[10-Q] Atlas Energy Solutions Inc. Quarterly Earnings Report
Q2-25 snapshot: Ivanhoe Electric (IE) generated $1.1 million revenue (+98% YoY) from its data-processing subsidiary, yielding $0.8 million gross profit. Exploration spend dropped 62% to $14.1 million as Santa Cruz drilling wound down after the Preliminary Feasibility Study (PFS); G&A slid 9% to $9.7 million. Net loss to common shareholders narrowed 49% to $23.9 million ($0.18/sh); six-month loss fell 47% to $54.4 million.
Balance sheet: Cash & equivalents rose to $88.1 million from $41.0 million at year-end, driven by a $65.8 million February equity/warrant offering. Working capital improved to $77.1 million and equity to $310.8 million. Debt comprises a $38.1 million Santa Cruz land note (prime + 1%) and a $32.3 million VRB 8% convertible bond (matures Jul-26); total liabilities fell 5% to $89.7 million.
Project milestones: The June PFS for the Santa Cruz Copper Project projects 1.4 Mt copper cathode over 23 years with after-tax NPV8 US$1.4 billion, 20% IRR and US$1.24 billion initial capex; financing talks are under way. Subsidiary Cordoba agreed to sell its remaining 50 % Alacrán stake to JCHX for up to US$128 million, contingent on EIA approval and shareholder vote. VRB’s buyer Red Sun missed a US$10 million installment; US$5 million is now expected by Aug-31 and US$5 million by Oct-31.
Outlook: Management believes current liquidity funds operations for ≥12 months; a construction decision at Santa Cruz would accelerate external financing needs.
Riepilogo Q2-25: Ivanhoe Electric (IE) ha generato 1,1 milioni di dollari di ricavi (+98% su base annua) dalla sua controllata di elaborazione dati, con un utile lordo di 0,8 milioni di dollari. La spesa per l'esplorazione è diminuita del 62%, attestandosi a 14,1 milioni di dollari, poiché le perforazioni a Santa Cruz sono diminuite dopo lo Studio di Fattibilità Preliminare (PFS); le spese generali e amministrative sono scese del 9% a 9,7 milioni di dollari. La perdita netta attribuibile agli azionisti comuni si è ridotta del 49% a 23,9 milioni di dollari (0,18 $/azione); la perdita semestrale è diminuita del 47% a 54,4 milioni di dollari.
Bilancio: La liquidità e le equivalenti sono aumentate a 88,1 milioni di dollari rispetto ai 41,0 milioni di fine anno, grazie a un'offerta azionaria/diritti di sottoscrizione da 65,8 milioni di dollari a febbraio. Il capitale circolante è migliorato a 77,1 milioni di dollari e il patrimonio netto a 310,8 milioni di dollari. Il debito comprende una nota fondiaria Santa Cruz da 38,1 milioni di dollari (prime + 1%) e un'obbligazione convertibile VRB all'8% da 32,3 milioni di dollari (scadenza luglio 2026); le passività totali sono diminuite del 5% a 89,7 milioni di dollari.
Traguardi del progetto: Il PFS di giugno per il progetto Santa Cruz Copper prevede 1,4 Mt di rame catodico in 23 anni, con un valore attuale netto post-tasse (NPV8) di 1,4 miliardi di dollari, un IRR del 20% e un capex iniziale di 1,24 miliardi di dollari; sono in corso trattative per il finanziamento. La controllata Cordoba ha concordato la vendita del restante 50% della partecipazione in Alacrán a JCHX per un massimo di 128 milioni di dollari, subordinata all'approvazione della valutazione ambientale (EIA) e al voto degli azionisti. L'acquirente di VRB, Red Sun, non ha rispettato una rata da 10 milioni di dollari; ora si prevede un pagamento di 5 milioni entro il 31 agosto e altri 5 milioni entro il 31 ottobre.
Prospettive: La direzione ritiene che la liquidità attuale finanzi operazioni per almeno 12 mesi; una decisione di costruzione a Santa Cruz accelererebbe le necessità di finanziamento esterno.
Resumen Q2-25: Ivanhoe Electric (IE) generó ingresos de 1,1 millones de dólares (+98% interanual) a partir de su subsidiaria de procesamiento de datos, con un beneficio bruto de 0,8 millones de dólares. El gasto en exploración cayó un 62% hasta 14,1 millones de dólares, ya que la perforación en Santa Cruz se redujo tras el Estudio de Factibilidad Preliminar (PFS); los gastos generales y administrativos disminuyeron un 9% hasta 9,7 millones de dólares. La pérdida neta atribuible a los accionistas comunes se redujo un 49% hasta 23,9 millones de dólares (0,18 $/acción); la pérdida semestral bajó un 47% hasta 54,4 millones de dólares.
Balance: El efectivo y equivalentes aumentaron a 88,1 millones de dólares desde 41,0 millones a fin de año, impulsados por una oferta de acciones/bonos de 65,8 millones en febrero. El capital de trabajo mejoró a 77,1 millones y el patrimonio neto a 310,8 millones. La deuda incluye una nota de tierras de Santa Cruz por 38,1 millones de dólares (prime + 1%) y un bono convertible VRB al 8% de 32,3 millones (vence en julio de 2026); los pasivos totales cayeron un 5% hasta 89,7 millones.
Hitos del proyecto: El PFS de junio para el Proyecto de Cobre Santa Cruz proyecta 1,4 Mt de cátodos de cobre durante 23 años con un VAN después de impuestos (NPV8) de 1,4 mil millones de dólares, una TIR del 20% y un capex inicial de 1,24 mil millones; se están llevando a cabo negociaciones de financiamiento. La subsidiaria Córdoba acordó vender su participación restante del 50% en Alacrán a JCHX por hasta 128 millones de dólares, condicionado a la aprobación de la EIA y votación de accionistas. El comprador de VRB, Red Sun, incumplió un pago de 10 millones; ahora se espera un pago de 5 millones para el 31 de agosto y otros 5 millones para el 31 de octubre.
Perspectivas: La gerencia considera que la liquidez actual financia las operaciones por ≥12 meses; una decisión de construcción en Santa Cruz aceleraría las necesidades de financiamiento externo.
2분기 25 요약: Ivanhoe Electric(IE)는 데이터 처리 자회사에서 110만 달러의 매출(전년 대비 98% 증가)을 올렸으며, 총이익은 80만 달러를 기록했습니다. 산타크루즈 시추가 예비 타당성 조사(PFS) 후 축소되면서 탐사비 지출은 62% 감소한 1,410만 달러를 기록했고, 일반관리비는 9% 줄어든 970만 달러였습니다. 보통주주에 대한 순손실은 49% 감소한 2,390만 달러(주당 0.18달러)였으며, 6개월 손실은 47% 줄어든 5,440만 달러였습니다.
재무상태표: 현금 및 현금성 자산은 연말 4,100만 달러에서 8,810만 달러로 증가했으며, 이는 2월에 실시된 6,580만 달러 규모의 주식/워런트 공모에 기인합니다. 운전자본은 7,710만 달러로 개선되었고, 자본총계는 3억 1,080만 달러입니다. 부채는 산타크루즈 토지 대출 3,810만 달러(프라임 금리 + 1%)와 8% 이자 VRB 전환사채 3,230만 달러(만기 2026년 7월)로 구성되며, 총 부채는 5% 감소한 8,970만 달러입니다.
프로젝트 주요 이정표: 6월 산타크루즈 구리 프로젝트 PFS는 23년 동안 140만 톤의 구리 음극을 생산할 것으로 예상하며, 세후 NPV8는 14억 달러, 내부수익률(IRR)은 20%, 초기 자본 지출은 12억 4천만 달러입니다. 현재 자금 조달 협상이 진행 중입니다. 자회사 코르도바는 EIA 승인과 주주 투표를 조건으로 JCHX에 남은 50% 알라크란 지분을 최대 1억 2,800만 달러에 매각하기로 합의했습니다. VRB 매수자인 레드 선은 1,000만 달러 분할금 납부를 놓쳤으며, 현재 8월 31일까지 500만 달러, 10월 31일까지 500만 달러 납부가 예상됩니다.
전망: 경영진은 현재 유동성이 12개월 이상 운영 자금을 지원할 것으로 보고 있으며, 산타크루즈 건설 결정 시 외부 자금 조달 필요성이 가속화될 것입니다.
Résumé T2-25 : Ivanhoe Electric (IE) a généré un chiffre d'affaires de 1,1 million de dollars (+98 % en glissement annuel) grâce à sa filiale de traitement de données, dégageant un bénéfice brut de 0,8 million de dollars. Les dépenses d'exploration ont chuté de 62 % à 14,1 millions de dollars, la campagne de forage de Santa Cruz ayant diminué après l'étude de faisabilité préliminaire (PFS) ; les frais généraux et administratifs ont reculé de 9 % à 9,7 millions de dollars. La perte nette attribuable aux actionnaires ordinaires s'est réduite de 49 % à 23,9 millions de dollars (0,18 $/action) ; la perte semestrielle a diminué de 47 % à 54,4 millions de dollars.
Bilan : La trésorerie et équivalents ont augmenté à 88,1 millions de dollars contre 41,0 millions à la fin de l'année, grâce à une émission d'actions/bons de souscription de 65,8 millions en février. Le fonds de roulement s'est amélioré à 77,1 millions et les capitaux propres à 310,8 millions. La dette comprend une note foncière Santa Cruz de 38,1 millions (prime + 1 %) et une obligation convertible VRB à 8 % de 32,3 millions (échéance juillet 2026) ; le total des passifs a diminué de 5 % à 89,7 millions.
Étapes du projet : Le PFS de juin pour le projet cuivre Santa Cruz prévoit 1,4 Mt de cathodes de cuivre sur 23 ans avec une VAN après impôt (NPV8) de 1,4 milliard de dollars, un TRI de 20 % et un capex initial de 1,24 milliard ; les discussions de financement sont en cours. La filiale Cordoba a accepté de vendre sa participation restante de 50 % dans Alacrán à JCHX pour un maximum de 128 millions de dollars, sous réserve de l'approbation de l'EIE et du vote des actionnaires. L'acheteur de VRB, Red Sun, a manqué un versement de 10 millions ; 5 millions sont désormais attendus d'ici le 31 août et 5 millions d'ici le 31 octobre.
Perspectives : La direction estime que la liquidité actuelle finance les opérations pour ≥12 mois ; une décision de construction à Santa Cruz accélérerait les besoins de financement externe.
Q2-25 Überblick: Ivanhoe Electric (IE) erzielte 1,1 Millionen US-Dollar Umsatz (+98 % im Jahresvergleich) durch seine Datenverarbeitungstochter, mit einem Bruttogewinn von 0,8 Millionen US-Dollar. Die Explorationsausgaben sanken um 62 % auf 14,1 Millionen US-Dollar, da die Bohrungen in Santa Cruz nach der vorläufigen Machbarkeitsstudie (PFS) zurückgingen; die allgemeinen Verwaltungsaufwendungen (G&A) fielen um 9 % auf 9,7 Millionen US-Dollar. Der Nettoverlust für Stammaktionäre verringerte sich um 49 % auf 23,9 Millionen US-Dollar (0,18 $/Aktie); der Halbjahresverlust sank um 47 % auf 54,4 Millionen US-Dollar.
Bilanz: Zahlungsmittel und Zahlungsmitteläquivalente stiegen von 41,0 Millionen US-Dollar zum Jahresende auf 88,1 Millionen US-Dollar, angetrieben durch ein Aktien-/Warrant-Angebot im Februar in Höhe von 65,8 Millionen US-Dollar. Das Working Capital verbesserte sich auf 77,1 Millionen US-Dollar und das Eigenkapital auf 310,8 Millionen US-Dollar. Die Verbindlichkeiten umfassen eine Santa Cruz Landanleihe in Höhe von 38,1 Millionen US-Dollar (Prime + 1 %) und eine VRB 8 % Wandelanleihe über 32,3 Millionen US-Dollar (Fälligkeit Juli 2026); die Gesamtverbindlichkeiten sanken um 5 % auf 89,7 Millionen US-Dollar.
Projektmeilensteine: Die Juni-PFS für das Santa Cruz Kupferprojekt prognostiziert 1,4 Mio. Tonnen Kupferkathoden über 23 Jahre mit einem nach Steuern berechneten Kapitalwert (NPV8) von 1,4 Mrd. US-Dollar, einer IRR von 20 % und anfänglichen Investitionskosten von 1,24 Mrd. US-Dollar; Finanzierungsverhandlungen laufen. Die Tochtergesellschaft Cordoba hat zugestimmt, ihren verbleibenden 50 %-Anteil an Alacrán an JCHX für bis zu 128 Mio. US-Dollar zu verkaufen, vorbehaltlich der Genehmigung der Umweltverträglichkeitsprüfung (EIA) und der Zustimmung der Aktionäre. Der Käufer der VRB, Red Sun, hat eine 10-Millionen-Dollar-Zahlung verpasst; nun werden 5 Millionen bis zum 31. August und weitere 5 Millionen bis zum 31. Oktober erwartet.
Ausblick: Das Management geht davon aus, dass die aktuelle Liquidität die Geschäftstätigkeit für ≥12 Monate finanziert; eine Baubeschluss für Santa Cruz würde den Finanzierungsbedarf von externen Quellen beschleunigen.
- Net loss reduced ~49% YoY, reflecting lower exploration and G&A spending.
- Cash & equivalents more than doubled to US$88.1 million after a US$65.8 million equity raise, boosting 12-month liquidity.
- Santa Cruz PFS delivers attractive economics (NPV8 US$1.4 bn, 20% IRR) and provides a clear development roadmap.
- Proposed US$128 million Alacrán divestiture could add significant non-dilutive funding.
- Exploration expenses down 63% YTD, demonstrating cost control.
- Company remains pre-revenue; H1-25 sales of US$1.8 million cover only 2% of operating loss.
- US$1.24 billion capex requirement for Santa Cruz exceeds current liquidity, creating substantial financing risk.
- Outstanding debts: US$38.1 million land note and US$32.3 million convertible bond mature within five years.
- Red Sun defaulted on a US$10 million payment owed to VRB, signalling collection and JV counterparty risk.
- Impairment charge of US$2.6 million on non-core property indicates asset write-down risk.
Insights
TL;DR: Losses shrinking, cash rebuilt, PFS derisks flagship asset but billion-dollar capex keeps valuation hinge on future funding.
Quarterly loss halved as exploration spend normalized post-PFS, highlighting management’s discipline. The US$88 million cash pile, augmented by February’s unit financing, provides a year of runway to progress permitting and project finance workstreams. Santa Cruz economics (NPV8 US$1.4 bn vs current market cap ~US$1 bn) underline value creation potential, though the US$1.24 bn initial capex is a material hurdle. Sale of Alacrán could add up to US$100 million net, offering optionality without equity dilution. Nevertheless, revenue remains immaterial and the missed VRB China payment underscores counter-party risk. Overall, the filing is strategically positive but financially neutral until project funding clarity emerges.
TL;DR: Early-stage issuer still cash-burning; large capex, debt maturities and payment default keep risk profile elevated.
IE trimmed liabilities but retains US$70 million of debt, including a land note with US$36 million due over three years and a convertible bond maturing in 2026. Project execution risk is high: Santa Cruz needs >14× current cash to build. Dependence on equity markets and government/strategic backing is acute. The Alacrán sale faces permitting and shareholder contingencies, while the US$10 million Red Sun arrears highlight collection uncertainty. Foreign JV losses widened to US$7.2 million, and impairment signals ongoing portfolio pruning. Despite improved cash, I view overall disclosure as credit-neutral to slightly negative pending funding visibility.
Riepilogo Q2-25: Ivanhoe Electric (IE) ha generato 1,1 milioni di dollari di ricavi (+98% su base annua) dalla sua controllata di elaborazione dati, con un utile lordo di 0,8 milioni di dollari. La spesa per l'esplorazione è diminuita del 62%, attestandosi a 14,1 milioni di dollari, poiché le perforazioni a Santa Cruz sono diminuite dopo lo Studio di Fattibilità Preliminare (PFS); le spese generali e amministrative sono scese del 9% a 9,7 milioni di dollari. La perdita netta attribuibile agli azionisti comuni si è ridotta del 49% a 23,9 milioni di dollari (0,18 $/azione); la perdita semestrale è diminuita del 47% a 54,4 milioni di dollari.
Bilancio: La liquidità e le equivalenti sono aumentate a 88,1 milioni di dollari rispetto ai 41,0 milioni di fine anno, grazie a un'offerta azionaria/diritti di sottoscrizione da 65,8 milioni di dollari a febbraio. Il capitale circolante è migliorato a 77,1 milioni di dollari e il patrimonio netto a 310,8 milioni di dollari. Il debito comprende una nota fondiaria Santa Cruz da 38,1 milioni di dollari (prime + 1%) e un'obbligazione convertibile VRB all'8% da 32,3 milioni di dollari (scadenza luglio 2026); le passività totali sono diminuite del 5% a 89,7 milioni di dollari.
Traguardi del progetto: Il PFS di giugno per il progetto Santa Cruz Copper prevede 1,4 Mt di rame catodico in 23 anni, con un valore attuale netto post-tasse (NPV8) di 1,4 miliardi di dollari, un IRR del 20% e un capex iniziale di 1,24 miliardi di dollari; sono in corso trattative per il finanziamento. La controllata Cordoba ha concordato la vendita del restante 50% della partecipazione in Alacrán a JCHX per un massimo di 128 milioni di dollari, subordinata all'approvazione della valutazione ambientale (EIA) e al voto degli azionisti. L'acquirente di VRB, Red Sun, non ha rispettato una rata da 10 milioni di dollari; ora si prevede un pagamento di 5 milioni entro il 31 agosto e altri 5 milioni entro il 31 ottobre.
Prospettive: La direzione ritiene che la liquidità attuale finanzi operazioni per almeno 12 mesi; una decisione di costruzione a Santa Cruz accelererebbe le necessità di finanziamento esterno.
Resumen Q2-25: Ivanhoe Electric (IE) generó ingresos de 1,1 millones de dólares (+98% interanual) a partir de su subsidiaria de procesamiento de datos, con un beneficio bruto de 0,8 millones de dólares. El gasto en exploración cayó un 62% hasta 14,1 millones de dólares, ya que la perforación en Santa Cruz se redujo tras el Estudio de Factibilidad Preliminar (PFS); los gastos generales y administrativos disminuyeron un 9% hasta 9,7 millones de dólares. La pérdida neta atribuible a los accionistas comunes se redujo un 49% hasta 23,9 millones de dólares (0,18 $/acción); la pérdida semestral bajó un 47% hasta 54,4 millones de dólares.
Balance: El efectivo y equivalentes aumentaron a 88,1 millones de dólares desde 41,0 millones a fin de año, impulsados por una oferta de acciones/bonos de 65,8 millones en febrero. El capital de trabajo mejoró a 77,1 millones y el patrimonio neto a 310,8 millones. La deuda incluye una nota de tierras de Santa Cruz por 38,1 millones de dólares (prime + 1%) y un bono convertible VRB al 8% de 32,3 millones (vence en julio de 2026); los pasivos totales cayeron un 5% hasta 89,7 millones.
Hitos del proyecto: El PFS de junio para el Proyecto de Cobre Santa Cruz proyecta 1,4 Mt de cátodos de cobre durante 23 años con un VAN después de impuestos (NPV8) de 1,4 mil millones de dólares, una TIR del 20% y un capex inicial de 1,24 mil millones; se están llevando a cabo negociaciones de financiamiento. La subsidiaria Córdoba acordó vender su participación restante del 50% en Alacrán a JCHX por hasta 128 millones de dólares, condicionado a la aprobación de la EIA y votación de accionistas. El comprador de VRB, Red Sun, incumplió un pago de 10 millones; ahora se espera un pago de 5 millones para el 31 de agosto y otros 5 millones para el 31 de octubre.
Perspectivas: La gerencia considera que la liquidez actual financia las operaciones por ≥12 meses; una decisión de construcción en Santa Cruz aceleraría las necesidades de financiamiento externo.
2분기 25 요약: Ivanhoe Electric(IE)는 데이터 처리 자회사에서 110만 달러의 매출(전년 대비 98% 증가)을 올렸으며, 총이익은 80만 달러를 기록했습니다. 산타크루즈 시추가 예비 타당성 조사(PFS) 후 축소되면서 탐사비 지출은 62% 감소한 1,410만 달러를 기록했고, 일반관리비는 9% 줄어든 970만 달러였습니다. 보통주주에 대한 순손실은 49% 감소한 2,390만 달러(주당 0.18달러)였으며, 6개월 손실은 47% 줄어든 5,440만 달러였습니다.
재무상태표: 현금 및 현금성 자산은 연말 4,100만 달러에서 8,810만 달러로 증가했으며, 이는 2월에 실시된 6,580만 달러 규모의 주식/워런트 공모에 기인합니다. 운전자본은 7,710만 달러로 개선되었고, 자본총계는 3억 1,080만 달러입니다. 부채는 산타크루즈 토지 대출 3,810만 달러(프라임 금리 + 1%)와 8% 이자 VRB 전환사채 3,230만 달러(만기 2026년 7월)로 구성되며, 총 부채는 5% 감소한 8,970만 달러입니다.
프로젝트 주요 이정표: 6월 산타크루즈 구리 프로젝트 PFS는 23년 동안 140만 톤의 구리 음극을 생산할 것으로 예상하며, 세후 NPV8는 14억 달러, 내부수익률(IRR)은 20%, 초기 자본 지출은 12억 4천만 달러입니다. 현재 자금 조달 협상이 진행 중입니다. 자회사 코르도바는 EIA 승인과 주주 투표를 조건으로 JCHX에 남은 50% 알라크란 지분을 최대 1억 2,800만 달러에 매각하기로 합의했습니다. VRB 매수자인 레드 선은 1,000만 달러 분할금 납부를 놓쳤으며, 현재 8월 31일까지 500만 달러, 10월 31일까지 500만 달러 납부가 예상됩니다.
전망: 경영진은 현재 유동성이 12개월 이상 운영 자금을 지원할 것으로 보고 있으며, 산타크루즈 건설 결정 시 외부 자금 조달 필요성이 가속화될 것입니다.
