THE WOODLANDS, Texas,
Aug. 3, 2020 /PRNewswire/ -- CSI Compressco LP ("CSI
Compressco" or the "Partnership") (NASDAQ: CCLP) today announced
second quarter 2020 results.
Net loss for the second quarter ended June 30, 2020 was
$24.6 million, inclusive of
$15.8 million of non-recurring
charges. This compares to a net loss of $13.6 million, in the first quarter of 2020,
which included $6.0 million of
non-recurring charges. Adjusted EBITDA in the second quarter was
$27.0 million compared to
$27.8 million in the first quarter of
2020. Revenues for the quarter ended June 30, 2020 were
$96 million, an increase of 7% from
the first quarter of 2020 driven by $17.8
million of incremental equipment sales.
Brady Murphy, President of CSI
Compressco commented, "Our second quarter results reflect the
exceptional job by our management team and employees of managing
costs, maintaining strong Adjusted EBITDA margins and generating
positive cash flow in one of the most challenging quarters our
industry has ever experienced due to the COVID-19 pandemic. With
steep declines in spending by the oil and gas operators, as
evidenced by a 64% decline in the US onshore rig count during the
quarter, CSI Compressco was able to maintain Adjusted EBITDA
relatively flat at $27 million
compared to the first quarter. Working in a very difficult
and dynamic environment, our employees and management team
continued to safely and efficiently service our customers as we
dealt with challenging working conditions while simultaneously
taking the required actions to reduce our cost structure in line
with the steep decline in activity."
"During the quarter we saw the benefit of our quick and decisive
cost reduction initiatives. Compression Services costs were
reduced by 20% from the first quarter compared to a 14% sequential
decline in Compression Services revenue and a decline in the
utilization rate from 86.5% to 82.1%. As a result of
difficult but decisive cost actions, Compression Services gross
margins increased by 300 basis points to 54.9% - the highest
Compression Services gross margins in CSI Compressco's
history. Approximately 15% of our total domestic horsepower
was on standby during the quarter as customers shut in production
given the low commodity prices. As oil prices stabilized and began
to improve during the latter part of the quarter, many operators
started to bring production back online. A large majority of our
remaining units are on standby with our two largest customers -
both super majors that have the balance sheet to maintain shut in
production in anticipation of higher oil prices. One of them will
go operational with most of their standby units starting
August 1st."
"Aftermarket Services revenue declined 12% while gross margins
improved sequentially from 9.6% in the first quarter to 14.6% in
the second quarter. Equipment Sales revenue increased from
$6.5 million in the first quarter to
$24.3 million in the second quarter
on delivery of several large units to Latin America. We
previously announced plans to close our fabrication operations
given the decline in demand. Our final shipments will occur
in the third quarter of 2020. In early July we completed the
sale of the Midland, Texas
fabrication facility for gross proceeds of $17 million. These funds were received in early
July."
"Cash from operations was $4.8
million in the second quarter, compared to $13.4 million in the first quarter. Distributable
cash flow in the second quarter of 2020 was $8.4 million, down 4% from the first quarter of
2020, resulting in a distribution coverage ratio of 17.5x."
This press release includes the following financial measures
that are not presented in accordance with generally accepted
accounting principles in the United
States ("GAAP"): Adjusted EBITDA, Adjusted EBITDA Margin,
distributable cash flow, distribution coverage ratio, free cash
flow, and net leverage ratio. Please see Schedules B-E for
reconciliations of these non-GAAP financial measures to the most
directly comparable GAAP measures.
Unaudited results of operations for the quarter ended
June 30, 2020 compared to the prior quarter and the
corresponding prior year quarter are presented in the table
below.
