Docoh
Loading...

SOI Solaris Oilfield Infrastructure

Document and Entity Information

Document and Entity Information - shares3 Months Ended
Mar. 31, 2021Apr. 28, 2021
Document and Entity Information
Document Type10-Q
Document Quarterly Reporttrue
Document Period End DateMar. 31,
2021
Document Transition Reportfalse
Entity File Number001-38090
Entity Registrant NameSOLARIS OILFIELD INFRASTRUCTURE, INC.
Entity Incorporation, State or Country CodeDE
Entity Tax Identification Number81-5223109
Entity Address, Address Line One9811 Katy Freeway, Suite 700
Entity Address, City or TownHouston
Entity Address, State or ProvinceTX
Entity Address, Postal Zip Code77024
City Area Code281
Local Phone Number501-3070
Title of 12(b) SecurityClass A Common Stock
Trading SymbolSOI
Security Exchange NameNYSE
Entity Current Reporting StatusYes
Entity Interactive Data CurrentYes
Entity Filer CategoryAccelerated Filer
Entity Small Businesstrue
Entity Emerging Growth Companytrue
Entity Ex Transition Periodtrue
Entity Shell Companyfalse
Entity Central Index Key0001697500
Current Fiscal Year End Date--12-31
Document Fiscal Year Focus2021
Document Fiscal Period FocusQ1
Amendment Flagfalse
Class A Common Stock
Document and Entity Information
Entity Common Stock, Shares Outstanding31,866,167
Class B Common Stock
Document and Entity Information
Entity Common Stock, Shares Outstanding13,818,517

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in ThousandsMar. 31, 2021Dec. 31, 2020
Current assets:
Cash and cash equivalents $ 55,060 $ 60,366
Accounts receivable, net of allowances for credit losses21,421 18,243
Prepaid expenses and other current assets1,934 2,169
Inventories1,509 954
Total current assets79,924 81,732
Property, plant and equipment, net242,413 245,884
Non-current inventories2,994 3,318
Operating lease right-of-use assets4,579 4,708
Goodwill13,004 13,004
Intangible assets, net2,787 2,982
Deferred tax assets63,734 59,805
Other assets422 463
Total assets409,857 411,896
Current liabilities:
Accounts payable11,869 6,863
Accrued liabilities7,551 11,986
Current portion of payables related to Tax Receivable Agreement606 606
Current portion of operating lease liabilities662 647
Current portion of finance lease liabilities30 30
Other current liabilities75 75
Total current liabilities20,793 20,207
Operating lease liabilities, net of current7,288 7,419
Finance lease liabilities, net of current93 100
Payables related to Tax Receivable Agreement72,908 68,097
Other long-term liabilities591 594
Total liabilities101,673 96,417
Commitments and contingencies (Note 8)
Stockholders' equity:
Preferred stock, $0.01 par value, 50,000 shares authorized, none issued and outstanding
Additional paid-in capital193,890 180,415
Retained earnings15,715 20,549
Total stockholders' equity attributable to Solaris209,915 201,254
Non-controlling interest98,269 114,225
Total stockholders' equity308,184 315,479
Total liabilities and stockholders' equity409,857 411,896
Class A Common Stock
Stockholders' equity:
Common Stock310 290
Class B Common Stock
Stockholders' equity:
Common Stock

CONDENSED CONSOLIDATED BALANC_2

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in ThousandsMar. 31, 2021Dec. 31, 2020
Allowance for credit losses $ 754 $ 1,099
Preferred stock, par value (in dollars per share) $ 0.01 $ 0.01
Preferred stock, shares authorized50,000 50,000
Preferred stock, shares issued0 0
Preferred stock, shares outstanding0 0
Class A Common Stock
Common stock, par value (in dollars per share) $ 0.01 $ 0.01
Common stock, shares authorized600,000 600,000
Common stock, shares issued30,978 28,943
Common stock, shares outstanding30,978 28,943
Class B Common Stock
Common stock, par value (in dollars per share) $ 0 $ 0
Common stock, shares authorized180,000 180,000
Common stock, shares issued13,820 15,685
Common stock, shares outstanding13,820 15,685