Résumé T2-25 : Ivanhoe Electric (IE) a généré un chiffre d'affaires de 1,1 million de dollars (+98 % en glissement annuel) grâce à sa filiale de traitement de données, dégageant un bénéfice brut de 0,8 million de dollars. Les dépenses d'exploration ont chuté de 62 % à 14,1 millions de dollars, la campagne de forage de Santa Cruz ayant diminué après l'étude de faisabilité préliminaire (PFS) ; les frais généraux et administratifs ont reculé de 9 % à 9,7 millions de dollars. La perte nette attribuable aux actionnaires ordinaires s'est réduite de 49 % à 23,9 millions de dollars (0,18 $/action) ; la perte semestrielle a diminué de 47 % à 54,4 millions de dollars.
Bilan : La trésorerie et équivalents ont augmenté à 88,1 millions de dollars contre 41,0 millions à la fin de l'année, grâce à une émission d'actions/bons de souscription de 65,8 millions en février. Le fonds de roulement s'est amélioré à 77,1 millions et les capitaux propres à 310,8 millions. La dette comprend une note foncière Santa Cruz de 38,1 millions (prime + 1 %) et une obligation convertible VRB à 8 % de 32,3 millions (échéance juillet 2026) ; le total des passifs a diminué de 5 % à 89,7 millions.
Étapes du projet : Le PFS de juin pour le projet cuivre Santa Cruz prévoit 1,4 Mt de cathodes de cuivre sur 23 ans avec une VAN après impôt (NPV8) de 1,4 milliard de dollars, un TRI de 20 % et un capex initial de 1,24 milliard ; les discussions de financement sont en cours. La filiale Cordoba a accepté de vendre sa participation restante de 50 % dans Alacrán à JCHX pour un maximum de 128 millions de dollars, sous réserve de l'approbation de l'EIE et du vote des actionnaires. L'acheteur de VRB, Red Sun, a manqué un versement de 10 millions ; 5 millions sont désormais attendus d'ici le 31 août et 5 millions d'ici le 31 octobre.
Perspectives : La direction estime que la liquidité actuelle finance les opérations pour ≥12 mois ; une décision de construction à Santa Cruz accélérerait les besoins de financement externe.
Q2-25 Überblick: Ivanhoe Electric (IE) erzielte 1,1 Millionen US-Dollar Umsatz (+98 % im Jahresvergleich) durch seine Datenverarbeitungstochter, mit einem Bruttogewinn von 0,8 Millionen US-Dollar. Die Explorationsausgaben sanken um 62 % auf 14,1 Millionen US-Dollar, da die Bohrungen in Santa Cruz nach der vorläufigen Machbarkeitsstudie (PFS) zurückgingen; die allgemeinen Verwaltungsaufwendungen (G&A) fielen um 9 % auf 9,7 Millionen US-Dollar. Der Nettoverlust für Stammaktionäre verringerte sich um 49 % auf 23,9 Millionen US-Dollar (0,18 $/Aktie); der Halbjahresverlust sank um 47 % auf 54,4 Millionen US-Dollar.
Bilanz: Zahlungsmittel und Zahlungsmitteläquivalente stiegen von 41,0 Millionen US-Dollar zum Jahresende auf 88,1 Millionen US-Dollar, angetrieben durch ein Aktien-/Warrant-Angebot im Februar in Höhe von 65,8 Millionen US-Dollar. Das Working Capital verbesserte sich auf 77,1 Millionen US-Dollar und das Eigenkapital auf 310,8 Millionen US-Dollar. Die Verbindlichkeiten umfassen eine Santa Cruz Landanleihe in Höhe von 38,1 Millionen US-Dollar (Prime + 1 %) und eine VRB 8 % Wandelanleihe über 32,3 Millionen US-Dollar (Fälligkeit Juli 2026); die Gesamtverbindlichkeiten sanken um 5 % auf 89,7 Millionen US-Dollar.
Projektmeilensteine: Die Juni-PFS für das Santa Cruz Kupferprojekt prognostiziert 1,4 Mio. Tonnen Kupferkathoden über 23 Jahre mit einem nach Steuern berechneten Kapitalwert (NPV8) von 1,4 Mrd. US-Dollar, einer IRR von 20 % und anfänglichen Investitionskosten von 1,24 Mrd. US-Dollar; Finanzierungsverhandlungen laufen. Die Tochtergesellschaft Cordoba hat zugestimmt, ihren verbleibenden 50 %-Anteil an Alacrán an JCHX für bis zu 128 Mio. US-Dollar zu verkaufen, vorbehaltlich der Genehmigung der Umweltverträglichkeitsprüfung (EIA) und der Zustimmung der Aktionäre. Der Käufer der VRB, Red Sun, hat eine 10-Millionen-Dollar-Zahlung verpasst; nun werden 5 Millionen bis zum 31. August und weitere 5 Millionen bis zum 31. Oktober erwartet.
Ausblick: Das Management geht davon aus, dass die aktuelle Liquidität die Geschäftstätigkeit für ≥12 Monate finanziert; eine Baubeschluss für Santa Cruz würde den Finanzierungsbedarf von externen Quellen beschleunigen.
AESI
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer |
(Address of principal executive offices) |
(Zip Code) |
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
|
Trading Symbol(s) |
|
Name of each exchange on which registered |
|
|
NYSE Texas |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
|
☒ |
|
Accelerated filer |
|
☐ |
|
Non-accelerated filer |
|
☐ |
|
Smaller reporting company |
|
|
Emerging growth company |
|
|
|
|
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of July 31, 2025, the registrant had
Table of Contents
|
|
Page |
PART I. |
FINANCIAL INFORMATION |
1 |
|
|
|
Item 1. |
Financial Statements (Unaudited) |
1 |
|
Condensed Consolidated Balance Sheets |
1 |
|
Condensed Consolidated Statements of Operations |
2 |
|
Condensed Consolidated Statements of Stockholders’ Equity |
3 |
|
Condensed Consolidated Statements of Cash Flows |
4 |
|
Notes to Unaudited Condensed Consolidated Financial Statements |
5 |
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
36 |
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
53 |
Item 4. |
Controls and Procedures |
53 |
|
|
|
PART II. |
OTHER INFORMATION |
55 |
|
|
|
Item 1. |
Legal Proceedings |
55 |
Item 1A. |
Risk Factors |
55 |
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
56 |
Item 3. |
Defaults Upon Senior Securities |
56 |
Item 4. |
Mine Safety Disclosures |
56 |
Item 5. |
Other Information |
56 |
Item 6. |
Exhibits |
57 |
SIGNATURES |
58 |
|
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
Atlas Energy Solutions Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share data)
|
|
June 30, 2025 |
|
|
December 31, 2024 |
|
||
|
|
(Unaudited) |
|
|
|
|
||
Assets |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
||
Accounts receivable, net |
|
|
|
|
|
|
||
Inventories |
|
|
|
|
|
|
||
Spare part inventories, net |
|
|
|
|
|
|
||
Prepaid expenses and other current assets |
|
|
|
|
|
|
||
Total current assets |
|
|
|
|
|
|
||
Property, plant and equipment, net |
|
|
|
|
|
|
||
Operating lease right-of-use assets |
|
|
|
|
|
|
||
Finance lease right-of-use assets |
|
|
|
|
|
|
||
Goodwill |
|
|
|
|
|
|
||
Intangible assets, net |
|
|
|
|
|
|
||
Other long-term assets |
|
|
|
|
|
|
||
Total assets |
|
$ |
|
|
$ |
|
||
Liabilities and stockholders’ equity |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
|
|
$ |
|
||
Accounts payable - related parties |
|
|
|
|
|
|
||
Accrued liabilities |
|
|
|
|
|
|
||
Current portion of long-term debt |
|
|
|
|
|
|
||
Current portion of operating lease liabilities |
|
|
|
|
|
|
||
Current portion of finance lease liabilities |
|
|
|
|
|
|
||
Current portion of deferred revenue |
|
|
|
|
|
|
||
Other current liabilities |
|
|
|
|
|
|
||
Total current liabilities |
|
|
|
|
|
|
||
Long-term debt, net of discount and deferred financing costs |
|
|
|
|
|
|
||
Deferred tax liabilities |
|
|
|
|
|
|
||
Operating lease liabilities |
|
|
|
|
|
|
||
Finance lease liabilities |
|
|
|
|
|
|
||
Asset retirement obligation |
|
|
|
|
|
|
||
Other long-term liabilities |
|
|
|
|
|
|
||
Total liabilities |
|
|
|
|
|
|
||
Commitments and contingencies (Note 9) |
|
|
|
|
|
|
||
Stockholders’ equity: |
|
|
|
|
|
|
||
Preferred stock, $ |
|
|
|
|
|
|
||
Common Stock, $ |
|
|
|
|
|
|
||
Additional paid-in-capital |
|
|
|
|
|
|
||
Retained earnings (Accumulated deficit) |
|
|
( |
) |
|
|
|
|
Total stockholders’ equity |
|
|
|
|
|
|
||
Total liabilities and stockholders’ equity |
|
$ |
|
|
$ |
|
||
The accompanying notes are an integral part of these condensed consolidated financial statements.
1
Atlas Energy Solutions Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share data)
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Product revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Service revenue |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Rental revenue |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total revenue |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of sales (excluding depreciation, depletion and accretion expense) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation, depletion and accretion expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross profit |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling, general and administrative expense (including stock-based compensation expense of $ |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Credit loss expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization expense of acquired intangible assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss on disposal of assets |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Insurance recovery (gain) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Operating income |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest (expense), net |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Other income, net |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income (loss) before income taxes |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Income tax expense (benefit) |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
Net income (loss) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) per common share |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
0.39 |
|
|
Diluted |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
Weighted average common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
2
Atlas Energy Solutions Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited)
(In thousands)
|
|
Common Stock |
|
|
Additional |
|
|
Retained Earnings |
|
|
Stockholders’ |
|
||||||||
|
|
Shares |
|
|
Value |
|
|
Paid-In-Capital |
|
|
(Accumulated Deficit) |
|
|
Equity |
|
|||||
Balance at December 31, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
— |
|
|
$ |
|
||||
Net Income (loss) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Dividends |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Dividend equivalent rights |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Repurchases of Common Stock under share repurchase program |
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Issuance of Common Stock upon vesting of RSUs, net of shares withheld for income taxes |
|
|
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
||
Issuance of Common Stock from equity offering, net of issuance costs |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||
Equity issued in connection with Moser Acquisition |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||
Balance at June 30, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Common Stock |
|
|
Additional |
|
|
Retained Earnings |
|
|
Stockholders’ |
|
||||||||
|
|
Shares |
|
|
Value |
|
|
Paid-In-Capital |
|
|
(Accumulated Deficit) |
|
|
Equity |
|
|||||
Balance at December 31, 2023 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Net Income |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Dividends |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Dividend equivalent rights |
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Stock-based compensation |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Issuance of Common Stock upon vesting of RSUs, net of shares withheld for income taxes |
|
|
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
||
Equity issued in connection with Hi-Crush Transaction |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||
Balance at June 30, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
Atlas Energy Solutions Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
|
|
Six Months Ended June 30, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Operating activities: |
|
|
|
|
|
|
||
Net income (loss) |
|
$ |
( |
) |
|
$ |
|
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
||
Depreciation, depletion and accretion expense |
|
|
|
|
|
|
||
Amortization expense of acquired intangible assets |
|
|
|
|
|
|
||
Amortization of debt discount |
|
|
|
|
|
|
||
Amortization of deferred financing costs |
|
|
|
|
|
|
||
Loss on disposal of assets |
|
|
|
|
|
|
||
Stock-based compensation |
|
|
|
|
|
|
||
Deferred income tax |
|
|
( |
) |
|
|
|
|
Credit loss expense |
|
|
|
|
|
|
||
Other |
|
|
( |
) |
|
|
( |
) |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
( |
) |
|
|
( |
) |
Inventories |
|
|
( |
) |
|
|
( |
) |
Spare part inventories |
|
|
( |
) |
|
|
( |
) |
Prepaid expenses and other current assets |
|
|
( |
) |
|
|
( |
) |
Other long-term assets |
|
|
|
|
|
( |
) |
|
Accounts payable |
|
|
( |
) |
|
|
|
|
Accounts payable - related parties |
|
|
( |
) |
|
|
( |
) |
Deferred revenue |
|
|
( |
) |
|
|
( |
) |
Accrued liabilities and other liabilities |
|
|
|
|
|
|
||
Net cash provided by operating activities |
|
|
|
|
|
|
||
Investing activities: |
|
|
|
|
|
|
||
Purchases of property, plant and equipment |
|
|
( |
) |
|
|
( |
) |
Acquisition, net of cash acquired |
|
|
( |
) |
|
|
( |
) |
Proceeds from insurance recovery |
|
|
|
|
|
|
||
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
Financing Activities: |
|
|
|
|
|
|
||
Proceeds from equity offering, net of issuance costs |
|
|
|
|
|
|
||
Proceeds from term loan borrowings |
|
|
|
|
|
|
||
Principal payments on term loan borrowings |
|
|
( |
) |
|
|
( |
) |
Payment on ABL credit facility |
|
|
( |
) |
|
|
|
|
Payment on Deferred Cash Consideration Note |
|
|
( |
) |
|
|
|
|
Payments under finance leases |
|
|
( |
) |
|
|
( |
) |
Repurchases of Common Stock under share repurchase program |
|
|
( |
) |
|
|
|
|
Repayment of equipment finance notes |
|
|
( |
) |
|
|
( |
) |
Dividends |
|
|
( |
) |
|
|
( |
) |
Taxes withheld on vesting RSUs |
|
|
( |
) |
|
|
|
|
Issuance costs associated with debt financing |
|
|
( |
) |
|
|
( |
) |
Proceeds from ABL credit facility |
|
|
|
|
|
|
||
Net cash provided by financing activities |
|
|
|
|
|
|
||
Net increase (decrease) in cash and cash equivalents |
|
|
|
|
|
( |
) |
|
Cash and cash equivalents, beginning of period |
|
|
|
|
|
|
||
Cash and cash equivalents, end of period |
|
$ |
|
|
$ |
|
||
Supplemental cash flow information |
|
|
|
|
|
|
||
Cash paid during the period for: |
|
|
|
|
|
|
||
Interest |
|
$ |
|
|
$ |
|
||
Taxes |
|
$ |
|
|
$ |
|
||
Supplemental disclosure of non-cash investing activities: |
|
|
|
|
|
|
||
Property, plant and equipment in accounts payable and accrued liabilities |
|
$ |
|
|
$ |
|
||
Acquisition consideration, equity issuance |
|
$ |
|
|
$ |
|
||
Equipment assets acquired through debt |
|
$ |
|
|
$ |
|
||
Hi-Crush acquisition consideration, Deferred Cash Consideration Note |
|
$ |
|
|
$ |
|
||
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
Atlas Energy Solutions Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
Note 1 – Business and Organization
Atlas Energy Solutions Inc., a Delaware corporation (f/k/a New Atlas HoldCo. Inc.) (“New Atlas” and together with its subsidiaries “we,” “us,” “our,” or the “Company”), was formed on June 28, 2023, pursuant to the laws of the State of Delaware, and is the successor to AESI Holdings Inc. (f/k/a Atlas Energy Solutions Inc.), a Delaware corporation (“Old Atlas”). New Atlas is a holding company and the ultimate parent company of Atlas Sand Company, LLC (“Atlas LLC”), a Delaware limited liability company formed on April 20, 2017. The Company has
Sand and Logistics
The Company is a producer of high-quality, locally sourced
Power
We provide distributed power solutions through a fleet of more than
Moser Acquisition
On February 24, 2025 (“Moser Closing Date”), the Company completed the acquisition of (i)
The foregoing description of the Moser Acquisition and the Moser Purchase Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Moser Purchase Agreement, a copy of which is filed as Exhibit 2.1 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, filed with the U.S. Securities and Exchange Commission (the “SEC”) on May 6, 2025.
Hi-Crush Transaction
On March 5, 2024 (“Hi-Crush Closing Date”), the Company completed the acquisition of the Permian Basin proppant production and logistics businesses and operations of Hi-Crush Inc., a Delaware corporation (“Hi-Crush”), in exchange for mixed consideration totaling $
5
Note 2 – Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements (the “Financial Statements”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the requirements of the SEC. All adjustments necessary for a fair presentation of the Financial Statements have been included. Such adjustments are of a normal, recurring nature. These Financial Statements include the accounts of New Atlas, Old Atlas, Atlas Sand Operating, LLC, a Delaware limited liability company (“Atlas Operating”), Atlas LLC, and Atlas LLC’s wholly-owned subsidiaries: Atlas Sand Employee Company, LLC; Atlas OLC Employee Company, LLC; Atlas Construction Employee Company, LLC; Atlas Sand Employee Holding Company, LLC; Fountainhead Logistics Employee Company, LLC; Atlas Sand Construction, LLC; OLC Kermit, LLC; OLC Monahans, LLC; Fountainhead Logistics, LLC; Fountainhead Transportation Services, LLC; and Fountainhead Equipment Leasing, LLC.
The Company acquired Moser on February 24, 2025. These Financial Statements include the accounts of Moser AcquisitionCo and Moser Engine Service, Inc. (d/b/a Moser Energy Systems).
The Company acquired Hi-Crush and certain of its wholly-owned subsidiaries on March 5, 2024. These Financial Statements include the accounts of Hi-Crush Operating, LLC (“Hi-Crush Operating”) (f/k/a Hi-Crush Inc.) and the following wholly-owned subsidiaries of Hi-Crush Operating: Hi-Crush LMS LLC; Hi-Crush Investments LLC; OnCore Processing LLC; Hi-Crush Permian Sand LLC; Hi-Crush PODS LLC; NexStage LLC; FB Logistics LLC; BulkTracer Holdings LLC; PropDispatch LLC; Pronghorn Logistics Holdings, LLC; and Pronghorn Logistics, LLC.
The results of operations for the three and six months ended June 30, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025 or for any other period. The Financial Statements and these notes should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2024 included within the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
Consolidation
The Financial Statements include the accounts of the Company and controlled subsidiaries. All intercompany transactions and accounts have been eliminated in consolidation.
Use of Estimates
The preparation of the Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the related disclosure of contingent assets and liabilities at the date of the Financial Statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates used in the preparation of these Financial Statements include, but are not limited to: the proppant reserves and their impact on calculating the depletion expense under the units-of-production method; the depreciation and amortization associated with property, plant and equipment; stock-based compensation; asset retirement obligations; business combinations; valuation of goodwill and acquired intangible assets; and certain liabilities. The Company bases its estimates on historical experience and on various assumptions that are believed to be reasonable under the circumstances. Actual results could differ from those estimates.
Business Combination
Business combinations are accounted for using the acquisition method of accounting in accordance with the Accounting Standards Codification (“ASC”) 805, “Business Combinations.” The purchase price is allocated to the assets acquired and liabilities assumed based on their estimated fair values. Fair value of the acquired assets and liabilities is measured in accordance with the guidance of ASC 820, “Fair Value Measurement.” Any excess purchase price over the fair value of the net identifiable assets acquired is recorded as goodwill. Any acquisition-related costs incurred by the Company are expensed as incurred. Operating results of an acquired business are included in the Company’s results of operations from the date of acquisition. We use all available information to estimate fair values, including quoted market prices, the carrying value of acquired assets and assumed liabilities and valuation techniques such as discounted cash flows, relief-from-royalty (“RFR”) method, with or without method, multi-period excess earnings method (“MPEEM”), or cost to recreate method. We engage third-party appraisal firms to assist in the fair value determination of identifiable long-lived assets, identifiable intangible assets, as well as any contingent consideration that provides for additional consideration to be paid to the seller if certain future conditions are met. These estimates are reviewed during the 12-month measurement period and adjusted as soon as the necessary information becomes available but no later than one year from the acquisition date. The judgments made in determining the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact our financial condition or results of operations.
Since the closing date of the acquisitions, the acquired companies have adopted all of the Company’s accounting policies.
6
Cash and Cash Equivalents
Cash and cash equivalents consist of all highly-liquid investments that are readily convertible into cash and have original maturities of three months or less when purchased. As of June 30, 2025, we have deposits of $
Accounts Receivable and Allowance for Credit Losses
Accounts receivable are recorded at cost when earned and represent claims against third parties that will be settled in cash. These receivables generally do not bear interest. The carrying value of our receivables, net of allowance for credit losses, represents the estimated collectable amount. If events or changes in circumstances indicate specific receivable balances may be impaired, further consideration is given to our ability to collect those balances and the allowance is adjusted accordingly. We perform credit evaluations of new customers, and sometimes require deposits and prepayments, to mitigate credit risk. When it is probable that all or part of an outstanding balance will not be collected, we establish an allowance for credit losses.
We are exposed to credit losses primarily through sales of products, services, and rentals. We analyze accounts receivable on an individual customer and overall basis through review of historical collection experience and current aging status of our customer accounts. We also consider the financial condition and economic environment of our customers in evaluating the need for an allowance. The Company considers its trade receivables to consist of two portfolio segments: general receivables and shortfall receivables. General receivables result from fulfilling a performance obligation associated with a customer contract. Shortfall receivables result when a customer does not meet the minimum purchases over a period of time defined in the applicable contract. For the shortfall receivables, which were $
Inventories
Inventories include raw sand stockpiles, in-process product, finished product available for shipment, and power equipment comprised of generators for sale. Inventories are valued at the lower of cost or net realizable value. Cost is determined using a weighted average cost method. Production costs include direct excavation costs, production personnel and benefits costs, processing costs, rental equipment costs, other costs directly attributable to plant operations, depreciation, and depletion.
Spare Part Inventories
Spare part inventories include critical spares, materials and supplies used in the sand and logistics segment along with equipment parts used in the power segment. Spare part inventories are valued at the lower of cost or net realizable value. Cost is determined using a weighted average cost method.
