Flowco Holdings Inc. (NYSE: FLOC) (“Flowco” or the “Company”), a provider of production optimization, artificial lift and methane abatement solutions for the oil and natural gas industry, today announced financial results for the second quarter ended June 30, 2025.
Where presented, the financial results for 2024 represent periods (i) during which Flowco’s operating subsidiary, Flowco MergeCo LLC (“Flowco LLC”), was a privately-owned limited liability company and (ii) prior to the completion of Flowco’s initial public offering in January 2025. Historical financial information for the periods ended in 2024 reflects information for Flowco LLC, and historical financial information presented prior to June 20, 2024 reflects only the historical financial information of Estis Compression LLC (“Estis”) as the accounting predecessor prior to the business combination of Estis, Flowco Production Solutions, LLC and Flogistix, LP and parent entities formed in connection with such business combination (the “2024 Business Combination”).
Key Second Quarter 2025 Highlights
- Revenues of $193.2 million, generating net income of $27.4 million and Adjusted Net Income1 of $33.0 million
- Adjusted EBITDA1 of $76.5 million
- Adjusted EBITDA Margin1 of 39.6%
- In August 2025, Flowco's Board of Directors declared a quarterly cash dividend of $0.08 per share
- Robust liquidity with approximately $496.5 million of availability under our revolving credit facility as of August 1, 2025, inclusive of the approximately $71 million drawn to fund the strategic asset acquisition from Archrock
Financial Summary
|
|
Three Months Ended |
|
||||||||||||
|
|
June 30, 2025 |
|
|
March 31, 2025 |
|
|
June 30, 2024 |
|
||||||
(in thousands) |
|||||||||||||||
Revenues |
|
$ |
|
193,215 |
|
|
$ |
|
192,350 |
|
|
$ |
|
93,208 |
|
Net income |
|
|
|
27,352 |
|
|
|
|
27,045 |
|
|
|
|
20,082 |
|
Adjusted Net Income (1) |
|
|
|
32,998 |
|
|
|
|
32,769 |
|
|
|
|
20,348 |
|
Adjusted EBITDA (1) |
|
|
|
76,488 |
|
|
|
|
74,901 |
|
|
|
|
40,236 |
|
Adjusted EBITDA Margin (1) |
|
|
|
39.6 |
% |
|
|
|
38.9 |
% |
|
|
|
43.2 |
% |
(1) |
Adjusted Net Income, Adjusted EBITDA, and Adjusted EBITDA Margin are non-GAAP financial measures. See definitions of these measures and the reconciliation of GAAP to non-GAAP financial measures outlined in the reconciliation tables accompanying this press release. |
Joe Bob Edwards, President and CEO, commented, “Flowco delivered strong second-quarter results, with sequential improvements in both Adjusted EBITDA and Adjusted EBITDA Margins, while generating robust free cash flow. These results emphasize our differentiated financial profile and the disciplined operational execution of our business segments. Growth in our high-margin rental divisions was a key driver, supported by increased customer adoption and strategic investments in our rental fleet. On August 4th, we announced the completion of the acquisition of 155 High Pressure Gas Lift and Vapor Recovery systems from Archrock. We believe these assets will accelerate the growth of our high-margin rental businesses, increase our fleet of electric motor drive systems, and strengthen relationships with both new and existing customers.
Despite global uncertainties and volatility in the second quarter, the upstream market continued to demonstrate resilience, supported by targeted investment. However, even with recent oil price stability, operators are further moderating activity levels as they seek to maintain capital discipline. As our customers assess the market outlook, we’re seeing a continued emphasis on production optimization to maximize asset value and sustain volumes—driving steady demand for our solutions that enhance efficiency, reliability, and recovery. This trend has supported our incremental growth in a flat production environment.
As we move into the second half of the year, we remain focused on disciplined execution, operational optimization, and high-return investments. We believe Flowco is strategically positioned to succeed in today’s evolving energy landscape—delivering innovation, operational performance, and strong returns for our customers and shareholders.”
Segment Information
We report our results in two segments, Production Solutions and Natural Gas Technologies. Production Solutions includes the rental, sale and service associated with high pressure gas lift, conventional gas lift and plunger lift, including a range of digital solutions and other production related technologies. Natural Gas Technologies includes the design, manufacture, rental and sale of vapor recovery and natural gas systems. Corporate costs not directly related to either segment are categorized separately.
