Solaris Oilfield Infrastructure Announces Second Quarter 2023 Results
Second Quarter 2023 Summary Results and Highlights
- Net income of $12.2 million, or $0.24 per diluted Class A share, for the quarter ended June 30, 2023; Adjusted pro forma net income of $11.3 million, or $0.25 per fully diluted share, for the quarter ended June 30, 2023
- Adjusted EBITDA of $26.8 million for the quarter ended June 30, 2023, reflecting a 7% sequential and 27% year-over-year increase
- Grew total contribution margin per frac crew followed by 26% sequentially, driven by increased deployments of Solaris’ new top fill technology and AutoBlend™ units across multiple basins
- Paid a regular quarterly dividend of $0.11 per share on June 16, 2023, which represented Solaris’ 19th consecutive quarterly dividend
- Repurchased 1.4 million Class A common stock shares (3.0% of total outstanding shares) during the quarter; approximately $24 million remains available under the $50 million share repurchase authorization announced in the first quarter of 2023
- $148 million cumulatively returned to shareholders through dividends and share buybacks since 2018
HOUSTON–(BUSINESS WIRE)–Solaris Oilfield Infrastructure, Inc. (NYSE:SOI) (“Solaris” or the “Company”), today announced second quarter 2023 results, with revenues of $77.2 million, net income of $12.2 million, adjusted pro forma net income of $11.3 million, or $0.25 per fully diluted share and Adjusted EBITDA of $26.8 million.
“Our strong second quarter results are a testament to the Solaris team’s continued execution on our strategy of growing earnings per frac crew followed. We grew profitability by deploying more top fill and AutoBlend™ systems and improving ancillary trucking services margin despite the softening in drilling and completion activity,” Solaris’ Chairman and Chief Executive Officer Bill Zartler commented.
“Since we began returning cash to shareholders in 2018, we have cumulatively returned $148 million through dividends and share repurchases. We expect to generate meaningful cash flow as our budgeted growth capital spending slows, allowing us to continue executing on our enhanced shareholder return framework.”
Second Quarter 2023 Financial Review
Solaris reported net income of $12.2 million, or $0.24 per diluted Class A share, for second quarter 2023, compared to first quarter 2023 net income of $11.9 million, or $0.23 per diluted Class A share, and second quarter 2022 net income of $8.3 million, or $0.16 per diluted Class A share. Adjusted pro forma net income for second quarter 2023 was $11.3 million, or $0.25 per fully diluted share, compared to first quarter 2023 adjusted pro forma net income of $11.0 million, or $0.24 per fully diluted share, and second quarter 2022 adjusted pro forma net income of $9.4 million, or $0.20 per fully diluted share.
Revenues were $77.2 million for second quarter 2023, which were down 7% sequentially and down 11% year over year. Adjusted EBITDA for second quarter 2023 was $26.8 million, which was up 7% from first quarter 2023 and up 27% from second quarter 2022. The sequential decrease in revenue was driven by decreases in industry frac activity and ancillary trucking services revenues, which was offset by additional top fill and AutoBlend™ systems. The sequential increase in Adjusted EBITDA was driven by increases in new technology deployments and ancillary trucking services margin.
During the second quarter of 2023, Solaris earned revenue on 108 fully utilized systems, which includes sand systems, top fill systems and AutoBlend™ systems. Total fully utilized systems were down 8% sequentially from 118 in the first quarter of 2023.
Capital Expenditures, Free Cash Flow and Liquidity
Capital expenditures in the second quarter 2023 were approximately $21 million, which is primarily related to manufacturing of top fill systems. Solaris is maintaining its capital expenditure guidance for full year 2023 of $65 million to $75 million, which includes $15 million for maintenance capital. The Company expects capital expenditures in the third quarter of 2023 to be approximately $15 million, including maintenance capital expenditures.
Free cash flow (defined as net cash provided by operating activities less investment in property, plant and equipment) during second quarter 2023 was positive $7 million, including a working capital source of $3 million and capital expenditures of $21 million. Distributable cash flow (defined as Adjusted EBITDA less maintenance capital expenditures) was approximately $22 million for the second quarter 2023, which was approximately flat sequentially and up 10% year over year, and covered quarterly dividend distributions of approximately $5 million by approximately four times.
