MIDLAND, Texas, Aug. 6, 2015 /PRNewswire/ -- CSI Compressco
LP (CSI Compressco or the Partnership) (NASDAQ: CCLP) today
announced second quarter 2015 consolidated results. Adjusted
earnings before interest, taxes, depreciation, and amortization
(Adjusted EBITDA) for the second quarter of 2015 were $31.5 million, with net income of $1.2 million. This compares to Adjusted EBITDA
and net income of $10.4 million and
$4.9 million, respectively, during
the prior year period. Distributable cash flow for the quarter
ended June 30, 2015 was $20.6 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 second quarter 2015 results include:
- Adjusted EBITDA of $31.5 million,
more than triple the second quarter of 2014 reflecting the benefit
of the acquisition of Compressor Systems, Inc.
("CSI").(1)
- Equipment and Parts Sales of $49.0
million, an increase of $30.8
million over first quarter 2015.
- Record quarterly revenue of $126.5
million.
- A second quarter distribution that is 10% higher than the
distribution announced for the second quarter of 2014. The 2015
second quarter distribution, with a 1.19x coverage ratio, is the
eighth consecutive increase and the eleventh increase in the past
twelve quarters.
- Quarter end compression fleet horsepower of 1,138,656 total and
952,442 utilized, representing net increases of 92,736 (9%) and
50,847 (6%) horsepower, respectively, over June 30, 2014 on a pro forma
basis.(2)
|
Quarter
Ended
|
|
2015 vs.
2014
|
|
June 30,
2015
|
|
June 30,
2014
|
|
|
(In Thousands, Except
Ratios, and Percentages)
|
Adjusted
EBITDA(1)
|
$
|
31,479
|
|
|
$
|
10,399
|
|
|
203
|
%
|
Distributable cash
flow(1)
|
$
|
20,568
|
|
|
$
|
9,378
|
|
|
119
|
%
|
Cash distribution per
unit annualized
|
$
|
2.00
|
|
|
$
|
1.81
|
|
|
10
|
%
|
Distribution coverage
ratio(1)
|
|
1.19x
|
|
|
|
1.30x
|
|
|
—
|
|
Fleet capital
expenditures
|
$
|
19,610
|
|
|
$
|
5,366
|
|
|
265
|
%
|
|
|
(1)
|
Non-GAAP financial
measures reconciled to the nearest GAAP number later in the
release.
|
(2)
|
Pro forma combined
for pre-acquisition CSI and Compressco Partners, L.P.
|
Consolidated revenues and income before tax for the quarter
ended June 30, 2015 were $126.5 million and $1.5
million, respectively, compared to $32.1 million and $5.4
million in the second quarter of 2014. Revenues during the
second quarter of 2015 compared to the second quarter of 2014
significantly increased due to the acquired operations of CSI,
which generated aggregate revenues of $96.3
million during the second quarter of 2015. As of
June 30, 2015, the fleet utilization
rate was 83.6% compared to 86.2% in the prior year period on a pro
forma basis for pre-acquisition CSI and Compressco Partners,
L.P. Utilization in our higher horsepower category remains
above 90% while utilization of lower horsepower production
enhancement equipment has decreased sequentially and year over
year. 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 first quarter of 2015, compression and related
services revenues decreased $2.5
million in the second quarter, which is largely attributable
to the impact of commodity prices on the demand for, and increased
competition in, production enhancement compression services
applications as well as pricing pressures throughout our
compression services line. Aftermarket services revenues
decreased $4.8 million from the prior
quarter following a large volume of project recognition in the
first quarter combined with a reduction in customer spending.
Sales of equipment and parts increased by $30.8 million, partially driven by recognition of
certain revenues in the second quarter that were originally
anticipated in the prior quarter. Our equipment sales backlog
ended the quarter at $86.9 million, a
decline of $28.4 million compared to
the prior quarter, reflecting the slowdown in upstream and
midstream investment activity as a result of depressed hydrocarbon
prices.
Unaudited results of operations for the three and six month
periods ended June 30, 2015 compared
to the prior year periods are presented in the financial tables
below.
