Fourth Quarter 2023 Summary Results and Shareholder Return
Highlights
- Revenue of $63 million
- Net income of $7 million, or $0.14 per diluted Class A share;
Adjusted pro forma net income of $7 million, or $0.15 per fully
diluted share
- Adjusted EBITDA of $21 million
- Generated $24 million of cash flow from operations and $16
million in free cash flow; reduced borrowings outstanding on the
credit facility by $7 million
- Returned a total of $47 million to shareholders in 2023 through
share repurchases and dividends
- Solaris’ fourth quarter 2023 dividend of $0.12 per share, which
was paid on December 11, 2023, was a 9% increase from the prior
quarter and represented Solaris’ third per-share dividend raise
since initiation in 2018
- Approved first quarter 2024 dividend of $0.12 per share on
February 19, 2024, to be paid on March 21, 2024, which, once paid,
will represent Solaris’ 22nd consecutive dividend
- Repurchased approximately 85,000 shares for $0.7 million during
the fourth quarter of 2023; from January 19, 2024 to February 9,
2024, repurchased an additional 1.1 million shares for
approximately $8 million
Solaris Oilfield Infrastructure, Inc. (NYSE:SOI) (“Solaris” or
the “Company”), today announced fourth quarter and full year 2023
financial and operational results.
“2023 was a strong year for Solaris on multiple fronts. We
generated positive free cash flow, raised our dividend per share
twice, returned $47 million to shareholders through dividends and
share repurchases and grew Adjusted EBITDA by 15% from the prior
year as we built a fleet of new equipment and deployed more Solaris
systems on the well sites we service,” Chairman and Chief Executive
Officer Bill Zartler commented.
“Looking to 2024, we expect to generate significantly higher
free cash flow as we harvest cash from the organic investments we
made over the last couple of years. We believe this additional cash
flow should support continued shareholder returns and maintain our
healthy balance sheet, while creating optionality in our long-term
strategy for capital allocation, including organic and inorganic
investments.”
Shareholder Returns
On October 25, 2023, Solaris’ Board of Directors approved a cash
dividend of $0.12 per share of Class A common stock, which was paid
on December 11, 2023 to holders of record as of December 1, 2023,
and a distribution of $0.12 per unit for holders of units in
Solaris Oilfield Infrastructure, LLC (“Solaris LLC,” and such
holders “Solaris LLC Unitholders”), subject to the same payment and
record date, or approximately $5 million in aggregate to
shareholders. This represented a 9% raise in Solaris’ per-share
dividend as compared to the third quarter of 2023 and the third
dividend raise in Solaris’ history since initiation in 2018.
On February 19, 2024, Solaris’s Board of Directors approved a
first quarter 2024 cash dividend of $0.12 per share of Class A
common stock, to be paid on March 21, 2024 to holders of record as
of March 11, 2024, and a distribution of $0.12 per unit to Solaris
LLC Unitholders, which is subject to the same payment and record
dates, or approximately $5 million in aggregate to
shareholders.
Solaris repurchased 85,278 shares during the fourth quarter of
2023 for $0.7 million. From January 19, 2024 to February 9, 2024,
Solaris repurchased an additional 1.1 million shares for
approximately $8.1 million. Approximately $15 million remains in
the current share repurchase authorization. Since initiating the
repurchase authorization in the first quarter of 2023, Solaris has
repurchased a total of 4.3 million shares of Class A common
stock.
Pro forma for the announced first quarter 2024 dividend and
share repurchases to date, Solaris has returned approximately $172
million cumulatively to shareholders through dividends and share
repurchases since 2018, of which $47 million was returned in 2023.
These shareholder returns also reflect a 20% increase in Solaris’
dividend per share since initiation and an approximately 9% net
reduction in total shares outstanding over the last five years.
Free Cash Flow, Capital Expenditures and Liquidity
Free cash flow (defined as net cash provided by operating
activities less investment in property, plant and equipment) after
asset disposals was positive $16 million in the fourth quarter of
2023, including a working capital source of $4 million and capital
expenditures of $7 million.
Capital expenditures in the fourth quarter of 2023 were
approximately $7 million, down over 50% from the third quarter of
2023, and were primarily related to manufacturing of top fill
systems. Capital expenditures for full year 2023 were $64 million
and Solaris expects full year 2024 capital expenditures to be less
than $15 million, an approximately 75% year over year
reduction.
As of December 31, 2023, Solaris had $6 million of cash on the
balance sheet. Solaris reduced net borrowings on the credit
facility by $7 million and ended the fourth quarter of 2023 with
$30 million in borrowings outstanding and $47 million of liquidity.
Net debt (defined as total debt outstanding less cash) at the end
of the fourth quarter of 2023 declined to $24 million compared to
$34 million at the end of the third quarter of 2023.
Fourth Quarter 2023 Financial Review
Net income was $7 million, or $0.14 per diluted Class A share,
for fourth quarter 2023, compared to third quarter 2023 net income
of $8 million, or $0.16 per diluted Class A share, and fourth
quarter 2022 net income of $8 million, or $0.15 per diluted Class A
share. Adjusted pro forma net income for fourth quarter 2023 was $7
million, or $0.15 per fully diluted share, compared to third
quarter 2023 adjusted pro forma net income of $9 million, or $0.19
per fully diluted share, and fourth quarter 2022 adjusted pro forma
net income of $10 million, or $0.22 per fully diluted share.
Revenue was $63 million for fourth quarter 2023, which was down
9% from third quarter 2023 and down 25% from fourth quarter 2022.
Adjusted EBITDA for fourth quarter 2023 was $21 million, which was
down 9% from third quarter 2023 and down 7% from fourth quarter
2022. The sequential decrease in revenue was driven by decreases in
lower-margin ancillary last mile logistics services activity and
frac crews followed. The sequential decrease in Adjusted EBITDA was
impacted by the decline in Solaris system deployments related to
fewer frac crews followed, as the average industry frac crew count
softened into the end of 2023.
During the fourth quarter of 2023, Solaris earned revenue on 103
fully utilized systems, which includes sand systems, top fill
systems and AutoBlend™ systems. Total fully utilized systems were
down 5% from third quarter 2023 and down 6% from fourth quarter
2022. Solaris followed an average of 64 industry frac crews on a
fully utilized basis in the fourth quarter of 2023, which was down
4% from 67 frac crews followed in the third quarter of 2023.
See “About Non-GAAP Measures” below for additional detail and
reconciliations of GAAP to non-GAAP measures in the accompanying
financial tables.
Full Year 2023 Financial Review
Net income was $39 million, or $0.78 per diluted Class A share,
for full year 2023, compared to 2022 net income of $34 million, or
$0.64 per diluted Class A share. Adjusted pro forma net income for
full year 2023 was $37 million, or $0.83 per fully diluted share,
compared to 2022 adjusted pro forma net income of $36 million, or
$0.76 per fully diluted share.
Revenue was $293 million for full year 2023, which was down 8%
from 2022. Adjusted EBITDA for full year 2023 was $97 million,
which was up 15% from 2022. The sequential decrease in revenue was
driven by a decrease in lower-margin ancillary last mile logistics
services activity, partially offset by an increase in Solaris
system deployments. The higher system deployments drove the
sequential increase in Adjusted EBITDA.
Conference Call
Solaris will host a conference call to discuss its results for
fourth quarter and full year 2023 on Tuesday, February 27, 2024 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, or for participants outside of the United
States (412) 317-6594. Participants should ask the operator to join
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 8480084.
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
systems are deployed across oil and natural gas basins in the
United States. Additional information is available on our 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, 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 volatility in global oil markets, expected
capital expenditures and the impact of such expenditures on
performance, management changes, current and potential future
long-term contracts, our future business and financial performance
and our results of operations, and the other risks discussed in
Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K
for the year ended December 31, 2023 to be filed with the U.S.
Securities Exchange Commission subsequent to the issuance of this
communication. 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, INC AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF
OPERATIONS (In thousands, except per share data)
(Unaudited)
Three Months Ended
Year Ended
December 31,
September 30,
December 31,
2023
2022
2023
2023
2022
Revenue
60,069
77,658
63,147
269,474
300,000
Revenue - related parties
3,278
6,396
6,529
23,473
20,005
Total revenue
63,347
84,054
69,676
292,947
320,005
Operating costs and expenses:
Cost of services (excluding depreciation
and amortization)
36,870
56,696
42,102
177,847
219,775
Depreciation and amortization
9,518
8,657
9,179
36,185
30,433
Property tax contingency (1)
—
—
—
—
3,072
Selling, general and administrative
7,229
5,873
6,359
26,951
23,074
Impairment of fixed assets
—
—
1,423
1,423
—
Other operating expense, net (2)
489
2,746
613
639
1,847
Total operating costs and expenses
54,106
73,972
59,676
243,045
278,201
Operating income
9,241
10,082
10,000
49,902
41,804
Interest expense, net
(912
)
(181
)
(1,057
)
(3,307
)
(489
)
Total other expense
(912
)
(181
)
(1,057
)
(3,307
)
(489
)
Income before income tax expense
8,329
9,901
8,943
46,595
41,315
Provision for income taxes
1,370
1,913
1,305
7,820
7,803
Net income
6,959
7,988
7,638
38,775
33,512
Less: net income related to
non-controlling interests
(2,658
)
(3,192
)
(2,704
)
(14,439
)
(12,354
)
Net income attributable to Solaris
Oilfield Infrastructure, Inc.