As of June 30, 2023, the Company had approximately $9 million of cash on the balance sheet. The Company had $43 million in borrowings outstanding on the credit facility and $41 million of liquidity as of the end of second quarter 2023.
Shareholder Returns
On May 16, 2023, the Company’s Board of Directors approved a cash dividend to $0.11 per share of Class A common stock, which was paid on June 16, 2023 to holders of record as of June 6, 2023. A distribution of $0.11 per unit was also approved for holders of units in Solaris Oilfield Infrastructure, LLC (“Solaris LLC”).
During the second quarter of 2023, the Company repurchased 1.4 million Class A common stock shares, or 3.0% of the Company’s total outstanding shares, for approximately $11 million, leaving approximately $24 million in the Company’s stock repurchase authorization. Since initiating the repurchase authorization in the first quarter of 2023, Solaris has repurchased a total of 3.1 million Class A common shares, or 6.5% of the Company’s total outstanding shares.
Since initiating the dividend in December 2018, the Company has paid 19 consecutive quarterly dividends and repurchased approximately 12% of total outstanding shares, representing approximately $148 million in cash cumulatively returned to shareholders through dividends and share repurchases since December 2018.
Conference Call
The Company will host a conference call to discuss its second quarter 2023 results on Friday, July 28, 2023 at 8:00 a.m. Central Time (9:00 a.m. Eastern Time). To join the conference call from within the United States, participants may dial (844) 413-3978. To join the conference call from outside of the United States, participants may dial (412) 317-6594. When instructed, please ask the operator to be joined to the Solaris Oilfield Infrastructure, Inc. call. Participants are encouraged to log in to the webcast or dial in to the conference call approximately ten minutes prior to the start time. To listen via live webcast, please visit the Investor Relations section of the Company’s website at http://www.solarisoilfield.com.
An audio replay of the conference call will be available shortly after the conclusion of the call and will remain available for approximately seven days. It can be accessed by dialing (877) 344-7529 within the United States or (412) 317-0088 outside of the United States. The conference call replay access code is 6293931. The replay will also be available in the Investor Relations section of the Company’s website shortly after the conclusion of the call and will remain available for approximately seven days.
About Non-GAAP Measures
In addition to financial results determined in accordance with generally accepted accounting principles in the United States (“GAAP”), this news release presents non-GAAP financial measures. Management believes that adjusted net income, adjusted diluted earnings per share and Adjusted EBITDA, provide useful information to investors regarding the Company’s financial condition and results of operations because they reflect the core operating results of our businesses and help facilitate comparisons of operating performance across periods. Although management believes the aforementioned non-GAAP financial measures are good tools for internal use and the investment community in evaluating Solaris’ overall financial performance, the foregoing non-GAAP financial measures should be considered in addition to, not as a substitute for or superior to, other measures of financial performance prepared in accordance with GAAP. A reconciliation of these non-GAAP measures to the most directly comparable GAAP measures is included in the accompanying financial tables.
About Solaris Oilfield Infrastructure, Inc.
Solaris Oilfield Infrastructure, Inc. (NYSE:SOI) provides mobile equipment that drives supply chain and execution efficiencies in the completion of oil and natural gas wells. Solaris’ patented equipment and systems are deployed across oil and natural gas basins in the United States. Additional information is available on our website, www.solarisoilfield.com.
Website Disclosure
We use our website (www.solarisoilfield.com) as a routine channel of distribution of company information, including news releases, analyst presentations, and supplemental financial information, as a means of disclosing material non-public information and for complying with our disclosure obligations under the U.S. Securities and Exchange Commission’s (the “SEC”) Regulation FD. Accordingly, investors should monitor our website in addition to following press releases, SEC filings and public conference calls and webcasts. Additionally, we provide notifications of news or announcements on our investor relations website. Investors and others can receive notifications of new information posted on our investor relations website in real time by signing up for email alerts.
