Cypress Energy Partners, L.P. Announces Fourth Quarter 2018 Results TULSA, Okla.
Cypress Energy Partners, L.P. (NYSE:CELP)
today reported:
-
Revenues of $88.9 million for the fourth quarter, an increase of 28%
from the fourth quarter of 2017;
-
Gross margin of $12.1 million for the fourth quarter, an increase of
30% from the fourth quarter of 2017;
-
Full-year 2018 net income attributable to limited partners increased
253%;
-
Common unit coverage ratio of 1.22x; and
-
Cash distribution of $0.21 per unit, consistent with the last seven
quarters.
Peter C. Boylan III, Cypress Energy Partners, L.P.’s (“CELP”, “Cypress”,
or the “Partnership”) Chairman and Chief Executive Officer, stated, “I
am both proud of our team and very pleased with our operating results
during the fourth quarter, which historically is seasonally slower as a
result of the holidays and weather conditions. All three of our business
segments, Pipeline Inspection, Pipeline and Process Services, and Water
Services generated increased revenues in the fourth quarter of 2018
relative to the fourth quarter of 2017 with strong gross margins, which
reflect not only the diversity and strength of our customers, but also
the need for the services we offer. Our 2018 performance was very strong
across the board and we successfully deleveraged the company, reducing
our net debt by 46% with additional equity that materially strengthened
our balance sheet.
“Revenues of our Pipeline Inspection segment increased from $63.6
million in the fourth quarter of 2017 to $82.2 million in the fourth
quarter of 2018, an increase of 29%. Gross margins in this segment
increased from $7.0 million in the fourth quarter of 2017 to $9.0
million in the fourth quarter of 2018, an increase of 28%. The gross
margin percentage for this segment was 11.0% in both the fourth quarter
of 2017 and the fourth quarter of 2018. We continue to make progress on
our goal of diversifying our revenues into higher-margin inspection and
integrity services. We finished 2018 with strong headcount (our weekly
headcount averaged 1,375 inspectors in the fourth quarter of 2018,
compared to 1,101 inspectors during the fourth quarter of 2017). During
the fourth quarter of 2018, we began work on the largest contract award
in our history, a pipeline project that we announced last quarter that
will continue throughout 2019.
“Revenues of our Pipeline & Process Services segment increased from $3.3
million in the fourth quarter of 2017 to $3.7 million in the fourth
quarter of 2018, an increase of 11%. The increase was due in part to
increasing demand, and in part to improved business development efforts.
Gross margins in this segment were $1.0 million in the fourth quarter of
2017 and $0.8 million in the fourth quarter of 2018. We began 2019 with
a solid project backlog and have recently experienced robust bidding
activity on new projects.
“Revenues in our Water Services Segment increased from $2.4 million
during the fourth quarter of 2017 to $3.0 million during the fourth
quarter of 2018, an increase of 24%, partially driven by the completion
of some new pipelines attached to our facilities early in the year.
Demand for this segment increased in 2018 as customer activity increased
in the Bakken shale region due to higher commodity prices. Gross margins
in this segment increased from $1.3 million in the fourth quarter of
2017 to $2.2 million in the fourth quarter of 2018, an increase of 77%.
These increases occurred despite the fact that we sold our two saltwater
disposal facilities in Texas during January 2018 and May 2018,
respectively, on attractive terms, effectively exiting our saltwater
disposal presence in the Permian Basin.
“Our sponsor, Cypress Energy Holdings, LLC (CEH), completed two
acquisitions in the third quarter of 2018 with the intention of offering
these businesses to the Partnership, when appropriate, that we believe
will allow us to expand the breadth and depth of the pipeline integrity
services we offer our clients. Both transactions were asset purchases
that will require some repositioning before bringing them into the
Partnership. Our sponsor has made solid progress on both acquisitions
related to this goal in the fourth quarter, and intends to offer them to
the Partnership once it has accomplished certain developmental goals,
most likely in early 2020 (if not sooner). These acquisitions would move
us into several new lines of work, including water treatment, in-line
inspection (“ILI”) with next-generation high resolution technology for
energy companies, equipment rental (which could be converted into a
service business before offering this line of business to the
Partnership), and other pipeline process services including nitrogen and
dehydration. CEH’s new Lafayette facility also allows us to expand into
the offshore market and positions us to better serve the Southeastern
part of the country. CEH’s ILI technology is also the first high
definition tool capable of serving the municipal water industry’s aging
mortar-lined steel pipelines used to transport drinking water that are
in need of substantial maintenance, repair, and replacement. The
potential acquisition by the Partnership of these businesses should also
position us to eventually resume increasing our distributions.
