOLDING CORP.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per
share data)
(Unaudited)
Three Months Ended
June 30, 2024
March 31, 2024
June 30, 2023
REVENUE - Service revenue
$
357,021
$
405,843
$
435,249
COSTS AND EXPENSES
Cost of services (exclusive of
depreciation and amortization)
265,845
288,641
297,791
General and administrative (inclusive of
stock-based compensation)
30,910
28,226
29,021
Depreciation and amortization
57,522
52,206
41,118
Loss on disposal of assets
3,277
6,458
14,836
Total costs and expenses
357,554
375,531
382,766
OPERATING (LOSS) INCOME
(533
)
30,312
52,483
OTHER (EXPENSE) INCOME:
Interest expense
(1,965
)
(2,029
)
(1,180
)
Other income (expense), net
2,403
1,405
72
Total other (expense) income, net
438
(624
)
(1,108
)
INCOME (LOSS) BEFORE INCOME TAXES
(95
)
29,688
51,375
INCOME TAX BENEFIT (EXPENSE)
(3,565
)
(9,758
)
(12,118
)
NET (LOSS) INCOME
$
(3,660
)
$
19,930
$
39,257
NET (LOSS) INCOME PER COMMON SHARE:
Basic
$
(0.03
)
$
0.18
$
0.34
Diluted
$
(0.03
)
$
0.18
$
0.34
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING:
Basic
106,303
108,540
114,737
Diluted
106,303
108,989
114,796
NOTE: Certain reclassifications to loss on
disposal of assets and depreciation and amortization have been made
to the statement of operations and the statement of cash flows for
the periods prior to 2024 to conform to the current period
presentation.
PROPETRO HOLDING CORP.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except share
data)
(Unaudited)
June 30, 2024
December 31, 2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
66,886
$
33,354
Accounts receivable - net of allowance for
credit losses of $236 and $236, respectively
220,699
237,012
Inventories
18,742
17,705
Prepaid expenses
11,870
14,640
Short-term investment, net
7,797
7,745
Other current assets
1,153
353
Total current assets
327,147
310,809
PROPERTY AND EQUIPMENT - net of
accumulated depreciation
923,213
967,116
OPERATING LEASE RIGHT-OF-USE ASSETS
125,546
78,583
FINANCE LEASE RIGHT-OF-USE ASSETS
40,411
47,449
OTHER NONCURRENT ASSETS:
Goodwill
26,754
23,624
Intangible assets - net of
amortization
67,384
50,615
Other noncurrent assets
1,872
2,116
Total other noncurrent assets
96,010
76,355
TOTAL ASSETS
$
1,512,327
$
1,480,312
LIABILITIES AND SHAREHOLDERS’
EQUITY
CURRENT LIABILITIES:
Accounts payable
$
158,907
$
161,441
Accrued and other current liabilities
87,663
75,616
Operating lease liabilities
30,349
17,029
Finance lease liabilities
18,625
17,063
Total current liabilities
295,544
271,149
DEFERRED INCOME TAXES
103,462
93,105
LONG-TERM DEBT
45,000
45,000
NONCURRENT OPERATING LEASE LIABILITIES
58,560
38,600
NONCURRENT FINANCE LEASE LIABILITIES
23,013
30,886
OTHER LONG-TERM LIABILITIES
10,900
3,180
Total liabilities
536,479
481,920
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY:
Preferred stock, $0.001 par value,
30,000,000 shares authorized, none issued, respectively
—
—
Common stock, $0.001 par value,
200,000,000 shares authorized, 104,524,320 and 109,483,281 shares
issued, respectively
105
109
Additional paid-in capital
890,439
929,249
Retained earnings
85,304
69,034
Total shareholders’ equity
975,848
998,392
TOTAL LIABILITIES AND SHAREHOLDERS’
EQUITY
$
1,512,327
$
1,480,312
PROPETRO HOLDING CORP.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended June
30,
2024
2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
$
16,270
$
67,990
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
109,728
79,389
Deferred income tax expense
10,357
18,897
Amortization of deferred debt issuance
costs
217
140
Stock-based compensation
8,360
7,294
Loss on disposal of assets
9,735
49,443
Unrealized (gain) loss on short-term
investment
(52
)
3,846
Changes in operating assets and
liabilities, net of effects of business acquisition:
Accounts receivable
26,641
(35,178
)
Other current assets
(568
)
(983
)
Inventories
(1,036
)
(6,792
)
Prepaid expenses
2,797
(144
)
Accounts payable
(5,254
)
(3,160
)
Accrued and other current liabilities
2,568
6,272
Net cash provided by operating
activities
179,763
187,014
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures
(71,805
)
(223,775
)
Business acquisition, net of cash
acquired
(21,038
)
—
Proceeds from sale of assets
1,920
2,044
Net cash used in investing activities
(90,923
)
(221,731
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings
—
30,000
Payment of debt issuance costs
—
(1,179
)
Payments on finance lease obligations
(8,542
)
—
Tax withholdings paid for net settlement
of equity awards
(1,270
)
(3,383
)
Share repurchases
(45,496
)
(17,470
)
Net cash (used in) provided by financing
activities
(55,308
)
7,968
NET INCREASE (DECREASE) IN CASH, CASH
EQUIVALENTS AND RESTRICTED CASH
33,532
(26,749
)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH
- Beginning of period
33,354
88,862
CASH, CASH EQUIVALENTS AND RESTRICTED CASH
- End of period
$
66,886
$
62,113
Reportable Segment Information
Three Months Ended June 30,
2024
(in thousands)
Hydraulic Fracturing
Wireline
All Other
Reconciling Items
Total
Service revenue
$
271,628
$
49,202
$
36,277
$
(86
)
$
357,021
Adjusted EBITDA
$
63,623
$
10,793
$
6,583
$
(14,937
)
$
66,062
Depreciation and amortization
$
50,082
$
5,129
$
2,279
$
32
$
57,522
Operating lease expense on FORCESM fleets
(1)
$
11,533
$
—
$
—
$
—
$
11,533
Capital expenditures incurred
$
25,631
$
1,943
$
4,376
$
—
$
31,950
Three Months Ended March 31,
2024
(in thousands)
Hydraulic Fracturing
Wireline
All Other
Reconciling Items
Total
Service revenue
$
309,300
$
60,805
$
35,738
$
—
$
405,843
Adjusted EBITDA
$
86,119
$
16,786
$
4,861
$
(14,371
)
$
93,395
Depreciation and amortization
$
44,995
$
4,915
$
2,271
$
25
$
52,206
Operating lease expense on FORCESM fleets
(1)
$
8,592
$
—
$
—
$
—
$
8,592
Capital expenditures incurred
$
35,988
$
2,386
$
1,466
$
—
$
39,840
(1)
Represents lease cost related to operating
leases on our FORCESM electric-powered hydraulic fracturing fleets.
