Select Water Solutions(US:WTTR)2025-11-05 21:31Financial Performance - Total revenue for Q3 2025 was $322,243,000, a decrease of 13.2% from $371,349,000 in Q3 2024[16] - Water Services revenue decreased to $166,877,000 in Q3 2025 from $234,019,000 in Q3 2024, representing a decline of 28.7%[16] - Gross profit for Q3 2025 was $43,554,000, down 30.3% from $62,449,000 in Q3 2024[16] - Net income attributable to Select Water Solutions, Inc. for Q3 2025 was $2,683,000, a decrease of 83.0% compared to $15,791,000 in Q3 2024[16] - The net income for the three months ended September 30, 2025, was $2.683 million, compared to $32.284 million for the same period in 2024, indicating a significant decrease of approximately 91.7%[22] - Net income for the nine months ended September 30, 2025, was $23,525,000, a decrease of 37.4% compared to $37,584,000 in the same period of 2024[24] - Total revenue for the nine months ended September 30, 2025, was $1.060842 billion, a decrease of 3.8% from $1.103028 billion in the prior year[172] Assets and Liabilities - Total assets increased to $1,588,151,000 as of September 30, 2025, up from $1,366,282,000 at the end of 2024, reflecting a growth of 16.2%[14] - Long-term debt increased significantly to $285,440,000 in Q3 2025 from $85,000,000 in Q4 2024, marking a rise of 235.7%[14] - Total liabilities rose to $656,496,000 as of September 30, 2025, compared to $450,748,000 at the end of 2024, an increase of 45.6%[14] - Cash and cash equivalents decreased to $17,828,000 as of September 30, 2025, from $19,978,000 at the end of 2024, a decline of 10.8%[14] - The company’s accumulated deficit improved to $(184,578,000) as of September 30, 2025, from $(206,147,000) at the end of 2024[14] - As of September 30, 2025, the total stockholders' equity increased to $931.655 million from $915.534 million as of December 31, 2024, reflecting a growth of approximately 1.3%[20] Cash Flow and Investments - Net cash provided by operating activities decreased to $149,221,000 from $167,119,000, reflecting a decline of 10.7%[24] - Cash used in investing activities increased to $333,706,000, up 26.3% from $264,243,000 in the prior period[24] - The company made substantial investments in property and equipment, totaling $223,063,000, compared to $118,080,000 in the prior period, indicating a 88.9% increase[24] - The Company acquired Omni Environmental Solutions for a total consideration of $46.145 million, including $17.747 million in cash and 862,069 shares of Class A common stock[57] - The Company made asset acquisitions in the Permian Basin and Northeast region for a total of $23.4 million and $1.0 million, respectively, improving disposal capacity and infrastructure connectivity[62] Segment Performance - The Water Infrastructure segment generated revenue of $233.766 million, while the Water Services segment generated $614.914 million, and the Chemical Technologies segment contributed $221.895 million for the nine months ended September 30, 2025[172] - The Water Services segment reported the highest revenue of $169.014 million for the three months ended September 30, 2025, while the Water Infrastructure segment generated $79.877 million[171] - The company emphasized the importance of segment EBITDA as a key profitability measure for decision-making, with total EBITDA for the three months ended September 30, 2025, reported at $53.579 million[170] Debt and Financing - The company entered into a $550 million sustainability-linked senior secured credit facility, which includes $300 million in revolving commitments and $250 million in term commitments[82] - As of September 30, 2025, the Company had $305.0 million in borrowings outstanding under the Sustainability-Linked Credit Facility and $85.0 million under the Prior Sustainability-Linked Credit Facility[108] - The Company incurred $7.9 million of debt issuance costs in connection with the entry into the Sustainability-Linked Credit Facility[110] - The Company was in compliance with all debt covenants as of September 30, 2025[111] Tax and Regulatory Matters - The effective tax rate for the three months ended September 30, 2025, was 5.8%, compared to 24.2% for the same period in 2024, indicating a significant decrease in tax expense[157] - The Company anticipates that the OBBBA will decrease its tax liabilities due to increased deductions available[159] - The recognized liability under the Tax Receivable Agreements could materially change based on various factors, including changes in economic projections and significant future transactions[155] Operational Highlights - The company generates most of its revenue through water-management services associated with well completions and ongoing produced water management[207] - The Chemical Technologies segment provides completion and specialty chemicals, with revenue based on the quantity of chemicals used[209] - The company is focusing on developing innovative water treatment and reuse services to meet sustainability goals[203] - Multi-well pad development and upstream acreage consolidation present significant opportunities for the company[202] Market Conditions - The average spot price of WTI crude oil decreased to $65.78 in the Current Quarter from $76.43 in the Prior Quarter, a decline of approximately 13.5%[196] - The average Henry Hub natural gas spot price increased to $3.03 in the Current Quarter from $2.11 in the Prior Quarter, an increase of approximately 43.7%[196] - Increased inflation has led to higher interest rates, affecting the cost of capital for the company and its customers[198] - The financial health of the oil and gas industry remains generally strong, with improvements in revenues, earnings, and debt metrics despite recent commodity price moderation[199]