Solaris Oilfield Infrastructure(US:SOI)2024-04-27 16:47Financial Data and Key Metrics Changes - The company generated $68 million in revenue and $23 million in adjusted EBITDA for the first quarter of 2024, with $14 million in free cash flow [36] - Operating cash flow was $17 million, with $3 million in capital expenditures, resulting in $14 million in free cash flow [5] - Total debt on the revolving credit facility remained at $30 million, with net debt at $27 million and approximately $41 million of available liquidity [5] Business Line Data and Key Metrics Changes - The annualized contribution margin per fully utilized system, excluding ancillary trucking services, improved by 4% sequentially, while the total annualized contribution margin, including ancillary services, improved by 7% to $1.1 million [6][7] - The company followed an average of 64 frac crews, which was flat compared to the previous quarter [5] Market Data and Key Metrics Changes - North American land activity is expected to be relatively flat in the second quarter, influenced by natural gas weakness and strong oil prices [1] - The company anticipates a 5% to 10% decrease in the number of frac crews followed in the second quarter compared to the first quarter average [1] Company Strategy and Development Direction - The company is focused on continuing to deliver innovative solutions to improve well site efficiency and enhance shareholder returns [4] - The company is committed to maintaining a strong shareholder return framework, with a focus on dividends and opportunistic share repurchases [37] - The company is evaluating organic and inorganic growth opportunities while maintaining a healthy balance sheet [37] Management's Comments on Operating Environment and Future Outlook - Management noted that while there is some softness in activity, they expect a resurgence in the industry as private equity firms reload capital and teams [8] - The company believes that its investments will lead to stronger earnings power and cash flow resilience compared to prior cycles [19] - Management expressed confidence in the ability to add value through addressing the growing nature of completions intensity with the right solutions [49] Other Important Information - The company has paid dividends for 22 consecutive quarters without a cut and has increased its per share dividend by 20% since inception [37] - The company is experiencing increased demand for electric frac fleets and related equipment, which aligns with industry trends towards electrification [47] Q&A Session Summary Question: Impact of silica deal on competitive landscape - Management indicated that the silica deal would not significantly impact the competitive landscape in the well site logistics business [2] Question: Use of cash going forward - Management stated that cash would be used for debt repayment, dividends, and share repurchases, with a focus on maintaining liquidity [14] Question: M&A opportunities in the service space - Management noted that while valuations are down, there are opportunities for M&A, particularly with unique technologies and protected markets [32]