ProFrac Holding Corp. Annual report [Section 13 and 15(d), not S-K Item 405]

Annual report [Section 13 and 15(d), not S-K Item 405]

Schedule I - Condensed Financial Information of Registrant

Schedule I - Condensed Financial Information of Registrant

12 Months Ended

Dec. 31, 2024

Condensed Financial Information Disclosure [Abstract]

Schedule I - Condensed Financial Information of Registrant

ProFrac Holding Corp.

PARENT COMPANY BALANCE SHEETS

(in millions, except per share amounts or where otherwise noted)


	December 31,
	2024			2023
ASSETS
Current assets:
Income tax receivable	$	—		$	0.4
Total current assets		—			0.4
Investment in subsidiaries		1,171.5			1,340.4
Total assets	$	1,171.5		$	1,340.8

LIABILITIES, MEZZANINE EQUITY, AND STOCKHOLDERS’ EQUITY
Current liabilities:
Income tax payable		—			—
Current portion of tax receivable agreement liability		3.3			2.8
Total current liabilities		3.3			2.8
Deferred tax liabilities		14.9			—
Tax receivable agreement liability		82.9			68.1
Total liabilities		101.1			70.9
Commitments and contingencies (Note 4)
Mezzanine equity:
Series A preferred stock, $0.01 par value, 50 thousand shares authorized, 50 thousand and zero shares issued and outstanding, respectively		63.5			58.7
Redeemable noncontrolling interest		—			—

Stockholders' equity:
Preferred stock, $0.01 par value, 50.0 shares authorized, no shares issued and outstanding		—			—
Class A common stock, $0.01 par value, 600.0 shares authorized, 160.2 and 159.4 shares issued and outstanding, respectively		1.5			1.5
Class B common stock, $0.01 par value, 400.0 shares authorized, zero and no shares issued and outstanding		—			—
Additional paid-in capital		1,241.2			1,225.4
Accumulated deficit		(235.9	)		(16.0	)
Accumulated other comprehensive income		0.1			0.3
Total stockholders' equity attributable to ProFrac Holding Corp.		1,006.9			1,211.2
Total liabilities, mezzanine equity, and stockholders' equity	$	1,171.5		$	1,340.8

The accompanying notes are an integral part of these condensed financial statements.

ProFrac Holding Corp.

PARENT COMPANY STATEMENTS OF OPERATIONS

(in millions, except per share amounts)


	Year Ended December 31,
	2024			2023			2022
Revenues	$	—		$	—		$	—
Operating costs and expenses		0.4			—			—
Loss before income taxes and equity in income (loss) of subsidiaries		(0.4	)		—			—
Income tax benefit (expense)		10.4			1.0			(5.3	)
Income (loss) before equity in income (loss) of subsidiaries		10.0			1.0			(5.3	)
Equity in income (loss) of subsidiaries, net of tax		(225.1	)		(56.9	)		376.4
Net income (loss)		(215.1	)		(55.9	)		371.1
Less: net income attributable to ProFrac Predecessor		—			—			(73.6	)
Less: net income attributable to redeemable noncontrolling interests		—			(41.8	)		(206.0	)
Net income (loss) attributable to ProFrac Holding Corp.	$	(215.1	)	$	(97.7	)	$	91.5
Net income (loss) attributable to Class A common shareholders	$	(219.9	)	$	(107.5	)	$	91.5

Earnings (loss) per Class A common share (basic and diluted)	$	(1.38	)	$	(0.82	)	$	2.06

Weighted average Class A common shares outstanding:
Basic		159.9			130.9			44.3
Diluted		159.9			130.9			44.5

The accompanying notes are an integral part of these condensed financial statements.

ProFrac Holding Corp.

