Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Feb. 18, 2022 | Jun. 30, 2021 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
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 | ||
Trading Symbol | SOI | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | true | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Auditor Name | BDO USA, LLP | ||
Auditor Firm ID | 243 | ||
Auditor Location | Houston, Texas | ||
Entity Public Float | $ 301,698,167 | ||
Entity Central Index Key | 0001697500 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Class A Common Stock | |||
Document and Entity Information | |||
Entity Common Stock, Shares Outstanding | 31,993,107 | ||
Class B Common Stock | |||
Document and Entity Information | |||
Entity Common Stock, Shares Outstanding | 13,768,517 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 36,497 | $ 60,366 |
Accounts receivable, net of allowances of $746 and $1,099, respectively | 33,120 | 18,243 |
Prepaid expenses and other current assets | 9,797 | 2,169 |
Inventories | 1,654 | 954 |
Total current assets | 81,068 | 81,732 |
Property, plant and equipment, net | 240,091 | 245,884 |
Non-current inventories | 2,676 | 3,318 |
Operating lease right-of-use assets | 4,182 | 4,708 |
Goodwill | 13,004 | 13,004 |
Intangible assets, net | 2,203 | 2,982 |
Deferred tax assets, net | 62,942 | 59,805 |
Other assets | 57 | 463 |
Total assets | 406,223 | 411,896 |
Current liabilities: | ||
Accounts payable | 9,927 | 6,863 |
Accrued liabilities | 16,918 | 11,986 |
Current portion of payables related to Tax Receivable Agreement | 1,210 | 606 |
Current portion of operating lease liabilities | 717 | 647 |
Current portion of finance lease liabilities | 31 | 30 |
Other current liabilities | 496 | 75 |
Total current liabilities | 29,299 | 20,207 |
Operating lease liabilities, net of current | 6,702 | 7,419 |
Finance lease liabilities, net of current | 70 | 100 |
Payables related to Tax Receivable Agreement | 71,892 | 68,097 |
Other long-term liabilities | 384 | 594 |
Total liabilities | 108,347 | 96,417 |
Commitments and contingencies (Note 12) | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value, 50,000 shares authorized, none issued and outstanding | ||
Additional paid-in capital | 196,912 | 180,415 |
Retained earnings | 5,925 | 20,549 |
Total stockholders' equity attributable to Solaris | 203,149 | 201,254 |
Non-controlling interest | 94,727 | 114,225 |
Total stockholders' equity | 297,876 | 315,479 |
Total liabilities and stockholders' equity | 406,223 | 411,896 |
Class A Common Stock | ||
Stockholders' equity: | ||
Common Stock | 312 | 290 |
Class B Common Stock | ||
Stockholders' equity: | ||
Common Stock |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Allowance for credit losses | $ 746 | $ 1,099 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
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 | 600,000,000 | 600,000,000 |
Common stock, shares issued | 31,146,000 | 28,943,000 |
Common stock, shares outstanding | 31,146,000 | 28,943,000 |
Class B Common Stock | ||
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized | 180,000,000 | 180,000,000 |
Common stock, shares issued | 13,770,000 | 15,685,000 |
Common stock, shares outstanding | 13,770,000 | 15,685,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue: | |||
Total revenue | $ 159,189 | $ 102,976 | $ 241,687 |
Operating costs and expenses: | |||
Cost of services (exclusive of depreciation) | 115,459 | 65,764 | 87,661 |
Depreciation and amortization | 27,210 | 27,021 | 26,925 |
Selling, general and administrative | 19,264 | 16,481 | 18,586 |
Impairment losses | 47,828 | ||
Other operating (income) expenses | (2,357) | 5,782 | 585 |
Total operating costs and expenses | 159,576 | 162,876 | 133,757 |
Operating income (loss) | (387) | (59,900) | 107,930 |
Interest expense, net | (247) | (162) | (634) |
Total other income (expense) | (247) | (162) | (634) |
Income (loss) before income tax expense | (634) | (60,062) | 107,296 |
(Provision) benefit for income taxes | (626) | 8,969 | (16,936) |
Net income (loss) | (1,260) | (51,093) | 90,360 |
Less: net (income) loss related to non-controlling interests | 392 | 21,752 | (38,353) |
Net income (loss) attributable to Solaris | $ (868) | $ (29,341) | $ 52,007 |
Class A Common Stock | |||
Operating costs and expenses: | |||
Earnings (loss) per share of Class A common stock - basic (in dollars per share) | $ (0.04) | $ (1.03) | $ 1.69 |
Earnings (loss) per share of Class A common stock - diluted (in dollars per share) | $ (0.04) | $ (1.03) | $ 1.69 |
Basic weighted-average shares of Class A common stock outstanding (in shares) | 30,786 | 28,915 | 30,141 |
Diluted weighted-average shares of Class A common stock outstanding (in shares) | 30,786 | 28,915 | 30,185 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common StockClass A Common Stock | Common StockClass B Common Stock | Additional Paid-in CapitalCumulative Effect Adjustment | Additional Paid-in Capital | Retained EarningsCumulative Effect Adjustment | Retained Earnings | Treasury Stock | Non-controlling InterestCumulative Effect Adjustment | Non-controlling Interest | Cumulative Effect Adjustment | Total |
Balance at beginning of period at Dec. 31, 2018 | $ 271 | $ 186 | $ 164,086 | $ (532) | $ 35,507 | $ (1,414) | $ (186) | $ 142,428 | $ (532) | $ 340,878 | |
Balance at beginning of period (in shares) at Dec. 31, 2018 | 27,091,000 | 19,627,000 | 91,000 | ||||||||
Changes in Stockholders' Equity | |||||||||||
Exchange of Solaris LLC Units and shares of Class B common stock for shares of Class A common stock | $ 36 | 28,496 | (28,532) | ||||||||
Exchange of Solaris LLC Units and shares of Class B common stock for shares of Class A common stock (in shares) | 3,687,000 | (3,687,000) | |||||||||
Deferred tax asset and payables related to Tax Receivable Agreement from the exchange of Solaris LLC Units and shares of Class B common stock for shares of Class A common stock | (2,383) | (2,383) | |||||||||
Stock option exercises | $ 1 | 649 | $ (427) | (356) | $ (133) | ||||||
Stock option exercises (in shares) | 76,000 | 28,000 | 103,207 | ||||||||
Share and unit repurchases and retirements | $ (2) | (2,916) | (331) | $ (3,249) | |||||||
Share and unit repurchases and retirements (in shares) | (252,000) | ||||||||||
Stock-based compensation | 3,030 | 1,633 | 4,663 | ||||||||
Vesting of restricted stock | $ 2 | 695 | $ (685) | (698) | (686) | ||||||
Vesting of restricted stock (in shares) | 163,000 | 44,000 | |||||||||
Solaris LLC distribution paid to Solaris LLC unitholders | (6,500) | (6,500) | |||||||||
Dividends paid (Class A common stock) | (12,760) | (12,760) | |||||||||
Net income (loss) | 52,007 | 38,353 | 90,360 | ||||||||
Balance at end of period at Dec. 31, 2019 | $ 308 | 191,843 | 74,222 | $ (2,526) | 145,811 | 409,658 | |||||
Balance at end of period (in shares) at Dec. 31, 2019 | 30,765,000 | 15,940,000 | 163,000 | ||||||||
Changes in Stockholders' Equity | |||||||||||
Exchange of Solaris LLC Units and shares of Class B common stock for shares of Class A common stock | $ 4 | 2,023 | (2,027) | ||||||||
Exchange of Solaris LLC Units and shares of Class B common stock for shares of Class A common stock (in shares) | 255,000 | (255,000) | |||||||||
Deferred tax asset and payables related to Tax Receivable Agreement from the exchange of Solaris LLC Units and shares of Class B common stock for shares of Class A common stock | (1,485) | (1,485) | |||||||||
Stock option exercises | 101 | $ (80) | (25) | $ (4) | |||||||
Stock option exercises (in shares) | 16,000 | 7,000 | 22,421 | ||||||||
Share and unit repurchases and retirements | $ (24) | (14,804) | (10,177) | (1,712) | $ (26,717) | ||||||
Share and unit repurchases and retirements (in shares) | (2,374,000) | ||||||||||
Stock-based compensation | 3,216 | 1,775 | 4,991 | ||||||||
Vesting of restricted stock | $ 2 | 956 | $ (373) | (958) | (373) | ||||||
Vesting of restricted stock (in shares) | 326,000 | 37,000 | |||||||||
Cancelled shares withheld for taxes from RSU vesting | (156) | (32) | (102) | (290) | |||||||
Cancelled shares withheld for taxes from RSU vesting (in shares) | (45,000) | ||||||||||
Solaris LLC distribution paid to Solaris LLC unitholders for income tax withholding | (32) | (150) | (182) | ||||||||
Solaris LLC distribution paid to Solaris LLC unitholders | (6,635) | (6,635) | |||||||||
Dividends paid (Class A common stock) | (12,391) | (12,391) | |||||||||
Treasury stock retirements | (1,247) | (1,732) | $ 2,979 | ||||||||
Treasury stock retirements (in shares) | (207,000) | ||||||||||
Net income (loss) | (29,341) | (21,752) | (51,093) | ||||||||
Balance at end of period at Dec. 31, 2020 | $ 290 | 180,415 | 20,549 | 114,225 | 315,479 | ||||||
Balance at end of period (in shares) at Dec. 31, 2020 | 28,943,000 | 15,685,000 | |||||||||
Changes in Stockholders' Equity | |||||||||||
Exchange of Solaris LLC Units and shares of Class B common stock for shares of Class A common stock | $ 20 | 13,872 | (13,892) | ||||||||
Exchange of Solaris LLC Units and shares of Class B common stock for shares of Class A common stock (in shares) | 1,915,000 | (1,915,000) | |||||||||
Deferred tax asset and payables related to Tax Receivable Agreement from the exchange of Solaris LLC Units and shares of Class B common stock for shares of Class A common stock | (1,721) | (1,721) | |||||||||
Stock option exercises | 20 | (7) | $ 13 | ||||||||
Stock option exercises (in shares) | 5,000 | 4,600 | |||||||||
Stock-based compensation | 3,787 | 1,722 | $ 5,509 | ||||||||
Vesting of restricted stock | $ 3 | 656 | (659) | ||||||||
Vesting of restricted stock (in shares) | 353,000 | ||||||||||
Cancelled shares withheld for taxes from RSU vesting | $ (1) | (194) | (349) | (242) | (786) | ||||||
Cancelled shares withheld for taxes from RSU vesting (in shares) | (70,000) | ||||||||||
Solaris LLC distribution paid to Solaris LLC unitholders for income tax withholding | 77 | (230) | (153) | ||||||||
Solaris LLC distribution paid to Solaris LLC unitholders | (5,798) | (5,798) | |||||||||
Dividends paid (Class A common stock) | (13,407) | (13,407) | |||||||||
Net income (loss) | (868) | (392) | (1,260) | ||||||||
Balance at end of period at Dec. 31, 2021 | $ 312 | $ 196,912 | $ 5,925 | $ 94,727 | $ 297,876 | ||||||
Balance at end of period (in shares) at Dec. 31, 2021 | 31,146,000 | 13,770,000 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY | |||
Distributions paid to unit holders (in dollars per unit) | $ 0.42 | $ 0.42 | $ 0.405 |
Cash dividends paid (in dollars per share) | $ 0.42 | $ 0.42 | $ 0.405 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities: | |||
Net income (loss) | $ (1,260) | $ (51,093) | $ 90,360 |
Adjustment to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 27,210 | 27,021 | 26,925 |
Impairments | 47,828 | ||
Loss on disposal of asset | 125 | 1,428 | 261 |
Stock-based compensation | 5,210 | 4,735 | 4,475 |
Amortization of debt issuance costs | 176 | 176 | 753 |
Allowance for credit losses | 365 | 2,910 | 339 |
Write-off of deposit | 202 | ||
Deferred income tax expense | 132 | (9,153) | 16,122 |
Other | (150) | (193) | (150) |
Changes in assets and liabilities: | |||
Accounts receivable | (15,242) | 17,400 | 853 |
Prepaid expenses and other assets | (6,726) | 2,423 | 2,332 |
Inventories | (978) | (235) | (2,744) |
Accounts payable | 2,959 | 3,051 | (3,582) |
Accrued liabilities | 4,652 | (2,445) | 4,183 |
Deferred revenue | (25,458) | ||
Net cash provided by operating activities | 16,473 | 43,853 | 114,871 |
Cash flows from investing activities: | |||
Investment in property, plant and equipment | (19,638) | (4,661) | (34,852) |
Cash received from insurance proceeds | 34 | 100 | 618 |
Proceeds from disposal of assets | 80 | 786 | 232 |
Net cash used in investing activities | (19,524) | (3,775) | (34,002) |
Cash flows from financing activities: | |||
Distribution and dividend paid to Solaris LLC unitholders and Class A common shareholders | (19,205) | (19,026) | (19,260) |
Share and unit repurchases | (26,717) | (3,249) | |
Payments under finance leases | (30) | (35) | (35) |
Payments under insurance premium financing | (657) | (2,485) | |
Proceeds from stock option exercises | 13 | 64 | 294 |
Cancelled shares withheld for taxes from RSU vesting | (786) | (276) | |
Payments related to purchase of treasury stock | (454) | (1,112) | |
Repayment of senior secured credit facility | (13,000) | ||
Payments related to debt issuance costs | (197) | ||
Distribution to Solaris LLC unitholder for income tax withholding | (153) | (150) | |
Net cash (used in) financing activities | (20,818) | (46,594) | (39,044) |
Net (decrease) increase in cash and cash equivalents | (23,869) | (6,516) | 41,825 |
Cash and cash equivalents at beginning of period | 60,366 | 66,882 | 25,057 |
Cash and cash equivalents at end of period | 36,497 | 60,366 | 66,882 |
Non-cash activities | |||
Employee retention credit | 1,900 | ||
Capitalized depreciation in property, plant and equipment | 3,129 | 613 | 735 |
Capitalized stock based compensation | 299 | 255 | 189 |
Property and equipment additions incurred but not paid at period-end | 206 | 172 | 82 |
Property, plant and equipment additions transferred from inventory | 920 | 358 | 5,882 |
Insurance premium financing | 246 | 1,869 | |
Cash paid for: | |||
Interest | 132 | 282 | 275 |
Income taxes | $ 325 | $ 796 | $ 663 |
Organization and Background of
Organization and Background of Business | 12 Months Ended |
Dec. 31, 2021 | |
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, 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 and reduce costs during the completion phase of well development. Our equipment and services are deployed in most of the active oil and natural gas basins in the United States. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
