MIDLAND, Texas, May 7, 2015 /PRNewswire/ -- CSI Compressco
LP (CSI Compressco or the Partnership) (NASDAQ: CCLP) today
announced first quarter 2015 consolidated results. Adjusted
earnings before interest, taxes, depreciation, and amortization
(Adjusted EBITDA) for the first quarter of 2015 were $31.2 million, with net income of $1.8 million. This compares to Adjusted EBITDA
and net income of $9.3 million and
$4.6 million, respectively, during
the prior year period. Distributable cash flow for the quarter
ended March 31, 2015 was $21.4 million (Adjusted EBITDA and distributable
cash flow are non-GAAP financial measures that are defined and
reconciled to the nearest GAAP financial measures later in the
release).
Highlights of the first quarter 2015 results include:
- Quarter end compression fleet utilized horsepower of 968,978, a
net increase of 106,638 horsepower (12%) from March 31, 2014 on a pro forma
basis.(1)
- Quarter end compression fleet utilization of 86.4%, a 2.7%
increase from March 31, 2014 on a pro
forma basis.(1)
- Increased revenues of $73.1
million, including $71.3
million in revenues contributed by the acquired business of
Compressor Systems, Inc. (CSI), compared to the first quarter of
2014.
- 11% increase in quarterly distribution, to $0.495 per common unit, compared to the first
quarter of 2014. This is the tenth distribution increase in
eleven quarters.
- CCLP has been added to the Alerian Natural Gas MLP Index.
|
Quarter
Ended
|
|
2015 vs.
2014
|
|
March 31,
2015
|
|
March 31,
2014
|
|
|
(In Thousands, Except
Ratios, Fleet Horsepower, and Percentages)
|
Adjusted
EBITDA(2)
|
$
|
31,178
|
|
|
$
|
9,296
|
|
|
235
|
%
|
Distributable cash
flow(2)
|
$
|
21,392
|
|
|
$
|
8,530
|
|
|
151
|
%
|
Cash distribution per
unit
|
$
|
0.495
|
|
|
$
|
0.445
|
|
|
11
|
%
|
Distribution coverage
ratio(2)
|
1.25x
|
|
|
1.21x
|
|
|
3
|
%
|
Capital
expenditures
|
$
|
37,158
|
|
|
$
|
6,004
|
|
|
519
|
%
|
|
|
(1)
|
Pro forma combined
for pre-acquisition CSI and Compressco Partners, L.P.
|
(2)
|
Non-GAAP financial
measures reconciled to the nearest GAAP number later in the
release.
|
Consolidated revenues and income before tax for the quarter
ended March 31, 2015 were
$102.9 million and $2.4 million, respectively, compared to
$29.8 million and $5.3 million in the first quarter of 2014.
Results of operations for the first quarter of 2015 compared to the
first quarter of 2014 reflect $71.3
million in additional revenues from CSI including
$44.4 million in compression and
related services revenues, $9.5
million in aftermarket services revenues, and $17.4 million in equipment and parts sales
revenues. As of March 31, 2015
the fleet utilization rate was 86.4%, up 2.7% compared to 83.7% in
the prior year period. We define the fleet utilization rate
as the total compressor package horsepower in service divided by
the aggregate compressor package fleet horsepower as of a given
date.
Compared to the fourth quarter of 2014, compression and related
services revenues decreased $0.6
million, which is largely attributable to reduced
international activity. Aftermarket services revenues increased
$0.4 million due to several large
projects. Sales of equipment and parts declined by $21.8 million, as certain planned first quarter
shipments moved into the second and third quarters of 2015 due to
project delays and customer requests to delay delivery. Our
equipment sales backlog ended the quarter at $115 million.
Unaudited results of operations for the three month period ended
March 31, 2015 compared to the prior
year period are presented in the accompanying financial tables.
Timothy A. Knox, President of CSI
Compressco, remarked, "I am pleased with our performance for the
quarter given the significant downturn in the oil and gas
industry. For the tenth time in the past eleven quarters
we have increased our quarterly distribution per common
unit.
