Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2023 | Apr. 27, 2023 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-38090 | |
Entity Registrant Name | SOLARIS OILFIELD INFRASTRUCTURE, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 81-5223109 | |
Entity Address, Address Line One | 9811 Katy Freeway, Suite 700 | |
Entity Address, City or Town | Houston | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77024 | |
City Area Code | 281 | |
Local Phone Number | 501-3070 | |
Title of 12(b) Security | Class A Common Stock, $0.01 par value | |
Trading Symbol | SOI | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001697500 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Class A Common Stock | ||
Document and Entity Information | ||
Entity Common Stock, Shares Outstanding | 32,123,630 | |
Class B Common Stock | ||
Document and Entity Information | ||
Entity Common Stock, Shares Outstanding | 13,671,971 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 2,175 | $ 8,835 |
Accounts receivable, net of allowances for credit losses of $355 and $385, respectively | 68,124 | 64,543 |
Accounts receivable - related party | 3,840 | 4,925 |
Prepaid expenses and other current assets | 4,245 | 5,151 |
Inventories | 7,621 | 5,289 |
Total current assets | 86,005 | 88,743 |
Property, plant and equipment, net | 313,299 | 298,160 |
Non-current inventories | 1,730 | 1,569 |
Operating lease right-of-use assets | 3,850 | 4,033 |
Goodwill | 13,004 | 13,004 |
Intangible assets, net | 1,247 | 1,429 |
Deferred tax assets | 53,624 | 55,370 |
Other assets | 239 | 268 |
Total assets | 472,998 | 462,576 |
Current liabilities: | ||
Accounts payable | 29,817 | 25,934 |
Accrued liabilities | 22,370 | 25,252 |
Current portion of payables related to Tax Receivable Agreement | 1,092 | |
Current portion of operating lease liabilities | 923 | 917 |
Current portion of finance lease liabilities | 2,191 | 1,924 |
Other current liabilities | 790 | |
Total current liabilities | 55,301 | 55,909 |
Operating lease liabilities, net of current | 6,034 | 6,212 |
Borrowings under the credit agreement | 26,000 | 8,000 |
Finance lease liabilities, net of current | 3,359 | 3,429 |
Payables related to Tax Receivable Agreement | 71,530 | 71,530 |
Other long-term liabilities | 364 | 367 |
Total liabilities | 162,588 | 145,447 |
Commitments and contingencies (Note 8) | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value, 50,000 shares authorized, none issued and outstanding | ||
Additional paid-in capital | 194,463 | 202,551 |
Retained earnings | 13,081 | 12,847 |
Total stockholders' equity attributable to Solaris | 207,848 | 215,715 |
Non-controlling interest | 102,562 | 101,414 |
Total stockholders' equity | 310,410 | 317,129 |
Total liabilities and stockholders' equity | 472,998 | 462,576 |
Class A Common Stock | ||
Stockholders' equity: | ||
Common Stock | 304 | 317 |
Class B Common Stock | ||
Stockholders' equity: | ||
Common Stock |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Allowance for credit losses | $ 355 | $ 385 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 50,000 | 50,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Class A Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 600,000 | 600,000 |
Common stock, shares issued | 30,399 | 31,641 |
Common stock, shares outstanding | 30,399 | 31,641 |
Class B Common Stock | ||
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized | 180,000 | 180,000 |
Common stock, shares issued | 13,674 | 13,674 |
Common stock, shares outstanding | 13,674 | 13,674 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenue: | ||
Revenue | $ 77,828 | $ 51,836 |
Revenue - related parties | 4,894 | 5,079 |
Total revenue | 82,722 | 56,915 |
Operating costs and expenses: | ||
Cost of services (excluding depreciation) | 53,223 | 37,671 |
Depreciation and amortization | 8,417 | 6,929 |
Selling, general and administrative | 6,538 | 5,211 |
Other operating (income) expenses | (338) | (309) |
Total operating costs and expenses | 67,840 | 49,502 |
Operating income | 14,882 | 7,413 |
Interest expense, net | (459) | (79) |
Total other expense | (459) | (79) |
Income before income tax expense | 14,423 | 7,334 |
Income tax expense | (2,486) | (1,612) |
Net income | 11,937 | 5,722 |
Less: net income related to non-controlling interests | (4,368) | (2,220) |
Net income attributable to Solaris | $ 7,569 | $ 3,502 |
Class A Common Stock | ||
Operating costs and expenses: | ||
Income per share of Class A common stock - basic (in dollars per share) | $ 0.23 | $ 0.11 |
Income per share of Class A common stock - diluted (in dollars per share) | $ 0.23 | $ 0.11 |
Basic weighted-average shares of Class A common stock outstanding (in shares) | 31,214,271 | 31,239,351 |
Diluted weighted-average shares of Class A common stock outstanding used to calculate diluted net income per share | 31,214,271 | 31,239,351 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock Class A Common Stock | Common Stock Class B Common Stock | Additional Paid-in Capital | Retained Earnings | Non-controlling Interest | Total |
Balance at beginning of period at Dec. 31, 2021 | $ 312 | $ 196,912 | $ 5,925 | $ 94,727 | $ 297,876 | |
Balance at beginning of period (in shares) at Dec. 31, 2021 | 31,146 | 13,770 | ||||
Changes in Stockholders' Equity | ||||||
Net effect of deferred tax asset and payables related to the vesting of restricted stock | 610 | 610 | ||||
Stock-based compensation | 1,188 | 520 | 1,708 | |||
Vesting of restricted stock | $ 3 | 574 | (577) | |||
Vesting of restricted stock (in shares) | 366 | |||||
Cancelled shares withheld for taxes from RSU vesting | $ (1) | (302) | (388) | (299) | (990) | |
Cancelled shares withheld for taxes from RSU vesting (in shares) | (96) | |||||
Unitholder Distributions | (1,446) | (1,446) | ||||
Dividends paid (Class A common stock) | (3,441) | (3,441) | ||||
Net income | 3,502 | 2,220 | 5,722 | |||
Balance at end of period at Mar. 31, 2022 | $ 314 | 198,982 | 5,598 | 95,145 | 300,039 | |
Balance at end of period (in shares) at Mar. 31, 2022 | 31,416 | 13,770 | ||||
Balance at beginning of period at Dec. 31, 2022 | $ 317 | 202,551 | 12,847 | 101,414 | 317,129 | |
Balance at beginning of period (in shares) at Dec. 31, 2022 | 31,641 | 13,674 | ||||
Changes in Stockholders' Equity | ||||||
Share and unit repurchases and retirements | $ (17) | (10,543) | (3,295) | (572) | (14,427) | |
Share and unit repurchases and retirements (in shares) | (1,641) | |||||
Net effect of deferred tax asset and payables related to the vesting of restricted stock | 594 | 594 | ||||
Stock-based compensation | 1,494 | 660 | 2,154 | |||