“In all of our business segments, we continue to invest in talent,
technologies, and capabilities that we believe will drive growth, expand
the number of customers we serve, increase margins, and deliver
attractive returns on capital. Despite a material decline in crude oil
prices in the fourth quarter of 2018, the outlook for global supply and
demand dynamics remains solid. We remain confident that Cypress has a
winning strategy and provides essential services required by our
customers to deliver attractive, long-term growth. We have a solid
balance sheet and, with these two new potential acquisitions, some
attractive future strategic opportunities to enhance our growth. We
remain a leader in North America in the inspection and integrity
industry and continue to grow the breadth and depth of our service
offerings. We believe this industry is poised for attractive long-term
growth, given the aging energy infrastructure in North America, as well
as new construction that requires our essential midstream services. I am
also excited to serve the large municipal water industry with our
inspection services. The future of our Partnership will continue to be
focused on pipeline inspection and integrity services that are mandated
by various Federal and State laws. Today these services represent over
95% of our revenue. Management and insiders continue to be fully aligned
with our minority unit holders, given their 64% common unit ownership of
the Partnership, which is rare in our industry.”
Fourth Quarter:
-
Revenue of $88.9 million for the three months ended December 31, 2018,
compared with $69.4 million for the three months ended December 31,
2017, representing a 28% increase.
-
Gross margin of $12.1 million for the three months ended December 31,
2018, compared to $9.3 million for the three months ended December 31,
2017, representing a 30% increase. The gross margin percentage was
13.6% for the three months ended December 31, 2018, compared to 13.4%
for the three months ended December 31, 2017.
-
Net income of $2.6 million for the three months ended December 31,
2018, compared to $1.9 million for the three months ended December 31,
2017, an increase of 36%.
-
Net income attributable to limited partners of $2.6 million for the
three months ended December 31, 2018 ($1.0 million attributable to our
preferred unitholder), compared to $3.1 million for the three months
ended December 31, 2017. During the three months ended December 31,
2017, net income attributable to limited partners benefitted from $1.3
million of sponsor support.
-
Adjusted EBITDA of $6.3 million for the three months ended December
31, 2018 (including noncontrolling interests), compared to $4.5
million for the three months ended December 31, 2017 (including
noncontrolling interests), an increase of 40%.
-
Adjusted EBITDA attributable to limited partners of $6.2 million for
the three months ended December 31, 2018, compared to $5.5 million for
the three months ended December 31, 2017, representing an increase of
13%. During the three months ended December 31, 2017, Adjusted EBITDA
attributable to limited partners benefitted from $1.3 million of
sponsor support.
-
Distributable Cash Flow of $3.1 million for the three months ended
December 31, 2018, compared to $3.2 million for the three months ended
December 30, 2017. During the three months ended December 31, 2017,
Distributable Cash Flow benefitted from $1.3 million of sponsor
support.
-
A common unit distribution coverage ratio of 1.22x in the fourth
quarter of 2018, compared to a coverage ratio of 1.28x in the fourth
quarter of 2017 that benefitted from the sponsor support.
-
Net debt (calculated as long-term debt less cash and cash equivalents)
was $60.2 million at December 31, 2018, or 2.6x trailing twelve-month
Adjusted EBITDA. The net debt of $60.2 million at December 31, 2018
decreased 46% from net debt of $111.9 million at December 31, 2017.
-
Pursuant to the credit facility covenants, the leverage ratio
(calculated as the gross debt balance divided by trailing twelve-month
EBITDA) was 3.3x, compared to a 4.0x covenant maximum. The interest
coverage ratio was 5.1x, compared to a 3.0x covenant minimum at
December 31, 2018.
Full Year:
-
Revenue of $315.0 million for the year ended December 31, 2018,
compared to $286.3 million for the year ended December 31, 2017,
representing a 10% increase. This increase was due to increased
customer activity in each of our business segments, despite the sale
during 2018 of our two saltwater disposal facilities in Texas and a
significant reduction in our Canadian operations. Revenues of the U.S.
operations of the Pipeline Inspection Segment increased by 17% in 2018
compared to 2017. Revenues of the North Dakota operations of the Water
Services Segment increased by 72% in 2018 compared to 2017, driven in
part by the two new pipelines.
-
Gross margin of $44.0 million for the year ended December 31, 2018,
compared to $33.6 million for the year ended December 31, 2017,
representing a 31% increase. The gross margin percentage was 14.0% for
the year ended December 31, 2018, compared to 11.7% for the year ended
December 31, 2017, representing an increase of 20%.
-
Net income of $12.1 million for the year ended December 31, 2018,
compared to net loss of $1.9 million for 2017. Net income for the
years ended December 31, 2018 and 2017 included net gains on asset
disposals of $4.1 million and $0.6 million, respectively.
-
Net income attributable to limited partners of $11.4 million for the
year ended December 31, 2018 ($2.4 million attributable to our
preferred unitholder), compared to $3.2 million in 2017. During 2017,
net income attributable to limited partners benefitted from $4.1
million of sponsor support.
