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Solaris Oilfield Infrastructure Announces Fourth Quarter 2021 Results

Published : Monday, February 21, 2022, 3:00 pm
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Fourth Quarter 2021 Highlights

  • Net income of $1.1 million, or $0.01 per diluted Class A share, for the quarter ended December 31, 2021; Adjusted pro forma net income of $1.0 million, or $0.02 per diluted share for the quarter ended December 31, 2021
  • Adjusted EBITDA of $9.8 million for the quarter ended December 31, 2021
  • Paid a regular quarterly dividend of $0.105 per share on December 17, 2021

HOUSTON--(BUSINESS WIRE)--Solaris Oilfield Infrastructure, Inc. (NYSE:SOI) (“Solaris” or the “Company”), a leading independent provider of supply chain management and logistics solutions designed to drive efficiencies and reduce costs for the oil and natural gas industry, today reported financial results for the fourth quarter and full year 2021.

Operational Update and Outlook

During the fourth quarter of 2021, an average of 63 mobile proppant management systems were fully utilized, which was up 7% from average third quarter 2021 levels. Deployed proppant system count during the fourth quarter was 98. For full year 2021, an average of 57 mobile proppant management systems were fully utilized, representing a 27% increase from 45 fully utilized systems averaged in 2020.

“2021 was an exciting year for Solaris. We redeployed systems to meet growing demand and also introduced our new AutoBlend™ integrated e-blender and top fill equipment technologies,” Solaris’ Chairman and Chief Executive Officer Bill Zartler commented. “Our fourth quarter results demonstrate the early success we are seeing as we begin commercializing these innovative offerings. Given these results, we are even more excited about the prospects for 2022 as we continue to invest in and benefit from new technology, while continuing to pay our dividend and maintain our strong balance sheet.”

Fourth Quarter 2021 Financial Review

Solaris reported net income of $1.1 million, or $0.01 per diluted Class A share, for fourth quarter 2021, compared to third quarter 2021 net income of $1.4 million, or $0.03 per diluted Class A share. Adjusted pro forma net income for fourth quarter 2021 was $1.0 million, or $0.02 per fully diluted share, compared to third quarter 2021 adjusted pro forma net loss of $0.6 million, or $(0.01) 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 (“GAAP”) measure, and the computation of adjusted pro forma earnings per fully diluted share are provided below.

Revenues were $46.0 million for fourth quarter 2021, which were down 6% from third quarter 2021, driven by a decrease in last mile trucking logistics activity and modestly offset by the increase in systems deployed.

Adjusted EBITDA for fourth quarter 2021 was $9.8 million, which was up 27% from third quarter 2021. The increase in Adjusted EBITDA was driven by an increase in the number of fully utilized systems, mix improvement 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.

Full Year 2021 Financial Review

Solaris reported net loss of $1.3 million, or $(0.04) per diluted Class A share, for full year 2021, compared to full year 2020 net loss of $51.1 million, or $(1.03) per diluted Class A share. Adjusted pro forma net loss for full year 2021 was $2.6 million, or $(0.06) per fully diluted share, compared to full year 2020 adjusted pro forma net loss of $6.6 million, or $(0.15) per fully diluted share.

Revenues were $159.2 million for full year 2021, which were up 55% from full year 2020, primarily driven by an increase in both systems deployed and last mile logistics activity.

Adjusted EBITDA for full year 2021 was $30.1 million, which was up 18% from full year 2020.

Capital Expenditures, Free Cash Flow and Liquidity

Capital expenditures in the fourth quarter 2021 were $5.9 million and for full year 2021 were $19.6 million. The Company expects maintenance capital expenditures for full year 2022 to be approximately $10 million, approximately flat with 2021 and has committed to growth capital expenditures between $20 million and $30 million for the first half of 2022. Growth capital expenditures will include investments in additional AutoBlend™ and top fill units.

