Form 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to ________________ Commission File Number 001-38066 SELECT ENERGY SERVICES, INC. (Exact name of registrant as specified in its charter ...

Select Energy Services, Inc. (NYSE:WTTR) Q1 2023 Earnings Conference Call May 3, 2023 11:00 AM ET Company Participants Chris George - Senior Vice President, Corporate John Schmitz - Founder, Chairman, President and CEO Nick Swyka - SVP and CFO Michael Skarke - EVP and COO Conference Call Participants Jim Rollyson - Raymond James Don Crist - Johnson Rice Luke Lemoine - Piper Sandler Tom Curran - Seaport Research Partners Operator Greetings, and welcome to the Select Energy Services First Quarter Earnings Con ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022. OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-38066 Select Energy Services, Inc. (Exact name of registrant as specified in its charter) Delaware 81-4561945 (Sta ...

Financial Data and Key Metrics Changes - In 2022, the company achieved revenue growth of 81%, reaching approximately $1.4 billion, and adjusted EBITDA growth of 290%, totaling $195 million [6][7] - The fourth quarter revenue was $382 million, a sequential increase of 2% or $6.6 million, impacted by winter weather and certain non-ordinary expenses [26][27] - Net income for the fourth quarter decreased to $7.6 million from $24.7 million, while adjusted EBITDA fell to $52.2 million from $62.8 million [26] Business Line Data and Key Metrics Changes - Record revenues were achieved in both Water Infrastructure and Chemicals segments, with Water Services benefiting from consolidation and technology initiatives [6][7] - The Water Infrastructure segment is expected to see significant revenue growth of 20% to 25% in Q1, driven by recent acquisitions and investments [28] - The Chemicals segment continues to experience strong organic revenue expansion, maintaining near record-high revenue levels [29] Market Data and Key Metrics Changes - The company operates primarily in the Permian Basin, with a breakdown of approximately 80% oil-directed and 20% natural gas-oriented activity [51] - The company has seen increased conversations around pipeline solutions and recycling due to lower natural gas prices, indicating a shift towards more efficient operations [54] Company Strategy and Development Direction - The company is focused on building and bolstering its core water and chemicals business, advancing technology, and executing strategic M&A [9][12] - A corporate rebranding initiative is planned to change the name to Select Water Solutions, Inc., aligning with the company's vision as a water-first company [13][15] - The company aims to enhance operational efficiency and increase free cash flow through the integration of various systems and streamlining operations [24][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about meaningful revenue, EBITDA, and net income growth in 2023, supported by recent acquisitions and infrastructure investments [16][24] - The company anticipates a significant uplift in free cash flow, projecting it to be roughly two-thirds of adjusted EBITDA for 2023 [24][30] - Management highlighted the importance of responsible energy production and sustainable solutions as part of the energy transition [11][12] Other Important Information - The company initiated its first-ever quarterly dividend in Q4 2022 and aims to build a solid track record of returning capital to shareholders [8] - The company completed numerous strategic acquisitions and divested non-core assets to focus on its vision [12][17] Q&A Session Summary Question: Revenue and profitability potential post-integration of acquisitions - Management indicated that the Water Infrastructure Group will see significant growth due to capital expenditures focused on infrastructure and recycling projects [34][35] Question: Integration of collection processing systems and Microsoft 365 migration - The target for completing the migration remains the same, with expectations for benefits to materialize over time [44][45] Question: Expected gross margin for Water Services - Management confirmed expectations for Water Services to achieve gross margins in the low 20s for Q2 through Q4 [49] Question: Split between oil-directed and natural gas-oriented activity - The company reported a 50% focus on the Permian Basin, with an overall breakdown of 80% oil to 20% gas [51] Question: Diversification opportunities from rebranding - Management discussed leveraging existing technology and chemistry capabilities to expand into other industries beyond oil and gas [60][62]

