Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 25, 2023 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-38090 | |
Entity Registrant Name | SOLARIS OILFIELD INFRASTRUCTURE, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 81-5223109 | |
Entity Address, Address Line One | 9651 Katy Freeway, Suite 300 | |
Entity Address, City or Town | Houston | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77024 | |
City Area Code | 281 | |
Local Phone Number | 501-3070 | |
Title of 12(b) Security | Class A Common Stock, $0.01 par value | |
Trading Symbol | SOI | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001697500 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Former Address | ||
Document and Entity Information | ||
Entity Address, Address Line One | 9811 Katy Freeway, Suite 700 | |
Entity Address, City or Town | Houston | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77024 | |
Class A Common Stock | ||
Document and Entity Information | ||
Entity Common Stock, Shares Outstanding | 30,581,265 | |
Class B Common Stock | ||
Document and Entity Information | ||
Entity Common Stock, Shares Outstanding | 13,671,971 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 3,451 | $ 8,835 |
Prepaid expenses and other current assets | 5,633 | 5,151 |
Inventories | 7,447 | 5,289 |
Assets held for sale | 3,000 | |
Total current assets | 74,891 | 88,743 |
Property, plant and equipment, net | 327,427 | 298,160 |
Non-current inventories | 1,856 | 1,569 |
Operating lease right-of-use assets | 12,773 | 4,033 |
Goodwill | 13,004 | 13,004 |
Intangible assets, net | 884 | 1,429 |
Deferred tax assets | 49,398 | 55,370 |
Other assets | 275 | 268 |
Total assets | 480,508 | 462,576 |
Current liabilities: | ||
Accounts payable | 20,053 | 25,934 |
Accrued liabilities | 18,002 | 25,252 |
Current portion of payables related to Tax Receivable Agreement | 1,092 | |
Current portion of operating lease liabilities | 1,599 | 917 |
Current portion of finance lease liabilities | 2,429 | 1,924 |
Other current liabilities | 822 | 790 |
Total current liabilities | 42,905 | 55,909 |
Operating lease liabilities, net of current | 13,197 | 6,212 |
Borrowings under the credit agreement | 37,000 | 8,000 |
Finance lease liabilities, net of current | 3,029 | 3,429 |
Payables related to Tax Receivable Agreement | 71,530 | 71,530 |
Other long-term liabilities | 120 | 367 |
Total liabilities | 167,781 | 145,447 |
Commitments and contingencies (Note 9) | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value, 50,000 shares authorized, none issued and outstanding | ||
Additional paid-in capital | 187,700 | 202,551 |
Retained earnings | 16,811 | 12,847 |
Total stockholders' equity attributable to Solaris | 204,802 | 215,715 |
Non-controlling interest | 107,925 | 101,414 |
Total stockholders' equity | 312,727 | 317,129 |
Total liabilities and stockholders' equity | 480,508 | 462,576 |
Related Party | ||
Current assets: | ||
Accounts receivable | 7,065 | 4,925 |
Nonrelated Party | ||
Current assets: | ||
Accounts receivable | 48,295 | 64,543 |
Class A Common Stock | ||
Stockholders' equity: | ||
Common Stock | 291 | 317 |
Class B Common Stock | ||
Stockholders' equity: | ||
Common Stock |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Allowance for credit losses | $ 316 | $ 385 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 50,000 | 50,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Class A Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 600,000 | 600,000 |
Common stock, shares issued | 29,052 | 31,641 |
Common stock, shares outstanding | 29,052 | 31,641 |
Class B Common Stock | ||
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized | 180,000 | 180,000 |
Common stock, shares issued | 13,674 | 13,674 |
Common stock, shares outstanding | 13,674 | 13,674 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue: | ||||
Revenue | $ 69,676 | $ 92,325 | $ 229,600 | $ 235,951 |
Operating costs and expenses: | ||||
Cost of services (excluding depreciation) | 42,102 | 64,171 | 140,977 | 163,079 |
Depreciation and amortization | 9,179 | 7,716 | 26,667 | 21,777 |
Property tax contingency | 3,072 | |||
Selling, general and administrative | 6,359 | 5,929 | 19,722 | 17,202 |
Impairment of fixed assets | 1,423 | 1,423 | ||
Other operating (income)/expense, net | 613 | 524 | 150 | (899) |
Total operating costs and expenses | 59,676 | 78,340 | 188,939 | 204,231 |
Operating income | 10,000 | 13,985 | 40,661 | 31,720 |
Interest expense, net | (1,057) | (141) | (2,395) | (308) |
Total other expense | (1,057) | (141) | (2,395) | (308) |
Income before income tax expense | 8,943 | 13,844 | 38,266 | 31,412 |
Income tax expense | (1,305) | (2,332) | (6,450) | (5,889) |
Net income | 7,638 | 11,512 | 31,816 | 25,523 |
Less: net income related to non-controlling interests | (2,704) | (4,106) | (11,781) | (9,162) |
Net income attributable to Solaris | 4,934 | 7,406 | 20,035 | 16,361 |
Related Party | ||||
Revenue: | ||||
Revenue | 5,249 | 2,949 | 17,420 | 13,609 |
Nonrelated Party | ||||
Revenue: | ||||
Revenue | $ 64,427 | $ 89,376 | $ 212,180 | $ 222,342 |
Class A Common Stock | ||||
Operating costs and expenses: | ||||
Income per share of Class A common stock - basic (in dollars per share) | $ 0.16 | $ 0.22 | $ 0.64 | $ 0.49 |
Income per share of Class A common stock - diluted (in dollars per share) | $ 0.16 | $ 0.22 | $ 0.64 | $ 0.49 |
Basic weighted-average shares of Class A common stock outstanding (in shares) | 29,025,293 | 31,598,612 | 29,919,094 | 31,424,530 |
Diluted weighted-average shares of Class A common stock outstanding (in shares) | 29,025,293 | 31,598,612 | 29,919,094 | 31,424,530 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock Class A Common Stock | Common Stock Class B Common Stock | Additional Paid-in Capital | Retained Earnings | Non-controlling Interest | Total |
Balance at beginning of period at Dec. 31, 2021 | $ 312 | $ 196,912 | $ 5,925 | $ 94,727 | $ 297,876 | |
Balance at beginning of period (in shares) at Dec. 31, 2021 | 31,146 | 13,770 | ||||
Changes in Stockholders' Equity | ||||||
Net effect of deferred tax asset and payables related to the vesting of restricted stock | 610 | 610 | ||||
Stock-based compensation | 1,188 | 520 | 1,708 | |||
Vesting of restricted stock | $ 3 | 574 | (577) | |||
Vesting of restricted stock (in shares) | 366 | |||||
Cancelled shares withheld for taxes from RSU vesting | $ (1) | (302) | (388) | (299) | (990) | |
Cancelled shares withheld for taxes from RSU vesting (in shares) | (96) | |||||
Unitholder Distributions | (1,446) | (1,446) | ||||
Dividends paid (Class A common stock) | (3,441) | (3,441) | ||||
Net income | 3,502 | 2,220 | 5,722 | |||
Balance at end of period at Mar. 31, 2022 | $ 314 | 198,982 | 5,598 | 95,145 | 300,039 | |
Balance at end of period (in shares) at Mar. 31, 2022 | 31,416 | 13,770 | ||||
Balance at beginning of period at Dec. 31, 2021 | $ 312 | 196,912 | 5,925 | 94,727 | 297,876 | |
Balance at beginning of period (in shares) at Dec. 31, 2021 | 31,146 | 13,770 | ||||
Changes in Stockholders' Equity | ||||||
Net income | 25,523 | |||||
Balance at end of period at Sep. 30, 2022 | $ 316 | 201,720 | 11,509 | 99,204 | 312,749 | |
Balance at end of period (in shares) at Sep. 30, 2022 | 31,638 | 13,674 | ||||
Balance at beginning of period at Mar. 31, 2022 | $ 314 | 198,982 | 5,598 | 95,145 | 300,039 | |
Balance at beginning of period (in shares) at Mar. 31, 2022 | 31,416 | 13,770 | ||||
Changes in Stockholders' Equity | ||||||
Exchange of Solaris LLC Units and shares of Class B common stock for shares of Class A common stock | $ 1 | 683 | (684) | |||
Exchange of Solaris LLC Units and shares of Class B common stock for shares of Class A common stock (in shares) | 96 | (96) | ||||
Net effect of 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 and the vesting of restricted stock | (437) | (437) | ||||
Stock-based compensation | 1,121 | 490 | 1,611 | |||
Vesting of restricted stock | 9 | (9) | ||||
Vesting of restricted stock (in shares) | 7 | |||||
Cancelled shares withheld for taxes from RSU vesting | (4) | (6) | (7) | (17) | ||
Cancelled shares withheld for taxes from RSU vesting (in shares) | (2) | |||||
Solaris LLC distribution paid to Solaris LLC unitholders for income tax withholding | (1,446) | (1,446) | ||||
Dividends paid (Class A common stock) | (3,444) | (3,444) | ||||
Net income | 5,453 | 2,836 | 8,289 | |||
Balance at end of period at Jun. 30, 2022 | $ 315 | 200,354 | 7,601 | 96,325 | 304,595 | |
Balance at end of period (in shares) at Jun. 30, 2022 | 31,517 | 13,674 | ||||
Changes in Stockholders' Equity | ||||||
Net effect of deferred tax asset and payables related to the vesting of restricted stock | (9) | (9) | ||||
Stock-based compensation | 1,146 | 496 | 1,642 | |||
Vesting of restricted stock | $ 1 | 258 | (259) | |||
Vesting of restricted stock (in shares) | 130 | |||||
Cancelled shares withheld for taxes from RSU vesting | (29) | (36) | (28) | (93) | ||
