Aris Water Solutions, Inc. Reports Second Quarter 2023 Results
- Strong Q2 2023 results with increased volumes and net income
- Revised 2023 outlook for Adjusted EBITDA
- Increased capital expenditures for future growth
- Positive outlook for steady growth
- Recipient of Hart Energy's 2023 ESG Award
- Strong balance sheet and liquidity
- Q3 dividend declared
- None.
-
Total water volumes of approximately 1.5 million barrels per day for the second quarter of 2023, up
21% versus the second quarter of 2022 and up9% sequentially versus the first quarter of 2023. -
Produced Water volumes of approximately 1,045 thousand barrels per day for the second quarter of 2023, up
24% versus the second quarter of 2022 and up8% sequentially versus the first quarter of 2023. -
Water Solutions volumes of approximately 452 thousand barrels per day for the second quarter of 2023, up
13% versus the second quarter of 2022 and up12% sequentially versus the first quarter of 2023. -
Net income of
$10.4 million 158% versus the second quarter of 2022 and up35% sequentially versus the first quarter of 2023. Adjusted Net Income1 of$13.2 million 11% versus the second quarter of 2022 and up34% sequentially versus the first quarter of 2023. -
Adjusted EBITDA1 of
$42.6 million 14% versus the second quarter of 2022 and up12% sequentially versus the first quarter of 2023. -
Aris is revising its 2023 outlook for Adjusted EBITDA upward from
$150 million $170 million $160 million $170 million -
Our contracted customers remain active drilling and completing wells across our acreage dedications. To support additional customer activity planned for late 2023 and 2024, we are raising our guidance for 2023 capital expenditures from
$140 million $155 million $160 million $170 million
“We delivered a strong second quarter, achieving both
“The entire Aris team is performing extremely well in identifying additional opportunities to expand our infrastructure network, optimize our operating costs, and improve our cash management activities. We are appreciative of our team’s continued focus and effort.
The second quarter also benefited from a few one-time events, including the receipt of deficiency payments under our minimum volume commitments that drove higher margins, the delay of certain maintenance expenses into the third quarter due to supply chain constraints, and lower than anticipated general & administrative expenses. As a result, we expect third quarter Adjusted EBITDA1 to be relatively flat sequentially. However, we expect to see our volumes increase and Adjusted EBITDA1 grow over second quarter levels in the fourth quarter.
The quality of our customers, well economics, and undrilled inventory on our contracted acreage continues to provide Aris with compelling support for steady growth. Some of our large customers have recently indicated they are increasing production more than previously forecasted in our contracted acreage, particularly in our core
Aris is beginning to actively test promising beneficial re-use treatment technologies in the field and looks forward to the progress of its pilot programs over the next several quarters. We continue working with regulators, our customers, and different industries in identifying opportunities to use treated produced water. Additionally, we earned Hart Energy’s 2023 ESG Award for public midstream companies earlier this quarter, which recognizes the impact we have made on water sustainability in the Permian Basin.
We are also pleased to announce that Dr. Eric Hoek will be joining us as an advisor to focus specifically on the recovery and commercialization of high-value materials in our brine stream. Dr. Hoek, an engineering professor at UCLA and a faculty scientist at the Lawrence Berkeley National Laboratory, is a globally recognized leader in developing and commercializing water technologies and will be a valuable addition to our team.”