Vesting of restricted stock | $ 5 | 903 | (908) | |||
Vesting of restricted stock (in shares) | 547 | |||||
Cancelled shares withheld for taxes from RSU vesting | $ (1) | (536) | (384) | (415) | (1,336) | |
Cancelled shares withheld for taxes from RSU vesting (in shares) | (148) | |||||
Unitholder Distributions | (1,985) | (1,985) | ||||
Dividends paid (Class A common stock) | (3,656) | (3,656) | ||||
Net income | 7,569 | 4,368 | 11,937 | |||
Balance at end of period at Mar. 31, 2023 | $ 304 | $ 194,463 | $ 13,081 | $ 102,562 | $ 310,410 | |
Balance at end of period (in shares) at Mar. 31, 2023 | 30,399 | 13,674 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY | ||
Cash dividends paid (in dollars per share) | $ 0.11 | $ 0.105 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities: | ||
Net income | $ 11,937 | $ 5,722 |
Adjustment to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 8,417 | 6,929 |
(Gain) loss on disposal of assets | (22) | 107 |
Stock-based compensation | 1,980 | 1,593 |
Amortization of debt issuance costs | 31 | 40 |
Deferred income tax expense | 2,329 | 1,455 |
Other | 10 | (1) |
Changes in assets and liabilities: | ||
Accounts receivable | (3,581) | (11,321) |
Accounts receivable - related party | 1,086 | (1,216) |
Prepaid expenses and other assets | 905 | 1,717 |
Inventories | (4,071) | (1,152) |
Accounts payable | 2,042 | 5,040 |
Accrued liabilities | (3,122) | (2,644) |
Payments pursuant to tax receivable agreement | (1,092) | |
Net cash provided by operating activities | 16,849 | 6,269 |
Cash flows from investing activities: | ||
Investment in property, plant and equipment | (18,949) | (11,776) |
Cash received from insurance proceeds | 231 | |
Proceeds from disposal of assets | 123 | 38 |
Net cash used in investing activities | (18,826) | (11,507) |
Cash flows from financing activities: | ||
Share repurchases | (14,427) | |
Distribution to unitholders (includes distribution of $1.5 million at $0.11/unit and $1.4 million at $0.105/unit, respectively | (1,985) | (1,446) |
Dividend paid to Class A common stock shareholders | (3,656) | (3,441) |
Borrowings under the credit agreement | 18,000 | |
Payments under finance leases | (738) | (8) |
Payments under insurance premium financing | (541) | (246) |
Payments for shares withheld for taxes from RSU vesting and cancelled | (1,336) | (990) |
Net cash used in financing activities | (4,683) | (6,131) |
Net decrease in cash | (6,660) | (11,369) |
Cash at beginning of period | 8,835 | 36,497 |
Cash at end of period | 2,175 | 25,128 |
Investing: | ||
Capitalized depreciation in property, plant and equipment | 129 | 146 |
Capitalized stock based compensation | 174 | 115 |
Property and equipment additions incurred but not paid at period-end | 5,015 | 2,827 |
Property, plant and equipment additions transferred from inventory | 1,578 | 575 |
Additions to fixed assets through finance leases | 933 | |
Cash paid for: | ||
Interest | 335 | 37 |
Income taxes | $ 1 | $ 22 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
Cash dividends paid (in dollars per share) | $ 0.11 | $ 0.105 |
Distribution to unitholders | $ 1.5 | $ 1.4 |
Organization and Background of
Organization and Background of Business | 3 Months Ended |
Mar. 31, 2023 | |
Organization and Background of Business | |
Organization and Background of Business | 1. Organization and Background of Business Description of Business We design and manufacture specialized equipment, which combined with field technician support, last mile logistics services and our software solutions, enables us to provide a service offering that helps oil and natural gas operators and their suppliers drive efficiencies that reduce operational footprint and costs during the completion phase of well development. Our equipment and services are deployed across active oil and natural gas basins in the United States. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation and Consolidation Solaris Oilfield Infrastructure, Inc. (either individually or together with its subsidiaries, as the context requires “Solaris Inc.” or the “Company”) is the managing member of Solaris Oilfield Infrastructure, LLC (“Solaris LLC”) and is responsible for all operational, management and administrative decisions relating to Solaris LLC’s business. Solaris Inc. consolidates the financial results of Solaris LLC and its subsidiaries and reports non-controlling interest related to the portion of the units in Solaris LLC (the “Solaris LLC Units”) not owned by Solaris Inc., which will reduce net income attributable to the holders of Solaris Inc.’s Class A common stock. The accompanying interim unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). These financial statements reflect all normal recurring adjustments that are necessary for fair presentation. Operating results for the three months ended March 31, 2023 and 2022 are not necessarily indicative of the results that may be expected for the full year or for any interim period. The unaudited interim condensed consolidated financial statements do not include all information or notes required by GAAP for annual financial statements and should be read together with Solaris Inc.’s Annual Report on Form 10-K for the year ended December 31, 2022 and notes thereto. All material intercompany transactions and balances have been eliminated upon consolidation. Use of Estimates The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The most significant estimates related to stock-based compensation, useful lives and salvage values of long-lived assets, future cash flows associated with goodwill and long-lived asset impairment evaluations, net realizable value of inventory, income taxes, Tax Receivable Agreement liability, collectability of accounts receivable and estimates of allowance for credit losses and determination of the present value of lease payments and right-of-use assets. Revenue Recognition The Company recognizes revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC Topic 606”). Under ASC Topic 606, revenue recognition is based on the transfer of control, or the customer’s ability to benefit from our services and products in an amount that reflects the consideration expected to be received in exchange for those services and products. The majority of our contracts contain multiple performance obligations, such as work orders containing a combination of equipment, last mile logistics services, and labor services. We allocate the transaction price to each performance obligation identified in the contract based on relative stand-alone selling prices, or estimates of such prices, and recognize the related revenue as control of each individual product or