Segment Financial Information
|
|
Three Months Ended |
|
||||||||||||
|
|
June 30, 2025 |
|
|
March 31, 2025 |
|
|
June 30, 2024 |
|
||||||
(in thousands) |
|||||||||||||||
Production Solutions |
|
|
|
|
|
|
|
|
|
|
|
|
|||
Revenues |
|
$ |
|
128,245 |
|
|
$ |
|
115,992 |
|
|
$ |
|
56,626 |
|
Adjusted Segment EBITDA (1) |
|
|
|
53,343 |
|
|
|
|
50,590 |
|
|
|
|
32,684 |
|
Adjusted Segment EBITDA Margin (1) |
|
|
|
41.6 |
% |
|
|
|
43.6 |
% |
|
|
|
57.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Natural Gas Technologies |
|
|
|
|
|
|
|
|
|
|
|
|
|||
Revenues |
|
$ |
|
64,970 |
|
|
$ |
|
76,358 |
|
|
$ |
|
36,582 |
|
Adjusted Segment EBITDA (1) |
|
|
|
27,397 |
|
|
|
|
28,662 |
|
|
|
|
7,535 |
|
Adjusted Segment EBITDA Margin (1) |
|
|
|
42.2 |
% |
|
|
|
37.5 |
% |
|
|
|
20.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Corporate |
|
|
|
|
|
|
|
|
|
|
|
|
|||
Revenues |
|
$ |
|
- |
|
|
$ |
|
- |
|
|
$ |
|
- |
|
Adjusted Segment EBITDA (1) |
|
|
|
(4,252 |
) |
|
|
|
(4,351 |
) |
|
|
|
17 |
|
Adjusted Segment EBITDA Margin (1) |
|
|
nm |
|
|
|
nm |
|
|
|
nm |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|||
Revenues |
|
$ |
|
193,215 |
|
|
$ |
|
192,350 |
|
|
$ |
|
93,208 |
|
Adjusted Segment EBITDA (1) |
|
|
|
76,488 |
|
|
|
|
74,901 |
|
|
|
|
40,236 |
|
Adjusted Segment EBITDA Margin (1) |
|
|
|
39.6 |
% |
|
|
|
38.9 |
% |
|
|
|
43.2 |
% |
(1) |
Adjusted Segment EBITDA and Adjusted Segment EBITDA Margin are non-GAAP financial measures. See definitions of these measures and the reconciliation of GAAP to non-GAAP financial measures outlined in the reconciliation tables accompanying this release. |
Production Solutions
Second quarter 2025 revenue for the Production Solutions segment increased 10.6% from the first quarter of 2025, and Adjusted Segment EBITDA increased 5.4% quarter over quarter for the same periods. The increase in revenue and Adjusted Segment EBITDA resulted from higher operating leverage and an increase in sales quarter over quarter. Adjusted Segment EBITDA Margin decreased 202 basis points due to a decrease in sales gross margin in the period.
Natural Gas Technologies
Second quarter 2025 revenue for the Natural Gas Technologies segment decreased 14.9% from the first quarter of 2025, primarily due to a decrease in sales in the Natural Gas Systems business unit. Adjusted Segment EBITDA decreased 4.4% quarter over quarter for the same periods, with Adjusted Segment EBITDA Margins increasing 463 basis points due to favorable revenue mix from rentals.
Corporate
Corporate Adjusted Segment EBITDA for the quarter ended June 30, 2025 was $(4.3) million, compared to $(4.4) million Corporate Adjusted Segment EBITDA in the quarter ended March 31, 2025.
Balance Sheet & Liquidity
As of August 1, 2025, the Company had outstanding borrowings under its senior secured revolving credit facility (“Credit Agreement”) of $226.6 million and, with a current borrowing base of $723.1 million, had availability under the Credit Agreement of $496.5 million.
Dividend Declaration
On August 1, 2025, Flowco announced that its Board of Directors had declared a quarterly cash dividend of $0.08 per share of Class A common stock payable on August 29, 2025 to Class A common stockholders of record as of the close of business on August 15, 2025. Flowco MergeCo LLC, the Company’s operating subsidiary, will make a corresponding distribution of $0.08 per unit to holders of its common units.
Conference Call and Webcast Information
Flowco will host a conference call on Tuesday, August 5, 2025, at 8:00 am Eastern Time to discuss second quarter 2025 results. The conference call can be accessed live over the phone by dialing 1-877-704-4453 (for the U.S.) or 1-201-389-0920 (for International). A telephonic replay of the conference call will be available two hours after the call and can be accessed by dialing 1-844-512-2921 (for the U.S.) or 1-412-317-6671 (for International). The passcode for the call and replay is 13754621. A live webcast of the conference call will also be available under the Investor Relations section of Flowco’s website at ir.flowco-inc.com.
About Flowco
Flowco is a leading provider of production optimization, artificial lift and methane abatement solutions for the oil and natural gas industry. The company’s products and services include a full range of equipment and technology solutions that enable oil and natural gas producers to efficiently and cost-effectively maximize the profitability and economic lifespan of their assets.
