Sept 30, 2016 |
Sept 30, 2016 |
||||||||||||||||
Three Months Ended |
|||||||||||||||||
Sept 30, 2016 |
June 30, 2016 |
Sept 30, 2015 |
|||||||||||||||
(In Thousands, Except Ratios, and Percentages) |
|||||||||||||||||
Net income (loss) |
$ |
(15,971) |
$ |
(4,680) |
$ |
1,619 |
(241)% |
(1,086)% |
|||||||||
Adjusted EBITDA(1) |
$ |
23,967 |
$ |
24,799 |
$ |
32,419 |
(3)% |
(26)% |
|||||||||
Distributable cash flow(1) |
$ |
12,715 |
$ |
15,207 |
$ |
21,807 |
(16)% |
(42)% |
|||||||||
Cash distribution per unit annualized |
$ |
1.51 |
$ |
1.51 |
$ |
2.01 |
—% |
(25)% |
|||||||||
Distribution coverage ratio(1) |
0.99x |
1.19x |
1.25x |
— |
— |
||||||||||||
Fleet growth capital expenditures |
$ |
— |
$ |
8 |
$ |
15,779 |
(100)% |
(100)% |
|||||||||
Net cash provided by operating activities |
$ |
9,958 |
$ |
20,469 |
$ |
11,340 |
(51)% |
(12)% |
|||||||||
Free cash flow(1) |
$ |
6,162 |
$ |
18,016 |
$ |
(7,566) |
(66)% |
181% |
(1) |
Adjusted EBITDA, distributable cash flow, distribution coverage ratio, and free cash flow are non-GAAP financial measures that are defined and reconciled to the nearest GAAP financial measure on Schedules B and C in this press release. |
Consolidated revenues for the quarter ended September 30, 2016 were
As of September 30, 2016 compression services fleet horsepower totaled 1,128,329 horsepower and the fleet utilization rate was 75.2%. We define the fleet utilization rate as the aggregate compressor package horsepower in service divided by the aggregate compressor package fleet horsepower as of a given date.
Unaudited results of operations for the three month period ended September 30, 2016 compared to the prior quarter and the prior year period, and unaudited results of operations for the nine month period ended September 30, 2016 compared to the prior year period are presented in the accompanying financial tables.
"As of
"In the third quarter of 2016 we completed the issuance, in the aggregate, of
"As we have continued to evaluate and reduce compression services fleet additions, we have lowered our total capital expenditure forecast for 2016 to
Conference Call
Third Quarter 2016 Distribution
On October 21, 2016,
CSI Compressco Overview
Forward Looking Statements
This press release contains "forward-looking statements" and information based on our beliefs and those of our general partner,
Schedule A - Income Statement |
|||||||||||||||||||
Results of Operations (unaudited) |
|||||||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||||||
Sept 30, 2016 |
June 30, 2016 |
Sept 30, 2015 |
Sept 30, 2016 |
Sept 30, 2015 |
|||||||||||||||
(In Thousands, Except per Unit Amounts) |
|||||||||||||||||||
Revenues: |
|||||||||||||||||||
Compression and related services |
$ |
53,103 |
$ |
57,827 |
$ |
72,766 |
$ |
173,341 |
$ |
220,880 |
|||||||||
Aftermarket services |
8,286 |
9,530 |
11,692 |
26,403 |
35,015 |
||||||||||||||
Equipment sales |
9,325 |
8,732 |
44,466 |
28,751 |
102,383 |
||||||||||||||
Total revenues |
$ |
70,714 |
$ |
76,089 |
$ |
128,924 |
$ |
228,495 |
$ |
358,278 |
|||||||||
Cost of revenues (excluding |
|||||||||||||||||||
Cost of compression and related services |
$ |
26,961 |
$ |
29,760 |
$ |
35,104 |
$ |
88,526 |
$ |
109,572 |
|||||||||
Cost of aftermarket services |
5,735 |
7,279 |
10,188 |
19,632 |
29,251 |
||||||||||||||
Cost of equipment sales |
7,830 |
6,624 |
40,823 |
24,407 |
92,084 |
||||||||||||||
Total cost of revenues |
$ |
40,526 |
$ |
43,663 |
$ |
86,115 |
$ |
132,565 |
$ |
230,907 |
|||||||||
Depreciation and amortization |
17,822 |
18,742 |
20,610 |
55,016 |
61,227 |
||||||||||||||
Impairments of long-lived assets |
— |
— |
— |
7,866 |
— |
||||||||||||||
Selling, general, and administrative expense |
9,279 |
8,183 |
10,469 |
27,692 |
32,272 |
||||||||||||||
Goodwill impairment |
— |
— |
— |
92,334 |
— |
||||||||||||||
Interest expense, net |
9,762 |
8,870 |
8,897 |
27,434 |
26,157 |
||||||||||||||
Other expense, net |
9,096 |
707 |
818 |
10,091 |
1,834 |
||||||||||||||
Income (loss) before income tax provision |
$ |
(15,771) |
$ |
(4,076) |
$ |
2,015 |
$ |
(124,503) |
$ |
5,881 |
|||||||||
Provision for income taxes |
200 |
604 |
396 |
1,497 |
1,291 |
||||||||||||||
Net income (loss) |
$ |
(15,971) |
$ |
(4,680) |
$ |
1,619 |
$ |
(126,000) |
$ |
4,590 |
|||||||||
Net income (loss) per diluted common unit |
$ |
(0.47) |
$ |
(0.14) |
$ |
0.04 |
$ |
(3.72) |
$ |
0.10 |
Reconciliation of Non-GAAP Financial Measures
The Partnership includes in this release the non-GAAP financial measures Adjusted EBITDA, 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:
The Partnership defines Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, and before certain non-cash charges including impairments, bad debt expense attributable to bankruptcy of customer, equity compensation, costs of compressors sold, fair value adjustments of our Preferred Units, and gain on extinguishment of debt, and excluding acquisition and transaction costs, and severance expense.