service is transferred to the customer, in satisfaction of the corresponding performance obligations. We measure progress using an input method based on resources consumed or expended relative to the total resources expected to be consumed or expended. We assess our customers’ ability and intention to pay, which is based on a variety of factors including historical payment experience and financial condition and we typically charge our customers on a weekly or monthly basis. Contracts with customers are typically on thirty- to sixty-day payment terms. Disaggregation of Revenue The following table summarizes revenues from our contracts disaggregated by revenue generating activity contained therein for the three months ended March 31, 2023 and 2022: Three Months Ended March 31, 2023 2022 Wellsite services $ 82.5 $ 56.6 Transloading and Other 0.2 0.3 Total revenue $ 82.7 $ 56.9 Recently Issued Accounting Standards In March 2020, the Financial Accounting Standards Board issued ASU No. 2020-04, Reference Rate Reform, which provided temporary optional guidance to companies impacted by the transition away from the London Interbank Offered Rate (“LIBOR”). The guidance provided certain expedients and exceptions to applying GAAP in order to lessen the potential accounting burden when contracts, hedging relationships, and other transactions that reference LIBOR as a benchmark rate are modified. The original guidance expired on December 31, 2022; however, ASU No. 2022-06 extended the effective date of the guidance to December 31, 2024. The Company is currently assessing the impact of the LIBOR transition and this ASU on the Company’s financial statements and any agreements utilizing LIBOR, including the Tax Receivable Agreement, but does not currently expect to have a material impact on our financial statements. |
Property, Plant and Equipment
Property, Plant and Equipment | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment | |
Property, Plant and Equipment | Property, plant and equipment are stated at cost. We manufacture or construct most of our systems. During the manufacturing of these assets, they are reflected as systems in process until complete. Modifications to existing systems, including the expenditures for upgrades and enhancements that result in additional functionality, increased efficiency, or the extension of the estimated useful life, are capitalized. Property, plant and equipment consists of the following: March 31, December 31, 2023 2022 Systems and related equipment $ 380.6 $ 369.3 Systems in process 41.4 30.1 Computer hardware and software 1.7 1.7 Machinery and equipment 5.4 5.4 Vehicles 13.2 13.2 Buildings 4.6 4.6 Land 0.6 0.6 Furniture and fixtures 0.4 0.4 Property, plant and equipment, gross $ 447.9 $ 425.3 Less: accumulated depreciation (134.6) (127.1) Property, plant and equipment, net $ 313.3 $ 298.2 |
Senior Secured Credit Facility
Senior Secured Credit Facility | 3 Months Ended |
Mar. 31, 2023 | |
Senior Secured Credit Facility | |
Senior Secured Credit Facility | 4. Senior Secured Credit Facility On April 28, 2023, Solaris LLC executed Amendment No. 2 to the Amended and Restated Credit Agreement, by and among Solaris LLC, as borrower, each of the guarantors party thereto, each of the lenders party thereto, and Wells Fargo Bank, National Association, as administrative agent (the “2023 Amendment”) to the Amended and Restated Credit Agreement (the “Credit Agreement”), which was entered into on April 26, 2019, by and among Solaris LLC, as borrower, each of the guarantors party thereto, each of the lenders party thereto and Wells Fargo Bank, National Association, as administrative agent, and contained an initial $50.0 borrowing facility. The 2023 Amendment introduced an additional As of March 31, 2023, we had $26.0 borrowings outstanding under the Credit Agreement. As of May 3, 2023, the Company has the ability to draw up to approximately $34.5 under the amended Credit Agreement. Our obligations under the Loan are generally secured by a pledge of substantially all the assets of Solaris LLC and its subsidiaries, and such obligations are guaranteed by Solaris LLC’s domestic subsidiaries other than Immaterial Subsidiaries (as defined in the Credit Agreement). We have the option to prepay the loans at any time without penalty. Borrowings under the Credit Agreement bear interest at either Term Secured Overnight Financing Rate (“SOFR”) or an alternate base rate plus an applicable margin, and interest is payable quarterly for alternate base rate loans or the last business day of the interest period applicable to SOFR loans. The applicable margin ranges from 2.75% to 3.50% for SOFR loans and 1.75% to 2.50% for alternate base rate loans, in each case depending on our total leverage ratio. The Credit Agreement requires that we pay a quarterly commitment fee on undrawn amounts of the Loan, ranging from 0.375% to 0.5% depending upon the total leverage ratio. The weighted average interest rate on the borrowings outstanding as of March 31, 2023 was approximately 7.87%. The Credit Agreement requires that we maintain ratios of (i) consolidated EBITDA to interest expense of not less than 2.75 to 1.00, (ii) senior indebtedness to consolidated EBITDA of not more than 2.50 to 1.00 and (iii) the sum of 100% of eligible accounts, inventory and fixed assets to the total revolving exposure of not less than 1.00 to 1.00 when the total leverage ratio is greater than 2.00 to 1.00 and total revolving exposure under the Loan exceeds $3.0. For the purpose of these tests, certain items are subtracted from indebtedness and senior indebtedness. EBITDA, as defined in the Credit Agreement, excludes certain noncash items and any extraordinary, unusual or nonrecurring gains, losses or expenses. The Credit Agreement also requires that we prepay any outstanding borrowings in the event our total consolidated cash balance exceeds $20.0 on the last business day of every other calendar week, taking into account certain adjustments. Capital expenditures are not restricted unless borrowings under the Loan exceed $5.0 for any 180 consecutive day period, in which case capital expenditures will be permitted up to $100.0 plus any unused availability for capital expenditures from the immediately preceding fiscal year. As of March 31, 2023, we were in compliance with all covenants under the Credit Agreement. |
Equity
Equity | 3 Months Ended |
Mar. 31, 2023 | |
Equity | |
