Cactus, Inc. Announces Fourth Amendment to Credit Agreement and Provides Updated Investor Guidance
HOUSTON, TX – June 2, 2026: Cactus, Inc. (NYSE: WHD), a leading provider of oil & gas field machinery and equipment, has filed an 8-K disclosing a significant corporate event: the execution of the Fourth Amendment to its Amended and Restated Credit Agreement. The amendment, dated May 29, 2026, involves Cactus Companies, LLC (the borrower), certain subsidiaries (as guarantors), multiple lenders, and JPMorgan Chase Bank, N.A. as administrative agent.
Key Points and Shareholder Considerations
- Material Definitive Agreement: The Fourth Amendment modifies several terms in the existing Credit Agreement, including financial covenants, loan usage, and collateral requirements. This could impact Cactus’s financial flexibility, borrowing costs, and strategic options.
- Delayed Draw Term Loans: The amendment includes specific provisions for the first borrowing of Delayed Draw Term Loans. Notably, requirements for collateral appraisals and documentation related to the acquisition of interests in Baker Hughes Company are detailed. The lenders have confirmed satisfaction with these conditions, which may facilitate further expansion or acquisition activity.
- Minimum Availability Covenant: After the first Delayed Draw Term Loan Funding Date, Cactus must maintain minimum “Availability” of at least \$125 million. This strengthens liquidity and reduces risk for lenders and shareholders, but may restrict aggressive capital deployment.
- Use of Loan Proceeds: Proceeds from the loans and letters of credit are earmarked for refinancing debt, acquisition activities (including the Baker Hughes interests and the FlexSteel business), and general corporate purposes. The amendment prohibits use of proceeds for purposes violating Federal Reserve regulations, ensuring compliance.
- Appraisals and Collateral: The amendment emphasizes ongoing collateral appraisals, particularly for inventory and equipment, with the administrative agent retaining broad discretion to request such appraisals. This is a protective measure for lenders but could affect operational flexibility if asset values decline.
- Ratification of Loan Documents and Security: The amendment reaffirms all existing loan documents and extends liens, confirming that obligations and security interests remain valid and binding.
- Signatories: The amendment is executed by Cactus Companies, LLC and its subsidiaries, with Jay A. Nutt, Executive Vice President and CFO, signing for the borrower and subsidiaries. Major lenders including JPMorgan Chase Bank, Bank OZK, and Bank of America have also executed the amendment.
Investor Presentation Highlights
- Financial Performance: Cactus reported strong EBITDA and Adjusted EBITDA margins, outperforming industry peers. For the year ended December 31, 2025, EBITDA reached \$353.3M, with Adjusted EBITDA margin remaining robust.
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Second Quarter Outlook (Q2 2026):
- Pressure Control Segment (including Cactus International): Revenue is expected to increase low single digits over Q1 2026, with Adjusted EBITDA margin projected at 23%–25%.
- Spoolable Technologies Segment: Revenue is anticipated to grow mid-to-high single digits with a margin of 36%–38%. Order momentum is strong both domestically and internationally.
- Corporate and Other: Expected Adjusted EBITDA loss of approximately \$5 million.
- Cash Flow and Capital Management: Cactus has demonstrated a proven track record of cash flow generation, with significant net capital expenditures supporting ongoing growth and acquisition activities.
- Dividend and Shareholder Returns: The company increased its quarterly dividend by 8% in July 2025, highlighting confidence in future earnings and commitment to shareholder returns.
- ESG and Governance: Cactus released its inaugural Sustainability Report in 2025, underscoring its commitment to environmental, social, and governance practices. The board has removed supermajority voting and declassified itself, improving shareholder rights and transparency.
Potential Price-Sensitive Developments
- Acquisition Activity: The amendment and investor presentation reference the acquisition of interests in Baker Hughes Company and the completed FlexSteel merger. These transactions could drive future growth, synergies, and earnings, potentially affecting share values.
- Financial Covenants and Liquidity: The new minimum liquidity covenant and ongoing collateral review may impact Cactus’s ability to pursue further acquisitions, dividends, or share repurchases. Investors should monitor compliance with these covenants.
- Guidance and Margin Outlook: Management’s updated guidance on revenue and EBITDA margins, along with strong order momentum, may positively influence investor sentiment.
Conclusion
Cactus, Inc. has taken steps to strengthen its balance sheet, enhance liquidity, and reaffirm its commitment to growth and shareholder value through the Fourth Amendment to its Credit Agreement. With robust financial performance, ongoing acquisition activity, and improvements in governance and ESG practices, the company is well-positioned for continued success. However, investors should remain vigilant regarding compliance with financial covenants and the impact of acquisition integration on future results.
Disclaimer: The information in this article is based on filings and investor materials provided by Cactus, Inc. and its affiliates. Forward-looking statements are subject to risks and uncertainties, including market conditions, acquisition integration, and compliance with financial covenants. Investors should consult official SEC filings and their financial advisors before making investment decisions. This article is for informational purposes only and does not constitute investment advice.
