Atlas Energy Solutions Announces First Quarter 2023 Results
First Quarter 2023 Highlights
-
Total sales of
$153.4 million -
Net Income of
$62.9 million 41.0% margin) -
Adjusted EBITDA of
$84.0 million 54.8% Adjusted EBITDA Margin) (1) -
Net Cash Provided by Operating Activities of
$54.2 million -
Adjusted Free Cash Flow of
$76.9 million 50.1% Adjusted Free Cash Flow Margin) (1) - Commenced construction of the Dune Express in March 2023
-
Kermit expansion remains on time and on budget -
The Board of Directors declared a quarterly variable dividend of
$0.15 $0.15
Financial Summary |
||||||||
| For the Three Months Ended | ||||||||
| March 31, | December 31, | |||||||
2023 |
2022 |
|||||||
| (unaudited, $ in thousand) | ||||||||
| Sales | $ |
153,418 |
|
$ |
149,865 |
|
||
| Net Income | $ |
62,905 |
|
$ |
62,583 |
|
||
| Net Income Margin |
|
41 |
% |
|
42 |
% |
||
| Adjusted EBITDA (1) | $ |
84,033 |
|
$ |
75,235 |
|
||
| Adjusted EBITDA Margin (1) |
|
55 |
% |
|
50 |
% |
||
| Net Cash Provided by Operating Activities | $ |
54,235 |
|
$ |
50,012 |
|
||
| Adjusted Free Cash Flow (1) | $ |
76,919 |
|
$ |
67,049 |
|
||
| Adjusted Free Cash Flow Margin (1) |
|
50 |
% |
|
45 |
% |
||
(1) |
Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Free Cash Flow and Adjusted Free Cash Flow Margin are non-GAAP financials measures. See Non-GAAP Financial Measures for a discussion of these measures and a reconciliation of these measures to our most directly comparable financial measures calculated and presented in accordance with GAAP. |
Bud Brigham, Founder, Executive Chairman and CEO, commented, “This was a tremendous quarter for Atlas and a great start to the year. We set a Company record for quarterly sales volumes at 2.8 million tons which annualizes to a run-rate of over 11.0 million tons per year. We generated
Bud Brigham continued, “In terms of growth capex, we are progressing nicely on our
John Turner, President & CFO, added, “Atlas is in a great position on the heels of an excellent first quarter for this fiscal year 2023. Our balance sheet and liquidity positions are strong, with
First Quarter 2023 Financial Results
First quarter 2023 product sales increased
First quarter 2023 cost of goods sold (excluding depreciation, depletion and accretion expense) (“COGS”) decreased by
Selling, general and administrative expenses (“SG&A”) for the first quarter of 2023 increased
Net income for the first quarter of 2023 increased
Adjusted EBITDA for the first quarter of 2023 increased by
Liquidity, Capital Expenditures and Other
As of March 31, 2023, the Company’s total liquidity was
Net cash used in investing activities was
As of March 31, 2023, Atlas had 100,000,000 shares of common stock outstanding, comprised of 57,147,501 shares of Class A common stock outstanding (representing
Quarterly Dividend
On May 8, 2023, the Board of Directors (the “Board) of Atlas declared a quarterly variable dividend to Class A common stockholders of
John Turner, President & CFO added, “Atlas has demonstrated its ability to generate meaningful cash flow across industry cycles. Given our continued cash generation, we are well positioned to return capital to shareholders. We are committed to creating long-term value for our shareholders through a balanced strategy of returning cash to shareholders and reinvesting our cash flow at high rates of return.”
Conference Call Information
The Company will host a conference call to discuss financial and operational results on Tuesday, May 9, 2023 at 8:00am Central Time (9:00am Eastern Time). Individuals wishing to participate in the conference call should dial (877) 407-4133. A live webcast will be available at https://ir.atlas.energy/. Please access the webcast or dial in for the call at least 10 minutes ahead of the start time to ensure a proper connection.
An archived version of the conference call will be available on the Company’s website shortly after the conclusion of the call.
