Q4 2024 Atlas Energy Solutions Inc Earnings Call
Speaker Change: [music].
Greetings and welcome to Atlas Energy solutions fourth quarter, and yearend 2024 financial and operational results conference call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation.
Unknown Executive: Greetings and welcome to Atlas Energy Solutions' fourth quarter and year-end 2024 Financial and Operational Results conference call. At this time, all participants are on a listen-only mode.
Unknown Executive: A question and answer session will follow the formal presentation. If anyone requires operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded.
If anyone requires operator assistance during the conference. Please press star zero on your telephone keypad.
Speaker Change: This conference is being recorded it is now my pleasure to introduce your host Kyle Turlington, Vice President Investor Relations. Thank you you may begin Hello, and welcome to the Atlas Energy Solutions Conference call and webcast for the fourth quarter of 2024 with US today are Bud at Brigham Executive Chair, John Turner, President and CEO.
Kyle Turlington: It is now my pleasure to introduce your host, Kyle Turlington, Vice President, Investor Relations. Thank you. You may begin.
John Turner: Hello, and welcome to the Atlas Energy Solutions conference call and webcast for the fourth quarter of 2024.
Kyle Turlington: With us today are Bud Brigham, Executive Chair, John Turner, President and CEO, Blake McCarthy, CFO, and Chris Scholla, COO. Bud, John, Blake, and Chris will be sharing their comments on the company's operational and financial performance for the fourth quarter of 2024, after which we will open the call for Q&A.
Blake Mccarthy, CFO and Chris sure C O L, but John Blake and Chris will be sharing their comments on the company's operational and financial performance for the fourth quarter of 2024, after which we will open the call for Q&A.
Unknown Executive: Before we begin our prepared remarks, I would like to remind everyone that this call will include forward-looking statements as defined under the U.S. securities laws. Such statements are based on the current information and management's expectations as of this statement and are not guaranteed a future performance. Forward-looking statements involve certain risks. Uncertainties and assumptions that are difficult to predict. As such, our actual outcomes and results could differ materially. You can learn more about these risks in the annual report on Form 10-K we filed with the SEC on February 27, 2024, our quarterly reports on Form 10-Q, and current reports on Form 8-K and other SEC filings.
Speaker Change: Before we begin our prepared remarks, I would like to remind everyone that this call will include forward looking statements as defined under the U S Securities laws such statements are based on the current information and management's expectations as of this statement and are not guarantees of future performance forward looking statements involve certain risks.
Speaker Change: Uncertainties and assumptions that are difficult to predict as such our actual outcomes and results could differ materially you can learn more about these risks in the annual report on Form 10-K, we filed with the SEC on February 27, 2024, our quarterly reports on Form 10-Q.
Speaker Change: Current reports on form 8-K, and other SEC filings you should not place undue reliance on forward looking statements and we undertake no obligation to update. These forward looking statements. We will also make reference to certain non-GAAP financial measures such as adjusted EBITDA adjusted free cash flow and other operating metrics and statistics.
Unknown Executive: You should not place undue reliance on forward-looking statements, and we undertake no obligation to update these forward-looking statements.
Unknown Executive: We will also make reference to certain non-GAAP financial measures, such as adjusted EBITDA, adjusted free cash flow, and other operating metrics and statistics. You will find the GAAP reconciliation comments and calculations in yesterday's press release.
Speaker Change: You'll find the GAAP reconciliation comments and calculations in yesterday's press release with that said I will turn the call over to John Turner.
John Turner: With that said, I will turn the call over to John Turner. Thank you, Kyle. And thanks to everyone for joining us today to discuss our full year and fourth quarter 2024 operational and financial results.
John Turner: Thank you Kyle and thanks to everyone for joining us today to discuss our full year and fourth quarter 2020 for operational and financial results.
John Turner: 2025 is set to be a transformational year for Atlas, and we have come out of the box at a full sprint. On January 12th, we announced our first commercial delivery off the Dune Express. Our team is now focused on ramping our volumes, working towards our goal of full effective utilization by mid-year, if not sooner. Additionally, on January 24th, we announced that we had delivered 100 loads of profit utilizing our first two robo-trucks, which are semi-trucks equipped with a self-driving system enabled through our partnership with Kodiak Robotics. By the end of this month, we expect the number to have grown to approximately 300.
John Turner: 2025% to be a transformational year for Atlas and we have come out of the blocks at a full sprint on January 12, we announced our first commercial delivery after didn't express.
John Turner: Our team is now focused on ramping our volumes working towards our goal of full effective utilization by mid year, if not sooner.
John Turner: Additionally on January 24th we announced that we have delivered 100 loads of profit utilizing our first two robot trucks, which are semi trucks equipped with a self driving system enabled through our partnership with Kodiak robotics.
John Turner: By the end of this month, we expect that number to have grown to approximately 300 loads.
John Turner: I wanted to take a minute to look back to atlas's IPO in March of 2023 and demonstrate how much has changed since that time.
John Turner: I want to take a minute to look back to Atlas's IPO in March of 2023 and demonstrate how much has changed since that time. At the time of our IPO, the Dune Express was just a 42-mile right-of-way. Today, we are making commercial deliveries off the second-longest conveyor ever built. We encountered quite a few eye rolls when we said we were going to bring autonomous driving technology to the oil fields of West Texas and New Mexico. Today, Atlas is now running the world's first commercial driverless delivery operation and will soon be doing autonomous deliveries off the Dune Express.
John Turner: At the time of our IPO that don't express with just a 42 mile right of way today, we're making commercial deliveries off the second longest conveyer ever built.
John Turner: We encountered quite a few I roles. When we said we were going to bring autonomous driving technology to the oilfields in West, Texas, and New Mexico. Today Atlas is now running the world's first commercial driverless delivery operation and will soon be doing autonomous deliveries off the didn't express.
John Turner: The concept of multi trailer operation that was viewed as a novelty.
John Turner: The concept of multi-trailer operation was viewed as a novel. Today we are doing multi-trailer deliveries off the Dune Express, delivering 70 to 100 tons per driver versus over-the-road deliveries of approximately 24 tons. Back in March of 2023, Atlas's annual productive capacity stood at around 11 million tons with no wet sand offering, and we were running only 11 last mile crews that delivered just 20% of our total sales volume. Today, our productive capacity is nearly two and a half times larger with the largest wet sand offering in the Permian, and our logistics operation is currently running 26 crews delivering more than 80% of our total sales volume.
John Turner: Today, we're doing multi trailer deliveries after doing express delivering 70 to 100 tons per driver versus over the road deliveries of approximately 24 times.
John Turner: Back in March of 2023 Atlas is annual productive capacity stood at around 11 million tonnes with no wet sand offering and we were running only 11 last mile crews that deliver just 20% of our total sales volumes today, our productive capacity is nearly two five times larger with the largest wet sand offering in the Permian.
John Turner: Our logistics operation is currently running 26 crews delivering more than 80% of our total sales volumes.
John Turner: Center IPO. We have also completed two transformational acquisitions that have expanded our solutions offering while enhancing our cash flow generation. Finally, at the time of the IPO, we kept reinforcing that shareholder returns, and critically, return of capital to shareholders, were core to Atlas' corporate DNA. On February 19th, we announced a 4% increase to our quarterly dividend from $0.24 a share to $0.25 a share, which represents a 67% increase from our initial dividend of $0.15 a share. We talked a big game during our IPO, and while we have certainly had some bumps in the road, we have delivered on those promises.
John Turner: Our IPO.
John Turner: We have also completed two transformational acquisitions that have expanded our solutions offering while enhancing our cash flow generation.
John Turner: Finally at the time of the IPO, we can't bring unfortunately that shareholder returns and critically return of capital to shareholders or core to atlas's corporate DNA.
John Turner: February 19th we announced a 4% increase to our quarterly dividend from 24 cents a share to $25 a share which represents a 67% increase from our initial dividend of <unk> 15 cents a share.
John Turner: We talked a big game during our IPO and while we have certainly had some bumps in the road.
John Turner: We have delivered on those promises I could not be prouder of what our team has accomplished and the milestones we have achieved but this is the only the beginning for Atlas.
John Turner: I could not be prouder of what our team has accomplished and the milestones we have achieved, but this is only the beginning for Atlas.
John Turner: Yesterday, we closed on the acquisition of merger energy systems, our platform investment into the distributed power market.
John Turner: Yesterday, we closed on the acquisition of Mojo Energy Systems, our platform investment into the distributed power market. With its large fleet of natural gas-powered reciprocating generators, the Mosier platform provides us with a new avenue of growth into a rapidly expanding market. Moser also provides a greater degree of cash flow durability by adding significant exposure to the more stable production phase of the OFS value chain. As discussed on our call on January 27th, we currently plan to grow Mosier's fleet from its current size of 212 megawatts to approximately 310 megawatts by the end of 2026. Customer reception to the Mojo acquisition has been very positive, to say the least, reinforcing our initial investment thesis.
John Turner: With its large fleet of natural gas powered reciprocating generators. The merger platform provides us with a new avenue of growth into a rapidly expanding market.
John Turner: <unk> also provides a greater degree of cash flow durability, but had a significant exposure to the more stable production phase of the O F adds value chain.
John Turner: As discussed on our call on January 27th we currently plan to grow measures fleet from its current size of 212 megawatts to approximately 310 megawatts by the end of 2026.
John Turner: Customer reception to the merger acquisition has been very positive to say the least reinforcing our initial investment thesis as we worked through the integration process. At this customer interest began to translate into hard contracts, we have ample room to accelerate the growth of this platform.
John Turner: As we work through the integration process, if this customer interest begins to translate into hard contracts, we have ample room to accelerate the growth of this platform.
John Turner: To our new team members joining us from Mosier, welcome aboard, it's going to be a fun ride.
John Turner: Our new team members joining us from merger welcome aboard its going to be a fun ride.
John Turner: Turning back to our profit and logistics business, the premium profit market is beginning to show early signs of the healing we have been looking for. Spot Sand prices fell to cyclical lows during the fourth quarter, driven by reduced customer demand related to seasonal slowdown and competitors throwing out desperation Hail Mary pricing during the RFP. Coming into the RFP season, with the imminent commercial deployment of the Dune Express, we armed our sales force with the objective to go out there and seize the volumes with our best customers. However... We certainly were not willing to contract our volumes at the desperation pricing thrown out there by our more distressed competitors.
