Cypress Energy Partners, L.P. (“CELP”)
(NYSE:CELP) today reported:
- Forty new inspection customers added in
2017, seven of which CELP won in the fourth quarter;
- 30.2% increase in Net Income
Attributable to Limited Partners in the fourth quarter compared
with the corresponding period in 2016;
- $24.5 million of cash as of December
31, 2017 (on a consolidated basis), an increase of 27.4% from the
third quarter of 2017;
- Coverage ratio of 1.28x, down slightly
from the ratio of 1.37x in the third quarter of 2017;
- Cash distribution of $0.21 per unit,
consistent with the last three quarters; and
- New three-year credit facility and
commitment to invest up to $50.0 million in equity to deleverage
balance sheet.
Peter C. Boylan III, CELP’s Chairman and Chief Executive
Officer, stated, “2017 represented a turning point for CELP
relative to the bottom of the downturn experienced in the second
quarter of 2016. For our Pipeline Inspection Services and Integrity
Services segments, revenues, margins, and margin percentages were
higher in the second half of 2017 than they were in the first half
of 2017. This is generally consistent with the seasonality inherent
in our business, in which the third and fourth quarters of each
year are generally the strongest quarters of the annual business
cycle due to weather, fourth quarter holidays, and our clients’
budgeting cycles. During 2017, customer spending was generally
higher than the prior year and many new projects have been
announced by several clients. Demand remains strong for inspection
and integrity services. Pipeline Inspection and Integrity services
represented approximately 97% of our revenues and approximately 85%
of our gross margin in 2017.”
Mr. Boylan continued, “Revenues from our 51%-owned Integrity
Services segment were higher in the fourth quarter of 2017 compared
with the third quarter of 2017, as our utilization rate
significantly improved, and our backlog increased. We continue to
bid on a substantial amount of upcoming work and remain focused on
winning more of these bids. We ended 2017 with a backlog of over
$2.8 million, which was materially higher than the backlog at
December 31, 2016. We are also continuing to evolve our business
strategy to focus more on maintenance and integrity work directly
for the owners of pipelines, as opposed to new construction work
that can frequently get delayed for various reasons.
“Revenues from our Water & Environmental Services segment
were 15.3% higher in the fourth quarter of 2017 than in the third
quarter of 2017, despite two facilities that have not yet reopened
following lightning strikes and fires in 2017. Our Orla facility in
Reeves County, Texas in the Delaware basin will reopen for regular
business in the next 30 days. In January 2018, we completed two
pipelines that connect large multi-well pads into one of our
facilities in the Bakken for a large public energy company who
provided us with a long-term contract and acreage dedications. In
2018, we plan to focus on additional midstream pipeline water
opportunities.
“We continue to search for attractive acquisition opportunities
to supplement our organic growth opportunities. In 2017, our team
considered over twenty-five potential acquisition opportunities in
a very competitive environment. In January 2018, we terminated
discussions on a large opportunity in the Permian. Future areas of
focus continue to be inspection and integrity services, traditional
midstream opportunities, chemicals, and logistics. Our sponsor and
its affiliates remain willing to deploy capital to assist us in
acquiring attractive assets that may be larger than what we can
currently acquire independently, with plans to offer those assets
to us as drop-down opportunities. We remain focused on a
disciplined and conservative approach to evaluating acquisition
opportunities and believe that patience and perseverance will
ultimately be rewarded.
“We continue to believe the long-term increasing demand for
inspection and integrity services and water solutions remains
solid, despite our relatively slow pace of recovery from the
multi-year downturn. Our business is less correlated to drilling
rig counts than many other service companies.”
Refinancing
In March 2018, CELP successfully negotiated commitments for a
new three-year credit facility with its existing bank group to
replace the current facility that expires later this year. The new
$80.0 million credit facility also has a $20.0 million accordion
feature (for a total of $100.0 million), exclusive of other banks
that may yet join the credit facility. Under the new credit
facility, CELP will borrow at closing 3.75x its trailing
twelve-month adjusted EBITDA as defined in the new credit
agreement. The new facility would have customary covenants,
including but not limited to, a maximum leverage ratio of 4.0x
adjusted EBITDA and a minimum interest coverage ratio of 3.0x
adjusted EBITDA. The details will be included in our 10-K filing.