Cancelled shares withheld for taxes from RSU vesting (in shares) | (9) | |||||
Solaris LLC distribution paid to Solaris LLC unitholders for income tax withholding | (1,436) | (1,436) | ||||
Dividends paid (Class A common stock) | (3,462) | (3,462) | ||||
Net income | 7,406 | 4,106 | 11,512 | |||
Balance at end of period at Sep. 30, 2022 | $ 316 | 201,720 | 11,509 | 99,204 | 312,749 | |
Balance at end of period (in shares) at Sep. 30, 2022 | 31,638 | 13,674 | ||||
Balance at beginning of period at Dec. 31, 2022 | $ 317 | 202,551 | 12,847 | 101,414 | 317,129 | |
Balance at beginning of period (in shares) at Dec. 31, 2022 | 31,641 | 13,674 | ||||
Changes in Stockholders' Equity | ||||||
Share and unit repurchases and retirements | $ (17) | (10,543) | (3,295) | (572) | (14,427) | |
Share and unit repurchases and retirements (in shares) | (1,641) | |||||
Net effect of deferred tax asset and payables related to the vesting of restricted stock | 594 | 594 | ||||
Stock-based compensation | 1,494 | 660 | 2,154 | |||
Vesting of restricted stock | $ 5 | 903 | (908) | |||
Vesting of restricted stock (in shares) | 547 | |||||
Cancelled shares withheld for taxes from RSU vesting | $ (1) | (536) | (384) | (415) | (1,336) | |
Cancelled shares withheld for taxes from RSU vesting (in shares) | (148) | |||||
Unitholder Distributions | (1,985) | (1,985) | ||||
Dividends paid (Class A common stock) | (3,656) | (3,656) | ||||
Net income | 7,569 | 4,368 | 11,937 | |||
Balance at end of period at Mar. 31, 2023 | $ 304 | 194,463 | 13,081 | 102,562 | 310,410 | |
Balance at end of period (in shares) at Mar. 31, 2023 | 30,399 | 13,674 | ||||
Balance at beginning of period at Dec. 31, 2022 | $ 317 | 202,551 | 12,847 | 101,414 | 317,129 | |
Balance at beginning of period (in shares) at Dec. 31, 2022 | 31,641 | 13,674 | ||||
Changes in Stockholders' Equity | ||||||
Net income | 31,816 | |||||
Balance at end of period at Sep. 30, 2023 | $ 291 | 187,700 | 16,811 | 107,925 | 312,727 | |
Balance at end of period (in shares) at Sep. 30, 2023 | 29,052 | 13,674 | ||||
Balance at beginning of period at Mar. 31, 2023 | $ 304 | 194,463 | 13,081 | 102,562 | 310,410 | |
Balance at beginning of period (in shares) at Mar. 31, 2023 | 30,399 | 13,674 | ||||
Changes in Stockholders' Equity | ||||||
Share and unit repurchases and retirements | $ (14) | (9,222) | (1,990) | (104) | (11,330) | |
Share and unit repurchases and retirements (in shares) | (1,438) | |||||
Stock-based compensation | 1,399 | 647 | 2,046 | |||
Vesting of restricted stock | $ 1 | 16 | (17) | |||
Vesting of restricted stock (in shares) | 10 | |||||
Cancelled shares withheld for taxes from RSU vesting | $ (1) | (9) | (2) | (7) | (19) | |
Cancelled shares withheld for taxes from RSU vesting (in shares) | (3) | |||||
Unitholder Distributions | (1,504) | (1,504) | ||||
Dividends paid (Class A common stock) | (3,388) | (3,388) | ||||
Net income | 7,532 | 4,709 | 12,241 | |||
Balance at end of period at Jun. 30, 2023 | $ 290 | 186,647 | 15,233 | 106,286 | 308,456 | |
Balance at end of period (in shares) at Jun. 30, 2023 | 28,968 | 13,674 | ||||
Changes in Stockholders' Equity | ||||||
Net effect of deferred tax asset and payables related to the vesting of restricted stock | (536) | (536) | ||||
Stock-based compensation | 1,387 | 653 | 2,040 | |||
Vesting of restricted stock | $ 1 | 209 | (210) | |||
Vesting of restricted stock (in shares) | 85 | |||||
Cancelled shares withheld for taxes from RSU vesting | (7) | 2 | (4) | (9) | ||
Cancelled shares withheld for taxes from RSU vesting (in shares) | (1) | |||||
Unitholder Distributions | (1,504) | (1,504) | ||||
Dividends paid (Class A common stock) | (3,358) | (3,358) | ||||
Net income | 4,934 | 2,704 | 7,638 | |||
Balance at end of period at Sep. 30, 2023 | $ 291 | $ 187,700 | $ 16,811 | $ 107,925 | $ 312,727 | |
Balance at end of period (in shares) at Sep. 30, 2023 | 29,052 | 13,674 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | |
Sep. 30, 2022 | Jun. 30, 2022 | |
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY | ||
Distributions paid to unit holders (in dollars per unit) | $ 0.105 | $ 0.105 |
Cash dividends paid (in dollars per share) | $ 0.105 | $ 0.105 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities: | ||
Net income | $ 31,816 | $ 25,523 |
Adjustment to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 26,667 | 21,777 |
Impairment of fixed assets | 1,423 | |
Loss on disposal of assets | 604 | 1,307 |
Allowance for credit losses | 160 | (420) |
Stock-based compensation | 5,830 | 4,665 |
Amortization of debt issuance costs | 114 | 127 |
Deferred income tax expense | 6,019 | 5,143 |
Change in payables related to parties pursuant to Tax Receivable Agreement | (654) | |
Other | (178) | (178) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 16,088 | (38,563) |
Accounts receivable - related party | (2,140) | 1,011 |
Prepaid expenses and other current assets | 263 | 2,972 |
Inventories | (5,020) | (4,744) |
Accounts payable | (6,469) | 12,569 |
Accrued liabilities | (7,744) | 10,305 |
Property tax contingency | 3,072 | |
Payments pursuant to tax receivable agreement | (1,092) | |
Net cash provided by operating activities | 66,341 | 43,912 |
Cash flows from investing activities: | ||
Investment in property, plant and equipment | (57,117) | (59,527) |
Cash received from insurance proceeds | 122 | 1,308 |
Proceeds from disposal of assets | 2,165 | 422 |
Net cash used in investing activities | (54,830) | (57,797) |
Cash flows from financing activities: | ||
Share repurchases | (25,757) | |
Distribution to unitholders (includes distribution of $4.5 million at $0.11/unit and $4.3 million at $0.105/unit, respectively) | (4,993) | (4,327) |
Dividend paid to Class A common stock shareholders | (10,402) | (10,348) |
Borrowings under the credit agreement | 35,000 | 9,000 |
Repayment of credit agreement | (6,000) | (3,000) |
Payments under finance leases | (1,908) | (1,100) |
Payments under insurance premium financing | (1,380) | (946) |
Payments related to debt issuance cost | (91) | (358) |
Payments for shares withheld for taxes from RSU vesting and cancelled | (1,364) | (1,100) |
Net cash used in financing activities | (16,895) | (12,179) |
Net decrease in cash and cash equivalents | (5,384) | (26,064) |
Cash and cash equivalents at beginning of period | 8,835 | 36,497 |
Cash and cash equivalents at end of period | 3,451 | 10,433 |
Investing: | ||
Capitalized depreciation in property, plant and equipment | 202 | 424 |
Capitalized stock based compensation | 410 | 296 |
Property and equipment additions incurred but not paid at period-end | 588 | 3,436 |
Property, plant and equipment additions transferred from inventory | 2,575 | 1,210 |
Additions to fixed assets through finance leases | 2,012 | 4,554 |
Financing: | ||
Insurance premium financing | 283 | 806 |
Cash paid for: | ||
Interest | 2,079 | 102 |
Income Taxes | $ 478 | $ 370 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
Cash dividends paid (in dollars per share) | $ 0.11 | $ 0.105 |
Distribution to unitholders | $ 4.5 | $ 4.3 |
Organization and Background of
Organization and Background of Business | 9 Months Ended |
Sep. 30, 2023 | |
Organization and Background of Business | |
Organization and Background of Business | 1. Organization and Background of Business Description of Business We design and manufacture specialized equipment, which combined with field technician support, last mile logistics services and our software solutions, enables us to provide a service offering that helps oil and natural gas operators and their suppliers drive efficiencies that reduce operational footprint and costs during the completion phase of well development. Our equipment and services are deployed across active oil and natural gas basins in the United States. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation and Consolidation Solaris Oilfield Infrastructure, Inc. (either individually or together with its subsidiaries, as the context requires, “Solaris Inc.” or the “Company”) is the managing member of Solaris Oilfield Infrastructure, LLC (“Solaris LLC”) and is responsible for all operational, management and administrative decisions relating to Solaris LLC’s business. Solaris Inc. consolidates the financial results of Solaris LLC and its subsidiaries and reports a non-controlling interest related to the portion of the units in Solaris LLC (the “Solaris LLC Units”) not owned by Solaris Inc., which will reduce net income attributable to the holders of Solaris Inc.’s Class A common stock. The accompanying interim unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). These financial statements reflect all normal recurring adjustments that are necessary for fair presentation. Operating results for the three and nine months ended September 30, 2023 and 2022 are not necessarily indicative of the results that may be expected for the full year or for any interim period. The unaudited interim condensed consolidated financial statements do not include all information or notes required by GAAP for annual financial statements and should be read together with Solaris Inc.’s Annual Report on Form 10-K for the year ended December 31, 2022 and notes thereto. All material intercompany transactions and balances have been eliminated upon consolidation. Global Economic, Geopolitical and Market Conditions The recent conflict in the Israel-Gaza region and the ongoing war in Ukraine each have the potential to disrupt the supply and demand for oil and natural gas across the globe. The degree to which these and other events outside of our control adversely impacts our results will depend on future developments, which are highly uncertain, cannot be predicted and are outside of our control. The timing, extent, trajectory and duration of their impacts upon our business and the industry in which we, our customers and vendors operate could impact any subsequent recovery of normal economic and operating conditions. 