Financial Data and Key Metrics Changes - Revenue for Q3 2022 was $375 million, representing a 12% increase quarter-over-quarter, with 59% of this revenue increase contributing to higher gross profits [24][8] - Net income increased by 70% to $24.7 million, and adjusted EBITDA grew by 32% to $62.8 million, marking the highest quarterly net income and adjusted EBITDA since Q3 2018 [25][24] - Gross margins across all segments improved, with the Water Services segment achieving gross margins of 22.8% and the Chemicals segment increasing gross margin from 14.6% to 18.8% [31][35] Business Line Data and Key Metrics Changes - The Water Services segment saw a sequential revenue growth of 13% to $221 million, with gross margins increasing over 3 percentage points [31] - The Infrastructure segment experienced significant revenue gains, growing by 23% sequentially to $74 million, with gross margins before depreciation and amortization increasing to 27.2% [34] - The Chemicals segment maintained strong revenue growth, with expectations of mid-single-digit revenue growth in Q4 while maintaining margins around Q3 levels [35] Market Data and Key Metrics Changes - The U.S. onshore rig count increased by about 7%, although completions activity lagged with low-single-digit percent growth [19] - Despite the disparity in rig count and completions, the company saw strong demand for integrated water and chemistry solutions, indicating a solid commodity price environment [19] Company Strategy and Development Direction - The company is focused on improving its core business, advancing technology, sustainability, and diversification efforts, along with executing strategic mergers and acquisitions (M&A) [8] - Recent acquisitions of Breakwater Energy Partners and Cypress Environmental Services are expected to drive efficiencies and create value, with a focus on expanding water recycling capabilities [10][14] - The company initiated a regular quarterly dividend program, reflecting confidence in its operating performance and commitment to shareholder returns [16][17] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for continued operational efficiency gains and growth opportunities from recent acquisitions, anticipating a strong year in 2023 [21][20] - The company highlighted the importance of integrating new acquisitions and maintaining a disciplined capital structure to support growth [18][38] - Management noted that while working capital needs increased in Q3, they expect to reverse this trend in Q4 and generate substantial positive free cash flow in 2023 [60][61] Other Important Information - The company finished Q3 with a net cash position of $13.2 million and no bank debt, indicating strong liquidity [40] - The Breakwater acquisition is expected to generate approximately $110 million to $115 million in revenue and over $30 million in adjusted EBITDA on a full-year basis [15] Q&A Session Summary Question: Can you walk me through the process to develop Breakwater's capacity? - The permitting process can take as little as three to four months, but initially, it may take six months or more. Construction timelines vary based on size and treatment type, ranging from four to nine months [45][46] Question: Are there other M&A opportunities in different basins? - The company remains active in the market and believes there are more opportunities across the U.S. for water and chemical solutions [49][50] Question: How do you expect to reverse working capital flow in Q4? - The company plans to integrate recent acquisitions and upgrade ERP systems to streamline operations, aiming for substantial positive free cash flow in 2023 [60][61] Question: What is the current utilization rate of existing recycling facilities? - Utilization rates improved in Q3, with all facilities contributing for a full quarter, but half are still underutilized [63] Question: Did you negotiate with Cypress creditors during their restructuring? - Conversations occurred prior to the transaction, and the acquisition was made from a party involved in restructuring [65]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to ________________ Commission File Number 001-38066 SELECT ENERGY SERVICES, INC. (Exact name of registrant as specified in its cha ...

Financial Data and Key Metrics Changes - Revenue increased by 14% quarter-over-quarter, rising from $295 million to $336 million, primarily driven by pricing and activity improvements [17][19] - Adjusted EBITDA grew by 48%, from $32.2 million to $47.7 million, while net income surged by 83%, from $8 million to $14.6 million [19] - Gross margin improved from 8.4% to 10.6% in the second quarter [19] Business Segment Data and Key Metrics Changes - Water Services segment revenues grew by 20% to $196 million, with gross margins increasing over 3 percentage points to 19% [23] - Water Infrastructure revenue increased by 3% to just over $60 million, with margins rising to 25.5% [24] - Chemicals segment revenue expanded by 10% to nearly $80 million, with margins growing slightly to 14.6% [25] Market Data and Key Metrics Changes - The second quarter saw a meaningful double-digit percentage increase in drilling activity, while completion activity lagged with single-digit percentage growth [14] - The company expects mid to high single-digit revenue growth in the Water Services segment for the third quarter, supported by activity growth and pricing gains [23] Company Strategy and Development Direction - The company is focused on improving its base business, advancing technology, sustainability, and executing strategic M&A [7] - The asset-light business model is designed to generate substantial free cash flow through the cycle, without requiring large amounts of reactivation or maintenance CapEx [10] - The company aims to capitalize on market leadership in sustainable water and chemical solutions, with ambitious targets for water stewardship [12] Management's Comments on Operating Environment and Future Outlook - Management believes that US unconventional resources will be the primary growth driver for global energy needs in the coming years [10] - The company is confident in generating meaningful free cash flow during the second half of 2022, supported by strong financial conditions [15] - Management noted that the integration of recent acquisitions is progressing well, with expectations for continued efficiencies and synergies [11] Other Important Information - The company issued its inaugural sustainability report during the second quarter, highlighting its commitment to water stewardship [12] - The company has commenced operations at two new contracted fixed recycling facilities, increasing recycling capacity to over 600,000 barrels per day [13] Q&A Session Summary Question: Pricing outlook for the second half of 2022 and 2023 - Management indicated that pricing has largely been to cover costs, with expectations for continued price increases in Q3 due to inflationary pressures and supply-demand imbalances [30][32] Question: Freshwater sourcing displacement by recycling efforts - The company is moving about 35 million to 40 million barrels of produced water that would directly replace fresh water [34] Question: Demand in other areas outside the Permian Basin - Management noted increased demand for services across their footprint, including new recycling projects in Colorado [37] Question: Update on synergy realization and cost savings from acquisitions - Management provided an update on the progress of synergy realization, indicating that back office rationalization is nearing completion, while operational efficiencies and revenue synergies are still being pursued [42][45] Question: Utilization levels of water services assets - Management stated that labor has been a constraint, but equipment is starting to become a limiting factor due to a lack of investment since 2018 [46][48] Question: Challenges in the chemical supply chain and inflationary pressures - Management acknowledged challenges in the chemical raw material supply chain, but noted that they have been able to navigate these issues effectively [64][66]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to ________________ Commission File Number 001-38066 SELECT ENERGY SERVICES, INC. (Exact name of registrant as specified in its charter) ...

