Solaris Energy Infrastructure, Inc. Q2 FY2020 Earnings Call

· Earnings call transcript and AI-powered summary

Solaris Oilfield Infrastructure Q2 2020 Earnings Summary

Overview: Q2 2020 was the most challenging quarter in the company's history as a public company due to the COVID-19 pandemic. Revenue and activity declined sharply, but the company achieved breakeven adjusted EBITDA, positive free cash flow for the sixth consecutive quarter, and maintained its dividend for the seventh consecutive quarter. The company remains debt-free with a strong cash position.

Key Financial Highlights (Sequential Comparisons to Q1 2020)

  • Revenue: $9 million, down 80% sequentially, driven by reduced activity and lower last-mile services (trucking component).
  • Adjusted EBITDA: -$0.4 million (breakeven), down from prior positive levels as fixed costs were absorbed over smaller activity base; variable cost cuts lagged revenue drop.
  • Free Cash Flow: +$22 million (positive for sixth consecutive quarter); operating cash flow of ~$23 million after ~$1 million in capex. Cumulative FCF since early 2019: ~$63 million, with ~$30 million+ returned to shareholders YTD via dividends and repurchases.
  • GAAP Net Loss: $5.5 million ($0.20 per share); adjusted pro forma net income: -$7 million ($0.16 per share).
  • Cash Position: $64 million at quarter end (up from $46 million at end of Q1 2020), supported by 77% reduction in accounts receivable.

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Operator: Good morning, everyone. And welcome to the Solaris Oilfield Infrastructure 2020 Second Quarter Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. Please also note, today’s event is being recorded. At this time, I’d like to turn the conference call over to Yvonne Fletcher, Senior Vice President of Finance and Investor Relations. Ma’am, please go ahead. Yvonne Fletcher: Good morning. And welcome to the Solaris second quarter 2020 earnings conference call. I’m joined today by our Chairman and CEO, Bill Zartler; and our President and CFO, Kyle Ramachandran. Before we begin, I’d like to remind you of our standard cautionary remarks regarding the forward-looking nature of some of the statements that we will make today. Such forward-looking statements may include comments regarding future financial results and reflect a number of known and unknown risks. Please refer to our press release issued yesterday, along with other recent public filings with the Securities and Exchange Commission that outline those risks. I would also like to point out that our earnings release and today’s conference call will contain discussion of non-GAAP financial measures, which we believe can be useful in evaluating our performance. The presentation of this additional information should not be considered in isolation or as a substitute for results prepared in accordance with

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