Quarterly report [Sections 13 or 15(d)]

Business Segments

v3.25.1
Business Segments
 3 Months Ended
Mar. 31, 2025
Segment Reporting [Abstract]  
Business Segments

NOTE 12. BUSINESS SEGMENTS

The Company's segments are determined as those operations whose results are reviewed regularly by the chief operating decision maker ("CODM"), who is our Executive Chairman, in deciding how to allocate resources and assess performance. Our CODM manages our business segments primarily by the type of product or services provided. We have three reportable segments which we operate within the United States of America: Stimulation Services, Proppant Production and Manufacturing. Amounts in the other category reflect our business activities that are not separately reportable, which primarily includes Flotek for the periods presented. Other business activities also include Livewire Power, LLC (“Livewire”), which we launched in the fourth quarter of 2024. Livewire enables onsite power generation services for oilfield and non-oilfield customers that require off-grid power solutions.

The CODM assesses the performance of the segments based on segment adjusted EBITDA, which is defined as our net income (loss) before (i) interest expense, net, (ii) income taxes, (iii) depreciation, depletion and amortization, (iv) (loss) gain on disposal of assets, net, (v) stock-based compensation, and (vi) other charges, such as certain credit losses, gain (loss) on extinguishment of debt, gain (loss) on investments, acquisition and integration expenses, litigation expenses and accruals for legal contingencies, acquisition earnout adjustments, severance charges, goodwill impairments, gains on insurance recoveries, transaction costs, third-party supply commitment charges, and impairments of long-lived assets.

We account for intersegment transactions as if the transactions were with third parties, that is, at estimated current market prices.

Summarized financial information for our reportable segments is as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stimulation Services

 

 

Proppant Production

 

 

Manufacturing

 

 

Other

 

 

Eliminations

 

 

Total

 

Three Months Ended March 31, 2025:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

External customers — services

 

$

523.8

 

 

$

—

 

 

$

—

 

 

$

0.1

 

 

$

—

 

 

$

523.9

 

External customers — product sales (1)

 

 

—

 

 

 

43.3

 

 

 

8.7

 

 

 

24.4

 

 

 

—

 

 

 

76.4

 

Intercompany (2)

 

 

0.7

 

 

 

24.0

 

 

 

57.1

 

 

 

37.7

 

 

 

(119.5

)

 

 

—

 

Total Revenue

 

$

524.5

 

 

$

67.3

 

 

$

65.8

 

 

$

62.2

 

 

$

(119.5

)

 

$

600.3

 

Cost of revenues, exclusive of depreciation, depletion, and amortization

 

 

387.8

 

 

 

43.2

 

 

 

55.3

 

 

 

47.5

 

 

 

(114.4

)

 

 

419.4

 

Selling, general and administrative, excluding stock-based compensation

 

 

33.1

 

 

 

5.8

 

 

 

6.5

 

 

 

7.1

 

 

 

—

 

 

 

52.5

 

Other expense (income)

 

 

(1.0

)

 

 

—

 

 

 

—

 

 

 

(0.1

)

 

 

—

 

 

 

(1.1

)

Adjusted EBITDA (3)

 

$

104.6

 

 

$

18.3

 

 

$

4.0

 

 

$

7.7

 

 

$

(5.1

)

 

$

129.5

 

Depreciation, depletion and amortization

 

 

82.4

 

 

 

19.2

 

 

 

4.6

 

 

 

0.7

 

 

 

(0.9

)

 

 

106.0

 

Investment in property, plant & equipment

 

 

51.3

 

 

 

3.7

 

 

 

—

 

 

 

1.4

 

 

 

(3.9

)

 

 

52.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of March 31, 2025:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

4.7

 

 

$

3.0

 

 

$

1.7

 

 

$

6.6

 

 

$

—

 

 

$

16.0

 

Total current assets

 

 

568.2

 

 

 

61.5

 

 

 

295.7

 

 

 

95.3

 

 

 

(350.9

)

 

 

669.8

 

Property, plant, and equipment, net

 

 

812.4

 

 

 

803.5

 

 

 

78.4

 

 

 

26.7

 

 

 

(7.2

)

 

 

1,713.8

 

Total assets

 

 

3,003.0

 

 

 

904.3

 

 

 

478.5

 

 

 

248.3

 

 

 

(1,613.2

)

 

 

3,020.9

 

Current portion of long-term debt

 

 

82.0

 

 

 

65.6

 

 

 

4.2

 

 

 

—

 

 

 

—

 

 

 

151.8

 

Long-term debt

 

 

695.8

 

 

 

262.7

 

 

 

16.5

 

 

 

—

 

 

 

—

 

 

 

975.0

 

Total liabilities

 

 

1,986.1

 

 

 

112.9

 

 

 

396.6

 

 

 

96.0

 

 

 

(694.8

)

 

 

1,896.8

 

 

 

 

 

Stimulation Services

 

 

Proppant Production

 

 

Manufacturing

 

 

Other

 

 

Eliminations

 

 

Total

 

Three Months Ended March 31, 2024:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

External customers — services

 