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands3 Months Ended
Mar. 31, 2021Mar. 31, 2020
Revenue:
Total revenue $ 28,669 $ 47,830
Operating costs and expenses:
Depreciation and amortization6,693 7,114
Selling, general and administrative (excluding $185 and $152 of depreciation and amortization for the three months ended March 31, 2021 and 2020, respectively, shown separately)4,606 4,406
Impairment losses47,828
Other operating expenses253 1,198
Total operating costs and expenses30,758 87,171
Operating loss(2,089)(39,341)
Interest income (expense), net(49)111
Total other expense (income)(49)111
Loss before income tax expense(2,138)(39,230)
Benefit for income taxes213 6,078
Net loss(1,925)(33,152)
Less: net loss related to non-controlling interests756 14,071
Net loss attributable to Solaris(1,169)(19,081)
System rental
Revenue:
Total revenue13,648 26,059
Operating costs and expenses:
Cost of revenue1,608 2,013
Depreciation and amortization6,140 6,001
System services
Revenue:
Total revenue14,710 20,957
Operating costs and expenses:
Cost of revenue17,252 24,130
Depreciation and amortization174 357
Transloading services
Revenue:
Total revenue114 465
Operating costs and expenses:
Cost of revenue244 337
Depreciation and amortization0 411
Inventory software services
Revenue:
Total revenue197 349
Operating costs and expenses:
Cost of revenue102 145
Depreciation and amortization $ 194 $ 193
Class A Common Stock
Operating costs and expenses:
Loss per share of Class A common stock - basic (in dollars per share) $ (0.04) $ (0.65)
Loss per share of Class A common stock - diluted (in dollars per share) $ (0.04) $ (0.65)
Basic weighted-average shares of Class A common stock outstanding (in shares)29,957 29,312
Diluted weighted-average shares of Class A common stock outstanding (in shares)29,957 29,312

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands3 Months Ended
Mar. 31, 2021Mar. 31, 2020
Depreciation and amortization $ 6,693 $ 7,114
Stock-based compensation expense1,199 1,329
Selling, general and administrative expenses
Depreciation and amortization185 152
Stock-based compensation expense1,013 1,114
System rental
Depreciation and amortization6,140 6,001
Stock-based compensation expense5 13
System services
Depreciation and amortization174 357
Stock-based compensation expense172 199
Transloading services
Depreciation and amortization0 411
Stock-based compensation expense9 3
Inventory software services
Depreciation and amortization $ 194 $ 193

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in ThousandsCommon StockClass A Common StockCommon StockClass B Common StockAdditional Paid-in CapitalRetained EarningsTreasury StockNon-controlling InterestTotal
Balance at beginning of year at Dec. 31, 2019 $ 308 $ 191,843 $ 74,222 $ (2,526) $ 145,811 $ 409,658
Balance at beginning of year (in shares) at Dec. 31, 201930,765 15,940 163
Changes in Stockholders' Equity
Exchange of Solaris LLC Units and shares of Class B common stock for shares of Class A common stock $ 1 460 (461)
Exchange of Solaris LLC Units and shares of Class B common stock for shares of Class A common stock (in shares)50 (50)
Net effect of deferred tax asset and payables related to Tax Receivable Agreement from the exchange of Solaris LLC Units and shares of Class B common stock for shares of Class A common stock(303)(303)
Stock option exercises66 $ (80)(11)(25)
Stock option exercises (in shares)9 7
Share and unit repurchases and retirements $ (24)(14,804)(10,177)(1,711)(26,716)
Share and unit repurchases and retirements (in shares)(2,374)
Stock-based compensation907 492 1,399
Vesting of restricted stock $ 1 471 $ (373)(473)(374)
Vesting of restricted stock (in shares)105 37
Solaris LLC distribution paid to Solaris LLC unitholders(1,668)(1,668)
Dividends paid (Class A common stock)(3,087)(3,087)
Treasury stock retirements(1,247)(1,732) $ 2,979
Treasury stock retirements (in shares)(207)
Net loss(19,081)(14,071)(33,152)
Balance at end of year at Mar. 31, 2020 $ 286 177,393 40,145 127,908 345,732
Balance at end of year (in shares) at Mar. 31, 202028,555 15,890
Balance at beginning of year at Dec. 31, 2020 $ 290 180,415 20,549 114,225 315,479
Balance at beginning of year (in shares) at Dec. 31, 202028,943 15,685
Changes in Stockholders' Equity
Exchange of Solaris LLC Units and shares of Class B common stock for shares of Class A common stock $ 19 13,526 (13,545)
Exchange of Solaris LLC Units and shares of Class B common stock for shares of Class A common stock (in shares)1,865 (1,865)
Net effect of deferred tax asset and payables related to Tax Receivable Agreement from the exchange of Solaris LLC Units and shares of Class B common stock for shares of Class A common stock(1,184)(1,184)
Stock option exercises18 (6)12
Stock option exercises (in shares)4
Stock-based compensation854 418 1,272
Vesting of restricted stock $ 2 407 (409)
Vesting of restricted stock (in shares)223
Cancelled shares withheld for taxes from RSU vesting $ (1)(146)(319)(207)(673)
Cancelled shares withheld for taxes from RSU vesting (in shares)(57)
Solaris LLC distribution paid to Solaris LLC unitholders(1,451)(1,451)
Dividends paid (Class A common stock)(3,346)(3,346)
Net loss(1,169)(756)(1,925)
Balance at end of year at Mar. 31, 2021 $ 310 $ 193,890 $ 15,715 $ 98,269 $ 308,184
Balance at end of year (in shares) at Mar. 31, 202130,978 13,820

CONDENSED CONSOLIDATED STATEM_4

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares3 Months Ended
Mar. 31, 2021Mar. 31, 2020
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
Distributions paid to unit holders (in dollars per unit) $ 0.105 $ 0.105
Cash dividends paid (in dollars per share) $ 0.105 $ 0.105

CONDENSED CONSOLIDATED STATEM_5

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands3 Months Ended
Mar. 31, 2021Mar. 31, 2020
Cash flows from operating activities:
Net loss $ (1,925) $ (33,152)
Adjustment to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization6,693 7,114
Loss on disposal of asset18 57
Allowance for credit losses283 893
Stock-based compensation1,199 1,329
Amortization of debt issuance costs48 44
Deferred income tax benefit(302)(5,775)
Impairment losses47,828
Other5 23
Changes in operating assets and liabilities:
Accounts receivable(3,460)(10,241)
Prepaid expenses and other assets235 543
Inventories(622)(887)
Accounts payable5,055 3,184
Accrued liabilities(4,461)744
Net cash provided by operating activities2,766 11,704
Cash flows from investing activities:
Investment in property, plant and equipment(2,647)(699)
Proceeds from disposal of assets40
Cash received from insurance proceeds26
Net cash used in investing activities(2,607)(673)
Cash flows from financing activities:
Share repurchases(26,723)
Distribution and dividend paid to Solaris LLC unitholders (other than Solaris Inc.) and Class A common shareholders(4,797)(4,755)
Payments under finance leases(7)(9)
Proceeds from stock option exercises12 55
Payments for shares withheld for taxes from RSU vesting and cancelled(673)
Payments related to purchase of treasury stock(454)
Net cash used in financing activities(5,465)(31,886)
Net decrease in cash(5,306)(20,855)
Cash at beginning of period60,366 66,882
Cash at end of period55,060 46,027
Non-cash activities
Capitalized depreciation in property, plant and equipment143 161
Capitalized stock based compensation73 67
Property and equipment additions incurred but not paid at period-end604 165
Property, plant and equipment additions transferred from inventory392 229
Cash paid for:
Interest $ 33 $ 33

Organization and Background of

Organization and Background of Business3 Months Ended
Mar. 31, 2021
Organization and Background of Business
Organization and Background of Business1. Organization and Background of Business Description of Business We design and manufacture specialized equipment, which combined with field technician support, logistics services and our software solutions, enables us to provide a service offering that helps oil and natural gas operators and their suppliers drive efficiencies and reduce costs during the completion phase of well development. Our equipment and services are deployed in most of the active oil and natural gas basins in the United States.

Summary of Significant Accounti

Summary of Significant Accounting Policies3 Months Ended
Mar. 31, 2021
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies2. Summary of Significant Accounting Policies Basis of Presentation and Consolidation Solaris Oilfield Infrastructure, Inc. (either individually or together with its subsidiaries, as the context requires “Solaris Inc.” or the “Company”) is the managing member of Solaris Oilfield Infrastructure, LLC (“Solaris LLC”) and is responsible for all operational, management and administrative decisions relating to Solaris LLC’s business. Solaris Inc. consolidates the financial results of Solaris LLC and its subsidiaries and reports non-controlling interest related to the portion of the units in Solaris LLC (the “Solaris LLC Units”) not owned by Solaris Inc., which will reduce net income attributable to the holders of Solaris Inc.’s Class A common stock. The accompanying interim unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). These financial statements reflect all normal recurring adjustments that are necessary for fair presentation. Operating results for the three months ended March 31, 2021 and 2020 are not necessarily indicative of the results that may be expected for the full year or for any interim period. The unaudited interim condensed consolidated financial statements do not include all information or notes required by GAAP for annual financial statements and should be read together with Solaris Inc.’s Annual Report on Form 10-K for the year ended December 31, 2020 and notes thereto. All material intercompany transactions and balances have been eliminated upon consolidation. COVID-19 and Global Economic and Market Conditions The novel strain of coronavirus ("COVID-19") has caused, and continues to cause, severe disruptions to the U.S. and global economies, including the oil and gas industry and the demand for our products and services. The degree to which COVID-19 and related events outside of our control adversely impacts our results will depend on future developments, which are highly uncertain and cannot be predicted, including the timing, extent, trajectory and duration of the COVID-19 pandemic, the development, availability and administration of effective treatments and vaccines and the impact of the COVID-19 pandemic on the global economy and any subsequent recovery of normal economic and operating conditions. While we expect these matters discussed above will continue to disrupt our operations in some way, the degree of the adverse financial impact cannot be reasonably estimated at this time. Use of Estimates The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The most significant estimates relate to stock-based compensation, useful lives and salvage values of long-lived assets, future cash flows associated with goodwill and long-lived asset impairment, net realizable value of inventory, collectability of accounts receivable and estimates of allowance for credit losses and determination of the present value of lease payments and right-of-use assets. Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. Recently Issued Accounting Standards In March 2020, the Financial Accounting Standards Board issued ASU No. 2020-04, Reference Rate Reform, which provides temporary optional guidance to companies impacted by the transition away from the London Interbank Offered Rate (“LIBOR”). The guidance provides certain expedients and exceptions to applying GAAP in order to lessen the potential accounting burden when contracts, hedging relationships, and other transactions that reference LIBOR as a benchmark rate are modified. This guidance is effective upon issuance and expires on December 31, 2022. The Company is currently assessing the impact of the LIBOR transition and this ASU on the Company’s financial statements.

Property, Plant and Equipment

Property, Plant and Equipment3 Months Ended
Mar. 31, 2021
Property, Plant and Equipment
Property, Plant and Equipment3. Property, Plant and Equipment Property, plant and equipment are stated at cost. We manufacture or construct most of our systems. During the manufacture of these assets, they are reflected as systems in process until complete. Modifications to existing systems, including the expenditures for upgrades and enhancements that result in additional functionality, increased efficiency, or the extension of the estimated useful life, are capitalized. Property, plant and equipment consists of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, December 31, ​ 2021 2020 Systems and related equipment ​ $ 302.7 ​ $ 299.4 Systems in process ​ ​ 12.0 ​ 12.6 Computer hardware and software ​ 1.0 ​ 1.0 Machinery and equipment ​ 5.3 ​ 5.3 Vehicles ​ 4.2 ​ 3.6 Buildings ​ 4.3 ​ 4.3 Land ​ 0.6 ​ 0.6 Furniture and fixtures ​ ​ 0.4 ​ 0.4 Property, plant and equipment, gross ​ $ 330.5 ​ $ 327.2 Less: accumulated depreciation ​ (88.1) ​ (81.3) Property, plant and equipment, net ​ $ 242.4 ​ $ 245.9 ​

Debt

Debt3 Months Ended
Mar. 31, 2021
Debt
Debt4. Debt On April 26, 2019, Solaris LLC entered into an Amended and Restated Credit Agreement (the “2019 Credit Agreement”) by and among Solaris LLC, as borrower, each of the lenders party thereto and Wells Fargo Bank, National Association, as administrative agent. The 2019 Credit Agreement consists of an initial $50.0 revolving loan commitment (the “Loan”) with a $25.0 uncommitted accordion option to increase the Loan availability to $75.0. The term of the 2019 Credit Agreement expires on April 26, 2022. The 2019 Credit Agreement requires that we prepay any outstanding borrowings under the Loan in the event our total leverage ratio is greater than 1.00 to 1.00 and our consolidated cash balance exceeds $20.0, taking into account certain adjustments. At March 31, 2021, we had no borrowings under the 2019 Credit Agreement outstanding and ability to draw $35.0. Although there were no borrowings outstanding under the 2019 Credit Agreement, the applicable margin ranges from 1.75% to 2.50% for Eurodollar loans and 0.75% to 1.50% for alternate base rate loans, in each case depending on our total leverage ratio. The 2019 Credit Agreement requires that we pay a quarterly commitment fee on undrawn amounts of the Loan, ranging from 0.25% to 0.375% depending upon the total leverage ratio. We were in compliance with all covenants in accordance with the 2019 Credit Agreement as of March 31, 2021.

Equity

Equity3 Months Ended
Mar. 31, 2021
Equity
Equity5. Equity Dividends Solaris LLC paid distributions totaling $4.8 and $4.8 to all Solaris LLC unitholders in the three months ended March 31, 2021 and 2020, respectively, of which $3.3 and $3.1 was paid to Solaris Inc. Solaris Inc. used the proceeds from the distributions to pay quarterly cash dividends to all holders of shares of Class A common stock. Stock-based compensation The Company’s long-term incentive plan for employees, directors and consultants (the “LTIP”) provides for the grant of all or any of the following types of equity-based awards: (1) incentive stock options qualified as such under United States 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; (6) bonus stock; (7) performance awards; (8) dividend equivalents; (9) other stock-based awards; (10) cash awards; and (11) substitute awards. Subject to adjustment in accordance with the terms of the LTIP, 5,118,080 shares of Solaris Inc.’s Class A common stock have been reserved for issuance pursuant to awards under the LTIP. As of March 31, 2021, 2,542,120 stock awards were available for grant. The following table summarizes activity related to restricted stock for the three months ended March 31, 2021 and 2020: ​ ​ ​ ​ ​ ​ ​ ​ Restricted Stock Awards ​ ​ 2021 ​ 2020 Unvested at January 1, 703,115 ​ 627,251 Awarded 414,185 ​ 386,146 Vested (223,275) ​ (141,700) Forfeited (5,388) ​ (32,845) Unvested at March 31, ​ 888,637 ​ 838,852 ​ Of the unvested 888,637 shares of restricted stock, it is expected that 185,855 shares, 330,887 shares, 237,793 shares, and 134,102 shares will vest in 2021, 2022, 2023 and 2024, respectively, in each case, subject to the applicable vesting terms governing such shares of restricted stock. There was approximately $9.3 of unrecognized compensation expense related to unvested restricted stock as of March 31, 2021. The unrecognized compensation expense will be recognized over the weighted average remaining vesting period of 1.5 years. Earnings Per Share Basic earnings per share of Class A common stock is computed by dividing net income attributable to Solaris Inc. by the weighted-average number of shares of Class A common stock outstanding during the same period. Diluted earnings per share is computed giving effect to all potentially dilutive shares. The following table sets forth the calculation of earnings per share, or EPS, for the three months ended March 31, 2021 and 2020: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, Basic net income per share: ​ 2021 ​ 2020 ​ ​ ​ ​ ​ ​ ​ Numerator ​ ​ ​ ​ ​ ​ Net loss attributable to Solaris ​ $ (1.2) ​ $ (19.1) Loss attributable to participating securities (1) ​ ​ (0.1) ​ ​ (0.1) Net loss attributable to common stockholders ​ $ (1.3) ​ $ (19.2) ​ ​ ​ ​ ​ ​ ​ Denominator ​ ​ ​ ​ ​ ​ Weighted average number of unrestricted outstanding common shares used to calculate basic net income per share ​ ​ 29,957 ​ ​ 29,312 Diluted weighted-average shares of Class A common stock outstanding used to calculate diluted net income per share ​ ​ 29,957 ​ ​ 29,312 ​ ​ ​ ​ ​ ​ ​ Earnings per share of Class A common stock - basic ​ $ (0.04) ​ $ (0.65) Earnings per share of Class A common stock - diluted ​ $ (0.04) ​ $ (0.65) ​ (1) The Company’s restricted shares of common stock are participating securities. ​ The following number of weighted-average potentially dilutive shares were excluded from the calculation of diluted earnings per share because the effect of including such potentially dilutive shares would have been antidilutive upon conversion: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2021 ​ 2020 Class B common stock ​ ​ 14,729 ​ ​ 15,922 Restricted stock awards ​ ​ 113 ​ ​ 27 Stock Options ​ ​ 10 ​ ​ 17 Total ​ ​ 14,852 ​ ​ 15,966 ​

Income Taxes

Income Taxes3 Months Ended
Mar. 31, 2021
Income Taxes
Income Taxes6. Income Taxes Income Taxes the equity offerings of Class A common stock, exchanges of Solaris LLC Units (together with a corresponding number of shares of Class B common stock) for shares of Class A common stock, and issuances of Class A common stock, and corresponding Solaris LLC Units, in connection with stock-based compensation. Based on our cumulative earnings history and forecasted future sources of taxable income, we believe that we will be able to realize our deferred tax assets in the future. As the Company reassesses this position in the future, changes in cumulative earnings history, excluding non-recurring charges, or changes to forecasted taxable income may alter this expectation and may result in an increase in the valuation allowance and an increase in the effective tax rate. ​ Section 382 of the Internal Revenue Code of 1986, contains rules that limit the ability of a company that undergoes an “ownership change” to utilize its net operating loss and tax credit carryovers and certain built-in losses recognized in years after the “ownership change.” An “ownership change” is generally defined as any change in ownership of more than 50% of a corporation’s stock over a rolling three-year period by stockholders that own (directly or indirectly) 5% or more of the stock of a corporation, or arising from a new issuance of stock by a corporation. If an ownership change occurs, Section 382 generally imposes an annual limitation on the use of pre-ownership change net operating loss carryovers to offset taxable income earned after the ownership change. We do not believe the Section 382 annual limitation related to historical ownership changes impacts our ability to utilize our net operating losses; however, if we were to experience a future ownership change our ability to use net operating losses may be impacted. The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted on March 27, 2020 in the United States to provide emergency assistance to individuals and businesses affected by the COVID-19 pandemic. The CARES Act includes temporary changes to both income and non-income based tax laws. For the three months ended March 31, 2021 and 2020 the impact of the CARES Act was immaterial to the Company’s tax provision. However, under the CARES Act, the Company is deferring the employer portion of payroll tax payments through December 31, 2022. Future regulatory guidance under the CARES Act or additional legislation enacted by Congress in connection with the COVID-19 pandemic could impact our tax provision in future periods. Payables Related to the Tax Receivable Agreement

Concentrations

Concentrations3 Months Ended
Mar. 31, 2021
Concentrations
Concentrations7. Concentrations For the three months ended March 31, 2021, two customers accounted for 26% of the Company’s revenues. For the three months ended March 31, 2020, one customer accounted for 10% of the Company’s revenues. As of March 31, 2021, two customers accounted for 24% of the Company’s accounts receivable. As of December 31, 2020, four customers accounted for 42% of the Company’s accounts receivable. For the three months ended March 31, 2021, one supplier accounted for 12% of the Company’s total purchases. For the three months ended March 31, 2020, one supplier accounted for 36% of the Company’s total purchases. As of March 31, 2021, no supplier accounted for 10% of the Company’s accounts payable. As of December 31, 2020, two suppliers accounted for 23% of the Company’s accounts payable.

