Le Lézard
Classified in: Oil industry, Business
Subjects: ERN, ERP

ProFrac Holding Corp. Reports Strong 2022 First Quarter Financial and Operational Results


Full Year 2022 Outlook Continues to Improve

WILLOW PARK, Texas, June 16, 2022 /PRNewswire/ -- ProFrac Holding Corp. (NASDAQ: PFHC) ("ProFrac" or the "Company") today announced financial and operational results for its first quarter ended March 31, 2022.                                                                                         

First Quarter 2022 Results and Recent Highlights

Ladd Wilks, ProFrac Holding Corp.'s Chief Executive Officer, stated, "We are very pleased to have closed on the FTSI acquisition in March.  The value created with this acquisition far exceeds our expectations in terms of timing and magnitude.  We are also pleased to have completed our initial public offering on May 13, 2022.  We view this as a great starting point in creating a preeminent energy investment vehicle with the best teams focused on maximizing shareholder value and generating free cash flow through-the-cycle.  If we continue to execute on our plan as expected, we hope to explore options to return cash to shareholders."

Matt Wilks, Executive Chairman, added, "Our first quarter results came in slightly ahead of our internal expectations and market demand continued to increase into the second quarter.  Looking forward, combining this momentum with the price increases that went into effect in April on the acquired FTSI fleets, we now estimate that we will be operating 31 average active fleets for the entire second quarter and expect approximately $23-$25 million of annualized Adjusted EBITDA per fleet(3) in the second quarter.

"We are even more excited about our near-term and long-term growth opportunities based on our two-prong strategy to Acquire, Retire, Replace,(tm)combined with scaling our vertical integration model.  We believe this two-prong growth strategy enables us to drive revenue, improve margins, further enhance free cash flow and improve our through-cycle positioning." 

First Quarter 2022 Financial Results

For the first quarter of 2022, consolidated revenues totaled $345.0 million, or approximately $63.6 million per fleet on an annualized basis.  SG&A was $34.1 million and included $13.0 million of transaction costs related to the FTSI acquisition.  Net income was $24.1 million.  Adjusted EBITDA totaled $91.5 million in the first quarter of 2022, or $16.9 million per fleet on an annualized basis. 

With 17 average active fleets before the FTSI acquisition and 31 average active fleets for the month of March post acquisition, the Company's average active fleet count for the 2022 first quarter was 21.7 fleets. 

Business Segment Information

The Stimulation Services segment generated revenues in the first quarter of 2022 of $336.2 million, which resulted in $73.6 million of Adjusted EBITDA.  The FTSI acquisition contributed $48.6 million in revenue, or 14%, which included approximately one month's revenue during the quarter.  

The Manufacturing segment generated revenues of $32.0 million in the first quarter of 2022, which resulted in $10.0 million of Adjusted EBITDA.  Approximately 84% of the Manufacturing segment's revenue was intercompany.   

The Proppant Production segment generated revenues of $12.4 million in the first quarter of 2022, which resulted in $7.9 million of Adjusted EBITDA.  Approximately 69% of the Proppant Production segment's revenue was intercompany.

Second Quarter 2022 Outlook

Looking at the second quarter of 2022, the Company expects strong growth in revenues and substantial improvements to profitability compared to the first quarter of 2022, driving annualized Adjusted EBITDA per fleet to approximately $23-$25 million per fleet. The primary contributor of the anticipated increased profitability is due to April's resetting of FTSI fleets to current market pricing as well as incremental fleets added from the acquisition.

Capital Expenditures and Capital Allocation

Capital expenditures for full year 2022 are expected to range from $240 million to $290 million, consisting of maintenance capex, growth capex, three electric fleets that are under construction, and the West Munger sand plant that is also under construction.  The electric fleets and the West Munger sand plant are expected to be operational in the third quarter of this year.  

Balance Sheet and Liquidity

Total debt outstanding as of March 31, 2022 was $625.6 million, compared to $301.6 million as of December 31, 2021. As of March 31, 2022, cash and equivalents totaled $28.7 million.  Total liquidity as of March 31, 2022 was $108.8 million, including net availability of $80.1 million under our asset-based credit facility.  On April 8, 2022, the Company increased the size of its ABL to $200 million.

