THE WOODLANDS, Texas,
May 8, 2019 /PRNewswire/ -- CSI
Compressco LP ("CSI Compressco" or the "Partnership") (NASDAQ:
CCLP) today announced first quarter 2019 consolidated financial
results and provided updated 2019 full year
guidance.
Consolidated revenues for the quarter ended March 31, 2019 were $103
million compared to $138
million for the fourth quarter of 2018 and $85 million for the first quarter of 2018.
Compared to the fourth quarter of 2018, total revenues decreased
25%, driven primarily by the timing of new equipment shipments and
the completion of overhauls in aftermarket services.
Compression services revenue and gross margins continued to
increase sequentially. Net loss for the quarter ended
March 31, 2019 was $12.5 million compared to a net loss of
$3.7 million in the fourth quarter of
2018 and a net loss of $15.7 million
in the first quarter of 2018.
Selected key operational and financial metrics are as
follows:
- First quarter 2019 Adjusted EBITDA(1) of
$26.8 million decreased $3.4 million from $30.2
million in the fourth quarter of 2018 primarily due to lower
new equipment sales, but was $7.6
million higher than in the first quarter of 2018.
- Compression services gross margins in the first quarter of 2019
improved 460 basis points (bps) to 48.2% from 43.6% in the fourth
quarter of 2018, which included a $2.1
million non-income tax contingency. Excluding this
charge in the fourth quarter of 2018, compression services gross
margins improved 110 bps reflecting price increases, new units
being deployed at higher rates and better cost
controls(1).
- Overall service fleet utilization increased 60 bps compared to
the end of the fourth quarter of 2018, to 87.2%. Utilization for
large horsepower equipment, greater than 1,000 horsepower per unit,
also increased 60 bps from the end of the fourth quarter, to
95.6%.
- Total operating fleet horsepower of 1,017,452 as of
March 31, 2019 surpassed 1 million
horsepower for the first time in the Company's history.
- Backlog for new equipment sales was $93.9 million as of March
31, 2019, down from $105
million at the end of December 2018. New orders
received in the first quarter 2019 were $11
million. As of May 8,
2019 new orders received were $14.7
million year-to-date.
- The coverage ratio on distributable cash flow(1) was
13.2X.
- The Company has continued to cash redeem the outstanding Series
A Preferred Units. As of May 8,
2019 the outstanding balance is approximately $13.3 million.
(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
March 31, 2019 compared to the prior
quarter and the corresponding prior year quarter are presented in
the accompanying financial tables.
|
Three Months
Ended
|
|
|
|
|
|
Mar 31,
2019
|
|
Dec 31,
2018
|
|
Mar 31,
2018
|
|
Q1-19 vs.
Q4-18
|
|
Q1-19 vs.
Q1-18
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
$
(12,456)
|
|
$
(3,702)
|
|
$
(15,737)
|
|
(236)%
|
|
21 %
|
Adjusted
EBITDA(1)
|
$
26,805
|
|
$
30,177
|
|
$
19,191
|
|
(11)%
|
|
40 %
|
Distributable cash
flow(1)
|
$
6,298
|
|
$
13,282
|
|
$
4,907
|
|
(53)%
|
|
28 %
|
Quarterly cash
distribution per unit
|
$
0.01
|
|
$
0.01
|
|
$
0.1875
|
|
- %
|
|
(95)%
|
Distribution coverage
ratio(1)
|
13.2x
|
|
27.9x
|
|
0.64x
|
|
-
|
|
-
|
Fleet growth capital
expenditures(2)
|
$
17,578
|
|
$
19,159
|
|
$
15,245
|
|
(21) %
|
|
- %
|
Net cash provided by
operating activities
|
$
31,632
|
|
$
23,605
|
|
$
(365)
|
|
34 %
|
|
- %
|
Free cash
flow(1)
|
$
8,480
|
|
$
(1,720)
|
|
$
(17,404)
|
|
593%
|
|
149%
|
|
(1) Non-GAAP
financial measures reconciled to the nearest GAAP number on
Schedules B and C.
(2) Includes capital
expenditures funded by TETRA
|
Owen Serjeant, President of CSI Compressco, commented, "We are
pleased with another good quarter driven by continued consistent
and strong improvements in compression and related services.
