Solaris Energy Infrastructure (SEI) 10-Q 26 Apr 24 2024 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2024	Apr. 15, 2024
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2024
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	true
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	2024
Document Fiscal Period Focus	Q1
Amendment Flag	false
Class A Common Stock
Document and Entity Information
Entity Common Stock, Shares Outstanding		30,350,534
Class B Common Stock
Document and Entity Information
Entity Common Stock, Shares Outstanding		13,671,971

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents	$ 3,424	$ 5,833
Prepaid expenses and other current assets	3,405	4,342
Inventories	6,924	6,672
Assets held for sale		3,000
Total current assets	62,885	67,141
Property, plant and equipment, net	320,885	325,121
Non-current inventories	1,566	1,593
Non-current receivables, net of allowances of $862 and $862, respectively	1,663	1,663
Operating lease right-of-use assets	10,394	10,721
Goodwill	13,004	13,004
Intangible assets, net	521	702
Deferred tax assets	45,861	48,010
Other assets	291	342
Total assets	457,070	468,297
Current liabilities:
Accounts payable	12,266	12,654
Accrued liabilities	16,489	20,292
Current portion of payables related to Tax Receivable Agreement	2,684
Current portion of operating lease liabilities	1,381	1,385
Current portion of finance lease liabilities	2,495	2,462
Other current liabilities		408
Total current liabilities	35,315	37,201
Operating lease liabilities, net of current	11,251	11,541
Credit agreement	30,000	30,000
Finance lease liabilities, net of current	1,766	2,401
Payables related to Tax Receivable Agreement	68,846	71,530
Other long-term liabilities	44	44
Total liabilities	147,222	152,717
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	182,723	188,379
Retained earnings	17,125	17,314
Total stockholders' equity attributable to Solaris Oilfield Infrastructure, Inc.	200,131	205,983
Non-controlling interest	109,717	109,597
Total stockholders' equity	309,848	315,580
Total liabilities and stockholders' equity	457,070	468,297
Nonrelated Party
Current assets:
Accounts receivable	46,411	44,916
Related Party
Current assets:
Accounts receivable	2,721	2,378
Class A Common Stock
Stockholders' equity:
Common Stock	283	290
Class B Common Stock
Stockholders' equity:
Common Stock

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Allowance for credit losses, current	$ 404	$ 104
Allowance for credit losses, noncurrent	$ 862	$ 862
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	28,330	28,967
Common stock, shares outstanding	28,330	28,967
Class B Common Stock
Common stock, par value (in dollars per share)	$ 0	$ 0
Common stock, shares authorized	180,000	180,000
Common stock, shares issued	13,674	13,674
Common stock, shares outstanding	13,674	13,674

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Revenue:
Revenue	$ 67,890	$ 82,722
Operating costs and expenses:
Cost of services (exclusive of depreciation and amortization)	39,887	53,223
Depreciation and amortization	9,934	8,417
Selling, general and administrative	7,990	6,538
Other operating (income) expense, net	123	(338)
Total operating costs and expenses	57,934	67,840
Operating income	9,956	14,882
Interest expense, net	(799)	(459)
Income before income tax expense	9,157	14,423
Provision for income taxes	(1,857)	(2,486)
Net income	7,300	11,937
Less: net income related to non-controlling interests	(2,983)	(4,368)
Net income attributable to Solaris Oilfield Infrastructure, Inc.	4,317	7,569
Less: income attributable to participating securities	(277)	(350)
Net income attributable to common stockholders	4,040	7,219
Nonrelated Party
Revenue:
Revenue	64,635	77,828
Related Party
Revenue:
Revenue	$ 3,255	$ 4,894
Class A Common Stock
Operating costs and expenses:
Earnings per share of Class A common stock - basic (in dollars per share)	$ 0.14	$ 0.23
Earnings per share of Class A common stock - diluted (in dollars per share)	$ 0.14	$ 0.23
Basic weighted-average shares of Class A common stock outstanding (in shares)	28,586,853	31,214,271
Diluted weighted-average shares of Class A common stock outstanding (in shares)	28,586,853	31,214,271

