THE WOODLANDS, Texas,
Feb. 27, 2019 /PRNewswire/
-- CSI Compressco LP ("CSI Compressco" or the "Partnership")
(NASDAQ: CCLP) today announced fourth quarter and full year 2018
consolidated financial results.
Consolidated revenues for the quarter ended December 31, 2018 were $138 million compared to $115 million for the third quarter of 2018 and
$83 million for the fourth quarter of
2017. Compared to the third quarter of 2018, total revenues
increased 20% driven by a record high of new equipment sales,
stronger aftermarket services activity, and continued improvements
in Compression and related services. Net loss for the quarter
ended December 31, 2018 was
$3.7 million compared to a net loss
of $7.9 million in the third quarter
of 2018 and a net loss of $10.7
million in the fourth quarter of 2017.
Selected key operational and financial metrics for the fourth
quarter are as follows:
- Fourth quarter Adjusted EBITDA(1) improved by 14% to
$30.2 million from the third quarter
of 2018.
- Compression and related services gross margin was 43.6% in the
fourth quarter, which includes the impact of a $2.1 million non-income tax contingency.
Excluding this item, Compression and related services gross margin
would have been 47.1%(1) in the fourth quarter compared
to 47.2% in the third quarter of 2018.
- Distributable cash flow(1) improved to $13.3 million, up 48% from the third quarter of
2018 and, combined with our distribution cut, resulted in a
distribution coverage ratio(1) of 28x.
- Overall, service fleet utilization increased from the third
quarter by 30 bps to 86.6%. Utilization for high horsepower
equipment (greater than 1,000 horsepower per unit) was 95.0%.
- Backlog for new equipment sales was $105.2 million as of December 31, 2018, following over $53 million in new equipment sales in the fourth
quarter.
- New equipment orders received in the fourth quarter totaled
$18.0 million while total orders
received in 2018 were $188
million.
- On December 20, 2018, we
announced a reduction in the quarterly common unit distribution. We
intend to use the savings to cash redeem the remaining outstanding
Series A Convertible Preferred Units to avoid further dilution to
the common unit holders.
(1) These measures
are not presented in accordance with generally accepted accounting
principles in the United States ("GAAP"). Please see
Schedules B, C, D and E for reconciliations of these non-GAAP
financial measures to the most directly comparable GAAP
measures
|
Unaudited results of operations for the quarter ended
December 31, 2018 compared to the
prior quarter and the corresponding prior year quarter are
presented in the accompanying financial tables.
|
Three Months
Ended
|
|
|
|
|
|
|
|
Dec 31,
2018
|
|
Sep 30,
2018
|
|
Dec 31,
2017
|
|
Q4-18 vs.
Q3-18
|
|
Q4-18 vs.
Q4-17
|
|
(In Thousands, Except
Ratios, and Percentages)
|
Net loss
|
$
(3,702)
|
|
$
(7,947)
|
|
$
(10,673)
|
|
53
|
%
|
|
65
|
%
|
Adjusted
EBITDA(1)
|
$
30,178
|
|
$
26,539
|
|
$
21,022
|
|
14
|
%
|
|
44
|
%
|
Distributable cash
flow(1)
|
$
13,283
|
|
$
8,959
|
|
$
5,368
|
|
48
|
%
|
|
147
|
%
|
Quarterly cash
distribution per unit
|
$
0.01
|
|
$
0.1875
|
|
$
0.1875
|
|
(95)
|
%
|
|
(95)
|
%
|
Distribution coverage
ratio(1)
|
28x
|
|
1.07x
|
|
0.73x
|
|
—
|
|
—
|
Fleet capital
expenditures
|
$
19,159
|
|
$
26,219
|
|
$
4,368
|
|
(27)
|
%
|
|
339
|
%
|
Net cash provided by
operating activities
|
$
23,605
|
|
$
10,789
|
|
$
14,496
|
|
126
|
%
|
|
68
|
%
|
Free cash
flow(1)
|
$
(1,720)
|
|
$
(20,113)
|
|
$
3,083
|
|
91
|
%
|
|
(156)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) These measures
are not presented in accordance with generally accepted accounting
principles in the United States ("GAAP") Please see Schedules
B, C and D for the reconciliations of these non-GAAP financial
measures to the most directly comparable GAAP measures.