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 are related to stock-based compensation, useful lives and salvage values of long-lived assets, future cash flows associated with goodwill and long-lived asset impairment evaluations, net realizable value of inventory, income taxes, Tax Receivable Agreement liability, collectability of accounts receivable and estimates of allowance for credit losses and determination of the present value of lease payments and right-of-use assets. 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. Nonrecurring measurements Certain assets are measured at fair value on a nonrecurring basis. These items are not measured at fair value on an ongoing basis but may be subject to fair value adjustments in certain circumstances. As of September 30, 2023, these assets include certain systems and related equipment that met the held for sale criteria upon entering into a non-binding sale agreement with a third party. These assets were recorded to assets held for sale at a total fair value of $3.0 million in the unaudited condensed consolidated balance sheet. The Company determined the fair value based on the sale price included in the non-binding sale agreement, which is a Level 3 input. As the carrying value of the fixed assets classified as held for sale exceeded their fair value less estimated costs to sell, we recorded an impairment of $1.4 million in the condensed consolidated statement of operations. 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 The majority of our contracts contain multiple performance obligations, such as work orders containing a combination of equipment, last mile logistics services, and labor services. We allocate the transaction price to each performance obligation identified in the contract based on relative stand-alone selling prices, or estimates of such prices, and recognize the related revenue as control of each individual product or service is transferred to the customer, in satisfaction of the corresponding performance obligations. We measure progress using an input method based on resources consumed or expended relative to the total resources expected to be consumed or expended. We assess our customers’ ability and intention to pay, which is based on a variety of factors including historical payment experience and financial condition and we typically charge our customers on a weekly or monthly basis. Contracts with customers are typically on thirty- to sixty-day payment terms. Disaggregation of Revenue The following table summarizes revenues from our contracts disaggregated by revenue generating activity contained therein for the three and nine months ended September 30, 2023 and 2022: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Wellsite services $ 69.5 $ 92.1 $ 229.1 $ 235.2 Transloading and Other 0.2 0.2 0.5 0.8 Total revenue $ 69.7 $ 92.3 $ 229.6 $ 236.0 Recently Issued Accounting Standards In March 2020, the Financial Accounting Standards Board issued ASU No. 2020-04, Reference Rate Reform, which provided temporary optional guidance to companies impacted by the transition away from the London Interbank Offered Rate (“LIBOR”). The guidance provided certain expedients and exceptions to applying GAAP in order to lessen the potential accounting burden when contracts, hedging relationships, and other transactions that reference LIBOR as a benchmark rate are modified. The original guidance expired on December 31, 2022, and ASU No. 2022-06 extended the effective date of the guidance to December 31, 2024. As described more fully in Note 7. “Income Taxes,” the Tax Receivable Agreement was amended on June 27, 2023, to replace the references to LIBOR. |
Property, Plant and Equipment
Property, Plant and Equipment | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment | |
Property, Plant and Equipment | Property, plant and equipment are stated at cost. We manufacture or construct most of our systems. During the manufacturing of these assets, they are reflected as systems in process until complete. Modifications to existing systems, including the expenditures for upgrades and enhancements that result in additional functionality, increased efficiency, or the extension of the estimated useful life, are capitalized. As of September 30, 2023, we classified $4.4 million of certain systems and related equipment, net of accumulated depreciation, to assets held for sale upon entering into a non-binding sale agreement with a third party. As the carrying value of the fixed assets classified as held for sale exceeded their fair value less estimated costs to sell, we recorded an impairment of $1.4 million in the condensed consolidated statement of operations. Property, plant and equipment consists of the following: September 30, December 31, 2023 2022 Systems and related equipment $ 404.4 $ 369.3 Systems in process 44.0 30.1 Computer hardware and software 3.9 1.7 Machinery and equipment 5.7 5.4 Vehicles 14.2 13.2 Buildings 4.8 4.6 Land 0.6 0.6 Furniture and fixtures 1.3 0.4 Property, plant and equipment, gross $ 478.9 $ 425.3 Less: accumulated depreciation (151.5) (127.1) Property, plant and equipment, net $ 327.4 $ 298.2 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2023 | |
Leases | |
Leases | 4. Leases The components of lease expense were as follows: Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Operating lease cost (1) $ 0.5 $ 0.4 $ 1.5 $ 1.0 Finance lease cost Amortization of ROU assets 0.6 0.2 1.8 1.1 Interest on lease liabilities 0.1 0.1 0.3 0.1 Total finance lease cost $ 0.7 $ 0.3 $ 2.1 $ 1.2 (1) Future minimum lease payments under non-cancellable operating leases as of September 30, 2023 were as follows: Year Ending December 31, Operating Leases Finance Leases 2023 (remainder of) $ 0.6 0.7 2024 2.6 2.7 2025 2.4 2.0 2026 2.3 0.5 2027 2.3 — 2028 2.0 — Thereafter 9.5 — Total future minimum lease payments 21.7 5.9 Less: effects of discounting (6.9) (0.4) Total lease liabilities $ 14.8 $ 5.5 Supplemental cash flow information related to leases were as follows: Nine Months Ended Nine Months Ended September 30, 2023 September 30, 2022 Supplemental Cash Flows Information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1.1 $ 0.9 Financing cash flows from finance leases 1.9 1.1 Other information related to leases was as follows: September 30, December 31, 2023 2022 Weighted Average Remaining Lease Term Operating leases 10.3 years 11.9 years Finance leases 2.7 years 2.9 years Weighted Average Discount Rate Operating leases 6.9% 6.3% Finance leases 5.7% 5.7% |
Senior Secured Credit Facility
Senior Secured Credit Facility | 9 Months Ended |
Sep. 30, 2023 | |
Senior Secured Credit Facility | |