None of the information provided on our website, in our press releases, public conference calls and webcasts, or through social media channels is incorporated by reference into, or deemed to be a part of, this press release or will be incorporated by reference into any report or document we file with the SEC unless we expressly incorporate any such information by reference, and any references to our website are intended to be inactive textual references only.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Examples of forward-looking statements include, but are not limited to, our business strategy, our industry, our future profitability, the various risks and uncertainties associated with the extraordinary market environment and impacts resulting from the volatility in global oil markets and the COVID-19 pandemic, expected capital expenditures and the impact of such expenditures on performance, management changes, current and potential future long-term contracts and our future business and financial performance. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. As a result, our actual results may differ materially from those contemplated by the forward-looking statements. Factors that could cause our actual results to differ materially from the results contemplated by such forward-looking statements include, but are not limited to the factors discussed or referenced in our filings made from time to time with the SEC. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
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SOLARIS OILFIELD INFRASTRUCTURE, INC AND SUBSIDIARIES |
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CONSOLIDATED STATEMENTS OF OPERATIONS |
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(In thousands, except per share data) |
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(Unaudited) |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
Three Months Ended |
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Six Months Ended |
||||||||||||||||
|
|
|
June 30, |
|
March 31, |
|
June 30, |
||||||||||||||
|
|
|
2023 |
|
2022 |
|
2023 |
|
2023 |
|
2022 |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Revenue |
|
|
69,925 |
|
|
|
81,130 |
|
|
|
77,828 |
|
|
|
147,753 |
|
|
|
132,966 |
|
|
Revenue – related parties |
|
|
7,277 |
|
|
|
5,581 |
|
|
|
4,894 |
|
|
|
12,171 |
|
|
|
10,660 |
|
|
Total revenue |
|
|
77,202 |
|
|
|
86,711 |
|
|
|
82,722 |
|
|
|
159,924 |
|
|
|
143,626 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Cost of services (excluding depreciation and amortization) |
|
|
45,652 |
|
|
|
61,237 |
|
|
|
53,223 |
|
|
|
98,875 |
|
|
|
98,908 |
|
|
Depreciation and amortization |
|
|
9,071 |
|
|
|
7,132 |
|
|
|
8,417 |
|
|
|
17,488 |
|
|
|
14,061 |
|
|
Property tax contingency (1) |
|
|
— |
|
|
|
3,072 |
|
|
|
— |
|
|
|
— |
|
|
|
3,072 |
|
|
Selling, general and administrative |
|
|
6,825 |
|
|
|
6,062 |
|
|
|
6,538 |
|
|
|
13,363 |
|
|
|
11,273 |
|
|
Other operating income (2) |
|
|
(125 |
) |
|
|
(1,114 |
) |
|
|
(338 |
) |
|
|
(463 |
) |
|
|
(1,423 |
) |
|
Total operating costs and expenses |
|
|
61,423 |
|
|
|
76,389 |
|
|
|
67,840 |
|
|
|
129,263 |
|
|
|
125,891 |
|
|
Operating income |
|
|
15,779 |
|
|
|
10,322 |
|
|
|
14,882 |
|
|
|
30,661 |
|
|
|
17,735 |
|
|
Interest expense, net |
|
|
(879 |
) |
|
|
(88 |
) |
|
|
(459 |
) |
|
|
