ProFrac (ACDC) - 2023 Q3 - Quarterly Report

Financial Performance - Consolidated revenues for Q3 2023 were $574.2 million, a decrease of$ 122.5 million (17.7%) from Q3 2022 and a decrease of $135.0 million (19.0%) from Q2 2023[150]. - Consolidated net loss for Q3 2023 was$ 17.9 million, a decrease of $157.2 million from Q3 2022 and a decrease of$ 13.3 million from Q2 2023[150]. - Stimulation services revenues for Q3 2023 decreased by $179.1 million (26.8%) from Q3 2022, primarily due to a decrease in average active fleets and lower fleet utilization[154]. - Proppant production revenues for Q3 2023 increased by$ 73.7 million (297.6%) from Q3 2022, driven by acquisitions that increased the number of mines operated[155]. - Manufacturing revenues for Q3 2023 decreased by $4.9 million (10.1%) from Q3 2022, attributed to decreased intercompany demand[156]. - Total cost of revenues for Q3 2023 was$ 368.5 million, a decrease of $23.5 million (6.0%) from Q3 2022[159]. - Selling, general and administrative expenses for Q3 2023 were$ 61.0 million, an increase of $5.0 million (8.1%) from Q3 2022, primarily due to higher labor and non-labor costs associated with acquisitions[162]. - Interest expense for Q3 2023 was$ 40.2 million, an increase of $23.9 million (146.0%) from Q3 2022, due to higher average debt balances and interest rates[166]. Cash Flow and Liquidity - As of September 30, 2023, the company had$ 20.6 million in cash and cash equivalents and $116.0 million available for borrowings, totaling a liquidity position of$ 136.6 million[172]. - Net cash provided by operating activities increased by $254.2 million to$ 510.8 million for the nine months ended September 30, 2023, compared to $256.6 million in 2022[175]. - The company raised$ 50.0 million from the sale of Series A preferred stock in the three months ended September 30, 2023[172]. - The net cash used in investing activities increased by $62.9 million, primarily due to higher cash paid for acquisitions[176]. - The company anticipates that cash and cash equivalents, along with cash provided by operations, will be sufficient to fund capital expenditures and financial obligations for at least the next 12 months[173]. Capital Expenditures and Debt - Capital expenditures for the nine months ended September 30, 2023, were$ 233.9 million, with an estimated range of $280 million to$ 290 million for the full year[179]. - The company has $1.1 billion in aggregate principal amount of long-term debt outstanding, with$ 122.8 million due over the next twelve months[178]. - The company plans to reduce capital expenditures for the remainder of the year to align with customer activity levels and maintain target return thresholds[179]. Strategic Initiatives - The company acquired Performance Proppants for $462.5 million on February 24, 2023, enhancing its proppant production capabilities[151]. - The company plans to increase its fleet count at the beginning of 2024 in response to anticipated demand recovery[151]. - The growth strategy includes potential acquisitions, with funding historically sourced from equity securities and borrowings under credit facilities[182]. Taxation - The effective tax rate for the nine months ended September 30, 2023, was 20.5%, up from 5.2% in the same period in 2022[169].