Solaris Oilfield Infrastructure (SOI) Q2 Results - Aug 1

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dan_s
Posts: 34463
Joined: Fri Apr 23, 2010 8:22 am

Solaris Oilfield Infrastructure (SOI) Q2 Results - Aug 1

Post by dan_s »

Solaris beat my forecast and they crushed First Call's EPS forecast for Q2. This debt free oilfield services company is not directly impacted by oil & gas prices. As the active rig count increases, their revenues go up. I expect increasing dividends and more stock repurchases in 2H 2022. $20 is a reasonable 12-month price target.
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Mon, August 1, 2022 at 4:03 PM
Second Quarter 2022 Highlights

Net income of $8.3 million, or $0.16 per diluted Class A share, for the quarter ended June 30, 2022; Adjusted pro forma net income of $9.4 million, or $0.20 per fully diluted share for the quarter ended June 30, 2022 < Compares to my Q2 forecast of $5.7 million net income.

Adjusted EBITDA of $21.1 million for the quarter ended June 30, 2022

Paid a regular quarterly dividend of $0.105 per share on June 17, 2022, Solaris’ 15th consecutive quarterly dividend

Surpassed $100 million returned to shareholders in the form of dividends and stock buybacks since initiating the dividend in 2018

HOUSTON, August 01, 2022--(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 second quarter 2022.

Operational Update and Outlook

During the second quarter of 2022, an average of 84 mobile proppant management systems were fully utilized, which was up 12% from average first quarter 2022 levels.

"The Solaris team delivered on an impressive second quarter where we continued to see the positive impact of our top fill solutions and AutoBlendTM technology," Solaris’ Chairman and Chief Executive Officer Bill Zartler commented. "We are enthusiastic about the benefits that we expect these technologies can provide for both Solaris and our customers moving forward. Our strong results thus far in 2022 are supported by incremental returns with the investments we are making. We are also proud to now have returned over $100 million to shareholders since 2018 and remain committed to paying our dividends and maintaining healthy liquidity."

Second Quarter 2022 Financial Review

Solaris reported net income of $8.3 million, or $0.16 per diluted Class A share, for second quarter 2022, compared to first quarter 2022 net income of $5.7 million, or $0.11 per diluted Class A share. Adjusted pro forma net income for second quarter 2022 was $9.4 million, or $0.20 per fully diluted share, compared to first quarter 2022 adjusted pro forma net income of $4.8 million, or $0.11 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 $86.7 million for second quarter 2022, which were up 52% from first quarter 2022, driven by an increase in systems deployed, contribution from new technologies and last mile trucking logistics activity.

Adjusted EBITDA for second quarter 2022 was $21.1 million, which was up 34% from first quarter 2022. The increase in Adjusted EBITDA was driven by an increase in the number of fully utilized systems, mix improvement, an increase in last mile logistics profitability and activity, 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 second quarter 2022 were $20.6 million. The Company still expects maintenance capital expenditures for full year 2022 to be approximately $10 million. The Company is now narrowing the range of expected growth capital expenditures to between $50 million and $60 million for full year 2022, including investments in additional top fill and AutoBlend™ units, compared to the previously guided range of $40 million to $60 million.

Free cash flow (defined as net cash provided by operating activities less investment in property, plant and equipment) during second quarter 2022 was $(4.4) million and reflects increased capital expenditures and working capital use of $(4.2) million to support growth. Distributable cash flow (defined as Adjusted EBITDA less maintenance capital expenditures) was approximately $20 million for the second quarter 2022 and covered quarterly dividend distributions of approximately $4.9 million.

As of June 30, 2022, the Company had approximately $15.4 million of cash on the balance sheet. The Company’s credit facility remains undrawn, and total liquidity, including availability under the credit facility, was $65.4 million as of the end of the second quarter 2022.

Shareholder Returns

On May 12, 2022, the Company’s Board of Directors declared a cash dividend of $0.105 per share of Class A common stock, which was paid on June 17, 2022 to holders of record as of June 7, 2022. 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 15 consecutive quarterly dividends. Cumulatively, the Company has returned approximately $102 million in cash to shareholders through dividends and share repurchases since December 2018.
Dan Steffens
Energy Prospectus Group
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