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
Jun 30,
2020
|
|
Mar 31,
2020
|
|
Jun 30,
2019
|
|
Q2-2020 v
Q1-2020
|
|
Q2-2020 v Q2-
2019
|
|
(In Thousands, except
percentage changes)
|
Net loss
|
$
|
(24,578)
|
|
|
$
|
(13,630)
|
|
|
$
|
(2,947)
|
|
|
(80)
|
%
|
|
(734)
|
%
|
Adjusted
EBITDA
|
$
|
27,047
|
|
|
$
|
27,762
|
|
|
$
|
32,763
|
|
|
(3)
|
%
|
|
(17)
|
%
|
Distributable cash
flow
|
$
|
8,405
|
|
|
$
|
8,728
|
|
|
$
|
15,727
|
|
|
(4)
|
%
|
|
(47)
|
%
|
Net cash provided by
operating activities
|
$
|
4,823
|
|
|
$
|
13,357
|
|
|
$
|
8,710
|
|
|
(64)
|
%
|
|
(45)
|
%
|
Free cash
flow
|
$
|
3,698
|
|
|
$
|
6,874
|
|
|
$
|
(7,724)
|
|
|
(46)
|
%
|
|
N/M
|
As of June 30, 2020, service compressor fleet horsepower
was 1,178,721 and fleet horsepower in service was 967,505 (we
define the overall service fleet utilization rate as the service
compressor fleet horsepower in service divided by the total
compressor fleet horsepower). Idle horsepower equipment under
repair is not considered utilized, but we do count units on standby
as utilized when the client is being billed a standby service
rate.
During the quarter we incurred $15.8
million of non-recurring charges. These include
non-cash charges of $9.0 million to
write-down the value of certain compressors and related
inventory. Non-recurring costs in the quarter also included
$4.8 million of transaction,
accounting and legal fees associated with the recently completed
bond exchange. Additionally, $2.1
million of other costs, mainly severance and costs
associated with right-sizing the organization were incurred.
Balance Sheet
Cash on hand at the end of the second quarter was $6.8 million. Drawn and outstanding on the
Partnership's asset-based loan at the end of the second quarter was
$1.5 million.
During the second quarter we successfully completed an exchange
of $215 million of the August 2022 unsecured bonds into $50 million first lien secured bonds due in 2025
and into $156 million second lien
secured bonds due in 2026. As part of the exchange, total
long-term amounts outstanding on the bonds was reduced by
$9 million. The coupon on the
August 2022 unsecured bonds is 7.25%,
the coupon on the 2025 first lien secured bonds is 7.5% and the
coupon on the 2026 second lien secured bonds is either 10% cash or
7.25% cash plus 3.50% payment in kind, at CSI Compressco's
option.
Our debt maturity schedule now reflects $81 million of unsecured bonds due in August,
2022, $400 million of first lien
secured bonds due in 2025 and $156
million of second lien secured bonds due 2026. Our net
leverage ratio at the end of the quarter was 5.1X.
CSI Compressco initiated a series of actions to generate
incremental liquidity and further strengthen our balance
sheet. The Midland, Texas
fabrication facility and real estate was sold in early July for
$17 million in gross cash proceeds
(funds were received in early July). We also completed or
expect to complete in two separate transactions the sale of idle
compressors for $9 million during the
third quarter. We further expect to provide aftermarket
services on some of these units that are being sold to an existing
customer. The combination of these asset sales would generate
approximately $26 million of cash,
before transaction expenses, to further strengthen our balance
sheet.
Capital Expenditures - 2020 Expectations
We expect capital expenditures for 2020 to be between
$28 million and $35 million, unchanged from our prior
guidance. The forecast includes between $5 million and $8
million for new fleet additions. Maintenance capital
expenditures are expected to be between $20
million and $22 million.
Investments in technology and automation are expected to be between
$3 million and $5 million.
Second Quarter 2020 Cash Distribution on Common Units
On July 20, 2020, CSI Compressco
announced that the board of directors of its general partner
declared a cash distribution attributable to the second quarter of
2020 of $0.01 per outstanding common
unit, which will be paid on August 14,
2020, to common unitholders of record as of the close of
business on August 1, 2020. The
distribution coverage ratio for the second quarter of 2020 was
17.5x.