Goodwill and Acquired Intangible Assets
Goodwill represents the excess of the purchase price over the fair value of the net identifiable assets acquired in a business combination. Goodwill is not amortized, but is reviewed for impairment annually or more frequently when events or changes in circumstances indicate that the carrying value may not be recoverable. Judgments regarding indicators of potential impairment are based on market conditions and operational performance of our business. We may assess our goodwill for impairment initially using a qualitative approach to determine whether conditions exist that indicate it is more likely than not that the carrying value is greater than its fair value, and if such conditions are identified, then a quantitative analysis will be performed to determine if there is any impairment. The fair value is determined using significant unobservable inputs, or Level 3 in the fair value hierarchy. These inputs are based on internal management estimates, forecasts, and significant judgment. If the carrying amount exceeds the fair value, an impairment loss is recognized in the current period in an amount equal to the excess.
7
The Company amortizes the cost of definite-lived intangible assets on a straight-line basis over their estimated useful lives of
Other Intangible Assets
Other intangible assets consist of internal-use software. The Company applies the provisions of ASC 350, “Intangibles-Goodwill and Other.” Costs associated with the acquisition of an internal-use software are capitalized when incurred and amortized over the estimated useful life of the license or application, which is generally
Amortization expense associated with the other intangibles was $
Property, Plant and Equipment, Including Depreciation and Depletion
Property, plant and equipment are recorded at cost and depreciated over their estimated useful lives using either the straight-line method or the units of production method. Construction in progress is comprised of assets which have not been placed into service and is not depreciated until the related assets or improvements are ready to be placed into service.
Costs of improvements and remanufacturing of power equipment that extend economic life or improve service potential are capitalized and depreciated over the remaining useful life of the asset, with routine repairs and maintenance expensed as incurred.
Fixed assets are carried at historical cost.
Plant facilities and equipment |
|
|
Furniture and office equipment |
|
|
Computer and network equipment |
|
|
Buildings and leasehold improvements |
|
|
Logistics equipment (1) |
|
|
Power equipment |
|
(1)
Mine development project costs are capitalized once the deposit is classified as a proven and probable reserve. Mine development costs include engineering, mineralogical studies, drilling and other related costs to develop the mine and remove the overburden to initially expose the mineral and allow for the construction of an access way. Exploration costs are expensed as incurred and classified as exploration expense.
Mining property and development costs are amortized using the units of production method on estimated recoverable tonnage, which equals estimated proven and probable reserves. The impact to reserve estimates is recognized on a prospective basis. Drilling and related costs are capitalized for deposits where proven and probable reserves exist. These activities are directed at obtaining additional information on the deposit or converting non-reserve minerals to proven and probable reserves, with the benefit being realized over a period greater than one year.
Impairment or Disposal of Property, Plant and Equipment
The Company periodically evaluates whether current events or circumstances indicate that the carrying value of our property, plant and equipment assets may not be recoverable. If circumstances indicate that the carrying value may not be recoverable, the Company estimates future undiscounted net cash flows using estimates, including but not limited to estimates of proven and probable sand reserves, estimated future sales prices (considering historical and current prices, price trends and related factors), operating costs and anticipated capital expenditures. If the undiscounted cash flows are less than the carrying value of the assets, the Company recognizes an impairment loss equal to the amount by which the carrying value exceeds the fair value of the assets.
The recoverability of the carrying value of the Company’s mining property and development costs are dependent upon the successful development and commercial production of the Company’s mineral deposit and the related processing facilities. The Company’s evaluation of mineral properties for potential impairment primarily includes evaluating changes in the mineral reserves, or the underlying estimates and assumptions, including estimated production costs. Assessing the economic feasibility requires certain estimates including the prices of products to be produced and processing recovery rates, as well as operating and capital costs.
8
Asset Retirement Obligations
In accordance with ASC 410-20, “Asset Retirement Obligations”, the Company records a liability for asset retirement obligations at the fair value of the estimated costs to retire a tangible long-lived asset at the time the liability is incurred, when there is a legal obligation to incur costs to retire the asset and when a reasonable estimate of the fair value of the obligation can be made. The Company has asset retirement obligations with respect to certain assets due to various contractual obligations to clean and/or dispose of those assets at the time they are retired.
A liability for the fair value of an asset retirement obligation, with a corresponding increase to the carrying value of related long-lived assets, is recognized at the time of an obligating event. The asset is depreciated using the straight-line method, and the discounted liability is increased through accretion over the expected timing of settlement.
The estimated liability is based on third-party estimates of costs to abandon, including estimated economic lives and external estimates as to the cost to bring the land to a state required by the lease agreements. The Company utilized a discounted rate reflecting management’s best estimate of the credit-adjusted risk-free rate. Revisions to the liability could occur due to changes in the estimated costs, changes in the economic life or if federal or state regulators enact new requirements regarding the abandonment. Accretion expense was $
Changes in the asset retirement obligations are as follows (in thousands):
|
|
Six Months Ended June 30, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Beginning Balance |
|
$ |
|
|
$ |
|
||
Revision of estimates |
|
|
|
|
|
|
||
Additions to liabilities |
|
|
|
|
|
|
||
Accretion expense |
|
|
|
|
|
|
||
Settlements |
|
|
( |
) |
|
|
( |
) |
Ending Balance |
|
$ |
|
|
$ |
|
||
Fair Value of Financial Instruments
Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:
Level 1 – Quoted prices in active markets for identical assets or liabilities.
Level 2 – Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 – Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability.
The amounts reported in the balance sheets as current assets or liabilities, including cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable, accrued liabilities and deferred revenues approximate fair value due to the short-term maturities of these instruments. The Company’s policy is to recognize transfers between levels at the end of the period. This disclosure does not impact the Company’s financial position, results of operations or cash flows.
9
As of the dates indicated, our debt consisted of the following (in thousands):
|
|
At June 30, 2025 |
|
|
At December 31, 2024 |
|
|
|
||||||||||
|
|
Carrying Value |
|
|
Fair Value |
|
|
Carrying Value |
|
|
Fair Value |
|
|
Valuation Technique |
||||
Financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Outstanding principal amount of the 2025 Term Loan Credit Facility |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
Level 2 – Market Approach |
||||
Outstanding principal amount of the of the Deferred Cash Consideration Note |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
Level 2 – Market Approach |
||||
Outstanding amount of the other indebtedness |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
Level 1 – Quoted Prices |
||||
Outstanding principal amount of the Initial Term Loan under the 2023 Term Loan Credit Facility |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
Level 2 – Market Approach |
||||
Outstanding principal amount of the ADDT Loan |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
Level 2 – Market Approach |
||||
Outstanding principal amount of the DDT Loan under the 2023 Term Loan Credit Facility |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
Level 2 – Market Approach |
||||
Outstanding principal amount of the 2023 ABL Credit Facility |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
Level 1 – Quoted Prices |
||||
10
Leases
The Company leases office space, equipment, and vehicles under non-cancellable agreements. The Company’s leases may include options to extend or renew at the Company’s discretion. The measurement of the lease term includes options to extend or renew when it is reasonably certain the Company will exercise those options. Lease assets and liabilities are recognized at the commencement date based on the present value of minimum lease payments over the lease term. To determine the present value of future minimum lease payments, the Company uses the implicit rate when readily determinable; however, certain leases do not provide an implicit rate. Therefore, to determine the present value of minimum lease payments, the Company uses the incremental borrowing rate based on the information available at the commencement date of the lease. The Company’s finance lease agreements typically include an interest rate that is used to determine the present value of future lease payments. Short-term operating leases with an initial term of 12 months or less are not recorded on our balance sheet. Minimum lease payments are expensed on a straight-line basis over the lease term, including reasonably certain renewal options.
The Company periodically evaluates whether current events or circumstances indicate that the carrying value of our right-of-use assets exceeds fair value. If such a review should indicate that the carrying amount of right-of-use asset is not recoverable, the Company will reduce the carrying amount of such assets to fair value.
The Company is a lessor as we lease certain power equipment to customers through operating leases. These agreements are short term in nature and have monthly terms with no renewal options that are reasonably certain to exercise, or early termination options based on established terms specific to the individual agreement.
Revenues
Under ASC Topic 606 - Revenue from Contracts with Customers (“ASC 606”), revenue recognition is based on the transfer of control, or the customer’s ability to benefit from the services and products in an amount that reflects the consideration expected to be received in exchange for those services and products. In recognizing revenue for products and services, the transaction price is determined from sales orders or contracts with customers.
The Company generates product revenues from the sale of product that customers purchase for use in the oil and gas industry. Revenues are derived from product sold to customers under supply agreements, the terms of which can extend for over one year, and from spot sales through individual purchase orders executed at prevailing market rates. The Company’s product revenues are primarily a function of the price per ton realized and the volumes sold. Pricing structures under the supply agreements are, in certain cases, subject to certain contractual adjustments and consist of a combination of negotiated pricing and fixed pricing. These arrangements may undergo periodic negotiations regarding pricing and volume requirements, which may occur in volatile market conditions.
The Company generates service revenue by providing transportation, storage solutions, and contract labor services to companies in the oil and gas industry. Transportation services typically consist of transporting product from the plant facilities to the wellsite. The amounts invoiced reflect the transportation services rendered. The amounts invoiced reflect either the contractual monthly minimum, or the length of time the equipment was utilized in the billing period. Labor services provide the customers with supervisory, logistics, or field personnel. The amounts invoiced for storage solutions and contract labor services reflect the amount of time these services were utilized in the billing period. Transportation, storage solutions, and contract labor services are contracted through formal agreements or work orders executed under established pricing terms.
The Company generates rental revenue from the power equipment leases, which include maintenance, parts and service, in the period earned on a straight-line basis, over the term of the contract, regardless of the timing of the billing to customers.
The Company recognizes revenue for product at a point in time following the transfer of control and satisfaction of the performance obligation of such items to the customer, under ASC 606, which typically occurs upon customer pick-up at the facilities. The Company recognizes revenue for services when services are rendered to the customer and the performance obligation is satisfied. The Company’s standard collection terms are generally 30 days, with certain customer payment terms extending up to 60 days.
11
Certain of the Company’s contracts contain shortfall provisions that calculate agreed upon fees that are billed when the customer does not meet the minimum purchases over a period of time defined in each contract and when collectability is reasonably certain. As the Company does not have the ability to predict customers’ orders over the period, there are constraints around the ability to recognize the variability in consideration related to this condition. The Company recognized shortfall provision revenue of $
The Company’s revenue was generated in the United States for the three and six months ended June 30, 2025 and 2024. Revenue is disaggregated by product, service, and rental revenue, no further disaggregation of revenue information is provided.
The Company has elected to use the ASC 606 practical expedients, pursuant to which it has excluded disclosures of transaction prices allocated to remaining performance obligations and when it expects to recognize such revenue. The remaining performance obligations are primarily comprised of unfulfilled contracts to deliver product, most of which hold a remaining duration of less than one year, and of which ultimate transaction prices will be allocated entirely to the unfulfilled contracts. The Company’s transaction prices under these contracts may be impacted by market conditions and potential contract negotiations, which have not yet been determined, and are therefore variable in nature.
The Company has elected to exclude from the measurement of the transaction price all taxes assessed by governmental authorities that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from a customer, such as sales tax, use tax, value-added tax and similar taxes.
Deferred Revenues
The Company occasionally receives prepayments from customers for future deliveries of product or contributions in aid of construction. Amounts received from customers in advance of product deliveries are recorded as contract liabilities referred to as deferred revenues and are recognized as revenue upon delivery of the product. Certain prepayments are secured by collateral interest in certain property, plant and equipment. The Company recognized revenue of $
Changes in the deferred revenues balance are as follows (in thousands):
|
|
Six Months Ended June 30, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Beginning Balance |
|
$ |
|
|
$ |
|
||
Customer prepayment acquired in acquisitions |
|
|
|
|
|
|
||
Consideration received and deferred |
|
|
|
|
|
|
||
Revenue recognized |
|
|
( |
) |
|
|
( |
) |
Ending Balance |
|
$ |
|
|
$ |
|
||
Stock-Based Compensation
We account for stock-based compensation, including grants of incentive units, restricted stock awards, time-based restricted stock units and performance share units, under the measurement and recognition provisions of ASC 718, “Compensation – Stock Compensation.” We account for stock-based compensation by amortizing the fair value of the stock, which is determined at the grant date, on a straight-line basis unless the tranche method is required.
We account for forfeitures as they occur and reverse any previously recognized stock-based compensation expense for the unvested portion of the awards that were forfeited. The number of forfeited shares will be available for purposes of awards under the Company’s Long Term Incentive Plan (the “LTIP”). Stock-based compensation expense is recognized as selling, general and administrative expense on the Company’s condensed consolidated statements of operations.
12
Income Taxes
The Company, under ASC 740–Income Taxes (“ASC 740”), computes its quarterly taxes using an estimated annual effective tax rate which is applied to year-to-date pre-tax book net income, except for discrete items. For the period ended June 30, 2025, the Company determined the best estimate of the annual effective tax rate was the year-to-date effective tax rate which was applied to year-to-date income to estimate quarterly taxes. Income taxes associated with discrete items are computed and recorded in the period that the specific transaction occurs.
ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. The Company evaluates the uncertainty in tax positions taken or expected to be taken in the course of preparing the Financial Statements to determine whether the tax positions are more likely than not of being sustained by the applicable tax authority. However, the conclusions regarding the evaluation are subject to review and may change based on factors including, but not limited to, ongoing analysis of tax laws, regulations, and interpretations thereof.
As of June 30, 2025 and December 31, 2024, the Company did
Recently Issued Accounting Pronouncements
Segments- In November 2023, the Financial Accounting Standard Board (“FASB”) issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses and information used to assess segment performance. The ASU is effective for fiscal years beginning after December 15, 2023 on a retrospective basis, and for interim periods within fiscal years beginning after December 15, 2024. The Company adopted ASU 2023-07, for a further discussion refer to Note 15- Business Segments.
Recently Issued Accounting Pronouncements Not Yet Effective
Income Statement Reporting Disclosures- In November 2024, the FASB issued ASU 2024-03, Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40). The amendments in this update requires additional disclosure of certain costs and expenses within the notes to the financial statements. The new standard is effective for annual periods beginning after December 15, 2026 and interim periods beginning after December 15, 2027. The Company is currently evaluating the impact on the Financial Statements and related disclosures.
13
Note 3 – Acquisitions
Moser Acquisition
On February 24, 2025, the Company completed the Moser Acquisition and acquired
The acquisition-date fair value of the consideration was comprised of the following (in thousands):
|
|
February 24, 2025 |
|
|
Cash to sellers at close (1) |
|
$ |
|
|
Stock consideration (2) |
|
|
|
|
Total |
|
$ |
|
|
(1)
(2)
The Company has applied the acquisition method of accounting in accordance with ASC 805, “Business Combinations,” and recognized assets acquired and liabilities assumed at their fair values as of the date of acquisition, with the excess purchase consideration recorded to goodwill. The fair value of acquired property and equipment were based on both available market data and a cost approach. As the Company finalizes the estimation of the fair value of the assets acquired and liabilities assumed, additional adjustments may be recorded during the measurement period (a period not to exceed 12 months from the acquisition date).
The following table summarizes the preliminary allocation of the purchase price to the fair value of assets acquired and liabilities assumed as of February 24, 2025, including measurement period adjustments through June 30, 2025 (in thousands):
|
|
Fair Value |
|
|
|||||||||
|
|
February 24, 2025 |
|
|
Adjustments |
|
|
June 30, 2025 |
|
|
|||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
Accounts receivable |
|
|
|
|
|
|
|
|
|
|
|||
Spare parts inventories |
|
|
|
|
|
( |
) |
|
|
|
|
||
Prepaid expenses and other current assets |
|
|
|
|
|
|
|
|
|
|
|||
Property, plant and equipment |
|
|
|
|
|
( |
) |
|
|
|
|
||
Intangible assets |
|
|
|
|
|
|
|
|
|
|
|||
Operating lease right-of-use assets |
|
|
|
|
|
|
|
|
|
|
|||
Finance lease right-of-use assets |
|
|
|
|
|
|
|
|
|
|
|||
Accounts payable |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
Accrued liabilities |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
Current portion of operating lease liabilities |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
Current portion of finance lease liabilities |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
Current portion of deferred revenue |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
Other current liabilities |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
Deferred tax liabilities |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
Operating lease liabilities |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
Finance lease liabilities |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
Goodwill |
|
|
|
|
|
|
|
|
|
|
|||
Net Assets Acquired |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
14
The preliminary purchase price allocation is subject to further refinement and may require significant adjustments to arrive at the final purchase price allocation. The above fair values of assets acquired and liabilities assumed are preliminary and are based on the information that was available as of the reporting date. The Company retained an independent appraiser to determine the fair value of assets acquired and liabilities assumed. In accordance with the acquisition method of accounting, the purchase price of Moser has been allocated to the acquired assets and assumed liabilities based on their preliminary estimated acquisition date fair values. The fair value estimates were based on income, market, and cost valuation methods. These fair values were based on inputs that are not observable in the market and thus represent Level 3 inputs. Several significant assumptions and estimates were involved in the application of these valuation methods, including discount rates, future expected cash flows and other future events that are based on the Company’s best judgment from the information available. The excess of the total consideration over the estimated fair value of the amounts initially assigned to the identifiable assets acquired and liabilities assumed has been recorded as goodwill. The final determination of the fair value of certain assets and liabilities will be completed as soon as the necessary information becomes available but no later than one year from the acquisition date. The Company expects to continue to obtain information for the purpose of determining the fair value of the assets acquired and liabilities assumed on the acquisition date throughout the remainder of the measurement period. As of June 30, 2025, we had purchase price adjustments that resulted in a de minimis change in depreciation, depletion and accretion expense and amortization expense on the condensed consolidated statements of operations for both the three and six months ended June 30, 2025.
The Company’s condensed consolidated statement of operations includes revenue of $
The following transactions were recognized separately from the acquisition of assets and assumption of liabilities in the Moser Acquisition.
Identifiable Intangible Assets Acquired
The following table summarizes key information underlying identifiable intangible assets related to the Moser Acquisition:
|
|
Useful Life (In years) |
|
Fair Value |
|
|
Customer relationships |
|
|
$ |
|
||
Trade name |
|
|
|
|
||
Proprietary technology (generators) |
|
|
|
|
||
Proprietary technology (military applications) |
|
|
|
|
||
Total |
|
|
|
$ |
|
|
The preliminary estimate of the fair value of the identifiable intangible assets was determined primarily using the income approach and cost approach.
15
Pro Forma Financial Information
The following table summarizes, on an unaudited pro forma basis, the condensed combined results of operations of the Company for the three and six months ended June 30, 2025 and 2024, assuming the Moser Acquisition had occurred on January 1, 2024 (in thousands).
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
|
|
(Unaudited) |
|
|||||||||||||
Revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Net income (loss) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||
The foregoing unaudited pro forma results are for informational purposes only and are not necessarily indicative of the actual results of operations that might have occurred had the Moser Acquisition occurred on January 1, 2024, nor are they necessarily indicative of future results.
The unaudited pro forma information for all periods presented includes the following adjustments, where applicable, for business combination accounting effects resulting from the Moser Acquisition: (i) additional amortization expense related to finite-lived intangible assets acquired, (ii) additional interest expense related to financing for the acquisition, (iii) depreciation expense on property, plant and equipment, and (iv) the related tax effects assuming that the acquisition occurred on January 1, 2024. No assumptions have been applied to the pro forma results of operations regarding potential operating cost savings or other business synergies expected to be achieved.
The significant nonrecurring adjustments reflected in the unaudited pro-forma consolidated information above include the reclassification of the transaction costs to the earliest period presented.
Hi-Crush Transaction
On March 5, 2024, the Company completed the Hi-Crush Transaction and acquired
There have been no adjustments to consideration since December 31, 2024. Refer to the table below for the acquisition-date fair value of the consideration as of March 5, 2024 and December 31, 2024 (in thousands):
|
|
March 5, 2024 |
|
|
Adjustments |
|
|
December 31, 2024 |
|
|
|||
Cash to sellers at close |
|
$ |
|
|
$ |
— |
|
|
$ |
|
|
||
Company Transaction Expenses (sellers’ transaction expenses) (1) |
|
|
|
|
|
|
|
|
|
|
|||
Stock consideration (2) |
|
|
|
|
|
|
|
|
|
|
|||
Deferred Cash Consideration Note (1) |
|
|
|
|
|
( |
) |
|
|
|
|
||
Stockholders’ Representative Expense Fund (1) |
|
|
|
|
|
|
|
|
|
|
|||
Adjustment Holdback Amount (1) (3) |
|
|
|
|
|
|
|
|
|
|
|||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
(1)
(2)
The Company has applied the acquisition method of accounting in accordance with ASC 805, “Business Combinations,” and recognized assets acquired and liabilities assumed at their fair values as of the date of acquisition, with the excess purchase consideration recorded to goodwill. The fair value of acquired property and equipment were based on both available market data and a cost approach.
16
The following table summarizes the allocation of the purchase price to the fair value of assets acquired and liabilities assumed as of March 5, 2024, including adjustments through the measurement period. There were no adjustments since December 31, 2024. Refer to the table below (in thousands):
|
|
Fair Value |
|
|
|||||||||
|
|
March 5, 2024 |
|
|
Adjustments |
|
|
December 31, 2024 |
|
|
|||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
Accounts receivable |
|
|
|
|
|
|
|
|
|
|
|||
Inventories |
|
|
|
|
|
|
|
|
|
|
|||
Spare parts inventories |
|
|
|
|
|
|
|
|
|
|
|||
Prepaid expenses and other current assets |
|
|
|
|
|
|
|
|
|
|
|||
Property, plant and equipment |
|
|
|
|
|
|
|
|
|
|
|||
Intangible assets |
|
|
|
|
|
|
|
|
|
|
|||
Operating lease right-of-use assets |
|
|
|
|
|
|
|
|
|
|
|||
Finance lease right-of-use assets |
|
|
|
|
|
|
|
|
|
|
|||
Other long-term assets |
|
|
|
|
|
|
|
|
|
|
|||
Accounts payable |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
Accrued liabilities |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
Current portion of long-term debt |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
Current portion of operating lease liabilities |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
Current portion of finance lease liabilities |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
Current portion of deferred revenue |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
Other current liabilities (1) |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
Long-term debt, net of discount and deferred financing costs |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
Deferred tax liabilities |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
Operating lease liabilities |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
Finance lease liabilities |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
Deferred revenue |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
Asset retirement obligation |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
Goodwill |
|
|
|
|
|
( |
) |
|
|
|
|
||
Net Assets Acquired (2) |
|
$ |
|
|
$ |
|
|
$ |
|
|
|||
(1)
The Company retained an independent appraiser to determine the fair value of assets acquired and liabilities assumed. In accordance with the acquisition method of accounting, the purchase price of Hi-Crush has been allocated to the acquired assets and assumed liabilities based on their acquisition date fair values. The fair value estimates were based on income, market, and cost valuation methods. These fair values were based on inputs that are not observable in the market and thus represent Level 3 inputs. Several significant assumptions and estimates were involved in the application of these valuation methods, including discount rates, future expected cash flows and other future events that are based on the Company’s best judgment from the information available.