Free cash flow (defined as net cash provided by operating activities less investment in property, plant and equipment) during fourth quarter 2021 was $(1.2) million and for full year 2021 was $(3.2) million. Distributable cash flow (defined as Adjusted EBITDA less maintenance capital expenditures) was approximately $20 million for full year 2021 and covered full year dividend distributions of approximately $19 million.

The Company expects to complete an amendment to its revolving credit facility to extend the term through 2025. The total capacity of the credit facility will remain unchanged at $50 million, with a $25 million uncommitted accordion option to increase the loan availability to $75 million. No significant changes are expected to be made to the financial covenants governing the Company’s borrowing capabilities.

As of December 31, 2021, the Company had approximately $36.5 million of cash on the balance sheet. The Company’s credit facility remains undrawn, and total liquidity, including availability under the credit facility, was $86.5 million as of the end of the fourth quarter 2021.

Shareholder Returns

On November 18, 2021, the Company’s Board of Directors declared a cash dividend of $0.105 per share of Class A common stock, which was paid on December 17, 2021 to holders of record as of December 7, 2021. A distribution of $0.105 per unit was also approved for holders of units in Solaris Oilfield Infrastructure, LLC (“Solaris LLC”). Since initiating the dividend in December 2018, the Company has paid 13 consecutive quarterly dividends. Cumulatively, the Company has returned approximately $92 million in cash to shareholders through dividends and share repurchases since December 2018.

Conference Call

The Company will host a conference call to discuss its fourth quarter and full year 2021 results on Tuesday, February 22, 2022 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 https://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 8943512. 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. (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 in many of the most active 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 Current Report on Form 8-K or will be incorporated by reference into any other 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.

 

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,

 

 

2021

 

2020

 

2021

 

2021

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

45,964

 

 

 

25,276

 

 

 

49,377

 

 

 

159,189

 

 

 

102,976

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of services (excluding depreciation and amortization)

 

 

32,658

 

 

 

17,330

 

 

 

38,460

 

 

 

115,459

 

 

 

65,764

 

Depreciation and amortization

 

 

6,923

 

 

 

6,643

 

 

 

6,842

 

 

 

27,210

 

 

 

27,021

 

Selling, general and administrative

 

 

4,934

 

 

 

4,269

 

 

 

4,760

 

 

 

19,264

 

 

 

16,481

 

Impairment loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

47,828

 

Other operating (income) expenses (1)

 

 

(280

)

 

 

453

 

 

 

(2,690

)

 

 

(2,357

)

 

 

5,782

 

Total operating costs and expenses

 

 

44,235

 

 

 

28,695

 

 

 

47,372

 

 

 

159,576

 

 

 

162,876

 

Operating income (loss)

 

 

1,729

 

 

 

(3,419

)

 

 

2,005

 

 

 

(387

)

 

 

(59,900

)

Interest expense, net

 

 

(77

)

 

 

(198

)

 

 

(66

)

 

 

(247

)

 

 

(162

)

Total other expense

 

 

(77

)

 

 

(198

)

 

 

(66

)

 

 

(247

)

 

 

(162

)

Income (loss) before income tax expense

 

 

1,652

 

 

 

(3,617

)

 

 

1,939

 

 

 

(634

)

 

 

(60,062

)

Provision (benefit) for income taxes

 

 

549

 

 

 

(776

)

 

 

507

 

 

 

626

 

 

 

(8,969

)

Net income (loss)

 

 

1,103

 

 

 

(2,841

)

 

 

1,432

 

 

 

(1,260

)

 

 

(51,093

)

Less: net (income) loss related to non-controlling interests

 

 

(465

)

 

 

1,405

 

 

 

(558

)

 

 

392

 

 

 

21,752

 

Net income (loss) attributable to Solaris

 

$

638

 

 

$

(1,436

)

 

$

874

 

 

$

(868

)

 

$

(29,341

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share of Class A common stock - basic

 

$

0.01

 

 

$

(0.06

)

 

$

0.03

 

 
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