Conference Call
CSI Compressco will host a conference call to discuss second
quarter 2020 results today, August 3, 2020, at 9:30 a.m. Eastern Time. The phone number for
the call is 1-866-374-8397. The conference call will also be
available by live audio webcast and may be accessed through CSI
Compressco's website at www.csicompressco.com. An audio
replay of the conference call will be available at 1-877-344-7529,
conference number 10138621, for one week following the conference
call and the archived webcast will be available through CSI
Compressco's website for thirty days following the conference
call.
CSI Compressco Overview
CSI Compressco is a provider of compression services and
equipment for natural gas and oil production, gathering, artificial
lift, transmission, processing, and storage. CSI Compressco's
compression and related services business includes a fleet of more
than 4,900 compressor packages providing approximately 1.18 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 and related services in certain Latin
American markets. CSI Compressco's aftermarket business provides
compressor package reconfiguration and maintenance services. CSI
Compressco's customers comprise a broad base of natural gas and oil
exploration and production, midstream, 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 news 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 news
release are identifiable by the use of the following words and
other similar words: "anticipates," "assumes," "believes,"
"budgets," "could," "estimates," "expectations," "expects,"
"forecasts," "goal," "intends," "may," "might," "plans,"
"predicts," "projects," "schedules," "seeks," "should," "targets,"
"will," and "would." These forward-looking statements include
statements, other than statements of historical fact, including
anticipated reductions in demand from our customers, future
capital expenditures, reductions in SG&A and direct operating
costs, the planned sale of idle compressors, resumed production of
previously shut-in wells, commodity prices and demand for CSI
Compressco's equipment and services and other statements regarding
CSI Compressco's beliefs, expectations, plans, prospects and other
future events, 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 condition that are outside of our control,
including the trading price of our common units; the severity and
duration of the COVID-19 pandemic and related economic
repercussions and the resulting negative impact on the demand
for oil and gas , operational challenges relating to the COVID-19
pandemic and efforts to mitigate the spread of the virus, including
logistical challenges, remote work arrangements, and supply chain
disruptions, other global or national health concerns; the current
significant surplus in the supply of oil and the ability of OPEC
and other oil producing nations to agree on and comply with supply
limitations; the duration and magnitude of the unprecedented
disruption in the oil and gas industry; the levels of competition
we encounter; our dependence upon a limited number of customers and
the activity levels of our customers; our ability to replace our
contracts with our customers, which are generally short-term
contracts; the availability of adequate sources of capital to us;
our existing debt levels and our ability to obtain additional
financing; our ability to continue to make cash distributions, or
increase cash distributions from current levels, after the
establishment of reserves, payment of debt service and other
contractual obligations; the restrictions on our business that are
imposed under our long-term debt agreements; our operational
performance; the credit and risk profile of TETRA Technologies,
Inc.; ability of our general partner to retain key personnel; 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; or potential material weaknesses in the future;
information technology risks, including the risk of cyberattack;
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 verbal 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.
Schedule A -
Income Statement
|
|
|
|
|
|
|
|
|
Results of
Operations (unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
Jun 30,
2020
|
|
Mar 31,
2020
|
|
Jun 30,
2019
|
|
Jun 30,
2020
|
|
Jun 30,
2019
|
|
(In Thousands, Except
per Unit Amounts)
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Compression and
related services
|
$
|
56,336
|
|
|
$
|
65,765
|
|
|
$
|
64,876
|
|
|
$
|
122,101
|
|
|
$
|
127,578
|
|
Aftermarket
services
|
15,737
|
|
|
17,970
|
|
|
18,156
|
|
|
33,707
|
|
|
31,770
|
|
Equipment
sales
|
24,340
|
|
|
6,544
|
|
|
52,824
|
|
|
30,884
|
|
|
79,944
|
|
Total
revenues
|
$
|
96,413
|
|
|
$
|
90,279
|
|
|
$
|
135,856
|
|
|
$
|
186,692
|
|
|
$
|
239,292
|
|
Cost of revenues
(excluding depreciation and
amortization expense):
|
|
|
|
|
|
|
|
|
|
Cost of compression
and related services
|
$
|
25,395
|
|
|
$
|
31,608
|
|
|
$
|
30,520
|
|
|
$
|
57,003
|
|
|
$
|
63,141
|
|
Cost of aftermarket
services
|
13,433
|
|
|
16,245
|
|
|
15,418
|
|
|
29,678
|
|
|
26,678
|
|
Cost of equipment
sales
|
24,415
|
|
|
6,700
|
|
|
47,412
|
|
|
31,115
|
|
|
71,631
|
|
Total cost of
revenues
|
$
|
63,243
|
|
|
$
|
54,553
|
|
|
$
|
93,350
|
|
|
$
|
117,796
|
|
|
$
|
161,450
|
|
Depreciation and
amortization
|
20,117
|
|
|
19,908
|
|
|
19,054
|
|
|
40,025
|
|
|
37,586
|
|
Impairments of
long-lived assets
|
8,977
|
|
|
5,371
|
|
|
2,311
|
|
|
14,348
|
|
|
2,311
|
|
Insurance
recoveries
|
(517)
|
|
|
|
|
—
|
|
|
(517)
|
|
|
—
|
|
Selling, general, and
administrative expense
|
10,172
|
|
|
10,256
|
|
|
10,974
|
|
|
20,428
|
|
|
21,639
|
|
Interest expense,
net
|
13,580
|
|
|
13,169
|
|
|
13,045
|
|
|
26,749
|
|
|
26,344
|
|
Series A Preferred
fair value adjustment
|
—
|
|
|
—
|
|
|
166
|
|
|
—
|
|
|
1,470
|
|
Other expense,
net
|
4,403
|
|
|
440
|
|
|
607
|
|
|
4,843
|
|
|
226
|
|
Loss before income
tax provision
|
$
|
(23,562)
|
|
|
$
|
(13,418)
|
|
|
$
|
(3,651)
|
|
|
$
|
(36,980)
|
|
|
$
|
(11,734)
|
|
Provision (benefit)
for income taxes
|
1,016
|
|
|
212
|
|
|
(704)
|
|
|
1,228
|
|
|
3,669
|
|
Net loss
|
$
|
(24,578)
|
|
|
$
|
(13,630)
|
|
|
$
|
(2,947)
|
|
|
$
|
(38,208)
|
|
|
$
|
(15,403)
|
|
Net loss per diluted
common unit
|
$
|
(0.51)
|
|
|
$
|
(0.28)
|
|
|
$
|
(0.06)
|
|
|
$
|
(0.79)
|
|
|
$
|
(0.32)
|
|
Reconciliation of Non-GAAP Financial Measures
The Partnership includes in this release the non-GAAP financial
measures Adjusted EBITDA, Adjusted EBITDA margin, distributable
cash flow, distribution coverage ratio, free cash flow, and net
leverage ratio. Adjusted 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 Adjusted EBITDA as earnings before
interest, taxes, depreciation and amortization, and before certain
charges, including impairments, bad debt expense attributable
to bankruptcy of customers, equity compensation, non-cash costs of
compressors sold, fair value adjustments of our Preferred Units
that were issued in late 2016 and redeemed for cash on August 8, 2019, gain on extinguishment of debt,
write-off of unamortized financing costs, and excluding, Preferred
Units redemption premium severance and other non-recurring or
unusual expenses or charges.
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 Adjusted EBITDA less current income tax
expense, maintenance capital expenditures, interest expense, and
severance expense, plus non-cash interest 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 units, the general
partner interest and the general partner's incentive distribution
rights.