"Revenues and profitability are below our fourth quarter 2014
levels primarily due to reduced equipment and part sales. We
have experienced delays on several projects, the majority of which
were due to changes at the request of our customers. This is
a great example of our being responsive to the needs of our
customers as we work with them to achieve their goals in this
current commodity price cycle.
"Our compression fleet utilization rate declined from 87.7% at
December 31, 2014, finishing the
first quarter of 2015 at 86.4%. Taking into consideration the
32,648 horsepower increase in fleet size for the quarter, we
actually increased utilized horsepower by almost 14,000 to 968,978
horsepower. The majority of our fleet additions were in the larger
horsepower range, providing services to gas gathering systems and
central delivery points, primarily in South Texas and Permian Basin markets where
activity remains more robust. Given the current pressures in the
oil and gas industry, decreased utilization was not
unexpected."
CSI Compressco will host a conference call to discuss first
quarter 2015 results today, May 7,
2015, at 10:30 a.m. Eastern
Time. The phone number for the call is 866/374-8397. The
conference will also be available by live audio webcast and may be
accessed through the CSI Compressco website at
www.csicompressco.com.
On April 21, 2015, CSI Compressco
announced that the board of directors of its general partner
declared a cash distribution attributable to the first quarter of
2015 of $0.495 per outstanding unit,
which will be paid on May 15, 2015 to
unitholders of record as of the close of business on May 1, 2015. The distribution coverage ratio
(which is a Non-GAAP Financial Measure defined and reconciled to
the closest GAAP financial measure below) for the first quarter of
2015 was 1.25x.
CSI Compressco is a provider of compression services and
equipment for natural gas and oil production, gathering,
transportation, processing, and storage. CSI Compressco's
compression and related services business includes a fleet of over
6,000 compressor packages providing in excess of 1.0 million in
aggregate horsepower, utilizing a full spectrum of low-, medium-,
and high-horsepower engines. CSI Compressco also provides well
monitoring and automated sand separation services in conjunction
with compression services in Mexico. CSI Compressco's equipment and parts
sales business includes the fabrication and sale of standard
compressor packages, custom-designed compressor packages, and
oilfield fluid pump systems designed and fabricated primarily at
our facilities in Midland, Texas
and Oklahoma City, Oklahoma, as
well as the sale of compressor package parts and components
manufactured by third-party suppliers. CSI Compressco's aftermarket
services business provides compressor package reconfiguration and
maintenance services. CSI Compressco's customers comprise a broad
base of natural gas and oil exploration and production, mid-stream,
transmission, and storage companies operating throughout many of
the onshore producing regions of the
United States as well as in a number of foreign countries,
including Mexico, Canada, and Argentina. CSI Compressco is managed by CSI
Compressco GP Inc., which is an indirect, wholly owned subsidiary
of TETRA Technologies, Inc. (NYSE: TTI).
Forward Looking Statements
This press release contains "forward-looking statements" and
information based on our beliefs and those of our general partner,
CSI Compressco GP Inc. Forward-looking statements in this press
release are identifiable by the use of the following words and
other similar words: "anticipates", "assumes", "believes",
"budgets", "could", "estimates", "expects", "forecasts", "goal",
"intends", "may", "might", "plans", "predicts", "projects",
"schedules", "seeks", "should, "targets", "will" and "would".
These forward-looking statements include statements concerning
expected results of operations for 2015, anticipated benefits and
growth of CSI Compressco LP following the acquisition of Compressor
Systems, Inc. (CSI), including increases in cash distributions per
unit, financial guidance, estimated distributable cash, earnings,
and earnings per unit, and statements regarding CSI Compressco's
beliefs, expectations, plans, goals, future events and performance,
and other statements that are not purely historical. Such
forward-looking statements reflect our current views with respect
to future events and financial performance and are based on
assumptions that we believe to be reasonable but such
forward-looking statements are subject to numerous risks and
uncertainties, including, but not limited to: economic and
operating conditions that are outside of our control, including the
supply, demand, and prices of crude oil and natural gas; the levels
of competition we encounter; the activity levels of our customers;
the availability of adequate sources of capital to us; our ability
to comply with contractual obligations, including those under our
financing arrangements; our operational performance; risks related
to acquisitions and our growth strategy, including our recent
acquisition of Compressor Systems, Inc.; the availability of raw
materials and labor at reasonable prices; risks related to our
foreign operations; the effect and results of litigation,
regulatory matters, settlements, audits, assessments, and
contingencies; and other risks and uncertainties contained in our
Annual Report on Form 10-K and our other filings with the U.S.
Securities and Exchange Commission ("SEC"), which are available
free of charge on the SEC website at www.sec.gov. The risks and
uncertainties referred to above are generally beyond our ability to
control and we cannot predict all the risks and uncertainties that
could cause our actual results to differ from those indicated by
the forward-looking statements. If any of these risks or
uncertainties materialize, or if any of the underlying assumptions
prove incorrect, actual results may vary from those indicated by
the forward-looking statements, and such variances may be material.
All subsequent written and oral forward-looking statements made by
or attributable to us or to persons acting on our behalf are
expressly qualified in their entirety by reference to these risks
and uncertainties. You should not place undue reliance on
forward-looking statements. Each forward-looking statement speaks
only as of the date of the particular statement, and we undertake
no obligation to update or revise any forward-looking statements we
may make, except as may be required by law.
Results of operations
(unaudited)
|
|
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2015
|
|
2014
|
|
(In
Thousands)
|
Revenues
|
|
|
|
Compression and related services
|
$
|
75,288
|
|
|
$
|
27,927
|
|
Aftermarket services
|
|
9,450
|
|
|
|
-
|
|
Equipment and parts sales
|
18,151
|
|
|
1,883
|
|
Total
revenues
|
102,889
|
|
|
29,810
|
|
|
|
|
|
Cost of revenues
(excluding depreciation and amortization expense)
|
|
|
Cost of
compression and related services
|
36,978
|
|
|
15,154
|
|
Cost of
aftermarket services
|
8,172
|
|
|
-
|
|
Cost of
equipment and parts sales
|
14,957
|
|
|
929
|
|
Total cost of
revenues
|
60,107
|
|
|
16,083
|
|
|
|
|
|
Selling, general, and
administrative expense
|
11,249
|
|
|
4,094
|
|
Depreciation and
amortization
|
19,988
|
|
|
3,682
|
|
Interest expense,
net
|
7,906
|
|
|
159
|
|
Other (income)
expense, net
|
1,239
|
|
|
539
|
|
Income before tax
provision
|
2.400
|
|
|
5,253
|
|
Provision for income
taxes
|
592
|
|
|
634
|
|
Net income
|
|
1,808
|
|
|
$
|
4,619
|
|
|
|
|
|
Net income per
diluted common unit
|
$
|
0.04
|
|
|
$
|
0.29
|
|
Reconciliation of Non-GAAP Financial Measures
CSI Compressco includes in this release the non-GAAP financial
measures EBITDA, Adjusted EBITDA, distributable cash flow and
distribution coverage ratio. EBITDA and Adjusted EBITDA are used as
a supplemental financial measures by the Partnership's management
to:
- assess the Partnership's ability to generate available cash
sufficient to make distributions to the Partnership's unitholders
and general partner;
- evaluate the financial performance of its assets without regard
to financing methods, capital structure or historical cost
basis;
- measure operating performance and return on capital as compared
to those of our competitors; and
- determine the Partnership's ability to incur and service debt
and fund capital expenditures.
The Partnership defines EBITDA as earnings before interest,
taxes, depreciation and amortization. Adjusted EBITDA is defined as
EBITDA excluding equity compensation, CSI related transaction
costs, and severance costs.
Distributable cash flow is used as a supplemental financial
measure by the Partnership's management as it provides important
information relating to the relationship between our financial
operating performance and our cash distribution capability.
Additionally, the Partnership uses distributable cash flow in
setting forward expectations and in communications with the board
of directors of our general partner. The Partnership defines
distributable cash flow as EBITDA less current income tax expense,
maintenance capital expenditures, and interest expense, plus the
non-cash cost of compressors sold, non-cash charges and losses that
are unusual or non-recurring, and equity compensation expense. The
Partnership also calculates the ratio of distributable cash flow to
the total cash distributed (the distribution coverage ratio) as it
provides important information relating to the relationship between
the Partnership's financial operating performance and its cash
distribution capability. The Partnership defines the distribution
coverage ratio as the ratio of distributable cash flow to the
quarterly distribution payable on all outstanding common and
subordinated units and the general partner interest.
These non-GAAP financial measures should not be considered an
alternative to net income, operating income, cash flows from
operating activities or any other measure of financial performance
presented in accordance with GAAP. These non-GAAP financial
measures may not be comparable to EBITDA, distributable cash flow
or other similarly titled measures of other entities, as other
entities may not calculate these non-GAAP financial measures in the
same manner as CSI Compressco. Management compensates for the
limitation of these non-GAAP financial measures as an analytical
tool by reviewing the comparable GAAP measures, understanding the
differences between the measures and incorporating this knowledge
into management's decision making process. Furthermore, these
non-GAAP measures should not be viewed as indicative of the actual
amount of cash that CSI Compressco has available for distributions
or that the Partnership plans to distribute for a given period, nor
should they be equated to available cash as defined in the
Partnership's partnership agreement.
The following table reconciles net income to EBITDA for the
three month periods ended March 31,
2015 and 2014:
|
Three Months
Ended
|
|
March
31,
|
|
2015
|
|
2014
|
|
(In
Thousands)
|
Net income
|
$
|
1,808
|
|
|
$
|
4,619
|
|
Provision for income
taxes
|
592
|
|
|
634
|
|
Depreciation and
amortization
|
19,988
|
|
|
3,682
|
|
Interest (income)
expense, net
|
7,906
|
|
|
159
|
|
EBITDA
|
$
|
30,294
|
|
|
$
|
9,094
|
|
The following table reconciles EBITDA to Adjusted EBITDA for the
three month periods ended March 31,
2015 and March 31, 2014:
|
Three Months
Ended
|
|
March 31,
2015
|
|
March 31,
2014
|
|
(In
Thousands)
|
EBITDA
|
$
|
30,294
|
|
|
$
|
9.094
|
|
Equity
compensation
|
477
|
|
|
202
|
|
CSI transaction
related expenses
|
208
|
|
|
—
|
|
Severance
|
199
|
|
|
—
|
|
Adjusted
EBITDA
|
$
|
31,178
|
|
|
$
|
9,296
|
|
|
|
|
|
CSI transaction
related costs in SG&A
|
$
|
208
|
|
|
$
|
—
|
|
The following table reconciles net income to distributable cash
flow and distribution coverage ratio for the three month periods
ended March 31, 2015 and March 31, 2014:
|
Three Months
Ended
|
|
March 31,
2015
|
|
March 31,
2014
|
|
(In Thousands, Except
Ratio)
|
Net income
|
$
|
1,808
|
|
|
$
|
4,619
|
|
Provision for income
taxes
|
592
|
|
|
634
|
|
Depreciation and
amortization
|
19,988
|
|
|
3,682
|
|
Interest (income)
expense, net
|
7,906
|
|
|
159
|
|
EBITDA
|
30,294
|
|
|
9,094
|
|
|
|
|
|
Less:
|
|
|
|
Current income tax
benefit (expense)
|
412
|
|
|
567
|
|
Maintenance capital
expenditures
|
2,171
|
|
|
40
|
|
Interest
expense
|
7,906
|
|
|
159
|
|
Plus:
|
|
|
|
Non-cash cost of
compressors sold
|
206
|
|
|
—
|
|
Equity
compensation
|
477
|
|
|
202
|
|
Amortization of
finance costs
|
696
|
|
|
—
|
|
CSI transaction
related expenses
|
208
|
|
|
—
|
|
Distributable cash
flow
|
$
|
21,392
|
|
|
$
|
8,530
|
|
|
|
|
|
Cash distribution
attributable to period
|
$
|
17,051
|
|
|
$
|
7,062
|
|
|
|
|
|
Distribution coverage
ratio
|
1.25x
|
|
|
1.21x
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/csi-compressco-lp-announces-first-quarter-2015-results-300079296.html
SOURCE CSI Compressco LP