Aris Water Solutions, Inc. (NYSE: ARIS) (“Aris,” “Aris Water” or
the “Company”) today announced financial and operating results for
the fourth quarter and full year ended December 31, 2024.
FOURTH QUARTER AND FULL YEAR 2024
HIGHLIGHTS
- Grew produced water volumes 7% year-over-year
- Set a new quarterly record for recycled water volumes, growing
16% for the year and 18% sequentially in the fourth quarter of
2024
- Achieved fourth quarter and full year 2024 net income of $13.8
million and $60.2 million, respectively
- Generated Adjusted EBITDA1 of $54.5 million for the fourth
quarter of 2024, up 10% year-over-year, and $211.9 million for the
full year, up 21% from 2023
- Full year 2024 Cash Paid for Property, Plant and Equipment of
$100 million
- Full year 2024 Capital Expenditures4 of $101 million, down 35%
from 2023
- Increased quarterly dividend 33% to $0.14 per share for the
first quarter of 2025
- Acquired the 45,000 acre McNeill Ranch in Texas and New Mexico,
providing significant optionality for future growth
“Aris had a remarkable fourth quarter and a great year in which
we successfully grew both volumes and profitability. We achieved
Adjusted EBITDA at the top end of our increased guidance and are
now delivering on our goal of increasing shareholder returns by
raising our dividend to $0.14 per share, representing a 33%
increase. We are extremely proud of what our team accomplished in
2024 and believe we will continue our strong performance in our
core business. We are also making progress in mineral extraction,
beneficial reuse, and the development of technologies for the
treatment of wastewater outside the oil and gas industry,” said
Amanda Brock, President and CEO of Aris.
“During the fourth quarter, we acquired the 45,000 acre McNeill
Ranch located in New Mexico and Texas for $45.0 million. The ranch
provides significant additional disposal capacity to support years
of future growth adjacent to the fastest growing production areas
of the Northern Delaware Basin. This acquisition increases our
operational flexibility and allows us to optimize throughput and
disposal royalties. We purchased the ranch after detailed
sub-surface analysis in collaboration with several of our largest
customers and believe it features promising geology and porosity
for long-term water infrastructure development.
Given the ranch’s advantaged location, there are opportunities
to generate additional surface income through rights-of-way,
utilization of the surface for power and renewable development,
beneficial reuse, and other industrial applications. We are in
discussions with both current and potential new customers to
further commercialize the ranch.
Aris is also applying its expertise in complex water treatment
to industrial uses outside of the oil and gas industry. We recently
added assets, intellectual property, and an experienced team to
help us further our expansion into broader industrial markets. This
team has developed numerous projects to recycle water for large
industrial companies and positions us well to expand our treatment
business. We will provide further updates as this business
grows.
2024 was a phenomenal year and I want to congratulate our team
on all of the Company’s accomplishments. We now begin 2025 with
significant momentum and several exciting strategic
initiatives.”
OPERATIONS UPDATE
Three Months Ended
Three Months Ended
December 31,
September 30,
% Change
December 31,
% Change
2024
2024
2023
(thousands of barrels of water per
day)
Total Volumes
1,636
1,577
4
%
1,577
4
%
Produced Water Handling Volumes
1,112
1,118
(1
)%
1,095
2
%
Water Solutions Volumes
Recycled Produced Water Volumes Sold
463
393
18
%
401
15
%
Groundwater Volumes Sold
61
66
(8
)%
81
(25
)%
Total Water Solutions Volumes
524
459
14
%
482
9
%
Skim oil recoveries (barrels of oil per
day)
1,762
1,769
—
%
1,362
29
%
Skim oil recoveries (as a % of produced
water volumes)
0.16
%
0.16
%
—
%
0.12
%
33
%
Year Ended December
31,
% Change
2024
2023
(thousands of barrels of water per
day)
Total Volumes
1,548
1,492
4
%
Produced Water Handling Volumes
1,120
1,042
7
%
Water Solutions Volumes
Recycled Produced Water Volumes Sold
377
324
16
%
Groundwater Volumes Sold
51
126
(60
)%
Total Water Solutions Volumes
428
450
(5
)%
Skim oil recoveries (barrels of oil per
day)
1,688
1,219
38
%
Skim oil recoveries (as a % of produced
water volumes)
0.15
%
0.12
%
25
%
FINANCIAL UPDATE
Three Months Ended
Three Months Ended
(in thousands)
December 31,
September 30,
% Change
December 31,
% Change
2024
2024
2023
Net Income
$ 13,805
$ 16,431
(16
)%
$ 13,031
6
%
Adjusted Net Income
18,102
20,991
(14
)%
15,377
18
%
Adjusted EBITDA
54,475
54,307
—
%
49,308
10
%
Gross Margin/Barrel
$ 0.31
$ 0.32
(3
)%
$ 0.27
15
%
Adjusted Operating Margin/Barrel
$ 0.44
$ 0.45
(2
)%
$ 0.41
7
%
Capital Expenditures
$ 17,845
$ 8,178
118
%
$ 19,767
(10
)%
This table includes reference to non-GAAP measures. See
definition and a reconciliation to the most directly comparable
GAAP measure in the Appendix.
