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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