Atlas Energy Solutions Announces Fourth Quarter and Year End 2024 Results; Completes Previously Announced Acquisition of Moser Energy Systems

Atlas Energy Solutions Inc. (NYSE:AESI) ("Atlas" or the "Company") today reported financial and operating results for the fourth quarter and fiscal year ended December 31, 2024.

Year End 2024 Financial Highlights and Operational Updates

• Total sales of $1.1 billion
• Net income of $59.9 million (6% Net Income Margin)
• Adjusted EBITDA of $288.9 million (27% Adjusted EBITDA Margin) ⁽¹⁾
• Net cash provided by operating activities of $256.5 million
• Adjusted Free Cash Flow of $251.3 million (24% Adjusted Free Cash Flow Margin) ⁽¹⁾
• Increased quarterly dividend to $0.25 per share, payable February 28, 2025
• Completed previously announced acquisition of Moser Energy Systems

John Turner, President & Chief Executive Officer, commented, "The acquisition of Moser Energy Systems is a platform investment that provides Atlas with exposure to the production-end of the oil and gas value chain, along with new distributed power end-markets. The acquisition strengthens Atlas's market position as a leading provider of energy solutions and we expect the acquisition to help mitigate the volatility of future cash flows. This acquisition, coupled with our January equity offering, provides the company with a compelling runway for future growth. We expect 2025 to be a year of operational excellence as we continue to ramp up Dune Express operations, execute upon our leading last-mile and logistics platform, and look to enhance our new distributed power solutions offerings."

Year End 2024 Financial Results

Total sales for the year ended December 31, 2024 increased $442.0 million, or 72.0% when compared to the year ended December 31, 2023, to $1.1 billion. Product sales increased $47.3 million, or 10.1% when compared to the prior year, to $515.4 million. Service sales increased by $394.7 million, or 270.7% when compared to the prior year, to $540.5 million.

Cost of sales (excluding depreciation, depletion and accretion expense) ("cost of sales") for the year ended December 31, 2024 increased by $464.8 million, or 178.5% when compared to the prior year, to $725.2 million. The increase in our cost of sales was primarily driven by an increase in product and service sales associated with the addition of the Hi-Crush operations acquired in March 2024, higher costs incurred in the second and third quarters of 2024 due to fire-related temporary loadout operations at one of our Kermit facilities, our operational improvement initiatives, and delays in dredge commissioning.

Selling, general and administrative expenses ("SG&A") for the year ended December 31, 2024 increased by $57.6 million, or 118.5% when compared to the prior year, to $106.2 million. Included within our SG&A is $22.4 million in stock-based compensation and $19.2 million in other acquisition related costs.

Net income for the year ended December 31, 2024 was $59.9 million, and Adjusted EBITDA for the year ended December 31, 2024 was $288.9 million.

Fourth Quarter 2024 Financial Results

Fourth quarter 2024 total sales decreased $33.1 million, or 10.9% sequentially, to $271.3 million. Product sales decreased $16.9 million, or 11.6%, sequentially, to $128.4 million. Fourth quarter sales volumes decreased to 5.1 million tons or by 15%, coupled with lower average pricing recognized during the period. Service sales decreased by $16.2 million, or 10.2%, sequentially, to $142.9 million.

Fourth quarter 2024 cost of sales decreased by $34.3 million, or 15.2%, sequentially, to $191.0 million, which consists of product costs of sales, inclusive of royalties, of $66.7 million and services cost of sales of $124.3 million. SG&A for the fourth quarter of 2024 increased $0.05 million, or 0.2%, sequentially, to $25.5 million. Net Income for the fourth quarter of 2024 was $14.4 million, representing an increase of $10.5 million, or 269.2%, sequentially. Adjusted EBITDA for the fourth quarter of 2024 was $63.2 million, representing a decrease of $7.9 million, or 11.1%, sequentially.

Liquidity, Capital Expenditures and Other

As of December 31, 2024, the Company's total liquidity was $206.5 million, which was comprised of $71.7 million in cash and cash equivalents, $54.8 million of availability under the Company's ABL Facility, and $80.0 million of availability under the Company's Delayed Draw Term Loan Facility. The Company had $70.0 million of borrowings outstanding under the ABL Facility and $0.2 million of outstanding undrawn letters of credit.

Net cash used in investing activities was $512.7 million for the year ended December 31, 2024, driven largely by costs associated with the construction of the Dune Express, the acquisition of Hi-Crush, and additional OnCore deployments.

As of December 31, 2024, the Company had 110,217,322 shares of its commons stock, par value $0.01 per share ("common stock"), outstanding.

Subsequent Events

Acquisition of Moser Energy Systems

On February 24, 2025, Atlas acquired Moser Acquisition, Inc. and its wholly-owned subsidiary Moser Engine Service, Inc. (d/b/a Moser Energy Systems) ("Moser"), a leading provider of distributed power solutions, in a transaction valued at $220.0 million (the "Moser Acquisition"). The transaction consideration included $180.0 million of cash and approximately 1.7 million shares (the "Stock Consideration") of common stock, valued at $40.0 million based on the 20-day trailing volume-weighted average price ending at the close of trading on Friday, January 24, 2025. The Stock Consideration is subject to revision for customary post-closing adjustments. For 90 days following the closing, all or any portion of the Stock Consideration is subject to redemption at the option of Atlas, with any such redemption to be paid in cash. For more information regarding the transaction, please refer to the Company's website at https://ir.atlas.energy/ for the acquisition press release and related presentation.

Underwritten Public Offering of Common Stock

On February 3, 2025, the Company completed an underwritten public offering (the "Offering") of an aggregate of 11,500,000 shares of its common stock at a public offering price of $23.00 per share, for total gross proceeds of $264.5 million and net proceeds of approximately $254.1 million, after deducting underwriting discounts and commissions. The Company granted the underwriters a 30-day option to purchase up to 1,725,000 additional shares of its common stock.

The Company used $171.3 million of the net proceeds it received from the Offering to repay indebtedness, including a portion of its secured PIK toggle seller note and outstanding borrowings under its ABL facility. The remainder of the net proceeds may be used to fund the redemption of the Stock Consideration, if exercised by the Company, subject to market conditions, and for general corporate purposes, including power-related growth capital expenditures following completion of the Moser Acquisition.

2025 Term Loan Credit Facility

On February 21, 2025, the Company entered into a credit agreement (the "2025 Term Loan Credit Agreement") with Stonebriar Commercial Finance LLC ("Stonebriar"), as administrative agent and initial lender, pursuant to which Stonebriar extended Atlas LLC a term loan credit facility comprised of a $540.0 million single advance term loan that was made on February 21, 2025 (the "2025 Term Loan Credit Facility"). The Company used the proceeds from the 2025 Term Loan Credit Facility (i) to refinance the existing 2023 Term Loan Credit Facility and the ADDT Loan, (ii) to finance the cash consideration for the Moser Acquisition, and (iii) for general corporate purposes.

Quarterly Cash Dividend

On February 11, 2025, the Board of Directors (the "Board") declared a dividend to common stockholders of $0.25 per share, or approximately $30.4 million in the aggregate to shareholders. The dividend will be payable on February 28, 2025 to shareholders of record at the close of business on February 21, 2025.

Conference Call Information

The Company will host a conference call to discuss financial and operational results on Tuesday, February 25, 2025 at 9:00am Central Time (10:00am Eastern Time). Individuals wishing to participate in the conference call should dial (877) 407-4133. A live webcast will be available at https://ir.atlas.energy/. Please access the webcast or dial in for the call at least 10 minutes ahead of the start time to ensure a proper connection. An archived version of the conference call will be available on the Company's website shortly after the conclusion of the call.

The Company will also post an updated investor presentation titled "Investor Presentation February 2025", in addition to a "Year-End 2024 Capital Projects Update" video, at https://ir.atlas.energy/ in the "Presentations" section under "News & Events" tab on the Company's Investor Relations webpage prior to the conference call.