The Partnership defines free cash flow as net cash provided by
operating activities less capital expenditures, net of sales
proceeds. Management primarily uses this metric to assess our
ability to retire debt, evaluate our capacity to further invest and
grow, and measure our performance as compared to our peer group of
companies.
The Partnership defines net leverage ratio as net debt (the sum
of the carrying value of long-term and short-term debt on its
consolidated balance sheet, less cash, excluding restricted cash on
the consolidated balance sheet and excluding outstanding letters of
credit) divided by Adjusted EBITDA for Net Leverage Calculation
(Adjusted EBITDA as reported externally adjusted for certain items
to comply with its credit agreement) for the trailing twelve month
period. Management primarily uses this metric to assess the
Partnership's ability to borrow, reduce debt, add to cash balances,
pay distributions, and fund investing and financing activities.
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 Adjusted EBITDA, gross margin,
distributable cash flow, free 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.
Schedule B -
Reconciliation of Net Loss to Adjusted EBITDA, Distributable Cash
Flow and Distribution
Coverage Ratio
|
|
The following table
reconciles net loss to Adjusted EBITDA, distributable cash flow and
distribution coverage
ratio for the three and six month periods ended June 30, 2020,
March 31, 2020 and June 30, 2019:
|
|
Results of
Operations (unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
Jun 30,
2020
|
|
Mar 31,
2020
|
|
Jun 30,
2019
|
|
Jun 30,
2020
|
|
Jun 30,
2019
|
|
(In Thousands, except
Ratios)
|
Net loss
|
$
|
(24,578)
|
|
|
$
|
(13,630)
|
|
|
$
|
(2,947)
|
|
|
$
|
(38,208)
|
|
|
$
|
(15,403)
|
|
Interest expense,
net
|
13,580
|
|
|
13,169
|
|
|
13,045
|
|
|
26,749
|
|
|
26,344
|
|
Provision for income
taxes
|
1,016
|
|
|
212
|
|
|
(704)
|
|
|
1,228
|
|
|
3,669
|
|
Depreciation and
amortization
|
20,117
|
|
|
19,908
|
|
|
19,054
|
|
|
40,025
|
|
|
37,586
|
|
Impairments of fixed
assets and inventory
|
8,977
|
|
|
5,371
|
|
|
2,464
|
|
|
14,348
|
|
|
2,464
|
|
Non-cash cost of
compressors sold
|
631
|
|
|
1,809
|
|
|
98
|
|
|
2,440
|
|
|
1,038
|
|
Equity
compensation
|
488
|
|
|
324
|
|
|
590
|
|
|
812
|
|
|
955
|
|
Series A Preferred
redemption premium
|
—
|
|
|
—
|
|
|
621
|
|
|
—
|
|
|
1,069
|
|
Series A Preferred
fair value adjustments
|
—
|
|
|
—
|
|
|
166
|
|
|
—
|
|
|
1,470
|
|
Bond exchange
expenses
|
4,755
|
|
|
—
|
|
|
—
|
|
|
4,755
|
|
|
—
|
|
Severance
|
1,084
|
|
|
272
|
|
|
—
|
|
|
1,356
|
|
|
—
|
|
Other
|
977
|
|
|
327
|
|
|
376
|
|
|
1,304
|
|
|
376
|
|
Adjusted
EBITDA
|
$
|
27,047
|
|
|
$
|
27,762
|
|
|
$
|
32,763
|
|
|
$
|
54,809
|
|
|
$
|
59,568
|
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
Current income tax
expense
