THE WOODLANDS, Texas,
Nov. 2, 2020 /PRNewswire/ -- CSI
Compressco LP ("CSI Compressco" or the "Partnership") (NASDAQ:
CCLP) today announced third quarter 2020 results.
Net loss for the third quarter ended September 30, 2020 was
$12.6 million, inclusive of
$0.8 million of non-recurring
charges. This compares to a net loss of $24.6 million, in the second quarter of 2020,
which included $15.8 million of
non-recurring charges. Revenues for the quarter ended
September 30, 2020 were $79
million, a decrease of 18% from the second quarter of 2020
driven by lower equipment sales following the closure of our
fabrication operations. Adjusted EBITDA in the third quarter was
$27.8 million (35.1% of revenue)
compared to $27.0 million (28.1% of
revenue) in the second quarter of 2020. Adjusted EBITDA in the
third quarter included the benefit of $5.0
million from the sale of used equipment.
Third Quarter 2020
Brady Murphy, President of CSI
Compressco commented, "Despite the industry macro environment with
another 36% sequential decline in drilling rigs in the U.S., our
business continues to perform very well. Excluding New Equipment
Sales, which we are exiting, revenue decreased 1% to $72.3 million in the third quarter of 2020.
Adjusted EBITDA improved by $722,000
and Adjusted EBITDA margins improved by 700 basis points.
Contributing to our improved Adjusted EBITDA margins was the
sale of some lower horsepower used unit sales as we continue to
rationalize the fleet and upgrade to larger horsepower, and from
continued efforts on cost reductions and streamlining our
operations."
"As part of our exit of the New Equipment Sales business, our
Midland, Texas fabrication
facility and real estate was sold in early July for $17 million in gross cash proceeds. We also
completed or expect to complete during the third and fourth
quarters of this year the sale of used compressors in three
separate transactions for a total of $13
million. We expect these sales of non-strategic and
under-utilized assets may generate, in aggregate, incremental
liquidity totaling approximately $30
million, $21 million of which
was generated in the third quarter."
"As a key part of our strategy going forward, I am very pleased
to announce the introduction of our new HelixTM
digitally enhanced compression telemetry system. The Helix
digitally enhanced compression system communicates at significantly
higher fidelity rates, streaming data 1,440 times faster than our
current telemetry solution. Our new telemetry system will leapfrog
existing compression industry systems and allow the use of big data
to improve performance, reliability and predictive maintenance. As
part of our Helix digitally enhanced compression development, we
are pleased to be the only oilfield services company to partner
with Houston's Rice University D2K program, a partnership
specifically designed to analyze big data and develop machine
learning models that enhance our current predictive maintenance
programs. Currently we have completed 25% of the hardware
upgrade roll outs and expect to be fully deployed by the end of
2021."
Compression Services revenue declined 5% sequentially while
gross margins decreased 200 basis points to 52.9% in third quarter
due to the full impact from pricing discounts and lower
utilization. Utilization decreased from 82.1% at the end of
June 2020 to 80.3% at the end of
September 2020. We believe our
strategy to invest in higher horsepower equipment will allow us to
maintain utilization rates above the low point of the last
downturn, which was 75.2% in the third quarter of 2016. Equipment
on standby improved significantly from a peak of 226,000 horsepower
in May of this year (approximately 20% of our fleet), to 78,000
horsepower at the end of September
2020 (approximately 8% of our fleet) as our customers
started bringing production and units back online. We believe that
production enhancement strategies on existing wells are becoming a
greater priority for producers as the natural gas pricing outlook
improves and producers focus on maximizing return on assets and
free cash flow amidst the back drop of capital discipline.
Compression is a low operating cost solution which allows producers
to increase liquids and gas production when integrated with their
artificial lift strategies. With regards to pricing, being a
strategic compression service provider to our top three customers
allowed us to stabilize pricing discounts to high single
digits.
Aftermarket Services revenue declined 12% sequentially while
gross margins improved 20 basis points to 14.8%. Aftermarket
Services is expected to gain momentum in 2021 as deferred
maintenance from 2020 is caught up. We are pleased to announce that
we have secured Master Service Agreement with one large midstream
provider for the provision of parts and services, representing
immediate revenue generating opportunities that expand into 2021
and beyond. Equipment sales revenue decreased from $24.3 million in the second quarter to
$11.9 million in the third quarter as
we monetized some of the last new equipment orders out of backlog,
as we exit the fabrication business. Our final shipments will be in
the fourth quarter of this year. We sold $5.0 million of used equipment in the third
quarter as we continue to monetize smaller under-utilized
units.
