Aris water solutions, inc. reports first quarter 2022 results
Houston--(business wire)--aris water solutions, inc. (nyse: aris) (“aris”, “aris water” or the “company”), today announced financial and operating results for the first quarter ended march 31, 2022. first quarter 2022 highlights total water volumes of approximately 1.2 million barrels per day for the first quarter of 2022, up 45% versus the first quarter of 2021. recycled produced water volumes of approximately 273 thousand barrels per day for the first quarter of 2022, up 290% versus the first quarter of 2021. first quarter 2022 consolidated net loss of $6.6 million, down from consolidated net income of $2.8 million for the first quarter of 2021 primarily related to a non-cash charge associated with assets held for sale. adjusted net income 1 was $10.0 million. adjusted ebitda 1 of $35.9 million for the first quarter of 2022, up 54% versus the first quarter of 2021. recent events announced a new long-term full cycle water management agreement with chevron. under the agreement, aris will provide chevron with exclusive produced water handling and recycling services in a significant portion of their core northern delaware basin acreage. declared a dividend on the company’s class a common stock for the second quarter of 2022 of $0.09 per share. “aris finished the first quarter with significant commercial momentum and strong execution,” stated amanda brock, chief executive officer of aris. “we continued to move record water volumes on our expansive infrastructure network and grew alongside our premier, long-term contracted customers. aris’s recycled produced water solutions continue to be rapidly adopted by operators and we are improving water sustainability in the permian basin. in addition, our recently announced agreement with chevron is a significant milestone for the team, provides greater visibility to our long-term growth trajectory, and represents a strong endorsement of aris from a leading operator. we are optimistic and confident about aris’s continued growth in 2022 and beyond.” operations update for the first quarter of 2022, the company averaged approximately 1.2 million barrels of water per day of total volumes handled, up approximately 45% from 806 thousand barrels of water per day for the first quarter of 2021. the company’s volume growth was primarily driven by increased activity levels from our long-term contracted customers and continued adoption of our recycled produced water solutions. in march of 2022, aris announced an expansion of its alliance with texas pacific land corporation (“tpl”). as part of the expanded relationship, aris has access across tpl’s northern delaware surface acreage to provide a full suite of produced water services, including incremental water recycling for two leading large-cap customers operating on tpl royalty and surface acreage. in addition, aris received key additional shallow interval water handling locations with the ability to permit more as needed. financial update during the first quarter of 2022 the company recorded a consolidated net loss of $6.6 million, down from consolidated net income of $2.8 million for the first quarter of 2021. the net loss was primarily related to a non-cash charge associated with assets held for sale. adjusted net income 1 was $10.0 million. the company had adjusted ebitda 1 of $35.9 million for the first quarter of 2022 compared to $23.4 million in the first quarter of 2021, an increase of 54%. aris continues to grow its adjusted ebitda alongside activity level increases from its long-term contracted customers and increased demand for its sustainable water recycling solutions. the company had gross margin per barrel of $0.26 per barrel for the first quarter of 2022 compared to $0.14 per barrel in the first quarter of 2021. the company had adjusted operating margin per barrel 2 of $0.42 per barrel for the first quarter of 2022, compared to $0.39 per barrel in the first quarter of 2021. first quarter 2022 property, plant, and equipment expenditures totaled $9.8 million compared to $20.3 million in the first quarter of 2021. aris continues to invest in high-return capital projects that support its long-term contracted customers and leverage its existing infrastructure. strong balance sheet and liquidity as of march 31, 2022, the company had approximately $67.8 million in cash and an undrawn and available $200.0 million revolving credit facility for a total available liquidity of $267.8 million. second quarter 2022 dividend on may 6, 2022, aris announced that its board of directors declared a dividend on its class a common stock for the second quarter of 2022 of $0.09 per share. in conjunction with the dividend payment, a distribution of $0.09 per unit will be paid to unit holders of solaris midstream holdings, llc. the dividend will be paid on may 31, 2022, to holders of record of the company’s class a common stock as of the close of