(in thousands)
Year Ended December
31,
% Change
2024
2023
Net Income
$ 60,178
$ 43,412
39
%
Adjusted Net Income
76,613
52,396
46
%
Adjusted EBITDA
211,885
174,972
21
%
Gross Margin/Barrel
$ 0.31
$ 0.25
24
%
Adjusted Operating Margin/Barrel
$ 0.45
$ 0.39
15
%
Capital Expenditures
101,085
156,394
(35
)%
Net Cash Provided by Operating
Activities
178,876
183,873
(3
)%
Free Cash Flow
$ 72,625
($ 29,125
)
349
%
This table includes reference to non-GAAP measures. See
definition and a reconciliation to the most directly comparable
GAAP measure in the Appendix.
STRONG BALANCE SHEET AND
LIQUIDITY
As of December 31, 2024, the Company had net debt of
approximately $422 million with $29 million in cash and $303
million available under its revolving credit facility. The
Company’s leverage ratio3 at the end of 2024 was 2.0X, below the
Company’s target leverage of 2.5X – 3.5X.
FIRST QUARTER 2025 DIVIDEND
INCREASE
For the first quarter of 2025, Aris’s Board of Directors
approved a 33% increase to Aris’s quarterly dividend to $0.14 per
share. In conjunction with the dividend payment, a distribution of
$0.14 per unit will be paid to unit holders of Solaris Midstream
Holdings, LLC. The dividend will be paid on March 27, 2025, to
holders of record of the Company’s Class A common stock as of the
close of business on March 13, 2025. The distribution to unit
holders of Solaris Midstream Holdings, LLC will be subject to the
same payment and record dates.
FIRST QUARTER AND FULL YEAR 2025
FINANCIAL OUTLOOK
“In 2025, we continue to expect strong performance from our core
water infrastructure business. Produced water volumes are
forecasted to increase in line with the production growth of our
contracted customers in the Northern Delaware Basin.
We expect additional completion activity on our dedicated
acreage to increase our Water Solutions volumes in 2025. We
recently extended an acreage dedication contract with one of our
largest customers and now approximately 80% of our forecasted Water
Solutions business is under long-term dedication with an average
tenor of 8 years. In addition to our long-term contracted produced
water business, these contracts provide even greater visibility
into sustained recycling volumes and related revenue for years to
come.
Based on our customers’ volumetric outlooks, we expect Adjusted
EBITDA of $215 to $235 million and Capital Expenditures to be
between $85 and $105 million for the year. Growing volumes, strong
sustained margins, and continued capital discipline are expected to
drive Free Cash Flow between $75 and $95 million, an increase of
approximately 17% over 2024.
2025 is shaping up to be another strong year. Looking forward,
we will continue to increase shareholder returns in a sustainable
manner while maintaining a strong financial profile and reinvesting
in our core water infrastructure businesses. We are encouraged by
our opportunities related to the McNeill Ranch and the broader
industrial water treatment market,” said Mrs. Brock.
For the full year of 2025, the Company expects:
- Produced Water Handling volumes between 1,150 and 1,210
thousand barrels of water per day
- Water Solutions volumes between 460 and 520 thousand barrels of
water per day
- Adjusted Operating Margin per Barrel2 between $0.43 and
$0.45
- Skim oil recoveries of approximately 1,820 barrels per day
- Adjusted EBITDA1 between $215 and $235 million
- Capital Expenditures4 of $85 to $105 million
- Free Cash Flow5 of $75 to $95 million
For the first quarter of 2025, net of approximately $1.5 million
of Adjusted EBITDA1 impact from customer shut-ins associated with
weather events in January 2025, the Company expects:
- Produced Water Handling volumes between 1,085 and 1,125
thousand barrels of water per day
- Water Solutions volumes between 510 and 550 thousand barrels of
water per day
- Adjusted Operating Margin per Barrel2 between $0.43 and
$0.45
- Skim oil recoveries of approximately 1,800 barrels per day
- Adjusted EBITDA1 between $50 and $54 million
- Capital Expenditures4 of $20 to $25 million
CONFERENCE CALL
Aris will host a conference call to discuss its fourth quarter
and full year 2024 results on Thursday, February 27, 2025, 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
13750902.