Forward-Looking Statements
The information in this press release includes forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts contained in this press release may be forward-looking statements. These statements generally relate to future events or our future financial or operating performance, and include, but are not limited to: statements regarding guidance or estimates related to the Company’s results of operations or financial condition; industry trends, customer demand and industry outlook, and effects on Flowco’s operations; Flowco’s strategies and plans, including matters relating to the Company growth, capital expenditures, dividend policies, and leverage profile. When used in this press release, words such as “expect,” “project,” “estimate,” “believe,” “anticipate,” “intend,” “plan,” “seek,” “forecast,” “target,” “predict,” “may,” “should,” “would,” “could,” and “will,” the negative of these terms and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Forward-looking statements are based on management’s current expectations and assumptions, and are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although Flowco believes that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements. These risks and uncertainties are described further in our annual report on Form 10-K for the year ended December 31, 2024 and our quarterly report for the period ended March 31, 2025 filed with the Securities and Exchange Commission. Flowco undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this press release. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.
Flowco Holdings Inc. Condensed Consolidated Statement of Operations |
|||||||||||||||||||||||||
|
|
Three Months Ended |
|
|
Six Months Ended |
|
|||||||||||||||||||
|
|
June 30,
|
|
|
March 31,
|
|
|
June 30,
|
|
|
June 30,
|
|
|
June 30,
|
|
||||||||||
|
|
(in thousands except share and per share amounts) |
|
||||||||||||||||||||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Rentals |
|
$ |
|
102,104 |
|
|
$ |
|
97,296 |
|
|
$ |
|
51,579 |
|
|
$ |
|
199,400 |
|
|
$ |
|
97,742 |
|
Sales |
|
|
|
91,111 |
|
|
|
|
95,054 |
|
|
|
|
41,629 |
|
|
|
|
186,165 |
|
|
|
|
62,178 |
|
Total revenues |
|
|
|
193,215 |
|
|
|
|
192,350 |
|
|
|
|
93,208 |
|
|
|
|
385,565 |
|
|
|
|
159,920 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cost of rentals (exclusive of depreciation
|
|
|
|
27,602 |
|
|
|
|
26,851 |
|
|
|
|
12,707 |
|
|
|
|
54,453 |
|
|
|
|
23,682 |
|
Cost of sales (exclusive of depreciation
|
|
|
|
62,579 |
|
|
|
|
65,566 |
|
|
|
|
31,605 |
|
|
|
|
128,145 |
|
|
|
|
48,538 |
|
Selling, general and administrative
|
|
|
|
32,683 |
|
|
|
|
30,534 |
|
|
|
|
6,716 |
|
|
|
|
63,217 |
|
|
|
|
11,192 |
|
Depreciation and amortization |
|
|
|
33,165 |
|
|
|
|
34,119 |
|
|
|
|
14,209 |
|
|
|
|
67,284 |
|
|
|
|
25,921 |
|
(Gain) loss on sale of equipment |
|
|
|
68 |
|
|
|
|
(45 |
) |
|
|
|
266 |
|
|
|
|
23 |
|
|
|
|
655 |
|
Income from operations |
|
|
|
37,118 |
|
|
|
|
35,325 |
|
|
|
|
27,705 |
|
|
|
|
72,443 |
|
|
|
|
49,932 |
|
Other expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest expenses |
|
|
|
(6,445 |
) |
|
|
|
(5,365 |
) |
|
|
|
(5,506 |
) |
|
|
|
(11,810 |
) |
|
|
|
(10,313 |
) |
Other expenses, net |
|
|
|
559 |
|
|
|
|
(267 |
) |
|
|
|
(1,944 |
) |
|
|
|
292 |
|
|
|
|
(2,046 |
) |
Total other expenses |
|
|
|
(5,886 |
) |
|
|
|
(5,632 |
) |
|
|
|
(7,450 |
) |
|
|
|
(11,518 |
) |
|
|
|
(12,359 |
) |
Income before provision for income taxes |
|
|
|
31,232 |
|
|
|
|
29,693 |
|
|
|
|
20,255 |
|
|
|
|
60,925 |
|
|
|
|
37,573 |
|
Provision for income taxes |
|
|
|
(3,880 |
) |
|
|
|
(2,648 |
) |
|
|
|
(173 |
) |
|
|
|
(6,528 |
) |
|
|
|
(306 |
) |
Net income |
|
|
|
27,352 |
|
|
|
|
27,045 |
|
|
$ |
|
20,082 |
|
|
|
|
54,397 |
|
|
$ |
|
37,267 |
|
Net income attributable to redeemable