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, 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 repurchase and retirements	$ (17)		(10,543)	(3,295)	(572)	(14,427)
Share 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 vesting of restricted stock	$ (1)		(536)	(384)	(415)	(1,336)
Cancelled shares withheld for taxes from vesting of restricted stock (in shares)	(148)
Distributions to non-controlling interest unitholders					(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, 2023	$ 290		188,379	17,314	109,597	315,580
Balance at beginning of period (in shares) at Dec. 31, 2023	28,967	13,674
Changes in Stockholders' Equity
Share repurchase and retirements	$ (11)		(7,031)	(858)	(233)	(8,133)
Share repurchases and retirements (in shares)	(1,108)
Net effect of deferred tax asset and payables related to the vesting of restricted stock			(422)			(422)
Stock-based compensation			1,581		770	2,351
Vesting of restricted stock	$ 6		1,731		(1,737)
Vesting of restricted stock (in shares)	653
Cancelled shares withheld for taxes from vesting of restricted stock	$ (2)		(1,515)		(22)	(1,539)
Cancelled shares withheld for taxes from vesting of restricted stock (in shares)	(182)
Distributions to non-controlling interest unitholders					(1,641)	(1,641)
Dividends paid (Class A common stock)				(3,648)		(3,648)
Net income				4,317	2,983	7,300
Balance at end of period at Mar. 31, 2024	$ 283		$ 182,723	$ 17,125	$ 109,717	$ 309,848
Balance at end of period (in shares) at Mar. 31, 2024	28,330	13,674

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
Cash dividends paid (in dollars per share)	$ 0.12	$ 0.11

CONDENSED CONSOLIDATED STATEM_4

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Cash flows from operating activities:
Net income	$ 7,300	$ 11,937
Adjustment to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	9,934	8,417
(Gain) loss on disposal of assets	12	(22)
Stock-based compensation	2,217	1,980
Amortization of debt issuance costs	43	31
Allowance for credit losses	300
Inventory write-off	223
Deferred income tax expense	1,727	2,329
Other	31	10
Changes in operating assets and liabilities:
Accounts receivable	(1,795)	(3,581)
Accounts receivable - related party	(343)	1,086
Prepaid expenses and other current assets	951	905
Inventories	(448)	(4,071)
Accounts payable	(131)	2,042
Accrued liabilities	(3,146)	(3,122)
Payments pursuant to tax receivable agreement		(1,092)
Net cash provided by operating activities	16,875	16,849
Cash flows from investing activities:
Investment in property, plant and equipment	(3,358)	(18,949)
Proceeds from disposal of property, plant and equipment	10	123
Net cash used in investing activities	(3,348)	(18,826)
Cash flows from financing activities:
Share repurchases and retirements	(8,092)	(14,427)
Distributions to non-controlling interest unitholders	(1,641)	(1,985)
Dividend paid to Class A common stock shareholders	(3,648)	(3,656)
Payments under finance leases	(602)	(738)
Payments under insurance premium financing	(414)	(541)
Cancelled shares withheld for taxes from vesting of restricted stock	(1,539)	(1,336)
Borrowings under the credit agreement	4,000	18,000
Repayment of credit agreement	(4,000)
Net cash used in financing activities	(15,936)	(4,683)
Net decrease in cash and cash equivalents	(2,409)	(6,660)
Cash and cash equivalents at beginning of period	5,833	8,835
Cash and cash equivalents at end of period	3,424	2,175
Investing:
Capitalized depreciation in property, plant and equipment	120	129
Capitalized stock based compensation	134	174
Property and equipment additions incurred but not paid at period-end	331	5,015
Reclassification of assets held for sale to property, plant, and equipment	3,000
Additions to fixed assets through finance leases		933
Cash paid for:
Interest	758	335
Income taxes	$ 76	$ 1

Organization and Background of

Organization and Background of Business	3 Months Ended
	Mar. 31, 2024
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 and mobilization 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. We service most active oil and natural gas basins in the United States. ​