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. 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 relate to stock-based compensation, useful lives and salvage values of long-lived assets, future cash flows associated with goodwill and long-lived asset impairment, 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. Cash and Cash Equivalents For the purposes of the statements of cash flows, the Company considers all short-term, highly liquid, investments with an original maturity of three months or less to be cash equivalents. Cash is deposited in demand accounts in federally insured domestic institutions to minimize risk. Accounts of each institution are insured by Federal Deposit Insurance Corporation. Cash balances at times may exceed federally-insured limits. We have not incurred losses related to these deposits. Accounts Receivable and Allowance for Credit Losses Accounts receivable consists of trade receivables recorded at the invoice amount, plus accrued revenue that is not yet billed, less an estimated allowance for credit losses (if any). The Company accounts for credit losses in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 326 (“ASC 326”), Financial Instruments – Credit Losses. Accounts receivable are generally due within 60 days or less, or in accordance with terms agreed with customers. We do not accrue interest on delinquent receivables. Total unbilled revenue included in accounts receivable as of December 31, 2021 and 2020 was $6,292 and $7,265 , respectively. In our determination of the allowance for credit losses, we pool receivables with similar risk characteristics and consider a number of current conditions, past events and other factors, including the length of time trade accounts receivable are past due, previous loss history, and the condition of the general economy and the industry as a whole, and apply an expected loss percentage. The expected credit loss percentage is determined using historical loss data adjusted for current conditions and forecasts of future economic conditions. The related expense associated with the recognition of the allowance for credit losses was included in Other operating expense on our condensed consolidated statements of operations. Adjustments to the allowance may be required depending on how potential issues are resolved and when receivables are collected. Accounts deemed uncollectible are reflected as a write-off applied against the allowance for credit losses and occur when the financial condition of our customers deteriorate and result in an impairment of their ability to make payments, include the impact of customer bankruptcies. Inventories Inventories consist of raw materials used in the manufacturing and maintenance of the Company’s systems, which are stated at the lower of cost or net realizable value. Net realizable value is determined, giving consideration to quality, excessive levels, obsolescence and other factors. Adjustments that reduce stated amounts will be recognized as impairments in the consolidated statements of operations. There were no impairments recorded for the year ended December 31, 2021. The Company recognized a write down of the carrying value of inventory of $2,565 to its net realizable value during the year ended December 31, 2020. Property, Plant and Equipment Property, plant and equipment are stated at cost, or fair value for assets acquired in a business combination, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful service lives of the assets as noted below: Useful Life Systems and related equipment Up to 15 years Machinery and equipment 3-10 years Furniture and fixtures 5 years Computer hardware and software 3-10 years Vehicles 5 years Transloading facility and equipment 15-30 years Buildings and leasehold improvements 15 years Systems and equipment that are in the process of being manufactured are considered property, plant and equipment. However, the systems do not depreciate until they are fully completed. Systems in process are a culmination of material, labor and overhead. Expenditures for maintenance and repairs are expensed as incurred. Betterments that increase the value or materially extend the life of the related assets are capitalized. Upon sale or disposition of property and equipment, the cost and related accumulated depreciation and amortization are removed from the consolidated financial statements and any resulting gain or loss is recognized in the consolidated statements of operations. Refer to Impairment of Long-Lived Assets, Definite-lived Intangible Assets and Right of Use (“ROU”) Assets below for discussion of impairment triggers in the year ended December 31, 2020. Definite-lived Intangible Assets Identified intangible assets with determinable lives consist primarily of customer relationships, a non-competition agreement and software acquired, as well as patents that were filed for our systems and other intellectual property. Amortization on these assets is calculated on the straight-line method over the estimated useful lives of the assets, which is five Identified intangible assets by major classification consist of the following: Accumulated Net Book Gross Amortization Value As of December 31, 2021: Customer relationships $ 4,703 $ (2,744) $ 1,959 Software acquired in the acquisition of Railtronix 346 (202) 144 Non-competition agreement 225 (184) 41 Patents and other 114 (55) 59 Total identifiable intangibles $ 5,388 $ (3,185) $ 2,203 As of December 31, 2020: Customer relationships $ 4,703 $ (2,072) $ 2,631 Software acquired in the acquisition of Railtronix 346 (152) 194 Non-competition agreement 225 (139) 86 Patents and other 114 (43) 71 Total identifiable intangibles $ 5,388 $ (2,406) $ 2,982 Leases The Company accounts for leases in accordance with FASB ASC Topic 842, Leases (“ASC Topic 842”). We determine if an arrangement is a lease at inception. Short-term leases (i.e., leases of twelve months or less) are recognized in profit or loss on a straight-line basis over the lease term. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, we use our incremental borrowing rate in determining the present value of lease payments based on the information available at the commencement date. Our incremental borrowing rate reflects the estimated rate of interest that we would pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. We use the implicit rate when readily determinable. The ROU asset also includes any lease payments made and excludes lease incentives received. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. See Note 7. Operating Leases The Company leases land and equipment under operating leases which expire at various dates through February 2047. Upon completion of the primary term, both parties have substantive rights to terminate the leases. As a result enforceable rights and obligations do not exist under the rental agreements subsequent to the primary term. Operating leases are included in operating lease ROU assets, current portion of operating lease liabilities, and operating lease liabilities, net of current in the Company’s consolidated balance sheets. Finance Leases The Company leases property under an agreement classified as a finance lease. Finance leases are included in property and equipment, current portion of finance lease liabilities, and finance lease liabilities, net of current in the Company’s consolidated balance sheets. The Company’s lease agreements do not include both lease and non-lease components, extension options or residual value guarantees, and there are no leases that have yet to commence. Additionally, our lease agreements do not impose restrictions on our ability to pay dividends or incur financing obligations. Goodwill Goodwill represents the excess of the purchase price of a business over the estimated fair value of the identifiable assets acquired and liabilities assumed. As of December 31, 2021 and 2020, the Company reported $13,004 of goodwill related to the purchase of the silo manufacturing business from Loadcraft Industries Ltd. The Company evaluates goodwill for impairment annually, as of October 31, or more often as facts and circumstances warrant. Factors such as unexpected adverse economic conditions, competition and market changes may require more frequent assessments. Before employing detailed impairment testing methodologies, the Company may first evaluate the likelihood of impairment by considering qualitative factors relevant to the business, such as macroeconomic, industry, market or any other factors that have a significant bearing on fair value. If the Company first utilizes a qualitative approach and determines that it is more likely than not that goodwill is impaired, detailed testing methodologies are then applied. Otherwise, the Company concludes that no impairment has occurred. The Company may also choose to bypass a qualitative approach and opt instead to employ detailed testing methodologies, regardless of a possible more likely than not outcome. If the Company determines through the qualitative approach that detailed testing methodologies are required, or if the qualitative approach is bypassed, the Company compares the fair value of a reporting unit with its carrying amount. If the estimated fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not considered impaired. If the carrying amount of a reporting unit exceeds its estimated fair value, an impairment loss is measured and recorded. During the year ended December 31, 2020, due to the impact of the outbreak of COVID-19 and oil and gas market developments on our business, we updated our goodwill impairment assessment as of March 31, 2020. As a result of the evaluation of goodwill, we recognized a $4,231 impairment loss of goodwill associated with the 2017 purchase of the assets of Railtronix and did not recognize any impairment for the goodwill associated with the Loadcraft Industries Ltd. purchase. A qualitative approach was used for the annual evaluation of goodwill for impairment as of October 31, 2020 and no additional impairments were recognized. The Company did no t recognize any impairments during the year ended December 31, 2021. Impairment of Long-Lived Assets and Definite-Lived Intangible Assets Long-lived assets, such as property, plant, equipment and definite-lived intangible assets and ROU Assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable, such as insufficient cash flows or plans to dispose of or sell long-lived assets before the end of their previously estimated useful lives. For assets classified as held for use, we first group individual assets based on the lowest level for which identifiable cash flows are largely independent of the cash flows from other assets. We then compare estimated future undiscounted cash flows expected to result from the use and eventual disposition of the asset group to its carrying amount. If the asset group's undiscounted cash flows are less than its carrying amount, we then determine the asset group's fair value by using a discounted cash flow analysis and recognize any resulting impairment. This analysis is based on estimates such as management’s short-term and long-term forecast of operating performance, including revenue growth rates and expected profitability margins, estimates of the remaining useful life and service potential of the assets within the asset group, and a discount rate based on our weighted average cost of capital. An impairment loss is measured and recorded as the amount by which the asset group's carrying amount exceeds its fair value. During the first quarter of 2020, due to the impact on our business of reduced demand and oversupply of oil and natural gas, which were exacerbated by COVID-19, the Company performed tests for recoverability of the carrying value of these assets using forecasted undiscounted cash flows as of March 31, 2020. As a result of the impairment analysis, undiscounted cash flows as well as the fair value of the assets associated with our Kingfisher Facility were below their carrying values and the Company recognized impairment losses of $37,775, $2,845 and $410 for property, plant and equipment, ROU assets and other receivables, respectively, during the year ended December 31, 2020. These impairments resulted from an accumulation of factors leading to the loss of significant customers, reduced operating activities and earnings. There were no impairments for the years ended December 31, 2021 or 2019. 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, transportation, 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. Wellsite Services Revenues for equipment and labor services consist of fixed fees charged to customers for the use of our equipment that unload, store and deliver proppant, water and chemicals at oil and natural gas well sites, which is considered to be our performance obligation. Revenues are recognized over time as the customer uses our systems and we provide supporting labor services. Revenues related to services coordinating the transportation of proppant consist of a fixed rate per ton recognized over time as proppant is transported from a sand mine or transloading facility to our systems, which is considered to be our performance obligation. Revenues for mobilization and transportation of our equipment cost of fixed or pass-through fees are recognized at a point in time when the system has reached its intended destination, which is considered to be our performance obligation. Transloading and Other Revenues from transloading services consist primarily of the fees charged to customers for transloading and storage of proppant or railcars at our transloading facility, which is considered to be our performance obligation. Revenues are typically recognized over time based on fixed railcar storage fees or a throughput fee per ton for proppant delivered to and transloaded at the facility. The Company recorded $1,332 of shortfall revenue during the year ended December 31, 2019. Revenues from inventory software services consist primarily of the fees charged to customers for the use of our Railtronix® inventory management software, which is considered to be our performance obligation. Revenues are recognized over time based on a throughput fee to monitor proppant that is loaded into a railcar, stored at a transload facility or loaded into a truck. Variable consideration typically may relate to discounts, price concessions and incentives. The Company estimates variable consideration based on the amount of consideration we expect to receive. The Company accrues revenue on an ongoing basis to reflect updated information for variable consideration as performance obligations are met. The following table summarizes revenues from our contracts disaggregated by revenue generating activity contained therein for the years ended December 31, 2021, 2020, and 2019: Year Ended December 31, 2021 2020 2019 Wellsite services $ 158,052 $ 100,796 $ 205,893 Transloading and Other 1,137 2,180 35,794 Total revenue $ 159,189 $ 102,976 $ 241,687 Stock-based Compensation Stock-based compensation cost is measured at the grant date based on the fair value of the award and is amortized to compensation expense on a straight-line basis over the awards’ vesting period, which is generally the requisite service period. For options to purchase Class A common stock, we have historically and consistently calculated fair value using the Black-Scholes option-pricing model. This valuation approach involves significant judgments and estimates, including estimates regarding our future operations, price variation and the risk-free rate of return. Our estimates of these variables are made for the purpose of using the valuation model to determine an expense for each reporting period and are not subsequently adjusted. We recognize expense related to the estimated vesting of our performance share units granted. Forfeitures of stock-based compensation are recognized as they occur. Financial Instruments The carrying value of the Company’s financial instruments, consisting of cash, accounts receivable, notes receivable, accounts payable and insurance premium financing, approximates their fair value due to the short maturity of such instruments. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments other than allowance for credit losses described in Accounts Receivable and Allowance for Credit Losses. Fair Value Measurements The Company’s financial assets and liabilities, as well as other recurring and nonrecurring fair value measurements such as goodwill impairment and long lived assets impairment, are to be measured using inputs from the three levels of the fair value hierarchy, of which the first two are considered observable and the last unobservable, which are as follows: ● Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date; ● Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active or other inputs corroborated by observable market data for substantially the full term of the assets or liabilities; and ● Level 3—Unobservable inputs that reflect the Company’s assumptions that market participants would use in pricing assets or liabilities based on the best information available. Income Taxes Solaris Inc. is a corporation and, as a result, is subject to United States federal, state and local income taxes. For the year ended December 31, 2021, we recognized a combined United States federal and state expense for income taxes of $626 . For the years ended December 31, 2020 and 2019, we recognized income tax benefit of $8,969 and income tax expense of $16,936, respectively. Solaris LLC is treated as a partnership for United States federal income tax purposes and therefore does not pay United States federal income tax on its taxable income. Instead, the Solaris LLC unitholders, including Solaris Inc., are liable for United States federal income tax on their respective shares of Solaris LLC’s taxable income reported on the unitholders’ United States federal income tax returns. Solaris LLC is liable for income taxes in those states not recognizing its status as a partnership for United States federal income tax purposes. We recognize deferred tax assets and liabilities for the expected future tax consequences of events included in the condensed consolidated financial statements. Under this method, we determine deferred tax assets and liabilities on the basis of the differences between the book value and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period in which the enactment date occurs. We recognize deferred tax assets to the extent we believe these assets are more-likely-than-not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent results of operations. We record uncertain tax positions on the basis of a two-step process in which (i) we determine whether it is more-likely-than-not the tax positions will be sustained on the basis of the technical merits of the position and (ii) for those tax positions meeting the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority. Interest and penalties related to income taxes are included in the benefit (provision) for income taxes in our consolidated statement of operations. We have not incurred any significant interest or penalties related to income taxes in any of the periods presented. See Note 10. “Income Taxes” for additional information regarding income taxes. Payable Related to the Tax Receivable Agreement Solaris Inc. entered into a Tax Receivable Agreement (the “Tax Receivable Agreement”) with the members of Solaris LLC (each such person and any permitted transferee, a “TRA Holder,” and together, the “TRA Holders”). This agreement generally provides for the payment by Solaris Inc. to each TRA Holder of 85% of the net cash savings, if any, in United States federal, state and local income tax or franchise tax that Solaris Inc. actually realizes (computed using simplifying assumptions to address the impact of state and local taxes) or is deemed to realize in certain circumstances in periods after the IPO as a result of (i) certain increases in tax basis that occur as a result of Solaris Inc.’s acquisition (or deemed acquisition for United States federal income tax purposes) of all or a portion of such TRA Holder's Solaris LLC Units in connection with the IPO or pursuant to the exercise of the Redemption Right or the Call Right (each as defined in the Solaris LLC Agreement) and (ii) imputed interest deemed to be paid by Solaris Inc. as a result of, and additional tax basis arising from, any payments Solaris Inc. makes under the Tax Receivable Agreement. Solaris Inc. will retain the benefit of the remaining 15% of these cash savings. As of December 31, 2021 and 2020, Solaris Inc. recorded a payable related to the Tax Receivable Agreement of $73,102 and $68,703, respectively, $1,210 and $606 of which has been recorded as a current liability. The increase in payables related to the Tax Receivable Agreement is a result of Solaris Inc.’s acquisition (or deemed acquisition for United States federal income tax purposes) of Solaris LLC Units from TRA Holders during the year ended December 31, 2021. Environmental Matters The Company is subject to various federal, state and local laws and regulations relating to the protection of the environment. Management has established procedures for the ongoing evaluation of the Company’s operations, to identify potential environmental exposures and to comply with regulatory policies and procedures. Environmental expenditures that relate to current operations are expensed or capitalized as appropriate. Expenditures that relate to an existing condition caused by past operations and do not contribute to current or future revenue generation are expensed as incurred. Liabilities are recorded when environmental costs are probable, and the costs can be reasonably estimated. The Company maintains insurance which may cover in whole or in part certain environmental expenditures. As of December 31, 2021 and 2020, no liabilities were recorded with respect to any environmental matters as no environmental costs were deemed probable. Segment Information Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions on how to allocate resources and assess performance. The Company’s chief operating decision maker is the Chief Executive Officer. The Company and the Chief Executive Officer view the Company’s operations and manage its business as one operating segment. All long-lived assets of the Company reside in the United States. Accounting Standards Recently Issued But Not Yet Adopted In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform, which provides temporary optional guidance to companies impacted by the transition away from the London Interbank Offered Rate (“LIBOR”). The guidance provides 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. This guidance is effective upon issuance and expires on December 31, 2022. The Company is currently assessing the impact of the LIBOR transition and this ASU on the Company’s financial statement |
Allowance for Credit Losses
Allowance for Credit Losses | 12 Months Ended |
Dec. 31, 2021 | |
Allowance for Credit Losses | |
Allowance for Credit Losses | 3. Allowance for Credit Losses The following activity related to our allowance for credit losses on customer receivables for the year ended December 31, 2021 and 2020 reflects the estimated impact of the current economic environment on our receivable balance: Balance, December 31, 2019 $ 339 Credit losses 3,073 Adjustments (163) Less write-offs (2,150) Balance, December 31, 2020 $ 1,099 Credit losses 1,624 Adjustments (1,258) Less write-offs (719) Balance, December 31, 2021 $ 746 |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2021 | |
Prepaid Expenses and Other Current Assets. | |
Prepaid Expenses and Other Current Assets | 4. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets were comprised of the following at December 31, 2021 and 2020: December 31, December 31, 2021 2020 Prepaid purchase orders $ 5,048 $ 243 Prepaid insurance 720 554 Deposits 75 77 Employee retention credit 1,900 — Other assets 2,054 1,295 Prepaid expenses and other current assets $ 9,797 $ 2,169 |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment | |
Property, Plant and Equipment | 5. Property, Plant and Equipment Property, plant and equipment was comprised of the following at December 31, 2021 and 2020: December 31, December 31, 2021 2020 Systems and related equipment $ 306,637 $ 299,413 Systems in process 19,949 12,601 Transloading facility and equipment — — Computer hardware and software 1,201 1,004 Machinery and equipment 5,352 5,272 Vehicles 5,626 3,591 Buildings 4,425 4,342 Land 612 612 Furniture and fixtures 351 348 Property, plant and equipment, gross 344,153 327,183 Less: accumulated depreciation (104,062) (81,299) Property, plant and equipment, net $ 240,091 $ 245,884 |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2021 | |
Accrued Liabilities | |
Accrued Liabilities | 6. Accrued Liabilities 2021 2020 Property, plant and equipment $ 148 $ 231 Employee related expenses 5,030 4,300 Selling, general and administrative 745 1,236 Cost of revenue 9,057 4,272 Excise, franchise and sales taxes 1,266 1,813 Ad valorem taxes 643 107 Other 29 27 Accrued liabilities $ 16,918 $ 11,986 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2021 | |
Leases | |
Leases | 7. Leases Upon completion of the primary term, both parties have substantive rights to terminate the leases. As a result, enforceable rights and obligations do not exist under the rental agreements subsequent to the primary term. The components of lease expense were as follows: December 31, 2021 December 31, 2020 Operating lease cost (1) (2) $ 1,187 $ 1,022 Finance lease cost Amortization of ROU assets 26 30 Interest on lease liabilities 4 5 Total finance lease cost $ 30 $ 35 (1) Includes short term leases. (2) Operating lease costs of $741, $78 and $367 were reported in Selling, general and administrative, Cost of system services and Cost of transloading services for the year ended December 31, 2021, respectively. Operating lease costs of $741, $78 and $203 were reported in Selling, general and administrative, Cost of system services and Cost of transloading services for the year ended December 31, 2020, respectively. Future minimum lease payments under non-cancellable operating leases as of December 31, 2021 were as follows: Year Ending December 31, Operating Leases Finance Leases 2022 $ 1,169 33 2023 1,165 33 2024 1,109 33 2025 965 6 2026 974 — Thereafter 6,414 — Total future minimum lease payments 11,796 105 Less: effects of discounting (4,377) (4) Total lease liabilities $ 7,419 $ 101 Supplemental cash flow information related to leases were as follows: December 31, 2021 Supplemental Cash Flows Information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,138 Financing cash flows from finance leases 30 Other information related to leases was as follows: December 31, 2021 Weighted Average Remaining Lease Term Operating leases 12.7 years Finance leases 3.2 years Weighted Average Discount Rate Operating leases 6.3% Finance leases 3.3% |
Senior Secured Credit Facility
Senior Secured Credit Facility | 12 Months Ended |
Dec. 31, 2021 | |
Senior Secured Credit Facility | |
Senior Secured Credit Facility | 8. Senior Secured Credit Facility On February 24, 2022, Solaris LLC executed the first amendment (the “2022 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 lenders party thereto and Wells Fargo Bank, National Association, as administrative agent. The 2022 Amendment extended the term of the Credit Agreement to expire on April 26, 2025, modified applicable interest rates and modified repayment requirements. The Credit Agreement consists of an initial $50,000 revolving loan commitment (the “Loan”) with a $25,000 uncommitted accordion option to increase the Loan availability to $75,000. As of December 31, 2021, we had no borrowings under the Credit Agreement outstanding and ability to draw $50,000. 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, following the 2022 Amendment, bear interest at either Term Secured Overnight Financing Rate (“SOFR”) or an alternate base rate plus an applicable margin, and interest is payable quarterly. 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 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 $3,000. 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. Following the 2022 Amendment, the Credit Agreement also requires that we prepay any outstanding borrowings in the event our total consolidated cash balance exceeds $20,000 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 $5,000 for any 180 consecutive day period, in which case capital expenditures will be permitted up to $100,000 plus any unused availability for capital expenditures from the immediately preceding fiscal year. As of December 31, 2021 we were in compliance with all covenants in accordance with the Credit Agreement. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2021 | |
Equity | |