|
|
|
|
21,881 |
|
|
|
|
20,873 |
|
|
|
|
|
|
|
|
42,754 |
|
|
|
|
|
||
Net income attributable to Flowco
|
|
$ |
|
5,471 |
|
|
$ |
|
6,172 |
|
|
|
|
|
|
$ |
|
11,643 |
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Earnings per share (1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic |
|
$ |
|
0.21 |
|
|
$ |
|
0.24 |
|
|
|
|
|
|
$ |
|
0.45 |
|
|
|
|
|
||
Diluted |
|
$ |
|
0.21 |
|
|
$ |
|
0.24 |
|
|
|
|
|
|
$ |
|
0.44 |
|
|
|
|
|
||
Weighted average shares outstanding (1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Basic |
|
|
|
25,728,144 |
|
|
|
|
25,721,620 |
|
|
|
|
|
|
|
|
25,725,197 |
|
|
|
|
|
||
Diluted |
|
|
|
26,195,643 |
|
|
|
|
26,187,264 |
|
|
|
|
|
|
|
|
26,193,327 |
|
|
|
|
|
||
(1) |
The calculations of basic and diluted earnings per share and weighted average shares of common stock outstanding cover the periods after January 16, 2025, which are the periods following the Company's initial public offering and the related reorganization transactions, through the end of second quarter 2025. |
Flowco Holdings Inc. Condensed Consolidated Balance Sheets |
||||||||||
|
|
As of |
|
|||||||
|
|
June 30,
|
|
|
December 31,
|
|
||||
|
|
(in thousands except share and per share amounts) |
|
|||||||
Assets |
|
|
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
9,287 |
|
|
$ |
|
4,615 |
|
Accounts receivable, net of allowances for credit losses of $1,526
|
|
|
|
122,768 |
|
|
|
|
120,353 |
|
Inventory |
|
|
|
150,846 |
|
|
|
|
151,179 |
|
Prepaid expenses and other current assets |
|
|
|
9,369 |
|
|
|
|
9,982 |
|
Total current assets |
|
|
|
292,270 |
|
|
|
|
286,129 |
|
Property, plant and equipment, net |
|
|
|
717,684 |
|
|
|
|
702,616 |
|
Operating lease right-of-use assets |
|
|
|
16,775 |
|
|
|
|
19,480 |
|
Finance lease right-of-use assets |
|
|
|
26,414 |
|
|
|
|
21,871 |
|
Intangible assets, net |
|
|
|
287,176 |
|
|
|
|
302,522 |
|
Goodwill |
|
|
|
249,692 |
|
|
|
|
249,692 |
|
Deferred tax asset |
|
|
|
10,054 |
|
|
|
|
— |
|
Other assets |
|
|
|
6,045 |
|
|
|
|
6,639 |
|
Total assets |
|
$ |
|
1,606,110 |
|
|
$ |
|
1,588,949 |
|
|
|
|
|
|
|
|
|
|
||
Liabilities, redeemable non-controlling interests and stockholders'/members' equity |
|
|
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
|
|
||
Accounts payable |
|
$ |
|
33,334 |
|
|
$ |
|
31,321 |
|
Accrued expenses |
|
|
|
30,244 |
|
|
|
|
33,829 |
|
Current portion of operating lease obligations |
|
|
|
7,391 |
|
|
|
|
6,809 |
|
Current portion of finance lease obligations |
|
|
|
13,076 |
|
|
|
|
7,837 |
|
Deferred revenue |
|
|
|
5,923 |
|
|
|
|
8,002 |
|
Total current liabilities |
|
|
|
89,968 |
|
|
|
|
87,798 |
|
Long-term liabilities: |
|
|
|
|
|
|
|
|
||
Long-term debt, net |
|
|
|
167,051 |
|
|
|
|
635,916 |
|
Tax receivable agreement liability |
|
|
|
12,484 |
|
|
|
|
— |
|
Operating lease obligations, net of current portion |
|
|
|
9,624 |
|
|
|
|
12,739 |
|
Finance lease obligations, net of current portion |
|
|
|
11,980 |
|
|
|
|
13,389 |
|
Total long-term liabilities |
|
|
|
201,139 |
|
|
|
|
662,044 |
|
Total liabilities |
|
|
|
291,107 |
|
|
|
|
749,842 |
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
||
Redeemable non-controlling interests |
|
|
|
1,164,654 |
|
|
|
|
— |
|
Members' equity: |
|
|
|
|
|
|
|
|
||
Members' equity |
|
|
|
— |
|
|
|
|
839,107 |
|
Total members' equity |
|
|
|
— |
|
|
|
|
839,107 |
|
Stockholders' equity: |
|
|
|
|
|
|
|
|
||
Class A common stock, $0.0001 par value – 300,000,000 shares authorized; 25,729,432 shares issued and outstanding as of June 30, 2025; no such shares authorized, issued or outstanding as of December 31, 2024. |
|
|
|
3 |
|
|
|
|
— |
|
Class B common stock, $0.0001 par value – 150,000,000 shares authorized; 64,823,042 shares issued and outstanding as of June 30, 2025; no such shares authorized, issued or outstanding as of December 31, 2024. |