-
Adjusted EBITDA of $23.1 million for the year ended December 31, 2018
(including noncontrolling interests), compared to $16.6 million in
2017, an increase of 39%. During 2017, Adjusted EBITDA benefitted from
$1.8 million of sponsor support. Excluding sponsor support in the
prior year, Adjusted EBITDA increased 55%.
-
Adjusted EBITDA attributable to limited partners of $21.9 million for
the year ended December 31, 2018, compared to $18.7 million in 2017,
an increase of 17%. During 2017, Adjusted EBITDA attributable to
limited partners benefitted from $4.1 million of sponsor support.
Excluding sponsor support in the prior year, Adjusted EBITDA
attributable to limited partners increased 49%.
-
Distributable Cash Flow of $12.9 million for the year ended December
31, 2018 (which was reduced by $1.4 million of distributions to our
preferred unitholder), compared to $10.0 million in 2017, an increase
of 28%. During 2017, Adjusted Distributable Cash Flow benefitted from
$4.1 million of sponsor support. Excluding sponsor support in the
prior year, Distributable Cash Flow increased 115%.
Highlights include:
-
A more attractive mix of businesses generating higher margins, EBITDA,
and distributable cash flow on less working capital, as previously
outlined by executive management.
-
The Pipeline Inspection segment averaged 1,375 inspectors per week for
the fourth quarter of 2018, an increase compared to 1,101 in the
fourth quarter of 2017 and 1,263 in the third quarter of 2018. The
focus on maintenance and integrity work and non-destructive
examination (“NDE”) continues to benefit gross margins in comparison
with basic inspection services.
-
The Water Services segment disposed 3.9 million barrels of saltwater
at an average revenue per barrel of $0.78 for the fourth quarter of
2018, compared with disposal of 3.7 million barrels of saltwater at an
average revenue per barrel of $0.65 for the fourth quarter of 2017.
This increase occurred despite the sale in 2018 of our two saltwater
disposal facilities in the Permian Basin. The increase in our North
Dakota facility volumes in 2018 was 48%.
-
Maintenance capital expenditures for the year ended December 31, 2018
were $0.7 million, compared to $0.5 million in 2017.
-
Expansion capital expenditures during the year ended December 31, 2018
totaled $5.1 million and were primarily related to the new pipeline
system at one of our facilities in North Dakota, as well as the
rebuilding of two saltwater disposal facilities that were struck by
lightning in 2017 (one of which was subsequently sold), and equipment
purchases in the Pipeline Inspection segment to support its growth.
The Partnership received insurance recoveries to fund the
reconstruction of the two saltwater disposal facilities struck by
lightning.
Looking forward:
-
Cypress continues to successfully grow its business organically,
pursuing new projects, new customers, and renewing existing contracts.
Cypress has solid growth prospects in the foreseeable future. During
the third quarter of 2018, Tulsa Inspection Resources, the Pipeline
Inspection Services segment, secured the largest contract in its
15-year history.
-
Our Pipeline & Process Services segment’s fourth-quarter results
improved substantially over the prior year with an increase in average
revenue per field personnel. This segment continues to see improvement
as the energy industry recovers from the two-year economic downturn
and as the Partnership continues to strengthen its senior management
team.
-
During the fourth quarter, 94% of total water volumes came from
produced water, and the ten pipeline connections moving produced water
for the life of the oil wells represented approximately 47% of total
water volumes. Cypress continues to enjoy significant operating
leverage with its cost structure and minimal maintenance capital
expenditure requirements as volumes increase. Once the fixed costs are
covered, the variable costs associated with each incremental barrel of
water are typically only $0.05 - $0.10 per barrel for electricity,
chemicals, maintenance, and in some cases, royalties.
-
Cypress’s saltwater disposal facilities have substantial unused
capacity to support growth with current utilization of approximately
42%. The operating leverage is very substantial as seen in the
financial results, given the fixed and variable cost model in this
segment. Additionally, unlike many competitors, Cypress owns the land
for many of its saltwater disposal facilities, resulting in no royalty
expenses on those facilities.
-
The interest on Cypress’s credit agreement is based on a floating
rate, and LIBOR rates have continued to rise over the last quarter by
27 basis points, and 99 basis points compared to this time last year.
The reduction in outstanding debt upon amending the credit facility in
May 2018 has reduced interest expense.
-
Distributions on preferred equity will be approximately $4.1 million
per year. The first quarterly distribution on the preferred equity was
paid in November 2018 and the second in February 2019.
Cypress will file its annual report on Form 10-K for the year ended
December 31, 2018, with the Securities and Exchange Commission later
today. Cypress will also post a copy of the Form 10-K on its website at www.cypressenergy.com.
Unitholders may receive a printed copy of the Annual Report on Form 10-K
free of charge by contacting Investor Relations at Cypress Energy
Partners, L.P., 5727 South Lewis Avenue, Suite 300, Tulsa, Oklahoma
74105, or emailing ir@cypressenergy.com.
Cypress will host the Cypress Energy Partners Fourth Quarter Earnings
Conference Call on Monday, March 18, 2019, at 10:00 am EDT (9:00 am CDT)
to discuss its fourth quarter 2018 financial results. Analysts,
investors, and other interested parties may access the conference call
by dialing Toll-Free (US & Canada): (888) 567-1602, or International
Dial-In (Toll): +1 (862) 298-0701. An archived audio replay of the call
will be available on the Investor section of our website at www.cypressenergy.com
no later than 10:00 am EDT (9:00 am CDT) on March 20, 2019.
Non-GAAP Measures:
Cypress defines Adjusted EBITDA as net income (loss), plus interest
expense, depreciation, amortization and accretion expenses, income tax
expenses, impairments, non-cash allocated expenses, and equity-based
compensation, less certain other unusual or non-recurring items. Cypress
defines Adjusted EBITDA attributable to limited partners as net income
(loss) attributable to limited partners, plus interest expense
attributable to limited partners, depreciation, amortization and
accretion attributable to limited partners, impairments attributable to
limited partners, income tax expense attributable to limited partners,
and equity-based compensation attributable to limited partners, less
certain other unusual or non-recurring items attributable to limited
partners. Cypress defines Distributable Cash Flow as Adjusted EBITDA
attributable to limited partners less cash interest paid, cash income
taxes paid, maintenance capital expenditures, and cash distributions on
preferred equity. These are supplemental, non-GAAP financial measures
used by management and by external users of our financial statements,
such as investors and commercial banks, to assess our operating
performance as compared to those of other companies in the midstream
sector, without regard to financing methods, historical cost basis or
capital structure; the ability of our assets to generate sufficient cash
flow to make distributions to our unitholders; our ability to incur and
service debt and fund capital expenditures; the viability of
acquisitions and other capital expenditure projects; and the returns on
investment of various investment opportunities. The GAAP measures most
directly comparable to Adjusted EBITDA, Adjusted EBITDA attributable to
limited partners, and Distributable Cash Flow are net income (loss) and
cash flow from operating activities, respectively. These non-GAAP
measures should not be considered as alternatives to the most directly
comparable GAAP financial measure. Each of these non-GAAP financial
measures exclude some, but not all, items that affect the most directly
comparable GAAP financial measure. Adjusted EBITDA, Adjusted EBITDA
attributable to limited partners and Distributable Cash Flow should not
be considered an alternative to net income, income before income taxes,
net income attributable to limited partners, cash flows from operating
activities, or any other measure of financial performance calculated in
accordance with GAAP as those items are used to measure operating
performance, liquidity, or the ability to service debt obligations.
Cypress believes that the presentation of Adjusted EBITDA, Adjusted
EBITDA attributable to limited partners and Distributable Cash Flow will
provide useful information to investors in assessing our financial
condition and results of operations. Cypress uses Adjusted EBITDA,
Adjusted EBITDA attributable to limited partners and Distributable Cash
Flow as a supplemental financial measure to both manage our business and
assess the cash flows generated by our assets (prior to the
establishment of any retained cash reserves by the general partner) to
fund the cash distributions we expect to pay to unitholders, to evaluate
our success in providing a cash return on investment, and whether or not
the Partnership is generating cash flow at a level that can sustain or
support an increase in its quarterly distribution rates and to determine
the yield of our units, which is a quantitative standard used throughout
the investment community with respect to publicly-traded partnerships,
as the value of a unit is generally determined by a unit’s yield (which
in turn is based on the amount of cash distributions the entity pays to
a unitholder). Because Adjusted EBITDA, Adjusted EBITDA attributable to
limited partners and Distributable Cash Flow may be defined differently
by other companies in our industry, our definitions of Adjusted EBITDA,
Adjusted EBITDA attributable to limited partners and Distributable Cash
Flow may not be comparable to similarly titled measures of other
companies, thereby diminishing their utility. Reconciliations of (i) Net
Income (Loss) to Adjusted EBITDA and Distributable Cash Flow, (ii) Net
Income attributable to limited partners to Adjusted EBITDA attributable
to limited partners and Distributable Cash Flow and (iii) Net Cash
Provided by Operating Activities to Adjusted EBITDA and Distributable
Cash Flow are provided below.