Equity | 9. Equity Dividends Solaris LLC paid distributions totaling $19,205 and $19,026 to all Solaris LLC unitholders in the years ended December 31, 2021 and 2020, respectively, of which $13,407 and $12,391 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 totaling $13,407 and $12,391 in the years ended December 31, 2021 and 2020, including $365 and $314 related to shares of restricted stock, respectively. Share Repurchase Program On December 3, 2019, the Company’s board of directors authorized a share repurchase plan to repurchase up to $25,000 of the Company’s Class A common stock until the plan terminates pursuant to its provisions. On February 27, 2020, the Company’s board of directors approved an additional $5,000 repurchase of the Company’s Class A common stock. During the three months ended March 31, 2020, Solaris Inc. purchased and retired 2,374,092 shares of the Company’s Class A common stock for $26,746, or $11.27 average price per share, and, in connection therewith, Solaris LLC purchased and retired 2,374,092 Solaris LLC Units from the Company for the same amount. As of March 31, 2020, the share repurchase plan was completed. During the year ended December 31, 2019, Solaris Inc. purchased and retired 251,930 shares of the Company’s Class A common stock for $3,254, or $12.90 average price per share, and, in connection therewith, Solaris LLC purchased and retired 251,930 Solaris LLC Units from the Company for the same amount. During the full share repurchase plan, Solaris Inc. purchased and retired 2,626,022 shares of the Company’s Class A common stock for $30,000, or $11.41 average price per share, and, in connection therewith, Solaris LLC purchased and retired 2,626,022 Solaris LLC Units from the Company for the same amount. Stock-based compensation The Company’s long-term incentive plan for employees, directors and consultants of the Company and its affiliates (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. Class A common stock withheld to satisfy exercise prices or tax withholding obligations will be available for delivery pursuant to other awards. The LTIP will be administered by the Board, the Compensation Committee of the Board or an alternative committee appointed by the Board. A total of 591,261 options to purchase Class A common stock of the Company have been issued to employees, directors and consultants under the LTIP at an exercise price of $2.87 per option, and a weighted average grant date fair value of $12.04 per option. All options were vested by November 13, 2017. During the years ended December 31, 2021, 2020 and 2019, 4,600, 22,421 and 103,207 options were exercised, respectively, in exchange for an equal number of shares of Class A common stock. As of December 31, 2021, 549,306 options have been exercised, 33,348 forfeited and 8,606 remain outstanding. The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model. Expected volatility is based on implied volatilities from historical trading of publicly traded companies which are in the same industry sector. The simplified method is used to derive an expected term. The expected term represents an estimate of the time options are expected to remain outstanding. The risk-free rate for periods within the contractual life of the option is based on the United States treasury yield curve in effect at the time of grant. Compensation cost, as measured at the grant date fair value of the award, is recognized as an expense over the employee's requisite service period for service-based awards (generally the vesting period of the award of four years). For the years ended December 31, 2021, 2020 and 2019, the Company did not recognize stock-based compensation expense on options. The following is a summary of the option activity under the LTIP for the years ended December 31, 2021, 2020 and 2019: Options Outstanding Weighted Average Weighted Remaining Aggregate Average Exercise Contractual Intrinsic Value Options Price Term (years) (in thousands) Balance, January 1, 2019 138,837 $ 2.87 6.92 $ 1,280 Exercisable, January 1, 2019 138,837 $ 2.87 6.92 $ 1,280 Canceled — — — Granted — — — Exercised (103,207) 2.87 — Forfeited (4) 2.87 — Balance, December 31, 2019 35,626 $ 2.87 5.92 $ 397 Exercisable, December 31, 2019 35,626 $ 2.87 5.92 $ 397 Canceled — — — Granted — — — Exercised (22,421) 2.87 — Forfeited — — — Balance, December 31, 2020 13,205 $ 2.87 4.92 $ 70 Exercisable, December 31, 2020 13,205 $ 2.87 4.92 $ 70 Canceled — — — Granted — — — Exercised (4,600) 2.87 — Forfeited — — — Balance, December 31, 2021 8,605 $ 2.87 3.92 $ 30 Exercisable, December 31, 2021 8,605 $ 2.87 3.92 $ 30 As of December 31, 2021, the Company had no unvested options outstanding. The Company accounts for its stock-based compensation including grants of restricted stock in the consolidated statements of operations based on their estimated fair values on the date of grant. The following table further summarizes activity related to restricted stock for the years ended December 31, 2021, 2020 and 2019: Restricted Stock Awards Weighted Average Grant Date Fair Number of Shares Value ($) Unvested at January 1, 2019 411,497 $ 13.67 Awarded 448,745 16.62 Vested (208,697) 15.13 Forfeited (24,294) 15.52 Unvested at December 31, 2019 627,251 $ 15.23 Awarded 536,301 9.72 Vested (360,891) 14.48 Forfeited (99,546) 13.14 Unvested at December 31, 2020 703,115 $ 12.33 Awarded 522,794 10.98 Vested (353,307) 12.17 Forfeited (25,287) 10.46 Unvested at December 31, 2021 847,315 $ 11.62 As of December 31, 2021, total unrecognized compensation cost related to non-vested restricted stock was $5,663, which is expected to be recognized over a weighted-average period of 0.81 years. 414,274 shares, 266,053 shares and 166,989 shares of restricted stock vest in 2022, 2023 and 2024, respectively. The number of shares remaining available for future issuance under LTIP is 2,466,988. Earnings (Loss) Per Share Basic earnings (loss) per share of Class A common stock is computed by dividing net income attributable to Solaris by the weighted-average number of shares of Class A common stock outstanding during the same period. Diluted earnings (loss) per share is computed giving effect to all potentially dilutive shares. The following table sets forth the calculation of earnings (loss) per share, or EPS, for the years ended December 31, 2021, 2020 and 2019: Year Ended December, Basic net income (loss) per share: 2021 2020 2019 Numerator Net income (loss) attributable to Solaris $ (868) $ (29,341) $ 52,007 Less income attributable to participating securities (1) (365) (314) (1,120) Net income (loss) attributable to common stockholders $ (1,233) $ (29,655) $ 50,887 Denominator Weighted average number of unrestricted outstanding common shares used to calculate basic net income per share 30,786 28,915 30,141 Effect of dilutive securities: Stock options (2) — — 44 Diluted weighted-average shares of Class A common stock outstanding used to calculate diluted net income per share 30,786 28,915 30,185 Earnings (loss) per share of Class A common stock - basic $ (0.04) $ (1.03) $ 1.69 Earnings (loss) per share of Class A common stock - diluted $ (0.04) $ (1.03) $ 1.69 (1) The Company's restricted shares of common stock are participating securities. (2) The year ended December 31, 2019 includes 44 shares of Class A common stock resulting from an assumed exercise of the stock options in the calculation of the denominator for diluted earnings per common share as these shares were dilutive. The following number of weighted-average potentially dilutive shares were excluded from the calculation of diluted earnings per share because the effect of including such potentially dilutive shares would have been antidilutive upon conversion: Year Ended December, 2021 2020 2019 Class B common stock 14,035 15,842 16,688 Stock options 8 13 — Restricted stock awards 282 38 320 Total 14,325 15,893 17,008 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Taxes | |
Income Taxes | 10. Income Taxes Income Tax (Benefit) Expense The components of the income tax (benefit) expense are: Year Ended December 31, 2021 2020 2019 Current: Federal $ — $ — $ — State 494 184 814 494 184 814 Deferred: Federal (20) (8,166) 14,452 State 152 (987) 1,670 132 (9,153) 16,122 Income tax (benefit) expense $ 626 $ (8,969) $ 16,936 Income tax (benefit) expense differs from the amount computed by applying the statutory federal income tax rate of 21% to income (loss) before taxes as follows: Year Ended December 31, 2021 2020 2019 Income (loss) before income taxes $ (634) $ (60,062) $ 107,296 Less: net income (loss) before income taxes attributable to noncontrolling interest (392) (21,752) 38,353 Income (loss) attributable to Solaris Oilfield Infrastructure, Inc. stockholders before income taxes (242) (38,310) 68,943 Income tax expense (benefit) at the federal statutory rate (70) (8,176) 14,548 State income taxes, net of federal benefit 465 (350) 1,740 Remeasurement of deferred taxes 139 (348) — Other 92 (95) 648 Income tax (benefit) expense $ 626 $ (8,969) $ 16,936 Deferred Tax Assets and Liabilities The Company’s deferred tax position reflects the net tax effects of the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax reporting. Significant components of the deferred tax assets and liabilities are as follows: December 31, 2021 2020 Assets: Investments in subsidiaries $ 11,507 $ 13,686 Imputed interest 2,519 1,594 Net operating loss carryforward 49,732 45,339 Total deferred tax assets 63,758 60,619 Liabilities: Investments in subsidiaries — — Total deferred tax liabilities — — Net deferred tax asset $ 63,758 $ 60,619 As of December 31, 2021, the Company had approximately $223,720 of federal net operating loss carryovers and $49,861 of state net operating loss carryovers. $157,912 of such federal net operating loss carryovers have no expiration date and the remaining federal net operating loss carryovers expire in 2037. $25,895 million of such state net operating loss carryovers will expire in varying amounts beginning in 2037. The Company regularly reviews its deferred tax assets, including net operating loss carryovers, for recoverability, and a valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset may not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences are deductible. In assessing the need for a valuation allowance, the Company makes estimates and assumptions regarding projected future taxable income, its ability to carry back operating losses to prior periods, the reversal of deferred tax liabilities and the implementation of tax planning strategies. 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 these assumptions in the future, changes in forecasted taxable income may alter this expectation and may result in an increase to 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 tax attributes. The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted on March 27, 2020 in the United States to provide emergency assistance to individuals and businesses affected by the COVID-19 pandemic. The CARES Act includes temporary changes to both income and non-income based tax laws. For the years ended December 31, 2021 and 2020 the impact of the CARES Act was immaterial to the Company’s tax provision. However, under the CARES Act, the Company is deferring the employer portion of payroll tax payments through December 31, 2022. Future regulatory guidance under the CARES Act or additional legislation enacted by Congress in connection with the COVID-19 pandemic could impact our tax provision in future periods. The Company qualified for federal government assistance through employee retention credit provisions of the Consolidated Appropriations Act of 2021. During the year ended December 31, 2021, the Company recorded $3.1 of employee retention credits in other income on its consolidated income statements. As of December 31, 2021, $1.2 of the credits have been received and $1.9 is included in prepaid expenses and other current assets on the consolidated balance sheet. The calculation of the credit is based on employees continued employment and represents a portion of the wages paid to them. For income tax purposes, the credit will result in decreased expense related to the wages it offsets in the period received. The Company accounted for the employee retention credit as a government grant in accordance with ASU Topic 832, Disclosures by Business Entities about Government Assistance. Uncertain Tax Benefits The Company evaluates its tax positions and recognizes only tax benefits that, more likely than not, will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The tax position is measured at the largest amount of benefit that has a greater than 50.0% likelihood of being realized upon settlement. As of December 31, 2021 and 2020, the Company’s uncertain tax benefits totaling $816 and $816, respectively, are reported as a component of the net deferred tax asset in the consolidated balance sheets. The full balance of unrecognized tax benefits as of December 31, 2021, if recognized, would affect the effective tax rate. However, we do not believe that any of the unrecognized tax benefits will be realized within the coming year. The Company has elected to recognize interest and penalties related to unrecognized tax benefits in income tax expense notwithstanding the fact that, as of December 31, 2021, the Company has not accrued any penalties or interest. The addition to uncertain tax benefits during the year ended December 31, 2018 related to the treatment of certain costs incurred in connection with the IPO and November Offering. Changes in the Company’s gross unrecognized tax benefits are as follows: Year Ended December 31, 2021 2020 2019 Balance, January 1, $ 816 $ 816 $ 816 Additions for the current year tax — — — Additions related to prior years — — — Balance, December 31, $ 816 $ 816 $ 816 Payables Related to the Tax Receivable Agreement As of December 31, 2021, our liability under the Tax Receivable Agreement was $73,102, representing 85% of the net cash savings in United States federal, state and local income tax or franchise tax that Solaris Inc. anticipates realizing in future years from certain increases in tax basis and certain tax benefits attributable to imputed interest as a result of Solaris Inc.’s acquisition (or deemed acquisition for United States federal income tax purposes) of Solaris LLC Units in connection with the IPO or pursuant to an exercise of the Redemption Right or the Call Right (each as defined in the Solaris LLC Agreement) and additional tax basis arising from any payments Solaris Inc. makes under the Tax Receivable Agreement. The projection of future taxable income involves significant judgment. Actual taxable income may differ from our estimates, which could significantly impact our liability under the Tax Receivable Agreement. Therefore, in accordance with ASC 450, Contingencies, we have recorded a liability under the Tax Receivable Agreement related to the tax savings we may realize from certain increases in tax basis and certain tax benefits attributable to imputed interest as a result of Solaris Inc.’s acquisition (or deemed acquisition for United States federal income tax purposes) of Solaris LLC Units in connection with the IPO or pursuant to an exercise of the Redemption Right or the Call Right (each as defined in the Solaris LLC Agreement) and additional tax basis arising from any payments Solaris Inc. makes under the Tax Receivable Agreement. |
Concentrations
Concentrations | 12 Months Ended |
Dec. 31, 2021 | |
Concentrations | |
Concentrations | 11. Concentrations For the year ended December 31, 2021, one customer accounted for 26% of the Company’s revenue. For the year ended December 31, 2020, one customer accounted for 14% of the Company’s revenue. For the year ended December 31, 2019, two customers accounted for 19% and 10% of the Company’s revenue. As of December 31, 2021, two customers accounted for 29% and 13% of the of the Company’s accounts receivable. As of December 31, 2020, four customers accounted for 42% of the Company’s accounts receivable. For the year ended December 31, 2021, no supplier accounted for more than 10% of the Company’s total purchases. For the year ended December 31, 2020, one supplier accounted for 24% of the Company’s total purchases. For the year ended December 31, 2019, one supplier accounted for 19% of the Company’s total purchases. As of December 31, 2021, no supplier accounted for more than 10% of the Company’s accounts payable. As of December 31, 2020, two suppliers accounted for 13% and 10% of the Company’s accounts payable. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies | |
Commitments and Contingencies | 12. Commitments and Contingencies 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 consolidated financial statements. Other Commitments 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 $4,260 as of December 31, 2021. Refer to Note 13. “Related Party Transactions” for additional information regarding related party transactions recognized and Note 7. “Leases” for operating lease discussion. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2021 | |
Related Party Transactions | |
Related Party Transactions | 13. Related Party Transactions The Company recognizes certain costs incurred in relation to transactions with entities owned or partially owned by William A. Zartler, the Chief Executive Officer and Chairman of the Board. These costs include rent paid for office space, travel services, personnel, consulting and administrative costs. For the years ended December 31, 2021, 2020 and 2019, Solaris LLC paid $823, $723 and $1,127, respectively, for these services. As of December 31, 2021 and 2020, the Company included $101 and $103, respectively, in prepaid expenses and other current assets on the consolidated balance sheets. Additionally, as of December 31, 2021 and 2020, the Company included $80 and $55, respectively, of accruals to related parties in accrued liabilities on the consolidated balance sheet. These costs are primarily incurred in connection with the administrative services agreement, dated May 17, 2017, between Solaris LLC and Solaris Energy Management, LLC, a company partially owned by William A. Zartler. On March 26, 2021, THRC Holdings, LP (“THRC”), purchased shares representing an 8.5% ownership of the Company’s Class A common stock and 5.9% total shares outstanding as of December 31, 2021. On February 10, 2022, THRC purchased additional shares representing a total ownership of 10.3% of the Company’s Class A common stock and 7.2% total shares outstanding as of December 31, 2021. THRC is affiliated with certain of the Company’s customers, including ProFrac Services, LLC (“ProFrac”) and FTS International 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 year ended December 31, 2021, the Company recognized revenues related to our service offering provided to the THRC Affiliates of $13.5. Accounts receivable related to THRC Affiliates as of December 31, 2021, were $3.6. For the year ended December 31, 2021, the Company recognized cost for services provided by the THRC Affiliates of $3.6. Accounts payable related to THRC Affiliates as of December 31, 2021, were $0.2. In August 2021, the Company executed a three-year agreement with ProFrac and Cisco (the “ProFrac-Cisco Agreement”). The primary terms of the ProFrac-Cisco Agreement include provisions whereby (i) Solaris shall be ProFrac’s dedicated wellsite sand storage provider (“Services”), (ii) Solaris shall provide volume-based pricing to ProFrac for the Services and (iii) Solaris shall acquire certain equipment from Cisco (“Equipment”). During the third quarter of 2021, Solaris paid $1.5 for the Equipment which was recognized in Property, plant and equipment. During the fourth quarter, Solaris paid $0.5 which was recognized in revenues. Solaris may be required to pay up to $4.0 in additional payments throughout the three-year term of the agreement contingent upon ProFrac meeting certain minimum Services revenue thresholds. On October 1, 2021, the Company made payments totaling $0.6 for payables related to the Tax Receivable Agreement. Refer to Note 10. Income Taxes. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events | |
Subsequent Events | 14. Subsequent Events On February 24, 2022, the Company executed an amendment to the Credit Agreement. Refer to Note 8. “Senior Secured Credit Facility.” |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
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. 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 relate to stock-based compensation, useful lives and salvage values of long-lived assets, future cash flows associated with goodwill and long-lived asset impairment, 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. |
Cash and Cash Equivalents | Cash and Cash Equivalents For the purposes of the statements of cash flows, the Company considers all short-term, highly liquid, investments with an original maturity of three months or less to be cash equivalents. Cash is deposited in demand accounts in federally insured domestic institutions to minimize risk. Accounts of each institution are insured by Federal Deposit Insurance Corporation. Cash balances at times may exceed federally-insured limits. We have not incurred losses related to these deposits. |
Accounts Receivable and Allowance for Credit Losses | Accounts Receivable and Allowance for Credit Losses Accounts receivable consists of trade receivables recorded at the invoice amount, plus accrued revenue that is not yet billed, less an estimated allowance for credit losses (if any). The Company accounts for credit losses in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 326 (“ASC 326”), Financial Instruments – Credit Losses. Accounts receivable are generally due within 60 days or less, or in accordance with terms agreed with customers. We do not accrue interest on delinquent receivables. Total unbilled revenue included in accounts receivable as of December 31, 2021 and 2020 was $6,292 and $7,265 , respectively. In our determination of the allowance for credit losses, we pool receivables with similar risk characteristics and consider a number of current conditions, past events and other factors, including the length of time trade accounts receivable are past due, previous loss history, and the condition of the general economy and the industry as a whole, and apply an expected loss percentage. The expected credit loss percentage is determined using historical loss data adjusted for current conditions and forecasts of future economic conditions. The related expense associated with the recognition of the allowance for credit losses was included in Other operating expense on our condensed consolidated statements of operations. Adjustments to the allowance may be required depending on how potential issues are resolved and when receivables are collected. Accounts deemed uncollectible are reflected as a write-off applied against the allowance for credit losses and occur when the financial condition of our customers deteriorate and result in an impairment of their ability to make payments, include the impact of customer bankruptcies. |
Inventories | Inventories Inventories consist of raw materials used in the manufacturing and maintenance of the Company’s systems, which are stated at the lower of cost or net realizable value. Net realizable value is determined, giving consideration to quality, excessive levels, obsolescence and other factors. Adjustments that reduce stated amounts will be recognized as impairments in the consolidated statements of operations. There were no impairments recorded for the year ended December 31, 2021. The Company recognized a write down of the carrying value of inventory of $2,565 to its net realizable value during the year ended December 31, 2020. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are stated at cost, or fair value for assets acquired in a business combination, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful service lives of the assets as noted below: Useful Life Systems and related equipment Up to 15 years Machinery and equipment 3-10 years Furniture and fixtures 5 years Computer hardware and software 3-10 years Vehicles 5 years Transloading facility and equipment 15-30 years Buildings and leasehold improvements 15 years Systems and equipment that are in the process of being manufactured are considered property, plant and equipment. However, the systems do not depreciate until they are fully completed. Systems in process are a culmination of material, labor and overhead. Expenditures for maintenance and repairs are expensed as incurred. Betterments that increase the value or materially extend the life of the related assets are capitalized. Upon sale or disposition of property and equipment, the cost and related accumulated depreciation and amortization are removed from the consolidated financial statements and any resulting gain or loss is recognized in the consolidated statements of operations. Refer to Impairment of Long-Lived Assets, Definite-lived Intangible Assets and Right of Use (“ROU”) Assets below for discussion of impairment triggers in the year ended December 31, 2020. |
Definite-lived Intangible Assets | Definite-lived Intangible Assets Identified intangible assets with determinable lives consist primarily of customer relationships, a non-competition agreement and software acquired, as well as patents that were filed for our systems and other intellectual property. Amortization on these assets is calculated on the straight-line method over the estimated useful lives of the assets, which is five Identified intangible assets by major classification consist of the following: Accumulated Net Book Gross Amortization Value As of December 31, 2021: Customer relationships $ 4,703 $ (2,744) $ 1,959 Software acquired in the acquisition of Railtronix 346 (202) 144 Non-competition agreement 225 (184) 41 Patents and other 114 (55) 59 Total identifiable intangibles $ 5,388 $ (3,185) $ 2,203 As of December 31, 2020: Customer relationships $ 4,703 $ (2,072) $ 2,631 Software acquired in the acquisition of Railtronix 346 (152) 194 Non-competition agreement 225 (139) 86 Patents and other 114 (43) 71 Total identifiable intangibles $ 5,388 $ (2,406) $ 2,982 |
Leases | Leases The Company accounts for leases in accordance with FASB ASC Topic 842, Leases (“ASC Topic 842”). We determine if an arrangement is a lease at inception. Short-term leases (i.e., leases of twelve months or less) are recognized in profit or loss on a straight-line basis over the lease term. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, we use our incremental borrowing rate in determining the present value of lease payments based on the information available at the commencement date. Our incremental borrowing rate reflects the estimated rate of interest that we would pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. We use the implicit rate when readily determinable. The ROU asset also includes any lease payments made and excludes lease incentives received. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. See Note 7. Operating Leases The Company leases land and equipment under operating leases which expire at various dates through February 2047. Upon completion of the primary term, both parties have substantive rights to terminate the leases. As a result enforceable rights and obligations do not exist under the rental agreements subsequent to the primary term. Operating leases are included in operating lease ROU assets, current portion of operating lease liabilities, and operating lease liabilities, net of current in the Company’s consolidated balance sheets. Finance Leases The Company leases property under an agreement classified as a finance lease. Finance leases are included in property and equipment, current portion of finance lease liabilities, and finance lease liabilities, net of current in the Company’s consolidated balance sheets. The Company’s lease agreements do not include both lease and non-lease components, extension options or residual value guarantees, and there are no leases that have yet to commence. Additionally, our lease agreements do not impose restrictions on our ability to pay dividends or incur financing obligations. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price of a business over the estimated fair value of the identifiable assets acquired and liabilities assumed. As of December 31, 2021 and 2020, the Company reported $13,004 of goodwill related to the purchase of the silo manufacturing business from Loadcraft Industries Ltd. The Company evaluates goodwill for impairment annually, as of October 31, or more often as facts and circumstances warrant. Factors such as unexpected adverse economic conditions, competition and market changes may require more frequent assessments. Before employing detailed impairment testing methodologies, the Company may first evaluate the likelihood of impairment by considering qualitative factors relevant to the business, such as macroeconomic, industry, market or any other factors that have a significant bearing on fair value. If the Company first utilizes a qualitative approach and determines that it is more likely than not that goodwill is impaired, detailed testing methodologies are then applied. Otherwise, the Company concludes that no impairment has occurred. The Company may also choose to bypass a qualitative approach and opt instead to employ detailed testing methodologies, regardless of a possible more likely than not outcome. If the Company determines through the qualitative approach that detailed testing methodologies are required, or if the qualitative approach is bypassed, the Company compares the fair value of a reporting unit with its carrying amount. If the estimated fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not considered impaired. If the carrying amount of a reporting unit exceeds its estimated fair value, an impairment loss is measured and recorded. During the year ended December 31, 2020, due to the impact of the outbreak of COVID-19 and oil and gas market developments on our business, we updated our goodwill impairment assessment as of March 31, 2020. As a result of the evaluation of goodwill, we recognized a $4,231 impairment loss of goodwill associated with the 2017 purchase of the assets of Railtronix and did not recognize any impairment for the goodwill associated with the Loadcraft Industries Ltd. purchase. A qualitative approach was used for the annual evaluation of goodwill for impairment as of October 31, 2020 and no additional impairments were recognized. The Company did no t recognize any impairments during the year ended December 31, 2021. |