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 December 31, 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. 5 Free Cash Flow is a non-GAAP financial
measure. See the supplementary schedules in this press release for
a discussion of how we define and calculate Free Cash Flow and a
reconciliation thereof to Net Cash Provided by (Used in) Operating
Activities, 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 2025, 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 2025. 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. Consolidated Statements of Operations
(Unaudited)
(in thousands, except for share and
Three Months Ended
Year Ended
per share amounts)
December 31,
December 31,
2024
2023
2024
2023
Revenue
Produced Water Handling
$
53,162
$
51,817
$
226,089
$
195,207
Produced Water Handling — Affiliate
34,404
27,965
119,263
102,322
Water Solutions
20,845
17,445
62,942
66,625
Water Solutions — Affiliate
5,137
6,416
18,057
25,611
Other Revenue
5,061
482
9,093
2,353
Total Revenue
118,609
104,125
435,444
392,118
Cost of Revenue
Direct Operating Costs
52,003
44,995
178,396
177,973
Depreciation, Amortization and
Accretion
20,057
19,495
79,159
76,632
Total Cost of Revenue
72,060
64,490
257,555
254,605
Operating Costs and Expenses
Abandoned Well Costs
200
89
518
1,303
General and Administrative
17,362
12,447
65,315
50,454
Research and Development Expense
433
1,253
3,034
3,120
Other Operating Expense (Income), Net
1,890
866
2,269
(1,230
)
Total Operating Expenses
19,885
14,655
71,136
53,647
Operating Income
26,664
24,980
106,753
83,866
Other Expense
Interest Expense, Net
9,600
9,266
36,233
32,853
Other
—
107
1
107
Total Other Expense
9,600
9,373
36,234
32,960
Income Before Income Taxes
17,064
15,607
70,519
50,906
Income Tax Expense
3,259
2,576
10,341
7,494
Net Income
13,805
13,031
60,178
43,412
Net Income Attributable to Noncontrolling
Interest
8,024
7,632
33,321
24,524
Net Income Attributable to Aris Water
Solutions, Inc.
$
5,781
$
5,399
$
26,857
$
18,888
Net Income Per Share of Class A Common
Stock
Basic
$
0.17
$
0.17
$
0.81
$
0.59
Diluted
$
0.17
$
0.17
$
0.81
$
0.59
Weighted Average Shares of Class A Common
Stock Outstanding
Basic
30,767,853
30,128,424
30,575,739
30,037,681
Diluted
31,646,961
30,128,424
30,877,637
30,037,681
Table 2 Aris Water Solutions,
Inc. Consolidated Balance Sheets (Unaudited)
(in thousands, except for share and per
share amounts)
December 31,
December 31,
2024
2023
Assets
Cash
$
28,673
$
5,063
Accounts Receivable, Net
63,016
59,393
Accounts Receivable from Affiliate
12,016
22,963
Other Receivables
13,829
12,767
Prepaids and Deposits
10,418
8,364
Total Current Assets
127,952
108,550
Fixed Assets
Property, Plant and Equipment
1,188,781
1,041,703
Accumulated Depreciation
(160,176
)
(121,989
)
Total Property, Plant and Equipment,
Net
1,028,605
919,714
Intangible Assets, Net
195,223
232,277
Goodwill
34,585
34,585
Deferred Income Tax Assets, Net
13,449
22,634
Operating Lease Right-of-Use Assets,
Net
15,016
16,726
Other Assets
5,284
5,995
Total Assets
$
1,420,114
$
1,340,481
Liabilities and Stockholders'
Equity
Accounts Payable
$
20,182
$
25,925
Payables to Affiliate
941
894
Insurance Premium Financing Liability
6,725
5,463
Accrued and Other Current Liabilities
77,339
64,416
Total Current Liabilities
105,187
96,698
Long-Term Debt, Net of Debt Issuance
Costs
441,662
421,792
Asset Retirement Obligations
21,865
19,030
Tax Receivable Agreement Liability
98,781
98,274
Other Long-Term Liabilities
17,335
16,794
Total Liabilities
684,830
652,588
Stockholders' Equity
Preferred Stock $0.01 par value,
50,000,000 authorized. None issued or outstanding as of December
31, 2024 and December 31, 2023
—
—
Class A Common Stock $0.01 par value,
600,000,000 authorized, 31,516,468 issued and 30,857,526
outstanding as of December 31, 2024; 30,669,932 issued and
30,251,613 outstanding as of December 31, 2023
314
306
Class B Common Stock $0.01 par value,
180,000,000 authorized, 27,493,565 issued and outstanding as of
December 31, 2024; 27,543,565 issued and outstanding as of December
31, 2023
274
275
Treasury Stock (at Cost), 658,942 shares
as of December 31, 2024; 418,319 shares as of December 31, 2023
(8,988
)
(5,133
)
Additional Paid-in-Capital
343,342
328,543
Retained Earnings (Accumulated
Deficit)
13,676
(87
)
Total Stockholders' Equity Attributable to
Aris Water Solutions, Inc.
