Liberty Energy Inc. (NYSE: LBRT; \u201cLiberty\u201d or the \u201cCompany\u201d) announced today second quarter 2024 financial and operational results.<\/p>\n
Summary Results and Highlights<\/b><\/p>\n \u201cIn the second quarter we delivered strong operating and financial performance and demonstrated the value of Liberty\u2019s competitive advantage,\u201d commented Chris Wright, Chief Executive Officer. \u201cWe delivered 8% and 12% sequential increases in revenue and Adjusted EBITDA1<\/sup>, respectively, while industry drilling and completions activity modestly softened over the same period. Record average daily pumping efficiencies and record safety performance, coupled with increased utilization of our fleets again underpinned strong results. Our company culture, long-term customer partnerships, innovative technologies, scale, and vertical integration allowed us to deliver a 28% Adjusted Pre-Tax Return on Capital Employed2<\/sup>\u00a0for the twelve months ended June 30, 2024.\u201d<\/p>\n \u201cWe are focused on providing the most capital efficient, lowest emissions natural gas fueled technologies that maximize our returns while lowering the total delivered cost to our customers. Our displacement of diesel with natural gas is now at the highest level in Company history from the deployment of our natural gas fueled digiFleets and record gas substitution with our dual fuel equipment. Over the past year, we have increased dual fuel gas substitution levels by over 25%. We further enhanced our LPI portfolio with the commissioning of our operations in the DJ Basin, including compression capacity and logistics assets, and generated our first CNG sales in June serving Liberty fleets and customer drilling rigs,\u201d continued Mr. Wright. \u201cThe advanced Sentinel logistics platform drove significant operational efficiencies by harnessing real-time data and AI predictive analytics to precisely forecast proppant demand and optimize logistics. Since inception, utilizing the power of Sentinel, Liberty has reduced our already very low proppant delivery downtime by 90% and decreased the truck count and delivery time by approximately 35% each, lowering the cost for our customers to bring a barrel of oil to the market.\u201d<\/p>\n \u201cWe have built a differential competitive position and are broadening our advantage with strategic investment in the complete value chain of next generation fleet technologies. LPI\u2019s power generation technology and fueling capabilities enhance our frac business and provide unique expansion opportunities. Our strong investment returns are supported by rising demand for cost effective, reliable, low emission, power dense solutions, with applications both within and outside the oilfield. We are positioned to drive higher earnings in the years ahead, while continuing to return capital to shareholders. Since the reinstatement of our capital returns program, we have now distributed\u00a0$458 million\u00a0to shareholders through the retirement of 13.2% of shares outstanding and quarterly cash dividends,\u201d continued Mr. Wright.<\/p>\n Outlook<\/b><\/p>\n Global oil and gas markets remain constructive on favorable multi-year market fundamentals, despite near term volatility in commodity prices. In June, a surprise decision from OPEC+ to gradually unwind voluntary production cuts beginning in October drove oil prices lower. Even then, prices were well above those supportive of attractive E&P returns and have since recovered on relatively balanced supply and demand dynamics owing to resilient global economic growth and rising demand for transportation fuels with the summer travel season underway.<\/p>\n Natural gas prices saw a resurgence from early spring lows as gas producers reduced drilling and completions activity and curtailed production. Recent reinstatement of some curtailed production has moved prices downward but still above recent cycle lows. The commissioning of new LNG export facilities and continued growth in power demand are expected to drive higher natural gas demand, and eventually firmer natural gas prices.<\/p>\n Frac industry trends have moderated marginally in recent periods, on the heels of slightly softer drilling activity in both oil and gas basins during the first half of 2024. Industry-wide completions activity has declined to levels consistent with approximately flat oil and gas production. For the\u00a0U.S.\u00a0to deliver rising oil and gas production levels, completions activity would need to rise. Signs of tightness for quality frac crews may emerge in 2025 on a demand pull for energy. The attrition of older equipment from higher intensity fracs with increased horsepower requirements is reducing the available horsepower to meet frac fleet demand.