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AESI...Trimmed another 1/3 this morning...Atlas Energy Solutions Announces First Quarter 2024 Results; Increases Quarterly Dividend

AUSTIN, Texas, May 06, 2024--(BUSINESS WIRE)--Atlas Energy Solutions Inc. (NYSE: AESI) ("Atlas" or the "Company") today reported financial and operating results for the quarter ended March 31, 2024.

First Quarter 2024 Highlights

Total sales of $192.7 million

Net income of $26.8 million (14% Net Income Margin)

Adjusted EBITDA of $75.5 million (39% Adjusted EBITDA Margin) (1)

Net cash provided by operating activities of $39.6 million

Adjusted Free Cash Flow of $71.1 million (37% Adjusted Free Cash Flow Margin) (1)

Dune Express construction remains on-time and on-budget

Declares increased quarterly dividend of $0.22 per share ($0.16 per share fixed, $0.06 per share variable), payable May 23, 2024

John Turner, President, CEO & CFO, commented, "The first quarter was a monumental one for our company with the closing of the Hi-Crush acquisition. We are already realizing benefits from the transaction through increased scale and are excited with the way the transaction positions us for long-term success. We’re looking forward to the remainder of the year, as we recently floated our two new dredges at our Kermit facility and began producing sand from the eighth OnCore mine, which is located in the Midland Basin. Our response to the recent mechanical fire at our Kermit facility was swift and decisive, and I’m proud of the team’s efforts to insulate our customers from any disruption in service. We expect to continue servicing our customers while we finish up the repairs to the facility."

First Quarter 2024 Financial Results

First quarter 2024 total sales increased $51.6 million, or 37% when compared to the fourth quarter of 2023, to $192.7 million. Product sales increased $13.4 million, or 13% when compared to the fourth quarter of 2023, to $113.4 million. First quarter 2024 sales volumes increased to 3.9 million tons, or 54% when compared to the fourth quarter of 2023, which was offset by lower average pricing experienced during the period. Service sales increased by $38.1 million, or 93% when compared to the fourth quarter of 2023, to $79.2 million. The increase in service sales was due to an increased number of active jobs during the period coupled with the service sales contribution, which only includes 27 days for the month of March, associated with the previously announced acquisition of Hi-Crush Inc. ("Hi-Crush").

First quarter 2024 cost of sales (excluding depreciation, depletion and accretion expense) ("cost of sales") increased by $40.1 million, or 60% when compared to the fourth quarter of 2023, to $106.7 million. The increase in our cost of sales was primarily driven by cost of sales contribution associated with the Hi-Crush operations, which only includes 27 days for the month of March.

Selling, general and administrative expenses ("SG&A") for the first quarter of 2024 increased $15.5 million, or 114% when compared to the fourth quarter of 2023, to $29.1 million, driven primarily by $10.6 million in non-recurring transaction costs related to the acquisition of Hi-Crush, along with $4.2 million in stock-based compensation.

Net income for the first quarter of 2024 was $26.8 million, and Adjusted EBITDA for the first quarter of 2024 was $75.5 million.

Liquidity, Capital Expenditures and Other

As of March 31, 2024, the Company’s total liquidity was $360.9 million, which was comprised of $187.1 million in cash and cash equivalents (held in cash, CDs, and two- and three-month Treasury bills), $73.8 million of availability under the Company’s ABL Facility, and $100 million of availability under the Company's Delayed Draw Term Loan Facility; the Company had $50.0 million of borrowings outstanding under the ABL Facility and $1.2 million of outstanding undrawn letters of credit.

Net cash used in investing activities was $235.1 million during the first quarter of 2024, driven largely by the cash consideration component related to the Hi-Crush acquisition, along with costs associated with the construction of the Dune Express. We continue to expect the Dune Express to come online in the fourth quarter of 2024.

Quarterly Cash Dividend

On May 6, 2024, the Board of Directors (the "Board) of Atlas declared an increased dividend to common stockholders of $0.22 per share, or approximately $24.1 million in aggregate to shareholders. The dividend includes a $0.16 per share base dividend and a $0.06 per share variable dividend. The dividend will be payable on May 23, 2024 to shareholders of record at the close of business on May 16, 2024.

