SOI - Earnings call transcript Q1 2019 | Solaris Energy Infrastructure Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day and welcome to the Solaris Oilfield Infrastructure First Quarter 2019 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Yvonne Fletcher, Senior Vice President of Finance and Investor Relations. Please go ahead.

Yvonne Fletcher

to first welcome conference XXXX and call. morning the quarter Solaris earnings Good by CEO, Chairman our joined our I'm today and CFO, Ramachandran. President Kyle Bill and and Zartler;

substitute risks. standard recent to Before results I'd Please the and future yesterday contain statements be non-GAAP believe isolation comparable this statements and a make considered nature filings now remind refer may a our like reflect that cautionary and number will of remarks and call we Such issued you which of we in we as other Zartler. that, for some regarding measures known like to useful additional discussion be I'll to of The with out release turn press in outline financial information of call I Securities along are earnings today. our the accordance earnings begin, Bill presentation unknown with can that that include With financial in our our Chairman and those public our evaluating forward-looking the regarding performance. today's measures not or our in of forward-looking with release over GAAP of point Reconciliations release. Commission should prepared will would to to conference CEO, Exchange risks. also comments the results GAAP. available

Bill Zartler

everyone. Yvonne. you, Thank morning to welcome and Good

flat XXXX, quarter. Solaris $XX with from of quarter with $XX adjusted of slightly XXXX roughly the which which the During of down was last million in quarter first generated million revenue fourth was EBITDA

the in to rapid got with capital late off decline to of across industry operators as responded prices quarter a discipline. The XXXX increased oil a slower first start

capital at back recovered the our levels today, continue that continue the fourth budgets those oil in we While and quarter. to in to and the reflect activity discipline saw first customers' late quarter the $XXs prices

to December. response has recovery the noticeable we since seen and crew result, not have the As overall oil U.S. a industry flat a count relatively frac price been

thus to This got our in fully keeping in customers early line that a the For expectations. up original start of XXXX to during first flat in quarter with and returning systems ended frac the systems or systems relatively to back the as an counts which quarter quarter resulted expectations about the decline slow back X% in of our us fleets Solaris, the quarter. a utilized off bring the held XXX fourth our QX frac during average relative onto with was some of

back saw as customers first with our in existing the system new quarter our deployed the quarter recognize at However, our reflect maintaining and Today, and throughout throughout efficiency levels, activity level our is customers systems increase deployments the fourth our believe we pricing. quarter. all we the that progressed, system We while activity the reliability both a value pickup additional Solaris provides. in and

year. working count a While crystal roughly flat the to remainder the frac into not for future, remain U.S. the have we expect we do crew of the ball

we to systems additional believe market. continue can a we flat However, deploy in

efficient The work than increasing and chain opportunities drivers continue type of manufacturing and that drive continue the multi-well and consumption use facilities a to customers. hourly of particularly market. as sand fracs believe plans see shrunk efficiency pads to with driven solution with operators sand in supply three sourcing more our we've offers gains stage win continues means towards increase traction field. development chemical per focus about to mobile to has to the and and efficiency continue We operators' to chemical had regional system, To-date, per foot. This local been improvements in or loss has pounds it new with on are these mode completions multiple companies. in Switching gain with dramatically consumption our pounds most our customers on for reliable by stored new the and zipper the been transload different trials management shift inventory per hour frac Solaris to historically storage more three has and pounds railcars in challenges. customers, solve combined lateral We the systems that switch working sand and to

additional finalize during we positive We the expect been The far to more enhancements taken field early make received we trials to to add the learnings of offering. field we've systems. the some feedback to systems has the and as completion so have

seven quarter, XX we making of and the expect taking systems seven weeks. these During minor the the By fleet all end have our we we to chemical chemical made modifications account in add to investments the XX to systems quarter, available fleet. in coming anticipate to our having second into systems

feedback our from Our rates. and decision beyond on that based adoption customers will to build be

the acceptance product the reduces to organization excited and equipment trials has initial we our across to delivering from market. We remain chain. requirements the a about inventory Feedback the improves chemicals supply that be in of labor of so significantly control to blender efficiency It new this continue brings this confident broader line. new been and market positive, the

also pipeline does there. not R&D stop Our

offerings cost as look of for customers. continue efficiency, to talented and savings improve to and our that have improved engineers safety, currently offerings We in ancillary result have the developers will both as staff that for we a ways software well

pain group we that and addition, customers to thought completion with we a logistical market In operational activities. solutions have of are to in collaborating leading diverse points that address bring

relatively progress a Last Last system offering but and make we systems, provide low mobile to is equipment. to solution. to primarily new mile rental our offering our Lens well believe Solaris. have business trucking Historically, delivered Solaris technology customers Mile cost the have and with combines solutions proppant extremely offer for asked software a last bundled come We out Mile site rented which our our in for several us to continue us We reliable the