Commitments and Contingencies

Commitments and Contingencies3 Months Ended
Mar. 31, 2021
Commitments and Contingencies
Commitments and Contingencies8. Commitments and Contingencies In the normal course of business, the Company is subjected to various claims, legal actions, contract negotiations and disputes. The Company provides for losses, if any, in the year in which they can be reasonably estimated. In management’s opinion, there are currently no such matters outstanding that would have a material effect on the accompanying condensed consolidated financial statements.

Related Party Transactions

Related Party Transactions3 Months Ended
Mar. 31, 2021
Related Party Transactions
Related Party Transactions9. Related Party Transactions The Company recognizes certain costs incurred in relation to transactions primarily incurred in connection with the amended and restated administrative services agreement, dated May 17, 2017, between Solaris LLC and Solaris Energy Management, LLC, a company partially owned by William A. Zartler, the Chief Executive Officer and Chairman of the Board. These services include rent paid for office space, travel services, personnel, consulting and administrative costs. For the three months ended March 31, 2021 and 2020, Solaris LLC paid $0.2 and $0.2, respectively, for these services. As of March 31, 2021, and December 31, 2020, the Company included $0.1 and $0.1, respectively, in prepaid expenses and other current assets on the condensed consolidated balance sheets. Additionally, as of March 31, 2021 and December 31, 2020, the Company included $0.1 and $0.1, respectively, of accruals to related parties in accrued liabilities on the consolidated balance sheet The Company has executed a guarantee of lease agreement with Solaris Energy Management, LLC, a related party of the Company, related to the rental of office space for the Company’s corporate headquarters. The total future guaranty under the guarantee of lease agreement with Solaris Energy Management, LLC is $4.7 as of March 31, 2021.

Summary of Significant Accoun_2

Summary of Significant Accounting Policies (Policies)3 Months Ended
Mar. 31, 2021
Summary of Significant Accounting Policies
Basis of Presentation and ConsolidationBasis of Presentation and Consolidation Solaris Oilfield Infrastructure, Inc. (either individually or together with its subsidiaries, as the context requires “Solaris Inc.” or the “Company”) is the managing member of Solaris Oilfield Infrastructure, LLC (“Solaris LLC”) and is responsible for all operational, management and administrative decisions relating to Solaris LLC’s business. Solaris Inc. consolidates the financial results of Solaris LLC and its subsidiaries and reports non-controlling interest related to the portion of the units in Solaris LLC (the “Solaris LLC Units”) not owned by Solaris Inc., which will reduce net income attributable to the holders of Solaris Inc.’s Class A common stock. The accompanying interim unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). These financial statements reflect all normal recurring adjustments that are necessary for fair presentation. Operating results for the three months ended March 31, 2021 and 2020 are not necessarily indicative of the results that may be expected for the full year or for any interim period. The unaudited interim condensed consolidated financial statements do not include all information or notes required by GAAP for annual financial statements and should be read together with Solaris Inc.’s Annual Report on Form 10-K for the year ended December 31, 2020 and notes thereto. All material intercompany transactions and balances have been eliminated upon consolidation. COVID-19 and Global Economic and Market Conditions The novel strain of coronavirus ("COVID-19") has caused, and continues to cause, severe disruptions to the U.S. and global economies, including the oil and gas industry and the demand for our products and services. The degree to which COVID-19 and related events outside of our control adversely impacts our results will depend on future developments, which are highly uncertain and cannot be predicted, including the timing, extent, trajectory and duration of the COVID-19 pandemic, the development, availability and administration of effective treatments and vaccines and the impact of the COVID-19 pandemic on the global economy and any subsequent recovery of normal economic and operating conditions. While we expect these matters discussed above will continue to disrupt our operations in some way, the degree of the adverse financial impact cannot be reasonably estimated at this time.
Use of EstimatesUse of Estimates The preparation of consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The most significant estimates relate to stock-based compensation, useful lives and salvage values of long-lived assets, future cash flows associated with goodwill and long-lived asset impairment, net realizable value of inventory, collectability of accounts receivable and estimates of allowance for credit losses and determination of the present value of lease payments and right-of-use assets.
ReclassificationsReclassifications Certain prior period amounts have been reclassified to conform to the current period presentation.
Recently Issued Accounting StandardsRecently Issued Accounting Standards In March 2020, the Financial Accounting Standards Board issued ASU No. 2020-04, Reference Rate Reform, which provides temporary optional guidance to companies impacted by the transition away from the London Interbank Offered Rate (“LIBOR”). The guidance provides certain expedients and exceptions to applying GAAP in order to lessen the potential accounting burden when contracts, hedging relationships, and other transactions that reference LIBOR as a benchmark rate are modified. This guidance is effective upon issuance and expires on December 31, 2022. The Company is currently assessing the impact of the LIBOR transition and this ASU on the Company’s financial statements.