Senior Secured Credit Facility | 5. Senior Secured Credit Facility On April 28, 2023, Solaris LLC executed Amendment No. 2 to the Amended and Restated Credit Agreement, by and among Solaris LLC, as borrower, each of the guarantors party thereto, each of the lenders party thereto, and Wells Fargo Bank, National Association, as administrative agent (the “2023 Amendment”) to the Amended and Restated Credit Agreement (the “Credit Agreement”), which was entered into on April 26, 2019, by and among Solaris LLC, as borrower, each of the guarantors party thereto, each of the lenders party thereto and Wells Fargo Bank, National Association, as administrative agent, and contained an initial $50.0 borrowing facility. The 2023 Amendment introduced an additional As of September 30, 2023, we had $37.0 borrowings outstanding under the Credit Agreement and have the ability to draw up to an additional $38.0. Our obligations under the Loan are generally secured by a pledge of substantially all the assets of Solaris LLC and its subsidiaries, and such obligations are guaranteed by Solaris LLC’s domestic subsidiaries other than Immaterial Subsidiaries (as defined in the Credit Agreement). We have the option to prepay the loans at any time without penalty. Borrowings under the Credit Agreement bear interest at either Term Secured Overnight Financing Rate (“SOFR”) or an alternate base rate plus an applicable margin, and interest is payable quarterly for alternate base rate loans or the last business day of the interest period applicable to SOFR loans. The applicable margin ranges from 2.75% to 3.75% for SOFR loans and 1.75% to 2.75% for alternate base rate loans, in each case depending on our total leverage ratio and loan tranche. The Credit Agreement requires that we pay a quarterly commitment fee on undrawn amounts of the Loan, ranging from 0.375% to 0.5% depending upon the total leverage ratio. The weighted average interest rate on the borrowings outstanding as of September 30, 2023 was approximately 8.34%. The Credit Agreement requires that we maintain ratios of (i) consolidated EBITDA to interest expense of not less than 2.75 to 1.00, (ii) senior indebtedness to consolidated EBITDA of not more than 2.50 to 1.00 and (iii) the sum of 100% of eligible accounts, inventory and fixed assets to the total revolving exposure of not less than 1.00 to 1.00 when the total leverage ratio is greater than 2.00 to 1.00 and total revolving exposure under the Loan exceeds $3.0. For the purpose of these tests, certain items are subtracted from indebtedness and senior indebtedness. EBITDA, as defined in the Credit Agreement, excludes certain noncash items and any extraordinary, unusual or nonrecurring gains, losses or expenses. The Credit Agreement also requires that we prepay any outstanding borrowings in the event our total consolidated cash balance exceeds $20.0 on the last business day of every other calendar week, taking into account certain adjustments. Capital expenditures are not restricted unless borrowings under the Loan exceed $5.0 for any 180 consecutive day period, in which case capital expenditures will be permitted up to $100.0 plus any unused availability for capital expenditures from the immediately preceding fiscal year. As of September 30, 2023, we were in compliance with all covenants under the Credit Agreement. |
Equity
Equity | 9 Months Ended |
Sep. 30, 2023 | |
Equity | |
Equity | Dividends Solaris LLC paid dividend distributions totaling $4.9 and $4.9 to all Solaris LLC unitholders in the three months ended September 30, 2023 and 2022, respectively, of which $3.4 and $3.5 was paid to Solaris Inc. Solaris LLC paid dividend distributions totaling $14.9 and $14.7 to all Solaris LLC unitholders in the nine months ended September 30, 2023 and 2022, respectively, of which $10.4 and $10.3 was paid to Solaris Inc. Solaris Inc. used the proceeds from the distributions to pay quarterly cash dividends to all holders of shares of Class A common stock. On March 1, 2023, the Company’s board of directors authorized a share repurchase plan to repurchase up to $50.0 of the Company’s Class A common stock until the plan terminates pursuant to its provisions. No shares were purchased and retired during the three months ended September 30, 2023. During the nine months ended September 30, 2023, Solaris Inc. purchased and retired 3,078,500 shares of the Company’s Class A common stock at an aggregate cost of $25.8, or $8.38 per share, under the share repurchase program. As of September 30, 2023, $24.2 remains available for future repurchases authorized under the share repurchase plan. The Company has accrued stock repurchase excise tax of $0.3 for the nine months ended September 30, 2023. Stock-Based Compensation The Company’s long-term incentive plan for employees, directors and consultants (the “LTIP”) provides for the grant of all or any of the following types of equity-based awards: (i) incentive stock options qualified as such under United States federal income tax laws; (ii) stock options that do not qualify as incentive stock options; (iii) stock appreciation rights; (iv) restricted stock awards; (v) restricted stock units; (vi) bonus stock; (vii) performance awards; (viii) dividend equivalents; (ix) other stock-based awards; (x) cash awards; and (xi) substitute awards. Subject to adjustment in accordance with the terms of the LTIP, 5,118,080 shares of Solaris Inc.’s Class A common stock were originally reserved for issuance pursuant to awards under the LTIP and, pursuant to the First Amendment to the LTIP that was approved by the Company’s stockholders and became effective as of May 17, 2023, an additional 4,700,000 shares of Solaris Inc.’s Class A common stock were reserved for issuance pursuant to awards under the LTIP. As of September 30, 2023, 5,417,457 shares of Solaris Inc.’s Class A common stock were available for grant under the LTIP. The following table summarizes activity related to restricted stock for the three and nine months ended September 30, 2023: Restricted Stock Awards Number of Shares Weighted Average Grant Date Fair Value ($) Unvested at January 1, 2023 1,295,728 $ 10.33 Awarded 790,201 9.19 Vested (548,992) 9.74 Forfeited (9,648) 9.82 Unvested at March 31, 2023 1,527,289 $ 9.71 Awarded 16,038 7.48 Vested (7,606) 10.70 Forfeited (26,924) 9.66 Unvested at June 30, 2023 1,508,797 $ 9.68 Awarded 128,355 10.53 Vested (85,160) 10.58 Forfeited (26,078) 9.51 Unvested at September 30, 2023 1,525,914 $ 9.69 Of the 1,525,914 shares of restricted stock that remained unvested as of September 30, 2023, it is expected that 739,918 shares, 528,420 shares, and 257,576 shares will vest in 2024, 2025 and 2026, respectively, in each case, subject to the applicable vesting terms governing such shares of restricted stock. There was approximately $11.0 of unrecognized compensation expense related to unvested restricted stock as of September 30, 2023. The unrecognized compensation expense will be recognized over the weighted average remaining vesting period of The following table summarizes activity related to PSUs for the three and nine months ended September 30, 2023: Weighted-Average Grant Date Fair Number of Units Value ($) Outstanding at January 1, 2023 — $ — Granted 176,898 11.92 Forfeited — — Outstanding at March 31, 2023 176,898 $ 11.92 Granted — — Forfeited (4,686) 11.92 Outstanding at June 30, 2023 172,212 $ 11.92 Granted — — Forfeited — — Outstanding at September 30, 2023 172,212 $ 11.92 Of the 172,212 performance-based restricted stock units (“PSUs”) that remained outstanding as of September 30, 2023, such PSUs had a weighted average grant date fair value of $11.92 per share. The performance criteria for the PSUs are split as follows: ● Relative PSUs: 50% of the PSUs are based on total shareholder return relative to the total shareholder return of a predetermined group of peer companies. This relative total shareholder return is calculated at the end of the performance periods stipulated in the PSU agreement. ● Absolute PSUs: 50% of the PSUs have a performance criteria of absolute total shareholder return calculated at the end of the performance period stipulated in the PSU agreement. The vesting and payout of the PSUs occur when the related service condition is completed, which is approximately one The grant date fair value was determined using the Monte Carlo simulation method and is expensed ratably over the service period. Expected volatilities used in the fair value simulation were estimated using historical periods consistent with the remaining performance periods. The risk-free rate was based on the U.S. Treasury rate for a term commensurate with the expected life of the grant. We used the following assumptions to estimate the fair value of such PSUs (which, for purposes of clarity, were granted during the three months ended March 31, 2023): Assumptions Risk-free interest rate 4.6% Volatility 58.93% Income Per Share Basic income per share of Class A common stock is computed by dividing net income attributable to Solaris Inc. by the weighted-average number of shares of Class A common stock outstanding during the same period. Diluted income per share is computed giving effect to all potentially dilutive shares. The following table sets forth the calculation of income (loss) per share for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, Basic net income (loss) per share: 2023 2022 2023 2022 Numerator Net income attributable to Solaris $ 4.9 $ 7.4 $ 20.0 $ 16.4 Less: income attributable to participating securities (1) (0.2) (0.3) (0.9) (0.7) Net income attributable to common stockholders $ 4.7 $ 7.1 $ 19.1 $ 15.7 Denominator Weighted average number of unrestricted outstanding common shares used to calculate basic net income per share 29,025,293 31,598,612 29,919,094 31,424,530 Diluted weighted-average shares of Class A common stock outstanding used to calculate diluted net income per share 29,025,293 31,598,612 29,919,094 31,424,530 Income per share of Class A common stock - basic $ 0.16 $ 0.22 $ 0.64 $ 0.49 Income per share of Class A common stock - diluted $ 0.16 $ 0.22 $ 0.64 $ 0.49 (1) The Company’s restricted shares of common stock are participating securities. The following number of weighted-average potentially dilutive shares were excluded from the calculation of diluted income (loss) per share because the effect of including such potentially dilutive shares would have been antidilutive upon conversion: Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Class B common stock 13,671,971 13,671,971 13,671,971 13,731,975 Restricted stock awards 1,505,675 1,349,260 1,466,069 1,251,329 Performance-based restricted stock awards 270,373 — 134,488 — Stock Options 6,605 7,013 6,605 7,063 Total 15,454,624 15,028,244 15,279,133 14,990,367 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2023 | |