Summary of Significant Accounti

Summary of Significant Accounting Policies	3 Months Ended
	Mar. 31, 2024
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 months ended March 31, 2024 and 2023 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, 2023 and notes thereto. All material intercompany transactions and balances have been eliminated upon consolidation. Allowance for Credit Losses The following activity related to our allowance for credit losses on customer receivables for the quarter ended March 31, 2024 reflects the estimated impact of the current economic environment on our receivable balance: ​ ​ ​ ​ Balance, December 31, 2023 $ 1.0 Provision for credit losses, net of recoveries 0.3 Write-offs — Balance, March 31, 2024 $ 1.3 ​ 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. 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 normally on thirty- to sixty-day payment terms. Our contracts may contain bundled pricing covering multiple performance obligations, such as contracts containing a combination of systems, mobilization services and / or sand transportation coordination services. In these instances, 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. 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. Disaggregation of Revenue The following table summarizes revenues from our contracts disaggregated by revenue generating activity contained therein for the three months ended March 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ ​ March 31, ​ ​ ​ 2024 ​ 2023 ​ Wellsite services ​ $ 67.7 ​ $ 82.5 ​ Transloading and Other ​ ​ 0.2 ​ ​ 0.2 ​ Total revenue ​ $ 67.9 ​ $ 82.7 ​ ​ ​ 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 assets or liabilities; and ● Level 3 – Unobservable inputs that reflect the Company’s assumptions that the market participants would use in pricing assets or liabilities based on the best information available. The carrying amounts reported in the balance sheet for cash and cash equivalents, accounts receivable, prepaids and other current assets, accounts payable and accruals, and other current liabilities approximate their fair value due to their short-term nature. The carrying amounts of the Company’s borrowings under the credit agreement approximate fair value based on their nature, terms, and variable interest rates.

Property, Plant and Equipment

Property, Plant and Equipment	3 Months Ended
	Mar. 31, 2024
Property, Plant and Equipment
Property, Plant and Equipment	Property, plant and equipment consists of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, December 31, ​ 2024 2023 Systems and related equipment ​ $ 440.5 ​ $ 434.4 Systems in process ​ ​ 20.6 ​ 21.1 Vehicles ​ 13.5 ​ 13.5 Machinery and equipment ​ 5.8 ​ 5.8 Buildings ​ 4.9 ​ 4.9 Computer hardware and software ​ 3.9 ​ 3.9 Land ​ 0.6 ​ 0.6 Furniture and fixtures ​ ​ 1.3 ​ 1.3 Property, plant and equipment, gross ​ $ 491.1 ​ $ 485.5 Less: accumulated depreciation ​ (170.2) ​ (160.4) Property, plant and equipment, net ​ $ 320.9 ​ $ 325.1 ​ During the three months ended March 31, 2024 and 2023, we recorded depreciation expense of $9.8 million and $8.2 million, respectively. ​ As of March 31, 2024, we have reclassified certain systems and related equipment amounting to $3.0 million that were previously classified as assets held for sale back to property, plant and equipment due to a change in plan of sale. ​

Accrued Liabilities

Accrued Liabilities	3 Months Ended
	Mar. 31, 2024
Accrued Liabilities
Accrued Liabilities	4. Accrued Liabilities Accrued liabilities were comprised of the following at March 31, 2024 and December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, December 31, ​ 2024 2023 Property, plant and equipment ​ $ 0.1 ​ $ 0.8 Employee related expenses ​ ​ 3.6 ​ ​ 7.6 Selling, general and administrative ​ ​ 0.9 ​ ​ 1.3 Cost of services ​ ​ 4.7 ​ ​ 3.5 Excise, franchise and sales taxes ​ 1.6 ​ 1.5 Ad valorem taxes ​ 5.6 ​ 5.6 Accrued liabilities ​ $ 16.5 ​ $ 20.3 ​

Senior Secured Credit Facility

Senior Secured Credit Facility	3 Months Ended
	Mar. 31, 2024
Senior Secured Credit Facility
Senior Secured Credit Facility	5. Senior Secured Credit Facility We had $30.0 million borrowings outstanding under our senior secured credit facility as of March 31, 2024 and December 31, 2023, presented as “Credit agreement” in our condensed consolidated balance sheets. As of March 31, 2024, we were in compliance with all covenants under our senior secured credit facility and have the ability to draw up to an additional $37.5 million.

