Quarterly report [Sections 13 or 15(d)]

Related Party Transactions

v3.25.1
Related Party Transactions
 3 Months Ended
Mar. 31, 2025
Related Party Transactions [Abstract]  
Related party transactions

NOTE 13. RELATED PARTY TRANSACTIONS

In the normal course of business, we have entered into transactions with related parties where the Wilks Parties hold a controlling financial interest. For the three months ended March 31, 2025 and 2024, the Company had related party transactions with the following related party entities:

 

•
Automatize, LLC (“Automatize”) is a logistics broker that facilitates the last-mile delivery of proppants on behalf of its customers, including the Company. Amounts paid to Automatize include costs passed through to third-party trucking companies and a commission retained by Automatize. These payments are recorded in cost of revenues, exclusive of depreciation and depletion in our unaudited condensed consolidated statements of operations.
•
Equify Financial, LLC (“Equify Financial”) is a finance company that provides equipment and other financing to its customers, including the Company. Amounts paid to Equify Financial are recorded in cost of revenue, interest expense in our unaudited condensed consolidated statements of operations and repayments of long-term debt in our unaudited condensed consolidated statements of cash flows.
•
Wilks Brothers, LLC (“Wilks Brothers”) is a management company which provides administrative support to various businesses within its portfolio. Wilks Brothers and certain entities under its control will at times incur expenses on our behalf, billing us for these expenses at cost as well as certain management fees. Amounts paid to Wilks Brothers are generally recorded in selling, general and administrative expenses in our unaudited condensed consolidated statements of operations.
•
Interstate Explorations, LLC (“Interstate”) is an exploration and development company for which we perform pressure pumping services.
•
Flying A Pump Services, LLC (“Flying A”) is an oilfield services company which provides pressure pumping, acid and cementing services, to which we rent and sell equipment and frac fleet components, and at times sell proppant.
•
MC Estates, LLC, The Shops at Willow Park, FTSI Industrial, LLC, and 420 Shops Blvd, LLC (collectively, the “Related Lessors”) own various industrial parks and office space leased by us. Amounts paid to the Related Lessors are recorded in selling, general and administrative expenses in our unaudited condensed consolidated statements of operations.
•
Wilks Construction Company, LLC (“Wilks Construction”) is a construction company that has built and made renovations to several buildings for us. Amounts paid to Wilks Construction are recorded as capital expenditures in our unaudited condensed consolidated statements of cash flows.
•
Wilks Earthworks, LLC ("Wilks Earthworks") is an oilfield services company that provides mining, wet and dry loading, hauling and other services and equipment to its customers, including us. These payments are recorded in cost of revenues, exclusive of depreciation and depletion, in our unaudited condensed consolidated statements of operations.
•
Carbo Ceramics Inc. (“Carbo”) is a provider of ceramic proppant which will at times purchase conventional proppant from us to act as a broker for its customers. Additionally, we will at times purchase manufactured proppant from Carbo for the Stimulation Services segment.
•
Cisco Aero, LLC ("AERO") is a private aviation company. Amounts paid to AERO are recorded as selling, general and administrative expenses in our unaudited condensed consolidated statements of operations.

The following table summarizes revenue from related parties:

 

 

Three Months Ended
March 31,

 

 

 

2025

 

 

2024

 

Flying A

 

$

1.9

 

 

$

5.2

 

Total

 

$

1.9

 

 

$

5.2

 

The following table summarizes expenditures with related parties:

 

 

Three Months Ended
March 31,

 

 

 

2025

 

 

2024

 

Automatize

 

$

43.1

 

 

$

21.3

 

Flying A

 

 

0.4

 

 

 

—

 

Wilks Brothers

 

 

2.0

 

 

 

2.1

 

Related Lessors

 

 

3.8

 

 

 

3.2

 

Wilks Construction

 

 

0.6

 

 

 

—

 

Wilks Earthworks

 

 

5.6

 

 

 

1.6

 

Equify Financial

 

 

4.6

 

 

 

2.1

 

Carbo

 

 

0.3

 

 

 

0.3

 

Total

 

$

60.4

 

 

$

30.6

 

The following table summarizes accounts receivable–related party:

 

 

March 31,
2025

 

 

December 31,
2024

 

Flying A

 

$

17.1

 

 

$

15.7

 

Wilks Brothers

 

 

0.1

 

 

 

—

 

Interstate

 

 

0.4

 

 

 

0.4

 

Total

 

$

17.6

 

 

$

16.1

 

 

The following table summarizes accounts payable–related party:

 

 

March 31,
2025

 

 

December 31,
2024

 

Automatize

 

$

32.1

 

 

$

11.6

 

Wilks Brothers

 

 

2.7

 

 

 

3.2

 

Wilks Construction

 

 

0.6

 

 

 

—

 

Wilks Earthworks

 

 

3.2

 

 

 

2.8

 

Related Lessors

 

 

0.1

 

 

 

0.1

 

Flying A

 

 

0.3

 

 

 

—

 

Equify

 

 

0.9

 

 

 

—

 

Carbo

 

 

0.1

 

 

 

0.4

 

Total

 

$

40.0

 

 

$

18.1

 

In June 2023 and January 2024, we arranged to sell certain surplus equipment and inventory components and to assign certain pre-orders for equipment to Flying A, at prices which are consistent with fair market value, for a total consideration of $36.3 million and $8.4 million, respectively. We delivered $0.4 million, $12.6 million and $28.9 million of these components to Flying A in 2025, 2024 and 2023, respectively. We expect to deliver the remaining $2.8 million of product to Flying A in 2025. We accounted for the unapplied proceeds from these transactions as related party deposits presented as "Other current liabilities - related party" in our unaudited condensed consolidated balance sheets.