Atlas Energy Solutions (AESI) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Results Overview Financial & Operational Highlights Atlas Energy Solutions reported Q2 2025 revenue of $288.7 million, a net loss of $5.6 million, and Adjusted EBITDA of $70.5 million, while generating $48.9 million in Adjusted Free Cash Flow Q2 2025 Financial Summary (vs. Q1 2025 & Q2 2024) | Metric | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Revenue | $288.7M | $297.6M | $287.5M | | Net Income (Loss) | ($5.6M) | $1.2M | $14.8M | | Adjusted EBITDA | $70.5M | $74.3M | $79.1M | | Adjusted EBITDA Margin | 24% | 25% | 28% | | Net cash from operating activities | $88.6M | ($7.5M) | $60.9M | | Adjusted Free Cash Flow | $48.9M | $58.8M | $73.7M | - Maintained a quarterly dividend of $0.25 per share, which is scheduled to be paid on August 21, 2025[8] - Subsequent to the end of the quarter, Atlas acquired PropFlow, a patented sand filtration system designed to remove debris from proppant at the wellsite[8] Management Commentary CEO John Turner highlighted strong free cash flow despite a Permian Basin slowdown, noting the Power segment's first full-quarter contribution and Dune Express's full operation - Despite a slowdown in Permian Basin activity, the company delivered strong free cash flow in Q2 2025[6] - The new Power segment provided its first full quarter of contribution, with the company evaluating further opportunities in production support, micro-grids, and commercial applications[6] - The Dune Express is now fully operational, with a majority of sand deliveries from the Kermit plant occurring at the End of Line and State Line facilities[6] - The company expects a challenging completions market in West Texas for the second half of 2025 but is positioned to gain market share as the leading low-cost provider of proppant and logistics[6] Second Quarter 2025 Financial Performance Total sales for Q2 2025 decreased 3.0% sequentially to $288.7 million, driven by declines in product and service sales, offset by a 119.2% surge in rental revenue Q2 2025 Revenue Breakdown (vs. Q1 2025) | Revenue Category | Q2 2025 | Q1 2025 | Change (%) | | :--- | :--- | :--- | :--- | | Product Sales | $126.3M | $139.6M | (9.6)% | | Service Sales | $146.4M | $150.6M | (2.8)% | | Rental Revenue | $16.0M | $7.3M | 119.2% | | Total Sales | $288.7M | $297.6M | (3.0)% | - Sales volumes decreased by approximately 4.0% sequentially to 5.4 million tons in the second quarter of 2025[7] - Cost of sales (excluding D&A) decreased by 4.9% sequentially to $195.9 million, while SG&A expenses remained consistent at $34.4 million[9][10] Liquidity and Capital Returns As of June 30, 2025, Atlas had total liquidity of $203.6 million, comprising cash and credit facility availability, and declared a $0.25 per share quarterly dividend - Total liquidity was $203.6 million as of June 30, 2025, which included $78.8 million in cash and cash equivalents and $124.8 million available under the 2023 ABL Credit Facility[11] - The Board of Directors declared a quarterly dividend of $0.25 per common share, totaling approximately $30.9 million, payable on August 21, 2025[12] Business Outlook Management anticipates a modest decline in Q3 2025 consolidated revenue and adjusted EBITDA, driven by lower average proppant sales prices and reduced shortfall payments - Guidance for Q3 2025 indicates an expected modest decline in consolidated revenue and adjusted EBITDA[14] - The decline is anticipated as a sequential increase in proppant sales volume and Power segment contribution will be offset by a decrease in average proppant sales prices and shortfall payments[14] Consolidated Financial Statements Condensed Consolidated Statements of Income The company reported a net loss of $5.6 million for Q2 2025, resulting in a diluted loss per share of $0.04, primarily due to lower gross profit and higher interest expense Selected Income Statement Data (in thousands, except per share data) | Account | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Total revenue | $288,676 | $297,591 | $287,518 | | Gross profit | $52,139 | $54,528 | $60,355 | | Operating income | $7,193 | $15,331 | $28,223 | | Net income (loss) | ($5,558) | $1,219 | $14,837 | | Diluted net income (loss) per share | ($0.04) | $0.01 | $0.13 | Condensed Consolidated Statements of Cash Flows In Q2 2025, net cash provided by operating activities was $88.6 million, with $40.3 million used in investing and $38.2 million in financing activities, ending with $78.8 million cash Summary of Cash Flows (in thousands) | Activity | Q2 2025 | Q1 2025 | Q2 2024 | | :--- | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $88,642 | ($7,450) | $60,856 | | Net cash used in investing activities | ($40,268) | ($228,502) | ($115,790) | | Net cash provided by (used in) financing activities | ($38,239) | $232,922 | ($27,463) | | Net increase (decrease) in cash | $10,135 | ($3,030) | ($82,397) | | Cash and cash equivalents, end of period | $78,809 | $68,674 | $104,723 | Condensed Consolidated Balance Sheets As of June 30, 2025, total assets increased to $2.25 billion, total liabilities rose to $976.4 million, and total stockholders' equity grew to $1.27 billion Selected Balance Sheet Data (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total current assets | $334,459 | $289,418 | | Total assets | $2,247,775 | $1,972,652 | | Total current liabilities | $214,748 | $243,065 | | Total liabilities | $976,443 | $936,096 | | Total stockholders' equity | $1,271,332 | $1,036,556 | Non-GAAP Financial Measures and Reconciliations Explanation of Non-GAAP Measures The company uses non-GAAP measures like Adjusted EBITDA and Adjusted Free Cash Flow to assess core operating performance and cash generation, adjusting for non-recurring and non-cash items - Adjusted EBITDA is defined as net income excluding depreciation, depletion and accretion, amortization, interest expense, income tax, stock-based compensation, and other specified non-recurring costs[29] - Adjusted Free Cash Flow is defined as Adjusted EBITDA less Maintenance Capital Expenditures and is used to measure the business's ability to generate cash[29] Reconciliation of Net Income to Adjusted EBITDA and Adjusted Free Cash Flow For Q2 2025, Atlas reconciled its net loss of $5.6 million to an Adjusted EBITDA of $70.5 million, resulting in an Adjusted Free Cash Flow of $48.9 million after maintenance capital expenditures Q2 2025 Reconciliation of Net Income to Adjusted Free Cash Flow (in thousands) | Line Item | Q2 2025 | | :--- | :--- | | Net income (loss) | ($5,558) | | Depreciation, depletion and accretion | $41,717 | | Amortization of intangibles | $6,465 | | Interest expense | $14,955 | | Income tax benefit | ($1,677) | | Stock-based compensation | $8,290 | | Other non-recurring & acquisition costs | $6,267 | | Adjusted EBITDA | $70,459 | | Maintenance Capital Expenditures | ($21,589) | | Adjusted Free Cash Flow | $48,870 | Reconciliation of Net Cash Provided by Operating Activities to Adjusted Free Cash Flow The company reconciled its Q2 2025 net cash provided by operating activities of $88.6 million to Adjusted Free Cash Flow of $48.9 million, adjusting for changes in operating assets, liabilities, and capital expenditures Q2 2025 Reconciliation of Operating Cash Flow to Adjusted Free Cash Flow (in thousands) | Line Item | Q2 2025 | | :--- | :--- | | Net cash provided by operating activities | $88,642 | | Change in operating assets and liabilities | ($35,232) | | Cash interest expense | $13,459 | | Maintenance capital expenditures | ($21,589) | | Other adjustments | ($3,412) | | Adjusted Free Cash Flow | $48,870 | Other Reconciliations This section provides supplemental reconciliations for key non-GAAP inputs, including property, plant, and equipment purchases to Maintenance Capital Expenditures, and GAAP income tax benefit to current income tax expense - For Q2 2025, total purchases of property, plant, and equipment of $40.3 million were reconciled to Maintenance Capital Expenditures of $21.6 million after adjusting for working capital changes and excluding growth capital expenditures[35] - The GAAP income tax benefit of ($1,677) thousand was reconciled to a current income tax expense of $1,325 thousand by adjusting for deferred tax expense[37] - Net interest expense of $14,798 thousand was reconciled to cash interest expense of $13,459 thousand by adjusting for non-cash amortization of debt discount and financing costs[39] Other Information Conference Call Information The company will host a conference call on August 5, 2025, at 9:00 am Central Time to discuss financial and operational results, with a live webcast and updated investor presentation available online About Atlas Energy Solutions Atlas Energy Solutions Inc. is an energy industry solutions provider offering oilfield logistics, distributed power systems, and a large proppant supply network in the Permian Basin, focusing on efficiency and shareholder value Cautionary Statement Regarding Forward-Looking Statements This press release contains forward-looking statements concerning the company's future financial performance, business strategy, and growth prospects, subject to numerous risks and uncertainties