business on may 19, 2022. the distribution to unit holders of solaris midstream holdings, llc will be subject to the same payment and record dates. increased 2022 outlook aris is updating its 2022 outlook to reflect the impact of the recently signed long-term agreement with chevron as well as increased activity levels in the northern delaware basin. for the year of 2022, aris is now projecting increased adjusted ebitda1 between $165.0 and $175.0 million and property, plant, and equipment expenditures between $140.0 and $150.0 million. for the second quarter of 2022, aris projects adjusted ebitda 1 of $38.0-$40.0 million. aris is investing additional capital in 2022 to support the chevron agreement as well as incremental projected growth from our other long-term contracted customers. conference call aris will host a conference call and webcast for investors and analysts to discuss its results for the first quarter of 2022 on tuesday, may 10, 2022, at 8:00 a.m. central time (9:00 a.m. eastern time). participants should call (877) 407-5792 and should refer to aris water solutions, inc. when dialing in. an audio replay of the conference call will be available shortly after the conclusion of the call and will remain available for approximately 14 days. to access the replay, call (877) 660-6853 (united states/canada) or (201) 612-7415 (international) and enter access code 13727969. a live broadcast of the earnings conference call and the related earnings presentation will also be available via the internet at www.ariswater.com under the “investors” section of the website. a replay will also be available on the website following the call. about aris water solutions, inc. aris water solutions, inc. is a leading, growth-oriented environmental infrastructure and solutions company that directly helps its customers reduce their water and carbon footprints. aris water delivers full-cycle water handling and recycling solutions that increase the sustainability of energy company operations. its integrated pipelines and related infrastructure create long-term value by delivering high-capacity, comprehensive produced water management, recycling and supply solutions to operators in the core areas of the permian basin. forward-looking statements this press release contains “forward-looking statements” within the meaning of section 27a of the securities act of 1933, as amended, and section 21e of the securities exchange act of 1934, as amended. examples of forward-looking statements include, but are not limited to, those regarding the company’s business strategy, its industry, its future profitability, the various risks and uncertainties associated with the extraordinary market environment and impacts resulting from the volatility in global oil markets and the covid-19 pandemic, expected capital expenditures and the impact of such expenditures on performance, management changes, current and potential future long-term contracts and the company’s future business and financial performance. in some cases, you can identify forward-looking statements by terminology such as “anticipate,” “guidance,” “preliminary,” “project,” “estimate,” “expect,” “continue,” “intend,” “plan,” “believe,” “forecast,” “future,” “potential,” “may,” “possible,” “could” and variations of such words or similar expressions. forward-looking statements are based on the company’s current expectations and assumptions regarding its business, the economy and other future conditions. because forward-looking statements relate to the future, by their nature, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. as a result, the company’s actual results may differ materially from those contemplated by the forward-looking statements. factors that could cause the company’s actual results to differ materially from the results contemplated by such forward-looking statements include, but are not limited to the risk factors discussed or referenced in its filings made from time to time with the u.s. securities and exchange commission. readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. factors or events that could cause the company’s actual results to differ may emerge from time to time, and it is not possible for the company to predict all of them. the company undertakes no obligation to update or revise any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law. _________________ 1 adjusted ebitda and adjusted net income are non-gaap financial measures. see the supplementary schedules in this press release for a discussion of how we define and calculate adjusted ebitda and adjusted net income and a reconciliation thereof to net income, the most comparable gaap measure. 2 adjusted operating margin per barrel is a non-gaap financial measure. see the supplementary schedules in this press release for a discussion of how we define and calculate adjusted operating margin per barrel and a reconciliation thereof to gross margin, the most comparable gaap measure. 