Aris Water Solutions, Inc. (NYSE: ARIS) (“Aris,” “Aris Water” or
the “Company”) today announced financial and operating results for
the third quarter ended September 30, 2024.
THIRD QUARTER 2024
HIGHLIGHTS
- Increased produced water volumes 2% sequentially and 6% versus
the third quarter of 2023
- Increased recycled water volumes 25% sequentially and 16%
versus the third quarter of 2023
- Achieved net income of $16.4 million, a 34% increase versus the
third quarter of 2023
- Generated Adjusted EBITDA1 of $54.3 million, up 9% sequentially
and up 21% versus the third quarter of 2023
- Achieved Gross Margin per barrel of $0.32 and Adjusted
Operating Margin per barrel2 of $0.45, a 13% increase in Adjusted
Operating Margin per barrel2 versus the third quarter of 2023
- Maintained a strong balance sheet with quarter-end leverage3 of
2.0X and $292 million of available liquidity under our revolving
credit facility
- Increasing our 2024 Adjusted EBITDA1 outlook to $208 to $212
million
- Full year 2024 Capital Expenditure4 guidance of $98 to $105
million, consistent with prior guidance
“Aris had an exceptional third quarter as we continued to grow
our produced water volumes, increased our recycled water sales, and
maintained our strong margins. As we anticipated, our capital
investment to support these increased activity levels was primarily
deployed in the first half of the year and our capital spending in
the third quarter declined significantly. We continue to experience
steady volume growth and increasing cash generation. We anticipate
a strong finish to the year and are extremely proud of our team’s
efforts and results,” said Amanda Brock, President and CEO of
Aris.
“In addition to the great results in our core business, we
continue to collaborate with major operators to accelerate the
beneficial reuse of treated produced water outside of the oil and
gas industry. By year end, Aris and its partners will finish
testing the third of three desalination technologies for the
treatment of high salinity produced water. The pilot projects thus
far have successfully demonstrated the ability over time to lower
energy consumption costs and potential capital and operating costs
for the treatment of produced water. In 2025, we will be focused on
increasing the scale of these promising technologies and confirming
costs as we progress to commercialization.
We also continue to evaluate commercial opportunities for
mineral extraction from our produced water stream and are currently
selecting a site for an iodine extraction facility with a strategic
partner. We have also been approached by mineral extraction
companies who specialize in magnesium, ammonia, and lithium. In
2025, we expect to have further updates relating to future
potential revenues.
We are also progressing other strategic initiatives to further
lower our cost structure, deepen our relationships with our
existing customers and further diversify our customer base. We are
extremely excited about our progress and look forward to sharing
more details in the coming quarters.”
OPERATIONS
UPDATE
Three Months Ended
Three Months Ended
September 30,
June 30,
% Change
September 30,
% Change
2024
2024
2023
(thousands of barrels of water per
day)
Total Volumes
1,577
1,455
8
%
1,516
4
%
Produced Water Handling Volumes
1,118
1,093
2
%
1,056
6
%
Water Solutions Volumes
Recycled Produced Water Volumes Sold
393
314
25
%
339
16
%
Groundwater Volumes Sold
66
48
38
%
121
(45
)%
Total Water Solutions Volumes
459
362
27
%
460
—
%
Skim oil recoveries (barrels of oil per
day)
1,769
1,490
19
%
1,125
57
%
Skim oil recoveries (as a % of produced
water volumes)
0.16
%
0.14
%
14
%
0.11
%
45
%
FINANCIAL UPDATE
Net income was $16.4 million for the third quarter of 2024
versus net income of $12.2 million in the third quarter of 2023 and
net income of $13.1 million in the second quarter of 2024. Adjusted
Net Income1 was $21.0 million for the third quarter of 2024 versus
$13.9 million for the third quarter of 2023 and $17.3 million in
the second quarter of 2024.
Adjusted EBITDA1 was $54.3 million for the third quarter of
2024, up approximately 21% from $44.9 million in the third quarter
of 2023, and up approximately 9% from $50.0 million in the second
quarter of 2024.
Gross Margin per Barrel for the third quarter of 2024 was $0.32
per barrel versus $0.26 per barrel in the third quarter of
2023.
Adjusted Operating Margin per Barrel2 for the third quarter of
2024 was $0.45 per barrel versus $0.40 per barrel in the third
quarter of 2023.