The bank group required a substantial reduction in our outstanding
debt to reduce leverage to 3.75x. As previously disclosed, this can
be accomplished through a combination of improved earnings,
divestitures, use of excess cash, and the issuance of additional
equity. The lenders also required that our sponsor, Cypress Energy
Holdings, LLC (“CEH”) or one of its affiliates, provide this equity
commitment as a condition of the refinancing commitment.
We accomplished this successful refinancing by receiving a
commitment from an affiliate of CEH to invest up to $50.0 million
in a preferred public investment in private equity (“PIPE”)
necessary to reduce indebtedness. We believe the terms are more
attractive to CELP than what it would receive from unaffiliated
third parties. Favorable terms include but are not limited to an
attractive payment-in-kind (“PIK”) option, coupon, conversion
premium, and redemption features. The Conflicts Committee of CELP’s
board of directors and its advisors negotiated the terms of the
PIPE to ensure fairness of this related-party equity investment
required by the bank group. The terms of the new PIPE will also be
disclosed in our 10-K filing. Additionally, CELP has retained a
financial advisor to shop the market to determine if more favorable
PIPE terms can be obtained from an independent third party, and to
explore strategic alternatives to determine if any more attractive
transformational opportunities exist. The Conflicts Committee would
likely be involved in the approval of any strategic alternative
that includes a related-party transaction. The substantially lower
leverage should materially reduce interest expense, improve
distributable cash flow, and position CELP to increase the size of
the facility when CELP finds a suitable acquisition
opportunity.
We repaid $4.0 million of principal on our revolving credit
facility in January 2018 through the sale of our saltwater disposal
facility in Pecos, Texas. We were able to obtain an attractive
price and retain a perpetual royalty on the facility. CELP also
plans to use approximately $7.0 million of existing cash on hand to
further reduce indebtedness at the closing of the new credit
facility. The combination of these events should allow us to reduce
our outstanding debt balance approximately 44% from $136.9 million
to approximately $76.1 million and our net debt by approximately
48% to approximately 3.0x trailing adjusted EBITDA at closing.
Mr. Boylan further stated, “We believe this new credit facility
and very favorable PIPE commitment from an affiliate of our sponsor
will support our current business requirements until we find an
accretive acquisition opportunity, at which time we will likely
expand or refinance this facility to accommodate the transaction.
We will also fully check the market to ensure that no better
alternative is available. In addition to the material support
provided above, our sponsor provided another $4.1 million of
support during 2017 at no charge to our unitholders, reconfirming
the fact that its interests are fully aligned with our unitholders
as a result of their approximate 64.0% ownership in CELP. We
believe that our stronger balance sheet with less debt as the
result of the PIPE will allow us to support the current
distribution and ultimately position us to begin growing the
distribution again.”
Fourth Quarter:
- Revenue of $69.4 million for the three
months ended December 31, 2017, compared with $77.7 million for the
three months ended September 30, 2017, representing a 10.7%
decrease as is common with our seasonality. In the fourth quarter
of 2016, revenue was $70.4 million.
- Gross margin of $9.3 million or 13.4%
for the three months ended December 31, 2017, compared to $9.4
million or 12.1% for the three months ended September 30, 2017.
Gross margin was $10.4 million or 14.8% in the fourth quarter of
2016 primarily driven by a customer retroactive payment in 2016
that distorted margins in that quarter.
- Net income of $1.9 million for the
three months ended December 31, 2017, a 245.0% increase compared to
$0.6 million for the three months ended September 30, 2017. Net
income was $1.8 million for the fourth quarter of 2016.
- Net income attributable to CELP limited
partners of $3.1 million for the three months ended December 31,
2017, compared to $1.6 million for the three months ended September
30, 2017, representing a 96.8% increase. Net income attributable to
CELP limited partners was $2.4 million for the fourth quarter of
2016.
- Adjusted EBITDA of $4.5 million for the
three months ended December 31, 2017 (including non-controlling
interests and amounts attributable to our general partner),
compared to $4.5 million for the three months ended September 30,
2017 (including non-controlling interests and amounts attributable
to our general partner). Adjusted EBITDA was $6.9 million for the
fourth quarter of 2016 (including non-controlling interests and
amounts attributable to our general partner), with the difference
being driven by a combination of sponsor support and a customer’s
retroactive payment for services previously rendered.
