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, 2023.
- Total water volumes of approximately 1.5 million barrels per
day for the third quarter of 2023, up 7% versus the third quarter
of 2022 and up 1% sequentially versus the second quarter of
2023.
- Produced Water volumes of approximately 1.06 million barrels
per day for the third quarter of 2023, up 17% versus the third
quarter of 2022 and up 1% sequentially versus the second quarter of
2023.
- Water Solutions volumes of approximately 460 thousand barrels
per day for the third quarter of 2023, down 10% versus the third
quarter of 2022 and up 2% sequentially versus the second quarter of
2023.
- Net income of $12.2 million for the third quarter of 2023, up
526% versus the third quarter of 2022 and up 17% sequentially
versus the second quarter of 2023. Adjusted Net Income1 of $13.9
million for the third quarter of 2023, up 5% versus the third
quarter of 2022 and up 6% sequentially versus the second quarter of
2023.
- Adjusted EBITDA1 of $44.9 million for the third quarter of
2023, up 14% versus the third quarter of 2022 and up 5%
sequentially versus the second quarter of 2023.
- Continued expansion of Adjusted Operating Margin per Barrel2,
both sequentially and year-over-year.
- Raising full year 2023 Adjusted EBITDA1 guidance to $166 - $170
million, the top end of previous guidance range.
- Full year capital expenditures3 expected to total between $160
million and $170 million, consistent with previous guidance.
- Divested non-core assets in Martin County, Texas for $20.1
million cash consideration.
“We had an excellent third quarter as we continued to execute on
our operating plan, expanded the reach of our infrastructure, and
improved profitability. We achieved year-over-year and sequential
volume growth while increasing margins as we recognized the
benefits of our operating cost reduction efforts. We expect the
positive momentum to continue in the fourth quarter and 2024, as we
continue to drive a culture of excellence across the organization,”
said Amanda Brock, Chief Executive Officer of Aris.
“Water handling is critical to the success of our customers’
long-term production growth plans in the Permian Basin. We remain
focused on delivering comprehensive water management solutions to
our customers while simultaneously advancing technologies for the
beneficial reuse of water outside of the oil and gas industry,
which holds the promise of further improving the sustainability of
our customers’ operations. Our produced water treatment pilot
project with ConocoPhillips, Chevron, and ExxonMobil is now fully
underway and testing several exciting technologies.
We are also engaging in preliminary conversations with several
third parties to explore commercialization of the minerals found in
our produced water. While we are still in the early stages, we are
encouraged by the data we have seen so far.”
OPERATIONS UPDATE
Three Months Ended
Three Months Ended
Three Months Ended
September 30,
June 30,
% Change
September 30,
% Change
2023
2023
2022
(thousands of barrels of water per
day)
Total Volumes
1,516
1,497
1
%
1,416
7
%
Produced Water Handling Volumes
1,056
1,045
1
%
905
17
%
Water Solutions Volumes
Recycled Produced Water Volumes Sold
339
296
15
%
345
(2
)
%
Groundwater Volumes Sold
121
156
(22
)
%
166
(27
)
%
Total Water Solutions Volumes
460
452
2
%
511
(10
)
%
Skim oil recoveries (bbls/d)
1,125
1,042
8
%
889
27
%
Skim oil recoveries (as a % of produced
water volumes)
0.11%
0.10%
10
%
0.10%
10
%
FINANCIAL UPDATE
Net income was $12.2 million for the third quarter of 2023
versus net income of $2.0 million in the third quarter of 2022 and
net income of $10.4 million in the second quarter of 2023. Adjusted
Net Income1 was $13.9 million for the third quarter of 2023 versus
$13.2 million for the third quarter of 2022 and $13.2 million in
the second quarter of 2023.
Adjusted EBITDA1 was $44.9 million for the third quarter of
2023, up approximately 14% from $39.3 million in the third quarter
of 2022, and up approximately 5% from $42.6 million in the second
quarter of 2023.
The Company had gross margin per barrel of $0.26 for the third
quarter of 2023 versus $0.23 in the third quarter of 2022 and $0.24
for the second quarter of 2023. The Company had Adjusted Operating
Margin per Barrel2 of $0.40 for the third quarter of 2023, versus
$0.36 in the third quarter of 2022 and $0.38 for the second quarter
of 2023.
Third quarter 2023 capital expenditures3 totaled approximately
$40 million versus $70 million in the third quarter of 2022, in
line with full year 2023 capital expenditure expectations of $160
to $170 million.