This press release includes “forward-looking statements.” All
statements, other than statements of historical facts included or
incorporated herein, may constitute forward-looking statements. Actual
results could vary significantly from those expressed or implied in such
statements and are subject to a number of risks and uncertainties. While
Cypress believes its expectations, as reflected in the forward-looking
statements, are reasonable, Cypress can give no assurance that such
expectations will prove to be correct. The forward-looking statements
involve risks and uncertainties that affect operations, financial
performance, and other factors as discussed in filings with the
Securities and Exchange Commission. Other factors that could impact any
forward-looking statements are those risks described in Cypress’s Annual
Report filed on Form 10-K and other public filings. You are urged to
carefully review and consider the cautionary statements and other
disclosures made in those filings, specifically those under the heading
“Risk Factors.” Cypress undertakes no obligation to publicly update or
revise any forward-looking statements except as required by law.
About Cypress Energy Partners, L.P.
Cypress Energy Partners, L.P. is a master limited partnership that
provides essential midstream services, including pipeline inspection,
integrity, and hydrostatic testing services to various energy companies
and their vendors throughout the U.S. and Canada. Cypress also provides
saltwater disposal and environmental services to upstream energy
companies and their vendors in North Dakota in the Bakken region of the
Williston Basin. In all of these business segments, Cypress works
closely with its customers to help them comply with increasingly complex
and strict environmental and safety rules and regulations and to reduce
their operating costs. Cypress is headquartered in Tulsa, Oklahoma.
|
CYPRESS ENERGY PARTNERS, L.P.
|
Consolidated Balance Sheets
|
As of December 31, 2018 and 2017
|
(in thousands, except unit data)
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
2018
|
|
|
|
|
2017
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
15,380
|
|
|
|
$
|
24,508
|
|
Trade accounts receivable, net
|
|
|
48,789
|
|
|
|
|
41,693
|
|
Prepaid expenses and other
|
|
|
1,396
|
|
|
|
|
2,294
|
|
Assets held for sale
|
|
|
-
|
|
|
|
|
2,172
|
|
Total current assets
|
|
|
65,565
|
|
|
|
|
70,667
|
|
Property and equipment:
|
|
|
|
|
|
Property and equipment, at cost
|
|
|
23,988
|
|
|
|
|
22,700
|
|
Less: Accumulated depreciation
|
|
|
11,266
|
|
|
|
|
9,312
|
|
Total property and equipment, net
|
|
|
12,722
|
|
|
|
|
13,388
|
|
Intangible assets, net
|
|
|
22,759
|
|
|
|
|
25,477
|
|
Goodwill
|
|
|
50,294
|
|
|
|
|
53,435
|
|
Debt issuance costs, net
|
|
|
1,260
|
|
|
|
|
-
|
|
Other assets
|
|
|
253
|
|
|
|
|
236
|
|
Total assets
|
|
$
|
152,853
|
|
|
|
$
|
163,203
|
|
|
|
|
|
|
|
LIABILITIES AND OWNERS' EQUITY
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable
|
|
$
|
4,848
|
|
|
|
$
|
3,757
|
|
Accounts payable - affiliates
|
|
|
4,060
|
|
|
|
|
3,173
|
|
Accrued payroll and other
|
|
|
12,366
|
|
|
|
|
9,109
|
|
Liabilities held for sale
|
|
|
-
|
|
|
|
|
97
|
|
Income taxes payable
|
|
|
737
|
|
|
|
|
646
|
|
Current portion of long-term debt
|
|
|
-
|
|
|
|
|
136,293
|
|
Total current liabilities
|
|
|
22,011
|
|
|
|
|
153,075
|
|
Long-term debt
|
|
|
76,129
|
|
|
|
|
-
|
|
Other non-current liabilities
|
|
|
426
|
|
|
|
|
143
|
|
Total liabilities
|
|
|
98,566
|
|
|
|
|
153,218
|
|
|
|
|
|
|
|
Owners' equity:
|
|
|
|
|
|
Partners’ capital:
|
|
|
|
|
|
Common units (11,946,901 and 11,889,958 units outstanding at
December 31, 2018 and 2017, respectively)
|
|
|
34,677
|
|
|
|
|
34,614
|
|
Preferred units (5,769,231 units outstanding at December 31, 2018)
|
|
|
44,291
|
|
|
|
|
-
|
|
General partner
|
|
|
(25,876
|
)
|
|
|
|
(25,876
|
)
|
Accumulated other comprehensive loss
|
|
|
(2,414
|
)
|
|
|
|
(2,677
|
)
|
Total partners' capital
|
|
|
50,678
|
|
|
|
|
6,061
|
|
Non-controlling interests
|
|
|
3,609
|
|
|
|
|
3,924
|
|
Total owners' equity
|
|
|
54,287
|
|
|
|
|
9,985
|
|
Total liabilities and owners' equity
|
|
$
|
152,853
|
|
|
|
$
|
163,203
|
|
|
|
|
|
|
|
|
CYPRESS ENERGY PARTNERS, L.P.
