OKLAHOMA CITY, Nov. 5, 2013 /PRNewswire/ -- Compressco
Partners, L.P. (Compressco Partners or the Partnership) (NASDAQ:
GSJK) today announced third quarter 2013 consolidated results.
Earnings before interest, taxes, depreciation and amortization
(EBITDA) for the third quarter of 2013 were $9.2 million, with net income of $4.2 million. This compares to EBITDA and net
income of $9.4 million and
$5.1 million, respectively, during
the prior year period. Compared to the second quarter of 2013,
EBITDA and net income improved by $2.5
million and $1.7 million,
respectively. Distributable cash flow for the quarter ended
September 30, 2013 was $8.4 million (EBITDA and distributable cash flow
are non-GAAP financial measures that are defined and reconciled to
the nearest GAAP financial measures later in the release).
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Highlights of the third quarter 2013 results include:
- average compressor unit utilization of 84.2%, up from 82.0%
from the prior year quarter;
- increased demand for our unconventional compression
applications in the United States
compared to the prior year quarter and the second quarter of
2013;
- sequential quarterly net income improvement of 70% compared to
the second quarter of 2013; and
- cost of compression as a percentage of compression services
revenues decreased by 6.3% compared to the second quarter of
2013.
Consolidated revenues for the quarter ended September 30, 2013 were $30.0 million versus $28.7
million for the third quarter of 2012. Income before tax for
the quarter ended September 30, 2013
was $5.3 million versus $6.0 million for the third quarter of 2012.
Results of operations for the third quarter of 2013 compared to the
third quarter of 2012 reflect increased compression and other
service revenues both in the United
States and internationally. Compression and other services
revenues have increased due, in part, to higher utilization in
the United States and increased
compression services in Argentina
and Canada, partially offset by
reduced revenues in Mexico. Cost
of compression and other services increased due primarily to higher
labor and equipment related costs associated with increased
activity. Cost of compression and other services also increased as
a percentage of compression services revenues due to the decrease
in the higher margin Mexican activity levels compared to the prior
year period.
Unaudited results of operations for the three and nine month
periods ended September 30, 2013
compared to the respective prior year periods are presented in the
accompanying financial tables.
Ronald J. Foster, President of
Compressco Partners, remarked, "Our third quarter results reflect
higher fleet utilization driven by strong demand for our
unconventional compression services applications in the United States, particularly vapor recovery
services. We also benefited from international compression service
opportunities, including modest but expected improvement in demand
for our services in Mexico
compared to the second quarter of 2013. Our continued focus
on pricing, cost controls and efficiencies also contributed to
improved sequential financial performance compared to the second
quarter of 2013. In summary, each of the above factors supported
our latest increase in the quarterly distribution to our unit
holders, contributing to a cumulative 11% increase in the quarterly
distribution over the last five quarters."
Compressco Partners will host a conference call to discuss third
quarter 2013 results today, November 5,
2013, at 10:30 am Eastern
Time. The phone number for the call is 877/870-4263. The
conference will also be available by live audio webcast and may be
accessed through the Compressco Partners website at
www.compressco.com.
On October 21, 2013, Compressco
Partners announced that the board of directors of its general
partner declared a cash distribution attributable to the third
quarter of 2013 of $0.43 per
outstanding unit, payable on November 15,
2013 to unitholders of record as of the close of business on
November 1, 2013.
Compressco Partners is a provider of compression-based
production enhancement services, which are used in both
conventional wellhead compression applications and unconventional
compression applications, and in certain circumstances, well
monitoring and sand separation services. Compressco Partners
provides services to a broad base of natural gas and oil
exploration and production companies operating throughout many of
the onshore producing regions of the
United States. Internationally, Compressco Partners has
significant operations in Mexico
and Canada and a growing presence
in certain countries in South
America, Eastern Europe,
and the Asia-Pacific region.
Compressco Partners is managed by Compressco Partners GP Inc.,
which is an indirect, wholly owned subsidiary of TETRA
Technologies, Inc. (NYSE: TTI).
Forward Looking Statements
This press release includes certain statements that are deemed
to be forward-looking statements. Generally, the use of words such
as "may," "expect," "intend," "estimate," "projects," "anticipate,"
"believe," "assume," "could," "should," "plans," "targets" or
similar expressions that convey the uncertainty of future events,
activities, expectations or outcomes identify forward-looking
statements. These forward-looking statements include statements
concerning expected results of operations for 2013, anticipated
activities by our customers, financial guidance, estimated
distributable cash, estimated earnings, earnings per unit, and
statements regarding Compressco Partners' beliefs, expectations,
plans, goals, future events and performance, and other statements
that are not purely historical. These forward-looking statements
are based on certain assumptions and analyses made by Compressco
Partners in light of its experience and its perception of
historical trends, current conditions, expected future developments
and other factors it believes are appropriate in the circumstances.
Such statements are subject to a number of risks and uncertainties,
many of which are beyond the control of Compressco Partners.
Investors are cautioned that any such statements are not guarantees
of future performances or results and that actual results or
developments may differ materially from those projected in the
forward-looking statements. Some of the factors that could affect
actual results are described in Compressco Partners' Annual Report
on Form 10-K for the year ended December 31,
2012, as well as other risks identified from time to time in
its reports on Form 10-Q and Form 8-K filed with the U.S.