The excess of the total consideration over the estimated fair value of the amounts initially assigned to the identifiable assets acquired and liabilities assumed has been recorded as goodwill. Of the $
The fair value of the identifiable intangible assets was determined using the income approach, which requires a forecast of all of the expected future cash flows either through the with or without method or the RFR method. The fair value of the reserves were valued using the using the income approach through the MPEEM. Reserves are recorded in property, plant and equipment, net on the Company’s condensed consolidated balance sheets.
17
Note 4 – Goodwill and Acquired Intangible Assets
Goodwill
Changes in the carrying value of goodwill (in thousands):
Balance at December 31, 2024 |
|
$ |
|
|
Moser Acquisition |
|
|
|
|
Balance at June 30, 2025 |
|
$ |
|
The Company has applied the acquisition method of accounting in accordance with ASC 805, “Business Combinations,” and recognized assets acquired and liabilities assumed from acquisitions at their fair value as of the date of acquisition, with the excess purchase consideration recorded to goodwill. As the Company finalizes the estimation of the fair value of the assets acquired and liabilities assumed, additional adjustments to the amount of goodwill may be necessary, refer to Note 3 - Acquisitions for further discussion. Goodwill is not amortized, but is evaluated for impairment annually or more frequently when indicators of impairment exist.
Acquired Intangible Assets
The following table presents the detail of acquired intangible assets other than goodwill as of June 30, 2025 and December 31, 2024 (in thousands):
|
|
June 30, 2025 |
|
|
December 31, 2024 |
|
||||||||||||||||||
|
|
Carrying Amount |
|
|
Accumulated Amortization |
|
|
Net |
|
|
Carrying Amount |
|
|
Accumulated Amortization |
|
|
Net |
|
||||||
Customer relationships |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Trade names |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Proprietary technology |
|
|
|
|
|
( |
) |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
||
Total |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Amortization expense recognized during the three and six months ended June 30, 2025, was $
Refer to Note 3 - Acquisitions for additional information over these acquired intangible assets.
Estimated future amortization expense is as follows (in thousands):
Remainder of 2025 |
|
$ |
|
|
2026 |
|
|
|
|
2027 |
|
|
|
|
2028 |
|
|
|
|
2029 |
|
|
|
|
2030 |
|
|
|
|
Thereafter |
|
|
|
|
Total |
|
$ |
|
Note 5 – Inventories
Inventories consisted of the following (in thousands):
|
|
June 30, 2025 |
|
|
December 31, 2024 |
|
||
Raw materials |
|
$ |
|
|
$ |
|
||
Work-in-process |
|
|
|
|
|
|
||
Finished goods |
|
|
|
|
|
|
||
Power equipment |
|
|
|
|
|
|
||
Inventories |
|
$ |
|
|
$ |
|
||
18
Note 6 – Property, Plant and Equipment, Net
Property, plant and equipment, net, consisted of the following (in thousands):
|
|
June 30, 2025 |
|
|
December 31, 2024 |
|
||
Plant facilities associated with productive, depletable properties |
|
$ |
|
|
$ |
|
||
Plant equipment |
|
|
|
|
|
|
||
Land |
|
|
|
|
|
|
||
Furniture and office equipment |
|
|
|
|
|
|
||
Computer and network equipment |
|
|
|
|
|
|
||
Buildings and leasehold improvements |
|
|
|
|
|
|
||
Power equipment |
|
|
|
|
|
|
||
Logistics equipment |
|
|
|
|
|
|
||
Construction in progress |
|
|
|
|
|
|
||
Property, plant and equipment |
|
|
|
|
|
|
||
Less: Accumulated depreciation and depletion |
|
|
( |
) |
|
|
( |
) |
Property, plant and equipment, net |
|
$ |
|
|
$ |
|
||
Depreciation expense recognized in depreciation, depletion and accretion expense was $
Depletion expense recognized in depreciation, depletion and accretion expense was $
Depreciation expense recognized in selling, general and administrative expense was $
Impairment or Disposal of Long-Lived Assets
The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the asset’s carrying amount may not be recoverable. The Company conducts its long-lived asset impairment analyses in accordance with ASC 360-10-15, “Impairment or Disposal of Long-Lived Assets.” The Company did not recognize impairment of long-lived assets or loss on disposal of assets for the three and six months ended June 30, 2025.
During the second quarter of 2024, the Company concluded it had a triggering event requiring an assessment for impairment as a result of the fire at one of the Kermit facilities that caused damage to the physical condition of the Kermit asset group. The Company groups assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities and evaluates the asset group against the sum of the undiscounted future cash flows. If the undiscounted cash flows do not indicate the carrying amount of the asset group is recoverable, an impairment charge is measured as the amount by which the carrying amount of the asset group exceeds its fair value based on discounted cash flow analysis. The Company performed a recoverability test and determined there was no impairment of the associated asset group for the three and six months ended June 30, 2024. The Company recorded a $
19
Note 7 – Leases
Lessor Arrangements
The Company leases power equipment to customers through operating leases. These agreements are short term in nature and have monthly terms with no renewal options that are reasonably certain to be exercised, or early termination options based on established terms specific to the individual agreement.
The following table presents the underlying gross assets and accumulated depreciation of power equipment leases included in property, plant and equipment, net (in thousands):
|
|
June 30, 2025 |
|
|
Gross assets |
|
$ |
|
|
Less: Accumulated depreciation |
|
|
( |
) |
Net assets |
|
$ |
|
|
The Company did
Revenues from the leased power equipment for the three and six months ended June 30, 2025, was $
The estimated future undiscounted cash flows from lessor revenue are not expected to be material as our lessor lease terms are monthly.
Lessee Arrangements
We have operating and finance leases primarily for office space, equipment, and vehicles. The terms and conditions for these leases vary by the type of underlying asset.
Certain leases include variable lease payments for items such as property taxes, insurance, maintenance, and other operating expenses associated with leased assets. Payments that vary based on an index or rate are included in the measurement of lease assets and liabilities at the rate as of the commencement date. All other variable lease payments are excluded from the measurement of lease assets and liabilities, and are recognized in the period in which the obligation for those payments is incurred.
The components of lease cost were as follows (in thousands):
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Finance lease cost: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization of right-of-use assets |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Interest on lease liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating lease cost |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Variable lease cost |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Short-term lease cost |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total lease cost |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Supplemental cash flow and other information related to leases were as follows (in thousands):
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Cash paid for amounts included in the measurement of lease liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating cash outflows from operating leases |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Operating cash outflows from finance leases |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Financing cash outflows from finance leases |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Right-of-use assets obtained in exchange for new lease liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating leases |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Finance leases |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
20
Lease terms and discount rates as of June 30, 2025 and December 31, 2024 are as follows:
|
|
June 30, 2025 |
|
|
December 31, 2024 |
|
||
Weighted-average remaining lease term: |
|
|
|
|
|
|
||
Operating leases |
|
|
|
|
||||
Finance leases |
|
|
|
|
||||
Weighted-average discount rate: |
|
|
|
|
|
|
||
Operating leases |
|
|
% |
|
|
% |
||
Finance leases |
|
|
% |
|
|
% |
||
Future minimum lease commitments as of June 30, 2025 are as follows (in thousands):
|
|
Finance |
|
|
Operating |
|
||
Remainder of 2025 |
|
$ |
|
|
$ |
|
||
2026 |
|
|
|
|
|
|
||
2027 |
|
|
|
|
|
|
||
2028 |
|
|
|
|
|
|
||
2029 |
|
|
|
|
|
|
||
Thereafter |
|
|
|
|
|
|
||
Total lease payments |
|
|
|
|
|
|
||
Less imputed interest |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
On February 17, 2025, we entered into two master lease agreements between subsidiaries of the Company as lessees and On Your Six Capital LLC as the lessor in each case, to fund up to $
As of June 30, 2025, we had $
Note 8 – Debt
Debt consists of the following (in thousands):
|
|
June 30, 2025 |
|
|
December 31, 2024 |
|
||
2025 Term Loan Credit Facility |
|
$ |
|
|
$ |
|
||
Deferred Cash Consideration Note |
|
|
|
|
|
|
||
Other indebtedness |
|
|
|
|
|
|
||
Initial Term Loan under the 2023 Term Loan Credit Facility |
|
|
|
|
|
|
||
ADDT Loan |
|
|
|
|
|
|
||
DDT Loan under the 2023 Term Loan Credit Facility |
|
|
|
|
|
|
||
2023 ABL Credit Facility |
|
|
|
|
|
|
||
Less: Debt discount, net of accumulated amortization of $ |
|
|
( |
) |
|
|
( |
) |
Less: Deferred financing fees, net of accumulated amortization of $ |
|
|
( |
) |
|
|
( |
) |
Less: Current portion (a) |
|
|
( |
) |
|
|
( |
) |
Long-term debt |
|
$ |
|
|
$ |
|
||
(a) The current portion of long-term debt reflects payments based on the terms of the 2025 Term Loan Credit Facility, the Deferred Cash Consideration Note, and other indebtedness. |
|
|||||||
21
2025 Term Loan Credit Facility
On February 21, 2025, Atlas LLC entered into a credit agreement (the “2025 Term Loan Credit Agreement”) with Stonebriar, as administrative agent and initial lender, pursuant to which Stonebriar extended Atlas LLC a term loan credit facility comprised of a $
The 2025 Term Loan Credit Facility includes a discount of $
In the event that the Leverage Ratio (as defined under the 2025 Term Loan Credit Agreement) as of the end of any fiscal quarter ending on or after June 30, 2025 is equal to or greater than
Atlas LLC may voluntarily redeem the loan outstanding under the 2025 Term Loan Credit Facility, provided that any such prepayment shall include a prepayment fee equal to the sum of the Make-Whole Amount (as defined in under the 2025 Term Loan Credit Agreement) plus (a) three percent (
Dividends and distributions to equity holders are permitted to be made pursuant to certain limited exceptions and baskets described in the 2025 Term Loan Credit Agreement and otherwise generally subject to certain restrictions set forth in the 2025 Term Loan Credit Agreement, including the requirement that no Event of Default (as defined under the 2025 Term Loan Credit Agreement) has occurred and is continuing.
The Company used the proceeds from the 2025 Term Loan Credit Facility (i) to refinance the existing 2023 Term Loan Credit Facility and the ADDT Loan (as defined below), (ii) to finance the cash consideration for the Moser Acquisition, and (iii) for general corporate purposes.
The 2025 Term Loan Credit Facility is unconditionally guaranteed, jointly and severally, by Atlas LLC and its subsidiaries and secured by substantially all of the assets of Atlas LLC and its subsidiaries. The 2025 Term Loan Credit Facility is also unconditionally guaranteed on an unsecured basis by the Company.
As of June 30, 2025, Atlas LLC was in compliance with the covenants of the 2025 Term Loan Credit Facility.
22
Deferred Cash Consideration Note
In accordance with the Hi-Crush Merger Agreement, the Company issued a secured PIK toggle seller note in an aggregate principle amount of $
The Deferred Cash Consideration Note included $
Atlas LLC’s obligations under the Deferred Cash Consideration Note are secured by certain of the assets acquired in connection with the Hi-Crush Transaction. The Deferred Cash Consideration Note is also unconditionally guaranteed by Atlas LLC on an unsecured basis.
Partial Repayment of the Deferred Cash Consideration Note
In February 2025, the Company used a portion of the proceeds from the Equity Offering (as defined below), discussed in Note 10 - Equity, to repay $
2023 Term Loan Credit Facility
On July 31, 2023, Atlas LLC entered into a credit agreement (the “2023 Term Loan Credit Agreement”) with Stonebriar, as administrative agent and initial lender, pursuant to which Stonebriar extended Atlas LLC a term loan credit facility comprising a $
On February 21, 2025, Atlas LLC entered into the 2025 Term Loan Credit Agreement with Stonebriar, proceeds from which were used to repay $
2023 ABL Credit Facility
On February 22, 2023, Atlas LLC, certain of its subsidiaries, as guarantors, Bank of America, N.A., as administrative agent (the “ABL Agent”), and certain financial institutions party thereto as lenders (the “2023 ABL Lenders”) entered into a Loan, Security and Guaranty Agreement (the “2023 ABL Credit Agreement”) pursuant to which the 2023 ABL Lenders provide revolving credit financing to the Company in an aggregate principal amount of up to $
Atlas LLC may also request swingline loans under the 2023 ABL Credit Agreement in an aggregate principal amount not to exceed $
23
Borrowings under the 2023 ABL Credit Facility bear interest, at Atlas LLC’s option, at either a base rate or Term SOFR (as defined in the 2023 ABL Credit Agreement), as applicable, plus an applicable margin based on average availability as set forth in the 2023 ABL Credit Agreement. Term SOFR loans bear interest at Term SOFR for the applicable interest period plus an applicable margin, which ranges from
The Borrowing Base was initially set at $
On March 5, 2024 and November 12, 2024, the Company drew down $
The 2023 ABL Credit Facility requires that if Availability is less than the greater of (i)
Under the 2023 ABL Credit Agreement, Atlas LLC is permitted to make payments of dividends and distributions pursuant to certain limited exceptions and baskets set forth therein and otherwise generally subject to certain restrictions described therein, including that (i) no Event of Default (as defined under the 2023 ABL Credit Agreement) has occurred and is continuing, and (ii) no loans and no more than $
The 2023 ABL Credit Facility contains certain customary representations and warranties, affirmative and negative covenants, and events of default. As of June 30, 2025, the Company was in compliance with the covenants under the 2023 ABL Credit Facility.
The 2023 ABL Credit Facility is unconditionally guaranteed, jointly and severally, by Atlas LLC and its subsidiaries and secured by substantially all of the assets of Atlas LLC and its subsidiaries.
24
First Amendment to the 2023 ABL Credit Agreement
On February 26, 2024, Atlas LLC and certain other subsidiaries of the Company entered into the First Amendment to Loan, Security and Guaranty Agreement (the “ABL Amendment”), among Atlas LLC, the subsidiary guarantors party thereto, the lenders party thereto and the ABL Agent, which amends the 2023 ABL Credit Agreement.
The ABL Amendment increased the revolving credit commitment to $
The ABL Amendment requires that if Availability is less than the greater of (i)
Under the ABL Amendment, Atlas LLC is permitted to make payments of dividends and distributions pursuant to certain limited exceptions and baskets set forth therein and otherwise generally subject to certain restrictions described therein, including that (i) no Event of Default (as defined under the 2023 ABL Credit Agreement) has occurred and is continuing, and (ii) no loans and no more than $
Second Amendment to the 2023 ABL Credit Agreement
On January 27, 2025, Atlas LLC and certain other subsidiaries of the Company entered into that certain Second Amendment to Loan, Security and Guaranty Agreement (the “Second ABL Amendment”), among Atlas LLC, as the borrower, the subsidiary guarantors party thereto, the lenders party thereto and Bank of America, N.A., as the ABL Agent. The Second ABL Amendment amends that certain Loan, Security and Guaranty Agreement dated as of February 22, 2023, as amended.
The Second ABL Amendment permitted the Company and its applicable affiliates to enter into the Second Term Loan Amendment, pursuant to which the principal amount of the existing DDT Loan was increased by an aggregate principal amount of $
Third Amendment to the 2023 ABL Credit Agreement
On February 21, 2025, Atlas LLC and certain other subsidiaries of the Company entered into that certain Third Amendment to Loan, Security and Guaranty Agreement (the “Third ABL Amendment”), among Atlas LLC, as the borrower, the subsidiary guarantors party thereto, the lenders party thereto and Bank of America, N.A., as the ABL Agent. The Third ABL Amendment amends that certain Loan, Security and Guaranty Agreement dated as of February 22, 2023, as amended.
The Third ABL Amendment permitted the Company and its applicable affiliates to enter into the 2025 Term Loan Credit Agreement, pursuant to which Atlas LLC borrowed $
Repayment of the 2023 ABL Credit Facility
In February 2025, the Company used a portion of the proceeds from the Equity Offering (as defined below), discussed in Note 10 -Equity, to repay the remaining $
As of June 30, 2025, Atlas LLC had
25
Other Indebtedness
Note 9 – Commitments and Contingencies
Royalty Agreements
The Company has entered into royalty agreements under which it is committed to pay royalties on sand sold from its production facilities for which the Company has received payment by the customer. Atlas LLC entered into a royalty agreement associated with its leased property at the Kermit facility and a mining agreement associated with its leased property at the Monahans facility, in each case, with The Sealy & Smith Foundation, a related party. The royalty agreement associated with the Kermit facility terminated on the date of our initial public offering (the “IPO”), pursuant to the terms of the agreement. Under the mining agreement associated with the Monahans facility, we are committed to pay royalties on product sold from that facility and are required to pay a minimum royalty of $
On March 1, 2024, the Company entered into a pooling agreement with the General Land Office of Texas (“GLO”) that establishes a pooled unit across our fee owned lands and leased lands at the Kermit property. The pooling agreement has a current effective blended royalty rate of
Royalty expense associated with these agreements is recorded as the product is sold and is included in costs of sales. Royalty expense associated with these agreements were less than
Standby Letters of Credit
As of June 30, 2025 and December 31, 2024, we had $
Purchase Commitments
In connection with our normal operations, we enter short-term purchase obligations for products and services.
In March 2025, a vendor reached key performance and operational milestones that committed the Company to order an initial
26
Litigation
Note 10 – Stockholders Equity
Common Stock
The Company is authorized to issue
Share Repurchase Program
On October 24, 2024, the Board of Directors of the Company (the “Board”) authorized a share repurchase program under which the Company may repurchase up to $
The shares may be repurchased from time to time in open market transactions at prevailing market prices, through block trades, in privately negotiated transactions, through derivative transactions or by other means and in accordance with federal securities laws. The timing, as well as the number and value of shares repurchased under the program, will be determined by the Company at its discretion and will depend on a variety of factors including management’s assessment of the intrinsic value of the Company’s Common Stock, the market price of the Company’s Common Stock, general market and economic conditions, available liquidity, compliance with the Company’s debt and other agreements, applicable legal requirements, and other considerations. The exact number of shares to be repurchased by the Company is not guaranteed, and the program may be suspended, modified, or discontinued at any time without prior notice.
Any such share repurchases may be subject to a
Equity Offering
On February 3, 2025, the Company conducted an underwritten public offering of
Dividends and Distributions
On February 11, 2025, the Company declared a dividend of $
On May 2, 2025, the Company declared a dividend of $
27
Note 11 – Stock-Based Compensation
LTIP
On March 8, 2023, we adopted the LTIP for the benefit of employees, directors and consultants of the Company and its affiliates. The LTIP provides for the grant of all or any of the following types of awards: (1) incentive stock options qualified as such under U.S. federal income tax laws; (2) stock options that do not qualify as incentive stock options; (3) stock appreciation rights; (4) restricted stock awards; (5) restricted stock units (“RSUs”); (6) bonus stock; (7) dividend equivalents; (8) other stock-based awards; (9) cash awards; and (10) substitute awards. The shares to be delivered under the LTIP may be made available from (i) authorized but unissued shares, (ii) shares held as treasury stock, or (iii) previously issued shares reacquired by us, including shares purchased on the open market.
Subject to adjustment in accordance with the terms of the LTIP,
Restricted Stock Units
RSUs represent the right to receive shares of Common Stock at the end of the vesting period in an amount equal to the number of RSUs that vest. The granted RSUs vest and become exercisable with respect to employees in three equal installments starting on the first anniversary of the date of grant and, with respect to directors, on the one-year anniversary of the date of grant, so long as the participant either remains continuously employed or continues to provide services to the Board, as applicable. The RSUs are subject to restrictions on transfer and are generally subject to a risk of forfeiture if the award recipient ceases providing services to the Company prior to the date the award vests. If the participant’s employment with or service to the Company is terminated for cause or without good reason prior to the vesting of all of the RSUs, and unless such termination is a “Qualifying Termination” or due to a “Change in Control” as defined in the applicable RSU agreement, any unvested RSUs will generally terminate automatically and be forfeited without further notice and at no cost to the Company. In the event the Company declares and pays a dividend in respect of its outstanding shares of Common Stock and, on the record date for such dividend, the participant holds RSUs that have not been settled, we will record the amount of such dividend in a bookkeeping account and pay to the participant an amount in cash equal to the cash dividends the participant would have received if the participant was the holder of record, as of such record date, of a number of shares of Common Stock equal to the number of RSUs held by the participant that had not been settled as of such record date, such payment to be made on or within 60 days following the date on which such RSUs vest. The stock-based compensation expense of such RSUs was determined using the closing prices on the grant date. We account for forfeitures as they occur. We recognized stock-based compensation related to RSUs of $
|
|
Number of Units |
|
|
Weighted Average |
|
|
||
Non-vested at December 31, 2024 |
|
|
|
|
$ |
|
|
||
Granted |
|
|
|
|
$ |
|
|
||
Vested |
|
|
( |
) |
|
$ |
|
|
|
Forfeited |
|
|
( |
) |
|
$ |
|
|
|
Non-vested at June 30, 2025 |
|
|
|
|
$ |
|
|
||
The total fair value of shares vested during the three and six months ended June 30, 2025 was $
28
Performance Share Units
Performance share units (“PSUs”) represent the right to receive one share of Common Stock multiplied by the number of PSUs that become earned, and the number of PSUs that may vest range from
|
|
Number of Units |
|
|
Weighted Average |
|
|
||
Non-vested at December 31, 2024 |
|
|
|
|
$ |
|
|
||
Granted |
|
|
|
|
$ |
|
|
||
Vested |
|
|
|
|
|
|
|
||
Forfeited |
|
|
|
|
|
|
|
||
Non-vested at June 30, 2025 |
|
|
|
|
$ |
|
|
||
There was approximately $
29
Note 12 – Earnings per Share
Basic earnings per share (“EPS”) measures the performance of an entity over the reporting period. Diluted earnings per share measures the performance of an entity over the reporting period while giving effect to all potentially dilutive shares of Common Stock that were outstanding during the period. Diluted income (loss) per share assumes exercise of certain stock-based compensation awards, provided the effect is not anti-dilutive. The Company uses the treasury stock method to determine the potential dilutive effect of vesting of its outstanding RSUs and PSUs. The Company does not use the two-class method.