348,618
323,904
Noncontrolling Interest
386,666
363,989
Total Stockholders' Equity
735,284
687,893
Total Liabilities and Stockholders'
Equity
$
1,420,114
$
1,340,481
Table 3 Aris Water Solutions,
Inc. Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended
Year Ended
(in thousands)
December 31,
December 31,
2024
2023
2024
2023
Cash Flow from Operating
Activities
Net Income
$
13,805
$
13,031
$
60,178
$
43,412
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities
Deferred Income Tax Expense
2,959
2,526
8,689
7,299
Depreciation, Amortization and
Accretion
20,057
19,495
79,159
76,632
Stock-Based Compensation
4,700
2,624
18,189
11,569
Abandoned Well Costs
200
89
518
1,303
Loss (Gain) on Disposal of Assets, Net
18
(32
)
102
(2,606
)
Abandoned Projects
714
88
1,537
216
Amortization of Debt Issuance Costs,
Net
756
700
2,949
2,280
Change in Payables Related to Tax
Receivable Agreement Liability
229
413
229
413
Other
638
566
1,060
93
Changes in Operating Assets and
Liabilities:
Accounts Receivable
6,837
(1,878
)
(4,202
)
20,716
Accounts Receivable from Affiliate
19,176
333
10,947
23,104
Other Receivables
2,309
3,711
(859
)
(9,648
)
Prepaids and Deposits
(6,921
)
(6,123
)
(2,865
)
(2,559
)
Accounts Payable
1,912
4,092
(6,506
)
3,937
Payables to Affiliate
3
(283
)
47
(2,127
)
Accrued Liabilities and Other
259
(8,004
)
9,704
9,839
Net Cash Provided by Operating
Activities
67,651
31,348
178,876
183,873
Cash Flow from Investing
Activities
Property, Plant and Equipment
Expenditures
(12,784
)
(37,862
)
(99,985
)
(169,736
)
Cash Paid for Asset Acquisitions
(46,104
)
—
(46,104
)
—
Proceeds from the Sale of Property, Plant
and Equipment
359
35
519
20,154
Net Cash Used in Investing
Activities
(58,529
)
(37,827
)
(145,570
)
(149,582
)
Cash Flow from Financing
Activities
Dividends and Distributions Paid
(6,367
)
(5,346
)
(24,559
)
(21,429
)
Repurchase of Shares
(2,166
)
(738
)
(3,584
)
(1,363
)
Repayment of Credit Facility
(46,000
)
(67,000
)
(86,000
)
(118,000
)
Proceeds from Credit Facility
35,000
59,000
104,000
109,000
Payment of Debt Issuance Costs Related to
Credit Facility
—
(3,942
)
—
(3,942
)
Proceeds from Insurance Premium
Financing
8,779
6,636
8,779
6,636
Payment of Insurance Premium Financing
(2,145
)
(1,252
)
(7,779
)
(1,252
)
Payment of Finance Leases
(310
)
—
(553
)
—
Net Cash Used in Financing
Activities
(13,209
)
(12,642
)
(9,696
)
(30,350
)
Net Increase in Cash
(4,087
)
(19,121
)
23,610
3,941
Cash, Beginning of Period
32,760
24,184
5,063
1,122
Cash, End of Period
$
28,673
$
5,063
$
28,673
$
5,063
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, Capital Expenditures and Free Cash Flow.