Income Taxes | |
Income Taxes | 7. Income Taxes Income Taxes Based on our cumulative earnings history and forecasted future sources of taxable income, we believe that we will be able to realize our deferred tax assets in the future. As the Company reassesses this position in the future, changes in cumulative earnings history, excluding non-recurring charges, or changes to forecasted taxable income may alter this expectation and may result in an increase in the valuation allowance and an increase in the effective tax rate. Section 382 of the Internal Revenue Code of 1986, contains rules that limit the ability of a company that undergoes an “ownership change” to utilize its net operating loss and tax credit carryovers and certain built-in losses recognized in years after the “ownership change.” An “ownership change” is generally defined as any change in ownership of more than 50% of a corporation’s stock over a rolling three-year period by stockholders that own (directly or indirectly) 5% or more of the stock of a corporation, or arising from a new issuance of stock by a corporation. If an ownership change occurs, Section 382 generally imposes an annual limitation on the use of pre-ownership change net operating loss carryovers to offset taxable income earned after the ownership change. We do not believe the Section 382 annual limitation related to historical ownership changes impacts our ability to utilize our net operating losses; however, if we were to experience a future ownership change our ability to use net operating losses may be impacted. Payables Related to the Tax Receivable Agreement |
Concentrations
Concentrations | 9 Months Ended |
Sep. 30, 2023 | |
Concentrations | |
Concentrations | 8. Concentrations For the three months ended September 30, 2023, two customers accounted for 13% and 12% of the Company’s revenues. For the three months ended September 30, 2022, one customer accounted for 23% of the Company’s revenues. For the nine months ended September 30, 2023, three customers accounted for 12%, 12% and 11% of the Company’s revenues. For the nine months ended September 30, 2022, one customer accounted for 21% of the Company’s revenues. As of September 30, 2023, two customers accounted for 16% and 14% of the Company’s accounts receivable. As of December 31, 2022, one customer accounted for 22% of the Company’s accounts receivable. For the three months ended September 30, 2023, one supplier accounted for 11% of the Company’s total purchases. For the nine months ended September 30, 2023, one supplier accounted for 10% of the Company’s total purchases. For the three and nine months ended September 30, 2022, no supplier accounted for more than 10% of the Company’s total purchases. As of September 30, 2023, two suppliers accounted for 16% and 11% of the Company’s accounts payable. As of December 31, 2022, one supplier accounted for 13% of the Company’s accounts payable. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies | |
Commitments and Contingencies | 9. Commitments and Contingencies Tax Matters We are subject to a number of state and local taxes that are not income-based. As many of these taxes are subject to assessment and audit by the taxing authorities, it is possible that an assessment or audit could result in additional taxes due. We accrue additional taxes when we determine that it is probable that we will have incurred a liability and we can reasonably estimate the amount of the liability. On June 16, 2022, Cause Number CV20-09-372, styled Solaris Oilfield Site Services v. Brown County Appraisal District, was presented to the 35th District Court of Brown County, Texas. The 35 th Litigation and Claims In the normal course of business, the Company is subjected to various claims, legal actions, contract negotiations and disputes. The Company provides for losses, if any, in the year in which they can be reasonably estimated. In management’s opinion, there are currently no such matters outstanding that would have a material effect on the accompanying condensed consolidated financial statements. Purchase Obligations In the normal course of business, the Company enters into purchase obligations for products and services, primarily related to equipment or parts for manufacturing equipment. As of September 30, 2023, we had purchase obligations of approximately $6.2 million payable within the next twelve months. See Note 10 “Related Party Transactions” for contingent payments related to contracts with customers. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2023 | |
Related Party Transactions | |
Related Party Transactions | 10. Related Party Transactions The Company recognizes certain costs incurred in relation to transactions incurred in connection with the amended and restated administrative services agreement, dated May 17, 2017, between Solaris LLC and Solaris Energy Management, LLC, a company owned by William A. Zartler, the Chief Executive Officer and Chairman of the Board. These services include rent paid for office space, travel services, personnel, consulting and administrative costs. For the three months ended September 30, 2023 and 2022, Solaris LLC paid $0.3 and $0.2 , respectively, for these services, included in selling, general and administrative costs in the condensed consolidated statement of operations. For the nine months ended September 30, 2023 and 2022, Solaris LLC paid $0.8 and $0.7 , respectively, for these services, included in selling, general and administrative costs in the condensed consolidated statement of operations. As of September 30, 2023, and December 31, 2022, the Company included $0.1 and $0.1 , respectively, in prepaid expenses and other current assets on the condensed consolidated balance sheets. Additionally, as of September 30, 2023 and December 31, 2022, the Company included $0.1 and $0.1 , respectively, of accruals to related parties in accrued liabilities on the consolidated balance sheet The Company has executed a guarantee of lease agreement with Solaris Energy Management, LLC, a related party of the Company, related to the rental of office space. The total future guaranty under the guarantee of lease agreement with Solaris Energy Management, LLC is $3.7 as of September 30, 2023. As of September 30, 2023, THRC Holdings, LP, an entity managed by THRC Management, LLC (collectively “THRC”), held shares representing a 11.1% ownership of the Company’s Class A common stock and 7.5% ownership of the total shares outstanding. THRC is affiliated with certain of the Company’s customers, including ProFrac Services, LLC and certain of the Company’s suppliers including Automatize Logistics, LLC, IOT-EQ, LLC and Cisco Logistics, LLC (together the “THRC Affiliates”). For the three months ended September 30, 2023 and September 30, 2022, the Company recognized revenues related to our service offering provided to the THRC Affiliates of For the three months ended September 30, 2023 and September 30, 2022, the Company recognized cost of services provided by THRC Affiliates of $0.3 and $1.4, respectively. For the nine months ended September 30, 2023 and September 30, 2022, the Company recognized cost of services provided by THRC Affiliates of $1.9 and $3.1, respectively. As of September 30, 2023 and December 31, 2022, there was $1.5 and $0.3, respectively, of accounts payable related to THRC Affiliates. Solaris is the dedicated wellsite sand storage provider (“Services”) to certain THRC Affiliates. Solaris provides volume-based pricing for the Services and may be required to pay up to $4.0 in payments throughout a term ending in 2024, contingent upon the ability of these affiliates to meet minimum Services revenue thresholds. As of September 30, 2023, accounts payable to THRC Affiliates related to these services is $1.4, which was recognized in revenues. On January 31, 2023, the Company made payments of $1.1 under the Tax Receivable Agreement. Solaris LLC made a cash distribution to Solaris Inc. of $1.1 to satisfy these obligations and concurrently made a cash distribution on a pro rata basis to each of the other members of Solaris LLC of $0.4. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Summary of Significant Accounting Policies | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation Solaris Oilfield Infrastructure, Inc. (either individually or together with its subsidiaries, as the context requires, “Solaris Inc.” or the “Company”) is the managing member of Solaris Oilfield Infrastructure, LLC (“Solaris LLC”) and is responsible for all operational, management and administrative decisions relating to Solaris LLC’s business. Solaris Inc. consolidates the financial results of Solaris LLC and its subsidiaries and reports a non-controlling interest related to the portion of the units in Solaris LLC (the “Solaris LLC Units”) not owned by Solaris Inc., which will reduce net income attributable to the holders of Solaris Inc.’s Class A common stock. The accompanying interim unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). These financial statements reflect all normal recurring adjustments that are necessary for fair presentation. Operating results for the three and nine months ended September 30, 2023 and 2022 are not necessarily indicative of the results that may be expected for the full year or for any interim period. The unaudited interim condensed consolidated financial statements do not include all information or notes required by GAAP for annual financial statements and should be read together with Solaris Inc.’s Annual Report on Form 10-K for the year ended December 31, 2022 and notes thereto. All material intercompany transactions and balances have been eliminated upon consolidation. |
