SELECT ENERGY SERVICES ANNOUNCES ACQUISITION OF BREAKWATER ENERGY PARTNERS, REPORTS THIRD QUARTER 2022 FINANCIAL RESULTS AND PROVIDES OTHER OPERATIONAL & ACQUISITION UPDATES
Select Energy Services (NYSE: WTTR) reported third-quarter 2022 revenue of $375 million, marking a 12% increase from Q2 2022. Net income rose to $24.7 million and Adjusted EBITDA grew to $62.8 million, reflecting gains of 70% and 32% respectively. The company completed the acquisitions of Breakwater Energy Partners and assets from Cypress Environmental Services on November 1, 2022, enhancing its water recycling capabilities in the Permian Basin and Bakken regions, with expected combined revenues of $110-$115 million for 2022.
- Revenue increased by 12% sequentially to $375 million.
- Net income of $24.7 million, up 70% quarter-over-quarter.
- Adjusted EBITDA reached $62.8 million, up 32% from Q2 2022.
- Successful acquisitions of Breakwater and Cypress expected to generate $110-$115 million in revenue for 2022.
- Enhanced water recycling capacity of nearly 3 million barrels daily through Breakwater acquisition.
- Cash flow from operations decreased to $5.4 million from $11.1 million in Q2 2022 due to working capital needs.
- Total cash and cash equivalents decreased to $13.2 million from $25.7 million in Q2 2022.
Revenue of
Net income of
Acquired Breakwater Energy Partners, LLC ("Breakwater"), a leading provider of contracted water recycling and infrastructure solutions focused in the Permian Basin on November 1, 2022
Acquired Bakken Shale water gathering pipeline and disposal assets from Cypress Environmental Services, LLC ("Cypress") on November 1, 2022
HOUSTON, Nov. 2, 2022 /PRNewswire/ -- Select Energy Services, Inc. (NYSE: WTTR) ("Select" or the "Company"), a leading provider of sustainable water and chemical solutions to the energy industry, today announced the acquisitions of Breakwater and certain water gathering pipeline and disposal assets from Cypress, as well as its financial and operating results for the quarter ended September 30, 2022.
John Schmitz, Chairman of the Board, President and CEO, stated, "Our strong third quarter results, combined with our recent acquisitions, display our ability to execute on our strategy to improve and bolster the base business, advance our technology, sustainability and diversification efforts, and execute on strategic M&A. We progressed each of these initiatives while also commencing our previously announced regular quarterly dividend program. Reinforced by a steady activity backdrop, a challenging labor market and a tight equipment supply environment, we continue to capture market share and see pricing improvements across each of our segments. During the third quarter we achieved
"Our Chemicals segment continues to produce record revenue and margins, we continue to improve efficiencies and gain market share in our Water Services segment, and our Water Infrastructure segment achieved quarterly revenue more than
"In addition to these improvements in the base business, we identified and completed the acquisition of Breakwater, a core Permian infrastructure, recycling and logistics business, to further our growth, consolidation and sustainability strategies, while our Cypress transaction adds to our infrastructure scale and development opportunities in the Bakken. With these additions, we have meaningfully enhanced our Water Infrastructure and Water Services footprints, and significantly expanded the capacity and reach of our sustainable recycling solutions. We expect to see immediately accretive benefits from both acquisitions and believe we have a meaningful opportunity to invest organically around the acquired operations and asset footprints as well.
"In Breakwater, we are acquiring one of the market leaders in advanced water recycling, infrastructure and logistics solutions focused in the Permian Basin. Importantly, we're also adding significant operational leadership depth to the organization and welcoming more than 300 new employees to the Select family. With a strategic portfolio of highly contracted recycling assets in the core of the Midland Basin, we believe Breakwater has developed one of the leading recycling footprints in the U.S. today. This footprint expands Select's recycling capabilities to nearly 3 million barrels of total daily capacity across fixed and mobile capabilities, while adding a number of new strategic customer relationships and strengthening existing relationships with new recycling opportunities. During the third quarter, we exceeded our full year 2022 target for produced water recycling volumes established in our sustainability-linked credit facility, while this acquisition positions us to quickly meet and meaningfully exceed our future targets as well. These recycling facilities also offer significant network flexibility via geographic and infrastructure interconnectedness, currently allowing for approximately 10 customers at any given time to deliver produced water and receive recycled water as demand ebbs and flows with their own activity needs, while reducing capital outlays and operating expenses for our customers.
