THE WOODLANDS, Texas,
Feb. 26, 2020 /PRNewswire/
-- CSI Compressco LP ("CSI Compressco" or the "Partnership")
(NASDAQ: CCLP) announced today strong fourth quarter and full year
2019 consolidated financial results.
CSI Compressco's consolidated revenues for the quarter ended
December 31, 2019 were $124 million compared to $114 million for the third quarter of 2019, an
increase of 9% driven by strong aftermarket services, higher
equipment sales due to timing of shipments and continued
improvements in compression services. Net loss for the
quarter ended December 31, 2019 was
$2.0 million compared to a net loss
of $3.6 million in the third quarter
of 2019 and a net loss of $3.7
million for the fourth quarter of 2018. Net loss per
diluted common unit for fourth quarter 2019 was $0.04 as compared to a net loss per diluted
common unit of $0.08 in the third
quarter of 2019 and a net loss per diluted common unit of
$0.10 in the fourth quarter of
2018.
CSI Compressco's consolidated revenues for the full year 2019
were $477 million, an increase of
$38 million over 2018 revenues of
$439 million, or 9%. The full
year sequential improvement was spread across all three of our
businesses but primarily driven by compression services, which
accounted for 73% of the increase. Net loss for 2019 was
$21.0 million compared to a net loss
of $37.0 million in 2018. Net
loss per diluted common unit for 2019 was $0.44 as compared to a net loss per diluted
common unit of $0.88 in 2018.
Fourth Quarter 2019
Brady Murphy, President of CSI
Compressco commented, "Our fourth quarter 2019 results show the
continued strengthening of our business with record achievements in
many key financial metrics. Adjusted EBITDA of $34.7 million improved $0.7 million sequentially and is the highest in
the 6 years since the acquisition of Compressor Systems, Inc. in
2014. Net loss for 2019 showed a significant improvement as
compared to 2018. We achieved a gross margin of 33.6% and a
28.1% Adjusted EBITDA margin, underpinned by 90% overall equipment
utilization at year-end, essentially flat from the record at the
end of third quarter 2019 of 90.1%. The customer trend of deploying
centralized gas lift as a cost effective and efficient means to
help drive liquids production continues to be a primary driver for
incremental high horsepower additions to our service fleet.
The design and horsepower of our compressor packages used for these
applications falls in the sweet spot of CSI Compressco's high
horsepower units and our alignment with key customers in the
Permian Basin continues to drive this demand. In the fourth
quarter of 2019, 89% of our total horsepower deployments were
directed towards centralized gas lift for liquids or single well
artificial lift for the growing inventory of late life horizontal
wells. While customer drilling activity and new well capital
expenditures are expected to decrease in 2020, we see these
applications continuing to grow.
"While compression services gross margins decreased sequentially
to 51.6% from 53.2% due to increased labor and parts costs from
weather-related outages, this segment contributed over $33.6 million of gross margin in the
quarter. In the fourth quarter of 2019, equipment sales were
$34.3 million, up $5.9 million from the third quarter on the timing
of deliveries. Our aftermarket business experienced strong
year-end levels of activity as customers ended the year completing
large refurbishment projects and stocking inventory
levels.
"During the quarter we added more than 26,200 in new horsepower,
focused around centralized gas lift for our key accounts, with the
vast majority of the new additions being deployed into existing
clusters of equipment in the Permian Basin and in South
Texas.
"Distributable cash flow(1) in the fourth quarter was
$15.5 million, up 17% from the fourth
quarter of 2018, resulting in a distribution coverage
ratio(1) of 32.5x.
"In summary, the fourth quarter of 2019 was a record quarter in
many ways, and we are well positioned for what appears to be a
period of lower commodity prices and reduced capital expenditures
by our customers."
Unaudited results of operations for the quarter ended
December 31, 2019 compared to the
prior quarter and the corresponding prior year quarter are
presented in the table below.
|
Three Months
Ended
|
|
|
|
|
|
Dec 31,
2019
|
|
Sep 30,
2019
|
|
Dec 31,
2018
|
|
Q4-19 vs.
Q3-19
|
|
Q4-19 vs.
