Select Water Solutions, Inc.

Greetings, and welcome to the Select Energy Services fourth quarter earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Chris George. Thank you, Chris. You may begin.

Thank you, operator, and good morning, everyone. We appreciate you joining us for Select's conference call and webcast to review our financial and operational results for the fourth quarter and full year of 2022. With me today are John Schmitz, our founder, chairman, president, and CEO, Nick Zweika, senior vice president and chief financial officer, and Michael Skarkey, executive vice president and chief operating officer. Before I turn the call over to John, I have a few housekeeping items to cover. A replay of today's call will be available by webcast and accessible from our website at selectenergy.com. There will also be a recorded telephonic replay available until March 8, 2023. The access information for this replay was also included in yesterday's earnings release. Please note that the information reported on this call speaks only as of today, February 22, 2023, and therefore time-sensitive information may no longer be accurate as of the time of the replay listening or transcript readings. In addition, the comments made by management during this conference call may contain forward-looking statements within the meaning of the United States federal securities laws. These forward-looking statements reflect the current views of select management. However, these various risks, uncertainties, and contingencies could cause our actual results, performance, or achievements to differ materially from those expressed in the statements made by management. The listener is encouraged to read our annual report on Form 10-K, our current reports on Form 8-K, as well as our quarterly reports on Form 10-Q to understand those risks, uncertainties, and contingencies. Also, please refer to our earnings announcement released yesterday for reconciliations of non-GAAP financial measures. Now I'd like to turn the call over to our founder, chairman, president, and CEO, John Schmitz.

Thanks, Chris. Good morning, and thank you for joining us. I'm excited to be discussing Select again with you today. Overall, 2022 was a very exciting time for Select, and I'd like to start by highlighting some of our achievements over the past year. During 2022, we grew revenues by 81% and adjusted EBITDA by 290%, finishing the year with total revenues of approximately 1.4 billion and adjusted EBITDA of 195 million. As importantly, we finished the year with record net income and earnings per share. Across our segments, we achieved record revenues in both water infrastructure and chemicals, while water services continue to reap the benefits of our consolidation and technology initiatives, achieving all-time high levels of revenue on a per-employee basis. Select has always been dedicated to maintaining a strong balance sheet and discipline allowed us to capitalize during a dislocated market over the last two years. We've closed on a dozen different strategic acquisitions and executed a meaningful number of organic growth projects, adding a sizable portfolio of contracted and production-weighted revenues bringing incremental financial stability to our business. For example, we recently signed multiple new long-term contracts to support new recycling projects in the Delaware Basin. We continue to see tremendous amount of interest from our customer base around contracting new infrastructure development, particularly around full lifecycle solutions and I see a number of opportunities for additional growth this year. The additional stability provided by these initiatives, acquisitions, projects, and contracts give us incremental optionality in our capital allocation strategy. Accordingly, I am proud to have initiated our first ever quarterly dividend during quarter four, 2022, Having just paid our second-ever dividend last week, I look forward to building and enhancing a solid track record of returning capital to shareholders as a component of our overall capital allocation framework. Over the last couple of years, Select has remained steadfast and focused on executing our strategy of building and bolstering the core water and chemicals business, advancing our technology, sustainability, and diversification efforts, as well as executing on our strategic M&A. It is clear to me that these efforts have been paying off. 2022 represented a culmination of sorts for this strategy, as well as an opportunity for a new beginning, one which reinforces our connection to water. At our core, Select is dedicated to our vision to be the recognized leader and trusted partner in sustainable water management solutions. Select was initially built over the last 15 years to service the oil and gas industry. And in that time, we have refined our focus to become a technology leader uniquely positioned as the only integrated full life cycle water and chemistry company in the industry. We continue to develop new and creative chemistry technologies that have helped us grow our market share in the industry. These efforts have helped lead the industry towards sustainable recycling and reuse solutions. During 2022 alone, select recycled 174 million barrels of produced water for reuse, or more than 7 billion gallons of water. This is equal to more than two months of water usage of the city of Austin, Texas. Approximately two-thirds of this came from our fixed facilities under long-term contracts, with the other third coming from our active mobile operations. These recycling solutions will provide critical, sustainable solutions for traditional energy industry, allowing it to continue to prosper as part of the energy transition in years ahead. The last 10 years have seen the dramatic impact in the United States, and to a lesser extent globally, of the shale revolution. This has revitalized the US oil and gas production and created an abundance of economical energy that is essential ingredient to fueling the power of human ingenuity and progress. We believe the important contribution of responsible energy production is too often taken for granted. As the world seeks to reduce energy poverty and improve energy access for all people, We can also mitigate the risk of climate change through thoughtful innovation and investments to develop sustainable ways to produce affordable, reliable, clean energy as part of a comprehensive energy transition. Ultimately, Select will remain firmly committed to advancing new and sustainable solutions for our customers and other stakeholders that are responsible for producing the energy needed to power homes, the fuels that provide mobility to the global economy, and the refined products needed to engineer advanced materials and technologies. However, our expertise in sustainable water and chemical solutions has a diverse range of application beyond our traditional niche within unconventional shale resource development and production. Whether that is through full lifecycle water and waste management solutions, developing creative technologies to support the energy transition, or more broadly advancing into other industrial sectors, we believe Select is uniquely positioned to capitalize on new growth opportunities using and building upon our existing expertise. In recent years, we have closed on a dozen strategic acquisitions while also divesting non-core assets and operations that were not strategic to our vision. With our diverse capabilities and that pace of change, it is clear to me that Select is ready for a realignment. Accordingly, I am excited to announce our corporate rebranding initiative. During the first half of 2023, Select intends to change its name to Select Water Solutions Inc. We will remain traded on the New York Stock Exchange under the stock ticker WTTR, embracing our heritage as a water-first company. For now, our corporate and financial segment reporting structures are not changing. However, this rebranding will align our employees and field operations, consolidating more than 10 unique brands and DBAs currently operating nationwide. This change will also significantly simplify our external communications with our customers and ensure that we are receiving maximum brand recognition for our capabilities and technologies across the entire platform of our operations. To embody our new corporate identity, we also have launched a new brand logo. I believe it's a bold and vivid emblem for the future of Select, a future connected by water. I look forward to deploying our new brand into the marketplace in months ahead. Whether it's about uniting our teams around integrated water and chemistry, creating sustainable partnerships with our customers, integrating large infrastructure networks, or being good stewards for our surrounding communities, our business is all about making connections. And whether it's molecules or pipelines or people, we are all connected by water. Importantly, this initiative also prepares Select for the years ahead of us. Supported by our recent acquisitions, advanced chemical technologies, organic infrastructure growth opportunities, and our other strategic investments, I see meaningful revenue, EBITDA, and net income growth in 2023. We will continue to seek new and exciting opportunities, both organically and through M&A, while also making sure to hold ourselves accountable through improving the base business and constantly evaluating what fits our strategy long term. I am very excited about what the future holds for Select and look forward to further executing on this vision through additional earnings growth, shareholders' returns, and strategic execution during 2023. Now I'd like to turn it over to Nick to provide more details on our fourth quarter financial performance, our 2023 outlook, and the other ongoing initiatives. Nick?