The Company's IPO and the subsequent exercise of the overallotment resulted in approximately $304 million in proceeds, net of the underwriting discount and other estimated fees. This reduced total debt outstanding by approximately $225 million.  The amount outstanding under the term loan is $306 million as of June 10, 2022.  Also in June, the Equify Bridge Loan, the Backstop Note, and the Closing Date Note were fully paid off with proceeds of the IPO.

FTSI Acquisition

On March 4, 2022, the Company acquired the outstanding stock of FTS International, Inc. ("FTSI") for a purchase price of $405.7 million, consisting of cash consideration of $332.8 million paid in the first quarter and $72.9 million paid in connection with the IPO in the second quarter of 2022. For additional information related to the acquisition, please reference the Company's press releases available on its website at https://ir.pfholdingscorp.com/news-events/press-releases.

(1) Adjusted EBITDA is a financial measure not presented in accordance with generally accepted accounting principles ("GAAP") (a "Non-GAAP Financial Measure").  Please see "Non-GAAP Financial Measures" at the end of this news release.

(2) Proforma for the FTSI acquisition assumes that FTSI was acquired on 1/1/2022, in which case our combined first quarter revenue and adjusted EBITDA would have totaled $421.6 million and $99.4 million, respectively.

(3) Adjusted EBITDA per fleet is a Non-GAAP Financial Measure.  Please see "Non-GAAP Financial Measures" at the end of this news release.

Conference Call

ProFrac has scheduled a conference call on Friday, June 17, 2022 at 10:00 a.m. Eastern time / 9:00 a.m. Central time.  Please dial 412-902-0030 and ask for the ProFrac Holding Corp. call at least 10 minutes prior to the start time of the call, or listen to the call live over the Internet by logging on to the website at the address https://ir.pfholdingscorp.com/news-events/ir-calendar.  A telephonic replay of the conference call will be available through June 24, 2022 and may be accessed by calling 201-612-7415 using passcode 13730279#.  A webcast archive will also be available at the link above shortly after the call and will be accessible for approximately 90 days. 

About ProFrac Holding Corp.

ProFrac Holding Corp. is a growth-oriented, vertically integrated and innovation-driven energy services company providing hydraulic fracturing, completion services and other complementary products and services to leading upstream oil and gas companies engaged in the exploration and production ("E&P") of North American unconventional oil and natural gas resources. Founded in 2016, The Company was built to be the go-to service provider for E&P companies' most demanding hydraulic fracturing needs. ProFrac is focused on employing new technologies to significantly reduce "greenhouse gas" emissions and increase efficiency in what has historically been an emissions-intensive component of the unconventional E&P development process. For more information, please visit the Company's website, https://www.pfholdingscorp.com

Cautionary Statement Regarding Forward-Looking Statements

Certain statements in this press release may be considered "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. In some cases, the reader can identify forward-looking statements by words such as "may," "should," "expect," "intend," "will," "estimate," "anticipate," "believe," "predict," or similar words. Forward-looking statements relate to future events or the Company's future financial or operating performance. These forward-looking statements include, among other things, statements regarding: the Company's strategies and plans for growth; the Company's positioning, resources, capabilities, and expectations for future performance; market and industry expectations; the anticipated benefits of the Company's May 2022 IPO and the capital raised thereby; the anticipated benefits of the Company's March 2022 acquisition of FTS International, Inc.; the Company's estimates with respect to the profitability and utilization of its fleets; expectations regarding near-term and long-term growth, and the attendant impact on the Company's future revenues, margins, free cash flow and through-cycle positioning; the Company's currently expected guidance regarding its second quarter 2022 revenues, profitability and Adjusted EBITDA per fleet; the Company's currently expected guidance regarding its full year 2022 capital expenditures and capital allocation; the Company's anticipated timing for operationalizing its new electric fleets and its West Munger sand plant; the potential to return cash to shareholders; any financial or other information based upon or otherwise incorporating judgments or estimates relating to future performance, events or expectations; any estimates and forecasts of financial and other performance metrics; and the Company's outlook and financial and other guidance. Such forward-looking statements are based upon assumptions made by the Company as of the date hereof and are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, but are not limited to, the Company's ability to achieve anticipated benefits of the Company's May 2022 IPO and March 2022 acquisition of FTS International, Inc., including risks relating to integrating acquired companies and personnel; the Company's ability to deploy capital, including capital raised in the May 2022 IPO, in a manner that furthers the Company's growth strategy, as well as the Company's general ability to execute its business plans; industry conditions, including fluctuations in supply, demand and prices for the Company's products and services; global and regional economic and financial conditions; the effectiveness of the Company's risk management strategies; the transition to becoming a public company; and other risks and uncertainties set forth in the sections entitled "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements" in the Company's filings with the Securities and Exchange Commission ("SEC"), which are available on the SEC's website at www.sec.gov.