Global Economic, Geopolitical and Market Conditions | Global Economic, Geopolitical and Market Conditions The recent conflict in the Israel-Gaza region and the ongoing war in Ukraine each have the potential to disrupt the supply and demand for oil and natural gas across the globe. The degree to which these and other events outside of our control adversely impacts our results will depend on future developments, which are highly uncertain, cannot be predicted and are outside of our control. The timing, extent, trajectory and duration of their impacts upon our business and the industry in which we, our customers and vendors operate could impact any subsequent recovery of normal economic and operating conditions. |
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 are related to stock-based compensation, useful lives and salvage values of long-lived assets, future cash flows associated with goodwill and long-lived asset impairment evaluations, net realizable value of inventory, income taxes, Tax Receivable Agreement liability, collectability of accounts receivable and estimates of allowance for credit losses and determination of the present value of lease payments and right-of-use assets. |
Fair Value Measurements | 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. Nonrecurring measurements Certain assets are measured at fair value on a nonrecurring basis. These items are not measured at fair value on an ongoing basis but may be subject to fair value adjustments in certain circumstances. As of September 30, 2023, these assets include certain systems and related equipment that met the held for sale criteria upon entering into a non-binding sale agreement with a third party. These assets were recorded to assets held for sale at a total fair value of $3.0 million in the unaudited condensed consolidated balance sheet. The Company determined the fair value based on the sale price included in the non-binding sale agreement, which is a Level 3 input. As the carrying value of the fixed assets classified as held for sale exceeded their fair value less estimated costs to sell, we recorded an impairment of $1.4 million in the condensed consolidated statement of operations. |
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 The majority of our contracts contain multiple performance obligations, such as work orders containing a combination of equipment, last mile logistics services, and labor services. We allocate the transaction price to each performance obligation identified in the contract based on relative stand-alone selling prices, or estimates of such prices, and recognize the related revenue as control of each individual product or service is transferred to the customer, in satisfaction of the corresponding performance obligations. We measure progress using an input method based on resources consumed or expended relative to the total resources expected to be consumed or expended. We assess our customers’ ability and intention to pay, which is based on a variety of factors including historical payment experience and financial condition and we typically charge our customers on a weekly or monthly basis. Contracts with customers are typically on thirty- to sixty-day payment terms. Disaggregation of Revenue The following table summarizes revenues from our contracts disaggregated by revenue generating activity contained therein for the three and nine months ended September 30, 2023 and 2022: Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Wellsite services $ 69.5 $ 92.1 $ 229.1 $ 235.2 Transloading and Other 0.2 0.2 0.5 0.8 Total revenue $ 69.7 $ 92.3 $ 229.6 $ 236.0 |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In March 2020, the Financial Accounting Standards Board issued ASU No. 2020-04, Reference Rate Reform, which provided temporary optional guidance to companies impacted by the transition away from the London Interbank Offered Rate (“LIBOR”). The guidance provided certain expedients and exceptions to applying GAAP in order to lessen the potential accounting burden when contracts, hedging relationships, and other transactions that reference LIBOR as a benchmark rate are modified. The original guidance expired on December 31, 2022, and ASU No. 2022-06 extended the effective date of the guidance to December 31, 2024. As described more fully in Note 7. “Income Taxes,” the Tax Receivable Agreement was amended on June 27, 2023, to replace the references to LIBOR. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Summary of Significant Accounting Policies | |
Schedule of disaggregated revenues from contracts | Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Wellsite services $ 69.5 $ 92.1 $ 229.1 $ 235.2 Transloading and Other 0.2 0.2 0.5 0.8 Total revenue $ 69.7 $ 92.3 $ 229.6 $ 236.0 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Property, Plant and Equipment | |
Schedule of property plant and equipment | September 30, December 31, 2023 2022 Systems and related equipment $ 404.4 $ 369.3 Systems in process 44.0 30.1 Computer hardware and software 3.9 1.7 Machinery and equipment 5.7 5.4 Vehicles 14.2 13.2 Buildings 4.8 4.6 Land 0.6 0.6 Furniture and fixtures 1.3 0.4 Property, plant and equipment, gross $ 478.9 $ 425.3 Less: accumulated depreciation (151.5) (127.1) Property, plant and equipment, net $ 327.4 $ 298.2 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases | |
Schedule of components of lease expense | Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Operating lease cost (1) $ 0.5 $ 0.4 $ 1.5 $ 1.0 Finance lease cost Amortization of ROU assets 0.6 0.2 1.8 1.1 Interest on lease liabilities 0.1 0.1 0.3 0.1 Total finance lease cost $ 0.7 $ 0.3 $ 2.1 $ 1.2 |
Schedule of future minimum operating lease payments | Year Ending December 31, Operating Leases Finance Leases 2023 (remainder of) $ 0.6 0.7 2024 2.6 2.7 2025 2.4 2.0 2026 2.3 0.5 2027 2.3 — 2028 2.0 — Thereafter 9.5 — Total future minimum lease payments 21.7 5.9 Less: effects of discounting (6.9) (0.4) Total lease liabilities $ 14.8 $ 5.5 |
Schedule of other information | Nine Months Ended Nine Months Ended September 30, 2023 September 30, 2022 Supplemental Cash Flows Information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1.1 $ 0.9 Financing cash flows from finance leases 1.9 1.1 Other information related to leases was as follows: September 30, December 31, 2023 2022 Weighted Average Remaining Lease Term Operating leases 10.3 years 11.9 years Finance leases 2.7 years 2.9 years Weighted Average Discount Rate Operating leases 6.9% 6.3% Finance leases 5.7% 5.7% |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity | |
Summary of activity related to restricted stock | Restricted Stock Awards Number of Shares Weighted Average Grant Date Fair Value ($) Unvested at January 1, 2023 1,295,728 $ 10.33 Awarded 790,201 9.19 Vested (548,992) 9.74 Forfeited (9,648) 9.82 Unvested at March 31, 2023 1,527,289 $ 9.71 Awarded 16,038 7.48 Vested (7,606) 10.70 Forfeited (26,924) 9.66 Unvested at June 30, 2023 1,508,797 $ 9.68 Awarded 128,355 10.53 Vested (85,160) 10.58 Forfeited (26,078) 9.51 Unvested at September 30, 2023 1,525,914 $ 9.69 |
Summary of activity related to PSUs | Weighted-Average Grant Date Fair Number of Units Value ($) Outstanding at January 1, 2023 — $ — Granted 176,898 11.92 Forfeited — — Outstanding at March 31, 2023 176,898 $ 11.92 Granted — — Forfeited (4,686) 11.92 Outstanding at June 30, 2023 172,212 $ 11.92 Granted — — Forfeited — — Outstanding at September 30, 2023 172,212 $ 11.92 |
Schedule of assumptions used to estimate the fair value of PSUs granted | Assumptions Risk-free interest rate 4.6% Volatility 58.93% |
