Quarterly report pursuant to Section 13 or 15(d)

Segment information

v3.22.2
Segment information
 3 Months Ended
Mar. 31, 2022
Segment Reporting [Abstract]  
Segment information

14. Segment information

Our business has three reportable segments: Stimulation services, Manufacturing and Proppant production. Each reportable segment represents a separate business unit that operated as a standalone company prior to the reorganization of the Company in December 2021. Following the reorganization, each reportable segment continues to have distinct management and prepares discrete financial information for the segment (consistent with when each operated as a standalone business). FTSI is part of our stimulation services segment. Our chief operating decision makers review the discrete segment financial information, including Adjusted EBITDA as the measure of profitability, to evaluate the performance of our segments and make resource allocation decisions.

We account for intersegment transactions as if the transactions were with third parties, that is, at estimated current market prices. For the three months ended March 31, 2022 and 2021, intersegment revenues for the manufacturing segment were 84% and 86%, respectively. For the three months ended March 31, 2022 and 2021, intersegment revenues for the proppant production segment were 69% and 29%, respectively.

The performance of our segments is evaluated primarily on Adjusted EBITDA. We define Adjusted EBITDA as our net income (loss), before (i) interest expense, net, (ii) income tax provision, (iii) depreciation, depletion and amortization, (iv) loss on disposal of assets, and (v) other unusual or non-recurring charges, such as costs related to our initial public offering, non-recurring supply commitment charges, certain bad debt expense and gain on extinguishment of debt.

Segment information, and a reconciliation of Adjusted EBITDA, for the three months ended March 31, 2022 and 2021 is as follows:

 

 

 

Three Months Ended March 31,

 

(In thousands)

 

2022

 

 

2021

 

Revenues

 

 

 

 

 

 

 

 

Stimulation services

 

$

336,155

 

 

$

143,703

 

Manufacturing

 

 

32,006

 

 

 

14,657

 

Proppant production

 

 

12,408

 

 

 

5,589

 

Total segments

 

 

380,569

 

 

 

163,949

 

Eliminations

 

 

(35,589

)

 

 

(14,363

)

Total

 

$

344,980

 

 

$

149,586

 

Adjusted EBITDA

 

 

 

 

 

 

 

 

Stimulation services

 

$

73,569

 

 

$

12,953

 

Manufacturing

 

 

10,022

 

 

 

2,330

 

Proppant production

 

 

7,885

 

 

 

2,406

 

Adjusted EBITDA for reportable segments

 

 

91,476

 

 

 

17,689

 

Interest expense, net

 

 

(9,272

)

 

 

(6,035

)

Depreciation, depletion and amortization

 

 

(44,216

)

 

 

(35,461

)

Income tax benefit (provision)

 

 

(752

)

 

 

25

 

(Gain) loss on disposal of assets, net

 

 

154

 

 

 

(2,207

)

Loss on extinguishment of debt

 

 

(8,273

)

 

 

—

 

Bad debt expense, net of recoveries

 

 

(5

)

 

 

—

 

Loss on foreign currency transactions

 

 

(12

)

 

 

—

 

Reorganization costs

 

 

(55

)

 

 

—

 

Acquisition related expenses

 

 

(13,019

)

 

 

—

 

Investment income

 

 

8,100

 

 

 

—

 

Net income (loss)

 

$

24,126

 

 

$

(25,989

)

 

 

Segment information as of March 31, 2022 and December 31, 2021 is as follows:

 

(In thousands)

 

March 31,

2022

 

 

December 31,

2021

 

Total assets

 

 

 

 

 

 

 

 

Stimulation services

 

$

1,213,208

 

 

$

510,579

 

Manufacturing

 

 

104,124

 

 

 

77,968

 

Proppant production

 

 

107,628

 

 

 

100,294

 

Total segment assets

 

 

1,424,960

 

 

 

688,841

 

Eliminations

 

 

(111,072

)

 

 

(24,271

)

Total

 

$

1,313,888

 

 

$

664,570