Although adjusted EBITDA was slightly behind the prior quarter's
results, this was due to the timing of new equipment shipments and
aftermarket services major overhauls, both of which were at record
highs in the fourth quarter of 2018. We had previously
indicated that we expected the first quarter of 2019 to be
sequentially weaker and are expecting the second quarter for both
businesses to be materially higher than the first quarter due to
the timing of shipments and completion of overhauls on our clients'
units. Compression and related services continues to get
stronger each quarter and we've posted another sequential revenue
and gross margin improvement. Market demand for compression
and related services continues to be exceptionally strong. We
have not seen any slowdown in this area. As new large
horsepower units continue to be deployed, we see year over year
spot price increase percentages in the high teens. The new
equipment being deployed is achieving pricing above pricing on the
existing units, allowing us to attain 65%-70% incremental fall
through margins that are driving 20% returns on capital. We
are focusing our investments in new units to our core customers,
who are major operators in key shale basins that require more
equipment to be deployed to their existing fields. These new
units are addressing both gathering system requirements for the
increasing volumes of associated gas and are also meeting their
requirements for centralized gas lift. The need for
centralized gas lift (utilizing multiple large horsepower
compressors to service many wells drilled and producing in
concentrated areas) continues to grow in support of initial early
life oil production requirements and for enhanced oil recovery from
those wells. Our aftermarket services and equipment sales
businesses experienced a softer sequential quarter but were
consistent with our internal expectations. First quarter
bookings for new equipment sales were lower than prior quarters as
customers have delayed committing to new orders. We expect
the remainder of the year to be stronger for these two businesses
as the identified opportunities remain strong. The pipeline
of identified opportunities is in excess of $250 million. Second quarter revenue from
new equipment shipments are expected to be significantly higher
compared to $27 million in the first
quarter 2019.
"We remain bullish on the overall compression space as the
industry is one of the strongest in the oil and gas spectrum. Our
customers are requesting significantly more equipment to address
the increasing volumes of associated gas in the shale plays and to
address the increasing need for centralized gas lift. We see the
demand for compression equipment outpacing supply, especially for
high horsepower equipment. We expect 2019 to be a strong year
over year improvement across all business lines.
"We have a healthy backlog of $94
million for new equipment sales as of March 31, 2019 that will support our 2019
equipment sales expectations. Customer demand for high horsepower
compression equipment in key basins remains strong and our key
customers continue to invest in infrastructure that require large
amounts of newbuild compression equipment. While some of our
customers are taking a temporary pause from ordering new equipment
to build out their infrastructure, we expect the rate of order
intake to pick up substantially in the third and fourth
quarters.
"New equipment orders were $11.2
million in the first quarter while total orders through
May 7, 2019 are $14.7 million. Our new equipment quotation
pipeline continues to get stronger and as the year progresses, we
expect our order book to fill out to support our 2020 equipment
sales.
"Compression and related services revenue was $63 million in the first quarter 2019 with gross
margin of 48.2%, a 110 basis points improvement over the 47.1% in
the fourth quarter 2018 excluding the non-income tax
contingency charge of $2.1
million that was reflected in our fourth quarter of 2018
results (gross margin excluding the impact of the non-income tax
contingency is a non-GAAP measure; see Schedule D for
reconciliation of this non-GAAP financial measure).
Compression and related services gross margin and utilization
increased sequentially and we now have over 1 million active
operating horsepower for the first time in the Partnership's
history. We are still seeing the benefit from better pricing
as new equipment is added to the fleet, contracts roll over at
higher prices, and as we add more equipment. We also continue
to see operational efficiencies from our ERP system. In the first
quarter of 2019 we deployed 38,983 of new horsepower to our service
fleet, almost all exclusively in high horsepower equipment.
"As of March 31, 2019, aggregate
compression and related services fleet horsepower totaled 1,167,164
and the overall fleet utilization rate was 87.2%, up 60 basis
points from our exit utilization of 86.6% at December 31, 2018. Total operating fleet
horsepower was 1,017,452 as of March 31,
2019 (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.
"Revenue from equipment sales was $26.8
million, a decrease of 52% from the fourth quarter, which
had the highest quarterly sales since the acquisition of Compressor
Systems, Inc. in 2014. We expect revenue from equipment sales
to be significantly higher on a quarterly basis for the remainder
of 2019.
"Aftermarket services revenue of $13.6
million was below the fourth quarter of 2018 levels due to
the timing from the completion of major overhauls of our customer's
equipment. Based on our aftermarket order book, we believe
this business will be much stronger the rest of the year and more
in line with what we experienced in the second half of last
year.