Third quarter 2024 Capital Expenditures4 totaled approximately
$8 million versus $40 million in the third quarter of 2023.
STRONG BALANCE SHEET AND
LIQUIDITY
As of September 30, 2024, the Company had net debt of
approximately $422 million with $33 million in cash and $292
million available under its revolving credit facility. The
Company’s leverage ratio3 at the end of the third quarter of 2024
was 2.0X, below the Company’s target leverage of 2.5X – 3.5X.
FOURTH QUARTER 2024
DIVIDEND
Aris’s Board of Directors declared a dividend on its Class A
common stock for the fourth quarter of 2024 of $0.105 per share. In
conjunction with the dividend payment, a distribution of $0.105 per
unit will be paid to unit holders of Solaris Midstream Holdings,
LLC. The dividend will be paid on December 19, 2024, to holders of
record of the Company’s Class A common stock as of the close of
business on December 5, 2024. The distribution to unit holders of
Solaris Midstream Holdings, LLC will be subject to the same payment
and record dates.
FOURTH QUARTER 2024 FINANCIAL
OUTLOOK
“With three quarters now behind us, 2024 is shaping up to be a
record year for volumes, performance, and profitability. Based on
customers’ projected activity, we anticipate our growth will
continue through year-end on our dedicated acreage. Accordingly, we
are increasing our full year Adjusted EBITDA range to $208 to $212
million. Additionally, our forecasted capital expenditures for the
full year remain unchanged. We expect continued strong cash
generation to further enhance our balance sheet and support
increased shareholder returns over the long term.
Turning to 2025, we anticipate produced water volume growth in
line with our 2024 produced water volume growth and consistent with
oil production forecasts for the Delaware Basin. Our customers
continue to allocate significant capital to developing our
dedicated acreage. Our capital investment plans for next year will
depend on the growth rate of our customers as well as incremental
commercial opportunities. We currently anticipate, however, that we
will be able to grow alongside our existing customers at a similar
or lower level of capital investment to 2024.
We have made tremendous improvements in our margins this year
due to revenue escalation clauses in our contracts,
electrification, and cost reductions. Additionally, our operational
focus on skim oil recoveries led to significant increases in skim
oil yield in 2024. While there will be variability quarter to
quarter, we expect much of those increases to be sustainable in
2025 and beyond.
Consistent volume growth, additional margin progress, and
efficient capital investment in 2025 will provide us with increased
flexibility to allocate capital to both shareholder returns and
incremental growth projects. We are extremely optimistic about next
year and beyond.”
For the fourth quarter of 2024, the Company expects:
- Produced Water Handling volumes between 1,080 and 1,110
thousand barrels of water per day
- Water Solutions volumes between 450 and 490 thousand barrels of
water per day
- Adjusted Operating Margin per Barrel2 between $0.43 and
$0.45
- Skim oil recoveries of approximately 1,550 barrels per day
- Adjusted EBITDA1 between $51 and $55 million
- Capital Expenditures4 of $15 to $22 million, consistent with
previous full year 2024 guidance
CONFERENCE CALL
Aris will host a conference call to discuss its third quarter
2024 results on Tuesday, November 5, 2024, at 8:00 a.m. Central
Time (9:00 a.m. Eastern Time).
Participants should call (877) 407-5792 and refer to Aris Water
Solutions, Inc. when dialing in. Participants are encouraged to log
in to the webcast or dial in to the conference call approximately
ten minutes prior to the start time. To listen via live webcast,
please visit the Investor Relations section of the Company’s
website, www.ariswater.com.
An audio replay of the conference call will be available shortly
after the conclusion of the call and will remain available for
approximately fourteen days. It can be accessed by dialing (877)
660-6853 within the United States or (201) 612-7415 outside of the
United States. The conference call replay access code is
13749151.
About Aris Water Solutions,
Inc.
Aris Water Solutions, Inc. is a leading, growth-oriented
environmental infrastructure and solutions company that directly
helps its customers reduce their water and carbon footprints. Aris
Water delivers full-cycle water handling and recycling solutions
that increase the sustainability of energy company operations. Its
integrated pipelines and related infrastructure create long-term
value by delivering high-capacity, comprehensive produced water
management, recycling and supply solutions to operators in the core
areas of the Permian Basin.