OPERATIONS UPDATE
For the second quarter of 2023, the Company handled approximately 1.5 million barrels of total water volumes per day, up approximately
Recycled Produced Water volumes were approximately 296 thousand barrels of water per day for the second quarter of 2023, approximately flat from 297 thousand barrels of water per day for the second quarter of 2022, and up approximately
Groundwater volumes were approximately 156 thousand barrels of water per day for the second quarter of 2023, up approximately
FINANCIAL UPDATE
Net income was
Adjusted EBITDA1 was
The Company had gross margin per barrel of
Second quarter 2023 capital expenditures3 totaled approximately
STRONG BALANCE SHEET AND LIQUIDITY
As of June 30, 2023, the Company had approximately
THIRD QUARTER 2023 DIVIDEND
On August 2, 2023, Aris’s Board of Directors declared a dividend on its Class A common stock for the third quarter of 2023 of
THIRD QUARTER 2023 AND REVISED FULL YEAR 2023 FINANCIAL OUTLOOK
“Our volumes have grown steadily, exceeding our expectations in the first half of the year. In the third quarter, we expect produced water and water solutions volumes to be flat to slightly down sequentially, reflecting the timing of completions across our acreage, as we expect third quarter completions to be weighted toward the second half of the quarter. We anticipate a strong finish to the year as fourth quarter produced water volumes are forecasted to exceed those realized in the second quarter,” said Amanda Brock. “We continue to forecast skim oil recovery at normalized levels of approximately
-
For the third quarter of 2023, the Company expects:
- Produced Water Handling volumes between 1,020 and 1,030 thousand barrels of water per day
- Water Solutions volumes between 375 and 390 thousand barrels of water per day
-
Adjusted Operating Margin per Barrel2 between
$0.38 $0.41 -
Skim oil recoveries of
0.10% of inlet produced water handling volumes at an average WTI price of$74 -
Adjusted EBITDA1 between
$39 $42 million
- For the full year of 2023, Aris is updating its previously provided guidance to reflect higher than anticipated volume growth through the first half of 2023 as well as additional capital investment to accommodate further growth anticipated in late 2023 and early 2024
-
For the full year of 2023, the Company now expects:
- Produced Water Handling volumes between 1,020 and 1,030 thousand barrels of water per day
- Water Solutions volumes between 400 and 410 thousand barrels of water per day
-
Adjusted Operating Margin per Barrel2 between
$0.39 $0.40 -
Skim oil recoveries of
0.10% of inlet produced water handling volumes at an average WTI price of$74 -
Adjusted EBITDA1 between
$160 $170 million $150 $170 million -
Capital Expenditures between
$160 $170 million $140 $155 million -
Incremental capital expenditures to the prior outlook include:
-
Approximately
$10 million -
Approximately
$5 million
-
Approximately
-
Incremental capital expenditures to the prior outlook include:
| ______________________________ |
1 Adjusted EBITDA and Adjusted Net Income are non-GAAP financial measures. See the supplementary schedules in this press release for a discussion of how we define and calculate Adjusted EBITDA and Adjusted Net Income and a reconciliation thereof to net income, the most directly comparable GAAP measure. |
2 Adjusted Operating Margin per Barrel is a non-GAAP financial measure. See the supplementary schedules in this press release for a discussion of how we define and calculate Adjusted Operating Margin per Barrel and a reconciliation thereof to gross margin, the most directly comparable GAAP measure. |
3 Calculated on capital costs incurred during the period, excluding the impact of working capital. |
4 Defined as net debt as of 6/30/2023 divided by annualized 2Q 2023 Adjusted EBITDA. Net debt is calculated as total debt less cash and cash equivalents. |
CONFERENCE CALL
Aris will host a conference call to discuss its second quarter 2023 results on Thursday, August 3, 2023, at 8:00 a.m. Central Time (9:00 a.m. Eastern Time).
Participants should call (877) 407-5792 and refer to Aris Water Solutions, Inc. when dialing in. 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, www.ariswater.com.
An audio replay of the conference call will be available shortly after the conclusion of the call and will remain available for approximately fourteen days. The replay can be accessed by dialing (877) 660-6853 within
About Aris Water Solutions, Inc.
Aris Water Solutions, Inc. is a leading, growth-oriented environmental infrastructure and solutions company that directly helps its customers reduce their water and carbon footprints. Aris Water delivers full-cycle water handling and recycling solutions that increase the sustainability of energy company operations. Its integrated pipelines and related infrastructure create long-term value by delivering high-capacity, comprehensive produced water management, recycling and supply solutions to operators in the core areas of the Permian Basin.