- Adjusted EBITDA attributable to limited
partners of $5.5 million for the three months ended December 31,
2017, compared to $5.3 million for the three months ended September
30, 2017, representing an increase of 3.3%. Adjusted EBITDA
attributable to limited partners was $6.7 million for the fourth
quarter of 2016 driven by the sponsor support and customer’s
retroactive payment referred to above.
- Distributable Cash Flow of $3.2 million
for the three months ended December 31, 2017, compared to $3.4
million for the three months ended September 30, 2017.
Distributable Cash Flow was $5.1 million for the fourth quarter of
2016 driven by the items referred to above and to the two
additional saltwater disposal facilities that were in operation at
that time.
- A coverage ratio of 1.28x in the fourth
quarter of 2017, compared to a coverage ratio of 1.37x in the third
quarter of 2017, and a coverage ratio of 1.05x in the fourth
quarter of 2016.
- A leverage ratio of approximately 3.7x
and an interest coverage ratio of 3.1x at December 31, 2017,
pursuant to the terms of our existing credit facilities.
Calendar Year 2017:
- Approximately 97% of our revenue and
approximately 85% of our Adjusted EBITDA came from inspection and
integrity services.
- Our customer retention rate remains
very high at over 98%.
- In 2017, we accomplished these results
despite having lost two saltwater disposal facilities to lightning
strikes and fires. Both losses were insured and both facilities
will reopen in 2018.
- In the second half of 2017, we ceased
doing business with a large Canadian customer who sought lower
rates on basic inspection services; this adversely affected our
revenues by approximately $7.8 million.
- Revenue of $286.3 million for the year
ended December 31, 2017, down 3.9% from revenue of $298.0 million
in the prior year.
- Gross margin of $33.6 million for the
year ended December 31, 2017, down 5.3% from the gross margin of
$35.5 million in the prior year.
- Net loss of $1.9 million for the year
ended December 31, 2017 (including impairment charges of $3.6
million), compared to a $9.2 million loss for the prior year
(including impairment charges of $10.5 million).
- Net income attributable to limited
partners of $3.2 million for the year ended December 31, 2017
(including impairment charges of $2.8 million), compared to $1.6
million for the prior year (including impairment charges of $6.4
million).
- Adjusted EBITDA of $16.6 million for
the year ended December 31, 2017 (including non-controlling
interests and amounts attributable to our general partner), down
15.9% from the Adjusted EBITDA of $19.8 million in the prior year.
In 2017, the sponsor provided $4.1 million of support compared to
$6.3 million in the prior year. Excluding sponsor support, Adjusted
EBITDA was $14.9 million in 2017 and $16.0 million in 2016.
- Adjusted EBITDA attributable to limited
partners of $18.7 million for the year ended December 31, 2017,
down 15.9% from Adjusted EBITDA attributable to limited partners of
$22.2 million for the prior year.
- Distributable Cash Flow of $10.0
million for the year ended December 31, 2017, down 35.5% from $15.5
million in the prior year.
Highlights include:
- We sent an average of 1,101 inspectors
per week to our customers for the fourth quarter of 2017, a
decrease of 9.1% compared to 1,211 inspectors per week in the third
quarter of 2017. This decrease is consistent with the seasonality
of our business. The average number of inspectors we sent per week
to customers was consistent year-over-year, as we sent an average
of 1,093 inspectors per week to our customers in the fourth quarter
of 2016, despite the fact we elected not to lower pricing with a
major customer in Canada in the second half of 2017, leading to a
decrease in our active number of inspectors in Canada of
approximately 200 inspectors per week. Our focus on maintenance and
integrity services and non-destructive examination continues to
benefit our gross margins in comparison with our standard
inspection work.
- We disposed of 3.7 million barrels of
saltwater during the fourth quarter of 2017 at an average revenue
per barrel of $0.65, an increase of 20.8% compared with the
disposal of 3.1 million barrels of saltwater at an average revenue
per barrel of $0.68 for the third quarter of 2017. This also
represented a 10.5% increase over the 3.4 million barrels of
saltwater we disposed at an average revenue per barrel of $0.68 for
the fourth quarter of 2016. It is important to note that this was
accomplished with two facilities under reconstruction due to
lightning strikes and fires in 2017.