John Turner: Turning back to our profit and logistics business. The Permian profit market is beginning to show early signs of the healing we had been looking for.
John Turner: Spot sand prices fell to cyclical lows during the fourth quarter, driven by reduced customer demand related to seasonal slowdown and competitors throwing out desperation, Hello, Mary pricing during the RFP season.
John Turner: Coming into the RFP season, with the eminent commercial deployment of <unk> Express we armed our sales force with the objective to go out there and see if the volumes with our best customers. However, we certainly were not willing to contract our volumes at the desperation pricing thrown out there by our more distressed competitors.
John Turner: Fortunately to key customers, we have been targeting recognized that outsourcing their sand and supply and delivery to distress providers just to save a few bucks per ton is a recipe for disaster.
John Turner: Fortunately, the key customers we have been targeting recognize that outsourcing their sand and supply and delivery to distressed providers just to save a few bucks per ton is a recipe for disaster. Instead, we are seeing customers choose to commit 100% of their 2025 sand volumes to Atlas, their partner of choice in profit and supply and logistics. They correctly identified that they can rely on Atlas to eliminate the operational headache that sand can represent in the oil field, and when things do go wrong, we will break our backs making things right, which is why we enter the year in a highly contracted position that we expect to grow over the coming weeks.
John Turner: Instead, we are seeing customers choose to commit 100% of their 2025 sand volumes to Atlas, they're a partner of choice in profit supply and logistics.
John Turner: They correctly identified that they can rely on atlas to eliminate the operational headaches that sand can represent in the oilfield and when things do go wrong, we will break our backs, making things right, which is why we entered the year in a highly contracted position that we expect to grow over the coming weeks.
John Turner: Since the turn of the year and with the Great hope of large RFP volume with a distant memory for many of our competitors, we have seen much more rational behavior on the pricing front. The combination of the seasonal recovery in completion activity in recent production issues across the industry due to extremely cold weather led to a spike in spot prices over the last few weeks.
John Turner: Since the turn of the year, and with the great hope of large RFP volume wins on distant memory for many of our competitors, we have seen much more rational behavior on the pricing front. The combination of the seasonal recovery and completion activity and recent production issues across the industry due to extremely cold weather led to a spike in spot prices over the last few weeks. While spot prices have since moderated, we don't expect them to return to lows of the fourth quarter anytime soon. Additionally, as some of the more disadvantaged mines continue to struggle with underutilization, we are actively watching for supply attrition in the market.
John Turner: While spot prices have since moderated.
John Turner: We don't expect them to return to lows of the fourth quarter anytime soon.
Speaker Change: Additionally, as some of the more disadvantaged mines continue to struggle with Underutilization, we're actively watching for supply attrition in the market. Consequently, we're reasonably bullish about a gradual return to normalcy in sand pricing. Although at this point, we don't expect that until late in the year with that I will now turn the call over to Chris Shaw.
John Turner: Consequently, we are reasonably bullish about a gradual return to normalcy in sand pricing, although at this point, we don't expect that until late in the year.
Chris Scholla: With that, I will now turn the call over to Chris Scholla to provide more detail around the commission at Dune Express and our exciting leap into driverless delivery. Thanks, John. We continue to make significant progress in the operational ramp-up of the Dune Express. The commissioning process remains on schedule, and while there are still components and processes that require optimization, we are pleased with the steady progress thus far. Infrastructure systems of this size and scale don't simply reach full capacity at the flip of a switch. It takes time and meticulous refinement. That said, over the first two months of operation, we have seen a strong and consistent ramp remain on track to reach our full target capacity sometime in the second quarter.
I'll provide more detail around the commissioning and express and our exciting leap into drivers deliveries.
Chris Shaw: Thanks, John we continue to make significant progress in the operational ramp up of the <unk> Express the commissioning process remains on schedule and while there are still components and processes that require optimization. We are pleased with the steady progress thus far.
Chris Shaw: Infrastructure systems of this size and scale don't simply reach full capacity at the flip of a switch it takes time and meticulous refinement.
Chris Shaw: That said over the first two months of operation, we have seen a strong and consistent ramp remain on track to reach our full target capacity sometime in the second quarter.
Chris Scholla: Another key milestone was achieved in December, when we completed the construction of a two-mile Caliche Road and on-load facility, connecting our legacy High Crush Kermit mines to the Dune Express. This provides incremental flex volumes to the Allowing us to better optimize silo volumes across multiple The Dune Express is a highly sophisticated logistics ecosystem. that requires close synchronization between our mining operations and logistics teams. And we are making rapid strides toward our desired end state.
Chris Shaw: Another key milestone was achieved in December when we completed the construction of a two mile Caliche road and on load facility connecting our legacy Hi, crush Kermit mines to the <unk> Express.
Chris Shaw: This provides incremental flex volumes to the system, allowing us to better optimize silo volumes across multiple distribution points.
Chris Shaw: The <unk> express is a highly sophisticated logistics ecosystem that requires close synchronization between our mining operations and logistics teams and we are making rapid strides towards our desired end state.
Chris Scholla: In addition, we are making meaningful advancements in our autonomous trucking program. By the end of this month, our two Kodiak-enabled autonomous trucks will have completed approximately 300 deliveries in the Delaware Basin. We've already begun transitioning autonomous deliveries off.
Chris Shaw: In addition, we are making meaningful advancements in our autonomous trucking program.
Chris Shaw: By the end of this month or two Kodiak enabled autonomous trucks will have completed approximately 300 deliveries in the Delaware basin and we.
Chris Shaw: <unk> already begun transitioning autonomous deliveries off the <unk> Express.
Chris Shaw: As we further integrate autonomy into our operations, we move closer to our ultimate goal of delivering sand directly to customer well sites without human intervention.
Chris Scholla: As we further integrate autonomy into our operations, we move closer to our ultimate goal of delivering sand directly to customer well sites without human intervention.
Speaker Change: Lastly, I want to take a moment to recognize the incredible team that is making this all possible as John mentioned earlier. This has required long days and even longer nights and I am extremely proud of our Atlas team.
Chris Scholla: Lastly, I want to take a moment to recognize the incredible team that is making this all possible. As John mentioned earlier, this has required long days and even longer nights, and I'm extremely proud of our Atlas. What was once an ambitious vision is now becoming a market changing reality, and this is a testament to the team's hard work and dedication.
Speaker Change: What was once an ambitious vision is now becoming a market changing reality and this is a testament to the team's hard work and dedication.
Blake Mccarthy: With that, I will now turn the call over to our CFO, Blake McCarthy, for a financial Thanks, Chris. Atlas recorded full year 2024 revenue of $1.1 billion. Total Companies Adjusted EBITDA was $288.9 million or 27% of revenue. Statistics revenue for the year was $540.5 million. For the fourth quarter of 2024, we reported total sales of $271.3 million and adjusted EBITDA of $63.2 million for 23.3% of revenue. Revenue from profit sales was 128.4 Total profit sales volumes for the quarter declined sequentially to $5.1 million. The decline was driven primarily by the seasonal slowdown in activity witnessed in the Permian as operators exhausted capital.
Speaker Change: With that I will now turn the call over to our CFO Blake Mccarthy for a financial update.
Speaker Change: Chris Atlas recorded full year 2020 for revenue of $1 1 billion.
Speaker Change: Total company adjusted EBITDA was $288 9 million or 27% of revenue.
Speaker Change: Logistics revenue for the year was $545 million.
Speaker Change: For the fourth quarter of 2024, we reported total sales of $271 3 million and adjusted EBITDA of $63 2 million or 23, 3% of revenue.
Speaker Change: Revenue from proppant sales was $128 4 million.
Speaker Change: Total proppant sales volumes for the quarter declined sequentially to $5 1 million tonnes.
The decline was driven primarily by the seasonal slowdown in activity witnessed in the Permian as operators exhausted capital budgets.
Blake Mccarthy: Despite the slowdown witnessed during the quarter, our Encore Distributed Mining Network set a quarterly volume Our average revenue per ton for the quarter was $25.31. which was bolstered by contractual payments related to required customer sand pickups not made during the holiday slowdown. Adjusted for these payments, average sales price for the fourth quarter was $23.28. The sequential decline in realized pricing relative to those of the third quarter was less than expected due primarily to contracted volumes representing a larger percentage of the overall volume. Moving to service sales, which is revenue generated by our logistics We reported revenue of $142.9 million for the quarter.
Speaker Change: The slowdown witnessed during the quarter, our encore distributed mining network set quarterly volume record.
Speaker Change: Our average revenue per ton for the quarter was $25 31.
Speaker Change: Which was bolstered by contractual payments related to required customer sand pickups not made during the holiday slowdown.
Adjusted for these payments average sales price for the fourth quarter was $23 28 per ton.
Speaker Change: The sequential decline in realized pricing relative to those of the third quarter was less than expected due primarily to contracted volumes, representing a larger percentage of the overall volume mix.
Speaker Change: Moving to service sales, which is revenue generated by our logistics operations, we reported revenue of $142 9 million for the quarter.
Blake Mccarthy: Total cost of sales for Atlas, excluding DD&A, for the quarter were $191 million, consisting of $61 million in plant operating costs, $124.3 million related to service costs, and $1.8 5.7 million For the fourth quarter, our per ton plant operating costs were $12.02. Excluding Royalties, which was down sequentially from the third quarter, but still elevated versus our normalized level. Lower volumes and plant optimization expenses related to our previously announced initiatives in Q3 drove the elevated fourth quarter plant optimization. We expect OPEX per ton cost to further normalize in the first quarter, primarily driven by higher volumes and more efficient operations.
Speaker Change: Total cost of sales for Atlas, excluding DD&A for the quarter were $191 million, consisting of $61 million plant operating costs $124 $3 million related to service costs and $5 7 million in royalties.
Speaker Change: For the fourth quarter, our per ton plant operating costs were $12 <unk> per ton, excluding royalties, which was down sequentially from the third quarter, but still elevated versus our normalized levels.
Speaker Change: Lower volumes and plant optimization expenses related to our previously announced initiatives in Q3 drove the elevated fourth quarter plant operating costs.
Speaker Change: We expect opex per tonne cost to further normalize in the first quarter, primarily driven by higher volumes and more efficient operations.