Timothy A. Knox, President of CSI
Compressco, remarked, "With on-going weakness and volatility in the
oil and gas industry, we will continue to focus on serving our
customers while controlling costs, challenging our employees, and
delivering on the expectations of our investors. As we
celebrate the first anniversary of the combined business, we are
pleased to have recently announced the eighth consecutive increase
to our quarterly distribution and the eleventh increase in the last
twelve quarters.
We are continuing to invest in the higher horsepower portion of
our compression services fleet, which is targeted at gathering and
midstream applications where we have higher current utilization and
generally experience greater and more consistent demand as well as
higher contribution margins.
Results through the second quarter give us confidence in our
previous revenue guidance of $460 to $480
million for the full year. We are reducing our
previous guidance on income before taxes to a range of $6 to $10 million, and EBITDA to a range of
$120 to $130 million for the full
year. We expect adjusted EBITDA, which is EBITDA exclusive of
equity compensation, CSI transaction related expenses and amortized
finance costs, to be in the range of $125 to
$135 million. With continued high utilization of our
over 800 horsepower compression services equipment in
production-focused gathering and midstream applications, we are
increasing anticipated CAPEX for 2015 to $105 million and now forecasting 2015
depreciation and amortization at $82
million."
Second Quarter Distribution
On July 21, 2015, CSI Compressco
announced that the board of directors of its general partner
declared a cash distribution attributable to the second quarter of
2015 of $0.50 per outstanding unit,
which will be paid on August 14, 2015
to unitholders of record as of the close of business on
July 31, 2015. The distribution
coverage ratio (which is a Non-GAAP Financial Measure defined and
reconciled to the closest GAAP financial measure below) for the
second quarter of 2015 was 1.19x.
Conference Call
CSI Compressco will host a conference call to discuss second
quarter 2015 results today, August 6,
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.
CSI Compressco Overview
CSI Compressco LP 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
6,500 compressor packages providing in excess of 1.1 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 CSI; 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
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
(In Thousands, Except
per Unit Amounts)
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
Compression and related services
|
$
|
72,826
|
|
|
$
|
30,043
|
|
|
$
|
148,114
|
|
|
$
|
57,970
|
|
Aftermarket services
|
4,671
|
|
|
—
|
|
|
14,121
|
|
|
—
|
|
Equipment and parts sales
|
48,968
|
|
|
2,065
|
|
|
67,119
|
|
|
3,948
|
|
Total
revenues
|
126,465
|
|
|
32,108
|
|
|
229,354
|
|
|
61,918
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues
(excluding depreciation and amortization)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
compression and related services
|
37,490
|
|
|
16,227
|
|
|
74,468
|
|
|
31,381
|
|
Cost of
aftermarket services
|
4,195
|
|
|
—
|
|
|
12,367
|
|
|
—
|
|
Cost of
equipment and parts sales
|
43,000
|
|
|
1,066
|
|
|
57,957
|
|
|
1,995
|
|
Total cost of
revenues
|
84,685
|
|
|
17,293
|
|
|
144,792
|
|
|
33,376
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general, and
administrative expense
|
10,554
|
|
|
5,008
|
|
|
21,803
|
|
|
9,102
|
|
Depreciation and
amortization
|
20,629
|
|
|
3,751
|
|
|
40,617
|
|
|
7,433
|
|
Interest expense,
net
|
7,961
|
|
|
145
|
|
|
15,867
|
|
|
304
|
|
Other (income)
expense, net
|
1,170
|
|
|
498
|
|
|
2,409
|
|
|
1,037
|
|
Income before tax
provision
|
1,466
|
|
|
5,413
|
|
|
3,866
|
|
|
10,666
|
|
Provision for income
taxes
|
303
|
|
|
534
|
|
|
895
|
|
|
1,168
|
|
Net income
|
$
|
1,163
|
|
|
$
|
4,879
|
|
|
$
|
2,971
|
|
|
$
|
9,498
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
diluted common unit
|
$
|
0.02
|
|
|
$
|
0.30
|
|
|
$
|
0.07
|
|
|
$
|
0.59
|
|
Reconciliation of Non-GAAP Financial Measures
The Partnership 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
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 the Partnership's 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 amortized finance 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 believes that the distribution coverage ratio 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 total
quarterly distribution payable, which includes, as applicable,
distributions payable on all outstanding common and subordinated
units, the general partner interest, and the general partner's
incentive distribution rights.