Property, Plant and Equipment (

Property, Plant and Equipment (Tables)3 Months Ended
Mar. 31, 2021
Property, Plant and Equipment
Schedule of property plant and equipment​ ​ ​ ​ ​ ​ ​ ​ ​ March 31, December 31, ​ 2021 2020 Systems and related equipment ​ $ 302.7 ​ $ 299.4 Systems in process ​ ​ 12.0 ​ 12.6 Computer hardware and software ​ 1.0 ​ 1.0 Machinery and equipment ​ 5.3 ​ 5.3 Vehicles ​ 4.2 ​ 3.6 Buildings ​ 4.3 ​ 4.3 Land ​ 0.6 ​ 0.6 Furniture and fixtures ​ ​ 0.4 ​ 0.4 Property, plant and equipment, gross ​ $ 330.5 ​ $ 327.2 Less: accumulated depreciation ​ (88.1) ​ (81.3) Property, plant and equipment, net ​ $ 242.4 ​ $ 245.9

Equity (Tables)

Equity (Tables)3 Months Ended
Mar. 31, 2021
Equity
Summary of activity related to restricted stock​ ​ ​ ​ ​ ​ ​ ​ Restricted Stock Awards ​ ​ 2021 ​ 2020 Unvested at January 1, 703,115 ​ 627,251 Awarded 414,185 ​ 386,146 Vested (223,275) ​ (141,700) Forfeited (5,388) ​ (32,845) Unvested at March 31, ​ 888,637 ​ 838,852
Schedule of earnings per share calculation​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, Basic net income per share: ​ 2021 ​ 2020 ​ ​ ​ ​ ​ ​ ​ Numerator ​ ​ ​ ​ ​ ​ Net loss attributable to Solaris ​ $ (1.2) ​ $ (19.1) Loss attributable to participating securities (1) ​ ​ (0.1) ​ ​ (0.1) Net loss attributable to common stockholders ​ $ (1.3) ​ $ (19.2) ​ ​ ​ ​ ​ ​ ​ Denominator ​ ​ ​ ​ ​ ​ Weighted average number of unrestricted outstanding common shares used to calculate basic net income per share ​ ​ 29,957 ​ ​ 29,312 Diluted weighted-average shares of Class A common stock outstanding used to calculate diluted net income per share ​ ​ 29,957 ​ ​ 29,312 ​ ​ ​ ​ ​ ​ ​ Earnings per share of Class A common stock - basic ​ $ (0.04) ​ $ (0.65) Earnings per share of Class A common stock - diluted ​ $ (0.04) ​ $ (0.65) ​ (1) The Company’s restricted shares of common stock are participating securities.
Schedule of antidilutive shares​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended March 31, ​ ​ 2021 ​ 2020 Class B common stock ​ ​ 14,729 ​ ​ 15,922 Restricted stock awards ​ ​ 113 ​ ​ 27 Stock Options ​ ​ 10 ​ ​ 17 Total ​ ​ 14,852 ​ ​ 15,966

Property, Plant and Equipment_2

Property, Plant and Equipment (Details) - USD ($) $ in ThousandsMar. 31, 2021Dec. 31, 2020
Property, Plant and Equipment
Property, plant and equipment, gross $ 330,500 $ 327,200
Less: accumulated depreciation(88,100)(81,300)
Property, plant and equipment, net242,413 245,884
Systems and related equipment
Property, Plant and Equipment
Property, plant and equipment, gross302,700 299,400
Systems in process
Property, Plant and Equipment
Property, plant and equipment, gross12,000 12,600
Computer hardware and software
Property, Plant and Equipment
Property, plant and equipment, gross1,000 1,000
Machinery and equipment
Property, Plant and Equipment
Property, plant and equipment, gross5,300 5,300
Vehicles
Property, Plant and Equipment
Property, plant and equipment, gross4,200 3,600
Buildings
Property, Plant and Equipment
Property, plant and equipment, gross4,300 4,300
Land
Property, Plant and Equipment
Property, plant and equipment, gross600 600
Furniture and fixtures
Property, Plant and Equipment
Property, plant and equipment, gross $ 400 $ 400

Debt (Details)

Debt (Details) - 2019 Credit Agreement $ in Thousands3 Months Ended
Mar. 31, 2021USD ($)Apr. 26, 2019USD ($)
Debt
Maximum borrowing $ 50,000
Potential additional borrowing available25,000
Maximum borrowing capacity with accordion option $ 75,000
Leverage ratio for threshold1
Cash threshold triggering repayment $ 20,000
Outstanding credit facility $ 0
Remaining borrowing capacity $ 35,000
Minimum
Debt
Commitment fee (as a percent)0.25%
Maximum
Debt
Commitment fee (as a percent)0.375%
Eurodollar | Minimum
Debt
Applicable margin rate1.75%
Eurodollar | Maximum
Debt
Applicable margin rate2.50%
Alternate base rate | Minimum
Debt
Applicable margin rate0.75%
Alternate base rate | Maximum
Debt
Applicable margin rate1.50%