Equity

Equity	3 Months Ended
	Mar. 31, 2024
Equity
Equity	Dividends Solaris LLC paid dividend distributions totaling $5.3 million and $5.2 million to all Solaris LLC unitholders in the three months ended March 31, 2024 and 2023, respectively, of which $3.6 million and $3.7 million 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 million of the Company’s Class A common stock until the plan terminates pursuant to its provisions. During the three months ended March 31, 2024, Solaris Inc. purchased and retired 1,108,349 shares of the Company’s Class A common stock at an aggregate cost of $8.1 million, or $7.30 per share, under the share repurchase program. As of March 31, 2024, we had purchased and retired 4,272,127 shares of Class A common stock for $34.6 million, or $8.09 per share, resulting in $15.4 million remaining available for future repurchases authorized under the share repurchase plan. The 1% U.S. federal excise tax on certain repurchases of stock by publicly traded U.S. corporations enacted as part of the Inflation Reduction Act of 2022 applies to our share repurchase program. Earnings Per Share Basic earnings 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 earnings per share is computed giving effect to all potentially dilutive shares. The following table sets forth the calculation of earnings per share for the three months ended March 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, Basic earnings per share: ​ 2024 ​ 2023 ​ ​ ​ ​ ​ ​ ​ Numerator (in millions) ​ ​ ​ ​ ​ ​ Net income attributable to Solaris Oilfield Infrastructure, Inc. ​ $ 4.3 ​ $ 7.6 Less: income attributable to participating securities (1) ​ ​ (0.3) ​ ​ (0.4) Net income attributable to common stockholders ​ $ 4.0 ​ $ 7.2 ​ ​ ​ ​ ​ ​ ​ Denominator ​ ​ ​ ​ ​ ​ Weighted average number of unrestricted outstanding common shares used to calculate basic earnings per share ​ ​ 28,586,853 ​ ​ 31,214,271 Diluted weighted-average shares of Class A common stock outstanding used to calculate diluted earnings per share ​ ​ 28,586,853 ​ ​ 31,214,271 ​ ​ ​ ​ ​ ​ ​ Earnings per share of Class A common stock - basic ​ $ 0.14 ​ $ 0.23 Earnings per share of Class A common stock - diluted ​ $ 0.14 ​ $ 0.23 ​ (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 earnings per share because the effect of including such potentially dilutive shares would have been antidilutive upon conversion: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2024 ​ 2023 Class B common stock ​ ​ 13,671,971 ​ ​ 13,671,971 Restricted stock awards ​ ​ 1,654,925 ​ ​ 1,374,760 Performance-based restricted stock awards ​ ​ 209,890 ​ ​ 176,898 Stock options ​ ​ 6,605 ​ ​ 5,440 Total ​ ​ 15,543,391 ​ ​ 15,229,069 ​

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2024
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	3 Months Ended
	Mar. 31, 2024
Concentrations
Concentrations	8. Concentrations For the three months ended March 31, 2024, three customers accounted for 14%, 12% and 11% of the Company’s revenues. For the three months ended March 31, 2023, three customers accounted for 13%, 12% and 11% of the Company’s revenues. As of March 31, 2024, two customers accounted for 12% and 11% of the Company’s accounts receivable. As of December 31, 2023, two customers accounted for 12% and 10% of the Company’s accounts receivable. For the three months ended March 31, 2024, one supplier accounted for 10% of the Company’s total purchases. For the three months ended March 31, 2023, no supplier accounted for more than 10% of the Company’s total purchases. As of March 31, 2024, three suppliers accounted for 19%, 13% and 11% of the Company’s accounts payable. As of December 31, 2023, two suppliers accounted for 17% and 12% of the Company’s accounts payable.