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, 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
The following table reconciles net income (loss) to Adjusted EBITDA, distributable cash flow and distribution coverage ratio for the three month periods ended September 30, 2016,
Schedule B - Reconciliation of Net Income to Adjusted EBITDA, Distributable Cash Flow and Distribution Coverage Ratio |
|||||||||||||||||||
Results of Operations (unaudited) |
|||||||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||||||
Sept 30, 2016 |
June 30, 2016 |
Sept 30, 2015 |
Sept 30, 2016 |
Sept 30, 2015 |
|||||||||||||||
(In Thousands) |
|||||||||||||||||||
Net income (loss) |
$ |
(15,971) |
$ |
(4,680) |
$ |
1,619 |
$ |
(126,000) |
$ |
4,590 |
|||||||||
Interest expense, net |
9,762 |
8,870 |
8,897 |
27,434 |
26,157 |
||||||||||||||
Provision for income taxes |
200 |
604 |
396 |
1,497 |
1,291 |
||||||||||||||
Depreciation and amortization |
17,822 |
18,742 |
20,610 |
55,016 |
61,227 |
||||||||||||||
Impairments of long-lived assets |
— |
— |
— |
7,866 |
— |
||||||||||||||
Goodwill impairment |
— |
— |
— |
92,334 |
— |
||||||||||||||
Bad debt expense attributable to bankruptcy of customer |
728 |
— |
— |
728 |
— |
||||||||||||||
Non-cash cost of compressors sold |
890 |
176 |
399 |
2,831 |
605 |
||||||||||||||
Equity compensation |
775 |
825 |
455 |
2,236 |
1,659 |
||||||||||||||
Series A Preferred transaction costs |
3,046 |
— |
— |
3,046 |
— |
||||||||||||||
Series A Preferred fair value adjustments |
7,198 |
— |
— |
7,198 |
— |
||||||||||||||
Gain on extinguishment of debt |
(540) |
— |
— |
(540) |
— |
||||||||||||||
CSI acquisition costs |
— |
— |
— |
— |
208 |
||||||||||||||
Severance |
57 |
262 |
43 |
562 |
287 |
||||||||||||||
Adjusted EBITDA(1) |
$ |
23,967 |
$ |
24,799 |
$ |
32,419 |
$ |
74,208 |
$ |
96,024 |
|||||||||
Less: |
|||||||||||||||||||
Current income tax expense |
258 |
421 |
(1,296) |
1,227 |
33 |
||||||||||||||
Maintenance capital expenditures |
2,771 |
1,435 |
3,665 |
6,519 |
7,869 |
||||||||||||||
Interest expense |
9,762 |
8,870 |
8,897 |
27,434 |
26,157 |
||||||||||||||
Severance |
57 |
262 |
43 |
562 |
287 |
||||||||||||||
Plus: |
|||||||||||||||||||
Non-cash items included in interest expense |
1,596 |
1,396 |
697 |
3,688 |
2,089 |
||||||||||||||
Distributable cash flow |
$ |
12,715 |
$ |
15,207 |
$ |
21,807 |
$ |
42,154 |
$ |
63,767 |
|||||||||
Cash distribution attributable to period |
$ |
12,799 |
$ |
12,784 |
$ |
17,405 |
$ |
38,367 |
$ |
51,796 |
|||||||||
Distribution coverage ratio |
0.99x |
1.19x |
1.25x |
1.10x |
1.23x |
||||||||||||||
The following table reconciles cash from operations to free cash flow for the three month periods ended September 30, 2016,
Schedule C - Reconciliation of Net Cash Provided by Operating Activities Operations to Free Cash Flow |
|||||||||||||||||||
Results of Operations (unaudited) |
|||||||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||||||
Sept 30, 2016 |
June 30, 2016 |
Sept 30, 2015 |
Sept 30, 2016 |
Sept 30, 2015 |
|||||||||||||||
(In Thousands) |
|||||||||||||||||||
Net cash provided by operating activities |
$ |
9,958 |
$ |
20,469 |
$ |
11,340 |
$ |
45,522 |
$ |
63,542 |
|||||||||
Capital expenditures, net of sales proceeds |
(3,796) |
(2,453) |
(18,906) |
(7,602) |
(75,998) |
||||||||||||||
Free cash flow |
$ |
6,162 |
$ |
18,016 |
$ |
(7,566) |
$ |
37,920 |
$ |
(12,456) |
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SOURCE
CSI Compressco LP, Midland, Texas, Timothy A. Knox, Phone: 432/563-1170, Fax: 432/561-9732, www.csicompressco.com