Our company's the system that into to to activity this recent the additional and last the work and in pipeline in the Mile contribute offering for sales a capital is contributed the rental new service quarter. flow. the success of accomplishment few added continue flat to has second could frac Further in have to quarter. growth over we've Last robust context customers positive lastly, continued even The months recurring resulted count slowdown our exciting in combined spending growth positive And in the count. free of during our with quarter another U.S. I'd resilience like of has cash the first highlight business

its first quarterly dividend declare what we and quarter fourth this its and during XXXX. Board to led of the paid visibility during our Our free dividend inflection cash first was of the Solaris quarter second

expect I'll to over Kyle. As call remainder generate to our free now With of for year the sacrificing without grow. the goes spending flow to we'd cash turn capital to rate that, our the continue further, ability

Kyle Ramachandran

Thanks, good Bill, and morning everyone.

quarter, approximately mentioned, million lower by $XX the was which during the of million, $XX prior higher Bill segment. flat As quarter we was adjusted with as EBITDA our first from generated of roughly revenue transloading and activity contribution offset

revenue relatively a measure of revenue days a that quarter. QX management fully average to utilized of during systems in our which levels earned used activity. the the and as our activity of is line was We systems into which systems, proppant equated going quarter decrease our with expectations X% combined previously rental number days, XXX from business mobile XXX Our a

from Going fully quarter for utilized that forward, count system count a metric one this varying will to activity we days the the I'd period-over-period system will comparative measure conservative utilized to like to is rental believe the calendar company's most present way normalize utilization. more highlight be in fully it changes next. also the as to

calendar. given are jobs quarter. in line be all operating approximately As the Solaris adjusts we basins never example, customers for XXX during white system perfectly, that worked count up an some will white The XXX space. for and utilized in that systems space fully there nearly always first the But

As continues saw deployed systems steady Bill today. in mentioned, QX we that a and throughout increase

utilized and the compared recognition approximately fourth roughly quarter we count. revenue were as of The primarily offset in segment. activity the today operating flat our at our of by deferred gross to context, revenues are For average was and fourth million back lower transloading $XX profit fully quarter, system the

restricted versus of fourth initiatives product XXXX. a was the approximately for we into personnel contract million Net $XX.X were new stock in also $X we've earnings-per-share end that quarter will added for our accrual the first payroll total million below take per XXXX. SG&A of the one-time We the impact $XX.X additional and March flat was our made income run of quarter $X decrease to quarter. grants we and SG&A at of sequentially at pro and full fourth $X.XX million approximately same to X% taxes income continue generated of $X deferred the recognized amended at Kingfisher, account expect share in headcount million, quarter. costs which was the versus in quarter level the expectations the revenue for share quarter. quarter at versus or $X.XX costs through benefits the to related net $X.XX to for forma million, as fourth and adjustments. or quarter mainly or Adjusted million per salaries which due the During quarter Go-forward, $X.XX $XX.X per were bonus our each above

the was that A Class manufacturing $XX by net Total were are all LLC presented for for of and units, that in adjusted fourth comparative other of income outstanding the significantly units shares. organizational exchange held have structures. capital not as and primarily rate for which systems. non-recurring down new approximately Class Inc. expected due pro the exchange assuming and Solaris is all proppant LLC from and shares with share quarter we Class quarter full different we full million, items the also that to of slowing Our shares presentation expenditures adjusts our of forma and assumes income net million earnings B per the By companies certain $XX believe of more outstanding B tax

added purchase systems components spent of capital systems. we the to also received seven fleet and quarter, additional majority orders proppant for complete additional prior to proppant our two required systems and chemical first the During under

to loading fleet. also AutoHopper and our non-pneumatic systems deploy We continued added to kits additional our

fleet. quarter XX chemical and to proppant XX end systems mobile expect management XXX systems second with to rental the We in the mobile

the in million, the $XX We be be range cash flows. for we to of continue year to capital which to million operating funded $XX by expect expect will expenditures

free first out the expected we As for as for turning point marked and the highlighted by importantly Bill, the played cash flow generation quarter company.