Impairment of Long Lived Assets and Definite-lived Intangible Assets | Impairment of Long-Lived Assets and Definite-Lived Intangible Assets Long-lived assets, such as property, plant, equipment and definite-lived intangible assets and ROU Assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable, such as insufficient cash flows or plans to dispose of or sell long-lived assets before the end of their previously estimated useful lives. For assets classified as held for use, we first group individual assets based on the lowest level for which identifiable cash flows are largely independent of the cash flows from other assets. We then compare estimated future undiscounted cash flows expected to result from the use and eventual disposition of the asset group to its carrying amount. If the asset group's undiscounted cash flows are less than its carrying amount, we then determine the asset group's fair value by using a discounted cash flow analysis and recognize any resulting impairment. This analysis is based on estimates such as management’s short-term and long-term forecast of operating performance, including revenue growth rates and expected profitability margins, estimates of the remaining useful life and service potential of the assets within the asset group, and a discount rate based on our weighted average cost of capital. An impairment loss is measured and recorded as the amount by which the asset group's carrying amount exceeds its fair value. During the first quarter of 2020, due to the impact on our business of reduced demand and oversupply of oil and natural gas, which were exacerbated by COVID-19, the Company performed tests for recoverability of the carrying value of these assets using forecasted undiscounted cash flows as of March 31, 2020. As a result of the impairment analysis, undiscounted cash flows as well as the fair value of the assets associated with our Kingfisher Facility were below their carrying values and the Company recognized impairment losses of $37,775, $2,845 and $410 for property, plant and equipment, ROU assets and other receivables, respectively, during the year ended December 31, 2020. These impairments resulted from an accumulation of factors leading to the loss of significant customers, reduced operating activities and earnings. There were no impairments for the years ended December 31, 2021 or 2019. |
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, transportation, 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. Wellsite Services Revenues for equipment and labor services consist of fixed fees charged to customers for the use of our equipment that unload, store and deliver proppant, water and chemicals at oil and natural gas well sites, which is considered to be our performance obligation. Revenues are recognized over time as the customer uses our systems and we provide supporting labor services. Revenues related to services coordinating the transportation of proppant consist of a fixed rate per ton recognized over time as proppant is transported from a sand mine or transloading facility to our systems, which is considered to be our performance obligation. Revenues for mobilization and transportation of our equipment cost of fixed or pass-through fees are recognized at a point in time when the system has reached its intended destination, which is considered to be our performance obligation. Transloading and Other Revenues from transloading services consist primarily of the fees charged to customers for transloading and storage of proppant or railcars at our transloading facility, which is considered to be our performance obligation. Revenues are typically recognized over time based on fixed railcar storage fees or a throughput fee per ton for proppant delivered to and transloaded at the facility. The Company recorded $1,332 of shortfall revenue during the year ended December 31, 2019. Revenues from inventory software services consist primarily of the fees charged to customers for the use of our Railtronix® inventory management software, which is considered to be our performance obligation. Revenues are recognized over time based on a throughput fee to monitor proppant that is loaded into a railcar, stored at a transload facility or loaded into a truck. Variable consideration typically may relate to discounts, price concessions and incentives. The Company estimates variable consideration based on the amount of consideration we expect to receive. The Company accrues revenue on an ongoing basis to reflect updated information for variable consideration as performance obligations are met. The following table summarizes revenues from our contracts disaggregated by revenue generating activity contained therein for the years ended December 31, 2021, 2020, and 2019: Year Ended December 31, 2021 2020 2019 Wellsite services $ 158,052 $ 100,796 $ 205,893 Transloading and Other 1,137 2,180 35,794 Total revenue $ 159,189 $ 102,976 $ 241,687 |
Stock-based Compensation | Stock-based Compensation Stock-based compensation cost is measured at the grant date based on the fair value of the award and is amortized to compensation expense on a straight-line basis over the awards’ vesting period, which is generally the requisite service period. For options to purchase Class A common stock, we have historically and consistently calculated fair value using the Black-Scholes option-pricing model. This valuation approach involves significant judgments and estimates, including estimates regarding our future operations, price variation and the risk-free rate of return. Our estimates of these variables are made for the purpose of using the valuation model to determine an expense for each reporting period and are not subsequently adjusted. We recognize expense related to the estimated vesting of our performance share units granted. Forfeitures of stock-based compensation are recognized as they occur. |
Financial Instruments | Financial Instruments The carrying value of the Company’s financial instruments, consisting of cash, accounts receivable, notes receivable, accounts payable and insurance premium financing, approximates their fair value due to the short maturity of such instruments. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments other than allowance for credit losses described in Accounts Receivable and Allowance for Credit Losses. |
Fair Value Measurements | The Company’s financial assets and liabilities, as well as other recurring and nonrecurring fair value measurements such as goodwill impairment and long lived assets impairment, are to be measured using inputs from the three levels of the fair value hierarchy, of which the first two are considered observable and the last unobservable, which are as follows: ● Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date; ● Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active or other inputs corroborated by observable market data for substantially the full term of the assets or liabilities; and ● Level 3—Unobservable inputs that reflect the Company’s assumptions that market participants would use in pricing assets or liabilities based on the best information available. |
Income Taxes | Income Taxes Solaris Inc. is a corporation and, as a result, is subject to United States federal, state and local income taxes. For the year ended December 31, 2021, we recognized a combined United States federal and state expense for income taxes of $626 . For the years ended December 31, 2020 and 2019, we recognized income tax benefit of $8,969 and income tax expense of $16,936, respectively. Solaris LLC is treated as a partnership for United States federal income tax purposes and therefore does not pay United States federal income tax on its taxable income. Instead, the Solaris LLC unitholders, including Solaris Inc., are liable for United States federal income tax on their respective shares of Solaris LLC’s taxable income reported on the unitholders’ United States federal income tax returns. Solaris LLC is liable for income taxes in those states not recognizing its status as a partnership for United States federal income tax purposes. We recognize deferred tax assets and liabilities for the expected future tax consequences of events included in the condensed consolidated financial statements. Under this method, we determine deferred tax assets and liabilities on the basis of the differences between the book value and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period in which the enactment date occurs. We recognize deferred tax assets to the extent we believe these assets are more-likely-than-not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent results of operations. We record uncertain tax positions on the basis of a two-step process in which (i) we determine whether it is more-likely-than-not the tax positions will be sustained on the basis of the technical merits of the position and (ii) for those tax positions meeting the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority. Interest and penalties related to income taxes are included in the benefit (provision) for income taxes in our consolidated statement of operations. We have not incurred any significant interest or penalties related to income taxes in any of the periods presented. See Note 10. “Income Taxes” for additional information regarding income taxes. |
Payable Related to the Tax Receivable Agreement | Payable Related to the Tax Receivable Agreement Solaris Inc. entered into a Tax Receivable Agreement (the “Tax Receivable Agreement”) with the members of Solaris LLC (each such person and any permitted transferee, a “TRA Holder,” and together, the “TRA Holders”). This agreement generally provides for the payment by Solaris Inc. to each TRA Holder of 85% of the net cash savings, if any, in United States federal, state and local income tax or franchise tax that Solaris Inc. actually realizes (computed using simplifying assumptions to address the impact of state and local taxes) or is deemed to realize in certain circumstances in periods after the IPO as a result of (i) certain increases in tax basis that occur as a result of Solaris Inc.’s acquisition (or deemed acquisition for United States federal income tax purposes) of all or a portion of such TRA Holder's Solaris LLC Units in connection with the IPO or pursuant to the exercise of the Redemption Right or the Call Right (each as defined in the Solaris LLC Agreement) and (ii) imputed interest deemed to be paid by Solaris Inc. as a result of, and additional tax basis arising from, any payments Solaris Inc. makes under the Tax Receivable Agreement. Solaris Inc. will retain the benefit of the remaining 15% of these cash savings. As of December 31, 2021 and 2020, Solaris Inc. recorded a payable related to the Tax Receivable Agreement of $73,102 and $68,703, respectively, $1,210 and $606 of which has been recorded as a current liability. The increase in payables related to the Tax Receivable Agreement is a result of Solaris Inc.’s acquisition (or deemed acquisition for United States federal income tax purposes) of Solaris LLC Units from TRA Holders during the year ended December 31, 2021. |
Environmental Matters | Environmental Matters The Company is subject to various federal, state and local laws and regulations relating to the protection of the environment. Management has established procedures for the ongoing evaluation of the Company’s operations, to identify potential environmental exposures and to comply with regulatory policies and procedures. Environmental expenditures that relate to current operations are expensed or capitalized as appropriate. Expenditures that relate to an existing condition caused by past operations and do not contribute to current or future revenue generation are expensed as incurred. Liabilities are recorded when environmental costs are probable, and the costs can be reasonably estimated. The Company maintains insurance which may cover in whole or in part certain environmental expenditures. As of December 31, 2021 and 2020, no liabilities were recorded with respect to any environmental matters as no environmental costs were deemed probable. |
Segment Information | Segment Information Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions on how to allocate resources and assess performance. The Company’s chief operating decision maker is the Chief Executive Officer. The Company and the Chief Executive Officer view the Company’s operations and manage its business as one operating segment. All long-lived assets of the Company reside in the United States. |
Accounting Standards Recently Issued But Not Yet Adopted | Accounting Standards Recently Issued But Not Yet Adopted In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform, which provides temporary optional guidance to companies impacted by the transition away from the London Interbank Offered Rate (“LIBOR”). The guidance provides 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. This guidance is effective upon issuance and expires on December 31, 2022. The Company is currently assessing the impact of the LIBOR transition and this ASU on the Company’s financial statement |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |
Schedule of useful life of property, plant and equipment | Useful Life Systems and related equipment Up to 15 years Machinery and equipment 3-10 years Furniture and fixtures 5 years Computer hardware and software 3-10 years Vehicles 5 years Transloading facility and equipment 15-30 years Buildings and leasehold improvements 15 years |
Schedule of intangible assets by major classification | Accumulated Net Book Gross Amortization Value As of December 31, 2021: Customer relationships $ 4,703 $ (2,744) $ 1,959 Software acquired in the acquisition of Railtronix 346 (202) 144 Non-competition agreement 225 (184) 41 Patents and other 114 (55) 59 Total identifiable intangibles $ 5,388 $ (3,185) $ 2,203 As of December 31, 2020: Customer relationships $ 4,703 $ (2,072) $ 2,631 Software acquired in the acquisition of Railtronix 346 (152) 194 Non-competition agreement 225 (139) 86 Patents and other 114 (43) 71 Total identifiable intangibles $ 5,388 $ (2,406) $ 2,982 |
Schedule of disaggregated revenues from contracts | Year Ended December 31, 2021 2020 2019 Wellsite services $ 158,052 $ 100,796 $ 205,893 Transloading and Other 1,137 2,180 35,794 Total revenue $ 159,189 $ 102,976 $ 241,687 |
Allowance for Credit Losses (Ta
Allowance for Credit Losses (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Allowance for Credit Losses | |
Schedule of allowance for credit losses | Balance, December 31, 2019 $ 339 Credit losses 3,073 Adjustments (163) Less write-offs (2,150) Balance, December 31, 2020 $ 1,099 Credit losses 1,624 Adjustments (1,258) Less write-offs (719) Balance, December 31, 2021 $ 746 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Prepaid Expenses and Other Current Assets. | |
Schedule of prepaid expenses and other current assets | December 31, December 31, 2021 2020 Prepaid purchase orders $ 5,048 $ 243 Prepaid insurance 720 554 Deposits 75 77 Employee retention credit 1,900 — Other assets 2,054 1,295 Prepaid expenses and other current assets $ 9,797 $ 2,169 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment | |
Schedule of property plant and equipment | December 31, December 31, 2021 2020 Systems and related equipment $ 306,637 $ 299,413 Systems in process 19,949 12,601 Transloading facility and equipment — — Computer hardware and software 1,201 1,004 Machinery and equipment 5,352 5,272 Vehicles 5,626 3,591 Buildings 4,425 4,342 Land 612 612 Furniture and fixtures 351 348 Property, plant and equipment, gross 344,153 327,183 Less: accumulated depreciation (104,062) (81,299) Property, plant and equipment, net $ 240,091 $ 245,884 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Accrued Liabilities | |
Schedule of accrued liabilities | 2021 2020 Property, plant and equipment $ 148 $ 231 Employee related expenses 5,030 4,300 Selling, general and administrative 745 1,236 Cost of revenue 9,057 4,272 Excise, franchise and sales taxes 1,266 1,813 Ad valorem taxes 643 107 Other 29 27 Accrued liabilities $ 16,918 $ 11,986 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases | |
Schedule of components of lease expense | December 31, 2021 December 31, 2020 Operating lease cost (1) (2) $ 1,187 $ 1,022 Finance lease cost Amortization of ROU assets 26 30 Interest on lease liabilities 4 5 Total finance lease cost $ 30 $ 35 (1) Includes short term leases. (2) Operating lease costs of $741, $78 and $367 were reported in Selling, general and administrative, Cost of system services and Cost of transloading services for the year ended December 31, 2021, respectively. Operating lease costs of $741, $78 and $203 were reported in Selling, general and administrative, Cost of system services and Cost of transloading services for the year ended December 31, 2020, respectively. |
Schedule of future minimum operating lease payments | Future minimum lease payments under non-cancellable operating leases as of December 31, 2021 were as follows: Year Ending December 31, Operating Leases Finance Leases 2022 $ 1,169 33 2023 1,165 33 2024 1,109 33 2025 965 6 2026 974 — Thereafter 6,414 — Total future minimum lease payments 11,796 105 Less: effects of discounting (4,377) (4) Total lease liabilities $ 7,419 $ 101 |
Schedule of future minimum finance lease payments | Year Ending December 31, Operating Leases Finance Leases 2022 $ 1,169 33 2023 1,165 33 2024 1,109 33 2025 965 6 2026 974 — Thereafter 6,414 — Total future minimum lease payments 11,796 105 Less: effects of discounting (4,377) (4) Total lease liabilities $ 7,419 $ 101 |
Schedule of other information | Supplemental cash flow information related to leases were as follows: December 31, 2021 Supplemental Cash Flows Information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,138 Financing cash flows from finance leases 30 Other information related to leases was as follows: December 31, 2021 Weighted Average Remaining Lease Term Operating leases 12.7 years Finance leases 3.2 years Weighted Average Discount Rate Operating leases 6.3% Finance leases 3.3% |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Equity | |
Summary of the option activity | Options Outstanding Weighted Average Weighted Remaining Aggregate Average Exercise Contractual Intrinsic Value Options Price Term (years) (in thousands) Balance, January 1, 2019 138,837 $ 2.87 6.92 $ 1,280 Exercisable, January 1, 2019 138,837 $ 2.87 6.92 $ 1,280 Canceled — — — Granted — — — Exercised (103,207) 2.87 — Forfeited (4) 2.87 — Balance, December 31, 2019 35,626 $ 2.87 5.92 $ 397 Exercisable, December 31, 2019 35,626 $ 2.87 5.92 $ 397 Canceled — — — Granted — — — Exercised (22,421) 2.87 — Forfeited — — — Balance, December 31, 2020 13,205 $ 2.87 4.92 $ 70 Exercisable, December 31, 2020 13,205 $ 2.87 4.92 $ 70 Canceled — — — Granted — — — Exercised (4,600) 2.87 — Forfeited — — — Balance, December 31, 2021 8,605 $ 2.87 3.92 $ 30 Exercisable, December 31, 2021 8,605 $ 2.87 3.92 $ 30 |
Summary of activity related to restricted stock | Restricted Stock Awards Weighted Average Grant Date Fair Number of Shares Value ($) Unvested at January 1, 2019 411,497 $ 13.67 Awarded 448,745 16.62 Vested (208,697) 15.13 Forfeited (24,294) 15.52 Unvested at December 31, 2019 627,251 $ 15.23 Awarded 536,301 9.72 Vested (360,891) 14.48 Forfeited (99,546) 13.14 Unvested at December 31, 2020 703,115 $ 12.33 Awarded 522,794 10.98 Vested (353,307) 12.17 Forfeited (25,287) 10.46 Unvested at December 31, 2021 847,315 $ 11.62 |
Schedule of earnings per share calculation | Year Ended December, Basic net income (loss) per share: 2021 2020 2019 Numerator Net income (loss) attributable to Solaris $ (868) $ (29,341) $ 52,007 Less income attributable to participating securities (1) (365) (314) (1,120) Net income (loss) attributable to common stockholders $ (1,233) $ (29,655) $ 50,887 Denominator Weighted average number of unrestricted outstanding common shares used to calculate basic net income per share 30,786 28,915 30,141 Effect of dilutive securities: Stock options (2) — — 44 Diluted weighted-average shares of Class A common stock outstanding used to calculate diluted net income per share 30,786 28,915 30,185 Earnings (loss) per share of Class A common stock - basic $ (0.04) $ (1.03) $ 1.69 Earnings (loss) per share of Class A common stock - diluted $ (0.04) $ (1.03) $ 1.69 (1) The Company's restricted shares of common stock are participating securities. (2) The year ended December 31, 2019 includes 44 shares of Class A common stock resulting from an assumed exercise of the stock options in the calculation of the denominator for diluted earnings per common share as these shares were dilutive. |
Schedule of antidilutive shares | Year Ended December, 2021 2020 2019 Class B common stock 14,035 15,842 16,688 Stock options 8 13 — Restricted stock awards 282 38 320 Total 14,325 15,893 17,008 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Taxes | |
Schedule of components of income tax expense | Year Ended December 31, 2021 2020 2019 Current: Federal $ — $ — $ — State 494 184 814 494 184 814 Deferred: Federal (20) (8,166) 14,452 State 152 (987) 1,670 132 (9,153) 16,122 Income tax (benefit) expense $ 626 $ (8,969) $ 16,936 |
Schedule of income tax expense differs from the amount computed by applying the statutory federal income tax rate | Year Ended December 31, 2021 2020 2019 Income (loss) before income taxes $ (634) $ (60,062) $ 107,296 Less: net income (loss) before income taxes attributable to noncontrolling interest (392) (21,752) 38,353 Income (loss) attributable to Solaris Oilfield Infrastructure, Inc. stockholders before income taxes (242) (38,310) 68,943 Income tax expense (benefit) at the federal statutory rate (70) (8,176) 14,548 State income taxes, net of federal benefit 465 (350) 1,740 Remeasurement of deferred taxes 139 (348) — Other 92 (95) 648 Income tax (benefit) expense $ 626 $ (8,969) $ 16,936 |
Schedule of deferred tax assets and liabilities | December 31, 2021 2020 Assets: Investments in subsidiaries $ 11,507 $ 13,686 Imputed interest 2,519 1,594 Net operating loss carryforward 49,732 45,339 Total deferred tax assets 63,758 60,619 Liabilities: Investments in subsidiaries — — Total deferred tax liabilities — — Net deferred tax asset $ 63,758 $ 60,619 |
Schedule of changes in gross unrecognized tax benefits | Year Ended December 31, 2021 2020 2019 Balance, January 1, $ 816 $ 816 $ 816 Additions for the current year tax — — — Additions related to prior years — — — Balance, December 31, $ 816 $ 816 $ 816 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Property (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment | ||
Inventory write-down | $ 0 | $ 2,565 |
Systems and related equipment | Maximum | ||
Property, Plant and Equipment | ||
Property, plant and equipment useful life | 15 years | |
Machinery and equipment | Minimum | ||
Property, Plant and Equipment | ||
Property, plant and equipment useful life | 3 years | |
Machinery and equipment | Maximum | ||
Property, Plant and Equipment | ||
Property, plant and equipment useful life | 10 years | |
Furniture and fixtures | ||
Property, Plant and Equipment | ||
Property, plant and equipment useful life | 5 years | |
Computer hardware and software | Minimum | ||
Property, Plant and Equipment | ||
Property, plant and equipment useful life | 3 years | |
Computer hardware and software | Maximum | ||
Property, Plant and Equipment | ||
Property, plant and equipment useful life | 10 years | |
Vehicles | ||
Property, Plant and Equipment | ||
Property, plant and equipment useful life | 5 years | |
Transloading facility and equipment | Minimum | ||
Property, Plant and Equipment | ||
Property, plant and equipment useful life | 15 years | |
Transloading facility and equipment | Maximum | ||
Property, Plant and Equipment | ||
Property, plant and equipment useful life | 30 years | |
Buildings and leasehold improvements | ||
Property, Plant and Equipment | ||
Property, plant and equipment useful life | 15 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Intangible assets by major classification | |||
Intangible amortization expense | $ 779 | $ 779 | $ 779 |
Gross | 5,388 | 5,388 | |
Accumulated Amortization | (3,185) | (2,406) | |
Net Book Value | $ 2,203 | 2,982 | |
Minimum | |||
Intangible assets by major classification | |||
Definite-lived intangible assets useful life | 5 years | ||
Maximum | |||
Intangible assets by major classification | |||
Definite-lived intangible assets useful life | 15 years | ||
Customer relationships | |||
Intangible assets by major classification | |||
Gross | $ 4,703 | 4,703 | |
Accumulated Amortization | (2,744) | (2,072) | |
Net Book Value | 1,959 | 2,631 | |
Software acquired in the acquisition of Railtronix | |||
Intangible assets by major classification | |||
Gross | 346 | 346 | |
Accumulated Amortization | (202) | (152) | |
Net Book Value | 144 | 194 | |
Non-competition agreement | |||
Intangible assets by major classification | |||
Gross | 225 | 225 | |
Accumulated Amortization | (184) | (139) | |
Net Book Value | 41 | 86 | |
Patents and other | |||
Intangible assets by major classification | |||
Gross | 114 | 114 | |
Accumulated Amortization | (55) | (43) | |
Net Book Value | $ 59 | $ 71 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Impairments (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Intangible assets by major classification | ||||
Goodwill acquired | $ 13,004 | $ 13,004 | ||
Goodwill impairment | 0 | |||
Impairment of long-lived assets | $ 0 | $ 0 | ||
Property, Plant & Equipment | ||||
Intangible assets by major classification | ||||
Impairment of long-lived assets | 37,775 | |||
ROU asset | ||||
Intangible assets by major classification | ||||
Impairment of long-lived assets | 2,845 | |||
Accounts receivable | ||||
Intangible assets by major classification | ||||
Impairment of long-lived assets | $ 410 | |||
Railtronix LLC | ||||
Intangible assets by major classification | ||||
Goodwill impairment | $ 4,231 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Revenue (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2021 | Dec. 31, 2020 | |
Summary of Significant Accounting Policies | |||
Shortfall revenue | $ 1,332 | ||
Class A Common Stock | |||
Summary of Significant Accounting Policies | |||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Revenues Disaggregated (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 159,189 | $ 102,976 | $ 241,687 |
Wellsite services | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 158,052 | 100,796 | 205,893 |
Transloading and Other | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 1,137 | $ 2,180 | $ 35,794 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Miscellaneous (Details) $ in Thousands | May 17, 2017 | Dec. 31, 2021USD ($)segment | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Threshold Period Past Due, Trade Accounts Receivable | 60 days | |||
Tax (benefits) and expenses | $ 626 | $ (8,969) | $ 16,936 | |
Current portion of payables related to Tax Receivable Agreement | 1,210 | 606 | ||
Environmental matters liabilities | 0 | 0 | ||
Environmental matters deemed probable | $ 0 | 0 | ||
Number of operating segments | segment | 1 | |||
Tax Receivable Agreement | ||||
Payments of net cash saving (as a percent) | 85.00% | 85.00% | ||
Benefit of remaining cash savings (as a percent) | 15.00% | |||
Payables related to Tax Receivable Agreement | $ 73,102 | $ 68,703 |
Allowance for Credit Losses (De
Allowance for Credit Losses (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Allowance for Credit Losses | ||
Accounts receivable due maximum period | 60 days | |
Unbilled revenue | $ 6,292 | $ 7,265 |
Allowance for credit losses, beginning | 1,099 | 339 |
Credit losses | 1,624 | 3,073 |
Adjustments | (1,258) | (163) |
Less write-offs | (719) | (2,150) |
Allowance for credit losses, ending | $ 746 | $ 1,099 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Prepaid Expenses and Other Current Assets. | ||
Prepaid purchase orders | $ 5,048 | $ 243 |
Prepaid insurance | 720 | 554 |
Deposits | 75 | 77 |
Employee retention credit | 1,900 | |
Other assets | 2,054 | 1,295 |
Prepaid expenses and other current assets | $ 9,797 | $ 2,169 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Property, Plant and Equipment | ||
Property, plant and equipment, gross | $ 344,153 | $ 327,183 |
Less: accumulated depreciation | (104,062) | (81,299) |
Property, plant and equipment, net | 240,091 | 245,884 |
Systems and related equipment | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 306,637 | 299,413 |
Systems in process | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 19,949 | 12,601 |
Computer hardware and software | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 1,201 | 1,004 |
Machinery and equipment | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 5,352 | 5,272 |
Vehicles | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 5,626 | 3,591 |
Buildings | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 4,425 | 4,342 |
Land | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | 612 | 612 |
Furniture and fixtures | ||
Property, Plant and Equipment | ||
Property, plant and equipment, gross | $ 351 | $ 348 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Accrued Liabilities | ||
Property, plant and equipment | $ 148 | $ 231 |
Employee related expenses | 5,030 | 4,300 |
Selling, general and administrative | 745 | 1,236 |
Cost of revenue | 9,057 | 4,272 |
Excise, franchise and sales taxes | 1,266 | 1,813 |
Ad valorem taxes | 643 | 107 |
Other | 29 | 27 |
Accrued liabilities | $ 16,918 | $ 11,986 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Leases | |||
Property, plant and equipment, cost | $ 344,153 | $ 327,183 | |
Accumulated depreciation | 104,062 | 81,299 | |
Impairment of long-lived assets | 0 | $ 0 | |
Finance leased assets | |||
Leases | |||
Property, plant and equipment, cost | 299 | 299 | |
Accumulated depreciation | $ 147 | 128 | |
ROU asset | |||
Leases | |||
Impairment of long-lived assets | $ 2,845 |
Leases - Lease cost (Details)
Leases - Lease cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Leases | ||
Operating lease cost | $ 1,187 | $ 1,022 |
Amortization of ROU assets | 26 | 30 |
Interest on lease liabilities | 4 | 5 |