(1,338 |
) |
|
|
(167 |
) |
|
Total other expense |
|
|
(879 |
) |
|
|
(88 |
) |
|
|
(459 |
) |
|
|
(1,338 |
) |
|
|
(167 |
) |
|
Income before income tax expense |
|
|
14,900 |
|
|
|
10,234 |
|
|
|
14,423 |
|
|
|
29,323 |
|
|
|
17,568 |
|
|
Provision for income taxes |
|
|
2,659 |
|
|
|
1,945 |
|
|
|
2,486 |
|
|
|
5,145 |
|
|
|
3,557 |
|
|
Net income |
|
|
12,241 |
|
|
|
8,289 |
|
|
|
11,937 |
|
|
|
24,178 |
|
|
|
14,011 |
|
|
Less: net income related to non-controlling interests |
|
|
(4,709 |
) |
|
|
(2,836 |
) |
|
|
(4,368 |
) |
|
|
(9,077 |
) |
|
|
(5,056 |
) |
|
Net income attributable to Solaris |
|
$ |
7,532 |
|
|
$ |
5,453 |
|
|
$ |
7,569 |
|
|
$ |
15,101 |
|
|
$ |
8,955 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Earnings per share of Class A common stock – basic |
|
$ |
0.24 |
|
|
$ |
0.16 |
|
|
$ |
0.23 |
|
|
$ |
0.47 |
|
|
$ |
0.27 |
|
|
Earnings per share of Class A common stock – diluted |
|
$ |
0.24 |
|
|
$ |
0.16 |
|
|
$ |
0.23 |
|
|
$ |
0.47 |
|
|
$ |
0.27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Basic weighted average shares of Class A common stock outstanding |
|
|
29,542 |
|
|
|
31,432 |
|
|
|
31,214 |
|
|
|
30,373 |
|
|
|
31,337 |
|
|
Diluted weighted average shares of Class A common stock outstanding |
|
|
29,542 |
|
|
|
31,432 |
|
|
|
31,214 |
|
|
|
30,373 |
|
|
|
31,337 |
|
|
1) |
Property tax contingency represents a reserve related to an unfavorable Texas District Court ruling related to prior period property taxes. The ruling is currently under appeal and we anticipate a ruling to be delivered sometime in the second half of 2023. |
|
2) |
Other income includes accrued excise tax on share repurchases, the sale or disposal of assets, insurance gains, credit losses or recoveries, severance costs, and other settlements. |
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SOLARIS OILFIELD INFRASTRUCTURE, INC AND SUBSIDIARIES |
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|
CONSOLIDATED BALANCE SHEETS |
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|
(In thousands, except per share amounts) |
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|
(Unaudited) |
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|
|
|
|
|
|
|
|
|
|
June 30, |
|
December 31, |
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|
|
|
2023 |
|
2022 |
||
|
Assets |
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
9,371 |
|
$ |
8,835 |
|
Accounts receivable, net of allowances for credit losses of $355 and $385, respectively |
|
|
56,103 |
|
|
64,543 |
|
Accounts receivable – related party |
|
|
6,788 |
|
|
4,925 |
|
Prepaid expenses and other current assets |
|
|
5,671 |
|
|
5,151 |
|
Inventories |
|
|
8,520 |
|
|
5,289 |
|
Total current assets |
|
|
86,453 |
|
|
88,743 |
|
Property, plant and equipment, net |
|
|
325,441 |
|
|
298,160 |
|
Non-current inventories |
|
|
2,097 |
|
|
1,569 |
|
Operating lease right-of-use assets |
|
|
4,844 |
|
|
4,033 |
|
Goodwill |
|
|
13,004 |
|
|
13,004 |
|
Intangible assets, net |
|
|
1,066 |
|
|
1,429 |
|
Deferred tax assets |
|
|
51,099 |
|
|
55,370 |
|
Other assets |
|
|
326 |
|
|
268 |
|
Total assets |
|
$ |
484,330 |
|
$ |
462,576 |
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
Accounts payable |
|
$ |
29,209 |
|
$ |
25,934 |
|
Accrued liabilities |
|
|
17,024 |
|
|
25,252 |
|