slow. Our flow over expenditures less of as course the a we continues from the by defined currently the grow as balance million. cash capital approximately of And $XX have our year free positive was to we spend which on to operations, million CapEx cash cash flow $X.X sheet expect

first the our December of the during sheet, was credit us as that balance facility million quarter we drawn the under balance zero today. leaving repaid with to a Turning all $XX of debt XX

late amended revolver size $XX X.X million increase our business with as on today leverage million to to our and in the feature which facility amendment total under revolver covenant to the our total debt amended to our million. $XX the flexibility company's also We to believe credit availability a facility as April includes increases $XX well increase us an The of better of could availability total EBITDA. credit suits allowing based We by grow. facility accordion times needs

facility. had approximately credit April $XX of $XX our cash including XXXX of liquidity under availability million we and approximately of XX, million of undrawn million As $XX

our debt will return incremental in CapEx free be our uses investments flow dividend and be can position, where earn which our of an to to plans expect we limited investment. we Given on believe will continue operating we XXXX primary cash

build the forward cash we'd We happy expect to the year the likely sheet we take questions. you in and intended look With a use that balance your updating cash that, the the unfolds. be on of of on near-term result to as be to

Operator

you. Thank

will the Johnson [Operator Malloy session. now first Martin We comes Instructions] question Rice. begin of question-and-answer Please from Our ahead. go

Martin Malloy

Good morning.

Kyle Ramachandran

Marty. morning, Good

Bill Zartler

Good morning, Marty.

Martin Malloy

about April your CapEx. free a generation. from release of you million looks here amount cash first flow It is My all like on question generated $XX cash date after fair in the

cash CapEx working was there working free and help respect maybe of like CapEx Your to us impact changes? and front moves. capital flow to loaded with the just is end the looks ramp-up and for generation how probably with capital the year you Could maybe some you expect

Kyle Ramachandran

to capital We be certainly that Sure reached We've to new cash around inflection XXXX years beginnings going quarters and really first of point quarter. last this couple over capital the free for XXXX were business a generation. the is thing, and definitely in the introducing business. from Marty. as standpoint large has the product. flow growth XXXX discussed saw that a

our systems that of pace cash base the cash to coupled saw flow significant today that operating So result We free we That of CapEx flow. April. driving expect with in in load significant We measured. that year. the slowdown are will in rental large that be in

the at quarter, but build, end in So capital working have that first did a we unwound a April. of the a of bit bit

And days balance impacted so our span CapEx. cash we've doubled in by the continued XX in effectively was also that of slowdown

million the slow And alluded get quarters. think of that bulk over it had And year. as to as of and of a through $XX deployed. We're confident a CapEx our the then do other quarter course component the we being spent in the we that pace you the end and still year. is of will But be over million So the we is the the front guidance very we systems the mentioned, We cash we to $XX thing to two those start second of generate had loaded. or from more in significant year. pickup added systems beginning of those first industry the Bill will think in

we and So as we incremental around the second cash operating flow expect the to to generate our further activity, through look guidance activity. quarter

Martin Malloy

flow statement. Okay. forward with offering. how there – income help that maybe about And could question us and the And Mile of margins look scope the and flowing you should second Last on potential kind then that's impact the my through we to solution through is

Kyle Ramachandran

do think broader This When do. look significant. definitely we I is them something offering. we've putting significant opportunities been BD of pretty The Sure. a our of at the involve opportunity, together amount asked that, scope to a is

provide for balance really lowest-cost pull We're assets customers. put haven't option this our on to We together to sheet offering. trying the

multiple the look equipment. the supply vendors. pass-through of our means for We with what ultimately, we simply We're majority it. maintain operate we're We we at So customers, revenue. provide working of providing renting equipment. ton not that like business. chain service our to across the We do But don't but a

And so a with when revenue amount mile is associated of we offering look at higher the trucking. last that significantly,

put on the sheet. And so we haven't balance that

those effectively put third-party are and help are aren't packaged together. details. with We for that in all to working pumpers groups offering managing pressure operators But a who providing solution interested we necessarily

Mile. those involved are in higher so revenue is that's going what result And to significantly on that systems in Last

can it X an same You margin. the to our have going times just at trucking of as not say order is to will generally be The think magnitude margin our revenue times much of the level rental a XX of rental to relative revenue. lower piece. The of obviously piece incremental

in contribution incremental we gross which think the system So, margins to higher show going overall, per margin actually for but generate will lower it's we cash flow business, drive should that slightly ultimately model, returns.

