CorEnergy Infrastructure Trust, Inc. ("CorEnergy" or the
"Company") today announced financial results for the first quarter,
ended March 31, 2021.
First Quarter 2021 and Recent Highlights
- Effective February 1, 2021, CorEnergy acquired Crimson
Midstream Holdings, LLC (“Crimson”) in exchange for total
consideration of $344 million, including a 49.5 % voting interest
and the right to the remaining voting interest upon regulatory
approval.
- As part of the Crimson transaction, effective February 1, 2021,
CorEnergy transferred its GIGS asset to the sellers of Crimson,
terminated the lease of GIGS, and agreed to forgo collection
efforts on past rents and to dismiss other claims against the
tenant of GIGS.
- Also effective February 1, 2021, CorEnergy entered into an
agreement to acquire Corridor, its external manager in exchange for
CorEnergy equity securities (subject to stockholder approval as
required by NYSE rules).
Management Commentary
"In the first quarter of 2021 CorEnergy created a critical
infrastructure platform of energy pipelines and storage assets,
subject to regulatory oversight," said Dave Schulte, Chief
Executive Officer. "The Crimson management team retained
substantially all of their value in equity securities, and the
Corridor team agreed to internalize for equity. We created an
industry leading platform to own and operate or lease
infrastructure assets with desirable REIT characteristics and
management alignment directly with our stockholders."
"The first quarter results include two months of Crimson
operations in California, where volumes have continued to be
constrained by the effects of the COVID-19 pandemic. We believe
that a combination of a return to pre-COVID market conditions in
California, near-term commercial opportunities and acquisition
efficiencies will ultimately enable CorEnergy to increase our
annualized common stock dividend from the current $0.20 per year to
our target of $0.35-$0.40 per share. In the interim, our newly
strengthened balance sheet provides coverage of our debt and
preferred equity obligations, plus additional protection to our
common equity holders through the potential subordination of
dividends on common equivalent equity expected to be held by
management upon approval of our stockholders."
"While we have just completed a significant transaction, we are
already evaluating both asset and platform-level expansion
opportunities. We believe CorEnergy is positioned to develop scale
and further diversification, while participating in the ongoing
energy transition in the United States, particularly within our
footprint in California," continued Schulte. "While there is no
assurance that acquisitions will be completed, the increase in
prospective opportunities should enable us to provide stockholders
with dividend stability with prospects for modest long-term
growth."
First Quarter Performance Summary
First quarter 2021 reflects the adverse impact of the
disposition of GIGS and related assets and costs, and only two
months of activity from Crimson, which was acquired effective
February 1, 2021. First quarter financial highlights are as
follows:
For the Three Months
Ended
March 31, 2021
Per Share
Total
Basic
Diluted
Net Loss (Attributable to Common
Stockholders)1
$
(14,609,243
)
$
(1.07
)
$
(1.07
)
Net Cash Used In Operating Activities
$
(2,481,161
)
Adjusted Net Income1
$
2,256,262
Cash Available for Distribution (CAD)1
$
(4,338,401
)
Adjusted EBITDA2
$
8,087,066
Dividends Declared to Common
Stockholders
$
0.05
1 Adjusted Net Income excludes special items of $6.1 million
which are not representative of on-going operations; however CAD
has not been so adjusted. Reconciliations of Adjusted Net Income
and CAD, as presented, to Net Loss and Net Cash Used In Operating
Activities are included at the end of this press release. See Note
1 for additional information.
2 Adjusted EBITDA excludes special items of $6.1 million which
are not representative of on-going operations. Reconciliation of
Adjusted EBITDA, as presented, to Net Loss is included at the end
of this press release. See Note 2 for additional information.
Dividend and Distribution Declarations
The Company currently expects all of its 2021 Common Stock and
Preferred Stock dividends will be characterized as Return of
Capital for tax purposes.
Common Stock: A first quarter 2021
dividend of $0.05 per share was declared for CorEnergy's common
stock. The dividend will be paid on May 28, 2021, to stockholders
of record on May 14, 2021.
Preferred Stock: For the Company's
7.375% Series A Cumulative Redeemable Preferred Stock, a cash
dividend of $0.4609375 per depositary share was declared. The
preferred stock dividend, which equates to an annual dividend
payment of $1.84375 per depositary share, will be paid on May 28,
2021, to stockholders of record on May 14, 2021.
Class A-1 Units: For the Company's
Series C Preferred stock, as if they were outstanding, a cash
dividend which equates to 9% annually on the par value was declared
from the period commencing April 1, 2021 ending on May 31, 2021,
payable in cash as a distribution to holders of Class A-1
Units.
Class A-2 Units: For the Company's
Series B Preferred stock, as if they were outstanding, a dividend
which equates to 4% annually on the par value was declared from the
period commencing April 1, 2021 ending on May 31, 2021, which the
Company intends to pay as a distribution to holders of Class A-2
Units.
Outlook
CorEnergy updated the following outlook provided subsequent to
its acquisition of Crimson California, with revenue and adjusted
EBITDA guidance from the second half of 2021.
- Revenue expected to be $130-$135 million annualizing both
CORR’s legacy assets and Crimson’s assets for the second half
2021
- Internalization of manager expected to result in approximately
$2.0 million of annualized SG&A savings
- Combined adjusted EBITDA of $50-$52 million, on an annualized
basis, beginning in the second half of 2021
- Maintenance capital expenditures expected to be in the range of
$10-$11 million in 2021
- Current annualized dividend of $0.20, targeting $0.35-$0.40
upon a return to pre-COVID market conditions in California, with
near term commercial opportunities providing upside
- Term Loan amortization scheduled at $8.0 million per year
facilitates deleveraging to a target of < 4.0x Adjusted EBITDA
by FYE 2022 to create financial flexibility and reduce risk
First Quarter Results Call
CorEnergy will host a conference call on Tuesday, May 11, 2021
at 2:00 p.m. Central Time to discuss its financial results. Please
dial into the call at +1-201-689-8035 at least five minutes prior
to the scheduled start time. The call will also be webcast in a
listen-only format. A link to the webcast will be accessible at
corenergy.reit.
A replay of the call will be available until 2:00 p.m. Central
Time on June 11, 2021, by dialing +1-919-882-2331. The Conference
ID is 40739. A webcast replay of the conference call will also be
available on the Company’s website, corenergy.reit.
About CorEnergy Infrastructure Trust, Inc.
CorEnergy Infrastructure Trust, Inc. (NYSE: CORR, CORRPrA) is a
real estate investment trust that owns and operates or leases
regulated natural gas transmission and distribution lines and crude
oil gathering, storage and transmission pipelines and associated
rights-of-way. For more information, please visit
corenergy.reit.
Forward-Looking Statements
This press release contains certain statements that may include
"forward-looking statements" within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. All statements, other than statements of
historical fact, included herein are "forward-looking statements."
Although CorEnergy believes that the expectations reflected in
these forward-looking statements are reasonable, they do involve
assumptions, risks and uncertainties, and these expectations may
prove to be incorrect. Actual results could differ materially from
those anticipated in these forward-looking statements as a result
of a variety of factors, including, among others, failure to
realize the anticipated benefits of the Transaction or
Internalization; the risk that CPUC approval is not obtained, is
delayed or is subject to unanticipated conditions that could
adversely affect CorEnergy or the expected benefits of the
Transaction, risks related to the uncertainty of the projected
financial information with respect to Crimson, the failure to
receive the required approvals by existing CorEnergy stockholders;
the risk that a condition to the closing of the Internalization may
not be satisfied, CorEnergy’s ability to consummate the
Internalization, and those factors discussed in CorEnergy’s reports
that are filed with the Securities and Exchange Commission. You
should not place undue reliance on these forward-looking
statements, which speak only as of the date of this press release.
Other than as required by law, CorEnergy does not assume a duty to
update any forward-looking statement. In particular, any
distribution paid in the future to our stockholders will depend on
the actual performance of CorEnergy, its costs of leverage and
other operating expenses and will be subject to the approval of
CorEnergy’s Board of Directors and compliance with leverage
covenants.
Notes
1Management uses CAD as a measure of long-term sustainable
performance. Adjusted Net Income and CAD are non-GAAP measures.
Adjusted Net Income represents net income (loss) adjusted for loss
on impairment of property; (gain) loss on disposal of property;
deferred rent receivable write-off; (gain) loss on extinguishment
of debt and transaction-related costs. CAD represents Adjusted Net
Income adjusted for depreciation, amortization and ARO accretion
expense; amortization of debt issuance costs and income tax expense
(benefit) less maintenance capital expenditures; preferred dividend
requirements and mandatory debt amortization. Reconciliations of
Adjusted Net Income and CAD to Net Loss and Net Cash Provided By
(Used In) Operating Activities are included in the additional
financial information attached to this press release.