Current portion of payables related to Tax Receivable Agreement |
|
|
— |
|
|
1,092 |
|
Current portion of operating lease liabilities |
|
|
1,106 |
|
|
917 |
|
Current portion of finance lease liabilities |
|
|
2,373 |
|
|
1,924 |
|
Other current liabilities |
|
|
1,237 |
|
|
790 |
|
Total current liabilities |
|
|
50,949 |
|
|
55,909 |
|
Operating lease liabilities, net of current |
|
|
6,687 |
|
|
6,212 |
|
Borrowings under the credit agreement |
|
|
43,000 |
|
|
8,000 |
|
Finance lease liabilities, net of current |
|
|
3,582 |
|
|
3,429 |
|
Payables related to Tax Receivable Agreement |
|
|
71,530 |
|
|
71,530 |
|
Other long-term liabilities |
|
|
126 |
|
|
367 |
|
Total liabilities |
|
|
175,874 |
|
|
145,447 |
|
Stockholders’ equity: |
|
|
|
|
|
|
|
Preferred stock, $0.01 par value, 50,000 shares authorized, none issued and outstanding |
|
|
— |
|
|
— |
|
Class A common stock, $0.01 par value, 600,000 shares authorized, 28,968 shares issued and outstanding as of June 30, 2023 and 31,641 shares issued and outstanding as of December 31, 2022 |
|
|
290 |
|
|
317 |
|
Class B common stock, $0.00 par value, 180,000 shares authorized, 13,674 shares issued and outstanding as of June 30, 2023 and 13,674 issued and outstanding as of December 31, 2022 |
|
|
— |
|
|
— |
|
Additional paid-in capital |
|
|
186,647 |
|
|
202,551 |
|
Retained earnings |
|
|
15,233 |
|
|
12,847 |
|
Total stockholders’ equity attributable to Solaris and members’ equity |
|
|
202,170 |
|
|
215,715 |
|
Non-controlling interest |
|
|
106,286 |
|
|
101,414 |
|
Total stockholders’ equity |
|
|
308,456 |
|
|
317,129 |
|
Total liabilities and stockholders’ equity |
|
$ |
484,330 |
|
$ |
462,576 |
|
SOLARIS OILFIELD INFRASTRUCTURE, INC AND SUBSIDIARIES |
||||||||||||
|
CONSOLIDATED STATEMENTS OF CASH FLOWS |
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|
(In thousands) |
||||||||||||
|
(Unaudited) |
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|
|
|
|
|
|
|
|
|
|
|
|||
|
|
|
Six Months Ended June 30, |
|
Three Months Ended June 30, |
||||||||
|
|
|
2023 |
|
2022 |
|
2023 |
||||||
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|||
|
Net income |
|
$ |
24,178 |
|
|
$ |
14,011 |
|
|
$ |
12,241 |
|
|
Adjustment to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|||
|
Depreciation and amortization |
|
|
17,488 |
|
|
|
14,061 |
|
|
|
9,071 |
|
|
Property tax contingency |
|
|
— |
|
|
|
3,072 |
|
|
|
— |
|
|
(Gain) loss on disposal of asset |
|
|
(18 |
) |
|
|
(39 |
) |
|
|
4 |
|
|
Stock-based compensation |
|
|
3,904 |
|
|
|
3,112 |
|
|
|
1,924 |
|
|
Amortization of debt issuance costs |
|
|
71 |
|
|
|
98 |
|
|
|
40 |
|
|
Allowance for credit losses |
|
|
(2 |
) |
|
|
(388 |
) |
|
|
(2 |
) |
|
Change in payables related to Tax Receivable Agreement |
|
|
— |
|
|
|
(654 |
) |
|
|
— |
|
|
Deferred income tax expense |
|
|
4,853 |
|
|
|
3,101 |
|
|
|
2,524 |
|
|
Other |
|
|
(162 |
) |
|
|
(178 |
) |
|
|
(172 |
) |
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
|
|||
|
Accounts receivable |
|
|
8,442 |
|
|
|
(33,008 |
) |
|
|
12,023 |
|
|
Accounts receivable – related party |
|
|
(1,863 |
) |
|
|
(338 |
) |
|
|
(2,949 |
) |
|
Prepaid expenses and other assets |
|
|
1,143 |
|
|
|
5,098 |
|
|
|
238 |
|
|
Inventories |
|
|
(5,801 |
) |
|
|
(3,457 |
) |
|
|
(1,730 |
) |
|
Accounts payable |
|
|
3,047 |
|
|
|
7,902 |
|
|
|
1,005 |
|
|
Accrued liabilities |
