Stocks scrambled for direction on Wednesday in a choppy trading session as volatility returned to Wall Street after the Federal Reserve left interest rates unchanged at the end of its two-day policy meeting.Inflation is still high, and the uncertainty over President Donald Trump’s tariffs has raised concerns over the economy’s health. Also, the U.S. economy shrank in the first quarter of 2025. This could keep markets volatile for a longer period.Given this situation, it would be wise to invest in defensive ...

Financial Data and Key Metrics Changes - Revenue increased by 7% in Q1 2025, with adjusted EBITDA rising by 14% and consolidated gross margins improving by one percentage point [7][15] - Net income grew by $12 million, while consolidated SG&A expenses decreased by 6% [7][19] - The company expects consolidated adjusted EBITDA to rise to between $68 million and $72 million in Q2 2025 [19] Business Line Data and Key Metrics Changes - Chemical Technologies saw a strong revenue growth of 21%, while Water Services experienced an 8% increase [7][18] - Water Infrastructure maintained a robust gross margin of 54%, despite a sequential revenue decline driven by legacy freshwater pipeline assets [7][16] - The Water Services segment's gross margins improved to 19.45% in Q1 2025, up from 16.4% in the previous quarter [18] Market Data and Key Metrics Changes - The Northern Delaware Basin now has over 1,000,000 acres under dedication or right of first refusal agreements, indicating a strong market position [9] - New Mexico represents 54% of the company's total fixed recycling capacity, showcasing significant growth in this area [12] - The company anticipates continued growth in the Permian Basin and other natural gas basins, despite potential macroeconomic pressures [10][66] Company Strategy and Development Direction - The company is focused on expanding its water infrastructure and enhancing its recycling capabilities, with several large contracts recently secured [8][25] - A strategic partnership for ultra-long-term municipal, industrial, and agricultural water supply in Colorado has been initiated [15] - The company aims to maintain a disciplined approach to leverage while funding capital projects and enhancing liquidity [15][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business despite macroeconomic pressures and potential activity dislocations [10][14] - The company expects continued growth in consolidated adjusted EBITDA of 6% to 12% during Q2 2025, with a focus on water infrastructure [13][19] - Management highlighted the importance of long-term contracts and full life cycle revenues for stability and growth [25] Other Important Information - The company implemented a new ERP system across all operations, which is expected to yield efficiencies over time [24] - Capital expenditures for 2025 are now expected to be between $225 million and $250 million, up from previous estimates [22] - The company is actively pursuing acquisition opportunities to enhance its asset base and operational capabilities [67] Q&A Session Summary Question: Activity levels in the Permian Basin - Management confirmed no pullback in activity levels in the Permian Basin to date, indicating confidence in their asset positioning [28][29] Question: Upcoming catalysts for AV Farms project - Management is engaging stakeholders and has letters of intent with potential customers, indicating strong demand and optimism for future revenue generation [30][32] Question: Role of CNA companies in AB Farms project - Management stated that Select will eventually take over operational roles while collaborating with CNA for commercialization [39][41] Question: Impact of tariffs on water infrastructure contracts - Management indicated that tariffs are not expected to materially impact water infrastructure projects due to domestic supply chains [45] Question: Supply chain resilience in Chemical Technologies - Management highlighted efforts to localize the supply chain, reducing reliance on international sourcing, particularly from China [46] Question: Future growth in water infrastructure - Management expects to maintain a double-digit growth trajectory in water infrastructure, supported by ongoing projects and contracts [52][56]