Q4-18
|
|
(In Thousands, Except
Ratios, Percentages and Per Unit Amounts)
|
Net loss
|
$
(1,957)
|
|
$
(3,613)
|
|
$
(3,702)
|
|
46 %
|
|
47%
|
Adjusted
EBITDA(1)
|
$
34,708
|
|
$
33,996
|
|
$
30,177
|
|
2 %
|
|
15 %
|
Distributable cash
flow(1)
|
$
15,505
|
|
$
15,803
|
|
$
13,282
|
|
(2)%
|
|
17 %
|
Quarterly cash
distribution per unit
|
$
0.01
|
|
$
0.01
|
|
$
0.01
|
|
—%
|
|
—%
|
Distribution coverage
ratio(1)
|
32.5x
|
|
33.1x
|
|
27.9x
|
|
|
|
|
Fleet growth capital
expenditures(2)
|
$
10,516
|
|
$
19,304
|
|
$
19,159
|
|
(46)%
|
|
(45)%
|
Net cash provided by
operating activities
|
$
(90)
|
|
$
27,444
|
|
$
23,605
|
|
(100)%
|
|
(100)%
|
Free cash
flow(1)
|
$
(4,410)
|
|
$
6,577
|
|
$
(1,720)
|
|
(167)%
|
|
(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 reconciliations of these non-GAAP
financial measures to the most directly comparable GAAP
measures.
|
(2)
|
Includes capital
expenditures paid by TETRA in 2019 under backstop financing
agreement.
|
Adjusted EBITDA, Adjusted EBITDA margin, distributable cash
flow, free cash flow, distribution coverage ratio, and net leverage
ratio are all non-GAAP financial figures that are used throughout
this press release. Reconciliations for each such non-GAAP
figure to the nearest GAAP financial measure are included on
Schedules B, C, D, E, and F.
Compression and Related Services
As of December 31, 2019, aggregate
service compressor fleet horsepower was 1,177,745 and the overall
service fleet utilization rate was 90.0%. Aggregate service
fleet horsepower in service was 1,059,590 as of December 31, 2019 (we define the overall service
fleet utilization rate as the aggregate service compressor fleet
horsepower in service divided by the aggregate service compressor
fleet horsepower as of such date). We do not exclude idle
horsepower under repair from our calculation of utilization
rates. Since the beginning of 2019 we added new compressor
units with over 98,000 aggregate horsepower at pricing that is
generating approximately 20% returns on capital. We calculate the
return on capital of an individual new compressor unit by dividing
its estimated annual operating income by the initial cost of such
compressor unit.
Aftermarket Services and Equipment Sales
Fourth quarter aftermarket services revenue of $24.1 million increased $3.7 million sequentially as customer demand
remained strong. Given the timing of shipments and consistent
with our expectations mentioned on our last earnings call, we ended
the quarter with new equipment sales revenue of $34.3 million, which were sequentially higher by
$5.9 million. Fourth quarter
orders for new equipment sales were $4.1
million. We continue to see a healthy pipeline of new
unit sales opportunities, however, several large projects that were
expected to be awarded in the fourth quarter of 2019 have been
pushed out. We still expect to receive those orders but
likely not until the second half of 2020 or later.
Total Year 2019
Mr. Murphy further commented, "2019 was an exceptional year for
CSI Compressco with many significant and record level
accomplishments. While the U.S. onshore market continues to
experience volatility with the rig count falling by over 25% during
2019 and natural gas prices dropping below $2.00/Mcf in early January, our business
performed well and delivered on many of our key financial
objectives. Among the highlights for the year were: (1)
revenue increased 9% from 2018; (2) Adjusted EBITDA increased 29%
to $128 million; (3) overall service
fleet utilization ended the year at 90.0%, up from 86.6% at the end
of 2018; and (4) compression and related services gross margins
improved to 51.6% in the fourth quarter 2019 from 43.6% in the
fourth quarter of 2018. During the year, we deployed over
98,000 of new horsepower, almost exclusively in the 1,000+
horsepower range. We have been migrating our service fleet
towards the high horsepower units, primarily to address the growing
demand for centralized gas lift. The high horsepower fleet
now represents 53% of our total fleet horsepower and at year-end
2019 this category of equipment was 97.9% utilized and continued to
generate approximately 20% returns on capital.
"During the year, we improved the net leverage ratio to 5.1x
from 6.3x at year-end 2018 and from a high of 7.0x in the second
quarter of 2018. We define net leverage ratio as net debt
divided by trailing twelve months Adjusted EBITDA. We also
fully redeemed the Series A Convertible Preferred Units to avoid
further dilution to the common unit holders, with the last cash
redemption completed in August 2019.
To achieve this, we allocated $32
million of distributable cash flow towards the Series A
Convertible Preferred Unit redemptions during 2019.
"The demand for our equipment and services continued to stay
strong during the entire year. Our primary focus throughout the
year was to improve our debt metrics, achieve our Adjusted EBITDA
goals, improve our compression services margins and continue to
migrate our fleet toward the larger horsepower units focused on our
key well capitalized customers. We accomplished these goals
and are a much stronger company than we were a year ago."
Full Year 2020 Forward Looking Guidance
For 2020, we expect total year net loss to be between
$20.7 million and $28.5 million. We expect revenue to be
between $430 million and $460 million and Adjusted EBITDA to be between
$125 million and $140 million. We expect the first quarter
of 2020 to be softer than the fourth quarter of 2019 due to the
timing of equipment sales and aftermarket services activity
levels.
Maintenance capital expenditures are expected to be between
$23 million and $25 million reflecting the addition of almost
190,000 horsepower to our service fleet over the last two
years. We expect to limit our growth capital to be less than
50% of distributable cash flow and are targeting growth capital
expenditures to be between $20
million and $25 million.
We also expect to allocate $4 million
to $6 million of capital expenditures
for technology investments to continue to improve fleet reliability
and with higher compression services margins through efficiencies
in our business. We will continue to benefit from and enhance
the functionality of our ERP system that we believe to be best in
class in the industry. Lastly, we have launched an initiative
to evolve our telemetry system to further improve remote monitoring
of our units and utilize predictive maintenance to further improve
run time and reduce costs. In total, capital expenditures are
expected to be between $47 million
and $56 million.
We expect distributable cash flow to be between $51 million and $62
million and our distribution coverage ratio to be between
26x and 32x. After funding the above noted growth and
technology capital investments of $27
million to $31 million, we
expect to use the balance of distributable cash flow to reduce
outstanding debt, primarily through open market purchases of our
outstanding unsecured senior notes, beginning in the second quarter
of 2020. We remain committed to improving our leverage
metrics in the near term toward our target net leverage ratio of
4.5x, consistent with what was originally communicated at the
May 2018 investor conference we
hosted in New York City. We believe that as the net leverage
ratio improves and we continue to attain our financial goals, we
will create value to our equity holders and protect CSI Compressco
during periods of market uncertainty. An improved net
leverage ratio should also better position us to refinance the
unsecured senior notes, which mature in August 2022.
Reconciliations of expected Adjusted EBITDA, distributable cash
flow and distribution coverage ratio to the nearest GAAP financial
measures are included on Schedule D.
Fourth Quarter 2019 Cash Distribution on Common Units
On January 21, 2020, CSI
Compressco announced that the board of directors of its general
partner declared a cash distribution attributable to the fourth
quarter of 2019 of $0.01 per
outstanding common unit, which was paid on February 14, 2020, to common unitholders of
record as of the close of business on February 1, 2020. The distribution coverage
ratio (which is a non-GAAP Financial Measure defined on Schedule A
and reconciled to the closest GAAP financial measure on Schedule B
below) for the fourth quarter of 2019 was 32.5x.