|
|
(8,728 |
) |
|
|
10,001 |
|
|
|
(5,606 |
) |
|
Payments pursuant to tax receivable agreement |
|
|
(1,092 |
) |
|
|
— |
|
|
|
— |
|
|
Net cash provided by operating activities |
|
|
45,460 |
|
|
|
22,394 |
|
|
|
28,611 |
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|||
|
Investment in property, plant and equipment |
|
|
(40,130 |
) |
|
|
(32,326 |
) |
|
|
(21,181 |
) |
|
Cash received from insurance proceeds |
|
|
69 |
|
|
|
860 |
|
|
|
69 |
|
|
Proceeds from disposal of assets |
|
|
165 |
|
|
|
57 |
|
|
|
42 |
|
|
Net cash used in investing activities |
|
|
(39,896 |
) |
|
|
(31,409 |
) |
|
|
(21,070 |
) |
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|||
|
Share repurchases |
|
|
(25,757 |
) |
|
|
— |
|
|
|
(11,330 |
) |
|
Distribution to unitholders (includes distribution of $3.0 million at $0.11/unit and $2.9 million at $0.105/unit, respectively) |
|
|
(3,489 |
) |
|
|
(2,892 |
) |
|
|
(1,504 |
) |
|
Dividend paid to Class A common stock shareholders |
|
|
(7,044 |
) |
|
|
(6,885 |
) |
|
|
(3,388 |
) |
|
Borrowings under the credit agreement |
|
|
35,000 |
|
|
|
— |
|
|
|
17,000 |
|
|
Payments under finance leases |
|
|
(1,326 |
) |
|
|
(567 |
) |
|
|
(588 |
) |
|
Payments under insurance premium financing |
|
|
(966 |
) |
|
|
(422 |
) |
|
|
(425 |
) |
|
Payments related to debt issuance costs |
|
|
(91 |
) |
|
|
(358 |
) |
|
|
(91 |
) |
|
Payments for shares withheld for taxes from RSU vesting and cancelled |
|
|
(1,355 |
) |
|
|
(1,007 |
) |
|
|
(19 |
) |
|
Net cash used in financing activities |
|
|
(5,028 |
) |
|
|
(12,131 |
) |
|
|
(345 |
) |
|
Net increase in cash and cash equivalents |
|
|
536 |
|
|
|
(21,146 |
) |
|
|
7,196 |
|
|
Cash and cash equivalents at beginning of period |
|
|
8,835 |
|
|
|
36,497 |
|
|
|
2,175 |
|
|
Cash and cash equivalents at end of period |
|
$ |
9,371 |
|
|
$ |
15,351 |
|
|
$ |
9,371 |
|
|
Non-cash activities |
|
|
|
|
|
|
|
|
|
|||
|
Investing: |
|
|
|
|
|
|
|
|
|
|||
|
Capitalized depreciation in property, plant and equipment |
|
|
202 |
|
|
|
289 |
|
|
|
73 |
|
|
Capitalized stock based compensation |
|
|
296 |
|
|
|
207 |
|
|
|
122 |
|
|
Property and equipment additions incurred but not paid at period-end |
|
|
3,402 |
|
|
|
6,490 |
|
|
|
3,402 |
|
|
Property, plant and equipment additions transferred from inventory |
|
|
2,042 |
|
|
|
1,058 |
|
|
|
464 |
|
|
Additions to fixed assets through finance leases |
|
|
1,926 |
|
|
|
2,267 |
|
|
|
993 |
|
|
Financing: |
|
|
|
|
|
|
|
|
|
|||
|
Insurance premium financing |
|
|
697 |
|
|
|
1,331 |
|
|
|
697 |
|
|
Cash paid for: |
|
|
|
|
|
|
|
|
|
|||
|
Interest |
|
|
1,028 |
|
|
|
37 |
|
|
|
693 |
|
|
Income taxes |
|
|
198 |
|
|
|
370 |
|
|
|
197 |
|
|
SOLARIS OILFIELD INFRASTRUCTURE, INC AND SUBSIDIARIES |
|||||||||||||||
|
RECONCILIATION AND CALCULATION OF NON-GAAP FINANCIAL AND OPERATIONAL MEASURES |
|||||||||||||||
|
(In thousands) |
|||||||||||||||
|
(Unaudited) |
|||||||||||||||
|
EBITDA AND ADJUSTED EBITDA |
|||||||||||||||
|
We view EBITDA and Adjusted EBITDA as important indicators of performance. We define EBITDA as net income, plus (i) depreciation and amortization expense, (ii) interest expense and (iii) income tax expense, including franchise taxes. We define Adjusted EBITDA as EBITDA plus (i) stock-based compensation expense and (ii) certain non-cash items and extraordinary, unusual or non-recurring gains, losses or expenses. |
