The following is a summary of the Select Water Solutions, Inc. (WTTR) Q1 2024 Earnings Call Transcript:

Financial Performance:

• Select Water Solutions demonstrated strong financial performance in Q1 2024, with revenues and margins progressively increasing in water infrastructures and chemical technology segments.

• Consolidated gross margin and adjusted EBITDA significantly exceeded original expectations for the quarter.

• Despite the expected decline in revenue from water services, EBITDA growth is anticipated to trend positively for the remaining year.

• The Water Infrastructure segment exhibited substantial growth with an increase in revenue of over 4%, amounting to $64M, and an increase in gross margins by over 3.6%.

• Chemical technologies saw a sequential increase in revenue by 4%, with margins increasing back up to 17%.

• The company returned a total of $7.5M to shareholders, with a dividend rate of $0.06/shares in Q1.

Business Progress:

• The company strategically completed multiple acquisitions across various regions, including Haynesville, Rockies, Permian, and Bakken. These acquisitions significantly contribute to the water infrastructure growth plan.

• Long term contracts were assigned for new pipeline gathering, recycling and disposal projects to integrate into the existing infrastructure.

• The Water Solutions company continues to improve its manufacturing operations' operating efficiency and boosts its in-basin delivery logistics.

• The Trinity acquisitions and Buckhorn add to the company's disposal capacity and expand its service capabilities.

• Shifting towards a full life cycle water company, aligning with unique secular growth drivers.

• As part of the action plan, they are planning to expand their service and solution offerings end-to-end in water.

• The company looks ahead to align 50% of its gross profit from infrastructure by 2025.

• The focus is on both organic and inorganic growth, with special emphasis on asset acquisitions rather than company acquisitions.

• The company is looking to expand its operating capabilities in areas like beneficial reuse as part of their future business strategy.

• Five deals were consummated throughout the year, with each evaluated based on their strategic interests followed by a thorough due diligence process.

• Assets acquired were strategic and underutilized, potentially replacing the need for organic growth capital.

• The company remains open to synergistic opportunities that would benefit both their customer and investor base.

More details: Select Water Solutions IR

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