Conference Call
CSI Compressco will host a conference call to discuss fourth
quarter and full year 2019 results and full year 2020 forward
looking guidance today, February 26,
2020, at 10:30 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 10138611 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 5,200 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 America markets. CSI
Compressco's equipment sales business includes the fabrication and
sale of standard compressor packages and engineered custom-designed
compressor packages designed, fabricated and assembled 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, 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, 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,
2019
|
|
Sep 30,
2019
|
|
Dec 31,
2018
|
|
Dec 31,
2019
|
|
Dec 31,
2018
|
|
(in Thousands, Except
per Unit Amounts)
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Compression and
related services
|
$
65,188
|
|
$
64,957
|
|
$
60,582
|
|
$
257,723
|
|
$
229,895
|
Aftermarket
services
|
24,094
|
|
20,426
|
|
21,928
|
|
76,290
|
|
70,907
|
Equipment
sales
|
34,260
|
|
28,364
|
|
55,558
|
|
142,568
|
|
137,861
|
Total
revenues
|
123,542
|
|
113,747
|
|
138,068
|
|
476,581
|
|
438,663
|
Cost of revenues
(excluding depreciation and amortization expense):
|
|
|
|
|
|
|
|
|
|
Cost of Compression
and related services
|
31,568
|
|
30,395
|
|
34,165
|
|
125,104
|
|
127,128
|
Cost of aftermarket
services
|
19,916
|
|
17,163
|
|
17,707
|
|
63,757
|
|
57,870
|
Cost of equipment
sales
|
30,489
|
|
26,518
|
|
50,334
|
|
128,638
|
|
123,399
|
Total cost of
revenues
|
81,973
|
|
74,076
|
|
102,206
|
|
317,499
|
|
308,397
|
Depreciation and
amortization
|
20,618
|
|
18,459
|
|
18,004
|
|
76,663
|
|
70,500
|
Impairments and other
charges
|
—
|
|
849
|
|
681
|
|
3,160
|
|
681
|
Insurance
recoveries
|
(230)
|
|
(325)
|
|
—
|
|
(555)
|
|
—
|
Selling, general, and
administrative expense
|
10,125
|
|
11,336
|
|
9,862
|
|
43,100
|
|
39,600
|
Interest expense,
net
|
13,498
|
|
13,533
|
|
13,482
|
|
53,375
|
|
52,585
|
Series A Preferred
fair value adjustment
|
—
|
|
—
|
|
(2,375)
|
|
1,470
|
|
(838)
|
Other (income)
expense, net
|
(532)
|
|
(205)
|
|
(647)
|
|
(511)
|
|
2,101
|
Income (loss) before
income tax provision
|
(1,910)
|
|
(3,976)
|
|
(3,145)
|
|
(17,620)
|
|
(34,363)
|
Provision (benefit)
for income taxes
|
47
|
|
(363)
|
|
557
|
|
3,353
|
|
2,615
|
Net income
(loss)
|
$
(1,957)
|
|
$
(3,613)
|
|
$
(3,702)
|
|
$
(20,973)
|
|
$
(36,978)
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
diluted common unit
|
$
(0.04)
|
|
$
(0.08)
|
|
$
(0.10)
|
|
$
(0.44)
|
|
$
(0.88)
|
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
non-cash charges and other non-recurring or unusual expenses or
charges, including impairments, equity compensation,
bad debt expense attributable to bankruptcy of customer, non-cash
costs of compressors sold, fair value adjustments of our Preferred
Units, write-off of unamortized financing costs, and excluding
Series A Convertible Preferred Unit redemption premiums and
severance.