Speaker Change: Cash SG&A expense for the quarter was $19 1 billion elevated relative to our historical levels by consulting and litigation expenses.
Blake Mccarthy: Cash SG&A expense for the quarter was $19.1 million, elevated relative to our historical levels by consulting and litigation. Interest expense for the quarter was $12.3 million. The depreciation, depletion, and amortization expense for the quarter was $30.4 million. Net income was $14.4 million, or 5.3% of revenue, and earnings per share was $13.5 million. Net cash provided by Operating Activities for the quarter was $70.9 million. Adjusted EBITDA for the period was $63.2 million and adjusted EBITDA margin of 23.3%. Adjusted free cash flow, which we define as adjusted EBITDA, less maintenance capex for the quarter, was $47.9 million, or 17.7% of revenue.
Speaker Change: Interest expense for the quarter was $12 3 million.
Speaker Change: Depreciation depletion and amortization expense for the quarter was $30 4 million.
Speaker Change: Net income was $14 4 million or five 3% of revenue and earnings per share was <unk> 13.
Speaker Change: Net cash provided by operating activities for the quarter was $70 9 million.
Speaker Change: Adjusted EBITDA for the period was $63 2 million and adjusted EBITDA margin of 23, 3%.
Speaker Change: Adjusted free cash flow, which we define as adjusted EBITDA less maintenance capex for the quarter was $47 9 million or 17, 7% of revenue.
Blake Mccarthy: Growcap Extra in the Quarter equated to $50 million, which included construction of the Dune Express, ancillary Dune Express expenditures like the Sand Highway and offloading. and upgrades to our primary. Maintenance CapEx during the quarter was 15.3%.
Speaker Change: Growth capex during the quarter equated to $50 million, which included construction of the <unk> Express ancillary do an express expenditures like the sand highway and offload facilities and upgrades to our primary Kermit plant maintenance.
Speaker Change: Maintenance capex during the quarter was $15 3 million.
John Turner: As John mentioned earlier, we are raising our quarterly dividend to <unk> 25 per share, which represents a 4% increase in equates approximately two to four 8% annualized yield.
Blake Mccarthy: As John mentioned earlier, we are raising our quarterly dividend to $0.25 per share, which represents a 4% increase and equates approximately to a 4.8% annualized yield. Accounting for our latest dividend announcement, we have paid out $252 million in total dividends and distributions since inception. The combination of our recent equity offering, which raised $254.1 million of net proceeds from the sale of shares of our common stock, after deducting underwriting discounts and commissions.
John Turner: Accounting for our latest dividend announcement, we will paid out $252 million in total dividends and distributions since inception.
The combination of our recent equity offering which raised $254 1 million of net proceeds from the sale of shares of our common stock after deducting underwriting discounts and commissions and our recently announced debt refinancing simplifies. Our go forward capital structure collapsing four different loan facilities into a single term loan and reduces our annual debt service costs.
Blake Mccarthy: and our recently announced debt refinancing simplifies our go-forward capital structure. Collapsing four different loan facilities into a single and Reduces Our Annual Debt Service. This should enable increased optionality as we look to optimally optimally redeploy go forward free cash flow through a combination of growth investment and Return of Capital to Share.
John Turner: This should enable increased optionality as we look to optimally optimally redeployed go forward free cash flow through a combination of growth investment opportunities and return of capital to shareholders.
John Turner: As John also touched on in his remarks.
Blake Mccarthy: As John also touched on in his remarks, we expect our plants to be quite busy. Today we have approximately 22 million tons committed in 2025, and expect that number to surpass 25 million tons in relatively short order. We expect to sell north of 25 million tons in 2025, which compares to around 20 million tons sold in 2024.
John Turner: Specced, our plants to be quite busy this year today, we have approximately 22 million tons committed in 2025 and expect that number just the past 25 million tonnes in relatively short order.
John Turner: We expect to sell north of 25 million tons in 2025, which compares to around 20 million tons sold in 2024.
Blake Mccarthy: Our recent market share gains are testament to Atlas's efforts to position itself as the reliable partner of choice to the best operators in the Permian Basin.
John Turner: Our recent market share gains are testament to atlas's efforts to position itself as.
John Turner: As a reliable partner of choice to the best operators in the Permian Basin.
John Turner: Average sales price for the year is expected to be in the low twenties.
Blake Mccarthy: Average sales price for the year is expected to be in the With the construction of the Dune Express completed, our capital spending will come down significantly year over year. Total CapEx for 2025 is currently expected to be approximately $115 million, of which $27 million is budgeted for expanding the asset base at Moser. The remainder is evenly split between growth and maintenance for our profit and logistics business. With the turn of the calendar, our customers are now looking to deploy their refreshed capital budgets and are actively ramping activity despite recent disruptions caused by colder weather. Consequently, we expect Q1 volumes to be up 10 to 15% sequentially relative to Q4 levels.
John Turner: With the construction of the Didnt Express completed our capital spending will come down significantly year over year.
John Turner: Total Capex for 2025 is currently expected to be approximately $115 million of which $27 million is budgeted for expanding the asset base at most.
John Turner: The remainder is evenly split between growth and maintenance for our proppant and logistics business.
John Turner: With the turn of the calendar our customers are now looking to deploy the refreshed capital budgets and are actively ramping activity. Despite recent disruptions caused by colder weather.
John Turner: Consequently, we expect Q1 volumes were up 10% to 15% sequentially relative to Q4 levels.
Blake Mccarthy: For the first quarter 2025, we expect adjusted EBITDA to be between 75 and 85 million. As the year progresses, we expect our financials to more fully reflect the accretive impact of the Dune Express on our logistics margins, and expect Q1 to represent the lowest quarter for this fiscal year. Based on current market conditions and our expectations of incremental customer demand, we expect full year 2025 adjusted EBITDA to be north of $400 million. Inclusive of 10 months of contribution from the Moser Acquisition.
John Turner: For the first quarter 2025, we expect adjusted EBITDA to be between 75 and $85 million as.
John Turner: As the year progresses, we expect our financials to more fully reflect the accretive impact of the Didnt Express on our logistics margins and expect Q1 to represent the lowest quarter for this fiscal year.
John Turner: Based on current market conditions, and our expectations of incremental customer demand we.
Full year 2025, adjusted EBITDA to be north of $400 million.
John Turner: Inclusive of 10 months of contribution from the Moser acquisition.
Blake Mccarthy: For future reporting, we will break out our power business as a separate segment.
John Turner: For future reporting we will break breakout our power business as a separate segment.
Speaker Change: Before we open up the call for Q&A, a few comments from our chairman Bud Brigham.
Bud Brigham: Before we open up the call for Q&A, a few comments from our Chairman, Bud Brigham. Thank you, Blake. I just want to briefly piggyback and amplify some of John's earlier comments about just how far Atlas has come since we founded the company.
Speaker Change: Thank you Blake.
Speaker Change: Just want to briefly piggyback and amplify some of John's earlier comments.
Speaker Change: Just how far outlets has come since we founded the company.
Speaker Change: Growing up in Midland I have bad memories of visiting the nearby sand dunes for picnics and birthday parties looking back now it seems crazy that as recently as 2017, the majority of the sand being pumped downhole and the Permian Wells was shipped from Wisconsin mines that were 200 mile.
Bud Brigham: Growing up in Midland, I have vivid memories of visiting the nearby sand dunes for picnics and birthday parties. Looking back now, it seems crazy that as recently as 2017, the majority of the sand being pumped downhole into Permian Wells was shipped from Wisconsin mines that were 1200 miles away through a very expensive, complex, and unreliable supply chain. Over the last seven years, Atlas has delivered a continuum of constructive disruptions, enhancing the Permian as the premier producing region in the country, and as a more efficient, reliable, and safer energy factory on the ground. First, it was the state-of-the-art plants we built at Kermit and Monaghan's.
Speaker Change: As a way through a very expensive complex and unreliable supply chain.
Speaker Change: Over the last seven years Atlas has delivered a continuum of constructive disruptions enhancing the Permian as the <unk>.
Speaker Change: Amir producing region in the country.
Speaker Change: And then some more efficient reliable and safer energy factory on the ground.
Speaker Change: First it was the state of the art plants, we built at Kermit mono hands.
Bud Brigham: plants that uniquely included redundancy, conveyors, and remote automation from here in Austin. Later, we added the Encore Mobile Mines with our High Crush acquisition, and now we've completed the revolutionary Dune Express. project that many thought was a pipe dream, which effectively extends our Kermit mines 42 miles to the west into the premier producing region in the entire country. As a result of these Atlas innovations, we are now delivering sand with less than 20 trucking miles. That's a reduction from 1,200 miles of rail and trucking to less than 20 miles via increasingly efficient, automated, and safer delivery systems. Our last mile deliveries are increasingly via multi-trailers, and we're continuing to stage in driverless deliveries with our Kodiak Autonomous Technology.
Speaker Change: Plants that uniquely included redundancy conveyors and remote automation from here in Austin.
Speaker Change: Later, we added the oncor mobile mines with our Hi, crush acquisition and now we've completed the revolutionary doing express a project that many thought was a pipe dream, which effectively extends our Kermit mine 42 miles to the west into the premier producing region in the entire country.
Speaker Change: As a result of these Atlas innovations, we are now delivering sand with less than 20 trucking miles.
Speaker Change: That's a reduction from 1200 miles of rail and trucking to less than 20 miles via increasingly efficient automated and safer delivery systems.
Our last mile deliveries are increasingly be a multi trailers and we're continuing to stay GM driverless deliveries with our Kodiak autonomous technologies.
Bud Brigham: As we've stated before, Atlas is uniquely positioned to modernize property and logistics systems in the Permian Basin. And we are doing just that with much more to come.
Speaker Change: As we've stated before Atlas is uniquely positioned to modernize proppant and logistics systems in the Permian Basin, and we are doing just that with much more to come.
Speaker Change: I will briefly summarize some high level thoughts about Atlas position in the proppant and logistics space.
Bud Brigham: I will briefly summarize some high level facts about Atlas position in a profit and logistics space. Today, Atlas is the largest and lowest cost propping producer in the Permian, and that's for both wet and dry sand. We are also the largest last mile provider. We are now running the world's first pop-up conveyor system and the world's first driverless oil field delivery operation. We are both logistically and cost advantaged to almost every drilling operation in the Midland and Delaware Basin. As the Permian continues to mature into a factory model with increasingly scaled operators. Scale and automation for profit and logistics are increasingly essential.