<\/p>\n As E&P operators continue to consolidate, their efforts are focused on efficiency gains through partnership with service companies that can deliver superior performance and provide technical solutions to create value. Liberty\u2019s supply chain has continued to rapidly innovate and drive efficiencies in procurement, construction, and delivery of essential materials for frac operations. The resulting efficiencies benefit both our customers and our business. Liberty\u2019s digiTechnologies, LPI services, top-notch supply chain, scale and integrated services enable us to drive improvements across the board for our customers and grow our industry competitive advantage.<\/p>\n \u201cAs we continue to execute on our returns-focused value proposition, we are well-positioned to deliver strong financial and operational performance. Our strategic investments deepen our portfolio of natural gas fueled pumping and power generation technologies, driving higher earnings and cash flow generation potential,\u201d commented Chris Wright.<\/p>\n \u201cIndustry conditions moderated through the first half of the year. We now anticipate total North American completions activity will be modestly softer in the second half of the year due to budget front-loading by some operators. However, we expect Liberty\u2019s financial performance to be similar in the second half of the year compared to the first half,\u201d continued Mr. Wright. \u201cWe expect to continue investing in our competitively advantaged portfolio, deliver healthy free cash flow and return capital to our shareholders. We are committed to safely and responsibly creating long-term value for our partners and shareholders.\u201d<\/p>\n Share Repurchase Program<\/b><\/p>\n During the quarter ended June 30, 2024, Liberty repurchased and retired 1,319,885 shares of Class A common stock at an average of\u00a0$22.39\u00a0per share, representing 0.8% of shares outstanding, for approximately\u00a0$30 million. Liberty has cumulatively repurchased and retired 13.2% of shares outstanding at program commencement on July 25, 2022. Total remaining authorization for future common share repurchases is approximately\u00a0$362 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 Cash Dividend<\/b><\/p>\n During the quarter ended June 30, 2024, the Company paid a quarterly cash dividend of\u00a0$0.07\u00a0per share of Class A common stock, or approximately\u00a0$12 million\u00a0in aggregate to shareholders.<\/p>\n On July 16, 2024, the Board declared a cash dividend of\u00a0$0.07\u00a0per share of Class A common stock, to be paid on September 20, 2024 to holders of record as of September 6, 2024.<\/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 2024, revenue was\u00a0$1.2 billion, a decrease of 3% from\u00a0$1.2 billion\u00a0in the second quarter of 2023 and an increase of 8% from\u00a0$1.1 billion\u00a0in the first quarter of 2024.<\/p>\n Net income (after taxes) totaled\u00a0$108 million\u00a0for the second quarter of 2024 compared to\u00a0$153 million\u00a0in the second quarter of 2023 and\u00a0$82 million\u00a0in the first quarter of 2024.<\/p>\n Adjusted Net Income3<\/sup>\u00a0(after taxes) totaled\u00a0$103 million\u00a0for the second quarter of 2024 compared to\u00a0$153 million\u00a0in the second quarter of 2023 and\u00a0$82 million\u00a0in the first quarter of 2024.<\/p>\n Adjusted EBITDA1\u00a0<\/sup>of\u00a0$273 million\u00a0for the second quarter of 2024 decreased 12% from\u00a0$311 million\u00a0in the second quarter of 2023 and increased 12% from\u00a0$245 million\u00a0in the first quarter of 2024.<\/p>\n Fully diluted earnings per share of\u00a0$0.64\u00a0for the second quarter of 2024 compared to\u00a0$0.87\u00a0for the second quarter of 2023 and\u00a0$0.48\u00a0for the first quarter of 2024.<\/p>\n Adjusted Net Income per Diluted Share3<\/sup>\u00a0of\u00a0$0.61\u00a0for the second quarter of 2024 compared to\u00a0$0.87\u00a0for the second quarter of 2023 and\u00a0$0.48\u00a0for the first quarter of 2024.<\/p>\n Please refer to the tables at the end of this earnings release for a reconciliation of Adjusted EBITDA, Adjusted Net Income, and Adjusted Net Income per Diluted Share (each, a non-GAAP financial measure) to the most directly comparable GAAP financial measures.<\/p>\n Balance Sheet and Liquidity<\/b><\/p>\n As of June 30, 2024, Liberty had cash on hand of\u00a0$30 million, an increase from first quarter levels, and total debt of\u00a0$147 million, drawn on the secured asset-based revolving credit facility. Total liquidity, including availability under the credit facility, was\u00a0$271 million\u00a0as of June 30, 2024.<\/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 18, 2024. 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 3223898. The replay will be available until July 25, 2024.<\/p>\n About Liberty<\/b><\/p>\n\n