Houston-based Cactus, Inc. has announced a 30% cut in its employee workforce as of the first of April and a 50% cut in its remaining 2020 capital expenditures, explaining the move was in response to the weakened energy economy. The company also said it cut the CEO’s base salary by 50% while other executives experienced reductions of 25% to 50%.
Board members took a 25% reduction in pay. The company said it expected the salary reductions and the layoffs will save the firm about $35 million a year.
In light of the recent macroeconomic events, Cactus has also withdrawn its full year net capital expenditure guidance for 2020. Net capital expenditures are now expected to be in the range of $20 million to $30 million in 2020, representing a reduction of more than 50% from 2019’s level. A majority of this spend will be allocated to the first half of the year.
The Company’s cash balance rose to approximately $230 million as of March 31st, and its $75 million revolver remains fully available. Going forward, Cactus will continue to respond quickly to deteriorating conditions while protecting its reputation for operational excellence.
Cactus designs, manufactures, sells and rents a range of highly engineered wellhead and pressure control equipment. Cactus operates service centers in the United States, which are strategically located in the key oil and gas producing regions, including the Permian, SCOOP/STACK, Marcellus, Utica, Eagle Ford and Bakken, among other areas, and in Eastern Australia.
Source: Business Wire