These non-GAAP financial measures should not be considered
alternatives 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, Adjusted 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 the Partnership.
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 the Partnership 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 and six month periods ended June 30,
2015 and 2014:
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
(In
Thousands)
|
Net income
|
$
|
1,163
|
|
|
$
|
4,879
|
|
|
$
|
2,971
|
|
|
$
|
9,498
|
|
Provision for income
taxes
|
303
|
|
|
534
|
|
|
895
|
|
|
1,168
|
|
Depreciation and
amortization
|
20,629
|
|
|
3,751
|
|
|
40,617
|
|
|
7,433
|
|
Interest expense,
net
|
7,961
|
|
|
145
|
|
|
15,867
|
|
|
304
|
|
EBITDA
|
$
|
30,056
|
|
|
$
|
9,309
|
|
|
$
|
60,350
|
|
|
$
|
18,403
|
|
The following table reconciles EBITDA to Adjusted EBITDA for the
three and six month periods ended June 30,
2015 and June 30, 2014:
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
(In
Thousands)
|
EBITDA
|
$
|
30,056
|
|
|
$
|
9,309
|
|
|
$
|
60,350
|
|
|
$
|
18,403
|
|
Equity
compensation
|
727
|
|
|
235
|
|
|
1,204
|
|
|
437
|
|
Amortized finance
costs
|
696
|
|
|
—
|
|
|
1,392
|
|
|
—
|
|
CSI transaction
costs
|
—
|
|
|
855
|
|
|
208
|
|
|
855
|
|
Adjusted
EBITDA
|
$
|
31,479
|
|
|
$
|
10,399
|
|
|
$
|
63,154
|
|
|
$
|
19,695
|
|
|
|
|
|
|
|
|
|
CSI transaction
related costs in SG&A
|
$
|
—
|
|
|
$
|
855
|
|
|
$
|
208
|
|
|
$
|
855
|
|
The following table reconciles net income to distributable cash
flow and distribution coverage ratio for the three and six month
periods ended June 30, 2015 and
June 30, 2014:
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
(In Thousands, Except
Ratio)
|
Net income
|
$
|
1,163
|
|
|
$
|
4,879
|
|
|
$
|
2,971
|
|
|
$
|
9,498
|
|
Provision for income
taxes
|
303
|
|
|
534
|
|
|
895
|
|
|
1,168
|
|
Depreciation and
amortization
|
20,629
|
|
|
3,751
|
|
|
40,617
|
|
|
7,433
|
|
Interest expense,
net
|
7,961
|
|
|
145
|
|
|
15,867
|
|
|
304
|
|
EBITDA
|
30,056
|
|
|
9,309
|
|
|
60,350
|
|
|
18,403
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
Current income tax
expense
|
917
|
|
|
742
|
|
|
1,329
|
|
|
1,309
|
|
Maintenance capital
expenditures
|
2,033
|
|
|
201
|
|
|
4,204
|
|
|
241
|
|
Interest
expense
|
7,961
|
|
|
145
|
|
|
15,867
|
|
|
304
|
|
Plus:
|
|
|
|
|
|
|
|
Non-cash cost of
compressors sold
|
—
|
|
|
67
|
|
|
206
|
|
|
67
|
|
Equity
compensation
|
727
|
|
|
235
|
|
|
1,204
|
|
|
437
|
|
Amortization of
finance costs
|
696
|
|
|
—
|
|
|
1,392
|
|
|
—
|
|
CSI transaction
related expenses
|
—
|
|
|
855
|
|
|
208
|
|
|
855
|
|
Distributable cash
flow
|
$
|
20,568
|
|
|
$
|
9,378
|
|
|
$
|
41,960
|
|
|
$
|
17,908
|
|
Cash distribution
attributable to period
|
$
|
17,293
|
|
|
$
|
7,205
|
|
|
$
|
34,391
|
|
|
$
|
14,267
|
|
|
|
|
|
|
|
|
|
Distribution coverage
ratio
|
1.19x
|
|
1.30x
|
|
1.22x
|
|
1.26x
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/csi-compressco-lp-announces-second-quarter-2015-results-and-updates-2015-guidance-300124636.html
SOURCE CSI Compressco LP