(CSI Compressco, 30.Apr.2021) — CSI Compressco LP (NASDAQ: CCLP) announced first quarter 2021 results.
First Quarter 2021 Summary:
- Total revenues for the first quarter 2021 were $65.7mn, compared to $71.1mn in the fourth quarter 2020.
- Compression and related services revenue increased sequentially to $54.2mn in the first quarter 2021 compared to $52.6mn in the fourth quarter 2020.
- Net loss was $14.5mn, including $0.4mn in non-recurring charges compared to a net loss of $23mn in the fourth quarter 2020 which included $7.6mn in non-recurring charges.
- Adjusted EBITDA was $21.1mn compared to $26.2mn in the fourth quarter 2020. The first quarter of 2021 Adjusted EBITDA included a $0.5mn benefit from the sale of used equipment compared to a $5.8mn benefit in the fourth quarter 2020.
- Distributable cash flow was $4.3mn compared to $7.7mn in the fourth quarter 2020.
- Distribution coverage ratio was 8.9x in the first quarter 2021 compared to 15.9x in the fourth quarter 2020.
- First quarter of 2021 distribution of $0.01 per common unit will be paid on 14 May 2021.
First Quarter 2021
“In the first quarter of 2021, we saw business activity stabilize at similar levels to the fourth quarter of 2020. Revenues, EBITDA and utilization were relatively flat after adjusting for the assets sales from the fourth quarter, which is traditionally a very lumpy business. More importantly, we saw the trends throughout the quarter improve, both in actual results and in forward looking quotes and activity. While we cannot predict with certainty the rest of the year’s performance, the trends give us optimism around our original thesis that 2021 will improve as the year progresses. Our customers appear more confident in their projected activity for the rest of the year and now appear to be executing around those plans. The overall impact of this customer activity, if it continues, is that in the second half of 2021 both the contract compression business and the aftermarket services business should begin to see improving utilization and margins that improve through the rest of the year” commented John Jackson, Chief Executive Officer of CSI Compressco.
“We remain excited about the future of the Partnership and the industry overall. While the improving market trends exist, we recognize that risks around results may persist during 2021, but we are optimistic about both the near-term activity levels and long-term future of the compression industry. Capital discipline, cost management and customer service are areas we continue to aggressively pursue as these are areas we can control. We expect to deliver the highest levels of service and performance to our customers as we have the people and assets in place that allow us to execute efficiently in any environment. We believe the natural gas business has a bright future and is a critical component of the energy infrastructure both today and in the transition in the energy markets in the years ahead.”
Positive net cash provided by operating activities was $9.6mn in the first quarter, compared to $7mn in the fourth quarter. Distributable cash flow in the first quarter was $4.3mn, resulting in a distribution coverage ratio of 8.9x.
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, 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 31 March 2021 compared to the prior quarter and the corresponding prior year quarter are presented in the table below.
As of 31 March 2021, total compressor fleet horsepower was 1,182,090 and fleet horsepower in service was 900,328 for an overall fleet utilization rate of 76.2% (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.
Cash on hand at the end of the first quarter was $20.9mn. No amounts were drawn nor outstanding on the Partnership’s asset-based loan at the end of the first quarter. Our debt consists of $80.7mn of unsecured bonds due in August 2022, $400mn of first lien secured bonds due in 2025 and $157.2mn of second lien secured bonds due in 2026. Net loss for the twelve months ended 31 March 2021 was $74.7mn. Net leverage ratio at the end of the quarter was 6.1x.
Capital Expenditures – 2021 Expectations
We expect capital expenditures for 2021 to be between $30mn and $40mn. The forecast includes between $8mn and $12mn for new fleet additions. Maintenance capital expenditures are expected to be between $20mn and $24mn. Investments in the Helix digitally enhanced compression system and other technologies are expected to be between $2mn and $4mn.
First Quarter 2021 Cash Distribution on Common Units
On 19 April 2021, the board of directors of our General Partner declared a cash distribution attributable to the quarter ended 31 March 2021 of $0.01 per outstanding common unit. This distribution equates to a distribution of $0.04 per outstanding common unit, on an annualized basis. This distribution will be paid on 14 May 2021 to each of the holders of common units of record as of the close of business on 30 April 2021. The distribution coverage ratio for the first quarter of 2021 was 8.9x.