Description of Business and Basis of Presentation
|3 Months Ended|
Mar. 31, 2023
|Organization Consolidation And Presentation Of Financial Statements [Abstract]|
|Description of Business and Basis of Presentation||
NOTE 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Description of Business
ProFrac Holding Corp. ("ProFrac Corp.") is a vertically integrated and innovation-driven energy services company providing hydraulic fracturing, completion services and other complementary products and services to leading upstream oil and natural gas companies engaged in the exploration and production (“E&P”) of North American unconventional oil and natural gas resources. We operate in three business segments: stimulation services, manufacturing, and proppant production.
Basis of Presentation
On May 17, 2022, ProFrac Corp. completed its initial public offering and corporate reorganization and became the managing member of ProFrac Holdings, LLC ("ProFrac LLC"). The unaudited condensed consolidated financial statements presented herein prior to May 17, 2022 consist of the accounts of ProFrac LLC and its subsidiaries (the "Predecessors"). The unaudited condensed consolidated financial statements presented herein subsequent to May 17, 2022 include the accounts of ProFrac Corp. and those of its subsidiaries that are wholly-owned, controlled by it or a variable interest entity ("VIE") where it is the primary beneficiary. In these notes to the unaudited condensed consolidated financial statements, ProFrac Corp. and ProFrac LLC together are referred to as "we," "our" or "us."
These unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Accordingly, certain information and disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. We believe that the presentations and disclosures herein are adequate to make the information not misleading. The unaudited condensed consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) for a fair statement of the interim periods. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full year. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes included in Item 8 "Financial Statements and Supplementary Data" of our Annual Report.
All significant intercompany accounts and transactions have been eliminated in consolidation.
Cash, cash equivalents and restricted cash are recorded in our unaudited condensed consolidated balance sheet as follows:
Redeemable Noncontrolling Interests
Activity related to the value of our redeemable noncontrolling interests is as follows:
Based on 104.2 million shares of Class B common stock outstanding and the 10-day VWAP of Class A common stock of $12.04 at March 31, 2023.
Concentrations of Risk
Our business activities are concentrated in the well completion services segment of the oilfield services industry in the United States. The market for these services is cyclical, and we depend on the willingness of our customers to make operating and capital expenditures to explore for, develop, and produce oil and natural gas in the United States. The willingness of our customers to undertake these activities depends largely upon prevailing industry conditions that are predominantly influenced by current and expected prices for oil and natural gas. Historically, a low commodity-price environment has caused our customers to significantly reduce their hydraulic fracturing activities and the prices they are willing to pay for those services. During these periods, these customer actions materially adversely affected our business, financial condition and results of operations.
New Accounting Standards to be Adopted
No new accounting pronouncements issued or effective during the three month period ended March 31, 2023 have had or are expected to have a material impact on our unaudited condensed consolidated financial statements.
The entire disclosure for the general note to the financial statements for the reporting entity which may include, descriptions of the basis of presentation, business description, significant accounting policies, consolidations, reclassifications, new pronouncements not yet adopted and changes in accounting principles.
Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef