Atlas Energy Solutions Inc
For the period ended Sep 30, 2024. Filed Oct 29, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Oct 29, 2024
AESI$5.41+1.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-06.
0000950170-24-091945
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-10-29.
0000950170-24-118270
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 212 previous paragraphs and 218 current paragraphs.
157 unchanged; 47 reworded; 13 added; 7 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 9 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
our ability to successfully execute our common stock repurchase program or implement future common stock repurchase programs;
Current report
the ultimate cost and time needed to execute the desired process improvements at our production facilities following the fire that occurred at our Kermit facility on April 14, 2024;
Current report
Operational Updates
Current report
During the third quarter of 2024, one of the Company's dredge mining assets was damaged during commissioning at one of the Kermit facilities. The damaged asset had a net book value of $8.6 million that was recorded as a loss on disposal of assets on the condensed consolidated statements of operations.
Current report
Share Buyback Program
Current report
In October 2024, the Board of Directors of the Company authorized a share repurchase program under which the Company may repurchase up to $200.0 million of outstanding stock through December 31, 2026.
Current report
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. The Company expects to fund the repurchases by using cash on hand and expected free cash flow to be generated over the next two years.
Current report
Represents Hi-Crush Transaction costs include fees paid to finance, legal, accounting and other advisors, employee retention and benefit costs, and other operational and corporate costs.
Current report
Represents loss on disposal of one of the Company's dredge mining assets at its Kermit facility and 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.
Current report
Represents insurance recovery (gain) deemed collectible and legally enforceable as of June 30, 2024 related to the fire at one of the Kermit plants. Cash was subsequently received as of September 30, 2024.
Current report
Other non-recurring costs includes costs incurred during our Up-C simplification transaction, temporary loadout, and other infrequent and unusual costs.
Current report
Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023
Current report
Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023
Removed paragraphs (7)
Previous report
our ability to successfully integrate the business of Hi-Crush Inc., a Delaware corporation (“Hi-Crush”), following completion of the Hi-Crush Transaction;
Previous report
our ability to return the Kermit facility to full production following the fire that occurred on April 14, 2024, and the required reconstruction, and the timing of that return to full production;
Previous report
the availability and extent of insurance coverage for the damages to the Kermit facility resulting from the fire;
Previous report
Kermit Facility Operational Update
Previous report
Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023
Previous report
Insurance recovery (gain). Insurance recovery increased by $10.0 million to $10.0 million for the six months ended June 30, 2024, as compared to no insurance recovery for the six months ended June 30, 2023, due to $10.0 million of an insurance claim associated with the mechanical fire being deemed collectable and legally enforceable as of June 30, 2024. See Note 1 - Business and Organization - Kermit Facility Operational Update for more information.
Previous report
Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023
Reworded paragraphs (47)
Previous wording
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 Atlas LLC’s 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. As of June 30, 2024, our combined annual production capacity is approximately 28 million tons.
Current wording
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 Atlas LLC’s 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. As of September 30, 2024, our combined annual production capacity is approximately 29 million tons.
Previous wording
On March 5, 2024 (“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 $455.8 million, subject to customary post-closing adjustments(the “Hi-Crush Transaction”), pursuant to that certain Agreement and Plan of Merger, dated February 26, 2024 (the “Merger Agreement”), by and among the Company, Atlas LLC, Wyatt Merger Sub 1 Inc., a Delaware corporation and direct, wholly-owned subsidiary of Atlas LLC, Wyatt Merger Sub 2, LLC, a Delaware limited liability company and direct, wholly-owned subsidiary of Atlas LLC, Hi-Crush, each stockholder that had executed the Merger Agreement or a joinder thereto (each a “Hi-Crush Stockholder” and, collectively, the “Hi-Crush Stockholders”), Clearlake Capital Partners V Finance, L.P., solely in its capacity as the Hi-Crush Stockholders’ representative and HC Minerals Inc., a Delaware corporation (collectively, the “Parties”). For further discussion, refer to Note 3 - Hi-Crush Transaction of the unaudited condensed consolidated financial statements (the “Financial Statements”) included elsewhere in this Report.