$
4,301
$
4,796
$
4,934
$
24,336
$
21,158
Earnings per share of Class A common stock
- basic
$
0.14
$
0.15
$
0.16
$
0.78
$
0.64
Earnings per share of Class A common stock
- diluted
$
0.14
$
0.15
$
0.16
$
0.78
$
0.64
Basic weighted average shares of Class A
common stock outstanding
29,024
31,640
29,025
29,693
31,479
Diluted weighted average shares of Class A
common stock outstanding
29,024
31,640
29,025
29,693
31,479
(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 first half of 2024.
(2)
Other expense includes the sale or
disposal of assets, insurance gains, credit losses or recoveries,
severance costs, and other settlements.
SOLARIS OILFIELD
INFRASTRUCTURE, INC AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts) (Unaudited)
December 31,
December 31,
2023
2022
Assets
Current assets:
Cash and cash equivalents
$
5,833
$
8,835
Accounts receivable, net of allowances of
$104 and $385, respectively
44,916
64,543
Accounts receivable - related party
2,378
4,925
Prepaid expenses and other current
assets
4,342
5,151
Inventories
6,672
5,289
Assets held for sale
3,000
—
Total current assets
67,141
88,743
Property, plant and equipment, net
325,121
298,160
Non-current inventories
1,593
1,569
Non-current receivables, net of allowance
of $862
1,663
—
Operating lease right-of-use assets
10,721
4,033
Goodwill
13,004
13,004
Intangible assets, net
702
1,429
Deferred tax assets
48,010
55,370
Other assets
342
268
Total assets
$
468,297
$
462,576
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable
$
12,654
$
25,934
Accrued liabilities
20,292
25,252
Current portion of payables related to Tax
Receivable Agreement
—
1,092
Current portion of operating lease
liabilities
1,385
917
Current portion of finance lease
liabilities
2,462
1,924
Other current liabilities
408
790
Total current liabilities
37,201
55,909
Operating lease liabilities, net of
current
11,541
6,212
Borrowings under the credit agreement
30,000
8,000
Finance lease liabilities, net of
current
2,401
3,429
Payables related to Tax Receivable
Agreement
71,530
71,530
Other long-term liabilities
44
367
Total liabilities
152,717
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, 28,967 shares issued and outstanding as
of December 31, 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 December 31, 2023 and December 31, 2022
—
—
Additional paid-in capital
188,379
202,551
Retained earnings
17,314
12,847
Total stockholders' equity attributable to
Solaris and members' equity
205,983
215,715
Non-controlling interest
109,597
101,414
Total stockholders' equity
315,580
317,129
Total liabilities and stockholders'
equity
$
468,297
$
462,576
SOLARIS OILFIELD
INFRASTRUCTURE, INC AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF
CASH FLOWS (In thousands) (Unaudited)
Year Ended
December 31,
Three Months Ended
December 31,
2023
2022
2023
Cash flows from operating activities:
Net income
$
38,775
$
33,512
$
6,959
Adjustment to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
36,185
30,433
9,518
Impairment of fixed assets
1,423
—
—
Loss on disposal of asset
603
3,707
(1
)
Stock-based compensation
7,741
6,092
1,911
Amortization of debt issuance costs
158
159
44
Allowance for credit losses
810
(420
)
650
Deferred income tax expense
7,251
7,683
1,232
Change in payables related to Tax
Receivable Agreement
—
(663
)
—
Other
(913
)
(169
)
(735
)
Changes in assets and liabilities:
Accounts receivable
17,155
(34,611
)
1,067
Accounts receivable - related party
2,547
(1,318
)
4,687
Prepaid expenses and other assets
2,363
6,394
2,100
Inventories
(6,186
)
(4,622
)
(1,166
)
Accounts payable
(10,630
)
13,337
(4,161
)
Accrued liabilities
(6,266
)
5,410
1,478
Payments pursuant to tax receivable
agreement
(1,092
)
—
—
Property tax contingency (1)
—
3,072
—
Net cash provided by operating
activities
89,924
67,996
23,583
Cash flows from investing activities:
Investment in property, plant and
equipment
(64,388
)
(81,411
)
(7,271
