Aris Water Solutions, Inc. Reports Second Quarter 2024 Results, Increases Full Year Adjusted EBITDA Guidance
Aris Water Solutions (NYSE: ARIS) reported strong Q2 2024 results, with net income increasing 26% to $13.1 million and Adjusted EBITDA rising 17% to $50.0 million compared to Q2 2023. The company saw a 5% increase in produced water volumes and a 6% rise in recycled water volumes. Aris achieved a Gross Margin per barrel of $0.31 and an Adjusted Operating Margin per barrel of $0.46, a 21% increase year-over-year. The company maintained a strong balance sheet with a leverage ratio of 2.2x and $299 million in available liquidity. Based on strong performance, Aris increased its 2024 Adjusted EBITDA guidance to $195-$205 million. The company also announced plans for an iodine extraction facility in the Permian Basin, expected to be operational by year-end 2025.
Aris Water Solutions (NYSE: ARIS) ha riportato risultati positivi per il Q2 2024, con un aumento del 26% dell'utile netto a 13,1 milioni di dollari e un aumento del 17% dell'EBITDA rettificato a 50,0 milioni di dollari rispetto al Q2 2023. L'azienda ha registrato un incremento del 5% nei volumi di acqua prodotta e un aumento del 6% nei volumi di acqua riciclata. Aris ha raggiunto un Margine lordo per barile di 0,31 dollari e un Margine operativo rettificato per barile di 0,46 dollari, con un aumento del 21% rispetto all'anno precedente. L'azienda ha mantenuto un bilancio solido con un rapporto di indebitamento di 2,2x e 299 milioni di dollari in liquidità disponibile. Grazie a performance solide, Aris ha aumentato la sua guideline per l'EBITDA rettificato 2024 a 195-205 milioni di dollari. La società ha anche annunciato piani per un impianto di estrazione di iodio nel Permian Basin, previsto per essere operativo entro la fine del 2025.
Aris Water Solutions (NYSE: ARIS) reportó resultados sólidos para el Q2 2024, con un aumento del 26% en los ingresos netos a 13.1 millones de dólares y un incremento del 17% en el EBITDA ajustado a 50.0 millones de dólares en comparación con el Q2 2023. La compañía vio un aumento del 5% en los volúmenes de agua producida y un incremento del 6% en los volúmenes de agua reciclada. Aris logró un Margen bruto por barril de 0.31 dólares y un Margen operativo ajustado por barril de 0.46 dólares, un aumento del 21% interanual. La empresa mantuvo un balance sólido con una relación de apalancamiento de 2.2x y 299 millones de dólares en liquidez disponible. Basándose en un desempeño sólido, Aris aumentó su guía de EBITDA ajustado 2024 a 195-205 millones de dólares. La compañía también anunció planes para una instalación de extracción de yodo en la Cuenca Permian, que se espera que esté operativa para finales de 2025.
Aris Water Solutions (NYSE: ARIS)는 2024년 2분기에 강력한 실적을 보고했으며, 순이익이 26% 증가하여 1310만 달러에 이르고, 조정 EBITDA가 17% 상승하여 5000만 달러에 도달했습니다. 이 회사는 생산된 물의 양이 5% 증가하고 재활용된 물의 양이 6% 증가했습니다. Aris는 배럴당 0.31달러의 총 마진과 배럴당 0.46달러의 조정 운영 마진을 달성했으며, 이는 전년 대비 21% 증가한 수치입니다. 이 회사는 2.2배의 부채 비율과 2억 9900만 달러의 가용 유동성을 유지하며 강력한 재무 구조를 유지하고 있습니다. 강력한 실적을 바탕으로 Aris는 2024년 조정 EBITDA 가이던스를 1억 9500만~2억 500만 달러로 상향 조정했습니다. 회사는 또한 2025년 말까지 가동될 예정인 Permian Basin의 요오드 추출 시설 계획을 발표했습니다.
Aris Water Solutions (NYSE: ARIS) a déclaré de solides résultats pour le 2ème trimestre 2024, avec un revenu net en augmentation de 26% à 13,1 millions de dollars et un EBITDA ajusté en hausse de 17% à 50,0 millions de dollars par rapport au 2ème trimestre 2023. L'entreprise a connu une augmentation de 5% des volumes d'eau produite et une hausse de 6% des volumes d'eau recyclée. Aris a atteint un marge brute par baril de 0,31 dollar et un marge opérationnelle ajustée par baril de 0,46 dollar, ce qui correspond à une augmentation de 21% par rapport à l'année précédente. L'entreprise a maintenu un bilan solide avec un ratio d'endettement de 2,2x et 299 millions de dollars de liquidités disponibles. Sur la base de cette performance solide, Aris a relevé sa prévision d'EBITDA ajusté pour 2024 entre 195 et 205 millions de dollars. La société a également annoncé des projets pour une installation d'extraction d'iode dans le bassin Permien, qui devrait être opérationnelle d'ici la fin de 2025.