Schedule of income (loss) per share calculation | Three Months Ended September 30, Nine Months Ended September 30, Basic net income (loss) per share: 2023 2022 2023 2022 Numerator Net income attributable to Solaris $ 4.9 $ 7.4 $ 20.0 $ 16.4 Less: income attributable to participating securities (1) (0.2) (0.3) (0.9) (0.7) Net income attributable to common stockholders $ 4.7 $ 7.1 $ 19.1 $ 15.7 Denominator Weighted average number of unrestricted outstanding common shares used to calculate basic net income per share 29,025,293 31,598,612 29,919,094 31,424,530 Diluted weighted-average shares of Class A common stock outstanding used to calculate diluted net income per share 29,025,293 31,598,612 29,919,094 31,424,530 Income per share of Class A common stock - basic $ 0.16 $ 0.22 $ 0.64 $ 0.49 Income per share of Class A common stock - diluted $ 0.16 $ 0.22 $ 0.64 $ 0.49 (1) The Company’s restricted shares of common stock are participating securities. |
Schedule of antidilutive shares | Three Months Ended September 30, Nine Months Ended September 30, 2023 2022 2023 2022 Class B common stock 13,671,971 13,671,971 13,671,971 13,731,975 Restricted stock awards 1,505,675 1,349,260 1,466,069 1,251,329 Performance-based restricted stock awards 270,373 — 134,488 — Stock Options 6,605 7,013 6,605 7,063 Total 15,454,624 15,028,244 15,279,133 14,990,367 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Fair Value Measurements (Details) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2023 USD ($) | Sep. 30, 2023 USD ($) | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets held for sale | $ 3,000 | $ 3,000 |
Impairment of assets | 1,423 | 1,423 |
Nonrecurring measurements | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets held for sale | $ 3,000 | 3,000 |
Impairment of assets | $ 1,400 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Revenues Disaggregated (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 69,676 | $ 92,325 | $ 229,600 | $ 235,951 |
Wellsite services | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 69,500 | 92,100 | 229,100 | 235,200 |
Transloading and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 200 | $ 200 | $ 500 | $ 800 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment | |||
Property, plant and equipment, gross | $ 478,900 | $ 478,900 | $ 425,300 |
Less: accumulated depreciation | (151,500) | (151,500) | (127,100) |
Property, plant and equipment, net | 327,427 | 327,427 | 298,160 |
Impairment of fixed assets | 1,423 | 1,423 | |
Systems and related equipment | |||
Property, Plant and Equipment | |||
Property, plant and equipment, gross | 404,400 | 404,400 | 369,300 |
Assets held for sale | 4,400 | 4,400 | |
Impairment of fixed assets | 1,400 | ||
Systems in process | |||
Property, Plant and Equipment | |||
Property, plant and equipment, gross | 44,000 | 44,000 | 30,100 |
Computer hardware and software | |||
Property, Plant and Equipment | |||
Property, plant and equipment, gross | 3,900 | 3,900 | 1,700 |
Machinery and equipment | |||
Property, Plant and Equipment | |||
Property, plant and equipment, gross | 5,700 | 5,700 | 5,400 |
Vehicles | |||
Property, Plant and Equipment | |||
Property, plant and equipment, gross | 14,200 | 14,200 | 13,200 |
Buildings | |||
Property, Plant and Equipment | |||
Property, plant and equipment, gross | 4,800 | 4,800 | 4,600 |
Land | |||
Property, Plant and Equipment | |||
Property, plant and equipment, gross | 600 | 600 | 600 |
Furniture and fixtures | |||
Property, Plant and Equipment | |||
Property, plant and equipment, gross | $ 1,300 | $ 1,300 | $ 400 |
Leases (Details)
Leases (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Leases | ||
Property, plant and equipment, cost | $ 478.9 | $ 425.3 |
Accumulated depreciation | 151.5 | 127.1 |
Finance leased assets | ||
Leases | ||
Property, plant and equipment, cost | 9.2 | 7.2 |
Accumulated depreciation | $ 2.7 | $ 0.9 |
Leases - Lease cost (Details)
Leases - Lease cost (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Leases | ||||
Operating lease cost | $ 0.5 | $ 0.4 | $ 1.5 | $ 1 |
Amortization of ROU assets | 0.6 | 0.2 | 1.8 | 1.1 |
Interest on lease liabilities | 0.1 | 0.1 | 0.3 | 0.1 |
Total finance lease cost | $ 0.7 | $ 0.3 | $ 2.1 | $ 1.2 |
Leases - Maturities (Details)
Leases - Maturities (Details) $ in Millions | Sep. 30, 2023 USD ($) |
Operating lease obligations | |
2023 (remainder of) | $ 0.6 |
2024 | 2.6 |
2025 | 2.4 |
2026 | 2.3 |
2027 | 2.3 |
2028 | 2 |
Thereafter | 9.5 |
Total future minimum lease payments | 21.7 |
Less: effects of discounting | (6.9) |
Total lease liabilities | 14.8 |
Finance lease obligations | |
2023 (remainder of) | 0.7 |
2024 | 2.7 |
2025 | 2 |
2026 | 0.5 |
Total future minimum lease payments | 5.9 |
Less: effects of discounting | (0.4) |
Total lease liabilities | $ 5.5 |
Leases - Other (Details)
Leases - Other (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Leases | |||
Operating cash flows from operating leases | $ 1,100 | $ 900 | |
Financing cash flows from finance leases | $ 1,908 | $ 1,100 | |
Weighted Average Remaining Lease Term - Operating leases | 10 years 3 months 18 days | 11 years 10 months 24 days | |
Weighted Average Remaining Lease Term - Finance leases | 2 years 8 months 12 days | 2 years 10 months 24 days | |
Weighted Average Discount Rate - Operating leases | 6.90% | 6.30% | |
Weighted Average Discount Rate - Finance leases | 5.70% | 5.70% |
Senior Secured Credit Facility
Senior Secured Credit Facility (Details) - USD ($) $ in Millions | Apr. 28, 2023 | Apr. 26, 2019 | Sep. 30, 2023 |
2019 Credit Agreement | |||
Senior Secured Credit Facility | |||
Maximum borrowing | $ 50 | ||
Cash adjustment to net indebtedness | $ 3 | ||
Senior indebtedness to consolidated EBITDA | 2.50 | ||
Eligible accounts (as a percent) | 100% | ||
Eligible accounts to revolving exposure ratio | 1 | ||
Leverage ratio for debt repayment | 2 | ||
Ratio of consolidated EBITDA to fixed charges | 2.75% | ||
2023 Credit Agreement | |||
Senior Secured Credit Facility | |||
Maximum borrowing | $ 75 | ||
Potential additional borrowing available | 25 | ||
Maximum borrowing capacity with accordion option | 100 | ||
Cash threshold triggering repayment | 20 | ||
Outstanding credit facility | $ 37 | ||
Remaining borrowing capacity | $ 38 | ||
Weighted average interest rate (as a percent) | 8.34% | ||
Cash threshold over a period of time triggering repayment | $ 5 | ||
Period for cash threshold repayment trigger | 180 days | ||
Maximum capital expenditures allowed | $ 100 | ||
2023 Credit Agreement | First quarter of 2024 | |||
Senior Secured Credit Facility | |||
Reducing revolver, percentage | 15% | ||
2023 Credit Agreement | First quarter 2025 | |||
Senior Secured Credit Facility | |||
Reducing revolver, percentage | 20% | ||
2023 Credit Agreement | Minimum | |||
Senior Secured Credit Facility | |||
Commitment fee (as a percent) | 0.375% | ||
2023 Credit Agreement | Maximum | |||
Senior Secured Credit Facility | |||
Commitment fee (as a percent) | 0.50% | ||
2023 Credit Agreement | SOFR | Minimum | |||
Senior Secured Credit Facility | |||
Interest rate | 2.75% | ||
2023 Credit Agreement | SOFR | Maximum | |||
Senior Secured Credit Facility | |||
Interest rate | 3.75% | ||
2023 Credit Agreement | Alternate base rate | Minimum | |||
Senior Secured Credit Facility | |||
Interest rate | 1.75% | ||
2023 Credit Agreement | Alternate base rate | Maximum | |||
Senior Secured Credit Facility | |||
Interest rate | 2.75% |
Equity - Dividends (Details)
Equity - Dividends (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Jan. 31, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Equity | |||||
Distributions paid to unit holders | $ 4,993 | $ 4,327 | |||
Dividend paid to common stock | $ 3,400 | $ 3,500 | 10,402 | 10,348 | |
Solaris LLC | |||||
Equity | |||||
Distributions paid to unit holders | $ 400 | $ 4,900 | $ 4,900 | $ 14,900 | $ 14,700 |
Equity - Share Repurchase (Deta
Equity - Share Repurchase (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2023 | Mar. 01, 2023 | |
Equity | |||
Repurchased and retired (in shares) | 0 | ||
Remaining authorized for future repurchases | $ 24.2 | $ 24.2 | |
Stock repurchase excise tax | $ 0.3 | ||
Class A Common Stock | |||
Equity | |||
Repurchased and retired (in shares) | 3,078,500 | ||
Repurchased and retired | $ 25.8 | ||
Average price (in dollars per share) | $ 8.38 | ||
Class A Common Stock | Maximum | |||
Equity | |||
Share Repurchase, Authorized | $ 50 |
Equity - SBC (Details)
Equity - SBC (Details) - Class A Common Stock - shares | Sep. 30, 2023 | May 17, 2023 |
LTIP | ||
Stock-based compensation | ||
Reserved for issuance (in shares) | 5,118,080 | |
Available for grant (in shares) | 5,417,457 | |
LTIP, 2023 Amendment | ||
Stock-based compensation | ||
Reserved for issuance (in shares) | 4,700,000 |
Equity - Restricted stock (Deta
Equity - Restricted stock (Details) - Restricted stock awards - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2023 | |