|
Consolidated Statements of Operations
|
For the Three Months and Years Ended December 31, 2018 and 2017
|
(in thousands, except per unit data)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
Year Ended December 31,
|
|
|
|
2018
|
|
|
|
2017
|
|
|
|
|
2018
|
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
88,888
|
|
|
$
|
69,371
|
|
|
|
$
|
314,960
|
|
|
$
|
286,342
|
|
Costs of services
|
|
|
76,822
|
|
|
|
60,096
|
|
|
|
|
270,914
|
|
|
|
252,739
|
|
Gross margin
|
|
|
12,066
|
|
|
|
9,275
|
|
|
|
|
44,046
|
|
|
|
33,603
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expense:
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
|
6,403
|
|
|
|
5,042
|
|
|
|
|
23,744
|
|
|
|
21,055
|
|
Depreciation, amortization and accretion
|
|
|
1,036
|
|
|
|
882
|
|
|
|
|
4,404
|
|
|
|
4,443
|
|
Impairments
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
3,598
|
|
(Gain) loss on asset disposals, net
|
|
|
29
|
|
|
|
(665
|
)
|
|
|
|
(4,108
|
)
|
|
|
(570
|
)
|
Operating income
|
|
|
4,598
|
|
|
|
4,016
|
|
|
|
|
20,006
|
|
|
|
5,077
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense):
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
(1,299
|
)
|
|
|
(1,924
|
)
|
|
|
|
(6,206
|
)
|
|
|
(7,335
|
)
|
Debt issuance cost write-off
|
|
|
-
|
|
|
|
-
|
|
|
|
|
(114
|
)
|
|
|
-
|
|
Foreign currency gains (losses)
|
|
|
(289
|
)
|
|
|
(92
|
)
|
|
|
|
(643
|
)
|
|
|
732
|
|
Other, net
|
|
|
71
|
|
|
|
77
|
|
|
|
|
373
|
|
|
|
199
|
|
Net income (loss) before income tax expense
|
|
|
3,081
|
|
|
|
2,077
|
|
|
|
|
13,416
|
|
|
|
(1,327
|
)
|
Income tax expense
|
|
|
453
|
|
|
|
138
|
|
|
|
|
1,318
|
|
|
|
596
|
|
Net income (loss)
|
|
|
2,628
|
|
|
|
1,939
|
|
|
|
|
12,098
|
|
|
|
(1,923
|
)
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to non-controlling interests
|
|
|
12
|
|
|
|
180
|
|
|
|
|
685
|
|
|
|
(1,110
|
)
|
Net income (loss) attributable to partners / controlling interests
|
|
|
2,616
|
|
|
|
1,759
|
|
|
|
|
11,413
|
|
|
|
(813
|
)
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to general partner
|
|
|
-
|
|
|
|
(1,300
|
)
|
|
|
|
-
|
|
|
|
(4,050
|
)
|
Net income attributable to limited partners
|
|
|
2,616
|
|
|
|
3,059
|
|
|
|
|
11,413
|
|
|
|
3,237
|
|
Net income attributable to preferred unitholder
|
|
|
1,033
|
|
|
|
-
|
|
|
|
|
2,445
|
|
|
|
-
|
|
Net income attributable to common unitholders
|
|
$
|
1,583
|
|
|
$
|
3,059
|
|
|
|
$
|
8,968
|
|
|
$
|
3,237
|
|
|
|
|
|
|
|
|
|
|
|
Net income per common limited partner unit:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.13
|
|
|
$
|
0.26
|
|
|
|
$
|
0.75
|
|
|
$
|
0.29
|
|
Diluted
|
|
$
|
0.13
|
|
|
$
|
0.25
|
|
|
|
$
|
0.72
|
|
|
$
|
0.29
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common units outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
11,946
|
|
|
|
11,890
|
|
|
|
|
11,929
|
|
|
|
11,152
|
|
Diluted
|
|
|
18,123
|
|
|
|
12,007
|
|
|
|
|
15,757
|
|
|
|
11,253
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average subordinated units outstanding - basic and diluted
|
|
|
-
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
729
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income (Loss) to Adjusted EBITDA
|
and to Distributable Cash Flow
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
Years ended December 31,
|
|
|
2018
|
|
|
2017
|
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
2,628
|
|
$
|
1,939
|
|
|
|
$
|
12,098
|
|
$
