MIDLAND, Texas, Feb. 26, 2015 /PRNewswire/ -- CSI Compressco
LP (CSI Compressco or the Partnership) (NASDAQ: CCLP) today
announced fourth quarter 2014 consolidated results. Earnings before
interest, taxes, depreciation, and amortization (EBITDA) for the
fourth quarter of 2014 were $31.3
million, with net income of $4.4
million. This compares to EBITDA and net income of
$10.2 million and $6.3 million, respectively, during the fourth
quarter of 2013. Results for the fourth quarter of 2014 include a
full quarter impact of the prior acquisition of Compressor Systems,
Inc. ("CSI") and pretax transaction costs related to the
acquisition of CSI of $2.6 million,
or approximately $0.05 per common
diluted unit after tax in the aggregate. Distributable cash flow
for the quarter ended December 31,
2014 was $28.4 million (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 fourth quarter 2014 results include:
- Record quarterly Partnership revenues of $124.8 million,
- Record monetary increase of $0.025 to the quarterly distribution, a 5.4%
increase over Q3 2014,
- Ending Q4 fleet utilization of 87.7%, compared to 85.9% at the
end of Q3 2014; and
- Implementation of our new name, logo and NASDAQ ticker
symbol.
|
Quarter
Ended
|
|
2014 vs.
2013
|
|
December 31,
2014
|
|
December 31,
2013
|
|
|
(In Thousands, Except
Ratios and Percentages)
|
Net income
(a)
|
$
|
4,361
|
|
|
$
|
6,347
|
|
|
(31)
|
%
|
EBITDA
|
$
|
31,283
|
|
|
$
|
10,212
|
|
|
206
|
%
|
Cash
distribution
|
$
|
16,609
|
|
|
$
|
6,943
|
|
|
139
|
%
|
Distribution coverage
ratio
|
1.71x
|
|
|
1.46x
|
|
|
17
|
%
|
Capital
expenditures
|
$
|
22,069
|
|
|
$
|
4,599
|
|
|
380
|
%
|
(a) Including $2.6
million CSI transaction costs.
|
Consolidated revenues for the quarter ended December 31, 2014 were $124.8 million versus $32.4 million in the fourth quarter of 2013.
Income before tax for the quarter ended December 31, 2014 was $3.4
million versus $6.1 million
for the fourth quarter of 2013. Results of operations for the
fourth quarter of 2014 compared to the fourth quarter of 2013
reflect several key items, including continued improvement in fleet
utilization, results from the acquisition of CSI, and $2.6 million in transaction costs related to the
CSI acquisition.
During the fourth quarter we continued to improve overall fleet
utilization while also adding almost 17,000 horsepower to the
fleet. Horsepower deployed in the fourth quarter was most notable
in the Permian Basin, South Texas
and Mid-Continent regions. As of December
31, 2014, the fleet utilization rate was 87.7%. We define
the fleet utilization rate as the aggregate compressor package
horsepower in service divided by the aggregate compressor package
fleet horsepower as of a given date. Our aftermarket services
business remained active with several projects in the Permian Basin
and Western US. Equipment and parts sales recorded during the
period were primarily compressor packages supporting midstream
applications. At December 31, 2014,
the Partnership had liquidity of $239
million including cash on hand of $34
million and $205 million
available on our credit facility before deducting for bonds and
letters of credit of $13 million.
Unaudited results of operations for the three and twelve month
periods ended December 31, 2014
compared to the prior year periods are presented in the
accompanying financial tables.
Timothy A. Knox, President of CSI
Compressco, commented, "We are very excited to be operating with
our new name, logo, and NASDAQ ticker symbol, which better reflect
the Partnership's history, culture, and capabilities. Formalizing
our new name allowed us to move forward with additional integration
efforts, including increased marketing and contract conversions.