Forward-looking statements are also subject to the risks and other issues described below under "Non-GAAP Financial Measures," which could cause actual results to differ materially from current expectations included in the Company's forward-looking statements included in this press release. Nothing in this press release should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward looking statements will be achieved, including without limitation any expectations about the Company's operational and financial performance or achievements through and including 2022. There may be additional risks about which the Company is presently unaware or that the Company currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. The reader should not place undue reliance on forward-looking statements, which speak only as of the date they are made. The Company anticipates that subsequent events and developments will cause its assessments to change. However, while the Company may elect to update these forward-looking statements at some point in the future, it expressly disclaims any duty to update these forward-looking statements, except as otherwise required by law.

 

 

PROFRAC HOLDINGS, LLC
Consolidated Statements of Operations
(Unaudited)




Three Months Ended



Mar. 31,



Dec. 31,


Mar. 31,

(In thousands)


2022



2021


2021












Revenues


$

344,980



$

248,017


$

149,586












Operating costs and expenses:











Costs of revenues, exclusive of depreciation, depletion  and amortization



232,599




180,945



118,306

Depreciation, depletion and amortization



44,216




35,081



35,461

(Gain) loss on disposal of assets, net



(154)




2,305



2,207

Selling, general and administrative



34,127




17,673



13,778

Total operating costs and expenses



310,788




236,004



169,752












Operating income (loss)



34,192




12,013



(20,166)












Other (expense) income:











Interest expense, net



(9,272)




(6,670)



(6,035)

Loss on extinguishment of debt



(8,273)




(515)



-

Other income (expense)



8,231




256



187












Net income (loss) before income taxes



24,878




5,084



(26,014)

Income tax (expense) benefit



(752)




48



25












Net income (loss)


$

24,126



$

5,132


$

(25,989)












Net (loss) income attributable to noncontrolling interest



(416)




957



(9)












Net income (loss) attributable to ProFrac Holdings, LLC


$

23,710



$

6,089


$

(25,998)












Other comprehensive (loss) income



(136)




(1)



6












Comprehensive income (loss)


$

23,574



$

6,088


$

(25,992)












Less: Other comprehensive (loss) income attributable to noncontrolling interest



(34)




(14)



2

Comprehensive income (loss) attributable to ProFrac Holdings, LLC


$

23,608



$

6,102


$

(25,994)

 

 

PROFRAC HOLDINGS, LLC
Consolidated Balance Sheets
(Unaudited)




Mar. 31,



Dec. 31,

(In thousands)


2022



2021









Assets








Current assets:








Cash and cash equivalents


$

28,654



$

5,376

Accounts receivable, net



298,870




161,632

Accounts receivable - related party



3,396




4,515

Prepaid expenses, and other current assets



18,726




6,213

Inventories



139,143




73,942

Total current assets



488,789




251,678









Property, plant, and equipment



1,126,602




827,865

Accumulated depreciation and depletion



(506,831)




(464,178)

Property, plant, and equipment, net



619,771




363,687

Operating lease right-of-use assets



79,049




-

Investments



78,296




4,244

Intangible assets, net



28,681




27,816

Other assets



19,302




17,145

Total assets



1,313,888




664,570









Liabilities and equity








Current liabilities:








Accounts payable



216,054




121,070

Accounts payable - related party



19,553




21,275

Current portion of operating lease liabilities



8,371




-

Accrued expenses



90,079




38,149

Other current liabilities



36,123




34,400

Current portion of long-term debt



47,620




31,793

Total current liabilities



417,800




246,687









Long-term debt



488,204




235,128

Long-term debt - related party



89,800




34,645

Operating lease liabilities



70,815




-

Other liabilities



902




-

Total liabilities



1,067,521




516,460









Equity



244,992




147,015

Noncontrolling interests



1,421




1,039

Accumulated other comprehensive (loss) income



(46)