The Company has also posted an updated investor presentation titled “Investor Presentation May 2023” at https://ir.atlas.energy/ in the "Presentations” section under “News & Events” tab on the Company’s Investor Relations webpage.
About Atlas Energy Solutions
Our company was founded in 2017 by long-time E&P operators and led by Bud Brigham. Our experience as E&P operators, combined with our unique asset base and focus on using technology to deliver novel solutions to our customers’ toughest challenges and mission-critical needs differentiates us as the proppant and logistics provider of choice in the Permian Basin.
Atlas is a leader in the proppant and proppant logistics industry and is currently solely focused on serving customers in the Permian Basin of
Our core mission is to maximize value for our stockholders by generating strong cash flow and allocating our capital resources efficiently, including providing a regular and durable return of capital to our investors through industry cycles. Further, we recognize that our long-term profitability is maximized in being good stewards of the environments and communities in which we operate. In our pursuit of this mission, we work to improve the processes involved in the development of hydrocarbons, which we believe will ultimately contribute to providing individuals with access to the energy they need to sustain or improve their quality of life in a clean, safe, and efficient manner. We take great pride in contributing positively to the development of the hydrocarbons that power our lives.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended. Statements that are predictive or prospective in nature, that depend upon or refer to future events or conditions or that include the words “may,” “assume,” “forecast,” “position,” “strategy,” “potential,” “continue,” “could,” “will,” “plan,” “project,” “budget,” “predict,” “pursue,” “target,” “seek,” “objective,” “believe,” “expect,” “anticipate,” “intend,” “estimate” and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements about our business strategy, our industry, our future operations and profitability, expected capital expenditures and the impact of such expenditures on our performance, financial position, production, revenues and losses, our capital programs, management changes, current and potential future long-term contracts and our future business and financial performance. Although forward-looking statements reflect our good faith beliefs at the time they are made, we caution you that these forward-looking statements are subject to a number of risks and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks include but are not limited to, commodity price volatility stemming from the continued impacts of COVID-19, including any new strains or variants, the ongoing war in
Atlas Energy Solutions Inc. |
||||||||
Condensed Consolidated Statements of Income |
||||||||
(unaudited, $ in thousands, except per share data) |
||||||||
For the Three Months Ended |
||||||||
March 31, |
December 31, |
|||||||
2023 |
2022 |
|||||||
| (unaudited, $ in thousand) | ||||||||
| Product sales | $ |
128,142 |
|
$ |
121,881 |
|
||
| Service sales |
|
25,276 |
|
|
27,984 |
|
||
| Total sales |
|
153,418 |
|
|
149,865 |
|
||
| Cost of sales (excluding depreciation, depletion and accretion expense) |
|
62,555 |
|
|
67,285 |
|
||
| Depreciation, depletion and accretion expense |
|
8,519 |
|
|
7,791 |
|
||
| Gross profit |
|
82,344 |
|
|
74,789 |
|
||
| Selling, general and administrative expense (including stock and unit-based expense of |
|
8,504 |
|
|
7,903 |
|
||
| Operating income |
|
73,840 |
|
|
66,886 |
|
||
| Interest expense, net |
|
(3,442 |
) |
|
(3,990 |
) |
||
| Other income |
|
184 |
|
|
121 |
|
||
| Income before income taxes |
|
70,582 |
|
|
63,017 |
|
||
| Income tax expense |
|
7,677 |
|
|
434 |
|
||
| Net income | $ |
62,905 |
|
$ |
62,583 |
|
||
| Less: Pre-IPO net income attributable to Atlas Sand Company, LLC |
|
54,561 |
|
|||||
| Less: Net income attributable to redeemable noncontrolling interest |
|
6,610 |
|
|||||
| Net income attributable to Atlas Energy Solutions, Inc. | $ |
1,734 |
|
|||||
| Net income per Class A common share | ||||||||
| Basic | $ |
0.03 |
|
|||||
| Diluted | $ |
0.03 |
|
|||||
| Weighted average Class A common shares outstanding | ||||||||
| Basic |
|
57,148 |
|
|||||
| Diluted |
|
57,408 |
|
|||||
Atlas Energy Solutions Inc. |