Total finance lease cost | 30 | 35 |
Selling, general and administrative expenses | ||
Leases | ||
Operating lease cost | 741 | 741 |
Cost of sales | System rental | ||
Leases | ||
Operating lease cost | 78 | 78 |
Cost of sales | Transloading services | ||
Leases | ||
Operating lease cost | $ 367 | $ 203 |
Leases - Maturities (Details)
Leases - Maturities (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Operating lease obligations | |
2022 | $ 1,169 |
2023 | 1,165 |
2024 | 1,109 |
2025 | 965 |
2026 | 974 |
Thereafter | 6,414 |
Total future minimum lease payments | 11,796 |
Less: effects of discounting | (4,377) |
Total lease liabilities | 7,419 |
Finance lease obligations | |
2022 | 33 |
2023 | 33 |
2024 | 33 |
2025 | 6 |
Total future minimum lease payments | 105 |
Less: effects of discounting | (4) |
Total lease liabilities | $ 101 |
Leases - Other (Details)
Leases - Other (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Leases | |||
Operating cash flows from operating leases | $ 1,138 | ||
Finance lease cost | 30 | $ 35 | |
Financing cash flows from finance leases | $ 30 | $ 35 | $ 35 |
Weighted Average Remaining Lease Term - Operating leases | 12 years 8 months 12 days | ||
Weighted Average Remaining Lease Term - Finance leases | 3 years 2 months 12 days | ||
Weighted Average Discount Rate - Operating leases | 6.30% | ||
Weighted Average Discount Rate - Finance leases | 3.30% |
Senior Secured Credit Facility
Senior Secured Credit Facility (Details) - 2019 Credit Agreement $ in Thousands | Apr. 26, 2019USD ($) | Feb. 28, 2022USD ($) | Dec. 31, 2021USD ($) |
Debt | |||
Maximum borrowing | $ 50,000 | ||
Potential additional borrowing available | 25,000 | ||
Maximum borrowing capacity with accordion option | 75,000 | ||
Cash adjustment to net indebtedness | $ 3,000 | ||
Leverage ratio for threshold | 2 | ||
Cash threshold triggering repayment | $ 20,000 | ||
Outstanding credit facility | $ 0 | ||
Remaining borrowing capacity | $ 50,000 | ||
Indebtedness to consolidated EBITDA | 2.75 | ||
Senior indebtedness to consolidated EBITDA | 2.50 | ||
Eligible accounts (as a percent) | 100.00% | ||
Eligible accounts to revolving exposure ratio | 1 | ||
Cash threshold over a period of time triggering repayment | $ 5,000 | ||
Period for cash threshold repayment trigger | 180 days | ||
Maximum capital expenditures allowed | $ 100,000 | ||
Minimum | |||
Debt | |||
Commitment fee (as a percent) | 0.375% | ||
Maximum | |||
Debt | |||
Commitment fee (as a percent) | 0.50% | ||
SOFR | Minimum | |||
Debt | |||
Applicable margin rate | 2.75% | ||
SOFR | Maximum | |||
Debt | |||
Applicable margin rate | 3.50% | ||
Alternate base rate | Minimum | |||
Debt | |||
Applicable margin rate | 1.75% | ||
Alternate base rate | Maximum | |||
Debt | |||
Applicable margin rate | 2.50% |
Equity - Dividends (Details)
Equity - Dividends (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Equity | |||
Distributions paid to unit holders | $ 19,205 | $ 19,026 | $ 19,260 |
Distribution received | 13,407 | 12,391 | |
Dividend paid to common stock | 13,407 | 12,391 | |
Dividends paid to restricted stock | 365 | 314 | |
Solaris LLC | |||
Equity | |||
Distributions paid to unit holders | $ 19,205 | $ 19,026 |
Equity - Share Repurchase (Deta
Equity - Share Repurchase (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | 15 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2020 | Feb. 27, 2020 | Dec. 03, 2019 | |
Equity | |||||
Share Repurchase, Authorized | $ 5,000 | $ 25,000 | |||
Repurchased and retired (in shares) | 2,374,092 | 251,930 | 2,626,022 | ||
Repurchased and retired | $ 26,746 | $ 3,254 | $ 30,000 | ||
Average price (in dollars per share) | $ 11.27 | $ 12.90 | $ 11.41 | ||
Solaris LLC | |||||
Equity | |||||
Repurchased and retired (in shares) | 2,374,092 | 251,930 | 2,626,022 |
Equity - SBC (Details)
Equity - SBC (Details) - USD ($) $ / shares in Units, $ in Thousands | May 17, 2017 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Stock-based compensation | ||||
Proceeds from stock option exercises | $ 13 | $ 64 | $ 294 | |
Stock options | ||||
Stock-based compensation | ||||
Options grant date fair value (in dollars per shares) | $ 12.04 | |||
Vesting period | 4 years | |||
Stock-based compensation expense | $ 0 | $ 0 | $ 0 | |
Options granted (in dollars per shares) | $ 2.87 | |||
Class A Common Stock | ||||
Stock-based compensation | ||||
Reserved for issuance (in shares) | 5,118,080 | |||
Class A Common Stock | Stock options | ||||
Stock-based compensation | ||||
Shares issued in exchange for options (in shares) | 4,600 | 22,421 | 103,207 |
Equity - Option Activity (Detai
Equity - Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2018 | May 17, 2017 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Number of shares | |||||
Options outstanding, beginning (in shares) | 13,205 | 35,626 | 138,837 | ||
Options exercised (in shares) | (4,600) | (22,421) | (103,207) | ||
Options forfeited (in shares) | (4) | ||||
Options outstanding, end (in shares) | 138,837 | 8,605 | 13,205 | 35,626 | |
Exercisable (in shares) | 138,837 | 8,605 | 13,205 | 35,626 | |
Weighted average exercise price | |||||
Options outstanding, beginning (in dollars per share) | $ 2.87 | $ 2.87 | $ 2.87 | ||
Options exercised (in dollars per shares) | 2.87 | 2.87 | 2.87 | ||
Options forfeited (in dollars per shares) | 2.87 | ||||
Options outstanding, end (in dollars per share) | $ 2.87 | 2.87 | 2.87 | 2.87 | |
Exercisable (in dollars per share) | $ 2.87 | $ 2.87 | $ 2.87 | $ 2.87 | |
Weighted average remaining contractual life | |||||
Outstanding | 6 years 11 months 1 day | 3 years 11 months 1 day | 4 years 11 months 1 day | 5 years 11 months 1 day | |
Exercisable | 6 years 11 months 1 day | 3 years 11 months 1 day | 4 years 11 months 1 day | 5 years 11 months 1 day | |
Share Based Compensation Arrangement By Share Based Payment Award Options Aggregate Intrinsic Value Abstract | |||||
Options Outstanding, Value | $ 70 | $ 397 | $ 1,280 | ||
Exercisable | $ 1,280 | 30 | 70 | 397 | |
Options Outstanding, Value | $ 1,280 | $ 30 | $ 70 | $ 397 | |
Unvested options outstanding (in shares) | 0 | ||||
Stock options | |||||
Number of shares | |||||
Options granted (in shares) | 591,261 | ||||
Options exercised (in shares) | (549,306) | ||||
Options forfeited (in shares) | (33,348) | ||||
Options outstanding, end (in shares) | 8,606 | ||||
Weighted average exercise price | |||||
Options granted (in dollars per shares) | $ 2.87 |
Equity - Restricted stock (Deta
Equity - Restricted stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Other non-option information | |||
Available for grant (in shares) | 2,466,988 | ||
Restricted stock awards | |||
Number of Shares | |||
Unvested, beginning (in shares) | 703,115 | 627,251 | 411,497 |
Awarded (in shares) | 522,794 | 536,301 | 448,745 |
Vested (in shares) | (353,307) | (360,891) | (208,697) |
Forfeited (in shares) | (25,287) | (99,546) | (24,294) |
Unvested, end (in shares) | 847,315 | 703,115 | 627,251 |
Weighted Average Grant Date Fair Value | |||
Unvested, beginning (in dollars per share) | $ 12.33 | $ 15.23 | $ 13.67 |
Awarded (in dollars per share) | 10.98 | 9.72 | 16.62 |
Vested (in dollars per share) | 12.17 | 14.48 | 15.13 |
Forfeited (in dollars per share) | 10.46 | 13.14 | 15.52 |
Unvested, end (in dollars per share) | $ 11.62 | $ 12.33 | $ 15.23 |
Other non-option information | |||
Unrecognized compensation costs | $ 5,663 | ||
Expected period for recognizing compensation expense | 9 months 21 days | ||
Restricted stock awards | First vesting period | |||
Other non-option information | |||
Unrecognized compensation costs (in shares) | 414,274 | ||
Restricted stock awards | Second vesting period | |||
Other non-option information | |||
Unrecognized compensation costs (in shares) | 266,053 | ||
Restricted stock awards | Third vesting period | |||
Other non-option information | |||
Unrecognized compensation costs (in shares) | 166,989 |
Equity - EPS (Details)
Equity - EPS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Numerator | |||
Net income (loss) attributable to Solaris | $ (868) | $ (29,341) | $ 52,007 |
Income (loss) attributable to participating securities | (365) | (314) | (1,120) |
Net income (loss) attributable to common stockholders | $ (1,233) | $ (29,655) | $ 50,887 |
Effect of dilutive securities: | |||
Stock options (in shares) | 44 | ||
Class A Common Stock | |||
Denominator | |||
Weighted average number of unrestricted outstanding common shares used to calculate basic net income (loss) per share | 30,786 | 28,915 | 30,141 |
Diluted weighted-average shares of Class A common stock outstanding (in shares) | 30,786 | 28,915 | 30,185 |
Effect of dilutive securities: | |||
Stock options (in shares) | 44 | ||
Earnings (loss) per share of Class A common stock - basic (in dollars per share) | $ (0.04) | $ (1.03) | $ 1.69 |
Earnings (loss) per share of Class A common stock - diluted (in dollars per share) | $ (0.04) | $ (1.03) | $ 1.69 |
Equity - Antidilutive (Details)
Equity - Antidilutive (Details) - shares | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Potentially dilutive shares | |||
Excluded from EPS calculation (in shares) | 14,325 | 15,893 | 17,008 |
Class B Common Stock | |||
Potentially dilutive shares | |||
Excluded from EPS calculation (in shares) | 14,035 | 15,842 | 16,688 |
Restricted stock awards | |||
Potentially dilutive shares | |||
Excluded from EPS calculation (in shares) | 282 | 38 | 320 |
Stock options | |||
Potentially dilutive shares | |||
Excluded from EPS calculation (in shares) | 8 | 13 |
Income Taxes - Components of ex
Income Taxes - Components of expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Current: | |||
State | $ 494 | $ 184 | $ 814 |
Total | 494 | 184 | 814 |
Deferred: | |||
Federal | (20) | (8,166) | 14,452 |
State | 152 | (987) | 1,670 |
Total | 132 | (9,153) | 16,122 |
Income tax (benefit) expense | $ 626 | $ (8,969) | $ 16,936 |
Income Taxes - Expense reconcil
Income Taxes - Expense reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Taxes | |||
U.S. federal corporate tax rate | 21.00% | 21.00% | 21.00% |
Income (loss) before income taxes | $ (634) | $ (60,062) | $ 107,296 |
Less: net (income) loss related to non-controlling interests | 392 | 21,752 | (38,353) |
Income (loss) attributable to Solaris Oilfield Infrastructure, Inc. stockholders before income taxes | (242) | (38,310) | 68,943 |
Income tax expense (benefit) at the federal statutory rate | (70) | (8,176) | 14,548 |
State income taxes, net of federal benefit | 465 | (350) | 1,740 |
Remeasurement of deferred taxes | 139 | (348) | |
Other | 92 | (95) | 648 |
Income tax (benefit) expense | $ 626 | $ (8,969) | $ 16,936 |
Income Taxes - Deferred assets
Income Taxes - Deferred assets and liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Assets: | ||
Investments in subsidiaries | $ 11,507 | $ 13,686 |
Imputed interest | 2,519 | 1,594 |
Net operating loss carryforward | 49,732 | 45,339 |
Total deferred tax assets | 63,758 | 60,619 |
Net deferred tax asset | $ 63,758 | $ 60,619 |
Income Taxes - NOL (Details)
Income Taxes - NOL (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Operating loss | |
Employee retention credit | $ 1,900 |
Federal | |
Operating loss | |
Operating loss carryovers | 223,720 |
Operating loss carryovers, no expiration date | 157,912 |
State | |
Operating loss | |
Operating loss carryovers | 49,861 |
Operating loss carryovers, set to expire | 25,895 |
Consolidated Appropriations Act of 2021 | |
Operating loss | |
Other operating income | 3,100 |
Proceeds from credit | 1,200 |
Employee retention credit | $ 1,900 |
Income Taxes - Uncertain Tax Be
Income Taxes - Uncertain Tax Benefits (Details) - USD ($) $ in Thousands | May 17, 2017 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Uncertain Tax Benefits | ||||
Balance, beginning | $ 816 | $ 816 | $ 816 | |
Additions for the current year tax | 0 | 0 | 0 | |
Balance, Ending | 816 | 816 | $ 816 | |
Payables related to Tax Receivable Agreement | 71,892 | $ 68,097 | ||
Tax Receivable Agreement | ||||
Uncertain Tax Benefits | ||||
Payables related to Tax Receivable Agreement | $ 73,102 | |||
Payments of net cash saving (as a percent) | 85.00% | 85.00% |
Concentrations (Details)
Concentrations (Details) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue | Customer | One Customer | |||
Concentrations | |||
Concentration risk (as a percent) | 26.00% | 14.00% | 19.00% |
Revenue | Customer | Two Customers | |||
Concentrations | |||
Concentration risk (as a percent) | 10.00% | ||
Accounts receivable | Customer | One Customer | |||
Concentrations | |||
Concentration risk (as a percent) | 29.00% | ||
Accounts receivable | Customer | Two Customers | |||
Concentrations | |||
Concentration risk (as a percent) | 13.00% | ||
Accounts receivable | Customer | Four Customers | |||
Concentrations | |||
Concentration risk (as a percent) | 42.00% | ||
Purchases | Supplier | One Supplier | |||
Concentrations | |||
Concentration risk (as a percent) | 24.00% | 19.00% | |
Accounts payables | Supplier | One Supplier | |||
Concentrations | |||
Concentration risk (as a percent) | 13.00% | ||
Accounts payables | Supplier | Two Suppliers | |||
Concentrations | |||
Concentration risk (as a percent) | 10.00% |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Solaris Energy Management, LLC | |
Other commitments | $ 4,260 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | Oct. 01, 2021 | Aug. 31, 2021 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Feb. 10, 2022 | Mar. 26, 2021 |
Related Party Transactions | |||||||||
Due from related party | $ 101 | $ 101 | $ 103 | ||||||
Due to related party | 80 | 80 | 55 | ||||||
ProFrac-Cisco Agreement | |||||||||
Related Party Transactions | |||||||||
Payment made to related party | 500 | $ 1,500 | |||||||
Other commitments | $ 4,000 | ||||||||
Term of agreement | 3 years | ||||||||
Tax Receivable Agreement | |||||||||
Related Party Transactions | |||||||||
Payment made to related party | $ 600 | ||||||||
Payables related to Tax Receivable Agreement | 73,102 | 73,102 | 68,703 | ||||||
William A. Zartler | |||||||||
Related Party Transactions | |||||||||
Payment made to related party | 823 | $ 723 | $ 1,127 | ||||||
Solaris Energy Management, LLC | |||||||||
Related Party Transactions | |||||||||
Other commitments | 4,260 | 4,260 | |||||||
THRC Affiliates | |||||||||
Related Party Transactions | |||||||||
Due from related party | 3,600 | 3,600 | |||||||
Due to related party | $ 200 | 200 | |||||||
Revenue from related party | 13,500 | ||||||||
Related party costs | $ 3,600 | ||||||||
THRC | |||||||||
Related Party Transactions | |||||||||
Voting power (as a percent) | 7.20% | 5.90% | |||||||
THRC | Solaris Oilfield Infrastructure | |||||||||
Related Party Transactions | |||||||||
Noncontrolling interest (as a percent) | 10.30% | 8.50% |