Cash flow from operations was a net use of cash of $4.5 million in the third quarter, compared to
positive cash generated of $4.8
million in the second quarter. Distributable cash flow in
the third quarter was $10.5 million,
up 25% from the second quarter of 2020, resulting in a distribution
coverage ratio of 21.9x.
This press release includes the following financial measures
that are not presented in accordance with generally accepted
accounting principles in the United
States ("U.S. 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 U.S. GAAP measures.
Unaudited results of operations for the quarter ended
September 30, 2020 compared to the prior quarter and the
corresponding prior year quarter are presented in the table
below.
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
Sep 30,
2020
|
|
Jun 30,
2020
|
|
Sep 30,
2019
|
|
Q3-2020 v Q2-
2020
|
|
Q3-2020 v Q3-
2019
|
|
(In Thousands, except
percentage changes)
|
Net loss
|
$
|
(12,607)
|
|
|
$
|
(24,578)
|
|
|
$
|
(3,613)
|
|
|
49
|
%
|
|
(249)
|
%
|
Adjusted
EBITDA
|
$
|
27,769
|
|
|
$
|
27,047
|
|
|
$
|
33,996
|
|
|
3
|
%
|
|
(18)
|
%
|
Distributable cash
flow
|
$
|
10,512
|
|
|
$
|
8,405
|
|
|
$
|
15,803
|
|
|
25
|
%
|
|
(33)
|
%
|
Net cash provided by
(used in) operating
activities
|
$
|
(4,451)
|
|
|
$
|
4,823
|
|
|
$
|
27,119
|
|
|
(192)
|
%
|
|
(116)
|
%
|
Free cash
flow
|
$
|
14,099
|
|
|
$
|
3,698
|
|
|
$
|
6,252
|
|
|
281
|
%
|
|
126
|
%
|
As of September 30, 2020, service compressor fleet
horsepower was 1,172,307 and fleet horsepower in service was
941,747(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.
Balance Sheet
Cash on hand at the end of the third quarter was $16.7 million. No amounts were drawn nor
outstanding on the Partnership's asset-based loan at the end of the
third quarter. Our debt maturity schedule 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 in 2026. Net
leverage ratio at the end of the quarter was 5.4X.
During the third quarter, we consumed $11.8 million of cash in working capital as some
of our international customers delayed payments due to the COVID-19
pandemic while we paid our domestic suppliers to maintain strong
relationships and discounts.
Capital Expenditures - 2020 Expectations
We expect capital expenditures for 2020 to be between
$31 million and $34 million. The forecast includes between
$6 million and $7 million for new fleet additions.
Maintenance capital expenditures are expected to be between
$20 million and $21 million. Investments in the Helix
digitally enhanced compression system and other technologies are
expected to be between $5 million and
$6 million
Third Quarter 2020 Cash Distribution on Common Units
On October 19, 2020, CSI
Compressco announced that the board of directors of its general
partner declared a cash distribution attributable to the third
quarter of 2020 of $0.01 per
outstanding common unit, which will be paid on November 13, 2020, to common unitholders of
record as of the close of business on November 1, 2020. The distribution coverage
ratio for the third quarter of 2020 was 21.9x.
Conference Call
CSI Compressco will host a conference call to discuss third
quarter results today, November 2, 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 10148820, 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 1.17 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 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.
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 U.S. 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 U.S. 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 A -
Income Statement
Results of Operations (unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
Sep 30,
2020
|
|
Jun 30,
2020
|
|
Sep 30,
2019
|
|
Sep 30,
2020
|
|
Sep 30,
2019
|
|
(In Thousands, Except
per Unit Amounts)
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Compression and
related services
|
$
|
53,419
|
|
|
$
|
56,336
|
|
|
$
|
65,037
|
|
|
$
|
175,520
|
|
|
$
|
192,973
|
|
Aftermarket
services
|
13,862
|
|
|
15,737
|
|
|
20,426
|
|
|
47,569
|
|
|
52,196
|
|
Equipment
sales
|
11,877
|
|
|
24,340
|
|
|
28,284
|
|
|
42,761
|
|
|
107,870
|
|
Total
revenues
|
$
|
79,158
|
|
|
$
|
96,413
|
|
|
$
|
113,747
|
|
|
$
|
265,850
|
|
|
$
|
353,039
|
|
Cost of revenues
(excluding depreciation and
amortization expense):
|
|
|
|
|
|
|
|
|
|
Cost of compression
and related services
|
$
|
25,133
|
|
|
$
|
25,395
|
|
|
$
|
30,395
|
|
|
$
|
82,136
|
|
|
$
|
93,536
|
|
Cost of aftermarket
services
|
11,815
|
|
|
13,433
|
|
|
17,163
|
|
|
41,493
|
|
|
43,841
|
|
Cost of equipment
sales
|
12,465
|
|
|
24,415
|
|
|
26,518
|
|
|
43,580
|
|
|
98,149
|
|
Total cost of
revenues
|
$
|
49,413
|
|
|
$
|
63,243
|
|
|
$
|
74,076
|
|
|
$
|
167,209
|
|
|
$
|
235,526
|
|
Depreciation and
amortization
|
19,947
|
|
|
20,117
|
|
|
18,459
|
|
|
59,972
|
|
|
56,045
|
|
Impairments of
long-lived assets
|
—
|
|
|
8,977
|
|
|
849
|
|
|
14,348
|
|
|
3,160
|
|
Insurance
recoveries
|
—
|
|
|
(517)
|
|
|
(325)
|
|
|
(517)
|
|
|
(325)
|
|
Selling, general, and
administrative expense
|
9,150
|
|
|
10,172
|
|
|
11,336
|
|
|
29,578
|
|
|
32,975
|
|
Interest expense,
net
|
13,886
|
|
|
13,580
|
|
|
13,533
|
|
|
40,635
|
|
|
39,877
|
|
Series A Preferred
fair value adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,470
|
|
Other (income)
expense, net
|
(1,326)
|
|
|
4,403
|
|
|
(205)
|
|
|
3,517
|
|
|
21
|
|
Loss before income
tax provision
|
$
|
(11,912)
|
|
|
$
|
(23,562)
|
|
|
$
|
(3,976)
|
|
|
$
|
(48,892)
|
|
|
$
|
(15,710)
|
|
Provision (benefit)
for income taxes
|
695
|
|
|
1,016
|
|
|
(363)
|
|
|
1,923
|
|
|
3,306
|
|
Net loss
|
$
|
(12,607)
|
|
|
$
|
(24,578)
|
|
|
$
|
(3,613)
|
|
|
$
|
(50,815)
|
|
|
$
|
(19,016)
|
|
Net loss per diluted
common unit
|
$
|
(0.25)
|
|
|
$
|
(0.51)
|
|
|
$
|
(0.08)
|
|
|
$
|
(1.05)
|
|
|
$
|
(0.40)
|
|
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 September 30,
2020, June 30, 2020 and September 30, 2019:
Results of
Operations (unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
Sep 30,
2020
|
|
Jun 30,
2020
|
|
Sep 30,
2019
|
|
Sep 30,
2020
|
|
Sep 30,
2019
|
|
(In Thousands, except
Ratios)
|
Net loss
|
$
|
(12,607)
|
|
|
$
|
(24,578)
|
|
|
$
|
(3,613)
|
|
|
$
|
(50,815)
|
|
|
$
|
(19,016)
|
|
Interest expense,
net
|
13,886
|
|
|
13,580
|
|
|
13,533
|
|
|
40,635
|
|
|
39,877
|
|
Provision (benefit)
for income taxes
|
695
|
|
|
1,016
|
|
|
(363)
|
|
|
1,923
|
|
|
3,306
|
|
Depreciation and
amortization
|
19,947
|
|
|
20,117
|
|
|
18,459
|
|
|
59,972
|
|
|
56,045
|
|
Impairments of fixed
assets and inventory
|
—
|
|
|
8,977
|
|
|
849
|
|
|
14,348
|
|
|
3,313
|
|
Bad debt expense
attributable to bankruptcy of customer
|
—
|
|
|
—
|
|
|
1,768