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, gross margin, net cash flows provided from operating
activities 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
(Total Revenue less Total Cost of Revenue) 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 non-cash and/or non-recurring
items. The Company calculates 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 non-cash and/or
non-recurring 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 December 31, 2024, the Company calculates
its leverage ratio as net debt as of December 31, 2024, divided by
Adjusted EBITDA for the trailing twelve months. Net debt is
calculated as the principal amount of total debt outstanding as of
December 31, 2024, less cash and cash equivalents as of December
31, 2024.
The Company calculates Capital Expenditures as cash capital
expenditures for property, plant, and equipment additions less
changes in accrued capital costs.
The Company calculates Free Cash Flow as cash provided by (used
in) operating activities less changes in operating assets and
liabilities which used (provided) cash and cash paid for property,
plant and equipment expenditures.
The Company believes these presentations are used by investors
and professional research analysts to assess the ability of our
assets to generate sufficient cash to meet our business needs and
return capital to equity holders, as well as 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, Capital Expenditures and Free Cash Flow 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, cash paid for property, plant and
equipment or net cash flows provided from operating activities.
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 net cash flows from operating
activities.
Although we provide forecasts for the non-GAAP measures Adjusted
EBITDA, Adjusted Operating Margin per Barrel, Capital Expenditures
and Free Cash Flow, we are not able to forecast their most directly
comparable measures (net income, gross margin, cash paid for
property, plant, and equipment and net cash flows from operating
activities) 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
Year Ended
December 31,
September 30,
December 31,
2024
2023
2024
2024
2023
(thousands of barrels of water per
day)
Produced Water Handling Volumes
1,112
1,095
1,118
1,120
1,042
Water Solutions Volumes
Recycled Produced Water Volumes Sold
463
401
393
377
324
Groundwater Volumes Sold
61
81
66
51
126
Total Water Solutions Volumes
524
482
459
428
450
Total Volumes
1,636
1,577
1,577
1,548
1,492
Per Barrel Operating Metrics (1)
Produced Water Handling Revenue/Barrel
$
0.86
$
0.79
$
0.86
$
0.84
$
0.78
Water Solutions Revenue/Barrel
$
0.54
$
0.54
$
0.49
$
0.52
$
0.56
Revenue/Barrel of Total Volumes (2)
$
0.75
$
0.71
$
0.75
$
0.75
$
0.72
Direct Operating Costs/Barrel
$
0.35
$
0.31
$
0.32
$
0.31
$
0.33
Gross Margin/Barrel
$
0.31
$
0.27
$
0.32
$
0.31
$
0.25
Adjusted Operating Margin/Barrel
$
0.44
$
0.41
$
0.45
$
0.45
$
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
Year Ended
(in thousands)
December 31,
December 31,
2024
2023
2024
2023
Net Income
$
13,805
$
13,031
$
60,178
$
43,412
Interest Expense, Net
9,600
9,266
36,233
32,853
Income Tax Expense
3,259
2,576
10,341
7,494
Depreciation, Amortization and
Accretion
20,057
19,495
79,159
76,632
Abandoned Well Costs
200
89
518
1,303
Stock-Based Compensation
4,700
2,624
18,189
11,569
Abandoned Projects
714
88
1,537
216
Loss (Gain) on Disposal of Assets, Net
18
(32
)
102
(2,606
)
Transaction Costs
937
129
997
802
Research and Development Expense
433
1,253
3,034
3,120
Change in Payables Related to Tax
Receivable Agreement Liability
229
413
229
413
Litigation Expenses
333
222
1,580
222
Other
190
154
(212
)
(458
)
Adjusted EBITDA
$
54,475
$
49,308
$
211,885
$
174,972
Table 6 Aris Water Solutions,
Inc. Reconciliation of Gross Margin to Adjusted Operating Margin
and Adjusted Operating Margin per Barrel (Unaudited)
Three Months Ended
Year Ended
(in thousands)
December 31,
December 31,
2024