|
|
|
6 |
|
|
|
|
— |
|
Additional paid-in capital |
|
|
|
18,113 |
|
|
|
|
— |
|
Retained earnings |
|
|
|
132,227 |
|
|
|
|
— |
|
Total stockholders' equity to Flowco Holdings Inc. |
|
|
|
150,349 |
|
|
|
|
— |
|
Total liabilities, redeemable non-controlling interests and members'/stockholders' equity |
|
$ |
|
1,606,110 |
|
|
$ |
|
1,588,949 |
|
Flowco Holdings Inc. Condensed Consolidated Statements of Cash Flows |
||||||||||
|
|
Six Months Ended June 30, |
|
|||||||
|
|
2025 |
|
|
2024 |
|
||||
|
|
(in thousands) |
|
|||||||
Cash flows from operating activities |
|
|
|
|
|
|
|
|
||
Net income |
|
$ |
|
54,397 |
|
|
$ |
|
37,267 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
67,284 |
|
|
|
|
25,921 |
|
Provision for inventory obsolescence |
|
|
|
1,274 |
|
|
|
|
727 |
|
Amortization of operating right-of-use assets |
|
|
|
4,011 |
|
|
|
|
515 |
|
Amortization of deferred financing costs |
|
|
|
674 |
|
|
|
|
200 |
|
(Gain) loss on sale of equipment |
|
|
|
23 |
|
|
|
|
655 |
|
Gain on lease termination |
|
|
|
(263 |
) |
|
|
|
— |
|
Share-based compensation |
|
|
|
7,991 |
|
|
|
|
153 |
|
Provision for deferred income taxes |
|
|
|
1,428 |
|
|
|
|
— |
|
Allowance for credit losses |
|
|
|
941 |
|
|
|
|
388 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
||
Accounts receivable |
|
|
|
(3,356 |
) |
|
|
|
(3,355 |
) |
Inventory |
|
|
|
(941 |
) |
|
|
|
(4,138 |
) |
Prepaid expenses and other current assets |
|
|
|
614 |
|
|
|
|
(1,338 |
) |
Other assets and liabilities |
|
|
|
(66 |
) |
|
|
|
— |
|
Accounts payable - trade |
|
|
|
2,014 |
|
|
|
|
(3,882 |
) |
Accrued expenses |
|
|
|
(6,695 |
) |
|
|
|
(2,428 |
) |
Deferred revenue |
|
|
|
(2,079 |
) |
|
|
|
- |
|
Operating lease liabilities |
|
|
|
(3,591 |
) |
|
|
|
(514 |
) |
Finance lease liabilities |
|
|
|
1,067 |
|
|
|
|
— |
|
Net cash provided by operating activities |
|
|
|
124,727 |
|
|
|
|
50,171 |
|
Cash flows used in investing activities |
|
|
|
|
|
|
|
|
||
Additions to property, plant and equipment |
|
|
|
(63,620 |
) |
|
|
|
(27,480 |
) |
Proceeds from sale of property, plant and equipment |
|
|
|
270 |
|
|
|
|
29 |
|
Net cash acquired in 2024 Business Combination |
|
|
|
— |
|
|
|
|
3,088 |
|
Payment for capitalized patent costs |
|
|
|
(95 |
) |
|
|
|
— |
|
Net cash used in investing activities |
|
|
|
(63,445 |
) |
|
|
|
(24,363 |
) |
Cash flows used in financing activities |
|
|
|
|
|
|
|
|
||
Issuance of Class A common stock in IPO, net of underwriting discount |
|
|
|
461,803 |
|
|
|
|
— |
|
Payment of offering costs |
|
|
|
(2,458 |
) |
|
|
|
— |
|
Payments on long-term debt |
|
|
|
(706,683 |
) |
|
|
|
(51,480 |
) |
Proceeds from long-term debt |
|
|
|
237,817 |
|
|
|
|
62,556 |
|
Payments on finance lease obligations |
|
|
|
(5,663 |
) |
|
|
|
(1,330 |
) |
Proceeds on finance lease terminations |
|
|
|
313 |
|
|
|
|
— |
|
Purchase of LLC Interests from Continuing Equity Owners |
|
|
|
(20,876 |
) |
|
|
|
— |
|
Payment of debt issuance costs |
|
|
|
(13 |
) |
|
|
|
— |
|
Distributions to members |
|
|
|
(18,792 |
) |
|
|
|
(30,500 |
) |
Dividend payments to FHI shareholders |
|
|
|
(2,058 |
) |
|
|
|
— |
|
Net cash used in financing activities |
|
|
|
(56,610 |
) |
|
|
|
(20,754 |
) |
Net increase (decrease) in cash and cash equivalents |
|
|
|
4,672 |
|
|
|
|
5,054 |
|
Cash and cash equivalents |
|
|
|
|
|
|
|
|
||
Beginning of period |
|
|
|
4,615 |
|
|
|
|
— |
|
End of period |
|
$ |
|
9,287 |
|
|
$ |
|
5,054 |
|
Non-GAAP Financial Measures