Equity | Dividends Solaris LLC paid dividend distributions totaling $5.2 and $4.9 to all Solaris LLC unitholders in the three months ended March 31, 2023 and 2022, respectively, of which $3.7 and $3.4 was paid to Solaris Inc. Solaris Inc. used the proceeds from the distributions to pay quarterly cash dividends to all holders of shares of Class A common stock. On March 2, 2023, the Company’s board of directors authorized a share repurchase plan to repurchase up to $50.0 of the Company’s Class A common stock until the plan terminates pursuant to its provisions. During the three months ended March 31, 2023, Solaris Inc. purchased and retired 1,641,000 shares of the Company’s Class A common stock for $14.4, or $8.80 average price per share, and, in connection therewith, Solaris LLC purchased and retired 1,641,000 Solaris LLC Units from the Company for the same amount. We currently have $35.6 authorized under the share repurchase plan. Stock-based compensation The Company’s long-term incentive plan for employees, directors and consultants (the “LTIP”) provides for the grant of all or any of the following types of equity-based awards: (i) incentive stock options qualified as such under United States federal income tax laws; (ii) stock options that do not qualify as incentive stock options; (iii) stock appreciation rights; (iv) restricted stock awards; (v) restricted stock units; (vi) bonus stock; (vii) performance awards; (viii) dividend equivalents; (ix) other stock-based awards; (x) cash awards; and (xi) substitute awards. Subject to adjustment in accordance with the terms of the LTIP, 5,118,080 shares of Solaris Inc.’s Class A common stock have been reserved for issuance pursuant to awards under the LTIP. As of March 31, 2023, 812,686 stock awards were available for grant. The following table summarizes activity related to restricted stock for the three months ended March 31, 2023: Restricted Stock Awards Number of Shares Weighted Average Grant Date Fair Value ($) Unvested at January 1, 2023 1,295,728 $ 10.33 Awarded 790,201 9.19 Vested (548,992) 9.74 Forfeited (9,648) 9.82 Unvested at March 31, 2023 1,527,289 $ 9.71 Of the 1,527,289 unvested shares of restricted stock, it is expected that 92,776 shares, 659,693 shares, 527,652 shares, and 247,168 shares will vest in 2023, 2024, 2025 and 2026, respectively, in each case, subject to the applicable vesting terms governing such shares of restricted stock. There was approximately $13.7 of unrecognized compensation expense related to unvested restricted stock as of March 31, 2023. The unrecognized compensation expense will be recognized over the weighted average remaining vesting period of During the three-month period ending March 31, 2023, we granted 176,898 performance-based restricted stock units (“PSUs”), with a weighted average grant date fair value of $11.92 per share to management under the LTIP. The performance criteria for the PSUs are split as follows: ● Relative PSUs: 50% of the PSUs are based on total shareholder return relative to the total shareholder return of a predetermined group of peer companies. This relative total shareholder return is calculated at the end of the performance periods stipulated in the PSU agreement. ● Absolute PSUs: 50% of the PSUs have a performance criteria of absolute total shareholder return calculated at the end of the performance period stipulated in the PSU agreement. The vesting and payout of the PSUs occur when the related service condition is completed, which is approximately three years after the grant date regardless of the duration of the stipulated performance period. The PSUs can be paid out in either Class A common stock or cash, at our election. Dividends accrue on PSUs and are paid upon vesting. As of March 31, 2023, $2.0 of compensation cost related to unvested PSUs remained to be recognized. The cost is expected to be recognized over a weighted-average period of 2.5 years. The grant date fair value was determined using the Monte Carlo simulation method and is expensed ratably over the service period. Expected volatilities used in the fair value simulation were estimated using historical periods consistent with the remaining performance periods. The risk-free rate was based on the U.S. Treasury rate for a term commensurate with the expected life of the grant. We used the following assumptions to estimate the fair value of PSUs granted during the three months ended March 31, 2023: Assumptions Risk-free interest rate 4.6% Volatility 58.93% The following table summarizes activity related to PSUs for the three months ended March 31, 2023: Weighted-Average Grant Date Fair Number of Units Value ($) Outstanding at January 1, 2023 — $ — Granted 176,898 11.92 Forfeited — — Outstanding at March 31, 2023 176,898 $ 11.92 Income (Loss) Per Share Basic income (loss) per share of Class A common stock is computed by dividing net income (loss) attributable to Solaris Inc. by the weighted-average number of shares of Class A common stock outstanding during the same period. Diluted income (loss) per share is computed giving effect to all potentially dilutive shares. The following table sets forth the calculation of income (loss) per share for the three months ended March 31, 2023 and 2022: Three Months Ended March 31, Basic net income (loss) per share: 2023 2022 Numerator Net income attributable to Solaris $ 7.6 $ 3.5 Less: income attributable to participating securities (1) (0.4) (0.1) Net income attributable to common stockholders $ 7.2 $ 3.4 Denominator Weighted average number of unrestricted outstanding common shares used to calculate basic net income per share 31,214,271 31,239,351 Diluted weighted-average shares of Class A common stock outstanding used to calculate diluted net income per share 31,214,271 31,239,351 Income per share of Class A common stock - basic $ 0.23 $ 0.11 Income per share of Class A common stock - diluted $ 0.23 $ 0.11 (1) The Company’s restricted shares of common stock are participating securities. The following number of weighted-average potentially dilutive shares were excluded from the calculation of diluted income (loss) per share because the effect of including such potentially dilutive shares would have been antidilutive upon conversion: Three Months Ended March 31, 2023 2022 Class B common stock 13,671,971 13,768,517 Restricted stock awards 1,374,760 1,025,513 Performance-based restricted stock awards 176,898 — Stock Options 5,440 7,122 Total 15,229,069 14,801,152 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Taxes | |