Wrapping up our first combined full quarter in a cycle of declining
oil and gas prices, we are pleased with our financial results, our
continued focus on safety and process improvement, and the teamwork
that is taking hold throughout the Partnership. Integration efforts
continue and are transitioning into the more discrete issues of
execution of daily tasks. In January we announced an increased
quarterly distribution, the 9th increase in the past 10
quarters, with the increase being the Partnership's largest
quarterly increase in monetary terms. Developing the 2015 business
plan for the larger combined entity in the current energy market
environment has been a challenging process, and today we are
pleased to announce 2015 financial guidance estimates of
$460 to $480 million in revenues,
$16 to $22 million in pretax profit,
and $125 to $135 million in
EBITDA.
Mr. Knox further remarked, "Entering our first full year of
operation as CSI Compressco, the market is much different than it
was one year ago. Our projected revenues for 2015 represent a 4% to
8% decrease from our annualized actual revenues for the fourth
quarter 2014, with EBITDA increasing up to 8% compared to our
actual annualized EBITDA for the fourth quarter of 2014 (fourth
quarter annualized revenues and EBITDA are non-GAAP financial
measures that are reconciled to the nearest GAAP financial measures
in the tables accompanying this press release). We will continue
our efforts to aid in our customers' success, maintain and grow
market share, and protect profit with the continued synergies of
our integration combined with additional cost optimization.
We enter 2015 with a manufacturing sales backlog of $120 million in compressor and pump sales, as
well as $83 million (approximately
99,000 horsepower) in planned service fleet additions. We see
opportunities to increase our presence both domestically and
internationally by leveraging the expanded product and service
offering and operating footprint of CSI Compressco.
"We anticipate aggregate 2015 capital expenditures and
depreciation and amortization expense of approximately $100 million and $78
million, respectively. Our 2015 capital expenditure plan
supports ongoing investments in the service fleet through additions
and upgrades, as well as $14 million
in service fleet maintenance capital, and $3
million for continued improvements and upkeep to facilities,
vehicles and other equipment."
CSI Compressco will host a conference call to discuss fourth
quarter 2014 results today, February 26,
2015, at 10:30 am 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.compressco.com
On January 20, 2015, CSI
Compressco announced that the board of directors of its general
partner declared a cash distribution attributable to the fourth
quarter of 2014 of $0.485 per
outstanding unit, which was paid on February
13, 2015 to unitholders of record as of the close of
business on January 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 fourth quarter of 2014 was 1.71x.
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 includes certain statements that are deemed
to be forward-looking statements. Generally, the use of words such
as "may," "expect," "intend," "estimate," "projects," "anticipate,"
"believe," "assume," "could," "should," "plans," "targets," or
similar expressions that convey the uncertainty of future events,
activities, expectations, or outcomes identify forward-looking
statements. These forward-looking statements include statements
concerning expected results of operations for 2015, anticipated
benefits and growth of CSI Compressco following the acquisition of
Compressor Systems, Inc., including increases in cash distributions
per unit, financial guidance, estimated distributable cash,
estimated earnings, 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.
These forward-looking statements are based on certain assumptions
and analyses made by CSI Compressco in light of its experience and
its perception of historical trends, current conditions, expected
future developments and other factors it believes are appropriate
in the circumstances. Such statements are subject to a number of
risks and uncertainties, many of which are beyond the control of
CSI Compressco, including the ability of CSI Compressco to
successfully integrate the operations of CSI and the ability to
realize the anticipated benefits of the acquisition. Investors are
cautioned that any such statements are not guarantees of future
performances or results and that actual results or developments may
differ materially from those projected in the forward-looking
statements. Neither CSI Compressco's independent auditors, nor any
other independent accountants or experts have expressed any opinion
or any other form of assurance related to the Partnership's
estimates of increased cash available for distribution or their
achievability, but in the view of CSI Compressco management, these
estimates were prepared on a reasonable basis, reflect the best
currently available information and represent, to the best of
management's knowledge and belief, CSI Compressco's expected course
of action. However, this information is not fact and this statement
should not be regarded as a representation by CSI Compressco that
it will pay such increased cash distributions. Some of the factors
that could affect the Partnership's actual results and the ability
of CSI Compressco to increase its cash distributions per common
unit as described above are described in CSI Compressco's Annual
Report on Form 10-K for the year ended December 31, 2013, as well as other risks
identified from time to time in its reports on Form 10-Q and Form
8-K filed with the U.S. Securities and Exchange Commission. CSI
Compressco undertakes no obligation to update or revise any
forward-looking statement to reflect new information or events.