Current wording
On March 5, 2024 (“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 $456.1 million, subject to customary post-closing adjustments(the “Hi-Crush Transaction”), pursuant to that certain Agreement and Plan of Merger, dated February 26, 2024 (the “Merger Agreement”), by and among the Company, Atlas LLC, Wyatt Merger Sub 1 Inc., a Delaware corporation and direct, wholly-owned subsidiary of Atlas LLC, Wyatt Merger Sub 2, LLC, a Delaware limited liability company and direct, wholly-owned subsidiary of Atlas LLC, Hi-Crush, each stockholder that had executed the Merger Agreement or a joinder thereto (each a “Hi-Crush Stockholder” and, collectively, the “Hi-Crush Stockholders”), Clearlake Capital Partners V Finance, L.P., solely in its capacity as the Hi-Crush Stockholders’ representative and HC Minerals Inc., a Delaware corporation (collectively, the “Parties”). For further discussion, refer to Note 3 - Hi-Crush Transaction of the unaudited condensed consolidated financial statements (the “Financial Statements”) included elsewhere in this Report.
Previous wording
The Company performed an impairment analysis on the Kermit asset group as a result of the fire and determined that no impairment was required. The disposal of the damaged assets from the fire had a net book value of $11.1 million that was recorded as a loss on disposal of assets on the condensed consolidated statements of operations. The Company has filed an insurance claim and is in the process of recovering replacement costs for returning the plant to production. The Company has recorded $10.0 million of insurance recovery in connection with this incident as this recovery amount is deemed collectable and legally enforceable as of June 30, 2024. The proceeds are recorded as insurance recovery (gain) on the condensed consolidated statements of operations and within accounts receivable on the condensed consolidated balance sheets.
Current wording
On April 14, 2024, a mechanical fire occurred at one of the Company's plants in Kermit, Texas. The fire primarily impacted the feed system of the processing facility, which transports sand from the dryers and separators to storage silos. During the second quarter of 2024, the Company utilized temporary loadout equipment at the plant to continue production. The Company was able to transition to the temporary loadout within 11 days of the fire incident. Reconstruction of the feed system was completed in June 2024 and the plant was operational by June 30, 2024. The Company performed an impairment analysis on the Kermit asset group as a result of the fire and determined that no impairment was required. The damaged assets from the fire had a net book value of $11.1 million that was recorded as a loss on disposal of assets on the condensed consolidated statements of operations. The Company has filed an insurance claim for the fire incident and is in the process of recovering the costs associated with returning the plant to production. The Company has received $10.0 million of insurance recovery in connection with this incident as of September 30, 2024. The proceeds are recorded as insurance recovery (gain) on the condensed consolidated statements of operations and as cash and cash equivalents on the condensed consolidated balance sheets.
Previous wording
In accordance with the Merger Agreement, the Company issued a secured PIK toggle seller note in an initial aggregate principle amount of $111.8 million, subject to customary purchase price adjustments, 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. 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.
Current wording
In accordance with the Merger Agreement, the Company issued a secured PIK toggle seller note in an initial aggregate principle amount of $111.8 million, subject to purchase price adjustments as defined in the Merger Agreement, 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. 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.
Previous wording
On August 1, 2024, the Company declared a dividend of $0.23 per share of Common Stock. The dividend will be payable on August 22, 2024 to holders of record of Common Stock as of the close of business on August 15, 2024.
Current wording
On October 24, 2024, the Company declared a dividend of $0.24 per share of Common Stock. The dividend will be payable on November 14, 2024 to holders of record of Common Stock as of the close of business on November 7, 2024.
Previous wording
The price for West Texas Intermediate (“WTI”) crude oil ended the second quarter of 2024 at $82.69 per barrel (“Bbl”), as compared to $81.28 per Bbl in the first quarter of 2024, representing a modest increase of approximately 2%. Range bound commodity prices indicated a comfortably supplied oil market during the quarter, which was marginally offset by slowing demand. OPEC+ countries reiterated that a further rollback on future production cuts would be subject to market conditions. This coupled with continued geopolitical tensions across Europe and the Middle East have supported a higher oil price environment as conflicts in both Ukraine and Gaza persist.
Current wording
The price for West Texas Intermediate (“WTI”) crude oil ended the third quarter of 2024 at $70.24 per barrel (“Bbl”), as compared to $82.69 per Bbl in the second quarter of 2024, representing a decrease of approximately 15%. Global oil demand decelerated during the period on the heels of fluttering Chinese demand coupled with a heightened risk of future global economic headwinds. However, OPEC+ countries reiterated plans for a continued delay to production hikes. This, coupled with continued heightened geopolitical tensions across Europe and the Middle East have supported a higher oil price environment as conflicts in both Ukraine and across the Middle East persist.