"Through the Cypress acquisition, we've added a portfolio of strategic wastewater disposal facilities in North Dakota at an attractive value, further consolidating the Bakken region following our previous Agua Libre Midstream and Nuverra acquisitions. With more than
"Additionally, I'm very confident in the strategic and clear financial benefits of these acquisitions. On a combined basis, the acquired operations from Breakwater and Cypress are expected to generate approximately
"Ultimately, I am very pleased with our financial performance, supported by our recent acquisitions, pricing improvements, organic growth opportunities and our other strategic investments. I look forward to building upon our recent positive results, while meaningfully expanding our free cash flow generation in the quarters ahead. Supported by these factors, I am proud to have recently announced our first ever quarterly dividend payment of
Consolidated Financial Information
Revenue for the third quarter of 2022 was
For the third quarter of 2022, gross profit was
Selling, general and administrative expense ("SG&A") during the third quarter of 2022 was
Adjusted EBITDA was
Business Segment Information
The Water Services segment generated revenues of
The Water Infrastructure segment generated revenues of
The Oilfield Chemicals segment generated revenues of
Cash Flow and Capital Expenditures
Cash flow from operations for the third quarter of 2022 was
Net capital expenditures for the third quarter of 2022 were
Cash flow used in investing activities during the third quarter of 2022 included an incremental
Balance Sheet and Capital Structure
Total cash and cash equivalents were
As of September 30, 2022 and June 30, 2022, the borrowing base under the sustainability-linked credit facility was
Total liquidity was
Breakwater Acquisition
On November 1, 2022, Select completed the acquisition of Breakwater Energy Partners, LLC through a stock-for-stock transaction. In connection with closing, Select issued a total of approximately 9.2 million shares of Select Class A common stock and repaid or assumed approximately
Breakwater is a leading provider of water infrastructure, recycling, transfer and disposal solutions to leading E&P customers in the Permian Basin, with complementary water logistics operations in the Eagle Ford Shale. Breakwater operates four commercial recycling facilities, supported by a portfolio of long-term contracts, with 0.6 million barrels per day of operational capacity. Breakwater has an incremental 1.4 million barrels per day of permitted recycling capacity available for development across its four currently operating fixed facilities as well as a fifth facility location yet to be developed. Additionally, Breakwater currently operates nine active modular recycling facilities with 1.5 million barrels per day of throughput capacity. These facilities are supported by 46 miles of gathering and distribution pipelines, 70,000 barrels per day of wastewater disposal capacity and 4.7 million barrels of storage capacity, with an additional 3.7 million barrels of permitted storage capacity available for development.
BofA Securities, Inc. acted as financial advisor and Vinson & Elkins acted as legal counsel to Select. Jefferies LLC acted as exclusive financial advisor and Locke Lord LLP acted as legal counsel to Breakwater.
Cypress Asset Acquisition
On November 1, 2022, Select completed the acquisition of a portfolio of water gathering pipeline and disposal assets in the Bakken Shale from Cypress Environmental Services, LLC. As consideration for the transaction, Select issued approximately 950,000 shares of Select Class A common stock. Cypress's water solutions operations consist of eight saltwater disposal facilities with daily permitted capacity of 85,000 barrels per day across North Dakota. The acquired business currently receives more than
Conference Call
Select has scheduled a conference call on Thursday, November 3, 2022 at 11:00 a.m. Eastern time / 10:00 a.m. Central time. Please dial 201-389-0872 and ask for the Select Energy Services call at least 10 minutes prior to the start time of the call, or listen to the call live over the Internet by logging on to the website at the address https://investors.selectenergy.com/events-and-presentations/current. A telephonic replay of the conference call will be available through November 17, 2022 and may be accessed by calling 201-612-7415 using passcode 13733891#. A webcast archive will also be available at the link above shortly after the call and will be accessible for approximately 90 days.