Income Taxes | 6. Income Taxes Income Taxes between the book value and the tax basis of the Company’s investment in Solaris LLC. This difference originates from the equity offerings of Class A common stock, exchanges of Solaris LLC Units (together with a corresponding number of shares of Class B common stock) for shares of Class A common stock, and issuances of Class A common stock, and corresponding Solaris LLC Units, in connection with stock-based compensation. Based on our cumulative earnings history and forecasted future sources of taxable income, we believe that we will be able to realize our deferred tax assets in the future. As the Company reassesses this position in the future, changes in cumulative earnings history, excluding non-recurring charges, or changes to forecasted taxable income may alter this expectation and may result in an increase in the valuation allowance and an increase in the effective tax rate. Section 382 of the Internal Revenue Code of 1986, contains rules that limit the ability of a company that undergoes an “ownership change” to utilize its net operating loss and tax credit carryovers and certain built-in losses recognized in years after the “ownership change.” An “ownership change” is generally defined as any change in ownership of more than 50% of a corporation’s stock over a rolling three-year period by stockholders that own (directly or indirectly) 5% or more of the stock of a corporation, or arising from a new issuance of stock by a corporation. If an ownership change occurs, Section 382 generally imposes an annual limitation on the use of pre-ownership change net operating loss carryovers to offset taxable income earned after the ownership change. We do not believe the Section 382 annual limitation related to historical ownership changes impacts our ability to utilize our net operating losses; however, if we were to experience a future ownership change our ability to use net operating losses may be impacted. Payables Related to the Tax Receivable Agreement |
Concentrations
Concentrations | 3 Months Ended |
Mar. 31, 2023 | |
Concentrations | |
Concentrations | 7. Concentrations For the three months ended March 31, 2023, three customers accounted for 13%, 12% and 11% of the Company’s revenues. For the three months ended March 31, 2022, one customer accounted for 29% of the Company’s revenues. As of March 31, 2023, one customer accounted for 13% of the Company’s accounts receivable. As of December 31, 2022, one customer accounted for 22% of the Company’s accounts receivable. For the three months ended March 31, 2023, no suppliers accounted for more than 10% of the Company’s total purchases. For the three months ended March 31, 2022, one supplier accounted for 11% of the Company’s total purchases. As of March 31, 2023, no supplier accounted for more than 10% of the Company’s accounts payable. As of December 31, 2022, one supplier accounted for 13% of the Company’s accounts payable. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies | |
Commitments and Contingencies | 8. Commitments and Contingencies Tax Matters We are subject to a number of state and local taxes that are not income-based. As many of these taxes are subject to assessment and audit by the taxing authorities, it is possible that an assessment or audit could result in additional taxes due. We accrue for additional taxes when we determine that it is probable that we will have incurred a liability and we can reasonably estimate the amount of the liability. On June 16, 2022, Cause Number CV20-09-372, styled Solaris Oilfield Site Services v. Brown County Appraisal District, was presented to the 35th District Court of Brown County, Texas. The 35 th Litigation and Claims In the normal course of business, the Company is subjected to various claims, legal actions, contract negotiations and disputes. The Company provides for losses, if any, in the year in which they can be reasonably estimated. In management’s opinion, there are currently no such matters outstanding that would have a material effect on the accompanying condensed consolidated financial statements. See Note 9 “Related Party Transactions” for contingent payments related to contracts with customers. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2023 | |
Related Party Transactions | |
Related Party Transactions | 9. Related Party Transactions The Company recognizes certain costs incurred in relation to transactions incurred in connection with the amended and restated administrative services agreement, dated May 17, 2017, between Solaris LLC and Solaris Energy Management, LLC, a company owned by William A. Zartler, the Chief Executive Officer and Chairman of the Board. These services include rent paid for office space, travel services, personnel, consulting and administrative costs. For the three months ended March 31, 2023 and 2022, Solaris LLC paid $0.5 and $0.2 , respectively, for these services. As of March 31, 2023, and December 31, 2022, the Company included $0.1 and $0.1 , respectively, in prepaid expenses and other current assets on the condensed consolidated balance sheets. Additionally, as of March 31, 2023 and December 31, 2022, the Company included $0.1 and $0.1 , respectively, of accruals to related parties in accrued liabilities on the consolidated balance sheet The Company has executed a guarantee of lease agreement with Solaris Energy Management, LLC, a related party of the Company, related to the rental of office space for the Company’s corporate headquarters. The total future guaranty under the guarantee of lease agreement with Solaris Energy Management, LLC is $4.1 as of March 31, 2023. As of March 31, 2023, THRC Holdings, LP, an entity managed by THRC Management, LLC (collectively “THRC”), held shares representing a 9.6% ownership of the Company’s Class A common stock and 6.9% total shares outstanding. THRC is affiliated with certain of the Company’s customers, including ProFrac Services, LLC (“ProFrac”) and certain of the Company’s suppliers including Automatize Logistics, LLC, IOT-EQ, LLC and Cisco Logistics, LLC (“Cisco”) (together the “THRC Affiliates”). For the three months ended March 31, 2023, the Company recognized revenues related to our service offering provided to the THRC Affiliates of $4.9. Accounts receivable related to THRC Affiliates as of March 31, 2023 was $3.8. For the three months ended March 31, 2023, the Company recognized cost of services provided by THRC Affiliates of $1.1. There was $1.0 of accounts payable related to THRC Affiliates as of March 31, 2023. Solaris is the dedicated wellsite sand storage provider (“Services”) to certain THRC Affiliates. Solaris provides volume-based pricing for the Services and may be required to pay up to $4.0 in payments throughout a term ending in 2024, contingent upon the ability of these affiliates to meet minimum Services revenue thresholds. As of March 31, 2023, accounts payable to THRC Affiliates related to these services is $0.9, which was recognized in revenues. On January 31, 2023, the Company made payments of $1.1 under the Tax Receivable Agreement. Solaris LLC made a tax distribution to Solaris Inc. of $1.1 to satisfy these obligations and concurrently made a cash distribution on a pro rata basis to each of the other members of Solaris LLC of $0.4. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2023 | |