||||||||
Condensed Consolidated Statements of Cash Flows |
||||||||
(unaudited, $ in thousands) |
||||||||
For the Three Months Ended |
||||||||
March 31, |
December 31, |
|||||||
2023 |
2022 |
|||||||
| (unaudited, $ in thousand) | ||||||||
| Operating Activities: | ||||||||
| Net income | $ |
62,905 |
|
$ |
62,583 |
|
||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation, depletion and accretion expense |
|
8,808 |
|
|
8,089 |
|
||
| Amortization of debt discount |
|
118 |
|
|
119 |
|
||
| Amortization of deferred financing costs |
|
87 |
|
|
110 |
|
||
| Stock and unit-based compensation |
|
622 |
|
|
135 |
|
||
| Deferred income tax |
|
3,808 |
|
|
(2 |
) |
||
| Commodity derivatives gain |
|
- |
|
|
15 |
|
||
| Settlements on commodity derivatives |
|
- |
|
|
141 |
|
||
| Other |
|
206 |
|
|
232 |
|
||
| Changes in operating assets and liabilities |
|
(22,319 |
) |
|
(21,410 |
) |
||
| Net cash provided by operating activities |
|
54,235 |
|
|
50,012 |
|
||
| Investing Activities: | ||||||||
| Purchases of property, plant and equipment |
|
(60,940 |
) |
|
(35,428 |
) |
||
| Net cash used in investing activities |
|
(60,940 |
) |
|
(35,428 |
) |
||
| Financing Activities: | ||||||||
| Net proceeds from IPO |
|
303,426 |
|
|
- |
|
||
| Payment of offering costs |
|
(1,581 |
) |
|
- |
|
||
| Payments on term loan borrowings |
|
(8,226 |
) |
|
(7,987 |
) |
||
| Issuance costs associated with debt financing |
|
(530 |
) |
|
- |
|
||
| Payments under finance leases |
|
(738 |
) |
|
(307 |
) |
||
| Member distributions |
|
(15,000 |
) |
|
(15,000 |
) |
||
| Net cash provided by (used in) financing activities |
|
277,351 |
|
|
(23,294 |
) |
||
| Net increase (decrease) in cash and cash equivalents |
|
270,646 |
|
|
(8,710 |
) |
||
| Cash and cash equivalents, beginning of period |
|
82,010 |
|
|
90,720 |
|
||
| Cash and cash equivalents, end of period | $ |
352,656 |
|
$ |
82,010 |
|
||
Atlas Energy Solutions Inc. |
||||||
Condensed Consolidated Balance Sheets |
||||||
($ in thousands) |
||||||
| As of | As of | |||||
| March 31, 2023 | December 31, 2022 | |||||
| (unaudited) | ||||||
| Assets | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ |
352,656 |
$ |
82,010 |
||
| Accounts receivable, including related parties |
|
95,112 |
|
74,392 |
||
| Inventories, prepaid expenses and other current assets |
|
22,886 |
|
22,329 |
||
| Total Current Assets |
|
470,654 |
|
178,731 |
||
| Property, plant and equipment, net |
|
601,964 |
|
541,524 |
||
| ROU Assets |
|
29,151 |
|
23,222 |
||
| Other long-term assets |
|
2,099 |
|
7,522 |
||
| Total Assets | $ |
1,103,868 |
$ |
750,999 |
||
| Liabilities, redeemable noncontrolling interest and stockholders’ and members’ equity | ||||||
| Current liabilities: | ||||||
| Accounts payable, including related parties | $ |
34,512 |
$ |
31,799 |
||
| Accrued liabilities and other current liabilities |
|
44,616 |
|
36,289 |
||
| Current portion of long-term debt |
|
25,102 |
|
20,586 |
||
| Total Current Liabilities |
|
104,230 |
|
88,674 |
||
| Long-term debt, net of discount and deferred financing costs |
|
114,018 |
|
126,588 |
||
| Deferred tax liabilities |
|
23,467 |
|
1,906 |
||
| Other long-term liabilities |
|
27,733 |
|
22,474 |
||
| Total Liabilities |
|
269,448 |
|
239,642 |
||
| Redeemable noncontrolling interest |
|
777,955 |
|
- |
||
| Total stockholders' and members' equity |
|
56,465 |
|
511,357 |
||
| Total liabilities, redeemable noncontrolling interest and stockholders’ and members’ equity | $ |
1,103,868 |
$ |
750,999 |
||
Non-GAAP Financial Measures
Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Free Cash Flow, Adjusted Free Cash Flow Margin, Adjusted Free Cash Flow Conversion and Maintenance Capital Expenditures are non-GAAP supplemental financial measures used by our management and by external users of our financial statements such as investors, research analysts and others, in the case of Adjusted EBITDA, to assess our operating performance on a consistent basis across periods by removing the effects of development activities, provide views on capital resources available to organically fund growth projects and, in the case of Adjusted Free Cash Flow, assess the financial performance of our assets and their ability to sustain dividends or reinvest to organically fund growth projects over the long term without regard to financing methods, capital structure, or historical cost basis.