|
Owen Serjeant, President of CSI Compressco, commented, "We
continue to see strong demand for all of our service and product
offerings. We are extremely pleased with another strong
sequential improvement in our results, which was consistent with
our expectations. Despite the pull back in oil prices in the
fourth quarter of 2018, we have seen no material slowdown in any of
our businesses and remain bullish on 2019 given the feedback and
queries we are getting from our customers. However, while we
do not expect new equipment sales to continue at the record high
levels we experienced in the fourth quarter, we continue to see
that business line performing well.
"We further expect that as oil and gas operators and midstream
companies continue to build out their networks and infrastructures
to move increased volumes of produced associated gas, the demand
for our products and services will continue to be strong.
"While our customers are revising their 2019 budgets to fit the
updated macro outlook, we believe any negative impact of these
revisions for our business will be minimal, and could be seen in
our new equipment orders where project timing is still difficult to
predict. Overall, however, we believe 2019 will represent a
strong improvement from 2018 given the orders and commitments we
have from our customers for additional Compression and related
services and a continued strong aftermarket services market
environment. We also have a healthy backlog for equipment
sales as of December 31, 2018 that
will support our 2019 equipment sales. Customer demand for
high horsepower compression equipment in key basins remains strong
and our key customers continue to invest in infrastructure that
requires large amounts of new build compression equipment.
"New equipment orders totaled $18.0
million in the fourth quarter while total orders received in
2018 were $188 million. Most of these
orders were from Permian Basin midstream companies investing to
address takeaway constraints and building gas processing plants,
which continue to offer opportunities to us as the largest
vertically integrated compression supplier. At the end of
2018, our new equipment sales backlog was $105.2 million, all of which we expect to deliver
in 2019. In the first two months of 2019, we received another
$12 million of orders. Our
customers are still putting their 2019 budgets together, but we
have an active and robust new equipment quotation pipeline and
anticipate stronger incoming orders as the year progresses and as
customers continue with their investment plans. However, we
do not expect new equipment orders in 2019 to match the 2018
levels. Orders placed after the first quarter of 2019 will
likely be delivered in 2020 due to lead times of the key components
for our equipment.
"Compression and related services revenue was $60.6 million in the fourth quarter and
Compression and related services gross margin was 43.6%.
Compression and related services gross margins excluding the impact
of tax contingency of $2.1 million
was 47.1% (see Schedule D for reconciliation of this non-GAAP
financial measure) decreased slightly from the third quarter due to
slightly higher labor and inventory-related costs. However,
we continue to see the benefits from better pricing and other
efficiencies as contracts roll over, as additional high horsepower
units are deployed at higher rates, and from the benefits of our
ERP system, which improves operational efficiencies. New
Compression and related services equipment is being directed
primarily to existing customers in concentrated horsepower areas,
with minimal incremental costs. Pricing opportunities are
still available to us as contracts roll over and as we deploy new
equipment. In 2018 we deployed 92,822 of new horsepower to
our service fleet, mainly high horsepower equipment targeted at our
existing customers who are focused on gathering systems and
centralized gas lift.
"New equipment sales activities, which complement our
Compression and related services business, had an extremely strong
quarter as we delivered the highest quarterly sales since the
acquisition of Compressor Systems, Inc. in 2014. Revenue from
equipment sales was $55.6 million, an
increase of 52% over the third quarter. While we do not
expect to repeat this level of equipment sales in the first
or second quarters of 2019, we believe demand remains robust.
We expect the first quarter of 2019 to be near the levels of the
second or third quarter of 2018 for equipment sales. Our
ability to fabricate this equipment in our facility in Midland, Texas continues to be a competitive
advantage from a cost, quality and timing perspective.