The following table reflects the allocation of net income (loss) to common stockholders and EPS computations for the period indicated based on a weighted average number of shares of Common Stock outstanding for the three and six months ended June 30, 2025 and 2024 (in thousands, except per share data):
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic weighted average shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Dilutive potential of restricted stock units |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Dilutive potential of performance share units |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted weighted average shares outstanding |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic EPS attributable to holders of Common Stock |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
Diluted EPS attributable to holders of Common Stock |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||
The following table summarizes the shares that were anti-dilutive and, therefore, were excluded from the diluted share calculation.
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
(in thousands) |
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Shares issuable under stock-based compensation plans |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Note 13 – Income Taxes
The Company is a corporation and is subject to U.S. federal, state and local income taxes. The effective combined U.S. federal and state income tax rate for the three and six months ended June 30, 2025 was
During the three and six months ended June 30, 2025, we recognized income tax benefit of $
Total income tax expense for the three and six months ended June 30, 2025 differed from amounts computed by applying the U.S. federal statutory tax rate of
Total income tax expense for the three months ended June 30, 2024 differed from amounts computed by applying the U.S. federal statutory tax rate of
30
Note 14 – Related-Party Transactions
Anthem Ventures, LLC
Anthem Ventures, LLC (“Anthem Ventures”) provides us with transportation services. Anthem Ventures is owned and controlled by our Executive Chairman, Ben M. “Bud” Brigham. For the three and six months ended June 30, 2025, we made
Brigham Land Management LLC
Brigham Land Management LLC (“Brigham Land”) provides us with landman services for certain of our projects and initiatives. The services are provided on a per hour basis at market prices. Brigham Land is owned and controlled by Vince Brigham, an advisor to the Company and the brother of our Executive Chairman, Bud Brigham. For the three and six months ended June 30, 2025, we made aggregate payments to Brigham Land equal to approximately $
Earth Resources, LLC
Earth Resources, LLC (“Earth Resources”), formerly known as Brigham Earth, LLC, provides us with professional and consulting services as well as access to certain information and software systems. Earth Resources is owned and controlled by our Executive Chairman, Bud Brigham. For the three and six months ended June 30, 2025 we made
In a Good Mood
In a Good Mood, LLC (“In a Good Mood”) provides the Company with access, at cost, to reserved space in the Moody Center in Austin, Texas for concerts, sporting events and other opportunities as a benefit to our employees and for business entertainment. In a Good Mood is owned and controlled by our Executive Chairman, Bud Brigham. For the three and six months ended June 30, 2025, we made aggregate payments to In a Good Mood for these services of approximately
The Sealy & Smith Foundation
Refer to Note 9 – Commitments and Contingencies for disclosures related to the Company’s royalty agreement and mining agreement with The Sealy & Smith Foundation, a related party.
Registration Rights Agreement
In connection with the closing of the IPO, we entered into a registration rights agreement with certain holders (the “Legacy Owners”) who previously held membership interests in Atlas LLC (the “Original Registration Rights Agreement”) covering, in the aggregate, approximately
On October 2, 2023, the Company entered into an amended and restated registration rights agreement (the “A&R Registration Rights Agreement”) with New Atlas and certain stockholders identified on the signature pages thereto. The A&R Registration Rights Agreement was entered into in order to, among other things, provide for the assumption of Old Atlas’s obligations under the Original Registration Rights Agreement by New Atlas. The A&R Registration Rights Agreement is substantially similar to the Original Registration Rights Agreement, but contains certain administrative and clarifying changes to reflect the transition from a dual class capital structure to a single class of Common Stock. We will generally be obligated to pay all registration expenses in connection with these registration obligations, regardless of whether a registration statement is filed or becomes effective. These registration rights are subject to certain conditions and limitations.
31
Stockholders’ Agreement
In connection with the closing of the IPO, we entered into a stockholders’ agreement (the “Original Stockholders’ Agreement”) with certain of our Legacy Owners (the “Principal Stockholders”). Among other things, the Original Stockholders’ Agreement provides our Executive Chairman, Bud Brigham, the right to designate a certain number of nominees for election or appointment to our Board as described below according to the percentage of Common Stock held by such Principal Stockholders.
Pursuant to the Original Stockholders’ Agreement, we are required to take all necessary actions, to the fullest extent permitted by applicable law (including with respect to any fiduciary duties under Delaware law), to cause the election or appointment of the nominees designated by Mr. Brigham or his affiliates, and each of the Principal Stockholders agreed to cause its respective shares of Common Stock to be voted in favor of the election of each of the nominees designated by Mr. Brigham or his affiliates. Mr. Brigham or his affiliates will be entitled to designate the replacement for any of his respective board designees whose board service terminates prior to the end of such director’s term.
In addition, the Original Stockholders’ Agreement provides that for so long as Mr. Brigham or any of his affiliates is entitled to designate any members of our Board, we will be required to take all necessary actions to cause each of the audit committee, compensation committee and nominating and governance committee of our Board to include in its membership at least one director designated by Mr. Brigham or his affiliates, except to the extent that such membership would violate applicable securities laws or stock exchange rules.
Furthermore, so long as the Principal Stockholders collectively beneficially own at least a majority of the outstanding shares of our Common Stock, we have agreed not to take, and will cause our subsidiaries not to take, the following actions (or enter into an agreement to take such actions) without the prior consent of Mr. Brigham or his affiliates, subject to certain exceptions:
On October 2, 2023, Old Atlas entered into an amended and restated stockholders’ agreement (the “A&R Stockholders’ Agreement”) with New Atlas and certain of the Principal Stockholders. The A&R Stockholders’ Agreement was entered into in order to, among other things, provide for the assumption of Old Atlas’s obligations under the Original Stockholders’ Agreement by New Atlas. The A&R Stockholders’ Agreement is substantially similar to the Original Stockholders’ Agreement, but contains certain administrative and clarifying changes to reflect the transition from a dual class capital structure to a single class of Common Stock.
Equity Offering
Bud Brigham, the Company’s Executive Chairman, and entities associated with Mr. Brigham, purchased an aggregate of
32
Note 15 – Business Segments
Prior to the completion of the Moser Acquisition, we operated as a single segment which reflected how our business was managed and the nature of our services. Following the Moser Acquisition, we re-evaluated our reportable segments and now report
The following tables summarize selected financial information relating to our business segments (in thousands):
|
|
Three Months Ended June 30, |
|
|||||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
||||||||||||||||||
|
|
Sand & Logistics |
|
|
Power |
|
|
Total |
|
|
Sand & Logistics |
|
|
Power |
|
|
Total |
|
||||||
Product revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Service revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Rental revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cost of sales (excluding depreciation, depletion and accretion expense) (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Depreciation, depletion and accretion expense (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Gross profit |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Selling, general and administrative expense (including stock-based compensation expense of $ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Credit loss expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Amortization expense of acquired intangible assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Loss on disposal of assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Insurance recovery (gain) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|||||
Operating income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest (expense), net |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||||
Other income, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Income (loss) before income taxes |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||||
Income tax expense (benefit) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||||
Net income (loss) |
|
|
|
|
|
|
|
$ |
( |
) |
|
|
|
|
|
|
|
$ |
|
|||||
33
|
|
Six Months Ended June 30, |
|
|||||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
||||||||||||||||||
|
|
Sand & Logistics |
|
|
Power |
|
|
Total |
|
|
Sand & Logistics |
|
|
Power |
|
|
Total |
|
||||||
Product revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Service revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Rental revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Total revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cost of sales (excluding depreciation, depletion and accretion expense) (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Depreciation, depletion and accretion expense (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Gross profit |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||||
Selling, general and administrative expense (including stock-based compensation expense of $ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Credit loss expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Amortization expense of acquired intangible assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Loss on disposal of assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Insurance recovery (gain) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
( |
) |
|||||
Operating income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest (expense), net |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
||||
Other income, net |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Income (loss) before income taxes |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||||
Income tax expense (benefit) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net income (loss) |
|
|
|
|
|
|
|
$ |
( |
) |
|
|
|
|
|
|
|
$ |
|
|||||
(1) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.
The following tables reconcile segment total assets and capital expenditures incurred (in thousands):
|
|
June 30, 2025 |
|
|
December 31, 2024 |
|
||
Sand & Logistics |
|
$ |
|
|
$ |
|
||
Power |
|
|
|
|
|
|
||
Total assets |
|
$ |
|
|
$ |
|
||
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
Sand & Logistics |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Power |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total capital expenditures incurred |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
34
Note 16 – Subsequent Events
Income Taxes
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law, resulting in significant changes to the U.S. federal income tax code. Because the enactment occurred after the June 30, 2025 balance sheet date, the effects of the new legislation have not been reflected in the Company's financial statements for the period ended June 30, 2025.
The OBBBA includes numerous provisions that are expected to impact the Company’s current and deferred income taxes. Due to the complexity and breadth of the legislation, the Company has not yet completed its analysis or determined the quantitative impact of these changes. Management is continuing to evaluate the provisions of OBBBA and will reflect the financial statement impacts in the period in which the law was enacted, in accordance with ASC 740. Additional information will be provided in subsequent filings as the analysis is completed.
Dividend
On August 3, 2025, the Company declared a dividend of $
Propflow Acquisition
On July 28, 2025, Atlas LLC entered into a membership interest purchase agreement (the “Propflow Purchase Agreement”) with BCA HoldCo, LLC, a Delaware limited liability company (“BCA HoldCo”), and certain other signatories thereto (the “Sellers”), pursuant to which Atlas LLC acquired
35
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis should be read in conjunction with the financial statements and related notes presented in this Quarterly Report on Form 10-Q (this “Report”), as well as our audited financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the “Annual Report”), filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 25, 2025.
Cautionary Note Regarding Forward-Looking Statements
This Report contains forward-looking statements that are subject to risks and uncertainties. All statements, other than statements of historical fact included in this Report, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this Report, the words “may,” “forecast,” “continue,” “could,” “would,” “will,” “plan,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on our current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements described under the section titled “Risk Factors” included in this Report, our Annual Report, and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, filed with the SEC on May 6, 2025. By their nature, forward-looking statements involve known and unknown risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Although we believe that the forward-looking statements contained in this Report are based on reasonable assumptions, you should be aware that many factors could affect our actual financial results or results of operations and could cause actual results to differ materially from those in such forward-looking statements, including but not limited to:
36
37
We caution you that these forward-looking statements are subject to numerous risks and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks include, but are not limited to, the risks described under the section titled “Item 1A. Risk Factors” in this Report and the risk factors disclosed under the heading “Risk Factors” included in our Annual Report and Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, filed with the SEC on May 6, 2025.
You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this Report. Should one or more of the risks or uncertainties described in this Report occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements. All forward-looking statements, expressed or implied, included in this Report are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements to reflect events or circumstances after the date of this Report.
Overview
Atlas Energy Solutions Inc., a Delaware corporation (f/k/a New Atlas HoldCo. Inc.) (“New Atlas” and together with its subsidiaries “we,” “us,” “our,” or the “Company”), was formed on June 28, 2023, pursuant to the laws of the State of Delaware, and is the successor to AESI Holdings Inc. (f/k/a Atlas Energy Solutions Inc.), a Delaware corporation (“Old Atlas”). New Atlas is a holding company and the ultimate parent company of Atlas Sand Company, LLC (“Atlas LLC”), a Delaware limited liability company formed on April 20, 2017.
We are a low-cost producer of high-quality, locally sourced 100 mesh and 40/70 sand used as a proppant during the well completion process. Proppant is necessary to facilitate the recovery of hydrocarbons from oil and natural gas wells. One hundred percent of our sand reserves are located in Texas within the Permian Basin and our operations consist of proppant production and processing facilities, including four facilities near Kermit, Texas (together, the “Kermit facilities”), a fifth facility near Monahans, Texas (the “Monahans facility”), and the OnCore distributed mining network.
We operate a differentiated logistics platform that is designed to increase the efficiency, safety and sustainability of the oil and natural gas industry within the Permian Basin. This includes our fleet of fit-for-purpose trucks, trailers, and the Dune Express, an overland conveyor infrastructure solution. We have also begun integrating autonomous driving technologies in certain of our fit-for-purpose trucks, creating the first semi-autonomous oilfield logistics network in an effort to increase our automation of the oil and gas proppant supply chain.
We also provide distributed power solutions through a fleet of more than 950 natural gas-powered reciprocating generators, with approximately 225 megawatts of existing power generation, primarily supporting production and artificial lift operations across all major United States resource basins. Our generators are designed for heavy-duty, harsh environments for mission critical power needs. Our in-house manufacturing and remanufacturing capabilities, coupled with critical in-field service, provide quality control and standardization across the fleet ensuring market-leading uptime.
Recent Developments
Share Repurchase Program
During the three months ended June 30, 2025, the Company repurchased 16,380 shares of the Company’s par value $0.01 per share common stock (the “Common Stock”) through open-market purchases, pursuant to our share repurchase program, at an average price, including commission, of $12.21 for an aggregate purchase price of $200,000. As of June 30, 2025, $199.8 million remains available for repurchase.
Moser Acquisition
On February 24, 2025, the Company completed the transactions contemplated by that certain Stock Purchase Agreement (the “Moser Purchase Agreement”) by and among Wyatt Holdings, LLC, a Delaware limited liability company and an indirectly wholly-owned subsidiary of the Company (the “Purchaser”), Moser Holdings, LLC, a Delaware limited liability company (the “Seller”), and for the limited purposes set forth therein, the Company (together with the Purchaser and the Seller, the “Parties”), pursuant to which the Purchaser acquired (i) 100% of the authorized, issued and outstanding equity ownership interests in Moser Acquisition, Inc., a Delaware corporation (“Moser AcquisitionCo”), and (ii) Moser Engine Service, Inc. (d/b/a Moser Energy Systems), a Wyoming corporation and a wholly-owned subsidiary of Moser AcquisitionCo (such transaction, the “Moser Acquisition”), collectively referred to as “Moser.”
Under the terms and conditions of the Moser Purchase Agreement, the aggregate consideration paid to the Seller in the Moser Acquisition (the “Moser Consideration”) consisted of (i) $180.0 million in cash and (ii) approximately 1.7 million shares (the “Moser Stock Consideration”) of Common Stock, issued at the closing of the Moser Acquisition. The Moser Consideration is subject to customary post-closing adjustments.
38
The foregoing description of the Moser Acquisition and the Moser Purchase Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Moser Purchase Agreement, a copy of which is filed as Exhibit 2.1 to our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, filed with the SEC on May 6, 2025.
Dividends and Distributions
On May 2, 2025, the Company declared a dividend of $0.25 per share of Common Stock. The dividend was paid on May 22, 2025 to holders of record of Common Stock as of the close of business on May 15, 2025.
On August 3, 2025, the Company declared a dividend of $0.25 per share of Common Stock. The dividend will be payable on August 21, 2025 to holders of record of Common Stock as of the close of business on August 14, 2025.
Recent Trends and Outlook
Drilling and completions activities for oil and gas are highly correlated to oil and gas prices. Despite commodity price fluctuations due to ongoing uncertainties in geopolitics, OPEC+ production plans, tariffs, and Chinese economic growth, amongst other factors, North American drilling and completion activity remained relatively flat during the period. The price for West Texas Intermediate (“WTI”) crude oil ended the second quarter of 2025 at $65.11 per barrel (“Bbl”), as compared to $81.54 per Bbl in the second quarter of 2024, representing a decrease of approximately 20%. Global oil prices declined during the first half of 2025 on oversupply fears largely due to the OPEC+ decision to increase production, but we believe global economic growth coupled with an increased focus on energy security and large projected multi-year increases in power consumption should bolster demand, in both crude oil and natural gas, in the coming years.
On April 2, 2025, the U.S. government announced a 10% tariff on product imports from almost all countries and has since announced individualized higher tariffs on certain other countries. Additionally, on June 3, 2025, the U.S. government imposed a 50% tariff on steel imports, an increase from the previously announced 25% tariff. As a result of the current administration’s trade policy, tariffs may increase our and our customers’ raw material input costs. Any further trade restrictions, retaliatory trade measures or additional tariffs could result in higher input costs to produce our products and increased costs to provide our services. To the extent that we are unable to pass all or any of such cost increases on to our customers, such cost increases could adversely affect our returns on investment and limit our ability to pursue future growth projects.
To the extent any such tariffs remain in place for a sustained period of time, or in the event of a global or domestic recession resulting therefrom, our customers could decide to delay currently planned growth projects or forego them entirely, each of which could result in decreased demand for our products and services and adversely affect our business and financial condition.
The effect of tariffs and the application and interpretation of existing trade agreements continues to evolve, and we continue to monitor these matters and assess any potential negative impacts on our business.
How We Generate Revenue
We generate revenue by mining, processing and distributing proppant that our customers use in connection with their operations. We sell proppant to our customers under supply agreements or as spot sales at prevailing market rates, which is dependent upon the cost of producing proppant, the proppant volumes sold and the desired margin and prevailing market conditions.
Revenues also include charges for sand logistics services provided to our customers. Our logistics service revenue fluctuates based on several factors, including the volume of proppant transported, the distance between our facilities and our customers, and prevailing freight rates. Revenue is generally recognized as products are delivered in accordance with the contract.
Some of our contracts contain shortfall provisions that calculate agreed upon fees that are billed when the customer does not satisfy the minimum purchases over a period of time defined in each contract.
We also generate revenue through the rental of our power equipment and related services, including transportation of our generators and field supervision and support. Power equipment rentals and provision of related services are performed under a variety of contract structures.
39
Costs of Conducting Our Business
We incur operating costs primarily from direct and indirect labor, freight charges, utility costs, fuel and maintenance costs and royalties. We incur labor costs associated with employees at our proppant production facilities, which represent the most significant cost of converting proppant to finished product. Our proppant production facilities undergo maintenance to minimize unscheduled downtime and ensure the ongoing quality of our proppant and ability to meet customer demands. We may incur variable utility costs in connection with the operation of our processing facilities, primarily natural gas and electricity, which are both susceptible to market fluctuations. We lease equipment in many areas of our operations, including our proppant production hauling equipment. We incur variable royalty expense and/or delay rentals related to our agreements with the owners of our reserves. In addition, other costs including overhead allocation, depreciation and depletion are capitalized as a component of inventory and are reflected in cost of sales when inventory is sold. Our logistics services incur operating costs primarily composed of variable freight charges from trucking companies’ delivery of sand to customer wellsites, equipment leases, direct and indirect labor, fuel and maintenance costs and royalties.
We also have expenses comprising our costs of sales (excluding depreciation, depletion, and accretion expense) of (i) direct labor costs, and related travel and lodging expenses, (ii) generator transportation costs and (iii) the costs of maintaining our equipment. A large portion of our costs of sales (excluding depreciation, depletion, and accretion expense) are variable based on the number of generators deployed with customers.
How We Evaluate Our Operations
Non-GAAP Financial Measures
Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Free Cash Flow, Adjusted EBITDA less Capital Expenditures, Adjusted Free Cash Flow Margin, Adjusted EBITDA less Capital Expenditures Margin, Adjusted Free Cash Flow Conversion, Contribution Margin, Maintenance Capital Expenditures and Net Debt are non-GAAP supplemental financial measures used by our management and by external users of our Financial Statements such as investors, research analysts and others, in the case of Adjusted EBITDA, to assess our consolidated operating performance on a consistent basis across periods by removing the effects of development activities, provide views on capital resources available to organically fund growth projects and, in the case of Adjusted Free Cash Flow and Adjusted EBITDA less Capital Expenditures, assess the financial performance of our assets and their ability to sustain dividends or reinvest to organically fund growth projects over the long term without regard to financing methods, capital structure or historical cost basis.
We define Adjusted EBITDA as net income before depreciation, depletion and accretion expense, amortization expense of acquired intangible assets, interest expense, income tax expense, stock and unit-based compensation, loss on extinguishment of debt, loss on disposal of assets, insurance recovery (gain), unrealized commodity derivative gain (loss), other acquisition related costs, and other non-recurring costs. Management believes Adjusted EBITDA is useful because it allows them to more effectively evaluate our consolidated operating performance and compare the results of our operations from period to period and against our peers without regard to our financing methods or capital structure. We exclude the items listed above from net income in arriving at Adjusted EBITDA because these amounts can vary substantially from company to company within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Certain prior period non-recurring costs of goods sold are now included as an add-back to adjusted EBITDA in order to conform to the current period presentation and to more accurately describe the Company’s consolidated operating performance and results period-over-period.
We define Adjusted EBITDA Margin as Adjusted EBITDA divided by total sales.
We define Adjusted Free Cash Flow as Adjusted EBITDA less Maintenance Capital Expenditures. We define Adjusted EBITDA less Capital Expenditures as Adjusted EBITDA less net cash used in investing activities. We believe that Adjusted Free Cash Flow and Adjusted EBITDA less Capital Expenditures are useful to investors as they provide measures of the ability of our business to generate cash.
We define Adjusted Free Cash Flow Margin as Adjusted Free Cash Flow divided by total sales.