Aris Water Solutions (NYSE: ARIS) hat starke Q2 2024 Ergebnisse berichtet, mit einem Anstieg des Nettogewinns um 26% auf 13,1 Millionen Dollar und einem Anstieg des bereinigten EBITDA um 17% auf 50,0 Millionen Dollar im Vergleich zu Q2 2023. Das Unternehmen verzeichnete einen Anstieg der produzierten Wassermengen um 5% und einen Anstieg der recycelten Wassermengen um 6%. Aris erreichte einen Bruttomargen pro Barrel von 0,31 Dollar und eine bereinigte operative Marge pro Barrel von 0,46 Dollar, was einem Anstieg von 21% im Jahresvergleich entspricht. Das Unternehmen wies eine starke Bilanz mit einem Verschuldungsgrad von 2,2x und 299 Millionen Dollar an verfügbaren liquiden Mitteln auf. Basierend auf einer starken Leistung erhöhte Aris die 2024er-Earnings Before Interest, Taxes, Depreciation, and Amortization-Prognose auf 195 bis 205 Millionen Dollar. Das Unternehmen kündigte auch Pläne für eine Jod-Extraktionsanlage im Permian Basin an, die bis Ende 2025 in Betrieb genommen werden soll.
- Net income increased 26% to $13.1 million in Q2 2024 compared to Q2 2023
- Adjusted EBITDA rose 17% to $50.0 million in Q2 2024 versus Q2 2023
- Produced water volumes increased 5% and recycled water volumes rose 6% year-over-year
- Adjusted Operating Margin per barrel improved 21% to $0.46 compared to Q2 2023
- 2024 Adjusted EBITDA guidance increased to $195-$205 million
- Plans announced for an iodine extraction facility, expanding revenue streams
- Produced water handling volumes decreased 6% compared to Q1 2024
- Groundwater volumes sold decreased 69% compared to Q2 2023
- Skim oil recoveries decreased 14% compared to Q1 2024
Insights
Aris Water Solutions' Q2 2024 results demonstrate solid financial performance and operational growth. The company reported a
The company's strong balance sheet with a 2.2x leverage ratio and
Aris's Q2 results highlight its strong position in the Permian Basin water management market. The
The company's expansion into mineral extraction, particularly the planned iodine extraction facility, represents a promising diversification strategy. Additionally, the ongoing Joint Industry Project for water treatment and reuse showcases Aris's commitment to sustainable water management solutions. These initiatives could potentially open new revenue streams and strengthen Aris's market position in the long term.
Aris Water Solutions is making significant strides in sustainable water management within the oil and gas industry. The company's focus on recycling produced water and exploring beneficial reuse options aligns with growing environmental concerns and regulatory pressures. The Joint Industry Project with major oil companies to develop cost-effective water treatment for multiple uses is particularly noteworthy.
The planned iodine extraction facility represents an innovative approach to resource recovery from produced water, potentially reducing waste and creating additional value. However, investors should monitor regulatory developments closely, as the approval process for applications outside oil and gas could impact the timeline and scope of these initiatives. Overall, Aris's efforts in sustainability could enhance its long-term competitive position and appeal to ESG-focused investors.
SECOND QUARTER 2024 HIGHLIGHTS
-
Increased produced water volumes
5% and recycled water volumes6% versus the second quarter of 2023 -
Achieved net income of
, a$13.1 million 26% increase versus the second quarter of 2023 -
Generated Adjusted EBITDA1 of
, up$50.0 million 17% versus the second quarter of 2023 -
Achieved Gross Margin per barrel of
and Adjusted Operating Margin2 per barrel of$0.31 , a$0.46 21% increase in Adjusted Operating Margin per barrel2 versus the second quarter of 2023 -
Maintained a strong balance sheet with quarter-end leverage of 2.2x3 and
of available liquidity under our revolving credit facility$299 million -
Increasing 2024 Adjusted EBITDA guidance to
to$195 , reflecting strong first half performance and further confidence in the outlook for the second half of the year$205 million
“Aris had a strong second quarter as resilient produced water volumes and operating margins combined to deliver outstanding results. Our customers are steadily growing their production and associated water volumes in our dedicated acreage, and we are pleased with how well Aris has performed to date this year. In the second half of the year, we will remain focused on operating and capital efficiencies, driving free cash flow and working with new and existing customers as we evaluate opportunities for further growth,” said Amanda Brock, President and CEO of Aris.
“While we remain focused on our core business, we continue to gauge how we can create additional value from our produced water stream and are increasingly optimistic regarding mineral extraction. In the second quarter, Aris signed a letter of intent with an established iodine production and marketing company to construct an iodine extraction facility at one of Aris’s Permian Basin produced water management facilities. Aris anticipates that this first iodine extraction facility in the Permian Basin will be operational by year-end 2025.
