MIDLAND, Texas, Nov. 5, 2015 /PRNewswire/ -- CSI Compressco LP
(CSI Compressco or the Partnership) (NASDAQ: CCLP) today announced
third quarter 2015 consolidated results. Adjusted earnings before
interest, taxes, depreciation, and amortization (Adjusted EBITDA)
for the third quarter of 2015 were $32.0
million, with net income of $1.6
million. This compares to Adjusted EBITDA and net income
(loss) of $26.1 million and
$(2.6) million, respectively, during
the prior year period. Distributable cash flow for the quarter
ended September 30, 2015 was
$21.8 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 third quarter 2015 results include:
- Adjusted EBITDA(1) of $32.0
million.
- Record quarterly revenues of $128.9
million.
- Third quarter distribution of $0.5025 per unit, a $0.0025 increase compared to the prior quarter
and a 9% increase compared to the third quarter of 2014. This
is the ninth consecutive quarterly distribution increase and the
twelfth increase to our quarterly distribution in the past thirteen
quarters.
- 1.25x distribution coverage ratio(1) in the third
quarter.
- Total compression services fleet horsepower of 1,160,976 at
quarter end, representing net increases of 22,320 (2%) and 88,672
(8%) horsepower over prior quarter and prior year quarter
respectively.
|
Quarter
Ended
|
|
|
|
September 30,
2015
|
|
September 30,
2014
|
|
2015 vs.
2014
|
|
(In Thousands, Except
Ratios, and Percentages)
|
Adjusted
EBITDA(1)
|
$
31,978
|
|
$
26,062
|
|
23 %
|
Distributable cash
flow(1)
|
$
21,807
|
|
$
19,808
|
|
10 %
|
Cash distribution per
unit annualized
|
$
2.01
|
|
$
1.84
|
|
9 %
|
Distribution coverage
ratio(1)
|
1.25x
|
|
1.27x
|
|
—
|
Fleet capital
expenditures
|
$
15,779
|
|
$
20,508
|
|
(23%)
|
|
(1) Non-GAAP
financial measures reconciled to the nearest GAAP number later in
the release.
|
Consolidated revenues and income (loss) before tax for the
quarter ended September 30, 2015 were
$128.9 million and $2.0 million, respectively, compared to
$95.9 million and $(4.0) million in the third quarter of 2014.
Revenues during the third quarter of 2015 increased compared to the
third quarter of 2014 due to the impact of the full 2015 third
quarter including the results of the acquisition of Compressor
Systems, Inc. (CSI) compared to a partial quarter of CSI results
included in the third quarter of 2014. As of September 30, 2015, the horsepower utilization
rate of our compressor packages was 81.9% compared to 85.8% at the
end of the prior year quarter. Utilization in our over 800
horsepower category remains above 90% while utilization of our
below 800 horsepower equipment has decreased sequentially and year
over year. We define the horsepower utilization rate as the
amount of horsepower of compressor packages used to provide
services as of a particular date, divided by the total horsepower
of compressor packages in our service fleet as of such
date.
Compared to the second quarter of 2015, compression and related
services revenues in the third quarter of 2015 was unchanged at
$72.8 million, which reflects the
continued impact of low commodity prices on the demand for
production enhancement compression services as well as increased
competition and pricing pressures throughout our compression
services line. Aftermarket services revenues increased by
$2.3 million, or 50%, from the prior
quarter with a large volume of projects completed and revenue
recognized in the third quarter. Sales of equipment and parts
were up by $0.2 million in the third
quarter of 2015 over the prior quarter as we continue to complete a
backlog of projects delayed at the onset of the current downturn in
oil and gas prices and recognize the associated revenues. Our
equipment sales backlog as of the end of the third quarter was
$46.1 million, a decline of
$40.8 million compared to prior
quarter, reflecting the slowdown in upstream and midstream
investment activity as a result of depressed oil and natural gas
prices.
Unaudited results of operations for the three and nine month
periods ended September 30, 2015
compared to the corresponding prior year periods are presented in
the financial tables below.
Timothy A. Knox, President of CSI
Compressco, remarked, "We are pleased with our record quarterly
revenues and strong EBITDA performance in the third quarter, which
allowed us to stay on the path of increasing distributions while
maintaining a conservative 1.25x distribution coverage ratio.
Strong revenues in aftermarket services, recognition of equipment
sales from completed projects, and overall steady compression
services fleet performance each contributed to this positive
outcome in still a difficult and challenging
environment.
Capital investments continue to be made in the areas where fleet
utilization and demand remain strongest, especially in South Texas and the Permian Basin, with large
horsepower compression equipment additions directed primarily in
support of customer's central delivery points and gathering
systems.
In light of the continued decline in backlog and ongoing
challenges in the demand for equipment sales, CSI Compressco
continues to implement cost control initiatives to align our
manufacturing operations with the reduced activity levels, allowing
us to maximize profitability and distribution coverage ratios."
Third Quarter Distribution
On October 20, 2015, CSI
Compressco announced that the board of directors of its general
partner declared a cash distribution attributable to the third
quarter of 2015 of $0.5025 per
outstanding unit, which will be paid on November 13, 2015 to unitholders of record as of
the close of business on October 30,
2015. The distribution coverage ratio (which is a Non-GAAP
Financial Measure defined and reconciled to the closest GAAP
financial measure below) for the third quarter of 2015 was
1.25x.