Results of operations
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
December
31,
|
|
December
31,
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
(In
Thousands)
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
Compression and related services
|
$
|
75,881
|
|
|
$
|
28,067
|
|
|
$
|
192,151
|
|
|
$
|
112,937
|
|
Aftermarket services
|
9,029
|
|
|
—
|
|
|
15,624
|
|
|
—
|
|
Equipment and parts sales
|
39,927
|
|
|
4,380
|
|
|
74,872
|
|
|
8,364
|
|
Total
revenues
|
124,837
|
|
|
32,447
|
|
|
282,647
|
|
|
121,301
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues
(excluding depreciation and amortization expense)
|
|
|
|
|
|
|
|
|
|
Cost of
compression and related services
|
36,932
|
|
|
14,812
|
|
|
98,874
|
|
|
63,425
|
|
Cost of
aftermarket services
|
8,313
|
|
|
—
|
|
|
13,579
|
|
|
—
|
|
Cost of
equipment and parts sales
|
33,597
|
|
|
2,595
|
|
|
62,214
|
|
|
4,691
|
|
Total cost of
revenues
|
78,842
|
|
|
17,407
|
|
|
174,667
|
|
|
68,116
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general, and
administrative expense
|
12,835
|
|
|
4,479
|
|
|
32,100
|
|
|
17,467
|
|
Depreciation and
amortization
|
20,249
|
|
|
3,919
|
|
|
41,158
|
|
|
14,642
|
|
Interest expense,
net
|
7,662
|
|
|
166
|
|
|
12,964
|
|
|
469
|
|
Other expense,
net
|
1,877
|
|
|
349
|
|
|
11,672
|
|
|
782
|
|
Income before tax
provision
|
3,372
|
|
|
6,127
|
|
|
10,086
|
|
|
19,825
|
|
Provision (benefit)
for income taxes
|
(989)
|
|
|
(220)
|
|
|
(1,172)
|
|
|
2,258
|
|
Net income
|
$
|
4,361
|
|
|
$
|
6,347
|
|
|
$
|
11,258
|
|
|
$
|
17,567
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
diluted common unit
|
$
|
0.12
|
|
|
$
|
0.40
|
|
|
$
|
0.47
|
|
|
$
|
1.10
|
|
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 is used as a supplemental
financial measure 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 fourth quarter 2014
EBITDA is defined as EBITDA excluding transaction costs associated
with the CSI acquisition and enterprise reporting system
implementation 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 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 and twelve month periods ended December 31, 2014 and December 31, 2013:
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
December
31,
|
|
December
31,
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
(In
Thousands)
|
Net income
|
$
|
4,361
|
|
|
$
|
6,347
|
|
|
$
|
11,258
|
|
|
$
|
17,567
|
|
Provision (benefit)
for income taxes
|
(989)
|
|
|
(220)
|
|
|
(1,172)
|
|
|
2,258
|
|
Depreciation and
amortization
|
20,249
|
|
|
3,919
|
|
|
41,158
|
|
|
14,642
|
|
Interest expense,
net
|
7,662
|
|
|
166
|
|
|
12,964
|
|
|
469
|
|
EBITDA
|
$
|
31,283
|
|
|
$
|
10,212
|
|
|
$
|
64,208
|
|
|
$
|
34,936
|
|
The following table reconciles fourth quarter 2014 revenues and
EBITDA to annualized fourth quarter 2014 revenues and EBITDA
compared to our 2015 guidance range.