These measures do not represent and should not be considered alternatives to, or more meaningful than, net income, income from operations, net cash provided by operating activities or any other measure of financial performance presented in accordance with GAAP as measures of our financial performance. Adjusted EBITDA and Adjusted Free Cash Flow have important limitations as analytical tools because they exclude some but not all items that affect net income, the most directly comparable GAAP financial measure. Our computation of Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Free Cash Flow, Adjusted Free Cash Flow Margin, Adjusted Free Cash Flow Conversion and Maintenance Capital Expenditures may differ from computations of similarly titled measures of other companies.
Non-GAAP Measure Definitions:
- We define Adjusted EBITDA as net income (loss) before depreciation, depletion and accretion, interest expense, income tax expense, stock and unit-based compensation, gain (loss) on extinguishment of debt and unrealized commodity derivative gain (loss). Management believes Adjusted EBITDA is useful because it allows management to more effectively evaluate the Company’s operating performance and compare the results of its operations from period to period and against our peers without regard to financing method or capital structure. We exclude the items listed above from net income in arriving at Adjusted EBITDA because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired.
- We define Adjusted EBITDA Margin as Adjusted EBITDA divided by total sales.
- We define Adjusted Free Cash Flow as Adjusted EBITDA less Maintenance Capital Expenditures. Management believes that Adjusted Free Cash Flow is useful to investors as it provides a measure of the ability of our business to generate cash.
- We define Adjusted Free Cash Flow Margin as Adjusted Free Cash Flow divided by total sales.
- We define Adjusted Free Cash Flow Conversion as Adjusted Free Cash Flow divided by Adjusted EBITDA.
- We define Maintenance Capital Expenditures as capital expenditures excluding growth capital expenditures.
Atlas Energy Solutions Inc. – Supplemental Information |
||||||
Reconciliation of Adjusted EBITDA and Adjusted Free Cash Flow to Net Income |
||||||
(unaudited, $ in thousands) |
||||||
| For the Three Months Ended | ||||||
| March 31, | December 31, | |||||
2023 |
2022 |
|||||
| (unaudited, $ in thousand) | ||||||
| Net income | $ |
62,905 |
$ |
62,583 |
||
| Depreciation, depletion and accretion expense |
|
8,808 |
|
8,089 |
||
| Interest expense |
|
4,021 |
|
3,993 |
||
| Income tax expense |
|
7,677 |
|
434 |
||
| EBITDA |
|
83,411 |
|
75,099 |
||
| Stock and unit-based compensation expense |
|
622 |
|
135 |
||
| Unrealized commodity derivative gain |
|
- |
|
1 |
||
| Adjusted EBITDA |
|
84,033 |
|
75,235 |
||
| Maintenance Capital Expenditures |
|
7,114 |
|
8,186 |
||
| Adjusted Free Cash Flow | $ |
76,919 |
$ |
67,049 |
||
Atlas Energy Solutions Inc. – Supplemental Information |
||||||||
Reconciliation of Adjusted Free Cash Flow to Net Cash Provided by Operating Activities |
||||||||
(unaudited, $ in thousands) |
||||||||
| For the Three Months Ended | ||||||||
March 31, |
December 31, |
|||||||
2023 |