As it relates to our beneficial reuse efforts, we continue to work with regulators to accelerate the approval process for applications outside of oil and gas. The Aris-led Joint Industry Project (“JIP”) with ConocoPhilllips, Chevron, and ExxonMobil has successfully completed its second of three desalination pilots and is scheduled to complete Phase 1 testing by year-end to confirm that produced water can be cost effectively and safely treated for multiple uses.
Overall, we remain committed to continuous improvement in our operations, increasing automation and reducing costs while maintaining system safety and integrity. Margins are at record levels, capital expenditures are in line with expectations, and, when combined with our consistent, contracted produced water revenue stream, we have reached free cash flow generation that supports additional shareholder returns. We remain optimistic about our future opportunities as a leader in delivering sustainable comprehensive water management and infrastructure solutions to the industry.”
OPERATIONS UPDATE
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|||||
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|
Three Months Ended |
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|
Three Months Ended |
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|
|||||||
|
|
June 30, |
|
March 31, |
|
% Change |
June 30, |
|
% Change |
|||||
|
|
2024 |
|
2024 |
|
|
2023 |
|
|
|||||
(thousands of barrels of water per day) |
|
|
|
|
|
|
|
|
|
|||||
Total Volumes |
|
1,455 |
|
|
1,523 |
|
|
(4 |
)% |
1,497 |
|
|
(3 |
)% |
Produced Water Handling Volumes |
|
1,093 |
|
|
1,159 |
|
|
(6 |
)% |
1,045 |
|
|
5 |
% |
Water Solutions Volumes |
|
|
|
|
|
|
|
|
|
|||||
Recycled Produced Water Volumes Sold |
|
314 |
|
|
337 |
|
|
(7 |
)% |
296 |
|
|
6 |
% |
Groundwater Volumes Sold |
|
48 |
|
|
27 |
|
|
78 |
% |
156 |
|
|
(69 |
)% |
Total Water Solutions Volumes |
|
362 |
|
|
364 |
|
|
(1 |
)% |
452 |
|
|
(20 |
)% |
|
|
|
|
|
|
|
|
|
|
|||||
Skim oil recoveries (barrels of oil per day) |
|
1,490 |
|
|
1,729 |
|
|
(14 |
)% |
1,042 |
|
|
43 |
% |
Skim oil recoveries (as a % of produced water volumes) |
|
0.14 |
% |
|
0.15 |
% |
|
(7 |
)% |
0.10 |
% |
|
40 |
% |
FINANCIAL UPDATE
Net income was
Adjusted EBITDA1 was
Gross Margin per Barrel for the second quarter of 2024 was
Adjusted Operating Margin per Barrel2 for the second quarter of 2024 was
Second quarter 2024 Capital Expenditures4 totaled approximately
STRONG BALANCE SHEET AND LIQUIDITY
As of June 30, 2024, the Company had net debt of approximately
THIRD QUARTER 2024 DIVIDEND
Aris’s Board of Directors declared a dividend on its Class A common stock for the third quarter of 2024 of
UPDATED 2024 FINANCIAL OUTLOOK
“Given our strong first half of 2024 and increased confidence in the outlook for the second half of the year, we are increasing our full year 2024 Adjusted EBITDA guidance, establishing a new range between
For the third quarter of 2024, the Company expects:
- Produced Water Handling volumes between 1,060 and 1,090 thousand barrels of water per day
- Water Solutions volumes between 410 and 440 thousand barrels of water per day
-
Adjusted Operating Margin per Barrel2 between
and$0.43 $0.45 - Skim oil recoveries of approximately 1,300 barrels per day
-
Adjusted EBITDA1 between
and$48 $52 million -
No change to Aris’s full year Capital Expenditure4 outlook of
to$85 $105 million
CONFERENCE CALL
Aris will host a conference call to discuss its second quarter 2024 results on Wednesday, August 7, 2024, 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. It 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.