|||||||||||||||
|
We believe that our presentation of EBITDA and Adjusted EBITDA provides useful information to investors in assessing our financial condition and results of operations. Net income is the GAAP measure most directly comparable to EBITDA and Adjusted EBITDA. EBITDA and Adjusted EBITDA should not be considered alternatives to net income presented in accordance with GAAP. Because EBITDA and Adjusted EBITDA may be defined differently by other companies in our industry, our definitions of EBITDA and Adjusted EBITDA may not be comparable to similarly titled measures of other companies, thereby diminishing their utility. The following table presents a reconciliation of net income to EBITDA and Adjusted EBITDA for each of the periods indicated. |
|
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||
|
|
|
June 30, |
|
March 31, |
|
June 30, |
||||||||||||||
|
|
|
2023 |
|
2022 |
|
2023 |
|
2023 |
|
2022 |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Net income |
|
$ |
12,241 |
|
|
$ |
8,289 |
|
|
$ |
11,937 |
|
|
$ |
24,178 |
|
|
$ |
14,011 |
|
|
Depreciation and amortization |
|
|
9,071 |
|
|
|
7,132 |
|
|
|
8,417 |
|
|
|
17,488 |
|
|
|
14,061 |
|
|
Interest expense, net |
|
|
879 |
|
|
|
88 |
|
|
|
459 |
|
|
|
1,338 |
|
|
|
167 |
|
|
Income taxes (1) |
|
|
2,659 |
|
|
|
1,945 |
|
|
|
2,486 |
|
|
|
5,145 |
|
|
|
3,557 |
|
|
EBITDA |
|
$ |
24,850 |
|
|
$ |
17,454 |
|
|
$ |
23,299 |
|
|
$ |
48,149 |
|
|
$ |
31,796 |
|
|
Property tax contingency (2) |
|
|
— |
|
|
|
3,072 |
|
|
|
— |
|
|
|
— |
|
|
|
3,072 |
|
|
Stock-based compensation expense (3) |
|
|
1,924 |
|
|
|
1,519 |
|
|
|
1,980 |
|
|
|
3,904 |
|
|
|
3,112 |
|
|
(Gain) loss on disposal of assets |
|
|
4 |
|
|
|
— |
|
|
|
(361 |
) |
|
|
(357 |
) |
|
|
— |
|
|
Change in payables related to Tax Receivable Agreement (4) |
|
|
— |
|
|
|
(654 |
) |
|
|
— |
|
|
|
— |
|
|
|
(654 |
) |
|
Other (5) |
|
|
47 |
|
|
|
(327 |
) |
|
|
200 |
|
|
|
247 |
|
|
|
(522 |
) |
|
Adjusted EBITDA |
|
$ |
26,825 |
|
$ |
21,064 |
|
|
$ |
25,118 |
|
|
$ |
51,943 |
|
|
$ |
36,804 |
|
|
|
1) |
Federal and state income taxes. |
|
2) |
Property tax contingency represents a reserve related to an unfavorable Texas District Court ruling related to prior period property taxes. The ruling is currently under appeal and we anticipate a ruling to be delivered sometime in the second half of 2023. |
|
3) |
Represents stock-based compensation expense related to restricted stock awards, including performance-based restricted stock. |
|
4) |
Reduction in liability due to state tax rate change. |
|
5) |
Other includes accrued excise tax on share repurchases, gains on insurance claims, credit losses or recoveries and other settlements. |
ADJUSTED PRO FORMA NET INCOME AND ADJUSTED PRO FORMA EARNINGS PER FULLY DILUTED SHARE
Adjusted pro forma net income represents net income attributable to Solaris assuming the full exchange of all outstanding membership interests in Solaris LLC not held by Solaris Oilfield Infrastructure, Inc. for shares of Class A common stock, adjusted for certain non-recurring items that the Company doesn’t believe directly reflect its core operations and may not be indicative of ongoing business operations.
Contacts
Yvonne Fletcher
Senior Vice President, Finance and Investor Relations
(281) 501-3070