Previous wording
As a result, oilfield activity levels during the period were relatively muted. The Permian Basin drilling rig count declined by eight active rigs quarter-over-quarter, ending the period at 308 active rigs. While we are seeing efficiencies drive overall shale production, fewer drilling rigs and hydraulic fracturing crews are required for the equivalent production output.
Current wording
As a result, oilfield activity levels during the period were relatively muted. The Permian Basin drilling rig count declined by two active rigs quarter-over-quarter, ending the period at 306 active rigs. While we are seeing efficiencies drive overall shale production, fewer drilling rigs and hydraulic fracturing crews are required for the equivalent production output.
Previous wording
We define Adjusted EBITDA as net income before depreciation, depletion and accretion expense, 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 non-recurring transaction costs. Management believes Adjusted EBITDA is useful because it allows them to more effectively evaluate our 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.
Current wording
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 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 operating performance and results period-over-period.
Previous wording
Atlas Inc. is a corporation and is subject to U.S. federal income tax. Atlas LLC has elected to be treated as a partnership for income tax purposes and, therefore, was not subject to U.S. federal income tax at an entity level during the periods presented. As a result, the condensed consolidated net income in our historical financial statements does not reflect the tax expense we would have incurred if we had been subject to U.S. federal income tax at an entity level during such periods.
Current wording
Atlas Inc. is a corporation and is subject to U.S. federal income tax. Atlas LLC has elected to be treated as a partnership for income tax purposes and, therefore, was not subject to U.S. federal income tax at an entity level during the periods prior to the initial public offering. As a result, the condensed consolidated net income in our historical financial statements does not reflect the tax expense we would have incurred if we had been subject to U.S. federal income tax at an entity level during such periods.
Previous wording
Product Sales. Product sales increased by $3.0 million to $128.2 million for the three months ended June 30, 2024, as compared to $125.2 million for the three months ended June 30, 2023. A decrease in proppant prices between the periods contributed a $89.2 million decrease in product sales, while a increase in sales volume contributed to a $92.2 million increase in product sales.
Current wording
Product Sales. Product sales increased by $30.5 million to $145.3 million for the three months ended September 30, 2024, as compared to $114.8 million for the three months ended September 30, 2023. An increase in sales volume contributed to a $127.7 million increase in product sales. This was partially offset by a decrease in proppant prices between the periods which contributed to a $97.2 million decrease in product sales.
Previous wording
Service Sales. Services sales, which includes freight for last-mile logistics services, increased by $122.7 million to $159.3 million for the three months ended June 30, 2024, as compared to $36.6 million for the three months ended June 30, 2023. The increase in logistics revenue was due to higher sales volumes shipped to last-mile logistics customers as well as a full quarter of contribution from Hi-Crush.
Current wording
Service Sales. Services sales, which includes freight for last-mile logistics services, increased by $116.3 million to $159.1 million for the three months ended September 30, 2024, as compared to $42.8 million for the three months ended September 30, 2023. The increase in logistics revenue was due to higher sales volumes shipped to last-mile logistics customers as well as a full quarter of contribution from Hi-Crush.
Previous wording
Cost of sales (excluding depreciation, depletion and accretion expense). Cost of sales (excluding depreciation, depletion and accretion expense) increased by $138.6 million to $202.1 million for the three months ended June 30, 2024, as compared to $63.5 million for the three months ended June 30, 2023.
Current wording
Cost of sales (excluding depreciation, depletion and accretion expense). Cost of sales (excluding depreciation, depletion and accretion expense) increased by $157.5 million to $225.3 million for the three months ended September 30, 2024, as compared to $67.8 million for the three months ended September 30, 2023.
Previous wording
Cost of sales (excluding depreciation, depletion and accretion) related to product sales increased by $36.4 million to $68.0 million for the three months ended June 30, 2024, as compared to $31.6 million for the three months ended June 30, 2023, due to a full quarter of contribution from Hi-Crush as well as $7.0 million of the cost related to additional temporary loadout equipment associated with the mechanical fire at the Kermit facility. This was offset by a decrease in utility and royalty expense over the period.
Current wording
Cost of sales (excluding depreciation, depletion and accretion) related to product sales increased by $58.6 million to $88.8 million for the three months ended September 30, 2024, as compared to $30.2 million for the three months ended September 30, 2023, due to a full quarter of contribution from Hi-Crush as well as $6.4 million of the cost related to additional temporary loadout equipment associated with the mechanical fire at the Kermit facility. This was partially offset by a decrease in utility and royalty expense over the period.
Previous wording
Cost of sales (excluding depreciation, depletion and accretion expense) related to services increased by $102.2 million to $134.1 million for the three months ended June 30, 2024, as compared to $31.9 million for the three months ended June 30, 2023. The increase was due to higher sales volumes shipped to last-mile logistics customers during the period as well as a full quarter of contribution from Hi-Crush.
Current wording
Cost of sales (excluding depreciation, depletion and accretion expense) related to services increased by $98.9 million to $136.5 million for the three months ended September 30, 2024, as compared to $37.6 million for the three months ended September 30, 2023. The increase was due to higher sales volumes shipped to last-mile logistics customers during the period as well as a full quarter of contribution from Hi-Crush.
Previous wording
Depreciation, depletion and accretion expense. Depreciation, depletion and accretion expense increased by $15.6 million to $25.0 million for the three months ended June 30, 2024, as compared to $9.4 million for the three months ended June 30, 2023, due to additional depreciable assets placed into service when compared to the prior period as well as a full quarter of contribution from Hi-Crush.
Current wording
Depreciation, depletion and accretion expense. Depreciation, depletion and accretion expense increased by $15.9 million to $26.1 million for the three months ended September 30, 2024, as compared to $10.2 million for the three months ended September 30, 2023, due to additional depreciable assets placed into service when compared to the prior period as well as a full quarter of contribution from Hi-Crush.
Previous wording
Selling, general and administrative expense. Selling, general and administrative expense increased by $15.1 million to $27.3 million for the three months ended June 30, 2024, as compared to $12.2 million for the three months ended June 30, 2023. The increase is due to $8.4 million of employee costs, including an increase of $3.9 million of stock-based compensation expense, $0.8 million of travel, sales and other corporate expenses associated with incremental costs incurred in conjunction with our acquisition of Hi-Crush, and $5.9 million of other acquisition related costs related to the Hi-Crush Transaction during the three months ended June 30, 2024, compared to the three months ended June 30, 2023.
Current wording
Selling, general and administrative expense. Selling, general and administrative expense increased by $11.2 million to $25.5 million for the three months ended September 30, 2024, as compared to $14.3 million for the three months ended September 30, 2023. The increase is due to $8.4 million of employee costs, including an increase of $4.9 million of stock-based compensation expense, $0.4 million of travel, sales and other corporate expenses associated with incremental costs incurred in conjunction with our acquisition of Hi-Crush, and $2.4 million of other acquisition related costs related to the Hi-Crush Transaction during the three months ended September 30, 2024, compared to the three months ended September 30, 2023.
Previous wording
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, 2024, stock-based compensation expense was $5.5 million, as compared to $1.6 million of stock-based expense for the three months ended June 30, 2023.
Current wording
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 September 30, 2024, stock-based compensation expense was $6.3 million, as compared to $1.4 million of stock-based expense for the three months ended September 30, 2023.
Previous wording
Loss on disposal of assets. Loss on disposal of assets increased by $11.1 million to $11.1 million for the six months ended June 30, 2024, as compared to no loss on disposal of assets for the six months ended June 30, 2023, due to $11.1 million of certain assets associated with mechanical fire at the Kermit facility having no remaining carrying value and were disposed. See Note 1 - Business and Organization - Kermit Facility Operational Update for more information.
Current wording
Loss on disposal of assets. Loss on disposal of assets is $8.6 million for the three months ended September 30, 2024, as compared to no loss on disposal of assets for the three months ended September 30, 2023, due to the $8.6 million disposal from the damaged dredge asset. See Note 1 - Business and Organization - Operational Updates for more information.
Previous wording
Interest (expense), net. Interest expense, net increased by $10.0 million to $10.5 million for the three months ended June 30, 2024, as compared to $0.5 million for the three months ended June 30, 2023. The increase is driven by the acquisition financing for the Hi-Crush Transaction, consisting of the $150.0 million ADDT Loan and $111.8 million Deferred Cash Consideration Note.
Current wording
Interest (expense), net. Interest expense, net increased by $9.7 million to $11.2 million for the three months ended September 30, 2024, as compared to $1.5 million for the three months ended September 30, 2023. The increase is driven by the acquisition financing for the Hi-Crush Transaction, consisting of the $150.0 million ADDT Loan and $111.8 million Deferred Cash Consideration Note.
