First Quarter 2017 Highlights
- Record net income of $4.8 million,
Adjusted EBITDA of $6.1 million and revenue of $10.3 million
- Record 2,627 revenue days; 138%
increase year-over-year and up 23% versus fourth quarter 2016
- Added five proppant management systems
to the rental fleet; total of 35 systems at quarter-end
Solaris Oilfield Infrastructure, Inc. (NYSE:SOI)
(“Solaris” or the “Company”), a leading manufacturer and provider
of patented mobile proppant management systems for oil and natural
gas well sites, today reported financial results for the first
quarter 2017, as further described in the Company’s Quarterly
Report on Form 10-Q for the quarter ended March 31, 2017,
filed with the Securities and Exchange Commission (the “SEC”)
earlier today.
Financial Review
Solaris’ first quarter 2017 financial results were at the top of
the range of the preliminary estimate provided in the Company’s
final prospectus dated May 11, 2017, filed with the SEC on
May 15, 2017.
Net income increased to $4.8 million for first quarter
2017, from a net loss of $(0.1) million in first quarter 2016
and net income of $3.0 million in fourth quarter 2016.
Adjusted EBITDA was $6.1 million for the quarter,
up $5.3 million from first quarter 2016 and an increase
of $2.0 million compared to fourth quarter 2016. A description of
Adjusted EBITDA and a reconciliation to net income, its most
directly comparable GAAP measure, is provided below.
Revenues were $10.3 million for the quarter, an increase of $7.2
million, or 228%, compared to first quarter 2016, and an increase
of $3.0 million, or 42%, compared to fourth quarter 2016. Customer
demand for our systems has risen due to increased well completion
activity and more proppant being used, on average, per well.
During first quarter 2017, the Company generated 2,627 revenue
days, the combined number of days that its systems earned revenues
during the quarter, a 138% increase from first quarter 2016, and up
23% compared to fourth quarter 2016.
Capital Expenditures
Driven by strong customer demand, the Company invested $7.6
million in capital equipment during first quarter 2017 to
construct additional proppant systems and develop enhancements to
its systems’ capabilities. These investments help address rising
customer demand and are expected to drive future earnings and cash
flow growth for Solaris.
Solaris’ Chief Executive Officer Greg Lanham commented,
“Our strong start to 2017 was driven by continued demand from our
premier customer base that resulted in a record 2,627 revenue days
during the quarter. Our systems’ demonstrated value and our team’s
execution strength has led to the continued adoption of our
technology. We are manufacturing additional systems to help our
customers drive last mile logistics efficiencies, enhance well site
proppant management, deliver critical supply chain information and
improve overall economics.”
Initial Public Offering and Liquidity
On May 17, 2017, Solaris successfully closed its initial
public offering (“IPO”) of 10.1 million shares of Class A
common stock at a public offering price of $12.00 per share.
Solaris raised $113.9 million in proceeds, net of underwriting
discounts and commissions, from the IPO and used a portion of the
proceeds to repay all outstanding indebtedness under the Company’s
credit facility. To further increase liquidity and financial
flexibility, the Company amended its credit agreement, increasing
the size of its undrawn revolving facility to $20.0 million.
These actions during second quarter 2017 have enhanced the
Company’s financial position since the end of the first quarter. As
of March 31, 2017, the Company had $1.8
million in cash, total availability under its credit facility
of $8.5 million and $2.9 million of funded debt, of
which $2.5 million was indebtedness under the credit
facility.
Operational Outlook
Solaris currently has 41 systems in its rental fleet, all of
which are deployed with customers. The Company expects to deliver
four systems to the rental fleet in June and end the second quarter
with 44 systems in the fleet.
Presentation
This press release presents historical results, for the periods
presented, of Solaris Oilfield Infrastructure, LLC, the predecessor
of Solaris Oilfield Infrastructure, Inc. for financial
reporting purposes. The financial results of Solaris have not been
included in this press release as it is a newly incorporated entity
and had not engaged in any business or other activities during the
periods presented. Accordingly, these historical results do not
purport to reflect what the results of operations of Solaris would
have been had the IPO and related transactions occurred prior to
such periods. For example, these historical results do not reflect
the attribution of net income to non-controlling interests or the
provision for corporate income taxes on the income attributable to
Solaris that Solaris expects to recognize in future periods.
Conference Call
The Company will host a conference call to discuss its first
quarter 2017 results on Tuesday, June 13,
2017 at 7 a.m. Central
Time (8 a.m. Eastern Time). To join the conference
call from within the United States, participants may dial
(866) 807-9684. To join the conference call from outside
of the United States, participants may dial (412) 317-5415.
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, 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 10108769. 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 Solaris Oilfield Infrastructure, Inc.
Solaris Oilfield Infrastructure, Inc. manufactures and
provides patented mobile proppant management systems that unload,
store and deliver proppant at oil and natural gas well sites. These
patented systems are deployed in many of the most active oil and
natural gas basins in the United States, including the Permian
Basin, the Eagle Ford Shale and the SCOOP/STACK formation. The
Company’s common stock is traded on the New York Stock Exchange
under the symbol “SOI.” Additional information is available on the
Company’s website, www.solarisoilfield.com.
Forward Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Examples
of forward-looking statements include, but are not limited to,
statements we make regarding the outlook for 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.