Martin Malloy

Great. you. Thank

Operator

Wells Our next Bailey Fargo. comes ahead. of Please Jud from question go

Jud Bailey

the to the the that been systems flattish, systems who frac And customers you year? be curious, I'm like although seeing again, new customers? is noted. visibility then, morning. in Good just you count next adding question further are to additional uptick existing start curious adding any color a as crew guys. Thanks. I'd back you looks after to units. the It in A to you're has rocky count. are couple silo get add months of on here Or any

Kyle Ramachandran

appreciate I Jud. Sure, the question.

certainly it, of own with there's years, owned so call the And I it's that so balance and sand was, associated not answered level and that first customer of seeing instance, what seeing believe larger excited technology, we for we equipment this the in sand They long we've to consistently we with new one multiple first that. quarter, couple a new over but they time. a a customers. systems per stages think, logistics, about sheet the actually In day deploy added higher growth been question provide. to at quarter less the their actually operator additional been are we able as we've that period we're handling were cost on In of mix. particular courting customers,

perfectly customers, of operating really basins. across not we existing be honest, customers, as our to have uptake is deployed we an have our with work frac seen far but an expansion by multiple customers our fleets what in seen As

to systems year anecdote, we any. a which an Basin, in Rockies As ago Broader have really XX working close didn't have the we

So we necessarily not primarily 'new are We're growing see we're new away other from Kings. folks Sand continuing with adding our existing switch technologies, customers customers. and technologies' to

some if try are customers back had our solutions first them, using quarter of have various in all, most We Solaris. and other not of the

uptick. So the that's contributing of some to

Jud Bailey

question appreciate have is visibility to getting second how any said the business. that have XX for the end may I second months? active by did the on believe I you may the I color. say project the wanted many you and you silos it, today? few on built have but you My Okay. next quarter. missed over chemicals how of paid And

Kyle Ramachandran

Yes, is of Thanks, technology. this a think I is, Jud. context new the this Yes.

As we learnings getting indicated making we We're to multiple in some are on out the on field. customers. call, based some the them tweaks

We pad have, mix, this as get today being half of their call in trials a some weeks of feet And a giving talked or in those field a a them as we're and some operators it, far multiple mix revenue the and paid folks about trials. our to we're blended of getting few with we've dozen a initially wet.

we see in that we quarter. going here about notionally sort forward. of we have average first X-ish are talked And And and is progressing revenue I the that where think, on so, on

more. adding we've As that visibility operators today using mentioned, got multiple into have I them

visibility that basis manufacturing been the with should do generate, making line systems. mentioned, is into come to look here We the you contribute of do the I from second the going to be taking revenue final revenue. specific a on will. first up the the in systems that pick have we've we in that But off tweaks chunky, incremental the as some the here as did of if so, And we quarter, of chem timing quarter kind

Jud Bailey

just I two clarify that that. out? appreciate to average in Correct? Correct? could Okay. That one And in slip more, I the systems proppant. just XXX or just was systems too. XQ, The if chemical one excluded in for

Kyle Ramachandran

Correct.

Bill Zartler

correct. that's Yes,

Jud Bailey

Thanks. checking. Just turn I'll back. it

Operator

ahead. Watson next question go Our from Please Energy. of John comes Simmons

John Watson

Good you. Thank morning.

Kyle Ramachandran

morning, Good John.

John Watson

one of quarter, follow-up a contributions you'd the not gross chemical with understand to that. As if questions. us if revenue And rather or profit the from you you quick help Jud's can first curious In share, systems? have but I

Kyle Ramachandran

I and guess, rental from and a with and standpoint services in P&L services. the blended system it's rental They are of cost system proppant.

system at to the so, I and I as to overall we're clarity. relative planning this proppant out in just point, numbers that sort they're break the the -- kind And But quarter. small that contribution don't of of first think give pretty mentioned,

John Watson

Right.