Previous wording
Income tax expense. Income tax expense decrease $2.0 million to $3.1 million for the three months ended June 30, 2024, as compared to $5.1 million for the three months ended June 30, 2023. The decrease is primarily due to a decrease in income before income taxes.
Current wording
Income tax expense. Income tax expense decreased $7.2 million to $0.4 million for the three months ended September 30, 2024, as compared to $7.6 million for the three months ended September 30, 2023. The decrease is primarily due to a decrease in income before income taxes.
Previous wording
Product Sales. Product sales decreased by $11.8 million to $241.6 million for the six months ended June 30, 2024, as compared to $253.4 million for the six months ended June 30, 2023. A decrease in proppant prices between the periods contributed to a $158.4 million decrease in product sales, while a increase in sales volume contributed to a $146.6 million increase in product sales.
Current wording
Product Sales. Product sales increased by $18.9 million to $387.0 million for the nine months ended September 30, 2024, as compared to $368.1 million for the nine months ended September 30, 2023. An increase in sales volume contributed to a $279.8 million increase in product sales. This was partially offset by a decrease in proppant prices between the periods which contributed to a $260.9 million decrease in product sales.
Previous wording
Service Sales. Services sales, which includes freight for last-mile logistics services, increased by $176.7 million to $238.5 million for the six months ended June 30, 2024, as compared to $61.8 million for the six months ended June 30, 2023. The increase in logistics revenue was due to higher sales volumes shipped to last-mile logistics customers as well as a full quarter of contribution from Hi-Crush.
Current wording
Service Sales. Services sales, which includes freight for last-mile logistics services, increased by $292.9 million to $397.6 million for the nine months ended September 30, 2024, as compared to $104.7 million for the nine months ended September 30, 2023. The increase in logistics revenue was due to higher sales volumes shipped to last-mile logistics customers as well as two full quarters of contribution from Hi-Crush.
Previous wording
Cost of sales (excluding depreciation, depletion and accretion expense). Cost of sales (excluding depreciation, depletion and accretion expense) increased by $182.8 million to $308.9 million for the six months ended June 30, 2024, as compared to $126.1 million for the six months ended June 30, 2023.
Current wording
Cost of sales (excluding depreciation, depletion and accretion expense). Cost of sales (excluding depreciation, depletion and accretion expense) increased by $340.4 million to $534.2 million for the nine months ended September 30, 2024, as compared to $193.8 million for the nine months ended September 30, 2023.
Previous wording
Cost of sales (excluding depreciation, depletion and accretion) related to product sales increased by $36.0 million to $107.4 million for the six months ended June 30, 2024, as compared to $71.4 million for the six months ended June 30, 2023, due to a full quarter of contribution from Hi-Crush as well as $7.0 million of the cost related to additional temporary loadout equipment associated with the mechanical fire at the Kermit facility. This was offset by a decrease in maintenance, utility and royalty expense over the period.
Current wording
Cost of sales (excluding depreciation, depletion and accretion) related to product sales increased by $94.7 million to $196.2 million for the nine months ended September 30, 2024, as compared to $101.5 million for the nine months ended September 30, 2023, due to two full quarters of contribution from Hi-Crush as well as $13.4 million of the cost related to additional temporary loadout equipment associated with the mechanical fire at the Kermit facility. This was partially offset by a decrease in maintenance, utility and royalty expense over the period.
Previous wording
Cost of sales (excluding depreciation, depletion and accretion expense) related to services increased by $146.8 million to $201.5 million for the six months ended June 30, 2024, as compared to $54.7 million for the six months ended June 30, 2023. The increase was due to higher sales volumes shipped to last-mile logistics customers during the period as well as a full quarter of contribution from Hi-Crush.
Current wording
Cost of sales (excluding depreciation, depletion and accretion expense) related to services increased by $245.7 million to $338.0 million for the nine months ended September 30, 2024, as compared to $92.3 million for the nine months ended September 30, 2023. The increase was due to higher sales volumes shipped to last-mile logistics customers during the period as well as two full quarters of contribution from Hi-Crush.
Previous wording
Depreciation, depletion and accretion expense. Depreciation, depletion and accretion expense increased by $24.2 million to $42.2 million for the six months ended June 30, 2024, as compared to $18.0 million for the six months ended June 30, 2023, due to additional depreciable assets placed into service when compared to the prior period as well as a full quarter of contribution from Hi-Crush.