_______________ 1 Adjusted Net Income, Adjusted EBITDA, and
Diluted Adjusted Net Income per Share are non-GAAP financial
measures. See the supplementary schedules in this press release for
a discussion of how we define and calculate Adjusted Net Income,
Adjusted EBITDA, and Diluted Adjusted Net Income per Share and a
reconciliation thereof to net income, the most directly comparable
GAAP measure. 2 Adjusted Operating Margin per Barrel is a non-GAAP
financial measure. See the supplementary schedules in this press
release for a discussion of how we define and calculate Adjusted
Operating Margin per Barrel and a reconciliation thereof to gross
margin, the most directly comparable GAAP measure. 3 Represents a
non-GAAP financial measure. Defined as net debt as of September 30,
2024, divided by trailing twelve months Adjusted EBITDA. Net debt
is calculated as total debt less cash and cash equivalents. See the
supplementary schedules in this press release for a reconciliation
to the most directly comparable GAAP measure. 4 Capital
Expenditures is a non-GAAP financial measure. See the supplementary
schedules in this press release for a discussion of how we define
and calculate Capital Expenditures and a reconciliation thereof to
cash paid for property, plant, and equipment, the most directly
comparable GAAP measure.
Forward-Looking Statements
This press release contains “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Examples of forward-looking statements include, but are
not limited to, statements, information, opinions or beliefs
regarding our business strategy, our industry, our future
profitability, business and financial performance, including our
guidance for 2024, current and potential future long-term
contracts, legal and regulatory developments, our ability to
identify strategic acquisitions and realize expected benefits
therefrom, the development of technologies for the beneficial reuse
of produced water and related strategies, plans, objectives and
strategic pursuits and other statements that are not historical
facts. In some cases, you can identify forward-looking statements
by terminology such as “anticipate,” “guidance,” “preliminary,”
“project,” “estimate,” “expect,” “anticipate,” “continue,”
“sustain,” “will,” “intend,” “strive,” “plan,” “goal,” “target,”
“believe,” “forecast,” “outlook,” “future,” “potential,”
“opportunity,” “predict,” “may,” “visibility,” “possible,”
“should,” “could” and variations of such words or similar
expressions. Forward-looking statements are based on our current
expectations and assumptions regarding our business, the economy
and other future conditions. Because forward-looking statements
relate to the future, by their nature, they are subject to inherent
uncertainties, risks and changes in circumstances that are
difficult to predict. As a result, our actual results may differ
materially from those contemplated or implied by the
forward-looking statements including our guidance for 2024. Factors
that could cause our actual results to differ materially from the
results contemplated by such forward-looking statements include,
but are not limited to, energy prices, the Russia-Ukraine and
Middle Eastern conflicts, macroeconomic conditions (such as
inflation) and market uncertainty related thereto, legislative and
regulatory developments, customer plans and preferences, adverse
results from litigation and the use of financial resources for
litigation defense, technological innovations and developments, and
other events discussed or referenced in our filings made from time
to time with the Securities and Exchange Commission (“SEC”),
including such factors discussed under “Risk Factors” in our most
recent Annual Report on Form 10-K, and if applicable, our
subsequent SEC filings, which are available on our Investor
Relations website at https://ir.ariswater.com/sec-filings or on the
SEC’s website at www.sec.gov/edgar. Readers are cautioned not to
place undue reliance on forward-looking statements, which speak
only as of the date hereof. All forward-looking statements,
expressed or implied, included in this press release and any oral
statements made in connection with this press release are expressly
qualified in their entirety by the foregoing cautionary statements.
We undertake no obligation to update or revise any forward-looking
statement, whether as a result of new information, future
developments or otherwise, except as may be required by law.
Table 1
Aris Water Solutions,
Inc.