"We continue to make progress on cash redeeming the Series A
Convertible Preferred Units. After May
8, 2019, the outstanding balance to be cash redeemed we will
be approximately $14.0 million.
Upon completion of the Series A Convertible Preferred Unit
redemption, we expect to deploy approximately 50% of the increase
in free cash flow towards growth capital opportunities targeting
20% returns from our key accounts. We remain committed
towards improving our balance sheet and creating stakeholder
value. Our goal remains to improve our leverage ratio to
4.5x, or better. Free cash flow not directed towards growth
capital is expected to be used to either retire outstanding debt
that will further improve our leverage metrics or will be returned
to our unit-holders through the quarterly cash distributions.
These decisions will be made as we continue to evaluate the prices
that our units and bonds trade at and also on demand and pricing
for new equipment opportunities. At the end of March, we did
not have any amounts drawn on our asset based revolver. Total debt
outstanding is $296 million on
unsecured bonds and $350 million on
secured bonds."
Forward-Looking Guidance
We expect consolidated 2019 revenue to be between $490 million and $520
million and Adjusted EBITDA to be between $125 million and $140
million, consistent with our prior expectations. We
further expect that our average distribution coverage ratio for
2019 will be between 30X and 35X at the end of 2019 with aggregate
2019 distributable cash flow to be 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
Schedule E.
We expect 2019 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 add approximately 79,000 of horsepower to the fleet in 2019,
all with client commitments. This range excludes $15 million, or 20,700 horsepower, that TETRA
Technologies, Inc. ("TETRA") agreed to purchase and lease to us
under a five-year financing lease. However, for accounting
purposes, the $15 million of fleet
additions, funded by TETRA finance lease commitment, will be
reflected as capital expenditures. 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 first
quarter 2019 results today, May 8,
2019, 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. An audio
replay of the conference call will be available at 1-877-344-7529,
conference number 10127835, for one week following the conference
call and the archived webcast call will be available through the
Company's website for 30 days following the conference call.
First Quarter 2019 Cash Distribution on Common Units
On April 18, 2019, CSI Compressco
announced that the board of directors of its general partner
declared a cash distribution attributable to the first quarter of
2019 of $0.01 per outstanding common
unit, which will be paid on May 15,
2019, to common unitholders of record as of the close of
business on May 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 first quarter of 2019 was 13.2X.
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 1.17 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 (unaudited)
Results of
Operations
|
Three Months
Ended
|
|
Mar 31,
2019
|
|
Dec 31,
2018
|
|
Mar 31,
2018
|
|
|
Revenues:
|
|
|
|
|
|
Compression and
related services
|
$
63,032
|
|
$
60,582
|
|
$
53,735
|
Aftermarket
services
|
13,601
|
|
21,928
|
|
14,016
|
Equipment
sales
|
26,803
|
|
55,558
|
|
17,666
|
Total
revenues
|
103,436
|
|
138,068
|
|
85,417
|
Cost of revenues
(excluding depreciation and amortization expense):
|
|
|
|
|
|
Cost of compression
and related services
|
32,621
|
|
34,165
|
|
31,380
|
Cost of aftermarket
services
|
11,250
|
|
17,707
|
|
11,157
|
Cost of equipment
sales
|
24,229
|
|
50,334
|
|
15,449
|
Total cost of
revenues
|
68,100
|
|
102,206
|
|
57,986
|
Depreciation and
amortization
|
18,532
|
|
18,004
|
|
17,367
|
Impairments of
long-lived assets
|
-
|
|
681
|
|
-
|
Selling, general, and
administrative expense
|
10,665
|
|
9,862
|
|
8,297
|
Interest expense,
net
|
13,299
|
|
13,482
|
|
11,433
|
Series A Preferred
fair value adjustment
|
1,304
|
|
(2,375)
|
|
1,553
|
Other (income)
expense, net
|
(381)
|
|
(647)
|
|
3,204
|
Income (loss) before
income tax provision
|
(8,083)
|
|
(3,145)
|
|
(14,423)
|
Provision (benefit)
for income taxes
|
4,373
|
|
557
|
|
1,314
|
Net income
(loss)
|
$
(12,456)
|
|
$
(3,702)
|
|
$
(15,737)
|
|
|
|
|
|
|
Net income (loss) per
diluted common unit
|
$
(0.26)
|
|
$
(0.10)
|
|
$
(0.40)
|
Reconciliation of Non-GAAP Financial Measures
The Partnership includes in this release the non-GAAP financial
measures Adjusted EBITDA, gross profit and gross margin percentage
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, equity compensation,
non-cash costs of compressors sold, fair value adjustments of our
Preferred Units, gain on extinguishment of debt, administrative
expenses under the Omnibus Agreement paid in equity using common
units, write-off of unamortized financing costs, and excluding
acquisition and transaction costs, Series A Preferred redemption
premiums, and severance.