"Aftermarket services activity continues to improve and deliver
strong growth year over year. Aftermarket services revenue
increased 10% over the third quarter of 2018. We expect this
business to continue to stay strong as the industry adds horsepower
to the market and requires minor and major equipment overhauls and
part sales.
"As of December 31, 2018,
aggregate Compression and related services fleet horsepower totaled
1,135,477 and the overall fleet utilization rate was 86.6%.
We define the fleet utilization rate as the aggregate
compressor package horsepower in service divided by the aggregate
compressor package fleet horsepower as of such date. We do
not exclude idle horsepower under repair or horsepower that is
otherwise impaired from our calculation of utilization rates."
On December 20, 2018, CSI
Compressco announced that it intended to reduce the quarterly
common unit distribution for the fourth quarter of 2018 from
$0.1875 per unit ($0.75 per unit per year) to $0.01 per unit ($0.04 per unit per year) for a period of up to
four quarters. Our intention is to review the amount of the
quarterly distribution in the second half of 2019. We intend
to use the savings from the reduced distributions to cash redeem
the remaining outstanding Series A Convertible Preferred units in
order to avoid further diluting our existing common unit holders,
which we believe to be a prudent move as a result of our low common
unit trading price despite a strong earnings environment and
outlook. Our goal, which we stated at the May 31, 2018 Investor Conference in New York City continues to be to improve our
Adjusted EBITDA leverage ratio from the current levels to 4.5x or
below, and we believe we are making great progress towards that
goal.
Forward-Looking Guidance
As announced on December 20, 2018, we
expect 2019 revenue to be between $490
million and $520 million and
Adjusted EBITDA to be between $125
million and $140
million. We further expect that our average
distribution coverage ratio for 2019 will be between 30x and 35x in
2019 with aggregate 2019 distributable cash flow increasing to
between $55.5 million and
$68.5 million. Reconciliations
of expected Adjusted EBITDA, distributable cash flow, free cash
flow and distribution coverage ratio to the nearest GAAP financial
measures are included on Schedules B, C, D and E.
We expect 2019 total capital expenditures to total $60 million to $65
million, which we expect to fund from cash on hand and cash
flow from operations. This range includes $18 million to $20
million for maintenance capital expenditures and
$42 million to $45 million of growth capital expenditures that
would provide approximately 79,000 of horsepower to be deployed to
our fleet in 2019, all with client commitments. This range
excludes $15 million, or 20,700
horsepower, that TETRA has agreed to purchase and lease to us under
a five-year financing lease. We have the right to buy the
equipment any time over the next five years in accordance with the
terms of the agreements with TETRA, and have no obligation to buy
the equipment at the end of the five-year term. This support
from TETRA will allow us to meet current client demands without
having to access the debt and equity markets or our credit
facility.
Conference Call
CSI Compressco will host a conference call to discuss fourth
quarter and full year 2018 results today, February 27, 2018, at 10:30 a.m. Eastern Time. The phone number
for the call is 1-866-374-8397. The conference will also be
available by live audio webcast and may be accessed through CSI
Compressco's website at www.csicompressco.com. A replay of
the conference call will be available at 1-877-344-7529, conference
number 10127832, for one week following the conference call and the
archived webcast call will be available through the Company's
website for thirty days following the conference call.
Fourth Quarter 2018 Cash Distribution on Common Units
On January 22, 2019, CSI Compressco
announced that the board of directors of its general partner
declared a cash distribution attributable to the fourth quarter of
2018 of $0.01 per outstanding common
unit, which was paid on February 14,
2019, to common unitholders of record as of the close of
business on February 1, 2019.
The distribution coverage ratio (which is a non-GAAP Financial
Measure defined and reconciled to the closest GAAP financial
measure on Schedule B below) for the fourth quarter of 2018 was
28x.