Speaker Change: Today Atlas is the largest and lowest cost proppant producer in the Permian.
Speaker Change: And thats for both wet and dry sand.
Speaker Change: We are also the largest last mile provider.
Speaker Change: We are now running the world's first proppant conveyor system.
Speaker Change: The world's first driverless oilfield delivery operation.
Speaker Change: We are both logistically and cost advantaged to almost every drilling operation in the Midland and Delaware basins.
Speaker Change: As the Permian continues to mature into a factory model with increasingly scaled operators.
Speaker Change: Scale and automation for proppant and logistics are increasingly essential.
Speaker Change: Atlas is unique and differentiated we are the one stop shop for the largest raw material and delivery systems in the Permian energy manufacturing process.
Bud Brigham: Atlas is unique and differentiated. We are the one-stop shop for the largest raw material and delivery systems in the Permian energy manufacturing process.
Speaker Change: And now we are also beginning our journey into distributed power generation with most of our energy systems.
Bud Brigham: And now we are also beginning our journey into distributed power generation with Moser Energy System. Our team is very excited about collaborating with the great Moser innovators to find ways to innovate, disrupt and grow in the power market to solve problems for our E&P customers that we proudly serve.
Speaker Change: Our team is very excited about collaborating with the great Moser innovators to find ways to innovate disrupt and grow in the power market to solve problems for our E&P customers that we proudly serve.
Speaker Change: In closing.
Bud Brigham: In closing. Our mission is to improve human beings access to the hydrocarbons that power our lives. And by doing so, we maximize the value creation for our shareholders. As we celebrate our two-year anniversary as a public company and approach eight years as a company, we remain steadfastly committed to that mission. I could not be prouder of our talented and inspirational employees who come to work every day delivering on that mission. They are making the Permian Basin a more efficient, safer, and cleaner place to work and live.
Speaker Change: Our mission is to improve human beings access to the hydrocarbons that power our lives and by doing so we maximized the value creation for our shareholders.
Speaker Change: As we celebrate our two year anniversary as a public company and approach eight years as a company.
Speaker Change: We remain steadfastly committed to that mission.
Speaker Change: I could not be prouder of our talented and inspirational employees, who come to work every day delivering on that mission.
Speaker Change: They are making the Permian basin are more efficient safer and cleaner place to work and live.
Speaker Change: Last and importantly, as mentioned given our core commitment to our shareholders accounting for the latest dividend announcement I am proud to proclaim that since inception Atlas has paid out $252 million in cash distributions with more to come.
Bud Brigham: Last and importantly, as mentioned, given our core commitment to our shareholders, accounting for the latest dividend announcement, I am proud to proclaim that since inception, Atlas has paid out $252 million in cash distributions, with more to come. This is only the beginning for Atlas.
Speaker Change: This is only the beginning for Atlas.
Unknown Executive: With that, I would like to now turn the call back to the operator for Q&A. Thank you.
Speaker Change: With that I would like to now turn the call back to the operator for Q&A.
Speaker Change: Thank you the floor is now open for questions. If you would like to ask a question. Please press star one on your telephone keypad at this time a confirmation tone will indicate your line is in the question queue. You May Press Star two if you would like to remove your question from the queue for participants using speaker equipment, it may be necessary to pick up the handset.
Unknown Executive: The floor is now open for questions.
Unknown Executive: If you would like to ask a question, please press star 1 on your telephone keypad at this time. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue.
Unknown Executive: For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. We do ask that you please limit yourself to one question and one follow up. Again, that's star 1 to register a question at this time.
Speaker Change: Pressing the star Keys, we do ask that you. Please limit yourself to one question and one follow up again Thats Star One to register a question at this time.
Keith MacKay: Today's first question is coming from Keith MacKay of RBC Capital Markets. Please go ahead. Hi, good morning and thanks for all the colors so far. I just wanted to start out on Dune Express. Can you speak to maybe how much volume you've moved down the dune thus far since the commissioning in early January there? And maybe some of the gating factors that are required to get to that full effective utilization by mid-year there.
Speaker Change: Today's first question is coming from Keith <unk> of RBC capital markets. Please go ahead.
Keith: Hi, good morning, and thanks for all the color so far but just wanted to start out on the June Express.
Speaker Change: Can you speak to maybe how much how much volume you've moved down the dune thus far since the commissioning in early January there and maybe some of the gating factors that.
Speaker Change: Required to get to that to full effective utilization by by mid year there.
Speaker Change: Sure.
Chris Shaw: Yeah, Thanks, Jason Chris Shaw.
Chris Scholla: Yeah, thanks, Keith. This is Chris Scholla.
Chris Scholla: Look, I think reflecting back, right, hindsight being 2020 years ago, we really should have said we were launching Q1 of 2025 rather than kicking off a project leading into the Christmas and New Year's holiday. That always has a bit of an impact. And on that note, I do want to give a big thank you to our employees and vendors that really supported us over the holiday launch of this project. You know, in general, we really haven't had to overcome any serious obstacles. I mean, you know, we had some programming issues when we started out that kind of slowed us in December and January, but that was really just, you know, startup and optimization, synchronization of the system, if you will.
Chris Shaw: Look I think reflecting back right hindsight being 2020 years ago, we really should have said we were locked in Q1 of 2025 rather than.
Chris Shaw: Kicking off a project leading into the Christmas and new year's holiday.
Chris Shaw: That always has a bit of an impact then on that note I do want to give a big thank you to our employees and vendors that really supported us over the holiday launch of this project.
Chris Shaw: General, we really haven't had to overcome any serious obstacles I mean.
Chris Shaw: We had some programming issues when we started out that's kind of slowed us in December and January but that was really just.
Chris Shaw: Start up and optimization synchronization of the system if you will.
Chris Scholla: You know, we had to work through some power issues, but we have solutions there and are making really great improvements. We're already running close to 50 to 60% of capacity today. There will be some planned downtime in March. As a startup, you've got to go tighten up that belt. But I would say overall, the ramp phase is, you know, really going as expected. We've already proven running the belt at a full capacity instantaneous run rate. And at this point in time, it's really about increasing our, you know, daily runtime through reducing those system nuisance trips and working to eliminate and reduce that, you know, daily planned commissioning downtime.
Chris Shaw: We had to work through some power issues, but we have solutions, there and are making really great improvements.
Chris Shaw: Already running close to $50 to 60% of capacity today.
Chris Shaw: There will be some planned downtime in March startup you got to tighten up that bell, but I would say overall the ramp phases is really going as expected.
Chris Shaw: We've already proven running the belt at a full capacity instantaneous run rate and at this point in time, it's really about increasing our daily run time through reducing those system nuisance strips and working to eliminate and reduce that daily planned commissioning downtime.
Blake Mccarthy: Yes, Keith, if you think about it from a financial perspective, the full impact and logistics margins won't be fully realized until mid-year, but it will be a steady accretive tailwind as we work through the first half. So the tons delivered off the Dane Express are our highest margin tons by far. So as we go from marginal amounts in early January to full run rate at some point in Q2, the margins realized by our logistics business, those will steadily increase Q3 representing the first quarter of full financial impact, bringing logistic margins into the mid to high 20s.
Keith: Yes, Keith.
Chris Shaw: If you're thinking about as expected.
Chris Shaw: All impacting logistics margins won't be fully realized until.
Chris Shaw: Mid year.
Chris Shaw: But it will be a steady tailwind as we work through the first half.
Chris Shaw: So the ton of delivered also do express are our highest margin tons by far so as we go from martial amounts in early January to full run rates on Q2 margins realized by our logistics business. Those will steadily increase Q3, representing the first quarter of full financial impact.
Chris Shaw: Bringing logistic margins into the mid to high <unk>, So with respect to the first half the impact is obviously smallest in Q1 as we made our first commercial delivery in January and had been ramping since then.
John Turner: So with respect to the first half, the impact is obviously smallest in Q1 as we made our first commercial delivery in January and have been ramping since then. So while it is in a straight line, the slope points us to getting to our target annual run rate of 10 to 11 million tons on an annualized basis at some point in Q2. So if you think about it, marginal impact in Q1, more of a tailwind in Q2, and full impact in the second half of the month. Transcripts provided by Transcription Outsourcing, LLC.
Chris Shaw: So while it isn't a straight line slip wants us to getting to our targeted annual run rate of 10 to 11 million tonnes on an annualized basis at some point in Q2. So if you think about marvell impacting Q1 more of a tailwind in Q2 and full impacting second half a modeling perspective.
Chris Shaw: Got it that's helpful.
Chris Shaw: Maybe just turning to capital allocation.
Chris Shaw: You're expecting to spend $115 million Capex this year, which certainly is down year over year, but can you maybe speak to how you are balancing some of the opportunities that you see in the organic portfolio now with returning cash to shareholders do you have an expected.
Chris Shaw: The free cash flow allocation in terms of split between returns and growth and other things or or is it really just on a highest highest return basis.
John Turner: Pre-cash flow allocation in terms of split between returns and growth and other things or is it really just on a highest return basis? You know, this is John. You know, our goal is to keep the base dividend at a level where investors can be confident that they're going to get the cash every quarter, no matter what the market conditions. And, you know, so, you know, we're obviously looking to stress our cash flows. You know, our opportunities right now from the standpoint of our CapEx expenditures next year are based on, you know, simply, you know, what's the best return possible to our investors.
Chris Shaw: Yeah.
John Turner: Hey, this is John.
John Turner: Our goal is to keep the base dividend at a level, where investors can be confident that.
John Turner: They're going to get that cash every quarter no matter what market conditions and so we're obviously looking to stretch our cash flows.
John Turner: Our opportunities right now from the standpoint of our Capex expenditures next year or based on simply whats the best return possible to our investors and so as we continue to go throughout the year I mean, we're just not going to raise our dividend significantly we're going to continue to grow that dividend move.
John Turner: And so, as we continue to go throughout the year, I mean, we're just not going to raise our dividend significantly. We're going to continue to grow that dividend, you know, moving into the Mosher acquisition is going to give us the ability to, you know, blunt some of that volatility associated with the completion side of the business. So, yeah, I mean, in 2024, I mean, 2025, you know, we do have some growth initiatives going on there that are high return projects. We're going to continue to evaluate those and, you know, continue to deploy capital with those types of investments.