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 March 31,
2019, December 31, 2018 and
March 31, 2018:
|
Three Months
Ended
|
|
Mar 31,
2019
|
|
Dec 31,
2018
|
|
Mar 31,
2018
|
|
(In
Thousands)
|
Net income
(loss)
|
$
(12,456)
|
|
$
(3,702)
|
|
$
(15,737)
|
Interest expense,
net
|
13,299
|
|
13,482
|
|
11,433
|
Provision for income
taxes
|
4,373
|
|
557
|
|
1,314
|
Depreciation and
amortization
|
18,532
|
|
18,004
|
|
17,367
|
Impairments of
long-lived assets
|
-
|
|
681
|
|
-
|
Non-cash cost of
compressors sold
|
940
|
|
1,040
|
|
324
|
Equity
compensation
|
365
|
|
380
|
|
(604)
|
Series A Preferred
fair value adjustments
|
1,304
|
|
(2,375)
|
|
1,553
|
Un-amortized
financing cost charged to expense
|
-
|
|
-
|
|
3,541
|
Non-income tax
contingency
|
-
|
|
2,110
|
|
-
|
Series A Preferred
redemption premium
|
448
|
|
-
|
|
-
|
Adjusted
EBITDA
|
$
26,805
|
|
$
30,177
|
|
$
19,191
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
Current
income tax expense
|
2,907
|
|
458
|
|
1,218
|
Maintenance capital expenditures
|
5,729
|
|
4,613
|
|
4,337
|
Interest
expense
|
13,299
|
|
13,482
|
|
11,433
|
Plus:
|
|
|
|
|
|
Non-cash interest
expense
|
1,428
|
|
1,658
|
|
2,704
|
Distributable cash
flow
|
6,298
|
|
13,282
|
|
4,907
|
|
|
|
|
|
|
Cash distribution
attributable to period
|
477
|
|
476
|
|
7,616
|
|
|
|
|
|
|
Distribution coverage
ratio
|
13.2x
|
|
27.9x
|
|
0.64x
|
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
March 31, 2019, December 30, 2018 and March 31, 2018:
Results of
Operations (unaudited)
|
Three Months
Ended
|
|
Mar 31,
2019
|
|
Dec 31,
2018
|
|
Mar 31,
2018
|
|
(In
Thousands)
|
Cash from
operations
|
$
31,632
|
|
$
23,605
|
|
$
(365)
|
Capital expenditures,
net of sales proceeds
|
(23,152)
|
|
(25,325)
|
|
(17,039)
|
Free cash
flow
|
$
8,480
|
|
$
(1,720)
|
|
$
(17,404)
|
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 March 31, 2019 and December 31, 2018.
|
Three Months
Ended
|
|
Mar 31,
2019
|
|
Dec 31,
2018
|
|
(In
Thousands)
|
Revenue of
compression and related services
|
$
63,032
|
|
$
60,582
|
|
|
|
|
Cost of compression
and related services, excluding depreciation
|
32,621
|
|
34,165
|
|
|
|
|
Gross Profit of
compression and related services
|
30,411
|
|
26,417
|
|
|
|
|
Gross
Margin
|
48.2%
|
|
43.6%
|
|
|
|
|
Non-income tax
contingency
|
-
|
|
2,110
|
|
|
|
|
Adjusted Gross
Profit
|
$
30,411
|
|
$
28,527
|
|
|
|
|
Adjusted Gross
Margin
|
48.2%
|
|
47.1%
|
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
income (loss) to projected 2019 Adjusted EBITDA and projected 2019
Distribution Coverage Ratio.
|
2019
Guidance
|
|
(In
Thousands)
|
|
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
|
Less: Maintenance
capital expenditures
|
18,000
|
|
20,000
|
Less:Interest
Expense, net
|
52,500
|
|
52,500
|
Plus: 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