Select Water Solutions(WTTR) - 2024 Q4 - Annual Results

Revenue and Profitability - Full year 2024 consolidated revenue was $1.5 billion, with fourth quarter revenue of $349 million[1]. - Water Infrastructure segment achieved full year 2024 revenues of $291 million, up 26% year-over-year, and gross profit increased by 62% year-over-year[1][4]. - Full year 2024 gross profit was $219.5 million, with a total gross margin of 15.1%[13]. - Total revenue for Q4 2024 was $349.047 million, a decrease of 6.9% compared to $374.860 million in Q4 2023[43]. - Gross profit for Q4 2024 was $44.184 million, down from $54.558 million in Q4 2023, representing a decline of 19.1%[43]. - Water Services segment generated revenues of $209.3 million in Q4 2024, down 10.6% sequentially from $234.0 million in Q3 2024 and down from $241.8 million in Q4 2023[21]. - The Chemical Technologies segment reported revenues of $62.9 million in Q4 2024, an increase of 13.0% from $55.3 million in Q3 2024 but a decrease from $72.3 million in Q4 2023[22]. Cash Flow and Capital Expenditures - Operating cash flow for full year 2024 was $235 million, with free cash flow of $78 million, representing approximately 30% of Adjusted EBITDA[2]. - Cash flow from operations for the full year 2024 was $234.9 million, a decrease from $285.4 million in 2023, while Q4 2024 cash flow from operations was $67.8 million, up from $51.9 million in Q3 2024[23]. - The company anticipates capital expenditures of $170 – $190 million for full year 2025, net of $10 – $20 million from asset sales[7]. - Net capital expenditures for the full year 2024 were $157.3 million, compared to $119.0 million in 2023, with Q4 2024 net capital expenditures at $51.5 million[24]. - The company made capital expenditures of $55,073 thousand for property and equipment during the three months ended December 31, 2024[52]. Debt and Liquidity - Total cash and cash equivalents decreased to $20.0 million as of December 31, 2024, from $57.1 million as of December 31, 2023[27]. - Total liquidity was $134.8 million as of December 31, 2024, down from $307.4 million as of December 31, 2023[29]. - The company’s long-term debt stood at $85 million as of December 31, 2024, with no long-term debt reported in 2023[45]. - Cash and cash equivalents decreased to $19.978 million in 2024 from $57.083 million in 2023, a decline of 65.0%[45]. Project Backlog and Future Expectations - The backlog of infrastructure projects is at an all-time high, with expectations for a steady cadence of new contracts in 2025[7]. - For 2025, the company expects Water Infrastructure segment revenues and gross profit to grow by 15% – 25% year-over-year[6]. - Select executed multiple long-term contracts for water infrastructure projects in the Permian Basin, with combined capital expenditures expected to be $39 million – $41 million[31]. - A 15-year agreement was signed for the construction and expansion of recycling infrastructure in the Northern Delaware Basin, adding up to 120,000 barrels per day of throughput capacity[32]. - Select entered a partnership to consolidate a large water rights and storage portfolio in Colorado, with an initial investment of $62 million[35]. Net Income and Loss - Net loss attributable to Select Water Solutions, Inc. for Q4 2024 was $1.640 million, compared to a net income of $27.595 million in Q4 2023[43]. - Net loss for the three months ended December 31, 2024, was $2,134 thousand, compared to a net income of $27,639 thousand for the same period in 2023[47]. - Free cash flow for the three months ended December 31, 2024, was $20,402 thousand, compared to $55,239 thousand for the same period in 2023[52]. Asset and Liability Changes - Total assets increased to $1.366 billion as of December 31, 2024, up from $1.218 billion in 2023, reflecting a growth of 12.1%[45]. - Current liabilities rose to $233.375 million in 2024, compared to $211.547 million in 2023, an increase of 10.3%[45]. - The accumulated deficit improved to $(206.147) million in 2024 from $(236.791) million in 2023, indicating a reduction of 12.9%[45]. Gross Profit and Margins - The company reported a gross profit margin of 12.6% in Q4 2024, down from 14.5% in Q4 2023[43]. - Gross profit before depreciation and amortization (D&A) for the year ended December 31, 2024, was $373,009,000, slightly up from $370,475,000 in 2023[53]. - The total gross margin before D&A for the year ended December 31, 2024, was 25.7%, compared to 23.4% in 2023, indicating an improvement[53]. - Water services segment gross profit before D&A was $180,781,000 for the year ended December 31, 2024, down from $218,287,000 in 2023[53]. - Water infrastructure segment gross profit before D&A increased to $153,327,000 in 2024 from $91,779,000 in 2023, showing significant growth[53]. - Chemical technologies segment gross profit before D&A decreased to $38,901,000 in 2024 from $60,409,000 in 2023[53]. - The gross margin before D&A for the water services segment was 20.0% for the year ended December 31, 2024, compared to 21.1% in 2023[53]. - The gross margin before D&A for the water infrastructure segment improved to 52.7% in 2024 from 39.9% in 2023[53]. - The gross margin before D&A for the chemical technologies segment was 15.0% for the year ended December 31, 2024, down from 18.7% in 2023[53].