Subsequent Events

Kermit Facility Operational Update

As previously reported, on Sunday, April 14th, a mechanical fire occurred at the Atlas mine in Kermit, Texas. The team began to move temporary loadout equipment to the Kermit facility within 48 hours of the incident. On Thursday, April 25, Atlas reopened the Kermit facility and began to fulfill a portion of Kermit facility customer commitments with sand produced and loaded from that facility. We continue to review the financial impact of the incident and believe we will have the Kermit facility fully operational by the end of 2Q 2024.

Conference Call Information

The Company will host a conference call to discuss financial and operational results on Monday, May 6, 2024 at 9:00am Central Time (10:00am Eastern Time). Individuals wishing to participate in the conference call should dial [phone]. A live webcast will be available at https://ir.atlas.energy/. Please access the webcast or dial in for the call at least 10 minutes ahead of the start time to ensure a proper connection. An archived version of the conference call will be available on the Company’s website shortly after the conclusion of the call.

The Company will also post an updated investor presentation titled "Investor Presentation May 2024", in addition to a "May 2024 Growth Projects Update" video, at https://ir.atlas.energy/ in the "Presentations" section under "News & Events" tab on the Company’s Investor Relations webpage prior to the conference call.

About Atlas Energy Solutions

Atlas Energy Solutions Inc. is a leading proppant producer and proppant logistics provider, serving primarily the Permian Basin of West Texas and New Mexico. We operate 12 proppant production facilities across the Permian Basin with a combined annual production capacity of 28 million tons, including both large-scale in-basin facilities and smaller distributed mining units. We manage a portfolio of leading-edge logistics assets, which includes our 42-mile Dune Express conveyor system, which is currently under construction and is scheduled to come online in the fourth quarter of 2024. In addition to our conveyor infrastructure, we manage a fleet of 120 trucks, which are capable of delivering expanded payloads due to our custom-manufactured trailers and patented drop-depot process. Our approach to managing both our proppant production and proppant logistics operations is intently focused on leveraging technology, automation and remote operations to drive efficiencies.

We are a low-cost producer of various high-quality, locally sourced proppants used during the well completion process. We offer both dry and damp sand, and carry various mesh sizes including 100 mesh and 40/70 mesh. Proppant is a key component necessary to facilitate the recovery of hydrocarbons from oil and natural gas wells.

Our logistics platform is designed to increase the efficiency, safety and sustainability of the oil and natural gas industry within the Permian Basin. Proppant logistics is increasingly a differentiating factor affecting customer choice among proppant producers. The cost of delivering sand, even short distances, can be a significant component of customer spending on their well completions given the substantial volumes that are utilized in modern well designs.

We continue to invest in and pursue leading-edge technologies, including autonomous trucking, digital infrastructure, and artificial intelligence, to support opportunities to gain efficiencies in our operations. To this end, we have recently taken delivery of next-generation dredge mining assets to drive efficiencies in our proppant production operations. These technology-focused investments aim to improve our cost structure and also combine to produce beneficial environmental and community impacts.

While our core business is fundamentally aligned with a lower emissions economy, our core obligation has been, and will always be, to our stockholders. We recognize that maximizing value for our stockholders requires that we optimize the outcomes for our broader stakeholders, including our employees and the communities in which we operate. We are proud of the fact that our approach to innovation in the hydrocarbon industry while operating in an environmentally responsible manner creates immense value. Since our founding in 2017, our core mission has been to improve human beings’ access to the hydrocarbons that power our lives while also delivering differentiated social and environmental progress. Our Atlas team has driven innovation and has produced industry-leading environmental benefits by reducing energy consumption, emissions, and our aerial footprint. We call this Sustainable Environmental and Social Progress.

We were founded in 2017 by Ben M. "Bud" Brigham, our Executive Chairman, and are led by an entrepreneurial team with a history of constructive disruption bringing significant and complementary experience to this enterprise, including the perspective of longtime E&P operators, which provides for an elevated understanding of the end users of our products and services. Our executive management team has a proven track record with a history of generating positive returns and value creation. Our experience as E&P operators was instrumental to our understanding of the opportunity created by in-basin sand production and supply in the Permian Basin, which we view as North America’s premier shale resource and which we believe will remain its most active through economic cycles.
https://finance.yahoo.com/news/atlas-energy-solutions-announces-first-120000722.html