Solaris Energy Infrastructure, Inc.
1697500
Apr 30, 2025, 08:59 PM
0001193125-25-107559
Items (5)
Item 1.01. Entry into a Material Definitive Agreement.
Item 2.02. Results of Operations and Financial Condition. On April 30, 2025, the Company provided certain updated financial and operational information. The information contained in Item 8.01 of this Current Report on Form8-K, to the extent required, is incorporated into this Item 2.02 by reference. The information in this Item 2.02 is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “ Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. The information provided under Item 1.01 of this Current Report on Form8-Kunder the subheader “ Term Loan and Revolving Credit Facility Amendments” is incorporated into this Item 2.03 by reference.
Item 8.01. Other Events. Also on April 30, 2025, the Company provided certain updated disclosures, as set forth below. * * * Preliminary First Quarter Financial and Operating Information As of the date hereof, we have not finalized our operational results nor completed our quarter-endclosing for the three-month period ended March 31, 2025, and our auditors have not reviewed financial information for such quarter. The preliminary estimates presented below are derived from our internal records and are based on the most current information available to management. During the course of our review process of these preliminary estimates, we could identify items that would require us to make adjustments that could affect the final results. Any such adjustments could be material. Based on our preliminary expectations, we estimate the following for the three-month period ended March 31, 2025: Three Months Ended March 31, 2025 (in thousands) ────────────────────────────────────────────────────────────────────────────── Solaris Inc.: Revenue $126,332 Net income (loss) $12,968 Earnings per diluted share of Class A common stock $0.14 Adjusted EBITDA (1) $46,881 Net cash provided by operating activities $25,722 Net cash used in investing activities $(144,323 Capital expenditures $144,330 Solaris Power Solutions: Capacity earning revenue 390 MW Revenue $49,375 Segment Adjusted EBITDA $31,905 Solaris Logistics Solutions: Revenue $76,957 Segment Adjusted EBITDA $25,974 (1) Adjusted EBITDA is a non-GAAP measure. For the definition of Adjusted EBITDA, please see “ Summary Historical and Pro Forma Consolidated Financial Data— Non-GAAP Financial Measures.” The following table presents a reconciliation of the GAAP financial measure of net income to the non-GAAP financial measure of Adjusted EBITDA. Three Months Ended March 31, 2025 (in thousands) ──────────────────────────────────────────────────────────────────────────── Net income (loss) $ 12,968 Depreciation and amortization 20,064 Interest expense, net 5,171 Provision for income taxes (1) 3,916 EBITDA $ 42,119 Stock-based compensation expense (2) 3,277 Credit losses 794 Other (3) 691 Total Adjusted EBITDA $ 46,881 (1) United States federal and state income taxes. (2) Represents stock-based compensation expense related to restricted stock awards and performance- based restricted stock units. (3) Other includes the net effect of loss/gain on disposal of assets and lease terminations, inventory write-offs and transaction costs. As of March 31, 2025, we had no outstanding borrowings under our Revolving Credit Facility and $16.7 million in total cash and cash equivalents. In addition, we had approximately $49.4 million of borrowing base availability under our Revolving Credit Facility as of March 31, 2025. These preliminary estimates are derived from our internal records and are based on the most current information available to management. These estimates are preliminary and inherently uncertain. Our normal reporting processes with respect to the foregoing preliminary estimates have not been fully completed. BDO USA, P. C. has not audited, reviewed, examined, compiled, nor applied agreed-upon procedures with respect to this preliminary consolidated financial data. Accordingly, BDO USA, P. C. does not express an opinion or any other form of assurance with respect thereto. During the course of our and our auditors’ review on these preliminary estimates, we could identify items that would require us to make adjustments and which could affect our final results. Any such adjustments could be material. These preliminary estimates should not be viewed as indicative of our financial condition or results as of or for any future period. Actual results could differ from the estimates, trends and expectations discussed herein, and such differences could be material. Non-GAAP As used herein and unless expressly provided otherwise, the term “pro forma” when used with respect to any financial data refers to the historical data of Solaris, as adjusted as described herein. Pro forma financial data for the year ended December 31, 2024 gives effect to the acquisition of Mobile Energy Rentals, LLC (“ MER” and such acquisition, the “ MER Acquisition”) as if it had been consummated on January 1, 2024. Pro forma financial data contains certain reclassification adjustments to conform the respective historical financial statement presentation of MER to Solaris’ financial statement presentation. In each case, the pro forma data is presented for illustrative purposes only and should not be relied upon as an indication of the results of operations that would have been achieved if the MER Acquisition had taken place on the specified dates. Accordingly, future results may vary significantly from the results reflected in such pro forma data and should not be relied on as an indication of future results. See our unaudited pro forma condensed combined financial statements and the related notes thereto incorporated by reference herein for additional information. The following table presents a reconciliation of Net income to EBITDA and Adjusted EBITDA for each of the periods indicated. Pro Forma Year Ended December 31, 2024 ───────────────────────────────────────────────────────────────────────────────────────────────────── (in thousands, Net income (loss) $ 19,068 Depreciation and amortization 72,442 Interest expense, net 18,261 Income taxes (1) 2,241 EBITDA $ 112,012 Property tax contingency (2) (2,483 Accrued property tax (3) (1,794 Stock-based compensation expense (4) 10,592 Loss on disposal of assets 148 Loss on extinguishment