On August 5, 2024, Atlas Energy Solutions Inc (AESI, Financial) released its 8-K filing detailing the financial results for the second quarter ended June 30, 2024. Atlas Energy Solutions Inc is a provider of proppant and logistics services to the oil and natural gas industry within the Permian Basin of West Texas and New Mexico, the most active oil and natural gas basin in North America.
Performance Overview
Atlas Energy Solutions Inc (AESI, Financial) reported total sales of $287.5 million for Q2 2024, significantly surpassing the analyst estimate of $272.55 million. However, the company’s net income of $14.8 million fell short of expectations, translating to an earnings per share (EPS) of $0.13, below the estimated $0.30 EPS.
Despite the lower-than-expected net income, the company achieved an Adjusted EBITDA of $72.0 million, representing a 25% Adjusted EBITDA Margin. The net cash provided by operating activities was $60.9 million, and the Adjusted Free Cash Flow stood at $66.6 million, indicating a 23% Adjusted Free Cash Flow Margin.
Key Financial Metrics
| Metric | Q2 2024 | Q1 2024 | Q2 2023 |
|---|---|---|---|
| Total Sales | $287.5 million | $192.7 million | $161.8 million |
| Net Income | $14.8 million | $26.8 million | $71.2 million |
| Adjusted EBITDA | $72.0 million | $75.5 million | $92.8 million |
| Net Cash Provided by Operating Activities | $60.9 million | $39.6 million | $103.9 million |
| Adjusted Free Cash Flow | $66.6 million | $71.1 million | $86.8 million |
Operational Highlights and Challenges
Atlas Energy Solutions Inc (AESI, Financial) faced operational challenges during the quarter, particularly due to the reconstruction of the Kermit Feed System. John Turner, President & CEO, commented,
“While second quarter results were weighed down by lower throughput and higher costs related to the reconstruction of the Kermit Feed System, the rest of our operations performed exceedingly well. The reconstruction of the damaged feed system was completed at the end of June, and, after a ramp-up period in July, Atlas is back to normal loadout operations today at Kermit.”
The company’s cost of sales increased by $95.4 million, or 89%, compared to the first quarter of 2024, primarily driven by the full quarter contribution of Hi-Crush operations and elevated costs associated with the Kermit facility. Despite these challenges, Atlas Energy Solutions Inc (AESI, Financial) managed to declare an increased quarterly dividend of $0.23 per share, payable on August 22, 2024.
Financial Achievements and Industry Impact
Atlas Energy Solutions Inc (AESI, Financial) achieved significant financial milestones, including a 49% increase in total sales compared to the first quarter of 2024. The company’s liquidity stood at $279.2 million as of June 30, 2024, comprising $104.7 million in cash and cash equivalents, $74.5 million of availability under the ABL Facility, and $100 million of availability under the Delayed Draw Term Loan Facility.
The company’s ability to generate substantial Adjusted Free Cash Flow is crucial for sustaining dividends and reinvesting in growth projects, which is vital for maintaining its competitive edge in the oil and gas industry. The ongoing construction of the Dune Express, which remains on-time and on-budget, is expected to further enhance the company’s logistics capabilities.
Income Statement Highlights
Atlas Energy Solutions Inc (AESI, Financial) reported a gross profit of $60.4 million for Q2 2024, with selling, general, and administrative expenses decreasing by 3% to $27.3 million compared to Q1 2024. The company’s operating income was $28.2 million, while interest expenses amounted to $10.5 million.
Balance Sheet and Cash Flow
As of June 30, 2024, Atlas Energy Solutions Inc (AESI, Financial) reported total assets of $1.98 billion, with total liabilities amounting to $920.4 million. The company’s net cash used in investing activities was $115.8 million, primarily driven by the construction of the Dune Express and additional OnCore deployments.
Conclusion
Atlas Energy Solutions Inc (AESI, Financial) demonstrated resilience in Q2 2024 despite operational challenges, achieving significant revenue growth and maintaining strong liquidity. The company’s strategic investments in logistics infrastructure and technology are expected to drive future growth and enhance shareholder value.
For more detailed insights and the full financial report, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from Atlas Energy Solutions Inc for further details.