Financial Data and Key Metrics Changes - The company reported a sequential revenue growth of 16% in Q1 2022, reaching $295 million, which is an increase of $40 million from Q4 2021 and $90 million from Q3 2021 [8][16] - Adjusted EBITDA increased by 22% sequentially to $32.2 million, while net income was $8 million, slightly down from $11.2 million in the previous quarter [8][17] - Gross margin improved from 7% to 8.4% [17] - Free cash flow was negative at $20.5 million due to a working capital build of $44.9 million [17] Business Line Data and Key Metrics Changes - Water Services segment revenue grew by 16% to $164 million, with gross margins advancing to over 16% [22] - Water Infrastructure revenue increased by 25% to $59 million, although gross margin slipped slightly to 24% due to integration efforts and maintenance upgrades [22] - Oilfield Chemicals segment revenue rose by 7.5%, with gross margins increasing nearly 200 basis points to 14.4% [23] Market Data and Key Metrics Changes - The company noted a meaningful double-digit percentage increase in drilling activity, although completion activity lagged [14] - The company expects continued growth in activity supported by strong commodity prices [14] Company Strategy and Development Direction - The company is focused on improving its base business, advancing technologies, and executing strategic M&A [8] - The integration of Nuverra is ongoing, with expectations of improved profitability as operational efficiencies are realized [21] - The company aims to double its recycled water volumes over the next five years, with current estimates indicating that about 15% of handled water volumes are recycled [28] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in generating positive free cash flow throughout 2022 despite challenges from working capital and integration costs [9][18] - The company anticipates substantial positive free cash flow as integration costs diminish and working capital normalizes [18] - Management highlighted the importance of sustainability initiatives and the commitment to water stewardship [10][19] Other Important Information - The company executed a $16 million open-market share buyback during the first quarter [9] - A $270 million sustainability-linked asset-backed lending facility was closed, extending the term by five years [19] Q&A Session Summary Question: What is the current mix of recycled water and the industry's recycling percentage? - The company estimates that about 15% of its handled water volumes are recycled, with a target to exceed 50 million barrels of recycled water over the next five years [28] Question: What are the main inflationary pressures and supply chain challenges for Water Services? - Fuel prices were a significant inflationary challenge, and the long-term target for gross margins is expected to be in the mid-to-high 20s [34] Question: How is working capital expected to progress throughout 2022? - Positive free cash flow is anticipated, with net working capital as a percentage of revenue expected to decrease [36] Question: What further opportunities exist for operational improvements? - The company has a backlog of projects and is focused on integrating and investing in underutilized assets [39] Question: Is there urgency among E&Ps to partner for water needs? - There is increased interest from E&Ps for water sourcing and disposal solutions, particularly in the Permian [41] Question: What is the status of share repurchase authorization? - As of March 31, the company had authorization for $25 million in share repurchases, with some room left in that authorization [42]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to ________________ Commission File Number 001-38066 SELECT ENERGY SERVICES, INC. (Exact name of registrant as specified in its charter ...