|
|
|
—
|
|
|
1,768
|
|
Non-cash cost of
compressors sold
|
4,804
|
|
|
631
|
|
|
2,803
|
|
|
7,244
|
|
|
3,841
|
|
Equity
compensation
|
232
|
|
|
488
|
|
|
(211)
|
|
|
1,044
|
|
|
744
|
|
Series A Preferred
redemption premium
|
—
|
|
|
—
|
|
|
399
|
|
|
—
|
|
|
1,468
|
|
Series A Preferred
fair value adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,470
|
|
Bond exchange
expenses
|
22
|
|
|
4,755
|
|
|
—
|
|
|
4,777
|
|
|
—
|
|
Severance
|
484
|
|
|
1,084
|
|
|
118
|
|
|
1,840
|
|
|
118
|
|
Other
|
306
|
|
|
977
|
|
|
254
|
|
|
1,610
|
|
|
630
|
|
Adjusted
EBITDA
|
$
|
27,769
|
|
|
$
|
27,047
|
|
|
$
|
33,996
|
|
|
$
|
82,578
|
|
|
$
|
93,564
|
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
Current income tax
expense
|
516
|
|
|
615
|
|
|
34
|
|
|
1,335
|
|
|
2,757
|
|
Maintenance capital
expenditures
|
4,354
|
|
|
3,951
|
|
|
5,729
|
|
|
14,795
|
|
|
16,358
|
|
Interest
expense
|
13,886
|
|
|
13,580
|
|
|
13,533
|
|
|
40,635
|
|
|
39,877
|
|
Severance and
other
|
790
|
|
|
2,061
|
|
|
372
|
|
|
3,450
|
|
|
748
|
|
Plus:
|
|
|
|
|
|
|
|
|
|
Non-cash items
included in interest expense
|
2,289
|
|
|
1,565
|
|
|
1,475
|
|
|
5,010
|
|
|
4,004
|
|
Distributable cash
flow
|
$
|
10,512
|
|
|
$
|
8,405
|
|
|
$
|
15,803
|
|
|
$
|
27,373
|
|
|
$
|
37,828
|
|
|
|
|
|
|
|
|
|
|
|
Cash distribution
attributable to period
|
$
|
480
|
|
|
$
|
480
|
|
|
$
|
477
|
|
|
$
|
1,438
|
|
|
$
|
1,431
|
|
Distribution coverage
ratio
|
21.9x
|
|
17.5x
|
|
33.1x
|
|
|
19x
|
|
26.4x
|
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 September 30, 2020, June 30, 2020 and
September 30, 2019:
Results of
Operations (unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
Sep 30,
2020
|
|
Jun 30,
2020
|
|
Sep 30,
2019
|
|
Sep 30,
2020
|
|
Sep 30,
2019
|
|
(In
Thousands)
|
Net cash provided by
operating activities
|
$
|
(4,451)
|
|
|
$
|
4,823
|
|
|
$
|
27,119
|
|
|
$
|
13,729
|
|
|
$
|
67,461
|
|
Capital expenditures,
net of sales proceeds
|
1,550
|
|
|
(1,125)
|
|
|
(20,867)
|
|
|
(6,058)
|
|
|
(60,453)
|
|
Midland
proceeds
|
$
|
17,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17,000
|
|
|
$
|
—
|
|
Free cash
flow
|
$
|
14,099
|
|
|
$
|
3,698
|
|
|
$
|
6,252
|
|
|
$
|
24,671
|
|
|
$
|
7,008
|
|
Schedule D – Reconciliation to Adjusted
EBITDA Margin (unaudited)
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
Sep 30,
2020
|
|
Jun 30,
2020
|
|
Sep 30,
2019
|
|
Sep 30,
2020
|
|
Sep 30,
2019
|
Consolidated
|
(In Thousands, except
Margin %)
|
Revenue
|
$
|
79,158
|
|
|
$
|
96,413
|
|
|
$
|
113,747
|
|
|
$
|
265,850
|
|
|
$
|
353,039
|
|
Income (loss) before
tax
|
$
|
(11,912)
|
|
|
$
|
(23,562)
|
|
|
$
|
(3,976)
|
|
|
$
|
(48,892)
|
|
|
$
|
(15,710)
|
|
Adjusted income
(loss) before tax
|
(15.0)
|
%
|
|
(24.4)
|
%
|
|
(3.5)
|
%
|
|
(18.4)
|
%
|
|
(4.4)
|
%
|
Adjusted EBITDA
(Schedule B)
|
$
|
27,769
|
|
|
$
|
27,047
|
|
|
$
|
33,996
|
|
|
$
|
82,578
|
|
|
$
|
93,564
|
|
Adjusted EBITDA
Margin
|
35.1
|
%
|
|
28.1
|
%
|
|
29.9
|
%
|
|
31.1
|
%
|
|
26.5
|
%
|
Schedule E
– Reconciliation of Net Loss to Adjusted EBITDA for Net
Leverage Ratio Calculation (unaudited) (in thousands, except
ratios)
|
|
Twelve Months
Ended
|
|
Sep 30,
2020
|
|
|
Net loss
|
$
|
(52,772)
|
|
Interest expense,
net
|
54,133
|
|
Provision for income
taxes
|
1,970
|
|
