DENVER–(BUSINESS WIRE)– Liberty Energy Inc., (NYSE: LBRT; \u201cLiberty\u201d or the \u201cCompany\u201d) announced today third quarter 2023 financial and operational results.<\/p>\n
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Summary Results and Highlights<\/b><\/p>\n \u201cLiberty delivered excellent quarterly financial results reflecting outstanding operational execution, focused customer engagement and agility across a softer North American frac market. Record pumping efficiencies drove sequential growth in revenue and Adjusted EBITDA while idling one fleet during the quarter. The industry remained disciplined, championing steady pricing for quality services while withdrawing underutilized frac fleets from the market. Our superior execution combined with expanded vertical integration and technology investments culminated in a trailing 12-month Adjusted Pre-Tax Return on Capital Employed3<\/sup>\u00a0of 44%,\u201d commented Chris Wright, Chief Executive Officer.<\/p>\n \u201cOver the years, our investment decisions have increased our competitive advantage, driving value creation through technology, scale and vertical integration. Today, the latest piece in our digiTechnologies\u2120 suite is demonstrating impressive operating results. The commercial deployment of our proprietary digiPrime units commenced in late September, quickly becoming the crew and customer\u2019s favorite technology on location. Our digiFrac\u2120 fleets deployed during the year reached new operating records, maximizing fuel efficiency with Liberty Power Innovations (\u201cLPI\u201d) CNG logistics and on-site management. We are on track to be operating four digiFleets by year end and six digiFleets by the end of January 2024. We are excited by the strong customer pull for our digiFleets and the enduring competitive advantages they bring to our portfolio,\u201d continued Mr. Wright.<\/p>\n \u201cOur returns-focused strategy centers on strong cash flow generation to fund compelling investments while returning cash to shareholders. During the third quarter, we repurchased 1% of our shares outstanding, or a cumulative 11% since our buyback reinstatement in July 2022.\u201d<\/p>\n \u201cOur investment in differential technologies and innovative businesses build on our competitive advantage and expand our market opportunities. We increased our quarterly cash dividend by 40% in response to the significant growth in our per share earnings and cash generating abilities from our business transformation over the last three years. We remain focused on maximizing the value of each Liberty share and driving higher total returns for years to come.\u201d<\/p>\n Outlook<\/b><\/p>\n Frac industry dynamics are encouraging amidst moderating demand trends, as service prices have remained relatively steady while underutilized frac fleets exited the market. Fleets across the industry were idled in response to completions activity softness, supporting a better supply-demand balance of marketed fleets as compared to prior cycles. As the Shale Revolution matures, the industry has adapted to a new era in frac markets through consolidation, technological progress, disciplined investment and serving increasingly complex customer needs.<\/p>\n Frac activity has largely stabilized at current levels, representing a baseload of frac fleet demand needed to sustain E&P operators\u2019 flattish production levels. Fourth quarter trends will likely see seasonal softness, winter weather, and holiday disruptions. We expect the recent strengthening of commodity prices will drive a modest increase in activity beginning in 2024.<\/p>\n Global oil and gas markets found firmer footing during the third quarter, driving higher oil and gas prices. Volatility in commodity markets has emerged from the possibility of an escalating conflict in the\u00a0Middle East\u00a0and renewed recessionary fears. Recognizing the elevated uncertainty, global oil industry production and demand trends infer that the delicate balance of oil and gas markets is tilted to the upside. The long-term demand outlook for secure North American energy anchors a more durable cycle. OPEC+ decisions, including the extension of Saudi Arabia\u2019s production cuts, further demonstrate a willingness to support commodity prices, underpinning long-term investments in North American shale.<\/p>\n \u201cEnergy market fundamentals support positive momentum in\u00a0North America\u00a0resource development, leading to consolidation and investment amongst E&P operators focused on long term value creation. Liberty is uniquely positioned to support our customers\u2019 ambitions to unlock value with our next generation technologies, integrated services, and scale. We are confident that our superior, reliable service quality better positions our customers to achieve higher capital and operating efficiencies to deliver durable returns,\u201d commented Mr. Wright.<\/p>\n \u201cLiberty teams outperformed in the third quarter despite industry activity headwinds, delivering significant operating efficiencies and attractive returns. Fourth quarter activity is expected to slow modestly on normal seasonality and the related impact on efficiency. For full year 2023, we expect Adjusted EBITDA will be at the high end of our guidance range of 30% to 40% growth over 2022,\u201d continued Mr. Wright. \u201cWe continue to deliver superior returns and a differential service for our customers. Our commitment to excellence and focus on company culture, our next generation digiTechnologies suite, and LPI positions us well to compete in near-term cycles and over the long term.