Select Water Solutions(US:WTTR)2025-05-07 20:28Financial Performance - Total revenue for Q1 2025 was $374,384,000, an increase of 2.3% compared to $366,548,000 in Q1 2024[19] - Net income attributable to Select Water Solutions, Inc. for Q1 2025 was $8,239,000, representing a 127.5% increase from $3,625,000 in Q1 2024[19] - Gross profit for Q1 2025 was $55,770,000, up from $52,677,000 in Q1 2024, reflecting a gross margin improvement[19] - The company reported a comprehensive income of $9,560,000 for Q1 2025, compared to $3,875,000 in Q1 2024, reflecting strong operational performance[21] - Net income for the three months ended March 31, 2025, was $9,560,000, a significant increase from $3,875,000 in the same period of 2024, representing a growth of 146%[26] - Total revenue for the three months ended March 31, 2025, was $374.384 million, a 2.3% increase from $366.548 million in the same period of 2024[70] - Net income surged by 146.7% to $9.6 million, compared to $3.9 million in the prior quarter[204] Assets and Liabilities - Total current assets increased to $457,850,000 as of March 31, 2025, compared to $385,498,000 as of December 31, 2024, marking a 18.7% growth[16] - Long-term debt increased significantly to $245,888,000 as of March 31, 2025, from $85,000,000 as of December 31, 2024[16] - Total assets reached $1,545,211,000 as of March 31, 2025, up from $1,366,282,000 at the end of 2024, indicating a 13.1% increase[16] - Cash and cash equivalents increased to $27,892,000 as of March 31, 2025, from $19,978,000 as of December 31, 2024, a growth of 39.4%[16] - The allowance for credit losses decreased from $4,543,000 as of December 31, 2024, to $4,387,000 as of March 31, 2025, reflecting a charge-off of $936,000 and an increase based on revenue of $754,000[51] - The Company's asset retirement obligations (ARO) increased from $63,230,000 as of December 31, 2024, to $64,075,000 as of March 31, 2025, with accretion expense of $1,009,000 and settlements of $1,390,000[51] Expenses and Cash Flow - Selling, general and administrative expenses decreased to $37,432,000 in Q1 2025 from $43,980,000 in Q1 2024, a reduction of 15%[19] - Cash flows from operating activities showed a net cash used of $(5,061,000) in Q1 2025, compared to a net cash provided of $32,129,000 in Q1 2024, indicating a decline in operational cash flow[26] - The company paid $7 million in dividends during the current quarter, with future payments subject to board approval[41] - The company incurred $1.9 million in match expense for its defined contribution 401(k) Profit Sharing Plan in the Current Quarter, compared to $1.7 million in the Prior Quarter[54] Segment Performance - The company has three reportable segments: Water Infrastructure, Water Services, and Chemical Technologies, which are evaluated for resource allocation and performance assessment[42] - Revenue from accommodations and rentals was approximately $20.9 million in the Current Quarter, compared to $20.3 million in the Prior Quarter, recognized under ASC 842 lease guidance[67] - Water Infrastructure segment revenue rose by 14.0% to $72.4 million, while Water Services segment revenue decreased by 1.2% to $225.6 million[204] - Revenue for the Chemical Technologies segment was $76.686 million for the three months ended March 31, 2025, compared to $75.073 million in the prior quarter, reflecting a growth of 2.14%[158][160] Investments and Acquisitions - The company made capital contributions of $72 million to AV Farms on February 28, 2025, with plans to increase this investment by approximately $74 million over the next three years[38] - Total investment in unconsolidated entities as of March 31, 2025, was $83,501,000, up from $11,347,000 in the previous year, reflecting a substantial increase in strategic investments[40] - The Company completed acquisitions totaling $175,784,000 in 2024, with significant transactions including Tri-State Water Logistics for $58,330,000 and Iron Mountain Energy for $14,000,000[58] - The company executed three asset acquisitions totaling $13.1 million in the first three months of 2025, enhancing water infrastructure capabilities[171] Debt and Financing - The borrowing base for the Revolving Credit Facility under the Sustainability-Linked Credit Facility was $252.2 million as of March 31, 2025[80] - The company had $250.0 million in borrowings outstanding under the Sustainability-Linked Credit Facility as of March 31, 2025, with an interest rate of 7.68%[101] - The company incurred $7.4 million of debt issuance costs during the current quarter related to the Sustainability-Linked Credit Facility[105] - The company was in compliance with all debt covenants as of March 31, 2025[106] Stock and Equity - The Company adopted the Select Water Solutions, Inc. 2024 Equity Incentive Plan, reserving 8,487,004 shares of Class A common stock for issuance[110] - As of March 31, 2025, there were 999,050 stock options outstanding with a weighted-average exercise price of $20.20 and an aggregate intrinsic value of $504,000[112] - The Company recognized compensation expense of $3.0 million related to restricted stock awards for the Current Quarter, with $20.3 million of unrecognized compensation expense remaining[114] - The Company repurchased 544,287 shares of Class A common stock during the Current Quarter, accounting for a decrease of $6.4 million to paid-in-capital[127] Market Conditions - The average price of West Texas Intermediate (WTI) crude oil decreased to $71.78 in the current quarter from $77.50 in the prior quarter, a decline of 7.1%[175] - The average Henry Hub natural gas spot price increased to $4.14 in the current quarter from $2.15 in the prior quarter, a significant rise of 92.1%[175] - OPEC+ production cuts currently total 5.86 million barrels/day, with further cuts announced in March 2025, impacting crude oil price volatility[175]