About Select Energy Services, Inc.
Select is a leading provider of sustainable water and chemical solutions to the energy industry. These solutions are supported by the Company's critical water infrastructure assets, chemical manufacturing and water treatment and recycling capabilities. As a leader in sustainable water and chemical solutions, Select places the utmost importance on safe, environmentally responsible management of oilfield water throughout the lifecycle of a well. Additionally, Select believes that responsibly managing water resources throughout its operations to help conserve and protect the environment is paramount to the continued success of the Company. For more information, please visit Select's website, https://www.selectenergy.com/.
Cautionary Statement Regarding Forward-Looking Statements
All statements in this communication other than statements of historical facts are forward-looking statements which contain our current expectations about our future results. We have attempted to identify any forward-looking statements by using words such as "could," "believe," "anticipate," "expect," "intend," "project," "will," "estimate" and other similar expressions. Although we believe that the expectations reflected, and the assumptions or bases underlying our forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Such statements are not guarantees of future performance or events and are subject to known and unknown risks and uncertainties that could cause our actual results, events or financial positions to differ materially from those included within or implied by such forward-looking statements. These risks and uncertainties include the risks that the benefits contemplated from our recent acquisitions may not be realized, the ability of Select to successfully integrate the acquired businesses' operations, including Breakwater's employees, and realize anticipated synergies and cost savings and the potential impact of the consummation of the acquisitions on relationships, including with employees, suppliers, customers, competitors and creditors. Factors that could materially impact such forward-looking statements include, but are not limited to: the severity and duration of world health events, including the COVID-19 pandemic, which had a negative impact on our business; the global macroeconomic uncertainty related to the Russia-Ukraine war; actions by the members of OPEC+ with respect to oil production levels and announcements of potential changes in such levels, including the ability of the OPEC+ countries to agree on and comply with supply limitations; operational challenges relating to the COVID-19 pandemic and efforts to mitigate the spread of the virus, including logistical challenges, protecting the health and well-being of our employees, remote work arrangements, performance of contracts and supply chain disruptions; the level of capital spending and access to capital markets by oil and gas companies, trends and volatility in oil and gas prices, and our ability to manage through such volatility; and other factors discussed or referenced in the "Risk Factors" section of our most recent Annual Report on Form 10-K and those set forth from time to time in our other filings with the SEC. Investors should not place undue reliance on our forward-looking statements. Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, unless required by law.
WTTR-ER
SELECT ENERGY SERVICES, INC. | |||||||||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||||||||
September 30, | June 30, | September 30, | September 30, | September 30, | |||||||||||||||||||
Revenue | |||||||||||||||||||||||
Water Services | $ | 221,243 | $ | 195,996 | $ | 112,474 | $ | 580,845 | $ | 253,348 | |||||||||||||