|
615
|
|
|
204
|
|
|
(184)
|
|
|
819
|
|
|
2,723
|
|
Maintenance capital
expenditures
|
3,951
|
|
|
6,490
|
|
|
4,900
|
|
|
10,441
|
|
|
10,629
|
|
Interest
expense
|
13,580
|
|
|
13,169
|
|
|
13,045
|
|
|
26,749
|
|
|
26,344
|
|
Severance and
other
|
2,061
|
|
|
599
|
|
|
376
|
|
|
2,660
|
|
|
376
|
|
Plus:
|
|
|
|
|
|
|
|
|
|
Non-cash items
included in interest expense
|
1,565
|
|
|
1,428
|
|
|
1,101
|
|
|
2,994
|
|
|
2,529
|
|
Distributable cash
flow
|
$
|
8,405
|
|
|
$
|
8,728
|
|
|
$
|
15,727
|
|
|
$
|
17,134
|
|
|
$
|
22,025
|
|
|
|
|
|
|
|
|
|
|
|
Cash distribution
attributable to period
|
$
|
480
|
|
|
$
|
478
|
|
|
$
|
477
|
|
|
$
|
958
|
|
|
$
|
954
|
|
Distribution coverage
ratio
|
17.5x
|
|
|
18.3x
|
|
33.0x
|
|
|
17.9x
|
|
|
23.1x
|
|
Schedule C -
Reconciliation of Net Cash Provided by Operating Activities
Operations to Free Cash Flow
|
|
The following table
reconciles net cash provided by operating activities to free cash
flow for the three and six
month periods ended June 30, 2020, March 31, 2020 and
June 30, 2019:
|
|
Results of
Operations (unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
Jun 30,
2020
|
|
Mar 31,
2020
|
|
Jun 30,
2019
|
|
Jun 30,
2020
|
|
Jun 30,
2019
|
|
(In
Thousands)
|
Net cash provided by
operating activities
|
$
|
4,823
|
|
|
$
|
13,357
|
|
|
$
|
8,710
|
|
|
$
|
18,180
|
|
|
$
|
40,342
|
|
Capital expenditures,
net of sales proceeds
|
(1,125)
|
|
|
(6,483)
|
|
|
(16,434)
|
|
|
(7,608)
|
|
|
(39,586)
|
|
Free cash
flow
|
$
|
3,698
|
|
|
$
|
6,874
|
|
|
$
|
(7,724)
|
|
|
$
|
10,572
|
|
|
$
|
756
|
|
|
Schedule D – Reconciliation to Adjusted
EBITDA Margin (unaudited)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
Jun 30,
2020
|
|
Mar 31,
2020
|
|
Jun 30,
2019
|
|
Jun 30,
2020
|
|
Jun 30,
2019
|
Consolidated
|
(In Thousands, except
Margin %)
|
Revenue
|
96,413
|
|
|
90,279
|
|
|
135,856
|
|
|
186,692
|
|
|
239,292
|
|
Adjusted EBITDA
(Schedule B)
|
27,047
|
|
|
27,762
|
|
|
32,763
|
|
|
54,809
|
|
|
59,568
|
|
Adjusted EBITDA
Margin
|
28.1
|
%
|
|
30.8
|
%
|
|
24.1
|
%
|
|
29.4
|
%
|
|
24.9
|
%
|
Schedule E
– Reconciliation of Net Loss to Adjusted EBITDA for Net
Leverage Ratio Calculation (unaudited)
|
(in thousands, except
ratios)
|
|
|
Twelve Months
Ended
|
|
Jun 30,
2020
|
|
|
Net loss
|
$
|
(43,778)
|
|
Interest expense,
net
|
53,780
|
|
Provision for income
taxes
|
912
|
|
Depreciation and
amortization
|
79,102
|
|
Impairments and other
charges
|
15,197
|
|
Bad debt expense
attributable to bankruptcy of customer
|
1,768
|
|
Non-cash cost of
compressors sold
|
7,425
|
|
Equity
Compensation
|
921
|
|
Series A Preferred
redemption premium
|
399
|
|
Severance
|
1,474
|
|
Other
|
1,558
|
|
Adjusted
EBITDA
|
$
|
123,513
|
|
EBITDA adjustments to
comply with Credit Agreement
|
(404)
|
|
Adjusted EBITDA for
Net Leverage Calculation
|
$
|
123,109
|
|
|