56

Total equity



246,367




148,110

Total liabilities and equity


$

1,313,888



$

664,570

 

 

PROFRAC HOLDINGS, LLC
Consolidated Statements of Cash Flows
(Unaudited)




Three Months Ended



Mar. 31,



Dec. 31,


Mar. 31,

(In thousands)


2022



2021


2021












Cash flows from operating activities:











Net income (loss)


$

24,126



$

5,132


$

(25,989)












Adjustments to reconcile net income (loss) to net cash provided by operating activities:











Depreciation, depletion and amortization



44,216




35,081



35,461

(Gain) loss on disposal of assets



(154)




2,305



2,207

Non-cash loss on debt extinguishment



4,284




515



-

Amortization of debt issuance costs



1,371




307



536

Bad debt expense, net of recoveries



5




(3,726)



30

Non cash investment income



(8,100)




-



-

Changes in operating assets and liabilities:











Accounts receivable



(46,856)




(58,243)



(8,976)

Inventories



(22,857)




(1,593)



(6,504)

Prepaid expenses and other assets



(9,903)




4,973



(829)

Accounts payable



29,824




26,816



11,243

Accrued expenses



22,622




(5,349)



9,240

Deferred revenues and other current liabilities



5,146




34



(109)

Net cash provided by operating activities



43,724




6,252



16,310












Cash flows from investing activities:











Investment in property, plant & equipment



(41,492)




(16,815)



(17,357)

Cash proceeds from sale of assets



45,622




66



16,730

Acquisitions, net of cash acquired



(278,990)




(1,862)



(2,303)

Investment in preferred shares



(45,952)




(4,244)



-

Investments



(13,893)




-



-

Net cash used in investing activities



(334,705)




(22,855)



(2,930)












Cash flows from financing activities:











Proceeds from issuance of long-term debt



658,266




34,000



6,817

Repayments of long-term debt



(324,034)




(25,015)



(13,437)

Payment of debt issuance costs



(22,913)




(834)



-

Purchase of noncontrolling interests



-




(577)



-

IPO preparation costs



-




(1,982)



-

Member contribution



5,000




-



-

Other



-




20



6

Net cash provided by (used in) financing activities



316,319




5,612



(6,614)












Net increase (decrease) in cash, cash equivalents and restricted cash


$

25,338



$

(10,991)


$

6,766

Cash and cash equivalents, beginning of period



5,376




16,367



2,952

Cash, cash equivalents and restricted cash, end of period



30,714



$

5,376


$

9,718

 

PROFRAC HOLDINGS, LLC
Additional Selected Operating Data
(Unaudited)

Non-GAAP Financial Measures

Adjusted EBITDA and Adjusted EBITDA per fleet are non-GAAP financial measures and should not be considered as substitutes for net income (loss) or any other performance measure derived in accordance with GAAP or as an alternative to net cash provided by operating activities as a measure of our profitability or liquidity. Adjusted EBITDA and Adjusted EBITDA per fleet are supplemental measures utilized by our management and other users of our financial statements such as investors, commercial banks, research analysts and others, to assess our financial performance because they allow us to compare our operating performance on a consistent basis across periods by removing the effects of our capital structure (such as varying levels of interest expense), asset base (such as depreciation and amortization) and items outside the control of our management team (such as income tax rates).

We view Adjusted EBITDA and Adjusted EBITDA per fleet as important indicators of performance. We define Adjusted EBITDA as our net income (loss), before (i) interest expense, net, (ii) income tax provision, (iii) depreciation, depletion and amortization, (iv) loss on disposal of assets and (v) other unusual or non-recurring charges, such as costs related to our initial public offering, non-recurring supply commitment charges, certain bad debt expense and gain on extinguishment of debt. We define Adjusted EBITDA per fleet for a particular period as Adjusted EBITDA calculated as a daily average of active fleets during period.