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, those regarding the Company’s business strategy, its industry, its future profitability and our projected guidance for 2023, the various risks and uncertainties associated with the extraordinary inflationary environment and impacts resulting from 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 and the Company’s future business and financial performance and our ability to identify strategic acquisitions and realize benefits therefrom. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “guidance,” “preliminary,” “project,” “estimate,” “outlook,” “budget,” “expect,” “continue,” “will,” “intend,” “plan,” “targets,” “believe,” “forecast,” “future,” “potential,” “may,” “possible,” “should,” “could” and variations of such words or similar expressions. Forward-looking statements are based on the Company’s current expectations and assumptions regarding its 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, the Company’s actual results may differ materially from those contemplated by the forward-looking statements, including our projected guidance for 2023. Factors that could cause the Company’s actual results to differ materially from the results contemplated by such forward-looking statements include, but are not limited to the risk factors discussed or referenced in its filings made from time to time with the
Table 1 Aris Water Solutions, Inc. Condensed Consolidated Statements of Operations (Unaudited) |
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
(in thousands, except for share and per share amounts) |
|
June 30, |
|
June 30, |
||||||||||||
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
Revenue |
|
|
|
|
||||||||||||
Produced Water Handling |
$ |
49,716 |
|
$ |
35,525 |
$ |
95,816 |
$ |
70,625 |
|
||||||
Produced Water Handling—Affiliate |
|
23,181 |
|
|
23,207 |
|
|
46,321 |
|
|
44,288 |
|
||||
Water Solutions |
|
14,928 |
|
|
14,708 |
|
|
28,810 |
|
|
26,352 |
|
||||
Water Solutions—Affiliate |
|
8,163 |
|
|
2,828 |
|
|
16,147 |
|
|
5,972 |
|
||||
Other Revenue |
|
645 |
|
|
118 |
|
|
1,110 |
|
|
118 |
|
||||
Total Revenue |
|
96,633 |
|
|
76,386 |
|
|
188,204 |
|
|
147,355 |
|
||||
Cost of Revenue |
|
|
|
|
||||||||||||
Direct Operating Costs |
|
44,446 |
|
|
30,781 |
|
|
88,291 |
|
|
57,452 |
|
||||
Depreciation, Amortization and Accretion |
|
19,086 |
|
|
16,203 |
|
|
37,692 |
|
|
32,782 |
|
||||
Total Cost of Revenue |
|
63,532 |
|
|
46,984 |
|
|
125,983 |
|
|
90,234 |
|
||||
Operating Costs and Expenses |
|
|
|
|
||||||||||||
Abandoned Well Costs |
|
— |
|
|
5,415 |
|
|
— |
|
|
5,415 |
|
||||
General and Administrative |
|
12,682 |
|
|
11,567 |
|
|
24,481 |
|
|
22,278 |
|
||||
Impairment of Long-Lived Assets |
|
— |
|
|
— |
|
|
— |
|
|
15,597 |
|
||||
Research and Development Expense |
|
650 |
|
|
81 |
|
|
1,058 |
|
|
100 |
|
||||
Other Operating (Income) Expense |
|
(192 |
) |
|
513 |
|
|
25 |
|
|
1,577 |
|
||||
Total Operating Expenses |
|
13,140 |
|
|
17,576 |
|
|
25,564 |
|
|
44,967 |
|
||||
Operating Income |
|
19,961 |
|
|
11,826 |
|
|
36,657 |
|
|
12,154 |
|
||||
Other Expense |
|
|
|
|
||||||||||||
Interest Expense, Net |
|
7,971 |
|
|
7,315 |
|
|
15,632 |
|
|
15,100 |
|
||||
Income (Loss) Before Income Taxes |
|
11,990 |
|
|
4,511 |
|
|
21,025 |
|
|
(2,946 |
) |
||||
