Cactus, Inc. (NYSE:WHD) Q2 2020 Earnings Conference Call - Final Transcript
Jul 30, 2020 • 10:00 am ET
Good morning, and welcome to Cactus Second Quarter 2020 Earnings Call. My name is Joanna and I will be facilitating the audio portion of today's interactive broadcast. [Operator Instructions] Thank you. At this time, I would like to turn the show over to Mr. John Fitzgerald, Director of Corporate Department and IR. Sir, please go ahead.
Thank you, and good morning, everyone. We appreciate your participation in today's call. The speakers on today's call will be Scott Bender, our Chief Executive Officer; Steve Tadlock, our Chief Financial Officer. Also joining us today are Joel Bender, Senior Vice President and Chief Operating Officer; Steven Bender, Vice President of Operations; and David Isaac, our General Counsel and Vice President of Administration. Yesterday, we issued our earnings release, which is available on our website. Please note that any comments we make on today's call regarding projections or our expectations for future events are forward-looking statements covered by the Private Securities Litigation Reform Act.
Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control. These risks and uncertainties can cause actual results to differ materially from our current expectations. We advise listeners to review our earnings release and the risk factors discussed in our filings with the SEC. Any forward-looking statements we make today are only as of today's date, and we undertake no obligation to publicly update or review any forward-looking statements. In addition, during today's call, we will reference certain non-GAAP financial measures. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in our earnings release.
With that, I will turn the call to Scott.
Thanks, John. Good morning and everyone. Last quarter we were among the first to set realistic expectations for our industry. Since then, oil prices have rapidly recovered to approximately $40 a barrel; completion activity looks to have troughed and we appear to be approaching a bottom in the U.S. rig count that is marginally higher than previously forecasted. Nonetheless we remain committed to further streamlining our existing operations, as we expect activity to remain below the levels needed to support the current industry capacity.
The second quarter was better than expected for Cactus although drilling and completion activity in the U.S. fell by more than half, we demonstrated the variable cost nature of this business through industry-leading margins and significant free cash flow generation. In summary, second quarter revenues were $67 million. Adjusted EBITDA was over $22 million. Adjusted EBITDA margins were approximately 34%. Our cash balance increased by $40 million to $271 million and we paid a quarterly dividend of $0.09 per share.
I'll now turn the call over to Steve Tadlock, our CFO, who will review our financial results. Following his remarks, I'll provide some thoughts on our outlook for the near term before opening the lines for Q&A. So Steve?
Thanks, Scott. In Q2, revenues of $67 million were 57% lower than the prior quarter. Product revenues at $41 million were 53%