)
Cash received from insurance proceeds
122
1,463
—
Proceeds from disposal of assets
2,263
409
98
Net cash used in investing activities
(62,003
)
(79,539
)
(7,173
)
Cash flows from financing activities:
Share and unit repurchases and
retirements
(26,436
)
—
(679
)
Distribution to unitholders (includes
distribution of $6.2 million at $0.45/unit, $5.8 million at
$0.42/unit and $1.6 million at $0.12/unit, respectively)
(6,634
)
(5,763
)
(1,641
)
Dividend paid to Class A common stock
shareholders
(14,072
)
(13,804
)
(3,670
)
Payments under finance leases
(2,502
)
(1,610
)
(594
)
Payments under insurance premium
financing
(1,794
)
(1,484
)
(414
)
Proceeds from stock option exercises
—
6
—
Cancelled shares withheld for taxes from
RSU vesting
(1,364
)
(1,106
)
—
Borrowings under the credit agreement
35,000
11,000
—
Repayment of credit agreement
(13,000
)
(3,000
)
(7,000
)
Payments related to debt issuance
costs
(121
)
(358
)
(30
)
Net cash used in financing activities
(30,923
)
(16,119
)
(14,028
)
Net (decrease)/increase in cash and cash
equivalents
(3,002
)
(27,662
)
2,382
Cash and cash equivalents at beginning of
period
8,835
36,497
3,451
Cash and cash equivalents at end of
period
$
5,833
$
8,835
$
5,833
Non-cash activities
Investing:
Capitalized depreciation in property,
plant and equipment
432
555
135
Capitalized stock based compensation
539
386
129
Property and equipment additions incurred
but not paid at period-end
1,284
3,173
1,284
Property, plant and equipment additions
transferred from inventory
4,780
1,826
2,205
Additions to fixed assets through finance
leases
2,012
6,863
—
Financing:
Insurance premium financing
1,520
1,931
—
Cash paid for:
Interest
2,958
249
879
Income taxes
478
370
—
(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.
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 use them to assess our
results of operations because it allows us, our investors and our
lenders to compare our operating performance on a consistent basis
across periods by removing the effects of varying levels of
interest expense due to our capital structure, depreciation and
amortization due to our asset base and other items that impact the
comparability of financial results from period to period. We
present EBITDA and Adjusted EBITDA because we believe they provide
useful information regarding trends and other factors affecting our
business in addition to measures calculated under generally
accepted accounting principles in the United States
(“GAAP”).
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.
EBITDA and Adjusted EBITDA should not be
considered in isolation or as substitutes for an analysis of our
results of operation and financial condition as reported in
accordance with GAAP. Net income is the GAAP measure most directly
comparable to EBITDA and Adjusted EBITDA. EBITDA and Adjusted
EBITDA should not be considered alternative 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
Year Ended
December 31,
September 30,
December 31,
2023
2022
2023
2023
2022
Net income
$
6,959
$
7,988
$
7,638
$
38,775
$
33,512
Depreciation and amortization
9,518
8,657
9,179
36,185
30,433
Interest expense, net
912
181
1,057
3,307
489
Income taxes (1)
1,370
1,913
1,305
7,820
7,803
EBITDA
$
18,759
$
18,739
$
19,179
$
86,087
$
72,237
Property tax contingency (2)
—
—
—
—
3,072
Stock-based compensation expense (3)
1,911
1,427
1,917
7,732
6,092
Loss on disposal of assets
(4
)
2,729
746
386
3,754
Impairment on fixed assets (4)
—
—
1,423
1,423
—
Change in payables related to Tax
Receivable Agreement (5)
—
(10
)
—
—
(663
)
Credit losses
650
—
—
810
(420
)
Other (6)
6
159
163
255
(290
)
Adjusted EBITDA
$
21,322
$
23,044
$
23,428
$
96,693
$
83,782
_________________________
(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 first half of 2024.
(3)
Represents stock-based compensation
expense related to restricted stock awards and performance-based
restricted stock units.
