OKLAHOMA CITY, May 7, 2013 /PRNewswire/ -- Compressco
Partners, L.P. (Compressco Partners or the Partnership) (NASDAQ:
GSJK) today announced first quarter 2013 consolidated results.
Earnings before interest, taxes, depreciation and amortization
(EBITDA) for the first quarter of 2013 were $8.8 million, with net income of $4.5 million. This compares to EBITDA and net
income of $6.3 million and
$2.8 million, respectively, during
the prior year period. Distributable cash flow for the quarter
ended March 31, 2013 was $8.0 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 first quarter 2013 results include:
- compression and other services revenue increased 39% over the
comparable period in 2012 primarily due to strong international
growth;
- EBITDA for the quarter ended March
2013 improved 39% over the first quarter of 2012;
- the number of compressor units in service increased 9.1% over
the comparable 2012 period; and
- customer budget reevaluations in Mexico beginning in March 2013 resulting in decreasing revenue levels
in the region.
Consolidated results reported below are for the three months
ended March 31, 2013.
Consolidated revenues for the quarter ended March 31, 2013 were $30.8
million versus $22.5 million
in the first quarter of 2012. Income before tax for the quarter
ended March 31, 2013 was $5.3 million versus $3.3
million in the first quarter of 2012. Results of operations
for the first quarter of 2013 reflect a year-over-year improvement
of compressor and other service revenues, primarily in
international markets, particularly driven by activity in
Mexico. Compared to the first
quarter of 2012, sales of compressor units and parts decreased
slightly.
The number of compressor units providing services increased 9.1%
as the Partnership utilized an average of 3,174 compressor units to
provide services during the three months ended March 31, 2013, compared to an average of 2,909
compressor units utilized during the three months ended
March 31, 2012. Cost of compression
and other services as a percentage of compression and other
services revenue increased 4.1% during the first quarter of 2013
compared to the first quarter of 2012. Higher compensation-related
expenses include labor cost increases. The Partnership's
administrative expenses increased slightly over the prior year
period as increases in administrative salary and personnel-related
expenses were offset by decreases in bad debt and other
administrative expenses. At March 31,
2013, the Partnership had cash of $9.4 million and an outstanding long-term debt
balance of $14.3 million.
Unaudited financial data for the three month period ended
March 31, 2013 compared to the prior
year's period is available in the accompanying financial
tables.
Ronald J. Foster, President of
Compressco Partners, remarked, "Following a strong 2012,
during the first quarter of 2013 we continued our expansion
throughout the markets we have targeted , including domestic
conventional and unconventional applications, particularly
liquids-rich shale plays, and international markets. We have
focused our capital spending on US fleet growth in liquid and vapor
recovery applications. Overall, we are benefitting from improved US
and Canadian natural gas prices that are driving greater
utilization of our fleet; the average number of compressors in
service is 9.1% higher than the prior year period.
"We are enjoying year-over-year service revenue growth of
$8.3 million, or 39%. The investments
made in Latin America during 2012
generated a positive first quarter contribution to our revenue.
However, we exited the quarter with a lower March revenue run-rate
in Mexico due to budget
re-evaluations by our major customer, and have seen this trend
continue into April. In the meantime, we have taken appropriate
cost reductions to address the lower than anticipated demand in
Mexico."
Compressco Partners will host a conference call to discuss first
quarter 2013 results today, May 7,
2013, at 10:30 am ET. The
phone number for the call is 800/860-2442. The conference will also
be available by live audio webcast and may be accessed through
Compressco Partners' website at www.compressco.com.
On April 19, 2013, Compressco
Partners announced that the board of directors of its general
partner declared an increased cash distribution attributable to the
first quarter of 2013 of $0.425 per
outstanding unit, to be paid on May 15,
2013 to unit holders of record as of the close of business
on May 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," "will," "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.
Financial
Data (unaudited)
|
Three
Months Ended
|
|
March
31, 2013
|
|
March
31, 2012
|
|
(In
Thousands)
|
Revenues
|
|
|
|
|
|
|
|
Compression and other services
|
$
|
29,679
|
|
|
$
|
21,369
|
|
Sales of
compressors and parts
|
|
1,088
|
|
|
|
1,162
|
|
Total
revenues
|
|
30,767
|
|
|
|
22,531
|
|
|
|
|
|
|
|
|
|
Cost of
revenues (excluding depreciation and amortization
expense)
|
|
|
|
|
|
Cost of
compression and other services
|
|
16,769
|
|
|
|
11,191
|
|
Cost of
compressors and parts sales
|
|
617
|
|
|
|
608
|
|
Total cost
of revenues
|
|
17,386
|
|
|
|
11,799
|
|
|
|
|
|
|
|
|
|
Selling,
general and administrative expense
|
|
4,606
|
|
|
|
4,589
|
|
Depreciation and amortization
|
|
3,473
|
|
|
|
3,089
|
|
Interest
(income) expense, net
|
|
58
|
|
|
|
(12)
|
|
Other
(income) expense, net
|
|
(17)
|
|
|
|
(190)
|
|
Income
before tax provision
|
|
5,261
|
|
|
|
3,256
|
|
Provision
for income taxes
|
|
722
|
|
|
|
489
|
|
Net
income
|
$
|
4,539
|
|
|
$
|
2,767
|
|
Reconciliation of Non-GAAP Financial Measures
Compressco Partners includes in this release the non-GAAP
financial measures EBITDA and distributable cash flow. 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.
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 month periods ended March 31,
2013 and March 31, 2012:
|
Three
Months Ended
|
|
March
31, 2013
|
|
March
31, 2012
|
|
(In
Thousands)
|
Net
income
|
$
|
4,539
|
|
|
$
|
2,767
|
|
Provision
for income taxes
|
|
722
|
|
|
|
489
|
|
Depreciation and amortization
|
|
3,473
|
|
|
|
3,089
|
|
Interest
(income) expense, net
|
|
58
|
|
|
|
(12)
|
|
EBITDA
|
$
|
8,792
|
|
|
$
|
6,333
|
|
The following table reconciles net income to distributable cash
flow and distribution coverage ratio for the three month period
ended March 31, 2013:
|
Three
Months Ended
|
|
March
31, 2013
|
|
(In
Thousands)
|
Net
income
|
$
|
4,539
|
Provision
for income taxes
|
|
722
|
Depreciation and amortization
|
|
3,473
|
Interest
(income) expense
|
|
58
|
EBITDA
|
|
8,792
|
Less:
|
|
|
Current
income tax benefit (expense)
|
|
(894)
|
Maintenance capital expenditures
|
|
(165)
|
Interest
expense
|
|
(58)
|
Plus:
|
|
|
Non-cash
cost of compressors sold
|
|
42
|
Equity
compensation
|
|
322
|
Distributable cash flow
|
$
|
8,039
|
|
|
|
Cash
distribution attributable to period
|
$
|
6,739
|
|
|
|
Distribution coverage ratio
|
|
1.19x
|
SOURCE Compressco Partners, L.P.