of debt (5) 4,085 Gain on sale of Kingfisher facility (6) (7,461 Changes in payables related to Tax Receivable Agreement (7) (1,598 Credit losses 369 Acquisition-related costs (8) 4,358 Other (9) 937 Adjusted EBITDA $ 119,165 (1) United States federal and state income taxes. (2) Represents reversal of a portion of previously recognized property tax contingency following a settlement agreement with Brown County Appraisal District. (3) Represents reversal of previously recognized accrued property tax expenses following a settlement agreement with Brown County Appraisal District, included in cost of services in the condensed consolidated statements of operations. (4) Represents stock-based compensation expense related to restricted stock awards and performance-based restricted stock units. (5) Primarily consists of the write-off of the unamortized portion of debt financing costs associated with securing a bridge financing facility, which had not been utilized and was subsequently extinguished upon obtaining alternative financing for the MER Acquisition. (6) Represents gain recognized on the sale of a 300-acre transload facility located in Kingfisher, Oklahoma and termination of an associated lease. All assets had zero net carrying value at the time of sale. (7) Reduction in liability due to state rate changes. (8) Represents costs incurred to affect the MER Acquisition. (9) Other includes the net effect of inventory write-offs severance costs, transaction costs and other settlements. * * * Risk Factors Tariffs and other trade measures could adversely affect our results of operations, financial position and cash flows. In April 2025, the U. S. government announced a baseline tariff of 10% on products from all countries and an additional individualized reciprocal tariff on the countries with which the United States has the largest trade deficits. As a result of the new administration’s trade policy, tariffs have increased and may continue to increase our material input costs. Any further trade restrictions, retaliatory trade measures and additional tariffs could result in higher input costs to our products, increased costs and delays in meeting our customers’ orders. For example, several of our rental orders for power generation equipment provide for adjustments to the purchase price paid in response to future taxes or tariffs not in place at the time of agreement. We may not be able to fully mitigate the impact of these increased costs or pass price increases on to our customers. The imposition of further tariffs by the United States on a broader range of imports, or further retaliatory trade measures taken in response to additional tariffs, could increase costs in our supply chain or reduce demand of our customers’ products, either of which could adversely affect our results of operations. Additionally, changes in trade policy may have on the global economic environment (including any potential recession) could have a negative impact on the demand for our power generation solutions as our customers delay or cancel projects in which our business may service. 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 negative impacts. We are subject to a number of risks associated with the Stateline joint venture. On April 28, 2025, we announced the formation of Stateline, a joint venture between Solaris Power Solutions, a wholly owned subsidiary of Solaris LLC, and CTC, an affiliate of an industry leader in the evolving artificial intelligence computing space. The Stateline joint venture is expected to account for approximately 900 MW (or approximately 53% of our Solaris Power Solutions generation assets), and as such, the Stateline joint venture subjects our overall business to a number of risks, including: the risk that the demand for off-grid power generation related to artificial intelligence does not grow in the manner in which we expect; the fact that we derive, and will continue to derive, a significant portion of our revenue from a relatively small number of customers, and as a result, this reliance on a few large customers may adversely affect our revenue and operating results; ─────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────── Stateline may need to seek additional debt and equity financing to support its working capital needs and there can be no assurance that such financing would be available to Stateline on favorable terms or at all; ──────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────── Stateline and the industry in which it operates is subject to complex, developing regulatory frameworks, which may increase the time and labor necessary to operate the project as the parties intend; ────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────── we may experience difficulties in finding alternative lessors for our power generation equipment dedicated to Stateline in the event of an early termination of the related rental agreement; ───────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────── certain key members of Solaris management will dedicate a significant amount of their time and attention to the Stateline joint venture; and the management agreement to which our subsidiary is a party provides for the termination of its operatorship under certain circumstances and, if those circumstances were to occur, (i) our joint venture partner may have the right to purchase our equity interests in Stateline and (ii) Solaris would lose its seats on the Stateline Board. ────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────
Item 9.01. Financial Statements and Exhibits. (d) Exhibits Exhibit Description No. 10.1# Term Loan Amendment, dated April 28, 2025. 10.2 Revolver Amendment, dated April 28, 2025. ───────────────────────────────────────────────────────────────────────────────────────── 104 Cover Page Interactive Data File (embedded within Inline XBRL document). Certain schedules, annexes or exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K, but will be supplementally furnished to the SEC upon request. Certain portions of this exhibit have been omitted because they are both (i) not material and (ii) would be competitively harmful if publicly disclosed. 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 hereunto duly authorized. SOLARIS ENERGY INFRASTRUCTURE, INC. By: /s/ Kyle S. Ramachandran Name: Kyle S. Ramachandran Title: President and Chief Financial Officer