DENVER–(BUSINESS WIRE)– Liberty Energy Inc., (NYSE: LBRT; \u201cLiberty\u201d or the \u201cCompany\u201d) announced today second quarter 2023 financial and operational results.<\/p>\n
Summary Results and Highlights<\/b><\/p>\n \u201cWe executed on another quarter with strong financial results, and I\u2019m especially proud of our operations team for safely delivering the highest quarterly average daily pumping efficiency in our history, a high bar raised higher! Liberty achieved adjusted EBITDA2<\/sup>\u00a0of\u00a0$311 million\u00a0and fully diluted earnings per share of\u00a0$0.87. Our success in growing our long-term competitive advantage is illustrated by our trailing 12-month Adjusted Pre-Tax Return on Capital Employed3<\/sup>\u00a0of 44%,\u201d commented Chris Wright, Chief Executive Officer. \u201cStrong cash generation enables long-term investment, together with a strong return of capital program. In the second quarter, we returned\u00a0$69 million\u00a0to shareholders through the repurchase of 2.7% of shares outstanding plus our quarterly dividend. The compounding effect of our last 12 months of share buybacks is evidenced by the 57% year-over-year increase in fully diluted earnings per share on a 45% increase in net income.\u201d<\/p>\n \u201cDuring the second quarter, we closed the Siren Energy acquisition, expanding LPI\u2019s\u00a0Texas\u00a0operations. LPI provides CNG fuel and field gas processing services to provide a reliable source of natural gas fuels in support of our digiTechnologiesSM<\/sup>\u00a0rollout. These technologies are the leading natural gas-fueled solutions in the completions industry and will drive higher earnings potential in the years ahead,\u201d continued Mr. Wright. \u201cWe\u2019ve created a unique competitive position where we can take advantage of accretive cyclical and secular investment opportunities generating high returns while returning cash to shareholders and maintaining a strong balance sheet.\u201d<\/p>\n Outlook<\/b><\/p>\n Frac markets in\u00a0North America\u00a0are at steady, healthy activity levels, after moderating a bit from late 2022 as commodity prices retreated from the 2022 peak. Crude oil prices are now at pre-Russia-Ukraine\u00a0war levels which has spurred private operators in oilier basins to reduce activity. Lower natural gas prices have led to a curtailment of activity in gas basins. In the second half of 2023, demand for frac fleets is expected to parallel recent rig count trends at approximately a one quarter lag. The rig count shows signs of stabilization emerging. E&P operators are already benefiting from lower well costs from consumable inputs, and some are evaluating plans to pull-forward completions activity. Natural gas markets likely don\u2019t meaningfully increase activity until 2024 in advance of rising LNG and\u00a0Mexico\u00a0exports.<\/p>\n More broadly, global oil markets are signaling a constructive outlook on a tightening supply-demand balance. OPEC+ supply cuts in recent months are beginning to take hold, and markets are anticipating a subsequent draw on global oil inventories. In the\u00a0U.S., slowing production growth, a drawdown of oil inventories, and a likely shift to refilling\u00a0U.S.\u00a0strategic petroleum reserves aid the outlook. Despite recessionary risks, demand for oil remains resilient given several factors, including global travel trending towards pre-Covid levels, robust demand from\u00a0India\u00a0and strength in emerging markets. Underinvestment in global production capacity supports a resilient multi-year cycle for oil and gas.<\/p>\n Relative to prior cycles, frac demand has a natural floor as the large majority of completions activity is simply offsetting normal production declines. Operators are largely adhering to flat or very modest production growth targets. The combination underpins higher base levels of frac fleet utilization and more insulation from commodity price volatility than in prior cycles. The current, more consolidated industry is better prepared to navigate near-term softness in completions activity by reducing fleet counts to balance the market and protect margins.<\/p>\n \u201cThe industrialization of emerging economies is driving long term demand for reliable, affordable energy, and the North American land market is in a strong position as the largest supplier of incremental production. Our industry remains healthy, even with a modest contraction in oil prices from 2022 levels and transient softness in natural gas markets. The discipline of producers and service providers alike, with investment programs fueled by cash flow, steadier activity levels, and strong balance sheets, supports an industry with healthy returns and free cash flow generation,\u201d commented Mr. Wright.<\/p>\n \u201cWe anticipate North American completions activity will moderate in the second half of the year versus the first half. Service companies are reducing fleets in response, supporting a balanced frac market and a largely stable price environment. We expect to continue to deliver healthy free cash flow and return capital to our shareholders through opportunistic share repurchases and dividends,\u201d commented Mr. Wright.<\/p>\n Share Repurchase Program<\/b><\/p>\n During the quarter ended June 30, 2023, Liberty repurchased and retired 4,722,257 shares of Class A common stock at an average of\u00a0$12.71\u00a0per share, representing 2.7% of shares outstanding, for approximately\u00a0$60 million. Liberty has cumulatively repurchased and retired 9.7% of shares outstanding at program commencement on July 25, 2022. Total remaining authorization for future common share repurchases is approximately\u00a0$240 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 June 30, 2023, the Company paid a quarterly cash dividend of\u00a0$0.05\u00a0per share of Class A common stock, or approximately\u00a0$9 million\u00a0in aggregate to shareholders.<\/p>\n On July 18, 2023, the Board declared a cash dividend of\u00a0$0.05\u00a0per share of Class A common stock, to be paid on September 20, 2023 to holders of record as of September 6, 2023.<\/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 Second Quarter Results<\/b><\/p>\n For the second quarter of 2023, revenue grew to\u00a0$1.2 billion, an increase of 27% from\u00a0$943 million\u00a0in the second quarter of 2022 and a decrease of 5% from\u00a0$1.3 billion\u00a0in the first quarter of 2023.<\/p>\n Net income1<\/sup>\u00a0(after taxes) totaled\u00a0$153 million\u00a0for the second quarter of 2023 compared to net income1<\/sup>\u00a0of\u00a0$105 million\u00a0in the second quarter of 2022 and net income1<\/sup>\u00a0of$163 million\u00a0in the first quarter of 2023.<\/p>\n Adjusted EBITDA2\u00a0<\/sup>of\u00a0$311 million, increased 59% from\u00a0$196 million\u00a0in the second quarter of 2022 and decreased 6% from\u00a0$330 million\u00a0in the first 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$0.87\u00a0for the second quarter of 2023 compared to fully diluted earnings per share of\u00a0$0.55\u00a0for the second quarter of 2022 and fully diluted earnings per share of\u00a0$0.90\u00a0for the first quarter of 2023.<\/p>\n Balance Sheet and Liquidity<\/b><\/p>\n As of June 30, 2023, Liberty had cash on hand of\u00a0$32 million, an increase from first quarter levels, and total debt of\u00a0$288 million\u00a0drawn on the secured asset-based revolving credit facility (\u201cABL Facility\u201d). Total liquidity, including availability under the credit facility, was\u00a0$226 million\u00a0as of June 30, 2023.<\/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, July 20, 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 2705748. The replay will be available until July 27, 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