Water Infrastructure | 74,396 | 60,284 | 36,787 | 193,234 | 107,916 | ||||||||||||||||||
Oilfield Chemicals | 79,433 | 79,623 | 55,372 | 231,665 | 148,228 | ||||||||||||||||||
Total revenue | 375,072 | 335,903 | 204,633 | 1,005,744 | 509,492 | ||||||||||||||||||
Costs of revenue | |||||||||||||||||||||||
Water Services | 170,845 | 158,060 | 94,667 | 465,951 | 227,736 | ||||||||||||||||||
Water Infrastructure | 54,197 | 44,939 | 28,494 | 143,514 | 81,130 | ||||||||||||||||||
Oilfield Chemicals | 64,519 | 67,988 | 49,583 | 194,670 | 132,103 | ||||||||||||||||||
Other | (1) | 1 | — | — | — | ||||||||||||||||||
Depreciation and amortization | 26,672 | 29,253 | 22,904 | 82,425 | 65,572 | ||||||||||||||||||
Total costs of revenue | 316,232 | 300,241 | 195,648 | 886,560 | 506,541 | ||||||||||||||||||
Gross profit | 58,840 | 35,662 | 8,985 | 119,184 | 2,951 | ||||||||||||||||||
Operating expenses | |||||||||||||||||||||||
Selling, general and administrative | 29,782 | 26,695 | 22,044 | 84,792 | 57,828 | ||||||||||||||||||
Depreciation and amortization | 543 | 526 | 562 | 1,636 | 1,835 | ||||||||||||||||||
Lease abandonment costs | 83 | 162 | 154 | 336 | 480 | ||||||||||||||||||
Total operating expenses | 30,408 | 27,383 | 22,760 | 86,764 | 60,143 | ||||||||||||||||||
Income (loss) from operations | 28,432 | 8,279 | (13,775) | 32,420 | (57,192) | ||||||||||||||||||
Other income (expense) | |||||||||||||||||||||||
(Loss) gain on sales of property and | (479) | 731 | 315 | 1,905 | (1,921) | ||||||||||||||||||
Interest expense, net | (616) | (494) | (419) | (1,830) | (1,254) | ||||||||||||||||||
Foreign currency (loss) gain, net | (6) | (6) | (6) | (9) | 1 | ||||||||||||||||||
Bargain purchase gain | (3,273) | 5,607 | — | 13,768 | — | ||||||||||||||||||
Other | 1,153 | 875 | (222) | 2,277 | (956) | ||||||||||||||||||
Income (loss) before income tax (expense) | 25,211 | 14,992 | (14,107) | 48,531 | (61,322) | ||||||||||||||||||
Income tax (expense) benefit | (276) | (182) | 32 | (672) | 211 | ||||||||||||||||||
Equity in losses of unconsolidated entities | (218) | (229) | (129) | (576) | (129) | ||||||||||||||||||
Net income (loss) | 24,717 | 14,581 | (14,204) | 47,283 | (61,240) | ||||||||||||||||||
Less: net (income) loss attributable to | (3,393) | (2,078) | 2,160 | (6,654) | 9,522 | ||||||||||||||||||
Net income (loss) attributable to Select Energy | $ | 21,324 | $ | 12,503 | $ | (12,044) | $ | 40,629 | $ | (51,718) | |||||||||||||
Net income (loss) per share attributable to | |||||||||||||||||||||||
Class A—Basic | $ | 0.23 | $ | 0.13 | $ | (0.14) | $ | 0.44 | $ | (0.60) | |||||||||||||
Class B—Basic | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||
Net income (loss) per share attributable to | |||||||||||||||||||||||
Class A—Diluted | $ | 0.22 | $ | 0.13 | $ | (0.14) | $ | 0.43 | $ | (0.60) | |||||||||||||
Class B—Diluted | $ | — | $ | — | $ | — | $ | — | $ | — |
SELECT ENERGY SERVICES, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share data) | ||||||
September 30, 2022 | December 31, 2021 | |||||
(unaudited) | ||||||
Assets | ||||||
Current assets | ||||||
Cash and cash equivalents | $ | 13,222 | $ | 85,801 | ||
Accounts receivable trade, net of allowance for credit losses of | 388,797 | 232,824 | ||||
Accounts receivable, related parties | 303 | 219 | ||||
Inventories | 40,314 | 44,456 | ||||
Prepaid expenses and other current assets | 37,334 | 31,486 | ||||
Total current assets | 479,970 | 394,786 | ||||
Property and equipment | 1,018,402 | 943,515 | ||||
Accumulated depreciation | (591,340) | (551,727) | ||||
Total property and equipment, net | 427,062 | 391,788 | ||||
Right-of-use assets, net | 48,275 | 47,732 | ||||
Other intangible assets, net | 100,455 | 108,472 | ||||
Other long-term assets, net | 16,639 | 7,414 | ||||
Total assets | $ | 1,072,401 | $ | 950,192 | ||