Number of Shares | ||||
Unvested, beginning (in shares) | 1,508,797 | 1,527,289 | 1,295,728 | 1,295,728 |
Awarded (in shares) | 128,355 | 16,038 | 790,201 | |
Vested (in shares) | (85,160) | (7,606) | (548,992) | |
Forfeited (in shares) | (26,078) | (26,924) | (9,648) | |
Unvested, end (in shares) | 1,525,914 | 1,508,797 | 1,527,289 | 1,525,914 |
Weighted Average Grant Date Fair Value | ||||
Unvested, beginning (in dollars per share) | $ 9.68 | $ 9.71 | $ 10.33 | $ 10.33 |
Awarded (in dollars per share) | 10.53 | 7.48 | 9.19 | |
Vested (in dollars per share) | 10.58 | 10.70 | 9.74 | |
Forfeited (in dollars per share) | 9.51 | 9.66 | 9.82 | |
Unvested, end (in dollars per share) | $ 9.69 | $ 9.68 | $ 9.71 | $ 9.69 |
Other non-option information | ||||
Unrecognized compensation costs | $ 11 | $ 11 | ||
Expected period for recognizing compensation expense | 1 year 1 month 6 days | |||
First vesting period | ||||
Number of Shares | ||||
Unvested, end (in shares) | 739,918 | 739,918 | ||
Second vesting period | ||||
Number of Shares | ||||
Unvested, end (in shares) | 528,420 | 528,420 | ||
Third vesting period | ||||
Number of Shares | ||||
Unvested, end (in shares) | 257,576 | 257,576 |
Equity - Performance Stock Unit
Equity - Performance Stock Units (Details) - Performance-based restricted stock awards - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2023 | |
Other non-option information | ||||
Relative PSUs (percentage) | 50% | |||
Absolute PSUs (percentage) | 50% | |||
Unrecognized compensation costs | $ 1.5 | $ 1.5 | ||
Expected period for recognizing compensation expense | 2 years 3 months 18 days | |||
Assumptions | ||||
Expected risk-free rate of return (as a percent) | 4.60% | |||
Expected volatility (as a percent) | 58.93% | |||
Number of Shares | ||||
Unvested, beginning (in shares) | 172,212 | 176,898 | ||
Granted (in shares) | 176,898 | |||
Forfeited (in shares) | (4,686) | |||
Unvested, end (in shares) | 172,212 | 172,212 | 176,898 | 172,212 |
Weighted Average Grant Date Fair Value | ||||
Unvested, beginning (in dollars per share) | $ 11.92 | $ 11.92 | ||
Granted (in dollars per share) | $ 11.92 | |||
Forfeited (in dollars per share) | 11.92 | |||
Unvested, end (in dollars per share) | $ 11.92 | $ 11.92 | $ 11.92 | $ 11.92 |
Minimum | ||||
Other non-option information | ||||
Vesting period | 1 year | |||
Maximum | ||||
Other non-option information | ||||
Vesting period | 3 years |
Equity - EPS (Details)
Equity - EPS (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Numerator | ||||
Net income attributable to Solaris | $ 4,934 | $ 7,406 | $ 20,035 | $ 16,361 |
Less: income attributable to participating securities | (200) | (300) | (900) | (700) |
Net income attributable to common stockholders | $ 4,700 | $ 7,100 | $ 19,100 | $ 15,700 |
Class A Common Stock | ||||
Denominator | ||||
Weighted average number of unrestricted outstanding common shares used to calculate basic net income per share | 29,025,293 | 31,598,612 | 29,919,094 | 31,424,530 |
Diluted weighted-average shares of Class A common stock outstanding used to calculate diluted net income per share | 29,025,293 | 31,598,612 | 29,919,094 | 31,424,530 |
Income per share of Class A common stock - basic (in dollars per share) | $ 0.16 | $ 0.22 | $ 0.64 | $ 0.49 |
Income per share of Class A common stock - diluted (in dollars per share) | $ 0.16 | $ 0.22 | $ 0.64 | $ 0.49 |
Equity - Antidilutive (Details)
Equity - Antidilutive (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Potentially dilutive shares | ||||
Excluded from EPS calculation (in shares) | 15,454,624 | 15,028,244 | 15,279,133 | 14,990,367 |
Class B Common Stock | ||||
Potentially dilutive shares | ||||
Excluded from EPS calculation (in shares) | 13,671,971 | 13,671,971 | 13,671,971 | 13,731,975 |
Restricted stock awards | ||||
Potentially dilutive shares | ||||
Excluded from EPS calculation (in shares) | 1,505,675 | 1,349,260 | 1,466,069 | 1,251,329 |
Performance-based restricted stock awards | ||||
Potentially dilutive shares | ||||
Excluded from EPS calculation (in shares) | 270,373 | 134,488 | ||
Employee Stock Option | ||||
Potentially dilutive shares | ||||
Excluded from EPS calculation (in shares) | 6,605 | 7,013 | 6,605 | 7,063 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Jan. 31, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Jun. 27, 2023 | |
Income tax expense | $ 1,305 | $ 2,332 | $ 6,450 | $ 5,889 | ||
Effective tax rate | 14.60% | 16.80% | 16.90% | 18.70% | ||
Distributions paid to unit holders | $ 4,993 | $ 4,327 | ||||
Solaris LLC | ||||||
Distributions paid to unit holders | $ 400 | $ 4,900 | $ 4,900 | $ 14,900 | $ 14,700 | |
Solaris LLC | Related Party | ||||||
Distributions paid to unit holders | 400 | |||||
Tax Receivable Agreement | ||||||
Payments pursuant to tax receivable agreement | 1,100 | |||||
Distributions paid to unit holders | 1,100 | |||||
Benefit of remaining cash savings (as a percent) | 85% | |||||
Tax Receivable Agreement | SOFR | ||||||
Interest rate | 0.71513% | |||||
Tax Receivable Agreement | Related Party | ||||||
Payments pursuant to tax receivable agreement | 1,100 | |||||
Distributions paid to unit holders | $ 1,100 | |||||
Total notes payable | $ 71,500 | $ 71,500 |
Concentrations (Details)
Concentrations (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Revenue | Customer | One Customer | |||||
Concentrations | |||||
Concentration risk (as a percent) | 13% | 23% | 12% | 21% | |
Revenue | Customer | Two Customers | |||||
Concentrations | |||||
Concentration risk (as a percent) | 12% | 12% | |||
Revenue | Customer | Three Customers | |||||
Concentrations | |||||
Concentration risk (as a percent) | 11% | ||||
Accounts receivable | Customer | One Customer | |||||
Concentrations | |||||
Concentration risk (as a percent) | 16% | 22% | |||
Accounts receivable | Customer | Two Customers | |||||
Concentrations | |||||
Concentration risk (as a percent) | 14% | ||||
Purchases | Supplier | One Supplier | |||||
Concentrations | |||||
Concentration risk (as a percent) | 11% | 10% | |||
Accounts payables | Supplier | One Supplier | |||||
Concentrations | |||||
Concentration risk (as a percent) | 16% | 13% | |||
Accounts payables | Supplier | Two Suppliers | |||||
Concentrations | |||||
Concentration risk (as a percent) | 11% |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Sep. 30, 2023 USD ($) |
Purchase obligations payable within the next twelve months | $ 6.2 |
Accrued tax expense | |
Other commitments | $ 3.1 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Jan. 31, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Related Party Transactions | ||||||
Other current liabilities | $ 822 | $ 822 | $ 790 | |||
Revenue | 69,676 | $ 92,325 | 229,600 | $ 235,951 | ||
Distributions paid to unit holders | 4,993 | 4,327 | ||||
Tax Receivable Agreement | ||||||
Related Party Transactions | ||||||
Payments pursuant to tax receivable agreement | $ 1,100 | |||||
Distributions paid to unit holders | 1,100 | |||||
Related Party | ||||||
Related Party Transactions | ||||||
Revenue | 5,249 | 2,949 | 17,420 | 13,609 | ||
Related Party | William A. Zartler | ||||||
Related Party Transactions | ||||||
Payment made to related party | 300 | 200 | 800 | 700 | ||
Other current liabilities | 100 | 100 | 100 | |||
Related Party | William A. Zartler | Prepaid operating expenses and other current assets | ||||||
Related Party Transactions | ||||||
Due from related party | 100 | 100 | 100 | |||
Related Party | Solaris Energy Management, LLC | ||||||
Related Party Transactions | ||||||
Other commitments | 3,700 | 3,700 | ||||
Related Party | THRC Affiliates | ||||||
Related Party Transactions | ||||||
Due from related party | 7,100 | 7,100 | 4,900 | |||
Other current liabilities | 1,500 | 1,500 | $ 300 | |||
Revenue | 5,200 | 2,900 | 17,400 | 13,600 | ||
Related party costs | 300 | 1,400 | 1,900 | 3,100 | ||
Related Party | THRC Affiliates - Services | ||||||
Related Party Transactions | ||||||
Revenue | 1,400 | |||||
Other commitments | 4,000 | 4,000 | ||||
Related Party | Tax Receivable Agreement | ||||||
Related Party Transactions | ||||||
Payments pursuant to tax receivable agreement | 1,100 | |||||
Distributions paid to unit holders | 1,100 | |||||
Solaris LLC | ||||||
Related Party Transactions | ||||||
Distributions paid to unit holders | 400 | $ 4,900 | $ 4,900 | $ 14,900 | $ 14,700 | |
Solaris LLC | Related Party | ||||||
Related Party Transactions | ||||||
Distributions paid to unit holders | $ 400 | |||||
THRC | Solaris Oilfield Infrastructure | ||||||
Related Party Transactions | ||||||
Noncontrolling interest (as a percent) | 7.50% | 7.50% | ||||
THRC | Solaris Oilfield Infrastructure | Class A Common Stock | ||||||
Related Party Transactions | ||||||
Noncontrolling interest (as a percent) | 11.10% | 11.10% |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) | $ 4,934 | $ 7,406 | $ 20,035 | $ 16,361 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |