On October 27, 2023, Solaris Oilfield Infrastructure Inc (SOI, Financial) released its Q3 2023 financial and operational results. Despite industry activity bottoming during the quarter, SOI continued to see adoption of its new technology offerings. As a result, nearly 55% of industry frac crews deployed either a top fill or AutoBlend™ system, up from over 40% in the prior quarter.
Financial Performance
SOI reported a net income of $7.6 million, or $0.16 per diluted Class A share, for Q3 2023. This is a decrease compared to Q2 2023's net income of $12.2 million, or $0.24 per diluted Class A share. The company's revenues for Q3 2023 were $69.7 million, down 10% sequentially and 25% year over year. Adjusted EBITDA for Q3 2023 was $23.4 million, down 13% from Q2 2023.
Dividend Announcement
SOI's Board approved a $0.12 per share dividend, marking the second increase in 2023. The current per share dividend is a 9% increase over the Q3 dividend and a 14% increase over the Q4 2022 dividend. Since 2018, SOI has returned approximately $158 million to shareholders through dividends and share repurchases.
Capital Expenditures and Cash Flow
Capital expenditures in Q3 2023 were approximately $15 million, primarily related to the manufacturing of top fill systems. The company expects Q4 2023 capital expenditures to be approximately $10 million. Free cash flow in Q3 2023 was positive $6 million, and distributable cash flow was approximately $20 million, covering quarterly dividend distributions of $5 million by approximately four times.
Balance Sheet and Liquidity
As of September 30, 2023, SOI had approximately $3 million of cash on the balance sheet. The company reduced net borrowings on the credit facility by $6 million and ended Q3 2023 with $37 million in borrowings outstanding and $41 million of liquidity.
Shareholder Returns
SOI did not repurchase shares during Q3 2023 and approximately $24 million remains in the company’s stock repurchase authorization. Since initiating the repurchase authorization in Q1 2023, SOI has repurchased a total of 3.1 million Class A common shares, or 6.5% of the company’s total outstanding shares.
Explore the complete 8-K earnings release (here) from Solaris Oilfield Infrastructure Inc for further details.