STRONG BALANCE SHEET AND
LIQUIDITY
As of September 30, 2023, the Company had approximately $24
million in cash and approximately $166 million available under its
revolving credit facility for total available liquidity of
approximately $190 million. As of September 30, 2023, the Company’s
leverage ratio was 2.53X, at the low end of its target leverage
range of 2.50X-3.50X4. Accounts Receivable balance of approximately
$81 million was down approximately 14% from the second quarter
while revenue grew 3% quarter-over-quarter, reflecting continued
improvements in working capital management.
On October 12, 2023, the Company entered into an amended and
restated credit agreement which provides for a $350 million senior
secured revolving credit facility with maturity extended through
October 2027. The facility, which was sized proportionate to the
Company’s growth since the prior facility was put in place, has
covenants and interest rates consistent with the prior credit
agreement.
FOURTH QUARTER 2023
DIVIDEND
On October 31, 2023, Aris’s Board of Directors declared a
dividend on its Class A common stock for the fourth quarter of 2023
of $0.09 per share. In conjunction with the dividend payment, a
distribution of $0.09 per unit will be paid to unit holders of
Solaris Midstream Holdings, LLC. The dividend will be paid on
December 21, 2023, to holders of record of the Company’s Class A
common stock as of the close of business on December 7, 2023. The
distribution to unit holders of Solaris Midstream Holdings, LLC
will be subject to the same payment and record dates.
FOURTH QUARTER 2023 FINANCIAL
OUTLOOK
“We are very pleased with the progress the team has made
year-to-date and we are on track to achieve the high-end of the
Adjusted EBITDA guidance we provided at the beginning of the year
and affirmed last quarter,” said Amanda Brock.
“As we look to the fourth quarter, we anticipate produced water
volumes to be up approximately 2–3%, adjusting for the impact of
the Martin County asset sale, and water solutions volumes to be
down moderately sequentially versus the third quarter due to the
pull-forward of activity we saw in the third quarter as well as
potential seasonal year-end slowdowns.
In terms of profitability, while we are pleased with the
progress we’ve made through the third quarter of this year, we will
continue to pursue additional cost-savings opportunities that can
further enhance margins.”
- For the fourth quarter of 2023, the Company expects:
- Produced Water Handling volumes between 1,045 and 1,055
thousand barrels of water per day which reflects the approximately
50 thousand barrels per day impact of the Martin County asset
divestiture
- Water Solutions volumes between 405 and 420 thousand barrels of
water per day
- Adjusted Operating Margin per Barrel2 between $0.39 and
$0.41
- Skim oil recoveries of 0.10% of inlet produced water handling
volumes at an average WTI price of $87 per barrel
- Adjusted EBITDA1 between $41 and $45 million, raising full year
2023 Adjusted EBITDA guidance to $166 - $170 million, the high-end
of previous full year 2023 guidance
- Capital expenditures between $24 and $34 million3, partially
offset by $20.1 million cash proceeds from the sale of non-core
assets
___________________________________
1
Adjusted EBITDA and Adjusted Net Income
are non-GAAP financial measures. See the supplementary schedules in
this press release for a discussion of how we define and calculate
Adjusted EBITDA and Adjusted Net Income 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
Calculated on capital costs incurred
during the period, excluding the impact of working capital.
4
Represents a non-GAAP financial measure.
Defined as net debt as of September 30, 2023, 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.
CONFERENCE CALL
Aris will host a conference call to discuss its third quarter
2023 results on Thursday, November 2, 2023, at 8:00 a.m. Central
Time (9:00 a.m. Eastern Time).
Participants should call (888) 428-7458 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. The replay can be accessed by dialing
(877) 660-6853 within the United States or (201) 612-7415 outside
of the United States. The access code is 13741339.
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.