Liabilities and Equity | ||||||
Current liabilities | ||||||
Accounts payable | $ | 55,844 | $ | 36,049 | ||
Accrued accounts payable | 64,861 | 52,051 | ||||
Accounts payable and accrued expenses, related parties | 3,775 | 1,939 | ||||
Accrued salaries and benefits | 21,704 | 22,233 | ||||
Accrued insurance | 21,520 | 13,408 | ||||
Sales tax payable | 2,863 | 2,706 | ||||
Accrued expenses and other current liabilities | 21,957 | 19,544 | ||||
Current operating lease liabilities | 16,957 | 13,997 | ||||
Current portion of finance lease obligations | 19 | 113 | ||||
Total current liabilities | 209,500 | 162,040 | ||||
Long-term operating lease liabilities | 48,552 | 53,198 | ||||
Other long-term liabilities | 44,947 | 39,780 | ||||
Total liabilities | 302,999 | 255,018 | ||||
Commitments and contingencies | ||||||
Class A common stock, | 981 | 942 | ||||
Class A-2 common stock, | — | — | ||||
Class B common stock, | 162 | 162 | ||||
Preferred stock, | — | — | ||||
Additional paid-in capital | 977,063 | 950,464 | ||||
Accumulated deficit | (318,843) | (359,472) | ||||
Total stockholders' equity | 659,363 | 592,096 | ||||
Noncontrolling interests | 110,039 | 103,078 | ||||
Total equity | 769,402 | 695,174 | ||||
Total liabilities and equity | $ | 1,072,401 | $ | 950,192 |
SELECT ENERGY SERVICES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in thousands) | ||||||||||||
Three months ended | Nine months ended | |||||||||||
September 30, 2022 | June 30, 2022 | September 30, 2022 | September 30, 2021 | |||||||||
Cash flows from operating activities | ||||||||||||
Net income (loss) | $ | 24,717 | $ | 14,581 | $ | 47,283 | $ | (61,240) | ||||
Adjustments to reconcile net income (loss) to net cash provided | ||||||||||||
Depreciation and amortization | 27,215 | 29,779 | 84,061 | 67,407 | ||||||||
Loss (gain) on disposal of property and equipment and | 479 | (731) | (1,905) | 1,921 | ||||||||
Equity in losses of unconsolidated entities | 218 | 229 | 576 | 129 | ||||||||
Bad debt expense (recovery) | 828 | 692 | 2,091 | (651) | ||||||||
Amortization of debt issuance costs | 122 | 123 | 539 | 516 | ||||||||
Inventory write-downs | (801) | 189 | (612) | 139 | ||||||||
Equity-based compensation | 3,804 | 3,944 | 11,023 | 6,248 | ||||||||
Bargain purchase gain | 3,273 | (5,607) | (13,768) | — | ||||||||
Unrealized (gain) loss on short-term investment | (40) | — | — | 1,406 | ||||||||
Other operating items, net | (232) | (577) | (710) | (309) | ||||||||
Changes in operating assets and liabilities | ||||||||||||
Accounts receivable | (51,815) | (43,031) | (141,468) | (32,509) | ||||||||
Prepaid expenses and other assets | (5,820) | 1,066 | (200) | (10,284) | ||||||||
Accounts payable and accrued liabilities | 3,413 | 10,425 | 10,983 | 13,331 | ||||||||
Net cash provided by (used in) operating activities | 5,361 | 11,082 | (2,107) | (13,896) | ||||||||
Cash flows from investing activities | ||||||||||||
Purchase of property and equipment | (19,839) | (15,513) | (50,815) | (29,925) | ||||||||
Investment in note receivable | — | — | — | (1,101) | ||||||||
Purchase of equity method investments | (2,500) | (800) | (6,767) | (2,200) | ||||||||
Collection of note receivable | — | — | 184 | — | ||||||||
Distribution from cost method investment | — | 40 | 60 | 120 | ||||||||
Acquisitions and divestitures | 984 | (1,084) | 6,412 | (18,644) | ||||||||
Proceeds received from sales of property and equipment | 3,750 | 5,560 | 21,433 | 6,491 | ||||||||
Net cash used in investing activities | (17,605) | (11,797) | (29,493) | (45,259) | ||||||||
Cash flows from financing activities | ||||||||||||
Borrowings from revolving line of credit | 52,000 | 10,000 | 82,000 | — | ||||||||
Payments on revolving line of credit | (52,000) | (10,000) | (82,000) | — | ||||||||