SOLARIS OILFIELD INFRASTRUCTURE, LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands) (Unaudited)
Three Months Ended March
31, 2017 2016 Revenue
Proppant system rental $ 8,401 $ 2,504 Proppant system services
1,923 640 Total revenue 10,324 3,144
Operating costs and
expenses
Cost of proppant system rental (excluding
$1,029 and $760 of depreciation and
amortization for the
three months ended March 31, 2017 and 2016,
respectively, shown
separately)
350 337
Cost of proppant system services
(excluding $63 and $34 of depreciation and
amortization for the
three months ended March 31, 2017 and 2016,
respectively, shown
separately)
2,074 765 Depreciation and amortization 1,164 869 Salaries,
benefits and payroll taxes 1,008 747
Selling, general and administrative
(excluding $72 and $75 of depreciation and
amortization for the
three months ended March 31, 2017 and 2016,
respectively, shown
separately)
877 552 Total operating cost and expenses 5,473 3,270 Operating
income (loss) 4,851 (126 ) Interest expense (22 ) (8 ) Other income
(expense) (25 ) 12 Total other income (expense) (47 ) 4 Income
(loss) before income tax expense 4,804 (122 ) Income tax expense 22
5 Net income (loss) $ 4,782 $ (127 )
SOLARIS
OILFIELD INFRASTRUCTURE, LLC AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (In
thousands) (Unaudited)
March 31,
December 31, 2017 2016 Assets Current
assets: Cash $ 1,778 $ 3,568 Accounts receivable, net 5,521 4,510
Prepaid expenses and other current assets 2,913 403 Inventories
1,816 1,365 Total current assets 12,028 9,846 Property, plant and
equipment, net 60,957 54,350 Goodwill 13,004 13,004 Intangible
assets, net 42 36 Other assets 1,057 — Total assets $ 87,088 $
77,236
Liabilities and Members’ Equity Current liabilities:
Accounts payable $ 2,163 $ 705 Accrued liabilities 2,551 2,144
Current portion of capital lease obligations 26 26 Current portion
of notes payable 212 169 Current portion of senior secured credit
facility 125 31 Total current liabilities 5,077 3,075 Capital lease
obligations, net of current portion 206 213 Notes payable, net of
current portion 354 282 Senior secured credit facility, net of
current portion 2,239 2,320 Total liabilities 7,876 5,890
Commitments and contingencies (Note 11) Members’ equity Members’
equity 72,351 69,267 Accumulated earnings 6,861 2,079 Total
members’ equity 79,212 71,346 Total liabilities and members’ equity
$ 87,088 $ 77,236
SOLARIS OILFIELD INFRASTRUCTURE,
LLC AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (In thousands)
(Unaudited)
For the Three Months Ended
March 31,
2017 2016 Cash flows from operating
activities: Net income (loss) $ 4,782 $ (127 )
Adjustment to reconcile net income (loss)
to net cash provided by (used in)
operating activities:
Depreciation and amortization 1,164 869 Loss on disposal of asset
25 — Unit-based compensation 32 36 Amortization of debt issuance
costs 12 — Changes in assets and liabilities: Accounts receivable
(1,011 ) (519 ) Prepaid expenses and other assets (3,567 ) 252
Inventories (451 ) 86 Accounts payable 1,458 (463 ) Accrued
liabilities 397 (1,333 ) Net cash provided by (used in) operating
activities 2,841 (1,199 ) Cash flows from investing activities:
Investment in property, plant and equipment (7,618 ) (2,318 )
Proceeds from disposal of asset 8 — Investment in intangible assets
(6 ) — Net cash used in investing activities (7,616 ) (2,318 ) Cash
flows from financing activities: Payments under capital leases (7 )
(6 ) Payments under notes payable (60 ) (15 ) Proceeds from pay
down of promissory note related to membership units 3,052 — Net
cash provided by (used in) financing activities 2,985 (21 ) Net
decrease in cash (1,790 ) (3,538 ) Cash at beginning of period
3,568 6,923 Cash at end of period $ 1,778 $ 3,385 Non-cash
activities Investing: Capitalized depreciation in property, plant
and equipment 156 167 Financing: Notes payable issued for property,
plant and equipment 186 — Accrued interest from notes receivable
issued for membership units 57 70 Cash paid for: Interest 34 8
SOLARIS OILFIELD INFRASTRUCTURE, LLC
AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP
FINANCIAL INFROMATION — ADJUSTED EBITDA
(In thousands)
(Unaudited)
We view EBITDA and Adjusted EBITDA as important indicators of
performance. We define EBITDA as net income (loss), 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) unit-based
compensation expense and (ii) certain non-cash charges and
unusual or non-recurring charges.
We believe that our presentation of EBITDA and Adjusted EBITDA
will provide 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 (loss) to
EBITDA and Adjusted EBITDA for each of the periods indicated.
Three months ended
March 31, 2017
2016 Change (in thousands) Net income (loss) $
4,782 $ (127 ) $ 4,909 Depreciation and amortization 1,164 869 295
Interest expense, net 22 8 14 Income taxes (1) 22 5 17 EBITDA $
5,990 $ 755 $ 5,235 Non-recurring organizational costs (2) 90 — 90
Unit-based compensation expense (3) 32 36 (4 ) Adjusted EBITDA $
6,112 $ 791 $ 5,321
______________
(1) Income taxes include add-back for franchise tax.
(2) Certain non-recurring organizational costs associated with
Solaris’ IPO which are not considered to be offering costs.
(3) Represents non-cash compensation costs related to employee
options.
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version on businesswire.com: http://www.businesswire.com/news/home/20170612006324/en/
Solaris Oilfield Infrastructure, Inc.Kyle S. Ramachandran,
281-501-3070Chief Financial OfficerIR@solarisoilfield.com
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