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 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,
2019, September 30, 2019 and
December 31, 2018, and the
twelve-month periods ended December 31,
2019 and 2018:
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
Dec 31,
2019
|
|
Sep 30,
2019
|
|
Dec 31,
2018
|
|
Dec 31,
2019
|
|
Dec 31,
2018
|
|
(In
Thousands)
|
|
|
|
|
Net loss
|
$
(1,957)
|
|
$
(3,613)
|
|
$
(3,702)
|
|
$
(20,973)
|
|
$
(36,978)
|
Interest expense,
net
|
13,498
|
|
13,533
|
|
13,482
|
|
53,375
|
|
52,585
|
Provision for income
taxes
|
47
|
|
(363)
|
|
557
|
|
3,353
|
|
2,615
|
Depreciation and
amortization
|
20,618
|
|
18,459
|
|
18,004
|
|
76,663
|
|
70,500
|
Impairments and other
charges
|
—
|
|
849
|
|
681
|
|
3,313
|
|
681
|
Bad debt expense
attributable to bankruptcy of customer
|
—
|
|
1,768
|
|
—
|
|
1,768
|
|
—
|
Non-cash cost of
compressors sold
|
2,182
|
|
2,803
|
|
1,040
|
|
6,023
|
|
4,126
|
Expense for
unamortized finance costs
|
—
|
|
—
|
|
—
|
|
—
|
|
3,539
|
Equity
Compensation
|
320
|
|
(211)
|
|
380
|
|
1,064
|
|
639
|
Series A Preferred
redemption premiums
|
—
|
|
399
|
|
—
|
|
1,468
|
|
—
|
Series A Preferred
fair value adjustments
|
—
|
|
—
|
|
(2,375)
|
|
1,470
|
|
(838)
|
Non-income tax
contingency
|
—
|
|
—
|
|
2,110
|
|
—
|
|
2,110
|
Severance
costs
|
—
|
|
118
|
|
—
|
|
118
|
|
12
|
Other
|
—
|
|
254
|
|
—
|
|
630
|
|
176
|
Adjusted
EBITDA
|
34,708
|
|
33,996
|
|
30,177
|
|
128,272
|
|
99,167
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
Current income tax
expense
|
467
|
|
34
|
|
458
|
|
3,224
|
|
2,793
|
Maintenance capital
expenditures
|
6,774
|
|
5,729
|
|
4,613
|
|
23,132
|
|
19,735
|
Interest Expense,
net
|
13,498
|
|
13,533
|
|
13,482
|
|
53,375
|
|
52,585
|
Severance and
other
|
—
|
|
372
|
|
—
|
|
748
|
|
12
|
Plus:
|
|
|
|
|
|
|
|
|
|
Non-cash items
included in interest expense
|
1,536
|
|
1,475
|
|
1,658
|
|
5,540
|
|
8,496
|
Distributable cash
flow
|
15,505
|
|
15,803
|
|
13,282
|
|
53,333
|
|
32,538
|
|
|
|
|
|
|
|
|
|
|
Cash distribution
attributable to period
|
477
|
|
477
|
|
476
|
|
1,908
|
|
24,489
|
|
|
|
|
|
|
|
|
|
|
Distribution coverage
ratio
|
32.51x
|
|
33.13x
|
|
27.9x
|
|
27.95x
|
|
1.33x
|
|
|
|
|
|
|
|
|
|
|
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, 2019, September 30, 2019 and December 31, 2018, and the twelve-month periods
ended December 31, 2019 and 2018:
Results of
Operations (unaudited)
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
Dec 31,
2019
|
|
Sep 30,
2019
|
|
Dec 31,
2018
|
|
Dec 31,
2019
|
|
Dec 31,
2018
|
|
(In
Thousands)
|
Cash from
operations
|
(90)
|
|
27,444
|
|
23,605
|
|
67,696
|
|
30,121
|
Capital expenditures,
net of sales proceeds
|
(4,320)
|
|
(20,867)
|
|
(25,325)
|
|
(64,773)
|
|
(103,489)
|
Free cash
flow
|
(4,410)
|
|
6,577
|
|
(1,720)
|
|
2,923
|
|
(73,368)
|
Schedule D - Reconciliation of Projected Net Income/(Loss) to
Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage
Ratio (unaudited)
The following table reconciles a range of projected 2020 net
loss to projected 2020 Adjusted EBITDA and projected 2020
Distribution Coverage Ratio.
|
2020
Guidance
|
|
(In
Thousands)
|
|
Low ($125M
EBITDA)
|
|
High ($140M
EBITDA)
|
|
|
|
|
Net income
(loss)
|
$
(28,500)
|
|
$
(20,700)
|
Interest expense,
net
|
52,000
|
|
53,000
|
Provision for income
taxes
|
4,000
|
|
6,000
|
Depreciation and
amortization
|
90,000
|
|
92,000
|
Non-cash cost of
compressors sold
|
6,000
|
|
8,000
|
Equity
Compensation
|
1,500
|
|
1,700
|
Adjusted
EBITDA
|
$
125,000
|
|
$
140,000
|
|
|
|
|
Less: Current income
tax expense
|
$
4,000
|
|
$
6,000
|
Less: Maintenance
capital expenditures
|
23,000
|
|
25,000
|
Less: Interest
Expense, net
|
52,000
|
|
53,000
|
Plus: Non-cash items
included in interest expense
|
4,500
|
|
5,500
|
|
|
|
|
Distributable cash
flow
|
$
50,500
|
|
$
61,500
|
|
|
|
|
Cash distribution
attributable to period
|
$
1,910
|
|
$
1,910
|
|
|
|
|
Distribution coverage
ratio
|
26.44x
|
|
32.20x
|
|
|
|
|
|
|
|
|
Schedule D assumes common unit distributions in 2020 will
continue at the current amount of $0.04 per common unit on an annualized basis.