CSI Compressco Overview
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 more than 5,700
compressor packages providing approximately 1.14 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 Mexico. CSI Compressco's equipment sales
business includes the fabrication and sale of standard compressor
packages and custom-designed compressor packages designed and
fabricated primarily at our facility in Midland, Texas. CSI Compressco's
aftermarket business provides compressor package reconfiguration
and maintenance services, as well as the sale of compressor package
parts and components manufactured by third-party suppliers.
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 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," "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, concerning the recovery
of the oil and gas industry and CSI Compressco's strategy, future
operations, financial position, estimated revenues, negotiations
with our bank lenders, projected costs, and other statements
regarding CSI Compressco's beliefs, expectations, plans, prospects
and other future events and performance. 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; the loss of our management; 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
|
|
Twelve Months
Ended
|
|
Dec 31,
2018
|
|
Sep 30,
2018
|
|
Dec 31,
2017
|
|
Dec 31,
2018
|
|
Dec 31,
2017
|
|
(in Thousands, Except
per Unit Amounts
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Compression and
related services
|
$
60,582
|
|
$
58,869
|
|
$
53,359
|
|
$
229,895
|
|
$
205,774
|
Aftermarket
services
|
21,928
|
|
19,869
|
|
10,854
|
|
70,907
|
|
40,287
|
Equipment
sales
|
55,558
|
|
36,518
|
|
18,888
|
|
137,861
|
|
49,505
|
Total
revenues
|
138,068
|
|
115,256
|
|
83,101
|
|
438,663
|
|
295,566
|
Cost of revenues
(excluding depreciation and amortization expense):
|
|
|
|
|
|
|
|
|
|
Cost of Compression
and related services
|
34,165
|
|
31,074
|
|
30,763
|
|
127,128
|
|
116,956
|
Cost of aftermarket
services
|
17,707
|
|
16,165
|
|
8,440
|
|
57,870
|
|
32,256
|
Cost of equipment
sales
|
50,334
|
|
33,458
|
|
16,145
|
|
123,399
|
|
44,286
|
Total cost of
revenues
|
102,206
|
|
80,697
|
|
55,348
|
|
308,397
|
|
193,498
|
Depreciation and
amortization
|
18,004
|
|
17,681
|
|
17,280
|
|
70,500
|
|
69,140
|
Impairments and other
charges
|
681
|
|
—
|
|
—
|
|
681
|
|
—
|
Insurance
recoveries
|
—
|
|
—
|
|
—
|
|
—
|
|
(2,352)
|
Selling, general, and
administrative expense
|
9,862
|
|
10,592
|
|
7,760
|
|
39,600
|
|
33,438
|
Goodwill
Impairment
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
Interest expense,
net
|
13,482
|
|
13,847
|
|
11,232
|
|
52,585
|
|
43,135
|
Series A Preferred
fair value adjustment
|
(2,375)
|
|
570
|
|
1,561
|
|
(838)
|
|
(3,402)
|
Other (income)
expense, net
|
(647)
|
|
(78)
|
|
—
|
|
2,101
|
|
(216)
|
Income (loss) before
income tax provision
|
(3,145)
|
|
(8,053)
|
|
(10,080)
|
|
(34,363)
|
|
(37,675)
|
Provision (benefit)
for income taxes
|
557
|
|
(106)
|
|
593
|
|
2,615
|
|
2,784
|
Net income
(loss)
|
$
(3,702)
|
|
$
(7,947)
|
|
$
(10,673)
|
|
$
(36,978)
|
|
$
(40,459)
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
diluted common unit
|
$
(0.10)
|
|
$
(0.18)
|
|
$
(0.29)
|
|
$
(0.88)
|
|
$
(1.13)
|
Reconciliation of Non-GAAP Financial Measures
The Partnership includes in this release the non-GAAP financial
measures Adjusted EBITDA, gross profit and gross margin of our
Compression and related services business excluding the impact of
tax contingency, distributable cash flow, distribution coverage
ratio, and free cash flow. 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
non-cash charges consisting of impairments, bad debt expense
attributable to bankruptcy of customer, non-cash costs of
compressors sold, equity compensation, fair value adjustments of
our Series A Convertible Preferred Units, administrative expenses
under the Omnibus Agreement paid in equity using common units,
severance expense, non-recurring adjustments, write-off of
unamortized financing costs, and software implementation
expense.
