“Select sits in a very strong position in the marketplace, with no bank debt, strong cash flow capabilities and a substantial cash balance. In addition to this financial strength, we have the ability to leverage our competitive strengths as the oil and gas industry’s leading sustainable water and chemical solutions provider to expand into new areas or other industries to take advantage of the energy transition. We are very excited about these recent water recycling and energy transition investments, and we continue to believe that additional opportunities lie ahead, particularly as we begin to see the benefits of the momentum in the activity landscape,” concluded Schmitz. “We are also furthering our efforts to innovate and find new ways to diversify our capabilities and advance our initiatives around the energy transition. As part of this effort, we are pleased to announce a strategic investment in ICE Thermal Harvesting. ICE is a new venture focused on providing zero-emission geothermal electric power to the oil and gas industry as well as industrial consumers across multiple sectors. We are excited to collaborate with the ICE team as both capital and strategic partners and look forward to the growth opportunities ahead for the business. Consolidated Financial Information
“As previously disclosed, we recently partnered with two blue-chip operators in the core of the Permian Basin to construct and operate two water recycling facilities supported by long-term contracts. These projects commenced operations in the first quarter and are off to very promising starts. This infrastructure streamlines our customers’ water logistics, reduces their costs and helps our customers achieve their ESG targets by reducing their environmental impact through reduced fresh water usage and reduced waste disposal. We have already seen success in further commercializing these facilities, with two more customers either currently sending or contracted to send volumes during the second quarter, and the additional pull through of various service lines related to these facilities. “We continue to look for more ways to improve the business, and in doing so, we recently completed an organizational realignment, starting with the appointment of Michael Skarke as EVP and COO. Michael has been a longtime partner of mine, having joined the Company in 2009, and has served in a number of leadership roles within the organization across both Operations and Finance. He will oversee all aspects of the operational organization with a particular emphasis on the further integration of our efforts to support the total water and fluids life cycle. This realignment will also support further commercialization of integrated solutions on a regional basis, while allowing us to more efficiently control costs, drive margin improvement and take advantage of our significant operating leverage and further our initiatives around sustainable water and chemical solutions.
“While we continue to find new and interesting ways to invest in growth, we have also further demonstrated the asset-light nature of our base business model by limiting net capex during the first quarter to $2.2 million and, accordingly, we have reduced our full year net capex guidance to $30 – $40 million, which includes $10 – $20 million of targeted growth projects. Though working capital remained a modest headwind during the first quarter, we continue to project positive free cash flow generation for the full year in 2021. “Our primary strategic objectives remain as outlined previously. We will drive value in this company, through improving and growing the base business in a recovering activity environment and advancing our leading position in integrated and sustainable full life cycle water and chemicals through our FluidMatch™ solutions, through deploying our expertise in water and chemicals across the value chain and through evaluating strategic investment opportunities and M&A. There’s a lot of opportunity out there, and I’m confident we can execute our strategy.
Adjusted EBITDA was $0.9 million in the first quarter of 2021 as compared to $10.2 million in the fourth quarter of 2020 and $23.7 million in the first quarter of 2020. Select’s consolidated Adjusted EBITDA during the first quarter of 2021 includes $5.9 million of non-recurring or non-cash adjustments, including $3.2 million of non-recurring executive severance costs, $0.7 million of non-cash losses on asset sales, $0.4 million of transaction costs, and $0.1 million in lease abandonment costs. Non-cash compensation expense accounted for an additional $1.4 million adjustment. Please refer to the end of this release for reconciliations of gross profit before D&A (non-GAAP measure) to gross profit (loss) and of Adjusted EBITDA (non-GAAP measure) to net income (loss). SG&A during the first quarter of 2021 was $19.9 million as compared to $15.5 million during the fourth quarter of 2020 and $25.3 million during the first quarter of 2020. SG&A during the first quarter of 2021 was impacted by $3.2 million of non-recurring severance costs relating to our recent CEO transition and $0.4 million of non-recurring transaction costs.
Gross loss was $4.4 million in the first quarter of 2021 as compared to a gross loss of $3.9 million in the fourth quarter of 2020 and gross profit of $15.3 million in the first quarter of 2020. Total gross margin for Select was (3.1%) in the first quarter of 2021 as compared to (3.0%) in the fourth quarter of 2020 and 5.5% in the first quarter of 2020. Gross margin before depreciation and amortization (“D&A”) for the first quarter of 2021 was 12.0% as compared to 14.5% for the fourth quarter of 2020 and 14.9% for the first quarter of 2020. Revenue for the first quarter of 2021 was $143.7 million as compared to $133.3 million in the fourth quarter of 2020 and $278.3 million in the first quarter of 2020. Net loss for the first quarter of 2021 was $27.4 million as compared to a net loss of $21.2 million in the fourth quarter of 2020 and a net loss of $291.2 million in the first quarter of 2020, which was primarily impacted by impairments of Goodwill and other items.
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