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Mar. 31, 2024
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 other than the following. On February 28, 2024, the Company was served with a lawsuit by Masaba Inc. in the Wyoming District Court related to alleged intellectual property infringement. The complaint seeks, among other relief, unspecified compensatory damages, rescission, pre-judgment and post-judgment interest, costs and expenses. The Company believes these claims are without merit and will vigorously defend against them. At this time, we are unable to predict the ultimate outcome of this case or estimate the range of possible loss, if any. 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 March 31, 2024, we had purchase obligations of approximately $2.8 million payable within the next twelve months. 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. The total future guarantee under the guarantee of lease agreement with Solaris Energy Management, LLC is $2.7 million as of March 31, 2024. Refer to Note 10. “Related Party Transactions” for additional information regarding related party transactions recognized.

Related Party Transactions

Related Party Transactions	3 Months Ended
	Mar. 31, 2024
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 March 31, 2024 and 2023, Solaris LLC paid $0.1 million and $0.5 million, respectively, for these services, included in selling, general and administrative costs in the condensed consolidated statement of operations. As of March 31, 2024 and December 31, 2023, the Company included $0.1 million and $0.1 million, respectively, in prepaid expenses and other current assets on the condensed consolidated balance sheets. As of March 31, 2024, THRC Holdings, LP, an entity managed by THRC Management, LLC (collectively “THRC”), held shares representing a 11.2% ownership of the Company’s Class A common stock outstanding and 7.6% 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 March 31, 2024 and 2023, the Company recognized revenues related to our service offering provided to the THRC Affiliates of 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 million in payments throughout a term ending in 2024, contingent upon the ability of these affiliates to meet minimum Services revenue thresholds. As of March 31, 2024 and December 31, 2023, there was no accounts payable to THRC Affiliates related to these services.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2024
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 months ended March 31, 2024 and 2023 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, 2023 and notes thereto. All material intercompany transactions and balances have been eliminated upon consolidation.
Allowance for Credit Losses	The following activity related to our allowance for credit losses on customer receivables for the quarter ended March 31, 2024 reflects the estimated impact of the current economic environment on our receivable balance: ​ ​ ​ ​ Balance, December 31, 2023 $ 1.0 Provision for credit losses, net of recoveries 0.3 Write-offs — Balance, March 31, 2024 $ 1.3
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. 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 normally on thirty- to sixty-day payment terms. Our contracts may contain bundled pricing covering multiple performance obligations, such as contracts containing a combination of systems, mobilization services and / or sand transportation coordination services. In these instances, 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. 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. Disaggregation of Revenue The following table summarizes revenues from our contracts disaggregated by revenue generating activity contained therein for the three months ended March 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ ​ March 31, ​ ​ ​ 2024 ​ 2023 ​ Wellsite services ​ $ 67.7 ​ $ 82.5 ​ Transloading and Other ​ ​ 0.2 ​ ​ 0.2 ​ Total revenue ​ $ 67.9 ​ $ 82.7 ​
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 assets or liabilities; and ● Level 3 – Unobservable inputs that reflect the Company’s assumptions that the market participants would use in pricing assets or liabilities based on the best information available. The carrying amounts reported in the balance sheet for cash and cash equivalents, accounts receivable, prepaids and other current assets, accounts payable and accruals, and other current liabilities approximate their fair value due to their short-term nature. The carrying amounts of the Company’s borrowings under the credit agreement approximate fair value based on their nature, terms, and variable interest rates.