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 2023, 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 2023. 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
Israel-Hamas conflicts, macroeconomic conditions (such as
inflation) and market uncertainty related thereto, legislative and
regulatory developments, customer plans and preferences,
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 presentation and any oral statements made in
connection with this presentation 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,
2023
2022
2023
2022
Revenue
Produced Water Handling
$
47,574
$
39,674
$
143,390
$
110,299
Produced Water Handling—Affiliate
28,036
24,796
74,357
69,084
Water Solutions
20,370
20,392
49,180
46,744
Water Solutions—Affiliate
3,048
5,668
19,195
11,640
Other Revenue
761
246
1,871
364
Total Revenue
99,789
90,776
287,993
238,131
Cost of Revenue
Direct Operating Costs
44,687
43,885
132,978
101,337
Depreciation, Amortization and
Accretion
19,445
16,942
57,137
49,724
Total Cost of Revenue
64,132
60,827
190,115
151,061
Operating Costs and Expenses
Abandoned Well Costs
1,214
9,222
1,214
14,637
General and Administrative
13,526
11,052
38,007
33,330
Impairment of Long-Lived Assets
—
—
—
15,597
Research and Development Expense
809
430
1,867
530
Other Operating (Income) Expense
(2,121
)
239
(2,096
)
1,816
Total Operating Expenses
13,428
20,943
38,992
65,910
Operating Income
22,229
9,006
58,886
21,160
Other Expense
Interest Expense, Net
7,955
6,763
23,587
21,863
Income (Loss) Before Income
Taxes
14,274
2,243
35,299
(703
)
Income Tax Expense (Benefit)
2,032
287
4,918
(81
)
Net Income (Loss)
12,242
1,956
30,381
(622
)
Net Income (Loss) Attributable to
Noncontrolling Interest
6,829
1,257
16,892
(493
)
Net Income (Loss) Attributable to Aris
Water Solutions, Inc.
$
5,413
$
699
$
13,489
$
(129
)
Net Income (Loss) Per Share of Class A
Common Stock
Basic
$
0.17
$
0.02
$
0.42
$
(0.03
)
Diluted
$
0.17
$
0.02
$
0.42
$
(0.03
)
Weighted Average Shares of Class A Common
Stock Outstanding
Basic
30,050,560
24,499,953
30,007,433
22,779,077
Diluted
30,050,560
24,546,632
30,007,433
22,779,077
Table 2
Aris Water Solutions,
Inc.
Condensed Consolidated Balance
Sheets
(Unaudited)
(in thousands, except for share and per
share amounts)
September 30,
December 31,
2023
2022
Assets
Cash
$
24,184
$
1,122
Accounts Receivable, Net
57,820
81,683
Accounts Receivable from Affiliate
23,296
46,029
Other Receivables
18,077
4,354
Prepaids and Deposits
2,241
5,805
Total Current Assets
125,618
138,993
Fixed Assets
Property, Plant and Equipment
1,021,516
907,784
Accumulated Depreciation
(112,151
)
(88,681
)
Total Property, Plant and Equipment,
Net
909,365
819,103
Intangible Assets, Net
241,550
269,845
Goodwill
34,585
34,585
Deferred Income Tax Assets, Net
25,783
30,424
Right-of-Use Assets
16,760
9,135
Other Assets
853
1,281
Total Assets
$
1,354,514
$
1,303,366
Liabilities and Stockholders'
Equity
Accounts Payable
$
30,974
$
22,982
Payables to Affiliate
1,177
3,021
Accrued and Other Current Liabilities
81,189
65,411
Total Current Liabilities
113,340
91,414
Long-Term Debt, Net of Debt Issuance
Costs
429,324
428,921
Asset Retirement Obligation
18,136
17,543
Tax Receivable Agreement Liability
98,164
97,980
Other Long-Term Liabilities
16,756
10,421
Total Liabilities
675,720
646,279
Stockholders' Equity
Preferred Stock $0.01 par value,
50,000,000 authorized. None issued or outstanding as of September
30, 2023 and December 31, 2022
—
—
Class A Common Stock $0.01 par value,
600,000,000 authorized, 30,334,399 issued and 30,023,826
outstanding as of September 30, 2023; 30,115,979 issued and
29,919,217 outstanding as of December 31, 2022
303
300
Class B Common Stock $0.01 par value,
180,000,000 authorized, 27,543,565 issued and outstanding as of
September 30, 2023; 27,575,519 issued and outstanding as of
December 31, 2022
275
276
Treasury Stock (at Cost), 310,573 shares
as of September 30, 2023; 196,762 shares as of December 31,
2022
(4,259
)
(2,891
)
Additional Paid-in-Capital
325,655
319,545
Accumulated Deficit
(2,683
)
(7,722
)
Total Stockholders' Equity Attributable to
Aris Water Solutions, Inc.
319,291
309,508
Noncontrolling Interest
359,503
347,579
Total Stockholders' Equity
678,794
657,087
Total Liabilities and Stockholders'
Equity
$
1,354,514
$
1,303,366
Table 3
Aris Water Solutions,
Inc.
