Select Water Solutions Announces Fourth Quarter and Full Year 2024 Financial and Operational Results and Strategic Updates

1. 2024 revenues reached $1.5 billion, with Water Infrastructure growing 26%. Strong growth in cash flow supports expansion. 2. Select Water secured multiple long-term contracts covering over 150,000 acres. This includes high-margin projects targeting new markets. 3. Adjusted EBITDA remained stable at $258.4 million and cash flow from operations was robust. High cash flow conversion indicates operational efficiency. 4. New credit facility of $550 million boosts liquidity for continued investment. This enables further growth strategies in Water Infrastructure. 5. 2025 expected to set records for both Adjusted EBITDA and margins. Growth in Water Infrastructure projected between 15%-25% year-over-year.

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FAQ

Why Bullish?

Strong growth in the Water Infrastructure segment and cash flow generation can positively influence investor sentiment towards WTTR.

How important is it?

The substantial growth in revenues and projections can significantly influence WTTR's market position and investor confidence.

Why Long Term?

Long-term contracts and expanding market presence can underpin stability and growth for WTTR, similar to past infrastructure expansions.

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SELECT WATER SOLUTIONS, INC. - Fourth Quarter 2024 Financial Results

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GAINESVILLE, Texas, Feb. 18, 2025 /PRNewswire/ --

Select Water Solutions, Inc. (NYSE: WTTR) ("Select" or the "Company"), a leading provider of sustainable water and chemical solutions, today announced its financial and operating results for the quarter and year ended December 31, 2024.

Chairman's Statement

John Schmitz, Chairman of the Board, President and CEO, stated, "The fourth quarter concluded another record-setting year for Select, both operationally and financially. With another year of strong earnings, margin gains, record Adjusted EBITDA and steady free cash flow generation, we were able to invest in and grow our business organically, execute several strategic acquisitions, and pay out record dividends. Operating cash flow remained strong in 2024 at $235 million, and full year free cash flow of $78 million met our guided expectation of converting approximately 30% of our Adjusted EBITDA into free cash flow during the year."

"2024 also marked another year of tremendous progress accelerating the growth of our Water Infrastructure segment, with full year 2024 Water Infrastructure segment revenue and gross profit growing 26% and 62%, respectively, when compared to full year 2023. Operationally, we transported, recycled and disposed of record volumes across the business in 2024 and continue to see tremendous growth opportunities ahead for this segment."

"As we execute on our Water Infrastructure growth strategy, we continue to add a large portfolio of long-term contracts to the business while also increasing the proportion of our profitability coming from production-weighted revenues, as demonstrated by a 43% increase in disposal volumes year-over-year. This includes multiple new contracts signed during the fourth quarter, which add another 150,000 acres under long-term dedication."

"Overall, we have built a portfolio of more than 2.5 million acres under long-term dedication and right-of-first refusal agreements, a tremendous achievement for the team over the last couple of years. Importantly, these contracts, and the associated well inventory, underpin our long-term financial outlook, credit profile and financing options for the business."

Financial Performance Overview

Revenue for full year 2024 was $1.5 billion as compared to $1.6 billion during full year 2023. Net income for full year 2024 was $35.5 million as compared to $79.2 million during full year 2023. For full year 2024, gross profit was $219.5 million, as compared to $231.7 million during full year 2023.

Total gross margin was 15.1% during full year 2024 as compared to 14.6% during full year 2023. Adjusted EBITDA was $258.4 million during full year 2024 as compared to $258.3 million during full year 2023.

Fourth Quarter Consolidated Financial Information

Revenue for the fourth quarter of 2024 was $349.0 million as compared to $371.3 million in the third quarter of 2024 and $374.9 million in the fourth quarter of 2023. Net loss for the fourth quarter of 2024 was $2.1 million as compared to net income of $18.8 million in the third quarter of 2024 and $27.6 million in the fourth quarter of 2023.

For the fourth quarter of 2024, gross profit was $44.2 million, as compared to $62.4 million in the third quarter of 2024 and $54.6 million in the fourth quarter of 2023. Total gross margin was 12.7% in the fourth quarter of 2024 as compared to 16.8% in the third quarter of 2024 and 14.6% in the fourth quarter of 2023.

Outlook for 2025

"Altogether, for the full year of 2025, we expect yet another record-setting year for Adjusted EBITDA and consolidated margins, with a robust trajectory throughout the year driving the second half of 2025 to be strongly improved compared to the first half of 2025."