Payments on long-term debt | — | — | (18,780) | — | ||||||||
Payments of finance lease obligations | (5) | (42) | (108) | (238) | ||||||||
Payment of debt issuance costs | — | (113) | (2,144) | — | ||||||||
Proceeds from share issuance | 10 | 13 | 35 | 43 | ||||||||
Distributions to noncontrolling interests | — | — | — | (1,074) | ||||||||
Repurchase of common stock | (272) | (787) | (19,967) | (1,206) | ||||||||
Net cash used in financing activities | (267) | (929) | (40,964) | (2,475) | ||||||||
Effect of exchange rate changes on cash | (9) | (13) | (15) | 4 | ||||||||
Net decrease in cash and cash equivalents | (12,520) | (1,657) | (72,579) | (61,626) | ||||||||
Cash and cash equivalents, beginning of period | 25,742 | 27,399 | 85,801 | 169,039 | ||||||||
Cash and cash equivalents, end of period | $ | 13,222 | $ | 25,742 | $ | 13,222 | $ | 107,413 |
Comparison of Non-GAAP Financial Measures
EBITDA, Adjusted EBITDA, gross profit before depreciation and amortization (D&A) and gross margin before D&A are not financial measures presented in accordance with accounting principles generally accepted in the U.S. ("GAAP"). We define EBITDA as net income (loss), plus interest expense, income taxes and depreciation and amortization. We define Adjusted EBITDA as EBITDA plus/(minus) loss/(income) from discontinued operations, plus any impairment charges or asset write-offs pursuant to GAAP, plus non-cash losses on the sale of assets or subsidiaries, non-recurring compensation expense, non-cash compensation expense, and non-recurring or unusual expenses or charges, including severance expenses, transaction costs, or facilities-related exit and disposal-related expenditures, plus/(minus) foreign currency losses/(gains) and plus/(minus) losses/(gains) on unconsolidated entities less bargain purchase gains from business combinations. We define gross profit before D&A as revenue less cost of revenue, excluding cost of sales D&A expense. We define gross margin before D&A as gross profit before D&A divided by revenue. EBITDA, Adjusted EBITDA, gross profit before D&A and gross margin before D&A are supplemental non-GAAP financial measures that we believe provide useful information to external users of our financial statements, such as industry analysts, investors, lenders and rating agencies because it allows them to compare our operating performance on a consistent basis across periods by removing the effects of our capital structure (such as varying levels of interest expense), asset base (such as depreciation and amortization) and non-recurring items outside the control of our management team. We present EBITDA, Adjusted EBITDA, gross profit before D&A and gross margin before D&A because we believe they provide useful information regarding the factors and trends affecting our business in addition to measures calculated under GAAP.
Net income (loss) is the GAAP measure most directly comparable to EBITDA and Adjusted EBITDA. Gross profit is the GAAP measure most directly comparable to gross profit before D&A. Our non-GAAP financial measures should not be considered as alternatives to the most directly comparable GAAP financial measure. Each of these non-GAAP financial measures has important limitations as an analytical tool due to exclusion of some but not all items that affect the most directly comparable GAAP financial measures. You should not consider EBITDA, Adjusted EBITDA or gross profit before D&A in isolation or as substitutes for an analysis of our results as reported under GAAP. Because EBITDA, Adjusted EBITDA and gross profit before D&A may be defined differently by other companies in our industry, our definitions of these non-GAAP financial measures may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.