1 Adjusted Net Income, Adjusted EBITDA, and Diluted Adjusted Net Income per Share are non-GAAP financial measures. See the supplementary schedules in this press release for a discussion of how we define and calculate Adjusted Net Income, Adjusted EBITDA, and Diluted Adjusted Net Income per Share 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 Represents a non-GAAP financial measure. Defined as net debt as of June 30, 2024, divided by trailing twelve months Adjusted EBITDA. Net debt is calculated as total debt less cash and cash equivalents. See the supplementary schedules in this press release for a reconciliation to the most directly comparable GAAP measure. |
|
4 Capital Expenditures is a non-GAAP financial measure. See the supplementary schedules in this press release for a discussion of how we define and calculate Capital Expenditures and a reconciliation thereof to cash paid for property, plant, and equipment, the most directly comparable GAAP measure. |
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, statements, information, opinions or beliefs regarding our business strategy, our industry, our future profitability, business and financial performance, including our guidance for 2024, current and potential future long-term contracts, legal and regulatory developments, our ability to identify strategic acquisitions and realize expected benefits therefrom, the development of technologies for the beneficial reuse of produced water and related strategies, plans, objectives and strategic pursuits and other statements that are not historical facts. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “guidance,” “preliminary,” “project,” “estimate,” “expect,” “anticipate,” “continue,” “sustain,” “will,” “intend,” “strive,” “plan,” “goal,” “target,” “believe,” “forecast,” “outlook,” “future,” “potential,” “opportunity,” “predict,” “may,” “visibility,” “possible,” “should,” “could” and variations of such words or similar expressions. 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 or implied by the forward-looking statements including our guidance for 2024. 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, energy prices, the
Table 1 |
|||||||||||||
Aris Water Solutions, Inc. |
|||||||||||||
Condensed Consolidated Statements of Operations |
|||||||||||||
(Unaudited) |
|||||||||||||
|
|||||||||||||
(in thousands, except for share and |
|
Three Months Ended |
|
Six Months Ended |
|||||||||
per share amounts) |
|
June 30, |
|
June 30, |
|||||||||
|
|
2024 |
|
2023 |
|
|
2024 |
|
2023 |
||||
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
Produced Water Handling |
|
$ |
54,815 |
|
$ |
49,716 |
|
|
$ |
113,921 |
|
$ |
95,816 |
Produced Water Handling — Affiliate |
|
|
28,614 |
|
|
23,181 |
|
|
|
55,441 |
|
|
46,321 |
Water Solutions |
|
|
13,795 |
|
|
14,928 |
|
|
|
25,497 |
|
|
28,810 |
Water Solutions — Affiliate |
|
|
3,453 |
|
|
8,163 |
|
|
|
8,695 |
|
|
16,147 |
Other Revenue |
|
|
440 |
|
|
645 |
|
|
|
969 |
|
|
1,110 |
Total Revenue |
|
|
101,117 |
|
|
96,633 |
|
|
|
204,523 |
|
|
188,204 |
Cost of Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct Operating Costs |
|
|
40,194 |
|
|
44,446 |
|
|
|
79,840 |
|
|
88,291 |
Depreciation, Amortization and Accretion |
|
|
19,707 |
|
|
19,086 |
|
|
|
39,128 |
|
|
37,692 |
Total Cost of Revenue |
|
|
59,901 |
|
|
63,532 |
|
|
|
118,968 |
|
|
125,983 |
Operating Costs and Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
General and Administrative |
|
|
16,037 |
|
|
12,682 |
|
|
|
30,538 |
|
|
24,481 |
Research and Development Expense |
|
|
1,128 |
|
|
650 |
|
|
|
2,193 |
|
|
1,058 |
Other Operating Expense (Income), Net |
|
|
132 |
|
|
(192 |
) |
|
|
1,047 |
|
|
25 |
Total Operating Expenses |
|
|
17,297 |
|
|
13,140 |
|
|
|
33,778 |
|
|
25,564 |
Operating Income |
|
|
23,919 |
|
|
19,961 |
|
|
|
51,777 |
|
