Equity

6 Months Ended

Jun. 30, 2020

Equity

Equity

9.    Equity

Dividends

Solaris LLC paid distributions totaling $4,755 and $4,758 to all Solaris LLC unitholders in the three months ended June 30, 2020 and 2019, respectively, of which $3,087 and $3,164 was paid to Solaris Inc. Solaris LLC paid distributions totaling $9,507 and $9,515 to all Solaris LLC unitholders in the six months ended June 30, 2020 and 2019, respectively, of which $6,176 and $6,280 was paid to Solaris Inc. Solaris Inc. used the proceeds from the distributions to pay quarterly cash dividends to all holders of shares of Class A common stock.

Share Repurchase Program

During the three months ended March 31, 2020, Solaris Inc. purchased and retired 2,374,092 shares of the Company’s Class A common stock for $26,746, or $11.27 average price per share, and, in connection therewith, Solaris LLC purchased and retired 2,374,092 Solaris LLC Units from the Company for the same amount. During the full share repurchase plan, Solaris Inc. purchased and retired 2,626,022 shares of the Company’s Class A common stock for $30,000, or $11.41 average price per share, and, in connection therewith, Solaris LLC purchased and retired 2,626,022 Solaris LLC Units from the Company for the same amount. As of March 31, 2020, the share repurchase plan was completed.

Treasury Stock Retirement

During the six months ended June 30, 2020, the Company cancelled and retired, 207,382 shares of treasury stock. No shares were retired during the three and six months ended June 30, 2019.

Stock-based compensation

The Company’s long-term incentive plan for employees, directors and consultants (the “LTIP”) provides for the grant of all or any of the following types of equity-based awards: (1) incentive stock options qualified as such under United States federal income tax laws; (2) stock options that do not qualify as incentive stock options; (3) stock appreciation rights; (4) restricted stock awards; (5) restricted stock units; (6) bonus stock; (7) performance awards; (8) dividend equivalents; (9) other stock-based awards; (10) cash awards; and (11) substitute awards.

Subject to adjustment in accordance with the terms of the LTIP, 5,118,080 shares of Solaris Inc.’s Class A common stock have been reserved for issuance pursuant to awards under the LTIP. As of June 30, 2020, 3,538,005 stock awards were available for grant.

The following table summarizes activity related to restricted stock for the three and six months ended June 30, 2020 and 2019:

	Restricted Stock Awards
	2020	2019
Unvested at January 1,	627,251	411,497
Awarded	386,146	375,068
Vested	(141,700)	(706)
Forfeited	(32,845)	(405)
Unvested at March 31,	838,852	785,454
Awarded	10,194	29,847
Vested	(80,203)	(67,674)
Forfeited	(37,164)	(7,896)
Unvested at June 30,	731,679	739,731

Of the unvested 731,679 shares restricted stock, it is expected that 102,164 shares, 264,046 shares, 249,839 shares, and 115,630 shares will vest in 2020, 2021, 2022 and 2023, respectively, in each case, subject to the applicable vesting terms governing such shares of restricted stock. There was approximately $6,918 of unrecognized compensation expense related to unvested restricted stock as of June 30, 2020. The unrecognized compensation expense will be recognized over the weighted average remaining vesting period of 2.6 years.

Earnings Per Share

Basic earnings per share of Class A common stock is computed by dividing net income attributable to Solaris Inc. by the weighted-average number of shares of Class A common stock outstanding during the same period. Diluted earnings per share is computed giving effect to all potentially dilutive shares.

The following table sets forth the calculation of earnings per share, or EPS, for the three months ended June 30, 2020 and 2019:

	Three Months Ended June 30,				Six Months Ended June 30,
Basic net income per share:	2020		2019		2020		2019
Numerator
Net income (loss) attributable to Solaris	$	(5,540)	$	13,275	$	(24,623)	$	25,592
Loss (income) attributable to participating securities (1)		—		(322)		—		(575)
Net income (loss) attributable to common stockholders	$	(5,540)	$	12,953	$	(24,623)	$	25,017
Denominator
Weighted average number of unrestricted outstanding common shares used to calculate basic net income per share		28,638		30,609		28,975		29,326
Effect of dilutive securities:
Stock options		—		35		—		61
Diluted weighted-average shares of Class A common stock outstanding used to calculate diluted net income per share		28,638		30,644		28,975		29,387
Earnings per share of Class A common stock - basic	$	(0.20)	$	0.42	$	(0.85)	$	0.85
Earnings per share of Class A common stock - diluted	$	(0.20)	$	0.42	$	(0.85)	$	0.85

(1) The Company’s restricted shares of common stock are participating securities.

The following number of weighted-average potentially dilutive shares were excluded from the calculation of diluted earnings per share because the effect of including such potentially dilutive shares would have been antidilutive upon conversion:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Class B common stock		15,856		16,202		15,889		17,450
Restricted stock awards		761		231		726		71
Stock Options		13		—		17		—
Total		16,630		16,433		16,632		17,521