- Maintenance capital expenditures for
the fourth quarter of 2017 were $0.2 million, compared to $0.2
million in the third quarter of 2017 and $0.1 million in the fourth
quarter of 2016.
- Our expansion capital expenditures
during the year ended December 31, 2017 totaled $2.2 million and
were primarily related to the construction of a gathering system at
one of our saltwater disposal facilities in North Dakota, and to
the purchase of new equipment to support our pipeline integrity
businesses.
Looking forward:
- We continue to pursue new customers,
new projects as they are announced, and renew existing contracts.
We are very pleased with the forty new customers added during 2017
that should benefit us in 2018 as activity ramps up. Our two new
service lines should also benefit us in 2018, as the start-up phase
associated with these lines is behind us.
- Our Integrity Services business
(hydrostatic testing) fourth quarter results improved over the
prior quarter with a material increase in field personnel
utilization. We have also improved our backlog approximately 982%
from the end of 2016 to the end of 2017.
- During the fourth quarter,
approximately 91% of total water volumes came from produced water,
and piped water represented approximately 41% of total water
volumes. As commodity prices continue to improve and drilling
activity increases, we expect to have operating leverage with our
cost structure and minimal maintenance capital expenditure
requirements as volumes increase. Private equity investors have
been very active, acquiring acreage and production in the Bakken
this year that will likely lead to increased new drilling activity.
Recent research shows there are an estimated 500 drilled and
uncompleted wells (“DUCs”) within a fifteen-mile radius of our
facilities, 300 in North Dakota and 200 in the Permian. As prices
continue to improve, we expect to benefit from the completion of
these DUCs and other newly completed wells from both existing
Bakken operators and many new private equity backed operators.
- Our saltwater disposal facilities have
substantial unused capacity to support growth with current
utilization rates of approximately 25%. In the next thirty days, we
anticipate completing the rebuild of our Delaware basin saltwater
disposal facility near Orla, Texas, and plan to reopen a facility
we own in the Bakken in the second quarter, both of which were
struck by lightning in 2017.
- We continue to evaluate several
acquisition opportunities that CEH intends to pursue, with the
expectation that these opportunities would be offered to CELP in
the future as drop-down opportunities.
- LIBOR interest rates have risen over
the last quarter by approximately eleven basis points (and by
almost seventy-five basis points compared to this time last year).
This has increased our interest expense and negatively impacted our
distributable cash flow and coverage ratios. Our materially lower
level of debt will reduce our interest expense in 2018.
- Our distributable cash flow will
benefit from materially lower outstanding debt as a result of the
new credit facility and the PIPE investment that should result in
significantly lower overall interest costs.
CELP will file its annual report on Form 10-K for the year ended
December 31, 2017 with the Securities and Exchange Commission
tomorrow, March 23, 2018. CELP will also post a copy of the Form
10-K on its website at www.cypressenergy.com. Unitholders
may receive a printed copy of the Annual Report on Form 10-K free
of charge by contacting Investor Relations at Cypress Energy
Partners, L.P., 5727 South Lewis Avenue, Suite 300, Tulsa, Oklahoma
74105, or emailing ir@cypressenergy.com.
CELP will host a conference call on Friday, March 23, 2018 at
10:00 am EDT (9:00 am CDT), to discuss its fourth quarter 2017
financial results. Analysts, investors, and other interested
parties may access the conference call by dialing Toll-Free (US
& Canada): (888) 419-5570 and using the passcode 354 960 89, or
International Dial-In (Toll): +1 617-896-9871. An archived audio
replay of the call will be available on the Investor section of our
website at www.cypressenergy.com on Tuesday, March 27, 2018,
beginning at 10:00 am EDT (9:00 am CDT).