We define Adjusted EBITDA less Capital Expenditures Margin as Adjusted EBITDA less Capital Expenditures divided by total sales.
We define Adjusted Free Cash Flow Conversion as Adjusted Free Cash Flow divided by Adjusted EBITDA.
We define Contribution Margin as gross profit plus depreciation, depletion and accretion expense.
We define Maintenance Capital Expenditures as capital expenditures excluding growth capital expenditures, reconstruction of previously incurred growth capital expenditures, equipment assets acquired through debt, and asset retirement obligations. Certain prior period equipment assets acquired through debt and asset retirement obligations have been removed from capital expenditures in order to conform to the current period presentation and to more accurately describe the Company’s consolidated operating performance and results period-over-period.
We define Net Debt as total debt, net of discount and deferred financing costs, plus finance right-of-use lease liabilities, less cash and cash equivalents.
40
Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Free Cash Flow, Adjusted EBITDA less Capital Expenditures, Adjusted Free Cash Flow Margin, Adjusted EBITDA less Capital Expenditures Margin, Adjusted Free Cash Flow Conversion, Contribution Margin, Maintenance Capital Expenditures and Net Debt do not represent and should not be considered alternatives to, or more meaningful than, net income, income from operations, net cash provided by operating activities or any other measure of financial performance presented in accordance with GAAP as measures of our financial performance. Adjusted EBITDA, Adjusted Free Cash Flow, and Adjusted EBITDA less Capital Expenditures have important limitations as analytical tools because they exclude some but not all items that affect net income, the most directly comparable GAAP financial measure. Our computation of Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Free Cash Flow, Adjusted Free Cash Flow Margin, Adjusted EBITDA less Capital Expenditures, Adjusted EBITDA less Capital Expenditures Margin, Adjusted Free Cash Flow Conversion, Contribution Margin, Maintenance Capital Expenditures and Net Debt may differ from computations of similarly titled measures of other companies.
The following table presents a reconciliation of Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Free Cash Flow, Adjusted EBITDA less Capital Expenditures, Adjusted Free Cash Flow Margin, Adjusted EBITDA less Capital Expenditures Margin, Adjusted Free Cash Flow Conversion, Contribution Margin, Maintenance Capital Expenditures and Net Debt to the most directly comparable GAAP financial measure for the periods indicated.
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
|
|
(Unaudited) |
|
|||||||||||||
|
|
(In thousands) |
|
|||||||||||||
Net income (loss) |
|
$ |
(5,558 |
) |
|
$ |
14,837 |
|
|
$ |
(4,339 |
) |
|
$ |
41,624 |
|
Depreciation, depletion and accretion expense |
|
|
41,717 |
|
|
|
25,886 |
|
|
|
79,981 |
|
|
|
43,893 |
|
Amortization expense of acquired intangible assets |
|
|
6,465 |
|
|
|
3,768 |
|
|
|
11,250 |
|
|
|
4,829 |
|
Interest expense |
|
|
14,955 |
|
|
|
12,014 |
|
|
|
28,001 |
|
|
|
18,990 |
|
Income tax expense (benefit) |
|
|
(1,677 |
) |
|
|
3,066 |
|
|
|
616 |
|
|
|
11,001 |
|
EBITDA |
|
$ |
55,902 |
|
|
$ |
59,571 |
|
|
$ |
115,509 |
|
|
$ |
120,337 |
|
Stock-based compensation |
|
|
8,290 |
|
|
|
5,466 |
|
|
|
14,808 |
|
|
|
9,672 |
|
Loss on disposal of assets (1) |
|
|
— |
|
|
|
11,098 |
|
|
|
— |
|
|
|
11,098 |
|
Insurance recovery (gain) (2) |
|
|
— |
|
|
|
(10,000 |
) |
|
|
— |
|
|
|
(10,000 |
) |
Other non-recurring costs (3) |
|
|
4,298 |
|
|
|
7,049 |
|
|
|
5,147 |
|
|
|
7,417 |
|
Other acquisition related costs (4) |
|
|
1,969 |
|
|
|
5,888 |
|
|
|
9,286 |
|
|
|
16,091 |
|
Adjusted EBITDA |
|
|
70,459 |
|
|
|
79,072 |
|
|
|
144,750 |
|
|
|
154,615 |
|
Maintenance Capital Expenditures (5) |
|
|
21,589 |
|
|
|
5,418 |
|
|
|
37,122 |
|
|
|
9,878 |
|
Adjusted Free Cash Flow |
|
$ |
48,870 |
|
|
$ |
73,654 |
|
|
$ |
107,628 |
|
|
$ |
144,737 |
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
|
|
(Unaudited) |
|
|||||||||||||
|
|
(In thousands) |
|
|||||||||||||
Net income (loss) |
|
$ |
(5,558 |
) |
|
$ |
14,837 |
|
|
$ |
(4,339 |
) |
|
$ |
41,624 |
|
Depreciation, depletion and accretion expense |
|
|
41,717 |
|
|
|
25,886 |
|
|
|
79,981 |
|
|
|
43,893 |
|
Amortization expense of acquired intangible assets |
|
|
6,465 |
|
|
|
3,768 |
|
|
|
11,250 |
|
|
|
4,829 |
|
Interest expense |
|
|
14,955 |
|
|
|
12,014 |
|
|
|
28,001 |
|
|
|
18,990 |
|
Income tax expense (benefit) |
|
|
(1,677 |
) |
|
|
3,066 |
|
|
|
616 |
|
|
|
11,001 |
|
EBITDA |
|
$ |
55,902 |
|
|
$ |
59,571 |
|
|
$ |
115,509 |
|
|
$ |
120,337 |
|
Stock-based compensation |
|
|
8,290 |
|
|
|
5,466 |
|
|
|
14,808 |
|
|
|
9,672 |
|
Loss on disposal of assets (1) |
|
|
— |
|
|
|
11,098 |
|
|
|
— |
|
|
|
11,098 |
|
Insurance recovery (gain) (2) |
|
|
— |
|
|
|
(10,000 |
) |
|
|
— |
|
|
|
(10,000 |
) |
Other non-recurring costs (3) |
|
|
4,298 |
|
|
|
7,049 |
|
|
|
5,147 |
|
|
|
7,417 |
|
Other acquisition related costs (4) |
|
|
1,969 |
|
|
|
5,888 |
|
|
|
9,286 |
|
|
|
16,091 |
|
Adjusted EBITDA |
|
$ |
70,459 |
|
|
$ |
79,072 |
|
|
$ |
144,750 |
|
|
$ |
154,615 |
|
Capital expenditures |
|
|
40,268 |
|
|
|
115,790 |
|
|
|
92,657 |
|
|
|
211,276 |
|
Acquisitions |
|
|
— |
|
|
|
— |
|
|
|
181,511 |
|
|
|
142,233 |
|
Adjusted EBITDA less Capital Expenditures |
|
$ |
30,191 |
|
|
$ |
(36,718 |
) |
|
$ |
(129,418 |
) |
|
$ |
(198,894 |
) |
41
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
|
|
(Unaudited) |
|
|||||||||||||
|
|
(In thousands) |
|
|||||||||||||
Net cash provided by operating activities |
|
$ |
88,642 |
|
|
$ |
60,856 |
|
|
$ |
81,192 |
|
|
$ |
100,418 |
|
Current income tax expense (benefit) (5) |
|
|
1,325 |
|
|
|
308 |
|
|
|
2,239 |
|
|
|
722 |
|
Change in operating assets and liabilities |
|
|
(35,232 |
) |
|
|
3,414 |
|
|
|
25,476 |
|
|
|
21,914 |
|
Cash interest expense (5) |
|
|
13,459 |
|
|
|
10,813 |
|
|
|
25,290 |
|
|
|
17,304 |
|
Maintenance Capital Expenditures (5) |
|
|
(21,589 |
) |
|
|
(5,418 |
) |
|
|
(37,122 |
) |
|
|
(9,878 |
) |
Credit loss expense |
|
|
(4,110 |
) |
|
|
— |
|
|
|
(4,110 |
) |
|
|
(25 |
) |
Other non-recurring costs (3) |
|
|
4,298 |
|
|
|
7,049 |
|
|
|
5,147 |
|
|
|
7,417 |
|
Other acquisition related costs (4) |
|
|
1,969 |
|
|
|
5,888 |
|
|
|
9,286 |
|
|
|
16,091 |
|
Insurance recovery (gain) (2) |
|
|
— |
|
|
|
(10,000 |
) |
|
|
— |
|
|
|
(10,000 |
) |
Other |
|
|
108 |
|
|
|
744 |
|
|
|
230 |
|
|
|
774 |
|
Adjusted Free Cash Flow |
|
$ |
48,870 |
|
|
$ |
73,654 |
|
|
$ |
107,628 |
|
|
$ |
144,737 |
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
|
|
(Unaudited) |
|
|||||||||||||
|
|
(In thousands, except percentages) |
|
|||||||||||||
Net cash provided by operating activities |
|
$ |
88,642 |
|
|
$ |
60,856 |
|
|
$ |
81,192 |
|
|
$ |
100,418 |
|
Current income tax expense (benefit) (5) |
|
|
1,325 |
|
|
|
308 |
|
|
|
2,239 |
|
|
|
722 |
|
Change in operating assets and liabilities |
|
|
(35,232 |
) |
|
|
3,414 |
|
|
|
25,476 |
|
|
|
21,914 |
|
Cash interest expense (5) |
|
|
13,459 |
|
|
|
10,813 |
|
|
|
25,290 |
|
|
|
17,304 |
|
Capital expenditures |
|
|
(40,268 |
) |
|
|
(115,790 |
) |
|
|
(92,657 |
) |
|
|
(211,276 |
) |
Acquisitions |
|
|
— |
|
|
|
— |
|
|
|
(181,511 |
) |
|
|
(142,233 |
) |
Credit loss expense |
|
|
(4,110 |
) |
|
|
— |
|
|
|
(4,110 |
) |
|
|
(25 |
) |
Other non-recurring costs (3) |
|
|
4,298 |
|
|
|
7,049 |
|
|
|
5,147 |
|
|
|
7,417 |
|
Other acquisition related costs (4) |
|
|
1,969 |
|
|
|
5,888 |
|
|
|
9,286 |
|
|
|
16,091 |
|
Insurance recovery (gain) (2) |
|
|
— |
|
|
|
(10,000 |
) |
|
|
— |
|
|
|
(10,000 |
) |
Other |
|
|
108 |
|
|
|
744 |
|
|
|
230 |
|
|
|
774 |
|
Adjusted EBITDA less Capital Expenditures |
|
$ |
30,191 |
|
|
$ |
(36,718 |
) |
|
$ |
(129,418 |
) |
|
$ |
(198,894 |
) |
Adjusted EBITDA Margin |
|
|
24.4 |
% |
|
|
27.5 |
% |
|
|
24.7 |
% |
|
|
32.2 |
% |
Adjusted EBITDA less Capital Expenditure Margin |
|
|
10.5 |
% |
|
|
(12.8 |
)% |
|
|
(22.1 |
)% |
|
|
(41.4 |
)% |
Adjusted Free Cash Flow Margin |
|
|
16.9 |
% |
|
|
25.6 |
% |
|
|
18.4 |
% |
|
|
30.1 |
% |
Adjusted Free Cash Flow Conversion |
|
|
69.4 |
% |
|
|
93.1 |
% |
|
|
74.4 |
% |
|
|
93.6 |
% |
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
|
|
(Unaudited) |
|
|||||||||||||
|
|
(In thousands) |
|
|||||||||||||
Gross Profit |
|
$ |
52,139 |
|
|
$ |
60,355 |
|
|
$ |
106,667 |
|
|
$ |
129,101 |
|
Depreciation, depletion and accretion expense |
|
|
40,633 |
|
|
|
25,027 |
|
|
|
77,633 |
|
|
|
42,202 |
|
Contribution Margin |
|
$ |
92,772 |
|
|
$ |
85,382 |
|
|
$ |
184,300 |
|
|
$ |
171,303 |
|
(1) Represents loss on disposal of assets as a result of the fire at one of the Kermit plants that caused damage to the physical condition of the Kermit asset group.
(2) Represents insurance recovery (gain) deemed collectible and legally enforceable related to the fire at one of the Kermit plants.
(3) Other non-recurring costs includes costs incurred during our 2025 Term Loan Credit Facility (defined below under Debt Agreements) transaction, credit loss expense due to a dispute with a counterparty, reorganization under a new public holding company (the “Up-C Simplification”), temporary loadout, and other infrequent and unusual costs.
(4) Represents transactions costs incurred in connection with acquisitions, including fees paid to finance, legal, accounting and other advisors, employee retention and benefit costs, and other operational and corporate costs.
(5) A reconciliation of these items used to calculate Adjusted Free Cash Flow to comparable GAAP measures is included below.
42
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
|
|
(Unaudited) |
|
|||||||||||||
|
|
(In thousands) |
|
|||||||||||||
Current tax expense reconciliation: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Income tax expense (benefit) |
|
$ |
(1,677 |
) |
|
$ |
3,066 |
|
|
$ |
616 |
|
|
$ |
11,001 |
|
Less: deferred tax expense |
|
|
3,002 |
|
|
|
(2,758 |
) |
|
|
1,623 |
|
|
|
(10,279 |
) |
Current income tax expense (benefit) |
|
$ |
1,325 |
|
|
$ |
308 |
|
|
$ |
2,239 |
|
|
$ |
722 |
|
Cash interest expense reconciliation: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense, net |
|
$ |
14,798 |
|
|
$ |
10,458 |
|
|
$ |
26,876 |
|
|
$ |
15,436 |
|
Less: Amortization of debt discount |
|
|
(1,399 |
) |
|
|
(1,083 |
) |
|
|
(2,508 |
) |
|
|
(1,490 |
) |
Less: Amortization of deferred financing costs |
|
|
(97 |
) |
|
|
(118 |
) |
|
|
(203 |
) |
|
|
(196 |
) |
Less: Interest income |
|
|
157 |
|
|
|
1,556 |
|
|
|
1,125 |
|
|
|
3,554 |
|
Cash interest expense |
|
$ |
13,459 |
|
|
$ |
10,813 |
|
|
$ |
25,290 |
|
|
$ |
17,304 |
|
Maintenance Capital Expenditures, accrual basis reconciliation: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Purchases of property, plant and equipment |
|
$ |
40,268 |
|
|
$ |
115,790 |
|
|
$ |
92,657 |
|
|
$ |
211,276 |
|
Changes in operating assets and liabilities associated with investing activities, equipment assets acquired through debt, and asset retirement obligations (6) |
|
|
34 |
|
|
|
16,134 |
|
|
|
(13,492 |
) |
|
|
13,559 |
|
Less: Equipment assets acquired through debt and asset retirement obligations |
|
|
(6,154 |
) |
|
|
(1,745 |
) |
|
|
(9,528 |
) |
|
|
(2,093 |
) |
Less: Growth capital expenditures and reconstruction of previously incurred growth capital expenditures |
|
|
(12,559 |
) |
|
|
(124,761 |
) |
|
|
(32,515 |
) |
|
|
(212,864 |
) |
Maintenance Capital Expenditures, accrual basis |
|
$ |
21,589 |
|
|
$ |
5,418 |
|
|
$ |
37,122 |
|
|
$ |
9,878 |
|
|
|
June 30, 2025 |
|
|
June 30, 2024 |
|
||
|
|
(Unaudited) |
|
|||||
|
|
(In thousands) |
|
|||||
Total Debt |
|
$ |
528,424 |
|
|
$ |
478,003 |
|
Discount and deferred financing costs |
|
|
26,514 |
|
|
|
12,361 |
|
Finance right-of-use lease liabilities |
|
|
9,618 |
|
|
|
7,146 |
|
Cash and cash equivalents |
|
|
78,809 |
|
|
|
104,723 |
|
Net Debt |
|
$ |
485,747 |
|
|
$ |
392,787 |
|
(6) Positive working capital changes reflect capital expenditures in the current period that will be paid in a future period. Negative working capital changes reflect capital expenditures incurred in a prior period but paid during the period presented. In addition, this amount includes equipment assets acquired through debt and asset retirement obligations.
43
Factors Affecting the Comparability of Our Results of Operations
M&A Activity
On March 5, 2024, the Company completed the Hi-Crush Transaction, in which the Company acquired substantially all of Hi-Crush Inc.’s, a Delaware corporation (“Hi-Crush”), Permian Basin proppant production and logistics businesses and operations in exchange for (i) cash consideration of $140.1 million, (ii) 9.7 million shares of Common Stock issued at the closing of the transaction, and (iii) the Deferred Cash Consideration Note in an aggregate principle amount of $111.3 million. This history impacts the comparability of our operational results from year to year. Additional information on these transactions can be found in Note 3 - Acquisitions of the condensed consolidated financial statements included elsewhere in this Report.
On February 24, 2025, the Company completed the Moser Acquisition, in which the Company acquired 100% of the authorized, issued and outstanding equity ownership interests in Moser AcquisitionCo and Moser Engine Service, Inc. (d/b/a Moser Energy Systems) in exchange for (i) cash consideration of $180.0 million and (ii) the Moser Stock Consideration. This history impacts the comparability of our operational results from year to year. Additional information on these transactions can be found in Note 3 - Acquisitions of the condensed consolidated financial statements included elsewhere in this Report.
Results of Operations
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
|
|
(Unaudited) |
|
|||||||||||||
|
|
(In thousands) |
|
|||||||||||||
Product revenue |
|
$ |
126,328 |
|
|
$ |
128,210 |
|
|
$ |
265,973 |
|
|
$ |
241,642 |
|
Service revenue |
|
|
146,355 |
|
|
|
159,308 |
|
|
|
296,964 |
|
|
|
238,543 |
|
Rental revenue |
|
|
15,993 |
|
|
|
— |
|
|
|
23,330 |
|
|
|
— |
|
Total revenue |
|
|
288,676 |
|
|
|
287,518 |
|
|
|
586,267 |
|
|
|
480,185 |
|
Cost of sales (excluding depreciation, depletion and accretion expense) |
|
|
195,904 |
|
|
|
202,136 |
|
|
|
401,967 |
|
|
|
308,882 |
|
Depreciation, depletion and accretion expense |
|
|
40,633 |
|
|
|
25,027 |
|
|
|
77,633 |
|
|
|
42,202 |
|
Gross profit |
|
|
52,139 |
|
|
|
60,355 |
|
|
|
106,667 |
|
|
|
129,101 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling, general and administrative expense (including stock-based compensation expense of $8,290, $5,466, $14,808, and $9,672, respectively) |
|
|
34,371 |
|
|
|
27,266 |
|
|
|
68,783 |
|
|
|
55,249 |
|
Credit loss expense |
|
|
4,110 |
|
|
|
— |
|
|
|
4,110 |
|
|
|
25 |
|
Amortization expense of acquired intangible assets |
|
|
6,465 |
|
|
|
3,768 |
|
|
|
11,250 |
|
|
|
4,829 |
|
Loss on disposal of assets |
|
|
— |
|
|
|
11,098 |
|
|
|
— |
|
|
|
11,098 |
|
Insurance recovery (gain) |
|
|
— |
|
|
|
(10,000 |
) |
|
|
— |
|
|
|
(10,000 |
) |
Operating income |
|
|
7,193 |
|
|
|
28,223 |
|
|
|
22,524 |
|
|
|
67,900 |
|
Interest (expense), net |
|
|
(14,798 |
) |
|
|
(10,458 |
) |
|
|
(26,876 |
) |
|
|
(15,436 |
) |
Other income, net |
|
|
370 |
|
|
|
138 |
|
|
|
629 |
|
|
|
161 |
|
Income (loss) before income taxes |
|
|
(7,235 |
) |
|
|
17,903 |
|
|
|
(3,723 |
) |
|
|
52,625 |
|
Income tax expense (benefit) |
|
|
(1,677 |
) |
|
|
3,066 |
|
|
|
616 |
|
|
|
11,001 |
|
Net income (loss) |
|
$ |
(5,558 |
) |
|
$ |
14,837 |
|
|
$ |
(4,339 |
) |
|
$ |
41,624 |
|
Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024
Product Revenue. Product revenue decreased by $1.9 million to $126.3 million for the three months ended June 30, 2025, as compared to $128.2 million for the three months ended June 30, 2024. There was a decrease in proppant prices between the periods which contributed to a $26.1 million decrease in product revenue. This was offset by an increase in sales volume contributed to a $12.7 million increase in product revenue. There was $11.5 million in shortfall revenue for the three months ended June 30, 2025, as compared to no shortfall revenue for the three months ended June 30, 2024.
Service Revenue. Services revenue, which includes freight for last-mile logistics services, decreased by $12.9 million to $146.4 million for the three months ended June 30, 2025, as compared to $159.3 million for the three months ended June 30, 2024. The decrease in logistics revenue was due to a decrease in prices on volumes shipped to last-mile logistics customers.
Rental Revenue. Rental revenue is $16.0 million for the three months ended June 30, 2025, due to the acquisition of Moser and the related revenue from leasing power equipment. There was no rental revenue for the three months ended June 30, 2024.
Cost of sales (excluding depreciation, depletion and accretion expense). Cost of sales (excluding depreciation, depletion and accretion expense) decreased by $6.2 million to $195.9 million for the three months ended June 30, 2025, as compared to $202.1 million for the three months ended June 30, 2024.
44
Cost of sales (excluding depreciation, depletion and accretion) related to product revenue decreased by $1.9 million to $66.1 million for the three months ended June 30, 2025, as compared to $68.0 million for the three months ended June 30, 2024. This decrease was due to higher costs related to the temporary loadout equipment associated with the mechanical fire at the Kermit facility for the three months ended June 30, 2024.
Cost of sales (excluding depreciation, depletion and accretion expense) related to services decreased by $10.2 million to $123.9 million for the three months ended June 30, 2025, as compared to $134.1 million for the three months ended June 30, 2024. The decrease was due to lower freight costs associated with higher utilization of the Dune Express.