Condensed Consolidated
Statements of Operations
(Unaudited)
(in thousands, except for share and
Three Months Ended
Nine Months Ended
per share amounts)
September 30,
September 30,
2024
2023
2024
2023
Revenue
Produced Water Handling
$
59,006
$
47,574
$
172,927
$
143,390
Produced Water Handling — Affiliate
29,418
28,036
84,859
74,357
Water Solutions
16,600
20,370
42,097
49,180
Water Solutions — Affiliate
4,225
3,048
12,920
19,195
Other Revenue
3,063
761
4,032
1,871
Total Revenue
112,312
99,789
316,835
287,993
Cost of Revenue
Direct Operating Costs
46,553
44,687
126,393
132,978
Depreciation, Amortization and
Accretion
19,974
19,445
59,102
57,137
Total Cost of Revenue
66,527
64,132
185,495
190,115
Operating Costs and Expenses
Abandoned Well Costs
8
1,214
318
1,214
General and Administrative
17,415
13,526
47,953
38,007
Research and Development Expense
408
809
2,601
1,867
Other Operating (Income) Expense, Net
(358
)
(2,121
)
379
(2,096
)
Total Operating Expenses
17,473
13,428
51,251
38,992
Operating Income
28,312
22,229
80,089
58,886
Other Expense
Interest Expense, Net
9,382
7,955
26,633
23,587
Other
—
—
1
—
Total Other Expense
9,382
7,955
26,634
23,587
Income Before Income Taxes
18,930
14,274
53,455
35,299
Income Tax Expense
2,499
2,032
7,082
4,918
Net Income
16,431
12,242
46,373
30,381
Net Income Attributable to Noncontrolling
Interest
8,943
6,829
25,297
16,892
Net Income Attributable to Aris Water
Solutions, Inc.
$
7,488
$
5,413
$
21,076
$
13,489
Net Income Per Share of Class A Common
Stock
Basic
$
0.23
$
0.17
$
0.64
$
0.42
Diluted
$
0.22
$
0.17
$
0.64
$
0.42
Weighted Average Shares of Class A Common
Stock Outstanding
Basic
30,631,995
30,050,560
30,511,701
30,007,433
Diluted
30,919,575
30,050,560
30,621,195
30,007,433
Table 2
Aris Water Solutions,
Inc.
Condensed Consolidated Balance
Sheets
(Unaudited)
(in thousands, except for share and per
share amounts)
September 30,
December 31,
2024
2023
Assets
Cash
$
32,760
$
5,063
Accounts Receivable, Net
69,854
59,393
Accounts Receivable from Affiliate
31,192
22,963
Other Receivables
15,292
12,767
Prepaids and Deposits
4,459
8,364
Total Current Assets
153,557
108,550
Fixed Assets
Property, Plant and Equipment
1,125,295
1,041,703
Accumulated Depreciation
(150,867
)
(121,989
)
Total Property, Plant and Equipment,
Net
974,428
919,714
Intangible Assets, Net
204,487
232,277
Goodwill
34,585
34,585
Deferred Income Tax Assets, Net
15,966
22,634
Operating Lease Right-of-Use Assets,
Net
15,650
16,726
Other Assets
5,986
5,995
Total Assets
$
1,404,659
$
1,340,481
Liabilities and Stockholders'
Equity
Accounts Payable
$
13,510
$
25,925
Payables to Affiliate
938
894
Insurance Premium Financing Liability
—
5,463
Accrued and Other Current Liabilities
74,830
64,416
Total Current Liabilities
89,278
96,698
Long-Term Debt, Net of Debt Issuance
Costs
452,194
421,792
Asset Retirement Obligations
21,499
19,030
Tax Receivable Agreement Liability
98,274
98,274
Other Long-Term Liabilities
16,650
16,794
Total Liabilities
677,895
652,588
Stockholders' Equity
Preferred Stock $0.01 par value,
50,000,000 authorized. None issued or outstanding as of September
30, 2024 and December 31, 2023
—
—
Class A Common Stock $0.01 par value,
600,000,000 authorized, 31,139,032 issued and 30,582,305
outstanding as of September 30, 2024; 30,669,932 issued and
30,251,613 outstanding as of December 31, 2023
311
306
Class B Common Stock $0.01 par value,
180,000,000 authorized, 27,543,565 issued and outstanding as of
September 30, 2024 and December 31, 2023
275
275
Treasury Stock (at Cost), 556,727 shares
as of September 30, 2024; 418,319 shares as of December 31,
2023
(6,822
)
(5,133
)
Additional Paid-in-Capital
337,609
328,543
Retained Earnings (Accumulated
Deficit)
11,332
(87
)
Total Stockholders' Equity Attributable to
Aris Water Solutions, Inc.
342,705
323,904
Noncontrolling Interest
384,059
363,989
Total Stockholders' Equity
726,764
687,893
Total Liabilities and Stockholders'
Equity
$
1,404,659
$
1,340,481
Table 3
Aris Water Solutions,
Inc.