Non-GAAP Measures:
CELP defines Adjusted EBITDA as net income (loss), plus interest
expense, depreciation, amortization and accretion expenses, income
tax expenses, impairments, non-cash allocated expenses, offering
costs and equity-based compensation expense, less certain other
unusual or non-recurring items. CELP defines Adjusted EBITDA
attributable to limited partners as net income (loss) attributable
to limited partners, plus interest expense attributable to limited
partners, depreciation, amortization and accretion expenses
attributable to limited partners, impairments attributable to
limited partners, income tax expense attributable to limited
partners, offering costs attributable to limited partners, non-cash
allocated expenses attributable to limited partners and
equity-based compensation expense attributable to limited partners,
less certain other unusual or non-recurring items attributable to
limited partners. CELP defines Distributable Cash Flow as Adjusted
EBITDA attributable to limited partners excluding cash interest
paid, cash income taxes paid, maintenance capital expenditures and
certain other unusual or non-recurring items. Adjusted EBITDA and
Distributable Cash Flow are supplemental, non-GAAP financial
measures used by management and by external users of our financial
statements, such as investors and commercial banks, to assess the
following: our operating performance as compared to those of other
companies in the mid-stream sector, without regard to financing
methods, historical cost basis or capital structure; the ability of
our assets to generate sufficient cash flow to make distributions
to our unitholders; our ability to incur and service debt and fund
capital expenditures; the viability of acquisitions and other
capital expenditure projects; and the returns on investment of
various investment opportunities. The GAAP measures most directly
comparable to Adjusted EBITDA, Adjusted EBITDA attributable to
limited partners, and Distributable Cash Flow are net income (loss)
and cash flow from operating activities, respectively. These
non-GAAP measures should not be considered as alternatives to the
most directly comparable GAAP financial measure. Each of these
non-GAAP financial measures exclude some, but not all, items that
affect the most directly comparable GAAP financial measure.
Adjusted EBITDA, Adjusted EBITDA attributable to limited partners
and Distributable Cash Flow should not be considered an alternative
to net income, income before income taxes, net income attributable
to limited partners, cash flows from operating activities, or any
other measure of financial performance calculated in accordance
with GAAP as those items are used to measure operating performance,
liquidity, or the ability to service debt obligations. CELP
believes that the presentation of Adjusted EBITDA, Adjusted EBITDA
attributable to limited partners and Distributable Cash Flow will
provide useful information to investors in assessing our financial
condition and results of operations. CELP uses Adjusted EBITDA,
Adjusted EBITDA attributable to limited partners and Distributable
Cash Flow as a supplemental financial measure to both manage our
business and assess the cash flows generated by our assets (prior
to the establishment of any retained cash reserves by the general
partner), to fund the cash distributions we expect to pay to
unitholders, to evaluate our success in providing a cash return on
investment, and whether or not the Partnership is generating cash
flow at a level that can sustain or support an increase in its
quarterly distribution rates and to determine the yield of our
units, which is a quantitative standard used throughout the
investment community with respect to publicly-traded partnerships,
as the value of a unit is generally determined by a unit’s yield
(which in turn is based on the amount of cash distributions the
entity pays to a unitholder). Because adjusted EBITDA, adjusted
EBITDA attributable to limited partners and Distributable Cash Flow
may be defined differently by other companies in our industry, our
definitions of Adjusted EBITDA, Adjusted EBITDA attributable to
limited partners and Distributable Cash Flow may not be comparable
to similarly titled measures of other companies, thereby
diminishing the utility of these measures. Reconciliations of (i)
Adjusted EBITDA to net income, (ii) Adjusted EBITDA attributable to
limited partners and Distributable Cash Flow to net income
attributable to limited partners, and (iii) Adjusted EBITDA to net
cash provided by operating activities are provided below.
This press release includes “forward-looking statements.”
All statements, other than statements of historical facts included
or incorporated herein, may constitute forward-looking statements.
Actual results could vary significantly from those expressed or
implied in such statements, and are subject to a number of risks
and uncertainties. While CELP believes its expectations, as
reflected in the forward-looking statements, are reasonable, CELP
can give no assurance that such expectations will prove to be
correct. The forward-looking statements involve risks and
uncertainties that can affect operations, financial performance,
and other factors as discussed in filings with the Securities and
Exchange Commission. Other factors that could impact any
forward-looking statements are those risks described in CELP’s
Annual Report filed on Form 10-K, and other public filings. You are
urged to carefully review and consider the cautionary statements
and other disclosures made in those filings, specifically those
under the heading “Risk Factors.” CELP undertakes no obligation to
publicly update or revise any forward-looking statements except as
required by law.
About Cypress Energy Partners, L.P.
Cypress Energy Partners, L.P. is a master limited partnership
that provides essential midstream services, including pipeline
inspection, integrity, and hydrostatic testing services to various
energy companies and their vendors throughout the U.S. and Canada.