About Atlas Energy Solutions

Atlas Energy Solutions Inc. (NYSE:AESI) is a leading solutions provider to the energy industry. Atlas' portfolio of offerings includes oilfield logistics, distributed power systems, and the largest proppant supply network in the Permian Basin. With a focus on leveraging technology, automation, and remote operations to enhance efficiencies, Atlas is centered around a core mission of improving human beings' access to hydrocarbons that power our lives and, by doing so, maximizing value creation for our shareholders.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Statements that are predictive or prospective in nature, that depend upon or refer to future events or conditions or that include the words "may," "assume," "forecast," "position," "strategy," "potential," "continue," "could," "will," "plan," "project," "budget," "predict," "pursue," "target," "seek," "objective," "believe," "expect," "anticipate," "intend," "estimate" and other expressions that are predictions of or indicate future events and trends and that do not relate to historical matters identify forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements regarding the anticipated financial performance of Atlas following the Moser Acquisition; expected accretion to Adjusted EBITDA; expectations regarding the leverage and dividend profile of Atlas following the Moser Acquisition; the expected synergies and efficiencies to be achieved as a result of the Moser Acquisition; expansion and growth of Atlas's business; future investments in our new distributed power platform; our business strategy, industry, future operations and profitability; expected capital expenditures and the impact of such expenditures on our performance; statements about our financial position, production, revenues and losses; our capital programs; management changes; current and potential future long-term contracts; and our future business and financial performance. Although forward-looking statements reflect our good faith beliefs at the time they are made, we caution you that these forward-looking statements are subject to a number of risks and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks include but are not limited to: uncertainties as to whether the transaction will achieve its anticipated benefits and projected synergies within the expected time period or at all; Atlas's ability to integrate Moser's operations in a successful manner and in the expected time period; risks that the anticipated tax treatment of the Moser Acquisition is not obtained; unforeseen or unknown liabilities; potential litigation relating to the Moser Acquisition; unexpected future capital expenditures; the effect of the completion of the Moser Acquisition on the parties' business relationships and businesses generally; potential difficulties in retaining employees as a result of the Moser Acquisition; risks related to future investments in our new distributed power platform; potential negative effects of the completion of the Moser Acquisition on the market price of Atlas's common stock or operating results; our ability to successfully execute our stock repurchase program or implement future stock repurchase programs; commodity price volatility, including volatility stemming from the ongoing armed conflicts between Russia and Ukraine and Israel and Hamas; increasing hostilities and instability in the Middle East; adverse developments affecting the financial services industry; our ability to complete growth projects on time and on budget; the risk that stockholder litigation in connection with our recent corporate reorganization may result in significant costs of defense, indemnification and liability; changes in general economic, business and political conditions, including changes in the financial markets; transaction costs; actions of OPEC+ to set and maintain oil production levels; the level of production of crude oil, natural gas and other hydrocarbons and the resultant market prices of crude oil; inflation; environmental risks; operating risks; regulatory changes; lack of demand; market share growth; the uncertainty inherent in projecting future rates of reserves; production; cash flow; access to capital; the timing of development expenditures; the ability of our customers to meet their obligations to us; our ability to maintain effective internal controls; and other factors discussed or referenced in our filings made from time to time with the U.S. Securities and Exchange Commission ("SEC"), including those discussed under the heading "Risk Factors" in Annual Report on Form 10-K, filed with the SEC on February 27, 2024, and any subsequently filed Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update or revise any 3 forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

Non-GAAP Financial Measures

Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Free Cash Flow, Adjusted Free Cash Flow Margin, Adjusted Free Cash Flow Conversion and Maintenance Capital Expenditures are non-GAAP supplemental financial measures used by our management and by external users of our financial statements such as investors, research analysts and others, in the case of Adjusted EBITDA, to assess our operating performance on a consistent basis across periods by removing the effects of development activities, provide views on capital resources available to organically fund growth projects and, in the case of Adjusted Free Cash Flow, assess the financial performance of our assets and their ability to sustain dividends or reinvest to organically fund growth projects over the long term without regard to financing methods, capital structure, or historical cost basis.

These measures do not represent and should not be considered alternatives to, or more meaningful than, net income, income from operations, net cash provided by operating activities or any other measure of financial performance presented in accordance with GAAP as measures of our financial performance. Adjusted EBITDA and Adjusted Free Cash Flow have important limitations as analytical tools because they exclude some but not all items that affect net income, the most directly comparable GAAP financial measure. Our computation of Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Free Cash Flow, Adjusted Free Cash Flow Margin, Adjusted Free Cash Flow Conversion and Maintenance Capital Expenditures may differ from computations of similarly titled measures of other companies.

Non-GAAP Measure Definitions:

• We define Adjusted EBITDA 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 management to more effectively evaluate the Company's operating performance and compare the results of its operations from period to period and against our peers without regard to financing method 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.
• We define Adjusted EBITDA Margin as Adjusted EBITDA divided by total sales.
• We define Adjusted Free Cash Flow as Adjusted EBITDA less Maintenance Capital Expenditures. Management believes that Adjusted Free Cash Flow is useful to investors as it provides a measure of the ability of our business to generate cash.
• We define Adjusted Free Cash Flow Margin as Adjusted Free Cash Flow divided by total sales.
• We define Adjusted Free Cash Flow Conversion as Adjusted Free Cash Flow divided by Adjusted EBITDA.
• We define Maintenance Capital Expenditures as capital expenditures excluding growth capital expenditures and reconstruction of previously incurred growth capital expenditures.

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Investor Contact

Kyle Turlington

5918 W Courtyard Drive, Suite #500

Austin, Texas 78730

United States

T: 512-220-1200

[email protected]