Cost of sales (excluding depreciation, depletion, and accretion expense) related to rentals is $5.9 million for the three months ended June 30, 2025, due to the acquisition of Moser and the cost of sales associated with leasing power equipment. There was no cost of sales related to rentals for the three months ended June 30, 2024.
Depreciation, depletion and accretion expense. Depreciation, depletion and accretion expense increased by $15.6 million to $40.6 million for the three months ended June 30, 2025, as compared to $25.0 million for the three months ended June 30, 2024, due to additional depreciable assets placed into service when compared to the prior period as well as contribution from Moser.
Selling, general and administrative expense. Selling, general and administrative expense increased by $7.1 million to $34.4 million for the three months ended June 30, 2025, as compared to $27.3 million for the three months ended June 30, 2024. The increase is due to an increase of $2.8 million from stock-based compensation, an increase of $0.2 million in corporate costs, as well as $4.1 million contribution from Moser for the three months ended June 30, 2025, compared to the three months ended June 30, 2024.
Our selling, general and administrative expense includes the non-cash expense for stock-based compensation expense for equity awards granted to our employees. For the three months ended June 30, 2025, stock-based compensation expense was $8.3 million, as compared to $5.5 million of stock-based expense for the three months ended June 30, 2024.
Credit loss expense. Credit loss expense is $4.1 million for the three months ended June 30, 2025, as compared to no credit loss expense for the three months ended June 30, 2024, due to certain shortfall receivables. See Note 2 - Summary of Significant Accounting Policies - Accounts Receivable and Allowance for Credit Losses for more information.
Amortization expense of acquired intangible assets. Amortization expense of acquired intangible assets increased $2.7 million to $6.5 million for the three month ended June 30, 2025, as compared to $3.8 million for the three month ended June 30, 2024. The increase was primarily due to the amortization of intangibles associated with the Moser acquisition.
Loss on disposal of assets. There was no loss on disposal of assets for the three months ended June 30, 2025, as compared to $11.1 million loss on disposal of assets for the three months ended June 30, 2024, due to $11.1 million disposal of certain assets associated with mechanical fire at the Kermit facility. See Note 6 - Property, Plant and Equipment, Net - Impairment or Disposal of Long-Lived Assets for more information.
Insurance recovery (gain). There was no insurance recovery for the three months ended June 30, 2025, as compared to $10.0 million insurance recovery for the three months ended June 30, 2024, due to $10.0 million of an insurance claim associated with the mechanical fire. See Note 6 - Property, Plant and Equipment, Net - Impairment or Disposal of Long-Lived Assets for more information.
Interest (expense), net. Interest expense, net increased by $4.3 million to $14.8 million for the three months ended June 30, 2025, as compared to $10.5 million for the three months ended June 30, 2024. The increase is driven by the 2025 Term Loan Credit Facility and associated debt refinancing.
Income tax expense (benefit). Income tax expense (benefit) decreased $4.8 million to $(1.7) million for the three months ended June 30, 2025, as compared to $3.1 million for the three months ended June 30, 2024. The decrease is primarily attributable to a decrease in income before income taxes for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024.
Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024
Product Revenue. Product revenue increased by $24.4 million to $266.0 million for the six months ended June 30, 2025, as compared to $241.6 million for the six months ended June 30, 2024. An increase in sales volume contributed to a $61.0 million increase in product revenue. This was partially offset by a decrease in proppant prices between the periods which contributed to a $60.5 million decrease in product revenue. There was $23.9 million in shortfall revenue for the six months ended June 30, 2025, as compared to no shortfall revenue for the six months ended June 30, 2024.
Service Revenue. Services revenue, which includes freight for last-mile logistics services, increased by $58.5 million to $297.0 million for the six months ended June 30, 2025, as compared to $238.5 million for the six months ended June 30, 2024. The increase in logistics revenue was due to higher sales volumes shipped to last-mile logistics customers.
Rental Revenue. Rental revenue is $23.3 million for the six months ended June 30, 2025, due to the acquisition of Moser and the related revenue from leasing power equipment. There was no rental revenue for the six months ended June 30, 2024.
45
Cost of sales (excluding depreciation, depletion and accretion expense). Cost of sales (excluding depreciation, depletion and accretion expense) increased by $93.1 million to $402.0 million for the six months ended June 30, 2025, as compared to $308.9 million for the six months ended June 30, 2024.
Cost of sales (excluding depreciation, depletion and accretion) related to product revenue increased by $29.0 million to $136.4 million for the six months ended June 30, 2025, as compared to $107.4 million for the six months ended June 30, 2024, due to increased production.
Cost of sales (excluding depreciation, depletion and accretion expense) related to services increased by $55.9 million to $257.4 million for the six months ended June 30, 2025, as compared to $201.5 million for the six months ended June 30, 2024. The increase was due to higher sales volumes shipped to last-mile logistics customers during the period.
Cost of sales (excluding depreciation, depletion, and accretion expense) related to rentals is $8.2 million for the six months ended June 30, 2025, due to the acquisition of Moser and the cost of sales associated with leasing power equipment. There was no cost of sales related to rentals for the six months ended June 30, 2024.
Depreciation, depletion and accretion expense. Depreciation, depletion and accretion expense increased by $35.4 million to $77.6 million for the six months ended June 30, 2025, as compared to $42.2 million for the six months ended June 30, 2024, due to additional depreciable assets placed into service when compared to the prior period as well as contribution from Moser.
Selling, general and administrative expense. Selling, general and administrative expense increased by $13.6 million to $68.8 million for the six months ended June 30, 2025, as compared to $55.2 million for the six months ended June 30, 2024. The increase is due to an increase of $5.1 million from stock-based compensation, an increase of $2.6 million in corporate costs, as well as $5.9 million contribution from Moser for the six months ended June 30, 2025, compared to the six months ended June 30, 2024.
Our selling, general and administrative expense includes the non-cash expense for stock-based compensation expense for equity awards granted to our employees. For the six months ended June 30, 2025, stock-based compensation expense was $14.8 million, as compared to $9.7 million of stock-based expense for the six months ended June 30, 2024.
Credit loss expense. Credit loss expense is $4.1 million for the six months ended June 30, 2025, as compared to de minimis credit loss expense for the six months ended June 30, 2024, due to certain shortfall receivables. See Note 2 - Summary of Significant Accounting Policies - Accounts Receivable and Allowance for Credit Losses for more information.
Amortization expense of acquired intangible assets. Amortization expense of acquired intangible assets increased $6.5 million to $11.3 million for the six month ended June 30, 2025, as compared to $4.8 million for the six month ended June 30, 2024. The increase was primarily due to the amortization of intangibles associated with the Moser acquisition.
Loss on disposal of assets. There was no loss on disposal of assets for the six months ended June 30, 2025, as compared to $11.1 million loss on disposal of assets for the six months ended June 30, 2024, due to $11.1 million disposal of certain assets associated with mechanical fire at the Kermit facility. See Note 6 - Property, Plant and Equipment, Net - Impairment or Disposal of Long-Lived Assets for more information.
Insurance recovery (gain). There was no insurance recovery for the six months ended June 30, 2025, as compared to $10.0 million insurance recovery for the six months ended June 30, 2024, due to $10.0 million of an insurance claim associated with the mechanical fire. See Note 6 - Property, Plant and Equipment, Net - Impairment or Disposal of Long-Lived Assets for more information.
Interest (expense), net. Interest expense, net increased by $11.5 million to $26.9 million for the six months ended June 30, 2025, as compared to $15.4 million for the six months ended June 30, 2024. The increase is driven by the 2025 Term Loan Credit Facility and associated debt refinancing.
Income tax expense (benefit). Income tax expense decreased $10.4 million to $0.6 million for the six months ended June 30, 2025, as compared to $11.0 million for the six months ended June 30, 2024. The decrease is primarily attributable to a decrease in income before income taxes for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024.
46
Liquidity and Capital Resources
Overview
Our primary sources of liquidity to date have been capital contributions from our owners, cash flows from operations, and borrowings under our previous term loan credit facilities, and our previous asset-based loan credit facilities. Going forward, we expect our primary sources of liquidity to be cash flows from operations, availability under our 2023 ABL Credit Facility as amended, borrowings under our 2025 Term Loan Credit Facility, or any other credit facility we enter into in the future and proceeds from any future issuances of debt or equity securities. We expect our primary use of capital will be used for the payment of any dividends to our stockholders and for investing in our business, specifically for acquisition of fit-for-purpose equipment used in our logistics platform, and power-related growth capital expenditures. In addition, we have routine facility upgrades and additional ancillary capital expenditures associated with, among other things, contractual obligations and working capital obligations.
As of June 30, 2025, we had working capital, defined as current assets less current liabilities, of $119.7 million and $124.8 million of availability under the 2023 ABL Credit Facility. Our cash and cash equivalents totaled $78.8 million.
Cash Flow
The following table summarizes our cash flow for the periods indicated:
|
|
Six Months Ended June 30, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
|
|
(Unaudited) |
|
|||||
Consolidated Statement of Cash Flow Data: |
|
(In thousands) |
|
|||||
Net cash provided by operating activities |
|
$ |
81,192 |
|
|
$ |
100,418 |
|
Net cash used in investing activities |
|
|
(268,770 |
) |
|
|
(353,509 |
) |
Net cash provided by financing activities |
|
|
194,683 |
|
|
|
147,640 |
|
Net decrease in cash |
|
$ |
7,105 |
|
|
$ |
(105,451 |
) |
Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024
Net Cash Provided by Operating Activities. Net cash provided by operating activities was $81.2 million and $100.4 million for the six months ended June 30, 2025 and 2024, respectively. Net income (loss) adjusted for non-cash items for the six months ended June 30, 2025 resulted in a cash increase of $106.7 million compared with a cash increase of $122.3 million for the six months ended June 30, 2024. This change was primarily due to lower earnings in 2025. Changes in net working capital for the six months ended June 30, 2025 resulted in a cash decrease of $25.5 million compared with a cash decrease of $21.9 million for the six months ended June 30, 2024. This change was primarily due to a decrease in accounts payable and accrued liabilities and other liabilities in 2025, which was partially offset by a decrease in accounts receivable in 2025.
Net Cash Used in Investing Activities. Net cash used in investing activities was $268.8 million and $353.5 million for the six months ended June 30, 2025 and 2024, respectively. The decrease in cash used is primarily attributable to less capital spending at the Kermit and Monahans facilities, OnCore distributed mining network, Dune Express and logistics assets during the six months ended June 30, 2025 when compared to the six months ended June 30, 2024. This was offset by a $39.3 million increase in acquisitions with Moser for the six months ended June 30, 2025 when compared to Hi-Crush for the six months ended June 30, 2024. Additionally, we collected $5.4 million in insurance proceeds for the six months ended June 30, 2025 as compared to no insurance proceeds received for the six months ended June 30, 2024.
Net Cash Provided by Financing Activities. Net cash provided by financing activities was $194.7 million and $147.6 million for the six months ended June 30, 2025 and 2024, respectively. This increase is primarily related to the proceeds from an underwritten public offering of 11.5 million shares of our Common Stock at a public offering price of $23.00 per share (the “Equity Offering”) and term loan borrowings for the six months ended June 30, 2025 when compared to the six months ended June 30, 2024. This increase was partially offset by payments on the Deferred Cash Consideration Note, the 2023 ABL Credit Facility and dividends for the six months ended June 30, 2025 when compared to the six months ended June 30, 2024.
Capital Requirements
Our primary growth and technology initiatives include continued acquisition of fit-for-purpose equipment used in our logistics platform and power-related growth capital expenditures. Outside of our growth and technology initiatives, our business is not presently capital intensive in nature and only requires the maintenance of our facilities. In addition to capital expenditures, we have certain contractual long-term capital requirements associated with our lease and royalty payments and debt. See Note 7 - Leases, Note 8 - Debt and Note 9 - Commitments and Contingencies of the Financial Statements included elsewhere in this Report. Our current level of maintenance capital expenditures is expected to remain within our cash on hand and internally generated cash flow.
We intend to fund our capital requirements through our primary sources of liquidity, which include cash on hand and cash flows from operations and, if needed, availability under our 2023 ABL Credit Facility and borrowings under our 2025 Term Loan Credit Facility.
47
Debt Agreements
2025 Term Loan Credit Facility
On February 21, 2025, Atlas LLC entered into a credit agreement (the “2025 Term Loan Credit Agreement”) with Stonebriar Commercial Finance LLC (“Stonebriar”), as administrative agent and initial lender, pursuant to which Stonebriar extended Atlas LLC a term loan credit facility comprised of a $540.0 million single advance term loan that was made on February 21, 2025 (the “2025 Term Loan Credit Facility”).
The 2025 Term Loan Credit Facility is payable in eighty-five consecutive monthly installments, consisting of forty-eight monthly installments of combined principal and interest, thirty-six installments of interest only payments, and a final payment of the remaining outstanding principal balance at maturity. The 2025 Term Loan Credit Facility has a final maturity date of March 1, 2032. The 2025 Term Loan Credit Facility bears interest at a rate equal to 9.51% per annum.
The 2025 Term Loan Credit Facility includes a discount of $18.8 million and de minimis deferred financing fees. As discussed below (2023 Term Loan Credit Agreement), the 2025 Term Loan Credit Facility also includes previously unamortized debt discount and deferred financing fees of $7.2 million, associated with prior Stonebriar borrowings. These amounts are recorded as a direct reduction from the carrying amount of the debt obligation on the Company’s condensed consolidated balance sheets and are amortized to interest expense using the effective interest method. Interest expense associated with the 2025 Term Loan Credit Facility was $12.7 million and $18.2 million for the three and six months ended June 30, 2025, respectively, and the interest expense associated with the discount and deferred financing costs was $0.8 million and $1.1 million for the three and six months ended June 30, 2025, respectively.
In the event that the Leverage Ratio (as defined under the 2025 Term Loan Credit Agreement) as of the end of any fiscal quarter ending on or after June 30, 2025 is equal to or greater than 2.5:1.0, Atlas LLC will be required to prepay the 2025 Term Loan Credit Facility with 50% of Excess Cash Flow (as defined under the 2025 Term Loan Credit Agreement) for the fiscal quarter period most recently ended less the aggregate amount of optional prepayments of the Term Loan made during such period.
Atlas LLC may voluntarily redeem the loan outstanding under the 2025 Term Loan Credit Facility, provided that any such prepayment shall include a prepayment fee equal to the sum of the Make-Whole Amount (as defined in under the 2025 Term Loan Credit Agreement) plus (a) three percent (3%) of the principal amount being repaid if such prepayment occurs on or prior to February 21, 2028, (b) two percent (2%) of the principal amount being repaid if such prepayment occurs after February 21, 2028 but on or prior to February 21, 2029 and (c) one percent (1%) of the of the principal amount being repaid if such prepayment occurs thereafter. The Make-Whole Amount shall equal zero (0) when calculating any prepayment made after February 21, 2027. Upon the maturity of the 2025 Term Loan Credit Facility, the entire unpaid principal amount of the loan outstanding thereunder, together with interest, fees and other amounts payable in connection with the facility, will be immediately due and payable without further notice or demand.
Dividends and distributions to equity holders are permitted to be made pursuant to certain limited exceptions and baskets described in the 2025 Term Loan Credit Agreement and otherwise generally subject to certain restrictions set forth in the 2025 Term Loan Credit Agreement, including the requirement that no Event of Default (as defined under the 2025 Term Loan Credit Agreement) has occurred and is continuing.
The 2025 Term Loan Credit Facility includes certain non-financial covenants, including but not limited to restrictions on incurring additional debt and certain distributions. The 2025 Term Loan Credit Facility is subject to two financial covenants, which require that the Loan Parties (as defined in the 2025 Term Loan Credit Agreement) maintain a maximum Leverage Ratio of 4.0 to 1.0 and a minimum Liquidity (as defined in the 2025 Term Loan Credit Agreement) of $40,000,000. Such financial covenants are tested as of the last day of each fiscal quarter.
The Company used the proceeds from the 2025 Term Loan Credit Facility (i) to refinance the existing 2023 Term Loan Credit Facility and the ADDT Loan (as defined below), (ii) to finance the cash consideration for the Moser Acquisition, and (iii) for general corporate purposes.
The 2025 Term Loan Credit Facility is unconditionally guaranteed, jointly and severally, by Atlas LLC and its subsidiaries and secured by substantially all of the assets of Atlas LLC and its subsidiaries. The 2025 Term Loan Credit Facility is also unconditionally guaranteed on an unsecured basis by the Company.
As of June 30, 2025, Atlas LLC was in compliance with the covenants of the 2025 Term Loan Credit Facility.
48
Deferred Cash Consideration Note
In accordance with the Hi-Crush Merger Agreement, the Company issued a secured PIK toggle seller note in an aggregate principle amount of $111.3 million, with a final maturity date of January 31, 2026 (the “Deferred Cash Consideration Note”). The Deferred Cash Consideration Note was part of the consideration transferred and valued at fair value at the acquisition date. This amount is subject to adjustments as set forth in the Hi-Crush Merger Agreement. The Deferred Cash Consideration Note bears interest at a rate of 5.00% per annum if paid in cash, or 7.00% per annum if paid in kind. Interest on the Deferred Cash Consideration Note is payable quarterly in arrears beginning March 29, 2024 through maturity. Interest expense associated with the Deferred Cash Consideration Note was $0.2 million and $0.9 million for the three and six months ended June 30, 2025, respectively. Interest expense associated with the Deferred Cash Consideration Note was $1.4 million and $1.8 million for the three and six months ended June 30, 2024, respectively.
The Deferred Cash Consideration Note included $4.6 million of debt discount and approximately $0.1 million deferred financing costs. The discount and deferred financing costs are a direct reduction from the carrying amount of the debt obligation on the Company’s condensed consolidated balance sheets and are amortized to interest expense using the effective interest method. Interest expense associated with the discount and deferred financing costs were approximately $0.6 million and $1.2 million in total for the three and six months ended June 30, 2025, respectively. Interest expense associated with the discount and deferred financing costs were approximately $0.7 million and $0.8 million in total for the three and six months ended June 30, 2024, respectively.
Atlas LLC’s obligations under the Deferred Cash Consideration Note are secured by certain of the assets acquired in connection with the Hi-Crush Transaction. The Deferred Cash Consideration Note is also unconditionally guaranteed by Atlas LLC on an unsecured basis.
Partial Repayment of the Deferred Cash Consideration Note
In February 2025, the Company used a portion of the proceeds from the Equity Offering, to repay $101.3 million of the outstanding principal balance of the Deferred Cash Consideration Note. The Company intends to repay the remaining $10.0 million of principal at maturity.
2023 Term Loan Credit Facility
On July 31, 2023, Atlas LLC entered into a credit agreement (the “2023 Term Loan Credit Agreement”) with Stonebriar, as administrative agent and initial lender, pursuant to which Stonebriar extended Atlas LLC a term loan credit facility comprising a $180.0 million single advance term loan that was made on July 31, 2023 (the “Initial Term Loan”) and commitments to provide up to $100.0 million of delayed draw (the “DDT Loan”) term loans (collectively, the “2023 Term Loan Credit Facility”), which was subsequently amended to provide an additional delayed draw term loan (the “ADDT Loan”) in the aggregate principal amount of $150.0 million and increase the existing DDT Loan by an aggregate principal amount of $100.0 million to a total of $200.0 million.
On February 21, 2025, Atlas LLC entered into the 2025 Term Loan Credit Agreement with Stonebriar, proceeds from which were used to repay $332.4 million of the remaining principal and $1.8 million of accrued interest of the Initial Term Loan, the DDT Loan, and the ADDT Loan. As this transaction was accounted for as a modification under ASC 470, “Debt,” these fees paid to the lender, as well as previously unamortized debt discount and deferred financing fees associated with the Initial Term Loan, the DDT Loan, and the ADDT Loan of $7.2 million were deferred and recorded as a direct reduction from the carrying amount of the debt obligation on the condensed consolidated balance sheets. These deferred costs are amortized to interest expense using the effective interest method. In connection with this refinancing, on February 21, 2025, we incurred prepayment fees on the Initial Term Loan, the DDT Loan, and the ADDT Loan of $13.3 million. The Company recorded the prepayment fees as additional debt discount and amortizes the amount as an adjustment over the remaining term of the modified debt instrument.
2023 ABL Credit Facility
On February 22, 2023, Atlas LLC, certain of its subsidiaries, as guarantors, Bank of America, N.A., as administrative agent (the “ABL Agent”), and certain financial institutions party thereto as lenders (the “2023 ABL Lenders”) entered into a Loan, Security and Guaranty Agreement (the “2023 ABL Credit Agreement”) pursuant to which the 2023 ABL Lenders provide revolving credit financing to the Company in an aggregate principal amount of up to $75.0 million (the “2023 ABL Credit Facility”), with Availability (as defined in the 2023 ABL Credit Agreement) thereunder subject to a “Borrowing Base” as described in the 2023 ABL Credit Agreement. The 2023 ABL Credit Facility includes a letter of credit sub-facility, which permits issuance of letters of credit up to an aggregate amount of $25.0 million. The scheduled maturity date of the 2023 ABL Credit Facility is February 22, 2028; provided that the 2023 ABL Credit Facility will mature on June 30, 2027 if any amount of the 2023 Term Loan Credit Facility that has a maturity date less than 91 days prior to February 22, 2028 is outstanding on June 30, 2027.
Atlas LLC may also request swingline loans under the 2023 ABL Credit Agreement in an aggregate principal amount not to exceed $7.5 million. During the six months ended June 30, 2025 and the year ended December 31, 2024, Atlas LLC had no outstanding swingline loans under the 2023 ABL Credit Facility.