Subsequent Events | |
Subsequent Events | 10. Subsequent Events On April 28, 2023, the Company executed a second amendment to the Credit Agreement. Refer to Note 4. “Senior Secured Credit Facility.” |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Summary of Significant Accounting Policies | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation Solaris Oilfield Infrastructure, Inc. (either individually or together with its subsidiaries, as the context requires “Solaris Inc.” or the “Company”) is the managing member of Solaris Oilfield Infrastructure, LLC (“Solaris LLC”) and is responsible for all operational, management and administrative decisions relating to Solaris LLC’s business. Solaris Inc. consolidates the financial results of Solaris LLC and its subsidiaries and reports non-controlling interest related to the portion of the units in Solaris LLC (the “Solaris LLC Units”) not owned by Solaris Inc., which will reduce net income attributable to the holders of Solaris Inc.’s Class A common stock. The accompanying interim unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). These financial statements reflect all normal recurring adjustments that are necessary for fair presentation. Operating results for the three months ended March 31, 2023 and 2022 are not necessarily indicative of the results that may be expected for the full year or for any interim period. The unaudited interim condensed consolidated financial statements do not include all information or notes required by GAAP for annual financial statements and should be read together with Solaris Inc.’s Annual Report on Form 10-K for the year ended December 31, 2022 and notes thereto. All material intercompany transactions and balances have been eliminated upon consolidation. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The most significant estimates related to stock-based compensation, useful lives and salvage values of long-lived assets, future cash flows associated with goodwill and long-lived asset impairment evaluations, net realizable value of inventory, income taxes, Tax Receivable Agreement liability, collectability of accounts receivable and estimates of allowance for credit losses and determination of the present value of lease payments and right-of-use assets. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with ASC Topic 606, Revenues from Contracts with Customers (“ASC Topic 606”). Under ASC Topic 606, revenue recognition is based on the transfer of control, or the customer’s ability to benefit from our services and products in an amount that reflects the consideration expected to be received in exchange for those services and products. The majority of our contracts contain multiple performance obligations, such as work orders containing a combination of equipment, last mile logistics services, and labor services. We allocate the transaction price to each performance obligation identified in the contract based on relative stand-alone selling prices, or estimates of such prices, and recognize the related revenue as control of each individual product or service is transferred to the customer, in satisfaction of the corresponding performance obligations. We measure progress using an input method based on resources consumed or expended relative to the total resources expected to be consumed or expended. We assess our customers’ ability and intention to pay, which is based on a variety of factors including historical payment experience and financial condition and we typically charge our customers on a weekly or monthly basis. Contracts with customers are typically on thirty- to sixty-day payment terms. Disaggregation of Revenue The following table summarizes revenues from our contracts disaggregated by revenue generating activity contained therein for the three months ended March 31, 2023 and 2022: Three Months Ended March 31, 2023 2022 Wellsite services $ 82.5 $ 56.6 Transloading and Other 0.2 0.3 Total revenue $ 82.7 $ 56.9 |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In March 2020, the Financial Accounting Standards Board issued ASU No. 2020-04, Reference Rate Reform, which provided temporary optional guidance to companies impacted by the transition away from the London Interbank Offered Rate (“LIBOR”). The guidance provided certain expedients and exceptions to applying GAAP in order to lessen the potential accounting burden when contracts, hedging relationships, and other transactions that reference LIBOR as a benchmark rate are modified. The original guidance expired on December 31, 2022; however, ASU No. 2022-06 extended the effective date of the guidance to December 31, 2024. The Company is currently assessing the impact of the LIBOR transition and this ASU on the Company’s financial statements and any agreements utilizing LIBOR, including the Tax Receivable Agreement, but does not currently expect to have a material impact on our financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Summary of Significant Accounting Policies | |
Schedule of disaggregated revenues from contracts | Three Months Ended March 31, 2023 2022 Wellsite services $ 82.5 $ 56.6 Transloading and Other 0.2 0.3 Total revenue $ 82.7 $ 56.9 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment | |
Schedule of property plant and equipment | March 31, December 31, 2023 2022 Systems and related equipment $ 380.6 $ 369.3 Systems in process 41.4 30.1 Computer hardware and software 1.7 1.7 Machinery and equipment 5.4 5.4 Vehicles 13.2 13.2 Buildings 4.6 4.6 Land 0.6 0.6 Furniture and fixtures 0.4 0.4 Property, plant and equipment, gross $ 447.9 $ 425.3 Less: accumulated depreciation (134.6) (127.1) Property, plant and equipment, net $ 313.3 $ 298.2 |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Equity | |
Summary of activity related to restricted stock | Restricted Stock Awards Number of Shares Weighted Average Grant Date Fair Value ($) Unvested at January 1, 2023 1,295,728 $ 10.33 Awarded 790,201 9.19 Vested (548,992) 9.74 Forfeited (9,648) 9.82 Unvested at March 31, 2023 1,527,289 $ 9.71 |
Schedule of assumptions used to estimate the fair value of PSUs granted | Assumptions Risk-free interest rate 4.6% Volatility 58.93% |
Schedule of PSU activity | Weighted-Average Grant Date Fair Number of Units Value ($) Outstanding at January 1, 2023 — $ — Granted 176,898 11.92 Forfeited — — Outstanding at March 31, 2023 176,898 $ 11.92 |