\u201d<\/p>\n Share Repurchase Program<\/b><\/p>\n During the quarter ended September 30, 2023, Liberty repurchased and retired 1,784,899 shares of Class A common stock at an average of\u00a0$16.38\u00a0per share, representing 1.0% of shares outstanding, for approximately\u00a0$29 million. Liberty has cumulatively repurchased and retired 10.6% of shares outstanding at program commencement on July 25, 2022. Total remaining authorization for future common share repurchases is approximately\u00a0$211 million.<\/p>\n The shares may be repurchased from time to time in open market transactions, through block trades, in privately negotiated transactions, through derivative transactions or by other means in accordance with federal securities laws. The timing, as well as the number and value of shares repurchased under the program, will be determined by the Company at its discretion and will depend on a variety of factors, including management\u2019s assessment of the intrinsic value of the Company\u2019s common stock, the market price of the Company\u2019s common stock, general market and economic conditions, available liquidity, compliance with the Company\u2019s debt and other agreements, applicable legal requirements, and other considerations. The exact number of shares to be repurchased by the Company is not guaranteed, and the program may be suspended, modified, or discontinued at any time without prior notice. The Company expects to fund the repurchases by using cash on hand, borrowings under its revolving credit facility and expected free cash flow to be generated through the authorization period.<\/p>\n Quarterly Cash Dividend<\/b><\/p>\n During the quarter ended September 30, 2023, the Company paid a quarterly cash dividend of\u00a0$0.05\u00a0per share of Class A common stock, or approximately\u00a0$8 million\u00a0in aggregate to shareholders.<\/p>\n On October 17, 2023, the Board declared a cash dividend of\u00a0$0.07\u00a0per share of Class A common stock, to be paid on December 20, 2023 to holders of record as of December 6, 2023. This dividend represents a 40% increase from the prior quarter.<\/p>\n Future declarations of quarterly cash dividends are subject to approval by the Board of Directors and to the Board\u2019s continuing determination that the declarations of dividends are in the best interests of Liberty and its stockholders. Future dividends may be adjusted at the Board\u2019s discretion based on market conditions and capital availability.<\/p>\n S&P 600 Inclusion<\/b><\/p>\n Liberty was recently included in the S&P 600 Index effective prior to the market open on September 18, 2023. Prior to the inclusion, Liberty was not a constituent in the S&P Composite 1500 Indices.<\/p>\n Third Quarter Results<\/b><\/p>\n For the third quarter of 2023, revenue grew to\u00a0$1.2 billion, an increase of 2% from\u00a0$1.2 billion\u00a0in the third quarter of 2022 and 2% from\u00a0$1.2 billion\u00a0in the second quarter of 2023.<\/p>\n Net income1<\/sup>\u00a0(after taxes) totaled\u00a0$149 million\u00a0for the third quarter of 2023 compared to net income1<\/sup>\u00a0of\u00a0$147 million\u00a0in the third quarter of 2022 and net income1<\/sup>\u00a0of$153 million\u00a0in the second quarter of 2023.<\/p>\n Adjusted EBITDA2\u00a0<\/sup>of\u00a0$319 million, increased 15% from\u00a0$277 million\u00a0in the third quarter of 2022 and 2% from\u00a0$311 million\u00a0in the second quarter of 2023. Please refer to the reconciliation of Adjusted EBITDA (a non-GAAP measure) to net income (a GAAP measure) in this earnings release.<\/p>\n Fully diluted earnings per share was\u00a0$0.85\u00a0for the third quarter of 2023 compared to fully diluted earnings per share of\u00a0$0.78\u00a0for the third quarter of 2022 and fully diluted earnings per share of\u00a0$0.87\u00a0for the second quarter of 2023.<\/p>\n Balance Sheet and Liquidity<\/b><\/p>\n As of September 30, 2023, Liberty had cash on hand of\u00a0$27 million, a slight decrease from second quarter levels, and total debt of\u00a0$223 million\u00a0drawn on the secured asset-based revolving credit facility (\u201cABL Facility\u201d), a\u00a0$65 million\u00a0decrease from second quarter. Total liquidity, including availability under the credit facility, based on the September 30, 2023 financials, was\u00a0$322 million.<\/p>\n Conference Call<\/b><\/p>\n Liberty will host a conference call to discuss the results at 8:00 a.m. Mountain Time (10:00 a.m. Eastern Time) on Thursday, October 19, 2023. Presenting Liberty\u2019s results will be Chris Wright, Chief Executive Officer, Ron Gusek, President, and Michael Stock, Chief Financial Officer.<\/p>\n Individuals wishing to participate in the conference call should dial (833) 255-2827, or for international callers (412) 902-6704. Participants should ask to join the Liberty Energy call. A live webcast will be available at\u00a0http:\/\/investors.libertyfrac.com<\/a>. The webcast can be accessed for 90 days following the call. A telephone replay will be available shortly after the call and can be accessed by dialing (877) 344-7529, or for international callers (412) 317-0088. The passcode for the replay is 9116297. The replay will be available until October 26, 2023.<\/p>\n About Liberty<\/b><\/p>\n Liberty is a leading North American energy services firm that offers one of the most innovative suites of completion services and technologies to onshore oil and natural gas exploration and production companies. Liberty was founded in 2011 with a relentless focus on developing and delivering next generation technology for the sustainable development of unconventional energy resources in partnership with our customers. Liberty is headquartered in\u00a0Denver, Colorado. For more information about Liberty, please contact Investor Relations at\u00a0IR@libertyenergy.com<\/a>.<\/p>\n\n