|
36,657 |
Other Expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Expense, Net |
|
|
8,813 |
|
|
7,971 |
|
|
|
17,251 |
|
|
15,632 |
Other |
|
|
— |
|
|
— |
|
|
|
1 |
|
|
— |
Total Other Expense |
|
|
8,813 |
|
|
7,971 |
|
|
|
17,252 |
|
|
15,632 |
Income Before Income Taxes |
|
|
15,106 |
|
|
11,990 |
|
|
|
34,525 |
|
|
21,025 |
Income Tax Expense |
|
|
1,994 |
|
|
1,559 |
|
|
|
4,583 |
|
|
2,886 |
Net Income |
|
|
13,112 |
|
|
10,431 |
|
|
|
29,942 |
|
|
18,139 |
Net Income Attributable to Noncontrolling Interest |
|
|
7,147 |
|
|
5,733 |
|
|
|
16,354 |
|
|
10,063 |
Net Income Attributable to Aris Water Solutions, Inc. |
|
$ |
5,965 |
|
$ |
4,698 |
|
|
$ |
13,588 |
|
$ |
8,076 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Per Share of Class A Common Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.18 |
|
$ |
0.15 |
|
|
$ |
0.41 |
|
$ |
0.25 |
Diluted |
|
$ |
0.18 |
|
$ |
0.15 |
|
|
$ |
0.41 |
|
$ |
0.25 |
Weighted Average Shares of Class A Common Stock Outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
30,549,092 |
|
|
30,036,593 |
|
|
|
30,451,553 |
|
|
29,985,869 |
Diluted |
|
|
30,589,997 |
|
|
30,036,593 |
|
|
|
30,472,005 |
|
|
29,985,869 |
Table 2 |
||||||||
Aris Water Solutions, Inc. |
||||||||
Condensed Consolidated Balance Sheets |
||||||||
(Unaudited) |
||||||||
|
||||||||
(in thousands, except for share and per share amounts) |
|
June 30, |
|
December 31, |
||||
|
|
2024 |
|
2023 |
||||
Assets |
|
|
|
|
|
|
||
Cash |
|
$ |
11,526 |
|
|
$ |
5,063 |
|
Accounts Receivable, Net |
|
|
64,309 |
|
|
|
59,393 |
|
Accounts Receivable from Affiliate |
|
|
29,132 |
|
|
|
22,963 |
|
Other Receivables |
|
|
13,432 |
|
|
|
12,767 |
|
Prepaids and Deposits |
|
|
5,389 |
|
|
|
8,364 |
|
Total Current Assets |
|
|
123,788 |
|
|
|
108,550 |
|
Fixed Assets |
|
|
|
|
|
|
||
Property, Plant and Equipment |
|
|
1,116,165 |
|
|
|
1,041,703 |
|
Accumulated Depreciation |
|
|
(141,019 |
) |
|
|
(121,989 |
) |
Total Property, Plant and Equipment, Net |
|
|
975,146 |
|
|
|
919,714 |
|
Intangible Assets, Net |
|
|
213,750 |
|
|
|
232,277 |
|
Goodwill |
|
|
34,585 |
|
|
|
34,585 |
|
Deferred Income Tax Assets, Net |
|
|
18,510 |
|
|
|
22,634 |
|
Right-of-Use Assets |
|
|
15,839 |
|
|
|
16,726 |
|
Other Assets |
|
|
5,445 |
|
|
|
5,995 |
|
Total Assets |
|
$ |
1,387,063 |
|
|
$ |
1,340,481 |
|
Liabilities and Stockholders' Equity |
|
|
|
|
|
|
||
Accounts Payable |
|
$ |
42,112 |
|
|
$ |
25,925 |
|
Payables to Affiliate |
|
|
679 |
|
|
|
894 |
|
Insurance Premium Financing Liability |
|
|
1,855 |
|
|
|
5,463 |
|
Accrued and Other Current Liabilities |
|
|
50,261 |
|
|
|
64,416 |
|
Total Current Liabilities |
|
|
94,907 |
|
|
|
96,698 |
|
Long-Term Debt, Net of Debt Issuance Costs |
|
|
444,727 |
|
|
|
421,792 |
|
Asset Retirement Obligations |
|
|
20,904 |
|
|
|
19,030 |
|
Tax Receivable Agreement Liability |
|
|
98,274 |
|
|
|
98,274 |
|
Other Long-Term Liabilities |
|
|
16,071 |
|
|
|
16,794 |
|
Total Liabilities |
|
|
674,883 |
|
|
|
652,588 |
|
Stockholders' Equity |
|
|
|
|
|
|
||
Preferred Stock |
|
|
— |
|
|
|
— |
|
Class A Common Stock |
|
|
310 |
|
|
|
306 |
|
Class B Common Stock |
|
|
275 |
|
|
|
275 |
|
Treasury Stock (at Cost), 551,288 shares as of June 30, 2024; 418,319 shares as of December 31, 2023 |
|
|
(6,730 |
) |
|
|
(5,133 |
) |
Additional Paid-in-Capital |
|
|
335,183 |
|
|
|
328,543 |
|
Retained Earnings (Accumulated Deficit) |
|
|
7,235 |
|
|
|
(87 |
) |
Total Stockholders' Equity Attributable to Aris Water Solutions, Inc. |
|
|
336,273 |
|
|
|
323,904 |
|
Noncontrolling Interest |
|
|
375,907 |
|
|
|
363,989 |
|
Total Stockholders' Equity |
|
|
712,180 |
|
|
|
687,893 |
|
Total Liabilities and Stockholders' Equity |
|
$ |
1,387,063 |
|
|
$ |
1,340,481 |
|
Table 3 |
||||||||
Aris Water Solutions, Inc. |
||||||||
Condensed Consolidated Statements of Cash Flows |