In addition to our results determined in accordance with generally accepted accounting principles in the United States (“GAAP”), the Company uses non-GAAP financial measures, such as Adjusted Net Income, EBITDA and Adjusted EBITDA, as well as Adjusted Segment EBITDA and Adjusted Segment EBITDA Margin, in this press release to supplement financial information presented in accordance with GAAP. We believe that excluding certain items from our GAAP results provides management additional insight on the consolidated financial performance from period to period to project our future consolidated financial performance as forecasts are developed at a level of detail different from that used to prepare GAAP-based financial measures. Moreover, we believe these non-GAAP financial measures provide our management and investors with useful information to help them evaluate our operating results by facilitating an enhanced understanding of our operating performance and enabling them to make more meaningful period to period comparisons. There are limitations to the use of the non-GAAP financial measures presented in this press release. For example, our non-GAAP financial measures may not be comparable to similarly titled measures of other companies. Other companies, including companies in our industry, may calculate non-GAAP financial measures differently than we do, limiting the usefulness of those measures for comparative purposes. Non-GAAP measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. The Company urges investors to review the reconciliation and not to rely on any single financial measure to evaluate our business.
Adjusted Net Income
Adjusted Net Income is a non-GAAP measure that we define as net income (loss) adjusted to eliminate the impact of (i) transaction-related expenses, (ii) share-based compensation, (iii) loss on the sale of equipment, (iv) loss on debt payments and (v) changes to the value of our inventory. Adjusted Net Income is a supplemental non-GAAP financial measure used by management, our stockholders and others to provide visibility on the profitability and financial strength of the Company by excluding certain expenses related to non-recurring Company transactions.
Reconciliation from net income to Adjusted Net Income is set forth as follows:
|
|
Three Months Ended |
|
||||||||||||
|
|
June 30, 2025 |
|
|
March 31, 2025 |
|
|
June 30, 2024 |
|
||||||
(in thousands) |
|||||||||||||||
Net income |
|
$ |
|
27,352 |
|
|
$ |
|
27,045 |
|
|
$ |
|
20,082 |
|
Transaction related expenses (1) |
|
|
|
6 |
|
|
|
|
493 |
|
|
|
|
— |
|
Share-based compensation expense (2) |
|
|
|
1,670 |
|
|
|
|
4,962 |
|
|
|
|
— |
|
Non-recurring charges (3) |
|
|
|
3,902 |
|
|
|
|
— |
|
|
|
|
— |
|
Loss on sale of equipment |
|
|
|
68 |
|
|
|
|
(45 |
) |
|
|
|
266 |
|
Inventory valuation adjustments (4) |
|
|
|
— |
|
|
|
|
314 |
|
|
|
|
— |
|
Adjusted Net Income |
|
$ |
|
32,998 |
|
|
$ |
|
32,769 |
|
|
$ |
|
20,348 |
|
(1) |
Represents the transaction-related expenses as part of the 2024 Business Combination and non-capitalizable IPO related costs, which were expensed as incurred and included in the consolidated statements of operations. |
(2) |
Reflects non-cash compensation expense for equity-based awards to our employees and non-employee directors for the periods presented. |
(3) |
Represents one-time charges related to termination benefits and related expenses, which includes one of our executive officers, and the costs associated with the re-purposing of one of our manufacturing facilities in Pampa, TX. |
(4) |
Reflects non-cash adjustment related to inventory fair value step-up from the 2024 Business Combination which has been included in cost of sales. |
Adjusted EBITDA and Adjusted EBITDA margin
We define EBITDA as net income, adjusted to exclude interest expense, provision for income taxes and depreciation and amortization. We define Adjusted EBITDA as EBITDA adjusted to exclude (i) share-based compensation expense, (ii) business combination-related expenses and (iii) other non-cash and non-recurring expenses.