Condensed Consolidated
Statements of Cash Flows
(Unaudited)
Nine Months Ended
(in thousands)
September 30,
2024
2023
Cash Flow from Operating
Activities
Net Income
$
46,373
$
30,381
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities
Deferred Income Tax Expense
5,730
4,773
Depreciation, Amortization and
Accretion
59,102
57,137
Stock-Based Compensation8
13,489
8,945
Abandoned Well Costs
318
1,214
Loss (Gain) on Disposal of Assets, Net
84
(2,574
)
Abandoned Projects
823
128
Amortization of Debt Issuance Costs,
Net
2,193
1,580
Other
422
(473
)
Changes in Operating Assets and
Liabilities:
Accounts Receivable
(11,039
)
22,594
Accounts Receivable from Affiliate
(8,229
)
22,771
Other Receivables
(3,168
)
(13,359
)
Prepaids and Deposits
4,056
3,564
Accounts Payable
(8,418
)
(155
)
Payables to Affiliate
44
(1,844
)
Accrued Liabilities and Other
9,445
17,843
Net Cash Provided by Operating
Activities
111,225
152,525
Cash Flow from Investing
Activities
Property, Plant and Equipment
Expenditures
(87,201
)
(131,874
)
Proceeds from the Sale of Property, Plant
and Equipment
160
20,119
Net Cash Used in Investing
Activities
(87,041
)
(111,755
)
Cash Flow from Financing
Activities
Dividends and Distributions Paid
(18,192
)
(16,083
)
Repurchase of Shares
(1,418
)
(625
)
Repayment of Credit Facility
(40,000
)
(51,000
)
Proceeds from Credit Facility
69,000
50,000
Payment of Insurance Premium Financing
(5,634
)
—
Payment of Finance Leases
(243
)
—
Net Cash Provided by (Used in)
Financing Activities
3,513
(17,708
)
Net Increase in Cash
27,697
23,062
Cash, Beginning of Period
5,063
1,122
Cash, End of Period
$
32,760
$
24,184
Use of Non-GAAP Financial
Information
The Company uses financial measures that are not calculated in
accordance with U.S. generally accepted accounting principles
(“GAAP”), including Adjusted EBITDA, Adjusted Operating Margin,
Adjusted Operating Margin per Barrel, Adjusted Net Income, net debt
and leverage ratio, and Capital Expenditures. Although these
Non-GAAP financial measures are important factors in assessing the
Company’s operating results and cash flows, they should not be
considered in isolation or as a substitute for net income or gross
margin or any other measures prepared under GAAP.
The Company calculates Adjusted EBITDA as net income (loss)
plus: interest expense; income taxes; depreciation, amortization
and accretion expense; abandoned well costs, asset impairment and
abandoned project charges; losses on the sale of assets;
transaction costs; research and development expense; change in
payables related to the Tax Receivable Agreement liability as a
result of state tax rate changes; loss on debt modification;
stock-based compensation expense; and other non-recurring or
unusual expenses or charges (such as litigation expenses, severance
costs and amortization expense related to the implementation costs
of our new enterprise resource planning system), less any gains on
the sale of assets.
The Company calculates Adjusted Operating Margin as Gross Margin
plus depreciation, amortization and accretion. The Company defines
Adjusted Operating Margin per Barrel as Adjusted Operating Margin
divided by total volumes handled, sold or transferred.
The Company calculates Adjusted Net Income as Net Income (Loss)
plus the after-tax impacts of stock-based compensation and plus or
minus the after-tax impacts of certain items affecting
comparability, which are typically noncash and/or nonrecurring
items. The Company calculated Diluted Adjusted Net Income Per Share
as (i) Net Income (Loss) plus the after-tax impacts of stock-based
compensation and plus or minus the after-tax impacts of certain
items affecting comparability, which are typically noncash and/or
nonrecurring items, divided by (ii) the diluted weighted-average
shares of Class A common stock outstanding, assuming the full
exchange of all outstanding LLC interests, adjusted for the
dilutive effect of outstanding equity-based awards.
For the quarter ended September 30, 2024, the Company calculates
its leverage ratio as net debt as of September 30, 2024, divided by
Adjusted EBITDA for the trailing twelve months. Net debt is
calculated as the principal amount of total debt outstanding as of
September 30, 2024, less cash and cash equivalents as of September
30, 2024.