Okay, okay. Got it.

mentioned screened like this that that System. On on customers number like? their percentage another the Solaris positively percentage or, for what system, might quarter when Last from what these And really you me, downtime the look Do that, downtime quarter call, excuse some have to -- first your Mile know fourth a me, looks you peers? all you of try

Kyle Ramachandran

-- take Solaris. the to we quarter try was will not alluded very of say to a we as do can sort in they, part, But not reduction company, in back. I rental XX% we're field. can We competitors. just on But every quickly the it for we lose reliability focus alternative relative and doesn't And long rate in focus -- certainly to the the don't did Again, try say improve of is to to to equipment other hour do a to benefit tracking we It's solutions what an reason and have primary solutions. numbers the from it offering. earlier, I we happy XX% $X,XXX It down our were what drive customers. keep our and first most day track our customers

Bill Zartler

towards ourselves get zero. to is goal Our

John Watson

Right.

Okay.

Okay, great. Understood.

mentioned your versus Last For in the offering? are full interested offering the percentage that equipment what rental you legacy Mile customers, service

Kyle Ramachandran

you But incremental the think some have at look customers incremental I part We business it's today customers. Last Mile. this of small. relatively more around is It's overall for on share. most about when our an basis with our the discussions certainly current

John Watson

I to gains. that into Should back sounds Okay, squeeze great. one expecting number in. higher share can And if It move into one activity later expect you're your you're move into it we like and to Today some -- last as QX we June? May levels.

Bill Zartler

got field. around. it's mean, moving running systems we've today I Well, the in currently, XXX

And so it's to around. bounce going

move said, full Kyle little here new a spot get out. basins we a as into month and work there's there As

growing be as And But markets, new around. visibility so with growing to in there's as expect it some locations. to continue of the markets offerings new the with well and current in do some bouncing to growth we sort or enhanced other customers

It's of do continues we steps three it lot we're or So bit in a a but of a two form moving ramp. -- to it see be steady deployments. progression occasionally, back steady and one forward

John Watson

it back. very Perfect. turn I’ll Okay. guys. Thanks

Operator

Our O'Leary next Please from Holt. Pickering, go of question comes Tudor, George ahead.

George O'Leary

morning guys. Good

Bill Zartler

George. morning Good

George O'Leary

Just about and solutions curious engineering talked were you standpoint. a you an technology new guys working the of guys some from on given

are they're you're you in dialogue you're analyzing with going inefficiency not that where to exactly what As of away newer your the on, focused but on most what I areas customers, guys working probably give are realize you're solutions? acutely

Bill Zartler

crew a or see on you dead completions be I we're told what bottlenecks to exactly giveaway, can what you've might lately, you but where of are a It the been if are. working if solutions,

in to We're targeting come of those and bottleneck on hit discussion to sort hour reliability day. we're there, You call lot time, order as are where understanding a needs was a with go bottlenecks their the around those of their sand the fracs working solve at In of that. we're can customers get what quicker. stages jointly we see ways one customers. to per and seeing per issues you our And ultimate mentioned our with all make equipment goal, up and

Kyle Ramachandran

Yes.

XX today, as with got our you are top different the leaders of the customers if will far these customers, some as and importantly we've leading in industry. plus think I

made to equipment. working it kit, investments And so make have can sense develop understanding maintenance that them that with of make to we're they incrementally points are, sense capital kit, that the solutions with understanding where where hand-in-hand rental and in a their existing pinch piece

Bill Zartler

software it's sometimes well. as And

both as steel improving well around as management software it's hardware data the and So processes completion.

George O'Leary

mean, helpful. belly that's like just and remainder know those as kind on points we side your then talk you sit maybe fleet you offload year, site see just And growth of I the as And of the into in the dump guys overall reworked the there fleet? of the lot it a customers whether dump frame of I dump like. that about balance percentage where systems and are having I'm customers feel the the Could we front belly today about the to belly more offering. efficiencies your a of the that on where XX dynamic a today your wondering Or already does I pneumatic we on and understand you of talk fleet? to and trickle for

Kyle Ramachandran

small. still it's pretty Today,

lower than belly been belly and have points. But are sometimes We we've we've not able is, can the pneumatic focused really to as of negotiate on for maximizing think payload, uncovered trucking couple trucks as a rates dug dump a Last solution. I those really screen One Mile, rates. we've comparable, that if that customers in are attractive instances, into dump

the perceived cheaper. big that rates driver is dumps notion of are a So trucking belly the

on mitigate increased a able working been on around kind to trucks able belly And number drive of that Mile. in basis. perception per So And sand the able Last been that. to been two, been being a we've pneumatic the more we've dumps then with payloads haul to we've there's truckload

takes we will something more it's is not And every To think going required to market our honest, footprint. asset certain belly other but base. to toolkit, it's larger solutions specific the operators. across be our So part perfectly be our of on dump dump and it belly solution be a definitely we believe

benefits are footprint. customers pads it on of we where one $XX,XXX at And production location, lot chem dollars. that of has so are foot to equipment looking of $XX,XXX with feet one square $X have constrained. on and of And we're on a at those is the important system it's that the the real saving And really today a square them,

of pad. And system a put takes larger you belly savings footprint by some be big generating a those a so if may offsetting dump that out

balance, and it's one solve look variable creating So and you're you that knock-on somewhere can't variable, else. just a because at for effects likely