Cypress also provides saltwater disposal and environmental services
to upstream energy companies, and their vendors in North Dakota in
the Bakken region of the Williston Basin, and West Texas in the
Permian Basin. In all of these business segments, Cypress works
closely with its customers to help them comply with increasingly
complex and strict environmental and safety rules and regulations,
and reduce their operating costs. Cypress is headquartered in
Tulsa, Oklahoma.
CYPRESS ENERGY PARTNERS, L.P. Consolidated Balance
Sheets As of December 31, 2017 and 2016 (in thousands,
except unit data)
December 31,
December 31,
2017 2016 ASSETS Current assets: Cash
and cash equivalents $ 24,508 $ 26,693 Trade accounts receivable,
net 41,693 38,482 Prepaid expenses and other 2,294 1,042 Assets
held for sale 2,172 - Total current assets 70,667
66,217 Property and equipment: Property and equipment, at cost
22,700 22,459 Less: Accumulated depreciation 9,312
7,840 Total property and equipment, net 13,388 14,619 Intangible
assets, net 25,477 29,624 Goodwill 53,435 56,903 Other assets
236 149 Total assets $ 163,203 $ 167,512
LIABILITIES AND OWNERS' EQUITY Current liabilities: Accounts
payable $ 3,757 $ 1,690 Accounts payable - affiliates 3,173 1,638
Accrued payroll and other 9,109 7,585 Liabilities held for sale 97
- Income taxes payable 646 1,011 Current portion of long-term debt
136,293 - Total current liabilities 153,075 11,924
Long-term debt - 135,699 Deferred tax liabilities - 362 Asset
retirement obligations 143 139 Total liabilities
153,218 148,124 Owners' equity: Partners’ capital:
Common units (11,889,958 and 5,945,348
units outstanding at
December 31, 2017 and 2016,
respectively)
34,614 (7,722) Subordinated units (5,913,000 units outstanding at
December 31, 2016) - 50,474 General partner (25,876) (25,876)
Accumulated other comprehensive loss (2,677) (2,538)
Total partners' capital 6,061 14,338 Non-controlling interests
3,924 5,050 Total owners' equity 9,985
19,388 Total liabilities and owners' equity $ 163,203 $ 167,512
CYPRESS ENERGY PARTNERS, L.P. Consolidated
Statements of Operations For the Three Months and Years
Ended December 31, 2017 and 2016 (in thousands, except unit and
per unit data)
Three Months Ended December 31, Year Ended
December 31, 2017 2016 2017 2016
Revenues $ 69,371 $ 70,406 $ 286,342 $ 297,997 Costs
of services 60,096 59,977 252,739
262,517 Gross margin 9,275 10,429 33,603 35,480 Operating
costs and expense: General and administrative 5,042 5,048 21,055
21,853 Depreciation, amortization and accretion 882 1,176 4,443
4,861 Impairments - - 3,598 10,530 Gain on asset disposals, net
(665) - (570) - Operating income (loss)
4,016 4,205 5,077 (1,764) Other income (expense): Interest
expense, net (1,924) (1,681) (7,335) (6,559) Foreign currency gains
(losses) (92) - 732 - Other, net 77 99 199
356 Net income (loss) before income tax expense 2,077 2,623
(1,327) (7,967) Income tax expense 138 806 596
1,195 Net income (loss) 1,939 1,817 (1,923) (9,162)
Net income (loss) attributable to non-controlling interests
180 399 (1,110) (4,499) Net income (loss)
attributable to partners / controlling interests 1,759 1,418 (813)
(4,663) Net loss attributable to general partner
(1,300) (932) (4,050) (6,298) Net income
attributable to limited partners $ 3,059 $ 2,350 $ 3,237 $ 1,635
Net income attributable to limited partners allocated to:
Common unitholders $ 3,059 $ 1,177 $ 3,237 $ 819 Subordinated
unitholders - 1,173 - 816 $ 3,059 $
2,350 $ 3,237 $ 1,635 Net income per common limited partner
unit: Basic $ 0.26 $ 0.20 $ 0.29 $ 0.14 Diluted $ 0.25 $ 0.19 $
0.29 $ 0.13 Net income per subordinated limited partner unit