|
2014
Results
|
|
2015 Guidance
Range
|
|
Q4
|
|
Annualized
Q4
|
|
Low
End
|
|
High
End
|
|
(In Thousands, Except
Percentages)
|
Revenues
|
$
|
124,837
|
|
|
$
|
499,348
|
|
|
$
|
460,000
|
|
|
$
|
480,000
|
|
Revenue
guidance as a % of annualized Q4 result
|
|
|
|
|
|
|
(8)%
|
|
|
(4)%
|
|
EBITDA
|
$
|
31,283
|
|
|
$
|
125,132
|
|
|
$
|
125,000
|
|
|
$
|
135,000
|
|
EBITDA
guidance as a % of annualized Q4 result
|
|
|
|
|
|
|
— %
|
|
|
8%
|
|
The following table reconciles EBITDA to adjusted EBITDA for the
three month periods ended December
31, September 30, and
June 30, 2014 and the twelve month
period ended December 31, 2014:
|
Three Months
Ended
|
|
Twelve Months
Ended December 31, 2014
|
|
Dec. 31,
2014
|
|
Sept. 30,
2014
|
|
June 30,
2014
|
|
|
(In
Thousands)
|
EBITDA
|
$
|
31,283
|
|
|
$
|
14,522
|
|
|
$
|
9,309
|
|
|
$
|
64,208
|
|
CSI transaction
related expenses
|
2,634
|
|
|
9,769
|
|
|
855
|
|
|
13,258
|
|
ERP implementation
costs
|
—
|
|
|
900
|
|
|
—
|
|
|
900
|
|
Adjusted
EBITDA
|
$
|
33,917
|
|
|
$
|
25,191
|
|
|
$
|
10,164
|
|
|
$
|
78,366
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CSI transaction
related costs in SG&A
|
$
|
2,634
|
|
|
$
|
2,913
|
|
|
$
|
—
|
|
|
$
|
5,547
|
|
The following table reconciles net income to distributable cash
flow and distribution coverage ratio for the three and twelve month
periods ended December 31, 2014:
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
December 31,
2014
|
|
December 31,
2014
|
|
(In Thousands, except
distribution coverage ratio)
|
Net income
(loss)
|
$
|
4,361
|
|
|
$
|
11,258
|
|
Provision (benefit)
for income taxes
|
(989)
|
|
|
(1,172)
|
|
Depreciation and
amortization
|
20,249
|
|
|
41,158
|
|
Interest expense,
net
|
7,662
|
|
|
12,964
|
|
EBITDA
|
31,283
|
|
|
64,208
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
Current income tax
benefit (expense)
|
(2,435)
|
|
|
(3,459)
|
|
Maintenance capital
expenditures
|
(2,888)
|
|
|
(4,974)
|
|
Interest
expense
|
(7,662)
|
|
|
(12,964)
|
|
Plus:
|
|
|
|
|
|
Non-cash cost of
compressors sold
|
6,158
|
|
|
6,529
|
|
Equity
compensation
|
625
|
|
|
1,544
|
|
Amortization of
finance costs
|
728
|
|
|
1,163
|
|
CSI transaction
related expenses
|
2,634
|
|
|
13,258
|
|
Distributable cash
flow
|
$
|
28,443
|
|
|
$
|
65,305
|
|
|
|
|
|
|
|
Cash distribution
attributable to period
|
$
|
16,609
|
|
|
$
|
46,664
|
|
|
|
|
|
|
|
Distribution coverage
ratio
|
1.71x
|
|
|
1.40x
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/csi-compressco-lp-announces-fourth-quarter-and-full-year-2014-results-and-2015-fiscal-year-guidance-300041912.html
SOURCE CSI Compressco LP