Current wording
Depreciation, depletion and accretion expense. Depreciation, depletion and accretion expense increased by $40.1 million to $68.3 million for the nine months ended September 30, 2024, as compared to $28.2 million for the nine months ended September 30, 2023, due to additional depreciable assets placed into service when compared to the prior period as well as two full quarters of contribution from Hi-Crush.
Previous wording
Selling, general and administrative expense. Selling, general and administrative expense increased by $34.6 million to $55.3 million for the six months ended June 30, 2024, as compared to $20.7 million for the six months ended June 30, 2023. The increase is due to an increase of $14.0 million of employee costs, including an increase of $7.5 million of stock-based compensation expense, $4.1 million of travel, sales and other corporate expenses associated with incremental costs incurred in conjunction with our acquisition of Hi-Crush, and $16.5 million of non-recurring transaction costs and other acquisition related costs related to the Hi-Crush Transaction during the six months ended June 30, 2024, compared to the six months ended June 30, 2023.
Current wording
Selling, general and administrative expense. Selling, general and administrative expense increased by $45.7 million to $80.7 million for the nine months ended September 30, 2024, as compared to $35.0 million for the nine months ended September 30, 2023. The increase is due to an increase of $22.4 million of employee costs, including an increase of $12.3 million of stock-based compensation expense, $4.8 million of travel, sales and other corporate expenses associated with incremental costs incurred in conjunction with our acquisition of Hi-Crush, and $18.5 million of other acquisition related costs related to the Hi-Crush Transaction during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.
Previous wording
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, 2024, stock-based compensation expense was $9.7 million, as compared to $2.2 million of stock and unit-based compensation expense for the six months ended June 30, 2023.
Current wording
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 nine months ended September 30, 2024, stock-based compensation expense was $16.0 million, as compared to $3.7 million of stock and unit-based compensation expense for the nine months ended September 30, 2023.
Previous wording
Loss on disposal of assets. Loss on disposal of assets increased by $11.1 million to $11.1 million for the three months ended June 30, 2024, as compared to no loss on disposal of assets for the three months ended June 30, 2023, due to $11.1 million of certain assets associated with mechanical fire at the Kermit facility having no remaining carrying value and were disposed. See Note 1 - Business and Organization - Kermit Facility Operational Update for more information.
Current wording
Loss on disposal of assets. Loss on disposal of assets is $19.7 million for the nine months ended September 30, 2024, as compared to no loss on disposal of assets for the nine months ended September 30, 2023, due to $11.1 million disposal of certain assets associated with mechanical fire at the Kermit facility and the $8.6 million disposal from the damaged dredge asset. See Note 1 - Business and Organization - Operational Updates for more information.
Previous wording
Insurance recovery (gain). Insurance recovery increased by $10.0 million to $10.0 million for the three months ended June 30, 2024, as compared to no insurance recovery for the three months ended June 30, 2023, due to $10.0 million of an insurance claim associated with the mechanical fire being deemed collectable and legally enforceable as of June 30, 2024. See Note 1 - Business and Organization - Kermit Facility Operational Update for more information.
Current wording
Insurance recovery (gain). Insurance recovery is $10.0 million for the nine months ended September 30, 2024, as compared to no insurance recovery for the nine months ended September 30, 2023, due to $10.0 million of an insurance claim associated with the mechanical fire. See Note 1 - Business and Organization - Operational Updates for more information.
Previous wording
Interest (expense), net. Interest expense, net increased by $11.4 million to $15.4 million for the six months ended June 30, 2024, as compared to $4.0 million for the six months ended June 30, 2023. The increase is driven by the acquisition financing for the Hi-Crush Transaction, consisting of the $150.0 million ADDT Loan and $111.8 million Deferred Cash Consideration Note.
Current wording
Interest (expense), net. Interest expense, net increased by $21.1 million to $26.6 million for the nine months ended September 30, 2024, as compared to $5.5 million for the nine months ended September 30, 2023. The increase is driven by the acquisition financing for the Hi-Crush Transaction, consisting of the $150.0 million ADDT Loan and $111.8 million Deferred Cash Consideration Note.
Previous wording
Income tax expense. Income tax expense deceased by $1.7 million to $11.0 million for the six months ended June 30, 2024, as compared to $12.7 million for the six months ended June 30, 2023. The decrease is primarily due to a decrease in income before income taxes. This was offset by an increase from Atlas Inc. incurring U.S. federal income taxes subsequent to our IPO for the full six months ended June 30, 2024 as compared to the six months ended June 30, 2023.