John Turner: Moving into the measure visit our merger acquisition is going to give us the ability to book some of that volatility associated with the completion side of the business. So yes.
John Turner: In 2020 for 2025, we do have some growth initiatives going on there that are going that are high return projects, we're going to continue to evaluate those and continue to deploy capital in those types of investments, but then our goal is to continue to raise.
John Turner: But then our goal is to continue to raise, you know, continue to raise the dividend and also look at other opportunities to potentially, you know, stop buyback. I mean, our board initiated a stop buyback program earlier last year. And, you know, but one thing is, you know, obviously last year, we were looking at a lot of amortization and debt pay down. So, when you look at our new term loan, you know, that frees up some cash flow for us to either, you know, return to the investors or make additional investment. So, we're going to continue to make those investments into those higher return projects.
John Turner: Continue to raise the dividend and also look at other opportunities to potentially stock buybacks I mean, our board initiated a stock buyback program earlier that earlier last year and but one thing is obviously last year, we were looking at a lot of amortization and debt pay down. So when you look at our new term loan debt free.
John Turner: And cash flow for us to either return to the investors are making.
John Turner: Additional investments into higher returning projects.
John Turner: Okay.
Keith MacKay: Thanks for that color.
Speaker Change: Got it thanks for that color that's it for me.
Speaker Change: Thank you. The next question is coming from Don Crist of Johnson Rice. Please go ahead.
Unknown Executive: Thank you.
Don Crist: The next question is coming from Don Crist of Johnson Rice. Please go ahead. Morning, guys, and thanks for letting me in. I wanted to start with Moser, you know, congrats on getting that closed quickly. And, you know, obviously, it's it's a different market than some of the other companies that have entered that market and more of a rental market that Moser operates in today.
Don Crist: Good morning, guys and thanks for letting me in I wanted to start with Moser.
Don Crist: Congrats on getting that closed quickly and obviously, it's a different market than some of the other companies that have entered that market in more of a rental market.
Don Crist: That measure operates in today can you talk about your future plans as their plans to go into bigger turbines or.
John Turner: Can you talk about your future plans? Is there plans to go into bigger turbines? Or, you know, kind of what are your overall arching plans for that segment as you kind of roll everything together? Yeah, you know, I'll start on that. And then, you know, others can chime in. I mean, you know, when we entered into the, you know, when we when we acquired Mosher or made the acquisition, you know, we were obviously, you know, thinking it's a good platform for Atlas to expand into the power business. You know, right now, there's a significant need for power in the oil field.
Don Crist: Kind of what are your overall arching plans for that segment as you kind of roll everything together.
Don Crist: Yes, I'll start I'll start on that and then others can chime in.
Don Crist: I mean, when we entered into that when we when we acquired merger or made the acquisition. We were obviously thinking it's a good platform for Atlas to expanded the power business right now.
Don Crist: There is a significant need for power in the oil in the oilfield.
John Turner: You know, I don't necessarily see the need for power any different than what you see in other parts of, in other areas of the power business. There, you know, we have pretty high return on our, on our, on our investments.
Don Crist: I don't necessarily see the need for power any different than what you see in other parts and other areas of the power business, we have a pretty high return on our on our on our investments and.
John Turner: And, but you know, that, you know, we can grow that organically, and we have some ability to expand pretty, pretty, pretty rapidly that those investments in on the Mosher platform, but, you know, we're always going to keep our eye out for areas and other parts of the power business that, you know, that makes sense for us to go into. Yeah, I'm just going to piggyback on that. You know, We view the Moser acquisition as the first investment in a power platform that we think we can grow to be a very significant piece of the overall Atlas portfolio.
Don Crist: But you know that we can grow that organically and we have some ability to expand.
Don Crist: Pretty pretty pretty rapidly.
Don Crist: Those investments in the merger platform, but we're always going to keep our eye out for areas and other parts of the power business.
Don Crist: No that makes sense for us to go into.
Don Crist: Yes on that.
Don Crist: Okay.
Don Crist: We view the Moser acquisition as the first investment in our power platform.
Don Crist: So we think we can grow to be very significant piece of the overall outlet portfolio.
Chris Scholla: And that's not necessarily just a dream in A, although I'll never rule out that Al that's the right deal presents itself. The manufacturing capacity of Moser, which is something that drew us to business, gives us a lot of flex in our ability to ramp up the growth of that business. So if concrete customer demand is there to justify the investments, we can ramp that up rather quickly. Additionally, Atlas has always prided itself on leading with innovation and disruption, and we think there's a lot of room for that in this market. So we don't want to just be slinging generators from a parking lot.
Don Crist: And that's not necessarily just during the day, although nevertheless that out if the right deal presents itself the manufacturing capacity Moser, which is something a terrific business.
Don Crist: Flex our ability to ramp up the growth of that business and concrete customer demand is there to justify the investments we can ramp that up rather quickly.
Don Crist: Additionally, Alex has always prided itself on leading with innovation and disruption and we think there is a lot of room for that in this market. So we don't want to see sling and generators for the parking lot.
Don Crist: Luckily we have some people on that the team much more as the data have hit the ground running and they're going to start taking place in this market and we're really excited to see what they're going to bid.
Chris Scholla: Luckily, we have some people on the team, much smarter than me, that have hit the ground running, and they're going to start making waves in this market, and we're really excited to see what they're doing. Yeah, this is Chris Scholla, I can take that one. You know, look, I think Kodiak has been a great partner, and these guys have done everything they've said that they would do, right? They've delivered their technology actually a bit ahead of schedule. But look, I mean, the deal we have with them, it's a performance-based deal. So as long as they keep executing on that trend, you're going to see our fleet, you know, really continue to grow.
Don Crist: Yeah.
Speaker Change: I appreciate that color and one on the autonomous trucking I mean.
Speaker Change: Lot of us two and a half years ago before you went public we're a little bit skeptical of that business, but you all have really grown that in and made big strides there.
Speaker Change: Can you talk about number one the cost savings of using autonomous versus versus a regular driver truck and what are your plans going forward, how big can that business be just on the autonomous side.
Speaker Change: Yes. This is Chris so I can take that one.
Look I think Kodiak has been a great partner and and these guys have done everything they've said that they would do right.
Speaker Change: They've delivered their technology actually a bit ahead of schedule.
Speaker Change: But look I mean, the deal we have with them. It's a performance based deal so as long as as they keep executing on that trend youre going to see our fleet really continue to grow.
Chris Scholla: I think on the scaling and margin improvement, you know, most new businesses, they don't really see a huge, huge pop there until you reach scale. And I think that inflection point occurs with us somewhere between, you know, that 50 to 70 trucks in service. And you look at, you know, to answer your question on the growth potential of this, right, you look at all the deliveries we've made to date, it's been on leased roads with light traffic, right, low speeds, 25 miles an hour. So it may be a bit too early to tell when we'll start seeing those, you know, over the road type deliveries.
Speaker Change: I think on the scaling and margin improvement.
Speaker Change: Most new businesses, they don't really see a huge huge pop there until you reach scale and I think that inflection point occurs with us somewhere between 50 to 70 trucks in service and you look at it to answer your question on the growth potential of this right.
Speaker Change: You look at all the deliveries we've made to date that's been on lease roads with light traffic right low speeds 25 miles an hour.
Speaker Change: So it may be a bit too early to tell when we will start seeing those over the road type deliveries.
Chris Scholla: But once those capabilities include, you know, over the road, I think you'll see our autonomous fleet really expand quickly. And, and just one clarification, if I remember correctly, isn't about 80% or 70% or something like that of the cost of operating the truck labor? Yes, sir. I appreciate it. I'll turn it back.
Speaker Change: But once those capabilities include over the road I think youll see our autonomous fleet really expand quickly.
Speaker Change: And just one clarification, if I remember correctly in about 80% or 70% or something like that of the cost of operating the truck labor.
Speaker Change: Yes, Sir.
I appreciate it I'll turn it back.
Speaker Change: Yes.
Speaker Change: Thank you. The next question is coming from Sean Mitchell of Daniel Energy Partners. Please go ahead.
Unknown Executive: Thank you.
Sean Mitchell: The next question is coming from Sean Mitchell of Daniel Energy Partners. Please go ahead. Hey guys, thanks for taking my question. Maybe for Blake, the industry at large is kind of been, I guess, prepared for what I would call flat to down activity in the US for 2025. This would be kind of the second year I would call flattish activity in North America. What are you guys seeing? We're seeing service companies like buy power companies get into the power business. But what are you seeing in terms of Deal flow from a standpoint of consolidating the profit market in the U.S.
Sean Mitchell: Hey, guys. Thanks for taking my question maybe for Blake.
Speaker Change: And the industry at large is kind of been I guess prepared for what I would call it flat to down activity in the U S. For 2025, this would be kind of the second year I would call it flattish activity in North America.
What are you guys seeing were seeing service companies like buy power companies get into the power business, but what are you seeing in terms of.
Speaker Change: Deal flow from a standpoint of consolidating the proppant market in the U S and or one of them.
Sean Mitchell: and or when are we potentially going to see some of these people go away in the profit market? Or do you have an opinion or thoughts around that?
Speaker Change: Whenever we potentially going to see some of these people go away and the profit market or do you have an opinion or thoughts around that.
Sean Mitchell: Well I always obtain Sean.
Blake Mccarthy: Well, I always have pain, Sean. I don't know how much that worked. But, you know, I think that in terms of deal flow, you know, I think we saw a lot of consolidation opportunity . In late last year, where people were proactively reaching out to us, but I think we've been pretty public about, we are very happy with where our sand mine portfolio sits within the Permian Basin, right, where we think, you know, if you think about the Atlas legacy assets, we had the best assets from reserves and an opex per ton standpoint. And when we acquired High Crush, we acquired the portfolio that sat immediately adjacent to us on the cost curve.
Speaker Change: I don't know if most of the work.
Sean Mitchell: I think that in terms of deal flow.
Sean Mitchell: No.
Sean Mitchell: I think we saw a lot of consolidation opportunities.
Sean Mitchell: Late last year, where people are proactively reach out to us.
Sean Mitchell: I think we've been pretty public about.
Sean Mitchell: We are very happy with where our sand mine portfolio sits within Permian Basin, right, where we said Jeff.