|
Debt
Schedule
|
Jun 30,
2020
|
7.25% Senior
Notes
|
80,722
|
|
7.50% First Lien
Notes
|
400,000
|
|
10.00%/10.75% Second
Lien Notes
|
155,529
|
|
Asset Based
Loan
|
1,477
|
|
Letters of
Credit
|
2,830
|
|
Cash on
Hand
|
6,757
|
|
Net
Debt
|
$
|
633,801
|
|
|
|
Net Leverage Ratio
(Net Debt/Adjusted EBITDA for
Net Leverage Calculation)
|
5.1x
|
|
|
|
|
|
Schedule F
– Balance Sheet
|
|
|
June 30,
2020
|
|
December 31,
2019
|
(in
thousands)
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
6,757
|
|
|
$
|
2,370
|
|
Trade accounts
receivable, net of allowances for doubtful accounts of $3,441
as
of June 30, 2020 and $3,350 as of December 31, 2019
|
49,627
|
|
|
64,724
|
|
Inventories
|
40,192
|
|
|
56,037
|
|
Prepaid expenses and
other current assets
|
6,336
|
|
|
4,162
|
|
Total current
assets
|
102,912
|
|
|
127,293
|
|
Property, plant, and
equipment:
|
|
|
|
Land and
building
|
32,058
|
|
|
35,125
|
|
Compressors and
equipment
|
992,573
|
|
|
976,469
|
|
Vehicles
|
8,127
|
|
|
9,205
|
|
Construction in
progress
|
8,477
|
|
|
26,985
|
|
Total property, plant,
and equipment
|
1,041,235
|
|
|
1,047,784
|
|
Less accumulated
depreciation
|
(434,600)
|
|
|
(405,417)
|
|
Net property, plant,
and equipment
|
606,635
|
|
|
642,367
|
|
Other
assets:
|
|
|
|
Deferred tax
asset
|
24
|
|
|
24
|
|
Intangible assets, net
of accumulated amortization of $29,231 as of June 30,
2020 and $27,751 as of December 31, 2019
|
26,537
|
|
|
28,017
|
|
Operating lease
right-of-use assets
|
29,936
|
|
|
21,006
|
|
Other
assets
|
3,694
|
|
|
3,539
|
|
Total other
assets
|
60,191
|
|
|
52,586
|
|
Total
assets
|
$
|
769,738
|
|
|
$
|
822,246
|
|
LIABILITIES AND
PARTNERS' CAPITAL
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
25,432
|
|
|
$
|
47,837
|
|
Unearned
income
|
11,164
|
|
|
9,505
|
|
Accrued liabilities
and other
|
37,590
|
|
|
42,581
|
|
Amounts payable to
affiliates
|
13,074
|
|
|
7,704
|
|
Total current
liabilities
|
87,260
|
|
|
107,627
|
|
Other
liabilities:
|
|
|
|
Long-term debt,
net
|
637,579
|
|
|
638,238
|
|
Deferred tax
liabilities
|
1,390
|
|
|
1,211
|
|
Long-term affiliate
payable
|
12,019
|
|
|
12,324
|
|
Operating lease
liabilities
|
21,140
|
|
|
13,822
|
|
Other long-term
liabilities
|
20
|
|
|
33
|
|
Total other
liabilities
|
672,148
|
|
|
665,628
|
|
Commitments and
contingencies
|
|
|
|
Partners'
capital:
|
|
|
|
General partner
interest
|
(371)
|
|
|
180
|
|
Common units
(47,344,351 units issued and outstanding at June 30, 2020 and
47,078,529 units issued and outstanding at December 31,
2019)
|
25,450
|
|
|
63,384
|
|
Accumulated other
comprehensive income (loss)
|
(14,749)
|
|
|
(14,573)
|
|
Total partners'
capital
|
10,330
|
|
|
48,991
|
|
Total liabilities and
partners' capital
|
$
|
769,738
|
|
|
$
|
822,246
|
|
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SOURCE CSI Compressco LP