2022 |
|||||||
| (unaudited, $ in thousand) | ||||||||
| Net cash provided by operating activities | $ |
54,235 |
|
$ |
50,012 |
|
||
| Current income tax expense (1) |
|
3,869 |
|
|
436 |
|
||
| Change in operating assets and liabilities |
|
22,319 |
|
|
21,410 |
|
||
| Cash interest expense (1) |
|
3,816 |
|
|
3,764 |
|
||
| Maintenance Capital Expenditures |
|
(7,114 |
) |
|
(8,186 |
) |
||
| Other |
|
(206 |
) |
|
(387 |
) |
||
| Adjusted Free Cash Flow | $ |
76,919 |
|
$ |
67,049 |
|
||
| Adjusted EBITDA Margin |
|
55 |
% |
|
50 |
% |
||
| Adjusted Free Cash Flow Margin |
|
50 |
% |
|
45 |
% |
||
| Adjusted Free Cash Flow Conversion |
|
92 |
% |
|
89 |
% |
||
(1) |
A reconciliation of the adjustment of these items used to calculate Adjusted Free Cash Flow to the Consolidated Financial Statements is included below. |
Atlas Energy Solutions Inc. – Supplemental Information |
||||||||
Reconciliation of Maintenance Capital Expenditures to Purchase of Property, Plant and Equipment |
||||||||
(unaudited, $ in thousands) |
||||||||
| For the Three Months Ended | ||||||||
| March 31, | December 31, | |||||||
2023 |
2022 |
|||||||
| (unaudited, $ in thousand) | ||||||||
| Maintenance capital expenditures, accrual basis reconciliation: | ||||||||
| Purchase of property, plant and equipment | $ |
60,940 |
|
$ |
35,428 |
|
||
| Changes in operating assets and liabilities associated with investing activities (1) |
|
6,811 |
|
|
6,031 |
|
||
| Less: Growth capital expenditures |
|
(60,637 |
) |
|
(33,273 |
) |
||
| Maintenance Capital Expenditures, accrual basis | $ |
7,114 |
|
$ |
8,186 |
|
||
(1) |
Positive working capital changes reflect capital expenditures in the current period that will be paid in a future period. Negative working capital changes reflect capital expenditures incurred in a prior period but paid during the period presented. |
Atlas Energy Solutions Inc. – Supplemental Information |
|||||||
Reconciliation of Current Income Tax Expense to Income Tax Expense |
|||||||
(unaudited, $ in thousands) |
|||||||
For the Three Months Ended |
|||||||
March 31, |
December 31, |
||||||
2023 |
2022 |
||||||
| (unaudited, $ in thousand) | |||||||
| Current tax expense reconciliation | |||||||
| Income tax expense | $ |
7,677 |
|
$ |
434 |
||
| Less: deferred tax liabilities |
|
(3,808 |
) |
|
2 |
||
| Current income tax expense | $ |
3,869 |
|
$ |
436 |
||
Atlas Energy Solutions Inc. – Supplemental Information |
||||||||
Cash Interest Expense to Income Expense, Net |
||||||||
(unaudited, $ in thousands) |
||||||||
| For the Three Months Ended | ||||||||
| March 31, | December 31, | |||||||
2023 |
2022 |
|||||||
| (unaudited, $ in thousand) | ||||||||
| Cash interest expense reconciliation | ||||||||
| Interest expense, net | $ |
3,442 |
|
$ |
3,990 |
|
||
| Less: Amortization of debt discount |
|
(118 |
) |
|
(119 |
) |
||
| Less: Amortization of deferred financing costs |
|
(87 |
) |
|
(110 |
) |
||
| Less: Interest income |
|
579 |
|
|
3 |
|
||
| Cash interest expense | $ |
3,816 |
|
$ |
3,764 |
|
||
View source version on businesswire.com: https://www.businesswire.com/news/home/20230508005684/en/
Investor Contact
Kyle Turlington
T: 512-220-1200
IR@atlas.energy
Source: Atlas Energy Solutions Inc.
