Solaris Oilfield Infrastructure, Inc., an independent provider of supply chain management and logistics solutions designed to drive efficiencies and reduce costs for the oil and natural gas industry, has reported financial results for the first quarter 2022.
Operational update and outlook
During the first quarter of 2022 an average of 75 mobile proppant management systems were fully utilised, which was up 19% from average fourth quarter 2021 levels.
“I’m proud of the results the Solaris team has achieved in what is shaping up to be a strong year for the company and our industry,” Solaris’ Chairman and Chief Executive Officer Bill Zartler commented. “We are encouraged by the positive contributions thus far from our top fill and AutoBlendTM technologies and plan to continue to invest in these new technologies. Our first quarter results demonstrate our ability to expand our offering and generate incremental returns by continuing to innovate, while continuing to preserve our balance sheet strength and maintain our dividend.”
First quarter 2022 financial review
Solaris reported net income of US$5.7 million, or US$0.11 per diluted Class A share, for first quarter 2022, compared to fourth quarter 2021 net income of US$1.1 million, or US$0.01 per diluted Class A share. Adjusted pro forma net income for first quarter 2022 was US$4.8 million, or US$0.11 per fully diluted share, compared to fourth quarter 2021 adjusted pro forma net income of US$1.0 million, or US$0.02 per fully diluted share. A description of adjusted pro forma net income and a reconciliation to net income attributable to Solaris, its most directly comparable generally accepted accounting principles measure, and the computation of adjusted pro forma earnings per fully diluted share are provided below.
Revenues were US$56.9 million for first quarter 2022, which were up 24% from fourth quarter 2021, driven by an increase in systems deployed and improved pricing.
Adjusted EBITDA for first quarter 2022 was US$15.7 million, which was up 60% from fourth quarter 2021. The increase in Adjusted EBITDA was driven by an increase in the number of fully utilised systems, pricing and mix improvement, an increase in last mile logistics profitability, and contribution from new technologies. A description of Adjusted EBITDA and a reconciliation to net income, its most directly comparable GAAP measure, is provided below.
Capital expenditures, free cash flow and liquidity
Capital expenditures in the first quarter 2022 were US$11.8 million. The company still expects maintenance capital expenditures for full year 2022 to be approximately US$10 million. Growth capital expenditures are now expected to be between US$40 million and US$60 million for full year 2022, including investments in additional top fill and AutoBlend™ units.
Free cash flow (defined as net cash provided by operating activities less investment in property, plant and equipment) during first quarter 2022 was US$(5.5) million and reflects increased working capital needs as activity levels for the company grew. Distributable cash flow (defined as Adjusted EBITDA less maintenance capital expenditures) was approximately US$14 million for the first quarter 2022 and covered quarterly dividend distributions of approximately US$5.0 million.
As of 31 March 2022 the company had approximately US$25.1 million of cash on the balance sheet. The company’s credit facility remains undrawn, and total liquidity, including availability under the credit facility, was US$75.1 million as of the end of the first quarter 2022.
On 24 February 2022, the company’s Board of Directors declared a cash dividend of US$0.105 per share of Class A common stock, which was paid on 17 March 2022 to holders of record as of 07 March 2022. A distribution of US$0.105 per unit was also approved for holders of units in Solaris Oilfield Infrastructure, LLC. Since initiating the dividend in December 2018, the company has paid 14 consecutive quarterly dividends. Cumulatively, the company has returned approximately US$97 million in cash to shareholders through dividends and share repurchases since December 2018.
Read the article online at: https://www.oilfieldtechnology.com/offshore-and-subsea/29042022/solaris-oilfield-infrastructure-inc-shares-first-quarter-financial-results/