2023
2024
2023
Total Revenue
$
118,609
$
104,125
$
435,444
$
392,118
Cost of Revenue
(72,060
)
(64,490
)
(257,555
)
(254,605
)
Gross Margin
46,549
39,635
177,889
137,513
Depreciation, Amortization and
Accretion
20,057
19,495
79,159
76,632
Adjusted Operating Margin
$
66,606
$
59,130
$
257,048
$
214,145
Total Volumes (thousands of barrels)
150,503
145,122
566,547
544,647
Adjusted Operating Margin/BBL
$
0.44
$
0.41
$
0.45
$
0.39
Table 7 Aris Water Solutions,
Inc. Reconciliation of Net Income to Non-GAAP Adjusted Net Income
(Unaudited)
Three Months Ended
Year Ended
(in thousands)
December 31,
December 31,
2024
2023
2024
2023
Net Income
$
13,805
$
13,031
$
60,178
$
43,412
Adjusted items:
Abandoned Well Costs
200
89
518
1,303
Loss (Gain) on Disposal of Assets, Net
18
(32
)
102
(2,606
)
Stock-Based Compensation
4,700
2,624
18,189
11,569
Tax Effect of Adjusting Items (1)
(621
)
(335
)
(2,374
)
(1,282
)
Adjusted Net Income
$
18,102
$
15,377
$
76,613
$
52,396
(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
Year Ended
December 31,
December 31,
2024
2023
2024
2023
Diluted Net Income Per Share of Class A
Common Stock
$
0.17
$
0.17
$
0.81
$
0.59
Adjusted items:
Reallocation of Net Income Attributable to
Noncontrolling Interests From the Assumed Exchange of LLC
Interests
0.05
0.05
0.17
0.14
Abandoned Well Costs
—
—
0.01
0.02
Loss (Gain) on Disposal of Assets, Net
—
—
—
(0.05
)
Stock-Based Compensation
0.08
0.05
0.31
0.20
Tax Effect of Adjusting Items (1)
(0.01
)
(0.01
)
(0.04
)
(0.02
)
Diluted Adjusted Net Income Per Share
$
0.29
$
0.26
$
1.26
$
0.88
(1) Estimated tax effect of adjusted items
allocated to Aris based on statutory rates.
Basic Weighted Average Shares of Class A
Common Stock Outstanding
30,767,853
30,128,424
30,575,739
30,037,681
Adjusted Items:
Assumed Redemption of LLC Interests
27,527,261
27,543,565
27,539,489
27,554,221
Dilutive Performance-Based Stock Units
(2)
879,108
—
301,898
—
Diluted Adjusted Fully Weighted Average
Shares of Class A Common Stock Outstanding
59,174,222
57,671,989
58,417,126
57,591,902
(2) Dilutive impact of Performance-Based
Stock Units already included for the three and twelve months ended
December 31, 2024 and 2023.
Table 9 Aris Water Solutions,
Inc. Computation of Leverage Ratio (Unaudited)
As of
(in thousands)
December 31, 2024
Principal Amount of Debt at December 31,
2024
$
450,725
Less: Cash at December 31, 2024
(28,673
)
Net Debt
$
422,052
Net Debt
$
422,052
÷ Trailing Twelve Months Adjusted
EBITDA
211,885
Leverage Ratio
1.99
Table 10
Aris Water Solutions,
Inc.
Reconciliation of Capital
Expenditures
(Unaudited)
Three Months Ended
Year Ended
December 31,
December 31,
(in thousands)
2024
2023
2024
2023
Cash Paid for Property, Plant and
Equipment
$
12,784
$
37,862
$
99,985
$
169,736
Change in Capital Related Accruals
5,061
(18,095
)
1,100
(13,342
)
Capital Expenditures
$
17,845
$
19,767
$
101,085
$
156,394
Table 11
Aris Water Solutions,
Inc.
Reconciliation of Free Cash
Flow
(Unaudited)
Year Ended
December 31,
(in thousands)
2024
2023
Net Cash Provided by Operating
Activities
$
178,876
$
183,873
Changes in Operating Assets and
Liabilities Which Used (Provided) Cash:
Accounts Receivable
4,202
(20,716
)
Accounts Receivable from Affiliate
(10,947
)
(23,104
)
Other Receivables
859
9,648
Prepaids and Deposits
2,865
2,559
Accounts Payable
6,506
(3,937
)
Payables to Affiliates
(47
)
2,127
Accrued Liabilities and Other
(9,704
)
(9,839
)
Property, Plant and Equipment
Expenditures
(99,985
)
(169,736
)
Free Cash Flow
$
72,625
$
(29,125
)
Cash Flow Information
Net Cash Provided by Operating
Activities
$
178,876
$
183,873
Net Cash Used in Investing Activities
$
(145,570
)
$
(149,582
)
Net Cash Used in Financing Activities
$
(9,696
)
$
(30,350
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250226178196/en/
David Tuerff Senior Vice President, Finance and Investor
Relations (281) 501-3070 IR@ariswater.com
Aris Water Solutions (NYSE:ARIS)
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