Schedule of earnings per share calculation | Three Months Ended March 31, Basic net income (loss) per share: 2023 2022 Numerator Net income attributable to Solaris $ 7.6 $ 3.5 Less: income attributable to participating securities (1) (0.4) (0.1) Net income attributable to common stockholders $ 7.2 $ 3.4 Denominator Weighted average number of unrestricted outstanding common shares used to calculate basic net income per share 31,214,271 31,239,351 Diluted weighted-average shares of Class A common stock outstanding used to calculate diluted net income per share 31,214,271 31,239,351 Income per share of Class A common stock - basic $ 0.23 $ 0.11 Income per share of Class A common stock - diluted $ 0.23 $ 0.11 (1) The Company’s restricted shares of common stock are participating securities. |
Schedule of antidilutive shares | Three Months Ended March 31, 2023 2022 Class B common stock 13,671,971 13,768,517 Restricted stock awards 1,374,760 1,025,513 Performance-based restricted stock awards 176,898 — Stock Options 5,440 7,122 Total 15,229,069 14,801,152 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Revenues Disaggregated (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 82,722 | $ 56,915 |
Wellsite services | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 82,500 | 56,600 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 200 | $ 300 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment | ||
Property, plant and equipment, gross | $ 447,900 | $ 425,300 |
Less: accumulated depreciation | (134,600) | (127,100) |
Property, plant and equipment, net | 313,299 | 298,160 |
Systems and related equipment | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 380,600 | 369,300 |
Systems in process | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 41,400 | 30,100 |
Vehicles | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 13,200 | 13,200 |
Machinery and equipment | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 5,400 | 5,400 |
Buildings | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 4,600 | 4,600 |
Computer hardware and software | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 1,700 | 1,700 |
Land | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 600 | 600 |
Furniture and fixtures | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | $ 400 | $ 400 |
Senior Secured Credit Facility
Senior Secured Credit Facility (Details) - USD ($) $ in Millions | Apr. 28, 2023 | Apr. 26, 2019 | Mar. 31, 2023 |
2019 Credit Agreement | |||
Senior Secured Credit Facility | |||
Maximum borrowing | $ 50 | ||
Cash adjustment to net indebtedness | $ 3 | ||
Senior indebtedness to consolidated EBITDA | 2.50 | ||
Eligible accounts (as a percent) | 100% | ||
Eligible accounts to revolving exposure ratio | 1 | ||
Leverage ratio for debt repayment | 2 | ||
Ratio of consolidated EBITDA to fixed charges | 2.75% | ||
2023 Credit Agreement | |||
Senior Secured Credit Facility | |||
Outstanding credit facility | $ 26 | ||
Remaining borrowing capacity | $ 34.5 | ||
Weighted average interest rate (as a percent) | 7.87% | ||
2023 Credit Agreement | Subsequent Event | |||
Senior Secured Credit Facility | |||
Maximum borrowing | $ 75 | ||
Potential additional borrowing available | 25 | ||
Maximum borrowing capacity with accordion option | 100 | ||
Cash threshold triggering repayment | 20 | ||
Cash threshold over a period of time triggering repayment | $ 5 | ||
Period for cash threshold repayment trigger | 180 days | ||
Maximum capital expenditures allowed | $ 100 | ||
2023 Credit Agreement | First quarter of 2024 | Subsequent Event | |||
Senior Secured Credit Facility | |||
Reducing revolver, percentage | 15% | ||
2023 Credit Agreement | First quarter 2025 | Subsequent Event | |||
Senior Secured Credit Facility | |||
Reducing revolver, percentage | 20% | ||
2023 Credit Agreement | Minimum | Subsequent Event | |||
Senior Secured Credit Facility | |||
Commitment fee (as a percent) | 0.375% | ||
2023 Credit Agreement | Maximum | Subsequent Event | |||
Senior Secured Credit Facility | |||
Commitment fee (as a percent) | 0.50% | ||
2023 Credit Agreement | SOFR | Minimum | Subsequent Event | |||
Senior Secured Credit Facility | |||
Interest rate | 2.75% | ||
2023 Credit Agreement | SOFR | Maximum | Subsequent Event | |||
Senior Secured Credit Facility | |||
Interest rate | 3.50% | ||
2023 Credit Agreement | Alternate base rate | Minimum | Subsequent Event | |||
Senior Secured Credit Facility | |||
Interest rate | 1.75% | ||
2023 Credit Agreement | Alternate base rate | Maximum | Subsequent Event | |||
Senior Secured Credit Facility | |||
Interest rate | 2.50% |
Equity - Dividends (Details)
Equity - Dividends (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |
Jan. 31, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | |
Equity | |||
Distributions paid to unit holders | $ 1,985 | $ 1,446 | |
Dividend paid to common stock | 3,656 | 3,441 | |
Solaris LLC | |||
Equity | |||
Distributions paid to unit holders | $ 400 | $ 5,200 | $ 4,900 |
Equity - Share Repurchase (Deta
Equity - Share Repurchase (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 02, 2023 | |
Equity | ||
Share Repurchase, Authorized | $ 35.6 | |
Solaris LLC | ||
Equity | ||
Repurchased and retired (in shares) | 1,641,000 | |
Class A Common Stock | ||
Equity | ||
Repurchased and retired (in shares) | 1,641,000 | |
Repurchased and retired | $ 14.4 | |
Average price (in dollars per share) | $ 8.80 | |
Class A Common Stock | Maximum | ||
Equity | ||
Share Repurchase, Authorized | $ 50 |
Equity - SBC (Details)
Equity - SBC (Details) - LTIP | Mar. 31, 2023 shares |
Stock-based compensation | |
Available for grant (in shares) | 812,686 |
Class A Common Stock | |
Stock-based compensation | |
Reserved for issuance (in shares) | 5,118,080 |
Equity - Restricted stock (Deta
Equity - Restricted stock (Details) - Restricted stock awards $ / shares in Units, $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) $ / shares shares | |
Number of Shares | |
Unvested, beginning (in shares) | 1,295,728 |
Awarded (in shares) | 790,201 |
Vested (in shares) | (548,992) |
Forfeited (in shares) | (9,648) |
Unvested, end (in shares) | 1,527,289 |
Weighted Average Grant Date Fair Value | |
Unvested, beginning (in dollars per share) | $ / shares | $ 10.33 |
Awarded (in dollars per share) | $ / shares | 9.19 |
Vested (in dollars per share) | $ / shares | 9.74 |
Forfeited (in dollars per share) | $ / shares | 9.82 |
Unvested, end (in dollars per share) | $ / shares | $ 9.71 |
Other non-option information | |
Unrecognized compensation costs | $ | $ 13.7 |