Income Tax Expense (Benefit) |
|
1,559 |
|
|
472 |
|
|
2,886 |
|
|
(368 |
) |
||||
Net Income (Loss) |
|
10,431 |
|
|
4,039 |
|
|
18,139 |
|
|
(2,578 |
) |
||||
Net Income (Loss) Attributable to Noncontrolling Interest |
|
5,733 |
|
|
2,645 |
|
|
10,063 |
|
|
(1,750 |
) |
||||
Net Income (Loss) Attributable to Aris Water Solutions, Inc. |
$ |
4,698 |
|
$ |
1,394 |
|
$ |
8,076 |
|
$ |
(828 |
) |
||||
|
|
|
|
|
||||||||||||
Net Income (Loss) Per Share of Class A Common Stock |
|
|
|
|
||||||||||||
Basic |
$ |
0.15 |
|
$ |
0.06 |
|
$ |
0.25 |
|
$ |
(0.05 |
) |
||||
Diluted |
$ |
0.15 |
|
$ |
0.05 |
|
$ |
0.25 |
|
$ |
(0.05 |
) |
||||
Weighted Average Shares of Class A Common Stock Outstanding |
|
|
|
|
||||||||||||
Basic |
|
30,036,593 |
|
|
21,984,313 |
|
|
29,985,869 |
|
|
21,918,639 |
|
||||
Diluted |
|
30,036,593 |
|
|
22,101,106 |
|
|
29,985,869 |
|
|
21,918,639 |
|
||||
Table 2 Aris Water Solutions, Inc. Condensed Consolidated Balance Sheets (Unaudited) |
||||||||
|
|
|
|
|
||||
(in thousands, except for share and per share amounts) |
|
June 30, |
|
December 31, |
||||
|
|
2023 |
|
2022 |
||||
Assets |
|
|
||||||
Cash |
$ |
4,016 |
|
$ |
1,122 |
|
||
Accounts Receivable, Net |
|
66,586 |
|
|
81,683 |
|
||
Accounts Receivable from Affiliate |
|
27,721 |
|
|
46,029 |
|
||
Other Receivables |
|
8,732 |
|
|
4,354 |
|
||
Prepaids and Deposits |
|
4,222 |
|
|
5,805 |
|
||
Assets Held for Sale |
|
17,777 |
|
|
— |
|
||
Total Current Assets |
|
129,054 |
|
|
138,993 |
|
||
Fixed Assets |
|
|
||||||
Property, Plant and Equipment |
|
982,857 |
|
|
907,784 |
|
||
Accumulated Depreciation |
|
(102,578 |
) |
|
(88,681 |
) |
||
Total Property, Plant and Equipment, Net |
|
880,279 |
|
|
819,103 |
|
||
Intangible Assets, Net |
|
250,942 |
|
|
269,845 |
|
||
Goodwill |
|
34,585 |
|
|
34,585 |
|
||
Deferred Income Tax Assets, Net |
|
27,670 |
|
|
30,424 |
|
||
Right-of-Use Assets |
|
9,165 |
|
|
9,135 |
|
||
Other Assets |
|
998 |
|
|
1,281 |
|
||
Total Assets |
$ |
1,332,693 |
|
$ |
1,303,366 |
|
||
Liabilities and Stockholders' Equity |
|
|
||||||
Accounts Payable |
$ |
36,718 |
|
$ |
22,982 |
|
||
Payables to Affiliate |
|
2,443 |
|
|
3,021 |
|
||
Accrued and Other Current Liabilities |
|
73,699 |
|
|
65,411 |
|
||
Total Current Liabilities |
|
112,860 |
|
|
91,414 |
|
||
Long-Term Debt, Net of Debt Issuance Costs |
|
423,856 |
|
|
428,921 |
|
||
Asset Retirement Obligation |
|
18,051 |
|
|
17,543 |
|
||
Tax Receivable Agreement Liability |
|
98,093 |
|
|
97,980 |
|
||
Other Long-Term Liabilities |
|
10,467 |
|
|
10,421 |
|
||
Total Liabilities |
|
663,327 |
|
|
646,279 |
|
||
Commitments and Contingencies |
|
|
||||||
Stockholders' Equity |
|
|
||||||
Preferred Stock |
|
— |
|
|
— |
|
||
Class A Common Stock |
|
302 |
|
|
300 |
|
||
Class B Common Stock |
|
276 |
|
|
276 |
|
||
Treasury Stock (at Cost), 239,055 shares as of June 30, 2023; 196,762 shares as of December 31, 2022 |
|
(3,490 |
) |
|
(2,891 |
) |
||
Additional Paid-in-Capital |
|
323,799 |
|
|
319,545 |
|
||
Accumulated Deficit |
|
(5,291 |
) |
|
(7,722 |
) |
||
Total Stockholders' Equity Attributable to Aris Water Solutions, Inc. |
|
315,596 |
|
|
309,508 |
|
||
Noncontrolling Interest |
|
353,770 |
|
|
347,579 |
|
||
Total Stockholders' Equity |
|
669,366 |
|
|
657,087 |
|
||
Total Liabilities and Stockholders' Equity |