The following table presents a reconciliation of EBITDA and Adjusted EBITDA to our net income (loss), which is the most directly comparable GAAP measure for the periods presented:
Three months ended, | |||||||||||||||
(unaudited) (in thousands) | September 30, 2022 | June 30, 2022 | September 30, 2021 | ||||||||||||
Net income (loss) | $ | 24,717 | $ | 14,581 | $ | (14,204) | |||||||||
Interest expense, net | 616 | 494 | 419 | ||||||||||||
Income tax expense (benefit) | 276 | 182 | (32) | ||||||||||||
Depreciation and amortization | 27,215 | 29,779 | 23,466 | ||||||||||||
EBITDA | 52,824 | 45,036 | 9,649 | ||||||||||||
Non-cash compensation expenses | 3,804 | 3,944 | 2,302 | ||||||||||||
Nonrecurring severance expenses | — | — | — | ||||||||||||
Non-cash loss on sale of assets or subsidiaries | 1,608 | 1,013 | 189 | ||||||||||||
Nonrecurring transaction costs | 965 | 2,879 | 2,709 | ||||||||||||
Lease abandonment costs | 83 | 162 | 154 | ||||||||||||
Bargain purchase gain | 3,273 | (5,607) | — | ||||||||||||
Equity in losses of unconsolidated entities | 218 | 229 | 129 | ||||||||||||
Foreign currency loss, net | 6 | 6 | 6 | ||||||||||||
Adjusted EBITDA | $ | 62,781 | $ | 47,662 | $ | 15,138 | |||||||||
The following table presents a reconciliation of gross profit before D&A to total gross profit (loss), which is the most directly comparable GAAP measure, and a calculation of gross margin before D&A for the periods presented:
Three months ended, | ||||||||||
(unaudited) (in thousands) | September 30, 2022 | June 30, 2022 | September 30, 2021 | |||||||
Gross profit (loss) by segment | ||||||||||
Water services | $ | 33,471 | $ | 22,567 | $ | 4,109 | ||||
Water infrastructure | 12,728 | 3,907 | 1,433 | |||||||
Oilfield chemicals | 12,640 | 9,188 | 3,443 | |||||||
Other | 1 | (1) | — | |||||||
As reported gross profit | 58,840 | 35,661 | 8,985 | |||||||
Plus depreciation and amortization | ||||||||||
Water services | 16,927 | 15,369 | 13,698 | |||||||
Water infrastructure | 7,471 | 11,438 | 6,860 | |||||||
Oilfield chemicals | 2,274 | 2,447 | 2,346 | |||||||
Other | — | — | — | |||||||
Total depreciation and amortization | 26,672 | 29,254 | 22,904 | |||||||
Gross profit before D&A | $ | 85,512 | $ | 64,915 | $ | 31,889 | ||||
Gross profit (loss) before D&A by segment | ||||||||||
Water services | 50,398 | 37,936 | 17,807 | |||||||
Water infrastructure | 20,199 | 15,345 | 8,293 | |||||||
Oilfield chemicals | 14,914 | 11,635 | 5,789 | |||||||
Other | 1 | (1) | — | |||||||
Total gross profit before D&A | $ | 85,512 | $ | 64,915 | $ | 31,889 | ||||
Gross margin before D&A by segment | ||||||||||
Water services | 22.8 % | 19.4 % | 15.8 % | |||||||
Water infrastructure | 27.2 % | 25.5 % | 22.5 % | |||||||
Oilfield chemicals | 18.8 % | 14.6 % | 10.5 % | |||||||
Other | n/a | n/a | n/a | |||||||
Total gross margin before D&A | 22.8 % | 19.3 % | 15.6 % |
Contacts: | Select Energy Services |
Chris George – Senior Vice President, | |
(713) 296-1073 | |
IR@selectenergyservices.com | |
Dennard Lascar Investor Relations | |
Ken Dennard | |
(713) 529-6600 | |
WTTR@dennardlascar.com |
SOURCE Select Energy Services, Inc.
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