George O'Leary

That's And I'll could. sneak helpful very Great. more if one I color. in

there or end As what the gets CapEx the of realize that band? will is moving the you of lower piece, chem you upper of the system of drivers about end there lower think how is. the gets and I adoption some upper of the the to that that or else band, be anything quick in biggest Is that you to

Kyle Ramachandran

At a not systems the lever. amount completing build we've systems, of talked couple sand today biggest more chain this the up queuing of the more we're is to that sand about think point, but year. a significantly I supply this

systems. chem the is it ultimately really So,

George O’Leary

Great. Thanks for color the guys.

Operator

comes go of Our next John Cowen. from question Please ahead. Hunter

John Hunter

morning Bill Hey, Kyle. and good

Kyle Ramachandran

Good morning.

Bill Zartler

morning. Good

John Hunter

per from margin fourth the working. first quarter utilized systems fewer in despite system quarter gross fully improved the your So

the So into we I'm wondering, looks second how quarter. that go as

exit Assuming you off in better utilization, continue second utilized improve quarter? margin to of the system rate is that gross March opportunity the per there

Kyle Ramachandran

are from today. modeling I we wouldn't be where incrementally

But the dollar likely business back actually contracts look other basis cost product relatively four the components -- But the we completion on last I phase. mile very margin work in as of is narrow quarters, will back nominally. than the with the structure as that would see a overall bounced say rental lower increase think that at contribution around last I percentage I we -- range. to will go Again go I margin up. it's

with, with, about that magnitude we pace a couple mile we've which shifts. the last -- things, which the last will one talked is dictate quarters. But we So win the work, pricing couple

actually XXXX. it was pricing flat demonstrated quarter call, talked that about in the but first haven't relatively clearly We versus this we

from then notion back the So activity. I picking cost driver would costs understanding that's the our And a manage think up our we that be margin. biggest standpoint, of with we of

we beginning So field at or in massive QX our the do didn't of layoffs this force year. in

part, And put from a our margin most on. as the model we But that cost are today. we we staff larger would standpoint, absorbed a gets I kept where over For to more base. work systems

John Hunter

it. the into contract service your the of lack We've on Got a structure. of you. second from heard visibility about quarter. Thank lot companies One frac

going contracts contracts shorter term now. moving the So, as if wondering have aligned there -- that there? pieces your just Does might are the customers Or you pricing that I'm with better changes that any to have they're of it? that potentially duration with mean

Kyle Ramachandran

the structured of a activity part, levels set activities based contracts pretty on those below current are its most pricing around customer. far call activity generally with where For at volume And our it a and are are. certain

really haven't we contracting our So shifted structure.

I As for sort set for majority of our the pricing the customers. been has of year, mentioned

move this cost And all. so to But is that that ultimately them. that problem we low to to about our don't the at is demonstrate a add for expect we've of solves this solution and got value lot customers

activity to are time that a continue we we work and those used have believe the on we're well so new our to Solaris we for long continue As around win very business. as customers if we will sites. will But work is customers long do wells, that, for our completing and

level. of sort high a at So that's

Bill Zartler

a the with or a being and for wrong There's low think cost all-in value cost of Yeah, cost. bit a reliability and having it It's over little I'll problem add low significant to high. is extremely a time. I

where basis make your regular period flowing differentiate overall making so a to we sure looking at incremental a that we ourselves. decision on of keep a And and is you really over believe sand time

John Hunter

it. Bill. last from Got me. then Thanks, one And

amendment had on you know transloading the side, Just the quarter. I Devon the first contract in

do work As into we second you down move the could a that quarter, you change? the offset Or some get you receive possibly that in there? contract contribution could expect step spot

Kyle Ramachandran

revenue a resulted million next is in just years. clarify. payment amendment being recognized $XX two So to That The in the over December.