Depreciation and
amortization
|
80,590
|
|
Impairments and other
charges
|
14,348
|
|
Bad debt expense
attributable to bankruptcy of customer
|
—
|
|
Non-cash cost of
compressors sold
|
9,426
|
|
Equity
Compensation
|
1,364
|
|
Series A Preferred
redemption premium
|
—
|
|
Financing
Fees
|
4,777
|
|
Severance
|
1,840
|
|
Other
|
1,610
|
|
Adjusted
EBITDA
|
$
|
117,286
|
|
EBITDA adjustments to
comply with Credit Agreement
|
(1,109)
|
|
Adjusted EBITDA for
Net Leverage Calculation
|
$
|
116,177
|
|
|
|
|
|
|
|
Debt
Schedule
|
Sep 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
|
—
|
|
Letters of
Credit
|
2,500
|
|
Cash on
Hand
|
(16,699)
|
|
Net
Debt
|
$
|
622,052
|
|
|
|
Net Leverage Ratio
(Net Debt/Adjusted EBITDA for Net
Leverage Calculation)
|
5.4x
|
|
|
|
|
|
Schedule F
– Balance Sheet
|
|
September
30,
2020
|
|
December
31,
2019
|
(in
thousands)
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
16,699
|
|
|
$
|
2,370
|
|
Trade accounts
receivable, net of allowances for doubtful accounts of $1,228 as
of
September 30, 2020 and $3,350 as of December 31, 2019
|
56,521
|
|
|
64,724
|
|
Inventories
|
33,981
|
|
|
56,037
|
|
Prepaid expenses and
other current assets
|
6,303
|
|
|
4,162
|
|
Total current
assets
|
113,504
|
|
|
127,293
|
|
Property, plant, and
equipment:
|
|
|
|
Land and
building
|
13,259
|
|
|
35,125
|
|
Compressors and
equipment
|
978,422
|
|
|
976,469
|
|
Vehicles
|
7,904
|
|
|
9,205
|
|
Construction in
progress
|
8,817
|
|
|
26,985
|
|
Total property, plant,
and equipment
|
1,008,402
|
|
|
1,047,784
|
|
Less accumulated
depreciation
|
(435,902)
|
|
|
(405,417)
|
|
Net property, plant,
and equipment
|
572,500
|
|
|
642,367
|
|
Other
assets:
|
|
|
|
Deferred tax
asset
|
24
|
|
|
24
|
|
Intangible assets, net
of accumulated amortization of $29,971 as of September 30,
2020 and $27,751 as of December 31, 2019
|
25,797
|
|
|
28,017
|
|
Operating lease
right-of-use assets
|
34,680
|
|
|
21,006
|
|
Other assets
|
4,300
|
|
|
3,539
|
|
Total other
assets
|
64,801
|
|
|
52,586
|
|
Total
assets
|
$
|
750,805
|
|
|
$
|
822,246
|
|
LIABILITIES AND
PARTNERS' CAPITAL
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
|
19,404
|
|
|
$
|
47,837
|
|
Unearned
income
|
6,463
|
|
|
9,505
|
|
Accrued liabilities and
other
|
41,600
|
|
|
42,581
|
|
Amounts payable to
affiliates
|
9,428
|
|
|
7,704
|
|
Total current
liabilities
|
76,895
|
|
|
107,627
|
|
Other
liabilities:
|
|
|
|
Long-term debt,
net
|
636,943
|
|
|
638,238
|
|
Deferred tax
liabilities
|
1,620
|
|
|
1,211
|
|
Long-term affiliate
payable
|
11,858
|
|
|
12,324
|
|
Operating lease
liabilities
|
25,896
|
|
|
13,822
|
|
Other long-term
liabilities
|
17
|
|
|
33
|
|
Total other
liabilities
|
676,334
|
|
|
665,628
|
|
Commitments and
contingencies
|
|
|
|
Partners'
capital:
|
|
|
|
General partner
interest
|
(555)
|
|
|
180
|
|
Common units
(47,344,351 units issued and outstanding at September 30, 2020
and 47,078,529 units issued and outstanding at December 31,
2019)
|
12,776
|
|
|
63,384
|
|
Accumulated other
comprehensive income (loss)
|
(14,645)
|
|
|
(14,573)
|
|
Total partners'
capital
|
(2,424)
|
|
|
48,991
|
|
Total liabilities and
partners' capital
|
$
|
750,805
|
|
|
$
|
822,246
|
|
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SOURCE CSI Compressco LP