This cost is recorded within cost of services in our condensed
consolidated statements of operations.
Non-GAAP Financial Measures
Adjusted EBITDA, Free Cash Flow and Free Cash Flow adjusted for
Acquisition Consideration are not financial measures presented in
accordance with GAAP. We define EBITDA as net income (loss) plus
(i) interest expense, (ii) income tax expense (benefit) and (iii)
depreciation and amortization. We define Adjusted EBITDA as EBITDA
plus (i) loss (gain) on disposal of assets, (ii) stock-based
compensation, (iii) other expense (income), (iv) other unusual or
nonrecurring (income) expenses such as costs related to asset
acquisitions, insurance recoveries, one-time professional fees and
legal settlements and (v) retention bonus and severance expense. We
define Free Cash Flow as net cash provided by operating activities
less net cash used in investing activities. We define Free Cash
Flow adjusted for Acquisition Consideration as Free Cash Flow
excluding net cash paid as consideration for business
acquisitions.
We believe that the presentation of these non-GAAP financial
measures provide useful information to investors in assessing our
financial condition and results of operations. Net income (loss) is
the GAAP measure most directly comparable to Adjusted EBITDA, and
net cash from operating activities is the GAAP measure most
directly comparable to Free Cash Flow and Free Cash Flow adjusted
for Acquisition Consideration. Non-GAAP financial measures should
not be considered as alternatives to the most directly comparable
GAAP financial measures. Non-GAAP financial measures have important
limitations as analytical tools because they exclude some, but not
all, items that affect the most directly comparable GAAP financial
measures. You should not consider Adjusted EBITDA, Free Cash Flow
or Free Cash Flow adjusted for Acquisition Consideration in
isolation or as a substitute for an analysis of our results as
reported under GAAP. Because Adjusted EBITDA, Free Cash Flow and
Free Cash Flow adjusted for Acquisition Consideration may be
defined differently by other companies in our industry, our
definitions of these non-GAAP financial measures may not be
comparable to similarly titled measures of other companies, thereby
diminishing their utility.
Reconciliation of Net Income to
Adjusted EBITDA
Three Months Ended
(in thousands)
June 30, 2024
March 31, 2024
Net (loss) income
$
(3,660
)
$
19,930
Depreciation and amortization
57,522
52,206
Interest expense
1,965
2,029
Income tax expense
3,565
9,758
Loss on disposal of assets
3,277
6,458
Stock-based compensation
4,618
3,742
Other income, net (1)
(2,403
)
(1,405
)
Other general and administrative expense,
net
1,113
59
Retention bonus and severance expense
65
618
Adjusted EBITDA
$
66,062
$
93,395
(1)
Other income for the three months ended
June 30, 2024 is primarily comprised of tax refunds of $1.7 million
and a $0.7 unrealized gain on short-term investment. Other income
for the three months ended March 31, 2024 includes insurance
reimbursements of $2.0 million, partially offset by $0.6 million
unrealized loss on short-term investment.
Reconciliation of Cash Flows from
Operating Activities to Free Cash Flow and Free Cash Flow adjusted
for Acquisition Consideration
Three Months Ended
Six Months Ended
(in thousands)
June 30, 2024
March 31, 2024
June 30, 2024
June 30, 2023
Net Cash provided by Operating
$
104,941
$
74,822
$
179,763
$
187,014
Net Cash used in Investing Activities
(57,076
)
(33,847
)
(90,923
)
(221,731
)
Free Cash Flow
47,865
40,975
88,840
(34,717
)
Acquisition Consideration
21,038
—
21,038
—
Free Cash Flow adjusted for Acquisition
Consideration
$
68,903
$
40,975
$
109,878
$
(34,717
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240731909321/en/
Investor Contacts: David Schorlemer Chief Financial
Officer david.schorlemer@propetroservices.com 432-227-0864
Matt Augustine Director, Corporate Development and Investor
Relations matt.augustine@propetroservices.com 432-219-7620
ProPetro (NYSE:PUMP)
Graphique Historique de l'Action
De Nov 2024 à Déc 2024
ProPetro (NYSE:PUMP)
Graphique Historique de l'Action
De Déc 2023 à Déc 2024