second our be in million highest quarter will record through perfectly that month the So XXXX. $X you was honest, April the a call can probably of on and it end To facility. continue

We customers being a and have is by volumes of some significant overall slowdown in driven not Devon. necessarily that beyond additional seen

minimum at delivered deferred mentioned we don't fall that we business. as folks have reduced, amortized. significant we've got other volumes. a contract is have see revenue that couple part a of for Devon our being that do have but facility the precipitous So The And the in in volumes I all of been

So over Probably asset going for steady to it a near is is term? so. But to us think it We not. going the be triple?

as have the the West quickly Texas of I as their not Some nearly mines production local mines. ramped think

be So of that may this. some impacting

John Hunter

great. I turn will Okay, back. Thanks. it

Operator

Praveen from Raymond comes of Narra question next Our James.

Praveen Narra

Good morning guys.

this we large on putting Just give can can model? percentage balance this your of the And we start to from scale we this -- much where in And before of business to more could Mile have how option, in were actually assets be forever the follow-up do can of Last sheet? us we you I guess where ballpark are, how importantly for the kind bundled then XQ.

Kyle Ramachandran

I proportion today think our really a do us are as strategy this asking mentioned not for them. to of we customers

customers current to at for look them piece when we our deployed can carve off looking significant we this. aren't fleet a of So who

anywhere about to we've from bottom activity. so, our quarter talked X% notionally below that, of range. being In that it overall XX% first it the was far And the of end

it's growth it's from something win ways of solution. But -- point win percentage that a with with XXXX-XXXX business. of We're near terms nowhere this customers got a growth to standpoint has to looking that that of for lot it. -- in work are new development So a overall

Praveen Narra

silo be curious trial has since the And then -- expected one have XX. from I you learnings guys about on cost field of the And guess terms hear anything I to some side, the system? system in I'd had to guess then chemical per of changed

Kyle Ramachandran

a been say had From learnings were varied. sized. standpoint, let's The couple that not components right a just have we've manufacturing

those So tweaks. we've made

and have in One your from footprint some the been We that and of earlier the I of that some deliver savings. learning, that drivers one doing chemicals back production but the already concentrate took is have acids standpoint chemical big of at of help we've being so the that matures reduce costs a for concentrations big that footprint of and sort to and customer going mentioned pads you using a and can the shale it the used it the plays been significant. customers but some we those industry to From one as granted, on-site, mature to of look things so for kit things facilities is added. we're asked are that of is additional do components higher so trucking blend

condensed so we significantly. -- mentioned And as we've that

And costs not figuring in bit the took manufacturing savings then it's with notionally to I updated hours probably standpoint, guidance from that's And of But few be. been capital provide a system. expected and have still at we So as we sort out honestly we've capital certainly had it's We're still some point little a a expensive that we're more more critical. for per think granted. to where it operators, labor first process. the a range as

Praveen Narra

Perfect. Thank you.

Operator

Our go next Advisors. Heikkinen question comes from David Please Energy of Smith ahead.

David Smith

good morning. and you Thank

Kyle Ramachandran

morning David. Good

David Smith

is first the one This related questions. closely is this to -- of last

the recognizing consistent long systems? a wanted earlier proppant to record on trials and experience got systems track to with you've the that the compares with your process your redesign proppant system, of how Just I improvement ask chem pretty

Bill Zartler

years I the think bought original ago. four technology Loadcraft from we back

And are in think were system that the significant I today. we more so of the early days than where tweaks

selection. been sizing accuracy. on and we some we've to pump metering. on think working We've working working We've got working closer product and been on We've on been material I telemetry. been XXX%

handle to the And so and we tweaks. system well. is all can concept it's getting in seven well. quarter. in into the that's in pump quarter releasing some metering the some it's be rolling delays on next I new new they'll second design and layout It's and right way been from held working of going the number The handle think of chemicals system just and and first additions minor we're designs in some able minor all been back and overall a us But of these sort

a dealing on it. the FRs flows of right tweak. of of and lot are things we've some I think all various We the those viscosities and But in with of team important pieces different are the new way doing some learning got and

David Smith

available is out try waiting in another list And think follow-up X.X? a chem waiting to of that you've or list to the the them. operators customers X.X got when there's systems queue Do of you the for Version