Summary of Significant Accoun_3

Summary of Significant Accounting Policies (Tables)	3 Months Ended
	Mar. 31, 2024
Summary of Significant Accounting Policies
Schedule of allowance for credit losses	​ ​ ​ ​ Balance, December 31, 2023 $ 1.0 Provision for credit losses, net of recoveries 0.3 Write-offs — Balance, March 31, 2024 $ 1.3
Schedule of disaggregated revenues from contracts	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended ​ ​ ​ March 31, ​ ​ ​ 2024 ​ 2023 ​ Wellsite services ​ $ 67.7 ​ $ 82.5 ​ Transloading and Other ​ ​ 0.2 ​ ​ 0.2 ​ Total revenue ​ $ 67.9 ​ $ 82.7 ​

Property, Plant and Equipment (

Property, Plant and Equipment (Tables)	3 Months Ended
	Mar. 31, 2024
Property, Plant and Equipment
Schedule of property plant and equipment	​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, December 31, ​ 2024 2023 Systems and related equipment ​ $ 440.5 ​ $ 434.4 Systems in process ​ ​ 20.6 ​ 21.1 Vehicles ​ 13.5 ​ 13.5 Machinery and equipment ​ 5.8 ​ 5.8 Buildings ​ 4.9 ​ 4.9 Computer hardware and software ​ 3.9 ​ 3.9 Land ​ 0.6 ​ 0.6 Furniture and fixtures ​ ​ 1.3 ​ 1.3 Property, plant and equipment, gross ​ $ 491.1 ​ $ 485.5 Less: accumulated depreciation ​ (170.2) ​ (160.4) Property, plant and equipment, net ​ $ 320.9 ​ $ 325.1

Accrued Liabilities (Tables)

Accrued Liabilities (Tables)	3 Months Ended
	Mar. 31, 2024
Accrued Liabilities
Schedule of accrued liabilities	​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, December 31, ​ 2024 2023 Property, plant and equipment ​ $ 0.1 ​ $ 0.8 Employee related expenses ​ ​ 3.6 ​ ​ 7.6 Selling, general and administrative ​ ​ 0.9 ​ ​ 1.3 Cost of services ​ ​ 4.7 ​ ​ 3.5 Excise, franchise and sales taxes ​ 1.6 ​ 1.5 Ad valorem taxes ​ 5.6 ​ 5.6 Accrued liabilities ​ $ 16.5 ​ $ 20.3 ​

Equity (Tables)

Equity (Tables)	3 Months Ended
	Mar. 31, 2024
Equity
Schedule of earnings per share calculation	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, Basic earnings per share: ​ 2024 ​ 2023 ​ ​ ​ ​ ​ ​ ​ Numerator (in millions) ​ ​ ​ ​ ​ ​ Net income attributable to Solaris Oilfield Infrastructure, Inc. ​ $ 4.3 ​ $ 7.6 Less: income attributable to participating securities (1) ​ ​ (0.3) ​ ​ (0.4) Net income attributable to common stockholders ​ $ 4.0 ​ $ 7.2 ​ ​ ​ ​ ​ ​ ​ Denominator ​ ​ ​ ​ ​ ​ Weighted average number of unrestricted outstanding common shares used to calculate basic earnings per share ​ ​ 28,586,853 ​ ​ 31,214,271 Diluted weighted-average shares of Class A common stock outstanding used to calculate diluted earnings per share ​ ​ 28,586,853 ​ ​ 31,214,271 ​ ​ ​ ​ ​ ​ ​ Earnings per share of Class A common stock - basic ​ $ 0.14 ​ $ 0.23 Earnings per share of Class A common stock - diluted ​ $ 0.14 ​ $ 0.23 ​ (1) The Company’s restricted shares of common stock are participating securities.
Schedule of antidilutive shares	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2024 ​ 2023 Class B common stock ​ ​ 13,671,971 ​ ​ 13,671,971 Restricted stock awards ​ ​ 1,654,925 ​ ​ 1,374,760 Performance-based restricted stock awards ​ ​ 209,890 ​ ​ 176,898 Stock options ​ ​ 6,605 ​ ​ 5,440 Total ​ ​ 15,543,391 ​ ​ 15,229,069 ​

Summary of Significant Accoun_4

Summary of Significant Accounting Policies - Credit Losses (Details) $ in Millions	3 Months Ended
	Mar. 31, 2024 USD ($)
Summary of Significant Accounting Policies
Allowance for credit losses, beginning	$ 1
Provision for credit losses, net of recoveries	0.3
Allowance for credit losses, ending	$ 1.3