Conference Call
CSI Compressco will host a conference call to discuss third
quarter 2015 results today, November 5,
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; 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 September
30,
|
|
Nine Months
Ended September
30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
(In Thousands, Except
per Unit Amounts)
|
Revenues:
|
|
|
|
|
|
|
|
Compression and
related services
|
$ 72,766
|
|
58,300
|
|
220,880
|
|
116,270
|
Aftermarket
services
|
7,013
|
|
6,595
|
|
21,134
|
|
6,595
|
Equipment and parts
sales
|
49,145
|
|
30,997
|
|
116,264
|
|
34,945
|
Total
revenues
|
128,924
|
|
95,892
|
|
358,278
|
|
157,810
|
Cost of revenues
(excluding depreciation and amortization expense):
|
|
|
|
|
|
|
|
Cost of compression
and related services
|
36,041
|
|
30,561
|
|
110,509
|
|
61,942
|
Cost of aftermarket
services
|
5,407
|
|
5,266
|
|
17,774
|
|
5,266
|
Cost of equipment and
parts sales
|
44,667
|
|
26,622
|
|
102,624
|
|
28,617
|
Total cost of
revenues
|
86,115
|
|
62,449
|
|
230,907
|
|
95,825
|
Selling, general, and
administrative expense
|
10,469
|
|
10,163
|
|
32,272
|
|
19,265
|
Depreciation and
amortization
|
20,610
|
|
13,476
|
|
61,227
|
|
20,909
|
Interest expense,
net
|
8,201
|
|
4,998
|
|
24,068
|
|
5,302
|
Other expense,
net
|
1,514
|
|
8,758
|
|
3,923
|
|
9,795
|
Income (loss) before
income tax provision
|
2,015
|
|
(3,952)
|
|
5,881
|
|
6,714
|
Provision (benefit)
for income taxes
|
396
|
|
(1,351)
|
|
1,291
|
|
(183)
|
Net income
(loss)
|
$ 1,619
|
|
$ (2,601)
|
|
$ 4,590
|
|
$ 6,897
|
|
|
|
|
|
|
|
|
Net income per
diluted common unit
|
$
0.04
|
|
$ (0.10)
|
|
$
0.10
|
|
$
0.35
|
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, 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 nine month periods ended September
30, 2015 and 2014:
|
Three Months
Ended September
30,
|
|
Nine Months
Ended September
30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
(In
Thousands)
|
Net income
|
$ 1,619
|
|
$ (2,601)
|
|
$ 4,590
|
|
$ 6,897
|
Provision for income
taxes
|
396
|
|
(1,351)
|
|
1,291
|
|
(183)
|
Depreciation and
amortization
|
20,610
|
|
13,476
|
|
61,227
|
|
20,909
|
Interest expense,
net
|
8,201
|
|
4,998
|
|
24,068
|
|
5,302
|
EBITDA
|
$ 30,826
|
|
$ 14,522
|
|
$ 91,176
|
|
$ 32,925
|
The following table reconciles EBITDA to Adjusted EBITDA for the
three and nine month periods ended September
30, 2015 and September 30,
2014:
|
Three Months
Ended September
30,
|
|
Nine Months
Ended September
30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
(In
Thousands)
|
EBITDA
|
$ 30,826
|
|
$ 14,522
|
|
$ 91,176
|
|
$ 32,925
|
Equity
Compensation
|
455
|
|
482
|
|
1,659
|
|
919
|
Amortized finance
costs
|
697
|
|
1,289
|
|
2,089
|
|
1,421
|
Transaction
costs
|
—
|
|
9,769
|
|
208
|
|
10,624
|
Adjusted
EBITDA
|
$ 31,978
|
|
$ 26,062
|
|
$ 95,132
|
|
$ 45,889
|
|
|
|
|
|
|
|
|
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 nine month
periods ended September 30, 2015 and
September 30, 2014:
|
Three Months
Ended September
30,
|
|
Nine Months
Ended September
30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
(In
Thousands)
|
Net income
|
$ 1,619
|
|
$ (2,601)
|
|
$ 4,590
|
|
$ 6,897
|
Provision for income
taxes
|
396
|
|
(1,351)
|
|
1,291
|
|
(183)
|
Depreciation and
amortization
|
20,610
|
|
13,476
|
|
61,227
|
|
20,909
|
Interest expense,
net
|
8,201
|
|
4,998
|
|
24,068
|
|
5,302
|
EBITDA
|
$ 30,826
|
|
$ 14,522
|
|
$ 91,176
|
|
$ 32,925
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
Current
income tax (expense) benefit
|
1,296
|
|
285
|
|
(33)
|
|
(1,024)
|
Maintenance capital expenditures
|
(3,665)
|
|
(1,845)
|
|
(7,869)
|
|
(2,086)
|
Interest
Expense
|
(8,201)
|
|
(4,998)
|
|
(24,068)
|
|
(5,302)
|
Plus:
|
|
|
|
|
|
|
|
Non-cash
cost of compressors sold
|
399
|
|
304
|
|
605
|
|
371
|
Equity
Compensation
|
455
|
|
482
|
|
1,659
|
|
919
|
Amortization of finance costs
|
697
|
|
1,289
|
|
2,089
|
|
1,421
|
Transaction related expenses
|
—
|
|
9,769
|
|
208
|
|
10,624
|
Distributable cash
flow
|
21,807
|
|
19,808
|
|
63,767
|
|
37,848
|
|
|
|
|
|
|
|
|
Cash distribution
attributable to period
|
$ 17,405
|
|
$ 15,631
|
|
$ 51,796
|
|
$ 29,898
|
|
|
|
|
|
|
|
|
Distribution coverage
ratio
|
1.25x
|
|
1.27x
|
|
1.23x
|
|
1.27x
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/csi-compressco-lp-announces-third-quarter-2015-results-300172902.html
SOURCE CSI Compressco LP