PARENT COMPANY STATEMENTS OF CASH FLOWS

(in millions)


	Year Ended December 31,
	2024			2023			2022
Cash flows from operating activities:
Net income (loss)	$	(215.1	)	$	(55.9	)	$	371.1
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Equity in loss (income) of subsidiaries, net of tax		225.1			56.9			(376.4	)
Deferred tax expense (benefit)		(10.7	)		—			3.9
Distributions received from ProFrac Holdings, LLC		0.4			0.7			4.3
Changes in operating assets and liabilities:
Income tax receivable		0.3			2.7			(3.0	)
Income tax payable		—			(0.1	)		0.1
Net cash provided by operating activities		—			4.3			—

Cash flows from investing activities:
Contributions to ProFrac Holdings, LLC		—			(53.2	)		(228.8	)
Net cash used in investing activities		—			(53.2	)		(228.8	)

Cash flows from financing activities:
Proceeds from issuance of Series A preferred stock		—			50.0			—
Payment of Series A preferred stock issuance costs		—			(1.1	)		—
Proceeds from issuance of common stock		—			—			329.1
Payment of common stock issuance costs		—			—			(27.4	)
Payment of THRC related equity		—			—			(72.9	)
Net cash provided by financing activities		—			48.9			228.8

Net increase in cash, cash equivalents, and restricted cash		—			—			—
Cash, cash equivalents, and restricted cash beginning of period		—			—			—
Cash, cash equivalents, and restricted cash end of period	$	—		$	—		$	—

Supplemental cash flow information:
Cash payments (refunds received) for income taxes, net	$	0.4		$	(3.6	)	$	4.3

The accompanying notes are an integral part of these condensed financial statements.

ProFrac Holding Corp.

NOTES TO PARENT COMPANY FINANCIAL STATEMENTS

1. ORGANIZATION AND DESCRIPTION OF BUSINESS

ProFrac Holding Corp. (“ProFrac Corp.” or “the Company”) is a holding company with substantially all of its assets and operations held by ProFrac Holdings, LLC (“ProFrac LLC”), which is a vertically integrated and innovation-driven energy holding company providing hydraulic fracturing, proppant production, other completion services and other complementary products and services to leading upstream oil and natural gas companies engaged in the exploration and production of North American unconventional oil and natural gas resources.

Mr. Dan Wilks and Mr. Farris Wilks are brothers and are the founders and principal stockholders of the Company. Their sons, Mr. Matthew D. Wilks and Mr. Johnathan Ladd Wilks are the Company’s Executive Chairman and Chief Executive Officer, respectively. In the normal course of business, we enter into transactions with related parties where Mr. Dan Wilks and Mr. Farris Wilks and entities owned by or affiliated with them (collectively, the "Wilks Parties") hold a controlling financial interest. Under Nasdaq rules and the Company’s Related Party Transactions Policy, our Audit Committee is responsible for reviewing all related party transactions. Under the policy, potential related party transactions are subject to approval by the Audit Committee in advance or, in certain circumstances, ratification by the Audit Committee, in each case if such transactions satisfy the terms and conditions set forth in the policy. See “Note 17. Related Party Transactions” in the notes to our consolidated financial statements for further information.

Basis of Presentation

These condensed parent company financial statements reflect the unconsolidated financial position of ProFrac Corp. as the parent company to ProFrac LLC. Given that certain of our subsidiaries are restricted in their ability to transfer funds to us as a result of their debt covenants, we have prepared these condensed parent company financial statements in accordance with Rules 5-04 and 12-04 of Regulation S-X, as the restricted net assets of ProFrac LLC and its consolidated subsidiaries exceed 25% of the consolidated net assets of ProFrac Corp. This information should be read in conjunction with the consolidated financial statements and the accompanying notes of ProFrac Corp. For purposes of these condensed financial statements, the Company’s majority owned subsidiaries are recorded based upon its proportionate share of the subsidiaries’ net assets.

Company Formation

ProFrac Corp. was incorporated as a Delaware corporation on August 17, 2021, to become a holding corporation for ProFrac LLC and its subsidiaries upon completion of a corporate reorganization in conjunction with a planned initial public offering (“IPO”). On May 17, 2022, ProFrac Corp. completed its IPO and corporate reorganization and became the managing member of ProFrac LLC.