2 Management uses Adjusted EBITDA as a measure of operating
performance. Adjusted EBITDA represents net income (loss) adjusted
for items such as loss on impairment of property; (gain) loss on
disposal of property; deferred rent receivable write-off; (gain)
loss on extinguishment of debt and transaction-related costs.
Adjusted EBITDA is further adjusted for depreciation, amortization
and ARO accretion expense; income tax expense (benefit) and
interest expense. The reconciliation of Adjusted EBITDA to Net Loss
is included in the additional financial information attached to
this press release.
Consolidated Balance
Sheets
March 31, 2021
December 31, 2020
Assets
(Unaudited)
Property and equipment, net of accumulated
depreciation of $25,260,543 and $22,580,810 (Crimson VIE:
$335,865,029, and $0, respectively)
$
441,213,095
$
106,224,598
Leased property, net of accumulated
depreciation of $227,265 and $6,832,167
1,298,763
64,938,010
Financing notes and related accrued
interest receivable, net of reserve of $600,000 and $600,000
1,183,950
1,209,736
Cash and cash equivalents (Crimson VIE:
$631,776 and $0, respectively)
18,839,994
99,596,907
Accounts and other receivables (Crimson
VIE: $10,828,844 and $0, respectively)
15,275,036
3,675,977
Due from affiliated companies (Crimson
VIE: $827,264 and $0, respectively)
827,264
—
Deferred costs, net of accumulated
amortization of $60,142 and $2,130,334
1,082,205
1,077,883
Inventory (Crimson VIE: $1,690,158 and $0,
respectively)
1,795,688
87,940
Prepaid expenses and other assets (Crimson
VIE: $6,313,679 and $0, respectively)
8,424,488
2,054,804
Operating right-of-use assets (Crimson
VIE: $6,097,344 and $0, respectively)
6,175,414
85,879
Deferred tax asset, net
4,308,976
4,282,576
Goodwill
1,718,868
1,718,868
Total Assets
$
502,143,741
$
284,953,178
Liabilities and Equity
Secured credit facilities, net of debt
issuance costs of $1,732,515 and $0
$
103,267,485
$
—
Unsecured convertible senior notes, net of
discount and debt issuance costs of $2,877,445 and $3,041,870
115,172,555
115,008,130
Asset retirement obligation
—
8,762,579
Accounts payable and other accrued
liabilities (Crimson VIE: $14,225,232 and $0, respectively)
17,910,708
4,628,847
Management fees payable
608,246
971,626
Due to affiliated companies (Crimson VIE:
$1,637,540 and $0, respectively)
2,053,170
—
Operating lease liability (Crimson VIE:
$5,752,045 and $0, respectively)
5,800,866
56,441
Unearned revenue (Crimson VIE $315,000 and
$0, respectively)
6,294,359
6,125,728
Total Liabilities
$
251,107,389
$
135,553,351
Commitments and Contingencies (Note
10)
Equity
Series A Cumulative Redeemable Preferred
Stock 7.375%, $125,270,350 and $125,270,350 liquidation preference
($2,500 per share, $0.001 par value), 10,000,000 authorized; 50,108
and 50,108 issued and outstanding at March 31, 2021 and December
31, 2020, respectively
$
125,270,350
$
125,270,350
Common stock, non-convertible, $0.001 par
value; 13,651,521 and 13,651,521 shares issued and outstanding at
March 31, 2021 and December 31, 2020 (100,000,000 shares
authorized)
13,652
13,652
Additional paid-in capital
336,750,132
339,742,380
Retained deficit
(327,926,126
)
(315,626,555
)
Total CorEnergy Equity
134,108,008
149,399,827
Non-controlling interest (Crimson)
116,928,344
—
Total Equity
251,036,352
149,399,827
Total Liabilities and Equity
$
502,143,741
$
284,953,178
Consolidated Statements of
Operations (Unaudited)
For the Three Months
Ended
March 31, 2021
March 31, 2020
Revenue
Transportation and distribution
revenue
$
21,295,139
$
5,200,500
Pipeline loss allowance subsequent
sales
1,075,722
—
Lease revenue
474,475
15,746,504
Deferred rent receivable write-off
—
(30,105,820
)
Other revenue
195,162
26,307
Total Revenue (Loss)
23,040,498
(9,132,509
)
Expenses
Transportation and distribution
expenses
10,342,597
1,375,229
Pipeline loss allowance subsequent sales
cost of revenue
948,856
—
General and administrative
9,836,793
3,076,143
Depreciation, amortization and ARO