$

505.4

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

505.4

 

External customers — product sales (1)

 

 

—

 

 

 

53.3

 

 

 

9.6

 

 

 

13.2

 

 

 

—

 

 

 

76.1

 

Intercompany (2)

 

 

11.9

 

 

 

24.4

 

 

 

33.9

 

 

 

28.5

 

 

 

(98.7

)

 

 

—

 

Total Revenue

 

$

517.3

 

 

$

77.7

 

 

$

43.5

 

 

$

41.7

 

 

$

(98.7

)

 

$

581.5

 

Cost of revenues, exclusive of depreciation, depletion, and amortization

 

 

362.8

 

 

 

42.1

 

 

 

33.8

 

 

 

32.0

 

 

 

(97.0

)

 

 

373.7

 

Selling, general and administrative, excluding stock-based compensation

 

 

29.9

 

 

 

7.2

 

 

 

5.3

 

 

 

6.1

 

 

 

—

 

 

 

48.5

 

Other expense (income)

 

 

(0.6

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(0.6

)

Adjusted EBITDA (3)

 

$

125.2

 

 

$

28.4

 

 

$

4.4

 

 

$

3.6

 

 

$

(1.7

)

 

$

159.9

 

Depreciation, depletion and amortization

 

 

92.9

 

 

 

18.0

 

 

 

1.1

 

 

 

0.8

 

 

 

—

 

 

 

112.8

 

Investment in property, plant & equipment

 

 

52.7

 

 

 

6.4

 

 

 

0.6

 

 

 

0.2

 

 

 

—

 

 

 

59.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2024:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

8.7

 

 

$

—

 

 

$

1.7

 

 

$

4.4

 

 

$

—

 

 

$

14.8

 

Total current assets

 

 

466.9

 

 

 

71.4

 

 

 

255.3

 

 

 

95.3

 

 

 

(314.8

)

 

 

574.1

 

Property, plant, and equipment, net

 

 

839.3

 

 

 

817.6

 

 

 

82.5

 

 

 

25.9

 

 

 

(4.1

)

 

 

1,761.2

 

Total assets

 

 

2,911.3

 

 

 

929.5

 

 

 

443.2

 

 

 

249.6

 

 

 

(1,545.5

)

 

 

2,988.1

 

Current portion of long-term debt

 

 

87.5

 

 

 

65.5

 

 

 

6.8

 

 

 

4.8

 

 

 

—

 

 

 

164.6

 

Long-term debt

 

 

649.1

 

 

 

278.0

 

 

 

17.3

 

 

 

—

 

 

 

—

 

 

 

944.4

 

Total liabilities

 

 

1,891.4

 

 

 

124.2

 

 

 

360.7

 

 

 

103.9

 

 

 

(631.7

)

 

 

1,848.5

 

 

(1)
Our Proppant Production segment recognized noncash revenue associated with acquired contract liabilities of $5.7 million and $16.5 million for the three months ended March 31, 2025 and 2024, respectively. Refer to Item 8 "Financial Statements and Supplementary Data" in our Annual Report for information about our acquired contract liabilities.
(2)
In our other business activities, Flotek recorded revenue of $7.5 million and $8.7 million for the three months ended March 31, 2025 and 2024, respectively, related to contract shortfalls because the Stimulation Services segment did not purchase the minimum contractual commitment of chemistry products from Flotek.
(3)
Adjusted EBITDA for the Stimulation Services segment included an intercompany supply commitment charge of $7.5 million and $8.7 million for the three months ended March 31, 2025 and 2024, respectively, because this segment did not purchase the minimum contractual commitment of chemistry products from Flotek.

 

The following table reconciles consolidated Adjusted EBITDA for our reportable segments to net income (loss):

 

 

Three Months Ended
March 31,

 

 

 

2025

 

 

2024

 

Adjusted EBITDA of reportable segments

 

$

129.5

 

 

$

159.9

 

Interest expense, net

 

 

(35.9

)

 

 

(37.6

)

Depreciation, depletion and amortization

 

 

(106.0

)

 

 

(112.8

)

Income tax expense

 

 

(0.3

)

 

 

(0.3

)

Gain (loss) on disposal of assets, net

 

 

(3.4

)

 

 

1.4

 

Loss on extinguishment of debt

 

 

—

 

 

 

(0.8

)

Stock-based compensation (1)

 

 

(1.1

)

 

 

(2.1

)

Transaction costs

 

 

(0.2

)

 

 

—

 

Severance charges

 

 

—

 

 

 

(0.7

)

Acquisition and integration costs

 

 

(0.1

)

 

 

(0.2

)

Supply commitment charges

 

 

—

 

 

 

(0.2

)

Litigation expenses and accruals for legal contingencies

 

 

(1.6

)

 

 

(4.8

)

Unrealized gain on investments, net

 

 

3.7

 

 

 

1.2

 

Net income (loss)

 

$

(15.4

)

 

$

3.0

 
(1)
Stock-based compensation is reported in “Selling, general and administrative” in the consolidated statements of operations and is not allocated to the segments.