Trending Stock: Cactus Inc. (NYSE: WHD)

HOUSTON, October 27, 2019 – Shares of Cactus Inc. (NYSE: WHD) inclined 1.46% to $28.57. The stock traded total volume of 166.264K shares lower than the average volume of 517.96K shares.

Cactus, Inc. (WHD) reported that first quarter 2019 rental revenue increased $7.30M, or 23.4%, sequentially, following continued investment in the Company’s rental fleet and a rebound in activity. Gross profit increased $3.10M sequentially with gross profit margins down 280 basis points, primarily due to costs incurred as a result of transitory issues in the field and the accelerated deployment and relocation of assets.

Field Service and Other:

First quarter 2019 field service and other revenue increased $4.00M, or 13.5%, sequentially, as higher completions activity coupled with a seasonal recovery drove an increase in associated billable hours and ancillary services. Gross profit increased $3.20M sequentially due to higher labor utilization during the quarter, with margins rebounding from the seasonally impacted levels of the fourth quarter.

Selling, General and Administrative Expenses (“SG&A”):

SG&A for first quarter 2019 was $12.70M (8.0% of revenues), compared to $10.50M (7.5% of revenues) for fourth quarter 2018 and $9.10M (7.9% of revenues) for first quarter 2018. The sequential increase is primarily related to higher audit and tax professional fees, employment benefits and taxes, and stock-based compensation.

Liquidity and Capital Expenditures:

As of March 31, 2019, the Company had $88.10M of cash, no bank debt outstanding and the full $75.00M of capacity available under its revolving credit facility. Operating cash flow was $34.20M for first quarter 2019, attributable to improved operating results but impacted by a sharp increase in activity.

Net capital expenditures for first quarter 2019 were $13.80M, driven largely by additions to the Company’s fleet of rental assets to meet customer demand for higher pressure valves. For the full year 2019, the Company still expects capital expenditures to be in the range of $60 to $650M.

Other Items:

On March 21, 2019, Cactus closed an underwritten secondary offering of 8.50M shares of its Class A common stock by certain selling stockholders. Cactus did not receive any proceeds from the sale of the common stock in the offering. Cactus incurred $1.00M in costs associated with the offering, which were recorded as Other Expense.

As of March 31, 2019, Cactus had 46.390M shares of Class A common stock outstanding (representing 61.8% of the total voting power) and 28.718M shares of Class B common stock outstanding (representing 38.2% of the total voting power).

WHD has the market capitalization of $2.19B. The return on assets ratio of the Company was 10.40% while its return on investment ratio stands at 79.40%. Price to sales ratio was 3.55.