Sean Mitchell: The Atlas legacy assets, we had the best assets for reserves and an opex per ton standpoint, and when we acquired hi, crush we acquired portfolio.
Sean Mitchell: Immediately adjacent to us on the cost curve and so there's a lot of the stuff that would be available to us from an expansion standpoint would be dilutive to our overall portfolio.
Blake Mccarthy: And so a lot of the stuff that would be available to us from an expansion standpoint, would be diluted to our overall portfolio.
Blake Mccarthy: And we don't want to really undermine the overall portfolio at this point. Thinking about the sand market overall, I think that in John's comments, there was some positive undertones with respect to what we're seeing in the sand market. So I think the extreme cold events that we had in January and last week exposed some of the fragility that characterized the overall sand network in West Texas. Now, everyone plans for there to be weather in January and February, but it was really, really cold. And that has an effect on both mining and logistics operations. So we had our own issues that were baked into guidance, but I think these weather events hit some of our competitors who haven't been investing heavily into maintenance much harder.
Sean Mitchell: We don't want to really undermine the overall sort of the overall portfolio at this point.
Sean Mitchell: Thinking about the sand market overall.
Sean Mitchell: I think that.
Sean Mitchell: And John's comments there was.
Sean Mitchell: Yes.
Sean Mitchell: Positive undertones with respect to what we're seeing in the same market. So.
Sean Mitchell: I think the extreme cold in some kind of January and last and last week.
Sean Mitchell: I suppose some of the agility they care characterize the overall same networking west and West Texas.
Sean Mitchell: Everyone's plans, whether it would be weather January February, but it was really really cold and aetna.
Speaker Change: Correct on both mining and logistics operations.
Speaker Change: So we had our own issues that are baked into guidance, but I think these weather events at some of our competitors, who have been investing heavily into maintenance much harder and satisfying a really short in the market in a hurry.
Blake Mccarthy: And sand supply got really short in the market in a hurry. And this shows how delicate that balance is. So we saw sand prices spike significantly in those weeks. And while they've come back down to earth some, they haven't come close to getting back to the mid-teens levels that were thrown around the stock market in Q4. We think that's a really healthy development. Market certainly hasn't fully healed yet, but we are seeing much more rational behavior from our competitors around pricing. And I think that's due to people actually thinking about the economics of marginal production.
Speaker Change: And.
Speaker Change: This shows the health.
Speaker Change: Don't get that balances.
Speaker Change: We saw sand prices spiked significantly those recent well they've come back down to Earth.
Speaker Change: We haven't come close to getting back to the mid teens levels that are appropriate in the spot market in Q4.
Speaker Change: We think that's a really healthy development.
Speaker Change: Mark certainly the full yield yet.
Speaker Change: But we are seeing much more rational behavior from our competitors around pricing.
Speaker Change: And I think I've seen people actually thinking about the economics of marginal production when you.
Blake Mccarthy: You know, when you're running a skeleton crew on a mine, that you have a hard ceiling on what you can produce. And, you know, your optics per ton, you know, is significantly higher than it would be if your facility was in full utilization. The fixed cost numbers in this business is just, it's just so darn high. So when they have an opportunity for spot sales, you know, they have to sell their production at that elevated level, because you're not going to be adding a second shift if there's zero confidence that the volume optic will be there.
Speaker Change: We're running a skeleton crew on a line that you have a hard ceiling on what you produce.
Speaker Change: And your Opex per ton.
Speaker Change: It's significantly higher than it would be if your facilities at full utilization and fixed cost leverage in this business is just so darn high so.
So when they have an opportunity to response in sales they have to sell that production at that elevated level, because youre not going to be adding a second shift there zero confidence that volume will be there.
Blake Mccarthy: So it's a difficult situation to be in. It's a bit of a double-edged sword, you know, so you're likely not covering overhead at this level, but you don't want to throw gas on fire either. So it's a tough situation for a lot of players out there.
Speaker Change: So it's a difficult situation to be in spite of a double edged sword.
Speaker Change: Yes, you are likely not covering overhead levels at yamana for gasoline buyer either so it's a tough situation for a lot of players out there.
Blake Mccarthy: And I think that gives you some insight into why we think supply attrition is going to continue to play out. Yeah, that's great color.
Speaker Change: And I think that gives some insight why we think supply attrition.
Speaker Change: Egypt play out.
Speaker Change: Yeah, that's great color. Thanks, maybe one more for me just you have a slide in the deck I think slide 17, where you show Permian Frac count, it's essentially been I don't want to call. It flat between 90 and 100 Frac fleets in the Permian basin for the past four years, but you actually show.
Unknown Executive: Thanks.
Unknown Executive: Maybe one more for me.
Atidrip Modak: You have a slide in the deck, I think slide 17, where you show Permian frac count. It's essentially been, I don't know, I want to call it flat, between 90 and 100 frac fleets in the Permian Basin for the past four years, but you actually show sand or profit volume trending higher, and it looks like that continues again this year, even with frac count potentially going lower. I think a lot of this is driven by what you say in your slide deck, simul and trimul fracs. My question to you guys is, are you seeing, I mean, obviously we know the big EMPs that have large-scale development doing simul and trimul frac.
Speaker Change: Sand proppant volume.
Speaker Change: Lending higher and it looks like that continues again this year, even with the Frac count potentially going lower I think a lot of this is driven by what you say in your in your slide deck, Simon and Triangle Fracs. My question. Do you guys is are you seeing I mean, obviously, we know the big E&ps that have large scale development doing Simon on triangle Fracs are we starting to.
Atidrip Modak: Are we starting to see some of the other operators participate in the simul, trimul frac, on the on the on the completion side.
Speaker Change: See some of the other operators participate in this time all travel frac.
Speaker Change: On the on the on the completion side.
Yes.
Chris Scholla: This is Chris. At this point, we really are seeing that trend, you know, expand out. I mean, one of our, you know, smaller independents that have been with us for years are kicking off their first simulant. I think that's just a great example of, you know, continuing to roll out, if you will, that effectiveness of the technology, the factory on the ground. And as these technology, you know, and completion enhancements make it from, you know, the big guys, I think there is a little bit of copycat out there, right? And we're seeing that trend continue across the board.
Chris Shaw: Chris at this point, we really are seeing that trend.
Speaker Change: Expand out I mean, one of our.
Speaker Change: Smaller independents that have been with us for years are kicking off their first time when I think that's just a great example of.
Speaker Change: No.
Speaker Change: Renewing to rollout if you will.
Speaker Change: Effectiveness of the technology the factory on the ground and as this technology.
Speaker Change: Completion enhancements make it from the big guys. I think there is a little bit of copycat out there right and we're seeing that trend.
Speaker Change: You can continue across the board.
Okay. That's helpful. Thanks, guys I'll turn it back.
Unknown Executive: Okay, that's helpful.
Unknown Executive: Thanks guys, I'll turn it back.
Speaker Change: Thank you. The next question is coming from <unk> <unk> of Goldman Sachs. Please go ahead.
Unknown Executive: Thank you.
Atidrip Modak: The next question is coming from Atidrip Modak of Goldman Sachs. Please go ahead. Hi, good morning. I think you guys talked about 25 million tons in volume for the full year. And then you mentioned some key customers as well. So I was just wondering if you can talk about what share is that of that is the key customers? Where is the pricing conversation with them? And maybe if you can talk about the longer term activity expectations of those customers based on your conversation?
Speaker Change: Hi, Good morning, I think you guys talked about 25 million tons and volumes for the full yard.
Speaker Change: And then you mentioned some key customers as well. So I was just wondering if you can talk about what share.
Speaker Change: Is that all of that is the key customers.
Speaker Change: That is the pricing conversation with them and maybe if you could talk about the longer term activity expectations of those customers based on your conversations.
John Turner: Well, I think we're going to avoid overall market share conversations, but... You know, I think that We, you know, as John talked about, we, you know, we set a hard floor on pricing during RFP season. We know that we, we offer a Certainly advantage reliability and better overall service levels, and, you know, operators can, they know how this is going to be there, their sand's going to show up on time, and we're not going to, we do everything we can not to be the reason that, you know, people have, you know, NPT on site, so we take that very, very seriously, and that tends to pay us dividends when it comes to our customer relationships.
Speaker Change: Oh, yes, we're going to avoid overall marketshare conversations.
Speaker Change: <unk>.
Speaker Change: Yes, I think that.
Speaker Change: As John talked about we set a hard floor.
Speaker Change: On pricing.
Speaker Change: During RFP season, we know that.
Speaker Change: We offer it.
Speaker Change: Certainly vantage rod reliability.
Speaker Change: Better overall service levels.
Speaker Change: Operators can they know out there.
Speaker Change: They're saying, it's got to show up on time it whenever we do everything we can not to be the reason.
Speaker Change: People on.
Speaker Change: So we take that very very seriously.
Speaker Change: Such as pay as dividends when it comes to our customer relationships and thats evidenced by.
John Turner: And that's evidenced by, you know, if there's something, if customers are coming to partner with Atlas on 100% of their sand needs, it's not something that we've seen in the past, so, you know, I think that's just the proof that the market and the customers show the reliability, the durability, and the lives they put on Atlas as a, let's just say, logistics provider. Yeah, it was a it was a key differentiator during this RFP season is that operators knew they're like, you know, it's one thing to be like, okay, hey, I can get the cheapest sand.
Speaker Change: Customers are coming to partner with Atlas on 100% understand needs is that something that we've seen in the past so.
Speaker Change: I think that's just that's true.
Speaker Change: With the market and the customers showed the reliability durability and the alliance they put on Atlas.
Speaker Change: Standing logistics for them.
Speaker Change: Yes, it was a it was.
Speaker Change: Key differentiator.
Speaker Change: During this RFP season.
Speaker Change: Operators New airlines.
Speaker Change: Once I go like okay.
Speaker Change: Get the cheapest sand.
Speaker Change: But it might not be there in June and July.
John Turner: But it might not be there in June, July, because, you know, those guys might not be there. And they know that Atlas is going to be there and that we're going to do everything we can to partner with them for the long term. And our sales team did a fantastic job of going out there and getting those volumes.
As those guys might not be there and they note that Atlas is going to be there and that we're going to do everything we can to us to.
Speaker Change: Partner with them for the long term.
Speaker Change: Our sales team did a fantastic job of going out there in those volumes.
Atidrip Modak: So we feel really good about where we're That makes sense.