Current wording
Income tax expense. Income tax expense deceased by $9.0 million to $11.4 million for the nine months ended September 30, 2024, as compared to $20.4 million for the nine months ended September 30, 2023. The decrease is primarily due to a decrease in income before income taxes. This was offset by an increase from Atlas Inc. incurring U.S. federal income taxes subsequent to our IPO for the full nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.
Previous wording
As of June 30, 2024, we had working capital, defined as current assets less current liabilities, of $125.8 million, $74.5 million of availability under the 2023 ABL Credit Facility, and $100.0 million of DDT Loans (as defined below under “Debt Agreements). Our cash and cash equivalents totaled $104.7 million.
Current wording
As of September 30, 2024, we had working capital, defined as current assets less current liabilities, of $58.3 million, $74.8 million of availability under the 2023 ABL Credit Facility, and $100.0 million of DDT Loans (as defined below under “Debt Agreements). Our cash and cash equivalents totaled $78.6 million.
Previous wording
Net Cash Provided by Operating Activities. Net cash provided by operating activities was $100.4 million and $158.1 million for the six months ended June 30, 2024 and 2023, respectively. The decrease is primarily attributable to increased cost of sales (excluding depreciation, depletion and accretion expense) of $182.8 million as well as an increase in selling, general and administrative expense of $34.6 million. The increase was partially offset by a $165.0 million increase in revenues.
Current wording
Net Cash Provided by Operating Activities. Net cash provided by operating activities was $185.6 million and $213.5 million for the nine months ended September 30, 2024 and 2023, respectively. The decrease is primarily attributable to increased cost of sales (excluding depreciation, depletion and accretion expense) of $340.4 million as well as an increase in selling, general and administrative expense of $45.7 million. The increase was partially offset by a $311.8 million increase in revenues.
Previous wording
Net Cash Used in Investing Activities. Net cash used in investing activities was $353.5 million and $146.8 million for the six months ended June 30, 2024 and 2023, respectively. The increase is primarily attributable to $142.2 million spent on the Hi-Crush Transaction as well as capital spending at the Kermit and Monahans facilities, Dune Express and logistics assets during the six months ended June 30, 2024 when compared to the six months ended June 30, 2023.
Current wording
Net Cash Used in Investing Activities. Net cash used in investing activities was $429.8 million and $245.7 million for the nine months ended September 30, 2024 and 2023, respectively. The increase is primarily attributable to $142.2 million spent on the Hi-Crush Transaction as well as capital spending at the Kermit and Monahans facilities, Dune Express and logistics assets during the nine months ended September 30, 2024 when compared to the nine months ended September 30, 2023.
Previous wording
Net Cash Provided by Financing Activities. Net cash provided by financing activities was $147.6 million and $248.4 million for the six months ended June 30, 2024 and 2023, respectively. This decrease is primarily related to $303.4 million of initial IPO proceeds raised in June 30, 2023 as compared to June 30, 2024. This was offset by an increase of $201.5 million of net proceeds from borrowing related to our acquisition financing during the six months ended June 30, 2024 compared to the six months ended June 30, 2023.
Current wording
Net Cash Provided by Financing Activities. Net cash provided by financing activities was $112.6 million and $214.7 million for the nine months ended September 30, 2024 and 2023, respectively. This decrease is primarily related to $303.4 million of initial IPO proceeds raised in September 30, 2023 as compared to September 30, 2024. This was offset by an increase of $198.5 million of net proceeds from borrowing related to our acquisition financing during the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023.
Previous wording
In accordance with the Merger Agreement, the Company issued the Deferred Cash Consideration Note in favor of the Hi-Crush Stockholders in the original aggregate principal amount of $111.8 million. The Deferred Cash Consideration Note was part of the consideration transferred and valued at fair value at the acquisition date, which is subject to customary purchase price adjustments and payable in cash or in kind, at Atlas LLC’s election. The Deferred Cash Consideration Note will mature on January 31, 2026 and 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 $1.4 million and $1.8 million for the three and six months ended June 30, 2024, respectively.