$ |
1,332,693 |
|
$ |
1,303,366 |
|
||
Table 3 Aris Water Solutions, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) |
||||||||
|
|
|
|
|
||||
|
|
Six Months Ended |
||||||
(in thousands) |
|
June 30, |
||||||
|
|
2023 |
|
2022 |
||||
Cash Flow from Operating Activities |
|
|
||||||
Net Income (Loss) |
$ |
18,139 |
|
$ |
(2,578 |
) |
||
Adjustments to reconcile Net Income (Loss) to Net Cash provided by Operating Activities: |
|
|
||||||
Deferred Income Tax Expense (Benefit) |
|
2,837 |
|
|
(384 |
) |
||
Depreciation, Amortization and Accretion |
|
37,692 |
|
|
32,782 |
|
||
Stock-Based Compensation |
|
5,585 |
|
|
5,539 |
|
||
Impairment of Long-Lived Assets |
|
— |
|
|
15,597 |
|
||
Abandoned Well Costs |
|
— |
|
|
5,415 |
|
||
Loss on Disposal of Asset, Net |
|
57 |
|
|
578 |
|
||
Amortization of Debt Issuance Costs, Net |
|
1,041 |
|
|
1,099 |
|
||
Other |
|
504 |
|
|
393 |
|
||
Changes in Operating Assets and Liabilities: |
|
|
||||||
Accounts Receivable |
|
15,097 |
|
|
(20,922 |
) |
||
Accounts Receivable from Affiliate |
|
18,308 |
|
|
(1,492 |
) |
||
Other Receivables |
|
(4,005 |
) |
|
1,021 |
|
||
Prepaids and Deposits |
|
1,583 |
|
|
1,313 |
|
||
Accounts Payable |
|
(1,001 |
) |
|
(2,201 |
) |
||
Payables to Affiliate |
|
(578 |
) |
|
620 |
|
||
Accrued Liabilities and Other |
|
1,208 |
|
|
477 |
|
||
Net Cash Provided by Operating Activities |
|
96,467 |
|
|
37,257 |
|
||
|
|
|
||||||
Cash Flow from Investing Activities |
|
|
||||||
Property, Plant and Equipment Expenditures |
|
(77,981 |
) |
|
(48,318 |
) |
||
Deposit on Assets Held for Sale |
|
1,750 |
|
|
— |
|
||
Net Cash Used in Investing Activities |
|
(76,231 |
) |
|
(48,318 |
) |
||
|
|
|
||||||
Cash Flow from Financing Activities |
|
|
||||||
Dividends and Distributions Paid |
|
(10,743 |
) |
|
(13,859 |
) |
||
Repurchase of Shares |
|
(599 |
) |
|
— |
|
||
Repayment of Credit Facility |
|
(36,000 |
) |
|
— |
|
||
Proceeds from Credit Facility |
|
30,000 |
|
|
— |
|
||
Net Cash Used in Financing Activities |
|
(17,342 |
) |
|
(13,859 |
) |
||
|
|
|
||||||
Net Increase (Decrease) in Cash |
|
2,894 |
|
|
(24,920 |
) |
||
Cash, Beginning of Period |
|
1,122 |
|
|
60,055 |
|
||
Cash, End of Period |
$ |
4,016 |
|
$ |
35,135 |
|
||
Use of Non-GAAP Financial Information
The Company uses financial measures that are not calculated in accordance with
The Company calculates Adjusted EBITDA as net income (loss) plus: interest expense; income taxes; depreciation, amortization and accretion expense; abandoned well costs, asset impairment and abandoned project charges; losses on the sale of assets; transaction costs; research and development expense; loss on debt modification; stock-based compensation expense; and other non-recurring or unusual expenses or charges (such as temporary power costs, litigation expenses and severance costs), less any gains on sale of assets. For the fourth quarter of 2022, we began including research and development expense in our calculation of Adjusted EBITDA due to our new beneficial reuse pilot projects, which are discreet, non-revenue initiatives.
The Company calculates Adjusted Operating Margin as Gross Margin plus depreciation, amortization and accretion. The Company defines Adjusted Operating Margin per Barrel as Adjusted Operating Margin divided by total volumes.