||||||||
(Unaudited) |
||||||||
|
||||||||
|
|
Six Months Ended |
||||||
(in thousands) |
|
June 30, |
||||||
|
|
2024 |
|
|
2023 |
|
||
Cash Flow from Operating Activities |
|
|
|
|
|
|
||
Net Income |
|
$ |
29,942 |
|
|
$ |
18,139 |
|
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities |
|
|
|
|
|
|
||
Deferred Income Tax Expense |
|
|
3,770 |
|
|
|
2,837 |
|
Depreciation, Amortization and Accretion |
|
|
39,128 |
|
|
|
37,692 |
|
Stock-Based Compensation |
|
|
8,214 |
|
|
|
5,585 |
|
Abandoned Well Costs |
|
|
310 |
|
|
|
— |
|
Loss on Disposal of Assets, Net |
|
|
114 |
|
|
|
57 |
|
Abandoned Projects |
|
|
745 |
|
|
|
128 |
|
Amortization of Debt Issuance Costs, Net |
|
|
1,436 |
|
|
|
1,041 |
|
Other |
|
|
735 |
|
|
|
376 |
|
Changes in Operating Assets and Liabilities: |
|
|
|
|
|
|
||
Accounts Receivable |
|
|
(5,524 |
) |
|
|
15,097 |
|
Accounts Receivable from Affiliate |
|
|
(6,169 |
) |
|
|
18,308 |
|
Other Receivables |
|
|
(665 |
) |
|
|
(4,005 |
) |
Prepaids and Deposits |
|
|
2,975 |
|
|
|
1,583 |
|
Accounts Payable |
|
|
1,818 |
|
|
|
(1,001 |
) |
Payables to Affiliate |
|
|
(215 |
) |
|
|
(578 |
) |
Accrued Liabilities and Other |
|
|
(18,467 |
) |
|
|
1,208 |
|
Net Cash Provided by Operating Activities |
|
|
58,147 |
|
|
|
96,467 |
|
|
|
|
|
|
|
|
||
Cash Flow from Investing Activities |
|
|
|
|
|
|
||
Property, Plant and Equipment Expenditures |
|
|
(56,879 |
) |
|
|
(77,981 |
) |
Deposit on Assets Held for Sale |
|
|
— |
|
|
|
1,750 |
|
Proceeds from the Sale of Property, Plant and Equipment |
|
|
94 |
|
|
|
— |
|
Net Cash Used in Investing Activities |
|
|
(56,785 |
) |
|
|
(76,231 |
) |
|
|
|
|
|
|
|
||
Cash Flow from Financing Activities |
|
|
|
|
|
|
||
Dividends and Distributions Paid |
|
|
(11,817 |
) |
|
|
(10,743 |
) |
Repurchase of Shares |
|
|
(1,326 |
) |
|
|
(599 |
) |
Repayment of Credit Facility |
|
|
(15,000 |
) |
|
|
(36,000 |
) |
Proceeds from Credit Facility |
|
|
37,000 |
|
|
|
30,000 |
|
Payment of Insurance Premium Financing |
|
|
(3,756 |
) |
|
|
— |
|
Net Cash Provided by (Used in) Financing Activities |
|
|
5,101 |
|
|
|
(17,342 |
) |
|
|
|
|
|
|
|
||
Net Increase in Cash |
|
|
6,463 |
|
|
|
2,894 |
|
Cash, Beginning of Period |
|
|
5,063 |
|
|
|
1,122 |
|
Cash, End of Period |
|
$ |
11,526 |
|
|
$ |
4,016 |
|
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; change in payables related to the Tax Receivable Agreement liability as a result of state tax rate changes; loss on debt modification; stock-based compensation expense; and other non-recurring or unusual expenses or charges (such as litigation expenses and severance costs), less any gains on the sale of assets.
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 handled, sold or transferred.
The Company calculates Adjusted Net Income as Net Income (Loss) 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) Net Income (Loss) 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, 2024, the Company calculates its leverage ratio as net debt as of June 30, 2024, divided by Adjusted EBITDA for the trailing twelve months. Net debt is calculated as the principal amount of total debt outstanding as of June 30, 2024, less cash and cash equivalents as of June 30, 2024.
The Company calculates Capital Expenditures as cash capital expenditures for property, plant, and equipment additions less changes in accrued capital costs.
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, Adjusted Net Income, and Capital Expenditures are not measures of financial performance under GAAP and should not be considered as measures of liquidity or as alternatives to net income (loss), gross margin, or cash paid for property, plant and equipment. 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, cash paid for property, plant, and equipment or cash flows from operating activities.