Summary of Significant Accoun_5

Summary of Significant Accounting Policies - Revenues Disaggregated (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Disaggregation of Revenue [Line Items]
Revenue	$ 67,890	$ 82,722
Wellsite services
Disaggregation of Revenue [Line Items]
Revenue	67,700	82,500
Transloading and Other
Disaggregation of Revenue [Line Items]
Revenue	$ 200	$ 200

Property, Plant and Equipment_2

Property, Plant and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Property, Plant and Equipment
Property, plant and equipment, gross	$ 491,100		$ 485,500
Less: accumulated depreciation	(170,200)		(160,400)
Property, plant and equipment, net	320,885		325,121
Depreciation expense	9,800	$ 8,200
Reclassification of assets held for sale to property, plant, and equipment	3,000
Systems and related equipment
Property, Plant and Equipment
Property, plant and equipment, gross	440,500		434,400
Systems in process
Property, Plant and Equipment
Property, plant and equipment, gross	20,600		21,100
Vehicles
Property, Plant and Equipment
Property, plant and equipment, gross	13,500		13,500
Machinery and equipment
Property, Plant and Equipment
Property, plant and equipment, gross	5,800		5,800
Buildings
Property, Plant and Equipment
Property, plant and equipment, gross	4,900		4,900
Computer hardware and software
Property, Plant and Equipment
Property, plant and equipment, gross	3,900		3,900
Land
Property, Plant and Equipment
Property, plant and equipment, gross	600		600
Furniture and fixtures
Property, Plant and Equipment
Property, plant and equipment, gross	$ 1,300		$ 1,300

Accrued Liabilities (Details)

Accrued Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Accrued Liabilities
Property, plant and equipment	$ 100	$ 800
Employee related expenses	3,600	7,600
Selling, general and administrative	900	1,300
Cost of services	4,700	3,500
Excise, franchise and sales taxes	1,600	1,500
Ad valorem taxes	5,600	5,600
Accrued liabilities	$ 16,489	$ 20,292

Senior Secured Credit Facility

Senior Secured Credit Facility (Details) - 2023 Credit Agreement - USD ($) $ in Millions	Mar. 31, 2024	Dec. 31, 2023
Senior Secured Credit Facility
Outstanding credit facility	$ 30	$ 30
Remaining borrowing capacity	$ 37.5

Equity - Dividends (Details)

Equity - Dividends (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Equity
Distributions paid to unit holders	$ 1,641	$ 1,985
Dividend paid to common stock	3,648	3,656
Solaris LLC
Equity
Distributions paid to unit holders	$ 5,300	$ 5,200

Equity - Share Repurchase (Deta

Equity - Share Repurchase (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended	13 Months Ended
	Mar. 31, 2024	Mar. 31, 2024	Mar. 01, 2023
Equity
Remaining authorized for future repurchases	$ 15.4	$ 15.4
Stock repurchase excise tax, percentage	1%	1%
Class A Common Stock
Equity
Repurchased and retired (in shares)	1,108,349	4,272,127
Repurchased and retired	$ 8.1	$ 34.6
Average price (in dollars per share)	$ 7.30	$ 8.09
Class A Common Stock | Maximum
Equity
Share Repurchase, Authorized			$ 50

Equity - EPS (Details)

Equity - EPS (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Numerator
Net income attributable to Solaris Oilfield Infrastructure Inc.	$ 4,317	$ 7,569
Less: income attributable to participating securities	(277)	(350)
Net income attributable to common stockholders	$ 4,040	$ 7,219
Class A Common Stock
Denominator
Weighted average number of unrestricted outstanding common shares used to calculate basic earnings per share	28,586,853	31,214,271
Diluted weighted-average shares of Class A common stock outstanding used to calculate diluted earnings per share	28,586,853	31,214,271
Earnings per share of Class A common stock - basic (in dollars per share)	$ 0.14	$ 0.23
Earnings per share of Class A common stock - diluted (in dollars per share)	$ 0.14	$ 0.23