The Company calculates Adjusted Net Income as Net Income (Loss) Attributable to Stockholders’ Equity plus the after-tax impacts of stock-based compensation and plus or minus the after-tax impacts of certain items affecting comparability, which are typically noncash and/or nonrecurring items. The Company calculated Diluted Adjusted Net Income Per Share as (i) Adjusted Net Income (Loss) Attributable to Stockholder’s Equity plus the after-tax impacts of stock-based compensation and plus or minus the after-tax impacts of certain items affecting comparability, which are typically noncash and/or nonrecurring items, divided by (ii) the diluted weighted-average shares of Class A common stock outstanding, assuming the full exchange of all outstanding LLC interests, adjusted for the dilutive effect of outstanding equity-based awards.
For the quarter ended June 30, 2023, the Company calculates its leverage ratio as net debt as of June 30, 2023, divided by annualized 2Q 2023 Adjusted EBITDA. Net debt is calculated as the principal amount of total debt outstanding as of June 30, 2023, less cash and cash equivalents as of June 30, 2023.
The Company believes these presentations are used by investors and professional research analysts for the valuation, comparison, rating, and investment recommendations of companies within its industry. Similarly, the Company’s management uses this information for comparative purposes as well. Adjusted EBITDA, Adjusted Operating Margin, Adjusted Operating Margin per Barrel, and Adjusted Net Income are not measures of financial performance under GAAP and should not be considered as measures of liquidity or as alternatives to net income (loss) or gross margin. Additionally, these presentations as defined by the Company may not be comparable to similarly titled measures used by other companies and should be considered in conjunction with net income (loss) and other measures prepared in accordance with GAAP, such as gross margin, operating income, net income or cash flows from operating activities.
Although we provide forecasts for the non-GAAP measures Adjusted EBITDA and Adjusted Operating Margin per Barrel, we are not able to forecast their most directly comparable measures (net income and gross margin) calculated and presented in accordance with GAAP without unreasonable effort. Certain elements of the composition of forward-looking non-GAAP metrics are not predictable, making it impractical for us to forecast. Such elements include but are not limited to non-recurring gains or losses, unusual or non-recurring items, income tax benefit or expense, or one-time transaction costs and cost of revenue, which could have a significant impact on the GAAP measures. The variability of the excluded items may have a significant, and potentially unpredictable, impact on our future GAAP results. As a result, no reconciliation of forecasted non-GAAP measures is provided.
Table 4 Aris Water Solutions, Inc. Operating Metrics (Unaudited) |
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|
|
|
|
|
||||||||
|
Three Months Ended |
Six Months Ended |
||||||||||
|
June 30, |
June 30, |
||||||||||
|
2023 |
2022 |
2023 |
2022 |
||||||||
(thousands of barrels of water per day) |