Although we provide forecasts for the non-GAAP measures Adjusted EBITDA, Adjusted Operating Margin per Barrel, and Capital Expenditures, we are not able to forecast their most directly comparable measures (net income, gross margin, and cash paid for property, plant, and equipment) calculated and presented in accordance with GAAP without unreasonable effort. Certain elements of the composition of forward-looking 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) |
|||||||||||||||
|
|||||||||||||||
|
|
Three Months Ended |
Six Months Ended |
||||||||||||
|
|
June 30, |
March 31, |
|
June 30, |
||||||||||
|
|
2024 |
|
2023 |
2024 |
|
2024 |
|
2023 |
||||||
(thousands of barrels of water per day) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Produced Water Handling Volumes |
|
|
1,093 |
|
|
1,045 |
|
|
1,159 |
|
|
1,126 |
|
|
1,008 |
Water Solutions Volumes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recycled Produced Water Volumes Sold |
|
|
314 |
|
|
296 |
|
|
337 |
|
|
325 |
|
|
277 |
Groundwater Volumes Sold |
|
|
48 |
|
|
156 |
|
|
27 |
|
|
38 |
|
|
151 |
Total Water Solutions Volumes |
|
|
362 |
|
|
452 |
|
|
364 |
|
|
363 |
|
|
428 |
Total Volumes |
|
|
1,455 |
|
|
1,497 |
|
|
1,523 |
|
|
1,489 |
|
|
1,436 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Barrel Operating Metrics (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Produced Water Handling Revenue/Barrel |
|
$ |
0.84 |
|
$ |
0.77 |
|
$ |
0.81 |
|
$ |
0.83 |
|
$ |
0.78 |
Water Solutions Revenue/Barrel |
|
$ |
0.52 |
|
$ |
0.56 |
|
$ |
0.51 |
|
$ |
0.52 |
|
$ |
0.58 |
Revenue/Barrel of Total Volumes (2) |
|
$ |
0.76 |
|
$ |
0.70 |
|
$ |
0.74 |
|
$ |
0.75 |
|
$ |
0.72 |
Direct Operating Costs/Barrel |
|
$ |
0.30 |
|
$ |
0.33 |
|
$ |
0.29 |
|
$ |
0.29 |
|
$ |
0.34 |
Gross Margin/Barrel |
|
$ |
0.31 |
|
$ |
0.24 |
|
$ |
0.32 |
|
$ |
0.32 |
|
$ |
0.24 |
Adjusted Operating Margin/Barrel |
|
$ |
0.46 |
|
$ |
0.38 |
|
$ |
0.46 |
|
$ |
0.46 |
|
$ |
0.38 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Per Barrel operating metrics are calculated independently. Therefore, the sum of individual amounts may not equal the total presented. |
|||||||||||||||
(2) Does not include Other Revenue. |
Table 5 |
|||||||||||||||
Aris Water Solutions, Inc. |
|||||||||||||||
Reconciliation of Net Income to Non-GAAP Adjusted EBITDA |
|||||||||||||||
(Unaudited) |
|||||||||||||||
|
|||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
|||||||||||
(in thousands) |
|
June 30, |
|
June 30, |
|||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
2023 |
|
||||
Net Income |
|
$ |
13,112 |
|
|
$ |
10,431 |
|
|
$ |
29,942 |
|
$ |
18,139 |
|
Interest Expense, Net |
|
|
8,813 |
|
|
|
7,971 |
|
|
|
17,251 |
|
|
15,632 |
|
Income Tax Expense |
|
|
1,994 |
|
|
|
1,559 |
|
|
|
4,583 |
|
|
2,886 |
|
Depreciation, Amortization and Accretion |
|
|
19,707 |
|
|
|
19,086 |
|
|
|
39,128 |
|
|
37,692 |
|
Abandoned Well Costs |
|
|
(25 |
) |
|
|
— |
|
|
|
310 |
|
|
— |
|
Stock-Based Compensation |
|
|
4,693 |
|
|
|
3,117 |
|
|
|
8,214 |
|
|
5,585 |
|
Abandoned Projects |
|
|
16 |
|
|
|
128 |
|
|
|
745 |
|
|
128 |
|
Loss on Disposal of Assets, Net |
|
|
168 |
|
|
|
70 |
|
|
|
114 |
|
|
57 |
|
Transaction Costs |
|
|
89 |
|
|
|
100 |
|
|
|
96 |
|
|
145 |
|
Research and Development Expense |
|
|
1,128 |
|
|
|
650 |
|
|
|
2,193 |
|
|
1,058 |
|
Other |
|
|
300 |
|
|
|
(490 |
) |
|
|
527 |
|
|
(594 |
) |
Adjusted EBITDA |
|
$ |
49,995 |
|
|
$ |
42,622 |
|
|
$ |
103,103 |
|
$ |
80,728 |
|
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, |
||||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Total Revenue |
|
$ |
101,117 |
|
|
$ |
96,633 |
|
|
$ |
204,523 |
|
|
$ |
188,204 |
|
Cost of Revenue |
|
|
(59,901 |
) |
|
|
(63,532 |
) |
|
|
(118,968 |
) |
|
|
(125,983 |
) |
Gross Margin |
|
|
41,216 |
|
|
|
33,101 |
|
|
|
85,555 |
|
|
|
62,221 |
|
Depreciation, Amortization and Accretion |
|
|
19,707 |
|
|
|
19,086 |
|
|
|
39,128 |
|
|
|
37,692 |
|
Adjusted Operating Margin |
|
$ |
60,923 |
|
|
$ |
52,187 |