49
Borrowings under the 2023 ABL Credit Facility bear interest, at Atlas LLC’s option, at either a base rate or Term SOFR (as defined in the 2023 ABL Credit Agreement), as applicable, plus an applicable margin based on average availability as set forth in the 2023 ABL Credit Agreement. Term SOFR loans bear interest at Term SOFR for the applicable interest period plus an applicable margin, which ranges from 1.50% to 2.00% per annum based on average availability as set forth in the 2023 ABL Credit Agreement. Base rate loans bear interest at the applicable base rate, plus an applicable margin, which ranges from 0.50% to 1.00% per annum based on average availability as set forth in the 2023 ABL Credit Agreement. In addition to paying interest on outstanding principal under the 2023 ABL Credit Facility, Atlas LLC is required to pay a commitment fee which ranges from 0.375% per annum to 0.500% per annum with respect to the unutilized commitments under the 2023 ABL Credit Facility, based on the average utilization of the 2023 ABL Credit Facility. Atlas LLC is required to pay customary letter of credit fees, to the extent that one or more letter of credit is outstanding. For the three and six months ended June 30, 2025, we recognized $0.2 million and $0.3 million, respectively, of interest expense, unutilized commitment fees and other fees under the 2023 ABL Credit Facility, classified as interest expense. For the three and six months ended June 30, 2024, we recognized $0.1 million and $0.3 million, respectively, of interest expense, unutilized commitment fees and other fees under the 2023 ABL Credit Facility, classified as interest expense.
The Borrowing Base was initially set at $75.0 million and the amount of available credit changes every month, depending on the amount of eligible accounts receivable and inventory we have available to serve as collateral. With the First Amendment to the 2023 ABL Credit Agreement, discussed below, the Borrowing Base increased to $125.0 million. The Borrowing Base components are subject to customary reserves and eligibility criteria.
On March 5, 2024 and November 12, 2024, the Company drew down $50.0 million and $20.0 million, respectively, under the 2023 ABL Credit Facility for general corporate purposes. The Company had no interest expense associated with the debt for the three months ended June 30, 2025 and had $0.6 million of interest expense for the six months ended June 30, 2025. There was interest expense of $0.9 million and $1.1 million for the three and six months ended June 30, 2024, respectively. The draw included $0.3 million in debt issuance costs and $0.3 million in deferred financing costs. These costs are recorded under other long-term assets on the condensed consolidated balance sheets and are amortized on a straight-line basis over the life of the agreement. Interest expense associated with the amortization of these costs were de minimis and $0.1 million for the three and six months ended June 30, 2025, respectively. Interest expense associated with the amortization of these costs was $0.1 million for both the three and six months ended June 30, 2024.
The 2023 ABL Credit Facility requires that if Availability is less than the greater of (i) 12.50% of the Borrowing Base and (ii) $7.5 million, Atlas LLC must maintain a Fixed Charge Coverage Ratio (as defined in the 2023 ABL Credit Agreement) of at least 1.00 to 1.00 while a Covenant Trigger Period (as defined in the 2023 ABL Credit Agreement) is in effect.
Under the 2023 ABL Credit Agreement, Atlas LLC is permitted to make payments of dividends and distributions pursuant to certain limited exceptions and baskets set forth therein and otherwise generally subject to certain restrictions described therein, including that (i) no Event of Default (as defined under the 2023 ABL Credit Agreement) has occurred and is continuing, and (ii) no loans and no more than $7.5 million in letters of credit that have not been cash collateralized are outstanding, and liquidity exceeds $30.0 million at all times during the 30 days prior to the date of the dividend or distribution; provided that if any loans are outstanding or outstanding letters of credit exceed $7.5 million and no Event of Default has occurred and is continuing, then Atlas LLC is permitted to make payments of dividends and distributions if, (i) Availability (as defined under the 2023 ABL Credit Agreement) is higher than the greater of (a) $12 million and (b) 20% of the pro forma Borrowing Base then in effect and during the 30 days prior to the date of the dividend or distribution as if such dividend or distribution had been made at the beginning of such period, or if (ii) (a) Availability is higher than the greater of (x) $9 million and (y) 15% of the pro forma Borrowing Base then in effect and during the 30 days prior to the date of the dividend or distributions as if such dividend or distribution had been made at the beginning of such period and (b) the Fixed Charge Coverage Ratio (as defined under the 2023 ABL Credit Agreement), as calculated on a pro forma basis, is greater than 1.00 to 1.00, as provided under the 2023 ABL Credit Agreement. Additionally, Atlas LLC may make additional payments of dividends and distributions in qualified equity interests and may make Permitted Tax Distributions (as defined under the 2023 ABL Credit Agreement).
The 2023 ABL Credit Facility contains certain customary representations and warranties, affirmative and negative covenants, and events of default. As of June 30, 2025, the Company was in compliance with the covenants under the 2023 ABL Credit Facility.
The 2023 ABL Credit Facility is unconditionally guaranteed, jointly and severally, by Atlas LLC and its subsidiaries and secured by substantially all of the assets of Atlas LLC and its subsidiaries.
50
First Amendment to the 2023 ABL Credit Agreement
On February 26, 2024, Atlas LLC and certain other subsidiaries of the Company entered into the First Amendment to Loan, Security and Guaranty Agreement (the “ABL Amendment”), among Atlas LLC, the subsidiary guarantors party thereto, the lenders party thereto and the ABL Agent, which amends the 2023 ABL Credit Agreement.
The ABL Amendment increased the revolving credit commitment to $125.0 million. The existing lenders increased their commitment by $25.0 million which resulted in a debt modification under ASC 470, “Debt.” The ABL Amendment also added a new lender with a $25.0 million commitment, thus creating a new debt arrangement under ASC 470, “Debt.” The deferred financing costs and debt issuance cost will be amortized on a prospective basis over the term of the agreement. The maturity date of the ABL Credit Agreement was extended from February 22, 2028 to the earliest of (a) February 26, 2029; (b) the date that is 91 days prior to the maturity date for any portion of the Term Loan Debt; or (c) any date on which the aggregate Commitments terminate hereunder.
The ABL Amendment requires that if Availability is less than the greater of (i) 12.50% of the Borrowing Base and (ii) $12.5 million, Atlas LLC must maintain a Fixed Charge Coverage Ratio (as defined in the 2023 ABL Credit Agreement) of at least 1.00 to 1.00 while a Covenant Trigger Period (as defined in the 2023 ABL Credit Agreement) is in effect.
Under the ABL Amendment, Atlas LLC is permitted to make payments of dividends and distributions pursuant to certain limited exceptions and baskets set forth therein and otherwise generally subject to certain restrictions described therein, including that (i) no Event of Default (as defined under the 2023 ABL Credit Agreement) has occurred and is continuing, and (ii) no loans and no more than $7.5 million in letters of credit that have not been cash collateralized are outstanding, and liquidity exceeds $30.0 million at all times during the 30 days prior to the date of the dividend or distribution; provided that if any loans are outstanding or outstanding letters of credit exceed $7.5 million and no Event of Default has occurred and is continuing, then Atlas LLC is permitted to make payments of dividends and distributions if, (i) Specified Availability (as defined under the 2023 ABL Credit Agreement) is higher than the greater of (a) $20.0 million and (b) 20% of the pro forma Borrowing Base then in effect and during the 30 days prior to the date of the dividend or distribution as if such dividend or distribution had been made at the beginning of such period, or if (ii) (a) Specified Availability is higher than the greater of (x) $15.0 million and (y) 15% of the pro forma Borrowing Base then in effect and during the 30 days prior to the date of the dividend or distributions as if such dividend or distribution had been made at the beginning of such period and (b) the Fixed Charge Coverage Ratio (as defined under the 2023 ABL Credit Agreement), as calculated on a pro forma basis, is greater than 1.00 to 1.00, as provided under the 2023 ABL Credit Agreement. Additionally, Atlas LLC may make additional payments of dividends and distributions in qualified equity interests and may make Permitted Tax Distributions (as defined under the 2023 ABL Credit Agreement).
Second Amendment to the 2023 ABL Credit Agreement
On January 27, 2025, Atlas LLC and certain other subsidiaries of the Company entered that certain Second Amendment to Loan, Security and Guaranty Agreement (the “Second ABL Amendment”), among Atlas LLC, as the borrower, the subsidiary guarantors party thereto, the lenders party thereto and Bank of America, N.A., as the ABL Agent. The Second ABL Amendment amends that certain Loan, Security and Guaranty Agreement dated as of February 22, 2023, as amended.
The Second ABL Amendment permitted the Company and its applicable affiliates to enter into the Second Term Loan Amendment, pursuant to which the principal amount of the existing DDT Loan was increased by an aggregate principal amount of $100.0 million.
Third Amendment to the 2023 ABL Credit Agreement
On February 21, 2025, Atlas LLC and certain other subsidiaries of the Company entered into that certain Third Amendment to Loan, Security and Guaranty Agreement (the “Third ABL Amendment”), among Atlas LLC, as the borrower, the subsidiary guarantors party thereto, the lenders party thereto and Bank of America, N.A., as the ABL Agent. The Third ABL Amendment amends that certain Loan, Security and Guaranty Agreement dated as of February 22, 2023, as amended.
The Third ABL Amendment permitted the Company and its applicable affiliates to enter into the 2025 Term Loan Credit Agreement, pursuant to which Atlas LLC borrowed $540.0 million from Stonebriar in a single advance term loan that was made on February 21, 2025.
Repayment of the 2023 ABL Credit Facility
In February 2025, the Company used a portion of the proceeds from the Equity Offering, to repay the remaining $70.0 million of the outstanding principal balance of the 2023 ABL Credit Facility.
As of June 30, 2025, Atlas LLC had no outstanding borrowings and $0.2 million in outstanding letters of credit under the 2023 ABL Credit Facility. Additionally, as of June 30, 2025, the Borrowing Base was $125.0 million, and Availability was $124.8 million.
51
Other Indebtedness
The Company has other indebtedness of $11.2 million of equipment finance notes as of June 30, 2025. There was de minimis interest expense and $0.1 million of interest expense for the three and six months ended June 30, 2025, respectively, and de minimis interest expense for both the three and six months ended June 30, 2024. These equipment finance notes have terms ending in April 2026 through April 2031 and interest rates ranging from 2.24% to 10.89%.
Critical Accounting Policies and Estimates
As of June 30, 2025, there have been no material changes to our critical accounting policies and related estimates previously disclosed in our Annual Report. Refer to the accounting policies discussed in the notes to our Financial Statements under Note 2 - Summary of Significant Accounting Policies.
Property, Plant and Equipment, Including Depreciation and Depletion
In order to calculate depreciation of our fixed assets, other than plant facilities and mine development costs, we use the best estimated useful lives at the time the asset is placed into service.
Mining property and development costs, including plant facilities directly associated with mining properties, are amortized using the units of production method on estimated measures of tons of in-place reserves. The impact to reserve estimates is recognized on a prospective basis. Drilling and related costs are capitalized for deposits where proven and probable reserves exist. These activities are directed at obtaining additional information on the deposit or converting non-reserve minerals to proven and probable reserves, with the benefit being realized over a period greater than one year. At a minimum, we will assess the useful lives and residual values of all long-lived assets on an annual basis to determine if adjustments are required. The actual reserve life may differ from the assumptions we have made about the estimated reserve life.
We evaluate long‑lived assets for potential impairment indicators whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If such a review should indicate that the carrying amount of long-lived assets is not recoverable, the Company will reduce the carrying amount of such assets to fair value.
Business Combinations
We allocate the purchase price of any business we acquire to the identifiable assets acquired and liabilities assumed based on their estimated fair values. Any excess purchase price over the fair value of the net identifiable assets acquired is recorded as goodwill. We use all available information to estimate fair values, including quoted market prices, the carrying value of acquired assets and assumed liabilities and valuation techniques such as discounted cash flows, relief-from-royalty method, with or without method, multi-period excess earnings method, or cost to recreate method. We engage third-party appraisal firms to assist in the fair value determination of identifiable long-lived assets, identifiable intangible assets, as well as any contingent consideration that provides for additional consideration to be paid to the seller if certain future conditions are met. These estimates are reviewed during the 12-month measurement period and adjusted as soon as the necessary information becomes available but no later than one year from the acquisition date. The judgments made in determining the estimated fair value assigned to each class of assets acquired and liabilities assumed, as well as asset lives, can materially impact our financial condition or results of operations. For further discussion on our recently completed acquisitions, see Note 3 - Acquisitions, to the accompanying Financial Statements included elsewhere in this Report.
Valuation of Goodwill and Acquired Intangible Assets
We assess our goodwill for impairment annually, or whenever events or circumstances indicate that the carrying amount of goodwill may not be recoverable. We determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value after considering qualitative, market and other factors. If it is necessary to perform the quantitative assessment to determine if our goodwill is impaired, the fair value is determined using significant unobservable inputs, or Level 3 in the fair value hierarchy. If the carrying amount exceeds the fair value, an impairment loss is recognized in the current period in an amount equal to the excess.
The expected future cash flows used for impairment reviews and related fair value calculations are based on subjective, judgmental assessments of projected revenue growth, pricing, gross profit rates, SG&A rates, working capital fluctuations, capital expenditures, discount rates and terminal growth rates. The acquired definite-lived intangible assets are evaluated for impairment when events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. For further discussion on our recently completed acquisitions, see Note 4 - Goodwill and Acquired Intangible Assets, to the accompanying Financial Statements included elsewhere in this Report.
52
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Our business is subject to various types of market risks that include interest rate risks, market demand risks, commodity pricing risks, credit risks and inflation risks. Except as set forth below, our risk exposure related to these items has not changed materially since December 31, 2024.
Interest Rate Risks
In February 2025, we used a portion of the net proceeds from the Equity Offering to repay the remaining $70.0 million of outstanding principal under the 2023 ABL Credit Facility. As of June 30, 2025, we had no variable-rate indebtedness outstanding.
Credit Risks
We recognized credit loss expense of $4.1 million for both the three and six months ended June 30, 2025, due to a dispute with a counterparty. See Note 2 – Summary of Significant Accounting Policies of the Financial Statements included elsewhere in this Report for additional information.
Item 4. Controls and Procedures.
Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this report (the “Evaluation Date”). Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were not effective due to the material weakness in our internal control over financial reporting described below.
Material Weakness
As previously reported in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, management identified deficiencies related to our information technology (“IT”) general controls (“ITGCs”) in the area of IT program change management and logical access controls that, when viewed in combination, aggregated to a material weakness. Specifically, management determined that we did not maintain effective controls over program change management and logical access for financially significant applications to ensure that IT program and data changes affecting financial IT applications and underlying accounting records are identified, tested, authorized and implemented appropriately. As a result, the application controls and IT-dependent manual controls that rely upon information from the impacted IT applications were also deemed ineffective.
While we have concluded that this material weakness did not result in a material misstatement in our Financial Statements, it was not remediated as of June 30, 2025, and thus could have created a reasonable possibility that a material misstatement to the annual or interim financial statements would not have been prevented or detected on a timely basis. Accordingly, we determined that these control deficiencies constituted a material weakness.
With respect to the material weakness above, management developed a remediation plan to address the material weakness and to improve the design and operating effectiveness of our ITGCs. As part of such plan we have, among other things, evaluated and implemented enhanced process controls around user access management and expanded documentation and review procedures to monitor, evaluate and support control effectiveness. We believe that upon completion, we will have strengthened our ITGCs to address and successfully remediate the identified material weakness. However, control weaknesses are not considered remediated until new internal controls have been operational for a period of time, are tested, and management concludes that these controls are operating effectively.
Moser Acquisition
As disclosed in Note 3 - Acquisitions in the notes to the accompanying Financial Statements, we acquired Moser and its wholly-owned subsidiary on February 24, 2025, and its total revenues constituted approximately 5.5% and 4.0% and of total revenues as shown in our Financial Statements for the three and six months ended June 30, 2025, respectively. The total assets of Moser acquired constituted approximately 12.3% of total assets as shown in our Financial Statements as of June 30, 2025. We excluded Moser’s disclosure controls and procedures that are subsumed by its internal control over financial reporting from the scope of management’s assessment of the effectiveness of our disclosure controls and procedures. This exclusion is in accordance with the guidance issued by the Staff of the SEC that an assessment of a recently acquired business’s internal controls may be omitted from management’s assessment of internal control over financial reporting for one year following the acquisition. As part of the Company’s ongoing integration activities, the Company’s financial reporting controls and procedures are in the process of being implemented with respect to the acquired operations. The Company and Moser used separate accounting systems through June 30, 2025. The Financial Statements presented in this Report were prepared using information obtained from these separate accounting systems.
53
Changes in Internal Control over Financial Reporting
Other than the material weakness and incorporating Moser’s controls following the Moser Acquisition described above, there have been no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
54
PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
On July 2, 2024, Patrick Ayers, a purported shareholder (the “Plaintiff”), filed a derivative and class action complaint in the Delaware Court of Chancery against certain current and former directors of the Company and certain of the Company’s affiliates. The complaint asserts claims of breach of fiduciary duty related to the corporate reorganization that changed the Company’s Up-C structure to a customary C corporation. The complaint seeks unspecified damages from the defendants for the plaintiff individually and on behalf of the Company and other former Class A common stockholders as well as an award of attorneys’ fees and costs. We dispute these allegations and intend to vigorously defend against these claims. This lawsuit is currently in discovery. Given the uncertainty of litigation, the preliminary stage of the cases, and the legal standards that must be met for success on the merits, we cannot estimate the reasonably possible loss or range of loss that may result from these derivative actions.
In addition to the matter above, we are currently involved in, and may in the future be involved in, legal proceedings, claims, regulatory inquiries, audits, and governmental investigations incidental to our business, including putative class actions, collective actions, employment, commercial claims and other matters. While the outcome of any litigation is inherently unpredictable, based on currently available facts and our current insurance coverages, we do not believe that the ultimate resolution of any of these matters will have a material adverse impact on our financial condition, results of operations or cash flows. We are not aware of any material legal proceedings contemplated by governmental authorities.
Item 1A. Risk Factors.
Except as set forth below, during the three months ended June 30, 2025, there have been no material changes to the risk factors previously disclosed under the heading “Risk Factors” in our Annual Report and Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, filed with the SEC on May 6, 2025.
Changes in U.S. trade policy and the impact of tariffs could adversely affect our business, results of operations and financial position.
Our business and results of operations may be adversely affected by uncertainty and changes in U.S. trade policies, including tariffs, trade agreements or other trade restrictions imposed by the U.S. or other governments. For example, on April 2, 2025, the U.S. government announced a 10% tariff on product imports from almost all countries and has since announced individualized higher tariffs on certain other countries. Additionally, on June 3, 2025, the U.S. government imposed a 50% tariff on steel imports, an increase from the previously announced 25% tariff. As a result of the current administration’s trade policy, tariffs may increase our and our customers’ raw material input costs. Any further trade restrictions, retaliatory trade measures or additional tariffs could result in higher input costs to produce our products and increased costs to provide our services. To the extent that we are unable to pass all or any of such cost increases on to our customers, such cost increases could adversely affect our returns on investment and limit our ability to pursue future growth projects.
To the extent any such tariffs remain in place for a sustained period of time, or in the event of a global or domestic recession resulting therefrom, our customers could decide to delay currently planned growth projects or forego them entirely, each of which could result in decreased demand for our products and services and adversely affect our results of operations and financial condition.
The ultimate impact of these trade measures on our business operations and financial results is uncertain and may be affected by various factors, including whether and when such trade measures are implemented, the timing when such measures may become effective, and the amount, scope, or nature of such trade measures, and our ability to execute strategies to mitigate the potential negative impacts resulting therefrom.
55
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Issuer Purchases of Equity Securities
Our Common Stock repurchase activity for the three months ended June 30, 2025 was as follows:
Period |
|
Total Number of Shares Purchased (1) |
|
|
Average Price Paid Per Share (2) |
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (3) |
|
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs |
|
||||
|
|
(In thousands, except per share amounts and shares) |
|
|||||||||||||
April 1, 2025 – April 30, 2025 |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
200,000 |
|
May 1, 2025 – May 31, 2025 |
|
|
16,380 |
|
|
$ |
12.21 |
|
|
|
16,380 |
|
|
$ |
199,800 |
|
June 1, 2025 – June 30, 2025 |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
199,800 |
|
Total |
|
|
16,380 |
|
|
$ |
12.21 |
|
|
|
16,380 |
|
|
|
|
|
(1) Such shares are cancelled and retired.
(2) The average price paid per share includes any commissions paid to repurchase stock.
(3) On October 24, 2024, the Board of Directors of the Company (the “Board”) authorized a share repurchase program under which the Company may repurchase up to $200.0 million of outstanding Common Stock until December 31, 2026. The program may be suspended, modified, or discontinued by the Board at any time without prior notice.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17 C.F.R. Section 229.104) is included in Exhibit 95.1 to this Report.
Item 5. Other Information.
During the fiscal quarter ended June 30, 2025, none of our officers or directors (as defined in Rule 16a-1(f) under the Exchange Act)
56
Item 6. Exhibits.
The information called for by this Item is incorporated herein by reference from the Exhibit Index included in this Report.
Exhibit Number |
|
Description |
3.1 |
|
Amended and Restated Certificate of Incorporation of the Company, as filed with the Secretary of State of the State of Delaware on October 2, 2023 (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K (Commission File No. 001-41828) filed on October 3, 2023). |
3.2 |
|
Amended and Restated Bylaws of the Company, effective as of October 2, 2023 (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K (Commission File No. 001-41828) filed on October 3, 2023). |
31.1* |
|
Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
31.2* |
|
Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
32.1* |
|
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
32.2* |
|
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
95.1* |
|
Mine Safety Disclosures. |
101.INS* |
|
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. |
101.SCH* |
|
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents |
104* |
|
Cover page formatted as Inline XBRL and contained in Exhibit 101 |
|
|
|
|
||
* |
|
These exhibits are filed or furnished with this Report. |
57
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
ATLAS ENERGY SOLUTIONS INC. |
|
|
|
|
|
Date: August 5, 2025 |
|
By: |
/s/ John Turner |
|
|
|
John Turner |
|
|
|
President and Chief Executive Officer |
|
|
|
|
|
|
By: |
/s/ Blake McCarthy |
|
|
|
Blake McCarthy |
|
|
|
Chief Financial Officer |
58
FAQ
How much cash does Ivanhoe Electric (IE) have after Q2 2025?
What are the key economics of the Santa Cruz Copper Project PFS?
Did Ivanhoe Electric reduce its quarterly loss in Q2 2025?
What is the status of the Alacrán Copper Project sale?
Why did accounts receivable decline sharply?
How long can current cash fund operations?