|
(1,923
|
)
|
Add:
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
1,299
|
|
|
1,924
|
|
|
|
|
6,206
|
|
|
7,335
|
|
Debt issuance cost write-off
|
|
|
-
|
|
|
-
|
|
|
|
|
114
|
|
|
-
|
|
Depreciation, amortization and accretion
|
|
|
1,294
|
|
|
1,167
|
|
|
|
|
5,480
|
|
|
5,545
|
|
Impairments
|
|
|
-
|
|
|
-
|
|
|
|
|
-
|
|
|
3,598
|
|
Income tax expense
|
|
|
453
|
|
|
138
|
|
|
|
|
1,318
|
|
|
596
|
|
Non-cash allocated expenses
|
|
|
-
|
|
|
-
|
|
|
|
|
-
|
|
|
1,750
|
|
Equity based compensation
|
|
|
339
|
|
|
(78
|
)
|
|
|
|
1,247
|
|
|
1,059
|
|
Losses on asset disposals, net
|
|
|
35
|
|
|
-
|
|
|
|
|
-
|
|
|
-
|
|
Foreign currency losses
|
|
|
289
|
|
|
92
|
|
|
|
|
643
|
|
|
-
|
|
Less:
|
|
|
|
|
|
|
|
|
|
Gains on asset disposals, net
|
|
|
-
|
|
|
665
|
|
|
|
|
4,004
|
|
|
588
|
|
Foreign currency gains
|
|
|
-
|
|
|
-
|
|
|
|
|
-
|
|
|
732
|
|
Adjusted EBITDA
|
|
$
|
6,337
|
|
$
|
4,517
|
|
|
|
$
|
23,102
|
|
$
|
16,640
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA attributable to general partner
|
|
|
-
|
|
|
(1,300
|
)
|
|
|
|
-
|
|
|
(2,300
|
)
|
Adjusted EBITDA attributable to noncontrolling interests
|
|
|
143
|
|
|
321
|
|
|
|
|
1,219
|
|
|
248
|
|
Adjusted EBITDA attributable to limited partners / controlling
interests
|
|
$
|
6,194
|
|
$
|
5,496
|
|
|
|
$
|
21,883
|
|
$
|
18,692
|
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
Preferred unit distributions
|
|
|
1,412
|
|
|
-
|
|
|
|
|
1,412
|
|
|
-
|
|
Cash interest paid, cash taxes paid, maintenance capital expenditures
|
|
|
1,714
|
|
|
2,294
|
|
|
|
|
7,611
|
|
|
8,674
|
|
Distributable cash flow
|
|
$
|
3,068
|
|
$
|
3,202
|
|
|
|
$
|
12,860
|
|
$
|
10,018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income Attributable to
|
Limited Partners to Adjusted EBITDA Attributable
|
to Limited Partners and Distributable Cash Flow
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
Years ended December 31,
|
|
|
2018
|
|
|
2017
|
|
|
|
2018
|
|
|
2017
|
|
|
|
|
(in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to limited partners
|
|
$
|
2,616
|
|
$
|
3,059
|
|
|
|
$
|
11,413
|
|
$
|
3,237
|
Add:
|
|
|
|
|
|
|
|
|
|
Interest expense attributable to limited partners
|
|
|
1,299
|
|
|
1,924
|
|
|
|
|
6,206
|
|
|
7,335
|
Debt issuance cost write-off attributable to limited partners
|
|
|
-
|
|
|
-
|
|
|
|
|
114
|
|
|
-
|
Depreciation, amortization and accretion attributable to limited
partners
|
|
|
1,170
|
|
|
1,026
|
|
|
|
|
4,974
|
|
|
4,978
|
Impairments attributable to limited partners
|
|
|
-
|
|
|
-
|
|
|
|
|
-
|
|
|
2,823
|
Income tax expense attributable to limited partners
|
|
|
446
|
|
|
138
|
|
|
|
|
1,290
|
|
|
580
|
Equity based compensation attributable to limited partners
|
|
|
339
|
|
|
(78
|
)
|
|
|
|
1,247
|
|
|
1,059
|
Loss on asset disposals attributable to limited partners
|
|
|
35
|
|
|
-
|
|
|
|
|
-
|
|
|
-
|
Foreign currency losses attributable to limited partners
|
|
|
289
|
|
|
92
|
|
|
|
|
643
|
|
|
-
|
Less:
|
|
|
|
|
|
|
|
|
|
Gain on asset disposals attributable to limited partners, net
|
|
|
-
|
|
|
665
|
|
|
|
|
4,004
|
|
|
588
|
Foreign currency gains attributable to limited partners
|
|
|
-
|
|
|
-
|
|
|
|
|
-
|
|
|
732
|
Adjusted EBITDA attributable to limited partners
|
|
|
6,194
|
|
|
5,496
|
|
|
|
|
21,883
|
|
|
18,692
|
|
|
|
|
|
|
|
|
|
|
Less:
|
|
|
|
|
|
|
|
|
|
Preferred unit distributions
|
|
|
1,412
|
|
|
-
|
|
|
|
|
1,412