|
|
$ |
124,683 |
|
|
$ |
99,913 |
|
Total Volumes (thousands of barrels) |
|
|
132,372 |
|
|
|
136,282 |
|
|
|
270,974 |
|
|
|
260,097 |
|
Adjusted Operating Margin/BBL |
|
$ |
0.46 |
|
|
$ |
0.38 |
|
|
$ |
0.46 |
|
|
$ |
0.38 |
|
Table 7 |
||||||||||||||||
Aris Water Solutions, Inc. |
||||||||||||||||
Reconciliation of Net Income to Non-GAAP Adjusted Net Income |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
||||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
(in thousands) |
|
June 30, |
|
June 30, |
||||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Net Income |
|
$ |
13,112 |
|
|
$ |
10,431 |
|
|
$ |
29,942 |
|
|
$ |
18,139 |
|
Adjusted items: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Abandoned Well Costs |
|
|
(25 |
) |
|
|
— |
|
|
|
310 |
|
|
|
— |
|
Loss on Disposal of Assets, Net |
|
|
168 |
|
|
|
70 |
|
|
|
114 |
|
|
|
57 |
|
Stock-Based Compensation |
|
|
4,693 |
|
|
|
3,117 |
|
|
|
8,214 |
|
|
|
5,585 |
|
Tax Effect of Adjusting Items (1) |
|
|
(638 |
) |
|
|
(419 |
) |
|
|
(1,147 |
) |
|
|
(741 |
) |
Adjusted Net Income |
|
$ |
17,310 |
|
|
$ |
13,199 |
|
|
$ |
37,433 |
|
|
$ |
23,040 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
(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, |
||||||||||||
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Diluted Net Income Per Share of Class A Common Stock |
|
$ |
0.18 |
|
|
$ |
0.15 |
|
|
$ |
0.41 |
|
|
$ |
0.25 |
|
Adjusted items: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Reallocation of Net Income Attributable to Noncontrolling Interests From the Assumed Exchange of LLC Interests |
|
|
0.04 |
|
|
|
0.03 |
|
|
|
0.08 |
|
|
|
0.05 |
|
Abandoned Well Costs |
|
|
— |
|
|
|
— |
|
|
|
0.01 |
|
|
|
— |
|
Stock-Based Compensation |
|
|
0.08 |
|
|
|
0.05 |
|
|
|
0.14 |
|
|
|
0.10 |
|
Tax Effect of Adjusting Items (1) |
|
|
(0.01 |
) |
|
|
(0.01 |
) |
|
|
(0.02 |
) |
|
|
(0.01 |
) |
Diluted Adjusted Net Income Per Share |
|
$ |
0.29 |
|
|
$ |
0.22 |
|
|
$ |
0.62 |
|
|
$ |
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 |
|
|
30,549,092 |
|
|
|
30,036,593 |
|
|
|
30,451,553 |
|
|
|
29,985,869 |
|
Adjusted Items: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assumed Redemption of LLC Interests |
|
|
27,543,565 |
|
|
|
27,554,393 |
|
|
|
27,543,565 |
|
|
|
27,561,348 |
|
Dilutive Performance-Based Stock Units (2) |
|
|
40,905 |
|
|
|
— |
|
|
|
20,452 |
|
|
|
— |
|
Diluted Adjusted Fully Weighted Average Shares of Class A Common Stock Outstanding |
|
|
58,133,562 |
|
|
|
57,590,986 |
|
|
|
58,015,570 |
|
|
|
57,547,217 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
(2) Dilutive impact of Performance-Based Stock Units already included for the three and six months ended June 30, 2024 and 2023. |
Table 9 |
||||
Aris Water Solutions, Inc. |
||||
Computation of Leverage Ratio |
||||
(Unaudited) |
||||
|
|
|
||
|
|
As of |
||
(in thousands) |
|
June 30, 2024 |
||
Principal Amount of Debt at June 30, 2024 |
|
$ |
449,855 |
|
Less: Cash at June 30, 2024 |
|
|
(11,526 |
) |
Net Debt |
|
$ |
438,329 |
|
|
|
|
|
|
Net Debt |
|
$ |
438,329 |
|
÷ Trailing Twelve Months Adjusted EBITDA |
|
|
197,347 |
|
Leverage Ratio |
|
|
2.22 |
|
Table 10 |
||||||||||||
Aris Water Solutions, Inc. |
||||||||||||
Reconciliation of Capital Expenditures |
||||||||||||
(Unaudited) |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
||||||||
|
|
June 30, |
|
June 30, |
||||||||
(in thousands) |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||
Cash Paid for Property, Plant and Equipment |
|
$ |
37,297 |
|
$ |
42,666 |
|
$ |
56,879 |
|
$ |
77,981 |
Change in Capital Related Accruals |
|
|
49 |
|
|
6,422 |
|
|
18,183 |
|
|
19,081 |
Capital Expenditures |
|
$ |
37,346 |
|
$ |
49,088 |
|
$ |
75,062 |
|
$ |
97,062 |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240806050836/en/
David Tuerff
Senior Vice President, Finance and Investor Relations
(281) 501-3070
IR@ariswater.com
Source: Aris Water Solutions, Inc.
FAQ
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