2022 2021 $ 35,100 $ 21,651 21,081 18,086 11,644 1,943 3,144 4,509 70,969 46,189 26,671 20,754 16,579 14,957 43,250 35,711 10,730 4,695 15,597 — 1,064 317 27,391 5,012 328 5,466 7,785 2,651 (7,457 ) 2,815 (840 ) — (6,617 ) 2,815 — 7 $ (6,617 ) $ 2,822 (4,395 ) $ (2,222 ) $ (0.11 ) 21,852,966 2022 2021 67,779 60,055 50,792 41,973 19,584 20,191 2,730 4,126 5,191 6,043 7,450 — 153,526 132,388 696,275 700,756 (68,160 ) (67,749 ) 628,115 633,007 295,746 304,930 34,585 34,585 22,439 19,933 7,002 — 1,708 1,850 1,143,121 1,126,693 19,281 7,082 1,740 1,499 46,174 40,464 67,195 49,045 392,518 392,051 7,530 6,158 77,095 75,564 5,398 1,336 549,736 524,154 — — 219 218 316 317 (135 ) (135 ) 215,805 212,926 (4,741 ) (457 ) 211,464 212,869 381,921 389,670 593,385 602,539 1,143,121 1,126,693 2022 2021 (6,617 ) 2,815 (840 ) — 16,579 14,957 2,337 — 15,597 — 554 44 2 211 565 214 203 — (7,996 ) 850 608 (768 ) 795 896 852 923 1,026 (2,928 ) 241 246 14 (149 ) 2,470 (737 ) 26,390 16,574 (9,810 ) (20,326 ) (9,810 ) (20,326 ) (8,856 ) — — 5 (8,856 ) 5 7,724 (3,747 ) 60,055 24,932 67,779 21,185 2022 2021 803 648 273 70 66 33 25 55 364 158 1,167 806 0.78 0.68 0.45 0.45 0.68 0.64 0.25 0.29 0.42 0.39 use of non-gaap financial information the company uses financial measures that are not calculated in accordance with u.s. generally accepted accounting principles (“gaap”), including adjusted ebitda, adjusted operating margin adjusted operating margin per barrel, and adjusted net income. although these non-gaap financial measures are important factors in assessing the company’s operating results and cash flows, they should not be considered in isolation or as a substitute for net income or gross margin or any other measures prepared under gaap. the company calculates adjusted ebitda as net income (loss) plus: interest expense; income taxes; depreciation, amortization and accretion expense; asset impairments and abandoned project charges; losses on the sale and/or exchange of assets; loss on debt modification; and non-recurring or unusual expenses or charges (including temporary power costs), less any gains on sale and/or exchange of assets. the company calculates adjusted operating margin as gross margin plus depreciation, amortization and accretion and temporary power costs. the company defines adjusted operating margin per barrel as adjusted operating margin divided by total volumes. the company calculates adjusted net income as net income (loss) attributable to stockholder’/members’ equity plus the after-tax impacts of stock-based compensation and plus or minus the after-tax impacts of certain items affecting comparability, which are typically noncash and/or nonrecurring items. for the quarter ended march 31, 2022, the company calculates its current leverage ratio as net debt as of march 31, 2022, divided by annualized 1q 2022 adjusted ebitda. net debt is calculated as the principal amount of total debt as of march 31, 2022, less cash as of march 31, 2022. the company believes these presentations are used by investors and professional research analysts for the valuation, comparison, rating, and investment recommendations of companies within its industry. similarly, the company’s management uses this information for comparative purposes as well. adjusted ebitda, adjusted operating margin, adjusted operating margin per barrel, and adjusted net income are not measures of financial performance under gaap and should not be considered as measures of liquidity or as alternatives to net income (loss) or gross margin. additionally, these presentations as defined by the company may not be comparable to similarly titled measures used by other companies and should be considered in conjunction with net income (loss) and other measures prepared in accordance with gaap, such as gross margin, operating income, net income or cash flows from operating activities. although we provide forecasts for the non-gaap measure adjusted ebitda, we are not able to forecast the most directly comparable measure net income calculated and presented in accordance with gaap without unreasonable effort. certain elements of the composition of the gaap net income are not predictable, making it impractical for us to forecast. such elements include but are not limited to non-recurring gains or losses, unusual or non-recurring items, income tax benefit or expense, or one-time transaction costs, which could have a significant impact on the gaap measure. as a result, no reconciliation of forecasted adjusted ebitda to forecasted gaap net income is provided. 2022 2021 (6,617 ) 2,815 7,785 2,651 (840 ) — 16,579 14,957 15,597 — 2,337 — 2 211 — 2,650 554 44 508 62 35,905 23,390 2022 2021 70,969 46,189 (43,250 ) (35,711 ) 27,719 10,478 16,579 14,957 — 2,650 44,298 28,085 105,006 72,555 0.42 0.39 2022 2021 (6,617 ) 2,815 15,597 — 554 44 2,337 — (1,843 ) — 10,028 2,859 2022 400,000 (67,779 ) 332,221 35,905 x 4 143,620 332,221 143,620 2.31