EBITDA and Adjusted EBITDA are key performance indicators we use in evaluating our operating performance and in making financial, operating and planning decisions. In particular, the exclusion of certain expenses in calculating EBITDA and Adjusted EBITDA provides additional visibility on operating performance across reporting periods by removing the effect of non-cash and/or non-recurring expenses. Accordingly, we believe that this measure provides useful information to our stockholders and others in understanding and evaluating our operating results in the same manner as our management and board of directors.
Reconciliation from net income to EBITDA and Adjusted EBITDA are set forth as follows:
|
|
Three Months Ended |
|
||||||||||||
|
|
June 30, 2025 |
|
|
March 31, 2025 |
|
|
June 30, 2024 |
|
||||||
(in thousands) |
|||||||||||||||
Net income |
|
$ |
|
27,352 |
|
|
$ |
|
27,045 |
|
|
$ |
|
20,082 |
|
Interest expense |
|
|
|
6,445 |
|
|
|
|
5,365 |
|
|
|
|
5,506 |
|
Provision for income taxes (1) |
|
|
|
3,880 |
|
|
|
|
2,648 |
|
|
|
|
173 |
|
Depreciation and amortization |
|
|
|
33,165 |
|
|
|
|
34,119 |
|
|
|
|
14,209 |
|
EBITDA |
|
|
|
70,842 |
|
|
|
|
69,177 |
|
|
|
|
39,970 |
|
Transaction related expenses (2) |
|
|
|
6 |
|
|
|
|
493 |
|
|
|
|
— |
|
Share-based compensation expense (3) |
|
|
|
1,670 |
|
|
|
|
4,962 |
|
|
|
|
— |
|
Non-recurring charges (4) |
|
|
|
3,902 |
|
|
|
|
— |
|
|
|
|
— |
|
Loss on sale of equipment |
|
|
|
68 |
|
|
|
|
(45 |
) |
|
|
|
266 |
|
Inventory valuation adjustments (5) |
|
|
|
— |
|
|
|
|
314 |
|
|
|
|
— |
|
Adjusted EBITDA |
|
$ |
|
76,488 |
|
|
$ |
|
74,901 |
|
|
$ |
|
40,236 |
|
(1) |
Previously issued non-GAAP information did not include provision for income taxes amounts as a reconciling item for the year ended December 31, 2023, as Texas margin tax was included within other expense in the previously issued consolidated statements of operations. In order to conform with current year’s presentation, the Company reclassified Texas margin tax amounts from other expense into provision for income taxes, and consequently, have been included as a reconciling item to Adjusted EBITDA from net income for all periods presented above. |
(2) |
Represents the transaction-related expenses as part of the 2024 Business Combination and non-capitalizable IPO related costs, which were expensed as incurred and included in the consolidated statements of operations. |
(3) |
Reflects non-cash compensation expense for equity-based awards to our employees and non-employee directors for the periods presented. |
(4) |
Represents one-time charges related to termination benefits and related expenses, which includes one of our executive officers, and the costs associated with the re-purposing of one of our manufacturing facilities in Pampa, TX. |
(5) |
Reflects non-cash adjustment related to inventory fair value step-up from the 2024 Business Combination which has been included in cost of sales. |
Adjusted Segment EBITDA and Adjusted Segment EBITDA Margin
In addition to business segment profit or loss, our management also evaluates Adjusted Segment EBITDA, which is presented on a business unit level for purposes of allocating resources and evaluating operating and financial performance. As discussed above, the Company operates and manages its business units in the following two operating and reporting segments:
- Production Solutions: relates to rentals, sales and services related to high pressure gas lift, conventional gas lift and plunger lift. This segment includes rental, sales and service revenues.
- Natural Gas Technologies: relates to the design, manufacturing, rental, sale and servicing of vapor recovery and natural gas systems. This segment includes rental, sales, service revenues and methane abatement technology.