The Company calculates Capital Expenditures as cash capital
expenditures for property, plant, and equipment additions less
changes in accrued capital costs.
The Company believes these presentations are used by investors
and professional research analysts for the valuation, comparison,
rating, and investment recommendations of companies within its
industry. Similarly, the Company’s management uses this information
for comparative purposes as well. Adjusted EBITDA, Adjusted
Operating Margin, Adjusted Operating Margin per Barrel, Adjusted
Net Income, and Capital Expenditures are not measures of financial
performance under GAAP and should not be considered as measures of
liquidity or as alternatives to net income (loss), gross margin, or
cash paid for property, plant and equipment. Additionally, these
presentations as defined by the Company may not be comparable to
similarly titled measures used by other companies and should be
considered in conjunction with net income (loss) and other measures
prepared in accordance with GAAP, such as gross margin, operating
income, net income, cash paid for property, plant, and equipment or
cash flows from operating activities.
Although we provide forecasts for the non-GAAP measures Adjusted
EBITDA, Adjusted Operating Margin per Barrel, and Capital
Expenditures, we are not able to forecast their most directly
comparable measures (net income, gross margin, and cash paid for
property, plant, and equipment) calculated and presented in
accordance with GAAP without unreasonable effort. Certain elements
of the composition of forward-looking GAAP metrics are not
predictable, making it impractical for us to forecast. Such
elements include but are not limited to non-recurring gains or
losses, unusual or non-recurring items, income tax benefit or
expense, or one-time transaction costs and cost of revenue, which
could have a significant impact on the GAAP measures. The
variability of the excluded items may have a significant, and
potentially unpredictable, impact on our future GAAP results. As a
result, no reconciliation of forecasted non-GAAP measures is
provided.
Table 4
Aris Water Solutions,
Inc.
Operating Metrics
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
June 30,
September 30,
2024
2023
2024
2024
2023
(thousands of barrels of water per
day)
Produced Water Handling Volumes
1,118
1,056
1,093
1,123
1,024
Water Solutions Volumes
Recycled Produced Water Volumes Sold
393
339
314
348
298
Groundwater Volumes Sold
66
121
48
47
141
Total Water Solutions Volumes
459
460
362
395
439
Total Volumes
1,577
1,516
1,455
1,518
1,463
Per Barrel Operating Metrics (1)
Produced Water Handling Revenue/Barrel
$
0.86
$
0.78
$
0.84
$
0.84
$
0.78
Water Solutions Revenue/Barrel
$
0.49
$
0.55
$
0.52
$
0.51
$
0.57
Revenue/Barrel of Total Volumes (2)
$
0.75
$
0.71
$
0.76
$
0.75
$
0.72
Direct Operating Costs/Barrel
$
0.32
$
0.32
$
0.30
$
0.30
$
0.33
Gross Margin/Barrel
$
0.32
$
0.26
$
0.31
$
0.32
$
0.24
Adjusted Operating Margin/Barrel
$
0.45
$
0.40
$
0.46
$
0.46
$
0.39
(1) Per Barrel operating metrics are
calculated independently. Therefore, the sum of individual amounts
may not equal the total presented.
(2) Does not include Other Revenue.
Table 5
Aris Water Solutions,
Inc.
Reconciliation of Net Income
to Non-GAAP Adjusted EBITDA
(Unaudited)
Three Months Ended
Nine Months Ended
(in thousands)
September 30,
September 30,
2024
2023
2024
2023
Net Income
$
16,431
$
12,242
$
46,373
$
30,381
Interest Expense, Net
9,382
7,955
26,633
23,587
Income Tax Expense
2,499
2,032
7,082
4,918
Depreciation, Amortization and
Accretion
19,974
19,445
59,102
57,137
Abandoned Well Costs
8
1,214
318
1,214
Stock-Based Compensation
5,275
3,360
13,489
8,945
Abandoned Projects
78
—
823
128
(Gain) Loss on Disposal of Assets, Net
(30
)
(2,631
)
84
(2,574
)
Transaction Costs
(36
)
528
60
673
Research and Development Expense
408
809
2,601
1,867
Other
318
(18
)
845
(612
)
Adjusted EBITDA
$
54,307
$
44,936
$
157,410
$
125,664
Table 6
Aris Water Solutions,
Inc.