We believe that our presentation of Adjusted EBITDA and Adjusted EBITDA per fleet will provide useful information to investors in assessing our financial condition and results of operations. In particular, we believe Adjusted EBITDA per fleet allows investors to compare the performance of our fleets across comparable periods and against the fleets of our competitors who may have different capital structures, which may make a fleet-for-fleet comparison more difficult. Net income (loss) is the GAAP measure most directly comparable to Adjusted EBITDA, and net income (loss) per fleet is the GAAP measure most directly comparable to Adjusted EBITDA per fleet. Adjusted EBITDA should not be considered as an alternative to net income (loss), and Adjusted EBITDA per fleet should not be considered as an alternative to net income (loss) per fleet. Adjusted EBITDA and Adjusted EBITDA per fleet have important limitations as analytical tools because they exclude some but not all items that affect the most directly comparable GAAP financial measure. Because Adjusted EBITDA and Adjusted EBITDA per fleet may be defined differently by other companies in our industry, our definition of these non-GAAP financial measures may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.

The presentation of non-GAAP financial measures is not intended to be a substitute for, and should not be considered in isolation from, the financial measures reported in accordance with GAAP. The following tables present a reconciliation of the non-GAAP financial measures of Adjusted EBITDA and Adjusted EBITDA per fleet to the most directly comparable GAAP financial measure for the periods indicated:

Reconciliation of the non-GAAP financial measures
Adjusted EBITDA and Adjusted EBITDA per fleet to
the most directly comparable GAAP financial measure




Three Months Ended



Mar. 31,



Dec. 31,


Mar. 31,

(In thousands)


2022



2021


2021












Net income (loss)


$

24,126



$

5,132


$

(25,989)












Interest expense, net



9,272




6,670



6,035

Depreciation, depletion and amortization



44,216




35,081



35,461

Income tax (provision) benefit



752




(48)



(25)

(Gain) loss on disposal of assets, net



(154)




2,305



2,207

Loss on extinguishment of debt



8,273




515



-

Bad debt expense, net of recoveries



5




(3,726)



-

Loss on foreign currency transactions



12




133



-

Reorganization costs



55




2,060



-

Acquisition related expenses



13,019




-



-

Investment income



(8,100)




-



-

Severance charges



-




500



-

Other



-




(211)



-

Total adjusted EBITDA


$

91,476



$

48,411


$

17,689

 

PROFRAC HOLDINGS, LLC
Additional Selected Operating Data
Condensed Pro Forma Results of Operations
(Unaudited)

The following table reconciles Pro Forma Adjusted EBITDA for FTSI to net loss, which we consider to be the most directly comparable GAAP financial measure to Pro Forma Adjusted EBITDA for FTSI, presented as if the FTSI acquisition had occurred on January 1, 2022:



Three Months Ended



Mar. 31,

(In thousands)


2022





Pro forma net loss


$

(1,223)





Interest expense, net



13,761

Depreciation, depletion and amortization



56,788

Income tax (provision) benefit



752

Loss on disposal of assets, net



(159)

Loss on extinguishment of debt



8,273

Bad debt expense, net of recoveries



5

Loss on foreign currency translation



12

Reorganization costs



(74)

Acquisition related expenses



22,909

Investment income



(8,100)

Share based compensation



6,495

Pro forma adjusted EBITDA for FTSI


$

99,439

 

 

PROFRAC HOLDINGS, LLC
Additional Selected Operating Data
Condensed Segment Results
(Unaudited)




Three Months Ended



Mar. 31,



Dec. 31,


Mar. 31,

(In thousands)


2022



2021


2021












Revenues











Stimulation services


$

336,155



$

242,441


$

143,703

Manufacturing



32,006




25,619



14,657

Proppant production



12,408




7,456



5,589

Total segments



380,569




275,516



163,949

Eliminations



(35,589)




(27,499)



(14,363)

Total revenues


$

344,980



$

248,017


$

149,586












Adjusted EBITDA











Stimulation services


$

73,569



$

47,607


$

12,953

Manufacturing



10,022




(1,799)



2,330

Proppant production



7,885




2,603



2,406

Total Adjusted EBITDA


$

91,476



$

48,411


$

17,689

 

 

Contacts:     

ProFrac Holding Corp.


Lance Turner ? Chief Financial Officer


investors@profrac.com  




Dennard Lascar Investor Relations


Ken Dennard / Rick Black


PFHC@dennardlascar.com





 

 

SOURCE ProFrac Holding Corp.


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