Condensed Consolidated
Statements of Cash Flows
(Unaudited)
Nine Months Ended
(in thousands)
September 30,
2023
2022
Cash Flow from Operating
Activities
Net Income (Loss)
$
30,381
$
(622
)
Adjustments to reconcile Net Income (Loss)
to Net Cash provided by Operating Activities:
Deferred Income Tax Expense (Benefit)
4,773
(96
)
Depreciation, Amortization and
Accretion
57,137
49,724
Stock-Based Compensation
8,945
9,134
Impairment of Long-Lived Assets
—
15,597
Abandoned Well Costs
1,214
14,637
(Gain) Loss on Disposal of Assets, Net
(2,574
)
481
Amortization of Debt Issuance Costs,
Net
1,580
1,563
Other
(345
)
377
Changes in Operating Assets and
Liabilities:
Accounts Receivable
22,594
(33,683
)
Accounts Receivable from Affiliate
22,771
(5,581
)
Other Receivables
(13,359
)
(2,139
)
Prepaids and Deposits
3,564
4,215
Accounts Payable
(155
)
3,233
Payables to Affiliate
(1,844
)
913
Accrued Liabilities and Other
17,843
19,432
Net Cash Provided by Operating
Activities
152,525
77,185
Cash Flow from Investing
Activities
Property, Plant and Equipment
Expenditures
(131,874
)
(96,991
)
Cash Paid for Asset Acquisitions
-
(3,353
)
Proceeds from the Sale of Property, Plant
and Equipment
20,119
7,441
Net Cash Used in Investing
Activities
(111,755
)
(92,903
)
Cash Flow from Financing
Activities
Dividends and Distributions Paid
(16,083
)
(19,157
)
Repurchase of Shares
(625
)
—
Repayment of Credit Facility
(51,000
)
—
Proceeds from Credit Facility
50,000
—
Net Cash Used in Financing
Activities
(17,708
)
(19,157
)
Net Increase (Decrease) in Cash
23,062
(34,875
)
Cash, Beginning of Period
1,122
60,055
Cash, End of Period
$
24,184
$
25,180
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 and net
debt and leverage ratio. 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; loss on debt
modification; stock-based compensation expense; and other
non-recurring or unusual expenses or charges (such as temporary
power costs, litigation expenses and severance costs), less any
gains on sale of assets. For the fourth quarter of 2022, we began
including research and development expense in our calculation of
Adjusted EBITDA due to our new beneficial reuse pilot projects,
which are discreet, non-revenue initiatives.
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.
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, 2023, the Company calculates
its leverage ratio as net debt as of September 30, 2023, 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, 2023, less cash and cash equivalents as of September
30, 2023.
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, and
Adjusted Net Income are not measures of financial performance under
GAAP and should not be considered as measures of liquidity or as
alternatives to net income (loss) or gross margin. 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 or cash flows from operating activities.
Although we provide forecasts for the non-GAAP measures Adjusted
EBITDA and Adjusted Operating Margin per Barrel, we are not able to
forecast their most directly comparable measures (net income and
gross margin) calculated and presented in accordance with GAAP
without unreasonable effort. Certain elements of the composition of
forward-looking non-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,
September 30,
2023
2022
2023
2022
(thousands of barrels of water per
day)
Produced Water Handling Volumes
1,056
905
1,024
850
Water Solutions Volumes
Recycled Produced Water Volumes Sold
339
345
298
306
Groundwater Volumes Sold
121
166
141
112
Groundwater Volumes Transferred (1)
—
—
—
8
Total Water Solutions Volumes
460
511
439
426
Total Volumes
1,516
1,416
1,463
1,276
Per Barrel Operating Metrics (2)
Produced Water Handling Revenue/Barrel
$
0.78
$
0.77
$
0.78
$
0.77
Water Solutions Revenue/Barrel
$
0.55
$
0.55
$
0.57
$
0.50
Revenue/Barrel of Total Volumes
$
0.71
$
0.69
$
0.72
$
0.68
Direct Operating Costs/Barrel
$
0.32
$
0.34
$
0.33
$
0.29
Gross Margin/Barrel
$
0.26
$
0.23
$
0.24
$
0.25
Adjusted Operating Margin/Barrel
$
0.40
$
0.36
$
0.39
$
0.39
(1) The groundwater transfer assets were
sold in Q1 2022.
(2) Per Barrel operating metrics are
calculated independently. Therefore, the sum of individual amounts
may not equal the total presented.