Compression and related services gross profit and gross margin
excluding the impact of tax contingency is used as a supplemental
financial measure by the Partnership's management, to assess
normalized gross profit and margins for the Compression and related
services business, excluding any unusual or one-time items.
The Partnership defines gross profit and gross margin, excluding
the impact of tax contingency, as gross profit and gross margin
less the impact of non-income tax contingency.
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.
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 Income/(Loss) to Adjusted
EBITDA, Distributable Cash Flow and Distribution Coverage Ratio
(unaudited)
The following table reconciles net income (loss)
to Adjusted EBITDA, distributable cash flow and distribution
coverage ratio for the three month periods ended December 31, 2018, September 30, 2018 and December 31, 2017, and the twelve-month periods
ended December 31, 2018 and 2017:
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
Dec 31,
2018
|
|
Sep 30,
2018
|
|
Dec 31,
2017
|
|
Dec 31,
2018
|
|
Dec 31,
2017
|
|
(In
Thousands)
|
|
|
|
|
Net loss
|
$
(3,702)
|
|
$
(7,947)
|
|
$
(10,673)
|
|
$
(36,978)
|
|
$
(40,459)
|
Interest expense,
net
|
13,482
|
|
13,847
|
|
11,232
|
|
52,585
|
|
43,135
|
Provision for income
taxes
|
557
|
|
(106)
|
|
593
|
|
2,615
|
|
2,784
|
Depreciation and
amortization
|
18,004
|
|
17,681
|
|
17,280
|
|
70,500
|
|
69,140
|
Impairments and other
charges
|
681
|
|
—
|
|
—
|
|
681
|
|
—
|
Non-cash cost of
compressors sold
|
1,040
|
|
1,951
|
|
1,768
|
|
4,126
|
|
8,505
|
Expense for
unamortized finance costs
|
—
|
|
—
|
|
—
|
|
3,539
|
|
—
|
Equity
Compensation
|
380
|
|
367
|
|
(933)
|
|
639
|
|
1,219
|
Series A Preferred
transaction costs
|
—
|
|
—
|
|
—
|
|
—
|
|
37
|
Series A Preferred
fair value adjustments
|
(2,375)
|
|
570
|
|
1,561
|
|
(838)
|
|
(3,402)
|
Non-income tax
contingency
|
2,110
|
|
—
|
|
—
|
|
2,110
|
|
—
|
Omnibus expense paid
in equity
|
—
|
|
—
|
|
—
|
|
—
|
|
1,746
|
Severance
|
—
|
|
—
|
|
—
|
|
12
|
|
63
|
Acquisition
costs
|
—
|
|
176
|
|
—
|
|
176
|
|
—
|
Software
implementation
|
—
|
|
—
|
|
194
|
|
—
|
|
974
|
Adjusted
EBITDA
|
30,177
|
|
26,539
|
|
21,022
|
|
99,167
|
|
83,742
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
Current income tax
expense
|
458
|
|
343
|
|
311
|
|
2,793
|
|
2,027
|
Maintenance capital
expenditures
|
4,613
|
|
5,194
|
|
6,936
|
|
19,735
|
|
21,055
|
Interest Expense,
net
|
13,482
|
|
13,847
|
|
11,232
|
|
52,585
|
|
43,135
|
Severance
|
—
|
|
176
|
|
—
|
|
12
|
|
63
|
Plus:
|
|
|
|
|
|
|
|
|
|
Non-cash items
included in interest expense
|
1,658
|
|
1,980
|
|
2,825
|
|
8,496
|
|
12,054
|
Distributable cash
flow
|
13,282
|
|
8,959
|
|
5,368
|
|
32,538
|
|
29,516
|
|
|
|
|
|
|
|
|
|
|
Cash distribution
attributable to period
|
476
|
|
8,383
|
|
7,389
|
|
24,489
|
|
27,582
|
|
|
|
|
|
|
|
|
|
|
Distribution coverage
ratio
|
28x
|
|
1.07x
|
|
0.73x
|
|
1.33x
|
|
1.07x
|
Schedule C - Reconciliation of Net Cash Provided by Operating