Securities and Exchange Commission. Compressco Partners undertakes
no obligation to update or revise any forward-looking statement to
reflect new information or events.
Results of operations
(unaudited)
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
(In
Thousands)
|
Revenues
|
|
|
|
|
|
|
|
Compression and other services
|
$
|
28,408
|
|
|
$
|
27,167
|
|
|
$
|
84,870
|
|
|
$
|
72,427
|
|
Sales of
compressors and parts
|
1,555
|
|
|
1,517
|
|
|
3,984
|
|
|
3,737
|
|
Total
revenues
|
29,963
|
|
|
28,684
|
|
|
88,854
|
|
|
76,164
|
|
|
|
|
|
|
|
|
|
Cost of revenues
(excluding depreciation and amortization expense)
|
|
|
|
|
|
|
Cost of
compression and other services
|
15,354
|
|
|
13,518
|
|
|
48,613
|
|
|
37,550
|
|
Cost of
compressors and parts sales
|
726
|
|
|
829
|
|
|
2,096
|
|
|
2,057
|
|
Total cost of
revenues
|
16,080
|
|
|
14,347
|
|
|
50,709
|
|
|
39,607
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expense
|
4,473
|
|
|
4,516
|
|
|
12,988
|
|
|
12,388
|
|
Depreciation and
amortization
|
3,717
|
|
|
3,376
|
|
|
10,723
|
|
|
9,721
|
|
Interest (income)
expense, net
|
136
|
|
|
24
|
|
|
303
|
|
|
2
|
|
Other (income)
expense, net
|
210
|
|
|
427
|
|
|
433
|
|
|
618
|
|
Income before tax
provision
|
5,347
|
|
|
5,994
|
|
|
13,698
|
|
|
13,828
|
|
Provision for income
taxes
|
1,144
|
|
|
931
|
|
|
2,478
|
|
|
2,396
|
|
Net income
|
$
|
4,203
|
|
|
$
|
5,063
|
|
|
$
|
11,220
|
|
|
$
|
11,432
|
|
NOTE: Beginning with the three month period ended September 30, 2013, certain ad valorem tax
expenses for operating equipment are classified as cost of
compression and other services instead of being included in general
and administrative expenses as reported in prior periods. Prior
period amounts have been reclassified to conform to the current
year period's presentation. The amount of such reclassification is
$0.6 million for the six month period
ended June 30, 2013, and $0.4 million and $1.2
million for the three and nine month periods ended
September 30, 2012, respectively.
This reclassification has no effect on net income for any of the
periods presented.
Reconciliation of Non-GAAP Financial Measures
Compressco Partners includes in this release the non-GAAP
financial measures EBITDA, distributable cash flow and distribution
coverage ratio. 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 EBITDA as earnings before interest,
taxes, depreciation and amortization.
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 EBITDA less current income tax expense,
maintenance capital expenditures, and interest expense, plus the
non-cash cost of compressors sold and equity compensation
expense. The Partnership also calculates the ratio of
distributable cash flow to the total cash distributed (the
distribution coverage ratio) as it 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 quarterly distribution
payable on all outstanding common and subordinated units and the
general partner interest.
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 EBITDA, distributable 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 Compressco Partners. 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 Compressco Partners 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.
The following table reconciles net income to EBITDA for the
three and nine month periods ended September
30, 2013 and September 30,
2012:
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
(In
Thousands)
|
Net income
|
$
|
4,203
|
|
|
$
|
5,063
|
|
|
$
|
11,220
|
|
|
$
|
11,432
|
|
Provision for income
taxes
|
1,144
|
|
|
931
|
|
|
2,478
|
|
|
2,396
|
|
Depreciation and
amortization
|
3,717
|
|
|
3,376
|
|
|
10,723
|
|
|
9,721
|
|
Interest (income)
expense, net
|
136
|
|
|
24
|
|
|
303
|
|
|
2
|
|
EBITDA
|
$
|
9,200
|
|
|
$
|
9,394
|
|
|
$
|
24,724
|
|
|
$
|
23,551
|
|
The following table reconciles net income to distributable cash
flow and distribution coverage ratio for the three and nine month
periods ended September 30, 2013:
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September 30,
2013
|
|
September 30,
2013
|
|
(In
Thousands)
|
Net
income
|
$
|
4,203
|
|
$
|
11,220
|
Provision for income taxes
|
1,144
|
|
2,478
|
Depreciation and amortization
|
3,717
|
|
10,723
|
Interest
(income) expense, net
|
136
|
|
303
|
EBITDA
|
9,200
|
|
24,724
|
Less:
|
|
|
|
Current
income tax benefit (expense)
|
(791)
|
|
(2,269)
|
Maintenance capital expenditures
|
(295)
|
|
(891)
|
Interest
income (expense), net
|
(136)
|
|
(303)
|
Plus:
|
|
|
|
Non-cash
cost of compressors sold
|
77
|
|
119
|
Equity
compensation
|
337
|
|
1,030
|
Distributable cash
flow
|
$
|
8,392
|
|
$
|
22,410
|
|
|
|
|
Cash distribution
attributable to period
|
$
|
6,824
|
|
$
|
20,308
|
|
|
|
|
Distribution coverage
ratio
|
1.23x
|
|
1.10x
|
|
|
|
|
|
|
|
SOURCE Compressco Partners, L.P.