Bill Zartler

going core we going to the X.X. system got I the It's we really X. say it's it I think correct. be think can to a not of mean I be Version

little tweaks goes. But think make functional. it functional I highly bit it a little be will all and the make that the it rollout more as

the better creates We pad once waiting looking move that from measure site. have into higher to control and well watching people value on and shipping chemicals to site you the and it the well concentrated understanding it and size

pace things. that really all and So is combined various to different the rollout of various going dictate customers initially the value

And so now. sorting it what feel about where that pretty today headed. through doing it's But all good we're do and we is is where

David Smith

Great. much. Thanks very

Operator

next Jason of Capital. Imperial comes ahead. from question Wangler Our Please go

Jason Wangler

just sizing the or the ask as change release lighter the on you're about to the your guys. with of CapEx how about quarters? forward the kind right mentioned the look couple in good as the things schedule. Does Hey, move next thinking you of that Wanted manufacturing that year through you you morning, capacity manufacturing budget

Bill Zartler

level workforce range with the can had a year were and all the demand. our capital month that the there that of combined sort third to beginning The bit with the facility demand. the said year, eight in geared had making last meet up quarter, along, to workforce. on We've spending a got of market manufacturing We overall we be to for through the contracted existing we've As little is peel plants sand of we our changed just we back of quarter meet outcomes and sets a high silos first believe recognizing employees. of

manufacturing So, not our side we we've believe the decisions will do alter to of made in chemical demand. ability that meet facility that the

Jason Wangler

I of rolled out of you think beginning combined the at software. year, And the Okay. the kind guys

that Just there you update was systems that's whether kind with of along how going customers was systems. on if or curious to an push chemical sand as the the

Kyle Ramachandran

trucking piece, we're -- the trucking We well. on across third-party platforms. integrating going It's

So and really We've there. and sense they're for dashboards for their we've increased the steadily that dashboards, into compelling. got most we're integrating data create in the into additional number data use creating taking and can but is showing managing of a great how their the once of the with which start taking feed folks, it's own most data. We certainly that hands piping business, them powerful are it that raw their data own our customers customers folks their makes really way rooms

good. so far so So,

Jason Wangler

back. Great. it I turn appreciate. I’ll

Operator

Our Ryan Pfingst next from Instructions] FBR. Please of [Operator B. ahead. Riley question comes go

Ryan Pfingst

on morning, how feedback utilized guys. the A in mostly Hey, Is Curran Lens Subbing for is now? good side. Solaris running morning. customer technology And right Tom this MPMS follow-up units the been? on

Kyle Ramachandran

When if sand operators the pumpers chain rather spectrum the and manage inventory of in and they think I displaying we So, about all all this differently. or software. systems, talked supply paradigm is different pressure the We're that available will, remotely different on the past. in we've all instances look you system the their at

the on data. heavily rely Some

much school it folks old there's are Some use methodology. and folks that still then it in sometimes very doing

manage but -- that the to to on effectively over more spectrum, manage drive seen folks So, trucking, there help general, continues relying we've dispatching be in the and down data site, the better well costs.

Ryan Pfingst

second Got And quick just it. a one.

mostly For be are systems, to incoming Permian? multiple across chemical going the or those in basins the deployed

Kyle Ramachandran

certainly has areas obviously take in which weather we've cold package cold into weather to account They're Yeah. in to basin. go designed any We've some with our able had very liquids. and so them

And mentioned, we that basin with any cold for no, limitation So, offering. be that had areas have, I there some them in as won't temperatures.

Ryan Pfingst

Thanks the color. for it. Got

Operator

Bill closing remarks. concludes question-and-answer any This session. for our over Zartler to the conference I to back like would turn

Bill Zartler

Thank you, Nicole.

a to key the Before summarize few we I'd the close of out like points. call,

our We both be with our position grow new can to new continue existing in we with legacy customers where a products. and and unique

products, as for completely relying both an growth. continues built the that on products. market aren't We look overall well to improve ways as innovative develop complementary new to We've for our culture existing

we with of lot already with We XXXX flow options top balance a return recent consider capital again our call, our continue shareholder quarter. you in the will for close look you forward provide on to sheet. capital to of joining generation return. us you initiations next to willingness cash today flexible out that to may in dividend options we updating free will please. an shareholders us all Thank and Our and demonstrated maximize the Nicole,

Operator

Thank The for is now Thank presentation. you. attending you concluded. conference today's

may disconnect. You now

Solaris Energy Infrastructure (SEI) 1 May 192019 Q1 Earnings call transcript