Speaker Change: We feel really good about where we're at.
Speaker Change: That makes sense and then maybe on the mining side. If you can give us what your latest thoughts are on the call.
Blake Mccarthy: And then maybe on the mine side, if you can give us what your latest thoughts are on the cost profile progression, I know you talked about the four quarter numbers, but just if you can give us how we should think about the progression on there for the full year. Yeah, so we'll continue to go so that We actually saw at like on the ground level. Significant improvements just in processes and stuff like that. That team's doing a great job. It just didn't really flow through financials just because you had the step-down in volumes with the seasonal holiday slowdown.
Speaker Change: Cost profile progression I know you talked about the fourth quarter numbers, but just if you can give us how we should think about the progression on that portfolio.
Speaker Change: Yes so.
Speaker Change: We will continue to.
Speaker Change: No.
We actually saw.
Speaker Change: On the ground level.
Speaker Change: Significant improvements in processes and stuff like that that team is doing a great job.
Speaker Change: It just didn't really flow through the financials, just because you had the step down in volumes with the seasonal holiday slowdown.
Blake Mccarthy: As you come back into, you know, reloaded capital budgets, we'll see that volume uptick, you know, up in Q1 and even more so in Q2. And so you'll see that fixed-cost leverage start to flow through to the op-ex per time. So, you know. Thinking about, you know, getting to, you know, high tens in the Q1 level, in Q1 numbers, and continued improvement through mid-year is a pretty, you know, where we're probably going to have to push you up from a modeling perspective.
Speaker Change: If you come back into reloaded.
Speaker Change: Reloaded capital budgets, we'll see that volume uptick.
Speaker Change: Up in Q1, and even more so in Q2, and so youll see that fixed cost leverage.
Speaker Change: Start flow through to the Opex per tonne so.
Speaker Change: Thinking about <unk>.
Speaker Change: Getting to high.
Speaker Change: High teens in the Q1 level.
Speaker Change: Q1 numbers and continued improvements in our mid year.
Speaker Change: Is it pretty well.
Speaker Change: We're very proud of that.
Speaker Change: From a modeling perspective.
Blake Mccarthy: We won't get back to, you know, our full optimal levels until early 2026, as we talked about when we get those new dredges in our primary and current mine. But yeah, there's, we're continuing to focus on process improvements and optimization projects. They're doing a fantastic job. So we'll continue to see that be a great tailwind to the financials as we work.
Speaker Change: We won't get back to optimal levels similar to 2026, as we talked about when we get this Chris nutritious.
Speaker Change: Our primary current March but yes, there's we're continuing to focus on process improvements and optimization projects. They.
Speaker Change: They're doing a fantastic job. So we'll continue to see that it could be a tailwind to the financials as we work through the year.
Speaker Change: That's awesome. Thank you guys.
Unknown Executive: That's awesome, thank you guys. Thank you.
Speaker Change: Thank you. The next question is coming from David Smith of Pickering Energy Partners. Please go ahead.
David Smith: The next question is coming from David Smith of Pickering Energy Partners. Please go ahead. Hey, good morning, and thank you for taking my question. Morning Dave. Morning. Most of my questions were asked or addressed in the prepared remarks, but sorry if I didn't catch this. Did you mention where your current contract coverage sits for the year? We currently have approximately 22 million tons contracted already and expect that number to move up as we work through the rest of the first quarter. I think that there's this misconception that RFP season stops at New Year's Eve, but some players feel that the contract process is dragged through January, February, so that number will move up between now and the Q1 fall.
David Smith: Hey, good morning, and thank you for taking my question.
Speaker Change: Okay.
Speaker Change: Good morning.
Speaker Change: Most of my questions were asked or addressed in the prepared remarks, but sorry, if I didn't catch that you mentioned, where your current contract coverage thats for the year.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: I think what we said.
Speaker Change: Okay.
Speaker Change: Currently have approximately 22 million tons contracted.
Speaker Change: Already and expect that number to move up as we work through the rest of the first quarter.
Speaker Change: I think that there's this misconception.
Speaker Change: That said the RFP season stops at New year's Eve.
Speaker Change: Some players the other contract processes drag for January February so.
Speaker Change: That number will move up between now and the Q1 call and we entered in a contract is pretty much in every quarter, maybe with the exception of late third quarter.
David Smith: We enter contracts pretty much in every quarter, maybe with the exception of the late third quarter, but we are attracting sand and logistic services throughout the year.
We are attracting sand and logistics services throughout the year.
Speaker Change: Okay.
David Smith: Appreciate it.
Speaker Change: Got it.
John Turner: And I was curious, if you see interest from from customers to sign longer term contracts, and if so, how do you think about the trade off between, you know, interest and longer duration versus the relatively lower current price Yeah, I think for us, we really, you know, as John mentioned earlier, we've really seen customers, a pull from customers to move to more, you know, Tenaris type model, 100% supply. Here's my, here's my, you know, here's my FRAC schedule, you guys, you guys cover it. And I think that all comes with, you know, our ability to execute, continue to work with our customers and proactively, you know, remove those bottlenecks.
Speaker Change: I was curious if you see interest from customers to sign longer term contracts and if so how do you think about the tradeoff between interested longer duration versus relatively lower current prices.
Yeah.
Speaker Change: Yes, I think for US we really as John mentioned earlier, we've really seen customers a pull from customers to move towards <unk>.
Speaker Change: Scenarios type model, 100% supply here's my here's my.
Speaker Change: Here's my Frac schedule you guys you guys cover it and I think that all comes with.
Speaker Change: Our ability to execute continue to work with our customers and proactively remove those bottlenecks. So so look for array.
John Turner: So, so look for a, you know, three to five year term, are you probably going to have a little bit, a little bit lower pricing on long term deals than, than, you know, spot pricing or six month, you know, arrangements? Yeah, absolutely. Right. But I think, you know, that's made up for in, in volume by far. And, you know, from a, from a total customer perspective, you know, that's what, what we really want to do is partner with our continue to, to get 100% of their volumes and execute and remove bottlenecks, you know, in their operation.
Speaker Change: Three to five year term are you going to have a little bit a little bit lower pricing on long term deals then.
Speaker Change: Then spot pricing are six months arrangements, yes, absolutely right, but I think.
Speaker Change: That's made up for in volume by far and.
Speaker Change: From a total customer perspective.
Speaker Change: That's what we really want to do is partnering with our customers continue to.
Speaker Change: You get 100% of their volumes and execute and remove bottlenecks.
Speaker Change: And their operation.
Speaker Change: I appreciate the color that's it for me. Thank you.
David Smith: Appreciate the color. That's what's going on.
Unknown Executive: Thank you.
Michael Gallo: Thank you. The next question is coming from Michael Gallo of Stephens. Please go ahead.
Michael Scialla-Stevens: The next question is coming from Michael Scialla-Stevens. Please go ahead. Hi, good morning. Blake, could you say again how much of the 25 CapEx is going toward growth? I was jotting that down and missed it. And can you give any detail on what those growth opportunities look like? Yeah, so just the CapEx breakdown again. So we've gotten to $115 million for 2025 CapEx, $27 million of that is committed to growing the Moser platform. And the remainder is evenly split between maintenance and growth for our legacy business. On the growth CapEx side for the legacy business, we continue to invest into our logistics and last mile operations.
Michael Gallo: Hi, Good morning, Blake could you say again, how much of the 25 capex is going towards growth John.
Michael Gallo: Missed it.
Michael Gallo: Can you give any detail on what those growth opportunities look like.
Michael Gallo: Yes, so just the Capex breakdown again, so we've gone to $115 million for 2020, but capex $27 million of that is committed to growing the most of the platform and the remainder is evenly split between maintenance and growth for our.
Michael Gallo: Our legacy business.
Michael Gallo: On the growth Capex side from legacy business, we continue to invest into our logistics and last mile operations. We've got some exciting projects there that has a fantastic return profile. So.
Blake Mccarthy: We've got some exciting projects there that have fantastic return profiles, and we're really excited to share those with the street over the coming months.
Michael Gallo: Really excited to share those with the street seven months.
Michael Gallo: Okay.
Blake Mccarthy: Okay. Can you talk about any of the opportunities on the PowerGen side in that $27 million? I think you had mentioned that there are some applications that could require more than 10 megawatts. Anything there in particular that is worth noting? Yeah, so, uh... In that number, and so that in that 27 million for Moser, in that within that, that's the The cumulative Moser number that includes a small amount of very small amount of maintenance. But what really attracted us to this investment was their internal manufacturing capacity. And the return profiles on those generators with their cost basis, it's just so fantastic.
Michael Gallo: Can you talk about any of the opportunities on the power. Gen side is about 27 million I think you had mentioned that.
Michael Gallo: There are some applications that could require more than 10 megawatts anything there in particular that is worth noting.
Michael Gallo: Yeah. So.
Michael Gallo: In that number.
Michael Gallo: So that's a net $27 million for most of our.
Michael Gallo: And then within that business.
Michael Gallo: The accumulative Moser number that includes the <unk>.
Michael Gallo: Amount, a very small amount of maintenance.
Michael Gallo: But what really attracted Joseph to this investment was near term manufacturing capacity.
Michael Gallo: The return profile on those generators.
Michael Gallo: Their cost basis.
Michael Gallo: Fantastic.
So that number.
Blake Mccarthy: So that that number, you know, as we talked about includes growing that that megawatt base from 212 megawatts to 310 by the end of 2026. So we'll be, you know, working to fully deploy the existing fleet, which requires some remanufacturing work. And then on top of that, adding new capacity. So that's going to be, you know, that that Moser contribution is going to grow between now and the end of the year. And, you know, we're, John mentioned it, kind of a throwaway comment a little bit, but customer response to this acquisition has been really positive.
Michael Gallo: As we've talked about <unk>.
Michael Gallo: We're growing that.
Michael Gallo: The megawatt base from 212 megawatts to 310 by the end of <unk>.
Michael Gallo: <unk> thousand 26.
So we will be.
Michael Gallo: Working to fully deploy the existing fleet will require some remain factoring work and then on top of that adding new capacity, so that's going to be.
Michael Gallo: Most of the contribution is going to grow between now and ended the year.
Michael Gallo: And we are.
Michael Gallo: As John mentioned, it was kind of a throwaway comment a little bit but customer response to this acquisition has been really positive so.
Blake Mccarthy: So, you know, it's You know, our sales guys are always complaining, you know, their jobs are hard, but when the phone when their when their job consists of picking up the phone and answering customer inquiries, it gets a little easier. And we're getting quite a few of those. And so certainly given us some food for thought about how we want to think about the growth potential of this business, because it's been a little overwhelming. So those Sounds good.
Michael Gallo: Yes.
Michael Gallo: Our sales guys are always complaining theyre, John apart, but when the boat when their job consist of picking up the phone and answering customer inquiries. It gets a little easier and quite a few of those so certainly given us some food for thought about how we want to think about.
Michael Gallo: The growth potential of this business because it's been a little overwhelming so thus far.
Michael Gallo: Sounds good thank you.
Unknown Executive: Thank you.
Thank you. Our next question is coming from Curt <unk> of benchmark. Please go ahead.
Kurt Hallead: Our next question is coming from Kurt Hallead of Benchmark. Please go ahead. Hey, good morning, everybody. Thanks, everyone. Bye. So I've got a couple of follow-ups. I think, John, in your commentary, you referenced that you expect Sand pricing to return to, you know, normalized levels. And as we know in this business, I'm not really sure what normalized is anymore. But in the context of that, you know, is a mid kind of 20s. And per time, what you would consider normalized in today's environment. Yeah, I mean, mid to low 20s is what I would say normalized.
Curt: Hey, good morning, everybody.
Speaker Change: Thanks Darren.
Speaker Change: So again.
Speaker Change: I had a couple a couple of follow ups I think John in your commentary you referenced that.
Speaker Change: You expect.
Speaker Change: Sand pricing to return to normalized levels and as we know in this business I'm not really sure what normalized things anymore.
But in the.
Speaker Change: In the context of that.
Speaker Change: Is the mid twenties.
Speaker Change: <unk>.
Speaker Change: You would consider normalized in today's environment.
Speaker Change: Yes, I mean middle of 'twenty one.
Speaker Change: I was assistant normalize I mean, we were really referring to what was going on in the fourth quarter.
John Turner: I mean, we were really referring to what was going on in the fourth quarter. Right, right. Yeah, so okay, that's fine.
Speaker Change: Right right, yes, so okay. That's fine and then second question is on the merger acquisition.
Blake Mccarthy: And then second question is, on the Moser acquisition, you reference again, you know, some commentary about some things dependent upon additional, you know, , I guess I'll take agreements or contracts or whatever, and your initial press release you reference measures running about, let's call it, you know, 40, 45 million of annualized debit DoC on a 10 month, I think, basis, you got, so just can you help me connect the dots, so it sounds like there's already contracts in place, so what was the commentary about depending on other contracts being signed? That is that was what Blake we would like was referring to is we've had a lot of Positive feedback from our customer base on the acquisition of Mosher, which kind of, you know, really reaffirms our decision to make the acquisition.
Speaker Change: You referenced again some.
Speaker Change: Some commentary about some things dependent upon additional.
Speaker Change: No.
I guess off take agreements or contracts or whatever in your initial.
Speaker Change: Press release, you referenced measures brought in about let's call it 40 $45 million.
Speaker Change: Annualized EBITDA.
Speaker Change: 10 months I think since you guys.
Speaker Change: So just can you help me connect the dots. So it sounds like there are already contracts in place. So what was the commentary about depending on other.
Speaker Change: Other contracts being signed.
Speaker Change: That was what Blake was Mike was referring to is we've got a lot of.
Speaker Change: Positive feedback from our customer base on on the acquisition of merger was kind of it.
Speaker Change: Really reaffirms our decision to make the acquisition.
John Turner: And, you know, we don't have anything necessarily, you know, in a hard contract right now, but that's something that we're working on. And it's obviously something that we can easily, you know, bring on additional volume and capacity if we need to with our manufacturing operation. So that's really what that's talking about, Kurt.
Speaker Change: Don't have anything necessarily.
Speaker Change: And a hard contract right now, but that's something that we're that we're working on and it's obviously something that we can easily.
Speaker Change: Bring on additional volume and capacity, if we need to with our manufacturing operations. So thats really what that softly locker.
Speaker Change: Okay, and then maybe one for for Bud Bud.
Bud Brigham: Okay, and then maybe one for for Bud, Bud, you started the business around, you know, frac sand and evolved that into a premium logistic services business. And now you're adding on to some power solutions.
Speaker Change: As part of the business around Frac sand and evolve that into L. A premium logistics services business and now you're adding on to Sunpower solutions. So.
Bud Brigham: So, you know, maybe you could share with us kind of what your what your vision is over the next three to five years in terms of, you know, building out these three pieces, or you got a couple more things up your Can you please turn it off? Thank you so much. Thank you. A non-op business, an operated business, and a loyalty business.
Speaker Change: Maybe you could share with us kind of what your what your vision is over the next three to five years in terms of.
Speaker Change: Building out these three pieces, where you've got a couple of lower things up your sleeve.
Speaker Change: Okay.
Speaker Change: <unk>.
Speaker Change: Okay.
Speaker Change: Oh.
Speaker Change: Yeah, no one off business and operated business royalty business.
Speaker Change: Okay.
Speaker Change: Brad.
Speaker Change: Can you can you repeat that question, we were having a little hard time hearing you.
Bud Brigham: Can you repeat that question? We were having a little hard time hearing it. Yeah, yeah, yeah, no, no, look, I just said, look, but you started this business, right, with with FracSand, and you layered on a premium logistic services, and now you're rolling into power solutions. So I'm just kind of curious, you know, what you see over the next three to five years, are these the kind of three core building blocks, or do you have a couple more, you know, tricks up your sleeve, so to speak? Well, I think, I mean, certainly Atlas is demonstrated by the Moser Acquisition provides a unique and platform for modernizing the oil field.
Speaker Change: Hey, guys just bad luck.
Speaker Change: You started this business right with Frac sand and you layered on a premium logistics services are now rolling into power solution. So I'm just kind of curious what you see over the next three to five years are these the kind of three core building blocks or do you have a couple more.
Speaker Change: Tricks up your sleeve so to speak.
Speaker Change: Well I think I mean suddenly Atlas as demonstrated by the most of our acquisitions.
Speaker Change: So unique.
Speaker Change: Paul.
Speaker Change: All of those in the oilfield.
Speaker Change: Gross profit.
Bud Brigham: You know, of course, profit is critical for every single well in the oil field and then the delivery of that profit, the logistics is integral to the, you know, to the efficiency of the factory on the ground. So, so I think there's going to continue to be more, more opportunities to innovate and associated with that green shoes for Atlas. Again, Moser and constructive power in the oil field is just one example of that. I do think, you know, the other companies are really just providing liquidity and bringing sophistication and experience and knowledge to the other asset classes in the Permian.
Speaker Change: This is critical for every single well in the oilfield and the delivery of that profit.
Speaker Change: The logistics is.
Speaker Change: And the growth.
Speaker Change: So the efficiency of the factory on the ground. So so I don't think there's going to continue to pay more.
Speaker Change: More opportunities to innovate and.
Speaker Change: And associated with that green shoots for apples.
Moshe: Thank you Moshe.
Moshe: <unk> polymer and wholesale is just one example of that.
Moshe: At this time.
Moshe: Companies are really just providing liquidity and bringing.
Moshe: Sophistication in.
Moshe: And experience and knowledge to the other asset classes in the Permian.
Bud Brigham: One of the things that came up earlier that I think is important, maybe I'll just take off two to point it out, is that, you know, as the oil field becomes more efficient, and you see that with the drilling rigs, and you see that with the frack crews that they tend to, those efficiencies tend to cannibalize that equipment, but Atlas is on the other side of that because, because as the frack spreads get more efficient, that just means more sand consumption. So we're kind of the inverse of that and benefit from that in a way, kind of like a midstream enterprise.
Moshe: What are the things that came up earlier, but I think it's important maybe I'll just take the opportunity to pointed out.
Moshe: Is that also becomes more efficient you can say that with the drilling rigs and you say that with the Frac crews.
They tend to sell.
Moshe: Those efficiencies mechanical laws that equipment, but Atlas is on the other side of that because because the frac spreads get more efficient that just means more sand consumption.
Moshe: So we're kind of the inverse of that.
Moshe: And benefit from that.
Moshe: What are you kind of like a midstream enterprise, there's going to be more sand into the wells in the Permian. So so I'd just like Atlas.
Bud Brigham: There's, there's going to be more sand flowing into the wells in the Permian. So, so I just think Atlas is in a great place in terms of as the Permian development accelerates with the larger scale operators with larger operations. Atlas has the scale and the technology to complement the operators and to reliably provide them the services that they need.
Moshe: Great place in terms of.
Moshe: Yes.
Permian.
Moshe: Yeah.
Moshe: But accelerates with the larger scale operators with larger operations Atlas has the scale and the technology to complement the operators and to reliably.
Moshe: For Biogen in the services side.
Bud Brigham: Hopefully that helps you a little bit. Absolutely, I appreciate the insight.
Moshe: Hopefully that helps you a little bit.
Moshe: Absolutely.
Moshe: Any insight.
Moshe: Okay.
Moshe: Yeah.
Speaker Change: Donald will come over the top there I think we have time for one more question.
Unknown Executive: Donna, we're coming up to the top of the hour. I think we have time for one more question. That was it? Okay. We're showing no further questions.
Moshe: Okay great.
Speaker Change: Having no further.
Speaker Change: Mr. Turner do you have any closing comments.
John Turner: Mr. Turner, do you have any closing comments? Yeah, I want to thank everybody for coming to join us for this call. So we're very excited about about what what Atlas has done and about the future. And Atlas is we look forward to reporting our first quarter results and operational results here in a few months. Thanks.
Speaker Change: Yes, I want to thank everybody for coming to join US for this cost. So we're very excited about about what what Atlas has done an about feature Atlas as we look forward to reporting our first quarter results and operational results here.
Speaker Change: In a few months thanks.
Speaker Change: Ladies and gentlemen. This concludes today's event you may disconnect your lines or log off the webcast at this time and enjoy the rest of your day.
Unknown Executive: Ladies and gentlemen, this concludes today's event. You may disconnect your lines or log off the webcast at this time and enjoy the rest of your day.
Speaker Change: Yeah.
Speaker Change: [music].
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: [music].