Equity - Antidilutive (Details)

Equity - Antidilutive (Details) - shares	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Potentially dilutive shares
Excluded from EPS calculation (in shares)	15,543,391	15,229,069
Class B Common Stock
Potentially dilutive shares
Excluded from EPS calculation (in shares)	13,671,971	13,671,971
Restricted stock awards
Potentially dilutive shares
Excluded from EPS calculation (in shares)	1,654,925	1,374,760
Performance-based restricted stock awards
Potentially dilutive shares
Excluded from EPS calculation (in shares)	209,890	176,898
Employee Stock Option
Potentially dilutive shares
Excluded from EPS calculation (in shares)	6,605	5,440

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Income tax expense	$ 1,857	$ 2,486
Effective tax rate	20.30%	17.20%
Distributions paid to unit holders	$ 1,641	$ 1,985
Solaris LLC
Distributions paid to unit holders	$ 5,300	$ 5,200
Tax Receivable Agreement
Benefit of remaining cash savings (as a percent)	85%
Tax Receivable Agreement | Related Party
Total notes payable	$ 71,500

Concentrations (Details)

Concentrations (Details)	3 Months Ended		12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Revenue | Customer | One Customer
Concentrations
Concentration risk (as a percent)	14%	13%
Revenue | Customer | Two Customers
Concentrations
Concentration risk (as a percent)	12%	12%
Revenue | Customer | Three Customers
Concentrations
Concentration risk (as a percent)	11%	11%
Accounts receivable | Customer | One Customer
Concentrations
Concentration risk (as a percent)	12%		12%
Accounts receivable | Customer | Two Customers
Concentrations
Concentration risk (as a percent)	11%		10%
Purchases | Supplier | One Supplier
Concentrations
Concentration risk (as a percent)	10%
Accounts payables | Supplier | One Supplier
Concentrations
Concentration risk (as a percent)	19%		17%
Accounts payables | Supplier | Two Suppliers
Concentrations
Concentration risk (as a percent)	13%		12%
Accounts payables | Supplier | Supplier Three
Concentrations
Concentration risk (as a percent)	11%

Commitments and Contingencies (

Commitments and Contingencies (Details) $ in Millions	Mar. 31, 2024 USD ($)
Purchase obligations payable within the next twelve months	$ 2.8
Related Party | Solaris Energy Management, LLC
Other commitments	2.7
Accrued tax expense
Other commitments	$ 3.1

Related Party Transactions (Det

Related Party Transactions (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Related Party Transactions
Other current liabilities			$ 408
Revenue	$ 67,890	$ 82,722
Distributions paid to unit holders	1,641	1,985
Related Party
Related Party Transactions
Revenue	3,255	4,894
Related Party | William A. Zartler
Related Party Transactions
Payment made to related party	100	500
Related Party | William A. Zartler | Prepaid operating expenses and other current assets
Related Party Transactions
Due from related party	100		100
Related Party | Solaris Energy Management, LLC
Related Party Transactions
Other commitments	2,700
Related Party | THRC Affiliates
Related Party Transactions
Due from related party	2,700		2,400
Other current liabilities	0		$ 0
Revenue	3,300	4,900
Related party costs	0	1,100
Related Party | THRC Affiliates - Services
Related Party Transactions
Other current liabilities	0
Other commitments	4,000
Solaris LLC
Related Party Transactions
Distributions paid to unit holders	$ 5,300	$ 5,200
THRC | Solaris Oilfield Infrastructure
Related Party Transactions
Noncontrolling interest (as a percent)	7.60%
THRC | Solaris Oilfield Infrastructure | Class A Common Stock
Related Party Transactions
Noncontrolling interest (as a percent)	11.20%

Pay vs Performance Disclosure

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ 4,317	$ 7,569

Insider Trading Arrangements

Insider Trading Arrangements	3 Months Ended
	Mar. 31, 2024
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