The condensed parent company financial statements presented herein are those of ProFrac Corp. subsequent to the corporate reorganization on May 17, 2022, and ProFrac LLC before that date. In these notes to parent company financial statements, ProFrac Corp. and ProFrac LLC together are also referred to as “we,” “us,” “our,” or the “Company” and ProFrac LLC is also referred to as “ProFrac Predecessor.”

Initial Public Offering

In the second quarter of 2022, ProFrac Corp. completed its IPO of 18.2 million shares of its Class A common stock, par value $0.01 per share (the “Class A Common Stock”) at a public offering price of $18.00 per share, which generated combined net proceeds of $301.7 million, after deducting underwriter discounts and commissions and estimated offering costs. The Company used $72.9 million of the net proceeds to redeem the membership ownership interests from the then-existing owners of THRC FTSI Related Equity (as defined in “Note 4. Business Combinations” in the notes to our consolidated financial statements) and contributed the remaining proceeds to ProFrac LLC.

Redeemable Noncontrolling Interests

ProFrac Corp.’s only material asset is an equity interest consisting of units representing limited liability company interests in ProFrac LLC (the “Units”). As the sole managing member of ProFrac LLC, ProFrac Corp. consolidates the financial results of ProFrac LLC and its subsidiaries and reports a noncontrolling interest related to the portion of Units not owned by ProFrac Corp. Historically, the holders of Units not owned by ProFrac Corp. also held shares of ProFrac Corp.’s Class B common stock, such that a single share of Class B common stock was issued for each Unit not owned by ProFrac Corp.

Pursuant to the Third Amended and Restated Limited Liability Company Agreement of ProFrac LLC and the Second Amended and Restated Certificate of Incorporation of ProFrac Corp., certain members of ProFrac LLC had the right to cause ProFrac LLC to redeem all or a portion of each such member's Units, together with the surrender of the same number of each

such member's shares of Class B common stock, for an equivalent number of shares of Class A common stock or, at the election of our board of directors, cash. In connection with the exercise of such redemption, a corresponding number of shares of Class B common stock would be canceled. The redemption election was not considered to be within our control because the holders of Class B common stock and their affiliates controlled us through direct representation on our board of directors. As a result, we have historically presented the noncontrolling interests in ProFrac LLC as redeemable noncontrolling interests outside of permanent equity.

In April 2023, all the eligible holders of the Units (the “Redeeming Members”) submitted redemption notices with respect to all of their Units, representing an aggregate of 104.2 million ProFrac LLC units (the “Redeemed Units”), together with the surrender and delivery of the same number of shares of our Class B common stock. The Redeeming Members include entities owned or affiliated with ProFrac Corp.'s controlling stockholders, Mr. Dan Wilks and Mr. Farris Wilks, as well as Mr. Matthew D. Wilks, our Executive Chairman, an entity affiliated with Mr. Johnathan L. Wilks, our Chief Executive Officer, and Mr. Coy Randle, a member of our board of directors.

In April 2023, we delivered a written notice to ProFrac LLC and the Redeeming Members setting forth our election to exercise our right to purchase directly and acquire the Redeemed Units, together with the surrender and delivery of the same number of shares of our Class B common stock from the Redeeming Members.

We subsequently acquired the Redeemed Units from the Redeeming Members by issuing an aggregate of 101.1 million shares of Class A common stock on or about April 10, 2023 and the remaining 3.1 million shares on or about April 13, 2023. The surrendered shares of Class B common stock were canceled, and no shares of our Class B common stock remain issued and outstanding.

2. PREFERRED STOCK

For details regarding our preferred stock, see “Note 9. Preferred Stock” in the notes to our consolidated financial statements.

3. INCOME TAXES

For details regarding income taxes, see “Note 12. Income Taxes” in the notes to our consolidated financial statements.

4. COMMITMENTS AND CONTINGENCIES

For details regarding contingencies related to litigation, see "Note 14. Commitments and Contingencies" in the notes to our consolidated financial statements. For details regarding guarantees of certain debt instruments of our indirectly owned subsidiaries and our consolidated schedule of debt maturities, see "Note 7. Debt" in the notes to our consolidated financial statements.