Activities to Free Cash Flow (unaudited)
The following table
reconciles net cash provided by operating activities to free cash
flow for the three month periods ended December 31, 2018, September 30, 2018 and December 31, 2017, and the twelve-month periods
ended December 31, 2018 and 2017:
Results of
Operations (unaudited)
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
Dec 31,
2018
|
|
Sep 30,
2018
|
|
Dec 31,
2017
|
|
Dec 31,
2018
|
|
Dec 31,
2017
|
|
(In
Thousands)
|
Cash from
operations
|
23,605
|
|
10,789
|
|
14,496
|
|
30,121
|
|
39,068
|
Capital expenditures,
net of sales proceeds
|
(23,325)
|
|
(30,902)
|
|
(11,413)
|
|
(103,489)
|
|
(25,126)
|
Free cash
flow
|
(1,720)
|
|
(20,113)
|
|
3,083
|
|
(73,368)
|
|
13,942
|
Schedule D - Reconciliation of Compression and Related
Services Gross Profit and Gross Margin excluding the impact of tax
contingency (unaudited)
The following table reconciles
Compression and related services gross profit and gross margin to
Compression and related services gross profit and gross margin
excluding the impact of tax contingency for the three month periods
ended December 31, 2018 and
September 30, 2018.
|
Three Months
Ended
|
|
Dec 31,
2018
|
|
Sep 30,
2018
|
|
|
|
|
|
|
Revenue of
Compression and related services
|
$
60,582
|
|
|
$
58,869
|
|
Cost of Compression
and related services, excluding depreciation
|
34,165
|
|
|
31,074
|
|
Gross Profit of
Compression and related services
|
26,417
|
|
|
27,795
|
|
Gross
Margin
|
43.6
|
%
|
|
47.2
|
%
|
Non-income tax
contingency
|
2,110
|
|
|
-
|
|
Gross Profit
excluding the impact of tax contingency
|
28,527
|
|
|
27,795
|
|
Gross Margin
excluding the impact of tax contingency
|
47.1
|
%
|
|
47.2
|
%
|
Schedule E - Reconciliation of Projected Net Income/(Loss) to
Adjusted EBITDA and Distribution Coverage Ratio
(unaudited)
The following table reconciles a range of
projected 2019 net loss to projected 2019 Adjusted EBITDA and
projected 2019 Distribution Coverage Ratio.
|
2019
Guidance
|
|
Low ($125M
EBITDA)
|
|
High ($140M
EBITDA)
|
|
|
|
|
Net income
(loss)
|
$
(6,900)
|
|
$
3,000
|
Interest expense,
net
|
52,500
|
|
52,500
|
Provision for income
taxes
|
3,000
|
|
4,000
|
Depreciation and
amortization
|
72,000
|
|
76,000
|
Non-cash cost of
compressors sold
|
2,500
|
|
2,200
|
Equity
Compensation
|
1,900
|
|
2,300
|
Adjusted
EBITDA
|
125,000
|
|
140,000
|
|
|
|
|
Less:
|
|
|
|
Current income tax
expense
|
$
3,000
|
|
$
4,000
|
Maintenance capital
expenditures
|
18,000
|
|
20,000
|
Interest Expense,
net
|
52,500
|
|
52,500
|
Non-cash items
included in interest expense
|
4,000
|
|
5,000
|
Distributable cash
flow
|
55,500
|
|
68,500
|
|
|
|
|
Cash distribution
attributable to period
|
1,800
|
|
2,000
|
|
|
|
|
Distribution coverage
ratio
|
30.83x
|
|
34.25x
|
Schedule E assumes common units distributions in 2019 will
continue at the current amount of $0.04 per common unit on an annualized basis.
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SOURCE CSI Compressco LP