Current wording
In accordance with the Merger Agreement, the Company issued the Deferred Cash Consideration Note in favor of the Hi-Crush Stockholders in the original aggregate principal amount of $111.8 million. The Deferred Cash Consideration Note was part of the consideration transferred and valued at fair value at the acquisition date, which is subject to purchase price adjustments as defined in the Merger Agreement and payable in cash or in kind, at Atlas LLC’s election. The Deferred Cash Consideration Note will mature on January 31, 2026 and 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 $1.4 million and $3.2 million for the three and nine months ended September 30, 2024, respectively.
Previous wording
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 $0.7 million and $0.8 million in total for the three and six months ended June 30, 2024, respectively.
Current wording
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 $1.4 million in total for the three and nine months ended September 30, 2024, respectively.
Previous wording
Each delayed draw term loan (the “DDT Loans”) under the 2023 Term Loan Credit Facility will be payable in equal monthly installments, with the monthly installments comprising 80% of the DDT Loan and a final payment of the remaining 20% of the outstanding principal balance due at maturity, unless earlier prepaid. The DDT Loans will bear interest at a rate equal to the applicable Term Secured Overnight Financing Rate (“SOFR”) Rate as of each Delayed Draw Funding Date (each as defined in the 2023 Term Loan Credit Agreement) plus 5.95% per annum. All monthly installments with respect to the Initial Term Loan and the DDT Loans payable on or prior to January 1, 2025 will be interest only. Interest expense associated with the debt was $4.3 million and $8.6 million for the three and six months ended June 30, 2024, respectively. The interest expense associated with the discount and deferred financing costs were $0.3 million and $0.6 million for the three and six months ended June 30, 2024, respectively.
Current wording
Each delayed draw term loan (the “DDT Loans”) under the 2023 Term Loan Credit Facility will be payable in equal monthly installments, with the monthly installments comprising 80% of the DDT Loan and a final payment of the remaining 20% of the outstanding principal balance due at maturity, unless earlier prepaid. The DDT Loans will bear interest at a rate equal to the applicable Term Secured Overnight Financing Rate (“SOFR”) Rate as of each Delayed Draw Funding Date (each as defined in the 2023 Term Loan Credit Agreement) plus 5.95% per annum. All monthly installments with respect to the Initial Term Loan and the DDT Loans payable on or prior to January 1, 2025 will be interest only. Interest expense associated with the debt was $4.2 million and $12.8 million for the three and nine months ended September 30, 2024, respectively, and $2.9 million for both the three and nine months ended September 30, 2023. The interest expense associated with the discount and deferred financing costs was $0.4 million and $1.0 million for the three and nine months ended September 30, 2024, respectively, and $0.2 million for both the three and nine months ended September 30, 2023.
Previous wording
The Term Loan Amendment provided the ADDT Loan in the aggregate principal amount of $150.0 million with interest (computed on the basis of a 365-day year for the actual number of days elapsed) on the unpaid principal amount thereof from and including the date of the amendment until paid in full at the rate per annum equal to 10.86%. The ADDT Loan is payable in 76 consecutive monthly installments of combined principal and interest each in the amount of $2.7 million commencing April 1, 2024 and continuing up to and including August 1, 2030. There was interest expense of $4.0 million and $5.4 million for the three and six months ended June 30, 2024, respectively.
Current wording
The Term Loan Amendment provided the ADDT Loan in the aggregate principal amount of $150.0 million with interest (computed on the basis of a 365-day year for the actual number of days elapsed) on the unpaid principal amount thereof from and including the date of the amendment until paid in full at the rate per annum equal to 10.86%. The ADDT Loan is payable in 76 consecutive monthly installments of combined principal and interest each in the amount of $2.7 million commencing April 1, 2024 and continuing up to and including August 1, 2030. There was interest expense of $3.8 million and $9.2 million for the three and nine months ended September 30, 2024, respectively.
Showing the first 40 of 47 pairs. Open the source sections for the rest.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
On August 1, 2024, the Company declared a dividend of $0.23 per share of Common Stock. The dividend was paid on August 22, 2024 to holders of record of Common Stock as of the close of business on August 15, 2024.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
On April 14, 2024, a mechanical fire occurred at one of the Company's plants in Kermit, Texas. The fire primarily impacted the feed system of the processing facility, which transports sand from the dryers and separators to storage silos. During the second quarter of 2024, the Company utilized temporary loadout equipment at the plant to continue production. The Company was able to transition to the temporary loadout within 11 days of the fire incident. Reconstruction of the feed system was completed in June 2024 and the plant was operational by June 30, 2024.