Reconciliation of Gross Margin
to Adjusted Operating Margin and
Adjusted Operating Margin per
Barrel
(Unaudited)
Three Months Ended
Nine Months Ended
(in thousands)
September 30,
September 30,
2024
2023
2024
2023
Total Revenue
$
112,312
$
99,789
$
316,835
$
287,993
Cost of Revenue
(66,527
)
(64,132
)
(185,495
)
(190,115
)
Gross Margin
45,785
35,657
131,340
97,878
Depreciation, Amortization and
Accretion
19,974
19,445
59,102
57,137
Adjusted Operating Margin
$
65,759
$
55,102
$
190,442
$
155,015
Total Volumes (thousands of barrels)
145,069
139,429
416,044
399,525
Adjusted Operating Margin/BBL
$
0.45
$
0.40
$
0.46
$
0.39
Table 7
Aris Water Solutions,
Inc.
Reconciliation of Net Income
to Non-GAAP Adjusted Net Income
(Unaudited)
Three Months Ended
Nine Months Ended
(in thousands)
September 30,
September 30,
2024
2023
2024
2023
Net Income
$
16,431
$
12,242
$
46,373
$
30,381
Adjusted items:
Abandoned Well Costs
8
1,214
318
1,214
(Gain) Loss on Disposal of Assets, Net
(30
)
(2,631
)
84
(2,574
)
Stock-Based Compensation
5,275
3,360
13,489
8,945
Tax Effect of Adjusting Items (1)
(693
)
(257
)
(1,841
)
(1,003
)
Adjusted Net Income
$
20,991
$
13,928
$
58,423
$
36,963
(1) Estimated tax effect of adjusted items
allocated to Aris based on statutory rates.
Table 8
Aris Water Solutions,
Inc.
Reconciliation of Diluted Net
Income Per Share to Non-GAAP Diluted Adjusted Net Income Per
Share
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
Diluted Net Income Per Share of Class A
Common Stock
$
0.22
$
0.17
$
0.64
$
0.42
Adjusted items:
Reallocation of Net Income Attributable to
Noncontrolling Interests From the Assumed Exchange of LLC
Interests
0.04
0.03
0.11
0.08
Abandoned Well Costs
—
0.02
0.01
0.02
Gain on Disposal of Assets, Net
—
(0.05
)
—
(0.04
)
Stock-Based Compensation
0.09
0.06
0.23
0.16
Tax Effect of Adjusting Items (1)
(0.01
)
—
(0.03
)
(0.02
)
Diluted Adjusted Net Income Per Share
$
0.34
$
0.23
$
0.96
$
0.62
(1) Estimated tax effect of adjusted items
allocated to Aris based on statutory rates.
Basic Weighted Average Shares of Class A
Common Stock Outstanding
30,631,995
30,050,560
30,511,701
30,007,433
Adjusted Items:
Assumed Redemption of LLC Interests
27,543,565
27,550,626
27,543,565
27,557,774
Dilutive Performance-Based Stock Units
(2)
287,580
—
109,494
—
Diluted Adjusted Fully Weighted Average
Shares of Class A Common Stock Outstanding
58,463,140
57,601,186
58,164,760
57,565,207
(2) Dilutive impact of Performance-Based
Stock Units already included for the three and nine months ended
September 30, 2024 and 2023.
Table 9
Aris Water Solutions,
Inc.
Computation of Leverage
Ratio
(Unaudited)
As of
(in thousands)
September 30, 2024
Principal Amount of Debt at September 30,
2024
$
455,000
Less: Cash at September 30, 2024
(32,760
)
Net Debt
$
422,240
Net Debt
$
422,240
÷ Trailing Twelve Months Adjusted
EBITDA
206,718
Leverage Ratio
2.04
Table 10
Aris Water Solutions,
Inc.
Reconciliation of Capital
Expenditures
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
(in thousands)
2024
2023
2024
2023
Cash Paid for Property, Plant and
Equipment
$
30,322
$
53,893
$
87,201
$
131,874
Change in Capital Related Accruals
(22,144
)
(14,328
)
(3,961
)
4,753
Capital Expenditures
$
8,178
$
39,565
$
83,240
$
136,627
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241104315934/en/
David Tuerff Senior Vice President, Finance and Investor
Relations (281) 501-3070 IR@ariswater.com
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