We define Adjusted Segment EBITDA as segment net income, as adjusted in the same manner as defined for EBITDA and Adjusted EBITDA above. Reconciliation from segment net income, which includes direct segment costs but excludes corporate costs not directly related to either segment, to Adjusted Segment EBITDA is set forth as follows:
|
|
Three Months Ended |
|
||||||||||||
|
|
June 30, 2025 |
|
|
March 31, 2025 |
|
|
June 30, 2024 |
|
||||||
(in thousands) |
|||||||||||||||
Production Solutions |
|
|
|
|
|
|
|
|
|
|
|
|
|||
Net income |
|
$ |
|
32,676 |
|
|
$ |
|
29,032 |
|
|
$ |
|
14,850 |
|
Interest expense |
|
|
|
2,302 |
|
|
|
|
93 |
|
|
|
|
4,989 |
|
Provision for income taxes |
|
|
|
53 |
|
|
|
|
211 |
|
|
|
|
92 |
|
Depreciation and amortization |
|
|
|
18,192 |
|
|
|
|
19,614 |
|
|
|
|
12,487 |
|
EBITDA |
|
|
|
53,223 |
|
|
|
|
48,950 |
|
|
|
|
32,418 |
|
Transaction related expenses (1) |
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
Share-based compensation expense (2) |
|
|
|
— |
|
|
|
|
1,280 |
|
|
|
|
— |
|
Non-recurring charges (3) |
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
(Gain) loss on sale of equipment |
|
|
|
120 |
|
|
|
|
46 |
|
|
|
|
266 |
|
Inventory valuation adjustments (4) |
|
|
|
— |
|
|
|
|
314 |
|
|
|
|
— |
|
Adjusted Segment EBITDA |
|
|
|
53,343 |
|
|
|
|
50,590 |
|
|
|
|
32,684 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Natural Gas Technologies |
|
|
|
|
|
|
|
|
|
|
|
|
|||
Net income |
|
$ |
|
11,229 |
|
|
$ |
|
11,632 |
|
|
$ |
|
5,215 |
|
Interest expense |
|
|
|
224 |
|
|
|
|
202 |
|
|
|
|
517 |
|
Provision for income taxes |
|
|
|
29 |
|
|
|
|
112 |
|
|
|
|
81 |
|
Depreciation and amortization |
|
|
|
14,967 |
|
|
|
|
14,499 |
|
|
|
|
1,722 |
|
EBITDA |
|
|
|
26,449 |
|
|
|
|
26,445 |
|
|
|
|
7,535 |
|
Transaction related expenses (1) |
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
Share-based compensation expense (2) |
|
|
|
— |
|
|
|
|
2,308 |
|
|
|
|
— |
|
Non-recurring charges (3) |
|
|
|
1,000 |
|
|
|
|
— |
|
|
|
|
— |
|
(Gain) loss on sale of equipment |
|
|
|
(52 |
) |
|
|
|
(91 |
) |
|
|
|
— |
|
Inventory valuation adjustments (4) |
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
Adjusted Segment EBITDA |
|
|
|
27,397 |
|
|
|
|
28,662 |
|
|
|
|
7,535 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Corporate |
|
|
|
|
|
|
|
|
|
|
|
|
|||
Net income |
|
$ |
|
(16,553 |
) |
|
$ |
|
(13,619 |
) |
|
$ |
|
17 |
|
Interest expense |
|
|
|
3,919 |
|
|
|
|
5,070 |
|
|
|
|
— |
|
Provision for income taxes |
|
|
|
3,798 |
|
|
|
|
2,325 |
|
|
|
|
— |
|
Depreciation and amortization |
|
|
|
6 |
|
|
|
|
6 |
|
|
|
|
— |
|
EBITDA |
|
|
|
(8,830 |
) |
|
|
|
(6,218 |
) |
|
|
|
17 |
|
Transaction related expenses (1) |
|
|
|
6 |
|
|
|
|
493 |
|
|
|
|
— |
|
Share-based compensation expense (2) |
|
|
|
1,670 |
|
|
|
|
1,374 |
|
|
|
|
— |
|
Non-recurring charges (3) |
|
|
|
2,902 |
|
|
|
|
— |
|
|
|
|
— |
|
(Gain) loss on sale of equipment |
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
Inventory valuation adjustments (4) |
|
|
|
— |
|
|
|
|
— |
|
|
|
|
— |
|
Adjusted Segment EBITDA |
|
|
|
(4,252 |
) |
|
|
|
(4,351 |
) |
|
|
|
17 |
|
Total Adjusted EBITDA |
|
$ |
|
76,488 |
|
|
$ |
|
74,901 |
|
|
$ |
|
40,236 |
|
(1) |
Represents the transaction-related expenses as part of the 2024 Business Combination and non-capitalizable IPO related costs, which were expensed as incurred and included in the consolidated statements of operations. |
(2) |
Reflects non-cash compensation expense for equity-based awards to our employees and non-employee directors for the periods presented. |
(3) |
Represents one-time charges related to termination benefits and related expenses, which includes one of our executive officers (Corporate), and the costs associated with the re-purposing of one of our manufacturing facilities in Pampa, TX (Natural Gas Technologies). |
(4) |
Reflects non-cash adjustment related to inventory fair value step-up from the 2024 Business Combination which has been included in cost of sales. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20250804158592/en/
Contacts
Investor Contact:
Andrew Leonpacher
investor.relations@flowco-inc.com