|
|
|
|
||||||||
Produced Water Handling Volumes |
|
1,045 |
|
841 |
|
1,008 |
|
822 |
||||
Water Solutions Volumes |
|
|
|
|
||||||||
Recycled Produced Water Volumes Sold |
|
296 |
|
|
297 |
|
|
277 |
|
|
285 |
|
Groundwater Volumes Sold |
|
156 |
|
|
104 |
|
|
151 |
|
|
85 |
|
Groundwater Volumes Transferred (1) |
|
— |
|
|
— |
|
|
— |
|
|
12 |
|
Total Water Solutions Volumes |
|
452 |
|
|
401 |
|
|
428 |
|
|
382 |
|
Total Volumes |
|
1,497 |
|
|
1,242 |
|
|
1,436 |
|
|
1,204 |
|
|
|
|
|
|
||||||||
Per Barrel Operating Metrics (2) |
|
|
|
|
||||||||
Produced Water Handling Revenue/Barrel |
$ |
0.77 |
|
$ |
0.77 |
|
$ |
0.78 |
|
$ |
0.77 |
|
Water Solutions Revenue/Barrel |
$ |
0.56 |
|
$ |
0.48 |
|
$ |
0.58 |
|
$ |
0.47 |
|
Revenue/Barrel of Total Volumes |
$ |
0.70 |
|
$ |
0.67 |
|
$ |
0.72 |
|
$ |
0.68 |
|
Direct Operating Costs/Barrel |
$ |
0.33 |
|
$ |
0.27 |
|
$ |
0.34 |
|
$ |
0.26 |
|
Gross Margin/Barrel |
$ |
0.24 |
|
$ |
0.26 |
|
$ |
0.24 |
|
$ |
0.26 |
|
Adjusted Operating Margin/Barrel |
$ |
0.38 |
|
$ |
0.41 |
|
$ |
0.38 |
|
$ |
0.41 |
|
|
|
|
|
|
||||||||
(1) The groundwater transfer assets were sold in Q1 2022. |
||||||||||||
(2) Per barrel operating metrics are calculated independently. Therefore, the sum of individual amounts may not equal the total presented. |
||||||||||||
Table 5 Aris Water Solutions, Inc. Reconciliation of Net Income (Loss) to Non-GAAP Adjusted EBITDA (Unaudited) |
||||||||||||
|
|
|
|
|
||||||||
|
Three Months Ended |
Six Months Ended |
||||||||||
(in thousands) |
June 30, |
June 30, |
||||||||||
|
2023 |
2022 |
2023 |
2022 |
||||||||
Net Income (Loss) |
$ |
10,431 |
|
$ |
4,039 |
$ |
18,139 |
|
$ |
(2,578 |
) |
|
Interest Expense, Net |
|
7,971 |
|
|
7,315 |
|
|
15,632 |
|
|
15,100 |
|
Income Tax Expense (Benefit) |
|
1,559 |
|
|
472 |
|
|
2,886 |
|
|
(368 |
) |
Depreciation, Amortization and Accretion |
|
19,086 |
|
|
16,203 |
|
|
37,692 |
|
|
32,782 |
|
Abandoned Well Costs |
|
— |
|
|
5,415 |
|
|
— |
|
|
5,415 |
|
Impairment of Long-Lived Assets |
|
— |
|
|
— |
|
|
— |
|
|
15,597 |
|
Stock-Based Compensation |
|
3,117 |
|
|
3,202 |
|
|
5,585 |
|
|
5,539 |
|
Loss on Disposal of Asset, Net |
|
70 |
|
|
24 |
|
|
57 |
|
|
578 |
|
Transaction Costs |
|
100 |
|
|
425 |
|
|
145 |
|
|
933 |
|
Research and Development Expense |
|
650 |
|
|
81 |
|
|
1,058 |
|
|
100 |
|
Other |
|
(362 |
) |
|
64 |
|
|
(466 |
) |
|
66 |
|
Adjusted EBITDA |
$ |
42,622 |
|
$ |
37,240 |
|
$ |
80,728 |
|
$ |
73,164 |
|
Table 6 Aris Water Solutions, Inc. Reconciliation of Gross Margin to Adjusted Operating Margin and Adjusted Operating Margin per Barrel (Unaudited) |
||||||||||||
|
|
|
|
|
||||||||
|
Three Months Ended |
Six Months Ended |
||||||||||
(in thousands) |
June 30, |
June 30, |
||||||||||
|
2023 |
2022 |
2023 |
2022 |
||||||||
Total Revenue |
$ |
96,633 |
|
$ |
76,386 |
|
$ |
188,204 |
|
$ |
147,355 |
|
Cost of Revenue |
|
(63,532 |
) |
|
(46,984 |
) |
|
(125,983 |
) |
|
(90,234 |
) |
Gross Margin |
|
33,101 |
|
|
29,402 |
|
|
62,221 |
|
|
57,121 |
|
Depreciation, Amortization and Accretion |
|
19,086 |
|
|
16,203 |
|
|
37,692 |
|
|
32,782 |
|
Adjusted Operating Margin |
$ |
52,187 |
|
$ |
45,605 |
|
$ |
99,913 |
|
$ |
89,903 |
|
