Select Water Solutions(US:WTTR) Prnewswireยท2024-07-30 20:15Core Viewpoint - Select Water Solutions, Inc. reported strong financial performance in Q2 2024, achieving significant revenue growth and improved profitability, particularly in its Water Infrastructure segment, despite challenges in the broader macro environment [1][2][4]. Financial Performance - Revenue for Q2 2024 was $365.1 million, slightly down from $366.5 million in Q1 2024 and $404.6 million in Q2 2023 [2][11]. - Net income increased to $14.9 million in Q2 2024, compared to $3.9 million in Q1 2024 and $22.6 million in Q2 2023 [2][11]. - Gross profit for Q2 2024 was $60.2 million, up from $52.7 million in Q1 2024, but slightly down from $61.2 million in Q2 2023 [2][11]. - Total gross margin improved to 16.5% in Q2 2024 from 14.4% in Q1 2024 and 15.1% in Q2 2023 [2][11]. Segment Performance - The Water Infrastructure segment generated revenues of $68.6 million in Q2 2024, up from $63.5 million in Q1 2024 and $55.3 million in Q2 2023, with gross margin before D&A reaching 51.0% [4][11]. - The Chemical Technologies segment saw revenues decline to $66.6 million in Q2 2024 from $74.7 million in Q1 2024 and $84.8 million in Q2 2023, with gross margin before D&A at 16.4% [4][11]. Cash Flow and Capital Expenditures - Operating cash flow for Q2 2024 was $83.1 million, significantly higher than $32.1 million in Q1 2024 but lower than $102.0 million in Q2 2023 [5][12]. - Free cash flow for Q2 2024 was $37.4 million, with net capital expenditures of $45.7 million [5][12]. - The company expects net capital expenditures for 2024 to be between $170 million and $190 million, reflecting increased growth capex [1][5]. Business Development - The company closed on the acquisition of disposal assets for $9 million in Q2 2024, enhancing its Northeast disposal capacity [1][8]. - Select contracted multiple new pipeline gathering, recycling, and disposal infrastructure projects in the Permian Basin, with anticipated capital deployment of $55 million to $60 million [1][7]. - The company signed long-term contracts for produced water gathering and recycling, expanding its existing infrastructure and increasing dedication to 81,000 acres [7][8]. Outlook - For Q3 2024, the company expects segment revenue to decline by mid-to-high single-digit percentages, with gross margins before D&A anticipated to hold steady at 22% to 23% [4][11]. - The Water Infrastructure segment is expected to see revenue growth driven by increased recycling business and contributions from recent acquisitions [4][11].