Table 5
Aris Water Solutions,
Inc.
Reconciliation of Net Income
(Loss) to Non-GAAP Adjusted EBITDA
(Unaudited)
Three Months Ended
Nine Months Ended
(in thousands)
September 30,
September 30,
2023
2022
2023
2022
Net Income (Loss)
$
12,242
$
1,956
$
30,381
$
(622
)
Interest Expense, Net
7,955
6,763
23,587
21,863
Income Tax Expense (Benefit)
2,032
287
4,918
(81
)
Depreciation, Amortization and
Accretion
19,445
16,942
57,137
49,724
Abandoned Well Costs
1,214
9,222
1,214
14,637
Impairment of Long-Lived Assets
—
—
—
15,597
Stock-Based Compensation
3,360
3,595
8,945
9,134
(Gain) Loss on Disposal of Assets, Net
(2,631
)
(97
)
(2,574
)
481
Transaction Costs
528
336
673
1,269
Research and Development Expense
809
430
1,867
530
Other
(18
)
(105
)
(484
)
(139
)
Adjusted EBITDA
$
44,936
$
39,329
$
125,664
$
112,393
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,
2023
2022
2023
2022
Total Revenue
$
99,789
$
90,776
$
287,993
$
238,131
Cost of Revenue
(64,132
)
(60,827
)
(190,115
)
(151,061
)
Gross Margin
35,657
29,949
97,878
87,070
Depreciation, Amortization and
Accretion
19,445
16,942
57,137
49,724
Adjusted Operating Margin
$
55,102
$
46,891
$
155,015
$
136,794
Total Volumes (Thousands of BBLs)
139,429
130,267
399,525
348,315
Adjusted Operating Margin/BBL
$
0.40
$
0.36
$
0.39
$
0.39
Table 7
Aris Water Solutions,
Inc.
Reconciliation of Net Income
(Loss) to Non-GAAP Adjusted Net Income
(Unaudited)
Three Months Ended
Nine Months Ended
(in thousands)
September 30,
September 30,
2023
2022
2023
2022
Net Income (Loss)
$
12,242
$
1,956
$
30,381
$
(622
)
Adjusted items:
Impairment of Long-Lived Assets
—
—
—
15,597
Abandoned Well Costs
1,214
9,222
1,214
14,637
(Gain) Loss on Disposal of Assets, Net
(2,631
)
(97
)
(2,574
)
481
Stock-Based Compensation
3,360
3,595
8,945
9,134
Tax Effect of Adjusting Items (1)
(257
)
(1,460
)
(1,003
)
(4,575
)
Adjusted Net Income
$
13,928
$
13,216
$
36,963
$
34,652
(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,
2023
2023
Diluted Net Income Per Share of Class A
Common Stock
$
0.17
$
0.42
Adjusted items:
Reallocation of Net Income (Loss)
Attributable to Noncontrolling Interests From the Assumed Exchange
of LLC Interests
0.03
0.08
Abandoned Well Costs
0.02
0.02
(Gain) Loss on Disposal of Assets, Net
(0.05
)
(0.04
)
Stock-Based Compensation
0.06
0.16
Tax Effect of Adjusting Items (1)
-
(0.02
)
Diluted Adjusted Net Income Per Share
$
0.23
$
0.62
(1) Estimated tax effect of adjusted items
allocated to Aris based on statutory rates.
Diluted Weighted Average Shares of Class A
Common Stock Outstanding
30,050,560
30,007,433
Adjusted Items:
Assumed Redemption of LLC Interests
27,550,626
27,557,774
Dilutive Performance-Based Stock Units
(2)
—
—
Diluted Adjusted Fully Weighted Average
Shares of Class A Common Stock Outstanding
57,601,186
57,565,207
(2) Dilutive impact of Performance-Based
Stock Units already included for the three and nine months ended
September 30, 2023.
Table 9
Aris Water Solutions,
Inc.
Computation of Leverage
Ratio
(Unaudited)
As of
September 30,
(in thousands)
2023
Principal Amount of Debt at September 30,
2023
$
434,000
Less: Cash at September 30, 2023
(24,184
)
Net Debt
$
409,816
Net Debt
$
409,816
÷ TTM Adjusted EBITDA
$
161,742
Leverage Ratio
2.53
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231101382589/en/
David Tuerff Senior Vice President, Finance and Investor
Relations (281) 501-3070 IR@ariswater.com
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