Equity - Dividends (Details)

Equity - Dividends (Details) - USD ($) $ in Thousands3 Months Ended
Mar. 31, 2021Mar. 31, 2020
Equity
Distributions paid to unit holders $ 4,797 $ 4,755
Distribution received3,300 3,100
Solaris LLC
Equity
Distributions paid to unit holders $ 4,800 $ 4,800

Equity - SBC (Details)

Equity - SBC (Details)Mar. 31, 2021shares
Stock-based compensation
Available for grant (in shares)2,542,120
Class A Common Stock
Stock-based compensation
Reserved for issuance (in shares)5,118,080

Equity - Restricted stock (Deta

Equity - Restricted stock (Details) - Restricted stock - USD ($) $ in Millions3 Months Ended
Mar. 31, 2021Mar. 31, 2020
Number of Shares
Unvested, beginning (in shares)703,115 627,251
Awarded (in shares)414,185 386,146
Vested (in shares)(223,275)(141,700)
Forfeited (in shares)(5,388)(32,845)
Unvested, end (in shares)888,637 838,852
Other non-option information
Unrecognized compensation costs $ 9.3
Expected period for recognizing compensation expense1 year 6 months
First vesting period
Number of Shares
Unvested, end (in shares)185,855
Second vesting period
Number of Shares
Unvested, end (in shares)330,887
Third vesting period
Number of Shares
Unvested, end (in shares)237,793
Fourth vesting period
Number of Shares
Unvested, end (in shares)134,102

Equity - EPS (Details)

Equity - EPS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands3 Months Ended
Mar. 31, 2021Mar. 31, 2020
Numerator
Net loss attributable to Solaris $ (1,169) $ (19,081)
Loss attributable to participating securities(100)(100)
Net loss attributable to common stockholders $ (1,300) $ (19,200)
Class A Common Stock
Denominator
Weighted average number of unrestricted outstanding common shares used to calculate basic net income per share (in shares)29,957 29,312
Diluted weighted-average shares of Class A common stock outstanding used to calculate diluted net income per share (in shares)29,957 29,312
Earnings per share of Class A common stock - basic (in dollars per share) $ (0.04) $ (0.65)
Earnings per share of Class A common stock - diluted (in dollars per share) $ (0.04) $ (0.65)

Equity - Antidilutive (Details)

Equity - Antidilutive (Details) - shares3 Months Ended
Mar. 31, 2021Mar. 31, 2020
Potentially dilutive shares
Excluded from EPS calculation (in shares)14,852 15,966
Class B Common Stock
Potentially dilutive shares
Excluded from EPS calculation (in shares)14,729 15,922
Restricted stock
Potentially dilutive shares
Excluded from EPS calculation (in shares)113 27
Stock options
Potentially dilutive shares
Excluded from EPS calculation (in shares)10 17

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in ThousandsMay 17, 2017Mar. 31, 2021Mar. 31, 2020Dec. 31, 2020
Tax (benefits) and expenses $ (213) $ (6,078)
Effective tax rate10.00%15.50%
Current portion of payables related to Tax Receivable Agreement $ 606 $ 606
Tax Receivable Agreement
Payments of net cash saving (as a percent)85.00%
Benefit of remaining cash savings (as a percent)15.00%
Payables related to Tax Receivable Agreement73,500 68,700
Current portion of payables related to Tax Receivable Agreement $ 600 $ 600

Concentrations (Details)

Concentrations (Details)3 Months Ended12 Months Ended
Mar. 31, 2021customeritemMar. 31, 2020customeritemDec. 31, 2020itemcustomer
Customer | Revenue
Concentrations
Number of customers | customer2 1
Concentration risk (as a percent)26.00%10.00%
Customer | Accounts receivable
Concentrations
Number of customers | customer2 4
Concentration risk (as a percent)24.00%42.00%
Supplier | Purchases
Concentrations
Number of suppliers | item1 1
Concentration risk (as a percent)12.00%36.00%
Supplier | Accounts payables
Concentrations
Number of suppliers | item2
Concentration risk (as a percent)23.00%

Related Party Transactions (Det

Related Party Transactions (Details) - USD ($) $ in Millions3 Months Ended
Mar. 31, 2021Mar. 31, 2020Dec. 31, 2020
Related Party Transactions
Due from related party $ 0.1 $ 0.1
Due to related party0.1 $ 0.1
William A. Zartler
Related Party Transactions
Payment made to related party0.2 $ 0.2
Solaris Energy Management, LLC
Related Party Transactions
Other commitments $ 4.7