Total Volumes (Thousands of BBLs) |
|
136,282 |
|
|
113,042 |
|
|
260,097 |
|
|
218,048 |
|
Adjusted Operating Margin/BBL |
$ |
0.38 |
|
$ |
0.41 |
|
$ |
0.38 |
|
$ |
0.41 |
|
Table 7 Aris Water Solutions, Inc. Reconciliation of Net Income (Loss) to Non-GAAP Adjusted Net Income (Unaudited) |
||||||||||||
|
|
|
|
|
||||||||
|
Three Months Ended |
Six Months Ended |
||||||||||
(in thousands) |
June 30, |
June 30, |
||||||||||
|
2023 |
2022 |
2023 |
2022 |
||||||||
Net Income (Loss) |
$ |
10,431 |
|
$ |
4,039 |
|
$ |
18,139 |
|
$ |
(2,578 |
) |
Adjusted items: |
|
|
|
|
||||||||
Impairment of Long-Lived Assets |
|
— |
|
|
— |
|
|
— |
|
|
15,597 |
|
Abandoned Well Costs |
|
— |
|
|
5,415 |
|
|
— |
|
|
5,415 |
|
Loss on Disposal of Asset, Net |
|
70 |
|
|
24 |
|
|
57 |
|
|
578 |
|
Stock-Based Compensation |
|
3,117 |
|
|
3,202 |
|
|
5,585 |
|
|
5,539 |
|
Tax Effect of Adjusting Items (1) |
|
(419 |
) |
|
(786 |
) |
|
(741 |
) |
|
(2,536 |
) |
Adjusted Net Income |
$ |
13,199 |
|
$ |
11,894 |
|
$ |
23,040 |
|
$ |
22,015 |
|
|
|
|
|
|
||||||||
(1) Estimated tax effect of adjusted items allocated to Aris based on statutory rates. |
||||||||||||
Table 8 Aris Water Solutions, Inc. Reconciliation of Diluted Net Income Per Share to Non-GAAP Diluted Adjusted Net Income Per Share (Unaudited) |
||||||
|
|
|
||||
|
Three Months Ended |
Six Months Ended |
||||
|
June 30, |
June 30, |
||||
|
2023 |
2023 |
||||
Diluted Net Income Per Share of Class A Common Stock |
$ |
0.15 |
|
$ |
0.25 |
|
Adjusted items: |
|
|
||||
Reallocation of Net Income (Loss) Attributable to Noncontrolling Interests From the Assumed Exchange of LLC Interests |
|
0.03 |
|
|
0.05 |
|
Stock-Based Compensation |
|
0.05 |
|
|
0.10 |
|
Tax Effect of Adjusting Items (1) |
|
(0.01 |
) |
|
(0.01 |
) |
Diluted Adjusted Net Income Per Share |
$ |
0.22 |
|
$ |
0.39 |
|
|
|
|
||||
(1) Estimated tax effect of adjusted items allocated to Aris based on statutory rates. |
||||||
|
|
|
||||
|
|
|
||||
Diluted Weighted Average Shares of Class A Common Stock Outstanding |
|
30,036,593 |
|
|
29,985,869 |
|
Adjusted Items: |
|
|
||||
Assumed Redemption of LLC Interests |
|
27,554,393 |
|
|
27,561,348 |
|
Dilutive Performance-Based Stock Units (2) |
|
— |
|
|
— |
|
Diluted Adjusted Fully Weighted Average Shares of Class A Common Stock Outstanding |
|
57,590,986 |
|
|
57,547,217 |
|
|
|
|
||||
(2) Dilutive impact of Performance-Based Stock Units already included for the three and six months ended June 30, 2023. |
||||||
Table 9 Aris Water Solutions, Inc. Computation of Leverage Ratio (Unaudited) |
|||
|
|
||
|
As of |
||
|
June 30, |
||
(in thousands) |
2023 |
||
|
|
||
Principal Amount of Debt at June 30, 2023 |
$ |
429,000 |
|
Less: Cash at June 30, 2023 |
|
(4,016 |
) |
Net Debt |
$ |
424,984 |
|
|
|
||
Adjusted EBITDA for the Three Months Ended June 30, 2023 |
$ |
42,622 |
|
x 4 Quarters |
|
x 4 |
|
Annualized Adjusted EBITDA |
$ |
170,488 |
|
|
|
||
Net Debt |
$ |
424,984 |
|
÷ Annualized Adjusted EBITDA |
$ |
170,488 |
|
Leverage Ratio |
|
2.49 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20230802903998/en/
David Tuerff
Senior Vice President, Finance and Investor Relations
(281) 501-3070
IR@ariswater.com
Source: Aris Water Solutions, Inc.