Expected period for recognizing compensation expense | 1 year 7 months 6 days |
First vesting period | |
Number of Shares | |
Unvested, end (in shares) | 92,776 |
Second vesting period | |
Number of Shares | |
Unvested, end (in shares) | 659,693 |
Third vesting period | |
Number of Shares | |
Unvested, end (in shares) | 527,652 |
Fourth vesting period | |
Number of Shares | |
Unvested, end (in shares) | 247,168 |
Equity - Performance Stock Unit
Equity - Performance Stock Units (Details) $ / shares in Units, $ in Millions | 3 Months Ended |
Mar. 31, 2023 USD ($) $ / shares shares | |
Restricted stock awards | |
Other non-option information | |
Unrecognized compensation costs | $ | $ 13.7 |
Expected period for recognizing compensation expense | 1 year 7 months 6 days |
Number of Shares | |
Unvested, beginning (in shares) | shares | 1,295,728 |
Awarded (in shares) | shares | 790,201 |
Forfeited (in shares) | shares | (9,648) |
Unvested, end (in shares) | shares | 1,527,289 |
Weighted Average Grant Date Fair Value | |
Unvested, beginning (in dollars per share) | $ / shares | $ 10.33 |
Awarded (in dollars per share) | $ / shares | 9.19 |
Forfeited (in dollars per share) | $ / shares | 9.82 |
Unvested, end (in dollars per share) | $ / shares | $ 9.71 |
Performance-based restricted stock awards | |
Other non-option information | |
Relative PSUs (percentage) | 50% |
Absolute PSUs (percentage) | 50% |
Unrecognized compensation costs | $ | $ 2 |
Expected period for recognizing compensation expense | 2 years 6 months |
Assumptions | |
Expected risk-free rate of return (as a percent) | 4.60% |
Expected volatility (as a percent) | 58.93% |
Number of Shares | |
Awarded (in shares) | shares | 176,898 |
Unvested, end (in shares) | shares | 176,898 |
Weighted Average Grant Date Fair Value | |
Awarded (in dollars per share) | $ / shares | $ 11.92 |
Unvested, end (in dollars per share) | $ / shares | $ 11.92 |
Equity - EPS (Details)
Equity - EPS (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Numerator | ||
Net income attributable to Solaris | $ 7,569 | $ 3,502 |
Less: income attributable to participating securities | (400) | (100) |
Net income attributable to common stockholders | $ 7,200 | $ 3,400 |
Class A Common Stock | ||
Denominator | ||
Weighted average number of unrestricted outstanding common shares used to calculate basic net income per share | 31,214,271 | 31,239,351 |
Diluted weighted-average shares of Class A common stock outstanding used to calculate diluted net income per share | 31,214,271 | 31,239,351 |
Income per share of Class A common stock - basic (in dollars per share) | $ 0.23 | $ 0.11 |
Income per share of Class A common stock - diluted (in dollars per share) | $ 0.23 | $ 0.11 |
Equity - Antidilutive (Details)
Equity - Antidilutive (Details) - shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Potentially dilutive shares | ||
Excluded from EPS calculation (in shares) | 15,229,069 | 14,801,152 |
Class B Common Stock | ||
Potentially dilutive shares | ||
Excluded from EPS calculation (in shares) | 13,671,971 | 13,768,517 |
Restricted stock awards | ||
Potentially dilutive shares | ||
Excluded from EPS calculation (in shares) | 1,374,760 | 1,025,513 |
Performance-based restricted stock awards | ||
Potentially dilutive shares | ||
Excluded from EPS calculation (in shares) | 176,898 | |
Stock options | ||
Potentially dilutive shares | ||
Excluded from EPS calculation (in shares) | 5,440 | 7,122 |
Income Taxes - Quarter (Details
Income Taxes - Quarter (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |
Jan. 31, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | |
Income tax expense | $ (2,486) | $ (1,612) | |
Effective tax rate | 17.20% | 22.30% | |
Distributions paid to unit holders | $ 1,985 | $ 1,446 | |
Solaris LLC | |||
Distributions paid to unit holders | $ 400 | 5,200 | $ 4,900 |
Tax Receivable Agreement | |||
Payments pursuant to tax receivable agreement | 1,100 | ||
Distributions paid to unit holders | $ 1,100 | ||
Payables related to Tax Receivable Agreement | $ 71,500 | ||
Benefit of remaining cash savings (as a percent) | 85% |
Concentrations (Details)
Concentrations (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Revenue | Customer | One Customer | |||
Concentrations | |||
Concentration risk (as a percent) | 13% | 29% | |
Revenue | Customer | Two Customers | |||
Concentrations | |||
Concentration risk (as a percent) | 12% | ||
Revenue | Customer | Three Customers | |||
Concentrations | |||
Concentration risk (as a percent) | 11% | ||
Accounts receivable | Customer | One Customer | |||
Concentrations | |||
Concentration risk (as a percent) | 13% | 22% | |
Purchases | Supplier | One Supplier | |||
Concentrations | |||
Concentration risk (as a percent) | 11% | ||
Accounts payables | Supplier | One Supplier | |||
Concentrations | |||
Concentration risk (as a percent) | 13% |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Mar. 31, 2023 USD ($) |
Solaris Energy Management, LLC | |
Other commitments | $ 4.1 |
Accrued tax expense | |
Other commitments | $ 3.1 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Jan. 31, 2023 | Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Related Party Transactions | ||||
Revenue from related party | $ 4,894 | $ 5,079 | ||
Distributions paid to unit holders | 1,985 | 1,446 | ||
Tax Receivable Agreement | ||||
Related Party Transactions | ||||
Payments pursuant to tax receivable agreement | $ 1,100 | |||
Distributions paid to unit holders | 1,100 | |||
William A. Zartler | ||||
Related Party Transactions | ||||
Payment made to related party | 500 | 200 | ||
Due to related party | 100 | $ 100 | ||
William A. Zartler | Prepaid operating expenses and other current assets | ||||
Related Party Transactions | ||||
Due from related party | 100 | $ 100 | ||
Solaris Energy Management, LLC | ||||
Related Party Transactions | ||||
Other commitments | 4,100 | |||
THRC Affiliates | ||||
Related Party Transactions | ||||
Due from related party | 3,800 | |||
Due to related party | 1,000 | |||
Revenue from related party | 4,900 | |||
Related party costs | 1,100 | |||
THRC Affiliates - Services | ||||
Related Party Transactions | ||||
Revenue from related party | 900 | |||
Other commitments | 4,000 | |||
Solaris LLC | ||||
Related Party Transactions | ||||
Distributions paid to unit holders | $ 400 | $ 5,200 | $ 4,900 | |
THRC | Solaris Oilfield Infrastructure | ||||
Related Party Transactions | ||||
Noncontrolling interest (as a percent) | 6.90% | |||
THRC | Solaris Oilfield Infrastructure | Class A Common Stock | ||||
Related Party Transactions | ||||
Noncontrolling interest (as a percent) | 9.60% |