Schedule E – Reconciliation to Adjusted EBITDA Margin
(unaudited)
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
Dec 31,
2019
|
|
Sep 30,
2019
|
|
Dec 31,
2018
|
|
Dec 31,
2019
|
|
Dec 31,
2018
|
Consolidated
|
(In
Thousands)
|
Revenue
|
$
123,542
|
|
$
113,747
|
|
$
138,068
|
|
$
476,581
|
|
$
438,663
|
Adjusted EBITDA
(Schedule B)
|
34,708
|
|
33,996
|
|
30,177
|
|
128,272
|
|
99,167
|
Adjusted EBITDA
Margin
|
28.1%
|
|
29.9%
|
|
21.9%
|
|
26.9%
|
|
22.6%
|
Schedule F – Reconciliation of Historical Net Income/(Loss)
to Adjusted EBITDA for Net Leverage Ratio Calculation
(unaudited)
|
Twelve Months
Ended
|
|
December 31,
2019
|
|
December 31,
2018
|
|
June 30,
2018
|
|
(In
Thousands)
|
Net income
(loss)
|
$
(20,973)
|
|
$
(36,978)
|
|
$
(43,823)
|
Interest expense,
net
|
53,375
|
|
52,585
|
|
47,559
|
Provision for income
taxes
|
3,353
|
|
2,615
|
|
3,529
|
Depreciation and
amortization
|
76,663
|
|
70,500
|
|
69,456
|
Impairments of
long-lived assets
|
3,313
|
|
681
|
|
—
|
Bad debt expense
attributable to bankruptcy of customer
|
1,768
|
|
—
|
|
—
|
Non-cash cost of
compressors sold
|
6,023
|
|
4,126
|
|
5,309
|
Expense for
unamortized finance costs
|
—
|
|
3,539
|
|
—
|
Equity
Compensation
|
1,064
|
|
639
|
|
(780)
|
Un-amortized
financing costs charged to expense
|
—
|
|
—
|
|
3,541
|
Series A Preferred
redemption premium
|
1,468
|
|
—
|
|
—
|
Series A Preferred
fair value adjustments
|
1,470
|
|
(838)
|
|
1,227
|
Sales tax adjustment
affecting prior periods
|
—
|
|
2,110
|
|
—
|
Other
|
630
|
|
176
|
|
—
|
Severance
|
118
|
|
12
|
|
20
|
Software
implementation
|
—
|
|
—
|
|
778
|
Adjusted
EBITDA
|
$
28,272
|
|
$
99,167
|
|
$
86,816
|
EBITDA Adjustments to
comply with Credit Agreement
|
254
|
|
1,186
|
|
(1,670)
|
Adjusted EBITDA for
Net Leverage Calculation
|
$
8,526
|
|
$
100,353
|
|
$
85,146
|
|
|
|
|
|
|
Debt
Schedule
|
|
|
|
|
|
7.25% Senior
Notes
|
295,930
|
|
295,930
|
|
295,930
|
7.50% Senior Secured
Notes
|
350,000
|
|
350,000
|
|
350,000
|
Asset Based
Loan
|
3,500
|
|
—
|
|
—
|
Letters of
Credit
|
3,476
|
|
2,875
|
|
4,082
|
Cash on
Hand
|
(2,370)
|
|
(15,857)
|
|
(55,574)
|
|
|
|
|
|
|
Net
Debt
|
$
50,536
|
|
$
632,948
|
|
$
594,438
|
|
|
|
|
|
|
Net Leverage Ratio
(Net Debt/Adjusted EBITDA for Net Leverage
Calculation)
|
5.1x
|
|
6.3x
|
|
7.0x
|
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SOURCE CSI Compressco LP