- basic and diluted $ - $ 0.20 $ - $ 0.14 Weighted average
common units outstanding: Basic 11,889,957 5,944,676 11,151,646
5,934,226 Diluted 12,006,626 6,111,165 11,253,069 6,090,103
Weighted average subordinated units outstanding - basic and diluted
- 5,913,000 729,000 5,913,000
Reconciliation of
Net Income (Loss) to Adjusted EBITDA
Three Months Ended
December 31, Years ended December 31, 2017
2016 2017 2016 (in thousands) Net
income (loss) $ 1,939 $ 1,817 $ (1,923) $ (9,162) Add: Interest
expense 1,924 1,681 7,335 6,559 Depreciation, amortization and
accretion 1,167 1,434 5,545 5,788 Impairments - - 3,598 10,530
Income tax expense 138 806 596 1,195 Non-cash allocated expenses -
932 1,750 3,798 Equity based compensation (78) 257 1,059 1,086
Less: Gain on asset disposals, net 665 - 588 - Foreign currency
gains (losses) (92) - 732 - Adjusted
EBITDA $ 4,517 $ 6,927 $ 16,640 $ 19,794
Reconciliation of Net Income (Loss) Attributable to
Limited Partners to Adjusted EBITDA Attributable to
Limited Partners and Distributable Cash Flow
Three Months
ended December 31, Years ended December 31, 2017
2016 2017 2016 (in thousands) Net
income attributable to limited partners $ 3,059 $ 2,350 $ 3,237 $
1,635 Add: Interest expense attributable to limited partners 1,924
1,866 7,335 6,556
Depreciation, amortization and accretion
attributable
to limited partners
1,026 1,452 4,978 5,373
Impairments attributable to limited
partners
- - 2,823 6,409
Income tax expense attributable to limited
partners
138 809 580 1,179
Equity based compensation attributable
to
limited partners
(78) 257 1,059 1,086 Less: Gain on asset disposals, net 665 - 588 -
Foreign currency gains (losses)
attributable to
limited partners
(92) - 732 - Adjusted EBITDA
attributable to limited partners 5,496 6,734 18,692 22,238
Less:
Cash interest paid, cash taxed paid
and
maintenance capital expenditures
attributable to limited partners 2,294 1,659
8,674 6,717 Distributable cash flow $ 3,202 $ 5,075 $ 10,018
$ 15,521
Reconciliation of Net Cash Provided by Operating Activities to
Adjusted EBITDA Years ended December 31,
2017 2016 (in thousands) Cash flows provided
by operating activities $ 8,253 $ 24,819 Changes in trade accounts
receivable, net 3,406 (9,871) Changes in prepaid expenses and other
1,332 (1,350) Changes in accounts payable and accrued liabilities
(4,471) (478) Change in income taxes payable 365 (662) Interest
expense (excluding non-cash interest) 6,741 5,989 Income tax
expense (excluding deferred tax benefit) 957 1,219 Other 57
128 Adjusted EBITDA $ 16,640 $ 19,794
Operating
Data Three Months Twelve Months Ended December
31, Ended December 31, 2017
2016 2017 2016 Total
barrels of saltwater disposed (in thousands) 3,747 3,390 12,588
13,307 Average revenue per barrel $ 0.65 $ 0.68 $ 0.67 $ 0.67 Water
Services gross margins 51.8% 70.8% 58.5% 57.9% Average number of
inspectors 1,101 1,093 1,145 1,147 Average revenue per inspector
per week $ 4,500 $ 4,575 $ 4,499 $ 4,601 Pipeline Inspection
services gross margins 11.0% 12.5% 10.0% 10.2% Average number of
field personnel 20 20 20 23 Average revenue per field personnel per
week $ 12,850 $ 9,549 $ 8,887 $ 11,577 Integrity Services gross
margins 29.9% 25.4% 20.7% 16.9% Maintenance capital expenditures
(in thousands) $ 169 $ 101 $ 481 $ 307 Expansion capital
expenditures (in thousands) $ 1,396 $ 316 $ 2,198 $ 844
Distributions (in thousands) $ 2,498 $ 4,823 $ 9,985 $ 19,271
Coverage ratio 1.28x 1.05x 1.00x 0.81x
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180322006358/en/
Cypress Energy Partners, L.P.Jeff Herbers,
918-947-5730Chief Accounting
Officerjeff.herbers@cypressenergy.com
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