(4)
Impairment recorded on certain fixed
assets classified as assets held for sale during the three months
ended September 30, 2023.
(5)
Reduction in liability due to state tax
rate change.
(6)
Other includes gains on insurance claims
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. Adjusted pro forma
earnings per fully diluted share is calculated by dividing adjusted
pro forma net income by the weighted-average shares of Class A
common stock outstanding, assuming the full exchange of all
outstanding units of Solaris LLC (“Solaris LLC Units”), after
giving effect to the dilutive effect of outstanding equity-based
awards.
When used in conjunction with GAAP
financial measures, adjusted pro forma net income and adjusted pro
forma earnings per fully diluted share are supplemental measures of
operating performance that the Company believes are useful measures
to evaluate performance period over period and relative to its
competitors. By assuming the full exchange of all outstanding
Solaris LLC Units, the Company believes these measures facilitate
comparisons with other companies that have different organizational
and tax structures, as well as comparisons period over period
because it eliminates the effect of any changes in net income
attributable to Solaris as a result of increases in its ownership
of Solaris LLC, which are unrelated to the Company's operating
performance, and excludes items that are non-recurring or may not
be indicative of ongoing operating performance.
Adjusted pro forma net income and adjusted
pro forma earnings per fully diluted share are not necessarily
comparable to similarly titled measures used by other companies due
to different methods of calculation. Presentation of adjusted pro
forma net income and adjusted pro forma earnings per fully diluted
share should not be considered alternatives to net income and
earnings per share, as determined under GAAP. While these measures
are useful in evaluating the Company's performance, it does not
account for the earnings attributable to the non-controlling
interest holders and therefore does not provide a complete
understanding of the net income attributable to Solaris. Adjusted
pro forma net income and adjusted pro forma earnings per fully
diluted share should be evaluated in conjunction with GAAP
financial results. A reconciliation of adjusted pro forma net
income to net income attributable to Solaris, the most directly
comparable GAAP measure, and the computation of adjusted pro forma
earnings per fully diluted share are set forth below.
Three Months Ended
Year Ended
December 31,
September 30,
December 31,
2023
2022
2023
2023
2022
Numerator:
Net income attributable to Solaris
$
4,301
$
4,796
$
4,934
$
24,336
$
21,158
Adjustments:
Reallocation of net income attributable to
non-controlling interests from the assumed exchange of LLC
Interests (1)
2,658
3,192
2,704
14,439
12,354
Loss on disposal of assets
(4
)
2,729
746
386
3,754
Impairment on fixed assets (2)
—
—
1,423
1,423
—
Property tax contingency (3)
—
—
—
—
3,072
Change in payables related to Tax
Receivable Agreement (4)
—
(10
)
—
—
(663
)
Credit losses
650
—
—
810
(420
)
Other (5)
6
159
163
255
(290
)
Incremental income tax expense
(976
)
(671
)
(1,453
)
(4,192
)
(3,452
)
Adjusted pro forma net income
$
6,635
$
10,195
$
8,517
$
37,457
$
35,513
Denominator:
Weighted average shares of Class A common
stock outstanding
29,024
31,640
29,025
29,693
31,479
Adjustments:
Potentially dilutive shares (6)
15,252
14,968
15,448
15,268
14,979
Adjusted pro forma fully weighted average
shares of Class A common stock outstanding - diluted
44,276
46,608
44,473
44,961
46,458
Adjusted pro forma earnings per share -
diluted
$
0.15
$
0.22
$
0.19
$
0.83
$
0.76
(1)
Assumes the exchange of all outstanding
Solaris LLC Units for shares of Class A common stock at the
beginning of the relevant reporting period, resulting in the
elimination of the non-controlling interest and recognition of the
net income attributable to non-controlling interests.
(2)
Impairment recorded on certain fixed
assets classified as assets held for sale during the three months
ended September 30, 2023.
(3)
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 first half of 2024.
(4)
Reduction in liability due to state tax
rate change.
(5)
Other includes gains on insurance claims
and other settlements.
(6)
Assumes the exchange of all outstanding
Solaris LLC Units for shares of Class A common stock and vesting of
Restricted stock awards and Performance-based restricted stock
awards at the beginning of the relevant reporting periods.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240226713512/en/
Yvonne Fletcher Senior Vice President, Finance and Investor
Relations (281) 501-3070 IR@solarisoilfield.com
Solaris Oilfield Infrast... (NYSE:SOI)
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