|
|
|
-
|
Cash interest paid, cash taxed paid and maintenance capital
expenditures attributable to limited partners
|
|
|
1,714
|
|
|
2,294
|
|
|
|
|
7,611
|
|
|
8,674
|
Distributable cash flow
|
|
$
|
3,068
|
|
$
|
3,202
|
|
|
|
$
|
12,860
|
|
$
|
10,018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Cash Provided by Operating Activities to
Adjusted EBITDA
|
and to Distributable Cash Flow
|
|
|
|
|
|
|
Years ended December 31,
|
|
|
|
2018
|
|
|
|
2017
|
|
|
|
(in thousands)
|
|
|
|
|
|
Cash flows provided by operating activities
|
|
$
|
15,409
|
|
|
$
|
8,253
|
|
Changes in trade accounts receivable, net
|
|
|
7,165
|
|
|
|
3,406
|
|
Changes in prepaid expenses and other
|
|
|
(1,004
|
)
|
|
|
1,332
|
|
Changes in accounts payable and accrued liabilities
|
|
|
(5,440
|
)
|
|
|
(4,471
|
)
|
Change in income taxes payable
|
|
|
(87
|
)
|
|
|
365
|
|
Interest expense (excluding non-cash interest)
|
|
|
5,646
|
|
|
|
6,741
|
|
Income tax expense (excluding deferred tax benefit)
|
|
|
1,267
|
|
|
|
957
|
|
Other
|
|
|
146
|
|
|
|
57
|
|
Adjusted EBITDA
|
|
$
|
23,102
|
|
|
$
|
16,640
|
|
|
|
|
|
|
Adjusted EBITDA attributable to general partner
|
|
|
-
|
|
|
|
(2,300
|
)
|
Adjusted EBITDA attributable to non-controlling interests
|
|
|
1,219
|
|
|
|
248
|
|
Adjusted EBITDA attributable to limited partners / controlling
interests
|
|
$
|
21,883
|
|
|
$
|
18,692
|
|
|
|
|
|
|
Less:
|
|
|
|
|
Preferred unit distributions
|
|
|
1,412
|
|
|
|
-
|
|
Cash interest paid, cash taxes paid, maintenance capital expenditures
|
|
|
7,611
|
|
|
|
8,674
|
|
Distributable cash flow
|
|
$
|
12,860
|
|
|
$
|
10,018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Data
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
|
|
|
Twelve Months
|
|
|
Ended December 31,
|
|
|
Ended December 31,
|
|
|
2018
|
|
2017
|
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
Total barrels of saltwater disposed (in thousands)
|
|
|
3,854
|
|
|
3,747
|
|
|
|
14,782
|
|
|
12,588
|
Average revenue per barrel
|
|
$
|
0.78
|
|
$
|
0.65
|
|
|
$
|
0.80
|
|
$
|
0.67
|
Water Services gross margins
|
|
|
73.8%
|
|
|
51.8%
|
|
|
|
68.3%
|
|
|
58.5%
|
Average number of inspectors
|
|
|
1,375
|
|
|
1,101
|
|
|
|
1,214
|
|
|
1,145
|
Average number of U.S. inspectors
|
|
|
1,372
|
|
|
1,085
|
|
|
|
1,209
|
|
|
1,053
|
Average revenue per inspector per week
|
|
$
|
4,643
|
|
$
|
4,500
|
|
|
$
|
4,551
|
|
$
|
4,499
|
Pipeline Inspection gross margins
|
|
|
11.0%
|
|
|
11.0%
|
|
|
|
11.0%
|
|
|
10.0%
|
Average number of field personnel
|
|
|
26
|
|
|
20
|
|
|
|
23
|
|
|
20
|
Average revenue per field personnel per week
|
|
$
|
10,929
|
|
$
|
12,850
|
|
|
$
|
12,508
|
|
$
|
8,887
|
Pipeline and Process Services gross margins
|
|
|
22.4%
|
|
|
29.9%
|
|
|
|
28.6%
|
|
|
20.7%
|
Maintenance capital expenditures (in thousands)
|
|
$
|
138
|
|
$
|
169
|
|
|
$
|
656
|
|
$
|
481
|
Expansion capital expenditures (in thousands)
|
|
$
|
147
|
|
$
|
1,396
|
|
|
$
|
5,075
|
|
$
|
2,198
|
Distributions (in thousands)
|
|
$
|
2,510
|
|
$
|
2,498
|
|
|
$
|
10,031
|
|
$
|
9,985
|
Preferred unit distributions (in thousands)
|
|
$
|
1,412
|
|
$
|
-
|
|
|
$
|
1,412
|
|
$
|
-
|
Common unit coverage ratio
|
|
1.22x
|
|
1.28x
|
|
|
1.28x
|
|
1.00x
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20190318005156/en/ Copyright Business Wire 2019
Source: Business Wire
(March 18, 2019 - 6:50 AM EDT)
News by QuoteMedia
www.quotemedia.com
|