accretion expense
2,898,330
5,647,067
Loss on impairment of leased property
—
140,268,379
Loss on impairment and disposal of leased
property
5,811,779
—
Loss on termination of lease
165,644
—
Total Expenses
30,003,999
150,366,818
Operating Loss
$
(6,963,501
)
$
(159,499,327
)
Other Income (Expense)
Other income
$
63,526
$
317,820
Interest expense
(2,931,007
)
(2,885,583
)
Loss on extinguishment of debt
(861,814
)
—
Total Other Expense
(3,729,295
)
(2,567,763
)
Loss before income taxes
(10,692,796
)
(162,067,090
)
Taxes
Current tax expense (benefit)
27,867
(394,643
)
Deferred tax expense (benefit)
(26,400
)
369,921
Income tax expense (benefit),
net
1,467
(24,722
)
Net loss
(10,694,263
)
(162,042,368
)
Less: Net income attributable to
non-controlling interest
1,605,308
—
Net loss attributable to CorEnergy
Stockholders
$
(12,299,571
)
$
(162,042,368
)
Preferred dividend requirements
2,309,672
2,260,793
Net loss attributable to Common
Stockholders
$
(14,609,243
)
$
(164,303,161
)
Loss Per Common Share:
Basic
$
(1.07
)
$
(12.04
)
Diluted
$
(1.07
)
$
(12.04
)
Weighted Average Shares of Common Stock
Outstanding:
Basic
13,651,521
13,648,293
Diluted
13,651,521
13,648,293
Dividends declared per share
$
0.050
$
0.750
Consolidated Statements of
Cash Flows (Unaudited)
For the Three Months
Ended
March 31, 2021
March 31, 2020
Operating Activities
Net loss
$
(10,694,263
)
$
(162,042,368
)
Adjustments to reconcile net loss to net
cash (used in) provided by operating activities:
Deferred income tax, net
(26,400
)
369,921
Depreciation, amortization and ARO
accretion
3,267,034
5,975,316
Loss on impairment of leased property
—
140,268,379
Loss on impairment and disposal of leased
property
5,811,779
—
Loss on termination of lease
165,644
—
Deferred rent receivable write-off,
noncash
—
30,105,820
Loss on extinguishment of debt
861,814
—
Non-cash lease expense
178,542
—
Loss on sale of equipment
—
3,958
Changes in assets and liabilities:
Deferred rent receivable
—
(247,718
)
Accounts and other receivables
(344,371
)
649,868
Financing note accrued interest
receivable
(6,714
)
—
Inventory
(26,111
)
—
Prepaid expenses and other assets
(249,081
)
(108,007
)
Due (from) to affiliated companies,
net
1,225,906
—
Management fee payable
(363,380
)
3,953
Accounts payable and other accrued
liabilities
(1,611,539
)
(3,030,782
)
Operating lease liability
(523,652
)
—
Unearned revenue
(146,369
)
(180,628
)
Net cash (used in) provided by operating
activities
$
(2,481,161
)
$
11,767,712
Investing Activities
Acquisition of Crimson Midstream Holdings,
net of cash acquired
(68,094,324
)
—
Purchases of property and equipment,
net
(4,625,511
)
(13,031
)
Proceeds from sale of property and
equipment
79,600
—
Proceeds from insurance recovery
60,153
—
Principal payment on financing note
receivable
32,500
32,500
Net cash (used in) provided by investing
activities
$
(72,547,582
)
$
19,469
Financing Activities
Debt financing costs
(2,735,922
)
—
Repurchases of Series A preferred
stock
—
(161,997
)
Dividends paid on Series A preferred
stock
(2,309,672
)
(2,313,780
)
Dividends paid on common stock
(682,576
)
(10,238,640
)
Advances on revolving line of credit
3,000,000
—
Payments on revolving line of credit
(3,000,000
)
—
Principal payments on secured credit
facilities
—
(882,000
)
Net cash used in financing activities
$
(5,728,170
)
$
(13,596,417
)
Net change in Cash and Cash
Equivalents
$
(80,756,913
)
$
(1,809,236
)
Cash and Cash Equivalents at beginning of
period
99,596,907
120,863,643
Cash and Cash Equivalents at end of
period
$
18,839,994
$
119,054,407
Supplemental Disclosure of Cash Flow
Information
Interest paid
$
4,254,050
$
4,334,215
Income taxes paid (net of refunds)
5,026
(467,407
)
Non-Cash Investing Activities
In-kind consideration for the Grand Isle
Gathering System provided as partial consideration for the Crimson
Midstream Holdings acquisition
$
48,873,169
$
—
Crimson Credit Facility assumed and
refinanced in connection with the Crimson Midstream Holdings
acquisition
105,000,000
—
Equity consideration attributable to
non-controlling interest holder in connection with the Crimson
Midstream Holdings acquisition
115,323,036
—
Purchases of property, plant and equipment
in accounts payable and other accrued liabilities
868,190
—
Non-Cash Financing Activities
Change in accounts payable and accrued
expenses related to debt financing costs
$
(235,198
)
$
—
Common stock issued upon exchange and
conversion of convertible notes
—
419,129
Non-GAAP Financial Measurements
(Unaudited)
The following table presents a reconciliation of Net Loss, as
reported in the Consolidated Statements of Operations, to Adjusted
Net Income and CAD (includes the Crimson Transaction from February
1, 2021 to March 31, 2021):
For the Three Months
Ended
March 31, 2021
March 31, 2020
Net loss
$
(10,694,263
)
$
(162,042,368
)
Add:
Loss on impairment of leased property
—
140,268,379
Loss on impairment and disposal of leased
property
5,811,779
—
Loss on termination of lease
165,644
—
Deferred rent receivable write-off
—
30,105,820
Loss on extinguishment of debt
861,814
—
Transaction costs
5,074,796
106,697
Transaction bonus
1,036,492
—
Adjusted Net Income, excluding special
items
$
2,256,262
$
8,438,528
Add:
Depreciation, amortization and ARO
accretion expense
2,898,330
5,647,067
Amortization of debt issuance costs
368,703
328,249
Income tax expense (benefit), net
1,467
(24,722
)
Less:
Transaction costs
5,074,796
106,697
Transaction bonus
1,036,492
—
Maintenance capital expenditures
1,442,203
—
Preferred dividend requirements - Series
A
2,309,672
2,260,793
Mandatory debt amortization
—
882,000
Cash Available for Distribution
(CAD)
$
(4,338,401
)
$
11,139,632
The following table reconciles net cash provided by (used in)
operating activities, as reported in the Consolidated Statements of
Cash Flow, to CAD (includes the Crimson Transaction from February
1, 2021 to March 31, 2021):
For the Three Months
Ended
March 31, 2021
March 31, 2020
Net cash provided by (used in)
operating activities
$
(2,481,161
)
$
11,767,712
Changes in working capital
1,866,768
2,913,314
Loss on sale of equipment
—
(3,958
)
Current tax expense (benefit)
27,867
(394,643
)
Maintenance capital expenditures
(1,442,203
)
—
Preferred dividend requirements
(2,309,672
)
(2,260,793
)
Mandatory debt amortization included in
financing activities
—
(882,000
)
Cash Available for Distribution
(CAD)
$
(4,338,401
)
$
11,139,632
Other Special Items:
Transaction costs
$
5,074,796
$
106,697
Transaction bonus
1,036,492
—
Other Cash Flow Information:
Net cash (used in) provided by investing
activities
$
(72,547,582
)
$
19,469
Net cash used in financing activities
(5,728,170
)
(13,596,417
)
The following table presents a reconciliation of Net Loss, as
reported in the Consolidated Statements of Operations, to Adjusted
EBITDA (includes the Crimson Transaction from February 1, 2021 to
March 31, 2021):
For the Three Months
Ended
March 31, 2021
March 31, 2020
Net loss
$
(10,694,263
)
$
(162,042,368
)
Add:
Loss on impairment of leased property
—
140,268,379
Loss on impairment and disposal of leased
property
5,811,779
—
Loss on termination of lease
165,644
—
Deferred rent receivable write-off
—
30,105,820
Loss on extinguishment of debt
861,814
—
Transaction costs
5,074,796
106,697
Transaction bonus
1,036,492
—
Depreciation, amortization and ARO
accretion expense
2,898,330
5,647,067
Income tax expense (benefit), net
1,467
(24,722
)
Interest expense, net
2,931,007
2,885,583
Adjusted EBITDA
$
8,087,066
$
16,946,456
Source: CorEnergy Infrastructure Trust, Inc.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210510005920/en/
CorEnergy Infrastructure Trust, Inc. Investor Relations Debbie
Hagen or Matt Kreps 877-699-CORR (2677) info@corenergy.reit
CorEnergy Infrastructure (NYSE:CORR)
Historical Stock Chart
From Apr 2024 to May 2024
CorEnergy Infrastructure (NYSE:CORR)
Historical Stock Chart
From May 2023 to May 2024